Zero Hedge

FTA Threatens To Cut Funds To Chicago Transit Authority After Woman Set On Fire

FTA Threatens To Cut Funds To Chicago Transit Authority After Woman Set On Fire

Authored by Melanie Sun via The Epoch Times,

The Federal Transit Authority has threatened to withdraw funding for Chicago’s public transport network if the city doesn’t “measurably reduce assaults on transit workers and passengers” and address “unsafe conditions that have contributed to increased crime.”

FTA Administrator Marc Molinaro on Dec. 8 sent letters to Chicago Mayor Brandon Johnson and Illinois Gov. JB Pritzker, outlining a Dec. 15 deadline for the Chicago Transit Authority (CTA) to develop a “verifiable security enhancement plan” to be implemented in full across the CTA’s bus and rail system by Dec. 19 or risk cuts to federal funding.

The special directive also ordered the CTA to update its public transportation agency safety plan by the end of December and share that plan with the FTA within seven days of approval by the CTA’s Transit Board Committee.

The CTA is an FTA-regulated transit agency and must comply with the FTA’s safety oversight through special directives by the specified deadlines. Otherwise, it could face up to 25 percent cuts in federal funding under the Urbanized Area Formula Grants program authorized by statute 49 U.S.C. § 5307.

In the letters, Molinaro cited an attack last month in which 26-year-old female commuter Bethany MaGee was set on fire while traveling on a Chicago train, leaving her with life-threatening burns. She survived but remains hospitalized, with years of surgeries ahead of her.

Police arrested 50-year-old Lawrence Reed of Chicago the next morning. He was charged with committing a terrorist attack. Molinaro said in the letter that Reed was previously arrested 72 times.

He was on pretrial release at the time of the attack. Molinaro said in the letter that Reed was released after being charged with assaulting a social worker in August. Online court records did not list an attorney for Reed.

“Illinois is notorious for being the first state in the U.S. to impose a deadly cashless bail policy that allows alleged criminals to be released from jail without paying any money while they await trial,” the FTA said in a statement.

The Cook County chief judge’s office, when asked to comment on the case, pointed to a state law that limits judges’ ability to deny the release of defendants ahead of their trials.

Molinaro said the “preventable” attack on MaGee was not an isolated incident, pointing to “high crime rates on CTA property.”

A Chicago Transit Authority train pulls into the new Damen Ave. station just two blocks from the United Center on Aug. 12, 2024. Charles Rex Arbogast/AP Photo

This included reports to the FTA of a violent crime rate four times higher than the national average, marked by four homicides in the past 18 months and a more than doubling of assaults against workers and riders in the last five years.

The attack “reflects systemic failures in both leadership and accountability on all levels that cannot be tolerated,” Molinaro wrote. “I will not accept the brutal assault of an innocent 26-year-old woman as an inevitable cost of providing public transportation.”

The FTA administrator said if the CTA does not quickly increase its law enforcement presence, the FTA will act, “including by withholding federal funds.”

“Transit leaders and elected officials who fail to enforce basic laws and permit disorder to erode the integrity of their systems are making deliberate choices that endanger riders,” he said.

Johnson told reporters Dec. 9 that his office will respond to the Federal Transit Administration letter.

“We do have to look at what the security apparatus looks like for public transportation,” the mayor said. “I don’t need a letter from the Trump administration to tell me what my priorities are.”

Pritzker also responded to the FTA letter at a press conference.

“This is the federal government threatening state and local government with taking away federal funds for a purpose that they’re not allowed to,” he ‌said. “We want the safest possible and most modern transit system in the entire country, and that’s what we’re prepared to implement.”

Illinois passed public transit reform that includes increased funding for public safety programs, including combating violent crime on public transit, his office said.

A CTA spokesperson said in a statement that the agency is reviewing the FTA request and will “respond within the requested timeline.” Its operations rely heavily on federal funding, particularly for capital improvement projects.

The Trump administration in October announced it was withholding $2.1 billion for Chicago infrastructure projects, including expansion plans for the Red Line L commuter train. The project would have established stops in some of the city’s poorest neighborhoods. White House budget officials said at the time that they wanted to ensure funding wasn’t moving through race-based contracting.

Tyler Durden Wed, 12/10/2025 - 13:45

"Bud Light" Moment Hits Cracker Barrel: Stock Crushed, Traffic Slides, Guidance Slashed

"Bud Light" Moment Hits Cracker Barrel: Stock Crushed, Traffic Slides, Guidance Slashed

Cracker Barrel shares are lower in premarket trading after posting softer-than-expected quarterly sales and cutting full-year revenue and profit guidance. Customer traffic dropped more than anticipated, driven in part by backlash after the casual dining chain effectively "Bud Lighted" itself with a disastrous woke rebranding.

The rebranding ... 

... which was eventually reversed and the marketing 'expert' resigned, appears to have a lasting impact on sales. 

First-quarter results swung to an adjusted loss of 74 cents per share versus a profit a year ago, slightly better than the Bloomberg Consensus estimate. Revenue dipped 6% and missed forecasts, with comparable sales for both restaurants and retail declining more than expected.

Wall Street analysts were spooked by the 7.3% decline in customer traffic for the quarter. 

Snapshot: First quarter results (courtsey of Bloomberg): 

  • Adjusted loss per share 74c vs. EPS 45c y/y, estimate loss/shr 79c

  • Revenue $797.2 million, -5.7% y/y, estimate $801.1 million

  • Restaurant comp sales -4.7% vs. +2.9% y/y, estimate -4.02%

  • Retail comparable sales -8.5% vs. -1.6% y/y, estimate -6.5%

Ongoing traffic deterioration sharply reduced annual sales and profit guidance (courtsey of Bloomberg):

  • Sees revenue $3.2 billion to $3.3 billion, saw $3.35 billion to $3.45 billion, estimate $3.38 billion (Bloomberg Consensus)

  • Sees capital expenditure $110 million to $125 million, saw $135 million to $150 million

  • Sees adjusted Ebitda $70 million to $110 million, saw $150 million to $190 million

In premarket trading, Cracker Barrel shares are down about 5.5%. As of Tuesday's close, the stock has been cut in half since the August rebranding debut

Here's what Wall Street analysts are saying (courtsey of Bloomberg);

Piper Sandler (neutral, PT to $27 from $49), Brian Mullan

  • "Unfortunately, the struggles that kicked off in August have continued at CBRL, with traffic in the quarter down 7.3% (better in the beginning of August, and then worse after that)," Mullan writes

  • Traffic for the fiscal 2Q-to-date period is running down 11%, and management "materially" reduced its annual guidance

  • Cracker Barrel is sticking with many of the turn-around efforts designed to help over the long-term, but the main takeaway from the 3Q report/conference is that "things remain pretty tough at the business in the here and now"

Citi (sell PT to $20 vs. $24), Jon Tower

  • "The traffic slump spurred by the ill-fated logo change resonated through F1Q results, and, along with a softer restaurant backdrop, prompted a weaker start to F2Q and a FY26 guidance cut," Tower writes

  • In the near-term, the company is "mixing in tactical sales drivers," like buy-one-get-one and holiday promos, that may "prove costly" to the P&L, and weaving in longer-term initiatives to "sustainably drive the top line and preserve profits."

  • Believes the stock will remain under pressure until traffic/sales show "sustained improvement, as out-year numbers remain a question mark"

Truist (buy, PT to $45 from $50), Jake Bartlett

  • "Sales trends have not begun to recover from the 8/19 re- branding fiasco, or any recovery has been offset by macro pressures," Bartlett writes 

  • Says Cracker Barrel is "taking the right steps" to boost traffic, with its focus on improved service and food quality

  • This has been reflected in improving guest satisfaction scores and will eventually, he believes, be reflected in a traffic recovery

  • Business investments, including adding value to the menu and retaining labor hours, are headwinds to FY26 margins, but should drive operating leverage in FY27

Cracker Barrel is a case study for every other casual dining chain: go woke, get crushed.

Tyler Durden Wed, 12/10/2025 - 13:25

Obamacare Was Not A Failure

Obamacare Was Not A Failure

Authored by Connor O'Keefe via The Mises Institute,

“You have turned, Mr. President, the right of every American to have access to decent healthcare into reality for the first time in American history.”

Those are the words then-Vice President Joe Biden said to President Obama in the East Room of the White House on March 23, 2010, as he prepared to sign the Patient Protection and Affordable Care Act—or Obamacare—into law.

The signing ceremony was jubilant as party leaders celebrated their legislative victory. And across the country, their joy was shared by millions of Obama’s supporters who were convinced that the man they voted for had actually delivered the kind of meaningful reform every politician promises, but few make good on.

Americans listened to Joe Biden proclaim that every American would now have access to decent healthcare. And they listened to Obama recount stories of people he had brought to the ceremony who had gone untreated for various serious medical conditions because they could not afford it, and then suggest that, because of the bill he was about to sign, those stories would be a thing of the past.

I think it’s safe to assume that the Obama supporters who were watching that day would never have imagined that, fifteen years later, Congress would be battling over the extension of several temporary “emergency” subsidies that had had to be put in place to keep Obamacare afloat as healthcare and health insurance costs soared to heights that would have been considered unimaginable to anyone living in 2010.

But here we are.

As Congress fights over not whether but how to extend these covid-era ACA subsidies, it can be tempting to call Obamacare a failure. I mean, how else would you describe an “affordable care” act that made healthcare and health insurance less affordable while requiring a constant influx of new tax dollars to keep it from falling apart?

That’s a reasonable conclusion.

But the problem with it is that it takes the political class at its word and accepts that Obamacare was genuinely meant to make healthcare more affordable and accessible to the American people. It wasn’t.

To understand the true purpose that Obamacare served, you have to first go back and understand why government first intervened in the healthcare market a little over a century ago.

It was not, as the progressive creation myths many of us are taught in school suggest, to protect Americans from maniacal doctors or food and drug companies that were trying to kill them. Nor was it to help Americans afford healthcare—prices back then weren’t anywhere near the absurd levels we see today.

The reason government began intervening in healthcare was because some industry insiders and interest groups recognized that they could achieve and protect a level of market dominance practically unseen up to that point if they stopped merely trying to offer customers more value than their competitors and instead used government power to warp the healthcare industry to their benefit.

That began when a physicians’ interest group maneuvered its way into setting the accreditation standards for American medical schools. That position of influence allowed the group to ban programs that didn’t align with its specific medical philosophy, leading to the forced closure of nearly half the country’s medical schools.

This created an artificial shortage of doctors, which kicked off the affordability crisis that has defined American healthcare ever since.

Of course, the problem was still quite limited in the early days. But as other related industries—especially pharmaceuticals—began falling prey to the same crony dynamic at the heart of the Progressive Era, healthcare quickly began to grow more expensive.

Then, in the middle of the twentieth century, the health insurance industry followed the lead of healthcare providers and pharmaceutical companies and lobbied government officials for rules and regulations that benefited insurance companies’ bottom lines.

That effort culminated in a reworking of the tax code under President Truman. The government made employer-provided health insurance tax-deductible while it continued to tax other forms of employee compensation and other means of paying for care. In other words, the government used the tax code to change how Americans paid for healthcare. It didn’t take long for employer-provided insurance plans to become the dominant arrangement and for health insurance to morph away from actual insurance.

Shortly after that happened, the government significantly ramped up demand for the artificially-constrained supply of medical care with the passage of Medicare and Medicaid, leading to an easily-predictable explosion in the price of healthcare.

And, as fewer and fewer people could afford healthcare at these higher prices, more government assistance was required, which meant more demand, higher prices, more need for government support, and so on.

This was not good for everyday Americans, but it was excellent for healthcare providers and drug companies whose revenues were ballooning as more and more cash poured into the healthcare system.

And it was great for the health “insurance” companies. All the taxes on competing means of payment effectively acted as a subsidy, putting the industry in a strong position to benefit from the mounting crisis because, in addition to facilitating most of the country’s healthcare spending, they helped these providers grow far beyond the typical bounds of insurance.

In a free market, insurance serves as a means to trade risk. It works well for accidents and calamities that are hard to predict individually but relatively easy to predict in bulk, like car accidents, house fires, and unexpected family deaths. But with the government incentivizing people to buy healthcare through insurance plans, those plans began to grow to cover easily-predictable occurrences like annual physicals.

So, zooming out, industry leaders and interest groups joined forces with government officials to use government interventions to create a healthcare system designed to move as much money as possible to healthcare providers, pharmaceutical companies, and the insurance industry. That is, and has always been, the main motivation behind the federal government’s healthcare policy.

But, as with any scheme like this, the party cannot last forever. It only works as long as money keeps coming in. For an important service like healthcare, which most people don’t consider optional, the threshold is pretty high. But there is still a point where premiums grow too high, fewer employers or individual buyers are willing to buy insurance, and the flow of money into the healthcare system starts to falter.

According to the government’s own census data, that tipping point was reached in the early 2000s. For the first time since the scam had really kicked off, the number of people with health insurance began to fall each year. The industry—which had apparently assumed the flow of money would never stop increasing—began to panic.

Something had to be done.

And that something was Obamacare.

Despite all the talk of affordability and access used to sell the bill to the public, the Affordable Care Act is best understood as a ploy by the healthcare industry and the government to keep the party going.

Obamacare required all 50 million uninsured Americans to obtain insurance and greatly expanded what these “insurance” companies covered. Demand for healthcare shot back up, and the vicious cycle started back up again.

As any competent economist was saying before the bill was even passed, ramping demand back up would not make healthcare more “affordable,” it would only raise prices. And that’s exactly what happened.

Of course, as prices rose higher and health “insurance” moved further and further away from actual insurance, it’s made the American people even more dependent on the government for healthcare, which is how we’ve arrived at our current situation where extra, “temporary” subsidies rolled out during an official national emergency need to be made permanent to keep everything going.

So, if you want to take the political establishment at their word, the best you can say is that Obamacare kicked the can down the road and made the healthcare affordability crisis worse in exchange for a bit of temporary relief for some uninsured Americans.

But if you view the ACA within the context of the last century of American healthcare policy, it reversed the faltering demand for healthcare and health insurance, accelerated the racket moving as much money as possible into the industry, and quickly became a new political third rail that the “opposition” party refuses to even consider rolling back.

It’s hard to view that as anything other than a meaningful success.

Tyler Durden Wed, 12/10/2025 - 13:05

Trump Says National Guard Member Who Survived DC Shooting 'Stood Up Today'

Trump Says National Guard Member Who Survived DC Shooting 'Stood Up Today'

Authored by Aldgra Fredly via The Epoch Times,

President Donald Trump said on Dec. 9 that West Virginia National Guard member Staff Sgt. Andrew Wolfe, who was critically injured after being shot in Washington last month, has stood up from his bed and is showing signs of recovery.

Wolfe and fellow National Guard member Army Spc. Sarah Beckstrom were shot on Nov. 26 in what U.S. authorities say was an ambush near the White House. Beckstrom died of her injuries the following day, while Wolfe was left in critical condition.

Trump gave an update on Wolfe’s condition during a speech at an event in Pennsylvania.

“Today I got a call that he got up from bed. Do you believe that? He got up, he got up,” he said.

The president added that Wolfe has not spoken yet, noting that the National Guard member had been hit in the head during the attack.

“He didn’t speak, he’s not ready for that yet. I mean, he got hit in the head, but he got up and, boy, they’re so happy. It’s amazing,” he said, while commending the hospital staff and the military for their care.

“The love and the affection and the care that they’re given, they can’t even believe what’s happened. But Andrew stood up today, and people can’t believe it.”

West Virginia Gov. Patrick Morrisey said on Dec. 5 that Wolfe’s head wound is slowly improving, and he is beginning to “look more like himself,” quoting Wolfe’s parents.

Wolfe’s family said they expect him to remain in acute care for another two to three weeks as he continues recovering, according to the governor, adding that they have been “optimistic about his progress.”

“We continue to ask all West Virginians and Americans for their prayers! They are making a difference,” Morrisey said.

The suspect, Rahmanullah Lakanwal, 29, was shot during the confrontation.

Trump said in his speech that the U.S. government will seek the death penalty for Lakanwal, calling the attack an “act of terrorism.”

A makeshift memorial for U.S. Army Spc. Sarah Beckstrom and U.S. Air Force Staff Sgt. Andrew Wolfe outside of Farragut West Station, near the site where the two National Guard members were shot, in Washington on Dec. 1, 2025. Julia Demaree Nikhinson/AP Photo

Lakanwal, an Afghan national who once worked with the CIA and entered the United States in September 2021 through a Biden-era resettlement program, has been charged with first-degree murder, two counts of assault with intent to kill while armed, and three counts of possession of a firearm during a crime of violence.

Last week, he pleaded not guilty to murder and assault charges during his first hearing before a judge, appearing remotely by video from a hospital bed.

A court-appointed defense attorney for Lakanwal entered the plea during the virtual court appearance. The attorney pushed for his release, citing his lack of criminal history.

D.C. Superior Court Judge Renee Raymond ordered Lakanwal held without bond. His case is due back in court on Jan. 14.

A picture of Rahmanullah Lakanwal, an Afghan national who is the suspect in the shooting of two National Guard members, is displayed at a press conference in Washington on Nov. 27, 2025. Nathan Howard/Reuters

Wolfe and Beckstrom were among the National Guard members assigned to Joint Task Force-D.C., activated in August to support local and federal law enforcement efforts in restoring order in the nation’s capital.

Two lawmakers, Reps. Carol Miller (R-W.Va.) and Riley Moore (R-W.Va.), introduced a resolution to honor the two National Guard members. A similar measure was also introduced in the Senate.

“This resolution sends a clear message that the American people stand with the Beckstrom family, Andrew Wolfe, and the whole West Virginia National Guard community,” Moore said in a Dec. 3 statement. “We grieve this horrific and senseless attack, and continue to pray for these Guardsmen and their families.”

Tyler Durden Wed, 12/10/2025 - 12:25

Intel Shares Fall After Lawsuits Claim US Chipmakers Aided Russian Weapons

Intel Shares Fall After Lawsuits Claim US Chipmakers Aided Russian Weapons

Intel shares slipped in early trading Wednesday after the company was named in a series of lawsuits accusing major U.S. chipmakers of failing to stop their technology from ending up in Russian weapons used against civilians in Ukraine.

Intel, Advanced Micro Devices and Texas Instruments — along with Mouser Electronics, a Berkshire Hathaway–owned distributor — are alleged to have shown “willful ignorance” as restricted semiconductors were resold through third parties to Russia and Iran, according to five suits filed Wednesday in Texas state court.

The cases, brought on behalf of dozens of Ukrainian civilians, cite five attacks from 2023 to 2025 that killed and injured civilians. The filings claim the companies’ components were found in Iranian-made drones tied to Intel and AMD, as well as Russian Iskander and KH-101 missiles.

The defendants allegedly failed to prevent illegal diversions despite U.S. sanctions, amounting to “domestic corporate negligence.” Mass-tort lawyer Mikal Watts filed the suits in Dallas, arguing Texas jurisdiction because the companies operate in the state.

Mouser, acquired by Berkshire in 2007, is accused of helping route chips from Intel, TI and others to shell companies controlled by Russian proxies. The distributor’s U.S.-based logistics were a “substantial domestic component” of the harm, one suit claims.

Intel, AMD, TI, Mouser and Berkshire Hathaway didn’t immediately comment. All three chipmakers have previously said they fully comply with export rules, oppose any use of their technology in Russian weapons and ended business in Russia after the invasion.

Bloomberg reporting last year found U.S. chips continue to power Russian drones, missiles and communications systems despite sanctions, prompting repeated warnings from U.S. lawmakers that manufacturers must do more to stop the flow.

Tyler Durden Wed, 12/10/2025 - 12:05

Deep Discounts Tempt Indian Refiners To Seek Non-Sanctioned Russian Oil

Deep Discounts Tempt Indian Refiners To Seek Non-Sanctioned Russian Oil

Authored by Tsvetana Paraskova via OilPrice.com,

The majority of India’s biggest refiners are buying Russian oil from non-sanctioned sellers and traders as widening discounts of Russia’s crudes to benchmarks are tempting the price-sensitive Indian importers, sources involved in the purchases told Bloomberg on Wednesday. 

Before the latest sanctions on Russian oil producers Rosneft and Lukoil, India bought from Russia around one-third of all the crude it imported, as it sought cheaper oil.

Amid tense trade negotiations with the United States, India earlier this year was singled out by U.S. President Donald Trump as the main financier of the Kremlin’s oil revenues.

At the time, India remained adamant that it would buy the cheapest oil available, regardless of whether it came from Russia or elsewhere.    

However, the U.S. sanctions on Rosneft and Lukoil upended all previous plans by Indian refiners, who hastened to withdraw from the spot market for Russian crude in December.

But Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation (IndianOil) have bought Russian crude from non-sanctioned companies for January delivery, at a discount of $6-$7 to Brent crude, reports emerged last week.

Combined, IndianOil and Bharat Petroleum have purchased in recent days 10 cargoes of non-sanctioned Russian crude, including Urals, according to Bloomberg’s sources.

Another state-owned Indian refiner, Hindustan Petroleum Corporation Limited (HPCL), is seeking non-sanctioned Russian oil for January delivery, the sources said. 

Private refiner Reliance Industries, the owner of the world’s biggest integrated refining complex at Jamnagar, is a notable absence among Indian refiners in the market for non-sanctioned Russian crude, according to Bloomberg. 

Reliance, which operates the 1.4 million barrels per day (bpd) Jamnagar complex, has a long-term deal with Rosneft to buy almost 500,000 bpd.

Reliance was India’s single biggest buyer of Russian crude, until now, but it halted all purchases of oil from Russia last month, after the sanctions on Rosneft and Lukoil. 

Tyler Durden Wed, 12/10/2025 - 11:40

Russia Rejects New Zelensky Offer Of 'Energy Ceasefire' As Grid Repair Woes Worsen

Russia Rejects New Zelensky Offer Of 'Energy Ceasefire' As Grid Repair Woes Worsen

Russia has rejected a new Zelensky proposal for an "energy ceasefire." Kremlin spokesman Dmitry Peskov has explained that Russia wants a "long-term peace" and not a just a temporary ceasefire. Zelensky has offered a mutual halt to strikes on energy infrastructure if Russia agreed, mirroring something which had only briefly been in effect at the start of this year.

This 'offer' comes at a moment that Ukraine is suffering perhaps its worst energy crisis of the war, with lengthy blackouts not just being experienced in the country's east and south - but long outages in and around the capital as well.

Kyiv without power. File image via Suspilne News 

Oleksandr Kharchenko, director of the Ukrainian Energy Research Center, has in recent comments confirmed that resources for repairing damaged energy facilities have almost run out

"Now I don't see the resources from either Ukrenergo, the generating or distribution companies to purchase the equipment they already need and will need in two or three months," he said in televised remarks.

"Ukraine may run out of equipment to restore its energy system if Russia continues to launch attacks," he has explained.

The new proposal for a fresh energy ceasefire comes as Moscow is still livid at recent attacks on tankers transporting Russian oil. And now a cargo vessel carrying grain from Crimea has been detained at Odessa port:

Ukrainian security officials have detained a cargo vessel in the port of Odesa that authorities say is part of Russia’s so-called “shadow fleet,” the Security Service of Ukraine (SBU) said Wednesday.

The ship, whose name was not disclosed, arrived under the flag of an African country to load a shipment of steel pipes. The captain and 16 crew members holding passports from unspecified Middle Eastern countries were on board at the time of the seizure.

According to the SBU, the vessel illegally transported nearly 7,000 tons of Russian grain from annexed Crimea to North Africa in January 2021.

Via Telegram

The SBU claims it found evidence of "illegal operations in ports on temporarily occupied Ukrainian territory" after a search of the ship.

Apparently Ukrainian authorities intend to seize the ship's cargo altogether, and transfer them Ukraine’s Asset Recovery and Management Agency (ARMA), a government entity which deals with property linked to corruption or other crimes. So naturally, Moscow is not going to look kindly on fresh offers to mutually stop attacks on energy infrastructure.

Tyler Durden Wed, 12/10/2025 - 11:00

WTI Holds Losses After Big Product Inventory Builds, US Crude Production Nears Record Highs

WTI Holds Losses After Big Product Inventory Builds, US Crude Production Nears Record Highs

Oil prices extended their recent decline this morning as concerns about global oversupply continued to weigh on sentiment.

Crude has been trapped in a tight $4-a-barrel range since the start of November, as oversupply concerns vie with geopolitical risks surrounding the flow of sanctioned Russian barrels into nations including India.

“I’m increasingly becoming a bit of a contrarian here, given the limited selling response to all the negative news," said Ole Hansen, head of commodities strategy at Saxo Bank AS.

"The biggest risk to prices could be to the upside if next year’s oversupply is already priced in," he added.

Overnight saw API report a large crude draw but sizable product builds...

API

  • Crude -4.78mm (-1.7mm exp)

  • Cushing

  • Gasoline +3.14mm

  • Distillates +2.88mm

DOE

  • Crude -1.812mm

  • Cushing +308k

  • Gasoline +6.397mm - biggest build since Dec 2024

  • Distillates +2.5mm

US crude stocks fell last week but products saw notable builds (4th straight week) as Cushing inventories hover near 'tank bottoms'...

Source: Bloomberg

US Crude production picked up again to a new record high as rig counts remain near cycle lows...

Source: Bloomberg

Oil prices have stuck within a tight range in recent weeks as rising geopolitical risks amid Ukrainian attacks on Russian oil infrastructure and shipping counter rising global inventories of the fuel.

In its monthly Short-Term Energy Outlook released Tuesday, the EIA warned rising global production has outpaced demand and it expects inventories to continue rising by two-million barrels per day in 2026, pressuring prices.

Tyler Durden Wed, 12/10/2025 - 10:49

The Fiddle-All Reserve

The Fiddle-All Reserve

By Michael Every of Rabobank

The RBA rates hold decision generated two notable headlines from the Australian Financial Review: ‘RBA is worried it cut interest rates too far’; and ‘RBA is caught in Ray Dalio’s Doom Loop’.

The Bank of England says Chancellor Reeves’ budget will lower inflation by 50bps in 2026, backing the view that they will give the public an Xmas rate cut next week. Of course, note that the Australian government used similar state spending deliberately targeted at certain sections of the CPI index to help persuade the RBA to cut three times… only for it to then worry it went too far and get caught in a ‘doom loop’.

The RBNZ ‘s new Governor Brennan stated rates are not on a preset course, implying that they could go either up or down. Who knew? Not those who think they can’t go back up, for one.

Today, sees the Bank of Canada, the Fed, and the BCB in Brazil - which in Asia means a day of fiddling. The BCB is seen on hold at 15%. So is the BoC at 2.25% (see here for more from our cross-asset strategists Molly Schwartz and Christian Lawrence). At the Fed, a 25bps cut to 3.75% is priced in (see here for the take from our US Strategist Philip Marey) - but so is disagreement on what next. As Reuters headlines it, ‘Investors warm up for long spell of discordant Fed’. That’s putting it mildly.

The Financial Times reports Trump and Treasury Secretary Bessent will start final interviews for the new Fed Chair this week, with a trio of names still in the ring alongside favorite Kevin Hassett. He just said he wouldn’t bow to pressure over cutting rates, but he agrees with Trump there’s “plenty of room” for cuts in the coming months. So, that’s one tricky interview question in his pocket. However, ‘Where do you see yourself in five years?’ might be harder given the FT claims Hassett could be appointed for a shorter than usual term, allowing “Bessent to move to the Fed later.” Moreover, at a campaign-style rally, Trump just stated “It could be” that all four Biden-era Fed appointments, including “too late” Powell, “may have been signed by the autopen”, so are “maybe” invalid, “but we’ll take two.”

The RBA fiddled. The BOE may fiddle. The RBNZ may fiddle. The BoC are taking a rest from fiddling. The Fed is still fiddling - and the Fed is being fiddled with. Yet Nero-liberal markets don’t fret about getting burned as the music deafens them to what’s going on.

Trump just gave Ukraine’s Zelenskyy “days” to respond to his peace proposal: he reportedly wants things wrapped up by Xmas having failed to do so for Thanksgiving. Ukraine is preparing to unveil its updated peace proposal to the US, and Zelenskyy also claims to be “ready for elections.”

Trump thrashed EU leaders, stating “I think they’re weak,” and their countries are “decaying” – the accompanying article states “The Most Influential Man in Europe Thinks Europe is Full of Losers.” Trump also denied pledging any Argentina-style bailout for Hungary’s embattled leader Orbán, even if he praised central and eastern Europe vs the west.

European leaders have, typically, responded weakly for fear of losing US support. Indeed, the US denied a German request to integrate American artillery rockets into its armed forces, which could make it more difficult for the German military to cooperate with the US and other NATO allies. For an overview of the geostrategic dilemma Europe is in, see ‘A Grand Strategy for Europe in the New Cold War’. For now, there is Romanesque rhetoric but Nero-style fiddling going on.

Against this backdrop, the FT also argues ‘Why the world should worry about stablecoins’, concluding that “Dollar-based digital currencies offer benefits for the US, but Britain and the EU are better off resisting them.” Really? How? Is that also fiddling as things get hotter?

The Politico interview also touched on the “Trump Corollary” to the US Monroe Doctrine, where he refused to rule out boots on the ground in Venezuela, or moves vs Colombia or Mexico. That’s as CNN reports the Trump admin is quietly building plans for what would happen if Maduro were ousted – as if this is in the passive rather than active sense.

In geoeconomics, Trump’s controversial decision to allow Nvidia to sell H200 AI chips to China is seen by Bloomberg as spurred by Huawei’s AI Gains; the Wall Street Journal states those chips will have to undergo an unusual US security review before being exported to China; and the FT claims China will (again) limit access to them anyway, as it aims for its domestic production. That’s what a push for strategic autonomy looks like – not lots of grand speeches about strategic autonomy.

The EU has announced stricter food import controls to reassure EU farmers and address French conditions for supporting the EU-Mercosur deal: will it therefore replace tariffs with non-tariff barriers? It’s also considering further tariffs on China. Meanwhile, EU Industry Commissioner Séjourné admitted: "Last month, I was supposed to go to Brazil to discuss a rare earth mine. Three days beforehand we were told that the Americans had come, put money on the table, and bought all production until 2030." By contrast, China claims to have pulled off a critical mineral production tech revolution in 10 months, leaving it further ahead. And in the UK, a token vote in favor of rejoining the customs union with the EU passed Parliament.

The FT also reports July’s US-Indonesia trade deal is at risk of collapse, with D.C. believing that Jakarta is reneging on terms of agreement. Watch this space to see how the US reacts when a country doesn’t stick to a deal.

In political economy, France's National Assembly narrowly approved a contentious 2026 social security budget. At the same time, the leading French (presumed) presidential candidate Bardella claims “Together, Nigel Farage and I will restore Europe’s borders” via a ‘patriotic alliance’ between the National Rally and Reform UK to reshape Europe. Not coincidentally, the UK’s PM Starmer, a former Human Rights lawyer, urged Europe’s leaders to curb (or can we say, ‘fiddle with’?) the European Court of Human Rights in order to halt the rise of the far right.

In key data, China’s CPI inflation was unchanged y-o-y at 0.7%, but PPI deflation deepened further to -2.2% from -2.1%. Of course, that shows some economic problems, even if the West would kill for 0.7% CPI. So do reports that major Chinese EV firms are losing money on every vehicle that they sell. But when the quid pro quo is global domination of supply chains now close the point of no return for other countries’ established industries such that no future recovery is then possible, it’s arguably still a tune worth squeezing out of all the instruments of economic statecraft… even if Neo-liberalism burns.

Against that kind of backdrop, the Fed meeting today is just one little note.

Tyler Durden Wed, 12/10/2025 - 10:20

China's DeepSeek Using Banned Nvidia Chips To Develop Next Major Model

China's DeepSeek Using Banned Nvidia Chips To Develop Next Major Model

Chinese AI startup DeepSeek has been using 'several thousand' banned Nvidia Blackwell chips to develop its next major model, The Information reports, citing six people with knowledge of the matter. 

The chips in question were smuggled into China through a complex scheme that involves sending them to data centers in countries that are allowed to purchase them - then dismantling the servers and importing the components to China. 

Doing so allowed DeepSeek to remain competitive in the AI race, as Chinese AI chips are still not sufficient to train AI models - a process in which the models 'learn' from mountains of data. While Beijing has pushed for domestic companies to use homegrown alternatives, the Nvidia chips are currently the only ones that can get the job done.

Nvidia's Blackwell, which shipped in the fourth quarter of 2024, have been used by companies including xAI, Google, Microsoft and OpenAI - which all use hundreds of thousands of B200 chips, along with the prior "hopper" generation H100 / H200 models - to train and operate. 

DeepSeek made headlines in January, when its R1 deep-reasoning model displayed high performance vs. what the company claimed was very minimal cost to train it. Since then, the startup has only made incremental upgrades to their model - which uses a method called 'sparse attention' in which only certain parts of the model are used to answer questions vs. the entire model, according to the report. This technique could significantly reduce the costs of 'inference' (when AI models send your power bills higher to create cat videos) - which lowers the overall cost to adopt AI. 

Blackwell chips are perfect for this approach, as they include specialized hardware designed to silo various processes and accelerate sparse computing, which can run such calculations nearly twice as fast as traditional methods. 

DeepSeek’s focus on the sparse attention technique has made its model development more challenging and time-consuming, according to the person. The company in September released the V3.2-Exp, which it described as an experimental model serving as “an intermediate step” toward its next-generation model. But applying sparse attention to bigger models is proving to be more complicated, the person said.

Some DeepSeek employees are hoping to roll out the next-generation model by the Lunar New Year holiday in mid-February, according to the person. However, DeepSeek founder Liang Wenfeng, who prioritizes performance over the timeline, hasn’t set a hard deadline for the new model, the person said. -The Information

DeepSeek originally trained its models with older Nvidia A100 chips which launched in 2020 - 10,000 of which were stockpiled by its hedge fund parent, High-Flyer Capital Management before US export restrictions kicked in in 2022. The A100 is two generations older than Blackwell. DeepSeek also used Hopper chips, the generation just before Blackwell, according to company research papers from 2024. 

When Blackwell was unveiled, Nvidia released a design that combines 72 chips in connected server racks weighing 3,000 pounds (1.5 tons) each when fully assembled - taller than the average household refrigerator. While this has been the go-to option for US companies, it's impossible for smugglers to move it around in suitcases. Instead, they smuggle Blackwell hardware into China in eight-chip servers that are much lighter (about the size of a large suitcase), which are easier to install and repair. 

On Monday, President Trump announced that he would allow the sale of Hopper (H200) chips to China, while Beijing is still deliberating over whether to permit companies to use them. Doing so could reduce demand for smuggled Blackwell chips. 

As The Information notes, DeepSeek's models are custom-tailored to work with Nvidia hardware and software, making the use of Chinese chips less than ideal. After US export controls kicked in, DeepSeek followed Beijing's policy priorities and began using Huawei Technologies' chips instead to train smaller models - while continuing to rely on Nvidia processors for larger and more powerful models. 

In April, the House Select Committee on the Chinese Communist Party called DeepSeek a "profound threat" to US national security - and accused the company of circumventing export controls and potentially stealing intellectual property from US companies. In February, legislation was introduced to prohibit DeepSeek's chatbot app on federal devices. 

(Is the 'profound threat' that the US government can't control what DeepSeek tells people?)

How They're Smuggled

In this instance: 

First, chip dealers usually line up non-Chinese data center companies, typically in Southeast Asia, to procure Nvidia chips through authorized sellers. After the chips and accompanying servers are installed in those data centers outside China, Nvidia or its distributors, such as Dell Technologies and Super Micro Computer, dispatch personnel to inspect the equipment on location and make sure it complies with technical standards and export regulations, the people said.

Once the inspection is completed, dealers dismantle the servers and ship them into China. After passing Chinese customs, usually under a false declaration, the chips and servers are installed in data centers that already have leasing agreements with Chinese AI companies, the people added.

The elaborate scheme means the chips can only be ordered and delivered in batches, but it also ensures no paperwork can be traced to the end user.

Last month we notedWSJ investigation which detailed a different method that keeps the chips physically out of China, but under Chinese control:  

  1. Nvidia sells chips to a U.S. partner partly owned by a Chinese firm: Nvidia supplies advanced AI chips to Aivres, a Silicon Valley server builder whose parent company is one-third owned by Inspur—a Chinese tech firm placed on a U.S. national-security blacklist in 2023. While Nvidia is barred from dealing with Inspur or its blacklisted subsidiaries, the restrictions don’t extend to U.S.-based entities like Aivres, allowing the business relationship to continue.

  2. Aivres finds an overseas buyer for high-end Nvidia servers: In mid-2024, Aivres negotiated a $100 million deal to sell 32 Nvidia GB200 server racks - containing roughly 2,300 Blackwell-generation chips - to Indosat Ooredoo Hutchison’s cloud-computing division in Indonesia. Indosat is jointly owned by Qatar’s Ooredoo and Hong Kong’s CK Hutchison.

  3. The Indonesian buyer lines up a Chinese AI startup as the end user: Indosat agreed to purchase the servers only after securing a major client facilitated by Aivres: Shanghai-based AI startup INF Tech. Negotiations also included representatives from Fudan University, where INF’s founder, Qi Yuan, directs an AI institute.

  4. The Chinese startup intends to use the chips for finance and medical AI: By October, the servers had arrived in Indonesia and were being set up. INF plans to use the computing power to train AI models for financial analytics and scientific research, including drug-discovery applications.

According to attorneys familiar with export-control rules, as long as the Chinese company isn't directly using the chips to help China with military intelligence or weapons of mass destruction, the arrangement doesn't violate any laws set by the Trump administration. 

Nvidia has responded to The Information, telling the outlet in a written statement: "We haven’t seen any substantiation or received tips of ‘phantom data centers’ constructed to deceive us and our [server manufacturing] partners, then deconstructed, smuggled and reconstructed somewhere else. While such smuggling seems farfetched, we pursue any tip we receive."

Meanwhile, the company has developed a software feature to track the location of its chips - which could help the company combat chip smuggling, Reuters reported Wednesday. If this feature becomes live, it could 'severely cripple' the use of smuggled chips in China. 

Tyler Durden Wed, 12/10/2025 - 10:00

USA Rare Earth Shares Volatile After Accelerating Timeline For Commercial Production By Two Years

USA Rare Earth Shares Volatile After Accelerating Timeline For Commercial Production By Two Years

USA Rare Earth shares were up more than 3% heading into the cash open on news that the company is accelerating commercialization of its Round Top rare earth project in Texas, a move that could bring U.S. production online years ahead of most competing efforts.

The cash open prompted selling pressure which dragged USAR down 3%

USAR now expects commercial production at Round Top in late 2028—two years ahead of its prior schedule. The deposit is regarded as the richest known U.S. source of heavy rare earth elements, as well as gallium and beryllium. These materials are vital for defense technologies, electric vehicles, renewable energy infrastructure, aerospace components, and advanced electronics, positioning Round Top as the foundation of USAR’s fully integrated “mine-to-magnet” supply chain.

That supply chain also includes:

  • a 310,000 sq. ft. magnet manufacturing plant in Stillwater, Oklahoma, expected to become the largest metal-and-alloy-making and strip-casting facility outside China, and

  • a processing and separation laboratory in Wheat Ridge, Colorado, supporting domestic mineral refinement and separation.

CEO Barbara Humpton said the accelerated production schedule reflects the company’s growing technical edge and its commitment to strengthen U.S. supply chains amid rising global demand for permanent magnets and heightened geopolitical risk. She called the new timeline an “exciting milestone” made possible by the team’s process engineering, scientific capabilities, and operational ingenuity.

The revised schedule stems from strong solvent-extraction piloting. USAR plans to launch its Hydromet demonstration facility in Colorado in early 2026, where five extraction circuits will run continuously for 2,000–4,000 hours to generate final commercial design data. These circuits will isolate high-value heavy rare earths—especially dysprosium (Dy) and terbium (Tb), essential for high-strength magnets—while also producing other strategic minerals such as hafnium and zirconium.

This parallel-processing approach is projected to save tens of millions of dollars and enable completion of a definitive feasibility study by early 2027. With those milestones accelerated, USAR anticipates entering commercial production in 2028, creating earlier cash flow opportunities while bolstering a secure domestic supply chain.

The news also intersects with rising political emphasis on reshoring strategic minerals. During the Trump administration, rare earth supply security became a national priority amid escalating trade tensions with China, which dominates global processing. Trump issued executive actions directing agencies to reduce U.S. dependence on foreign minerals, opened pathways for funding domestic mining projects, and prioritized rare earths in defense procurement. Continued focus on critical mineral independence in a second Trump term will likely further support companies like USAR as they work to build a fully domestic mine-to-magnet ecosystem.

Tyler Durden Wed, 12/10/2025 - 09:30

No Wonder The World Seems Deranged...

No Wonder The World Seems Deranged...

Authored by Charles Hugh Smith via OfTwoMinds blog,

Why We Fail

No wonder the world seems deranged - it is deranged by the immense strength of an Old Guard clinging onto power by any means available even as the world around them spins into incoherence.

There are many reasons why we fail, but perhaps the most critical one is continuing to do more of what has failed. This has many potential sources, from the psychological (self-sabotage, etc.) to the ideological (the market is the solution to every problem, etc.) to cognitive biases (recency bias, etc.).

One enduring source of continuing to do more of what has failed is hard-wired on a deeper level than mere cognitive biases. One way to summarize this is: we can't let go of a story that explains how the world works unless we have a replacement story in hand.

In short: we must have a story that accounts for the world around us. Not having any story is not possible. We can have multiple overlapping stories--Jungian psychology, general theory of relativity, Keynesian economics, and so on--but we need a story that explains key elements of our experience and what we observe and "know," with know in quotes to indicate that the story we embrace defines what we know and what we can know.

Given this need for a story, we can only relinquish a story that's failing to account for what we observe if we have a better story available: and by "better" I mean one that more accurately accounts for what we observe.

This substitution of a new story for an existing story that no longer makes sense (i.e. offers constructive predictions) of the world is easily confused with another human trait: the power of the Powers That Be rest on a foundational story, and replacing this story removes the source of their power. Replacing the story that empowers them discredits their claim to superiority, effectively stripping away their entitlement to authority and their overweening delusions of grandiosity that come with entering the ranks of the Powers That Be.

This desire to maintain the status quo story as part of maintaining their authority and power is the core dynamic described by Thomas Kuhn in his classic The Structure of Scientific Revolutions: the Old Guard who embraced the story that the universe revolves around the Earth resists accepting the new story that the Earth is an inconsequential minor planet that orbits the sun in a local system which is in motion in much larger structures even as all the observational data undermines their story and supports the new story.

Fast-forward to the present and we have multiple Old Guards clinging to ideological stories that no longer track what we observe. Yet like all previous Old Guards, the Powers That Be are loathe to accept a new story that strips away their claim to authority and all the perquisites of power they currently enjoy.

We live in a world torn between the artifices needed to make "the Earth is the center of the Universe" somewhat plausible even as that story crumbles into incoherence and the formation of a new story that actually tracks reality. In terms of a metaphor, consider a glossy "lifestyle" publication that simultaneously touts a new chocolate cake recipe that is simply out of this world and a new diet to slim down in a healthier way than taking meds with horrible side effects that must be taken for life.

No wonder the world seems deranged--it is deranged by the immense strength of an Old Guard clinging onto power by any means available even as the world around them spins into incoherence.

Economic incoherence:

Political incoherence:

Psychological incoherence:

*  *  *

My new book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free)Become a $3/month patron of my work via patreon.comSubscribe to my Substack for free
 

Tyler Durden Wed, 12/10/2025 - 08:05

SpaceX Reportedly Targeting 2026 IPO That Could Rival Saudi Aramco's Historic Listing

SpaceX Reportedly Targeting 2026 IPO That Could Rival Saudi Aramco's Historic Listing

SpaceX is preparing a record-breaking IPO targeting a valuation of roughly $1.5 trillion, with expectations to raise $30 billion or more and debut in the second half of 2026. If the Bloomberg report is accurate, the offering would surpass Saudi Aramco's 2019 listing and become the largest public listing in history.

The report says SpaceX management and advisers are seeking a 2H26 listing that could raise more than $40 billion in stock, making it the largest IPO of all time, well above Saudi Aramco's $29 billion listing.

Current internal valuation (based on a secondary share price of around $420) already places SpaceX above $800 billion, according to the people familiar with the discussions.

The accelerated timetable for going public is partly driven by Starlink's rapid global expansion and its new direct-to-mobile service. Successful Starship test launches are also a significant factor. We published a note last week indicating that Starlink filed a trademark for "Starlink Mobile," indicating the company may soon become AT&T and Verizon's worst nightmare.

SpaceX's revenue is about $15 billion this year and is forecasted to climb to $22 to 24 billion in 2026, according to one source, with most of it coming from Starlink. The company's mini-dish offering has been a major hit with consumers, helping push Starlink's global user base to around 8 million and skyrocketing up and to the right.

The people noted:

SpaceX expects to use some of the funds raised in the IPO to develop space-based data centers, including purchasing the chips required to run them, two of the people said, an idea Musk expressed interest in during a recent event with Baron Capital.

"SpaceX has been cash-flow positive for many years and does periodic stock buybacks twice a year to provide liquidity for employees and investors," Musk wrote on X last week.

He noted, "Valuation increments are a function of progress with Starship and Starlink and securing global direct-to-cell spectrum that greatly increases our addressable market."

Last week, Musk shut down the claim by corporate media that SpaceX was raising money at an $800 billion valuation, calling the report "not accurate."

Musk has previously stated:

The report on SpaceX's IPO plans sent EchoStar shares up 5% in premarket trading. This is because SpaceX recently bought $17 billion in AWS-4 and H-block spectrum licenses.

Let's remind readers that SpaceX is effectively America’s rocket program - and it leads the world by light-years.

In terms of spacecraft upmass... 

View the Bryce Tech report here

Tyler Durden Wed, 12/10/2025 - 07:45

Shellenberger: Civilizational Suicide Behind Europe’s Demand For Censorship Of X

Shellenberger: Civilizational Suicide Behind Europe’s Demand For Censorship Of X

Authored on Dec. by Michael Shellenberger via X,

Today Last week, the European Commission fined Elon Musk’s X €140 million for, it says, breaking laws requiring social media transparency. Specifically, said the Commission, which is the executive branch of the European Union, X broke the law by making its blue checkmarks available to anyone, failing to make its advertising repository transparent, and failing to provide researchers with special access to its data. “Today’s decision has nothing to do with content moderation,” insisted the Commission’s spokesperson.

In truth, the Commission’s fine has everything to do with “content moderation,” which is censorship. The EU wants X to give its data to government-selected “researchers” so they can identify which posts and advertisements should be censored. This is a censorship-by-proxy strategy. The US Department of Homeland Security (DHS) from 2020 to 2022, and Europe today, have authorized government-funded NGOs to demand censorship of social media platforms in an attempt to deceive the public.

As such, the European Commission is spreading disinformation in order to demand censorship, and is openly engaged in a deception campaign aimed at confusing the people of Europe and the United States about what it is doing.

Many Americans may rightly wonder why they should care about what the European government is doing. President Donald Trump shut down much of the US censorship industrial complex, including by the DHS.

The reason we should care is that the goal of the European Commission, like that of the governments of Britain, Brazil, and Australia, is to censor the American people. As Public was the first to report in October, a pro-censorship activist think tank, the Stanford Cyberpolicy Center, hosted a gathering of global censorship officials to censor American social media platforms and American citizens. The Stanford Cyberpolicy Center was home to the fake “researchers” who oversaw the DHS censorship-by-proxy effort from 2020 to 2022.

Moreover, the EU is now in direct violation of the NATO Treaty, under which the US is militarily obligated to defend Europe. The NATO Treaty requires member states to have free speech and free and fair elections. France and Germany are actively and illegally preventing political candidates from running for office for ideological reasons, namely their opposition to mass migration. And the Romanian high court, with the support of the European Commission, nullified election results under the thin and unproven pretext of Russian interference, after a nationalist and populist presidential candidate won.

The X fine comes in the wake of a renewed push for governments to break encryption and read private text messages, known as “Chat Control.” The ostensible goal of this is to combat child abuse, and yet there is little evidence that such a system is needed. The heads of Signal and Telegram have strongly opposed the effort as a violation of privacy and a backdoor that others could exploit.

And last month, the European Commission launched a “Democracy Shield” program consisting of more funding for NGOs and “fact checkers” to “ensure swift reactions to large-scale and potentially transnational information operations. An independent European Network of Fact-Checkers will be set up to boost fact-checking capacity in all EU official languages…” In the past, activist NGOs have demanded that social media companies censor content based on fact-checks, including false ones.

The European Digital Services Act (DSA) rests upon a model of censorship by proxy. The proxies are NGOs, law enforcement organizations, and industry groups designated “Trusted Flaggers.” Noted Lorcán Price of the Alliance Defending Freedom in his testimony to Congress in September of year, “When a Trusted Flagger speaks, the service provider must listen and prioritize the review of the flagged content before that of its regular users. The service provider must review the flagged content to determine whether it violates the law of an EU member state or the EU itself. If so, the service provider must remove or disable access to the content.”

Notably, the European Commission announced its X fine on the same day that the Trump administration released its new security strategy, which reads, “We will oppose elite-driven, anti-democratic restrictions on core liberties in Europe, the Anglosphere, and the rest of the democratic world, especially among our allies.” The document implicitly threatens US commitment to military security for Europe. “It is far from obvious whether certain European countries will have economies and militaries strong enough to remain reliable allies.”

The European Constitution states that “Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.” 

Why then is it now seeking to deny those rights?

Please subscribe now to support Public's defense of free speech, read the full article, and watch the full video!

Tyler Durden Wed, 12/10/2025 - 05:00

Turkey Plans Drone Facility In Pakistan

Turkey Plans Drone Facility In Pakistan

Turkey, long a pioneer in military drone development and production, plans to set up a facility in Pakistan to assemble combat drones, part of Ankara’s drive to boost its defense industry in international markets, Bloomberg reported citing Turkish officials.

Talks over the project, which would see Turkey export stealth and long-endurance drones to be put together in Pakistan, have advanced significantly since October. 

The discussions are part of Turkey’s efforts to grow its defense industry, a strategy that underpins President Recep Tayyip Erdogan’s ambitions to strengthen his influence in the Middle East and further afield. The country has announced deals this year including an order by Indonesia for fighter planes and has plans to supply more arms to Saudi Arabia and Syria.

Turkey’s defense exports increased 30% in the first 11 months of this year to a record $7.5 billion, Haluk Gorgun, who heads the presidency’s defense-industry body, said last Thursday.

Turkey has long-standing ties with Pakistan and is building corvette warships for its navy under a co-production deal, according to both countries. Turkey has upgraded dozens of Pakistan’s F-16s and now wants Islamabad to join its Kaan fifth-generation fighter program, the people said.

The talks to bolster Pakistan’s military capabilities come in the wake of a ceasefire with India following a four-day military clash between the nuclear-armed neighbors in May. Tensions are also high between Pakistan and Afghanistan, leading to a series of clashes, ever since Islamabad accused the Taliban of hosting militant groups that plan attacks on the country.

Tyler Durden Wed, 12/10/2025 - 04:15

Rosneft Oil Cargo Wanders For Weeks As Sanctions Mount

Rosneft Oil Cargo Wanders For Weeks As Sanctions Mount

By Tsvetana Paraskova of OilPrice.com

A cargo of crude oil from sanctioned Russian giant Rosneft has made an 11-week-long meandering trip around Europe and Asia in search of buyers and although it has anchored off a sanctioned Chinese import port, it’s not certain it has reached its final destination yet.

The Fortis tanker with about 700,000 barrels of now sanctioned Russian oil dropped anchor near the Chinese port of Rizhao on the east coast on Tuesday, tanker-tracking data compiled by Bloomberg showed.

The Fortis did not make the entire trip from Russia’s western port on the Baltic Sea. The crude cargo from Rosneft began the journey on the Ailana tanker from the Russian export terminal of Ust-Luga at the end of September.   

Following a trip around Europe into the Mediterranean, and through the Suez Canal, the Ailana arrived near India at the end of October. 

But by then the U.S. had already slapped sanctions on top Russian oil producer Rosneft and the second-largest, Lukoil, to force Russia to genuine talks about ending the war in Ukraine. 

India stopped importing any crude known to have originated from or handled by affiliates of Rosneft and Lukoil to avoid angering the Trump Administration further. 

So the Ailana idled off Mumbai for two weeks, according to Bloomberg’s ship-tracking. Then most of the cargo was transferred onto the Fortis tanker which had shown destinations in India and South Korea before anchoring off the Rizhao port, which the U.S. Treasury also sanctioned in October as part of the pressure campaign on China over its purchases of Iranian crude.   

Despite being very close to the Rizhao port, it’s not certain the Fortis would offload the cargo there, according to Bloomberg. 

The three-month long trip and the ship-to-ship (STS) transfer suggest that buyers, especially in India, are steering clear of the sanctioned Russian companies and their cargoes. 

The U.S. sanctions on Rosneft and Lukoil upended all previous plans by Indian refiners, who hastened to withdraw from the spot market for Russian crude in December.

India’s Bharat Petroleum and India Oil Corporation have bought Russian crude from non-sanctioned companies for January delivery, at a discount of $6-$7 to Brent crude, reports emerged last week. 

Tyler Durden Wed, 12/10/2025 - 03:30

Germany Plans Largest Single-Year Investment In Arms, Equipment In Its History

Germany Plans Largest Single-Year Investment In Arms, Equipment In Its History

At a moment the Russia-Ukraine war grinds on, and as Trump-led efforts to find peace have been frustrated - largely as Zelensky and his backers have balked at agreeing to any territorial compromise as the bases of a deal - Germany is busy transforming its military with an aim to boost Bundeswehr numbers and meet NATO targets.

That news dominated headlines last week, but added to this Bloomberg is newly reporting Tuesday that the troop expansion will coincide with a major tech and armament expansion, given lawmakers are expected to approve a record €52 billion (about $61 billion) in military procurement contracts next week.

This will mark the largest single-year investment in defense equipment in the country's history, underscoring Berlin's renewed push to modernize its armed forces amid the growing European standoff with Russia.

Source: Rheinmetall

As for 2025 numbers, prior approvals brought total defense commitments for this year to above €33 billion. So next year's could more than double, based on the new projected figures.

Much of the money is expected to flow to German defense manufacturers, including major firms like Heckler & Koch and Rheinmetall, both long well-known known for their advanced military equipment.

The new procurement package covers 73 major projects aimed at upgrading the Bundeswehr. Examples of key items slated for purchase include:

  • F-35 fighter jets: Advanced stealth aircraft essential for modern air operations.

  • Joint Strike Missiles: Precision munitions that significantly enhance Germany’s strike capabilities.

  • Aladin reconnaissance drones: Unmanned systems that will improve real-time surveillance and intelligence collection.

  • G95 assault rifles: Modern small arms intended to give soldiers more reliable, effective weaponry.

  • Air defense systems: Critical assets to safeguard German airspace from potential threats.

  • Armored vehicles: New platforms that boost troop protection and mobility in combat.

  • Additional small arms: A range of weapons to better equip personnel for varied missions.

German defense minister Boris Pistorius recently told Germans there was "no cause for concern...no reason for fear...The more capable of deterrence and defense our armed forces are, through armament through training and through personnel, the less likely it is that we will become a party to a conflict at all."

Pistorius and Chancellor Friedrich Merz have set a goal for having Europe's largest military and to be "war-ready" by 2029. Doing its part to promote German militarism, the Wall Street Journal'cited unnamed "military analysts [who] think Russia may be able and willing to attack NATO" by that year. 

Tyler Durden Wed, 12/10/2025 - 02:45

Europe's Brown New Deal

Europe's Brown New Deal

Authored by Dmitry Orlov via ForumGeopolitica.com,

As living standards in Europe decline, the elites are inventing a fictional enemy: Russia. With staged provocations and historical distortions, they want to divert people's anger and justify higher military spending.

The result of the Green New Deal is steadily decreasing living standards throughout Europe stemming from the root cause of lower amounts of affordable energy per capita. In turn, it is superficially stable but steadily worsening living conditions, much more so than an outright crisis, that cause populations to rebel and to overthrow their ruling elites. The ruling elites of Europe know this, do not fancy being strung up on lampposts all over Europe, and seek to at least deflect the blame and, better yet, to engineer an outright crisis which they can then pretend to mitigate.

Their manufactured crisis of choice is the entirely fictional yet imminent attack on the European Union by the Russian Federation. The risible lie used to support this argument is that should the Ukrainian army be routed and should the Kiev regime fall, Russian tanks will then roll across Europe... just like they did in 1945! The thorny question of why Russia would ever be interested in such an escapade is avoided through anti-Russian bigotry: the very fact that the Russians happen to be Russian is taken as sufficient to guarantee their propensity for such insane and self-defeating behavior.

But we, not being irrational anti-Russian bigots, will take the time to answer this question. Let us consider Russia's stated demands for the former Ukrainian Soviet Socialist Republic first created by Lenin and Stalin: its denazification, demilitarization, neutrality and guaranteeing the rights of the Russian-speaking majority (which remains a majority in spite of most heavy-handed official efforts to force people to speak Ukrainian). Note that "conquering all of Europe" or "restoring the USSR" is not on Russia's to-do list.

Three years into Russia's Special Military Operation, we can consider the results.

Denazification: where are the Ukraine's neo-Nazi battalions which sported German Nazi-inspired flags and insignia and whose members were easily distinguished by swastikas and portraits of Hitler with which their limbs and torsos were tattooed? The ones regularly called out for the most war crimes are the Azov Battalion (now a regiment), the Aidar Battalion, the Kraken Regiment, and Right Sector. The Azov battalion was founded by far-right nationalist Andrey Biletsky, which used the Nazi Wolfsangel as its emblem. Pravy Sektor's ultranationalist members played a major role in the Euromaidan revolution of 2014 and in the war in the Donbas in 2014-2015. Aidar battalion was charged with human rights abuses by Amnesty International and Human Rights Watch. Svoboda (Freedom) Party recruited fighters using ultranationalist and antisemitic rhetoric. All of them had a good run and caused much murder and mayhem, but by now much of their initial membership is dead, and although their names are still being used for propaganda purposes by the Kiev regime, the organizations themselves are half-dead. At this point, the Nazi battalions are mostly being used as barrier troops, blocking the raw recruits thrown at the advancing Russians from retreating and trying to kill them when they try to surrender.

Demilitarization: for the first year or so of the Special Military Operation, the Ukrainian forces had no shortage of volunteers, but now there are none. Instead, men are being grabbed off the streets and press-ganged into service (unless they can afford to pay a hefty bribe) while recruitment officers have become filthy rich and universally loathed and despised. Initially, Ukrainian troops were armed with Soviet-era weapons, left over from Ukrainian SSR, or scrounged from all over Eastern Europe by formerly Warsaw pact but now NATO-member countries. The Ukrainian military was organized and operated in accordance with Soviet-era field manuals and rule-books. And it posed a formidable threat and inflicted considerable casualties on the Russian side. The Soviet-vintage weapons supply was gradually depleted and replaced with NATO weapons, which proved much less effective and far easier for the Russians to destroy, designed, as they are, to maximize profits for American defense contractors rather than to provide adequate defense (since nobody is attacking America in any case). The NATO armories are by now substantially depleted as well, as are the funds available to procure more weapons. European leaders in Hungary, Slovakia, Czechia and elsewhere are starting to reject the idea of further military spending on behalf of the Kiev regime.

Meanwhile, back in the Ukraine, Soviet-era manuals and rule-books were replaced with "NATO standards" and training, which proved to be far less effective than the Soviet ones. NATO members learned the methodology from the Americans, who, in turn, learned it from former Nazi German officers, who, if you will recall, lost the war to the Red Army. NATO, and now the Ukrainian army, are thus reliant on military doctrines, organizational principles and operational practices of the losing side. NATO, which is mostly just the Americans, was able to achieve results (though never quite an outright victory) against such weak adversaries as Serbia and Libya, but its favorite technique — indiscriminate bombing campaigns —would have inevitably escalated to a nuclear exchange if it were ever attempted against Russia.

A truly ridiculous situation has emerged: the Ukrainians, role-playing as Nazi Germans, with NATO in a support role, is involved in a high-intensity conventional conflict with Russia, role-playing as the Red Army, and achieving the same end result. Since this implies extreme stupidity, a quick look at national IQ ratings seems warranted: Russia's average is 103; the Ukraine's is at 95.4 — the lowest in Europe. The US does a bit better with an IQ of 99.7 — still very far behind China's 107. "Dumb and Dumber go to War" would have made a good movie title, if it weren't for all the blood and the gore and the Ukrainian military graves stretching beyond the horizon.

From all of this, it is possible to draw the conclusion that Russia is, slowly but surely, succeeding in the stated goals of its SMO by winning a war of attrition against both the Ukraine (in manpower) and NATO (in weapons). With the Ukrainian ultranationalists mostly dead and the Ukrainian and NATO armories depleted, and more and more Ukrainian soldiers refusing to fight, the military operation will inevitably draw to a close, the Kiev regime will fall, the Russian-speaking majority in the Ukraine will reassert its rights and, if all goes well, there will be a return to constitutional order which was destroyed during the US-organized putsch in the spring of 2014.

Will Russia then go on to more Special Military Operations to denazify, demilitarize and defend the human rights of large Russian minorities living in Estonia, Latvia, Lithuania and Moldova? Russia is treating the plight of the Russians still living in these parts as a humanitarian rather than a military issue, easily absorbing the influx. For instance, there is half a million Moldovans now living in Russia while the total population of Moldova is now just two million and falling fast. The picture for the Baltics is similar, although the numbers are too small to matter.

But each of these semi-defunct former Soviet Socialist Republics, lovingly crafted out of bits of the Russian Empire and nurtured by internationalist-minded Bolsheviks to Russia's lasting regret and chagrin, also has certain strategic considerations for Russia: Estonia, together with Finland, almost blocks the Gulf of Finland which provides critically important sea access to St. Petersburg and the nearby ports of Ust-Luga and Primorsk with a total cargo volume of around 170 million tonnes per year. Lithuania provides a land bridge to the Russian exclave of Kaliningrad. Moldova has a separatist region of Transnistria, inhabited by half a million actual Russian passport-holders whom the Russian state is theoretically sworn to defend.

But which of these issues would Russia ever attempt to solve by going on attack? A less than completely insane, deranged Europe should be able to resolve such issues amicably and without recourse to violence. We can only hope that a resounding NATO defeat in the Ukraine will cool the NATO-heads who are currently seeking to escalate the conflict.

If a military conflict involving the four countries mentioned above were to erupt, it is important to keep in mind that they would have to be defended by troops from elsewhere in Europe. All four of these countries are largely emptied of young people: since there are hardly any jobs there, young people leave as soon as they can, leaving behind countries sparsely populated by increasingly destitute pensioners, with more and more empty school buildings being converted to care for the old who can no longer take care of themselves.

In turn, how likely is it that American, British, French, German, Spanish and Italian youths can be drafted and sent to die in a futile conflict to defend Estonia, Latvia, Lithuania (NATO and EU members) and Moldova (not)? If just 16% of German men say that they would definitely be willing to take up arms to defend their own Fatherland, then what percentage of them would be willing to go and die for Lithuania? We can only guess, so let us guess 2% — and these would be the mentally defective, suicidal ones! We can also hope that a less than utterly insane German society would generate considerable political pressure to force their government to just give the Russians whatever they want, which isn't much: open and secure highway and railway corridors to Kaliningrad and widened sea lanes and air corridors through the Gulf of Finland is all it would take to resolve the issue amicably as far as the Baltics.

Currently, however, there seems to be no interest in the West in resolving issues amicably, instead concentrating on staging provocations. On September 10, some number of drones entered Polish airspace. These were subsequently discovered to be Russian-made Gerbera drones —decoys which lack an explosive charge and are used to confuse and to deplete air defense systems. Based on their limited range, they were launched from Kiev regime-held territory. They overflew part of Belarus, where some of them were shot down, while others continued on to Poland. Belarus authorities issued a warning to their Polish counterparts: "Incoming, watch out!"

Polish and other NATO forces scrambled jets — but jets are useless for shooting down such small and slow-moving targets. The drones were Russian-made but there is no evidence that they were Russian-operated. Such drones regularly fall out of the skies in the Ukraine and can be patched up, refueled, reprogrammed and sent on. It is possible that the Russians were behind the provocation if their goal was to demonstrate that NATO is defenseless against even such primitive drones, in which case they did prove their point, but it is far more likely that it was the Kiev regime trying to keep the "Russian aggression" narrative alive.

Such plausibly deniable demonstrations do seem to take place. For example, there was the Chinese weather balloon which overflew continental United States from January 28 to February 4, 2023. Its flight path was a beautiful arc covering Alaska, Western Canada and then the contiguous United States from Washington State to Myrtle Beach, South Carolina. It flew too high for the US Air Force to shoot down but it gradually lost altitude and was shot down by an F-22 Raptor at an altitude of 18,000 meters. It was either an accident (the balloon blown off-course) or a demonstration of the Americans' inability to defend their airspace against... weather balloons!

Just 10 days after the episode featuring unarmed Russian drones flying unhindered over Poland, there followed a scandal with Russian jets supposedly violating Estonian airspace. According to the Estonians, three Russian Mig-31 jets entered Estonian airspace "without permission and remained there for a total of 12 minutes." The jets were on their way from Leningrad region to Kaliningrad region, following the air corridors over the Gulf of Finland and the Baltic which are frequented by air traffic between these two Russian regions and which circumvent the three Baltic countries. In particular, the international free passage corridor between Finland and Estonia is 370km long but only 11km wide and it is theoretically possible that the Migs strayed over the southern, Estonian edge of it. In any case, Mig-31s cruise at 2,500km/h, or 41km/min, and in 12 minutes would have covered 491km, overshooting the mark by some 122km. Essentially, there isn't enough Estonian territory for them to have taken that long.

The Estonian side failed to present any evidence of such a transgression while Russia's defense ministry said that the jets were on a "scheduled flight... in strict compliance with international airspace regulations and did not violate the borders of other states, as confirmed by objective monitoring". That should have been the end of it, but noooo! Was it worth scrambling jets and calling an emergency NATO conference in accordance with Chapter 4 of the NATO charter over such a nonevent, be it intentional, accidental or fictional? Only if the intent was to create much ado about nothing and a tempest in a teacup.

Zooming out from the particulars, such provocations are necessary: the transition from the now defunct Green New Deal to the new Brown New Deal — European militarism, that is — requires an enemy. There are just no other candidates: North Korea is too hot to touch; Iran, if sufficiently provoked, would destroy Israel; and China already has the European and the American economies in a submission hold and will choke out the round-eyes if they don't start to behave. The only safe enemy is Russia, but that is also a problem: Russia is not sufficiently threatening. It is therefore necessary to stage provocations in order to keep the myth of "Russian aggression" alive in the minds of Europeans, in the hopes of convincing, and, failing that, coercing them into accepting high levels of defense expenditure, just as they accepted high levels of spending on "green" energy — for the European ruling elites to pocket.

However, it turns out that halfhearted provocations are hardly enough to keep the myth of "Russian aggression" alive, never mind making it sufficiently compelling to motivate scores of true believers to queue up at recruitment centers, eager to die battling aggressive Russians Ukrainian style. Luckily, barely believable provocations are not all that the collective West has to offer: there are also efforts being made at constructing a compelling image of the enemy. These efforts are quite extensive and intricate and have been in the works for centuries. They include a fanciful rewriting of history that consigns to oblivion all the episodes that fail to portray Russia in an entirely negative light. We will take them up next.

Tyler Durden Wed, 12/10/2025 - 02:00

Modern Warfare: Lessons From Ukraine

Modern Warfare: Lessons From Ukraine

Authored by Adam Sharp via DailyReckoning.com,

Before Russia invaded Ukraine in 2022, we had very little insight into what modern warfare would look like.

How would hypersonic and cruise missiles perform?

What impact would drones have on the battlefield?

How important is artillery in modern warfare?

How relevant are tanks?

And what about electronic warfare?

All these questions have been answered by this war.

Today let’s review what we’ve learned so far. The future of war is looking more science-fiction by the day.

Drones are Key

The soldier, with a GoPro camera strapped to his helmet, hides in an abandoned building. He’s breathing heavily.

Suddenly, the loud whir of a drone appears. The soldier whispers a prayer and takes cover.

BOOM! The drone explodes nearby. Screaming from a wounded soldier erupts.

I’ve seen this situation play out dozens of times. For both Russian and Ukrainian soldiers.

It’s a terrifying scenario. Sometimes I’ll see a video where a group of soldiers is being attacked by dozens of these killer drones at a time. The whine of a drone’s electric engine has become an ominous sound on the front lines.

These new weapons systems are cheap. A $300 civilian drone combined with a $50 RPG warhead can take out a $4 million tank. This is asymmetric warfare perfected. Tanks will likely maintain a role going forward, but it will be substantially diminished.

Each side uses tens of thousands of these drones per month. They’re so common that 12 gauge shotguns have become essential kit for soldiers on the front-lines. It turns out that birdshot is among the most effective counters. See this video for an example of how effective shotguns can be.

But electronic warfare is also becoming a key defense against drones. The Russian anti-gun drone below works by scrambling a drone’s signal, causing it to crash.

Re-purposed civilian drones have already changed warfare forever. At first they were primarily a scouting tool, but now they’ve become a deadly weapon.

The abundance of weaponized drones on the battlefield has made advancing extremely difficult. A small hidden group armed with a few dozen drones can hold back hundreds of vehicles from advancing.

Of course, there are also dozens of new models of military-grade drones being released every year. There are now mass-produced killer drones of all types being churned out by the tens of thousands. We covered some of the more important modelsback in July.

Ground and Sea Drones

It’s not just flying drones. Unmanned ground combat vehicles (UGVs) are also coming into play. The screenshot below shows Ukraine’s new UGVs armed with .50 caliber machine guns.

For now, these ground-based drones are crude with limited range and ammunition. But within a few years they will evolve into intimidating juggernauts roaming the battlefield. In the near future tanks and artillery will also be unmanned.

Drone warfare extends to the seas. And Ukraine has nearly perfected this form of warfare.

Below is the Magura V5, a Ukrainian sea drone which has sunk a number of valuable Russian warships. It was commemorated with the stamp shown below by the Ukrainian postal service.

The latest version of the Magura can carry an explosive payload of 1,400 lbs. That’s enough to sink almost any ship with proper placement. And the latest models even come equipped with anti-air missiles mounted on the top to counter Russian helicopters and jets.

Sea (and submarine eventually) drones will be an absolutely critical aspect of future wars. Imagine a swarm of 50 of these high-speed sea drones converging on an aircraft carrier strike group, while a swarm of airborne drones attacks from above. It’s virtually impossible to stop such an attack.

The age of mega-ships like aircraft carriers is drawing to a close. It seems likely that naval forces of the future will mostly consist of smaller missile boats and submarines.

Modern Missiles

One part of this war which wasn’t a surprise is Russia’s missile advantage. The country has always specialized in long-range fires, because it realized it couldn’t compete with NATO when it comes to traditional airpower (jets).

That investment has proved to be a wise one. Missiles have been a key advantage in this war. From hypersonic models like the Kinzhal and Iskander-M, to cruise missiles like the Calibr and KH-101, they’ve all been critical to Russia’s progress in the war.

The Iskander has been the most effective missile system of this war. The Iskander is a mobile ground-launched hypersonic missile which Russia mass produces.

An Iskander-M launcher via Wikipedia

The Iskander-M has a range of up to 500 kilometers and carries a warhead of up to 700kg (1,534 lbs). It moves fast, with a burnout speed of Mach 5.9. It can maneuver during flight, and contains decoys and flares which are released as it approaches its target. Each launcher carries 2 missiles and is often accompanied by a reloading vehicle.

The Iskander-M has proven very difficult to intercept, as we covered back in October. The Patriot missile defense system has mostly been outmatched by it.

Iskander missiles are used to strike valuable targets such as command centers, Patriot missile defense systems, ammo/fuel depots, and HIMARS rocket launchers.

Speaking of HIMARS, this American-made rocket system has proven to be an extremely effective weapon for Ukraine.

HIMARS launching a guided rocket, via Wikipedia

The HIMARS system fires 227 mm guided rockets at ranges up to 150 km. The warheads are relatively small at around 200 lbs, but have proven effective at taking out enemy command centers and other valuable targets. Each “pod” contains 6 rockets and is disposable. HIMARS can also fire a single larger ATACMS missile with a ~450 lb warhead.

Early on, the HIMARS was a wonder weapon for Ukraine, having devastating effects on Russian ammo/fuel depots and troop concentrations.

However, as the war has gone on, Russia has figured out how to “spoof” the satellite signals used to guide HIMARS rockets, and the weapons system has become less effective as a result. I’m sure the engineers at Lockheed Martin are working on fixing this, but it’s going to be an ongoing game of cat and mouse for the foreseeable future.

This is another takeaway from the Ukraine/Russia war. Electronic warfare is absolutely critical in modern conflicts.

Conclusions

The Ukraine war has been a wakeup call to the world. Drones are going to be the focal point of future conflicts. When a $350 piece of equipment can take out a $4 million tank and 4 specialist soldiers, the game has changed.

Soon, tanks and artillery units will also be unmanned.

Due to the rise of drones and unmanned systems, electronic warfare will become increasingly important. If you can jam the signal, you can stop the weapon. I expect future battlefields to be absolutely flooded with radio signals and microwaves.

We didn’t even get to AI in this piece, but will look to cover that in depth in the future. Drones and missiles are already becoming capable of autonomous action. But both sides are understandably secretive about their capabilities.

The bottom line is that the hunter-killer robots from The Terminator are moving from sci-fi to reality.

Combined with this new generation of hypersonic missiles, it’s a completely different landscape than it was just 20 years ago.

I am hopeful the war in Ukraine ends soon, but it has given us a rare peek into what modern warfare truly looks like. And it’s terrifying.

This is the age of asymmetric warfare. Pinpoint long-range weapons systems have eliminated the advantage of large troop concentrations and capital ships like aircraft carriers.

For a long time, only superpowers like America and Russia had access to these types of systems. Now they have proliferated throughout the world. The implications have yet to be fully realized.

Tyler Durden Tue, 12/09/2025 - 23:25

Western Colleges Help Build China's Digital Dragnet With Taxpayer Funds, Study Warns

Western Colleges Help Build China's Digital Dragnet With Taxpayer Funds, Study Warns

Submitted by The Bureau's Sam Cooper,

Over the past five years, some of the world's most technologically advanced campuses in the United States, Canada and the United Kingdom — including MIT, Oxford and McGill — have relied on taxpayer funding while collaborating with artificial-intelligence labs embedded in Beijing's security state, including one tied to China's mass detention of Uyghurs and to the Ministry of Public Security, which has been accused of targeting Chinese dissidents abroad.

That is the core finding of Shared Labs, Shared Harm, a new report from New York–based risk firm Strategy Risks and the Human Rights Foundation. After reviewing tens of thousands of scientific papers and grant records, the authors conclude that Western public funds have repeatedly underwritten joint work between elite universities and two Chinese "state-priority" laboratories whose technologies drive China's domestic surveillance machinery — an apparatus that, a recent U.S. Congressional threat assessment warns, is increasingly being turned outward against critics in democratic states.

The key Chinese collaborators profiled in the study are closely intertwined with China's security services. One of the two featured labs is led by a senior scientist from China Electronics Technology Group Corporation (CETC), the sanctioned conglomerate behind the platform used to flag and detain Uyghurs in Xinjiang; the other has hosted "AI + public security" exchanges with the Ministry of Public Security's Third Research Institute, the bureau responsible for technical surveillance and digital forensics.

The report's message is blunt: even as governments scramble to stop technology transfer on the hardware side, open academic science has quietly been supplying Chinese security organs with new tools to track bodies, faces and movements at scale.

It lands just as Washington and its allies move to tighten controls on advanced chips and AI exports to China. In the Netherlands' Nexperia case, the Dutch government invoked a rarely used Cold War–era emergency law this fall to take temporary control of a Chinese-owned chipmaker and block key production from being shifted to China — prompting a furious response from Beijing, and supply shocks that rippled through European automakers.

"The Chinese Communist Party uses security and national security frameworks as tools for control, censorship, and suppressing dissenting views, transforming technical systems into instruments of repression," the report says. "Western institutions lend credibility, knowledge, and resources to Chinese laboratories supporting the country's surveillance and defense ecosystem. Without safeguards … publicly funded research will continue to support organizations that contribute to repression in China."

Cameras and Drones

The Strategy Risks team focuses on two state-backed institutes: Zhejiang Lab, a vast AI and high-performance computing campus founded by the Zhejiang provincial government with Alibaba and Zhejiang University, and the Shanghai Artificial Intelligence Research Institute (SAIRI), now led by a senior CETC scientist. CETC designed the Integrated Joint Operations Platform, or IJOP — the data system that hoovered up phone records, biometric profiles and checkpoint scans to flag "suspicious" people in Xinjiang.

United Nations investigators and several Western governments have concluded that IJOP and related systems supported mass surveillance, detention and forced-labor campaigns against Uyghurs that amount to crimes against humanity.

Against that backdrop, the scale of Western collaboration is striking.

Since 2020, Zhejiang Lab and SAIRI have published more than 11,000 papers; roughly 3,000 of those had foreign co-authors, many from the United States, United Kingdom, and Canada. About 20 universities are identified as core collaborators, including MIT, Stanford, Harvard, Princeton, Carnegie Mellon, Johns Hopkins, UC Berkeley, Oxford, University College London — and Canadian institutions such as McGill University — along with a cluster of leading European technical universities.

Among the major U.S. public funders acknowledged in these joint papers are the National Science Foundation (NSF), the National Institutes of Health (NIH), the Office of Naval Research (ONR), the Defense Advanced Research Projects Agency (DARPA) and the Department of Transportation. For North America, the warning is twofold: U.S. and Canadian universities are far more entangled with China's security-linked AI labs than most policymakers grasp — and existing "trusted research" frameworks, built around IP theft, are almost blind to the human-rights risk.

In one flagship example, Zhejiang Lab collaborated with MIT on advanced optical phase-shifting — a field central to high-resolution imaging systems used in satellite surveillance, remote sensing and biometric scanning. The paper cited support from a DARPA program, meaning U.S. defense research dollars effectively underwrote joint work with a Chinese lab that partners closely with military universities and the CETC conglomerate behind Xinjiang's IJOP system.

Carnegie Mellon projects with Zhejiang Lab focused on multi-object tracking and acknowledged funding from the National Science Foundation and the U.S. Office of Naval Research. Multi-object tracking is a backbone technology for modern surveillance — allowing cameras and drones to follow multiple people or vehicles across crowds and city blocks. "In the Chinese context," the report notes, such capabilities map naturally onto "public security applications such as protest monitoring," even when the academic papers present them as neutral advances in computer vision.

The report also highlights Zhejiang Lab's role as an international partner in CAMERA 2.0, a £13-million U.K. initiative on motion capture, gait recognition and "smart cities" anchored at the University of Bath, and its leadership in BioBit, a synthetic-biology and imaging program whose advisory board includes University College London, McGill University, the University of Glasgow and other Western campuses.

Meanwhile, SAIRI has quietly become a hub for AI that blurs public-security, military and commercial lines.

Established in 2018 and run since 2020 by CETC academician Lu Jun — a designer of China's KJ-2000 airborne early-warning aircraft and a veteran of command-and-control systems — SAIRI specializes in pose estimation, tracking and large-scale imaging.

Under Lu, the institute has deepened ties with firms already sanctioned by Washington for their roles in Xinjiang surveillance. In 2024 it signed cooperation agreements with voice-recognition giant iFlytek and facial-recognition champion SenseTime, as well as CloudWalk and Intellifusion, which market "smart city" policing platforms.

SAIRI also hosted an "AI + public security" exchange with the Ministry of Public Security's Third Research Institute — the bureau responsible for technical surveillance and digital forensics — and co-developed what Chinese media billed as the country's first AI-assisted shooting training system. That platform, nominally built for sports, was overseen by a Shanghai government commission that steers AI into defense and public-security applications, raising the prospect of its use in paramilitary or police training.

Outside the lab, MPS officers have been charged in the United States with running online harassment and intimidation schemes targeting Chinese dissidents, and MPS-linked "overseas police service stations" in North America and Europe have been investigated for pressuring exiles and critics to return to China.

Meanwhile, Radio-Canada, drawing on digital records first disclosed to Australian media in 2024 by an alleged Chinese spy, has reported new evidence suggesting that a Chinese dissident who died in a mysterious kayaking accident near Vancouver was being targeted for elimination by MPS officers and agents embedded in a Chinese conglomerate that the U.S. Treasury accuses of running a money-laundering and modern-slavery empire out of Cambodia.

The new reporting focuses on a former undercover agent for Office No. 1 of China's Ministry of Public Security — the police ministry at the core of so-called "CCP police stations" in global and Canadian cities, and reportedly tasked with hunting dissidents abroad.

Taken together, cases of alleged Chinese "police station" networks operating globally, new U.S. Congressional reports on worldwide threats from the Chinese Communist Party, and the warnings in Shared Labs, Shared Harm suggest that Western universities are not only helping to build China's domestic repression apparatus with U.S. taxpayer funds, but may also be contributing to global surveillance tools that can be paired with Beijing's operatives abroad.

To counter this trend, the paper urges a reset in research governance: broaden due diligence to weigh human-rights risk, mandate transparency over all international co-authorships and joint labs, condition partnerships with security-linked institutions on strict safeguards and narrow scopes of work, and strengthen university ethics bodies so they take responsibility for cross-border collaborations.

Tyler Durden Tue, 12/09/2025 - 22:35

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