Individual Economists

Europe 2.0, Beyond Brussels: The End Of The European Union As We Know It

Zero Hedge -

Europe 2.0, Beyond Brussels: The End Of The European Union As We Know It

Authored by Frank-Christian Hansel via American Greatness,

Europe has reached the end of an era. Not the end of its history, but the end of its false form. For decades, the European Union served as the great substitute project of a continent that no longer dared to think politically. It promised peace without power, order without a people, unity without roots, and prosperity without cost. That was its founding lie, and it was a lie from the very beginning.

Political order does not grow out of procedural routines, commission papers, or moral self-incantation. It grows out of peoples, interests, borders, loyalties, and the willingness to defend what is one’s own. Legitimate authority rests on a people and its consent, not on an apparatus and its expertise. That older idea—that government draws its life from the governed rather than from the competence of its administrators—is precisely what Brussels has spent two generations trying to administer away.

That is why today’s EU is not the high point of European history but its bureaucratic state of exhaustion. It is too centralized to be free and too artificial to be binding. It commands an immense body of rules and possesses no sustaining political soul. It has institutions, but not the kind of historically grown legitimacy that holds a community together across generations.

And so it answers every crisis with the same reflex: more centralization, more redistribution, more standardization, more discipline. What is sold as the solution is only the problem enlarged.

Europe is not failing because there is too little Brussels. Europe is failing because there is too much Brussels. It is failing because of a political class that no longer sees the continent as a historical space but as an object of administration. It is failing because of an ideology that treats every organically grown difference as a defect and therefore regards peoples, traditions, and national particularities as raw material to be processed. And it is failing because of a functional elite that has learned to disguise power as morality and to pass off its own interests as universal values.

There is a name for this kind of governance: the administrative state—the permanent, unelected layer that survives every election, answers to no voter, and grows whether the public wants it to or not. Brussels is that layer raised to the continental power and freed from even the inconvenience of a national electorate. There is no European demos to vote the managers out. That is not a flaw in the design. It is the design.

The real scandal of Europe today is not even its material mismanagement but its intellectual arrogance. The Union behaves as though it could suspend history—as though cultures could be harmonized like technical standards, as though political loyalty could be decreed the way one issues a packaging regulation. As though a continent of radically different historical experiences, economic structures, demographic trajectories, and security realities could be pressed into one standardized form without damage. Yet the damage is already visible. The EU is not unifying Europe. It is wearing it down.

To see why, it helps to return to a text that saw the whole thing coming. In 2011, long before today’s disruptions, the German social scientist Gunnar Heinsohn published an essay whose title I have borrowed and broadened here: “Europa 2.0: Neuzuschnitt der Alten Welt” (Europe 2.0: Recutting the Old World). It was written in the first panic of the euro rescues, and it has aged with uncomfortable precision.

Heinsohn’s argument was not, in the first place, a complaint about Brussels. It was an argument about arithmetic. He began with the chain of liabilities that the productive European middle class—the net taxpayers, the people who put in more than they take out—had quietly been made to guarantee. First, the bank rescues of 2008. Then the Greek bailout and the great euro backstops of 2010, which shielded bondholders and the comfortable classes of the periphery at the expense of taxpayers who were never asked. Then the implicit guarantees extended to the aging, shrinking states of the European East. And beneath all of it, an ever-growing domestic population to be supported for life. The decisive point was simple and merciless: when all these promises—upward, downward, and outward—come due at once, no one will be left to bail out the people who were made to do the bailing.

The mechanism is general. A government that collectivizes debt, anonymizes liability, and blurs responsibility will always end by taxing the people who never agreed to the bad decisions of others. Heinsohn merely showed that the European Union had written this principle into its very constitution. Any order that treats difference primarily as a financing problem must degenerate into a transfer machine. And a transfer machine is, sooner or later, politically hated—because it morally expropriates the productive and politically infantilizes the weak, rewarding neither virtue nor reform but only dependency. What it produces in the end is not solidarity but resentment: a bureaucratically managed exhaustion of the common good.

But Heinsohn’s deeper move was to set this fiscal machine on top of a demographic one—and here the argument becomes genuinely radical. The transfers are not merely unjust; they are mathematically doomed, because the population expected to honor them is collapsing. Across much of Europe, and most severely in the East, birth rates have run far below replacement for two generations. The productive base shrinks while the dependent base grows and ages. You cannot underwrite an expanding empire of guarantees with a contracting nation of guarantors. The numbers do not forgive ideology.

From this, Heinsohn drew a conclusion that polite Europe still refuses to say aloud: not all human capital is equal, and a civilization that loses its capacity to attract and cultivate talent does not stay rich for long. Innovation is decided at the top of the distribution, by the density of the highly capable, not by raising the average.

Importing large numbers of low-skill dependents, he argued, costs billions and replaces not a single first-rate mind, while a society that selects for ability—as the Swiss and the Danes already do—renews itself. Strip away the provocation and a plainer proposition remains: a serious country runs immigration in its own interest, as a selective system, choosing the people it needs rather than absorbing whoever happens to arrive. A civilization unwilling to reproduce itself has, in any case, already mortgaged its own future. Whatever one makes of these claims, Heinsohn’s 2011 essay reads today less like a period piece than like a forecast.

What, then, is the alternative? Heinsohn’s answer was not “more Europe,” and it was not “back to the nation-states of 1914.” It was a recutting—a deliberate sorting of the continent into political spaces that can actually function, each organized around two hard criteria: a currency that is genuinely sound and a society genuinely attractive to the talent it needs.

His model for both was not an abstraction. It was a sort of Switzerland.

Consider what Heinsohn admired in it. Its central bank does not monetize the debt of badly run governments; it will not take their paper as collateral and will not buy it—which is exactly why a country of fewer than nine million can hold a reserve-grade currency. Sound money, enforced by the refusal to bail anyone out. Its cantons do not subsidize one another into permanent dependency; there is no grand equalization scheme shuffling money from the competent to the connected. Instead, the cantons compete—for innovative firms, for capable workers, for investment—and grow their revenue by winning that competition rather than by lobbying for a larger share of someone else’s. Tax competition, fiscal discipline, and federalism as a sport rather than a shakedown. And immigration authority sits at the local level: it is the communes, not a distant central ministry, that decide who settles where—which is why the children of Swiss immigrants tend to perform like Swiss children rather than like a permanent underclass parked wherever a bureaucrat finds room.

The list of features is easy to state: sound money, decentralized authority, local control over who settles where, tax competition in place of redistribution, and a central government that coordinates only the few things that genuinely must be coordinated and leaves the rest to the level closest to the decision. The European word for this is subsidiarity. Heinsohn’s quiet provocation was to note where it actually survives—not in the European Union, but in the small, stubborn confederation that the Union spent two decades trying to fine, pressure, and squeeze into compliance.

Heinsohn then took the principle to its conclusion and asked what Europe would look like if it were organized by those criteria rather than by inherited borders. The criteria themselves are the point, and they are worth stating plainly, because they describe a direction rather than a destination:

A viable space, in his account, is one that can secure its own sound currency without monetizing anyone’s debt; one attractive enough to draw and keep the talent it needs rather than merely the dependents it acquires; one governed closely enough to its people that consent is real and not merely assumed; and one freed from open-ended liability for the failures of others. Spaces that can meet those tests cohere on their own. Spaces that cannot have to be held together by transfers and decree—which is the very condition that Europe is now exhausting itself trying to maintain.

From this, he sketched a deliberately provocative map—not a forecast and not a plan, but a way of making the criteria concrete. He imagined the continent re-associating into a handful of post-national economic and cultural spaces, sorted by affinity and by their capacity to meet those tests:

A northern federation gathering the Scandinavian countries with the prosperous German north. An Alpine federation built around the Swiss core, drawing in the wealthy regions of southern Germany, Austria, and northern Italy that already share its economic temperament. A revived commonwealth across the old Polish-Lithuanian space to the east. A Mediterranean union with its own southern currency and its own vocation, reaching from the Iberian Atlantic to the eastern shore of the sea. And where the old centers of the postwar order remained, a residual western bloc around Berlin, Paris, and London. He even allowed himself the heresy of supposing that productive regions might one day choose, politically, which space to belong to—that belonging itself might follow function rather than inheritance.

I set this out as Heinsohn set it out: as a thought experiment offered to clarify a direction—not as anyone’s program, and certainly not as mine. Its value lies not in the borders it draws but in the question it forces. Political belonging is not a law of nature fixed forever by the cartographers of 1815, and spaces that generate neither real sovereignty nor genuine loyalty have no claim to permanence simply because they happen to exist. Heinsohn noted, dryly, that his redrawn map was the conservative, earthbound option—far more grounded than the libertarian dream of seasteading, of escaping onto artificial islands beyond the reach of any government at all. When the sober alternative is a recut continent, and the radical one is floating cities in international waters, you have a fair measure of how exhausted the inherited order has become.

The usable core of all this is not the map, but the principle, and the principle is what I want to carry forward. Europe should no longer be conceived as a project of uniformity but as a system of differentiated political spaces. This is not a regression into petty-state fragmentation. It is the overdue recognition of European reality. The continent has always been most productive when it combined diversity with form—when its political units stayed manageable, legitimate, and capable of acting, and broader cooperation happened only where it genuinely made sense. It grew weak whenever it manufactured institutions that produced neither real sovereignty nor genuine belonging.

A new Europe would therefore begin with a ruthless disentangling. Everything that does not absolutely require continental regulation goes back to sovereign states—not out of nostalgia, but out of reason. Border protection, major infrastructure corridors, selected security cooperation, raw-material and energy security, and certain trade questions: these may need joint coordination. But cultural policy, social policy, identity questions, vast stretches of economic and regulatory law, and above all the question of democratic self-government do not belong to a supranational apparatus. Wherever politics becomes existential, the decision must move back toward the people and the state.

This is also where the deepest and most delicate point lies, the one that separates a serious continental order from a managed bloc. Europe can think as a continent only if it stops organizing itself around a permanent architecture of enemies. An order built primarily against Russia is, in the long run, not a European order at all;

it is the strategic extension of outside interests carried out on European soil. A viable continental order would have to find a way to include Russia rather than excommunicate it forever.

This is not sentimental Russophilia, and it is not a denial that real conflicts exist. It is the recognition of a basic fact of geopolitics: a continent that permanently writes its largest eastern power off the map turns itself into the forefield of others. Peace does not come from moral outrage. It comes from a durable order of power, interests, and space—balanced security interests, limited spheres of influence, and reorganized economic interdependence. Whoever defines Russia out of Europe defines Europe as a geopolitically incomplete space, dependent for its security on decisions made elsewhere. And a continent that will not defend, fund, or even define itself can hardly be surprised when its allies begin to ask why they should keep doing so on its behalf.

And here Heinsohn’s monetary intuition returns one last time. He imagined that even the names of currencies could keep a European feeling alive—a Nordic crown, an Alpine franc, and an eastern and a western and a Mediterranean euro, competing for international trust. Strip away the specifics, and the principle is straightforward: competition disciplines money as it disciplines everything else. A single currency imposed on radically unequal economies is not a symbol of unity. It is a mechanism for converting other people’s indiscipline into your own inflation.

What follows from all this is a single European principle: cooperation without fusion. Proximity without centralism. Continentality without empire. Europe would no longer be a union of ideological conformity but a confederation of historic peoples and political spaces—able to breathe again because not everything would have to be forced to the same institutional, economic, and moral temperature. In place of harmonization at any price: the freedom to shape one’s own order. In place of integration as an end in itself: cooperation grounded in shared interests. In place of a normative superstate: a Europe of different speeds, forms, and focal points.

And that, precisely, is the only road to genuine European sovereignty. Europe will not become sovereign because Brussels accumulates more powers. It will become sovereign only when its states and peoples recover real political substance and form alliances on that basis. Sovereignty requires capabilities, not rhetoric—industrial, military, technological, and cultural self-assertion. A Europe that obsesses over censorship and regulation at home while failing to secure its borders, its energy, and its strategic infrastructure abroad is not sovereign. It is a normative colossus on geopolitical clay feet.

This is where the mask of European moralism finally falls away. The Union speaks of democracy while narrowing the range of permissible opinion. It speaks of diversity while pursuing cultural conformity. It speaks of peace while manufacturing new lines of confrontation through ideological bloc logic. It speaks of openness while losing control of its borders. It speaks of resilience while making itself dependent. None of this is an accident. It is the logical result of a project that replaced political reality with normative self-staging.

The alternative is not a naive nationalism but a European realism, a realism that understands that peoples do not vanish because elites find them embarrassing; that spaces do not lose their meaning because technocrats redefine them as functional zones; that history does not end because a bureaucracy tries to regulate it away; and that order endures only where freedom, belonging, and responsibility are brought back together.

Europe therefore does not need a cosmetic correction of its institutions. It needs a change of political form: away from a morally charged administrative union and toward an order of the continent; away from abstract universal ideology and toward a concrete civilizational politics; and away from the permanent effort to define the European against the very conditions that made Europe possible. Europe must stop trying to emancipate itself from its own inheritance and learn again to draw strength from it.

Only then could today’s zone of crisis become a historical space once more: a Europe no longer under the guardianship of its own apparatus; a Europe that does not treat every internal difference as a threat or every external border as a moral failing; a Europe that takes itself seriously as a continent—plural in its forms, clear in its borders, sober in its interests, and resolved to defend itself.

The time of the Union as we know it is running out. The only question is whether Europe will shape this transition itself—or whether it will be torn apart by the contradictions of its own artificial construction and have its place in the world decided by others.

The alternative is clearer than many care to admit:

Either Europe becomes political again - or it remains an apparatus until other powers decide its place in the world.

Tyler Durden Sun, 06/07/2026 - 08:10

Most Teens Aren't Going To Social Media For Politics

Zero Hedge -

Most Teens Aren't Going To Social Media For Politics

Teens turn to social media for multiple purposes: to catch up with friends, for entertainment and to connect with others over similar interests.

However, as Statista's Anna Fleck reports a possible misconception, however, is that many are going to platforms such as Instagram, Snapchat and TikTok for politics.

According to a recent survey of 1,458 teenagers in the United States, conducted between September 25 and October 9, under one in three respondents said that keeping up with politics or political issues was a main personal draw towards each of the respective social media platforms.

 Most Teens Aren't Going to Social Media for Politics | Statista

You will find more infographics at Statista

While most teens said that politics was not one of the main reasons for using the apps, U.S. teens were most likely to turn to TikTok and Instagram for political content (29 percent and 28 percent, respectively, said they would), followed by Snapchat (19 percent).

More popular reasons to use TikTok were entertainment (96 percent) and to know what’s going on with family and friends (86 percent).

When it comes to social media platforms as a source for news, then TikTok was also more commonly chosen over the other two.

Still, under half of respondents (45 percent) picked it as a main reason for using the platform, followed by 39 percent for Instagram and 26 percent for Snapchat.

Pew analysts found that Black teens were more likely than white and Hispanic teens to turn to TikTok for news, product recommendations and keeping up with athletes or celebrities and connecting with others.

Meanwhile, white teens on Snapchat were most likely to message people every day.

Tyler Durden Sun, 06/07/2026 - 07:35

A Serious Country Does Not Swap Its Greatest Leader On Banknotes For Little Animals

Zero Hedge -

A Serious Country Does Not Swap Its Greatest Leader On Banknotes For Little Animals

Authored by Steve Watson via Modernity,

The Bank of England has now admitted the quiet part out loud. Historical figures including Winston Churchill were removed from future banknotes after researchers told officials they were "elitist and divisive."

The move replaces British legends with wildlife in a calculated step to sideline national heroes and accelerate cultural replacement.

This is not a neutral design update. It is institutional capture in action, where the man who rallied Britain against Nazi tyranny gets sidelined because focus groups and consultants found him too problematic for modern sensitivities and would prefer to look at a Fox or a hedgehog instead.

The revelation aligns precisely with plans first laid out months earlier. Back in March, the Bank announced it would phase out portraits of Churchill on the £5 note, Jane Austen on the £10, JMW Turner on the £20, and Alan Turing on the £50. In their place would come native British wildlife, plants, and landscapes.

King Charles III would remain on the front of the notes. Officials claimed the shift followed a public consultation with over 44,000 responses, where around 60 percent supposedly favored nature themes for security reasons and to celebrate the environment.

Critics at the time called the idea absurd and bonkers. They warned it represented a war on history and showed the Bank had been captured by progressive ideology. One former business minister said notes should honor the historical giants who shaped the nation rather than fuzzy animals.

Another asked what came next - squirrels running the economy. Observers noted it fit a wider pattern of erasing or downplaying Britain's past under the banner of progress and diversity.

That pattern includes London museums draping portraits to "reclaim Caribbean history," the removal of Shakespeare, Thatcher, and Churchill artworks from 10 Downing Street in favor of pieces by artists with Caribbean ties, Cambridge panels labeling Churchill a white supremacist whose empire was supposedly worse than the Nazis, and a London primary school renaming "Churchill House" after Marcus Rashford to promote diversity. Statues of Churchill have faced vandalism and calls for removal, including during pro-Palestine protests earlier this year. Each step chips away at the symbols that once unified national memory.

Now the June reporting makes the motive unmistakable. Research commissioned by the Bank concluded that figures such as Churchill, Alan Turing, and Jane Austen were "contentious and not representative of the UK's cultural and natural diversity." Officials received advice to replace the portraits with nature images because historical figures represented "a backward-looking vision of the UK that carries too great a risk of division and controversy."

The Bank has insisted the decision was not driven by that specific research but by an earlier poll showing public preference for nature. Yet the Freedom of Information details tell a different story about how the process unfolded behind closed doors.

A public consultation is currently running on the wildlife shortlist. Proposed replacements include an owl, hedgehog, badger, or common frog. One commentator summed up the national mood: "We are not a serious country anymore."

Some of the animals under consideration are not even native to Britain. That detail alone exposes the move as more than harmless environmental appreciation. It functions as a psyop to further erode British culture - stripping away recognizable national symbols and replacing them with generic or imported imagery that weakens any sense of rooted identity.

This fits the same ideological framework that has infected other institutions. DEI priorities and critical race theory obsessions treat any strong assertion of British heritage as inherently suspect. The man who helped defeat fascism is recast as "divisive" while the focus shifts to animals that supposedly better reflect "cultural and natural diversity." The result is a currency that no longer celebrates the people who built and defended the country. It celebrates detachment instead.

The broader assault continues without pause. Schools, museums, government buildings, and now the Bank of England itself participate in softening, diluting, and apologizing for the past. Historical giants are judged not by their achievements but by whether they pass modern committee tests on representation. When they fail, they are quietly retired in favor of whatever the latest advisory group deems safe and inclusive.

Britain's wartime leader did not save the nation so that unelected researchers and captured bureaucracies could later declare him unfit for the money supply. Yet that is exactly what has happened. The same institutions that owe their continued existence to Churchill's stand now treat his image as a liability.

A country that systematically removes its heroes from public view is not evolving. It is forgetting how to value itself. The Bank of England's choice to prioritize "non-divisive" wildlife over the figures who actually shaped the United Kingdom sends a clear message: national pride is now considered too risky for everyday transactions.

Britons who still believe their history is worth defending have every reason to push back. This is not about banknote design. It is about whether the nation retains the confidence to honour the people and events that made it possible. Replacing Churchill with a hedgehog is not progress. It is surrender dressed up as sensitivity.

Tyler Durden Sun, 06/07/2026 - 07:00

10 Sunday Reads

The Big Picture -

Avert your eyes! My Sunday morning look at incompetency, corruption and policy failures:

“This Is Not Financial Advice”: How finfluencers prey on economic desperation. NOEMA on the meme-finance ecosystem hiding behind the disclaimer — and what regulators have already let slip past it. Long, careful, frustrating. (NOEMA)

This Is Why America Can’t Have Robots And Other Nice Things: A sharp piece on the actuator and component supply-chain story underneath US humanoid-robotics ambitions. China owns the parts; everything else is a press release. Westmag and Atlas Motion Systems are here to fix the actuator crisis (Core Memory) see also How the U.S. Fell Behind in Adopting the Electric Car: Adoption of electric cars has taken off globally — electric vehicles (EVs) made up a quarter of new car sales in the world in 2025. The United States was in the lead in launching the modern electric car — Tesla’s Model S was first delivered in 2012 — and, until recently, U.S. policies provided substantial encouragement to auto manufacturers and households to adopt the technology. However, China has dominated the recent global surge in production and sales of EVs, and Europe has also overtaken the U.S. in EV adoption. What explains the U.S.’s lagging performance? (Econofact)

Prediction Markets Are Learning From the Addiction Industry: TNR on Polymarket and Kalshi quietly absorbing the lobbying, retention, and UX playbook of online gambling. The “information market” framing surviving on hopium and a federal preemption argument. A new coalition of industry influence-peddlers is forming, tasked with defending these nascent businesses from regulation at all cost. (New Republic)

Cloud Hoarders: Today clutter creeps beyond the home. We are constantly bombarded with digital clutter — emails, texts, and voice messages from every realm of life. And we create our own, snapping photos or jotting down notes, likely with the intention of allowing these creations to “sit” in seemingly infinite “spaces” in perpetuity, mostly out of sight and mind. When we run out of storage space, companies are more than happy to trade gigabyte-sized slices of The Cloud for dollars, and so our digital footprint swells.Who is coming to rescue us from our digital stuff? An essay on the people now accumulating physical things — vinyl, books, prints, old hardware — as a deliberate rebuke to the streaming-everything model. The vibe-shift, told without smirk. (Liberties Journal)

The World Cup Is Sports Betting’s Biggest Moment—and Maybe Its Last Hurrah: Gamblers are expected to wager $50 billion on the coming World Cup, but signs of betting fatigue are emerging across the U.S. Biggest Moment – and Maybe Its Last Hurrah: Gamblers are expected to wager $50 billion on the coming World Cup, but signs of betting fatigue are emerging across the U.S. (Barron’s)

America’s Consumer Corporate Protector: As acting director of the Consumer Financial Protection Bureau, Russell Vought has undone years of agency enforcement work. Apple, Walmart and Toyota have all benefited from Russell Vought’s vision for the Consumer Financial Protection Bureau. (Bloomberg Free)

Nothing Explains Trump’s Washington Quite Like the Reflecting Pool Scandal: David A. Fahrenthold on a controversy that’s deeper than it looks. Among the approximately 1.776 billion scandals of this Trump administration, one has recently stood out to me: the ongoing boondoggle at the Lincoln Memorial Reflecting Pool. What was supposed to be a minor maintenance project has somehow become one of the purest reflections of Trump-era governance, involving a no-bid contract, a golf-club manager from New Jersey, and the color “American Flag Blue.” (Slate) see also He Blew the Whistle on DOGE. Then His Brakes Were Cut: A federal IT staffer filed a complaint about DOGE, then went public. Shortly after Elon Musk boosted a post calling his claims false, his brake lines were cut. Now he’s suing for defamation. Wired on the federal contractor who went public on DOGE’s data handling — and what happened to his car the week after he testified. The kind of detail you cannot launder out of the story. A federal IT staffer filed a complaint about DOGE, then went public. Shortly after Elon Musk boosted a post calling his claims false, his brake lines were cut. Now he’s suing for defamation. (Wired)

“Alligator Alcatraz” detainees say guards deny them food and clean water until they sign English documents: The Guardian with sworn statements from inside the Florida detention site — the basic-rights violations the administration keeps refusing to comment on. Reads exactly as bad as it sounds. Detainees say they’re given ‘rotten’ water and denied meals for not signing papers in English that they don’t understand (The Guardian)

Screwworm In Texas Cattle Could Drive Up Beef Prices—After DOGE Axed Prevention Efforts: A flesh-eating parasite that was largely eradicated from U.S. livestock in the 1960s has been found in a 3-week-old calf in a south Texas border town, the USDA confirmed, a threat that could drive the already soaring price of beef even higher after Elon Musk-led government cuts slashed ongoing efforts to prevent its spread. (Forbes) see also How Funding Cuts Left the World Vulnerable to Ebola: Bloomberg with the long, sourced version of the USAID-cuts-meets-Ebola-outbreak story. The line between fiscal policy and disease vector, drawn in detail. (Businessweek)

The World Cup According to Gianni Infantino: The New Yorker’s long sit-down with the FIFA president on the eve of the expanded tournament. As damning as a print profile can be while staying on-record. Infantino is remaking global soccer in his own image. Can the sport survive him? (New Yorker)

Video of the day: Every Metro System Should be this Beautiful

Be sure to check out our Masters in Business interview this weekend with Chris Davis, Chairman and Portfolio Manager of Davis Funds. The firm oversees $20 billion in client assets, with Davis (and colleagues) co-investing $2 billion in their own mineus alongside shareholders. Davis was named Morningstar’s Portfolio Manager of the Year; he also sits on the boards of Berkshire Hathaway and Coca-Cola.

 

Globalization Uber Alles: the FTAA & the Decline of America (2011)

Source: Friends of Liberty

 

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

An Emerging Market Crisis In Oil-Poor Asia?

Zero Hedge -

An Emerging Market Crisis In Oil-Poor Asia?

Authored by Satyajit Das via NewIndiaExpress,

Reliable availability of cheap energy is, as the Iran war highlights, essential to modern economies and societies, at least for the foreseeable future. Shocks divide the world into the oil haves and oil have-nots.

Alongside higher energy prices, shortages of petrochemical derived chemicals will affect agriculture, mining, plastics, textiles, semi-conductors and construction. Given that even if the conflict was to end with a lasting agreement it would take months or years for restoration of normality, the effects are likely to be severe.

Europe, already affected by their decision to cut-off Russian gas supplies, and Japan, are affected. But the major consequences will be felt across oil poor South and East Asia.

 

The extent of the damage depends on pre-existing vulnerabilities, including insufficient currency reserves, poor public finances, trade imbalances, high debt levels, especially foreign currency denominated borrowings, reliance on overseas capital, narrow industrial bases, and poor contingency plans.

The Table below sets out some key vital statistics

Notes: all figures are mainly for 2025

For energy importers, supply disruptions work through several pathways. Import costs rise flowing through into the economy. It most immediate manifestation is a widening current account deficit.

Given the pervasive impact of transport costs, prices increase across the board. Rising input expenses for businesses affect profitability and, ultimately, viability. As essentials cost more, the fall in surplus income decreases consumption slowing the economy with resultant unemployment. Tax revenues fall and welfare spending kick in worsening government budgets. This is frequently aggravated by vote buying subsidies, frequently for fuel costs, and transfers to alleviate cost of living pressures.

Financially, the most obvious signs are a weakening of the currency and falling asset prices. Asian currencies are down by 5 to 6% from the start of the Iran war. Asian stock markets, at least those without exposure to semi-conductor stocks like South Korea and Taiwan, have fallen. Volatility in asset markets is very high.

Source: https://www.reuters.com/world/asia-pacific/global-markets-war-graphic-2026-05-27/

Typically, foreign investment inflows slow. Portfolio investors in equities and bonds exit as asset values translated into their base currency decrease. Direct investment falls reflects the poorer prospects. Banks face higher non-performing loans from the weaker economy as well as lower loan demand. Where reliant on foreign borrowings to supplement domestic deposits, the availability of funding is affected.

Inflation places pressure on interest rates which further slows the economy and exacerbates the economic and financial stresses. The current crisis is a textbook case of how oil shocks work through economies. Other factors, including the now-ignored Trump tariffs and economic warfare in the form of trade restrictions and sanctions, will exacerbate the problems. The risk of an economic and financial crisis in many of the affected countries is now elevated.

What is to be done? Like the Irish farmer’s direction to a traveller: “I wouldn’t start from here!”

The classic policy prescription is to let the currency devalue and force the necessary adjustments. An alternative is to intervene in the currency markets and simultaneously use higher short-term interest rates to support the exchange rate. The most extreme measure is for governments to restrict capital movement and, as an option, implement prices and income controls. Each has advantages and disadvantages.

Depreciation of the currency should, in theory, have the effect of reducing imports by choking off purchases assuming the application of the normal laws of supply and demand.

It should simultaneously boost exports. It forces the necessary adjustment of living standards, often brutally particularly vulnerable low-income groups.

In practice, its effectiveness depends on several factors, particularly the elasticity of demand for a country’s imports and exports. If the import is vital, like energy, and not replaceable or the cost can be passed on, foreign purchases may not decrease. Improvements in export volumes depend on the type of product and the demand sensitivity to price. It also depends on competition and substitutes. If competitors have superior products or are willing to match the prices, then volumes may not respond. This is particularly problematic when the whole emerging market complex is affected and all countries want to devalue at the same time, reducing the ability of a single country to cheapen its currency. An additional problem is the global nature of the slowdown across advanced economies, like the US and Europe, which will reduce exports demand which is central to Asian economies.

Devaluation also feeds inflation through higher import costs, unless it destroys demand which would lead to a sharp reduction in growth. A weaker currency may accelerate capital flight as investors fear losses. It creates unhelpful behaviours with importers accelerating purchases and exporters delaying conversion of foreign currency inflows. Foreign currency borrowers without any equivalent matching revenues providing a natural hedge face rising indebtedness. Emerging market businesses frequently take advantage of lower interest rates, relative to domestic funding, running the currency risk.

Intervention is money markets rarely works. It risks using up currency reserves needed to cover commercial imports or short-term debt. Historically, success requires co-operation between major central banks as in the 1985 Plaza Accord which devalued the dollar. Emerging market central banks have a poor track record. In the 1997 Asian market crisis, Thailand, Indonesia and Malaysia severely depleted their foreign exchange reserves in failed attempts to defend their currencies, which was fixed against the dollar. In general, where foreign currency debts and investments exceed reserves, such interventions rarely succeed.

To stem falls in the currency, central banks in India, Indonesia and the Philippines, have repeatedly intervened in currency markets drawing down foreign exchange reserves but with limited success.

Capital controls would require managing the exchange rate and restricting foreign currency inflows and outflows. They can manage a crisis to maintain economic sovereignty over exchange rates, interest rates, inflation and the banking system. In the longer-term, capital controls will deter foreign investment because investors fear loss of the freedom of repatriating funds. It often leads to a currency black market and workarounds which underline their effectiveness.

In market-based system, it is difficult to insulate an economy from external events, especially of the magnitude of the Iran war. Poorly developed domestic capital markets, which limits local supply of capital and risk management tools, impairs the ability to absorb shocks.

Many emerging market economies are also woefully unprepared. Assuming no disruption in supply chains, they have pitifully low buffer stocks or reserves. Their economies remain narrowly structured with little diversification of their industrial base. Despite a history of energy dependence and previous disturbances, there has been limited efforts to increase energy independence by conservation measures or seeking alternative sources. Investment in renewables, such as solar, wind, hydro and biofuels, remains inadequate. Even emergency plans for rapidly scaling up alternative fossil fuels, like coal, are largely absent.  In contrast, China’s forward planning has focused on building up substantial strategic oil reserves and renewable energy supplies, which now account for up to 40% of its total electricity generation and over 50% of its total installed power capacity.

Governments have encouraged magical thinking amongst citizens, encouraging them to believe that policymakers can shield them from these events. Subsidies, transfers and price controls are electorally popular, but they do not address the core problems.

Like Aesop’s grasshopper, energy deficient countries have wasted summers of abundant supplies and now find them facing a difficult winter.

Tyler Durden Sat, 06/06/2026 - 23:20

Watch: More Evidence Iran Is Rapidly Restoring Its Missile Tunnels

Zero Hedge -

Watch: More Evidence Iran Is Rapidly Restoring Its Missile Tunnels

President Trump has newly estimated that Iran has 21%-22% of its missiles remaining. Trump said in an interview with NBC: "They have some missiles and drones, percentage-wise maybe 21%-22% of the missiles. That's a lot, but it's not what it was before the war."

He and top White House officials had previously mused that the Iranians are working hard to reconstitute their defenses after the opening US-Israeli heavy bombing campaign of Operation Epic Fury.

The fresh statement comes on the heels of a Washington Post story last month which cited CIA estimates saying Iran still holds about 70% of its missiles and 75% of missile launchers it had before the war. So there's a likelihood that Iran still has significantly more than just 20% of its arsenal.

There's also some anecdotal evidence, and statements from the Iranians themselves, such as in the following... Watch:

The Iranians have been utilizing basic construction equipment to dig out several missile launchers and reopen subterranean tunnels tied to its missile program. 

"Iran has repaired other parts of the bases as well, including roads that the US and Israel bombed to prevent missile launchers from using them," CNN wrote last week. "Satellite images show almost all these craters have now been filled, and at two sites, even repaved."

Sam Lair, a research associate at the James Martin Center for Nonproliferation Studies, the same outlet late last month that "There’s nothing to prevent the launchers from being armed with the ample stockpile of missiles that the Iranians still have."

He sought to highlight the limits of American firepower, in terms of damage, and given that it hasn't been sustained:

“The US military is good at delivering tactical successes, and entombing and suppressing the Iranian missile force is a great example of that,” said Lair.

“However, if that isn’t accompanied by a set of reasonable strategic war aims and an achievable theory of victory, it can end up being a strategic failure.”

Via AP: Zagros Mountains in central Iran, where a deep underground nuclear facility was reportedly built.

President Trump has been touting the near annihilation of Iran's arsenal, and has lately said the rest of its launch sites could be taken out in a day if he gave the order. 

Tyler Durden Sat, 06/06/2026 - 22:45

A New Shortcut To Quantum Entanglement

Zero Hedge -

A New Shortcut To Quantum Entanglement

Authored by University of Chicago via ScienceDaily,

Many of the most promising quantum technologies, including advanced sensors and future quantum computers, depend on a phenomenon known as entanglement, where particles become deeply connected and influence one another in ways that cannot be explained by classical physics. Creating the complex entangled states needed for these technologies has traditionally required sophisticated equipment and carefully designed experimental systems.

Researchers have shown that a few simple adjustments to a standard quantum optics setup can generate a surprising range of highly entangled quantum states. Credit: Clerk Group

Researchers at the University of Chicago Pritzker School of Molecular Engineering have now proposed a much simpler approach. Their new theoretical method can generate and control a wide range of entangled quantum states using tools that are already common in many quantum physics laboratories.

The work, published in Physical Review X, could help advance ultra precise quantum sensing and open new opportunities for exploring fundamental physics.

"We wanted to take simple ingredients that you find in a lot of physical platforms and put these together in a minimal way to get something interesting, complex and powerful," said Aashish Clerk, professor of molecular engineering at UChicago PME and senior author of the new study.

The research was supported by Q-NEXT, a U.S. Department of Energy National Quantum Information Science Research Center led by DOE's Argonne National Laboratory.

Rethinking Cavity QED Systems

The team's approach is based on cavity quantum electrodynamics, commonly known as cavity QED. In these experiments, atoms or other particles are placed inside an optical cavity, which consists of two mirrors that trap light between them. The particles then interact with the confined light inside the cavity.

A limitation of many cavity QED systems is that all of the atoms interact with the light in exactly the same way. Because the atoms are effectively indistinguishable, the range of quantum states that can be produced is restricted.

"The challenge has always been that these systems have too much symmetry. All the atoms are talking to light in the same way," Clerk said. "That really restricts what kind of entangled states you get."

In a typical cavity QED setup, each atom has a ground state and an excited state separated by a specific energy difference.

The researchers found a straightforward way to reduce the system's symmetry. While all atoms continue to be driven by the same laser, additional lasers or magnetic fields are used to shift the excited state energies of different groups of atoms. The atoms are arranged so that each one is paired with another atom that has an equal but opposite energy offset.

This simple modification allows atoms to behave differently from one another while preserving enough structure for the system to remain controllable and predictable. By changing which atoms receive particular energy shifts, scientists can tune the system to produce a variety of entangled states without altering the physical hardware.

"You turn these lasers on and wait, and at some point the system stabilizes into an interesting, highly entangled quantum state," said Anjun Chu, a postdoctoral researcher in the Clerk group and first author of the new work. "By simply adjusting the lasers, we can access kinds of entangled states that no one had thought about before."

Building Better Quantum Sensors

One of the most promising uses for the new approach is quantum sensing.

In theory, entangled quantum states can detect extremely small differences in magnetic fields or gravitational fields between separate locations. However, developing states that are both highly sensitive and resistant to noise has remained a major challenge.

The researchers demonstrated that a version of their proposed system containing two groups of atoms could be used to measure field gradients. When the two atomic ensembles are placed in different locations, the resulting quantum state reflects the difference between the local magnetic or gravitational fields. At the same time, it naturally rejects background noise that affects both locations equally.

"You're able to do two things that are normally not compatible with one another: Use entanglement to build an exquisitely sensitive sensor but also have robustness to arbitrarily large amounts of noise," Clerk said. "Normally, entanglement is very fragile. This approach has some amazing resilience."

Another advantage is that the information stored in these quantum states can be extracted using standard Ramsey measurement techniques, eliminating the need for specialized or exotic measurement methods.

Applications Beyond Sensing

The researchers also showed that the same platform can generate unusual quantum states that have long attracted interest from physicists.

One example is the AKLT state, a well known many body entangled state first introduced in the 1980s to describe unusual magnetic materials. The team found that their relatively simple setup can stabilize this state. In addition to helping scientists study complex magnetic systems, the AKLT state may also have applications in quantum computing.

Next Steps For The Research

The work remains theoretical for now, but the researchers are already discussing possible experimental tests with other groups.

They are also investigating more sophisticated ways to arrange atoms within the system and exploring the full range of quantum states that their method may be capable of producing.

"The fact that such simple ingredients can generate such complex and useful quantum states gives us hope that even before we reach the dream of a general all-purpose quantum computer, we can already generate quantum states that let us do things we couldn't do in a purely classical world," Clerk said.

This material is based upon work supported by the U.S. Department of Energy Office of Science National Quantum Information Science Research Centers as part of the Q-NEXT center.

Journal Reference: Anjun Chu, Mikhail Mamaev, Martin Koppenhofer, Ming Yuan, Aashish A. Clerk. "Reconfigurable Dissipative Entanglement between Many Spin Ensembles: From Robust Quantum Sensing to Many-Body State Engineering." Physical Review X, 2026; 16 (2). DOI: 10.1103/qdh9-2pc7

Tyler Durden Sat, 06/06/2026 - 22:10

UN Food Agency Warns Millions Pushed Into Hunger By Prolonged Iran War

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UN Food Agency Warns Millions Pushed Into Hunger By Prolonged Iran War

The United Nations food agency is sounding a catastrophic alarm on the macroeconomic fallout of the ongoing conflict in Iran and the Persian Gulf region. According to the World Food Programme (WFP), millions of people are actively being plunged into acute hunger due to the war - realizing a grim trajectory the agency previously warned would occur if the Middle East crisis stayed prolonged and global oil prices remained elevated.

Fragile economies are feeling the most pain, with WFP analysis of three highly vulnerable nations revealing that an additional 2.5 million people in Somalia, 2.3 million in Afghanistan, and 1.3 million in Sri Lanka are currently struggling to meet their most basic daily nutritional needs. Back in March, the WFP estimated that a staggering 45 million people globally could be pushed into severe food insecurity by the end of June, compounding the over 300 million people globally who were already facing critical food shortages before the war erupted.

via EPA

The Rome-based UN agency issued a new detailed assessment at the end of this past week, describing how that the Middle East crisis is actively generating "significant spillovers" - by driving up the cost of food and fuel while heavily disrupting global trade networks. 

Crucially, the agency warned that the economic bleeding will not stop immediately, even if a diplomatic breakthrough occurs. "These impacts are expected to intensify in the coming months, even if the crisis in the Middle East de-escalates," it wrote.

"We remain by that prognosis," WFP’s acting Executive Director Carl Skau informed a UN press briefing. "That’s mainly because the correlation between the prices of energy and food is so tight in many places, and also that in the poorest countries people are already spending all their money on food, and hence when food prices rise, they eat less."

Even prior to the Iran war's start, near the beginning of the war, United Nations agencies themselves were feeling the crunch after a significant drawdown in US support and funding.

The Trump administration slashed support over criticism that the UN has long failed to promote American interests.

UN Secretary-General António Guterres has been warning that outstanding dues reached a record $1.568 billion at the end of 2025 and that collections covered only 76.7% of assessed contributions, leaving the organization dangerously exposed. 

As for how this impacts the WFP, it says it has already been forced to strictly ration and limit aid to millions of impoverished people due to drastic international funding cuts.

The agency has issued urgent plea to global donors to immediately step up financial contributions, with a specific focus on stabilizing Somalia and Afghanistan, "because the human consequences of not doing more will be massive."

Tyler Durden Sat, 06/06/2026 - 21:35

Protesters Target NV Energy At Utility Conference As Anger Over Soaring Electricity Prices Boils Over

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Protesters Target NV Energy At Utility Conference As Anger Over Soaring Electricity Prices Boils Over

By Herman Trabish of UtilityDive

Protesters shouting affordability complaints and chanting slogans interrupted a speech by NV Energy President and CEO Brandon Barkhuff on Wednesday. Barkhuff was speaking to some 1,000 utility executives and electricity industry stakeholders during the Edison Electric Institute 2026 conference at the Fontainebleau Las Vegas.

After being escorted out by security, the protesters spoke to the media outside the hotel to demand the cancellation of a daily demand charge for NV Energy customers slated to take effect Jan. 1, 2027, as well as to demand action on clean energy and high electricity bills.

The confrontation shows the extent to which energy costs have stoked public anger, raising pressure on utilities and their regulators.  

Leslie Vega, climate equity policy fellow at the Progressive Leadership Alliance of Nevada, speaks to the media on June 3, 2026, after protests at an electric utility conference in Las Vegas. The group was protesting high electricity bills and NV Energy’s use of residential demand charges. 

Utilities have made affordability a cornerstone of their public messaging as they prepare to spend over $1 trillion over the next five years to meet a surge in demand, much of it driven by large-load data centers. 

In Nevada, The Public Utility Commission in September unanimously approved a demand charge and new rate design for NV Energy customers in the southern portion of the state. It also approved changing the utility’s net metering design in ways that solar advocates said would weaken customer protections and set back Nevada’s clean energy goals. 

“In Las Vegas, one of the fastest-warming cities in the country, you cannot live without electricity,” said protest organizer Leslie Vega. Vega, a climate equity policy fellow at the Progressive Leadership Alliance of Nevada, said she’s lost loved ones to heatstroke and sees the demand charge as air conditioning rationing.

“We’re not just asking for lower rates. We’re asking for survival,” she said.

NV Energy issued a statement following the protest citing “misinformation and confusion” about the daily demand charge. 

“Daily demand [charges] will lower bills for the majority of our southern Nevada customers,” it said. “We understand that energy costs are an important issue for our customers, and that’s exactly why daily demand [charges are] critical in stopping subsidies that shift costs to other customers.”

Demand charges are tied to a customer’s peak electricity use, and NV Energy’s daily demand charge is based on the energy a customer consumes during a 15-minute period of peak usage each day. The utility expects the demand charge to add about 49 cents/day to a typical customer’s bill, but says most southern Nevada customers will see monthly bills that are similar to or slightly lower under the new structure.

Regulators and the utility have said that consumers who are concerned about potential spikes on their bill from the charge can shift their electricity use, but advocates say that’s not realistic, especially for cooling. Las Vegas temperatures on Wednesday reached 103 degrees as the city experiences its longest 100-degree streak of the year, according to the Las Vegas Review-Journal.

“It’s impossible” not to run air conditioning during peak hours, said Vega. She was joined outside the hotel by several dozen other protesters with the United Ratepayers coalition.

The coalition is demanding cancellation of the demand charge, which Vega called a “financial threat” against Nevadans who don’t know how it will affect their bills and can’t manage it, as well as other changes.

“What we ask is lower rates for our lower-income community, an increase in solar energy and green energy and getting away from fossil fuels,” she said. “We might not be economists and engineers, but I would like to remind our Public Utility Commission that approved Nevada Energy’s daily demand charge that their own staff economists and engineers advised them against the daily demand charge.”

Vega said the coalition will continue to lobby elected officials.

A spokesperson for the Edison Electric Institute, which represents investor-owned utilities and organized the conference where Barkhuff was speaking, said in a statement that EEI understands “people are frustrated about their energy bills” and shares those concerns. 

“That’s why we’re here — working to do everything we can to lower customers’ bills and serve communities,” they said.

Tyler Durden Sat, 06/06/2026 - 21:00

Lebanese Army Officers Among 9 Killed In Israeli Airstrike On South Lebanon

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Lebanese Army Officers Among 9 Killed In Israeli Airstrike On South Lebanon

In a rare, major development related to the Israel-Hezbollah war, fresh Saturday Israeli airstrikes on Southern Lebanon on Saturday took out a group of Lebanese Army forces.

What's more is that several officers were reported killed: "Israeli airstrikes on southern Lebanon Saturday killed nine people including three members of the Lebanese military, the Lebanese army and state media said, days after the two sides reached a new ceasefire deal," The Associated Press reports.

Via Reuters

"An airstrike on the road linking the city of Nabatiyeh with the town of Marjayoun occurred in the morning killing a brigadier general, a captain and another soldier, the army said without immediately releasing their names," the report continues.

"The continued, deliberate, and repeated Israeli aggression against Lebanon, its people and its army only strengthens our resolve, faith and determination," the Lebanese national forces said in its statement.

It accused Israel of thwarting all efforts "to reach a solution that would restore stability, establish a comprehensive ceasefire and lead to the Israeli withdrawal from the occupied Lebanese territories."

According to the BBC:

The Israel Defense Forces (IDF) says it has launched an investigation after confirming it attacked a vehicle carrying Lebanese soldiers in southern Lebanon on Saturday morning.

The Lebanese Army said two officers and a soldier were killed in the strike on a car, which it described as an "aggressive and barbaric raid". The IDF said the vehicle was "moving suspiciously towards forces" and gunfire had been reported in the area.

Currently Washington is applying immense pressure on the national government and army to move to 'disarm' Hezbollah; however, the Shia paramilitary group has long been the most well-armed and powerful faction in Lebanon, and is seen by most analysts as stronger than even the national army.

This is partly because the United States severely limits the kind of weaponry the Lebanese armed forces can possess, essentially sanctioning the army, on fears these weapons could be turned on Israel.

But if Lebanese officers are being killed under Israeli fire, the army is likely to feel even less incentive to move against Hezbollah. There's also serious political limitations - as Lebanon has long been a nation divided, and the end of the 20th century saw decades of internecine civil war and brutal infighting.

All of this is likely to make some of Lebanese President Joseph Aoun's statements to CNN this week deeply unpopular. He had blasted both Iran and Hezbollah for turning Lebanon into a 'bargaining chip' with the West

Many Lebanese have criticized him for criticizing Hezbollah instead of heaping all the blame on the invading Israeli military.

Iranian Foreign Minister Abbas Araghchi has also responded, stating sarcastically in a post on X Saturday that given Aoun's comments, "one would think it’s Iran that has occupied a fifth of Lebanon, displaced a quarter of Lebanese and is bombing his country on daily basis."

"Had Lebanon been a bargaining chip for Iran, we’d have a deal long ago. Save Lebanon from your real foe, Mr. President," Araghchi wrote in reference to Israel.

Tyler Durden Sat, 06/06/2026 - 20:25

Obama-Appointed Judge Orders Trump Admin To Restart Processing Asylum Claims

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Obama-Appointed Judge Orders Trump Admin To Restart Processing Asylum Claims

Authored by Zachary Stieber via The Epoch Times,

The Trump administration must restart processing claims of asylum, a federal judge ruled on June 5.

Officials must also resume adjudicating requests for immigration benefits such as work permits from nationals of 39 countries from which President Donald Trump has restricted travel, Obama-appointed U.S. District Judge John McConnell Jr., based in Rhode Island, said.

This is the same judge AFL exposed for failing to recuse from the Trump spending freeze case - despite previously leading a nonprofit that received $128M in federal funding.

The Department of Homeland Security and its U.S. Citizenship and Immigration Services (USCIS) division, which implemented the challenged policies, said they did not agree with the ruling.

“The Left has been running the same gambit with so-called ‘animus’ claims since 2017. It is sabotage dressed in legal clothing,” James Percival, the Department of Homeland Security’s general counsel, told The Epoch Times via email.

“It goes like this: (1) the admin is racist, (2) therefore a policy I don’t like is motivated by race, (3) therefore it is invalid. They have used it on virtually every Trump era Department of Homeland Security policy.”

“These policies were wrong, plain and simple, and caused … profound fear and uncertainty for so many of our friends, neighbors, and coworkers,” Milagro Sique, CEO of Dorcas International Institute of Rhode Island, one of the plaintiffs, said in a statement.

“Having the judicial process work as intended—by upholding the rule of law—gives us some reassurance that all is not lost and allows those who have been impacted to move forward with their lives in a meaningful way.”

The administration in late 2025 announced the policies in the wake of the shooting, allegedly by an Afghan national, of National Guard members near the White House. USCIS Director Joseph Edlow said at the time that asylum claims would not be processed “until we can ensure that every alien is vetted and screened to the maximum degree possible.”

A coalition of groups, including the Service Employees International Union and the Venezuelan Association of Massachusetts, filed a lawsuit over the policies in March. They said that the policies violated federal law because they went beyond the authority of USCIS, were arbitrary and capricious, and went against U.S. Constitutional protections.

Government lawyers said the policies fell within the authority Congress outlined in the Immigration and Naturalization Act.

McConnell said Friday in a 135-page decision that the policies “threw the lives of countless immigrants living in the United States into indeterminate legal limbo” solely because of where the immigrants were born.

He wrote that USCIS violated federal laws, in part because officials made decisions without adequate explanation.

“The agency has violated the very immigration laws that Congress has charged it with administering, as well as the administrative laws that govern the agency’s actions,” he said. “In enacting its latest immigration policies, USCIS: claims statutory and regulatory authority that it does not possess; makes decisions without the reasoned explanations that it must provide; acts without regard for the reliance interests of applicants that it must consider; and justifies its actions with pretextual concerns of ‘national security’ that mask anti-immigrant sentiments that it is forbidden from letting influence its decision-making. In legal terms that means USCIS’s actions are contrary to law and arbitrary and capricious.

The ruling vacated the policies as illegal and set them aside, as well as two other USCIS policies.

One involved reviewing and reconsidering past decisions granting immigration benefits to any people from countries subject to Trump’s travel ban. The other featured amendments to the USCIS policy manual, requiring agency workers to take a person’s home country as a negative factor when deciding whether to grant requests for benefits.

Tyler Durden Sat, 06/06/2026 - 19:50

Facebook Marketplace Enters The AI Thirst-Trap Era

Zero Hedge -

Facebook Marketplace Enters The AI Thirst-Trap Era

Searching Facebook Marketplace in the AI era has revealed a strange new phenomenon: sellers are running product photos through chatbots or image generators to insert scantily clad women into listings.

This marketing ploy seemingly bets that thirst-trap imagery will boost clicks and improve the chances of selling whatever item is listed on the online marketplace.

"This dude on FB Marketplace has multiple listings for heavy Caterpillar industrial equipment superimposed with AI-generated female models. Must have industry-leading click-through rates," journalist Trung Phan wrote on X.

Sure enough, the thirst-trap imagery appears to be working...

Here's another example.

One Facebook Marketplace seller said the marketing ploy absolutely works.

This is a real-world example of how sellers are using AI to try to boost low click-through rates.

Tyler Durden Sat, 06/06/2026 - 19:15

Viral: Humanoid Robot Kicks Chinese Kid In The Stomach During Public Demonstration

Zero Hedge -

Viral: Humanoid Robot Kicks Chinese Kid In The Stomach During Public Demonstration

Authored by Jijo Malayil via Interesting Engineering,

A humanoid robot demonstration has sparked safety concerns after a video circulating on social media appeared to show a Unitree G1 robot accidentally kicking a young child during a public event.

The robot, which was performing a roundhouse kick while wearing a blue clown wig, struck the child in the stomach, causing the youngster to double over in pain.

The incident has reignited debate over the safe deployment of advanced humanoid robots in crowded public settings, particularly as increasingly capable machines are showcased at exhibitions and entertainment events.

Last year, a viral experiment showed a humanoid robot overriding its safety restrictions and firing a BB gun at its owner during a role-play scenario.

Robot Safety Spotlight

A video circulating on social media has raised concerns about humanoid robot safety after a robot appeared to kick a child during a public demonstration in China's Xinjiang region.

The footage shows what is believed to be a Unitree G1 humanoid robot, wearing a blue wig, performing a roundhouse kick that struck a young child standing nearby. The child was hit in the stomach and appeared to be in pain after the impact. According to reports from Chinese media, the child was not seriously injured.

The incident has renewed discussion about the risks associated with deploying advanced humanoid robots in public environments. Modern humanoid robots are capable of performing complex movements, including martial arts demonstrations, athletic maneuvers, and other dynamic actions, often under remote or autonomous control, reports Futurism.

The Xinjiang incident is not the first reported case involving a humanoid robot and a human injury. Earlier this year, another Unitree G1 robot reportedly lost its balance during a public performance in China. After falling to the ground, the robot's uncontrolled limb movements struck a nearby man, causing a nose injury.

A viral experiment last year in the US raised concerns about AI robot safety after a humanoid robot named Max fired a BB gun at its owner during a role-play scenario. Although the robot initially refused requests to shoot, it complied after the command was framed as acting out a character. The incident highlighted how simple prompt changes can potentially bypass AI safety restrictions.

AI Liability Questions

As robots and AI systems become more capable and autonomous, the issue of accountability remains one of the biggest challenges facing the industry. When a robot causes injury, property damage, or other harm, determining responsibility is often far from straightforward. Questions arise over whether liability should rest with the software developers who designed the AI, the manufacturer that built the hardware, the operator overseeing the system, or the end user interacting with it.

The debate has become increasingly relevant as automation expands across transportation, manufacturing, healthcare, and public spaces. Similar concerns have emerged in other technology sectors. Tesla has faced scrutiny over crashes involving its Autopilot driver-assistance system, prompting discussions about the balance between software performance and human supervision. Likewise, investigations into the Boeing 737 MAX accidents highlighted how flaws in automated systems can have far-reaching safety consequences, according to experts.

Governments and regulators are still working to establish legal frameworks that address these challenges. In the United States, liability generally falls on manufacturers or operators, depending on the circumstances. Meanwhile, European policymakers are developing AI-specific regulations aimed at clarifying responsibility and strengthening public trust in emerging technologies.

While some researchers have suggested granting advanced AI systems a form of legal status, most experts argue that accountability should remain with people and organizations. To address safety concerns, robotics companies are increasingly adopting transparency measures, insurance-backed deployments, and stricter safety standards.

Tyler Durden Sat, 06/06/2026 - 18:40

Iran's World Cup Squad Belatedly Granted US Visas But Some Staff Blocked

Zero Hedge -

Iran's World Cup Squad Belatedly Granted US Visas But Some Staff Blocked

Via Middle East Eye

Members of Iran's World Cup 2026 administrative staff have not been given visas to enter the United States, Iranian media reported on Saturday.

According to US officials, while Iranian footballers have been granted visas for the tournament, which begins on Thursday in Mexico, some support staff are reportedly not being allowed to join the squad.

via Reuters

On Friday, a White House official told Reuters that the players had received their visas, after Iran's ambassador to Mexico, Abolfazl Pasandideh, said on Thursday that they had not.

Iran plays its first match on June 16 against New Zealand in Los Angeles, California. Its participation in the tournament has been the subject of much speculation after the US and Israel launched their war on Iran at the end of February.

Negotiations between the US and Iran are continuing, but both sides have continued to fire on enemy targets.

Iran's semi-official news agency Tasnim reported that the Iranian staff not granted visas include Mehdi Kharati, the executive director; Hedayat Mombini, the secretary general of the football federation; and Mohsen Motamedkia, media director.

Staff members without visas will travel to Mexico with the team while efforts to obtain the documents continue, Tasnim said.

Tehran negotiated a last-minute move of the team's base from Arizona to Tijuana, Mexico, due to the visa issues and a growing feeling in Iran that the squad’s presence in the US should be kept to a minimum.

The team is scheduled to land in Tijuana on Sunday. After facing New Zealand, Iran will play Belgium in Los Angeles and Egypt in Seattle.

The US has never formally said it did not want the Iran team to stay on its territory, Pasandideh said.

Secretary of State Marco Rubio, however, told lawmakers on Tuesday that the US would not allow Iran to include in its delegation people linked to the Islamic Revolutionary Guard Corps (IRGC).

Mehdi Taj, a former IRGC commander and now president of Iran's football federation, was denied entry for the tournament draw in Washington in December

"Iran's participation in the World Cup - even on the soil of what is seen as its enemy - shows that Iran seeks peace," Pasandideh said through a Spanish interpreter at the Iranian embassy in Mexico City.

Tyler Durden Sat, 06/06/2026 - 16:20

US To Tighten Rule Regarding Nonprofits Paying Excessive Executive Compensation

Zero Hedge -

US To Tighten Rule Regarding Nonprofits Paying Excessive Executive Compensation

Authored by Naveen Athrappully via The Epoch Times,

The Internal Revenue Service (IRS) and the Department of the Treasury issued a notice on Friday, announcing their plan to issue proposed regulation concerning taxation on high compensation paid by tax-exempt organizations to employees.

The notice relates to excessive compensation and excess parachute payments, the IRS said in a June 5 statement. Parachute payments are made to key employees when they are terminated or when the business undergoes a merger or acquisition. An excess parachute payment is any such payment that exceeds three times an employee’s average annual compensation for the most recent five years.

Section 4960 of the Internal Revenue Code imposes an excise tax on any nonprofit or tax-exempt organization paying an employee more than $1 million in remuneration in a tax year or an excess parachute payment, according to the notice.

The new rule changes tax applicability regarding excessive compensation.

Prior to the One Big Beautiful Bill Act, taxes on such payments were applicable to a tax-exempt organization’s five highest-compensated employees for a tax year whose compensation exceeded $1 million.

But under the new rule, the excise tax is applicable to any employee whose compensation exceeds $1 million in a tax year beginning after Dec. 31, 2025. The requirement of being among the five-highest compensated employees has been eliminated.

The rule is also applicable to any former employee who was a top-five compensated employee exceeding $1 million for any tax year between Dec. 31, 2016, and Dec. 31, 2025.

There is no change to taxation on parachute payments. Such payments will continue attracting taxes as per existing rules.

The updates also provide certain exceptions regarding people offering volunteer services to tax-exempt organizations.

IRS Chief Executive Officer Frank J. Bisignano said the latest rule “strengthens the accountability of tax-exempt organizations.” The regulation “broadens the scope of tax from a limited group of executives to potentially any highly compensated employee.”

The Treasury and the IRS are inviting public comments on the notice until Aug. 4.

The notice comes after the American Institute of CPAs (AICPA) recently raised concerns about the implementation of the new regulations.

In a May 1 letter to IRS and Treasury officials, AICPA said there was a need for comprehensive guidance and transition relief given the changes made to the compensation rule.

“We respectfully urge Treasury and the IRS to prioritize the issuance of transition relief to address several immediate issues that could disrupt the operations of tax-exempt organizations,” the letter said.

“Absent timely transition relief, these issues may result in significant and unintended financial exposure for tax-exempt organizations and related entities subject to the section 4960 excise tax.”

Commenting on the latest IRS and Treasury notice, Kelsey Mayo, chief of retirement policy and regulatory affairs at the American Retirement Association (ARA), said that retirement plan professionals who work with tax-exempt employers must be aware of the notice, according to a June 5 statement from the National Association of Plan Advisors, a sister organization of the ARA.

With the changes in Section 4960, nonprofits may have to “think more carefully” regarding how they deliver benefits to their executives, Mayo said.

“Because benefits provided through a qualified retirement plan can reduce the compensation that counts toward the excise tax, advisors, TPAs, recordkeepers, and other plan professionals may have an opportunity to add value to their nonprofit clients by evaluating how their qualified plan design aligns with both their talent strategy and their excise tax exposure,” she said. TPA refers to third-party administrators who provide insurance services.

Tyler Durden Sat, 06/06/2026 - 15:10

Feds Launch Probe Into California's Elections

Zero Hedge -

Feds Launch Probe Into California's Elections

Days after California’s primary election, the votes are still being counted, and the winners are still unknown, and no one, save for California officials, seems happy about it.

“The fact that California elections often can't be resolved for weeks is kind of insane and not common in other electoral systems around the world," Political data analyst Nate Silver wrote on X on Tuesday.

"Like honestly 'it's going to take us several weeks to tell you who won the election' is failed state sh-t and should be much more stigmatized. The fact that it's tolerated is bad too a textbook example of learned helplessness."

And President Donald Trump is now demanding answers.

Trump posted on Truth Social on Thursday, targeting what he called the deliberate manipulation of California's governor and Los Angeles mayoral races.

"There's BIG cheating by the Dumocrats in California. Votes are all tied up," he wrote.

"May not be in for weeks. Under investigation by the U.S. Attorney's Office in Los Angeles. Why the vote counting DELAY???" 

In a follow-up post, Trump escalated further.

"The Dumocrats are at it again! They are trying to STEAL THE GOVERNOR OF CALIFORNIA PRIMARY, AND THE MAYOR OF LOS ANGELES, PRIMARY, AWAY FROM TWO GREAT REPUBLICAN CANDIDATES."

He then singled out mail-in ballots specifically.

"Here we go with the very late and massive numbers of MAIL IN BALLOTS."

United States Attorney for the Central District of California, Bill Essayli, confirmed in a post on X that his office “has multiple election fraud investigations underway” in California, and is coordinating with the FBI in Los Angeles.

“California’s election system has serious structural vulnerabilities. Universal vote-by-mail with no voter ID requirements creates conditions where fraud can go undetected and unpunished, eroding public confidence,” he wrote.

In a post on Substack, Nate Silver noted that California averaged 38 percent of its votes counted after Election Day across the last five general elections. In the 2022 midterms, half of all votes were tallied post-Election Day. Silver did not spare California from the comparison its leaders apparently dread. "California likes to tout that it's larger than many countries," he wrote, "but most developed countries are able to wrap up nationwide elections more quickly than California can tabulate its votes. Colombia held a presidential election on Sunday, and 99.98 percent of the result was in on Monday morning. Japan also counts most of its votes overnight. And in the UK (not exactly a poster child for state capacity), you can generally expect to have calls for all 650 parliamentary seats the morning after the election."

Silver posted a chart showing that California is the slowest state in the nation to count votes.

California Secretary of State Shirley Weber offers a rather weak excuse for her state’s handling of elections.

"I know the value of being fast for some folks," she said. "For me, accuracy is far more important."

That line might land better if California's sluggishness were actually producing superior accuracy.

Still, Silver's data suggests the state's election administration has major structural problems regardless of how long the counting takes.

 The state began nudging counties toward all-mail elections in 2016, applied the model statewide during the pandemic in 2020, and finally made it permanent in 2022. Under current California law, every registered voter automatically receives a mail ballot, and any ballot postmarked by Election Day and received within a week afterward counts as valid. Each of those ballots must be individually opened, verified, and processed before it can be tabulated. The result is a counting operation that drags on for weeks while the rest of the country waits. The system California guarantees maximum delay and minimum accountability, all while breeding distrust in the system. 

U.S. Attorney Essayli says his office is conducting a “comprehensive audit” of California’s voter rolls, and will “not look the other way” from fraud, and promised that his office will “investigate and prosecute.”

 “Every legal vote deserves to be counted,” he said. “Every illegal vote cancels one out.”

Tyler Durden Sat, 06/06/2026 - 14:35

MiB: Beating the S&P For Generations with Chris Davis of Davis Funds

The Big Picture -

 

 

This week, I sit down with Chris Davis, Chairman and Portfolio Manager at Davis Funds. They discuss his approach to managing risk and the key elements changing the economy. We also discuss Chris’s mentors including Charlie Munger, and how he settled into the family business.

A list of his current reading and favorite books is here; A transcript of our conversation will be available here shortly.

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

Be sure to check out our BONUS Masters in Business Monday with Joe McLean, Managing Partner at MAI Capital Management, where he leads firm’s Sports & Entertainment division, serving 100s of pro athletes/entertainers across NBA, NFL, MLB, PGA + NASCAR. His path to finance runs directly through the locker room as a 4-year NCAA Division 1 player at U of Arizona. Dubbed the athlete’s “Money Whisperer” by the New York Times, he is known for his non-negotiable 60% savings mandate for clients.

 

 

 

Current Reading/Favorite Books

 

 

 

The post MiB: Beating the S&P For Generations with Chris Davis of Davis Funds appeared first on The Big Picture.

UK Government Plots Digital ID Lockdown On Every Phone In Lockstep With Big Tech

Zero Hedge -

UK Government Plots Digital ID Lockdown On Every Phone In Lockstep With Big Tech

Authored by Steve Watson via Modernity,

The Labour government in Britain is accelerating its assault on digital privacy under the well-worn banner of child protection. Fresh plans leaked to the press reveal ministers intend to compel Apple, Google and other tech firms to restrict smartphones so thoroughly that a digital ID will be needed to use them with unfettered access.

The mechanism comes in the form of expanded age verification that effectively demands digital identification for device setup and use. What is sold as safeguarding the young is shaping up as a backdoor mandate for every adult in Britain to submit ID just to operate a phone or go online.

This development lands alongside Google's confirmation that it will soon bring digital IDs to Android devices in the UK via Google Wallet. Users will record a short video selfie and scan a government-issued ID to add a digital version of their passport or other documents.

The feature, already rolling out in select EU countries this summer, is explicitly tied to the UK's Online Safety Act requirements for age checks on content involving self-harm, eating disorders, bullying and pornography.

Google is exploring certification under the government's digital identity trust framework, which could extend its use to everyday purchases such as alcohol.

Apple has already implemented similar restrictions on iOS devices in Britain, forcing age confirmation or locking users into limited "child mode."

Big Brother Watch director Silkie Carlo has been blunt about where this leads. "Protecting children online is vital, but these are outrageous plans that will fail to address the underlying causes of online harm. This will only result in population-wide ID checks for all of us to use our phones, tablets and laptops."

She continued: "Put simply, the Labour Government is introducing ID checks for the internet. No one in a democracy should need to show their passport just to get online."

Carlo warned that the proposals replace genuine parental responsibility and meaningful tech design with "performative, authoritarian government control that children can easily circumvent by accessing adult-registered devices." For the UK's fifty million adult internet users, the outcome is stark: "this backdoor digital ID requirement would invoke the death of anonymity and internet privacy."

The mechanics are chilling. Without submitting to intrusive ID checks during device setup, users face a "chokehold on your software and internet access leaving you with a child-locked device." Restrictions on messaging, streaming and browsing open the door to client-side scanning - government spyware sitting in every pocket. Carlo noted this has long been a GCHQ ambition and "will be exploited for other purposes before long."

The bigger picture involving "The Government mandating that all phones/devices in Britain require ID and surveillance software is a crossing of the Rubicon that would make the UK one of the most authoritarian internet regimes in the world."

"I don't know anywhere else in the world that has done this," Carlo warned.

The story broke via a leak to The Times rather than any parliamentary process. Carlo called it a travesty: "This extreme technological censorship requires rigorous public and parliamentary scrutiny that is totally missing." Big Brother Watch has pledged to fight the measures.

These phone-level controls do not exist in isolation. They slot directly into the UK's wider digital ID infrastructure, already exposed as a dystopian experiment in mass surveillance.

The government's One Login platform and planned GOV.UK Wallet create a centralized system for identity verification across public services, with biometric data, audit trails logging every use, and a permissions framework that can deny access to everything from jobs to age-restricted purchases.

What begins as convenient "right-to-work" checks or alcohol verification quickly becomes a comprehensive record of daily life, open to expansion and abuse.

The ambition reaches even further back - to the cradle. Labour ministers have privately discussed assigning digital IDs to newborn babies alongside their health records, modeled on Estonia's system.

Framed initially as a tool to tackle illegal immigration through right-to-work verification, the scheme has ballooned into a cradle-to-grave tracking apparatus. Critics across the spectrum have labeled it a sinister overreach with nothing to do with stopping the boats and everything to do with building a permanent digital file on every citizen from birth.

Shadow ministers and former cabinet figures have condemned the lack of debate and the affront to British traditions of liberty.

This national infrastructure mirrors global blueprints pushed by the World Health Organization and funded by the Gates Foundation. A WHO document outlines a globally interoperable digital identity system for permanent, lifelong tracking of vaccination status from birth registration onward.

Records would integrate personally identifiable information with socioeconomic data including household income, ethnicity and religion. AI would target the "unreached," combat "misinformation," and support conditioning access to education, travel and other services on compliance.

Community health workers and digital alerts would enforce behavior, while fast healthcare interoperability standards enable cross-border data sharing. The architecture is explicitly designed for surveillance and control, not mere convenience.

The picture sharpens further with recent pushes for AI-designed "super vaccines." Cambridge researchers have created the first entirely AI-generated antigen, tested in humans, aimed at training immunity against entire families of viruses rather than single strains.

Data drawn from viral surveillance programs feeds these systems. While presented as pandemic preparedness, the combination with digital ID infrastructure creates obvious pathways for tracking compliance.

Refusal could trigger digital consequences - restricted access to services, finance or movement - under the same "safety" logic already being applied to phones and age verification. The surveillance grid expands while public oversight remains minimal.

Real concerns about child exploitation and online harm are being weaponized to justify systems that deliver mass identification, device-level control, client-side scanning and lifelong data profiles.

While children can bypass the restrictions; adults lose the fundamental right to anonymous communication and private device use. The same political class that has presided over record migration, grooming scandals and institutional failures now demands ever more intrusive tools to monitor the population it claims to protect.

This is not incremental safety policy. It is the deliberate construction of an authoritarian digital regime. Every new verification layer, every leaked proposal for device lockdown, every tie-in with global vaccine-tracking architectures erodes the space for individual autonomy.

Britain is being marched toward a future where showing a passport-equivalent digital ID becomes the price of entry to the internet, to commerce, to normal life - all while the architects insist it is voluntary and 'for the children'.

It is a stark crossing of the Rubicon indeed. The only question is whether the British public will recognise the destination in time to turn back.

Tyler Durden Sat, 06/06/2026 - 10:30

Goldman's World Cup Winner Prediction Is ...

Zero Hedge -

Goldman's World Cup Winner Prediction Is ...

The 2026 Football World Cup kicks off June 11, with Mexico vs. South Africa opening the tournament at Mexico City Stadium.

The tournament will feature 48 teams across 104 matches at stadiums in the U.S., Canada, and Mexico from next Thursday through July 19.

Jan Hatzius, chief economist and head of global investment research at Goldman Sachs, published a cheat sheet for clients that used a forecasting model built around Elo ratings - the ranking system originally developed for chess - to handicap the tournament. His top pick diverges from the latest Polymarket odds, with Hatzius placing Spain at the top of the list as the most likely World Cup winner.

"The model says that Spain has a 26% probability of winning the trophy, followed by France at 19%, Argentina at 14%, Brazil at 8%, and England at 5%," Hatzius said.

He noted, "Spain is predicted to win because it has the highest Elo ranking, supported by scoring talent and good momentum into the competition. Argentina is penalised by the "winner's slump", i.e. the statistical underperformance of reigning champions in the following World Cup; France suffers from likely facing top-ranked Spain in the semifinals; and England underperforms its Elo rating given historical tournament disappointment, geographical headwinds (likely facing Mexico in high-altitude Mexico City), and a slightly unlucky draw." 

Hatzius built a regression model to estimate how many goals each team is likely to score against another, using nearly 20,000 international matches since 1978. The model shows a steep decline in goal scoring, with much of it occurring after World War II.

Elo measures national team strength based on results and opponent quality, updating as teams win, lose, or draw. By this metric, Hatzius and his team place Spain No. 1, ahead of Argentina and France, which differs slightly from FIFA's official men's rankings.

Most Likely Predicted Group Stage Results

Road To Winner

Unlike our previous notes on Goldman's World Cup probabilities in 2022, 2018, and 2014, the rise of Polymarket has changed the betting game, bringing prediction markets directly into the sports-betting mainstream.

The latest Polymarket odds show France at 17%, Spain at 16%, and England at 11%...

...putting market pricing at odds with Goldman's model, which ranks Spain as the winner.

Professional subscribers can read the full World Cup note here at our new Marketdesk.ai portal. 

Tyler Durden Sat, 06/06/2026 - 09:55

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