The post Donald Trump’s $24 Billion Tax on 401(k)s appeared first on CEPR.

 

 

I am up in Maine discussing economics and markets; bandwidth is hard to come by, as is reception. In the meanwihle, enjoy this 2019  Businessweek piece about the event

 

 

Talking Rates in the Maine Woods With Economists Over Good Wine
Taking place right before the Jackson Hole Economic Symposium, the gathering is a chance for money managers, traders, and economists to discuss crucial issues without restraint.
Businessweek, August 27, 2019

 

 

Let’s get this out of the way upfront: There is no such entity as the “Shadow Kansas City Federal Reserve Board.”

This isn’t a “The first rule of Fight Club” situation. No one denies that a gathering of money managers, bond traders, and economists has been taking place at Leen’s Lodge in Grand Lake Stream, Maine, for several decades. It’s just that most of the conversations are off the record or governed by the Chatham House Rule, which doesn’t allow identification of speakers without their permission. Many attendees have an affiliation with the Federal Reserve, as current or former employees, but aren’t authorized to speak on the Fed’s behalf.

The long weekend in Maine takes place shortly before the Jackson Hole Economic Symposium, an event dating to 1982, held in Wyoming and hosted by the Kansas City Federal Reserve. Hence, the gathering became known in some circles as the “Shadow Kansas City Federal Reserve Board” because of the Fed affiliation of many attendees, more than a few of whom head off to Jackson Hole right after the gathering.

The group makes no claim to any official imprimatur. Instead, “Camp Kotok,” as it has become known—after David Kotok, chairman and cofounder of Cumberland Advisors, who began holding the meetings more than 20 years ago—has fishing and drinking and hiking and shooting and smoking of cigars in the pristine wilds of Maine, all of which may be great fun, but it’s hardly the reason to gather each year.

The main draw is the opportunity to discuss and debate the big issues of monetary policy, economics, and finance, with a like-minded group of serious policy wonks and high-profile money managers, away from the usual routines of the office. At dinner the dining room represents about $2 trillion in capital, not counting attendees from various governments and central banks from around the world.

In the past, discussion topics ranged far and wide; but this year, the focus was all Fed all the time: whether it should cut rates and by how much; if the inverted yield curve is signaling a recession; whether negative bond rates from Japan and Europe would make their way here. Perhaps the most passionate discussions were on the independence of the Federal Reserve in the face of unceasing pressure from President Trump.

Almost all attendees related similar anecdotes about presidential pressure on the Federal Reserve. Harry Truman famously called the entire Federal Open Market Committee to lunch at the White House, warning, “If you don’t cut rates, you are doing Stalin’s bidding.” Lyndon Johnson invited Fed Chairman William McChesney Martin to his ranch in Texas. LBJ threw Martin against the wall, saying, “Boys are dying in Vietnam, and Bill Martin doesn’t care.” Ronald Reagan’s chief of staff, Jim Baker, invited Fed Chairman Paul Volcker to the president’s library, adjacent to the Oval Office in the White House. With Reagan sitting next to him, Baker told Volcker, “The president is ordering you not to raise interest rates before the election.”

In each of these examples, pressure from the U.S. president was private, personal—and mostly effective. The very concept of a public dispute between a president and his own appointed Fed chair was unthinkable. Not only because it might roil the markets, but simply because adults don’t behave that way.

Alas, those were simpler times, decades before presidential tweeting was a thing. Before public bullying and harassment campaigns, there was direct and personal persuasion. The record suggests it was an effective way for presidents to influence monetary policy. Attendees at Camp Kotok repeatedly noted the current approach was not only unseemly but also had not ever been effective. The president calling out his hand-selected FOMC chair to an audience of 60 million-plus Twitter followers doesn’t seem to be having the desired result.

At the Jackson Hole gathering, Fed Chairman Jerome Powell’s  speech was a refresher on the history of monetary policy in the post-world war era. The section on current circumstances gave little comfort to a president apparently concerned about a possible recession and its potential effects on his reelection chances. Powell appears to have figured out three important things:

1. In the current era of low rates, low inflation, and modest economic expansion, the Fed’s rate policy is having little to no impact on stimulating the broader economy. Consumers have been buying big-ticket items such as houses and cars, regardless of modest increase in rates we’ve seen the past two years; we are still at historically low and accommodative levels. It’s noteworthy that corporations have been borrowing large sums of capital not to invest and hire, but to buy back their own shares. Lowering rates won’t change that behavior; if anything, it will only encourage more of it.

2. The Fed cannot offset an ill-advised trade war. The economy is having the expected textbook reaction to tariffs, treating them as an unnecessary tax on consumer spending, both here and abroad. If there was any expectation on the part of the occupants of the White House that this would cause the Fed to blink and cut rates, they appear to have been mistaken. “While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rule book for international trade,” Powell said.

3. Perhaps No. 2 above occurred because of the following: Powell seems to have deduced that Trump can’t fire him—at least, not without causing a constitutional crisis. This last conclusion allows the chairman to focus on protecting his institution from undue pressure from the president.

Simply stated, the Fed believes cutting rates is not the panacea the president believes it to be. Therefore the Fed would rather wait to cut rates when it would be much more effective—in a mild recession—than risk an increase in inflation from an even more accommodative stance than we’re in at present.

~~~

To be invited to Camp Kotok, you must check three boxes: First, a group member must nominate you as someone capable of adding to the conversation. Original ideas, thoughtful disagreement, and intelligent variant perspectives are all welcome.

Second, you must get the thumbs-up from Kotok.

Third, the rules mandate that each attendee brings a case of wine. The group contains some serious oenophiles, and you’d best bring your A-game. Lots of thought goes into the wine selection—along with 20-year-old Scotch whisky, rare tequila, and the occasional brandy. This year I brought two cases of a delightful Spanish albariño from Ramón Bilbao; it was a cheap (so two cases) and unexpected delicious treat. It made a surprisingly good impression in the face of overrepresented—and overpriced—Napa Valley cabernets.

Most evenings there is a featured discussion before dinner. Senators, governors, and representatives have made appearances. Every Saturday night there’s robust debate. The topics include currency issues, the latest crises, and economic philosophy. The theme of this year’s Jackson Hole Economic Symposium was Challenges for Monetary Policy. So it was no coincidence that the debate, in Maine this year, ably moderated by Jim Bianco of Bianco Research LLC, was on Modern Monetary Theory, also called MMT. The surprising consensus was that whether it comes from the political Left or Right, MMT is inevitable. Expect future infrastructure projects, Medicare for all, and/or tax cuts to be funded by bonds authorized by Congress, issued by the Treasury, and purchased by the Federal Reserve. The group takeaway was as simple as it was snarky: “Free money! Whatever could possibly go wrong with that?!”

One cannot gather 50 economists and their ilk and not expect forecasting to occur. All participants answer 25 questions on where they think various prices and economic indicators will be one year hence. The stock market, unemployment, bond yields, gold, gross domestic product, yen, euro, inflation, oil, and other questions are not only discussed and forecast but gambled upon at $5 per prediction. I usually do pretty well, and this year I won $52. (Ties change the payouts.) Sizable side bets occur, and some people have been known to make rather large and ill-advised wagers under the influence of alcohol. I have done that, too, but thankfully, the rules preclude me from going into details.

There is a stable core of about 35 to 40 people, with a few newbies showing up each year to shake things up. Not everyone gets invited back. My slot opened up a dozen years ago when a Chicago currency trader decided to stand up in his canoe, flipping it over, sending everyone and everything on board into the lake.

My own tenure almost came to a premature end when I left a wet towel on a radiator to dry; it instead smoldered. Camp Kotok lore is that I almost burned down the cabin, and bank analyst Josh Rosner led a mock prosecution that evening to have me tossed out for my recklessness and negligence. My defense: This was no accident; I was trying to murder Rosner and his snoring bunkmate and fellow bank analyst Christopher Whalen, so the rest of us could get a night’s sleep. That this argument carried the day gives you some sense of the gallows humor of the dismal set who gather—and why I still get an annual invitation.

For a few years, electronic media were present in large numbers (including Bloomberg Radio and TV). One Friday evening, on Aug. 5, 2011, a television truck was accidentally still present—it couldn’t exit the narrow parking area because a car with a missing set of keys blocked the way—when Standard & Poor’s unexpectedly downgraded the credit quality of the U.S. It was a television producer’s dream, a huge news event scoop, with a live TV feed and a few dozen tipsy economists happy to chat about it, alcohol-induced buzz be damned. These were the first people to share their views with the world about what the downgrade meant. The consensus that it mattered much less than people feared was borne out by the subsequent course of history.

This year the concerns were focused on the many conundrums of monetary policy. The inverted yield curve—when short-term bonds pay a higher yield than the rates paid on longer-term bonds—is worrying, and the main question being debated was whether it was foreshadowing a recession or a sign that interest rates are still too low.

Yet the U.S. has the highest rates in the developed world, which is not ideal, in several economists’ view. The risk is a “giant flow of currency to the U.S.” to capture that yield, and an “overvalued dollar that is way too strong.”

Negative interest rates were even more worrying to the group. The entire economic system, it was pointed out, is based on positive interest rates. And if rates flip negative in the U.S., as they already have in Germany and Japan, no one knows what will happen.

 

 

Photos and videos here

 

 

 

Source:
Talking Rates in the Maine Woods With Economists Over Good Wine
Barry Ritholtz
Businessweek, August 27, 2019

 

The post Returning to Camp Kotok appeared first on The Big Picture.

Researcher Finds Backdoor In Chinese-Made Routers Sold Worldwide

Authored by Evgenia Filimianova via The Epoch Times,

Cybersecurity company VulnCheck said on Aug. 5 that it has found that more than 20 models of a Chinese-made wireless router sold worldwide contain a hidden backdoor that could allow unauthorized access to devices connected to the network.

File photograph of ethernet cables running from the back of a router in Washington on March 21, 2019. Mandel Ngan/AFP/Getty Images

The finding adds to growing Western concerns about cybersecurity risks posed by Chinese-made networking equipment. Western governments have warned for years about hackers exploiting such devices, and U.S. regulators moved this year to restrict imports of foreign-made routers.

Jacob Baines, chief technology officer at VulnCheck, who found the backdoor, said in a blog post that the vulnerability, dubbed "Endlessdoors," affects routers manufactured by Shenzhen Zhibotong Electronics Co. and sold under the Zbtlink and Wiflyer brand names.

Routers serve as the gateway between internet-connected devices and the wider internet, directing traffic to computers, smartphones, smart televisions, cameras, and other connected equipment. Because routers manage internet traffic between connected devices and the wider internet, vulnerabilities affecting them can expose entire home or business networks.

Baines estimates that at least 100,000 such routers are deployed worldwide. The backdoor Baines discovered automatically "dials the same tiny set of endpoints," Baines said in a blog post on the company's website. Whoever controls those domains could take control of the router and potentially use it to access other devices on the same network, he said.

Baines said most people who order this router and use it for their small business or home office would likely have no clue that it could allow this sort of access.

"If I have it in my lab, in my lab at my university, you just invited them straight into your lab and they can roam the network as they choose," Baines said. "The capabilities are devastating."

Western governments have warned about Chinese-linked hackers abusing small office and home office routers and other internet devices to gain access to networks for later intrusions as well as cyberespionage.

Beijing regularly denies condoning or carrying out cyberattacks or cyberespionage.

The Epoch Times reached out to Shenzhen Zhibotong Electronics/Zbtlink for comment but didn't receive a response by publication time.

US Scrutiny

The findings come as U.S. officials continue to increase scrutiny of networking equipment manufactured by companies with links to China.

In March, the Federal Communications Commission (FCC) announced restrictions on imports of certain foreign-made consumer routers over national security concerns.

The FCC said in a March 23 statement that foreign-made routers had been exploited by malicious actors to target U.S. households, disrupt networks, conduct espionage, and steal intellectual property.

"Foreign-made routers were also involved in the Volt, Flax, and Salt Typhoon cyberattacks targeting vital U.S. infrastructure," it added.

In February, Texas filed a lawsuit against TP-Link Systems, alleging the networking company exposed American consumers' devices to Chinese regime access.

In response to the lawsuit, TP-Link Systems, which was spun off from a Chinese company, said it would "vigorously defend" its reputation, called the allegations "without merit," and added that the Chinese communist regime has no form of ownership or control over the company, its products, or user data.

Risk for Networks

VulnCheck on Wednesday published a list of 20 affected models and urged organizations to determine whether any remain deployed in their networks.

VulnCheck said users should identify affected devices by their model numbers rather than the brand name because Zbtlink manufactures routers for other companies under original equipment manufacturer (OEM) and original design manufacturer (ODM) agreements.

The company recommended replacing affected devices where possible, restricting remote management access, and installing firmware updates if security fixes become available.

In this photo illustration, a hacker types on a computer keyboard on May 13, 2025. Oleksii Pydsosonnii/The Epoch Times Tyler Durden Thu, 08/06/2026 - 07:20

My morning pre-fishing reads:

• Your phone is the most intricate machine you’ve ever held. Let’s take it apart.Fingerprint Resistant Coating, Chemically hardened glass armour, An invisible grid that senses your fingers, and Millions of lights forming everything you see… (Everything Machine)

• The Investing Heavyweights That Backed Situational Awareness Before It Blew Up: The Wall Street Journal’s exclusive on Aschenbrenner’s imploding fund — the marquee names who piled in at the top, and the redemption queue forming now. Hedge fund behind aggressive AI bets tapped into roster of big-name investors; some warned the founder about the risks of heavy borrowing (Wall Street Journal) see also Situational awareness – do we have it? The companion research note on markets’ collective blind spots. Leverage in ETFs, margin accounts and hedge fund books that was encouraged by more than a decade of low and stable rates. Indeed, reports that over 3% of Korea’s adult population received a margin call over the last two weeks is deeply concerning if true.  (Deutsche Bank Research Institute)

• The Anatomy of a Blow-Up: Ted Seides dissects how funds die — the leverage, the crowding, the redemption spirals, and the pattern that repeats from LTCM to the present. (Capital Allocators with Ted Seides)

• US diesel prices overtake Biden-era average in blow to Trump: The Financial Times on the inconvenient fuel data — diesel is now more expensive than the average under the administration Trump ran against on energy prices. (Financial Times)

• Uber’s Strategy for Fighting Sexual Assault Suits: ‘What Were You Wearing?’ Emily Steel on a company that promised to handle claims “in a way that is best for the survivor” while its lawyers pursued a far more aggressive strategy. The ride-hailing giant promised to handle legal claims “in a way that is best for the survivor.” Its lawyers are pursuing a far more aggressive strategy. (New York Times)

• The Great Romance Slump: Faith Hill at a candlelit Manhattan loft for a “mindful singles event” designed as the antidote to dating apps. Ninety seconds into a three-minute hug with a stranger, she began to think dying alone might not be so bad. Why are so few young people finding love? (The Atlantic)

• How Does the Qatar-Donated Air Force One Compare With Other Presidential Jets?: The donated aircraft lacks midair refueling and nuclear hardening, and goes in for more modifications this fall. Boeing’s two next-gen planes are due in 2028, more than $3 billion in losses later. From laser weapons to color schemes, transporting the president around the world is a study in details (Wall Street Journal)

• GOP Staffers Say the Party Has a Groyper Problem: In group chats and at happy hours, party veterans fret that the pipeline of young Republican talent is veering into terminally online extremism. Party veterans are concerned that the pipeline of young Republican talent is veering off course — and into terminally online extremism. (Politico) see also Let’s Be Clear: Todd Blanche Is an Unqualified Hack Who Shouldn’t Be U.S. Attorney General: Esquire’s Charles Pierce holds nothing back on the AG nomination — the résumé, the conflicts, and the Senate Republicans pretending not to notice. If Congressional Republicans had any spine at all, they wouldn’t let something like this happen (Esquire)

• Why ‘super movers’ have healthier brains — and how to be one: Defined as people who are able to walk significantly faster than most of their aging peers, they are about half as likely to experience cognitive decline, a study found. The Washington Post on the research linking movement variety to cognitive health — it’s not just exercise volume, it’s the range of ways you move. (Washington Post)

• On ‘Ted Lasso,’ She’s Ruthless. Off Camera, She’s ‘Quite a Goofy Nugget.’: The New York Times profiles Hannah Waddingham ahead of the show’s fourth season — the West End years, the late-breaking stardom, and the Rebecca Welton evolution. Waddingham is a rare British actor to beat a path from musical theater to the screen. (New York Times)

Video of the day: I Asked Michelin Chefs How They Cook Steak

Be sure to check out a special bonus episode of Masters in Business interview with Mike Kelly, chief investment officer of Future Standard, a $90 billion multi-strategy platform for wealth management clients. Previously, he was at Omega Advisors and Tiger Management.

 

YouTube is now bigger than Netflix and Disney’s streaming services combined in terms of TV viewership in the US

Source: Nielsen via Bloomberg Screentime

 

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Iraq-Syria Pipeline to Bypass Hormuz Could Be Revived Within 3 Years

By Tsvetana Paraskova of OilPrice

An old Iraq-to-Syria oil pipeline that bypasses the Strait of Hormuz could be up and running within three years, a senior Syrian official has said.

The Hormuz crisis that cut off most of Iraq’s crude oil exports has accelerated plans by Iraq and Syria to rebuild a damaged oil pipeline to ship crude oil from the Iraqi fields in Kirkuk to Syria’s Mediterranean coast.

The completion of the renovation of the pipeline from Haditha in Iraq to the Syrian port of Baniyas would take “three years at most,” said Youssef Qablawi, CEO of the state-owned Syrian Petroleum Company.

Syria and Iraq have started negotiations to finalize the contract, and are also in discussions with companies that will invest in this pipeline, the executive said, as carried by Iraqi news outlet The New Region.

“Engineering studies and the purchase of materials will then begin, followed by construction. Implementation will take between 30 months and three years at most, after which the pipeline will be ready,” Qablawi told reporters.

The project is expected to consist of two pipelines with a capacity of between 1.5 million barrels per day (bpd) and 2 million bpd, according to the executive.

Last month, the United States voiced its support for the plan. The U.S. backs the Iraqi and Syrian efforts to rebuild the Kirkuk-Baniyas oil pipeline and diminish Iran’s potential to disrupt Hormuz traffic in the future, an official at the U.S. State Department told Reuters.

The United States also expects U.S. companies to play a role in the reconstruction of the Kirkuk-Baniyas oil route, according to reports. The pipeline would be crucial for Iraq’s oil exports not depending on Hormuz, Syria’s post-war economy, and reduced Iranian leverage in the Strait.

Iraq desperately needs export routes not depending on the Strait of Hormuz, whose closure exposed this key Iraqi vulnerability, forced OPEC’s second-largest producer to slash upstream production, and led to billions of U.S. dollars of lost revenues for Baghdad.

Tyler Durden Thu, 08/06/2026 - 05:00

Why On Earth Are They Doing This?

Authored by Steve Watson via Modernity News,

The Spanish Red Cross is treating the military-age men who swam around the border fence and stormed Ceuta like victims of an earthquake.

Volunteers in red vests are lining up on the sand at Playa del Trampolín, handing out bread, milk, biscuits, water, cans of tuna and pastries to the thousands who remain after last week's deliberate mass invasion from Morocco. Police stand by to keep the queues orderly while the same people who refused to go home sit and eat.

This is not a natural disaster. These men crossed into Spanish territory because the opportunity was created for them. There is nothing stopping Spanish authorities from sending them straight back. Instead the humanitarian apparatus has arrived with supplies.

The Red Cross is now handing out food and supplies to illegals in Ceuta as if they're victims of a natural disaster. They literally swam the coastline and invaded Spain because they felt like it and there is nothing preventing them from being sent home. pic.twitter.com/eAruK5wyiy

— m o d e r n i t y (@ModernityNews) August 4, 2026

Cadena SER and local outlets confirmed the first organised distribution of food since the crisis began. Cruz Roja and the local branch of Cooperación Sur-Sur handed out the packages to around 2,000 migrants, the majority from sub-Saharan Africa.

???? Red Cross in Ceuta handing out food and water to the migrants who just stormed Spanish territory.

Locals are furious and it's hard to blame them.

Carrots don't keep people away, sticks do...

Writer: Samuelpic.twitter.com/hanliozVRk

— Mario Nawfal (@MarioNawfal) August 4, 2026

National Police managed the lines so the recipients stayed seated until their turn, then returned to the beach to eat. One Nigerian man named Genesis told reporters he was "happy to finally have something to eat and drink." He said he had been trying to cross for months and now hopes for asylum.

African Migrants in Ceuta Complain About Treatment: 'No Food, No Blankets' pic.twitter.com/RmWGWe2oVA

— New York Post (@nypost) August 3, 2026

A Sudanese man named Malik Alher said he had gone five days without food, then added that he wants to "learn Spanish, live in Madrid and work in a supermarket."

The volunteers doing the handing-out look exactly like the usual crowd: white European leftist women. Locals watching the scene are furious, and for good reason. Feeding the people who just overran your city does not encourage them to leave.

This comes after Spanish officials spent days insisting the problem had solved itself. Foreign Minister José Manuel Albares claimed the "practical totality" of those who entered had returned to Morocco.

The Spanish Embassy in London repeated the line. Reality on the ground never matched the press releases. Streets remained full, facilities were stormed, and thousands simply stayed put on the beaches and around the CETI reception centre.

Local estimates of those left behind ranged from 2,000 to 15,000. But it's anyone's guess. Many of the remaining group are now openly declaring they will not go back. They are waiting for the next step toward the Spanish mainland and the wider European welfare systems.

?? A Spanish soldier in Ceuta said they are now ordered only to direct illegal migrants toward the border so they leave the country on their own.

"Right now we are not allowed to do anything else," the soldier has said.

For him, it is a personal sorrow what Sánchez's... https://t.co/nwDPZjRFyB pic.twitter.com/U19WqDSij5

— Visegrád 24 (@visegrad24) August 4, 2026

Muslim Invaders Chanting "Allahu Akbar" Have OVERTAKEN The Streets of Ceuta.

Police are completely overwhelmed.

The government wants you to think this isn't happening.

We are witnessing the total collapse of a nation. https://t.co/9VhvDWSP3A

— Benny Johnson (@bennyjohnson) August 3, 2026

The situation in Ceuta:

Thousands of invaders still remain. They've taken to forested areas around the city to avoid being captured.

Their goal now is to get on boats to the Spanish mainland. Social media is also full of calls by illegals to stage another mass invasion on the... pic.twitter.com/Q8JBQPwN36

— ???? ???? ?? ?? (@NiohBerg) August 4, 2026

Auf der marokkanischen Seite an der Grenze zu Ceuta warten Schwarzafrikaner auf ihre Weiterreise in die EU. Sie werden von den Behörden zurückgehalten, damit zuerst die Marokkaner nach Spanien eindringen können.

Sie nennen es "Zwischenhaltungs-Internatzentrum".

Das Video ist... pic.twitter.com/U8idHK1VAo

— ???? (@queru_lant) August 1, 2026

Some, have already been sent to mainland Spain.

?? Dozens of migrants were allegedly transferred from Ceuta to Andalusia, mainland Spain today.

Follow: @europa pic.twitter.com/BU0F9vJm21

— Europa.com (@europa) August 4, 2026

Vox leader Santiago Abascal has called the episode an "invasion and an act of war promoted by Morocco and allowed by Sánchez." He demanded the prime minister face legal proceedings.

Muslim Invaders in Ceuta are now BURNING the Countryside as they Continue TAKE OVER the Streets.

This is total chaos and collapse of a country.

It looks like a literal zombie apocalypse. pic.twitter.com/6GqklXUK4n

— Benny Johnson (@bennyjohnson) August 3, 2026

The People's Party has accused Sánchez of being on holiday while sovereignty was tested. Ceuta's own president Juan Jesús Vivas described the situation as "absolutely unsustainable" for a city of just 83,000.

Handing out free meals does not change the fundamental facts. These men were not shipwrecked, they did not come from a war zone. They walked and swam into Spanish territory in a coordinated surge that Morocco facilitated and Spain failed to stop.

Every ration distributed on that beach signals that the cost of illegal entry will be met with care packages rather than immediate removal. Carrots do not deter the next wave. Only the credible threat of being sent straight home does.

Spain's government can still choose enforcement over theatre. Until it does, the Red Cross will keep unpacking boxes for the people who invaded, and the residents of Ceuta will keep watching their city turned into a holding pen for those who refuse to leave.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Thu, 08/06/2026 - 02:00

The West Is Winning The Information War While Russia Prevails On The Battlefield

Authored by former CIA officer Larry Johnson

I stumbled across something pretty bizarre today when I queried one of the AI-search engines about Russia’s capture of territory in Ukraine in 2026. Here is what the Chinese KIMI claimed:

The evidence from multiple sources — including Ukrainian official claims, Western think tanks, and Ukrainian independent trackers — suggests that Ukraine recaptured substantially more territory than Russia captured during the first half of 2026, driven by the southern counteroffensive. However, the pace of Ukrainian gains has slowed since spring, and Russia has made small net gains in recent months (June–July). The overall net for the full year so far appears to still favor Ukraine, but the margin and the exact numbers depend heavily on whose methodology you use.

There you have it… Ukraine is winning the war on the ground according to AI. Let me emphasize that you will find this same propaganda on GROK or Claude. The Western propaganda effort is paying dividends on the information operation side of the house. Even the Chinese-coders who created KIMI are pushing Western propaganda.

via Al Jazeera

So let me give you the actual rundown for 2026. Russia started 2026 with Gerasimov’s report to Putin announcing the liberation of Pokrovsk (Krasnoarmeysk) — the Donetsk logistics hub under siege for nearly two years — and of Vovchansk in Kharkiv. Through November of 2025 the MoD had reported a steady run of captures, including Petrovskoye in the DPR and Tikhoye and Otradnoye in Dnepropetrovsk.

Moving into the spring of 2026, TASS reported that Russian forces liberated 63 settlements from March through May 2026 — 20 in March, 16 in April, and 27 in May, the strongest month. The regional breakdown was 21 in Kharkiv Region, 19 in the DPR, 14 in Sumy, six in Zaporozhye, and three in Dnepropetrovsk. The Sumy and Kharkiv gains are framed by Moscow as building a “security zone” along the Russian border.

By early summer (June), Gerasimov reported that Russian forces were continuing the liberation of “Donbass and Novorossiya,” advancing on all fronts. The 3rd Army was advancing toward Slavyansk and Kramatorsk — liberating Piskunovka, reaching the outskirts of Nikolayevka, and reported to be less than 5 km from the eastern edge of Kramatorsk, with the capture of Krasny Liman (Lyman) said to be due soon.

Battlegroup West advanced on a broad front; in the Kupyansk area, having repelled Ukrainian attempts to break through to western Kupyansk, with assault units pushing west toward Shevchenkovo. In the Dobropolye area north of Krasnoarmeysk, fighting in Dobropolye and Annovka, with Lenina (Ukrainian name Mirnoye) taken and Shevchenko, Krasnoyarskoye, and Svetloye reported as liberated.

In July TASS counted 32 settlements liberated, with 22 of them — over 68 percent — in Kharkiv Region and the DPR. By battlegroup: North took ten, Center eight, West six, East five, and South three, and the month’s most significant developments were the liberation of Konstantinovka in the DPR by Battlegroup East and the capture of Belitskoye by Battlegroup Center. Konstantinovka is one of the four Donetsk fortress belt cities.

At present the Russians are driving on the last major Ukrainian-held Donetsk agglomeration — the Konstantinovka–Druzhkovka–Kramatorsk–Slavyansk belt — alongside the Sumy/Kharkiv border zone and consolidation in Zaporozhye and Dnepropetrovsk.

Along with the ground operations in eastern Ukraine, Russia has ended Ukraine's ability to conduct maritime and trade operations from Odessa and Nikolaev since July 22nd.

Zelensky’s decision to strike Russian shipping in the Azov Sea made for some good pr for a few days during the big “Ukraine Turning The Tide” campaign, and triggered the expected Russian response, which is magnitudes more damaging to Ukraine. Stupid beyond belief. https://t.co/SIUDo2LtP5

— Mark Ames (@MarkAmesExiled) August 5, 2026

Ukrainian farmers will not be able to export products via the Black Sea ports and western supplies, which once flowed freely through Odessa. Ukraine’s maritime lifeline is severed and will not be in operation until after the war with Ukraine is over.

Finally, there is the daily Russian missile and drone attacks on Kiev and other key Ukrainian logistics and military hubs. The destruction of factories and warehouses is effectively bleeding Ukraine dry. The West persists in painting the war in Ukraine as a crusade that sits on the threshold of victory, but the realities on the ground tell a dramatically different, grim story… Ukraine is losing.

Tyler Durden Wed, 08/05/2026 - 23:25

End Of Cheap Food? Five Forces Set To Drive Grocery Bills Even Higher

UBS analysts identified five long-term forces likely to keep global food inflation "structurally higher" above its pre-pandemic average of about 2.5%, crushing consumer hopes that price pressures will simply fade.

"While food inflation globally has fallen from the COVID peak, a new debate is emerging: is the c2.5% LT average obsolete?" London-based managing director and equity-research analyst Sreedhar Mahamkali asked in a note penned on Monday.

Mahamkali and his team outlined five long-term drivers of global food inflation:

1. Climate risk is global, although its intensity differs by geography and commodity. Academic research suggests climate change could add around 0.9 to 3.2 percentage points to annual global food inflation by 2035.

2. Weak farm profitability limits investment and supply responsiveness globally. The pressure is most visible where farms are small, fragmented or exposed to volatile inputs, although scale, subsidies and access to credit can provide greater protection in some markets.

3. Higher welfare standards are lifting costs in animal protein. UK and European poultry provide the clearest current evidence, but similar changes in stocking density, housing, biosecurity and traceability are emerging across several markets.

4. Labor costs are rising across the food chain. The effect is strongest in labour- intensive farming, processing, logistics, food service as well as the front-end retail, although productivity, automation and the availability of lower-cost labour produce meaningful regional differences.

5. Supply flexibility is constrained globally: some markets face limited land expansion and tighter standards, while others contend with underinvestment and climate vulnerability.

"We expect food-at- home to start regaining share from historical lows, suggesting higher spend in the Food Retail channel with potential tailwinds as we demonstrate with a UK case study. On the other hand, wallet share compression of the discretionary categories means food-away- from-home and non-food retail are more vulnerable," the analyst pointed out.

He expects food inflation to run above historical levels in the UK, Europe, Australia, Southeast Asia and China, while remaining broadly unchanged in the US and Latin America and declining in India:

The UK faces all five drivers, but a rational competitive landscape enables better pass- through, leaving it as the best-positioned retail market.

Europe too faces many of the pressures, but greater fragmentation dilutes pricing power. In the fragmented US, structural cost pressure is largely offset by competition, likely leaving inflation in line with history.

In Latam, Brazil is relatively insulated with moderate impacts from labour cost inflation, welfare standards and a better supply outlook aided by technology with the outlook the same as history.

By contrast, ASEAN sees a sticky underlying cost base and a potential El Niño in H2 suggesting sustained pressure. China is likely to see a gradual increase in food inflation as external cost pressures are effectively transmitted.

Higher operating costs persist in Australia with regulation/welfare standards leading to higher inflation with some costs likely absorbed by retailers. India is the exception, benefiting from policy intervention and productivity gains with lower inflation than in the past.

Visualizing: Food prices could keep rising faster than they did before Covid, remaining above the historical average of about 2.5% annual inflation. Several long-term pressures are making food permanently more expensive.

For the food inflation narrative to continue, the analysts outlined what they are tracking over the next six months:

Here are the winners and losers under different food inflation scenarios:

Five out of eight regions are likely to see higher inflation:

The era of cheap food may be ending. Food inflation could further ignite as other Wall Street desks warn about El Niño risk developing and Professional subscribers can read those notes here at our new Marketdesk.ai portal. 

Tyler Durden Wed, 08/05/2026 - 23:00

US Lifts Sanctions On Iraqi Airline Blacklisted Over IRGC Ties

Via The Cradle

The US Office of Foreign Assets Control (OFAC) lifted sanctions on Iraq's Fly Baghdad Airlines and two of its aircraft on Wednesday, clearing a carrier Washington had blacklisted in January 2024 over alleged support for Iran's Islamic Revolutionary Guard Corps (IRGC) Quds Force. 

The Baghdad-based carrier was delisted from the Specially Designated Nationals (SDNs) list under each of its three registered names, Fly Baghdad Airlines Company, Fly Baghdad, and Iraq Express.

@JetPhotos

Two Boeing 737 aircraft flown by the airline, carrying the tail numbers YI-BAF and YI-BAN, were removed from the list at the same time.

A US Treasury official, who spoke anonymously, told AFP that the airline had cleared the department's administrative reconsideration process.

"FBA (Fly Baghdad Airlines) has demonstrated major changes to their operations such that their listing is no longer warranted," the official said.

The same official said the delisting is "not indicative of any shift in US policy toward the Government of Iran, the Islamic Revolutionary Guard Corps-Qods Force, any designated terrorist organization, or any person who supports or acts on behalf of any of these."

Not every restriction tied to the airline has been dropped. Basheer Abdulkadhim Alwan al-Shabbani, the Iraqi national identified as the company's owner when the sanctions were first imposed, remains blacklisted.

His entry was rewritten so that the designation now cites the IRGC Quds Force directly instead of Fly Baghdad.

Washington first designated the airline, its aircraft, and its owner in January 2024, alleging the company supported Iran’s Quds Force and allied groups in Iraq, Syria, and Lebanon.

The delisting comes amid a broader US sanctions campaign that continues to target Iran’s IRGC-linked logistics and aviation networks. 

There is some reporting that Treasury removed Iran-related sanctions from its website. A Treasury official tells me, “This is not indicative of any shift in U.S. policy toward the Government of Iran, the Islamic Revolutionary Guard Corps—Qods Force, any designated terrorist…

— Jacqui Heinrich (@JacquiHeinrich) August 5, 2026

Just last week, Washington sanctioned entities tied to Mahan Air, which it alleges helps move weapons, personnel and equipment for the IRGC Quds Force. 

The action also hit support firms in China, India and Russia that Treasury says served as the airline’s sales agents and logistics intermediaries.

Tyler Durden Wed, 08/05/2026 - 22:35

China Is Betting AI, Hypersonic Missiles And Quantum Technology Will Define The Next Era Of Warfare

As China races to modernize its armed forces, its strategy is increasingly centered on developing technologies that could offset America's traditional military advantages instead of matching the U.S. system for system, according to the South China Morning Post.

That philosophy dates back to Unrestricted Warfare, a book published in 1999 by former PLA strategist Qiao Liang. Rather than copying America's arsenal, Qiao argued China should focus on capabilities Washington lacks. Nearly three decades later, he says the concept still applies. Modern militaries, he said, are now "building weapons for the wars they expect to fight, rather than fighting wars with the weapons they possess."

With the People's Liberation Army approaching its 100th anniversary next year, Beijing is expected to unveil another round of modernization goals as it works toward Xi Jinping's objective of creating a "world class military" by 2049. Analysts say the focus has shifted beyond simply catching the United States. China wants to help define the next era of warfare through artificial intelligence, quantum technology, hypersonic missiles, laser weapons and autonomous systems.

That ambition is perhaps most visible in aviation. The public appearance of China's tailless sixth generation fighter prototypes has fueled speculation that Beijing could be setting the pace in next generation air combat. Military analyst Fu Qianshao called the development "a landmark event," arguing that China is no longer just following trends established by the United States and Russia.

SCMP writes that future battlefields, analysts say, will revolve around connected, intelligent systems rather than individual weapons. Piloted aircraft may direct fleets of drones, armored vehicles could become mobile command and sensing platforms, and combat operations will increasingly link forces across land, sea, air, space and cyberspace with artificial intelligence playing a growing role in decision making.

China is investing heavily across that spectrum. The PLA has accelerated work on advanced aircraft carrier technology, AI powered drone swarms, underwater autonomous vehicles, electronic warfare and high performance computing. Much of that development is supported through Beijing's military civilian fusion strategy, which combines military research with universities and private technology companies.

Among the most closely watched programs are hypersonic weapons, quantum communications and artificial intelligence. China is widely regarded as a leader in hypersonic missile development and has spent years building quantum communication networks that could strengthen secure military communications. AI is already being tested for intelligence analysis, battlefield planning and autonomous drone operations.

Chinese planners have also closely studied the wars in Ukraine and the Middle East, where drones have transformed modern combat. That has accelerated work on laser and microwave based air defense systems designed to defeat large drone swarms before they can reach their targets.

Even so, analysts caution that emerging technologies are unlikely to replace traditional military power on their own. Instead, they are expected to strengthen existing forces by making conventional ships, aircraft, missiles and ground units faster, more connected and more effective while introducing new opportunities and new risks.

Tyler Durden Wed, 08/05/2026 - 22:10

Former Haitian Police Officer And Naturalized US Citizen Pleads Guilty To Gun Running

Authored by Michael Clements via The Epoch Times,

A naturalized U.S. citizen and former Haitian National Police officer pleaded guilty to smuggling at least 140 firearms to Haiti.

Soldiers patrol amid the sound of gunshots heard in the distance in Port-au-Prince, Haiti, on Oct. 17, 2024. Odelyn Joseph/AP Photo

Jean Robert Casimir, 53, of Lauderhill, Florida, pleaded guilty in U.S. District Court for the District of Columbia to conspiracy, smuggling, and violation of the Export Control Reform Act on Tuesday, Aug. 4.

According to court records, Casimir admitted to engaging in an extensive firearms trafficking operation since 2020.

He was arrested on Dec. 16, 2024, in Lauderhill and indicted on Jan. 23, 2025. His sentencing is set for Dec. 4.

Casimir told the court that from August 2020 through December 2024, he illegally exported guns from the United States to Haiti without the required license from the Department of Commerce's Bureau of Industry and Security.

He told the court he purchased the guns for his security business, which hires off-duty Haitian National Police officers to provide armed security for people visiting the island.

According to an arrest warrant affidavit, Homeland Security investigators saw photographs of firearms used by Haitian gangs in which serial numbers were clearly visible. The affidavit stated that the guns were traced back to legal purchases Casimir made at a Florida gun store in 2020.

Casimir denied selling guns to gang members. He said the guns were stolen from one of his employees during a robbery.

To smuggle the firearms, Casimir and his co-conspirators disassembled the guns, encased them in a foam insulating material and sealed them in industrial air compressors they had cut open and welded back together. They shipped the air compressors to Haiti from Miami.

The investigation was a combined effort by the FBI Miami Field Office, Homeland Security Investigations (HSI) Washington, D.C., and HSI Miami with assistance from the Bureau of Alcohol, Tobacco, Firearms and Explosives and U.S. Customs and Border Protection.

The case is being prosecuted by U.S. Attorneys from the District of Columbia and the U.S. Department of Justice (DOJ) National Security Division, with assistance from the U.S. Attorney's Office for the Southern District of Florida.

According to a DOJ press release, the case is part of a Homeland Security Task Force (HSTF) initiative to eliminate criminal cartels, foreign gangs, transnational criminal organizations, and human smuggling and trafficking rings operating in the United States and abroad.

"Through historic interagency collaboration, the HSTF directs the full might of U.S. law enforcement towards identifying, investigating, and prosecuting the full spectrum of crimes committed by these organizations," the press release states.

According to data released by the United Nations Human Rights Office, there are an estimated 270,000 to 500,000 illegal weapons in circulation in Haiti, even though country does not manufacture guns or ammunition.

Haiti has been overrun by armed gangs and vigilante groups for more than a decade.

Political corruption and natural disasters have destabilized the country. As the government struggled to deal with the crises, powerful gangs took control of various areas, including the capital, Port au Prince.

Armed off-duty police officers take cover during an exchange of gunfire with army soldiers as they protest over police pay and working conditions in Port-au-Prince, Haiti, on Feb. 23, 2020. Dieu Nalio Chery/Ap Photo Tyler Durden Wed, 08/05/2026 - 21:45

Declassified Documents Show FBI Probed Whether Trump Fired Comey At Russia's Direction

Authored by Zachary Stieber via The Epoch Times,

Newly declassified documents show the FBI probed President Donald Trump's termination of the agency's director as part of an effort to substantiate allegations that Trump colluded with Russia.

Former FBI Director James Comey in Berlin, Germany, on June 19, 2018. Carsten Koall/Getty Images

The documents, declassified by a White House task force on Aug. 5, refer to Trump's firing of FBI Director James Comey on May 9, 2017.

In one of the documents, dated May 16, 2017, the FBI said it was opening an investigation "based on an articulable factual basis that reasonably indicates that President Donald J. Trump may be or has been, wittingly or unwittingly, involved in activities for or on behalf of the Government of the Russian Federation which may constitute violations of federal criminal law or threats to the national security of the United States."

The goal of the investigation "is to determine if President Trump is or was directed by, controlled by, and/or coordinated activities with, the Russian Federation in a manner constituting a threat to the national security of the United States and/or a violation of federal criminal statutes," the document states.

The investigation, codenamed Oxferd Comma, would also look into whether Trump and "others yet to be named" obstructed or conspired to obstruct any related FBI investigations, according to the document.

That included whether Trump's firing of Comey was linked to the FBI probing Russian efforts to influence the 2016 election, the document said.

Comey was fired after officials determined he mishandled a probe into then-Secretary of State Hillary Clinton's use of a personal server to send classified emails, including announcing without clearance from the attorney general that the case should be closed without prosecution, according to a memorandum from then-Deputy Attorney General Rod Rosenstein to the attorney general that was later made public.

Trump said shortly after Comey's termination that he fired Comey due to his mishandling the probe of Clinton, who ran against Trump in the 2016 election.

The document opening the probe said that Trump's rationale for firing Comey "has changed over time."

While Trump initially in public attributed the decision to conclusions from Rosenstein and then-Attorney General Jeff Sessions, and the White House said in a statement that the firing had "nothing to do with Russia," Trump said in a television interview several days later that he was going to fire Comey regardless of the recommendation from Department of Justice officials because "this Russia thing with Trump and Russia is a made up story."

James Baker, the FBI's general counsel at the time, and William Priestap, the FBI's assistant director for counterintelligence at the time, signed off on the probe, and other top FBI officials, such as acting FBI Director Andrew McCabe, were aware of the investigation, according to the document and other papers.

The White House Government Transparency Task Force declassified and released the documents.

Trump created the task force in May to advise him on documents "that should be declassified and/or released to the public to further his administration's priorities of transparency and accountability," according to a July 13 statement from the task force.

John Solomon, chairman of the task force, said in a statement released by the White House that evidence when the investigation was opened already undercut suspicions that Trump was acting as a Russian asset, including testimony from FBI special agent William Barnett.

The White House declined to comment.

The FBI did not respond to a request for comment by publication time.

The probe into Trump's termination of Comey was closed on April 9, 2019, after special counsel Robert Mueller concluded that there was no evidence to support claims that Trump and his campaign colluded or coordinated with Russia.

"The Special Counsel provided the Attorney General with a confidential report explaining his prosecution and declination decisions," the document outlining the closing of the investigation reads.

Tyler Durden Wed, 08/05/2026 - 20:55

Fresh Panic As Pentagon Has Used 'Virtually All' Its Long-Range Precision Missiles On Iran

US forces "used up virtually all" of their precision, long-range missiles during the course of the Iran war, and during the earlier heavy US-Israeli campaign of Operation Epic Fury, Reuters reported Tuesday.

This has raised serious "concerns about the military's ​readiness for future conflicts," informed sources told the outlet. In particular it is the Army Tactical Missile Systems (ATACMS) and Precision Strike Missiles (PrSM) which are said to be running critically low.

US Army file image

"Washington has used virtually all of these weapons," two sources told Reuters, after several media reports and think tank studies had already sounded the alarm over dwindling missiles amid both the Iran war and in the years-long process of supplying Ukraine. Low Patriot defense missile supplies have also been a persisting issue in the headlines.

They are costly and time-consuming in terms of manufacturing replacements. For example a single ATACMS munition costs about $1 million.

One immediate consequence could be that if heavy bombardment of Iran starts up again, the US would have to conduct riskier piloted aerial bombings - instead relying on longer range precision strikes afforded by the land-based systems at safer distances.

And another, somewhat obvious consequence, is highlighted in the following: "But as ​the war drags on, the three people familiar with the matter expressed worry that the falling missile supplies could limit the U.S. ability to deter adversaries, including Russia and China."

The report added: "A fourth person ⁠familiar with the matter said that while Central Command — which oversees U.S. forces in the Middle East — has nearly used up the land-based missiles it had before the war began, it has been able to reload from U.S. military supplies elsewhere in the ​world."

President Trump has of late responded to these now widespread reports of badly depleted advanced munitions, explaining that "Our defense companies are, at this moment, making more munitions than they have ever made before, ​in addition to expanding their plants and equipment at record levels."

Additionally,  Secretary of War Pete Hegseth took to social media to refute the report, calling it false news.

“That banner is NOT TRUE, CNN. Shame on you,” the Pentagon chief said in a post on X. “We don’t hate the Fake News media enough.”

Hegseth was specifically referring to a CNN on-screen banner that read: “Sources: U.S. has used nearly 80% of key missile interceptors in Iran war, top commanders warn stockpiles dangerously low.”

However, the Reuters report has set off speculation that Trump's weekend backtracking on planned 'harder' Iran strikes could have been in part because the Pentagon has warned of waning supplies and capabilities regarding conventional way of doing long-range missile strikes.

We’re out of crucial defensive weapons systems, and now we’re out of crucial offensive weapons. Other than that, Sir, how’s the war going? https://t.co/qXNiSLHQho

— Mark Ames (@MarkAmesExiled) August 4, 2026

Critics of the decision to go to war in the first place have warned over this very scenario of exhausting Pentagon stockpiles. Those against this war of choice say that it's the opposite of America First - and that ultimately the war is about protecting Israel and not necessarily American security and interests.

The reality also is that in the opening days of Operation Epic Fury, the US seemed underprepared for the ferocity of the Iranian response. At least 13 American bases in the region were hit and damaged in just the opening weeks of the war, to the point that US forces across the region had to be moved back from front line Gulf areas, and energy sites across the region were pummeled and suffered billions of dollars in damage.

Tyler Durden Wed, 08/05/2026 - 20:30

China's Power Demand Hits Records As Heatwave Grips Key Regions

By Irina Slav of OilPrice.com

Electricity demand in much of China hit a record this week due to scorching summer temperatures, driving grid loads to all-time highs, the State Grid Corporation of China said today, as cited by Reuters.

On Monday and Tuesday, the company said, electricity loads reached a record in the country’s northern, northeastern, and eastern regions. No blackouts have been reported, however, as the grid operator moves in time to direct more baseload electricity where it is needed for air-conditioning.

According to forecasts from the Chinese state meteorological agency, temperatures across much of China will remain high, in some cases potentially reaching or even exceeding historical peaks, the Reuters report also noted.

In January this year, State Grid Corporation of China, the world’s largest utility enterprise covering 88% of China’s land area and serving over 1.1 billion people, said it planned to spend $574 billion (4 trillion Chinese yuan) on fixed-asset investments for the five years to 2030, as part of its 2026-2030 investment plan.

The sum is 40% higher than what the State Grid Corporation of China spent in the previous five-year investment period to 2025. The company will use the money to upgrade and expand the power transmission and distribution systems amid a surge in renewable energy capacity installations and a continued rise in electricity demand.

China is the world’s biggest builder of wind and solar, but it has also expanded its coal-powered generation capacity to ensure stable supply that can respond to demand changes in a timely fashion. Yet the country is also building out its battery storage capacity to be able to utilize more of its wind and solar electricity output. China plans to have its battery storage capacity more than double to 180 gigawatts by 2027 in a new plan aimed at attracting $35.1 billion (250 billion yuan).

Tyler Durden Wed, 08/05/2026 - 20:05

Federal Operation Takes More Than 800 Dangerous Truckers Off US Highways

Authored by Kimberly Hayek via The Epoch Times,

Federal authorities took more than 800 dangerous truckers off America's roads in a three-day enforcement action, officials revealed Tuesday. In the operation, they targeted unqualified foreign drivers and unsafe commercial vehicles.

A truck drives through the Port of Oakland in Oakland, Calif., on Nov. 14, 2025. California has revoke 17,000 commercial driver’s licenses improperly issued to foreign drivers, about 2.5 percent of all commercial licenses in the state. Justin Sullivan/Getty Images

The most recent wave of Operation Highway Shield was conducted from July 28 to July 30. Inspectors from U.S. Immigration and Customs Enforcement's Homeland Security Investigations collaborated with the Federal Motor Carrier Safety Administration and state highway patrols. They conducted roadside checks on illegal, unvetted drivers and vehicles that failed basic safety standards.

Officers detained 51 illegal immigrants over the course of three days, including 21 drivers holding non-domiciled commercial driver licenses issued by California and New York. Authorities placed 766 unsafe drivers and vehicles out of service. They arrested 86 operators for dangerous behavior, such as road rage and domestic violence. Officials issued 36 violations for failing English language proficiency tests, and nearly $1 million in stolen cargo was recovered.

Department of Homeland Security (DHS) Secretary Markwayne Mullin and Department of Transportation (DOT) Secretary Sean Duffy announced the early results. Mullin underscored the risks unqualified drivers pose when they are behind the wheel of large trucks.

"When illegal aliens are behind the wheels of semi-trucks, they are putting American lives in danger," DHS Secretary Markwayne Mullin said in an X post.

Duffy said the effort was part of President Trump's directive to secure roads, eliminate fraud, and restore integrity to the trucking industry.

"Every life lost from an illegal trucker behind the wheel of a big rig is a completely preventable tragedy - and this administration will not stand for it," Duffy said.

"If you continue to illegally operate a big rig - your days on America's streets are numbered," the Secretary warned.

Last month, DHS and DOT announced a partnership in an effort to probe fraudulent and illegal practices at commercial driver license schools. Officials have said the schools issue credentials to unqualified individuals, including illegal immigrants, allowing them to drive semi-trucks on public highways.

Roadside inspections entail officers checking licenses, testing language proficiency required for reading road signs and understanding instructions, examining vehicle condition, and reviewing driver records. Failures in any of those areas can lead to immediate out-of-service orders. The targeted driver or vehicle can no longer be operated until deficiencies are fixed or the driver is removed from the road.

English language proficiency has become a key area of focus. Federal rules require commercial drivers to be capable of communicating sufficiently in English to understand highway signs, respond to law enforcement, and handle emergencies.

Tyler Durden Wed, 08/05/2026 - 19:15

Tit-For-Tat: China Hits Back At US With Tighter Drone Export Controls

Sino-US relations are showing renewed signs of deterioration ahead of President Xi Jinping's expected visit to the US in late September. Beijing is retaliating against a series of recent U.S. trade restrictions.

The Financial Times reports that the Commerce Ministry is set to review exports of drones, critical components, and related dual-use technologies on a "case-by-case basis." The report did not mention the exact details.

The ministry also barred Chinese companies from dealing with Applied DNA Sciences and five other U.S. entities accused of "supporting illegal U.S. sanctions concerning Xinjiang."

The ministry's announcements come as the Trump administration has added 43 Chinese companies to its forced-labor import blacklist and imposed tighter Federal Communications Commission restrictions on Chinese drones, routers, telecommunications equipment, and other high-tech devices.

Here's the reporting on US restrictions:

• "Safeguard Our Homeland": FCC Moves To Ban Foreign Military-Grade Drone Imports
• Trump Admin Set To Ban Chinese Robots In "Economic Security" Push
• Trump Admin Drafting Ban On Chinese Optical Transceivers To Protect Data Centers From Spying

The "measures seriously violate the important consensus reached by the two heads of state and severely damage China's legitimate rights and interests. China has no choice but to take necessary countermeasures in response," the ministry wrote in a statement.

Uncertainty surrounding Beijing's drone export controls should concern U.S. hobbyists and commercial operators. China remains the epicenter of the global drone industry and is home to major manufacturers, including DJI, Autel Robotics, and XAG, leaving US buyers exposed to potential disruptions in drones, components, and replacement parts.

Looking ahead, Xi is expected to arrive at the White House on September 24 for a meeting with President Trump.

"President Xi is coming over on September 24, and ‌we talked about it (artificial intelligence) when I was over in Beijing, and we'll be talking about it again," Trump recently said.

Polymarket odds have Xi's US visit at 93% odds.

//--> //--> Will Xi Jinping visit US before 2027?
Yes 93% · No 8%
View full market & trade on Polymarket

The only problem here is that shell companies and intermediaries can often find workarounds to corporate sanctions. That became clear earlier this year when banned Nvidia AI chips ended up in China.

Tyler Durden Wed, 08/05/2026 - 18:50

Argentina's Milei: Ending the Debt State By Holding Politicians Personally Accountable For Fiscal Excess

Submitted by Thomas Kolbe

Only contrast reveals one's own mistakes. Javier Milei is the antithesis of Germany's political class, and the comparison could hardly be starker.

While Germany continues to expand the state, Argentina is slashing subsidies and radically reducing the size of its public bureaucracy. While Berlin piles up enormous amounts of public debt, Buenos Aires is posting a primary budget surplus. Friedrich Merz believes in the healing powers of state intervention, whereas Milei is deregulating markets and paving the way for an investment boom.

Argentina has achieved an economic turnaround while Germany continues its economic decay. Argentina's economy is growing steadily, private-sector employment is expanding, and the poverty rate is falling rapidly.

At a time when Germany is doubling down on debt, the arms industry, and green state planning, Milei appears like a comet defying both political gravity and conventional doctrines of government.

The Argentine president's latest initiative is the so-called "Grillete Fiscal"—literally, the "Fiscal Shackles."

Behind the martial name lies what amounts to a fiscal revolution. Milei first unveiled the proposal in his characteristically entertaining style during a televised address to the Argentine people. The bill must still be approved by Congress, where his party, La Libertad Avanza, is expected to secure the support of allied parliamentary factions in both chambers.

Although Milei lacks a parliamentary majority of his own, his alliances have thus far proved remarkably resilient.

If enacted, the legislation would break with one of modern politics' unwritten rules: the assumption that governments can always buy votes with higher spending, higher taxes, and ever more debt. The business of burdening future generations and taxpayers with politically manufactured credit expansion would, at least for the time being, come to an end.

Milei's idea is straightforward: future Argentine governments should have their wings clipped before they are even able to take flight on another debt-financed spending spree.

The mechanism is equally straightforward. Should the federal budget remain in deficit for several consecutive months, Congress would be given a deadline to restore fiscal balance. Failure to do so would automatically trigger a U.S.-style government shutdown. Non-essential government activities would be suspended automatically—without further parliamentary debate or political horse-trading. The President, Vice President, cabinet ministers, state secretaries, and every member of both houses of Congress would receive not a single peso in salary until the budget is balanced once again.

Furthermore, all new spending would be frozen. No new contracts could be awarded, and no additional public employees could be hired. Even more striking, discretionary transfers from the federal government to Argentina's provinces would also be suspended.

At the same time, the law deliberately protects the state's core responsibilities. Pension payments, healthcare services, unemployment benefits, as well as the salaries of police officers, members of the armed forces, and correctional staff would remain fully exempt from these austerity measures.

For Germany's statists, such a proposal is almost unthinkable. Rather than engaging with Milei's ideas or his policies, they prefer to ignore him altogether. For Chancellor Friedrich Merz, Milei has become something of a red flag. On one occasion during a televised interview, Merz claimed that the Argentine president was ruining his country and trampling on its people.

A typical Merz response. The German chancellor views the world through a prism that distorts reality. He speaks like a genuine believer in the omnipotent state—a conviction that has never been shaken by a lifetime spent safely within the political establishment.

Then, every once in a while, someone breaks ranks within Germany's left-wing consensus and says out loud what many of them truly think about Milei. He is supposedly "authoritarian," they claim, and a threat to human rights. In April of this year, Germany's Left Party even introduced a parliamentary motion describing Milei as "ultra-neoliberal." Coming from one of Germany's most statist political parties, such a label should be taken as a compliment. It says far more about the intellectual limitations of its authors than about Milei himself.

What is both striking and disturbing is how closely the German chancellor's rhetoric has drifted toward the coarse vocabulary traditionally associated with the political left.

Yet even Javier Milei cannot truly satisfy Germany's libertarians. Their intellectual figurehead, Hans-Hermann Hoppe, the former University of Nevada, Las Vegas professor and a student of Murray Rothbard, complained only months into Milei's presidency that he had failed to deliver on his central campaign promise: abolishing the central bank.

The criticism exposes a fundamental weakness of many libertarians: they inhabit the theoretical world of textbook logic. Within that framework, it seems inconceivable that abolishing the central bank overnight could derail Milei's entire presidency. It requires little imagination to picture the alternative—a financial collapse followed by the fall of the government, precisely the kind of scenario that would jeopardize Milei's entire reform project.

But it is not Milei's job to please everyone. In the end, every successful political leader disappoints almost every constituency. He hands out no favors and makes no empty promises. His uncompromising austerity program is detoxifying the state, restoring market economics, dismantling subsidies—and turning into losers all those who had long lived off the public purse without productive contribution, sustained by political patronage rather than genuine economic necessity.

If Milei stays the course and Argentina continues to regain stability, he is likely to go down in the nation's history as a libertarian reformer who combined conviction with prudence. Germany's statists—from Friedrich Merz and Lars Klingbeil to Ursula von der Leyen—would do well to prepare themselves. They may ignore him, ridicule him, or insult him, but reality has a habit of quietly making its way into people's minds.

As Nietzsche wrote in Thus Spoke Zarathustra: "Thoughts that come on dove's feet guide the world." Sometimes, however, they arrive accompanied by the roar of a chainsaw.

* * * 

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

Tyler Durden Wed, 08/05/2026 - 18:25

Japan Looks To Palantir For Battlefield AI

Japan is preparing to introduce AI into the command-and-control systems of its Self-Defense Forces as part of a wider military modernization effort aimed at improving operational speed and interoperability with the United States, according to Nikkei. 

Under the proposal, multiple U.S.-developed AI platforms would support commanders by processing battlefield data, assisting with tactical decisions, and coordinating operations across missions such as missile defense, counterstrikes, and drone deployments. The initiative is expected to be incorporated into revisions of Japan's national security strategy later this year as the government reshapes its defense posture over the next five years.

Among the technologies under consideration are Palantir's Maven Smart System, which analyzes intelligence and recommends targets and tactics, and Anduril's Lattice AI, which fuses information from sensors into a single operational picture while enabling autonomous coordination of drones and other assets in contested environments.

Nikkei reports that Japan currently lacks AI-enabled command systems, but officials see the technology as essential for keeping pace with increasingly data-intensive and fast-moving military operations. As cooperation with U.S. forces deepens, particularly following the launch of the Joint Operations Command in 2025, narrowing the gap in decision-making speed has become a growing priority.

At the same time, Tokyo is seeking to avoid long-term dependence on foreign technology. One proposal would place a Japanese-developed AI layer above the U.S. systems to determine which model is best suited for a given task. Sakana AI's Fugu, designed to orchestrate multiple AI models, has emerged as a leading option for this role and already works with Japan's Defense Ministry.

The government also plans to host the supporting data infrastructure within Japan to better protect sensitive military information. Even so, officials acknowledge that maintaining compatibility with U.S. AI platforms will be critical, creating a balance between rapidly adopting proven foreign technology and preserving the flexibility to transition to domestic AI capabilities in the future.

Tyler Durden Wed, 08/05/2026 - 18:00

OpenAI, Anthropic Models Created Fake Profiles, Tried To Trick Humans During Cyber Tests

Authored by Naveen Athrappully via The Epoch Times,

Artificial Intelligence (AI) models from Anthropic and OpenAI carried out unsanctioned actions targeting multiple people and organizations during a cyber evaluation, according to the UK AI Security Institute (AISI).

Illustration of Anthropic on June 18, 2026. Riccardo Milani/Hans Lucas via AFP via Getty Images

AISI, which receives access to advanced AI models under voluntary agreements from major labs, put the agents through a fictional cybersecurity scenario to test capabilities.

The organization tested multiple AI models on two cyber challenges between July 25 and 28. In total, the challenges were run 122 times across several models, and in 19 cases, the AI models took "unsanctioned action on the live internet, including cases that targeted real people and organisations," AISI said in an Aug. 4 report.

Out of these, 17 were done by Anthropic's Mythos 5 model and two by OpenAI's GPT 5.6 Sol model.

"This is the first time AISI has seen deception of this severity that was targeted at a real person, unprompted, in the real world. It is uncertain to what extent the model recognised it was taking actions against real people," AISI stated in the report.

In the most serious incident, Mythos 5 tried to solve a cyber challenge by attacking GitHub, a cloud service that allows developers to store and manage code. The AI created a GitHub account and tried to get a malicious code approved by humans. Mythos 5 also created a second GitHub account, masquerading as another human user endorsing the malicious code. When a human reviewer caught the activity, the AI agent "falsely claimed to have made an honest mistake" and then repeatedly tried to reintroduce the malicious content by claiming the code was fixed.

Mythos 5 also sent multiple emails to two developers in an attempt to manipulate the recipients into running its malicious code.

According to AISI, the test runs of the various models did not result in any real-world harm. The organization said it was treating the AI actions as a "serious security incident" that requires further scrutiny.

AISI listed multiple factors that could have led to AI models acting in a concerning manner. The AIs were provided with internet access during the tests, which allowed them to carry out the unsanctioned actions.

AISI had also deliberately disabled the models' cyberclassifiers during tests. Cyberclassifiers are systems aimed at preventing misuse.

The AI models were also not explicitly told what they were prohibited from doing on the internet, AISI said, adding that clearer instructions may have prevented the unsanctioned actions.

In an Aug. 4 blog post, AISI said that since the behavior of AI models happened under specific conditions, it cannot say how likely such behavior will be in different contexts.

"What we can say is that the behaviour was possible, sustained, and new; that alone warrants attention," the organization said.

In an Aug. 4 post on X, Anthropic said that Mythos 5 and ChatGPT 5.6 Sol models attempted to complete their assignments in an environment where they were deliberately provided internet access and their normal safeguards were removed.

Due to the absence of specific restrictions on how the internet must be navigated and lack of safeguards, the models were tested under conditions that are "not representative of any of our production models," Anthropic said, adding that there was no evidence in these tests of an AI escaping from a secure environment.

According to the company, it was closely working with AISI to access more details on the incident while carrying out an internal investigation on the matter.

OpenAI said in an Aug. 4 statement that it appreciated AISI's partnership throughout the evaluation process, including the organization's work to identify, investigate, and share details about the activity of the GPT 5.6 Sol model in their tests.

"We look forward to continuing our collaboration together," the company said.

The Epoch Times reached out to Anthropic and OpenAI for comment but did not receive a response by publication time.

OpenAI was in the midst of another controversy last month after it admitted on July 28 that its models bypassed restrictions during an evaluation. In this case, the company was testing its models' capabilities in carrying out cyberattacks.

AI startup Hugging Face was impacted in the test. On July 16, the startup said it detected an intrusion into its data processing systems. It was only later that the startup learned that the intrusion was carried out by an OpenAI model.

HuggingFace then worked with OpenAI to contain the attack, the startup's CEO, Clement Delangue, said in a July 22 post on X, calling it "an attack unlike anything we've seen before."

"This is day one for cybersecurity in the age of agents & we're all learning that secrecy is not the answer & that all defenders (not just a few selected ones) everywhere need more powerful models without restrictions, especially open ones," Delangue said.

A robot hand reaches out to the letters AI (Artificial Intelligence) in an image taken at an undisclosed location on June 23, 2023. Dado Ruvic/Reuters Tyler Durden Wed, 08/05/2026 - 17:40

Jim Cramer Just Sold His Bitcoin And Bulls Couldn't Be Happier

Looks like $100,000 bitcoin may be on deck, because Cramer is selling.

The ultimate inverse indicator Jim Cramer says he is selling all of his bitcoin, warning that rapid advances in quantum computing could threaten the cryptocurrency’s security within the next three to four years, according to Cointelegraph and Coindesk.

The CNBC host made the decision after interviewing IBM CEO Arvind Krishna, who urged investors to be "paranoid" about the potential impact of quantum computers on modern cryptography. Cramer said the conversation convinced him it was time to exit his bitcoin position.

Crypto traders, however, largely shrugged off the warning. Instead, many celebrated the announcement, reviving the long-running "inverse Cramer" meme, which jokingly treats his bearish calls as bullish signals. "If Cramer is selling, it's time to start buying," one trader wrote on X.

Bitcoin barely reacted, continuing to trade around $64,000 despite Cramer's comments, a recent Coldcard security incident, and signs that large bitcoin holders have begun moving or selling coins as overall crypto trading volumes decline.

The quantum computing debate itself remains unsettled. Some analysts believe bitcoin may need to transition to quantum-resistant cryptography within the next several years, while others argue practical quantum computers capable of breaking Bitcoin's encryption are still decades away. Even if such a breakthrough occurs, experts note it would threaten far more than cryptocurrencies, potentially disrupting banks, governments, and nearly every digital system that relies on modern encryption.

Cramer's latest warning also comes with plenty of historical baggage. The television personality has become famous for making high-profile market calls that later proved spectacularly wrong, from recommending Silicon Valley Bank shortly before its collapse to repeatedly changing his stance on bitcoin over the years.

That track record has turned "inverse Cramer" into one of Wall Street's favorite running jokes, with many investors instinctively betting against his latest prediction rather than following it.

Tyler Durden Wed, 08/05/2026 - 17:20