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Coinbase CEO Cuts Workforce By 14% As AI Agents Take Over, Accelerate White-Collar Job Apocalypse

Coinbase employees woke up Tuesday morning to an email from the CEO announcing a workforce reduction of up to 14% as part of a broader push to make the crypto firm "leaner, faster, and AI-native."

CEO Brian Armstrong also released the letter on X, starting off the letter by saying:

Today I"ve made the difficult decision to reduce the size of Coinbase by ~14%. I want to walk you through why we're doing this now, what it means for those affected, and how this positions us for the future.

According to Coinbase's last annual report, the company had 4,951 employees. Today's 14% workforce reduction represents nearly 700 layoffs.

Armstrong said the restructuring was necessary because "two forces are converging at the same time," citing a crypto bear market and accelerating AI adoption as the drivers behind the layoffs:

Why now

Two forces are converging at the same time. We need to be front footed to respond to both.

First, the market. Coinbase is well-capitalized, has diversified revenue streams, and is well-positioned to weather any storm. Crypto is also on the verge of the next wave of adoption, with stablecoins, prediction markets, tokenization, and more taking off. However, our business is still volatile from quarter to quarter. While we've managed through that cyclicality many times before and come out stronger on the other side, we're currently in a down market and need to adjust our cost structure now so that we emerge from this period leaner, faster, and more efficient for our next phase of growth.

Second, AI is changing how we work. Over the past year, I've watched engineers use AI to ship in days what used to take a team weeks. Non-technical teams are now shipping production code and many of our workflows are being automated. The pace of what's possible with a small, focused team has changed dramatically, and it's accelerating every day.

All of this has led us to an inflection point, not just for Coinbase, but for every company. The biggest risk now is not taking action. We are adjusting early and deliberately to rebuild Coinbase to be lean, fast, and AI-native. We need to return to the speed and focus of our startup founding, with AI at our core.

That inflection point Armstrong talks about is the urgent need to replace white-collar workers with AI agents. He continued:

What this means

To get there, we are not just reducing headcount and cutting costs, we're fundamentally changing how we operate: rebuilding Coinbase as an intelligence, with humans around the edge aligning it. What does this mean in practice?

• Fewer layers, faster decisions: We are flattening our org structure to 5 layers max below CEO/COO. Layers slow things down and create coordination tax. The future is small, high context teams that can move quickly. Leaders will own much more, with as many as 15+ direct reports. Fewer layers also means a leaner cost structure that is built to perform through all market cycles.

• No pure managers: Every leader at Coinbase must also be a strong and active individual contributor. Managers should be like player-coaches, getting their hands dirty alongside their teams.

• AI-native pods: We'll be concentrating around AI-native talent who can manage fleets of agents to drive outsized impact. We'll also be experimenting with reduced pod sizes, including "one person teams" with engineers, designers, and product managers all in one role.

This is an email I sent earlier today to all employees at Coinbase:

Team,

Today I’ve made the difficult decision to reduce the size of Coinbase by ~14%. I want to walk you through why we're doing this now, what it means for those affected, and how this positions us for the…

— Brian Armstrong (@brian_armstrong) May 5, 2026

In markets, Bitcoin is trading more than 1% higher, approaching $81,000.

Coinbase shares rose 4% in premarket trading after Armstrong's X post on restructuring. As of Monday's close, COIN was still down 10% year to date, with shares halving from their 2025 high and recently finding support at $150.

Coinbase's workforce reductions should come as no surprise, given that readers have been well informed (read Goldman from 2023) for several years about the coming white-collar job apocalypse sweeping corporate America.

Microsoft AI CEO Mustafa Suleyman recently warned that most white-collar jobs will be fully automated in the next 12 to 18 months.

Tyler Durden Tue, 05/05/2026 - 08:35

Futures Jump As Dip-Buyers Return After After Iran Truce Holds

Stock futures are higher, completely reversing yesterday's drop with dip-buyers out in force as a fragile ceasefire between the US and Iran held after a day of clashes and sentiment is helped by a pullback in oil prices, with Brent crude futures down 1.4% as well as the US move to return 22 Iranian crew from a seized vessel. The conflict “might need to escalate in order to de-escalate,” making any market weakness a chance to add positions in stocks, according to JPMorgan strategists who said that today is shaping up to be an "Everything Rally." As of 8:00am ET, S&P 500 futures rise 0.3% while Nasdaq 100 contracts add 0.6%. In premarket trading, semis lead gains with Mag7 mostly higher. Cyclicals (ex-Energy) are outpacing Defensives, though healthcare is rallying. Bond yields are down 1-2bp with the 10Y yield dropping to 4.42% and the Dollar catching a bid. Commodities are seeing sales in Energy, precious metals retracing losses, and Ags mixed. US economic data calendar slate includes March trade balance (8:30am), April S&P Global US Services PMI (9:45am), April ISM services and March new home sales and JOLTS job openings (10am). Fed speaker slate includes Bowman (10am) and Barr (12:30pm)

In premarket trading, Mag 7 stocks are mostly higher (Amazon +0.6%, Microsoft +0.4%, Meta +0.2%, Alphabet +0.3%, Nvidia -0.01%, Tesla +0.3%, Apple -0.2%)

• Bullish (BLSH) slips 2% after agreeing to buy Equiniti from Siris Capital in a $4.2 billion deal as the crypto exchange seeks to expand in blockchain-based capital markets infrastructure.
• Coinbase (COIN) rises 3% after the crypto exchange said it will cut around 14% of its workforce, citing a need to manage costs in volatile markets and amid advances in artificial intelligence.
• Eaton (ETN) falls 5% after the power equipment company gave an outlook for second-quarter profit below what analysts expected.
• Fabrinet (FN) drops 11%, unable to push higher a 58% year-to-date rally after a third-quarter adjusted earnings per share beat.
• Fidelity National Information Services (FIS) gains 5% after the payments processor said it is co-designing a Financial Crimes AI Agent with Anthropic’s Applied AI team.
• Firefly Aerospace (FLY) climbs 11% after the space and defense technology company reported revenue for the first-quarter that beat the average analyst estimate.
• GeneDx (WGS) sinks 42% after the health care services firm missed first-quarter revenue estimates and cut full-year guidance. Analysts slash price targets.
• GlobalFoundries (GFS) gains 5% after posting revenue for the first quarter that matched the average analyst estimate.
• Inspire Medical (INSP) falls 18% after the medical devices company slashed its full-year revenue outlook, citing coding and reimbursement uncertainty for Inspire V, an implant to treat moderate-to-severe sleep apnea.
• Intel (INTC) rises 3% as Apple has held exploratory discussions about using the company — as well as Samsung Electronics — to produce the main processors for its devices in the US, according to people familiar with the matter.
• Iqvia (IQVA) falls 5% after the healthtech firm posted first quarter results.
• ON Semiconductor (ON) is down 4% after the chipmaker gave an outlook that is largely in line with expectations. Bloomberg Intelligence wrote that the forecast suggests a recovery in key markets will be slower than hoped.
• Palantir Technologies (PLTR) falls 3% even as the software company reported first-quarter results that beat expectations on key metrics, although US commercial sales disappointed. Separately, it raised its full-year forecast.
• Pinterest (PINS) jumps 17% after the social-media company reported first-quarter results that beat expectations and gave a full-year revenue forecast that is above the analyst consensus.
• Rockwell Automation (ROK) gains 8% after boosting its adjusted earnings per share guidance for the full year.
• Shopify (SHOP) falls 7% as the commerce software maker’s revenue outlook suggests growth pace may be slowing down.

In other corporate news, Michael Burry said he sold his entire position in GameStop after it made an offer to buy eBay for about $56 billion, citing concerns about the debt the company could take on for an acquisition. In AI news, ServiceNow projected it would generate $30 billion of subscription revenue in 2030, attributing the strong outlook to traction from its AI products. OpenAI discussed spinning out the company’s robotics and consumer hardware divisions late last year, according to the WSJ. And OpenAI co-founder and President Greg Brockman testified that his stake is now worth almost $30 billion, prompting an attorney for Elon Musk to ask why he had not donated the bulk of his earnings to the ChatGPT maker’s nonprofit foundation.

Relative calm returned to the Persian Gulf on Tuesday after US and Iranian forces exchanged fire the day before and Tehran launched missiles and drones toward the United Arab Emirates. Investors also found reassurance in the fact that a diplomatic push to resolve the impasse continued. While the war in the Middle East may be rumbling on, but JPMorgan’s Mislav Matekja says there are big differences to the 2022 playbook: He doesn’t expect to see stagflation in 2H as wage growth is moving lower. At the same time, equities aren’t complacent beneath the surface, with market breadth still narrow. 

Traders have also been cheered by the AI boom and earnings that are beating despite a “very high bar,” according to Deutsche Bank’s Binky Chadha. Stock purchases by the ultimate dip-buyer - Corporate America - are helping to underpin the equity market too.  forecast from Advanced Micro Devices Inc. later on Tuesday will offer new evidence of whether the spending wave on artificial intelligence is sustainable.

“Earnings remain the fuel for the US rally,” Madison Faller, global strategist at JPMorgan Private Bank, told Bloomberg TV. “The next question is whether earnings strength can broaden beyond technology. Portfolios need more than just one sector carrying the market.”

Still, concern about the war is showing up in other assets. WTI remains stubbornly above $100, while Goldman Sachs analysts wrote that the “speed of depletion and supply losses in some regions and products are concerning,” highlighting naphtha, jet fuel and liquefied petroleum gas. Diamondback Energy said it’s boosting crude output in response to rising prices caused by the war.

Meanwhile, 30-year Treasury yields remain a touch above 5% having hit the highest since July on Monday on inflation fears and concerns about higher government borrowing estimates.

In tech, Apple has held exploratory discussions about using Intel and Samsung to produce the main processors for its devices in the US, a move that would offer a secondary option beyond longtime partner TSMC. Meta is working on a financing package for a data center in El Paso, Texas, that could total roughly $13 billion, while Alphabet is selling bonds in the euro market just months after its last megabond deal.

Monday’s flareup of violence in the Middle East has injected fresh uncertainty after strong earnings from tech megacaps and gains in chipmakers pushed equities to a succession of records. The violence erupted after President Donald Trump announced “Project Freedom,” which he described as a humanitarian effort to guide stranded neutral ships.

“Project Freedom is a way for the US to gain an upper hand in negotiations,” wrote Mohit Kumar, chief economist and strategist for Europe at Jefferies. “In the coming days, it would become clear whether the US can provide safe passage to the ships and hence can take a much tougher stance.”

In politics, the chairs of key Senate committees unveiled legislation that would greenlight $71.7 billion in spending over the next three years for Trump’s immigration enforcement agenda. A top Senate Republican has proposed spending as much as $1 billion for US Secret Service security adjustments and upgrades, including for Trump’s planned White House ballroom

Of the 322 S&P 500 companies to have reported so far in the earnings season, 82% have beaten analysts’ forecasts, while 12% have missed.

In Europe, the Stoxx 600 is up 0.6% after a sharp selloff on Monday. Technology stocks are leading gains while travel is the biggest laggard. Earnings results have been mixed. AB-InBev shares are rising after first-quarter volume growth moved back into positive territory while HSBC dropped after it reported profit that missed estimates due to an unexpected UK fraud-related charge and rising economic risks from the conflict in the Middle East. EQT raised its offer for product-testing company Intertek to roughly £8.9 billion ($12.1 billion).  Here are the biggest movers Tuesday:

• AB InBev gains as much as 6.8%, the most since February 2025, after reporting a return to positive volume growth in the first quarter, ahead of expectations for a slight drop
• BT Group gains as much as 6.3% in London, the most since July, after BofA raised to buy from neutral, saying its fiber build is on the “final straight” with dividends expected to be the next re-rating lever
• UniCredit shares advanced 3%, the best performing stock on the Stoxx 600 Banks Index, after the Italia lender reported a record quarter with strong revenues. KBW analysts expect earnings to be well received
• Dormakaba shares gain as much as 5.9% after Oddo BHF upgraded the security systems provider to outperform from neutral, citing the company’s ability to partially close the profitability gap versus leader Assa Abloy
• Hugo Boss shares gain 3.4% after the German fashion designer posted first-quarter profits that outpaced expectations. Analysts say strong sales were driven by Asia, notably a return to growth in China
• HSBC shares declined as much as 5.6% in London trading after the lender missed estimates in the first quarter, weighed by higher costs and impairments
• Fresenius Medical Care shares drop as much as 9.4% to the lowest intraday level since October 2024, after the German company reported weak US dialysis volume for the first quarter
• Raiffeisen shares drop as much as 4.1% after the bank reported profits that missed expectations, which analysts said was due to higher provisions and taxes

Asian stocks retreated from their record highs after an exchange of fire between the US and Iran cast doubt on the durability of a four-week ceasefire. The MSCI Asia Pacific Index dropped as much as 0.6%, with TSMC and Delta Electronics among the biggest drags. Markets in Japan, South Korea and mainland China were closed for holidays. Investors are again turning cautious, as heightening tensions around the Strait of Hormuz drove oil prices higher and renewed fears of global inflation. The AI trade is taking a step back after helping the MSCI gauge erase war-led losses and climb to a record high on Monday. Meanwhile, Australia’s benchmark S&P/ASX 200 index ended Tuesday down 0.2%, but pared its earlier decline after the central bank indicated that it may pause interest-rate increases. The Reserve Bank of Australia raised the cash rate to 4.35% on Tuesday, unwinding all of last year’s cycle of monetary easing. 

In FX, the Bloomberg Dollar Spot Index is little changed. USD/JPY rises 0.2% to near 157.60 after a choppy European morning session.

In rates, treasuries advance, pushing US 10-year yields down 2 bps to 4.42%. Bunds also climb, led by shorter dated maturities. Front-end Treasuries hold small gains as futures retreat from session highs in early US session, leaving 30-year yield little changed near 5.02%. Rates are underpinned by lower oil prices as investors assess a tenuous four-week Middle East ceasefire. UK 30-year yield reached 5.76%, highest since 1998, as trading resumed after Monday’s holiday.US front-end yields are about 1bp richer on the day, steepening the yield curve slightly; 10-year is little changed near 4.44%. IG dollar issuance slate empty so far but expected to pick up after nine offerings totaling $8.35 billion were priced Monday. Issuers paid less than 2bps in new issue concessions on deals that were 4 times covered. Dealers project a weekly total of about $40 billion. US session features April ISM services report and March JOLTS job openings.

In commodities, WTI crude oil futures are down 1.4%, S&P 500 futures up 0.3%, with supported from cheaper oil as the Middle East ceasefire broadly holds. Precious metals gain with spot silver up over 1%. Bitcoin rises 1% and back above $80,000.

US economic data calendar slate includes March trade balance (8:30am), April S&P Global US Services PMI (9:45am), April ISM services and March new home sales and JOLTS job openings (10am). Fed speaker slate includes Bowman (10am) and Barr (12:30pm)

Market Snapshot

• S&P 500 mini +0.3%
• Nasdaq 100 mini +0.5%
• Russell 2000 mini +0.5%
• Stoxx Europe 600 +0.5%
• DAX +1%
• CAC 40 +0.6%
• 10-year Treasury yield -1 basis point at 4.43%
• VIX -0.5 points at 17.78
• Bloomberg Dollar Index little changed at 1196.35
• euro little changed at $1.1684
• WTI crude -1.9% at $104.38/barrel

Top Overnight News

• Trump’s desire to end the Iran war is being put to the test after Tehran fired at American warships on Monday and violently disrupted a U.S. effort to revive shipping in the Strait of Hormuz. Still, Trump wants to avoid a fresh bombing campaign, officials say, preferring a negotiated end to Tehran’s nuclear advancements and the weekslong war that has raised gas prices and hurt the global economy. WSJ
• U.S. intelligence assessments indicate that the time Iran would need to build a nuclear weapon has not changed since last summer, when analysts estimated that a U.S.-Israeli attack had pushed back the timeline to up to a year. The unchanged timeline suggests that significantly impeding Tehran's nuclear program may require destroying or removing Iran's remaining stockpile of highly enriched uranium, or HEU. RTRS
• Trump says war could stretch 3 more weeks, claims US 'already won.’ ABC
• Iraq is offering discounts for crude loaded this month, with tankers having to transit the Strait of Hormuz to collect the barrels. The discounts include as much as $33.40 a barrel for Basrah Medium crude, according to a notice from state oil marketer SOMO: BBG
• Trump said he’s looking forward to seeing Xi Jinping, signaling his plans for the high-stakes summit later this month are still on despite fresh tensions.
• Australia’s central bank has raised interest rates for a third time this year, bucking a trend among global peers as it fights inflationary pressures intensified by the conflict in the Middle East. The Reserve Bank of Australia on Tuesday raised its borrowing rate to 4.35 per cent. The move, its third consecutive rise, undid the effect of three cuts last year. FT
• SEC Chairman Paul Atkins said the agency is probing fraud allegations at private credit firms. BBG
• Switzerland’s inflation quickened to a 16-month high in April as energy costs jumped. Consumer prices rose 0.6% from a year earlier. BBG
• The US is weighing an executive order to create an AI working group and a review process for new models. NYT
• Apple Inc. has held exploratory discussions about using Intel Corp. and Samsung Electronics Co. to produce the main processors for its devices in the US, a move that would offer a secondary option beyond longtime partner Taiwan Semiconductor Manufacturing Co. INTC +380bps premkt. BBG
• Japan can conduct only two more sessions of three-day interventions by November to maintain its status of having a freely floating exchange rate, based on International Monetary Fund guidelines: BBG
• Ahead of Race to IPO, OpenAI Discussed Spinning Out Robotics, Hardware Divisions: WSJ
• The European Union has tools it can use if Donald Trump makes excessive threats to strategic industries, according to French Trade Minister Nicolas Forissier: BBG

Iran War

• US President Trump said Iran war could go on for another two to three weeks; time is not of the essence.
• IRGC military source told Tasnim that the US shot two small boats carrying civilians instead of shooting IRGC speedboats.
• "Iranian Defense Council member Ali Akbar Ahmadian: Our security does not accept negotiations, and Washington obstructed global navigation and energy security", Al Jazeera reported.
• Iranian President Pezeshkian has requested an immediate and emergency meeting with Supreme Leader Khamenei to ask him to stop IRGC attacks on Persian Gulf nations and prevent a recurrence, Iran International reported. Pezeshkian reportedly outlined that the IRGC attack on the UAE occurred without the knowledge of the government.
• US intelligence suggests strikes from the start of the war led to limited new damage to Iran's nuclear programme, Reuters sources say.
• US State Department official to Al Jazeera said the President is clear that direct communication between Israel and Lebanon is the best path toward peace; We are working to prepare the necessary conditions and political momentum to move forward with this
• Two US Navy destroyers transited the Strait of Hormuz and entered the Persian Gulf after navigating an Iranian barrage, according to defense officials who spoke to CBS News; "Iran launched small boats, missiles and drones against them".
• Maersk (MAERSKB DC) said its subsidiary's US-flagged vehicle carrier, Alliance Fairfax, exited the Gulf via Strait of Hormuz on May 4th.
• US Treasury Secretary Bessent had a "fierce row" with UK Chancellor Reeves last month over her outspoken criticism of the Iranian war, FT sources say.
• US CENTCOM posted "US warships and aircraft deployed to the Middle East are enforcing the naval blockade against Iran while executing Project Freedom to support the free flow of commerce through the Strait of Hormuz.".
• US officials say military closer to resuming combat operations than 24 hours ago, Fox reported.
• US President Trump reiterates he feels Europe has been "very disappointing".
• Iranian Foreign Minister Araghchi posted "As talks are making progress with Pakistan's gracious effort, the US should be wary of being dragged back into quagmire by ill-wishers. So should the UAE.". Full post:"Events in Hormuz make clear that there's no military solution to a political crisis. As talks are making progress with Pakistan's gracious effort, the U.S. should be wary of being dragged back into quagmire by ill-wishers. So should the UAE.Project Freedom is Project Deadlock.".
• Mehr News Agency said a fire broke out in two commercial ships and spread to two others in Dayyer port south of Iran; cause not clear.
• "Explosions were heard tonight in the port of Bandar Abbas (Iran) and on Qassem Island (Iran) in the Persian Gulf", N12 journalist reported citing sources in Iran.
• IRGC political deputy said traffic in the Strait of Hormuz will only be done with Iran's permission, ISNA reported; "Any kind of traffic in the Strait of Hormuz, if it is from the enemy, will be met with a decisive and crushing response".
• Iranian Parliamentary Speaker Ghalibaf said the new equation of the Strait of Hormuz is being solidified. Actions of the US and allies have threatened the security of shipping and energy.
• UNSC resolution prepared by the US, Saudi Arabia, Bahrain, Qatar, the UAE, and Kuwait opens the door for potential enforcement measures, AsharqNews reported citing the resolution "to be distributed tomorrow".

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded lower following a weak Wall Street lead, with liquidity thin amid widespread market holidays across Japan, South Korea, and Mainland China. ASX 200 was pressured by weakness in the metals sector, while Westpac declined after a miss in H1 net income. Focus also turned to the RBA, which delivered its third consecutive 25bps rate hike as expected. Hang Seng followed the negative tone, led lower by tech, while mainland markets remained shut, and Stock Connect flows were absent.

Top Asian News

• Foxconn (2317 TW) April (TWD): Revenue 832bln, +29.7% Y/Y. Q2 is expected to show both Q/Q and Y/Y growth.

European bourses opened mixed, but now display a clear positive bias alongside a move lower in crude prices this morning. The Euro Stoxx 50 (+0.9%) is the top performing index, whilst the FTSE 100 (-1%) is the clear laggard, as it returns from holiday and digests the recent US-Iran escalation. European sectors hold a positive bias this morning. Construction tops the pile, buoyed by post-earning strength in Geberit (+1.7%, robust results and sees strong demand across several markets). Chemicals and Financial Services complete the top three. To the downside reside Basic Resources and then Banks. The latter has been dragged down by losses in HSBC (-5%), after the Co. reported a Q1 profit miss and estimates higher than expected credit losses. Gains in UniCredit (+3%) are failing to lift the sector, with the Italian bank reporting strong profit and robust investment income. US equity futures are in the green this morning, and attempting to pare back some of the modest weakness seen in the prior session. Fed speak today includes Barr and Bowman. As for key movers today, Palantir (-2%, stronger results and lifted guidance, but US commercial revenue fell short of expectations). Elsewhere, ON Semiconductor (-4.7%, strong results, though missed on lofty expectations).

Top European News

• Swiss Inflation Rate YoY (Apr) Y/Y 0.6% vs. Exp. 0.6% (Prev. 0.3%, Low. 0.2%, High. 0.4%).
• Swiss Inflation Rate MoM (Apr) M/M 0.3% vs. Exp. 0.4% (Prev. 0.2%, Low. 0.2%, High. 0.7%).
• Spanish Unemployment Change (Apr) -62.7K vs. Exp. -18.6K (Prev. -22.9K).

FX

• DXY is steady and trades within a narrow 98.40 to 98.57 range, with geopolitical newsflow overnight relatively light and as markets await the US data docket later. The index currently trades in close proximity to its 21-DMA (98.50), 100-DMA (98.46) and 200-DMA (98.55). No doubt attention ahead will be on any geopolitical developments, but domestically, traders will also eye US ISM Services, PMI Finals, JOLTS and a couple of Fed speakers.
• Antipodeans are diverging this morning, with the Kiwi marginally topping the G10 pile whilst the Aussie lags. This is largely a function of a weaker AUD, after the RBA’s decision to hike its policy rate by 25bps (as expected). The accompanying statement was also net-hawkish, having suggested that second-round effects are beginning to emerge. In an immediate reaction, AUD/USD jumped higher to make a session peak at 0.7171 (vs trough 0.7135), before then gradually trundling lower soon after. The move lower is potentially a function of traders now taking out bets of future tightening, after three consecutive hikes. Particularly as in the presser, the Governor outlined they now have the policy space to wait and see. Markets currently do not assign much probability to a hike in June, before fully pricing in a hike by September.
• JPY was flat for much of the European morning, but is now a touch lower after a recent spike higher in USD/JPY - a move which lacked a fundamental driver. The pair jumped to form a session high at 157.88 (from 157.28), before then immediately paring back towards 157.47. Most recently, a knee jerk lower was seen in the pair, with an aggressive move lower from 157.56 to 157.12, before once again moving back towards 157.50.
• CHF is near enough unchanged vs the USD, and incrementally firmer against the EUR; EUR/CHF currently hovers just above its 50-DMA at 0.91554. Some modest pressure was seen in the Swiss Franc after the region’s April inflation report, whereby the M/M metric increased by less than expected, though the Y/Y figure doubled amidst the Iranian war.

Central Banks

• RBA hikes its Cash Rate by 25bps as expected to 4.35%; via 8-1 vote (one voted to maintain rate at 4.10%); said inflation likely to remain above the target and risks remain tilted to the upside. DECISION. Board assessed that inflation is likely to remain above target for some time and that the risks remain tilted to the upside, including to inflation expectations. It was therefore judged appropriate to increase the cash rate target. The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. Having raised the cash rate three times, monetary policy is well placed to respond to developments. It will do what it considers necessary to achieve that outcome. INFLATION. Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of this increase reflected greater capacity pressures. There are early signs that many firms experiencing cost pressures are looking to increase prices of their goods and services. Short-term measures of inflation expectations have also risen. There are plausible scenarios where inflation is higher and activity lower than envisaged under the baseline forecast. MIDDLE EAST. A longer or more severe conflict could put further upward pressure on global energy prices; this would push up near-term inflation and could also increase inflation further out as these costs are passed through and if price rises get built into longer term inflation expectations.
• RBA Governor said if second round effects move through to expectations it could result in a need for higher rates. Current cash rate is a "bit" restrictive, provides some space to see how the Middle East situation develops. Have the policy space to wait and see. Extensive debate about the decision to hike.

Fixed Income

• A contained morning for USTs and Bunds given ongoing APAC holidays and after the significant bearish action seen on Monday amid energy upside of as much as USD 6/bbl in Brent.
• Gilts, unsurprisingly, lag with downside of 84 ticks at most to an 86.19 base, taking out the 86.36 low from Friday and now looking to the figure and then the 85.90 contract trough. Underperformance is a function of Gilts playing catch-up after Monday's holiday, similar action seen in the FTSE 100. Otherwise, the UK docket is light, and the benchmark will likely conform directionally to peers, and as such may well retrace some of the discussed downside, in a similar fashion to peers late-Monday.
• For the UK, we continue to count down to Thursday's local elections, the results of which could be the tipping point against PM Starmer, particularly if his own council (Camden) shifts against Labour as the latest polls indicate it might, in a pivot to The Greens. On the leadership, The Times reports that Labour MPs are discussing plans to demand Starmer set a resignation date, in a move akin to that taken by allies of Brown against Blair.
• USTs are currently a few ticks firmer in 110-05+ to 110-12 parameters, at the lower end of Monday's 110-00+ to 110-26+ band. Ahead, a number of data points of note alongside remarks from Fed's Bowman and Barr. However, there is every chance that action is once again dominated by geopolitics.
• Bunds are a few ticks lower in a narrow 124.85 to 125.03 band, similarly at the lower end of Monday's 124.68 to 125.51 confines. Specifics for the bloc light thus far, though we do look to a text release from ECB's Lane; however, the topic is focused on the climate, rather than monetary policy.
• Alphabet (GOOGL) commences a six-part EUR-denominated bond offer.
• Germany sells EUR 0.993bln vs exp. EUR 1.0bln 2.10% 2029 and EUR 0.483bln vs exp. EUR 0.5bln 2.50% 2035 Green Bunds.

Commodities

• Crude in the red, as energy generally eases off the highs printed on Monday, where Brent briefly posted gains in excess of USD 6/bbl at a USD 115.30/bbl peak, a conflict high for the July contract. As it stands, Brent is below USD 113.00/bbl, but remains markedly clear of the week's USD 106.60/bbl open.
• Overnight, specifics were bullish for energy, but the magnitude of Monday's move meant the space failed to benefit. In brief, US President Trump said the conflict could continue for another three weeks, and time is not of the essence. Furthermore, a Fox report suggests the US is closer to resuming combat activity vs 24hrs prior. From the Iranian side, reports around recent strikes and who knew in advance point to ongoing or even further fractures within the leadership.
• Dutch TTF in-fitting, lower and holding around EUR 47.70/MWh vs a EUR 49.23/MWh peak on Monday; however, this left it markedly shy of recent levels, which run as high as EUR 73.41/MWh
• Spot gold firmer, benefitting from lower energy prices and the respite it has provided to the USD. XAU peaked at USD 4558/oz just after the European cash equity open and remains in proximity to its best levels. Ahead, Fed speak, and US data dominate from a scheduled perspective.
• Base metals firmer on the return of LME, following the broader risk tone, though with mainland China still away, the magnitude is limited thus far. 3M LME Copper firmer and back above USD 13k.
• Glencore (GLEN LN) confirms that an incident occurred earlier today at the zinc smelting unit of the Ust-Kamenogorsk Metallurgical Complex.
• Iraq is offering term buyers discounts of USD 33.40/bbl on Basrah Medium for May loading, Bloomberg reported citing a 3rd of May notice.

US Event Calendar

• 8:30 am: United States Mar Trade Balance, est. -60.95b, prior -57.3b
• 9:45 am: United States Apr F S&P Global US Services PMI, est. 51.3, prior 51.3
• 9:45 am: United States Apr F S&P Global US Composite PMI, est. 52.1, prior 52
• 10:00 am: United States Apr ISM Services Index, est. 53.7, prior 54
• 10:00 am: United States Mar New Home Sales, est. 652k
• 10:00 am: United States Mar JOLTS Job Openings, est. 6850k, prior 6882k
• 10:00 am: United States Fed’s Bowman Speaks at Washington Financial Symposium
• 12:30 pm: United States Fed’s Barr Speaks on Banking Regulation

DB's Jim Reid concludes the overnight wrap

As those in the UK return from the May Bank Holiday, global market sentiment has made a cautious start to the week, with renewed attacks in the Gulf casting doubt on the state of the four-week-old ceasefire between the US and Iran as both the sides look to exert influence over the Strait of Hormuz. Amid the heightened tensions, Brent crude rose +5.80% on Monday before edging -1.18% lower to $113.09/bbl this morning. An ensuing global bond sell-off saw 10yr Treasury yields (+6.8bps) reach a 9-month high of 4.44%, while 30yr yields moved back above 5%. The S&P 500 (-0.41%) also slipped from Friday’s record highs, and while S&P futures are edging +0.13% higher overnight, the Asian markets that are trading today are overwhelmingly in the red.

Markets have faced a flurry of Middle East headlines since Sunday night. The most sustained negative reaction came just before the European close yesterday as the UAE came under missile attacks for the first time since the ceasefire began on April 8, with a fire also breaking out at its oil terminal in Fujairah following a drone attack. The latter has been of increased importance to oil markets as the UAE has been transporting close to 2mmb/day of oil via pipeline to the Fujairah port while Hormuz shipping has been disrupted. Meanwhile, the US military said it had fought off attacks from Iranian drones, missiles, and small boats, as two US warships crossed the Strait of Hormuz along with two US-flagged merchant vessels. That move followed Trump’s announcement on Sunday of “Project Freedom" to help stranded vessels exit the Persian Gulf, though the exact scope of this operation remains unclear. Trump posted yesterday that Defense Secretary Hegseth will be holding a press conference today together with the chairman of the Joint Chiefs of Staff, General Caine. From Iran’s side, Foreign Minister posted last night that "events in Hormuz make clear that there's no military solution to a political crisis", while also suggesting that talks with the US were “making progress”.

Earlier yesterday, Iran’s military had warned that the strait remains closed, with reports of a couple of ships coming under attack. Oil prices spiked after Iranian media reported that its missiles had struck a US naval ship, but this move reversed after denials by the US and follow-up Iranian reporting of a “warning shot”. However, the relief proved short-lived and by the close, Brent crude rose +5.80% to $114.44/bbl, having traded below $106/bbl at Monday’s open in Asia. WTI rose +4.39% to $106.42/bbl. Oil markets also moved to price rising risks of persistent disruption, with 6-month Brent futures (+5.25%) posting their largest daily increase since March 2022 to reach a new post-2022 high of $91.99/bbl.

While oil prices pulled back a bit overnight, equity markets in Asia are pulling back from gains in the previous session. As I check my screens, the Hang Seng (-1.16%) is underperforming after a +1.24% rise yesterday, while the S&P/ASX 200 (-0.44%) also sliding following the RBA’s rate decision (details below). Meanwhile, markets in Japan, China and South Korea are closed today.

In term of yesterday’s moves, the rise in oil prices reignited concerns about inflationary pressures, with the 2yr inflation swap in the US rising +6.0bps to 3.13%, the highest since November 2022. In turn, that led to hawkish central bank repricing and pushed yields higher. Fed funds futured moved to price 17bps of hikes by next April (+11.5bps on the day), despite New York Fed Chair Williams arguing that the Fed will need to lower rates “at some point” if inflation drops to the 2% target as he expects for 2027. 2yr Treasury yields rose +7.4bps to 3.95%, while 10yr yields were up +6.8bps to 4.44% and 30yr yields +5.6bps to 5.01% as both reached their highest levels since July last year.

The higher oil and rates backdrop weighed on equities, with the S&P 500 retreating by -0.41% from Friday’s record high in a broad-based decline that saw 70% of S&P constituents lower on the day. Industrials (-1.17%) and materials (-1.57%) stocks led the decline, while energy (+0.85%) stocks were the only major sector to advance. Tech stocks also showed some resilience, with the NASDAQ (-0.19%) and the Mag-7 (+0.04%) little changed on the day. With tech stocks leading strong Q1 earnings growth in the US, the S&P 500 is +13.5% above its low on March 30, even as Treasury yields and longer-dated oil futures have reached new post-Iran war highs. For more on the earnings season takeaways, see yesterday’s update by our US equity strategists here.

Over in Europe, equities struggled even more, with the STOXX 600 falling -0.99%, while DAX (-1.24%), CAC (-1.71%) and FTSEMIB (-1.59%) posted even larger declines. The STOXX Autos index (-1.94%) underperformed, with the likes of Mercedes-Benz (-3.35%), Volkswagen (-2.81%) and BMW (-2.44%) sliding. This followed Trump’s threat on Friday to increase tariffs on auto imports from the EU back up to 25% as he claimed that the EU was “not complying” with the trade deal reached last summer.

European bonds mostly matched the US moves, with 10yr bund yields rising by +5.0bps to 3.08%, while OATs (+6.3bps) and BTPs (+7.8bps) saw larger increases amid the risk-off-tone. And the rise was larger at the front-end, with 2yr bund yields rising +7.8bps as markets moved to price a 99% likelihood of a June ECB hike by yesterday’s close. Adding to the baseline view of a June ECB hike, Germany’s Nagel said that the ECB would need to hike rates in June “if the inflation outlook does not improve markedly”, echoing similar comments he made last Friday.

On the data front, solid US data continued, with March factory orders jumping by +1.5% (vs. +0.6% expected) amid surging demand in segments related to the AI build out. Meanwhile, the Fed’s Q2 Senior Loan Officer Survey showed mostly stable bank credit conditions despite the Iran energy shock, albeit with a marginal tightening for corporate lending.

Turning back to overnight news, in Australia the RBA has hiked rates for a third meeting in a row to 4.35% as we go to print. The decision came in a hawkish-leaning 8-1 vote, a much more decisive split than the 5-4 vote in March, though the RBA’s press release does suggest a degree of patience moving forward as “Having raised the cash rate three times, monetary policy is well placed to respond to developments”.

Sweden’s Riksbank and Norway’s Norges this Thursday will finish up the current round of G10 rate decisions. There will also be lots of Fed and ECB speakers following their meetings last week. See the full day-by-day schedule below.

In terms of the rest of this week’s events, the main highlight will be the US jobs report on Friday. Our economists see payrolls rising +50k in April, close to the breakeven rate and down from +178k in March, with a slightly faster earnings growth rate (+0.3% vs +0.2% in March) and a stable unemployment rate (4.3%). Other US labour market indicators will include the JOLTS survey today and the ADP report on Wednesday. We will also get the ISM services index today and the University of Michigan’s consumer survey for May on Friday. And tomorrow will see the quarterly US Treasury refunding announcement. Our rates strategists preview the event here along with their forecasts.

Elsewhere, we will see the final May services PMIs from China and Europe tomorrow, while European releases also include April CPI reports in Switzerland (Tuesday) and Sweden (Wednesday), as well as March industrial production, factory orders, and trade in Germany. In politics, the focus will be on the local elections in the UK on Thursday. 

Finally, this week’s earnings schedule includes AMD and CoreWeave on the tech side and big consumer stocks Walt Disney and McDonald’s. In Europe, earnings releases include Shell, Leonardo, Ferrari and AB InBev. In Japan, the list includes Toyota, Sony and Nintendo.

Tyler Durden Tue, 05/05/2026 - 08:26

After Bizarre CEO Interview On CNBC, Michael Burry Exits GameStop Position

Michael Burry has exited his position in GameStop Corp., saying the retailer’s reported bid for eBay Inc. changed the investment case, according to Bloomberg.

In a Monday post to his Substack subscribers, Burry said a potential $56 billion cash-and-stock acquisition would likely require too much debt and no longer aligned with his original thesis for GameStop. He had previously backed the company in 2019, a move that helped spark investor enthusiasm around the stock.

Burry wrote: “Wall Street does indeed mistake debt for creativity, and does so constantly. I of all people should have known.”

GameStop reportedly offered $125 per eBay share — a deal far larger than GameStop itself. 

Burry's decision comes after a bizarre interview between Gamestop CEO Ryan Cohen and CNBC yesterday morning that deepened doubts around GameStop Corp.’s proposed $56 billion bid for eBay.

Andrew Ross Sorkin presses Ryan Cohen live on how GameStop $GME could realistically fund a potential acquisition of eBay $EBAY pic.twitter.com/vfOZutqiuh

— 𝔇𝔞𝔫𝔧𝔞 🏴‍☠️ (@0xDanja) May 5, 2026

In the 16-minute Squawk Box appearance, Cohen struggled to clearly explain how GameStop would fund a deal worth nearly five times its own market value.

Pressed by Andrew Ross Sorkin over a reported $16 billion financing gap, Cohen leaned on vague responses, pointing to the company’s website and repeating that the offer was “half cash, half stock.”

He noted GameStop had roughly $9.4 billion in cash and cited a financing letter from TD Securities for up to $20 billion, but failed to fully address how the numbers added up.

The interview grew more tense as CNBC hosts Becky Quick and Michael Santoli pressed Cohen on dilution concerns and the strategic logic behind the acquisition. Cohen argued the deal would help GameStop better compete with Amazon and said his incentives are tied to shareholder performance.

Clips of Cohen's pauses, evasive answers, and uneasy body language quickly spread online as shares fell and investors questioned whether the takeover bid was realistic.

Bloomberg writes that Burry also noted that this was his first stock sale since launching his newsletter. Separately, he disclosed a new bearish bet against the semiconductor sector through put options on the iShares Semiconductor ETF and said he significantly increased his stake in Lululemon.

Tyler Durden Tue, 05/05/2026 - 07:45

DC Judge 'Apologizes' To Alleged Trump Assassin

Authored by Steve Watson via Modernity.news,

A federal magistrate judge in Washington, D.C., has come under fire after expressing deep concern – described by multiple outlets as an apology – over the custody conditions of Cole Tomas Allen, the 31-year-old accused of attempting to assassinate President Trump at the White House Correspondents’ Association Dinner on April 25.

The judge’s remarks, captured in court and widely circulated on X, have ignited accusations of a two-tier justice system that coddles violent attackers while everyday Americans watch their rights erode.

According to reports from the emergency hearing, U.S. Magistrate Judge Zia Faruqui voiced serious worries about Allen’s placement in restrictive custody following the shooting incident.

SHOCKING: D.C. U.S. Magistrate Judge Zia Faruqui *APOLOGIZED*’to alleged White House Correspondents Dinner shooter, Cole Allen, for the “treatment” he has experienced so far in custody.

“The judge is very concerned about his constitutional rights, saying the defendant has… pic.twitter.com/D9uAUGwefc

— RedWave Press (@RedWavePress) May 4, 2026

Fox News reported that “The judge is very concerned about his constitutional rights, saying the defendant has requested meetings with his legal team, and that has not been allowed. He’s been put in a restrictive 24-hour lockup with no windows in a padded room without an opportunity to get out for recreation.”

“He has been put on su*cide watch by the Department of Corrections, and the judge was asking why,” the reporter further noted.

Fox News host Larry Kudlow ripped into the development live on air, echoing the growing frustration.

“The judge apologised to this guy, who would’ve sprayed the whole audience?! And killed God knows how many people? Then would’ve taken a shot at the president? We’re apologizing to this guy?! I don’t GET that!”

Allen, a California man with no prior criminal record, faces charges including attempted assassination of the president after authorities say he rushed a security checkpoint at the Washington Hilton armed with a shotgun, handguns, and knives. Video evidence released by prosecutors shows the chaotic moments as he allegedly opened fire, wounding a Secret Service agent before being subdued. He remains in federal custody.

The judge’s intervention came during arguments over Allen’s suicide watch and housing conditions, with his defense team filing motions to ease restrictions they called punitive. Faruqui reportedly ordered jail officials to explain or adjust the setup, emphasizing due process and access to counsel.

As we previously highlighted, Allen’s social media posts paint a picture of an individual steeped in the same anti-Trump rhetoric that has dominated Democratic and media messaging for years – language that framed the president and his administration in extreme, dehumanizing terms.

The incident at the correspondents’ dinner exposed how years of inflammatory talk can push someone toward violence. Yet instead of focusing on root causes – the unchecked rhetoric from the left – some in the system appear more worried about the shooter’s “dignity” behind bars.

Conservatives have pointed out the glaring double standard. January 6 defendants endured months of harsh pretrial conditions without similar judicial hand-wringing from the same D.C. courts. Here, a man charged with targeting the president and potentially dozens of others receives immediate scrutiny over padded cells and recreation time.

The hearing underscored Faruqui’s view that Allen’s treatment stood out as unusually severe compared to others he has overseen. Defense filings highlighted barriers to legal preparation and basic communication, prompting the judge to demand answers from the Department of Corrections by early this week.

Critics argue this reflects a deeper rot in the federal judiciary, where activist judges prioritize suspects aligned with certain ideologies over public safety and accountability. Calls to remove or reassign such figures have intensified online, with many demanding reforms to prevent future coddling of would-be assassins.

President Trump and his administration have long warned about the weaponization of institutions against America First policies. This episode only reinforces that message: the deep state and its enablers in the courts will bend over backward for those who threaten the republic while punishing patriots who defend it.

As the case moves forward, with a grand jury expected to hear additional charges, Americans are watching closely. The radicalization that drove Allen to act didn’t emerge in a vacuum – it was fueled by the very Democratic messaging now being whitewashed in court.

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 Tue, 05/05/2026 - 07:40

USAF Stratotanker Squawks 7700 Emergency Near Doha

The fight for control of the Strait of Hormuz flared up Monday and into the overnight hours, with IRGC forces reportedly striking multiple commercial vessels and a UAE oil refinery.

The one positive development: with U.S. forces on heightened alert, two U.S.-flagged merchant ships successfully transited the maritime chokepoint as Project Freedom began, marking the first visible move by the U.S. Navy to unfreeze the world's most critical energy corridor.

U.S. Central Command, or CENTCOM, said its aerial assets in the Hormuz area were busy on Monday, with helicopters and other aircraft combating IRGC forces to ensure the safe transit of the two ships.

Flight-tracking website Flightradar24 reported early Tuesday that a U.S. Air Force Boeing KC-135 Stratotanker, a military aerial-refueling aircraft, squawked "7700" after operating in a tight pattern near the Hormuz chokepoint.

"A U.S. Air Force KC-135 is squawking 7700, flying in the direction of Doha," Flightradar24 wrote on X.

A US Air Force KC-135 is squawking 7700 flying in the direction of Doha. https://t.co/wxldcwLX1g

For more information on ‘Squawking 7700’ please see https://t.co/nW7vZ4JgMF pic.twitter.com/AYffNcZGKt

— Flightradar24 (@flightradar24) May 5, 2026

Flightradar24 had no additional information on why the KC-135 crew squawked 7700. Some possible reasons include:

• Mechanical failure

• Engine problems

• Fire or smoke

• Medical emergency

• Loss of pressurization

• Fuel emergency

• Other serious onboard problems

Separate but notable, UBS analyst Dominic Ellis provided clients with energy market commentary following the overnight Hormuz chaos:

Brent Down From Intraday Highs, Though Up 7% Relative To Monday's Low The fragile ceasefire in the Persian Gulf seems to be on the verge of collapse after Iran responded to Project Freedom, the US effort to restart transit through the Strait of Hormuz, by launching attacks on commercial vessels and energy infrastructure in the region.

Brent is down from the intraday high over $114/b but remains close to $113/b, up almost 7% relative to Monday’s low.

The US denies Iranian claims that a US navy vessel was hit, but acknowledges damage to a South Korean cargo vessel. The UAE blamed an Iranian drone attack for a fire in the Fujairah Oil Industry Zone, concerning given the role Fujairah plays in allowing some regional oil exports to bypass the Strait of Hormuz.

Maersk said on Tuesday that one of its vessels, the US-flagged Alliance Fairfax, was successfully escorted through the Strait of Hormuz by US military assets, part of a US convoy involving at least one other US-flagged merchant vessel according to US Central Command.

It remains to be seen whether this was a one-off or evidence that the Iranian ability to disrupt flows via the Strait has been seriously degraded.

Oil could rapidly retreat below $100/b if it appears that the Iranian stranglehold on the Strait has been weakened, but even intermittent attacks on shipping would keep the geopolitical risk premium elevated and the volume of tanker traffic well below the level required for the oil S/D balance to normalise.

The next few days will be crucial – keep an eye on shipping data in the UBS Hormuz Tracker.

CENTCOM and U.S. officials have not provided any details so far on the KC-135's emergency or what caused it.

Tyler Durden Tue, 05/05/2026 - 07:20

Dell Board Unanimously Backs Redomiciliation To Texas As Delaware Exodus Accelerates

Dell Technologies' Board of Directors unanimously approved a proposal to move the company's state of incorporation from Delaware to Texas. This adds to the growing trend of redomiciliation, with companies such as Tesla, SpaceX, Neuralink, Coinbase, Affirm, TripAdvisor, eXp World Holdings, and others moving from Delaware to business-friendly states.

Shareholders will vote on the redomiciliation at Dell's upcoming 2026 annual meeting on June 25. "The proposed redomestication would align Dell Technologies' state of incorporation with its roots and long-standing center of operations," the company wrote in a press release.

Dell said the move would align its legal home with its corporate origin story: Michael Dell founded the company in Austin in 1984, and today Dell's headquarters, CEO, and largest concentration of U.S. employees are all based in Texas.

"From my dorm room at the University of Texas in 1984 to our headquarters today in Round Rock, Texas, has given Dell what every great company needs to grow — extraordinary talent, world-class research universities, and a business environment that lets us build for the long term," said Dell CEO Michael Dell. "Texas is where Dell has innovated, expanded, and invested for more than four decades, and bringing our legal home to Texas reflects what we've been building here all along."

If shareholders approve the move, the company plans to opt into Texas provisions that would require investors to own at least 3% of shares or $1 million of stock, whichever is lower, to submit shareholder proposals.

A separate Texas rule would require shareholders to hold a 3% ownership stake to bring derivative lawsuits against management.

The exodus from Delaware all began when a left-wing Delaware judge challenged Elon Musk over his Tesla compensation package.

Delaware Court of Chancery's January 2024 decision voiding Musk's roughly $56 billion 2018 pay package, after a shareholder lawsuit argued Tesla's board process was flawed and too controlled by Musk.

After that ruling, Musk publicly urged Tesla to reincorporate in Texas and asked shareholders to approve the move.

This is what followed next:

Lefty activism in courts is bad for business. FAFO.

Tyler Durden Tue, 05/05/2026 - 06:55

Is Europe Sliding Towards Stagflation?

Authored by Daniel Lacalle,

Europe is not yet in recession, but the latest business and consumer surveys show that the risk is no longer remote.

The euro area’s flash composite PMI fell to 48.6 in April from 50.7 in March, moving below the 50 threshold that separates expansion from contraction and signalling a quarterly GDP decline of around 0.1 per cent after a 0.2 per cent gain in the first quarter, according to S&P Global Market Intelligence.

At the same time, the European Commission’s flash consumer-confidence indicator dropped to -20.6 in the euro area and -19.4 in the EU, both significantly below their long-term averages and the weakest readings since 2022, according to the European Commission.

The most worrying part of the PMI release is not just that output is contracting. It is that the contraction is arriving both in services and manufacturing and with renewed inflation pressure.

Input costs rose in April at the fastest pace since the end of 2022, while selling-price inflation reached a 37-month high, with S&P Global noting that its prices-charged index is consistent with consumer inflation running near 4 per cent.

That is the dangerous mix Europe should have learned to avoid after the energy crisis of 2022: weaker activity, higher costs, and policy complacency.

The war with Iran is the immediate shock, but it is not the cause of Europe’s vulnerability. As in 2022, an external crisis has exposed the internal weaknesses that politicians prefer to ignore: high taxes, excessive regulation, rigid labour markets, low productivity, energy dependence, and an industrial policy increasingly driven by ideology.

Europe had years to prepare for external shocks, strengthen security of supply, develop domestic resources, diversify energy sources, and reduce the tax burden on companies.

Instead, too many governments chose interventionism, subsidies, and higher public spending and are now dusting off the rationing rhetoric.

Interventionism that will backfire

Europe survived the 2022 energy crisis less because of brilliant policy and more because of temporary relief: a mild winter, emergency purchases of liquefied natural gas and weak Asian demand for some cargoes.

That window should have been used to reopen nuclear capacity, accelerate domestic resource development, secure long-term gas contracts and reduce the regulatory burden on industries. Instead, numerous governments regarded a fortunate escape as a policy triumph.

Europe remains exposed to disruptions in global LNG markets, instability in the Middle East, possible Russian supply interruptions and the rising cost of competing with Asia for energy cargoes.

A region that deliberately limits its energy options, taxes productive activity aggressively and imposes ideological constraints on investment should not be surprised when every geopolitical shock becomes an economic emergency.

Instead of allowing firms to invest, adapt, and secure alternatives, governments respond to scarcity with more controls, more intervention, and more taxation

European governments are talking about windfall profit taxes, demand control, and rationing. Instead of supporting and incentivising the companies that can secure supply and strengthen chains, they prefer to implement more interventionism that, again, will only backfire.

The April PMI data show that the impact is spreading. S&P Global says the war is hitting services hardest, with activity falling at a pace not seen since the pandemic lockdowns of early 2021, while manufacturing output is being supported partly by stock-building rather than genuine demand strength.

This matters because services were the engine that kept Europe’s weak recovery alive. If services roll over while industry remains burdened by high taxes, elevated energy costs, and regulation, the cushion disappears.

Supply chains are also deteriorating again. Supplier delivery times lengthened in April by the most since July 2022. This is the classic European policy trap: instead of allowing firms to invest, adapt, and secure alternatives, governments respond to scarcity with more controls, more intervention, and more taxation.

I find it staggering to read that some European governments want to increase taxes precisely on the companies that can deliver supply security solutions – a clear disincentive to productive improvement.

Approaching a policy test

Consumer confidence confirms the damage. The European Commission reported that confidence fell by 4.2 percentage points in the euro area in April and by 4.0 points in the EU, continuing what it calls a “free fall” since the start of the Iran war.

Households are not reacting only to headlines from the Middle East. They are reacting to a familiar reality: expensive energy, high taxes, weak real disposable income, uncertainty about employment, and governments that offer more restrictions rather than more growth.

Europe is, again, approaching a policy test. The correct response is not rationing, price controls, or new attacks on business. The correct response is deregulation, lower taxes, faster permitting, energy realism, and a serious strategy to rebuild industrial competitiveness.

The euro area does not lack talent, capital, or companies capable of solving supply challenges. It lacks governments willing to remove obstacles.

The latest PMIs and consumer-confidence numbers do not mean that Europe is already in recession. However, they show that the region is dangerously close to repeating the mistakes of 2022, which resulted in persistent dependence from Russia and weaker industrial output.

The lesson is obvious. External shocks are inevitable, but strategic weakness is a choice.

Tyler Durden Tue, 05/05/2026 - 06:30

Ceasefire Over? Trump Downplays 'Mini-War' After US & Iranians Trade Shots, Missiles Target UAE Summary

• Trump employs interesting new term: "We’re in, I call it a mini-war."

• Fujairah says 3 injured in Iranian attack on Oil Industry Zone, UAE confirms "air defenses are now dealing with a missile threat", we have gotten reports of explosions in Dubai, which has sent oil higher and Emini futures into the red. UAE threatens retaliation. 

• CENTCOM hails two US merchant ships exiting Hormuz Strait safely in "first step". Bessent issues remarks warning the US "will fire if fired upon."

• Iran insists Hormuz is under its control & says it targeted & struck a US Navy vessel, which the Pentagon/Central Command has denied.

• Trump announced Sunday US will 'help free up' ships stuck in Hormuz Strait through Project Freedom. Iran has in response issued a "redefined the control zone" in Strait of Hormuz.

//--> //--> //--> US x Iran permanent peace deal by June 30, 2026?
Yes 37% · No 64%
View full market & trade on Polymarket

*  *  *

The 'Mini War'

It's looking like the White House does not wish to given up just yet on the ceasefire, given this afternoon President Trump referenced the conflict as a "mini-war" - as opposed to a full blown war - in what seemed like an effort to downplay today's dramatic events. Not only did missiles rain down on the UAE, sparking a fire at a key oil facility, but the US Navy said it destroyed seven Iranian military boats. Here's what Trump said.

“They did a poll on the war with Iran, and they said only 32% of the people like it,” Trump said, without specifying who conducted the poll. “Well, I don’t like it, I don’t like war at all.”

“We’re in, I call it a mini-war,” Trump added a few moments later.

Trump has previously said he’s been advised to not call it a war. House Speaker Mike Johnson, R-La., said last week that the U.S. is currently “not at war.”

Meanwhile, more details via CENTCOM on the earlier flare-up, which separately saw the UAE engage 12 ballistic missiles, 3 cruise missiles, and 4 drones on Monday:

US Central Command (Centcom) says it has used helicopters to destroy Iranian small boats.

It follows US President Donald Trump's suggestion that the US has struck seven Iranian small boats as it works to open the Strait of Hormuz. "Earlier today, Sea Hawk and U.S. Army AH-64 Apache helicopters were used to eliminate Iranian small boats threatening commercial shipping", Centcom writes in a social media update.

Ceasefire Broken? Israel Awaiting US Greenlight, Trump Downplays

There remain lingering questions over whether the US-Iran ceasefire has definitively broken down with today's Iranian attack on the UAE, as well as tit-for-tat hostilities in the Persian Gulf area. This as Israeli media says the Netanyahu government is awaiting a 'green light' to attack Iran again. Also the UAE is now planning a 'severe retaliatory response' and 'harsh revenge' against Tehran, per MS Now.

Yet strangely, the latest statement out of CENTCOM doesn't touch on the question of a broken ceasefire, and President Trump himself has been silent on the matter, per the AP:

Cooper declined to say whether the exchange of hostilities between U.S. and Iranian forces in the Strait of Hormuz today amounted to an end to the ceasefire agreement. Cooper told reporters in a phone call this afternoon that Iran “initiated aggressive behavior” in the strait, according to a readout of the call provided by The Associated Press. “What we saw this morning was Iran initiating aggressive behaviors,” Cooper said. “We are simply going to respond to that.”

Trump's response:

In a phone conversation a short while ago, President Trump stopped short of saying Iran has violated the ceasefire.

Regarding the Iranian drone and missile attacks on UAE today: “They were shot down for the most part,” Trump told me. “One got through. Not huge damage.”…

— Jonathan Karl (@jonkarl) May 4, 2026

Meanwhile, amid the looming threat of bigger, renewed war:

UAE SAYS ALL SCHOOLS TO SWITCH TO REMOTE LEARNING

UAE Threatens Military Response

A fresh official statement: "The United Arab Emirates strongly condemns the new Iranian attacks that targeted civilian sites and facilities in the country, using missiles, drones, and cruise missiles, which resulted in the injury of three Indian nationals."

"The Ministry of Foreign Affairs affirmed in its statement that these attacks constitute a serious and reckless escalation, and a blatant violation of the security and stability of the state, as well as a clear violation of the principles of international law and the United Nations Charter." And the UAE followed with the threat that it has the right to respond militarily against ongoing "aggression and provocation": 

The UAE stressed that it will not tolerate any aggression against its security and sovereignty, and that it will respond with full force and firmness to these attacks, in a manner that fully protects its national security and the safety of its citizens and residents, in accordance with international law.

There are further confirmed reports of injuries and a fire at one or more oil facilities:

Three Indian nationals have been injured in the drone attack on Fujairah’s petroleum industrial site being blamed on Iran, the Fujairah Media Office says. The three have been taken to the hospital and their injuries have been termed “moderate”.

UAE, Bahrain, Oman Under Threat

UAE air defences are actively engaging multiple Iranian missile and drone threats today, with the Ministry of Defence confirming four cruise missiles were detected heading toward the country; three were successfully intercepted over territorial waters while the fourth fell into the sea. Explosions have been reported in the Dubai area as air defence systems responded, prompting the National Emergency Crisis and Disaster Management Authority (NCEMA) to issue public safety alerts. In Fujairah, Iranian drones struck the Petroleum Industries Zone, causing a fire at the critical oil export terminal that includes the VTTI facility - the UAE’s key Hormuz-bypass hub. The Fujairah Media Office has confirmed three Indian citizens were moderately injured in the attack, marking the first reported civilian casualties in the current wave. UK Maritime Trade Operations (UKMTO) separately reported suspicious activity and a fire aboard a cargo vessel approximately 36 nautical miles north of Dubai, with cause unknown.  

The incidents unfold against a backdrop of heightened US-Iran tensions in the Strait of Hormuz, where Iran claims control and has warned it will “forcefully stop” vessels violating its regulations, while denying US reports of safe transits under “Project Freedom.” CENTCOM has rejected Iranian claims of striking a US Navy vessel. Markets reacted sharply: Brent crude pushed back toward session highs above $119, E-mini futures turned lower, equities sold off, and the US 30-year Treasury yield rose above 5.01% for the first time since July. The situation remains fluid with conflicting claims on both sides, and further official updates from UAE authorities are expected.

Injuries Reported

The Fujairah Media Office / Emirate has confirmed that 3 Indian citizens/residents were moderately injured in today’s Iranian drone attack on the Fujairah Petroleum Industries Zone (oil industry complex).

• Injuries are described as moderate (no fatalities reported).
• This is the first confirmed civilian injuries from the current wave of attacks.
• The incident is directly linked to the VTTI oil facility strike and the fire reported minutes earlier in the same zone.

Dubai, UAE Oil Infrastructure, Cargo Tankers Reportedly Struck by Iranian Missiles & Drones 

Following reports from the Following a report from the UAE National Emergency Crisis and Disaster that Emirati air defenses are responding to a missile threat, we have seen reports of explosions in Dubai, which has sent oil higher and Emini futures into the red

https://x.com/NCEMAUAE/status/2051337214282596616?s=20

Bloomberg adds that the UAE has detected four missiles coming from Iran

• *UAE DETECTS FOUR MISSILES COMING FROM IRAN: DEFENSE MINISTRY

Air defense systems are currently responding to a missile threat. Please remain in a safe location and follow official channels for warnings and updates. pic.twitter.com/DJFh6q8xi1

— NCEMA UAE (@NCEMAUAE) May 4, 2026

At the same time, the UK MTO Operations Center said that it has received reports multiple "Suspicious activities"

• *UKMTO RECEIVES REPORT OF INCIDENT 36NM NORTH OF DUBAI

• *UK NAVY: CARGO VESSEL REPORTED A FIRE IN THE ENGINE ROOM

• *UK NAVY: CAUSE OF THE FIRE IS UNKNOWN AT THIS TIME

Perhaps worst of all, it appears attacks have recommenced on UAE energy infrastructure (specifically, Fujairah - the end point of the pipeline the UAE uses to bypass the Strait of Hormuz).

• *UAE'S FUJAIRAH SAYS AERIAL ATTACK FROM IRAN

• *FUJAIRAH: IRAN DRONE ATTACK CAUSES FIRE AT OIL INDUSTRIAL ZONE

• Operations at the strategic facility have been affected. 

In the fog of war, it is increasingly unclear what is real and what is fiction, but while it is certainly possible that Iran has decided to re-escalate against the UAE, which is now as much of a nemesis as Iran, there is the possibility that the UAE is creating conditions for a false flag, hoping to drag the US into what would now be a "defensive" operation and thus not needing Congressional clearance.

In any case, the market is not happy, with stocks turning red...

... and oil pushing back to session highs.

And bonds are being dumped with 30Y yield back above 5.01% for the first time since July...

Bear in mind what Goldman warned on Friday: 

It feels as though there are a few lines in the sand starting to develop in markets:

• 120 USD in Crude (note COA roll likely dampens vol a bit today compared to earlier in the week),

• 4.5% and 5.0% in UST 10/30yrs,

• 160 in USDJPY

we would be wary of all of these and the proximity to them all adds further fuel to any future resolution risk rally/Dollar sell-off.

Patience is key as always.

Some of those signals have been hit and others are looming.

* * * 

Bessent: Will Fire if Fired Upon

Coinciding with 'Day 1' of Trump's Project Freedom to "guide" stranded vessels out of the heavily contested Strait of Hormuz, Treasury Secretary Scott Bessent has issued fresh remarks and warnings on Monday.

US Treasury Secretary Bessent says US is opening up the strait, we have absolute control of the strait. A quick summary of his main points via Newsquawk:

• Iranians do not have control of the strait.
• Project freedom was not done in coordination with Iran.
• If Iranians want to escalate, we are willing to do so.
• US is firing only when fired upon.
• It is a good time for US partners to step up and pressure Iran.

He further gave a very broad and fuzzy timeline, stating this 'aberration' will be over in 'weeks or months'. At this point, admin officials are careful to avoid calling it a 'war' - given it has been 60 days since the start, and there's the lingering question of Congressional authorization and war powers. Latest out of Hormuz:

Iranian IRGC attack hit a South Korean-linked ship in the Strait of Hormuz. Source: Yonhap

Pentagon: Two US-Flagged Ships Exit Hormuz

On Monday morning, US Central Command announced that within 12 hours after President Trump unveiled 'Project Freedom', a pair of US-flagged merchant ships made it out of the Strait of Hormuz. The wording of the statement makes it sound like a US naval escort made this possible - though the degree to which this was the case remains unclear. Below is the CENTCOM statement.

U.S. Navy guided-missile destroyers are currently operating in the Arabian Gulf after transiting the Strait of Hormuz in support of Project Freedom. American forces are actively assisting efforts to restore transit for commercial shipping. As a first step, 2 U.S.-flagged merchant vessels have successfully transited through the Strait of Hormuz and are safely headed on their journey.

This is being hailed as a the latest Pentagon success, however, the reality remains that Washington is celebrating a solution to a problem that did not exist before the launch of Operation Epic Fury. Or in other words, the US is seeking to open the strait which had never been closed prior to the Iran war. Meanwhile...

pic.twitter.com/NM0SdwNu9A

— The White House (@WhiteHouse) May 3, 2026 IRGC Says It Struck US Navy Ship, US Officials Deny

Iran is claiming to have attacked and struck a US Navy vessel, announcing that it stopped US warships from entering the Strait of Hormuz "with a firm and swift warning" and noting that "additional news will be announced later" - a statement by state Tasnim News Agency said. Soon after, Fars news agency said that two missiles hit a US navy vessel near Jask island after it ignored warnings from the IRGC to halt. Jerusalem Post also picked up on the statement, writing:

The ship reportedly turned back after being hit. The report further noted that the missiles had been launched after the US "violated security protocols for transit and navigation near Jask with the intent to pass through the Strait of Hormuz."

However, soon after Axios stated that a "senior US official denies a US ship was hit by Iranian missiles." CENTCOM soon after said that no US navy ships have been struck, adding that US forces are supporting Project Freedom and enforcing the naval blockade on Iranian ports. It is the latest claimed major incident soon on the heels of President Trump the night prior announcing "Project Freedom" to "guide" stranded ships out of the Strait of Hormuz. New threats:

But as we also noted, WSJ explained that Project Freedom "is a process through which countries, insurance companies and shipping organizations can coordinate moving traffic through the Strait, according to a senior U.S. official. It doesn’t currently involve U.S. Navy warships escorting vessels through the strait, the official said." So a lot of confusion remains. UAE meanwhile chimes in with some verification of a strike on a LNG tanker:

• UAE SAYS ADNOC VESSEL HIT BY TWO IRAN DONRES IN HORMUZ
• UAE CONDEMNS TARGETING OF ADNOC VESSEL BY DRONES IN HORMUZ

🚨 LIVE IN THE STRAIT: The U.S. just launched "Project Freedom" to escort neutral commercial vessels through the Strait of Hormuz, but the sanctioned tanker NOOH GAS (IMO 9034690) is currently attempting transit.

Windward Multi-Source Intelligence is tracking NOOH GAS in… pic.twitter.com/zLgIzNsgUG

— Windward (@WindwardAI) May 4, 2026

Trump had also said in his Monday Truth Social statement that he is "fully aware that my Representatives are having very positive discussions with the Country of Iran, and that these discussions could lead to something very positive for all."

Iranian Tanker Crew Swap in Pakistan

Some kind of 'good faith' swap is in the works, per Al Jazeera:

The crew members of an Iranian ship that was seized by the United States after it “failed to comply” with the US blockade on Iranian ports have been transferred to Pakistan for repatriation, Pakistan’s Ministry of Foreign Affairs has said.

“As a confidence-building measure by the United States of America, twenty-two crew members held aboard the seized Iranian container ship, ‘MV Touska’, have been evacuated to Pakistan,” the ministry said in a statement on Monday.

Pakistan's foreign ministry is facilitating their return, after a couple weeks ago the US Navy seized it and characterized the capture of the merchant ship part of the spoils of war.

CNN had reported at the time that "US Central Command (CENTCOM) says the guided-missile destroyer USS Spruance warned the Touska repeatedly over a six-hour period, during which time the container ship was steaming in the Arabian Sea toward Bandar Abbas, Iran." It was among the earliest direct actions by the US Navy after the US declared a blockade on all Iranian ports.

Iran Warns US It Will Attack

A fresh escalatory warning and rhetoric out of Iran's military on Monday: US forces will be attacked if they enter the strait, as well as any commercial ship or oil tanker not willingly coordinating their movements with Iran ahead of time. That's according to Ali Abdollahi, the head of the Iranian military’s unified command, and as cited in Al Jazeera:

"We warn that any foreign armed forces, especially the aggressive US army, will be attacked if they intend to approach and enter the Strait of Hormuz," the statement said.

All of this means that what Trump touted as an act of "goodwill" has the obvious potential to become a dangerous flashpoint. Some pundits have raised the possibility of a new Gulf of Tonkin incident.

The IRGC reportedly carried out a missile strike on two ships attempting to cross the Strait of Hormuz at night.

The IRGC Navy reports that the ships turned off their transponders and were operating in the interests of the US Navy. pic.twitter.com/64Ez5bFOpR

— Dimitri Lascaris (@dimitrilascaris) May 4, 2026

And per BBC, things are already coming to a head:

The Iranian military is claiming it has prevented a US Navy destroyer from entering the Strait of Hormuz.

Iranian state media reports that the public relations arm of the army says: "With a firm and swift warning from the Islamic Republic Navy, the entry of American and Zionist enemy destroyers into the Strait of Hormuz was prevented."

But it is hard to precisely confirm any of this, also as the Pentagon is mum and not expected to affirm any of Iran's claimed 'successes' in stopping US naval movement in regional waters. There have also been reports of Iranian vessels firing warning shots on a US ship. And according to Axios Monday morning:

A U.S. official said the rules of engagement for U.S. forces in the region have been changed and they were authorized to strike immediate threats against ships that cross the strait, like IRGC fast boats or Iranian missile positions.

Iran's 'Control Zone'

Iran has "redefined the control zone" in Strait of Hormuz, stretching from south of Mount Mobarak in Iran to south of UAE’s Fujairah, and from west of Qeshm Island in Iran to Umm al-Quwain in the UAE, according to Tasnim.

A statement from Iranian State TV gives Iran's perspective on Trump's new Project Freedom, as it insists the strait is "under the control of the armed forces of the Islamic Republic of Iran".

via Al Jazeera

Again, all of this directly contradicts Washington's stance, and the two sides are once again headed toward escalation amid zero sum contrary positions with apparent willingness to use force. As a reminder, Trump had on Sunday described that "For the good of Iran, the Middle East, and the United States, we have told these Countries that we will guide their Ships safely out of these restricted Waterways, so that they can freely and ably get on with their business."

Some More Regional Developments

via Al Jazeera

• Two missiles hit a US navy vessel near Jask in the Strait of Hormuz after it ignored warnings from the Revolutionary Guard to halt, state media quote the IRGC as saying.
• The reported attack comes after US President Donald Trump announced a naval mission, dubbed Project Freedom, to guide stranded ships out of the Strait of Hormuz on Monday.
• Iran’s Foreign Ministry says it is assessing a response from Washington to its latest 14-point proposal to end the war. Trump had called Tehran’s proposal “unacceptable”.
• Israel continues to bombard Lebanon, wounding five medics, and has expanded its area of control in Gaza by announcing a so-called “Orange Line”.

Tyler Durden Tue, 05/05/2026 - 06:12

Caught Off Guard: Stunned EU Leaders React To Trump's Troop Reduction In Germany

European officials have expressed dismay, disappointment, and surprise in the wake of the weekend announcement by the Trump administration that the US will be withdrawing some 5,000 troops from Germany over the coming months.

"There has been talk about withdrawing US troops from Europe for a long time. But of course, the timing of this announcement comes as a surprise," EU foreign policy chief Kaja Kallas expressed on the sidelines of the European Political Community meeting in Yerevan, Armenia on Monday.

Source: European Council

She then tried to find a silver lining, saying this must motivate Europe to strengthen its own role inside NATO. "I think it shows that we have to really strengthen the European pillar in NATO and we really have to do more," she said.

But she also reasoned, "American troops are not in Europe only for protecting European interests, but also American interests." Kallas also said: "I don't see into the head of President Trump, so he has to explain it himself."

Similarly, NATO Secretary-General Mark Rutte reacted by saying European leaders have “gotten the message” from Trump following the announcement.

Rutte, who is also in Armenia, acknowledged "disappointment from the US side" and said, "European leaders have gotten the message. They heard the message loud and clear." He followed with: "Europeans are stepping up, a bigger role for Europe and a stronger NATO."

Norwegian Prime Minister Jonas Gahr Støre when asked about the troop reduction, described "I wouldn't exaggerate that because I think we are expecting that Europe is taking more charge of its own security."

"I do not see those figures as dramatic, but I think they should be handled in a harmonious way inside the framework of NATO," he told reporters in Yerevan.

NATO spokesperson Allison Hart said officials at the 32-member alliance currently "are working with the US to understand the details of their decision on force posture in Germany."

Over several years, and stretching back decades, the US has maintained the most number of troops on the European continent in Germany - currently estimated at over 36,000 active duty personnel. So the 5,000 - while significant - is still somewhat of a symbolic move and number.

The large US presence hearkens back to the post WWII division of Germany and post-war order, and is also a legacy of the Cold War. Ironically at this very moment European leaders have hyped a 'new Cold War' with Russia, as the Ukraine war continues raging.

"The officials characterized the move as a signal of President Trump's discontent with the level of assistance that European allies have offered in the U.S.-Iran war," CBS wrote on the reduction decision.

The significance of the planned move also lies in the fact that America's German bases serve as headquarters of US European Command and Africa Command - with the historic Ramstein Air Base being the key hub.

The announcement via US reporting comes just a day after Trump again lambasted German Chancellor Friedrich Merz:

"The Chancellor of Germany should spend more time on ending the war with Russia/Ukraine (Where he has been totally ineffective!), and fixing his broken Country, especially Immigration and Energy, and less time on interfering with those that are getting rid of the Iran Nuclear threat, thereby making the World, including Germany, a safer place!" Trump wrote on Truth Social.

Merz had in a rare moment torched US foreign policy and the Trump administration's Iran war gambit in Monday remarks given at a local event in Germany. Included in that very head-on critique of Operation Epic Fury came in the following: "An entire nation is being humiliated by the Iranian leadership, especially by these so-called Revolutionary Guards. And so I hope that this ends as quickly as possible."

Merz had also claimed, "If I had known that it would continue like this for five or six weeks and get progressively worse, I would have told ​him even more emphatically." ​

Tyler Durden Tue, 05/05/2026 - 05:45

Germany's Silent Shift: From Entrepreneurs To State Dependence

Submitted by Thomas Kolbe

Germany affords itself a state bureaucracy that functions like an artificial labor market placed upstream of the private sector. The flight of hundreds of thousands into the arms of the state corresponds with the shrinking number of self-employed in the country. And policymakers are actively promoting this trend.

Let us begin with a piece of good news: according to a Bertelsmann survey, around 40 percent of Germans aged 15 to 25 can imagine starting a business as their personal life path. That is a surprisingly high figure in a country where young people not infrequently cite, half-jokingly and half-seriously, Hartz IV or the public sector as career goals.

Let us note: the embers of entrepreneurship in Germany are still glowing; economic autonomy and sovereignty still rank highly among the younger generation. However, it is questionable whether this will suffice to ignite, one day, a true founding boom in a country of climate transformation, deeply rooted faith in the state, and an expansive public sector—a boom that could force a turnaround and help erase the long-accumulated sins of climate socialists.

But we digress. Romantic youthful ideals carry little weight in the leadership circles of the Berlin Republic. There, the ideal of free enterprise collides with the cultural-political malaise of statism—one of many politically induced fault lines of our time. Entrepreneurial action, the free decision over the allocation of capital, inevitably carries conflict potential in a climate of manically enforced eco-transformation.

In attempting to transform the existing economic order into a system of state-directed energy production and centrally steered industrial output, policymakers are pushing a growing number of mid-sized enterprises either into insolvency or straight abroad. No one should be surprised by the country’s economic depression: there is a price to be paid for handing over the economic crown jewels—such as nuclear power or automobile manufacturing—to ideological zealots.

It is hardly surprising that the fury of the socialist “firewall cartel” is also directed at entrepreneurs, who serve as one of the silent barriers against the barbarism of socialism. In Germany, it is all too easy for politicians to distract from their own failures with envy debates, resentment, and instruments such as inheritance or wealth taxes. If you want to understand how this script works, recall the embarrassing entrepreneur-bashing by the labor minister and her finance minister just a few weeks ago. This is not an entrepreneur-friendly climate—neither fiscally nor socially.

One should therefore not be surprised: economic decline is inevitable, and it is increasingly visible in the compressed real incomes of citizens. They are grappling with a distorted labor market, rising inflation, and ongoing poverty migration—a toxic brew for a society that has, in large part, lapsed into an apathetic and strangely muted “degrowth mode.”

As mentioned: why still have entrepreneurs if, in the end, the state—with unlimited credit and the iron hand of the supreme regulator—directs economic activity? Economist Lars Feld estimated total subsidies last year at €321 billion, corresponding to seven percent of the country’s entire economic output. Put more bluntly: a Mount Everest of corruption money, actively tracked down by dubious subsidy entrepreneurs who, in doing so, help construct the redistribution machinery of the green transformation. A devilish system that casts anyone enriching themselves from taxpayers’ money in an extremely unfavorable ethical light.

Unsurprisingly, the number of self-employed in Germany has been declining since the onset of green transformation policies. While there were still 4.1 million self-employed in 2000, last year only 3.6 million freelancers, merchants, traders, and other independent workers earned their living at their own risk in the free market.

With the retreat of entrepreneurship, the country’s innovative power is also waning. Disruptive ideas now find venture capital elsewhere. At the same time, the public sector absorbs a significant share of those exiting the private economy amid the economic downturn.

Since the turn of the millennium, the number of public-sector employees has risen from 4.5 to 5.5 million—an increase of over 20 percent, despite the digital revolution, which should have made it possible to automate repetitive administrative tasks. Let us be perfectly clear: the state alone created 205,000 new public-sector jobs just last year. This is not meant as blanket criticism, but bureaucracy generates no economic value—nothing conceived by regulators and documentation clerks has ever survived in the market.

Bureaucratic obstacles, new levies, grotesque regulations—spewed out mechanically by an over-bureaucratized state apparatus—the overlapping layers of national and European administration drain scarce resources from the productive sectors of society, thereby fragmenting overall economic productivity. A vicious cycle that can only be broken by radical state reform, including cutting back bureaucracy by at least half of its disastrous output.

As if to prove that Germany has gone off the rails politically and culturally, employment in the NGO sector has grown from 2 million at the turn of the millennium to 3.5 million today. A particularly tragic development, as the productive middle class is often forced, through fiscal mechanisms, to finance its own parasitic antagonists. The peak was surely the ongoing spectacle of climate activists gluing themselves to roads, along with the hysterical Fridays for Future movement, whose manic-neurotic convulsions have left citizens—sometimes amused, sometimes annoyed, but always hoping for a return of conservative reason—speechless.

3.5 million people, most of whom are likely parked in unproductive extractive activities, sustain their economic existence by channeling the hard-earned money of employees and entrepreneurs into their own useless organizations. It is the very opposite—the absolute opposite—of a market-based society, at whose center should stand the innovative entrepreneur as the engine of progress and social stability, guided by a thymotic ethic.

Tyler Durden Tue, 05/05/2026 - 05:00

EU Going To War With VPNs In Bid To "Save The Children"

Western European governments and EU bureaucrats are advancing tighter regulations on VPNs as part of a broader push for "online age verification" and their ‘Chat Control’ agenda.  Privacy advocates and digital rights groups warn that Europe is drifting towards a surveillance and censorship regime similar to internet restrictions and firewalls used by Russia and China.

Last week European Commission Executive Vice-President Henna Virkkunen suggested that Brussels may need to address the use of VPNs to bypass the EU’s upcoming age-verification systems.  Speaking during a press conference on the EU’s new digital age-verification app, Virkkunen acknowledged that users could circumvent the system with VPNs and stated that preventing such circumvention would be among the ‘next steps’ policymakers need to examine.

🚨EU plans VPN crackdown: New age ID system “cannot be bypassed” via VPNs.

Couldn’t stop illegal migration, but suddenly goes full North Korea on controlling what Europeans read online. pic.twitter.com/Kn8OnygnWW

— Don Keith (@RealDonKeith) May 2, 2026

Her statements were delivered only two weeks after she shared a stage with EU Commission President Ursula von der Leyen, who called for a crackdown on web media companies to "protect children" from dangerous content.  The first stage of their agenda is a government created universal age verification app which web companies will be required to integrate.  Von der Leyen asserts that the new restrictions are designed to "defend children's rights" (how does restricting access protect rights?).

The Orwellian language of the EU is not coincidental.  "Child vulnerability" is a carefully chosen vehicle to manipulate public approval, opening the door to incremental government management of online content and discourse. 

Age verification sounds like a common sense reform in order to prevent children from accessing adult content, gambling sites, age limited products, etc.  Some states in the US require pornographic sites to use age verification, but not a government developed app.  However, their real target is social media.

The Commission has regularly expressed their intent to gain more regulatory control of platforms like X.  Formerly Twitter, Elon Musk's acquisition of the social media site triggered a sea change in online discourse, removing years of left wing dominance in Big Tech and allowing conservatives and centrists to have a greater voice.  Immediately after Musk bought Twitter, a firestorm began in Europe as leftist politicians sought to silence the platform. 

Their reasoning?  Any platform that allows conservative, nationalist and patriot views to be heard is, by default, dangerous and must be censored.  In particular, the European elites fear a generational break from the progressive movement, the first in many decades.  

This is why the leftist controlled Australian government established strict age verification laws last year - They categorize X as restricted, but not Bluesky, an extreme left-wing activist platform which enjoys more open access.  After a torrent of criticism, Bluesky enforced it's own age restrictions, but was not required to by the Australian government. 

Moderating media access is typically the realm of parents, not governments.  Furthermore, pressing companies to take more responsibility for age restrictions is one thing, but demanding everyone use an intrusive government created app is another.  

The plan is transparent; liberal governments intend to use age restrictions as an excuse to limit more conservative leaning content while giving leftist content free rein.  The crackdown on VPNs is clearly the second stage.  VPNs allow users to access websites without using their primary IP address which links them to their home address.  They can also be used to circumvent websites that are restricted in certain countries by using an IP from outside that country.   

In other words, VPNs allow for a moderate level of anonymity.  This is something most governments have been seeking to eliminate for years.  One state in the US (Utah) is also trying to target VPN companies for liability. 

These measures have elicited strong criticism from the Electronic Frontier Foundation (EFF), cybersecurity experts, and VPN providers, who argue that the law is technically unenforceable and risks criminalizing ordinary privacy-conscious users. 

Meanwhile, in France, officials have also signaled that VPN restrictions could eventually follow the country’s planned social media ban for children under 15. French Digital Affairs Minister Anne Le Hénanff stated earlier this year that VPNs are ‘next on my list’ in efforts to prevent minors from bypassing online restrictions. 

It should be noted that the majority of European efforts to control social media access occurred in the wake of burgeoning conservative and nationalist movements successfully spreading online and overshadowing woke activism.  These movements commonly use online discourse to dismantle progressive talking points and propaganda and they are highly effective.  The political left has decided that if they can't win the debate fair and square, they will simply censor the debate so that no one can see how wrong they are. 

They will start with children and teens in the name of protecting kids from dangerous content, then expand their bureaucratic foothold into every corner of the web.  

Tyler Durden Tue, 05/05/2026 - 04:15

EU Crime Report: Spanish Rape Reports Surge 322% Over Last Decade, EU Sees 150% Increase

Via Remix News,

New data released by Eurostat on Wednesday reveals a staggering rise in reported sexual crimes across the European Union, with Spain showing an increase far beyond the continental average.

Spain has seen one of the most significant shifts in reporting, according to Spain’s La Razon outlet. In 2024, the country registered “5,222 violations” compared to only “1,239 in 2014.” This represents a “322 percent increase,” a figure that sits “well above the 150 percent average in the EU.”

What Eurostat does not provide is data on who is committing these crimes. However, other sources have explored this issue.

As Remix News reported last year, a CEU-CEFAS Demographic Observatory report titled “Demography of Crime in Spain” showed that foreigners, who make up 31 percent of Spain’s prison population and commit per capita 500 percent more rapes and 414 percent more murders than Spanish citizens.

The highest rates are seen among Arabs and Latinos, with many of them hailing from countries in South America known for their extremely high crime rates.

While the murder numbers are stable in Spain at 300 per year, there has been explosive growth in attempted murders. Over the course of just four years, between 2019 and 2023, attempted murder cases nearly doubled, going from 836 to 1,507.

In just five years, penetrative rape cases also soared 143 percent, going from 2,143 in 2019 to 5,206 in 2024.

As Remix News has reported on in the past, in many Spanish states, the crime statistics show massive overrepresentation of foreigners in serious crimes like sexual assault, including in the Basque region.

In cases of robbery with violence, foreigners are 440 percent more likely to commit such a crime. Many such cases have made headlines in the Spanish media.

The study heads indicated that Spain’s aging population should have led to a decrease in crime rates, but the influx of migrants, amounting to 3.8 million per decade, has led to an “imported crime” problem.

The report confirmed a consistent pattern that violent crime is predominantly committed by young men. Specifically concerning nationality, the study indicates that foreigners have much higher crime rates than Spaniards, particularly for the most serious offenses against persons, such as homicide, rape, and robbery. This overrepresentation is noted to be especially pronounced among individuals of African and Latin American origin.

🇪🇸‼️ In Barcelona, North African migrants were caught on camera trying to bundle an 11-year-old girl into a car while she was on the way to the shop opposite her home.

Her mother speaks out, "She burst into the house in tears, trembling. That night, she couldn't sleep or eat. It… pic.twitter.com/9LL7lxHQUL

— Remix News & Views (@RMXnews) October 27, 2025

Data on the prison population supports this finding: in 2024, 31 percent of the prison population was foreign-born (excluding naturalized or second-generation immigrants). This proportion is more than double their share of the general population in the 20-69 age group, with North Africans and Latin Americans showing significant overrepresentation.

Rape and sexual crimes jump across Europe

According to the report, police forces across EU member states registered “more than 250,000 crimes of sexual violence” in 2024. Of these recorded offenses, “almost 100,000 (38 percent) were rapes,” marking a “150 percent more than a decade ago” increase.

The Eurostat statistical office highlighted a “sustained upward trend over the last ten years, with an average growth of almost 10 percent annually in sexual violence and 7 percent in rape”. In total, cases of sexual violence nearly doubled in the EU, seeing “124,350 more cases than in 2014,” while the number of rapes added “nearly 59,000 additional crimes in that period.”

However, Eurostat suggests these numbers may not reflect a simple increase in crime alone. The office noted that the surge “could be linked to greater social awareness, which would have impacted reporting rates.”

Read more here...

Tyler Durden Tue, 05/05/2026 - 03:30

Big Shake-Up: Putin Fires Head Of Aerospace Forces After Devastating Ukrainian Drone Attacks

There are reports out of Russia of another high level firing within the defense ministry. This time, President Putin has reportedly sacked the head of Russia's Aerospace Forces, which is the armed services branch responsible for the country's air defenses.

Moscow-based news outlet RBC reports that General Viktor Afzalov has been replaced by Colonel General Alexander Chaiko. Afzalov had first been appointed to the command post in 2023.

Source: Russian Ministry of Defense

However, the Kremlin did not immediately comment on or confirm the shake-up, but it comes amid growing anger among the Russian populace and among leadership following a series of major Ukrainian drone attacks.

For example, the major Black Sea hub of the Tuapse Oil Refinery has been struck four times in the last several weeks, creating a local environmental disaster which has also seen days of large fires.

The recent series of highly destructive Ukrainian drone attacks has even reached faraway Perm, near the Ural mountains, where an oil complex there was reported struck.

These latest drone waves have not been stopped by Russian anti-air defenses, and Ukraine's cheap but highly capable drone attacks have appeared to easily thwart any countermeasures.

As for the new head of the Aerospace Forces, he takes command amid a high pressure situation. If he can't stop the ongoing drone onslaught, then he too could face quick removal:

Alexander Chaiko was born in 1971 in the Moscow region. He graduated from the Moscow Higher Combined Arms Command School. According to the Ministry of Defense website, he served in positions ranging from reconnaissance platoon commander to commander of the First Tank Army of the Western Military District. In 2001, he graduated from the Frunze Combined Arms Academy of the Armed Forces. In 2012, he graduated from the Military Academy of the General Staff.

He held the positions of deputy commander of the combined arms army of the Central Military District, commander of the combined arms army of the Western Military District, chief of staff – first deputy, and commander of the troops of the Eastern Military District. In 2019, he was appointed deputy chief of the General Staff.

Chaiko has already been sanctioned by the European Union, as he's stood accused serving as a lead commander during the Russian occupation of Bucha - after which Moscow was accused of indiscriminate killings of civilians, which the Kremlin denies.

RBK reported that Colonel-General Aleksandr Chaiko (left) was appointed commander of the Russian Aerospace Forces, replacing Colonel-General Viktor Afzalov (right).

Chaiko is a former Ground Forces officer who began the 2022 invasion as commander of the Eastern Military… pic.twitter.com/3FOUfTI4KA

— John Hardie (@JohnH105) May 4, 2026

Meanwhile, last week Ukraine's President Volodymyr Zelensky announced "a new stage in the use of Ukrainian weapons to limit the potential of Russia's war."

Despite Ukrainian forces being slowly rolled back on the battlefield in the east, drone warfare remains about the only leverage that Kiev has at this point.

Tyler Durden Tue, 05/05/2026 - 02:45

Germany's Inflation Scapegoat: Why Hormuz Is A Convenient Cover Story

Submitted by Thomas Kolbe

Over the weekend, economist Gerrit Heinemann warned in Bild of a drastic increase in food prices in Germany. The scholar from Niederrhein University of Applied Sciences focused his analysis on the massive rise in fertilizer prices. A significant share of these—estimated at roughly one third of global production—is transported through the Strait of Hormuz. Following the dual blockage of the strait, this sector too has entered a state of global scarcity, forcing farmers worldwide to adjust prices, which ultimately feeds through to consumer prices.

Heinemann concludes that Germany’s food price index could rise by as much as ten percent this year. In Berlin, a familiar narrative has already taken hold, and there is broad agreement: the Hormuz crisis alone is responsible for the disaster. Yet core inflation had already reached around 2.7 percent year-on-year in March. Price increases across the entire spectrum of goods—especially energy and housing, which has become scarce due to migration—have accompanied Germany’s economic decline for quite some time. Only the dramatic slump in private investment and general consumer restraint have slightly dampened price pressures in recent years.

What stands out in this development is the steady upward revision of inflation forecasts. In March, there was consensus between the Economics Ministry and leading research institutes that inflation would come in at around three percent this year. By early April, after one month of the Iran crisis, economists at the International Monetary Fund were projecting price increases of five to six percent.

Now comes the ten-percent hammer in food prices. One could also put it this way: the culprit for rising prices in Germany has been found. Media and government point at every opportunity to Washington, where the supposed architect of the disaster allegedly sits: Donald Trump. But does this thesis hold?

Simultaneous with the abrupt rise in inflation forecasts are the recurring downward revisions of Germany’s economic growth rates. After more than two decades of eco-socialist restructuring, loose monetary policy, and now rapidly expanding public debt, Germany’s economy can be described simply: it is retreating in a dramatic process of contraction, while prices will continue to rise amid a crisis of productivity and investment. Incidentally, food prices rose by more than 40 percent between 2019 and 2025 as financial markets and the broader economy were flooded with cheap credit during the lockdown period, as documented by the Federal Statistical Office.

Hormuz is a cheap diversion from the disastrous policies that the firewall party cartel has been pursuing for some time in order to build a new green socialism. We are witnessing a radical paradigm shift not seen since the end of the Second World War. It is common knowledge that cheap energy, technological openness, a functioning market economy, and stable money were the factors that once underpinned Germany’s economic success.

It is now proving costly to be at odds with its most important energy and raw materials supplier, Russia, and to have effectively declared perpetual conflict with Moscow. History teaches us that ideological fervor always goes hand in hand with fanaticism. Blowing up one’s own nuclear capacity was, quite literally, a reckless gamble—an act of blind ideological infantilism rarely seen anywhere in the world in our era.

Together with Brussels, Berlin is pursuing a scorched-earth policy when it comes to returning to a market-based energy framework and sound regulatory principles. No matter how hard the current energy crisis hits, German policymakers remain committed to their green-socialist ideology. By clinging rigidly to CO₂ rent-seeking, grotesque climate regulation, and an energy policy run amok, the country has maneuvered itself into a geopolitical straitjacket. Germany’s economy now has its back against the wall. And Berlin has found its solution: the German middle class will be bled dry to finance the capital’s debt excesses and conceal the scale of the disaster.

What is dramatically worsening the situation in recent weeks is a series of attacks worldwide on refinery infrastructure. Whether in the United States, Australia, or war-affected Russia, the problems are intensifying. For Germany, an additional blow is that Russia will halt the transit of Kazakh oil to the Schwedt refinery via the Druzhba pipeline.

It is high time to develop domestic energy resources—fracking gas and drilling in the North and Baltic Seas—to signal to markets and consumers that rational policymaking has returned. Only then could Germany credibly declare the end of its post-Enlightenment delusion. A Europe-wide initiative to finance and build nuclear capacity would be urgently required. Yet Brussels and Berlin have decided otherwise: if necessary, access to energy will be rationed. The expansion of eco-socialism is to continue at all costs—energy thus becomes an absolute lever of political power over citizens, who are suffering from the ideological rigidity and intellectual failure of European policymakers to reduce energy dependence through market mechanisms and negotiated solutions.

The inflation problem is self-inflicted. Only a completely distorted and ideologically colored media narrative surrounding the Iran crisis and the consequences of centralized energy policy has so far prevented the public from correctly perceiving the economic disaster. The year 2026 will likely be the year in which personal escapism carries severe monetary consequences.

* * * 

About the author: Thomas Kolbe has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Tue, 05/05/2026 - 02:00

Horrifying "Rape Festival" Sparks Worldwide Outrage

Videos circulating on social media out of Nigeria have ignited shock and horror after appearing to show groups of men chasing, stripping and sexually assaulting women in broad daylight during a traditional “fertility" festival in the country’s southern Delta State, according to news.com.au.

The incidents unfolded on March 19 during the Alue-Do festival in Ozoro, a triennial rite in the Uruamudhu community of the Ozoro Kingdom. Intended to invoke blessings for married women struggling with conception, the event involves processions to a community shrine. Local customs reportedly advise single women to remain indoors. However, footage depicted young women fleeing through crowded streets, pursued by mobs who tore at their clothing, groped them and subjected them to public humiliation while bystanders filmed and, in some cases, appeared to cheer.

The graphic clips, which spread rapidly on platforms including X, Instagram and Facebook, have fueled national outrage, trending hashtags such as #endsexualviolence.

        View this post on Instagram                      

A post shared by Every Woman is Worthy® (@everywomanisworthy)

Delta State police have responded with arrests. Authorities confirmed that at least 15 people, including a community leader and several young men identified in the videos, are in custody, the BBC reports. Police spokesperson Bright Edafe described the scenes as “alarming, disgusting and embarrassing,” adding that suspects have been transferred to the State Criminal Investigation Department for prosecution. Investigations continue, though officials noted that no formal complaints of rape have been filed to date. Some women reportedly required hospitalization.

One of the alleged victims told police she was attacked within minutes of arriving at the event to the "rape festival."

“Immediately I came down, they started shouting ‘hold her, hold her, that’s a woman’, and they swooped on me like bees,” the alleged victim said, according to the Daily Express. “A large crowd started pulling my clothes until they stripped me naked. They were pulling my breasts and touching my whole body … I was shouting for help.”

Women’s rights activists claim this isn’t the first event where mass rape has occured.

“This is not just about what happened in those videos,” said Rita Aiki, an activist with the Women’s Rights Advancement and Protection Alternative, the New York Post reported. “It’s about the conditions that make it possible for this kind of violence to happen in public, with so many people watching and no one stepping in.”

“It tells you something about what is being normalized in a given society,” she added.

Tyler Durden Mon, 05/04/2026 - 23:00

Meta Raising $13 Billion SPV For Texas Data Center As Its CDS Hits Record

Back in January, just days before the latest private crash swept across markets, we reminded readers that one of the biggest abusers of private credit SPVs was none other than Meta which as of 2025 was "already neck deep in off-balance sheet debt." We then showed a schematic of its $27.3 billion SPV with private credit ground zero - Blue Owl - titled "Project Beignet", which was created for Meta's Hyperion data center, "none of this touches META's balance sheet." We said to expect "hundreds of billions of these in 2026."

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.

Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno

— zerohedge (@zerohedge) January 29, 2026

Little did we know that the first big (ab)user of SPVs in 2026 would be none other than Meta again. 

According to Bloomberg, the company formerly known as Facebook, is working on another financing package wrapped as a special purpose vehicle, this time for a data center in El Paso, that could total over $13 billion -  or roughly half of the Beignet - underscoring Big Tech’s growing reliance on debt to bankroll the infrastructure behind the AI boom, which as we noted earlier is now expected to reach $1.1 trillion in 2027 capex spending.

Morgan Stanley and JPMorgan are leading the process this time, according to Bloomberg sources. And just like Project Beignet, a large majority of the financing is expected to be in the form of debt, with the rest equity.

And indeed, Bloomberg confirms that Meta’s effort is similar to an almost $30 billion financing package it completed last year for a data center site in rural Louisiana, and which included $27 billion in debt which Meta raised through a special purpose entity known as Beignet Investor, which we discussed in January, and which is named after the popular Louisiana pastry.  

The food theme has persisted, and this latest transaction, dubbed Sopaipilla, is named after a fried pastry popular in the Southwestern parts of the country.

But why go the extra mile to come up with another complicated scheme instead of getting secured financing? Simple: there is little direct demand for the paper, and second, Meta is spending more than $10 billion on the data center in El Paso, which is a material jump from prior projections. By the time the data center is completed, the final bill will be even greater. 

The gigawatt-sized data center is expected to come online in 2028, and will support more than 300 on-site jobs once completed. Meta has also said its construction needs will grow given the increased investment, and now anticipates 4,000 temporary workers to be on site during the peak construction period.

When Meta sealed Beignet’s deal, where Blue Owl was the co-investor at the Project Beignet Holdings level, the company turned to PIMCO as its anchor lender on the transaction. With Sopaipilla, there is nobody to anchor the deal; instead Morgan Stanley and JPMorgan - who have zero interest in holding on to the debt - will quietly try to syndicate the debt to other capital markets investors. 

Since the Beignet transaction, data center financing has exploded across investment-grade and junk-bond markets, as we first reported last October in "AI Is Now A Debt Bubble Too, Quietly Surpassing All Banks To Become The Largest Sector In The Market." In the high-yield space, more than $20 billion of bonds and loans have launched in the past three weeks alone, while Meta itself raised $25 billion in bonds last week. Still, investors have shown some signs of fatigue amid the deluge, and nowhere more so than in Meta's own Credit Default Swaps which are trading at record wides.

Beside concerns about the company's debt, there are even bigger concerns over Meta’s outlook, as investors worry that the company’s massive investments in AI won’t pay off... just like they failed to do when the company which changed its name to Meta spent tens of billions on the Metaverse, with abysmal returns. The company’s shares are down about 7.5% this year.

Tyler Durden Mon, 05/04/2026 - 22:35

Trump's "Project Vault" Plans To Initially Buy Rare Earths From China

As we reported in February, the US Export-Import Bank’s proposed rare earth stockpiling initiative would initially source critical minerals from anywhere in the world - including China, an official involved in the project revealed to Bloomberg. The $12 billion Project Vault would later shift to a replenishment model that prioritizes domestic production first, followed by allied nations and other sources as a last resort, executives including Ex-Im Chief Banking Officer Brian Greeley said lastt week, unveiling some of the first details publicly announced on the project.

Greeley spoke alongside representatives of Glencore Plc. and Hartree Partners LP, which will be among trading houses procuring materials for Vault. The project aims to build an immediate buffer against critical mineral supply shocks while using future purchases to send a stronger demand signal to US and friendly-nation producers. 

Vault — which combines about $2 billion in private capital with a $10 billion Ex-Im loan — is President Trump’s latest effort to build an alternative supply chain for the materials, which are key for the production of electric vehicle batteries, solar panels and other low-carbon technologies. China is the dominant supplier of critical minerals worldwide.

The recent panel was the most robust public discussion of Vault since Ex-Im revealed the program in February. For nearly three months, metals investors, traders and consumers have sought details as the government worked behind the scenes to flesh out the project, according to Bloomberg. 

Attendees packed a conference room at a hotel in Washington, DC, to get details on Vault’s sourcing hierarchy and payment structure. After brief introductory remarks, the panel unexpectedly opened up the floor to an almost hour-long question-and-answer session.

The program’s so-called waterfall would give preference to domestic suppliers even when their material comes at a premium to allied alternatives, with participating manufacturers expected to accept that trade-off as part of joining the program, panelists said. The initial stockpile fill, however, would be driven chiefly by availability, reflecting the reality that some of the roughly 60 minerals under consideration are produced only in limited geographies and, in some cases, remain heavily influenced by China.

Vault is being structured as a demand-driven vehicle rather than a government-directed stockpile, the panelists revealed. Manufacturers would determine which minerals are stored, with the program then working with traders to secure supply. It’s designed to give US firms more leverage in opaque and fragmented markets where individual buyers often struggle to source smaller volumes efficiently or at transparent prices.

On storage, Greeley said the project will begin by relying on warehouse networks already controlled by trading partners and procurement providers. Over time, Vault is expected to develop its own storage network, either by building facilities or leasing them. A mature system could combine its own sites with third-party warehouses.

Panelists said the use of specialist traders would also be tailored to individual metals. Rather than sending orders into an open bidding process, Vault is expected to match procurement to firms with expertise in specific markets, allowing traders with relationships in cobalt, rare earths or other niche material sectors to handle those flows. The goal, panelists said, is to preserve pricing discipline, improve execution and avoid creating a scramble for hard-to-find materials.

Tyler Durden Mon, 05/04/2026 - 22:10

"Rare Sight": USAF C-17 Jets Land In Beijing Ahead Of Trump-Xi Summit

As the Strait of Hormuz takes center stage Monday morning, Iran is threatening to attack any ship that attempts to transit the critical waterway. This directly challenges President Trump's plan for the U.S. Navy to "guide" tankers and container ships through the chokepoint.

Looking beyond the ongoing Hormuz crisis, the China topic is next: Trump is still expected to meet with Chinese President Xi Jinping in the coming weeks. This means any U.S.-Iran escalation could leave Hormuz disrupted for even longer and will undoubtedly be a major topic at the upcoming Trump-Xi summit in Beijing.

On Sunday, Treasury Secretary Scott Bessent told Fox News' Sunday Morning Futures with Maria Bartiromo that the Trump-Xi summit is still "happening, as far as I know."

This leaves us searching for real-world signals, not just headlines from officials, that the two-day summit is still scheduled to happen on May 14 despite the ongoing U.S.-Iran conflict.

One signal comes from an aviation observer account on X, by the name "Safari," who says two U.S. Air Force C-17 transport jets landed at Beijing Capital International Airport in recent days, "making them a rare sight" at the airport.

为特朗普访华运送先遣物资任务的美国空军两架 C-17 在 5 月 1/2 日降落北京国际机场，属于是 PEK 难得一见的客人了。 pic.twitter.com/uYMDjCD4S5

— safari (@safaricheung) May 3, 2026

Safari continued,

On May 3, two more C17 transport planes carrying advance supplies for Trump's China visit landed at Beijing Capital International Airport, bringing the total to 4 aircraft. There are already so many plane spotters here to photograph the advance transport planes; I can't even imagine what kind of spectacle it'll be around Capital Airport when Air Force One actually arrives

为特朗普访华运送先遣物资任务的美国空军两架 C-17 在 5 月 1/2 日降落北京国际机场，属于是 PEK 难得一见的客人了。 pic.twitter.com/uYMDjCD4S5

— safari (@safaricheung) May 3, 2026

Polymarket odds:

//--> Will Trump visit China by May 15?
Yes 85% · No 15%
View full market & trade on Polymarket

As of this moment, based on Bessent's comments and reports of USAF C-17s landing in Beijing, all indications so far suggest that the Trump-Xi meeting is set to happen at the midpoint of this month.

Tyler Durden Mon, 05/04/2026 - 21:20

Iran War Threatens China's 4.5 Percent Growth Target: Analysts

Authored by Jarvis Lim via The Epoch Times (emphasis ours),

China’s already-strained economy faces mounting pressure as the Iran war threatens to choke export growth and suppress domestic demand, putting its 4.5 percent growth target at risk, experts say.

A woman takes a photo of the Lujiazui financial district across the Huangpu River on the Bund promenade in Shanghai, China, on March 5, 2026. Jade Gao/AFP via Getty Images

As the U.S.–Israeli war against the Iranian regime stretches past the two-month mark, President Donald Trump said in an April 29 interview with Axios that he will continue to maintain a blockade of Iran until Tehran agrees to a deal addressing concerns over its nuclear program.

Brent crude, the global oil benchmark, briefly spiked to over $120 a barrel after Trump’s remarks, hitting a four-year high before dropping back to $114. It now sits at around $108 as of Sunday afternoon.

Rising oil costs have also driven up plastic prices across Southern China, squeezing profit margins and triggering panic buying throughout the supply chain at Dongguan’s Zhangmutou—the nation’s top plastics trading hub.

China is the world’s largest producer, consumer, and exporter of final plastic products, according to a 2025 report from the Organisation for Economic Co-operation and Development, an intergovernmental organization.

Export Squeeze 

Tsai Ming-fang, a professor of industrial economics at Tamkang University in Taiwan, said that while many argue China’s strategic oil inventories would shield it from the effects of a blockade, the turmoil in China’s plastics markets shows the conflict is already weighing on its manufacturing exports.

China is estimated to be holding the world’s largest crude stockpiles, at nearly 1.4 billion barrels as of December 2025 and growing in 2026, according to an analysis released in April by the U.S. Energy Information Administration.

“Surging energy prices in financially unstable countries like Indonesia, Thailand, and Vietnam are squeezing out discretionary spending, dragging down China’s export shipments,” Tsai told The Epoch Times.

“If consumers don’t consider these Chinese goods necessities, China’s shipment volumes will naturally fall further.”

Containers at the Longtan port in Nanjing, eastern China's Jiangsu province on Jan. 14, 2026. AFP via Getty Images

Indonesia, Thailand, and Vietnam are members of the Association of Southeast Asian Nations (ASEAN)—China’s largest trading partner—with bilateral trade reaching 6.82 trillion yuan ($999 billion) in the first 11 months of 2025.

Chinese exports to the bloc totaled 4.29 trillion yuan ($628 billion) over the same period, up 14.6 percent year on year, data from the Economic and Commercial Office of the Mission of the People’s Republic of China to ASEAN showed.

Echoing the concern, Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis Research, said China’s export engine is now caught in a “double bind,” with higher shipping costs driven by Hormuz disruptions and softening end-markets across Southeast Asia.

“This is not yet a cliff edge, but the directional pressure [on China’s exports] is clearly downward, particularly in electronics, machinery, and mid-tier consumer goods,” Garcia-Herrero told The Epoch Times.

Liu Meng-chun, director of the Chung-Hua Institution of Economic Research’s mainland China division in Taipei, said war-driven inflation in advanced economies like the United States and Europe is eroding purchasing power, stifling demand for Chinese goods and compounding the country’s chronic overcapacity.

“The European Union overtook the United States as China’s second-largest export destination in 2025, but the conflict has stoked price pressures across the region, eating into the profit margins of Chinese firms,” Liu told The Epoch Times.

Exports from the world’s second-largest economy grew just 2.5 percent year on year in March, a sharp pullback from the 21.8 percent expansion recorded in January and February, according to China’s General Administration of Customs.

Faltering Demand

On the consumer front, Chinese car sales—widely viewed as a barometer of domestic demand—are declining.

Passenger vehicle retail sales in China fell 15 percent year on year in March to 1.648 million units, according to the China Passenger Car Association.

Cumulative sales in the first quarter of 2026 reached 4.226 million units, down 17.4 percent from a year prior.

“The prolonged stalemate in the Middle East crisis has driven international oil prices sharply higher ... suppressing the release of consumer potential,” the industry body said.

A receptionist sits near the Leapmotor T03 model displayed at a showroom in Hangzhou in eastern China's Zhejiang province on Tuesday, May 14, 2024. Caroline Chen/AP Photo

Garcia-Herrero noted that China’s domestic demand was already under strain before the Iran war, warning that the ongoing energy shock will only exacerbate the decline.

“Elevated oil prices are feeding directly into transport and manufacturing input costs, squeezing household purchasing power and eroding consumer confidence,” she said.

China’s consumer price index, a key gauge of inflation, rose 1 percent year-on-year in March and was down 0.3 percentage points from February, according to China’s National Bureau of Statistics.

The producer price index (PPI)—a measure of costs at the factory gate—climbed 0.5 percent in March from a year earlier, reversing a 0.9 percent decline in February and marking its first rise after 41 consecutive months of contraction.

But Tsai cautioned against interpreting China’s PPI increase as a sign of economic recovery.

“The PPI rebound stems from energy cost pass-throughs driven by the conflict, rather than any genuine pickup in domestic spending,” Tsai said.

“The latest data indicates China is likely still grappling with internal ‘involution.’”

“Involution” describes a cycle in which Chinese firms compete ever more fiercely for a shrinking pool of consumers, driving down prices and profits without generating real economic growth.

As the fighting in Iran persists, the erosion of both domestic spending and export growth will inevitably deal a severe blow to China’s job market, according to Liu.

“The export sector has traditionally offered massive employment opportunities, but sluggish foreign trade is now constraining wage growth,” Liu said.

“Under these circumstances, the unemployment rate could rise further, hidden unemployment will become more pronounced, and the labor market will continue to contract.”

According to data released by China’s National Bureau of Statistics on April 21, the unemployment rate for those aged 16 to 24, excluding students, rose to 16.9 percent in March, up from 16.1 percent in February.

Dimming Outlook  

In March, China’s State Council announced an economic growth target of 4.5 to 5 percent for 2026, its lowest since the early 1990s, not including the pandemic.

Construction workers leave a building site for a new office tower in the Central Business District in Beijing on April 3, 2025. Kevin Frayer/Getty Images

Tsai said Beijing’s decision to lower its growth target reflects its own lack of confidence in the economy, and the protracted conflict in the Middle East has only darkened the outlook further.

“Unless China’s major trading partners—including Africa, Southeast Asia, and the EU—dramatically scale up imports, hitting Beijing’s growth target looks increasingly unlikely,” Tsai said.

“Besides, new legislation from the EU is piling further pressure on China’s economy.”

The European Commission unveiled the Industrial Accelerator Act on March 4, imposing strict screening on foreign investments exceeding 100 million euros ($117 million) in sectors that account for more than 40 percent of global capacity, such as electric vehicles, batteries, solar energy, and critical raw materials.

The move—widely viewed by analysts as targeting China—drew a sharp rebuke from Beijing, which claimed the framework was “discriminatory,” and constituted “severe investment barriers.”

Echoing Tsai’s assessment, Garcia-Herrero said hitting 4.5 percent growth remains “achievable on paper,” but the margin for error has narrowed considerably.

“Beijing retains meaningful policy tools—fiscal stimulus, targeted monetary easing, and strategic energy reserves,” Garcia-Herrero said.

“But deploying them effectively against an externally driven inflation shock is a different challenge than managing domestic cycles.”

Garcia-Herrero predicted that if the Hormuz blockade extends beyond the second quarter, a revision toward 3.8 to 4.2 percent looks “increasingly likely.”

“The 4.5 percent target now depends heavily on a conflict resolution timeline that China cannot control,” she said.

Tyler Durden Mon, 05/04/2026 - 20:55

New York Parole Bills Could Free Some Of The State’s Most Notorious Killers

Two parole reform bills advancing in New York are triggering intense debate, with supporters calling them long-overdue criminal justice reforms and critics warning they could allow violent offenders to leave prison early, according to the NY Post.

One proposal, known as the Elder Parole bill, would allow incarcerated individuals to request parole hearings once they reach age 55 and have served at least 15 years of their sentence. That eligibility would extend to some inmates serving life sentences, and those denied parole could reapply every two years.

The second proposal, Fair and Timely Parole, would change how parole boards evaluate inmates by placing greater focus on whether someone currently poses a risk to public safety instead of heavily weighing the original crime. Backers say the current system often ignores evidence of rehabilitation and keeps people incarcerated long after they have changed.

The NY Post writes that advocates argue older inmates are far less likely to commit new crimes and are expensive to keep in prison as they age. Release Aging People in Prison has pushed for both measures, saying elderly inmates who have taken accountability for their actions deserve a meaningful chance at release. “The evidence is clear that forcing completely rehabilitated elders to spend their final years in prison costs a fortune and delivers zero public safety benefit,” said Olivia Murphy of the organization.

Opponents, however, say the bills could have dangerous consequences. Critics point out that inmates convicted in some of the state’s most infamous cases — including David Berkowitz and Mark David Chapman, who murdered John Lennon — could potentially become eligible for release.

Raphael Mangual of the Manhattan Institute argued that rehabilitation in prison should not erase the severity of violent crimes. “It really shouldn’t matter how well somebody behaves in prison. You should have behaved before you got there,” he said.

Victims’ families have also voiced concerns, saying repeated parole hearings force them to revisit painful tragedies. Michael Pravia, whose brother Kevin was killed in 2008, criticized lawmakers backing the legislation and warned, “They will have blood on their hands.”

Mark David Chapman

Kathy Hochul has not said whether she would sign either bill if they pass. As the legislation moves forward, the fight over parole reform continues to center on two competing priorities: rehabilitation and second chances versus justice and public safety.

Supporters of the legislation maintain that the bills are being mischaracterized by opponents who are focusing on extreme examples. Yes, how dare they exaggerate about mass murder... 

'They argue that parole eligibility does not guarantee release and that every case would still go through a review process. Advocates also say New York’s prison population is aging rapidly, creating rising healthcare costs for the state while keeping behind bars people they believe no longer pose a serious threat.

Still, critics remain unconvinced and say the proposals send the wrong message to victims and their families. They argue that certain crimes are so severe that the original sentence should stand regardless of an inmate’s age or behavior in prison. With both sides digging in, the future of the bills could ultimately depend on whether lawmakers—and Kathy Hochul—view the measures as necessary reform or an unacceptable risk to public safety.

Tyler Durden Mon, 05/04/2026 - 20:30