Individual Economists

Trump Admin Moves To Cut 500+ Positions At Taxpayer-Funded Propaganda Network, Voice Of America

Zero Hedge - August 31, 2025 - 4:55pm

Trump Admin Moves To Cut 500+ Positions At Taxpayer-Funded Propaganda Network, Voice Of America

Kari Lake, acting CEO of the U.S. Agency for Global Media, an independent federal agency that oversees America's international broadcasting operations, including Voice of America, Radio Free Europe/Radio Liberty, and other government-funded outlets, announced late Friday a "reduction in force" that will eliminate hundreds of jobs across the U.S. government's international broadcasting network. This broadcasting network that reaches hundreds of millions worldwide has long been criticized as a taxpayer-funded megaphone for Democrats and their globalist pals.

"Tonight, the U.S. Agency for Global Media initiated what is known as a reduction in force, or RIF, of a large number of its full-time federal employees. We are conducting this RIF at the President's direction to help reduce the federal bureaucracy, improve agency service, and save the American people more of their hard-earned money," Lake wrote on X on Friday night.

She continued, "USAGM will continue to fulfill its statutory mission after this RIF— and will likely improve its ability to function and provide the truth to people across the world who live under murderous Communist governments and other tyrannical regimes. I look forward to taking additional steps in the coming months to improve the functioning of a very broken agency and make sure America's voice is heard abroad where it matters most."

ANNOUNCEMENT—
U.S. Agency for Global Media Eliminates 532 Government Positions
Washington, D.C. - Tonight, the U.S. Agency for Global Media initiated what is known as a reduction in force, or RIF, of a large number of its full-time federal employees. We are conducting this RIF at… pic.twitter.com/LWeO9w0RNQ
— Kari Lake (@KariLake) August 30, 2025

The problem with VOA during the Biden-Harris years was that it failed to broadcast America's beacon of freedom and hope in a neutral manner. Instead, it became a taxpayer-funded, weaponized megaphone echoing Democrats' globalist priorities, targeting President Donald Trump, and vilifying MAGA voters. Regular programming glorified nation-killing progressive policies, such as open borders.

One day before Lake's RIF announcement, U.S. District Judge Royce Lamberth ruled that Michael Abramowitz, a former Washington Post editor and now VOA director, could not be removed without the approval of the majority of the International Broadcasting Advisory Board.

Firing Abramowitz would be "plainly contrary to law," according to Lamberth, who was appointed to the bench by former President Ronald Reagan.

In June, VOA sent layoff notices to more than 600 employees of the agency. Abramowitz was placed on administrative leave and informed that he would be fired, effective August 31.

Lake's vision in the eyes of the Trump administration is to make VOA fairer, sharper, and more recognizably American, rather than serving Democrats and their globalist billionaire allies.

Deep Throat For The Deep State

. . .

Tyler Durden Sun, 08/31/2025 - 16:55

How The US Will Force Yields Lower Across The Curve

Zero Hedge - August 31, 2025 - 4:20pm

How The US Will Force Yields Lower Across The Curve

By Peter Tchir of Academy Securities

Forcing Yields Lower Across the Curve

We were already set to get a lot of economic data, especially on the labor front, compressed into a short week, and now we have to digest a court ruling on tariffs.

A federal appeals court ruled against (many/some/all?) tariffs imposed using an emergency law.

The tariffs will remain in place while the case proceeds.
It may go back to the lower court for another round, while also being pursued up to the Supreme Court. Nothing is “final” yet.
We discussed a couple of weeks ago that tariff rebate claims were trading at 25 cents on the dollar. Presumably, those are trading moderately higher after this ruling, but to a large degree, this news, which hit after the close on a long weekend, should be at least partially priced in.

Given that, we won’t dwell on this issue, for now, and will try and have some fun with the almost universal view that U.S. yield curves will steepen and the long end is very vulnerable to a spike higher in yields.

It is worth highlighting that the equity narratives highlighted in last weekend’s No Lonesome Doves continued to work this week.

The Consensus on Rates and the Fed

There is a lot of debate over whether Fed independence will be compromised or not?

That goes hand in hand with whether or not we will have “unnecessary” or “politicized” rate cuts?

For anyone answering “yes” to both questions, the natural conclusion is that we get rate cuts, but yield curves steepen and long end yields likely rise, possibly by a lot (yes, we mentioned that once already, but it seemed worth mentioning again).

As discussed on Bloomberg TV this week, we think that might be too simplistic. That people aren’t thinking “out of the box” enough and may well be underestimating this admin on their plans for yields.

Everyone Knows What Happened Last September

Since the risk that this pattern repeats itself is so obvious, it seems obvious (at least to the T-Report) that someone in D.C. is trying to figure out a strategy so that it doesn’t happen again.

Largely Playing Devil’s Advocate

For this report we can have some “fun.” We can think out of the box and suggest things that we would/might do if we were trying to implement policy that would help yields across the curve. Some of the things suggested are not things we would do or advocate for someone to do, but that isn’t the point. The point is to think about things that could be done, that would really hurt the consensus trade.

What could or will the administration do to Force Yields Lower Across the Curve (and hurt the consensus view)?

Guided By Bessent

There have been all sorts of statements (maybe even outrageous statements) on where monetary policy should be.

Bessent in a Bloomberg TV interview a couple of weeks ago said that Fed Funds were 100 bps too high. There was some wiggle room around his answer, but I think we can assume that Bessent sees 100 bps as the right range of cuts in the (very) near term.

Bessent has also spoken about 3, 3, 3. That was linked to 3% budget deficits, 3% GDP growth, and 3 million barrels of oil per day.

While I don’t think Bessent has given a specific target on 10s, he has been quite vocal about focusing on longer-term yields, not just the front end. Additionally, the administration has been very concerned about mortgage rates – a function of yields and spreads.

Maybe it is a stretch to assume something in the low 3% range would be a target for this admin on 10s, but that is the working thesis for this exercise.

Politicized Cut?

It is easy to turn this into a debate about whether a cut is politicized or not. But that might be missing the point.

The July meeting had 2 people dissent about the decision not to cut rates.
- That was before the June jobs data was revised down sharply.
Powell came across very dovish at Jackson Hole, leading many (or at least us) to conclude that while “only” two dissented, the debate to cut or not may have been even more vigorous than he made it seem during the press conference or in the Fed minutes.
This is an “art” not a science. There have been plenty of people with a wealth of experience in economics and markets calling for rate cuts to have already started. Yes, there are people on both sides of the argument, but that is the point – there is no “right” answer. Having low quality data doesn’t make finding an answer any easier.

For purposes of this report (which is in line with our analysis and concerns on the labor front), 50 bps in September would be in the realm of justifiable.

Yes, many will disagree, and that is fair, but unless the jobs data across the board (ADP and the JOLTS Quit Rate are important to me) shows a robust improvement, I’d go with 50 bps and don’t consider that political.

Let’s just reflect on this for a moment.

If 50 bps is actually justified, why would the long end get hurt?

What many seem to consider a “politicized” cut, which sounds exciting to discuss, may not be, which means the alarm bells people expect to see in the market are less likely to materialize.

Independent versus Collaborative

Yeah, we are heading down a slippery slope here, but an “Independent” Fed doesn’t mean it has to (or should) “go it alone.”

Monetary policy, when implemented in conjunction with the Treasury Department (for example), may be the most powerful way to implement policy and get the desired results.

Whether it was during the GFC or COVID, we have seen the Fed work with other areas of the government to achieve their goals. That doesn’t mean the Fed isn’t independent, it just means that it is part of an overall strategy to achieve goals that it is in line with.

The Limitation of Fed Funds

Fed Funds as a policy tool seems weak at best. The “long and variable” time it takes for monetary policy to take effect when conducted through changes in the front end of the yield curve is almost comical.

In the months it takes for moves at the front end of the yield curve to work through the system, any number of other things can happen (trade wars, actual wars, technological improvements, etc.). It is difficult, even after the fact, to judge what some cuts or hikes actually did in the real world.
While ZIRP was a few years ago, many corporations, individuals, and municipal bond issuers locked in low rates, and are not that impacted by changes in front end yield. Whatever effectiveness conducting monetary policy via front end yields had has diminished since so many (other than the U.S. government itself) took advantage of lower for longer to protect themselves against changes in interest rates.

We’ve thought out of the box before, why not again?

Favorite Example

This was one of the “scariest” charts as COVID wreaked havoc on bond markets.

VCSH is an ETF that tracked 1 to 5 year corporate bonds. A 1% move in a short time is a relatively big deal. It fell around 12% in a matter of days. The discount to NAV was exploding. The ETF Spiral™ was in full effect (the arbitrage of selling bonds and buying the ETF, in times of stress, tends to accelerate and amplify the stress). Then the government announced a plan where the Fed (with money from the Treasury Department if I remember correctly) would buy ETFs.

The problem was literally fixed overnight.

Despite the fact that the mechanism to get the funding wasn’t set up. The ability to buy equities (which is what the ETFs are) had not been established. Again, I think it took weeks (if not longer) before any purchases of ETFs were made, but just the announcement fixed the problem.

Incredibly powerful and nothing that any amount of Fed Fund cuts was going to fix as effectively or quickly as this plan did.

One and Done?

We will start with this one, because timing wise, it might be easiest.

I’m not sure if this will work or not, but it deserves some consideration.

If the Fed goes 25 or even 50 in September, the market will immediately move to speculate on the timing and sizes of the next cuts. Especially those who characterize any cut as being politically pressured. There will be just as much uncertainty about the path and intentions of the Fed after the cut, as before the cut. Realistically, no one thinks we will get one cut of 25 bps and be done, so the speculation about Fed independence etc., will still attract a lot of attention and possibly push yields higher.
What about going 100 bps (which is where Bessent is and not far off from our 3 to 4 cuts this year), but committing to leave rates alone for several quarters unless the data changes dramatically one way or the other? Would people “trust the commitment”? That might be a stretch (even I’d be skeptical and I kind of like the concept).
- 100 bps would take Fed Funds to 3.33% (I like the 3s).
- The 1 month versus 10 year yield spread is currently -9 bps. It would have to steepen by almost 80 bps for 10s to stay above 4%. A 100 bp cut would require a LOT of steepening, maybe more than the vigilantes can deliver to keep 10s above 4%?

Not my favorite idea, but something to think about. I do like “ripping the band-aid off” on cuts and getting to the endpoint (or potential endpoint) quickly rather than dragging it out (which is the “normal” procedure).

Attack Rent Inflation

Shelter is one of the biggest components of CPI.

“We” (and I use that term loosely) continue to use Owners’ Equivalent Rent as part of the calculation. If anyone can tell you succinctly and simply why Owners’ Equivalent Rent is still the right metric, I’d be shocked. It is a “calculation,” maybe even an “awkward” calculation. It is designed to have lags built in. Those lags presumably were to slow inflation from hitting the benchmarks in real time (by and large shelter costs go up). We were screaming at the top of our lungs during “transitory” that the shelter inflation in CPI was understating the real world rent inflation. Now “shockingly” it is working in reverse. The shelter component is artificially raising inflation benchmarks.

What I find interesting is that the Cleveland Fed has created their own metric, which seems to work well (I could only find a year-on-year version and it is a long weekend so didn’t spend too much time looking for a month-on-month version).

What little I know about charting this stuff is:

We are back to a pretty normal level of inflation for rents.
If the annual line is continuing to decline, the recent monthly numbers are lower still.

The Cleveland metric is below the almost 4% change in shelter inflation in CPI. Now, we wouldn’t normally quibble over a 1% or so difference in the course of a year, but since shelter is such a large component it is keeping inflation both stubbornly and inaccurately high.

If you want to attack inflation fears, start by attacking the data itself and highlighting this large component which virtually everyone agrees it is being overstated.

If you can combat some of the inflation fears, it should reduce the power of the bond vigilantes and the arguments of those who say it is a “political” decision to cut with inflation high.

Shift the Balance Sheets

This gets to the heart of the problem. These are our current calculations of the Fed holdings of Treasuries by maturity (ignoring T-Bills, floaters, and TIPS).

The Fed balance sheet is skewed to the shorter maturities.

The Fed owns $2 trillion of bonds maturing in less than 7 years versus “only” $1 trillion of bonds maturing 15 years or more.

Let’s “imagine” that the Fed starts an “aggressive” Operation Twist. Selling bonds that mature in 3 years or less (most anchored by Fed Funds) would create about $1.2 trillion of purchasing power.

If they only bought bonds 20 years or longer, that would almost triple their portfolio size. Interestingly, “only” $2 trillion of bonds maturing 20 years or longer are outside of Fed control, so that would be 50% of the float! When you start thinking about what percentage of that is locked up in not available for sale accounts, it would be IMMENSE buying power.

That is extreme, but we start to get a sense of what can be done.

T-bills will be “anchored” by Fed Funds. So, the Treasury Department, if it doesn’t like where yields are (even with Operation Twist), could scale back issuance of longer-dated bonds even further, creating favorable supply and demand dynamics.

Don’t Fight the Fed.

Why would the Fed do Operation Twist?

Why wouldn’t they? They’ve done similar actions before. If they believe (and some do) that rates are too high, why would they be content to “only” set the front end of the yield curve? Why not, once again, interfere in the longer end of the bond market?

Heck, while I’m at it, why not shift out of some Treasuries and into mortgages? That might help the “spread” component of mortgages come down.

Also, there are $3.6 trillion of bonds maturing 10 years or longer, with prices below 90 cents on the dollar. That may create some interesting “accounting games” as selling bonds at par to buy bonds below par could be pitched as some sort of a gain? In the real world, it is far more complex than that, but possibly in an accrual accounting world, something can be done with these bonds to make it seem “even better” from either a deficit or overall debt standpoint. Bit of a stretch, but I’ve always been a fan of buying bonds at a discount.

YCC

That looks like the 3 letter code for a Canadian airport, but it is Yield Curve Control.

The U.S. hasn’t gotten into yield curve control in my lifetime, but it seems like each crisis brings new “unconventional” tools, which take us a step closer.

Japan had it recently.

This is an administration that is comfortable “setting the prices” on things like tariffs, so setting the price of yields seems well within the scope of what they might do.

If this was the 1990s and I said yield curve control, I’d expect people (including myself) to be aghast at the idea. But seriously, we have been on this slippery slope since at least the GFC, if not LTCM (Long Term Capital Management for those of you who didn’t have to deal with that mess).

Stablecoin Demand for Treasuries

We’ve written in the past that Bessent expects $3 trillion to come into USD stablecoins (he really does seem to like the number 3).

That, if it materializes, would create demand for T-bills and short dated bonds.

Maybe we could issue more T-bills and fewer longer-dated bonds to satisfy that demand? Maybe we could sell bonds maturing in less than a year, to buy bonds maturing in 20+ years, to satisfy that demand?

I am excited for the opportunities in the stablecoin space given recent laws and regulations, but it might take more time to generate those sorts of inflows (new inflows into the USD forcing T-bill buying, rather than flows that cannibalize money from funds that also bought T-bills).

In any case, as this demand grows, it fits very well with things like Operation Twist, or a different maturity profile from the Treasury.

Any new net demand is good demand.

Gold Revaluation

According to AI, the U.S. has 8,133.46 metric tons of gold. I get confused between a tonne, a metric ton, and a ton, but it is a LOT of gold!

The book value is $6.2 billion (which is based on a price of gold of $42.222 per troy ounce that was established in 1973).
With spot gold almost $3,450 per ounce, the “market value” of the gold would be more than 80 times that amount – or about $506 billion.

Just “marking to market” gold would generate $500 billion of accounting revenue.

That is fraught with other issues. Annually, presumably, we’d have to adjust the value based on the price of gold. If the market thought the repricing was a sign that the U.S. would sell a lot of gold, the price would likely drop.

Since I presume the U.S. would sell some gold to fund some of its “Sovereign Wealth Fund” aspirations or make some deals, then the gains would be less, but still nothing to dismiss.

If you wanted to cause a distraction – announcing that you are revaluing gold and planning to sell it to invest in companies (or maybe even crypto currencies) might make everyone forget that the yield curve is meant to steepen!
Since I don’t understand why we hold so much gold as it is (I’m not in the barbaric relic camp, but am probably closer to that than the “sound/hard” money camp) I cannot see why we wouldn’t do some of this.

Would it lower the dollar? Probably, but for an administration trying to revert trade flow, a weaker dollar is a feature not a bug, even if they can’t say that out loud.

Tariffs

For now, despite the recent court ruling, it is worth resending our Tariff Revenue Charts which highlight the revenue that has come in so far (though subject to legal challenge) along with our rationale of why tariffs will take a long time to truly impact inflation.

Not the strongest argument right now after the court ruling, but some version of this argument remains relevant.

Bottom Line

It’s a long weekend and I could have written the umpteenth piece on the risks to the Fed and to the shape of the yield curve.

But, I thought it would be more fun to try to play devil’s advocate and create some discussion around tools and steps that could be taken to not just reduce the risk, but also potentially reverse the risk as the trade seems quite one-sided at this point and seems to not give the administration enough credit for trying to force things that we hadn’t thought could be forced.

It is too early to pound the table on flatteners, but that is the opportunity I’m looking for.

Nothing we’ve written or suggested today, if used, is helpful for the dollar, but, again, not sure that anyone involved in the U.S. efforts to import less and export more cares.

Enjoy your Labor Day weekend and get ready for all the labor data next week, all of which will be taken with a grain of salt given the recent adjustments.

Tyler Durden Sun, 08/31/2025 - 16:20

Fecal Fiasco: Labor Day Letdown As East Coast Beaches Close Due To Contamination

Zero Hedge - August 31, 2025 - 3:45pm

Fecal Fiasco: Labor Day Letdown As East Coast Beaches Close Due To Contamination

Some of the East Coast’s most popular beaches, stretching from Long Island all the way down to Florida, will be off-limits to swimmers this Labor Day weekend thanks to sky-high levels of fecal contamination, officials warned.

Photo: Elizabeth Halliday, © Woods Hole Oceanographic Institution

On Long Island, Benjamin’s Beach in Bay Shore, a favorite summer spot along the Great South Bay, was slapped with a swimming ban earlier this week after Suffolk County officials found bacteria levels above acceptable safety limits.

Health officials warned that swimming in poo water can result in gastrointestinal illness, rashes and infections of the eyes, ears, nose and throat, and urged residents to stay out of the water until testing shows it’s safe.

Meanwhile, beaches from Crystal River, Fla., to Cape Cod, Mass., and Ogunquit, Maine, have also been slapped with advisories tied to bacteria linked to fecal matter, threatening to spoil swimmers’ holiday fun.

The culprit? A nasty mix of urban runoff, sewage overflows and factory farm waste that’s been pushing dangerous pathogens straight into America’s waters, according to the nonprofit Environment America, the Daily News reports.

The group’s latest report paints a disturbing picture: more than 60% of all U.S. beaches, and 54% along the East Coast, had potentially unsafe contamination levels last year.

“In 2024, 1,930 of 3,187 beaches tested nationwide (61%) experienced at least one day when indicators of fecal contamination hit potentially unsafe levels — exceeding the EPA’s most protective standards,” the report warned.

Via Environment America

And if that wasn’t gross enough, Suffolk County officials are also telling locals to stay far away from Prestons Pond near Manorville, where a fresh bloom of toxic blue-green algae has made the water hazardous.

Contact with the slime can cause rashes, nausea, vomiting, diarrhea and even trouble breathing, according to the New York State Department of Health.

* * *

Meanwhile check this shit out.

Tyler Durden Sun, 08/31/2025 - 15:45

Meme Markets: Investing Vs Entertainment

Zero Hedge - August 31, 2025 - 3:10pm

Meme Markets: Investing Vs Entertainment

Authored by Lance Roberts via RealInvestmentAdvice.com,

Financial markets have transformed; today, trading and speculation have merged into performance art. The “Meme Market” culture now permeates mainstream finance. There was once a time when CEOs reigned as icons leading powerful companies, but today, some executives who once managed companies now lead cults.

For example, Palantir, driven by “Palantarians,” rallied more than 100% this year. Its fans call CEO Alex Karp “Daddy Karp.” Simultaneously, they ignore fundamentals, such as a 520x P/E ratio, a 12.9 PEG ratio, and a 108x price-to-sales. Yes, the company can certainly grow into some of that overvaluation, but most likely not all of it..

Another group remains unyielding to Michael Saylor, who heads up the one flailing company of MicroStrategy, which has been rebranded to just “Strategy,” to signify its new course of converting the company into a leveraged play on bitcoin. He regularly encourages his base with memes to further promote his leverage strategy. His followers congregate on Reddit and X under tags like “Irresponsibly Long $MSTR,” which tells you these investors have also disregarded fundamentals, like a 210x price-to-sales ratio, in favor of a “story.”

These are not investment conversations; they are fandom rituals.

Speculation rides on leverage. As we showed recently, margin debt has exploded over the last two months to the highest level on record, exceeding $1 trillion.

Furthermore, options volumes at meme‑linked names are at records, with short-dated, zero-day-to-expiration (0DTE) contracts now accounting for more than 61 percent of daily S&P 500 option volume. Retail “meme market” investors are responsible for half to 60 percent of that. That sensation feels more like gambling than investing.

The term, coined by Howard Lindzon, “degenerate economy,” captures this shift.

“A ‘degenerate economy,’ or ‘degen economy,’ refers to a speculative and high-risk financial environment where the lines between investing, trading, and gambling are blurred, often accelerated by mobile technology and social media.”

Specifically, in a degenerate economy, financial activities like trading meme stocks, cryptocurrencies, and betting are treated as entertainment rather than a disciplined investment strategy. The thrill of the
“meme market” and the dreams of fast profits are difficult to resist. Howard Lindzon’s index catalogs companies thriving on speculative excess. It includes Robinhood, CME, and Bitcoin-linked stocks. That basket has advanced roughly 23 percent this year versus the S&P 500’s near 10 percent rise.

The “meme market” concept has gone viral. As demand for risk has surged, product providers (aka Wall Street) have been happy to oblige. From a return of SPACs to IPOs, a slew of new ETFs, extreme options, and even event betting. For example, the CME teamed with FanDuel to offer event betting, as Coinbase offers 10× leveraged perpetual futures. In other words, the retail markets now mirror casinos. With all that, it is unsurprising that retail trading volume has reached an all-time high as a percentage of total volume.

The question is, what could go wrong?

What Could Go Wrong With A “Meme Market?”

Entertainment-first markets distort the decision-making process. Investors respond to narrative instead of earnings, speculation instead of valuation. Leverage amplifies outcomes, and options magnify risk. In a ‘Meme Market,” bubbles can expand quickly and reversals can be severe. As we noted in last week’s #BullBearReport, valuations are a terrible timing metric as they are a function of investor sentiment in the short term. However, historically, high valuations have always been linked to a form of “Meme Market,” whether it was the 1920s “Golden Age,” the 1960s “Nifty Fifty,” or the 1990s “Dot.com” boom.

“Valuation is the capstone of proximate causes for a market top, and the one most indicative of the potential magnitude of any subsequent selloff. It’s well known that valuations are high for the US market, but I thought I’d update my aggregate indicator, which combines the main measures of long-term stock-market worth. It previously peaked in April, but has just made a new all-time high this month. Not a welcome sign if you’re a long-term bull.” – Simon White, Bloomberg

Investors have always been drawn to memes throughout the last century. The latest “memes” of cryptocurrency and Artificial Intelligence will eventually meet the same outcomes as reality. While fantastic, those fundamental realities will likely fall short of outrageous expectations. When that happens, the adrenaline-fueled chase will likely result in a “panic-driven” reversal. The psychology of the meme-market and options trading addiction is real, and there have been numerous reports that liken options trading to “crack‑cocaine” for individuals.

“A new type of addict is showing up at Gamblers Anonymous meetings across the country: investors hooked on the market’s riskiest trades. At Gamblers Anonymous in the Murray Hill neighborhood of Manhattan, one man called options “the crack cocaine” of the stock market. Another said he faced hundreds of thousands of dollars in trading losses after borrowing from a loan shark to double down on stocks. And one young man brought his mom and girlfriend to celebrate one year since his last bet.” – WSJ

There are certainly many similarities between cocaine addiction and options trading.

When trading is driven by “sentiment” rather than fundamentals, problems tend to manifest. Such is particularly the case today when “social media sentiment” now leads price action. Algorithms trained on Reddit posts can outperform buy-and-hold in bull markets. How much better? About 70% better in 2023 and 84% in 2021. However, they underperformed during the subsequent market declines, but the influence is material.

“Meme Markets” is structured on entertainment psychology and can defy fundamentals for sustained periods. Retail-driven rallies lift meme-linked equities, and fans hold fast through volatility. The S&P 500 index, as discussed in “Buy Every Dip,” stays buoyed by passive flows that fuel the top-10 stocks in the index regardless of earnings growth.

“While passive flows now dominate the tape, investors are not making decisions. Michael Green noted that “the market has become a giant mindless robot” in describing the enormous, passive capital flows that automatically push stock prices higher. This metaphor refers to the mechanical, non-discretionary purchasing by index funds and other passive investment vehicles that dominate today’s market. The problem is that these flows are “valuation insensitive.” We made such a point in Jesse Livermore’s Approach to Speculation.” To wit:

Passive funds track indexes weighted by market capitalization. As stock prices rise, these funds buy more of the same names, regardless of valuation or fundamentals. This mechanical process has inflated the market value of the largest companies. The top 10 stocks in the S&P 500 now account for more than 38% of the index. That level of passive index concentration has not been seen since the peak of the dot-com bubble. While such concentration may be worrisome, as it elicits memories of the “Dot.com crash,” in the short term, this handful of companies’ performance determines the entire market’s direction.”

Investors mustn’t mistake recent market performance for stability. Meme-market rallies often concentrate within speculative corners. Therefore, the unwinding can intensify swiftly when the narrative shifts, whether triggered by macro shocks, monetary policy surprises, or regulatory whispers. Notably, institutional investors still apply fundamentals. That anchors the broad market to earnings, dividends, and macro data. High forward valuations, rising margin debt levels, and elevated short interest in meme stocks are all textbook signals warning of fragile structure.

An eventual reckoning will arrive. When it does, it will likely be swift and severe. Meme names will tumble, leverage will unwind, and volatility will spike. Like we saw in 2022, the broader market may dip modestly, but speculative components will suffer extensive damage. For long-term capital, the key will be to avoid the blowups while staying invested in fundamentals. And when entertainment fades, only those anchored in valuation, diversification, and discipline will hold through the storm.

Tyler Durden Sun, 08/31/2025 - 15:10

Trump Admin Prepares Crackdown On Illegals Draining HUD-Backed Housing Funds

Zero Hedge - August 31, 2025 - 2:35pm

Trump Admin Prepares Crackdown On Illegals Draining HUD-Backed Housing Funds

Tax-paying Americans have endured years of negative economic and social impacts from the illegal alien invasion facilitated under the Biden-Harris regime, which ultimately served their progressive billionaire friends, dark-money-funded far-left NGOs, and mega-globalist corporations.

No sane American voted for this invasion, yet Democrats allowed it to happen anyway - and many Americans have all suffered from the fallout, including one consequence still affecting tens of millions of working-class folks today: a housing affordability crisis fueled by the influx of millions of illegal third-worlders.

Adding millions of illegal third-worlders to the country through a manufactured invasion helped drive up the cost of housing and reduced affordability relative to wages in areas of heavy settlement, think of sanctuary states and sanctuary metro areas. Fiscally, illegals are a net drain - they create more in costs than they pay in taxes, such as soaking up government funds for public housing.

According to Fox News, citing Housing and Urban Development Secretary Scott Turner, the Trump administration has ordered a major review of HUD-funded housing to ensure that illegals no longer receive government vouchers intended to subsidize housing for citizens.

Turner wrote that each public housing authority has 30 days to conduct an audit to ensure that the existing orders are enforced. The department is asking for information about the public housing units and verifiable citizenship or "eligible immigration status." -Fox News.

"No longer will illegal aliens be able to leave citizenship boxes blank or take advantage of HUD-funded housing, riding the coattails of hardworking American citizens," Turner wrote.

“No longer will illegal aliens be able to leave citizenship boxes blank or take advantage of HUD-funded housing, riding the coattails of hardworking American citizens.” - @SecretaryTurner https://t.co/PV59wCJXct
— Sec. Turner Press Office (@SecTurnerPress) August 30, 2025

He continued, "Currently, HUD only serves one out of four eligible families due, in part, to the lack of enforcement of the prohibition against federally funded assistance to illegal aliens."

In late March, Turner and Homeland Security Secretary Kristi Noem signed the "American Housing Programs for American Citizens" memorandum of understanding that would end the "exploitation" of the country's housing programs by illegals.

"We're here signing a partnership to ensure that the wasteful misappropriations that have been going to assist the illegal aliens in our country will no longer go to assist them but instead to assist the American people," Turner said in a video statement on X in March.

Under @POTUS, Americans will no longer take a back seat to illegal aliens.

DHS @Sec_Noem and I want to make it clear: No more taxpayer-funded housing for illegals. pic.twitter.com/DWvYlSHEqg
— Scott Turner (@SecretaryTurner) March 24, 2025

American tax dollars for housing should be used to benefit citizens only, not illegals who are a net drain on the economy and society.

Tyler Durden Sun, 08/31/2025 - 14:35

Peter Schiff: Gold To $6,000 Next Year, Dollar Index To 70

Zero Hedge - August 31, 2025 - 2:00pm

Peter Schiff: Gold To $6,000 Next Year, Dollar Index To 70

Submitted by QTR's Fringe Finance

I sat down with my friend Peter Schiff this weekend to get his targets on gold miners, gold, the dollar and markets heading into the end of 2025 and beginning of 2026.

Schiff, never shy about his views, has spent decades warning of bubbles, currency debasement, and the inevitability of gold’s resurgence. This year the market is proving him to be exceptionally on point, with the gold miners ETF up more than 80% year to date. But, according to Schiff, the move is still just getting started.

“Look, I don’t think I’ve ever been more bullish than I am now,” he told me.

“Not just the fundamentals, which have never been better in my lifetime, really, for gold. But the technicals. Look at the close we just got on a monthly chart, on a weekly chart, on the daily chart for gold, for silver. Look at how the miners are now finally leading the rally. Gold stocks are going up now even when gold goes down.”

That refrain — miners leading the metal — kept coming up. Schiff has been hammering the point for months, insisting that if investors want exposure to the unfolding bull market, they should load up on the companies digging the metal out of the ground. “I argue that gold in the ground was as cheap as it’s ever been compared to gold above ground,” he said. “And as of a couple of days ago from when I put that report out, the gold mining stocks were up more than 20%, and gold was down about 1% or 2%. But now, on Friday, gold hit a new record high, and the gold stocks are now at new highs.”

On the year, Schiff reminded me, the numbers have been breathtaking. “The GDX is up 86%. GDXJ is up 87. Newmont Mining has almost doubled on the year. It’s up pretty much close to exactly 100%,” he said. “And I think it’s the number two stock in the S&P 500 year to date. But I think it’s going to be number one by the end of the year. I think Newmont is going to pass Palantir and it’s going to end the year as the number one stock in the S&P 500.”

Schiff has long derided Wall Street’s myopia, and this was no exception. “They downgraded Newmont and Barrick at $32 a share, calling them sells because gold was at $2,000. I was telling my customers that $2,000 was the floor,” he recalled. “Just like I said that $30 was the floor for silver. Here we are at $40, and $40 is still cheap as far as I’m concerned, especially with gold at almost $3,500. Forty-dollar silver is cheap.”

The conviction didn’t stop there. He argued that the miners have far more upside left. “I still think we have quite a ways to go in these miners markets — maybe at least another 50%, maybe 100%,” Schiff said. “If you put a market multiple on Newmont, it should double from here. Except by the time the gold stocks double from here, gold won’t be $3,500. It’ll be a lot higher than that.”

How much higher? Schiff didn’t flinch. “People used to needle me a lot because years ago, when gold was 1,500, 1,900, I was saying it’s going to 5,000 and it kind of peaked out. But 5,000 is not my target for gold now. It’s much, much higher than that. I don’t know where — 10,000, 20,000. Gold is going a lot higher because of how much time has gone by and how much more debt we’ve accumulated.”

In the shorter term, he gave a crisp forecast: “I think the price of gold could easily get to 4,000 by the end of this year. And maybe 6,000 next year. Who knows? Maybe higher. But it’s got a long way to go.”

Silver, too, is central to his bullish thesis. “I was saying thirty is the bottom for silver, like two thousand for gold. And here we are at forty. But forty dollars is still cheap,” he stressed. At another moment he predicted: “I would not be surprised to see silver gap well above forty dollars an ounce.”

Of course, no Schiff conversation would be complete without his disdain for Bitcoin. “Bitcoin is not digital gold, it’s anti-gold,” he said flatly. “If gold keeps heading higher, Bitcoin is going down. Look, gold closed at a record high on Friday. Bitcoin is 13% below its record high. Bitcoin is in a full-blown correction, maybe on its way to a bear market, while gold’s at new record highs. So how does that qualify Bitcoin as some digital version of gold when it doesn’t trade anything like gold?”

By Schiff’s calculation, Bitcoin’s best days relative to gold are already behind it. “Bitcoin right now is about 107,000 and gold is 3,450, so Bitcoin is 31 ounces of gold. The peak was in 2021 at 36 ounces. So you’re talking about four years ago is when Bitcoin made its high in gold. Since then it’s underperformed.” His outlook was blunt: “Maybe when you get Bitcoin back below 75,000 or maybe below 50,000, at some point people are going to throw in the towel. And then it’s just going to implode.”

If his outlook on crypto was bleak, his vision for the U.S. dollar was darker still. Schiff sees not just a correction, but a collapse. “I think that the dollar index, which right now has got a 97 handle on it, by the end of this year we could be at 90, maybe slightly below. And by the end of next year, if we go back to QE, we could go back down to 70. Now, 70 is about the record low from 2008. But I do think that ultimately we’re going to crack that. And I would expect the dollar index to be down near 40 or below.”

The implications, he argued, are massive. “We’re on the verge of a major crisis of the dollar and the bond market and the U.S. economy, financial market. Just like in the days and months leading up to the 2008 financial crisis, no one had a clue. But this time it’s bigger — it’s a sovereign debt crisis, a currency crisis.”

That means stocks, too, are set to suffer in real terms. “U.S. stocks have been falling in real terms for 25 years,” he said. “Measure the S&P in gold, and it’s lower today than it was 25 years ago. That trend is going to accelerate. Even if the S&P goes up, it will go up less than a year. So it’s going down.” He shook his head at the thought of bonds: “I couldn’t be more bearish on U.S. bonds. I would discourage anybody from owning not just treasuries, but mortgage-backed securities, corporate bonds. You’re just going to get killed.”

For Schiff, the roadmap ahead is clear. “Gold is going to go way up and the dollar’s going down. These gold stocks — by December 31st, 2025, the 10-year trailing return on gold stocks will be higher than the S&P. That’s my prediction. Let’s see.”

As the conversation wound down, I was struck by how consistent Schiff’s worldview has remained over the years. He has always framed gold not just as an asset but as the ultimate anchor of value in a world of paper promises. The difference today is that, for once, the world seems to be moving in his direction.

“Look,” he said finally, “the world is going back on a gold standard, whether we like it or not. Because the world needs to back their currency with something. They can’t back it with nothing. Gold is real money. And that’s where this is all heading.”

(WATCH THE FULL, EXCLUSIVE HOUR LONG INTERVIEW WITH SCHIFF HERE).

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. This post represents my opinions only. In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions. All positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullshit my way through things easier.

The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.

Tyler Durden Sun, 08/31/2025 - 14:00

Democrats Demand "Assault Weapons" Ban After Trans Mass Shooting In Minneapolis

Zero Hedge - August 31, 2025 - 1:25pm

Democrats Demand "Assault Weapons" Ban After Trans Mass Shooting In Minneapolis

In the US, gun deaths are often the focus of progressive and international criticism, with claims that the nation is a wellspring of violence and murder that could be solved simply by banning firearms. The disdain of the political left for the 2nd Amendment is no secret and their efforts to erase gun rights from the Constitution is a constant point of contention within American society.

Of course, this means that Democrats are required to ignore every other contributing factor to any shooting and deflect when they are confronted with inconvenient truths. Leftists are, once again, attempting to redirect public discourse as yet another trans shooter has hit the news feeds. The Minneapolis killer is one of at least five active shooters since 2018 that were confirmed as transgender.

Multiple other active shooter events have taken place in which the trans status of the killers was suspected but never revealed by authorities (authorities tried to hide Audrey Hale's trans status and her manifesto, for example).

In the case of the Robert Westman, a male posing as a female, notes from a manifesto and other evidence indicates that the trans ideology was central to his decision to murder two children and injure 17 others at a Christian school. It was the direct inspiration for the attack.

However, Democrat leaders and media figures like former Biden Press Secretary Jen Psaki argue otherwise. They claim that the availability of "assault rifles" is the real cause, not the insane political philosophy that ruled over Westman's every waking moment. Psaki shed alligator tears for the children of the Church of the Annunciation, while simultaneously denying that the trans ideology had anything to do with it and blaming conservatives for not supporting a firearms ban.

BREAKING: Jen Psaki is sobbing on live tv because Christians offered prayers to the families.

She says that recognizing the suspect as transgender "weaponizes" a community.

They want your guns. They really don't care about any of the children.

PSYCHOTIC B*TCH pic.twitter.com/CVh5eMxK1v
— Gunther Eagleman™ (@GuntherEagleman) August 28, 2025

Minneapolis Mayor Jacob Frey echoed these false sentiments and the calls for a ban on "assault weapons". Democrats pulled the same spin in 2023 when trans shooter Audrey Hale attacked a Christian school and killed six people including three children.

The goal is to distract from the reality of ongoing violent rhetoric from the trans community when it comes to Christians and conservatives. The community itself is a source of steady terrorist propaganda, yet, gun rights are somehow to blame.

When a member of ISIS commits a mass killing, people don't blame guns, they blame the man as well as the Muslim fundamentalism that inspired the attack. Why should trans terrorists be treated any different?

Mass shootings have always been exploited by Democrats as a moment of opportunity to undermine firearms ownership. They specifically gravitate to any mass shooing that involves an "assault weapon" (which no Democrat seems to be able to define). In general, any weapon that makes a private citizen more effective against government intrusion or oppression is on their list of weapons that they want banned in the near term.

And, as we have seen time and time again in Europe, Australia and Canada, gun confiscation always starts with the semi-auto, "military pattern" rifles and then incrementally moves towards a full spectrum gun grab.

First and foremost, it's important to put the shootings that Democrats and the media focus on into perspective. There are at least 100 million gun owners in the US with over 400 million guns. Out of those millions of people, around 15,000 are arrested per year for gun related murder or manslaughter. That's .01% of all gun owners in the country. In other words, leftists want to punish 100 million law abiding gun owners for the actions of .01% of criminal gun owners.

Mass shooting events make up less than 0.5% of all gun deaths every year. Of those shootings, attacks using rifles make up 32% with over 73% attributed to handguns. When it comes to overall gun violence, rifles only account for 4% of all shootings. Democrats only seem to care about shootings that involve white people and "black rifles".

The majority of gun violence takes place in urban centers and black communities. While making up about 13% of the U.S. population, black Americans account for over 50-60% of gun homicide victims (and the majority of the shooters in these cases are also black). In other words, most gun deaths in the US result from a demographic problem, not a gun rights problem. Remove the violence committed in black communities and America's murder stats would plummet.

Trans leftist accounts all over social media are celebrating the shooting and killing of children at the Minneapolis church by a trans gunman. They believe it is revenge against Christianity and the Trump administration for not allowing transitioning children, and defining sex as… https://t.co/owfZ3XCLD5
— Andy Ngo (@MrAndyNgo) August 28, 2025

As for trans shooters, the transgender movement is a Petri dish of mental illnesses including higher rates of narcissism and psychopathy. This is well documented. Take this bubbling psychological instability, add a political ideology that glorifies it, then inspire feelings of paranoia and hatred and you have a recipe for disaster.

It's a brand of unhinged violence visible every day on social media but rarely discussed by the political left. It was only a matter of time before another mass shooting occurred, not because of guns but because American society has become overly tolerant of mental illness, to the point that it is protected and celebrated.

Tyler Durden Sun, 08/31/2025 - 13:25

Trump Admin Moves To Cut Another $4.9 Billion In Foreign Aid Funding

Zero Hedge - August 31, 2025 - 12:50pm

Trump Admin Moves To Cut Another $4.9 Billion In Foreign Aid Funding

Authored by Arjun Singh via The Epoch Times (emphasis ours),

President Donald Trump on Aug. 28 proposed the cancellation of $4.9 billion in appropriated funds for foreign aid spending, using a maneuver that could effectively bypass the congressional approval process normally required to rescind the funds.

President Donald Trump in the Oval Office on June 10, 2025. Saul Loeb/AFP via Getty Images

The funds were allocated to the Department of State and the U.S. Agency for International Development—which is in the process of being closed by the Trump administration—during the Fiscal Year 2025 appropriations process.

Under the Impoundment Control Act of 1974, the government must make a rescission request to Congress, which then has 45 days to approve the cancellation of appropriated funds. A “pocket rescission,” however, refers to such requests made within 45 days of the end of the fiscal year, which is Sept. 30. In these cases, the funds are withheld during the 45-day congressional review period, and if Congress doesn’t act before the fiscal year ends, the funds expire.

“Last night, President Trump cancelled $4.9 billion in America Last foreign aid using a pocket rescission,” the Office of Management and Budget, a cabinet-level agency in the Executive Office of the President, wrote on X on Aug. 29.

Pocket rescissions are uncommon, and the last one attempted was in 1983, when President Ronald Reagan sought to cut $2 million appropriated to the National Oceanic and Atmospheric Administration. Trump, during his second term, has successfully requested some rescissions from Congress. A rescissions bill canceling $9.4 billion in funding for foreign aid and public broadcasters was approved by Congress in July.

Rescission requests, when presented to Congress, may be enacted through legislation with simple majorities voting in favor in both houses, meaning that the minority has no leverage to stop or alter the process. Democrats in Congress, who are the minority in both houses, have thus protested against Trump’s rescissions, but often to no avail.

Senate Minority Leader Chuck Schumer (D-N.Y.) said in an Aug. 29 statement that the announcement of the administration’s rescissions plan “is further proof” that Trump and congressional Republicans are set on “rejecting bipartisanship and ‘going it alone’ this fall.”

The question of federal funding for initiatives is set to take center stage in national politics when Congress reconvenes on Sept. 2, when it will have just 28 days to approve 12 spending or “appropriations” bills to fund the government for fiscal year 2026. Every year since 1997, Congress has failed to pass all the bills in time, necessitating a “continuing resolution” to prolong spending at the previous year’s levels while negotiations on permanent bills continue.

It is unclear whether funds subject to a “pocket rescission” would be reactivated by a continuing resolution. The Office of Management and Budget did not immediately respond to a request for comment about the matter.

Tyler Durden Sun, 08/31/2025 - 12:50

Chicago Mayor Going To War With Trump Over Possible Immigration Crackdown

Zero Hedge - August 31, 2025 - 12:15pm

Chicago Mayor Going To War With Trump Over Possible Immigration Crackdown

Leftists in sanctuary cities and states are scrambling to stop Donald Trump's deportation efforts, but is there anything they can realistically do to interfere with operations to remove illegal aliens from the US? Short of going to war with the federal government and a majority of the American public, the answer is no.

Chicago Mayor Brandon Johnson announced he is taking steps to fight President Donald Trump's expected immigration crackdown and potential National Guard deployment in the Chicago area. Johnson signed the "Protecting Chicago" executive order on Saturday as the Trump administration prepares to conduct a major immigration enforcement operation, which could start as soon as next week.

Johnson had a glassy, wide-eyed look of fear as he signed his executive order, indicating that the far-left politician is probably aware that if he takes his interference too far he might end up in handcuffs just like the estimated 550,000 illegal migrants currently residing in Chicago.

Johnson's order prevents any cooperation between local law enforcement and federal agents on the ground. It demands that federal agents operate without masks and that they display their names and badge numbers (an act that would expose them and their families to possible retribution by leftist activists). The mayor also directed an army of lawyers working for the city to pursue all legal and legislative avenues to bog down White House operations in the courts.

Johnson has recently called for direct interference against ICE arrests and any National Guard presence by local activist groups.

Democrats like Johnson consistently call for actions to "defend their people" from federal sweeps, but illegal immigrants are not citizens of Chicago. They belong to no city or state, and they do not have a reasonable expectation of the same due process that Americans citizens have. Due process for an illegal immigrant under federal law is simply identifying that they are illegal, and then booting them out of the country.

This is why the Trump Administration has considerable latitude when it comes to mass deportations. Numerous Illinois officials including Governor JB Pritzker have admitted that there is very little they can do to prevent deportations. Ald. Ray Lopez, who represents the 15th Ward, believes the deployment of National Guard troops could help improve public safety and does not believe the mayor's executive order accomplishes much.

"I believe that we already work with the federal government on multiple levels. This would be an enhancement to that, and there are safeguards in place, and there should be nothing stopping us from exploring those options. Look, if he president and mayor actually had a real conversation instead of talking at each other, maybe we could work some of this out..."

Thousands of Chicago residents, specifically in black communities, have complained about the immigration surge which has swallowed up jobs and housing in the city. Mayor Johnson's voter base is against him.

The reason Democrats have been so insistent on defending illegal aliens is complex. First, mass immigration supports the overall agenda of the political left to erase western culture and national borders in the long term.

Second, mass immigration allows blue states to gain political leverage through redistricting and the Electoral College by artificially pumping up population numbers in the census (the census does not currently distinguish between legal and illegal residents in the total population).

Third, Democrats have long sought to institute a mass amnesty bill which would make all illegals into voting citizens, thereby securing Democrat political power for generations to come.

Trump's ICE operations are in direct conflict with the log running leftist agenda to hijack the US political system and turn native born Americans into minorities in their own country. It should also be noted, for the people who whine constantly that Trump is "not doing enough", that this is an example of what his administration has to deal with on a daily basis. Democrats have chosen illegal immigration and open borders as the hill they want to die on and they are doing everything in their power to sabotage migrant removal.

Tyler Durden Sun, 08/31/2025 - 12:15

Chinese Fentanyl Financier Evades U.S. Extradition After Daring Mexico City Tunnel Escape

Zero Hedge - August 31, 2025 - 11:40am

Chinese Fentanyl Financier Evades U.S. Extradition After Daring Mexico City Tunnel Escape

Submitted by The Bureau's Sam Cooper,

In a case reminiscent of the underground prison break of Sinaloa cartel boss "El Chapo" Guzmán, a high-profile Chinese national code-named Chino — who prosecutors say trained Hispanic drug traffickers to operate on U.S. soil, and who has been described as one of the main suppliers of fentanyl and a financial architect for both the Sinaloa and Jalisco Nueva Generación cartels — has suspiciously escaped Mexican custody through a hole in a wall while under house arrest. According to President Claudia Sheinbaum, he had been on the verge of extradition to the United States.

Indictment documents identify him as Zhi Dong Zhang, born in Beijing in 1987, and describe "Chino" as approximately five feet seven inches tall, weighing 175 pounds. He bridged the Chinese and Mexican wings of cartel fentanyl networks — and, significantly, is alleged to have served as a rare operative between Mexico's two largest rival trafficking groups, the Sinaloa and Jalisco Nueva Generación cartels.

Demonstrating the financial reach that underscores what national-security experts have told The Bureau — that Chinese networks exert significant influence over the cartels by controlling both money laundering and chemical precursor supply — Zhang was tied to "approximately 150 companies and approximately 170 bank accounts," according to U.S. investigations.

Zhang, known also as "Brother Wang" and "Pancho," is charged in the Northern District of Georgia with a series of narcotics and financial crimes, including conspiracy to import cocaine and fentanyl, conspiracy to distribute narcotics, and money-laundering conspiracies and monetary transactions affecting interstate and foreign commerce. The government's 30-page detention motion, filed on July 11, 2025, lays out his alleged command role in a transnational network spanning Mexico, the United States, and China — a filing that came just weeks before Mexico extradited 26 cartel prisoners on August 12.

In the early hours of July 11, Zhang reportedly evaded National Guard members stationed outside his residence and slipped through a tunnel connecting his home in the Lomas de Padierna neighborhood to a neighboring property. According to reporting, three outsiders helped him flee — a maneuver quickly compared to El Chapo's 2015 escape from the Altiplano prison.

Sheinbaum confirmed three weeks ago that Zhang had been "about to be extradited to the United States" when he escaped — an unusually frank admission of the diplomatic stakes.

Zhang was detained in an elite Mexico City neighborhood in October 2024 by federal forces acting on a U.S. extradition request. Despite the gravity of the charges, a Mexican judge allowed him to trade prison for guarded house arrest. The Attorney General's Office is now investigating the guards and judicial officials assigned to protect him, Sheinbaum said.

El Universal reported that the company responsible for installing the electronic bracelet that Zhang broke free of was not certified to provide such security and that his escape bore the hallmarks of corruption and collusion.

Mexican media have reported that Zhang is allegedly responsible for trafficking more than 1,000 kilograms of cocaine, 1,800 kilograms of fentanyl, and over 600 kilograms of methamphetamine, generating an estimated $150 million annually in profits, with operations spanning the United States, Central and South America, Europe, China, and Japan.

According to U.S. court filings, Zhang directed the preparation of cocaine and fentanyl shipments in Mexico, arranged smuggling into the United States by couriers using vehicles and aircraft, and managed logistics once the drugs arrived. He also oversaw underground "stash house" cash brokerages where cartel proceeds were collected, counted, and deposited into major U.S. banks, including JPMorgan, Wells Fargo, Bank of America, and Chase. Distribution points, prosecutors allege, stretched from Georgia and California to Illinois, Ohio, Texas, North Carolina, New York, and Michigan.

In the government's telling, Zhang functioned not only as a financier but as a corporate manager — orchestrating narcotics supply and laundering networks across multiple continents, while directing associates in Atlanta to train Hispanic couriers to make structured cash deposits into U.S. financial institutions.

A raid on one California stash house revealed "approximately 150 companies and approximately 170 bank accounts that were connected to Zhang's organization through wire transfer records and corporate registration information," indictment filings state, leading detectives to "approximately USD $20 million in proceeds that were deposited into bank accounts controlled by Zhang's organization in 2020 and 2021."

Through the interception of encrypted communications on DingTalk, WeChat, and Signal, and admissions by a cooperating conspirator, investigators learned that Zhang served as the critical bridge between two arms of his operation: a Mexican wing responsible for collecting drug proceeds directly from traffickers, and a Chinese wing tasked with laundering the money through bulk cash smuggling, bank deposits, and wire transfers. The evidence portrays Zhang in a command-and-control role, linking fentanyl suppliers in mainland China to the cartel logistics network in Mexico. U.S. national-security experts have separately warned that China's chemical sector — including operators with Chinese Communist Party ties — has been subsidized to produce and export precursor chemicals critical to fentanyl production, providing the geopolitical backdrop to Zhang's activities.

Experts such as former DEA Special Operations Division investigator Donald Im told The Bureau that operators at Zhang's level often maintain significant ties to the Chinese Communist Party — both through underground banking and money-laundering networks, and through privileged access to state-regulated precursor chemical supplies.

In an unrelated post today, responding to a New York Times investigation on Chinese election-interference networks in New York City, former CIA analyst Peter Mattis asserted that the CCP "is comfortable with criminality" and linked its operations to drug-trafficking cases. "We also have the CCP's export of fentanyl precursors as a matter of national policy via VAT rebates," Mattis wrote, citing U.S. congressional investigations and testimony.

California Stash Houses Reveal Cartel Cash in U.S. Banks

In March 2021, detectives raided the residence of a cooperating conspirator in Rowland Heights, California, uncovering a stunning cache of evidence that laid bare the financial backbone of Zhang's network. Inside, authorities found hundreds of documents tied to Zhang's organization: folders containing names, aliases, IDs, passports, corporate registrations, bank records, SIM cards, and post office keys. Many paired photographs with bank accounts investigators later confirmed as belonging to Zhang's associates. The cache revealed at least 25 accounts used to launder cartel proceeds, anchoring the probe that traced drug money from Mexican traffickers through Zhang's Chinese laundering arm and into the U.S. banking system.

The indictment details Zhang's financial footprint. On July 20, 2020, $35,000 and $20,000 were deposited into JPMorgan Chase accounts and $80,000 into a Wells Fargo account, all linked to Zhang's front company Mnemosyne International Trading, Inc.; on December 2–3, 2020, additional deposits included $35,000 into Bank of America, $65,000 into another Chase account, and $50,000 each into two more Chase accounts. Federal forfeiture schedules list seizures of more than $431,000 from a Citibank account, $145,000 from First Citizens Bank, $52,000 from Wells Fargo, and additional tens of thousands from Bank of America and Chase accounts — all alleged narcotics proceeds.

In August and September 2021, acting at Zhang's direction, a cooperating conspirator leased five more stash houses and two vehicles across California — in Los Angeles, Rowland Heights, Diamond Bar, Alhambra, and Monterey Park — for drug and laundering operations, later training an associate known only as "Willy" to manage them.

Court records also detail surveillance of a July 2020 Atlanta operation in which $100,000 in cartel cash was delivered to one of Zhang's associates, Jesus Miranda Cota. Authorities observed Cota make structured deposits: $35,000 into a Chase account, $80,000 into Wells Fargo, and another $20,000 into the Chase account.

In January 2022, investigators say Zhang expanded further. While in Hermosillo, Mexico, he recruited another conspirator, "CC-2," introduced by Willy. In intercepted messages, Zhang and CC-2 discussed shipments into Atlanta, including one initially set at 15 kilograms of cocaine and one kilogram of fentanyl, later adjusted to 10 kilograms of cocaine and one kilogram of fentanyl. In these encrypted exchanges, Zhang used coded language, referring to fentanyl as "coffee" and cocaine as "food."

Zhang is now considered a high-priority fugitive from U.S. justice. Interpol has reportedly issued a red notice.

Tyler Durden Sun, 08/31/2025 - 11:40

Missouri Governor Calls Special Session For Redrawing Congressional Map

Zero Hedge - August 31, 2025 - 9:55am

Missouri Governor Calls Special Session For Redrawing Congressional Map

Missouri Gov. Mike Kehoe announced on Aug. 29 that he was calling state lawmakers back to the capital for a special session tasked with redrawing the congressional district lines ahead of the 2026 election.

His announcement came just hours after fellow Republican Texas Gov. Greg Abbott signed into law Texas’s new congressional voting map, setting the stage for the GOP to gain five more seats in the House of Representatives.

Scheduled to begin Sept. 3, T.J.Muscaro reports for The Epoch Times that Missouri’s redistricting also appears to give Republicans help in the coming midterms, as Kehoe’s proposed map looks to stretch a Kansas City-area district - currently held by Democratic Rep. Emanuel Cleaver—into Republican-leaning rural areas.

“Missouri’s conservative, common-sense values should be truly represented at all levels of government,” Kehoe said in a statement.

Cleaver is one of two current Democratic-controlled districts in the state. The other is in St. Louis, held by Rep. Wesley Bells. There are six total congressional districts in Missouri.

Cleaver decried the decision to alter his district in a statement.

“This attempt to gerrymander Missouri will not simply change district lines; it will silence voices. It will deny representation,” he said.

The state’s Democratic House Minority Leader Ashley Aune also spoke out against the change, accusing Kehoe of looking to “steal a congressional seat for Republicans.”

However, Missouri Democrats are unlikely to stop their Republican colleagues from passing the new map.

While they could filibuster in the Senate, Republicans have procedural means to shut it down, and the number of Democrats is too small for their absence to prevent a quorum.

Meanwhile, California’s Democratic Gov. Gavin Newsom is asking voters to approve a new congressional map that seeks to help his party win five seats as a response to Texas’s new map favoring Republicans.

It passed the lower state Assembly by a vote of 57–20, and then the state Senate in a 30–8 vote on Aug. 21. It was signed into law by Newsom about 30 minutes after the legislature approved it. California voters will get their say on Nov. 4.

There are redistricting movements being considered in other states as well, including Florida and Indiana, where Republicans look to gain an advantage, as well as Illinois, Maryland, and New York, where Democrats seek to further expand their foothold.

Republicans won a 220-215 majority over Democrats in the House of Representatives in 2024. Democrats will need to net three seats in November 2026 in order to reclaim the lower chamber.

Missouri’s special session will also consider a constitutional amendment that would increase the difficulty for citizen-initiated ballot measures to be approved. Current ballot measures resulted in the abortion and marijuana legislation amendments that were adopted by the state in recent years.

Tyler Durden Sun, 08/31/2025 - 09:55