My mid-week morning reads:

• The 20 highest-paying jobs in America? Doctors, doctors, more doctors. Doctors earn more than any other broad category of worker, according to federal data: More than engineers. More than computer scientists. More, even, than lawyers. To find a better-paid group than doctors, economists say, you have to drill down to elite subcategories, such as corporate CEOs and law partners. The average partner at a large firm earns more than $1.4 million a year. The typical S&P 500 CEO pulled down $17 million in 2024. Med school remains the trade of kings. (USA Today)

• This Will Have Been a Golden Age for Investors: Kyla Scanlon makes the case that we’re living through an extraordinary period for capital markets—and most people are too anxious to notice. (Kyla Scanlon) see also Active vs. Passive Fund Performance: When Do Active Managers Win? While passive funds dominated in 2025, strong active investing opportunities still exist. (Morningstar)

• Chevy built an all-American EV truck — why is nobody buying it? The Silverado EV drives, well, almost like a car. Yet the bed is massive, its frunk, cavernous. The back seat has enough room for me to cross my cursedly long legs, and the cabin is quiet. It’ll power your house in case of a hurricane, and it’ll haul, tow, and navigate down the freeway without a finger on the steering wheel. Plus it travels over 400 miles on a charge. That should be a dream combination for an American pickup lover. What happens when product, price, and politics collide. (TechCrunch)

• About Those High Egg Prices (The Washington Monthly Was Right):  Much of the press believed The 2022-25 spike in egg prices was mere supply and demand. Now that the industry has settled with DOJ and state AGs, our suspicions proved warranted.  that dominant egg corporations may be manipulating a price index tied to most commercial egg contracts. On Monday, the Department of Justice and a group of bipartisan state attorneys general agreed. They concluded a months-long investigation into companies like Cal-Maine, alleging that these corporations colluded to exploit the bird flu crisis and drive up egg prices, cheating consumers. Cal-Maine, Hickman’s Egg Ranch, and Versova will donate 53 million eggs to food banks and pay up to $3.3 million to state attorneys general. (Washington Monthly)

• Always-On AI Is Coming: Quiet, My Exoself : Someday real soon, most of us — starting with young adults — will carry an always-on AI. This agent will help us navigate our journeys, answer our questions, tutor and teach us new skills, remember people we have met before, remind us of what we once knew before, offer advice and recommendations, do simple errands, and remember everything we say and do. Before long, it will know us better than we know ourselves. It will be our exoself. Kevin Kelly on quieting the exoself — the digital shadow that follows us everywhere and won’t shut up. (Kevin Kelly)

• This little blue dot on your phone is revolutionary: U.S. policy used to jam up GPS. Now, those signals beam into your pocket. WaPo on the little blue dot: GPS on your phone is quietly one of the most revolutionary technologies ever shipped. (Washington Post)

• What’s inside the one bill Trump most desperately wants to become law: A sweeping set of national requirements for voters. An empowered DHS. What would happen if the SAVE America Act passed? (Vox) see also Supreme Court’s dramatic moves will reshape elections — and give the GOP a midterm boost: The timing and speed of the justices’ moves are all but unprecedented in recent years, legal experts said. Republicans are expected to reap the most rewards. WaPo on the Supreme Court’s election-law rulings and how they tilt the midterm map toward one party. Structural advantages compound. (Washington Post)

• As the Pentagon stays quiet, AP reconstructs a US strike that killed over 100 Iranian children: The Feb. 28 attack on a primary school in southeastern Iran was the deadliest reported strike in the U.S.-Israeli war against Iran (Washington Post)

• Six Years After the First COVID-19 mRNA Vaccines, Billions of Doses Clarify Their Protection and Rare Risks: Learn how mRNA vaccines work, why serious risks remain rare, and how the technology could be used beyond COVID-19. (Discover) see also CDC Won’t Publish Report Showing COVID Shots Cut Likelihood of Hospital Visits: A CDC report on vaccine effectiveness, previously delayed by agency leadership, is now being blocked from publication entirely. (Washington Post)

• The United States’ dream didn’t die. It was overturned: The red card wasn’t overturned; that would have required admitting an error. The suspension was put on suspension, through the magic of a clause buried in the organization’s disciplinary code. Initially, FIFA announced the decision in such a skeletal manner that the world knew it was hiding a body. On match day, Trump stood before reporters at the White House, and after trying to deflect his role, he talked until it was clear that he applied pressure. The Athletic on the U.S. World Cup exit to Belgium — the dream didn’t die, it was overturned. (The Athletic)

Video of the day: Mystery Billionaire Builds $425 Million Estate in Hamptons.

 

Be sure to check out our bonus episode of Master’s in Business with David Risher, CEO of Lyft, one of North America’s largest ride-sharing networks. He joined Lyft’s board in 2021 when the firm was burning cash and losing ground to Uber. Lyft has returned to profitability, with its stock rising more than 75% since Risher took the reins as CEO in 2023. In Q1 2026, the firm had 28.3 million active riders and did $4.9B in gross bookings, with $1.7B revs, and $132.8m in EBITDA. Previously, he held senior roles at Microsoft and Amazon.

 

America at 50, 100, 150, 200 & 250

Source: Bruce Melhman

 

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

Super El Niño Could Trigger Major Coal Boom In India

Authored by Tsvetana Paraskova via OilPrice.com,

The super El Niño weather phenomenon this year will significantly boost India's demand for coal-fired power generation over the next 12 months, as a generation gap could occur with higher temperatures, the Finland-based think tank Centre for Research on Energy and Clean Air (CREA) said in a report on Monday.

The El Niño, the recurrent weather pattern driving global temperatures higher, would affect most energy systems globally, but none would be as affected as India's, according to CREA.

The El Niño, typically associated with lower wind speeds and less rainfall, could reduce India's power generation from wind and hydropower. This will open a gap in generation, CREA warns, adding that the gap will be mostly bridged by a surge in coal power generation.

"Combine the lost output from renewables and the increased demand for power, and India could face a generation gap of nearly 18 TWh," CREA's analysts said in the report.

"Super El Niño Could Trigger Major Coal Boom In India, which would release an estimated 17 million tonnes of CO2."

India, the world's second-biggest coal importer and user after China, continues to rely on coal despite a booming renewable energy sector. The Super El Niño could vindicate India's approach not to give up on coal.

Overall, coal-fired power generation and capacity installations in India continue to rise, and coal remains a key pillar of India's electricity mix, with about a 60% share of total power output.

Despite booming renewable capacity additions, India continues to rely on coal to meet most of its power demand as authorities also look to avoid blackouts in cases of severe heat waves.

Coal will still be a key part of India's power system for the next two decades, Rajnath Ram, adviser for energy at the government policy think tank, NITI Aayog, said at the end of last year.

"We cannot be subjective about coal. The question is how sustainably we can use it," the official noted.

Tyler Durden Tue, 07/07/2026 - 19:15

Japan's Keynesian Mirage: How Debt, Inflation, & A Collapsing Yen Expose A Failed Model

Authored by Daniel Lacalle,

Japan’s yen crisis exposes the long‑running failure of the Keynesian strategy that has dominated the country’s economic policy: chronic deficits, exploding public debt, and engineered inflation are now eroding Japan’s purchasing power, competitiveness, and monetary stability.

For decades, many mainstream analysts pointed to Japan as proof that a rich, “monetarily sovereign” country could keep an extremely high public debt without relevant consequences. The argument was simple: as long as the state can issue its currency, it can always print whatever is needed to cover deficits, refinance debt, and support public spending.

In reality, that has meant public debt soaring to around 250% of GDP, one of the highest levels in the developed world, while repeatedly increasing government expenditure and leaving large, persistent deficits. Even the IMF notes that, even after several years of moderate growth, prudence is “key to keep debt‑to‑GDP on a firmly downward path,” admitting that the current level is a structural vulnerability.

Japan’s apparent stability depended on a crucial external factor, the country’s enormous exporting capacity.

As a leading exporter of cars, technology, and capital goods, the country attracted a continuous inflow of US dollars and foreign capital that supported a stable currency and kept inflation low, despite fiscal excess. That protective layer is eroding fast. Headline inflation has edged up from 1.4% in April 2026 to 1.5% in May, while core inflation has held at 1.4%, still below the Bank of Japan’s 2% target but clearly positive after three decades of near‑zero price growth.

A key factor of the Japanese model was its export engine and the “golden goose” of capital inflows.

These two factors allowed the country to live with large debt and deficits without immediately triggering high inflation. However, that mirage is vanishing as external performance falters and inflation, though moderate, bites into real incomes.

Keynesianism did not spur growth or improve Japanese citizens’ lives. It just bloated an unsustainable government machine.

Recent data show that price increases are now broad‑based, not confined to a few categories. In May 2026, overall CPI inflation was 1.5% year-on-year. However, food prices rose 3.5% year-on-year, which is a heavy burden for households. Goods inflation stood at 2.0%, while services inflation was around 1.0%.

Underlying inflationary pressures, particularly in services and wage‑sensitive sectors, are now embedded in the system rather than an isolated energy shock. Meanwhile, real net wages are stagnant or declining. Japanese citizens face an affordability crisis.

The authorities, obsessed for years with the ludicrous “risk of deflation,” consciously tried to push inflation above zero, aiming to erode the real value of the public‑debt stock. They have achieved modest inflation, but at the cost of real wage erosion. Despite headline gains in nominal pay, inflation‑adjusted wages have fallen for four consecutive fiscal years, with a 0.5% decline in real wages in fiscal 2025 alone. Citizens are poorer, while the government is bigger, even as headline macro indicators show stability.

The most visible symptom of this model’s exhaustion is the yen. Despite repeated interventions by the Bank of Japan and a shift towards higher policy rates—the BOJ’s benchmark is now at its highest point since the mid‑1990s—the currency has slid to levels not seen in almost forty years. Each attempt to defend the yen produces a brief rebound, but the broader trend reflects markets’ concern about Japan’s long‑term fiscal and monetary sustainability.

Japan is not going bankrupt in strict terms; it is demolishing its currency, which is equivalent to an implicit default.

No one wants Japan to fail, but the model has delivered nothing in the past decade. The IMF talks about solid output growth, robust domestic demand, and low unemployment. However, domestic demand and GDP are disguised by constantly rising government spending, while low unemployment is a consequence of challenging demographic conditions. Japan’s population is aging and shrinking, and Keynesianism has made it harder for families to grow and have children.

If GDP and domestic demand were really strong, the country would have a strong currency. Instead, the yen weakness reveals investors’ skepticism regarding a model that combines very high debt, structurally positive inflation, and decades of real wage stagnation.

Japan has avoided a formal sovereign default and sudden stop in financing not because the Keynesian model is sound, but because the country still attracts a “gigantic” inflow of foreign capital and investment. Those inflows supply dollars, support asset prices, and help keep the system running despite its internal contradictions. A Bank Of Japan obsessed with raising asset prices by increasing ownership of ETFs shows it is more interested in headline figures than citizens’ cost of living.

On the surface, the wage picture in early 2026 looks encouraging. Average cash earnings grew 3.5% year‑on‑year in April 2026, marking the 52nd consecutive month of nominal wage gains and the fastest pace since late 2024. Base pay was up 3.4%, and nominal wages rose across sectors—from manufacturing and construction to information and communications and finance. Government data show that in March, nominal wages increased about 2.7%, while the consumer inflation rate used to calculate real wages stood at 1.6%, allowing real wages to rise roughly 1% in that month. However, these monthly improvements sit atop a longer‑term pattern where inflation has outpaced wage growth. Over fiscal 2025, real wages fell 0.5% and the small bounce may be short-lived as estimates show another negative real wage year for 2026. Japan’s real wages have stagnated for nearly 30 years since peaking in 1997. The inflation that policymakers wanted to generate is ultimately eroding the living standards of the citizens whose demand is supposed to sustain growth.

Against this backdrop, calls to raise taxes further to stabilize the public accounts risk pushing the system into another vicious circle. Higher taxation would likely weaken investment and capital inflows, undermine competitiveness, and intensify pressure on households. Immigration, often proposed as a demographic fix, may raise aggregate GDP but also increase fiscal strain when public finances are already deeply imbalanced, as seen in other advanced economies.

Japan’s situation is not a sudden accident; it is the culmination of policies that have been failing for decades. The country’s wealth, export capacity, and capital inflows allowed it to live with large imbalances for a long time. The difference today is that the traditional strengths have weakened, and the latest data make the structural problems clearer.

Japan shows the structural failure of a policy approach that “always seeks to expand public imbalances at the expense of citizens.” The Keynesian experiment in Japan aimed to prove that government is a key engine of growth but instead produced long‑term stagnation, high debt, and an erosion of real incomes. The yen’s weakness is simply the symptom of a larger disease: statism. And some want to repeat it in your country.

Tyler Durden Tue, 07/07/2026 - 18:25

International Olympic Committee Lifts Suspension, Russians To Compete At LA Games

In another sign of war fatigue in the West, and perhaps amid greater realization that 'punishing' the Russian people is having no real effect on the course of the Ukraine war, the International Olympic Committee (IOC) has finally eased restrictions on Russian athletes ahead of the 2028 Games in Los Angeles.

"The International Olympic Committee (IOC) Executive Board (EB) has provisionally lifted the suspension of the Russian Olympic Committee (ROC) that had been in effect since 12 October 2023," the Olympic body stated Tuesday.

"The decision was taken following a thorough analysis by the IOC’s Legal Affairs Commission, considering that the ROC no longer includes as its members any regional sports organizations in territories falling under the jurisdiction of the National Olympic Committee (NOC) of Ukraine," it continued.

Still, it sought to assure 'solidarity' with Ukraine, stating additionally: "The IOC stands in solidarity with the Olympic community of Ukraine, which the Olympic movement has supported since the beginning of the war, and will continue to do so."

The past several yeas has seen Russian and Belarusian athletes compete only under 'neutral' status. The new policy change has yet to indicate whether Russia will be able to display its flag or colors, or play its anthem - but presumably so.

Russian athletes can now compete as long as they "meet relevant anti-doping requirements," the IOC made clear in announcing the status change.

IOC President Kirsty Coventry has started speaking some sense:

“We don’t want to hold athletes accountable for the actions of their government.”

“We made it clear that all athletes had the possibility to compete at the Olympic Games. This is what this decision speaks to. It allows Russian athletes to take part in sports competitions. We thought it was really important for athletes to have that possibility,” Coventry said.

Some pundits have for years been pointing out a glaring double standard: Israel's invasion of Gaza has by any estimate resulted in far more civilian deaths than the Ukraine war, yet the IOC has not considered banning Israeli athletes.

George W. Bush's 2003 invasion of Iraq resulted in - according to various estimates - between 500,000 and one million Iraqi civilian deaths. What's more is that it was only within years later the entire case the Neocons made for the invasion was proven an absolute fraudulent lie. Where were the IOC punitive actions against American athletes? It wasn't even a thought.

The IOC has lifted the suspension of the Russian Olympic Committee ahead of 2028 Olympic qualification events

Also, “The IOC will take a decision in relation to the display of the Russian flag, anthem, colours or any identifications [for the Olympics] at the appropriate time.” pic.twitter.com/oQWS2AdInB

— Jackie Wong (@rockerskating) July 7, 2026

Similarly, Washington's bombing and invasion of Afghanistan turned into a more than two-decade long quagmire full of civilian death and destruction for entire towns and villages. And not a peep from the IOC or any Olympic officials.

The clear pattern has been that only those enemies and rivals of the Western allies get banned from the games. 

Tyler Durden Tue, 07/07/2026 - 18:00

China Test-Launches Nuclear-Capable Ballistic Missile In Pacific, Alarming Neighbors

Via The Cradle

The Chinese navy on Monday test-launched a strategic missile from a nuclear submarine in the Pacific Ocean in the framework of its annual military exercises.

"At 12.01pm on July 6, a strategic nuclear submarine of China's People's Liberation Army Navy successfully launched a... strategic missile carrying a training simulation warhead into the relevant high seas of the Pacific Ocean," spokesperson Wang Xuemeng said in a statement posted on WeChat.

via Reuters

"This missile test launch is a routine arrangement of China's annual military training, and relevant countries were informed in advance," Wang stated, adding that the missile "accurately" landed in the designated area.

China's official Xinhua News Agency said that the test was a "routine arrangement" within the framework of China's annual military exercises.

Papua New Guinea's foreign minister and a New Zealand government source told AFP that China was preparing to test-fire a nuclear-capable ballistic missile.

"Yes, China has briefed me. I was personally called by the Chinese ambassador," Papua New Guinea Foreign Minister Justin Tkatchenko stated.

After Japan was notified, it strongly urged China to reconsider moving ahead with the test launch.

"We strongly requested a reconsideration of this test launch of the ballistic missile to ensure that it does not pose a threat to Japan's security, particularly by passing through its airspace," according to a joint statement issued before the launch by Japan's ministries of defense and foreign affairs.

The test launch came as China and Russia officially began their annual "Joint Sea-2026" naval exercises on Monday. The exercises are scheduled from 6 to 13 July and are taking place in the waters and airspace off the eastern Chinese port city of Qingdao.

The Chinese People's Liberation Army (#PLA) Navy's test launch of a strategic missile by a submarine was a routine military training exercise. It was not targeted at any specific country or target. China notified relevant countries in advance, which is in line with international… pic.twitter.com/Jo7u9ti5P5

— Global Times (@globaltimesnews) July 6, 2026

The bilateral maneuvers aim to address regional security challenges and elevate military cooperation between Beijing and Moscow.

Russian state media reported that a cruiser, a corvette, a diesel-electric submarine, and a rescue vessel from Russia's Pacific Fleet will participate in the drills. China's Northern Theater Command said that two destroyers, a frigate, a submarine, a supply ship, and a rescue vessel will participate.

During a visit to Beijing in May, Russian President Vladimir Putin said that Chinese and Russian military and economic cooperation "demonstrate strong momentum."

Chinese President Xi Jinping praised the strong relationship between Beijing and Moscow.

China and Russia on Monday launched the "Joint Sea-2026" exercise at a military port in Qingdao in east China's Shandong Province. #XinhuaNews pic.twitter.com/l6t3PNk3iD

— China Xinhua News (@XHNews) July 6, 2026

"We have been able to continuously deepen our political mutual trust and strategic coordination with a resilience that remains unyielding despite trials and tribulations," Xi said.

Both leaders warned against a global return to the “law of the jungle,” referring to the unprovoked US-Israeli war on Iran.

Tyler Durden Tue, 07/07/2026 - 17:40

Anthropic Removes "Scary" Secret Claude Tracker After Developer Stumbles Across It

Anthropic has removed hidden detection code from its Claude Code tool after a developer reverse-engineered the binary and exposed how the company was subtly monitoring users in China.

The code, which Anthropic described as an experiment launched in March, used a form of prompt steganography to signal information about a user's environment back to Anthropic's servers. It was designed to help detect unauthorized resellers and attempts by other organizations to distill Claude's capabilities into their own models.

How The Detection Worked

The mechanism was first spotted by a Reddit user known as LegitMichel777, who stumbled on it while trying to restore a disabled feature in Claude Code. A separate developer known as Thereallo independently confirmed the finding the same day, June 30, publishing a technical breakdown of exactly how it worked.

The checks only ran in one specific situation: when a user pointed Claude Code at a different server instead of Anthropic's own - something companies commonly do when they route their traffic through internal systems or third-party gateways. From there, it checked two things:

• Whether the user's computer was set to a Chinese time zone (Shanghai or Urumqi).
• Whether the new server address matched a hidden list of Chinese AI companies (including well-known names like DeepSeek, Zhipu, and Moonshot) or known resale and proxy services.

If either check came back positive, Claude Code would quietly tweak a line of text called the "system prompt" - background instructions the app automatically sends to the AI model with every request, invisible to the person typing. Specifically, it changed how the date was written in that line:

• If the user was in a Chinese time zone, the date switched from using dashes to slashes (e.g., 2026/06/30 instead of 2026-06-30).
• The apostrophe in the phrase "Today's date is..." was swapped for one of three lookalike characters, each one a different signal, depending on which combination of checks the session had triggered.

None of this was visible to users, or likely even to the AI model itself in normal use - the characters look identical on screen. But Anthropic's servers could read the difference instantly. The lists of flagged domains and keywords were also scrambled inside the app's code using a basic encryption trick, so they wouldn't show up if someone just opened the file and searched for them.

Thereallo called the approach "prompt steganography" - hiding a signal inside ordinary-looking text - and noted it let Anthropic sort and flag sessions without needing any separate, visible tracking system.

Anthropic's Explanation

Last Tuesday, Anthropic engineer Thariq Shihipar, who works on the Claude Code team, confirmed the feature on X:

"This is an experiment we launched in March that was meant to prevent account abuse from unauthorized resellers and protect against distillation. The team has landed stronger mitigations since then and we've actually been meaning to take this down for a while. We merged the PR and this should be fully rolled back in tomorrow's release."

Anthropic has stated that unauthorized resellers have been selling access to Claude accounts and subscriptions at steep discounts in certain markets. The company has also publicly documented large-scale efforts by Chinese AI labs to distill its models by querying them at high volume through proxies and fraudulent accounts.

Anthropic removed the detection logic shortly after it became public.

Alibaba Bans Claude Code For Employees

The disclosure prompted a swift response from Chinese technology giant Alibaba. According to internal documents reported by the South China Morning Post, Alibaba added Claude Code to its list of high-risk software and instructed employees to stop using it for work, effective around July 10. The memo cited "back-door risks" following the discovery of the hidden markers.

Alibaba has not publicly commented on Anthropic's earlier accusations that its Qwen models benefited from large-scale distillation of Claude.

The Wider Context: Distillation And Geopolitical Competition

Model distillation - training a new model on the outputs of a more capable one - is a common technique in AI development. However, Anthropic and other U.S. frontier labs argue that industrial-scale distillation campaigns by foreign entities, particularly Chinese labs, undermine export controls and intellectual property protections.

Anthropic has previously published details of what it described as distillation operations targeting its models by labs including DeepSeek, Moonshot, and MiniMax. Chinese researchers have also published work showing that many leading Chinese models carry detectable signatures consistent with distillation from U.S. systems.

In this environment, companies like Anthropic face pressure to protect their models while maintaining user trust - especially in tools like Claude Code, which are granted significant access to users' local machines, files, and command execution.

Thereallo's analysis raises obvious questions about transparency. While the feature wasn't designed to steal user data or take control of anyone's computer, hiding this kind of tracking inside the system prompt without telling anyone erodes the trust these coding tools depend on.

"Coding agents already live on the wrong side of a scary boundary," Thereallo wrote. "Hiding the signal in the system prompt makes every other privacy claim harder to believe."

Anthropic has not issued a detailed public postmortem on the experiment. The company has emphasized that distillation attacks and account abuse pose risks to model safety standards and U.S. technological leadership, and that it continues to work with government and industry partners on mitigation strategies.

Tyler Durden Tue, 07/07/2026 - 17:20

Activists Push California To Recognize 'Black English' In Preschool Classrooms

Via American Greatness,

Progressive California education activists are urging the state to recognize “black English” in preschool classrooms, claiming the approach would strengthen literacy development and affirm the language spoken by many black children.

Black Californians United for Early Care & Education (BlackECE), a nonprofit advocacy organization, is promoting what it describes as an effort to challenge “harmful language hierarchies and affirm black English as a legitimate, rule-governed language rooted in black history, culture, and community.”

The group also seeks to “address how language bias shows up in early learning spaces–and how it can be dismantled.”

Ashley Williams, a co-founder of BlackECE, said the initiative is intended to ensure children feel their voices are respected regardless of how they speak.

“I don’t want my son to walk into any room and feel like his voice is not valued or his perspective can’t be heard because he’s not saying it one way or the other,” Williams told PBS.

Williams also reflected on her own experiences, saying speaking black English came with embarrassment because of its slang and grammatical differences.

She said she often felt pressure to “talk white” instead of speaking in the way that felt most natural to her.

BlackECE has developed a 10-point policy agenda focused on black children, families and educators, including proposals related to reparations and early childhood education.

The organization’s campaign follows California’s 2020 plan encouraging early dual-language learning and support for bilingual children. BlackECE argues that black English should also be recognized as part of those efforts.

“We talk about multilinguals, but we don’t include black children who may be African-American English speakers,” Xigrid Soto-Boykin, director of the Children’s Equity Project, said.

According to research cited from the National Library of Medicine, about 20 percent of American children and 44 percent of California children ages 5 to 17 are bilingual. The information also states that 89 percent of African Americans speak only English at home.

Tyler Durden Tue, 07/07/2026 - 17:00

Federal Appeals Court Rules Sex Offenders Have Constitutional Right To Live With Their Children

Authored by Matthew Vadum via The Epoch Times,

A federal appeals court ruled July 6 that convicted sex offenders retain a fundamental constitutional right to live with their own children.

The new ruling by the U.S. Court of Appeals for the 11th Circuit arises out of an Alabama case but could help reshape strict sex offender residency laws in the other two states in the circuit—Florida and Georgia—and serve as persuasive authority elsewhere.

At the heart of the case is the constitutional doctrine of substantive due process, which protects certain fundamental rights that are not explicitly listed in the U.S. Constitution but deeply rooted in U.S. history and tradition, including the right of parents to live with and raise their children.

The court ruled 8–5 in favor of the plaintiff, Bruce Henry, in the case known as Henry v. Sheriff of Tuscaloosa County.

The majority opinion was authored by Circuit Judge Robin Rosenbaum.

In 2013, Henry pleaded guilty to “knowingly possess[ing] ... any book, magazine, periodical, film, videotape, computer disk, or any other material that contains an image of child pornography.”

The opinion recounts that the federal district court sentenced him to 70 months in prison and 60 months of supervised release.

He served five years before being released in March 2018.

He finished a qualified Sex Offender Treatment Program, along with individual and group counseling, and continues to attend weekly meetings of Sex Addicts Anonymous. In addition, he has a steady job, attends church, and volunteers.

He violated the terms of supervised release twice by viewing pornography. He reported the violations to his sexual offender treatment provider but did not inform his probation officer. The officer filed a petition to revoke his supervised release, but the district court declined, choosing instead to extend the duration of the supervised release period through March of this year, according to the opinion.

Since the last incident in December 2019, Henry has followed the terms of his release. In August 2021, he and his wife had a son, but because he was a sex offender, the Alabama Sex Offender Registration and Community Notification Act barred him from living with the child.

The Act prohibits a sex offender from residing with or conducting overnight visits with any minor, but it contains a family exception that allows the offender to live with or stay overnight with their own children, grandchildren, step-children, siblings, or step-siblings.

That protection is removed for any adult convicted of a sex offense involving a child or any offense involving child sexual abuse material, legally referred to as child pornography.

“Alabama law affords no offramp to Henry or anyone else: the Act contains no mechanism for offenders to challenge its prohibitions on residing or staying overnight with their own children,” the opinion said.

After Henry’s son was born, he sued officials in Alabama under federal law to block enforcement of the Act’s prohibition against him living with his son. The district court agreed that the prohibition was unconstitutional and enjoined its enforcement.

A panel of the U.S. Court of Appeals for the 11th Circuit ruled largely for Henry, finding that the Act’s prohibition against a parent living with his own child interfered with Henry’s “fundamental right to live with and raise [his] child,” and vacated the district court’s injunction.

The full 11th Circuit then reheard the case and ruled for Henry.

The Supreme Court has recognized that parents have a fundamental right to live with their children, and this right is “perhaps the oldest of the fundamental liberty interests” that the 14th Amendment protects, the opinion said.

By contrast, Alabama argued that not all parents enjoy this right and that entire categories of parents enjoy “no fundamental rights at all because they committed state-defined ‘misconduct’ years before their children were even born.” The Supreme Court has recognized that even a parent convicted of possessing “child pornography” still retains a fundamental right to live with his son, the opinion said.

“That does not mean that Alabama can’t regulate or even abrogate that right. But to do so, Alabama must show that its legislation is narrowly tailored to further its compelling interest in the safety of children,” the appeals court said. Abrogation is the act of formally annulling a law or legal provision.

The appeals court returned the case to the district court for reconsideration.

Chief Circuit Judge William Pryor filed a dissenting opinion, criticizing the majority for undermining Alabama’s child-protection efforts.

“All agree that parents generally enjoy a fundamental right to ‘make decisions concerning the care, custody, and control of their children,’” Pryor said.

“But this appeal presents a different question: whether the Due Process Clause [in the 14th Amendment] grants child-sex convicts, not parents generally, a fundamental right to reside with their children. Of course not.”

Pryor said that using the majority’s reasoning, a father who raped his young child still enjoys the fundamental right to live with that child unless he has been judicially determined to be dangerous.

Pryor also said the doctrine of substantive due process creates a “treacherous field,” and the Supreme Court has directed courts to “exercise the utmost care whenever ... asked to break new ground,” to avoid usurping the authority that the Constitution entrusts to elected legislatures.

Tyler Durden Tue, 07/07/2026 - 16:20

The View's Sunny Hostin Says American Flags Make Her Feel 'Unsafe'

Authored by Eric Utter via AmericanThinker.com,

The View’s preternaturally ignorant and repulsive Sunny Hostin recently stated:

There are times when I walk into a community and I see American flags all over the community and I suddenly feel unsafe because there's a section of this country that has coopted the American flag and they equate being an American or an American flag with white supremacy and that should never be the symbol of white supremacy, but they have weaponized [it].

No, Sunny, you have equated the American flag with white supremacy, and you have weaponized it to fit your false narrative. 

You have attempted to demean it, cheapen it, demonize it … and everyone who fought and died for it. All for cheap praise from morons and Marxists.

I’m guessing Sunny would feel far less safe if she were surrounded by a plethora of North Korean flags, Iranian flags, Russian flags, or perhaps even Antifa flags. If not, she’s even dumber than she appears, which would be truly miraculous.

I feel a bit uneasy, a tad concerned, when I am amongst a bunch of Palestinian flags, as I was at my daughter’s college graduation. Nor do I feel comfortable when mobs of misfits are waving the LGBTQ flag or trans flag in my face. The Satanic Flag/Baphomet Church of Satan flag gives me the creeps. Any communist flag makes me sick to my stomach.

Conversely, when I am surrounded by Old Glory, I get a sense of place, belonging, and peace. I know that the folks flying them likely recognize and appreciate freedom, history, sacrifice, and the unalienable rights granted to us by our Creator. How could any flag make one feel better than that?

So, “Sunny,” how do you think the American flag made slaves feel during the Civil War? Guessing the Union banner gave them hope and courage. (Say, didn’t one or more of Sunny’s ancestors own and trade slaves?)

The American flag has given more hope to more people around the world than any other.

That is inarguable. It has made more people feel “safe” and protected than any other. Perhaps if Sunny had been in France when American and allied troops liberated it, she would have known this. Maybe if she had been in Ohrdruf, Dachau, or Buchenwald when American troops liberated those still alive in these Nazi concentration camps, she would feel a bit differently.

The stupefying ignorance of the chattering class is almost impossible to comprehend.

It is akin to trying to rationally process the size of the universe. Worse yet, this ignorance is now paired with sheer, unadulterated evil.

Those who hate America, capitalism, entrepreneurship, excellence, decency, the Judeo-Christian work ethic, Christianity, the Founders, limited government, the rule of law, and the concept of unalienable rights granted by our Creator -- among other aspects of a successfully functioning democratic republic — actually despise “democracy,” liberty, tolerance, inclusion, and empathy.

Conversely, they worship themselves, and their own hatred of success and competence. And their desire to destroy all that has come before them. In their unique and misplaced attempt to trash history and elevate themselves to deity status, they reveal themselves to be some of the most contemptible and pathetic folks ever to trod the Earth.

Tyler Durden Tue, 07/07/2026 - 15:40

Beijing Weighs Restricting Foreign Access To China's Top AI Models

Up until now, the politicization of AI models generally ran in one direction with US "frontier" LLM providers such as Anthropic and ChatGPT complaining consistently that Chinese open-sourced models were "distilling" (i.e. reverse-engineering) their products. And whether true or not, China has certainly been able to catch up dramatically to the US, with China's latest open-model, GLM 5.2, viewed as just barely behind the latest comparable US offerings, while the average gap between US and Chinese models has shrunk to almost nothing.

As complaints on both sides have become more vocal (amid occasional bans of the latest Anthropic model by the White House admin), last week we reported that for the first time, China's tech giant Alibaba banned employees from using Anthropic's Claude ‌Code at work after the tool drew scrutiny for features that can help identify China-linked users, Reuters reported.

Fast forward to today when the Reuters reported that in the latest escalation, Beijing is preparing to fully flip the script on the US tech sector as Chinese authorities have held meetings with top tech firms over the past month about potentially restricting overseas access to China's most advanced AI models, including those yet to be released. 

The talks follow a number of steps by Beijing to keep homegrown ‌AI within the country and underscore how China, like the US, is now treating cutting-edge artificial intelligence as a critical national asset that needs controls. Companies present at the talks included ‌tech giants Alibaba and ByteDance as well as startup Z.ai, creator of the GLM-5.2 mode, said Reuters' sources. 

Since the emergence of DeepSeek's R1 model last year, Chinese AI models have made massive ​inroads globally thanks to their low costs and increasing capabilities. Any decision by Beijing to limit access to those products could ripple across AI markets as costs for many businesses would likely increase. It would be a boon to AI supplier stocks  which have plunged in recent days as a result of fears that US users of LLMs may gravitate to much cheaper, if just as capable, Chinese alternatives leading to huge revenue declines at US frontier companies. 

At the meetings, led by China's Ministry of Commerce, participants discussed putting limits on the most advanced AI models, both closed-source and more open versions, according to two of the sources.

Officials talked about making any leak or theft of proprietary AI technology an offense under China's stringent national security law. The officials also raised the possibility of implementing new measures to restrict who ‌can fund domestic AI startups, the source added.

The scope of the ⁠potential restrictions is still being discussed, two sources said, adding that they may only apply to future models. It was not immediately clear when or even if they would come into force.

All three leading Chinese AI companies - Alibaba, ByteDance and Z.ai - have a range of AI models, some closed-source while others are open-weight, meaning users can download, run and customise the underlying systems. Alibaba's Qwen and ByteDance's Doubao are two of the most widely used AI models in China. Z.ai has recently set Silicon Valley abuzz as the capabilities of its ​GLM-5.2 ​model come close to leading U.S. offerings but at a fraction of the cost. 

Trump's administration has also been deeply concerned about national security ‌implications of AI, in particular the potential for American AI products to be misused by military intelligence in China, Russia and other countries of concern. In June, it ordered that foreign nationals not have access to Anthropic's most advanced Fable and Mythos models, which prompted the company to disable the models for all users globally as nationality could not be verified in real time.

Export controls for Fable, which is designed for the general public, have since been lifted after new safeguards were put in place. But Mythos, designed for cybersecurity professionals, is still only available to some "trusted" U.S. organizations.

Some US AI experts have also said the US needs to regulate the use of Chinese AI models. According to two of the sources, Chinese authorities are deeply worried about the ‌potential for Mythos to exploit software vulnerabilities and that Washington might deploy the model against Chinese interests.

That echoes ​concerns publicly voiced by state media and Zhou Hongyi, founder of cybersecurity firm 360, a major vendor to government ​and enterprise clients, who has said China needs to develop its own Mythos.

Amid the rising techno-nationalism, China has implemented numerous measures to protect homegrown AI this year. In April, the country's state planner ordered Meta to unwind its $2 billion acquisition of Chinese-founded AI startup Manus. In ‌early June, authorities issued sweeping new rules, tightening control of overseas deals ​that involve Chinese investors, technology, data and national security.

China ​had also launched investigations this year into Manus and other local AI startups that had moved abroad, seeking to establish whether they have broken export control laws, according to two of the sources and a third person.

In its report, Reuters says that it was not able to learn how any potential new restrictions on overseas access to Chinese ​AI models might work. But some hints might be gleaned from a May ‌roundtable of Chinese legal experts on regulations governing open-source AI.

According to a summary of the discussions published in an official Supreme People's Court journal, participants proposed a ​tiered system: basic open-source tools subject to a simple filing, more advanced technologies facing security reviews, and the most sensitive frontier models barred from public release or restricted ​to domestic use. 

If indeed China is about to start its own AI "firewall", the question is what happens then? Recall, in blowback to the short-lived tokenmaxxing idiocy, a growing number of American enterprises are quietly gravitating toward cheaper Chinese models.

But if China itself limits access to US clients, does this mean that the balance of power shifts back to US LLMs which will then become the only available AI vendors to US corporations. If so, is Beijing making a big mistake depriving its nascent AI ecosystem of US client revenues, and instead allowing US models - which recently found themselves on the defensive in response to much cheaper Chinese alternative - to take an even bigger lead for round 2? 

Tyler Durden Tue, 07/07/2026 - 15:20

Stellar 3Y Auction Stops Through Even As Yields Hit 1 Month High

With yields blowing out today as they followed the sharp increase in oil prices after Iran struck no less than 3 ships crossing the Hormuz Strait (with a Trump response sure to follow), we doubt there was much focus on today's 3Y auction. Which is unfortunate because despite the selloff in the secondary market, the auction itself was quite solid. 

The sale of $58BN in 3 Year paper, the week's first coupon auction, priced at a high yield of 4.179%, down modestly from 4.192% in June which was the highest since Feb 2025. It also stopped through the When Issued 4.185% by 0.6bps, and followed two tailing auctions.

The bid to cover was 2.600, down from 2.645 and below the recent average of 2.645 although as shown in the chart below, the BTC for the tenor appears to have flatlined between 2.5 and 2.7 over the past 6 years. 

The internals were stronger, with Indirects awarded 67.5% of the auction, up from 63.71% last month and the highest since April (also well above the recent average of 62.5%). And with Directs taking 7.7%, down notably from 15.3% a month ago, Dealers were left with 24.75% of the auction, the highest since February. 

Overall, this was a very strong 3Y auction which curiously comes in a very ugly day for the bond complex, which seemingly oblivious of the strong primary demand, has pushed 10Y yields to a session high of 4.523%, the highest since June 10, and rising fast. 

Tyler Durden Tue, 07/07/2026 - 13:23

'Apex Of Civilizational Ambition': Wall Street Bulls Pile In On SpaceX, Raymond James Street-High $800 Target

A flurry of Wall Street analysts is turning incredibly bullish on SpaceX, with 12-month price targets ranging from Raymond James' $800 to Arete Research's $401 and Morgan Stanley's $300.

The average price target across 34 analysts tracked by Bloomberg now sits at around $236, implying massive upside from current levels of about $150 and reinforcing the view that analysts are beginning to value SpaceX less as a rocket company and more as a foundational AI, satellite broadband, and next-generation infrastructure company.

Raymond James is the most bullish among analysts covering SpaceX, initiating coverage with a "Strong Buy" rating and a Street-high 12-month price target of $800, about 500% above its IPO price.

"Just as railroads, electric grids, and the Internet reshaped prior economic eras, we believe SpaceX is building the foundational platform for the next generation of industrial capacity," Raymond James analyst Brian Gesuale wrote in a note to clients.

JPMorgan analyst Doug Anmuth told clients Tuesday that his team initiated coverage on SpaceX with an "Overweight" rating and a $225 12-month price target.

"SpaceX's ambitions are bigger than any company's we've seen - to make life multi-planetary, leverage the Sun to build out AI in space, & build bases on the Moon and cities on other planets," Anmuth wrote in the note.

He continued:

In our view, no other company is as well positioned to go after the combined anticipated TAM of $28T+. Launch is the key enabler & differentiator, with ~670 orbital launches, a 99%+ success rate, & 80%+ of all mass to orbit since 2023. Starship should deliver a 10x cost improvement & ~4x higher payload vs. Falcon 9 and enable the company to pursue entirely new markets. Connectivity drives current financials via Starlink, the largest LEO constellation (9,600+ satellites, 12M+ active customers, 164 markets), where we project broadband subscribers growing from 9M in 2025 to 95M+ in 2030. Importantly, AI is expected to be the long-term driver, as SpaceX is modeled to ramp terrestrial compute ~8x to 8GW by the end of 2028 & pursue orbital compute towards ~75GW by the end of 2031. We believe significant upside potential remains as the company quite literally builds out the next frontier.

Edison Yu at Deutsche Bank told clients earlier today that SpaceX "represents in our view the apex of civilizational ambition, oftentimes expressed in steel and fire, bending the arc of history to make humans multiplanetary by building foundational infrastructure across transportation, connectivity, and AI."

"In short, across nearly every category, we struggle to find competitors that can challenge SpaceX's moat and therefore initiate coverage with a Buy rating and $255 price target," Yu said.

SpaceX shares fell 5.5% on Tuesday morning to $151 and now trades down 31% from the June 16 intraday high of $218. Shares have been basing around the $150 level since June 24.

Another major bull on the stock is Morgan Stanley, which has a $300 12-month price target, with analysts at the bank stating that the company stands to gain from AI demand.

RBC Capital Markets analyst Tom Narayan raised Tesla's 12-month price target on the view of a SpaceX-Tesla merger on the horizon.

Narayan continued:

Our view: In this report, we raise our Tesla PT to $500 by incorporating a 25-30% premium to current trading levels, (and a 15% premium to the stock's intrinsic value), owing to a potential SpaceX acquisition scenario based on unconfirmed media reports. We also sharpen our pencils on our Tesla intrinsic valuation. We believe our robotaxi work in particular is unique in both in its approach and detail.

Meanwhile, Morningstar analysts remain the most bearish on SpaceX, with a "Sell" rating and a 12-month price target of $62.

Professional subscribers can read the full SpaceX coverage from leading desks here at our new Marketdesk.ai portal. 

We suggest starting with: 

1. Deutsche Bank: Apex of Civilizational Ambition

2. Needham: Launch King Secures Its Rule in Orbital Infrastructure; Initiate Buy

3. RBC Capital Markets: Space, the final frontier, repriced; initiating at Outperform with a $225 price target

4. Morgan Stanley: AI's Final Frontier; Initiate at Overweight, PT $300

5. JPMorgan: The Next Frontier; Initiating Coverage with an Overweight Rating & $225 PT

Index inclusion could provide support for SpaceX around the $150 level. Bloomberg Intelligence analysts estimated that inclusion in the Nasdaq-100 and FTSE Russell could generate at least $5.4 billion in demand from index-tracking funds.

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

1 Year Inflation Expectations Jump To 3 Year High In Latest NY Fed Consumer Survey

Inflation as measured by the CPI may have peaked, but Americans’ expectations for inflation over the near and medium term rose notably in June according to a Federal Reserve Bank of New York survey released Tuesday, with strong increases anticipated for medical care costs and rent,

Consumers now see inflation at 3.7% over the next year, up from 3.5% in May, the highest since September 2023. Expectations for inflation in three years increased to 3.3%, the highest since June 2022, up from 3.1%, while estimates for inflation in five years remained steady at 3%. 

After months of facing higher energy costs, consumers said they see gas prices rising at the lowest rate since mid-2022. Their outlook for food prices also improved slightly in June, though households expect higher bills for medical care and rent. As shown below, median year-ahead commodity price change expectations increased by 0.5% point for the cost of medical care to 9.4%, and by 0.9 percentage point for rent to 8.3%. Median year-ahead price change expectations decreased by 0.8 percentage point for food to 5.0%, by 2.3 percentage points for the cost of college education to 5.7%, and by 3.5 percentage points for gas to 1.5%. The June reading for gas is the lowest since August 2022.

Energy prices have declined in recent weeks, following an interim peace deal between the US and Iran. Earlier on Tuesday, New York Fed President John Williams said he now sees a positive near-term outlook for inflation, which rose 4.2% in May from a year earlier.  

Despite the jump in near-term inflation expectations, sentiment improved when it comes to jobs: the mean perceived probability of losing one’s job in the next twelve months decreased by 1.0% to 14.1%, and the mean perceived probability of finding a job if one’s current job was lost increased by 1.2% to 44.9%.

The data also pointed to an improvement in consumers’ finances. The share of households saying their financial situation was better than last year increased in June, a smaller share of households reporting a worse financial situation and a larger share reporting a better financial situation, and expectations for future finances also improved.

.... however, expectations for future credit availability deteriorated slightly, with a larger share of respondents expecting that it will be harder to obtain credit in the year ahead.

The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 2.9 percentage points to 40.9%, the highest level of the series since April 2021.

Some more details from the report:

Labor Market

• Median one-year-ahead earnings growth expectations increased by 0.1 percentage point to 2.8% in June. This is the highest reading since March 2025.
• Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 1.5 percentage points to 41.7%, remaining above the 12-month trailing average of 41.3%.
• The mean perceived probability of losing one’s job in the next 12 months decreased by 1.0 percentage point to 14.1%, falling below the 12-month trailing average of 14.5%. The mean probability of leaving one’s job voluntarily in the next 12 months (or the expected quit rate), declined by 3.5 percentage points to 17.3%, falling below the 12-month trailing average of 18.6%.
• The mean perceived probability of finding a job if one’s current job was lost increased by 1.2 percentage points to 44.9%, though it remains below the 12-month trailing average of 46.3%. The increase was driven by respondents with household incomes under $50,000.

Household Finance

• The median expected growth in household income increased by 0.2 percentage point to 3.0% in June. The series has been moving in a narrow range between 2.8% and 3.0% since June 2025.
• Median one-year-ahead nominal household spending growth expectations remained unchanged at 5.0%.
• Perceptions of credit access compared to a year ago improved, with the net share of households reporting it is harder to get credit decreasing. Expectations for future credit availability deteriorated slightly, with a larger share of respondents expecting it will be harder to obtain credit and a smaller share expecting it will be easier to obtain credit in the year ahead.
• The average perceived probability of missing a minimum debt payment over the next three months decreased by 1.8 percentage points to 10.8%, the lowest reading since April 2023. The decline was broad-based across age and education groups.
• The median expectation regarding a year-ahead change in taxes at current income level remained unchanged at 3.1%.
• Median year-ahead expected growth in government debt decreased by 0.4 percentage point to 9.5%, remaining above the 12-month trailing average of 8.7%.
• The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 2.0 percentage points to 26.6%.
• Perceptions about households’ current financial situations compared to a year ago improved, with a smaller share of households reporting a worse financial situation and a larger share of households reporting a better financial situation. Year-ahead expectations about households’ financial situation also improved, with a smaller share of households expecting a worse financial situation and a larger share of households expecting a better financial situation in one year from now.

The report comes as some investors see the Fed raising rates later this year to address elevated inflation, although others such as Morgan Stanley are pretty steadfast the Fed will not hike. Fed officials have kept interest rates steady in 2026, though economic projections released last month showed nine officials see the need for at least one rate increase by year end.

Tyler Durden Tue, 07/07/2026 - 12:40

Tonight: How Aalo Atomics Just "Made History"

LIVE NOW:

https://t.co/OBqH6G98dN

— zerohedge (@zerohedge) July 7, 2026

**********************

Tonight on the ZH homepage, Erik Townsend of Macro Voices will host a special livestream with the founders (CEO and CTO) of nuclear energy company Aalo Atomics: Matt Loszak and Yasir Arafat.

This will be part of an ongoing series diving into the emerging nuclear energy technologies, to feature heads of the cutting edge startups and some technical and philisophical debates about where the industry needs to head in order to solve the world's energy needs.

The following is from Erik Townsend's Substack (full post) which gives a look into the significance of the milstone achieved:

Full disclosure: I am an early investor in Aalo Atomics and have a direct financial interest in the company’s success. Nothing here is investment advice. Early-stage private investments are speculative, illiquid, and can go to zero. Do your own diligence.

At the stroke of midnight on July 4th, 2026, the United States of America began its 250th year. Nineteen minutes later, at 12:19 a.m. Mountain Time, a small nuclear reactor sitting on a two-acre plot at the edge of the Idaho National Laboratory reached criticality — the moment a nuclear chain reaction becomes self-sustaining. Aalo Atomics had just made history.

This post explains why that was historic. But it also makes a bolder claim, so let me put it up front where you can argue with it:

The criticality demonstration that just made headlines is the least important thing Aalo will do. The event that will actually change the course of history is scheduled for the second half of 2027 — and almost nobody is paying attention to it yet.

Bottom line up front:

• Four American companies brought first-of-a-kind advanced reactors to criticality in a single month — more genuine reactor firsts than the previous half-century produced. Give them all credit.

• Of the four, I contend Aalo’s was the most commercially important, for two reasons almost no one is discussing: it was the only one built at full commercial scale, and it uses the one fuel form that doesn’t depend on a non-existent supply chain.

• The 2026 criticality was a physics demonstration. The 2027 demonstration — the first Aalo-X reactor actually making electricity that powers something substantial — is the starting gun for what I call the Nuclear Henry Ford Moment.

• Aalo has a SAFE round closing this month and a Series C now being shopped. I expect the Series C valuation — which some will likely complain is too high — is going to look, in hindsight, like the bargain of the century. I’ll show you why using a company you’ve heard of.

Above: “Fission Accomplished”—The crowd in Idaho Falls, ID erupts in cheers and applause as the successful criticality event is announced just after midnight on the morning of July 4th.

More nuclear history was made in one month than in the prior half-century

Here is a fact that should stop you cold. On June 4th, 2026, when Antares Nuclear’s Mark-0 reactor went critical at INL, it became — by the count of INL’s own laboratory director — the first genuinely new reactor design to reach criticality at the lab in more than half a century. It was also, per the DOE, the 53rd reactor ever built at that site since 1951.

Think about what that means. The Idaho desert is where America built the first of a kind (FOAK) reactors that created the first nuclear age — 52 of them in the 22-year period from 1951 to 1973. Then that pace of first-of-a-kind innovation effectively stopped. Not slowed. Stopped. FOAKreactor design introductions at INL went into a 53-year hiatus from 1973 to 2026. Then four new reactor designs went critical in just 31 days, culminating with Aalo’s Critical Test Reactor on the nation’s 250th birthday.

The conclusion is inescapable: The dawn of the second nuclear age is upon us.

What restarted it was a deadline. In May 2025, President Trump signed Executive Order 14301, “Reforming Nuclear Reactor Testing at the Department of Energy,” which directed the DOE to stand up a Reactor Pilot Program and get at least three new test reactors to criticality by July 4th, 2026. When that goal was announced, most of the industry called it a fantasy. The conventional wisdom is that a new reactor takes at least a decade. The order gave them roughly just twelve months.

They didn’t just hit the target. They beat it. Four companies reached criticality:

• Antares Nuclear — the Mark-0, a 500-kilowatt sodium heat-pipe microreactor, critical at INL on June 4th.

• Valar Atomics — the Ward 250, a 100-kilowatt helium-cooled, TRISO-fueled high-temperature gas reactor, critical in Emery County, Utah on June 18th.

• Deployable Energy — the Unity Nuclear Battery, a roughly 1-megawatt shipping-container reactor whose founder famously drove the core to Idaho in the bed of a Ford F-150, critical on June 30th.

• Aalo Atomics — the Critical Test Reactor went critical at INL in the wee hours of July 4th, the very deadline itself.

The DOE was entitled to its victory lap: for the first time in history, a single country brought four distinct advanced-reactor designs to criticality inside one month’s time. That’s never happened before in world history.

For over fifty years the pace of American reactor innovation was zero. Then, on a presidential dare, four companies did the impossible in four weeks. That is the real headline — and it deserves to be spread far and wide.

So let me be clear before I get selective: every one of these teams did something extraordinary.... but “we made a reactor go critical” and “we’re about to change the economics of civilization” are very different claims, and in my humble opinion, the market is currently failing to distinguish between them.

*********

Tune in tonight at the ZH homepage, X account, and YouTube page at 7pm ET to watch the Aalo energy deep dive live, and see why Erik is betting big on their prospects to change the entire industry.

Tyler Durden Tue, 07/07/2026 - 11:25

Hours After Biggest Drone Blitz On Moscow In Two Years, Zelensky Turns Up Heat At NATO

Ukraine's President Zelensky is in Ankara for the annual NATO summit, trying to bring the pressure on the alliance to step up more defense backing amid the grinding war with Russia, which has increasingly turned into a 'battle of the skies'. 

Over 430 Ukrainian drones targeted Moscow and the surrounding region overnight, soon after which Zelensky appeared on the NATO stage Tuesday, urging allies to prioritize the production of anti-ballistic missile systems. Already Britain has said it plans to lead the way in the Western alliance developing and providing long-range missiles for Kiev.

Getty Images

"The one thing we still need to do here in Europe is build a strong defense against Russia's ballistic missiles," Zelensky said. "It’s a big challenge; this is Russia’s last major advantage."

He cast Russia's own ballistic missile attacks on Ukraine as an issue of global importance. "We already see each other as reliable partners, and it would be only natural to become a part of one common security community," Zelensky told European leaders, also with President Trump in attendance.

The overnight drone attack on the Moscow region is being described as the largest air raid on the Russian capital in two years, though no significant damage or injuries were reported - as air defenses were busy and apparently successful this time.

Moscow Mayor Sergey Sobyanin said "most" of the inbound UAVs were "neutralized by air defense forces on distant approaches." Across the whole nation, Russia's Defense Ministry separately indicated it intercepted 452 Ukrainian drones Monday night into Tuesday morning.

As a result of the heavy attack wave, all four of Moscow's major airports suspended services or else imposed serious flight restrictions, which has by this point happened many times before.

Zelensky at NATO Summit in Ankara:

We have completely eliminated the very idea of Russia having a strategic rear.

And you know this country — for a long time, Russia believed it had a territorial advantage. No one else possessed a deep rear.

It could safely keep military… pic.twitter.com/NMQrH2WuWS

— Clash Report (@clashreport) July 7, 2026

Zelensky has vowed to bring the war to Russia - and in particular it has been rare massive attacks on Moscow which have been particularly devastating. Key energy sites have continued to be pummeled, and fuel shortages and restrictions have been reported across various regions - especially in Crimea - after which the Kremlin says it will begin to import gasoline from some key partners.

Tyler Durden Tue, 07/07/2026 - 11:05

Welcome To Realpolitik, Which Will Be Co-Hosting Every World Cup From Now On

By Michael Every of Rabobank

It's easy to talk of the 'collapse of the rules-based order', but for most people it's too abstract to impact on their day-to-day lives. Then the US president --who claims he didn't know what a red card was-- calls up the head of FIFA to ask if the US World Cup team's leading scorer Balogun can have one suspended to play the round of 16 game vs Belgium - and it is. That prompted outrage from Belgium, UEFA, and billions of football fans.

Could this intervention ruin the competition or even the Beautiful Game? Those asking the question --perhaps during a previously non-existent, FIFA-approved 'hydration break' (for advertising) that breaks up the flow-- overlook that neither FIFA nor UEFA are paragons of transparency and this red card shenanigan already happened in November 2025, when advert-magnet Christiano Ronaldo had his 3-match red card ban suspended under the same disciplinary process Balogun just benefited from so he could take part in this World Cup.

In that regard, the rules-based order has been collapsing for some time. Russia hosted the World Cup in 2018 after seizing parts of Ukraine that Europe today is insistent must be returned. In 2022, we got a winter World Cup in football giant Qatar, which nobody else wanted due to the disruption it brought to other football leagues’ seasons. One can make the argument that the US is now acting at the same level as those who make phone calls to get what they want – and it is. Yet it’s the global bodies that pliantly allow those calls to have an impact, which can be read to mean there’s little incentive in not giving it a try. England, for example, still led by a former human rights lawyer PM for now (but without him calling FIFA), are asking if they can have the red card they just picked up vs. Mexico suspended… just as Mexico would have done the same if the roles were reversed. Welcome to realpolitik, which will be co-hosting every World Cup from now on.   

At the more serious ‘Great Game’ level, today has a NATO summit in Ankara at which there are serious questions about if the alliance can hold together for the long term. There are more over how it will fund what it needs to do either way: Germany is to increase defense spending by 1/3 in 2027 via borrowing more and few else in Europe come anywhere close. Then there is the issue of how that money will be spent, regarding systems and production facilities; in big lumps at big sites or networks of smaller drone manufacturers, etc., as Japan says converting auto factories to the latter doesn’t work; buying from whom, as Canada opts for German submarines; and state- or private-owned given the latter keep refusing to step up capex? Moreover, will Trump grant Turkey F-35s at last when it already has the counterpart Russian S-400 antiaircraft system, which could render the NATO benchmark fighter jet's air superiority void if its tech were to leak? (NB Turkey with F-35s would only increase rising Israel-Turkey tensions.)

Meanwhile, Ukraine's Zelenskyy claims the "battle in the sky" will determine the outcome of that war, so not peace talks?, and Finland's president says NATO backs Ukraine hitting Russia harder, as the FT talks of the risks of Russian escalation, even including the use of tactical nuclear weapons, but perhaps ‘just’ settling for grey-zone destabilisation of the European economy.

Likewise, Iran is seeing millions march at the last Supreme Leader's funeral calling for death to America and Israel and trolling the Saudis and Turkey, as Trump repeated if there’s no deal, he’ll 'finish the job.'  Markets might think they can shrug that off, even though it's our base case, but will have to note another attack on an oil tanker just off Oman during this 'peacefire.'

There’s no movement in Lebanon, but in Gaza Hamas has offered to hand over authority to a US-backed administration – while not promising to disarm unilaterally. Some cynics are wondering if the timing is based around the Turkish NATO summit, where F-35s are potentially on the table and Turkish help may be needed on the ground.

In Asia, the US just rebuked China’s "opaque" nuclear buildup after it carried out a Pacific missile test; and North Korea is lobbying to be included in future China-Russia military drills after its own recent missile test, making the teams and other fronts even clearer.

There's no FIFA to issue or suspend red cards in these kinds of situations - just the UN, with no referees on the pitch or agreement on the rules from the big players, whose Secretary General has now called for "killer robots" to be banned. I'm sure Skynet will take his call as major militaries all try to fuse AI with automation. I’m less sure that killer tech will be red carded as a result.

In markets, a paradigm-shift dynamic is also evident. It's not just an expected headline, like hedge fund managers being the most negative on JPY since 2007 at a time when it already trades like 1986(!)

It's that the Fed's Waller has joined new Chair Warsh in wanting to shake up Fed communications to do so less: ahead of the FOMC minutes today, one wonders if they could just be a truncated, "We talked about stuff," leaving analysts to... well, analyze, rather than being spoon-fed.

It's that the WSJ reporting JPMorgan, Bank of America, and other banks are exploring a deal to shake up the payments world.

It's Jim O'Neill, when not advising Andy Burnham, saying that a BRICS alternative to the US dollar is "no longer a fantasy." (Perhaps: but it's still going to be an Odyssey, I'd wager, and it won't look or act like a dollar as is now, if it appears.)

It's China's banking regulators having to take over online lender Zhongbang from Wuhan over "severe credit risks" in an economy running epic trade surpluses that should provide equally epic levels of domestic liquidity.

Perhaps things will just 'sort themselves out', as some in markets like to think always happens. After all, Belgium just beat the US 4-1, the latter crashing out with a limp performance and a bizarre gift of a goal to their opponent.

However, four-one’d is not forearmed. Will we really see Russia, Iran, China, or North Korea all losing in a great global competition the same? That said, we can all see a lot more presidential phone calls being made to global acronyms.

Tyler Durden Tue, 07/07/2026 - 10:35

Farage Resigns As MP To Force 'People Vs. The Establishment' By-Election

Nigel Farage, leader of Britain's Reform UK party, said Tuesday he is resigning as the member of Parliament for Clacton to trigger a by-election in the Essex constituency, which he intends to contest as the party's candidate.

Farage, who won the seat in the 2024 general election, cast the upcoming vote as a direct challenge to political and media elites. "This will be a people vs. the establishment by-election," he said in a statement. "A chance to stick two fingers up to the entire establishment."

I will make a statement on my future in public life at 2pm.

— Nigel Farage MP (@Nigel_Farage) July 7, 2026

The announcement came during a statement on his "future in public life" after days of intense scrutiny over his personal finances and political donations. Farage has been under investigation by Parliament's standards commissioner since May over a £5 million gift he received in early 2024 from cryptocurrency billionaire Christopher Harborne, a major Reform UK donor. Critics say the gift should have been declared because it was received in the 12 months before Farage became an MP.

Additional questions have arisen over undeclared support Farage allegedly received from longtime associate George Cottrell, who was convicted of wire fraud in the United States in 2017. Reports also detailed media coverage of Farage's family home, prompting the politician to accuse outlets of harassing his daughter and other relatives.

This is an outright lie from @SkyNews. They hounded my daughter at home, just days after The Times published where my family live. Despicable behaviour from the media. pic.twitter.com/cNfZ6Rmzb4

— Nigel Farage MP (@Nigel_Farage) July 6, 2026

Farage has repeatedly denied wrongdoing, describing the gifts and support as personal matters and calling the investigations an "establishment hit job." He said he has "done nothing wrong" and has not broken any laws.

The move allows Farage to bypass a potential parliamentary suspension and recall petition process and instead put his future directly before voters in Clacton. He has long portrayed himself as an outsider battling entrenched interests, a message that has resonated with a significant portion of the British public.

Latest polling shows Reform UK competitive nationally. A YouGov survey conducted July 5-6 and published Tuesday put the party at 25%, ahead of the Conservatives on 21% and Labour on 20%. Farage's personal favorability ratings remain lower, however, reflecting deep polarization around his leadership.

Clacton has been a stronghold for Farage's brand of politics. He captured the seat in 2024 with 46% of the vote and a majority of more than 8,400. A by-election there is widely expected to be winnable for Reform UK, though it will draw intense national attention as a test of whether recent controversies have damaged the party's momentum.

The date of the by-election has not yet been set. Preparations for the contest are already under way following earlier speculation about a possible recall petition.

Tyler Durden Tue, 07/07/2026 - 10:15

DeepSeek Developing In-House AI Chip In Bid To Cut Nvidia Reliance

DeepSeek is developing its own artificial intelligence chip, a move that could reduce its reliance on both US-based Nvidia and China-based Huawei.

Leading model developers are increasingly seeking to control more of their compute stacks, particularly for inference, as AI models move from training labs into the mass market.

DeepSeek is the latest company to pursue this strategy by developing a new in-house inference chip, Reuters reports.

If successful, this effort would mark a major shift for the Chinese AI chatbot company and add new pressure on Nvidia's long-term dominance across the AI compute market. It would also add pressure on Huawei, which has benefited from US export controls that blocked Chinese firms from buying Nvidia's most advanced AI chips.

US companies such as Meta Platforms, Microsoft, OpenAI, and Anthropic are also increasingly turning to in-house chips to reduce AI infrastructure costs.

According to the report, DeepSeek's effort to design a new inference chip is in the "early stages," suggesting that developing a competitive AI chip could take a few years.

A new Bloomberg Intelligence survey found that an increasing number of Chinese companies are shifting away from Nvidia's advanced AI chips.

Chinese executives expect to allocate 46% of their AI accelerator budgets to domestic AI infrastructure over the next 12 months, up from 30% today, according to the survey.

The findings point to growing momentum behind Beijing's push to replace Nvidia in domestic chip stacks.

"China's drive to substitute locally made AI semiconductors for foreign ones is making progress, which is likely to benefit domestic markers such as Huawei and Hygon," said the report, which surveyed dozens of executives at Chinese software, finance, manufacturing and retail companies.

For Nvidia, the risk is not an immediate loss of market share, but a longer-term shift in which Chinese companies and AI chatbot startups increasingly seek in-house or domestically produced chips, suggesting mounting headwinds for Nvidia.

Meanwhile, the token-maxxing fiasco appears to have accelerated a global shift toward low-cost models, a trend that may favor Chinese AI chatbots.

Bloomberg cited OpenRouter data showing that Chinese models are capturing a growing share of developer usage, suggesting that China's AI firms are becoming more competitive in global model adoption.

Magnificent Seven stocks were mixed Tuesday morning, with Nvidia down about 2%.

Nvidia remains up roughly 5% year-to-date, but the stock is still about 17% below its May peak, as investors reassess the longer-term risk of AI model developers building more of their own compute stacks and China seeking to source domestic AI chips.

Tyler Durden Tue, 07/07/2026 - 09:55

The post If Your Financial Adviser Recommends Putting Money in a Trump Account, Fire Them appeared first on CEPR.

French Bond Yields Rise After Le Pen Cleared To Run In 2027 Presidential Election

Marine Le Pen can enter the race to become France's next president after judges confirmed her embezzlement conviction on appeal but handed her a reprieve on an election ban.

Presiding Judge Michèle Agi confirmed Le Pen’s conviction, saying that she and several others at the National Rally party misused European Union funds earmarked to pay for aides.

But the appellate judges reduced her ban to 15 months, thus paving the way for her to lead her party into the next election.

“The court found that the enforcement of this penalty since March 31, 2025, has already remedied the breach of integrity to an extent compatible with the fundamental guarantees afforded to citizens, and that disregarding this would undermine the principle of freedom of candidacy, an essential condition for the democratic exercise of universal suffrage,” Judge Agi said in court.

Le Pen was initially convicted in March 2025 by first-instance judges, who gave her an election ban lasting five years and a two-year jail term that’s on hold while she appeals.

Her party was quick to react, with Bardella quipping on TV against what he described as the “tyranny of judges.”

Jordan Bardella, whom she has groomed as her chosen successor for years, is ready to take her spot as the lead candidate for the National Rally.

The 30-year-old would offer voters a somewhat different profile to Le Pen who has gained ground among voters in three successive presidential campaigns.

A recent poll suggested that either would lead the French election after a first round vote.

French bond yields are up modestly after the news, but were already higher before the decision...

For now, prediction markets show Le Pen's odds of victory improving modestly from an admittedly low level, while Bardella, has consolidated his position as favorite to win...

While Le Pen can still lodge a top court challenge, she has promised to announce whether she’ll run or not after this ruling.

Still, the court gave Le Pen a one-year jail sentence that it indicated she would likely serve with an electronic tag, for at least a portion of the term, and she has indicated she would likely withdraw if she was forced to wear the bracelet during the campaign.

The decision now rests with Len Pen as to her future - she is scheduled to speak in a television interview at 8 p.m. local time.

Tyler Durden Tue, 07/07/2026 - 08:34