Individual Economists

9 Terrifying Truths About Long-Term Economic Crises

Zero Hedge -

9 Terrifying Truths About Long-Term Economic Crises

Authored by Milan Adams via Preppgroup,

Why preparation matters less than adaptation, and why the next crisis will not resemble the last...

My father kept his layoff notice from 1982 taped inside his toolbox until he died. The letterhead - blue, corporate, indifferent - arrived on a Tuesday in March, six months after his machine shop started losing contracts. By August, we were living in my aunt's basement. By Christmas, he was driving a delivery truck for half his previous wage.

He kept that letter as a reminder about velocity. How fast the ground moves when it finally shifts.

Most Americans have never experienced that kind of speed. They've known recessions, certainly - the technical kind, the temporary kind, the kind that ends with rebounding markets and analysts declaring victory. They've never known a genuine crisis, the sort that grinds forward for years, rewriting the social contract so gradually that each degradation feels like common sense by the time it arrives. The sort that leaves permanent scars.

We may be closer than we think. Not because of prophecy, but because of arithmetic. Debt structures, demographic shifts, and institutional fragilities have accumulated to levels that historical precedent suggests are difficult to sustain. The question is not whether stress will come, but whether those experiencing it will recognize the tremors before they're already falling.

The Numbers Behind the Warning Indicator Historical/Current Figure Period What It Shows Why It Matters Peak unemployment (Great Depression) 24.9% 1933 One in four workers jobless Recovery required roughly 25 years; generational trauma persisted U.S. federal debt-to-GDP ~123% 2025 (most recent full year) Exceeds WWII peak; among highest in nation's history Interest payments now exceed $1 trillion annually; constrains fiscal response capacity Labor force participation (prime-age males, 25-54) ~80.5% 2024-2025 Down from ~96% in 1950s "Missing" workers not counted in unemployment; indicates structural economic exclusion U.S. bank failures (Great Depression) ~9,000 1930-1933 Collapse of financial intermediation Destroyed savings, credit access, and business formation for a decade Social Security trust fund depletion projection 2033 Current SSA estimate Mandatory spending exceeding dedicated revenue Automatic benefit reductions of ~23% or equivalent tax increases likely within most workers' careers Infrastructure grade (ASCE) C 2021 Report Card (most recent) Deferred maintenance across all categories Catastrophic failure probability increasing; replacement costs estimated at $2.9 trillion over 10 years Container shipping cost volatility $1,200-$20,000+ per FEU 2019-2024 15x price swing during pandemic/disruption Just-in-time systems vulnerable to shock; consumer prices follow transport costs Advanced semiconductor manufacturing (≤5nm) ~90%+ (Taiwan/Taiwan Strait region) Current Geographic concentration of critical production Geopolitical or natural disruption would cascade through global electronics, automotive, and defense sectors

Sources: Congressional Budget Office, Social Security Administration, Bureau of Labor Statistics, American Society of Civil Engineers, Federal Reserve Economic Data, industry trade publications

These figures describe conditions, not predictions. Debt at 123% of GDP does not automatically trigger collapse - Japan has sustained higher ratios for decades, albeit with trade-offs. But high debt constrains options. When stress arrives, heavily indebted governments have less capacity to respond through stimulus. When unemployment spikes, extended benefits exhaust faster. When infrastructure ages, maintenance competes with emergency spending. The numbers suggest a system with reduced resilience - less able to absorb shocks, slower to recover, more vulnerable to cascading failures. What they cannot show is timing, specific triggers, or whether institutional adaptations will prove sufficient. History offers examples of both successful navigation and catastrophic failure from similar starting positions.

First Reality: The Joblessness That Doesn't End

Temporary unemployment is an inconvenience. Chronic unemployment is a transformation. During the Great Depression, joblessness persisted not for months but for years - peaking at nearly twenty-five percent in 1933, still above fifteen percent in 1940. A quarter of the workforce didn't just lose income. They lost identity, social connection, and the psychological structure that employment provides.

The modern equivalent may already be developing. Labor force participation among prime-age males has declined steadily since the mid-20th century - not because jobs don't exist, but because available jobs don't match skills, locations, or expectations in ways that draw workers in. This "missing" workforce doesn't appear in unemployment statistics, creating potential blind spots in labor market assessments. When crisis hits, these margins can expand rapidly. Businesses fail. Positions vanish permanently, not temporarily. Skills atrophy. Networks dissolve. What begins as cyclical can become structural.

The housing market follows employment with a lag. Mortgage defaults accumulate for months before foreclosure waves crest. Neighborhoods hollow as owner-occupants become renters, then face displacement. Property values in some affected areas - parts of Detroit post-2008, certain Rust Belt manufacturing centers - have struggled to recover pre-crisis levels even decades later. The damage isn't always cyclical. Sometimes it's geological.

Personal savings recommendations - typically three to six months of expenses - assume temporary interruption. They don't account for multi-year income loss during which benefits exhaust, assets liquidate, and credit access disappears. Real preparation requires acknowledging that employment may not return on previous terms, that careers may end, that adaptation matters as much as preservation.

Second Reality: When Ordinary People Become Desperate

Economic compression doesn't just increase crime - it can change its nature. Professional criminals adapt to conditions. Amateurs, driven by genuine desperation, may behave unpredictably. They panic. They escalate. They make mistakes that turn property crimes into violent confrontations.

Historical patterns are documented. Argentina's 2001 collapse generated organized looting within weeks. Venezuela's deterioration produced criminal enterprises controlling food distribution through force. During the 1930s, American rural areas saw agricultural theft increase, while cities developed protection rackets and smuggling networks.

Contemporary data shows strain. Retail shrinkage has increased in recent years, with organized retail crime contributing significantly in many jurisdictions. As economic conditions tighten, participation may broaden. Individuals with no criminal history - former professionals, displaced workers, struggling families - may begin calculating risk differently when legitimate options narrow. Hunger and eviction concentrate the mind. Legal consequences can feel abstract when immediate survival is threatened.

Home invasion patterns have historically followed unemployment with a lag. The mechanism is comprehensible: savings deplete, desperation mounts, targets shift. Concurrently, municipal budgets can contract. Police departments may face difficult choices between personnel costs and other services. Camden, New Jersey, dissolved its municipal police force in 2013 due to fiscal insolvency; replacement required roughly eighteen months, during which criminal activity accelerated.

Personal security under these conditions isn't solely about defensive capability. It's about reducing visibility - appearing less prosperous than you are, avoiding predictable patterns, hardening entry points without advertising wealth. The goal is to avoid confrontation, not to win it.

Third Reality: The Fires That Spread

Protracted economic distress creates conditions for civil disturbance that can ignite from seemingly minor sparks. The ingredients - unemployment, inflation, governmental incompetence, perceived unfairness - combine gradually until reaching threshold. Then ignition. The specific trigger is often arbitrary: a price increase, a police interaction, a service reduction. Once started, disturbance can spread through networked populations faster than suppression capacity can mobilize.

Historical cataloging is extensive. The 1873 railroad strikes involved federal troop deployment and dozens killed. The 1932 Bonus Army occupation of Washington ended with military dispersal. The urban insurrections of 1967-1968 required National Guard activation in multiple cities. More recently, coordinated civil unrest in 2020 produced property destruction exceeding $2 billion in some estimates, with police stations abandoned in some jurisdictions.

The pattern often involves escalation that outpaces response. Initial protests may express legitimate grievance. Opportunistic elements may infiltrate. Property destruction can begin. Law enforcement may withdraw to protect personnel and facilities. Vacuums can fill with looting. Geographic expansion may follow contagion dynamics. By the time authorities respond effectively, commercial districts can be devastated. Insurance coverage may evaporate. Businesses may close permanently. Tax bases erode. Services contract. The cycle can reinforce itself.

Preparation requires hardening of fixed assets and community organization. Commercial properties need security barriers, reinforced entry points, fire suppression. Residential properties need defensible space, clear sight lines, structural reinforcement. Community coordination - mutual aid agreements, communication protocols, coordinated response - can multiply individual capability. Isolation is vulnerability. Connection can be strength.

Urban concentration can become liability during such periods. Population density facilitates rapid spread. Resource competition intensifies. Infrastructure dependency creates multiple potential failure points. Less dense positioning may reduce certain exposures. Self-sufficiency capacity - food production, water independence, energy generation - can become a survival determinant.

Fourth Reality: When the Medicine Becomes Poison

Governments respond to fiscal crisis through austerity: expenditure reduction, taxation increase, debt monetization. Modest application may stabilize. Sustained application can destroy.

Greece 2010-2018 demonstrates a trajectory. Troika-mandated austerity - pension cuts, tax increases, public sector layoffs - reduced GDP by approximately twenty-five percent. Unemployment exceeded twenty-five percent. Youth unemployment exceeded fifty percent. Suicide rates increased. Birth rates collapsed. Skilled labor emigrated. National capacity diminished.

The United States faces analogous pressures. Federal debt has exceeded one hundred percent of GDP. Interest payments consume an increasing share of federal revenue - now exceeding $1 trillion annually. Mandatory spending - Social Security, Medicare, Medicaid - crowds discretionary capacity. The policy options are constrained: tax increases may reduce productive activity; expenditure cuts reduce aggregate demand; debt monetization risks inflation. Paths may converge toward reduced living standards, though distribution varies.

Individual mitigation requires asset repositioning. Tax-advantaged accounts offer partial shelter. Geographic arbitrage - relocation to lower-cost or lower-tax jurisdictions - may preserve purchasing power. Currency diversification - precious metals, foreign assets, alternative stores - may reduce sovereign exposure. None eliminates risk. All distribute it differently.

Fifth Reality: The Thin Thread of Global Commerce

Integrated production networks function during stability. They can disintegrate during stress. Minor disruptions - port congestion, labor disputes, fuel price spikes - can cascade through just-in-time systems. Major disruptions may generate systemic failure.

Container shipping rates illustrate volatility. Pre-pandemic norms around $2,000 per forty-foot unit spiked to $20,000 during 2021 disruptions, then collapsed, then rebounded. Such oscillation destroys planning capacity. Inventory management becomes difficult. Retail pricing becomes erratic. Consumer behavior may shift toward hoarding.

Manufacturing concentration amplifies vulnerability. Critical components - advanced semiconductors, certain pharmaceuticals, rare earth elements - originate from geographically concentrated sources. Taiwan and its immediate region produce the vast majority of the most advanced semiconductors. Disruption of major nodes can generate global shortage. The COVID-19 experience demonstrated this: semiconductor shortages idled automotive plants; pharmaceutical supply constraints affected treatment protocols; personal protective equipment scarcity required rationing.

Personal preparation requires inventory depth. Critical spares must be procured while available. Repair capability must be developed while instruction is accessible. Substitution planning must be completed while options exist. The window for preparation is uncertain. The need is not.

Sixth Reality: When Trust Evaporates

Fractional reserve banking depends on confidence. Depositors believe their money is available. Physically, it is not immediately present. Banks hold a fraction of deposits as reserves; the remainder is lent, invested, or deployed. Confidence failure - bank runs - can reveal liquidity constraints immediately.

Historical precedent is extensive. The United States experienced thousands of bank failures during the early 1930s, with deposits frozen. More recently, major institutions failed in 2008. Global financial systems froze. Central bank intervention prevented cascade but did not eliminate systemic risk.

Current conditions include challenges: unrealized losses on bond portfolios, commercial real estate exposure, and significant uninsured deposits. Social media enables rapid information propagation. Digital banking enables rapid withdrawal. The combination creates potential for rapid confidence shifts.

Mitigation requires distribution. Account balances should remain below insurance limits where possible. Institutions should be diversified across multiple banks and potentially jurisdictions. Physical currency should be maintained as backup. Barter commodities may retain utility when electronic systems fail or are restricted.

Seventh Reality: When Calories Become Currency

Food systems operate on thin margins. Producers require price stability, input availability, transportation functionality, market access. Economic crisis can disrupt all simultaneously.

Input costs - fuel, fertilizer, seed - escalate with energy prices. The Haber-Bosch process, which produces nitrogen fertilizer, consumes significant natural gas. Transportation costs escalate similarly. Processing capacity operates near limits. Bottlenecks form. Prices spike.

Government intervention can worsen outcomes. Price controls may reduce production incentives. Export bans may reduce global supply. Subsidy elimination may bankrupt marginal producers. The result can be simultaneous surplus and shortage: commodities exist, but distribution fails.

Historical parallels include Soviet collectivization and Sri Lanka's organic fertilizer mandate. Both produced yield collapse and food crisis. Contemporary vulnerability includes concentrated processing - limited slaughterhouses, grain storage, canning capacity.

Personal preparation requires production capacity. Garden cultivation generates supplemental calories. Animal husbandry provides protein. Preservation skills extend availability. Storage infrastructure protects inventory. Skills require years to develop. The time to begin is before necessity compels it.

Eighth Reality: When Infrastructure Meets Inevitability

Catastrophic events stress systems designed for routine operation. Economic crisis can degrade maintenance, preparation, and response capacity. Catastrophe can become disaster; disaster can become collapse.

Hurricane Katrina demonstrated risks. Federal, state, and local coordination faced significant challenges. Approximately 1,800 deaths. $125 billion in damage. The Superdome became uninhabitable quickly. Police abandoned posts in some areas. Looting and vigilante violence followed. The event lasted days. Consequences persisted for years.

Current infrastructure ages. The American Society of Civil Engineers most recently graded U.S. infrastructure at C. Deferred maintenance accumulates. Replacement costs are estimated in the trillions. Catastrophic failure probability may increase while response capability faces constraints.

Personal preparation requires redundancy. Water: filtration, storage, well access. Power: generation, storage, non-electric alternatives. Sanitation: disposal, treatment, disease prevention. Communication: radio, mesh networks, physical coordination. Shelter: repair materials, weatherproofing, climate control. Community organization multiplies individual capacity.

Ninth Reality: The Only Preparation That Matters

Economic crises are not aberrations. They are features of systems that accumulate imbalances until correction becomes necessary. The timing is uncertain. The recurrence is not.

Current indicators suggest elevated vulnerability. Whether this manifests as gradual degradation or acute rupture remains unknown. What is knowable is that preparation based solely on inventory addresses only initial phases.

True preparation is capability. Skills that persist when tools break. Networks that function when institutions fail. Adaptability that accommodates circumstances rather than demanding conformity to plans. My father's toolbox reminder wasn't about the layoff itself. It was about what came after - the years of adaptation, the humility of starting over, the recognition that identity must transcend employment.

Stress, if it comes, will not announce itself clearly. It may arrive wearing the mask of normalcy, then accelerate beyond reaction capacity. Those who recognized patterns early may adapt. Those who waited for confirmation may consume their preparation just understanding that preparation was necessary.

Choose capability over inventory. Choose community over isolation. Choose skills over supplies. The ground moves. The question is whether you'll recognize the tremor before you're already falling.

Tyler Durden Wed, 09/16/2026 - 23:25

J-50 Designers Reveal "Leapfrog" Technology For China's Next-Gen Stealth Fighter

Zero Hedge -

J-50 Designers Reveal "Leapfrog" Technology For China's Next-Gen Stealth Fighter

China’s next-generation combat aircraft will be able to fly by themselves if a pilot loses consciousness, navigate without satellite signals and operate in self-reorganising large drone formations. That is the plan laid out by researchers from the Shenyang Aircraft Design & Research Institute, a top Chinese military aircraft design organisation, in a paper last month, the SCMP reported.

The institute is associated with the development of the Chinese next-generation aircraft commonly referred to as the J-50, which first appeared in flight-test imagery in December 2024, although the paper does not mention the J-50 by name or confirm that the aircraft will incorporate any of the described technologies.

China’s future fighters, including the J-50 and J-36, are considered rivals to the US Air Force’s sixth-generation main fighter programme, the F-47, being developed by Boeing.

The lead researcher is chief flight-control designer Zhang Dong at the institute, and his team’s paper – rare for its public details – was published in a peer-reviewed journal Aircraft Design in August.

China’s next-generation stealth fighter programs were undergoing a “leapfrog transformation from being able to fly steadily to being able to win in combat”, wrote Zhang and his colleagues.

Zhang’s study presents a future of pilots handing over control during periods of extreme workload or incapacitation, quantum navigation technologies supporting operations in satellite-denied environments and crewed fighters coordinating attack, reconnaissance and protection missions with reconfigurable wingman drones.

The team’s institute is part of the state-owned Aviation Industry Corporation of China, which oversees much of the country’s aircraft research and development.

Its subsidiary, Chengdu Aircraft Industry Group, is also developing the J-36 fighter, widely regarded as another candidate for China’s next-generation sixth-generation combat aircraft.

In 2025, an investigation by defence news website, The War Zone, using satellite imagery found that the Chengdu J-36 and the Shenyang J-50 aircraft were both based at an experimental military airfield near Lop Nur, a highly secretive site for aerospace test flights that has often been compared to the United States’ Area 51.

Their simultaneous presence at the same base suggested that China’s military was actively supporting the parallel development of the two programmes.

Zhang’s paper presents a rare technological road map for future combat aircraft, describing a fundamental restructuring of the flight-control system from a device concerned mainly with flight quality into a core enabler of collaborative engagement, intelligent manoeuvre and mission effectiveness.

The change reflected what the authors described as three successive eras of air combat.

In the earlier “energy manoeuvrability” era, victory depended heavily on physical manoeuvring performance in close-range combat, while flight-control systems were largely closed and centralised, with specialised hardware and software designed mainly to keep the aircraft stable, controllable and responsive to pilot inputs.

The rise of long-range radar, stealth shaping and precision-guided weapons shifted combat towards “information manoeuvrability”, where detecting, tracking and attacking an opponent before being detected became increasingly important.

Fifth-generation aircraft such as the F-22 and J-20 use full-authority digital fly-by-wire systems and increasingly integrate flight control with fire-control and propulsion systems through high-speed data links.

The authors argued that the next phase was “cognitive manoeuvrability”, in which artificial intelligence, autonomous systems and distributed networking allowed air combat to move from platform-versus-platform competition towards system-level contests involving manned-unmanned formations.

This changes what flight control is expected to do.

“The functional positioning of the flight control system is undergoing a fundamental restructuring – from a platform controller merely pursuing flight quality to a core enabler of collaborative engagement management, intelligent manoeuvre decision-making and closed-loop mission effectiveness,” Zhang and his co-authors wrote.

The first major capability is autonomous flight control.

Instead of making pilots constantly turn high-level battle plans into precise stick movements, the new system would let on-board intelligent algorithms do that job automatically, translating tactical orders into smooth, continuous flight actions while keeping the aircraft safely within its physical limits, even during extreme manoeuvres.

The aircraft would constantly monitor its own health by fusing data from sensors such as inertial navigation, airspeed indicators, control-surface positions and engine performance.

This would allow it to assess its flight state, estimate remaining manoeuvrability and detect potential problems before they develop into emergencies.

The system could then automatically adjust control settings and redistribute on-board resources while strictly enforcing safety boundaries to avoid stalls, loss of control or stuck control surfaces.

In particularly stressful situations, the aircraft could take over from the pilot.

The paper proposes allocating control authority between humans and autonomous systems so that pilots can spend less effort on low-level aircraft handling and more on battlefield assessment and tactical decisions.

During periods of excessive workload or if a pilot loses the ability to control the aircraft, the system could take control and continue executing the intended tactical task while prioritising flight safety.

The second major change concerns navigation.

Future combat aircraft may need to operate when satellite navigation is jammed, disrupted or unavailable, prompting the researchers to identify quantum inertial navigation, visual navigation, geomagnetic navigation and terrain matching as potential technologies for passive autonomous navigation.

The paper proposes combining data from various sensors to reduce errors and prevent failures caused by the degradation or loss of any single sensor under severe electromagnetic interference.

Quantum inertial navigation is therefore presented as part of a broader effort to give aircraft an independent sense of movement and position, rather than as a replacement for GPS.

The study framed these technologies as areas requiring further engineering research and implementation, rather than saying a quantum navigation system had already been deployed on a Chinese fighter.

The biggest shift, however, may come from the way multiple aircraft work together.

Future formations could pair crewed fighters acting as command nodes with uncrewed wingmen assigned to reconnaissance, attack and protection roles. Flight-control systems would coordinate their positions, routes, electromagnetic spectrum use and weapons-launch windows while dynamically allocating tasks between aircraft.

The authors saw this as more than a traditional formation controlled by a single leader.

If an aircraft suffered a malfunction or combat damage and left the formation, the remaining aircraft could automatically reorganise, replace the missing node and redistribute its unfinished tasks.

The system used consensus-based coordination and a dynamic “virtual leader” replacement mechanism to maintain autonomous operation without relying on a permanent central node.

Zhang and his team said single-aircraft autonomous control guaranteed survival in complex environments, while swarm coordination delivered multiplied combat effectiveness.

The paper pointed towards a more heterogeneous air-combat network rather than a simple arrangement of one crewed fighter and several identical drones.

It further highlighted large collaborative wingmen alongside various aircraft and autonomous platforms, suggesting a future architecture in which crewed fighters, larger unmanned aircraft and smaller autonomous systems could perform different functions within the same network.

Aircraft such as the Chinese Y-20 transport aircraft, the J-20 fighter and even the H-20 stealth strategic bomber, which is believed to be under development, could potentially form part of such a combat network.

However, Zhang and his team did not say whether the “combat group”, or the crewed “lead aircraft” and unmanned wingmen, would consist mainly of large numbers of drones or a combination of the larger aircraft described above.

The Shenyang Aircraft Corporation and the paper’s authors did not respond to a request for comment.

Based on the paper’s publicly available discussion, the researchers suggested retaining conventional systems engineering as the safety backbone while using intelligent tools for tasks such as parameter optimisation, test expansion, automated testing and defect detection, with early trials conducted on lower-cost uncrewed platforms before broader adoption in major aircraft.

But the researchers do not advocate handing the aircraft’s most safety-critical functions directly to artificial intelligence (AI).

Instead, they identified a basic engineering conflict between intelligence and flight safety.

Data-driven algorithms can be difficult to explain and verify, and they might not apply in every situation, especially in extreme scenarios.

Applying such systems directly to the innermost control loops could therefore introduce unpredictable risks.

The proposed solution was a layered architecture.

“Engineering practice widely adopts a hybrid architecture with a closed core and open periphery,” the team wrote, allowing high-reliability, real-time functions to remain tightly controlled while more flexible software functions could be upgraded and connected across different platforms.

Under this model, the inner loop would retain conventional, highly deterministic controls for functions such as attitude stabilization, control-surface actuation and hard flight-envelope protection.

AI would operate mainly in the outer loop, handling tactical decision-making, trajectory optimization, multi-aircraft coordination and payload adaptation, while rigid safeguards would constrain its commands so that its recommendations remain inside a safe operating envelope.

The researchers called for further work on open layered architecture, verifiable intelligent flight control and cross-domain cooperative control, supported by large-scale simulation and flight-test data to improve the robustness and verifiability of intelligent models.

Tyler Durden Wed, 09/16/2026 - 23:00

How Trump's Iran Operation Turned Into A Forever War

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How Trump's Iran Operation Turned Into A Forever War

Authored by Harrison Berger via Responsible Statecraft,

As the United States has struggled to secure its four primary objectives in the Iran War - achieving regime change, dismantling long-range ballistic missiles, eliminating nuclear enrichment, and halting Tehran's support for regional proxies - U.S. officials have rolled out a series of tried-and-failed theories for how to achieve those goals.

In the past four weeks, Americans have watched their government attempt to inflict an economic victory against Iran through Operation Economic Outcast, tightening a sanctions regime which for decades has strangled Iran's economy without resolving the underlying dispute.

Now, as that strategy flags, we have seen the Trump administration return to its older strategy of kinetic strikes against Iran. Those strikes, too, have failed to achieve their desired objectives.

Facing the prospect of a self-inflicted defeat, the U.S. has now proposed two new paths forward.

The first, reported by the Wall Street Journal last Wednesday, is an option to extend and formalize the current series of on-and-off strikes U.S. officials call this "mowing the lawn," or a strategy of using periodic bouts of disproportionate force, as Israel did in Gaza prior to launching its full-scale, seemingly endless campaign after the Oct. 7 attacks of 2023. To support that option, the Pentagon has extended troop deployments in the Middle East through 2027.

The second option reportedly considered by the White House is for the U.S. to declare victory and walk away, with the Wall Street Journal reporting that Trump favors the idea. Among the supporters of the second option is Joe Kent, the former Director of the National Counterterrorism Center, who resigned in protest of the Iran War, and who has argued on X that the U.S. should "reset the terms of the deal" with Iran "by removing our troops & ships from the region." The argument that the U.S should walk away and "declare victory" is growing increasingly popular even in establishment circles.

But given the historic limitations of sanctions to achieve political outcomes, coupled with Iran's current demands, that strategy too appears unlikely to re-open the Strait of Hormuz and avert the economic consequences Iran's leverage over the waterway will have on the global economy.

Political scientists have long doubted whether U.S. economic pressure and sanctions can shape political outcomes, particularly when the targeted state has little reason to believe these measures will be reversed in exchange for good behavior; researchers like David Siegel are quick to acknowledge that they "don't work," while U.S. officials like Janet Yellen have conceded the same point, noting that, while sanctions against Iran had caused a "real economic crisis," they produced political outcomes "much less than we would ideally like."

As Siegel - who most recently studied the failure of U.S. sanctions on Russia to redirect their state behavior toward U.S. and NATO interests - explains, "target states have strong incentives not to give in and sometimes even benefit from heightened levels of political support at home because they can now credibly blame their economic woes on a foreign imperial power." Siegel argues that it's "probably more true today than ever before due to the fact that sanctioned states can turn to China."

The low likelihood of economic pressure opening up the Strait of Hormuz is depressed even further by the fact that one of Iran's preconditions for opening the Strait of Hormuz is the removal of sanctions, which would require a vote from Congress, where the proposal would face an uphill battle.

But perhaps the main reason walking away and declaring victory would fail to re-open the Strait and mitigate impending economic disaster is because Iran has tied freedom of navigation in the waterway to the U.S. reining in Israel, and the U.S. has long demonstrated it is unwilling to do so.

The June 17 agreement between the U.S. and Iran only required the U.S. force an Israeli withdrawal from Lebanon, and Washington failed to follow through. Now, subsequent provocations by the U.S. and Israel have led Iran to expand its ceasefire demands to other campaigns: in Iraq, in Yemen, and in Palestine.

Securing a deal to re-open the Strait and end the war is further complicated by the growing view around the world that the "Art of The Deal" author is simply incapable of making deals. Results of a 2025 Politico survey of diplomats from 15 countries show foreign officials describing Trump's deal-making process as "reactive, with no clear direction," while Trump has so far failed to resolve a proxy war in Ukraine that he promised to end "within 24 hours" of taking office. The White House has similarly failed to reach a peace deal in Gaza.

Under these conditions, the broader Iran War appears to be rapidly approaching what a chief executive of a Danish shipping firm described to the Financial Times as a "Ukraine-style stalemate." Speaking to the outlet in August, the CEO of Torn explained how "the Gulf leadership has realized they need to prepare themselves for a prolonged situation that lasts not days or weeks but months or years," adding that "with the U.S. acting the way it is, I think it is a dream world to imagine the world returns to the way it was 10 years ago in the foreseeable future."

The consequences of that "prolonged situation" will soon be felt even more by American consumers, as Iran's control over the Strait of Hormuz has pushed diesel prices to their highest ever levels. Averting economic catastrophe will therefore require the U.S. to meet conditions it has so far been unwilling to accept; merely declaring victory and walking away won't do the trick.

Tyler Durden Wed, 09/16/2026 - 22:35

Paramount Eyes California Exit, Hunts Nashville Offices As "Insane Communist Wackos" Ruin State

Zero Hedge -

Paramount Eyes California Exit, Hunts Nashville Offices As "Insane Communist Wackos" Ruin State

Paramount Skydance Chairman and CEO David Ellison is exploring a potential California exit as the studio battles a multistate challenge to its $111 billion acquisition of Warner Bros. Discovery.

Politico reported late Wednesday that the studio is seeking roughly 400,000 square feet of office space in Nashville, signaling that its relocation is in the works. We have reported in the last few days and last month of Paramount's plan to exit the left-wing state (read here & here). 

The studio could move at least some operations to the Tennessee capital within two to three years, according to the report. No relocation has been announced, but the search raises the risk that California could lose a major Hollywood studio headquarters. Such a loss would deepen concerns about the state's ability to retain businesses as its entertainment industry struggles and the exodus of businesses and residents shows no signs of stopping.

Starting in October, Paramount will owe roughly $7 million for each day the transaction remains incomplete, according to the report. That amounts to approximately $210 million over 30 days.

The Paramount-Warner Bros. deal faces an antitrust lawsuit from 12 states, including California, despite approval from the US Justice Department in June and regulators in more than 60 countries and jurisdictions. The trial is scheduled for March, with settlement talks in San Francisco next month.

California Attorney General Rob Bonta, who is leading the lawsuit, has called Paramount's relocation threat nothing more than "blackmail."

For Hollywood, the potential studio loss extends beyond another corporate exit; the exodus includes Chevron, Tesla, SpaceX, Oracle, Charles Schwab, and many others.

Tennessee has actively courted the studio. Nashville also has an existing Ellison family connection: Oracle, co-founded by Larry Ellison, announced plans to move its headquarters there in 2024. Larry Ellison is also financially backing his son David's Warner Bros. deal.

"I tried to warn you. LA is getting absolutely decimated by the insane communist wackos running California. Bob Bonta's jihad against Paramount is a death blow. What a corrupt piece of shit," Spencer Pratt wrote on X.

Tyler Durden Wed, 09/16/2026 - 22:10

Kirk Family Plans Wrongful Death Suit Against Utah Valley University, Others

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Kirk Family Plans Wrongful Death Suit Against Utah Valley University, Others

Authored by Savannah Hulsey Pointer via The Epoch Times,

Charlie Kirk's family announced plans to file a wrongful death lawsuit alleging that security failures contributed to the fatal shooting of the conservative commentator last year.

In a Sept. 9 legal notice, the plaintiffs assert that the defendants' failures "led to the assassination" and that the university and others were negligent in providing security for the event where he was killed.

"Charlie Kirk was a once-in-a-lifetime public and political figure," the notice said, noting that Kirk's death occurred "when political violence had hit a fever pitch."

The notice was sent to the Office of the Utah Attorney General the day before the first anniversary of Kirk's death.

It named the state of Utah, Utah Valley University, the Utah Valley University Police Department and its Police Chief Jeffrey Long, former university President Astrid Tuminez, and others, as subjects of the suit.

Additionally, Turning Point USA claims to have notified the university police about security risks, specifically those posed by rooftops overlooking the amphitheater where Kirk made his final remarks.

The suit, which has not yet been filed, would be brought by Kirk's estate, his heirs, his wife Erika Kirk, the late Turning Point USA founder's parents, Robert and Kathryn Kirk, and others.

The notice says that university police failed to control access to the rooftop from where the shooter aimed.

Utah Valley University and its police department, as well as other defendants, did not respond to The Epoch Times' request for comment.

A representative from the Utah Attorney General's office responded by asking that The Epoch Times direct inquiries to the university.

Tyler Robinson, 23, has been charged with Kirk's killing, and the state of Utah is seeking the death penalty. Robinson has pleaded not guilty.

The accused assassin allegedly sent text messages that are consistent with a plan to permanently silence Kirk, the prosecution said.

The trial date is expected to be set at a hearing in late October. During a Sept. 1 preliminary hearing, the prosecution alleged that Robinson had motive, means, and opportunity to kill Kirk.

Utah Fourth District Court Judge Tony Graf Jr. ruled that the prosecution demonstrated probable cause during the hearing. Robinson will stand trial for seven charges, including aggravated murder.

The other charges include two counts of obstructing justice, two counts of witness tampering, along with causing serious bodily harm by discharging a firearm, and committing violence in the presence of a child.

Testimony during a July evidentiary hearing indicated that Robinson asked his former roommate and romantic partner to delete messages from Robinson. The male roommate also offered to record testimony stating that Robinson cried and voiced regret after the Kirk shooting.

In Robinson's text messages, he allegedly admitted responsibility and explained his motive, as well as outlining a week of planning before the shooting took place.

Tyler Durden Wed, 09/16/2026 - 21:45

Why CPI Ignores Homes, Stocks, And The Cost Of Getting Ahead

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Why CPI Ignores Homes, Stocks, And The Cost Of Getting Ahead

Authored by Karl-Friedrich Israel via The Daily Economy,

The median-priced home in America now costs $440,600, while the median household earns roughly $84,000 a year. That gap has left a growing share of Americans priced out of buying altogether, while those who already own homes and hold stocks have watched their wealth compound. The renter-owner wealth gap is now the widest on record. Meanwhile, equity markets keep setting new highs. None of this, officially, counts as inflation.

In a previous piece, I explained that the Consumer Price Index leaves out a large and growing share of what households are really forced to pay for: government spending financed by taxes rather than purchased voluntarily on markets. That is one CPI blind spot. There is a second, and it is arguably more consequential for how Americans experience economic reality. The price of stocks, homes, and other assets essentially does not appear at all in conventional inflation measures.

Why Asset Prices Fall Outside The CPI

The reason again traces back to the index-number theory Gottfried Haberler laid out in Vienna in 1927, which I've written about elsewhere. Haberler showed that the standard price indices economists use - Laspeyres and Paasche, and averages of the two - can be trusted as measures of an individual's true cost of living only under a specific set of assumptions about that individual. One of those unstated assumptions is that the individual is a pure consumer: someone who spends the whole of their income on present consumption, full stop. No saving. No portfolio. No home, or even portion of a home, purchased as an investment rather than simply a place to live.

That assumption is a reasonable simplification for the sake of theoretical tractability. It is also the reason a stock portfolio or a home's resale value has no place in a cost-of-living index built on Haberler's logic. The CPI does track shelter, but only through "owners' equivalent rent" - an estimate of what it would cost to rent the service flow of a home, not the price of the home as an asset. Equities do not enter the index in any form. A pure consumer, by design, does not hold assets. An index built for a pure consumer has nothing to say about what happens to their prices.

A Reasonable Exclusion With A Widening Consequence

That exclusion made the CPI theoretically coherent - it's meant to measure consumer spending, after all. It also means that some of the fastest price inflation in the American economy over the past three decades has been completely invisible to the number the Federal Reserve targets (the PCE price index) and the media reports (the CPI).

Since 1995, the S&P 500 has compounded at roughly 9.2 percent a year (15x) and home prices, as measured by the Case-Shiller index, at about 4.7 percent a year (4x). The CPI, over the same period, rose about 2.6 percent a year (2.2x). Stocks have outrun consumer prices by a factor of more than three; home prices, by nearly two. The CPI alone has no way of seeing any of these inflationary pressures - not the run-up in home prices that has priced many younger Americans out of the market, nor the equity gains flowing overwhelmingly to households that already owned assets before the run-up began.

Why Assets, In Particular?

If asset prices simply drifted upward for reasons unrelated to monetary policy, and the PCE's and CPI's exclusion of them was a harmless accident, we might more easily excuse CPI's shortcomings. But there is a plausible monetary explanation for why the exclusion has mattered so much specifically since the mid-1990s.

If money were neutral and its growth simply distributed itself proportionally across real output growth and consumer price inflation, the M2 money supply should grow at roughly the sum of real GDP growth and CPI inflation over time. We can check that directly: take average M2 growth and subtract the sum of average real GDP growth and average CPI growth, before and after 1995.

From 1959 through 1994, M2 grew at 7.2 percent a year, against real GDP growth of 3.5 percent and CPI inflation of 4.7 percent - a combined 8.2 percent. The gap was slightly negative: roughly 1.0 percentage point a year. Money growth, if anything, ran a bit behind the pace of real economic growth and consumer price inflation combined.

Since 1995, the picture flips. M2 has grown at 6.2 percent a year, while real GDP and the CPI have grown at 2.5 percent per year each - a combined 5.0 percent. The gap is now a positive 1.2 percentage points a year, a swing of roughly two full points from the prior 35 years.

That is not a rounding error compounding harmlessly in the background. Over three decades, a persistent 1.2-point annual gap compounds into a very large sum of money that was created by government, but not absorbed by real output growth. By definition, it did not show up as measured consumer price inflation.

Money Is Not Neutral

Additional money does not raise every price by the same proportion, leaving the underlying structure of the economy untouched. It enters the economy at specific points - through banks, credit markets, and the institutions that first receive newly created liquidity - and its effects ripple outward unevenly from there. By the time new money reaches the people, higher prices have already consumed its extra value. Austrian economists, like Haberler's contemporary Friedrich Hayek, have long described this with the Cantillon effect. In an economy where basic consumption needs are largely saturated for a large share of households, additional liquidity is more likely to flow into savings and investment vehicles, such as stocks and real estate, than into proportionally higher demand for groceries and clothing.

That is precisely the pattern in the data. The monetary overhang that opened up after 1995 lines up closely with the period over which stocks and home prices pulled away from the CPI. None of this proves a single, simple causal explanation. Asset prices respond to many forces, from productivity growth to demographics to global capital flows. But a persistent, multi-decade gap between money creation on the one hand and real growth plus consumer price inflation on the other is exactly the kind of monetary overhang that should show up somewhere. In a consumption-saturated economy, the most likely place for it to show up is in the price of the assets the CPI was never built to measure.

That leaves conventional inflation measures with two blind spots stacked on top of each other. The CPI omits the government-financed consumption taxpayers cannot opt out of, and it omits the asset-price inflation driving the widening gap between those who already own homes and stocks and those still trying to buy in. Neither omission is a flaw in how the CPI is calculated. Both are consequences of what the CPI was, by its own underlying economic theory, never designed to measure.

Tyler Durden Wed, 09/16/2026 - 20:55

Lavrov Warns That If NATO Attacked Russia, War Would Be "Very Short"

Zero Hedge -

Lavrov Warns That If NATO Attacked Russia, War Would Be "Very Short"

Russian Foreign Minister Sergey Lavrov has again responded to allegations of European officials that Moscow seeks to expand the war beyond Ukraine.

We earlier detailed how recent drone spillover from the conflict, including explosive-laden drones coming out of Belarusian territory and threatening the Baltics, has resulted in Western officials increasingly alluding to NATO 'collective defense'.

This is highly dangerous as it means the situation could rapidly escalate into full-blown Russia-NATO direct confrontation on the basis of a single aircraft shootdown.

In his fresh remarks from Ekaterinburg, Russia - where he was addressing the International Youth Festival on Wednesday, FM Lavrov made clear that Russia has not intent of ever attacking Europe.

Kremlin file image: FM Sergey Lavrov

But he coupled the statement with a very severe and ominous warning, that could have nuclear implications.

"I would like to emphasize that we have no interest in engaging in this [attacking Europe], but if Europe, which is talking about preparing for war against Russia on a daily basis, attacks Russia, it will be a completely different war, and it will be very short," Lavrov said in remarks translated by national media.

According to more:

The minister also expressed the hope that Europe had heard the warning about a short war in the event of an attack on Russia.

Sergey Lavrov expressed doubts regarding the idea that the world is being governed based solely on agreements between the United States and China, noting that China has a completely different approach to global affairs.

Again, though not expressly stated, Lavrov's warning hints a using nuclear weapons - given the emphasis on such a conflict being "short".

Reading between the lines, he is saying that while Russia doesn't want to go to war with Europe, the only scenario where that would be possible is if Russia is under direct attack and deems its existential survival at stake. Such a thresh-hold reached would likely justify use of strategic forces if President Putin made the decision. 

What's different or curious about the veiled Lavrov warning is that it is typically the 'hawk' Dmitry Medvedev making them. The former Russian president and current Deputy Chairman of the Security Council is typically the one making such maximalist warnings.

All of this suggests the Kremlin sees escalation with NATO in the atmosphere, which it authentically doesn't seem to want.

Tyler Durden Wed, 09/16/2026 - 20:30

Bill Gates Calls For Globalist Crackdown On AI

Zero Hedge -

Bill Gates Calls For Globalist Crackdown On AI

Authored by Steve Watson via Modernity News,

Bill Gates has a new emergency. With the climate apocalypse no longer selling, the Microsoft co-founder is touring the press circuit warning that artificial intelligence is an "alien intelligence," that no government on earth is ready for it, and that the only fix is an international organization to police the technology.

President Trump has already rejected the pause. The left, the globalist class, Beijing's spy chief, and now a Sundance-to-Netflix documentary are all at once selling the same story.

In a Reuters interview published Tuesday, Gates said no capital is prepared for what is coming. "I don't think any government is nearly as deep on this as they have to be," he told the outlet. "Governments are way behind on this one."

He compared AI to a Hollywood invasion plot in which Washington and Beijing suddenly hold hands. "There's all sorts of movies where some aliens are coming, and magically the US and China and everybody comes together to solve the problem," Gates said. "AI is kind of like this alien intelligence. It's here, and we better do like it shows in those movies."

The New York Post framed it as a "terrifying warning." Forbes led with the line Gates attached to his foundation's Goalkeepers report: left to the market, "AI will be designed by and for the richest people in the world."

He wrote that AI could be "a great equalizer - or widen the gap," and that choices made in "the next 12 to 18 months" will decide whether the tools "benefit the people who already have the most or reach those who have the least." He added that the good outcome "won't happen by accident."

On The Times Tech Pod, Gates went further and called for a dedicated global apparatus. Industry, he said, should not be trusted to police itself. "It's not the role of the industry to self-regulate or understand the whole-of-society impact that comes out of AI," he argued. "The depth of understanding of AI ... is too low in every entity, including the government."

In a late-August essay, Gates wrote that "the transition to the AI era will be one of the most turbulent times in human history" and that "unfortunately, right now, we are not preparing for it."

He floated a new international organization built from pieces of nuclear inspections, aviation rules, and ozone treaties - a permanent cross-border watchdog for a technology American labs still lead. He has been pitching the same idea to Trump's team and says he wants a meeting with China's Xi Jinping later this year.

While Gates talks crisis, his foundation is writing checks to expand the thing. On Tuesday the Gates Foundation pledged at least $1 billion over two years to spread AI in education, health, and agriculture - 40 percent tutoring and classroom tools, 40 percent diagnostics and drug discovery, the rest farming advice and the data layer that makes models work in languages other than English. The money sits inside a previously announced $9 billion-a-year spend.

David Sirota caught the split in one line.

That is the move. Sound the alarm. Demand a global referee. Keep a foundation-sized stake in the rollout.

This is not Gates' first end-of-the-world product. For years he sold net-zero as civilization's last exit - fewer cows, fake meat, the whole ritual. Then the data-center boom needed power, lots of it, and last October he allowed that climate change "won't lead to humanity's demise." Trump treated the climbdown as a concession speech. "I (WE!) just won the War on the Climate Change Hoax," he wrote. "Bill Gates has finally admitted that he was completely WRONG on the issue. It took courage to do so, and for that we are all grateful. MAGA!!!"

The scare apparatus was not retired. Once everyone realised the planet was not going to cook on schedule, the same network needed a replacement threat big enough to justify treaties, inspectors, and "international coordination."

AI arrived on cue: jobs, cyberattacks, companions, bioterror, "loss of control." All of it real enough to discuss. None of it a license to park American development under a UN-flavored commission while Beijing keeps shipping cheap open-weight models.

The entertainment wing has added its own contribution in the same news cycle. Netflix has just put up The AI Doc: Or How I Became an Apocaloptimist, the Sundance premiere from Oscar-winner Daniel Roher (Navalny) and Charlie Tyrell. The film sits Sam Altman, Dario Amodei, Demis Hassabis, Reid Hoffman, Yuval Noah Harari, and the usual "humane tech" chorus in front of a camera and walks the audience through impending AI dread dressed up as a father-to-be's anxiety.

One of the producers said the hope was that it would work "kind of like 'An Inconvenient Truth' or 'The Social Dilemma' for AI." That is the tell. Same template. New monster.

The film premiered at Sundance in January, played theaters in March, and dropped on Netflix this week - the same week Gates, Obama's orbit, Bernie Sanders, and the lab CEOs were all pushing slowdown and supervision.

The Sundance Documentary Film Program was built with founding money from George Soros's Open Society Foundations. Users circulating the credits call the Netflix drop a globalist op.

When the policy class needs the public frightened into a pause, Hollywood still knows how to dim the lights.

Over the weekend, Anthropic's Dario Amodei called on rivals to "pace the frontier." Sam Altman and Elon Musk backed the letter. Former researcher Jacob Coxon quit and said AI "could kill us all by the end of the decade."

President Trump waved the pile-on off. The United States is "leading China in AI," he said. "Whoever wins AI, wins." A lot of "very negative forces," he added, are "bringing up things that won't happen." Guardrails, fine. A pause, no. Asked about existential risk leaving Dallas, he shot back: "No, I don't have any."

Jesse Watters noted that the same CEOs are "begging for government regulations," while claiming the tech is more powerful than a nuclear weapon and could wipe everyone out in three years. Then the obvious question: if they are that terrified of their own product, why do they need politicians to slow it down for them? "Something smells fishy with these IPOs."

David Sacks named the shakedown. OpenAI and Anthropic are the frontier. If their unreleased models are too hot, they can simply not ship them. Demanding antitrust waivers, embedded evaluators, and a regulatory architecture as the price of restraint, he wrote, "will look like blackmail of the public and the political system."

Regulation written by the incumbents does not save humanity. It freezes the ladder so the next lab never climbs it - right as those same firms eye public markets.

Barack Obama took the other door. At a Manhattan fundraiser he told Hakeem Jeffries that if Democrats win the House they should make AI a governing project. "Once you are speaker, I would strongly urge that the Democrats put together a framework for a very public conversation."

Then: "This is something that is moving very fast in private hands, and if we don't get on top of it, I think can be dangerous." Jeffries saluted on command. "President Obama is correct that decisive action must be taken on artificial intelligence... Republicans have abdicated their responsibility... We will not repeat their error."

Bernie Sanders has been running the same play for weeks: pause advanced development, permanently ban superintelligence, and get Trump and Xi to sign a treaty. On Tuesday, at a Washington "Pro-Human Assembly," he said a runaway system "will not be an American problem. It will not be a Chinese problem. It will be humanity's problem," and he again demanded a comprehensive pause-and-ban deal at the coming Trump - Xi meeting.

That is the globalist package in one stack: slow the American frontier, internationalize the rules, and call it safety.

Then China's ministry of state security walked into the same conversation. Chen Yixin, Beijing's top spy chief, used the state-run magazine China Cyberspace to warn that AI is "directly threatening our political security, institutional security, and ideological security."

He called for tighter Party control and stricter government oversight. Hostile forces, he wrote, "abuse generative artificial intelligence technologies... to fabricate political rumors, spread harmful information, and incite confrontational sentiments at low cost and in large quantities."

He named American models - Anthropic's Claude Mythos and OpenAI's GPT-5.5-Cyber - as a "disruptive upgrade" in cyber capability, and billed AI as "a new arena for strategic rivalry among major powers."

He is not asking America to pause so the world can be safe. He is asking the Party to lock down speech, data, and "ideological security" at home while Western executives and Democratic politicians talk themselves into a slowdown.

Days earlier, Anthropic's own threat report said China-linked actors had already used Claude for weapons software and intelligence work the company then banned: an electronic-warfare and air-defense suite whose simulation was expanded to twelve targets in Taiwan; research into foreign high-power microwave weapons; and domestic surveillance pipelines that collapse "many teams of analysts" into a single office producing thousands of investigations a month.

Chinese labs, Anthropic said, also tried to strip Claude's capabilities to feed their own models. Beijing's foreign ministry shrugged that it was "not aware" of the report and opposed "smears."

So the sequence is simple. China runs Western models for weapons and control. China's spy chief then lectures the world about AI danger and Party oversight. Gates wants a global body. Sanders wants a Trump - Xi treaty. Obama wants Democrats to "get on top of it." Netflix wants you crying on the couch. The CEOs want a rulebook that just happens to protect their lead.

America does not need Bill Gates' alien-movie summit, Chen Yixin's definition of safety, or another Inconvenient Truth with better animation. It needs the thing Trump already said out loud. Win the race.

Tyler Durden Wed, 09/16/2026 - 20:05

Vance Seeks To Assure Trump Base Iran War Entering "Much Different Phase"

Zero Hedge -

Vance Seeks To Assure Trump Base Iran War Entering "Much Different Phase"

Vice President JD Vance - who was said to have opposed launching Operation Epic Fury from the beginning - has issued some fresh statements on the future of the Iran conflict which sound a bit off-rampy.

He could just be voicing his own wishful thinking, however, in proclaiming the conflict will soon enter "a much different phase" in the coming months. He still conceded that ultimately it's the Commander-in-Chief who decides when it will end (though it would be nice of Congress or the American people had a word).

via Reuters

President Trump had just last week stated his view that hostilities will wrap up after the November mid-term elections, and Vance appeared to try and defend the statement.

"We can’t predict the future, but I think the [US] President [Donald Trump] is right to say that this thing [the conflict in Iran - TASS] will enter a much different phase in a couple of months," he told New York Post in an interview.

Vance described that the US military had already completed the first phase, which the Vice President described as to "destroy the nuclear program" of Iran as well as "their conventional military."

"And then the second phase of this is ensure that they’re not able to rebuild and try to maintain as much global stability in the wake of that," he said.

But as far as destruction of conventional military, the Iranians have clearly been lobbing large quantities of ballistic missiles at US bases in Jordan, for example just earlier this month during the last flare-up in fighting. This occurred overnight from Sept.8-9, and saw Iran fire some 20 ballistic missiles.

As for "rebuilding" - well, Tehran is proudly and defiantly asserting that it is currently doing just that. According to The Wall Street Journal citing US officials a week ago:

Iran has resumed its production of ballistic missiles using stockpiled components and working in underground facilities, officials from the U.S. and Middle East familiar with the matter said, eroding what the U.S. and Israel have touted as a major achievement of the war. 

Despite heavy attacks on its missile sites and industrial facilities during the initial phase of the war, Iran has been busy assembling liquid-propellant missiles, which have to be fueled just before launch, as well as solid-propellant missiles, which can be stored ready to fire, some of the officials said.

The US administration has repeatedly claimed to have destroyed or else severely set back Iran's advanced missile arsenal - and yet they keep on firing.

Read: Bombshell Leaks Seek To Distance 'Skeptical' JD Vance From Iran War

Below: As war expands, US scrambles to contain the fallout and damage, also after Saudi Arabia's East-West pipeline was hit in a drone attack (out of either Iraq or possibly Yemen):

Many pundits have also pointed out that Iran's Islamic revolutionary government has essentially been preparing for this war with the US and Israel for several decades. And clearly Washington was woefully underprepared for the Iranian retaliation.

Tyler Durden Wed, 09/16/2026 - 19:40

TikTok Mob Now Stalks Clancy Holdout Juror's Family

Zero Hedge -

TikTok Mob Now Stalks Clancy Holdout Juror's Family

Authored by Steve Watson via Modernity News,

The same online machine that turned a confessed child killer into a cause has a new target. After hanging Lindsay Clancy's murder trial, the lone holdout juror's family says TikTok extremists have them trapped indoors, leaving notes at his mother's house and refusing to let them live in peace.

The juror's brother told the New York Post that the family's life has been flipped over since the September 4 mistrial in Plymouth, Massachusetts. He rejected the claim that Catholic faith drove the holdout vote.

"I don't think religion had anything to do with it," he said. "He looked at the case, and he made the call. For me, that's how I would do it. I would just listen to the case with all the evidence, and go from there."

"My family cannot leave the house," the brother said. "They are leaving notes at my mother's house. They won't leave us alone, and we don't know anything."

He added that none of them even knew their relative was on the jury until after the verdict collapsed. "We didn't know. That's why I was shocked. He didn't tell us anything."

Clancy, 36, admitted strangling her children - Cora, 5, Dawson, 3, and 8-month-old Callan - with exercise bands in the basement of the family's Duxbury home on January 24, 2023, while Patrick Clancy was out on an errand she had sent him on. She then cut her wrists and neck and jumped from a second-story window.

The defense never disputed the killings. Attorney Kevin Reddington argued postpartum psychosis and no criminal responsibility. Prosecutors said she cleared the house, chose a method that worked on the children, and chose a method for herself that failed.

After 21 days of testimony, more than 80 witnesses, and nearly 40 hours of deliberations, the panel split 11-1. Judge William Sullivan declared a mistrial. District Attorney Tim Cruz has a status hearing set for September 29 on whether to retry.

Reddington blamed the holdout in public. "They know they were robbed by one man, for whatever his agenda was," he said. "I hope that guy can sleep well at night."

Fellow jurors have since gone on television to attack him. One described wrapping an exercise band around a water bottle in the deliberation room. Others said he would not "follow the law" on reasonable doubt. What they will not say is the simpler point: one juror would not treat the strangling of three children as a medical event.

A GiveSendGo launched for security, lawyers, and lost work shot past $80,000 and, according to the Post, raced toward six figures. Florida Gov. Ron DeSantis offered the juror "asylum" if the harassment continued. "A man objected to allowing a woman to kill her three young kids and get away with it, so NBC is trying to smear that juror," DeSantis wrote.

as we previously highlighted, during the trial hundreds of women in pink have been gathering outside Plymouth Superior Court for a "Stand in Peace." They cheered Clancy's transport. Organizer Renee Kimball said, "I think that every one of us women believe that it could be any one of us." Another supporter put it on camera: "It could be me."

The same cohort poured money into a GoFundMe for Clancy's parents that raced toward seven figures. TikTok mothers filmed themselves "relating" to the confessed killer while holding their own infants. Some insisted Patrick must have done it - in spite of Lindsay's admissions, her lawyer's opening, the 911 tape, and the civil lawsuit that says she killed the children.

That inversion did not stay on the internet.

Patrick Clancy sat through the trial as the prosecution's first witness. He described coming home with food and medicine to find his children gone. He has said he forgives Lindsay and calls her ill rather than evil.

His reward has been a smear campaign claiming he was involved. Attorney Howard Cooper of Todd & Weld called it "a relentless, escalating and destructive defamation campaign" driven by "minor celebrities, so-called influencers and outright conspiracy theorists."

"This campaign, now fueled by insatiable media coverage, remains at a fever pitch and has resulted in real-life threats to his reputation, livelihood, and life," Cooper said. "Enough is enough - this spread of blatant and baseless falsehoods must stop." Law enforcement has been notified.

Attorney David Meier said after the mistrial: "The loss of Patrick's children is something from which he will never recover and from which there will never be closure. The prospect of reliving this tragedy through another trial is extraordinarily painful."

While the Clancy jury was still out, Corie Walsh of Frankfort, Illinois, hanged her 2-year-old son, Barrett, from a basement rafter. She told police the boy was the "devil" and the "anti-Christ." Witnesses said she had become "very invested" in the Clancy trial and was still texting friends about it hours before the child was found.

Her lawyer, Andrea Lyon, reached for the same line the pink shirts have been rehearsing: "It is also a tragedy in that Corey herself was experiencing a psychotic episode at the time this happened." Prosecutors said she spoke of harming the remaining children and her husband.

Rep. Nancy Mace, speaking to TMZ DC, called Clancy a "serial killer" and said the country should watch the penalty.

"Her children are dead. She should be dead too," she said. "She should get the death penalty. It should be public. It should be a public execution."

However, Massachusetts has not executed anyone since 1947. First-degree murder there is life without parole.

Reddington went on Good Morning America and asked President Trump to pardon his client. "Mr. President, I would hope that you would consider this young lady and the person she is, what she's been through, and consider a pardon," he said. A president cannot erase a Massachusetts murder case. Trump treated it as the state matter it is.

After the mistrial he said Clancy "did a horrible, horrible thing," that "there'll be a price," and that it would be "mental institution or jail or something." Asked again after the pardon plea, he said: "There is no winner there. There's no win no matter what you do. Three children are dead."

* * *

Tyler Durden Wed, 09/16/2026 - 19:15

DOJ Uses Never-Before-Used Terror Court to Deport Afghan Woman Over Election Day ISIS Plot

Zero Hedge -

DOJ Uses Never-Before-Used Terror Court to Deport Afghan Woman Over Election Day ISIS Plot

The Justice Department has used a national-security court that sat unused for three decades to deport an Afghan woman from the United States who supported an ISIS-inspired plot to carry out a mass shooting on Election Day in 2024.

AG Todd Blanche

On Friday, officials announced that Nazira Haji Zada, 47, a permanent resident from Fort Worth, Texas, was kicked out from the country after admitting that she is an "alien terrorist."

Zada's removal is the first completed case in the history of the Alien Terrorist Removal Court, a specialized tribunal Congress created in 1996 and that no prior administration ever used.

Federal prosecutors said Zada was the family matriarch who supported a plot by her son, Abdullah Haji Zada, and son-in-law, Nasir Ahmad Tawhedi, to carry out an ISIS-inspired mass shooting on or around Election Day 2024. The two men were arrested after buying firearms and ammunition from an undercover FBI employee. Abdullah, who was 17 at the time of arrest, later pleaded guilty as an adult and was sentenced to 15 years. Tawhedi pleaded guilty to terrorism charges and is awaiting sentencing.

Court records describe the family selling property, signing a contract to sell their house, and buying one-way tickets to Kabul, while the two men prepared to stay behind and attack. The government used classified information to establish Zada's terrorist status and provided her court-appointed lawyers with a massive document production. Zada appeared before ATRC Chief Judge Joan Ericksen, conceded the designation, and waived appeal. The removal order was signed August 20 and unsealed after she was already out of the country. Zada is now permanently barred from the U.S.

FBI Director Kash Patel hailed Zada's deportation, saying that an individual who supported a plot by ISIS-sympathizing relatives "has paid the price."

"This is a historic and vitally important step in our work to protect the U.S. homeland from terrorism," Patel said in a statement. "An individual who supported a plot by ISIS-sympathizing family members to commit an attack in America has paid the price for that. She came to our country, betrayed it, and has now lost the right to live here and enjoy our democratic freedoms. This FBI and our Justice Department partners will protect the American people from the threat of terrorism, using all means necessary."

DHS Secretary Markwayne Mullin also hailed the move.

"From the moment President Trump took office, he made clear that his Administration would put the safety and security of the American people first," said Mullin. "The President's direction to use the Alien Terrorist Removal Court to expel Nazira Haji Zada, an Afghan national who plotted with members of her family to carry out an ISIS-inspired attack on American soil, delivers on that promise. Thanks to the President's leadership and the coordinated efforts the Departments of Homeland Security, Justice and State, Nazira Haji Zada's final order of removal is now FINAL. Those who plot acts of terrorism against the United States have no place in our country. We will find them, and we will use every lawful tool available to remove them."

Tyler Durden Wed, 09/16/2026 - 18:50

Who Aligns The Aligners? Brief Legal Thoughts On The "AI Safety" Fights To Come

Zero Hedge -

Who Aligns The Aligners? Brief Legal Thoughts On The "AI Safety" Fights To Come

Authored by Preston Byrne via Preston Byrne,

Dario Amodei, the CEO of Anthropic, has published an essay - We Must Pace The Frontier - in which he writes:

I have worked on AI for the last twelve years because I believe it could dramatically raise the quality of human life. I've written often about these incredible benefits: I believe that AI could cure most major diseases in the next 5-10 years, greatly accelerate economic growth rates, create a world of abundance and empowerment, and usher in a renaissance of democracy and freedom.

But - and there is always a but -

...like many technologies before it, AI brings risks, and because it is such a powerful technology, these risks are serious.

Those risks include, according to some, the complete destruction of the human race.

See, e.g., Eliezer Yudkowsky confidently asserting today that if we do not institute immediate global techno-communism, instituting draconian government control over speech and publication of a type never before seen in any Western society, we are all going to die:

There is no evidence that this will happen. Some proponents of regulation tell us that the only response is the most extreme response available: total state control. There is no evidence that this response is correct, either. One could just as easily argue, hypothetically, that the government should force Anthropic to open-source its weights, so that everyone can have free, equal access to the latest model as a personal defense AI to protect themselves from cybersecurity risks from other AIs, a "Second Amendment for AI" if you will. In the alternative, if you really think AI is an extinction-level risk, it would seem to me that the only rational response to that position - if genuinely, truly held - is not "let governments run it" but rather to agree to destroy, by treaty, all modern computers and revert to 1970s technology in perpetuity.

There are myriad policy responses. Whatever we do, those responses will require popular consent and careful deliberation. No one person, or one company, or one movement, knows the answer and history is no guide, save that apocalyptic predictions about new technologies have, to date, all been wrong.

History does provide a great deal of guidance, however, about the use and misuse of government power. It tells us that the state is in fact likely the worst possible custodian for the most powerful publication and data analysis technologies.

This notwithstanding, to address this risk, Amodei proposes

...building AI at a balanced rate that aims to ensure its safety while still achieving its benefits and grappling with important geopolitical dilemmas.

To wit, regulation.

As my regular readers will be aware, I have been engaged, on behalf of my clients, in legal combat with Internet censors around the world, agencies who think that they have the standing, the competence, and the right to tell American companies what software they can write and run, for the better part of 18 months.

This censorship apparatus is about to be rebuilt from scratch, except this time for AI instead of social media. I expect to fight that, too, at the appointed time. I feel now is an appropriate time to offer my preliminary thoughts.

Amodei's Proposal

Anthropic is, as David Sacks correctly pointed out on X, free to slow down its research and development efforts into AI at any time, to any extent it wishes. Amodei proposes something else: that everyone slow down together, under supervision. While Amodei initially writes that the "slowdown" should be voluntary, the plan would be to progress to legal regulatory regimes - meaning, this proposal necessarily involves the use of coercive state power - which software developers would be expected to obey on a compulsory basis:

The most effective method of pacing is via regulation that targets all US frontier AI companies, as that covers even those who are unwilling to cooperate voluntarily. (Emphasis added.)

His plan has three elements.

Embedded Evaluators (aka Appeasing Pressure Groups)

The first element is for "Embedded Evaluators" -

...employee-like access to a team of embedded third-party evaluators (such as METR), whose role is to verify adherence to safety practices and commitments, report incidents, and help assess the alignment of not just completed AI models but training pipelines and processes.

There is already a robust industry of third-party "safety" overseers for Web 2.0 - what the House Judiciary Committee has described as the "censorship-industrial complex." The track record of these entities from the last time around tells us how this arrangement plays out in practice.

"Evaluate This!!!"

One well-known private actor in this space was the Global Alliance for Responsible Media, or GARM. GARM, a commercial enterprise, described itself as "a voluntary cross-industry initiative created in 2019 to address digital safety." Among other things, GARM provided a range of policy frameworks and guidelines, among them "the Brand Safety Floor and the Adjacency Standards Framework, which have supported brand owners in their independent development of their own bespoke, brand-specific safety frameworks to ensure that their advertising dollars do not inadvertently support illegal or harmful content that damages their brands."

Although GARM disbanded in 2024, according to the House Judiciary Committee, during its active period GARM worked with global regulators to pressure companies like Twitter, now X Corp., to wield "significant collective power" to coercively influence Twitter's moderation decisions, including "silencing President Trump," and to procure boycotts of the platform if the platform refused to obey.

Presumably, platforms that follow the "safety" NGOs' recommendations and allow the "evaluations" would not be threatened with that stick. This calls back to the way in which social media companies who followed GARM's policy frameworks and guidelines were not targeted with advertiser boycotts - and those who did not, like X, allegedly were.

He adds:

This is the key step for verifiability of any pacing commitments, and has precedent in the banking industry, which sometimes involves regulatory "supervisors" embedded along with employees.

As it happens, the banking analogy is the exact argument leading "misinformation/disinformation" (read: pro-censorship) academics employ to justify the UK's Online Safety Act and similar regimes; see e.g. Alan Jagolinzer from Cambridge University, who comes from the world of financial accounting and analogizes speech regulatory regimes to post-2008 financial reporting regulations.

The problem, of course, is that financial accounting fraud is not a constitutional right; speech is. In America, software development absent the intent to commit or facilitate the commission of a crime is, as a general rule, protected expression. I fail to see how standing up a new crop of NGOs to perform substantially the same function as the "Online Safety" NGOs, using the same methods - only, this time with NGO commissars possessing highly sensitive employee-like access to internal systems - will lead to a different or better result than it has so far.

Democratic Coordination (aka Government Regulation)

The second element is "Democratic Coordination," whereby

Frontier AI companies within democratic countries coordinate to establish common safety standards as well as limits on the rate of unchecked AI progress. Some forms of coordination that would be impactful for pacing are legally challenging, and will require government support.

There are two aspects to this: (a) competition law and (b) content regulation law.

From a competition law standpoint, the problem Anthropic has is simple. Anthropic and OpenAI are the largest players in the AI market, by some distance, and coordinating their policies, procedures, and "standards" with each other risks classification as an unlawful cartel. This would particularly be the case if, for example, the two giants aligned on pricing or terms - say, by conforming their API terms so that anyone who used a model that defected from the standards in the global marketplace (e.g., Kimi, Deepseek) would be ineligible to interact with OpenAI's or Anthropic's software.

"Government support" for "legally challenging" coordination is a polite way of asking for an antitrust exemption to allow greater coordination between competitors in the name of "safety." It is a problem any industry consortium of any type needs to account for and this would be no exception. Given the global scale of each company, they would likely need to get numerous exceptions, from the United States, the European Union and its member states, the United Kingdom, Japan, and elsewhere, to undertake the full "safety" initiative laid out in Amodei's post on a global basis.

Law reform on that scale will be very difficult to accomplish; in countries like the UK, where "AI Safety" fits into existing political thinking that the state's proper role over technology is to aggressively regulate it, and there is already parliamentary traction for a slowdown, this might be easier. It is exceedingly unlikely that they will receive any accommodation from China.

From a content regulation standpoint, the language "common safety standards as well as limits on the rate of unchecked AI progress" paints with a broad brush. This suggests that Anthropic envisages that practically any industry using its software - from manufacturing, to biotechnology, to news publication and copywriting - will require (a) de novo "safety" standards in relation to non-expressive conduct, and (b) limits on how quickly AI software itself can be developed.

In foreign countries, particularly the United Kingdom and Europe, where national governments have fewer constitutional guardrails on their power, I would expect that both (a) and (b) can be legislated without much difficulty in legal terms. If the ease with which rules like the Online Safety Act and Digital Services Act were implemented is any indication, there should not be terribly much difficulty in political terms, either.

The primary legal problem with this aspect of Anthropic's proposal is in the United States, particularly with (b) - limits on how quickly software itself can be developed. Software development, software publication, and web hosting are inherently expressive activities. See. e.g., the Bernstein v. United States line of cases, as well as Smith v. California, Cubby v. CompuServe, the fact pattern of Stratton Oakmont v. Prodigy, and the related legislative history around 47 U.S.C. § 230. The differences between the United States and its allies on Web 2.0 date back to our very founding, and in both subsequent caselaw and subsequent statutes, America has chosen to protect that activity from state interference.

To the extent Anthropic and its fellow-travelers intend for this aspect of their plan to restrict American citizens from either (a) developing AI models or (b) using models and published FOSS model weights from China, First Amendment issues are immediately apparent and the weight of the precedent militates against government regulation.

Global Coordination (aka Treaties and Extraterritorial Censorship)

The third element of Amodei's plan is "Global Coordination," whereby

[t]he US and other democratic governments attempt to coordinate with authoritarian governments, to the extent this is possible, while taking seriously the challenges of verifying compliance.

Authoritarian governments aren't the only problem America has here.

We live in an era in which most of the Western world, with the exception perhaps of the United States, has enacted comprehensive technology regulation statutes focused on yesterday's tech: chiefly, search and social media.

The last great global effort to regulate publication and communications technology began following a moral panic brought about by the twin shocks of (a) Brexit and (b) the election of Donald Trump to the American presidency in 2016. The result was comprehensive Internet censorship laws in Australia (the Online Safety Act 2019), the United Kingdom (the Online Safety Act 2023), and the European Union (the Digital Services Act), plus perhaps a half-dozen copycats around the world, including Brazil (see e.g. the 2025 revisions to the Marco Civil da Internet by Brazil's Supreme Court), Singapore, Malaysia, Indonesia, and more - all of which seek to control speech and conduct which (a) lives on American servers and (b) in the United States, on those servers, is constitutionally protected under the First Amendment.

Generally speaking, the censorship regimes of the West choose not to describe themselves as such. That does not mean they are not censorship schemes.

Take the UK, which calls its law the "Online Safety Act" and asserts that the law exists to keep the UK safe from the evils of the Internet. Its enforcer, the "Office of Communications," more commonly known as "Ofcom," is not a law enforcement agency and has no power, by itself, to remove content or make arrests; it cannot, and does not, keep anyone safe from anything.

British politicians are not popular enough to get away with carrying out censorship directly, so they outsource it to Americans through a vague and complicated bureaucratic procedure which basically boils down to this: "censor your websites, or we (Ofcom) will hit your (American) company with ruinous fines or jail time if we, in our sole discretion, determine that your platform didn't censor itself well enough."

This censorship is ostensibly performed to keep Internet users "safe" from ideas and expression of which the British state formally disapproves. All that is required, for most users, to circumvent the entire regime and get all the "unsafe" Internet experience they want is a free VPN with an American exit IP. Millions of Britons have done so, evidently feeling that they don't require the "safety" that Ofcom provides, making the UK one of the top VPN-using nations on the planet in the process.

Broadly speaking, the British regime, like many of these regimes, requires companies to (a) age-verify (i.e. dox) users before they access services, and (b) ensure that users accessing those services cannot see content the Act proscribes. Whilst there are some areas where U.S. and UK speech regulations are in agreement, there are many more areas where they are not - and for many of these areas, speech the Act requires be taken down is explicitly constitutionally protected in the United States. I have written about this at length elsewhere (in addition to actually drafting the quite extensive legislative surgery required to align our two nations' systems) and do not propose to do so again here.

A "global coordination" framework for AI will be built by the same governments, staffed by the same regulators, and pressured by the same NGOs that built the above. It is possible, even likely, that any global attempts at harmonization will collide at exactly the same point: it will not be possible for an American company to comply with European controls and enjoy the full breadth of their U.S. constitutional rights at the same time, as the rulesets will be drafted incompatibly.

Moreover, the verification problem Amodei mentions with respect to authoritarian states is, in fact, a fatal flaw with any such scheme if it has global pretensions (as the UK Online Safety Act once did); as a certified enjoyer of the defector strategy, I am in a very good position to confirm that, given a single defector who is demonstrably outside of the jurisdiction's reach, deterrence begins to falter. The higher the stakes, the more likely it is that defection will occur.

Although many U.S. companies do, and absent law reform in America (such as a clear censorship shield law) will likely continue to, comply with foreign censorship regimes out of fear, the only parties against whom such a framework will ever be consistently enforced are the companies which are not judgment-proof in the countries which are most likely to get these laws enacted - global companies which, at least for now, includes not many startups but certainly includes Anthropic and OpenAI. In the United States, AI regulation will be subject to early and doctrinally sound constitutional challenges.

Amodei writes:

We should approach any global pacing decision, especially in the near term, in such a way that protects the lead of the US and its allies.

I do not view this as being particularly realistic. Among America's geopolitical adversaries, several of which America is at war with (directly or by proxy) and who have every incentive to defect, effective compliance levels will likely approach zero.

Preliminary View: Who Aligns the Aligners?

If I have learned anything from our fight against European censors, it is that regardless of a regulatory regime's good intentions, regulators are subject to political control. Regulators will, subject to that political control, do political things.

The clearest illustration from my own files is Ofcom's pursuit of a small, highly controversial American website - a mental health discussion board, called SaSu, with no UK presence, personnel, or assets - which operates entirely lawfully in the United States. SaSu voluntarily geoblocked the entire United Kingdom in July of 2025. Ofcom initially accepted that remediation as resolving the matter.

Within days of Ofcom's acceptance of my client's geoblock in October and initial closure of the file, following a coordinated pressure campaign by parliamentarians and activist NGOs, Ofcom reversed its own settled position and reopened the case. Ofcom and its NGO partners then circumvented the geoblock using VPNs, created login credentials from behind that circumvention, and cited the resulting VPN-based access as evidence that the block was inadequate.

In May 2026, Ofcom purported to fine the site £950,000, announcing the penalty through a coordinated, embargoed press rollout; weeks later it escalated further, demanding that the site rewrite its terms of service and force a site-wide forced logout, of every user on Earth, to terminate the sessions the regulator's own circumvention had created. My client, which, by way of reminder, had voluntarily blocked the UK, decided enough was enough, and refused these further demands.

On July 21, 2026, 480 days after the file was opened, Ofcom closed it, having collected nothing.

At no point in that sequence was the regulator's conduct determined by the evidence in its file - evidence which, the file shows, was only able to be obtained from accessing the website by circumventing a geoblock that the regulator itself had earlier accepted. Nor was the regulator governed by legal reality of American constitutional law, backed by the political reality of American power.

The regulator was, instead, governed by the political mood in its home country. SaSu was one of the reasons given for the necessity of the Online Safety Act; political pressure created the censorship law to target the site. Pressure opened the case when the censorship law entered into force. Pressure reversed an approved remediation. Pressure produced a fine that everyone involved understood could never be collected.

Pressure arising from the absence of any face-saving exit kept Ofcom's enforcement machinery running, at redline but in neutral, for nine months after the target had lawyered up and stated the American legal position correctly. The enforcement ended long after the futility of the regulator's actions became apparent to any legally qualified observer.

The entire enforcement process against SaSu, from pre-enactment lobbying to closing the file, was a single, continuous, political act. That is how a so-called "independent" expert regulator in a modern western democracy will behave under political pressure in what should have been an easy case, and a quick settlement and file closure.

This is also what we may expect an "embedded evaluator," a coordinated standards body, or a global AI compliance regime will do under political pressure, because those bodies will be run by humans, and human beings are (a) fallible and (b) respond to incentives.

It is probable that Amodei's proposals are already being ingested gleefully by "Online Safety" regulators and the related academic ecosystems around the world as they look to expand the reach and remit of the censorship schemes over Web 2.0 that they have spent the last decade building - and which a handful of American clients have spent the past year fighting tooth and nail. It will not take a decade to update their censorship apparatuses to try to regulate yet another area of American tech, nor will it take a decade for the vast advocacy apparatus they have built around "Online Safety" to replace-all and begin pushing an AI safety narrative in legislatures around the United States, and around the world.

Our societies can do better than this; so too could OpenAI and Anthropic, if they chose to, but one suspects that the sort of people manning these companies' "Online Safety" teams are philosophical descendants, if not professional descendants, of the "Trust and Safety" crowd that once worked at companies like Twitter or Facebook, and later created and/or currently staff the censorship agencies of the West.

It took nearly a decade, and actual sight by the British electorate of the Online Safety Act being implemented, for the British public to turn against that regulation and realize that the British government made a grave policy mistake in enacting it.

If OpenAI and Anthropic choose to adopt formal endorsement of prior restraint as corporate policy, those who would oppose the global regulation of AI must move quickly. The most recent counteroffensive against government censorship of the web took seven years to organize. The counteroffensive against government censorship of AI does not have the luxury of time.

Tyler Durden Wed, 09/16/2026 - 18:25

Mysterious Illness Striking Young Workers In The South

Zero Hedge -

Mysterious Illness Striking Young Workers In The South

Doctors at Harris County's public hospitals have spent more than a decade treating an unusual group of dialysis patients, men in their 20s and 30s who work outdoors and whose kidneys have failed without a clear medical explanation, Fox News reports, following a Texas Monthly investigation.

A review of county hospital records found that roughly one in six emergency dialysis cases among uninsured or undocumented patients had no identifiable cause. The records ran from 2012 to 2015, and the study was published as a preprint last year. One physician told Fox the share is consistent with chronic kidney disease of unknown etiology, a condition that has caused widespread deaths among laborers in hot regions abroad but has rarely been documented in the United States until now.

Many of the patients are immigrants from Mexico and Central America, often illegal aliens, and they work in roofing, construction and other trades that demand hours of strenuous labor in extreme heat. Few have diabetes or high blood pressure, which account for most kidney failure nationwide. For someone that young, the loss of kidney function can mean dialysis several times a week for the rest of his life.

First identified among sugar-cane workers in Central America, the illness has since appeared in parts of South Asia and Mexico, where many young patients died without access to dialysis. A 2019 article in the New England Journal of Medicine called it "a sentinel disease in the era of climate change," though researchers still disagree over whether heat causes the disease or only worsens it.

Gauging how widespread the problem is will be difficult. Kidney function can erode for years without noticeable symptoms, and many patients learn they are sick only when fatigue, nausea or breathlessness signal that their kidneys are nearly gone.

Medicine offers limited help once the damage is done. No single test confirms the disease, so doctors reach the diagnosis by ruling out other causes and examining a patient's work history. Treatment focuses on preserving what function remains and controlling blood pressure until dialysis or a transplant is unavoidable.

Dr. Richard J. Johnson, an emeritus professor of medicine at the University of Colorado and a leading expert on kidney diseases, has cautioned that some patients are treated with ACE inhibitors, medicines commonly prescribed for high blood pressure, even though those drugs can sometimes worsen kidney function in people who are already dehydrated.

"Disease often progresses rapidly over a few years, and dialysis and transplantation are rarely available, so mortality is high," he told Fox News.

Dr. Gokul Paidi, a New York family physician who has published a review of the condition, told the outlet that outdoor laborers in hot climates should have kidney function checked at least twice a year. "A simple blood test for creatinine (a waste product normally filtered from the blood by the kidneys) and a urine test for protein can catch early changes long before symptoms appear," he said.

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Tray

Knife

Notebook

AirTag Wallet

Pen

Tyler Durden Wed, 09/16/2026 - 18:00

BRICS Summit Takes Aim At US Influence Over The Global Economy

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BRICS Summit Takes Aim At US Influence Over The Global Economy

Authored by Eurasianet via OilPrice.com,

  • BRICS demanded greater developing-country influence at the IMF, World Bank and WTO but avoided directly naming the United States in its criticism.

  • The declaration urged “maximum restraint” in the Middle East and made no mention of Ukraine, illustrating the compromises required to maintain consensus.

  • Kazakhstan used the summit to balance BRICS ties with Washington, while Uzbekistan’s president traveled to South Korea and sent a deputy prime minister to represent the country in New Delhi.

Like the Shanghai Cooperation Organization, BRICS, the global grouping of emerging markets and developing countries, is intent on diminishing Western influence over the world economy. And just like the SCO summit earlier in September, the latest conclave of BRICS leaders fell short of presenting a united front against the West, the United States in particular.

Both the SCO and BRICS include China, India, Iran and Russia as permanent members. Among the four, India, the host nation for this edition of the BRICS annual summit, has acted as a brake on efforts to de-dollarize the global economy. Kazakhstan and Uzbekistan are both BRICS partner countries.

BRICS members adopted a 140-point joint statement September 12 that featured calls for major reforms of Western-dominated financial institutions, including the World Trade Organization, the International Monetary Fund and the World Bank, to give developing countries a greater say in policymaking and practices.

Some joint statement provisions took oblique swipes at the Trump administration. For example, in comments on the WTO, the statement noted a "proliferation of trade-restrictive actions that are inconsistent with WTO rules, whether in the form of indiscriminate raising of tariffs and non-tariff measures, or protectionism under the guise of environmental objectives."

But the statement does not mention the United States or Trump by name, and it soft-pedals the group's stance on the Gulf war currently embroiling the US, Israel and Iran, calling for "maximum restraint" of all sides, instead of adopting a clear position more favorable to Tehran.

Iran came away with a symbolic victory of sorts, however, underscored by a one-on-one between Iranian President Masoud Pezeshkian and Abu Dhabi's crown prince, Khaled bin Mohamed bin Zayed, a meeting designed to counter the image that the United States is succeeding in economically isolating Tehran.

A statement issued by Abu Dhabi officials was non-committal about future bilateral ties, however. The two "discussed a number of regional and international issues of mutual interest," while emphasizing a need to promote "de-escalation and strengthen regional stability."

Beyond the Gulf war, the BRICS statement makes no mention of the Russia-Ukraine conflict, a clear win for the Kremlin.

Underscoring a lack of unity within the broader BRICS framework, Uzbek President Shavkat Mirziyoyev passed over the summit in New Delhi, instead making a state visit to South Korea, where he promoted stronger economic ties with the East Asian Tiger.

South Korea will host a gathering of leaders from all five Central Asian states in Seoul under a C5+1 format on September 16.

Meanwhile, in an expanded session of the BRICS gathering, Kazakh President Kassym-Jomart Tokayev adopted a middle-of-the-road stance that, consistent with the country's multi-vector foreign policy, sought to balance the interests of China, Russia, the United States and the European Union.

"The erosion of the international security architecture and protracted conflicts are increasing the risk of a new arms race and strategic miscalculations and practical wrongdoings," Tokayev said. "Therefore, high-level dialogue among nuclear powers is needed to reduce nuclear risks, including those linked to new technologies."

The comments could be seen as referring to the Russia-Ukraine conflict. But they can also be interpreted as a call for the US and China to de-escalate their deepening rivalry for dominance in the development of artificial intelligence. Central Asia is emerging as a central battleground in the brewing race for AI leadership.

Tokayev went on to characterize BRICS as "an open platform for practical cooperation that complements the UN-centered multilateral system and connects peoples, regions and markets."

On the sidelines of the BRICS gathering, Tokayev met with Sergio Gor, the US ambassador to India, who is also the Trump administration's special representative to Central Asian states. Tokayev told Gor that he is looking forward to participating in the G20 meeting to be held in Miami in December. But he also delivered an unusually blunt message, indicating that he expects faster progress on deal-making between the United States and Kazakhstan and the repeal of the Central Asian nation's Jackson-Vanik trade status.

The Miami gathering will provide "a good opportunity to discuss bilateral issues," a Kazakh readout of the conversation quoted Tokayev as saying. "We prefer concrete actions and practical steps to advance our mutual cooperation, rather than just words."

Tyler Durden Wed, 09/16/2026 - 17:40

US Interceptor Inventory Took Another Big Hit Last Week, As CBO Pegs War Cost At $38 Billion+

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US Interceptor Inventory Took Another Big Hit Last Week, As CBO Pegs War Cost At $38 Billion+

America's already-diminished inventory of air defense interceptor missiles took another significant hit last week, as dozens more were expended to defend US troops in Jordan from an Iranian attack. This latest incident illustrates Iran's use of crafty and increasingly technologically-advanced attacks to further sap US munitions supply and degrade the Pentagon's ability to continue mounting defenses -- or provoking attacks -- in a war nearing the seven-month mark.  

The action unfolded on Sept 8, when Iran attacked US forces at the Muwaffaq Salti Air Base in Azraq, Jordan. Unleashing what it called a "punitive operation" following the destruction of five Iranian oil tankers by the US military, Iran fired a volley of about 20 ballistic missiles at the base. No one was killed, but fighters and other aircraft positioned at the facility were damaged.   

To defend the air base, US forces fired 60 to 70 Patriot interceptors and more than dozen Terminal High Altitude Area Defense (THAAD) interceptors, according to US officials who talked to the Wall Street Journal. Patriots cost the Pentagon about $4 million each, and the more sophisticated THAADs go for $12 to $15 million. That means the defense from this attack on a single target may have cost half a billion dollars or more.  

The large expenditure of interceptors was driven by the complexity of the Iranian attack. Part of the strike package included missiles that, at high altitude, release multiple munitions. Over the course of the war, Iran has continued to enhance its already formidable missile capabilities, making warheads more maneuverable and giving some an ability to greatly accelerate before impact. “These types of new tactics that we’re seeing show that the Iranians continue to adapt, continue to learn, continue to experiment, see what works, what doesn’t work,” Conflict Armament Research's Fabian Hinz told the Journal.   

News of the latest dent in the US war chest follows a report from the Pentagon's inspector general declaring that the war on Iran “has resulted in strategic inventory shortfalls and revealed industrial base bottlenecks for munitions resupply.” The IG report landed just after President Trump claimed "the United States is producing more Exquisite and Elite Weapons than at any time in our History. They are being delivered on a daily basis to our Forces in the Middle East, and beyond." (Retarded capitalization scheme is, of course, Trump's.)   

This photo of a shattered US Air Force jet at Prince Sultan AFB in Saudi Arabia was one of several leaked to CBS 

Also this week, the Congressional Budget Office said the Pentagon spent $38 billion on this war of choice -- and that's only through Aug 1. CBO said it expects the meter to keep running at about $2 or $3 billion a month as long as the war goes on. Critically, CBO warned that its estimates were hampered by the Defense Department's refusal to respond to requests for information. 

CBO's numbers do not account for a rebuilding of the many US bases in the region that have been hammered by Iranian fire and abandoned by US forces. To the extent this abandonment becomes prudently permanent, excluding that cost may make sense. 

CBO further estimated that, as things stood back on Aug 1, it would take $22 billion to restock expended munitions -- attributing $7 billion to cruise missiles and $13 billion for air defense interceptors. “The shortfall would become especially problematic if a conflict arose with an opponent whose arsenal included large numbers of ballistic and cruise missiles,” the CBO reported.

“Claims of U.S. munition shortages are false,” said Pentagon spokesman Sean Parnell. “We have everything required to strike at the time and place of the President’s choosing.” Of course, this is the same administration that falsely told us Iran was on the threshold of having a nuclear bomb.  

Tyler Durden Wed, 09/16/2026 - 17:20

House Panel Votes To Hold Billionaire Leon Black In Contempt For Ghosting Epstein Investigators

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House Panel Votes To Hold Billionaire Leon Black In Contempt For Ghosting Epstein Investigators

Authored by Zachary Stieber via The Epoch Times,

Businessman Leon Black, who skipped a deposition regarding his relationship with the late sex offender Jeffrey Epstein, should be held in contempt of Congress, a House of Representatives panel recommended on Sept. 15.

Former Apollo Global Management CEO Leon Black (R) arrives for an interview with the House Oversight Committee in Washington on June 26, 2026. Kevin Dietsch/Getty Images

The House Oversight Committee unanimously voted 41-0 to advance a contempt resolution of Black, 75, to the full chamber. House leadership will decide whether to take up the matter in the future.

Black's lawyer did not return a request for comment by the time of publication.

Black was subpoenaed to testify to the committee regarding his relationship with Epstein, who was convicted of soliciting a minor for prostitution and faced sex trafficking charges when he died in federal prison in 2019. The committee also told Black, under subpoena, to provide documents it said were critical to its investigation of Epstein and his network.

"He defied Congress and refused to do either," Rep. James Comer (R-Ky.), committee chairman, said ahead of the vote. "Instead, Mr. Black is hiding behind litigation to delay having to provide answers to the American people. No one is above the law. Mr. Black will be treated the same as anyone else in this investigation, and his actions have consequences."

Black had previously appeared for a voluntary interview, but had refused to answer some questions, prompting the subpoenas.

Black sued the committee after avoiding the subpoenas, telling a court that the subpoenas were invalid because they sought "private information that bears no legitimate connection" to the committee's legislative purpose and would "expose women who value their privacy, who have no known or public connection to Epstein, who bargained for confidentiality and have refused to release it, and who have no ability to protect themselves and their privacy before the Committee."

The case is ongoing.

Black, who co-founded Apollo Global Management, had a "close personal relationship" with Epstein during the time that Epstein was allegedly engaged in sex trafficking, according to a report from the panel. Black also paid Epstein more than $158 million over the years, and potentially more than $170 million, according to the report.

"As a result of his extensive dealings with Epstein, Mr. Black possesses firsthand information regarding the activities of Epstein and Maxwell and their efforts to establish relationships and curry favor with influential individuals while engaged in sex trafficking," the report said. "His testimony may inform the Oversight Committee's consideration of legislative reforms designed to combat the operation of sex-trafficking rings and efforts to shield such activities from scrutiny."

Rep. Robert Garcia (D-Calif.), the top Democrat on the panel, said on Tuesday that lawmakers believe Black "is at the heart of the Epstein network."

"This is a private equity billionaire worth roughly $13 billion dollars. We need to know why Jeffrey Epstein got over 180 million dollars from Mr. Black. We know this money enabled Epstein's activities for years, and we need to know how and if it led to the abuse of women and girls. We need to know about Leon Black and Jeffrey Epstein's financial dealings," he added.

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Tray

Knife

Notebook

AirTag Wallet

Pen

Tyler Durden Wed, 09/16/2026 - 17:00

Dario Amodei's Brain Trust Of Bad Ideas

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Dario Amodei's Brain Trust Of Bad Ideas

Authored by Jordan Schachtel via American Greatness,

Anthropic CEO Dario Amodei wants to shape the future of artificial intelligence - and, by extension, the future of civilization. Yet in doing so, he seeks input and advice from an ideologically uniform group of individuals and institutions.

In a series of sprawling essays on his website, Amodei has outlined his expectations for a world transformed by powerful AI. His forecasts range from curing diseases and accelerating economic growth to creating catastrophic biological threats and destabilizing the balance of power between the United States and China.

These essays are presented as the work of a sober-minded technologist trying to navigate humanity through an unprecedented transition.

In the acknowledgments section, Amodei inadvertently reveals insight into the ideas forming his worldview.

Across four of his major essays - "Machines of Loving Grace," "The Urgency of Interpretability," "The Adolescence of Technology," and "Policy on the AI Exponential" - Amodei thanks a recurring cast of advisers and intellectual collaborators. The list includes Tom McGrath, Martin Wattenberg, Chris Olah, Ben Buchanan, Kevin Esvelt, Parag Mallick, Stuart Ritchie, Matt Yglesias, Erik Brynjolfsson, Jim McClave, Allan Dafoe, Mariano-Florentino Cuéllar, Richard Fontaine, Buddy Shah, Vas Narasimhan, Nick Beckstead, Jason Matheny, and Brad Carson.

Amodei thanks this group for their contributions to his ideas, comments on his drafts, and help to strengthen his thinking.

Of course, these acknowledgments do not prove some kind of uniformity of worldview. However, they help us map his intellectual world.

And that world is remarkably homogeneous.

It includes, unsurprisingly, Anthropic insiders but also establishment academics, liberal policy experts, national-security think tankers, NGO executives, and prominent figures intertwined with the Effective Altruism (EA) movement.

Here are some of the more notable characters Dario Amodei has cited:

  • Matt Yglesias is a high-profile liberal journalist.

  • Ben Buchanan, an Anthropic adviser, served as a special adviser for AI at the White House Office of Science and Technology Policy.

  • Allan Dafoe is a prominent name in the Effective Altruism community, and he established one of its AI academic centers at Oxford.

  • Nick Beckstead is a high-profile figure in the Effective Altruism network.

  • Jason Matheny has deep, longstanding ties to the EA world, and he's now president of the RAND Corporation.

  • Richard Fontaine runs the left-leaning Center for a New American Security (CNAS), a major Democratic Party policymaker incubator in D.C.

  • Mariano-Florentino Cuéllar is the chief global affairs official at Anthropic and has long been a staple in the Democratic Party legal world.

  • Chris Olah is an Anthropic cofounder.

  • Stuart Ritchie is the research communications lead at Anthropic.

  • James "Jim" McClave is an early Anthropic investor who has long been embedded in the EA community. McClave reportedly made one of the largest 2022 contributions to Future Forward, a super PAC that supported Joe Biden.

  • Neil "Buddy" Shah is the CEO of the Clinton Health Access Initiative.

  • Brad Carson is a former Democratic congressman who served in senior positions in the Obama administration.

What is missing from this collection of contributors?

First and most obvious, there is no identifiable right-leaning intellectual, academic, or policymaker in the mix. Dario Amodei does not appear to consult with any White House-aligned voices, and few, if any, critics of centralized power or anyone skeptical of unverifiable international agreements with China.

We can't find anyone publicly mentioned within Amodei's brain trust who seems to recognize that global, U.N.-like institutions frequently fail or become quickly corrupted by a group of credentialed "experts" who inevitably just seek to increase their own power and status.

His brain trust is indeed diverse in professional specialization, but it's painfully narrow in ideological diversity.

That likely explains the liberal-internationalist-meets-Effective-Altruist blend that runs through his writing and media appearances. Amodei combines the Effective Altruist obsession with extinction-level AI risks with the liberal internationalist worldview, which posits that an "expert" class can design more useful international institutions outside of America's sovereign borders.

In "Machines of Loving Grace," putting aside the hyper-pagan notion of a machine God, Amodei is quite optimistic about AI being used to advance a variety of fields that can result in human flourishing. The essay considers a near future in which powerful AI systems are making decades of scientific progress in just months or years.

In "The Adolescence of Technology," however, Amodei concentrates on the darker side of the same exponential curve. He discusses autonomous AI, bioweapons, economic displacement, and authoritarian inputs that could threaten much of humanity. Consulting with his brain trust, Amodei is determined to construct systems capable of guiding us through this dangerous period of "adolescence."

In "The Urgency of Interpretability," he calls for transparency laws and strict export controls on AI chips to China. He argues, in consultation with his brain trust, that America could create enough breathing room to make powerful systems more understandable before geopolitical competition makes caution impossible.

Amodei isn't wrong to point out that AI companies should definitely test their systems before public release.

And it's wise to continue dedicating resources to researching how to understand these novel systems.

Yet Amodei's institutional reflex is visible throughout his writing. When he encounters something that is determined by his West Coast bubble as a risk, the "expert" brain trust fills in the gaps on policy and morality.

In his latest proposals, Amodei has floated something of a U.N.-style AI standards body and a Paris Climate Deal 2.0 with China.

Amodei told CBS, "The worry I have - I am concerned that one single government could abuse this technology just as easily as a single company could."

He added, "But I think a combination of democratically elected governments - I don't know about handing over, but some kind of oversight, some kind of joint governance."

As for the China deal, he says the agreement must be verifiable. He even concedes that an AI pause is unlikely because the incentive to cheat would be enormous. Yet he still presses as if this is the best option. If that sounds like Hillary Clinton and Barack Obama, it's not some accident of interpretation. He is using the liberal internationalist playbook.

As the Paris climate agreement already showed, the Chinese Communist Party is not a good-faith participant in international agreements. It is an adversarial regime seeking technological, military, and geopolitical supremacy over the United States.

A climate change-style agreement is hard enough to verify. With AI, it's even more difficult. Do we really think China is going to hand American inspectors a list of its most capable data centers, military facilities, intelligence-gathering sites, and a whole variety of other secret networks that are critical to its national AI program?

Amodei can see the problem, as evidenced in his writing, but his narrow intellectual brain trust prevents him from following it to its logical conclusion. He recognizes the behavior of adversarial states while retaining faith in the institutions that assume cooperation among them. And he wants to create new global government institutions that will supposedly solve these problems.

This is the reality of living and operating in the San Francisco tech bubble. Dario Amodei and his ideologically narrow group have introduced a series of highly elaborate ideas that have not been stress-tested by reality and history.

Everyone helping him answer complex questions comes from the same constellation of institutions, liberal policy shops, Effective Altruist-connected organizations, and technocratic philanthropy. His U.N. for AI and Paris 2.0 "solutions" reflect the blind spots in his thought process.

Before determining that he has all of the firepower to solve all of the big problems in AI, Dario Amodei should first consider expanding his own context window.

Tyler Durden Wed, 09/16/2026 - 16:20

Beyond Oil And Gold: Venezuela Readies First US Aluminum Shipment In Years As Resource Race Heats Up

Zero Hedge -

Beyond Oil And Gold: Venezuela Readies First US Aluminum Shipment In Years As Resource Race Heats Up

Venezuela is emerging as a source of energy and critical materials for the US as the Trump administration expands sourcing channels within the Western Hemisphere. Existing crude trade and a gold supply agreement with Caracas are being paired with efforts to develop broader industrial metal ties, including potential access to nickel and iron ore. That expansion may now include aluminum.

Bloomberg reports 15,000 metric tons of aluminum produced by state-owned Venalum could depart Venezuela by the end of the week under a deal involving Mercuria Energy Group and Heeney. 

US officials could announce the deal earlier this week during the G20 energy summit in Houston. Folks familiar with the shipment say it is worth nearly $50 million and would be modest relative to US consumption. 

The outlet previously reported that Mercuria and New York-based mining investment firm Heeney are in discussions with Venezuelan authorities to operate the Venalum smelter that was built in the 1970s with annual capacity of 430,000 tons. 

Years of underinvestment and power outages left the Orinoco River complex operating at a fraction of that level but new investments could revitalize the smelting plant. 

The 15,000-ton Venezuelan cargo equals roughly .4% of that annual import requirement. It would provide modest relief and another sourcing channel for the US when the domestic market is already tight. 

Beyond aluminum, the US Energy Under Secretary Kyle Haustveit said last month that US refineries were receiving more than 500,000 barrels per day of Venezuelan crude. There was a report earlier this year that State-owned Minerven agreed to supply US with 650 to 1,000 kilograms of gold dore bars to Trafigura for US markets. Washington is also seeking access to critical material markets in the country, such as niobium and tantalum. 

The Trump administration's stated strategy links greater US influence in the Western Hemisphere with secure access to critical resources and supply chains. Its new relations with Venezuela's energy and mining sectors reflect just that. Developing those resources will require substantial investment in production, processing, and infrastructure. 

Building a stable South America really began with ridding the continent of pro-China socialist regimes. Brazil's presidential election next month could cement a generational rightward shift. 

Tyler Durden Wed, 09/16/2026 - 15:45

The Fed's Mortgage Policy Made Homeownership Cost More

Zero Hedge -

The Fed's Mortgage Policy Made Homeownership Cost More

Authored by Antón Chamberlin via The Daily Economy,

The median household in Miami earns about $62,000 annually; homeowners with a mortgage have monthly housing costs pushing $2,900. Annualized, this equals more than half the median household income. In Los Angeles, the numbers come in at $82,000 and $3,500 for 51 percent. New Yorkers are paying 49 percent, and New Orleanians are paying 47 percent of their annual income on housing.

Elena Berd via Shutterstock.

Different coasts, different housing markets, different incomes, regulations, and supply constraints. And all of these cities illustrate a national reality that seems beyond dispute: housing has become extraordinarily expensive.

Lest these cities appear cherry-picked, let us consider Harvard's 2026 State of the Nation's Housing report. Existing-home sales are at a three-decade low. Meanwhile, median new and existing home prices exceed $400,000. Prices for the latter are now 54 percent higher than in 2020, nearly five times median household income.

Financially, mortgage rates sit above 6 percent. By late 2025, the monthly cost of the median-priced home reached roughly $3,100, requiring an annual income above $120,000 to afford it, compared with about $1,700 and $66,000, respectively, in early 2020.

This bleak picture is obviously the product of many factors. One, however, was the Federal Reserve's intervention in the housing market. During the COVID lockdown era, the Fed entered the mortgage market on a massive scale, helping push borrowing costs to historic lows. But its intervention did more than simply lower mortgage rates. It also affected households differently, creating benefits for those already in the housing market while making entry more difficult for those who were not.

The Fed's mortgage-backed-security (MBS) purchases helped capitalize cheap credit into higher home prices, which enriched current homeowners, all the while increasing the costs of entry for prospective buyers. Then, when the Fed raised rates to fight inflation, those same outsiders faced both higher prices and higher financing costs.

Beginning in March 2020, the Fed purchased trillions of MBSs, with Agency MBS holdings rising 93 percent in about two years, reaching $2.7 trillion by mid-2022. The Fed's immediate objective was seemingly achieved. Mortgage rates fell to historic lows, which the Dallas Fed explicitly laid at the feet of the Fed's MBS purchases.

Economic consequences, however, as Bastiat and Hazlitt showed for decades, extend beyond the short-run and the targeted groups. Cheaper mortgages increased households' purchasing power and contributed to greater housing demand, placing upward pressure on prices in a market where supply could not quickly adjust. Once inflation arrived, the Fed raised rates, causing this double whammy for would-be buyers. This had important distributional consequences.

At its peak, the Fed owned 32 percent of the entire agency MBS market. These purchases resulted in MBS prices rising and their yields falling, causing mortgage spreads to tighten. This tightening pushed mortgage rates down, allowing buyers to finance larger principal balances. Expanded borrowing opened up possibilities for buyers, further fueling housing demand. With the housing supply unable to sufficiently catch up to the new demand, the financial benefits were met with higher prices on the existing housing supply.

These results were not uniform, however. As with other exercises of monetary policy, where money enters matters.

The Cantillon Effect Comes Home

As Nicolás Cachanosky explains, new money does not enter an economy everywhere, and certainly not simultaneously. Fed actions consist of particular injections at particular points, then following particular paths. It is punctiliar by nature, and this results in changing relative prices, which benefit earlier recipients before prices have adjusted to the intervention. In this context, the relevant "early recipients" do not necessarily receive literal new money, but the injection in question occurs in financial markets closely connected to mortgage credit.

Households can be divided into at least two groups: incumbent owners and prospective buyers, both of whom experience the Fed policy differently. Incumbent owners already possess an appreciating asset, with the potential to refinance at the initial lower rate, seeing their home equity rise. Prospective buyers, by contrast, possess no appreciating asset; therefore, they see their desired homes become more expensive. The same appreciation that increases an incumbent homeowner's net worth increases the price of entry for everyone still trying to buy.

Beginning in 2022, the Fed changed direction. But tightening does not just unwind the past. Homeowners who had purchased or refinanced at historically low rates could keep those mortgages, while new buyers faced even higher rates. The Fed noticed this "lock-in" effect. By June 2024, more than 90 percent of its MBS holdings had coupons below 4 percent.

The Fed's policy can be broken down into two segments, then. During the easing period, low rates and rising prices fed equity gains for homeowning incumbents. Then, the tightening led to a lock-in of those owners at the previously lower rates, as outsiders saw higher rates. And, of course, first-time buyers typically possess neither asset: the equity nor the existing low-rate mortgage to offset these higher financing costs.

A Federal Reserve study from 2023 documented this phenomenon. A one-percentage-point increase in mortgage rates reduced the share of low- and moderate-income homebuyers by about 7.5 percent, with low-income buyers falling by 16 percent. These effects were even larger for first-time buyers. There was also little evidence of larger down payments to counteract the rising rates, suggesting that many could not substitute savings for the higher monthly payment. Evidence also suggests that loose monetary policy passing through to mortgage rates negatively affects family formation and fertility rates.

In total, then, we see the following. Lower rates create unequal access to cheap credit, and the subsequent higher rates affected buyers disparately. The Fed changed not only the cost of financing a house, but the composition of participants in the market. Interest rate policy altered who could buy.

America now has expensive housing, huge mortgages, fewer purchases, declining homeownership, and a growing segment of the population crowded out. At the very least, the Fed exacerbated this from 2020-2022. The broader lesson here is that monetary policy does not change interest rates or prices in isolation. Money always enters particular markets, changes particular relative prices, and creates particular winners and losers. In this instance, the Fed inflated the price of a scarce asset (appreciation for current homeowners). Once the subsidy was removed, the wealth redistribution it caused did not reverse. The consequence is our current state - not just housing inflation, but a higher price of entry.

Tyler Durden Wed, 09/16/2026 - 15:25

"Calm Before The Storm?" UBS Warns Of Stock Market Turbulence As Midterms Loom

Zero Hedge -

"Calm Before The Storm?" UBS Warns Of Stock Market Turbulence As Midterms Loom

"This may be the calm before the storm," UBS chief economist Arend Kapteyn wrote in a note on Wednesday morning.

Kapteyn is referring to a historically turbulent stretch for equity markets ahead of midterm elections, which threatens to amplify the seasonal rise in market volatility.

"Indeed, since 1928, these have been the most volatile months of the calendar, with volatility increasing in both election and non-election years before falling sharply thereafter," Kapteyn continued.

Since 1950, the president's party has lost an average of 25 House seats and three Senate seats in midterm elections, Kapteyn said.

For this election, Kapteyn cited betting odds close to 50-50 for Democratic control of the Senate, asserting there was little reason to expect less uncertainty or volatility in the months ahead.

Bank of America's Michael Hartnett expects a market rout if Democrats sweep. Traders worry that Democrats have already signaled regulatory safeguards and data center moratoriums that could stymie the AI bubble. We detailed these threats in a note titled "If Dems Win The House: Data Centers, Nuclear, Venezuela Oil Deal Likely Targets."

Meanwhile, JPMorgan's Andrew Tyler recently shared his base-case with clients: Across the 23 midterm cycles since 1934, the sitting president's party has lost roughly 27 House seats and about 3 Senate seats on average. Applied to a 218-seat Republican House majority and a 53-47 Senate, history says Democrats take the House and Republicans hold the Senate. And while betting markets give Dems an 85% chance of taking back the House, the chance Republicans keep the Senate is a very tight 53% according to Kalshi. 

Polymarket suggests the market is pretty sure the Dems will sweep... 

Kapteyn added more color on equity vol trends: 

The S&P's performance mirrors this volatility pattern. During midterm election years, the S&P 500 has typically declined between late August and early October, but by March of the following year it has recovered and delivered an average return of roughly 14% (with a median return of 16.4%).

The only exceptions were 1978, during the inflation shock, 2002, following the tech bubble burst, and 2018, amid trade-war tensions and Fed tightening. By contrast, the average return over the same period in other years is less than 5%. With betting odds of Democratic control of the Senate still close to 50-50, there is little reason to believe uncertainty (and volatility) will be lower this year than in past midterm election years

Kapteyn then questions: "The calm before the storm?" 

* * * Perfect EDC flashlight...

Tyler Durden Wed, 09/16/2026 - 15:05

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