The post Jobs Revisions Show Small Loss, Manufacturing Among Big Losers appeared first on CEPR.

My back-to-work morning reads:

• Is the AI Capex Bubble About to Burst? What 250 Years of Market History Tell Us. The spending on artificial intelligence will end, but probably not when investors suspect it will.  (Barron’s)

• Rampell: Wall Street Loved Scott Bessent and Kevin Warsh. Not Anymore.: Catherine Rampell on how the bond market soured on the Treasury secretary and the Fed chair it once cheered. (New York Times).see also Rising bond yields add tens of billions to G7 countries’ debt costs World’s biggest developed economies face higher financing costs since start of US-Iran war, weighing on. (Financial Times)

• Ordinary Abundance: Edward Bellamy once imagined that music on demand would be “the limit of human felicity.” A modern apartment is full of things that once drew the same kind of awe. A meditation on the wealth hiding in plain sight — the ordinary comforts, capabilities, and freedoms that would have astonished every previous generation. (Ordinary Abundance)

• Six Conversations About Money You Should Have Before Getting Married: Heather and Douglas Boneparth with the words of wisdom they wish someone had shared with them many moons ago. Planning the life you’ll have together takes a lot more than looking at your bank accounts. Here’s how to get started (The Joint Account)

• How Big Tech Blinded Itself to the Grassroots AI Revolt: Caught in its own echo chamber, the industry’s playbook is failing — and the messier things get, the more out of touch tech leaders appear, even with Anthropic and OpenAI IPOs looming. (Wall Street Journal)

• Why Your Weather App Sucks: Forecasts are more accurate than ever. Why doesn’t it feel that way? Nitish Pahwa on why “30 percent chance of scattered thunderstorms” becomes a partly-cloudy icon — correct for 70 percent of your area, soaking wrong for the rest.  (Slate)

• Why America Is Switching From Booze to Weed. Derek Thompson on two extraordinary simultaneous trends — the share of Americans who drink is at a record low since Gallup began tracking in the 1930s, and 66% of under-35s now say moderate drinking is bad for your health, up from under 30% in 2004. (Plain English)

• Earth’s Oceans Just Broke a Heat Record. The Implications Will Be Massive: Anthony Edwards on Friday’s warmest globally averaged sea surface temperatures in recorded history, amid a surging El Niño and long-term warming. (San Francisco Chronicle) see also 2026: A Climate ‘You Are Here’: Thomas Neuburger closes his series on this year’s record Super El Niño with a look at what’s coming over the next ten years (God’s Spies by Thomas Neuburger)

• Trump tried to scrap NASA’s Roman Space Telescope last year. Now it’s launched: “People were giving up their weekends, and at the same time, there was this compartmentalized knowledge that it could all get cut.” Josh Dinner on the flagship observatory’s final hours before liftoff, freshly encapsulated in its payload fairing. (Space.com)

• Wilde at heart Is Olivia Wilde doing male narcissist autofiction? Olivia Wilde is a woman making choices in her professional and personal life; isn’t that feminism? (Dirt)

Video of the day: Japan’s Honda Is Taking Over the World’s Skies — And Nobody Knows

Be sure to check out our Masters in Business with David Booth, Founder, Chairman, and former CEO of Dimensional Funds Advisors. DFA just crossed $1 trillion dollars, and has become the largest active equity ETF manager. Booth’s new book is “Stay Calm: Learn to Embrace Uncertainty in Investing and Life.”

 

ICE Arrests Soar as People With No Criminal Record Are Increasingly Targeted

Source: New York Times

 

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

One Every Minute: These Numbers Are Unsustainable...

Authored by Steve Watson via Modernity News,

One migrant is now being granted settlement or citizenship in Britain every single minute, according to newly released Home Office figures.

In the three months to June 2026, 140,122 foreign nationals were given indefinite leave to remain or British citizenship - 1.07 people every 60 seconds. Across the full year, nearly 200,000 were handed indefinite leave to remain (ILR), a 16-year record and a 24 per cent jump on the year before. Another 245,520 were granted citizenship. Applications to become British hit an all-time high of 315,224.

This is the so called "Boriswave" arriving at the welfare office. The people waved in when salary and skills thresholds were slashed are now converting temporary visas into a permanent claim on housing, the NHS, benefits and, in time, the state pension.

'The numbers we see now are a huge increase on where they have been in the last few years.'

Research Director at the Centre for Migration Control reacts to Home Office data showing one migrant is being granted settlement or citizenship in Britain every minute. pic.twitter.com/k1PRUEofoH

— GB News (@GBNEWS) August 30, 2026

Robert Bates, research director at the Centre for Migration Control, put it without decoration: the numbers are unsustainable, and the damage will have to be undone.

ILR is not a courtesy stamp. It is the right to remain for life, to access the same welfare entitlements as a citizen, to apply for social housing, and, after a further year, to apply for a passport. Once that status is issued, reversing it is a political fight the Home Office has spent years refusing to have.

Bates told GB News the latest settlement totals are "a huge increase on where they have been in the last few years." In the year to June, he noted, Britain issued around 200,000 grants of settlement - a 243 per cent increase on 2017. Every one of those people, he said, can claim benefits, social housing and NHS care, "and they will all end up being pensioners drawing money from the state."

Full segment:

"Just one in five of those individuals are actually work main applicants," Bates said. "Over half are family members and dependants, and actually one in seven are refugees. So this idea that they're all going to be economic dynamite and aren't going to make use of Britain's welfare state is pie in the sky thinking."

Indian nationals led settlement grants, with Chinese grants quadrupling. The pipeline behind them is larger still. The Home Office's own earned-settlement consultation estimated that between 1.3 million and 2.2 million people will settle in the UK between 2026 and 2030, with a central forecast of 1.6 million and a peak year around 450,000 in 2028.

Health and care visa holders who arrived in the post-2021 surge become eligible in a cluster from 2027. That is not a trickle. It is a second population event, baked in before Shabana Mahmood's promised 10-year wait even takes effect.

Bates's warning was blunt. "If the Labour Government continues to drag its heels on its reforms to indefinite leave to remain, then we could be facing a catastrophe." Even "the Home Office's conservative estimates suggest a £10billion, or up to several hundred billion pounds." "This is something that simply a country's books cannot afford."

While the settlement machine stamps papers, the asylum machine prints invoices.

The asylum system cost the British taxpayer £4.3 billion in 2025/26. Official Home Office spending on asylum stood at £4.36 billion in that year. Centre for Migration Control toted up the last ten years at £25 billion spent accommodating, supporting and processing illegal arrivals and asylum claimants. Bates calculated that as £150 a year from every household, an eightfold rise on the bill a decade ago.

The asylum system cost the British taxpayer £4.3bn in 2025/26.

In the last decade a total of £25bn has been spent on accommodating, supporting and processing illegal migrants/ 'asylum seekers'.

This money should have been spent on British priorities. https://t.co/yXA9tSj3hf

— Centre for Migration Control (@migrationCtrl) August 28, 2026

Labour's answer is a press release about hotels. Hotel numbers have been cut. At the end of June there were 16,021 people in hotels, half the 32,041 of a year earlier and well below the 56,000 peak of 2023. Fewer than 160 hotels remain in use, against around 400 at the height of the Conservative mess. Thirteen more sites were handed back in August, with ministers advertising £51 million in savings from that batch and £224 million from this year's closures.

What they do not advertise is the relocation. 69,038 asylum seekers are now in houses, flats and bedsits - up 4 per cent in a year and double a decade ago. The North West, including Manchester, holds the largest share: 16,349 in dispersed private rentals, almost a quarter of the supported total. Bates wrote that some 73,000 people are now in non-hotel accommodation, up since the election. They are not going into detention. The detention estate has fewer than 2,500 beds. They are going into the street behind yours.

Andy Burnham's instruction to the country was that middle-class areas should "play their part" so the "poorest communities" do not take "the lion's share." In practice that means villages such as Piddington - population 350 - being lined up to host hundreds of unvetted arrivals. Hotels were a visible scandal. Houses in multiple occupation are a quieter one. The bill does not shrink because the sign on the door changes from "Holiday Inn" to "dispersal."

Mahmood's line is that control is being "restored." "A little over two years into office and the asylum backlog is down, the number of asylum seekers in hotels is falling, illegal working arrests are at record levels, and deportations and returns are up markedly," she said. "Small boats numbers are also now falling, but we are not complacent."

The small print tells a different story. 86,000 people claimed asylum in the year to June - down 21 per cent, but still far above the pre-2021 normal. 33,000 came on small boats. Detected illegal arrivals totalled 38,000. Returns of people with no right to be here rose to 41,000, including 6,000 foreign offenders. That sounds like movement until it is set against the stock. More than 210,000 people have crossed the Channel since 2018. Analysis of Home Office figures found 9,694 of those dinghy arrivals had been deported between 2018 and the first half of 2026. Fewer than 10,000 removed in eight years.

Bates's assessment of Labour's record on the only number that matters - removal - was savage. "Less than eight per cent of small boat migrants who have arrived under Labour have actually been removed, and this includes, of course, those who were sent to France before sneaking back into the country." He added, that "Since Labour took power, the Home Office has deported more Poles than it has individuals from the top five small boat nationalities combined."

The backlog at initial decision has been cut to around 40,000, the lowest since 2019. Appeals have exploded the other way. In March 2023 there were roughly 8,000 cases in the First-tier Immigration Tribunal. By March 2026 the figure was well over 87,000. Applications are being "waved through," Bates wrote, while the courts fill up with a second queue. Failed claimants stay. The boats keep coming because the people in northern France can see the same statistics. "Even if their asylum application is eventually rejected, the human rights framework of this country, along with the Refugee Convention, means they will never be removed."

Shadow home secretary Chris Philp accused ministers of shifting the problem, not ending it: "Labour are moving illegal immigrants out of hotels and into flats in your building, and now they are telling them to go and disappear without a trace." The Conservative offer is to leave the ECHR and "deport every illegal immigrant." Reform has gone further and talked about abolishing ILR as a category. Labour's offer is a longer wait, a £10,000 repayment levy for those who later earn, and another round of former barracks.

None of that touches the people already being stamped through at one a minute.

Settlement and the asylum bill are only half the ledger. The other half is what happens after arrival - and that is the file the government is in court to keep shut.

Ministers are spending public money to block the release of conviction data by nationality for England and Wales, the dataset the Centre for Migration Control requested under FOI and the Information Commissioner ordered out. Justice Secretary David Lammy sanctioned an appeal. Families of the dead and the raped asked him to drop it.

Alex Whyte, whose sister Rhiannon was stabbed 23 times with a screwdriver by Sudanese small-boat arrival Deng Chol Majek at the asylum hotel where she worked, told GB News she felt "sick, disgusted and completely let down." Anger, she said, "doesn't even cover what I feel, and it never will." Labour, she added, is "too afraid to admit" what open borders have done. "Open your eyes. You are so aware of what is happening, but you are too afraid to admit it."

The families' letter to the Justice Secretary stated "Imagine if someone you loved had been attacked, abused, or killed by a person who had entered Britain from abroad." Victims and the public "deserve transparency about the people who enter our country and the crimes they subsequently commit." Withholding the data "damages trust" and blocks "meaningful action."

Partial figures already out explain the panic. Foreign nationals accounted for 14.1 per cent of sexual offence convictions in 2025. They made up about 9 per cent of the population and 26.1 per cent of sexual-offence arrests - 3.5 times the British rate. On the railways, CMC's British Transport Police data showed foreigners were 79 per cent of theft arrests in 2025, 40 per cent of drug-offence arrests, 37 per cent of sexual-offence arrests and 36 per cent of violent-crime arrests. Across England and Wales, foreign nationals were arrested 172,889 times in the year to March 2025 - one every 183 seconds.

That is why the Ministry of Justice is in a tribunal instead of a press conference. They know a nationality breakdown, published in full, would not produce a seminar. It would produce a reckoning. They know it would trigger mass unrest. So they fight the Information Commissioner with the same Treasury that cannot find an extra nurse and can find £4.3 billion for a system Bates described as "perma-chaos."

Net migration has come off the 2023 peak of 944,000. The year to December 2025 was estimated at 171,000. Work visas are down. Study visas are down. Labour waves those charts as proof the fever has broken.

Settlement is the delayed charge on the same account. You can slow the inflow and still lock in the stock. You can close a hotel and open a house. You can cut the initial backlog and watch the appeals list triple. You can talk about "earned settlement" while stamping 140,000 grants in a single quarter.

Bates's line on the student route captures the wider fraud. Around three-quarters of a million visas are still being issued, with students the largest slice. "We are seeing an increasing trend now of the student visa route being increasingly used not just actually to come and study at a world-beating university, but as a back door into Britain and a long-term migration route."

He further noted that more than 60 per cent of people arriving on student visas were still here more than three years after their courses ended. "So there is huge, huge pressure that is being piled already on the British welfare state."

That pressure is not an accident of weather in the Channel. It is a policy choice repeated by two governments: admit first, process later, settle always, remove almost never, and treat the public's demand for numbers by nationality as a public-order risk rather than a democratic right.

Mahmood says fairness is being restored. Burnham says nicer postcodes must take their share. The Home Office says the hotels are emptying. The stopwatch says otherwise. One grant a minute. Two hundred thousand settlements in a year. A quarter of a million new citizens. A record citizenship queue.

A forecast of up to 2.2 million more settlers before the decade is out. Four billion and more on asylum this year, twenty-five billion across ten. Nine thousand-odd Channel arrivals removed from more than two hundred thousand who came.

These numbers are unsustainable. The people running the system know it. That is why the crime file stays in the vault, why the hotels become HMOs, and why settlement is being issued faster than the country can absorb, house, police or afford it.

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

Tyler Durden Mon, 08/31/2026 - 05:00

Google Retreats On 'Parasite SEO' Crackdown In Europe To Head Off EU Antitrust Fine

Alphabet's Google said on Friday that it has changed how it enforces its spam rules in Europe, following concerns from EU regulators that the policy could unfairly hurt news publishers and other websites that carry content from commercial partners.

The Google logo outside the company's offices in London on June 24, 2025. Carlos Jasso/Reuters

The dispute centers on Google's policy against "site reputation abuse," a practice often called "parasite SEO." It occurs when a third party publishes content on a well-established website primarily to benefit from that site's strong reputation in Google Search and gain higher rankings than the content might receive on its own.

Google introduced the policy to target arrangements in which outside companies use trusted websites mainly as vehicles for boosting their search visibility.

European regulators, however, raised concerns that Google's enforcement was too broad. They found that the policy was also reducing the search rankings of legitimate publishers simply because their websites contained material produced with, or supplied by, commercial partners.

Google said that from August 30, manual actions taken under the policy will no longer apply to users in the European Economic Area - the 27 EU states plus Iceland, Norway, and Liechtenstein. The policy remains unchanged everywhere else. The policy does not apply to ZeroHedge, as Google explicitly distinguishes editorial syndication from “site reputation abuse.” This is different from "parasite SEO" where an outside company places unrelated content on a trusted domain in order to exploit that site's Google ranking strength. And - since Google search algos still hate us with the white hot passion of 1,000 suns, the 'ranking strength' aspect would be moot anyway. 

Google has now adjusted its approach in Europe in an effort to address those concerns and avoid a potential antitrust penalty. DMA breaches carry fines of up to 10% of global turnover.

The two sides are describing the same climbdown differently. "We welcome the repeal of this policy, which unfairly penalised publishers and other business users of Google Search," Commission spokesman Thomas Regnier said, adding that "thanks to the DMA, Google Search will no longer demote press publications solely for hosting third-party content." Google, for its part, called it an adjustment to "our enforcement approach" - and warned that "an overbroad application of the DMA could prevent us from addressing real threats to the integrity of our search results."

Tyler Durden Mon, 08/31/2026 - 04:15

No Whites Allowed, Britain's MI5 Tells Applicants

Authored by Steve Watson via Modernity News,

Britain's domestic intelligence service is once again telling White university students they are not wanted.

For the 2027 Summer Intelligence Internship, MI5 has confined applications to people from a "black, Asian, mixed heritage or ethnic minority background" who also come from a "socially or economically disadvantaged background."

White British candidates - including those from the poorest homes - cannot even submit an application. The agency calls this a response to "underrepresentation." Critics call it what it is: racial exclusion.

The rule sits on the official careers page in plain English. Final and penultimate-year students may apply for the 2026/27 academic year only if they tick the approved ethnic boxes.

MI5's own wording is blunt: "We're confining the applications for this internship to those within this demographic due to a current underrepresentation in our workforce."

This is not a fringe outreach day. The placement is billed as a serious introduction to national security work. Interns are promised "unique insight" into operations and "meaningful contributions to real projects," not a seat on the sidelines.

The MI5 stint is expected to run from Monday 28 June to Friday 20 August 2027 across sites in Central and West London. Successful candidates are paid £4,849, with accommodation covered if they cannot reasonably commute. GCHQ is running a parallel scheme on similar racial terms.

MI5 accused of 'flagrant racism' as white candidates told not to bother applying for summer internshiphttps://t.co/wqPUXiNKrn

— GB News (@GBNEWS) August 27, 2026

Applicants must be British nationals, normally resident in the UK for seven of the last ten years, and able to survive the usual vetting. They still face a competitive sift. The racial gate comes first.

The listed groups include Asian or Asian British, Black or Black British, mixed-heritage combinations, "other ethnic minority," and a narrow "White other" category covering Romany Gypsy, Scottish Travellers or Irish Travellers. White British is not on the list.

The socio-economic test is equally specific. At age 14 the main household earner must have been in technical, craft, routine or semi-routine work, or unemployed and seeking work - or the applicant must have been eligible for free school meals. A White student who meets that poverty test is still barred. An ethnic-minority student who meets it is invited in.

What happened to getting a job on merit?

Shadow home secretary Chris Philp called it "flagrant racism from MI5 & GCHQ." He wrote: "White applicants for summer 2027 internships - including from disadvantaged backgrounds - can't apply. The scheme must be scrapped. Applications should be merit-based and colour blind. Working class white boys are among the most disadvantaged - yet are ignored."

Reform UK leader Nigel Farage put the charge in institutional terms. "Yet again, taxpayer funds are being used to fuel a culture of anti-white prejudice across the public sector. It's racism. It's wrong. Only Reform will bring meritocracy back to our institutions. We'll ensure that nobody is discriminated against based on the colour of their skin."

This is not a one-off. The Summer Intelligence Internship has been running across MI5, MI6 and GCHQ since 2023. Every cycle has produced the same argument and the same official shrug. The agencies say the programme exists to "increase diversity within our organisations." Ministers treat the Equality Act 2010 as cover.

In July, Conservative MP Ben Obese-Jecty asked the Cabinet Office why White candidates were ineligible. Dan Jarvis, minister of state for security, answered that the internships are "designed to provide insight" to people "from demographics and backgrounds under-represented within UKIC," and that "this is a lawful measure (as set out in the Equality Act 2010) used to encourage people from under-represented demographics to consider national security careers."

He added that anyone later applying for a proper job would face "fair and open competition, with selection based on merit."

That last line is doing a lot of work. The paid summer placement is itself the pipeline: mentors, projects, a foot in the door, a chance to apply afterwards with the agency already knowing your name. Excluding the country's majority from that pipeline is not a neutral "encouragement." It is a racial filter on the first rung.

The Equality and Human Rights Commission's own guidance on positive action is narrower than the agencies pretend. Employers may encourage under-represented groups to apply. The Commission says that if they do so, "the advert should clearly state the employer is seeking applications from everyone but wishes to encourage applications from people with a particular protected characteristic."

Confining applications - telling one racial group not to bother - is a different creature. "Positive action" was sold as outreach. This is a closed shop.

Claire Coutinho has been making that point for years. When the scheme returned in 2025 she said: "Deciding who can do a summer internship scheme based on the colour of their skin is bad enough. To bar patriotic white Britons who want to serve their country, but allow white Irish people, is utterly mad."

She added: "To make matters worse, the security services will also shut you out if you're a child of a nurse, a cabbie or your dad ran a corner shop, while the child of an £80,000-a-year train driver is eligible. This is state-sponsored discrimination. We should just choose the best people for the job."

In the Commons she asked the obvious question: "What message does it send to our young people when they are told there are some job opportunities they cannot apply to solely based on the colour of their skin?" Equality, she said, "must mean equality of opportunity, not putting some people in society on a pedestal above others."

Jacob Rees-Mogg charged that "MI5 is institutionally, publicly racist against white people." He noted that the policy "discriminates against 92.6% of my constituents in Somerset."

Toby Young of the Free Speech Union gave the thought experiment that every defender of these schemes refuses to answer. "Imagine if it was the other way around, and the intelligence services were saying only white people can apply for our summer internships. There would be absolute uproar."

There would. If the advert had said "no Blacks," the building would be surrounded by cameras before lunch. Because it says, in effect, no ordinary White British applicants, the official class calls it inclusion.

The security services are not improvising. They are copying a model that British policing has already normalised.

West Yorkshire Police, one of the country's largest forces, has run a two-track application system for police constable roles. Black, Asian and minority ethnic candidates have been able to apply year-round. White applicants from British, Irish and Eastern European backgrounds have been told to wait for specific recruitment windows.

An internal whistleblower told The Telegraph that minority applicants were treated as "gold" and White candidates as "bronze." The whistleblower said: "The process restricts progression opportunities for White British candidates, while individuals from other backgrounds are swiftly advanced through recruitment stages."

Ethnic minority candidates, the same source said, were regularly "shortlisted, sifted, assessed and invited to an interview before White candidates can even apply."

The force's own website made the hierarchy official: "We are currently accepting applications for the two police constable entry programmes (uniform and detective) from people from our under-represented groups... If you are not from one of these groups, please keep checking this page for future recruitment opportunities."

West Yorkshire dressed this up as Positive Action under the Equality Act. A spokesman said ethnic minority representation among officers was around 9 percent against a local minority population of 23 percent, and that early applications were merely "held on file" until a window opened for everyone.

The whistleblower's account was that the holding file was a fiction: the favoured group moved while everyone else waited outside.

At Thames Valley Police the ideology went further than the application form. Officers were put through mandatory "equity training" on "white privilege," "micro-aggressions" and the difference between being "non-racist versus anti-racist."

This followed an employment tribunal finding that the force had positively discriminated against White officers by appointing an Asian detective inspector without considering White candidates who had served 19 to 26 years.

Former assistant chief constable Kerrin Wilson, who led an independent review, recorded "strong feelings of frustration." "As white males they felt disadvantaged and ... they had the perception that unfairness was allowed for minority groups but not for majority populations," she wrote.

The review warned that the training "can often be seen as demonising white people and therefore building barriers to the learning." White officers' response was "very strong, at times bordering on aggressive." They felt "they have no support within the force." There was "a tangible feeling of being overlooked."

Minority staff were not grateful either. Some said they would not seek promotion because "even if they did succeed in securing promotions their efforts would not be accepted by some as genuine." Some described the force as a "hostile environment."

Former government adviser and ex-officer Rory Geoghegan said officers "deserve far better from their leaders than to be crudely categorised by skin colour and subjected to reductive, divisive ideologies." The review, he argued, failed to confront "the unthinking acceptance of critical race theory - a deeply political framework that has no place in an impartial police service."

That is the culture now being imported into the agencies that handle terrorism, hostile states and domestic subversion. First the police. Then the Bar. Now MI5.

The legal profession built the same wall and called it progress. A paid internship linked to the Bar Council and the 10,000 Interns Foundation offered London Living Wage work experience while restricting eligibility to specified ethnic minority backgrounds. White applicants were excluded outright.

Sophie Corcoran applied anyway. She is now suing. In her own account of the case she wrote that the central issue is simple: "should organisations operating in Britain be permitted to deny opportunities to people purely because they are white? I believe the answer must be no."

She draws the distinction the agencies keep blurring. Encouraging under-represented people to apply is one thing. "Outright excluding others from opportunities on racial grounds" is another.

She further noted, "The Equality Act was never intended to create a hierarchy of races where some groups are protected from discrimination while others are expected to tolerate it, but this is exactly what these schemes do."

The schemes also flatten every other kind of hardship into a racial cartoon. "A wealthy privately educated applicant from an affluent background can qualify for some race-based schemes, while a working-class white applicant from a struggling town cannot."

White working-class pupils have been the lowest-attaining major ethnic group at GCSE level for more than a decade. Corcoran herself grew up with epilepsy, hearing difficulties and dyslexia and attended a failing state school. None of that counted. "Just because someone is black does not automatically mean he or she is disadvantaged. Equally, just because someone is white does not mean he or she is not disadvantaged."

Rupert Lowe called the Bar scheme "vile, anti-white racism." Corcoran urged "everyone knows that if the races were reversed, such policies would never be considered acceptable. Equality cannot operate on a double standard."

The intelligence agencies' own socio-economic test makes the double standard sharper. They admit class exists. They even try to measure it by the parent's job when the applicant was 14, and by free school meals. Then they add a racial veto.

National Audit Office internships have run on a similar exclusionary logic, limiting places by sex, "black heritage" or lower socio-economic status and shutting middle-class White men out of a taxpayer-funded programme.

Transport for London has run placements reserved for BAME, disabled or disadvantaged candidates. The pattern is no longer a few over-eager HR departments. It is how the British public sector now allocates opportunity.

Intelligence work is not a diversity seminar. It is judgment, languages, technical skill, nerve and loyalty. The agencies' public line is that "a diverse organisation is vital to ensure diverse insights." That sentence has become a mantra. It is used to justify shutting the country's largest ethnic group out of the training ground.

A security service that filters the next generation by race is telling the public something larger than a recruitment statistic. It is saying the majority population is surplus to the pipeline. It is saying competence will be balanced against a demographic target. It is saying the Equality Act now functions as a permission slip for the one form of racial discrimination institutions are eager to practise.

The other way around remains the test. A Home Office page that read "no Blacks" would end careers by nightfall. A police force that labelled White applicants "gold" and everyone else "bronze" would be in special measures. A Bar scheme that barred African and Asian students would be treated as a national scandal. MI5's page does the reverse, year after year, with ministerial cover and a press office that talks about underrepresentation.

Merit is not a right-wing hobby. It is the only honest way to staff an intelligence service. Britain's problem is not that too many White working-class students are bursting through the gates of Thames House. It is that the people who run the gates have decided some citizens are the wrong colour to knock.

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Tyler Durden Mon, 08/31/2026 - 02:00

The Telephone, Political Entrepreneurship, And Theodore M. Vail

Authored by Joshua Mawhorter via Mises Institute,

Originally, this article was intended to be an exploration as to how-after a period of initial patent monopoly and an all-too-brief episode of freer market competition-cronyism reestablished a telephone monopoly that would last for decades. While such an article is worthwhile and hopefully forthcoming, I was struck by the influence of one man's leadership strategy as president of AT&T/the Bell System and how open he was about limiting competition in his industry, inviting regulation, and seeking a "middle ground" between a pure state-owned monopoly and true free market competition.

That man was Theodore M. Vail. This article largely presents Vail in his own words and seeks to demonstrate how transparent he was about inviting state intervention to move his industry toward monopoly.

By way of brief introduction, Vail joined the Bell enterprise in 1878 as general manager, helping build the young telephone industry. After leaving in 1887, he returned in 1907 as president of AT&T, where he pursued his vision of "One Policy, One System, Universal Service" and moved the Bell System toward consolidation and government regulation. He provides a quintessential illustration of political entrepreneurship and cronyism in the telephone industry.

Historian Burton Fulsom's The Myth of the Robber Barons: A New Look at the Rise of Big Business in America makes the critical distinction between "political entrepreneurs" and "market entrepreneurs" (p. 1):

Those who tried to succeed in [business] through federal aid, pools, vote buying, or stock speculation we will classify as political entrepreneurs. Those who tried to succeed in [business] primarily by creating and marketing a superior product at a low cost we will classify as market entrepreneurs. (emphasis added)

Along similar lines, Patrick Newman defines cronyism in the following way, "government intervention that benefits special interests at the expense of the public interest." This distinction is critical because it qualitatively differentiates those who succeed through the production-and-exchange mechanism and those who use the political means and cronyism to gain wealth at the expense of the public.

Theodore N. Vail: The Beginning of the End of Competition (1907-1913)

"Effective, aggressive competition, and regulation and control are inconsistent with each other, and cannot be had at the same time." - Theodore M. Vail, AT&T's 1910 Annual Report

On April 30, 1907, Vail rejoined AT&T as president, "marking the beginning of the end of telephone competition." According to Adam D. Thierer in "Unnatural Monopoly: Critical Moments In the Development of The Bell System Monopoly," "His return to the firm changed its fundamental focus from competition to consolidation."

Rather than market competition, Vail's most important goals as president of AT&T were "the elimination of competitors, the befriending of policymakers and regulators, and the expansion of telephone service to the general public." Vail pushed for "One Policy, One System, Universal Service." Of course, since this could not be achieved on a free market, or even on a hampered market that allowed a good degree of genuine competition, it had to be achieved by further state intervention.

As the above quote from Vail recognized, market competition and "regulation and control are inconsistent with each other, and cannot be had at the same time." Obviously, Vail favored the latter. He went on to state further, "Control or regulation. . .means everything which is the opposite of and inconsistent with effective competition." And, in 1917-after several successful efforts to limit competition through state intervention-Vail declared,

These two [competition and control/regulation] are absolutely inconsistent. If the public is getting the fullest advantage of control and regulation, no competition except destructive competition can exist. . . .

Under proper control and regulation, complete, соextensive competition could not exist.

What follows below are some selected quotes from Vail, in his own words and in context, that express his desire for government intervention and regulation into the telephone industry that would benefit AT&T. The interested reader should note Vail's transparency.

Regarding his goal of a universal telephone system and in the context of some competition, Vail wrote in AT&T's 1910 Annual Report,

It is not believed that this [a universal telephone system] can be accomplished by separately controlled or distinct systems nor that there can be competition in the accepted sense of competition.

It is believed that all this can be accomplished to the reasonable satisfaction of the public with its acquiescence, under such control and regulation as will afford the public much better service at less cost than any competition or government-owned monopoly could permanently afford and at the same time be self-sustaining.

Vail's belief, as stated above, was that there should be neither pure market competition nor full state ownership but the soothing and seductive "middle" solution-regulated capitalism or a "mixed market." Of course, this sounds reasonable to many people because they misunderstand or forget the nature of the state and also misunderstand the relationship between the state and big business. The key insight to understand is that state intervention-usually in the name of the "public good"-often purposely benefits big business at the expense of the consuming public.

Vail also openly expressed his desire for a monopoly under one system. He believed there would be two acceptable methods by which this could be accomplished:

This process of combination will continue until all telephone exchanges and lines will be merged either into one company owning and operating the whole system, or until a number of companies. . .[are] closely associated under the control of one central organization exercising all the functions of centralized general administration. But whatever may be the form of the operating organization, there is bound to be for legal purposes and the holding of franchises, some sort of subordinate state organization which will bring the business and property in each locality under the jurisdiction of the state in which it is situated and operated.

Vail opposed full nationalization, instead preferring cronyism. Over time, Vail's wishes were largely granted by the state as AT&T entrenched a monopoly through politics. In 1910, Vail directly argued that regulated companies should be protected from competition. He wrote,

If there is to be state control and regulation, there should also be state protection-protection to a corporation striving to serve the whole community (some part of whose service must necessarily be unprofitable), from aggressive competition which covers only that part which is profitable.

Governmental control should protect the investor as well as the public. It should ensure to the public good service and fair rates. It should also ensure fair returns to the investor.

A public utility giving good service at fair rates should not be subject to competition at unfair rates.

Keeping track, state control and regulation should provide protection from "aggressive competition," protect from the profit-and-loss test, assure "fair" returns to investors, and ensure that a firm offering its goods for "fair" rates should be protected from those who offer their services at "unfair" rates (i.e., lower prices). Of course, such high-minded rhetoric-"fair," "striving to serve the whole community"-are arbitrary and simply prejudge the conclusion in favor of whatever AT&T, industry insiders, and government regulators decide.

However, Vail reassures us that he is not an enemy of all competition,

It is not that all competition should be suppressed, but that all competition should be regulated and controlled. That competition should be suppressed which arises out of the promotion of unnecessary duplication, which gives no additional facilities or service, which is in no sense either extension or improvement, which without initiative or enterprise tries to take advantage of the initiative and enterprise of others by sharing the profitable without assuming any of the burden of the unprofitable parts or which has only the selfishly speculative object of forcing a consolidation or purchase. (emphasis added)

Thus, instead of allowing entrepreneurs and consumers to freely interact and decide the landscape of the market based on what goods they produce and value, the extent of alternative competitors, market prices, and profit and loss, competition only ought to be allowed within the range that the state and key firms decide.

As opposed to a pure free market and state ownership, Vail argued that regulated capitalism would have all the benefits of both without the disadvantages of either.

When thoroughly understood it will be found that "control" will give more of the benefits and public advantages, which are expected to be obtained by state ownership, than could be obtained through such [private[ ownership, and will obtain them without the public burden of either the public office-holder or public debt or operating deficit. It is conceded that as a rule private management is better, more economical and more efficient than public management, and much more advanced and enterprising.

When through a wise and judicious state control and regulation all the advantages without any of the disadvantages of state ownership are secured, state ownership is doomed.

Apparently, according to Vail, there was nothing to fear, "The proper use of corporate organization or combination under proper regulation or control cannot be objected to."

AT&T, Antitrust Danger, & the Kingsbury Commitment (1912-1913)

At first, to attempt to achieve his vision of a uniform system under AT&T, Vail began acquiring a number of independent competitors until such activity caught the attention of the federal government because of existing antitrust statutes. Michael K. Kellogg, John Thorne, and Peter W. Huber write in Federal Telecommunications Law (1999),

In 1912, fresh on the heels of its victory against Rockefeller, the U.S. Justice Department threatened to take on Vail. There followed a great deal of sound and fury, no doubt reflecting America's traditional populist mistrust of monopoly. In the end, however, government officials would conclude that monopoly in communications was much more tolerable than monopoly in oil.

To avoid antitrust lawsuits, Vail orchestrated the Kingsburg Commitment in 1913 (a year with which readers are doubtless familiar for several other reasons). According to industry historian Gerald W. Brock in his book The Telecommunications Industry: The Dynamics of Market Structure (1981),

Rather than risk legal action that could be adverse to the system, the Bell system entered into negotiation with the attorney general and in December 1913 reached an agreement known as the Kingsbury Commitment.

Correctly assessing the precarious situation of AT&T, Vail tried another-more successful-strategy. The strategy that was reached was essentially an agreement between AT&T and the federal government. AT&T agreed to abandon further acquisitions, sell its Western Union holdings ($30 million), and permit independent telephone companies to interconnect with its system, while the government allowed AT&T to retain its increasingly-dominant position. For Vail, this was a far more favorable alternative to having the government dismantle the Bell System. It constrained AT&T's expansion through acquisition but gave it something far more valuable-the government's acceptance of AT&T's dominant, regulated position in the telephone industry.

Richard Vietor writes in Contrived Competition: Regulation and Deregulation in America (1994, p. 172; also quoted in Thierer),

Vail chose at this time [i.e., around the time of the 1913 Kingsbury Commitment] to put AT&T squarely behind government regulation, as the quid pro quo for avoiding competition. This was the only politically acceptable way for AT&T to monopolize telephony. . . . It seemed a necessary trade-off for the attainment of universal service. (emphasis added)

This was precisely Vail's strategy. Robert W. Garnet-author of The Telephone Enterprise: The Evolution of the Bell's Horizontal Structure-writes (1985, p. 130; also quoted in Thierer),

Regulation played a crucial role in Vail's plans. Astute enough to realize that the kind of system he proposed-universal integrated monopoly-would stand little chance of gaining public approval without some form of public control, he embraced state regulation. In doing so, he broke with the company's long-standing opposition to what [AT&T] management had traditionally regarded as an unwarranted intrusion on its prerogatives. But after years of unfettered competition, during which the firm's financial strengths had been sapped and its efforts to build an integrated system had been dangerously undermined, regulation became a much-preferred alternative. (emphasis added)

Conclusion

All this provides ample evidence of the cronyism and political entrepreneurship within the telephone industry. While speaking of banking in particular, Rothbard provides a simple and profound general insight which every student of economic and political history ought to remember,

Fortunately for the cartelists, a solution to this vexing problem lay at hand. Monopoly could be put over in the name of opposition to monopoly! In that way, using the rhetoric beloved by Americans, the form of the political economy could be maintained, while the content could be totally reversed. (emphasis in original)

This history also serves to confirm the key insight of Gabriel Kolko's The Triumph of Conservatism, that-contrary to the popular historical narrative concerning the Progressive Era-certain key businesses often invited and helped shape regulations in order to achieve a cartel or a monopoly at the expense of the consuming public. Instead of the government and the consuming public teaming up against big business, the government and big business largely teamed against the consuming public. "Competition was unacceptable to many key business and financial interests," writes Kolko, therefore, the power of the federal government had to be sought to establish monopoly. But don't just take Kolko's word for it, take that of Theodore M. Vail in 1917,

We have repeatedly and constantly contended that competition, so far as the public utilities are concerned, is costly, unsatisfactory, undependable. That as an incentive to development or improvement [competition] has passed its period of usefulness, if indeed it ever had any.

We have also contended with equal constancy, that with combination of like utilities under proper control and regulation the service to the public would be better, more progressive, efficient and economical than competitive service given by the separate systems.

Tyler Durden Sun, 08/30/2026 - 22:10

Rise And Fall Of "Climate Crisis" Info War As Dems Urge Politicians To Avoid Global Warming Talk

The "climate crisis" headlines forced down the throats of the American people only began to emerge when socialist Rep. Alexandria Ocasio-Cortez and unhinged leftist Sen. Ed Markey introduced the Green New Deal in early 2019. That was the moment when global-warming headlines spiked and the NGO complex ramped up activist networks through protests and an informational war in the press, tricking the public into supporting climate bills intended to solve a made-up crisis.

Fake News

By March 2019, those climate-crisis headlines had intensified as Democrats desperately tried but failed to pass the Green New Deal.

More Fake News

Then, in 2022, those same headlines spiked again as Sen. Joe Manchin and Senate Majority Leader Chuck Schumer unexpectedly announced the Inflation Reduction Act, reviving much of the climate agenda.

It was all a lie. 

By August 2022, the IRA had passed and President Biden had signed it into law, flooding the Democratic Party's pet projects with $369 billion.

But those headlines subsequently peaked in late 2022. Democrats moved on after securing their massive funding package, and climate was no longer the party's main focus. This suggests that the earlier propaganda push was merely an informational war against taxpayers designed to hustle them.

Climate-crisis headlines remain out of fashion in 2026 as Democrats pivot toward socialism, thirdworldism, protect criminal illegal aliens, and quadruple down on all things woke.

Even AP's new reporting makes the case for the retreat clear: Climate ranks poorly among voters' priorities, suggesting that the public has increasingly rejected the party's climate-grift narrative as bullshit.

The retreat in climate propaganda has become so pronounced that researchers have coined the term "climate hushing." The Democratic-aligned Searchlight Institute has urged candidates this election season to stop emphasizing climate change because it ranks poorly among voters' priorities.

The shift in talking points is playing out in Massachusetts, where Markey, a leading sponsor of the Green New Deal, is placing less emphasis on climate policy as he faces a primary challenge from Rep. Seth Moulton.

All of this demonstrates that the entire climate-crisis propaganda campaign was about pushing legislation through Congress to fund NGOs and climate projects, not actually about the climate.

Tyler Durden Sun, 08/30/2026 - 21:35

US Forces Sink Vessel Providing At-Sea Refueling For Cartel: SOUTHCOM

Authored by Ryan Morgan via The Epoch Times,

U.S. forces, on Aug. 28, sank a vessel in the eastern Pacific that the U.S. Southern Command (SOUTHCOM) said was serving as an at-sea refueling point for drug-trafficking boats.

A vessel suspected of providing at-sea refueling for drug traffickers burns after being targeted by U.S. forces on Aug. 28, 2026. U.S. Southern Command

SOUTHCOM, which oversees military operations in and around Central and South America, said U.S. forces worked in coordination with the government of Ecuador to track down the vessel.

"Intelligence confirmed the vessel, previously identified and targeted under Department of the Treasury sanctions, was operating in support of the Los Choneros violent narco-terrorist organization," SOUTHCOM said in a press statement.

Los Choneros is one of more than a dozen Latin American transnational criminal enterprises that the U.S. government has designated as a foreign terrorist organization since the start of President Donald Trump's second term.

According to SOUTHCOM, U.S. Marines and sailors launched from the amphibious transport dock ship USS San Antonio to board and search the vessel, and did so without incident.

"Individuals removed from the vessel were safely escorted to Ecuador. Once cleared, U.S. forces sank the vessel," SOUTHCOM said.

SOUTHCOM has since published footage purporting to show U.S. forces boarding the suspect vessel, as well as footage of the boat being destroyed in a fiery blast.

"Today's operation is a stark example of the Americas Counter Cartel Coalition's power to dismantle the sophisticated, clandestine narco-terrorist tactics and capabilities that have enabled the trafficking of dangerous drugs destined for American communities," SOUTHCOM commander Gen. Francis L. Donovan said of the operation.

The Americas Counter Cartel Coalition, formed in March of this year, is a military partnership between the United States and other Western Hemisphere nations to disrupt cartel operations.

The U.S. military had been taking a more forceful approach to disrupt cartel operations even before recruiting regional partners through the Americas Counter Cartel Coalition.

On Sept. 2, 2025, U.S. forces bombed a boat in the Caribbean Sea, which officials said was transporting narcotics, killing 11. It was the first in an ongoing series of strikes on drug boats.

U.S. forces have struck dozens more vessels in the Caribbean and eastern Pacific in the past year. Most recently, SOUTHCOM claimed responsibility for a strike in the Caribbean on Aug. 25 that killed four people it identified as members of a drug-trafficking network.

The campaign of lethal strikes on boats has met with scrutiny and criticism.

Sen. Tim Kaine (D-Va.), in an Aug. 3 letter to the president, said: "A careful review of the available evidence suggests that the United States has killed individuals who are not involved in narcotrafficking."

A December report by Human Rights Watch described the campaign of boat strikes as a series of "extrajudicial killings."

The family members of two Trinidadian nationals who have been missing since October filed a wrongful death lawsuit against the United States in January. The plaintiffs claimed that the two missing men had been working as migrant laborers in neighboring Venezuela, and had arranged a boat ride home to Trinidad and Tobago, but were likely killed in an Oct. 14 strike by U.S. forces.

The U.S. government has not publicly identified any of the individuals they believe to have killed in these boat strikes.

Tyler Durden Sun, 08/30/2026 - 21:00

Central Asia Resists US Pressure To Choose Sides In AI Race

Authored by Eurasianet via OilPrice,

• Kazakhstan is continuing to expand AI cooperation with China even after joining the US-led Pax Silica initiative.
• Uzbekistan says it wants access to both cutting-edge American technology and lower-cost Chinese AI models rather than choosing between them.
• Their positions illustrate the difficulty Washington faces in persuading Central Asian governments to take sides in the intensifying US-China technology rivalry.

Kazakhstan and Uzbekistan are tossing figurative darts at a US trial balloon connected to the intensifying race between the United States and China for leadership in AI development.

Reuters reported on August 14 that the US State Department had drafted a note stating that any nation interested in widening access to advanced American know-how and technology in the AI sector under a program known as Pax Silica must refrain from participating in a rival Chinese initiative known as the World Artificial Intelligence Cooperation Organization (WAICO).

Kazakhstan is a member of both Pax Silica and WAICO, while Uzbekistan is a signatory to the Chinese initiative while expressing keen interest in expanding cooperation with the United States in AI development. More broadly, the United States has taken steps over the past 18 months to expand economic ties with all five Central Asian states.

Actions and statements by Kazakh and Uzbek officials since news of the draft State Department note began circulating indicate that both states are disinclined to adhere to what amounts to an American demand.

Kazakh officials have not publicly commented on the issue of the country's participation in both Pax Silica and WAICO, but recent developments suggest Astana is intent on maintaining close contacts with China in the AI sphere.

On August 18, experts from the countries' respective academies of sciences agreed to jointly develop a science-focused AI platform to analyze "scientific literature and large data sets, identifying patterns, formulating and testing hypotheses, modeling complex processes, planning experiments, and predicting results," according to a Kazakh government statement. The Kazakhstan and China are also working on an AI initiative called DeepBas, which aims to develop "specialized models" enabling the more efficient management of water resources.

Exchange programs are likewise proceeding. Kazakh engineers from the national space company recently participated in a training program in China on using AI to analyze satellite data to improve natural disaster early warning capabilities. In addition, at a recent symposium in Almaty, Chinese and Kazakh researchers discussed AI applications in medicine and agriculture, as well as joint research and training for young AI specialists.

Uzbekistan has perhaps been more direct in addressing the brewing AI issue. Speaking at a technology forum in Tashkent on August 24, Bobur Khodjaev, an aide to President Shavkat Mirziyoyev, issued what could be considered a veiled plea for the US to abandon an "us-or-them" stance on AI development. He also stated that Uzbek officials would continue to opt for the best available AI solutions, regardless of national origin. He acknowledged that American tech may be superior but also stressed that China offered more affordable options.

"As a developing country, we want to have access to all available technologies," Gazeta.uz quoted Khodjaev as saying. "Specifically referring to the US and China, obviously American tech companies offer cutting-edge AI chips and AI models. China, in turn, offers open-source models that are significantly cheaper than American ones. And we would like to have access to both."

"We are open to collaboration with all partners and interested parties and strive to implement artificial intelligence technologies not only in finance but in all areas of our economy," Khodjaev added.

Tyler Durden Sun, 08/30/2026 - 19:50

Federal Court Rules Sexual AI Images Of Children Are Legal To Possess

Perhaps sometimes it's best for judges to ignore technical loopholes and rigid legal precedent for the sake of doing the right thing?  Maybe, in extreme cases where absolute evil is involved, our system could dismiss the "rights of artists" and enforce restrictions based on the potential long term damage to society as a whole? 

Yes, the constitutional conundrums are plenty, but can't we also simply use common sense? Because if we can't, these kinds of artistic "expressions" are going to inspire independent vigilantism and it will be the fault of the courts when this inevitably happens. 

A federal appeals court says a Supreme Court precedent set in 2002 forces it to protect the in-home possession of AI-generated child sexual abuse material.  The court warned that rapidly advancing technology has complicated legal lines drawn nearly 25 years ago. 

The Seventh Circuit said it was bound by the Supreme Court decision that rejected restrictions on sexually explicit depictions of fictional children when no actual child was involved in their creation. But two judges warned that modern AI can now generate images virtually indistinguishable from material depicting the abuse of real children. 

In other words, artistic depictions of child abuse are legal to possess in private because no real children were harmed in their creation.  The use of AI exploits this loophole for the creation of hyper-realistic images very similar to real pornographic content.   

"Indeed, in Free Speech Coalition, the Supreme Court addressed the scope of First Amendment protections for virtual CSAM, but that was nearly twenty-five years ago, and the image-generation technology available today was likely unimaginable back then," Judge John Lee wrote. "Given the relentless advancement in artificial intelligence models, we have some concerns about the lines these cases draw, but we are not free to redraw them ourselves." 

If we give these judges the benefit of the doubt and accept their explanation that the Supreme Court ruling prevents them from taking action, we are still left with the moral question.  There are constitutional purists out there who might argue that "artwork" is protected speech under the 1st Amendment.  There are others (progressives) who will argue that a private individual owning such images hurts no one and they should be left alone to bask in their AI generated pedophilia.

This brings us to the deeper question:  Should known pedophiles be allowed to roam free within society because they haven't abused a child "yet"?  Or, should these people be locked up the moment they are identified for the sake of protecting communities from "potential" harm? 

It's generally not constitutionally legal to arrest someone for something they might do, but obviously, the legalized possession of AI child abuse images cannot be allowed to stand.  Even if the materials could be labeled "art" that does not harm real children, they act as a useful identifier for some of the worst monsters within any given community.  That is to say, these images should be used as an excuse to round up such people. 

It doesn't matter if they have not yet harmed a child; given the opportunity, they likely will.  The Supreme Court should change their precedent for this reason alone. 

The Seventh Circuit affirmed a lower court’s dismissal of one of four charges against Steven Anderegg, who investigators said had hundreds of AI-generated sexually explicit images depicting children on devices seized from his Wisconsin home. 

Anderegg was charged with producing and distributing the AI-generated material, transferring it to a minor under 16, and possessing it. A federal district court dismissed only the possession charge on First Amendment grounds, leaving the other three charges intact. 

For now, the distribution of these images is still illegal.  Generating the images, while still considered illegal, is difficult to prove, which is why the possession issue is so important.  Any AI images that use pictures of real children as a reference are also illegal.   AI is testing legal lines that many people thought impossible only a decade ago and limitations need to be addressed before extensive damage is done.  

Tyler Durden Sun, 08/30/2026 - 19:15

What Do "Capitalism" And "Socialism" Really Mean?

Authored by Vincent Cook via Mises Institute,

The old debate between socialism and capitalism is back. It wasn't that long ago when socialist economics had been repudiated even by former Soviet insiders, businesses like Wendy's and Miller ran clever television advertisements poking fun at the once-mighty but by then grossly dysfunctional Soviet Union, and the remaining leftist political parties in Western countries pivoted to focusing on promoting welfare statism while admitting that government controls over the means of production is a losing proposition. Back in the day, even people lacking the keen theoretical insights of a Ludwig von Mises could plainly see that actual attempts to realize socialism, however well-intentioned they were originally, only delivered totalitarian tyranny and mass impoverishment.

Since then, schools haven't been so keen on teaching younger generations that a system based on individual liberty constrained only by peacefully-acquired private ownership rights is what delivers the goods and what enables competent adults to function as morally- and intellectually-autonomous individuals. Neither do they teach that politically-generated handouts, subsidies, privileges, and immunities, nor governmental fiat money creation or unrealistic governmental promises of future economic security are at the root of many of the worsening problems afflicting the productive classes in our society today. Instead, young people have been indoctrinated with a belief that "capitalist" private profit-seeking and the cultural and religious traditions spontaneously propagated in an individualistic culture are to blame for all of society's ills and injustices. They are taught that only by instituting "socialism" to overthrow capitalism and forcibly re-engineer America's culture to "woke" specifications can such problems be solved.

Many contemporary defenders of socialism deny that they have anything like the Soviet Union in mind when they use the "socialist" label (though there is a Marxist Unity Group within the Democratic Socialists of America that is overtly pro-Bolshevik), while they are quick to pin the "capitalist" label on an admittedly dysfunctional status quo that strongly deviates from individualist libertarian principles in numerous respects. Such rhetoric is driven in no small measure by clashing definitions of what "socialism" and "capitalism" are supposed to mean, since of course neither side wants to take blame for either the failed Soviet example or for the failing status quo. So how are we to understand this definitional conflict, and how can we resolve it? In what sense is the extreme Soviet version of socialism relevant, if at all?

Back when the socialist movement got started, the original premise was that private ownership of the means of production was intrinsically evil because only the owners of the means of production (the wicked "capitalist" class), not society at large, allegedly benefited from the existence of private ownership. Private property was smeared as being profoundly unjust. Earning a positive return on investments was erroneously portrayed as being a parasitic extraction of value from producers, not as enhancing productivity in any way.

"Socialism" in this early context broadly referred to any system for organizing production that prevents such private earnings on investments, instead reallocating them to the benefit of "society" according to whatever distributive outcome was considered just. As long as most of the public remains blissfully ignorant about how both private thrift and profit-seeking/loss-avoidance and private investment of the resulting savings actually increases the physical quantity of outputs produced, it is possible to conceive of all sorts of crazy schemes to replace "capitalist" profits with some sort of "socialist" alternative. Socialism, in other words, was originally defined in a negative way as the antithesis of private ownership of production, which rendered it hopelessly vague.

Likewise, narrowly focusing on private ownership of the means of production without regards to other important requirements for a productive profit-and-loss driven economic system-like ownership being based on peaceful acquisition, ownership rights being defined in terms of the owner's exclusive control over the use and disposition of his body and the owned things, and everybody being at liberty to do anything that doesn't violate other people's ownership rights)-leads to an overly-broad definition of "capitalism" as well. It conflates the genuinely productive laissez-faire variant of private ownership with the genuinely exploitative interventionist variants where the state rewards specially-favored private interests with subsidies, with privileges that enhance earnings by restricting the liberty of others, and with immunities that enhance earnings with exemptions from liabilities for violations of ownership rights.

Such fuzzy ambiguities give socialists an escape clause when confronted with evidence of how badly real-world socialist experiments work-"But that wasn't real socialism!" It also permits a conflation of interventionism with laissez-faire that incoherently indicts private ownership with evidence of exploitative outcomes arising from what are actually serious deviations from libertarian/classical liberal principles. With such a foggy conceptualization of the nature of capitalism and socialism, the underlying issue of the absolute economic necessity of private thrift coupled to profit-and-loss-motivated entrepreneurial investing in the context of competitively-generated market prices for capital goods and for factor inputs is never confronted.

The way to dispel this fog is to realize that an eclectic mix of government controls and of private profit-seeking (as is frequently encountered in concrete historical situations) is neither fully capitalist nor fully socialist. Appeals to the evidence of concrete historical examples are never fully persuasive because one can always invoke alternative causal factors to rationalize why things worked out as well or as badly as they did in a particular situation instead of treating the historical example as a decisive test of a given system. As Mises explained in his methodological work Theory and History, causal explanations of historical events always have to be preceded by a correct understanding of economic theory; data from complex, uncontrolled social situations does not permit rigorous logical inductions of causal generalizations like the controlled laboratory experiments of the natural sciences do.

This implies that the real battleground for a debate over different economic systems are rival theoretical understandings of how purposeful human action works, not the data of how different historical examples performed. Mises brings theory to the forefront by reserving the label "capitalism" to a system based on laissez-faire principles of liberty constrained only by peacefully-acquired private ownership rights, the label "socialism" for coercively-centralized control over the means of production (whether formal ownership itself is centralized or not, which gives rise to two distinct varieties of socialism), and the label "interventionism" for systems with selective government interference with certain aspects of production while leaving all other aspects of production to be self-directed, incentivized by private profit-seeking and loss-avoidance.

The crucial point to note here is that Mises avoids the customary ambiguities by narrowing the meaning of each concept to a particular idealized type of economic system where the properties of each system have been specified sufficiently so that a theoretical analysis of the consequences of each system can be deduced rigorously. Also, it is helpful other conceptual possibilities as needed to provide an exhaustive catalog of possible systems. Unlike the vague terminology that originally informed the capitalist/socialist debate, Mises's definitions are fit for the task of debating the merits of different systems.

While having a more highly-specified, robust set of concepts at one's disposal doesn't necessarily conclusively settle debates over how to interpret a particular concrete historical instance, such concepts do enable deductions concerning what consequences would follow from various changes to the current system, all other things being equal. It also obliges champions of more limited interventions, entitlement benefits, etc. to drop the pretense that because their vision of "socialism" doesn't involve full Soviet-style central planning, their "socialism" somehow doesn't suffer from yet other problems that arise in connection with interventionism, welfarism, etc. All things being equal, the consequences of each isolated type of intervention can be qualitatively predicted using Misesian economic theory too.

What really ought to be the focus of debate today is America's deindustrialization and the associated decline of America's productive classes while the ruling class and its assorted minions and clients have been flourishing. Simply blaming all billionaires (and the newly-minted trillionaire) and traditional American culture for all of America's ills (as progressives like to do) or blaming foreigners and "woke" culture (as MAGA conservatives like to do) does not add up to a coherent logical explanation of how economic exploitation actually works in our society or why it suddenly started becoming a problem a little over half a century ago.

Only a logic of purposeful action, which is self-evidently and universally true for all human beings under all social circumstances, can help us clearly understand how America went wrong and what we must do to reindustrialize America while ending the systemic exploitation of the productive by the unproductive. It is Mises's definition of capitalism, not the interventionist status quo often confused with capitalism, that conceptualizes what is lacking in America today and how America needs to be reformed to make possible liberty and prosperity for all.

Tyler Durden Sun, 08/30/2026 - 18:40

Pentagon Grabs 35% Equity Stake In Venezuelan Oil As Trump Vows To "Fill Up" The SPR

Venezuelan President Delcy Rodriguez on Saturday evening unveiled further details of the grand US oil deal that was announced by President Trump on Friday, detailing that her country will receive about $19 per barrel of oil produced under the long-term energy deal.

Rodriguez, who was Maduro's #2 as VP before the former president's overthrow by invading US forces less than a year ago, hailed the "historic" agreement as an avenue for boosting crude output while bringing economic benefits. "The agreement is based on a very simple premise," she said. "Each party contributes what it does best. Venezuela contributes oil, its industry and the experience of its workers accumulated over more than 100 years. The United States contributes the capital and technology needed to recover and develop those assets."

Trump on Sunday: a "Gift from Venezuela to the People of the United States."

Rodríguez additionally said that in return, "Venezuela receives production, jobs, investment in infrastructure, increased revenue for the government and productive linkages for domestic industry." On top of this she assessed the deal would eventually grant Venezuela some $209 billion in taxes.

Her comments attempted to preempt discontent over the US deal from sectors of her own citizenry. Ironically, she's obviously playing the role of a pliant Washington figurehead, and there's local concern that the deal simply siphons off national resources and puts it into Uncle Sam's pocket, which is a long-running experience of a number of Latin American populations especially related to CIA action there in the context of the 20th century Cold War.

President Rodriguez stated that she wants to "make something absolutely clear"... she insisted that "Venezuela retains ownership and sovereignty over its resources, while utilizing capital, technology and operational capacity to leverage the recovery of a strategic industry that has been severely hit by sanctions."

In parallel to some of the details that Rodriguez filled in, The Wall Street Journal over the weekend has its own lengthy report on some of the deal's ins and outs. Below are a few highlights of that WSJ report...

*  *  *

The Pentagon will take a 35% passive stake in a private company holding Venezuelan oil rights:

Although it was negotiated by senior officials in both governments, the structure would make the U.S. an investor in a private company rather than a direct counterparty to the Venezuelan government. 

The U.S. plans to take a 35% passive stake in Betancourt’s North American Blue Energy Partners and would secure preferential rights to purchase 20% of its production at cost, according to people involved in negotiating the agreement. 

Venezuelan businessman Alejandro Betancourt is being offered development of some seventeen oil fields:

It would give Washington a direct financial stake in a private company that would be granted centurylong rights to some of the world’s largest proven oil reserves—and tie the U.S. more closely to the unelected government that is granting those rights.

The private company, led by controversial Venezuelan businessman Alejandro Betancourt, would have the opportunity to develop 17 oil fields said to contain 65 billion barrels of oil, or one-fifth of the country’s reserves. The Pentagon, in a striking expansion of its remit, would help finance the oil venture and reap the rewards of its future output.

Pentagon's strategic capital office was brought in late in the process to create a financing mechanism:

The Pentagon’s Office of Strategic Capital plans to structure the investment through penny warrants that would yield the U.S. an equity ownership in the business without a significant capital investment, the people said. The Pentagon office has limited statutory authority to strike deals designed to support U.S. national-security interests, typically through loans and guarantees. 

Betancourt has served as a broker in Venezuela’s energy deals and has close ties to Rodríguez. He faced criminal investigations of alleged money laundering in Spain and Switzerland, though no formal charges have emerged. His NABEP has become the second-largest private oil producer in Venezuela, after Chevron, over the past two years.

Future governments in Caracas could potentially challenge the agreement (though Washington is unlikely to ever cease asserting its direct influence):

For American oil companies pursuing potential investments in Venezuela, the idea of competing with a U.S.-backed private company with a stake in huge swaths of the country’s oil fields is daunting, people close to the companies said. U.S. officials said the state-backed company would be the second-largest corporate holder of proven reserves after Saudi Aramco.

The deal is also raising alarms within the industry about whether a new Venezuelan government could mount a successful legal challenge, and whether it might undercut new entrants’ confidence in making investments, the people said.

...The substance of the agreement appears to be in direct conflict with Venezuela’s 1999 constitution, which states that the country’s oil reserves belong to the Bolivarian Republic of Venezuela and can’t be sold. Critics say Venezuela’s current government, populated by unelected officials kept in power by the Trump administration, has no legal authority to sell the country’s oil rights.

Via AP: The Amuay oil refinery - Venezuela's largest petroleum processing facility.

There remain an additional array of problems facing translating the deal into additional supply at a moment America's Strategic Petroleum Reserve hits decades lows.

Though sitting atop the world's biggest proven oil reserves, Venezuela has long been known for its derelict and largely defunct infrastructure for getting crude out of the ground and refining. There's also the question of security, which has been a source of discussion between the US admin and American oil companies being courted. The oil majors must be convinced that they can operate in enough safety to be successful, not just for the coming months, but for years down the line. And yet, they will now be forced to essentially 'compete' with the US government, ironically enough.

There are also lingering transparency and accountability questions concerning the Venezuelan oil exports that Washington already took over since Maduro's ouster.

Tyler Durden Sun, 08/30/2026 - 18:05

Opportunity Lost? Gained? Squandered?

Submitted by Peter Tchir of Academy Securities

Another week with so many competing narratives driving markets. The information flow was coming so fast and furious that it is difficult to believe that Economic D-Day kicked off the week (it already seems longer than that).

Today, we will take a quick romp through how things seem to be playing out.

Opportunities Lost?

As anyone reading recent T-Reports knows, I was hopeful Warsh would take the stage on Friday and try to “shake things up.” Try to drive home some new (and in my view, much needed) paradigms. We got to discuss this ahead of Warsh’s speech on Friday morning on Bloomberg TV.

Warsh does deserve some credit for using the word “hike” three times at the start of his speech (but all in reference to the activity involving walking outdoors, rather than anything to do with rates). Not sure it was wise, as it likely set the algos off on the 2-year note, but I do applaud the effort to mislead the algos and speed readers.

In the end, bonds bear flattened. Stocks fell a little bit, but the bear flattening was the big takeaway from what I found was quite a boring speech, that really didn’t provide any new information.

The 30-year bond rallied initially and tried to hold on to those gains, but finished the day with higher yields. Part of that afternoon selling on longer-dated Treasuries could well be hedging (yield locks) for some IG new issues on Monday. As we wrote about in Yields Behaving Normally, both Bessent and Warsh need to pay far more attention to the massive supply of long-duration bonds (primarily from corporates in the “compute” space) and bonds in general (including increased global sovereign/quasi-sovereigns).

Had he gone down the path I would have liked to see, Friday might have even been messier than it was, but at least we’d have something interesting to discuss. Instead, I expect by the middle of next week, we will be back to lamenting the lack of specificity on the reaction function.

As the chair of the Fed, he has plenty of opportunities to speak, and people will listen, but the set-up for something more exciting than we got was almost perfect on Friday. An Opportunity Lost, in my view, but one that will be re-addressed as nothing is going to stop the data from coming in and the Fed from having to make decisions.

Opportunities Gained?

Every major news source is reporting increased oil flows out of the Middle East. Between alternative routes and increased passage through the Strait, pressure on the crude market is being relieved.

The blockade remains incredibly successful, preventing trade with Iran via the Strait. 

CENTCOM’s Commander, Admiral Brad Cooper, announced the Strait has been cleared of mines. Another very positive development on reducing the leverage Iran has.

The U.S. is also increasing staffing at embassies in the Gulf States, which is another step towards our view that neither the U.S. nor the Gulf Region has any interest in re-escalating “kinetic” warfare (the “cool” way to say shooting and blowing things up).

If we see renewed escalation, it seems likely to be initiated by Iran, and they don’t seem to have the will, or ability to do much at the moment (they have allegedly disabled some ships trying to transit, but no large-scale attacks on infrastructure in the region – which is the main fear). 

While we haven’t seen diesel or gasoline drop materially, the more oil that can make its way to refineries, the better.

Bessent’s announcement of Economic Outcast on Monday was a bit disappointing. Well, disappointing from launching concrete, obvious effects, that would really pressure the regime to give up (really needs to be tough on China to do that). But that also soothed markets which have less to worry about if we aren’t ramping up the rhetoric with China. A bit of a catch-22.

Basically, Bessent saying that we’ve put everyone on warning/high alert (and they have some time to change their behavior before we come down with the hammer) seems logical. It will take longer that way, but if the threat of the “hammer” works, then it will have accomplished the mission.

On the other hand, what happened to “Sanctioning a Major Financial Institution” on Friday? Maybe it is taking longer to get the legal side of things right, before implementing the sanctions? Maybe the “guilty party” has come to the table to negotiate a deal favorable to the U.S.? Those would be good outcomes and are plausible. But why make such a “direct statement” and not live up to it? On that topic, why didn’t this press conference happen the prior week, which seemed to be the initial target for launching the Economic Armageddon?

As a whole, the direction of travel on the issue of oil and energy products in the Middle East is heading in the right direction (less clear on nuclear deals and change of regime behavior).

Stories are hitting the tape this weekend about a major deal between the U.S. and Venezuela. We continue to see success in working with Venezuela since Maduro has been captured. Having said that, it is difficult to tell from the details provided so far, what the real impact is with this potential “deal.” If it is as good as the Truth Social posts say it is, that could be very good (primarily in the medium to longer term). But as we discussed last week, in the section Done Means Done, we have seen social media pronouncements, or soundbites (even soundbites from the Oval Office), that don’t always materialize the way they were initially touted.

Would be a great win, and I do think Venezuela can be a hub for processing, refining, and smelting materials that the U.S. needs.

Opportunities Squandered?

Since the trade negotiations fell apart (wow, that was only last Friday, that seems even longer ago), there has been a lot of discussion about who caused the deal to break down. Some argue that Carney views it as politically in his interests to not do a deal, even if he could have had a “good” deal. Others discuss last-minute demands on the U.S. side, which seems to fit in with the “art of the deal.” Where this all winds up, who knows.

We are going to lump this into the Opportunities Squandered section, though maybe not in the way you think this is going.

Let’s start with Canada. Let’s start a decade or so ago.

On Friday on Bloomberg TV (during the second segment), I say something that will probably get me in trouble, but once in a while you need to take that risk to get a soundbite across.

I argue that Canada cannot have BOTH a Green Economy and a Real Economy right now. I am not saying that over time you cannot achieve both a robust economy and one that is sustainable for your own nation and the world. I am saying that even if the ultimate end goal skews heavily towards sustainable and green, the priorities in the near term may have to be adjusted. You might never get to the “green” economy if you don’t survive long enough. We argued that the “energy companies of the future are the energy companies of today” during peak “Hopium.” By Hopium, I meant that the vision drove everything and ignored certain realities, that were really needed to turn that vision into reality. I’m not sure I’ve dug myself out of any hole I’ve dug myself into with this attempt at explaining my view, so I’ll just move on.

LNG exports. The U.S. has built a robust business around LNG. Not only is it bringing in revenue for America, and creating jobs, in America and abroad, but you could argue it is helping importers diversify away from LNG imports from less trustworthy, or reliable counterparties.

While there are a myriad of reasons why the U.S. can do better than Canada, and has done better, there is truth to the concept that Canada regulated themselves out of business. Or, more precisely, in this case, regulated themselves out of creating a new business.

This to me, is just another example of why ProSec needs to go global (and is going global).

• If you have the resources, why not extract them?
• Once you’ve extracted the resources, why not refine them?

As we’ve seen with the Strait, the bottlenecks occur primarily around the refined versions of oil. Yes, oil in itself is troublesome, but it is the refined products that are even more important.

Whether Canada listens to this wake-up call (and there are signs that they have been doing it — heck, we even have a tiny blip in the export line from Canada) is yet to be determined. As we’ve highlighted recently, Australia is planning on their first refinery in 60 years!

ProSec is going global. It is in every nation’s interest to ensure that their supply chains for things that are imperative to their existence are as stable, safe, reliable, and resilient as possible.

Having said that, we will discuss two other subjects in this section, even though I’m not sure they are squandered.

• Trade with Canada.
  • At least some of what the U.S. needs for reshoring and, possibly more importantly, the compute build, does or could come from Canada. Aluminum. Data centers need it. Canada has it. There is very little evidence of domestic production that can come on-line quickly, hence, the cost of compute build will go higher. If I’m Canada, I’m trying to harness all the things at my disposal that go into compute and will try to maximize that revenue source (whether in the U.S. or elsewhere). Not sure Canada will do that, but I’m not sure why the U.S. is doing anything making it more difficult or expensive for the compute build, when they are facing enough cost, energy, and NIMBY hurdles.
  • Farming. Potash. The U.S. imports it at scale. It is an important cost to farmers. Canada has it. The U.S. may have it, but it isn’t readily available. I’ve lost track of what the U.S. is doing on some ag things. Importing ground beef from somewhere (presumably Argentina). Changing how the processing is done. Food costs are a key issue for many voters, so not sure what the nation gets more benefit from – tariffs or coordinated effort?
• The China Summit.
  • While it is simplistic, my “working view” is that:
    • China is aiming to catch up on compute, faster than the U.S. can catch up on processing, refining, and smelting.
      • We are purposely avoiding the term – rare earths and critical minerals, because that tends to make people think about the rare earths and critical minerals themselves, rather than what is more important, which is processing, refining, and smelting. Not just rare earths and critical minerals, but even some basic commodities and metals.
  • If we think back to the “cards” on the table when the trade teams were negotiating in Geneva, to now, who has improved their hand?
    • I am not sure. Our compute is growing, but China seems to keep popping up as well. The admin is doing some great work on the processing, refining, and smelting side, but we started so far behind China that we need to continue to operate at lightning speed!

It will be interesting to see if I’m correct and ProSec truly moves global, or if countries will remain content to let others do the heavy lifting, even if it risks their economic future.

Bottom Line

I continue to like owning “compute” bonds on a yield basis (no rate hedge).

The Treasury bear steepener likely has more room to run, but we did have downward revisions to the prior year’s worth of jobs data. Not as draconian as last year, but another hint that the job market might be something the Fed needs to keep an eye on (especially as I don’t see how hiking helps war-related inflation or compute-build inflation). Will want to be adding to the front end. I remain indifferent on the long end, but suspect the global supply of debt will outweigh what Bessent has announced so far, and ultimately, the Fed will need to implement some form of Operation Twist to really shift the pricing of the long end.

If oil keeps coming down, it will help rates and equities. I remain concerned how much (in either direction) equities are being driven by the semis where the number of leveraged ETFs astounds me (creating mechanical buying and selling, amplifying every move).

I do think even with oil prices coming down, energy companies, globally, should remain a key overweight in portfolios (XLE is up 42% YTD) and global demands to harness and deliver energy are only increasing!

I don’t think I “squandered” the summer, but have to admit it went by a lot faster with a lot more work and angst than I would have hoped for! Enjoy this last week of summer and hope you have great plans for Labor Day weekend! (which is a holiday both in Canada and the U.S. though it is spelt differently).

Tyler Durden Sun, 08/30/2026 - 17:30

State Department Revokes Visa Of Iraqi National On FBI Terror Watchlist

Authored by Kimberly Hayek via The Epoch Times,

The State Department has revoked the visa of an Iraqi national who was placed on the FBI's Terror Watchlist, ending her ability to enter the United States years after she received a high-profile award from the Biden administration.

The U.S. Department of State in Washington on March 28, 2025.Madalina Vasiliu/The Epoch Times

Taif Sami Mohammed Al Shakarchi is no longer present in the United States, according to a statement released Friday by Assistant Secretary Dylan Johnson.

The revocation followed her placement on the Federal Bureau of Investigation's Terror Watchlist. No further details on the underlying intelligence were provided in the department's announcement.

"Under President Trump and Secretary of State Marco Rubio, suspected terrorists will never be allowed to remain in the United States," the statement read.

Al Shakarchi was given the International Woman of Courage Award in 2022 by then-Secretary of State Antony Blinken and then-First Lady Jill Biden. The department said she had been recognized for her purported role in fighting corruption and her advocacy for "gender equity."

The award recognized "women from around the globe who have demonstrated exceptional courage, strength, and leadership in advocating for peace, justice, human rights, gender equity and equality, and the empowerment of women and girls, in all their diversity."

Al Shakarchi, also referred to in State Department materials as Taif Sami Mohammed, had served as Iraq's deputy finance minister. She was described at the time of the 2022 award as a longtime official in the Ministry of Finance who started out as a budget analyst in 1985 and rose to director general of the Budget Department. Officials then called her a front-line leader against corrupt practices and noted she was known as the "Iron Woman." She was listed as a political independent.

The 2022 ceremony, held virtually, was hosted by Blinken with Jill Biden delivering remarks. Twelve women from various countries received the honor that year.

The Trump administration has made clear it prioritizes removing individuals it views as security risks. In recent months, the State Department has revoked hundreds of visas in targeted efforts, including nearly 900 people targeted by a birth tourism task force launched in early August. Broader continuous-vetting operations have led to more than 175,000 visa revocations for a range of violations, crimes, and national security concerns.

The International Women of Courage Award itself continues under the Trump administration. First lady Melania Trump and Rubio presented the 2025 honors in April, recognizing women from countries including Burkina Faso, Israel, Papua New Guinea, the Philippines, Romania, South Sudan, Sri Lanka, and Yemen. The department has noted that more than 200 women from over 90 countries have received the award since it began in 2007.

Al Shakarchi's case stands apart due to the later watchlist designation. The State Department says its visa action is a straightforward application of its policy against allowing suspected terrorists to stay.

The department's release did not specify where she is now or provide additional biographical updates beyond the watchlist status and her departure from the United States.

Visa decisions rest with the executive branch, with courts offering limited recourse to many such revocations, a principle reinforced in prior Supreme Court rulings on related immigration matters.

The move arrives amid wider efforts by the administration to tighten scrutiny of foreign nationals already inside the country or seeking entry. Officials tie those steps to national security priorities under the Trump administration.

Tyler Durden Sun, 08/30/2026 - 16:55

The Mother Of All Mean Reversions: Commodities Have Never Been This Cheap Versus Stocks

Across Wall Street, from Barclays and UBS to HSBC, JPMorgan and Goldman Sachs, a common view is taking shape: physical scarcity is emerging across multiple commodity classes, driving prices sharply higher and signaling a broader hard-asset squeeze.

Last week, UBS strategist Sagar Khandelwal issued a similar call heard across Wall Street, telling clients to “position for a commodity upcycle.”

On Saturday, Christopher LaFemina, who heads Jefferies’ global metals and mining research and is one of Wall Street’s veteran commodity experts, told clients that commodities remain historically cheap relative to US stocks.

LaFemina compared the S&P GSCI with the S&P 500, showing the ratio hovering near its lowest level in more than five decades. Similar troughs emerged during the Nifty Fifty and dot-com bubbles before commodities sharply outperformed stocks.

Previous upcycles in the ratio coincided with the 1970s oil embargo and inflation shock, the Gulf War, and the 2008 oil-price surge. Today’s depressed reading comes as retail and institutional investors remain bullish up to their eyeballs on hyperscalers and memory stocks while remaining highly concentrated in a handful of other AI names. And really, what could go wrong if the AI boom begins to deflate?

The trough in the ratio comes as traders ignore commodity markets, where the theme of scarce physical resources is rearing its ugly head:

• Got Hard Assets? UBS Says "Position For A Commodity Upcycle" As Global Scarcity Emerges
• Barclays Warns Next Commodity Shock Is Taking Shape: What You Need To Know
• "Buffers Running Down Quickly": HSBC Warns Next Global Food Shock Brewing
• The AI Boom Runs On Tungsten, But Global Supplies Are "Running On Empty"

Agricultural prices are soaring; copper is trading above $14,000 per ton in London; tungsten is above $3,000 per ton; uranium is back above $90 per pound; and many other critical materials (seen as the building blocks for the AI boom) are surging as demand accelerates. Electrification, AI buildout demand, rising power consumption, geopolitical fragmentation, including China’s weaponization of export supplies (tungsten and germanium), and years of underinvestment are colliding to create a perfect storm of constrained supplies across energy, metals, and other raw materials.

Agricultural commodities have just broken decisively above nearly 20 years of resistance.

And this is happening while:

▪️Diesel prices approach all-time highs
▪️Mortgage rates hover near 7%, with housing already deeply unaffordable
▪️Wealth inequality stands near historic… pic.twitter.com/rgJfZgUPBC

— Otavio (Tavi) Costa (@TaviCosta) August 29, 2026

"The 10-year rolling change in the US dollar remains one of the most important macro developments in the world today," Azuria Capital's Otavio Costa wrote on X. 

The 10-year rolling change in the US dollar remains one of the most important macro developments in the world today.

We are likely witnessing the beginning of a secular decline in the dollar — a necessary adjustment to the significant trade deficit the US economy faces today.… pic.twitter.com/uWqXcX3QUr

— Otavio (Tavi) Costa (@TaviCosta) August 30, 2026

It's time to focus on "scarcity in the physical world," according to veteran commodities strategist Jeff Currie, who also warned, "The illusion of abundance is likely behind us."

Tyler Durden Sun, 08/30/2026 - 16:20

Pentagon Strikes Iranian Island Target, In First US Military Action In Weeks

Update(1615ET): Things have been quiet for many days and weeks on the military front when it comes to the Iran war, but on Sunday there are some emerging reports of new but limited US strikes. According to the latest late Sunday from Axios:

Senior American official: Earlier today, American forces attacked two Iranian launchers on Larzac Island. Revolutionary Guard forces were observed preparing to launch rockets carrying sea mines toward the Strait of Hormuz.

So despite the White House signaling a move away from military action and toward the economic warfare front, it's also clear that more sporadic tit-for-tat blows could follow. But Trump has lately made clear that military options are still on the table, and strikes will be utilized as needed.

CENTCOM says that they attacked two Iranian missile launchers on Larak island. This is the first time that they have struck an Iranian target in weeks.

— barry with the NED (@bonzerbarry) August 30, 2026

*  *  *

Propaganda has always been a problem when it comes to the fog of war.  The internet and social media add a new dimension to the confusion as conflicting information is allowed to spread like wildfire using civilians and media outlets as tools for propagation.

The lack of confirmation is exploited, often by both sides, and the truth becomes lost in the mire.  That said, the facts on the ground will eventually see the light regardless of spin.  In the case of the war in Iran, the facts on the ground do not bode well for the Islamic Regime. 

Iranian leaders now openly admit that the US blockade has crippled around 35% of the nation's exports and imports while domestic prices continue to skyrocket by 60% or more.  This, however, is not the most immediate problem for the regime.  

It would appear that initial reports of gasoline shortages across Iran did not convey the true scope of the crisis.  In the past week alone more evidence from within Iran has hit social media, showing mass lines at gas stations and panic among citizens as rationing is introduced. 

Energy officials have acknowledged a gasoline deficit of roughly 15 million liters every day, warning that strategic reserves have reached “dark red” territory.

Iran has ten main operating oil refineries plus the large Persian Gulf Star condensate refinery, which is the country’s biggest gasoline producer, meaning, they do have the capability to produce their own domestic gasoline supply.  So, why the shortages? 

 

Some refined products are shipped into Iran from foreign sources and the US blockade is stifling that supply.  However, there is also the possibility that the blockade has forced Iran to shut down a number of oil wells due to lack of storage.  Depending on the type of well, a shutdown can cause extensive damage and prevent new production for years to come.  It's likely that Iran's crisis is rooted in an oil supply problem as much as a refining problem. 

The Iranians have recently called for a return to the standards set by the MOU agreement with the US, and they have also accused the US of committing "war crimes", arguing that the blockade is causing a humanitarian crisis.

The recent admissions of economic damage, the fuel shortages and the assertions of humanitarian crisis are a sharp tone shift from Iran's posture only a month ago.  Couple this with the 400% surge in ships traversing the Strait of Hormuz and it would seem that Iran is losing the war outright.  If the blockade continues for another few months the financial damage could be irreversible and repairing resource flows could take years.    

It's not enough for the regime to survive if the economy they oversee dies.  

Tyler Durden Sun, 08/30/2026 - 16:15

AI's China Syndrome: Who Will Control The World's Newest Energy?

Authored by J.T. Young via Substack,

Ceding leadership in AI to China's Chinese Communist Party (CCP), what could go wrong?

Just about everything. Yet that is precisely what some here in the U.S.-and all in Beijing-want to occur.

America is currently being swept by misguided attempts to curtail AI's development and the development of the data centers on which AI's development will depend. Some of these stem from legitimate concerns (though often inaccurate) about what AI can and will do. Some stem from concerns about what data center development will mean for their communities. [The answer is jobs, investment, and growth-something that West Virginia's governor Pat Morrisey and statehouse leaders presciently see as they pitch their state for just such responsible development.]

However, some of this opposition also stems from foreign influence from those who would love nothing more than to see America not be the leader in a technology that has the potential to define this century's development and beyond.

The history of mankind's development could be shorthanded into a history of mankind's harnessing of energy. This history began with humanity's use of its own muscle power. It moved from our muscle power to harnessing (literally) the muscle power of animals. This power was supplanted by the power of the elements-wind (with sails, mills, etc.) and water (mills, dams, and more). Then there was steam. Then the internal combustion engine. Electricity. Nuclear. And yes, renewable forms as well.

We shifted back and forth between these as refinements were made to their production and application; however, they largely served first to supplement, and soon to supplant, our muscle power. Certainly, there were enhancements to our "mental energy" too, writing and the printing press, for example; however, it was not until relatively recently (in the 1940s) that the "mental energy" revolution exploded with the advent of the computer.

AI is different, and in that difference lies its potentially revolutionary aspect. AI offers the power to supplement our mental power far beyond what the computer can. Our mental power is the distinguishing feature of the human species, which underscores just what AI could do for humanity.

This brings us back to those who want to curtail America's leadership in this vast potential. Clearly, China's CCP is at the forefront of those who would like to see America not have this leadership. Even more, it is clearly at the forefront of those seeking to prevent American leadership in AI.

China's efforts to slow America's AI development are many. Undoubtedly, the CCP will find more ways, and more examples will come to light.

All this leads to the question: If America does not lead in AI, who will? China's answer is already clear. Even more important, then, is the question: What would China's leadership in AI entail? We can largely answer that question based on past and present experiences.

The virtual monopoly the West gave to China in rare earth mining, production, and manufacturing of products heavily dependent on these minerals has not served us well. It has given the CCP leverage in many instances. It has undoubtedly increased the price volatility of rare earth-dependent products, which has also encumbered the adoption of such products. It has also shifted these rare earth activities to a country with lower environmental standards (one even more pronounced in the past, when the West gave China its rare earth monopoly).

China's laxer oversight standards have had global repercussions beyond the environment. COVID's origin from China's Wuhan Institute of Virology is increasingly accepted; concerns about its safety and management standards were known years before COVID. At the very least, China's delayed revelation of important information about COVID allowed the virus to spread. The escape of an earlier SARS virus in 2004 is also widely known.

None of these argue for security when it comes to AI oversight in China. How then could China be trusted in the development of a technology that is widely predicted to potentially be the world's most powerful?

There should be even less confidence in the CCP's deployment of AI. China regularly targets its adversaries (both at home and abroad) with every tool available-and increasingly with AI-making its citizens among the most surveilled in the world. There are growing reports of China's funding of U.S. protests. China's Belt and Road Initiative uses investment to gain influence and build dependency across the globe-particularly in developing nations.

China's direct aggression has been increasingly on display for years. There are its recurrent border conflicts with India. There is the building of island bases in waters near the Philippines (and other areas in the Pacific for years) and confrontations with that government. There has been the abrogation of its deal with Hong Kong for recognized rights, and its jailing of political opponents there. There have been continual threats of aggression against Taiwan; bellicose warnings have also been issued against Japan.

The CCP's internal repression is even greater than its external actions. Its recently passed "Ethnic Unity" law builds on past charges of genocidal practices against the Uyghurs and Tibetans. Internal surveillance, already severe, has only been enhanced by the CCP's use of AI.

If the CCP uses a myriad of ways to confront foreign governments and intrusive means against its own citizens at home and abroad, there is no reasonable expectation that it would not use AI against foreign nations and their citizens too.

The CCP desires AI supremacy, just as they have been allowed to have it in rare earth minerals. They are working to secure this for the obvious reason that AI has the potential to be far more valuable than rare earth minerals.

And because the West was shortsighted enough to cede China leadership in rare earth minerals, the CCP has some reasonable expectation of success in its AI efforts. That the West is so willing to allow its own culture and values to undergo assault from within (in contrast to the CCP's enforcement of its cultural hegemony internally with its new ethnic unity law) is just another signal to Beijing that the West is unwilling to defend its interests.

How fast China is progressing in the 21st century's technology race is evidenced by its leadership in the development of humanoid robotics and other areas. So, the threat is not only real; it is already here.

To recap, China's already using AI for surveillance internally and externally. China's oversight of its science has proven inadequate in medical research, just as its oversight of the environment has been. Yet some, such as Senator Bernie Sanders (I-VT), would not only have us ignore these warning signs, but dramatically exacerbate their potential for danger with AI by curtailing its development and de facto ceding AI leadership to China.

The history of energy has written the history of human development. This history of energy was largely one of supplementing muscle energy. The new revolutionary energy is not physical energy but mental energy. It is AI, and it will supplement humanity's mental energy. Beyond the question of what AI can do is who will control it?

We all recognize that AI will be overseen; such oversight is a hallmark of the U.S. However, doing so to the extent that it curtails AI development and renounces leadership in a technology of unprecedented power to the world's least accountable government is extremely naive. Doing so to a government that has demonstrated, and continues to demonstrate, that it will use all the means at its disposal to the detriment of those it perceives to be adversaries would be the biggest mistake in history-with potentially the most powerful technology in history.

J.T. Young is the author of the recent book, Unprecedented Assault: How Big Government Unleashed America's Socialist Left from RealClear Publishing. Follow him on Substack.

Tyler Durden Sun, 08/30/2026 - 15:45

'No End In Sight': Democrats Make Trump Foreign Policy A Central Issue After 6-Months Of Iran War

Via Middle East Eye

US Democrats on Friday slammed the Trump administration for dragging out the war on Iran to its six month anniversary, warning Republicans would pay the price in the upcoming midterm elections.

The joint US-Israeli attack on Iran, beginning on February 28, was initially meant to last a few weeks, by President Donald Trump's own estimates. Half a year later, the war has seen the US lose at least 18 of its troops and cost $100bn in military spending, most of which was approved by the Republican-controlled Congress late last month after Secretary of War Pete Hegseth requested additional funds north of $60bn.

AFP/Getty Images

The war has cost each American taxpayer around $600 to $1,000 in extra energy costs because of Iran's response in blocking the Strait of Hormuz, according to a Brown University study and estimates from Moody's Analytics. 

Estimates for the number of Iranian dead vary between 3,400, according to the UN’s OCHA agency, and 6,000, according to the Israeli military.

"Trump and his chief dealmaker [Vice President JD] Vance have failed to reach an agreement to end their war. Back in March, Trump and Vance said the war would be over 'soon' - but just this week, Trump said he is 'not in a hurry' to end the war," Democratic National Committee (DNC) chair Ken Martin said in a statement on Friday. The DNC oversees all party activities and vets candidates for elections.

"[They] dragged the US into a deadly and costly war they clearly cannot find a way out of - at the expense of the American people who are struggling to make ends meet. Trump and Vance explicitly promised no new foreign wars, yet six months in, there is no end in sight to the conflict that has driven up prices on everything from gas to groceries," Martin said.

"While Republicans claim they cannot bring down costs or fund affordable healthcare for everyday Americans, they continue to spend billions of dollars on a war no one wanted or asked for - and voters will remember this betrayal when they head to the polls in November.”

The Silver Bulletin, which tracks and analyses public sentiment, noted on Friday that repeat polling has shown around 37 percent of Americans support the US-Israeli war on Iran, while 55 percent oppose it. 

Half hearted opposition?

While Democrats in the House of Representatives latched onto an effort by the progressive wing of the party in late February to force a War Powers vote - which would insist on Congress having the power to declare war and not the president - it was not clear they would have actually opposed any attacks in their capacity as lawmakers.

Earlier this year, before the 28 February US-Israeli onslaught began, reports emerged that Democratic Party leadership was trying to curb more grassroots efforts to restrain Trump's war-making authority.

Establishment Democrats, many of whom failed to condemn Israel for what the United Nations and Holocaust scholars have called a genocide in Gaza, have not shied away from consistent condemnation of Iran, believing that, if not now, then at some point Tehran would have to be militarily confronted.

Iran itself had said that, while it must be ready for a war with the US - largely egged on by Israel - it would rather cut a deal that allows it the weapons it says it needs to defend itself as a sovereign state. 

A week before the US and Israel began joint air strikes, Secretary of State Marco Rubio and CIA Director John Ratcliffe briefed House and Senate leadership on the latest Iran developments behind closed doors. The top Democrat in the Senate, Chuck Schumer, emerged only to say to reporters: "This is serious, and the administration has to make its case to the American people."

Four days earlier, Schumer said in a statement that "confronting Iran's ruthless campaign of terror, nuclear ambitions, regional aggression, and horrific oppression of the Iranian people demands strength, resolve, regional coordination, and strategic clarity".

Where things stand

If there is a diplomatic track that Trump is still pursuing, there are no signs that it's yet at a senior enough level to bear fruit. Two attempted ceasefires have quickly collapsed. 

Qatar's prime minister arrived in Iran on Thursday in a bid to seek a joint Iran-Oman solution to reopening the Strait of Hormuz. The talks have slightly lowered the price of oil this week, but Trump's new deployment of the USS Theodore Roosevelt for a seven-month stint in the region suggests tensions are not winding down any time soon.

US Treasury Secretary Scott Bessent on Monday announced a new wave of sanctions against Iran and its "enablers", towards what he described as an "asphyxiation of this regime".  He called it "Operation Economic Outcast".

Most Democrats have all along shared the same hawkish attitudes and assumptions when it comes to Iran...

Ro to Dem Iran hawks:

"The last thing we want is to goad Donald Trump into more conflict"

"Is this the time to be saying to Donald Trump, you haven't blown up enough stuff in Iran? Absolutely not!"

"Let's get a negotiated settlement... Democrats should be for ending this war" pic.twitter.com/Rxbd7e1iJ6

— Just Foreign Policy (@justfp) May 27, 2026

Using a "zero leakage approach", Bessent said the Treasury had "mapped every node, every facilitator, and every network that Iran has used to smuggle oil and evade sanctions", and that Trump had already made phone calls to counterparts around the world "with specific requests to cease their interactions with the regime". He did not specify which leaders, nor on what timeline they may act.

Then there's the critical shortfall in US munitions, given the Pentagon has moved many to the Gulf, as it strikes back at Iranian retaliation against US military bases and energy facilities in the region. A Reuters report this month said the US had exhausted its stockpile of sophisticated long-range missiles during the war on Iran, including surface-to-surface ATACMS and Precision Strike Missiles (PrSM). 

The Associated Press also reported a "beyond critical" shortage of advanced missile interceptors, especially Patriots, which have been used to shoot down Russian ballistic missiles in the war with US-backed Ukraine. 

Tyler Durden Sun, 08/30/2026 - 15:10

"Profound Game-Changer": Musk Launching New Turbine Blade Factory To Solve Shortage Threatening AI Boom

SpaceX is making an aggressive push into the power generation market, with The Information reporting that Elon Musk is preparing to address one of the most critical bottlenecks threatening America's data-center buildout: the shortage of advanced gas turbine components, particularly the blades and vanes needed to power massive data center campuses.

SpaceX is laying the groundwork for a new factory in Bastrop, Texas, that would manufacture high-temperature blades and vanes for industrial gas turbines. The move could allow Musk to circumvent the severe turbine blade shortage that has pushed availability toward 2030.

On X, Musk responded to the report, saying, "The limiting factor for nat gas turbine production is casting the blades & vanes. By doing in-house casting at SpaceX, we can accelerate nat gas turbines coming online by up to 18 months, which is a profound game-changer."

SpaceX and Tesla are each building 100GW/year of solar production capacity as fast as possible, but natural gas will still be needed to supplement and bootstrap solar for several years.

The limiting factor for nat gas turbine production is casting the blades & vanes. By doing…

— Elon Musk (@elonmusk) August 29, 2026

Musk previously warned about the shortage during a recent podcast, saying, "Turbines are sold out through 2030. In order to bring enough power online, SpaceX and Tesla will probably have to make the turbine blades and vanes internally. There are only three casting companies in the world that make these, and they're massively backlogged."

ELON MUSK: “Turbines are sold out through 2030. In order to bring enough power online, SpaceX and Tesla will probably have to make the turbine blades and vanes internally. There are only three casting companies in the world that make these, and they’re massively backlogged.” pic.twitter.com/YlKHznBXhK

— DogeDesigner (@cb_doge) August 29, 2026

A Federal Trade Commission filing shows that Musk has acquired APR Energy, a provider of mobile gas turbine power plants used by data centers, utilities, and industrial customers.

Musk's acquisition of APR Energy also gives him access to a mobile fleet built around GE TM2500 and Mitsubishi FT8 turbines, which typically produce 20-35 MW per unit.

SpaceX is targeting roughly 10 gigawatts of AI computing capacity by the end of 2027, while Musk has said the company wants substantially more power and cooling infrastructure.

Consensus estimate is that ~15GW of AI compute produced in 2027 cannot be turned on in 2027.

This is harder than just finding power, as you also need to build out all the transformers, wiring, liquid-cooling, (massive) chillers & complex networking. https://t.co/cRXJ1Wrkri

— Elon Musk (@elonmusk) August 29, 2026

This all signals that Musk views the turbine shortage as a direct threat to SpaceX's data center buildout timeline. Rather than wait on constrained outside suppliers, he is moving aggressively to vertically integrate another critical layer of the AI infrastructure stack across his business empire.

Tyler Durden Sun, 08/30/2026 - 14:35

Iceland Voters Reject Reopening Talks To Join European Union

Iceland voters on Saturday rejected a proposal to reopen negotiations to join the European Union, after the island nation of some 400,000 people chose to maintain independence after shelving its membership bid more than a decade ago.

Supporters of the 'No' campaign wave Icelandic flags during a rally against reopening Iceland's European Union accession negotiations in Reykjavik, Iceland, on Aug. 27, 2026, two days ahead of a national referendum. Jonathan Nackstrand/AFP via Getty Images

Heading into the vote, the "yes" camp was ahead by just 2.6 points - however opponents defeated the measure by a margin of 52.8% to 47.2%, according to RUV. 

A "yes" vote would have sent the government back to Brussels -  while any deal would have required a second referendum and ratification by all 27 member states. Now, the issue is shelved and moot.

Before the 'no' vote, Social Democrat Prime Minister Kristrún Frostadóttir described the vote as "an opportunity."

Opponents suggested this was nothing more than deception - with the government trying to convince people "that we are not really applying, that we are merely looking into what membership would entail," Gudlaugur Thor Thordarson, a former foreign minister and current lawmaker for the opposition Independence Party, said in an interview with The Epoch Times. "If you apply to join the EU, you are applying to join the EU."

Membership, he said, would mean EU law overriding Icelandic law, a sweeping transfer of legislative and executive power, and the jurisdiction of the EU's courts on top.

Haraldur Ólafsson, a physics professor who chairs the eurosceptic movement Heimssýn, told The Epoch Times the question was worded so that people "find it very difficult to say no to discussions."

Applying without wanting to join, he added, makes "a fool of the European Union." "You should try to win over the people of the country before you submit an application, instead of submitting one in camouflage," he said.

Iceland Prime Minister Kristrun Frostadottir participates in a listening session on the upcoming referendum in Reykjavik, Iceland on Aug. 26, 2026. Jonathan Nackstrand/AFP via Getty Images

As the Epoch Times notes further, Iceland applied to join the EU in July 2009, months after its banks collapsed. Talks opened in 2010, and 11 of 35 policy chapters had been provisionally closed by the time a new center-right government froze the process in 2013. The fisheries chapter, the most sensitive of all, was never opened.

In March 2015, Reykjavík asked Brussels to no longer regard it as a candidate country.

The current government contends that the application nonetheless remains valid, a view the European Commission has endorsed. Thordarson disputes this. The "still valid" line, he said, was the product of government lobbying in Brussels and "came as a total surprise to all of us."

He also said that visits by European ministers to Reykjavík over the summer to urge a "yes" amount to "foreign interference."

Spanish Foreign Minister José Manuel Albares and his Austrian counterpart, Beate Meinl-Reisinger, both spoke favorably of Icelandic membership during visits to the country in June, with the referendum on the agenda.

France's Jean-Noël Barrot struck a similar note during an official visit in July, saying Iceland "had nothing to lose" by reopening talks.

The Greenland Factor

The government's own explanation for the timing points not to Brussels but to Washington. Frostadóttir's center-left coalition, formed after the late-2024 election, had pledged a referendum by 2027. In March it brought the vote forward, weeks after U.S. President Donald Trump renewed his push to acquire Greenland, which he said has become a national security concern for the United States because of increasing Russian and Chinese influence over the Arctic.

Foreign Minister Thorgerdur Katrín Gunnarsdóttir said it would be "both naive and irresponsible" not to take the moment in history into account.

Snærós Sindradóttir Bachmann, executive director of the European Movement in Iceland, told The Epoch Times that the vote is "about human rights and democracy, and about standing with like-minded nations against this threat from the West," a reference to Washington's pressure on Greenland.

"Greenland is 290 kilometers [about 180 miles] away from us. We have to be realistic," she said.

Eggertsson, for his part, said he was "very cautious about speculating that similar pressure will be directed at Iceland," citing the country's "strong and longstanding ties with the United States."

But as larger powers grow more willing to apply pressure, he said, "stronger cooperation with allies and like-minded countries becomes increasingly important." He added: "I would not frame this as turning away from the United States or from NATO."

Iceland has no armed forces of its own. A founding member of NATO, it relies for its defense on a 1951 agreement with the United States. In March, it also signed a security and defense partnership with the EU covering Arctic and maritime security, cyber issues, and economic security.

The Greenland episode weighs on her, Bachmann said, and she's concerned it does not seem to worry many of her compatriots.

Thordarson, who said he too objected to Trump's statements on Greenland, dismissed the argument as "a pretext" and a narrative that "does not hold up." Frostadóttir, he added, had not campaigned on a referendum on reopening accession talks.

Ólafsson was blunter: the government, he said, had blown the Greenland issue "light-years out of proportion."

Greenland has weighed on the debate "much less than people abroad would think," Oddsson said. "The topics actually being discussed are much closer to home: the currency, fisheries, agriculture, and questions of sovereignty."

Tyler Durden Sun, 08/30/2026 - 12:15