Individual Economists

"Challenging External Environment": Volvo Crashes Most On Record After Earnings Miss

Zero Hedge -

"Challenging External Environment": Volvo Crashes Most On Record After Earnings Miss

Shares in Volvo Cars crashed the most on record in Stockholm, with Bloomberg data going back to late 2021, after it reported fourth-quarter earnings that missed analyst expectations.

A toxic blend of higher US tariffs, cuts to EV subsidies, a stronger Swedish krona versus a weaker dollar, and an intensifying price war in China all squeezed fourth-quarter profitability, the Swedish-origin automaker detailed in its earnings release.

It reported an Ebit margin of just 2% and an operating income that came in well below Bloomberg Consensus estimates.

Here's a snapshot of fourth quarter estimates (courtesy of Bloomberg):

  • Revenue SEK94.38 billion, estimate SEK101.83 billion (Bloomberg Consensus)

  • Operating income SEK1.89 billion, estimate SEK4.6 billion

  • Ebit margin 2%, estimate 4.56%

  • EPS SEK0.43, estimate SEK1.24

  • Sales volume 195,700, estimate 196,850

  • Europe retail sales volume 90,000 units, estimate 93,693 (2 estimates)

  • China retail sales volume 44,200 units, estimate 42,956 (2 estimates)

  • US retail sales volume 30,900 units, estimate 33,350 (2 estimates)

  • Others retail sales volume 30,600 units, estimate 27,965 (2 estimates)

  • BEV Vehicles sales volume 46,700 units

Volvo wrote in the earnings release that "results reflect a challenging external environment."

"We have a very tough market," CEO Hakan Samuelsson told Bloomberg Television earlier. He said the removal of EV incentives in the US and tough competition in China have all hampered sales.

The shares plunged as much as 25% in Stockholm, the steepest intraday drop on record since the stock started trading in late 2021.

Shares have been down and to the left since trading began in October 2021.

Wall Street analysts are mixed to bearish on Volvo. There are only 2 "buys," with 9 "holds," and 3 "sells."

EU industry chief Stephane Sejourne recently issued a warning, saying Europe's auto industry is "in mortal danger."

The obvious question is how Brussels elites managed to screw up so royally. Because once the auto industry collapses, so does the backbone of wartime manufacturing capacity.

Tyler Durden Thu, 02/05/2026 - 08:05

Memory Shortage Fears Spread, Raising Alarm At Qualcomm And Arm

Zero Hedge -

Memory Shortage Fears Spread, Raising Alarm At Qualcomm And Arm

Consumers are about to learn that one of the most frustrating side effects of the AI boom will be the "great memory crunch." Surging data center demand is siphoning high-bandwidth memory (HBM) supply away from consumer devices, setting the stage for slower growth across the electronics industry this year.

We have been vocal about this HBM crunch, even citing industry insiders who say shortages are only set intensify. "If you want to buy any consumer goods, PCs, or smartphones ... do it now," one industry insider told Nikkei Asia last week. Read the report here.

On Wednesday, Qualcomm and Arm Holdings also confirmed that the HBM shortage will cap smartphone production and slow near-term growth.

For context, Qualcomm is the largest maker of smartphone processors, and Arm derives much of its revenue from royalties on technology used in the industry.

"Industrywide, memory shortages and price increases are likely to define the overall scale of the handset industry," Qualcomm CEO Cristiano Amon told Wall Street analysts on an earnings call.

Amon warned that Chinese customers have already said they'll build fewer handsets this year because of this emerging crunch.

Last week, Goldman analyst William Chan warned clients:

Memory shortage is real and accelerating due to the AI infra demand, leaving a significant shortage for the conventional side of the industry, think smartphones, PCs and other consumer electronics which require high-bandwidth memory:

Micron Technology Inc. said an ongoing memory chip shortage has accelerated over the past quarter and will last beyond this year due to a surge in demand for high-end semiconductors required for AI infrastructure.

On Friday, Chinese media outlet Jiemian reported that major Chinese smartphone makers including Xiaomi Corp., Oppo and Shenzhen Transsion Holdings Co. are trimming their shipment targets for 2026 due to rising memory costs, with Oppo cutting its forecast by as much as 20%. All three did not respond to requests for comment.

Nintendo emerged as an early casualty of surging memory costs. The company's shares have sagged as rising component prices, especially HBM, are set to dent margins. Goldman analysts first warned about Nintendo's HBM woes in late December (read here).

Other companies have warned about the memory crunch. Chipmaker MediaTek told analysts in a call this week that the situation is "evolving."

Intel CEO Lip-Bu Tan warned the shortages could persist for years: "There's no relief as far as I know."

Also, Goldman's Allen Chang recently had to lower his global PC shipment forecasts for 2026-2028 due to the memory crunch.

A look at the Amazon price-tracking site CamelCamelCamel shows a parabolic surge in the price of Crucial Pro DDR5 64GB RAM, which has jumped from $145 to $790 in just six months.

TrendForce expects 70% of high-end memory chips produced this year will be consumed by data centers.

Professional subscribers can learn more about the memory industry on our new Marketdesk.ai portal​​​​.

Tyler Durden Thu, 02/05/2026 - 07:45

What Goes Around: The EU's Extralegal Sanctions Regime

Zero Hedge -

What Goes Around: The EU's Extralegal Sanctions Regime

Submitted by Pascal Lottaz

It has come as a shock to many of us in the alternative media sphere when, on December 15, the EU put the esteemed analyst, political commentator, and former Swiss Army colonel Jacques Baud, on its Russia-Sanctions list. He was one of several newly sanctioned individuals (alongside, for instance, the popular French journalist, Xavier Moreau). Baud is already the second Swiss to be sanctioned. In June 2025, the EU announced that Nathalie Yamb, a Swiss-Cameroonian activist against neocolonialism, would be sanctioned.

Being on the EU sanctions list is a devastating event for the people concerned, especially if they reside in an EU country or a closely associated state like Switzerland, Norway, or the UK. It means banks will freeze their accounts, credit companies will cancel their cards, they are not allowed to enter into contracts with EU-affiliated companies or private persons, and no business in the EU is allowed to have dealings with them, which, in theory, even precludes them from buying bread and other necessities of life. Furthermore, many international businesses will cancel all their services to them, including mail providers, social media platforms, etc. Even Swiss banks freeze or cancel accounts, out of fear they might get in trouble if they don’t comply with EU regulations. I recently interviewed two sanctioned people, Nathalie Yamb and Hüsseyin Dogru, and their testimonies are heartbreaking. For an equally harrowing account by Jacques Baud, see the most recent interview with him on Nima Alkhorshid’s ‘Dialogue Works’ channel. Nathalie also posted the short video below, in which she gives an overview of the ordeal (post in French, subtitles in English).

Are Sanctions Against EU Citizens and Residents Illegal?

As of early January 2026, there were 59 private individuals on the EU’s Russia sanctions list. Originally, this tool was levied only against Russian businessmen and people living in Russia (which was already problematic in my view), but since 2024, the EU has begun using sanctions as a political sledgehammer to crack down on various forms of dissent. Yamb, for instance, was sanctioned mostly for her activism against France’s neocolonial behavior in Africa, and Dogru for being a vocal German journalist for the Palestinian cause. The little text snippets that serve as justifications for the decision to include them in the sanctions list even mention those non-Russia-related activities for their listing.

Naturally, one would assume that in a free and liberal society, based on the rule of law, sanctions against citizens and residents must be illegal. Right? In fact, the EU parliamentarian Michael von der Schulenburg has commissioned a report that is very clear in its verdict. Sanctions, it holds, break existing EU law on individual freedoms (see my interview with him here).

However, the problem we have is that while sanctions are doubtlessly a breach of some EU law, there is other EU law that allows the Council to take these measures. Procedurally, the EU is not in breach of its competences because sanctions are not a domestic policing matter but a foreign policy decision.

Foreign Policy, For Domestic Purposes

I will not go into the details of the accusations against the sanctioned individuals. That would be beside the point. Whether the reasons given for the sanctions have merit or not is not the issue. The problem everyone should understand is that the accusations don’t need to constitute illegal behavior. There are no laws in the EU or its member states that forbid doing what the people on the Russia-Sanctions list have been doing. On the contrary. Many of the activities, including civil activism (Nathalie Yamb), journalism (Hüsseyin Dogru), or the publication of geopolitical analysis (Jacques Baud) are explicitly protected liberties.

That’s the point. Since the acts committed are not crimes, the sanctions against them are not judicial measures, either. The EU explicitly says so on its sanctions explainer homepage:

Restrictive measures or ‘sanctions’ are an essential tool of the EU’s Common Foreign and Security Policy. They allow the EU to respond to global challenges (sic) and developments that go against its objectives and values.

Decisions on sanctions are taken by the Council of the European Union by unanimity.

EU sanctions are targeted and aim at those responsible for the policies or actions the EU wants to influence. They do not target a country or population.

Sanctions are not punitive (sic) and instead seek to bring about a change in the policy or conduct of those targeted, with a view to promoting the objectives of the EU's Common Foreign and Security Policy.

Great. Isn’t it?

The EU has managed to create a system under which the executive branch is within its legal rights, under its foreign policy arm to designate behavior of its citizens as “undesirable” and then impose the most draconian measures imaginable—all without trial or conviction. Everything Baud, Yamb, Dogru, and others did (and still do) is perfectly legal in the EU. But the Council of the European Union has the power to impose coercive measures on them to “encourage” a change of behavior. And because member states are treaty-bound to implement EU sanctions, there is no recourse to domestic courts for the victims.

What an accomplishment. The EU has sneakily outmaneuvered the legal safeguards of its member states against arbitrary political persecution.

Not illegal. Extralegal.

So, I think this is key to understanding what’s happening: the sanctions are not illegal in the sense of a breach of protocol. They are part of the powers the Lisbon Treaty grants the EU Council, and they have a set and well-defined process behind them. They are legal in a purely formal sense of the word (leaving aside the questions of conflict with other branches of EU law that the von der Schulenburg’s Report raises). What the sanctions do is they create a regime that allows the circumvention of safeguards against political persecution. In this sense, they must be understood as extralegal measures. They create a space for the persecution of people not subject to the legal system as we know it.

That is why all the usual principles of justice do not apply to the sanctions question. Due process, the assumption of innocence, the right to be heard before conviction, etc. All of these fundamental bedrocks of the legal system don’t come into play because the sanctions themselves are not judicial measures.

The only recourse victims of this system have is to appeal to the European Court of Justice (ECJ). But—and here comes a very big but—the ECJ will only check if the sanctions decision is formally consistent. It will not check whether the accusations and the imposed sanctions regime are proportional or infringe on basic rights of the sanctioned individuals. The ECJ will only make sure the rationale given is correct. What this means is that only if the victims can show that the little blurb in the sanctions database is factually incorrect, the ECJ might issue an order for the EU Council to delist them. However, if the accusations are consistent, then the ECJ will uphold the sanctions. Hence, as long as the Council doesn’t lie in the sanctions rationale, more or less anything goes. The ECJ will defer to the EU Council regarding the political importance of sanctioning someone. It does not interfere with the logic of taking sanctions. Sounds incredible, but I talked to a sanctions law scholar, Alexandra Hofer, from the University of Utrecht, and she explains the situation in these terms.

And to make matters worse, even when the ECJ finds that the Council used an incorrect rationale (aka the accusations are lies), the Council, at any time, can simply list the individuals again with an adjusted rationale. Then, the legal circus begins anew for the victims, as they have to bring a new case to the ECJ. This happened, for instance, to Petr Aven and Mikhail Fridman, two Russian businessmen who won their case against the EU Council in 2024, but remain on the sanctions list until today with an adjusted rationale. The EU Council has effectively absolute and infinite power over who gets sanctioned.

Turning the Weapons Inward

I wish I could say that this is the first time a Western institution has pulled such a dirty trick on civil society. But it is not. As Nathalie Yamb, in my interview with her, pointed out, EU countries and the USA have been using sanctions for decades to put extralegal pressure on activists and journalists in Africa and elsewhere. In fact, this is standard neocolonial behavior. This is why we cannot discuss sanctions without addressing Europe’s unresolved colonial mindset.

The USA, too, has been using sanctions as a tool to crack down on legal behavior, for instance, with its attack on personnel from the International Criminal Court (ICC) or, most recently, the sanctions on the UN Special Rapporteur on the occupied Palestinian territories, Francesca Albanese.

Just as the Patriot Act after 9/11, suddenly gave the US government the ability to use security services internally that were meant to protect the nation from external enemies only, the expansion of EU sanctions against people within the EU (or Schengen area) is transforming a dirty foreign policy tool into an even uglier domestic policy tool.

The weapons to fight dirty outside are being turned inward. This is a prime example of why being silent when our states commit crimes overseas will, in the end, come to haunt us domestically. The chickens are coming home to roost. Unfortunately, as always, the first ones to suffer this are the people who fought against the injustices abroad already. Nathalie Yamb being the prime example.

Right now, there are various pundits in the blogosphere and in mainstream media who more or less argue along the lines of “deserves them right, traitors.” These people, too, one day will understand what this system means if it is allowed to foster and grow in its draconian scope. By then, it will be too late. Either this stops now, or the future for freedom and democracy in the EU is bleak.

The right of the sanctioned individuals to appeal to the ECJ is at best a paper-thin fig leaf for the EU to pretend that proper legal recourse is possible. In fact, granting the victims this form of fake access to the ECJ makes it (probably) even harder for them to win in other courts. For instance, since the sanctions create a severe infringement on their human rights, there is no question that human rights courts (there are several) might be used to challenge the regime. However, for the courts to act, one of the largest hurdles is proving that all domestic remedies have been used up. Hence, before the ECJ has been addressed, the chances for the victims to have a human rights court pick up their case seem relatively slim (it is, nevertheless, an avenue the victims should probably explore with their legal teams).

The Eurocratic Death of Democracy

The only hope I have is in popular uproar against this sanctions regime of doom. Political repression needs political answers. However, it will take a lot to put this genie back in the bottle. Even on a national level, the member states seem pretty happy with the new tool.

Florian Warweg, a courageous German journalist who was on my show before, actually asked his government spokespeople at the Federal Press Club (Bundespressekonferenz) on December 17 about the case of Jacques Baud and the legality thereof. The smug answer he got from Martin Giese of the German Foreign Ministry tells us most of what we need to know about how these gray bureaucrats perceive their actions and what they have in store:

(…) people who do such things can be sanctioned if the legal grounds exist and if there is a corresponding decision by the Council of the European Union. That happened this Monday, it will continue to happen, it has happened in the past, and anyone operating in this field must expect that it could also happen to them. (…)

All those who do not agree with their sanctioning have all possible legal means to challenge it. They can appeal to the Council, and they can also bring the case before the European Court of Justice.

What a blatant intimidation attempt. Seems like a pretty straightforward admission that there is more to come. After all, as I established above, the sanctions do have legal grounds in the purely formal sense, and the victims can indeed call on the very institution that took the sanctions decision and its rubber-stamp court that will only check the formalities. Seems very fair, right?

Here you go. This is how democracy dies (again). By executive decree and bureaucratic smug. Well done, European Union.

Tyler Durden Thu, 02/05/2026 - 07:20

These Are America's Healthiest States

Zero Hedge -

These Are America's Healthiest States

“Blue Zones” are regions of the world where people live longer and healthier lives, supported by habits that boost longevity.

Loma Linda, California is one of the few recognized Blue Zones, alongside Okinawa, Japan and Ikaria, Greece.

Just as place can have a powerful influence on health outcomes, differences vary meaningfully across America.

This graphic, via Visual Capitalist's Dorothy Neufeld, shows the healthiest U.S. states, based on data from America’s Health Rankings Report by the UnitedHealth Foundation.

The Northeast Produces America’s Healthiest States

For the analysis, states were measured on 99 indicators such as economic hardship, smoking rates, and mortality rates. Overall values were measured in z-scores, with a score of 0 representing the national average.

The small state of New Hampshire leads the nation with a score of 0.99.

The state’s social and economic factors—seeing the lowest food insecurity, homicide rates, and highest high school completion—drive health outcomes. Additionally, it ranks among the top five in indicators like exercise rates and fruit and vegetable consumption.

As we can see, the Northeastern states of Massachusetts, Vermont, and Connecticut all follow next in line.

Utah, ranking in fifth, stands as a regional outlier. Notably, it ranks first nationally across indicators including smoking rates and income inequality. However, factors such as low public health funding and a lack of primary care providers weigh on its ranking.

Interestingly, Kansas and Illinois, both Midwestern states, had health scores falling closest to the national average.

Where Are the Least Healthy States?

Southern states, by contrast, see the lowest scores in health nationwide. Louisiana, with a score of -0.94 ranked worst overall, followed by bordering states, Arkansas (-0.83), and Mississippi (-0.77).

Beyond economic hardship, these states see some of the nation’s highest homicide rates, severe income inequality, and low levels of physical activity. Together, this highlights how health outcomes are shaped by a web of social and economic conditions.

To learn more about this topic, check out this graphic on America’s most common drugs.

Tyler Durden Thu, 02/05/2026 - 06:55

10 Thursday AM Reads

The Big Picture -

My morning train reads:

The Bitcoin Perpetual Motion Machine Is Starting to Sputter: Crypto treasury companies quietly crept into index funds and retirement accounts. Its collapse is good news for all of us. (Slate)

DraftKings and FanDuel spending millions on 2026 midterms: The two largest online sports gambling companies, DraftKings and FanDuel, have already spent millions of dollars on the 2026 midterm elections, according to FEC disclosures filed on Friday. This is a sea change for the industry, which has traditionally focused its political spending on state politics. (Popular Information)

U.S. Manufacturing Is in Retreat and Trump’s Tariffs Aren’t Helping: Levies on imports were supposed to bring back a golden age of U.S. manufacturing. They haven’t worked, so far. (Wall Street Journal)

Pick for Federal Reserve Chair May Surprise The President: A childhood job at a racetrack taught Kevin Warsh more than he realized about how to amass power. (Politico)

Stop Blaming DoorDash for the Affordability Crisis: One DoorDash Discourse to rule them all: Food away from home is down. Groceries are up. This is especially true for young people. Affordability is a real problem. (Mike Konczal)

Meet ‘Coalie,’ the Lethal Mascot for Dirty Energy: Secy of the Interior Doug Burgum is using an anthropomorphized lump of coal, named “Coalie”, as the mascot of President Donald Trump’s “American Energy Dominance Agenda.” The use of Coalie as a mascot for the “American Energy Dominance Agenda” is seen as a perversion of its original purpose, as it now promotes the use of “clean, beautiful coal” despite the negative environmental effects of coal consumption. (Bloomberg free)

The Murder of The Washington Post: Wednesday’s layoffs are the latest attempt to kill what makes the paper special. (The Atlantic)

America has reached peak sauce, and some people won’t leave home without it: Just how much do we love condiments? We’re stashing them in purses, backpacks and glove compartments. (Washington Post)

The Paramilitary ICE and CBP Units at the Center of Minnesota’s Killings: Two agents involved in the shooting deaths of US citizens in Minneapolis are reportedly part of highly militarized DHS units whose extreme tactics are generally reserved for war zones. (Wiredsee also The powerful tools in ICE’s arsenal to track suspects — and protesters: Biometric trackers, cellphone location databases and drones are among the surveillance technologies that federal agents are tapping in their deportation campaign. (Washington Post) see also ICE Begins Buying ‘Mega’ Warehouse Detention Centers Across US: Plans for ‘mega centers’ and jails in nearly two dozen communities have sparked protests over suitability, proximity to homes and schools. (CityLab)

No Cult Favorite: BREAKING AWAY Is a Masterpiece: I trust Breaking Away completely. Simply and without strain, it remains one of the greatest and most truthful American films ever made. (Tremble…Sigh…Wonder…)

Be sure to check out our Masters in Business interview  this weekend with Bob Moser, CEO and founder of Prime Group Holdings, a private investor in unique real estate holdings. They created Prime Storage, one of the largest, privately-held self-storage brands in the world, with over 19 million rentable square feet of space and 255 locations across 28 states and the U.S. Virgin Islands. The firm has acquired over $10 billion in real estate assets.

 

 

The economy is doing great! (For 34 people)

Source: Your Brain on Money

Sign up for our reads-only mailing list here.

 

 

The post 10 Thursday AM Reads appeared first on The Big Picture.

Dutch Government Refuses To Probe UK Travel Ban On Eva Vlaardingerbroek

Zero Hedge -

Dutch Government Refuses To Probe UK Travel Ban On Eva Vlaardingerbroek

Authored by Thomas Brooke via Remix News,

The Dutch government has refused to investigate or seek clarification from the United Kingdom after Dutch commentator Eva Vlaardingerbroek had her permission to travel to Britain revoked, confirming it has not even asked London for an explanation over the decision.

The position was set out in formal parliamentary responses from Foreign Affairs Minister Caspar Veldkamp’s ministry, delivered on Jan. 30 by Minister Van Weel, after questions were submitted by Lidewij de Vos, a Member of Parliament for the right-wing Forum for Democracy (FvD).

De Vos questioned the government over last month’s revocation of Vlaardingerbroek’s UK Electronic Travel Authorization (ETA), which now prevents her from entering Britain without a visa. British authorities informed the commentator that her authorization had been canceled because her presence in the UK was deemed “not conducive to the public good,” and that the decision could not be appealed.

Asked whether the Dutch government had sought clarification from the British government or ambassador, the minister responded simply, “No.”

When pressed on whether the government would now demand an explanation, the minister replied that the Netherlands would not intervene in such cases, stating, “The Dutch government is not a party in this matter and does not engage with the United Kingdom regarding individual cases.”

“It is not for the Dutch government to judge or interfere in how legal remedies are structured under United Kingdom national legislation,” the minister added.

The responses mark the first official Dutch government reaction to the controversy, which has drawn attention internationally.

Vlaardingerbroek said she received notice of the ban shortly after posting criticism of British Prime Minister Keir Starmer on social media. Reacting at the time on X, she wrote, “I’ve been banned from traveling to the UK. No reason given. No right to appeal. Zero due process. Just an email saying the UK government deems me ‘not conducive to the public good’ — exactly three days after I criticized Keir Starmer.

“I guess my point that the UK is no longer a free country has been indisputably proven,” she added.

The right-wing commentator later accused her own government of failing to defend one of its citizens, posting, “While Orbán, Salvini, and even the U.S. State Department spoke out about my UK travel ban, the Dutch government just came forward saying it sees no problem with the UK banning one of its citizens and is not going to take action. Always a pleasure to be able to count on one’s own government.”

The British government has not publicly commented on the individual case. However, officials have said ETA cancellations do not automatically amount to a permanent ban and that border decisions remain sovereign matters.

In its parliamentary reply, the Dutch government also stated that it could not establish from media reporting that Vlaardingerbroek’s opinions were the reason for the cancellation, adding that revoking an ETA is not legally the same as denying entry. It does, however, mean that the subject cannot enter the country without a visa and thus must formally apply for entry. Travel between the United Kingdom and the Netherlands is usually visa-free for nationals of the two countries.

During a recent conversation with former British prime minister Liz Truss, Vlaardingerbroek criticized what she described as double standards in British justice and immigration policy, saying, “It just confirms everything that everyone has been saying, two-tier Keir, two-tier justice.”

She added, “The fact that all the immigrants are allowed in without any questions asked, without papers, and they are given the free hotels, they are given everything for free.”

Truss also commented publicly on the case, writing on X, “People who tell the truth about what’s happening in Britain are banned from the country. People who come to the country to commit crime are allowed to stay.”

Hungarian Prime Minister Viktor Orbán similarly expressed support, saying Vlaardingerbroek was “always welcome in Hungary.”

In its parliamentary responses, the Dutch government also declined to amend travel advice for the United Kingdom, stating it had received no signals of changing safety risks for Dutch travelers.

Read more here...

Tyler Durden Thu, 02/05/2026 - 06:30

UBS: SpaceX-xAI Merger Signals Rise Of "Orbital AI"

Zero Hedge -

UBS: SpaceX-xAI Merger Signals Rise Of "Orbital AI"

In September 2024, we penned a note that Elon Musk was on track to become the world's first trillionaire by 2027, driven by what we described as "space race bets." That call looks increasingly correct following the merger of Musk's SpaceX and xAI earlier this week, a transaction that has lifted his net worth to $850 billion.

By contrast, former WeWork CEO Adam Neumann, who once famously said in 2019 that he wanted to live forever and be the first trillionaire, must be watching Musk's empire soar to new heights in disgust. Musk's decision to fold xAI into SpaceX is already being framed by UBS as an "orbital AI" investment angle, positioning Musk at the center of low-Earth orbit dominance and next-generation AI compute (read more here). 

UBS trader Jephine Wong provided clients on Wednesday with what has caught her eye with the xAI-SpaceX deal:

X" marks the spot as Elon Musk moved swiftly to fold xAI into SpaceX — an all‑stock deal valuing the combined entity at ~$1.25T (~$1T for SpaceX; ~$250B for xAI). The signal is clear: SpaceX is planting a flag in orbital AI, betting that a meaningful share of compute — essentially data centers in space — will be operating within 2–3 years. It's a bold storyline to take into a potential summer/fall ~$50B IPO, but it also introduces new complexity for investors: SpaceX is generating ~$8B in EBITDA, while xAI is burning approximately $1B per month. The roadshow narrative shifts from a pure‑play space champion to a space‑plus‑AI hybrid — asking investors to balance operating strength against AI‑scale capex. EchoStar, a holder of SpaceX‑linked assets, slipped on the news — a sign that not everyone is converted just yet.

Chart of The Week

Spaced Out: SpaceX's merger with xAI broke this week — just as SpaceX has become the undisputed heavyweight of the orbital payload market. The company is now so dominant it effectively is the global launch cadence (see UBS's John Hodulik chart below, report here). But pulling xAI into the fold adds a new twist. What had been a clean space‑infrastructure story now becomes a space × AI narrative, pairing orbital payload dominance with an AI business burning nearly $1B a month. The question for investors is whether this move expands the opportunity or complicates the story right before a  historic IPO comes into view. What do you think? Who are you backing for orbital AI? And does xAI have an edge the rest of the market hasn't spotted yet? We'd love to hear your thoughts!

What caught our eye this week?

SpaceX merges with xAI: the "Orbital AI" pitch

Musk entities merging: Musk folded xAI into SpaceX (website memo here) at a combined ~$1.25T valuation (SpaceX at ~$1T; xAI at ~$250B) via an all‑stock deal, arguing that "within 2–3 years" the lowest‑cost AI compute will be in space, supported by a jaw dropping FCC filing seeking approval for up to 1 million compute‑oriented satellites. The company still plans to go public this year, and had already begun lining up anchors for what could be a $50B raise. Investors got the message…. and some new nerves: EchoStar, a holder of SpaceX‑linked assets, slipped on the merger chatter, reflecting the sudden shift from a pure‑play space IPO to a space‑plus‑AI conglomerate. UBS John Hodulik (see here) covers Ecostar for us and has done a handy analysis of Echostar's ~3% stake in SpaceX and a one-pager on the company in late December.

Follow the numbers – to explain timing: xAI burned $8–$9.5B in 9M 2025 on only ~$210M of revenue… even after $20B+ raised (incl. $2B from Tesla). SpaceX, by contrast, is printing cash: roughly $8B 2025 EBITDA on $15–$16B revenue, powered by Starlink's ~9M subs and a launch cadence supporting a $1T+ IPO case. The merger brings together SpaceX's operating muscle with xAI's capex appetite, and gives the roadshow a unified "orbital AI" arc. Mgmt says the deal won't derail a 2026 listing timeline, and internal docs indicate a stock for stock structure (SpaceX shares at $526.59).

Professional subscribers can read much more from UBS about the 2026 IPO market here at our new Marketdesk.ai portal​​​​​​.

Tyler Durden Thu, 02/05/2026 - 05:45

EU Inc: Can Brussels' Latest Corporate Reform Escape Bureaucracy's Grip

Zero Hedge -

EU Inc: Can Brussels' Latest Corporate Reform Escape Bureaucracy's Grip

Submitted by Thomas Kolbe

The European Commission is responding to mounting criticism of over-bureaucratization with the introduction of a new corporate legal form. “EU Inc” is intended to create a uniform legal structure that applies across the entire European Union economic area. A charming idea—but one that quickly sinks in the general bureaucratic madness.

The European Union has reached a point where it is considered lucky if a handful of days pass without new regulatory initiatives from the Brussels central apparatus.

To ease some pressure and deflect growing criticism of the EU’s bureaucratic jungle, Commission President Ursula von der Leyen presented the idea of a Europe-wide corporate legal form during the World Economic Forum in Davos.

The proposed new pan-European company type is called EU Inc. It would become the 28th European legal form, alongside national corporate types such as GmbH, SA, or Limited.

What von der Leyen pitched as an innovative project aims to simplify company formation for startups and scale-ups. The goal is to operate cross-border in all 27 member states of the Single Market without needing to create additional subsidiaries to comply with each nation’s legal requirements.

EU Inc is intended to enable a uniform, fully digitalized formation and administration process. Companies could be registered online within 48 hours—without a notary and without cumbersome paperwork.

The Commission also plans to introduce a central EU register, functioning as a one-stop shop and providing transparency on company formations, capital increases, and ownership structures. The project is currently in the early parliamentary consultation phase and could take effect in national law no earlier than 2027.

The Commission’s idea is attractive. Besides facilitating fast and simple company formation, it would be the first substantial initiative in years moving beyond mostly repressive regulation—truly aimed at deepening the European Single Market.

Faster market entry, simplified mergers, and potentially easier venture capital financing could follow—if national tax deregulation also occurs. That, however, seems unlikely given European regulatory practices.

The politically oft-cited capital markets union would thus receive its first, modest boost—a real-world link to the situation of entrepreneurs. Evidently, fragments of criticism from the business world occasionally reach Commission circles—who would have thought?

Where Are the Entrepreneurs?

As always with Brussels initiatives, the devil is in the details. First, national adoption of this new legal form must be achieved.

It is expected that powerful lobbying groups—from tax advisors to auditors—will work intensively to protect their interests, which are largely derived from the complexity of tax law, capital requirements, and formation procedures.

Over any supposed liberalization of economic activity looms the long shadow of European regulatory policy.

This is the real crux of European politics. Considering the economic structure of the European economy, one inevitably asks: where are the entrepreneurs who would even be willing or able to utilize this new EU Inc framework?

A single number illustrates the grotesque regulatory work of Brussels: last year alone, the European economy was flooded with over 1,400 new EU legal acts. That’s four new regulations per day. Directives, regulations, delegated acts, implementing acts—companies are drowning in an ideologically driven Brussels regulatory swamp.

CO₂ policies and supply chain directives are often in focus, scrutinizing every economic activity in detail and generating immense bureaucratic costs. Entrepreneurs increasingly work to fund administration—less to serve their markets.

What we see in Brussels is classic bureaucracy: once established, politically nurtured, and treated as a political vanguard, it develops a life of its own. Cynically, the production of legal acts is the only “good” keeping it alive.

The truth of this bureaucratic phenomenon often reveals itself openly—when politicians proudly list the laws they initiated, without any understanding of real economic life. It is the work record of a gravedigger, carving a path through the increasingly paralyzed productive sector of society.

Political and media support for EU climate regulation has created a self-referential bureaucracy now spreading into member states. With state quotas beyond 50%, the Rubicon of economic imbalance is crossed. Europe risks becoming a purely administrative hub while productive economy steadily shrinks.

The parasitic body consumes its host, accelerating its decay. Europe is degenerating into an administrative site with declining production activity.

Centrifugal Forces Gain Momentum

EU Inc could indeed be a charming solution for deepening the Single Market—if one day an orderly regulatory turnaround is initiated.

It is quite likely that the accelerating downward spiral of high public debt, falling productivity, rising unemployment, and a dramatic geopolitical decline of the continent will eventually pave the way for a conservative, market-oriented shift.

For Brussels central planners, particularly in Eastern Europe, a political storm is brewing that, once unified, could one day shatter the regulatory chains.

From a German perspective, however, it seems likely that the driving forces of climate-socialist transformation—undoubtedly concentrated in Berlin—will marshal their forces to continue the fatal path toward a command economy after breaking with the opposition.

* * * 

About the author: Thomas Kolbe, a Germany a graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Thu, 02/05/2026 - 05:00

How Will Key Countries Respond To Washington's Attempted Restoration Of Unipolarity?

Zero Hedge -

How Will Key Countries Respond To Washington's Attempted Restoration Of Unipolarity?

Authored by Andrew Korybko,

The US’ new National Security and Defense Strategies, which collectively articulate the “Trump Doctrine”, make clear that the US’ grand strategic goal is to restore its predominant position (unipolarity) over the world.

Unlike during the short-lived unipolar era that followed the end of the Old Cold War, this time the US is explicitly reluctant to embroil itself in overseas conflicts that risk overextending itself, and it’ll also now rely more on its regional partners to share the burden of advancing their shared interests.

China, Russia, Iran, and North Korea are identified as the US’ adversaries, the first of them being described as “the most powerful state relative to us since the 19th century” in the National Defense Strategy, and each must now decide whether to challenge the US, balance it, or bandwagon with it.

To a lesser extent, the same also applies to rising powers like India that have complicated ties with the US.

In reverse order...

India won’t ever challenge the US, but it’s likely to balance and bandwagon instead. The balancing aspect relies principally on Russia for preemptively averting potentially disproportionate economic and military-technical dependence on the US that could be weaponized for coercive purposes.

As for the bandwagoning aspect, this concerns India’s sincere interest in complying with its new trade deal with the US and reaching more defense ones with it too, though conditional on the first not being exploited by the US to flood its market and the second not requiring basing US troops on its soil.

By contrast, North Korea is unlikely to ever bandwagon with the US.

It would instead prefer to balance it by triangulating between China and Russia (to avoid disproportionate dependence on either) while at times challenging it through military tests in response to the US’ regional moves.

Iran’s approach will probably continue to apply all three policies:

  1. challenging the US in West Asia;

  2. balancing it by triangulating between China and Russia;

  3. and negotiating a new nuclear deal for bandwagoning with it one day.

Russia has been pursuing the same under Trump 2.0: its development of strategic arms challenges the US’ restoration of unipolarity; triangulating between China and India (to avoid disproportionate dependence on either) balances the US; and ongoing talks seek to reach an accommodation with it. China is no different: its own military build-up also challenges the restoration of unipolarity; its BRI partners help it to balance the US; and ongoing trade talks seek to reach an accommodation with it too.

From the US’ grand strategic perspective due to how it views China as “the most powerful state relative to us since the 19th century”, it’s expected to offer comparatively better partnership terms to India and Russia for incentivizing them to relatively distance themselves from China.

Iran will be subordinated one way or another in order for the US to control its resource flows to China, North Korea will remain contained, and China will be coerced into a lopsided trade deal for derailing its superpower trajectory.

As the saying goes, “the best laid plans of mice and men often go awry”, so the aforesaid approach might not be implemented in full.

In fact, it could also backfire if China feels like it’s being pressured into an Imperial Japanese-like 1941 zero-sum dilemma of subordinating itself to the US or initiating a war out of desperation to avert that worst-case scenario, which is precisely what the US wants to avoid.

The US’ restoration of unipolarity therefore risks sparking the next World War if cooler heads don’t prevail.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Tyler Durden Wed, 02/04/2026 - 23:25

Will The New Fed Chair Fix The Money?

Zero Hedge -

Will The New Fed Chair Fix The Money?

Authored by Jeffrey Tucker via The Epoch Times,

The choice of Kevin Warsh as the new chairman of the Federal Reserve has received mixed reviews, as can be expected. His professional connections lean establishment in every way, which is perhaps not what Trump’s base expected.

More interesting is that Warsh is on record as an inflation hawk, a critic of zero-interest rate policies, and a critic of the war on cryptocurrency. All of this strikes me as a good sign, even if he has since hinted in the direction of favoring lower rates.

In 2023, he wrote the following:

“History will give a full accounting of the grave errors committed in recent years in economic policy. A central lesson is already clear: Nothing is as expensive as free money. The costs of the Federal Reserve’s zero-interest policy are multiplying: The misallocation of capital—goosing the price of the riskiest and least-productive of assets—set the conditions for boom and bust. The financing of the ‘big state’ set the country on an unsustainable fiscal trajectory. The extraordinarily loose financial conditions created herd behavior among market participants and firms and complacency among policy makers, including regulators. The surge in inflation substantially raised the cost of living for citizens and undermined business planning.”

Every word of that is true. Having someone at the Fed who believes that way should come as a great relief.

The surprising part is that Trump himself has spent years denouncing the Fed for having raised interest rates faster than ever before in Fed history. He has also called for a dramatic lowering of rates to make the United States more competitive, thoughts that have people like me worried that such a policy would kick off a second wave of inflation.

Former Federal Reserve board member Kevin Warsh speaks during a monetary policy conference at Stanford University’s Hoover Institution in Palo Alto, Calif., on May 9, 2025. Ann Saphir/Reuters

Warsh seems to have his doubts about such a policy:

“The Fed seeks to fix interest rates and control foreign-exchange rates simultaneously—an impossible task with the free flow of capital. Its ‘forward guidance,’ promising low interest rates well into the future, offers ambiguity in the name of clarity. It licenses a cacophony of communications in the name of transparency. And it expresses grave concern about income inequality while refusing to acknowledge that its policies unfairly increased asset inequality.”

In the backdrop of all of this is what has been a disastrous policy at the Fed from 2020 onward, creating some $6 trillion in new money in service of a congressional plan to shower the country with money directly into people’s bank accounts. That this would lead to a devastating inflation is hardly a surprise. No student of money and finance could possibly doubt that this would be the result.

Why did this not happen with a similar quantitative easing back in 2008? Because in those days, the policy of then-Chairman Ben Bernanke was to pay more than the market rate for bank deposits, thus keeping hot money off the streets and safely in the bank vaults.

Warsh identifies the underlying problems with such a policy:

“The misallocation of capital—goosing the price of the riskiest and least-productive of assets—set the conditions for boom and bust.”

What he has identified here is a pattern known since the 1930s. John Maynard Keynes imagined that the central bank could drive rates to zero and generate prosperity as if by magic. The American and Austrian critics of that policy drew attention to deeper complexities. Interest rates serve a crucial role as a signaling system for investment. Artificially low rates essentially send false signals that set up conditions for a subsequent bust.

In other words, the policy of discretion designed to blow countervailing winds toward business cycle trends actually ends up creating and worsening the thing it was designed to fix. When that happens, the only possible way out is to let the recession happen, rebalance the capital structure, and clear the table to enable a new round of prosperity and growth.

To be sure, it’s been 40 years since the Fed has permitted a recession to happen without wild interventions designed to prevent them.

The layers upon layers of interventions keep piling up higher and higher, all built on a false foundation of debt. This is not only a national problem; the entire world economy is now addicted to debt finance, with no end in sight.

Let’s please take a step back and understand how this whole system is supposed to work in a genuine free market with sound money and no central bank.

In a state of nature, you consume what you produce: You catch a fish and eat it. If you want to grow more prosperous, you have to spend your time making a capital good such as a net that enables you to catch more fish. That little story illustrates the central point: All prosperity grows out of deferred consumption.

What about loan markets? When capital grows and the funds become available for lending, the price at which they are lent is called the interest rate. It is a measure of risk that the loan won’t be paid back and also a sign of time horizons. Longer time horizons would typically involve paying a higher rate rather than a lower rate of interest. This is what creates the yield curve, which is typically upward-sloping.

What about a base interest rate? It should be exactly what the market of supply and demand determine it should be, no higher and no lower. For example, if there is a vast amount of saved capital in the banking system—because people are really socking away funds for the future—there is a great quantity available for borrowers. This higher savings will lead to a lower rate of interest.

That’s the supply side of the equation. On the demand side, lower interest rates will intensify the desire for loaned funds from businesses and consumers. In effect, loan markets make it possible for savers to profit from lending to borrowers and be rewarded for doing so. All told, this is a beautiful system from which everyone benefits—provided it is not abused or manipulated for political purposes.

When interest rates are suppressed by the central bank or when government issues debt instruments below market rates, they are effectively gaming the system. It sends a signal that there are more savings, more capital, more loanable funds available in the loan markets than really exist. This affects capital investment in particular, as the most enterprising sector takes on liabilities with the intention of servicing them from future revenue streams.

When the plans flip in the other direction is when consumers lack the savings to justify the level of investment. That’s essentially what recession is: a reset toward reality. But if the central bank tries to ride through the recession with more and more cheap money, it risks more inflation unless there is a market for the funds. This is when the debt contagion spreads to more enterprises, more consumers, and more financial companies looking for a sure return. So long as the increase in financial outpaces the burden of debt obligations, this crazy system can create the appearance of something that works.

In case you haven’t guessed, that’s where we are right now, not just in the first stages but in very advanced stages. This is the world that the new Fed chair inherits. It makes his job even harder that the Fed’s own balance sheet is still out of whack from the 2008 rescue that saddled the Fed with mispriced debt assets that it still has not off-loaded.

People ask whether I’m optimistic or pessimistic about the new Fed chair. I’m neither. My prediction is that he will do a competent job at what he is supposed to do, which is keep the whole system of banking and finance afloat and out of crisis. All of Warsh’s editorializing at this point becomes mere theory as compared with the burdens of actually performing this job.

The Fed is not really a stabilizer of macroeconomic policy. It is a banking cartel designed to protect the financial system and government against the consequences of mismanagement.

In general, my sense is that Trump could have done better or he could have done worse. The real problem is that the job exists at all. Ideally, we would move back toward an honest system of enterprise, with a correctly priced loan market, sound money, competitive banks, and honest economic structures that are not so debt addicted. On that score, there is no reason for very high expectations.

Tyler Durden Wed, 02/04/2026 - 20:55

Security Expert: Illegal Minneapolis Checkpoints Trace Back To Marxist, Anarchist Movements

Zero Hedge -

Security Expert: Illegal Minneapolis Checkpoints Trace Back To Marxist, Anarchist Movements

The eruption of "Signal-Gate" revealed the organizational structure and command-and-control nodes of left-wing activists operating within encrypted messaging apps to unleash pressure campaigns against federal agents in Minneapolis. This structure is very revealing and, according to some security experts, is deeply rooted in revolutionary tradition.

Anti-Immigration and Customs Enforcement checkpoints have sprung up across the sanctuary city of Minneapolis in recent weeks. These makeshift checkpoints on city streets are operated by left-wing activists who track traffic in and out of specific areas, searching for ICE vehicles, and there are reports from Fox News that some agitators even have the ability to check license plates.

J. Michael Waller, senior analyst for Strategy at the Center for Security Policy, provided important color on the emergence of "illegal checkpoints" in Minneapolis.

Waller explained:

Illegal checkpoints on public streets have a long history in Marxist and anarchist tradition.

They symbolize organized self-defense against "oppressors," an empowerment of "the people" to seize urban space to confront the class enemy.

When organized as barricades to block passage, they become instruments of insurrection, dating back to the 1848 revolutions of Europe and the 1871 Paris Commune.

Marxists treat barricades as symbols of transition from civil protest to armed struggle.

Barricades mark the point when Marxists stop appealing to constitutional authority, and build structures for alternative power.

For anarchists, the barricade represents "direct action" and "horizontal self-organization" - the building of defenses without formal hierarchies or central leaders.

Anarchists view barricades as a reclaimed public space. Checkpoints and barricades turn the streets from channels of commerce and state control into zones of collective autonomy and mutual aid during insurrections or insurgencies.

We have profiled the rise of left-wing chaos, warning last year that billionaire-funded NGOs were funneling money into the protest industrial complex seeking revolution. In other words, a color revolution ...

Last week, Joe Rogan and guest Andrew Wilson, a conservative podcaster, framed the chaos emanating from Minneapolis as a "color revolution."

There is good news on multiple fronts. Tom Homan announced early Wednesday that an unprecedented number of counties in Minnesota are now cooperating with the federal government on the deportation of illegal aliens. That coordination has allowed Homan to authorize an immediate reduction in the federal agents across the metro area, a move viewed by us as a deliberate effort by the administration to de-escalate tensions and defuse the chaotic situation.

The second piece of good news came last month when Treasury Secretary Scott Bessent sat down with journalist Christopher Rufo and discussed plans to investigate dark-money-funded NGOs sowing chaos nationwide.

What the Trump administration has shown, and effectively forced into the open by surging federal agents into Minneapolis, is that the Democratic Party's left-wing militant arm, such as Antifa, operates within an organizational structure pushing a revolutionary agenda.

Returning to Waller's comments above about barricades and Marxist movements, the revolutionary picture should now be clearer than ever for the American public and for the White House about what's really going on.

It may also be time for the White House to take seriously the remarks made by retired Lt. Gen. Michael Flynn in late November:

From our view, elements within the Democratic Party are encouraging a rolling cycle of mass mobilization through the nonprofit world aimed at revolution against Trump and all-things 'America First'. The focus of agitation appears to rotate by topic, moving from the George Floyd riots earlier this decade to more recent pro-Palestinian protests, and now to anti-ICE actions, while relying on the same activist network of nonprofits, propaganda channels, and street-level tactics. The deeper understanding here is that there's a left-wing revolution brewing.

Tyler Durden Wed, 02/04/2026 - 20:30

Run It Hot: Trump, The Fed, & The Coming Currency Debasement

Zero Hedge -

Run It Hot: Trump, The Fed, & The Coming Currency Debasement

Authored by Nick Giambruno via InternationalMan.com,

The Trump administration has made no secret of its desire to push the monetary easing pedal to the metal, even as the engine is already near the red line. They intend to push the system as hard as possible today and worry about the consequences later. One reason may be to inflate the stock market ahead of the 2026 midterm elections.

There are several indicators that the Trump administration intends to run it hot in 2026.

The first — and most important — is that Trump will likely succeed in consolidating control over the Federal Reserve.

Jerome Powell’s term as Chair of the Federal Reserve is scheduled to expire in May 2026, allowing Trump to appoint his replacement. Powell attempted — largely unsuccessfully — to resist Trump’s pressure for easier monetary conditions.

I expect Trump will get his way with the Fed in 2026, and that the central bank will bend to his demands. By replacing Powell, Trump will further stack the Fed with loyalists. The result will be money printing on a scale we’ve never seen before.

Further, Stephen Miran — another of Trump’s recent successful nominees to the Federal Reserve Board — has been pushing the idea of what he calls the Fed’s “third mandate.”

Traditionally, the Fed has two mandates: price stability and maximum employment. Miran’s proposed third mandate would be for the Fed to “moderate long-term interest rates.”

What that really means is that the Fed would openly finance the federal government by creating new dollars to buy long-term debt, keeping yields artificially low. In other words, the so-called third mandate is an explicit admission that the Fed is no longer independent. It would become a political tool used to fund government spending.

Without this support, massive federal spending would flood the market with Treasuries, pushing interest rates much higher. But with the Fed stepping in, Washington can keep borrowing while holding rates down — at least for a while. The catch is that this comes at the cost of debasing the dollar. Eventually, that debasement will force investors to demand higher yields anyway, only worsening the problem.

Remember, after Nixon severed the dollar’s last link to gold in 1971, the unspoken promise was that Washington would act as a responsible steward of its fiat currency. Central to that promise was the illusion that the Federal Reserve would remain independent of political pressure.

The idea was simple: without at least the appearance of independence, investors would see the Fed for what it is — a funding arm for spendthrift politicians — and confidence in the dollar would collapse.

That illusion is now shattering.

Let’s be clear: central banks were never truly independent. That’s why it was always an illusion — a societal myth. They exist to siphon wealth from the public through inflation and funnel it to the politically connected. The Fed’s independence was always a mirage — and now it’s disappearing fast.

Further, late last year, the Fed embarked on a new interest rate cutting cycle, even though, according to their own rigged CPI metrics, prices are rising at 2.7%, well above their 2% target.

The Fed has already cut rates by around 50 basis points in 2025 and signaled that more rate cuts are coming in 2026.

The Fed recently announced that it has ended the shrinking of its balance sheet and will now begin expanding it again, starting with the purchase of $40 billion in Treasuries in December.

The Fed insists this isn’t quantitative easing, calling it “reserve management” and pointing out that it isn’t explicitly targeting long-term Treasuries. That’s just wordplay. Buying Treasuries with newly created money is money printing, regardless of what label they attach to it. The Fed’s balance sheet is expanding again. A new printing cycle has begun.

We’ve seen this pattern repeatedly. The Fed expands its balance sheet, then tries to shrink it. Something eventually breaks in the financial system, and the Fed pivots right back to easing and money creation. Each time this happens, the balance sheet never returns to its prior level. It ratchets permanently higher with every cycle of debasement.

What makes the current situation especially telling is that the Fed is entering another balance-sheet expansion phase even though the balance sheet is still more than 50% larger than it was before the Covid mass psychosis. Before 2020, the Fed’s balance sheet was roughly $4 trillion. It exploded to nearly $9 trillion during the Covid response. Even after so-called “quantitative tightening,” it remains around $6.5 trillion — nowhere near its pre-Covid level.

This completely contradicts the Fed’s long-standing claim that programs like QE are temporary.

Remember when former Fed Chair Ben Bernanke promised the balance sheet would eventually normalize after the 2008 financial crisis? That promise was made nearly 15 years ago, when the Fed’s balance sheet was around $2.5 trillion and was supposed to shrink back toward pre-crisis levels below $1 trillion. Instead, today the balance sheet is more than double what it was when Bernanke made that pledge — and now the Fed is entering yet another expansion cycle that threatens to push it even higher.

The long-term trend is obvious. The balance sheet only goes one direction: up. And the implication is unavoidable. Every time the Fed expands its balance sheet, it debases the currency. This isn’t an accident or a temporary policy error — it’s the core feature of the system.

If you’re wondering what comes next, look at the red circle on the chart below—and note what followed the last time the Fed shifted from shrinking its balance sheet to expanding it.

We are now in the top of the first inning of what may become the most aggressive balance sheet expansion cycle in the Fed’s history.

So let’s put it all together.

The midterms are coming in 2026, and Trump wants to boost the stock market.

Trump will get to replace Fed Chair Powell with a loyalist, consolidating control over the central bank.

The Fed has embarked on a new rate-cutting cycle, despite inflation still running well above its stated targets.

The Fed has ended the shrinking of its balance sheet and has begun expanding it again, buying tens of billions of dollars’ worth of Treasuries each month.

All signs point to a continued nominal melt-up in the stock market in 2026 — and ever-accelerating currency debasement.

The trajectory is clear. When monetary policy becomes a political tool and money printing turns permanent, the risks aren’t abstract — they’re personal. Currency debasement doesn’t just distort markets; it quietly erodes savings, purchasing power, and individual freedom.

The real question isn’t whether this process continues — it’s how prepared you are when it accelerates.

That’s why I’ve put together a free PDF report: The Most Dangerous Economic Crisis in 100 Years… the Top 3 Strategies You Need Right Now. Inside, you’ll learn: How the economic, political, and cultural forces now in motion are converging into a single systemic crisis, what the coming risks really mean for your money, your security, and your personal freedom, and the three concrete strategies you can use right now to position yourself ahead of what’s coming. This isn’t about fear. It’s about clarity — and taking action before the consequences become unavoidable. Click here to download the free PDF report and get prepared while you still can.

Tyler Durden Wed, 02/04/2026 - 20:05

Putin Notifies Xi Of New START Status As Trump Ready To Let Go Of Nuclear Arms Control With Russia

Zero Hedge -

Putin Notifies Xi Of New START Status As Trump Ready To Let Go Of Nuclear Arms Control With Russia

President Putin in his Wednesday video call with Chinese President Xi Jinping underscored that the last major nuclear treaty with the United States is on the eve of collapse.

New START is set to expire on Thursday. Putin notified Xi that Washington has not yet responded. "As you know, on September 22, 2025, we proposed to the Americans to extend the key quantitative limits for one year as voluntary self-restrictions. However, we have not yet received an official response from the Americans," Putin said, as quoted in state media.

Despite the situation with the New START Treaty, Russia remains open "to seeking negotiated ways to ensure strategic stability" - the Russian leader explained.

via Chinese state media/BBC

Putin further stated his country will act "in a measured and responsible manner, based on a thorough analysis of the overall security situation."

Over several years going back to his first term, Trump has signaled a desire to forge a broader deal which would bring China into the agreement, which hearkens back to the Obama administration. 

Politico is meanwhile reporting that the Trump administration is preparing to "let go of arms control with Russia":

The likely dissolution of the agreement comes at an especially fraught time. Russia and China are expanding their strategic arsenals and the Kremlin has threatened to use nuclear weapons on Ukraine. The Defense Department has held a series of internal meetings in preparation for a post-New START world, according to the two people and another person familiar — all of whom were granted anonymity to discuss internal talks — although it’s not clear what was discussed in the meetings.

“We’re looking at a very uncertain path ahead,” said Daryl Kimball, the executive director of the Arms Control Association. “Unless Trump and Putin reach some sort of understanding soon, it’s not unlikely that Russia and the U.S. will start to upload more warheads on their missiles.”

The Kremlin has made clear Russia is willing to extend it for another year, to allow more robust negotiations and for a longer deal to be finalized. But again, unless it is renewed or extended at the last minute, the landmark treaty will expire on Thursday, February 5.

Former Russian president Dmitry Medvedev, now deputy chairman of the country's Security Council, on Monday made clear that Russia's offer to quickly extend "remains on the table, and the treaty has not even expired yet, and if the American side wants to extend it, then this can be done."

He also confirmed that Moscow has received no response on this offer from Washington:

Medvedev told the newspaper Kommersant that Moscow might have to wait until the expiry of the treaty on February 5 for a U.S. response to the Russian initiative.

When contacted for comment, a White House official told Newsweek Monday: "The president will decide the path forward on nuclear arms control, which he will clarify on his own timeline."  

Indeed, the Trump White House has yet to issue anything official. Of course, President Trump is also known for making key decisions at the last moment, building suspense and leverage, based on also on his notorious unpredictable decision-making style.

According to Monica Duffy Toft, professor of international politics and director of the Center for Strategic Studies at The Fletcher School, "By providing transparency into the world’s two largest nuclear arsenals, New START has lowered the risk that either side will misinterpret normal military activity as preparation for a nuclear strike."

It was signed in 2010 by Presidents Barack Obama and Dmitry Medvedev, and limits the number of deployed strategic warheads to 1,550 per side, and caps deployed delivery systems - including of missiles, bombers, and submarines - at 700. There's also a mutual inspection regimen, allowing each side to monitor the other's sites.

Tyler Durden Wed, 02/04/2026 - 19:40

DHS Reports More Than 180 Vehicle Attacks On Law Enforcement

Zero Hedge -

DHS Reports More Than 180 Vehicle Attacks On Law Enforcement

Authored by Naveen Athrappully via The Epoch Times,

Immigration officers have faced 182 vehicular attacks since President Donald Trump took office last year, the Department of Homeland Security (DHS) said in a Feb. 3 statement.

Out of the 182 attacks between Jan. 21, 2025, and Jan. 24, 2026, Customs and Border Protection (CBP) officers faced 114, up by 124 percent from the 51 attacks during the same time period the previous year. The remaining 68 attacks were faced by officers from Immigration and Customs Enforcement (ICE). Attacks on ICE are up by 3,300 percent from two assaults previously, according to the DHS.

In an attack in September, an illegal immigrant from Guatemala hit and injured an ICE officer with his car while trying to evade arrest. The incident happened during a traffic stop when the man put his car in reverse and hit the officer in the leg, nearly crushing the officer. The foreign national was eventually arrested.

In another attack earlier last month, two suspected associates of the Tren de Aragua gang weaponized their vehicle against Border Patrol. One agent took immediate action to defend himself and others, shooting the illegal immigrants. No law enforcement personnel suffered injuries, while the illegal immigrants were hospitalized.

In its recent statement, DHS listed out several other similar vehicular attacks against immigration officers. The department cited DHS Secretary Kristi Noem’s warning that anyone who “lay a hand on a law enforcement officer” would be “prosecuted to the fullest extent of the law.”

“Sanctuary politicians with their rhetoric comparing ICE to the Nazi Gestapo, slave patrols, and the secret police and encouraging illegal aliens to evade arrest have incited violence against law enforcement,” DHS Assistant Secretary for Public Affairs Tricia McLaughlin said in the Feb. 3 press release.

Democratic lawmakers have criticized the actions of immigration officers under the Trump administration.

In a Jan. 27 statement, Minnesota Gov. Tim Walz characterized the immigration enforcement crackdown in the state as a “campaign of organized brutality” against people.

He criticized immigration agents for shooting to death two individuals in the state, and accused them of attacking “countless” protesters and bystanders.

One of the individuals was protestor Renee Good, whom an ICE officer shot on Jan. 7. Federal authorities say the officer acted in self-defense as Good allegedly attempted to hit the person with her vehicle during an enforcement operation.

The second individual, Alex Pretti, 37, was shot by a federal officer in Minneapolis on Jan. 24. Pretti allegedly carried a 9 mm semi-automatic handgun and was shot during an attempt to disarm him.

Sen. Alex Padilla (D-Calif.), who voted against a bill to fund DHS, justified his voting decision by alleging “cruelty” committed by ICE and CBP, according to a Jan. 29 statement from the lawmaker’s office.

ICE and CBP “have terrorized American cities, killed U.S. citizens, and detained innocent children. They continue to go after people with no criminal backgrounds, including arresting U.S. citizens exercising their First Amendment rights,” he said.

Meanwhile, in a Jan. 26 statement, DHS said there has been an 8,000 percent increase in death threats and a more than 1,300 percent surge in assaults against law enforcement officers.

DHS published the transcript of a voicemail received by an ICE officer in Minnesota last month, in which the caller asks the officer to “kill yourself,” wishing that his wife and both parents die. The caller characterizes the officer as a “murderer” and a “traitor to the American people.”

McLaughlin said the “unprecedented” violence against law enforcement officers was the result of “repeated vilification and demonization” of the personnel by lawmakers.

The officers “get up every morning to try and make our communities safer. Like everyone else, we just want to go home to our families at night. The violence and dehumanization of these men and women who are simply enforcing the law must stop,” she said.

Multiple incidents of assault on immigration officers have occurred over the past month.

On Jan. 14, DHS said in an X post that an ICE agent was hospitalized after being ambushed and attacked with a shovel by a Venezuelan illegal immigrant.

A couple of weeks later, on Jan. 28, Attorney General Pam Bondi said that 16 protesters in Minneapolis were arrested for allegedly assaulting law enforcement officers.

Tyler Durden Wed, 02/04/2026 - 19:15

Ken Griffin Torches Trump Over 'Distasteful Favoritism' And Conflicts Of Interest, Opens Door To Political Run

Zero Hedge -

Ken Griffin Torches Trump Over 'Distasteful Favoritism' And Conflicts Of Interest, Opens Door To Political Run

Citadel CEO Ken Griffin raised eyebrows this week when he left the door open to future public service or even running for office, while issuing some of his sharpest criticism yet of President Donald Trump.



I’d like to believe that at a future point in my life, I will be involved in public service,” Griffin said during an interview at the WSJ Invest Live event Tuesday. “I’ve been able to have my voice heard on important issues, and I’d like to think that I’ve nudged the country and in small ways in good directions.”

Griffin, a prominent Republican donor who contributed more than $100 million to conservative candidates and causes in the 2024 election cycle but did not back Trump’s re-election bid directly also took aim at the administration's approach to business, saying the business leaders are tiring of what he sees as appeasing the president.

When the U.S. government starts to engage in corporate America in a way that tastes of favoritism, I know for most CEOs that I’m friends with, they find it incredibly distasteful,” the billionaire hedge fund manager said. “Most CEOs just don’t want to find themselves in the business of having to, in some sense, suck up to one administration after another to succeed in running their business.”

Griffin also ripped Trump and members of his inner circle for business dealings riddled with conflicts of interest, including the Trump family’s crypto company World Liberty Financial. The Wall Street Journal recently reported that Sheikh Tahnoon bin Zayed Al Nahyan, UAE national security adviser, brother of the president, and often called the "Spy Sheikh," secretly acquired a 49% stake in World Liberty Financial for $500 million. The deal was signed by Eric Trump just days before his family’s second inauguration in January 2025. The president has denied any knowledge of the agreement.

This administration has definitely made missteps in choosing decisions or courses that have been very, very enriching to the families of those in the administration,” Griffin said. “That calls into question, is the public interest being served?”

Griffin, who moved his hedge fund from Chicago to Palm Beach citing rising crime and high taxes in Democrat-run Illinois, teamed up with Stephen Ross this week to contribute $10 million to the "Ambition Accelerated" campaign through the Florida Council of 100, aiming to lure CEOs, founders, and investors to state’s Gold Coast.

“Where you choose to build a business determines how much time is spent driving growth versus navigating bureaucracy,” Griffin said in a statement. “Miami and the broader South Florida Gold Coast offer deep talent, regulatory clarity, and an extraordinary quality of life."

Tyler Durden Wed, 02/04/2026 - 18:50

"You'd Be Justified In Shooting": Rep. Jerry Nadler Triggers Outcry Over Violent Rhetoric Against ICE

Zero Hedge -

"You'd Be Justified In Shooting": Rep. Jerry Nadler Triggers Outcry Over Violent Rhetoric Against ICE

Authored by Jonathan Turley,

Rep. Jerry Nadler (D., NY) is under fire this week for joining other Democratic members in reckless rhetoric to fuel the growing threats against federal law enforcement officers. Calling out the “fascism in our streets,” Nadler suggested that citizens could be justified in shooting masked agents, a chilling claim made earlier by other Democratic leaders.

The New York Post reported the comments made in a Judiciary Committee hearing. Nadler declared:

“What is really the major problem in this country today is the fascism in our streets. The attacks on American citizens, by masked hoodlums. If you were attacked by a masked person, you might think you were being kidnapped. You’d be justified in shooting the person — to protect yourself.”

The agents are wearing masks because different groups are actively publishing their identities and personal information online. The result has not only been doxxing but threats made against the families of these agents. Democratic politicians have pledged to assist in the effort to “unmask” and publish the identities of these officers as threats soar.

For many, these statements suggest that they have a license under laws like Stand Your Ground to shoot at agents and claim mistaken self-defense.

The continued use of such rhetoric in the face of soaring attacks and threats against officers is the worst form of demagoguery.

At the same time, members like Rep. Dan Goldman (D. NY) deny that there is evidence of a sharp increase in attacks despite overwhelming evidence to the contrary.

Notably, Nadler and his colleagues pushed for the impeachment of Donald Trump for what they called his inflammatory rhetoric on January 6th despite his call for the protests to remain peaceful.

Other members are engaging in the same hyperbolic rhetoric to appeal to the growing mob on the left.

Sen. Chris Murphy (D. Conn.) seems the most unhinged:

“What is happening in Minnesota right now is a dystopia. ICE is tear gassing elementary schools. It is disappearing legal residents into cars. It is murdering American citizens.”

Aspiring Democrats are getting the message.

Total Wine billionaire David Trone — who is running to recapture his Maryland congressional district from fellow Democrat Rep. April McClain-Delaney, declared this week that the federal government is “literally executing people on the streets” in “not just Minneapolis… all over the United States.”

Ohio Democratic Attorney General candidate Elliot Forhan is running on the catchy pledge that “I will kill Donald Trump.” It is a race to the bottom as Democratic leaders try to take the lead in mob politics.

When combined with the rationalization for the use of lethal force against officers, this rhetoric is not just inflammatory but dangerous. We have heard these voices before in our history.

As discussed in Rage and the Republicwe have a rising class of new Jacobins, politicians and pundits who are pandering to the mob. History does not bode well for these politicians seeking to ride the wave of rage when the mob turns against them.

Tyler Durden Wed, 02/04/2026 - 18:25

3 US Warships Dispatched To Haiti As Part Of Campaign Against Drug Traffickers

Zero Hedge -

3 US Warships Dispatched To Haiti As Part Of Campaign Against Drug Traffickers

Authored by Chris Summers via The Epoch Times,

Three U.S. warships have been sent to Haiti as part of Operation Southern Spear, a military operation in the Caribbean to counter narcotics trafficking.

“At the direction of the Secretary of War [Pete Hegseth], the ships USS Stockdale, USCGC Stone, and USCGC Diligence have arrived in the Bay of Port-au-Prince as part of Operation Southern Spear,” the U.S. Embassy in Haiti posted on X on Feb. 3.

The embassy said the presence of the warships reflects the United States’ “unwavering commitment to Haiti’s security, stability, and brighter future.”

The USS Stockdale is an Arleigh Burke-class guided-missile destroyer based in San Diego, while USCGC Stone and USCGC Diligence are Coast Guard cutters based in North Charleston, South Carolina, and Pensacola, Florida, respectively.

“The U.S. Navy and U.S. Coast Guard reaffirm their partnership and support to ensure a safer and more prosperous Haiti,” the U.S. Embassy posted on X.

Operation Southern Spear is targeting narco-trafficking and has led to strikes on several drug smuggling boats since September 2025. On Jan. 3, Venezuelan leader Nicolás Maduro was captured and indicted on drug trafficking and other charges.

Another boat strike was carried out on Jan. 23, at an undisclosed location, according to U.S. Southern Command.

Unrest in Haiti

Haiti has been mired in political and economic turmoil since July 2021, when President Jovenel Moïse was assassinated at his home in the Haitian capital, Port-au-Prince, by a group of mercenaries, most of whom were Colombian nationals.

Gangs have proliferated and begun to dominate large parts of Haiti, and in May 2025, U.S. Secretary of State Marco Rubio designated two of the largest gangs, Viv Ansanm and Gran Grif, as foreign terrorist organizations.

In November 2025, U.S. President Donald Trump published a new National Security Strategy, which calls for expanded naval and Coast Guard operations and aggressive targeting of drug cartels.

“We want to ensure that the Western Hemisphere remains reasonably stable and well-governed enough to prevent and discourage mass migration to the United States,” the strategy document states. “We want a Hemisphere whose governments cooperate with us against narco-terrorists, cartels, and other transnational criminal organizations.”

Haiti has not had elections since 2016. A nine-member Transitional Presidential Council was appointed in April 2024, but has been marked by allegations of corruption and a declining security situation in Haiti.

On Jan. 23, Haitian Prime Minister Alix Didier Fils-Aimé, who was appointed by the Transitional Presidential Council, spoke to U.S. Secretary of State Marco Rubio, who said the call “reaffirmed U.S. support for Haiti’s stability and security.”

“The current violence caused by gangs can only be stopped with consistent, strong leadership, with the full support of the Haitian people,” the State Department said. Rubio said the Transitional Presidential Council ”must be dissolved by February 7 without corrupt actors seeking to interfere in Haiti’s path to elected governance for their own gains.”

Last month the State Department took steps to revoke the visas of two unidentified members of Haiti’s Transitional Presidential ‍Council (TPC) and their immediate families because of their alleged involvement in gangs.

“These actions are being taken due to the TPC members’ involvement in the operation of gangs and other criminal organizations in Haiti, including through interference with the Government of Haiti’s efforts to counter gangs designated as Foreign Terrorist Organizations (FTO) by the United States,” the State Department said in a Jan. 25 statement.

In September 2025 the United Nations Security Council authorized the conversion of a Multinational Security Support mission—which had been deployed in Haiti in June 2024—into a 5,500-strong Gang Suppression Force.

China, Russia, and Pakistan abstained in the vote.

In December 2025, the United States and Canada said 18 entities had offered personnel, resources, and technical support for the Gang Suppression Force.

“We were looking for 5,500 forces,” Rubio said on Dec. 19, 2025. “We already have pledges of up to 7,500 forces from a variety of countries. We’ve seen donors step up to fund that effort.”

Tyler Durden Wed, 02/04/2026 - 17:40

321 Quakes Hit San Francisco Bay In A Week – Is The San Andreas Fault Entering A Dangerous New Phase?

Zero Hedge -

321 Quakes Hit San Francisco Bay In A Week – Is The San Andreas Fault Entering A Dangerous New Phase?

Authored by Michael Snyder via The Economic Collapse blog,

The west coast is shaking again.  In recent weeks we have witnessed so much seismic activity along the portion of the Pacific Ring of Fire that sits directly along the California coastline.  There had been hope that the shaking would settle down, but instead it appears to be accelerating.  

As you will see below, there have been 321 earthquakes in the San Francisco area within the past 7 days.  If I was living in northern California, that would definitely get my attention.  Scientists have warned us over and over again that “the Big One” is inevitably coming, and almost every day there are more reminders of this.  In fact, San Ramon was just hit by a swarm of more than 30 earthquakes on Monday morning

A 4.2 earthquake struck near San Ramon Monday morning, following a 3.8 quake amid a string of over 30 temblors in the area, U.S. Geological Survey said.

The 4.2 quake struck at 7:01 a.m. and followed a string of quakes that began with a 3.8 at 6:27 a.m. Dozens of earthquakes have followed.

USGS said the 4.2 quake was about 9.4 km in depth.

A magnitude 4.2 quake is quite significant.

The shaking that it caused was so extensive that people living in the heart of San Francisco actually felt “windows rattling”

Residents in San Francisco’s Glen Park and Nopa neighborhoods reported rumbling and ‘windows rattling’ during the quake, and public transportation throughout the area was also affected by the swarm, according to the San Francisco Chronicle.

The moderate quake even activated the National Tsunami Warning Center, however, officials said there was no danger of a major wave hitting the Bay Area.

Of course this was not an isolated incident.

According to the USGS, this latest earthquake swarm was “a continuation” of a pattern of heightened activity that the region has been experiencing since last November

ABC7 Eyewitness News spoke with the USGS Monday morning, and they say this is a continuation of the swarm of quakes the area has been experiencing.

On Friday, the area saw its first earthquake in several weeks, but there have been dozens of quakes since November.

Could it be possible that all of this activity is building up to some sort of a really big event?

According to the Southern California Earthquake Data Center, there have been 321 earthquakes in the San Francisco area in the last 7 days.  The following is a screenshot

Needless to say, this isn’t normal.

The swarm of earthquakes that hit San Ramon on Monday was centered on one of the main branches of the San Andreas Fault System…

Still, Monday’s noticeable swarm broke out right on the Calaveras Fault, a main branch of the San Andreas – the monstrous 800-mile-long fault spanning from Southern California through the Bay Area and into the Pacific.

The Calaveras splits off from the main fault line near Hollister in central California and runs parallel to it through the East Bay region.

Scientists with USGS have warned that one of these faults or other major branches nearby could soon reach their anticipated breaking point and rupture right in the heart of California.

And it isn’t just northern California that has been shaking lately.

A couple of weeks ago, a magnitude 4.9 earthquake rocked Southern California

A 4.9-magnitude earthquake and several aftershocks rattled Southern California on Monday night, according to the United States Geological Survey.

The first and largest quake happened approximately five miles northeast of Indio Hills, which is in the Palm Desert region of Riverside County, at around 5:57 p.m., the USGS reported. It occurred at a geological depth of nearly two miles. The preliminary magnitude of the earthquake was first reported as 5.1 before it was downgraded to 4.6 and then adjusted to 4.9 by USGS officials.

Scientists keep telling us that it is just a matter of time before the San Andreas Fault System “rips wide open”.

This is something that I have written about extensively over the years.

These latest quakes are a major league wake up call.

Unfortunately, most people living in California have learned to tune out such warnings.

Interestingly, the earthquake swarm that shook San Ramon on Monday morning occurred just after the Sun released “a relentless barrage of powerful solar flares”

The sun has erupted in a relentless barrage of powerful solar flares over the past 24 hours, firing off at least 18 M-class flares and three X-class flares, including an X8.3 eruption — the strongest solar flare of 2026 so far. Solar flares are ranked by strength from A, B and C up to M and X, with each letter representing a tenfold increase in energy — meaning X-class flares are the most powerful explosions the sun can produce

The culprit is sunspot region 4366, a volatile active region that has grown rapidly in just a few days. The flurry of activity began late Feb. 1 and has continued into Feb. 2, with multiple M-class and X-class flares erupting in quick succession. The prolific region appears to be far from finished. Spaceweather.com described the region as a “solar flare factory”, warning that its rapid growth and magnetic complexity make further eruptions highly likely.

Many scientists believe that we tend to see more seismic activity when the Sun is highly active.

Needless to say, the Sun has been extremely active lately.

And we are being warned that Sunspot AR4366 will soon be directly facing our planet…

It’s also possible that more eruptions are still to come. Sunspot AR4366 remains highly active and continues to rotate into an Earth-facing position, raising the chance that future eruptions could launch CMEs more directly toward our planet. NOAA forecasters say they expect more exciting space weather activity from this region in the coming days.

Sunspot AR4366 is absolutely massive, and I think that we should all be watching it very closely.

We live at a time when the giant ball of fire that we revolve around is becoming increasingly unstable.

We also live at a time when the ground under our feet is becoming increasingly unstable.

Unfortunately, I am entirely convinced that what we have experienced so far is just the tip of the iceberg.

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Tyler Durden Wed, 02/04/2026 - 16:20

Supreme Court Allows New California Congressional Map That Favors Democrats

Zero Hedge -

Supreme Court Allows New California Congressional Map That Favors Democrats

Authored by Matthew Vadum via The Epoch Times,

The U.S. Supreme Court on Feb. 4 allowed California to use its newly redrawn congressional map in the upcoming midterm elections over the objections of Republicans who filed to block it.

The decision in Tangipa v. Newsom came in an unsigned order. No justices dissented. The court did not explain its ruling.

California Republicans had filed an emergency application with the court on Jan. 20, asking the justices to block the map that gives Democrats an electoral advantage.

The new ruling comes after the court on Dec. 4, 2025, upheld a redrawn election map that aimed to increase Republican representation in Texas’s U.S. House delegation.

Republicans had argued that the new California map, which voters authorized in November 2025 by approving Proposition 50, constituted unlawful racial gerrymandering that the federal Voting Rights Act prohibits.

Gerrymandering is the manipulation of electoral district boundaries to favor a particular party or constituency.

The Supreme Court has previously ruled that race-based gerrymandering violates the U.S. Constitution but that redrawing district boundaries to boost partisan fortunes passes constitutional muster.

In a 2–1 ruling delivered on Jan. 14, a three-judge federal panel in California rejected GOP arguments, describing the referendum as a proportional and legal reaction to Republicans undertaking redistricting efforts in Texas.

“We find that Challengers have failed to show that racial gerrymandering occurred, and we conclude that there is no basis for issuing a preliminary injunction,” the court said in its written opinion.

The judges said California’s move was a reaction to similar moves undertaken in Texas that President Donald Trump encouraged.

“The stated goal of [the legislation authorizing the referendum] was to counter the actions of Texas and pick up an additional five Democratic seats,” the court wrote.

“The new map drawn by a private consultant, paid for by the Democratic Congressional Campaign Committee, and incorporated into Proposition 50, met that goal exactly.”

Republicans currently hold a thin, 218–214 majority over Democrats in the U.S. House. There are 435 seats in the House, but three are currently vacant.

Tyler Durden Wed, 02/04/2026 - 15:45

Lawsuit Challenges Trump's 'Gold Card' Visa Program

Zero Hedge -

Lawsuit Challenges Trump's 'Gold Card' Visa Program

Authored by Bill Pan via The Epoch Times,

A national university faculty group is suing to shut down President Donald Trump’s “Gold Card” visa, arguing that the new, expedited pathway to permanent residency for wealthy foreigners is unlawful.

In a lawsuit filed Feb. 3 in the U.S. District Court for the District of Columbia, the American Association of University Professors (AAUP) and several foreign professionals say the program benefits rich applicants at the expense of “qualified, merit-based” candidates, such as scientists, engineers, and doctors.

The Trump Gold Card program, which formally went live on Dec. 10, 2025, was created by executive order and described by the president as a “green card on steroids.” Individual applicants must pay a nonrefundable $15,000 processing fee to enter the pipeline and, after clearing background checks, make a $1 million “gift” to the government.

Employers can apply for a corporate Gold Card for workers by paying the same $15,000 fee plus a $2 million contribution per employee.

The Gold Card does not have its own visa category. Instead, Trump’s executive order directs agencies to use existing EB-1 “extraordinary ability” and EB-2 “exceptional ability” green card categories and to treat the required payments as evidence that the applicant will substantially benefit the United States.

Both EB-1 and EB-2 categories fall under the employment-based immigration system, which is capped at 140,000 visas annually. According to the U.S. Citizenship and Immigration Services (USCIS), EB-1 and EB-2 visas account for about 80,000 of those slots.

Because those green cards are limited and already in high demand, the AAUP lawsuit says, opening a fast lane for Gold Card applicants will increase wait times for existing applicants, forcing them to remain longer on temporary visas and disrupting the work they do.

“Rather than reserving those visas for the world’s best and brightest, the Gold Card program converts the visas into revenue-generating commodities sold to those who can pay $1 million or more,” the complaint states.

The plaintiffs argue that the Gold Card conflicts with the Immigration and Nationality Act’s merit-focused criteria for EB-1 and EB-2 visas. They also contend that, at the very least, the administration violated procedural law by skipping the customary notice-and-comment rulemaking before rolling out the program.

Among the individual plaintiffs are a Colombian electronic engineer, a Taiwanese cancer biologist, and a Mexican biomedical scientist. All are seeking EB-1 or EB-2 green cards and say the Gold Card will push them further back in an already backlogged system.

The lawsuit asks the court to declare the Gold Card unlawful and halt its continued operation. It names the U.S. Departments of Homeland Security, Commerce, and State, the USCIS, and officials involved in creating and administering the program as defendants.

The agencies did not respond to requests for comment.

While opponents of the Gold Card warn that it will drive away talent, Trump has described the program as a way for companies to retain highly skilled graduates from elite American colleges who might otherwise have to leave the country after finishing their studies.

“They graduate from the top schools,” Trump said last December. “These people want to hire them. Now you’re able to buy a card and you’re able to keep people in the country.”

According to the president, more than $1.3 billion from Gold Cards was generated in the program’s first week.

The administration is also developing a Trump “Platinum Card,” which would require a $5 million payment and allow foreign nationals to spend up to 270 days a year in the United States without being subject to U.S. taxes on income earned abroad. That program has not yet launched but is already accepting sign-ups for a waiting list.

Tyler Durden Wed, 02/04/2026 - 15:20

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