Zero Hedge

"All Necessary Measures": China Warns US Against New Tariffs

"All Necessary Measures": China Warns US Against New Tariffs

Beijing cautioned Washington that it is prepared to respond forcefully - with "all necessary measures" - if a renewed US review of their 2020 trade pact leads to additional tariffs, after American officials indicated the inquiry would press ahead, according to Bloomberg.

In remarks released Wednesday, China’s Commerce Ministry pushed back on comments from US Trade Representative Jamieson Greer, arguing that China has upheld its commitments under the so-called Phase One agreement despite the economic shock of the pandemic. Officials said the country followed through on promises related to intellectual property protections and broader access to its financial and agricultural sectors.

At the same time, the ministry accused the United States of hampering the deal’s rollout by expanding export controls, tightening scrutiny of cross-border investment and layering on other restrictions that, in Beijing’s view, have disrupted ordinary trade flows. It pointed to a policy paper issued in 2025 outlining China’s position.

Bloomberg writes that the ministry warned that if Washington presses ahead with the investigation — or uses it as grounds to impose new trade barriers such as tariffs — China “will take all necessary measures” to safeguard what it described as its lawful interests.

The back-and-forth adds a fresh dose of tension to the relationship ahead of President Donald Trump’s upcoming visit to Beijing, his first trip to China since 2017 and the first by a US president in years. The diplomatic friction follows a Supreme Court ruling that struck down sweeping emergency tariffs enacted during Trump’s second term, effectively lowering duties on Chinese goods compared with those faced by some US allies.

Greer has said the administration retains authority to levy tariffs under Section 301 and other trade laws despite the court’s decision. The Office of the US Trade Representative launched its compliance review of the Phase One agreement in October 2025.

China’s Commerce Ministry called on the United States to evaluate the accord “objectively and rationally,” avoid assigning blame and make use of existing consultation channels to build on areas of agreement and steer ties toward a more stable future.

Tyler Durden Wed, 02/25/2026 - 22:10

15 States Sue RFK Jr. Over Changes To Vaccine Schedule

15 States Sue RFK Jr. Over Changes To Vaccine Schedule

Authored by Zachary Stieber via The Epoch Times,

California and 14 other states on Feb. 24 sued federal health agencies and Health Secretary Robert F. Kennedy Jr. over the recently revised childhood vaccine schedule.

Federal officials violated federal law by not consulting with the Centers for Disease Control and Prevention vaccine advisory panel before downgrading recommendations for six vaccines in January, the plaintiffs said in a lawsuit filed in federal court in northern California.

The updated CDC vaccine schedule “will damage public health by decreasing vaccine uptake and increasing rates of vaccine-preventable diseases, including by creating confusion, spreading misinformation contrary to established scientific evidence, and increasing vaccine hesitancy,” they said.

They also took issue with how the CDC, acting on advice from the panel, previously stopped recommending hepatitis B vaccination at birth to children born to women who tested negative for hepatitis B.

The states are asking the court to enjoin those changes.

The Department of Health and Human Services, the CDC’s parent agency, has said it does not comment on litigation.

A separate lawsuit, lodged in 2025 by health organizations, also seeks to block the revised schedule as well as Kennedy’s remaking of the CDC’s vaccine advisory committee.

U.S. District Judge Brian Murphy, who heard from the parties during a hearing in Boston earlier in February, has not yet ruled on the request as he considers whether to allow Children’s Health Defense, an organization previously founded by Kennedy, to intervene in the case in support of the government.

Government lawyers have said in filings in that case that the vaccine schedule was reasonably updated based on recommendations from top health officials, including Dr. Tracy Beth Hoeg, acting director of the Food and Drug Administration’s Center for Drug Evaluation and Research.

A baby after receiving a vaccine for hepatitis B and other diseases, in a file illustration photograph. Riccardo Milani/Hans Lucas/AFP via Getty Images

President Donald Trump ordered a comparison of the U.S. vaccine schedule with those of other countries, and it showed the United States was a global outlier among peer nations in routinely recommending vaccines against hepatitis A and certain other diseases, Hoeg said.

A memorandum signed by then-CDC Acting Director Jim O'Neill said the update was needed to increase public trust in vaccines.

The government has also said Kennedy’s replacement of vaccine advisory committee members was legal because members hold a variety of jobs and have put forth “complex and nuanced perspectives.”

The attorneys general of 14 states—Arizona, California, Colorado, Connecticut, Delaware, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, and Wisconsin—all Democrats, and Pennsylvania Gov. Josh Shapiro, also a Democrat, are the plaintiffs in the new suit.

California Attorney General Rob Bonta told reporters in an online briefing on Tuesday that the actions Kennedy and other officials have taken regarding the vaccine “harm public health and they strain state resources by sowing doubt and confusion in vaccines and in science.”

He added later that, absent action from the court, “California will be forced to expend resources, to treat once rare diseases, to respond to outbreaks, and to combat misinformation.”

Tyler Durden Wed, 02/25/2026 - 21:45

Watch: Dems Double-Down On Refusing To Put Americans First After SOTU Meltdown

Watch: Dems Double-Down On Refusing To Put Americans First After SOTU Meltdown

Authored by Steve Watson via Modernity.news,

Democrats’ disdain for American priorities hit new lows during President Trump’s State of the Union, where many refused to stand for victims of illegal alien crime or even basic protections for citizens. Now, they’re doubling down with excuses that expose their true allegiances.

Building on their po-faced refusals to applaud pretty much any commons sense statement during the speech - as we detailed in our previous coverage - top Democrats are now openly trashing the address as ‘divisive’ while justifying their boycott.

According to reports, roughly half of House and Senate Democrats skipped the event altogether, opting for counter-rallies like this clown show:

There, they criticized Trump’s policies on immigration and the economy, accusing him of harming Americans through border security measures and cost reductions that have actually benefited working families.

Over 80 Democrats announced their boycott ahead of time, including high-profile figures like House Minority Whip Katherine Clark and Senators Chris Van Hollen and Adam Schiff. Instead of engaging with Trump’s message of renewal, they chose to rally against what they called his “unpopular agenda,” even as polls show broad support for securing the border and prioritizing citizens.

In the aftermath, Democrats unleashed a barrage of complaints that only highlighted their detachment from everyday Americans.

Debbie Wasserman Schultz called the speech “absolutely revolting,” specifically recoiling at the idea of prioritizing Americans over illegal aliens.

Mark Kelly dismissed it as a “disappointment” that tried to “divide us as a nation,” despite his own refusal to stand when Trump called for putting American citizens first.

Suhas Subramanyam whined that Trump “tried to corner them” by asking Democrats to stand for American citizens—revealing just how controversial basic patriotism has become in their ranks.

Even more disturbing, Robin Kelly was caught laughing and mocking American heroes and veterans as they received medals from Trump. This kind of contempt for those who’ve sacrificed for the country is beyond sickening.

CBS News, not exactly a bastion of conservatism, admitted Democrats buried themselves: “They can’t even applaud common sense things!” The contrast between American citizens and illegal aliens created a “visual moment” that exposed their priorities.

Vice President JD Vance torched Democrats for their spineless performance, pointing out “‘The American government should stand for American citizens, not illegal aliens,’ that shouldn’t be controversial — but apparently, it was to the Democrats.”

Vance also highlighted their herd mentality: “Something that I saw that probably most TV viewers didn’t see was really the cowardice … They were all looking around for cues from their colleagues because they didn’t have the courage to stand on their own.”

On the heart-wrenching moment during the speech with a young girl previously assaulted by an illegal alien, Vance urged “Whatever your politics; whatever your views on immigration policy, can’t we all stand and clap for an innocent young girl who shouldn’t have been assaulted and was being held by her dad?”

“It was such a heartwarming moment. I think every American, Democrat or Republican, thought that was a great moment for our country,” Vance continued, adding “The only people who didn’t believe that apparently were the Congressional Democrats in that Chamber. I think it shows again how broken their party is.”

“Democrats wouldn’t stand for that innocent little girl ASSAULTED by an illegal alien, but managed to survive!” Vance stressed, further slamming them for not standing against child transitions without parental consent or for putting American citizens first.

Amid the Democratic meltdown, Senator John Fetterman emerged as the rare exception, admitting he stood and clapped for key moments while questioning his party’s behavior.

“Well, for me, you know, I never check to see what the rest of people in my party would stand up and clap for,” Fetterman stated, adding “I clapped with a lot of those things that it seemed like others. I stood up and clapped to recognize the family that lost their daughter, the Ukrainian girl stabbed to death in North Carolina. And I stood up and I clapped that political prisoner from Venezuela, how you can’t celebrate those kinds of things?”

“I also celebrated all the veterans that were in the audience as well, too,” Fetterman continued, adding “And even more the political things like Erika Kirk. I stood up and I clapped for her as well, too.”

“Can’t we just be more kind to a widow? We just shouldn’t be that long ago that a widow with young children has her husband murdered, how we can’t just acknowledge that as well, too,” he noted.

Fetterman’s willingness to applaud victims and heroes stands in stark contrast to his colleagues’ petty obstructionism, underscoring how far the Democratic Party has strayed from common decency.

This boycott and the excuses that followed aren’t just political theater—they’re a clear signal that Democrats would rather pander to open borders and globalist agendas than stand up for the American people. Trump’s address showcased real wins: secure borders, economic growth, and peace through strength. Yet Democrats chose division over unity, proving once again they’re the obstacle to making America great.

As midterms approach, voters won’t forget this display of anti-American pettiness. It’s time to hold them accountable.

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 Wed, 02/25/2026 - 20:55

Trump Claims Iran Developing Missiles To Hit US, Contradicting Intel Reports

Trump Claims Iran Developing Missiles To Hit US, Contradicting Intel Reports

With nuclear talks hanging in the balance, and the potential for yet another US war of choice in the Middle East, President Donald Trump escalated the rhetoric Tuesday night, warning that Iran is moving beyond just regional missile capabilities and setting its sights farther west by developing missiles capable of hitting the United States.

During his State of the Union address Tuesday night, Trump claimed, "They've already developed missiles that can threaten Europe and our bases overseas, and they're working to build missiles that will soon reach the United States of America."

Getty Images

It seemed a transparent attempt to make the American people believe they are under direct threat from Tehran, in order to justify potential near-future strikes, however flimsy the case might be. So far Washington's main talking point has been that Iran simply can never have a nuclear weapon and so something has to be done - and this actually does resonate with some sectors of the American public.

But Tehran setting its sites on directly attacking the US homeland is a huge stretch, with no serious analyst so much as suggesting the Islamic Republic has the capability or is even close.

US intelligence assessments have been very conservative on this. For example, in 2025, the Defense Intelligence Agency (DIA) stated that Iran could potentially field a militarily viable intercontinental ballistic missile by 2035 "should Tehran decide to pursue the capability."

Given US intelligence also has not concluded that such a decision had been made, this means Iran is likely at least a decade away from even being close to possessing such an ultra long range missile.

The US mainland is some 6000 miles away from western Iran, and currently Iran's longest range missile is said to reach just under 1900 miles - a huge gap.

Iran's ballistic missile focus has always been developing with an eye on the country's number one nemesis in the region: Israel. 

There's a broad understanding even among the Western public that in reality Washington's anti-Iran stance has much more to do with defending Israel than the US homeland, which is clearly not under immediate threat from Tehran. There's not so much as been a terror attack carried out by a single Iranian Shia operative on American soil in all of history. 

So it seems the White House continues to be in search of a rationale and narrative to sell the public amid the major Pentagon build-up in the region. But polls by and large suggest most Americans still aren't buying it.

Tyler Durden Wed, 02/25/2026 - 20:30

Mexico's Sheinbaum Weighs Legal Action After Musk Alleges Cartel Ties

Mexico's Sheinbaum Weighs Legal Action After Musk Alleges Cartel Ties

Authored by Tom Ozimek via The Epoch Times,

Mexican President Claudia Sheinbaum said she is considering legal action after tech billionaire Elon Musk alleged on social media that she was taking orders from drug cartels.

Speaking at a Feb. 24 news conference in Mexico City, Sheinbaum said government lawyers were reviewing the matter.

“We’re considering whether to take some legal action,” she said.

“The lawyers are looking into it, but what matters to me is what the people say, honestly.”

Musk’s allegation of Sheinbaum’s cartel subservience followed the capture and killing of Jalisco New Generation Cartel (JNGC) leader Nemesio Oseguera, known as “El Mencho,” by Mexican security forces.

In his post on X, Musk responded to a 2025 video of Sheinbaum discussing cartel violence and saying that returning to a war against the cartels is “not an option” because it would mean extrajudicial killings that are “outside the framework of the law.” She added that military force against the cartels would also be counterproductive because it would trigger retaliatory violence that would only “increase homicides in Mexico.”

Responding to those remarks, Musk alleged that she was “saying what her cartel bosses tell her to say.”

“Let’s just say that their punishment for disobedience is a little worse than a ‘performance improvement plan,’” Musk wrote.

He did not provide evidence to support his claims.

Sheinbaum could face difficulty suing Musk for defamation in the United States because of strong legal protections for free speech. To prevail, she would need to show that Musk knowingly made a false statement or acted with reckless disregard for the truth.

Tesla, Musk’s auto company, did not immediately respond to a request for comment.

Violence After El Mencho’s Killing

Musk’s comments came amid heightened tensions in Mexico following Oseguera’s death.

An uneasy calm appeared to be returning to parts of the country on Wednesday after the killing of the cartel leader triggered widespread reprisals. The violence paralyzed highways, grounded flights, and forced residents and tourists to shelter in place, particularly in Jalisco state.

Aerial view of burned vehicles over the La Desembocada bridge in Puerto Vallarta, Jalisco State, Mexico, on Feb. 24, 2026. Alfredo Estrella/AFP via Getty Images

Sheinbaum said at the Feb. 24 briefing that authorities were working to restore order after Sunday’s military operation in Tapalpa, Jalisco, left Oseguera dead following a shootout.

“Today there was no school, but tomorrow activities are expected to return to normal,” she said.

“In the Guadalajara airport, practically all flights have already resumed, and in Puerto Vallarta, little by little, things are returning to normal.”

Sheinbaum added that there were still “some” burned vehicles on the side of the road on Tuesday that would be removed later in the day.

Mexican President Claudia Sheinbaum pays tribute during the celebration of Flag Day in Mexico City on Feb. 24, 2026. Yuri Cortez/AFP via Getty Images

Mexico’s Security Cabinet said in a Feb. 24 post on X that affected states were experiencing “a gradual reopening of economic and educational activities, with progressive normalization of mobility and strategic operations,” according to a translation.

More than 50 people were reported killed in the operation and its aftermath, including members of Mexico’s National Guard. The White House said the United States provided intelligence support for the raid.

The CJNG, one of Mexico’s most powerful criminal organizations and a major trafficker of fentanyl and methamphetamine into the United States, responded to Oseguera’s death with coordinated attacks, including vehicle burnings and armed confrontations with security forces.

Sheinbaum also sought to reassure international visitors ahead of the 2026 FIFA World Cup, saying there was no risk to fans traveling to Mexico and that “all the guarantees” for safety were in place.

Trump’s Escalating Pressure

Musk’s criticism mirrors that of U.S. President Donald Trump, who has sharply escalated rhetoric against Mexican cartels and criticized Sheinbaum’s approach.

“The cartels are running Mexico. It’s very sad to watch and see what’s happened to that country,” Trump told Fox News’ Sean Hannity in a Jan. 8 interview.

“They’re killing 250,000, 300,000 in our country every single year.

“We knocked out 97 percent of the drugs coming in by water, and we are going to start now hitting land with regard with the cartels.”

Trump also warned that Mexico needs to “get its act together.”

“You have to do something with Mexico,” Trump told reporters in January. “We’re going to have to do something. We’d love Mexico to do it; they’re capable of doing it, but unfortunately, the cartels are very strong in Mexico.”

He has described Sheinbaum as “afraid” of the cartels and has suggested the United States could conduct military strikes on Mexican soil. His administration has intensified anti-cartel measures, including designating certain Mexican syndicates as terrorist organizations.

“Much more remains to be done by Mexico’s government to target cartel leadership, along with their clandestine drug labs, precursor chemical supply chains, and illicit finances,” Trump said in a presidential determination published by the U.S. State Department in September 2025. “Over the next year, the United States will expect to see additional, aggressive efforts by Mexico to hold cartel leaders accountable and disrupt the illicit networks engaged in drug production and trafficking.”

Sheinbaum has repeatedly rejected the prospect of unilateral U.S. intervention, saying it would violate Mexican sovereignty.

“We categorically reject intervention in the internal affairs of other countries,” Sheinbaum said during a news conference in early January. “The history of Latin America is clear and compelling: Intervention has never brought democracy, never generated well-being, nor lasting stability.”

White House press secretary Karoline Leavitt speaks during a press briefing at the White House in Washington on Feb. 10, 2026. Madalina Kilroy/The Epoch Times

The White House confirmed that the United States provided intelligence support for the operation to capture El Mencho and applauded Mexico’s army for taking down a man who was one of the most wanted criminals in both countries.

“The United States provided intelligence support to the Mexican government in order to assist with an operation in Talpalpa, Jalisco, Mexico, in which Nemesio ‘El Mencho’ Oseguera Cervantes, an infamous drug lord and leader within the Jalisco New Generation Cartel, was eliminated,” White House press secretary Karoline Leavitt said in a Feb 22 post on X.

Sheinbaum told reporters on Feb. 24 that she expects security to continue to normalize in Mexico following coordinated roadblocks and arson attacks by cartel members after the operation against Oseguera.

Tyler Durden Wed, 02/25/2026 - 20:05

Supertanker Rates Hit Six-Year High: Here's What Driving It

Supertanker Rates Hit Six-Year High: Here's What Driving It

Global very large crude carrier (VLCC) rates have jumped to six-year highs due to two recent catalysts: first, a growing war-risk premium tied to the possibility of a US-Iran conflict, and second, ongoing consolidation in fleet ownership that is tightening vessel availability.

Let's begin by noting that war-risk insurance premiums are rapidly being priced into VLCC tanker rates. The Strait of Hormuz has once again come into focus as the world's most important energy chokepoint, where any flare-up in a US-Iran conflict could prompt Iranian commanders to shut the strait down, sparking what would only be immediate panic in global energy markets.

Latest Polymarket pricing for "US strikes Iran by...?" implies a 47% probability of a U.S. military strike by March 15. 

A war-risk premium has also been priced into Brent crude futures, with prices trading above $70 per barrel late Wednesday morning.

Bloomberg reports that Bahri, the National Shipping Co. of Saudi Arabia, chartered five VLCCs to transport up to 2 million barrels from the Middle East to China at a rate of $200,000 per day. According to the Baltic Exchange in London, that is the highest rate in six years. One of the ships Bahri chartered, the DHT Jaguar, was booked at $208,000 per day.

Supertanker rates are rising for two reasons:

  1. Rising fears of a potential US-Iran conflict, and a vessel supply squeeze caused by a South Korean shipowner aggressively putting on charters.

  2. South Korea's Sinokor group has recently amassed control of roughly 120 VLCC supertankers, dramatically tightening global supply and contributing to the rise in tanker rates.

"You have one party or group of people who are working together who effectively control around a third of the available or traded tanker VLCC fleet out there," Ole Hjertaker, chief executive officer of shipping firm SFL Corp., told investors on a call earlier this week, without naming the parties.

Svein Moxnes Harfjeld, chief executive of tanker company DHT Holdings Inc., told investors on another call that a "fundamental shift" in global fleet consolidation is underway.

"We can say with confidence that this is taking place and already making an impact, both on freight rates in the spot market, customer demand for time charters, and values of second-hand VLCCs," Harfjeld said. "This consolidation is shifting the pricing dynamics and is putting pressure on timely availability of ships."

Aristidis Alafouzos, chief executive officer of Okeanis Eco Tankers, noted, "This market consolidation, occurring at an unprecedented level, by a buyer with deep financial power, occurs at a time when market fundamentals continue to get tighter. It all creates an amazing opportunity if you have tankers on the water today, and the commercial ability to capture such market to its full extent."

June Goh, a senior analyst at Sparta Commodities, said, "VLCC freight rates have seen many positive fundamental drivers, starting with Venezuela barrels moving on legitimate freight vs a dark fleet before, increased OPEC+ production and healthy crude demand from refineries, particularly from India, which has moved from Russian to Middle Eastern barrels."

"Suezmax and Aframax markets will soon receive the spillover effects in the dirty freight market," Goh said, referring to smaller tankers.

Tyler Durden Wed, 02/25/2026 - 16:40

Outrage In Sacramento: California Parole Board Grants Release Of Serial Child Rapist

Outrage In Sacramento: California Parole Board Grants Release Of Serial Child Rapist

Authored by Debra Heine via American Greatness,

The California Parole Board’s decision to release a serial child molester who used candy and toys to lure children as young as three years old has sparked outrage from victims, prosecutors, and law enforcement officials.

David Allen Funston, 64, was convicted in 1999 of sixteen counts of kidnapping and child molestation after a horrific crime spree in Sacramento County, during which he kidnapped, raped, and beat eight children aged 3 to 7.

The judge described him as “the monster parents fear the most” and sentenced him to three consecutive life terms plus 20 years.

Funston was recently granted parole under California’s Elderly Parole Program, which allows inmates over 50 who have served at least 20 years to be considered for release.

He was initially denied parole in May 2022 but was granted suitability for release in September 2025.

Governor Gavin Newsom (D.) requested a review of the decision and the Board of Parole Hearings reaffirmed it on February 18, 2026.  

Newsom did not override the decision.

Former prosecutor Anne Marie Schubert, who prosecuted Funston in what she called “the worst child predator case I’ve ever seen,” has urged the state to screen him for the Sexually Violent Predator (SVP) program, which would allow civil commitment to a state hospital instead of public release.

“He was hunting for young children,” Schubert, now a victim’s rights advocate, told the Modesto Bee. 

 “It boggles the mind. He’s the poster child for why sex offenders should be exempt from elderly parole.”

Court records at the time showed Funston had a prior sexual assault conviction in Colorado before moving to California. According to authorities, he served time in a Colorado prison for third-degree sexual assault but was never required to register as a sex offender when he relocated to Sacramento County.

“He is a serial predator is what he is,” Deputy District Attorney Hillary Bagley said in 1996 as charges mounted ahead of his 2½ month trial, according to previous Bee reporting. “He is every parent’s worst nightmare.”

Schubert provided graphic details to the Los Angeles Times of a horrible case in 1995,  where Funston used candy to lure a 5-year-old girl into his car, and then took her up into the hills and molested her.

“He beat her. He took her underwear and shoved it down her throat because she was screaming. He then raped her to the point that she has vaginal trauma,” Schubert recalled.

Sacramento County Sheriff Jim Cooper held a press conference Monday and blasted the parole board’s decision to release the dangerous predator back onto the streets.

“He lured them with candy and Barbie dolls. He stole their childhoods. I’ve seen the reports. They’re horrific,” Cooper said.

The sheriff described how Funston kidnapped one little girl in 1995, “viciously” raped her and then drove her to another location where he punched her and kicked her out of the car.

“There’s no explanation. There are some folks who deserve a second chance at life—someone who does these types of things doesn’t deserve a second chance at life,” Cooper said.  “The people of Sacramento and every parent across California, deserve answers.”

The sheriff questioned why California would “be okay” with this releasing an infamous child predator like Funston back onto the streets and said California’s parole program needs to be changed.

Sergeant Rafael Rodriguez, who had worked the case in the 1990s as a detective, said he was “outraged” when he read that the monster he helped put behind bars was about to be released.  Rodriguez told reporters that the entire Sacramento police bureau has not forgotten the appalling Funston case.

The sergeant said he immediately called Sheriff Cooper and said, “we can’t allow this. This is wrong.”

He lamented that while Funston is being released back onto the streets, his victims are serving the life sentences that come with severe trauma.

“Wherever he is going to be released to better watch him,” Rodriguez warned.

During the presser, Undersheriff Mike Ziegler stressed that child molesters like Funston cannot be rehabilitated.

“There are certain crimes that cannot be rehabilitated and this is one of them,” Ziegler said.

Amelia, who was 3-year-old when she was molested by Funston, also spoke during the presser to plead with the state to keep him incarcerated for life.

“I feel that he does not deserve his freedom,” she said. “He does not need to be back in public society. He is a criminal child molester who is dangerous and deserves to spend the rest of his life behind bars,” she added.

The Sacramento Sheriff’s Office provided additional details about the case in a statement on X Monday.

“The Elderly Parole Program was meant for those who no longer pose a danger. In cases like this, it fails. Our number one responsibility is to protect children. That should never be controversial or partisan,” the sheriff’s office stated.  “Protecting children is not rhetoric. It is common sense. Protect children first. Always.”

Funston remains incarcerated at the California Institution for Men in Chino, and the California Department of Corrections and Rehabilitation has not disclosed his release date or location, citing safety and security reasons. Ziegler told reporters however that the likelihood of Funston being released right back into Sacramento was “very high.”

Tyler Durden Wed, 02/25/2026 - 16:20

Hezbollah Will Stay Out Of US-Iran Fight, But Only If Strikes 'Limited'

Hezbollah Will Stay Out Of US-Iran Fight, But Only If Strikes 'Limited'

As the Trump White House weighs its options against Tehran, Hezbollah is signaling it may not be eager to open another front - at least not immediately, issuing a rare message which seeks to calm the mood in the region.

A senior Hezbollah official told AFP that the Iran-backed group would stay out of the fight if the United States conducts only "limited" strikes against Iran - a notable caveat, but which leaves the door open if escalation goes further.

The past several years of the Gaza war saw Hezbollah enter direct, sustained conflict with Israel - after which the Shia paramilitary group saw it's leadership decimated after a series of targeted IDF strikes on Beirut, as well as the pager blast operation.

And so at this moment, Hezbollah is very much on a back foot, and likely doesn't have the resources to enter into a new round of fighting with Israel along the country's northern border.

However, it's believed that Hezbollah - which has throughout it's history stretching back into the 1980s closely coordinated with Iran - still has tens of thousands of rockets it could unleash.

The Israeli government has meanwhile conveyed its own indirect warning, saying if Hezbollah joins any US-Iran war, Lebanon will pay a steep price. Potential Israeli retaliation would once again target civilian infrastructure, including Beirut’s airport - as has happened several times in the past.

"Over the past several months, IDF troops have been operating in southern Lebanon to dismantle terrorist infrastructure and prevent attempts by the Hezbollah terrorist organization to rearm," the Israeli military (IDF) said in a fresh statement this week.

Israeli forces targeted "weapons and terrorist infrastructure, including observation and firing positions in which anti-tank launchers were located," the IDF said.

A key part of Israel's strategy has long been to pressure the entire country of Lebanon and make life miserable for its population. But the Lebanese government and armed forces are limited in their options, given Hezbollah is by far the most well-armed faction, even far and above the national army.

But should a major US-Iran-Israel war erupt, there's a high chance that Lebanon would once again feel the disastrous after effects. Hezbollah militants would likely take shots at Israel, and the IDF would respond brutally, likely with more bombing raids over Beirut and especially the south.

On Wednesday, the United States rolled out with yet more sanctions on Iran, which at this point has become a monthly, if not weekly, exercise. Iran is widely seen as a key bankroller of Hezbollah's operations in the Levant region.

Tyler Durden Wed, 02/25/2026 - 15:05

Goldman's Top DEI Exec Out Days After Bank Scraps Woke Board Policy

Goldman's Top DEI Exec Out Days After Bank Scraps Woke Board Policy

Days after the firm announced that they were scrapping DEI requirements for new board members, and six years after the death of George Floyd that ushered in institutionalized virtue-signaling, the bank's head of DEI is leaving. 

Megan Hogan, who's been at the firm 12 years, is taking her shtick to Morgan Stanley according to Business Insider, which Hogan confirmed via email, telling the outlet that Morgan Stanley had extended "an amazing opportunity" to her in talent development. 

She will report to Morgan's head of talent development, Susan Reid, the firm's global head of talent, and will begin in April. 

The move comes after Goldman's hard pivot away from DEI following Donald Trump's second term - retooling its diversity program, known as One Million Black Women (oh god), a multibillion-dollar commitment to invest in black businesswomen and nonprofit leaders. 

The bank also ended its requirement that companies it takes public have diverse boards, and stopped highlighting specific DEI targets in annual reports. 

Hogan is being replaced by Lauren Uranker, another managing director who has been with the firm for 14 years who will become the new sole head of talent, development, engagement and management, according to the report. Her mandate will be to concentrate on the transition to AI-supported work, team growth, and finding ways to keep top talent from fleeing. 

In early 2025, anti-DEI activist groups, which included the National Center for Public Policy Research (NCPPR), the National Legal and Policy Center and the Heritage Foundation, also targeted the bank - submitting proposals challenging their business practices, and arguing that the banks' policies have left them and their shareholders vulnerable to costly legal challenges. 

So-called anti-woke groups have seized on the 2023 Supreme Court ruling that found race-based affirmative action in college-admissions processes is unconstitutional. Since then, the groups have challenged a range of diversity policies across Corporate America, both in court and through shareholder proposals. 

...

Trump signed an executive order on his first day in office to end DEI programs across the federal government. -WSJ

The NCPPR was also a co-plaintiff in a successful ruling in late 2024 against the SEC over Nasdaq's requirement that companies listed on its exchange meet DEI requirements. 

"This is a reflection of the changing legal environment and adapting to the reality of those legal shifts," a genderless spokesperson told Business Insider, adding that the firm stands by the benefit of "diverse perspectives and experiences." 

Indeed! 

Tyler Durden Wed, 02/25/2026 - 14:45

CME Halts All Metals, NatGas Markets Due To "Technical Issues"

CME Halts All Metals, NatGas Markets Due To "Technical Issues"

At around 1300ET, the Chicago Mercantile Exchange (CME) halted trading of all metals and NatGas contracts (futures and options) due to 'technical issues'.

Additionally, all day orders and GTDs with today’s date will be cancelled.

All GTCs that have been acknowledged will remain working.

Since the halt, spot prices for gold have declined...

NatGas futures trading has re-opened (lower)...

CME says that Globex Metals futures and options markets will Pre-open at 13:31 Central Time and Open at 13:45 Central Time.

Developing...

Tyler Durden Wed, 02/25/2026 - 14:26

Yen Tumbles After Takaichi Nominates Two Prominent Doves To The BOJ

Yen Tumbles After Takaichi Nominates Two Prominent Doves To The BOJ

It's not just Trump who is stacking his central bank with uberdoves.

After plunging yesterday following a Mainichi report that Japanese Prime Minister expressed concerns at more BOJ rate hikes, the yen has tumbled more, sending the USDJPY as high as 156.80 this morning, the highest since Feb 9, after the Takaichi administration announced two nominees to succeed the outgoing BoJ Policy Board members later this year, both of whom have a history of dovish commentary.

Toichiro Asada was presented as a successor to Asahi Noguchi (whose term ends on March 31st), and Ayano Sato has been presented as a successor Junko Nakagawa (whose terms ends on June 29th).

In both cases, the nominees’ comments over recent years had leaned towards a pro-reflation and pro-accommodative-policy stance, though neither has directly opined on the current stance of BoJ policy as of yet, according to Goldman's Stuart Jenkins. 

The outgoing Board members Noguchi and Nakagawa are both generally seen as being on the dovish end of the committee though, arguing for a more limited compositional shift in the Board’s policy preferences, though Goldman economists see the announcements as slightly lowering the odds of an H1 hike (versus their base case of July).

Policy speeches from the two nominees will be key to assessing their appetite or resistance to further hikes, but markets are likely also deriving some signal from the nominations as a ‘litmus test’ for PM Takaichi’s own policy preferences, with economists acknowledging the hurdle to policy tightening that government influence may present. 

Goldman adds that pricing around a more concerted exit from Japan’s real rate regime was a key ingredient to the Yen’s post-election rebound, but a dovish BoJ disappointment ahead remains an important risk to that, including if the Yen’s reaction itself lowers the BoJ’s urgency for hikes.

While the increased role of a fiscal risk premium across Japanese assets has driven a divergence between USD/JPY and US-Japan rate differentials (see first chart below), the pair has still exhibit a fairly high beta to front-end rate differentials (second chart below), which are increasingly coming from the Japan leg (third chart below).  

Charts of the Day: A rising Japan fiscal risk premium prior to the lower house election helps explain the recent disconnect between USDJPY and rate differentials.

USD/JPY’s beta to daily shifts in long-end rate differentials have become more muted over the past year relative to the post-YCC 2024 period – consistent with more frequent episodes of shifts in Japan’s fiscal risk premium that pushes on the Yen and JGBs in the same direction – while the pair has exhibited a higher sensitive to shifts in front-end rate differentials.

The BoJ’s hiking cycle has come alongside a gradual increase in implied Japan rates vol relative to the US, arguing for an outsized contribution from price action in Japan rates to the Yen.

Tyler Durden Wed, 02/25/2026 - 13:40

Subpar 5Y Auction Sees Biggest Tail Since July 2025, Bid to Cover Slides

Subpar 5Y Auction Sees Biggest Tail Since July 2025, Bid to Cover Slides

After yesterday's 2 Year auction, moments ago the Treasury sold its second coupon for the week when it auctioned off $70BN in 5 Year paper in a rather lackluster auction. 

The auction priced at a high yield of 3.615%, down from 3.823% a month ago, and the lowest since November; it also tailed the When Issued 3.608% by 0.7bps, the biggest tail since last July.

The bid to cover was ugly, dropping to 2.32, down from 2.34 and the lowest since July 2025.

The internals were fractionally better, with foreign demand clearly there as Indirects took down 62.5%, up from 60.7% and the highest since October. And with Directs awarded 24.7%, down from 28.5% and the lowest since October, Dealers were left holding 12.8%, up from 10.8% last month and above the recent average of 10.1%.

Overall, this was a subpar auction, with a surprisingly big tail and sliding bid to cover, yet it could have been far worse if foreign bidders did not show up. Luckily, they did, and prevented a much worse outcome.

Tyler Durden Wed, 02/25/2026 - 13:20

Schumpeter Didn't Have This Level Of Destruction In Mind

Schumpeter Didn't Have This Level Of Destruction In Mind

By Michael Every of Rabobank

The tendency for the rate of things to fall

Markets are trying to get past a report on how devastating AI could be for employment. There are push-backs: it ignores resource constraints and Schumpeterian creative destruction, and echoes Marx’s Tendency for the Rate of Profits to Fall. Yet Anthropic just released desk-top plug-ins plugins aimed at HR, design, engineering, ops, financial analysis, investment banking, equity research, private equity, and wealth management, e.g., it can do all the analysis in a spreadsheet, write the report on it, and make the presentation. It seems illogical this won’t see a surge in unemployment even if AI still makes key errors that require experience to spot – the youngest cohort of workers will miss out, meaning they don’t get the experience needed to be useful later.

That’s with existing resources; Schumpeter didn’t have that level of destruction in mind for creatives; and while Marx was wrong, the period post the release of Das Kapital wasn’t one of social stability. Even Bank of England Chief Economist Pill just told Parliament, “My daughter is struggling to find work too,” though he blamed Labour’s taxes on business. The Fed’s Bostic yesterday said he didn’t think the AI threat required rate cuts as a solution even though they have an inflation AND employment mandate. Then again, Bloomberg reports the AI memory shortage may add up to 0.2 percentage points to US CPI, underlining the resource constraint view.

If employment may have a tendency to fall, sadly so do bombs. Russia threatened the UK and France with nuclear strikes after alleging the pair were trying to get a nuclear weapon or dirty bomb to Ukraine: the financial media didn’t notice. It warned of plots to destroy gas pipelines through the Black Sea, following that of the Druzhba oil pipeline to Slovakia this week, which the financial media also didn’t notice. Notably, the US also warned Ukraine not to blow Russian assets up that threaten its economic interests there. Elsewhere, Europe’s VDL insisted the EU would get round Hungary’s veto to deliver Ukraine’s €90bn loan, and an EU Commissioner stressed they were looking at ‘non-standard’ tactics to get Ukraine in faster. Also add Iceland and Montenegro, and won’t consensus EU decision making be harder to achieve, and Russia frictions rise?

In the Middle East, 11 US F-22s are now on the ground in Israel, as Reuters reports Iran is close to buying Chinese supersonic anti-ship missiles. Embassies are sending warnings to their citizens around the region; Turkey is preparing to prevent an Iranian refugee surge at its border. Yet Indian PM Modi will address the Knesset today at 4:30PM local time to signal a strategic trade, tech, and defence alliance (relatedly, Somaliland’s president announced he will make his first official Israel visit in March). It remains to be seen when this war might begin --today, or after market close Friday?-- or what then happens, but such an outcome looks more likely than a sudden Peace For Our Time deal. Either way, the impact on energy prices will be notable – either sharply up or sharply down.

In Asia, supplies of key goods have a tendency to fall: China just cut off 20 major Japanese firms off from critical minerals over “remilitarisation” – or, to put it another way, the rapid rearmament the US is pushing allies to embrace. Rather than confront the US directly ahead of a Xi-Trump summit, Beijing --angry with Takaichi-- is again testing US resolve via that channel. Taiwan’s ruling and opposition parties also just agreed to advance President Lai's $40bn special defence budget after months of deadlock: that’s going to be another pressure point given the pledged $20bn of US arms sales to it. How much room does the US have to placate China without showing its allies that it doesn’t stand behind them?

In related geoeconomics, tensions don’t have a tendency to fall: US officials warn of “deep distrust” even as they are trying to stabilize China ties ahead of that key summit. Relatedly, Bloomberg reports a $112bn gap between what China claims it’s exporting to the US and what the US says it’s buying – almost all of it is seen as due to tariff evasion.

German Chancellor Merz is in Beijing seeking “reliable and fair partnership” and to urge China to curb “unfair trade practices” amid his economy’s deindustrialisation. However, the heuristic shows net importers (as Germany now is vs China) only have the ability to pressure net exporters with the threat of tariffs. Berlin, unlike France, is opposed to them – so, what instead?

Europe is closing in on a Mexico trade deal… as the latter grapples with cartel violence and is perhaps months from being locked into a new North American trade deal with a de facto common external tariff directed by the US, as we already see with Mexican tariffs on Asian imports. Similar to the EU-Mercosur deal Europe hasn’t yet agreed to, there is an underlying clash with the realpolitik of the Donroe Doctrine ahead.

The US is eyeing Pentagon AI for its new critical minerals trade bloc’s pricing. It remains to be seen how this will work given the noted disconnect between resource availability and AI, but watch this space… and “because markets” it isn’t. Neither is China’s soon-to-be-announced new energy strategy, which will place its own security at the heart of all future development.

On the other hand, US Secretary of War Hegseth is at war with Anthropic and has given it an ultimatum. Reportedly, he has told the firm that he could not just strip it from the US defense sector if it won’t give him full access, but also label it a supply-chain risk, like Chinese firms, or invoke the Defence Production Act to force it to work with the Pentagon. For anyone but the “because markets” crowd, this kind of outcome was always obvious: new technology has historically always been centred on the military first or been driven by it.

Meanwhile, in Australia CPI doesn’t have a tendency to fall, despite pre-AI RBA models saying it would. In January, seasonally adjusted CPI was 0.5% m-o-m and remained unchanged at 3.8% y-o-y, with the largest contributors being housing (6.8%), food and non-alcoholic beverages (3.1%) and recreation and culture (3.7%). Trimmed mean inflation was 3.4% y-o-y, up from 3.3%. That almost certainly locks in a 25bps rate hike in May after the next round of quarterly CPI data are out. (And note Australia doesn’t have any tariffs: the US, with its controversial tariffs, has headline CPI of 2.4%. What do pre-AI economic models and modellers have to say about that?)

In politics, there are numerous headlines pointing to our volatile times, e.g., the Australian PM being evacuated from his Canberra residence for security. Moreover, in the US State of the Union President Trump: reiterated an aspiration to replace income tax with tariff revenue; proposed shifting subsidies from health insurers to consumers; underlined the prices of US prescription medicines are lowered by increasing the prices in other economies; stated AI datacentres will pay separate, higher electricity prices; flagged opening up the retirement scheme available to federal workers to the private sector; argued to prevent members of Congress from profiting from inside information (“Did Nancy Pelosi stand up if she’s here?”); announced a new War on Fraud under VP Vance; pushed the SAVE America Act which enforces proof of ID to vote; and claimed that 35 million people told him that the Prime Minister of Pakistan would have died in a war with India if not for his involvement. We didn’t get anything on aliens (I’m not joking).

However, Trump underlined that while he prefers diplomacy, Iran is continuing with its “sinister plans” and is refusing to say, “We will never have a nuclear weapon” - and he will never allow them to have one. That sounds like certain headlines may fall on market screens in the near future even if that rhetorical --and literal-- bomb wasn’t dropped at the end of the SoTU, as some had thought could complete its political theatre.

Tyler Durden Wed, 02/25/2026 - 13:20

"Do You See What Happens Larry...": Summers Out At Harvard After Epstein Scandal

"Do You See What Happens Larry...": Summers Out At Harvard After Epstein Scandal

Who could have seen this coming?

Aug 2019: Clinton Treasury Secretary Larry Summers Rode On Epstein's 'Lolita Express'

The former Harvard President and Clinton-era Treasury Secretary has been cited four times on the flight logs of Jeffrey Epstein's 'Lolita Express'. During his first trip, he was still working in the Clinton administration. And during his most recent - in 2005 - he and his wife accompanied Epstein to Epstein's private island just days after their wedding.

During his first trip on Sept. 19, 1998, (while he was Treasury Secretary) Summers flew from the airport in Aspen, Colo. to Dulles international.

His second trip didn't take place until April 15, 2004, when Summers flew from JFK to Bedford, Mass., an airport not far from Harvard, where he was president of the university at the time.

On his third trip, Summers flew from Bedford to White Plains for reasons that are unclear.

And during his fourth trip, Larry and Lisa Summers flew from Bedford to Epstein’s Island, and were accompanied by Epstein’s close confidant and alleged Madam Ghislaine Maxwell.

...and here, here, and here...

All of which led to the former Harvard President Larry Summers resigning from his academic and faculty appointments at Harvard at the end of the academic year, relinquishing his University Professorship - Harvard’s highest faculty distinction - and remaining on leave until that time, a Harvard spokesperson confirmed to The Crimson.

The Crimson reports that Summers also resigned Wednesday from his role as co-director of the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School, a position he has held since 2011, according to the spokesperson. He will not teach or take on new advisees.

The resignation marks an extraordinary unraveling for Summers, long one of the most influential figures in American economics. His career spanned prize-winning research, service as United States Treasury Secretary, and the presidency of Harvard.

In a statement to The Crimson, Summers wrote that the decision to leave was “difficult” and that he remained “grateful to the thousands of students and colleagues I have been privileged to teach and work with since coming to Harvard as a graduate student 50 years ago.”

Summers, who has been on leave since November, appeared hundreds of times in newly released Epstein files.

The correspondence between Summers and Epstein - which tallies thousands of emails and phone calls - revealed an intimacy that far exceeded the bounds of a professional relationship. 

In the emails, Summers appears to ask Epstein for advice on pursuing a romantic relationship with a woman that he describes as a mentee.

In one message from 2018, Epstein refers to himself as Summers’ “wingman”.

Furthermore, in late December, a second tranche of Epstein-related records released by the Justice Department revealed that Summers had been designated as a successor executor in a 2014 draft of Epstein’s will, positioning him to oversee the financier’s estate if the primary executors were unable to serve. 

Quoting from The Big Lebowski, we comment that "you see what happens Larry..." when you correspond with a convicted pedophile.

Who's next?

Tyler Durden Wed, 02/25/2026 - 13:00

Ethereum Foundation Starts Staking ETH As Client Diversity Concerns Persist

Ethereum Foundation Starts Staking ETH As Client Diversity Concerns Persist

Authored by Christina Comben via CoinTelegraph.com,

The Ethereum Foundation has begun staking part of its treasury, turning one of Ethereum’s most influential entities into a direct economic participant in network consensus.

According to a Tuesday post on X, the foundation deposited 2,016 Ether and plans to stake about 70,000 in total, with all rewards flowing back into its treasury to fund protocol research and development, ecosystem development and grants.

​In its announcement, the foundation stressed that new validators were being operated using open-source infrastructure, Dirk and Vouch, originally developed by Attestant and now part of Bitwise’s institutional staking stack. 

Dirk acts as a distributed signer, while Vouch serves as a validator client, allowing keys and operations to be split across multiple jurisdictions and operators rather than concentrated in a single machine or provider. 

The Ethereum Foundation has started staking its ETH. Source: Ethereum Foundation

Chris Berry, head of Ethereum onchain engineering at Bitwise Onchain Solutions, told Cointelegraph that Vouch and Dirk were “built with the mindset to fulfill the duties of an honest validator in the safest way possible,” with an emphasis on client diversity, non-custodial control and compliance.

Avoiding single points of failure

According to the foundation, this setup was designed to avoid a “single point of failure” and to reflect best practices for secure, non-custodial staking.

Crucially, the Ethereum Foundation says its configuration “employs minority clients” alongside a mix of hosted infrastructure and self-managed hardware in several jurisdictions. 

For Berry, those properties “really align with the core values of Ethereum,” and the EF’s adoption shows that the team is “confident in the implementation and stewardship of the software.”

The choice is also significant in the context of long-running concerns that Ethereum’s client ecosystem and validator set could become overly dependent on a handful of dominant implementations and centralized cloud providers. 

By explicitly opting for a minority client-heavy stack, the foundation appears to be using its own staking footprint to model what it wants large institutional validators to do.

Ethereum staking concentration concerns  

The move comes as Ethereum staking continues to grow and professionalize. Around 30% of the ETH supply is now staked, with liquid staking protocols and large custodians, such as Lido and Coinbase, still controlling a sizable share of validators and effective voting power. 

This has raised recurring questions about how much decentralization Ethereum can retain as more capital flows into highly optimized, institution-run staking operations.

Berry stressed that Ethereum had “always prioritized decentralization and security” at a protocol level, and that there were “many mechanisms” to ensure that Ethereum would “remain secure if large amounts of stake want to leave or do not perform their duties appropriately.”

He added that institutional staking was “very competitive,” and that allocators were increasingly focused on properties such as client diversity, infrastructure resilience and validator performance.

Tyler Durden Wed, 02/25/2026 - 12:45

Trump To Iran: War Can Be Averted If It Says "Those Secret Words"

Trump To Iran: War Can Be Averted If It Says "Those Secret Words"

Among the most important foreign policy statements of President Trump's during his annual State of the Union address to a joint session of the Senate and House of Representatives Tuesday night came in discussing his Iran red lines.

"We are in negotiations with them. They want to make a deal, but we haven't heard those secret words: 'We will never have a nuclear weapon.'" This 'challenge' underscores that at this point it may not matter at all what Iran actually says or does, as Washington is on the war path. See the words of Iranian Foreign Minister Seyed Abbas Araghchi issued before Trump's speech - he laid out precisely this pledge using the "secret words" several hours before the world knew what Trump would say... 

The top Iranian diplomat had declared that it was "crystal clear" that "Iran will under no circumstances ever develop a nuclear weapon. Araghchi followed with: "We have a historic opportunity to strike an unprecedented agreement that addresses mutual concerns and achieves mutual interests. A deal is within reach, but only if diplomacy is given priority," in the statement on X.

Trump during his speech also agreed that his "preference" is "to solve this problem through diplomacy, but one thing is certain: I will never allow the world’s number one sponsor of terror, which they are by far, to have a nuclear weapon."

Iran has after the fact slammed Trump's statements as false, stressing that it has on several occasions very clearly pledged to never purse a bomb. Some pundits are saying Trump's words were hyperbolic to express a point - that in reality it must be more than just a verbal pledge, as Washington is demanding a comprehensive legal commitment to not build a bomb.

"Iran reaffirms that under no circumstances will Iran ever seek, develop or acquire any nuclear weapons."

--JCPOA (Preamble and General Provisions, para. iii)

Trump Tuesday night reiterated that Iran's nuclear program had been 'obliterated' - and so it presents the contradiction of the US wanting to once again wipe out a nuclear program which the administration says is actually no longer there.

"We wiped it out and they want to start all over again," Trump said in the address. "And they’re at this moment again pursuing their sinister ambitions."

Of the June 2025 US and Israeli attacks on nuclear sites, Trump continued "they were warned to make no future attempts to rebuild their weapons program, in particular, nuclear weapons – yet they continue."

Trump asks of Iran that it must utter the 'secret words'...

While Iranian officials have this week said they're willing to do anything for a deal, there's also a creeping fear in Tehran that if they cede too much, the country's enemies will smell blood in the water and attack anyway. Iranian leadership fears it's in a lose-lose situation, and so if attack - however 'limited' a strike might be - would feel the need to hit back as hard as possible. This could be a recipe for stumbling into all-out war.

Tyler Durden Wed, 02/25/2026 - 12:25

One In Five California Home Sales Canceled Due To Unaffordable Insurance

One In Five California Home Sales Canceled Due To Unaffordable Insurance

Authored by Mike Shedlock via MishTalk.com,

Ponder a $44,000 insurance bill. This does not count as inflation in the CPI.

Dysfunction in California’s Insurance Market

The Wall Street Journal reports A $44,000 Bill Shows the Dysfunction in California’s Home-Insurance Market

Glenn and Lorraine Crawford paid about $500 a month to insure their home in Agoura Hills northwest of Los Angeles when they bought it in 2012.

The Crawfords say they have little alternative but to pay the bill that arrived last month, which, at more than $44,000 a year, is almost as much as their mortgage bill. The only other insurer willing to cover their home, Lloyd’s of London, quoted them $80,000 a year.

More than a year after infernos tore through Los Angeles County, millions of Californians like the Crawfords are suffering through a home-insurance crisis that has rolled on for years with eye-watering rate increases, canceled policies and rejected claims.

Two of the biggest insurers, State Farm and Allstate, aren’t selling to new customers in the state, despite getting double-digit rate increases approved for their existing policyholders. A third, Farmers Insurance, has committed to cover more homes in fire-prone areas, but only a fraction compared with the drop in its overall number of policies since the crisis began.

The insurance dysfunction has spread to California’s housing market, the country’s biggest and most expensive, with nearly one-in-five real-estate agents reporting a canceled sale last year because of clients unable to find affordable insurance, according to a survey by the trade body California Association of Realtors.

The roots of California’s insurance crisis go back years. The state’s tough rate caps kept premiums low. But home insurers eventually balked, saying they couldn’t charge enough to cover rising wildfire and other losses, made worse by climate change and development. Insurers didn’t renew tens of thousands of policies, especially in fire-prone areas.

California’s uphill battle to draw insurers back could prove a template—or cautionary tale—for other disaster-prone states. New rules implemented last year, for instance, require home-insurers in the state to pledge to sell new policies in high-risk wildfire zones, in return for allowing them to charge higher rates.

As part of a request for a 6.99% rate increase, Farmers, the second-biggest home-insurer in the state, pledged to add at least 5,596 policies in high-risk areas by September 2028. That is less than a 10th of the 59,806 reduction in Farmers’ total number of California home-insurance policies in the previous two years, according to a Consumer Watchdog analysis.

Others continue to shun the state despite winning big concessions. California regulators approved a 34% rate increase for Allstate in 2024. Yet it has no “growth aspirations” in California home insurance, Chief Executive Tom Wilson said last year, adding that it would take time to fix the market. A spokesman said that remains Allstate’s position.

The disaster also almost felled California’s biggest home insurer, State Farm General. Lara last year backed an emergency 17% rate increase to keep the State Farm subsidiary afloat. “We’re on the Titanic, and we see the iceberg,” one of Lara’s lawyers told a hearing last year.

Truflation BS

Meanwhile, Truflation reports an absolutely absurd year-over-over year inflation rate of 0.87 percent.

Faster Nonsense

Truflation is nothing but more timely nonsense. Like the BLS and BEA, Truflation does not factor in homeowner’s insurance or property taxes.

Truflation’s measure of rent are ridiculous. Truflation has too high a weight on new leases rather than existing leases. Existing leases are close to 90 percent of the market.

While the price of new leases is falling in some areas, existing leases are moving much slower.

Neither the BLS nor BEA weigh food properly. I strongly suspect Truflation doesn’t either.

I don’t doubt that Truflation has better and more timely collection methods than the BLS, but like the rest of the inflation models, it’s nonsense.

Economists don’t understand why people are upset. The answer is obvious. When you exclude real prices people pay, all you are offering is garbage.

We don’t need better measures of nonsense, we need better measures of reality, and Truflation sure isn’t it.

Food at Home vs Away

Note the BLS food weights for home vs away are reversed from where people actually spend their money.

For more details, please consider Where Do You Spend Money on Food? How Screwed Up Are the BLS Weights?

Does the BLS match your budget?

Homeowners Insurance

On August 11, 2025, I asked Is Homeowners Insurance Understated in the CPI? Shop Around!

Our Insurance went up by $2,000. Then another $2,000. Here’s our story.

What’s the Insurance Weight?

The BLS says shelter is 35.473 of the CPI. Of that, Tenants’ and household insurance is allegedly 0.414 percent.

Sound right?

If you own a home, what percent of your income is spent on your homeowners’ insurance?

Under 1/2 of 1 percent?

ON January 14, I noted The Fed Has Missed Its Inflation Target on Ten Different Measures

The Atlanta Fed tracks various inflation targets. Let’s have a look.

Does that match your experience or does Truflation?

And none of the measures include homeowners insurance. It’s all nonsense, yet economists believe it.

Tyler Durden Wed, 02/25/2026 - 12:05

On Gold, Oil, & Uranium

On Gold, Oil, & Uranium

LIVE NOW:

Billionaire natural resources investor Rick Rule, legendary short-seller Bill Fleckenstein, and veteran oil trader Erik Townsend join ZeroHedge this evening at 7PM ET to give their outlooks on three key commodities sectors: Gold, Oil, and Uranium.

Gold and silver have, of course, exploded in price over the last 52 weeks with gold’s price almost doubling and reaching a high of over $5500.

Silver’s price more than tripled at one point and now sits ($87.50) just under 3X where it sat in February of last year ($32.93).

Given the fast and intense rise, Rule recently reduced his silver position though remains long mining stocks.

Time to Rotate into Oil?

Oil on the other hand is down YoY, making it perhaps the most attractive commodity due to it being relatively cheap.

Oil stocks are Rule’s number one investment position due to what he says is decades of massive underinvestment, a thesis he will expand upon this evening.

Lastly, uranium mining stocks have seen a meteoric rise rivaling that of gold stock, broadly doubling with some names like Energy Fuels seeing an almost 400% increase YoY.

Townsend will speak to the emerging technology in the nuclear energy space and Rule will speak to the long-term bull case and whether the mining stocks have flown too high too fast.

We encourage commodity investors to tune in.

Visit the ZeroHedge homepage at 7pm ET tonight to watch live and commercial-free.

Or follow our Spotify and YouTube to watch after it airs.

Tyler Durden Wed, 02/25/2026 - 11:45

Software Stocks: Navigating The SaaSpocalypse

Software Stocks: Navigating The SaaSpocalypse

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

The recent rotation from growth to value is well documented. While the return divergences between, for instance, technology stocks and materials or industrials stocks are significant, they do not tell the whole story. There are also extreme return differentials between broad industries and their sub-industries.

In this article, we address one such divergence between the broad technology sector and the software-as-a-service (SaaS) sub-industry. The graph below shows the wide gap in returns between software, technology, the Nasdaq 100, and semiconductor stocks. Since the well-followed software ETF (IGV) peaked on September 19, 2025, it has fallen 30%. For context, the broad technology indexes (XLK and QQQ) are flat over the period, and the semiconductor ETF (SMH) is up 30%.

Narratives Drive Passive Flows

Behind every good stock or index move is a narrative. The narrative is the market’s collective explanation for why prices move. Most narratives have some truth, some degree of speculation, and include some falsehoods. The job of an individual or professional investor is to understand the narratives driving money flows, assess their accuracy, and trade accordingly.

As if evaluating the validity of narratives weren’t hard enough, we must also consider that many narratives are, to some degree, based on expectations, in which no one knows what the future holds with certainty.

The bearish software narrative, known as “SaaSpocalypse,” which is the market rationale for big drawdowns in many software stocks, has some truths, lots of speculation, and falsehoods. Let’s explore the narrative, some counterpoints, and assess whether software stocks are a steal or, as some claim, on their way to zero.

The SaaSpocalypse Narrative

The “SaaSpocalypse” story holds that the current AI wave poses a significant threat to traditional software companies because AI changes how software is built, delivered, and priced.

If generative AI can write code, automate workflows, and rapidly and cheaply create customized applications, the value of today’s established off-the-shelf software products declines, and in some cases, may approach zero. Instead of paying for software and recurring subscription fees, enterprises and individuals may soon be able to build their own software easily and cheaply.

As if that weren’t enough of a threat to traditional software companies, AI lowers barriers to entry, enabling more competitors to quickly replicate existing software. More competition should compress profit margins and weaken the “moats” that once protected large software firms.

Rebutting The Narrative

The primary rebuttal to SaaSpocalypse is that the value of software lies beyond the code. Enterprise SaaS companies derive their lasting power from durable moats such as network effects, high switching costs, proprietary data, compliance infrastructure, and trust. AI-created software or a competing software product from an AI-driven startup might replicate the look and feel of a software program, but it cannot recreate years of customer data, deep integration with other core systems, and, importantly, the confidence required for corporate deployments. Essentially, the rebuttal argues that the narrative fails to distinguish between the look and feel of software and the other attributes that can make it valuable.

Moreover, the narratives ignore that AI will help existing software companies improve their products, reduce costs, and, in some cases, make their moats even more durable. Current software producers have a huge leg up because they already have distribution networks, a customer base, and staff who understand the intricacies of their product and how customers use it.  

However, the rebuttal may not apply to all software companies. Each software product and company should be judged according to its own merits. Basic, generic products that can be easily programmed with AI are more likely to be replaceable than well-distributed products with significant usage and data connections within companies.

Strong Moats

We asked ChatGPT for examples of Saas companies with strong moats and received the following:

ServiceNow — Workflow + Enterprise System Depth

Why the moat holds up:

  • Deeply embedded into ITSM, HR, security, and enterprise workflows — replacing it means re-architecting internal operations, not just swapping software.
  • AI agents actually increase their value because orchestration becomes more important than standalone apps.
  • Enterprise workflows contain thousands of hidden rules and dependencies that are hard for AI copilots to replicate. Research shows LLMs struggle with these types of opaque enterprise systems.

Salesforce — Data + Ecosystem Lock-In

Why it’s durable:

  • Massive installed enterprise base + heavy customization.
  • CRM data accumulation over many years = high switching friction.
  • Ecosystem moat (partners, integrations, internal workflows, apps).

Even though AI can generate workflows or lightweight CRMs, enterprises still need:

  • permission structures
  • compliance layers
  • enterprise data governance

Datadog — Observability Data Moat

Why this one stands out:

  • Continuous telemetry ingestion creates a proprietary “data exhaust.”
  • AI needs observability platforms — agents can’t fix or optimize what they can’t measure.
  • Integrated logs + metrics + traces across thousands of systems = massive operational switching costs.

AI may help explain incidents, but it doesn’t replace the monitoring layer itself.

Opportunities In SAAS Stocks

We led this article with a graph showing the software ETF IGV’s gross underperformance relative to the broader technology sector. We now dig deeper to help form short-term return expectations for SaaS companies.

XLK vs IGV

The first analysis compares the software ETF IGV to the broad technology sector ETF XLK.  Within the top ten holdings of XLK, Microsoft and Palantir are the only two that are also in the top ten holdings of IGV.

The graph below shows the price ratio of the two ETFs (IGV and XLK). As shown in red/green, the most recent 100-day price ratio change is almost 4 standard deviations from the norm. 

The second graphic uses the last five years to also show how detached the sturdy relationship has drifted recently. Per the most recent weekly readings (green), either XLK is 10% overpriced, or IGV is 10% underpriced.

The statistical divergence is also significant when comparing IGV to SPY (S&P 500).

For fundamental context, we share the graph below from the Daily Shot. The P/E ratio of the software sector has fallen rapidly over the last few months, from 34 to 24. For context, the utility sector has a P/E ratio of 21.

Lastly, we present the year-to-date returns of IGV’s top 10 holdings. Based solely on the returns below, the market is betting that INTU and APP have the weakest moats and that PANW and CRWD are potentially the least negatively affected by potential AI competition.

Summary

Like most narratives, the SaaSpocalypse has some truth and some falsehoods. There is also a large degree of speculation buried within it. Furthermore, the truth shouldn’t be applied broadly to all software companies and their products. In fact, AI will make some software companies more profitable and strengthen their moats. Other companies may fail as competition becomes fierce. The goal for an investor is to figure out who the winners and losers will be. Such is not a simple task, but doing so can provide significant rewards if your research proves correct.

We caution that market rotations have been volatile, with many relationships, like those shown earlier, statistically very stretched. While that may provide comfort for some, we are also aware that in markets like this, where narratives are as strong as they are, relationships can become even more divergent. If you are inclined to buy into the software sector, we recommend taking small starter positions with a stop-loss level in mind. This way, if you are early, the losses are minimal. If the rotations start favoring software stocks and the narrative fades, such evidence may warrant increasing the starter positions. Trade with caution.

Tyler Durden Wed, 02/25/2026 - 11:25

Democrats Talk Affordability, Immigration In Rebuttal To Trump SOTU

Democrats Talk Affordability, Immigration In Rebuttal To Trump SOTU

As usual, the opposing party was ready with a rebuttal to the President's State of the Union address last night. 

Virginia Gov. Abigail Spanberger delivers the Democratic response to President Donald Trump’s State of the Union address in Williamsburg, Va., on Feb. 24, 2026. Mike Kropf/Getty Images

Speaking from the House of Burgesses in Colonial Williamsburg, Virginia Gov. Abigail Spanberger focused on affordability and immigration.

"As we watched our nation’s lawmakers gather for a joint session of Congress, we did not hear the truth from our president," she said, adding that Trump had "offered no real solutions to our nation's pressing challenges." 

"The United States was founded on the idea that ordinary people could reject the unacceptable excesses of poor leadership, band together to demand better of their government, and create a nation that would be an example for the world," she continued. "This year, as we celebrate 250 years since America declared independence of tyranny, I can think of no better place to speak to you as we reflect on the current state of our union tonight." 

Spanberger, a former US representative and member of the House Intelligence Committee, became the governor of Virginia last November by a 15-point margin. 

Last night she asked: "Is the president working to make life more affordable for you and your family? Is the president working to keep Americans safe, both at home and abroad? Is the president working for you?"

As the Epoch Times notes further, Spanberger covered the following topics:

Economics

Most of Spanberger’s speech focused on economic issues, with the governor describing Democrats as being “laser-focused on affordability.”

First, Spanberger decried what she described as Trump’s “reckless trade policies.”

Despite the Supreme Court’s recent decision overturning Trump’s authority to unilaterally impose certain kinds of tariffs, Spanberger said, “The damage to us, the American people, has already been done.”

Spanberger said these new tariffs represent “another tax hike on you and your family.”

“Republicans in Congress, they remain unwilling to assert their constitutional authority to stop him,” she said. “They’re making your life harder. They’re making your life more expensive.

Trump had said that tariff costs would not be passed onto consumers and that foreign countries are taking up the burden. He said tariffs can protect American businesses and jobs by addressing unfair trade practices and boosting domestic manufacturing.

Recently, an analysis of economic data by the Kiel Institute for the World Economy found that Americans paid 96 percent of Trump’s tariff fees in 2025. The non-partisan Tax Committee found that this added up to about $1,000 in new taxes per household in 2025.

Meanwhile, the annual inflation rate slowed to 2.4 percent in January, the lowest level since May, according to new Bureau of Labor Statistics data released on Feb. 13.

Core inflation, which strips out volatile energy and food prices, also eased to a 12-month rate of 2.5 percent, the lowest level since March 2021.

Spanberger also linked the affordability issue to the One Big Beautiful Bill Act, which included a nearly $1 trillion cut to Medicaid, a primary source of revenue for many of these types of hospitals.

“They’re even making it more difficult to see a doctor,” she said, citing rural hospital closures.

Immigration and Safety

Spanberger also discussed immigration enforcement and broader national security concerns.

Democrats’ concerns over the behavior of Immigration and Customs Enforcement (ICE) agents under Trump have been one of their primary objections to the administration.

“Our president has sent poorly trained federal agents into our cities where they have arrested and detained American citizens and people who aspire to be Americans, and they have done it without a warrant,” Spanberger said, citing the use of administrative warrants by ICE rather than court-granted judicial warrants to enter homes.

These agents, Spanberger said, “have ripped nursing mothers away from their babies. They have sent children, a little boy in a blue bunny hat, children, to far off detention centers,” Spanberger said. “They have killed American citizens in our streets, and they have done it all with their faces masked from accountability.”

More briefly, Spanberger also cited international concerns.

Trump, she said, “continues to cede economic power and technological strength to Russia, bow down to China, bow down to a Russian dictator, and make plans for war with Iran.”

She said that “through [Department of Government Efficiency] mass firings and the appointment of deeply unserious people to our nation’s most serious positions, our president has endangered the long, storied history of the United States of America being a force for good.”

Andrew Moran contributed to this report.

Tyler Durden Wed, 02/25/2026 - 11:05

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