The post The March Jobs Report and the Story of Time appeared first on CEPR.

 

This week, I speak with Songyee Yoon, founder and managing partner of Principal Venture Partners. Her AI-focused investment firm established in 2024, and since 2025, she has beem a member of the board of directors of HP.

We discuss her venture firm’s focus on AI-native companies, and understanding technological innovation. We also cover the tech investment landscape and how she determines which companies are native to AI and which are just “chasing the boom.”

A list of her favorite books is here; A transcript of our conversation is available here Tuesday.

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

Be sure to check out our Masters in Business next week with Philippe Bouchaud, co‑founder, chair & head of research/chief scientist at Capital Fund Management (CFM) The $20 billion dollar fiorm specializes in managed futures). He beghan his career in theoretical physics, was awarded the IBM young scientist prize (1990) + C.N.R.S. Silver Medal (1996), and has published over 300 scientific papers and several books in physics & finance.

 

 

 

Current Reading/Favorite Books

 

 

The post MiB: Songyee Yoon, Principal Venture Partners appeared first on The Big Picture.

Netanyahu Boasts 70% Of Iran's Steel Production Capacity Destroyed

Israeli Prime Minister Benjamin Netanyahu stated in Friday remarks that Israeli airstrikes have wiped out roughly 70% of Iran's steel production capacity, dealing a major blow to its ability to manufacture weapons - from missiles and drones to ships.

"Together with our American friends, we continue to crush the terror regime in Iran. We are eliminating commanders, bombing bridges, bombing infrastructures," Netanyahu began in a video statement.

Illustrative image, via Steel Radar

"In recent days, the Air Force has destroyed 70% of Iran's steel production capacity," he added. "This is a tremendous achievement that deprives the Revolutionary Guards of both financial resources and the ability to produce many weapons."

But we should also add that this appears part of the Israeli strategy to bring about government and societal collapse, something Netanyahu has at times been more out in the open about. 

Israel was the first to begin attacking Iranian energy infrastructure, having hit Pars gas field last month - an action which the White House distanced itself from.

What has become clear is that Iran's two largest producers - Khuzestan Steel Company and Mobarakeh Steel Company - have both been knocked offline after repeated US-Israeli strikes, with officials warning it could take months to restore operations, and that's assuming this can be done even as the bombs still rain down.

President Trump has meanwhile warned that Washington has yet to begin "destroying what's left" of the Islamic Republic's infrastructure.

Major bridges have already been taken out, and even medical and pharmaceutical complexes, along with instances of deadly attacks on schools.

But for each escalation on Iran's infrastructure, the IRGC has been hitting back at Israeli and Gulf sites in kind. This has even included reportedly attacking American tech companies based in the Gulf.

Tyler Durden Sat, 04/04/2026 - 08:45

Poland: Pedophilia, Bestiality Scandal Hits Tusk's Party

Via Remix News,

The Kłodzko scandal could bring down the Civic Coalition (KO).

This is the view of PiS candidate for prime minister, Przemysław Czarnek, despite the localized nature of the crime.

“This is a group of people who really have a lot on their minds,” the politician says.

A pedophilia and zoophilia scandal in the Lower Silesian Voivodeship has shocked Poland. Przemysław L., 45, was sentenced to 25 years in prison for sexual offenses committed against underage girls, bestiality, and recording these acts on film and in photographs.

According to Do Rzeczy, his ex-wife, Kamila L., a former Civic Platform activist, was sentenced to 6.5 years in prison for failing to provide assistance to her minor daughter from a previous relationship, who was a victim of rape, and for complicity in animal abuse.

Przemysław Czarnek, the PiS candidate for prime minister, commented on the shocking case and its possible political consequences on Telewizja Republika on Wednesday.

“This is a very serious scandal that will, in my opinion, sink the Civic Platform. I spoke about the Civic Platform and their absolutely scandalous behavior three years ago, when there was a debate on the vote of no confidence in me. And I shouted from the parliamentary podium that these people should be feared, because these people from the Civic Platform, the mayors of cities from the Civic Platform, finance associations and organizations with enormous public funds—over a billion złoty a year—that simply deal with dramatic issues,” said the former Minister of Education and Science.

“I mentioned programs that were simply perverted by their very name,” he added.

As Czarnek pointed out, “this is a community of people who really have a lot going for them, financing these kinds of communities that commit these kinds of shameless, dramatic, criminal, anti-human actions against children, and against animals as well, because we are dealing with zoophilia there as well.”

Politicians from the Civic Coalition also commented on the situation.

“It’s difficult to hold someone accountable; it’s a situation that can happen to anyone. Anyone can have a neighbor like that whom they know nothing about until the police and prosecutors get involved,” one Civic Coalition MP told Wirtualna Polska.

The interviewees emphasize that the case involves a former Civic Coalition (KO) activist and a very low-level figure. The police and prosecutors acted, and the perpetrators were brought to justice, so it’s difficult to speak of the scandal’s political context. “It’s a local issue, perhaps also highlighted by local disputes between the mayor and the Civic Coalition,” notes the Civic Coalition politician.

Word has surfaced that Prime Minister Tusk is offering clarification.

“It’s more likely at the local level, not the central level, not from Deputy Marshal Monika Wielichowska; it’s hard to blame her,” says a senior Civic Coalition (KO) politician.

Wielichowska supported Kamila L. when she was campaigning for the regional position.

“This is certainly an inconvenient matter for Monika. She’s not handling it well,” the source adds.

Read more here...

*  *  *

Tyler Durden Sat, 04/04/2026 - 08:10

Navy's Top Officer Admits Ford Carrier Fire Halted Its Combat Sorties For Two Days

More details continue to belatedly come out in piecemeal fashion related to the Navy's largest and most expensive supercarrier, the USS Gerald R Ford. It has withdrawn from the Iran theatre of operations and Mideast regional waters, now anchored in Croatia (Split) for largescale emergency repairs, after a March 12 fire which the Pentagon has said was non-combat related left some sailors with minor injuries.

New information has been disclosed by no less than the US Navy's top officer. He has described in fresh remarks that the USS Ford was unable to fly sorties for two days due to (the alleged) laundry fire, which took over a full day to extinguish.

US Navy/AFP/Getty Images

CNN has underscored that this marks the "first indication that the blaze hindered combat operations against Iran." So the incident has been confirmed to have resulted in a complete halt to two days of combat operations against Iran - which is hugely significant given that only two carriers were launching operations at that time (the other was the USS Lincoln). And now the USS George HW Bush is en route across the Atlantic in a scheduled deployment.

Chief of Naval Operations Adm. Daryl Caudle, addressed the Washington-based think tank the Center for Strategic and International Studies (CSIS) on Tuesday. While praising the crew's response to the fire, he stated the following:

"They fought that, put it out, and started flying sorties two days after that, so I’m very proud of that crew," he said.

Caudle described that they ended up battling the blaze -  and cleaned up the water damage and fire-fighting substances, for a total of 30 hours.

He also confirmed prior reports of some 600 sailors being displaced from their sleeping quarters due to the damage. 

As for the precise cause of the blaze, the last official word was a March 28 statement from 6th Fleet saying, "military and federal civilian law enforcement continued investigations into a fire aboard the ship originating in the ship’s laundry facilities."

This comes amid an avalanche of speculation that the Ford might have been hit by an Iranian missile or drone - but this remains just theorizing and speculation.

It's problems run deeper, Bloomberg writes...

The USS Gerald R. Ford aircraft carrier arrived at a port in Crete on Monday after it had to leave the Middle East — and the war against Iran — when a fire broke out in its laundry area. But the massive ship’s problems run a lot deeper. https://t.co/B9odzYd9UY

— Bloomberg (@business) March 24, 2026

Adm. Caudle did make another important admission in his Tuesday remarks. He said: "The challenge … is how do you buy down risk in other parts of the world while you're focusing a lot of resources in one area." Already major US military assets have been diverted from southeast Asia, where China's pressure campaign on Taiwan continues, toward the Middle East in relation to Operation Epic Fury.

* * *

Tyler Durden Sat, 04/04/2026 - 07:35

What Might Transatlantic Security Look Like If The US Leaves NATO?

Authored by Andrew Korybko,

If NATO as a whole remains more or less intact upon the US’ hypothetical exit, and the US then reaches bilateral security deals with Poland, the Baltic States, and Turkiye, then not much would change from Russia’s perspective.

Trump’s latest talk about the US leaving NATO is being taken seriously by many Europeans owing to his rage over their refusal to help him reopen the Strait of Hormuz, not to mention them denying the US access to its own bases on their territory and even their airspace for use in the Third Gulf War.

It’s possible that this is just a bluff, however, to usher in the radical reforms that he envisages and which were described here in connection with a prior report about his supposed “pay to play” plans.

Nevertheless, it’s also possible that he’s indeed serious and that the US will ultimately end up leaving NATO, in which case it’s useful to analyze the future of transatlantic security.

For starters, the headquarters of both EUCOM and AFRICOM are in Germany, and it would be very difficult and inconvenient to relocate them.

Therefore, the US might reach a bilateral security deal with Germany in this scenario, which could set the basis for other such deals with other NATO members.

Such arrangements would likely include terms that are advantageous to the US such as its allies committing 5% of their GDP to defense like has already been demanded of them as well as giving a preference to American companies for military-technical procurement.

The US might also demand that its troops be granted immunity for any crimes that they might commit while based in their allied nation.

Trump could seek to enshrine trade privileges for the US into any security deal too knowing him.

The only countries that would likely agree to such terms are those whose leaders either sincerely fear Russia or manipulate the public on this pretext, thus Poland and the Baltic States for sure, but Finland and Romania can’t be ruled out either.

They and the other NATO members would still enjoy Article 5 assurances amongst themselves, but it’s also possible that larger members like France, Germany, Italy, and/or the UK might follow the US’ lead in making demands of the smaller ones for ensuring this.

In that event, the European security system could fundamentally change, but concerns about Russia exploiting the optics of infighting (even if only for soft power purposes and not by initiating hostilities against post-US NATO) could deter the aforementioned larger members from doing this.

If NATO as a whole remains more or less intact upon the US’ hypothetical exit, and the US then reaches bilateral security deals with Poland and the Baltic States, then not much would change from Russia’s perspective.

The same goes for if the US reaches such a deal with Turkiye, which enjoys pragmatic ties with Russia unlike Poland and the Baltic States but is poised to take the lead in expanding Western influence along its southern periphery through the “Trump Route for International Peace and Prosperity”.

If the US remains committed to Turkiye’s defense, any potential clash with Russia could risk World War III. If no such deal is reached, however, then Russia might be more proactive in pushing back against Turkish influence there.

All in all, transatlantic security isn’t expected to change much if the US leaves NATO so long as it retains Article 5-like obligations to several of the bloc’s key members, namely Poland, the Baltic States, and Turkiye.

If it doesn’t, then Russia might consider preventive military action against post-US NATO to eliminate security threats emanating from it, but it could be deterred by nuclear-armed France and/or the UK reaffirming their Article 5 obligations to the bloc’s members.

Nothing would really change then.

Tyler Durden Sat, 04/04/2026 - 07:00

The weekend is here! Pour yourself a mug of Danish Blend coffee, grab a seat outside, and get ready for our longer-form weekend reads:

• Maybe you should have bought an electric car: We run the numbers on EVs versus gas cars in an era of skyrocketing oil prices. The Iran war has turned the EV skeptics’ math upside down. The Iran War is illustrating the cost of anti-EV nonsense. (Noahpinion)

• How Apple became Apple: The definitive oral history of the company’s earliest days: As Apple turns 50, the founders and early employees tell the story in their own words. The true story of how Steve Jobs, Steve Wozniak, and other bright young tech hobbyists of the 1970s joined forces to ignite a revolution. The mythology gets a reality check—and the reality is more interesting. (Fast Company) see also From the Pages of PC Magazine: How We Covered Apple’s Greatest Hits and Misses: As Apple turns 50, we look back at the boldest (and most questionable) hardware to ever pass through the PC Labs. (PC Magazine)

• Vanguard Investors Cleaned Up: Morningstar’s data shows Vanguard fund holders outperformed nearly everyone else, again. Low costs and discipline beat cleverness every time. (Morningstar)

• Private capital: what are the risks? The FT takes a hard look at private capital’s growing footprint and the systemic risks hiding behind the illiquidity premium. Blackstone’s scale makes this everyone’s problem. As investors seek to retrieve their money, the $22tn industry rejects comparisons with 2008. Regulators aren’t so sure. (Financial Times)

• How American Camouflage Conquered the World: The story of how MultiCam went from a military contract to a global fashion statement. America’s soft power now comes in woodland pattern. The world-famous MultiCam pattern was designed for the military by two Brooklyn hipsters. Now everyone—from babies to ICE agents—is suited up for battle. (Wired)

• Is the Smartphone Theory of Everything Wrong?: Derek Thompson challenges the popular idea that smartphones explain every social ill among young people. The data is more nuanced than the narrative. A Comprehensive Investigation. Many people believe that the nexus of smartphones, Internet, and social media is to blame for every modern catastrophe. Here’s 5,000 words on who’s right and who’s wrong. (Derek Thompson)

• When are bones no longer a person? A strange tale of King Cnut’s femur, ancient DNA, religious belief on bodies and souls, and a debate over what constitutes a person after death. A haunting philosophical essay on the ethics of human remains, identity, and when the dead stop being people. The kind of piece that stays with you. (The Garden of Forking Paths)

• Iran’s Wealth Is Parked on London’s Billionaires’ Row: Years of Western sanctions haven’t prevented money flows out of Tehran: ‘They probably learned from the Russian oligarchs’ (Wall Street Journal)

• Everything With Trump’s Name, Likeness and Signature: As anyone who has ever seen his buildings knows, Donald Trump has always liked to see his name displayed prominently. It’s become a hallmark of his presidency, to the point that the Treasury Department announced on Thursday that President Trump’s signature will appear on U.S. dollars later this year, a first for a sitting U.S. president. (New York Times)

• The Curious Case Of Sidd Finch: The greatest April Fools’ prank in sports journalism history—George Plimpton’s story of a Mets pitcher who could throw 168 mph. A perfect read for the day.He’s a pitcher, part yogi and part recluse. Impressively liberated from our opulent life-style, Sidd’s deciding about yoga—and his future in baseball. (Sports Illustrated)

Be sure to check out our Masters in Business next week with Songyee Yoon, founder and managing partner of Principal Venture Partners, an AI-focused investment firm established in 2024, and since 2025 a member of the board of directors of HP Inc.

 

When final Gulf oil shipments will arrive around the world, as diesel and petrol prices surge 27% since Iran’s blockade began

Source: Mirror

 

Sign up for our reads-only mailing list here.

~~~

To learn how these reads are assembled each day, please see this.

 

The post 10 Weekend Reads appeared first on The Big Picture.

Has Concern Over Hormuz Made Us Forget The Red Sea?

Authored by Gregory Copley via The Epoch Times,

Wartime concerns about the security of maritime energy traffic through the Strait of Hormuz—connecting the Indian Ocean/Gulf of Oman with the Persian Gulf—have overshadowed the fact that the related issue of Red Sea security is far from resolved and is, in fact, becoming more dynamic.

The Red Sea–Suez link between the Mediterranean and the Indian Ocean is of equal strategic importance to global trade as the Hormuz choke point and is, through geography and common players, intrinsically linked with the Persian Gulf conflict.

But it is Ethiopia’s civil war, brewing with different factions and with varying intensity since the coup against Emperor Haile Selassie I in 1974, which is again moving in ways that could prove decisive.

Always, in the background, is the reality that Ethiopia could revive its historical influence over the Red Sea–Suez sea line of communication (SLOC).

Inside Ethiopia, the conflicts that have been raging since 1974 between different governments and different factions are at a new level.

The four different Fano opposition militia groups, representing different areas of the Amhara heartland, have been fighting against the central government of Prime Minister Abiy Ahmed Ali for several years. In early 2026, they came together with a united manifesto of their intentions. This has revived the momentum of the threat to Abiy’s Prosperity Party government.

A statement issued by a united Fano on Jan. 17, 2026 (Tir 9, 2018, in the Ethiopian calendar) noted:

“So that the Amhara struggle may become one, the leaders of the Amhara Fano National Force and the Amhara Fano People’s Organization, through a historic decision that demanded courage, open-heartedness, decisiveness, and trust in the people, have been able to make Fano unity a reality. ... We have designated one leader, one organization.”

Significantly, the leadership of the united Fano all titled themselves as “Arbegna,” a nod to the Arbegnoch, the Patriots, who, under the banner of Emperor Haile Selassie I, fought against the Italian invaders of Ethiopia from 1935 to 1941. This led to the ouster of the Italians at the Battle of Gondar, in late November 1941, the first major Allied victory of World War II, in the ouster of an Axis power (Italy) from territory it had seized.

Today, the result of the four separate Amhara Fano groups fighting against the Abiy government over the past several years was the creation—finally—of the Amhara Fano National Movement (AFNM) as an umbrella for all civil and military operations. AFNM, however, described itself as working on behalf of all Ethiopians desirous of the restoration of the multi-ethnic empire. (Ethiopia is home to some 80 ethnic and linguistic groups.)

Prime Minister Abiy, half-Amhara and half-Oromo, has consistently identified with Oromo causes and first fought against a Tigrean-dominated government of Ethiopia, and then against the Tigrean People’s Liberation Front (TPLF) militia, which was forced into a ceasefire—essentially a military surrender by the TPLF—in November 2022.

Abiy’s Prosperity Party government has increasingly been rejected by his original Oromo militant supporters, who regard him as “insufficiently Oromo” in outlook, and the government’s writ—or its area of focus—now rarely extends beyond the capital, Addis Ababa. The exception for Abiy’s travels is to some major projects such as the Grand Ethiopian Renaissance Dam in the Benishangul-Gumuz Region of western Ethiopia. The dam has been the subject of some hostility from Egypt, which sees its existence as infringing on Egypt’s “right” to control the waters of the Blue Nile, even though they originate in Lake Tana in the Amhara Highlands of Ethiopia, outside Egypt’s territories.

The AFNM designated its first chairman as Arbegna Zemene Kasse, and its military commander as Brigadier General Tefera Mamo.

Meanwhile, Abiy’s government has become increasingly dependent on support from the governments of the United Arab Emirates, Saudi Arabia, and, to an extent, Turkey and the PRC, each of which has a strong interest in dominating the Red Sea–Suez sea line of communication.

To a key extent, Abiy has focused on modernizing the capital, Addis Ababa—which now resembles a Dubai skyline—but has less control over the broader hinterland of Ethiopia.

At the same time, the government of Egypt is working to support various Ethiopian regional independence groups to destabilize Ethiopian control of the Blue Nile waters, which Egypt claims are critical to its national security and economic well-being. Egypt has maintained an on-and-off war approach to Ethiopia since the late 19th century and lost several major military confrontations with Ethiopia during the late 19th century. All of the supporting nations, as far as Abiy is concerned, also have interests that are inimical to Ethiopia’s revival of Red Sea influence.

It is important to note that Abiy has consistently ensured there is very little foreign news reporting from Ethiopia, which has had the positive benefit for the government that the civil wars, and the massive loss of life, have not been widely known around the world.

On the other hand, it has also prevented international investor and tourism interest in the country.

Now, Turkey, in particular, is vying for control of the region. It now actively controls the Somalian government and uses Somalian coastal territory for its military testing of ballistic missiles, among other things. It was particularly hostile to Israel’s diplomatic recognition of independent Somaliland, on the Red Sea coastline, in late December 2025.

Internally, in Ethiopia, the AFNM has been speaking—in its initial unity document—about representing the interests of all Ethiopian ethnicities and regions, not just the Amhara people and regions. It has been gathering significant military momentum, with additions to its ranks coming from defecting government forces. It did not, however, mention the restoration of Ethiopia’s last constitution from the pre-coup era, given that this was the last democratic reference point for the country.

All subsequent “constitutions” have been designed in the divide-and-conquer mode to keep ethnic groups separate and competitive, keeping various Ethiopian peoples as second-class citizens.

But what the AFNM has failed to do is to address meaningful international support or define the future shape of Ethiopia if it were to attain power. There has been no public discussion of its proposed economic or strategic policies. Only the adoption of the name of the Patriots—the Arbegnoch—gives any indication of its reflection of traditional Ethiopian values or historical Ethiopian geopolitical aspirations, which would include a reunification with Eritrea and the reacquisition of Ethiopia’s traditional Red Sea coastline.

It is significant, however, that Eritrea has been supporting the AFNM groups with arms and other support, and some Tigrean elements from the now-split TPLF have also supported Fano groups.

The AFNM operates freely in Amhara areas close to Addis Ababa and could certainly challenge Abiy’s forces in the capital. The other factor is the reporting that Abiy himself may be closer to the end of his leadership than the start of it. Change may not be imminent, but Abiy is becoming somewhat embattled.

But no wonder the world is oblivious to the wars of the Horn of Africa: The prime minister has consistently kept foreign journalists out of the country.

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

*  *  *

Tyler Durden Fri, 04/03/2026 - 23:00

America Dependent On Chinese Electrical Parts For AI Build-Out

The race for U.S. leadership in AI is hitting a tangible wall made of steel, copper, and imported circuit breakers. Trillions in planned spending on data centers are running up against chronic shortages of transformers, switchgear, and batteries, the unglamorous gear that actually delivers power to the racks. 

AI Takeover Complete: Data Center Construction Surpasses Office Construction For The First Time https://t.co/g5WxE9glY3

— zerohedge (@zerohedge) February 27, 2026

Domestic production has not scaled anywhere near fast enough, leaving developers with little choice but to lean on overseas suppliers, predominantly from China. The result is lengthening lead times that threaten to push back or cancel projects already baked into corporate budgets and national strategy.

Bloomberg reports electrical equipment, though a small slice of total project costs, is the component that can bring everything to a halt. Their leading example is the massive facility under construction in Abilene, TX, expected to draw as much as 1.2 gigawatts once it serves OpenAI.

For comparison, that's more energy than a Westinghouse AP1000 reactor can provide... 

We previously pointed out exactly this vulnerability back in August 2025 when Wood Mackenzie sounded the alarm on transformer shortages. The consultancy projected demand would exceed supply by 30 percent that year alone, with U.S. manufacturers able to cover only a fraction of needs and roughly 80 percent of units imported. We warned then that the AI boom was colliding with a grid already buckling under failed green policies and surging electricity loads, a dynamic that has only intensified since.

In January, we highlighted America’s aging power infrastructure, showing how data-center demand is now a measurable slice of national consumption and exposing decades of underinvestment that no amount of policy rhetoric can paper over. 

The current administration is doing what they can to try and ensure costs are not passed on to household consumers, with the recent agreement made between the White House and some of the biggest hyperscalers. But with news from Constellation that no matter how hard new energy generation is pushed onto the grid, long connection queues will destroy any possibility of the national grid finding balance.
 

Tyler Durden Fri, 04/03/2026 - 22:15

Forget Minnesota - The Amount Of Fraud Uncovered In California Is Staggering

Authored by Christopher F. Rufo, Ryan Thrope, Kenneth Schrupp & Haley Strack via City Journal,

California is a cash machine. The state collects some of the country’s highest income, business, and fuel taxes, and now spends more than $300 billion per year. And yet, everywhere you look, California seems to be falling apart.

The roads are crumbling. Mismanaged wildfires have turned neighborhoods into ash. Drug addiction and homelessness have metastasized, turning parts of Los Angeles and San Francisco into no-go zones. And the cost-of-living crisis is pricing middle-class taxpayers out of basic necessities like groceries and gas, even as the state spends billions on welfare programs that never seem to lift anyone out of poverty.

Californians are beginning to ask: Where is all this money going? On paper, it funds hospitals, universities, schools, prisons, infrastructure, and other public services. But beneath the surface, something else is happening that California Governor Gavin Newsom does not want you to see: massive, systematic, brazen fraud.

We conducted interviews with public officials, fraud experts, and political figures, and reviewed hundreds of pages of government reports, state audits, criminal indictments, and other public records on California fraud. From unemployment insurance and Medicaid to failed homeless initiatives and welfare programs, seemingly every state program has been compromised by criminals. The best estimates suggest that, on the governor’s watch, fraudsters, scammers, and organized crime rings have stolen at least $180 billion from taxpayers.

Welcome to Gavin Newsom’s empire of fraud.

Fourteen months after Newsom began his first term as governor of California, the Covid-19 pandemic swept the world. Roughly 2.7 million Californians eventually lost their jobs. The state’s economy went into freefall as its leaders imposed some of the country’s most restrictive public-health measures. In response to the crisis, Newsom sought to dump pallets of cash across the state—as quickly as possible.

One way to inject money was through California’s massive unemployment insurance program (UI). Unemployment insurance is administered by the state’s Employment Development Department (EDD), which can process billions of dollars in payments monthly. Before the state turned on the cash machine, however, experts had warned that the system was ripe for fraud.

Haywood Talcove, one of America’s leading fraud specialists and CEO of LexisNexis Risk Solutions for Government, was one such expert. “I was begging [federal officials] not to let the money go out like that, because it was going to be the biggest fraud in the history of our country,” he said. “Obviously, I wasn’t successful.”

For many reasons, California was particularly susceptible to the large-scale fraud schemes Haywood Talcove saw on the horizon. Not only did the state have some of the most generous welfare programs in the country; its bureaucrats had also failed to implement some basic fraud controls during Newsom’s tenure.

“They literally suspended all of the rules for the [unemployment insurance] program,” Talcove said. “[That made] it possible for anyone to get that benefit even if they weren’t entitled to it. It was very intentional. They knew what they were doing. But it caught up to them because it just got so out of control.”

The scams began almost immediately, with criminals from around the world reportedly siphoning cash from the program. In one case, a Romanian-led fraud ring orchestrated a $5 million unemployment-insurance scheme. Members allegedly “recruited potential [EDD-benefit] applicants through Facebook” and met them at “parks throughout Southern California to complete the application process,” according to the U.S. Attorney’s Office for the Southern District of California. “Applicants paid . . . a partial fee up front for assisting with fraudulent applications and another fee after applicants received EDD payments,” the office said. Many of the fraudsters wired the stolen funds to Romania.

Around September 2020, Fontrell Antonio Baines, a rapper from Memphis known as Nuke Bizzle, released a music video on YouTube entitled “EDD.” In the song, Baines bragged about ripping off California’s UI program. “Go to the bank with a stack of these,” Baines rapped, holding up EDD envelopes. Another rapper can be heard saying: “You gotta sell cocaine, I just file a claim.” All told, Baines obtained more than $700,000 in stolen funds using preloaded EDD debit cards. He pleaded guilty to federal charges.

Nor were these isolated incidents. A member of the SFV Peckerwoods, a California-based neo-Nazi gang, allegedly ran an unemployment scam during the pandemic. So did Michael Thompson, a one-time leader of the Aryan Brotherhood, who was eventually convicted. California’s prison population apparently got in on the action, too: the EDD allegedly paid out hundreds of millions of dollars in fraudulent claims in prisoners’ names, including those of at least 133 inmates on death row.

Remarkably, EDD not only failed regularly to cross-reference its unemployment payouts with a list of state prisoners, but it also had just two bureaucrats assigned manually to inspect reports of suspected fraud. State officials eventually admitted to having paid out approximately $20 billion in fraudulent claims during the pandemic, and to making an estimated $55 billion in improper payments. Talcove claims those figures don’t even tell the full story. “The state lost $32.6 billion dollars of taxpayer money to fraudulent applications,” he said. “In California, at one point, you had more people applying for unemployment insurance benefits than you had people over the age of 18.”

While Newsom has conceded that “bad actors” took advantage of the UI program, he has also defended his government’s record, saying they took swift action as soon as the alleged prison scheme surfaced. The EDD, for its part, has a webpage documenting its anti-fraud efforts. But any suggestion that California has fraud under wraps is contradicted by findings from its non-partisan state auditor.

Last December, the auditor reported that EDD’s UI program—which remains on the auditor’s “High Risk” list—had a fraud rate of 7.6 percent in 2023 and 7.9 percent in 2024. Applied to the state’s UI spending, those figures suggest more than $1 billion in stolen taxpayer funds since the pandemic. “EDD continues to have high rates of improper UI payments, including fraudulent payments,” the auditor wrote. “These inadequacies have resulted in a substantial risk of serious detriment to the State and its residents.”

While many states dealt with UI scams during the pandemic, California stands in a class of its own. At best, the EDD’s performance amounted to mass government incompetence; at worst, it reflects total indifference to fraud.

“This happens in every single state,” Talcove concluded, “but it happens a lot more in California.”

Newsom came to power vowing to pursue “guaranteed health care” for Californians. Under his leadership, the state extended Medi-Cal coverage to illegal aliens, covered sex-change surgeries for Medi-Cal enrollees, and offered “gender-affirming care services” to enrollees of “all ages.”

Total budgeted Medi-Cal spending—which includes federal, state, and local contributions—has more than doubled on the governor’s watch, rising from $93.5 billion the year before he took office to $196.7 billion in the current annual budget. During the same period, California’s resident population declined by 0.2 percent.

Experts have long warned of Medi-Cal’s vulnerabilities to fraud. The state auditor first designated “Medi-Cal Eligibility” as a “high-risk” issue in 2007 and has applied that label to it ever since. But the state government has made little progress in addressing what the auditor calls “eligibility discrepancies” that present a “substantial risk of serious financial detriment to the State.” California’s attorney general has conceded that “Medi-Cal fraud could reach billions of dollars annually.”

Newsom may have inherited a bad situation, but his actions have made it worse. During the Biden administration, California received federal approval to “increase, and eventually eliminate, asset limits” for some Medi-Cal recipients, a change that, according to Talcove, resulted in flood of improper payments. In addition, Medi-Cal suspended prior authorization requirements for certain health-care services and medications, creating yet another vulnerability for fraudsters to exploit.

In some cases, prosecutors say, that is precisely what happened. In one instance, Paul Richard Randall, Kyrollos Mekail, and Patricia Anderson allegedly “took advantage” of Medi-Cal’s loosened restrictions as part of a scheme that defrauded taxpayers of more than $178 million. The conspirators allegedly used a business called Monte Vista Pharmacy to process fraudulent prescriptions; Randall and others allegedly laundered the proceeds through third parties to fund kickbacks to Anderson and obscure the operation from law enforcement, according to a 2025 Department of Justice press release. Mekail had pleaded guilty to criminal charges in August 2024, and Randall is reportedly expected to do the same this year.

In-Home Supportive Services, a Medi-Cal sub-program, has also presented major fraud concerns. In 2009, former Governor Arnold Schwarzenegger estimated that IHSS fraud could be as high as 25 percent. That same year, a Sacramento grand jury report on the county’s IHSS program claimed IHSS fraud was “reported to be rampant and out-of-control.”

Yet, even in light of these worries, Newsom has dramatically increased funding for IHSS. Between Newsom’s first budget and his most recent proposal, the state legislative analyst estimates that total IHSS costs will have swollen by around 170 percent, with $33.4 billion proposed for the next fiscal year, including $12.5 billion from the state. According to recent estimates, taxpayers are funding nearly 800,000 IHSS providers, who offer caregiving, cooking, shopping, cleaning, and laundry services to elderly and disabled people. In about 70 percent of cases, providers and recipients are family members. According to co-author Schrupp’s reporting, the IHSS program is responsible for 41 percent of all “job gains” during the Newsom administration.

The IHSS program almost seems designed to facilitate scams. According to sworn testimony summarized in the Sacramento report, IHSS participants have falsely represented recipients’ needs; misrepresented hours worked timecards; and even secured payment after a recipient has died. The system operates largely on trust, with providers “working” in the privacy of the recipient’s home. The state’s IHSS protocols explicitly prohibit random unannounced home visits, which would be the best tool to uncover any potential rackets.

Oversight of the IHSS program is woefully inadequate. A 2021 Riverside County audit of the local IHSS program, for example, found county social workers had failed to process and report “integrity referrals” in a “timely” fashion. When complaints did reach county regulators, many, apparently, were reviewed by people with financial ties to IHSS. The report found that 41 of the 68 county staff at the Department of Public Social Services, which the auditor claimed is responsible for program oversight, were also IHSS providers—that is, they had a vested interest in protecting the system.

Beginning in 2024, federal officials announced multiple prosecutions for IHSS fraud. In one case, prosecutors alleged that Cindy Lynn Fromm claimed to have provided services for more than a year while the recipient was incarcerated. In others, prosecutors said that IHSS caregivers falsified timesheets and claimed to have provided services while beneficiaries were in hospitals, care homes, other facilities—or dead.

Experts who have studied the Medicaid system say that it has long been rife with fraud. Malcolm Sparrow, a Harvard professor who has advised the federal government on health-care fraud, suggested to Congress that “fraud and abuse” might represent somewhere between 10 percent and 20 percent of Medicaid spending. (Sparrow noted difficulties in attempting to calculate accurate “loss rates,” due to the fact that government studies “have been sadly lacking in rigor” and have “produced comfortingly low and quite misleading estimates.”) Brian Blase, president of the nonpartisan Paragon Health Institute, estimates a current Medicaid fraud rate of “15 to 20 percent of the entire program.”

Talcove estimates that the Medicaid fraud rate in California is 20 percent, which he calls a “very conservative” figure. Federal officials, however, believe that the current Medi-Cal fraud rate is even higher—and, given the state’s oversight failures and massive Medi-Cal expansion under Newsom, they are almost certainly right. Multiple high-ranking sources at the U.S. Department of Health and Human Services, which is currently probing fraud in California, told City Journal on the condition of anonymity that their initial estimate for Medi-Cal’s fraud rate since 2019 is 25 percent.

Based on state experts’ best guesses of annual Medi-Cal expenditures and applying a conservative, 15 percent fraud rate to each fiscal year since 2019, Medi-Cal has lost some $146 billion in taxpayer funds to fraud on Gavin Newsom’s watch.

Meantime, in Sacramento, state legislators have begun sounding the alarm. In February, Leticia Castillo, a Republican in the California State Assembly, proposed a bill that would create a Medi-Cal “fraud assessment task force” to “review current fraud prevention tools” and “evaluate how best practices from the federal government and other states could be applied in California.”

To date, Newsom has not supported the bill publicly.

The other major target for fraudsters is California’s expansive welfare state. As governor, Newsom has sought to project an image of a compassionate California that cares for its most vulnerable residents. The state is famously home to enormous wealth, but also to millions living in poverty, and, as of 2024, to more than 180,000 homeless people.

Responding to these realities, Newsom has unleashed a wave of spending on welfare initiatives. He has overseen much of a $24 billion state spend on homelessness projects, roughly doubled food-stamp benefits during the pandemic, and has maintained high levels of cash assistance. Just like unemployment insurance and Medi-Cal, though, these welfare programs proved easy targets for swindlers. The homelessness spending, for example, was a massive transfer of funds into a complicated web of non-profits and other contractors, with apparently little oversight. Unsurprisingly, fraud cases followed.

Cody Holmes served as chief financial officer of Shangri-La Industries, a Los Angeles–based affordable-housing developer. His company reportedly received nearly $26 million from the state to develop properties under a program aimed at housing the homeless. Prosecutors reportedly allege that Holmes, who pleaded not guilty, embezzled roughly $2.2 million to pay for “exotic cars” and monthly rent for a “6,500-square-foot mansion.” A City Journal review of political donations revealed Holmes was a frequent contributor to Democratic politicians and causes in California.

In a separate case, Steven Taylor was charged for having allegedly used “fake bank statements and false cash representations” to secure loans to fund his real-estate business. Taylor then allegedly used those illegitimately obtained loans to purchase an $11.2 million home, which he sold for $27.3 million to a publicly funded homeless-housing developer.

Earlier this year, Alexander Soofer, who served as the CEO of Abundant Blessings, a Los Angeles-based homelessness charity, was charged for having allegedly pocketed at least $10 million in homelessness funding to bankroll a “luxury lifestyle that included lavish vacations and designer clothes.”

None of these cases should come as a surprise. A 2024 report from the Inspector General Office for the United States Department of Housing and Urban Development found that California’s housing agency was not “adequately prepared to prevent, detect, and respond to fraud due to the lack of focus it placed on fraud risks and establishing a robust fraud risk management framework.” In addition, a 2024 report from California’s state auditor highlighted the government’s limited data on homelessness programs. For three of the five initiatives the auditor examined, it was “unable to fully assess” their success because of a lack of outcome data.

For many California watchers, the 2024 audit came years too late. In 2020, Representative Kevin Kiley, then serving in the California State Assembly, requested a similar report, he told City Journal, but state legislative Democrats rejected the proposal after Newsom intervened. “I brought the proposal to the state’s joint legislative audit committee, and it fell one vote short of approval after the administration came and testified against doing the audit,” Kiley said. “They likely knew what the audit would show and didn’t want taxpayers to get that window into how their money is, quite frankly, being squandered.”

Officials have also raised concerns about fraud in California’s SNAP benefits, officially known as CalFresh and more commonly called food stamps. As of last year, the state auditor had designated CalFresh as a “high risk” program. Annual state spending on food stamps has risen from roughly $8 billion in 2015 to nearly $16 billion under Newsom.

That expansion coincided with several fraud cases. In 2023, 15 people associated with a Romanian criminal ring were arrested for allegedly stealing CalFresh and other welfare funding, at least one of whom later pleaded guilty. The following year, seven people were charged for allegedly making “fraudulent cash withdrawals” as part of a multi-hundred-thousand-dollar theft of welfare benefits. In March, more than 50 people were charged as part of “a yearslong crackdown on organized theft rings” that included “many with ties to Romania.” The defendants allegedly stole millions in public funds by exploiting California’s Electronic Benefit Transfer system, which distributes benefits for programs like CalFresh.

Notwithstanding this steady drumbeat of fraud cases, at least one California Democratic lawmaker is pushing to lower penalties for those who steal from state welfare programs. In April 2025, State Senator Lola Smallwood-Cuevas sponsored a bill that would raise the threshold for felony welfare fraud from $950 to $25,000. The measure would also make it more difficult to charge perjury based on misstatements to county welfare departments. Republican State Assemblyman Carl DeMaio has said that if the bill becomes law, it will effectively “legalize welfare fraud” in California.

Federal prosecutors, however, are stepping up enforcement. Last year, Bill Essayli, first assistant U.S. attorney for the Central District of California, announced the creation of a federal task force to combat fraud and corruption in the state’s homelessness programs. The task force has already brought charges in several multimillion-dollar homelessness-fraud cases—and Essayli has vowed that more are coming. “California has spent $24 billion in the last five years on homelessness, and no one can account for where that money has really gone,” Essayli said in January. Gavin Newsom, he added, is the “king of fraud.”

We reached out to Newsom’s office for comment on this story. A spokesperson, whose signature featured “she/her” pronouns, called Kiley’s claims “ridiculous,” accused the Trump administration of “mak[ing] up numbers,” and suggested, remarkably, that California had “no missing homelessness funds.”

The culture of fraud in California is so pervasive that it has allegedly reached the governor’s own office. Between 2022 and December 2024, Newsom’s chief of staff was Dana Williamson. In November 2025, she was charged with fraud for allegedly “siphoning campaign and COVID-19 recovery funds into her and an associate’s pockets.” Two other “well-connected aides in state politics were also charged” and struck plea deals that reportedly confirmed the scheme’s existence.

Newsom’s office said they were made aware of an investigation into Williamson in late 2024 and immediately moved to place her on leave. When she officially left the governor’s office a month later, though, Newsom’s send-off message applauded her “insight, tenacity, and big heart,” while making no mention of the investigation against her. And even with the charges against her, Williamson walked away from government with a $50,000 payout for unused vacation time.

Williamson, who has pleaded not guilty, is not the only state official to be charged with fraud during the Newsom administration. In January, Phyllis Hope Stitt, a former EDD employee responsible for determining UI claimant eligibility during the pandemic, pleaded guilty to defrauding the program of more than $750,000. That same month, former Madera County benefits eligibility worker Leticia Mariscal was charged for allegedly embezzling $40,000 in food stamp benefits.

The pattern that emerges in California is not one of isolated breakdowns in oversight but of a vast system that almost seems to invite fraud. From widespread failures in unemployment insurance to alleged schemes targeting Medi-Cal to mounting concerns over homelessness spending, each case points to significant lapses by state officials charged with stewarding public funds. According to California Assemblyman David Tangipa, “Sacramento is pervaded by a culture of corruption.” And he points the finger right to the top: Newsom, he says, has helped “create[] an environment where corruption thrives.”

Still, California’s fraud crisis is not a lost cause, nor is it beyond correction. On March 16, President Donald Trump signed an executive order creating the Task Force to Eliminate Fraud. The effort, led by Vice President J.D. Vance, will “coordinate government-wide efforts to combat widespread fraud, waste, and abuse in Federal benefit programs.” A fact sheet released by the White House highlighted California as a state where “insufficient safeguards and weak oversight increase the risk of large-scale fraud.”

The Minnesota fraud scandal, brought to national attention by City Journal, offers a revealing case study of what can happen when a seemingly hidden problem—one long in plain sight—finally comes into view. The extent of fraud in Minnesota had been an open secret for years. But once the scandal drew national attention, investigations snowballed, ultimately derailing the political career of Tim Walz. It may seem unlikely today, but a similar outcome is possible for Newsom in California.

Newsom is not untouchable, and the scale of fraud in California appears far larger than in Minnesota. Despite his claim to have taken “decisive action” against one form of fraud, the broader problem is real and ongoing, and taxpayers, in California and across the country, have reason to be furious. Newsom will no doubt rely on charisma and partisan appeal to downplay the extent of these abuses. But listen closely, and you can still hear the California cash machine, steadily dispensing untold billions to criminals, scammers, and organized crime rings—funds taken from taxpayers and diverted from those most in need.

Christopher F. Rufo is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and the author of America’s Cultural Revolution. Ryan Thorpe is a technical writer at the Manhattan Institute. Kenneth Schrupp and Haley Strack are investigative reporters at City Journal.

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Tyler Durden Fri, 04/03/2026 - 21:30

Micro AI Sentry Guns May Be Next Layer Of Defense For Data Centers Against Kamikaze Drones

Submitted by Cameron Rowe, Co-Founder and CEO of Sentradel, 

Most people don’t think about what the “cloud” actually is. It’s a physical building full of servers storing everything from your medical records to your social media. Every Google search, every ChatGPT query, every hospital pulling up your health history routes through a data center. Right now, those buildings have about as much aerial protection as your local Costco.

In March 2026, Iranian Shahed drones struck three AWS data centers in the UAE and Bahrain. Multiple availability zones went down simultaneously, taking core services like EC2, S3, and Lambda offline, cascading outages to banks, payment platforms, and ride-hailing apps across the region. It was the first confirmed kinetic attack on a hyperscale data center run by a U.S. company. Shortly after, Iranian state media published a list of “Enemy Technology Infrastructure,” including Microsoft, Google, and Oracle facilities, painting targets on every major cloud provider in contested regions.

Yes, the cloud is distributed. Workloads can fail over. But data still lives somewhere physical, and partial corruption or destruction can be devastating in ways a temporary outage doesn’t capture. Medical records, financial transactions, and AI training datasets are worth hundreds of millions. When those are gone, they’re gone.

Global data center capex is approaching $1 trillion in 2026. The top four hyperscalers are collectively spending nearly $600 billion on infrastructure this year. That’s the physical backbone of modern life, sitting behind chain-link fences, with no ability to stop a drone costing between $30,000 and $80,000.

These facilities were never built to survive military threats. Security was designed around physical intrusion and cyberattacks, not one-way attack drones that cost a fraction of what they destroy.

Decentralization helps at the margins, but hundreds of billions of dollars poured into existing mega facilities can’t be shifted overnight. The real answer is layered detection and intercept: radar, RF sensors, EO/IR tracking, and kinetic or electronic defeat systems working together around these sites.

Autonomous counter-drone system

Watch: Autonomous counter-drone system

The military may eventually provide coverage for the most critical nodes, but they’ll prioritize their own assets first. And human life should come before server racks. That’s exactly why data centers need to be more proactive about protecting their own infrastructure rather than waiting for someone else to do it. Sentradel is already marketing counter-drone solutions to data center operators; it's likely to become more important over the next year as these kamikaze drones continue to improve rapidly in AI, speed, and payload. 

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Tyler Durden Fri, 04/03/2026 - 20:00

February Net Trailer Orders Down 43% As Bookings Fall 26%

Preliminary February net trailer orders fell by about 10,000 units from January’s 23,300, a 43% month-over-month decline, according to TheTrucker.com.

“Sequentially, a drop in net orders was expected, as the industry transitions from the strongest to the weakest order months of the annual cycle,” said Jennifer McNealy, director CV market research & publications at ACT Research.

“Trailer makers now will begin to take fewer orders and start to work down the backlog that grew during the peak of order season at the end of the previous year, which in this year’s cycle started and ended later than usual, as fleet decision-making hesitance into late 2025 delayed the cycle a bit and caused a high-side surprise in January.”

The report notes that February bookings totaled 13,200 units—26% lower than February 2025. After seasonal adjustment, orders come to 12,300 units. Final figures will be released later this month, with preliminary estimates typically within ±5% accuracy.

“We now question when we will see 20k-plus-unit order intake months again, and how quickly trailer OEMs will build down the still-thin backlog, particularly given concerns about the level of activity in the key freight-generating economic sectors that drive transportation demand,” McNealy said.

Tyler Durden Fri, 04/03/2026 - 19:20

Hegseth: Military Bases Are No Longer Gun-Free Zones

Authored by Catherine Salgado via PJMedia.ocm,

Secretary of War Pete Hegseth has overturned the controversial rule banning firearms from military installations.

Up until now, it was nearly impossible for servicemen to obtain permission to carry personal firearms on military posts and bases.  That is about the change.

“Not all enemies are foreign, nor are they all outside our borders,” said Hegseth in an April 2 video.

“Some are domestic. Confirming your God-given right to self protection is what I'm signing into action today. And I'm proud to do so.”

Our military installations have been turned into gun-free zones—leaving our service members vulnerable and exposed.

That ends today. pic.twitter.com/IQ204YepZ0

— Secretary of War Pete Hegseth (@SecWar) April 2, 2026

There have been multiple murders or mass casualty events on bases in the last decade, numerous drone incursions on military property, and a growing trend of foreigners breaching military bases, so there is good reason to think servicemen should be able to carry firearms on installations. Besides which, the overwhelming majority of mass shootings occur in gun-free zones. But Hegseth above all based his argument on the Constitution.

“Our great republic was founded on a simple yet bold idea: our rights, as citizens, are not granted to us by government, but instead, by God,” the secretary said.

“250 years ago, the Revolutionary War was fought to secure our God-given rights. The Second Amendment to our Constitution enshrines the right of all citizens to carry weapons to protect themselves, their families, and their fellow countrymen.”

And if any citizens can be trusted with guns, Hegseth argued, it is servicemen.

“The War Department's uniformed service members are trained at the highest and unwavering standards. These war fighters, entrusted with the safety of our nation, are no less entitled to exercise their God-given right to keep and bear arms than any other American,” he emphasized. 

Indeed, Hegseth stated, “Our warfighters defend the right of others to carry, they should be able to carry themselves. Recent events like what happened at Fort Stewart, Holloman Air Force Base, or Pensacola Naval Air Station have made clear that some threats are closer to home than we would like.”

In 2019, a member of the Royal Saudi Air Force committed a terrorist attack at Pensacola’s Naval Air Station that killed three sailors and injured multiple others. In August 2025, Sgt. Quornelius Radford shot five fellow soldiers at Georgia’s Fort Stewart. Most recently, on March 17, civilian Ashanti Stewart killed herself after shooting and injuring a service member at Holloman Air Force Base in New Mexico.

Hegseth reflected, “In these instances, minutes are a lifetime. And our service members have the courage and training to make those precious short minutes count. Before today, it was virtually impossible — most people probably don't know this — it was virtually impossible for War Department personnel to get permission to carry and store their own personal weapons, aligned with the state laws where we operate our installations. I mean, effectively, our bases across the country were gun free zones, unless you're training, or unless you are a military policeman, you couldn't carry.”

That is a potentially dangerous state of affairs, Hegseth argued. “You couldn't bring your own firearm for your own personal protection onto post. Well, that's no longer. The memo I'm signing today directs installation commanders to allow requests for personal protection, to carry a privately owned firearm, with the presumption that it is necessary for personal protection.” 

He clarified, “If a request is for some reason denied, the reason for that denial will be in writing and will explain in detail the basis for that direction. Again, the presumption is, service members will be able to have their Second Amendment right on post.”

That way, if there are more attempted terrorists and mass shooters, servicemen will have their personal firearms ready.

Tyler Durden Fri, 04/03/2026 - 15:00

Trump Proposes $1.5 Trillion In War Spending, 'Largest In Decades'

Via The Cradle

US President Donald Trump is asking Congress to boost military spending to $1.5 trillion for 2027, the largest such request in decades, while demanding cuts to domestic spending on social programs, AP reported Friday.

The White House released details of the desired spending increase on Friday as part of Trump's 2027 budget proposal. The proposal comes amid the US-Israeli war on Iran, which is costing US taxpayers over $11 billon for each week it continues.

US Army/AP image

Last month, the Pentagon proposed receiving an additional $200 billion to backfill munitions and supplies used in the war, which has killed 3,527 Iranians, including 1,606 civilians and at least 244 children.

While the White House is demanding huge sums for war, Trump's proposal would reduce non-defense spending by 10 percent, primarily by shifting some responsibility for social programs to state and local governments.

"We're fighting wars. We can't take care of day care," Trump said at a private White House event on Wednesday. "It's not possible for us to take care of day care, Medicaid, Medicare – all these individual things," he said. "They can do it on a state basis. You can't do it on a federal."

According to AP, "The president's annual budget more broadly is considered a reflection of the administration's values," but does not carry the force of law.

For Trump's spending proposal to take effect, Congress would have to approve it. The US is already heavily in debt, with the federal government spending nearly $2 trillion more than it receives in tax receipts each year. This year, the national debt surpassed $39 trillion, while the debt-to-Gross Domestic Product (GDP) ratio now exceeds 120 percent, surpassing the peak reached after World War II.

While Trump ran for president on a platform of ending US wars abroad and putting the needs of US citizens first, he has instead prioritized initiating foreign wars in support of Israel's project to expand its hegemony and territory in West Asia.

The war on Iran is providing a boon to US and Israeli weapons firms, who stand to earn hundreds of billions in additional profits. After meeting with major defense contractors at the White House in early March, Trump said the companies had agreed to quadruple production of "exquisite" and sophisticated defense systems that can repel ballistic missile attacks, such as Patriot missile batteries and Terminal High Altitude Area Defense (THAAD) interceptors.

Each THAAD interceptor missile costs roughly $12.7 million, and each Patriot PAC-3 interceptor costs about $3.7 million. The interceptors have been used in large quantities to intercept Iran's retaliatory missile and drone attacks on Israel and US bases in the Gulf.

Among the weapons firms that stand to benefit most from the war are RTX (Raytheon), which makes Tomahawk missiles; Boeing, which builds F-15 and Growler warplanes; and Lockheed Martin, which produces F-35 warplanes and Patriot and THAAD interceptors.

Other firms that benefit include Northrop Grumman, which builds B-2 stealth bombers and radar technology; General Dynamics, which produces submarines, bombs, and warheads for missiles; and L3/Harris, which makes solid rocket motors for THAAD missiles and electronics and sensors for reconnaissance aircraft.

US defense stocks have rallied strongly since February 2022, when Russia invaded Ukraine. Israel's genocide of Palestinians in Gaza starting on 7 October 2023 provided an additional boost, as did the US and Israeli war on Iran in June of last year and the anticipation of the second US-Israeli war on the Islamic Republic that began in February.

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Tyler Durden Fri, 04/03/2026 - 14:10

Oil Shocks & Recessionary Outcomes

Authored by Lance Roberts via RealInvestmentAdvice.com,

After more than three decades of watching oil markets upend economies, one pattern keeps repeating: investors learn the wrong lessons from the last shock. The 1973 OPEC embargo taught us that geopolitical disruptions are temporary. That lesson then got everyone killed, financially speaking, in 1979. The 2003 Iraq War produced only a mild oil bump and no recession, so traders got comfortable. Then 2008 happened. Today, with Brent crude having spiked over 60% since U.S. and Israeli strikes on Iran began in late February, the same dangerous reasoning is circulating again. That narrative is that this “event” is manageable and will resolve quickly. If that is the case, then the economy will absorb it.

That may indeed be the case. However, the conditions that determine whether an oil shock becomes a full recession are specific, quantifiable, and worth examining with clear eyes. That is what this analysis does.

Not All Oil Shocks Are The Same

The post-World War II era has produced a half-dozen oil price crises significant enough to reshape the global economy. They share a surface-level similarity: prices spike, headlines scream, and politicians rage. However, beyond those commonalities, they diverge dramatically in their underlying causes and economic consequences. (Read Energy Price as an Economic Indicator)

The 1973 OPEC Embargo stands alone as the archetype. OAPEC nations cut production and placed a deliberate embargo on the United States in response to U.S. support for Israel during the Yom Kippur War. In roughly 4 months, the price of crude oil rose from $3 per barrel to nearly $12 globally, a 300% surge. The U.S. economy, already running hot with inflation at 3.4%, could not absorb the blow. GDP contracted 0.5% in 1974. Unemployment climbed from 4.6% to 9% by May 1975. The Fed raised its benchmark rate from 5.75% in 1972 to 12% by 1974 and still could not contain prices. The result was stagflation: high inflation (above 9%), high unemployment, and slow economic growth. Those THREE factors are the ugliest combination in economics.

Note: That last sentence is crucially important. Headlines are currently filled with the term “stagflation.” As discussed in the linked article above, current economic data does not meet the definition of stagflation.

The 1979 Iranian Revolution delivered a second shock to an economy still bruised from the first. Iran’s oil exports, then running at roughly 5 million barrels per day, collapsed as internal chaos overtook the country. Unlike the 1973 embargo, this was not a deliberate strategy; it was a production collapse driven by revolution. The oil supply only dropped about 4% globally, but the market’s reaction doubled crude prices to nearly $40 per barrel within 12 months. The Iran-Iraq War, which began in 1980, compounded the disruption. The U.S. entered another recession. Fed Chairman Paul Volcker ultimately had to drive interest rates to 20% to break the inflation spiral.

The 1990 Gulf War shock was sharper but shorter. Iraq’s invasion of Kuwait removed roughly 4.3 million barrels per day from the market. Oil went from $15 to $42 per barrel in two months, a 75% spike. The U.S. entered a mild recession, with the S&P 500 falling about 21% from its peak. Crucially, the disruption lasted only months. Once coalition forces pushed Iraq back and Kuwaiti fields resumed production, prices fell sharply, and the economic damage was contained. This episode is the key comparative reference point for why duration matters so much.

The 2007-2008 oil surge is more complex. Prices rose nearly 100%, from roughly $50 to a peak of $147 per barrel in July 2008. The cause was not primarily a supply disruption; it was demand-driven, driven by a decade of explosive growth in China and by hoarding commodities in an unprecedented manner. But the shock landed on an economy already fracturing from the housing and credit collapse. The S&P 500 would go on to lose 55% from peak to trough. Attributing that devastation primarily to oil prices misreads the episode. The financial system’s breakdown amplified every other economic stress factor.

The Russia-Ukraine oil shock of 2022 drove Brent crude to $139 per barrel by March before falling back. The U.S. never officially entered a recession by the traditional two-quarter GDP definition, though it suffered a significant corrective event. The key difference was that the U.S. had by then become a net exporter of petroleum products, blunting the direct impact of prior shocks. However, the Fed was aggressively hiking interest rates to combat the surge in inflation resulting from the Pandemic-driven stimulus.

So, what does this mean?

What Separates The Killers From The Scares

The Federal Reserve Board’s own researchers concluded that there is no mechanical link between net oil price increases and subsequent recessions, even controlling for the magnitude of the spike. That statement sounds almost reassuring; however, what it actually means is more sobering. The same oil shock that causes a deep recession in one environment may barely register in another. The conditions surrounding the shock determine the outcome.

Five variables differentiate the recession-inducing shocks from the ones that economies absorbed:

• Duration and persistence of the disruption. The 1973 embargo lasted six months. The Iranian Revolution removed Iranian supply for much of 1979, then extended it by the Iran-Iraq War into the 1980s. These were multi-year disruptions that forced structural change, manufacturers to reprice inputs, households to slash consumption, and central banks to make crisis decisions in real time. The 1990 Gulf War spike lasted two months before Kuwait came back online. The economy absorbed a body blow, but not a sustained one. The difference between a broken rib and a severed artery is time and severity.

• Inflation conditions before the shock. The 1973 and 1979 shocks both hit economies where inflation was already elevated, and inflation expectations were untethered. The St. Louis Fed’s research found that the average real energy price increase preceding the four recessions between 1973 and 1991 was 17.5%, and in each case, the shock compounded pre-existing inflation dynamics. When workers expect prices to keep rising, they demand higher wages. When companies expect input costs to keep rising, they raise prices pre-emptively. The wage-price spiral becomes self-reinforcing. The 2004 to 2005 oil price increase was actually larger than the one that preceded the 2007 to 2009 recession, yet it did not trigger a recession. The difference was that inflation expectations were anchored in the mid-2000s, unlike in the 1970s.

• The role of monetary policy and its timing. Paul Volcker’s decision to raise rates to 20% was the necessary kill shot on 1970s stagflation, but it also pushed the economy into a severe 1981 to 1982 recession. The Fed’s response to an oil shock matters as much as the shock itself. An accommodative Fed that lets oil-driven inflation embed in the broader economy risks a worse outcome. A hawkish Fed that overreacts to supply-side inflation can trigger a recession independent of the oil shock itself. Neither 2003 nor 2010 saw the Fed forced into a crisis tightening cycle specifically because of oil.

• Energy intensity of the economy. This is the most structurally important factor for the current period. The amount of oil required to produce one unit of U.S. GDP has declined by more than 70 percent since the 1970s, according to World Bank data. As Paul Krugman noted in a recent analysis, the U.S. economy has roughly tripled in size since the late 1970s while consuming approximately the same total volume of oil. Every dollar of GDP today requires dramatically less energy than it did in 1973. As the IMF estimated, a sustained 30% increase in oil prices would reduce global GDP by up to 0.5%, which is serious but not catastrophic. The same shock in 1973 could cause damage multiple times that amount.

• U.S. net energy position. In 1973, the United States imported nearly everything it consumed. Today, the U.S. runs a net petroleum trade surplus — $58 billion in 2025, per Census Bureau data. Higher oil prices are a direct tax on importers. They’re a revenue windfall for exporters. The U.S. is now partially both, which fundamentally changes the calculus. Energy companies and the states where they operate benefit from price spikes even as consumers are hurt. That offset did not exist in any meaningful way before the shale revolution.

The 2026 Oil Shock – How Does It Compare?

On February 28, 2026, the United States and Israel launched coordinated strikes on Iran targeting leadership, security forces, and missile infrastructure. Within days, Iran retaliated with missile strikes targeting oil vessels and infrastructure throughout the Gulf region. The Strait of Hormuz, through which roughly 20 million barrels per day of crude oil and refined products normally flow, representing about 20% of global seaborne oil trade, effectively closed to normal traffic. Such headlines generally provide a springboard for more catastrophic views.

Those actions caused Brent crude to surge from around $70 per barrel before the conflict to $113.52 as of March 23. That is a 60-plus percent spike in under four weeks. In nominal terms, this is approaching the 2008 peak of $147 per barrel. The IEA’s 32 member nations coordinated the largest emergency drawdown of strategic reserves in the agency’s 52-year history, releasing 400 million barrels, more than double the volume deployed after the Russia-Ukraine outbreak in 2022.

So is this time different? In some ways, yes — and in ways that cut both directions.

The structural arguments for a more muted impact are real.

• The U.S. oil intensity of GDP has fallen roughly 70% since 1973.

• The U.S. is a net petroleum exporter.

• The strategic reserve architecture now exists specifically for scenarios like this.

• And inflation expectations, while elevated, are nowhere near the unanchored levels of the late 1970s.

Given this backdrop, Oxford Economics modeling suggests that global oil prices would need to average $140 per barrel for two months, alongside significant financial market tightening and deteriorating consumer confidence, to pose a clear recessionary risk.

On the other hand, the arguments for this being a more dangerous shock are equally serious. The Strait of Hormuz presents a physical chokepoint that cannot be bypassed through rerouting or sanctions workarounds, the way Russian supply was redirected after 2022. Roughly 80% of Asia’s oil imports transit that strait. Vietnam holds fewer than 20 days of reserve supply. The European Central Bank has already postponed planned rate cuts, raised its 2026 inflation forecast, and warned of the risk of stagflation for energy-intensive economies. Germany, the UK, and Italy face the highest recession exposure in Europe. And the U.S. economy entered this shock with a soft labor market, elevated consumer debt, declining consumer sentiment, and a stock market trading at historically expensive valuations before the conflict began.

Capital Economics recently projected that even in a contained three-month conflict scenario, Brent could average $150 per barrel over the next six months. In such a prolonged scenario, the IMF Managing Director warned of a meaningful global inflationary impact. Morgan Stanley also flagged that a conflict lasting longer than a few weeks would meaningfully raise recession probabilities through multiple channels: energy costs, inflation persistence, and tightening financial conditions.

This shock is bigger in scope than 1990, comparable in speed to 1973, structurally more like the physical supply shock of 1979 than the demand-driven surge of 2007, and occurring in an economy that is better insulated in some ways but already stressed in others.

The honest answer is that the outcome is genuinely uncertain and a situation that investors should not entirely ignore.

MARKET BEHAVIOR AND THE INVESTOR PLAYBOOK

History draws a sharp line between market outcomes in oil shocks that became recessions and those that did not. That line does not disappear just because it’s uncomfortable.

In the four oil-linked recessions between 1973 and 1991, the S&P 500 experienced average peak-to-trough declines of 20-48%. The 2007 to 2009 Great Recession, where elevated oil prices compounded financial system collapse, saw the index fall 55% from its highs. Recovery in these recession scenarios took anywhere from 126 trading days (post-COVID) to 895 trading days (post-Great Recession) to reclaim prior levels. That dispersion matters to any investor thinking about sequence-of-returns risk or near-term liquidity needs.

The non-recession oil shock episodes tell a different story. After the 2003 Iraq War oil spike, the S&P 500 delivered roughly 25% gains over the following year. Following the 2016 OPEC production cut cycle and resulting price rebound, equities posted approximately 19% returns in the subsequent 12 months. Kedia Advisory’s analysis of 7 oil spike episodes since 1986 found that the S&P 500 averaged a 24% return in the year following a major oil surge, with 6 of the 7 episodes producing positive forward returns. The one exception was 2008, when oil’s spike coincided with total financial system breakdown.

The critical investor lesson is that the oil shock itself rarely determines the market outcome. The recession does. And the recession typically follows when the shock is persistent, when it combines with pre-existing economic weakness, and when monetary policy cannot respond flexibly. That is precisely the risk matrix investors need to monitor right now.

What should investors do differently given this analysis? Three principles apply regardless of how the current conflict resolves.

• Manage duration risk in fixed income carefully. If this shock persists and inflation re-accelerates, the Fed will face pressure to keep rates higher for longer. That means Treasuries with long maturities carry more risk than they appear. Short-duration Treasuries and I-bonds remain the cleaner defensive position.

• Review energy exposure deliberately. Energy stocks historically outperform during sustained oil price shocks. The 2022 experience confirmed this as energy was the only S&P 500 sector to post positive returns for the year. But energy stocks often reverse sharply when the shock resolves, so this is a tactical, not a structural, position.

• Most importantly, do not let the shock force reactive decisions. The S&P 500 is already down about 7% month-to-date as of late March. A further 10 to 15% correction would not be historically unusual, even in a non-recessionary oil-shock scenario. For investors with properly structured portfolios, that kind of volatility is noise. For investors concentrated in high-multiple, rate-sensitive growth stocks, it may be the beginning of a more serious repricing.

The data across 50 years of oil shocks says this: if it’s a scare, markets often recover quickly, and investors who sold regret it. If it’s the beginning of a recession, the damage compounds for months before the bottom is clear. The difference between those two outcomes is driven by factors that are still unfolding and questions that need to be answered.

• How long will the Strait of Hormuz remain disrupted?

• Will inflation expectations remain anchored or begin to drift higher?

• And, most critically, will the Fed maintain its policy flexibility or lose it?

I’m watching all three closely, and so should you.

Tyler Durden Fri, 04/03/2026 - 12:30

Senior Iranian Official Involved In Reaching Out To Vance Severely Wounded In Airstrike

A top Iranian official who was involved in diplomatic outreach and indirect talks or messaging with the United States and Pakistani mediators was reportedly critically wounded in a US-Israeli strike. Kamal Kharazi, an 81-year-old senior adviser to Tehran and former foreign minister, lost his wife in the Wednesday strike on his home, state media has said.

Kharazi chairs Iran's Strategic Council on Foreign Relations and has been viewed as a potential backchannel negotiator involving Islamabad, but now he's been hospitalized with serious injuries, state media has also said.

"We have seen what looks like an assassination attempt against the former foreign minister, Kamal Kharazi … We don’t know why he’s been targeted. He has been gravely wounded, and his wife was killed," said an Al Jazeera correspondent in Tehran.

Iranian officials described to Mehr News Agency that Kharazi was overseeing outreach to Pakistan tied to a possible meeting with US Vice President JD Vance. A potential Vance trip to Pakistan was initially reported as possibly being in the works late last month.

But Middle East Eye has reported that Kharazi was not seeing much room for diplomacy as US-Israeli actions escalate to attacks on Iranian infrastructure and energy:

He told CNN in March, "I don’t see any room for diplomacy anymore. Because Donald Trump had been deceiving others and not keeping with his promises, and we experienced this in two times of negotiations – that while we were engaged in negotiation, they struck us."

If he succumbs to his wounds, Kharrazi would be the latest senior Iranian official killed since the war began.

In addition to Khamenei, top security adviser Ali Shamkhani, Revolutionary Guard commander Mohammad Pakpour, Armed Forces Chief of Staff Abdolrahim Mousavi, and Defence Minister Aziz Nasirzadeh were all killed on the first day of the war.

Ali Larijani, secretary of the Supreme National Security Council, was killed on 17 March, along with his son and one of his ⁠deputies. Intelligence minister and head of civilian monitoring, Esmail Khatib, was killed in an Israeli strike a day later.

Some analysts and pundits have accused Israel in particular of trying to sabotage any US-Iran talks, as the Netanyahu government wants to see complete regime collapse in the Islamic Republic.

“While we were engaged in negotiations, they struck us,” #Iran’s Kamal Kharazi told CNN on Mar. 9. Today his home was struck, wife killed, he sustained serious injuries. NYT reports Kharazi was discussing w Pakistan possible US-Iran negotiations w VP Vance pic.twitter.com/fv61PK8ES0

— Joyce Karam (@Joyce_Karam) April 1, 2026

Israel has also stood accused of seeking to create the conditions to lure the White House into authorizing 'limited' strikes which would inevitably become an open-ended war with no timeline.

* * * Meanwhile you can just order things...

Tyler Durden Fri, 04/03/2026 - 12:00

Poison Ivey: Chicago Bulls Release Forward After He Speaks Out Against Pride Month

Authored by Jonathan Turley,

This week, the Chicago Bulls waived guard Jaden Ivey for “conduct detrimental to the team.”

No, Ivey did not assault anyone or gamble on games.

He did not call for violence.

Ivey expressed his opposing religious beliefs, including criticizing the NBA’s Pride Month celebrations.

There is no question that private companies have the right to control employees’ on-the-job speech, including barring demonstrations such as kneeling during the national anthem. However, the Ivey controversy exposes the hypocrisy of sports associations and teams in the combination of corporate virtue signaling and athlete speech limitations.

Companies in various fields have asserted the right to condition contracts on the possibility of termination due to public behavior or comments that are detrimental to the company.

Notably, this was a player speaking off the basketball court who was deemed “detrimental” to the brand. The main concern is the lack of consistency. Actors such as Rachel Zegler have tanked their own movies to use their platforms to advance their own political viewpoints. Likewise, athletes have routinely espoused controversial views on racial divisions or law enforcement without losing their contracts. Recently, teams supported athletes espousing anti-ICE sentiments. In other words, it is not advocacy but the cause that these companies focus on when allowing or punishing speech.

At the same time, the NFL and NBA require players to wear and espouse views that some of them — like some in the nation — may oppose. Ivey was objecting that he does not feel that Pride Month is espousing “righteous” lifestyles. Ivey was not attacking the Bulls or the game. He was asserting that he does not support the virtues or values being endorsed by the company.

Many of us were offended by social media postings by Ivey in referring to Catholicism as a “false religion.” He also drew the ire of many by telling a fan that “God does not hear your prayer if you are a sinner.”

However, it appears that it was his criticism of the LGBTQ community and Pride Month that ended the matter with the NBA. Ivey objected to the advocacy required by the NBA, objecting “they proclaim it. They show it to the world. They say, ‘Come join us for Pride Month,’ to celebrate unrighteousness.”

The issue of “talent” becoming notorious has long been a focus of sports and entertainment contracts. Hateful or divisive public comments can impact a brand or corporate image. For example, a team does not have to continue an association with a racist spewing hateful remarks about fans.

The Ivey controversy should force a discussion of the countervailing responsibilities of the teams and the NBA. Some of us have previously criticized the virtue-signaling of associations like the NFL, with giant statements in the end zones and on players’ helmets. Many fans would like these teams to stop lecturing them and simply play sports. We do not need morality or civics lessons from the likes of NFL Commissioner Roger Goodell.

However, if the NFL and NBA are going to get into the business of shaping fans’ values, they may need to accept greater leeway for athletes who hold opposing values. Instead, they are expecting athletes like Ivey to effectively endorse approved values while barring them from expressing dissenting views.

This is not the first such controversy. Years ago, former coach Tony Dungy was the subject of a cancel campaign because he expressed his faith at a pro-life rally.

Former Washington Commanders defensive coordinator Jack Del Rio was punished for expressing a dissenting view of what happened on January 6th and what he viewed as the different treatment given to these cases, including excessive sentences.

Likewise, recently, Chicago Cubs player Matt Shaw was the target of a campaign to trade him after he attended the funeral of Charlie Kirk.

Sports organizations, like other businesses, have every right to bar protests and political statements at games. They should, however, apply the same standard to themselves. It is time to get virtue signaling and social statements out of sports. Teams need to stop picking sides on social and political issues while blocking opposing views from their athletes. Once out of the business of shaping public values and views, these teams will be in a better position to demand that athletes avoid controversial public statements that alienate fans or harm a brand.

Otherwise, teams could simply bar such commentary during games and allow athletes the same freedom of expression outside of the game that the teams enjoy during games.

None of this means that Jaden Ivey is right or admirable in his specific statements. It only means that, if teams want him to just play basketball, they should do the same.

Jonathan Turley is a law professor and the best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.”

* * *

Tyler Durden Fri, 04/03/2026 - 11:30

Services Sector Contraction In March Screams Q1 Stagflation

Following S&P Global's Manufacturing PMI's better than expected print higher (signaling resilience in the face of March's war in Iran), the data released this morning showed the US Services Sector experienced a contraction of activity at the end of the first quarter of 2026.

The headline S&P Global US Services PMI Business Activity Index recorded 49.8 in March, down from February’s 51.7 and lower than the earlier ‘flash’ estimate of 51.1.

It was the first decline recorded in over three years amid the weakest rise in new work since April 2024.

“The PMI survey data show the US economy buckling under the strain of rising prices and intensifying uncertainty, as the war in the Middle East exacerbates existing concerns regarding other policy decisions in recent months, notably with respect to tariffs," said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence

The service sector has slipped into contraction for the first time since January 2023, dragging the overall economy down to a near-stalled 0.5% annualized rate of growth in March...

Worst hit is consumer-facing service sectors where, barring the pandemic lockdowns, the downturn reported in March was among the steepest recorded since data were first available in 2009.

However, financial services and tech, both of which performed strongly last year, have shown some signs of weaker performance amid financial market volatility and concerns over higher interest rates, which have deterred investment.

“Key to the deteriorating growth trend is a pull-back in spending amid worsening affordability, with costs and selling prices surging higher in March amid spiking energy prices.

The survey data are broadly consistent with consumer price inflation accelerating close to 4% as firms increasingly seek to push through higher costs onto customers in the coming months. "

The stagflationary environment of stalled growth and surging price pressures pictured by the PMI presents a major challenge to policymakers, especially with the March survey also indicating falling employment.

"Clearly much depends on the duration of the conflict. The fact that business confidence has merely dipped and not slumped is a sign that businesses are hopeful of a swift resolution to the war," added Williamson.

"However, a concern is that the energy disruption unleashed by the war in the Middle East may well have an impact that lasts far longer than any actual conflict and may test the resilience of business and households over the coming months.”

Ironic that this occurred during a month that saw the economy add a surprising 178k jobs.

 

 

Tyler Durden Fri, 04/03/2026 - 10:15

March Jobs Shocker: Payrolls Soar By 178K Most Since 2024, Blowing Away All Estimates; Unemployment Rate Drops

We titled our nonfarm payroll preview post "a substantial bounce" and boy were we right: with consensus expecting a material rebound from February's negative print (which was revised as usual worse, from -92K to -133K), what the BLS reported instead was a huge beat to expectations of a 65K increase, with March jobs reportedly rising by 178K, the biggest increase since December 2024.

The number was driven entirely by a surge in private workers which added 186K in March, far above estimates of 78K. Government workers continued to drop, sliding by 8K in March and now negative 8 of the past 9 months,

This was not only higher than all estimates but was a 3 sigma beat to the median forecast, something we haven't seen in over a year.

In keeping with tradition, the previous month's data was revised sharply negative, from -92K to -133K, despite expectations of an upward revision. Yet for once there was an upward revision in the historical data: the change in total nonfarm payroll employment for January was revised up by 34,000, from +126,000 to +160,000, and the change for February was revised down by 41,000, from -92,000 to -133,000. With these revisions, employment in January and February combined is 7,000 lower than previously reported. (Monthly revisions result from additional reports received from  businesses and government

A quick look at the Household survey shows that while the establishment survey posted a solid increase of 178K, the Household increase declined again, dropping by 64K, the 3rd month in a row.

This means that despite all attempt to revise away the impact of illegal immigration, it still lingers with total number of payrolls (Establishment) running well ahead of employed workers (Household).

There was more good news: the unemployment rate actually dropped from 4.4% to 4.3% amid expectations of an unchanged print. This was despite a drop in the actual number of employed workers (per the Household survey) but offset by an even bigger drop in the civilian labor force, which declined by almost 400K, from 170.483MM to 170.087MM.

While the unemployment rate dropped, the labor force participation rate slumped to a 5 year low, largely due to the halt of illegal immigration, helping keep unemployment depressed.

Among the major worker groups, the unemployment rate for people who are Asian (3.7%) decreased in March. The jobless rates for adult men (3.8%), adult women (4.0%), teenagers (13.7%), and people who are White (3.6%), Black (7.1%), or Hispanic (4.8%) all posted a modest sequential drop. 

There was some good news for the Fed too, with a 0.2% increase in monthly average hourly earnings, below the 0.3% est and down from 0.4% in February, the annual increase in hourly earnings was just 3.5%, the lowest in 3 years, and below estimates of a 3.7% increase. It appears that the most important metric for the Fed - hourly earnings - is starting to take on water.

Yet while it was good for the Fed, it may not be good for others: with wage growth decelerating, the employment base - especially among native born workers (see below) remains narrow, reliant on public or quasi-public demand drivers rather than rate-sensitive private activity. 

A few additional highlights from the report:

• The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.8 million in March but is up by 322,000 over the year. The long-term unemployed accounted for 25.4 percent of all unemployed people in March. 
• Both the labor force participation rate, at 61.9 percent, and the employment-population ratio, at 59.2 percent, both at multiyear lows 
• The number of people employed part time for economic reasons, at 4.5 million, changed little in March. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
• The number of people not in the labor force who currently want a job changed little at 6.0 million in March. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force increased by 325,000 in March to 1.9 million. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey.
• The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, increased by 144,000 in March to 510,000. 

Taking a closer look at the Establishment survey, in March job gains occurred in health care, in construction, and in transportation and warehousing. Federal government employment continued to decline. 

• Health care added 76,000 jobs in March. Employment in ambulatory health care services rose by 54,000, reflecting an increase of 35,000 in offices of physicians as workers returned from a strike. Employment also increased in hospitals (+15,000). Over the prior 12 months, health care had added an average of 29,000 jobs per month. 
• Employment in construction grew by 26,000 in March but had shown little net change over the prior 12 months.
• Transportation and warehousing added 21,000 jobs, reflecting a gain in couriers and messengers (+20,000). Employment in transportation and warehousing is down by 139,000 since reaching a peak in February 2025.
• Employment in social assistance continued its upward trend in March (+14,000), primarily in individual and family services (+11,000).
• Federal government employment continued to decline in March (-18,000). Since reaching a peak in October 2024, federal government employment is down by 355,000, or 11.8 percent. Federal employees on furlough during the partial government shutdown were counted as employed in the establishment survey because they worked or received (or will receive) pay for the pay period that included the 12th of the month.
• Employment in financial activities edged down by 15,000 in March, reflecting a loss in finance and insurance (-16,000). Employment in financial activities is down by 77,000 since reaching a peak in May 2025.

Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; retail trade; information; professional and business services; leisure and hospitality; and other services.

The composition of the March jobs report was subpar: job growth was once again dominated by healthcare, a sector largely insulated from slowing growth or the Fed’s aggressive rate stance. Healthcare alone accounted for 76,000 of the 178,000 jobs added,more than 40% of the month’s total, driven in part by workers returning from a physician strike. Outside of that, there’s little to celebrate: construction showed modest gains, transportation remains well below its 2025 peak, and financial activities continued to shed jobs. Perhaps the best news was that government workers - which on the margin add little value, and are a drain of taxpayer resources - dropped again, now for the 6th straight month and 8 of the past 9.

Peeking below the surface of this month's report, we find that the quality distribution was solid, with +335K full-time jobs added, offset by a 188K drop in part-time jobs.

Last but not least, one of the most closely watched series, that of native vs foreign-born (mostly illegal) workers showed the biggest monthly increase in foreign-born workers since January 2025, which suggests that the strength in today's jobs report may have been derived from the one thing that Trump has been eager to do away with: illegal labor.

* * * 2 more in stock then it's gone

Tyler Durden Fri, 04/03/2026 - 10:01

 

 

The world of investing has changed over the first 30 years of my career. Perhaps the biggest surprise has been the gradual shift from traditional alpha chasing to what is best described as “Organizational Alpha.”

Today, I want to share some examples  how this evolution has manifested itself at our firm, Ritholtz Wealth Management.

From Portfolio Management to Full-Service Wealth Planning

In the early days, the core offering was portfolio management — globally diversified, low-cost, disciplined. That hasn’t changed. What has changed is everything we built around it.

Investors need more than just a good portfolio. They need someone to coordinate their entire financial landscape — investments, taxes, estate plans, insurance, equity compensation, retirement plans, and charitable giving.

This comprehensive approach has resulted from a deep understanding of client goals. We focus on achieving desired client outcomes.  Maximizing investment returns is only one part of that journey.

Orchestrating Tax Planning and Wealth Management

Many advisors treat tax planning as an afterthought. We witness so many errors, oversights, and missed opportunities from CPAs who fail to orchestrate investments and tax planning.  after reviewing thousands of client tax filings, we realized we needed to make this a central function, and Ritholtz Tax was born.

Tax planning and preparation are now critical parts of our service model and among the most meaningful ways we can improve client outcomes.

It’s not just about preparing taxes. It’s understanding the entirety of a client’s tax situation which informs how we deploy tax loss harvesting, estate planning, and gifting strategies. Every Ritholtz Tax client gets a pro-forma tax analysis completed during the tax year so our tax focused investment strategies have the time they need to deliver results to manage tax bills. Waiting until the tax year is over is simply too late.

Behavioral Management

I stumbled down the behavioral finance rabbit hole in the 1990s on a trading desk. It has been the single most important insight I have learned regarding investors’ success in markets. We became known as one of the earliest adopters of combining BeFi with a data-based approach to managing client wealth.

Avoiding mistakes is so much more important than stock-picking or market-timing for your long-term success. Whether it’s “Liberation day” market jitters or volatility caused by spiking oil prices, our clients depend on us to help process current events and understand the impact they may have on a long-term financial plan.

Corporate Retirement Plans

Our dedicated 401(k) team works with business owners and executives on plan development, design, and deployment. A well-structured retirement plan is one of the most powerful tools a company has — for recruiting, retention, and the long-term financial health of its employees.

Reach out to the team to learn about the impact of  the “mega backdoor Roth” on your long-term savings.

Concentrated Positions

When clients come to us with large, concentrated stock positions, they need more than just advice to “Diversify!” They need a thoughtful, long-term, tax-aware plan to reduce risk without causing an unnecessary tax event. Our team of advisors and tax pros work together to develop a custom strategy that balances diversification with the real-world tax consequences of unwinding those positions.

Diversifying concentrated positions without subjecting clients to substantial tax hits has become significantly easier with the introduction of long/short equity strategies.

Custom Indexing Through Canvas (Equity)

We were among the first adopters of O’Shaughnessy Asset Management’s direct indexing platform, Canvas (now part of Franklin Templeton). Today, we have over a billion dollars on the platform. Why? Because the results speak for themselves — clients on Canvas have experienced an average after-tax boost of ~80 basis points since inception, driven primarily by systematic tax-loss harvesting. We have a meaningful level of client assets in direct indexing strategies, and we expect that number to grow significantly in the years ahead.

Bespoke Fixed Income Strategies

The investment management industry has historically allocated to fixed income categories without much regard to the clients’ individual situations.

The relative attractiveness of municipal bonds, treasuries, and corporate bonds varies dramatically based on your specific circumstances. One investor’s optimal max after tax yield will be different than another’s.

We leverage portfolio management software through Canopy Capital to maintain a consistent exposure to a client’s individually optimized bond allocation, with the additional benefit of tax loss harvesting. It is a custom solution driven by your income, federal tax bracket, and state and city tax levels.

Long/Short Portfolios 

For clients looking to offset substantial capital gains taxes, we manage leveraged long-short equity portfolios through AQR and OSAM. These are systematic, tax‑aware strategies designed to harvest ongoing, usable tax losses while deferring taxable gains. These maintain moderate net market exposure, allowing the investor to compound more pre‑tax gains and pay less tax along the way — especially after a taxable liquidity event (selling a business, building, a highly appreciated home, or concentrated stock holding).

Employee Stock Option Plan Management

We work with many clients whose wealth has come from company stock: not only founders’ shares and employee stock options, but RSAs, RSUs, NSOs, and ISOs. The key to successfully navigating this alphabet soup of equity is to approach it from both a diversification and tax planning perspective.1

Trust & Estate Planning

Estate planning is one of those things we all know we need, but nobody wants to do. Our in-house estate planning attorney and team work to make sure your documents reflect your intent, your family is protected, and nothing gets overlooked.

Whether it’s straightforward succession planning or complex multi-generational wealth transfer, we view it as a vital part of the ongoing advisory relationship — not just a one-time discussion.

Private Investments

More and more people come to us with private investments – that’s why we added a full-time dedicated analyst to cover alts, including private debt, credit, hedge funds, and venture capital.

As our client base has grown in both size and sophistication, so did the demand for access to private markets. But as I noted earlier this month in Ill-Liquidity Premium, the median alternative fund is not worth the fees, illiquidity, and complexity.

We approach privates the same way we approach everything else — with a well-founded focus on what actually adds value after fees.

Non-Profit and Institutional Management

We partner with nonprofit organizations to navigate the unique complexities of institutional management. Our team serves as both a governing and managing fiduciary, handling investment policy development, design, and deployment. We also assist with major giving strategies, leveraging our in-house tax and estate planning professionals to help organizations facilitate planned giving and complex charitable contributions.

Financial Literacy — It’s in Our DNA

Education has been part of this firm’s identity since before the firm existed. Between The Big Picture, A Wealth of Common Sense, The Compound, Animal Spirits, Masters in Business, At the Money, and the dozens of other media channels our team contributes to, we reach millions of people every week. We believe that informed clients make better decisions, and better decisions lead to better outcomes. Financial literacy isn’t a marketing strategy for us — it’s a core value.

The Evolution of Ritholtz Wealth Management

When we started Ritholtz Wealth Management in 2013, the vision was straightforward: build a firm grounded in evidence-based investing, behavioral finance, and radical transparency. Two partners, $60 million in assets, and a shared conviction that Wall Street’s traditional model was broken.

Thirteen years later, we manage over $7.6 billion in client assets for 1000s of families. But growth in AUM only tells part of the story. The real evolution has been in what we do for the people who trust us with their finances.

What Comes Next          

The evolution of RWM has always been driven by one question: What else do our clients need? Every capability we’ve added — tax, estate, privates, direct indexing, retirement plans, non-profit services — started with that question. We expect the next decade to bring just as much change as the last, and we plan to keep building.

~~~

Speak With Us

Do you need a financial QB to manage all aspects of your financial life? If so, reach out. To learn about how RWM works with clients, reach out to us at Info AT RitholtzWealth.com, with the subject line “QB.”

If you live anywhere near the Bay Area, come speak to us at our upcoming event in San Francisco during the week 0of April 14-17th. Email us: Info AT RitholtzWealth.com, with the subject line “San Francisco.”

 

 

Previously:
Announcing: Ritholtz Wealth Management (September 16, 2013)

Introducing RWM’s Educator / 403(b) Division (December 4, 2015)

Inverting Wall Street’s Research Business Model (March 14, 2016)

What is Organizational Alpha? (February 7, 2017)

What is Your Value Proposition? (May 30, 2017)

Our Exorbitant Privilege (June 19, 2018)

What Should You Be Paying for Investment Advice? (April 9, 2019)

10 Things I Have Learned Launching RWM (September 16, 2019)

Accessing Losses via Direct Indexing (April 14, 2021)

Tax Alpha (April 14, 2022)

Lessons from Our Origin Story (September 17, 2021)

RWM Makes Barron’s Top 100 RIA Firms! (September 15, 2025)

 

 

__________

1.  We also eat our own cooking when it comes to Employee stock ownership: From day one, we built our firm as a partnership. Every year, new partners are offered the opportunity to purchase equity. Today, 29 employee-owners sit on the cap table — co-founders, financial advisors, and key personnel. Nobody was handed free stock options; everyone invested. This structure is the backbone of our succession plan and our commitment to remaining 100% independent.

The advisory firms that last are the ones where employees who do the work have real skin in the game.

 

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