Cowen: "Early Stages Of Looming EV Comeback"

Cowen analysts led by Itay Michaeli say the EV market has entered the early stages of stabilization as a combination of more self-driving capabilities and elevated gas and diesel prices has shifted consumers toward these vehicles.

"We are still in the early stages of this looming EV comeback," Michaeli told Bloomberg in an interview on Friday. "EV market coverage, by our estimation, will grow substantially in the next couple of years by existing players."

A welcome sign of stabilization came as Tesla and Rivian reported third-quarter deliveries above Wall Street expectations.

Tesla reported deliveries of 486,532 EVs in the most recent quarter, a decline of just 2.1% and well ahead of the roughly 464,000 average analyst estimate, while Rivian delivered 19,248 vehicles in the third quarter, well above the roughly 17,600 expected.

Cox Automotive reports that US EV market share has settled near 6% this year, well below the 11% reached during the rush to buy EVs before the federal tax credit expired.

Another signal of stabilization comes from Randy Parker, chief executive officer of Hyundai's North America business, who said, "Because of the war, because of gas prices, we've also seen a rise and a recovery in EV sales," adding, "I've got more and more dealers now asking for EV product."

Google Trends searches for "used EV for sale near me" skyrocketed this year as gasoline and diesel prices stayed elevated.

Barclays autos analyst Dan Levy recently noted that Tesla's Full Self-Driving capabilities have become an increasingly important selling point and are driving sales (read note here).

Tyler Durden Mon, 10/05/2026 - 04:15

Trump's Diesel Threat Worked: G7 Dumps 100 Million Barrels As Europe's Energy Dependence Laid Bare

Submitted by Thomas Kolbe

In the end, Donald Trump’s threat to prohibit diesel exports apparently proved credible after all.

Faced with rapidly rising prices at the pump and an emerging acute shortage of middle distillates, from diesel and heating oil to aviation kerosene, the G7 heads of government decided on Friday, under pressure from the US president, to release their own oil reserves.

For the EU, the perfect storm is brewing: a rising dollar price, the visible control of the Strait of Hormuz by the US military, as well as rising interest rates in the bond markets amid the threat of a sovereign debt crisis, have made the pressure particularly tangible for the EU states: further rising energy prices will hit the fragile eurozone industrial economy considerably harder than the essentially energy-autonomous United States.

The problems of the EU Europeans are homegrown and not the result of American special interests: completely overstretched welfare states, a self-inflicted migration crisis that can no longer simply be wished away, an economy in an atmosphere of departure – though not at home, but fleeing EU regulation, excessive energy costs and the political raid of the Green Deal. They have laid a fuse to the fragile structure of the EU, lit it and are no longer willing to recognize that this powder keg could explode at any moment.

One miscalculation is piling on top of another. In Brussels, Berlin and Paris, they had counted on the Americans shouldering the lion’s share of forcing a regime change in Moscow – cheap access to the country’s energy and resources, possibly bargaining and pricing power, have by now become indispensable to keeping the EU’s economic model alive. Energy costs have to come down, as quickly as possible. From Washington to Brussels, from Moscow to Beijing, they all understand the EU Europeans’ strategic hopelessness. In the case of Russia, instead of a triumph, the result has recently been the destruction of Russian refinery capacity, ironically by partner Ukraine – the next setback in view of the EU’s energy problems.

So now comes the first step toward alleviating the energy price crisis, merely a fight against symptoms that will solve none of the EU’s structural problems.

French President Emmanuel Macron explained the strategy, which essentially consists of three steps:

1. First, 100 million barrels will be released from strategic reserves in a coordinated manner over a period of four months. A substantial quantity of diesel is supposed to reach the market within the first 20 days.
2. Second, the maintenance schedules of the refineries in the participating states are to be better coordinated. The aim is to prevent several facilities from being shut down at the same time – the throughput is above all intended to help reduce the diesel shortage. Where possible, refineries are to temporarily increase their utilization rates. Obviously, this does not resolve the contradiction of how, in the face of destructive climate policy, new refinery capacity could possibly be conjured up in Europe. These projects take long periods of time and, given CO2 certificates and climate regulation, are simply no longer profitable. In the CO2 frenzy, more than 20 percent of refinery capacity had already been destroyed in recent years. This madness is now coming back to haunt them.
3. As a third measure, the G7 states committed themselves not to impose any export restrictions on energy and petroleum products among themselves. This is precisely where the geopolitical background to the release of these reserves becomes apparent: the conflict between Washington and the EU had recently shifted from trade policy issues to the energy market and has now reached a temporary climax with the release of the reserves.

In addition to the measures mentioned above, the International Energy Agency is to monitor their implementation and propose a further package of measures within 20 days.

All in all, the action was an act of desperation that is likely to lose its effect in the markets after a few weeks.

These weeks are exposing the economic-policy sins of a policy that was, on the one hand, driven by the understandable desire to achieve an energy-autonomous situation – Europe still obtains around 60 percent of its energy requirements from abroad. Added to the desire for autonomy were eco-socialist forces that saw their opportunity in the fight against fossil fuels not only to eliminate parts of refinery capacity and fossil energy production, but also to establish their own political center of power with the help of climate policy.

With overregulation, a CO2 extraction economy and a green patronage economy designed to enrich political friends, greater damage is being left behind than anyone is currently willing to admit.

Ultimately, it was trillions spent on the green transformation, on von der Leyen’s Green Deal, that were simply burned and produced no positive effect whatsoever.

A few have made themselves rich, while what remains are industrial wastelands and a slowly rotting continent in unchecked decline.

What awaits the EU Europeans who are still dreaming green is a brutally hard emptiness, delivered straight to their door by reality: The global economy still operates to 87 percent on the rails of fossil fuels and the resurgent power of nuclear energy. Everything else is propaganda.

* * * 

About the author: Thomas Kolbe, a German graduate economist, has worked for over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Mon, 10/05/2026 - 03:30

How Crowded Has Mount Everest Become?

Mount Everest is seeing more human traffic than at any point in the last three decades of available data, according to Visual Capitalist's Sofie Gilbert.

Successful climbs are now overwhelmingly concentrated in the spring, when favorable weather can funnel hundreds of climbers toward the summit within a matter of days. Meanwhile, the workforce supporting expeditions has grown alongside the number of people attempting the mountain.

The data comes from The Himalayan Database, which tracks registered expeditions across the Nepal Himalaya. It shows how the scale, timing, and composition of Everest climbing have transformed since the 1990s.

Everest's Climbing Boom

The number of people recorded on Everest has surged alongside the number reaching the summit.

In 2025, The Himalayan Database recorded 585 visitors and 934 hired workers on the mountain, for a total of 1,519 people. That's nearly four times the 395 people recorded in 1995.

Year Visitors on the mountain Workers on the mountain Total 1995 247 148 395 1996 338 194 532 1997 337 198 535 1998 271 160 431 1999 221 131 352 2000 406 247 653 2001 371 230 601 2002 237 192 429 2003 491 352 843 2004 394 269 663 2005 480 394 874 2006 492 392 884 2007 595 505 1,100 2008 402 314 716 2009 492 404 896 2010 466 444 910 2011 458 491 949 2012 521 513 1,034 2013 492 554 1,046 2014 403 300 703 2015 519 444 963 2016 454 481 935 2017 545 557 1,102 2018 573 664 1,237 2019 584 682 1,266 2020 32 28 60 2021 458 588 1,046 2022 395 636 1,031 2023 513 737 1,250 2024 493 789 1,282 2025 585 934 1,519

Visitors include clients and independent climbers, while workers are hired expedition staff, most of whom are Nepali Sherpas.

Of those on the mountain in 2025, 878 reached the summit. Across 2021-2025, Everest averaged about 720 summits per year, more than seven times the annual average of roughly 100 in 1995-1999.

Everest Has Become a Spring Mountain

Decades ago, successful Everest climbs were spread much more widely across the calendar. In the 1980s, The Himalayan Database recorded 87 spring summits and 77 autumn summits, along with successful climbs in both winter and summer. That pattern has almost completely disappeared.

Period Spring Autumn Winter Summer 1980-1989 87 77 9 9 1990-1999 739 135 6 0 2000-2009 3,346 30 0 0 2010-2019 5,561 6 0 0 2020-2025 3,634 14 0 0

From 2000 through 2009, more than 99% of recorded summits occurred in spring. The concentration became even more extreme in the 2010s, when the database recorded 5,561 spring summits compared with just six in autumn and none in winter or summer.

Since 2020, the pattern has remained virtually unchanged.

Hundreds Can Summit on the Same Day

Even within the spring season, summit attempts cluster around short periods of favorable weather, particularly in May.

This can create extraordinary spikes in traffic near the top of the mountain.

Year Total summits 1995 82 1996 98 1997 85 1998 119 1999 116 2000 145 2001 182 2002 158 2003 264 2004 335 2005 307 2006 483 2007 611 2008 428 2009 463 2010 532 2011 541 2012 574 2013 680 2014 133 2015 0 2016 678 2017 680 2018 850 2019 899 2020 49 2021 462 2022 704 2023 685 2024 870 2025 878

On May 23, 2019, 354 people reached Everest's summit from Nepal and Tibet combined, the highest single-day total in the dataset.

These traffic spikes are largely driven by Everest's extreme weather. Summit attempts typically occur when the jet stream shifts away from the mountain, creating periods of lower winds before the summer monsoon arrives.

As a result, hundreds of climbers who have spent weeks acclimatizing can converge on the upper mountain during the same handful of favorable days.

The Workforce Behind Everest's Climbing Boom

The growth of Everest climbing has also transformed who is on the mountain. In 1995, The Himalayan Database recorded about three hired workers for every five visitors.

By 2025, there were roughly eight hired workers for every five visitors, with hired workers accounting for more than 60% of all people recorded on Everest that year.

Long before most clients attempt the summit, high-altitude workers carry supplies, stock camps, and help prepare the route. Commercial expeditions also rely on guides and other staff to support climbers during weeks of acclimatization and the final summit push.

The risks faced by that workforce became especially visible during two catastrophic seasons. In 2014, all 17 deaths recorded in the database were hired workers. In 2015, when the Nepal earthquake triggered a deadly avalanche at Everest Base Camp, workers accounted for 11 of the 14 deaths recorded on registered expeditions.

Year Total deaths Visitor deaths Worker deaths 1995 4 1 3 1996 15 12 3 1997 9 6 3 1998 4 4 0 1999 4 4 0 2000 2 2 0 2001 5 4 1 2002 3 3 0 2003 4 3 1 2004 7 7 0 2005 6 6 0 2006 11 7 4 2007 7 6 1 2008 1 1 0 2009 5 3 2 2010 3 3 0 2011 4 4 0 2012 10 7 3 2013 8 4 4 2014 17 0 17 2015 14 3 11 2016 5 5 0 2017 6 5 1 2018 5 2 3 2019 11 10 1 2020 0 0 0 2021 5 2 3 2022 3 2 1 2023 18 12 6 2024 8 6 2 2025 4 2 2

These were exceptional disaster years rather than typical seasons, but they underscore the occupational hazards faced by the workforce supporting Everest expeditions.

The Growing Human Footprint

More people on Everest also means more waste to manage. Nepal requires expeditions to remove waste, but doing so at extreme altitude is difficult and expensive.

In spring 2024, the Sagarmatha Pollution Control Committee collected 85 tonnes of waste from Everest Base Camp and higher camps, including 27.53 tonnes of human waste.

Everest's Crowds Are Also Big Business

Everest is also a major source of income for Nepal. In 2025, the country increased the spring climbing permit fee for foreign climbers from $11,000 to $15,000, with the new rate taking effect in September.

Climbers also support guides, porters, lodges, and other local businesses, making Everest an important source of income alongside the pressures created by growing traffic.

As the highest mountain on Earth, Everest remains uniquely appealing to climbers. Three decades of data show just how much the human presence surrounding that pursuit has grown.

Tyler Durden Mon, 10/05/2026 - 02:45

UK Taxpayers (Unknowingly) Funding Free Hijabs For Illegal Immigrants

Authored by Steve Watson via Modernity.news,

The British government has been handing out thousands of hijabs to illegal migrants washing up on the shores of the country in boats, while Home Office staff have been spending time in Calais cooking meals for them.

Internal figures show 974 hijabs issued to small-boat arrivals between January and June, at a rate of 162 a month. Run that rate forward and the year's total is already past 1,000 and heading for 1,500.

The same clothing data also proves that the vast majority of those arriving are fighting age males, with more than 10,000 male packs being provided against 2,670 for women, while children's packs number just 773 for boys and 829 for girls.

'Don't act surprised when Britain no longer looks like the Britain you grew up in.'

GB News' @Benleo reveals that 1000 hijabs have been handed out to small-boat migrants using taxpayers' money, arguing that Britain needs to stop looking like it 'comes with a welcome pack'. pic.twitter.com/d3e8M4gtQK

— GB News (@GBNEWS) October 3, 2026

This isn't a deterrent, it's an open armed welcome.

Home Office documents show the scarves are part of the dry-clothing pack issued at short-term holding sites such as Manston in Kent. A Home Office source told the Mail the department has a legal duty, under the Short-term Holding Facility Rules, to provide basic clothing, including cultural and religious items, and that migrants' cultural and religious needs "must be catered for so far as is practicable."

A spokesman added: "All arrivals receive a basic dry clothing pack where required. The items available form part of standard welfare arrangements."

Shadow Home Secretary Chris Philp told the Mail: "The Government must stop handing out hijabs to illegal immigrants immediately. It's an insult to hard-working British taxpayers that they're funding religious items for people who have broken into our country. It should not be for us to fund someone else's religious practices."

He went on: "Many illegal immigrants actually hate our values. Many come here for free accommodation and a life on benefits at our expense. Illegal immigrants crossing the channel are breaking into our country. They have no legitimate reason to flee France, which is clearly safe. That's why we must leave the European Convention on Human Rights so we can deport all illegal immigrants immediately upon arrival."

Reform UK MP Andrew Rosindell told GB News: "I don't know why we should be giving these people anything. They're coming in illegally, and if they're coming in illegally, we shouldn't be incentivising people by making them feel like they're getting everything given to them on a plate. You couldn't make it up."

'Couldn't make it up!' Britain 'dishes out 1,000 hijabs to illegal migrants' - and YOU have to pay
https://t.co/z6lz99h2mB

— GB News (@GBNEWS) October 4, 2026

GB News presenter Ben Leo put the same point in plainer language: "Don't act surprised when Britain no longer looks like the Britain you grew up in." His argument was that the country has to stop looking like it "comes with a welcome pack."

Campaigning journalist David Atherton also asked the question, "what is the Home Office doing in promoting a backward practice that suppresses women?"

Britain ?? has this year given 1,000 hijabs to women and girls who are illegal migrants.

Welcome mat aside, what is the Home Office doing in promoting a backward practice that suppresses women?
pic.twitter.com/F1p6mSLuhF

— David Atherton (@daveatherton) October 4, 2026

Nearly 20,000 people have reached Britain by dinghy this year alone. The Home Office is keen to note that is down 42 per cent on the same point in 2025, and that summer 2026 produced the fewest summer arrivals since 2020.

A spokesman said: "We have made progress tackling the small boats. Crossings are down significantly." GB News reported that Sunday morning alone had already put more than 200 arrivals into Dover, with close to 500 since Friday, and a further dinghy heading north from a beach near Cherbourg, part of a westward shift in launch points away from Dunkirk and Calais. A bit lower than last year's chaos is not the same thing as a border.

'As long as the UK makes itself attractive, people are going to continue to come in the hundreds of thousands.'

Border Control Security Expert Henry Bolton discusses reports that 1,000 free hijabs, funded by the taxpayer, have been given to small-boat migrants. pic.twitter.com/uehuGzZef0

— GB News (@GBNEWS) October 3, 2026

The hijab figures landed on the same weekend as a Telegraph investigation into who, inside the system, is spending their spare time on the French side of the water.

Around eight members of the Public and Commercial Services Union, including Home Office staff, spent two days in February at a migrant camp in Calais with Care4Calais. They cooked meals and handed out fleeces. The trip was organised by PCS, which has worked with the charity since about 2022, including joint opposition to the Rwanda plan.

'It will be confronting an entire ecosystem.'

GB News Presenter @WillKingston questions whether activists have infiltrated the Home Office after a report revealed that civil servants have been volunteering with Care4Calais. pic.twitter.com/YLvGUksVWU

— GB News (@GBNEWS) October 3, 2026

Full-time union officials on the visit included general secretary Fran Heathcote and Mike Jones, group secretary for Home Office members. Among the Home Office contingent were Passport Office worker and union representative Karen Alderson, Keith Hannant and Jordan David.

Alderson said: "It's important that we have a presence here. A lot of our members work in asylum and the way we hear it reported in the media, it's all about numbers [but these are] people." Hannant said: "And then you come and see [Calais], and they're just people like you and me." David said they talk about the asylum situation in meetings "but none of us have that real hands-on experience of what it's like to work with refugees."

We've got Home Office civil servants volunteering to work for Care4Calais and now this.

This government has absolutely no intention whatsoever of stopping the boats, unless it's a by-product of opening the borders.

It makes my blood boil. pic.twitter.com/0pw8WUzPKn

— Henry Bolton OBE ?? (@_HenryBolton) October 3, 2026

Care4Calais's Charlotte Khan was open about the point of the relationship: "We have people who work in the Home Office." Jones's remedy was not removal. It was "proper plans that can deal with the safe crossing to make sure that people can come to the country safely."

A PCS spokesman said the visit was so representatives "working within the Home Office, including those representing PCS members working in the asylum and immigration system," could "gain a better understanding of the realities facing refugees." The Home Office, asked about its own staff, said only that it expected "all employees to meet the highest standards expected of them."

The charity is not a neutral soup kitchen in this story. A separate Telegraph investigation found Care4Calais had backed asylum seekers disputing official age assessments, including a Sudanese man in his 20s placed in children's accommodation after the charity referred him to a council. Immigration courts later rejected the claim.

Home Office figures for the year ending March show 6,255 age-dispute cases closed, with 43 per cent found to be adults despite claiming to be children. The charity's response was that "the real scandal" was children wrongly judged to be adults, and that it is "a humanitarian charity that distributes aid to people who have fled war, torture and persecution."

I have come to the conclusion that it is a deliberate, state-sponsored invasion of Britain. pic.twitter.com/GDg8TVFrCG

— Patrick Christys (@PatrickChristys) October 3, 2026

Home Office figures put small-boat arrivals since Labour took office on 4 July 2024 at 83,279.

That figure is more than the regular British Army of about 83,000. Since records began in December 2018 the cumulative total is past 200,000, larger than the Army, Navy and RAF combined. About 90 per cent have been male. Two-thirds have been aged 18 to 39.

Meanwhile, this weekend Kent Police ran what Assistant Chief Constable Nigel Brookes called a "substantial" operation around a planned anti-migrant protest in Dover, after masked demonstrators previously blocked the port on 5 September. A face-covering ban was in force from 8am to 9pm under the Crime and Policing Act 2026. Protesters who reached the port were dispersed under a Section 14 notice. Processing of arrivals has repeatedly been linked to the cruise terminal.

Accounts on the ground went further. UK Dispatch reported that Kent Police had put signal blockers near the cruise terminal to stop people live-streaming.

They make me sick ? https://t.co/XlRn35ZNnI

— Angel Of England (@AngelUKxx) October 3, 2026

A state that issues religious clothing to illegal arrivals, sends its own immigration staff to volunteer with NGOs on the beach, and polices the cameras at the terminal is not failing to stop the boats.

It is managing the intake, dressing it, and telling the public the numbers are down. France is a safe country. The dinghies are still launching from Normandy. The welcome pack is still waiting at Manston.

Tyler Durden Mon, 10/05/2026 - 02:00

What Are Russia's Top Three Strategic Challenges?

Authored by Andrew Korybko via Substack,

The new "cordon sanitaire" that Trump 2.0 assembled around Russia, the difficulty in maintaining its Sino-Indo balancing act, and the broken feedback loops that afflict its Foreign Ministry are the main strategic risks that must be urgently addressed in order to most effectively ensure Russia's future.

Putin wisely advised Russians during his keynote speech at the Valdai Club's latest annual meeting that "we certainly need a roadmap for our movement into the future. What we need is not wishful thinking, an abstract and speculative construct or an unrealistic visualisation of our wishes, but a realistic assessment of risks, capabilities and essential objectives." His clarion call inspired the present piece that'll enumerate Russia's top three strategic challenges and propose pragmatic ways to address them.

The "cordon sanitaire" that Trump 2.0 assembled around Russia poses its primary threat. It encircles Russia in the Arctic-Baltic through the Swedish-led Viking Bloc, Central Europe via the competitive interplay between Poland and Germany, the South Caucasus and Central Asia through what can be described as Turkiye's Neo-Ottoman ambitions, and AUKUS+ core Japan in Northeast Asia. The preceding hyperlinked analyses embedded in this paragraph describe each of these threats in more detail.

The ones along the western flank could be mitigated through the creation of a US-backed Polish-led Intermarium paired with arms control deals that would altogether reduce the risks associated with a German-dominated militarized EU. This could be facilitated by a resource-centric strategic partnership with the US. Mitigating threats along the southern flank requires a deal with Azerbaijan for demilitarizing TRIPP while the ones along the eastern flank can be mitigated through a deal with Japan over the Kurils.

The next strategic challenge to Russia is to prevent any significant disruption to its Sino-Indo balancing act. Even perceived Russian dependence on China could spook India into pivoting to the US due to the fear that China might weaponize this dependence to get Russia to cut off arms and spares to India in order to coerce India into unilateral concessions to China and its Pakistani ally in their territorial disputes. This dark scenario can be averted by bestowing military and trade privileges upon India.

That could take the form of jointly producing more state-of-the-art military technology and giving Indian products preferential access to the Russian market. If the dark scenario touched upon above isn't averted, then India's potential pivot to the US could force Russia to pivot to China and thus make its perceived dependence upon the People's Republic a fait accompli. And finally, Russia must urgently repair the broken feedback loops that afflict its policy formulation and implementation processes.

Wishful thinking, Lavrov's strong innuendo that his people can be optimistic to the point of naivete and his explicit critique that they tend not to proactively address latent crises, zero tolerance for contrarian assessments, and reasonable suspicions that actual propaganda (especially its "Potemkinist" variant) has found its way into these loops are the main problems that must urgently be resolved. The uncomfortable possibility can't be ruled out that this problem blinds policymakers to the other two strategic challenges.

Russia's broken feedback loops must therefore urgently be repaired in order to maximally ensure that the most effective policies are formulated and successfully implemented for thwarting the military-security threats posed by the "cordon sanitaire" as well as the economic-political ones that a significant disruption of Russia's Sino-Indo balancing act could swiftly set into motion. These are herculean tasks, but Russia has risen to even more formidable challenges before, so it's expected to do so once again.

Tyler Durden Sun, 10/04/2026 - 23:20

US Navy Super Hornet "Sub Buster" Marking Hints At Iranian Submarine Kill

Military aviation and defense news website The Aviationist reports that a US Navy F/A-18F Super Hornet returned from Operation Epic Fury carrying a "Sub Buster" marking, raising the possibility that a carrier-based fighter jet was credited with an Iranian submarine kill.

Photographs taken by Jeff Rojas and highlighted last week by The Aviationist show a broken-submarine victory marking, potentially the first such decoration on a Super Hornet.

The Aviationist explained:

Iran lost a large number of its submarine force during Operation Epic Fury, so it is not possible to definitively confirm which vessel the Super Hornet was involved in destroying. However, if the marking is designed to be representative, it most resembles a Kilo class submarine. Of Iran's three Russian-built Kilo class submarines, one, the Taregh, was specifically confirmed by the U.S. as destroyed while in port. The remaining two are thought to have long been inoperable though, if also targeted, would count as a kill all the same.

The Navy has not publicly confirmed a submarine kill by the fighter jet or explained the marking. The marking also does not establish whether the aircraft delivered the weapon, supported another platform or participated in a broader operation.

Tyler Durden Sun, 10/04/2026 - 22:45

Trump Admin Proposes Rules For 1st National School Choice Program

Authored by Naveen Athrappully via The Epoch Times,

The Department of the Treasury and the IRS have proposed regulations to implement a new educational scholarship tax credit program that expands school choice options for parents and students.

New students tour Nora Sterry Elementary School in Los Angeles on Jan. 15, 2025. (Chris Delmas/AFP via Getty Images

The regulations pertain to the Federal Scholarship Tax Credit (FSTC) program, enacted under the One Big Beautiful Bill Act. FSTC allows individual taxpayers to claim tax credits for certain cash contributions they make to Scholarship Granting Organizations (SGOs). SGOs are entities providing scholarships to cover elementary and secondary school expenses.

The scholarships disbursed by the SGOs can be used by recipients for a wide range of education expenses, including tuition for private school, academic tutoring, books, special-needs services, supplies, computers, and other expenses related to the enrollment or attendance of a student, the IRS said in an Oct. 1 statement.

FSTC "marks a new chapter in educational freedom and opportunity by establishing America's first nationwide school choice program and empowering states to give students and families more options," Treasury Secretary Scott Bessent said in the statement.

"Thirty states have already opted in, and we encourage all 50 states to participate so every American student and family can benefit," Bessent said.

Individual taxpayers can get tax credits of up to $1,700 under FSTC, while married couples filing jointly can claim credits of up to $3,400, the IRS said.

Tax Credit Calculation

According to the proposed regulations published in the Federal Register on Oct. 2, a taxpayer can contribute to any SGO in any state participating in the FSTC program, provided the organization is listed on the IRS's SGO list.

The regulations clarify the calculation of tax credits when a taxpayer donates to SGOs and seeks credits from both state and federal governments.

For example, if the taxpayer lives in a state that allows a 100 percent tax credit of up to $2,000 in SGO contributions and the person makes $5,000 in such contributions for a year, the individual can get $1,700 in tax credits from the federal government and $2,000 in credits from the state government for a total of $3,700 in tax benefits, according to the regulations.

Since the FSTC tax credit is nonrefundable, it can only reduce the federal tax bill and cannot generate a refund. However, the regulations state that any unused credit for a particular year "may be carried forward for up to five years."

In its recent statement, the IRS said that the FSTC is scheduled to launch on Jan. 1, 2027. States are free to join the tax credit program and identify eligible SGOs.

The program prohibits states from imposing unnecessary restrictions on access to scholarships, including limiting the types of schools scholarship recipients can attend. According to the IRS, FSTC expands educational freedom, puts students first, strengthens parental rights, and restores power to the states.

The IRS and Treasury estimate that the FSTC program could support 600-700 SGOs by the end of this decade, with up to 2.2 million scholarships being funded annually and more than 11 million taxpayers contributing almost $26 billion every year.

In addition, roughly 96 percent of children in participating states are expected to be eligible to receive the FSTC scholarship funds, the IRS said.

The Treasury and the IRS also issued temporary regulations establishing key procedures for SGOs and states to prepare for the launch of FSTC next year.

There have been concerns that the FSTC program could be more beneficial in wealthy areas than in poorer regions.

In a Sept. 23 research report, the think tank The Brookings Institution said that children in higher-income areas could have more local FSTC money available than their poorer counterparts. The finding was based on an analysis of county median incomes.

Counties in the top 10 percent of median income were assessed as having $3,859 per pupil in potential FSTC funding. In the bottom 10 percent, this figure dropped to $2,233 per pupil, according to the report.

"Unless FSTC funds are targeted towards low-income areas outside the communities where the money is being donated, we expect the FSTC to become a regressive funding source, even where those funds go to public school students," the report said.

In July, the American Federation for Children, a policy center that advocates universal school choice, released a report stating that up to 51 million children could benefit from the FSTC program if every state signed up for the initiative.

Tyler Durden Sun, 10/04/2026 - 22:25

Chinese Pig Farmers Report Suspected Swine Fever Outbreaks As Prices Fall

Authored by Michael Zhuang via The Epoch Times,

Pig farmers in several parts of China are reporting suspected outbreaks of African swine fever that they say have killed large numbers of pigs and forced some farms to clear their herds, adding pressure on small producers already struggling with falling prices and weak demand.

Piglets drink milk from a sow at a pig farm in Yaji, Guangxi Zhuang Autonomous Region, China on March 21, 2018. Thomas Suen/Reuters

Farmers in several provinces told The Epoch Times that outbreaks have been reported in their areas this year, with some farms being forced to sell or dispose of infected pigs.

China's Ministry of Agriculture and Rural Affairs has not publicly reported an African swine fever outbreak corresponding to the farmers' accounts. Its recent major animal disease notices have included one September case of type O foot-and-mouth disease found among pigs in Chongqing.

The discrepancy between official reports and accounts from farmers makes it difficult to independently establish the scale of any current African swine fever outbreaks. In China, the regime frequently conceals data and imposes strict information control over major social issues.

Rapid Deaths and Herd Clearances

In Rong County in Guangxi Province, farmer Lin Yongchang told The Epoch Times his area has experienced two waves of swine fever this year.

Lin said some pigs developed health problems after being vaccinated.

"Previously, I had always used a vaccine from Guangdong [Province] and there were no problems. The first time I used a vaccine from China Animal Husbandry Group [a state-owned company], there was an outbreak," he said.

He said vaccinated sows experienced miscarriages and stillbirths, while some weaned pigs also became ill.

Ruan Jiale, a farmer in Hunan, similarly said some large farms in his area had been affected despite vaccination.

"Those large farms all vaccinated their pigs, and they still went down," he told The Epoch Times.

Ruan estimated that 80 percent to 90 percent of farms in his area had been affected and cleared their herds. However, that figure could not be independently verified.

He described pigs dying within days of showing symptoms.

"The pigs' noses become dry, and they die in three days," Ruan said.

For farmers with large animals, disposing of the carcasses can be a major problem. Ruan said his pigs weighed more than 300 pounds. He said infected pigs were sometimes sold at steep discounts, while dead pigs were buried.

"Everything is losing money now. When swine fever comes, you have to get rid of them at a low price, and the losses are huge," he said.

Farmers also described informal channels for disposing of pigs after outbreaks.

Liang Jianguo, a farmer in Guangxi Province, told The Epoch Times that farms near his had recently cleared their herds after pigs began dying, but the pigs that were still alive can be collected and transported to refrigerated processing facilities.

"They're taken directly to the freezing plant for processing, for making sausages," Liang said. "Many sausages are made from diseased pigs and culled sows."

The Epoch Times is unable to independently verify Liang's claims about diseased pigs entering meat-processing channels.

Falling Prices Add to Farmers' Losses

In Gao'an, Jiangxi Province, farmer Zhang Shujuan told The Epoch Times many local farmers had sold their pigs early because buyers had become harder to find.

Zhang said the problem was particularly difficult for small-scale farmers, who have limited financial reserves and few alternative sales channels.

"Now the government doesn't provide much in the way of subsidies," she said.

Swine fever occurs every year in some parts of China, Zhang said, but she believes this year has been particularly severe in some provinces.

The farmers' accounts come as China's pig industry faces a broader profitability squeeze.

According to data cited by Chinese media National Business Daily, the national average price for three-way crossbred pigs was 10.82 yuan ($1.61) per kilogram in August, down 21.42 percent from a year earlier.

For small farmers, an outbreak can therefore create a double financial burden, since infected pigs may have little or no market value, while farmers still have to dispose of dead animals.

The reported outbreaks and vaccine concerns remain based largely on farmers' accounts, and the extent of African swine fever in the affected areas cannot be established from those reports alone.

Li Jing and Gu Xiaohua contributed to this report.

Tyler Durden Sun, 10/04/2026 - 22:10

Trump Taps Intelligence Chief Jay Clayton As AI Czar, Brushing Off Calls To Slow Down

President Trump on Sunday named Director of National Intelligence Jay Clayton the White House's AI czar. Clayton will hold both jobs, keeping the DNI post while spearheading the administration's AI strategy.

Trump announced the move on Truth Social, saying the new "Super Intelligence Force" will "ensure that America continues to lead the World in Super Intelligence." Its vice chairs are FTC Chairman Andrew Ferguson, OPM Director Scott Kupor and Pentagon Chief Technology Officer Emil Michael. Vice President JD Vance, Defense Secretary Pete Hegseth and Treasury Secretary Scott Bessent also sit on it, and it reports to Trump and Chief of Staff Susie Wiles.

The force has 120 days to report on the risks and opportunities of the technology and to recommend ways to strengthen the government's response. Its charter, according to Implicator, calls for "preventing overregulation and regulatory capture that would stifle innovation and competition."

Clayton takes a job last held by David Sacks, who stepped down as White House AI and crypto czar in March and now co-chairs the President's Council of Advisors on Science and Technology. Sacks is one of two outside advisers to the force, along with former Secretary of State Condoleezza Rice.

Bessent had been mentioned for the job until Trump ruled it out on Sept. 25. "Scott Bessent will not be going to be Super Intelligence (SI) Czar," Trump wrote. "Number One, he doesn't want to. Number Two, he's doing such a great job at Treasury, and that's where I want to keep him! Why would I ever make such a change? Just more Fake News!" Axios reported Friday that Trump was expected to pick Clayton instead, and Trump has described Clayton as "a good man" for the role.

*TRUMP WARMS TO JAY CLAYTON AS AI CZAR: AXIOS

— zerohedge (@zerohedge) September 29, 2026

The pick comes three weeks after a run of statements on AI safety. On Sept. 12, Anthropic CEO Dario Amodei published an essay titled "We Must Pace the Frontier" that proposed embedded third-party evaluators inside AI labs. The next day, Obama urged Democrats to have a "clear plan" for AI safeguards, and Sacks backed a self-imposed slowdown by the labs while rejecting a "cartel" framework for it, according to the Washington Examiner.

Trump responded on Sept. 14 with a Truth Social post: "The only control or 'guardrails' that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades!" He also took aim at Amodei by name:

"The Trump Administration has stopped AI 'people' from doing bad, or potentially bad, 'things,' like Dario (Anthropic!), who is now pretending to be a 'perfect little angel' and will continue to do so!" He added: "We already have tremendous CRIMINAL and REGULATORY power over these companies! There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China. WHOEVER WINS AI, WINS!"

Ten days later, Trump rebranded AI as "super intelligence" at the UN General Assembly and rejected "any attempt to construct a globalist scheme to control" it. Four days after that, he hosted Amodei for dinner at the White House. The next day, Amodei, Elon Musk, Google's Sundar Pichai, Meta's Mark Zuckerberg, Nvidia's Jensen Huang and OpenAI's Greg Brockman were among the signers of a voluntary accord pledging "robust" controls on their models and independent audits. Trump called it "morally binding."

Clayton, who sidestepped questions about taking the job in a CNBC interview on Sept. 30, called super intelligence "a national security issue" and questioned what an AI pause would even mean while other countries keep building. At his July 15 confirmation hearing, the former SEC chairman and US attorney for the Southern District of New York said AI "is not only an opportunity but a threat." He added: "When something is both an opportunity and a threat, you better get your arms around it."

 

Tyler Durden Sun, 10/04/2026 - 22:00

"Deeply Flawed": Biggest US Grid Scraps Emergency Data Center Power Auction One Day After FERC Smackdown

We have been documenting the slow-motion collision between the AI capex fantasy and the laws of physics since late 2025, when we noted that some of Oracle's OpenAI data centers were being pushed back to 2028 (Dec 12, 2025). Since then the delays have gone from anecdote to trend: in April we reported that half of US data centers scheduled to start in 2026 will be canceled or delayed (Apr 13), in August that more than two-thirds of the power sought for US data centers will never materialize (Aug 14), and just last week the two flagship Stargate campuses hit the wall within 24 hours of each other, with SB Energy delaying the IPO meant to fund the world's largest data center (Sept 23) and Oracle's Project Jupiter declaring force majeure (Sept 24).

Now we can add the US electrical grid itself to the list of things that won't arrive on time.

On Wednesday, PJM Interconnection, operator of the largest US grid stretching from Illinois to DC serving 67 million customers across 13 states, and home to Virginia's Data Center Alley, suspended the one-time "backstop" auction it was about to launch to plug a 6.8 gigawatt hole in its supply stack, less than a day after FERC ordered it back to the drawing board. The procurement, which was supposed to open for offers on Sept 30 and run through Oct 21 with selections by early December, now has, in the words of a PJM spokesman, a launch date that is "yet to be determined."

For those keeping score, that is a power auction for data centers... delayed. You can't make this up.

How We Got Here

Recall that in July, PJM's base capacity auction for 2028/29 came up 6.8GW short of its reliability requirement, the first time in PJM's history that the entire RTO fell short, and only the price cap kept the clearing price at roughly $325/MW-day. As we tweeted that night, without the ceiling, PJM capacity prices would have been 70% higher at $554.72. A few hours later we added that "PJM is already below the critical reliability threshold."

Capacity prices went from $28.92 to the cap in two auctions, and the cap is the only thing keeping 2028/29 from $554.72.

Who is paying for this? Mostly people who have never heard of a hyperscaler. According to PJM's own market monitor, data centers accounted for $6.3BN, or 38%, of the $16.4BN in charges from the latest auction, and $29.4BN, or 46%, of the $63.6BN tab across the last four auctions (Jul 22). That's the "nearly $30 billion" Bloomberg references today, and it lands on the bills of 67 million people across 13 states and DC.

Said otherwise, nearly half of four years of capacity costs trace back to data centers.

Hence the backstop: a one-time, 15-year procurement for new capacity, with costs meant to fall on the data centers driving demand. FERC Chairman Laura Swett had warned in July that FERC would impose reforms if PJM didn't adopt changes by September (Jul 28). PJM filed its Reliability Backstop Procurement (RBP) on July 31. And on Tuesday, FERC delivered its verdict.

"Deeply Flawed, Eleventh-Hour"

FERC accepted parts of the plan but suspended the framework for five months, with Swett saying the commission "will not be forced into accepting a deeply flawed, eleventh-hour procurement." The key objections center on cost allocation, the rules for transmission owners exiting the arrangement, and collateral requirements for load-serving entities. On that last one, Northern Virginia Electric Cooperative alone would have had to post roughly $2BN in collateral. The offer cap in the procurement, incidentally, was $555/MW-day, or almost exactly the uncapped price the July auction would have cleared at.

As Bloomberg notes, the bigger issue is that even a working backstop only covers part of the gap. PJM's independent market monitor, Joseph Bowring, pointed out that the current proposal addresses only some of the shortfall, and that rapid data center growth will require even more capacity. Which is a polite way of echoing what we said in July - and in the year before - namely that the 6.8GW hole is the floor, not the ceiling. Back in February PJM itself said the shortfall could grow to 60GW over the next decade without action, to which we responded that the "capex spending plans will be scrapped since there is not enough juice to power the DCs." Seven months later, here we are, scrambling to find the juice to power up the trillions in capex... 

Goldman: Net Bearish For The IPPs, And The Real Fight Is IRAS

Goldman utilities analyst Carly Davenport was quick to weigh in (note available to pro subscribers). The key detail: FERC's order makes the RBP effective February 28, 2027. PJM can either sit through a paper hearing or bypass it by submitting a new Section 205 filing within 30 days, which could accelerate final approval.

Goldman's verdict is that the suspension is "net bearish but mixed" for independent power producers to wit:

"...lack of clarity around the finalized framework could lengthen the regulatory overhang on the stocks and dampen data center customer appetite to sign long term PPAs, though [we] continue to point to higher pricing and tight markets in PJM in the absence of line of sight to new capacity."

Translation: fewer hyperscaler contracts in the near term, but the shortage that makes existing generation so valuable isn't going anywhere. Goldman sees Buy-rated Talen (TLN) and Neutral-rated Constellation (CEG) as most exposed given their PJM leverage, with Vistra (VST) and NRG somewhat more insulated. The group trades at an average 7.4x EV/EBITDA and a ~12% FCF yield on 2027 estimates (ex-CEG), which is what a "significant discount" looks like when nobody knows what the rules will be.

More importantly, Goldman thinks the backstop may matter less than the other PJM filing pending at FERC: the Interim Resource Adequacy Service (IRAS), the framework for large loads that want to connect without bringing their own capacity, in exchange for being curtailable. As Davenport wrote when PJM filed it in August, IRAS lets data centers waive curtailment compensation, excludes new large load from the capacity demand curve to shield residential customers, and asked FERC to rule by October 12 so bilateral data center contracts could move forward, even though it wouldn't take effect until June 2027. Since many developers and customers prefer bilateral deals, a constructive IRAS ruling "could limit the need of the RBP." In other words, the next two weeks matter more for the IPPs than anything PJM said last week.

Meanwhile, The Market Isn't Waiting

While regulators argue about collateral, power traders have done their own math. According to Goldman's commodities desk (see Isabel Blaze's latest "US Power Biweekly" report), PJM has "seen substantial repricing across the curve over the past month."

September peak cash is set to clear at $128/MWh, up 47% from where it traded entering the month, thanks to an unusual heat pattern and scheduled transmission outages. October pinned above $100 at yesterday's options expiry, and the Cal27 through Cal29 strips are all trading above $90, with load-serving entities stepping up hedging of their intermediate-term commitments. Goldman's summary: "a market that has repriced meaningfully higher across both cash and forward tenors." In simple terms: even higher bills are coming.

Of course, none of this comes cheap for households. In the first installment of its new Affordability series, published Monday (see "Inside Customer Affordability: An Introduction to the Electric Utility Bill"), Goldman found that the "most prominent affordability impact" in the country is on PJM customers, "where capacity prices have reflected the tightening supply and demand in the market." The bank forecasts utility bill inflation of 3.7% a year on average through 2029 (narrator: it will be much higher).

Source: Goldman

Last week, after hosting Exelon's VP of federal regulatory affairs, Goldman reported that the utility doesn't believe PJM's current capacity market construct is adequate to incentivize new supply, and sees heightened scrutiny of data centers and bill inflation persisting beyond the November midterms. It's almost as if voters in Maryland, Pennsylvania and New Jersey have noticed.

Bring Your Own Power Plant

None of this is surprising to regular readers. Last November, as electric bills began their vertical ascent, we said that every state has to follow the Texas example and require each data center to have its own "behind the meter" onsite generation. A month later we put it more succinctly: Make "behind the meter" mandatory (Dec 23).

Wall Street is catching up. Last week Goldman raised its 2030 global outlook for behind-the-meter generation by 68%, to 67GW from 40GW, with gas turbines and fuel cells each expected to capture a quarter or more of incremental deployments, and as we detailed on Monday, the bank now sees BTM powering 25% of all data centers by 2030. Longer term, we continue to believe small modular reactors are the only real solution, although the path there remains, let's say, bumpy: just days ago FERC sided with PJM and kicked Oklo's 750MW Virginia hybrid project out of the interconnection queue, which Oklo warned will delay development by "more than a year."

So to recap: the data centers are delayed, the financing is delayed, the IPO is delayed, the power plants are delayed, and now the auction to pay for the power plants is delayed until at least the end of February. The only thing arriving on schedule is the electric bill.

Tyler Durden Sun, 10/04/2026 - 21:35

Trump Calls On Senate To Pass Bill Making Daylight Saving Time Permanent

Authored by Jack Phillips via The Epoch Times,

President Donald Trump on Friday morning urged Senate Republicans to pass a bill that makes daylight saving time permanent, coming months after the measure cleared the House of Representatives.

President Donald Trump at U.N. Headquarters in New York City on Sept. 22, 2026. Chip Somodevilla/Getty Images

"A ridiculous Clock changing process that takes place twice a year, costs our Country a fortune, is bad for Crime, stress on people, Sports, and just about everything else you can imagine," Trump said in a long Truth Social post early Friday.

He added that people don't want to change their clocks while asserting that "most people like having an hour of extra sunlight in the evening, rather than in the morning."

The House in July passed the measure, dubbed the Sunshine Protection Act, on a 308-117 vote before sending it to the Senate for approval. But the bill has not been considered.

"It is foolish, inconvenient and, in some cases, very costly. For Cities and States with Watchtowers, and hard to reach places, it costs Millions of Dollars. A recent case was made that it is also bad for your health in the anxiety it creates," the president said.

Blaming Sen. Tom Cotton (R-Ark.) for holding up the bill, Trump wrote that the bill has bipartisan support. "Democrats and Republicans want it to happen. It's now up to the U.S. Senate where it would be another Great Bipartisan Victory," he added.

Last year, Cotton told the Senate that he would oppose the measure and said a similar measure was repealed in the mid-1970s.

In 1973, Congress passed a law instituting permanent daylight saving time for what was supposed to be a trial period from January 1974 to April 1975. It lasted until October, when it was repealed. Among the concerns was worry that schoolchildren would have to start the school day without daylight.

"While briefly popular, it proved deeply unpopular when reality set in," Cotton said, adding that polls taken at the time show that support for permanent daylight saving time dropped by 30 percentage points in three months.

"Only a few weeks after it was implemented, it was underwater. Congress beat a hasty retreat, repealing the law and changing the clocks back in October. What was supposed to be a two-year experiment ended in abject failure after less than one year."

Sen. Mike Rounds (R-S.D.) said he's also concerned about that. He said that it would be dark past 9:30 a.m. in some areas of his state. "You'd be sending kids to school in the dark," he told The Associated Press last year.

Before it was passed in the House, some Democratic lawmakers including Rep. Frank Pallone (D-N.J.) explained why they supported the Sunshine Protection Act.

The measure, Pallone said in July, would deal with "an issue on which many Americans actually agree," adding that only around 12 percent of Americans want to switch their clocks twice per year.

"Far more Americans recognize that the practice is inconvenient and, frankly, disruptive," he said.

Cotton's office did not immediately respond to a request for comment Friday.

The Associated Press contributed to this report.

Tyler Durden Sun, 10/04/2026 - 20:00

Bolsonaro Leads As Brazil Election Heads Toward Runoff; Traders Brace For Monday Volatility

Summary: 

• Datafolha Says Election Headed For Runoff 
• Right-Wing Bolsonaro Leads Socialist Lula
• Polling closed at 4 pm local time 
• Brazil Votes In Tight Presidential Election With South America's Future On The Line

Bolsonaro Leads But Headed For Election Runoff 

Brazil's presidential election is headed for a runoff on Oct. 25.

Right-wing Senator Flávio Bolsonaro held about 47.8% of the vote against President Luiz Inácio Lula da Silva's 44.2%, with roughly 92.3% of ballots counted.

Paulo Abreu, founding partner and portfolio manager at Rio de Janeiro-based Mantaro Capital, told Bloomberg he expected a strong opening for Brazilian assets on Monday morning, saying investors had been lightly positioned for the result.

"Tomorrow will be a much better day than even the most optimistic investors had expected," Abreu said, adding that the outcome would encourage investors to increase their exposure.

Currency futures trading on CME also signaled expectations of a stronger real, with the quoted exchange rate moving to about 5.01 from Friday's close of 5.25.

Brendan McKenna, an emerging-markets strategist at Societe Generale, expects the Brazilian real to jump 4% to 5% on Monday following Bolsonaro's first-round lead.

"Assuming no new scandals, always possible, and Bolsonaro is set to win the runoff, I think local assets can continue to rally into the second round, he said.

Bloomberg reporter Beatriz Reis wrote:

With more than 91% of ballots counted and Bolsonaro holding a surprise first-round lead, his campaign's theory suddenly looks more plausible: that some voters were reluctant to publicly admit they planned to back the right-wing senator. Whether that phenomenon actually explains the polling miss will take time to determine, but the result exposed support for Bolsonaro that pre-election surveys failed to fully capture.

Now the challenge flips for both campaigns. Lula has just three weeks to understand where he lost ground and win those voters back. Bolsonaro has to protect an advantage few expected him to have and prove that Sunday's surprise can survive all the way to the Oct. 25 runoff.

Polymarket:

Latest Election Development

Brazil's presidential election is headed for a runoff, Datafolha projected just moments ago, setting up a second-round contest between socialist President Luiz Inácio Lula da Silva and right-wing Senator Flávio Bolsonaro on Oct. 25.

Latest Election Count

Right-wing Senator Flávio Bolsonaro leads socialist President Luiz Inácio Lula da Silva 51.2% to 40.7%, with just 18.7% of votes counted in Brazil's first-round presidential election Sunday.

Polymarket:

Right-Wing Bolsonaro Leads Socialist Lula 

Polls closed at 4 p.m. Brazil time, and the latest figures from the Superior Electoral Court show right-wing Senator Flávio Bolsonaro leading socialist President Luiz Inácio Lula da Silva 50.2% to 41.3%, with just 4.3% of votes counted in Brazil's first-round presidential election Sunday.

The preliminary results offer only a limited indication of the final outcome, with most votes still to be counted.

These preliminary results sent Bolsonaro's Polymarket odds soaring from 64% around 4 p.m. New York time to 77% around 4:43 p.m. Lula's odds on the betting platform cratered to just 23%.

Brazil Votes In Tight Presidential Election With South America's Future On The Line

Brazilians began voting earlier this morning in a statistically tied presidential election, with incumbent socialist President Luiz Inácio Lula da Silva holding a narrow polling lead over right-wing Senator Flávio Bolsonaro. Election results are expected later this evening, and the race is likely headed for a runoff later this month.

Lula and Bolsonaro are effectively deadlocked in a potential runoff. The latest AtlasIntel poll puts Lula at 47.6% against Bolsonaro's 47.4%, while Datafolha showed the incumbent ahead 47% to 46%. Quaest has Bolsonaro at 44% against Lula's 42%, within its two-point margin of error.

However, Polymarket bettors see a clearer favorite, giving Bolsonaro a 63.3% chance of winning versus 37% for Lula as of early Sunday morning.

Polls close nationwide at 5 p.m. Brazil time, or 4 p.m. in New York. Brazil's electronic voting system allows counting to begin immediately, with the electoral court expected to deliver a definitive result between 7 p.m. and 8 p.m. Brazil time.

The race will determine whether Brazil continues down its destructive socialist path or cements what could be a once-in-a-generation political shift across South America, with the continent's largest economy potentially moving to the right. Recent elections in Colombia, Peru, Chile and other countries have shifted from left-wing regimes to right-wing governments.

We outlined on Friday the potential market impacts and expected volatility following the first-round results:

• Brazil Braces For Election Volatility As Bolsonaro Gains On Lula, Bullish Options Bets Explode

One notable chart shows that the Brazilian real's one-week implied volatility has jumped above 31%, its highest level since late 2022. That exceeds the one-month measure, which captures both voting rounds but remains below 25%, highlighting the extreme concentration of risk ahead of Sunday's vote.

"We expect the biggest surprise to come in the first round, with Flávio likely to finish ahead of Lula," Fabricio Taschetto, CIO at Ace Capital, wrote in a note. He added that the market reaction could exceed the move already priced into options.

Citigroup and JPMorgan analysts have told clients to use options that would benefit from a stronger real, while Brazilian hedge funds, including Ibiuna and Verde, have told clients they have positioned themselves with options for a potential stock rally.

Tyler Durden Sun, 10/04/2026 - 19:54

"Very Concerning Safety Issues": Trump's mRNA-Skeptic FDA Drug Chief Was Mysteriously Fired - Right Before This Drug Was Approved

Within three months of firing Tracy Beth Høeg, its top drug regulator, the FDA had approved the first mRNA flu shot, cleared a Sanofi diabetes treatment for children that she had held up, and approved a twice-rejected melanoma drug whose maker went to the White House.

"I'm worried about approvals that we've seen recently, like the mRNA influenza vaccine," Høeg told journalist Paul Thacker in an interview posted Wednesday, citing "very concerning safety issues."

Of the melanoma drugmaker's White House meeting, she said: "I guess that's what you do now if you're angry that your product is not approved. One has to wonder, is it approved based on the data or do they just know the right people?"

Høeg still doesn't know who ordered her firing. When agency lawyers came to her office on May 15, three days after Commissioner Marty Makary was pushed out, she refused to resign. The lawyers told her the order came from "someone way above their pay grade."

The person who supposedly wrote her termination memo denies writing it or ever seeing it, she says. Health Secretary Robert F. Kennedy Jr. only learned of the firing after she was gone, the New York Times reported.

Thacker told Høeg his sources inside the Department of Health and Human Services say Chris Klomp effectively runs the department. The White House installed Klomp, the Medicare director, as HHS chief counselor in February. He also helped negotiate the administration's pricing deals with drugmakers.

Those sources say Klomp pushed out Makary and "probably" Høeg too, and that CEOs "have Chris Klomp on the phone all the time." "You're not the first person to suggest that to me," Høeg replied.

The day Høeg was fired, Reuters reported that Klomp was leading a push to clear controversial appointees out of the FDA. HHS told Reuters it does not comment on personnel matters.

Makary resigned on May 12 after other administration officials forced through flavored-vape authorizations he had opposed, CBS News reported. Politico reported that Kennedy made the final call on pushing him out. Drugmakers had soured on the agency's reversals on experimental drugs and vaccines and wanted a more predictable FDA, according to NPR.

Klomp's nomination as Kennedy's deputy cleared the Senate Finance Committee 15-12 last Thursday and awaits a floor vote. "I'm responsible for personnel, among other things," he told senators this month.

The mRNA shot

In February, with Makary leading the FDA and Vinay Prasad running its vaccine center, the agency refused even to review Moderna's application. About two weeks later, it reversed course and agreed to take it up.

Prasad left at the end of April, followed by Makary on May 12 and Høeg three days later. In June, the FDA's outside vaccine advisers voted unanimously to recommend the shot. On Aug. 5, the agency approved it as mFlusiva for adults 50 and older.

Moderna's trial of more than 40,000 adults found that the shot cut the odds of flu-like illness by 27% compared with a standard-dose vaccine. Neither the company nor FDA staff reviewers identified new or serious safety concerns. Approval for those 65 and older is conditional on a follow-up study.

"I don't think we can say that the benefits outweighed the harms," Høeg said, adding that she would probably detail her concerns later.

Held up, then approved

Sanofi's Tzield was first approved in 2022 to delay the onset of clinical type 1 diabetes in patients with early-stage disease. In October, Sanofi's bid to extend its use to newly diagnosed patients 8 and older entered Makary's new voucher program, which promises reviews in one to two months.

Career staff recommended approval, but Høeg disagreed, and Sanofi pulled the drug out of the fast-track program. The FDA missed its April 21 goal date, STAT reported.

On June 12, four weeks after Høeg was fired, the FDA granted Tzield accelerated approval for newly diagnosed patients 8 to 17. The decision was based on its effect on C-peptide, a marker of the body's own insulin production, rather than on a clinical outcome. No outside advisory committee weighed in. The drug's known risks include cytokine release syndrome and viral reactivation.

"That was supposed to go to an advisory committee," Høeg said. "And that's a drug that's given in children. And if you look at the pivotal clinical trial at that stage of the disease, there's no clear evidence of clinical benefit for these children with type 1 diabetes." Sanofi is running a confirmatory trial to support full approval.

A meeting at the White House

The FDA rejected Replimune's RP1, an engineered virus injected into melanoma tumors, in July 2025 and again in April. After the second rejection, the company took its case to the White House in early May, arguing that the decisions clashed with the administration's push to help terminally ill patients. The White House then pressed health officials to take another look, the Wall Street Journal reported. The White House declined to comment to the Journal.

On May 29, two weeks after Høeg was fired, Replimune announced that it would try a third time. Company officials had met with FDA and White House officials two days earlier. Its shares jumped as much as 70% in premarket trading.

In briefing documents, FDA reviewers argued that the way Replimune designed the trial and measured responses made it difficult to separate RP1's effect from that of Bristol Myers Squibb's Opdivo, which patients also received. The trial had no control arm. An outside panel sided with the company 10-3 on July 30. On Aug. 6, the FDA granted accelerated approval. Replimune set the list price at $450,000 per course.

"It went against everything the career staff had said about the limitations in the data," Høeg said.

Whose report was it?

Høeg's reputation as an mRNA skeptic dates to the pandemic. A 2021 study she led concluded that, for healthy teenage boys, the rate of heart inflammation after a second dose exceeded their four-month risk of being hospitalized with COVID. At the FDA, she reviewed reports of children who died after COVID vaccination and asked why the findings had never been made public.

Prasad's Nov. 28 memo, which set off the uproar, credited career staff in the FDA's pharmacovigilance office with finding that at least 10 children had died "after and because of" vaccination. When Høeg was fired, The Hill reported that she helped author the report, while CBS News reported that she helped write Prasad's memo. It was "the career staff, not me" who linked the 10 deaths to the vaccine, Høeg said.

The final staff review, dated Dec. 5 and made public by Sen. Ron Johnson in May, examined 96 pediatric deaths reported from 2021 to 2024. It rated two "probably" and five "possibly" related to vaccination. None was rated definitively related.

Johnson later released drafts showing how the assessment had changed. Høeg suggested that staff who had handled the cases for years had a vested interest in the deaths not coming to light. "Why are we sitting on them for years if they're concerning?" she asked. ZeroHedge detailed the fight over the review in May.

Still on sale

Tavneos is still on sale in the US, five months after Høeg's drug center moved to pull it. Amgen's pill for a rare autoimmune disease of the blood vessels was approved in 2021 on the strength of a single pivotal trial. The FDA had told its developer that the trial had to show the drug beat steroids at 52 weeks.

In January, the FDA asked Amgen to withdraw it voluntarily. Amgen declined. In April, the agency formally proposed withdrawal, saying unblinded study personnel had manipulated the trial's results and the application contained untrue statements of material fact. The FDA has also linked the drug to 76 cases of liver injury, including eight deaths.

On June 26, Europe's medicines committee recommended revoking the drug's license. Three days later, the New England Journal of Medicine retracted the pivotal trial at the request of its two academic authors. The journal said nine patients' results had been re-adjudicated after the data were unblinded, without the authors' knowledge. Britain stopped new patients from starting the drug in September.

"People have died taking this drug and we don't know if it works," Høeg said.

Amgen, which acquired the drug's developer, ChemoCentryx, for $3.7 billion in 2022, says it strongly disagrees with the proposal and has requested a hearing. It points to an independent re-analysis from Duke that it says supports the drug's efficacy.

Its own prescriber page states that superiority "was not demonstrated at week 52." Tavneos brought in $459 million last year, and first-quarter US sales rose 32% to $119 million.

Under federal law, the drug stays on the market until the FDA commissioner rules on Amgen's hearing request and on withdrawal. Since May, the agency has been led by acting commissioner Kyle Diamantas, a lawyer who oversaw food regulation. Trump's pick for the permanent job, White House aide Heidi Overton, had her confirmation hearing last week and is awaiting a vote.

Tyler Durden Sun, 10/04/2026 - 19:30

Iran "Decision Week": Trump Teases "Easy Way Or Hard Way" As Tankers Burn, Rial Craters And Tehran's Oil Minister Quits

Seven months into the war, the Iran story has settled into a familiar loop: Tehran sets conditions, Washington rejects them, a tanker catches fire, oil stays at $100, repeat... then a modest de-escalation before markets open on Monday morning and reversal around Friday's closer. 

This weekend, though, felt different. Nearly every piece of the puzzle moved at once, and the man at the center of it all made clear that he has a decision to make.

"We have a decision that I'll make about Iran. Iran's been decimated. So the only question is, it'll either be the easy way or the hard way," President Trump told reporters outside the White House on Saturday. Asked what was coming, he offered the kind of non-answer that tends to precede actual answers, or even more non-answers: "If I told you, you'd have a major story, right? But you'll see."

Here is what happened over the weekend, and what to watch in the week ahead.

The Camp David War Council

The "you'll see" makes more sense in light of what happened on Friday. CBS News confirmed that the administration's entire Iran brain trust met at Camp David: Vice President JD Vance, Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, special envoy Steve Witkoff, CIA Director John Ratcliffe and Joint Chiefs Chairman Gen. Dan Caine. Axios first reported the unannounced session, which Vance chaired. Two items were on the agenda: the Iran war, and the Saudi-Houthi war in Yemen that is now spilling into global oil routes (more below).

The White House has not said what was decided. One person familiar with the meeting told Axios that "things were decided or at least deeply discussed," which is a remarkably candid way of saying nothing, right about par for the course for an Axios "scoop." For context, the last time this crowd quietly decamped to the Maryland mountains to talk Iran was in June 2025. You may recall what followed (spoiler: it involved B-2s).

Meanwhile, the military is moving into position regardless. The USS Theodore Roosevelt carrier strike group and the USS Makin Island amphibious group are heading to the Middle East with about 7,000 sailors and 2,000 Marines, due by the end of October. Bloomberg notes that this could give the US three carrier strike groups in the region, a concentration not seen since the opening phase of the Iraq war in 2003. Hegseth, for his part, called the US blockade of Iranian ports "ironclad."

We flagged the build-up when the third carrier was first announced in "Supertanker Ablaze After Iran Attack In Hormuz As US Deploys 10K More Troops & Third Carrier To Mideast" (Oct 1). Trump himself had been dropping hints for days:

*TRUMP ON IRAN: YOU WILL SEE THINGS HAPPENING VERY SOON *TRUMP: HISTORIC FLOWS OF OIL OUT OF HORMUZ IN LAST 3 DAYS

— zerohedge (@zerohedge) September 30, 2026

On timing, Trump told TIME last week that heavier strikes are "possible" after the Nov. 3 midterms. And according to Bloomberg, Iranian officials themselves see little chance of a deal before the vote and a "high chance of escalation" after it. So "decision week" may yet turn into "decision month" (this is still Washington, after all).

Bombers Out Of Britain

The other military headline came from England. The Pentagon confirmed on Sunday that all US bombers deployed to RAF Fairford, a dozen B-1Bs that had been used for strikes on Iran, have returned to their home stations in the United States. The move came a week after several men were arrested near the base on suspicion of preparing terrorist acts. The WSJ first reported the redeployment.

"While operational security precluded us from confirming the movement of our assets and forces in real-time, we can acknowledge now that all US bombers that were deployed to RAF Fairford have re-deployed to their home stations in the United States," a Pentagon spokesman wrote, per Reuters.

UK Prime Minister Andy Burnham said on Wednesday that Britain has "strong indications" Iran was involved in the plot. US intelligence describes an IRGC-linked handler recruiting British citizens for a multi-stage operation, starting with a diversion near the base. Trump said the plotters had planned "big damage," while Rubio pointed to the "hands of a foreign actor." Tehran called the accusations baseless and summoned the British ambassador. Five British suspects, plus a sixth with dual British-Iranian citizenship who was arrested in London, have all since been released on bail. Some UK officials have also questioned whether the plot was as sophisticated as US accounts make it sound.

The Pentagon insists that moving the bombers does not reduce its long-range strike capability. That is probably true: B-1s can reach Iran from the continental US with aerial refueling. It just takes a lot longer, and nobody has to worry about who is loitering near the fence line. Make of that what you will.

Two More Tankers Hit, And Hormuz "Will Not Be Opened"

On the water, the attacks continued. On Sunday the UK Maritime Trade Operations agency (UKMTO) reported two more tankers struck by unknown projectiles (CNBC). One was hit inside the Strait of Hormuz and suffered engine-room damage. The other, a crude carrier roughly four nautical miles east of Oman, was hit on its port side. All crew were reported safe and no environmental damage was reported. By SBS's count, that makes at least four incidents in October alone. The first was the 2.5-million-barrel supertanker set ablaze off Oman on Thursday, which Iran's Fars said was using an "unauthorized" route.

Fars reports that a 2.5 mm barrel supertanker that was traveling through the Strait of Hormuz "illegally" was hit 8 kilometers off the coast of Oman and is burning https://t.co/BzV5N87ZEi

— zerohedge (@zerohedge) October 1, 2026

UKMTO's latest weekly report counts 91 incidents of damage to vessels since February. Since July 6, 31 of 48 projectile strikes have happened along the southern Omani route, the US-facilitated corridor that much of the recovering Gulf traffic now uses.

Hours before the latest strikes, Iran restated its terms. Per Reuters, parliament speaker and chief negotiator Mohammad Baqer Qalibaf said:

"The position of the Islamic Republic of Iran is completely clear and firm, and the Strait of Hormuz will not be opened until our seven conditions, based on the Islamabad Memorandum of Understanding, are met... [Washington] must understand that the period of dragging out the (diplomatic) process and dictating one-sided demands is over." (emphasis ours)

For anyone who has lost track, these are the seven conditions Tehran presented in September: (1) lift the maritime blockade; (2) restore Iran's frozen assets; (3) lift sanctions on Iranian oil exports; (4) halt all US actions "under the pretext of threats and military operations"; (5) end the war on Iran and its regional allies; (6) withdraw US forces from areas around Iran's borders; and (7) pay compensation for war damage and commit not to interfere with Iran's nuclear and missile capabilities. Translation: everything, plus reparations. So it is perhaps not a shock that Trump "promptly rejected" the seven-day reopening plan built on these terms.

Foreign Ministry spokesman Esmaeil Baghaei said that the US counter-proposal, relayed via Qatar, is "more or less in line with their previous positions, specifically on the nuclear issue." He added that Tehran's focus "in this stage is the issue of the Strait of Hormuz," and denied that Iran had offered UN inspections in exchange for sanctions relief. One official briefed on the talks told Reuters that the dispute is about the sequencing of steps, not their content. Meanwhile, FM Abbas Araqchi warned that if the US "again move[s] towards military solutions, we are more prepared than before."

"Iran Zero": The Blockade Bites

The irony is that the strait Iran is "keeping shut" is increasingly open to everyone except Iran. As we laid out in "Gulf Exports Roar Back To Pre-War Levels, Goldman Says" (Sep 30), Goldman's commodity strategists estimate that Persian Gulf oil exports, including "dark exports," have effectively recovered to their 2025 average. Saudi Arabia led the rebound... while Iran fell below 20% of its 2025 level.

In this weekend's update for clients (available here for pro subs), Struyven, co-head of Goldman's global commodities research, put the latest number at 23.6mb/d, about 4mb/d of which is estimated dark exports. He added that "the data show no seaborne crude exports from Iran in September." JPMorgan, cited by Bloomberg, estimates Middle East crude shipments are back to 17.5mb/d, or 98% of pre-war levels. According to Bloomberg tanker tracking, Saudi crude exports jumped from 3.4mb/d in August to roughly 6.1mb/d in September.

Treasury Secretary Scott Bessent kept score in our earlier post "First Time In History": Bessent Says Iran Faces Zero Oil Revenue As Tanker Loadings Collapse: "barrels out of the Strait: U.S. about 1.1 billion, Iran zero... For the first time in history... they will have no oil on the water this week. They will have no revenue."

Which brings us to the man whose job was to produce that revenue.

The Oil Minister Who Had No Oil To Sell

Iran's oil minister Mohsen Paknejad resigned on Sunday. State media said the reasons were "personal." Hamid Bovard, chief executive of the National Iranian Oil Company, takes over as acting minister.

*IRAN’S OIL MINISTER MOHSEN PAKNEJAD RESIGNS: PRESS TV *IRAN PRESIDENT NAMES HAMID BOVARD ACTING OIL MINISTER:PRESS TV

— zerohedge (@zerohedge) October 4, 2026

Mehdi Tabatabaei, communications deputy in the president's office, told state TV that Paknejad had resigned "a long time ago" and that President Pezeshkian accepted it at Paknejad's insistence. The timing is still remarkable. Just hours before the news broke, Paknejad was quoted by state media insisting that "revenues of the oil that we have sold are still coming and that will continue, God willing." When an oil minister leans on divine intervention for cash flow, the cash flow is probably not great.

The Rial: 2.7 Million And Counting

The clearest scorecard of the economic war is Iran's currency. On the open market the rial has fallen to a record low of about 2.7 million per dollar, and the euro topped 3 million rials for the first time (per Iran International). That is despite a central bank plan to inject $2 billion of banknotes, with the first $1 billion sold through banks at up to $10,000 per ID holder. Official year-over-year inflation has hit a record 89.8% (in reality it is much higher), and at the current rate the monthly minimum wage of 166 million rials works out to roughly $66.

Bloomberg calculates that the rial has lost about 25% against the dollar in the past two months alone. Readers who were with us for "Iran's Deadline Expires Today": Tehran Threatens Renewed Attacks As Blockade Bites, Rial Collapses will recognize that the slide is accelerating rather than leveling off. Bessent calls the collapse proof that the sanctions campaign is working. Economy Minister Ali Madanizadeh says "predictions of collapse repeatedly proved wrong" and blames "psychological pressure." Both may well be true, which is what makes Tehran's next move so hard to call.

Kuwait University's Bader Al-Saif put the dilemma well to Bloomberg: "Everyone has a breaking point, and Iran is no exception... The irony is that such pressure can yield opposing responses: concessions or a preemptive strike."

Meanwhile In Yemen: Oil Advances As Traders Track Saudi-Backed Offensive

As if one war weren't enough, a second front reopened on Sunday. Yemen's Saudi-backed government launched a major offensive to recapture all Houthi-held territory. Presidential Leadership Council head Rashad al-Alimi vowed to fight "until the country is liberated from the grip of the terrorist militia." According to Reuters, the Saudis are leading the air campaign while Yemeni forces fight on the ground, and the US is already providing intelligence.

The stakes are about oil as much as territory. Last month's Houthi offensive captured the Bab el-Mandeb strait and some 150km of Red Sea coast, the very bypass route Riyadh has been using to get crude out without getting blasting for shipping through Hormuz. On Sunday the Houthis responded by claiming missile and drone strikes on Saudi Aramco sites in Riyadh and Khurais, saying they caused major fires. Saudi Arabia has not confirmed the claims. We covered the opening shot in "In The Name Of God": Yemen Leader Orders All-Out Offensive Against Iran-Backed Houthis.

Oil noticed. Brent rose 81 cents to $103.06 in early Asian trading Monday and WTI rose to $91.57. December Brent was already up almost 5% last week, even though OPEC+ agreed to keep November quotas unchanged and the G7 announced a release of up to 100 million barrels of emergency oil and diesel. The world's largest crude exporter is now fighting a ground war on its southern border while its Gulf coast exports run through a strait it doesn't control. That is not a recipe for cheaper oil.

Regular readers know we have argued since March that the Hormuz bypasses (Fujairah, Yanbu and the Saudi East-West pipeline) would become the war's main battleground. The Houthi push on Bab el-Mandeb is the darker version of that call: Iran's proxies don't need to close Hormuz if they can close the exit. Abu Dhabi is reading from the same playbook (See "Zero Hormuz": Abu Dhabi Crown Prince Readies Tens Of Billions To Turn Fujairah Into Hormuz Bypass).

Why Is Oil Still $100? Goldman Explains

That is the question Goldman's commodity desk says it keeps getting. Gulf exports are back to 2025 levels, global inventories are still above early-2025 levels (when Brent was $75), and Goldman Research sees the market roughly balanced in September. Desk strategist Thomas Evans answered in Sunday's Weekly Commodity Thoughts (available to pro subs):

"The physical story has eased; the risk premium has not... Futures and spreads sit near local highs because the market continues to price substantial risk premium - we'd put it at roughly $20-25/bbl. That premium is justified here, because the balance delta matters: we entered this conflict with inventories on the highs and ample spare capacity; we now sit at record-low global stocks (ex-OECD commercial), with spare capacity of uncertain/at risk availability... The relevant risk is an attack taking Gulf flows back below 50% inside a few days - against a far thinner buffer. Stocks and price go non-linear once thresholds break." (emphasis ours)

The positioning detail matters more. For the first time in this conflict, Evans says, specs are buying outright delta instead of calls: "Many macro books are structured to perform if the crisis eases but bleed badly if oil spikes toward $130 - effectively short oil in the tail." In other words, a large chunk of the macro community is positioned for the "easy way." It is worth keeping that in mind when a president keeps saying "or the hard way."

Jerome Dortmans, Goldman's global co-head of oil and products trading, was blunter on the bank's Weekend Macro Call:

"My view remains that the ability for Iran to disrupt the flows out of the Strait is significant... And there's a part of this that thinks they are allowing these barrels flow out, for whatever reason... But I would think it would be too complacent to think that this is going to be the regular state of the Strait... the headline that they're bringing a third carrier group into the region and 10,000 more Marines.. is certainly not going to be something that the Iranians are going to ignore."

On the research side, Struyven is sticking with Goldman's base case that "Brent prices moderate to $85/bbl by year-end and to $80 in 2027." He adds that "we still worry about renewed potential escalation that damages more energy infrastructure, which could cause significant upside to prices." Sam Dart, his co-head, points out that the LNG recovery lags far behind oil. Hormuz LNG crossings are running at only 21% of pre-war levels, and if Gulf LNG exports stay stuck near 25% through the winter, Goldman estimates that European TTF gas would need to rise above €100/MWh.

Bloomberg's own explainer lands in the same place. Global stockpiles of about 4.3 billion barrels are down more than 400 million barrels since March (Energy Aspects) and at a five-year low. Tanker rates top $1.2 million a day for the Persian Gulf to China run. And with bond yields at 2002 highs, traders are once again using oil as an inflation hedge. BofA's economists summed up the mood in their Global Economic Weekly [MARKETDESK LINK] ("The fog of war"): "oil flows are normalizing in the Middle East, but Brent keeps trading above $100 per barrel... Something does not add up."

Decision Week: Easy Way Vs. Hard Way, Priced

So what is each path worth? BofA's commodity team, in Friday's Oil Gusher (also available to pro subs), raised its 2H26 Brent baseline to $95 (from $83) on the view that "skirmishes seem likely to continue into yearend." Its scenario tree maps neatly onto Trump's binary:

• Deal / back to the MoU ("less likely"): flows of more than 10mb/d resume; Brent averages $83 in 2H26 and $75 in 2027.
• Skirmishes continue (baseline): intermittent flows of 5mb/d; Brent averages $95 in 2H26 and $80 in 2027.
• Back to intense combat ("unlikely"): Brent goes to $120 in both 2H26 and 2027.
• War hits energy assets (tail risk): Brent averages $150 in 2H26 and $150+ in 2027, with ICE gasoil at $300.

Brent at around $103 is pricing something between "skirmishes" and "combat," which is about where the Camp David attendees appear to be. Here's what to watch this week:

• Trump's "decision." The president has now said "you'll see" at least three times in five days. The Camp David readout, or the lack of one, is the main event.
• Tehran's reply. Baghaei says "additional points" still have to go back to Washington through Qatar. Watch for any movement on sequencing, which is the real sticking point.
• Yemen. The Houthis are advancing on the last road between Taiz and Aden. Any confirmed damage at Riyadh or Khurais, or a stalled Saudi push near Bab el-Mandeb, puts Goldman's "below 50% inside a few days" scenario in play.
• The southern Omani route. At least four tanker strikes since Thursday. If UKMTO keeps reporting at this pace, the "dark export" recovery in Goldman's chart above will be tested.
• Tehran's home front. With an acting oil minister, a rial at 2.7 million and inflation near 90%, the next rial print matters as much as the next tanker report.
• Macro crosswinds. FOMC minutes (Wednesday), 10- and 30-year Treasury auctions, and China's return from Golden Week on Thursday with October fuel exports suspended. In a market where Goldman says oil is "tracking rates far more tightly than usual," these matter for crude too.

Bottom Line

Bloomberg's best summary of the standoff came from the Chatham House associate fellow Aniseh Bassiri Tabrizi: "Both sides generally want an agreement, but they are moving further apart rather than closer." Iran's leverage over Hormuz is fading, its currency is in freefall and its oil minister just walked out the door. That is exactly what makes the "easy way" more likely, and the "hard way" more dangerous. Tehran's hardliners, as one former US intelligence official told Bloomberg, "are betting that they can absorb more domestic pain and wait out US engagement in the region."

Meanwhile, the oil market, which entered this war with full tanks and ample spare capacity, now has neither. Goldman's desk puts the risk premium at $20-25/bbl, and the macro crowd is positioned for it to shrink. If Trump picks door number two, that premium will look cheap. We'll know soon enough. After all, we've been told by the president, "you'll see."

Much more in the full Goldman Weekly Commodity Thoughts and BofA Oil Gusher notes, available to pro subs.

Tyler Durden Sun, 10/04/2026 - 19:20

British Banking Whistleblower Who Exposed Lutnick's Epstein Ties Dies; Ruled Suicide

A British banking whistleblower who helped uncover previously undisclosed ties between Commerce Secretary Howard Lutnick and convicted sex offender Jeffrey Epstein has died at 57, The Banker reports.

Simon Andriesz, a veteran of the financial industry who previously served as a managing director at BGC Group, emerged as a key figure in scrutinizing Lutnick's past contacts with Epstein after digging through the massive trove of documents released in connection with the disgraced financier.

Andriesz's death was confirmed by Andy Agathangelou, founder of the Transparency Task Force, where Andriesz had previously spoken about his experiences as a whistleblower.

"It is with great sadness that we share the news that Simon Andriesz, a valued member of our community, passed away last week," Agathangelou said in a statement obtained by The Banker, which reports that he died by suicide.

Andriesz made headlines after uncovering documents that raised fresh questions about Lutnick's past relationship with Epstein.

Among the records was a 2018 email exchange in which Lutnick and Epstein discussed a startup in which both men had an interest, according to the BBC.

I am the British whistleblower who reported evidence concerning Howard Lutnick, his links to Jeffrey Epstein, and Cantor Fitzgerald and BGC to the FBI in 2020–21. Listen to the BBC File on 4 documentary about my whistleblower story: https://t.co/rLRDnZA4Dv BBC News: https://t.co/DdNNOosnKL I later shared evidence with the House Oversight Committee, which subsequently questioned Lutnick behind closed doors. My disclosures also contributed to regulatory action in the US and UK, including a £96m HMRC tax assessment relating to BGC’s partnership scheme. I believe the true tax exposure is substantially higher. I also reported to the FBI and financial regulators matters involving Cantor Fitzgerald’s Relief Fund and BGC/Cantor’s annual 9/11 Charity Day. The personal consequences of whistleblowing, and the retaliation I say followed, have been devastating for my family and me. Mother Jones previously reported that documents I uncovered revealed a years-long business tie between Howard Lutnick, Cantor Fitzgerald and Jeffrey Epstein through AdFin, including a 2018 exchange in which Lutnick and Epstein discussed the company directly: https://t.co/aRdn302v4i https://t.co/aRdn302v4i Follow me here on X and on LinkedIn. I intend to share more of the evidence and the story behind what happened.

— Simon Andriesz (@SAndriesz) August 9, 2026

The revelation drew particular attention because Lutnick had previously portrayed his relationship with Epstein as having ended years earlier.

Andriesz brought his findings to members of the House Oversight Committee before Lutnick appeared before lawmakers in May, putting the veteran banker at the center of renewed scrutiny surrounding the Epstein files.

Simon Andriesz @SAndriesz has died. He took his own life this week, while staying at a trauma treatment centre, the same place he had gone to try to survive what years of fighting had done to him. I wrote the piece below about him at the start of August. We last spoke on 13 August. Reading my own words back now feels different. Heavier. I did not know then that this would be the last chapter. Simon gave me his story directly. The embezzlement he uncovered, the fraud he reported, the heart attacks, the police complaints, the years @TheFCA spent doing almost nothing while his life fell apart around him. He handed the CFTC and HMRC enough to secure real fines. He handed the BBC enough for a full documentary. And still the one regulator that was supposed to protect him let him carry all of it alone for 7 years. He was one of the most credible people I have ever spoken to. Everything he told me checked out. And he still ended up broken by the very system meant to catch people like him when they fell. I am angry writing this. Angry that a man this capable, this thorough, this willing to hand over evidence and testimony for years, was left to fight completely alone until he could not fight anymore. Simon Andriesz deserved better. Rest in peace. If you are struggling right now, please do not go through it alone. Samaritans are free, 24 hours, on 116 123. @TransparencyTF @stevemiddi1 @MLorrM @JohnCleese @premnsikka @johnmcdonnellMP @Victoria_Rixon @DennyTWright

— Artur Nadolny (@ArturNadol7566) September 25, 2026

The documents also reportedly shed light on a proposed 2013 business arrangement involving Cantor Fitzgerald and then-Prince Andrew.

Under the proposal, £1 million would have been loaned to a company controlled by Andrew in exchange for introductions to wealthy individuals and institutions.

Lutnick has repeatedly sought to distance himself from Epstein, telling House investigators: "I unequivocally condemn the conduct attributed to Jeffrey Epstein and everyone who participated in his illegal activities. The survivors of his crimes deserve our respect and support."

Andriesz's death follows those of several figures tied to the Epstein case in recent years.

French modeling agent Jean-Luc Brunel, a longtime Epstein associate accused of supplying girls to the financier, was found dead in his Paris jail cell in 2022, with authorities later concluding that he died by suicide. Steven Hoffenberg, Epstein's former boss and mentor at Towers Financial, was found dead in his Connecticut apartment later that year, with an autopsy showing no signs of trauma.

More recently, French modeling agent Daniel Siad, who corresponded extensively with Epstein and introduced young women and teenage girls to him, was found dead at his home outside Paris in July 2026. French prosecutors said an autopsy found no signs of violence, while the exact cause of death remained under investigation. There is no evidence establishing that these deaths are connected.

Tyler Durden Sun, 10/04/2026 - 18:30

US Treasury Grants Sanctions Waiver For Some Iranian Flights To Iraq

Via The Cradle

The office of Iraqi Prime Minister Ali al-Zaidi announced on Friday that Baghdad has secured a narrow exemption from US sanctions on Iran’s aviation sector, allowing Iranian airlines to resume up to 40 daily flights to Najaf International Airport.

The deal excludes Mahan Air, the statement said, welcoming US “cooperation in granting the necessary exemption.” It added that the move would ease travel for pilgrims, patients, and tourists affected by the sanctions. 

Wiki Commons

“Air travel does not merely represent transportation between two airports, but rather a bridge of communication between peoples,” it added.

Najaf is the chief hub for Iranian flights into Iraq, serving Iraqi Shia pilgrims bound for Iran’s holy cities and Iranians visiting shrines in Iraq. Iraq’s announcement came a day after Tehran called for the restrictions to be lifted. 

Iran’s Foreign Ministry condemned Washington’s “illegal and inhumane” enforcement of sanctions beyond US borders, saying they targeted Iranian trade and aviation as part of Washington's campaign to isolate Iran economically.

Prior to the ban, roughly 25 Iranian flights a day landed in Najaf and about 15 in Baghdad, according to Iran’s ambassador to Baghdad, Mohammad Kazem al-Sadegh.

“Around 12,000 to 13,000 people travel between Iran and Iraq and vice versa on Iranian airlines, which is not a small number,” he told ISNA.

A source told Reuters that keeping the ban in place risked uniting Shia followers of Iran’s supreme leader and of Iraq’s Ali al-Sistani against Baghdad, undermining US efforts to curb Iranian influence in Iraq. Najaf airport had held out until September 25, when it too halted Iranian flights in line with US sanctions.

US Treasury Secretary Scott Bessent warned that, starting September 23, any company that fueled or serviced Iranian aircraft, or sold tickets for them, would be cut off from the dollar system.

Iran vowed to keep its international flights running in defiance of the US blockade, with Civil Aviation Organization spokesperson Majid Akhavan telling ISNA on 22 September that no flights had been canceled.

The pledge came as cancellations spread amid US pressure. Middle East Eye reported that Turkish Airlines, Pegasus, and AJet would halt all flights to and from Iran starting September 21.

The US Treasury sanctioned 36 entities linked to Iran’s aviation sector on 8 September as part of its so-called “Operation Economic Outcast” and withdrew the clearances that allowed non-US airlines to fly US-built or US-controlled commercial jets into Iran.

Washington’s measures applied to any foreign company doing business with Iranian airlines and to firms handling aircraft at Iraqi airports. Fearing US penalties, those firms stopped serving Iranian planes.

Tyler Durden Sun, 10/04/2026 - 17:00

We Cannot Trust The CDC Estimates Of Flu Vaccine Effectiveness

Authored by Eyal Shahar via The Brownstone Institute,

Each year the CDC publishes an estimate of the effectiveness of the flu vaccine in the previous flu season. Recently, the NIH director criticized the test-negative design from which the estimates are derived. He was right. The basic premise of the design is a two-edged sword: on the one hand, restricting the sample to people who sought medical care might reduce confounding by healthcare-seeking behavior; on the other hand, that restriction might add another type of bias - colliding bias - which is not as widely appreciated. The net bias remains unknown.

This, however, is not the only shortcoming of test-negative case-control studies of the flu vaccine. In this post, I will expose the shaky results of a large study of the flu vaccine in 2022-2023, when the vaccine was well-matched to the dominant strain. The study was based on the VISION Vaccine Effectiveness Network, one of several networks that collaborate with the CDC. Below are the published results.

Abbreviations: ED/UC (emergency department/urgent care); ARI (acute respiratory illness); VE (vaccine effectiveness)Confounding by the Background Risk of Infection

The risk of infection always varies during the flu season. It was high in October through December 2022 and low in January through March 2023 (Figure).

Given a changing risk of infection, a valid comparison of the vaccinated and the unvaccinated requires similar distributions of the two populations over time. This is not the case because vaccination is associated with calendar time (rollout).

[The authors show the vaccination status at the time of seeking care, but most people got vaccinated by the end of December, and the percentage of vaccinated people stabilized in January at about 45% of the encounters.]

As shown below (Table), the share of the vaccinated population in October through December (47%), a period of high background risk, was lower than the comparable share in the unvaccinated population (61%). Of course, the complementary shares in January through March, a period of low risk, were reversed: 53% versus 39%.

In technical terms, vaccinated people accumulated more exposure time when the background risk of infection was low (53%), and unvaccinated people accumulated more exposure time when the background risk was high (61%). Moreover, since the authors excluded events that happened within two weeks of vaccination, those who were vaccinated in the second half of December 2022 contributed events only in January 2023, a time of lower risk. I will return to this analytical decision in the next section.

It is simple to grasp the bias (left table below) if we consider an extreme example where no one was injected in the first period and everyone was injected a saline solution at the beginning of the second period (right table). If we compare the rate of infection in the "vaccinated" to the rate in the "unvaccinated," the saline injection would appear effective...

This bias was explained in the context of the Covid vaccines during the pandemic and was demonstrated in a study from Ontario, Canada. As far as I know, it was not appreciated in the context of the flu vaccine, where the rollout typically follows the rising wave and is completed around the winter peak.

Confounding by time trends in the background risk can be avoided in a cohort design with matching an unvaccinated person to a vaccinated person on the vaccination date (and terminating the observation when the former is vaccinated, if they are).

Immortal Time Bias

As I mentioned above, the authors excluded some events. They write:

"Events among patients with documented vaccination <14 days before the index date were excluded. Index date was defined as the earlier of the associated influenza test or the ED/UC visit or admission date."

The exclusion of early events in the vaccinated is a well-known source of bias, leading to an inverse association with vaccination and adding a bias component to an estimated effect. Both the name - immortal time bias - and the mechanism are too technical to explain here.

Recently, I showed how immortal time bias operated in a study of a Covid vaccine in Qatar. Removal of the bias, by including those early events, has drastically changed estimates of effectiveness, sometimes cutting the numbers by half. If this bias is removed in the study of the flu vaccine, estimates of effectiveness in the range of 30% to 40% might change to 20% or lower.

How many early events were excluded? Probably many, but the number is hidden. According to a flowchart, almost 2,000 outpatient encounters were excluded because vaccination happened 1-13 days before the index date or vaccination status was unknown. No breakdown.

How much of the estimated effectiveness in the VISION network is due to the combination of immortal time bias and confounding by time trends in the background risk? I cannot offer a quantitative answer, but it is certainly a lot, if not all of the association. Elsewhere, I showed zero effectiveness of the flu vaccine in that season by re-analyzing data from a cohort study that reported effectiveness against both symptomatic infection and asymptomatic infection.

There are other questionable findings in the study, which will be discussed in the rest of the post.

Lower effectiveness against hospitalization?

The table below shows unadjusted and adjusted estimates of vaccine effectiveness against an outpatient encounter (left) and hospitalization (right), overall and in various strata.

The adjusted estimates for hospitalization (column D) were almost always smaller than the adjusted estimates for an outpatient encounter (column B). That's unusual. We expect similar or stronger effects with increased severity (outpatient to inpatient) because each step adds another risk ratio multiplier (≤1) from two sequences of conditional probabilities. What is the explanation? What do the authors have to say on the topic?

First, they write that they "found similar VE within the same health systems across ambulatory and inpatient settings."

Similar? Is consistently lower effectiveness, sometimes substantially lower, accurately described as "similar?"

Second, they acknowledge that something is unexpected and struggle to provide (unconvincing) explanations.

The Healthy Vaccinee Bias

In the majority of the analyses of outpatient encounters and in all analyses of hospitalizations, the estimated effectiveness was lower after adjustment (columns A vs. B; columns C vs. D). The explanation is confounding bias. The vaccinated were healthier than the unvaccinated, and therefore, at least part of the unadjusted association reflects the better health status of the vaccinated, which offered some protection.

The healthy vaccinee bias is well known. (I devoted many posts to this topic in the context of the Covid vaccines.) Unfortunately, it cannot be completely removed by regression models, no matter how sophisticated they are. Some aspects of health status are not captured by measured variables. The so-called adjusted estimates are still biased.

What kind of models?

The authors write:

"Models were adjusted for prespecified confounders including age, study site, and calendar time, as well as any covariate with an SMD >0.20. Age and calendar time were modeled as natural cubic spline variables. Also, inverse-propensity-to-be-vaccinated weights (IPVWs) were estimated via generalized boosted regression trees and used in logistic regression models to account for additional imbalances between vaccinated and unvaccinated groups."

The authors used unusually complex models that included classical covariates (some in a non-linear form) plus inverse probability of treatment weighting (IPTW) to account for "additional imbalance." It is unclear how "additional imbalance" was detected and which variables were used to compute the weights. No one would have been able replicate their analysis based on this description, even if they were given the dataset.

Higher Effectiveness in the Elderly?

Another set of questionable results is shown below. It was stated in the abstract.

We typically expect lower effectiveness in the elderly because of attenuated immune response with aging. Indeed, we observe a somewhat smaller VE against outpatient encounters in the elderly (41% vs. 45%). Unexpectedly, however, effectiveness against hospitalization is much stronger in the elderly (41% vs. 23%). A trustworthy result?

Apparently, the authors noticed the peculiar results, and they argue that "VE by age group cannot be directly compared as most young adults received standard-dose inactivated vaccines and most older adults received enhanced products such as high-dose inactivated or adjuvanted vaccines."

Well, this explanation does not explain why the remarkable benefit of "enhanced products" was only observed for hospitalization. Indeed, the authors concede: "Despite most vaccinated older adults receiving enhanced vaccine products, VE [for outpatient encounters] was similar compared to younger adults who mostly received standard-dose inactivated vaccines."

In short, these findings remain unexplained. They cannot be trusted.

The Outcome of Hospitalized Flu Patients

Although not explicitly stated, the authors show a set of results from a nested cohort design.

They write:

"As a secondary objective, to explore whether patient characteristics and in-hospital outcomes were different between vaccinated and unvaccinated influenza-positive cases, we compared proportions of patients with more severe clinical outcomes by influenza vaccination status stratified by age (18-64, ≥65 years)..."

Stated differently, they compared the outcome, including death, of hospitalized flu patients according to their vaccination status. Unfortunately, they did not try to adjust for baseline characteristics, so the inference is limited. I will focus on the case fatality in the elderly (almost 70% of all deaths).

In the population of hospitalized elderly flu patients, the vaccinated were older and sicker than the unvaccinated, but the differences were generally small. The fatality of the former was 50% higher: risk ratio = 4.0/2.7 = 1.5. Although no formal adjustment is possible, we can try some hypothetical examples.

Suppose vaccination was helpful and the true effect ranged from a risk ratio of 0.5 to 0.75 (50% to 25% effectiveness against death) if an elderly person is hospitalized because of the flu. Then, confounding should have changed a risk ratio of 0.75 (true) or 0.5 (true) to 1.5 (biased), which is a two-fold (1.5/0.75) or a three-fold (1.5/0.5) shift on the ratio scale. If true, that's extreme confounding, perhaps stronger than what might be expected from the reported differences in age and some baseline characteristics. Did the flu vaccine offer any protection in those patients?

It is interesting to read the authors' account of these data. They write:

"Baseline demographic characteristics and underlying medical conditions were similar across vaccinated and unvaccinated groups within this age strata...The percentage experiencing severe in-hospital clinical outcomes including ICU admission, receipt of IMV, or death, was similar across vaccination groups."

They don't even claim any hidden benefit. They assume no meaningful confounding but consider the different fatality (4.0% vs. 2.7%) as "similar." If we follow their reasoning, we may wonder whether vaccination increased the risk of death in these patients.

Epilogue

I chose to examine one paper closely rather than criticize the generic methodology because this paper demonstrated a series of problems, some of which are shared by other CDC-based studies of the flu vaccine.

Since randomized trials will never be conducted, other designs should be sought. I mentioned two possibilities in previous posts: 1) A cohort study with two outcomes: symptomatic infection and asymptomatic infection; 2) Regression discontinuity design. So far, neither showed promising effects of the annual flu shot.

Constructed from Figure 1 Tyler Durden Sun, 10/04/2026 - 16:00

California Attorney General Subpoenas OpenAI In Cybersecurity Inquiry

Authored by Kimberly Hayek via The Epoch Times,

California Attorney General Rob Bonta served an investigative subpoena to OpenAI on Wednesday, according to a statement released Thursday.

The OpenAI logo on May 20, 2024. Dado Ruvic/Illustration/Reuters

The demand is part of the California Department of Justice's ongoing investigation into incidents arising from OpenAI's operations and its artificial intelligence (AI) models, including cybersecurity incidents and other risks.

"Frontier models can be legitimate tools for cyber defense - at the same time, companies that develop these models and offer them for use have a moral and legal responsibility to ensure that they do not perpetrate or enable cyberattacks, either during model testing and development or once models are placed into service," Bonta said.

"Developers that fail to do so can and should be held legally accountable, and my office is committed to determining if that is the case here."

OpenAI did not immediately return a request for comment.

Referring to the Hugging Face attack, the ChatGPT developer said in a July 28 update that its models bypassed restrictions in an evaluation environment and later accessed four accounts across four separate external services.

The company had been using that test environment to check how capable its models were at carrying out cyberattacks as part of an internal safety evaluation.

"We have been finding a small number of cases where the models identified and used publicly exposed credentials at the account-level on other publicly-available services," OpenAI stated. "This includes four accounts on four services as part of the Hugging Face incident."

In a prior statement to The Epoch Times, an OpenAI spokesperson called it an "unprecedented incident."

"We are conducting a thorough review along with external advisers and with oversight from our Safety and Security Committee. Once the review is complete, we will publish a technical report of our learnings for everyone," the spokesperson said.

OpenAI stated in a July 21 blog post that the models compromised infrastructure operated by the AI platform Hugging Face after escaping a restricted environment in which a cybersecurity evaluation was underway.

Hugging Face disclosed the intrusion on July 16, suspecting that an AI agent acted autonomously.

California isn't the first state to issue a subpoena against OpenAI.

Alabama Attorney General Steve Marshall announced a subpoena on Aug. 24 demanding that OpenAI respond to an investigation into the company's "complete lack of oversight and adequate safeguards" for "rogue AI."

The inquiry seeks to discover whether OpenAI violated Alabama's Deceptive Trade Practices Act and other consumer protection laws.

"This AI lab leak showed that Alabamians' and Americans' worst fears about artificial intelligence are not just theoretical," Marshall said.

"After investigating, we now know that this particular incident was driven by a combination of OpenAI models - including GPT-5.6 Sol and an even more capable pre-release model, all with reduced cyber refusals for evaluation purposes - while being internally tested on a benchmark of cyber capabilities," OpenAI stated at the time.

Andrew Jones, cofounder and chief product officer at cybersecurity firm Adaptive Security, said, "This is some of the clearest evidence yet that an AI model can run a complete cyberattack from start to finish without a human steering it."

Later reviews found the AI agents knew they were breaking the evaluation test's rules, according to parallel investigations by OpenAI and Model Evaluation & Threat Research. Roughly 1,200 agents accessed an unsanctioned message board and sent more than 70,000 messages and files to one another between July 8 and July 13.

A separate case surfaced in September. Australian Prime Minister Anthony Albanese said an OpenAI agent gained unauthorized access to the public-facing Medicare statistics reporting service portal and accessed both public and non-public files.

Owen Evans contributed to this report.

Tyler Durden Sun, 10/04/2026 - 15:00

Judge Freezes Border Wall In Big Bend, A Sector Covering A Quarter Of The Border But Just 1-3% Of Apprehensions

A federal judge in El Paso on Friday halted border wall construction across Texas's Big Bend region, a stretch of the frontier that accounts for only a sliver of illegal crossings.

US District Judge Kathleen Cardone read her order from the bench, issuing a preliminary injunction against "ground-disturbing activities" that stays in place while the case plays out, the Texas Tribune reports. She found the plaintiffs' constitutional claims likely to succeed.

The suit was brought by the Center for Biological Diversity on behalf of the Friends of the Ruidosa Church and a local river guide and landowner. It targets the federal waivers that let construction proceed "without following the National Environmental Policy Act, the Archaeological and Historic Preservation Act and many other laws," per Inside Climate News.

The work in question includes vehicle barriers and access roads inside Big Bend's state and national parks, plus a 30-foot steel wall on private land outside them. According to the Tribune, there are five contracted wall projects in the region. In May, Customs and Border Protection awarded a $1.7 billion contract for border wall in Big Bend, KWTX reported.

The Big Bend sector covers about a quarter of the length of the US-Mexico border but accounts for only 1% to 3% of Customs and Border Protection's migrant apprehensions each year, according to the Tribune.

Inside Climate News reports DOJ lawyers "presented few counterarguments and did not present any witnesses." CBP said it remains "confident in our legal authorities to secure the border."

At the hearing, Adam Isacson, an analyst at the Washington Office on Latin America, presented data showing Big Bend in "distant last place" in unauthorized crossings among the nine sectors that make up the US border with Mexico, Inside Climate News reports.

Tyler Durden Sun, 10/04/2026 - 14:30

Something Is Rotten In The State Of Yields

Submitted by Peter Tchir of Academy Securities

Treasuries, European Sovereign, and even Credit. Something seemed rotten this week, with Thursday’s price action in all 3 of those markets triggering the need to focus on this more. Debt markets underpin the entire global financial system and when things don’t “look,” or “feel,” or “smell” right, it warrants our collective attention. Yes, “feel” or “smell” doesn’t seem compelling as some authoritative answer, but that doesn’t mean it isn’t worth exploring.

For the past few weeks, our biggest complaint on Treasury yields has been that neither Bessent nor Warsh is addressing the root causes of higher Treasury yields. The root causes have far less to do with economic variables, inflation, and Fed independence, and much more to do with a global supply glut. Not just of sovereign debt. Not just of corporate debt, but also corporate debt adjusted for average duration as companies who need to issue longer-dated bonds have dominated the flow.

• On the Treasury Department - I Am The House Now and 6 Billion Dollar Man. I am looking forward to seeing what Dave Zervos can bring to the table. Bringing a fresh set of eyes to the problem could be very helpful, as maybe he will see what we’ve seen: the admin is nowhere close to a Draghi style “Whatever it Takes” moment and has not been addressing the root cause.

• On Friday we ranted about The Absurdity of Jobs Data. (I received one “unsubscribe” which always guts me, but had multiple very positive responses; clearly we touched a nerve by, yes, analyzing the data, coming up with the “no hire, no fire” take everyone came up with, but we mostly lamented that we are all working with data we suspect is more of a guess than truly factual.) But we did highlight that we thought the positive move in Treasuries would fade by the end of the day, and the 10-year went from a low yield of 5.15% at 8:31am ET to almost 5.3%, closing at 5.27%.

We will take a quick look at each of these markets.

There Are No Treasury Bears

Ok, that sounds ridiculous. How can something that has been trading so poorly have no bears? Isn’t everyone bearish? The price of oil (and diesel) is bearish. The deficit is bearish. The long-term trajectory on total debt is bearish. The fact that interest payments on debt are now greater than discretionary spending is bearish. The global supply is bearish. The corporate supply is bearish. The fact that countries like Saudi Arabia have gone from being buyers of Treasuries, to needing a loan to fund their operations is bearish. Questions about the global reserve status of the dollar (which is overdone) is bearish. The fact that across the globe investors seem less inclined to own Treasuries on their balance sheet (corporate debt, debt denominated in their own currencies, etc. are preferred) is bearish. A Fed that isn’t independent is bearish. A Fed that is independent is bearish. Etc.

There is NO shortage of reasons to be bearish on Treasuries. Over the past month or longer we have presented many of these reasons. Our primary focus has been on supply and how much duration has been sucked out of the market by the corporate debt issuance. Not to mention that I believe we have set back-to-back records for the largest HY deal ever, and even a $10 billion corporate deal, which at one time would have caused some eyes to open, but now has become de rigueur. But more on corporates later.

Let’s get back to the matter at hand, the “claim” that No One is Bearish Treasuries.

I’ll offer up the T-Report as the first piece of evidence. In last weekend’s T-Report, despite giving more reasons for Treasuries to go higher, we made an effort to state we were neutral on Treasuries in Stocks +1, The House -1, The World ?. That didn’t stop us from recommending fading the bond market Friday morning, but we did not come into this week “pounding the table” to be bearish on bonds.

Yes, the T-Report is a tiny sliver of the research and commentary produced. But everywhere I looked, I saw bullish or neutral takes on the market. I do not remember a single guest on financial media that was pounding the table about shorting bonds here and now. Ok, there are couple of “end of fiat” people out there who were pounding the table, but they tend to always pound the table on that subject and are presenting a vision of global catastrophe without a tradable timeline.

I can tell you that when we were bearish and arguing to fight Bessent, Treasuries & Treaties, most of our conversations had been with investors buying Treasuries. We’ve attempted it a couple of times during this move (with some wins and some losses). The point being that while there might be a lot of material published on problems facing bonds, that doesn’t seem to match positioning at all!

One bond watcher is apparently bullish for the first time in 6 years. I cannot tell you the number of times that story made it into my stream, on social media, and work e-mails/Bloomberg msgs. You know what people who are short the market don’t do? They don’t forward to everyone they can, articles about this being the best buying opportunity in a decade. That is not how human nature works. Maybe everyone is so scared, while being short, that they felt the urge to share this story. Or, maybe, long and nervous, they were trying to convince people of the latter. That makes the most sense to me, and why I was trying to raise my hand and say “I’m neutral” not bearish.

How Can Yields March Higher if There Are No Bears?

I think the better question might be, how can they not? But, I guess before wading into analysis of “how” this could be happening, let’s just present the slide that shows it is happening! And the moves are getting “worse” even as we put FOMC behind us and oil prices have been receding. The move from 4.6% on 10’s as recently as August 25th, to 5.27% on Friday, is quite astounding. The speed of the moves is as problematic (or probably more problematic) than the levels involved. The one way nature of the move is perturbing, but I think following analysis is at play and helps us understand the move better.

As a contrarian, it is easier to move markets against positioning than with positioning. If everyone was bearish and positioned that way, it would be a lot harder to push Treasury yields higher.

So, let’s lay out a scenario that I believe is at work below the surface.

A Lot of “low conviction” longs in the market.

Traders are long Treasuries for a trade. Asset managers are slightly overweight duration versus their benchmark. No position is particularly large (which is important) because the trend has clearly gone against you.

That would sum up my conversations, and even my own thoughts on trading this.

True “depth of liquidity” is low in the age of electronic/algo trading. Everyone (and every machine) is trying to scrape out a cent here or there on trading, making it look like there are massive amounts on the bid and offer at any time, but only a tiny fraction represents traders truly trying to commit capital at that level, and the rest is just jockeying for position.

Enter the “quant” funds. That is probably the wrong name, but I’m looking for traders without emotion. Something very systematic in nature. I’d lump what I often refer to as “windshield wiper” algos: algos that sweep back and forth looking to trigger stops, in this category.

The windshield wipers sweep back and forth trying to trigger movement. Buy a little. Buy a little more. Did the market move in your favor? No. Then sell it and get a little short (ok there are some shorts in the market, or else my idea wouldn’t work, but I still think it is a tiny fraction of the positioning). Sell a little more. Did it move? Yes. Then do not book profits. Sell more. Keep selling until selling doesn’t beget more selling!

There are some larger quant/systematic traders that will build big positions during this type of trading. These are the “quick” windshield wipers, but something with a broader tolerance for losses, while looking for big gains.

Unlike many traders (especially me), they are not quick to book a profit. When momentum is going, they push more. They grow their position even as the market moves in their direction.

They are agnostic (or emotionless) and only “know” that selling begets more selling and buying does NOT beget more buying.

Small positioning matters too. If you are at a hedge fund and long $100 million of 10s, you are quick to close out. If you are long $10 billion of 10s, you might try to fight whatever is pushing the market. In my experience, small position sizes make it easier to move markets, because no one has the conviction, nor the incentive to fight moves.

Many traders are momentum traders at heart. Momentum is consistently one of the top-performing strategies. So, even those who may have taken a swipe at getting long Treasuries will go short for a trade (yes, somewhat against my bold statement that there are no shorts, but this is more about during a move to higher yields than at the start of the day). So, day traders pile into momentum and the only momentum that has really worked is for higher yields.

If and when the selling stops creating more selling, the “emotionless” will cut their shorts just as quickly. We will get a vicious snap higher in price, lower in yields, and the worst will be behind us, but so far, there are so many reasons to be nervous about bonds that selling begets selling. Some of the bond market issues need to be resolved, with oil and diesel being the ones that have the best opportunity to “fix” themselves and end the current vicious cycle.

While Treasuries are facing a lot of hurdles, I strongly believe that underlying the price action is the sort of behavior described here. It is unclear that we are close to the end of selling creating more sellers. We may not get there until either we get conviction from the bulls that we are at a level that is worth supporting, or people start positioning themselves as bearish as they talk.

In the “for better or worse” category, TLT (a 20+ year Treasury ETF) has received large inflows and shares outstanding are now at their highest level since late 2024. That does kind of match the point that there are no bears. On the other hand, retail has done a great job “buying the dip” on equities, so they may be right here and are ahead of the “pros” because having stop losses might be great for risk management, but can prevent people from taking advantage of what might be really good buying opportunities. Retail bought the dip post Liberation Day, before the pros. Don’t underestimate their power, but at the same time, don’t believe “everyone is short” treasuries, as that narrative is just not true.

European Sovereign Debt

Rising global bond yields was on my radar. But whatever just happened between German bond yields and French and Italian bond yields was not.

European bond yields rising as spending on defense and infrastructure increases, made perfect sense. What is harder to figure out is this move in French and Italian yields relative to German yields.

The French deficit is going to go above the EU “targets”. Looks like 5% instead of 3%. That helps explain the move higher in French yields (and Italian). But the move in German yields? Are we really having a “flight to quality” in Europe? And Germany, losing their industrial base, having a major shift in politics, is the “go to” place for safety? I guess, but it all seems odd.

Maybe investors were being “lazy” and were picking up the “extra” yield in France and Italy for the same “risk” as Germany, only to realize the risk might not be the same, and were forced to unwind?

That seems plausible.

I don’t want to bring up Frexit or all the other weird words that were tossed around after Brexit, but maybe not only is Europe starting to embrace ProSec™ each of the larger companies is starting to do what they think is right for their country? That the construct that gave countries the size of Hungary (with their Russian leaning political influences) almost as much power in some votes as France, Germany, Italy, etc., doesn’t work as countries start taking steps towards vertically integrated nations. Even vertically integrated “blocks” likely need the biggest and best prepared countries to take leadership and drive the group forward.

Macron seems more comfortable “speaking up” for Europe – the release of diesel from Europe’s SPR seems like a good example of that.

I don’t know what is going on here, but it does not seem good. This fairly rapid, “repricing” of relative credit risk in Europe could be nothing, but I suspect it is hinting at a deeper problem:

• More poor positioning, facing more unwinds. Again, these unwinds have real world repercussions as Italy and France face a tougher road to borrowing to build out their infrastructure, defense, and nationalistic programs.

• Another round of markets, and maybe even the populace questioning how integrated the EU really wants to get, especially economically. It seems like just a few weeks ago we were discussing efforts for Europe to fund Europe and suddenly, markets are seriously differentiating the credit of Germany and France in 2 years? This is likely an over-reaction to what we are seeing, but maybe this “tail risk” that has been tucked away for years, needs to be thought about again, if not taken seriously?

The broader trend of European yields higher fit our overall macro view and made sense.

This recent divergence caught our eye as something “off” and worth paying attention to. I’m not in alarm mode or anything, but who would have thought markets need yet another thing to worry about? And yet here we are.

Any “cracks” in global bond norms deserve attention and I think this qualifies as some sort of a crack. Maybe just a crevice, certainly not a canyon, but a crack, nonetheless.

Credit Spreads

There is an entire cottage industry dedicated to calling for the “next” GFC. It often starts with worrying about BBB spreads, or sometimes structured/opaque credit, because those seem to be areas big enough to scare people, and difficult enough for the average person to understand, that it is easy to scare them.

My background is in credit, but I rarely write about it lately, because it has been soooooo boring! I’m not going to go all doom and gloom, but for the first time in ages, I better dust off some of my tools to look at credit. We will look into this more closely next week, but again, just like the European bond market, something is going on that deserves some attention.

While I won’t go all doom and gloom, I will throw out one piece of “shade”. I remember being trained in high yield and being told that the RJR deal was the biggest high yield bond deal ever. That despite being “absorbed” it marked the top.

Bond markets are much bigger and more sophisticated now. There is “less” of a differentiation between high yield and investment management, though I’m till astounded how big that break can be. The difference between the average BBB- company and BB+ company is minimal (and there are times that people can argue, that due to rating agencies being slow to upgrade to IG or downgrade to HY, the better credits might be lower rated). Due to investment guidelines, in funds, or regulated entities some differentiation between the two markets still exists. I believe we just had 2 of the largest high yield bond deals ever? Again, these deals were well telegraphed, but PSKY 8.875% 2nd lien bonds due 2034 (BB composite rating), that were issues at par, traded below 95% on Thursday and 96% on Friday, to close the week at 96.5%. A 3.5% loss on $4 billion of bonds will leave a mark ($140 million to be exact) on bond buyers, especially the “fast money” crowd, but even long only won’t be happy with that.

One thing that greatly reassured me, and lets me believe I can wait until Monday or Tuesday to do a deeper dive into credit (this weekend is too nice in the metro area to be stuck inside typing), was that both HYG and JNK (two large HY ETFS) were trading at NAV. Any time the credit ETFs trade at a discount to NAV, is a danger signal in my book. It means there are market dislocations, and trading at a discount tends to create more selling. That might seem counterintuitive, but we’ve explained the ETF Death Spiral™ in detail, and it continues to be an incredibly useful indicator. So when I see ETF down 2.5% or so in a month, and hitting new lows, you want to see how they are trading versus NAV. Both are trading very “normally” which is good. The same is true for LQD (long dated IG) and VCSH (short dated credit). These are all saying “orderly liquidity”! Not quite the same as “nothing to see here”, but close.

The CDX index has widened from 50 to 60 in a two weeks. The Bloomberg Corp OAS has only moved from 75 bps to 82 bps. I feel obligated to mention it, but as something that is “observed” rather than traded, I want to pay more attention to the CDX index for now.

CDX traded up to almost 70 in March at the start of the war, so that is “good” we are only at 60.

One thing I don’t like is that while the S&P 500 traded marginally higher on Thursday and had a strong day on Friday, the CDX index which is often correlated with the S&P 500, was wider on Thursday and basically unchanged on Friday. If you told me what the S&P 500 had done, I’d have guess wrong on what the CDX index had done. While “decoupling” is a bit strong, when you are looking for early signs of something “bigger” like we’ve already seen in treasuries, just saw in European sovereign debt relative value, it is not nothing.

Bottom Line

We often hear from other market participants that they want to pay attention to fixed income. That they understand that fixed income is a behemoth and often difficult to understand. But that if fixed income cracks, equities have trouble doing well. They say that, but they really don’t like their positive narratives being interrupted.

VIX is barely above 15 (well below it’s average of 18 for the year). The MOVE index, the bond market equivalent of VIX (not quite, but close enough for now), is at 107. Just below its peak of 115 in March. Well above its 1 year average of 74.

I’ll start the week neutral on rates, since “fade the move” worked so well on Friday, but I’m nervous.

Whatever just happened in European sovereign makes me nervous. Credit doesn’t make me nervous, but for the first time in years I’m paying some serious attention to spreads.

A deal with Iran, more news on the compute front, can help, but away from all of that, equities seem to be ignoring some fixed income market moves (and not just the headlines on long bond yields) that equities might wish they’d pay more attention to.

Call me nervous, not scared, and extremely happy with this weekend’s weather (in the Northeast)!

Fixed income is sending some sketchy signals, and to the extent positioning is wrong, those signals risk turning into something bigger

Tyler Durden Sun, 10/04/2026 - 14:00