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Battle Over Ten Commandments Arrives At Supreme Court

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Battle Over Ten Commandments Arrives At Supreme Court

Authored by Matthew Vadum via The Epoch Times,

The American Civil Liberties Union (ACLU) asked the U.S. Supreme Court on Aug. 17 to review a federal appeals court decision that upheld a Texas law requiring the display of the Ten Commandments in public school classrooms.

The U.S. Court of Appeals for the Fifth Circuit cleared the way in April for the Texas law to take effect.

The state law known as Senate Bill 10, or SB 10, requires that public elementary and secondary schools conspicuously display in classrooms an easily readable poster or framed copy of the Ten Commandments with no additional commentary.

The Fifth Circuit’s 9–8 ruling in Nathan v. Alamo Heights Independent School District raised questions about freedom of religion and how the Supreme Court had ruled on these issues in the past. If the justices agree to hear the case, their potentially landmark ruling could change the legal landscape for how governments deal with religion.

The Fifth Circuit said that the law complied with the U.S. Constitution’s First Amendment.

The Texas law “looks nothing like a historical religious establishment,” because it does not tell houses of worship what to believe, how to worship, or whom to employ, the appeals court said. It does not punish people who reject the Ten Commandments, impose taxes to support the clergy, or require churches to carry out civic functions, the court said.

“These are the kinds of things ‘establishments of religion’ did at the founding. [The Texas law] does none of them,” it said.

The Fifth Circuit also held that a 1980 precedent, Stone v. Graham, which struck down a nearly identical classroom display law, is no longer binding.

The circuit court ruling upholding the Texas statute came after a federal district court preliminarily blocked it, finding the law likely violates both the Constitution’s establishment clause, which forbids the government from favoring one religion over another, and the free exercise clause, which prohibits the government from infringing on worship and other activities. The district judge also found the displays would coerce students and interfere with parents’ rights to direct their children’s religious upbringing.

The challenge in the district court was brought by a group of Christian, Jewish, Hindu, Baha'i, Unitarian Universalist, and nonreligious families. The families argue in the petition that the Texas law violates the Constitution by forcing religion on students, and that the Fifth Circuit misinterpreted Supreme Court precedent.

The Ten Commandments Monument displayed at the Texas State Capitol in Austin, Texas. Oct. 15, 2004. Jana Birchum/Getty Images

“The question of whether a state may impose scripture on impressionable, captive-audience children—for nearly every hour of every school day, for up to thirteen years—implicates the most fundamental guarantees of the First Amendment and our Nation’s highest ideals,” the ACLU said in the 314-page petition filed with the nation’s highest court on Aug. 17.

Chloe Kempf, a staff attorney at the ACLU of Texas, which is representing the families, said in a statement that the Supreme Court “has rejected this kind of government-imposed religion before, and it should do so again.”

“Having these posters in Texas classrooms puts students at risk of bullying, stigmatization, and religious coercion. Our nation’s bedrock principle of separating church and state means that families and faith communities — not politicians — get to decide what role religion plays in children’s lives,” Kempf said.

The Epoch Times reached out to the office of Texas Attorney General Ken Paxton for comment. No reply was received by publication time.

Texas Attorney General Ken Paxton speaks at an event in Magnolia, Texas, on Feb. 19, 2026. Madalina Kilroy/The Epoch Times

In April, Paxton praised the Fifth Circuit ruling, calling it “a major victory for Texas and our moral values.”

“My office was proud to defend SB 10 and successfully ensure that the Ten Commandments will be displayed in classrooms across Texas,” he said at the time. “The Ten Commandments have had a profound impact on our nation, and it’s important that students learn from them every single day.”

It is unclear when the justices will consider the petition.

Tyler Durden Tue, 08/18/2026 - 17:00

DSA Lawmaker Claims Shoplifting For "Biological Need" Shouldn't Be Illegal

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DSA Lawmaker Claims Shoplifting For "Biological Need" Shouldn't Be Illegal

A radical Democratic Socialist lawmaker from New York is under fire after declaring that theft driven by "biological need" shouldn't be treated as a crime, effectively green-lighting shoplifting while slamming big retailers.

Emily Gallagher, a New York State Assembly member and part of the Democratic Socialists of America's New York State Socialists in Office caucus, sparked outrage this week with comments defending petty theft at a press conference outside Manhattan Criminal Court.

"Most of what we saw were crimes of poverty - people who are stealing things like toothpaste, people who were stealing things like, you know, soap. And that means if you're stealing those things, you need them. And we are choosing to protect billion-dollar companies, like CVS and Walgreens, over the people who are struggling to get by," Gallagher said, according to the New York Post.

"So I would say that the true crime is that there is such incredible wealth disparity in this city that there are people who can be thrown in jail simply for having a biological need."

Gallagher went on to tout her soft-on-crime criminal justice "reforms" while blasting conservative media for opposing the anti-law-and-order policies that have already wreaked havoc on New York City and other Democrat-run cities across the country.

However, everyday New Yorkers aren't buying it.

The Post quizzed several shoppers at the Food Universal supermarket in the Bronx's Co-op City, who told the paper that Gallagher's comments were downright ridiculous.

"It's foolish to think one should not be punished for stealing. It is a crime," said one shopper. "Mamdani can implement that in his [city-run grocery] stores, so if you don't have the necessities, you can go there and get them for free,"

"People are going to feel entitled because they know they can walk in and walk out and nothing will happen," said another shopper. "Allowing people to shoplift with no consequence is wrong. I'm a single mom and at one time I had four jobs. I would never think of stealing anything.

Anyone still dismissing the DSA as a fringe outfit with no real pull inside the Democrat Party need only look at the growing roster of newly elected socialists popping up nationwide, some already eyeing Congress. DSA-backed candidates toppled 15-term Rep. Diana DeGette in Denver and Rep. Shri Thanedar in Michigan this summer, and captured two safe blue New York House seats outright. Socialists Claire Valdez, Darializa Avila Chevalier, Melat Kiros and Donavan McKinney are now on track to join Reps. Alexandria Ocasio-Cortez and Rashida Tlaib in Washington come January. Over the weekend, House Minority Leader Hakeem Jeffries even admitted the group is part of the party's "broad caucus."

Good luck with that.

Tyler Durden Tue, 08/18/2026 - 16:40

Why Is This Scumbag Still In America?

Zero Hedge -

Why Is This Scumbag Still In America?

Authored by Steve Watson via Modernity News,

A 26-year-old Ghanaian migrant stalked and attacked women across Oklahoma City over a two-week span in August, getting arrested three times for sexual battery before firefighters witnessed him trying to rape a fourth woman on a public trail and held him for police.

Jeff Kufi (Kofi) Asare was booked on a first-degree rape charge with a $75,000 bond. The Oklahoma County District Attorney's office is pushing to raise that bond because of the rapid series of alleged assaults.

Court records show at least 19 criminal felony and misdemeanor charges filed against him since August 2023, with more than 20 arrests stretching back to 2022 for larceny, trespass, obstruction, injuring an officer, and breaking and entering.

Why is this guy still in the country?

On August 1 near Northwest 23rd Street and Classen Boulevard, police responded to a possible rape. Asare allegedly pushed a woman against a bus stop window and put his hands down her pants.

The same day a second woman reported he came up behind her on Classen Boulevard, pulled her pants down, and fled when she pushed him away. He was arrested for sexual battery and indecent exposure.

Five days later near Scissortail Park, Asare allegedly walked up behind another woman, grabbed her buttocks multiple times, and began digging in his pants. When she told him to leave he walked away. Police later spotted and arrested him again for sexual battery.

On August 12 on the Lake Hefner Trail, Asare allegedly approached a woman from behind, pulled her down, and attempted to rape her. Local firefighters saw the attack, intervened, and called police. He was arrested on the first-degree rape charge.

Judges just kept releasing him.

Asare had previously been released through the TEEM pretrial program by Oklahoma County District Court Judge Cindy Truong after earlier cases. Court records indicate he received an official immigration warning in April after pleading no contest to breaking and entering.

Social media reports have described him as a migrant who is not a U.S. citizen, though ICE has not yet confirmed his immigration status.

Open borders and soft-on-crime judges create the conditions for so many cases like this. When officials treat deportation as optional and pretrial release as the default for serial offenders, the result is predictable. American women end up hunted on sidewalks, in parks, and on trails in the middle of the day.

Policies that enforce immigration law and keep dangerous scumbags locked up, or better still removed, are the only real answer. Judges who keep releasing repeat predators must face accountability. The public should not have to rely on firefighters to prevent rapes.

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

Tyler Durden Tue, 08/18/2026 - 16:20

Vaccine-Maker Claims Splitting MMR Shot Could Take Up To 10 Years

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Vaccine-Maker Claims Splitting MMR Shot Could Take Up To 10 Years

Authored by Zachary Stieber via The Epoch Times,

Splitting the measles, mumps, rubella (MMR) vaccine into separate shots could take up to a decade, according to one of the two companies that produce the vaccine for the U.S. market.

A tray of MMR vaccine vials at a clinic in Lubbock, Texas, on March 1, 2025. Jan Sonnenmair/Getty Images

"Even under current expedited review pathways, it could take years - potentially as many as 10 - to meet the safety and efficacy requirements to obtain FDA approval and then begin manufacturing and commercialization" of single-disease shots, Merck said in a statement.

Merck, which did not respond to a request for more details, had told Politifact in 2025 - after President Donald Trump floated splitting the MMR vaccine - that it could take more than 10 years to separate the components into three separate vaccines.

Trump said in an Aug. 10 order that he was issuing "gold standard childhood vaccine recommendations," which "recognize that the combined measles, mumps, rubella (MMR) vaccine should be administered in three separate single-disease shots once such products are domestically available." The order directed agencies to take steps to advance the recommendations.

Before signing the order, Trump said, "You have the MMR, we want it in three separate vaccinations given at separate times. Together there could be a possibility they are quite lethal and separately, it looks like they are not at all lethal but just very effective." The White House did not respond to a request for citations by the time of publication.

Dr. Robert Malone, a former member of the Centers for Disease Control and Prevention's vaccine advisory panel, said in an Aug. 10 post on X that splitting combination vaccines into separate shots could reduce adverse events without sacrificing protection.

The CDC's website says, "No published scientific evidence shows any benefit in separating the combination MMR vaccine into three individual shots." A January update to the childhood vaccine schedule retained recommendations for MMR vaccination, advising that children receive one dose around the age of 1 and a second dose from 4 to 6 years of age.

The MMR vaccine has been available since the 1970s. Merck and GlaxoSmithKline produce it for the United States.

Standalone vaccines were discontinued in the United States in 2008. Merck said in a 2009 letter to health care providers that it was moving forward with the MMR and not the monovalent vaccines because the combination shot "eliminates the need for 3 separate injections and reduces the chance of delays in helping protect against any of these potentially serious diseases." The standalone vaccines are still available in certain other countries.

Side effects of the MMR vaccine include febrile seizure and severe allergic reactions, according to regulatory labels.

A healthcare professional prepares a measles, mumps, and rubella (MMR) vaccine at the Andrews County Health Department in Andrews, Texas, on April 8, 2025. Annie Rice/AP Photo

GlaxoSmithKline told news outlets in a statement after Trump signed the order that its vaccines "are clinically proven to provide vital protection against infectious disease, and support public health goals by reducing missed doses, improving immunization coverage, and minimizing the burden on families and healthcare systems."

Dr. Andrew Racine, president of the American Academy of Pediatrics, said although it's possible to separate the MMR vaccine into its constituent components, each component would have to be manufactured and tested.

"They wouldn't be able to do that probably for another 10 years, and there's no indication that they have any interest in doing that," he said.

A White House official told reporters on a call about the order that the administration would work with the private sector to make the option of separate vaccines available to parents, relying on market-based solutions.

"Right now we have a lot of Americans and a lot of American parents who want to see additional options," the official said.

The Food and Drug Administration did not respond to a request for comment by the time of publication.

A person walks past a sign at a health center where the measles, mumps, and rubella (MMR) vaccine is administered in Lubbock, Texas, on Feb. 27, 2025. Ronald Schemidt/AFP via Getty Images

Establishing and obtaining regulatory approval for the manufacturing processes for the separate shots could be time-consuming and costly, Jesse Goodman, former chief scientist at the FDA, said.

"They'd be making three times as many vials or vaccines and filling three times as many," Goodman said. "It's not like they have facilities sitting around idle - so they might need to either change current facilities or even create additional capacity for them."

Reuters contributed to this report.

Tyler Durden Tue, 08/18/2026 - 15:45

Pentagon Weighing Permanent Smaller US Presence In Gulf (Just Don't Call It Retreat)

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Pentagon Weighing Permanent Smaller US Presence In Gulf (Just Don't Call It Retreat)

Already US officials have signaled they may just abandon hard-hit bases in the Middle East altogether, in the wake of Iran's retaliation as a result of Operation Epic Fury, and a conflict that's dragged on for nearly six months.

On Tuesday The Washington Post reviews the damage control underway, as the Pentagon 'evaluates' its future military footprint. All of this is framed as if Washington has a choice and full control over the matter, when it seems that all along the Trump administration was woefully underestimating what an Iranian response would look like.

"The Pentagon is evaluating its military footprint in the Middle East in an early sign of the Iran war’s potential to transform the U.S. presence in the region, according to eight people, including officials and others familiar with the matter," Washington Post writes.

Air Force file image

"One of the key areas the Defense Department is assessing is whether to pull back troops from the Persian Gulf, where America’s large overseas military bases have been battered by months of Iranian strikes, two people familiar with the ongoing analysis said," it adds, further calling this a "once-in-a-generation" chance for the Pentagon to alter its presence in the region.

The whole thing is being reported as if the 'smart people' are in the room and in control, and also as if the US hegemon in the region didn't already take a massive reputational hit following 'forever wars' and occupations in Iraq and Afghanistan. Over 20 years after the initial invasions, the Taliban remains in firm control of Kabul and Afghanistan, and Shiite pro-Iranian politicians run Baghdad.

And now a half-year into a war where the response should have been entirely anticipated (having been predicted by years and decades of Persian Gulf war-gaming and intelligence papers), this is where things stand:

“The war really did highlight the vulnerability ... of U.S. forces in the region,” said Michael Ratney, a former diplomat who served as the U.S. ambassador to Saudi Arabia and the deputy chief of mission in Qatar.

Moving troops and equipment further west to Jordan, Israel or the Red Sea coast of Saudi Arabia could help alleviate some of the pressure, he argued, while noting the added distance wasn’t a “perfect solution to this problem.”

Iran has already demonstrated it can strike faraway targets in Jordan and Israel. Last month an Iranian attack on Jordan killed four U.S. service members.

Anyone with eyes to see knows that this is already happening. For months at this point, dozens of US refueling aircraft have clogged up Tel Aviv's Ben Gurion airport, for just one example.

For smarter and more legitimate analysis, one can turn to Amerikanets, which one month ago was chronicling Tehran's successful campaign of 'debasification':

The broad picture of the Iranian air war in this phase has been a steady wave of concentrated missile and drone strikes sweeping its way across the region. In contrast to the previous hot phase of the war, in which Iran targeted bases across the entire theater simultaneously, this wave started with the targets close to Iranian shores, and has progressed steadily to the Israeli border. After destroying much of the radar network protecting regional US Axis bases in the previous hot phase of the war, Iranian planners have prioritized targeting fuel storage, drone hangers, refueling tankers, and barracks.

The American response has been to pull assets back ever further from Iran, to bases in Israel and Jordan. We’ll call this process debasification. Iran’s debasification strategy takes advantage of the inherent asymmetry between the vastly different force structure and capabilities of Iranian rocket forces and US Axis air forces.

A concluding section predicted the dilemma laid out in WaPo concerning a grand Pentagon evaluation of its force posture in the Middle East:

By all available evidence, the Iranian debasification campaign appears to be working. The US force in the region is likely incapable of generating the same combat power in its air operations against Iran as it could when the war started, and things are trending ever further in a negative direction. Even worse, there’s no clear solution on the horizon. The most obvious lever for American planners to pull is to accept more casualties and losses of personnel and airframes, but this is an unprecedented step the modern incarnation of the US military has never faced.

What's worse is that the Iranians know all of this full well - and probably earlier than the Western public - and they smell blood in the water. Hence, this week they've been strongly signaling a new 'offensive' military posture, and have vowed to hit harder in whatever next waves of conflict come.

So will the US rebuild bases battered by Iranian strikes? Well, Tehran is now saying that in essence it won't let that happen. The WaPo article operates under the illusory assumption that US planners have some big array of options set before them, when increasingly American forces are in obvious retreat and no one can do anything about it. Also, what happened to Pete Hegseth's rah rah Epic Fury press briefings on all the 'winning' and chest-thumping? It's been a while.

Tyler Durden Tue, 08/18/2026 - 15:25

Maryland Court Strikes Down Nation's First State Tax On Digital Advertising

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Maryland Court Strikes Down Nation's First State Tax On Digital Advertising

Authored by Matthew Vadum via The Epoch Times,

A state tax court in Maryland invalidated the nation's first state tax on digital advertising and directed state officials to refund tax payments already collected from major tech companies.

People pass a building on the Google headquarters campus in Mountain View, Calif., on July 23, 2025. Justin Sullivan/Getty Images

The legal dispute had been closely watched by other states that are considering taxing online advertisements.

The Annapolis-based Maryland Tax Court ruled on Aug. 14 that the digital advertising gross revenues tax was unconstitutional after it was challenged in three separate lawsuits by Google, Apple, and Peacock TV. Refunds are expected to run into the hundreds of millions of dollars.

The state imposes the levies based on the businesses' global revenue. Lawmakers previously said the tax could raise $250 million per year. The money raised from the tax was earmarked for a state education program.

The 2021 tax statute specifically targets the revenue large companies earn from digital advertisements shown in Maryland. Companies that take in more than $100 million in annual global gross revenue were taxed at 2.5 percent.

A sliding scale applies to companies with larger revenues, maxing out at 10 percent for those earning more than $15 billion in global gross annual revenues.

The law's backers argued that Maryland needed to overhaul its tax system to deal with major changes in how businesses advertise. Lawyers representing the affected companies said their clients were targeted unfairly.

The state court said the tax runs afoul of the federal Internet Tax Freedom Act, the First Amendment, and the due process and commerce clauses of the U.S. Constitution.

The court held that regulating interstate commerce was the business of Congress - not the Maryland General Assembly - and that it was inappropriate that the tax law was premised on global revenue rather than revenue that comes from in-state advertising.

The Internet Tax Freedom Act forbids taxation of electronic commerce if similar services are not taxed. The court held that there is no meaningful distinction between digital advertising and print or billboard ads, meaning the federal bar applies.

The Apple logo during the preview of the redesigned and reimagined Apple Fifth Avenue store in New York City on Sept. 19, 2019. Brendan McDermid/Reuters

In August 2025, a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit unanimously struck down the disclosure ban in the Maryland law that prevents companies from listing the digital advertising tax on customers' receipts.

Forbidding the disclosure of the tax on customers' receipts means that if companies opt to pass on the cost of the tax to their customers, they are not allowed to advise customers why prices have risen, which means Maryland is insulated from political accountability, the appeals court's written opinion said.

The law "prevents companies from describing the tax in the one setting where the consumer is guaranteed to look: the invoice," the opinion said.

"Keeping out of hot water with voters is not among the interests that can justify a speech ban.

"Criticizing the government - for taxes or anything else - is important discourse in a democratic society. The First Amendment forbids Maryland to suppress it."

The Tax Foundation hailed the Maryland Tax Court's new ruling in an Aug. 14 blog post.

"This is a robust win for the petitioners on all counts," Jared Walczak, a senior fellow at the foundation, wrote.

Although Utah and Illinois enacted digital ad taxes this year, none followed Maryland's approach. Lawmakers in other states that are "considering a digital advertising tax should likewise take note of today's result. It's a look into their own future if they choose to adopt a similar tax," he said.

Democratic legislative leaders in Annapolis said the state will appeal the court ruling.

Senate President Bill Ferguson and House Speaker Joseline A. Peña-Melnyk said they "respectfully disagree with today's ruling and expect the legal process to continue."

The tax was enacted because the state's tax system needs to keep pace with a changing economy in which more commerce and advertising have been moving online, they said in an Aug. 14 statement posted on X.

"It was appropriate to modernize our tax code so that large digital advertising companies contributed alongside other businesses operating in our state."

The Associated Press contributed to this report.

Tyler Durden Tue, 08/18/2026 - 15:05

Jefferies Identifies High-Quality Energy And Materials Stocks As Cyclical Rotation Accelerates

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Jefferies Identifies High-Quality Energy And Materials Stocks As Cyclical Rotation Accelerates

Jefferies analyst Lloyd Byrne wrote in a note on Monday that surging refined-product margins, stronger gas-fired power demand, and improving earnings estimates are providing clear tailwinds for energy stocks, even as valuations and technicals appear stretched.

Byrne showed that the clearest source of strength in the energy market is refining. The six-month New York Harbor diesel-to-crude spread topped $100 (HOCL1 Index on Bloomberg) and has moved in close tandem with the Energy Select Sector SPDR Fund (XLE).

Included in the "10 Charts That Mattered" report that Byrne published for clients on Monday is chart No. 9, titled "Energy & Materials Among High-Quality, High Real Rate Favorites."

He makes the case that rising refined-product margins and a high-real-rate environment favor several energy and materials stocks. Materials do not benefit from refining margins, but rather from the higher rate environment.

On the energy side, he outlined how Valero is the top crack-spread play because it directly benefits from higher refining margins. He then pointed out that ConocoPhillips and EOG are upstream producers, which means they benefit mainly from higher crude oil and natural gas prices, not higher refining margins, while CF Industries, Avery Dennison, and Crown Holdings are materials stocks that benefit in a higher rate environment.

He posted a chart showing the 10-year Treasury inflation-protected yield at about 2.5%, placing real interest rates in the 79th percentile since 1997. In other words, inflation-adjusted borrowing costs are extraordinarily high.

Byrne sees energy and materials as attractive havens for investors in a high-real-rate regime, but only Valero has direct exposure to the diesel crack-spread blowout.

He then pointed to ETF flows, which only indicate that investors are favoring cyclicals.

Materials ETFs have received net inflows equal to 28.6% of assets year to date, followed by industrials at 16.7% and energy at 14.1%. Technology, on the other hand, stands at only 4.1%.

Conversely, investors have been dumping semiconductor stocks.

The key takeaway is that investors are rotating out of semiconductors and into cyclicals, particularly materials and energy. Energy's robust year-to-date inflows remain intact, with widening refining margins and positive earnings revisions, which may only suggest further rotations into cyclicals.

Professional subscribers can read more about crack spreads, the Gulf energy crisis, and US consumers here on our new Marketdesk.ai portal. 

Tyler Durden Tue, 08/18/2026 - 14:45

Iraq-Syria Pipeline To 'Bypass' Hormuz Likely To Take Four Years, $15BN To Build

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Iraq-Syria Pipeline To 'Bypass' Hormuz Likely To Take Four Years, $15BN To Build

Via The Cradle

Iraq's plan to build a pipeline to export oil through Syria and partially bypass the Strait of Hormuz ​will likely take four years to complete and cost $15 billion, Reuters reported on Monday.

Iraq urgently seeks new outlets for its oil exports, which have plummeted since Iran closed the Strait of Hormuz in response to the US-Israel war on the Islamic Republic that started in February.

via Axios

In July, Baghdad exported only 35.5 million barrels through its Basra ports via the Strait of Hormuz, according to the state-run oil firm SOMO. Before the war, Iraq exported about 108 million barrels of oil per month.

The fall in exports has created a budget crisis, as Iraq relies on oil revenues to fund 90 percent of its spending.

Iraq and Syria signed a memorandum of understanding in Washington in July to revive a historic pipeline linking the Kirkuk fields to the Syrian port city of Banias on the Mediterranean Sea.

A separate agreement was signed with a consortium including Chevron, UCC Holding, and TI Capital to undertake technical and financial studies for the pipeline's reconstruction.

The pipeline is expected to transport 2 million barrels per day to the Syrian port, where the crude can then be shipped to Europe by tanker.

But a planned pipeline to export via Syria may not provide an alternative to Hormuz as soon as Iraqi officials had hoped.

"Both sources said the plan would require laying entirely new infrastructure rather than rehabilitating the existing pipeline and cost at least $15 billion," Reuters reported.

Rebuilding the pipeline could take as long as four years because it has been unused since the 1980s and is extensively damaged.

Even the intact sections of that pipeline would have to be replaced as they are not compatible with newly developed specifications, one of the sources said.

An entirely new integrated crude oil pipeline system linking Iraq's southern and northern fields to a central hub in ⁠Haditha, in western Iraq, would also have to be built, the second source stated.

The four-year timeline is also well beyond the two-year period estimated by US Treasury Scott Bessent for Hormuz to become "irrelevant" due to the construction of new underground pipelines by the Gulf states.

Tyler Durden Tue, 08/18/2026 - 14:25

Here's Where The Nation's Hottest Housing Markets Are

Zero Hedge -

Here's Where The Nation's Hottest Housing Markets Are

The US housing market's top 10 hottest ZIP codes this year are all located in the Midwest and Northeast for the fourth consecutive year  - as tight inventories due to limited homebuilding has fueled competition, according to a Monday report from Realtor.com. 

A builder works on a commercial property under construction in Peabody, Mass., on Jan. 12, 2015. Peabody is the nation's hottest housing market, according to Realtor.com. Elise Amendola/AP Photo

The top 10 - as measured by buyer demand gauged by unique views and how quickly homes are selling are located in:

  • Massachusetts
  • New Jersey
  • New York
  • Connecticut
  • Pennsylvania
  • Wisconsin
  • Illinois
  • Michigan

The hot areas received up to 5.3 times as many views and sold substantially faster than the national average, by as many as 42 days. According to a July Realtor.com report, the national median time on market was 53 days in June.

Meanwhile, nine out of the 10 hottest ZIP codes sold at or above list prices in the first half of the year - vs the typical home nationwide which sold for about 2.3 percent below asking price, the Aug. 10 report shows.

As The Epoch Times notes further, tight inventory, driven in part by insufficient homebuilding, is fueling heightened competition in the hottest housing markets, the report notes.

Nationwide, inventory for sale remained 11.3 percent below pre-COVID-19 pandemic norms in June, according to the report. But in the hottest ZIP codes, inventory was 60.5 percent below pre-pandemic levels - more than five times the national gap.

By contrast, the report says that stronger homebuilding and slower price growth in the South and West over the past two years have reduced competition. As a result, the report says, "For the fourth year running, the South and West failed to produce a single entry on the [hottest ZIP code] list."

Meanwhile, the report shows that many of the hottest ZIP codes this year are located in outer-ring suburbs of major metropolitan areas, where buyers can get more space while remaining within commuting distance of city centers.

Peabody, Massachusetts - previously ranked third in 2021 - moved to the top of the list this year. Located about 20 miles north of Boston, the city has a median home price of $600,000, with 70 percent of views of its listings coming from the Boston metro.

Homes there spent a median of only 20 days on the market during the first half of the year, and typically sold for just over the asking price.

Montclair and Sewell, New Jersey, ranked second and third, respectively. Fairport, New York, and Westfield, Massachusetts, rounded out the top five. The remaining spots in the top 10 went to Livonia, Michigan; Lititz, Pennsylvania; North Haven, Connecticut; New Berlin, Wisconsin; and Wheaton, Illinois.

"This year's hottest ZIP codes tell us that buyers aren't simply chasing the lowest price tag anymore," said Hannah Jones, senior economist at Realtor.com. "They're chasing space, character and a manageable commute to a major job center, and they're willing to pay a premium to get it."

Jones added that buyers within these ZIP codes tended to be financially prepared, bringing larger down payments and stronger credit profiles to the table. On average, she said, down payments for homes on the hot list are 17.1 percent, compared with about 13.1 percent nationally. Looking at credit scores, the median for hot list homebuyers is 766, versus about 747 nationally.

Overall, the report concluded, buyers in the top ZIP codes are motivated and choose communities that offer the best blend of value, access, and quality of life.

"As mortgage rates remain high and inventory levels gradually recover, expect these kinds of high-performing, value-driven suburban areas to remain at the forefront of market activity," the report states.

Tyler Durden Tue, 08/18/2026 - 14:05

Federal Judge Halts Move Of FBI Headquarters To Ronald Reagan Building Rather Than Maryland

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Federal Judge Halts Move Of FBI Headquarters To Ronald Reagan Building Rather Than Maryland

Authored by Matthew Vadum via The Epoch Times,

A federal court on Aug. 17 blocked a Trump administration plan to move the proposed new FBI headquarters to the Ronald Reagan Building in Washington instead of a site in nearby Greenbelt, Maryland, that was chosen in 2023.

The former United States Agency for International Development building is seen at the Ronald Reagan Building and International Trade Center in Washington, DC, on July 08, 2025. Kayla Bartkowski/Getty Images

Congress passed laws requiring the General Services Administration (GSA), which manages the federal government's real estate holdings, to select a site for the project from among three suburban sites outside of Washington: Greenbelt; Landover, Maryland; or Springfield, Virginia. In 2023, GSA chose Greenbelt.

However, in July 2025, the Trump administration jettisoned those plans and said it would be more cost-effective to move the FBI to the Reagan Building, which houses U.S. Customs and Border Protection and, until last year, the U.S. Agency for International Development.

U.S. District Judge Theodore Chuang ruled in favor of the state of Maryland and Prince George's County, finding the federal government illegally scrapped the plan to build the facility in Greenbelt, and reprogrammed funds Congress already approved for the project to an alternate location.

Chuang said choosing the Reagan Building ran afoul of legislation Congress approved in 2022 and 2023 that directed the GSA to select one of three sites.

"Notably, the text provides no conditions under which the selection could be unilaterally rescinded or switched to a nonconforming site," Chuang said in his written opinion.

"Had Congress sought to make the location restriction associated with the site selection provisional or qualified, it could have done so," the judge said.

Because the Trump administration did not have authority to choose the Reagan Building, it could not lawfully reprogram $555 million in previously appropriated funds to prepare that site, he said.

The federal government's decision to reprogram the funds was "arbitrary and capricious" because it was based on a misinterpretation of existing law "under which the FBI erroneously concluded that the FBI and the GSA had the authority to select the Reagan Building as the site for the consolidated FBI headquarters," the judge said.

The court vacated the reprogramming and site selection decisions and issued a permanent injunction blocking the government from implementing the Reagan Building plan or reprogramming the funds.

Maryland Gov. Wes Moore, a Democrat, hailed the new court ruling.

"From the beginning, we said the decision to move the FBI headquarters to Greenbelt was final, earned, and the Trump Administration's attempt to overturn it was illegal and wrong for our national security. Today, the court agreed," Moore said in a statement.

"Now it is time to stop the games and get to work building the world-class FBI headquarters that our public servants deserve, where it belongs: in Prince George's County, Maryland."

The Epoch Times reached out to the U.S. Department of Justice for comment. No reply was received by publication time.

Reuters contributed to this report.

Tyler Durden Tue, 08/18/2026 - 13:45

"Strain Is Spreading": FT Exposes Private Credit Distress At Decade Highs

Zero Hedge -

"Strain Is Spreading": FT Exposes Private Credit Distress At Decade Highs

Since last fall, we have repeatedly flagged the private credit sector’s growing vulnerabilities.

Earlier coverage detailed how the asset class ballooned into a $2-3 trillion opaque market after banks retreated from riskier lending, only to face a wave of high-profile defaults (First Brands, Tricolor), surging redemptions that forced gates at major vehicles, rising PIK usage, and AI-related risks to software-heavy portfolios.

In February, the red flag got about as red as it gets...

But, as a wave of private-credit providers unleashed their PR teams - and the story slipped off the lips of the TV talking-heads - it remains top of mind for traders, as we most recently noted:

Which leads us to a new story this morning from The Financial Times which underscores that the pressure is no longer contained.

“Strain is spreading across private credit portfolios, with some of the largest funds taking writedowns and warning about problem loans as the industry faces its biggest challenge in almost a decade,” the FT reports.

An analysis of Solve data shows that the value of troubled loans held by some of the biggest private debt investors has reached levels last seen in 2017, when the industry was dealing with a hangover from an oil price crash.

Loans placed on non-accrual status by the 20 largest publicly traded business development companies (BDCs) climbed to a median 2.8% of their cost in the second quarter, up from 2% at the end of March.

The non-accrual demarcation signals that borrowers have either stopped making payments or that a fund believes a borrower may soon default.

David Golub, co-chief executive of Golub Capital, told investors earlier this month that there was “elevated credit stress” as the industry grappled with a rise in defaults and problem loans.

“We’re in a credit cycle,” Golub said.

“Others denied it for a while. I don’t think there’s a lot of denial any more.”

Fitch Ratings warned last week that private credit defaults had hit a new record in July.

PitchBook LCD data showed the biggest publicly listed BDCs shrank again in the second quarter as funds were hit with impairments and as sales and repayments of loans outpaced commitments on new deals. Listed vehicles managed by KKR and Blue Owl, as well as Apollo’s MidCap Financial, were among those in which repayments outstripped new lending. FS KKR Capital Corp reported that 7.1 per cent of its loan book was troubled in the second quarter - still far above the industry average.

Much of the pain is concentrated in loans extended between 2020 and 2021, when rates were near zero and private equity valuations were elevated.

Higher borrowing costs have “starved some businesses from investing,” said Bryan High of Barings.

“They are using all the cash they are generating to pay interest to lenders and so growth for some businesses wasn’t as strong as it could be.”

Concrete examples include Blackstone and KKR marking down their loan to software group Medallia (Blackstone’s fund marked it at less than 50 cents on the dollar at end-June, down from 60 cents in March) after Thoma Bravo handed the business to lenders. Ares wrote down its loan to Cornerstone OnDemand, while Blackstone and KKR took over dental services company Affordable Care after default.

Industry titans acknowledge that bankruptcies and restructurings are moving back toward long-term averages.

“We are… conserving our capital, maintaining ourselves in a more defensive and risk-averse posture,” said Armen Panossian of Oaktree’s credit arm.

“We really want to be able to lean into the market on the back of what we think will be more volatility… Beneath the surface, there’s cause for concern.”

Others remain more sanguine.

Craig Packer of Blue Owl said “credit metrics are healthy and the issues we are managing remain isolated.”

Jim Miller of Ares noted that borrowers were in “solid” shape with interest coverage and leverage “generally consistent with our five-year average.”

Yet the FT confirms our ongoing warnings that some of this optimism “belies the complicated picture ahead,” particularly for software companies facing uncertain durability of growth amid the AI shift, and for funds still digesting the 2020–21 vintage.

The sell-off in BDC share prices has been sharp - KKR and BlackRock vehicles down more than 15% over the past year, Apollo’s down 14.5% - leaving some funds “priced for death,” according to Oppenheimer analyst Mitchel Penn.

BlackRock’s TCPC sold a $523 million block of loans and is exploring options that could include winding the vehicle down; KKR’s troubled vehicle has waived some incentive fees.

Penn’s research showed that on average over the past five years, bottom-quartile funds generated returns on equity below the yield on a 10-year Treasury.

“Underwriting wasn’t as good as it should have been,” he said. “They weren’t as picky.”

Taken together with our earlier reporting on redemption pressure, opacity, and early defaults, the FT data shows the credit cycle is firmly underway and the situation continues to deteriorate.

This latest report from The FT update builds on our prior observations: underwriting standards loosened during the boom, higher rates are now “starving” cash-flow coverage for many borrowers, and the liquidity mismatch between semi-liquid vehicles and illiquid loans is amplifying pressure.

The bottom-line is simple: the situation in private credit continues to worsen.

Tyler Durden Tue, 08/18/2026 - 13:25

Mark Walter Probe Puts Wall Street's Insurance-Private Credit Machine Under DoJ Scrutiny

Zero Hedge -

Mark Walter Probe Puts Wall Street's Insurance-Private Credit Machine Under DoJ Scrutiny

An ongoing federal investigation into billionaire Mark Walter's business empire is raising alarm bells about Wall Street's use of insurance capital to finance private credit and other illiquid investments. 

Bloomberg reported that Walter's TWG Global holding company said in a filing that it will wind down its exposure to affiliated businesses by up to $6.5 billion after the transactions drew scrutiny from federal investigators. This comes after the Department of Justice homed in on loans that should've been marked as affiliated transactions. 

Walter's TWG Global holding company will buy up to $6.5 billion of affiliated assets from Delaware Life Insurance Co. in exchange for an equal amount of unaffiliated investments. Clear Spring Life and Annuity Co., another TWG-controlled insurer, separately reduced related-party transactions by $90 million.

The moves begin unwinding more than $20 billion of loans and investments that the insurers acknowledged should have been classified as affiliated transactions. 

"Tripping over these requirements can constitute fraud," said Derek Reisfield, co-founder and former chairman of MarketWatch, as well as a former McKinsey consultant, who was quoted by The New York Post. 

Reisfield said that heavy exposure to businesses connected to an insurer's owner poses a very high risk. 

"The risk is that concentrated loans to related parties go south, and the insurance companies and their policyholders can't be made whole," Reisfield said, adding, "It's bad risk management and leaves the companies vulnerable."

Last week, Walter agreed to sell the Los Angeles Lakers to Josh Kushner and Bob Iger at a record $12.5 billion valuation, and earlier this week, a report stated that he is mulling over selling his stake in Chelsea Football Club to the majority owner, Clearlake Capital. 

Insurance companies are allowed to do business with related parties, but such dealings must be disclosed and properly labeled to ensure that owners do not put their interests ahead of those of policyholders. 

The investigation into Walter's empire is a major wake-up call about Wall Street's use of insurance capital to finance private credit and other illiquid investments. 

Walter was one of the earliest adopters of the strategy of acquiring insurers and investing their long-term policyholder capital in higher-yielding private assets. A number of other asset managers, including Apollo, KKR, and Brookfield, have followed suit by building out insurance operations. Private-capital firms now manage more than $1 trillion of insurance assets.

"We have always acted in good faith, and insinuations that we have in any way attempted to circumvent our obligations are simply false," a TWG spokesman told The Wall Street Journal. 

More problems: Walter, CEO of Guggenheim Partners, saw a financing entity tied to the investment firm report a sharp decline in second-quarter earnings, driven by the delayed recognition of advisory fees. The disclosure sent the entity's term loan tumbling below 80 cents on the dollar.

To sum up, the affiliated transactions were not inherently illegal, provided they had regulatory approval. That appears to be where the process broke down in Walter's case.

More concerning, however, is that deeper scrutiny has raised questions about the quality of the loans, the underlying borrowers, and the use of shell entities to channel financing into Walter-linked companies.

Tyler Durden Tue, 08/18/2026 - 12:45

DOJ Seeks Reinstatement Of Criminal Charges Against Kilmar Abrego Garcia

Zero Hedge -

DOJ Seeks Reinstatement Of Criminal Charges Against Kilmar Abrego Garcia

Authored by Aldgra Fredly via The Epoch Times,

The Department of Justice (DOJ) filed an opening brief on Aug. 17 seeking to reinstate human smuggling charges against Kilmar Abrego Garcia after a district court found the prosecution to be vindictive.

U.S. District Judge Waverly Crenshaw Jr. dismissed the charges against Abrego Garcia on May 22, ruling that prosecutors brought the case against him in retaliation for his legal challenge to his wrongful removal to El Salvador last year.

In an Aug. 17 brief, the DOJ asked the U.S. Court of Appeals for the 6th Circuit to reverse the ruling, saying the prosecution against the Salvadoran national was made “based on the evidence, the law, and [prosecutors’] firm belief that there is proof beyond a reasonable doubt” that Abrego Garcia committed the crime.

“The government believed that Abrego had committed human smuggling, that he was ‘a member of the gang MS-13, a designated foreign terrorist organization, and that his return to the United States would pose a threat to the public,’” the DOJ said in the brief.

“Although his deportation had removed that threat and supported closing the criminal investigation, the deportation now had to be undone, at least temporarily. So the United States had a clear legitimate interest in prosecuting Abrego upon his return.”

The department said the lower court ruling marked “a dramatic expansion of the power of courts” to dismiss serious criminal charges based on subjective assessments of a prosecutor’s motivations and accused the district court of interfering with the executive branch’s authority and duty to protect the public from potential threat.

The Epoch Times reached out to Abrego Garcia’s legal representative for comment but did not receive a response by publication time.

Abrego Garcia, who illegally entered the United States in 2011 and stayed in Maryland, was accused of being a member of a foreign terrorist organization, the MS-13 gang. He was deported to El Salvador in March 2025 alongside other deportees despite a 2019 immigration court having issued a withholding of removal—which legally barred his deportation to his home country—because of concerns for his safety.

The Salvadoran national was subsequently returned to the United States in June 2025 under a Supreme Court order after the DOJ acknowledged an administrative error in his deportation.

He later faced charges of immigrant smuggling stemming from a 2022 traffic stop, to which he has pleaded not guilty. Abrego Garcia has also denied claims that he was a member of MS-13.

Crenshaw ultimately dismissed the human smuggling charges in May, saying that objective evidence has shown that “absent Abrego’s successful lawsuit challenging his removal to El Salvador, the government would not have brought this prosecution.”

The DOJ appealed the dismissal in June.

Tyler Durden Tue, 08/18/2026 - 12:30

Moscow Swarmed By 600+ Ukrainian Drones In Massive Overnight Barrage

Zero Hedge -

Moscow Swarmed By 600+ Ukrainian Drones In Massive Overnight Barrage

Ukraine has launched another massive overnight drone wave on Russia. While this is nothing new or unusual, the number of drones concentrated specifically on the Moscow region was much larger than prior attacks.

Over 600 drones were sent on Moscow and the surrounding region overnight into Tuesday morning, Mayor Sergei Sobyanin said. It ranks among the single largest assaults on the capital of the war. Regional reports say it's the largest drone attack on Moscow of the last two years.

Moscow on Tuesday. @exilenova_plus/Telegram, The Moscow Times

At least 180 of the drones were confirmed downed over the Moscow region alone - possibly more - with emergency crews responding to several crash sites, including at another Wildberries warehouse near Moscow.

Authorities cited that at least three people were injured in the assault, including a 10-year old girl. Smoke has been seen rising over residential and construction areas in social media photographs.

At least 5,000 homes or businesses are reported to be without power in the wake of the overnight strikes, regional energy provider Mosoblenergo has said.

The Associated Press has cited at least 800 Ukrainian drones launched across the whole country, as part of the same broader attack. The report further indicated:

The overnight attack started a fire at a warehouse of Wildberries, Russia’s biggest online retailer, in an industrial zone. Ukraine has repeatedly targeted the company, which it says helps supply the Russian military, an allegation Moscow denies.

Wildberries said its facility sustained "insignificant damage."

The online retailer, widely seen as the 'Russian Amazon', has seen its logistics hubs frequently targeted over the past month.

Purported video of military & security outposts desperately trying to repel the inbound drone attack:

EuroNews observes that seven out of ten of the company's biggest warehouses have been it and suffered serious damage, enough to take them offline: "Seven logistics hubs belonging to Wildberries, Russia's largest online retailer, have now been struck and knocked out of action since the campaign began in July."

While none of this has substantially changed Russian forces' ground momentum along the front lines, the Institute for the Study of War has said that the aerial campaign is effectively pressuring the Kremlin, given the steady economic setbacks and devastation.

The Kyiv Independent

"Moscow simply does not have enough air-defense coverage to shield every piece of infrastructure in its rear, even ten of its most valuable commercial sites," the ISW assessment concluded. However, nothing has indicated that President Putin is ready to change course - instead we are seeing things steadily escalate on both sides.

Tyler Durden Tue, 08/18/2026 - 12:15

NSA Blocked Reports Of China Interference In US Elections From Reaching Trump: Declassified Docs

Zero Hedge -

NSA Blocked Reports Of China Interference In US Elections From Reaching Trump: Declassified Docs

Authored by Travis Gillmore via The Epoch Times,

Newly declassified intelligence emails reveal that decisions were made by National Security Agency (NSA) leadership to block reports of Chinese influence in American elections from reaching President Donald Trump.

Four pages of emails, all dated March 13, 2020, were released on Aug. 18 by the White House Government Transparency Task Force.

According to one email—written by an unidentified NSA employee following a meeting about intelligence reporting foreign efforts to target the 2016 and 2020 presidential elections in the United States beginning in 2014—internal concerns were raised about the agency’s suppression of the reports.

“We did not know why we were here, trying to defend the election and identify threats to it, if we were unable to actually report what those threats were because of issues like this,” the NSA employee wrote.

According to another email, NSA analysts had proposed releasing the reports in 2018.

Task force officials are digging through files to determine why evidence of the Chinese Communist Party’s attempts to influence the elections was not passed on to the president, Congress, and some intelligence leaders, including then Director of National Intelligence John Ratcliffe, now CIA director.

Certain aspects of the reports on the Chinese election influence were censored because “it was judged that some of the details regarding the 2016 election were ‘sensational’ and so required a limited distribution [redacted],” an NSA analyst wrote, noting that colleagues tried for 16 months to get the information published.

“People higher in the chain than us—including but not limited to people at ODNI [Office of the Director of National Intelligence]—time and again failed to make real decisions in a timely manner,” they said.

Intelligence officers were told in February 2020 that the office approved the report, and analysts prioritized its delivery, but the NSA deputy director blocked its release, according to the documents.

George Barnes served as NSA deputy director from 2017 to 2023.

“[The deputy director] explained that he was concerned that releasing the [redacted] at this time—in the current political climate, with an acting [director of national intelligence (DNI)] who had been tasked … to ‘clean house’ in the intelligence community, and with an administration that is suspicious of the [intelligence community] and aggressive in removing anyone who stand in their way—would damage NSA’s credibility,” the analyst wrote, referring to Trump appointee Richard Grenell, who became acting DNI on Feb. 20, 2020.

The analyst said the deputy director was concerned that releasing the information could be viewed as political in nature because of the two-year delay.

“I lacked the courage to point out that we, [redacted], had processed the information in a timely manner, and the delay in releasing it was due in part to decisions and inaction on the part of people in the room,” the analyst wrote.

According to the analyst, the deputy director also sought to keep the NSA’s reputation separate from the CIA, FBI, and ODNI—agencies he perceived “had been tarred as hosting or being part of the ‘deep state.’”

The analyst said the deputy director thought publishing the report would “destroy that trust.”

“He felt the questioning of NSA that would ensue would have ramifications on the credibility of NSA reporting overall and would result in morale problems among the broader NSA workforce, a la when the [redacted],” the analyst wrote.

Other elements of the gathered intelligence were excluded from reporting because it would have been impossible to conceal the identity of members of Congress, the analyst said. Such cases require special approval, as dictated by the “Gates Procedures,” established by Robert Gates, former director of Central Intelligence, in 1992.

Newly declassified National Security Agency documents include emails between intelligence officers about decisions made at higher levels to not share information with President Donald Trump, released by the White House Government Transparency Task Force on Aug. 18, 2026. Courtesy of the White House

Given the circumstances of the discussion, the other analyst deduced that disclosure was unlikely, writing in the memo: “In light of our experience with the [redacted], we would consider ourselves lucky” if new intelligence reporting regarding the 2020 election was distributed before election day.

The meeting concluded with the deputy director suggesting “exploring maybe a ‘crazy idea’ like using” an unidentified redacted process to share intelligence “so that the analysts there who needed to see this information could have access to it without it having to be serialized.”

Politicized Intelligence

A senior White House official briefed a small group of reporters, including The Epoch Times, on Aug. 16 about the upcoming release, emphasizing the politicization of intelligence gathering and reporting revealed by the documents.

“It shows that a very high-ranking official, a deputy director of the NSA at the time, made clear he wasn’t intending on sharing some of the intelligence about China and other election threats because of various political statements,” the official said.

“That’s the highest official thus far we have seen mentioned, who seemed to have some awareness that information would not be being sent to the president and to Congress and to policymakers about election interference or election security and election vulnerabilities.”

The internal emails came to light because they were forwarded to a civilian ombudsman tasked with overseeing intelligence community shortcomings.

Investigations Continue

More documents are under scrutiny by task force members, and new releases are expected soon, according to the administration official.

He said that in a few months, the task force is expected to release a “full body of evidence” detailing that there was “extensive intelligence about the vulnerabilities of the election system” gathered by U.S. intelligence agencies during the period between 2019 and 2021-22.

“But for some reason … the intelligence agencies just made a decision not to brief it to the people who could potentially implement policies that would address the vulnerabilities,” the official said.

Voting machine integrity was also of concern to the intelligence community, according to the official, with five foreign nations found to be capable of hacking U.S. election machines.

“The notion that we would go six years without fixing a known vulnerability is something that we’re all eager to solve,” he said.

The task force expects to release more details about some of the vulnerabilities in the coming weeks.

Prior revelations related to the suppression of intelligence reports include evidence that information was intentionally kept out of presidential daily briefings and declassified FBI documents. Then-FBI agent Nikki Floris wrote to a colleague that she “was basically running a shadow government across the FBI at one point” after successfully blocking the release of certain reports.

The Epoch Times reached out to the NSA for comment but did not receive a response by publication time.

Tyler Durden Tue, 08/18/2026 - 11:55

The US Is Forcing Others To Take Sides, As Is China

Zero Hedge -

The US Is Forcing Others To Take Sides, As Is China

By Michael Every of Rabobank

The Heat You Feel Isn't Just The Summer Sun

There is a lot of geopolitical heat out there right now; and markets may get burned by it.

The 60-day US-Iran Memorandum of Misunderstanding has lapsed, with Trump and Iran both rejecting any extension while claiming control of Hormuz. In our view, the US is unlikely to restart major military action until after the November midterms. (Note the US just awarded a $23bn contract to Raytheon to accelerate annual Tomahawk missile production to over 1,000 from the current 60 alongside a $59bn Lockheed Martin deal to ramp up Patriot interceptor output from 600 to 2,000.)

Trump’s threat to bomb Oman is public diplomacy matching what Tehran threatens privately to ensure Muscat doesn’t close off the southern Hormuz passage allowing ship-to-ship oil shuttling that, according to the US, is seeing significant flows. The Saudis are now offering to sell oil near Oman; a sign they may be copying the UAE. That doesn’t help with refined products, where the US will announce steps to boost refiners’ throughput: by running at 120% of capacity?

However, as previously argued, relative energy calm incentivises Iran to escalate sooner. Israeli intel claims Tehran has achieved a remarkable recovery in its ballistic missile production by ignoring the needs of the civilian economy; the Wall Street Journal reports Iran is preparing to foment unrest in the Gulf, cut undersea internet cables, further destabilize the Red Sea via the Houthis, and move troops into Kuwait to force the US into a boots-on-the-ground game. Despite US efforts to stabilize Lebanon (by disarming Hezbollah) and Gaza (by disarming Hamas), the above dynamic could destabilize the entire Greater Middle East region.  

Meanwhile, tensions remain high on the Russia-Ukraine front. Speculation is that after the Duma elections on September 18-20, Putin may escalate via mobilization and closing the border; far less likely, a tactical nuclear strike; or a move vs. a Baltic state. The latter would aim to test NATO’s Article 5 resolve within Europe and from the US. This could be coordinated with Iran.

North Korea may also send another 50,000 men to Ukraine. That’s as China-friendly South Korean President Lee is proposing an end to the war with the North, arguably why Trump called to scale back scheduled joint military drills. In reality, that claim was too close to their start to make any difference, but was Trump warning Seoul or helping its bid to restart talks with the North while thinking of Ukraine? We shall see – but simplistic takes of the US ‘walking away from Asia’ are categorically wrong when looking across other news and developments - including Japan revising its national security doctrine after Putin visited the Kuril Islands, which Moscow has held since the end of WW2, to send Tokyo a warning message.

Last week, we had news that the US set ‘ideological loyalty tests’ for NATO members, including asking about stances on Iran. As Bloomberg put it, this “would upend the post-WW2 transatlantic relationship, which was built on US military guarantees that superseded many political disagreements.” Yet NATO’s website states it was created to: “Deter Soviet expansionism”; “Forbid the revival of nationalist militarism”; and “Encourage European political integration.” That is ideology – and Soviet expansionism was global. One can argue the US is -- rudely -- pushing Europe and Canada to look at new ideological threats, globally and towards integrating with it – albeit on its terms.

Matching that, last week saw a US report naming European countries among those helping China to trans-ship goods to avoid US tariffs.

As Canada braces for 50% US tariffs, the geostrategic logic is clear: either a common external tariff vs. China and trans-shipment, or a higher US tariff vs. those who refuse. Likewise, the US is now telling global partners they cannot be part of its critical minerals and chip/AI Pax Silica and also be members of China’s World Artificial Intelligence Cooperation Organization. That’s as the EU’s Mistral has adopted a Chinese AI as the core of its latest model.

As warned for years, the US looks like it’s going to force others to take sides – as will China. That includes US institutions: the Pentagon just ordered 30 US universities to scrutinise their ties with Chinese research partners; and Google just announced it will stop making its Pixel products in China from next year.

For markets, Middle East military escalation is likely to see further spikes in global energy prices; if Russia escalates in tandem, things are worse – potentially vastly more so; and throw uncertainty in Asia into the mix and things are even more volatile. As previously flagged, if the global energy complex were to see a serious crisis, pressure would build for more radical actions than anything the US is likely to announce today on refiners. Geopolitical market fragmentation would be a real risk (i.e., from NAFTA to NAPHTHA) as Bloomberg notes ‘The Americas' Challenge to Middle East Oil Won't Let Up’.

The above backdrop obviously needs massive increases in defense spending and ‘just for me’ vs. ‘just in case’ (forget ‘just in time’) thinking on top of fragmentation risk in goods trade even more evident for tech and defense-adjacent AI. That is zero-sum and inflationary before, for some, it can become more cooperative and deflationary. As one example, copper is in a new supply crunch as the realization sinks in that there isn’t enough of it physically to address the claims being made on it financially.

This is all happening when most economies are already carrying far too high a level of public debt. Against this, US 30-year bond yields today are 5.31%, the highest since July 2007; UK 30-year Gilt yields are 5.84%, the highest since May 1998; German 30-year Bunds are 3.74%, the highest since August 2007;

Japanese 30-year JGBs are at 4.12%, the highest since that maturity was introduced in 1999, and vs. around 0.65% during Covid.

At the same time, the FT reports that private credit is under strain as troubled loans swell to levels last seen in 2007 – just before the Global Financial Crisis; and the Nikkei Asia claims Japan's life insurers' have unrealized bond losses nearing $200bn (or around 4% of GDP) as yields rise.

In the old world order, it would be a matter of time until central banks stepped in to calm things, “because markets.” How can they do so now: with “rate cuts!” that steepen the curve more and an EM-style shift to bills from bonds? Or with rate hikes in an economy that needs to spend much more? Or with yield curve control? Or with rhetoric? Or with prayer?

In our new world disorder, Japan just had to lean on the US to get JPY back down temporarily to help get yields lower; yet it’s slipping again at 159.53 today. If the BOJ were to raises rates to support JPY, could its life insurers suffer even more?

Worse, the way the US helped out Japan saw a hyperbolic FT op-ed arguing the US dollar and US Treasuries are no longer the global reserve FX and reserve assets that we like to think of them being. It may not be true, but if it were, how do we price anything in a suddenly crumbling system?

Once the geopolitical situation is calmer, or has a clear winner, let’s talk again.

Until then, yes, it’s hot out there - and it’s not just the summer sun. Try not to get burned.

Tyler Durden Tue, 08/18/2026 - 11:15

US Issues Rare Condemnation Of Israeli Strikes On Syrian Airbase: 'Unnecessary Escalation'

Zero Hedge -

US Issues Rare Condemnation Of Israeli Strikes On Syrian Airbase: 'Unnecessary Escalation'

A top regional Trump envoy has said the US is "deeply concerned" after major new Israeli airstrikes on Syria overnight, following months of an absence of such attacks, and in the context of the broader Iran conflict.

The Syrian government and US Envoy to Iraq and Syria Tom Barrack said the attacks hit Abu al-Duhur military airfield in Idlib province in northwestern Syria. Barrack blasted it as an unnecessary escalation that threatens regional stability.

Source: Aawsat

Additionally the Syrian Foreign Ministry of the new Sharaa/Jolani government blasted the "unjustified act of aggression" and "flagrant violation of Syria's sovereignty and territorial integrity."

While the Israeli government has not officially owned up to the operation, or provided any details, an unnamed senior Israeli told Fox News that "Highly sensitive intelligence was shared with the United States in advance, at the most senior levels of the various agencies and bodies."

"Al-Sharaa understands that he cannot operate like the previous Syrian regime, which maintained proxy forces. It's possible that he didn’t understand what was going on, or didn't know." Fox added that the official could not provide additional details "due to the highly classified nature of the intelligence."

The statement is odd given its suggestion is that Iran-linked forces were still operating inside Syria (based on the reference to the "previous Syrian regime" and its proxy forces). 

However, Idlib had throughout the entirety of the war been a hotbed of Sunni al-Qaeda linked activity. The post-Assad ruling faction in Damascus previously had the northwest province as its very headquarters, where Jolani got his start commanding Nusra Front which morphed into Hay'at Tahrir al-Sham.

The idea that Iran-linked militias would somehow be operating there 19 months after Assad's exit in December 2024 is strange and unlikely.

But ultimately it remains unclear why Israel conducted the strikes, and what the precise high level target may have been.

Amb. Barrack added to his statement: "The United States continues to believe that restraint and engagement offer the more constructive course. We encourage all parties to prioritize logical discourse over further military incidents."

Secondary explosions reported and filmed at the airbase location...

Things in Syria have been mostly quiet of late; however, there's still a sporadic conflict in the south, where Israeli troops occupy territory significantly beyond even the Golan Heights.

At the same time, Israel is sure to be alarmed by a fresh statement out of Syria's foreign ministry saying it aims to keep nuclear material that was already in the country in its custody, subject to IAEA monitoring and guarantees.

Tyler Durden Tue, 08/18/2026 - 10:55

Meta Faces Unprecedented Legal Reckoning Over Youth Mental Health As Massive Multistate Trial Begins

Zero Hedge -

Meta Faces Unprecedented Legal Reckoning Over Youth Mental Health As Massive Multistate Trial Begins

Meta Platforms is facing a critical juncture in its battle over youth online safety. Just weeks after suffering a massive legal defeat in New Mexico, the parent company of Facebook and Instagram is now defending itself in a California federal court against a bipartisan coalition of 29 states. The states say Meta deliberately designed its platforms to addict children and harvested their data in violation of federal law.

The California Showdown

A sweeping multistate trial opens Tuesday in Oakland, California, overseen by U.S. District Judge Yvonne Gonzalez Rogers. Attorneys for Colorado, California, New Jersey and Kentucky - leading a bipartisan group of 29 states - will deliver opening statements. Those four states' claims about addictive design and deceptive marketing are what this trial tests, while all 29 states are involved over data-harvesting claims. 

Interestingly - the eight-person jury hearing the case won't actually decide it. Rogers empaneled it in a purely advisory capacity, which is rare. The jurors will answer specific questions she selects, and she is free to disregard their findings entirely when she issues her ruling after the trial concludes in October, Reuters reports.

The states argue that features like infinite scroll were purposely engineered to keep young users hooked, that Meta misled the public about the safety of its platforms for adolescents, and that the company improperly collected and monetized children's personal data in violation of federal law.

The financial exposure is the largest of any case Meta has faced. The company has warned that maximum statutory penalties could theoretically reach $1.4 trillion, while the attorneys general have indicated they may seek around $200 billion.

A Reuters/Ipsos poll released last week found that 85 percent of Americans believe social media can be addictive for children.

Beyond money, the coalition wants nationwide structural changes: age restrictions, deletion of algorithms and AI models built with children's data, elimination of infinite scroll and notifications, strict time limits for young users, and an algorithm retuned to prioritize well-being over engagement. Meta CEO Mark Zuckerberg and Instagram head Adam Mosseri are both expected to testify, alongside former employees and outside experts.

What Happened In New Mexico

The multistate trial arrives on the heels of a devastating legal blow in New Mexico. On Aug. 6, State Judge Bryan Biedscheid ruled that Meta had created a public nuisance and ordered the company to pay $567 million into a youth mental health fund, allocating $420 million to treatment, $90 million to screening and assessment, $33 million to prevention and awareness, and $15 million to referrals and care coordination over five years. The award followed a $375 million penalty a New Mexico jury imposed in March for violations of the state's Unfair Practices Act.

The award fell well short of New Mexico's request. The state had sought $1 billion toward a $3.7 billion plan to expand children's mental health services.

"The Court finds that the weight of the evidence presented demonstrates that Meta's platforms are a cause of and substantial contributing factor to the youth mental health crisis in New Mexico."

Biedscheid compared the platforms to a polluting factory, writing that the harms "do not stay contained" but migrate "to the real world" and burden families, schools, hospitals and law enforcement.

The order, a win for New Mexico Attorney General Raul Torrez, also imposes five years of operational changes: monthly limits on teen use of Facebook and Instagram, restrictions on notifications, tighter controls on adult contact with minors, safeguards for AI chatbots, and enhanced review of child sexual abuse reports. Meta must file written progress reports twice a year. The template is now sitting in front of the 29-state coalition.

Meta's Defense

Meta plans to appeal the New Mexico ruling and maintains that the attorneys general in the California trial are chasing an "outlandish payout" without proof of actual harm. "We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts," the company said after the New Mexico decision.

The company argues it has invested heavily in creating a safe environment for teens, employing child safety experts and deploying technology to root out predators and harmful content. Company spokespeople have characterized the state lawsuits as an attempt to penalize Meta for industry-wide problems, such as the complexities of age verification.

The litigation traces back to 2021, when whistleblower Frances Haugen testified before the U.S. Senate and provided internal documents indicating Meta knew its platforms could harm young users but prioritized engagement over safety.

Meta is not alone. Alongside Snap, TikTok parent ByteDance and YouTube parent Alphabet, it faces more than 3,000 federal lawsuits consolidated before Rogers and another 3,300 pending in Los Angeles state court. Eight states, including Tennessee and Arkansas, opted out of the federal case and filed in their own courts. Tennessee's trial is already underway.

Meta has told investors that legal and regulatory blowback over youth safety "could significantly impact our business and financial results."

Tyler Durden Tue, 08/18/2026 - 10:40

Nvidia Confirms It Will Back Massive 4.25GW SoftBank Data Center In Ohio For $105 Billion

Zero Hedge -

Nvidia Confirms It Will Back Massive 4.25GW SoftBank Data Center In Ohio For $105 Billion

Nvidia has confirmed reports that it is financially backing SoftBank's massive data center at the Portsmouth Site in Pike County, Ohio, with up to $105 billion in financing, a securities filing revealed on Monday.

The project, led by SB Energy, is set to be fully leased to OpenAI. The facility could grow to 10GW, making it the world's largest data center, but Nvidia will initially support the first 4.25GW, DataCenterDynamics reported.

In a LinkedIn post, Nvidia CEO and founder Jensen Huang confirmed that his company would partner with SB Energy to help secure land, power, and shell (LPS) capacity at the Department of Energy (DOE) site. 

The GPU giant will provide a $105bn backstop for the project, helping lower debt costs, similar to previous SPV project financings and reusing the structure popularized by Meta in late 2025 with its Project Beignet off balance sheet structure to fund its massive Hyperion data center . It had initially planned to support as much as $250bn, but faced investor pushback over the extent of the risk.

Nvidia will also invest $1.5bn in SB Energy, down from a reported $3bn. The SoftBank subsidiary, which is preparing for an IPO, is set to build 10GW of new power generation, including 9.2GW of natural gas generation, to power the facility. This will provide up to 8GW of total IT load.

SB Energy and SoftBank also plan to invest at least $4.2bn in new regional grid infrastructure through a partnership with AEP Ohio they say is designed to protect ratepayers.

"Nvidia is supporting the LPS infrastructure at Ports-Pike for approximately 4GW over a 20-year term, securing a site on which Nvidia compute will be exclusively deployed," Huang said.

"Our support is limited to defined portions of lease and power payments, along with a specified residual-value commitment — not the full cost of the site or all of the tenant’s obligations. The guarantee will become effective in phases as data centers are placed in service between 2028 and 2030. As OpenAI makes lease payments and capacity comes online, Nvidia's remaining exposure declines."

Huang said that most companies will secure LPS independently, and then buy Nvidia gear, but that leading AI labs are "growing faster than their balance sheets and long-term credit profiles can support.

Ports-Pike will not only exclusively feature Nvidia GPUs, but also the company's full-stack DSX AI factory platform, including CPUs, networking, and infrastructure software. Over 20 years, it is expected to feature multiple generations of Nvidia gear.

"Each generation of Nvidia AI factory systems deployed at Ports-Pike could represent approximately 1.5 million Nvidia GPUs, or approximately $150 billion to $200 billion in Nvidia revenue," he said.

The company may yet decide to secure the remaining capacity of 3.75GW at the site.

Huang claimed that the deal was not an example of circular financing, an accusation the company has increasingly faced as it has funneled its profits back into the AI companies that buy its hardware.

"Nvidia uses its scale and long-term visibility to secure Ports-Pike to host Nvidia compute," he said. "This is the same discipline we apply to supply-chain management: we secure critical inputs when we have visibility into customer demand and when doing so enables long-term productive capacity."

Tyler Durden Tue, 08/18/2026 - 10:25

US Pending Home Sales Plunge Back Near Record Lows In July

Zero Hedge -

US Pending Home Sales Plunge Back Near Record Lows In July

Following another disappointment in existing home sales in July, weak homebuilder sentiment, and plunging housing starts, pending home sales tumbled for the second month in a row in July (-2.3% MoM vs 0.0% exp - below thew worst forecast), dragging sales down 2.5% YoY - the biggest annual drop since April 2025...

This decline matches the second-worst reading in data back to 2001...

“The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract signings,” NAR Chief Economist Lawrence Yun said in a statement.

“Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations.”

All four major US regions experienced a decline in demand during the month.

An index of pending sales in the South, the nation’s biggest home-selling region, decreased 2.2% to the lowest level since January 2025. Pending sales dropped 4.7% in the West.

As a reminder, because houses typically go under contract a month or two before they’re sold, the pending home sales data tend to be a leading indicator of closings that are captured in the monthly previously owned home sales reports.

Translation - this is terrible news building on an already ugly situation in the US housing market.

Tyler Durden Tue, 08/18/2026 - 10:13

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