Rand Paul Goes To Fort Knox To Verify That US Gold Stockpile Still Exists

In September 1974, amid public and congressional concerns, a high-profile inspection occurred at the U.S. Bullion Depository at Fort Knox. In a rare exception to the "no visitors" policy, members of Congress and the press were invited in.

This was followed immediately by a special audit conducted by the General Accounting Office (now the Government Accountability Office) in cooperation with Treasury auditors. It covered roughly 21% of the gold bars stored there at the time and found that the holdings matched the depository records.  Since that event, there has been no independent audit of federal gold stores.  The contents of Fort Knox has remains a mystery.  

In 2024, the US treasury Department stated that Fort Knox held 4580 metric tons of gold in the vaults, but many fiscal conservatives have been skeptical.  It makes sense to be suspicious; why would the federal government avoid independent audits for over 50 years unless there's some kind of problem? 

The return of Donald Trump to the White House in 2025 presented a rare opportunity for the public to press for verification that Fort Knox is, in fact, still holding gold.  We are seeing some indication that the Trump Administration is taking these concerns seriously, with Senator Rand Paul being given access to Fort Knox vaults last week. 

I have been asking to see the gold at Fort Knox since February of 2025. This week I finally went deep underground and looked for myself. Yes, the gold is there, roughly 147 million ounces.

The real lesson is not the gold itself. It is what happened to the dollar after 1971, when…

— Rand Paul (@RandPaul) August 14, 2026

Rand Paul's inspection of the gold stores does not constitute a true audit, but it is the first outside verification of the US gold stockpile in decades.  The audit of 1974 started with visual inspections, so this could potentially lead to a more thorough inventory down the road.  Rand Paul notes that the gold is, indeed, still sitting at Fort Knox.

"Yes, the gold is there, roughly 147 million ounces..."

After seeing it himself, Paul quickly moved past the question of whether the gold exists. "It is impressive, but the real point is what it still teaches in 2026," he wrote.  Paul pointed to 1971, when the U.S. ended the dollar's convertibility into gold, and said the currency has lost roughly 85% of its value since then.

Public worries have grown over the stability of the US economy since the credit crash of 2008-2009.  The Federal Reserve's massive bailout programs pumped trillions of dollars into the global monetary system and created the catalyst for an inflationary crisis.  Ron Paul's limited audit of the bailouts in 2011 found over $16 trillion in emergency loans at 0% interest over the course of 3 years.  A large portion of these loans went to foreign banks.  

Ron Paul's audit was not a full accounting of central bank activities.  We still don't know for certain how much dollar devaluation occurred. 

Since the credit crisis, the Fed has engaged in multiple QE measures and bailouts, keeping interest rates near 0% for approximately 7 years.  The pandemic bailouts in 2020-2021 were the straw that broke the camel's back, triggering the inflation crisis that alternative economists had been predicting.

Any reversal of long term inflationary pressures will likely require a return to a commodity backed currency standard, otherwise, the trend will continue until the dollar eventually breaks and the system crashes.  The confirmation by Rand Paul of the Fort Knox holdings offers hope that a return to the gold standard or a mixed commodity standard might one day be possible and that the US economy can still be saved from an inflationary spiral.  

Tyler Durden Mon, 08/17/2026 - 16:40

"Both Parties Are Whirling Around The Drain Of Extinction..."

Authored by Jim Kunstler,

“A sane society cannot debate its way out of psychosis. It must diagnose the patient with lethal precision and restore the ancient boundary between the mad and the free.”

- LHGrey on “X”

Back in the days of sailing ships, a certain subtropical zone of the ocean became known as the “horse latitudes.” There, an eerie windless calm prevailed, sometimes for weeks, stalling the progress of ships in mid-crossing. In desperation to save water on-board, captains ordered the horses being transported to America to be cast overboard, and the animals’ bloated carcasses drifted in an ominous cortège of warning to other mariners entering the zone of stillness and death.

This stretch of weeks in late summer has become the horse latitudes of human affairs for American politics. The primaries are mostly over, at least the ones that mattered. Congress has departed the Potomac swamp for the lakes, seashores, and the county fairs out where the corn grows high. The heat in the Arabian Sea must turn the deck of an American aircraft carrier into a giant hot-plate sailors fear to tread. Even the country’s multitude of lawyers turn off their cell-phones and contemplate the blank, watery horizon with heads full of iced brown liquor.

We civilians are stuck between that old rock and a hard place... two political parties whirling around the drain of extinction in a nation seeming to drift toward the edge of the known world.

In the background, a massive realignment grinds away.

The old parties of labor and of property have forgotten their reasons for existence. Labor vamoosed to Mexico, China, and obscure faraway lands decades ago. Property is still here, but it’s all been collateralized into grift and fraud.

In the absence of working people to defend, the Democrats became a party of racketeering race-and-gender hobgoblins, now marshaling into an insectile host of predatory Marxists, and altogether their antics present as a spectrum of mental illness. Voters who somehow managed to preserve some sense of mental decorum increasingly abandon that lunatic coalition — but where to go? This is exactly what is happening in the state of Michigan with the rise of Abdul el-Sayed, who adds a caboose of jihad to his choo-choo train of Bolshevik nuttery. Long-time Dems like Democratic attorney Julian Epstein are publicly jumping ship to support el-Sayed’s opponent, Mike Rogers.

The clueless old gorks in charge of the Democratic Party — the likes of Chuck Schumer, Hakeem Jeffries, Mark Warner, Liz Warren, Chris Murphy, Sheldon Whitehouse — are suddenly nowhere to be seen (or heard). They don’t dare denounce this latest onrush to new-and-improved insanities because, apparently, insanity is all the party has left — stealing other peoples’ property. . . pretending to change sexes. . . organizing giant frauds. . . demanding payoffs for hallucinated affronts. . . and feeding the vicious Leviathan they want government to be.

And don’t be too sure that coalescing around the figure of one AOC in 2028 is going to save this outfit. Sandy is trying to pretend she’s somewhere in the middle, between the feckless old official leadership and the outright commies, but she’s still a member of the odious “Squad” composed of Somali fraudster Ilhan Omar, jihadist Rashida Tlaib, and race-hustler Ayanna Pressley — meaning, its just the same brand of crazy the party has been cultivating for more than a decade. What remains for America to discover about Alexandria Ocasio-Cortez is that she’s a mere opportunist with nothing inside except some skill at middle-school girl games. . . Eva Peron without the savvy.

On the other end of the political transect stand the Republican phantoms of Congress busy getting nothing done for the past year and a half despite holding the majority in both houses.

They’re personified perfectly by Senator Mitch McConnell, quite possibly dead for all that anyone really knows. In John Thune you have something like an anti-leader, doing everything possible to evade his duties, squashing election reform under arcane procedural bullshit, obstructing the confirmation of important agency nominees and federal judges, and “gaveling-in” ghost sessions of his chamber to prevent the president from making recess appointments. And why? Probably for no better reason than he just wants to dissociate himself and many of his fellows from the president because he’s seen as too gauche for their club.

Speaking of whom, you see Mr. Trump and his faction stand apart, but not alone, in this big game. He’s going through a rough patch in these horse latitudes of summer. But despite some appearances, and despite the bluster emanating from Tehran, he has already succeeded in neutralizing Iran while Secretary Bessent keeps the maniac IRGC in an ever-tightening economic squeeze. There’s reason to believe this well end well for the Middle East, actually in an epic realignment of actual interests, rather than obsolete tribal animosities.

Mr. Trump is also working hard to realign American interests at home into an economy based on making things of value instead of just taking profits on financial shell-games. It’s a gigantic task and one that will take time to get working because factories can’t be built overnight and the demoralized working class can’t be instantly realigned to opportunities that are months from materializing. In the meantime, have a little faith if you can, even though these have been notably faithless decades for our sore-beset nation, and we are too accustomed to bad faith.

Just power through these listless, torpid dog days of August and gird your loins for action in the fall because it’s coming. And that includes a long-awaited accounting for the many crimes against the people of this land by some of our own people. A new permission structure is building out there in the foggy gloaming: you will be set free to stop pretending about a lot of stuff that matters.

Tyler Durden Mon, 08/17/2026 - 16:20

 

Well, that was no fun…

I have been testing negative since the weekend; maybe it’s the availability heuristic talking, but I have been hearing about (many? some?) other people catching it. (See this overview of the surge)

The fog is annoying as is the FOMO for several events I had to miss.

The one thing I did manage to do was catch up on a mix of meh streaming series and movies I would be too bored with had I not had fog brain or otherwise been meaning to watch.

These include:

Movies:

The Dink
Wrecking Crew
Fast Charlie

ReWatched

Atomic Blonde
Beekeeper
High Fidelity
The Hitman’s Bodyguard
Lady Eve

Streamers:

Blackish
Clarkson’s Farm (Season 5)
The Hawk

Stand Up:

Mary Beth Barone, Galaxy Brain
Jordan Jensen, Take Me With You
Langston Kerman, Bad Poetry

~~~

Back to the real world starting tomorrow.

The post Negative. Yay! appeared first on The Big Picture.

"Cash Crunch" Deepens? Mark Walter Explores Chelsea FC Stake Sale To Clearlake

The latest developments surrounding Mark Walter's empire appear to reinforce Yahoo Sports reporter Jack Baer's warning last week of a potential "cash crunch" following the abrupt $12.5 billion sale of the Los Angeles Lakers to Josh Kushner and former Disney chief Bob Iger. The Financial Times also reported last week that the FBI seized phones belonging to Walter and Guggenheim Investments President Dina DiLorenzo last year as part of a federal investigation into entities controlled by Walter.

Bloomberg reported Monday that Walter has explored selling his stake in Chelsea FC to Clearlake Capital, the London football club's majority owner. The report is based on information from people familiar with the matter and has yet to be officially confirmed.

Walter's family office approached the Santa Monica-based alternative asset manager, led by Behdad Eghbali and José Feliciano, in recent days, the report said.

For context, Clearlake is Chelsea FC's majority shareholder, holding more than 60% through the BlueCo consortium formed to acquire the club from Roman Abramovich in 2022. The remaining interest is held by Todd Boehly, Mark Walter, and Hansjörg Wyss, each with a minority stake.

The report noted that potential divestment comes as Walter's TWG Global pursues deals to address loans on its insurers' balance sheets that have sparked a federal investigation.

Last week, Walter agreed to sell the Los Angeles Lakers to Josh Kushner and Bob Iger for a record $12.5 billion.

Yahoo Sports reporter Jack Baer said last week, "Mark Walter is reportedly facing a cash crunch."

The Wall Street Journal noted the same:

Review last week's developments:

• FBI Seized Mark Walter's Devices Months Before Record $12.5 Billion Lakers Sale

TWG Global's sports portfolio extends well beyond Chelsea and the Lakers. The company notes on its website that it owns:

• Los Angeles Dodgers: Walter is the MLB franchise's controlling owner and chairman.
• Los Angeles Sparks: An ownership interest in the WNBA franchise.
• RC Strasbourg: Indirect ownership through BlueCo, the holding company that also controls Chelsea.
• Professional Women's Hockey League: TWG founded and financed the league, which recently added its first outside investors.
• Billie Jean King Cup: TWG owns 49% of the joint venture operating the women's international tennis competition.
• Cadillac Formula 1 Team: TWG Motorsports holds a majority interest alongside General Motors.
• Andretti Global: Teams competing in IndyCar, Indy NXT, and Formula E.
• Spire Motorsports: A NASCAR Cup and Truck Series organization.
• Wayne Taylor Racing: An IMSA sports-car racing team.
• Walkinshaw Andretti United: An Australian Supercars team.
• Teton Ridge: A Western sports, media, and entertainment platform.

The Los Angeles Lakers remain listed on TWG's website despite Walter's deal last week to dispose of the team.

Tyler Durden Mon, 08/17/2026 - 15:40

Almost 60% Of Democrats Have A Favorable View Of Socialism

Authored by Jonathan Turley,

Recent polls show steady growth in support for socialism among Democrats. A new CBS poll shows how popular it is, with 58 percent holding a positive view of socialism—26 points more than the 32 percent with a positive view of capitalism. This may explain why House Minority Leader Hakeem Jeffries, while rejecting core parts of its platform, embraced Democratic Socialists this week as part of the Democratic Party. In addition to a variety of anti-Semitic figures within its ranks, the DSA wants to get rid of the presidency, the Senate, the Supreme Court, and other institutions (as well as borders, immigration enforcement, and much of private property).

Yet, Jeffries still believes they share values and wants them to be part of the Democratic party.

In other words, there are many “fine people” in the DSA despite being committed to the destruction of our core institutions.

The poll also found that 24 percent of Democrats have “no opinion” of socialism, while 18 percent have no opinion regarding capitalism.

Other polling shows similar results.

An Economist/YouGov survey recently found that 62 percent of Democrats said they would vote for a “Democratic Socialist” candidate.

At the same time, Democratic Socialists have been spinning fables about the Framers not opposing those who acquire too much wealth. They also repeat the mythology that socialism has worked in other countries. It destroyed the economies in France and Great Britain.

Nevertheless, British prime minister, Andy Burnham declared that he wants to restore the policies of 40 years ago, before the Conservative government of Margaret Thatcher.

In his own version of promising the “warmth of collectivism,” Burnham declared, “The country surrendered control of the essentials — housing, water, energy, transport — and left people exposed to higher costs.”

Burnham’s account leaves out that the supposed golden age under Labour Prime Minister James Callaghan, which he was referencing, led in 1977 to the so-called “winter of discontent.” Those policies destroyed the British economy, and the nation was faced with the humiliation of being rescued by the International Monetary Fund as if it were some banana republic.

Ultimately, capitalist policies were restored by Margaret Thatcher and the economy rebounded.

In “Rage and the Republic,” I discuss the economic philosophy of the Founders in exploring the history and future of this unique Republic.

Notably, this is also the 250th anniversary of Adam Smith’s Wealth of Nations. Smith’s free-market theory was an instant hit with the founding generation. These men had just created the first major Enlightenment Revolution based on a belief in natural rights that came from God, not governments.

Yet, they knew that true individual liberty could not be achieved without economic freedom. Smith’s economic theory was the perfect companion for their political theory. Rage and the Republic discusses the rise of socialism in the United States and around the world. It calls for a recommitment to what I call a “liberty-enhancing economy.”

The Democratic leaders from Harris to Buttigieg to Newsom believe that they can ride this rage wave into power by offering up core American institutions. They wrongly believe that the mob will destroy their enemies, but not themselves. 

History has proven them wrong time and time again.

This election is shaping up to be arguably the most important in our history as we fight for the identity of this Republic on its 250th anniversary. We have come face to face with Benjamin Franklin’s warning that this is a Republic if we can keep it.

Tyler Durden Mon, 08/17/2026 - 15:20

Bill Maher Draws The Line: American Values Are Not Negotiable

Authored by Steve Watson via Modernity News,

Even Bill Maher has finally had enough. The longtime left-leaning comedian used his HBO platform to deliver a blunt message that cuts through years of open-borders ideology: if you want the American dream, you take American values with it. No exceptions. No special pleading. And no, it's not "racist" to say so.

On a recent episode of Real Time, Maher laid out a straightforward standard that should never have become controversial. Immigrants are not free to reject the foundation of the country they chose to enter.

"If you want the American dream, you have to take the American values," he said. "But you have to answer one question: Do you like Western civilization? Because that's what we are. And that's not negotiable."

? BILL MAHER: THE AMERICAN DREAM COMES WITH AMERICAN VALUES

Maher says immigrants are welcome to bring their food, language, religion and traditions — but America's fundamental values aren't up for negotiation.

"If you want the American dream, you have to take the American... pic.twitter.com/bt9jopmFur

— Real America's Voice (RAV) (@RealAmVoice) August 16, 2026

Maher was careful to note that while some immigrants still seek to assimilate, the problem is a growing contingent that treats the melting pot with open contempt. "Melting pot? F - you, you melt," was how he characterized the new attitude.

He listed practices that remain firmly off-limits: honor killings, forcing women to cover their faces, polygamy, cousin marriage, and female genital mutilation. "There's lots of stuff we don't do here, and it's non-negotiable."

These, he stressed, are not "White values."

They are liberal values - gay rights, women's equality, free speech, separation of religion and state - that people fought and died to establish.

"It's not racist to say if you want to come here to help form a more perfect union, great. But some things are too fundamental to change," Maher stressed.

He went further, calling out progressive politicians who quietly soft-pedal those same liberal values when they collide with Muslim sensitivities.

He cited Democratic congressional candidate Melissa Chaudhry, who reportedly explained the absence of LGBTQ issues on her website by saying "a lot of Muslims do not feel that way, unfortunately."

Maher's response was direct:

"Is this the progressive policy now? ... We throw gay people under the bus any time it clashes with what makes Muslims uncomfortable?"

He also dismantled activist Linda Sarsour's line that "Our number one priority is our community. It is not to assimilate." Maher's reply: "OK, but that's not really how immigration works."

He offered a simple analogy. Move to Japan and start demanding they abandon their customs for yours, and see how far that goes.

Maher rejected the usual smear. Accusations of "Islamophobia," he said, are "just a bulls - word to cow people into not talking about this."

His concern is not skin color or demographic change. "I don't give a s - about colors. ... I care about liberal values being replaced by illiberal ones."

That clarity stands in stark contrast to the direction taken across the Atlantic. In Britain, the official response to mass migration and parallel cultural demands has been the opposite of Maher's: expand the list of protected sensitivities, log criticism, and punish those who refuse to self-censor.

Maher's monologue is not a sudden conversion to America First realism. It is a late recognition that a society which refuses to defend its own foundational principles will eventually lose them.

The United States still has the cultural confidence - and the political space - to draw the line he described. Britain's experience shows what happens when that confidence is abandoned in favor of managed decline and institutional self-censorship.

Assimilation is not oppression. It is the price of entry into a successful civilization. Maher finally said it out loud. The only remaining question is how many more on the left will admit the same before the damage becomes irreversible.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Mon, 08/17/2026 - 14:40

Trump Accuses BBC Of Harassing His Family In $10bn Lawsuit

Authored by Steve Watson via Modernity News,

President Donald Trump has accused the BBC of harassing his family after the state-funded broadcaster's lawyers tried to force his children and son-in-law to testify in his $10 billion defamation lawsuit.

The corporation's legal team asked a Florida court for authorisation to serve subpoenas on Donald Trump Jr, Ivanka Trump and Jared Kushner. Court filings show the BBC claims the three "have personal knowledge and likely have possession, custody, or control of records relevant to multiple elements" of the case.

Attempts to deliver the papers in person were repeatedly blocked by the Secret Service and local law enforcement.

BREAKING: US President Donald Trump has accused the BBC of harassing his family after the broadcaster tried to subpoena his children.

? Freeview 236, Sky 512, Virgin 604
? Become a Friend of GB News: https://t.co/c2dfqbeDpJ pic.twitter.com/eoRbIvqscG

— GB News (@GBNEWS) August 16, 2026

A spokesman for Trump's legal team made the president's position clear: "The BBC intentionally defamed President Donald J. Trump, and now the BBC is seeking to harass him, his family, and supporters by abusing the deposition process. The BBC is simply trying to distract away from their own obvious liability."

The BBC's process servers tried to hand documents to Ivanka Trump and Jared Kushner at their Florida home, only to be stopped at a police checkpoint. The Secret Service later confirmed it could not accept the subpoenas on their behalf.

Separate attempts to serve Donald Trump Jr at Trump Tower in New York were turned away by security and staff who said the legal department was unavailable.

Unable to complete personal service, the BBC is now asking the court for alternative methods such as email or notice to the family's lawyers. The broadcaster insists the three family members were present or involved around the January 6, 2021 speech at the heart of the lawsuit and can speak to Trump's intentions that day.

'The BBC are now trying to subpoena members of the Trump family. It's farcical.'

Podcaster Paul Duddridge reacts as Donald Trump accuses the BBC of harassing him as the corporation pursues further action in Donald Trump's defamation case against it. pic.twitter.com/bopKNfIaMS

— GB News (@GBNEWS) August 16, 2026

Donald Trump says BBC harassed his family by 'abusing the deposition process'https://t.co/QZVXf0ueE8

— GB News (@GBNEWS) August 17, 2026

The lawsuit itself targets a 2024 BBC Panorama documentary that spliced together portions of Trump's speech delivered more than 50 minutes apart. The edit created the false impression that the president was urging supporters to storm the Capitol.

Trump has always maintained he called for peaceful protest. He is seeking $10 billion in damages for harm to his reputation, brand and businesses. A trial is scheduled for February 2027 in Miami.

This is the same scandal that already cost the BBC its top leadership. In late 2025, Director General Tim Davie and News CEO Deborah Turness both departed after the misleading edit became public.

Trump had warned at the time that the corporation's "very dishonest people" had tried to interfere in an American presidential election and threatened legal action that later escalated into the current $10 billion claim.

While the Corporation fights tooth and nail in American courts to avoid accountability for its own editing practices, the UK government has been working to force social media platforms to artificially boost BBC content.

Plans outlined earlier this year would require YouTube and other giants to prioritise the state broadcaster's output under the guise of fighting "disinformation."

Critics have long argued that the same organisation now seeking to compel testimony from a sitting U.S. president's children is the one British taxpayers are forced to fund and that ministers want algorithmically force-fed to the public.

Trump's legal team frames the latest move as an attempt to muddy the waters rather than confront the original doctored footage that triggered the entire case.

The Florida court will decide whether the BBC can proceed with alternative service.

Whatever the ruling, the spectacle of a foreign state broadcaster chasing the children of the American president after being caught splicing his words reeks of desperation.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Mon, 08/17/2026 - 14:00

Copper Squeeze Deepens In London As Futs Near Record; Barclays Flags Top Mining Picks

Copper prices in London have held above $14,000 a ton for nine consecutive sessions, with steep backwardation signaling that near-term demand is outstripping available supply. A confluence of bullish drivers is pushing prices toward record highs, while the key cash-to-three-month spread has widened to its highest level since the 2021 market squeeze.

The spot price traded as much as $543.50 a ton above three-month contracts on the London Metal Exchange, a hallmark of steep backwardation that signals near-term demand is outstripping available supply.

LME copper curve signals deep backwardation:

Three-month futures rose as much as 1.7% to $14,396 a ton on Monday, closing in on January's record of $14,527.50.

Richard Garchitorena, a New York-based Barclays equity research analyst covering North American metals and mining stocks, wrote Monday morning that mining stocks are poised for further gains as copper supplies continue to tighten.

Garchitorena said copper supplies remain constrained for a number of reasons: Chilean production fell 6.7% year over year through June, prompting Cochilco to cut its 2026 forecast to 5.27 million tons, down 2.6%. Antofagasta separately reduced its annual guidance by about 5% after severe weather disrupted its Los Pelambres mine. An outage at Indonesia's Gresik smelter has also delayed shipments, with no restart date established.

He added that LME copper stockpiles have plunged 32% from a month earlier to 205,000 tons, while Comex inventories rose 8% to 735,000 tons as traders await a potential U.S. tariff on refined copper. He also noted that speculative net-long positions increased to 77,123 contracts, up 20% from July.

Garchitorena's preferred individual mining stocks to watch include Freeport-McMoRan, First Quantum Minerals, Hudbay Minerals, Newmont and Agnico Eagle.

Global X Copper Miners ETF (COPX)

Separately, David Wilson, head of metals strategy at BNP Paribas SA, told clients, "There seems to be momentum for it to get there," referring to the potential for LME copper to exceed the January record. "It's moving into overbought territory, but I don't know if that means anything at the moment, given how tight it is."

"Normally you'd expect to get more Chinese deliveries into the LME," BNP's Wilson said. "But the thing is, why would you deliver to the LME when you can still effectively ship metal into the US?"

Bloomberg noted that the copper squeeze comes "ahead of the third Wednesday of the month delivery date, the main focus of liquidity in the LME's contracts. That may pile pressure onto traders with short positions."

Tyler Durden Mon, 08/17/2026 - 13:40

Massachusetts Mayor Charged With Using COVID Loan For Election Campaign, Debt Payments

Authored by Aldgra Fredly via The Epoch Times,

A Massachusetts mayor was arrested on Aug. 14 on allegations that he fraudulently secured more than $1.5 million in COVID-19 small-business loans to fund his election campaign and pay personal taxes and mortgages.

Lawrence Mayor Brian DePeña, 61, was charged with one count of wire fraud and one count of money laundering, according to a statement by the U.S. Attorney’s Office for the District of Massachusetts.

DePeña has been released from custody following his initial appearance in federal court in Boston on Aug. 14, subject to several conditions, including turning over his passport.

According to his indictment, he allegedly applied for Economic Injury Disaster Loans (EIDL) for Tenares Tire Services Inc., a tire sales and automotive services business he owned in Lawrence, between 2020 and 2021.

The Small Business Administration (SBA) offered those loans to eligible small businesses that were facing financial difficulties during the COVID-19 pandemic.

Prosecutors alleged that DePeña obtained $150,000 in EIDL loans for Tenares Tire in June 2020, using most of the funds as working capital for his business. In early 2021, his mayoral campaign was struggling to pay bills, and he owed back taxes to the IRS and $900,000 to two private lenders.

DePeña allegedly applied in April 2021 for an increase in his business’s EIDL loan, which the SBA later approved for an additional $350,000, according to the statement.

Prosecutors said DePeña allegedly used $85,000 of the funds to pay off personal tax debts and transferred $120,000 to his personal account, of which $90,000 was later deposited into his mayoral campaign account.

In October 2021, DePeña allegedly requested another EIDL loan increase, which the SBA approved for more than $1.15 million. He then transferred the entire amount to a personal account and used $42,112.96 of that fund for his mayoral campaign, prosecutors alleged. He also allegedly used more than $883,000 to pay off his debts.

The mayor had made 16 payments on the Tenares Tire EIDL as of Aug. 5, 2026, leaving an outstanding principal balance of about $1.6 million, according to prosecutors.

“This was emergency financial assistance meant to be a safety net for struggling businesses, not Mr. DePena’s own personal ATM,” Ted E. Docks, special agent in charge of the FBI’s Boston Field Office, said in the statement.

“When elected officials misuse federal funds for personal gain, they’re breaking the trust of their constituents—and breaking the law.”

DePeña has served as mayor since 2021. He was reelected in November 2025 and previously served on the Lawrence City Council.

He faces up to 20 years in prison, three years of supervised release, and a fine of up to $250,000 if convicted of wire fraud. For money laundering, DePeña could face up to 10 years in prison, three years of supervised release, and a $250,000 fine if found guilty.

DePeña’s office did not respond to a request for comment.

Tyler Durden Mon, 08/17/2026 - 13:20

"July Was A Bad Month": Jane Street Lost $15 Billion In First Down Month In A Decade

Back in February, just around the time gold and silver had peaked at prices that seemed impossible just a year earlier...

... we warned readers that with Jane Street emerging as the biggest holder of SLV with almost 21 million shares, it was time to get the hell out of the precious metal as this HFT shop, best known for spawning SBF, the 10am slam of bitcoin, and constant, unforgiving market momentum (ignition), would now reverse its accumulation of silver - which its involvement had made a momentum stock - and would send its price plunging.

We have been huge silver bulls since 2009, but be very careful here: lots of financial engineering going on.

Jane Street not only added a record 20.6MM shares of SLV in Q4, it is now also the biggest holder of SLV pic.twitter.com/XNEiLz2ltZ

— zerohedge (@zerohedge) February 25, 2026

This is what happened to the price of silver since...

... driven in no small part by continued selling across the ETF space, where Jane has been the biggest seller, taking its total holdings from 20.7 million to just 6.7 million shares. 

In short, like any marquee HFT company, Jane rides - and creates - the momentum elevator on the way up... and then rides it, and creates it, on the way down. 

Which is why on Friday afternoon when the latest 13F filings dropped (our full breakdown is coming), the first company we looked at, even before Berkshire, was Jane Street and were not at all surprised to find that its latest holdings where the who-is-who of the Q2 momentum explosion, including such names as Sandisk, Bloom Energy, Dell, Micron, SMCI, CoreWeave, Broadcom and virtually any and every other retail momentum darling...

... all of which peaked on June 27, when as we pointed out previously, we saw Total Return Swap funding rates explode to record high levels, an indication that leverage had gone well beyond the peak and was now in Archegos territory (as we also warned)...

You will never guess on what day S&P funding costs hit an all time high and rolled over hard (sorry Total Return Swap bros) https://t.co/6vt6Ei82QR pic.twitter.com/9reNto9rsi

— zerohedge (@zerohedge) July 24, 2026

... a warning which had Situational Awareness listened to, it could avoid the most embarrassing firesale liquidation this decade. 

Our observation came just moments before the FT and Bloomberg blasted flashing red headlines that Jane Street had suffered massive losses as a result of its momentum-chasing ways in July. 

Because while everyone now knows that Situational (Un)awareness lost $35 billion between the start of July and the end of the month, thus sealing its fate, Jane Street - whose positions were effectively a carbon copy of what Leopold Aschenbrenner held on his book at the time of the handover to Citadel - was slammed with a historic $15 billion loss in July, its first monthly slump in about a decade, as the handful of AI-focused names that both its and Situational Awareness plunged into the end of the month as the momentum trade suffered a historic meltdown. 

Jane Street, in addition to investing in the stocks held by Leopold, also invests in Situational Awareness directly, suffered a rare and severe downturn amid volatile stock markets, Bloomberg and the FT reported. The company’s investment in the hedge fund, as well as wrong-way bets in Asian equity markets, drove part of the losses, said the person, who asked not to be identified citing private details.

"July was a bad month,” said Jane Street partner Turner Batty in an internal note.

To be sure, Jane has generated more than $40 billion of net trading revenue so far this year, more than it did in all of 2025 when it set a Wall Street record. Still, sch violent moves are a major red flag and an indication that either leverage is far too high or risk weightings are off the charts.

Batty said in the internal note that the desks have reduced exposures in strategies that contributed to volatility.

“Despite the large year-to-date increase in trading capital, the recency of these losses has caused us to locally be more selective about risk,” Batty said. “We’ve closed a significant portion of our risk in the specific areas we lost on in July, and have also reduced risk-taking in other strategies.”

It's not clear if that means that company was no longer igniting momentum in the same chip/memory momentum names that exploded, then collapsed all in the span of a month. 

The HFT black box, pardon "market maker" described the impact of the debacle at Situational Awareness while seeking to refinance billions of dollars of debt, according to the Financial Times, which earlier reported the loss.

The market maker described the impact of the debacle at Situational Awareness while seeking to refinance billions of dollars of debt, according to the Financial Times, which earlier reported the loss.

Jane Street was rattled by Situational Awareness and market turmoil as it was preparing to issue $14.6 billion of bonds this week to overhaul its debt load. It’s a stumble for the market maker that invested early in some of AI’s biggest players, including Anthropic PBC and CoreWeave Inc., adding to profits from its business frontrunning handling thousands of trades within milliseconds. 

That said, don't cry for Jane Street and its scretive boss Robert Granier, who have been setting record after record in recent years, including $39.6 billion of trading revenue for 2025, surpassed Wall Street trading giants including Goldman and JPMorgan. 

“Our positions currently seem appropriate for our present risk tolerance,” he said. “Market volumes have been strong, and we’ve continued to make improvements to our short time horizon strategies, that trading seems more profitable than ever.”

Translation: unlike silver which has seen Jane continue dumping, we expect that when it comes to momentum chip and memory stocks, Jane will double down and then use the same HFT momentum ignition gimmicks to create a new wave of retail excitement it will ride once again on the way up, while collecting an arm and a leg from the mile-wide bid ask spreads in names like Sandisk, something we pointed out last week. 

Top 10 stocks traded YTD average 16.4% of total market notional volume.

And no stocks is more profitable for dealers and HFTs than SNDK with a 12.4bps spread. No wonder they try to create constant momentum pic.twitter.com/8NPck9kqMC

— zerohedge (@zerohedge) August 10, 2026

As for Jane Street’s latest debt deal, the firm's deplorable July performance did not hold anyone back: investors including PIMCO, Capital Group and Fidelity bought in, which was issued across three bonds. The refinancing allowed the market maker to fund technology infrastructure and expand its trading strategies, Bloomberg previously reported.

The new fixed-rate deal, led by JPMorgan, is part of Jane Street’s plan to repay its floating-rate loans and revamp its $11 billion capital stack. 

Tyler Durden Mon, 08/17/2026 - 13:00

Americans Are Falling Into The Socialist Trap By Blaming Capitalism For Damages Of Statism

Authored by Daniel Lacalle,

Americans are falling into the socialism trap by not realizing that solving big government problems with an even bigger one is dangerous. Many blame capitalism for their affordability problems, when the true cause is statism. Statism is the gradual replacement of civil society, markets, savings, and individual choice by political control, public spending, regulation, taxation, and monetary intervention. The predatory state that I discuss in my book The New Global Economic Order represents the extreme manifestation of statism. It is a system where the political class extracts wealth and freedom from families and businesses to sustain itself, reward dependent clients, and exert control over society.

Big government, high taxes, constant money printing, and cronyism are not free-market capitalism.

Socialism markets itself well because scholars and politicians always judge socialist policies on their headline intentions, not on its disastrous results. As such, socialism is the perfect ideology for elites. It offers moral superiority and compassionate rhetoric while making those it claims to defend poorer, more dependent, and less free. By the time people realize the promise was a trap, the state is already too large, too powerful, and uses repression on the same people it vowed to protect.

Big government, interventionism, money printing, and high taxes have obliterated the economy and demolished the opportunities for middle-class families and small businesses to thrive. More government, taxes, printing, and interventionism will only cripple it further.

If big government, large subsidies, high taxes, and political control of the economy were the answers to modern affordability challenges, France would not be in stagnation, social discontent, and suffering massive debt and deficit problems. Furthermore, there is no single example of an economy that has solved the affordability, inequality, and cost of living problems by imposing political control and monetary financing of government debt.

The public sector does not belong to “the public”; it is a taxpayer-funded architecture controlled and managed by politicians, who consistently demand more taxes and more spending to provide the same or lesser services. There is no such thing as nationalization; it is politicization.

Many young Americans have been taught to believe that their frustration with housing, low real wage progress, weak savings returns, and declining upward mobility proves that capitalism has failed. However, the evidence shows something very different. In most developed economies, and increasingly in the United States since 2008, the dominant force is not free-market capitalism but a model of big government, chronic deficit spending, high debt, rising taxes, monetary debasement, regulatory obstruction, and political interventionism that protects insiders while penalizing new entrants. That is why so many millionaires and wealthy people support socialism. It is the perfect way to eliminate a merit-based system, obliterate competition, and keep privileges provided by political affiliation while demanding even more government control. Cronyism is a direct consequence of statism and a step toward socialism.

Few people are richer and more powerful than socialist tyrants and their enablers. Meanwhile, socialism needs poor people that stay poor and remain submissive to the state. Socialism replaces success-driven inequality with a politically directed one. However, in statism inequality is a matter of price, not availability. Socialism leads to hyperinflation and scarcity because it ignores economic calculation and uses the debasement of currency to expropriate the wealth created by the remains of the private sector and keep citizens dependent and submissive, while the political leaders enjoy the perks of privilege. By eliminating the incentives to make money, thrive, and prosper, socialism delivers the opposite of what it promises. However, by the time people find out, they cannot escape.

This is why Americans are falling into the socialism trap when they should be blaming statism, not capitalism. Socialism is the perfect ideology for elites because it wraps coercion in moral vanity. It offers compassionate rhetoric and a posture of moral superiority while making the very people it claims to defend poorer, more dependent, and less free.

The cats promise free cheese to the mice who do not understand why it is “free.”

The trap works because it sounds compassionate.

The attraction of socialism is not that it works. It is that it looks virtuous. It is not. It promises security, fairness, dignity, and protection from the instability of the market. But by the time citizens realize that the promise was a trap, the state is already too large, too expensive, too interventionist, and too powerful to reverse easily.

The pattern of statism is evident across developed economies. The IMF projects general government expenditure in advanced economies at 40.7 percent of GDP in 2026, while the OECD reports average government expenditure across OECD countries at 49.3 percent for OECD EU members. In countries like France, government spending exceeds 57% of GDP. The result is stagnation, social discontent, and a rising cost of living while the so-called “free things” become very expensive in the long run. Having constantly deteriorated “free” services in exchange for rising taxes, unaffordable housing, and fewer opportunities is a very bad trade.  These are not the figures of a minimalist system. They are the figures of political allocation on a massive scale.

If bigger government, higher taxes, and more intervention were the route to social justice, young people would be thriving, and socialist economies would be global leaders. Instead, they suffer inflated asset prices, unaffordable housing, diminishing value deposits, and worsening access to the middle class. This is not because markets are too free, but because governments are too dominant.

China and the Nordic countries are not proof that socialism works but evidence that when nations abandon socialist-controlled economic policies and implement what many in the West would call “unbridled capitalism,” it leads to growth and wealth.

The bad news is that the same big government fiscal model keeps expanding despite its failures. The IMF estimates that advanced economies ran an overall fiscal deficit of 4.4 percent of GDP in 2025 and projects 4.8 percent in 2026. Global gross public debt rose to 93.9 percent of GDP in 2025 and is projected to reach 100 percent by 2029, while public debt across many advanced economies remains historically high. Far from correcting past excesses, the political system continues to borrow against the future to preserve the privileges of the present. Thus, politicians that have become the new aristocrats blame millionaires and the wealthy for the current situation, when even when they confiscate rising percentages of all the wealth of the rich, the economy only worsens. This is the predatorial statism I mention in my work. Politicians absorb more of a nation’s wealth every year and then blame those who create wealth to promote envy, hate and dependency.

Monetary debasement bloated the state

This model has been sustained by central banks that repeatedly cushioned governments and sovereign debt from the consequences of excess spending and irresponsible fiscal policies. Cross-central-bank data show that the Federal Reserve’s balance sheet peaked at $8.97 trillion in April 2022, the Eurosystem at €8.84 trillion in June 2022, and the Bank of Japan at ¥764.8 trillion in August 2024, equivalent at their peaks to 34.5 percent, 64.2 percent, and 125.8 percent of GDP respectively. Even in 2026, those balance sheets remain extraordinarily large relative to national output.

That is not neutral technocracy. It is a mechanism that penalizes saving, subsidizes debt, weakens price discovery, inflates financial assets by disguising the risk of sovereign debt, and quietly creates a transfer of wealth from savers, workers, and wages to the overly indebted governments. When the state spends too much and the central bank disguises the consequences, citizens are told they are being protected. However, they are being impoverished through currency dilution and asset inflation.

Artificial money creation is never neutral. It disproportionately benefits governments and owners of assets that can protect themselves from monetary inflation. At the same time, it always hurts real wages, deposit savings, and those with no assets. Politicians try to tell you that they can make the effect neutral through taxation, government transfers, and expropriation. However, it is only a trick to make workers and small earners more dependent on a state that never fulfills the promise of easy money, because impoverishment does not change course; it accelerates.

 Big government makes you poor and bigger government makes you poorer.

Socialism empowers elites, not citizens.

Socialism is often sold as a rebellion against privilege, but in practice it is one of the most effective tools ever designed to entrench it. The bigger the state, the more valuable political access becomes. The more interventionist the system, the easier it is for large incumbents, bureaucracies, and connected interests to dictate regulation, capture subsidies, suppress competition, and decide who receives favors.

That is why socialism is so attractive to elites. It allows them to speak in the language of compassion and humanity while building structures of dependency. It provides them moral cover for higher spending, higher taxes, more control, and more bureaucracy, even as those policies reduce productivity, punish work and investment, and trap millions in stagnation. The elite doesn’t suffer under socialism because they can store their wealth outside of the system, while those who vote for more government often wonder why they are worse off each time.

The answer to an inefficient and indebted state is not an even bigger one. More government, more taxes, and more interventionism will not solve what big government, rising taxation, and interventionist planning have already damaged. They will only cripple the economy further by reducing incentives to work, save, invest, build, and innovate.

The housing crisis is a good example. The OECD points to public policy choices such as land-use restrictions, zoning barriers, and supply bottlenecks as central drivers of affordability problems. However,  the socialist political answer is not to remove barriers and expand supply. It is to add more subsidies, more controls, and more layers of intervention that protect incumbents and deepen the distortions.

Young Americans are not living the failure of capitalism. They are living the cumulative failure of statism,  big government, eternal deficits, debt dependence, monetary interventionism, regulatory burdens, and tax systems that penalize work and capital. By the time the rhetoric of compassion gives way to the reality of misery, the socialist system is already built to punish the same citizens it claimed it would protect.

Prosperity and equality of opportunity require the opposite of socialism. It needs smaller and efficient governments, budget control, an open and free monetary system, lower barriers to innovation and businesses or housing supply, and a tax system that supports effort, saving, and entrepreneurship, not dependency, spending, and borrowing. Socialists know they cannot sell socialism by itself. No one would vote for them. All the examples of socialist central planned economies have failed miserably. They need to sell it by using fake examples- the Nordic countries- and disguised as a compassionate “improvement” of the current system in which you will not lose the growth and access to goods and services you have today, you just need to give even more power to politicians. The lie of not losing anything and only winning if you transfer more power to socialist politicians is always followed by stagnation, dependence, poverty, and repression.

Socialists always say, “true socialism has never been implemented,” which is obviously a lie. Socialism is not a great idea badly or incompletely implemented. It is a dreadful idea perfectly executed. The trap is set when the socialists finally persuade the population to embrace socialism. They take over institutions, create a dependent and submissive society and demolish democracy from within, while waving the banner of “democratic socialism”—which is an oxymoron, as socialism is always tyranny and control, not prosperity. However, by then, you cannot get out of it.

Blaming capitalism for the disasters produced by political interventionism is not a mistake; it is a strategy to sell the socialist trap.

Tyler Durden Mon, 08/17/2026 - 12:40

Swalwell Admitted To Fang-Banging 'Rusty Thumbs' Amid FBI Investigation Into Illegal Donations: Docs

The FBI spent months trying to turn a suspected Chinese intelligence operative into a confidential informant, then shut the effort down and opened a criminal investigation into the California congressman she had been sleeping with.

FBI files declassified by President Donald Trump and released by the White House Government Transparency Task Force detail the decade-old relationship between former Rep. Eric Swalwell and Christine Fang, known as Fang Fang (FBI codename 'Rusty Thumbs'), who the bureau assessed was likely operating on behalf of China's Ministry of State Security, Just the News reports.

The memos describe Fang cultivating Swalwell through sexual encounters, intern referrals into his congressional offices, and campaign contributions routed through American conduits to conceal her status as a prohibited foreign national. Investigators cleared Swalwell of criminal wrongdoing in 2017. Fang was never charged.

Among the findings:

• Scope of the Investigation: The FBI initially considered investigating Swalwell for bribery involving internship placements exchanged for campaign contributions, but ultimately narrowed the case to pursue criminal charges solely against Fang for conduit donation schemes.
• Swalwell's Admissions: Swalwell admitted to having a sexual relationship with Fang, allowing his staff to place her referred interns in congressional offices, and maintaining insufficient campaign finance controls to detect her alleged straw donations.
• Prosecution Decisions: The Department of Justice declined to prosecute Fang after she fled the country while the FBI interviewed her associates and searched her residence. Prosecutor Jack Smith oversaw early stages of the investigation.
• Informant Recruitment Attempt: Prior to opening the criminal probe under codename "Freshman Fifteen," the FBI assigned Fang the codename "Rusty Thumbs" and sought to recruit her as a confidential informant using an undercover agent and a front company.
• Assessed Intelligence Ties: FBI records from early in the case identified Fang's parents as MSS intelligence officers, assessed that Fang herself likely operated on the ministry's behalf, and described her targeting California politicians through networking and romantic relationships.

During FBI interviews in 2015 and 2016, Swalwell acknowledged meeting Fang during his initial 2012 congressional campaign and admitted to multiple sexual encounters with her. He confirmed that Fang referred several interns to his campaign and congressional offices, explaining that he treated her referrals as coming from the Asian Pacific Islander American Public Affairs (APAPA) organization.

Swalwell also disclosed concerns regarding internal campaign finance compliance, telling agents he previously warned a staffer at a 2014 Las Vegas fundraiser to improve reporting accuracy, admitting administrative paperwork was not the staffer's strength.

And, how could we not bring up the fact that after banging an alleged Chinese spy who placed interns in his office, Swalwell would go on to become one of the most aggressive public voices claiming Trump was compromised by Russia.

Axios first reported Fang's efforts to influence U.S. politicians in 2020, revealing that intelligence officials believed she targeted Bay Area politicians through networking, charisma, fundraising, and personal relationships - with Swalwell identified as a primary target.

Swalwell's office maintained that he cooperated fully with federal law enforcement, stating in 2020 that he provided information to the FBI years prior and ceased contact with Fang. The newly released FBI interview summaries confirm that Swalwell cooperated with investigators.

In March 2026, Swalwell's attorneys sent a cease-and-desist letter to FBI Director Kash Patel, demanding the bureau withhold the investigative files and threatening legal action. "The Congressman has never been accused of wrongdoing in that matter, and your attempt to release the file is a transparent attempt to smear him and undermine his campaign for Governor of California," wrote attorneys Norm Eisen and Sean Hecker.

The campaign referenced in that letter no longer exists. Swalwell suspended his gubernatorial bid on April 12 amid sexual misconduct allegations from several women, announced his resignation from Congress the following day, and left office on April 14.

FBI Identifies Fang as "Illegal Source of Campaign Contributions"

The FBI officially opened its investigation into Swalwell and Fang on March 17, 2014, under the codename "Freshman Fifteen." A declassified "Interim Authority" memorandum shows the investigation centered on allegations that Swalwell awarded congressional internships in exchange for campaign contributions, with Fang facilitating the arrangement through conduit donors.

According to the memo, Fang facilitated "a scheme to trade access to Swalwell and internships in his congressional office in return for campaign contributions," using illegal conduits to conceal her identity as a prohibited foreign national at least twice in 2013 and twice in 2014. FBI agents traced the 2013 contributions directly back to Fang.

Memos also document instances where Fang directly solicited contributions while offering reimbursement from her personal funds. In March 2015, an FBI Confidential Human Source (CHS) made a $1,000 credit card contribution to Swalwell's campaign at Fang's request as part of an authorized undercover operation. An FBI-302 summary also records that Fang asked a business associate to bring a checkbook to a 2014 Swalwell fundraiser, promising reimbursement; the associate declined.

Tyler Durden Mon, 08/17/2026 - 12:20

Trump Hails Mecca Defense Pact As 'Big, Bold, Important First Step'

Since the signing of a defense pact earlier this month by Saudi Arabia, Turkey, and Pakistan - which is being touted as having NATO level protections akin to an Article 5 style 'attack on one is an attack on all' - there's been much speculation on whether Washington would embrace or reject it.

After all, it seems to put greater distance between Saudi Arabia and Israel, and thus lessens the potential for Riyadh ever agreeing to join the US-backed Abraham accords, especially given that Turkey is an avowed enemy and regional rival of Israel. But the United States broke its silence on the pact this weekend, as President Trump on Sunday hailed it as a good and promising development.

"Very happy to see that Saudi Arabia, Turkey, and Pakistan have recently, and finally, signed the Mecca Joint Defense Agreement," Trump wrote on Truth Social.

Getty Images

"It shows how the Middle East is coming together and how countries will finally be able to defend themselves in a more meaningful way," he added, further hailing the agreement a "BIG, BOLD, IMPORTANT FIRST STEP."

Israeli media has meanwhile been pointing out that the pact is widely seen as a sign of waning US influence in the region, and that its members states see it fundamentally as a rejection of Israeli regional hegemony.

Pakistan’s foreign ministry has it was "intended to strengthen collective deterrence" - and affirmed that an attack one one member country would be seen as an attack on all, after Turkey already stated the same.

As for Trump's backing, he has of course long lambasted allies for not spending enough on their own defense while over-relying on American military resources, so his messaging in support of the Mecca pact seems to spring from this theme.

One Saudi-based analyst has said that this does not necessarily signal a Washington retreat from the Mideast region, in the context of the ongoing Iran conflict and Hormuz crisis.

"I don’t think the US is stepping back as such, but perhaps the limits of its military presence and its impact, as well as the associated liabilities, have been exposed quite significantly, compelling all regional actors to speed up their attempts to diversify their security linkages," said Umer Karim, an associate fellow at the Riyadh-based King Faisal Center for Islamic Research and Studies.

"The US will remain in the region, but perhaps in a manner where local partners increase their own contribution and align more closely to fill the gaps left by their near-total dependence on the US," Karim added.

Another key aspect to the new pact is that it further formalizes Pakistan's nuclear umbrella for Saudi Arabia, which lacks atomic weapons. Turkey does not have its own nukes either, but plays host to US nuclear weapons as part of NATO. Turkey maintains the second-largest military within the NATO alliance, behind the United States.

TRUMP: VERY HAPPY to see that Saudi Arabia, Turkey, and Pakistan have recently, and finally, signed the Mecca Joint Defence Agreement… Middle East coming together

‘WOW!’ pic.twitter.com/WJiTM6ZHKF

— RT (@RT_com) August 16, 2026

Pakistan and Saudi Arabia already have a bilateral defense pact, somewhat recently inked, which has lately seen Islamabad deploy 8,000 troops, a ​squadron of fighter jets, and an air defense system to Saudi Arabia.

The Saudi kingdom has lately been subject of sporadic 'retaliatory' attacks from Iran in the context of the war, and has earlier even responded by launching numerous unpublicized strikes on Iran.

Tyler Durden Mon, 08/17/2026 - 11:40

For The American Left, Nothing Succeeds As Much As Failure

Authored by Jonathan Turley,

Below is my column in The Hill on the familiar bust-and-boom cycle of socialism, where failure is used to call for even more radical changes. While House Minority Leader Hakeem Jeffries this week reaffirmed that Democratic Socialists are part of the Democratic Party, radical figures are demonstrating how extreme this agenda is for some. For example, Socialist State Assemblywoman Emily Gallagher has declared that stealing should be legal for those in need. If socialism takes hold in New York, many will indeed need five-finger discounts in the Big Apple.

From New York to California, the American left is proving that nothing succeeds like failure. In areas ranging from immigration to taxes to health care, politicians are playing to their past fiascos to push an even more radical agenda.

Take immigration.

Many, including the Democratic Socialists, have called for open borders or disbanding ICE. After the Biden administration chose to allow millions of undocumented people to enter the country, most Democrats are now calling for “pathways” to make them citizens. After all, they argue, there are too many to deport.

We now know the open border was a choice. The Trump administration immediately stopped crossings using the same laws Biden had refused to enforce. As expected, Democrats are expressing horror at the thought that the government would try to deport the millions that they allowed and even encouraged to enter the country.

The same is true on public health policy.

Remember when ObamaCare was going to reduce health care costs and improve health care options? While insisting that they did not want government-run single-payer healthcare, Democrats promised that ObamaCare would lower costs while allowing you to keep your own doctor and health care plan. During the 2008 presidential campaign, Barack Obama promised his plan would “lower your premiums by up to $2,500 per family per year.”

By that measure, ObamCare, or the Affordable Care Act, is a colossal failure. Premiums have nearly tripled since the law took effect, and deductibles have more than doubled. “The cost of coverage for a family of four has increased by more than $10,000,” according to studies.

In 2026 alone, median premiums increased by 20 percent, and that has already risen by another 15 percent in 2027. Meanwhile, enrollments continue to plummet across the country.

Democratic leaders and advocates are now responding to that failure by calling for more regulations and “Medicare for all.” As with immigration, the failure is the basis for doubling down on bad policy with even worse policy.

The same is also true of public education, which has failed families in major cities for generations.

The solution has been to increase budgets while lowering proficiency standards. The one thing teachers unions and school districts oppose is a market-based system that lets families choose between programs through voucher systems. The solution is, again, more staff, more funding and more control over families’ options. The system gets worse and more expensive, and the teachers unions get more powerful, including greater ability to block reforms.

No one has perfected the politics of failure more than Zohran Mamdani. In New York, chaos only undermines the status quo. For example, his demand for free buses has predictably led to thousands of commuters — including affluent citizens — skipping fares, costing the Metropolitan Transportation Authority tens of millions of dollars. After all, only a chump would pay a fare that is about to be eliminated.

As the transit budget implodes, the calls for greater state subsidies will only increase — as will calls just to accept the reality and make public transportation free to the user (and expensive to the taxpayer).

Then there is rent reform.

With Mamdani promising rent controls, landlords are predictably raising rents. Rent costs have reached their highest level ever under Mamdani, with the average apartment now costing $4,965 per month — and $6,655 per month in Manhattan.

So Mamdani can now push for even more significant regulations and rent controls by pointing to the rise in housing costs in an endless loop. As rent control inevitably constrains supply and prices for market-rate apartments skyrocket, he can call for even greater controls.

Failure can also solve problems through attrition. Mamdani was recently booed off stage at a law enforcement event in New York. The officers and their families are clearly upset with his embrace of figures calling for the defunding of police and his long hostility toward law enforcement. The result, however, is precisely the downsizing that many on the left have wanted. The NYPD has been losing as many as 300 officers a month.

What is true for police officers is also true for wealthy taxpayers. Mamdani has taunted affluent citizens with his new taxes and attacked them as not “paying their fair share.” As a result, the wealthy are fleeing New York and taking tax revenues and jobs with them.

Success through failure is especially evident in the housing policies. Mamdani has brought in socialists who called for “seizing the means of production” (as he has) and wiping out private ownership of housing.

Most recently, Mamdani has embraced figures such as Tracy Rosenthal, the privileged daughter of a well-known music industry figure who has refused to pay rent. Despite her family’s wealth, she has been effectively squatting on property. The co-founder of the Los Angeles Tenants Union and co-author of “Abolish Rent: How Tenants Can End the Housing Crisis,” Rosenthal is a darling of the far left. In New York, she declared that rent is “a ransom,” and “We pay rent at the peril of our need.”

Rosenthal portrays landlords as bloodsuckers and rallied the left to refuse to pay rent even though “if we don’t make this payment, our landlords can call on agents of state violence who can use physical force to throw us outdoors.”

Rosenthal has perfected not only the squatter culture but also the use of regulations to take effective control of properties. In allegedly squatting in California, Rosenthal reportedly pushed to get her building placed under the Housing Preservation Department’s Alternative Enforcement Program. Under that, a landlord must fix problems or risk losing the property.

Mamdani is pursuing a similar model. He has ramped up tenant coordination to bring complaints to his advocacy offices. As landlords are hit with snowballing complaints and costs, they can be forced to surrender their properties or have them seized by the city. The Mamdani administration wants those failures to result in tenant or non-profit ownership of businesses. What it will do is ensure that fewer rental units come on the market, making the problem worse and creating new excuses to take further harmful action.

This pattern of success through failure has manifested itself on an even larger scale in history. Socialists often destroy economic conditions, resulting in greater unemployment and greater demand for government subsidies. That expansion of government power continues until conditions grow so severe that emergency actions are needed.

In “Rage and the Republic” I discuss how this pattern played out in Great Britain and France in the last century, when socialist policies devastated those countries’ respective economies. Great Britain ultimately had to be rescued by the International Monetary Fund, as if it were a third-world nation.

This bust-and-boom cycle is now repeating itself. As these policies fuel decline in these areas, demand grows for expanding the policies and government controls. If McDonald’s were to offer ever-shrinking food items at ever-increasing prices, it would go out of business. Government is the only industry that grows with failure.

For radicals, social and economic upheaval is not a tragedy but an opportunity. Lenin told the Bolsheviks to “utilize” crisis to “hasten the collapse of the rule of capital.”

The future seems bright for the American socialists. After all, with just a little more failure, who knows what Mamdani and others can achieve in America.

Jonathan Turley is a law professor and the best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.“

Tyler Durden Mon, 08/17/2026 - 11:20

Kushner Holds Talks With Netanyahu On Gaza Peace Plan

Authored by Tom Ozimek via The Epoch Times,

U.S. special envoy Jared Kushner was meeting with Israeli Prime Minister Benjamin Netanyahu on Aug. 17 as Washington sought Israel’s support for a 15-point roadmap aimed at advancing President Donald Trump’s peace plan for Gaza.

Monday’s discussions were expected to focus on dismantling Hamas’s military capabilities, transferring civilian and security control in Gaza to a new Palestinian administration, and the conditions for an Israeli withdrawal.

The meeting follows Kushner’s talks on Sunday with senior Hamas official Khalil al-Hayya in Egypt, according to diplomatic sources who spoke to Reuters. It marks the second known direct engagement between Trump administration envoys and representatives of the U.S.-designated terrorist group.

Israeli sources separately confirmed to Epoch Magazine Israel that Kushner met with a Hamas representative in Cairo, although they did not identify the individual.

Hamas said in an official statement that a delegation led by al-Hayya had met under Egyptian sponsorship with mediators and guarantors of the Gaza ceasefire agreement. The statement did not identify Kushner or the other participants.

The group expressed hope that Trump “would continue his efforts to end the pain and suffering of our people and achieve security and stability for the region, as a supreme goal toward which everyone strives.”

Kushner previously met Hamas officials alongside U.S. envoy Steve Witkoff in October 2025, helping secure an agreement that led to a ceasefire in Gaza and the release of the remaining hostages seized during the Oct. 7, 2023 Hamas-led attack on Israel.

Israeli diplomatic officials previously told Epoch Magazine Israel that Kushner’s meeting with Netanyahu is intended, in part, to assess the gaps between the Israeli government and the Trump administration regarding implementation of the 15-point roadmap.

Netanyahu has publicly rejected parts of the Board of Peace proposal, which Israeli officials say conflict with aspects of the 20-point Gaza peace plan initially put forward by Trump and accepted by Israel last year.

Dispute Over Withdrawal

The central dispute concerns whether Hamas must surrender all of its weapons before Israeli forces begin withdrawing from Gaza.

Netanyahu raised objections to the Board of Peace roadmap earlier this month, saying Israel would not pull back from its current positions until Hamas had been fully disarmed.

He said the disarmament must cover all of the terrorist group’s weapons and must be genuine rather than “fictitious.” Netanyahu added that some U.S. proposals were acceptable to Israel, while others were not.

Israel currently controls about 60 percent of Gaza. Netanyahu has previously warned that Israeli forces could advance farther if Hamas fails to disarm.

A boy walks carrying a table on his back past salvage workers scrapping the rubble of a building that was destroyed during Israel's war against Hamas in Gaza, to use the recycled remains in the future, in Gaza City on Aug. 16, 2026. Omar Al-Qattaa/AFP via Getty Images

Trump said in late July that an agreement had been reached for the complete disarmament of Hamas and other armed groups in Gaza.

“Israel will have the security it deserves, with Gaza no longer used as a base for terror attacks,” Trump said in a post on Truth Social, adding that the Board of Peace had reached a “historic” agreement paving the way toward lasting regional peace and security.

Under the Trump-backed roadmap, Hamas would hand over its weapons to a Palestinian administration intended to oversee daily operations in the territory. An International Stabilization Force and a newly formed Palestinian police force would assume responsibility for security as Israeli forces withdraw in phases.

The plan also calls for dismantling tunnels, weapons depots, military production sites, and other terrorist infrastructure. Hamas and other armed factions would be excluded from governing Gaza.

The Board of Peace said in an Aug. 3 post on X that Israeli forces would not withdraw beyond the so-called Yellow Line until Hamas’s light and heavy weapons had been decommissioned and its tunnels dismantled.

Israeli officials have raised concerns that allowing the new Palestinian administration and the international force to enter Gaza before Hamas is fully disarmed would depart from Israel’s understanding of Trump’s original 20-point plan.

Hamas has expressed support for the roadmap, saying in the Aug. 16 statement that its approval for the plan “stems from the interest of our people and the desire to achieve a permanent ceasefire.”

Salvage workers scrap steel rods from the rubble of a building that was destroyed during Israel's war against Hamas in Gaza, to use the recycled remains in the future, in Gaza City on Aug. 16, 2026. Omar Al-Qattaa/AFP via Getty Images

The group said its approval of the roadmap for the second phase of the plan is “based on the interests of our people and our commitment to achieving a permanent ceasefire, the complete withdrawal of the occupation army from the Gaza Strip, ensuring urgent and sustained humanitarian relief, beginning the work of the administrative committee, reconstruction, and the remaining agreed-upon obligations.”

Hamas has accused Israel of failing to meet its obligations under the first phase of the cease-fire.

The foreign ministers of Saudi Arabia, the United Arab Emirates, Jordan, Pakistan, Indonesia, Egypt, Qatar, and Turkey issued a joint statement on Sunday calling on Israel to fully accept the roadmap while denouncing Israeli rejection of Palestinian statehood.

“Israel now bears responsibility for obstructing the efforts to bring peace in Gaza,” they said.

Board member Nikolay Mladenov speaks after the signing of a Board of Peace charter during the World Economic Forum meeting in Davos, Switzerland, on Jan. 22, 2026. Evan Vucci/AP

Board of Peace CEO Nikolay Mladenov described the negotiations as “slow, grinding and technical work” in an Aug. 3 post on X.

He added that he met with Netanyahu and his team in Jerusalem that day, describing the discussions as the “start of the hard phase.”

Tyler Durden Mon, 08/17/2026 - 10:40

Key Events This Week: FOMC Minutes, PMIs, Industrial Data; WalMart And Home Depot Earnings

While global equity indices are at or close to all-time highs, DB's Peter Sidorov writes that we’re seeing more challenging August crosswinds playing out in bond markets. Expectations for an imminent Fed rate hike have been pulled back, but this has been accompanied by a significant US curve steepening, with the backdrop of higher oil prices, elevated fiscal deficits, and demand for capital from the AI investment boom putting upward pressure on yields. The resulting long-end sell-off has also been a global affair, with 10yr OAT yields ending last week at their highest level since 2009 and the 30yr bund yields reaching a post-2011 high of 3.73% (see the full weekly recap at the end).

Bond markets could face further tests this week, with events including the flash August PMIs (Friday), minutes of the July FOMC meeting (Wednesday), as well as China’s monthly activity data a little later this morning. Meanwhile, this week’s 20yr Treasury auction (Wednesday) may become the most expensive Treasury bond issuance in the past 25 years – the current post-2001 high is a 5.245% yield at a 20yr auction in October 2023 and 20yr yields were 5.26% as of Friday.

That Fed pricing will be in focus with the minutes of the July FOMC meeting due on Wednesday. Given Chair Warsh has stepped back from offering policy guidance, the minutes may shed extra light on how the Fed is weighing inflation risks as well as their urgency to act should those risks remain elevated (narrator: "they won't"). Chair Warsh described the July discussion as a “good family fight” following the meeting, which saw three dissents in favor of a 25bps hike. While the minutes will be slightly stale after last week’s relatively tame CPI and PPI data, the +0.18% MoM reading our economists now foresee for July core PCE inflation still translates to a +3.2% YoY pace. So while the inter-meeting inflation data has likely reduced the urgency for imminent action by the Fed, they are far from providing sufficient confidence that inflation is trending back to the Fed’s objective.

Investors will also be watching the details of the FOMC discussion in the context of the sharp curve steepening we’ve seen since the July Fed meeting. The 2s10s slope has steepened by +20bps since July 28, its sharpest 13-session rise since the post-Liberation Day Treasury sell off last April.

Turning to this week’s data in more detail, the highlight will come with the flash August PMIs on Friday, including those for the US, Eurozone, Germany, France, UK and Japan. The resilience in economic activity data, including the PMIs, in the face of the Iran energy shock has been an important factor in supporting continued pricing of rate hikes across the major economies. Indeed, in July the composite PMI reached its highest levels since the start of the year in both the US and the Euro area.

In other events, we’ll have the latest Riksbank decision on Thursday, which is expected to keep rates on hold for an eighth consecutive meeting. Elsewhere in Europe, we’ll have the ZEW survey in Germany on Tuesday and the ECB’s July consumer expectations survey due Friday. For the latter, our own dbDataInsights survey suggests an uptick in short-term expectations but more stable medium-term ones. Otherwise, the UK will dominate the European data calendar, with the July inflation print on Wednesday, labor market data on Tuesday and retail sales on Friday. For the CPI print, our UK economists expect headline at 2.92% YoY and core CPI at 2.54%.

Before all that, the focus will be on China July activity data, including retail sales and industrial production, which will be out an hour or so after this hits your inboxes. The release comes as China’s domestic demand growth has been lackluster in recent months, putting the reflation that has emerged since late 2025 at risk. Underwhelming domestic growth has also contributed to the underperformance in China’s equity market, with the main indices essentially flat YTD, in contrast to a +13.7% rise for the S&P 500, +11.1% for the Stoxx 600 and +36.5% for the Nikkei.

Back to the US, where the earnings season begins to wind down...

... the spotlight will be on the US retailers Home Depot (Tuesday), Target, TJX (Wednesday) and Walmart (Thursday) to gauge the health of the US consumer. Other names to watch include Analog Devices and Deere in the US and Alibaba and Baidu in China.

Turning just to the US, the key economic data releases this week are the import prices report—because of its potential implications for core PCE—on Tuesday and the Philadelphia Fed manufacturing index on Thursday. There are currently no scheduled speaking engagements with Fed officials this week. The minutes to the FOMC’s July meeting will be released on Wednesday.

Monday, August 17 

• 08:30 AM Empire manufacturing, August (consensus 10.5, last 15.6)

Tuesday, August 18 

• 08:30 AM Import prices, July (consensus +0.1%, last +0.3%): The import prices report contains the remaining source data relevant to estimating July core PCE: the import price index for air passenger fares. Based on the details of last week’s CPI and PPI reports, we currently estimate that the core PCE price index rose 0.20% in July, corresponding to a year-over-year rate of +3.24%.
• 08:30 AM Housing starts, July (GS -8.0%, consensus -5.9%, last +19.0%): Housing permits, July (consensus +0.1%, last -2.6%); We forecast that housing starts declined by 8.0%, reflecting payback from last month’s outsized increase in multi-family housing starts.
• 09:15 AM Industrial production, July (GS +0.5%, consensus +0.3%, last +0.1%): Manufacturing production, July (GS +0.4%, consensus +0.2%, last flat); Capacity utilization, July (GS 76.2%, consensus 76.3%, last 76.1%); We estimate industrial production increased by 0.5% in July, largely reflecting strong auto and electricity production. We estimate capacity utilization edged up to 76.2%.
• 10:00 AM Pending home sales, July (GS flat, consensus +0.5%, last -5.4%)

Wednesday, August 19 

• There are no major data releases scheduled. 
• 02:00 PM FOMC meeting minutes, July 28-29 meeting : The run-up to the July FOMC meeting was unusually dramatic, with markets pricing a roughly 35% chance of a hike ahead of the meeting. But the meeting ended with no change to the funds rate, no substantiative changes to the post-meeting statement, and no policy guidance or explanation of the FOMC’s interpretation of the inflation situation. Presidents Hammack, Kashkari, and Logan dissented in favor of a 25bp rate hike. We had expected that most FOMC voters would not want to hike at the July meeting because the June inflation data showed substantial improvement relative to prior months. Many voters have said that they want to see sustained improvement in the inflation data and are open to raising rates eventually if necessary. While Warsh downplayed the role of the June CPI report during his press conference, we suspect that was the thought process for most of the other eight voters who preferred to leave the funds rate unchanged. We will look for details in the minutes on the assumptions underlying participants’ economic outlook and views of the balance of risks at the time. Since the meeting, the labor market and inflation data have looked softer.

Thursday, August 20 

• 08:30 AM Initial jobless claims, week ended August 15 (GS 210k, consensus 212k, last 209k): Continuing jobless claims, week ended August 8 (consensus 1,788k, last 1,777k)
• 08:30 AM Philadelphia Fed manufacturing index, August (GS 30.0, consensus 25.0, last 41.4)

Friday, August 21 

• 09:45 AM S&P Global US manufacturing PMI, August preliminary (consensus 53.9, last 53.9) 
• 09:45 AM S&P Global US services PMI, August preliminary (consensus 53.9, last 54.6) 

Source: DB, Goldman

Tyler Durden Mon, 08/17/2026 - 10:25

AI Pledge Allegiance To The Flag

By Bas van Geffen, senior macro strategist at Rabobank

As Bloomberg recounts that “the ceasefire is set to expire today,” there is little left of that truce to begin with. Negotiations have broken down. And over the weekend, Israel conducted new strikes in Lebanon, a bulk carrier that tried to leave the Strait of Hormuz was hit by a projectile, and Yemen’s port suspended operations after Houthi missile attacks.

Both sides are evaluating their options in the current stalemate. Iran’s hardline leadership is reportedly planning to widen the war, as they seek to raise the costs for the US and regional leaders. It may be their counterstrategy to the “unprecedented” economic sanctions that the US is threatening to impose on Iran.

Those sanctions could already be costly for the US. Bloomberg explored what this “economic isolation” of the country could look like, given that Iran is already the subject of a plethora of sanctions and a naval blockade. And most of them have some repercussions for the US too. The US’ strongest move might be to sanction Chinese banks that finance the trade in Iranian oil, but this will surely worsen US-China relations ahead of a scheduled Trump-Xi meeting.

And just by the conflict dragging on, the cost for the US increases. The Financial Times reports that US voters disapprove of most of Trump’s economic issues. The US president scores particularly bad on the cost of living, as most voters feel worse off due to higher inflation.

Washington has been trying to manage these costs through its strategic petroleum reserve, but that hasn’t stopped prices from going up. And, crucially, these reserves are finite. The SPR has fallen below 300 million barrels for the first time since it was filled in the 1980s. This adds to concerns about the integrity of the caverns – as experts are divided over the amount of oil that needs to remain to prevent structural damage to the storage sites.

Perhaps feeling that pressure, President Trump maintains that the war will be over soon, and that Iran will be “badly defeated.” Traders are not convinced: markets are dragging their feet at the open. This weekend, Trump added that he would declare the Strait of Hormuz United States territory “pretty soon.” Because “essentially, that’s what it is. We have the blockade. No ships get through unless we want them to.” The Guardian concludes that the “seriousness of [the] remark made in New York on Friday, and whether it signaled a new policy position, [is] not clear.”

That may be the case with many of his off-the-cuff comments, but their consequences can be severe. President Trump has previously threatened to withdraw military support for countries that do not invest in their own defense, or that do not align with the US on geopolitical or geoeconomic matters like trade.

As a case in point, President Trump expressed his discontent with South Korea’s lack of help in the Iran war. And on that basis, Trump ordered the Pentagon to “substantially reduce” the joint military drills with South Korea. He even indicated that he would have cancelled the exercise entirely if it hadn’t been too late for that – despite repeated warnings from US military intelligence that North Korea is gaining valuable experience by aiding Russia in its war against Ukraine.

Washington is preparing a similar carrot-and-stick approach in the field of artificial intelligence. The US wants to force countries to pick a side in the AI-race with China. Any country that signs a deal with Beijing could be cut off from the US’ AI coalition. The draft policy is an extension of the Pax Silica agreement, which was designed to improve the US’ access to critical resources and to strengthen supply lines for semiconductors.

Various countries have already joined the US agreement, which is not binding. China has since launched a rival alliance, causing Kazakhstan to effectively be a signatory to both frameworks. That’s a concern for the US, primarily because the country has a cache of critical minerals. But Washington also wants to prevent that its rivals get access to its frontier AI models and research.

So, the Trump administration may soon send out letters telling its allies to pledge allegiance to the flag – or be cut off from US technologies. It’s a reminder that gross domestic compute is becoming an increasingly important element of strategic autonomy and the power a country can project on the global stage.

The EU, positioned right on the US-China fault line, is still trying to navigate the increasing rupture between the two blocs. Last year, Brussels reluctantly signed a trade deal with the US, to prevent worse. Part of that deal includes a pledge to increase investments in American production facilities. However, whether that materialises is up to private companies, The German economic institute IW calculated that companies cut their US-bound FDI by two thirds in the first half of 2026, to the lowest level since 2023. This reluctance to invest may be entirely due to the uncertainty about US-EU trade relations and the overall economic outlook. Yet, it may put Europe in Trump’s crosshairs again.

Tyler Durden Mon, 08/17/2026 - 09:50

China Economic Growth 'Downside Risk' Looms; Goldman Warns After July Macro-Miss-Fest

China’s July activity data weakened from June, missing market expectations across the board, and signaling a soft start to Q3 amid continued divergence between resilient exports and subdued domestic demand.

Originally slated for publication late last night (US time), the data release was delayed for five hours after the statistics agency revised its schedule in a break with recent practice.

Industrial production (IP) growth slowed to 4.5% yoy in July from 5.3% yoy in June, reflecting slower export growth and weaker output growth in ferrous metals smelting, power generation (fell 0.1% y/y to 943.9b kwh), and pharmaceuticals industries.

In sequential terms, IP contracted 0.3% mom non-annualized in July (vs. +1.0% mom non-annualized in June), broadly consistent with last year’s pattern of softer quarter-start momentum.

One stand out from Chinese steel production tumbled last month, putting the industry on track for the lowest annual total this decade as mills adjust to much weaker demand.

The seasonal lull in consumption has been compounded by worsening conditions in the wider economy.

The contraction in construction activity has deepened, according to the latest purchasing manager index, while fixed-asset investment has fallen dramatically, the data from the statistics bureau showed.

Fixed asset investment (FAI) growth fell to -12.8% yoy in July from -9.3% yoy in June on a single-month basis despite a low base, as unfavorable weather and slow government spending continued to weigh on investment activity.

Property activity remained sluggish in July despite recent green shoots in some large cities. Property sales fell 13.5% yoy in volume (floor space) terms and 8.8% yoy in value terms in July (vs. -14.2%/-13.9% in June). Growth in new home starts and floor space under construction weakened to -27.8% yoy and -12.7% yoy, respectively, in July from -26.0% and -12.5% in June. New home completions remained soft at -18.7% yoy in July, though less negative than -25.0% yoy in June. NBS and private-sector data suggest nationwide home prices remain under downward pressure, even as some large cities show early signs of stabilization.

Retail sales growth eased to +0.6% yoy from +1.0% yoy in June despite favorable base effects, mainly dragged down by goods sales.

Labor market indicators were broadly stable and in line with seasonal patterns in July. The nationwide and 31-city unemployment rates, both not seasonally adjusted, edged up to 5.2% in July from 5.0% in June. On a seasonally adjusted basis, we estimate both rates were unchanged from June at 5.1%.

Finally, the Services Industry Output Index - which is reported in real terms and closely tracks tertiary GDP growth - also slowed to 4.3% yoy in July from 4.7% yoy in June.

Societé Generale SA economists including Wei Yao said the country’s growth momentum is “collapsing” outside tech.

“China’s economic data continue to disappoint, with an increasingly K-shaped pattern: strong tech, weakness almost everywhere else,” they said in a report.

In a stunningly honest statement, the NBS said that while the economy has remained “stable” so far this year, the external environment is “complicated and volatile” and domestic demand has stayed weak.

“Some companies are facing operational difficulties, and the foundation for the economy to stabilize and improve still needs to be consolidated,” it said in a statement accompanying the data release.

Finally, July activity data combined with Goldman's high-frequency tracker for the first half of August suggest a soft start to Q3 - unfavorable weather conditions (e.g., recent Typhoon Dolphin) and the ongoing global energy shock continue to weigh on activity, while government spending has yet to pick up meaningfully despite stronger easing signals from the July Politburo meeting.

“Economic momentum slowed further in the early third quarter ahead of the late-July Politburo meeting, with all major July indicators falling short of even our low expectations," said Bloomberg's Chang Shu and David Qu.

"On the demand side, private consumption softened modestly, while the contraction in investment deepened sharply. This suggests fiscal spending has yet to pick up from its sluggish pace in the first half.” 

Against this backdrop, Goldman sees downside risk to their Q3 real GDP growth forecast of 4.6% yoy (vs. 4.3% yoy in Q2).

They continue to expect the government to accelerate the pace of bond issuance and proceeds spending in coming months, speed up implementation of the new policy-based financial instrument, and keep the door open to additional easing later this year if growth slows further and the full-year growth target of “4.5-5.0%” comes under pressure.

Professional subscribers can read Goldman's full note here at our new Marketdesk.ai portal

Tyler Durden Mon, 08/17/2026 - 09:20

Futures Rise On Fresh Push Higher In Tech

Futures are higher again, just a few basis points away from a new all time high, led by Tech as the week starts with Semis / Memory / AI themes bid globally, as small-caps are fractionally in the red. As of 8:00am ET, S&P futures are 0.1% higher, while Nasdaq futures climb 0.5% after strong revenue growth at Anthropic helped boost optimism around artificial intelligence and bolstered the view that massive spending on artificial intelligence will be sustained. Semis, Memory, and Mag7 are all higher with Software down. Cyclicals are mixed with Indu / Mats leading Fins / Discretionary, but the cohort is lead Defensives, which are dragged by HC and Staples. It is a light macro week so the positive Tech inertia may continue into NVDA earnings next week. Bond yields are flat to down 2bp as the yield curve bull steepens; higher yields remain a risk with Fed Minutes this week and Jackson Hole next week. USD continues to its decline touching a three-month low as rate hike odds faded, while commodities are bid up with strength across the 3 complexes. Crude prices appear to be holding in a range on increased cover flows in the MidEast and weaker Chinese demand. In metals, copper, silver, and palladium are the standouts. US economic data calendar includes August Empire manufacturing (8:30am), NAHB housing market index (10am) and June TIC flows (4pm). No Fed speakers scheduled for the session.

In premarket trading, Mag 7 stocks are mostly higher (Amazon +1.2%, Alphabet +0.5%, Nvidia +0.6%, Apple +0.3%, Tesla +0.1%, Meta Platforms -0.2%, Microsoft -0.7%)

• AI-linked stocks are rising after Anthropic PBC told prospective investors that its preliminary second quarter revenue was $11.5 billion, an at least 14-fold increase versus the same period a year ago. Marvell Technology (MRVL) +2%, Applied Optoelectronics (AAOI) +2%, Sandisk (SNDK) +4%
• Diana Shipping (DSX) is up 9% after the company pulled its offer for all the outstanding shares in Genco Shipping & Trading it doesn’t already own. The company said that Genco’s board had unrealistic price expectations.
• EyePoint (EYPT) said its experimental treatment for an eye disease failed to meet its primary goal in a late-stage trial. After being halted shares resumed lower by 66%
• L3Harris Technologies (LHX) slips 3% after the defense contractor replaced Chief Executive Officer Christopher Kubasik over conduct that “was not consistent with the values of the company.”
• Macy’s (M) is up 2% after Berkshire Hathaway disclosed a stake in the company in a filing.
• Target Hospitality (TH) gains 3% after Morgan Stanley started coverage on the provider of modular housing with an overweight rating, saying the company is poised to benefit from an AI buildout that is increasingly rural.

AI-linked stocks are reasserting their leadership after a volatile July that saw investors rotate into economically sensitive sectors. Fresh evidence of surging demand for the technology came from Claude chatbot maker Anthropic whose Q2 revenue jumped at least 14-fold from a year earlier, Bloomberg News reported late Friday, largely on the back of the new faded tokenmaxxing craze. The Claude chatbot maker posted preliminary revenue of more than $11.5 billion, plus positive adjusted operating income. In other AI news, Alibaba’s open-weight models have accumulated more than 3 billion global downloads in the past six months, eclipsing Meta, Alphabet and domestic peers to become the world’s No. 1 AI model.

AI infrastructure stocks, rather than adopters, have so far driven market performance because of limited visibility about which companies will be able to turn investments into tangible gains in productivity and earnings, according to Goldman strategists. On the subject of earnings, Big Tech is powering profits for corporate America, with S&P 500 Index EPS rising 31% in the second quarter from a year earlier, the strongest gain outside of recoveries from major recessions in Bloomberg Intelligence data going back to 1992.

“We continue to see strong risk appetite among institutional investors, particularly in areas where earnings are strongest, such as US equities and technology,” said Marija Veitmane, head of equity research at State Street Global Markets.

More broadly, reasons to be wary about stocks are quickly disappearing and a Goldilocks scenario looks increasingly likely — which is why it’s a perfect time to hedge against a market priced for perfection, notes today’s Taking Stock. Equity dispersion continues to drop, closing last week at the lowest level since early April, while financial conditions continue to track the most accommodative levels in 30 years.

Behind the bullish metrics lies the potential for instability, with the market having recently seen a sharp reversal from a broad bid for index volatility and skew to a FOMO-fueled demand for upside calls.

In other assets, spot Bitcoin ETFs recorded their largest outflows since the end of June, with a net $389.7 million drained in the week of Aug. 10. Covert oil flows out of the Persian Gulf are helping keep global prices in check, while copper is heading toward a record high on the LME as supply tensions build.

The health of US consumers will be in focus this week when retailing giants such as Walmart Inc. and Home Depot Inc. report earnings. Recent data showed spending cooled in July after a strong first half, while households are also getting concerned about worsening business conditions and rising inflation.

“Any signs of stress in the outlook, against a backdrop of slower hiring and higher borrowing costs, could challenge the resilient growth narrative,” said Laura Cooper, global investment strategist and head of macro credit at Nuveen.

Minutes of the Federal Reserve’s July monetary policy meeting could also attract interest. Traders have pushed back expectations for the next quarter-point Fed hike to January, though bond investors are also growing worried about heavy government borrowing and persistent fiscal concerns.

“The recent run of softer economic data has reduced the urgency for near-term tightening, so the minutes may carry less weight,” Cooper said. Still, “in a regime of the Fed keeping their cards close to the chest, any signals could be of outsized importance.”

The latest 13F filings show how one-sided AI long positioning was into July’s rout. As markets recover, the next 13F season will be a fascinating conviction test, notes Bloomberg’s Anthony Stephens. Other filings reveal Berkshire Hathaway increased its holdings in Delta Air Lines and Alphabet during the second quarter, mining tycoon Gina Rinehart bought eight million shares of SpaceX and Third Point exited Meta and Nvidia.

It’s a light macro and corporate tape to start the week, but further out traders will eye more clues on the state of the consumer with earnings from Walmart, Home Depot and Target in the coming days. Fed meeting minutes are also on the way this week, along with PMI readings in the US and across Europe.

In Europe, the Stoxx 600 rises 0.1%, with miners and tech outperforming as rising copper prices lifted miners while chip stocks gained after Anthropic reported a strong revenue surge for the second quarter. Here are the biggest movers Monday:

• Chip stocks were among the top gainers in Europe on Monday after Anthropic reported a strong revenue surge for the second quarter, while software stocks slipped across the board
• Argenx jumped as much as 10%, the most in more than a year, after the company announced positive late-stage trial results for its experimental myositis treatment
• Thungela Resources shares jumped as much as 12%, the most since March, after the coal mining company reported interim results showing significant earnings growth from a year earlier
• Accelleron gained as much as 10%, the most in more than five months, after Berenberg said the turbocharger manufacturer’s current growth cycle is stronger and more durable than previously modeled, and upgraded to buy
• Sandoz shares climbed as much as 3.5% to a record high after the Swiss maker of generics and biosimilar drugs announced a collaboration agreement with Shanghai Henlius Biotech. ZKB says the deal underlines the company’s “strong position in the global distribution of biosimilars”
• SIG shares fell as much as 27%, the most since the company’s 2018 IPO, after it said in a statement it had appointed Ann-Kristin Erkens as its new CEO, replacing Mikko Keto

Asian stocks advanced at the start of the week as semiconductor stocks gained for a sixth straight session. The MSCI Asia Pacific Index rose 0.4%, led by Kioxia, Tencent and Alibaba, after dropping as much as 0.2% earlier in the session. The benchmarks in China, Taiwan and Hong Kong climbed, while an Asian semiconductor gauge advanced 1.4% to extend its longest win streak since June 22. With AI-bellwether South Korea shut for a holiday, regional tech stocks showed renewed strength following a robust US earnings season, Anthropic’s second-quarter report, and the unwinding of leveraged bets. The China Star 50 Index rose more than 4% and Hang Seng Tech Index gained the most this month. Japan’s benchmark Topix snapped an eight-day win streak, after data showed economic growth unexpectedly slowed in the three months through June. Thai stocks climbed after its second-quarter GDP rose 1.9% from a year earlier, faster than the 1.8% median estimate in a Bloomberg survey but slower than 2.8% growth in the first quarter. Alibaba gained 1.9% in Hong Kong after disclosing a deal to sell its gaming arm and touting claims of more than 3 billion downloads for its open AI model. Meanwhile, margin balances in China and Korea have returned to 2025 levels and are rising again as sidelined funds re‑enter the market, Marvin Chen of Bloomberg Intelligence wrote in a note. 

“Technology stocks strengthened, while the decline in their day-to-day volatility is encouraging investors who had stepped back from the sector to selectively re-enter,” said. Rajeev De Mello, a global macro portfolio manager at Gama Asset Management.

In FX, the selloff in the greenback extends with the Bloomberg Dollar Spot Index down 0.3% after earlier falling to its lowest level since mid-May.  USD/JPY fell as much as 0.6% to 158.60, it recovered to trade at 159.37 in the New York afternoon, holding close to the closely watched level of 160. There’s a less than 30% chance that the Fed will raise its policy rate in September, down from about 70% odds at the end of last month, according to overnight-indexed swaps. The Aussie and Swiss franc are outperforming against the greenback, each rising 0.5%.

In rates, treasuries price action is steady over Asia, early London with front end outperforming slightly, steepening curves. WTI futures and stocks trade slightly higher on the day, follows fresh fighting in Lebanon while Washington prepares new economic measures against Iran.  US 2-year yields outperform, trading richer by 1bp on the day while rest of the curve is little change vs. Friday closing levels. Steepening of curve sees 2s10s and 5s30s trade wider by 1bp and 1.2bp on the day. US 10-year yields trade unchanged around 4.69% with gilts outperforming by 1.2bp in the sector. IG dollar issuance slate includes a couple of deals. Dealers estimate around $20 billion in new deals this week, with the bulk of issuance expected to be front-loaded. Gilts lead modest gains in European government bonds. Treasury auctions this week include $16 billion 20-year bonds (Wednesday) and $8 billion 30-year TIPS (Thursday). 

In commodities, Brent crude futures rise 0.8% to around $89 a barrel. Precious metals climb, with spot silver up over 1%. WTI futures trade up around 0.4%, just off session highs with S&P futures up around 0.15% vs. Friday close. 

US economic data calendar includes August Empire manufacturing (8:30am), NAHB housing market index (10am) and June TIC flows (4pm). No Fed speakers scheduled for the session

Market Snapshot

Top Overnight News

• Trump Threatens to Bomb Oman If It Gets in Way of US: Fox 
• Fighting between Israel and Iran-backed Hezbollah in Lebanon over the weekend marked the latest setback in efforts to end parallel conflicts in the Middle East: BBG
• Trump orders Pentagon to scale back joint exercises with South Korea: RTRS
• North Korea denounces upcoming US-South Korea drills, vows stronger nuclear deterrence: RTRS
• Top US commander visits aircraft carrier, Gaza talks in Egypt and other Mideast news: AP
• US pulls last aircraft carrier in Asia as Trump focuses on Iran and the Western Hemisphere: AP
• Trump’s Venezuela Fixer Is Promoting ‘America First’ Oil Deals: BBG
• Iran says two French embassy employees barred from returning: RTRS
• China’s economy got off to a sluggish start in the second half of the year, reviving pressure on policymakers: BBG
• Alphabet is looking to raise about A$5 billion ($3.6 billion) in what would be its debut bond offering in Australia: BBG
• Trump crypto firm backs venture offering AI from restricted Chinese companies: RTRS
• Jane Street Lost $15 Billion in Its First Down Month in a Decade: BBG
• US to tell partners they must pick sides in AI race with China: RTRS
• Goldman Sachs said market bets on Federal Reserve interest-rate hikes are still too aggressive: BBG
• Binance gave Moscow client details used to charge Russian over Ukraine donations: RTRS
• Copper Squeeze Builds With Spreads Surging and Price Near Record: BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the week mixed, albeit with a mostly positive bias, following a quiet weekend of macro newsflow and amid geopolitical uncertainty as the 60-day US-Iran ceasefire is set to expire. Participants also digested a deluge of earnings and the latest data releases, while markets in South Korea are closed in observance of Liberation Day. ASX 200 was subdued as weakness in consumer discretionary, financials and real estate offset the gains in miners, resources and materials, while there is a slew of earnings releases, including 'big 4' bank NAB, which posted higher profits but noted cooling home loan demand. Nikkei 225 price action was choppy following disappointing GDP data, which could support the argument for the BoJ to refrain from hiking rates next month, although money markets are still leaning towards the central bank resuming rate increases at the September conclave. Hang Seng and Shanghai Comp were positive amid a slew of earnings and with the advances in Hong Kong led by chipmaker SMIC, while platform companies such as JD.com and Alibaba were also underpinned, with the latter helped by the sale of its gaming arm and news its AI models hit 3bln downloads.

Top Asian News

• China's NBS said the external environment remains complex but they are going to continue expanding domestic demand, however some firms face operating difficulties. Additionally, NBS said the country has solid conditions to achieve its annual growth targets.

European bourses start the week mixed but in light volumes, given the Summer lull. Not much in terms of drivers to give a clear direction, with weekend geopolitical newsflow light. The 60-day US-Iran MoU deadline expires today, although the expiry does not automatically trigger a resumption of hostilities. Iran's Foreign Ministry held its weekly press conference, in which they said no talks have begun due to Washington's violation of the MoU, while stating that talks with Oman continue. Sectors highlight the mixed picture. Basic Resources outperform, given the lift in 3M LME copper prices to new ATHs, while Tech is supported following reports from Bloomberg that Anthropic reported Q2 revenue of over USD 11.5bln (prev. 0.79bln Y/Y). To the downside is Optimised Personal Care, Food Beverages & Tobacco and Retail

Top European News

• JPMorgan (JPM) CEO Dimon reportedly warned UK Chancellor Healey against creating a more hostile tax environment for banks, the FT reported. Dimon said that higher taxes drive jobs away, using the decline in financial roles in New York as an example, the report added.
• Fitch affirmed the UK at ‘AA-‌’‌; outlook Stable.

FX

• Continued USD weakness throughout the morning saw DXY fall to a 99.30 trough, its lowest since 5th June, while EUR/USD eclipsed the 1.16 mark, not seen since 17th June. The move was gradual and over the course of roughly an hour, the initial downticks without a driver, but later weakness seen around remarks from the Iranian Foreign Ministry which signalled commitment to the diplomatic process; remarks which also modestly weighed on Brent at the time. Analysts expect the USD weakness to continue, ING suggesting the USD can “probably trade to the soft side all week”, while others highlight the soft July data series; for now, DXY -0.2%, the level to watch below is the 200 DMA just below 99.20.
• Action elsewhere is very quiet, G10s mostly move in tandem with USD weakness.
• GBP/USD +0.2%, off the back of the weaker USD with UK catalysts light, Cable trading just above 1.3560, above all significant DMAs. Over the weekend, FT reported that Jamie Dimon warned the Treasury against raising bank taxes, a report which highlights the proximity of the Autumn budget. GBP is primed for a busy week of data, Tuesday sees Jobs data, Wednesday is inflation, Friday is Retail Sales.
• Low yielders are among the best performers as some likely carry USD positions unwind. USD/CHF -0.4%, testing the 50 DMA, USD/SEK -0.4% ahead of the Riksbank this week. High-beta currencies are also doing well on the back of easing Fed expectations which has helped the risk environment; markets now assign a 30% probability of tightening in September, last week was c. 50%.

Fixed Income

• Fixed benchmarks are trading mixed this morning, with USTs (+2+ ticks) around recent lows, whilst Bunds (-8 ticks) move a touch lower. As it stands, USTs hold towards the upper end of a 108-16+ to 108-24+ range. Macro newsflow was lacklustre over the weekend, with focus ultimately on the expiration of the US-Iran MoU, which is set to occur today. Whether there is a fresh round of hostilities remains to be seen, but the risk remains (a full piece and scenario analysis can be found on the board at 07:05 BST).
• As it stands, US yields are lower across the curve, with mild underperformance in the front-end/belly of the curve; a continuation of the action seen last week following the soft US data. ING opines that the 10yr yield could be subject to upward pressure for some time, citing fiscal deterioration and continued focus on the JPY intervention story. The Dutch bank concludes by writing that “we see yields still gravitating more toward the upper end of the recent range”. For reference, the 10yr hit a high of 4.73% on 11 August vs current 4.67%.
• Key US data is lacking for the remainder of the day, and in fact for the remainder of the week. The FOMC Minutes of the July meeting will provide a better understanding of how policymakers are thinking about the policy rate ahead of the September meeting; as it stands, money markets assign a 26% chance of a hike next month.
• Bunds are trading with very mild losses this morning, whilst Gilts are flat. The lack of macro newsflow and pertinent European/UK data has led to tentative action so far, but a slew of UK data is dotted throughout the week, which will be key in determining BoE pricing. As it stands, money markets assign a 24% chance of a hike in Sept, and fully price in a 25bps hike by year-end. On the fiscal side of things, JPMorgan’s Dimon warned the UK Chancellor against raising bank taxes and creating a more hostile tax environment for banks.

Commodities

• Energy futures are mostly subdued within recent ranges with a lack of notable geopolitics from over the weekend, and with the US-Iran MoU effectively lapsing today (full analysis on the Newsquawk board). Briefly, the 60-day US-Iran Islamabad MoU expiry does not automatically trigger a resumption of hostilities. Iran argues there is no ceasefire left to extend because the US already violated the agreement, while there is currently no confirmed deal to extend or replace the MoU. The key market focus is on whether the expiry results in renewed negotiations, additional US sanctions, further military escalation or progress towards reopening the Strait of Hormuz. The morning saw commentary from the Iranian Foreign Ministry which reiterated recent comments but prompted modest losses in the complex as Tehran said talks with Oman are ongoing.
• WTI and Brent trade higher by 0.40-0.80/bbl intraday, with the former within a USD 80.80-82.16/bbl range, and the latter in a USD 88.01-89.40/bbl range. WTI sees slightly deeper losses than Brent, with the Baker Hughes rig count on Friday pointing to expanding US drilling activity. Elsewhere, Dutch TTF bucks the trend with some gains as demand props up prices as Europe refills winter storage. Dutch TTF is firmer by some 1.5% intraday and resides just above EUR 62/MWh after finding resistance around EUR 63/MWh earlier.
• Precious metals are supported by subdued energy prices, in turn weighing on inflation expectations and thus the Dollar. Spot gold topped its 100 DMA once again (USD 4,386/oz) and resides in a current USD 4,367-4,416/oz range after topping Friday’s USD 4,397/oz peak, and vs last week’s USD 4,449/oz high. Spot silver trades towards the upper end of a USD 65.60-66.22/oz range, vs last week’s USD 66.80/oz peak.
• Base metals are similarly propped up, with 3M LME copper hitting record highs of USD 14,387.60/t (vs intraday USD 14,164.33/t). Another supporting factor for base metals could be the downbeat, delayed Chinese Activity data, which printed worse-than-expected across the board and further raises the argument for more stimulus from Beijing.
• At least 2 Asian refiners have asked Saudi Aramco if they can take their oil cargoes from Egypt's Sidi Kerir port, instead of through Yanbu, Bloomberg reported.

Geopolitics: Middle East

• US President Trump’s son-in-law Jared Kushner met with Hamas leaders in Egypt to discuss a Gaza peace deal, while it was reported by Axios that the meeting was said to be very productive and Hamas leaders reaffirmed their commitment to disarmament and demilitarisation of the Gaza Strip.
• Iranian Foreign Ministry said that the MoU signed with the US does not stipulate a 60-day deadline and that no talks have begun with the US due to violations. The Ministry added that there are ongoing contacts with Qatar, which is playing an influential role in de-escalation efforts. On talks with Oman, they said talks are ongoing but that they are long due to the complexity of the subject, multiple actors involved and countries seeking to undermine the process.
• Iranian Foreign Minister Araghchi said Iran had not decided to resume talks with the US, and that Washington must meet conditions on the strait in order for shipping to resume in the waterway, according to an interview with Shahrara News.
• Iranian Deputy Foreign Minister Gharibabadi said the Strait of Hormuz will be opened and closed only under Iran's command, while he warned that as long as the US does not accept the reality of defeat and stop indulging in fantasies, Iran will continue to enforce the blockade.
• IRGC senior commander said though Iran's military actions have remained strictly defensive since the outbreak of hostilities, the armed forces are fully prepared to adopt an offensive posture if necessary, while he cautioned adversaries to expect strategic surprises.
• A high-ranking source said that Bab al-Mandab is closed to Saudi ships in both directions, adding that the "blockade-for-blockade" policy remains in place and will continue, Arabic TV reported.
• Kurdistan Regional Government (KRG) security said two drones attacked the KRG PM's office and the residence of the head of the Protection Agency, adding that the attacks were launched from Iranian territory and no casualties were reported.
• Iran and Oman seem to be moving closer to reaching an agreement regarding management of the key waterway, despite increasing ship attacks, while a finalisation of the shipping map is said to form part of a wider accord to govern shipping through the strait.
• Only five commodity vessels transited through the Strait of Hormuz on Saturday and none on Sunday, according to shiptracking data from Kpler.
• Qatar's PM spoke with Jordan's Foreign Minister and discussed diplomatic efforts aimed at easing regional tensions.
• Israel conducted artillery attacks on the city of Mansouri in southern Lebanon.
• Yemen conducted strikes on Saudi-linked mercenary targets in Mokha and Marib, destroying weapon depots and command facilities, according to Tehran Times citing a statement on Saturday.
• Yemeni government forces said Houthi militias launched a new attack with two missiles in Bab al-Mandab.

Geopolitics: Russia-Ukraine

• EU foreign policy chief Kallas announced plans to introduce the most extensive sanctions package against Russia since the beginning of the war in the coming months.
• Ukraine's Naftogaz said production has been lost following Russian attacks.

Geopolitics: Other

• US President Trump posted "Based on my very good relationship with Kim Jong Un, of North Korea, I am not happy with the fact that the United States has, long ago, agreed to participate in Joint Military Exercises with South Korea.... Therefore, and based on the fact that it is too late to cancel, I have instructed Secretary of War, Pete Hegseth, to substantially reduce the Joint Military Exercises!"
• South Korean President Lee called for a sit-down with North Korea to pursue peaceful coexistence and wants to transform the Korean peninsula’s unstable armistice into a peace regime.

US Event Calendar

 

DB's Jim Reid concludes the overnight wrap

As we enter the second half of August, you’ll have Henry and I for company over the next couple of weeks as Jim makes his regular summer trip to the Alps. Many market participants, including Jim, will have been happy to see some signs of a summer lull emerging last week, as the VIX volatility index fell to a 2026 low on Friday.

However, while global equity indices are at or close to all-time highs, we’re seeing more challenging August crosswinds playing out in bond markets. Expectations for an imminent Fed rate hike have been pulled back, but this has been accompanied by a significant US curve steepening, with the backdrop of higher oil prices, elevated fiscal deficits, and demand for capital from the AI investment boom putting upward pressure on yields. The resulting long-end sell-off has also been a global affair, with 10yr OAT yields ending last week at their highest level since 2009 and the 30yr bund yields reaching a post-2011 high of 3.73% (see the full weekly recap at the end).

Bond markets could face further tests this week, with events including the flash August PMIs (Friday), minutes of the July FOMC meeting (Wednesday), as well as China’s monthly activity data a little later this morning. Meanwhile, this week’s 20yr Treasury auction (Wednesday) may become the most expensive Treasury bond issuance in the past 25 years – the current post-2001 high is a 5.245% yield at a 20yr auction in October 2023 and 20yr yields were 5.26% as of Friday.

The higher yield story is also playing out in Asia this morning, with 10yr JGB yields trading +3.3bps higher to a post-1996 high of 2.93%. That increase comes even as this morning’s GDP data showed Japan’s economy expanded by a slower-than-expected +1.1% annualised in Q2 (vs +2.0% expected, +1.9% previous). The slowing came amid disappointing domestic activity, as business investment fell by -1.2% QoQ, while private consumption saw zero growth (vs. +0.4% exp.). Next in focus will be the national CPI release on Friday, but for now markets are still pricing a 79% chance of a BoJ hike in September.

Following Japan’s GDP data, the Nikkei (+0.30%) is slightly higher but underperforming gains in China’s markets including the CSI 300 (+0.76%) and Shanghai Composite (+0.84% ) as well as the Hang Seng (+1.61%) in Hong Kong. Equity futures are also advancing, with NASDAQ futures (+0.35%) leading those on the S&P 500 (+0.10%) and Europe’s Stoxx 50 (+0.30%) this morning. In other markets, Brent crude (+0.09%) is little changed at $88.60/bbl this morning in the absence of material weekend news around Iran, after a +5.95% rise last week, including +1.67% on Friday as Trump suggested he’d put more pressure on Iran’s economy. Meanwhile, 10yr Treasury yields (-1.2bps) are slightly lower this morning after last week’s sell-off. Fed fund futures are pricing just a 30% chance of a September rate cut as I type, continuing the pullback that started following the softer July jobs report on August 7 and persisted with the fairly sanguine CPI and PPI prints last week.

That Fed pricing will be in focus with the minutes of the July FOMC meeting due on Wednesday. Given Chair Warsh has stepped back from offering policy guidance, the minutes may shed extra light on how the Fed is weighing inflation risks as well as their urgency to act should those risks remain elevated. Chair Warsh described the July discussion as a “good family fight” following the meeting, which saw three dissents in favour of a 25bps hike. While the minutes will be slightly stale after last week’s relatively tame CPI and PPI data, the +0.18% MoM reading our economists now foresee for July core PCE inflation still translates to a +3.2% YoY pace. So while the inter-meeting inflation data has likely reduced the urgency for imminent action by the Fed, they are far from providing sufficient confidence that inflation is trending back to the Fed’s objective.

Investors will also be watching the details of the FOMC discussion in the context of the sharp curve steepening we’ve seen since the July Fed meeting. The 2s10s slope has steepened by +20bps since July 28, its sharpest 13-session rise since the post-Liberation Day Treasury sell off last April.

Turning to this week’s data in more detail, the highlight will come with the flash August PMIs on Friday, including those for the US, Eurozone, Germany, France, UK and Japan. The resilience in economic activity data, including the PMIs, in the face of the Iran energy shock has been an important factor in supporting continued pricing of rate hikes across the major economies. Indeed, in July the composite PMI reached its highest levels since the start of the year in both the US and the Euro area.

In other events, we’ll have the latest Riksbank decision on Thursday, which is expected to keep rates on hold for an eighth consecutive meeting. Elsewhere in Europe, we’ll have the ZEW survey in Germany on Tuesday and the ECB’s July consumer expectations survey due Friday. For the latter, our own dbDataInsights survey suggests an uptick in short-term expectations but more stable medium-term ones. Otherwise, the UK will dominate the European data calendar, with the July inflation print on Wednesday, labour market data on Tuesday and retail sales on Friday. For the CPI print, our UK economists expect headline at 2.92% YoY and core CPI at 2.54%.

Before all that, the focus will be on China July activity data, including retail sales and industrial production, which will be out an hour or so after this hits your inboxes. The release comes as China’s domestic demand growth has been lacklustre in recent months, putting the reflation that has emerged since late 2025 at risk. Underwhelming domestic growth has also contributed to the underperformance in China’s equity market, with the main indices essentially flat YTD, in contrast to a +13.7% rise for the S&P 500, +11.1% for the Stoxx 600 and +36.5% for the Nikkei.

As the earnings season begins to wind down, the spotlight will be on the US retailers Home Depot (Tuesday), Target, TJX (Wednesday) and Walmart (Thursday) to gauge the health of the US consumer. Other names to watch include Analog Devices and Deere in the US and Alibaba and Baidu in China.

Recapping last week now, bond markets were caught between reacting to the ongoing deadlock between Iran and the US and a string of mixed US inflation and activity data. The US economic data story ultimately dominated the narrative at the front-end, with 2yr Treasury yields falling -2.5bps over the week (+2.8bps on Friday) as markets dialled back the likelihood of a September Fed hike. That followed the July CPI and PPI prints, which saw core CPI slow to 2.5% y/y, its slowest pace since early 2021. Friday’s data was also on the softer side, including July retail sales (-0.6% m/m vs +0.1% m/m est) and the preliminary August University of Michigan consumer sentiment (51.0 vs 55.0 est).

By contrast, longer-dated yields moved higher following a sizeable sell-off on Friday, with 10yr yield up +4.7bps to 4.69% (+4.9bps Friday), whilst the 30yr yield (+5.8bps, +4.7bps on Friday) ended the week at 5.26%, less than 2bps from their post-2007 high reached in late July.
The bond sell-off was more pronounced in Europe, where 10yr bund yields rose +7.2bps to 3.20% (+7.3bps on Friday), whilst 10yr OAT yields (+12.9bps, +10.2bps on Friday) reached their highest level since 2009 at 4.04%. And in the UK, 10yr gilts (+11.6bps, +8.4bps on Friday) saw their largest weekly sell-off since May. In addition to being more sensitive to the rise in oil, European bonds weren’t helped by a +10.59% rise in front-month TTF natural gas prices (+1.67% on Friday). Meanwhile, wheat prices moved +5.47% higher (+3.37% higher on Friday) following damage to Russian export infrastructure. These moves reignited inflation concerns, with the 1yr Euro inflation swap rising +19.9bps (+4.8bps on Friday), its largest weekly gain since mid-July.

While bonds struggled, US equities put in a more positive performance. The S&P 500 rose +0.36% despite a -0.17% pullback on Friday from Thursday’s record high, with the small cap Russell 2000 (+1.12%, +0.51% Friday) also reaching a record high. Tech stocks stabilised after their recent rebound, with the Nasdaq (+0.14%, -0.28% Friday) and the Philly Semiconductor Index (+0.49%, -0.31% Friday) seeing small weekly gains, though the Mag-7 lost ground (-0.97%, -0.22% Friday). And amid the uneventful US data and a quieter August period, the VIX volatility index (-0.65pts) ended the week at a 2026 low of 14.25.

European equities were more subdued, with the STOXX 600 (-0.36%, -0.21% Friday), the CAC (-0.90%, -0.16% Friday) and the FTSE 100 (-1.38%, -0.21% Friday) falling back, though the DAX (+0.46%, +0.53% Friday) reached a new record. And in Asia, we saw strong gains for the KOSPI (+11.49%) and Nikkei (+4.74%), which saw their best weeks since May and June respectively.

Tyler Durden Mon, 08/17/2026 - 08:39

Trump Says US To 'Substantially Reduce' Military Drills With S.Korea, Cites 'Very Good Relationship' With Kim

President Trump revealed Sunday he has ordered the Pentagon to scale back joint military exercises with longtime close ally South Korea, surprisingly mentioning his "very good relationship" with North Korean leader Kim Jong Un as a motivating factor in the decision.

Trump said in a Truth Social posts that exercises, due to start on Monday, are costly and "send a signal that is totally inappropriate and hostile" to North Korea, which he said "has been unthreatening and respectful" during his time in office.

"Based on my very good relationship with Kim Jong Un, of North Korea, I am not happy with the fact that the United States has, long ago, agreed to participate in Joint Military Exercises with South Korea," Trump stated.

Via CNN, from historic Trump-Kim meeting during the US President's first term.

Not only did Trump have somewhat glowing things to say about Pyongyang - perhaps in an effort to again jump start the kind of direct diplomacy and meetings with Kim that marked his first term - but he at the same time denigrated some recent stances of South Korea on the global stage.

He invoked Seoul's stance on the US-Israel war on Iran, which marked a huge disappointment for the White House.

"I recently asked the President of South Korea if they would like to join us in the Denuclearization of the Islamic Republic of Iran, and they said, ‘No thanks!'" he said.

Still, Trump lamented that it is actually too late to cancel the drills, and so ordered War Secretary Pete Hegseth to "substantially reduce" them.

The 10-day Ulchi Freedom Shield exercise kicked off Monday, and involves tens of thousands of military personnel from the United States, South Korea participate - but also other allied countries such as Australia.

South Korea’s Ministry of Defense responded to media questions about Trump's post by saying the military exercises would "proceed as previously notified and scheduled."

Going into this past weekend North Korea issued a severe warning over the upcoming joint military exercise between the United States and South Korea, characterizing it as a rehearsal for an aggressive war and that it is is ready to respond.

North Korea's Foreign Ministry described Friday that these planned drills look different, and will be more dangerous, compared to all prior ones of the past-half decade, in that they appear offensive in nature as the exercise will focus on modern warfare tactics.

"The US announced that the forthcoming exercises are quite different from the ones of the past five years and intended to master the ability of fighting a war on the basis of the new aspects of modern warfare," the North Korea condemnation reads. 

"By doing so, it did not conceal its aim to complete preparations for the substantial military confrontation with the DPRK. This is tantamount to an admission that the exercises, which the US and the ROK describe as 'annual' and 'defensive' ones, are a rehearsal for an aggressive war," the ministry added in a statement published by Korean Central News Agency (KCNA).

Beyond trying to possibly inject new life into Washington diplomacy with Pyongyang, it's unclear what the ultimate aim of Trump's conciliatory social media post is. Is he perhaps trying to signal China? Is he really just angry at Seoul? Or he's maybe worried over Kim's nuclear expanse and modernization drive, and so wishes to start dealing with that in more direction fashion?

Tyler Durden Mon, 08/17/2026 - 08:20