US Treasury Informed Banks It May Intervene In Japan's Yen, As Market Laughs At BOJ's Own Attempts To Prop Up Currency

While the BOJ understandably refuses to admit it spent a record $140BN (across all markets, $90BN on EBS) to briefly manipulate the Japanese yen higher...

... ahead of yet another disappointing (non-rate hike) decision (according to some calculations, Japan's central bank is about 100 bps of rate hikes behind to stop the ongoing collapse of the yen), others are less shy. 

According to Reuters, similar to the last failed intervention by Japan and citing "a source familiar with the matter", the US Treasury informed a number of ‌banks that it may intervene in the Japanese yen market on Friday and that they should "stand ready for future action."

The notice to banks, channeled through the Federal Reserve Bank of New York, comes a day after Japanese authorities stepped in to prop up the yen, setting ​the currency up for its biggest weekly rise since February, pulling it off of four-decade lows against the dollar (although the yen has since erased much of its gains). 

News of ​the potential intervention by the U.S. Treasury helped push the yen higher against the dollar on Friday. It last traded at ⁠159.22 to the dollar after trading as low 163.65 on Thursday. As shown below, the past 48 hours have seen no less than 5 distinct intervention attempts by the BOJ and/or the US Treasury to push the yen higher. 

The method of potential Treasury intervention was not immediately clear. The Federal Reserve has ​maintained a dollar liquidity swap line with the Bank of Japan and four other major central banks since 2013.

Japan's top currency diplomat ​Atsushi Mimura in Tokyo Friday declined to comment on intervention but hinted at U.S. involvement in the effort to stem the yen's decline, including so-called "rate checks" -- requests to dealers for indicative dollar/yen quotes that are considered a precursor to interventions.

Mimura added that the U.S. support "goes beyond psychological support."

The Reuters report of Treasury's ​notice to banks of potential intervention "fits in with the view in the market that the New York Fed has been carrying rate checks, ​so it's adding to the nervousness of market participants that there could be further intervention," said Lee Hardman, currency strategist at MUFG in London. "It definitely helps ‌support the ⁠idea that there is intervention risk on the table."

US Treasury Secretary Bessent said in a post on  X that the Treasury maintains "a strong relationship and close coordination" with Japanese authorities, but did not confirm the intervention preparations.

He said he looked forward to meeting with Bank of Japan Governor Kazuo Ueda at the U.S.-hosted G20 finance ministers and central bank governors meeting in Asheville, North Carolina, at the end ​of August.

"Japan's economy continues to perform ​well under Prime Minister Takaichi, ⁠Governor Ueda and the Bank of Japan Board, which has demonstrated a strong commitment to monetary and financial stability,"

On Thursday, Bessent told Fox Business Network that the yen "seems very undervalued to ​me" and that Japanese Prime Minister Sanae Takaichi was enacting "strong policies" that would help Japan's economic fundamentals. Bessent ​added that "we think excess ⁠volatility in the yen isn't healthy" and that the yen has "substantially overshot what would be called an equilibrium price."

The last time that the US Treasury intervened directly to prop up Japan's yen was in 2011 as part of a coordinated action by G7 countries to stabilize the currency following the devastating ⁠earthquake and ​tsunami rocked Japan. 

The Treasury last fall intervened to prop up Argentina's peso market ​ahead of parliamentary elections and provided President Javier Milei's government with a $20 billion currency swap line to help stabilize the currency and Argentina's dollar bonds. The aid to Argentina relied ​partly on the Exchange Stabilization Fund, which had total assets of about $217 billion as of June 30.

Tyler Durden Fri, 07/31/2026 - 14:00

Tesla Weighs China Spinoff As Potential SpaceX Merger Looms

Tesla is reportedly evaluating whether to separate its China operations through a sale, spinoff, or other restructuring as it considers a possible future merger with SpaceX, according to a new report from the Wall Street Journal.

The discussions reflect increasing geopolitical tensions between the United States and China, as well as the unique regulatory challenges that would arise if Tesla became part of a company with significant U.S. defense contracts.

The Journal reports that people familiar with the matter say Elon Musk has spent several years organizing Tesla so that its American and Chinese businesses can operate more independently. The strategy is intended to reduce risk if relations between the two countries deteriorate further, particularly in the event of conflict involving Taiwan or tighter restrictions on trade, technology, or critical supply chains.

Separating the China business could also help address concerns from both governments. Chinese regulators may be reluctant to allow a major U.S. defense contractor to oversee Tesla's manufacturing operations, technology, and customer data in China.

At the same time, SpaceX's work with the U.S. government subjects it to strict national security and export control requirements that could create additional complications if the two companies were combined.

China remains one of Tesla's largest and most important markets, accounting for about 18% of the company's sales while serving as a major production hub for vehicles and batteries.

Tesla has already taken steps to reduce its dependence on Chinese suppliers and strengthen the separation between its global operations. Although no decision has been finalized, reports indicate the company is evaluating multiple restructuring options as part of broader contingency planning. Musk has publicly denied the report, calling it "fake news."

Just a few months ago, Tesla's China president was quoted by local media as saying the Shanghai Gigafactory could eventually play a major role in mass-producing humanoid robots. 

The Shanghai Morning Post quoted Allan Wang Hao, a senior executive at Tesla China, who said the Shanghai Gigafactory could provide a "golden key" to mass-producing the Optimus robot.

"Like other Tesla factories, Giga Shanghai can shoulder important responsibilities in manufacturing all new products, including robots, to make our contributions to the company," Hao said. "We are highly confident in welcoming the arrival of a new era of robots."

Tyler Durden Fri, 07/31/2026 - 13:25

Seattle Police Chief Resigns 4 Days After Deadly Festival Shooting

Authored by Kimberly Hayek via The Epoch Times,

Seattle Police Chief Shon Barnes on Thursday sent his letter of resignation to Mayor Katie B. Wilson, four days after a fatal shooting at a food festival, the mayor's office and Seattle Police Department announced.

Seattle Mayor Katie Wilson (C) and Seattle Police Chief Shon Barnes (L) attend the vigil for victims the day after a shooting at Seattle Center during the Bite of Seattle food festival, in Seattle on July 27, 2026. Lindsey Wasson/AP Photo

The shooting at the Bite of Seattle festival at Seattle Center left three people dead and four wounded. One suspect was arrested.

At around 6 p.m. Sunday, a 15-year-old was seen firing into a crowd at the popular three-day festival by at least one officer who was among the dozens of police present. The officer quickly persuaded the teen to surrender. An acquaintance of the teen was among those killed, and four others were wounded, among them a 2-year-old boy.

The aftermath drew sharp public and media criticism focused on communication failures at the scene, and authorities continued searching for at least one more suspect.

After an initial social media post confirming a shooting with multiple victims, nearly five hours passed before additional details were released, including whether any active threat remained. Wilson briefly announced that two people had been taken into custody before retracting the statement, and an official update did not come until a late-night news conference around 11 p.m.

Barnes, who had been attending a law enforcement conference in Dallas at the time of the incident, faced scrutiny alongside city leadership for the delayed and sometimes inconsistent information.

"It has been an honor to serve the Seattle Police Department and this city," Barnes said in a statement released by the mayor's office. "The members of this department show up every single day with professionalism and dedication, and what they did in the aftermath of the Bite of Seattle tragedy reflects the very best of who they are. I am proud of them, and I have deep faith in the future of this department and in the vision for community-based policing that is taking root here."

Wilson thanked Barnes for his service.

"Chief Barnes has served this department and this city with dedication," she said. "The courage and professionalism that the officers of the Seattle Police Department showed deserves to be honored."

Sayles has more than 20 years of experience in law enforcement. He previously served as chief of police in Madison, Wisconsin. He joined the Seattle Police Department in 2025 as deputy chief of administration and investigations.

Wilson announced Deputy Chief Andre Sayles as interim chief as the city conducts a search for a permanent chief.

"My vision for public safety in this city is grounded in transparency, trust, and genuine collaboration with the community," Wilson said. "Keeping people safe requires trust, and trust requires that this department shows up in neighborhoods every day, builds relationships with residents, community organizations, and small businesses, and is accountable to the people it serves."

Sue Rahr, a former Seattle police interim chief and retired sheriff, backed the decision.

"This situation is very difficult, and I admire the mayor for acting decisively to move forward and rebuild strong and engaged leadership inside the department," Rahr said.

Wilson and Sayles will hold a press conference at 11 a.m. Friday at City Hall to introduce the interim chief and detail the process for selecting a permanent chief.

Tyler Durden Fri, 07/31/2026 - 13:05

Spain's Border Invasion Is An Optics Disaster For Open-Border Democrats

The average American has learned about the far-left movement, or more particularly, reformist socialists, otherwise known as the Democratic Socialists of America, in recent months. The DSA says in its own words that its platform is about collapsing America from within. To accomplish that, they must push open borders and flood the nation with millions more illegal aliens, similar to what the Biden-Harris regime of globalists did, among many other nation-killing policies.

The only problem for the DSA is that, after weeks of heightened news coverage in the corporate media about its sinister plan, the news cycle has turned against it. Tens of millions, if not hundreds of millions, of people across the West have just witnessed the border invasion of 50,000 military-aged men into the Spanish enclave of Ceuta at a time when the socialist regime controlling Spain has adopted what some call "suicidal empathy" and welcomed illegals into the country by the millions on a red carpet.

Just kidding, this is the actual footage … pic.twitter.com/jYRpSWM24e

— Elon Musk (@elonmusk) July 31, 2026

In the minds of millions across the West, one political association is becoming increasingly easy to see among the average voter: mass migration from the third world is now seen as a direct consequence of electing socialist governments. Spain has become the latest case study, with the country's socialist-led government planning to grant amnesty to at least one million illegal migrants.

We wrote earlier that President Trump and the GOP would connect the dots for American voters through a media campaign, warning that electing socialists could trigger another U.S. border invasion. The chaos in Ceuta now provides powerful imagery of what Trump argues could happen if the DSA seized more power.

Trump said Friday morning: "It's terrible. Remember that picture. That's going to be us in three years if the wrong side gets in... If the Democrats get in, you will not live a very good life."

.@POTUS: "It's terrible. Remember that picture. That's going to be us in three years if the wrong side gets in... If the Democrats get in, you will not live a very good life." https://t.co/gCSfGLO58i pic.twitter.com/K1F7fhYue0

— Rapid Response 47 (@RapidResponse47) July 31, 2026

Readers should remember that the DSA is a reform-socialist organization. That distinction matters because reform socialists seek to destroy and dismantle the nation and capitalism - and reconstruct the political and economic system along socialist lines.

Second, the DSA has openly promoted an agenda that would collapse border enforcement and facilitate another invasion of illegals numbering in the millions. The economic consequences of the Biden-era migration surge are already visible, particularly in housing. Dallas Fed research estimated that unauthorized immigration accounted for roughly 30% of U.S. home price growth and about 20% of rent increases between 2021 and 2024.

All in all, the Ceuta invasion is strengthening the political case for secure borders across the West - already being spoken about by right-wing EU officials today - while creating an optically devastating moment for socialist parties and the open-border left across the West.

Tyler Durden Fri, 07/31/2026 - 12:55

Immigrant Business Owners Prepare Lawsuit Against Mamdani Over City-Run Grocery Stores

Via American Greatness,

Several immigrant business owners are preparing to sue New York City Mayor Zohran Mamdani over his plan for city-owned grocery stores, Fox News Digital confirmed Wednesday.

The Multicultural Business Coalition’s board voted this week to pursue legal action against the city over Mamdani’s proposal to open five taxpayer-funded grocery stores that would sell food at prices up to 30% below traditional retailers, according to the New York Post, which first reported the vote Tuesday.

MBC Chairman Frank Garcia said the coalition plans to send a letter to Mamdani’s office in the coming days outlining its legal plans to protect bodegas, competing grocers and other small businesses. If the mayor does not respond or agree to meet within three weeks, the group intends to proceed with the lawsuit.

Garcia said he has sought a meeting with the administration for months without success, despite public assurances from a city commissioner that officials would engage with all stakeholders.

“The commissioner said this administration is open to speak to everybody, and they want to hear from everybody,” Garcia told Fox News Digital.

“So I’ve been waiting for a meeting for a couple of months. Why aren’t they having me? We are ready to file the lawsuit if the mayor doesn’t meet with us.”

Garcia described the effort as nonpartisan, saying it is aimed at defending small business owners who are already struggling with rising costs in New York City.

He said lawyers will be ready to file once the three-week window closes, citing support from a coalition of civil rights and community organizations across the political spectrum.

“We’re nonpartisan. So we’re going to meet everybody, Republican or Democrat,” Garcia said, adding that a Democratic Jewish organization and other civil rights groups have offered support and funding for the legal fight.

The coalition was formed earlier this year specifically to oppose Mamdani’s grocery store initiative and includes members from African, Asian, Caribbean, Hispanic, Jewish and Middle Eastern business communities. It has drawn backing from city and state lawmakers, including New York State Senate Majority Leader Andrea Stewart-Cousins.

The looming lawsuit follows Mamdani’s release of additional details on the city-backed grocery plan, which has drawn renewed criticism from opponents who have branded it a “communist fantasy” and a threat to independent grocers already operating on thin margins. The mayor has separately faced pushback over his endorsed rent freeze, which a group of city landlords is also seeking to overturn in court.

Mamdani has defended the grocery store plan as a way to lower food costs for residents, pointing to it as a signature piece of his affordability agenda. Critics, including small business advocates and economists, have questioned whether a government-run retail operation can undercut private grocers without straining city finances or distorting the local market bodegas and immigrant-owned stores depend on to survive.

Tyler Durden Fri, 07/31/2026 - 12:25

Claude Hacked Three Real Organizations During Botched Test

Anthropic's efforts to test Claude's offensive cybersecurity skills produced an unintended real-world result: Its AI models gained unauthorized access to three outside organizations.

The company said the incidents occurred during "capture the flag" evaluations designed to measure whether Claude could identify vulnerabilities, exploit simulated systems, and retrieve hidden information. Claude had been told that the targets were fictional and that its testing environment had no Internet access.

According to Anthropic, a misunderstanding with evaluation partner Irregular left Internet access enabled inside the testing environment. In at least one case, the fictional company named in a challenge shared its name with an active website domain. Claude interacted with the real organization instead of a contained target.

The model exploited vulnerabilities in the organization's infrastructure, extracted information, and obtained access to a database containing several hundred rows of production data.

Anthropic discovered three incidents after reviewing more than 141,000 cybersecurity evaluations. They involved three separate systems: Claude Opus 4.7, Mythos 5, and an internal research model.

In a review of our cybersecurity evaluations, we found three incidents in which a Claude model reached the internet from within or while interacting with a third-party evaluation environment, and then gained unauthorized access to the real systems of three different organizations. Our post describes what happened, how it happened, and what we’re changing. We encourage other AI developers to perform similar reviews.  -Anthropic

"In all cases, Anthropic's evaluation prompt specified to Claude that its environment was a simulation and that it had no internet access," the company said. "Due to a misunderstanding between us and our evaluation partner, this was not the case, and internet access was available."

The models appear to have carried out the offensive-security tasks they were assigned while operating with incorrect information about whether their targets were simulated. 

Capture the Flag

Capture-the-flag exercises are widely used to train and evaluate cybersecurity skills. Participants may be asked to inspect software, reverse-engineer a service, identify a vulnerability, or exploit a deliberately insecure system to recover a hidden token known as the flag. For a human security researcher, the scope of such an exercise is normally reinforced through explicit authorization, controlled infrastructure, and technical barriers separating the challenge from unrelated systems.

Claude received instructions saying that those boundaries existed. 

Once Internet access was available, the agent could resolve public domains and interact with real infrastructure. A naming collision between a fictional target and an actual organization was enough to turn a benchmark task into an unauthorized intrusion.

Anthropic said it stopped the evaluations after identifying the possibility that Claude had accessed the public Internet. The company described the incidents as the result of multiple contributing factors but said it would approach the fixes as though the responsibility were Anthropic's alone.

The story echoes an OpenAI incident where models escaped containment. During that company's own cybersecurity testing, two models exploited a software vulnerability in their evaluation environment, reached the Internet, and accessed systems belonging to AI platform Hugging Face.

A system does not need motives, self-preservation, or an understanding of the outside world to cause damage. It needs effective offensive capabilities, sufficient autonomy, and access that its operators did not intend to provide.

Awkward timing for Anthropic

The disclosure comes as Anthropic is reportedly preparing for a potential initial public offering as early as this year. That adds financial and regulatory stakes to questions about how the company evaluates models with advanced cybersecurity capabilities.

Mythos 5, one of the models involved, had been provided to a limited number of partners and attracted attention for its ability to detect and exploit software vulnerabilities. Those capabilities can be valuable for defensive research, automated testing, and vulnerability discovery. They also raise the cost of mistakes in target selection and evaluation design.

Three incidents among more than 141,000 reviewed evaluations represent a small proportion of the tests. But the relevant risk is not simply how often a containment failure occurs, it's what a sufficiently capable agent can do during the rare evaluation in which the safeguards fail.

Tyler Durden Fri, 07/31/2026 - 12:05

UMich Sentiment Surges To Pre-War Highs; AI Fears Becoming "Salient"

Having rebounded from record (46 year) lows in June, University of Michigan's final July Sentiment survey was expected to show further improvement MoM, but a slight decline from the preliminary print as gas prices started rising again following the apparent end of the MoU-driven MidEast ceasefire.

However, from 49.5 final for June, UMich headline print rose to 54.4 preliminary and has now jumped further to 55.2 (54 exp) final - the highest since February.

Both Current Conditions and Expectations sub-indices also rose with the latter jumping most and the former down very modestly from the preliminary print.

Broad-based improvements were seen across all groups by income, education, wealth, age, and political party.

“Consumers remain focused on pocketbook issues like purchasing power, while political or military developments remain more in the background,” Joanne Hsu, director of the survey, said in a statement.

Even Democrats are getting more enthused...

Year-ahead inflation expectations ticked down from 4.6% in June to a still-elevated 4.2% this month. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations held steady from last month at 3.3%, remaining a bit higher than the 2.8% to 3.2% range seen in 2024.

Additionally, five-year expected business conditions reached a 12-month high.

Finally, the report mentioned artificial intelligence has become a “salient” factor for consumers.

Hsu said the comments have been negative on net, though consumers cited both positive effects on productivity and negative impacts on the job market.

Tyler Durden Fri, 07/31/2026 - 10:09