World's Largest Data Center Project On Verge Of Collapse After Blackstone Unexpectedly Pulls Out

Up until now, when it comes to real estate, Blackstone was best known in recent years for dumping many of its trophy office properties - which in the aftermath of work from home never recovered their projected cash flow potential - at a huge discount. Now, it may be pulling a page from its old, pre-Lehman playbook  by calling the top in yet another commercial real estate segment: data centers. 

Two days ago we reported that Blackstone was selling its stakes in a trio of data centers across Northern Virginia for $3.5 billion, cashing out of part of a bet it made less than three years ago. According to Bloomberg, Digital Realty Trust would pay $1.2 billion of cash and offer $2.3 billion of its shares (which the PE giant has largely cashed in by now) to Blackstone funds; in exchange, the data center company will acquire Blackstone’s 80% interest in two 96-megawatt data centers in Manassas, Virginia, and a 50% interest in a 96-megawatt center in nearby Sterling.

We said that "the question is why did Blackstone decide to pull the cord now, just as fresh doubts are creeping whether the Mag 7s will continue funding the AI expansion with virtually unlimited capex."

Two days later we have an answer. 

The digital ink is barely dry on its Virginia data center sales, and we learn that Blackstone’s QTS (QTS Realty Trust) is again quietly fading its AI exposure by walking away from plans to build its portion (which at this point is the only portion left after its partner already pulled out days ago) of a 2,100-acre data center campus in Virginia - also known as Prince William Digital Gateway which would house as many as 37 data-center buildings - handing a win to residents who fought for years to topple the project. 

QTS's proposed facility at 9400 Godwin Drive in Manassas

The data center developer had planned to transform more than 800 acres in Northern Virginia’s Prince William County, a project that would have spanned 22 million square feet, making it the largest data center campus in the world. Located on the edge of an historic Civil War battlefield and on what used to be land protected from development, the project ignited strong pushback from homeowners and has been stalled by lawsuits.

As part of Wall Street’s broader push into data centers, investment has poured into Northern Virginia, which is considered the country’s largest data center market, and is better known as "Data Center Alley" 

But in a strategic U-turn, in recent days QTS executives decided that it isn’t worth pressing forward in court, the Bloomberg sources said. The firm’s attorneys plan to inform the court of their decision as soon as this week, the people said, asking not to be named discussing non-public information.

QTS’s rapid growth has made it a poster child of how private equity has fueled the data center industry’s breakneck expansion. Those ambitions are colliding with public anxiety over strains to electricity grids and home prices from AI data centers.

The retreat may be the final blow to Virginia’s “Digital Gateway” project, a mega site roughly twice the size of New York’s Central Park with city-sized power needs. The initiative was supposed to bring in some $100 billion in spending and create one of the world’s largest technology corridors. Not any more. 

The project had sparked contentious, drawn-out public hearings. A clerical blunder related to a key zoning meeting created setbacks for developers. Already, Brookfield-backed Compass Datacenters, which was supposed to build on more than 800 acres at the site, had pulled out in May. 

The U-turns by both firms, Bloomberg writes, amount to one of the most dramatic retreats by developers from a data center project.

It’s a reminder of how tech firms’ race for the computing infrastructure to support AI advances is increasingly facing the same bottlenecks, from power shortages to supply crunches, we have been warning about for the past two years and which Citadel Securities warned about just yesterday.

Organized opposition is mounting, forcing firms and developers to be more deliberate about where they choose to build. This is precisely what we warned one year ago would happen as more grassroots organizations pushed back against the relentless data center rollout. At least we haven't gotten to the arson stage (yet).

between exploding electricity bills and lack of jobs for grads, a new luddite revolution is coming - they will be burning down data centers within a year

— zerohedge (@zerohedge) August 25, 2025

To account for the costs of such build outs, Virginia recently passed a budget with an energy consumption tax on data centers, and more states are threatening moratoriums on new development. Data centers - and how their costs and benefits are shared - are now emerging a major swing issue in the lead up to the US midterm elections. These hurdles raise questions for investors over whether the AI build out can keep going at this pace. 

For community organizers and residents that spent the last five years opposing the Digital Gateway, QTS’s pullout will now validate a playbook that involved pressure campaigns on local politicians and legal attacks. It will also unleash even more powerful blowback nationwide against these unwanted developments.

As Bloomberg recalls, hundreds of proponents and critics showed up at a 27-hour zoning hearing in 2023 to lobby authorities on the project. After county officials narrowly voted to approve the conversion of agricultural and semi-rural land for data centers, community organizers and residents pursued lawsuits.

The outcome of the meeting - and whether the county properly advertised the event - was at the center of legal challenges. The lawsuits hinged on one detail: The first two newspaper notices publicizing the hearing weren’t separated by at least six days, as state and local codes required at that time. While it is unclear if Blackstone agents had tried to "grease" the zoning board's palms to quietly fast-track the data center, in the end the outcome was catastrophic to the builders. 

In March, Virginia courts upheld an earlier ruling that the zoning approvals were invalid because the public notices for the meeting fell short of rules.

Opponents of the Digital Gateway data center project rallies at Manassas Battlefield Park.

“While we still believe this project offered significant benefits for the region and our neighbors, recent legal actions and compounding regulatory hurdles have effectively closed a viable path forward,” Compass Datacenters President AJ Byers said in a statement following the ruling.

After Compass bailed on the project, that left QTS as the lone developer. It was the only party that petitioned for an appeal of the case in Virginia’s Supreme Court.

Originally, the firm’s executives were concerned about the prospect of setting a legal precedent on the back of an administrative oversight. After Compass’s retreat, QTS lost a partner who would share the costs of upgrading various utilities needed for the massive developments, said one of the people familiar with the matter. QTS decided it was not worth proceeding with the project.

Blackstone, which acquired QTS in 2021, is a major financier of data centers, with a portfolio of more than $150 billion of such assets around the world. 

The increasingly bitter political and grassroots pushback against new data center construction explains why Blackstone has been getting cold feet just as the AI bubble is peaking, first selling existing data centers and now walking away from upcoming projects.  A recent Gallup poll found that 7 in 10 Americans oppose constructing data centers for artificial intelligence in their local area, including nearly half, 48%, who are strongly opposed. Barely a quarter favor these projects, with 7% strongly in favor.

Half of opponents mention data centers’ excessive use of resources, including 18% each mentioning their use of water and energy. Sixteen percent mention a related environmental concern of pollution, including noise pollution and air and water pollution.

About one in five opponents are concerned with the impact on local quality of life, including increased population, increased traffic and preferring that the land be used for other purposes. A similar share mention potentially negative economic consequences, including higher utility bills, cost-of-living increases, and the cost of building the data centers (which could involve the use of taxpayer funds).

Most of the remaining opposition stems from general or specific concerns about artificial intelligence.

Blackstone, which manages more than $1.3 trillion, bills itself as the largest global provider of data centers, and also owns some of the utilities that power them. It acquired QTS in 2021 and bought Australian computing provider AirTrunk in 2024. In May, the firm held an initial public offering for Blackstone Digital Infrastructure Trust Inc., its data center acquisition vehicle, which aims to buy already built and leased properties benefiting from the artificial intelligence boom.

And now that the protest movement knows how to push back against uninvited Wall Street occupants, thanks to the BlackStone capitulation, expect an exponential increase in legal (and other) attempts to hinder the rollout of data centers across the US, assuring that the AI supercycle, which is already years behind schedule with just half of the data centers meant to be built in progress and on time, will expect to see an avalanche of delays and cancellations assuring that the return on debt-funded capex will be even less as eventual launch dates gradually move ever further into the unknown future. 

Tyler Durden Thu, 07/02/2026 - 17:20

US Nuclear Regulator Proposes Changes To Nuclear Safety Standards

Authored by Jill McLaughlin via The Epoch Times,

A U.S. nuclear regulatory agency proposed sweeping reforms July 1 to modernize nuclear reactor licensing and safety practices, shifting away from a global radiation measurement standard after 50 years.

The cooling towers for units 4 (L) and 3 (R) are seen at Plant Vogtle, operated by Georgia Power Co., in east Georgia's Burke County near Waynesboro, Ga., on May 29, 2024. Arvin Temkar/Atlanta Journal-Constitution via AP, File

The regulatory changes are expected to make it faster and easier to build more nuclear reactors to meet increased energy demands.

The Nuclear Regulatory Commission (NRC), an independent federal agency that oversees licensing and regulation of nuclear energy and radioactive materials, expects the changes will streamline regulations without lowering safety standards.

"NRC's regulations have not kept pace with new technologies and our energy needs," Chairman Ho Nieh said in a July 1 statement. "This proposed rule strips out rigid frameworks and unnecessary conservatism to accelerate the safe deployment of new reactors and expand existing capacity across America."

The effort is part of President Donald Trump's executive order, "Ordering the Reform of the Nuclear Regulatory Commission," signed May 23, 2025, calling for his administration to reform the agency's regulations and operations to achieve dominance in the global nuclear energy market.

The order also sets out goals to quadruple American nuclear energy capacity from about 100 gigawatts in 2024 to 400 gigawatts in 2050.

To get there, the order calls for adopting science-based radiation limits and reconsidering reliance on the decades-old framework of the linear no-threshold model for radiation exposure and the "as low as reasonably achievable" (ALARA) standard.

"Those models are flawed," Trump's order stated.

The agency was directed to consider adopting determinate radiation limits and consult with the Department of Defense, Department of Energy, and the Environmental Protection Agency.

Changing the model would represent the first major shift in U.S. nuclear policy in half a century.

Critics say that the deregulation could prioritize economic growth over public health.

Changing the radiation model has drawn criticism from nuclear safety expert Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists.

Last year, Lyman told the agency in July 2025 there was "absolutely no technical or practical basis" for changing the agency's use of the ALARA principles in its radiation protection regulations.

A report last year by the Conservative Coalition for Climate Solutions found the change would be a step in the right direction for nuclear energy.

Using ALARA standards is enormously costly, raising the price of building and operating nuclear plants by billions of dollars, the 2025 report found. The standards have also created public phobia and misinformation that "any radiation is harmful," according to the report by the coalition's Nick Loris and Prasanna Pydipalli.

Other countries - France and South Korea - are shifting toward threshold-based models using data collected from worksites but haven't yet made the change, the report found.

The coalition concluded that adopting the new threshold standard for radiation would unleash the potential of nuclear innovation.

"By moving from outdated fear-based models to proportionate, risk-informed regulation, the U.S. can lead the next era of safe, reliable, clean, and globally competitive nuclear energy," Loris and Pydipalli wrote.

The commission issued proposed rules to modernize reactor oversight and radiation protection, and issued draft text to reshape its environmental review process under the National Environmental Policy Act.

The agency's proposed changes would give nuclear power plant operators more flexibility in evaluating radiation doses to workers and the public using more up-to-date methods.

Jay Timmons, president of the National Association of Manufacturers representing 13 million workers, commented on the announcement.

"Building more nuclear reactors here at home is how we secure America's energy future and unleash American energy dominance," Timmons posted on X on July 1.

The U.S. Department of Energy's "Reactor Pilot Program shows what is possible when policymakers embrace innovation instead of standing in its way," Timmons said.

Energy Secretary Chris Wright testifies before the Senate Armed Services Committee hearing on the budget request for the Energy Department on Capitol Hill in Washington on May 13, 2026. Manuel Balce Ceneta, File/AP Photo Tyler Durden Thu, 07/02/2026 - 17:00

Warren Pushes Progressive Agenda In Senate Primaries As Schumer Prioritizes Path Back To Majority

Senate Minority Leader Chuck Schumer and Sen. Elizabeth Warren are engaged in a high-stakes contest for influence over the future direction of Senate Democrats, with the Massachusetts progressive working to reshape the caucus through targeted primary support while the New York leader focuses on expanding the map to retake the majority.

Warren has thrown her weight behind several challengers who have explicitly said they would not support Schumer remaining as leader if Democrats regain control. She has framed her involvement as a response to voter demand for bolder action on economic issues and systemic change, pointing to recent primary successes by candidates aligned with New York City Mayor Zohran Mamdani as evidence that the party's base is ready for a sharper break from the status quo.

In comments to The Hill, Warren highlighted the outcomes in New York's House primaries, where three Mamdani-backed candidates prevailed against establishment-backed incumbents. She described the results as a reflection of broader voter sentiment rather than isolated events. "It says more about the state of voters. Voters want change. They want people who have clear ideas about how to make their lives better and to know that they will fight for them," Warren said.

Those New York victories were widely viewed as setbacks for the Democratic establishment. The wins featured strong showings by progressive and democratic socialist candidates and included moments of open frustration with party leadership, such as crowds at victory events chanting "You're next" when House Minority Leader Hakeem Jeffries appeared on screen. Warren had endorsed Mamdani during his successful 2025 mayoral bid; Schumer did not publicly support him.

Watch as supporter chant "You're Next" at Hakeem Jeffries during Claire Valdez' victory party last night after all three Mamdani-endorsed socialists won their Congressional races.

The Democrat Party is now the Party of socialism - and the establishment Dems can't put that genie… pic.twitter.com/anlIZFq0n7

— Conservative Brief (@ConservBrief) June 24, 2026

Schumer, a prolific fundraiser, has concentrated on recruiting and backing candidates he believes have the best shot at winning competitive general elections. A spokesperson for the leader emphasized that his sole priority is "taking back the Senate" to block President Trump's agenda and deliver results for Americans, arguing that recent recruitment efforts have created a credible path to majority status that few anticipated a year ago.

The friction between the two senators has become harder to downplay. Democratic strategist Steve Jarding noted that successful Warren-backed candidates would likely serve as "soul mates" on key issues, elevating her standing within the progressive wing of the caucus.

An anonymous Democratic senator aligned with Warren described to The Hill growing unease among progressives that Schumer and DSCC Chair Kirsten Gillibrand are too closely tied to corporate interests. The senator singled out Gillibrand's role in advancing cryptocurrency deregulation legislation as particularly problematic and questioned Schumer's recruitment of 78-year-old Maine Gov. Janet Mills to challenge Sen. Susan Collins. The source called Mills a "conservative, business-oriented Democrat" lacking grassroots energy at a moment when the party's base wants the system disrupted, drawing parallels to concerns raised after President Biden's 2024 debate performance.

Warren has endorsed multiple Senate primary candidates who have distanced themselves from Schumer's leadership, including Graham Platner in Maine, Lt. Gov. Juliana Stratton in Illinois, and state Sen. Mallory McMorrow in Michigan. She has also backed Lt. Gov. Peggy Flanagan in Minnesota and Zach Wahls in Iowa, neither of whom has committed to supporting Schumer. Schumer, by contrast, backed Mills in Maine and Rep. Haley Stevens in Michigan.

In Iowa, the super PAC VoteVets - historically aligned with Schumer - spent roughly $10 million supporting Josh Turek, who defeated Wahls. Schumer and Gillibrand issued a joint statement celebrating Turek's nomination as putting the seat "firmly in play" for November.

Warren has supplemented her candidate endorsements with substantial fundraising, contributing a total of $800,000 to state Democratic parties in six battleground states this cycle: Alaska, Georgia, Maine, Michigan, North Carolina, and Ohio.

She has defended her choices, particularly her support for Platner, arguing that he connects directly with Mainers struggling economically and is committed to fighting corruption and lowering costs in Washington.

Despite the visible tensions, most Democratic senators do not expect Warren to mount a formal challenge to Schumer's leadership after the midterms. She is seen primarily as a policy advocate rather than someone positioned to manage a large and diverse caucus. A Warren spokesperson confirmed she "has no interest in being the Senate Democratic leader." When asked directly about the possibility, Warren laughed softly and replied: "I want to do everything that I can to help working families. We need a Democratic Party that's ready to be in the fight."

Tyler Durden Thu, 07/02/2026 - 16:40

Ex-CIA Chief John Brennan Sues Trump, Admin Officials Over Allegedly Vindictive Investigations

Authored by Timothy Frudd via The Epoch Times,

Former CIA Director John Brennan is seeking a court order requiring the Trump administration to retain records related to allegedly vindictive investigations into him and his involvement in probing alleged Russian interference in the 2016 presidential election.

Former Director of the U.S. Central Intelligence Agency (CIA) John Brennan testifies before the House Permanent Select Committee on Intelligence on Capitol Hill in Washington on May 23, 2017. Alex Wong/Getty Images

While the Justice Department hadn't formally brought an indictment against Brennan, his lawsuit noted that it had undertaken grand jury investigations in recent months. He accused prosecutors of abusing their authority and said there was reason to believe the administration wasn't preserving records as required under law.

Brennan said the judge's order was necessary to preserve his constitutional rights and evidence that he could use to prove vindictiveness in a would-be prosecution.

"This Administration has adopted a policy of using criminal process and prosecution to punish the President's perceived adversaries," Brennan's legal team wrote in the court filing.

"It is against this backdrop that former Director of the Central Intelligence Agency, John O. Brennan ... is being vindictively singled out for investigation and prosecution."

The lawsuit filed by Brennan's legal team on Wednesday names President Donald Trump, acting Attorney General Todd Blanche, FBI Director Kash Patel, CIA Director John Ratcliffe, White House chief of staff Susie Wiles, and other government officials as defendants.

A Justice Department spokesperson told The Epoch Times, "While we cannot comment on the existence, or lack thereof, of an investigation, it is certainly rich that John Brennan is accusing anyone of a 'retribution campaign.'"

Brennan's lawsuit focused on two investigations. One centered on an alleged conspiracy to deprive Trump of his rights by probing alleged Russian interference. Another was related to statements he made to Congress regarding an intelligence community assessment of Russian influence during the election.

Brennan's legal team said Justice Department officials have "taken steps that clearly violate well-established norms and limitations on prosecutorial conduct" as part of the Trump administration's investigations.

"Those overreaching actions have violated Director Brennan's constitutional rights and will serve as the basis for challenges to any resulting charges, including motions to dismiss any indictment on the grounds that it is the result of selective and vindictive prosecution," they wrote.

The lawsuit noted that the examination of prosecutors' emails, texts, and other communications would allow the courts to determine if decisions were based on legitimate law enforcement concerns or an effort to "selectively" and "vindictively" prosecute the former CIA director.

"There is a very real risk, however, that some of these materials and communications will no longer exist by the time any such challenges are filed and the court hears them," the lawsuit stated.

Brennan's legal team cited technology changes that it said do not ensure the routine preservation of communications and "ample evidence in the public record" of Trump administration officials failing to meet legal obligations to preserve records as the two reasons for its concern.

The lawsuit said the Trump administration is obligated to preserve records and evidence that would be relevant in a potential challenge if Brennan were indicted. Brennan's legal team pointed to both the Presidential Records Act and the Federal Records Act as regulations covering many of the communications and materials involved in the two investigations.

Brennan was previously referred for criminal prosecution by the House Judiciary Committee over his connection with an investigation that was launched in 2016 into suspected Russian influence on Trump's presidential campaign. Rep. Jim Jordan (R-Ohio), chairman of the House Judiciary Committee, said in October 2025 that Brennan allegedly "knowingly made false statements during his transcribed interview" in May 2023 and that his testimony on the 2016 investigation into Trump included "numerous willfully and intentionally false statements of material fact."

In the House Judiciary Committee's criminal referral, Jordan wrote, "Brennan falsely denied that the CIA relied on the discredited Steele dossier in drafting the post-election Intelligence Community Assessment."

Brennan previously accused the Trump administration in December of attempting to judge shop, a practice used to file a lawsuit in a court with a judge likely to give a favorable ruling. The former CIA director asked U.S. Chief Judge Cecilia Altonaga of the Southern District of Florida to prevent U.S. District Judge Aileen Cannon, who dismissed the classified documents case against Trump in 2024, from being involved in future proceedings.

Tyler Durden Thu, 07/02/2026 - 16:20

Iran Runs Into Big Problem: No Buyers For Its Oil, As Full Tankers Pile Up Off China

Iran was euphoric when as part of the Trump MOU, it got permission to flood the world with its oil after Trump effectively eliminate sanctions that had been in place for 40 years. However, it has quickly run into another, potentially far bigger problem: as the armada of Iranian oil tankers exits the Persian Gulf, it is now struggling to find buyers before the expiry of a 60-day window granted by Washington,

According to Vortexa data and Bloomberg calculations, there are more than 58 million barrels of Iranian crude and condensate was on-the-water as of July 1, yet more than 90% has no clear destination. The vessels are either indicating "for orders" or Singapore as their next port of call, a sign they may conduct ship-to-ship transfers in the Malacca Strait.

A failure to quickly sell the crude will not only deprive Tehran of much-needed revenue, but more importantly, will weaken its hand in the ongoing negotiations with Washington. The Islamic Republic has until mid-August to find buyers after the US lifted sanctions on the oil in the middle of June and ended a blockade of Iranian ports, part of an interim peace deal.

And here is the culprit : demand from Chinese independent refiners - Iran's main customers prior to the conflict - has been muted as the sector's run rates crash to a nine-year low. China's state-owned refiners have also stayed on the sidelines, citing concerns over the ability of banks to finance any deals.

Translation: as we suspected a month ago, China's economy is in far worse shape than telegraphed, and as a result it does not need Iranian oil (what oil it does need it just sources from its massive strategic reserves). 

In Early June we said that confirming our recent reporting on China's oil demand collapse, crude oil imports to China in May fell to their lowest since October 2017 because of the price spike resulting from the Persian Gulf tanker traffic disruption, plunging refinery margins (due to price ceilings imposed by Beijing), of a slowing economy and the rapid slowdown in the economy. 

The May total stood at 33 million barrels, or 7.8 million barrels daily, Bloomberg reported, citing Chinese customs data. This is roughly a 30% drop vs the average daily import rate of 11.6 million barrels last year. As previously noted, refinery run rates are down as well, as are fuel exports, with Beijing careful to make sure there is enough diesel and gasoline for the domestic market. All this is happening as the latest batch of Chinese data was "shockingly bad", promptly fears of a China hard landing.

Most of Iran's oil is in and around the Persian Gulf, in the Indian Ocean or the Malacca Strait near Singapore. However, with Indian imports largely coming from Russia, that only leaves China as the biggest export target. Alas, suddenly China does not want Indian oil, not because it disapproves of the Iranian regime, but simply because its economic slowdown means far less oil is needed!

Iran said on Wednesday that it had shipped more than 40 million barrels of oil since the US lifted its naval blockade to signal strength. However, half of this shipment, or more than 20 million barrels of Iranian crude, has been idling in Asian waters for seven days or longer, up almost 18% from a week earlier, according to Kpler Ltd. The reason is the same: China does not need the oil.

Estimates for the overall volume of the country’s oil on water - either in transit or stationary - have ranged from 58 million to 68 million barrels since the US sanctions waiver kicked in last week. 

A week ago, Bloomberg reported that sellers including middlemen and representatives from the National Iranian Oil Co. made contact with refiners in India, Japan, South Korea and elsewhere even before the license was officially granted, traders involved in the discussions told Bloomberg. That urgency has since increased, they said, however so far there is little favorable response.

Tehran faces a number of obstacles in trying to sell the oil. European Union and UK restrictions are still in place, complicating insurance, while some ports may be hesitant to accept the dark-fleet vessels that Tehran uses to carry its crude. There's also a chance the barrels could get stranded mid-deal if President Donald Trump decided to end the window early.

Buyers remain wary that Washington could reimpose sanctions if negotiations collapse, US Treasury Secretary Scott Bessent told Fox News on Tuesday. "No one other than China, who was already buying it when it was sanctioned, has bought it, so it's still trading at a discount." 

The other major barrier to Iran offloading the crude is a lack of demand in major Asian markets, where there's been little interest despite Tehran's efforts to court buyers. As we have extensively reported, the region is well-supplied, both with non-Iranian Persian Gulf oil that can now transit the Strait of Hormuz and crude from farther afield that was bought during the war.

China's imports of Iranian crude - which have never been subject to US sanctions as Beijing simply ignores them - more than halved in June to about 654,000 barrels a day from a month earlier, according to Kpler. Still, at least one tanker has discharged a cargo of the oil in China over the past week, according to Kpler and Vortexa.

Iran oil exports; China oil imports pic.twitter.com/Z5V6vt0QT4

— zerohedge (@zerohedge) June 5, 2026

Indian Oil Minister Hardeep Puri met his Iranian counterpart in New Delhi last week, but stopped short of committing to imports. The country's state-run processors are avoiding the Iranian oil for now, because they've already secured Russian crude supplies through at least the end of August. They are also still seeking clarity from Washington over US-denominated payments, they added.

India would consider resuming purchases once payment channels are clarified, while a complete withdrawal of sanctions could enable refiners to buy from Iran over the longer term, the people said.

Still, Asian interest in Iranian oil could quickly emerge if the price is right. Refiners that have already secured crude supplies can resell some oil to free up some space, should the shipments be highly discounted, and there's also the option of raising operating rates if raw material costs are cheap. 

Tyler Durden Thu, 07/02/2026 - 15:40

Justice Department Sues California Over Glock Ban, Handgun Roster

Authored by Michael Clements via The Epoch Times,

The Justice Department (DOJ) on July 1 sued California over its ban on "machinegun convertible pistols" and its "handgun roster."

A Glock handgun and two magazines in a file photograph. Rich Pedroncelli/AP Photo

The law bans the purchase of Glock pistols and guns with similar firing mechanisms, according to a DOJ press release.

The handgun roster limits the handguns California citizens can legally buy.

The DOJ claims both are unconstitutional.

Gov. Gavin Newsom signed legislation known as Assembly Bill 1127 in October 2025 to prohibit licensed firearms dealers from selling, transferring, or delivering "semiautomatic machinegun-convertible pistols."

The law went into effect on July 1, the same day that DOJ sued.

Under the law, a machinegun-convertible pistol is "any semiautomatic pistol with a cruciform trigger bar that can be readily converted ... into a machinegun by the installation or attachment of a pistol converter ... without any additional engineering, machining, or modification of the pistol's trigger mechanism."

New York, Maryland, and Connecticut have similar bans.

The law was passed in response to so-called "Glock switches," which are not manufactured or endorsed by Glock.

The switches have been used by criminal gangs around the country.

Pistols sold before Jan. 1, 2026, are grandfathered under the law, which became effective on July 1.

The devices are prohibited by 29 states and under federal law, according to Everytown Research & Policy.

The lawsuit also alleges that the state's handgun roster illegally limits Californians' access to state-of-the-art firearms.

According to the lawsuit, the roster requires specific features such as a chamber-load indicator, which shows the gun is loaded, and a magazine-disconnect mechanism, which prevents a gun from firing when the magazine is out of the gun.

Until recently, the roster also required each gun to mark the handgun's make, model, and serial number onto shell casings fired by the gun. This is commonly called microstamping.

"As a result of these requirements, no new handguns were added to the roster between 2013 and 2023," the lawsuit states.

There is currently an injunction against enforcement of the roster.

However, the lawsuit states the DOJ has a responsibility to act because "these provisions of the roster statute violate the Second Amendment."

Gov. Gavin Newsom criticized the lawsuit in a social media post on X.

"The Trump administration is once again trying to dismantle California's commonsense gun safety laws. California is seeing historic low crime rates and gun death rates. These laws save lives," the post reads.

A spokesperson for Newsom's office reiterated the governor's statement.

Spokesperson Diana Crofts-Pelayo stated that the state has data showing its gun laws have saved lives.

"We won't be intimidated by another politically motivated lawsuit. We'll continue defending the laws that protect Californians and keep dangerous weapons off our streets," Crofts-Pelayo stated in an email to The Epoch Times.

According to the DOJ, the U.S. Supreme Court has ruled that the Second and Fourteenth Amendments protect the individual right to carry handguns outside the home for self-defense.

The lawsuit contends the California laws infringe on that right.

"The Civil Rights Division will defend law-abiding citizens from states that seek to disarm them illegally," said Assistant Attorney General Harmeet K. Dhillon.

California Gov. Gavin Newsom announces new gun legislation in Sacramento on Feb. 1, 2023. Courtesy of Office of Governor Gavin Newsom Tyler Durden Thu, 07/02/2026 - 15:20

SAP Slows Hiring, Freezes Travel As AI Push Accelerates

Not even a day after reports swirled that Microsoft was preparing to cut thousands of employees, and as the broader tech sector continues to hemorrhage white-collar workers replaced by chatbots, the latest AI-related job-displacement news is coming from Europe's largest software company.

Bloomberg reports that German enterprise software giant SAP, best known for software that supports large corporations running core business operations, is preparing to slow hiring and cut travel costs as it diverts more capital toward developing AI tools.

More color from the report:

Going forward, SAP will "exclusively focus new hiring on selected profiles only, mainly core Al roles, that are critical for our long-term success," the executive board said in an email to staff on Wednesday evening that Bloomberg reviewed.

Internal travel unrelated to AI development will be paused, and the company will look for ways to cut spending with suppliers.

"As Al reshapes the future of our industry, we are making significant investments in the products and Al capabilities we build, complemented by strategic acquisitions in data and Al where we need additional expertise and technology," the managers said in the memo.

"By balancing where we invest and where we save, we ensure that SAP remains strong, competitive, and well- positioned for the long term."

SAP has also been pursuing acquisitions to bolster its AI offerings and reportedly lost out on a deal to purchase industrial AI and data firm Cognite, which instead agreed to a $3.1 billion deal with Schneider Electric.

The move comes as CEO Christian Klein reorganizes SAP around AI innovation, taking on a larger role in overseeing product development. It also comes as legacy software names have been battered this year on fears that AI rivals such as Anthropic and OpenAI could disrupt their core businesses.

According to Bloomberg data, SAP had around 110,000 employees as of the first quarter of this year. While the report made no mention of future layoffs, the company's workforce appears to have already peaked in the third quarter of 2022, suggesting the latest "efficiency" push could further unwind years of overhiring.

New report: 

• AI Adoption Rate Across Corporate America Accelerates

SAP shares in Frankfurt were down around 2% on Thursday and about 33% on the year.

The selloff mirrors declines of Salesforce, Workday, and Microsoft, which have cut thousands of jobs while investing heavily in AI. The latest from The Market Ear suggests that, after months of declines, software could be set for a squeeze (read report). 

Tyler Durden Thu, 07/02/2026 - 15:00

FDA Allows Label Saying Zyn Nicotine Pouches Less Harmful Than Cigarettes

Authored by Zachary Stieber via The Epoch Times,

The Food and Drug Administration is letting Philip Morris International market its Zyn nicotine pouches as being safer than cigarettes.

Zyn nicotine cases and pouches on a table in New York City on Jan. 29, 2024. Michael M. Santiago/Getty Images

The FDA said on June 30 that the pouches can now feature the statement, "Using Zyn instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis."

The authorization of the modified risk statement followed an extensive scientific review, regulators said.

That process concluded that Philip Morris subsidiary Swedish Match demonstrated the claim was scientifically accurate, that consumers understand the claim, and that marketing the products with the claim would benefit the population.

"FDA's review of modified risk products is intended to ensure that adult users have clear, science-based information about the relative harms of tobacco products, so they can make informed choices," Bret Koplow, acting director of the FDA's Center for Tobacco Products, said in a statement.

"Today's decision allows these products to be marketed with a modified risk claim that informs adults who smoke about the lower risks associated with these products."

The FDA initially cleared Zyn pouches in 2025. Officials at the time said that the benefits to adult cigarette smokers outweighed the risks to adults and youth, based in part on the finding that the pouches contain fewer harmful chemicals than cigarettes.

An FDA advisory panel in January said the proposed statement was likely accurate.

The Campaign for Tobacco Free Kids opposed the proposal at the time. The nonprofit said that Swedish Match did not meet the standard for authorization, in part because there was no demonstrated benefit.

The authorization of the new claim includes the requirement that the pouch manufacturer carry out studies and surveillance, including assessing how people interact with the updated products and understand the updated risk-related information.

The authorization lasts for five years and can be extended.

If the FDA determines that the marketing under the adjusted statement no longer benefits the population, such as a scenario that involved a spike in uptake among young people, the agency may withdraw the authorization, officials said.

Philip Morris CEO Stacey Kennedy hailed the development. Kennedy said in a statement it "ensures these adults have access to accurate, science-based information, including FDA-authorized evidence that switching from cigarettes to Zyn reduces the risk of smoking-related diseases like heart disease and lung cancer."

"More broadly, it reinforces the agency's science-based approach to evaluating products across the continuum of risk and communicating those findings transparently," she said.

Tyler Durden Thu, 07/02/2026 - 14:40

Blue Owl Gates Investors Again After Top BDCs Hit With Massive 38%, 19% Redemption Requests

After a catastrophic Q1 for private credit BDCs, Q2 is proceeding just as many had expected: just as bad.

After alternative asset manager titans such as Apollo, Blackrock, Blackstone and Cliffwater all gated their investors for a second straight quarter following a surge in redemption requests that easily surpassed what took place in Q1, earlier today we learned that the ground zero of the private credit implosion - Blue Owl Capital - was also slammed with redemption requests in the second quarter. Sure enough, it also gated its investors.

As Bloomberg reports, for the second straight quarter, two Blue Owl Capital private credit funds were hit with the industry’s largest redemption requests, forcing the manager to again cap withdrawals.

Investors in the roughly $34 billion Blue Owl Credit Income Corp., one of the largest in the industry, asked to pull 18.8% of shares, or $3.6 billion in the second quarter, according to an investor letter Thursday. That’s down fractionally less than the $4.2 billion requested in the prior period from the fund known as OCIC. 

The smaller Blue Owl Technology Income Corp. saw shareholders request 38.1%, or $1.1 billion, compared with $1.2 billion in the first quarter. 

The good news: the total redemptions were modestly below last quarter's record; the bad news: the redemptions persisted almost entirely despite the market staging a historic, remarkable rebound and as fears about software disruption supposedly eased. Turns out they did not.

Blue Owl, which as we have thoroughly documents, has been at the heart of the storm roiling the $1.8 trillion private credit market due to its massive exposure to software-linked loans, joins industry peers including Apollo, Ares, BlackRock and Blackstone in imposing a 5% redemption limit as investors accelerate out of the funds.

Blue Owl told investors it was “encouraged to see OCIC’s modestly lower quarter-over-quarter tender requests broadly across channels and geographies.” Let's see what the company will tell investors next quarter if we see a powerful drawdown in stocks which sparks a new selling panic across the private credit space. 

According to Bloomberg, the firm said it has satisfied more than 43% of the original demand from shareholders with repeat withdrawal requests. It said second quarter requests were largely from those investors, and included “limited new participation.”

Realizing the existential threat they were in, Blue Owl executives - who in a bizarre act of "diversification" decided to buy a stake in the Cleveland Cavaliers - stepped up efforts to engage with clients over the past three months, flying around the world on a roadshow trying to educate investors, according to a person with knowledge of the matter. They emphasized the message that private credit is a performing asset and that their funds had delivered positive returns, the person said, requesting anonymity to discuss private meetings.

In the shareholder letter Thursday, the firm highlighted that about 90% of investors remain in the larger fund, which has posted approximately $1.2 billion of inflows this year.

“OCIC does not need to sell a single private loan to satisfy the tender offer,” Craig Packer, Blue Owl’s co-president, and Logan Nicholson, OCIC president, said in the letter to shareholders.

And in case that investors decided they don't want to be in the fund much longer, the firm said that both Blue Owl funds have “ample dry powder” to capitalize on better lending conditions in the market, with wider spreads and improved protections.

OCIC and OTIC had $11.6 billion and $1.3 billion in liquidity respectively, including cash and available borrowings assets as of May 31, according to the letters. OTIC oversees about $5 billion in assets.

Tyler Durden Thu, 07/02/2026 - 14:20

Judge Blocks USPS Ballot Rule Tied To Trump's Election Integrity Order

Authored by Tom Ozimek via The Epoch Times,

A federal judge on Wednesday blocked the U.S. Postal Service from implementing a Trump administration proposal to boost election integrity by enhancing ballot tracking and verification, finding it conflicted with a 2021 settlement requiring the agency to prioritize the timely delivery of election mail.

U.S. District Judge Emmet Sullivan ruled on July 1 that USPS could not move forward with the proposed rule, which would have required states using the mail for federal absentee and mail-in voting to adopt standardized ballot envelopes with trackable barcodes and provide USPS with voter participation lists to make ballot verification easier. Ballot mailings that failed to comply would have been rejected.

One day after the proposed rule was published in early June, the National Association for the Advancement of Colored People (NAACP) returned to court in a long-running lawsuit originally filed during the 2020 election, asking Sullivan to enforce a 2021 settlement that requires USPS to prioritize the monitoring and timely delivery of election mail through the 2028 election cycle.

The proposed rule stems from President Donald Trump’s March executive order directing USPS to develop new standards for handling federal ballot mail as part of a broader thrust to bolster election integrity.

The Justice Department, which represented USPS in the case, did not respond to a request for comment before publication.

Rule Boosts Election Integrity, DOJ Says

In opposing the NAACP’s motion, the Department of Justice (DOJ) argued in a court brief that the proposed rule was designed to improve—not hinder—the handling of election mail.

Attorneys representing the Trump administration wrote that requiring standardized Election Mail logos and Intelligent Mail barcodes would make ballots easier to identify throughout the postal network. They argued this would allow USPS to better monitor the movement of mail-in ballots and help implement the “extraordinary measures” USPS has traditionally used to expedite election mail before federal elections.

“Such requirements promote the ’monitoring and timely delivery of Election Mail'; they do not frustrate it,” they wrote in the brief. “And while the Postal Service has proposed requiring state and local election officials to identify the names and addresses of the persons to whom they send ballots and to provide the barcodes for the ballot envelopes, requiring this information—which officials already, by definition, have—would not compromise the lawful delivery of any mail.”

The administration stated in the proposal that the new rule would strengthen election integrity by creating a uniform ballot-tracking system while leaving decisions about voter eligibility entirely to the states.

Election officials—not USPS—would determine who is eligible to vote by mail and would submit lists of voters receiving mail ballots, together with unique barcode information, through a federal portal. The Postal Service would use that information only to verify ballot mailings and improve tracking, not to decide who could vote.

“State and local election officials would maintain full control over who they send ballots to,” government attorneys said in the brief.

“There are no plausible concerns, certainly at this stage, that the Proposed Rule would negatively impact USPS’s ability to timely and reliably deliver Election Mail. Rather, this provision would, again, assist USPS in better being able to track (and thus deliver) such important mail.”

Plaintiffs Claim ‘Confusion and Uncertainty’

The NAACP argued in its motion that the new requirements would violate the 2021 settlement and could prevent eligible voters from receiving mail ballots.

“Implementation of the Proposed Rule would threaten to prevent millions of eligible voters from receiving mail-in ballots to which they are entitled,” attorneys representing the plaintiffs wrote.

They also argued that, even while the rule remains in proposed form, it already caused confusion within USPS, and among election officials and voters, about what procedures will be in place for mail-in ballots in the November 2026 election cycle.

“The pendency of the Proposed Rule ... creates confusion and uncertainty,” they wrote. “USPS, for example, cannot conduct internal or external trainings to plan for a rule that is not yet finalized. Nor can it provide answers or guidance to election officials and voters to mitigate confusion or uncertainty.”

The case traces back to August 2020, when the NAACP sued USPS over operational changes introduced around that time that plaintiffs said caused widespread mail delays during the COVID-19 pandemic and threatened the timely delivery of absentee ballots.

The parties settled the case in December 2021. Under the agreement, USPS committed through 2028 to issue nationwide election-mail guidance, organize regular “outreach meetings” with the NAACP before federal elections, provide performance reports, and make good-faith efforts to prioritize the monitoring and timely delivery of election mail.

Trump’s March executive order directed USPS to develop new standards to strengthen election security, prompting USPS to publish the proposed rule, which the NAACP challenged.

The judge sided with the plaintiffs, concluding that the proposed procedures conflicted with USPS’s commitment to prioritize the timely delivery of election mail.

Allison Zieve, director of Public Citizen Litigation Group, which represented the NAACP in the case, praised the ruling.

“The court today correctly recognized that USPS’s plan to create roadblocks to mail-in voting was inconsistent with its commitment to timely deliver election mail,” she said in a statement. “USPS’s plan was unwise, unlawful, and a threat to the millions of voters who rely on mailed ballots to participate in our democracy.”

Tyler Durden Thu, 07/02/2026 - 14:00

Sin(a)tra

By Michael Every of Rabobank

Sin(a)tra

Let’s be Frank: the central banker pow-wow at Sintra had a touch of Sinatra. Fed Chair Warsh belted out “I’ll do it MYYYYYY way,” and everyone else chimed in that they’d had a few regrets about how they’ve run monetary policy and were coincidentally now mentioning them.

Markets swooned when Warsh stated the case for Fed independence and that anyone expecting tolerance for inflation above 2% “would be disappointed.”

Yet he also sang with an AI autotune. While the current “AI shock” is driving a boom in capex, i.e., the inflation he said he will fight, this will eventually expand the supply side through higher productivity, a shift with “huge implications for monetary policy.” In other words, “we’ve all looked around, and we’ve seen that prices are too high,” but he can fight it by saying it will eventually become deflation. (That would logically hold true for tariffs; and wars in the Middle East – if you win them.)

Warsh really will do things his way. He said central banking needs structural adaptation and must move away from forward guidance towards “framework guidance,” with “contemporaneous real-time” big data/AI monitoring to capture what’s going on --not backwards-looking, inaccurate analogue surveys the equivalent of vinyl-- within 9–12 months. This will also include new measures of inflation: are they going to be lower or higher than the current ones based on the heuristic in how they have always been changed so far?

He also wants central bankers to go on tour less. He rejected heavy reliance on “conventional wisdom” or detailed predictive guidance, i.e., a data calendar filled with central bankers talking.

This implies the Wall Street-analyst Brat Pack may soon be out of the picture. What’s a generation of macro-commentary scribblers pushing “X said Y”, or “Survey X was up Z vs consensus of Y, and we guess next month will be A” going to do with nothing to report on? Indeed, if we have omerta and a (transparent?) set of accurate real-time economic indicators, what role is there for macrostrategy? More chatter to fill the space? A meta-approach, i.e., seeing differences between a Kalecki or Minsky view of political economy vs. the neoclassical, as such fundamental questions re-emerge; or, given other economies won’t have the same data quality or timeliness, linking up with what’s going on abroad?

It may also imply that Wall Street itself will not be a Warsh fan. He is no fan of QE and the Fed’s large balance sheet: what if we see deregulation aimed at incentivizing banks to lend into productive capital like factories or infrastructure rather than holding financial assets?

Warsh is perhaps already getting others to do it his way. The ECB’s Lagarde spoke of going “back to basics,” abandoning heavy reliance on unconventional tools and complex forward guidance in favour of simpler frameworks. The BoE’s Bailey voiced regret over past forward guidance practices and aligned with the broader retreat from detailed predictive signalling. The BoC’s Macklem didn’t push back either, and multiple reports note a widespread “open-mindedness” among Sintra attendees on AI and productivity too.

Let me say this not in a shy way, things are changing far more than a “Warsh wants inflation back below 2%” headline captures.

Meanwhile, the brief US Operation Freedom to get Hormuz oil flowing before the US-Iran MoU was reportedly shot down by Saudi Arabia: Riyadh refused to allow the US to use its bases or airspace, to which the US threatened to not shoot down incoming drones or missiles – and is reportedly considering moving bases elsewhere in the region – like Israel(?) Which Iran is again threatening today in tit-for-tat rhetoric.

We had more ‘positive’ talks in Qatar. Both sides reportedly still want the ‘peacefire’ to hold for now, as we expected, as the US tries to convince Iran to look at the ‘bigger picture’ and not insist on control of Hormuz or tolls. However, the US also said Iran will not get any frozen assets until it fulfils the MoU, which Iran puts the other way round, as Tehran claims it will use that cash in Qatar to buy “required goods” while the US says it will be held in escrow and used to buy US products. Meanwhile, VP Vance made clear the MoU is an opportunity to refuel, then see if more war is required (our base case), as Lebanon and Syria, a former Iranian proxy now flipped, joined a CENTCOM-led Middle East security dialogue for first time, and Iraq’s PM gave pro-Iranian militias a 30 September deadline to disarm.

Ukraine will allow weapons exports for first time since start of the war; Germany charged a Ukrainian suspect in the Nord Stream sabotage case; Russia and Crimea are grappling with fuel shortages and blackouts as Zelenskyy warned of further massive Russian strikes planned for Ukraine; the US NATO envoy has warned some allies are ‘lagging’ on their spending; the UK’s defence black hole just tripled to £15bn; Germany is proposing to make US weapons; and US defence startups are raiding the auto and fracking sectors for parts to speed weapons output.

In frenetic geoeconomics, the US opted not to renew the USMCA, so it rolls annually towards a 10-year death unless reworked into Fortress Americas; Canada joined Europe – its song contest that is, alongside Australia; Politico says ‘Europe wants to save its industry. It still can’t agree how’, as the EU imposed a €3 fee on small packages from abroad and reduced steel quotas while raising tariffs; the Supreme Court ruling on independent agencies and regulators is reportedly seeing Europe think again about the €1.7 trillion data deal it signed with the US; the White House is accelerating its plans for AI model standards; the US nuclear power regulator is proposing changing rules that protect people from radiation, as Brussels will bend its budget rules to allow countries to borrow more for EVs, bike lanes, and train stations; and the EU-Mercosur trade deal is sparking a quota tug-of-war as LatAm countries can't agree on how to divide it up.

In equally frenetic politics, democratic socialists continue to win US electoral primaries, seeing Trump warn about the return of communism: while hyperbole to European ears, that’s easily matched by many statements made by new figures on the US far left (and right). It also underlines that there’s no longer a US Overton Window - indeed, following the Supreme Court ruling on birthright citizenship, the Trump plan B is reportedly ‘No expectant moms at the border’; November’s midterms could be wild, and November 2028’s election’s far more so - and Europe and Australia are far from immune.

As such, central banks need to get things right – or talk about ‘revolution’ may not be hyperbole. As the tears subside, there isn’t a lot to find amusing in all this; or bemusing - we are being told by the Establishment that things need to, and will be, done differently ahead, like it or not. And that includes central banking and how one analyses what they are doing and why.

Let the record show I took the blows in trying to flag this well in advance, and I did it my way.

Tyler Durden Thu, 07/02/2026 - 13:20



 

 

At The Money: Building a Bond Ladder with ETFs (July 2, 2026)

How can fixed-income investors create diversified, inexpensive bond ladders using Exchange Traded Funds?

Full transcript below.

~~~

About this week’s guest:

Steve Laipply is Global Co-Head of iShares Fixed Income ETFs. Previously, he was Head of U.S. iShares Fixed Income Strategy. He helps to oversee more than a trillion dollars in bond ETFs. Each week,

For more info, see:

Masters in Business

LinkedIn

~~~

 

Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

 

 

 

TRANSCRIPT:

At the Money: Building a Bond Ladder with ETFs
Steve Laipply, Managing Director, BlackRock; Global Co-Head of iShares Fixed Income ETFs 

BARRY RITHOLTZ: Investors who are looking for yield, especially in an uncertain rate environment, used to need millions of dollars to build out a bond ladder in a separately managed account. It wasn’t easy. There were issues of credit quality, duration, and risk. It made it kind of complex to do. But today, you can create a simple ladder using inexpensive ETFs.

I’m Barry Ritholtz, and on today’s edition of At the Money, we are going to explain how and when to build your own bond ladder.

To help us unpack all of this and what it means for your portfolio, let’s bring in Steve Laipply. He’s Managing Director at BlackRock and Global Co-Head of iShares Fixed Income ETFs. Previously, he was Head of U.S. iShares Fixed Income Strategy. He helps to oversee more than a trillion dollars in bond ETFs.

Let’s start with the basics: What’s the problem that a bond ladder is supposed to solve for investors?

Steve Laipply: This gets to a very popular, longstanding practice that advisors and investors have used for years, which is this idea of: I’m not going to be able to really predict the evolution in interest rates, and so what I’m really interested in is cash flows. I’m interested in trying to line up some certainty with income, and I don’t really want to take a lot of interest rate risk.

A comfortable thing is to create a ladder, which means you buy some amount of bond exposure in every year going out to, say, five years. And if you’re worried that interest rates are rising, you could always just not reinvest and let that ladder roll down, get your par value back at maturity, and then you could take that cash and go elsewhere.

And so that’s always been a comfortable thing — this idea that I’m in control; if rates rise, I don’t have to worry about a perpetual loss from having an open-ended exposure. I can just let the bonds roll down to maturity and I’m done. That’s sort of the idea.

Now, in practice, many, many advisors and investors simply roll over and over again and just keep putting bonds into that last rung. However, it’s this idea that they have control, and I think that is a very attractive thing.

If you contrast that, for example, with a mutual fund or an SMA or an ETF, that may be more of a perpetual, open-ended exposure, and then there’s a sense that, well, maybe I’m less in control of managing that. So the attractiveness of ladders: cash flow, and you have some certainty and control over how it evolves and plays out. And that’s why they’re so popular.

BARRY RITHOLTZ: So let’s delve into that a little bit for people who are not familiar with the ladder. Let’s say we’re building a seven-year ladder: We’re going to have different duration holdings for each of those seven years, because we have no idea what rates will be in year three, in year six, and however far out you want to go. And so if you’re doing a 10-year bond ladder, well, you’re only taking a risk with one-tenth of that portfolio each year. And when it comes up, you get to decide: Do you want to just roll it over to more of the same? Do you want to adjust your credit risk, your duration, even where you’re investing? So you’re always locking something in. If rates go up, you get to reinvest higher. If rates go down, well, the rest of your portfolio is now worth a little more, but you’re going to get a lower yield.

Tell us about the products that exist so that you could either do this in, let’s call it, seven separate holdings, or just one holding with the ladder built in.

Steve Laipply: Yeah, and this is what’s fascinating. There are a couple of things to unpack here. So investors can ladder by going out and buying individual bonds, and that’s what they’ve done for many, many years. The downside of that is that depending on the amount you have to work with, you might end up being fairly concentrated if you start out with a smaller amount of proceeds, because, as you know, bond face value is a thousand dollars, and so you may not be able to build out as many holdings per year as you’d like to be diversified. But the advantage of that is: Okay, I know each individual bond and I can watch it mature, et cetera.

Another approach would be something that we pioneered back in 2010, which is what we call an iBond, which is meant to be sort of like an individual bond exposure that matures in a given year, but it can hold hundreds of bonds within that year.

BARRY RITHOLTZ: So fully diversified, in other words.

Steve Laipply: So you’re diversified tremendously relative to just trying to pick individual bonds for a certain year.

Let’s say you buy a five-year corporate iBond: All those bonds will mature in year five, but you may have upwards of 300 bonds, and so that gives you comfort in terms of the credit risk.

Now, the trade-off with that is that it doesn’t quite look like an individual bond, because you have many bonds, and so your cash flows won’t quite be as fixed or certain as they would be by holding an individual bond. But it’s roughly the same idea. It’s more akin to holding a portfolio of bonds maturing the same year.

BARRY RITHOLTZ: What are some of the other advantages of building a ladder with ETFs? Clearly, diversification is one. What about pricing, execution, and complexity? What are the other advantages?

Steve Laipply: And these are the trade-offs.

 

You have sort of the standard ETF features and benefits: You have exchange transparency, you know the price, you can sell out of it at any time.

Just to put this into context, imagine if you were holding a five-year ladder of individual bonds, and let’s just say you had the proceeds to build a pretty diversified portfolio for each year. Imagine trying to sell all those bonds if you decided you needed to raise cash. That would be a non-trivial exercise, and it might be quite costly.

With something like an iBond — let’s just say you decided to liquidate the entire ladder — you get the benefit of the ETF liquidity, just as you would in a traditional investment-grade ETF like LQD or what have you. There are varying degrees of liquidity, of course; some things may not trade as liquid as others. But the point is that that’s an ETF feature.

The other part of it is just really understanding what you own, and the ability to trade cheaply relative to individual bonds. ETFs trade for bid-ask spreads of pennies on exchange; individual bonds can be multiples of that. So that’s sort of the final thing — it’s about cost. Of course, ETFs have expense ratios, so you have to do that trade-off, but generally, the math is going to work out in your favor.

BARRY RITHOLTZ: The expense ratio, especially for iShares, is really quite reasonable. But let’s talk about maturity selection. You could build out a ladder almost as far as you want. How should people be thinking about why five years or seven years or 10 years? What goes into that selection process?

Steve Laipply: A couple of things. If you look at the tools — for example, we have tools on iShares.com that allow you to build a ladder — it shows you how to build out to get a certain yield, or if you want a certain duration profile, et cetera. So it really gets down to a couple of things: What sort of overall yield and income profile are you looking for? The other part is, what kind of cash flow profile are you looking for? Is there a particular reason that you want to go out to five years or greater? Do you want to be inside of three years because you may want that cash sooner?

Let’s take a simple example. Let’s just say you have a life event coming up in three years. You want the last cash flows to be coming due in those three years for sure. You can have cash flows coming due past that, but it’s far more comfortable to know that you’re getting that cash back in year three, because at that point you’re going to take a big trip, you may have college tuition due, etc. And so it makes it really easy to think of it in that way: When do I need that cash? Let’s just work backwards from there and build it from there.

BARRY RITHOLTZ: Let’s talk a little bit about the tool you have on your website, the iShares ladder builder with iBonds ETFs. It’s really kind of fascinating. You put in a dollar amount, what type of bonds you want — corporates, Treasuries, TIPS, munis, high yield — and you could go out as far as 2056. That’s amazing — that’s a 30-year bond ladder — and it gives you a whole bunch of different data on this. Are people using this sort of tool to construct their own ETF bond ladders?

Steve Laipply: They are. It’s proven to be a very popular tool. And that’s one of the, I think, interesting and neat things about having these products at your disposal. Again, when you’re building these ladders — let’s just say you build a pretty robust multi-year ladder — you’re effectively buying thousands of bonds, depending on the sector, let’s say corporates. And so that would be very, very hard to do just doing it in individual bond space, and it would be more expensive. And so the tool is something that allows you to visualize that and play with it. You can mix different exposures, et cetera. And so I think that’s something that investors have found to be really, really interesting.

BARRY RITHOLTZ: Let’s talk a little bit about credit quality. I’m old enough to remember when we used to refer to high-yield bonds as junk bonds. If you’re putting together a bond ladder, how do you think about juicing the returns a little bit with some high-yield paper?

Steve Laipply: This gets to, investor preference?

High yield by definition is what it sounds like. However, it comes at a cost, which is you may not get all of that money back, because some of it may default. And so that’s the rub, right?

I think investors are going to do sort of a calculated risk assessment on what they’re willing to tolerate risk-wise. If you put all of your money into a high-yield ladder, the yield will most certainly be higher than investment grade. However, the overall performance may not match that initial yield, because over time, some of those companies may default, and you may not realize exactly the initial yield you did — it’ll be something less. And so that’s just with any high-yield bond, right? I think what makes it attractive in the ETF space is that at least you’re diversified. And so that’s an important point, because if you’re trying to do this in individual bond space, you have a lot more risk to those individual companies than if you did it in ETF space.

BARRY RITHOLTZ: Right. You get to hold so many more individual bonds within the ETF than even a million-dollar portfolio is going to be able to do. One of the things that’s always interesting is when bonds begin to approach maturity, sometimes the trading is a little counterintuitive. What should investors expect in the final year of any particular bond ETF in their ladder? How should they expect this to trade? What happens on maturity?

Steve Laipply: Yeah, and this is, I think, something that investors are very, very interested in, because with an individual bond, it’s pretty easy just to watch, right? You know, okay, it’s one year left, it’s three months left, and then on the final day I’m going to see the thousand dollars hit my account. With a bond ETF, what’s going to happen is not all those bonds mature on the same day or in the same month. So let’s take a full calendar year. You may have some of those bonds start maturing in January. What happens to those? Well, they eventually get reinvested into cash accounts. In some cases they may get reinvested in very, very short corporate paper, as an example. But ultimately, as bonds keep maturing throughout that year, they’re all going to be reinvested in cash. And so by the end, you have cash in the bond ETF portfolio. What’ll then happen is the bond ETF delists, it gets liquidated, and that cash then hits your brokerage account. And that’s basically it.

BARRY RITHOLTZ: So, final bond ladder question: What do you think are the biggest mistakes investors tend to make when they build bond ladders? I see all the time people chase yields, they take a little too much credit risk, they don’t really think about duration — although I guess you don’t have to if it’s a fixed-year ETF — and then the other risk is the money hits as cash and then it just sits in the account too long. What do you see as the biggest problems?

Steve Laipply: I think some of it might be the reaching for yield. Because, again, why are you laddering? What are you trying to accomplish? And so I think the best thing to do is always really sit down, figure out what your goals are, and then work backwards. So as an example, that life event that we were using as an example earlier: Let’s just say you have to have that cash — you’re probably not going to want to do a high-yield ladder, right? You may want to do a Treasury ladder or a TIPS ladder, an inflation-protected ladder. You’re probably not going to want to swing for the fences on that one. The other one would be really just trying to understand the reinvestment part of that. What do you do when you get one of the rungs maturing? Do you go out and put it into a longer rung? Are you going to take that cash and reinvest it in a money market account? That’s investor preference, but it matters for your total return. So that’s going to be up to you. But I really do think working backwards from your financial goals is the best way to build a ladder. And then you can do that across the different asset classes. If you can earn more income, by all means, you might want to tilt more towards more credit-intensive assets. Safety is Treasuries and TIPS. And so I think that’s kind of it.

BARRY RITHOLTZ: So Steve, some people just like to go out and buy the entire Agg, the entire index. What are the differences you see between buying the whole index versus doing a ladder?

Steve Laipply: Well, you know, Barry, this is really interesting, actually, and it’s kind of a math question. But if you look at the behavior of index funds compared to just, say, a very simple ladder — where the investor takes the maturing proceeds and goes back out to the longest rung and reinvests, and they just do that over time, over and over and over again — that does not actually look too different than an index fund. It really doesn’t. And there has been academic research on this, and we can make it complicated, but the bottom line is perpetual laddering is kind of like indexing. And I think that’s sort of fascinating. And so if somebody knows they want to do that, they could also look at an index fund as well. But I always thought that was a really interesting thing if you line them up side by side.

BARRY RITHOLTZ: Huh, that’s really kind of surprising. I would imagine the ladder gives you a little more certainty into what your yield is going to be, whereas with the index, you’re just taking a wild guess.

Steve Laipply: I think both give you some level of certainty. The ladder is about control, right? Because you can decide at any time whether to stop reinvesting, and I think that’s why they’re really popular.

BARRY RITHOLTZ: Hmm, really interesting stuff. So to wrap up: In an uncertain rate environment, investors who have either future financial needs or liabilities that they know can manage around that by using a bond ETF ladder and reinvesting continuously over the cycle of that ladder. I’m Barry Ritholtz. You are listening to Bloomberg’s At the Money.

~~~

~~~

Find our entire music playlist for At the Money on Spotify.

 

The post At The Money: Building a Bond Ladder with ETFs appeared first on The Big Picture.

FDA Staffers Oppose Proposed Clearance Of Peptides

Authored by Zachary Stieber via The Epoch Times,

Food and Drug Administration staffers said in newly released documents that they do not support letting compound pharmacies manufacture seven popular peptides.

The Food and Drug Administration in White Oak, Md., on June 5, 2023. Madalina Vasiliu/The Epoch Times

FDA personnel said in documents posted online on June 29 that there are safety concerns with the peptides, including the possibility of triggering immune responses that could lead to "life-threatening and catastrophic reactions."

They do not favor classifying BPC-157, KPV, TB-500, MOTS-c, Emideltide, Epitalon, or Semax in a way that would let pharmacies use them in compounded medicines.

Peptides are short chains of amino acids that act as building blocks of proteins and perform essential biological functions in the body. If permitted, compounding pharmacies can manufacture them for personalized medications tailored to patients' unique needs.

They have become popular among some fitness influencers and have received endorsement from Health Secretary Robert F. Kennedy Jr.

Compounding refers to doctors and pharmacists creating customized medicine by combining, mixing, or altering ingredients.

The documents were posed ahead of a scheduled meeting of the FDA's Pharmacy Compounding Advisory Committee, which will consider whether to support or oppose loosening restrictions on the peptides.

The FDA in April said it would not take action against compounding pharmacies that use some of the peptides, and is now considering whether to add them to a list of approved substances.

The FDA could create some guard rails within which peptides could be prepared by legitimate pharmacies, according to Scott Brunner, CEO of Alliance for Pharmacy Compounding, a trade association for pharmacies.

"We would urge the agency to look at this not as an up or down vote, but to consider a middle path that does address a very real public health concern," Brunner said.

Ban

The FDA in 2023 labeled more than a dozen peptides, including BPC-157 and KPC, as substances banned for compounding.

Officials at the time said there was a lack of information on the peptides. The available data indicated "significant safety risks," they said.

Kennedy has said the ban was illegal. Such bans should only happen if there is a safety signal, he has said.

No such safety signal was identified.

Rep. Diana Harshbarger (R-Tenn.), a pharmacist, wrote to officials in 2025 in support of allowing the compounding of six peptides, including BPC-157.

New Members

The FDA appointed multiple new members to the compounding panel, including seven who have links to businesses or clinics involved in peptide therapies.

That includes Robert Harshbarger, a Tennessee senator, pharmacist, and son of Rep. Harshbarger.

"All committee members underwent the same ethics review and vetting process required of all FDA advisory committee members," a Department of Health and Human Services spokesperson said.

"Candidates that could not meet existing ethics requirements were removed from consideration."

Reuters contributed to this report.

Tyler Durden Thu, 07/02/2026 - 12:40

Minnesota Gov Walz Pardons Convicted Child-Molester, Blocking Deportation

A Minnesota pardon board that includes Gov Tim Walz among its three members has issued a full pardon to a convicted Laotian child-molester, torpedoing Homeland Security's effort to deport him. The 42-year-old convict, Tou Lue Vang, submitted a letter to the board saying he regretted what he did -- and just like that, his criminal record is now clean as a whistle via unanimous decision. 

“Governor Tim Walz's decision to pardon an illegal alien convicted child rapist so he can remain in our country is disgusting,” said DHS spokeswoman Lauren Bis. “These are the criminal illegal aliens he and his Minnesota sanctuary politicians are protecting. Tou Lue Vang lost his legal status following his conviction for repeatedly sexually assaulting a 10-year-old girl." 

Tou Lue Vang told the pardons board that he had regrets about abusing a 10-year-old girl multiple times (DHS photo)

In a storyline that has Democrats co-conspiring to infuse precious "diversity" into the American bloodstream over more than three decades, the Clinton administration granted Vang legal status after he entered the United States as a child in 1994. Now, 2024 Democratic vice presidential nominee Tim Walz has  helped guarantee that the convicted sex fiend will be safe from deportation. The two other members of the pardon board are Minnesota Attorney General Keith Ellison and chief Supreme Court justice, Natalie Hudson. 

Vang was convicted of sexually assaulting a girl who was just 10 years old when his perverted acts began. He repeated the offense with the same girl between 2002 and 2004, and pathetically tried to buy her silence with an offer of just $10 in hush money.  After his conviction, an immigration judge ordered his removal way back in 2006.  

When he was first interrogated by police, Vang tried to sweep away the gravity of his actions, telling them, "it is a cultural thing...to marry and have sex with girls as young as 12.” Apparently, Walz -- who's heralded as a reliable "ally" for the LGBTQ crowd and famously put tampons in school-kids' boys rooms -- thinks diversity in sexual morality is our strength too. Vang's pardon quest was bolstered by a supportive letter to the board from his victim, along with many letters of support from the "community."  

Minnesota Gov Tim Walz was part of a unanimous decision that will prevent a child-molester's deportation

Minnesota is on a roll when it comes to helping Laotian criminals stay in America. "In May, the state pardoned Jai Vang, a criminal illegal alien from Laos, whose criminal record includes convictions for robbery, robbery of a business with a gun, and driving under the influence of liquor," noted DHS in a statement. He was ordered to be removed from the United States -- you better sit down for this --  in May 1996. The Clinton administration sprung him loose. Between March 2025 and June 2026, Minnesota has received 67 pardon requests that cite immigration woes as a reason for seeking forgiveness. Across all decisions made this year, the Minnesota board has approved an overwhelming 94% of pardons requested. 

Of course, the Trump administration is in a glass house when it comes to throwing rocks about pardons. Among too many other examples, Trump has stirred the disgust of victims and law-and-order Republicans alike with pardons or commutations of: 

• Joseph Schwartz, a nursing home operator in New York convicted of a $39 million tax fraud scheme
• Eliyahu Weinstein, a real estate developer who'd been convicted of a real estate Ponzi scheme; after his 24-year sentence was commuted after only a few months, he immediately started orchestrating a scheme in which he defrauded people who thought they were investing in deals to get scarce medical supplies to war-torn Ukraine
• Sholam Weiss, who was staring down an 845-year sentence for racketeering, wire fraud, money laundering, and transporting stolen goods, after defrauding an insurer and its elderly policyholders out of £91 million; he fled the US before he could be prosecuted and was convicted in absentia

Its unbelievable Tim Walz pardon a child rapist so he cant be deported pic.twitter.com/flxoIndZhP

— The Highland Knight (@KnightHighland) July 2, 2026

Tyler Durden Thu, 07/02/2026 - 12:20

What Did He Just Say?

Authored by Steve Watson via Modernity News,

In a parliamentary clash exposing deep failures in the justice system, Conservative MP Katie Lam confronted the Government over whether grooming gang perpetrators would serve their already lenient prison terms in full.

The minister's reply has sparked widespread fury, highlighting a complacency that victims and the public find utterly unacceptable.

When Lam asked for assurances on full sentences, Justice Minister Jake Richards pointed to prison capacity, stressing the need to ensure serious offenders "serve time at all" amid prison shortages and building programs.

Yesterday, I asked the Government whether grooming gang perpetrators would serve their full sentences.

The minister seemed to say that we should be grateful that these people are serving prison sentences *at all*.

What on earth?! pic.twitter.com/saNOaE5oGJ

— Katie Lam (@Katie_Lam_MP) June 30, 2026

Lam slammed the reaction: "He wouldn't even commit to that. In fact, he seemed to suggest that we should be grateful that these men are serving time in prison at all because of a lack of prison places. What planet are these people living on?"

She continued, "Even if we're facing a shortage of prison places, how can it possibly be the case that grooming gang perpetrators aren't amongst the highest priority offenders...?"

"Ensuring that these vile men serve out their sentences isn't a nice-to-have. It's the bare minimum," Lam stressed.

In a piece for GB News, Lam further outlined "This week, Parliament debated the early release of rapists and child groomers from prison. It's appalling that this subject was even up for discussion."

She continued: "It's clearly true that those who've committed such heinous crimes should, at the very least, serve out their full prison sentences. But under this Government's prison plans, vile criminals like these are having their sentences cut short. They're being allowed back onto the streets after just a few years behind bars."

I confronted Labour on grooming gang rapists being released from prison. Their answer should terrify you – @Katie_Lam_MP https://t.co/kG2CouYjSg

— GB News (@GBNEWS) July 1, 2026

"Many Labour MPs still don't seem to have grasped just how horrific these crimes were and just how dangerous the men who committed them are. It's terrifying that people like this are in charge of making decisions about who goes to prison, who stays there, and for how long." Lam further urged.

This comes as one grooming gang ringleader - stripped of British citizenship - faces imminent release but cannot be deported back to Pakistan due to legal loopholes.

The inability to remove such individuals underscores deeper systemic issues with immigration enforcement, citizenship revocation, and prioritizing foreign offenders' "rights" over victim safety and public protection.

??"How can SCUM like that walk the streets?"

Jeremy Kyle EXPLODES at the fact Shabir Ahmed cannot be deported after being convicted for 30 child rape offences and leading the Rochdale rape gang.

"That VILE paedophile should be DEPORTED!"@jkyleofficial pic.twitter.com/MA26qq9AzN

— Talk (@TalkTV) July 1, 2026

Referencing a recent West Yorkshire case, Lam detailed: "In June, twenty perpetrators were convicted of the rape and abuse of three girls... One of the girls was just 12 years old when this gang began to prey on her. Abbas Kaji, one of the offenders, was sentenced to just seven years for rape; Mohammed Ishtiaq Hussain was sentenced to just eight. The idea that these men could be out on the streets even sooner is appalling."

The grooming gangs scandal represents one of Britain's gravest institutional betrayals. These groups terrorized communities across the UK, with authorities often ignoring, suppressing or downplaying the ethnic and cultural patterns - predominantly Pakistani Muslim men targeting white girls - out of fear of racism accusations.

When the UK Parliament were asked if they would vote for an inquiry into the mass rape of little girls

They voted against it

That's how evil these people are
pic.twitter.com/kBLF6zT95O

— Basil the Great (@BasilTheGreat) July 1, 2026

Lam has been vocal on the human cost. She referenced survivor Fiona Goddard, who received notice that her abusers - sentenced to 16-20 years in 2019 - could be eligible for early release: "The hard-won justice that she secured in court is being snatched away from her."

Calls for whole-life sentences, proper inquiries without blind spots on race and religion, and accountability for past cover-ups have grown, amplified by independent reports and public pressure.

The priority should be crystal clear: protect British children, enforce real justice, and reject any notion that jailing child rapists is an optional luxury.

Short sentences, early releases, and evasive answers only deepen the sense of betrayal that has defined this scandal for decades.

Britain needs a justice system that puts victims first and deters monsters - not one that debates basic incarceration as if it's a favor.

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

Tyler Durden Thu, 07/02/2026 - 12:00

Yen Surges As Jittery Traders Expect Imminent Intervention After Japan Reveals New Strategy To Wipe Out Shorts

After plunging to a fresh 40 year low overnight, the yen strengthened sharply against the dollar amid rising speculation that the currency’s continued weakness may prompt a fresh round of intervention by Japan. The yen then surged again after the June US jobs report showed a much weaker picture than expected.

But let's focus on the first, more unexplained move, which took place just after 2:30am ET, when the Yen rose as much as 1% against the greenback, the most since Japan intervened on April 30. The currency later trimmed the advance, before surging again after the jobs report. Earlier in the week, the yen touched its weakest versus the dollar since 1986.

Traders were already on edge ahead of both the jobs report and the Friday holiday in the US, which creates thin trading conditions that would likely amplify the impact of any yen intervention.

“Liquidity is expected to decline during the afternoon session in New York on July 3, when US markets will effectively be closed for the Independence Day holiday,” said Masayuki Nakajima, senior currency strategist at Mizuho Bank in London. “If major US economic releases, such as the employment report, were to come in weaker than expected and trigger broad dollar selling, intervention could become tactically more effective.”

Talking to Bloomberg, Neil Jones, a managing director of FX trading at TJM FX in London, recommended buying bearish dollar-yen options. The strategy assumes “a no-warning scenario this time,” he said. While it’s difficult to time any potential intervention, he’s increasingly convinced that it will ultimately happen.

Meanwhile, South Korean Second Vice Finance Minister Huh Chang said Thursday that the government is closely exchanging information with the US and Japan regarding the forex market.

Reuters earlier reported that Japanese officials may abandon telegraphing their intentions to the market, which would be unlike the case with the intervention that happened on April 30 following ample warnings. Such a new tactic could be effective in wiping out ‌speculative bets against the currency, according to the report.

The shift reflects a more aggressive approach by the MOF, which is using silence as a policy tool to keep traders guessing. That raises the risk of a surprise intervention driven by an accumulation of speculative short-yen bets rather than by the currency crossing a publicly understood threshold, the sources said.

The MOF's approach and the Bank of Japan's continued hawkish rhetoric ​signal a coordinated effort to keep yen bears at bay, two other sources said.

Of course, leaking this trial balloon effectively eliminates the surprise aspect, although it does force speculative shorts to cover ahead of what may come next. 

In an interview with Bloomberg on Wednesday, Japan’s top currency official, Atsushi Mimura, refrained from spelling out the finance ministry’s standard currency stance, including its readiness at any time to take “bold action”, meaning intervention.

The challenge for traders is that Mimura’s silence may on the one hand be an attempt to retain a degree of surprise, but it could also suggests that authorities may be willing to let the currency fall further before acting. Many traders had expected that the BOJ would have intervened as soon as the USDJPY hit 161. Instead the pair rose just shy of 163 before there was a notable move lower. 

Intervention “has always carried an element of surprise,” said Rodrigo Catril, a strategist at National Australia Bank. “The MOF is seemingly trying a new tactic of reverse psychology, but in practice there isn’t a great deal of difference between what they have been doing in the past.”

Meanwhile, Bloomberg reports that options traders are ramping up hedges against sharp yen swings, with a gauge of one-month dollar-yen butterfly spreads at an elevated level, suggesting that concerns about possible market intervention are increasing.

Japan spent a record ¥11.73 trillion ($72.2 billion) in the month through May 27 to prop up the yen, according to Finance Ministry figures. The ministry first stepped into the market on April 30, according to people familiar with the matter, when Japan’s currency was approaching the 161 threshold. The yen initially strengthened, moving to around 155 per dollar, but then steadily and fully retraced those gains even after the Bank of Japan raised its benchmark interest rate to the highest in 31 years on June 16.

In a note from Goldman FX traders this morning, the bank mused whether the sharp move lower was a "rate check/intervention." It laid out four points from the GS FICC & Equities desk:

• Volume was small. The spike in EBS volumes was "only" ~$1.5bn over the window — trivial versus prior confirmed interventions.
• Looks like a stop-run, not official flow. It coincided with a move back through 162, and there appeared to be a LHS TWAP flow already in the market beforehand — the desk's read is this may have simply triggered stop-losses into an air pocket.
• Range too shallow. Today's spot range was well under previous intervention days, and spot rebounded rather than seeing repeated waves of selling volume pushing lower — atypical of real intervention.
• The one caveat. There are reports that MoF is changing its intervention practice — less telegraphed, more of a "targeted campaign to squeeze speculators."

Separately, the bank also echoed the Reuters report noting that "Japanese officials warning us we won't get a warning by delivering a warning." The desk says this actually increases their comfort running a ratio USDJPY short vs. dollar length elsewhere into today's NFP, especially after the sizeable XXXJPY rally into month-end (they were correct).

Goldman's bottom line: they'd normally chalk this up to a panicky market with spot near the highs (based mainly on the light EBS volume), but point 4 raises the risk that we're in a different intervention regime and can't fully dismiss it.

“The prospect of surprise intervention should make speculators think twice before adding to bearish yen positions,” said Carol Kong, a strategist at Commonwealth Bank of Australia. “However, US yields remain the dominant driver of USD/JPY. If tonight’s US payrolls report surprises to the upside again, the pair could still push to fresh highs despite the risk of intervention.”

The payrolls report surprised to the downside instead, and USDJPY was last trading just under 161, a two-week low. 

 

Tyler Durden Thu, 07/02/2026 - 10:30

Core Durable Goods Orders Soar Most In 4 Years

US durable goods orders plummeted 4.5% MoM in May (as expected), dragging orders down 4.3% YoY - the worst annual decline since Nov 2024...

Source: Bloomberg

However, ex-transports, orders rose 1.4% MoM - up for the 14th straight month - with orders soaring over 10% YoY, the strongest annual surge since May 2022...

Adding more confusion, US factory orders fell 1.3% MoM in May (better than the 2.0% MoM decline expected) but dramatically divergent from the 4.8% MoM surge in April (revised down from +5.3%).

...but factory orders ex-transports rose 1.9% MoM - the seventh straight month of gains - with core orders up 9.5% YoY, the best since Sept 2022...

So, take your pick.

Tyler Durden Thu, 07/02/2026 - 10:24

US Adds Only 57K Jobs, Missing Estimates, As Unemployment Rate Slides On Plunge In Workers

In our jobs preview post we quoted Goldman Delta One head, Rich Privorotsky, who said that "equities marginally want something weaker than consensus: with no forward guidance, hot NFP means hikes in play, which is unfriendly for pockets of equity risk." Well, they got it because moments ago the BLS reported that in June the US added just 57K workers, half the 113K expected, and the worst monthly print since the big February drop. 

Except for an outlier 25K forecast from Citi, the jobs print was below all forecasts, a 2 sigma miss to estimates.

And yes, negative revisions are back:

• April jobs revised down by 31,000, from +179,000 to +148,000
• May jobs revised down by 43,000, from +172,000 to +129,000. 

With these revisions, employment in April and May combined is 74,000 lower than previously reported as Trump once again goes back to using the Biden playbook. 

Remarkably, while the number of payrolls rose by 57K, the number of actually employed people plunged by 507K to 162.264MM, which means the staggering gap between workers and payrolls is once again blowing out.

Just as ominously, the labor force participation rate plunged from 61.8% to 61.5%...

... driven by a massive 720K drop in the civilian labor force, which dropped to 169.358K from over 170 million...

... and which pushed the unemployment rate lower to 4.2% from 4.3%. 

By race, the unemployment rate saw a modest increase in Latino unemployment rate. Among the major worker groups, the unemployment rates showed little or no change in June for adult men (3.9%), adult women (3.7%), teenagers (14.6%), and people who are White (3.6%), Black (6.6%), Asian (3.9%), or Hispanic (5.2%), although those have increase for 3 months in a row now.

Looking at wages, there were no surprises here, with a 0.3% increase in average hourly earnings, as expected, resulting in a 3.5% increase in annual hourly earnings, also as expected.

Broken down:

• Average hourly earnings for all employees on private nonfarm payrolls rose by 13 cents, or 0.3 percent, to $37.64. Over the year, average hourly earnings have increased by 3.5 percent. In June, average hourly earnings of private-sector production and nonsupervisory employees rose by 7 cents, or 0.2 percent, to $32.38. 
• The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours in June. In manufacturing, the average workweek edged down to 40.3 hours, and overtime edged up to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.1 hour to 33.7 hours. 

Some more details from the jobs report:

• The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.9 million in June but is up by 286,000 over the year. The long-term unemployed accounted for 27.3 percent of all unemployed people in June. 
• The labor force participation rate decreased by 0.3 percentage point to 61.5 percent in June, and the employment-population ratio edged down by 0.2 percentage point to 59.0 percent. Both measures changed little over the year after accounting for annual population control adjustments. 
• The number of people employed part time for economic reasons changed little at 4.7 million in June. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
• In June, the number of people not in the labor force who currently want a job changed little at 6.0 million. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force changed little at 1.8 million in June. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was essentially unchanged in June at 477,000. 

Taking a look at the composition of jobs,  

• Employment in professional and business services continued to trend up in June (+36,000). The industry has added 172,000 jobs since a recent low in October 2025.
• Social assistance added 25,000 jobs in June, primarily in individual and family services (+17,000). Over the prior 12 months, social assistance had added an average of 16,000 jobs per month.
• In June, employment in health care continued its upward trend (+22,000) but at a slower pace than the average monthly gain over the prior 12 months (+38,000). In June, hospitals added 9,000 jobs.
• Leisure and hospitality employment declined by 61,000 in June, reflecting weaker than usual seasonal hiring. Thus far in 2026, employment in the industry has shown little net change.
• Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; other services; and government.

And visually:

Last but not least, the most damning aspect of the jobs report was once again below the surface, where we find that that while part-time jobs dropped by 53K in June to 28.626MM, the number of full-time workers collapsed by a whopping 514K, confirming once again that the composition of the US labor market remains terrible.

This means that the number of full-time jobs is now at levels last seen in 2024...

... and down more than 2.2 million from their Jan 2025 highs.

The market reaction: in response to the weaker than expected number, odds of a rate hike dropped notably...

... although with no forward guidance from the Fed, it will be largely unclear how Warsh will interpret the data.

Tyler Durden Thu, 07/02/2026 - 10:15

'Something Has Gone Completely Wrong': Palantir's Alex Karp Goes Ballistic On OpenAI, Anthropic

On Wednesday, Palantir CEO Alex Karp delivered a blistering critique of frontier AI labs, accusing them of having an "effing insane" business model that leaves enterprises paying escalating token costs for limited value while risking their proprietary data and intellectual property. He said that top AI labs such as Anthropic and OpenAI were misleading corporate partners - "overselling" the risks of AI while at the same time offering their most powerful models to companies and governments worldwide. 

When CNBC host Becky Quick said "You sound pretty angry," Karp replied: "This is the voice of American business that is being channeled through me," he told CNBC, joking later that he might "get kicked out of the room."

Karp's comments come amid a "revolt" against U.S. AI labs - driven by a combination of high costs, questionable ROI, and increasing regulatory headwinds which have driven some major U.S. companies to cheaper Chinese alternatives, creating multiple pressure points for OpenAI, Anthropic, and others.

"Something Has Gone Completely Wrong"

Karp slammed the token model used by Anthropic and OpenAI - saying "I'm not throwing shade at them, but something has gone completely wrong," he said. "The basic view among enterprises in this country is I'm going to chillax and waste my time with tokens."

He argued that that labs were overselling risks while simultaneously pushing powerful models, and that companies were effectively paying a "wealth tax" that transferred their "alpha" (competitive advantage) to third parties. On national security, he warned: "Are we really going to outsource the battlefield of this country to the consensus view in Silicon Valley? That is effing insane."

Palantir CEO Alex Karp on what customers actually want, the real business of frontier labs, and the importance of open source models:

“What the technical customers want is control over their compute, their models, their data stack, and their alpha. They want to know they own the… pic.twitter.com/2hvTx7VSyj

— Palantir (@PalantirTech) July 1, 2026

The remarks aligned with a 9-point "AI sovereignty" manifesto Palantir posted on X the day before, which criticized "tokenmaxxing" for incentivizing disposable scripts over robust systems and urged institutions to retain control over their data, model weights, and competitive edge.

Via X: 

Our thoughts on the importance of AI sovereignty.

1. Your AI sovereignty dictates your institution’s future. Sovereignty is the precondition for choice. Relinquishing sovereignty transfers the future choices of your institution to others, who are likely to exploit it for their gain and your loss.

2. Data retention is your treasure. Transfer it at your own peril. Your ability to win is dictated by your ability to recognize and use your unique edges, and you keep winning by compounding the underlying data to generate new insights. Transferring that data hands over access to your pre-existing winning plays and yields the means of production for new ones.

3. Tokenmaxxing hijacks your value orientation and decreases your institutional fortitude and intelligence. The pursuit of high token usage incentivizes disposable scripts over robust software — with the addictive feeling of false progress. There is a reason why those selling tokens refuse to charge based on value.

4. Controlling your weights is controlling your fate. Weights are the distilled form of hard-won, accumulated institutional knowledge. If you let others control your weights, you are allowing them to migrate the alpha of your business to theirs.

5. There is no contradiction between sovereignty and alpha. The architecture that maximally preserves sovereignty is one that enables institutions to own their tribal knowledge, and to compound it as alpha.

6. Politicizing the technical issues involving sovereignty is what your adversary wants. Techno-politicization is the wellspring of false sovereignty. Techno-politicization drives decisions that seem to reduce dependency, but ultimately limit agency — especially on the battlefield in the West.

7. Real expertise is existential. Allowing politics or favoritism to determine your technical decisions rewards whoever is best at politics, not whoever is right. Listen to those closest to the problems, not those speaking most compellingly about them.

8. Learn from institutions that are winning or that have consistently delivered. Institutions facing existential threats do not have the luxury of making technical decisions based on political preferences.

9. Only listen to institutions, countries, and people who have a proven record of being right. A track record of correctness is the best and only signal for future correctness. Judging something as right or wrong based on who you like is exceedingly misguided.

"Controlling your weights is controlling your fate," the manifesto stated. "If you let others control your weights, you are allowing them to migrate the alpha of your business to theirs."

Karp noted Palantir's expanded Nvidia partnership, which enables custom, sovereign AI deployments where customers retain control over compute, models, data, and weights - a direct counter to the metered frontier API model.

Watch CNBC's full interview with Palantir CEO Alex Karp

The Cost-Driven Shift To Chinese Models

As we've been noting, high token prices and mixed returns have prompted several U.S. companies to adopt or explore Chinese open-weight models:

• Microsoft is considering a Microsoft-hosted, fine-tuned version of China's DeepSeek V4 (or another open-source model) as a lower-cost engine for its Copilot Cowork agentic tool, as it moves toward usage-based pricing.
• Coinbase CEO Brian Armstrong revealed the company cut internal AI spending by nearly 50% by defaulting engineers to Chinese open-weight models (Zhipu AI's GLM 5.2 and Moonshot AI's Kimi series) via an internal gateway, while maintaining high usage.
• Cursor, a fast-growing AI coding startup, built its Composer 2 model on top of Moonshot AI's Kimi K2.5 (backed by Alibaba).

Data from OpenRouter shows Chinese models capturing a rapidly growing share of global token consumption - in some periods exceeding 60% among top models - as enterprises seek cost relief without fully sacrificing capability.

Karp had warned against underestimating China's progress; these examples illustrate the trend in real time.

Watch the entire interview below:

here is the entirety of Palantir CEO Alex Karp's televised nervous breakdown this morning on CNBC pic.twitter.com/gzD8debrKB

— Aaron Rupar (@atrupar) July 1, 2026

Tyler Durden Thu, 07/02/2026 - 10:15

Buried On The 4th Of July: Mediators Pledge Quiet Between US, Iran To Allow For Ayatollah Khamenei's Funeral

President Trump by mid-week told reporters that the "denuclearization of Iran is moving along well" and that "very good meetings" are being held in Doha - even though no direct talks have taken place, but only an exchange of messages via mediators. On Wednesday US officials told regional media that no frozen Iranian funds have been released, nor will they be until Iran complies to what's been laid out in the MoU. And so each side continues accusing the other of refusal to conform with agreed-upon terms.

Regardless, the Qatari Ministry of Foreign Affairs as well as Pakistan's foreign ministry also previously released positive assessments of where things stand: "Qatar and Pakistan mediators concluded separate meetings with the US and Iranian negotiators in Doha today, with positive progress made on issues related to the Islamabad Memorandum of Understanding, building on the outcomes of the Lake Lucerne Summit," they said in a joint statement on social media.

Apparently things are going to be 'quiet' heading into the weekend, to allow time for the mass funeral events of slain Ayatollah Ali Khamenei. Crucially the Qatar-Pakistan statement indicated, "The parties agreed to continue discussions over the coming period, with the next meeting to be scheduled at the earliest possible time following the funeral processions of the former Iranian Supreme Leader." Other sources say a diplomatic 'pause' is on for the moment, as is presumably military action.

via AFP

It just so happens that Khamenei, who was targeted and killed at the very opening of Trump's 'Operation Epic Fury' in coordination with Israel, will finally be buried on the 4th of July (or at least that's when the days-long funeral ceremony will start). On the other side of the globe, Americans will at the same time be celebrating the 250th anniversary of the founding of the United States, ironically enough in terms of timing.

Iran's chief negotiator Mohammad Bagher Ghalibaf has meanwhile on Thursday called for a massive turnout at the late Supreme Leader's funeral. He said "the nation's call for vengeance must ring in the ears of the whole world." Iran "is preparing to experience one of the most significant moments in its history," Ghalibaf emphasized.

"I invite all the Iranian people ... to write a glorious page in the history of Islamic Iran through your presence" at the funeral ceremonies starting Saturday, Ghalibaf continued. According to commentary from the NY Times:

The emblem of the funeral, shared by the official planning body, is Mr. Khamenei’s closed fist alongside a slogan: “We must rise.”

The ceremonies will also be an opportunity for the government to demonstrate Iran’s regional influence and transnational religious ties, with plans for large-scale mourning events in Iraq, which also has a large population of Shiite Muslims and is home to Shiite militias backed by Iran.

Officials cited in CBS have said they expect the ceremonies to draw between 15 and 20 million mourners, which would put it at the largest state funeral in the Islamic Republic's history. The government hopes to unify and rally the populace around the burial of a 'martyr' - at a moment American and Israeli officials have held out hope for a crumbling and fragmentation of support for Tehran leadership.

Iranian President Masoud Pezeshkian has also urged Iranians to turn out en masse: "Your widespread presence will be a decisive response to the logic of terrorism, violence, and bullying, and a clear message to the world that the Iranian nation stands united and in solidarity in defending its independence and dignity," he said in a statement Thursday. Authorities have declared an official holiday running for three days starting Saturday.

Khamenei's son and successor, the current Ayatollah Mojtaba - said to have been severely wounded and recovering after a US-Israeli airstrike in the opening days of the war - has still not been seen or directly heard from in public. Whether or not he'll attend public funeral events for his father this weekend remains a huge question mark - one which will be closely watched by foreign intelligence agencies. 

Technically, while the funeral events will start Saturday, Khamenei's body won't be buried until Monday following a casket procession through Tehran's most important streets.

The NY Times further has this interesting commentary revealing how unusual it is for Iran to have delayed a state funeral this long:

It is highly unusual in Muslim culture for burial to be delayed for so long after death. That in itself was an indicator of the extraordinary circumstances that Iran faced after Mr. Khamenei’s death, amid weeks of heavy bombardment. Officials have denied rumors that Mr. Khamenei’s body was temporarily buried and have said that it was kept in accordance with religious requirements.

Now, Iran’s government is seeking to present the funeral as a moment of national unity and shared grief, a display of bureaucratic competence and a show of resistance against an outside enemy. The emblem of the funeral, shared by the official planning body, is Mr. Khamenei’s closed fist alongside a slogan: "We must rise."

The ceremonies will also be an opportunity for the government to demonstrate Iran’s regional influence and transnational religious ties, with plans for large-scale mourning events in Iraq, which also has a large population of Shiite Muslims and is home to Shiite militias backed by Iran.

Government representatives from some 30 countries are expected to be in attendance. Most important among these will be Pakistan's Prime Minister Shehbaz Sharif. "The Prime Minister, Muhammad Shehbaz Sharif, will go to Iran and Turkey from 3-5 July ... he will go to Iran first for (the) supreme leader's funeral," foreign ministry spokesman Tahir Andrabi told reporters. One the one hand this could be awkward from Washington's point of view, but Pakistan has also been a key top mediator in peace talks alongside Qatar.

Among other notable attendees will be senior Chinese parliamentary official He Wei – who is the vice chairman the Standing Committee of the National’s People Congress, which is the country's top lawmaking body. India's deputy foreign minister Shri Pabitra and the state governor of Bihar, Syed Ata Hasnain, will also attend, the Indian foreign ministry has indicated.

Iranian officials are strongly warning Israel not to commit any military aggression amid the proceedings, and have also called on Washington to 'muzzle' the Israelis. 

Tyler Durden Thu, 07/02/2026 - 09:40