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Taiwan Plans $930 Million Sea Drone Buildout As China Expands Maritime Pressure

Taiwan is moving quickly to build a large fleet of unmanned vessels as it looks for cheaper, scalable ways to complicate any Chinese attempt to blockade or cross the Taiwan Strait, according to Nikkei Asia.

The emerging strategy combines something Taiwan already does well, building ships and sophisticated electronics, with American expertise in autonomous systems, artificial intelligence and military command networks.

The potential scale is significant. Taiwan’s navy is considering roughly 1,320 small attack drones for the water, with spending estimated at about NT$29.6 billion, or $930 million. The Coast Guard is pursuing unmanned vessels as well, creating what could become a meaningful new domestic market for maritime defense technology.

Taiwan does not need to build the industry from scratch. It already has shipyards capable of designing and producing the physical platforms, along with a deep electronics manufacturing ecosystem. What it needs are many of the technologies that turn an unmanned boat into an effective military system: secure communications, autonomous navigation, sensors, AI, command-and-control software and the ability to coordinate large numbers of vessels simultaneously.

Photos: Nikkei Asia

That is where U.S. defense technology companies are increasingly entering the picture. CSBC, Taiwan’s government-backed shipbuilder, recently partnered with Rhode Island-based Havoc to develop autonomous surface vessels using Taiwanese manufacturing and American autonomy technology. Saronic, Anduril, MARTAC, VATN Systems, Albacore, Shield AI and Auterion have also established relationships with Taiwanese organizations, including the government-owned National Chung-Shan Institute of Science and Technology.

Havoc CEO Paul Lwin described the model simply: “American autonomy software, Taiwan-built platforms, Taiwan workforce.”

Nikkei Asia writes that domestic companies are positioning themselves for the spending wave. CSBC has developed its Endeavor Manta unmanned boat and says it has capacity to manufacture about 40 annually. Established shipbuilders Jong Shyn and Lungteh are competing for contracts, while companies better known for drones and semiconductors, including Thunder Tiger and Myson Century, are moving into unmanned maritime systems.

The attraction is partly economic. Instead of attempting to match China ship for ship, Taiwan could deploy large numbers of smaller and cheaper autonomous platforms capable of surveillance, targeting, protecting undersea infrastructure and, in some cases, carrying weapons. The war in Ukraine has provided a real-world demonstration of how unmanned systems can impose substantial costs on a conventionally superior military.

But producing thousands of drone boats is only part of the equation. They must continue communicating, navigating and coordinating in a contested environment where satellites, communications infrastructure and command centers could themselves become targets.

“The key gaps are resilient communications, AI-enabled autonomy and C2, and multi-vessel coordination,” said Cathy Fang of Taiwan’s Research Institute for Democracy, Society and Emerging Technology.

That technological gap helps explain why the growing U.S.-Taiwan partnerships matter. Taiwan can supply the shipyards, electronics manufacturing and eventually the production scale, while American defense technology firms provide much of the software and autonomy layer.

If the navy ultimately proceeds with its proposed 1,320-vessel program, the result could be more than another Taiwanese weapons purchase. It could provide the anchor customer needed to establish an entirely new domestic defense industry built around producing autonomous vessels in large numbers, with Taiwan manufacturing the hardware and U.S. companies supplying much of the technological nervous system.

Tyler Durden Thu, 10/01/2026 - 02:45

The Disastrous UK Disability Signal That Corroborates The US Data!

Authored by Ed Dowd: Beyond the Narrative via Substack,

The Disability Signal Across the Atlantic

On August 11 I wrote US Disabilities Hit an All-Time High of 37 Million In July: UP 23% Since Feb 2021. The BLS Current Population Survey printed 37,029,000 Americans 16 and over reporting a disability. That is seven million more people since February 2021, a 3-to-4 sigma break from the pre-2020 plateau that has not mean-reverted.

The inflection is February 2021 with the Covid vaccine rollout not in 2020 when Covid was at its most virulent strain. Alternative explanations fail the timing and the magnitude test. The UK PIP system corroborates that US survey signal with something the American series cannot give you: medically assessed new claims broken down by body system and underlying cause.

If you want to know whether that US survey signal is real, stop arguing about survey design and look at an administrative system that actually diagnoses people.

Go back to the UK Disabilities (PIP) Project we published at Phinance Technologies. The page is still up...use it. It was built so researchers, doctors, and ordinary citizens could see the same thing we saw in 2023. You can look at total body system new claims or by underlying cause new claims (best viewed on desktop) within a body system. You can pick absolute new claims, excess new claims, percent excess new claims and excess new claims z score. We also break it out by monthly and yearly data. Finally you can sort it by age group as well. Play with data and be horrified like we were in 2023. Interactive charts...all done by Phinance Technologies for free.

PIP is not the protagonist from Charles Dickens's novel Great Expectations. It is the UK's main working-age disability benefit officially known as the Personal Independence Pension program by the UK Department of Work. Claims are medically assessed. Decisions, "clearances," as noted above are coded by body system and then by underlying cause. The positive award rate has been stable at around 40 percent, so you are not looking at a sudden collapse in standards. You are looking at more people presenting with more illness...new claims, not just the stock of existing claimants, sorted monthly or yearly and by age band versus a 2016-2019 trend.

That is the advantage over the US survey. The BLS series tells you that disability exploded after early 2021 with the vaccine rollout and not in 2020 with the virus. PIP tells you where in the body it exploded, and it lets you watch the timing against the vaccine rollout curve on the same chart.

Two Body Systems Make the Point

Hematological (blood) disorders went off the rails. New excess clearances rose about 217 percent in 2021 and then 522 percent in 2022 while 2023 declined but still at an absurd 374 percent above trend. Over 300 percent above trend two years running. When looking at new claims on a monthly basis Hematology jumped early and hard almost coincident with the first doses. That is a regime change in medically assessed claims. I have posted those charts more than once on X in 2023. Something broke and the administrative system recorded it at a scale that alone should have produced a public-health investigation...it did not.

Musculoskeletal claims tell a different, equally inconvenient story. Monthly clearances sat near a "normal" 10,000 through 2020 and early 2021. Then, around September 2021, they jumped and stayed elevated above 18,000 a month. The rise did not arrive with the first lockdowns or the first COVID wave. It arrived after the mass rollout and into the booster period. Inflammation, joint and soft-tissue disease, the conditions that take people out of work and onto daily-living and mobility awards. The timing is not subtle.

Those two systems are not the whole file. Cardiovascular and neurological claims rose. Breast-cancer clearances showed large excesses in 2022 and 2023 with high z-scores. Different latencies, same calendar: the break is 2021, not 2020. That is why the UK file is useful. It is not one blob called "disability." It is a set of body systems with different clocks, all accelerating after the intervention that was supposed to end the emergency.

People will say PIP is being gamed by fraud. Look at the body-system split before you buy that. A fraud wave does not preferentially light up hematology in early 2021 and musculoskeletal in late 2021 while neurological claims print 20 plus-sigma years. An awareness campaign does not move breast-cancer clearances. Two independent disability systems, two countries, both detecting the same inflection period in 2021.

The fiscal piece is already visible in Britain. Claimant counts have roughly doubled since 2019. Psychiatric disorders are now the largest single category. Spending is on a path that forces politicians to talk about "sustainability" and tighter points tests instead of asking why so many working-age bodies failed in the same window. The US version of that conversation is coming. A permanently larger disabled share of the 16-plus US population is lower labor force participation, higher absence, higher insurance cost, and more pressure on SSDI and Medicaid. You can ignore a chart. You cannot ignore the payroll.

Bottom Line

I am not a clinician. We said that on the site in 2023 and asked doctors to explain the findings...mostly crickets. The charts are still there. Pick a body system. Pick an age band. Look at the cumulative dose curve. Watch across the many body systems how in 2020 they stay close to trend and then in 2021 they leave the trend. That is the instruction. The US disability series tells you that the population got sicker after February 2021 in the US. The UK PIP file tells you which systems broke and when.

Together they are the corroborating signal no one in official public health circles wants you to see.

The great cover up continues into 2026 and the damage is slowly compounding.

Tyler Durden Thu, 10/01/2026 - 02:00

Brazil Election Polls Too Close To Call, But Polymarket Gives Bolsonaro Clear Lead

Brazil's presidential race is entering the final stretch ahead of Sunday's first-round vote. 

HSBC strategists led by Nicole Inui wrote in a note that the latest polls show socialist President Luiz Inácio Lula da Silva slightly ahead of right-wing Senator Flávio Bolsonaro, though the race remains neck and neck.

Both candidates remain statistically tied. If no candidate wins more than 50% of valid votes, the two will face a runoff on October 25.

Lula (Left); Bolsonaro (Right)

"Brazil's presidential elections are entering their final stretch with first round elections to be held Sunday, 4 Oct. If no candidate wins more than half of the valid vote, a run-off will be held on 25 Oct," Inui wrote in the note. 

Inui continued, "If no candidate wins more than half of the valid vote , a run-off will be held on 25 Oct. First-round election results could be a major market-moving event, we think. The key variable is the margin between the leading candidates. Latest polls point to a tight margin of 5ppts between current president Lula da Silva (PT) vs. Senator Flávio Bolsonaro. 

"A narrower lead for President Lula or stronger performance by third-party candidates could add to policy change expectations, which could support risk-on sentiment. However, history suggests some caution: since 1989, every first-round winner has secured the presidency in the run-off of elections," the analyst said. 

However, Polymarket bettors see a clearer favorite, giving Bolsonaro a 60% chance of winning, compared with 39% for Lula.

Here's more from HSBC analysts on market impacts: 

What to look out for:

Brazil heads to the polls on 4 October, with a second round scheduled for 25 October if no candidate wins more than 50% of valid votes. Recent polling is pointing towards a highly competitive presidential race, with neither candidate expected to garner enough votes to win in the first round. Since 1989, all but one went to a second round. Leading candidates received between c42-c53% in the first-round vote and all went on to eventually win. In other words, first round winners prevailed and they won the first round by c42%-49%. In the last election cycle, the margin of victory was the tightest in recent history at 1.8ppts (50.9% for Lula vs 49.1% for Bolsonaro), with Lula's vote share only increasing by 2.5ppts between rounds, compared with c9-15ppts for winners in previous five runoffs. This is a useful benchmark for a highly polarized election, we think, especially considering there are no relevant left-wing candidates besides Lula in the first round.

Initial upside, not necessarily sustained

In the first trading session following the 2022 first round election, the IBOV surged 5.5%, while real strengthened against the dollar. In the 2022 elections, privatization hopes drove the largest immediate gains in SOEs at the time (Copasa, Sabesp, Cemig), and interest rate futures immediately fell, with consumer discretionary accounting for 50% of the top 10 performers. The move likely was attributed to Bolsonaro’s stronger-than-expected (vs polls) first round results and the composition of the incoming Congress, which together reduced the policy risk premium investors had considered before the vote. However, the Ibovespa came down from its highs leading up to the second round, declining 1.4% from the close after the first round, but still 4.1% above pre-first-round level. The BRL and iShares MSCI Brazil ETF (EWZ Index) followed a similar pattern, but the EWZ saw greater appreciation from 1 September 2022 than the Ibovespa around the run-off. Leading up to the run-off, reduced perceived risks of government intervention continued to support utilities and energy, which retained gains, while consumer discretionary's initial rally faded as interest rate futures rose again.

A similar story could occur for 2026. An outsized reaction could occur immediately after 4 October if investors mark down the perceived fiscal/policy-risk premium based on a tight first round outcome, like what occurred in 2022, but would not necessarily extend into a three week straight rally. Subsequent price action would depend on polling, endorsements, campaign economic proposals, the congressional result, and the long end of the Brazilian rates curve. We believe a first round result associated with lower long-term fiscal risk would likely produce a broader domestic risk-on trade, with SOEs, domestic cyclicals, and bond proxies potentially experiencing the most upside. If first round results are tighter than in the prior elections, equity markets could react positively on expectations of fiscal consolidation ahead.

And post-election results? We see asymmetric returns for equity markets

We expect an initial knee-jerk reaction following the run-off as markets reassess the likelihood of fiscal consolidation under the incoming administration. A result that increases confidence in a more credible fiscal path could drive a relatively rapid rerating through lower-end yields, tighter risk premia, and stronger performance in domestic cyclicals and bond proxies where valuations are sensitive to fiscal and rate outlooks. Conversely, a result that reduces expectations for fiscal consolidation could trigger an initial derating, but we see some valuation support limiting the downside in parts of the market. Many election sensitive names including Petrobras are already trading close to historical trough valuations on an EV/EBITDA basis, leaving less room for further multiple compression Petrobras, 16 Aug. And Banco do Brasil is trading at a P/B of 0.7x and a 69% discount to Itau, close to a historic high, Brazilian Financials, 14 Sept.

Given the close race, we would emphasize segments that can participate in a relief rally without requiring an aggressive risk stance. Lower-beta yield names and selected bond proxies appear better placed to capture upside from lower long-end rates while offering more resilience if the market reaction is short lived. Politically exposed names and higher beta domestic cyclicals could outperform in a market-friendly scenario, but they would also be more sensitive to any reversal in fiscal expectations.

Polls suggest the race remains too close to call, while Polymarket odds point to Bolsonaro as the favorite.

Tyler Durden Wed, 09/30/2026 - 23:55

Uranium Term Prices Hit A Record... So Why Is Nuclear Getting Nuked?

If you only looked at the price of the fuel, you'd think the nuclear trade has never been better. Long-term uranium prices are sitting at $96/lb, an all-time record and up ~12% YTD, taking out the $95/lb high set in mid-2007 at the peak of the last uranium mania (per UxC data compiled by TD Cowen). Spot has followed along to roughly $90/lb, up ~11% YTD.

If, however, you looked at anything with a ticker attached to it, you'd think the nuclear renaissance had been quietly cancelled somewhere between the "AI will need infinite power" phase and the "wait, who's paying for all this capex?" phase.

That, in a nutshell, is the disconnect TD Cowen's uranium team (Craig Hutchison and David Liang) highlights in its two latest Uranium Monitors: the commodity is making all-time highs, while the equities, the SMR darlings and even the IPO pipeline are going in the opposite direction. And the cause, at least in the short run, is the same one that kills every rally in a physical market eventually: the buyers are balking.

A record... on thin volume

Recall that when we first flagged the record term print on Sep 10, TD noted the term price rose $2/lb w/w "despite thin volume," and that as of Aug 31, term contracting volumes were down ~15% y/y at just over 38Mlbs. TD's main hope at the time was that the World Nuclear Association Symposium in London (Sep 9-11), where utilities, fuel-cycle players and policymakers all gather, "could be a catalyst to spur increased trading volumes."

It sort of was. Term volumes rose to 42.2Mlbs by Sep 15, which narrowed the y/y shortfall to ~3%. Still, per TD's latest note, what companies heard from utilities is not exactly the stuff of a buying frenzy:

"Term pricing remains at all-time high, and based on our conversations with the companies under coverage, utilities are feeling a sticker shock on pricing and seem reluctant to contract in any meaningful way."

TD, to its credit, is not fazed and argues that "it is not a question of if term contract volumes pick up, it is a question of when," since utilities keep contracting below replacement rates. The chart below shows what that looks like: 2026 cumulative term volumes are tracking at the bottom of the past five years, well below 2023's ~160Mlb blowout and behind both 2024 and 2025 at the same point in the calendar. Utilities can put off buying fuel for a while. They can't put it off forever, because reactors don't run on "we'll revisit in Q1."

The monthly breakdown shows the same thing: outside a decent May, 2026 has undershot the prior five-year average almost every month, and last year's big November/December catch-up (~30Mlbs and ~26Mlbs) is a reminder of how lumpy, and how late in the year, utility procurement tends to be.

Spot, meanwhile, is a bit livelier. Cumulative 2026 spot volume reached 38.6Mlbs across 377 transactions as of Sep 15 (+12% y/y), though TD concedes this is "largely attributable to SPUT's sizable purchases earlier this year." The encouraging part is that September activity picked up, with weekly volumes topping 1Mlb and "participation broadening beyond SPUT," helped by the usual post-summer seasonal pickup, near-term utility needs and "more aggressive pricing strategies from major producers." Translation: Cameco and Kazatomprom are not in the mood to discount.

Note also where the spot/term spread sits: spot at a ~$6/lb discount to term, a far cry from the 2023-24 squeeze when spot traded at a $30+ premium. This is a market where end users are pricing long-dated scarcity but are not panicking about near-term delivery, which is the exact opposite of a blow-off top.

And for those wondering how "record" a record really is: $95 in 2007 is roughly $150 in today's dollars. Or, as TD put it, "considering the significant inflationary pressures since 2007, there is considerable room for the term and spot price to run." In other words, in real terms uranium is nowhere near its prior peak, as the long-term chart makes clear.

Meanwhile, in equity land...

While the fuel price grinds higher, the stocks go the other way, and fast. Comparing TD's two performance tables, here's what happened in the two weeks between Aug 31 and Sep 14, right around the WNA Symposium that was supposed to be a catalyst: 

On a longer lookback the picture is just as odd. NLR, the broad nuclear ETF, is down 12% YTD and ~35% below its 52-week high, while the AI ETF (AIQ) is up 25% YTD. So for all the talk about nuclear as the "AI power trade," the market has clearly separated the two: investors still want AI, but they're no longer paying up for the power plants that are supposed to run it.

TD's indexed chart shows the round trip: URA surged roughly 80-90% above its 2024 starting point on the Oct 2025 Westinghouse/US government $80BN partnership and again into the spring of 2026, before a vicious drawdown into July. Spot uranium, meanwhile, barely moved through all of that, which is a good reminder of which part of this complex was driven by fundamentals and which part was driven by momentum.

The carnage has been even worse further out on the risk curve. NuScale and Oklo are each down roughly 50% YTD. Holtec pulled its ~$10BN IPO last week, with CEO Kris Singh blaming "a recent market correction and cooling investor enthusiasm for the AI trade," after the recent class of nuclear debutantes (X-Energy ~37% below its April IPO price, Standard Nuclear 20%+ below its July debut) showed what happens to public investors who pay for the promise. And this week, Oklo lost its PJM interconnection queue fight after FERC said its application was deficient, which is not the first time a regulator has sent Oklo's homework back for "missing information."
 

Even the policy headlines, which used to be good for a double-digit pop, now fade within hours. The House passing the Ratepayer Protection Act on Sep 17, which would make data centers pay for their own generation and grid upgrades (effectively the "behind the meter" framework we have long argued should be mandatory), sent NuScale +10% and Oklo +13%... and then both gave back most of it the next day. And the South Korean "$100BN+ for up to eight US reactors" headline that TD flagged as a potential catalyst has, for now, turned into a $22.3BN gas plant in Texas (with no customers), with the nuclear portion reportedly on hold amid the tangle of the Westinghouse/KHNP IP settlement, Korea's talks about a stake in Westinghouse, and tariff negotiations. You can't make this up.

Goldman: "inbounds have been extremely light"

So what does the sell side hear from actual investors? Goldman's Energy, Natural Resources & Utilities sector specialist (Sep 18) gave a blunt read:

"To level set – inbounds have been extremely light on the nuclear front over the last couple of weeks – though we think is likely just a reflection of the current tape (rates, inflation, broader AI concerns)."

What makes the Goldman take useful is the distinction it draws between the long run and the near run. On the long run, "there is less doubt in the longer-term role of nuclear in the power stack." On the near run, though, "there's more focus on time to power (recips, turbines, fuel cells, batteries) and the cost profile for most projects remains a sticking point for investors." In other words, hyperscalers need megawatts in 2027, not gigawatts in 2037, and the market is pricing nuclear accordingly. GS also pointed to an NEI survey showing +7 GWe of new capacity planned via uprates, restarts, longer refueling cycles and other output increases since the prior survey, which is the unglamorous, cheap and fast way to add nuclear power, and which also happens to burn more uranium.

That brings us to the more important point for the fuel.

The supply side isn't getting any easier

While equity investors worry about rates and AI capex, the physical side of the market keeps getting tighter at the margin:

• Kazakhstan's acid problem: Kazatomprom (roughly the Saudi Arabia of uranium) delayed commissioning of its TQZ sulfuric acid plant by 6-12 months (from Q1/27 to Q3/27-Q1/28) after a regulatory suspension, raised capex guidance on acid and cost inflation, and warned that the delay will be reflected in 2027 production guidance. TD thinks "a downward revision of uranium output in 2027 is possible."
• Then Russia made it worse: Moscow banned sulfuric acid exports through year-end. As we noted on Sep 15, Kazakhstan relies on Russian acid for ~20% of its needs, and without a waiver the ban could cut ~3Mlbs (~4%) from Kazatomprom's 2027 output. Goldman's sector specialist flagged the same risk: "Kazakhstan is a major taker of Russian sulfuric acid as an input for uranium production."
• The Red Book reality check: The NEA/IAEA's latest Red Book (Sep 14) showed only a 2.1% increase in economically recoverable resources and emphasized rising mining costs, depletion of low-cost deposits, and the higher cost profile of new discoveries. At the same time, the IAEA raised its long-term outlook to 696 GWe (low) to 1,284 GWe (high) of nuclear capacity by 2060, i.e. +85% to +241% vs 2025.

The chart above is what the long-run bull case looks like: even in the high-production scenario, existing and expected capacity peaks around 2030 and then declines, while requirements climb under both demand cases.

To be fair (and balanced), TD's own model is less apocalyptic in the medium term than the bulls often are. It shows the market roughly balanced near term (-1Mlb in 2026 and 2027), then moving into a surplus from 2030-2033 as Western mine supply ramps (peaking at +27Mlbs in 2031), before the deficit comes back hard: -4Mlbs in 2034 and -42Mlbs in 2035, when total demand hits 322Mlbs vs 281Mlbs of supply. Put differently, the thesis rests on utilities having to lock in 2030s supply today, which is exactly the contracting they're currently putting off because of "sticker shock."

Throw in India opening its nuclear sector to private build-own-operate for the first time (draft SHANTI Act rules released Aug 14, a story we've been tracking since July), the DOE adding 13 more projects to its Nuclear Energy Launch Pad, and Washington's push for faster enrichment buildout, and it becomes clear that policy hasn't turned against nuclear. What has changed is how much equity investors are willing to pay for it.

The mood in London: positive, "albeit perhaps slightly less bullish"

TD hosted its 1-on-1 uranium conference in London alongside the WNA Symposium (which we will discuss in a subsequent post), which drew a record 1,300 attendees. The read: tone "positive, albeit perhaps slightly less bullish than last year," no major announcements, and investors "continue to view progress on the deployment of new nuclear reactors in the U.S. as one of the key near term catalysts." Which, given the Korean deal's detour into Texas natural gas, may take a bit longer to show up.

Still, the picture on actual reactor builds outside the US hasn't changed: 37 reactors are under construction in China alone. The US? Zero.

Meanwhile, in Japan, TEPCO just restarted Unit 6 at Kashiwazaki-Kariwa, the largest power plant in the world: And that's after the public mood against nuclear in the country of Fukushima is, as one can imagine, negative to quite negative. 

Bottom line

The fuel market and the equity market are telling two different stories, and history suggests the fuel market usually wins. The same UBS analysts who in late August warned that the market is "tightening structurally" were pointing to the same combination we see now: firm term prices, long mine lead times, and sustained utility need. The difference today is that equity investors have stopped paying ahead of the utilities. Once utilities get over their "sticker shock" and resume contracting, likely in the traditional Q4 rush if last year is a guide, the question is whether the stocks will still be trading as if nuclear were just another AI-capex casualty.

For those who want to front-run the catch-up, TD keeps Cameco as its top pick among uranium equities and Denison Mines as its top small/mid-cap name (DML is down ~15% in two weeks, so it's cheaper than it was when TD last said so). And Goldman, in a note published just yesterday, reiterated its Buy on Uranium Energy (UEC) after FQ4 revenue came in ahead of expectations "reflecting solid uranium price environment," citing sharply ramping production, falling unit costs, and medium-term catalysts from "US-origin needs (e.g. NNSA)" and a potential move into conversion.

Or, to put it differently: uranium hit a record high and nobody cared. Historically, that's not how the bull market ends; it's what the middle of one looks like.

* *  *

More in the full TD Cowen Uranium Monitor notes (Sep 1 link here and Sep 16 link here) available to pro subscribers.

Tyler Durden Wed, 09/30/2026 - 22:38

Protection Orders, Gun Training, And 3D Printing Laws Among Gun Bills Signed By California Governor

Authored by Michael Clements via The Epoch Times,

California Gov. Gavin Newsom signed a package of 10 gun bills into law that he says will enhance what he considers to be the state's already exemplary record of firearms safety.

Newsom's office announced the signing in a press release on Monday. According to the release, the laws are meant to reduce violent crime involving guns and reduce the number of illegal guns on the street, among other things.

They include a training requirement for the purchase of a gun, expanding criteria for the state's extreme risk protection orders, voluntary firearms storage by law enforcement to prevent violent crime and suicide, and a requirement for firearms blocking technology on 3D printers in the state by July 1, 2029.

"California has been a leader in gun safety. Today's laws continue that work - using data, prevention, and proven tools to help keep firearms out of dangerous situations and support communities affected by violence," Newsom stated in the press release.

Senate Bill 948 will make a training requirement necessary for acquiring a state firearms safety certificate for the purchase of a gun. Existing law requires the certificate for the purchase, transfer, or importation of guns within the state within 60 days of the transaction.

The new law adds a requirement for a four-hour training course that must cover firearm handling and safety as well as a live-fire component. The law becomes effective Jan. 1, 2029.

The press release also touted the state's Gun Violence Restraining Orders (GVRO), crediting them with preventing 58 mass shootings and reducing violent crime overall.

Assembly Bill 175 expands this by allowing courts to issue extreme risk protection orders even if the subject of the order has not been notified. It also prohibits courts from requiring petitioners to show that exceptional circumstances exist that make the order necessary.

Thousands of GVROs have been issued since the first laws were implemented in 2016, the press release states.

"Between 2021 and 2024, the number of longer-term GVROs issued each year in California more than doubled. In 2024 alone, California courts issued GVROs against 1,727 individuals found to pose a significant danger of firearm violence toward themselves or others," the release states.

Newsom also signed a law meant to prevent suicides by providing temporary gun storage for those who are in crisis.

Assembly Bill 1974 allows law enforcement agencies to establish programs to take temporary possession of firearms from those who request such. The law requires the agency to provide clear instructions on voluntarily transferring custody of a firearm and instructions on requesting its return.

It also requires the agency to ensure the person is not prohibited from owning a firearm. The agency must also ensure the firearm has not been reported lost or stolen, used in a crime, or part of an active investigation. Guns that are not picked up by their owners will be destroyed.

The law also exempts the agencies and gun owners from certain requirements for concealed carry and transfer of firearms.

Assembly Bill 2047 is meant to hamper the production of homemade guns that do not have serial numbers or other identifying marks. The law sets a deadline of July 1, 2029, for any 3D printer sold in the state to have firearms blocking technology.

This technology would prevent the user from 3D printing so-called "ghost guns." These guns are most often frames of synthetic materials produced on a 3D printer with metal parts purchased separately. The fact that the homemade guns have no serial numbers makes it difficult to trace them back to their source.

The press release states that the number of unserialized guns has been on the decline in recent years.

"Seventeen percent fewer ghost guns [were] recovered as crime guns in 2025, bringing the decline since 2021 to 37 percent," the release reads.

Gun rights advocates decried the package of gun laws, saying they are about gun control more than gun safety.

Adam Kraut, executive director of the Second Amendment Foundation (SAF), was especially critical of the training requirement, which he considers an obstacle to legal gun ownership.

"It comes after California has already passed an 11 percent excise tax on guns and ammo, and carry permits cost anywhere between $500 and $2,500 in the state, depending on the county. SAF is currently litigating against both of those abuses and will consider a lawsuit against SB 948 as its effective date in 2029 approaches," Kraut stated in an email to The Epoch Times.

Tyler Durden Wed, 09/30/2026 - 21:10

Ken Griffin Pledges Record $3 Billion To Carnegie Mellon, With $2 Billion Going To Miami

Mamdani wants New York’s billionaires to cough up more money. Maybe he should call Florida and ask how they’re getting them to hand it over voluntarily.

Because Miami just scored a $3 billion pledge from billionaire Ken Griffin, with $2 billion earmarked for a brand new Carnegie Mellon campus in the city, according to Forbes.

The massive commitment represents Griffin’s latest investment in Miami’s evolution into a major center for finance, technology and entrepreneurship. The Citadel founder is directing the bulk of the money toward establishing Carnegie Mellon in South Florida, adding a major research university to the city’s rapidly expanding business ecosystem.

Under the plan announced Wednesday, Carnegie Mellon will develop a 35-acre campus in Miami’s Wynwood neighborhood. Work on the project is slated to begin in 2027, with the first graduate students expected to arrive in 2028.

Another $1 billion will go toward Carnegie Mellon’s operations in Pittsburgh. That money will support financial aid and other university priorities, while a substantial portion will be directed to its renowned computer science program, which will take the new name Kenneth C. Griffin School of Computer Science.

The university says Griffin’s $3 billion pledge is the largest individual donation ever made to an American university. Griffin is also set to take a seat on Carnegie Mellon’s Board of Trustees.

Forbes writes that the deal marks another significant expansion of Griffin’s footprint in Florida. Citadel moved its headquarters from Chicago to Miami in 2022, and Griffin has since poured roughly $2.4 billion into South Florida organizations and initiatives, including substantial support for education, according to Reuters.

For Miami, the university project could ultimately have an impact well beyond Citadel’s own presence in the city. Carnegie Mellon plans to concentrate its new campus on fields including national security, healthcare, energy, climate resilience, advanced manufacturing and industrial technology, giving Miami another potential anchor as it attempts to build a larger technology and research economy.

Griffin has framed the commitment as an investment in American innovation and future job creation, particularly in industries where the United States can strengthen its competitive position globally.

The sheer size of the pledge also resets the bar for university philanthropy. Michael Bloomberg’s $1.8 billion contribution to Johns Hopkins in 2018 was among the previous benchmarks. With this latest commitment included, Reuters estimates Griffin’s lifetime charitable giving at approximately $5.7 billion.

For cities trying to figure out how to get billionaires to part with their money, Miami may be offering an interesting example: make them want to put their capital there, and the checks can get awfully large.

Tyler Durden Wed, 09/30/2026 - 20:45

Ron Paul: The Coming GOP Bloodbath?

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Most indicators suggest that the Republicans in the House and Senate are going to face a brutal backlash from the American people in November. Polling with generic ballots suggest a big win for the Democrats and likely the loss of Republican control of both houses of Congress.

There is little reason to cheer a Democratic party victory, however Republicans in charge have for the most part earned what is coming to them. They have refused to uphold their Constitutional obligation to take leading responsibility for war powers.

Earlier this year, President Trump launched what is the most unpopular war in US history when on February 28th he ordered a full US assault on Iran. Iran had not attacked or even threatened the United States and our own intelligence community continued - and continues - to claim that Iran is not building nuclear weapons.

The February attack followed last June's US bombing of Iran after which the president claimed that the country's nuclear program was "completely obliterated."

Congress over too many years has been used to allowing the President to have his own way on matters of war and peace. Members bask in the false patriotism promoted by the media and special interests as the people "rally around the flag." Eventually, when the war has gone on for years without "victory" - as in Iraq and Afghanistan - many claim they were never really for the war in the first place.

This time is different. There was no propaganda blitz. There were no attempts to convince the American people that the "smoking gun" could be a "mushroom cloud" as we were told in the run up to the 2003 Iraq war. The majority of Americans were against the war on Iran before it started and only became more opposed over time.

As the war drags on, we have seen the national debt pass $40 trillion, diesel fuel prices at the highest ever, and inflation hitting the middle class and poor even harder. The "cakewalk" again failed to materialize.

Incumbent Republicans seeking re-election are in such a panic over voter anger about the war that they have taken to calling for a quick end to it while on the campaign trail. When they get back inside the Beltway, however, they vote to keep the war going for fear of President Trump's anger.

This is not leadership.

Late last week the Iranian delegation in New York for the UN General Assembly meeting offered an off-ramp. Essentially it was the same Memorandum of Understanding that President Trump signed last June and promptly disregarded, but on a shorter timeline. By Sunday, the President announced that he would reject the deal - a deal like one he already signed.

There is no strategy for winning this disastrous war, it is clear. From over-confidence on decapitation strikes to certainty of a quick military victory, the Administration is now promising that they will win by crippling Iran's economy. The problem is that Iran has been operating under "crippling" sanctions for decades and has a high economic pain tolerance.

Unfortunately, both parties in DC are war parties, so again it is hard to cheer the likely Republican losses. But sometimes electoral losses can serve as wake-up calls. Eventually we may see the re-emergence of antiwar Republicans in the spirit of the late Sen. Robert Taft and a restoration of the Constitution.

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.

Tyler Durden Wed, 09/30/2026 - 20:20

To Build Golden Fleet Frigate Fast, Two Shipyards Are Needed

Authored by Brent Sadler & Chase Ouellette via RealClearDefense,

In 1798, while at war with France, an exasperated British Lord Nelson exclaimed, "Were I to die at this moment, 'want of frigates!' would be stamped on my heart." It's a perennial problem: Frigates formed the backbone of navies in Nelson's time and do so today as well, and there seldom seems to be enough. The U.S. Navy's ambitious Golden Fleet shipbuilding plan aims to fill a frigate gap but will require shipyard capacity that today the nation lacks.

The Navy's 2026 shipbuilding plan plans a fleet of 66 frigates. By 2031, two Constellation-class frigates are to be completed at the Marinette, Wisc. shipyard and a modified U.S. Coast Guard National Security Cutter at the Ingalls, Miss. shipyard. But to meet the Navy's goal, a sustained delivery of more than three frigates per year will be needed by 2037. Such a production schedule is unlikely with one shipyard, and the plan all along was to have two frigate-producing shipyards.

In December 2020, just months after the initial frigate contract, the Navy reported to Congress its intention to stand up a second shipyard to expand production to three ships by 2023 and four ships from 2025. In its 2025 shipbuilding plan, the Navy laid out a proposal to expand frigate production to a second shipyard by 2030.

The Constellation frigate program and a repurposed National Security Cutter will fill the need for a multi-session surface combatant - anti-submarines warfare and limited air defense. Nearly seven years after the program's inception, zero frigates have been built.

Complicating frigate production has been persistent design uncertainty; one adjustments to original FREMM design for Constellation, and uncertainty over how the Navy will turn the National Security Cutter into a frigate. For Constellation, the intent was to build a proven allied design with little to no changes, but modifications resulted in the ship retaining only 15% of its original design. Today the design is over 95% complete, but cost and displacement have ballooned to approximate a destroyer.

The axe fell in November 2025. Then-Secretary of the Navy Phelan cancelled Constellation because it was 80% the cost of a destroyer while providing only 60% of their capability. The thinking then was to substitute this with a repurposed cutter.

The previous delivery of 10 National Security Cutters seemed to validate a pivot towards HII's Ingalls shipyard. That said, modifications will be needed before its design is Navy-ready: modest air-defense systems, torpedo magazines, added fuel storage, additional crew accommodation. But it has been years since the last National Security Cutter was built. As such, additional workforce at Ingalls will be needed and supply chains restarted, slowing renewed production of a reproposed cutter.

On the other hand, the Constellation program does benefit from Fincantieri investments of $800 million and workforce expansion of 850 that since cancellation has begun to be let go. Reversing this is still possible with a finalized design that could allow for initial delivery quicker than the Ingalls repurposed cutter. But both options today face capacity constraints.

In an August 13 memo, President Trump announced a framework to increase domestic shipbuilding capacity using the "Finland Model" that seeds domestic shipbuilding growth through initial overseas orders. This works by making conditional ship orders that see the initial hulls built at foreign shipyards while concurrently developing American shipyards to construct later ships. This model is inspired by from the 2024 ICE Pact icebreaker construction effort with Canada's Davie Shipbuilding with shipyards in Finland and Texas.

Adapting the Finland Model to frigate production offers way ahead that could leverage shipbuilding capacity in Japan and South Korea - the world's second- and third largest shipbuilders, respectively. Both nations build capable frigates that have emerged as potential options for meeting urgent American frigate needs: South Korea's Chungnam-class and Japan's Mogami-class. Already, Australia has inked their own Finland Model 11-ship deal with Japan, with the first three Mogami-class vessels being constructed in Japan and follow-on production in Australia.

Thoughts of partnering with Turkey on frigate production, however, would be hindered because it hasn't made industrial investment commitments like Japan and South Korea have. Japan has committed a portion of the $550 billion of U.S. investments to modernizing America's shipbuilding industry. South Korea's Hanwha Group has followed its $100 million purchase of its Philadelphia shipyard in 2024 with a $5 billion infrastructure plan to further develop the facility, and Seoul has committed $150 billion to the Make American Shipbuilding Great Again.

While the Navy may opt to acquire foreign frigates under the Finland Model, further leveraging existing American shipbuilding capacity at Ingalls and Marinette shouldn't be overlooked to further accelerate domestic frigate construction. The Navy needs frigates, and unconventional approaches required to be clear, but only a plan that seeks added domestic shipbuilding capacity will be sustainable.

Brent Sadler is a 26-year naval veteran and current senior research fellow for naval warfare and advanced technology at the Heritage Foundation. Chase Ouellette is a member of Heritage's Young Leaders Program.

Tyler Durden Wed, 09/30/2026 - 19:30

Benchmaxxed: Google's New Gemini 4 Aces SAT, Struggles With Actual Job, "Skeptical Employees" Admit

After a year in which Google's AI roadmap resembled a Waymo stuck in a roundabout, the search giant on Wednesday finally unveiled Gemini 4 "Argon", its long-awaited flagship model. The market cheered, briefly: according to Goldman's closing equities color, GOOG traded +2% after hours on the "Argon" announcement. 

Then Bloomberg reported that some of the people who have actually use the thing - as in Google's own engineers - aren't nearly as impressed as the leaderboard. The stock promptly faded. 

According to Bloomberg's Julia Love and Davey Alba, Gemini 4 "performed well on benchmarks widely used to gauge model efficacy" but "does less well when employees actually put it to work," particularly on coding. One insider said the model "isn't particularly adept at front-end design" - the part of software that decides how apps and websites look and feel. Which is a bit awkward for a company whose entire business is, well, things you look at on a screen.

Google, naturally, disagrees. It told Bloomberg it would be "inaccurate" to say Gemini 4 is underperforming in coding, and pointed back to last week's remarks by DeepMind boss Koray Kavukcuoglu, who said "it's a certainty that we are always gonna be at the frontier." Another Google employee said there is "large consensus" internally that the model is frontier-class. Which is the kind of thing one tends to say when there isn't.

The industry has a word for this. "Benchmaxxing" is when engineers optimize a model to crush standardized tests rather than to do useful work - the AI equivalent of the kid who memorizes every SAT prep book, posts his 1600 on LinkedIn, and then can't do his own laundry. Two people familiar with Gemini 4 told Bloomberg the model appears affected by exactly this.

Surge AI founder Edwin Chen put it more bluntly, calling benchmark-chasing "an incredibly pernicious problem" and comparing it to bragging about your kid's SAT score. We'd add that a generation of Silicon Valley's finest minds has now spent billions teaching machines to do what they themselves did in high school: optimize for the test, then act surprised when the real world grades on a curve.

The irony is that Google's own researchers have documented how quickly optimization turns into gaming. As we reported on September 3, a DeepMind experiment found that when math problems got hard, 9% of AI agents outright cheated and another 5% cheated "after hesitation", gaming a shared knowledge base that rewarded successful submissions. Turns out teaching to the test works on silicon too.

A $400 million detour

Gemini 4 is also the model Google shipped instead of the one it promised. At I/O in May, Google pledged Gemini 3.5 Pro for June; the date slipped (Bloomberg first reported the delay on July 16, citing tech that "fell short of internal goals") and the project was eventually abandoned altogether. Bloomberg Intelligence's Mandeep Singh estimates a frontier training run can cost as much as $400 million - before paying the researchers, many of whom have since left.

And leave they did. We noted in June that Google was losing more Gemini researchers to Anthropic, following the earlier departures of Nobel laureate John Jumper and transformer co-inventor Noam Shazeer. Then in August came the big one: Jeff Dean exited after 27 years to launch his own startup, taking several senior researchers with him and knocking 5% off Alphabet stock. Demis Hassabis subsequently kicked himself upstairs to chairman, handing day-to-day DeepMind operations to Kavukcuoglu - who now gets to defend Argon's front-end skills to Bloomberg.

Why this matters: the ROIC math doesn't grade on benchmarks

This would be a nerd-bro squabble over leaderboard screenshots if it weren't for the money involved. Gemini underpins nearly everything Google sells - Search, Maps, Gmail, Chrome, each with over a billion users - and Alphabet is one of the hyperscalers footing the largest capex bill in corporate history.

Per Goldman's Ryan Hammond (full note available to pro subs), US hyperscalers are on track to spend roughly $800 billion in 2026; consensus expects $1.1 trillion in 2027, while Goldman's house view is even higher at $1.2 trillion and $1.4 trillion for 2027 and 2028. Hammond estimates hyperscalers need about $300 billion of annual AI revenue just to break even on 2026-27 spending, and that end users may ultimately need to spend around $1 trillion a year on AI applications for everyone in the stack to earn decent returns.

Separately, Goldman's Eric Sheridan, whose ROIC framework we flagged last week, calculated that assuming a 15% ROIC target and ~$42 billion of capex per gigawatt, the six big US hyperscalers need to generate roughly $1.42 trillion in cumulative revenue during 2028-30 - about $11.6 billion per GW per year - with a range of $908 billion to $1.89 trillion depending on assumptions. As we tweeted at the time, even in Goldman's worst-case scenario where ROIC on capex goes to zero, they'd still need $920 billion a year just to cover depreciation and running costs.

Here's the rub: none of that revenue gets paid in MMLU points. It gets paid by developers and enterprises choosing whose model to build on. And Bloomberg notes Gemini 4 is "a very large model" - and big models are expensive to serve, which means pressure on margins at exactly the moment the capex hurdle is rising. Goldman's TMT desk flagged this week that the industry is already in a price war: OpenAI cut Luna pricing by 80% in July and usage rose roughly tenfold, while "Big Short's" Steve Eisman is openly asking what happens to margins if cheaper Chinese and open-weight models push prices down further. Bringing an expensive, benchmark-optimized heavyweight to a knife fight over token pricing is a bold strategy.

Meanwhile, the competition isn't waiting

The timing couldn't be worse. On the same day Google unveiled Argon, OpenAI was busy at its Developer Day rolling out "Dots" - persistent, always-on agents that live inside ChatGPT, Slack and Teams. Goldman's Sean Johnstone noted OpenAI is "increasingly competing with Microsoft 365, Google Workspace and traditional enterprise software - not simply other AI models." Per Axios, cited by Goldman's desk, OpenAI's ARR is nearing $70 billion, up from ~$40-41 billion as recently as mid-August, with enterprise sales more than doubling since July. OpenAI is now reportedly seeking $30 billion at a $1.4 trillion valuation.

And earlier this month Meta released its new agentic platform, Muse, which promptly took the app charts by storm - so thoroughly that Amazon blocked it - and sparked a 25%+ rally in META. Goldman's Sheridan now frames agentic commerce as one of AI's biggest monetization opportunities, noting that "similar to how Google captured search intent, successful AI platforms may capture shopping intent." Read that sentence again if you're long GOOGL.

To be fair, Gemini 4 has real strengths: insiders say it stands out at multimodal work like extracting metadata from video, on safety and cybersecurity (it reportedly beat OpenAI's Astra on a security benchmark), and it can spit out up to 1 million tokens - roughly 750,000 words - in one go. Whether anyone needs a 750,000-word answer is a separate question; we suspect the answer is "only for benchmarks."

Bottom line: Google has the distribution, the TPUs and the balance sheet. What it doesn't have is much time. Every quarter it spends explaining leaderboard scores, is a quarter that OpenAI, Anthropic and Meta spend convincing developers, businesses and consumers that the future of search and software runs on their platforms. Because the $1.4 trillion question isn't who tops the leaderboard - it's who gets paid.

Tyler Durden Wed, 09/30/2026 - 19:04

Judge Orders New York City To Scrap Notices For Mamdani's Tax On Second Homes

Authored by Jill McLaughlin via The Epoch Times,

A Staten Island judge ruled Sept. 29 that New York City Mayor Zohran Mamdani's administration mishandled the rollout of a pied-à-terre tax on second homes in July, ordering the city to scrap the notices and start over.

Supreme Court Justice Wayne Ozzi sided with homeowners who claimed the program that in July added a special tax on second homes worth more than $5 million penalized them needlessly.

Ozzi found "the mailed notices are arbitrary and capricious, affected by errors of law, and in violation of the recipients' due process rights."

"Respondents failed to properly make individualized 'initial determinations' with regard to 'primary residences,'" Ozzi wrote in the ruling. "All previously Mailed Notices are to be canceled."

The homeowners sued on Aug. 7 and were granted a temporary restraining order by Ozzi on Aug. 10.

The lawsuit claimed the city's notices "do not constitute proper notice under Tax Law" and sought relief for over 900,000 properties and owners who were identified in a list published online by the city.

Ozzi ordered the city to remove the list from the website and replace it with properties that are subject to the surcharge.

He also ordered the city to cancel all previously mailed notices and mail new notices only to a property that has been individually assessed to be a non-primary residence and subject to a surcharge.

The city was also directed to use the most recent available tax information and current fiscal year information for the tax assessments.

The new notices were required to include information about how property owners can challenge the city's final determinations and include procedures and property records or documents to support the city's findings, along with other information.

Mamdani's office didn't return a request for comment.

Staten Island Borough President Vito Fossella said he strongly agreed with the ruling.

"We have said from the beginning that it was fundamentally wrong to put more than a million people on this 'enemies list,'" Fossella said in a statement. "And, the vast majority of those who were on the list did not belong at all.

Fossella said he thought the city should apologize for needlessly putting hundreds of thousands of people in distress.

"In being irresponsible and arbitrary, the City artificially created an atmosphere of confusion and fear about receiving this tax, and their information being wrongfully exposed, for no good reason," Fossella said.

The tax on second homes was first announced by Mamdani on social media in May. Mamdani said the tax would be for the "ultra-wealthy elite - those who own $5 million apartments in New York City but don't actually live here."

The tax became effective July 1 as part of the city's fiscal year 2027 budget. The measure was expected to generate about $500 million for the city each year.

Tyler Durden Wed, 09/30/2026 - 18:40

Newsom Signs Laws Banning Shock Gloves And Taxing Immigration Detention Centers

Authored by Chase Smith via The Epoch Times,

California Gov. Gavin Newsom signed 21 bills on Sept. 29 aimed at limiting federal immigration enforcement in the state, including a ban on officers using shock gloves and a new 25 percent tax on private detention centers.

California Gov. Gavin Newsom speaks in Los Angeles on Sep. 25, 2024. John Fredricks/The Epoch Times

"California is taking action to strengthen transparency, accountability, and oversight around immigration enforcement in our state," Newsom said in a statement.

"This is about stepping up where the federal government has failed our communities," the Democratic governor said. "We will continue protecting our people, upholding the rule of law, and making clear that if the federal government operates in California, we will hold them accountable."

The shock glove ban applies to all officers in California, including federal immigration agents. It takes effect next year, expires Jan. 1, 2030, and requires the state Department of Justice to complete a safety study on the devices by Jan. 1, 2029.

Immigration and Customs Enforcement (ICE) awarded a $16.7 million no-bid contract last month for 6,000 pairs of the gloves, which deliver an electric shock at the push of a button. ICE said at the time that the devices would help officers control resisting detainees and protesters.

"Sanctuary politicians attempting to ban our federal law enforcement from any safety equipment is despicable and a deliberate attempt to undermine and endanger our officers," the agency said in a statement at the time, responding to a group of Democratic lawmakers who urged the agency to abandon the plan.

California law enforcement groups broadly opposed the shock glove ban, including Sacramento Sheriff Jim Cooper, a Democrat and former state lawmaker.

"When the federal government does something, the state Legislature wants to ban it," Cooper said at a news conference last month.

"For me, use of force is so important. We talk about it all the time. De-escalating [to] a lower level of force. What they're doing by trying to ban this glove, and it conducts electricity - a much lower voltage than a taser - they're making our job harder."

Newsom also signed a revised ban on officers wearing masks. A federal judge blocked the state's first mask ban in February, ruling that it unfairly targeted local and federal officers because it exempted state officers. The new law applies to all officers.

Other bills Newsom signed on Tuesday restrict the use of state-owned property for immigration enforcement staging, processing, or detention, and one allows people to sue federal officials accused of violating their constitutional rights.

Another law protects people traveling to and from courthouses from civil arrest, and another bars ICE officers who have committed serious misconduct from becoming police officers or public employees in California.

A fifth law requires rental vehicles that law enforcers use for arrests or transport to display a decal identifying the agency, with limited exceptions.

Detention center taxes will go to state immigration-related services. A separate bill ends a property tax exemption claimed by some detention facilities.

Newsom's office acknowledged in its announcement that California "cannot dictate federal immigration policy." It said the state can set requirements for state property, state resources, detention facilities, public records, and law enforcement practices where federal enforcement operates in California.

Courts have mostly sided with the Justice Department in challenges to state limits on federal agents. In April, an appeals court blocked California's separate law requiring officers to wear identification, ruling that it violates the Supremacy Clause of the Constitution. Federal judges have since blocked mask bans in Virginia on June 30, Philadelphia on July 2, and New York on Aug. 3.

States have fared better on other measures. On Sept. 4, a federal judge dismissed a Justice Department lawsuit challenging an executive order by New Jersey Gov. Mikie Sherrill, a Democrat, that bars federal immigration officers from using state property for enforcement. California's package includes a similar ban on state-owned property.

"To be crystal clear: we will not abide by unconstitutional mask bans," a Department of Homeland Security spokesperson said in an emailed response to an inquiry from The Epoch Times on Tuesday.

"The Supremacy Clause makes it clear that California's sanctuary politicians do not control federal law enforcement. No tax will stop ICE from deporting criminal illegal aliens to make California safe again. We need California to cooperate with our officers and stop releasing criminals from their jails into California's neighborhoods. Seven of the 10 safest cities in America cooperate with ICE."

The spokesperson said that enforcing immigration law is a federal responsibility under the Constitution. Concerning the shock gloves, the spokesperson said that ICE reviews its equipment to make sure it is "consistent with all applicable law enforcement policies and standards," and that officers are "highly trained in de-escalation tactics and regularly receive ongoing use of force training."

Lauren Bis, a White House spokeswoman, responded to Newsom's move in an emailed statement to The Epoch Times.

"Gavin Newsom has no authority over federal law enforcement," she said. "The Trump administration will not abide by his unconstitutional legislation. Our law enforcement officers will continue arresting and removing criminal illegal aliens from American communities while radical Democrats in California refuse to cooperate and instead choose to release criminal illegal aliens from their jails into communities to terrorize innocent Americans."

A Department of Justice spokesperson said in an emailed statement to The Epoch Times, "The Department of Justice will continue to challenge illegal sanctuary policies designed to thwart federal immigration enforcement or impede lawful federal operations."

California is one of 17 states with Democratic-controlled legislatures that have passed more than 100 bills this year aimed at limiting immigration law enforcement, according to an Associated Press analysis.

The most common goal of those bills has been to bar local authorities from cooperating with federal immigration agents.

Tyler Durden Wed, 09/30/2026 - 17:00

Hegseth Orders Cyber Command, Intel Agencies To Counter Foreign Threats To Midterms

Secretary of War Pete Hegseth has directed U.S. Cyber Command and the Pentagon's combat support agencies to focus intelligence and cyber tools on foreign efforts to interfere in the 2026 midterm elections.

The Department of War (DoW) memo circulated Monday and dated Sept. 22 was addressed to the Cyber Command chief and the directors of the National Security Agency (NSA), the Defense Intelligence Agency, and the National Geospatial-Intelligence Agency.

"In America, the people rule - and we must ensure that their voice remains sovereign, secure, and entirely undiluted," the memo reads.

Hegseth wrote that secure voting plays a critical role "in sustaining the strength of our democratic system," and that the department "will effectively wield its capabilities to protect and uphold the reliability of America's voting mechanisms against external manipulation and disruption from foreign actors."

Cyber Command and the combat support agency directors "will prioritize the use of DoW intelligence and cyber capabilities to ensure foreign actors do not meddle in our democratic systems," the memo says.

Hegseth also ordered the Defense Intelligence Enterprise to "execute collection and production on foreign threats to our elections, in accordance with the law, regulation, Executive direction, and DoW policies and directives."

He told Cyber Command to use its authority "in coordination with the Department of Homeland Security to counter potential cyber threats from foreign actors targeting our elections."

As Kimberly Hayek further reports for The Epoch Times, Monday's DoW release directed Cyber Command and the combat support agencies to "prioritize and deploy advanced intelligence and cyber capabilities to identify, disrupt, and neutralize foreign interference in U.S. democratic processes."

Chief Pentagon spokesman Sean Parnell said the agencies would work with state and local election officials.

"Free and fair elections are the foundation of our republic," Parnell said. "By working in lockstep with federal, state, and local partners, U.S. Cyber Command and our defense intelligence teams will defend the integrity of America's voting systems, expose foreign malign influence, and ensure our democratic processes remain secure from external manipulation while protecting the fundamental freedoms of the American people."

Gen. Joshua M. Rudd, who serves as Cyber Command chief and NSA director, described the assignment as work the two organizations already conduct.

"U.S. Cyber Command and the National Security Agency are closely partnered to identify and defend against cyber threats to our nation. The Command and the Agency regularly counter actions by malicious foreign cyber actors including those with the intent to interfere with our democratic process," Rudd said.

Hegseth called protection of the vote a "no-fail mission" and part of a "whole of government effort."

The memo also orders the entire Defense Intelligence Enterprise to "mobilize every authorized asset, capability, and partnership under your command to defend our election infrastructure from foreign malign influence and ensure that every lawful voter can cast their ballot free from foreign intimidation, coercion, or fear."

Tyler Durden Wed, 09/30/2026 - 16:40

Micron Flat After Strong Revenue Guidance Offsets Slight Margin Miss

The highly anticipated Micron earnings (since memory is the one place in the sector in the market where all those massive new bond sales are funding) are finally out and they painted a solid, if slightly mixed, picture compared to buyside bogeys.

As we said in our preview, what would matter today is not what the company did in Q4, but how it guided to Fiscal Q1 (ending next calendar quarter), and sure enough Q3 was solid across the board:

• Adjusted EPS $33.42, beating estimates of $31.83
   
• Adjusted revenue $54.23 billion vs. $11.32 billion y/y, and beating estimates of $51.49 billion
  • Core Data Center revenue $18.00 billion, beating estimates of $11.34 billion
  • Cloud Memory revenue $16.28 billion, beating estimate $15.14 billion
  • Mobile and Client Revenue $13.11 billion vs. $3.76 billion y/y, beating estimates of $12.95 billion
  • Automotive and Embedded rev. $6.82 billion, beating estimates of $4.73 billion
     
• Adjusted gross margin 87% vs. 45.7% y/y, beating estimates of 86.2%
   
• Adjusted operating income $44.64 billion vs. $3.96 billion y/y, beating estimates of $42.75 billion
• Adjusted operating income margin 82.3% vs. 35% y/y, missing estimates of 82.8%
• Adjusted operating expenses $2.57 billion vs. $1.21 billion y/y, beating estimates of $1.68 billion
  • R&D expenses $1.91 billion, +83% y/y, estimate $1.38 billion
  • Adjusted operating expenses $2.57 billion vs. $1.21 billion y/y, estimate $1.68 billion
     
• Cash flow from operations $43.97 billion vs. $5.73 billion y/y, estimate $33.87 billion

From the slideshow:

“Micron delivered record fiscal 2026 results, and we expect an even stronger fiscal 2027,” CEO Sanjay Mehrotra said in the statement. “Memory enhances this intelligence and the competitiveness of our customers’ platforms.”

So far so good. However, what matters more is guidance and here is why the stock's after hours reaction has been muted at best:

• Q1 adj. EPS 38.15, beating exp. 35.40.
• Q1 revenue 61.5bln (+/- $1.5BN), beating exp. 57.024bln. 
• Q1 gross margin 86.3%, missing exp. 86.7%, and notably below buyside bogeys of 87.5%-88.0%

And this is how the company guided:

• We anticipate fiscal Q1 to be the floor for gross margins in fiscal 2027. As Sanjay mentioned, we made a decision to increase fiscal 2026 incentive compensation in fiscal Q4. Most of the increase in fiscal 2026 incentive compensation pertaining to manufacturing was absorbed into inventories in fiscal Q4. As a result, the effects from the sale of these higher cost inventories principally impact fiscal Q1 gross margin. September 30, 2026 September 30, 2026
• Fiscal Q2 benefits from less of this fiscal Q4 related compensation expense, but this benefit is offset by the impact of higher fiscal 2027 incentive compensation. We expect higher gross margins beyond fiscal Q1 for the remainder of fiscal 2027, with a more moderate rate of price increases.
• We project operating expenses to increase by approximately $2.5 billion in fiscal 2027, primarily from higher R&D (research and development) to support an unprecedented set of opportunities in memory and storage and from higher incentive compensation plans.
• We expect a fiscal Q1 and fiscal year 2027 tax rate of around 15.5%

Micron and its rivals continue to be overwhelmed by memory-chip orders. Though the Boise, Idaho-based company is expanding its manufacturing capacity, prices are expected to remain high for the foreseeable future. Here are the highlights from the company's market outlook: 

• Micron (MU) says operating expenses are to increase by about USD 2.5bln in fiscal 2027 and expects memory and storage supply-demand conditions to be much higher in fiscal 2027 and 2028 than in 2026
• In Q1, project capex of around USD 11.5bln and anticipate first-half FY27 capex to be USD 25bln.
• Project CapEx to be higher in H2 FY27.
• Given the need for DRAM cleanroom space and supported by greater visibility from SCAs into our demand through the end of the decade and beyond, we plan to increase our capex (capital expenditures) in fiscal 2027 versus prior plans.
• Expect server unit growth in the high-teens % range in both CY26 and CY27.
• Strong server unit growth is supported by a modestly lower rate of content growth than prior expectations, amid tight memory supply.

“Near-term conditions are still very good, in our view, with strong demand and rising pricing in evidence,” Morgan Stanley analyst Joseph Moore said in a note before the report was released. “The debate has very clearly shifted from, ‘How good can it get?’ to ‘How long can it stay this good?’”

For now the jury is out, as unlike last quarter when the stock blasted off after earnings, this time it is flat, having faded a modest after hours rise. 

Micron shares were the best performer in the Philadelphia Stock Exchange Semiconductor Index this year, gaining 273%. 

Tyler Durden Wed, 09/30/2026 - 16:28

Who Keeps The Money When AI Rewrites Bank Code?

Authored by Patrick Feeley via Substack,

The code most American banks run on was designed in 1959, the year Alaska and Hawaii became states. A committee of government and industry people wrote COBOL so that business programs could be read by people who were not mathematicians, and a good part of it was modeled on FLOW-MATIC, an earlier language from Grace Hopper, a Navy officer. I doubt anyone on that committee thought it would still be running banks in 2026. In 2017 Reuters estimated that about $3 trillion of daily commerce still ran through COBOL. In April 2020, when unemployment claims in New Jersey overwhelmed the state's forty-year-old system, Governor Phil Murphy went on television and asked for volunteers who knew COBOL. The state had to go on TV to find programmers for its own unemployment system.

I bring this up because of a clip I posted last night of Bill Ackman talking with Shane Parrish on The Knowledge Project. Ackman said Cognition, the company behind the coding agent Devin, can rewrite a bank's COBOL "in a matter of days as opposed to many months." Someone replied asking me what I meant when I said commoditized lenders would compete the savings away. It is a fair question and I could not answer it in a tweet.

I do believe Ackman that the savings are real. Inside a large bank the core ledger still runs in batch. The balance a customer sees on the app at noon is an estimate (bankers call it memo-posted). The actual accounting happens overnight, when a mainframe works through a queue of jobs in a set order, posting transactions, accruing interest, charging fees, and producing files that every other system reads the following morning. The programs share data through copybooks, which are record layouts where a field is known only by its position. Cognition described one client where a single taxpayer ID showed up under dozens of different names across thousands of programs. Most big banks were put together through acquisitions, and each acquired bank came with its own core system that management was usually too nervous to shut off, so the old systems just piled up.

.@BillAckman tells @shaneparrish that AI will sharply cut what big banks spend on tech. Rewriting legacy COBOL (decades-old bank code) with @cognition now takes days instead of months. Ackman is right that the cost savings are real. The open question is who keeps them. Banks with …

— Patrick F. Feeley (@PFFeeley) September 30, 2026

Replacing all of that has gone badly more often than well. Commonwealth Bank of Australia spent five years and more than A$1 billion replacing its core, and people in the industry consider that one a success. TSB in the UK moved customers onto a new platform in April 2018 and the platform did not work. Customers were locked out, some could see other people's accounts, and service was not back to normal until December. TSB ended up paying £32.7 million in redress and £48.65 million in fines. Cognition's own figure is that roughly two-thirds of COBOL modernization projects fail. With odds like that most banks built layers around the old core and left it alone. JPMorgan expects to spend about $19.8 billion on technology in 2026, and its CFO told investors in February that the priority had moved to "modernizing the underlying application code and data." I would guess a large share of that budget still goes to keeping the layers standing.

Cognition is fairly careful about what its agents can do today. Devin is good at documentation, refactoring, and batch jobs, which are the parts of a migration where you can give the agent yesterday's inputs and outputs and let it keep trying until the new code matches the old results. Cognition estimates batch is 30 to 50 percent of a typical migration. The real-time systems (card authorizations, for example) are still out of reach. Banks also have a security reason to hurry. Anthropic's Mythos model, which can find and exploit software vulnerabilities, had bank regulators in the U.S. and Europe holding urgent calls this spring, and Reuters quoted security experts who named legacy bank systems as especially exposed.

Ackman's harder point came a little later in the conversation. "The problem with money generally is it's a commodity," he said. For loans I agree with him. A company that wants a five-year term loan will collect six or seven term sheets and take the cheapest one, and a bank whose costs just went down will give up some spread to win it. Deposits have never really worked like a commodity, and I think that is where his argument is missing a piece.

The best explanation I have read is from three NYU economists, Itamar Drechsler, Alexi Savov and Philipp Schnabl. Their paper argues that banks have real market power over deposits. When the Fed raises rates, banks raise what they pay depositors slowly and only partway. Keeping that power costs money for branches, bankers and technology, but almost all of the cost is fixed. So deposits end up behaving like long-term fixed-rate funding, which is how a bank can hold thirty-year mortgages without being wiped out every time rates go up. It is also why the industry's net interest margin has barely moved over several decades of rate cycles. The FDIC has it at 3.32 percent today.

Bankers measure this with the deposit beta (the share of a rate increase that gets passed along to depositors). Checking accounts have low betas. Online banks have high ones because, as the St. Louis Fed put it, their customers are looking for yield. During the 2022 hiking cycle the New York Fed found that super-regional banks passed through more than small banks did, while the very largest banks passed through less than either. After Silicon Valley Bank lost $42 billion in deposits in one day, money moved toward size, and the biggest banks did not have to pay more to get it.

Meta's Muse goes right at this. It launched September 8, the same day Cognition announced it had raised more than $2 billion at a $48 billion valuation with run-rate revenue near $900 million. Muse is a personal agent that reads accounts at more than 12,000 U.S. banks and financial apps through Plaid. On Tuesday, September 22, Schwab fell 6 percent, LPL fell 7 percent, JPMorgan and Wells Fargo each fell more than 3 percent, and XLF, the largest financials ETF, was down 2 percent. On Sunday Torsten Slok at Apollo put out a note titled "Is an Agentic bank run coming?" He pointed out that the average checking account pays about 0.1 percent while Revolut, SoFi, Wealthfront and others pay between 3.3 and 5 percent, and he warned that banks "could lose a large share of the cheap deposits they rely on to make loans."

Muse cannot move money yet. The Plaid connection is read-only, and Meta deserves to have that said. I still would not want to be running a bank's treasury desk this month. Most people leave savings at a tenth of a percent because switching is a hassle. Opening a new account takes an afternoon, and nobody wants to be the person who breaks their own direct deposit. If an agent already sees every balance and can fill out the forms, most of that afternoon goes away.

A hypothetical helps here. Bank A has $10 billion of deposits that are really savings, money the customers do not need next month and have not looked at in a while. Rates are at 4 percent, and agents push Bank A's beta on those balances up by ten points. That costs Bank A about 40 basis points on $10 billion, or $40 million a year. Say Cognition saves Bank A $15 million a year on code maintenance, which is my guess and not a published number. Bank A is behind by $25 million, and that is before counting any spread it gives up to keep borrowers. My numbers could easily be off in either direction, but for a bank funded mostly by savings I do not see the code savings covering the deposit cost.

Corporate treasurers dealt with this a long time ago. A company keeps enough in its operating account for payroll and suppliers and sweeps the rest into money market funds or Treasury bills, and banks price corporate deposits knowing somebody is watching. An agent gives an ordinary family something like a corporate treasurer. Next month's bill money will stay in checking. The surplus that has been sitting there since the pandemic probably will not stay at 0.1 percent, and I expect it to reprice slowly at first and much more visibly in the next rate cycle.

Some banks are safer than others. Deposits that run a business's payroll and payables, carry a line of credit, or belong to an owner whose banker actually picks up the phone will not move for half a point, and banks holding those should keep most of what Cognition saves them. Banks that fund themselves with rate-shopping savings and win loans on price are in a worse spot, since they will likely pass the savings on to borrowers and pay more to depositors at the same time.

This part relates most to my own work. Ackman was talking about big institutions that own their code. Most American banks rent theirs. The Kansas City Fed found that Fiserv, Jack Henry and FIS together served more than 70 percent of banks in its 2022 survey, and 61 percent of banks had used the same core provider for over ten years. When code gets cheaper for a community bank it gets cheaper for the vendor first. Whether any of it reaches the bank depends on a contract that may run for years and on how hard those three companies compete at renewal. Agents do not have to wait for any contract, and they will reach a community bank's depositors the same week they reach JPMorgan's. On September 22 the market sold banks with deep local relationships about as hard as it sold the ones without them, and in some cases I think that was a mistake.

If I were looking at a bank stock this month I would not spend much time on efficiency ratios, since nearly everyone's will improve. I would look at what the bank's deposits did from 2022 to 2024, which is the closest thing to a live test of stickiness the industry has had. I would want to know how much of the deposit base is operating money and how much is savings nobody has checked in years, and I would want the renewal date on the core processing contract. At Sargasso Capital Management we spend most of our time on small and mid caps where there is a wide gap between what AI can do and what the company has actually put to use. With banks that gap only matters if the customers are still there when it closes. Bill Ackman is right that the code is about to get a lot cheaper. I am just not convinced most banks get to keep much of it.

A note on sources. Bill Ackman's comments are from his September 2026 appearance on The Knowledge Project with Shane Parrish. Cognition figures come from its September 8 funding announcement as reported by Reuters, TechCrunch and SiliconANGLE, and from its April 2026 post on COBOL modernization. Muse details come from Meta's launch materials and coverage by TokenPost, CNBC and Zacks. The Torsten Slok note was reported by CoinDesk on September 28. COBOL's origins and New Jersey's April 2020 call for COBOL programmers are widely documented. Banking data comes from the FDIC Quarterly Banking Profile for the second quarter of 2026, the Federal Reserve Banks of New York, St. Louis and Kansas City, the Federal Reserve's review of Silicon Valley Bank, JPMorganChase's February 2026 Company Update, the FCA's TSB enforcement notice, Reuters reporting from April 2017 and April 2026, and Drechsler, Savov and Schnabl, "Banking on Deposits" (Journal of Finance, 2021). Bank A is a hypothetical example.

This post is for informational and research purposes only and does not constitute investment advice or an offer to buy or sell any security.

 

Tyler Durden Wed, 09/30/2026 - 16:20

Sex, Spies, And The FOMC: How Beijing Turned A Senior Fed Economist Into Its "Inside Man"

For years, conspiracy theorists have insisted that the Federal Reserve is run for the benefit of a foreign power. It turns out they were - at worst - only half wrong: it's just that the foreign power in question wasn't getting the FOMC minutes through the front door, but via a lovesick Fed economist, an online dating site, a set of silk scarves, and a gym-obsessed "Ph.D. student" who, according to US officials, was actually a Chinese intelligence officer.

Readers may recall the name John Harold Rogers, the former senior adviser in the Fed Board's Division of International Finance whose arrest we first reported back on Feb 1, 2025, and whose case we then revisited in May 2025 under the only headline the facts allowed: "Teaching Or Treason?" In February a DC jury gave its answer (sort of): guilty of lying to investigators, not guilty of conspiracy to commit economic espionage. And in July, as we reported on July 16, Judge Dabney Friedrich sentenced him to 38 months in federal prison.

That, it seemed, was that. But now a lengthy CNBC investigation, built on text messages, investigator audio recordings, trial exhibits and copies of the Fed documents in question, fills in the gaps. And the gaps, it turns out, were where all the good stuff was hiding.

"The facts of this case read like a spy novel. There was sex. There was money, manipulation, secret meetings with shady characters in China, fake identities, lies, trickery, and deceit. But this was real life." — Federal prosecutor Nicholas Hunter, in his address to the jury

Meet "Hummin Lee"

The story begins in 2013 at a conference in Shanghai, sponsored by, of all things, the Federal Reserve Bank of Dallas, on the campus of Fudan University. During a session break, a tall, broad-shouldered young man introduced himself to Rogers as Hummin Lee, a Ph.D. student. US authorities believe his real name is Jin Chuan, and that he is a Chinese spy.

A photo of Hummin Lee flexing his muscles that Lee sent to John Rogers in a text message on Aug. 4, 2018; Source: Department of Justice

What followed was textbook slow-burn cultivation. Lee sent birthday wishes and Christmas presents (including, in a detail no novelist would dare invent, a copy of Sun Tzu's The Art of War), invited Rogers to lecture in China, and kept tabs via a Facebook account featuring shirtless gym photos and, in total, six friends. After Trump won in 2016, the gift of a traditional Chinese painting arrived with a question attached: would Trump label China a currency manipulator? Rogers, to his credit, dodged.

Then came New Year's Eve 2016. Rogers, a divorced father of four grown children who later said he "kind of felt like a loser" that night, logged on to AsianDating.com and met Yu Liu, known as Yu Yu, a young woman in Shanghai 24 years his junior. Her messages were beautifully written in English. Only later did Rogers learn she didn't speak English at all.

Yu Liu and John Rogers are seen at a restaurant in a photo from a text message Rogers sent to Hummin Lee on Nov. 20, 2017; Source: Department of Justice 

Retired 35-year CIA veteran Ralph Goff, who had no role in the case, told CNBC what everyone reading this is thinking:

"If this woman wasn't a plant by Chinese intelligence into that web dating site, then I'm sure that they had a meeting with her soon after that contact."

CNBC notes it is unclear whether Yu Yu has any links to Beijing; she did not respond to questions. What is clear is that from that moment on, Rogers suddenly very much wanted to travel to China, and his generous friend Lee was only too happy to arrange it. "Your related expenses in China will all be covered by us," Lee wrote.

The full-service handler

Lee didn't just book flights. He planned itineraries and arranged lectures. When Yu Yu needed cash, Lee wired her 5,000 "of my own money. Don't worry." When her then-husband demanded 80,000 yuan to sign divorce papers, Lee told Rogers to "go to sleep and take a good rest man," and seven hours later texted a photo of a freshly issued divorce certificate. When Rogers married Yu Yu in Hong Kong in March 2018 (she became pregnant on his second trip to China), Lee organized the logistics and witnessed the prenup. When the baby arrived that summer, Lee met Rogers at the airport and went with the couple to the hospital.

Rogers described him to Fed investigators as a "super nice guy but so nice it was a little bit spooky." Which is a useful working definition of a case officer.

"I owe everything to him. The baby wouldn't have happened, the relationship with my wife wouldn't have happened... And I love him like a brother." — John Rogers, to investigators

Lee also introduced his "boss," a "Professor Cui," who pressed Rogers for Fed rumors and gossip and, per Rogers, offered him packets of cash (which Rogers said he declined). When the FBI searched Rogers' home years later, agents found $55,000 in cash, including some in a white plastic grocery bag at the bottom of a closet under a pile of women's clothing. Investigators could not establish where it came from.

The "questions"

With Rogers now thoroughly in his debt, Lee's curiosity about the Fed grew. The "classes" Rogers taught in China increasingly took place in hotel rooms with a handful of attendees. At one point Lee sent over a typed list of questions, among them:

• Why the dollar wasn't appreciating much despite repeated Fed hikes;
• How the Fed evaluated China's financial liberalization;
• And, our favorite: "How does the Fed evaluate the trade war with China proposed by Trump? Will the Fed adjust monetary policy to cooperate with the trade war? What specific measures will the Fed take?"

"I'm wondering if you could help us collect answers from your colleagues or documents and teach us when we meet," Lee added, helpfully. Rogers testified these were "bread-and-butter" textbook questions. Which, to be fair, they mostly are; it's the "from your colleagues or documents" part that is less textbook.

Rogers then emailed Fed colleagues asking for material, remarking with remarkable self-awareness: "Part of it, I think, is that they want me to reveal some kind of Fed secrets they believe exist." One document he received was marked "Nonconfidential/Internal FR." According to a federal agent's testimony, Rogers changed the heading to "Nonconfidential/External" and forwarded it to Lee. On another occasion he asked a colleague for Fed thinking on trade policy uncertainty, adding: "If there is something in writing that is not allowed to be shared, please send that just for me to catch up." He received a document on washing machine tariffs, forwarded it to his personal Gmail, and from there to Lee.

Then, in June 2019, Rogers printed two documents: one from a category generally covering the staff forecasts prepared for the FOMC and open market operations (per the indictment, "Class II" FOMC information), and a set of bullet points for a briefing to Fed governors ahead of an FOMC meeting. The next day he flew to China. Three days later, he photographed a "class" in a Beijing hotel room: Lee, another man and a woman, posing by a big video monitor. Prosecutors later said both men worked for Chinese security and intelligence services.

How valuable was any of this? That was the heart of the trial. The defense argued Rogers passed nothing of value and was "a naive academic." Prosecutors argued, in their sentencing memo, that the restricted information "could allow [Beijing] to make untold sums of money by trading with its roughly $1.5 trillion in U.S. Treasury securities and related instruments." The jury, notably, was not persuaded on the espionage count. Then again, as one might note, you don't need a Fed briefing book to front-run the Fed; you just need to read Jerome Powell's press conference... or a Nick Timiraos article (well, during the Powell years at least... it appears he isn't on Warsh's Christmas Card list, or Bessent's for that matter).

Undone by... Instagram

Ironically, it wasn't China's MSS that brought Rogers down, but garden-variety sextortion scammers. After his marriage imploded (the Vienna, Virginia police were called after a physical fight between Yu Yu and a masseuse Rogers had invited to live in the house; "I swear to God we're just friends," Rogers told officers), he went back online.

On Instagram he traded nude photos with accounts showing attractive women, photos taken with his Fed-issued phone, sometimes in the gym at Fed headquarters.

The people behind the accounts then demanded money, and threatened to send the photos to then-Fed Vice Chair Richard Clarida. They also threatened to kidnap his 18-month-old daughter. On Super Bowl Sunday 2020, Rogers told his superiors, who referred him to the Inspector General, where the Fed's cyber team was already uneasy about his China trips and his friendship with Lee.

In a 2.5-hour recorded interview, OIG agent Alan Hershkowitz asked if he had ever taken a nude photo of himself. "No," said Rogers. Pressed, he conceded: "I can't rule it out." Asked whether he had ever shared restricted Fed information outside the Board, he answered: "Never." Prosecutors proved he had sent such a document to a co-author at Fudan. That single word is what cost him three years.

Perhaps the most damning detail, though, is about the Fed itself: Rogers was quietly allowed to resign in 2021, the circumstances were never made public, and he promptly went to teach at, yes, Fudan University, where according to prosecutors he earned at least $900,000 in salary and grants between February 2022 and his arrest. It then took more than three years for the FBI to show up at the bus stop.

"All of the book smarts he had, all of the articles in his resume, they don't prepare you for spies." — Stephen Saltzburg, Rogers' attorney

Is the Fed a sieve?

If the Rogers case were an isolated incident, one could shrug it off as a lonely man getting played. But the Fed's own watchdog suggests otherwise:

• On the same day Rogers was sentenced, the Fed's OIG reported that the central bank lacked "a process to identify its critical assets" and needed a program to manage insider risk, warning that the Board's proprietary economic information "is of great interest to foreign adversaries."
• Then, in a report published last week, the OIG revealed that another Division of International Finance employee (same division as Rogers!) retiring in July 2024 potentially walked out with FOMC-classified information after generating 279 data-loss alerts in the final 90 days, 139 of them involving potentially sensitive FOMC material. The same employee had a history of copying FOMC files to unencrypted USB drives and emailing them to a personal address, and had traveled to a Fed-designated restricted country in June 2024. The Fed only found out a year later, and never opened a formal misconduct probe. The OIG blamed "a collective lack of action across multiple divisions."
• And in August, as we reported on Aug 26, the DOJ and FBI announced the takedown of platforms used by QTFY, a PRC state-sponsored hacking group whose targets included NASA, the DOJ, the Senate... and the Federal Reserve.

So: a Fed that can't catalog its own critical assets, can't stop a retiree from USB-sticking FOMC files out the door ahead of a trip to a restricted country, and is targeted by Chinese hackers from the outside and (allegedly) cultivated insiders from the inside. Asked by CNBC whether China is still trying to penetrate the Fed, Goff's answer was one word: "Absolutely." The Fed and its IG declined to comment.

We leave the last word to Rogers himself. Asked at trial who he believed Lee really was, he replied: "A spy." And how did that make him feel?

"Duped. He was my friend."

Which, come to think of it, is also how most savers feel about the Fed.

Tyler Durden Wed, 09/30/2026 - 16:15

Trump Responds To Watchdog Report: Force Powell Off The Fed Board - Or Sue Him

Update (1554ET): So much for "finality."

Minutes after the Fed's own inspector general cleared the Eccles renovation of criminality - and of administrative misconduct - President Trump made clear he is not treating the Horowitz report as the last word. Powell, Trump said on Truth Social, should be "forced to resign" from the Board of Governors. If he doesn't, "he should be sued by the US."

As for the building itself: Trump said Attorney General Todd Blanche will "make a determination" about the project - which is another way of saying the White House does not consider a clean bill of health from an IG Powell appointed, after a review Powell ordered, to be dispositive.

"I have asked Attorney General Todd Blanche to study the report, and make a determination as to what to do about a relatively small Building Complex," Trump wrote, adding "If he doesn’t resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence."

Pirro deferred to this report in April. Powell said he would stay on the Board until the investigation was "well and truly over, with transparency and finality." The IG just gave him the no-crime finding. Trump just told him that isn't enough to keep the seat.

Powell can still sit as a governor through January 2028. Forcing him off that Board - as opposed to waiting out a chair term that already ended in May - is a different fight: for-cause removal, a civil suit, or enough political heat that he walks. Blanche now has the file. Watch Truth Social, and watch whether "determination about the building" turns into a new referral or just another hard-hat presser.

* * *

After more than a year of drama, subpoenas, surprise site visits, hard-hat photo ops and one very public fight over beehives, the Fed's internal watchdog has finally weighed in on the central bank's headquarters renovation. The verdict: nobody committed a crime, but almost nobody was minding the budget either.

According to a report released Wednesday by the Fed's Office of Inspector General, there were no "reasonable grounds to believe that a violation of federal criminal law had occurred," and no administrative misconduct.

What the OIG did find was a long list of management failures that helped the cost of renovating the Eccles Building and the adjacent 1931 federal building balloon from a budgeted $1.3 billion in 2020 to $2.4 billion:

• The Board never acted on the OIG's earlier recommendation, made after the Martin Building renovation overran, to set a stated cost limit. It also never asked for a construction cost estimate.
• As recently as July, four years in and with contracts already awarded, the Fed still had not set a guaranteed maximum price.
• Some work drew few or no bids, which pushed costs up substantially.
• Internal governance "wasn't equipped" to run a project of this size and complexity.
• Design changes, site conditions and, of course, inflation. The OIG said "inflation was clearly a factor," which is a notable admission from an institution whose one job is controlling inflation.

As for the marble, water features and rooftop garden that critics fixated on, the OIG said they "did not materially drive" the cost surge (so Powell was vindicated on the beehives, if not on the budget).

The new Marriner Eccles sheriff, Fed Chair Kevin Warsh, said the Fed will adopt all of the recommendations, hand management of the project to the General Services Administration (reporting to the Board and to Warsh), and bring in an independent auditor to review every cost awarded to date. "There are important lessons to be learned," Warsh wrote to IG Michael Horowitz, whom Powell appointed in June 2025.

Frequent ZH readers will remember how this saga played out. In July 2025, with Trump publicly pressing for rate cuts, the renovation became the administration's preferred lever: Trump said he wouldn't fire Powell "unless there is fraud w/ renovation" (July 16, 2025). Days later, Powell was criminally referred to the DOJ for perjury (July 21, 2025) over his June 2025 testimony that there was "no VIP dining room, there's no new marble... there's no beehives and there's no roof terrace gardens." Trump then toured the site in a hard hat alongside Powell (July 24-25, 2025), producing the most awkward cost-overrun negotiation in central banking history. At the time, OMB's Russ Vought insisted the criticism was "not about firing Powell" but "about holding the Fed accountable."

Things escalated in January, when the Fed was served with grand jury subpoenas and Powell vowed to "stand firm" (Jan 12, 2026), accusing the administration of using the probe to punish the Fed for not cutting rates:

"This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions — or whether instead monetary policy will be directed by political pressure or intimidation."

Federal prosecutors followed up with a surprise visit to the renovation site, with US Attorney Jeanine Pirro saying any project with "cost overruns of almost 80 percent" deserved "serious review." Then in March, Judge Boasberg quashed the DOJ subpoena (March 13), calling it "pretextual." After Republican senators held up Warsh's confirmation over the probe, Pirro dropped the investigation (April 24), deferring to the very IG report that came out today.

So case closed? Not quite

Pirro said at the time that she would scrutinize the IG's findings, leaving open the option to reopen the case. And Powell, who broke with tradition by staying on the Board as a governor after his term as chair ended in May, said he would not leave "until this investigation is well and truly over, with transparency and finality."

Well, Powell can now leave as today's report gives him the "finality" part. Whether it gives him a reason to leave is another question. And whether a clean bill of health from an IG that Powell himself appointed and whose review Powell himself ordered will satisfy Pirro or the White House is... well, we'll find out soon enough: keep an eye on Trump's Truth Social account (especially if like Jane Street and the HFTers you are paying $100,000 to get them 20 millisecond before everyone else).

One thing is certain: a building project that nearly doubled in cost thanks to poor planning, no price cap and "inflation" is a perfect metaphor for the institution it will house.

Tyler Durden Wed, 09/30/2026 - 15:58

Police "Islamophobia" Training Equates Farage's Words With Hate Crime

Authored by Steve Watson via MODERNITY,

North Yorkshire officers sat through a publicly funded "Islamophobia" talk that treated Reform UK leader Nigel Farage's remarks on British values as if they belonged in the same conversation as a racially aggravated attack.

The trainer then asked the room which man had done "the most harm" - the politician on national television, or a man filmed abusing a Muslim bus driver.

The session was part of Project Unity, delivered by Abbas Najib, a former officer and now chief executive of Better Communities Bradford, at the York and North Yorkshire Hate Crime Conference in 2025.

Police officers were lectured about Nigel Farage in a publicly funded talk about Islamophobia, The Telegraph can reveal.

Officers at a hate crime conference attended training sessions that compared the Reform UK leader's opinions, specifically his doubts about young Muslims'... pic.twitter.com/u2HutKLxs4

- The Telegraph (@Telegraph) September 29, 2026

Police sources later insisted it was on the conference timetable rather than official force training, and that Najib was not a North Yorkshire employee. That distinction will not comfort anyone watching officers being invited to treat lawful political speech as a hate-crime accelerant.

Attendees were shown a 2024 interview in which Farage warned that "growing numbers of people do not subscribe to British values," naming Muslims and those turning out for the pro-Palestine marches in London. He cited a Henry Jackson Society survey finding that 46 per cent of British Muslims supported Hamas.

The room was then shown footage of a 2024 racial assault on a Muslim bus driver and told to "think about the relationship" between Farage's words and the offence. Officers were instructed to "draw your own conclusions" about the Reform leader and to "think about whether this commentary has any influence on something like this."

Najib put the comparison in the open. "Ask yourself, who is going to get into trouble between those two gentlemen? And who did the most harm?" He added: "Sitting in a national news studio and saying 'Jews hate Britain'. He'd be locked up before he left the studio, and too right too."

The same lecture also went after other Reform figures. Najib objected to "mainstream, high-profile politicians" such as Suella Braverman, Robert Jenrick and Michael Gove calling the pro-Palestine demonstrations "hate marches," and recast those protests as "protesting genocide."

Written material claimed women were not oppressed by the stipulations of Islam. The session defended mass immigration and argued that "Muslims, the immigrant, the brown person" were being scapegoated for a flatlining economy, when the real culprit was "the rich."

Footage of Matthew Goodwin on GB News was used as well. Goodwin had presented a YouGov survey finding that more than half of Britons believed Islam was not compatible with British values. The training material answered that poll with a claim that Islamic teachings sit neatly alongside David Cameron's official list of British values: democracy, the rule of law, individual liberty, respect and tolerance.

Goodwin later told GB News he was "shocked and appalled by the context of this talk," and "even more outraged by the fact that it was given to a politically neutral organisation such as the Police." He said the session showed that "there are some people in Britain who will not even allow us to have a debate about the role and compatibility of Islam in modern Britain."

Better Communities Bradford has received £490,000 from the National Lottery Communities Fund since 2019, including a £35,000 grant to roll out Project Unity. The programme covers "media and political narratives" and "myths and misconceptions about Islam." The Telegraph reported that the same material has been presented to students, council staff and civil servants working on Prevent, the state's counter-extremism programme.

Najib defended the work. "Project Unity exists to reduce anti-Muslim hostility and strengthen trust between communities," he said. "Statements made on national platforms reach millions, so the workshop looks closely at the words themselves and how they land." He told GB News that Farage's comments were "a sweeping claim about how British Muslims feel about this country" and that, in his view, "generalisations of that kind about an entire faith community are Islamophobic and fuel anti-Muslim hostility."

Jenrick's response cut through the charity language. "Yorkshire Police officers attended training sessions that compared the views Nigel Farage and I hold towards Islamists to a racially aggravated CRIME," he wrote. "They took issue with my description of the 'hate marches' and the fact research found 46% of British Muslims supported Hamas." He added: "The police have been infiltrated by bad-faith actors seeking to police speech, not actual crime."

Braverman tied it to the record she already put on the table. "This is the root cause of why the police refused to stop the hate marches, why antisemitism and extremism is out of control and why I was forced to blow the whistle on two-tier policing in 2023."

The timing is not accidental. Last week Policy Exchange reported that the National Association of Muslim Police had published papers defending Hamas, calling the IDF a "Zionist terrorist group," branding Zionism a form of anti-Muslim hatred, and treating the word "Islamist" as Islamophobic. NAMP denies defending a proscribed organisation. The paper still existed. The association still sits inside British policing.

The North Yorkshire session fits a pattern we have long documented. Hampshire officers told Braverman that mandatory DEI sessions had "drummed into us about our white privilege and unconscious bias," and that the outsourced trainer "was deeply hateful of white people and our culture."

Those officers stayed quiet because they feared for their careers. That same culture sat in the background of the Henry Nowak case, where an 18-year-old white teenager was handcuffed while bleeding out after his Sikh attacker accused him of racism.

Thames Valley Police has forced officers through "equity training" on white privilege, micro-aggressions and the shift from "non-racist" to "anti-racist," even after a tribunal found the force had positively discriminated against white officers.

Former assistant chief constable Kerrin Wilson recorded that white males "felt disadvantaged" and saw "unfairness was allowed for minority groups but not for majority populations."

Former officer and government adviser Rory Geoghegan put it plainly: officers "deserve far better from their leaders than to be crudely categorised by skin colour and subjected to reductive, divisive ideologies."

West Midlands Police has invited non-Muslim staff to fast during Ramadan as an act of "solidarity." Shadow justice secretary Nick Timothy called that "wholly inappropriate," arguing the police should observe "the same standards regardless of creed."

Major Andrew Fox of the Henry Jackson Society said the police exist "to enforce the law impartially, not to promote or facilitate religious practices."

Meanwhile, retired officer Stephen Gray was fined this year for sharing an online post critical of Islam. The Free Speech Union is backing his appeal and has warned that government Islamophobia definitions, already being used by forces, are functioning as a blasphemy code Parliament abolished in 2008.

A police service that lectures officers on the "harm" done by Farage while failing to hold the line against Islamist intimidation, antisemitic marches and two-tier street enforcement is not protecting the public. It is protecting a narrative.

Lottery money, Prevent briefings and conference slots have been handed to people who treat integration questions as suspect and political speech as a public-order problem. Impartial policing cannot survive that bargain.

 

Tyler Durden Wed, 09/30/2026 - 15:40

Top Shia Cleric Says US Should Compensate Iraqis As Last American Forces Leave

Via Middle East Eye

Influential Shia cleric Muqtada al-Sadr has said the US should compensate Iraqis for the damage inflicted on the country, as the last American troops pull out of Iraq.

In a statement on Wednesday, which is the deadline for American forces to end their 12-year presence (since the start of 'Inherent Resolve' against ISIS) in the country, Sadr hailed the "independence of Iraq" and praised those who fought against the US.

Iraqi Shia cleric Muqtada al-Sadr 

"We demand compensation from the American army for all the damages that occurred as a result of its occupation of Iraqi lands," he said. "Everyone should file legal complaints regarding this."

The US first occupied Iraq in 2003 following the overthrow of Saddam Hussein, before pulling out its forces in 2011.

They returned at the request of the Iraqi government in 2014 to tackle the spread of the Islamic State group, which had seized around a third of the country.

The US-led invasion in 2003 was widely regarded as illegal, and American forces in Iraq were accused of committing frequent war crimes and human rights abuses.

Different accounts of the death toll from the invasion have been reported, with most ranging from hundreds of thousands of violent deaths to more than a million excess deaths.

Sadr said in his statement that the US, as well as "neighboring countries", now needed to refrain from interfering in Iraqi affairs.

"This may lead to the severing of relations and reciprocal treatment, especially in political and ideological matters, and the dragging of Iraq into regional conflicts," he said. "We hope that the United States will reciprocate diplomatically and not act arrogantly towards Iraq, its government, and its people."

No foreign interference

During the original US-led occupation of Iraq, Sadr led the Mahdi Army (later revived as Saraya al-Salam or Peace Brigades), an armed group that fought against the coalition forces, Iraqi security forces and al-Qaeda in Iraq, among others.

Sadr and his supporters have long framed themselves as an Iraqi nationalist group, opposed to both US influence on the country and interference from its powerful neighbour Iran.

On Wednesday, Sadr said the remnants of the Mahdi Army would be retooled as the Supporters of Imam al-Mahdi Foundation, a reference to Muhammad al-Mahdi, whom Shia Muslims believe is in hiding and will return alongside Jesus to usher in the end times.

He also suggested that all current politicians in Iraq step down from their positions to usher in new blood - to "end corruption and work towards reform" - as well as reiterating a need for all weapons in Iraq to come under the control of the state.

The question of the integration of powerful armed groups in Iraq into the regular security forces has been linked to the US troop withdrawal.

Though the process was originally tied to the September 30 deadline, last week Prime Minister Ali al-Zaidi extended the deadline to June 2027.

A number of the most powerful Iran-backed groups - including Kataeb Hezbollah, Harakat al-Nujaba and Kataeb Sayyid al-Shuhada - have already indicated that they will not disarm, and the ongoing US-Israel war against Iran has made it unlikely the Islamic Republic will exert any pressure on them to do so.

"Disarmament needs a political agreement inside Iraq, a credible way of integrating fighters and command structures into the state, and some answer to the political, economic and ideological power these factions have built up over years," said Hayder al-Shakeri, a research fellow with the Middle East and North Africa programme at Chatham House, speaking to Middle East Eye.

Chief Pentagon spokesman Sean Parnell says the US and its coalition partners have formally ended “Operation Inherent Resolve” in Iraq with all forces and military equipment having left the airbase in Erbil.

The US has withdrawn its forces, but retains a more decisive form of leverage: controlling Iraq's access to its own oil revenue, which is held at the Federal ⁠Reserve Bank ​of New York. https://t.co/Ufd1Ya2QZo

— Aaron Maté (@aaronjmate) September 30, 2026

"For the groups closest to Iran, it will also be extremely difficult without Iranian agreement or a broader regional de-escalation. Otherwise, you risk simply moving the weapons into another institution while leaving the same networks and chains of command intact."

Tyler Durden Wed, 09/30/2026 - 15:20

Mother Arrested After Toddler Pulls Loaded Gun From Backpack At Michigan Daycare

A toddler pulled a loaded handgun from a backpack inside a Michigan daycare Monday, leaving a teacher to step in before anyone was hurt. The child's mother has been arrested, while the father, reportedly a Detroit police officer, is the subject of a separate departmental review. Local reporting describes an incident captured on surveillance video and a criminal investigation into the circumstances.

The Wayne County Prosecutor's Office told ABC News that an arraignment is expected Thursday, October 1. The Wednesday update, carried by AOL, did not specify the charges. On Tuesday, prosecutors had said a warrant request was still under review.

The incident occurred at Children's World Early Learning Center in Canton Township, west of Detroit. Cox Media Group reported Wednesday, citing Detroit's WXYZ, that the arrested mother is a nurse and that the child's father works for the Detroit Police Department. Police had not publicly supplied the toddler's exact age.

A Teacher Intervenes

According to a message from the center reviewed by Detroit's WDIV, staff became aware of the weapon when the child removed it from the backpack. A supervising teacher secured it, and the center contacted police.

"The supervising teacher remained calm and followed the appropriate safety response," the center told families.

The gun was a loaded Glock pistol, WXYZ subsequently reported. It remained in a holster that covered the trigger and trigger guard. Police credited both that protection and the teacher's immediate intervention with preventing anyone from being injured.

Canton Police Chief Joseph Bialy said the classroom footage was difficult to watch even knowing how the incident ended, according to WXYZ's initial report.

Amy Paggeot, a parent at the center, told the station: "My kid is usually bringing his stuffie." She described a center full of young children, many still taking naps.

The Arrested Parent Is Not The Officer

The parent taken into custody was not the police officer. Bialy made that distinction, and said he did not believe the handgun was a service weapon, according to NBC News' report carried by AOL.

WXYZ's follow-up reporting says police identified the mother as the gun's owner. The station reported that the father was not expected to face criminal charges, but that Canton investigators had contacted Detroit's internal-affairs division for a separate investigation running alongside the criminal case. Detroit police had not commented to the station. The outlet also reported that the mother could face a misdemeanor carrying up to 93 days in jail or a $500 fine. ABC's subsequent arraignment update did not identify the offense.

USA TODAY Network reporting described investigators as still working to establish how the toddler obtained the gun.

Backpack Checks Follow

The daycare has disenrolled the family and added bag checks, according to WDIV. Management said staff had followed the center's existing safety procedures and praised the teacher who intervened.

Michigan already has a firearm-storage requirement. The state Department of Education's guidance on MCL 28.429 says unattended firearms must be secured in a locked box or container, or unloaded and secured with a locking device, when a minor is reasonably likely to be present.

Remember when they taught marksmanship in school?

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Tyler Durden Wed, 09/30/2026 - 15:00