NOTE: Apologies for the “Critical Error” mess that showed up yesterday. Turns out, it was a WordPress memory issue that has since been resolved…

My morning train WFH reads:

• Anthropic Was Behind. Now It’s the AI Boom’s Front-Runner. After years as also-ran, startup pulls ahead in AI race after focusing on enterprise users and coding (Wall Street Journal)

•  We’ve calculated your chances of winning money on Polymarket: WaPo runs the math on Polymarket. Spoiler: the house always wins, but in a more sophisticated way than the lottery. (Washington Post)

• Trillions in Retirement Dollars Flow Into Opaque Trusts: The collective investment trust quietly eating mutual funds in 401(k) plans. Cheaper, less regulated, less visible — pick two. (Bloomberg)

• Appraisal Institute Is Being Sued By Experts In A Dying Field: Jonathan Miller on the appraisal profession eating itself as automated valuation models close in. The lawsuit is symptom, not cause. (Housing Notes)

• GameStop’s $68,000 Charizard Pokémon card saga is wild: GameStop’s foray into trading-card speculation produces one of the funnier markets stories of the year. Truly, this company will sell you anything. (Polygon)

• The Boxing Ring Where a VC Guy Pummels Opponents With Crypto Trades, Not Punches: James Parillo is a venture capital partner by day. At night he dominates a booming underground world of live trading competitions. Silicon Valley fight club where the combat is crypto trades. Peak late-cycle, peak self-parody, and worth reading anyway. (Wall Street Journal)

•  Pity the poor billionaires – demands for higher taxes must feel hurtful: Arwa Mahdawi at her sharpest, on the perpetual wounded-billionaire complex. Funny because it’s true. (The Guardian)

• Why saying hello to strangers can be good for you. Studies showing that simply chatting with strangers has a lasting impact: It can make the participants happy. Even smiling and waving hello to a vendor you see regularly can boost your spirits, says psychologist Gillian Sandstrom, who delved into the benefits of social ties after her own uplifting exchanges with a hot dog seller during a time when she was feeling really isolated. (NPR) see also Can having a dog boost your longevity? Here’s what science says. There is some research that suggests that furry friends may improve the health of their humans. Dog owners appear to live longer than non-dog owners, according to quite a bit of research. In a 2019 meta-analysis of nearly 4 million people published in the journal Circulation: Population Health and Outcomes, researchers found that having a dog was linked to a 24 percent lower risk of death from any cause during the study period compared with people who lived canine-free. The evidence is mixed; the experiential return is high. (Washington Post)

• The Democratic Senate Map Doesn’t Look So Bad Anymore: On how Trump’s second term has reshuffled Senate competitiveness in unexpected ways. The expert priors are getting reset. (Zeteo)

• ‘Treats its audience like adults’: why Moneyball is my feelgood movie: The latest in our series of writers paying tribute to their favourite comfort films is an ode to Brad Pitt and Aaron Sorkin’s lovably human baseball drama. (The Guardian)

Video of the day: Why Oil Will Never Hit $200

Be sure to check out our Masters in Business this weekend with Sheila Bair, former Chairperson of FDIC from 2006-11. She helped steer the agency through worst financial crisis since the Great Depression. Her new book is aimned at young adults and teenagers, titled “How Not to Lose a Million Dollars”

 

Will we snap back to the pre-war trend of RoW outperformance if Peace materializes?

Source: Jim Reid, Deutsche Bank

 

Sign up for our reads-only mailing list here.

 

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

The Hidden Cost To The American Worker From The AI Boom

Authored by Steven Edginton via American Intelligence,

While many warn that artificial intelligence itself will displace American workers, far less attention is paid to the fact that the very companies building AI are already replacing American employees with cheaper foreign labor. In many cases, though, the immediate threat to American workers is not the technology itself, but the hiring practices of the firms developing it.

In 2025, 406,348 H-1B visas were given to foreign workers in the United States, according to the latest U.S. Citizenship and Immigration Services data. For hundreds of thousands of Americans, that figure is a nightmare.

The H-1B visa program, created in the 1990s as a temporary work visa supposedly for highly-skilled migrants, has flooded America with millions of cheap foreign workers.

For the last few months, I have been investigating the issue of the H-1B program and its impact on Americans for a new documentary for GB News. During that process, I received a flood of messages from workers across the country describing how they were forced to train their foreign replacements, saw their jobs were sent overseas, or witnessed ethnic tribalism in hiring that shut Americans out of jobs altogether.

The largest users of the H-1B program are Big Tech companies, many of which lobby Congress aggressively against reforms that could disrupt their pipeline of foreign labor.

Tech workers in Silicon Valley, one of America’s great civilizational achievements, are now overwhelmingly foreign born. According to the 2025 Silicon Valley Inde, roughly two-thirds of Silicon Valley tech workers were born outside the United States. There are more Indian-born tech workers there than those born in California. Highly-educated tech workers from India and China outnumber those from the United States, making up 41 per cent of the workforce compared with 30 per cent.

Lawmakers should evaluate the national security implications of a strategically vital American industry becoming taken over by, and increasingly dependent on, foreigners.

But the most visceral impact of this change has been on American tech workers.

According to an analysis by Harvard economist George Borjas, H-1B workers are on average 16% cheaper to employ than their American counterparts. For each H-1B worker employers save an average of $100,000 over the six-year term of the visa. Employers then have the ability to sponsor H-1B workers for green cards, ensuring they replace American workers in perpetuity.

One Silicon Valley based employee told me she lost her job after her Indian manager forced her to hire an Indian assistant, who she was later told to train so that he could replace her. Since then, she has been struggling to find work for two years, and was forced to sell her home.

In another case, a whistleblower, who until recently worked at FedEx, said her entire team’s jobs were off-shored to India. A former Google contractor said he was told to train his replacements in the Philippines. These stories are not atypical, especially for older workers who are competing for jobs with young, cheaper foreigners.

Many have also seen ethnic tribalism in hiring. At Google one former employee said he saw Indians give other Indians confidential interview questions to help them secure jobs. Others told me similar stories, where ethnic nepotism has led to workplaces becoming hives for foreign workers who all spawned from one particular city or even village in India. One high-profile example of this can be seen in the case of Cognizant Technology Solutions, an IT consulting company founded in India. Several successful lawsuits against the company in recent years have found discrimination against non-Indian employees in hiring and promotions.

To deal with these challenges, the Trump administration has attempted to crack down on the H-1B visa. Last year a new $100,000 fee was announced which would apply to employers hiring foreign talent. While official figures on the impact on H-1B applications are not yet available, experts estimate that applications may have fallen by between 30 and 50 per cent.

However, veteran anti-immigration campaigner and lawyer Rosemary Jenks said the new fee has had little overall impact as it doesn’t apply to domestic H-1B applications. Those who convert their visas to H-1Bs, such as students, or those renewing their H-1Bs are exempt from the $100,000 charge. Jenks’ view was confirmed to me by an immigration lawyer in Silicon Valley, who said she had seen a significant increase in domestic H-1B applications.

And when it comes to foreign competition for jobs, the H-1B program isn’t the only challenge for American workers.

This week Immigration and Customs Enforcement (ICE) announced it has found more than 10,000 cases of potential fraud in the Optional Practical Training (OPT) program. This scheme allows foreign students to work in the United States for up to two years after graduating (who can then convert their student visas into H-1Bs, and eventually green cards). ICE officials said they had found “empty buildings and locked doors at addresses where hundreds of foreign students are allegedly employed”.

Unlike the H-1B program, which requires employers to pay the “prevailing wage” for roles, those employed under OPT can be paid any wage. The result is that American graduates are competing for entry level jobs with foreigners who are willing, and able, to work for far less. As of last year, 294,253 students are in the US on the OPT program.

Some Republicans, including Florida Governor Ron DeSantis, have called for the H-1B visa to be abolished entirely. But until Congress is willing to confront the political influence of the Big Tech lobby, America’s dependence on cheap foreign labor is unlikely to end. The irony is that while Americans are told to fear displacement by artificial intelligence in the future, many are already being displaced in the present by hiring practices of the very firms building it.

Tyler Durden Wed, 05/13/2026 - 22:35

Israel's Netanyahu Made Clandestine Trip To UAE During Height Of Iran War

Amid the fog of the Iran conflict, some serious geopolitical chess moves were happening in the shadows, with Israeli PM Benjamin Netanyahu having slipped behind what were once enemy lines, into the the quarters of UAE President Mohamed bin Zayed Al Nahyan, for a clandestine summit which could help realign the region.

"This visit has led to a historic breakthrough in relations between Israel and the UAE," Netanyahu's office confirmed in a Wednesday statement.

It provides top level confirmation of a new CBS report, which revealed that "Netanyahu made a secret visit to the United Arab Emirates recently, where he met with Mohammed bin Zayed, the country's president."

The clandestine meeting occurred in late March, and out of that grew out of the Abraham Accords, given UAE was the first to sign onto normalization with Israel back in 2020. Strangely, later in the day Wednesday, the UAE Foreign Ministry denied the trip ever took place.

It was also revealed this week Israel actually deployed its prized Iron Dome batteries and IDF personnel directly onto UAE soil during the conflict to defend against the significant Iranian attacks.

But the diplomacy didn't stop with the heads of state. Intelligence sources indicate that Mossad chief David Barnea has been a frequent flier to the UAE, making at least two trips during the heat of the Iran war to synchronize "military operations" - a move first reported by The Wall Street Journal.

US Ambassador Mike Huckabee "There’s an extraordinary relationship between the UAE and Israel." This developing realignment means that the defense of the Gulf is now inextricably linked to Israeli tech and intelligence. 

"I'd like to say a word of appreciation for United Arab Emirates, the first Abraham accord member," Huckabee said at a Tel Aviv Conference this week. "Just look at the benefits. Israel just sent them Iron Dome batteries and personnel to help operate them."

"The Gulf states now understood they will have to make a choice - is it more likely they will be attacked by Iran or Israel?" Huckabee posed before the Israeli audience. "They see that Israel helped us and Iran attacked us. Israel is not trying to take over your land, and is not sending missiles to you."

So clearly there is a coordinated effort to finally make public very sensitive information - that for the first known time in history Israel is directly transferring weapons to a Gulf Arab state, while its head of state is making personal secret drop-ins for direct face time.

So during the war we saw Saudi Arabia bombing Iraq and Iran, UAE bombing Iran and Kuwait bombing Iraq https://t.co/NDweJxldFu

— Faytuks News (@Faytuks) May 13, 2026

Even long before the current Iran conflict, there was a growing covert relationship between Israel and some Gulf states going back to the early phase of the Syrian proxy war, in the last decade.

Israel and the Sunni autocrats conspired to overthrow Bashar al-Assad, a longtime key ally of Iran, and they cooperated on funding and supplying anti-Damascus jihadi insurgents. Out of this shadow war came a greater mutual understanding.

Tyler Durden Wed, 05/13/2026 - 22:10

Trump Says Cuba Is Seeking Help: 'We Are Going To Talk'

Authored by Troy Myers via The Epoch Times,

Cuba wants help, and the United States will hold talks with the communist island nation, President Donald Trump announced in a Tuesday post on Truth Social.

He did not specify when those talks would take place.

“No Republican has ever spoken to me about Cuba, which is a failed country and only heading in one direction—down! Cuba is asking for help, and we are going to talk!!! In the meantime, I’m off to China!” Trump wrote in his post.

The president has made Cuba a focus of his second term, increasing pressure on Havana in the form of sanctions, an oil blockade, and repeated comments from himself and others in his administration about how Cuba is next after the U.S. military captured former Venezuelan leader Nicolás Maduro, a longtime ally of Cuba, in January.

As he left for his trip to China, Trump declined providing any further information to reporters at the White House.

“Cuba is not doing well. It’s a failed nation, and we'll be talking about ‌Cuba at ⁠the right time,” Trump said.

Asked about any planned talks with the country, a White House official said, “Within a short period of time, they will fall, and we will be there to ​help them out.”

Trump has imposed multiple rounds of sanctions against the Cuban regime to choke the leadership out and push it toward making a deal.

Secretary of State Marco Rubio, who is of Cuban descent, announced some of those sanctions on May 7.

On May 1, Trump signed a presidential action broadening sanctions on the communist government, imposing them on individuals, entities, and affiliates of the regime. It also targeted anyone complicit in human rights violations or corruption.

“[Cuba’s policies] constitute an unusual and extraordinary threat,” Trump’s order said. “Not only are these policies, practices, and actions designed to harm the United States, but they are also repugnant to the moral and political values of free and democratic societies.”

On Jan. 29, Trump signed an executive order imposing tariffs on any country that provides Cuba with oil. Days later, the president said Mexico would cease oil shipments to the country.

The oil blockade, sanctions, and U.S. capture of Cuba’s main oil provider in Maduro have crippled the nation’s energy infrastructure.

Blackouts, shortages, and fuel rationing have become part of daily life in Cuba.

Although the United States offered some relief in allowing a Russian-flagged tanker to bring 730,000 barrels of oil to Cuba on March 31, the supply lasted less than 10 days.

Cuban Americans, including Fidel Castro’s daughter, have sharply denounced the communist government, calling on Trump to turn his attention to Cuba.

Trump has pitched the idea of a  “friendly takeover” of the country, or a military takeover, adding that he believes he will have the “honor of taking Cuba.”

“That’s a big honor, taking Cuba in some form,” Trump told reporters in March. “Taking Cuba. I mean, whether I free it, take it, I think I can do anything I want with it.”

Trump will meet with Chinese leader Xi Jinping from March 13–15, the first presidential visit to the country since Trump’s 2017 stop in his first term. China has called for the United States to end its oil blockade and sanctions against Cuba.

“We’re going to have a very good meeting,” Trump said before departing.

Tyler Durden Wed, 05/13/2026 - 21:45

Rising Jet Fuel And Ticket Prices Could Disrupt Summer Air Travel

Submitted by Tsvetana Paraskova of OilPrice.com

Summer travel could be disrupted for millions of airline passengers as airlines pass on higher jet fuel prices onto air fares and cancel unprofitable routes, according to the global association Airports Council International.

The surge in jet fuel prices as a result of the Middle East crisis leads to higher air fares. Passengers should be prepared for higher ticket prices for longer, Stefano Baronci, the Airports Council International’s director general of Asia Pacific and Middle East, told Bloomberg in an interview published on Wednesday.  

Supplies of the fuel from the Middle East cannot move past the Strait of Hormuz, while Asian refiners slashed exports amid reduced run rates and preference and/or orders to keep more supply for their respective domestic markets.

So, the recent crash in global exports of jet fuel – which is the most stressed barrel during the ongoing supply shock – was not unexpected. 

Jet fuel supplies from Northeast Asia and India West Coast crashed and tightened the global jet fuel market so much that officials and airline executives started talking about fuel shortages in a few weeks’ time.

Fatih Birol, executive director of the International Energy Agency (IEA), warned in mid-April that Europe has “maybe six weeks or so” of remaining jet fuel supply.

But the Airports Council International’s Baronci dismissed concerns about shortages, noting that the high prices remain the key problem for the industry going forward. With higher air fares, demand destruction is inevitable and airlines could opt to slash more routes this summer, he added. 

Earlier this month, Lufthansa Group, Europe’s biggest airline, said it expects the surge in jet fuel prices to cost it an additional $2 billion this year as the closure of the Strait of Hormuz “is leading to a shortage in kerosene supply and thus to a significant increase in kerosene prices.” 

The war in Iran and the closure of the Strait of Hormuz have severely constrained Europe’s jet fuel supply, while jet fuel prices spiked to over $200 per barrel in April before easing to about $150 a barrel this month, which is still way above pre-war levels. 

Tyler Durden Wed, 05/13/2026 - 19:15

24/7 Live Feed: Watch Humanoids Work On Factory Floor

We have spent several quarters building the case for readers that humanoid robotics is approaching an inflection point, transitioning from years of training videos and promotional stunt videos to real-world factory-floor deployment.

Multiple leading research desks we have cited expect global shipments of humanoid robots to begin ramping later this year and the years ahead, suggesting the job-displacement wave now hitting white-collar workers through AI chatbots could soon extend to blue-collar labor across warehouses, manufacturing lines, and beyond.

Let's revisit an early February note from UBS analysts led by Phyllis Wang, who forecast that shipments of humanoid robots would begin ramping this year before accelerating sharply in the years ahead. Wang outlined several scenarios, all pointing in the same direction: up and to the right.

Let's fast-forward to Wednesday, when U.S.-based robotics company Figure AI launched a live feed on X and YouTube of its robots "running a full 8-hour shift at human performance levels."

Last week, Figure CEO Brett Adcock told Sourcery's Molly O'Shea about a "near-term" push to bring humanoid robots into homes, where they would perform basic household tasks under a consumer subscription model that could cost "hundreds per month," similar to a car lease.

Adcock said the robots could "cost something like $600 a month" for consumers...

.@adcock_brett says in the "near term" @Figure_robot will sell humanoid robots for the home for ~$600/month:

"You can plug it in a wall outlet, it'll go to its dock and charge."

"I want it to do the laundry every day, dishes every day, and tidy the house multiple times a day." https://t.co/z1GlCILVW9 pic.twitter.com/n8lFocjUy1

— sourcery (@sourceryy) May 5, 2026

Figure's most recent funding round was in September, when it raised more than $1 billion in Series C financing at a $39 billion valuation.

The increased visibility around Figure, whether through the CEO on a podcast or the startup's new live feed showing robots operating on a factory floor, raises an obvious question: Is the manufactured hype being deliberately amplified ahead of a potential fundraising push?

Tyler Durden Wed, 05/13/2026 - 18:50

Chaos Unleashed: When "Irrational" Makes Perfect Sense

Authored by Charles Hugh Smith via OfTwoMinds blog,

Once fairness and honesty have been stripped out of a social order, social trust collapses. Once trust collapses, society disintegrates.

It's important to understand the dynamics of chaos before the certainties in our lives are swept away.

Over the past few months, I've been exploring the dynamics of delusion and breakdown:

1. our reliance on models to make sense of the world and what happens when those models no longer track reality;

2. the difficulties in adapting when our old model breaks down;

3. our growing reliance on complex systems and AI;

4. our frustration with broken systems that are impervious to reform;

5. how the status quo makes a show of reforming broken systems, substituting theatrics for substance;

6. the destabilizing consequences of extremely asymmetric distributions of wealth, power and income;

7. the erosion of our standard of living and quality of life as "progress" is replaced by Anti-Progress and an Ultra-Processed Life of transactions and synthetic facsimiles of authenticity;

8. how these forces have shaped two "fork in the road" narratives:

A. boundless prosperity for all generated by AI and technology

B. the breakdown of an imbalanced, inherently destabilizing socio-economic-political system of the powerful and the powerless defined by moral decay, the collapse of trust in institutions, widening extremes of inequality and the substitution of artifice for authenticity, a.k.a. everything is fake, to maintain the illusion that all is well.

These ideas inform my recent work:

One of Us Is Delusional, But Which One?

When Predictability Collapses, What's Scarce and Valuable Is Adaptability

AI, Money, Human Nature and the Problem with Problems

Why We're Helpless When Things Break Down

The Fork in the Road Ahead

Recession and Revolution: Our Experience Isn't a Model or System

What Would Be Truly Bullish? Actually Fixing What's Broken

There are two underlying material-world dynamics that tie all these themes together:

1. Growth / Progress--defined as higher energy consumption per capita that results in increased purchasing power of wages--is no longer robust enough to raise all boats. This reality is reflected in the declining purchasing power of wages, which is typically labeled "a rise in the cost of living" / inflation.

2. At the same time, the top 10% ownership / professional / managerial elite is taking a larger share of the pie due to a number of factors, including regulatory capture, political changes in tax laws that favor asset-owners, etc., and the explicit but unstated policy decision to give the stagnating economy the appearance of "growth" by inflating credit-asset bubbles that enrich those who already own assets at the expense of those who don't own enough to matter.

These boil down to the distribution of "pain" and "gain": who gets the pain and who gets the gain, and whether the pain and the gain are distributed across all socio-economic classes or are they asymmetrically distributed.

The "pain" of declining purchasing power of wages, living standards and quality of life (for example, health, financial security. etc.) is being distributed to the bottom 80% while the "gains" are distributed to the top 10% owners of capital. (A tiny percentage of the gains trickles down to the cohort between 80% and 90% who own enough capital to maintain a "middle class" lifestyle.)

As I have noted many times, humans are hardwired to be innately attentive to the three dynamics that give humanity's social skills such immense adaptive power:

1. fairness / unfairness (justice, injustice)
2. truth / honesty / authenticity
3. trust (but verify)

Once fairness and honesty have been stripped out of a social order, social trust collapses. Once trust collapses, society disintegrates.

I consider it self-evident that extreme asymmetries of distributing pain and gain cannot be justified as "fair" nor are they perceived to be "fair" by those absorbing the pain.

I also consider it self-evident that truth / honesty / authenticity have been replaced by theater, staged performances and the self-serving artifices of making a show of reforming broken systems.

That social trust is in steep decline cannot be plausibly denied.

This raises the question: how does this disintegration manifest?

Tim Morgan of Surplus Energy Economics (highly recommended reading) has provided an insightful context for understanding how social-economic-political disintegration follows a profoundly human and inherently "irrational" emotional progression.

As he explains, in our technocratic system, causal chains are invariably presented as mechanistic: technology changes this, monetary policy changes that, and so on. We understand "how things work" as linear, reductionist, left-hemisphere mechanical processes of inputs, processes and outputs.

But humans are not machines, and society is not a mechanism comprised solely of institutions and technocratic / financial processes.

Morgan offers the missing half of disintegrative dynamics: the emotional progression of grief famously described by Dr. Elisabeth Kubler-Ross in her 1969 book On Death and Dying, a process that in one way or another works through five emotional states: Denial, Anger, Bargaining, Depression, and Acceptance.

Morgan posits that we are collectively grieving the loss of growth without being fully aware that we're experiencing this dynamic because we're in the denial stage.

#323: They First Make Mad: Stress and Grief at the End of Growth (Tim Morgan of Surplus Energy Economics)

Kubler-Ross describes a system that is not linearly mechanical; it's a progression that often veers into emotional states that can be described as "irrational" even as they are completely rational to those experiencing them.

This is a system of emotional processes and truths that can't be understood with the conventional tools of systems dynamics or the social sciences, for the "irrationality" of each state is intrinsic to the progression.

Humans are not mechanisms, and neither is this emotional system. What appears "irrational" is not irrational; it's the way this system works to reconcile our inner life with existential life-changing events.

The status quo's survival strategy is to claim that the Anti-Progress of systemic decline in the standard of living / quality of life experienced by the bottom 80% is still "growth" and "Progress," but this model is veering so far from lived experience that it's increasingly delusional for those not being enriched by bubbles in stocks and housing.

Since we resist losing what we value and are accustomed to--a positive social identity, livelihood, security--the bottom 80% are experiencing the uneasy limbo that precedes a profound phase change that cannot be reversed.

In this temporary state of instability, they're clinging to denial that the era of "growth / Progress" that actually improved their living standards and quality of life has ended, even as the tightening vise of decline increasingly stresses their security, social mobility and belief in the model of permanent upward mobility and prosperity.

The pain generated by decline comes in forms that don't lend themselves to measurement: anxiety, precarity, etc., emotions that make denial a form of emotional solution. But this "solution" doesn't resolve the anxiety or precarity; it's only an emotional Band-Aid / coping mechanism.

Our hardwired awareness of unfairness, artifice and the collapse of trust can't be suppressed, and these chip away at denial. Eventually the denial breaks down, much like an avalanche: the scales fall from our eyes and we see everything we've denied as inescapably real.

On the other side of this phase change is anger.

Denial becomes increasingly delusional as declines that would have been shocking in previous eras of prosperity are now accepted with the passive shrug of the powerless. Selling one's blood for extra cash--once the sole domain of destitute junkies needing cash to feed their addiction--is now an accepted middle-class "gig" to earn extra cash to support a lifestyle that is slipping away:

The Middle-Class Suburbanites Who Sell Their Blood Plasma to Get By.

Another hallmark of middle-class security--the IRA/401K retirement fund--is being drained to pay for everyday expenses:

They Withdrew 401(k) Money Early, and They Have Some Regrets.

In an era of declining purchasing power of wages, the money being withdrawn is unlikely to be replaced.

This account by an anthropologist sheds light on the themes I'm describing:

"The America I move through today often feels alien to the one I thought I knew. Those who fall behind are seen not as constrained, but as having failed. The result is a pervasive, if often unspoken, alienation--one that erodes shared bonds and leaves people to navigate inequality on their own.

Most troubling is the way this environment feeds a politics of grievance. Anger and frustration are redirected toward scapegoats rather than toward the structures that concentrate wealth and power. Identity and culture become tools of division rather than sources of connection. In that context, authoritarianism finds its opening--not as a rupture, but as an extension of patterns already in place."

Since humans are social animals, private anger that is shared becomes public anger--a much more powerful, more volatile emergent property of the phase change from denial to anger.

In this context, we can understand the "wealth tax" in California and the tax on second homes worth in excess of $5 million in New York City as precursors of this phase change from denial to anger which fuels the desire to restore some balance by clawing back some of the gains of the super-wealthy.

This is an example of what I call redress in my book Investing In Revolution: the desire to rebalance extremes of inequality to restore some measure of trust in institutions and the system. Redress can also be fulfilled by restoring previously existing limits on concentrations of power that tilted the system to distribute the lion's share of gains to the few at the top.

Examples of the rules being changed to benefit the wealthy include stock buybacks (previously illegal), Citizens United and a long list of other regulatory changes designed to benefit those with the wealth to buy political influence.

If redress is thwarted or watered down to just another virtue-signaling performance of fake reform for show, the alternative manifestation of anger is retribution. When anger slides into rage as redress is thwarted, retribution has the potential to gain an emotional momentum few anticipate.

Absent systemic unfairness, deception and distrust, anger can proceed to bargaining without transitioning into rage: when bad things happen to us while others are unaffected, it feels unfair--but since it isn't intentional--no one sacrificed our interests to serve their own--we eventually find ways to accept that life is inherently unfair.

But when the system is built on unfairness, deception and distrust so the few can benefit at the expense of the many, anger heats up into rage when redress is denied. This rage seeks expression, and if it's shared by others, it quickly spreads into a volatile public movement.

Bargaining, depression, and acceptance are off the table until substantive redress is achieved or the rage burns itself out.

Chaos looks irrational due to its unpredictability and destructive potential. But when viewed as part of a hardwired emotional casual chain triggered by unfairness, deception and distrust, then not only are anger and demands for redress rational, so too is rage unleashing chaos when legitimate demands for redress are denied by those in power.

At this volatile juncture where the emergent properties of public rage take on a life of their own, the importance of shared beliefs and ideals becomes paramount: absent a narrative and model that inspires positive collective actions, the emergent properties of public rage manifest as uncontrollable chaos.

History offers several templates for what happens once the spark of public anger ignites a fast-spreading wildfire of rage and retribution. One is martial law, a military clampdown that erases public expression and replaces democratic institutions with authoritarian rule. This is the root of Napoleon's famous quip about quelling the mob with a "whiff of grapeshot," i.e. blasting the mob with cannons loaded with round bullets.

In other cases, an authoritarian or self-serving, corrupt neofeudal regime attempts to quell the disorder, but the force needed to suppress the public rage is beyond those being tasked to shoot down their family and friends to save the regime from the consequences of its exploitation and lies.

But the consequences of model collapse don't go away with force. All that force accomplishes is the suppression of public anger. What's needed to nurture a society that values, prioritizes and incentivizes fairness, authenticity and trust is a new model that inspires the disenfranchised with a coherent set of values and goals.

Ivan Illich described this in a way we can all understand:

"Neither revolution nor reformation can ultimately change a society, rather you must tell a new powerful tale, one so persuasive that it sweeps away the old myths and becomes the preferred story, one so inclusive that it gathers all the bits of our past and our present into a coherent whole, one that even shines some light into the future so that we can take the next step. If you want to change a society, then you have to tell an alternative story."

Developing this alternative story is the point of my work. The outlines are not complicated:

1. shift the goal from "growth" (The Waste Is Growth, Everything Is Disposable Landfill Economy) to a sustainably rewarding quality of life that isn't measured solely by material consumption but by the "prosperity" of positive social roles, upward mobility (chances to get ahead), agency (control of one's life) and a say in decisions affecting shared interests (for example, the quality of air / water and public institutions).

2. Limit centralization and the consolidation of financial, economic and political power in the hands of the few, who inevitably use this power to serve their interests at the expense of the many.

We can understand this alternative story as a secular Reformation, a necessary response to a incorrigibly corrupt status quo whose foundational story (infinite growth via what Tim Morgan succinctly describes as "infinite monetary stimulus and limitless technological possibility") is unsustainable and therefore delusional.

Absent a coherent, realistic, inspirational alternative story, once chaos is unleashed, there is no pathway to the restoration of fairness, authenticity and trust within a sustainable model that serves everyone's interests.

John Maynard Keynes famously stated that "markets can remain irrational longer than you can stay solvent."

The same can be said of redress-denied, rage-fueled chaos: it too can remain irrational longer than we can imagine.

Tyler Durden Wed, 05/13/2026 - 18:25

Democrats Are Not In Good Shape For The Midterms

The conventional wisdom heading into 2026 was simple enough: an unpopular president, a restless electorate, and history's gravitational pull toward the opposition party would deliver the House back to Democrats.

CNN's Harry Enten spent this week throwing cold water on that narrative — and the data he brought to the table should give Democrats serious pause.

Start with the map.

Democrats were counting on Virginia’s new map to give them four more solid seats heading into the midterms, but the Virginia Supreme Court struck it down in a 4-3 ruling, finding that the Democratic-led legislature violated procedural requirements when referring the measure to voters. Democrats quickly appealed to the U.S. Supreme Court, but experts largely agree that the high court won’t take the case.

On Monday, Enten called the outcome for what it is. "I think it's fairly safe to say that Republicans will, in fact, win” the redistricting wars, he said. Then came the caveat that only partially softened the blow: "But what exactly does that mean? Does that mean it's a nightmare for Democrats? Well, sort of, but not really." 

The caution is understandable. Redistricting alone was never likely to guarantee Republicans control of the House, but it has made the Democrats’ path back to a majority considerably steeper. Before the current wave of Republican-driven mid-decade redistricting, a simple popular vote win would have been sufficient for Democrats to retake the House. That threshold has now moved. Democrats, having failed in Virginia, needed to offset the net losses in red states that have updated their maps. They haven't. The margin Democrats need in the national popular vote to flip the chamber has climbed to roughly 3 to 4 points — and that's before accounting for any further setbacks.

On Tuesday, Enten pointed out that new polling shows Democrats leading the generic congressional ballot by just 3 points, which is within the margin of error. "Democrats are up by three points, and I want you to note the yellow lettering," Enten said, walking viewers through the graphic. "No clear leader. It is within the margin of error." Pre-redistricting, Enten said that kind of lead might have been enough to put the gavel back in Democratic hands. "But now, with the redistricting, their ladder, they have to climb ever higher, and a three-point win may very well not do it."

Run the math, and the implications are clear.

 "If this were, in fact, the actual result come election day, the race for Congress, the race for the House, would be basically a toss-up."

And a toss-up is not where the party that spent the past several months banking on Trump's economic unpopularity expected to find itself.

The problem facing Democrats right now is that, across all of the traditional indicators, conditions favor the Democrats, which should suggest a blue wave. But they don’t.

"Just because Donald Trump is unpopular doesn't make Democrats popular," Enten observed, delivering the line with the understated precision of someone who had been waiting to say it for months.

Perhaps most striking is the erosion of the Democratic generic ballot lead over a matter of weeks. In March, Democrats held a 6-point advantage. It has since compressed to 3. That kind of momentum in the wrong direction — cutting the lead in half during a period when Trump's economic numbers cratered — is not what opposition surges look like. As Politico put it, "Democrats are in arguably on worse footing in their bid to retake the House than they were less than one year ago."

The Democratic Party has a real ceiling problem, and the structural math is now working against it.

"Republicans very much in the race for the House of Representatives," Enten said. "They're in that game."

He closed with the kind of assessment that cuts through spin: "I think this poll serves as a big time reality check for Democrats, and that is, it ain't over yet, especially with the redistricting when we look ahead to the 2026 race for Congress." 

The new CNN poll should serve as a big time reality check for Dems.

Yes, Trump isn't liked on the economy... but neither are the Dems.

Dems' lead on the generic House ballot isn't growing.

With redistricting, the race for House control is well within the margin of error. pic.twitter.com/ewJ6w1W1AT

— (((Harry Enten))) (@ForecasterEnten) May 12, 2026

With six months to go before the midterms, the map and the polls have gotten worse for Democrats. 

Tyler Durden Wed, 05/13/2026 - 18:00

Where Have The Men Gone?

Authored by Jeffrey Tucker via The Epoch Times,

The Department of Labor keeps careful track of employment and the demographics thereof. Their latest report on men in the labor force is both mysterious and deeply alarming. It turns out that the labor force is missing about 7 million men who would otherwise be working. Close to a third of working-age men have vanished from the labor force.

The labor force participation rate among “prime age men,” age 25 to 54, in the 1950s approached 100 percent. Now it is 89 percent, meaning roughly 11 percent are not in the labor force (neither working nor looking for work).

Among all men over 16 years of age, the rate is a devastatingly low 66 percent, so about one-third are gone. Among U.S.-born men, nearly 22 percent are gone.

This is really quite shocking.

The trend in decline dates far back, accelerated in the 1960s, stabilized in the 1980s, declined again after the turn of the century, and took a deep dive after the pandemic lockdowns and never recovered. It is falling again now, nearly to the lows we saw when the economy was actually locked down.

The explanations for this are all over the map. Disability ranks at the top.

But we aren’t really talking about wooden legs and paraplegics here. This traces to mental disorders, substance abuse, obesity and chronic disease, low motivation, pharmaceutical injury, and general lethargy and demoralization.

How do they pay the bills? The lucky ones have trust fund flows. The conventional ones live with Mom and Dad and take disability benefits. The really unlucky ones are simply homeless.

The number of men who live with parents has tripled since the 1950s when the expectation was that you would be kicked out of the nest at 17 and only return for holidays and special occasions. Otherwise, any self-respecting dude would make a living for himself, find a bride, and set up his own family. The idea of basement dwelling was simply unheard of.

There is overlap here with men falling out of the workforce. Men (especially non-college) living with parents are 20 percent less likely to be in the labor force than those living independently.

We all have stories. In fact, you are thinking of some men you know now and how it happened that they just lost interest in the normal flow of life. Instead, they spend their time with gaming, scrolling, porn, OnlyFans, and some other pointless or destructive pursuit. They rely on substances and drugs to dampen the pain. They have given up.

There is plenty of blame to go around. The full feminization of the workplace is only a few decades old now, with every firm being lorded over by Human Resources, which is dominated by women by 70–80 percent. They serve as a breeder of conflict such that any offense is immediately reported if it usually involves men as the target.

College students have been taught for years that the word toxic and masculinity are inseparable, while the phrase “toxic femininity” does not exist. Indeed, it is commonplace for any competent man in the workforce to be falsely accused of absurdities. No company is willing to risk the litigation costs, and so it throws the guy out even with zero evidence of wrongdoing.

Years ago I heard one guy in an investment bank say that every man in his office regards women as essentially inanimate, like statues with whom never to engage at any level. He added that no responsible man would ever get on an elevator if there is a woman alone in there. Doing so risks your career because you can be accused of anything to your doom.

Is the corporate workplace today hostile to men? To say absolutely is a huge understatement. It should not be shocking to discover that millions of men have simply said they want no part of it.

Oddly, men today can get by on not much money at all. If they are living with family, room and board are free. If you prefer looking like a slob, clothing expenses are nearly zero too. In today’s world, it is possible for a working-age man to manage with only a trickle of government benefits. Without a serious inner drive to achieve something, one year can fold into the next.

As a general principle, a man without a job is only going to get ever sicker. The whole of society suffers their absence.

There are always good excuses. The labor markets are extremely tight right now, especially for men with soft-discipline college degrees who have no marketable skills despite being six figures in debt. Here is a real tragedy. They were told to stay in school and just get that piece of paper. Now the job market is not particularly interesting.

Then you have the cost of housing, which is extremely high. Buying a house is out of the question. Even with simple renting, lease applications are extremely strict now. You have to show stable income flows and have excellent credit. No landlord these days is willing to risk nonpayment given what happened in 2020 when the government imposed an eviction moratorium.

You also have a major problem with what is called the reservation wage. This is the level that one expects to get paid even when market conditions are not cooperating. Sure, some guys can take their lumps and start delivering or driving rideshare. But for many men, taking such a job is an assault on their personal dignity. They won’t do it.

In the end, we really are talking about a volitional choice to drop out.

Talking with others about this, we all know cases in point. They are embarrassed, isolated, and in a spiral of demoralization that is hard to fix.

I was listening to a podcast the other day by an influential guy who said something that really spooked me. I somehow can’t shake his words. He said that realistically there is nothing to do. Nothing. He continued to explain that you can hang out at home and play on the computer or go to a restaurant. After you eat, you can go home again and play on the computer. He said some people recommend travel but he said this is pointless because it is the same whether in Milan or Milwaukee: you sit in your room or go eat. Nothing else.

These are astonishing words to me. For how many others is he speaking? Have we really come to this place as a culture? What would you suggest to this young man? You can of course yell and say: get a life! The trouble is that we have an entire generation or two of men who don’t even understand what that is.

Ideally, if we could go back in time, men would get a serious job like construction at the age of 15 or so. My brother did this and it was astonishing to watch. He would come home at 5 p.m. and fall into bed moaning in pain, rouse himself for dinner, and then collapse again. It was this way for a week until his body and mind adjusted. Wow, did he learn a thing or two.

My case was less rigorous: roof repair, piano moving, organ tuning, well digging, courier services, and finally department store maintenance. I never did the road crew but I did learn the joy of work early.

That doesn’t help the late 20-something who sees no real point to waking up. What to do?

For the past year, I’ve been working on a book that explores an interesting thesis; namely that there is a crying need these days for men to lead a rehomesteading movement, starting right now in one’s apartment or wherever you live.

The book traces the history of domesticity and how tasks have been allocated by gender and how technology and demographics have scrambled these roles in ways to which society has yet to adjust.

Just to cite one obvious point, in the 1950s, 4 out of 5 households with children under 18 had one stream of income provided by the husband/father.

Men knew their roles and responsibilities, long inherited from history when men were in the fields and factories and wives and mothers took care of vast domestic responsibilities.

Today that figure is only two in five. Two-thirds of households with children have two income streams with both parents pursuing some professional life outside the home. This happened due to declining real household income. Mainly it was inflation and not feminist ideology that drafted adult women into remunerative labor outside the home.

The result created a loss of purpose for men, many of whom feel lost and useless. My book provides a practical answer; namely taking on the multitude of tasks in the home that have otherwise been abandoned. The book breaks it all down room by room including detailed explanations of home decor, cleaning, sewing, cooking, and entertaining. The book’s title: “A Man’s Castle.”

Going back to the podcast guy who complains there is nothing to do, my answer would be to look around where you live. The window blinds have a coat of dust and grime on them. Your clothes have holes that could be sewn. The laundry is backed up and stains are everywhere. Make a roast. Look up how. You could have people over and then take responsibility for assuring that everyone has a good time.

Believing that these are not the jobs of men is part of the problem. My solution might sound mundane but at least it begins to address the real issue: the lack of purpose and meaning. Rehomesteading isn’t the whole answer but it is a beginning.

Now that a third of working-age men have slipped into a life of lethargy and nihilism, it’s time to sound the alarm. We have to start fixing this.

Tyler Durden Wed, 05/13/2026 - 17:40

Japan's Refinery Utilization Hits 73% As Strategic Oil Stocks Flow In

With global refineries working overtime to convert oil into much needed product, Japan's refinery utilization rates also surged in May, as releases from petroleum reserves and increased supply of non-Middle East crude are easing the crude supply crunch seen in March and most of April, OilPrice reported.

For the first time since March, refiners in Japan have boosted their average utilization rate to above 70% in the past two weeks, data from the Petroleum Association of Japan (PAJ) showed on Wednesday.

Utilization rate of the designed capacity was 73.3% in the week to May 9, following 77.3% utilization rate the week prior to May 2, the data showed. These run rates compare to utilization rates in the 60% range in April, according to the weekly statistics data released by the PAJ.

Resource-poor Japan is one of the biggest energy importers globally and relied on the Middle East for as much as 95% of its oil imports before the war. Most of the oil comes from Saudi Arabia, Kuwait, the United Arab Emirates, and Qatar. Of these Middle Eastern supplies, about 70% typically arrived in Japan on tankers traveling through the Strait of Hormuz.

As the war choked supply from the Middle East, Japan began releasing oil stocks from national reserves at the end of March, as part of the IEA-coordinated record-high release of 400 million barrels of oil and fuel. Japan is releasing a total of 80 million barrels of oil stocks, including 54 million barrels of crude and 26 million barrels of oil products as part of the IEA's 400-million-barrel release.

The ongoing stocks release, which is Japan's biggest, is helping refiners increase throughput. So is alternative supply from producers outside the Middle East, including rare cargoes from Azerbaijan and Latin America.

Some of the largest refiners in Japan, including Cosmo Energy Holdings and Idemitsu Kosan, aim for average utilization rates of more than 90% in the current fiscal year ending March 2027.

Cosmo Energy's outlook for the fiscal year include assumptions that crude oil production in the Middle East would normalize in August, and crude procurement "from September onward."

Tyler Durden Wed, 05/13/2026 - 17:20



 

 

At The Money: Is SpaceX IPO Breaking Capitalism? (May 13, 2026)

Once upon a time, companies went public to raise money. Road shows, pitch decks, investor meetings — and eventually, you’d float some stock and IPO. That’s not the case anymore.

Full transcript below.

~~~

About this week’s guest:

Dave Nadig is President and Director of Research at ETF.com, and he shares with us how investors should navigate all of these new products. Dave helped design and market some of the first exchange-traded funds. He is the author of  “A Comprehensive Guide to Exchange-Traded Funds” for the CFA Institute.

For more info, see:

LinkedIn

Twitter

Substack

~~~

 

Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

 

Transcript:

Barry Ritholtz: Once upon a time, companies went public to raise money. You’d go on a road show to pitch your story and drum up interest. You’d float a big pile of stock, and then you’re off to the races to go build your company. Turns out, that’s not really the case anymore. I’m Barry Ritholtz, and on today’s episode of At the Money, we’re gonna talk about the upcoming IPOs for trillion-dollar companies like SpaceX, Anthropic, and OpenAI.

Barry Ritholtz: To help us unpack all of this and what it means for your portfolio, let’s bring in Dave Nadig. He is president and director of research at etf.com, and he shares with us how investors should be navigating not only these IPOs, but what they’re gonna mean for various indexes, like the Nasdaq 100 and the S&P 500.

Barry Ritholtz: So, so Dave, you wrote a fascinating piece, and essentially you claimed SpaceX is breaking capitalism and indexing. W- what is exactly broken? Is it the IPO process, the index process, or both?

Dave Nadig: I gotta say I think it’s both. Sadly, I think it’s both. Uh, the IPO process I think most people can understand seems pretty broken, right? We now live in a world, uh, where, uh, the private equity space is where most of the growth in capitalism is captured, right? If, if I had a great idea, if Barry, if you and I were gonna just launch a company tomorrow, go raise a bunch of money and do something, we wouldn’t go to Wall Street. We would go to some private equity firm, and we would say, “Hey, we’ve got this great idea.” And they would say, “Awesome, give us 75% of your company for a couple million bucks,” and we’d be off to the races. And then when we need more money, we would go back to that same private equity person, who would probably connect us to their favorite private credit person, who would then loan us another $50 million for us to do the next stage of our business. And so on, until we’d accumulated so many shareholders, so many, so many mouths to feed, that if eventually we have to go public so that all those people can get paid. That is the reality of the modern IPO market, which works out pretty well for the private equity capital, but no longer really rewards the public as a public market the way it used to.

Barry Ritholtz: So, so let’s talk about that contrast between old IPOs that raised growth capital. You, you very much imply in, in your piece, “SpaceX Is Breaking Capitalism and Indexing,” which by the way, I stole that opening paragraph of, um, you, you very much imply that modern IPOs, uh, essentially exist to provide insiders and early investors with, with liquidity. So first, when did this shift occur? And second, is it an issue? Is it a structural problem?

Dave Nadig: Um, I, I think we can trace this back to pretty much every IPO since the g- the great financial crisis. I mean, I think any, any IPO in the last 15 or 20 years has followed a pretty similar pattern. We’ve seen this, the steady growth of the size of IPOs. They, they’re bigger and bigger and bigger companies. Now we’re talking about trillion-dollar IPOs. You know, when I went… In the dotcom era, the average IPO was about $120 million. That was the value of the company post-IPO, and the amount being floated averaged around 30 or 40%. So big chunks of these companies went public. People could assess them. They traded for a significant period of time, sometimes profitable, sometimes not profitable, and then they would end up in the hands of the public and in indexes, and that was a, that was a lengthy process. It took, you know, a year or two of being a public company for people to get familiar with you. That’s all sh- that’s all gone now, and so now what we have are these sort of headline-making IPOs of big companies, whether they’re, you know, a, a Klarna or a Reddit or now a SpaceX. Uh, and so everybody now feels like these are lottery tickets, that you wanna get in super early on the IPO, get some purported pop which no longer really happens, uh, and that that is your key to riches. Increasingly, what actually happens is the opposite. Companies come public. They trade down initially. Sometimes they ramp up. Tesla famously had a great first year after the initial sell-off. Um, so it’s not that all IPOs go this way, but it is no longer like the dotcom era.

Barry Ritholtz: So you mentioned SpaceX. People have described this company as kind of unique, in part because it involves commercializing space, uh, in part because Elon Musk still, despite the past couple of years, has a cult following, um, courtesy of, of his work at Tesla, uh, and then also because it’s just an immense valuation. Uh, what makes SpaceX unique or, or is it not unique?

Dave Nadig: Well, I don’t, I don’t want this to be about whether SpaceX good or SpaceX bad. SpaceX is unique for a bunch of structural reasons. It is already a multi-business conglomerate. It’s pretty rare we see a multi-business conglomerate come out as an IPO. That tends to be what you do after you IPO and start accumulating new companies. So inside the SpaceX wrapper, we’ve got Twitter/X, we’ve got Grok and xAI, which is increasingly now a data center story, I guess, and less a development of AI story. We’ve got the providing commercial internet, right? 9 million Starlink subscribers. That’s a very real business that makes real money. And then the near monopul- monopoly on at least, uh, United States space launch, uh, is, is, you know, virtually completely a monopoly now for SpaceX. So wh- whether that’s a great business or not, that makes it a bit unique already out of the gate. But more unique is how it’s coming to market. It’s only floating 5% of its stock, so 95% of this company will still be privately held after they float the IPO. And yet, despite that very, very thin float, uh, it’s getting accelerated entry into the Nasdaq 100 and is being considered for accelerated entry into the S&P 500. So we’re breaking all sorts of rules.

Barry Ritholtz: So, so let’s talk about the Nasdaq 100. Um, if you’ve been an investor in the QQQs as, as they’re known, uh, the Nasdaq-100 index ETF, you have done tremendously well over the past 15 years. Outperformed the S&P, outperformed just about every historical period, including the ’90s where the QQQs were just, you know, a giant home run, except for that little, you know, 83% crash at the end. Um, so, so what, what did Nasdaq do wrong in admitting SpaceX to the, the QQQs, and, and what should they have done instead?

Dave Nadig: Well, so what they did was over the spring they did what’s called a consultation, which is they go to all the people who actually pay for the index. I mean, important to point out, Nasdaq’s in a business. They license the S- the Nasdaq-100 to folks like Invesco to run the QQQs products that people know. And so they went out to all the people who licensed that index and said, “Would you be okay if we did this thing?” And everybody said yes, and so now we have new rules. What the new rules did was accelerate how quickly a company can get in if they’re very large, uh, to 15 days. It used to be six months. Um, and they’ve also, uh, changed how they think about the float. It used to be if you really floated a very thin amount of stock, they just wouldn’t consider you at all. Now at 5% float, they’re going to pretend that your float is 15% or 3x, just because of reasons. Uh, and, and then over time as the float increases, as shares come off lockup and more shares trade, that will ramp until, uh, 33% of the fund, the company is floated, at which point it receives full weight in the index because the Nasdaq-100, unlike most other indexes, is not free float adjusted. So normally if they didn’t do anything and they let SpaceX in, it would come in at 1.75 trillion. Instead it’s gonna come up at 15% of that when it finally launches, and then that will increase with every unlock. The percentage that the funds need will go up, and so it creates this kind of ramp that as more shares come out, there’s more guaranteed buying, which I gotta say feels like bag liquidity for the insiders.

Barry Ritholtz: What, what motivates them to do this? I mean, what harm would befall the index or the IPO or, or Nasdaq generally if they waited the six months that they’re supposed to wait for every other IPO?

Dave Nadig: I mean, basically none. The only argument you can make is that by having SpaceX in the ETFs, in the index itself, that people will be more attracted to that index, and therefore people will put more money in those funds, and ultimately that’s what people really care about. They want money tracking those funds. From a performance perspective, it’s not like every human being on the planet won’t be able to buy these shares the day after it IPOs. There’ll be a pr- I think if you wanna go buy 100 shares the day after the IPO, there’ll be a price-

Barry Ritholtz: Or the day of the IPO. You don’t even have to wait till the day after.

Dave Nadig: Right, there’ll be a price. Anybody will be able to buy it. So it’s not like it is this rarefied thing that can only be bought through this index. It’s gonna be everywhere. It’s gonna be like Apple stock. It’ll be easily tradable all over the world. So all this is doing is guaranteeing that existing money that is tracking that index will have to sell a whole bunch of other things in order to buy this new slug of SpaceX, which will be something like seven-ish billion dollars on that one day that they have to buy it all. So they’re just gonna be a big whale buyer in the market on one day. Uh, guess which way the price will go. Honestly, who knows, because who’s… Everybody knows this, so it’s gonna get front run.

Barry Ritholtz: So do you buy it the day-

Dave Nadig: Uh… before this? Do you wait until after this? It’s gonna be one of those get the popcorn moments in markets.

Barry Ritholtz: Is this an attempt to get ownership of SpaceX in an index before the S&P 500?

Dave Nadig: Sure. Uh, it’s, it’s a chance to build a pool of assets with a s- with, you know, a reasonable weight before the rest of the index world has piled on. Although we should point out Space, uh, S&P is now considering accelerating their rules too to include a company like SpaceX after six months. Not nearly as egregious, and the S&P has a committee that could say no, and they c- they always free float weight everything, so even if they did let it in early, it’s only gonna be in at 5% of its no- nominal real value.

Barry Ritholtz: Right. Yeah.

Dave Nadig: So what could happen in the S&P is much less dramatic, thankfully, than what could happen in the Qs.

Barry Ritholtz: So really this raises the question: Is this just a one-off, a one-time technical distortion, or is this gonna be a recurring tax on index ownership for people who don’t wanna play the IPO game, don’t wanna play the stock picking game?

Dave Nadig: Well, historically, I should point out the academic research would suggest that getting IPOs into your index earlier is bad for the in- in- the investor who’s standing there before the transaction. So, um, oddly, Vanguard’s CRSP indexes from the Chicago Research Center for Pricing, um, those indexes have, some of them are accelerated to five-day intr- induction after the IPO, and there’s been a study around that, and it says that’s kind of a bad idea. You’re very likely to, to be buying the pop and then sort of sitting on a long, slow decline back to what becomes some, you know, market value, market fair value. But the index tends to be the top tick. I think it’s very easy to create a scenario where you could see something like that in the queues as these IPOs get added. But again, given that everybody knows precisely when the trade’s gonna happen, which is market on close 15 days after the IPO, you’re probably gonna see the ramp up well before that because everybody’s gonna try to be the one selling into that index buying.

Barry Ritholtz: So how do you solve this problem? Is it simply a matter of adjusting this for the full float? “Hey, you’re only gonna put 5% out. Great. That’ll be reflected in, uh, in the waiting.” Or do you just follow your existing rules in terms of how soon we add an IPO, uh, to the index after it goes public so SpaceX has to wait the usual six months?

Dave Nadig: Well, y- you know, the question is w- the should here is for who, right? As an in- as an investor, as a lowly end investor, what this is doing is creating more differentiation between indexes than we have previously seen, right? So we’re gonna look at the world as it is now. Well, now the queues, the W- NASDAQ 100, is for sure the hyper IPO, get everything in fast, get every- get everything in big. As long as it’s listed on NASDAQ and it’s not a financial company, you’re gonna get it in the queues, and so that’s gonna be the go, go, go index. S&P is somewhere in the middle. They’re, they’re sort of trying to acknowledge this reality of the broken IPO market and maybe do things a little sooner. I would say most investors can probably ignore most of that because they’re adults in the room. And then institutions, I should point out, aren’t playing with any of this stuff. They all use MSCI indexes, right? And those have very static rule books that are very carefully adjudicated, and nobody’s even talking about MSCI changing their rules about this stuff. So what this means is we’re gonna have much more differentiation between what passive means, and as an investor, that means you can no longer just say, “I’m indexed, I’m fine.” You’re gonna have to have an opinion.

Barry Ritholtz: Huh, really, really fascinating. I, I’m, I’m deeply concerned about the everybody-knows massive buying clo- uh, on close for, for SpaceX. What does this mean for price discovery? What does this mean in terms of distorting the true, um, uh, demand and supply relationship?

Dave Nadig: Uh, it’s, it’s hugely distortive. Um, and the problem is that normally what you could say is something like, “All right, we’ll let this transaction get out of the way, and then things will calm down, and then everything will be… And then we’ll find out what prices really are.”

Barry Ritholtz: Mm-hmm.

Dave Nadig: Like when natural buyers and sellers actually show up in the market and have to think about it. The problem is that implies there’s some future s- time when we can say things are now normalized. N- I would usually have said something like, “Ah, three to six months things will settle down,” ’cause in markets three months is a long time. But I should point out, six months after this IPO, we get two things happening at the same time. Traditionally, when a lot of stock unlocks-

Barry Ritholtz: Mm-hmm.

Dave Nadig: …right, 180 days is a very common unlock window. And second, Nasdaq’s gonna have to rebalance the index again. And if those things time perfectly, we’re gonna end up with a bunch of shares unlocking, meaning the fligh- float might go from, say, 5 to 15%. At the same time, Nasdaq will have to take their exposure from 15% to, say, 45%, because they’re gonna be 3x whatever the float is on that rebalance. So we’re gonna have the exact same problem all over again as shares unlock and the index rebalances.

Barry Ritholtz: I assume the 3x was just for the thin IPO float. If that goes to 15% or 25%, it’s 3x again? That seems kinda silly.

Dave Nadig: Until it, until it hits a third, at which point obviously you’re at 100%, right?

Barry Ritholtz: Right.

Dave Nadig: So but that’s, that’s the w- it, it happens linearly, but as float unlocks, three times that amount gets added to the index until-

Barry Ritholtz: Why? What’s the motivation for that?

Dave Nadig: Because the N- Nasdaq-100 has never been free float adjusted. Now, it hasn’t usually mattered because nobody really cares that Nvidia is 95% float and Apple is 92% float, but the index has always just included them at 100%.

Barry Ritholtz: Right, which makes sense.

Dave Nadig: It’s only a, it’s, it’s only a problem when it’s very, very small, so what historically there’s been is a floor. If only 10% of your shares are floating, you don’t get to play at all. That’s what they’re getting rid of to replace it with this sort of weird multiplier effect.

Barry Ritholtz: It seems like, you know, we’re talking about, uh, an index, it seems like this isn’t a passive decision, and it’s coming from the folks at Nasdaq are making a very-

Dave Nadig: Active bet.

Barry Ritholtz: Hey, this Elon guy with Tesla was a giant win, and S&P was late to the party adding them. Let’s not make the same mistake with SpaceX. Is, is that the thinking?

Dave Nadig: Yeah, I, I think that’s exactly what’s going on. Uh, it, it will for sure be a marketing tool for the index, certainly if SpaceX tears out of the gate, which with all this buying, m- you know, is more likely now, right? Definitely puts some tailwind behind the s- price of the stock when you have these known buyers. That’s gonna just take some time to roll through. And, uh, look, I, I think it makes it a very active index. It already was. It has weird selections all through it, like non-financials, only on Nasdaq. It’s, it’s a bizarre set of rules. And, and now it’s got this weird timed trading thing that you just mentioned. I think this makes it very tough for anybody to think of this as a long-term buy and hold investment where everything will just work out in the long run. It’s now making some very active trading bets.

Barry Ritholtz: All right. So I’m gonna make you the philosopher king of index inclusion rules. What does that look like in terms of waiting period, minimum float, profitability, governance, um, a- and just do we have different rules for mega IPOs than regular IPOs?

Dave Nadig: I, I… If I was running the universe, if it was Dave Nadig’s index company, companies would have to trade for a year. They would have to have a year of trailing profitability, which is what the S&P currently has. They’re talking about getting rid of that, too. Uh, I, I, I would, I would free float adjust everything without question all the way down to nothing. Like, you can float 1% of your stock and you get a 1% presence. Like, I think that’s fine. And I would not count non-voting shares at all, period.

Barry Ritholtz: Huh. Fascinating, fascinating stuff. So for investors interested in the SpaceX IPO, there are gonna be a lot of trading anomalies around this IPO. It seems like the structure is very much, um, set up by Nasdaq and others to goose the price higher. If you’re a holder of Qs, well, maybe this has some impact around the edges. Um, some of it’s gonna offset, some of it could drive prices higher. But regardless, the IPO of SpaceX is gonna impact your passive index. I’m Barry Ritholtz. You’re listening to Bloomberg’s At the Money.

~~~

Find our entire music playlist for At the Money on Spotify.

 

The post At The Money: Is SpaceX IPO Breaking Capitalism? appeared first on The Big Picture.

Vaccine Researcher Trying To Debunk Measles-Autism Claims Extradited To US On CDC Fraud Charges

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

A researcher who co-authored papers that he and others said undercut claims that measles vaccination causes autism has been extradited to the United States on fraud charges 15 years after he was charged.

Poul Thorsen in an undated file image (L), and being extradited to the United States on May 7, 2026. HHS OIG via The Epoch Times

Poul Thorsen, 65, a Danish national, was transported from Germany to the United States on May 7 and arraigned on charges of federal wire fraud and money laundering, according to court filings and U.S. prosecutors.

A judge ordered Thorsen held without bail after he pleaded not guilty in a federal courtroom in Atlanta.

Thorsen is accused of stealing more than $1 million in grant money from the U.S. Centers for Disease Control and Prevention.

Thorsen was working as a visiting scientist at the CDC in the 1990s when he convinced officials to award a grant to Denmark. The CDC awarded more than $11 million to Danish government agencies from 2000 to 2009 to study any relationship between autism and vaccines, among other matters. In 2002, Thorsen moved to Denmark and became the grant’s principal investigator—the person in charge of administering the money the CDC was providing for research.

Thorsen allegedly went on to submit papers that listed fake expenses, according to charging documents. The papers resulted in Aarhus University transferring money to accounts that officials believed belonged to the CDC, but were actually Thorsen’s personal accounts.

Thorsen is accused of using the money to buy, among other purchases, a home in Atlanta and a Harley-Davidson motorcycle.

“Poul Thorsen allegedly stole more than $1 million in federal grant money by submitting fabricated invoices and diverting funds to his personal bank accounts,” U.S. Attorney Theodore Hertzberg said in a statement.

“Thorsen’s extradition reinforces a core principle: individuals who are accused in an indictment of defrauding the American people and misusing federally funded research will be pursued wherever they flee,” added Kelly Blackmon, special agent in charge at the U.S. Department of Health and Human Services’ Office of Inspector General.

A lawyer representing Thorsen did not respond to a request for comment by time of publication.

Thorsen was originally charged in 2011. He had remained a fugitive until being arrested in Passau, Germany, on June 4, 2025.

In 2026, German authorities agreed to extradite Thorsen to the United States.

Thorsen has co-authored dozens of papers, including a study that researchers said showed that children who received a measles, mumps, rubella vaccine were less likely to be diagnosed with autism compared to children who did not receive the vaccine.

None of the papers appeared to have any markings noting the charges against him as of May 11.

Tyler Durden Wed, 05/13/2026 - 17:00

The Liberal Media Is Finally Noticing Democrats Are Willing To Shred The Rule Of Law

Democrats have anointed themselves the defenders of democracy and protectors of the rule of law. For years, the liberal media has been more than willing to help push that narrative. But after the state Supreme Court struck down the Virginia gerrymander, the reaction from Democrats was so extreme that even their usual defenders couldn’t ignore how bad it looked.

On Sunday, the New York Times reported that House Minority Leader Hakeem Jeffries and Virginia Democrats held a conference call the day after the Virginia Supreme Court ruled that the party had violated the state constitution by passing its gerrymandered map, nullifying the new map before it could be implemented. According to the report, lawmakers spent the call “venting anger at their defeat,” with the atmosphere described as “desperation and fury,” and Democrats floated the idea of lowering the mandatory retirement age of the court so they could replace all the justices and restart the process of passing their gerrymandered map.

Even some of the liberal media’s old guard felt uncomfortable that such an idea was seriously considered, and what that says about the party that claims to be defenders of Democracy and the rule of law. 

That’s the unmistakable takeaway from a revealing exchange between Chris Cillizza and Chuck Todd on Monday on Cillizza’s podcast.

Chuck Todd framed the Virginia ruling as the natural consequence of bad politics and worse arrogance. “That’s how I feel about this, this ruling in Virginia, right? This was a bad idea. This was terrible messaging. This was defeat. This sort of undermined every supposed principle that the Democratic Party had been running on for over a decade,” he said.

The deeper problem, as Todd and Cillizza both made clear, is that Democrats did this to themselves. “And, you know, and they didn’t dot their I’s and cross their T’s,” Todd said, acknowledging reports that Democrats in Virginia knew their plan wasn’t constitutional but pressed forward with it anyway.

“The Democratic state legislature told the Virginia State Supreme Court, ‘Do not offer a ruling on this until after the election,’” Cillizza noted. In other words, they knew exactly what they were doing. They were trying to run the clock and hope the courts would stay out of the way until after the votes were cast, and there was nothing that could be done about it.

Todd then referenced the  New York Times report about the plan to lower the retirement age for Supreme Court justices to 54, which he used as another example of Democrats careening away from any serious commitment to institutional norms.

“And you’re sitting there going, ‘Wow.’ And you’re the same party that’s been complaining that Donald Trump doesn’t respect, um, the democracy? Doesn’t respect the will of the voters, doesn’t respect institutions.” 

“How about rule of law?” Cillizza added.

The narrative from Democrats for years has been about protecting democracy, defending norms, and standing up for institutions. But when their own power is on the line, that lofty rhetoric suddenly turns into just another set of talking points. Todd even admitted the entire episode looked insane from the outside. 

The most damning part came when Todd explained what he thinks the Democratic Party is willing to do.

“The left has become… as bad as Trump,” he said.

“I mean, look, go ahead and do it, but don’t be surprised when voters sort of decide, man, you guys are full of shit too. And you guys aren’t serious about the democracy. You just are trying to rig it in your direction.”

Todd also argued that the Democratic Party’s refusal to admit error makes the problem worse.

“The Democratic Party is not going to accept the premise that, ‘You know what? Maybe we were principally wrong about this, and maybe we should have stuck to the high ground,’” he said. Instead, he warned, they want to be “just as radical and just as, uh, anti-democracy as they accuse the other side of being.”

I was amazed/appalled by how quickly Dems screamed "RIGGED" and called for the impeachment/removal of the Virginia state Supreme Court on Friday.

Sounds a lot like the guy they say is a threat to liberal democracy.... pic.twitter.com/Ye8uHAaLav

— Chris Cillizza (@ChrisCillizza) May 11, 2026

That is the part that should worry Democrats the most.

When even their media allies are describing their behavior as anti-democratic, anti-institutional, and openly cynical, it’s a huge problem for them. The party that spent years sermonizing about norms is now getting caught pushing banana republic tactics and calling it righteousness. 

Tyler Durden Wed, 05/13/2026 - 16:40

Jane Street Slashes Bitcoin ETF Holdings, Adds Ether Funds In Q1 2026

Authored by Helen Partz via CoinTelegraph.com,

Wall Street market maker Jane Street reduced its exposure to Bitcoin exchange-traded funds (ETFs) in the first quarter of 2026 while increasing positions in Ether funds.

Jane Street cut major Bitcoin ETF holdings in Q1 2026, including BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC), according to a 13F filing published Tuesday.

IBIT holdings fell about 71% from Q4 2025 to roughly 5.9 million shares valued at about $225 million, while FBTC dropped about 60% to around 2 million shares worth roughly $115 million.

At the same time, Jane Street increased its exposure to Ether (ETH) ETFs, nearly doubling its position in BlackRock’s iShares Ethereum Trust (ETHA) and sharply raising its stake in Fidelity Ethereum Fund (FETH), adding about $82 million combined across the two products over the quarter.

The move comes amid early signs of institutional Ether ETF buying in early 2026, including increased exposure reported at Wells Fargo. The filing points to a reshuffling of Jane Street’s reportable crypto-linked holdings at quarter-end, though 13F disclosures do not show the market maker’s full trading book or net exposure.

Bitcoin exposure weakens further as Strategy stake falls

Jane Street’s Bitcoin-linked exposure weakened further in Q1 2026 as it reduced its stake in Michael Saylor’s Strategy (MSTR) alongside major ETF cuts.

In Q4 2025, the firm held about 968,000 MSTR shares worth roughly $145.9 million. By Q1 2026, the common stock stake fell to about 210,000 shares valued at roughly $27 million, a decline of about 78% quarter-over-quarter.

Jane Street increased its Strategy (MSTR) position by 473% in Q4 2025. Source: TheBTCTherapist

Strategy selling followed significant buying in the previous quarter as Jane Street reportedly increased MSTR position by 473% in Q4 2025.

In Q1 2026, the company also trimmed exposure across several Bitcoin mining stocks, including IREN, Cipher Mining, TeraWulf and Core Scientific.

Increased exposure to Coinbase, Galaxy and Riot

Despite broad downside pressure on Bitcoin-related assets, Jane Street increased exposure to several crypto-linked equities over the quarter, suggesting more selective positioning in crypto-related equities rather than a broad exit from the sector.

Jane Street raised its stake in the crypto mining company Riot Platforms (RIOT) to about 7.4 million shares, up from 5 million, increasing its value to roughly $91 million from $63 million.

It also increased its position in Coinbase (COIN) to about 888,000 shares from 778,000, with the value rising to about $155 million from $176 million in the prior quarter.

Galaxy Digital (GLXY) saw the sharpest expansion, jumping to about 1.5 million shares from just around 17,000, lifting its value to roughly $28 million from around $380,000.

Jane Street posted a record $16.1 billion in Q1 trading revenue, according to Reuters, as volatile markets and gains tied to artificial intelligence-related investments boosted financial results.

Tyler Durden Wed, 05/13/2026 - 15:25

GOP Lawmakers Leery Of Trump's Billion-Dollar Ballroom-Security Package

Wary of the terrible election-year optics, some federal Republican legislators are less-than-enthusiastic about approving a request for a billion dollars in security funding relating to President Trump's White House ballroom project. Some of them shared those feelings with reporters after they received a Tuesday afternoon closed-door briefing by Secret Service Director Sean Curran. 

When he first rolled out the 90,000-square-foot ballroom project, Trump repeatedly emphasized that the project would cost $200 million and be funded entirely with private donations. Now the ballroom itself is projected to cost $400 million -- still privately-funded -- but with another $1 billion in federal funding being poured into security provisions.

An artist's rendering of Trump's ballroom, which is now projected to cost $400 million before $1 billion in security add-ons (via White House)

“I think the timing and the optics are really bad,” North Carolina Sen. Thom Tillis told reporters Monday. “This time last year, roughly, maybe a little bit before, we were all impressed with the fact that this $400 million building was going to be paid for out of the generosity of donors, and now we’re hearing 2½ times that is necessary for some other aspect of the project.” The ballroom funds are supposed to be part of the ICE and Border Patrol bill that's considered as a GOP must-have. 

In his briefing to legislators, Curran provided an itemization of the big-ticket items comprising that $1 billion request. “He walked through the various categories,” Senate Majority Leader John Thune said. “So it was a good back-and-forth, a good discussion, and obviously we had a lot of questions that were asked by our colleagues, just to get the details and precision as much as possible about how dollars will be used.”

According to the Washington Post, the categories include: 

• $200 million for "hardening" the party room, from both above and below; finishes include bulletproof glass, and systems to detect chemical weapons and drones
• $180 million for a new White House visitor-screening setup
• $175 million for training Secret Service agents and improving "protectee security"
• $150 million to ward off "emerging threats" to include bioweapons and airborne attacks
• $100 million to secure high-profile national events

Following the briefing, Kansas Sen. Roger Marshall, who routinely votes as Trump wishes, was non-committal. “I still got some more questions, and they’re going to send us more information...I'm undecided." Similarly, Louisiana Sen. John Kennedy, said he has "a lot" of questions of his own, adding that "One of the biggest concerns on our side is adding to the deficit." 

TRUMP: "We have a ballroom that's under budget. It's going up right here. I doubled the size of it because we obviously need that."

REPORTER: "The price has doubled..."

TRUMP: "I doubled the size of it, you dumb person. I doubled the size. You are not a smart person." pic.twitter.com/iC03NPPEye

— Breaking911 (@Breaking911) May 12, 2026

Others were more candid. "Not happening here," said Pennsylvania Rep. Brian Fitzpatrick, when asked if the House was likely to approve the funding. Asked if he'd personally vote for it, he gave reporters a blunt "no." Asked about how the price tag looks to Americans being hammered at the gas pump by the fruits of the Trump-Netanyahu war on Iran, Alaska Sen. Lisa Murkowski replied, "Not good." 

The ballroom project increasingly seems like a midyear election gift from a tone-deaf Trump administration to Democratic candidates across the nation. In a recent poll, Americans oppose it by a lopsided 56%-to-28% margin. More than the cost itself, it's the juxtaposition of what looks like a vanity project against increasing financial hardships being imposed on everyday Americans by the war on Iran and Trump's tariffs.  

On Tuesday, Trump handed more such campaign fodder to Democrats when -- asked if Americans' financial woes were a motivator for making a peace deal with Iran -- Trump said, "Not even a little bit. The only thing that matters when I’m talking about Iran — they can’t have a nuclear weapon. I don’t think about Americans’ financial situation." Though he was clearly trying to emphasize the (dubious) security narrative behind the war, his failure to express empathy for struggling families turned his remark into a political weapon. 

President Trump is asked how much he considers Americans' financial situation when negotiating with Iran:

"Not even a little bit. The only thing that matters is they can't have a nuclear weapon. I don't think about Americans’ financial situation. I don't think about anybody." pic.twitter.com/BFxqVtZgQr

— The American Conservative (@amconmag) May 12, 2026

Tyler Durden Wed, 05/13/2026 - 15:05

Gamma And Momentum: A Recipe For Cheers And Tears

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Intel (INTC) shares have risen 90% over the past month and more than 200% since the start of the year. Its competitors, Advanced Micro Devices (AMD) and Micron (MU), are posting similar gains. Many other semiconductor stocks, along with some computer hardware companies, are the market’s latest AI darlings. Momentum and gamma are driving the outperformance, and, in their wake, a supportive narrative is trying to justify it.  

The narrative holds that the insatiable infrastructure buildout for AI, including data centers, GPUs/CPUs, networking equipment, and power grids, requires massive capital expenditure from the largest hyperscalers (Microsoft, Google, Amazon, and Meta). The suppliers of these products, including semiconductor and hardware producers, are the most direct beneficiaries.

AI will significantly improve the bottom line for many companies. But investors should be asking whether the stock prices have gotten too far ahead of fundamentals. The answer, in our opinion, is likely yes. As we wrote in Parabolic Semiconductor Rally Is Pricing In 2028 Already:

Here’s the part that should bother bulls the most. SOXX is trading at multiples that already reflect strong 2026 earnings. The current rally has likely already fully priced in 2026 earnings. From here, you are paying for 2027 and 2028 growth in a sector where the cycle has not been repealed. Semiconductors are still cyclical. Always have been. The day the AI capex cycle hiccups, even briefly, is the day this chart breaks.

To fully appreciate the recent astonishing performance, it’s worth looking beyond fundamentals and narratives to better understand how herding, momentum, and option delta and gamma can systematically drive prices higher and eventually lower. 

Momentum Creates Momentum

Financial momentum is the tendency for assets that have been rising to continue rising and those that have been falling to continue falling. Often, during a strong momentum phase, the pace of buying or selling increases, resulting in parabolic price gains, as we are witnessing with Intel and its competitors.

When a stock trends higher, investors increasingly notice the bullish momentum and buy it, which pushes the price higher and attracts even more buyers. This type of herding behavior can create a self-reinforcing cycle- buying begets more buying.

When momentum is strong, the pressure on new investors to join the trade or on existing ones to add to their positions is enormous. As these investors focus on the incredible rewards they might receive, they often lose sight of the trade’s fundamental justification. The result is a crowded trade with sometimes breathtaking gains, but ultimately a sharp reversal that strips profits from most participants. 

Retail and institutional momentum traders often use call options as a leveraged way to participate in price gains without buying the stock outright. Call options provide investors with limited downside risk and the potential for upside gains that can be multiples of the underlying stock’s price. Call buying can become a momentum accelerant, as we explain next.

What Is Delta

To better appreciate how options, particularly calls, can boost stock prices, which in turn adds momentum and fuels the herding behavior of millions of investors, we need to understand some option basics.

We start with delta. Delta measures how much an option’s price changes for every $1 move in the underlying stock. For instance, a call option with a delta of 0.50 will gain roughly $0.50 in value for every $1.00 increase in the stock price. Importantly, delta changes as the stock price moves. As shown in the hypothetical graph below, delta rises as the option approaches its strike price and falls as it moves below it. The non-linear rate at which delta changes is called gamma.

Delta is affected not only by how far the stock price is from the option’s strike price but also by implied volatility and time to expiration. Other smaller factors include put/call skew, dividends, and interest rates.

Gamma

Gamma quantifies the curvature of delta (the green line in the graph above). It is the rate at which an option’s delta changes for every $1 move in the underlying stock. For example, if a call option has a delta of 0.50 and a gamma of 0.05, a $1 rise in the stock pushes the delta to 0.55, and another $1 gain pushes it to 0.60, and so on. Think of it this way: delta tells you how much the option price will move per change in the stock, while gamma tells you how fast that relationship will change.

Gamma is highest for options closest to expiration. Thus, the recent surge in the number of very short-term and same-day expiry options (0dte) is significantly impacting options brokers, as we will explain.

Delta Hedging Can Drive Momentum

When an investor buys a call option, someone must be selling it to them. Most often, market makers and brokers fill that role. Their financial interest in selling options is to make money regardless of what the option price does, not by taking the opposite position of the options buyer. They try to ensure profits by hedging. 

Brokers hedge exposure by buying or selling shares of the underlying stock in proportion to the option’s delta. This process is called delta hedging.

Assume a broker sells an investor a call option with a delta of 0.50. The dealer will buy 50 shares of the stock for each option sold. If the delta suddenly jumps to 0.60, the dealer will buy 10 more shares. If the stock falls and the delta declines, the dealer will sell shares.

In isolation, this is simple hedging management that often has little impact on the markets. But when the options market becomes large enough relative to the stock market, this constant hedging activity itself begins to move prices. As they say, the tail is wagging the dog.

The graph below shows a sharp increase in call option trading over the past few years, resulting in significantly higher hedge-trading volume among option brokers.

Gamma Squeezes

The growing volumes in the options market, along with the popularity of very short-term and even same-day options, are intensifying broker hedge trading. At times, this heightened activity results in what is called a gamma squeeze. This occurs when a surge in call option buying forces hedgers to purchase shares at an accelerating rate, pushing the stock price higher. That higher price, in turn, forces hedgers to buy even more shares, pushing the price higher still. This reflexive loop can have a short-term, tremendous impact on the underlying stock price.

The conditions for a gamma squeeze typically require a few ingredients:

• a stock with relatively thin float.

• large buildup of near-the-money call options with short expiries.

• enough momentum to start the feedback loop.

Avis (CAR) was the most recent example. CAR surged from roughly $150 in late March to nearly $850 in a matter of weeks before collapsing back to $150. Unlike semiconductor and hardware stocks, the gamma squeeze in CAR was more pronounced because its float was small and short interest was nearly 90%. That said, call option volumes spiked by roughly 10,000%, contributing to the surge in the stock price.

The Gamma Flip

If a gamma squeeze can set a stock price or market on fire, the gamma flip can pour water on it.

Dealers are never perfectly hedged. Thus, to quantify how their hedging activity might impact the market, it’s useful to know the degree to which they are over- or under-hedged. In market parlance, that is their net gamma position.

When dealers are net short gamma (they have sold more options than they have bought), they are forced to buy stocks when prices rise and sell when prices fall to stay hedged. Thus, when dealers collectively hold short-gamma positions, they have to chase the market; their hedging activities amplify price movements and volatility.

On the other hand, when dealers are net long gamma, the opposite occurs. They buy weakness and sell strength. Accordingly, these hedging activities serve as a natural market stabilizer, dampening volatility.

The gamma flip occurs at the price level where a dealer’s gamma exposure crosses from positive to negative territory, or vice versa. This level is calculated by options analytics firms and is increasingly closely watched by institutional traders. The gamma flip is something of an invisible gravitational boundary in the market.

The graph below, courtesy of Radar Options, shows that as of May 11, 2026, the S&P 500 Index is in a long-gamma position, supportive of an uptrend with reduced volatility. If it were to flip negative by falling below 7185, we should expect increased pressure for further downside and higher volatility.

Keep in mind the graph is for the S&P 500. Each individual stock has its own aggregate gamma exposure level, which can differ widely from the market.

Option Extremes Today

Dealer hedging is dynamic; thus, gamma exposure and flip levels are constantly in flux. The graph below, courtesy of ZeroHedge, shows that the volatility in dealers’ aggregate gamma positioning has been extreme recently. In just a six-week period, gamma exposure flipped from extremely short, which supported the rally from the late March lows, to one of the longest gamma positions on record.

The graphic below shows how extreme the rush into technology call options has been. The bottom-left graph shows that call skew on the Nasdaq (QQQ) is the highest it’s been in over the past year. Call skew measures the extent to which out-of-the-money calls trade at higher implied volatility than at-the-money calls. High skew reflects aggressive demand for upside calls, which drives up premiums on higher call strikes. High call skew is most common in individual momentum stocks and during gamma squeezes, when the options market prices in a higher probability of explosive upside than a normal distribution would suggest.

Bear in mind that the put skew is currently very low, signaling historically low demand for protection. 

Summary

Options were traditionally used for risk management purposes.  Yet their proliferation and widespread use by traders and gamblers have created a market structure that increasingly results in significant volatility and enormous price changes for entirely non-fundamental reasons. Thus, the risk management tool has become a market risk in and of itself.

As we have witnessed with CAR and are currently seeing with many technology stocks, a stock price can surge when a critical mass of investors generates a momentum signal, drawing in more investors and short-dated call buyers. Options brokers then feed the momentum as they are forced to buy as the stock price rises.

Similarly, as we also saw with CAR and will likely see with some semiconductor and hardware stocks, prices can drop sharply not because of fundamental developments, but simply because momentum gives way, gamma flips, and dealer hedging amplifies a modest decline into something more severe.

Sometimes stocks and markets completely ignore fundamentals and run higher on a self-reflexive loop. During these moments, prices get divorced from fundamentals, and individual stocks and/or markets can become fragile.

Tyler Durden Wed, 05/13/2026 - 14:45

Ex-Con Hacker Twins Fired - Proceed To Wipe Out 96 Government Databases In Minutes

Note to employers: When you discover your twin brother employees are ex-cons who did time for hacking into the US State Department, and go to fire them, make sure you fully disable their access. 

February 2025, twin brothers Muneeb and Sohaib Akhter turned a routine job termination into one of the most brazen insider sabotage incidents in recent U.S. government history. Just minutes after being fired from Opexus - a Washington, D.C.-area contractor that provides critical case-management software to more than 45 federal agencies - the brothers allegedly launched a rapid digital assault that deleted approximately 96 government databases containing sensitive FOIA records, investigative files, and taxpayer data.

Muneeb and Sohaib Akhter

What made the case especially shocking was the brothers' prior history: both had served prison time for hacking federal systems a decade earlier. 

A Decade-Old Criminal Record

The Akhter brothers, both 34 and from Alexandria, Virginia, had a criminal past that Opexus completely missed - which, given what they do, is not great. In 2015, while working as contractors, they pleaded guilty to conspiracy to commit wire fraud, conspiracy to access protected computers without authorization, and related charges. Their crimes involved hacking into U.S. State Department systems and a private company, stealing personal data on coworkers, acquaintances, and even a federal investigator.

Muneeb received a 39-month prison sentence; Sohaib received 24 months. Both served their time and were released.

And yet... 

By 2023-2024, the brothers had landed engineering roles at Opexus (formerly known as AINS), a firm specializing in FedRAMP-certified case-management platforms. Its flagship products - FOIAXpress and the eCASE suite - help agencies process Freedom of Information Act requests, audits, investigations, EEO complaints, and congressional correspondence. Opexus systems host sensitive government data on servers in Ashburn, Virginia.

The company conducted standard background checks covering roughly seven years - which missed the 2015 convictions. Opexus later admitted that "additional diligence should have been applied" and that the individuals responsible for hiring the twins are no longer with the company.

Unbeknownst to Opexus at the time of termination, the brothers had been abusing their access for weeks. Muneeb had collected approximately 5,400 usernames and passwords from the company's network and built custom scripts to test them against external sites (including Marriott and DocuSign). He successfully logged into accounts and, in some cases, used victims' airline miles.

On February 1, 2025 - more than two weeks before their firing - Muneeb asked Sohaib for the plaintext password of an individual who had filed a complaint through the EEOC Public Portal. Sohaib ran a database query and provided it; Muneeb then used the credentials to access the complainant's email without authorization. This incident later became central to Sohaib's password-trafficking charge.

The Firing and the 56-Minute Rampage

On February 18, 2025, the FDIC flagged Sohaib's prior conviction during a background check for a potential new role at the FDIC Office of Inspector General. Opexus fired both brothers during a remote Microsoft Teams/HR meeting that ended around 4:50-4:55 p.m.

The offboarding was flawed: Muneeb's account remained active. ARS Technica has the timeline:

At 4:56 pm, Muneeb accessed a US government database that his company maintained. He "issued commands to prevent other users from connecting or making changes to the database, and then issued a command to delete the database," the government said.

At 4:58 pm, he wiped out a Department of Homeland Security database using the command "DROP DATABASE dhsproddb."

At 4:59 pm, he asked an AI tool, "How do i clear system logs from SQL servers after deleting databases?" He later asked, "How do you clear all event and application logs from Microsoft windows server 2012?"

In the space of a single hour, Muneeb deleted around 96 databases with US government information. He downloaded 1,805 files belonging to the EEOC and stashed them on a USB drive, then grabbed federal tax information for at least 450 people.

The brothers discussed the attack in real time. Sohaib observed Muneeb "cleaning out their database backups." They even queried an AI tool on how to clear SQL server logs and Windows event logs. They later reinstalled the operating systems on their company laptops to destroy evidence.

And What Else Did They Do? 

Based on the court documents (Superseding Indictment + Muneeb Akhter’s detailed Statement of Facts from his April 2026 plea deal), the brothers were up to quite a lot of malarkey. 

Massive extra data haul (1.2 million lines): Muneeb didn’t just steal ~5,400 usernames/passwords from Opexus. He also possessed a separate file containing ~1.2 million lines of full names, email addresses, phone numbers, physical addresses, and password hashes. This was stored across his personal laptop, Android phone, external hard drive, and cloud accounts.

The credential abuse went on for 10 months after they were fired: The database deletions happened on Feb 18, 2025, but Muneeb kept actively using the stolen credentials from May 2025 all the way until his arrest on December 3, 2025. He wrote custom Python scripts (one literally named marriott_checker.py), ran credential-stuffing attacks on hotels, airlines, and banks, and successfully logged into hundreds of victims’ accounts.

Sophisticated account takeovers with his own domains: He didn’t just log in - he changed victims’ recovery email addresses on airline, hotel, and bank accounts to addresses he controlled, such as [VictimName]@wardensys.com or @wardensystems.com (domains he owned). This let him lock the real owners out and keep using the accounts.

Real-time blackmail brainstorming during the deletion rampage: At ~5:12 p.m. on Feb 18 - while Muneeb was still deleting databases - the brothers literally discussed blackmailing Opexus. Sohaib said something to the effect of: “you shoulda had a kill script, like, blackmailing them for some money…” Muneeb shot it down, replying that it would be obvious proof of guilt. They also argued about whether to contact customers.

“Clean stuff up from the other house”: During the same conversation, Sohaib said: “We also gotta clean stuff up from the other house, man.” This strongly implies they had evidence or stolen data at a second location.

Muneeb fled with a government-issued PIV card: When Muneeb drove to Texas on Feb 24, 2025, he took his personal laptop, phone, and a Personal Identity Verification (PIV) card issued by a U.S. government agency. (PIV cards are the high-security smart cards federal employees/contractors use for system access.)

Other smaller but wild nuggets

• A “co-conspirator” (identity not specified in the public docs) wiped both company laptops by reinstalling the OS on Feb 21–22.
• Muneeb used stolen American Airlines miles twice: 29,000 miles for a real flight he actually took (SLC → DC on Nov 29, 2025) and 14,500 miles for another ticket he booked but didn’t use.
• Muneeb had a separate aggravated identity theft count from August 2022 (pre-Opexus) involving someone’s passport and personal info.

Guns too!

A federal search warrant executed at Sohaib's Alexandria home on March 12, 2025, uncovered seven firearms (including M1 and M1A rifles, a Glenfield Model 60 .22 rifle, a Ruger .22 pistol, and a Colt .38 Special revolver) plus roughly 378 rounds of .30-caliber ammunition. Under Virginia law at the time, these guns and the ammunition were fully legal for a non-prohibited person to own - no assault-weapon ban, no magazine limits, no restrictions on the specific models. The only prohibition was Sohaib's status as a convicted felon, which made possession illegal under federal law (18 U.S.C. § 922(g)).

The brothers were arrested on December 3, 2025. Muneeb ultimately pleaded guilty to major charges, including computer fraud and destruction of records. Sohaib went to trial.

On May 7, 2026, a federal jury in Alexandria convicted Sohaib Akhter on three counts: conspiracy to commit computer fraud, password trafficking, and possession of a firearm by a prohibited person. He faces a maximum of 21 years in prison and is scheduled for sentencing on September 9, 2026. Muneeb faces additional charges and potential penalties up to 45 years.

So, whoops...

As an aside, remember when House Democrats let the Awan Brothers go hog wild in their network for 13 years, were fired for suspected unauthorized server access, procurement irregularities, and possible data exfiltration, and were one of them was able to plead guilty to one count of making a false statement on a loan application and sentenced to time served - only to then receive an $850,000 wrongful termination settlement by the five Pakistani-American tech workers involved in the saga? Crazy!

Tyler Durden Wed, 05/13/2026 - 14:30

Ugly, Tailing 30Y Auction Makes History With First 5%+ Yield Since The Great Quant Crash Of Aug 2007

Moments ago, the last refunding auction of the week, the sale of $25BN in 30Y paper, made history: it was the first 30Y auction to print with a high yield above 5%, and a coupon of 5%, since August 2007... which as veteran traders will recall was the month of the historic quant crash which marked the S&P highs at the time and eventually culminated in the global financial crisis. 

The auction priced at a high yield of 5.046%, up sharply from 4.876% in April, and tailed the 5.041% When Issued by 0.5bps, the second consecutive tail following 4 stop-throughs. 

But, as noted above, what is more notable was that this was the first 5% interest rate coupon 30Y auction, and the the first 30Y auction with a high yield above 5% since... August 2007 when surging rates sparked a quant crash. Come to think of it, unlike retail momentum chasers, quants have had a terrible month. How much longer can they last? But we digress... 

Going back to the auction, the uglyness was all around: the bid to cover was 2.303, down from 2.385, below the 2.43 six auction average and the lowest since Nob 2025.

Internals were not quite as bad, with Indirects taking down 66.6%, up from 64.1% in April and just below the 66.8% recent average. And with Directs awarded 21.74%, Dealers were left with 11.7%. 

Overall, this was an ugly, tailing auction, but the question on everyone's lips is whether today's quction will - like in August 2007 - be the VaR shock equivalent of a bond auction that pops this particular bubble. For the answer keep a close eye on quants who are suffering badly. 

Tyler Durden Wed, 05/13/2026 - 13:35

Imminent Supreme Court Rulings To Watch For

Authored by Sam Dorman via The Epoch Times (emphasis ours),

Birthright citizenship, girls sports, the definition of Election Day, and other hot-button topics are on the line in upcoming Supreme Court decisions.

Illustration by The Epoch Times, Madalina Kilroy/The Epoch Times

The court’s 2025–2026 term is expected to end in June with a series of rulings that could impact social issues and President Donald Trump’s agenda.

The last scheduled oral argument was held on April 29; the justices considered whether Trump wrongfully terminated deportation protections for thousands of Haitian and Syrian nationals. That decision and a ruling on Trump’s order restricting birthright citizenship could influence immigration policy for decades to come.

So far, the court has already issued opinions on Trump’s tariffs and redistricting. Its remaining decisions could change how elections are conducted, as well as alter the balance of power between Congress and the president.

Here are the main decisions expected before the end of June.

Birthright Citizenship

A key part of Trump’s immigration agenda has been his attempt to limit who receives American citizenship. The 14th Amendment states that “all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.”

Historically, the executive branch interpreted this amendment to grant citizenship to babies born to illegal immigrants. Trump changed this interpretation on his first day in office, passing an executive order stating that the amendment only applied to children who had at least one parent with citizenship or lawful permanent residency.

In Trump v. Barbara, the president asked the Supreme Court to intervene after a federal judge blocked his executive order. During oral argument on April 1, the Justice Department said that parents should be legal residents or have some kind of allegiance to the United States before their children receive citizenship. The justices, however, seemed skeptical and indicated they may view citizenship more broadly.

Migrants, including a pregnant Haitian woman seeking to give birth in the United States, are apprehended by a U.S. Border Patrol agent in Yuma, Ariz., on Dec. 7, 2021. The Supreme Court is expected to rule on the constitutionality of a Trump executive order aimed at restricting birthright citizenship before the end of June. John Moore/Getty Images Girls Sports

Another highly anticipated decision focuses on Idaho’s and West Virginia’s laws preventing males from participating in girls and women’s sports. Federal appeals courts blocked those laws, stating that they conflict with another portion of the 14th Amendment known as the equal protection clause. That clause generally prohibits laws that classify or discriminate on the basis of certain characteristics.

The appeals courts said the state laws conflict with that clause because they classify individuals on the basis of their sex and “transgender status.” The U.S. Court of Appeals for the Fourth Circuit also said West Virginia’s law violated Title IX of the Civil Rights Act. That law prohibits sex-based discrimination in federally funded education.

The justices heard oral argument in January for the cases, known as Little v. Hecox and West Virginia v. B.P.J. Overall, the justices seemed inclined to uphold the states’ laws.

People take part in a rally outside the U.S. Supreme Court as justices hear arguments in two cases in which states have banned males from participating in female-only sports in Washington on Jan. 13, 2025. Madalina Kilroy/The Epoch Times Monsanto’s Weedkiller

Monsanto’s herbicide, known as Roundup, has cost the company millions of dollars following lawsuits alleging one of its ingredients, glyphosate, increases cancer risk.

One of those lawsuits made it to the Supreme Court in April and could determine how much Monsanto has to pay in future lawsuits. The case, Monsanto v. Durnell, focused on a Missouri jury that held the company liable for not warning about glyphosate’s purported risks.

Monsanto told the Supreme Court that the jury’s verdict was based on a faulty interpretation of the law. The jury said Monsanto was liable under a Missouri law that requires warnings for consumer products. Monsanto argued that the jury interpreted the law in a way that conflicted with another law passed at the federal level.

The Supreme Court’s eventual decision is expected to touch on a legal doctrine known as preemption, which says that federal law takes precedence over state law when there is a conflict between the two. In this case, Monsanto said the Federal Insecticide, Fungicide, and Rodenticide Act should take precedence.

“The People vs. the Poison” protesters rallied to protest Bayer/Monsanto regarding cancer-linked risks from the Roundup weedkiller outside the U.S. Supreme Court in Washington on April 27, 2026. Tasos Katopodis/Getty Images

That law gives the U.S. Environmental Protection Agency authority to regulate chemicals such as glyphosate. Because the agency already approved glyphosate’s use and didn’t require additional warnings, Monsanto said Missouri couldn’t require more either. Durnell argued that the verdict didn’t conflict with federal law and that Missouri should be able to protect its citizens’ health.

Trump’s Ability to Fire Bureaucrats

One of the main legal complaints leveled during Trump’s second administration was that he fired high-level bureaucrats without good reason. Leaders of so-called “independent” agencies, such as the Federal Trade Commission (FTC), sued, alleging that Trump didn’t show the type of cause federal law required of presidents when firing officials.

In Trump v. Slaughter, Trump asked the Supreme Court to intervene after a lower court blocked his attempt to fire FTC Commissioner Rebecca Slaughter. The justices seemed inclined in December 2025 to not just allow her firing, but also expand the authority presidents have in removing bureaucrats like her.

Their eventual decision could overturn a 90-year-old precedent from Humphrey’s Executor v. United States. In that 1935 case, the Supreme Court held that former President Franklin D. Roosevelt wrongly fired a former FTC commissioner and that Congress could restrict his ability to do so.

The Trump administration argues that the Constitution gives the president greater authority and that Congress cannot use laws such as the FTC Act to restrict his ability to remove bureaucrats.

Then-Federal Trade Commissioner Rebecca Slaughter participates in a privacy roundtable at CES 2020 at the Las Vegas Convention Center in Las Vegas on Jan. 7, 2020. David Becker/Getty Images Fed Independence

Like the FTC Act, another law, known as the Federal Reserve Act, said presidents couldn’t remove high-level officials without cause. That was the law that Federal Reserve Governor Lisa Cook cited when she challenged Trump’s attempt to fire her last year.

Trump removed Cook while citing allegations that she committed mortgage fraud, something she has denied. During oral argument in January, the Supreme Court wrestled with multiple questions: whether Trump gave Cook enough due process before firing her, how the firing would impact the economy, and how Trump’s view of his authority would impact the Federal Reserve’s independence.

Overall, the justices seemed inclined to side with Cook. The case, Trump v. Cook, followed other decisions in which the Supreme Court suggested that the Federal Reserve was more independent than agencies such as the FTC and that its members therefore deserved additional protections.

Federal Reserve Board Governor Lisa Cook (R) arrives for a board meeting at the Federal Reserve building in Washington on March 19, 2026. Kevin Dietsch/Getty Images Definition of ‘Election Day’

The 2020 presidential election reinvigorated debate over mail-in ballots, a controversial method of voting that Trump and others argue is vulnerable to fraud. Multiple states, including Mississippi, have allowed mail-in ballots to be counted after Election Day as long as they are postmarked on or before that day.

Trump and the Republican National Committee argue that practice violates a federal law that defines Election Day as “the Tuesday next after the first Monday in November.”

When the case, Watson v. Republican National Committee, reached the Supreme Court, the Trump administration supported the committee’s position.

“‘Election day’ was the day all voting needed to be completed; and the act of voting was not complete until a ballot had been officially received,” the Justice Department told the court.

Mississippi argues the law simply requires that voters make their choice by Election Day, not that their ballots are counted.

Election officials count absentee ballots at a polling place located in the Town of Beloit fire station near Beloit, Wis., on Nov. 3, 2020. Scott Olson/Getty Images

During oral argument in March, the justices seemed more likely to side with the committee. “We’re moving in this direction,” Justice Samuel Alito said. “We don’t have Election Day anymore. We have election month or we have election months.”

Deportation Protections

The court’s most recent oral argument focused on the Department of Homeland Security’s termination of deportation protections for thousands of Haitians and Syrians. “Temporary protected status” prevents nationals of certain countries from being removed if conditions in their home countries would make returning unsafe.

Under President Barack Obama, the department granted that status for Haiti, which was impacted by the 2010 earthquake, and Syria, which has seen ongoing political turmoil and armed conflict.

Former Homeland Security Secretary Kristi Noem terminated those protections last year, prompting lawsuits and federal judges’ orders blocking those terminations.

The justices heard oral argument in the cases, known as Mullin v. Doe and Trump v. Miot, on April 29. They considered whether those judges exceeded their authority under the Immigration and Nationality Act, which generally prohibits judicial review of the department’s determinations about temporary protected status.

Guerline Jozef, co-founder and Executive Director of Haitian Bridge Alliance, speaks in front of the U.S. Supreme Court in Washington on March 16, 2026. The Court agreed on March 16 to consider the Trump administration’s bid to strip Haitians and Syrians of temporary deportation protections. The Department of Homeland Security has announced plans to end so-called Temporary Protected Status for some 350,000 Haitians and 6,000 Syrians. Roberto Schmidt/AFP via Getty Images

Lower court judges, however, said the administration still had to follow certain procedures, but that it didn’t when it terminated those protections. The justices also considered a federal judge’s argument that the administration likely acted with racial animus toward Haitians and therefore violated the Constitution.

Campaign Finance

How much protection does the First Amendment afford political parties when they spend money on campaigns? That’s one of the questions the Supreme Court is expected to address in a case called National Republican Senatorial Committee v. Federal Election Committee.

The case originated with a lawsuit brought by then-Senate candidate JD Vance, who argued that Congress violated the First Amendment with the Federal Election Campaign Act. That law restricts how much political parties and candidates’ campaigns can coordinate their spending.

The Supreme Court upheld that restriction in 2001 on the basis that coordination opened a backdoor for corruption. In its upcoming decision, the court could maintain its prior position or overrule itself while siding with Republicans.

Read the rest here...

Tyler Durden Wed, 05/13/2026 - 13:35

Up To $170 Billion Needed To Secure Full Domestic Nuclear Fuel Supply Chain

To support current commercial nuclear operations, plus 300 GW of new nuclear capacity for a total of roughly 400 GW by 2050, all fueled domestically, the country would need to invest between $105 billion and $170 billion across the entire nuclear fuel cycle.

Is it still called a bottleneck if the entire industry is the problem? 

The consulting firm McKinsey & Company used the most aspirational scenario from the Trump administration’s May 2025 executive orders as its benchmark for their recent report. That means rebuilding capacity from mining and milling through conversion, enrichment, fabrication, and even reprocessing.

It's looking more and more like the $2.7 billion award from the DOE for domestic enrichment barely scratches the surface:

• $15-20 billion for mining and milling
• $30-45 billion for conversion
• $30-40 billion for enrichment
• $10-20 billion for fabrication
• $20-45 billion for reprocessing

These figures assume a mix of new and existing reactors, including Gen IV designs that will demand high-assay low-enriched uranium (HALEU).

We have documented the vulnerabilities for months. Today the United States imports about 99 percent of the raw uranium ore needed for its commercial fleet… 

With milling capacity effectively nonexistent and conversion limited to a single operating facility… 

And enrichment capacity covers only about one-third of domestic needs…

The gaps leave utilities exposed to geopolitical risks and price volatility, a point we highlighted when uranium spot prices pulled back earlier this year even as long-term supply deficits widened…

Uranium: the next gold pic.twitter.com/2SSjvRkdSg

— zerohedge (@zerohedge) December 12, 2025

Progress is

Uranium: the next gold pic.twitter.com/2SSjvRkdSg

— zerohedge (@zerohedge) December 12, 2025 ">accelerating, however. We reported on the DOE’s Nuclear Fuel Cycle Defense Production Act Consortium, which has met repeatedly to map out a seven-year “Nuclear Dominance – 3 by 33” plan covering every link from mining to reprocessing. 

DOE has also awarded nearly $3 billion for enrichment projects, including $900 million each to Centrus Energy and General Matter, while the Export-Import Bank has backed up to $4.2 billion in additional financing. Centrus recently committed $560 million to scale centrifuge manufacturing in Oak Ridge, and we covered its joint-venture discussions with Oklo for HALEU deconversion services.

The private sector is also making progress on their own, not wanting to wait for the government to sort itself out and attempt to take market share while it's up for grabs. 

Uranium Energy Corp is expanding ISR mining and advancing conversion licensing. New entrants like FluxPoint Energy and LIS Technologies are targeting conversion and next-generation laser enrichment facilities, aiming for commercial operations before 2030. 

We also noted Goldman Sachs’ updates showing persistent supply-demand mismatches that continue to support higher uranium prices over the coming decades.

McKinsey stresses that capital alone will not suffice. Permitting reform, infrastructure build-out, workforce development, and advanced technologies will prove critical to compressing the long lead times inherent in fuel-cycle projects. The firm acknowledges 100% domestic sourcing will prove challenging, yet the analysis underscores that options exist if stakeholders maintain focus.
 

Tyler Durden Wed, 05/13/2026 - 13:00