This week, I speak with David Risher, CEO of Lyft, about his career path from Microsoft and Amazon to leading the ride-sharing platform. We discuss Lyft’s financial turnaround, cost-cutting measures, and strategies for expanding market share. Plus customer-centric features, the mechanics of ride data, and the decade-long transition toward autonomous vehicle networks.

A transcript of our conversation is below; His current reading is “Apple in China: The Capture of the World’s Greatest Company” by Patrick McGee, and “Good People: A Novel” by Patmeena Sabit.”

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube (video), YouTube (audio), and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Master’s in Business this weekend with McKeel Hagerty, CEO/Chairman of Hagerty Specialty Insurance. He transformed a family specialty-insurance agency into an enthusiast-driven platform focused on collectible cars, events, valuation data, and auctions. HGTY is now a public company that insures everything from classic cars to boats, trucks, tractors, and military vehicles for over 2.8M collectors.

 

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MASTERS IN BUSINESS An Interview with David Risher, CEO of Lyft
Hosted by Barry Ritholtz  ·  Bloomberg Radio

 

ANNOUNCER (00:00:02):  Bloomberg Audio Studios: podcasts, radio, news. This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

BARRY RITHOLTZ (00:00:16):  This week on the podcast — man, was this a fascinating conversation. David Risher has been CEO of Lyft for the past three years; he’s been on the board for the past five years. What a fascinating discussion about a company that is probably an app on your phone, and you may not be aware of all the different things they do — from bike share, to autonomous vehicles, to fleet management, and everything in between. I thought this was absolutely fascinating, and I think you will also. With no further ado, my conversation with Lyft’s CEO, David Risher.

DAVID RISHER (00:00:55):  Thank you, Barry. I am happy to be here.

BARRY RITHOLTZ (00:00:56):  I’m thrilled to have you. Before we start talking about your technology background, I gotta roll a little further back: a bachelor’s in comparative literature from Princeton. That doesn’t sound like the sort of career plan for someone who’s gonna work his way through technology companies. What was the original idea?

DAVID RISHER (00:01:16):  So this goes way back, and the funny thing is, it even goes to high school. My mother bought an Apple II computer a million years ago to help her run a small business, and I sort of got into technology that way. I will admit, part of it, I think, is I had terrible handwriting. And so when I used the computer to print out stuff for my high school English teacher, she could finally read what I was writing. It probably gave me a better grade as a result. So I sort of got into computers a little bit as a kid, ended up at Princeton, writing my thesis on a computer — again, this is a million years ago, when that wasn’t normal. And so I found myself just interested in technology, and after going to a consulting firm for a couple years to learn about the business world and going to business school, I found myself as an intern at Microsoft — again, back in 1990 — and the rest is sort of history.

BARRY RITHOLTZ (00:02:09):  So, Harvard Business School — we know what that typically leads to. I’m curious how the humanities background helped shape the way you think about business, about leadership, about working with people. What was the upside of humanities for you?

DAVID RISHER (00:02:26):  You know what, I really appreciate the question, and I actually think it’s more relevant now than ever. Look, the humanities is all about curiosity and understanding, and maybe even empathy, right? If you read a book, you have to understand — you’re exposed to different people’s perspectives. It’s almost like you’re crawling inside someone else’s brain, particularly if you’re reading fiction. And so, to a certain extent, I think nothing could prepare you better. Now, you have to have an analytical brain. You might also have to be good with numbers in business. But the humanities world — I sort of think of it as this kind of magic vaccination against irrelevance, because that curiosity is always gonna matter. And it certainly helped me through my whole career.

BARRY RITHOLTZ (00:03:05):  I love that answer. So you intern at Microsoft. You end up beginning your career there, where you helped to launch their first database product, Access. Tell us about that.

DAVID RISHER (00:03:17):  Sure. So Microsoft was famously ahead — or at least getting ahead, let’s say — with the launch of Windows, in word processing, in spreadsheets, of course. And again, this is sort of ancient business history, but it’s a fascinating tale of a technology shift, completely reshuffling the deck away from old companies like WordPerfect and Lotus 1-2-3. We don’t even know who those companies are anymore, because Microsoft took over that space. And it’s really because Windows shifted the platform — we might come back to that idea when we talk about autonomous cars. But they didn’t have a database, and that was sort of the third big product that a lot of companies wanted. I helped develop it; I was the first product manager on it. And really, all that meant is my job was to go around and watch other people use competing products at the time — Paradox, dBase, again, products that don’t even exist anymore — and try to pay attention to what they were doing with these products. How were they using them? Where were they stumbling? That was my first role. And in a sense, it has been one of the most important jobs I ever had, ’cause it’s what sort of taught me about understanding what customers want.

BARRY RITHOLTZ (00:04:17):  Huh, interesting. And then you founded Microsoft Investor and launched that product. That is so far afield from databases. What led to that transition?

DAVID RISHER (00:04:29):  Okay, so you’re making me realize that there’s a theme of my life I hadn’t really thought of before, which is platform shifts. So when I joined Microsoft, Windows was the product, right? This was the thing that was gonna run software, and of course it became incredibly successful. But then 1995, 1996, 1997 comes around — the internet is here. And Microsoft, like any tech company at the time, had to figure out its internet strategy. And it decided that there were a couple of key products that needed to be available on the World Wide Web. Actually, I think “the information superhighway” literally was the way people talked about it. It’s crazy. So —

BARRY RITHOLTZ (00:05:04):  Cliché. It’s amazing.

DAVID RISHER (00:05:05):  So cliché. But there it was — no one even knew how to talk about the thing. So anyway, I had been a little bit interested in personal finance, and a couple of threads came together. Microsoft tried to buy a company called Intuit — still very successful — and was unsuccessful, blocked because of the Justice Department. And so we decided we needed personal finance. And I said, you know what, why don’t we develop this product — a personal finance product — for the internet, not as packaged software.

BARRY RITHOLTZ (00:05:29):  Huh. Really, really interesting. And then, staying with the theme of platform shifts: employee number 37 at Amazon. That is just an absolutely bonkers number. Senior VP of US retail — when you joined the firm, revenue was $15 million. You helped ramp that up to $4 billion. Obvious question: when you joined Amazon, did you have any idea what the behemoth it would become? Or was it still, hey, we’re hanging on by our fingernails and maybe this’ll work out — or anywhere in between?

DAVID RISHER (00:06:07):  It was sort of both at the same time, and it was almost always gonna be one or the other, right? So I remember — I’ll tell you a little of the story of how I got there. My phone rings one day at Microsoft, and it’s this guy Jeff, and he’s doing a reference check of a woman who used to work, actually, at Microsoft in the personal finance group. So it all kind of connects. And so we get to talking, and one thing leads to another, and he is very precise about the way he’s asking questions. Remember, the company had maybe 10 people at this point. It was very, very small. But he had a big vision. You know, he was gonna be Earth’s biggest bookstore.

BARRY RITHOLTZ (00:06:42):  At the time — wait, hold on, let me just stop you. When you say “this guy, Jeff” — this isn’t just some guy in HR. Jeff Bezos is calling you to do a background check on a potential hire.

DAVID RISHER (00:06:55):  Exactly.

BARRY RITHOLTZ (00:06:56):  So go on — Jeff calls.

DAVID RISHER (00:06:58):  So Jeff calls me, and literally, at the time, he was just this guy, Jeff.

BARRY RITHOLTZ (00:07:02):  “Hey David, some guy named Jeff on the phone. Pretty much a background check for an employee.” So what was that conversation like?

DAVID RISHER (00:07:09):  Well, he had — to take you back then, but in a sense it’s still the Jeff of today — he had a plan, and it was a 25-question plan for the phone call, right? And to this day, the question I remember the most clearly was: “It’s very clear you are a fan of this person — give me an example of a job that she wouldn’t be a good fit for.” And it was such a clever question, because inevitably in background checks, you’re trying to say nice things about the person, right? But this is an invitation to say, well, you know, maybe a very detail-oriented job might not be the best fit. Or maybe something that manages a lot of people. It’s something like this that would give him some sense of where an area to probe more is. Anyway, at the end of that conversation — literally 45 minutes into it — he says, you know, you sound like a good guy. I said, oh, you sound like a good guy as well. And so a couple days later, he and MacKenzie, his wife at the time, and Jen, my wife currently still, and I went out to dinner, got to know each other, and over the course of the next year, got to know each other a little bit better. And then I ended up applying for this job to help Amazon grow beyond just books. That was really the job.

BARRY RITHOLTZ (00:08:16):  And how’d that work out?

DAVID RISHER (00:08:18):  It worked out pretty well. But you know what, it wasn’t obvious at the time. During the interview, I remember he said — look, if we play our cards right — and as you say, it was a $15.6 million store at the time, so tiny, tiny little thing — he said, if we play our cards right, maybe by the year 2000 — this is in 1996 — we might be a billion-dollar company. Maybe, maybe. But a lot has to go right in order for that to happen. Obviously we got there, and then we got, you know, far beyond. But there were all kinds of people who frankly were sort of rooting for our failure — competitors, Barnes & Noble at the time, a bunch of Wall Street analysts who thought this was just some sort of crazy Ponzi scheme, whatever.

BARRY RITHOLTZ (00:08:56):  It was, “No one’s gonna buy anything on the internet. What are you guys doing? This is a dumb idea.”

DAVID RISHER (00:09:00):  Totally, totally. Well, and not only that, but also: the costs are gonna be huge. You’re gonna have to build out these distribution centers and warehouses. The internet is unproven technology. All sorts of things that just —

BARRY RITHOLTZ (00:09:12):  No one’s giving you a credit card over the internet, correct?

DAVID RISHER (00:09:14):  Correct. Who’s gonna trust you?

BARRY RITHOLTZ (00:09:15):  I remember getting an Amazon gift certificate from my college roommate — this was decades ago, right after Amazon formed. And the first time you go through the experience of buying something, it’s like, oh, this makes perfect sense. I don’t have to go to the store, I don’t have to waste time. This is great. I mean, there are certain stores that are fun to browse, but for the mundane sort of stuff, he was just decades ahead of everybody else.

DAVID RISHER (00:09:46):  In that way — and in realizing that it’s really the customer experience and customer obsession that’s gonna drive your continued growth. Because all those things are true. And as he would say, famously, you’re always one click away from competition. So that’s the downside, right? How do you continue to compete in a world where theoretically someone else could start, and someone else could start, and someone else could start — and you don’t have any geographic advantage over them?

BARRY RITHOLTZ (00:10:09):  And they kind of owned that space for the longest time. Really, it was only the pandemic, when people were outta things, that forced everybody: all right, now I have a Target account, now I have a Walmart account, now anybody else who could deliver. And what’s been surprising is how they’ve just powered right through. Hasn’t really slowed him down very much.

DAVID RISHER (00:10:27):  That’s right. That’s right.

BARRY RITHOLTZ (00:10:31):  So you go from Amazon — you kind of tap out a couple of years later. You teach at the University of Washington’s business school; you were elected Professor of the Year in 2004. And then you spend 13 years running Worldreader, a nonprofit dedicated to helping children learn to read in underserved communities. This is yet another pivot — platform shift, right? What was it? Just like, all right, I have my Microsoft stock came in, Amazon recovered from the dot-com implosion, that’s doing fine — I could just do something for fun? What was the thinking behind the shift?

DAVID RISHER (00:11:11):  No, it wasn’t that, actually — it was sort of a different thing. So you asked me a couple questions ago what my career idea was as a kid. Honestly, if I had had to guess, I might have said, you know, maybe I’ll be an English professor someday, or something like that. I’d wanted to teach, and I loved reading. And so this was a way for me to bring together a couple of different things in my life — obviously books and literacy, ’cause that was sort of the passion and focus, but also technology. The thesis of the company was: kids are gonna read using tech. And that’s how it’s gotten to be — millions and millions of kids later are all reading on the platform. It started out with Kindle, a product I know something about because of my Amazon days, and brought sort of technology and reading together. So that was really the focus.

BARRY RITHOLTZ (00:11:53):  And then what ultimately ended up bringing you back into the corporate sector, after a long time in academia and nonprofits?

DAVID RISHER (00:12:01):  Yeah. So here it was — one day my phone rings, and a guy named Sean Aggarwal is on the other end of the line. Sean and I had worked together many years before, back at Amazon. He was my kind of finance partner. He had subsequently become an investor and then the board chair of Lyft. And he and John and Logan, the co-founders of Lyft, really were looking to do something quite unusual at the board level, which was: bring someone in who is a real customer advocate. So boards — for those of you who haven’t gotten a chance to be exposed to a board — typically are made up of kind of finance people, business strategists, maybe people who’ve built companies before. But often, by the time you get to sort of the board level of a company, you’re pretty far away from the customer. And John and Logan, again to their credit, said, you know what? We need some more customer advocacy right from the top. We need some more support, frankly, for that kind of vibe, as well as someone who’d helped scale a company like Amazon. You know, I also learned a lot about competing at Microsoft, and even at Worldreader — nonprofits, people sort of look at them and think they’re not very much, but it’s very, very difficult to actually scale a nonprofit, because the funding is always tight and so forth. So I think they were looking for someone with a combination of scaling experience but also real customer advocacy. And so I joined the board as a result.

BARRY RITHOLTZ (00:13:18):  And then eventually, a couple of years later, you get offered the role of CEO. What was that like? How did that come about? Infrequently do board members become CEOs.

DAVID RISHER (00:13:36):  So, funnily enough — and this one I’ll sort of slow the story down again, because it actually was Sean Aggarwal again, same board chair — he calls me up. It happened to be on Valentine’s Day, of all days, so I remember the day, in 2023. And the backstory here is John and Logan, again, the co-founders of Lyft — this is what they had been doing for 15 years nonstop. It was literally their first job outta college: founding this whole new company, withstanding the onslaught of an incredibly competitive environment, an incredibly operationally complex environment, 24 hours a day, seven days a week, for year after year. So at the end of the prior year, they said to the board, you know what, it’s time for us to move on. We’ve sort of done what we need to do. And frankly, the company was going through a bit of a tough time financially and operationally, and I think they realized that they were sort of getting to the end of where they could really help. So the board did what it does — boards do this — they form a special committee, they start to recruit, look around. I wasn’t on the committee; I was sort of watching from the side. But, as they say, then my phone rings one day, and it’s Sean on the phone with John and Logan, and they basically say: you know what we’ve been thinking? As we’ve been looking at external people, frankly, we think we might have the right person to at least apply for the job — let’s be clear, apply for the job — sitting right here, you know, on the board. And I said, what are you talking about? They said, we’re talking about you, David. I said, absolutely not.

BARRY RITHOLTZ (00:14:56):  Really — your first reaction was, hey, thanks, but no thanks?

DAVID RISHER (00:14:58):  Zero percent chance. I literally said, you should hang up the phone right now, because you’ve got better things to do. There’s just no way. But you know what? As the day wore on, I found myself saying, you know what, this is a really interesting opportunity. How many people get this opportunity? To run a — and I’d never run a public company before. I mean, my God. But at the same time, I had learned some things at Microsoft. I’d learned some things at Amazon. I learned some things at Worldreader. I learned some things in various different ways in my life. And I had a lot of passion for the company, having been on the board — and also a real understanding that as a board member, you really only have so much power and influence. It’s fairly limited. But as a CEO, it’s a different thing. So anyway, one thing led to another. I applied, and went through kind of a harrowing experience, but ended up getting the job.

BARRY RITHOLTZ (00:15:40):  Huh — really, really fascinating. So, we mentioned earlier: you joined the board in 2021, you’re named CEO in 2023. When you joined the company, they were still reeling from the pandemic and all the factors that drove the company — losing not only money, but also losing market share to their big competitor, Uber. What did you find when you looked under the hood? What surprises were awaiting you as CEO?

DAVID RISHER (00:16:11):  So the first, maybe, meta-observation — and you’re teeing it up — is: gosh, you’re on the board of a company for a couple years, you kind of think you know the company. You don’t really know the company. I mean, if any board members are out there, you think you do, and you probably have a pretty good sense of certain things, but you get in there and everything is 10 times bigger, worse, better — all the things. Then you realize: okay, what did I see? I saw a company that had some real innovative spirit at its core. Remember, Lyft was actually the one that really revolutionized rideshare. So the other guys, they came up with a sort of black-car concept — you know, black car on an app — but it was really Lyft that said, you know what, it can be anyone with a Prius. You know what I mean? Anyone can pick up. So this company had innovated from the early days, but honestly, its innovative spirit had maybe gotten a little the best of it. Tried a few too many things, spread a little too thin, losing share. And its core business, as you say — not priced well, not paying competitively. So a number of different, just basic issues. So what do we do the first, frankly, couple of weeks? Well, first thing is lower prices. We were just priced too high.

BARRY RITHOLTZ (00:17:15):  Did you do big announcements around that? Because I don’t — 2023 is still kind of a blur to me.

DAVID RISHER (00:17:20):  So we didn’t, and here’s why. In order to withstand a price drop — because it’s a very competitive business and you’re doing a lot of volume — if you drop your price, you gotta make sure you can pay for it. We had to do some other things as well. So, for example, we had to reduce our costs significantly. So we laid off — it was about a third of the company. And yeah, 26%, actually, of the company, now I think about it.

BARRY RITHOLTZ (00:17:41):  Wow.

DAVID RISHER (00:17:45):  $330 million of savings. That was a very, very significant shock to the company, by the way. We also had to raise driver pay. So we had a lot to pay for.

BARRY RITHOLTZ (00:17:53):  So wait — you’re simultaneously lowering prices for Lyft riders and yet bumping up pay for drivers. That sounds like that’s gonna cause a big problem for profits.

DAVID RISHER (00:18:03):  So that’s exactly right. So in order to pay for it, you have to figure out how to pay for it. And frankly, our cost structure was just sort of outta control. We were doing too many things. We had too many people — and by the way, those people were all working remotely, which makes it quite difficult to really kind of change the culture to a customer-obsessed culture, which was my other big thing. And by the way, we were also overpaying in stock-based compensation, which was bugging investors. So in the first couple of months, it wasn’t really the time to be bragging. It was the time, frankly, to be saying, okay, we’ve got some things to fix, and let’s really focus on that. So first — call it thirty, sixty, ninety days — it’s fixing some basics, but also reorienting the company back towards its customer-obsessed roots. And I’m still very — I guess I’d say proud of this: the first meeting I had of the day was literally getting my computer and my laptop, and the second meeting, 10 o’clock in the morning, Monday morning, I said, let’s start talking about a product that’s now called Women+ Connect — trying to get women drivers and women riders —

BARRY RITHOLTZ (00:19:02):  Such a great idea, especially given the mayhem across the street from you.

DAVID RISHER (00:19:06):  I appreciate you saying that. And it really matters. And this is something the company —

BARRY RITHOLTZ (00:19:11):  And I’m sorry to interrupt, please — it’s very visible on the app, that choice, which shows some thoughtfulness. And, oh, there’s this problem — how about we send a woman driver for you, and you don’t have to worry about what you’re hearing about elsewhere. Exactly. It just makes so much sense.

DAVID RISHER (00:19:28):  I really appreciate you saying that. It was an easy decision in that sense. All you have to do is talk to 10 women and say, well, what are you thinking? And they say, well, gosh, particularly late at night, maybe in a new city, maybe I’ve had a long day — it’s just not my jam to be talking to a dude. Right? It’s all right, dudes, you know — like that. But sometimes the easiest ideas are also the most complicated. There are all sorts of potential legal issues, all sorts of operational issues. There are even, to a certain extent, cultural issues of, like, is this gonna be okay? But I was like, you know what? I think it’s gonna be okay. I think it’s gonna be okay. So that was an early decision we made. It came out — that was in April of 2023 — we launched that later that year. And it was really exciting for the company to say, you know what, we can do big things again, and we can start to innovate again on behalf of customers.

BARRY RITHOLTZ (00:20:09):  Huh — kind of fascinating. Coming up: we continue our conversation with David Risher, CEO of Lyft, discussing the future of rideshare technology. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

BARRY RITHOLTZ (00:20:21):  I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My special guest this week is David Risher. He is the CEO of Lyft, one of North America’s largest and fastest-growing ride-sharing networks. So over the next year or so, you return Lyft to profitability. In the most recent reported quarter — first quarter 2026 — over 28 million active riders, nearly $5 billion in gross bookings, $1.7 billion in revenues, just about $133 million in EBITDA profits. So the combination of restructuring the company, attracting — paying more — drivers, and discounting prices for riders puts you on the right foot. How do you build on that? What’s the next step to maintain that momentum?

DAVID RISHER (00:21:25):  Well, so in some sense, nothing changes, and in some sense, everything changes, okay? So what doesn’t change: customer obsession is still driving profitable growth. That’s just gonna be a theme I go with forever. You know, maybe I’ve drunk a lot of the Jeff Bezos Kool-Aid, but it seems to be working out pretty well. So one other financial metric that has been interesting to watch: when I joined, we were losing about $300 million — consuming about $300 million in cash — over 12 months. We’re now generating about $1.1 billion in cash over 12 months.

BARRY RITHOLTZ (00:21:53):  Okay. So what that allows you to do is invest in the future. What does that look like?

DAVID RISHER (00:21:58):  Certainly it looks like international expansion. So that’s been one thing we’ve been at for about the last year. Lyft was sort of — I almost say caught a little bit in a US-centric view of the world. And it just doesn’t make sense: once you have a product that scales really well, and is sort of a fixed-cost-based type of thing, you really want it to be around as much of the world as possible, so you can run as much volume through that platform as possible. So we bought a company called FREENOW last year. It’s a European taxi aggregator —

BARRY RITHOLTZ (00:22:28):  FREENOW?

DAVID RISHER (00:22:29):  FREENOW. Yeah. It is Europe’s biggest taxi aggregator, which means that if you want a taxi and you’re in a place like Barcelona or London — pick your favorite city; they operate in nine countries — the FREENOW app is gonna be your best way to get it. That gives us a great platform for expansion, even when it comes to autonomous vehicles — we’ll come back to that, I’m sure, in a couple seconds. So that’s one direction of expansion. You think of that as out — overseas. Another dimension is up — upmarket. You just kind of referred to this. So Lyft, again — it sort of started, its tradition was, as kind of a relatively inexpensive, very available rideshare option, but it wasn’t as strong in kind of the black, you know, kind of luxury segment. We bought a company called TBR last year. TBR is a high-end chauffeur company. We also have a very, very good Lyft Black product. In fact, if you’re listening to this, I promise: if you haven’t tried it, give it a try. I think you’ll like it. It’s actually our highest-rated product. You know, a nice black car comes and picks you up. So that’s another area of expansion for us, because that gives us, frankly, more margin to play with, but it also allows us to talk to a segment that we haven’t talked to very much. And then, of course, autonomous vehicles. So these are all nice uses of cash. Once you’re generating cash, you can start to either acquire companies, or you can invest in things that then grow — build sort of the next chapter of growth.

BARRY RITHOLTZ (00:23:44):  So I appreciate you mentioning the various tiers. There’s this tendency to think of the consumer — especially the American consumer — as one thing, but we both know that’s not true. You get to crunch a whole lot of data. What are you seeing in terms of income, geography, various times of day? Like, what do the metrics tell you about the different flavors of consumers using Lyft?

DAVID RISHER (00:24:11):  Yeah, this is such an interesting issue, and it’s not something I really appreciated. You know, we are gonna do about a billion rides this year, and so, to your point, with a billion rides, you kind of get a sense of how people are spending their time during the day. So I’ll tell you two things that are growing quite quickly. One is party time. And it might be funny to start there, but party time — I should say what that means. What that means is a Thursday night, really Friday night and Saturday night, call it nine and midnight. And it is really interesting — I think this is not just post-COVID, but I think, frankly, a little bit of app fatigue is driving people to say, you know what? Let’s actually get out and spend our lives out in the real world, instead of spending all of our lives on apps. So I think that’s — actually, I’m quite comforted by that. And it’s actually a big part of our sort of overall purpose, which is to serve and connect people. I’m a lot passionate about that. At the same time, commute as well. And I do think this is a certain post-COVID thing, where people were sort of thinking, maybe we’ll just be in our houses the rest of our life, working remotely. It turns out a lot of companies and a lot of people are saying, I wanna get back to work. And I think these things are somewhat connected — and sorry for sounding a little bit like a social psychologist a little bit, but I mean, gosh, I met my wife at Microsoft. A lot of people have really significant life events that happen at work that are not just work, right? And so I think there’s a little bit of that. So anyway, when I look at things like commute hours — and then travel continues to be really strong as well. And this is — look, I’m a million years old now. When I was a kid, the idea of getting on a plane and going overseas — I mean, you might as well say go to the moon. Now, 20- and 30-year-olds are like, yeah, I’ll sort of take a trip overseas, or I’ll go to, you know, whatever — Nashville for the weekend, or something. So anyway, I think these are pretty big, real societal shifts, as people want to kind of be out in the real world.

BARRY RITHOLTZ (00:25:51):  I’m kind of fascinated by the idea of party time, ’cause pre ride apps, there was always the question: all right, I’ve had two, I guess I’m driving tonight, so I gotta stop here. But if you’re out on party night and you know you’re taking a car home, you are not afraid about having a second or third drink. You can kind of relax a little bit. Getting pulled over is not a problem if you’re in somebody else’s Lyft.

DAVID RISHER (00:26:19):  It’s exactly right. So again, if you zoom out — you know, Wall Street looks at companies like ours quarter by quarter, and it sort of drives you crazy. But if you zoom way, way out, let’s look at that from a different dimension. Now, average car right now: 50,000 bucks. Okay? Average monthly payment: 800 bucks. Insurance will cost you another couple hundred bucks. Gas might cost you another hundred bucks or so, at least now. And then service will cost a little bit more than that. Okay? So that’s plan A. And by the way, if you take on all that responsibility, there’s no texting and there’s no drinking. You know what I mean? Now, plan B: pay 20 bucks getting a Lyft. Someone else does the driving. Text to your heart’s content, drink as much as you want — if that’s your jam. And it’s 20 bucks, not 800 bucks times, you know, plus, plus, plus. So just looking out — again, you’re sort of asking about kind of segments, and sort of, maybe, a little bit, the role of technology in society. I still think we’re actually at the beginning stages of a lot of these changes. And sometimes, again, people who have been around for a while don’t even realize how much the world has changed in that way.

BARRY RITHOLTZ (00:27:21):  Yeah. Fascinating data point I saw — it was actually a couple of years ago — the number of kids under 19 that haven’t gotten a driver’s license. When I was growing up, you couldn’t wait to get your driver’s license, ’cause that meant freedom. There wasn’t an internet. There were three channels, plus some people started getting cable. Like, it was a very different world back then. That’s right. And now it’s like, yeah, maybe I’ll get a license, maybe I won’t. How do you think about marketing to that demographic?

DAVID RISHER (00:27:51):  Well, so one of the things I learned from Jeff — again, who’s, as you can imagine, quite an influential boss for me — is: build your businesses on things that don’t tend to change. Not things that are sort of ephemeral. So what are some things that aren’t gonna change? Okay — again, people are gonna want to get out, either to the doctor or to go to a bar. So that’s a good bet. People are also gonna want to save money. And so a lot of our focus right now — and you’re gonna start to see a lot of marketing around this — is: save money, check Lyft. Now, I wanna be super clear here. It’s not — if I look at the competitor — that we always have a better price. Of course we try to, but we don’t always; sometimes, you know, all sorts of things happen. But over time, if you check both apps, you’re gonna save some money. And certainly, compared to buying a car of your own and dealing with all the maintenance, you’re gonna save some money. So it’s not the only thing I wanna say, but I actually think it’s an important thing to say — particularly in a world of sort of some economic instability — this is a good way for you to save some money. And frankly, I’m proud of our cost position, and I’m proud of our ability to offer a great price every single day, you know, a billion times a year.

BARRY RITHOLTZ (00:28:54):  So let’s talk about you versus your competitor. Lyft has always been framed as sort of the underdog to Uber. Is this kind of a Coke and Pepsi story? What are the advantages of being number two? Remember the old — was it Avis? We’re number two, we have to try harder.

DAVID RISHER (00:29:13):  Absolutely. So I like being number two, and it’s maybe a funny thing to say, but I do think it means you try harder. You wake up every single morning and you say, I got one job, which is to, frankly, do a great job for my riders and my drivers, such that maybe over time I can overtake the other guys. I guess the way to think about that is: I think the right number of rideshare companies in most markets is probably two. It’s a capital-intensive business — not because you own the cars, but because you own a lot of server capacity, and it’s quite complicated to figure out pickup and drop-off locations, and customer service — people leave their phones in the car about 8,000 times a week. It’s just all sorts of —

BARRY RITHOLTZ (00:29:56):  Especially Friday party night.

DAVID RISHER (00:29:58):  Right — and there you go. It all kind of comes together. There is something to that. And by the way, we have really cool innovation coming out there — we’ll bring your phone back to you automatically. But that’s a separate story. But anyway, so in a funny way, it’s not a bad thing to be in sort of a two-player position, ’cause you really only have one competitor. And frankly, if you spend too much of your time thinking about that one competitor, you’re probably losing the script. Because guess what? There are a lot of rides that people aren’t even taking on rideshare at all. Okay? So, you know, back to this question — we’re a customer-obsessed company, and this is gonna be the thing. This is why we’re growing, you know, mid double digits — 15 to 20% year on year. It’s why we’ve become profitable. It’s why we’re spinning off cash. And I think that is a good place to be. Particularly when I look at the other guys, who I tend to think of, frankly, as more — I’ll call them sort of financially and maybe technologically driven. Maybe — I don’t know exactly how they describe themselves — but I don’t get the customer-obsessed vibe.

BARRY RITHOLTZ (00:30:52):  Huh — so that’s kind of interesting. Let’s talk about an example where there’s no customer-obsessed vibe. So I use Lyft, I use Uber. It feels like on Uber, the way it measures time is sort of an alternative reality. Hey, we’ll find a driver in three minutes — it takes nine minutes. Hey, the car will be here in 11 minutes — it’s there in 23 minutes. Like, the app is very full of BS. It consistently lies. I’m curious: is it just a logistical issue that everybody has to deal with? Or — and we know a lot about the history and culture of your biggest competitor — is this a culture problem? You know, their history has a lot of bad behavior, a lot of, let’s just call it questionable legality. I wouldn’t go so far as to say fraud, but they did a lot of bad things. Does that show up in how the app behaves? Or is this just, no, Google Maps is tough to work with, this is a logistical challenge?

DAVID RISHER (00:32:00):  No, it is a logistical challenge. But — look, I’m not gonna characterize you; you did a marvelous job characterizing them. Skirting —

BARRY RITHOLTZ (00:32:09):  I got nothing — no liability for slander there.

DAVID RISHER (00:32:12):  There we go. Fantastic. Exactly. So Barry’s got a whole second — hold on, well, you were a lawyer, right?

BARRY RITHOLTZ (00:32:16):  Yes, that’s correct.

DAVID RISHER (00:32:17):  Oh, there we go.

BARRY RITHOLTZ (00:32:18):  Okay, but I’m recovered, so —

DAVID RISHER (00:32:20):  It’s not the same. I understand — recovered lawyer — but you did just hear a lawyer very carefully parse his words. Okay, listen, I won’t comment on that. What I will say is: we are very focused — for example, you’re talking about reliability. Oh my goodness. You talk to my team, and they will — they roll their eyes, maybe, would be one way to say it. But the number of times I talk about reliability internally is high, because I am obsessed by saying: if we’re gonna make a promise, we’re gonna meet the promise. And starting in a couple weeks, we’re actually starting to do some more work to actually surface that promise, even a little bit more visibly. We do it today for airport pickups. If we’re more than 10 minutes late for an airport pickup, we pay you up to a hundred bucks, no questions asked.

BARRY RITHOLTZ (00:32:54):  Really?

DAVID RISHER (00:32:55):  Yep. And we rarely have to do that. Our reliability rate is above 99% for scheduled airport pickups.

BARRY RITHOLTZ (00:32:58):  Wow.

DAVID RISHER (00:33:00):  So we’re very, very focused on that. You know, I will say — look, at business school, there’s a very famous class which has a weird technical name, but it’s basically about incentives and behavior —

BARRY RITHOLTZ (00:33:13):  What’s the name of the class?

DAVID RISHER (00:33:15):  So I was in school a long time ago — I think it’s called CCMO, and I don’t even remember what it stands for anymore. It’s probably called something different today. But it really is about how incentives drive behavior — financial incentives and other incentives, and incentive alignment, and so forth and so on. There is an incentive in the sort of on-demand app world not always to be truthful. Because if you overpromise something, and then you kind of hook a person in — what are they gonna do? If they cancel or whatever, it’s just gonna take them more time. And that is an evil and pernicious problem that is kind of baked into the model. And we just reject it wholeheartedly. Doesn’t mean we never make a mistake. But if your car shows up later than we estimated, it’s because we made a mistake, and we are trying over and over and over and over again to eliminate those — they’re defects — and then start to guarantee it over time.

BARRY RITHOLTZ (00:34:13):  So you are crunching a lot of numbers; you’re seeing a lot of data in real time. I’m kind of fascinated by the concept of what, at Lyft HQ, the dashboard looks like. What sort of data are you watching constantly? What’s the most surprising set of numbers or charts that come across that?

DAVID RISHER (00:34:34):  Yeah, this is a great question. I mean, so the answer, first — just to validate the premise — is: absolutely, an enormous amount of real-time data. You know, two to three million rides every single day, and now worldwide. So we’re very active, and in fact, we have whole cool maps that show simulations of behavior, particularly around storms and all sorts of crazy times. Anyway, back to your question. Look, there are a couple of metrics that I think might surprise you that we pay as much attention to as we do. And I’ll give you a very specific one, ’cause it kind of helps tell the story. When I joined, about 15% of the time, drivers would cancel on you. Now, this is infuriating.

BARRY RITHOLTZ (00:35:08):  Really? That high? I mean, every now and then on your competitor I’ll see a cancellation, but typically it’s rush hour. Someone’s stuck on the other side of the city; they’re not gonna make it. So rather than get that ding, they just cancel and find someone by them.

DAVID RISHER (00:35:24):  So in today’s world, it is less than 4.5% on our app. So we’ve brought it down by a factor of —

BARRY RITHOLTZ (00:35:31):  Three.

DAVID RISHER (00:35:31):  Yeah, exactly — slightly less than that, actually, but around that. So how have we done that? Well, it’s not just that they’re on the other side of town. It’s maybe we didn’t give them enough information right up front — so, for example, how much they’re gonna make, or what neighborhood they’re gonna drop you off in, maybe. And by “not enough information” — maybe we gave it to ’em, but the font was a little bit too small for them to see it. Right? Or maybe it wasn’t on the screen quite long enough. Or maybe we gave you a ride that we didn’t know was very, very unlikely for you to want, because of your past history or whatever. So now we spend a lot of energy — and we’ve just been grinding away this year, after year, after year, because it’s so infuriating to riders. That’s an example of a sort of specific metric that we’re looking at, you know, by the day.

BARRY RITHOLTZ (00:36:23):  Huh — really, really interesting. Two kind of related questions to the growth of Lyft. Your last quarter’s earnings call, you said — or maybe it was a previous one — 27% of North American rides are linked to a corporate partnership. Chase, DoorDash, United, Hilton, et cetera. What is that strategy? Is that about customer acquisition? Margin? Like, what goes into those sort of big partnerships?

DAVID RISHER (00:36:51):  Sure. So, you know, as you say, we have tens of millions of people who use our service every quarter — it’s about 50 million a year. And again, this is back to sort of the Amazon philosophy: you gotta compete for those customers, right? You gotta compete because, you know, they have alternatives. And in fact, there’s another company out there that some people know. Okay? So one of the ways you compete is you say, gosh, it’s not just about the ride — it’s about the relationship. And maybe it’s a relationship you already have with another company. So you mentioned United Airlines. United Airlines has now been a partner of ours for about the last six months. It’s been a wonderful partnership already, because the United Airlines MileagePlus program is incredibly well built out. People are very, very loyal to it. What can you do on Lyft? You can now earn miles so that you can take a vacation —

BARRY RITHOLTZ (00:37:38):  Same with Hilton Honors.

DAVID RISHER (00:37:39):  And same with Hilton Honors — exactly right there. We’ve been a partner for many, many years. The big innovation on the MileagePlus side is you can actually spend your miles on Lyft as well, which almost feels like free rides, right? That’s right — it’s just like, you get, you know, 200 miles or 500 miles, whatever, for taking an airline trip, and you spend a small segment of those on a Lyft ride. So these partnerships — you sort of asked what the method behind it is — it’s about customer acquisition, for sure, but it’s also about customer retention, you know? ‘Cause if you’re in the United ecosystem, or on the DoorDash side, or Hilton, or Alaska Airlines, or Chase — built primarily here in New York City and other cities where they’re active — and you want to either earn or burn miles or points, we’re a great place to do that.

BARRY RITHOLTZ (00:38:22):  Really, really kind of interesting. I read an article from Reuters: smaller US markets and college towns have been meaningful growth drivers. Curious why those markets were underpenetrated. What did you guys figure out there?

DAVID RISHER (00:38:37):  So part of it — there has been just a little bit of, you might say, neglect from the rideshare business for a while. And we realized about 18 months ago that a large part of the TAM — just to frame this again, total —

BARRY RITHOLTZ (00:38:51):  Addressable market.

DAVID RISHER (00:38:52):  Exactly — is more market. About 160 billion rides a year that people take in their private cars across the United States. 160 billion. And remember, we do a billion; the other guys might do three or four billion — maybe two or three billion. So four billion outta 160 billion. Okay? So there’s a lot of addressable market left for us to go to. And we’ve been in places like New York and San Francisco and Chicago for over a decade right now. But some of these smaller towns — the Indianapolises of the world, the St. Louises of the world — as well as college towns, where basically nobody has a car compared to the population, they just look like good opportunities for us. They’re complicated from a marketplace-management perspective, because anytime you go to a newer geography, you’ve got to first make sure you’ve got enough drivers, ’cause otherwise it takes too long to get picked up. And you’ve gotta make sure you’ve got enough riders, because if not, then drivers won’t make enough money. So it’s quite complex to —

BARRY RITHOLTZ (00:39:41):  Invest. There’s a chicken-and-egg problem there.

DAVID RISHER (00:39:43):  It is a chicken-and-egg problem, over and over again. Which, again, is why — back to the earlier part of the conversation — it’s really quite hard at this point to come into the market fresh. You know, you’re not gonna find a lot of folks who want to come into a well-served market. But anyway, so we just started to focus on it, and our data scientists and our marketers really kind of went to town, and it’s been a big source of growth.

BARRY RITHOLTZ (00:40:03):  Huh. Really, really interesting. Coming up: we continue our conversation with David Risher, CEO of Lyft, discussing the future of transportation technology. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

BARRY RITHOLTZ (00:40:31):  You are listening to Masters in Business on Bloomberg Radio. My extra special, fascinating guest is David Risher. He is the CEO of Lyft, and we have been discussing the future of transportation technology. We have to talk about AI; we have to talk about autonomous vehicles. But before we do, I have to ask you two really interesting questions. One is: how do you solve the problem of even sober people leaving their phones in the car when they get out? And suddenly it’s a big pain in the ass — somebody has to come either drop off the phone or whatever. How do you, as a customer-obsessed company, how do you solve that problem?

DAVID RISHER (00:41:16):  I so love this question, because it is an experience every single one of us has had, and it is both infuriating and incredibly stressful. Because all of a sudden you realize, oh my God, my entire life is driving in the wrong direction, and I don’t even know how to contact the company at this point.

BARRY RITHOLTZ (00:41:30):  Because the number is on your phone —

DAVID RISHER (00:41:33):  And the phone is in the car, and you’re like, I wanna hold my phone to call the phone — but I can’t do that. It’s very, very stressful. So here’s what we’ve done. We’re doing a huge amount of work on this, just to be really customer obsessed. The first thing is automatic detection. So if the phone starts to travel away with a driver after you’ve been dropped off, that immediately, automatically alerts the driver: there’s probably a phone in your backseat. It requires a little bit of work on the rider’s side — we’re still trying to figure out how to get riders to opt into this, because they have to share a little bit more information. But we’re still working on that. But regardless of whether it happens automatically or manually, the second thing is: we’ve got a whole web portal, so you don’t actually have to use your phone. You can — and you don’t have to log in. But really, the big innovation is this — we wanted to have it sort of out of band — so the whole “return the phone” thing becomes almost a separate process. And frankly, in the past, it’s almost felt like a bit of a negotiation with the driver, and nobody liked it. The drivers didn’t like it, ’cause it felt like it was sort of an annoyance. The riders didn’t like it, because they’re like, oh my God, I sort of feel like I’m being held hostage here. A terrible thing. Now it’s a whole automated process. And basically, what we realized is: we should just treat it like any other ride. So it’s basically — the phone is getting a ride back. So what you get to say as a rider is: yes, please bring my phone back. I know exactly how much it’s gonna cost — it’s gonna cost just the exact same amount as if I’d taken a ride to that exact place where the phone is. And the driver gets it in their queue just like they would get any other ride request. And it gets returned to you. Typically — I was just looking at this data, and it changes every single week — but we’re now getting to the point where a large percentage of riders’ phones are being delivered back within an hour, which is the absolute gold standard.

BARRY RITHOLTZ (00:43:09):  So let’s use technology and cut that: on the app, opt in to avoid leaving your phone in the car, via Bluetooth. Not on each ride — just once, on the app. And then when the ride is over — you’ve arrived and the person gets out — if the phone doesn’t leave the car, right there and then, the driver should lower the window and say, hey, you left your phone in the backseat. And that doesn’t seem like you’re changing or creating new technology. That’s right — you’re just applying existing technology. Why take an hour? Why not take 30 seconds?

DAVID RISHER (00:43:48):  A hundred percent. And this is now where you realize that all technology problems are ultimately human problems. Because in order for that to happen, a person has to have opted in — they’ve gotta click a button. Most people are either skeptical of that, or they’re not paying attention. So now our trick is to try to figure out a way to really encourage people to do that. As you say, you only have to do it once. But that’s gonna be the next big focus.

BARRY RITHOLTZ (00:44:09):  So let’s stay with that theme before we really move too far away from people and towards technology. You drive for Lyft every six weeks or so, which seems kind of bonkers. What have you learned sitting in that seat that you can’t learn from the executive suite or the boardroom?

DAVID RISHER (00:44:28):  So much. So much. And, you know, I know we’re all busy people — here I am, busy senior executive, CEO of a company. My God, you know what? I got time, right? I got time — I can jump in the car. And here’s why: I learned stuff about being a driver, and I learned something about being a rider, every single time. So I’ll give you an example of each. Very quickly, on the driver’s side, I learned how important a feature is that we’ve developed over years and refined, called Stay Within Area. And there are actually two features next to each other — one’s Stay Within Area, one’s Arrive On Time. Lemme actually focus on Arrive On Time. What that means is: I’ve got a kid to pick up at the end of the day, or I’ve got a date with my wife tonight, or I’ve got a doctor’s appointment at three o’clock in the afternoon. And so I need to figure out a way to organize my life such that my last ride is gonna put me, you know, right where I need to be by a certain time. If I look at the gig economy, one of the real gifts of the gig economy is it allows you to integrate your work into your life in new ways. Again, I don’t have to call my boss and tell ’em I’m gonna be late today. I don’t have to do anything like that. But sometimes I do have other things in my life. Maybe it’s another job; maybe it’s an obligation with my parents — or whatever it might be. So anyway, that’s a feature. It worked pretty well when I started. It works very well now — and in part, it’s because I give a lot of feedback to the team on how to make that better and how important it is to get that exactly right. And then on the rider’s side — I mean, every time I take a rider in the car, of course I ask them why they chose us versus the other guys. Sometimes it’s because they say, oh, Chase Sapphire Reserve — I’m a Chase Sapphire Reserve cardholder, and you guys have a relationship with them. That’s great. That gives me a little bit of data of how important that is.

BARRY RITHOLTZ (00:46:03):  That’s a points relationship.

DAVID RISHER (00:46:05):  It’s a points relationship — and you get all sorts of — you get $10 every single month to use as Lyft credit. And look, I can look at the data just like anyone else and realize the number of people who are using that. But there’s just no substitute for hearing somebody, you know, go off about how much they love that card, and how important that partnership is to them. That’s a generic example. And then a specific example involved a woman that I gave a ride to — this is now about almost two years ago, but it’s still really, you know, kind of resonates with me — where she would wake up every single morning, and depending on what the price was of getting from her home to her job — because the prices would bounce around a lot — she would either take a Lyft, or maybe take the other guys, or drive herself, or stay home. And it was a source of stress and concern to her every single day. She would literally wake up an hour, you know, before she had to leave, just to sort of check prices. And it just made me realize how much surge pricing is customer hostile.

BARRY RITHOLTZ (00:46:59):  Nobody likes it. Nobody likes it. It starts to drizzle a little bit, and suddenly it’s a $30 surcharge. And I know people are infuriated by it.

DAVID RISHER (00:47:07):  And they should be. And here’s the problem. This is the difference between — you know, if you’re an economist, you love this, right? It’s, oh, supply-demand balancing in real time — it’s just unbelievable. Like a perfect science experiment. And if you’re a real person, it just bugs the crap outta you. So it really drove home to me how frustrating this was. And it was literally a Friday morning where this woman had donuts, and she was bringing them in to see a coworker for his birthday. And she’s like, I can’t work from home today — I’m so glad that Lyft was reasonably priced. So that’s what’s led us to take about $50 million a year out of surge pricing. We’ve really tried to get rid of it as much as we can — can’t completely eliminate it — and also introduce a product called Price Lock that allows you to lock in a price on a route.

BARRY RITHOLTZ (00:47:47):  So tell us a little bit about Price Lock. What does that do? I’m not familiar with that aspect of the app.

DAVID RISHER (00:47:54):  Yep. So it’s really meant for people who commute the same route every day, and they don’t want the route to go from 20 to 30 to 40 bucks ’cause, you know, say it rained. And by the way, to be very clear, there are good reasons for surge pricing, right? It’s a very good way for us to encourage drivers to drive when there’s more demand than their supply. But because it’s very frustrating for riders, we wanna give people a way to kind of opt out of it. So for a given route — you know, from point A to point B — if you wanna lock in a price, we basically say, here’s the average price over the course of a month. If you wanna lock in, I think it costs $4.99 a month per route. That’s all it takes. And it’s been super popular for people who just want to get that outta their lives.

BARRY RITHOLTZ (00:48:28):  Huh. Really, really kind of interesting. So let’s talk a little bit about autonomous driving. I was in San Francisco last month — Waymos everywhere. Tell us a little bit about what Lyft wants to do with autonomous vehicles. Are these just shiny objects, or are these the future?

DAVID RISHER (00:48:48):  They’re the future. They’re the future. It will take a long time for this future to come; it will be very unevenly distributed. But they are the future. And the basic reason why is: they are a reliable product, and they’re a safe product —

BARRY RITHOLTZ (00:49:01):  Safer than human drivers.

DAVID RISHER (00:49:04):  They are, substantially. And it’s because they not only know the policies, but they follow the policies. You know, they tend to follow the rules, and they don’t get distracted. So, not to say some crazy thing won’t happen one time out of a million, but 99.999% of the time, they’ll do the thing that you expect a car to do — which is keep its rider safe. So, okay — so that is coming. So now, as a business person, you have a choice to make, right? You can either embrace this, or you can sort of not. And the thing is, in a sense it’s a choice, but in another sense it’s not, because you’ve seen Kodak and, whatever, Polaroid —

BARRY RITHOLTZ (00:49:40):  Who, by the way — Kodak invented the digital camera, but didn’t want to cannibalize their own film business. And how did that work out?

DAVID RISHER (00:49:46):  Not exactly — not so well. And then, on the other hand, you look at maybe a company like Netflix, that invented the DVD-by-mail business to sort of set Blockbuster aside, but did such a good job surfing from that to streaming, and now to original content, right? They’re a great company in so many ways, but they were relentless, fearless about cannibalizing their own business to get to the next thing. So that’s the shift that we’re right in the early, early, early days of. It will be another platform shift. But we’re in a very fortunate position, and here’s why. You know, we have millions of riders. We have millions of — billions, billions of data points about pickup and drop-off location and pricing and so forth and so on. And we have a whole subsidiary called Flexdrive that does fleet management, which I can come back to in a couple of seconds. But these are gonna be some of the building blocks of the self-driving — or, I really should say, hybrid — network of the future. ‘Cause that’s the last thing I’ll say, just as sort of intro: self-driving cars are gonna come little by little by little. Human drivers are gonna be around for a long, long, long time. There are not enough self-driving cars in any given market to satisfy peak demand on, you know, Friday afternoon at five o’clock rush hour, or what have you.

BARRY RITHOLTZ (00:51:01):  So this is not a three-, four-, five-year transition. This is a 10-to-20-year transition. Is that about right?

DAVID RISHER (00:51:07):  Think about it as a decade transition. Yeah. And even, again, the word “transition,” I think, is maybe not quite right, because the economics of an expensive car don’t really lend themselves to having a whole bunch of them sitting around at two in the morning, empty. You really, I think, want a hybrid network for a long, long time — for human reasons, too, right? You might want someone to help you with your luggage, or maybe even someone to ask you how your day was. But the economics of it make it such that it’s much more likely this will be a hybrid network for at least a decade or, you know, more.

BARRY RITHOLTZ (00:51:37):  So that kind of raises an interesting question: what exactly is Lyft? We know it’s a ride-hailing company; it’s also a transportation market-clearing mechanism. It’s a consumer brand, and it’s also a logistics platform. Like, where is the future growth coming from?

DAVID RISHER (00:51:56):  I mean, you know, a little — all of the above, right? So, as you say, the thing people know Lyft the most for are, you know, human-driven cars picking you up and dropping you off. And as we were just saying, that will become a mix of human-driven and, you know, frankly, robot-driven cars. What you may not know is Lyft also runs the bike share system here in New York City.

BARRY RITHOLTZ (00:52:15):  Citi Bikes are run by Lyft? I did not know that.

DAVID RISHER (00:52:18):  That’s exactly right. So we run Citi Bike, we run the program in San Francisco, we run the program in Chicago, we run the program in Boston, we’re in Portland, Oregon. And then we also supply the technology and the bikes in London, in Barcelona, in Madrid — you know, many, many countries around the world. This may seem like sort of a small thing, but if you’ve been to a city like New York or London, you’ll know that cities are very, very aware that they want sort of multimodal transportation. So that’s gonna be, you know, a big part of our future as well. And then, look — someday, who knows, maybe boats, maybe vertical-takeoff aircraft. Who knows? But I will tell you that our real focus right now — and we will always be — this is our sort of purpose: serving and connecting. I want people to be out and about, and connect with each other in any possible way we can. That’s really what I want.

BARRY RITHOLTZ (00:53:05):  So you mentioned London. What are the plans for Baidu robotaxis in London? Is this gonna be a pilot program that could potentially scale up dramatically, like the Waymos in San Francisco?

DAVID RISHER (00:53:21):  That’s right. So again, let’s think about the self-driving car world for a couple of minutes. The technology is being developed worldwide. It’s being developed in the United States — Waymo, of course, is the leader, really the worldwide leader. Zoox, which is owned by Amazon, is much, much smaller, but, you know, trying very hard to come up behind Waymo. And then there’ll be, you know, many others, including maybe Nvidia, and companies that aren’t even really in the space now but will wanna sell their technology to different OEMs — to different, you know, car manufacturers. There’s also technology coming out of China. Baidu is sort of the Google — you think of it as kind of the Alphabet — of China. And there are many, many others. There’s a company called WeRide, there’s a company called Pony, there’s a company called Momenta, there’s a company called Geely. I was just in China a couple of weeks ago, looking at the incredible just growth of technology there — both, again, kind of hardware and software type technology. Okay? So that’s all background. It’s gonna be deployed worldwide. And in the United States, Chinese technology is not super welcome, for obvious reasons. But Europe is taking maybe a little bit of a more sort of economical approach, where they’re kind of looking at different technology providers and saying, let’s experiment. So in London, we’re partners with Baidu. Baidu has a very, very highly regarded self-driving platform, and we’re just in the early days of rolling it out there. It’s called an RT6 car. This is sort of behind-the-scenes stuff — it literally is just rolling off boats right now, and it’ll be commercialized next year.

BARRY RITHOLTZ (00:54:48):  So I’m looking at the current crop of autonomous vehicles, which are essentially converted traditional cars. But do you really need that front driver’s seat? Can you change up the internal layout? Like, what are autonomous vehicles gonna look like — not in 2060, but in a couple of years?

DAVID RISHER (00:55:11):  So again, it’s such an interesting time to be in this industry, and it’s exactly as you’re saying — like, do you really need a steering wheel? Do you really need, you know, an accelerator and brakes? Zoox, as I say — they’re an Amazon subsidiary — they would say you absolutely don’t. And they have a purpose-built vehicle that doesn’t have either one of those things. Now, for regulatory reasons, for human-acceptance reasons and so forth, for manufacturing reasons, that’s gonna be slower to roll out, because you can’t rely on, you know, the big OEMs to produce a car like that. That’s — it’s its own vehicle. So I think what you’re gonna see over the next three to five years is an enormous amount of new innovation in the car space. It won’t just be, you know, there won’t be a driver. It’ll be — you’ll have seats that face each other. You know, you’ll have seats that completely recline, ’cause you’ve got more space in there. You’ll have different luggage configurations. You’ll have — you know, some of them will feel more like, you know, party buses. Some of them may be, you know, corporate shuttles that just don’t have drivers. A lot of new stuff is gonna come in the next couple of years, step by step, because, again, you know, hardware is hard. It takes a long time to build it out. But, you know, you look five years out, and I think you’re gonna see a lot of cars that look pretty different from what you see today.

BARRY RITHOLTZ (00:56:16):  I’m unfamiliar with Zoox and Amazon’s relationship with them. But if I recall correctly, Amazon was an early investor — took a big chunk of Rivian. That’s right. And all of the electric Amazon delivery vehicles you see are essentially the Rivian platform repurposed for commercial use. Is Zoox plus Rivian the direction Amazon is going? And do you guys — does Lyft, whose CEO has a relationship with Jeff, have a relationship with Amazon?

DAVID RISHER (00:56:49):  We do have a relationship with Amazon. Of course, we’re huge consumers of AWS, which is Andy’s — the current CEO’s — kind of pride and joy. And for sure we’ll end up using — look, everyone is gonna end up partnering with everyone. That’s the interesting space we’re in right now: if you’re in the business of developing a self-driving car, it’s billions of dollars of R&D — billions of dollars. And so you want as many customers as possible. And then, if you’re in our business — in the business of moving people around and connecting people — you wanna have multiple suppliers of that technology, so you’re not beholden to anyone. Some of that is just being, you know, a smart business person. But some of it also is: technology goes through its own, you know, fits and starts. Look at what happens with the airline business when, all of a sudden, you know, Boeing has a problem with one of its units. You know, they stop manufacturing those for a time, or they’re grounded. So I don’t wanna overdramatize, but, you know, anytime new technology comes out, you’re gonna find some of that happens as well. So all of us are kind of in multiple — you know, let’s say maybe polyamorous relationships might be one way to —

BARRY RITHOLTZ (00:57:53):  Well, don’t you have to be? You can’t lock into platform dependency too early — otherwise you end up owning Betamax, and what good is that? And I know half our audience has no idea what the hell that —

DAVID RISHER (00:58:05):  Is. There we go. An old —

BARRY RITHOLTZ (00:58:06):  School reference, yeah, right. But I mean, when you commit one way — so let’s talk a little more about the autonomous ride hailing. What are the big concerns? Is it safety? Is it regulation? Is it winning the consumer’s trust? What are the economics of managing a fleet like that?

DAVID RISHER (00:58:25):  Again, so many interesting questions here. Let’s start with the customer side of things, right? So the first order of business has to be building customer trust and adoption for this new technology. Because, you know, it’s a car that drives itself, which is magical, but also can be a bit intimidating or, you know, even scary for people who haven’t seen the technology. Lyft obviously has a lot of value to add right there, because it’s a brand that people already trust; they understand you’ll be able to opt in or opt out of getting it. I was just in Atlanta a couple of weeks ago, where we have an experiment — a small deployment — with a company called May Mobility, which is also in the self-driving car space. They’re Toyota Siennas. They pull up to you, and all of a sudden you get in — it’s kind of a whole different type of experience from what you’ve probably experienced in the past. But because it’s got Lyft behind it, right on the door already, people sort of say, okay, great — I kind of understand this company and know something about it. Okay, that’s great. So then you kind of have to work yourself down the stack. There are all sorts of technology problems that you have to solve as you integrate, you know, their platform and us. And then someone’s gotta manage these cars. And this is worth talking about for a couple seconds. In traditional rideshare, the driver is responsible for their own car, right? They put gas in it, or they charge it up if it’s electric; they keep it clean; hopefully they keep it maintained, and so forth. But in the self-driving space, at least for the next three to five years, most of the car owners are gonna be professional fleet owners. You know, they’re gonna buy 20, 50, a hundred, 500, and are gonna kind of manage these as a fleet. And that means that they’ve gotta be, again, charged and maintained and cleaned — but they have to be done kind of at a professional level. That’s the sort of stage we’re in. We’ve had a subsidiary for many years called Flexdrive. We actually own about 10,000 cars on the Lyft platform for drivers who don’t wanna drive their own car. And we are responsible for maintenance and keeping them cleaned and so forth and so on. So we actually bring a lot to that as well. And I think that’s one of the reasons why we like the economic profile of self-driving cars. They don’t have insurance as high, for example, as personally driven cars. But also, we like the economics of our fleet-management subsidiary, and think we can service these at an industry-leading rate, and therefore, hopefully, make more money on the asset than anybody else.

BARRY RITHOLTZ (01:00:32):  Is there still gonna be a future for people who — today, you would think of owner-drivers — who just wanna own autonomous vehicles and lease ’em out, or send them out into the Lyft network? Like, I’m crunching the numbers in my head as we’re speaking, and I’m like, oh, that could be a 10, 12% return on investment. Not bad when bond yields are 4%, three and a half percent.

DAVID RISHER (01:00:56):  A hundred percent. I mean, there will be a time where, you know, if you fast-forward, you know, five years or whatever, maybe more, many people — individual owners — have cars that can drive themselves. And then there’s a question, to your point, of, you know, can  you put that on the network? The answer is: absolutely, you’ll be able to put it on the Lyft network, and it’ll come back again cleaned and charged, because of the fleet-management side of things.

BARRY RITHOLTZ (01:01:14):  Huh — that sounds really, really interesting. You know, it’s funny, ’cause when the ride apps first came out, there was a little bit of a lag before people got comfortable. What do you mean, I’m getting into a stranger’s car? I imagine we’re gonna go through the same thing — what do you mean, I’m getting into a car with no driver? It feels like the transitions are happening faster and faster. Same sort of question: this isn’t a 10-, 20-year thing; this is a couple of years before people — forget people under 30, who adapt so rapidly — the middle part of that age bell curve, the 30-to-60s, they’re gonna adapt to this pretty quickly over the next couple of years. How do you think about the different segments of consumer when it comes to autonomous driving?

DAVID RISHER (01:02:04):  Yeah. You know, I think, as you’re suggesting, younger people do tend to take up new technology, you know, pretty quickly. But in this case, I do believe that many people, after they’ve had a couple of rides and realize that it feels very safe and reliable, I think they’ll flip from skeptic to kind of fans, you know, pretty quickly. Now, I will say policymakers, you know, they have their own, you know, issues — and some of that can be very local. So you may find some cities that just say, we just don’t want ’em on our streets for a period of time. You may find, conversely, other cities that say, bring them, ’cause we wanna feel like a city of the future. So I think there are gonna be some policy issues. There are also some infrastructure issues. Remember that, you know, AVs also tend to be EVs. EVs require charging; charging requires infrastructure. And not every city’s gonna have the amount of, you know, electrical power. I mean, this is kind of a side issue, but if you listen to, you know, Jensen, for example, at Nvidia, talk about what could end up holding the United States back from its next big leap — a lot of it comes down to power infrastructure in this country, right? So anyway, there are many different kind of bits and pieces, all the way from consumer adoption to physical infrastructure to policy and so forth. But I think, again, over the next three to five years, I think you’re gonna see a real shift — mostly because consumers are gonna try them and like them, and then they’re gonna be saying, hey, you know, faster, please.

BARRY RITHOLTZ (01:03:17):  So here’s the crazy thing about AVs that I’m still kind of shocked about: it relies on visual, on lidar, on radar, and all these other technologies, but there isn’t a whole lot of infrastructure built into the roadway grid. Wouldn’t be that difficult to create a series of RF devices that are specifically geared for autonomous vehicles — that, like, every now and then, if you’re letting the car drive yourself and there’s an exit or a merge — like, it’s not great with those sort of things today, because there’s no real infrastructure. It’s relying on a technology not built for autonomous driving. Is there any sort of motion towards, hey, let’s everybody that’s doing autonomous come up with a set of standards and have the government implement this into the highway system?

DAVID RISHER (01:04:16):  I mean, the short answer is no today — and long-term, for sure. And the reason no today, frankly, is, again, you know, anytime you see these platform shifts, you always have competition for sort of who gets to own the platform, right? And individual companies all have a huge incentive to say, you know, I wanna do it my way. ‘Cause if my way becomes the standard, then everyone else kind of follows along me, and I get to sort of set the standard. Over time, though, you tend to see that those things — that doesn’t become a long-term competitive advantage, typically — particularly for this sort of infrastructure. And so I would fully expect, over time, just in the same way that you can start to see charging networks kind of harmonize, that you’ll see some sort of, you know, kind of federal level. But we’re years before that.

BARRY RITHOLTZ (01:04:59):  Right. We did see that sort of standardization take place in a lot of other technologies. And suddenly you’re not competing on a standard; you’re competing on highest quality, lowest price, et cetera.

DAVID RISHER (01:05:08):  That’s exactly right.

BARRY RITHOLTZ (01:05:10):  But you would think that if the cars literally knew exactly where the road was, it would be even that much safer.

DAVID RISHER (01:05:19):  You would think. But I would say, right now, the technology is evolving so quickly at the car level, and really, the safety is very, very, very impressive. And of course, look — I know, you know, tomorrow morning you’re gonna open up, you know, a newspaper or an app, and you’re gonna read about some strange thing that happened, you know, in some strange part of the world, with a self-driving car. And I’m gonna tell you that that is gonna happen — and that’s, you know, one in a million, as opposed to, you know, one in hundreds, which happen every single day with human drivers.

BARRY RITHOLTZ (01:05:49):  Yeah — those are the clickbait headlines, not the statistically significant practice. All right, so last question before I get to my favorite questions I ask all my guests. When it comes to transportation technology, what are we not discussing as a society, as a government, as consumers, that we really should be? What is kind of getting overlooked in this rush to new technology? It could even be something that you guys are focused on, but a lot of people don’t realize — oh no, this is really significant, and the public hasn’t quite grokked this yet.

DAVID RISHER (01:06:24):  You know, I’m gonna come back to the basic role that technology plays in people’s lives, to help them live their absolute best lives. I’ll tell you something that I’m a lot passionate about personally. And that is: as people live longer lives, one of the things that is very predictive of their quality of life is how much time they’re spending with other people, out and about, socializing.

BARRY RITHOLTZ (01:06:44):  Socializing.

DAVID RISHER (01:06:45):  Exactly. Very, very highly predictive of a healthy, long life. And as we as a country are getting older — which we are, demographically — that is gonna be an enormous shift, where you have so many more people in their sixties, seventies, even eighties, who wanna live healthy, vibrant lives. And so one of the things I’m really quite proud of with Lyft is, you know, Lyft Silver — a particular product line that we’ve developed over the last year that’s really focused on, you know, helping older folks get out. The apps are easier to use, the cars are easier to get into, the driver’s a little bit more experienced. I think that sort of intersection between societal trend and the type of work we do in transportation is really quite deep. And, you know, maybe just as important, ultimately, is, you know, all of our conversation around medicine and so forth and so on is: keeping people out and about. And I know — here in Oura Ring world, where I am as well — or maybe you’re not, I don’t know.

BARRY RITHOLTZ (01:07:37):  I am — my wife wanted to get one, so we got a pair. And she got bored being told she’s stressed all the time and stopped wearing it. So now I’m wearing it. So we both — we each have one, and I’m the only one who still wears it. How funny.

DAVID RISHER (01:07:48):  Okay — actually, my wife and I did the same. She said, I get a little tired of seeing, you know, that it’s telling me exactly I’m stressed or I’m not sleeping well. But at least for me, it’s a sort of nice nudge to get good sleep, and, frankly, to kind of keep an active life. And so I see this space — the transportation piece — as somewhat similar. Like, I want technology that kind of helps me live my best life. And I think transportation plays a big role there.

BARRY RITHOLTZ (01:08:07):  All right, so let’s jump to our speed round — our favorite questions. Starting with: tell us about your mentors who helped shape your career.

DAVID RISHER (01:08:16):  Oh gosh, I love this question, ’cause I think it’s so important for us to remember that we all stand on other people’s shoulders. I’ll list a few. Of course, I worked for Jeff Bezos a lot — I’ve mentioned him. But I wanna mention other people. First big boss: a guy named Todd Nielsen. Todd really taught me the power of a great story, and also the importance of really listening to and watching customers closely. So he taught me two big things there. And then a guy named Peter Spiro — he was the board chair at Worldreader for many years. He and I sort of knew each other back in the Microsoft days, but he was the board chair for the nonprofit I ran. So focused on the team, so focused on the team — you’re only as good as your team. Really learned a ton about management and leadership from Peter.

BARRY RITHOLTZ (01:08:57):  Huh — really interesting. Let’s talk about books. What are some of your favorites, and what are you reading currently?

DAVID RISHER (01:09:02):  Oh man. I just finished a book called Good People. So I tend to read some fiction and some nonfiction. I’m currently reading a book called Apple in China — all about Apple’s entrance into China, and ultimately the importance that China has, and, frankly, the power that China now has, over Apple. And then Good People is a fictional book about an Afghan family from Afghanistan that moves to the United States, and is either a model family or terrible people. And it’s very, very hard to know which — the book sort of flips back and forth. Remember when I said that books kind of teach empathy and sort of different perspectives? This one does a good job of that.

BARRY RITHOLTZ (01:09:42):  Huh, really interesting. What about streaming? You listen to any podcasts, or Netflix, Amazon, whatever? What keeps you entertained?

DAVID RISHER (01:09:50):  I do. I am a podcast guy. I have to say, though, I’m kind of traditional when it comes to podcasts. I listen to The Daily from The New York Times pretty regularly. And I think most of it is because I have so many things in my life that are sort of — there’s so much content that comes at you that’s sort of superficial. And at least with The Daily, I feel like I get to go a little deeper on a subject. You know, it tends to be a kind of half-an-hour deep dive on a particular thing. And I do feel — particularly, I also read The New York Times; I know it’s sort of traditional in that way. So if I’ve read an article, and then I kind of hear a podcast on the same topic, I do feel like I’ve actually gotten maybe a little bit smarter about something, you know, beyond the surface.

BARRY RITHOLTZ (01:10:28):  Let me just push back ever so slightly, please, on how The Daily has evolved. Because when it first came out — and I was a regular listener — I don’t want anybody telling me about the story that’s in the paper that I can read. They used to kind of do the background: hey, how did you start investigating this? What led to this? Tell us some interesting stuff that didn’t make it into the article. It was really inside baseball, and that stuff is kind of fascinating. Now, whenever I check it out, it’s the person — I don’t wanna say reading the story, but it feels like they’ve left a lot of that, you know, behind-the-scenes stuff back three years ago. It’s still — it’s become one of the biggest podcasts in the world. It’s giant.

DAVID RISHER (01:11:13):  Yeah. Yeah. That’s interesting.

BARRY RITHOLTZ (01:11:15):  Anything else? Anything else you listen to or watch?

DAVID RISHER (01:11:19):  I mean, you know — mindless TV I love, but I’m not gonna embarrass myself and tell you all that sort of stuff. Yeah, we’ll stick with The Daily on this one.

BARRY RITHOLTZ (01:11:27):  We are in the golden age of mindless TV, for sure. And it’s not — you know, if you are watching The Crown, or Landman, or 3 Body Problem — there’s so many fascinating shows out there. It’s not like garbage time like it was when I was a kid.

DAVID RISHER (01:11:43):  You are right about that. And I will say that my wife and I became obsessed with The Pitt, as many people are. It is funny — and it almost makes you feel like, you know, I’m, like, halfway to being an ER doc myself. By the way, you are not — so don’t think that that’s true. But what is hilarious is my wife’s tolerance for some of the gory stuff is a little lower than mine. So she watches The Pitt with her hand kind of half in front of her face the whole time.

BARRY RITHOLTZ (01:12:04):  My wife — we watched the first couple episodes. She’s like, this is just too much. It’s like — you wanna relax? And it’s very serious. I just kind of tense out.

DAVID RISHER (01:12:11):  Yeah. But it’s a great cast, and it’s a great set of stories, for sure.

BARRY RITHOLTZ (01:12:16):  Final two questions. What sort of advice would you give to a recent college grad interested in a career in either technology or business?

DAVID RISHER (01:12:25):  So my advice here tends to be — it’s always sort of the same. And here’s how it goes. There’s so much temptation when you’re picking your job early on to pick something that sort of seems like it’s gonna be good on your resume, or maybe it’s gonna make you a lot of money — whatever it is. This is sort of the temptation, ’cause it’s so sort of in the air, maybe now more than ever, because of social media. And, oh man — the people that I see succeed are really the ones that say: yes, I have an economic reality; I have to sort of do better than that. But once the economic reality has been met, it is all about: pick something you think you’re really gonna love and are gonna be good at. And I say that like — you have to be a bit introspective of this. You know, maybe you love, you know, selling. Okay, great — so take a sales job. Maybe you love listening to customers — great, take maybe a marketing job. Maybe — but I’m trying to make this sound maybe a little bit more interesting than “follow your passions,” ’cause that’s so trite. But there is something to it: really kind of being introspective about what you think you’re gonna just jump outta bed every morning and love doing tends to be a much more powerful predictor of long-term success than people who try to optimize for that short-term, sort of get-rich-quick type of thing — and then find themselves later realizing, shoot, this isn’t really my thing. It’s somebody else’s thing.

BARRY RITHOLTZ (01:13:39):  Really, really good answer. And our final question: what do you know about the world of consumer-facing technology and apps today that would’ve been useful to know 25, 30 years ago, when you were first getting started?

DAVID RISHER (01:13:53):  Wow. Okay. That’s also a really interesting question. You know, I think I’ve probably gone through a similar arc to other people, where in the nineties — maybe even early two-thousands — I was sort of a universal techno-optimist. I probably was in the camp that said technology is such a powerful force for the good. And you see me try to, you know, harness it with Worldreader, specifically — of course, trying to take technology and get people reading. In that case, it did work. We’ve gotten, you know, over 22 million people reading. So that’s awesome. But, oh man, it is hard not to see some of the just terrible costs we’ve paid as a society. And so I think — maybe more of a mindset than a particular thing — of just: be really aware that technology is so powerful, and, man, with great power comes great responsibility. And I’m just a big believer that our best leaders now — and I’m not necessarily putting myself in the category — are being really thoughtful about, you know, the good of technology, but also really trying to avoid some of the problems.

BARRY RITHOLTZ (01:14:53):  Good, good answer. David, thank you for being so generous with your time. This has been absolutely fascinating. We have been speaking with David Risher. He is the CEO of Lyft, one of North America’s largest ride-sharing networks. If you enjoy this conversation, well, be sure and check out any of the 639 we’ve done over the past 12 years. You can find those at iTunes, Spotify, YouTube, Bloomberg — wherever you find your favorite podcasts. I would be remiss if I did not thank the crack team that helps me put these conversations together each week: Alexis Noriega is my video and podcast producer, Sean Russo is my researcher, Anna Luke is my producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.

 

 

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The post MiB: Lyft CEO David Risher appeared first on The Big Picture.

Trump Greenlights Patriot Missile Production In Ukraine, Praises Deep Strikes Into Russia

President Trump just prior to entering the Oval Office vowed to quickly achieve peace in the Russia-Ukraine war, which is currently in its fifth year. The MAGA base got energized by Trump's earlier repeat statements that he'd bring peace to major global flashpoints and hotspots, but instead of anti-interventionism he started a new war of choice in the Middle East, and is now tripling down on military support to Kiev.

While in Turkey for the annual NATO summit, President Trump commented on the issue of Ukrainian drone strikes deep into Russian territory on its oil refineries and defense manufacturing facilities, which has unleashed a fuel crisis in various parts of Russia and especially Crimea.

"It's an escalation but it’s also an escalation that can help lead to an end [of the war]," the US President told the NATO summit.

via AFP

After heaping lavish praise on Ukraine forces for supposedly turning the tide of battle and momentum in Kiev's favor, Trump also said, "We have a lot of pressure on President Putin. I don’t think he likes what’s going on." He added: "But I talked to President Putin a lot. He wants to end the war."

The Wall Street Journal comments in the wake of Trump's remarks:

President Trump said he supported Ukraine striking targets deep inside Russian territory, calling it an escalation that could help end the war.

...In a marked contrast to past meetings between the two leaders, Trump opened his press conference with President Volodymyr Zelensky by offering warm words and fresh promises of military cooperation with Ukraine, providing a major boon for Kyiv and its supporters in Europe. Trump praised Ukraine’s bravery, signaled he would consider granting Kyiv a license to produce U.S. Patriot missile interceptors and said he would consider travel to Kyiv at the right time in peace talks.

On this, Trump said Washington would give Ukraine "the right to make Patriots" - after Zelensky has for at least six months been relentless in requesting this, framing it as urgent and for the protection of cities and civilians.

"We’ll show them how to do it," Trump stated, describing the system as "very complex" - though he also said the Ukrainians would "figure out the complexity quickly."

Trump continued by saying that American defense firms are already building "four plants" and claimed that "all of our companies will be able to do this in two to three months."

However, there have notoriously been immense backlogs when it comes to Patriot production, and there's said to be great global demand among US allies, especially given depletions which have come as a result of the Iran war.

Trump: (Pointing to Zelensky)

Do you have a question for President Putin? pic.twitter.com/91EQv8kw2h

— Clash Report (@clashreport) July 8, 2026

It's hard to know of this is just more bluster - and what will actually materialize as far as this promises - but Moscow will only see this as another US step up the escalation ladder. Earlier this week, Kremlin spokesman Dmitri Peskov said the Ukraine conflict is no longer just a "special military operation" but a real war, because Kiev is backed by Berlin, Paris, The Hague, Oslo, and Washington - complete with Western weapons, satellites, and infrastructure helping direct strikes.

"In these conditions, we must be clear-eyed: the Kiev regime is capable of anything," Peskov said in an interview.

Tyler Durden Wed, 07/08/2026 - 11:05

WTI Extends Gains As Crude Exports Slide, SPR Drain Continues, 'Tank Bottoms' Hit

Oil prices spiked overnight to three-week-highs after President Trump said that he thought the Iran cease-fire was “over” amid a volatile 24 hours in the Persian Gulf region.

The Trump admin launched a series of strikes on Iran and revoked a waiver that had allowed Iran to sell oil in retaliation for attacks on tankers this week in the Strait of Hormuz.

Daniela Hathorn, an analyst at Capital.com, a broker, said that investors had viewed the cease-fire as “fragile but ultimately durable,” until Mr. Trump’s comments called that into question.

“Any suggestion that negotiations have collapsed raises the risk of renewed supply interruptions or tighter sanctions,” Ms. Hathorn said in a statement.

Overnight saw across the board inventory draws reported by API (but admittedly the draws were on the smaller side).

API

• Crude -399k

• Cushing -100k

• Gasoline -2.92mm

• Distillates -1.80mm

DOE

• Crude +2.998mm (-1.4mm exp) - biggest build since April 3rd

• Cushing -52k

• Gasoline -1.904mm

• Distillates -4.98mm - biggest draw since Jan 26th

While the decline in crude stocks was expected to slow, the 3mm barrel build is entirely unexpected. Product stocks are seeing big draws with distillates dominating the flows (amid record crack spreads)...

Source: Bloomberg

Stocks at the critical Cushing hub are stuck at 'tank bottoms'...

The Strategic Petroleum Reserve continues to see sizable draws...

...drooping the total SPR level to fresh post-1983 lows...

US crude production pushed back up to record highs...

US crude exports, which have been running hot since April, have tumbled back to 'normal' levels...

But product exports exploded to a new record high...

WTI front-month futures were hovering around three-week highs around $74.50 ahead of the official data (back above its 50DMA), and extending gains after...

While the physical crude market remains reasonably supplied, refined products continue to tighten.

Crack spreads remain elevated (potentially providing more crude demand pull from refiners), and ongoing strikes on Russian refining infrastructure are keeping product markets tight.

And that's why pump prices are not falling in line with crude...

...as President Trump demands!!

Tyler Durden Wed, 07/08/2026 - 10:39

Trump Admin Approves Public Release Of OpenAI's GPT-5.6 Models Ahead Of Thursday Release

The Trump administration has approved the wide public release of OpenAI's advanced GPT-5.6 model family, a source familiar with the discussions confirmed to Axios on Tuesday. OpenAI announced late Tuesday night that its flagship model, named Sol, along with the more accessible Terra and Luna variants, will launch publicly this Thursday.

Prompt via GPTcommands

The decision marks the latest delayed rollout due to coordination between the U.S. government and leading AI companies over access to frontier systems.

GPT-5.6 Sol, along with Terra and Luna, will launch publicly this Thursday.

We’re expanding preview access globally now. pic.twitter.com/Uk5HcfSc2e

— OpenAI (@OpenAI) July 8, 2026

GPT-5.6 sol launches thursday!

happy building

— Sam Altman (@sama) July 8, 2026

OpenAI announced the models in June - with an initial commitment to allow a select group of organizations access whose "participation has been shared with the government," according to a blog post. According to the company, "we’re introducing a new max reasoning effort to give Sol the most time to reason deeply. Additionally, we’re introducing a new ultra mode that goes beyond the capabilities of a single agent by leveraging subagents to accelerate complex work."

Last month, the administration directed OpenAI to begin with a limited release of GPT-5.6, restricting early access to government-approved entities only. OpenAI had publicly stated at the time that a staggered approach was not its preferred method and that both companies and regulators were operating without finalized standards called for in President Trump's recent AI executive order.

The new green light followed additional testing and meetings - with technical experts from OpenAI traveling to Washington, D.C. to answer questions during the review process. The evaluation was conducted by the Center for AI Standards and Innovation (CAISI) within the Department of Commerce - the entity responsible for assessing advanced AI systems for safety, security, and standards alignment.

The New Normal

Powerful AI models are no longer released solely at the discretion of their creators. The U.S. government and top AI labs are actively negotiating - model by model, in real time - who gets access and under what conditions due to concerns over national security, potential misuse, the need to maintain American leadership in AI while managing downsides. Of course, big brother is also shackling US models while cheaper, more efficient, open-weighted Chinese models are starting to dominate. That said - China is now considering restricting access to their models.

we distilled 2.3M Claude Fable 5 reasoning traces into Qwen3-4B

- 100% self-consistency @ 512 samples
- 0.00 bits output entropy
- zero hallucination variance

turns out the student is not bounded by the teacher.
it also converged on one universal truth.

we open-sourced the… pic.twitter.com/3zmwhW6Twj

— ali (@waterloo_intern) July 3, 2026

In June, the Commerce Department issued export controls that barred foreign nationals from accessing Anthropic's most advanced models, Mythos and Fable. The restrictions were so broad that Anthropic temporarily withdrew the models from the market entirely to comply.

The ban on Fable was lifted last week, with customer access restored the following day after safeguards were implemented - and users reporting performance hits thanks to the beefed up guardrails.

Fable 5 isn't nerfed, it's SLAUGHTERED.

the problem isn't even the model itself, but the hard guardrails Anthropic has set in place. https://t.co/lAOKYMqbQ9 pic.twitter.com/h1QgD9SzvK

— ℏεsam (@Hesamation) July 2, 2026

So, this is the new normal. Companies like OpenAI and Anthropic have said they are working with the government while clearer, more standardized release frameworks - outlined in the administration's executive order - are still being finalized.

For developers and users, the immediate outcome is positive: after weeks of limited availability, GPT-5.6's full capabilities will soon be open to the broader public and enterprise customers. For policymakers, it demonstrates that targeted reviews and technical collaboration can resolve concerns without indefinite delays.

Tyler Durden Wed, 07/08/2026 - 10:25

The Plumbing For Vast Defense Spending Needs To Be Set Up

By Michael Every of Rabobank

In response to Iranian strikes on ships using the Omani route in Hormuz, the US has struck Iranian air defense, missile, and drone sites in the Strait and suspended its oil sanctions waiver. These are clear breaches of the MoU, and we will now see if Iran escalates --it says it will take “decisive” action-- with the risk of war if the US is also prepared to go that route. We suspect the US will try to step back for now. Even so, it should be clear why our base case is that more war is likely after the midterms. Obviously, oil prices are up today on this news; but crack spreads are already so wide that hardly matters.

Elsewhere in the Middle East, Secretary of War Hegseth is to visit Israel today as PM Netanyahu reiterates that he and Trump align on ”the big things” over Iran; bomb attacks rocked Damascus as France’s Macron visited; Lebanon’s president is to get his first White House visit; and the FT reports Saudi Arabia is blocking private sector payments to Dubai – a sign of rising tensions between those two GCC economies.

At the Ankara NATO summit, Trump struck a friendlier tone towards Turkey than many in Europe, removed sanctions over its purchase of the S-400 Russian antiaircraft system, and saying he’ll “certainly consider” selling them F-35s – setting off alarms in Jerusalem and Athens.

The summit has already seen Secretary General Rutte say, “Admit it - Trump was right.” Yes, Trump just reiterated he could pull all his troops out of Europe (no: Congress wouldn’t allow it) and still wants to control Greenland, which implies fission. But NATO announced joint economic projects to counter Russia and China, ranging from critical minerals to drones to missile shields, aimed at building up a joint military-industrial base: that implies fusion. So does South Korea and NATO agreeing to open procurement talks as President Lee Jae Myung calls for a higher-level defence partnership, something Japan is also pushing for; and as Japan, South Korea, and the US announced cooperation over a new US breakthrough in small modular nuclear reactors. If we count Australia in too at some point, that all seems like a potential building ‘bloc’.

That still comes at a very high price. Ankara has already seen $50bn in defense deals, but that’s a tiny fraction of what’s needed to rearm. Indeed, as European and Canadian defence spending growth is expected to slow this year, and the UK’s new plan falls far short of what’s required, there’s chatter of a ‘World Bank for Defence’, as the UK Chancellor also calls for rival international defense schemes to merge. In short, the plumbing for vast spending needs to be set up.

In that light, yesterday saw the BOE float easing bank capital rules despite what Bloomberg calls “mounting risks,” following new Fed Chair Warsh’s stance: will the BOE also encourage lending into the physical economy, i.e., the military-industrial complex, rather than just holding financial assets; and could it follow a potential US lead on a new inflation measure, as our US strategist plots here? Moreover, the BOE’s new crypto framework regulates GBP stablecoins but allows foreign ones, i.e., USD, to operate under US legislation, opening the door to their adoption.

Not in the same arena (yet), the RBNZ today hiked rates 25bps to 2.50%, as both we and the market had expected. The Bank said that more tightening is needed to bring inflation sustainably back to the 2% midpoint of its target, and RaboResearch maintains a forecast of two more 25bp rate hikes in 2026, with an additional 25bp hike in Q1 next year to bring the OCR to 3.25%.

Meanwhile, German business leaders warned Chancellor Merz that far more is needed to prevent the country experiencing a ‘lost decade’; Airbus is to make its first foray into engine manufacturing with a hydrogen project; and EU border chaos has prompted a delay to a planned pre-authorized travel system.

In the Americas, the White House is pressuring retailers over beef prices; and Canada told the UAE it’s not ready for a planned C$70bn of FDI as it doesn’t have any projects on hand(!)

In Asia, a Chinese policy advisor stated that China has the potential to become the world’s largest consumer market by 2041 – as data show its housing market has reversed 20-years of price gains (not always a bad thing in terms of consumer spending power), and a report has it that hundreds of millions of workers are now in the gig economy. That would imply China’s huge trade surplus will be very hard to eliminate, as a trade war with Europe looms alongside tariffs from the US and an emerging bloc-based NATO architecture.

Indeed, as the IMF appoints former BOE advisor Tenreyro as its next chief economist, the old establishment is on the back foot. See the op-ed today in the New York Times from Mohamed El-Erian arguing ‘America was being played. The Bessent Doctrine says those days are over’, which says economic statecraft has taken over and the global leaders of tomorrow need to learn that “considerations of national security, domestic politics, and geopolitics no longer play second fiddle to traditional business interests in determining corporate and economic outcomes. Those business interests are now being sidelined.” This will be a shock to anyone who didn’t read Grand Macro Strategy in November 2024, which made the same arguments and showed how it would happen.

Contrast that with the argument made by Adam Tooze in the Financial Times that the USD is no longer a global reserve FX but just a “profit dollar” backed by rising asset prices. There’s a vast realpolitik difference between financialisation and production but arguing one shouldn’t hold dollars because US assets appreciate is rather odd absent a counterargument for Hamiltonian neomercantilism which many, if not all, critics of the US also reject as the solution.

But back to “domestic politics.” The US Democratic Party candidate for a Maine Senate seat is being pressured to step down over a serious criminal allegation, opening a tug-of-war not just for that seat but within the Democrats between the mainstream and populist wing. That’s after President Trump used an Independence Day speech to rail against “communism.”

In France, Le Pen was given the legal all clear to run for president in 2027, while wearing a police ankle tag. Does this open the door to populists winning or is this an Establishment tactic to put forward a hobbled Le Pen rather than her nimbler (and more popular) deputy Bardella?

Reform UK leader Farage resigned his parliamentary seat over allegations he should have reported a large personal gift and possible party financial support before becoming an MP. He wants to fight a “two-fingers up to the Establishment” by-election, which Labour and the Tories will not contest. One view is Farage is now a farce, as when he wins the pointless by-election the parliamentary investigation into the gifts will just continue. Yet if it concludes there was wrongdoing, he faces suspension from Parliament for 30 days… and another by-election. Another view is Farage is a force and White Van Man will see the Establishment as the farce, just as happened with Trump. Mirroring that episode, the Guardian are pushing a criminal component to the gifts: but Channel 4 interviews of ‘pub-ulists’ in Farage’s seat of Clacton, even with leading questions, saw that as a stitch-up.

Indeed, the Establishment can lose: Prince Harry and other claimants could face a £50m(!) legal bill after losing a phone-hacking court case. Expect a slew of new streaming specials on how to make cupcakes soon?

It’s not only the IMF, central banks, and NATO, who need to get baking, perhaps.

Tyler Durden Wed, 07/08/2026 - 10:05

South Korea Falls Into Bear Market As Memory Euphoria Fizzles

It started off with the usual morning rush by retail momentum chasers into the handful of massive, market-moving names (read Samsung Electronics and SK Hynix), but as has been the case over the past two weeks, the initial euphoria quickly reversed and the Kospi rolled over, closing down 5.4%, 9.99% over the past two days, and down 22% from the all time high of 9385 hit just over 2 weeks ago on Jun 18.

... officially entering a technical bear market as investors express growing concerns about the long-term prospects of the AI chipmakers that have driven a world-beating rally.

To be sure, the Kospi is still the world’s top-performing major stock index this year, having returned more than 70% in local currency terms. but the momentum is clearly to the downside, and finding dip buyers who are willing to hold more than just a few minutes is becoming especially difficult. 

On Wednesday, the market’s two largest constituents, Samsung Electronics and SK Hynix, fell 6.3% and 5.7%, respectively. Shares of the two companies have surged as a result of demand for their memory chips, although attention is increasingly turning to cheaper Chinese-made memory alternatives made by such companies as CXMT (DRAM) and YMTC (NAND).

Sure enough, sentiment has started to turn. Samsung’s shares tumbled as much as 10% on Tuesday, even though the company projected a third straight quarter of record operating profit.

According to the FT, analysts attributed the recent declines to a lack of clarity on how South Korean chipmakers would enforce long-term agreements with customers over chip purchases, echoing a joke we first made just a few days ago. 

Expect a surge in AI tokens for contract breach research https://t.co/G1qolxhkVr

— zerohedge (@zerohedge) July 1, 2026

US competitors such as Micron have shifted their business model to include longer-term purchasing agreements, but it remains unclear whether Samsung and SK Hynix have been able to secure similar contracts.

“At the moment we have not heard officially from the Korean peers how they plan on executing on these long-term contracts,” said Jason Lui, head of Asia-Pacific equity and derivative strategy at BNP Paribas. Lui said South Korean chipmakers could see their price-to-earnings ratio rise “if they can move to longer-term contracts”.

“Given the fundamentals of how strong the Korean market has been over the past two years it’s challenging to call it a bear market,” he said.

Volatility in the South Korean market is being exacerbated by the proliferation of leveraged exchange traded funds that magnify gains and losses. On Tuesday the head of South Korea’s financial regulator warned of “excessive” leveraged stock investments among retail investors.

S. Korea's Deputy PM Koo Yun-Cheol said at the National Assembly's Planning and Finance Committee plenary meeting that he is discussing supplementary measures in response to concerns that single-stock leveraged ETFs are amplifying stock-market volatilityhttps://t.co/1O4dXYuPVF

— zerohedge (@zerohedge) July 8, 2026

Some fund managers welcomed the move downwards, saying it was inevitable.

“This is a necessary correction because the rise was too steep and fast,” said Chan Lee of Petra Capital Management. “There are possible buying opportunities outside of AI as well.”

Jongmin Shim, Korea equity strategist at CLSA, said: “I don’t think this story is over. It’s just a bit of a correction on the way up. Nothing goes up forever.”

The correction comes just days before SK Hynix plans to list shares on US exchanges for the first time in a $29bn offering that is expected to be the largest-ever share issuance by an Asian company.

Tyler Durden Wed, 07/08/2026 - 09:45

Zelensky In Ankara Still Insistent On Ukraine Joining NATO: 'Alliance For The Future'

President Volodymyr Zelensky is in full court press mode while being present in Ankara for the annual NATO summit, amid Western leaders including President Trump. He has predictably renewed his argument for Ukraine to join the North Atlantic alliance, while also touting some momentum on the battlefield as Russia comes under repeat long-range drone attacks. 

Zelensky thanked leaders "who have clearly stated Ukraine belongs in NATO, because NATO with Ukraine is the alliance for the future" - and then posed in Tuesday remarks, "I have a question for you. Do you really believe it? Do you really believe it would be right to leave outside NATO, a country and a people with this level of defensive capability?"

He argued further: "If we already have these capabilities, if Ukrainians already know how to fight like this, then it does make sense for these capabilities to become a part of the alliance's collective defense that would make all of us stronger."

Source: Ukrainian Presidency/Anadolu via Getty Images

Ukraine has been boasting of its premier drone capabilities, which it says is now clearly proven on the battlefield, but has also admitted that Ukraine needs assistance matching Russia's ballistic capabilities.

Zelensky said "Europe urgently needs its own capability to produce anti-ballistic systems and the missiles they require." He added: "The one thing we still need to do here in Europe is build a strong defense against Russia's ballistic missiles. It's a big challenge… this is Russia's last major advantage."

It's interesting that Zelensky is arguing that his country should become a full-fledged NATO member based on already in effect being militarily integrated.

This was one of the Kremlin's very rationales for launching the 'special military operation' in Ukraine in the first place. Also interesting is that Moscow is now referencing it as a 'war' on a much more official level...

Peskov via Russian state media sources:

Dmitri Peskov says this is no longer just a “special military operation” but a real war, because Kiev is backed by Berlin, Paris, The Hague, Oslo, and Washington — with Western weapons, satellites, and infrastructure helping direct strikes.

“In these conditions, we must be… pic.twitter.com/oe0TMttCqO

— Margarita Simonyan (@M_Simonyan) July 6, 2026

Russia still has as a main front-and-center demand that Ukraine definitively and permanently reject aspirations to join NATO. Moscow also still requires full political recognition over the four eastern annexed oblasts, as well as Crimea. 

Western officials have still been reluctant to fully back some kind of rapid NATO membership track for Ukraine, knowing it would take the Ukraine crisis from more of a proxy war situation strait into WW3-style direct war between Russia and NATO.

Tyler Durden Wed, 07/08/2026 - 09:25

Higher Electricity Rates In Blue States Linked To Renewable Energy Policies

Authored by AG News Staff via American Greatness,

A new analysis by Always On Energy Research and the Institute for Energy Research concludes that renewable energy mandates and net-zero policies have contributed to higher electricity prices in states that adopted them, while states with fewer climate-related mandates generally have lower electricity costs.

The analysis examined electricity pricing data from the U.S. Energy Information Administration and found that most states with electricity rates above the national average voted for the Democratic presidential nominee in the 2020 and 2024 elections.

According to the report, 86 percent of states with above-average electricity prices supported the Democratic nominee in both elections. By comparison, 80 percent of the 10 states with the lowest electricity prices voted for the Republican nominee.

Researchers said the study focused on identifying policy differences between states with higher and lower electricity rates.

Last year, the organizations highlighted California, New York, Florida, Kentucky and Louisiana as examples of how renewable portfolio standards, net-zero targets, net-metering programs and other climate-related policies may affect electricity prices.

The groups have now expanded the project, releasing detailed profiles of the original 13 colonies on the Fourth of July. Additional state profiles are expected to be published in phases.

"We wanted to have a one-stop shop where people could kind of get a feel for what's the energy mix in their state, what policies are being implemented, and what's the impact of those policies on what they're paying at the plug," Isaac Orr, vice president of research for Always On Energy Research, told Just the News.

The report evaluates whether states require utilities to obtain a minimum share of electricity from renewable sources, have utility net-zero commitments, offer net-metering programs for rooftop solar customers, impose carbon-pricing or cap-and-trade systems, restrict natural gas infrastructure or have policies related to electricity demand from data centers.

"The map shows these kinds of subtle distinctions in the price of electricity for each of these states, and we wanted to be able to demonstrate why that is from a policy perspective," Orr said.

The researchers noted that political affiliation alone does not explain electricity prices. Oregon and Washington, both Democratic-leaning states, have relatively low electricity costs because of their extensive hydroelectric generation.

According to the report, utilities may benefit financially from net-zero commitments because they can earn greater returns by investing in new infrastructure.

The organizations said they hope the project will serve as a resource for voters and policymakers evaluating the impact of state energy policies.

Alex Stevens, manager of policy and communications for the Institute for Energy Research, said the report has generated significant interest, including discussions with state officials and testimony before the Maryland Legislature on the relationship between energy policies and electricity prices.

Tom Pyle, president of the Institute for Energy Research, cited federal data showing electricity prices increased 27 percent between January 2021 and January 2025, followed by an additional 11 percent increase from January through September 2025.

Under the Federal Power Act, states have primary authority over electricity generation portfolios, retail pricing and resource planning.

"Americans deserve transparent information on how state decisions directly affect their wallet," Pyle said. "The bottom line is that the decisions that states make, good or bad, have consequences for American families and businesses when it comes to electricity affordability."

Tyler Durden Wed, 07/08/2026 - 08:45

Futures Slide, Oil Jumps After Trump Declares Iran Ceasefire Over

Markets are on the backfoot this morning with equity futures and macro credit under pressure, bond yields spiking, the USD higher, and oil jumping after President Trump thrust geopolitical risks back into focus by declaring the ceasefire between the US and Iran to be over calling it “a waste of time” after the US launched strikes against Iran in response to attacks on ships transiting the Strait of Hormuz. As of 8:00am, S&P 500 futures slid 0.7% and Nasdaq futures slumped 1% dragged lower by memory and chip stocks after the latest kinetic volley.  The latter takes place in the context of mixed tech trade in Asia with the Hang Seng Tech Index up 5%, whilst the South Korean Kospi lost 5.4%. Pre-market semis and Mag7 are being sold as Energy and Staples are the two best sectors; everything else is flat to down. The drawdown in momentum and the broader AI infrastructure trade (~85% correlation between these two cohorts) remains heavily in focus, with the GS High Beta Momentum basket (GSPRHIMO) now surpassing -20% over the past 5 days. This morning, global price action is pointing towards “more of the same” with the primary Momentum tone-setters (Hynix -6% in Korea, SNDK -6%, MU -5%) lower across the board.  Brent crude advanced 5% to around $78 a barrel while WTI breached $75/bbl (+6%) before declining as the Energy complex leads commodities higher. Precious metals are getting hit with mixed bids to Ags and Base metals. Treasury yields are up around 2-3bps across the curve (10Y yield rising to 4.56%) with the market needing to digest a $39bln 10 year note auction ahead of the FOMC minutes. USD is higher.  Higher energy prices feed into inflation expectations and Fed minutes this afternoon take on added significance in the tighter-lipped Warsh era. Gold fell and the dollar wavered.

In premarket trading, all Mag 7 stocks are lower (Meta -1.8%, Nvidia -1.6%, Microsoft -1.4%, Amazon -1.7%, Tesla -1.6%, Alphabet -1.3%, Apple -0.4%). 

• Chipmakers and other AI-linked names are set for more declines on Wednesday as traders continue to rotate out of the sector.
• Energy stocks rally, while airlines and cruise lines slide, after Trump said a tentative ceasefire with Iran is “over,” raising the prospect of an end to peace negotiations and a potential renewal of fighting between the two countries. Chevron (CVX) climbs 2%, while Exxon (XOM) gains 2%.
• Alibaba ADRs (BABA) surge 8% after investors turned optimistic on its earnings and shifted capital into major Chinese internet companies.
• Bath & Body Works (BBWI) falls 4% after Goldman Sachs analyst Kate McShane cut her recommendation on candle and soap retailer to sell. Sentiment on the company is “trending below historical levels,” including Reddit trends and with younger consumers, Goldman’s analyst writes.
• Beazer Homes USA (BZH) climbs 12% after Dream Finders Homes said it has submitted a revised all-cash proposal to acquire the company.
• FuelCell Energy (FCEL) falls 21% after the company priced its upsized underwritten public offering of 10.7 million shares of its common stock.
• MasTec (MTZ) inches 2% higher after the construction company entered into a pact to buy Electrical Specialists for about $1.65 billion, consisting of about $475 million in MasTec stock and about $1.175 billion in cash.
• Navitas (NVTS) is down 7% after Wolfspeed filed a patent infringement lawsuit against the company in the US District Court for the District of Delaware, alleging that a broad range of Navitas products infringes multiple Wolfspeed patents.
• Universal Health Services (UHS) slips 2% after Barclays downgraded the hospital operator to equal-weight, saying the fundamental and regulatory backdrop is turning more negative.

Overnight sentiment was hammered when a retaliation by the US on Iranian targets overnight was followed up by remarks just after 4am ET from US President Trump that the ceasefire with Iran is over, saying that "as far as I’m concerned it’s just a waste of time." The dollar and yields spiked, while WTI crude jumped back above $75 a barrel, Trump's comments, made on day two of the NATO summit in Turkey, followed the US revocation yesterday of a waiver allowing sales of Iranian oil and subsequent strikes against more than 80 targets. Trump meets Ukraine’s Zelenskyy later. A handful of oil carriers appeared to transit through the Strait of Hormuz early Wednesday, even after a spate of strikes on ships rattled owners and prompted at least one supertanker to turn around midway through its crossing.

Trump’s declaration “marks the most serious rupture yet in an agreement that has been fraying for weeks,” said Violeta Todorova, senior research analyst at Leverage Shares. “Markets had been treating the June memorandum of understanding as a durable de-escalation. That complacency now looks fragile.”

Trump overnight also slammed Spain for not contributing enough to NATO and threatened to cut off all trade with the country. 

That said, JPM tried to calm nerves with comments this morning, writing that the situation has not materially changed with neither US / Iran showing a desire for an extended conflict. On the US side, Trump had argued that the ceasefire paused the 60-day limit before he is required to get Congressional approval to extent military hostilities. He was facing resistance to secure additional funding for the war and next year’s military budget during the ceasefire, so another spike to fuel prices adds to that political headwind. On the Iran side, they want legal control of SoH but likely want higher oil prices to pressure Trump and to maintain revenue given the lack of demand for their unsanctioned oil.

“My first read is that investors will not immediately price this as a full return to war, but they also cannot go back to the clean ‘peace dividend’ trade,” said Charu Chanana, chief investment strategist at Saxo Markets. “The bigger point is that any path from ceasefire to durable peace now looks much longer and much more fragile.”

Today's 2 p.m. ET release of the Fed’s June meeting minutes takes on added significance after Warsh shortened the policy statement and declined to contribute to rate forecasts. Bloomberg Economics’ Andrew Sacher expects the account to reinforce the committee’s focus on above-target inflation and its preference to preserve the option of further tightening. The options market is signaling that investors may be overestimating how much the Fed will raise rates this year. Since Warsh said last week that inflation risks have eased, flows in options linked to the Secured Overnight Financing Rate have tilted toward positions that would benefit if the swaps market pares back expectations for further rate hikes.

Elsewhere, China lifted refined fuel export restrictions for the rest of July and allowed a private refiner to resume shipments after a four-month halt. In New Zealand, the RBNZ raised rates by 25bps (expected) with guidance still leading toward hikes, though with a softened tone. Looking ahead, we will receive wholesale inventories for May and the June FOMC meeting minutes. 

In Europe sentiment was hammered with the Stoxx 600 down 1.9% and all sectors ex-energy lower. Energy is the only rising sector, while autos and construction fall the most. Here are some of the biggest movers on Wednesday:

• Jet2 shares surge as much as 17%. Analysts see strong booking momentum amid ebbing geopolitical risks and lower jet fuel prices.
• TGS shares rise as much as 9.6% after the Norwegian geophysical consulting and services firm reported better-than-expected 2Q results.
• Repsol shares gain as much as 4.8% after the Spanish oil company reported a stronger refining margin in 2Q.
• Hikma Pharmaceuticals shares rise as much as 6% after a Betaville report regarding possible takeover interest in the UK pharmaceutical company.
• Kuros Biosciences gains as much as 12% after Berenberg initiated coverage on the stock with a buy recommendation, saying the Swiss company’s growth is “poised to reach an inflection point.”
• Lufthansa drops as much as 6.4% after Citi downgraded the stock to sell from neutral, saying the valuation seems “less compelling” following the recent rally.
• Man Group shares drop as much as 3.4% after UBS downgraded the investment management firm on valuation grounds following strong gains.
• Rio Tinto falls as much as 3.6% in London to its lowest since March after Morgan Stanley cut the stock to underweight from equal-weight, saying the miner’s valuation is stretched given weaker iron ore fundamentals and limited copper exposure.
• Castellum shares drop as much as 4.9% after UBS downgraded the Swedish property firm to neutral from buy, saying “much of the near-term value creation is now reflected in the share price.”
• Vistry shares fall as much as 12% after the homebuilder warned of first-half losses.
• Boku shares plunge by a record 35%, slumping to their lowest level since 2022, after the payments company warned its results for 2026 will be below market expectations.
• Belimo shares fall as much as 7.4% after the Swiss maker of heating, ventilation and air conditioning equipment was cut to sell at Van Lanschot Kempen, which sees a potential increase to guidance as already priced in.

Asian equities fell further after the US President Donald Trump declared the ceasefire between his country and Iran over, escalating geopolitical tensions in the Middle East.  The MSCI Asia Pacific Index fell as much as 1%, after swinging between a loss of 1% and gain of 0.4%. Indian stocks reacted adversely to Trump’s comments, with the benchmark Nifty 50 gauge dropping over 2% and a gauge of volatility spiking 30%. Stocks also extended their decline in Indonesia, which relies heavily on oil imports, while futures on Japanese stocks fell 1.3%. The fresh bout of weakness follows a selloff in technology stocks in South Korea, where Samsung Electronics and SK Hynix were among the major drags. South Korea’s benchmark Kospi fell 5.4%, taking its drop from last month’s all-time high to about 20%. Shares also fell in Japan and Australia, while those in Hong Kong and Singapore advanced. Bucking the trend, a key gauge of Chinese shares listed in Hong Kong climbed 4% earlier in the day, as the AI rotation trade gathered pace in Asia. Investors are pulling money from the chipmakers that powered this year’s rally and hunting for cheaper ways to play the technology boom. Elsewhere, Indonesian equities fell after S&P Dow Jones Indices signaled the country could eventually lose its emerging-market status if concerns over its stock market persist. New Zealand stocks fell as the central bank raised its key interest rate for the first time in three years.

In FX, the Bloomberg Dollar Spot Index is up 0.1%. However, performance versus peers is mixed with Kiwi dollar near the top of the leaderboard after a hawkish hike from the RBNZ

In rates, treasuries extended their late-Tuesday selloff as oil prices mounted sharply after US President Donald Trump said the tentative ceasefire with Iran is over. 2-year yields topped 4.20%, approaching this year’s high, while 10-year exceeded 4.58%, cheapest since May 22. US front-end and belly yields are 2bp-3bp higher on the day, flattening 5s30s spread by around 1bp. 10-year, higher by 2bp, trails steeper increases for German and UK counterparts as they catch up with Tuesday’s US yield surge that occurred after European markets had closed. European bonds tumbled as traders added to wagers that central banks will have little choice but to raise interest rates this year. The yield on 10-year gilts jumped 10 basis points to 4.95%, the highest level in nearly a month. This week’s Treasury auctions continue with $39 billion 10-year reopening at 1pm New York time and conclude with $22 billion 30-year reopening Thursday. Demand was strong for Tuesday’s 3-year new issue, which stopped through by 0.6bp and had a record low dealer allotment. WI 10-year yield near 4.575% is ~4bp cheaper than the June auction, which stopped through slightly in a solid result. Focal points of US session include a 10-year reopening auction and publication of minutes of June FOMC meeting. IG dollar issuance slate includes a KfW $6 billion 2-part offering. Amazon’s $25b offering headlined a six-issuer US investment-grade new issue session Tuesday. Issuers paid about 10bps in new issue concessions on deals that were 2.8 times oversubscribed.

In commodities, Brent crude futures are higher by 6.7% and just above the $79/bbl mark as tensions in the Middle East ratchet higher. Oil extended its gains on renewed US-Iran tensions, raising the prospect of a fresh round of conflict in one of the world’s most important energy-producing regions. This came after the US military launched fresh air strikes in Iran and revoked a waiver that allowed it to sell oil globally. Precious metals are on the back foot with spot gold and silver down 1.2% and 2.5% respectively. Bitcoin has slipped over 3%.

US economic data calendar includes May wholesale inventories (10am) and consumer credit (3pm). Fed calendar empty for the session apart from FOMC minutes release at 2pm

Market Snapshot

Top Overnight News

• US President Donald Trump said a tentative ceasefire with Iran has ended, raising the prospect of an end to peace negotiations and a potential renewal of fighting between the two countries. “For me, I think it’s over. As far as I’m concerned it’s just a waste of time.” BBG
• President Trump slammed Spain for not contributing enough to NATO or spending enough on defense. “Spain is a terrible partner in NATO. They don’t participate. They don’t pay. I don’t want anything to do with Spain. Cut off all trade with Spain,” Trump said at a press conference in Ankara, Turkey. CNBC
• South Korean stocks have entered a technical bear market as investors raise concerns about the long-term prospects of the AI chipmakers that have driven a world-beating rally. The Kospi index is down more than 20 per cent from its record high in June after slipping more than 5 per cent on Wednesday. FT
• China has lifted refined fuel export restrictions for the rest of July and allowed a private refiner to resume shipments after a four-month halt, trade sources ‌said on Wednesday, as the world’s biggest refiner returns towards normal after disruptions from the Iran war. BBG
• The AI rotation trade is gathering pace in Asia as investors pull money from chipmakers and hunt for cheaper ways to play the technology boom. Investors are rotating into one of Asia's most unloved markets, with Alibaba Group Holding Ltd. and Tencent Holdings Ltd. rising after the Kospi Index was pushed to a technical bear market. BBG
• The Reserve Bank of New Zealand raised interest rates Wednesday in what appeared to be a tentative move by policy makers to combat nagging inflation pressures. The official cash rate was raised by 25 basis points to 2.5%. WSJ
• OpenAI said its new AI model GPT-5.6 will be made available to the public tomorrow. The White House lifted restrictions on the model after government-approved entities were given a preview. Axios
• Nvidia’s stock is the cheapest it’s been since before the AI boom, after losing roughly $1 trillion in market value in under two months. BBG
• Wildcatters are racing to secure oil deals in Venezuela, moving faster than Big Oil despite earthquake damage and political uncertainty. Whether the country’s vast reserves can overcome the current challenges remains an open question. BBG
• South Korea's Foreign Ministry said they have signed an MoU with the US and Japan on cooperation to deploy small modular reactors: RTRS.
• The sell off in the Goldman High Beta Momentum (GSPRHIMO) has now surpassed 20% over 5 days, exceeding short term expectations for a summer slump in the factor. This magnitude of sell off at such velocity has not been seen since 2020 when the stay-at-home vs go outside narrative shifted meaningfully towards reopening. It is notable that the current drawdown does not have the same strength of catalyst. Fingers have pointed towards SK Hynix raising and META cloud business.

Iran War

• Trump stated he "thinks" the ceasefire with Iran is "over":  Trump said the Iran ceasefire is over "I think"; as far as I am concerned, it is a waste of time dealing with Iran. On the MoU, "think it is over". Adds, "I do not want to deal with Iran", they are a "bunch of liars".
• US President Trump said (on Iran) he will allow US negotiators to continue to talk if they want. But, "I think this is a waste of time".
• US CENTOM announced that it completed a new round of offensive strikes, hitting over 80 targets with precision munitions. CENTCOM added that forces remain postured and prepared to hold Iran accountable when the agreement is not adhered to or obeyed.
• Several explosions have been heard in Bushehr, Iran, according to Mehr news; Mehr's journalist on Kharg Island denies reported of an attack on Kharg, despite some reported of an incident being published.
• In response, Iran's IRGC said they hit 85 important US military installations in Port Salman, Bahrain's 5th Maritime Zone and Kuwait's Ali Salem Air Base.

A more detailed look at global markets courtesy of Newqsuawk

Asia-Pac stocks traded mixed, with Chinese indices the only region in the green amid multiple IPOs and strength in China's tech space. Sentiment from the US session carried over in the Asia-Pac session, as energy prices surged amid the re-escalation of US-Iran tensions. ASX 200 continued to be weighed on by metals, with the Metals & Mining sector the worst performer, with Materials followed. Energy topped the sector pile Nikkei 225 started on the softer side, briefly returned to the unchanged mark before returning to the downside. KOSPI traded choppy, as the initial weakness briefly reversed to print modest gains. However, weakness returned as the session continued, resulting in the Korea Exchange activating the sidecar on the KOSPI and KOSDAQ. As a result, the KOSPI extended its losses from June peak to 20%, indicating a bear market. Shanghai Comp. and Hang Seng. were the only indices printing gains, with outperformance in the Hang Seng following strength in tech names. The strength can be attributed to two reports: 1) From Reuters, DeepSeek developing its own chip to power AI systems, and 2) from the Information, Zhiphu considering designing its own AI chip.

Top Asian News

• China's MIIT has issued a risk warning regarding the potential security backdoors in the AI programming tool Claude Code.
• South Korean Government said companies with consolidated assets of over KRW 10tln will be required to disclose information on their ESG performance and risks, starting 2028.
• South Korean Finance Minister said they are to watch risk factors around stock market volatility, will enhance FX monitoring system to respond to night-time volatility.
• Japan is considering a change to monetary policy wording in the Honebuto, Asahi reported.

European bourses (STOXX 600 -1.8%) began the session lower amid renewed US-Iran developments which spurred energy benchmarks higher. The move then extended after US President Trump suggested that he thinks the ceasefire with Iran is "over".
European sectors in Europe are entirely negative (excl. Energy +2%) as they react to elevated energy prices.

Top European News

• US President Trump said he is not happy with NATO when it comes to Greenland. Spain is a wasted cause, they do not want to do trade. Cutting off all trade with Spain and all visits. "Do not want to do any more trade with them (Spain)". Treasury Secretary Bessent has been told to cut off all trade with Spain. US is paying too much into NATO. UK and Italy were both terrible in not allowing the US to use military bases. Greenland is not important to Denmark.

FX

• G10s are mostly lower against the Buck excl. commodity exporters CAD and NOK, which are resilient vs. the USD.
• USD rose throughout the morning in reaction to energy strength alongside sour equity sentiment after US President Trump said he thought the Iran ceasefire was over. To briefly summarise developments, yesterday the US Treasury revoked the June 21st Iran-related waiver, General License X, which had allowed Iran to produce, deliver and sell its oil; and US President Trump’s remarks this morning accelerated the move higher in USD/oil with “Iran ceasefire is over "I think" the kicker.
• Kiwi was the clear outperformer post RBNZ, but reversed gains against the Buck after the aforementioned Trump remarks. To briefly recap, the RBNZ hiked rates by 25bps in a unanimous decision, signalling further hikes to bring inflation to the 2% target mid-point; this saw some participants unwind bets for a hold. AUD/NZD appears the preferred vehicle to express the in-line/hawkish decision, now the Buck has picked up.
• JPY continues to underperform amid carry/Terms of Trade implications. USD/JPY remains on a 162.00 handle and has essentially pared that downside seen on potential intervention fears last week having risen throughout the London morning. Reporting overnight via Asahi and Nikkei noted that the Japanese government may tweak a reference to monetary policy in its annual policy agenda to avoid the appearance that it is putting pressure on the BoJ.

Fixed Income

• Fixed income started on the backfoot, as benchmarks gradually moved lower as energy continued to move higher overnight given the US revoked Iran’s oil waiver and then conducted strikes on 80 Iranian targets in retaliation to Iran targeting various cargo vessels on Tuesday.
• The early morning saw modest additional pressure, with Bunds and USTs lower by roughly 40 and five ticks, respectively, at first. The scheduled docket ahead featured supply and a few data points, but we were primarily awaiting comments from the US and/or Iran after the overnight action.
• US President Trump then spoke in Ankara, in a relatively short but packed interview where he said the ceasefire with Iran is over “I think” and specifically on the MoU said, “think it is over”. An update that sparked a marked and continuing move higher in energy, with crude firmer by over 6% and Dutch TTF by over 5%. As such, yields across the curve have jumped, benefiting the short-end most, and curves are bear-flattening globally, though with the US belly faring almost the same as the short-end.
• USTs down to a 108-29 base, lower by 13 ticks. We now look to the US 10yr note auction after Tuesday’s 3yr, and thereafter Fed Minutes for June, which will be scoured for further insight into how the first meeting led by Warsh went and how any discussions/disagreements among the board were presented; with particular reference to any mention around Warsh’s view on forward guidance.
• Bunds went down to around 125.30 following the above energy action and Trump language, lower by over 80 ticks. Energy-related action aside, the main focus point was a dismal first tap of a 2036 Bund, drawing a b/c of just 1.03x. Results of this sent Bunds lower by nearly 10 ticks, to a 125.23 base.
• Gilts opened lower by 57 ticks, acknowledging the US waiver removal yesterday and the tit-for-tat strikes overnight. Thereafter, as Trump spoke, further downside was seen, sending Gilts lower by 130 ticks in total to an 87.16 base. As usual, Gilts underperform amid periods of pronounced energy upside given the sensitivity of the UK market to global benchmarks.
• Germany sold EUR 3.902bln vs exp. EUR 6bln 3.00% 2036 Bund: b/c 1.03x, average yield 3.09%, retention 35%.
• UK sold GBP 1.5bln 0.125% 2028 Treasury Gilts via Tender: b/c 4.97x (prev. 4.28x), average yield 3.989% (prev. 4.219%), tail (prev. 0.3bps).
• Jefferies (JEF) to sell EUR-denominated 7yr noted; guidance seen +175bps to MS.
• Spain has reportedly proposed the EU issue an annual EUR 850bln in bonds to save countries billions of euros in interest costs, POLITICO reported.
• Australia sold AUD 900mln 4.25% 2036 AGBs: b/c 4.55x (prev. 3.86x), average yield 4.8745% (prev. 4.9735%).

Commodities

• Following Iran’s decision to hit Saudi and Qatari tankers, the US struck various sites in Iran. As a result, Iran then hit regional partners, including Bahrain and Kuwait.
• US President Trump, who was speaking at the NATO Summit in Ankara, berated the Iranian regime. He stated that it is a waste of time dealing with Iran, and ultimately stated that he thinks the ceasefire and MoU is “over”. The mention of he “thinks”, gives the US a little bit of optionality on whether the deal is actually over; he stated that he will allow US negotiators to continue to talk. Nonetheless, the risks of a wider escalation remain; markets now await clarification on whether the MoU has officially ended, the Iranian response and also how Qatari/Pakistani mediators react to the comments made by Trump.
• WTI and Brent started the European session with gains in excess of 2%, but surged higher following the Trump comments; currently +5.6%. WTI Aug’26 holds at the top end of a USD 71.75-75.30/bbl range, whilst Brent Sept’26 sits near peaks of USD 75.44-79.26/bbl range. The latter remains well below the levels seen following the initial signing of the Islamabad MoU (USD 85/bbl), which signals some hopes that a) the Strait will remain open, b) the current MoU holds. On this theme, markets remain in backwardation, with front-month Brent prices still higher than second-month; should this flip, it would indicate that traders expect another large-scale supply glut.
• Spot gold (-1.2%) trades lower this morning, and at the bottom end of a USD 4,050-4,133/oz range. Much of the pressure came following the Trump comments, given the USD strength and the inflationary implications of the ceasefire being over. Base metals are broadly lower, given the risk-tone; 3M LME Copper trades at USD 13,190-13,396/t range.
• Kuwait’s Ministry of Electricity said power lines were damaged by shrapnel in recent attacks.
• European Commission, on the ETS revision, said they are still considering how and whether to add international carbon credits. Revision will include permanent domestic carbon removal. Will propose further investment.
• Russia’s Gazprom said Ukraine attacked facilities of gas exports to Turkey; supplies not affected.
• China reportedly lifts restrictions on refined fuel exports for the rest of July, according to sources.
• China purchases at least 5 more US soybean cargoes, Bloomberg reported.
• Japan aluminium premiums for Jul-Sep shipment set at USD 395/t, +12-13% Q/Q.
• US Private Inventory Data (bbls): Crude -0.399mln (exp. -1.5mln), Distillates -1.801mln (exp. +1mln), Gasoline -2.929mln (exp. -1.55mln), Cushing -0.069mln.

Trade/Tariffs

• Spanish PM Spokesperson said the trade comments from US President Trump are business as usual.
• USTR Greer said Canada and Mexico have not lived up to everything.

Geopolitics: Iran Commentary

• Iranian Parliament Speaker Ghalibaf said the US has violated major parts of the MoU, citing US attacks on southern Iran, reinstating oil sanctions and threats of further strikes as MoU violations.
• Iran's Foreign Ministry states that the US activity overnight has "rendered important and fundamental parts of the Memorandum of Understanding on the End of the War ineffective".
• Iranian President Pezeshkian said the US, whether as World Cup host or in its foreign policy, manipulates the rules and resorts to deception, and that Iran rejects such tactics.
• Iran's top joint miliary command said Iran will give a crushing response to America's aggression and terrorist action, and under no circumstances will they allow them to interfere in the affairs of the Strait of Hormuz and its management.
• Advisor to Iran's Supreme Leader said US President Trump intends to attack again and we are fully prepared.
• Iran's Foreign Ministry condemns the US Treasury's move to revoke the temporary suspension of sanctions on Iranian oil sales, will take any measure it deems necessary to safeguard its interests and national security. Iran holds the US government responsible for the consequences of the breach of the Memorandum of Understanding.

Overnight Attacks

• Several explosions have been heard in Bushehr, Iran, according to Mehr news; Mehr's journalist on Kharg Island denies reported of an attack on Kharg, despite some reported of an incident being published. Elsewhere, sirens were reported in Bahrain once again.
• Renewed explosions sounds heard around Iran's Qeshm and Sirik, Mehr reported.
• Iran's army said it targeted the Sheikh Isa Base in Bahrain and warns of more attacks if the US repeats strikes on Iran, Mehr reported.
• Iran's IRGC said that, in response to the US aggression, they hit 85 important US military installations in Port Salman, Bahrain's 5th Maritime Zone and Kuwait's Ali Salem Air Base.
• Iran's IRGC said they downed a US Mq9 drone in the south of Iran, Press TV reported.
• Iran fires several anti-ship missiles and drones towards US Navy warships in the Sea of Oman, Fars reported citing the Middle East Spectator.
• A US official said the strike on Iran was a punitive action, not a proportional response, and that the operation will not end in the short term, CNN reported.

US Commentary

• US President Trump said the Iran ceasefire is over "I think"; as far as I am concerned, it is a waste of time dealing with Iran. On the MoU, "think it is over". Adds, "I do not want to deal with Iran", they are a "bunch of liars".
• US President Trump said (on Iran) he will allow US negotiators to continue to talk if they want. But, "I think this is a waste of time".
• US President Trump said have had some great meetings; attacked very powerfully against Iran last night. Have wasted a lot of time with Iran. Iran does not know what it is doing. Iran shot rockets at the ships, which is why the US shot back. Iran is a "dirty" player, "are scum".
• US President Trump approved the Iran strike plan and ordered it while in Turkey, a US official tells Axios' Ravid; the official said it is still unclear how long the strikes are going to continue.
• US Secretary of Defence Hegseth has cancelled his visit to Israel, N12/Ynet report.

Others

• Turkish President Erdogan said Europe must take more responsibility when it comes to NATO.
• US President Trump said China is attempting to takeover the Panama Canal, will not let this happen. China has been treating the US right. Big fan of Chinese President Xi.
• Ukrainian Armed Forces said Kyiv is under missile attack.
• Israeli fighter jets carried out attacks in Barachit and Beit Yahoun in southern Lebanon.
• A Pakistani Boeing (BA) plane flying to Karachi has crashed, with sources stating the plane was mistakenly targeted by the US, IRIB reported.
• Chevron’s (CVX) Yasa Polaris oil tanker, used for CPC shipments, was attacked by drones off Russia’s Black Sea coast, according to sources.
• Russia’s Gazprom said Ukraine attacked facilities of gas exports to Turkey; supplies not affected.
• Ukraine's Military said it struck two oil refineries, six tankers, bridges and the Borisoglebsk airfield; AIF-NK oil refinery in Nizhny Kamsk was also damaged.

US Event Calendar

• 7:00 am: United States Jul 3 MBA Mortgage Applications, prior 0%
• 10:00 am: United States May F Wholesale Inventories MoM, est. 0.3%, prior 0.3%
• 2:00 pm: United States FOMC Meeting Minutes

DB's Jim Reid concludes the overnight wrap

Asian equity markets are largely lower this morning as investors digest a significant escalation in US-Iran tensions overnight. American forces launched strikes against more than 80 targets in Iran, including air defence systems, command-and-control networks, coastal radar installations, and anti-ship missile capabilities, in response to recent attacks on commercial shipping in the Strait of Hormuz. The strikes were accompanied by the US Treasury’s decision to revoke a waiver that had allowed new Iranian oil sales, a move that threatens to undermine the fragile US-Iran interim peace agreement reached last month.

The developments have reignited concerns about energy supplies and geopolitical risk, helping Brent crude rise more than 2% and trade near $76/bbl this morning after rising more than 5% yesterday, driven by the fresh attacks on ships in the Strait of Hormuz, with Monday seeing the most incidents since the US-Iran interim agreement came into effect on June 17. Iran has condemned both measures as violations of the agreement and vowed a response, raising concerns that the fragile peace process reached last month could unravel before negotiations on a permanent settlement are completed. While US officials have stressed that talks towards a longer-term accord continue, the latest escalation represents the most serious test yet for the ceasefire.

Against this backdrop, risk sentiment across Asia is weak but not as much as you may have imagined given the attacks. S&P, Nasdaq and Stoxx futures are all pretty much flat with the rest of Asia down or up depending on which side of the tech stack they sit on.
The KOSPI losses have accelerated as I'm typing, currently down -5.57% in what seem very fast markets with the Nikkei -0.96%, and the S&P/ASX 200 down -0.49%. In contrast, mainland Chinese equities are firmer ahead of tomorrow’s June inflation report, with the CSI 300 (+0.61%) and Shanghai Composite (+0.52%) moderately higher, whilst the Hang Seng (+2.38%) is outperforming as technology stocks there recover. However, they are just reopening after their lunchtime break as I type so given the vol elsewhere this could change by the time you read. 

Ahead of the overnight moves, markets struggled to gain traction yesterday, as the jump in oil prices revived familiar fears about stagflation. That led to clear pain for US Treasuries. For instance, the 10yr yield was up +8.2bps on the day to 4.55%, whilst the 30yr yield (+7.13bps) closed above 5% for the first time in nearly a month, at 5.06%. And on top of the oil moves, those trends got a fresh push from the NY Fed’s latest Survey of Consumer Expectations. It showed 1yr inflation expectations up to 3.7%, the highest since September 2023, whilst 3yr expectations were up to 3.3%, the highest since June 2022. So that leant in a hawkish direction and meant investors dialled up their expectations for Fed rate hikes, with the amount priced by the December meeting up +5.1bps on the day to 34bps.

As all that was happening, there wasn’t much respite for equities either, as chipmakers saw a renewed slump that took the Philly semiconductor index (-4.65%) to its lowest in nearly a month. Indeed, the index is now -15.95% beneath its highs in mid-June, after just posting its best quarter ever in Q2. To be fair it wasn’t all bad news, and US equities saw a rotation into defensive sectors. Energy (+3.02%), healthcare (+1.55%), consumer staples (+0.99%) and utilities (+0.91%) all had a strong performance. Moreover, a majority of the S&P 500’s constituents were still higher, with 283 companies rising on the day. But the chip declines still dragged on the overall performance, with the S&P 500 ultimately down -0.45%.  

Over in Europe, political developments were in focus yesterday in both France and the UK. In France, Marine Le Pen said she’d be a candidate in the 2027 French presidential election, after appeal judges shortened a ban on her running for office. The first round isn’t happening until April 18, with the run-off then two weeks later on May 2, but today’s news means that the outlines of the campaign are coming into view. 

Meanwhile in the UK, Reform UK leader Nigel Farage resigned as an MP, forcing a by-election that Farage himself is going to stand in. His resignation follows questions around a £5m gift from a Reform UK donor, which had triggered a parliamentary standards probe. Moreover, last weekend the Sunday Times reported that he hadn’t declared benefits from a long-time ally, George Cottrell. So with Farage under growing scrutiny, calling a by-election was seen as a way for him to regain momentum, particularly after Reform UK underperformed polls in the recent Makerfield by-election won by Andy Burnham. However, all the main political parties have said they won't stand a candidate, effectively calling it a political charade. So it'll be interesting to see if it backfires. Tomorrow will also see nominations open for the Labour leadership contest that will decide the next PM, although former Greater Manchester Mayor Andy Burnham remains the only declared candidate.  

Amidst all the political developments, there wasn’t too much of a market reaction in Europe, with bond yields moving higher across the board because of the oil price rise. So yields on 10yr bunds (+4.6bps), OATs (+5.6bps) and BTPs (+5.8bps) all moved higher on the day, with the STOXX 600 (-0.65%) also falling back as well.  

The NATO leaders’ summit will continue for a second day today, with President Trump saying yesterday that the US “could remove all our soldiers out of Europe” and reiterated his desire for Greenland to be under US control. Otherwise, there were multiple reports of defence industry deals that had been agreed, with Bloomberg reporting that was over $50bn.  

Shifting back to Asia to close, and the Reserve Bank of New Zealand (RBNZ) has implemented its first key interest rate hike in three years, raising the official cash rate to 2.50% from 2.25%. This move, which was expected, signals the central bank's intention to transition to a less stimulatory monetary setting in an effort to curb inflationary pressures. The decision follows a split vote at the bank's previous meeting in May, where Governor Anna Breman had used her casting vote to maintain the cash rate. Following the decision, the New Zealand dollar strengthened by +0.42% to just above 57 cents against the US dollar, with the yield on the policy-sensitive two-year notes increasing by +4.5bps, now trading at 3.37%, amidst reinforced expectations for additional rate hikes this year.

Looking at the day ahead, the highlights will include the minutes of the FOMC’s June meeting, along with remarks from the ECB’s Kocher, Moulin, Nagel and Dolenc. Otherwise there isn’t much data, although we’ll get Sweden’s CPI for June, France’s current account balance for May, and US consumer credit for May.

Tyler Durden Wed, 07/08/2026 - 08:32

NATO Chief Backs Renewed US Strikes On Iran As 'Absolutely Necessary' 

Even if most individual NATO members are still reluctant to jump on board Trump's Iran war, NATO Secretary-General Mark Rutte is busy praising American military action there amid the annual summit in Ankara.

Rutte has freshly described the overnight fresh US military strikes on Iran in response to Tehran attacking multiple international shipping vessels "absolutely necessary". Rutte voiced agreement with Trump that Iran's actions violated the MoU ceasefire agreement with the US, which required a response.

Getty Images

"When you have a ceasefire and Iran ​is basically violating the ceasefire, I think it is totally ​crucial that the US forcefully react," Rutte told reporters.

The new US actions resulted in a swift Iranian response, in the form of Iranian drones and missiles on Kuwait and Bahrain, which the latter country decried as a "dangerous escalation".

"The era of bullying and extortion is over," Iran’s Parliament Speaker Mohammad Bagher Qalibaf wrote on X. "It leads nowhere. We don’t fold."

As we reported earlier, President Trump has called the Iranians "scum" and declared the ceasefire "over": "To me, I think it's over. I don't want to deal with them anymore; they're scum," Trump told reporters. 

All this naturally brings up the question of 'what's next?'

Certainly the Iranians seem in the mood for a fight, and Washington feels it can't let attacks on international shipping slide - so all for this could portend a return to all-out war.

Reporter: What is your reaction to the recent U.S. attacks on Iran?

NATO's Rutte: I think it was absolutely necessary. Iran is violating the ceasefire. pic.twitter.com/kd6Nr9Dtwx

— Clash Report (@clashreport) July 8, 2026

It's been 129 days since the start of Operation Epic Fury - a conflict which US officials had promised would be 'fast' - and the public has been 'assured' it is not a quagmire. Yet here we are.

As for Rutte, it's unclear what his strategy for Iran, if any, might be. He's clearly trying to keep Trump happy, playing Trump whisperer in Turkey, vis-a-vis the NATO alliance and its continued funding. Here was some Trump commentary on NATO 'unity' in Ankara:

“Spain is a terrible partner in NATO. They don’t participate. They don’t pay. I don’t want anything to do with Spain. Cut off all trade with Spain, please, including visits,” he said at a press conference in Ankara with NATO Secretary General Mark Rutte.

Trump also reignited inter-alliance tensions when he resurfaced his desire to take control of Greenland, a territory of NATO member Denmark.

The NATO chief has also newly stated could be no doubt over the "complete commitment of the United States to NATO" - which he claimed also defends the United States and is thus invaluable.

via CNBC

"But there's ​also the expectation ​that the ⁠Europeans and the Canadians will equalize their spending with the United States, which I ​think is completely fair," he added.

"The good ​news ⁠is that this is the big win today. It's the loss for Putin, it is a win for President ⁠Trump ​that the Europeans and the Canadians ​are doing exactly that," Rutte said.

Tyler Durden Wed, 07/08/2026 - 08:25

The post The Sanders-Trump Plan for an AI Sovereign Wealth Fund: Don’t Buy It appeared first on CEPR.

Senate Defense Bill Would Establish Fund For Government To Buy Into Private Companies

Authored by Kevin Stocklin via The Epoch Times,

A new bill in Congress would enshrine into law the ability of the executive branch to buy into private companies, and create a fund to finance the purchases.

The Pentagon in Arlington, Va., in this file photo. Carolyn Kaster/AP

The current Senate version of the National Defense Authorization Act gives the Defense Department explicit authority to take ownership stakes in companies. A provision titled "Equity Investments and Related Matters" establishes a new "Department of Defense Equity Investment Account" within the Treasury Department, which the Defense Department can use to make equity investments in critical minerals, materials, chemicals, and batteries.

While administration officials say this move allows the Defense Department to better align its goals with the private sector and for taxpayers to earn a return if the companies do well, critics have raised concerns about establishing a legal basis for government expansion into the private sector.

Government investments in companies under this bill would be limited to a 50 percent stake, non-voting shares, and a dollar cap of $500 million.

Michael Duffey, under secretary of defense for acquisition and sustainment, stated in January that the Trump administration is "fundamentally shifting our approach to securing our munitions supply chain."

"By investing directly in suppliers we are building the resilient industrial base needed for the Arsenal of Freedom," Duffey said.

The Pentagon has been actively buying stakes in private companies over the past year, including a $400 million investment in MP Materials, a rare-earths mining company, in 2025, and a $1 billion investment a L3Harris Technologies, a rocket motor manufacturer, in April, as well as a 10 percent stake in chipmaker Intel.

"Equity ownership can align incentives in ways that grants and subsidies cannot," Carliss Chatman, a law professor at Southern Methodist University, told The Epoch Times.

"If taxpayers are assuming significant financial risk to help develop strategically important industries, an equity stake allows the public to participate in the upside if those investments succeed," she said. "Equity may also provide the government with governance rights, access to information, or long-term alignment that grants generally do not."

Potential For Conflicts Of Interest

Critics, however, say this initiative marks a new expansion of the state into private industry. While the U.S. government has taken stakes in banks, insurers, and carmakers in the past, those have been short-term measures to rescue companies from bankruptcy, and typically done with congressional approval and oversight.

"The problem begins with creating the statutory architecture for a Pentagon stock portfolio in the first place," Cato economist Tad DeHaven stated in a June 16 report. "That means Congress would not merely be tolerating a one-off emergency action but would instead provide the Pentagon with a standing legal pathway to acquire ownership stakes in private companies."

The Defense Department can legitimately support strategic industries through grants, loans, and government contracts, DeHaven states, but "ownership means continuing federal financial interest in a company's valuation, which is precisely what creates the favoritism, conflict of interest, and political pressure risks Congress should be avoiding."

Duffey stated at a March 4 House Armed Services Committee hearing that these equity investments "create a partnership with industry, an opportunity, not only for government to provide capital to lead to the kind of growth such as in the L3 deal, but it also crowds in additional private capital."

However, the purchases have drawn scrutiny. Critics say that the Defense Department's investment in L3 Harris Technologies could create a conflict of interest, with the government's role as L3's largest customer and decision-maker regarding procurement, as well as a shareholder that will benefit if the company performs well.

This raises questions about whether procurement decisions will be truly impartial, analysts say, given that companies such as Northrop Grumman and Anduril Industries, in which the state has no stake, also manufacture rocket motors and compete in the same markets as L3.

"More money can help, but we also don't want to discourage fair competition that encourages people to get into this space," Rep. Adam Smith (D-Wash.) stated at the House Armed Services Committee hearing. "If they think the government's going to come in and just put their their thumb on the scale, it could discourage some of the investment we've seen."

State ownership raises other issues, as well.

Corporate Governance

"Equity ownership introduces governance questions that grants typically avoid," Chatman said.

"Once the government becomes a shareholder, questions arise regarding voting rights, fiduciary expectations, political influence over corporate decision-making, and eventual exit strategies," she said. "The legal design of the investment therefore matters as much as the decision to invest itself."

Federal ownership of private companies is becoming popular on both sides of the political aisle. Sen. Bernie Sanders (I-Vt.) recently proposed the American A.I. Sovereign Wealth Fund Act, in which the government would take a 50 percent stake in America's largest artificial intelligence companies.

"This would guarantee that the trillions created by AI are used to improve the lives of all of us - and block oligarch decisions that harm the American people," Sanders posted on X on June 1.

Critics, however, say this is a slippery slope to more government control over Americans' private lives. They point to attempts by the Biden administration to pressure private companies to censor Americans and to fire employees who refused COVID-19 injections, as well as the Canadian government's use of private banks and insurance companies to crush truckers' protests of that country's COVID-19 policies.

"Consider the Biden administration's pressure applied to social media firms during the COVID lockdowns," Jeffrey Degner, a policy expert at the American Institute for Economic Research, told the Daily Signal. "Imagine the silencing of free speech if the government had already taken ownership stakes in these firms!"

Reuters contributed to this report.

Tyler Durden Wed, 07/08/2026 - 08:05

My mid-week morning reads:

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

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

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

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

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

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

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

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

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

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

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

 

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

 

America at 50, 100, 150, 200 & 250

Source: Bruce Melhman

 

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

How America's Wealth Distribution Has Changed Over The Last 40 Years

Wealth reflects the value of everything households own, including homes, stocks, businesses, and savings, minus what they owe.

Because different wealth groups own very different mixes of assets, long-term market trends can reshape how the nation’s wealth is divided.

This graphic, via Visual Capitalist's Boyan Girginov, tracks how U.S. household wealth has shifted across wealth groups from Q3 1989 to Q4 2025 using data from the Federal Reserve’s Distributional Financial Accounts.

Wealth of the Top 1% vs. the Bottom 90%

The table below shows how the wealth distribution has changed over the last 35 years:

The top 1% built its wealth primarily through stocks and businesses, assets that have soared in value for decades. In fact, every group below the top 1% has lost share since 1989: even the next 9% of households, from the 90th to 99th percentiles, slipped from 38.0% to 36.4%.

Wealth further down the ladder is tied mostly to the family home, which appreciates far more slowly than the stock market. Much of the bottom 50%’s net worth is home equity, and many households in that group have little or no net worth at all. That’s why the gap between the top and the bottom has widened over the last 36 years.

How Markets Move Each Group’s Share

Market swings move each group’s share differently, depending on the assets its households own.

Every boom rewards whoever holds financial assets, and those gains compound: between 1989 and 2025, the top 0.1% increased its share of household wealth from 8.6% to 14.5%, while the top 1% as a whole climbed from 22.8% to 31.9%.

Busts fall hardest on those with the least cushion. The 2008 housing crash crushed the value of ordinary households’ main asset, and the bottom 50%’s share eventually fell to a record low of 0.4% before recovering to 2.5% today.

Over the full period, no group lost more ground than the upper-middle 40%, households between the 50th and 90th percentiles, whose share slid from 35.7% to 29.2% as home values trailed the stock market.

Wealth Distribution by Income Segment (1989-2025)

See all the data for the last 36 years below:

Time Period Top 0.1% Top 1%
(excl. top 0.1%) Top 10%
(excl. top 1%) Upper-Middle 40%
(excl. top 10%) Bottom 50% Q3 1989 8.6% 14.2% 38.0% 35.7% 3.5% Q4 1989 8.7% 14.2% 37.9% 35.7% 3.4% Q1 1990 8.6% 14.1% 37.7% 36.1% 3.5% Q2 1990 8.7% 14.2% 37.6% 36.1% 3.4% Q3 1990 8.5% 14.0% 37.3% 36.7% 3.5% Q4 1990 8.7% 14.1% 37.2% 36.4% 3.6% Q1 1991 8.9% 14.2% 37.0% 36.3% 3.5% Q2 1991 8.8% 14.2% 36.9% 36.5% 3.5% Q3 1991 8.8% 14.3% 36.6% 36.6% 3.7% Q4 1991 9.1% 14.4% 36.5% 36.3% 3.7% Q1 1992 9.0% 14.4% 36.3% 36.5% 3.8% Q2 1992 8.9% 14.3% 36.3% 36.7% 3.8% Q3 1992 8.9% 14.1% 36.2% 36.7% 4.1% Q4 1992 9.2% 14.3% 36.1% 36.4% 4.0% Q1 1993 9.5% 14.5% 36.1% 36.1% 3.8% Q2 1993 9.6% 14.5% 36.0% 36.1% 3.8% Q3 1993 9.8% 14.7% 35.7% 36.0% 3.8% Q4 1993 10.1% 14.8% 35.6% 35.8% 3.7% Q1 1994 10.2% 14.9% 35.5% 35.9% 3.5% Q2 1994 10.3% 15.0% 35.3% 35.9% 3.4% Q3 1994 10.5% 15.1% 35.0% 35.9% 3.5% Q4 1994 10.8% 15.2% 34.8% 35.7% 3.5% Q1 1995 10.9% 15.4% 34.7% 35.5% 3.5% Q2 1995 11.1% 15.6% 34.2% 35.5% 3.6% Q3 1995 11.4% 15.9% 33.9% 35.1% 3.7% Q4 1995 11.5% 15.9% 34.0% 34.9% 3.6% Q1 1996 11.5% 15.9% 34.2% 35.0% 3.5% Q2 1996 11.4% 15.9% 34.2% 35.1% 3.4% Q3 1996 11.3% 15.8% 34.3% 35.2% 3.4% Q4 1996 11.4% 15.8% 34.5% 35.0% 3.4% Q1 1997 11.2% 15.7% 34.6% 35.0% 3.4% Q2 1997 11.4% 15.9% 34.7% 34.6% 3.4% Q3 1997 11.4% 15.9% 34.8% 34.4% 3.4% Q4 1997 11.5% 16.0% 35.0% 34.2% 3.3% Q1 1998 11.7% 16.1% 35.1% 33.8% 3.3% Q2 1998 11.7% 16.1% 35.2% 33.8% 3.2% Q3 1998 11.2% 15.9% 35.1% 34.3% 3.5% Q4 1998 11.5% 16.2% 35.4% 33.6% 3.3% Q1 1999 11.2% 16.2% 35.5% 33.7% 3.4% Q2 1999 11.3% 16.4% 35.6% 33.5% 3.2% Q3 1999 11.0% 16.3% 35.6% 33.8% 3.3% Q4 1999 11.3% 16.6% 35.9% 32.9% 3.2% Q1 2000 11.2% 16.7% 35.9% 33.0% 3.2% Q2 2000 10.9% 16.6% 35.9% 33.4% 3.2% Q3 2000 10.7% 16.6% 35.8% 33.6% 3.3% Q4 2000 10.4% 16.4% 35.8% 34.2% 3.2% Q1 2001 9.9% 16.2% 35.7% 35.0% 3.2% Q2 2001 9.9% 16.3% 35.8% 34.9% 3.1% Q3 2001 9.6% 16.0% 35.8% 35.6% 3.1% Q4 2001 9.7% 16.2% 35.9% 35.3% 3.0% Q1 2002 9.6% 16.2% 36.0% 35.3% 3.0% Q2 2002 9.4% 16.2% 36.0% 35.5% 2.9% Q3 2002 9.0% 16.0% 36.0% 36.0% 3.0% Q4 2002 9.0% 16.1% 36.0% 36.0% 2.9% Q1 2003 8.8% 16.0% 36.2% 36.1% 2.8% Q2 2003 9.2% 16.2% 36.5% 35.5% 2.6% Q3 2003 9.2% 16.3% 36.5% 35.3% 2.6% Q4 2003 9.5% 16.5% 36.6% 34.8% 2.6% Q1 2004 9.9% 16.7% 36.5% 34.4% 2.5% Q2 2004 9.9% 16.7% 36.5% 34.3% 2.6% Q3 2004 10.0% 16.8% 36.5% 34.2% 2.5% Q4 2004 10.2% 16.8% 36.6% 33.9% 2.5% Q1 2005 10.2% 16.7% 36.7% 33.9% 2.5% Q2 2005 10.4% 16.8% 36.9% 33.6% 2.4% Q3 2005 10.5% 16.8% 36.9% 33.3% 2.5% Q4 2005 10.5% 16.7% 36.9% 33.3% 2.5% Q1 2006 11.0% 16.9% 37.1% 32.6% 2.4% Q2 2006 11.0% 16.8% 37.2% 32.6% 2.4% Q3 2006 11.1% 16.9% 37.3% 32.4% 2.4% Q4 2006 11.3% 16.9% 37.4% 32.0% 2.3% Q1 2007 11.6% 17.0% 37.6% 31.6% 2.2% Q2 2007 11.7% 17.0% 37.8% 31.3% 2.1% Q3 2007 11.9% 17.1% 38.0% 31.0% 2.0% Q4 2007 11.8% 17.0% 38.3% 31.2% 1.7% Q1 2008 11.6% 16.9% 38.5% 31.5% 1.5% Q2 2008 11.4% 17.0% 38.6% 31.5% 1.5% Q3 2008 11.2% 17.0% 38.9% 31.9% 1.2% Q4 2008 10.6% 17.1% 38.8% 32.5% 1.0% Q1 2009 10.3% 17.1% 39.0% 32.9% 0.7% Q2 2009 10.3% 17.3% 39.2% 32.5% 0.7% Q3 2009 10.6% 17.5% 39.4% 31.9% 0.7% Q4 2009 10.5% 17.6% 39.6% 31.8% 0.6% Q1 2010 10.6% 17.6% 39.7% 31.6% 0.5% Q2 2010 10.5% 17.6% 39.9% 31.5% 0.5% Q3 2010 10.8% 17.7% 40.0% 31.0% 0.5% Q4 2010 11.0% 17.8% 40.1% 30.7% 0.4% Q1 2011 11.3% 17.9% 40.0% 30.5% 0.4% Q2 2011 11.3% 17.8% 39.9% 30.5% 0.4% Q3 2011 11.1% 17.7% 39.8% 31.0% 0.4% Q4 2011 11.3% 17.7% 39.8% 30.8% 0.4% Q1 2012 11.5% 17.9% 39.7% 30.4% 0.4% Q2 2012 11.6% 17.8% 39.6% 30.5% 0.6% Q3 2012 11.8% 17.8% 39.5% 30.3% 0.6% Q4 2012 11.8% 17.8% 39.4% 30.3% 0.7% Q1 2013 12.0% 17.8% 39.4% 30.2% 0.7% Q2 2013 12.0% 17.6% 39.4% 30.2% 0.8% Q3 2013 12.1% 17.6% 39.3% 30.1% 0.9% Q4 2013 12.2% 17.6% 39.4% 30.0% 0.9% Q1 2014 12.3% 17.7% 39.4% 29.7% 0.9% Q2 2014 12.5% 17.9% 39.3% 29.3% 1.0% Q3 2014 12.5% 17.9% 39.3% 29.3% 1.0% Q4 2014 12.6% 18.0% 39.4% 29.1% 1.0% Q1 2015 12.6% 18.0% 39.3% 28.9% 1.0% Q2 2015 12.7% 18.1% 39.4% 28.8% 1.1% Q3 2015 12.5% 18.0% 39.4% 29.0% 1.1% Q4 2015 12.5% 18.1% 39.3% 28.9% 1.2% Q1 2016 12.5% 18.1% 39.3% 28.9% 1.2% Q2 2016 12.6% 18.2% 39.4% 28.7% 1.2% Q3 2016 12.6% 18.2% 39.2% 28.7% 1.3% Q4 2016 12.5% 18.2% 39.2% 28.8% 1.3% Q1 2017 12.5% 18.2% 39.3% 28.7% 1.3% Q2 2017 12.5% 18.2% 39.3% 28.6% 1.4% Q3 2017 12.5% 18.2% 39.3% 28.6% 1.4% Q4 2017 12.5% 18.3% 39.3% 28.4% 1.4% Q1 2018 12.4% 18.2% 39.3% 28.6% 1.5% Q2 2018 12.3% 18.2% 39.4% 28.5% 1.6% Q3 2018 12.4% 18.3% 39.5% 28.4% 1.5% Q4 2018 11.9% 18.1% 39.6% 28.8% 1.6% Q1 2019 12.3% 18.3% 39.7% 28.1% 1.6% Q2 2019 12.3% 18.3% 39.7% 28.2% 1.6% Q3 2019 12.1% 18.3% 39.7% 28.2% 1.7% Q4 2019 12.4% 18.2% 39.5% 28.2% 1.7% Q1 2020 11.7% 17.5% 39.3% 29.6% 1.8% Q2 2020 12.3% 17.6% 38.9% 29.3% 2.0% Q3 2020 12.5% 17.5% 38.6% 29.3% 2.1% Q4 2020 13.0% 17.6% 38.3% 29.0% 2.2% Q1 2021 13.2% 17.5% 37.9% 29.1% 2.3% Q2 2021 13.4% 17.4% 37.6% 29.2% 2.3% Q3 2021 13.5% 17.3% 37.4% 29.4% 2.4% Q4 2021 13.7% 17.2% 37.2% 29.4% 2.4% Q1 2022 13.6% 16.9% 36.9% 30.1% 2.5% Q2 2022 13.1% 16.3% 36.5% 31.3% 2.7% Q3 2022 13.2% 16.3% 36.4% 31.4% 2.7% Q4 2022 13.4% 16.5% 36.5% 31.0% 2.6% Q1 2023 13.5% 16.6% 36.5% 30.8% 2.6% Q2 2023 13.5% 16.6% 36.4% 30.9% 2.6% Q3 2023 13.4% 16.5% 36.4% 31.1% 2.5% Q4 2023 13.6% 16.7% 36.5% 30.7% 2.5% Q1 2024 13.7% 16.8% 36.5% 30.5% 2.5% Q2 2024 13.7% 16.8% 36.4% 30.6% 2.5% Q3 2024 14.0% 16.9% 36.5% 30.2% 2.4% Q4 2024 14.0% 17.0% 36.4% 30.1% 2.5% Q1 2025 13.9% 16.9% 36.4% 30.3% 2.5% Q2 2025 14.1% 17.1% 36.4% 30.1% 2.5% Q3 2025 14.4% 17.3% 36.4% 29.4% 2.5% Q4 2025 14.5% 17.4% 36.4% 29.2% 2.5%

If you enjoyed today’s post, check out The Global Wealth Pyramid in 2025 on Voronoi.

Tyler Durden Wed, 07/08/2026 - 05:45

Spain: 70% Of Tested 'Unaccompanied Minor' Immigrants Are Actually Adults

Via Remix News,

The Spanish city of Madrid has delivered a stark confirmation of long-standing suspicions about unaccompanied foreign immigrants claiming to be minors. When this group undergoes rigorous medical age verification, 70 percent turn out to be adults over 18.

This is not a handful of isolated incidents but a systemic pattern that has become the norm in Spain’s capital. The findings, detailed in official data and reported by Spanish outlet El Debate, underscore a growing “farce” in the handling of unaccompanied minor claims across the country.

In 2024, authorities in the Madrid region opened 848 age-determination proceedings for individuals claiming to be unaccompanied foreign minors — a sharp increase from 482 the previous year. More than half of these cases were archived because the claimants abandoned the process before completing the key medical test, which is a wrist X-ray for bone age assessment.

Of the 378 individuals who underwent the test, only 112 were confirmed as minors, while 266 were determined to be adults — approximately 70 percent.

The number of detected frauds tripled compared to the prior year. Since 2018, Madrid has handled more than 11,000 unaccompanied foreign minors in its protection system. In 2024 alone, 2,442 new young people entered the system. The regional government has already filed 29 police complaints after its own checks revealed adults improperly placed in minor-protection facilities.

Nationally, the Fiscalía General del Estado reported 7,562 pre-procedural age-determination cases in 2024. Of these, 2,457 concluded the individuals were adults, while many others either abandoned proceedings or received the benefit of the doubt.

Real benefits for fraud

As Remix News has reported in the past, claiming minor status grants significant advantages under Spanish and EU rules, including placement in specialized protection centers with housing, education, healthcare, and legal safeguards.

There is also significantly greater difficulty in deportation; and, in many cases, pathways to family reunification or residence permits unavailable to adults. Many claimants disappear from centers once age verification begins, avoiding confirmation of their true age.

Similar fraud seen across Europe

This Madrid revelation is far from unique. Remix News has extensively covered parallel cases of age fraud by migrants claiming unaccompanied minor status throughout Europe, often involving the same nationalities, notably Algerians, Moroccans, Tunisians, and Afghans.

France has seen some of the starkest figures. In the Marne department, bone analyses of 240 individuals claiming to be unaccompanied minors found that 80 percent (192 people) were actually adults.

French MP Charles de Courson highlighted the financial burden in a parliamentary speech, “Eighty percent of unaccompanied migrants in France’s northeast Marne department who declared themselves thus are not minors, with the cost of caring for these 160 false minors costing €5,000 per month, which equals for €60,000 per year for each one.”

A separate 2019 experiment by the Paris prosecutor’s office examined 154 formally identified “minors” and found 91.6 percent (141) were adults via medical exams. Prosecutors noted that adults were systematically exploiting the protective regime established for minors under a 1945 law.

Belgium reported comparable results. A study of data from Justice Minister Koen Geens showed that of 4,563 migrants declaring themselves minors, authorities doubted 2,546 claims. Age tests on a sample revealed that 73.7 percent were over 18. Flemish MP Tom Van Grieken stated bluntly: “Asylum seekers guilty of age fraud should be denied the right to asylum.”

Sweden recorded an even higher rate: health authorities found 84 percent of tested “child migrants” were actually 18 or older. In Germany, forensic examinations in Münster showed around 40 percent of examined “unaccompanied minor refugees” were demonstrably adults, with many sharing suspicious January 1 birthdates — a common indicator of fabricated identities.

Remix News has also documented specific incidents in Spain itself that align with this pattern. In one Madrid case reported in October 2025, a Moroccan man accused of raping a 14-year-old girl claimed to be 17; age verification determined he was likely 23, with 14 prior convictions, leading to his case being transferred to adult court.

A European Parliament fact-finding mission to Spain’s Canary Islands similarly found that roughly half of unaccompanied minors there were actually adults, highlighting failures in age assessment amid high illegal arrivals.

An issue across Europe

Across Europe, the incentive structure remains largely unchanged, with minor status providing immediate protection and resources while adult status often leads to faster removal proceedings. Medical tests, such as bone density, dental, or wrist X-rays, are imperfect but consistently reveal high fraud rates when applied. Some countries are reacting with stricter testing, but often left-wing parties want to ban such tests altogether.

The Madrid Fiscalía’s 2024 data adds Spain to the growing list of European jurisdictions where official statistics confirm that the “unaccompanied minor” category is being heavily exploited. With over 11,000 cases handled in Madrid alone since 2018 and frauds tripling in a single year, the scale suggests the problem is not anecdotal but structural.

As European governments grapple with migration pressures, these consistent findings from across Europe show a reality that is not going away. Without adequate and robust testing age verification and meaningful consequences for fraud, the EU system will continue to reward deception from Europe’s rapidly growing illegal migrant population.

Read more here...

Tyler Durden Wed, 07/08/2026 - 05:00

Trump Signals Willingness To Sell Turkey F-35 Jets Despite Loud Netanyahu Protests

Israel and Turkey are in a bit of a tug-of-war with President Trump and potential major arms deals hanging in the balance. Israeli Prime Minister Benjamin Netanyahu had vehemently complained to Trump in a Friday call about Turkish President Recep Tayyip Erdoğan's escalating anti-Israel rhetoric, officials cited in Axios said.

Netanyahu specifically pressed Trump block sales of weapons systems to Turkey, especially those that would help Turkey modernize its air force. Of central issue remains potential F-35 transfer, which if carried through would outrage Israeli leaders. Turkey was blocked from the program in 2019 after the NATO member state went through with acquiring Russia's S-400 air defense system on fears that the US advanced fighter jets classified systems could be compromised.

via Associated Press

Also central to current negotiations with Washington is a $700 million deal for new engines for Turkey's fighter jets. Turkey's welcome ceremony for Trump and his entourage was expectedly lavish, complete with honor guards and military bands, and even cannons firing.

Erdogan has said that Trump is adding "might and strength" to the summit. Trump has in turn said of the Turkish president, "We are great friends" - and extolled the beauty of Turkey's modernized infrastructure. Turkey is a country to be "reckoned" with, Trump said soon after touching down, "and the nice part is that because of the relationship that we have, it’s all gone very well."

Most importantly, Trump, signaled his intent to sell Turkey F-35 fighter jets, per CNN:

US President Donald Trump said he would soon decide whether to sell Turkey F-35 fighter jets despite a Congressional ban as he praised the country as more loyal than other recipients of the plane.

"We have a better relationship with Turkey, and Turkey has been in many ways much more loyal than other countries that we think would be loyal," Trump said, arguing many believe the country should be able to purchase the F-35s, despite its purchase of a Russian air defense system.

Trump said the sales are "something certainly we consider."

"It’s a great plane, it’s the best, currently the best plane by far, and certainly something we will consider," he said.

This is after prior reporting indicated that "US officials told CNN earlier that Trump is expected to signal this week that he is willing to sell the country F-35s, reversing a ban he put in place during his first term that has since been ratified into law." Erdogan has newly stated that Turkey has been promised five F-35 jets.

Reporter: Mr. President, are you going to sell F-35s to Türkiye, and what about the legal restrictions?

Trump: We're going to make a decision. I would think that many people — I can tell, many people sitting right here — would say, why wouldn't we do that?

We have a better… pic.twitter.com/VkFnKWorxk

— Clash Report (@clashreport) July 7, 2026

However, getting around the congressional ban remains to be seen. But Trump said enough in Ankara on Tuesday to put the Israelis on edge. 

Netanyahu told Fox News on Monday that "Turkey is a great country, but it's governed by a man who calls openly for the annihilation of Israel" - in reference to Erdogan. "He occupies half of Cyprus, a NATO country. He's threatening Greece, another NATO country, and he talks openly about conquering Jerusalem."

The Israeli leader also said that giving Ankara F-35s or fighter jet engines would "upset the power balance in the Middle East, which is ultimately guaranteed by Israeli air superiority and also by, I think, by America's posture in the Middle East."

“This is a battle of freedom versus fanaticism… the ones that have been fighting it is Israel and the United States.”@netanyahu speaks ahead of the NATO summit: pic.twitter.com/ncnqCaMoDo

— FOX & Friends (@foxandfriends) July 6, 2026

Turkey is also seen as supportive of the new Sharaa government in Damascus, at a moment Israeli forces are occupying portions of southern Syria. The two rival powers have nearly directly clashed at times over their competing Syria policies.

Tyler Durden Wed, 07/08/2026 - 04:15

Watch: MEP Forces EU To Address Wave Of Savage Migrant Attacks Throughout Europe

Authored by Steve Watson via Modernity News,

In a decisive move highlighting the growing crisis of migrant violence across Europe, Sweden Democrats MEP Charlie Weimers has successfully pushed the European Parliament to debate recent fatal attacks on native Europeans, and their direct implications for public security on the streets.

Weimers' intervention comes in the immediate wake of the savage beating death of 32-year-old Swedish father Christian Zedig, ensuring the tragedy cannot be swept aside as just another "isolated incident" by those invested in open borders policies.

Weimers delivered a stark address to the chamber, laying bare the human cost:

SD begärde idag en debatt i EU-parlamentet om mordet på Christian Zedig.

Förslaget bifölls. Debatten äger rum 19.45 ikväll.

Jag kan inte begripa varför de SVENSKA socialdemokraterna röstade nej.

Jag ser fram emot kritiska frågor från media.

Debattens titel: "Parliament... pic.twitter.com/GTlXiz98fI

— Charlie Weimers MEP ?? (@weimers) July 6, 2026

"In recent days, Europe has once again been reminded of the very real threats to public security on our streets. In Copenhagen, Swedish police officer Christian Zedig, a 32-year-old father of two, was brutally beaten to death at a world cup fan zone," Weimers urged.

He continued, "He was off duty, simply watching a match with friends, when he tried to calm a situation, he was attacked and stomped to death. In Milan Italy, a Gambian migrant stabbed an innocent man 20 times. He said it was for fun, and that he would do it again when he gets out. These are not isolated incidents, they are part of a broader pattern that is undermining the safety of ordinary Europeans."

His words cut through the usual parliamentary fog, naming the pattern that too many officials prefer to obscure. The debate, later today will addresses the urgent need to confront how unchecked migration is eroding safety in European cities and public spaces.

Weimers expressed astonishment that Swedish Social Democrats voted against even holding the discussion, posting the voting record as evidence. This reluctance speaks volumes about priorities: shielding failed migration policies over acknowledging the suffering of ordinary citizens and their families.

The Zedig family's nightmare began at a seemingly ordinary World Cup fan zone in Copenhagen's Islands Brygge area. Christian had traveled with friends to watch Norway face Ivory Coast before Sweden's own match. Wearing his national team shirt, he was enjoying the atmosphere when violence erupted.

A group of seven or eight young African men, according to eyewitnesses speaking to Danish media, arrived not to watch football but to provoke. They taunted supporters, threw beer and objects after Norway's late winning goal by Erling Haaland, then rushed a table of Scandinavian fans.

Zedig was punched in the head, collapsed immediately, and was then repeatedly stomped by multiple attackers while lying defenseless on the ground. The assailants fled the scene. Despite medical efforts, Zedig succumbed to his catastrophic injuries, leaving behind a devastated wife and two young daughters who will grow up without their father. Swedish police confirmed the death of their colleague, with local officers holding a memorial gathering.

His sister's emotional tribute captured the family's anguish: "My beautiful and thoroughly good-hearted brother. How will we make it without you with us? Who gave them the right to take you away from us? The grief is never-ending." Friends and colleagues described him as a dedicated officer and family man, making the senseless loss even more painful.

The main suspect, identified as an African migrant with a history of prior assaults and criminal convictions, eventually turned himself in to Danish police after authorities publicly released his photograph. He was arrested and remanded in custody for up to 26 days. While the formal charge had not yet been upgraded to murder at the time of initial proceedings, the facts of the mob attack speak for themselves.

This horror is the latest in a string of incidents that Weimers and like-minded MEPs have been warning about for years.

Media handling of the tragedy has only added fuel to public anger. Danish broadcaster TV2 aired live footage of a minute of silence held for Zedig before the later Norway-Brazil match at the same fan zone. The clip reportedly captured migrants ignoring the tribute or even laughing.

When the segment re-aired in a news broadcast, those seconds were conveniently edited out, shielding viewers from the disrespect.

Danish state TV channel has shortened yesterday's viral video of migrants ignoring the minute of silence for the Swedish football supporter Christian.

The minute of silence was held before the Norway-Brazil match at the fan zone in Copenhagen where Christian was beaten to death...

— Visegrád 24 (@visegrad24) July 6, 2026

Weimers has consistently exposed the consequences of mass immigration and demographic shifts. In March, alongside other lawmakers, he helped spotlight the spread of no-go zones tied to rapid Islamization and uncontrolled inflows.

A New Direction report analyzed high-crime neighborhoods across Europe, ranking areas like Franc Moisin in France and Rosengård in Malmö by metrics of violence, parallel societies, unemployment, school failure, and emergency service breakdowns. These zones show strong correlations with high shares of foreign-born and Muslim populations, where state authority recedes and other rules prevail.

French MEP Marion Maréchal emphasized the data: France alone has hundreds of sensitive urban areas disproportionately linked to these dynamics. The report serves as a documented indictment of policies that have allowed parallel societies to flourish.

At a Warsaw conference around the same time, experts warned bluntly that Europeans are committing demographic suicide. Low native birth rates combined with high migration from younger, culturally distant populations create unsustainable pressures.

Outdated tools like the Geneva Convention were called "sacred cows" in need of reform, with calls to renationalize asylum and migration policy to restore national control. Speakers contrasted thriving, cohesive Polish cities with decaying Western European examples overwhelmed by crime and social breakdown.

Despite institutional resistance, conservative and sovereignist forces have scored tangible victories. The European Parliament backed major updates to the Returns Regulation, a breakthrough expanding deportation powers, mutual recognition of orders across member states, longer detention periods, extended entry bans, and possibilities for return hubs outside EU territory.

Weimers described stricter return rules as one of the Sweden Democrats' biggest negotiating successes, declaring "the era of deportations has begun."

Italian PM Giorgia Meloni welcomed the changes as validation of her government's approach. Other leaders from the right celebrated the shift toward enforcement and national sovereignty over Brussels dictates.

Leftist reactions included chants of "shame" met with counter-chants of "send them back," followed by complaints about conservatives celebrating the win with a rooftop gathering - moments of dark comedy amid the stakes.

These advances prove that persistent advocacy can shift policy, even if implementation lags and globalist pushback - from the UN and others - continues. Yet incidents like Zedig's murder demonstrate why speed matters. Return rates remain abysmal under old rules, allowing repeat offenders and unintegrated migrants to remain threats.

Zedig's death is tragically familiar. From stabbings to grooming scandals, rioting, and everyday street violence, the data on overrepresentation in crime statistics across Western Europe is inescapable for those willing to examine it. Fan zones, once symbols of shared celebration, now risk becoming flashpoints due to imported rivalries and lack of respect for host societies.

Weimers' Rule 164 initiative forces the Parliament to address implications head-on: rising insecurity, strained police resources, cultural fragmentation, and the demographic trajectory that amplifies risks. Ignoring it invites more tragedy and deeper societal division.

Europe stands at a crossroads. Decades of elite-driven mass immigration without regard for compatibility, numbers, or enforcement have produced predictable results: overburdened welfare systems, no-go areas, terror threats, and innocent victims. Families torn apart, communities on edge, and taxpayers funding the consequences.

The successes on remigration tools offer hope, but only if national governments wield them aggressively. Weimers and allies are dragging the conversation toward reality - prioritizing citizens' safety, cultural cohesion, and sovereignty. The votes against even debating the matter reveals who still clings to denial.

As the Parliament convenes, the message is clear: enough is enough. Europeans deserve leaders who secure borders, enforce returns, and put their own people first. The era of looking the other way must end.

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

Tyler Durden Wed, 07/08/2026 - 03:30

Rutte Touts 'Literally Billions' Invested To Drastically Ramp Up NATO's Drone Capabilities

NATO leadership has this week made clear where it plans to invest a bulk of defense and tech-related funds in the coming years, while making express reference to lessons learned from the Russia-Ukraine battlefield.

The alliance's Secretary General Mark Rutte said Tuesday that drone warfare is the next great expanse in NATO capabilities. He touted that member states are unveiling "major new projects" worth "literally billions of dollars" at the Ankara summit. "These are billions that are invested in our security, boosting our economies and supporting hundreds of thousands of new jobs," Rutte stated. "It’s money well spent."

Anadolu Agency

He unveiled that among the projects include the NATO future procurement of five "high-end, high-altitude and long-endurance uncrewed aircraft" from Northrop Grumman.

Defense News reviews:

Built by Northrop Grumman, the MQ-4C Triton is a high-altitude, long-endurance UAV specifically designed for maritime surveillance over vast stretches of sea.

According to Rutte, the aircraft will help NATO detect threats early, protect sea lines of communication, and support operations in demanding regions, such as the High North. "These aircraft can fly for long periods at high altitude and cover large areas, including over open water, more efficiently than most other aircraft can," he said at the event, organized to coincide with the NATO summit this week.

Rutte stressed that intelligence, surveillance and reconnaissance (ISR) is a vital capability for the alliance, as it provides the situational awareness needed to make the right decisions and stay ahead of threats. "Today, allies are taking a concrete step to strengthen this capability," he added.

An additional project area outlined by Rutte involves 40 billion dollars' worth of investment in "counter-drone capabilities over the next five years," the alliance additionally said in a statement.

Another drone-focused initiative is a goal for allies to "train five times as many drone operators by the end of 2027." This is where the Ukraine experience seems to have deeply informed NATO doctrine and direction. 

"Drones have fundamentally altered the character of modern warfare and become a decisive factor on the battlefield," the alliance said in its statement. "These initiatives will be essential to increase both Alliance readiness and resilience."

Western backers of the Zelensky government have of late been hailing the effectiveness of Ukraine forces' long-range drone strikes, which have often devastated major Russian refineries and energy infrastructure.

NATO's Rutte in Ankara:

We will launch a counter-drone marketplace.

The aim is to help procure counter-drone capabilities at scale and speed. pic.twitter.com/F6hfHkox6L

— Clash Report (@clashreport) July 7, 2026

At the same time NATO officials are seeking to make a positive impression on President Trump, after he's long demanded the alliance collectively raise the bar much higher on defense investment and spending. All of this could kick the can further in terms of needless escalation with Russia - especially the ongoing support to Ukraine's long-range drones and missiles, which are being sent deeper and deeper into Russian territory.

Tyler Durden Wed, 07/08/2026 - 02:45

What Future Awaits Ukrainian Military-Aged Male Refugees In The EU?

Authored by Andrew Korybko,

Recent moves at the European and national levels bode ill for them...

The European Commission proposed to exclude new military-aged Ukrainian men from the bloc’s special refugee protection scheme per Ukraine’s request to help replenish its lost forces. For background, new Ukrainian Defense Minister Mikhail Fedorov shockingly revealed in January that 200,000 men have already deserted thus far and ten times more (2 million) are actively dodging the draft. Moreover, adult men comprise 26% of the 4.3 million Ukrainians in the EU for another one million potential conscripts.

The forcible conscription policy known as “busification”, which refers to capturing military-aged men off the street and throwing them into minibuses that then take them straight to local training centers and finally the frontlines, is wildly unpopular and increasingly being resisted by the population. It’s therefore much easier for the EU to deport ineligible military-aged men that flee to the bloc going forward, but the ideal solution from Ukraine’s perspective is for all those that are already there to be deported as well.

Denmark is planning to do precisely that. According to RT, “The Danish authorities want to amend a special law passed in 2022 to make Ukrainian men aged 23 to 60 ineligible for temporary residence permits unless they have been granted an exemption from military service. Ukrainian men under 23 would only be granted residence permits until they reach draft age.” Less than 50,000 Ukrainians have residence permits under this law, and maybe one-quarter are adult males, but it would still be symbolic.

Other countries could potentially follow Denmark’s lead on the basis that they too, as explained by the Danish Immigration Minister, “never intended for our residence rules to be used to avoid mobilization into the Ukrainian Armed Forces. Doing so undermines Ukraine’s war effort and weakens the country’s ability to defend itself against Russian attacks.” Amidst the spiraling Polish-Ukrainian dispute over Zelensky’s state glorification of the Volhynia Genocide’s OUN-UPA culprits, all eyes are on Warsaw.

The ruling liberal coalition, like the conservative government that it replaced in late 2023, appears to be in favor of retaining special privileges for adult Ukrainian males for alleged economic reasons. Be that as it may, the conservatives have recently soured on Ukraine and its refugees, nowadays signaling that they might be open to deporting some of them. While that would help Ukraine against Russia like Poland has always sought to do, it would also be doing Zelensky’s bidding, so they might reconsider their support.

Likewise, the Ukrainophilic liberal coalition might sacrifice the alleged economic benefits that Poland receives from adult Ukrainian male refugees by deporting them, albeit with the purpose of pleasing Zelensky and perhaps as an “olive branch” amidst the conservative president’s feud with him. It’s too early to tell what this group’s future in Poland might be, but the scenario of at least some of them being deported can’t be ruled out, which could help the liberals ahead of fall 2027’s next Sejm elections.

As Ukraine continues to lose ground along the front, which the dramatic visuals from its recent spree of strikes against Russia is aimed in part at distracting the global public from, Kiev is expected to ramp up its pressure campaign against the EU – and particularly Poland – to obtain more meat for the grinder.

Trump’s plans of “escalating to de-escalate” with Russia through an intense “war of attrition” require the replenishment of Ukraine’s forces, so if “busification” doesn’t suffice, then this is the only fallback plan.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Tyler Durden Wed, 07/08/2026 - 02:00

"F**k The USA": Professor Delights Chicago Crowd With Anti-American And Anti-Border Rant

Authored by Jonathan Turley via jonathanturley.org,

I have previously written about the "radical chic" in higher education of faculty members who espouse extremist views in departments purged of conservative, libertarian, or moderate voices. While it is virtually impossible to get departments to seriously consider a mainstream conservative or libertarian, schools like Princeton eagerly hire professors such as Keeanga-Yamahtta Taylor, who recently delighted a Chicago audience with an unhinged rant against the United States and the concept of a nation-state.

Bill Ayers and Princeton's Keeanga-Yamahtta Taylor appeared at a July 4th event and denounced the country and its anniversary.

Taylor thrilled the crowd by recounting her disgust that a woman gave her child an American flag at the airport. She credited herself by not instantly burning it, but went on to denounce the country and credited the audience for its "F**k the U.S." attitude.

Notably, Taylor suggested that only fools rally behind the flag or the notion of a nation-state. She clearly believes not just in open borders but rejects the very concept of borders. She repeatedly declared that "borders kill" and suggested that patriotic people are simply dupes.

Bill Ayers is a former professor and one of the founders of the domestic terrorist organization, the Weather Underground. His wife, Bernardine Dohrn, was also a member of the group, and both were fugitives for several years. Dohrn is also a professor who has taught at Northwestern University School of Law.

Taylor is a Professor in the Department of African-American Studies at Princeton University. She writes for the New Yorker.

In the Chicago event, Taylor called on others to reject "the idea of loving a nation state, which is what patriotism is." She repeatedly returned to the theme that borders are "deadly" and "borders kill people." She explained that we have to erase any borders because they are "a tool of death and destruction."

Furthermore, she emphasized that the very concept of a nation-state should be the "object of political struggle."

This reflects the level of intellectual rigor in departments like the one at Princeton. Her writings have been honored by the Marguerite Casey Foundation and Group Health Foundation, the Organization of American Historians, and the John Simon Guggenheim Memorial Foundation (which gave her a fellowship).

On one level, the erasure of borders could be viewed as the "withering away of the state" espoused by Friedrich Engels and later by Vladimir Lenin. However, it reads more like the jargonistic narrative common in higher education, where radicals espouse such views without serious challenge from their colleagues.

Even European states that once allowed expanded undocumented migration are now struggling to reverse course due to the high social and security costs. However, academics such as Taylor tell students that we can eradicate any nation-states and live without borders. While most people would expect such views to be espoused by raving lunatics on the subway, Princeton made her a chair professor as the Hughes-Rogers Professor of African American Studies.

Her writings are celebrated for her combination of socialism and identity politics. The gushing articles even include praise for her use of emojis. ("All those cry-laughing yellow orbs betrayed a critic with a sense of humor.").

Few colleagues or critics feel comfortable noting that views like the eradication of the nation-state or erasure of borders are little more than unsupported, jargon-saturated tripe. There is no effort to push her on what happens to an economy without borders where the country (or whatever will replace the nation-state) is responsible for supporting millions of immigrants.

When you hear young socialists in the Mamdani Administration (including Mamdani himself) speaking of "seizing the means of production," it is the result of college classes taught by figures like Taylor, who offer little more than shallow sound bites and slogans. They have been told that socialism is a successful economic model despite its utter failure historically. It is a fable told by the uninformed to the unquestioning: unicorn economics, eagerly embraced like a bedtime story.

The alternative is what I have called the "liberty-enhancing economy" that the Framers embraced. The combination of political and economic freedom made this republic the greatest engine of prosperity and human rights in history. That does not mean that we do not have difficult economic and social problems. However, the suggestion that we should embrace socialism and erase borders is properly viewed as perfectly bonkers ... outside of higher education.

Jonathan Turley is a law professor and the New York Times best-selling author of "Rage and the Republic: The Unfinished Story of the American Revolution."

Tyler Durden Tue, 07/07/2026 - 23:25