Individual Economists

10 Weekend Reads

The Big Picture -

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

 

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

Oil Shocks & Recessionary Outcomes

Zero Hedge -

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 stagflationhigh 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

Zero Hedge -

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.

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

Zero Hedge -

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

Zero Hedge -

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

Zero Hedge -

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 Evolution of Alpha

The Big Picture -

 

 

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.

 

The post The Evolution of Alpha appeared first on The Big Picture.

Why Are They So Obsessed With This?

Zero Hedge -

Why Are They So Obsessed With This?

Authored by Steve Watson via Modernity.news,

As NASA’s Artemis II mission — the first crewed flight around the Moon in over half a century — gets underway, some in the media couldn’t resist injecting race into humanity’s greatest technical achievement.

Instead of celebrating the engineering triumph and the daring crew pushing the boundaries of exploration, certain outlets fixated on skin colour and “representation.” This is the same crowd that claims to champion science, yet they reduce every milestone to identity politics.

A Sky News reporter declared that the Apollo missions to the Moon “didn’t represent humanity because ‘Apollo was all white men…’” highlighting how even lunar history must now be filtered through the lens of grievance.

They couldn’t even exclude a manned moon mission, a stepping stone to colonising Mars, from this twisted obsession.

In a separate incident, a reporter attempted to goad NASA astronaut Victor Glover, pilot on Artemis II and incidentally the first person of colour to venture beyond low Earth orbit on a lunar mission, into giving a DEI soundbite.

Glover’s response, however, was a masterclass in sanity, as he responded, “I hope one day we can look at this as human history, not black history or women’s history.”

Glover’s crew — including commander Reid Wiseman, mission specialist Christina Koch (the first woman to fly this far), and Canadian Jeremy Hansen — represents the best of merit-based selection, not quotas. Yet the race-obsessed can’t let it stand on its own.

X users weren’t having any of the nonsense. One sharp reply nailed the absurdity: “No mission will ever represent humanity until we have the world’s first trans, non-binary, dual spirit, free Palestine astronaut of color!”

This fixation isn’t new. During Apollo, the focus was on beating the Soviets and landing on the Moon — full stop. No one paused the Saturn V countdown to lecture about demographics.

The 650 million people glued to their TVs in 1969 weren’t obsessing over the astronauts’ skin color; they were witnessing what free people, driven by merit and competition, could achieve. Now, as Artemis II builds on that foundation toward Mars, the same voices demand we rewrite the past to fit today’s dogma.

Real progress comes from excellence, not enforced outcomes. The Moon — and eventually Mars — doesn’t care about race quotas. It demands the sharpest minds and the boldest spirits. That’s the spirit that built Apollo and will get us back there and beyond.

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

* * *

Tyler Durden Fri, 04/03/2026 - 10:00

Hegseth Ousts Chief Of The Army As Iran War Persists

Zero Hedge -

Hegseth Ousts Chief Of The Army As Iran War Persists

The Pentagon shake-up under Trump has not ended, as on Thursday Pete Hegseth has dismissed Army Chief of Staff Gen. Randy George, asking him to step down into early retirement.

The move is unusual, given this is the head of the Army and the United States is past the one-moth mark in Trump's Operation Epic Fury. A reason hasn't been given as to what amounts to Gen. George being effectively fired.

CBS writes, "One of the sources said Hegseth wants someone in the role who will implement President Trump and Hegseth's vision for the Army."

A top defense official has also said: "We are grateful for his service, but it was time for a leadership change in the Army."

The chief of the Army is typically a four-year term, and already there's speculation over who will be the likely candidate to lead next:

The current vice chief of staff of the Army, Gen. Christopher LaNeve, who was formerly Hegseth's military aide, will likely be considered as a replacement. He previously served as the commanding general of the Army's 82nd Airborne Division from 2022 to 2023.

The U.S. Military Academy at West Point posted photos on social media on Thursday of George, saying he "shared experience-driven guidance with cadets preparing to lead" during a visit.

There's been some serious background controversy over the last weeks among top command ranks regarding the Trump admin's preferences:

Defense Secretary Pete Hegseth is blocking the promotion of four Army officers to be one-star generals, a highly unusual move that has prompted some senior military officials to question whether the officers are being singled out because of their race or gender.

Two of the officers targeted by Mr. Hegseth are Black and two are women on a promotion list that consists of about three dozen officers, most of whom are white men, senior military officials said.

Mr. Hegseth had been pressing senior Army leaders, including Army Secretary Daniel P. Driscoll, for months to remove the officers’ names, military officials said. But Mr. Driscoll, citing the officers’ decades-long records of exemplary service, had repeatedly refused.

As for Gen. George, he was commissioned as an infantry officer out of US Military Academy in 1988 and saw deployments in Operation Desert Shield, Operation Desert Storm, Operation Iraqi Freedom, and Operation Enduring Freedom. He later served as vice chief of staff of the Army from 2022 to 2023, before being nominated by Biden to become Army chief of staff.

Tyler Durden Fri, 04/03/2026 - 09:30

Cash Is King, Dowd Sees $10,000 Gold As The Credit Market "Is Starting To End The Party"

Zero Hedge -

Cash Is King, Dowd Sees $10,000 Gold As The Credit Market "Is Starting To End The Party"

Via Greg Hunter’s USAWatchdog.com,

Wall Street money manager and financial analyst Ed Dowd of PhinanceTechnologies.com warned at the end of January that the “Credit Destruction Cycle” was showing up in something called private credit. 

Dowd was worried about extreme risk in the economy, especially with all the growth in lending in the last two years coming from private credit. 

Has this gotten better or worse? 

Dowd says, “It’s gotten worse, and it has spread..."

"The number if credit funds that have gated their investors keeps growing.  This is important because high net worth individuals, insurance companies and pension funds put millions of dollars in these private credit funds and now they want to redeem them, and there is a gate.  The last two years of loan growth in the economy was from banks loaning to private credit. . .. There have been earth shaking events in private credit land.  That started a cascading effect of people becoming worried about their private credit fund. 

Then, redemptions started, and some funds like Blue Owl have taken massive hits.  They had to gate their fund.  Apollo gated their fund.  Black Rock gated their fund, and KKR has gated their fund. 

So, there is a lot of gating going on. 

Basically, this is the beginning of the credit cycle rolling over. 

This starts in the most egregious sector, which looks like private credit. . .. 

So, the credit market is starting to end the party, and we are going to see this cascade throughout the whole economy.”

The Iran war just turbocharges the entire negative global scenario. 

Dowd says, “You layer on top of this the Iran war and that only hastens the whole thing unless there is a quick resolution.”

Isn’t Iran getting creamed financially speaking?  Dowd say:

“Financially speaking, yes, but we have no way to know what’s going on or who they are negotiating with.  It’s kind of an information black hole.  There is propaganda from our side and their side. 

My hope is that this is resolved as quickly as possible without troops on the ground. 

If we got that, and the Strait of Hormuz is opened rather quickly, there would be a rally in our markets, but the forces bearing down on the economy are going to happen regardless. 

There will be a temporary relief rally, but what I am predicting is still going to roll through the system. 

If there is no quick resolution, then this will hasten everything because there will be global demand destruction. 

This will hasten a global recession that I see coming no matter what.”

Dowd put out a report forecasting what’s coming in 2026.  Any way you cut it, not many will escape the pain, and there is a lot left to come in Dowd’s 2026 forecast.  Dowd says, “I am in a very conservative mood..."

"Our call from our economic report is risk assets are going to be under pressure. 

Cash is king in this scenario. . .. We think inflation is going to be coming down.  Even though we call this an oil price shock,  it’s not an inflation shock because demand destruction will eventually come. 

Inflation will go up in the near term, but inflation will roll over as everything else will roll over price wise, especially the housing part of the CPI.  That is already under pressure. 

Rents have been coming down, and home prices always follow.  It is now cheaper to rent a house than to own a house. 

Home prices are going to come down, and that will cause a recession in and of itself. 

You throw a bursting AI bubble on top of that and a Chinese economy that is going into the tank this year and you get a global recession...

...Let me remind you, private credit already started to have its problems before the war even started with Iran, and private credit is the canary in the coal mine.”

Dowd is still forecasting gold to hit $10,000 per ounce in the next few years (2030) and is also still bullish on silver long term.  Dowd goes into detail about the severe problems China is facing with its economy and does not see how it can be a global financial superpower anytime soon.  This is fascinating analysis on China’s financial situation that everybody should listen to.  (Order the full China report here.)   Like Martin Armstrong, Dowd is also a big fan of stocking up on food and water in case of supply chain disruptions.

There is more in the 47-minute interview.

Join Greg Hunter of USAWatchdog as he goes One-on-One with money manager and investment expert Ed Dowd as he explains why we are starting to see big trouble for the US economy.   Dowd predicted this was coming in January with his report called “US Economy Outlook 2026.”

Tyler Durden Fri, 04/03/2026 - 09:00

US Futures Drop Ahead Of Payrolls With Most Markets Closed

Zero Hedge -

US Futures Drop Ahead Of Payrolls With Most Markets Closed

US equity futures dipped ahead of today's payrolls report in a holiday-shortened session, with most cash markets including US stocks closed globally for Good Friday. Sifma, the US financial markets trade association, recommended trading of dollar-denominated bonds during US hours only and a 12pm New York time stop. As of 8:15am, S&P and Nasdaq futures are down 0.2%. Bonds dipped modestly in a holiday-shortened session, the 10Y yield rising 1bp to 4.31%. The dollar was mixed against its Group-of-10 peers.  Oil rallied above $110 a barrel Thursday after Trump issued fresh threats against Iranian infrastructure in an effort to pressure Tehran in negotiations. West Texas Intermediate surged 11%, while the global Brent benchmark settled near $109. The jobs report is the main event on today's calendar and is due at 8:30am (preview below). 

Iran targeted more sites in Arab Gulf states overnight and into Friday. A container ship signaling French ownership exited the Strait of Hormuz, in what appeared to be the first known transit by a vessel linked to Western Europe since the Iran war all but shuttered the vital waterway.

The main highlight today is the March jobs report (full preview here) which is expected to show a sharp rebound from February weather - and strike -related weakness, with a median forecast for nonfarm payrolls change of 65k; Bloomberg Economics anticipates a 150k rebound

With most of Europe closed for Good Friday, Asian stocks were the only action overnight and rose at the end of another volatile week with a report leading to some optimism that more traffic may be allowed through the Strait of Hormuz. Regional shares followed a recovery in US equities Thursday on news that Iran is drafting a protocol with Oman to monitor traffic through the key waterway, having effectively shut it down since the start of the war. Trading was light in Asia with many key markets shut for holidays. 

MSCI’s benchmark Asia Pacific Index gained 0.7%, with South Korea’s yoyoing Kospi rising 2.7%, and Japan’s Nikkei 225 Stock Average climbing 1.3%. China’s CSI 300 Index reversed an earlier advance to drop 0.9%.

“The improvement in US risk appetite has spilled over” into Asian equities, said Hitoshi Asaoka, chief strategist at Asset Management One Co. in Tokyo. “While oil prices may not fully return to previous levels, if they do partially normalize, there is considerable room for a rebound from a liquidity perspective.”

On Thursday, US stocks started off deep in the red after Trump’s speech late Wednesday did little to reassure investors that the war was nearing a swift resolution, though he had previously set a two-to-three-week timeline for ending the conflict. However, they subsequently soared on some speculation transit through the strait may soon be allowed. The higher close for the S&P 500 on Thursday ran counter to a pattern of late-week selloffs that have hit the market ever since the war began, as nervous investors unwind positions that could be upended if weekend developments threaten to worsen the hit to the global economy.

“While assets gyrate on every new headline, until a clear agreement is achieved with a palatable plan for reopening the Strait, there’ll be downward pressure on economic growth and upward pressure on headline inflation,” said Max Gokhman, deputy CIO, Franklin Templeton Investment Solutions. “That spells indigestion for both equity and bond investors.”

The dollar was mixed against its Group-of-10 peers. US stock-index futures, also open for an abbreviated session, declined, with contracts on the S&P 500 down by 0.3%.

In rates, treasury futures held small losses ahead of the release of March employment data: benchmark yields were higher by 1bp-2bp, with the 10Y yield rising to 4.3128% after ending Treasury little changed having erased oil-led increases amid increasing investor focus on eventual recession risk from the oil shock.

Oil rallied above $110 a barrel Thursday after President Donald Trump issued fresh threats against Iranian infrastructure in an effort to pressure Tehran in negotiations. West Texas Intermediate surged 11%, while the global Brent benchmark settled near $109.

“With US payrolls coming up and a holiday ahead, markets are wary of what could happen over the weekend — especially the first weekend after” Trump’s prime time speech on Wednesday, said Rina Oshimo, a senior strategist at Okasan Securities Co. in Tokyo. “If attacks escalate or retaliations occur, oil prices could remain elevated for longer.”

JPM interest-rate strategists advised taking profit on their March 20 recommendation to buy 2-year Treasuries at 3.891%, which was based on the potential for higher oil prices to stoke recession concerns; the yield ended Thursday just below 3.80%, and the exit call was made because of the risk that strong March employment data will erode expectations for a Fed rate cut this year. Trading of CME interest-rate futures is scheduled to end at 11:15am, and Bloomberg dollar-denominated bond indexes will be priced at 1pm based on prices collecting through 12pm. Oil markets also are closed; oil prices have been a principal driver of bond yields since the surge unleashed by the Feb. 28 start of the US war against Iran, and US benchmark WTI crude futures closed Thursday at the highest level since 2022

The main even on today's calendar is the March jobs report is expected to show a rebound from February weather- and strike-related weakness, with a median forecast for nonfarm payrolls change of 65k. US economic data calendar also includes March final S&P Global US services and composite PMIs; no Fed speakers are slated.

Tyler Durden Fri, 04/03/2026 - 08:24

Iran Attacks Kuwaiti Desalination Plant, Bringing Gulf Water Supplies Into Focus

Zero Hedge -

Iran Attacks Kuwaiti Desalination Plant, Bringing Gulf Water Supplies Into Focus

Just three days into Operation Epic Fury, we pointed out what may be the more consequential second-order risk, arguably even more important than the risk of data centers getting bombed (identified a month earlier): Are desalination plants the next targets in the U.S.-Iran war?

Not even a week after we raised that question, the first worst-case scenario emerged. On March 8, one week into the conflict, an Iranian attack drone struck a water desalination plant in Bahrain.

Fast forward to Friday morning, on the conflict's 35th day: Kuwaiti authorities claimed Iranian forces targeted a power and desalination plant, sounding even more alarm bells that civilian infrastructure is increasingly moving into the crosshairs.

Bloomberg quoted Kuwait's Ministry of Electricity, Water and Renewable Energy as saying an Iranian strike damaged components of the water desalination plant.

This suggests Tehran has exposed the vulnerability of critical water infrastructure across a region that relies heavily on these facilities, which remove salt and impurities from seawater or brackish water for drinking water and other agricultural or industrial uses.

Al Jazeera's Mohamed A. Hussein recently explained why Gulf states heavily rely on water desalination plants:

The Gulf states are deserts with no permanent rivers. While they lack rivers, they do have seasonal waterways called wadis, which carry water during rare rainfall. These nations rely primarily on groundwater and desalination to supply water to their rapidly growing cities, industrial zones and agricultural areas.

The map below shows just that:

Hussein noted:

The Gulf countries produce roughly 40 percent of the world's desalinated water, operating more than 400 desalination plants along their coasts.

The reliance on desalination plants is extremely high across the Gulf:

Beyond the attack on Kuwait, Iranian forces also targeted Habshan, the UAE's massive onshore gas-processing hub operated by ADNOC Gas in Abu Dhabi, forcing it to shut down operations.

The problem now, as the worst-case scenario emerges, is that if more Gulf desalination plants are damaged or taken offline, it could easily spark a humanitarian crisis.

Tyler Durden Fri, 04/03/2026 - 08:00

Abu Dhabi Halts Operations At Main Gas Plant After "Falling Debris" From Iranian Strike

Zero Hedge -

Abu Dhabi Halts Operations At Main Gas Plant After "Falling Debris" From Iranian Strike

Operations at Habshan, the UAE’s massive onshore gas-processing hub operated by ADNOC Gas in Abu Dhabi, were halted on Friday after local authorities said a fire broke out at the facility due to "falling debris" from a "successful interception by air defense systems" of an Iranian air-delivered munition. 

"Abu Dhabi authorities are responding to an incident of falling debris at the Habshan gas facilities following a successful interception by air defense systems," the UAE's Emergency, Crisis, and Disaster Management Center wrote on X.

The UAE's emergency crisis center continued, "Operations have been suspended while authorities respond to a fire. No injuries have been reported."

Habshan is at the core of the process by which raw natural gas from Abu Dhabi’s upstream energy assets is cleaned, treated, and split into usable products for domestic use. The facility produces gas for domestic use, along with NGLs, condensate, and sulfur. It's also the starting point of ADNOC's crude pipeline to Fujairah, the world's second-largest bunkering hub and a critical energy export terminal that bypasses the Hormuz chokepoint.

ADNOC states on its website that Habshan serves utilities and industrial customers across the UAE, including desalination and steel, and that it supplies about 60% of the country’s natural gas requirements.

Habshan ranks among the world's top gas-processing complexes and comes weeks after Iranian strikes on QatarEnergy’s massive LNG complex, which will require $20 billion in repairs and years to fix and will curb about 12.8 million tons per year of LNG.

Last week, QatarEnergy declared force majeure on some of its long-term LNG contracts, including those for customers in Italy, Belgium, South Korea, and China, effectively canceling contractual obligations.

On top of LNG supplies being disrupted across the Gulf region, the Hormuz chokepoint remains clogged, and as JPMorgan's top commodities expert warned days ago, the energy shock is first hitting Asia, then Africa and Europe, before settling in the U.S., but mostly California.

Source

The Gulf energy shock is also forcing countries across Asia and Europe to switch power plants to coal to avert soaring power prices. The LNG disruption is also sparking fertilizer shortages across critical agricultural belts worldwide, which could crimp harvests later in the year.

Gas research firm Criterion Research’s early read is that, once the fog of war clears across the Gulf energy complex, the clearest beneficiaries may be LNG exporters along the Gulf of America for years to come. 

Tyler Durden Fri, 04/03/2026 - 07:15

"Make A Deal Before It's Too Late": Trump Threatens Tehran (Again) As Iran/Oman Draft Protocol To Re-Open Hormuz

Zero Hedge -

"Make A Deal Before It's Too Late": Trump Threatens Tehran (Again) As Iran/Oman Draft Protocol To Re-Open Hormuz Summary
  • World's most important oil price hits record high as Trump threatens Iran: "make a deal before it's too late"

  • Oil drops on reports of Iran-Oman coordination to reopen strait. Iran issues Israel/Gulf logistics hubs target list; IRGC targets Amazon Cloud computing center in Bahrain

  • US intelligence assessments say Iran is not ready to negotiate given it believes it has the strategic upper-hand, and doesn't believe Trump is 'serious' about talks: NYT

  • Highest bridge in Iran, connecting Tehran and Karaj, destroyed - amid reports of expanding attacks on civilian infrastructure. Iran threatens Port of Haifa in response.

  • UK's Starmer chairs virtual summit of over 30 countries to discuss methods of how to reopen Hormuz Strait

  • No mention of ceasefire while vowing to keep hitting Iran 'extremely hard' in Wed. night Trump speech. Escalating tit-for-tat overnight strikes.

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President Trump Issues Another Threat: "Make A Deal... Before There's Nothing Left"

President Trump just issued another threat after bragging about blowing up Iran's highest bridge:

"The biggest bridge in Iran comes tumbling down, never to be used again — Much more to follow!"

Then he followed up with his ubiquitous FULL CAPS threat:

" IT IS TIME FOR IRAN TO MAKE A DEAL BEFORE IT IS TOO LATE, AND THERE IS NOTHING LEFT OF WHAT STILL COULD BECOME A GREAT COUNTRY!

President DONALD J. TRUMP"

The Wall Street Journal writes: "According to Iranian state media, the strikes killed eight people and wounded almost a hundred others, while also partially destroying the structure."

This helped send Dated Brent, the price of shipments bought and sold in the North Sea and the world’s most important price for real-world oil barrels, reached $141.37 a barrel, the highest level since 2008...

So much for the calming tone so many hoped for before the long weekend.

* * *

'Target List' of Logistical Hubs; IRGC Initiates Strikes on Amazon Cloud Center in Bahrain

Iran says this is in response to its tall B1 bridge being attacked earlier in the day: Top targets include critical north-south rail chokepoints in Israel, especially the Yarkon Bridge, reportedly carrying most heavy IDF transport, and the Jezreel tunnel, seen as the only key route for moving fuel and ammunition inland from the Port of Haifa.

Iran media also listed an alternative logistics lifeline: the overland corridor stretching from Jebel Ali through Saudi Arabia and Jordan into Israel. With sea routes under pressure, this desert corridor has become essential to Israeli logistics.

Other reported targets include the Port of Haifa itself - the country’s primary trade and maritime hub - and the Rehout station, a central node channeling cargo to frontline areas. A large oil refinery in Haifa has already been attacked (more than once) earlier in the war. Gulf targets have also been added to the list, after on Thursday the IRGC said it initiated an attack on an Amazon Cloud computing center in Bahrain.

Iran, Oman Reportedly Coordinating on Reopening Strait of Hormuz

Emerging headlines say that Iran is drafting a protocol with Oman for the potential reopening of Strait of Hormuz traffic, per state IRNA: 

Kazem Gharibabadi, Legal and International Deputy of the Ministry of Foreign Affairs, pointed out that even in peaceful conditions, the traffic of ships should be monitored and coordinated with the coastal countries, Iran and Oman, and said: "Of course, these requirements will not mean restrictions, but to facilitate and ensure safe passage and provide better services to ships that pass through this route."

And Bloomberg also confirms: "Iran is drafting a protocol with Oman to monitor traffic through the Strait of Hormuz, state-run IRNA reports, citing Iran Deputy Foreign Minister Kazem Gharibabadi."

Gharibabadi continued in his remarks:

"I must emphasize that the Strait of Hormuz was open and traffic was easy. It is natural that when we face an act of aggression, we face major problems and this is the result of the act of aggression. We are now at war and we cannot expect the pre-war rules to govern war conditions. We are facing two aggressor countries and some other countries that support aggression, so naturally restrictions and prohibitions should be imposed".

Iran has also said it is readying tolls for passage, which could be something like $2 million per vessel. After earlier headlines suggesting a prolonged war (and thus Hormuz closure), this note of optimism has pushed oil prices down once again:

Tit-For-Tat Escalation of Strikes in Overnight Hours

By many accounts the overnight hours saw one of the largest Iranian missile attacks on Israel, with multiple salvos sent since midnight and many cluster munitions. Several Israelis were wounded, including reports of children and infants. Via Bloomberg:

After US President Trump last night pledged more aggressive attacks in coming weeks, Iran’s army chief ramped up threats, saying that “if the enemy attempts a ground operation, not a single person should survive,” as the US ordered thousands of troops to the region.

One particularly alarming escalation is that the Houthis have now joined in on Iran's ballistic missile attacks, with the Yemeni group said to be coordinating the strike waves with Tehran, and alongside Hezbollah in the north. At least 50 rockets were fired out of southern Lebanon alone on northern Israel and Haifa, resulting in some injuries but no reports of fatalities. Israel has hit back, bombing at least 40 Hezbollah infrastructure targets in Lebanon in the past 24 hours, killing 10 operatives - per regional military reports.

Among overnight Iranian targets included a Ground Forces base, ballistic missile storage, and sites near Isfahan, international reports say. There have also been reports of recent strikes on Jordan, northern Iraq, as well as the Gulf states, with Qatar demanding that Tehran pay compensation for its immense losses and damage.

Oil Prices Surge After Trump Vows To Hit Iran 'Extremely Hard' In Speech

"Tonight, Iran’s navy is gone, their air force is in ruins, their leaders, most of them… are now dead. Their command and control of the Islamic Revolutionary Guard Corps is being decimated as we speak," President Trump stated in his address from the White House last night. "Their ability to launch missiles and drones is dramatically curtailed, and their weapons factories and rocket launchers are being blown to pieces, very few of them left." Trump said further that the United States is "on the cusp of ending Iran's sinister threat to America and the world."

He declared that Israel and the United States are nearing their main goals in the war against Iran and that the conflict would end soon, though he gave no clear timeline. He repeatedly emphasized the war was close to finishing in his address, but didn't define what 'mission accomplished' would look like exactly. The key thing is that no concrete timeline was given.

In the speech, Trump highlighted the "swift, decisive and overwhelming" blows delivered to Iran over the past four weeks, calling them "victories like few people have ever seen before." He did not specify when operations would end but said the US would strike Iran "extremely hard" over the next two-three weeks while negotiations continue. There was more talk of sending Iran "back to the stone age" - after in the past declaring that the US would "help" them:

"We are going to hit them extremely hard over the next two to three weeks. We're going to bring them back to the Stone Ages, where they belong."

The result of all this was to send oil prices back near the highs since war started...

Iran is continuing to target US bases and assets across the region - even in Jordan and Israel (tech companies):

NYT: US Intelligence Contradicts Trump, Says Tehran Not Ready to Negotiate

The New York Times has meanwhile reported that several US intelligence agencies believe Iran is currently unwilling to engage in serious negotiations. "The assessments say the Iranian government believes it is in a strong position in the war and does not have to accede to America’s diplomatic demands, the officials said. And while Iran is willing to keep channels open, they said, it does not trust the United States and does not think President Trump is serious about negotiations," NYT says.

However, there's a glimmer of hope, per the report: "The Iranian government could engage diplomatically under the right conditions, said two Iranian officials and a Pakistani official. Tehran wants to see that Washington is willing to talk seriously about ending the war and not just negotiate a temporary cease-fire, they said. They added that the language in public statements from Iran has been harsher than that of private messages it has passed to the United States."

More shifting war aims and objectives...

'Highest Bridge in Middle East' Hit by Airstrikes

There's more evidence of US-Israeli attacks on Iran civilian infrastructure, as it's being reported Thursday that fresh airstrikes hit a highway bridge connecting Tehran and Karaj, according to Fars News Agency. Several people were injured, and multiple areas of Karaj were also struck. The bridge was actually just constructed, having been inaugurated earlier this year.

Fars identified it as the B1 bridge, dubbed the highest bridge in the Middle East. Tehran also continues to get pummeled hard, amid reports that the prior 24 hours saw the biggest wave of Iranian missiles and cluster munitions on Tel Aviv to date.

Operation Epic Fury seems to now be going after buildings and centers which play a vital role in terms of civilian infrastructure and maintaining day-to-day life in the country...

UK Gathers Over 30 Countries to Discuss How to Open Strait of Hormuz

Nearly three dozen countries are holding virtual meeting Thursday to coordinate diplomatic and political pressure to reopen the Strait of Hormuz. But notably the United States will not be represented in the virtual summit.

British Prime Minister Keir Starmer said the meeting, chaired by Foreign Secretary Yvette Cooper, "will assess all viable diplomatic and political measures we can take to restore freedom of navigation, guarantee the safety of trapped ships and seafarers and to resume the movement of vital commodities."

Iranian attacks on commercial vessels and continued threats have halted nearly all traffic (there have been some exceptions) through the waterway linking the Persian Gulf to global oceans, cutting off a critical oil route and driving petroleum prices sharply higher - with some 16 or more tankers having been directly attacked so far, per Bloomberg estimates.

Aftermath of Wednesday drone strike on oil warehouse in the Kani Qirzhala area on the outskirts of Erbil, northern Iraq:

Meanwhile Qatar has submitted another letter to the UN demanding that Iran "provide compensation for all damages" and to cease its attacks on Gulf countries.

Tyler Durden Fri, 04/03/2026 - 07:10

10 Good Friday Reads

The Big Picture -

My end-of-week morning reads:

• Public Anger Is Rising: Congress briefly showed signs of productivity before reverting to form. The public’s frustration with dysfunction is reaching a boiling point. Even TMZ is channeling the national discontent. (The Atlantic)

Have Trump’s tariffs worked? This is where things stand a year after ‘Liberation Day’ US foreign direct investment is lower; US factories employ 89,000 fewer people; US goods trade deficit is UP 2%; The government collected a lot of money but has to give it back; Inflation remains elevated. (NPR) see also Happy Liberation Day 1-Year Anniversary! On the one-year anniversary of Liberation Day and its cascading effects on markets, trade, and investor behavior.  Depending on where you look, the impact of the tariffs varies from modest to somewhat embarrassing to completely disastrous. Let’s examine the data to understand this better. What a difference a year makes. (The Big Picture)

How Working in America Became So Joyless: The loss of small perks and rise of AI have conspired to strip work of all fun; ‘It feels like a funeral in the office right now.’ (Wall Street Journal)

• Who’s Ready to Invade Cuba?!: Russian oil tankers are docking in Cuban ports while the Iran war heats up. Jonathan V. Last asks whether anyone in Washington is paying attention to what’s happening 90 miles offshore. (The Bulwark)

Hitler’s Edifice Complex: He was obsessed with adding an expensive new wing to the Reich Chancellery, part of his grandiose architectural ambitions for the nation’s capital. Timothy Ryback on Hitler’s obsession with grandiose architecture as an expression of power. The parallels to modern strongmen building monuments to themselves are hard to miss. (The Atlantic)

A Detailed Timeline of Jeffrey Epstein’s Final Hours: With Epstein’s prison guards called before the House Oversight Committee, Vanity Fair reconstructs the final hours in meticulous detail. One of Epstein’s prison guards has been called to speak before the House Oversight Committee this week. Ahead of her expected testimony, here’s a detailed look at what we know about the convicted sex offender’s conspiracy-theory-shrouded death.  (Vanity Fair)

What Is the Magic Number When It Comes to Close Friends? The science of friendship has a number, and it changes as you age. Quality over quantity isn’t just a cliché—it’s backed by research. The number varies from person to person and changes as we move through different phases of life. (Wall Street Journal)

The right’s embrace of Adam Carolla cost him friends and gigs — but not his edge: Carolla traded the comedy mainstream for conservative media and lost friends along the way. The podcaster says he isn’t interested in climbing the late-night ladder or striking big deals as much as being able to say — often vulgarly — whatever he wants. A portrait of what happens when a comedian picks a political lane. (Washington Post)

• NASA’s Historic Lunar Mission Launch, in Photos: Stunning images from the Artemis II launch—the first crewed lunar mission in over 50 years. The photos capture the scale, the fire, and the emotion. (Time) see also Inside NASA’s Artemis II Mission to the Moon and Back: NASA’s Artemis II mission is sending astronauts on a lunar mission with big stakes in the program’s future plans. On April 1, NASA is set to send astronauts on a journey around the moon, part of a historic mission called Artemis II. The trip will mark humanity’s return to the lunar vicinity for the first time since the last Apollo mission sent astronauts to the moon in 1972. (Bloomberg)

Colman Domingo Almost Quit Acting. Now His 50s Are the Best Years of His Career. The actor has become one of the most talked-about stars in Hollywood with an Emmy win and Oscar nods. But he’s always hedged his bets. (Wall Street Journal)

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.

 

Waymo’s now serving more than 500,000 paid robotaxi rides every week

Source: Sherwood

 

Sign up for our reads-only mailing list here.

 

The post 10 Good Friday Reads appeared first on The Big Picture.

Germany's Economy Minister Urges Nuclear Rethink As Energy Prices Surge, Growth Forecasts Slide

Zero Hedge -

Germany's Economy Minister Urges Nuclear Rethink As Energy Prices Surge, Growth Forecasts Slide

Germany’s Economy Minister Katherina Reiche has openly called for a fundamental reassessment of the country’s long-standing rejection of nuclear power, warning that heavy dependence on gas has left Europe’s largest economy dangerously exposed to repeated energy shocks.

Speaking at the launch of a new international investor conference aimed at drawing foreign capital into Germany, Reiche told the Financial Times that the decision by previous governments to phase out nuclear generation has eliminated any realistic alternative for reliable baseload electricity. “We need gas to secure our supply - that is the only baseload supply I have left,” she said. “Politically speaking, I have no alternative.”

Reiche, a senior figure in Chancellor Friedrich Merz’s Christian Democratic Union, made the remarks as fresh data highlighted the mounting costs of the nuclear exit, originally decided under Angela Merkel in 2011 and completed under Olaf Scholz. While the policy was accompanied by a massive push for renewables, it has left Germany more reliant on gas-fired power stations to keep the lights on when the wind doesn’t blow and the sun doesn’t shine.

Related:

European gas prices have risen more than 60 per cent since the outbreak of conflict in the Middle East, delivering the continent’s second major energy price crisis in under five years. Futures contracts for German electricity in May are trading at four times the level seen in France, Europe’s biggest nuclear producer, according to the energy exchange EEX.

Reiche urged Germany to stop sitting on the sidelines of Europe’s nuclear revival. France, Sweden and Poland are all either building new reactors or extending the life of existing ones, attracted by the technology’s ability to deliver large volumes of low-carbon, dispatchable power. “We can decide that we are not interested. Then we stick to gas and become more dependent on one energy source,” she said. “Or we can say that we are interested in technology again.”

With Germany’s renowned engineering expertise, Reiche argued the country should at minimum engage constructively in European nuclear projects and international forums. “Anyone standing on the sidelines simply commenting loses influence. You must be on the pitch if you want to play.”

The vulnerability of Germany’s gas strategy was brutally exposed after Russia’s 2022 invasion of Ukraine cut off pipeline supplies. Berlin was forced to pivot rapidly to liquefied natural gas, much of it from the United States, which now accounts for around 10 per cent of the country’s gas supply. Energy costs have remained stubbornly high ever since. In the second half of 2025, gas prices for private households were 79 per cent above 2021 levels, while electricity prices rose 23 per cent, official statistics show.

The latest price spike is already hammering industry and derailing growth forecasts. A consortium of leading German economic institutes warned on Wednesday that the energy shock would erase more than half the GDP growth previously expected for 2026. The new projection is just 0.6 per cent, down from 1.3 per cent in September, with 2027 growth seen at 0.9 per cent.

Reiche acknowledged the strain on energy-intensive sectors but insisted Germany faced no immediate supply shortages. She noted that Chancellor Merz, who heads a year-old coalition between the CDU and Social Democrats, has long described the nuclear phase-out as a “huge mistake.” While the government has ruled out restarting closed conventional reactors, it is now supporting research into small modular reactors and nuclear fusion. Merz has also pledged to end Germany’s previous opposition to nuclear power at EU level.

The renewed energy debate comes as Berlin battles to revive an economy weighed down by high costs, Chinese competition and structural weaknesses. Despite a €1 trillion decade-long infrastructure and defence spending package - the largest since reunification - growth remains elusive.

To counter the gloom, the government is hosting the first “Invest in Germany” summit in Berlin on 19-20 October. Reiche hopes the event, modelled on France’s “Choose France” initiative, will secure concrete investment pledges and reposition Germany as a stable, diversified alternative for global capital. “I don’t see a flight from the dollar … but we see a lot of inquiries from America,” she said.

Investors she speaks to recognise the country’s underlying strengths, she added: a powerful industrial base, well-capitalised small and medium-sized companies (Mittelstand) and strategic importance. “Germany is currently in a weak phase,” they tell her, “but … you are of great strategic interest to us.”

Whether a more pragmatic stance on nuclear power can help restore that interest - and ease the pressure on German households and factories - will be one of the defining tests for Merz’s government in the months ahead.

Whoops...

Tyler Durden Fri, 04/03/2026 - 05:45

Foreigners Commit Nearly Half Of All Rapes In Austria, Syrians Largest Foreign Group Of Suspects

Zero Hedge -

Foreigners Commit Nearly Half Of All Rapes In Austria, Syrians Largest Foreign Group Of Suspects

Via Remix News,

The number of rape suspects in Austria has more than doubled since 2015, with foreign nationals — and Syrians in particular — driving a disproportionate share of the increase. In addition, foreigners nare now responsible for nearly half of all rapes, a major increase from 2015 as well.

The figures, provided by Austria’s Interior Ministry in response to a request by Austrian newspaper exxpress, paint a striking picture of a decade-long trend.

The composition of those suspects has shifted markedly. In 2015, 250 of the 688 suspects were foreign nationals — 36.3 percent of the total. By 2025, that number had risen to 538, representing 46.9 percent of all suspects, despite foreign nationals making up only 20.5 percent of Austria’s population.

Reported rapes under section 201 of the Austrian criminal code rose from 826 cases in 2015 to 1,359 in 2024 — an increase of roughly 64.5 percent. The number of suspects rose in parallel, from 688 to 1,196.

Preliminary figures for 2025 show a slight decline to 1,147 suspects, but that still represents an increase of around 66.7 percent compared to 2015.

Austrian suspects also increased over the same period, from 438 to 609 — a rise of 39 percent.

Foreign suspects, however, rose by 115 percent, more than doubling.

The gap between the two trends has widened significantly over the decade.

Approximately 7 to 8 percent of Austrian citizens have a foreign background.

It remains unclear what percentage of this population has committed crimes like rape since Austria does not release that statistical information.

Austrian suspects are recorded simply as “Austrian” regardless of migration background — country of birth and parental origin are not captured.

Syrians now the largest group

Syrians are at the top of the list in terms of rape suspects. In 2015, just three Syrian suspects were registered for rape. By 2024, that number had reached 92, and in 2025 it climbed further to 101 — making Syrians by far the largest single group among foreign suspects. Roughly one in five foreign rape suspects is now Syrian.

Other nationalities with consistently elevated figures include Afghanistan, which has registered around 50 cases annually for several years, as well as Turkey and Romania.

The Freedom Party of Austria (FPÖ) has voiced concern about the limitations of Austria’s data collection. The data also does not break down perpetrators with full asylum and those with subsidiary protection status. As mentioned, the status of those Austrians with a migration background is also not captured.

FPÖ parliamentarian Christian Lausch, who has spent decades working as a prison guard at Vienna’s Josefstadt prison, notes that the absence of this vital data makes it harder to assess the true reality of rape in Austria

“Then you cannot work on the problems,” he said.

Read more here...

Tyler Durden Fri, 04/03/2026 - 05:00

Iraq Revives Syria Land Route, Post-Assad, To Export Oil To Europe

Zero Hedge -

Iraq Revives Syria Land Route, Post-Assad, To Export Oil To Europe

Via Middle East Eye

Iraq has restarted overland oil exports through Syria, marking a significant shift in regional energy logistics as the US-Israeli war on Iran continues to wreak havoc on traditional shipping routes through the Strait of Hormuz.

Ali Nazar, director general of Iraq’s state oil marketer Somo, said on Wednesday that the company had agreed to export 50,000 barrels per day of Basra medium crude via Syria to the Mediterranean, with plans to increase volumes. The crude will reach European markets through the Syrian port of Baniyas.

AFP/Getty Images

Syria's state news agency SANA reported that fuel convoys had begun entering the country through al-Tanf crossing, signalling what it described as a renewed role for Syria as a transit hub. The Syrian Petroleum Company said it would store the shipments before transferring them to Baniyas for export.

Safwan Sheikh Ahmad, the company’s communications director, said the first convoy includes 299 tankers and called the move a "step toward restoring Syria’s role as a key energy corridor in the region".

The operation is expected to generate revenue for Damascus and revive transit infrastructure damaged during years of civil [proxy] war. Syrian officials said the process demonstrates the country’s readiness to handle large-scale energy flows in line with international standards.

According to Reuters, Somo has also agreed to supply about 650,000 metric tonnes of fuel oil per month between April and June, with shipments transported overland through Syria.

Iraq has not relied on this route for decades. However, sources told Reuters that the aftermath of Syria’s war and the disruption caused by the Israeli-US war on Iran have made it a viable, albeit more expensive, alternative.

Muayyad al-Dulaimi, spokesperson for Anbar province in Iraq, told Al-Araby Al-Jadeed that the renewed use of the al-Walid crossing reflects an “exceptional step” driven by regional instability. He noted that an initial phase saw 101 tankers transport around 3.2 million litres of crude to Baniyas.

He said the move forms part of a broader strategy to secure alternative export routes as risks increase along key maritime corridors. While the volumes remain limited, al-Dulaimi stressed that the route helps sustain exports and ease pressure on state revenues.

Iraqi officials acknowledge the arrangement is temporary. Higher costs and logistical demands mean Baghdad will ultimately depend on restoring stability across its main export channels.

In early March, Iraq restarted crude exports from the Kirkuk oilfields to Turkey’s Ceyhan port after Baghdad and the Kurdistan Regional Government in northern Iraq struck a deal to resume flows. The state-run North Oil Company said shipments would begin with an initial capacity of about 250,000 barrels per day. 

Global oil prices have surged since the start of the war on February 28 with the global benchmark Brent crude oil price briefly hitting $119 per barrel on Tuesday.

Tyler Durden Thu, 04/02/2026 - 23:00

Ukraine Becomes World's AI Weapons Laboratory

Zero Hedge -

Ukraine Becomes World's AI Weapons Laboratory

By Craig S. Smith of Eye on AI

I was in Ukraine in February and wrote this piece before the start of the war with Iran, but its implications are even more relevant today. My interest in lethal autonomous weapons dates back to my time with the National Security Commission on Artificial Intelligence, where full autonomy was debated but largely dismissed as ethically unacceptable.

But in practice, the step to full autonomy is smaller than it sounds. Once a human is no longer actively controlling a system and is only monitoring it with the option to intervene, the shift to removing that human entirely is incremental.

It’s similar to how Iran describes its nuclear program. Uranium enrichment for civilian energy is presented as benign, but once enrichment reaches reactor-grade levels, the remaining technical steps to weapons-grade material are a matter of time and intent, not capability.

It is becoming increasingly difficult to argue that fully autonomous weapons will not arrive. They follow naturally from realities already on the battlefield. What is easier to grasp is the fear they generate. Watch first-person-view footage of a quadcopter chasing a soldier to his inevitable death and the abstraction disappears.

Bundled against Ukraine’s subzero February chill, a man in a gray coat threw what looked like a gray model airplane into the pale blue sky. The buzzing of the drone’s propeller slowly faded as it climbed above snowy fields and barren hedgerows. It looked like a toy.

Oleksandr Liannyi was not playing, however. He was working on a way to make drones far deadlier than they are today.

“It’s mostly about accuracy of positioning, of how the navigation part will perform in different conditions,” said Liannyi, cofounder of NORDA Dynamics, which builds autonomous navigation and targeting modules for military drones..

Liannyi and his colleagues and other Ukrainian teams have achieved partial autonomy, allowing drones to navigate to and strike human-selected targets on their own. The next step is far more controversial: fully autonomous drones, which could navigate to an active front, hunt for targets, and strike without human input. Empowered to make life-or-death choices, such drones would fundamentally change the nature not only of this war, but of all wars.

“The technology is very close,” Liannyi said later inside a battered white van at the tree line. He noted that a number of intermediate stages still need to be developed before such systems exist and that NORDA Dynamics continues to emphasize human approval in the loop when it comes to the strike decision.

Under International Humanitarian Law, humans can’t pass responsibility for killing to a machine.

But Liannyi argues that even if a human is legally required to approve a lethal strike, autonomous target acquisition will, at the very least, increase the number of drones a single pilot can manage. “The drone can notify you when it sees the target, and then you can pull up the picture and approve it, so you can control lots of drones simultaneously,” he said.

I had come to Ukraine, improbably, with a Silicon Valley startup founder to witness tests of his company’s humanoid robot in a combat setting. But because of its sensitive nature, the robot never made it out of its crate at the airport in Warsaw and, for the same reason, never got past the Polish-Ukrainian border in the middle of a snowy night. It was eventually sent back to California. So I began interviewing people about the growing autonomy of weapons in the current war. That led me to the white van on the edge of a snowy field in Western Ukraine – what the Ukrainians call a “polygon,” after the 19th-century European term for a military training ground.

Beside us in the van, a young blond man in a gray parka sat hunched over a screen, watching a video feed from the drone’s camera. He moved a small white box across the screen with his thumbs on the prongs of a drone controller until he spotted a distant tree and flipped a switch with his finger. The box turned green, a red bar at the top of the screen flashed “ENGAGE,” and he lifted his hands away from the controls as if to emphasize that the drone was now flying on its own.

Almost immediately, the drone banked toward the tree outlined on screen by the green glowing square and, within seconds, was hurtling toward it. A moment before the collision, the man took control of the drone again, sending it swooping back into the sky. “Oho!” he exclaimed. Another man in the van muttered in Ukrainian, “Duzhe kruto,” or “very cool.”

Liannyi and his colleagues were testing new control algorithms that can guide a drone to its intended target without human control, a necessity when pilots lose contact with their drones because the enemy has jammed the radio link. Most of these systems allow drones to fly in complete radio silence for the last half mile to two miles, depending on the weather and the cameras used. Once flying autonomously at roughly a hundred miles per hour, the drone is virtually undetectable by the enemy until it is too late.

Autonomy on a Circuit Board

Inside the drone’s plastic housing is a cheap computer chip soldered to a green circuit board modeled on Raspberry Pi, a single-board computer originally designed to teach British schoolkids to code. These boards are imported from China, but Ukraine is now developing its own onboard AI, including homegrown boards built by dozens of local companies. NVIDIA’s more powerful Jetson Orin modules are used in some long-range, high-value drones, but they are expensive. Cheaper modules offer enough onboard AI to lock onto a target while keeping the unit cost low enough to lose in combat.

Currently, attack drones are still flown by a human operator, who uses a screen and controls to steer the aircraft, choose a target, and decide when to strike. With partial autonomy from companies such as NORDA Dynamics, the machine can take over the final phase of the attack. Once a human has picked the target and sent the drone toward it, onboard software handles the last stretch of navigation, avoiding obstacles and lining up the final approach. In practice, that means the person still decides who or what can be attacked, but the drone’s autonomy decides exactly how to get there and hit.

Full autonomy would mean the drone, not a human, decides who or what to attack and carries out the strike on its own. The system would search for potential targets, decide which ones fit its programmed rules, and then launch and complete an attack without asking a person for approval.

Such lethal autonomous weapons, called LAWs, would allow warfighters to define a kill box: a geofenced zone in which autonomous drones could hunt, killing any person or destroying any vehicle they find. The box could be as small as a crossroads or as large as 20 square miles of frontline terrain.

The Legal Gray Zone

To turn the kill box into reality, drones must be able to distinguish a soldier from a medic, a fleeing civilian from a retreating infantryman, a tank from a tractor, in rain and snow, day and night, and do it well enough so that commanders and lawyers are willing to let them fire without a human making the final decision.

Neither International Humanitarian Law nor Ukrainian law specifically prohibits fully autonomous weapons. They require only that weapons distinguish soldiers from civilians and medics, avoid excessive civilian casualties, and allow humans to halt or adjust attacks as battlefield conditions change. Even U.S. law and military doctrine require only that autonomous weapons be designed so commanders and operators can exercise “appropriate levels of human judgment over the use of force.”

Already, Western officials have moved from talking about a human “in the loop,” meaning a person must actively approve each strike, to a human “on the loop,” meaning a person supervises the system and can intervene to stop an attack. Because of “automation bias,” the tendency for humans to trust machines that have proven accurate in the past, “on the loop” risks humans effectively rubber-stamping machine decisions to keep up with the pace of battle.

But autonomy opponents warn about algorithmic errors or hacks that could propagate at machine speed.

“The risks they pose to civilians, friendly forces, and human security in general are staggering,” Dr. Peter Asaro, the Vice Chair of Stop Killer Robots, wrote in an email. “While it may seem expedient in a desperate situation, we need to consider the long-term ramifications of developing these technologies.”

The Asymmetry

Aleksandr Palamarchuk, a soldier with the Azov Brigade who goes by the call sign Paradise, appears as a ghostly image on the laptop screen in my Kyiv hotel room to talk about where the technology is today. A virtual background of the aurora borealis hides any clues to his whereabouts, which he says is a research and development lab within a hundred miles of the front.

Azov Brigade is a Ukrainian National Guard special forces unit, formed in 2014 as a volunteer militia to fight Russian-backed forces in Donbas. It has since become one of Ukraine’s fiercest combat units while remaining controversial because of its early ties to far-right groups.

“You need to be 100 percent sure it’s an enemy,” Palamarchuk said, noting that any civilians killed are Ukrainian because the war is primarily on Ukrainian soil. (Russian civilians in border regions have also died from Ukrainian strikes, but in far smaller numbers.)

However, Russia doesn’t play by the same rules. A recent report by the Institute for the Study of War, a U.S. nonprofit funded by private donations, concluded that Russian drone strikes against unmistakably civilian targets, from pedestrians to apartment blocks, are meant to depopulate frontline-adjacent areas. It also argues that this approach is being institutionalized in Russian doctrine and practice, creating a frontline red zone where any movement or vehicle is treated as a legitimate target.

Russia has shown a willingness to kill civilians since the outset of the war, from the indiscriminate shootings in the town of Bucha, just west of Kyiv, to continued strikes on residential buildings in the capital itself.

For Palamarchuk, that is the core asymmetry of the war. “It’s much easier for them to make absolutely autonomous missions, because they don’t care about the target type or where they hit,” he said.

Palamarchuk said Ukraine is seeking to counterbalance that asymmetry by developing AI that can reliably distinguish legitimate military targets from civilians. He said Azov is experimenting with drones that can fly entire missions by themselves.

“You just place the drone on the ground, then you create a mission for it, and it takes off by itself,” he said. “Then AI models can recognize targets by themselves.”

Ukraine is being forced to innovate faster than any other army on Earth and is restructuring its military around unmanned operations, including giving drones full autonomy. It is planning for a 15-kilometer-wide zone along the front in which machines, not infantry, do most of the work.

The First Robot Assault

In early December 2024, a Ukrainian brigade executed what analysts describe as the first successful unmanned air and land assault in military history, against Russian positions in the Kharkiv region. The dawn attack was coordinated by remote operators who simultaneously deployed an integrated swarm of aerial and ground robots. Kamikaze ground vehicles and robotic machine-gun platforms advanced on the trenches, supported by heavily armed quadcopter bombers and smaller, nimble kamikaze drones acting as close-air support, while dozens of reconnaissance drones provided a total operational overview. The intense, two-hour robotic strike caught Russian forces off guard and destroyed the targeted positions.

Ukraine is still scaling command and control tools to make that repeatable.

At the same time, Ukrainian forces are running an enormous, iterative experiment in unmanned and AI-enabled warfare, with constant adjustments by drone makers based on feedback from the front lines.

Kyiv has formalized this role through its “Test in Ukraine” policy, which invites companies to push new drones, ground robots, missiles, and other systems straight into combat, then feed performance data back to industry and governments.

Western and particularly U.S. firms are among those whose systems are being tested on the battlefield — everything from long-range strike drones to maritime and loitering drones that wait in an area until a target appears — sometimes with very public failures.

Altius loitering munitions, built by U.S. manufacturer Anduril, repeatedly crashed or failed to hit targets and proved highly vulnerable to Russian electronic jamming. They were ultimately withdrawn from use by Ukrainian forces in 2024. Anduril says it has since revised the Altius system based on Ukrainian feedback, and that updated versions have been redeployed with some Ukrainian units.

Ukraine’s breakneck cycle of battlefield experimentation offers a trove of operational data about what works, what fails, and how adversaries adapt. The country’s Ministry of Defense has created a Universal Military Dataset, among the largest of its kind in the world, which can be used to train other AI tools in Ukraine’s defense arsenal. The dataset contains more than two million hours of drone footage and millions of labeled military objects.

The ministry has also developed an AI system called Avengers, which processes live video streams, automatically detecting, classifying, and flagging enemy equipment. Ukrainian officials say this combination of scale and detailed labeling allows the system to recognize most Russian weapons in live video in just a few seconds.

Avengers is integrated into the country’s command-and-control system so that AI-detected targets appear directly on tactical maps, passed almost instantly to drone pilots.

While publicly these systems are described as AI-enabled or semiautonomous, with humans nominally in the loop, the line separating that from full autonomy is blurring. A drone can decide to hit a tank, or a commander can pre-authorize that decision so thoroughly that the last human yes becomes more of a given than a true ethical barrier.

The Army of Drones

Much of this innovation was driven by Kateryna Chernohorenko, who served as Ukraine’s Deputy Minister of Defense for Digital Development from 2023 to 2025. She arrived at my hotel looking more like a student than a former government official, wearing sneakers and black pants with a striped dress shirt open over a white T-shirt. Her laptop was covered in defense-themed stickers. Her energy and creativity have made her integral to Ukraine’s war.

One of her ideas was the Army of Drones project, which has centralized procurement and standardized platforms, treating drones as standard equipment rather than ad hoc volunteer gear.

“There was a need to have a systemic look at drones’ capabilities and practice,” she said.

That project channeled civilian crowdfunding and volunteer innovation into a coordinated pipeline that supplies the military with thousands of reconnaissance and strike drones, sets technical requirements, and fields them where they are most needed. It also created training and certification tracks for operators, helping build a professionalized cadre of drone units rather than scattered, self-taught teams.

By setting standards, aggregating orders, and validating new concepts at the front, the Army of Drones has turned Ukraine into a live testbed for military drone innovation and influenced how other countries and defense firms think about scaling unmanned systems for modern, high-intensity warfare.

It has also created a thriving defense sector with hundreds of companies in Ukraine building drones that operate in the air, on the ground, or on water. A recent defense technology expo sponsored by Azov took place at Kyiv’s National Museum of the History of Ukraine in the Second World War, a Soviet-era bunker-like building embedded in the Pechersk hills overlooking the Dnipro river. Above it, a towering stainless-steel figure of Mother Ukraine rises hundreds of feet into the air, arms raised, a sword and a shield lifted over the city.

Inside, dozens of firms presented their products. Among the company representatives at the expo was Marko Kushnir, a director at the Ukrainian drone maker General Cherry, whose name refers to the fruit associated with the region where the company’s founders are from.

General Cherry is one of two Ukrainian companies selected to compete in the Pentagon’s Drone Dominance Program, a $1.1 billion initiative to field large numbers of cheap, effective one-way attack drones for American forces. Both General Cherry and Ukrainian Defense Drones Tech Corp. have demonstrated they can mass-produce drones on short notice. General Cherry is now in talks with several Persian Gulf states about supplying interceptor drones to the Iran war.

Kushnir visited me later in my hotel, bringing a General Cherry hoodie and other branded swag. He also brought an unarmed Bullet, a nearly three-foot-tall drone shaped like a rocket and built to hunt other unmanned aircraft.

The Bullet is built to knock out Russia’s long-range, fixed-wing kamikaze drones based on Iran’s Shahed and produced under license in central Russia’s Volga region. Known in Russia as the Geran, the rear-propeller drone has become one of Moscow’s primary weapons for striking Ukraine’s energy infrastructure and residential buildings.

“Our drone can understand that it’s a Shahed,” said Kushnir. “It can go to the target without any operator control.”

The Outsiders

Among the most prominent outsiders building for this new battlespace is former Google C.E.O. Eric Schmidt. His military drone company, Swift Beat, produces a line of drones with bee-inspired names. Its flagship is the Bumblebee, a low-cost AI-enabled kamikaze quadcopter that has logged thousands of combat flights against Russian targets in Ukraine. The drone uses onboard cameras and internal motion sensors to navigate by comparing ground features to maps stored in memory, allowing it to operate without GPS, radio signals, or a live data link. Once a pilot designates a target, the AI takes over.

Neither Schmidt nor Swift Beat would comment for this article.

Swift Beat also produces an AI-powered interceptor system designed to hunt and destroy Russian Shahed drones. Called Merops, after the genus of bee-eating birds, it fires fixed-wing drones from mobile launchers and uses onboard machine vision to track and physically ram targets, bypassing radio jamming.

Merops are now being deployed on NATO’s eastern flank. Romania has begun integrating mobile interceptor units into its short-range air-defense networks, and Poland is training military personnel on the system as part of a broader anti-drone shield.

The underlying parts – small minicomputers, commercial computer-vision libraries, visual-inertial navigation – are mostly dual-use technology rather than exotic military hardware. What is emerging in Ukraine is not only a new class of weapon, but a new production logic: autonomy assembled from cheap sensors, commercial computers, and battlefield iteration, then scaled fast enough to make a difference on the battlefield.

Five Levels of Autonomy

While Schmidt is the most prominent technologist building drones for Ukraine, people in the country point to Ukrainian entrepreneur Yaroslav Azhnyuk as the leading expert on autonomy in the drone race.

Azhnyuk is best known in Silicon Valley as the co-founder of Petcube, a startup that makes interactive pet cameras. After Russia’s full-scale invasion, he used his expertise in cameras that detect motion, interpret behavior, and stream video reliably across unstable networks to build AI-driven autonomous systems for drones.

He likens drone autonomy to the five levels of self-driving cars. “Level one is autonomous terminal guidance,” Azhnyuk explained over breakfast at a fashionable gastropub in central Kyiv. “You fly manually, you lock the target, and from that moment the drone can hit it autonomously under all conditions.”

Level two introduces autonomous bombing: the system calculates release timing and performs an escape maneuver. Level three is more controversial: autonomous target recognition and strike decision-making within a defined kill zone.

“The system scans what it sees, recognizes the target, reaches enough confidence, and initiates the strike,” Azhnyuk explained as he ate pork brisket with pink pickled onions.

Level four adds autonomous navigation from launch to the target area without radio or satellite guidance. Level five includes autonomous takeoff and landing, enabling reusable systems rather than one-way missions.

In his framing, the ethical debate may invert. “Within five to ten years,” he said, “it may become unethical to use weapons without AI,” he said, arguing that autonomous precision systems could cause less collateral damage than purely human-operated alternatives.

Baba Yaga

When Russia invaded in 2022, many Ukrainians pivoted into drone warfare. Pavlo Yelizarov, nicknamed Lasar, was a television producer who bought a smuggled agricultural drone and strapped an anti-tank mine to its undercarriage. That effort evolved into Lasar’s Group, one of the military’s most formidable drone formations.

It was the first to put Starlink satellite terminals onto heavy bomber drones, allowing pilots to operate from secure rear positions via internet-based control links, sidestepping Russian jamming of radio frequencies. The arrangement effectively decoupled the pilot’s physical location from the drone’s, allowing the pilots to remain far in the rear — or indeed be based anywhere in the world.

The group has destroyed more than $13 billion of Russian military equipment, including tanks, each strike documented by onboard video. Its signature platform is a four-rotor heavy bomber that Russian troops have nicknamed Baba Yaga, after a witch in Slavic folklore. The drone, mounted with a satellite receiver from Elon Musk’s Starlink, can carry up to 5 kilograms of munitions and travel as far as 35 kilometers and back, often flying low, at treetop level.

Yet even as Lasar’s Group has refined remote piloting, some of its commanders are looking beyond radio, satellite or fiber-optic connections altogether to a day when drones operate without a human pilot at all.

A major named Yurii, who declined to give his family name for security reasons, oversees training and testing of new engineering solutions within Lasar’s Group, an elite military drone unit. He came to see me in my hotel room wearing military fatigues and a name patch that read “Phoenix,” his radio call sign. He told me that, in his view, the next frontier of drone warfare is full onboard autonomy: once a drone is launched, he said, navigation, targeting, and execution will eventually be autonomous, with no need for a live communication link to a pilot.

“Connectivity can be jammed, so you’ve got to do all of that on the edge,” he said, sitting bolt upright, head shaved and a reddish beard fading white at the point. In other words, the drone must be able to see, orient itself, identify what matters, and act without relying on a distant operator or a remote server.

“This will help us to place our personnel far away from our enemy, without direct contact,” he said. “It will create a war of drones, not a war of humans.”

To move in that direction, Lasar’s Group is developing what Phoenix calls autonomy modules – standardized packages of hardware and software that can be attached to different airframes. “We are building drones, but we are also building the autonomy modules,” he said. The decision-making element is migrating into code.

The Cost

For now, it’s still a war of drones against humans, machines against men, with devastating consequences. Drones now account for over 70% of casualties on both sides.

At a rehabilitation hospital outside Lviv, I met Vyacheslav Kondrashenko, a soldier with Ukraine’s 93rd Separate Mechanized Brigade. A year earlier, he had been carrying a 15-inch-square quadcopter fitted with two sixty-millimeter mortars in the fiercely contested eastern reaches of Donetsk. As he emerged from his dugout into the open, a smaller Russian quadcopter, carrying a munition of its own, struck his right arm and exploded. The blast set off the mortar rounds he was carrying. When the smoke cleared, Kondrashenko – Slava, to his friends – had lost his right arm below the elbow and both legs above the knee. His remaining left hand was rendered useless.

“He was waiting for me,” Slava told me from his wheelchair. “I didn’t have a chance.”

The drone that hit him had been resting on the ground outside the dugout. Somewhere miles away, a Russian operator was watching the entrance through the drone’s video feed, delivered in real time through a fiber-optic cable as thin as fishing line, which had unspooled behind it, draping over fields and trees.

A few days after speaking with Slava, I stood outside the Garrison Church of Saints Peter and Paul in Lviv, the main house of worship for the city’s military. A priest in black-and-gold vestments appeared with a cross, followed by uniformed pallbearers bearing a black coffin on their shoulders. A military band played a funerary dirge.

There are funerals nearly every day in cities across Ukraine. This one was for Taras Novoselskyi, killed on his 47th birthday.

Ukraine’s cities, with their trams, baroque facades, and coffeehouses, can still seem improbably normal until a military coffin passes through. Then the war becomes visible again – not as a weapons system, or a software stack, or a theory of machine autonomy, but as a dead body being carried to the grave.

The procession moved with the choreography of grief. At the town hall, a lone bugler appeared in an upper window. He played “Il Silenzio,” the final call. People stopped to watch. Some crossed themselves. Others simply stood still.

The drive for full autonomy isn’t restricted to Ukraine. Russia has begun equipping its Lancet drone with machine-vision systems that can patrol a designated area, searching for vehicles or other targets that fit a predefined profile.

The war with Iran is accelerating the move toward machine-led killing. Israel has reportedly used AI-assisted targeting in its campaign against Iran, while the Pentagon says the United States is pushing to field swarms of low-cost attack drones and more autonomous systems of its own. Meanwhile, Ukraine has said it will share interceptor drones, training, and counter-drone expertise with the United States and Gulf partners.

There is no public evidence that terrorist groups are building such systems inside the United States. But the technology is spreading, the costs are falling, and U.S. officials have been warning that the homeland drone threat is growing.

I thought of a comment the entrepreneur Azhnyuk made at breakfast the previous day when I asked if the prospect of fully autonomous weapons frightened him. “What I’m terrified about is that we won’t get there as fast as the enemy does.”

Watch: The March Toward Fully Autonomous Weapons

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Tyler Durden Thu, 04/02/2026 - 22:10

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