Sequence Of Return Risk The Math That Breaks Retirements

Authored by Lance Roberts via RealInvestmentAdvice.com,

The sequence of return risk is the quiet reason two retirees with identical average returns can end up in very different places.

Let's start with an easy example. Two people retire on the same day with the same million dollars. They have the same portfolio and the same 30-year average return. They should both live comfortably, right? However, while one does die comfortably, the other runs out of money.

Nothing separates them except the ORDER in which their returns arrived. That is the "sequence of return risk," and probably the single most underappreciated threat to anyone who has stopped saving and started spending. While you were accumulating, the order of your returns barely mattered. Once you are withdrawing, it becomes the entire ball game.

What Sequence Of Return Risk Actually Is

The 4% rule originated with financial advisor William Bengen in 1994 and was later stress-tested by three professors in what became known as the Trinity Study. Notably, Bengen wasn't hunting for an average; rather, he wanted the worst starting year in history that a retiree could still have survived. The answer had little to do with typical market returns. What it came down to was the retiree unlucky enough to begin in 1966, right before a long grind of bear markets and inflation that hollowed out the first half of retirement.

Before we go further, it is important to understand the problem with averages. When it comes to market returns, a portfolio that no one touches can absorb a bad decade and allow a good decade to balance the books. However, a portfolio in which withdrawals are taken cannot wait. When you sell shares during a decline, those shares are gone, and they never join the recovery. Wade Pfau estimated that roughly 77% of a retiree's final outcome is set by the first ten years alone. In other words, the average across 30 years can look perfectly "fine" while the sequence quietly destroys you.

This is the cruel arithmetic of the withdrawal phase for retirees. When you are a 35-year-old saving for retirement, market volatility is a boon. However, that same volatility becomes a genuine hazard for a 68-year-old. One is "buying the dip" with every paycheck, while the other is being a "forced seller" to survive. Same market, opposite outcomes.

Why Starting Valuations Load The Dice

If sequence is the risk, valuation is your best early read on it, and this is the part of the retirement conversation that usually gets skipped. The 4% rule was calibrated across all of history, cheap starting points and expensive ones blended into one number. The market, though, doesn't offer every retiree the same deal on their first day. Your exposure to sequence-of-returns risk is partly a function of the price you pay to walk in the door.

Research by both Wade Pfau and Michael Kitces showed that the "safe" withdrawal rate moves with valuation at the moment you retire. An individual who retires when valuations are cheap has had history be generous. Retire when they are "expensive" and the first decade, the one that decides most of your outcome, tends to disappoint. The chart below rebuilds that relationship from Robert Shiller's stock market data back to the 1880s, and I've walked through it before using a five-year version of the CAPE.

Cheap Starts Win, Expensive Starts Lose

Pay close attention to what happens across the valuation buckets. When the cyclically adjusted price-to-earnings ratio started below 15, the next ten years delivered close to 9% real returns. When it started at 25 or higher, that forward decade shrank to barely 2%. This isn't a coincidence. History has repeatedly shown us that lower forward returns are the high-probability outcome from rich valuations. Same asset, wildly different opening hands, and the retiree has no vote on which one they draw.

This is the point at which I most often receive reasonable pushback: "Nobody can time valuations." Yes, that is a fair point. We are not discussing market timing, and valuations are a terrible indicator for that. However, valuations calibrate how much risk you take relative to what the market is offering, because in the long run, valuation is the best measure of returns we have. A rich valuation doesn't guarantee a bad sequence. It just stacks the deck in favor of one.

The Loss Math That Makes Recovery So Hard

Before you get lost in the debate, take a moment and focus on the mechanism that makes this so unforgiving. Market, and ultimately portfolio, losses and gains are not symmetric, and most people misjudge the gap. A 10% loss needs an 11% gain to recover, which feels "manageable." A 30% loss requires a 43% gain, and a 50% loss requires the market to double. The deeper the hole, the steeper the climb, and it steepens at an accelerating rate.

For a retiree, however, the math becomes far more brutal. As you are climbing out of that hole, you are effectively cutting the rope above you by pulling money out, and every dollar withdrawn during the recovery is one that never rebounds.

To make this a bit clearer, let's build a simplistic example and walk through a single year. For argument's sake, we will assume a retiree starts with $1 million, and the market falls 10%. Simultaneously, they also withdraw the 4% needed for living expenses across the twelve months. This is simple math, right?

However, at the end of the year, the portfolio didn't go down just 10%. It ended down almost 14% because those withdrawals came from a shrinking base. For that retiree to climb back to a million, over the next year, while they keep spending, the market can't just return 14%; it has to return 21%. The sequence of return risk turns an ordinary 10% decline into a 21% problem.

Now Add The Tax Collector

Wait, it gets worse. For most of the "free advice" that is given, most overlook the one person everyone hates: the "tax collector." The "4% rule" is a pre-tax number, since Bengen assumed a tax-free account to keep the math clean. Real retirees rarely have that luxury. Need $40,000 to live on and pull it from a traditional IRA, and every dollar is ordinary income, so the gross withdrawal must be larger to net the same spendable amount. A 4% lifestyle funded from an IRA is really a 5% draw on the portfolio once you account for a 20% effective tax rate. Even if you are drawing from a taxable account, your capital gains, dividends, and income are all taxed as well. That bigger draw is what the portfolio feels, pulling the depletion date forward by years.

Of course, income tax brackets, state taxes, Social Security taxes, and Medicare surcharges will all impact outcomes. Such is why account types become an important factor in retirement planning. While a Roth IRA changes nothing, a taxable account is gentler as only the gains, dividends, and interest income are taxed. However, a traditional IRA, or retirement plan, taxes every withdrawal at the individual's tax bracket. While the overall point survives the details, the headline rate understates what the portfolio must fund, and sequence risk feeds on the difference.

Here is the takeaway from this discussion.

"You can't control when the bad years arrive. You can control whether they find you fully exposed and dependent on selling into them."

"Markets Always Recover" Misses The Point For Retirees

Over long time horizons, the U.S. market has always recovered from declines and bear markets. For individuals who bolted into cash in a panic, they missed the sharpest rebound days. Unfortunately, those 10 best days tend to cluster within the market's worst stretches. Therefore, for a 35-year-old with decades of contributions still ahead, "just ride it out" is close to the correct prescription. For a 65-year-old, it is a different story.

While the general belief is that markets "always recover," there is an unrealized impact in the "waiting." The market took roughly 13 years to reclaim its 2000 peak in real (inflation-adjusted) terms. For a 35-year-old who was dollar-cost-averaging, the 13-year wait proved beneficial, as it allowed accumulation of shares at lower prices. However, for that 65-year-old drawing income, the effect was the opposite. Every withdrawal during that was capital that never healed. "Ride it out" quietly assumes you aren't spending the portfolio while you ride.

Okay, let's put some real numbers to it. According to the life expectancy table, a 65-year-old lives about 19 more years, to roughly 84. The portfolio has to survive whatever sequence the market hands you. Below, a retiree takes a severe early loss and draws the standard 4% through it, against the same market left fully invested.

Here is the truth: "the market does exactly what the optimists promise." It drops, recovers, and climbs to new highs in a repeatable cycle. However, the retiree who drew income through the early losses never gets back to where he started. Their principal hits zero at 83, the year before the average 65-year-old is expected to die, on the same market that made a patient buy-and-hold investor wealthy. And this is the disciplined case, the celebrated 4%, and not a penny more. Same market, same 4% rule, and one of them still ran out of money. That is the gap "just ride it out" refuses to see.

This is usually where I get a fair objection to this analysis:

"But, if you sell, you'll miss the recovery."

True, if you're still a saver. However, it is a very different calculation once you're living off the balance. I've written before about when a retiree should actually reduce exposure, and the point isn't calling the top. It's that sequence of return risk breaks the "ride it out" script for anyone in the withdrawal phase.

Rules Of Engagement For The Sequence Of Return Risk

We understand that you can't forecast the sequence of returns, but we CAN build a plan that survives a bad one. As Howard Marks puts it, you can't predict, but you can prepare. These are the rules of engagement once you've crossed from saving into spending.

1) Hold one to two years of spending in cash or short-term bonds. Most bear markets are short, with the average one lasting under a year, compared with bull markets that run for years. A cash reserve means that WHEN the market drops, you spend from cash instead of selling stocks at the bottom. You refill once prices recover. The cost is a little cash drag in a roaring bull, a price worth paying to never be a forced seller.

2) Manage the drawdown itself. The process of avoiding a deep loss matters more in the withdrawal phase than catching the last leg of a rally. Maintaining a risk management process that trims exposure as risk increases keeps a 20% decline from growing into a 40% one. I've discussed previously that keeping losses small is the majority of the job.

3) Set your starting withdrawal rate to the conditions at the start. If you are retiring into an expensive market, start with a withdrawal rate closer to 3%-3.5% than 4%. That is Pfau's direct prescription, where a slightly leaner start costs far less than running out of money at 84.

4) Mind the tax drag. The gap between after-tax income needs and pre-tax withdrawals determines whether a plan survives. Consider spreading withdrawals across taxable, tax-deferred, and Roth accounts, and opt for Roth IRA conversions in low-income years. Taking steps to lower the effective rate the portfolio must fund is one of the few levers you control.

5) Stay flexible on spending. The "guardrails" approach from Jonathan Guyton and William Klinger trims withdrawals after bad years and lifts them after good ones. (This is why we recommend having a security cushion.) Implementing a small, temporary spending cut early in a downturn does enormous work by halting the depletion spiral before it builds momentum. Research suggests flexibility alone can support a higher starting rate than a rigid plan.

6) Implement a rising equity glide path, or "bond tent." This process suggests carrying more bonds in the portfolio during the early stages of retirement when the sequence-of-returns risk is highest. Over time, let overall equity exposure drift higher as the danger fades. Pfau and Kitces showed that this defuses the first decade, the one that matters most.

7) Separate your essentials from the market. Consider covering basic living needs with reliable income sources, such as Social Security and, if you have one, a pension. If there is still a gap between that income and spending needs, an annuity may be an option. Crucially, that reliable income stream allows the portfolio to fund only the discretionary layer, where spending can be more flexible. When your groceries don't depend on the S&P 500, a bad sequence becomes a mild discomfort, not a catastrophe.

Sequence Of Return Risk: Frequently Asked Questions What is the sequence of return risk?

Sequence of return risk is the risk that weak returns occur early in retirement, while you are withdrawing income. Selling shares into a decline locks in losses that those shares never recover from, so two retirees with the same average return can end up in very different places based solely on the order in which the returns arrived.

Why does the sequence of return risk only matter once you retire?

While you are saving, you are adding money and effectively buying the dips. In that environment, the order of returns matters much less. However, once the cycle shifts from accumulation to withdrawals, a bad early stretch forces you to sell into weakness. Wade Pfau has estimated that the first ten years drive roughly 77% of the final outcome.

Does the 4% rule protect against sequence-of-returns risk?

While the 4% is widely accepted, in reality, it is only part of the solution. The 4% rule survived history's worst 30-year sequences, but that withdrawal rate has two flaws: 1) it is a pre-tax number, and 2) it provides no guarantees. High starting valuations, a severe early loss, or taxes that turn a 4% lifestyle into a 5% draw from an IRA can still empty a portfolio.

How much cash should a retiree keep for sequence risk?

For most people, holding one to two years of spending in cash or short-term bonds is a reasonable buffer. Most bear markets are shorter than that, so you can spend from cash instead of selling stocks at the bottom, then refill the reserve once prices recover.

How do starting valuations change a safe withdrawal rate?

Higher valuations have historically meant weaker returns over the following decade, which is exactly when a new retiree is most exposed. Pfau and Kitces found that the safe rate moves with the CAPE ratio at retirement. When valuations are rich, starting nearer 3% to 3.5% buys a margin of safety.

Tyler Durden Tue, 10/06/2026 - 08:05

The post Fighting Big Money in Politics: California’s Community News Act appeared first on CEPR.

French Bonds Rally As Le Pen Unveils Shadow Budget To Pull France Back From Fiscal Brink

European bond and currency markets are signaling growing investor unease over France's political crisis and deteriorating fiscal position, as growing budget deficits under President Emmanuel Macron undermine confidence in the government's ability to stabilize public finances.

French bond yields rose Monday before reversing sharply on Tuesday, with the 10-year yield falling to around 4.75% after right-wing presidential candidate Marine Le Pen proposed steep deficit cuts.

The bond market reaction suggests investors welcomed the prospect of common-sense fiscal discipline, though austerity never ends well, as far-left riots already plague the streets over school budget constraints.

Le Pen's plan would shrink the deficit to 3.7% of economic output next year, well below the government's 5% target, before bringing it to 2.2% by 2032. Savings would come largely from spending cuts, lower transfers to the EU and reduced migrant spending.

The proposals come as political uncertainty clouds the political landscape and deteriorating public finances drive up France's borrowing costs.

it's been a while since we had a European sovereign debt crisis *FRANCE-GERMANY 10-YEAR YIELD SPREAD WIDENS 8BPS TO 135BPS France CDS widest in 13 years https://t.co/9opJUmD2uS

— zerohedge (@zerohedge) October 1, 2026

The premium investors demand to hold French 10-year debt over German equivalents has finally narrowed. 

Le Pen has received a notable boost in her odds of winning next year's first-round vote on Polymarket, as the social unrest involving far-left radical kids who burned down schools and torched buses was merely seen as a political gift. It only reaffirms her stance that the country's trajectory under globalist control has been nothing more than nation-killing.

UBS markets analyst Nana Antiedu told clients that "French bonds continue outperformance after Le Pen's shadow budget release."

Antiedu added:

French bonds continue their gains, with the 10y OAT down 12bp to 4.74% after RN leader Marine Le Pen unveiled her budget proposal to reduce France's deficit. The proposal includes plans for the deficit to be below 5% from 2027 and cut spending by more than EUR140 bn, bring the deficit below 3% by 2032 at the latest. She said France could face default if Macron's policy continues. Le Pen also said the ECB should intervene to lower euro-area borrowing costs.

Note that this is a shadow budget, so in effect what she would propose if her party was in power. However, assuming Le Pen's party were to win the 2027 presidential election and go through the legal process of changing the budget, a deficit of 3% by 2032 is quite ambitious, and would require her to gain agreement from the other parties.

Goldman Sachs one-delta desk-head, Rich Privorotsky, told clients:

Le Pen presents the RN shadow budget today and OATs have already done an enormous amount for an election still months away, so the bar for a positive surprise feels low. The realistic upside is just credibility. More than €25bn a year of clearly identified domestic spending cuts, less reliance on dubious savings from Brussels/immigration, slower phasing of tax cuts, conservative growth assumptions and a genuinely binding fiscal rule would all help. Anything that credibly accelerates that path toward 2029 would be meaningfully OAT positive. Showing an executable path to stabilize debt without touching electorally sensitive pension promises could be more fiscally credible than the market expects.

The caveat is EUR… if more domestic restraint ultimately means less willingness to fund Brussels, that raises a different question around European cohesion.

Tactically, I like the chance of a positive surprise in Europe, banks and French risk today.

Far-left rival Jean-Luc Mélenchon criticized Le Pen's budget plan as an attempt to appease financial markets, claiming the cuts would weaken the economy and worsen public finances.

The euro's latest declines against the dollar and other major peers "point to a larger risk premium going into the euro on the back of fiscal woes," said ING Bank NV's head of G10 FX strategy.

As we conveniently pointed out on Monday, the political crisis, whether in France or Spain, has culminated in a "Red October" bond crisis across the continent, which is also facing an energy crisis this coming winter.

Tyler Durden Tue, 10/06/2026 - 07:45

My Two-for-Tuesday morning reads:

• The Mighty American Consumer Is Crashing Through Inflation and Driving Growth: Spending is rising because prices are climbing and Americans are buying more stuff, despite long-running frustrations over inflation. (Wall Street Journal)

• New Innovation Is Required to Fund AI’s $6 Trillion Buildout: To justify the investment, AI must do more than boost productivity; it will need to unlock new sources of growth and value. (Bain) see also The AI Buildout and the Economy: Publicly Available Data to Assess AI’s Impact: Publicly available indicators that can help researchers and policymakers track the evolution of the generative AI buildout and its potential impact on the economy on a timely basis. We organize the indicators into three categories: capabilities and costs; firm investment and adoption; and productivity and labor. (Board of Governors of the Federal Reserve System)

• Why So Many Wealthy Retirees Hoard Their Nest Eggs. Many American retirees underspend and hoard their wealth due to fears of market downturns, healthcare costs and lifelong saving habits. A Vanguard study found that four in 10 retirees with $1 million or less don’t touch their retirement accounts until required minimum distributions. (Barron’s)

​• LeBron’s Polymarket deal may not break NBA rules, but it raises uncomfortable questions: James reportedly gets $15 million a year to endorse Polymarket — nearly four times his $3.9 million playing salary. The league just hammered the Clippers over side deals; it has no answer for the money swirling outside the cap. (The Athletic)

• AI-conscious asset allocation: Portfolio construction in a capital investment boom: The artificial intelligence (AI) boom is moving more rapidly than any previous technology-focused capital investment surge. Asset allocators face an old challenge with a new twist: Harnessing AI’s extraordinary investment potential while maintaining appropriate levels of portfolio risk diversification. Michael Cembalest and J.P. Morgan’s Strategic Investment Advisory Group draw on past capital-spending booms to rethink what diversification means when everything correlates. (J.P. Morgan Asset Management)

​• Who Owns London? The Offshore Map: The offshore map — every overseas company on the register, by borough. Thousands of London property titles are held in open breach of the law, the largest block by a convicted scam, and nearly 5,000 belong to dissolved ghost companies, British Rail among them. Thousands of London titles are held in open breach of the law — topped by a convicted scam. Nearly 5,000 belong to dissolved ghost companies, British Rail among them. (GaffOn)

• Michael Lewis Is Back to Take On Elon Musk. It’s a Roller Coaster. In his latest book, The Big Short and Moneyball author Michael Lewis details the catastrophe that was DOGE. (Slate)

​• How a Research Blog Took on Big Surveillance in China—and Won: Amos Zeeberg on John Honovich’s IPVM, a small trade publication that found Hikvision cameras tagging tourists by “minority” status and helped expose the Chinese camera giants’ role in Xinjiang. Digging through manuals for security cameras, a group of gearheads found sinister details and ignited a new battle in the US-China tech war. (Wired)

​• How Ukraine’s Naval Drones Are Remaking War at Sea: Nicholas Kulish: Ukrainian sea drones now carry surface-to-air missiles to shoot down warplanes and ferry attack drones closer to their targets.  Ukrainian sea drones act as miniature aircraft carriers, and other countries want in. (New York Times) see also Ukraine Fires Hard-to-Stop Ballistic Missile for First Time: ​Kyiv has used its homegrown ballistic missile for the first time, and Zelensky says the priority now is scaling up production. Zelensky says the focus now is to increase production of the Ukrainian-made weapon (Wall Street Journal)

• Patrick Mahomes Is Still the Best Quarterback in the World: Four games into his comeback, Mahomes has reasserted his superiority, a columnist for The Athletic writes. (The Athletic)

Video of the day: The Swiss Are Panicking About “Superclone” Fake Watches

Be sure to check out our latest Masters in Business interview with Omar Aguilar, President, Chief Executive Officer, and Chief Investment Officer of Schwab Asset Management, which runs more than $1 trillion across over 100 ETFs, mutual funds, and separately managed account strategies. He has held both the CEO and CIO titles since 2022

Trump’s EV Boost

Source: Bloomberg

 

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UK Council's "Anti-Islamophobia" Training Tells Staff The Virgin Mary Wore A Hijab

Authored by Steve Watson via Modernity.news,

North Yorkshire staff who handle anti-terror work were shown a slide stating that "Mother Mary wore a hijab." The line was used to argue that Islam's attitude to women does not conflict with Western values. The same presentation told them "Jesus grew a beard," as Muslim men are instructed to, and that "the hijab was prevalent in the UK only 100 years ago," illustrated with pictures of British shawls that have nothing to do with Islam.

Mary was a Jewish woman in first-century Judea. She lived about six centuries before Islam, and centuries before the hijab as it is understood today. No image of her, or of Jesus, was made for centuries after their lifetimes. Early Christian art first showed Jesus as a beardless youth.

None of that stopped a publicly funded programme from feeding the claim to council staff, and from putting related material in front of police officers, students and civil servants who run the Prevent counter terror program.

?"I am sick to the back teeth of this two tier approach to faith in this country!"

Bishop @BishopDewar rages after a council in North Yorkshire has been told that Mary wore a Hijab@petercardwell pic.twitter.com/iwyvm95JMZ

— Talk (@TalkTV) September 30, 2026

The session was delivered by Abbas Najib, a former police officer and chief executive of Better Communities Bradford, the charity behind Project Unity. The Telegraph reported that the charity has received £490,000 from the National Lottery Community Fund since 2019, including a £35,000 grant to roll the programme out. Najib has said Project Unity has been delivered to more than 2,500 people across West and North Yorkshire.

Najib confirmed the slide to LBC and said the programme stands by it. "Hijab is an Arabic word meaning a covering, and in everyday use it simply means a woman's head covering," he claimed.

He further suggested "Mary is depicted wearing one in Christian art across the centuries, and headscarves were common among women in Britain within living memory. The point of the slide is that covering the head is a shared tradition across faiths and cultures, not something foreign or unique to Islam."

That is a semantic trick dressed up as history. A veil in later Christian art is not a hijab. A headscarf worn by a British woman in 1920 is not Islamic dress. Calling either one a hijab writes a seventh-century religion backwards onto a first-century Jewish woman, then presents the rewrite as proof that criticism of modern Islamic practice is a myth.

The Mary slide was not an isolated flourish. Project Unity material, which has also reportedly been presented to students, police officers and civil servants responsible for Prevent, includes a defence of Sharia.

One slide states: "Sharia is not a foreign threat. It is a moral tradition - like any other - shaped by faith, reason and a commitment to human dignity."

Another says one element of Islamic jurisprudence requires that "children cannot be struck on the face, cannot be marked, and must freely consent to marriage." Pro-Palestinian marches are described in the talks as "protesting genocide."

Written material accompanying the sessions claims women are not oppressed by the stipulations of Islam, and that "Muslims, the immigrant, the brown person" were scapegoated for a flatlining economy, with the blame laid on "the rich."

North Yorkshire Council has tried to put distance between itself and the content. Odette Robson, the council's head of community safety and CCTV, said the session was a guest presentation at the York and North Yorkshire Hate Crime Conference in 2025, a joint event with City of York Council and North Yorkshire Police, and that Najib was not paid.

"Attendees were free to question evidence, test assertions and explore alternative viewpoints," she said, adding "The purpose was to encourage discussion and reflection rather than to promote any particular standpoint."

The councillors who have seen the material are not buying the distinction. Reform group leader Tom Seston said: "A Reform council would scrap all DEI initiatives such as this and put council staff back to work delivering for residents, instead of receiving political lectures from anti-British activists. North Yorkshire Council should ban this activist and his charity from all work with the council."

Independent councillor Michelle Donohue-Moncrieff, a Roman Catholic, said she was "deeply disturbed that taxpayers' money was used to fund political propaganda being fed to council staff members. In particular, the reference to Mary, the Mother of God, wearing a hijab is both inaccurate and unacceptable."

She added: "Mary is not just some random historical figure to be used to justify Islam. These types of references are not intended to explain Islam. They are a Trojan horse designed to diminish Roman Catholicism and Christianity as a whole. North Yorkshire Council should apologise and ensure that training of this nature never happens again."

The same Project Unity material was used at that 2025 hate crime conference in front of North Yorkshire Police officers. Najib played a 2024 clip of Nigel Farage warning that "we have a growing number of young people in this country who do not subscribe to British values, in fact loathe much of what we stand for," and clarifying that he meant Muslims, citing marches over Israel's actions in Palestine. Officers were then shown footage of a man racially abusing a Muslim bus driver and asked to weigh the two.

Najib's question to the room: "Ask yourself, who is going to get into trouble between those two gentlemen? And who did the most harm?" He added the comparison he wanted them to sit with: "Sitting in a national news studio and saying 'Jews hate Britain', he'd be locked up before he left the studio, and too right, too."

The police force has said the talk was not part of its training programme and was not delivered by a police employee. That does not change who was in the room, or what they were asked to conclude: that a politician's words about integration may have done more harm than a racial assault.

Najib's defence of that exercise is the same line he uses for the Mary slide. "Project Unity exists to reduce anti-Muslim hostility and strengthen trust between communities," he said. Participants, he argued, were being asked to apply one standard, and to consider how the same words would land if said about Jewish people or black people.

The standard on offer is not equal treatment under the law. It is a demand that doubts about integration, grooming, Sharia, or the compatibility of political Islam with British institutions be treated as a species of hate.

This is not a rogue workshop in Yorkshire. In March 2026 the government published a non-statutory definition of "anti-Muslim hostility," the rebrand it adopted after dropping "Islamophobia" under free-speech pressure, and promised a special representative to push it into schools, universities and public services.

The working group that shaped the definition was chaired by former attorney general Dominic Grieve. Every member of that panel has links to organisations successive governments have kept at arm's length, including the Muslim Council of Britain and Muslim Engagement and Development.

The definition is not a criminal offence. Ministers have been careful to say so. What it is, in practice, is a script. Project Unity is what that script looks like when it reaches a conference room: Christian history renamed, Sharia redescribed as a moral tradition "like any other," and an elected politician measured against a hate crime. The audience included people whose job is counter-terror work.

The other half of the machine is record-keeping. Officials at the Standards and Compliance Unit, the body set up to handle complaints about Prevent, have been logging social media posts that criticise the programme, including posts that accuse it of fixating on the "far Right" while soft-pedalling Islamist extremism. The database was withheld for more than a year and released only after an appeal to the Information Commissioner. Between March 2024 and February 2025 the unit made 77 such observations, mostly from X.

Jacob Smith of Rights & Security International, whose team forced the release, said: "It is shocking that the government has been trawling X and Reddit to find out who has been critiquing Prevent - and then storing that information. You should be allowed to criticise government policy without being put on a list."

Put the pieces together. A lottery-funded charity tells anti-terror staff that the mother of Christ wore a hijab and that Sharia is not a foreign threat. The same charity asks police to decide whether Nigel Farage's words did more harm than a man abusing a bus driver. A government panel with Islamist-linked members writes the definition those sessions are built to serve. A Home Office-linked unit keeps a list of people who say the counter-extremism programme has its priorities backwards.

None of this required a new blasphemy statute. All it required was grants, a conference slot, a working definition, and a database. The people supposedly paid to protect the public were the ones sat in the room being indoctrinated.

Tyler Durden Tue, 10/06/2026 - 02:00

The Five-Year Fuel Crisis: Why The World Economy Is Paying For A War It Thinks Is Ending

Authored by Larry C. Johnson via SonarIntelligence (Sonar21),

Once again Karl W. Miller has put numbers to a problem that most of the commentariat still treats as a temporary price spike. His latest forward outlook, "The Five-Year Global Energy Crisis," dated October 3, makes an argument that should alarm every finance ministry from Berlin to Jakarta. The war's damage to Gulf energy infrastructure is not a disruption that ends when the shooting stops. It is a reconstruction problem measured in years and trillions of dollars, and while it is solved, the world will be short of the fuels that run its economy.

A ceasefire is not a repair crew

Miller's central insight is simple. A ceasefire can reopen a shipping lane overnight. It cannot manufacture a compressor, mobilize commissioning engineers, or pay a contractor. The next phase of this crisis, he writes, is a competition for cash, equipment, qualified contractors and finished fuel.

His cost model is sobering. In his aggressive case, rebuilding the damaged Gulf energy system requires $1.16 trillion in total program funding. Under prolonged stress, with scarce equipment, rising prices and delays, the bill reaches $2.53 trillion. Even his faster case runs to nearly half a trillion dollars. He is careful to say these are model outputs, not contractor quotes, and that the true extent of the damage is the largest unknown. An April assessment put energy-related repair costs at only $34-58 billion. But the direction of his argument doesn't depend on the exact figure. Every month of delay makes the same repair more expensive, because the global market for specialized equipment and crews is already stretched by LNG expansions, refinery maintenance and power projects elsewhere.

The timeline is just as stark. Weighted by cost, the rebuild averages almost five years from today. Only 60% of the work finishes by 2031, and the longest-lead packages run to seven years.

The money problem comes first

The most original part of Miller's analysis is about cash. A damaged refinery may be worth rebuilding and technically repairable, and still sit idle because the government that owns it has to pay for food imports, salaries, electricity and water first. Lost export revenue doesn't stop those bills. When a state borrows to keep paying them, that money can't also pay an engineering contractor.

Iraq shows the problem in practice. In July, it faced a monthly public salary obligation of about $5.96 billion with a funding shortfall of $2.52 billion. A government in that position rebuilds nothing. It pays its people, and the export capacity that would restore its revenue waits. Miller's warning is that this trap can stop reconstruction before it starts: without engineering funds and vendor deposits, factory slots go to other customers and delivery dates slip.

The fuel gap is the global transmission belt

For the rest of the world, the damage arrives through diesel and jet fuel. The figures Miller cites are already severe. Gulf diesel net exports in August were just over a quarter of prewar levels. Combined Gulf and Russian diesel exports were 1.6 million barrels a day below February. Global oil stocks had fallen 507 million barrels since February, and global refinery throughput in August was 4.2 million barrels a day below a year earlier.

Looking forward, Miller's severe case assumes a shortfall of at least 3 million barrels a day of diesel and jet fuel, every year for five years. That's about 1.1 billion barrels a year and 5.5 billion barrels over the period. He is explicit that this is a deliberate stress test, not a forecast, and that a faster-recovery path closes the gap by the fourth year. But the stress case is a plausible one. Restored capacity can be absorbed by refinery outages, deferred maintenance, recovering demand and delivery bottlenecks. Damaged refineries don't come back at full capacity on the first day.

Inventories cannot fill a gap of that size for that long. Five and a half billion barrels is far beyond any country's emergency stocks, which is why drawing down Europe's reserves now, under pressure from Washington, only buys weeks. Without enough new supply, the balance can close in only one way: by using less fuel.

How the shortage reprices everything

The economic damage extends well beyond the missing barrels. When supply falls short, buyers bid for the marginal cargo, and that bid sets the price for all the fuel still being bought. Miller's illustration: a $40-a-barrel premium across 10 million barrels a day of purchases adds $146 billion a year to fuel bills. Applied only to the 3 million missing barrels, it would add $43.8 billion and badly understate the real cost.

Scarcity also reprices credit. At $150 a barrel, a buyer purchasing 1 million barrels a day needs $2.25 billion to hold 15 extra days of inventory, and $3 billion at $200. Longer voyages tie up more fuel and more money in transit. A supplier can have the barrels while its customer can't get a letter of credit. And a cargo that wins a bidding war for one country leaves another short. Competition redistributes the shortage before it eliminates it.

Who absorbs the shock

Diesel carries the crisis into the real economy. It runs road freight, farm machinery, mines, construction fleets and backup generators, none of which can switch fuels quickly. Higher diesel costs pass straight into freight rates and food prices, and when diesel isn't available at any price, activity simply stops. Jet fuel carries the shock into aviation: higher fares, fewer routes and higher air cargo surcharges. Kerosene hits the households with the least room to adjust, in countries where it is still used for heating, cooking and lighting.

Miller's regional assessment follows the money:

• Europe competes for replacement diesel and jet cargoes while running its refineries close to their limits.
• South and Southeast Asia face higher import bills, currency pressure and greater need for trade credit.
• Africa and smaller importers are the most vulnerable. Tenders fail, credit lines run out, and small cargoes become uneconomic long before global stocks are exhausted.
• The United States and other Atlantic suppliers face export demand competing with their own diesel needs, with refineries running so hard they have little tolerance for outages.

The ultimate balancing mechanism is demand destruction: freight deferred, low-margin factories idled, flights cancelled, and poorer importers losing every bidding contest. Miller warns against mistaking that for recovery. Lower consumption caused by rationing through price or credit is not a repaired energy system.

Case study: Europe

Europe shows what Miller's framework looks like in practice. The continent burns about 5 million barrels of diesel a day, fuel for the trucks that move its goods, the tractors that plant its crops and, as winter approaches, the boilers that heat millions of homes.

How much does Europe produce, and how much does it import? Running flat out, EU refineries can produce roughly 4.5 to 5 million barrels a day of diesel and gasoil, and they are already operating close to their maximum. That leaves Europe roughly 85-90% self-sufficient at best. The remaining 10-15% comes from imports, and that margin sets the price for the entire market. Kepler puts the EU's diesel imports from outside the bloc at about 580,000 barrels a day this year. Britain, which lost much of its refining capacity over the past two decades, is far more exposed: it imports more than half the diesel it uses.

The origin of those imports has changed dramatically. Russia was long Europe's largest outside supplier until the EU embargoed Russian diesel in 2023. The Gulf filled much of the gap, until the war cut it off. Since March, the United States has supplied more than half of Europe's diesel imports, and more than two-thirds in August and September. Europe has traded dependence on Moscow for dependence on Washington, and Washington has just shown it is willing to use that leverage, threatening an export ban unless Europe released its emergency stocks.

Europe's diesel depends on imported crude as well. Its refineries run almost entirely on foreign oil: the EU imports about 97% of the crude it consumes. But the Gulf was never Europe's main crude supplier. In 2025, Gulf Cooperation Council states supplied only about 7% of EU crude imports, Iraq another 5.8%. Europe's crude now comes chiefly from the United States, Norway and Kazakhstan, which together supplied nearly half of EU petroleum imports in the second quarter of 2026. The volume has held steady; the bill rose 56%. But the crude isn't the crude Europe's refineries were built for. Much of Europe's refining capacity was designed around medium sour crudes such as Russia's Urals, with conversion units that turn the heavier part of the barrel into diesel. American shale crude is light and sweet. It refines readily into gasoline and naphtha, but it yields proportionally less diesel and jet fuel, the very products Europe is short of. As Miller notes, sour crude isn't uniquely required to make diesel; the replacement barrels work, but not at the same yield or cost. The Gulf supply Europe really lost was finished diesel from Gulf refineries, and that is what the United States has replaced. The result is a double dependence: Washington is now Europe's largest supplier of both the crude its refineries run and the diesel they can't make. Even the non-American barrels carry risk. Most Kazakh crude reaches Europe through a Black Sea terminal at Novorossiysk, on Russian soil, a route that has already been hit by Ukrainian drones.

How long can Europe store diesel? This is where Europe's apparent cushion turns out to be thinner than it looks. Unlike crude oil, which can sit in salt caverns for decades, diesel degrades. Under ideal conditions, conventional ultra-low-sulfur diesel can typically be stored for six to twelve months. With stabilizers, biocides and well-managed tanks, that can be extended to 18 to 24 months. Oxidation forms gums and sediment, water collects, and microbes grow in the fuel.

European diesel has an added problem. The EU standard, EN 590, allows up to 7% biodiesel in road diesel, and biodiesel oxidizes faster than petroleum diesel. Concawe, the European refiners' research association, recommends a maximum storage time of six months for biodiesel and current blends containing it. Strategic stockholders can extend that by holding biodiesel-free product, but even then the reserve has to be rotated, sold into the market and replaced with fresh fuel on a cycle of a year or two.

That changes what Europe's reserve really is. EU countries and Britain held about 52 million tonnes of gasoil and diesel in June, including nearly 38 million tonnes of emergency reserves, roughly two months of consumption. But a diesel reserve is not a stockpile Europe can fill once and forget. It is a stock that must be continually turned over, which means continually bought, and bought in the same tight market Miller describes. Every barrel released now to satisfy Washington has to be replaced later, at a higher price, from suppliers who are already short. And because diesel degrades, Europe can't solve the problem by buying extra while it's cheap and holding it for years. A reserve with a shelf life of a year or two cannot cover a structural deficit that Miller's severe case puts at five years.

The conclusion for Europe is stark. It produces most of its own diesel but has no spare refining capacity. It depends on imports for the margin that sets prices, and those imports now come mostly from a single supplier that has shown it will use them as leverage. And its emergency reserve is both perishable and finite. In Miller's terms, Europe is one of the buyers most exposed to the marginal cargo, and the least able to wait out a five-year shortage.

The implications for the global economy

Put together, Miller's analysis describes a world economy facing a prolonged supply shock, not a temporary one. Fuel costs feed into nearly everything, so central banks fighting the inflation this crisis has already produced will face pressure for longer than they expect. Emerging-market importers face a combination of high fuel bills, weak currencies and tighter credit that has historically produced debt crises and unrest. And the reconstruction itself will absorb capital, equipment and specialist labor that would otherwise build new energy supply elsewhere, so the shortage may delay the investment needed to end it.

Miller's strategic conclusion is the one policymakers least want to hear. Ending the conflict removes one source of disruption. It does not repair the energy system, which requires a separate sequence of financing, engineering, manufacturing, construction and commissioning that will take years. Until that is done, reliable fuel and the cash to buy it will determine which economies absorb the burden. Neither will be distributed evenly.

Tyler Durden Mon, 10/05/2026 - 23:25

An Uncomfortable Reality: China's Rare Earth Chokehold May Outlast This Decade

An inconvenient reality for the Trump administration's race to rebuild Western conflict-free critical materials supply chains outside China, whether domestically or through friendshoring, is that it won't break China's chokehold this decade.

The main problem for the US lies well beyond the mine, ING analysts Ewa Manthey and Coco Zhang wrote in a note on Monday titled "The US rare earth push: what comes next?" Extracting more ore does very little for US companies that depend on Chinese processing plants to turn ore into usable metals, alloys, and finished magnets.

"The US has significant rare earth resources, but its supply chain remains heavily reliant on China. The biggest gaps do not sit in the mine, but rather in processing, heavy rare earth separation and magnet manufacturing," Manthey said.

China accounts for about 60% of mined magnet rare earths, 91% of refined output and 94% of permanent magnet production, Manthey said, citing the International Energy Agency.

Manthey added, "The US rare earth challenge is industrial rather than geological. Its vulnerability lies in the difficult stages between the mine and the finished component."

MP Materials represents both America's progress in rebuilding domestic rare earth supply chains and its continuing constraints. The miner produced a record 50,692 tons of rare-earth oxide in concentrate in 2025 and began manufacturing neodymium-iron-boron magnets in Texas that December.

The biggest gap is heavy rare earths, particularly dysprosium and terbium, which help magnets retain performance at high temperatures. These materials are critical across automotive, aerospace, and defense applications.

MP Materials is developing a separation line designed to produce about 200 tons of dysprosium and terbium annually. Even with that capacity, securing feedstock remains a challenge because production is concentrated in conflict areas such as China and Myanmar.

Manthey cited a June agreement with USA Rare Earth involving $277 million in grants, a $1.3 billion senior secured loan and a 16% government equity stake. She also highlighted the federal government's investment in MP Materials, alongside decade-long magnet purchase commitments and an NdPr oxide price floor.

The number of announced projects is growing: MP Materials, Vulcan Elements and USA Rare Earth have each outlined plans for facilities capable of producing 10,000 tons of magnets annually. Those targets, however, represent planned capacity rather than current output - and that is a major problem. 

The US is also pursuing supplies from Australia and Brazil while funding recycling technologies. Yet alternative supplies are unlikely to eliminate the China dependency this decade: The IEA estimates that announced magnet projects outside China would meet well below 20% of demand outside China in 2035. 

Last week, Bloomberg Intelligence analysts questioned whether more than $40 billion in announced federal support to rebuild conflict-free critical materials supply chains outside China would translate into reliable near-term supplies and improve defense readiness.

Christian Keller, Barclays' global head of economics research, recently warned that "China's quasi-monopolistic position" in the critical materials space would persist through at least the end of the decade.

Not just in mining...

...but also refining.

Stifel aerospace and defense analyst Jonathan Siegmann wrote last month that "owning the bottlenecks," or investing in producers within conflict-free supply chains, was the best way to gain exposure as China chokes off the West's access to critical materials such as tungsten, magnets, rare earths, and other materials.

News last Friday of the US Commerce Department's move to squeeze jet parts supplies to China in response to Beijing's weaponization of critical material exports indicates that an uncomfortable reality is setting in across the West: Mining and processing supply chains might not be rebuilt in time to meet demand from the massive rearmament supercycle.

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

Tyler Durden Mon, 10/05/2026 - 23:00

Trump's $90 Medicare Checks Raise A Question Nobody Seems To Be Asking

Authored by David Manney via PJ Media,

President Donald Trump is sending well over 20 million Medicare enrollees $90 apiece, and plenty of recipients will understandably welcome the money. With the standard Medicare Part B premium at $202.90 a month this year, $90 isn't pocket change for someone living on Social Security.

AP Photo/Heather Khalifa

From the White House:

• Payments will be made from the Medicare Improvement Fund, which has been given $2 billion by Congress for the purposes of making improvements to the Medicare fee-for-service program, but has never before been utilized.
• Most eligible seniors will receive the payment in the form a direct deposit of $90 in early October. Those without direct deposit will receive a check, also sent in early October, to the mailing address they have registered with Medicare.

The interesting question comes before the checks arrive. Congress created something called the Medicare Improvement Fund, and the law describing what the money can be used for doesn't specifically say anything about mailing cash directly to beneficiaries.

The statute gives the secretary of Health and Human Services authority to use the fund to make "improvements" to original Medicare Parts A and B. It then specifically mentions adjustments to payments for medical items and services that doctors, hospitals, and other suppliers provide.

The language is broad enough to give HHS room to argue that helping beneficiaries pay Part B premiums qualifies as an improvement, but direct cash payments aren't specifically identified.

Congress currently has $2.062 billion sitting in the fund. Sending $90 to slightly more than 20 million people will consume roughly $1.8 billion of it. The money ultimately comes from the Federal Hospital Insurance and Federal Supplementary Medical Insurance trust funds in proportions determined by the HHS secretary, so this isn't an unused pile of general Treasury cash somebody discovered behind a filing cabinet.

The statute also contains a safeguard worth noticing. HHS may obligate the use of the money only after the secretary determines that sufficient funds exist, and the CMS chief actuary and appropriate budget officer certify that enough money is available to cover the obligations.

Maybe all of that paperwork has been completed. The White House announcement doesn't provide the certifications, an HHS legal analysis, or an explanation of how a direct beneficiary payment fits within the statutory purpose. With nearly $2 billion moving from Medicare trust funds into bank accounts and mailboxes, publishing those documents would answer a reasonable question.

The White House calls the $90 payment a Medicare premium rebate, and says this is the first time any administration has used the Medicare Improvement Fund to directly lower beneficiaries' costs. Most eligible recipients will receive direct deposits in early October, while others will receive checks. People whose premiums are already paid by Medicaid and those paying income-related premium surcharges aren't eligible.

None of this proves the payments are unlawful. Congress wrote an unusually broad phrase when it authorized HHS to "make improvements" to Medicare, and an administration lawyer can make a serious argument that reducing a beneficiary's effective premium cost qualifies.

Still, a novel reading involving almost $2 billion deserves more than a celebratory fact sheet. Show the legal interpretation. Show the actuarial certification. Show Congress and taxpayers exactly how HHS concluded that a fund historically discussed in terms of Medicare services and provider payments can now finance direct checks.

Trump may have found a perfectly lawful use for a fund Washington spent years moving money into and out of without ever spending it. If so, releasing the documents should make the case stronger.

For $90, beneficiaries get a check. For $1.8 billion, taxpayers deserve the paperwork.

Tyler Durden Mon, 10/05/2026 - 22:35

Former World Chess Champion Kasparov Says US Warned Him About Kremlin Kill Plot

Authored by Chris Summers via The Epoch Times,

Former world chess champion Garry Kasparov has said the security services from both the United States and Lithuania have warned him that his life was in danger, after a Russian plot was discovered which allegedly targeted Kremlin critics living abroad.

Last month the U.S. Department of Justice (DOJ) said five people had been charged with plotting, on behalf of Russian intelligence, to assassinate two opposition figures.

One of the targets was in the United States, and the other in Lithuania.

DOJ did not identify Kasparov - who moved to the United States from Russia in 2013 and lives in New York - but in a Substack post the 63-year-old former chess grandmaster said he had been warned his life was in danger.

He identified the other person as Ivan Tyutrin, the co-founder of the Free Russia Forum, who is based in Lithuania.

"Neither I nor Ivan have been told explicitly that we were the targets whose names are redacted in the indictment of the assassins," Kasparov said.

"We were, however, warned by security services in Lithuania and the United States that our lives were in danger and that we should take precautions, which I did and will continue to do."

The Epoch Times reached out to the Free Russia Forum for comment, but did not receive a response by publication time.

Kasparov - who was born in Baku in what is now Azerbaijan, when it was part of the Soviet Union - became famous when, at the age of 22, he beat Anatoly Karpov to become world chess champion, a title he held until 2000.

Kasparov, an increasingly outspoken critic of Russian President Vladimir Putin, chairs the Renew Democracy Initiative, a nonprofit that describes itself as an "intellectual home for the pro-democracy movement" globally.

In his The Next Move Substack, Kasparov said his friend and fellow opposition figure, Boris Nemtsov, was "murdered in cold blood in front of the Kremlin" in February 2015.

'I Will Not Hide': Kasparov

"But I will not stop, and I will not hide, even if I thought it was possible to do so. I believe that the best defense is a good offense," Kasparov said.

"My family and I will not truly be safe as long as Putin is in power in Russia - a circumstance shared by millions."

The DOJ only referred to the targets of the alleged Russian intelligence plot as Victim-1, who lived in the United States, and Victim-2, who lived in Lithuania.

They said a U.S. national had been offered $40,000 to "eliminate" or "disappear" Victim-1.

A U.S. citizen was also contacted about surveilling and murdering Victim-2, who was allegedly described by the plotters as a "bad guy" who was "telling lies about Russia."

The Kremlin said last month it saw no reason to comment on the U.S. allegations, saying there was an absence of credible evidence and facts.

Russia has previously denied conducting such plots on foreign soil.

Tyler Durden Mon, 10/05/2026 - 21:45

West Virginia Wants Nuclear's Benefits, Somebody Else Can Handle The Waste

When West Virginia first announced that they had joined the race to host Nuclear Lifecycle Innovation Campuses (NLICs), the central bargain was already clear: nuclear investment comes with responsibility for used fuel. 

We’ve covered this concept a couple times now, highlighting states like Texas and New Mexico that back nuclear investment while fighting storage of out-of-state spent fuel.

Now, West Virginia has joined the club of pro-nuclear pretenders.

Governor Patrick Morrisey signed an exploratory agreement with DOE and announced West Virginia's entry as the sixth contender in the first week of September. The governor claimed he and his staff went above and beyond to be considered for an NLIC.

It's not surprising, considering over half the states in the country applied for the program with the knowledge that the campuses could attract up to $50 billion in investment and create nearly 25,000 jobs, each.

The frustrating part is that the expectation to take in used nuclear fuel wasn't some secret buried in the fine print. West Virginia's submitted NLIC proposal made temporary used fuel storage a top priority, alongside research into longer-term disposal. Its September agreement explicitly anticipated addressing out-of-state spent fuel and other radioactive waste.

This all only came to light on September 25th when the Charleston Gazette-Mail reported what the administration had actually proposed, using documents obtained through a public-records request. The sales pitch suddenly had an inconveniently readable paper trail.

Multiple lawmakers, even pro-nuclear Republicans, raised concerns about constituents being blindsided. Delegate Josh Holstein said Boone County's elected representatives had not been informed that the former Hobet mine was among the proposed sites.

By September 27th, Morrisey put out a formal statement declaring a hard flip from his previous posturing: "West Virginia will not be a dumping ground for nuclear waste. Period."

The Gazette got it wrong. This Friday’s story intentionally misrepresented my administration’s energy plans without giving me a chance to address their claims and slanted coverage. Here's the truth: We are pursuing nuclear generation and manufacturing to bring high-paying jobs to West Virginia. Our recent application to the U.S. Department of Energy was part of that effort. We want to build on our existing strengths in coal and natural gas to create more jobs and opportunity, stronger communities, and a higher standard of living. But West Virginia will not be a dumping ground for nuclear waste. Period. I have directed my Office of Energy to ensure that every site identified in our final Nuclear Campus application is considered only for nuclear generation or manufacturing - not as a dump. I will keep fighting for investments that can bring thousands of high-paying jobs to our state. I will also protect West Virginia’s beauty and heritage. We can pursue new opportunities without becoming a dumping ground. More energy jobs and manufacturing jobs are on the table. Nuclear waste dumps are not. We've had enough fake news.

— Governor Patrick Morrisey (@wvgovernor) September 27, 2026

By September 30th, the NLIC hosting deadline, state energy director Nicholas Preservati told DOE West Virginia was "unable to execute the Hosting Agreement and commit fully to its requirements." The letter still surprisingly proclaimed support for a national nuclear renaissance.

It’s just somebody else's responsibility, apparently. As with Texas and New Mexico, the enthusiasm looks considerably thinner once nuclear's less glamorous obligations enter the conversation.

West Virginia has not banned nuclear development, but it has walked away from this attempt to connect the industry's benefits with its lifecycle responsibilities.

Tyler Durden Mon, 10/05/2026 - 21:20

Pentagon Raises Combat Pay For First Time Since 2002 As Iran War Persists

Authored by Dave DeCamp via AntiWar.com,

The Pentagon has raised combat pay for US troops for the first time since 2002, Task & Purpose has reported, as the Iran war continues and another round of escalation between the US and Iran appears to be coming.

Pentagon spokesman Sean Parnell announced the pay increase last week. "Our troops in harm’s way deserve compensation that reflects their risk. For the first time in over two decades, the Department of War is increasing Hostile Fire Pay and Imminent Danger Pay," he wrote on X.

Marine Corps file image

Parnell said that Hostile Fire Pay, which troops can receive if their base or unit comes under enemy fire, has been increased to $450 per month, double the previous amount.

Imminent Danger Pay, provided to troops "subject to the threat of physical harm or imminent danger," has increased to a maximum of $275 per month, up $50 from the previous rate. US troops can receive either Hostile Fire Pay or Imminent Danger Pay, but cannot receive both simultaneously.

While increasing combat pay, the Pentagon is also reducing the maximum amount troops can receive in Hardship Duty Pay-Location from $150 to $100 per month. The benefit compensates troops stationed in areas with particularly difficult living conditions, rather than for exposure to combat.

After the Iran war started, the Pentagon expanded the locations that are eligible for Imminent Danger Pay to include Arab states that host US bases, Turkey, Cyprus, the Greek island of Crete, the US base at Diego Garcia, and the waters of the Arabian Gulf, Arabian Sea, and Gulf of Oman.

Throughout the war in Iran, US bases across the Middle East have been pounded by Iranian missiles and drones, resulting in a significant number of US casualties, which have been downplayed by the Pentagon.

According to the Pentagon’s official numbers, since the US and Israel started the war with a sneak attack on Iran on February 28, at least 19 US troops have been killed, and 861 have been wounded.

——> Pentagon doubles combat pay for troops under fire • Hostile-fire pay jumps from $225 to $450 a month starting today • Imminent-danger pay rises to $275 as U.S. forces stay in Iran-related danger zones https://t.co/RxEXmaq53p

— Odisus (@Odisus) October 1, 2026

According to a recent report from The Washington Post, the Pentagon has not reported all of the US military deaths in the region since the conflict began. The report put the number of deaths of US service members at up to 23, though it said not all undisclosed deaths were directly tied to the conflict, and it also said that three civilian contractors have died.

Tyler Durden Mon, 10/05/2026 - 20:55

DOJ Sues University Of Delaware: Illegal Aliens Get In-State Tuition, Out-Of-State Americans Pay 2.7x More

The Justice Department has sued the University of Delaware, alleging the school "grants in-state tuition for illegal aliens while denying reduced tuition to U.S. citizens."

The math comes straight from UD's own 2026-27 cost-of-attendance page. Undergraduate tuition for Delaware residents is $15,740. For non-residents it is $42,470.

A qualifying illegal alien who went to high school in Delaware pays the first number. A US citizen from Pennsylvania or Maryland pays the second. That is a $26,730-a-year premium for the crime of being an American from the wrong state, or roughly $107,000 over four years at current rates, before fees.

To qualify, according to NBC Philadelphia, a non-citizen must have attended a Delaware high school for at least three years, graduated there or earned a GED, lived with a legal guardian while in school, enrolled at UD within 18 months of graduating, and provided evidence of permanent residency or an application for U.S. citizenship.

Associate Attorney General Stanley Woodward Jr. said:

"This Department of Justice's efforts will not cease until we have challenged every state law or university policy that gives preferential treatment to illegal aliens over our Nation's own citizens. Congress long ago made clear that states cannot give reduced tuition to illegal aliens not available to all Americans."

Assistant Attorney General Brett Shumate added that "colleges cannot provide benefits to illegal aliens that they do not provide to U.S. citizens," and that the department "will not tolerate American students being treated like second-class citizens in their own country."

Delaware is the 26th such lawsuit from the Trump DOJ. The department says it has already secured favorable court orders against six states: Texas, Kentucky, Oklahoma, Nebraska, Illinois and Kansas.

UD, for its part, said it is "aware of the complaint" and "reviewing it carefully," and declined further comment on a pending legal matter.

Not every challenge has gone DOJ's way: in March, a federal judge dismissed the department's suit against Minnesota's tuition policy with prejudice.

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Backlash Rolls In After Rutgers Womxns Rugby Name Change Welcomes Men Who Identify As Female

Authored by Jennifer Kabbany via The College Fix,

A female recreational rugby team at Rutgers University is facing backlash for changing its name to "Rutgers Womxn's Rugby" to signify inclusion and the intent to allow biological males who identity as female to play on the team.

The criticism was swift and severe, prompting the student-run team to turn off the comment section of its announcement on Instagram before deleting the post completely.

However, while the announcement was deleted, the team's account name remains "Rutgers Womxn's Rugby." Its original Sept. 24 post had stated:

We're excited to announce that Rutgers Women's Rugby will be making the change to Rutgers Womxn's Rugby! This change reflects our team's commitment to creating a welcoming, inclusive and supportive environment for our players. Inclusivity is an important part of who we are, and we want every member of our team to feel valued and represented through our organization. We are continuously evolving and want to properly reflect the standards of inclusion. We're proud to continue building a rugby community where everyone belongs."

But Fox News reported that World Rugby "bans biological males from women's divisions, pointing to clear science showing extreme injury risks during hard tackles. Rebranding a student club is easy, but letting biological males into female sports divisions lands universities in hot legal water."

Fair For All, a group fighting to protect women's sports, pointed out that "Depending on what 'Womxn' includes, the substantive change could also be a violation of Title IX."

Rutgers Women's Rugby Team is renaming themselves as "Womxn's Rugby Team" to be inclusive.

Is @RutgersRugby Men's Team also changing its name to Mxn's Rugby Team?

Why is female sports the only battleground for ideological push to include those outside of the female sex... pic.twitter.com/j4WMRrQybF

— Fair For All (@fairforall_org) September 25, 2026

"Inclusion of athletes who are not women is not fair to women and will not make female athletes feel valued. Female athletes will opportunities and will be excluded. When that happens, they will not feel welcomed or represented," the group added.

The Post Millennial reported that several club women's rugby teams across the country have "ditched the women's category in favor of a newly created 'open' category so men can play on their women's teams."

Tyler Durden Mon, 10/05/2026 - 19:15

Guinness Pulls Plug On Baltimore Brewery As Costs Soar In Democrat-Run State Amid Consumer Beer Retreat

The first Guinness brewery to open in the US in more than 60 years, located in the Baltimore metro area, will shutter operations next month as shifting consumer demand and the challenges of operating in the Democrat-run state have made the operation increasingly difficult to sustain.

Diageo, the British alcoholic-beverages company that owns Guinness, operated the brewery for eight years, during which the site attracted more than 2 million visitors.

Local outlet WMAR-TV reported that the shutdown is due to soaring operating costs, shifting consumer tastes and broader economic pressures that made the brewing location unsustainable.

The decision followed a "careful review of our operations and long-term business priorities," a Diageo spokesperson said.

The shutdown comes three years after Diageo slashed the workforce at the Halethorpe site by 100 jobs and ended most commercial brewing at the plant. Its taproom, restaurant, beer garden and experimental brewery remained open.

This closure leaves Chicago as the brand's only US brewery and raises a difficult question about whether shifts in consumer demand for beer are only one part of the story.

The other part of the story is easy to understand: Maryland faces competitive pressure from neighboring states. Its negative net migration only suggests that the Democratic kings and queens who control the state under one-party rule are running its economy into the ground.

Neighboring states are cutting taxes or adopting flat-tax systems, while lefty Annapolis lawmakers are hell-bent on a parasitic mission to extract as much tax money as possible from mom-and-pop businesses, medium-sized and large companies, and taxpayers to pay for their progressive experiments. 

The result of lefty activists running the state is negative net migration, and the latest example of these state-killing economic policies is a major brewer shuttering operations.

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America's Wile E. Coyote Moment

Authored by Matthew Piepenburg via VonGreyerz.gold,

When it comes to contextualizing the tech, bond, gold and policy headlines of Q4 2026, it's easier to foresee their pathway ahead by first looking backwards. Once understood, we mathematically realize that our problems are not in the future, they are right now.

The 1970s

Ah, the 1970s. It was an era of bellbottom jeans, checkered suits, wide ties, the music of ABBA and Saturday morning cartoons.

It was also the decade in which Nixon decoupled the dollar and ended the sound money hopes of America's founding fathers.

Backed by nothing but "full faith and credit," the USD began its slow but steady death by a thousand cuts of borrow and spend without limit or concern.

Free a golden chaperone, politicians and Fed Chairs of every political stripe could expand balance sheets and the M2 money supply with almost zero concern for the longer-term financial karma that always follows a bacchanalian debt spree paid for with dollars literally created out of thin air.

Government debt, at $238B in 1971, was no big deal to our so-called "experts."

Besides, any future debts could be easily paid at this dawn of generational fantasy, which Hemingway described as the "temporary prosperity" of excess money printing masquerading as careful policy.

A Time Without Foresight (or Restraint)

In short, no one in the 1970's was thinking of what it might be like by 2026 when that same government debt had skyrocketed from a couple hundred billion to over $40T.

Instead, post-1971 leadership, red or blue, focused on the next election cycle rather than the next generation's purchasing power.

As holder of the world reserve currency, DC enjoyed what the French Finance Minister of 1965 described as the "exorbitant privilege" of simply exporting its reserve currency and inflation to the rest of the world.

This may have been inherently unfair to the rest of that world, but as our then Treasury Secretary, John Connally, famously quipped: "It's our currency but your problem."

Buying Time with Funky Policies

To insure that "problem," we effectively forced OPEC to sell its oil in USD, and even made the producers of this oil spend large chunks of their revenues on our USTs. This made oil a critical sponge to absorb our reckless and inflationary spending.

As Mel Brooks would say, it sure was "good to be the king" - or at least King Dollar.

And just in case a rising gold price might otherwise embarrass our nothing-backed dollar, we also made sure in the mid-70s to create a price-fixing mechanism at the COMEX to legally manipulate the paper price of this far more precious and honest metal.

Yep. That was the 1970's.

What could possibly go wrong?

Well... just about everything.

Some fifty years later, we now see a world de-dollarizing, a petrodollar fracturing, missiles flying and the dollar emerging no longer as just the world's problem, but America's as well.

Back to the Future

Fast-forward to 2026 and the foregoing "exorbitant privilege" and "temporary prosperity" has devolved into what Hemingway also foresaw as this debt-n-spend fantasy's final endgame, namely the "permanent ruin of currency debasement and war."

Of course, there are defenders of American Exceptionalism who would take offence to words like "permanent ruin" from gold bugs just "selling their book."

After all, there's so much to save us. Just look at the record-high S&P. Look at technology. Look at AI. Look at the milkshake theory's immortal dollar. Look at all the Fed's brilliant PhDs and magical task forces. Look at stablecoins.

Ok. Let's look.

The Great AI Gambit

As for the S&P 500, it's nearing all-time highs, but 440 of its 500 companies are down more than 20% from their 52-week highs.

Rather than a stock market, we have a concentrated minority of tech monopoly powers holding the rest of the broken pack together with techy duct tape and memes of "this time is different with AI."

The core and leading big names in tech, namely Google, Amazon, Facebook and Microsoft, are part of the biggest AI circular financing and concentration risk gambit in the history of U.S. equity markets.

These hyper-scalers get 70% of their AI revenues from just two players, Anthropic and OpenAI, two profitless companies whose costs are billions greater than their revenues.

These two screaming examples of concentration risk are bleeding money at an historical scale. Even AI's own search results confirm the same:

From Concentration Risk to Circular Financing

And if you are wondering how Anthropic and OpenAI are funded, it's not from big VC names.

Actually, the bulk of their equity (over 700B in 2026 AI capex alone) is coming from the very same companies (Microsoft, Amazon, Google, SoftBank and Nvidia) they sell their un-moted software to...

Even more alarming, these same tech hyper-scalers which keep the two AI ships afloat are themselves burning cash at a record pace on data centers whose costs (and power problems) are killing their cash flows.

Given this circular, financed, uber-concentrated and just massive capex profile and daisy chain, AI is literally becoming too big to fail.

The very survival of our economy and stock market is now being gambled on a single AI play whose profitable future is anything but certain unless the government regulates a duopoly protective measure to keep China out of OpenAI and Anthropic's backyard, at which point the U.S. won't be getting rare earths from Asia any more...

NVDA to the Rescue?

But surely Nvidia's GPU sales will save the day, right? Its earnings are indeed impressive, and it just posted 110% revenue growth. Wow.

But if you look more carefully at Nvidia's 10Q form (and the notes behind it), you'll also see that 70% of its accounts receivables come from just five companies (listed above).

Do you see the circular concentration risk? Do you see the massive gambit the S&P is playing on the entire economy if this AI dice-roll (priced for perfection) doesn't go as planned?

For now, the great AI gambit has yet to play out. But the memory of tech bubbles transitioning from over-bought to over-sold is still very fresh in my dot.com-trading mind...

The Bond Market's Verdict

But if we move from a profitless AI, circular-financed, and grotesquely concentrated and uncertain U.S. tech bubble to a shattered U.S. sovereign bond market, the suspense is less severe in a nation running $2T in annual deficits.

In fact, when it comes to bonds, the verdict is already obvious.

As the great American bond king, Jeffrey Gundlach, so aptly described it: "We've hit peak lunacy" in our sovereign bond market.

With the 10Y UST yield crossing the 5% "uh-oh" Rubicon in a public debt backdrop of $40T, I see a death penalty for the dollar's purchasing power and a Treasury Secretary with zero parole options.

With Scott Bessent having recently added David Zervos and Judy Shelton to his "dream team," the set-up is now clear for some major changes - and desperation - ahead.

Meanwhile, DC mouthpieces like Kevin Warsh avoid direct answers as to how Uncle Sam can afford his interest expense or how we got to 5.25% yields by October when they were at 4.4% when he took office in June.

Yields rise as inflation rises, so the war in Iran, which has sent Brent crude to painful highs, is the most common explanation for how our pre-war yields of 3.9% have now crossed above the fatal 5%-handle.

But the real issue (i.e., criminal evidence) behind the rising shark fins of these rising yields lies in U.S. bond issuance at extreme levels at the same time demand for the same has hit extreme lows.

As more deleverage-focused nations dump our debt to support their currencies or buy spiking oil, those Treasury yields just keep rising - and will rise even higher once the USA confesses it's already in a recession.

The world's trust in an over-issued, distrusted, debt-soaked, and weaponized UST has fallen from incremental to exponential levels. The premium (i.e., rate) for U.S. IOUs will only continue to climb higher as our deficits do the same.

Signals: This Ain't Our Father's Bond Market

The post-2020 Treasury market is not what it used to be since 1980, and it won't be coming back. The once sacred Treasury market is mathematically broken, which means DC is objectively unhinged.

Between September of 2024 and January of 2026, the Fed, having failed to beat inflation via hawkish rate hikes in 2022 and 2023, then dovishly cut rates by 175 basis points.

In normal bond markets, such cuts are supposed to send yields down. Instead, yields went up across the entire duration range of the yield curve.

Such yield indicators may seem boring to those unfamiliar with bond market lingo while doom-scrolling their iPhones, but it confirms that the Fed has lost control of rates, and hence the cost of his unpayable sovereign bar tab.

And it gets worse.

Since 2000, we've seen 13 market corrections. And in the first 12 of those 13 corrections, the dollar always went up (on a DXY basis) by at least 8%. But on the 13th correction last April, when stocks lost 18%, the dollar, rather than go up, went down even as yields spiked.

That's not normal...

In this new abnormal, USTs sell off as stocks sell off, and the grossly over-produced (i.e., debased) USD, even in a rising yield setting, can't strengthen.

There is no safe-haven in the so-called "risk-free return" of a U.S. IOU which, when measured against honest rather the Fed-measured inflation, is nothing more than "return-free-risk."

In short, we are in a different bond regime. The old rules, correlations and tricks no longer apply.

Our bond market is openly broken.

The only way to bring these yields down to a survivable/payable level is either: 1) money printing to the moon; or 2) a massive debt restructuring, either of which option means further dollar destruction and hence screaming tailwinds for gold.

Credit Default Masquerading as a "Re-Structuring"?

As for "restructuring," the recent addition of Shelton and Dervos is telling.

Shelton, of course, understands the fall from grace of USTs. She knows that a gold-backed long bond has more credibility than a dollar-backed IOU for the simple reason that our debased dollar is now obvious (and embarrassing) to everyone, including those nations not showing up at our Treasury auctions.

But even a gold-backed 50Y UST is not gonna save the Treasury market. Too little, too late.

Like Gundlach, I feel the Fed and Treasury Dept will buy time with some serious YCC by issuing more debt from the short end in a desperate Operation Twist 2.0 attempt to compress yields on the long end.

But that's not working so well, is it?

And also like Gundlach, I believe the next desperate act could very likely involve a clever "restructuring" of our sovereign IOUs which boils down to little more than a constructive default on our debt.

That is, at some point down the road, and in the oh-so convenient name of "national security" (blamed, of course, on some foreign bad guy or black swan event), DC will simply announce an extension of bond maturities and a capping of bond coupons at 1%.

This, of course, will crush bondholders, foreign and domestic, as well as pension funds, insurance companies, money markets and the man on the street. It will also mean a massive price fall (and riot) in bonds and no global love for Uncle Sam's IOUs.

But hey, desperate times require desperate actions.

Under such "restructuring," DC would be forced to stop issuing debt and rebalance its budget. It would also mean a tanking USD, which is precisely what DC needs to inflate away its debt and gain some yardage in its trade deficit.

All Roads (Still) Lead to Gold

Thus, whether we mouse-click more trillions to save (self-fund) the bond market or restructure USTs with capped coupons, the net result either way is a neutered USD and hence a ripping gold price in the years to come, at least for those who can think that far ahead.

This further explains why central banks, which have been stacking the metal at an historical pace in 2026, now hold more gold than USTs.

They see the direction (and desperation) of the USD, and hence the direction of gold.

The Wile E. Coyote Moment is Now

Thus, as we watch the bond market die on a DC respirator while AI stocks gyrate in a profitless circle of over-investment and narrative changes which will most likely require government regulation to mote/protect the hyper-scalers and over-hyped AI providers from another 08-like catastrophe, I'm done warning of a broken U.S. credit and equity disaster on the horizon.

This is because the "Uh-Oh" moment is not coming; it's already here.

Based on the dispositive yet largely ignored signals from our anemic, concentrated and over-levered stock market; and based on our openly broken, unpayable bond market (not to mention the private credit time bomb) in search of a liquidity miracle or default policy that further debases our Greenback, the picture is clear.

Warsh, Bessent and Shelton are not going to save this credit market. Nor will Santa Claus or any other miracle trick. It's too late, folks.

In fact, the picture or image I have in mind takes me/us right back to the 1970's and those Saturday morning cartoons I alluded to above - and watched as a kid while Nixon and his successors set the current disaster in motion decades before I traded my first dot.com stock...

American credits, equities, monetary fantasies and ignored Main Street realities have already passed beyond the cliff. We now stare suspended above a fall that is no longer theoretical, but right below us.

Of course, in such moments, it's scary to look down, and thus almost no one does.

OCTOBER ONLY.$10 OFFYOUR NEXT ORDER.$30 min. Ends Oct 31. One per customer.GET MY $10 OFF →Signs you up for ZeroHedge Store emails. Can't be combined. Every order helps support ZeroHedge. Tyler Durden Mon, 10/05/2026 - 18:25

Trump Plans To Ease Off-Road Diesel Restrictions Ahead Of Midterms

Bloomberg reported late Monday afternoon that the Trump administration is preparing to loosen restrictions on tax-exempt dyed diesel, seeking to ease costs for the industrial fuel that powers the economy amid a global refining crisis.

The report cites people familiar with the matter, and the new policy could be announced as soon as today.

The plan would allow broader use of dyed diesel, better known as off-road diesel, which is mostly used in farm machinery, construction equipment and other off-road applications. This move would allow for savings of 24 cents per gallon because the fuel is exempt from federal excise tax.

"While the move wouldn't directly lower operational costs for harvesters, tractors, excavators and other off-road equipment that already runs on tax-exempt red diesel, it is seen as potentially cutting the expense to run pickup trucks and other on-road vehicles," the outlet said.

As of Monday, US retail diesel prices averaged around $6.32 a gallon at the pump, down from September's record $6.53 but roughly 68% above the $3.76 recorded before the US-Iran conflict began in late February.

Ukraine's bombardment of Russian refineries and the Gulf crisis have disrupted refining and petroleum-product shipments worldwide.

Last week, President Trump's threat to ban diesel exports to Europe spurred G7 member nations to begin releasing 120 million barrels of diesel over the next six months.

Tyler Durden Mon, 10/05/2026 - 15:00

Over 250,000 Visas Revoked During Trump's Second Term

Authored by Aldgra Fredly via The Epoch Times,

The State Department said on Oct. 1 that it has revoked more than 250,000 visas since President Donald Trump returned to office in January 2025.

State Department spokesman Tommy Pigott announced in a post on X that the administration has been working to identify and revoke visas held by noncitizens who were found to "commit crimes, support terrorism, or defraud Americans."

On Sept. 28, Pigott said the department imposed visa restrictions on 27 officials from Bolivia, Colombia, Ecuador, and Peru over allegations of corruption and ties to drug-trafficking activities.

The officials included Bolivia's Attorney General Roger Mariaca, whom the department accused of soliciting and accepting bribes to enable drug-trafficking and helping violent criminals evade punishment.

The restrictions also applied to those people's family members.

Pigott said the visa limits were imposed under Section 212(a)(3)(C) of the Immigration and Nationality Act, which allows the government to bar a person's entry into the country if the Secretary of State determines the person's presence would have potentially serious negative consequences.

"This is a durable mechanism that allows the United States to act quickly, in coordination with our partners, as evidence develops," the spokesperson said in a statement.

The Trump administration has intensified enforcement against illegal immigration and tightened the country's vetting procedures for foreign nationals seeking to enter the United States.

Secretary of State Marco Rubio said on Sept. 28 that the United States will restrict visas for people who obstruct the return of children abducted abroad by a parent, as well as those people's immediate family members.

Rubio said the new policy was intended to streamline cases that have dragged on in foreign courts and government offices and "gives the department a new accountability tool to press non-compliant countries to meet their obligations."

In June, Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division issued a memo directing federal prosecutors to prioritize investigations into birth tourism schemes.

The move came after the Supreme Court struck down Trump's executive order ending birthright citizenship for children born to illegal immigrants.

Trump's order on birthright citizenship, issued on Jan. 20, 2025, said the 14th Amendment's citizenship clause does not extend citizenship universally to everyone born within the United States.

The Supreme Court ruled on June 30 that the order ran counter to the U.S. Constitution.

Tyler Durden Mon, 10/05/2026 - 14:40

Pentagon Backs Ambitious Plan To Beam Solar Power From Space

By Haley Zaremba of OilPrice.com

Space-based solar power just got another powerful vote of confidence. The United States Department of Defense just inked a contract with solar energy company Overview Energy to “design, build, and test a homing beacon that will enable its space-based solar energy system to accurately beam power from orbit to receiving solar arrays on Earth,” according to a brand new report from Interesting Engineering.

The idea is that solar panels would orbit the Earth, collecting sunlight straight from the source and then beaming it back down to Earth either through powerful lasers or microwave beams, depending on the technology being applied.

Putting solar panels into outer space would yield a litany of benefits. Critically, unlike terrestrial models, the sun would never set on these solar panels, allowing them to generate clean energy 24 hours a day, seven days a week. This would solve an enormous issue in the clean energy sector, which is seeing increasing instances of wasted energy and even negative energy prices as peak production hours and peak demand hours are inevitably misaligned, and energy storage capacities have lagged far behind productive capacity.

And intermittency is not the only major challenge to the traditional solar power sector that space-based solar would be able to sidestep completely. Industrial-scale solar farms take up enormous tracts of land, and are therefore facing increasing legal challenges to secure appropriate plots for development. A single large-scale solar farm can take up thousands of acres. According to a 2022 insight report from strategy & management consulting firm McKinsey & Company, utility-scale solar farms require ten times as much space per unit of power as coal- or natural gas–fired power plants, at minimum. And that’s counting the land used to produce and transport the fossil fuels. Jettisoning those solar panels into space is one way of solving that problem.

Plus, the power from space-based solar panels would be dispatchable. Since solar satellites can view entire quadrants of the globe, they can beam energy when and where it is needed most with an enormous degree of accuracy. All of these factors serve to make the technology highly attractive to the Department of Defense, which wants to use space-based solar power for remote military bases. The first demonstration of the technology is planned for 2028, with deployment of the planned geosynchronous Earth orbit (GEO) satellite constellation slated to begin in 2030.

“The connection between space and the ground is the most critical element of space solar energy, especially for warfighters who depend on power at precise locations,” Darko Filipi, Overview Energy co-CEO, was quoted by Interesting Engineering.

The United States military is not the only major investor to sign a massive contract with Overview Energy. The four-year-old startup inked a deal with Meta – the megacompany behind Facebook, Instagram, and more – earlier this year, agreeing to provide up to 1 gigawatt of space-based solar energy to the tech giant – equivalent to the output of a nuclear reactor.

However, both of these contracts are based on a nascent technology and the complete space-to-ground system has yet to be demonstrated from orbit. But the leaders of Overview are confident that their big gamble will pay off in spades. “We really believe that we are able to provide utility-scale power with this technology,” Filipi recently told the Washington Post.

However, not everyone is so optimistic. “The technology may work,” Amory Lovins, a Stanford physicist and co-founder of the energy think tank RMI, told the Washington Post. “But I have serious doubts the economics do.” He pointed to the many other forms of clean, abundant, proven, and round-the-clock power alternatives, such as nuclear and geothermal, that can produce electricity much more cheaply and with more proven and established technologies.

Tyler Durden Mon, 10/05/2026 - 14:00

Key Events This Week: FOMC Minutes, Umich, And FOMC Speakers Galore

Given the high stress and high alert in bond markets, which has pushed global 10Y yields to the highest level since 2022 and with Europe finding itself on the verge of another sovereign debt crisis...

... the main focus in the week ahead will be on central banks, with the minutes from the September FOMC meeting on Wednesday and the ECB’s account of its latest meeting on Thursday.

There is also a busy run of central-bank speakers, while the data calendar includes US ISM services today and the University of Michigan survey on Friday, a run of German activity data through the week, and Japanese wages on Wednesday.  

In the US, the week begins in the shadow of Friday’s important September employment report. Headline payrolls rose just +29k, compared with +133k expected, while private payrolls increased +46k versus +127k expected. There were also 60k of downward revisions to headline payrolls over the previous two months, and average hourly earnings rose only +0.1% against +0.3% expected. Nevertheless, DB's US economists think the details still point to a broadly stable labor market. The unemployment rate edged up only slightly to 4.175% from 4.141%, the broader U-6 rate fell a tenth to 7.6%, and participation rose two-tenths to 61.8%, its highest since May last year. Prime-age participation and the employment-to-population ratio also recovered further after their unusually large June declines. So although the headline payroll number was disappointing, the wider labor-market picture remains relatively resilient, particularly alongside recent ADP and jobless-claims readings, and DB's economists continue to expect two further 25bp Fed hikes over the next couple of quarters. The market is pricing in another 86bps over the next 12 months, down from 100bps early last week but up from 70bps just after the payroll release. So lots of vol on Friday in rates and fixed income as we'll see in the review of the week at the end.  

The highly unsettled bond market makes the incoming US data and Fed communication particularly relevant. The first key release is the September ISM services index today, where DB economists expect the headline gauge to rise to 55.9 from 55.4 in August (it rose 55.8). Tomorrow brings the August trade balance, while Wednesday’s September FOMC minutes should provide more color on the near-term policy outlook.

Since the meeting, Fed communication has broadly reinforced the quarterly pace of rate hikes implied by the September SEP. Vice Chair Jefferson and New York Fed President Williams have both indicated a preference to take some time to assess incoming data before deciding on the next move, but several officials have continued to argue for additional tightening. So the minutes will be worth watching for how the broader Committee is framing the current tightening cycle and for its discussion of the neutral rate, where estimates shifted higher in the September SEP.

The rest of the US calendar is lighter. Thursday brings initial jobless claims and August wholesale trade sales, before attention turns to the preliminary October University of Michigan survey on Friday. Economists expect consumer sentiment to dip to 47.7, versus 48.1 in September. The survey may attract some extra attention with the November 3 midterm elections approaching. More broadly, DB's US economists currently estimate Q3 real GDP growth at 3.3% annualized, and this week’s activity data will help refine that estimate.

Moving to Europe, the ECB publishes the minutes of its September meeting on Thursday, alongside a packed speaker calendar. It'll be interesting to see whether the French situation gets prominent mentions. Germany has a particularly busy run of activity data, with August factory orders tomorrow, industrial production on Wednesday and the trade balance on Thursday. France releases August industrial production tomorrow, while Italy follows on Friday. Sweden publishes September CPI on Wednesday and Norway on Friday.

In the UK, the BoE releases its Bank Liabilities and Credit Conditions surveys on Thursday, when Governor Bailey is also due to speak.
In Asia, Japan is the main focus. August labour cash earnings are released on Wednesday, with markets expecting same-sample total cash earnings growth to accelerate to 3.6% year-on-year from 2.9% in July. The September Economy Watchers survey follows on Thursday and August household spending on Friday. China’s September foreign-exchange reserves are also due on Wednesday.

Courtesy of DB, here is a day-by-day calendar of events

Monday October 5

• Data: US September ISM services, UK September new car registrations, official reserves changes, Japan September consumer confidence index, Italy September services PMI, Q2 deficit to GDP, Eurozone August PPI, Canada September services PMI
• Central banks: ECB's Nagel, Lane, Schnabel, Escriva, Kocher and Buch speak

Tuesday October 6

• Data: US August trade balance, UK September construction PMI, Germany August factory orders, September construction PMI, France August industrial production, budget balance, Eurozone August retail sales, Canada August international merchandise trade
• Central banks: Fed's Williams speaks, ECB's Zigman and Cipollone speak, BoJ's Ueda speaks, BoE’s Mann speaks
• Auctions: US 3-yr Notes ($58bn)

Wednesday October 7

• Data: US September NY Fed 1-yr inflation expectations, August consumer credit, China September foreign reserves, Japan August laborcash earnings, leading index, coincident index, Germany August industrial production, France August current account balance, trade balance, Sweden September CPI
• Central banks: FOMC minutes, Fed's Logan speaks, ECB's Cipollone and Vujcic speak
• Earnings: Applied Digital
• Auctions: US 10-yr Notes (reopening, $39bn)

Thursday October 8

• Data: US August wholesale trade sales, initial jobless claims, UK September RICS house price balance, Japan September Economy Watchers survey, August BoP current account balance, BoP trade balance, Germany August trade balance
• Central banks: ECB’s account of September meeting, Fed's Musalem speaks, ECB's Zigman and Lane speak, BoE's Bailey, Greene and Lombardelli speak, BoE’s bank liabilities and credit conditions surveys
• Earnings: PepsiCo, Fast Retailing, Tesco
• Auctions: US 30-yr Bond (reopening, $22bn)

Friday October 9

• Data: US October University of Michigan survey, Japan August household spending, September machine tool orders, Italy August industrial production, Canada September labour force survey, Sweden August GDP indicator, Norway September CPI
• Central banks: ECB's Wunsch, Cipollone and Schnabel speak
• Earnings: Delta Air Lines

Looking at just the US, Goldman writes that the key economic data release this week is the trade balance report on Tuesday. The minutes to the September FOMC meeting will be released on Wednesday. There are several speaking engagements with Fed officials scheduled this week. 

Monday, October 5 

• 09:45 AM S&P Global US services PMI, September final (consensus 58.7, last 58.7)
• 10:00 AM ISM services index, September (GS 55.4, consensus 55.0, last 55.4): We estimate that the ISM services index was unchanged at 55.4 in September, reflecting sequential improvement in our non-manufacturing survey tracker (+1.0pt to 54.1), offset by downward pressure from convergence toward the level implied by other services surveys (which the ISM index is above).

Tuesday, October 6 

• 08:30 AM Trade balance, August (GS -$100.0bn, consensus -$102.0bn, last -$88.6bn)
• 09:05 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will moderate a discussion with Caryn Seidman Becker, Chair and CEO of CLEAR. On September 29, Williams said, "with the policy action we took at our September meeting, there is no need for urgency, and we have time to gather more information."
• 10:45 AM Fed Vice Chair for Supervision Bowman speaks: Fed Vice Chair for Supervision Michelle Bowman will speak on modernizing regulation and supervision at the Community Banking Research Conference at the Federal Reserve Bank of St. Louis. Speech text and Q&A are expected. On October 1, Bowman said, "After the Committee's action in September, what we need to have is a better understanding about the underlying trends in the economy and how financial conditions are evolving going forward. So, I don't currently see an urgent need for further action."
• 01:15 PM Kansas City Fed President Schmid (FOMC non-voter) speaks: Kansas City Fed President Jeffrey Schmid will participate in a fireside chat on monetary policy and rural development at the Enid Regional Development Alliance luncheon. On October 1, Schmid said, "We have a very simple and crisp mandate, and that's stable prices and full employment, and we just haven't fulfilled our promise on the inflation side."
• 07:00 PM Dallas Fed President Logan (FOMC voter) speaks: Dallas Fed President Lorie Logan will moderate a Q&A with former Bank of Mexico Governor Agustin Carstens. On October 1, Logan characterized the hike at the September meeting as "an important first step" in tightening policy but added, "Still, I currently estimate the target range needs to rise an additional 50 basis points or more to appropriately balance the outlook and risks for our dual mandate goals."

Wednesday, October 7 

• 02:00 PM FOMC meeting minutes, September 15-16 meeting: The September FOMC meeting was more hawkish than we expected. The dots showed a 16-2 majority projected at least one more hike this year, the median funds rate projection remained quite elevated through 2029, and the median neutral rate dot rose from 3.06% to 3.25%. The median SEP forecast showed substantially higher core PCE inflation in 2026 at 3.4% Q4/Q4 (vs. our current forecast of 3.0%) than now looks likely after last week's methodological revisions. We will look for details in the minutes on the assumptions underlying participants’ economic forecasts and views of the balance of risks at the time. 

Thursday, October 8 

• 04:30 AM Fed Governor Waller speaks; Fed Governor Christopher Waller will speak at the Central Bank of the Republic of Turkiye's İstanbul Economic Forum on the economic outlook. Speech text and Q&A are expected. 
• 08:30 AM Initial jobless claims, week ended October 3 (GS 200k, consensus 200k, last 197k); Continuing jobless claims, week ended September 26 (consensus 1,695k, last 1,701k)
• 10:00 AM Wholesale inventories, August final (consensus +0.7%, last +0.7%) 
• 01:40 PM St. Louis Fed President Musalem (FOMC non-voter) speaks; St. Louis Fed President Alberto Musalem will speak on the US economy and monetary policy at a Bloomberg event. Q&A is expected. On September 21, Musalem said, "I think it's crucial that policy puts a meaningful restraint on inflation," but added that "earlier and incremental policy firming is better and less disruptive than later and larger and potentially more abrupt policy action."

Friday, October 9 

• 10:00 AM University of Michigan consumer sentiment, October preliminary (GS 47.0, consensus 47.7, last 48.1); University of Michigan 5-10-year inflation expectations, October preliminary (GS 3.4%, last 3.4%)
• 04:00 PM Boston Fed President Collins (FOMC non-voter) speaks; Boston Fed President Susan Collins will give brief remarks at a conference at the University of Michigan's Ford School of Public Policy. Speech text is expected. On September 22, President Collins said that she supported the decision to raise the fed funds rate at the September FOMC meeting, adding that “a somewhat more restrictive fed funds rate will help ensure that inflation durably returns to target.”

Source: DB, Goldman

Tyler Durden Mon, 10/05/2026 - 12:49

Education Department Calls For Transparency And Tolerance... Teacher Unions Cry Foul

Authored by Jonathan Turley via JonathanTurley.org,

The decline of higher education into an ideological echo chamber has been widely discussed on this and other sites. Polls show record lows in the public trust in our universities and colleges as revenues decline and closures increase. Secretary of Education Linda McMahon responded to this meltdown with a common-sense call for greater transparency and tolerance.

The response from teacher unions has been nothing short of hysteria, led by Randi Weingarten at the American Federation of Teachers (AFT) and Todd Wolfson at the American Association of University Professors (AAUP) - two of the most polarizing and political figures in teaching.

Secretary McMahon released a policy statement titled "National Call to Action to University Presidents and Governing Boards." I encourage you to read it. Few Americans would disagree with the call for universities to post policies on how they can achieve greater intellectual diversity and openness in both admissions and hiring.

Not surprisingly, the AFT and AAUP went into a full cardiac arrest at the notion that universities would adopt such policies, let alone work to restore integrity and balance to higher education.

In a public letter, they denounced the policy as "galling." The letter was a telling moment from the two organizations most responsible for the politicization of education.

The AFT and AAUP merged not long ago, destroying the AAUP's traditional role as a neutral advocate for academic freedom. Under Wolfson, the organization has become blatantly political, even abandoning its long apolitical stance and issuing its first political endorsement this year. It was for radical Abdul El-Sayed in Michigan.

I recently debated Todd Wolfson, President of the American Association of University Professors (AAUP), over the loss of institutional neutrality in higher education. In the debate, I raised AAUP's own abandonment of neutrality principles, which Wolfson acknowledged. While the viewers overwhelmingly supported a return to neutrality principles, Wolfson was undeterred.

The alliance with AFT and Weingarten is crushingly predictable. Weingarten personifies what I have called the "education cartel," where teacher unions receive massive contracts and pension agreements from Democratic allies and then turn around and send massive political contributions to those same allies. The losers in this symbiotic relationship are of course the students and their families.

Weingarten is "credited" with turning the teachers' union into an extension of the Democratic Party, often appearing at political rallies with her signature high-volume screeds:

As public support and revenue for both public education and higher education plummet, these figures are doubling down. The last thing that they want to see is the restoration of neutrality or balance. That is why a policy calling for such reforms is so anathema to them. These organizations are now political organizations that use their dues to pursue radical agendas.

I previously criticized the selection of Wolfson, who promised to make the AAUP more of a "fighting organization" for liberal causes. A Rutgers University anthropologist and former union leader, Wolfson is a political activist who doubled down on the ideological intolerance that now defines higher education.

As promised, the AAUP quickly became a more radical and activist organization. It adopted an anti-Israel boycott policy and unleashed attacks on Trump supporters as "fascists." It has targeted civics centers as conservative breeding grounds. Trinity College Professor Isaac Kamola, the director of the AAUP's Center for the Defense of Academic Freedom (CDAF), explains that they want to unleash "naming and shaming and discrediting and undermining the legitimacy" of such programs.

So, as trust in higher education hits new lows, the AAUP is accelerating that decline by doubling down on ideological bias and political activism. In reality, the AAUP represents only a small fraction of university professors but is often viewed as speaking for the teaching academy as a whole.

I have previously written about the similar liberal agenda of the American Bar Association despite plunging membership among lawyers. The ABA now represents just 17 percent of the bar.

The AAUP currently has roughly 50,000 members. There are an estimated 1.5 million university and college professors in the United States. Both the ABA and AAUP have become captive to the most ideological elements of their membership. That agenda has overwhelmed the original apolitical mission of these groups.

The loss of the AAUP as a neutral arbiter for academic freedom is tremendous. As Wolfson acknowledged in our debate, it was once a voice for neutrality, avoiding ideological and political causes. It was central to the articulation of neutrality principles and core academic freedom values. We need such an organization now more than ever.

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

Tyler Durden Mon, 10/05/2026 - 12:40