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Jobless Claims Tumble To 57-Year Lows

Despite various surveys suggesting American consumers have never been less confident, the number of Americans filing for jobless benefits for the first time, sits near cycle lows (breaking back below 200k this week (196k)...

On an unadjusted basis, last week saw the lowest level of initial claims since 1969...

Additionally continuing jobless claims fell to its lowest since Jan 2024...

The Conference Board's Labor Market Survey data is signaling the opposite...

So who is right? Can we reall;y be seeing the weakest labor market (for jobseekers) in years and the strongest labor market (for jobkeepers) in decades?

Tyler Durden Thu, 09/17/2026 - 08:50

Housing Starts & Permits Plunge In August As Homebuilder Confidence Nears COVID Lows

On the back of another tumble in homebuilder confidence (though still a long way from homebuyer confidence)...

...building permits were expected to decline in August (while starts were expected to rebound from July's big plunge).

However, both Starts and Permits dropped MoM, dramatically worse than expected (Starts -2.6% MoM vs +6.7% MoM exp, Permits -2.7% MoM vs -1.5% MoM exp)

On a SAAR basis, Starts at back near post-COVID lows while Permits are holding in a four year range...

The details of the homebuilder confidence data suggest this should not have come as a surprise...

It seems recent rises in the mortgage rate (and inventories already at over-stuffed levels, given the slowness of sales) has finally dented the homebuilders' self-satisfying confidence... and the lack of affordability leaves the American Dream fading into Renter Nation...

Tyler Durden Thu, 09/17/2026 - 08:38

Can't Wait For New Mines: Almonty Taps Spanish Mine Waste To Break West's Tungsten Supply Crisis

Days after US miner Almonty struck a major supply deal with Rwanda, Africa's largest tungsten-producing country, the miner is fast-tracking its ascent to, in its own words, "become the leading Western producer of tungsten" as early as 2027.

It has now announced a long-term supply deal with Swedish mining equipment maker Sandvik AB, advancing a faster source of expanding conflict-free, non-Chinese tungsten supply ahead of a massive US defense rearmament supercycle. 

The deal with Sandvik's Wolfram Bergbau und Hütten AG unit covers concentrate recovered from existing tailings at Almonty's Los Santos mine located in western Spain. It includes a conditional, one-time $3 million upfront payment for offtake rights and a take-or-pay commitment. 

"The agreement is intended to create an expedited tungsten supply solution with the ability to deliver concentrate in notably less time than the development of a traditional mine," Almonty said.

For Almonty, that secures a buyer and customer funding to support the processing plant's reinstatement before production resumes. For Wolfram Bergbau und Hütten, it adds a new critical source of feedstock for Europe to be refined at its Austrian refining and powder manufacturing operations. 

Almonty's two deals this week, securing a foothold in Rwanda and advancing tungsten recovery from mine tailings in western Spain, underscore the urgency of bringing supply online in the fastest manner possible. Why? 

Well, the US rearmament supercycle is set to begin as the need to replenish bomb and missile stockpiles becomes a national priority after supplies were depleted in the Gulf conflict. Conventional mine development timelines risk falling short of near-term demand needs of the US government, which explains why Almonty is going this route.

As we've explained, miners such as Almonty that have proven production and can deliver to Western governments first will be the early winners amid the resource nationalism gripping the world, mainly because China, which controls 80% of global production of the industrial metal, is choking supplies.

Almonty's crown jewel mine, Sangdong in South Korea, entered production in June and is targeting 1.2 million tons of tungsten ore in 2027.

In July, Almonty expanded its agreement with Pennsylvania-based Global Tungsten & Powders, extending the term to 21 years, increasing total contracted volumes by 40% and improving pricing by approximately 6.3%. This establishes a direct route into US industrial and defense supply chains.

Almonty's most recent investor presentation describes itself as becoming the leading Western tungsten producer following Sangdong's Phase II expansion and an extension at Portugal's operating Panasqueira mine.

Almonty is pursuing that higher-value processing opportunity through a planned South Korean tungsten oxide plant with an initial annual capacity of 4,000 tons, then expanding to 6,000 tons.

Across the tungsten industry over the last several weeks, troubling developments of "resource nationalism" have emerged: 

• US Locks Down Scrap, UK Funds Mine, Zimbabwe Bans Exports, Vietnam Weighs Curbs

Almonty shares rose nearly 4% in New York premarket trading. The stock has traded between $8.28 and almost $25 this year.

Analysts tracked by Bloomberg have nine "Buy" ratings on Almonty, with an average 12-month price target of $25.90 a share.

As resource wars intensify, the West's AI, reindustrialization ambitions, and, of course, the incoming rearmament supercycle will be tested at the critical material level. That puts producers, especially ones based in the US such as Almonty, in focus as investors look beyond chips and data centers to the secure supply chains underpinning them. Without conflict-free and reliable access to tungsten and other critical materials, the West's revitalization is not possible. 

Tyler Durden Thu, 09/17/2026 - 08:30

"Everything Rally" As Futures Rebound From Post-Fed Selloff; Yields And Oil Drop

Stocks look set to recover from Wednesday afternoon’s selloff asmarkets digest the rate hike from the Federal Reserve with Warsh (in retrospect) calming markets with a rate hike and tough talk on curbing inflation. A second day of dropping oil prices (no overnight news from Iran is helping) is also helping. Meanwhile, the debate around AI pacing and safety is rumbling on. As of 8:00am ET, S&P 500 futures are up 0.8% with Nasdaq 100 contracts +1% as tech leads with Mag7, semis, memory, and software all higher; look for momentum to continue its rebound today. According to JPM "today is setting up to be an Everything Rally led by the AI and Debasement themes; in Tech seeing Semis, Software, and Mag7 all rallying is intriguing and something to watch to see if fundamental buyers are returning to Mag7 / Software and if so, then what becomes the funding short for Semis?"  Bond yields are down 2-4bp; the curve is bull steepening with USD flat. Bond seem to be reacting positively more so to oil than to Warsh. Commodities are mixed with crude lower, precious and base metals higher, but Ags lower.  Today’s macro data focus is on jobless data though do not expect the data to be market moving.

In premarket trading Mag 7 stocks are all higher (Alphabet +0.95%, Nvidia +1.3%, Apple +0.4%, Tesla +1.3%, Amazon +1.2%, Microsoft +0.8%, Meta +0.92%)

• Ciena (CIEN) rises 3% as Wall Street firms are positive on the communications equipment company after management provided growth targets at an analyst meeting.
• Coreweave (CRWV) dropped 2% on plans to raise $3 billion from convertible bonds.
• Fluence Energy (FLNC) tumbles 21% after the energy storage company cut its revenue forecast for the year. Analysts note that the trim to the guidance was attributable to production issues at its Houston facility.
• Generac (GNRC) rallies 29% after it agreed to supply up to $8 billion worth of generators for Amazon’s data centers and issued a warrant for a stake in the company.
• Lennar (LEN) drops 1.6% after the homebuilder reported earnings per share for the third quarter that missed the average analyst estimate.
• Pegasystems (PEGA) slips 3% after JPMorgan downgraded the software company to neutral, seeing a weaker growth outlook after meeting with the management team.
• Qiagen (QGEN) rises 3% as TPG and Bain Capital are among potential bidders for molecular testing company, Manager Magazin reports, without saying how it got the information.
• Vicor (VICR) jumps 12% after the power component and systems firm said it has granted a non-exclusive Vertical Power Delivery license to a new original equipment manufacturer.

In other corporate news, Twitch CEO said Take Two’s Grand Theft Auto VI will likely face little serious competition for gamer attention this holiday season. Roche’s late-stage trial of its Lunsumio drug showed a statistically significant and clinically meaningful reduction in disease progression in patients with follicular lymphoma. Snap revealed new partnership and software details about its forthcoming Specs augmented reality glasses, pitching the $2,195 device to early adopters. Apple’s latest iPhone launch drew the strongest web traffic in Bloomberg Alternative Data’s five-year Similarweb series, offering an early signal that consumer interest may be running ahead of current sales expectations. Apollo is said to be in talks with SoftBank about boosting the size of a loan to $9 billion from $5.4 billion to help the Japanese firm amplify its bets on OpenAI. Speaking of OpenAI, the company shared several undisclosed incidents of its AI models misbehaving and unveiled a new framework for tracking and disclosing such occurrences going forward. Huawei is accelerating the debut of its next-generation AI chip in 2027 by several months, while Nikkei reported that Japan and the US are in talks to build a semiconductor factory as part of an agreed $550 billion investment plan.

Traders were reassured by Wednesday’s show of Fed independence and are gaining confidence that inflation is being dealt with. Warsh made it clear that “trends matter, data points are noisy” and said he was “not waiting breathlessly on what any particular data was.” Trump wasn’t happy about the hike, but showed more restraint than usual. Markets are weighing what comes next after the Fed rate hike and pledge to contain inflation helped ease worries over price pressures that had sent bond yields to the highest in decades.

For the Fed, the so-called dot plot, which officials use to signal their outlook for policy, suggests one more hike this year. Money markets are pricing in a total of three hikes over the next 12 months. “Current market expectations for additional rate hikes in 2027 are probably overdone,” said Joachim Klement, a strategist at Panmure Liberum. “We think that the next move in bond yields is probably lower, which in turn should support stock markets.”

Meanwhile, falling oil prices are bolstering hopes that the worst fears over inflation won’t come to pass. Signs that supply disruptions in the Middle East were set to ease helped drive the pullback in crude. Saudi Arabia is aiming to restore about half the capacity of its East-West pipeline within days, while the kingdom also sold Asian refiners more oil for collection at locations just outside the Strait of Hormuz.

In the UK, the Bank of England held rates steady as widely expected, though Governor Andrew Bailey warned policy may have to tighten if the war in the Middle East remained unresolved. The central bank also scrapped plans to sell long-dated gilts. The pound gave up early gains, while gilts rose across the curve, led by the longer end. Traders slightly pared bets on future hikes and no longer fully priced in a move at the next meeting in November.

Companies linked to artificial intelligence outperformed in early trading. Nvidia Corp. rose 1.4% as all members of the Magnificent Seven posted gains. With the rate decision now in the rearview, earnings expectations are back as the main driver for stocks, said Alexandre Drabowicz at Indosuez Wealth Management. The next significant catalyst for AI stocks could come when Anthropic files for an initial public offering, noted Tej Sthankiya at Federated Hermes.

“Public investors currently do not have visibility on revenue growth and margin dynamics for the largest AI native business in the market,” Sthankiya said. “If both metrics are higher than expected, this should give the market greater conviction that there is a large and durable return on investment in AI capex.”

The Stoxx 600 is rising 0.5%, led by autos, telecoms and industrials.Here are the biggest movers Thursday:

• Man Group shares rose as much as 6% to their highest since November 2009 after UBS upgraded the hedge fund manager to buy from hold on the recent strong performance from its AHL strategies
• Allegro shares gained as much as 5.3%, the most since July, after the Polish e-commerce platform raised its full-year guidance on a pickup in early third-quarter volumes
• Sodexo shares gained as much as 5.2%, the most in over two months, after JPMorgan upgraded the catering company and set a new Street-high price target
• Helvetia Baloise gained as much as 4.4%, the most since April, after the Swiss holding company reported its latest earnings
• Exosens shares rose as much as 13%, their steepest jump in almost a year, after the French defense firm raised full-year revenue and adjusted Ebitda targets
• Bytes Technology shares rallied as much as 11% after the firm raised its guidance for FY operating profits, now seeing low- to mid-single-digit growth compared with a previous outlook of “broadly flat.”
• Next shares rose as much as 3.3%, the most since Aug. 5, after the retailer’s results modestly beat expectations and a guidance raise brought forecasts in line with analysts’ consensus
• Raiffeisen Bank International shares fell as much as 9.7% in Vienna, the biggest drop since March, after Grizzly Research said it’s short the stock
• Bilfinger shares fell as much as 26% after the German industrial services provider cut its full-year sales forecast amid the conflict in the Middle East and the impact on customers of high energy costs

Asian stocks fluctuated as a rally in Taiwan’s semiconductor shares steadied the regional benchmark following the Federal Reserve’s interest rate hike. The MSCI Asia Pacific Index was little changed while swinging between gains and losses, with TSMC contributing the most to the advance. Taiwan and Japan rose, while China and Hong Kong declined. South Korea’s Kospi index erased morning gains to close Thursday down, as its chipmakers Samsung Electronics and SK Hynix fell. The regional markets traded narrowly as investors weighed the Fed’s rate path and higher borrowing costs. Still, gains in some tech shares suggest investors are adding exposure to the sector, counting on strong earnings that would help offset macro headwinds. Asian and emerging-market stocks face the possibility of another pullback in the weeks ahead, as a hawkish Fed hike compounds risks from elevated oil prices, Morgan Stanley strategists said in a note.

In FX, G10s are mostly firmer against the USD this morning, which is giving back some of its post-FOMC strength. The JPY moves higher as traders eye the BoJ tomorrow, whilst the Kiwi benefits post-GDP, which was stronger than expected.  The pound gave up early gains, while gilts rose across the curve, led by the longer end. Traders slightly pared bets on future hikes and no longer fully priced in a move at the next meeting in November. the yen’s sharp drop after the Fed’s hawkish hike is raising the stakes for the Bank of Japan’s policy meeting Friday. The currency weakened as much as 1% overnight to 156.42 per dollar before paring some losses.

In rates, treasuries hold gains amid steeper advance for gilts after Bank of England held rates at 3.75% as expected by a 6-3 vote. Also, oil prices are falling following signs that pipeline restoration may ease Middle East supply disruptions. US session includes weekly jobless claims data and a 10-year TIPS reopening. US yields are 3bp to 5bp lower led led by belly tenors, slightly steepening 5s30s spread from Wednesday’s first close below 50bp since March 2025 after flattening move unleashed by Fed rate decision.Gilt yields are lower by 4bp-7bp after Bank of England decision led to a dip in expectations for rate hikes; BOE-dated OIS contracts price in around 35bp of tightening by the end of the year.  IG dollar issuance slate empty so far but seen as having potential to build in the wake of the Fed rate decision; Treasury’s $19 billion TIPS reopening is at 1 p.m. New York time

In commodities, oil prices are dipping, with Brent falling back to around $103/bbl, while gold prices are higher and have moved back above $4,300/oz.

US economic data slate includes September Philadelphia Fed business outlook, weekly jobless claims and August housing starts (8:30 a.m.) and August pending home sales (10 a.m.). Fed speaker slate resumes Friday with Governor Bowman (9:30 a.m.) and Kansas City’s Schmid (11:45 a.m.) scheduled

Market Snapshot

Top Overnight News

• Trump told reporters that Fed Chair Warsh has a tough board and that he was standing by Warsh,and that he spoke to him just before the central bank unanimously voted to raise interest rates. “I’m relying on Kevin. But he has a very tough board"; he stated that interest rates are too high and not appropriate. Trump said they should be paying the lowest interest rates in the world and noted that inflation is too high. Furthermore, Trump stated he told Warsh to do what he wants and that he wants Warsh to be independent: WSJ
• Oil prices fell on Wednesday after reports that Saudi Arabia was offering additional crude cargoes through Oman eased some concerns about Middle East supply disruptions, while a smaller-than-expected draw in U.S. crude inventories added further downward pressure. RTRS
• Saudi Arabia is seeking to return about half the capacity of its cross-country oil pipeline within days after the link was halted last week following drone attacks. BBG
• Iran vowed to respond to a U.S. blockade by pushing more trade overland. On the ground, it isn’t going according to plan. WSJ
• Oil prices in China have jumped to record highs, as refiners in the world’s biggest crude importer step up a hunt for supplies amid widening fears over the security of exports from the Middle East. Oil futures in Shanghai were trading at $129 a barrel on Wednesday, above their peak of $121.80 in the first weeks of the Iran war. FT
• China cut its holdings of US Treasuries to an 18-year low in July, as overall holdings by foreign countries fell for a second consecutive month amid deepening worries over the sustainability of American government debt. SCMP
• Congress approved a bill giving Trump new powers to impose additional 100% tariffs on the five biggest importers of Russian oil or natural gas. The measure now goes to the president for his signature. BBG
• The BOE holds interest rates at 3.75% in a 6-3 vote, all as expected. BBG
• Mark Carney called for a closer alliance between Canada and the EU, risking a deeper rift with Trump, who threatened “very serious” tariffs or trade curbs over the bloc’s push to make Canada an associate member. BBG
• President Donald Trump floated hitting goods imported from the European Union with fresh tariffs or even cutting off some trade if he determined that a push to make Canada a potential associate of the bloc was harmful to the US: BBG
• Shares of Raiffeisen Bank International AG tumbled after Grizzly Research LLC said it’s shorting the bank, citing research showing the lender is exposed to trade involving Russian goods that are subject to import and export restrictions.
• Apollo Global Management Inc. is in talks with SoftBank Group Corp. about boosting the size of a loan to $9 billion from $5.4 billion to help the Japanese firm finance its investment in AI giant OpenAI.
• US Senators have reportedly secured an antitrust exemption for AI companies in the defense policy legislation before negotiations over the measure were delayed: Semafor.
• BofA Institute (w/e Sep 12) Total Card Spending +5.8% Y/Y (prev. +7.8%). Says K-shaped spending looks increasingly like a stale narrative.
• Chinese-founder AI startup Manus is set to double its valuation to $4 billion in its first fundraising since Beijing ordered it to split from Meta, charting a path to a fresh start after getting caught up in a geopolitical tussle: BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed as the region partially weathered the hawkish reaction triggered by the FOMC meeting, where the Fed hiked the Fed Funds Rate by 25bps to 3.75-4.00%, as expected, in a unanimous decision and the dot plots pencilled in another rate hike this year. ASX 200 was kept afloat as outperformance in financials, healthcare and real estate offset the losses in the commodity-related sectors, but with upside capped amid a lack of bullish drivers. Nikkei 225 began with firm gains following a pullback in energy prices, although it has gradually faded the majority of the opening advances as participants also brace for a widely anticipated BoJ rate hike when the central bank concludes its 2-day policy meeting tomorrow. KOSPI gradually climbed amid tech resilience and with South Korea's Finance Minister vowing to deploy market stabilising measures if required. Hang Seng and Shanghai Comp were pressured with underperformance in Hong Kong after the HKMA raised rates for the first time since 2023 in lock-step with the Fed, while the downside in the mainland is cushioned following the PBoC's increased liquidity efforts.

Top Asian News

• Japanese PM Takaichi said they cannot maintain fiscal sustainability without economic growth, adding that they will accelerate policy to achieve strong growth under proactive fiscal policy. Takaichi said she decided to retain ministers in charge of key policies such as economic and fiscal policy, growth strategy and areas key to diplomatic relations with foreign governments.
• Japanese Finance Minister Katayama said they will review budget requests and control debt issuance at a level that can gain market credibility, while she added they have stated their determination to address excessive volatility when they launched Japan-US joint intervention.
• Japan's Chief Cabinet Secretary Kihara said Japan will continue close talks with the US Treasury to support orderly foreign exchange markets.
• Japan's GPIF has reportedly requested alternative investment strategy expertise from South Korea's NPS, according to Maeil.

European bourses are firmer across the board, helped by lower energy prices, while the rebound in fixed income is also lifting equities. For the FTSE 100 specifically, focus will be on the BoE decision, with a hold expected at 3.75%. Sectors have a clear positive bias. Travel & Leisure top the sector pile, with Industrials and Telecoms following closely behind. Only sectors in the red are Optimised Personal Care, Real Estate and Construction.

Top European News

• European Commission adopts the EU KIDS Act, banning social media platforms from accessing children under 13 and setting an EU-wide minimum age of 15 for minors to open their own accounts.
• UK government’s EU reset summit could be delayed again unless the EU agrees to include “Made in Europe” legislation on the agenda, according to The Guardian's Elgot citing sources.
• Germany's VDMA expects 2026 production to decline by 2% in real terms, compared with its previous forecast for no growth.
• Swiss SECO forecasts: Raises 2026 GDP to 1.7% (June forecast: 0.9%), 2027 GDP forecast unchanged at 1.6%. 2026 and 2027 CPI forecast unchanged at 0.6%.

FX

• Snapshot: G10s are mostly firmer against the USD this morning, which is giving back some of its post-FOMC strength. The JPY moves higher as traders eye the BoJ tomorrow, whilst the Kiwi benefits post-GDP, which was stronger than expected.
• DXY soared following the Fed’s decision to lift rates by 25bps. Whilst this was expected, what did come as a shock to markets was the unanimous decision and hawkish dot plot, with the median showing another 25bps hike in 2026. The hawkish meeting lifted yields further beyond the 5% mark, but it does help ease concerns related to the Fed’s credibility/stability. Traders will now await Fed speak as the blackout period gets lifted; Bowman and Schmid are the first scheduled to speak on Friday.
• On the subject of the Yen, the BoJ is set to deliver a 25bps hike at Friday’s meeting. That likely would not be enough to materially strengthen the JPY any further; however, any indication that the Bank could increase the pace of rate hikes would likely do so. (A full BoJ preview can be found in the Research Suite)
• Elsewhere for the JPY, attention has been on the latest cabinet reshuffle. It has been viewed by markets as a policy continuation, and little cause for concern for the currency. PM Takaichi has been on the wires this morning, where she has largely reiterated her proactive fiscal approach.
• GBP trades steady this morning vs USD, with all attention on the BoE later today. The Bank is expected to hold Bank Rate at 3.75%, with the vote split likely mirroring the July decision at 6–3. Incoming data since the previous meeting have been mixed but, on balance, supportive of a hold, while the proximity of the Autumn Budget also argues against a significant policy shift or signal at this meeting. Attention will be on whether the Bank tries to push back on market pricing, which currently fully prices in a hike by December.

Fixed Income

• Global fixed income benchmarks are mixed, with USTs outperforming, paring back some of the pressure seen following the hawkish FOMC announcement.
• As the European session got underway, USTs rebounded from the post-FOMC lows, and returned to the 106.00 mark, a move which came alongside pressure in the crude complex.
• With the Fed out of the way, focus will be on the BoE today and the BoJ early in tomorrow's session.
• For the BoE, markets expect the Bank to keep rates steady at 3.75% with the vote split seen at 6-3. Lombardelli is seen as the member on the fence, and could tilt the vote to 5-4. The annual QT vote is also due, with the pace of balance-sheet reduction expected to slow to GBP 50bln from GBP 70bln. Active sales are expected to remain at around GBP 20bln, although reports suggest the BoE will halt sales of long-dated gilts in the 20-30yr region. Thus far, Gilts reside in a 84.69-85.15 band.
• Regarding the BoJ, it is widely expected that rates will be hiked by 25bps to 1.25%, with money markets fully pricing in a hike. Multiple source reports have helped markets bake in a rate hike, while hawkish commentary by BoJ members has pointed to the need for further hikes, with Takata even calling for the possibility of a 50bp rate hike.
• France sells EUR 12.991bln vs Exp. EUR 11-13bln 2.40% 2029, 2.70% 2031, 3.25% 2032 and 2.00% 2032 OAT.
• Spain sells EUR 5.74bln vs Exp. EUR 5-6bln 0.70% 2032, 3.45% 2034 and 3.40% 2036 Bono.
• US Treasury Holdings (July, USD): Japan 1.104tln (prev. 1.117tln), China 618bln (prev. 633bln), UK 998bln (prev. 940bln).

Commodities

• WTI and Brent futures are softer intraday but off worst levels, with traders finding little to trade on this morning. Earlier in the session, gradual downside was seen in crude futures despite the lack of an obvious driver. Some attention may be on reports in Axios, which suggested that Trump is expected to meet with Gulf leaders in New York next Tuesday, to discuss the next steps with Iran. The crude complex will likely continue to move on geopolitical developments amid direct influence on the supply side of the equation. WTI Oct resides in a USD 100.39-102.47/bbl, and Brent Nov trades in a USD 103.62-106.02/bbl range. Dutch TTF tilts slightly firmer but remains under EUR 80/MWh at the time of writing, after finding support just above EUR 76/MWh this morning.
• Metals are firmer as oil prices ease alongside the post-FOMC dollar, with spot gold briefly back above its 100 DMA (USD 4,323/oz) after printing a USD 4,235-4,367/oz range yesterday, and with today’s parameter within that range, between USD 4,257-4,335/oz. Spot silver similarly attempts to recoup yesterday’s losses but remains tucked within yesterday’s USD 62.31-64.93/oz range. Base metals are mostly firmer, with 3M LME copper towards the top of a USD 14,128.38-14,338.00/t range.
• Kazakhstan expects oil production to reach 96mln tonnes in 2028 and 99mln tonnes in 2029, according to IFX.
• Azerbaijan's oil production fell 8.3% Y/Y to 2.2mln tonnes in August, according to IFX.

Trade/Tariffs

• US President Trump said the US may impose heavy tariffs on Europe if it considers Europe's decision to grant Canada observer status a hostile act. Trump separately commented that they are very close to a deal with Mexico and we don't need anything Europe has, while he questioned why should the US carry Canada, Mexico and Europe.
• US-Mexico trade talks were pushed back one week, according to the WSJ.
• China's MOFCOM said Chinese and US trade teams are maintaining close contact on negotiations over mutual tariff reductions covering USD 30bln and will publish updates when appropriate. On EU trade, China is concerned about the "Europe First" clause and urged the EU to comply with WTO rules, maintain open markets and amend discriminatory provisions affecting third-country companies.
• China's MOFCOM Minister Wang held a video call with EU Trade Commissioner Sefcovic to talk on China-EU economic and trade issues.
• China's chief trade negotiator Li Chenggang met with a business delegation to discuss issues including China-US economic and trade.
• Japan and the US are reportedly discussing the construction of a semiconductor factory as part of the USD 550bln US investment package agreed during tariff negotiations, Nikkei reported.
• The EU has reportedly asked China to voluntarily restrict exports of hybrid cars as part of a deal to prevent a trade war, threatening of higher tariffs if they fail to do so, according to the FT.

Central Banks

• ECB's Makhlouf, speaking on Bloomberg TV, said he is not seeing signs of second round effects but the outlook is uncertain. He added that every meeting is a live meeting and that inflation risks tilted to the upside.
• HKMA raised its base rate by 25bps to 4.25%, as expected, while Chief Executive Eddie Yue commented that the HKD may gradually ease after carry trade activity.
• Brazilian Central Bank cut the Selic Rate by 25bps to 13.75%, as expected and with the decision unanimous, while it will continue to monitor developments in this scenario in order to keep monetary policy adequately restrictive to ensure convergence to the inflation target. BCB also stated that the scenario requires serenity and cautiousness in the conduct of monetary policy.

Geopolitics: Iran

• US President Trump said Iran wants to make a deal and hopefully we're more at the end of the Iran war. Trump separately commented that the Iran war will end soon because Iran cannot go on and it is going to be a really good conclusion.
• US President Trump is expected to meet Gulf leaders on the sidelines of the UN General Assembly in New York next Tuesday to discuss next steps in the war with Iran, according to Axios
• IRGC Spokesperson said "If the US attacks again, it will face a more decisive, broader, and stronger response", Mehr News reported.
• US, Israel and Arab military chiefs held secret talks in Germany, while it was noted that increased risk in the Strait of Hormuz and Bab Al-Mandab was seen impacting energy, according to Nour News.
• A Saudi source suggested that it would not normalise ties with Israel, even if they would help the Saudis against the Houthis, Times of Israel reported.
• Yemeni government forces are battling Houthis in strategic Kahbub mountains, near Bab al-Mandeb, according to Al Jazeera.

Geopolitics: Ukraine

• US President Trump said they are working very hard on Russia and Ukraine, while he added that the Ukraine war is the toughest war to end and is the one driving up diesel prices.
• The US House voted to impose sanctions and tariffs over Russia's conflict with Ukraine.
• Russia's Kremlin said the implementation of new sanctions by the US will make it harder to find a peace deal on Ukraine.
• Ukrainian President Zelensky said Ukrainian forces hit Russia's Yaroslavl oil refinery overnight while adding that Russians fired on energy in the Sumy and Odessa regions.
• Russia has reportedly damaged a rail bridge in Odessa, which would significantly limit Ukraine's ability to transport grain to its Danube river ports, reports suggest.

US Event Calendar

 

DB concludes the overnight wrap

The Fed delivered its first hike since 2023 last night, while also signalling that it has likely kicked off a modest tightening cycle. Investors moved to fully price another three Fed hikes by next summer in response, which weighed on both bonds and equities. The 2yr Treasury yield (+7.4bps) rose to its highest level since 2024, while the 10yr yield (+2.1bps) reached a new post-2007 high of 5.02% and the S&P 500 (-0.45%) retreated to its lowest level since July. Those moves came even as the extent of the sell-off was mitigated by a pullback in energy prices, as WTI crude (-3.21%) saw its biggest decline in six weeks amid increased optimism on Saudi oil flows. Markets have pared back some of the losses overnight, with 10yr yields trading at 5.00% and S&P 500 futures erasing yesterday’s losses. 

The FOMC raised the fed funds rate by 25bps to 3.75-4.00% as expected, with the unanimous decision accompanied by a more-hawkish-than-expected shift in the Fed’s dot plot. This showed a strong consensus around another hike this year, with 16 out of 18 officials anticipating additional tightening, while 2027 projections showed most officials split between 50bps and 75bps of total tightening.

While still below market pricing, this was visibly above the economists’ consensus that had expected the 2027 dot at the 3.75%-4.00% level, so only reflecting yesterday’s hike. The FOMC framed the hike as supporting “a timelier return” to the 2% inflation target. Tolerance for above-target inflation has declined amid a more optimistic view on growth and the labour market that was also reiterated by Warsh in the press conference. The Fed Chair also framed the hike as removing “a dose of accommodation" as financial conditions showed little sign of being restrictive. Warsh noted that this view on financial conditions is “widely shared across the Committee”, a potential shift given some Fed officials had previously described the policy stance as mildly restrictive. In all, this left a clear sense of the Fed being at the likely start of a moderate tightening cycle rather than delivering a one-off hike.

As Jim noted in yesterday’s Chart of the Day (see link here), this marks only the fourth Fed hiking cycle this century and the 15th since the mid-1950s. Yesterday’s signal has reinforced our US economists’ view of the Fed delivering another 50bps of tightening, with 25bp hikes in December and March. See their full reaction here. Meanwhile, President Trump called for lower interest rates following the decision, posting that US rates “should be 1%, or less, because we are the Best Credit in the World”, though he did not call out Warsh or the Fed directly.

Money markets moved to price in more tightening, with another 75bps of Fed hikes now being fully priced by next June (+10.8bps on the day), and with a hike around 50% priced for the upcoming October meeting. In turn, 2yr Treasury yields surged to a 2-year high of 4.74%, closing +7.4bps on the day and around +13bps above their pre-FOMC lows. The 10yr yield (+2.1bps) saw a more modest rise, having traded lower pre-FOMC amid the decline in oil, but still reached a new post-2007 high of 5.02%. Yields have pared back some of that rise this morning, trading 2-3bps lower across the curve. The rise in US rates also left the US dollar as the best-performing G10 currency yesterday, with the dollar index (+0.64%) rising to a 7-week high.

The hawkish Fed repricing weighed on risk assets. The S&P 500 closed -0.45% lower, having traded a few tenths higher earlier in the day thanks to the decline in oil prices. Tech stocks helped limit the size of the aggregate decline, with the Nasdaq (-0.01%) and the Mag-7 (-0.11%) outperforming as the Philly Semiconductor Index (+0.63%) advanced. There were sharper losses amid blue chip names, with the Dow Jones (-1.21%) falling to a three-month low, while banks (-2.30%) and energy stocks (-2.97%) led the losses for the S&P 500.

The market mood has improved somewhat overnight with S&P 500 futures (+0.60%) reversing yesterday’s losses and NASDAQ futures (+0.69%) similarly stronger. This has left a mixed backdrop in Asian markets overnight. Japan’s Nikkei 225 (+0.15%), South Korea’s KOSPI (+0.89%) and Australia’s S&P/ASX 200 (+0.35%) are all advancing. Elsewhere, Chinese equities are under pressure. The Hang Seng (-0.75%) is leading the losses as the HKMA mirrored the Fed’s move by raising rates +25bps to 4.25%, while the Shanghai Composite (-0.35%) and the CSI 300 (-0.36%) are modestly lower. Meanwhile, bonds in Asia have mostly reversed initial declines, with 10yr JGB (+0.4bps) yields marginally higher but 10yr Aussie (-2.9bps) yields lower.

Before the Fed, yesterday’s main market story was the decline in oil prices as headlines suggested some improvement in the outlook for oil flows out of the Middle East. This included news that Saudi Arabia was increasing tanker loadings in the Gulf and ramping up sales of crude from just outside the Strait of Hormuz, as it seeks to ship more oil via the strait following the closure of its East-West oil pipeline. We then heard Bloomberg report that Saudi Arabia is aiming to restore about half of the East-West pipeline’s capacity within days and return it to full capability “in about six weeks.” Earlier in the day, Reuters reported that 2 pumping stations along the pipeline had been damaged, with the repair timeline unclear. So reporting on the issue has not been entirely consistent. Separately, yesterday also saw news that Libya was restoring normal oil output after outages earlier this week.

Oil prices retreated in response, as Brent crude fell by -2.69% to $105.83/bbl and WTI by -3.21% to $102.43/bbl. Oil is little changed this morning. Separately, Axios reported last night that Trump is expected to discuss next steps on Iran with Gulf leaders on the sidelines of the UN General Assembly next Tuesday.

Yesterday’s pullback was also visible in European natural gas prices, with the front-month TTF futures (-2.54%) falling for a second day running after hitting a post-2022 high on Monday. This helped European markets rebound, with both equities and bonds rising. The Stoxx 600 (+0.46%), DAX (+0.53%), CAC 40 (+0.62%) and FTSE 100 (+0.28%) all recovered from multi-week lows, while yields fell back from Tuesday’s multi-year highs, with 10yr bund (-3.1bps), OAT (-4.0bps), and BTP (-5.4bps) yields all lower.

Gilts led yesterday’s European relief rally, with both 2yr (-13.0bps) and 10yr (-9.1bps) yields seeing sizeable declines following the UK August inflation data. Both headline (+3.1% yoy) and core CPI (+2.6% yoy) came in line with consensus. However, the release fell short of fears of an upside surprise given the recent energy price surge, with a more sanguine take also supported by downside in services inflation (+3.4% yoy vs +3.5% expected).

That CPI print meant markets priced out the chance of a surprise hike at today’s BoE decision, with a 25bps hike now only 9% priced, down from 23% on Tuesday. Our UK economists expect the BoE to stay on hold at 3.75% in a 6-3 vote, with the MPC’s message to focus on higher inflation for longer, given the direction of travel in energy and food prices. We’ll be watching how much weight the MPC puts on the duration of the energy shock and how that will impact its assessment of future second-round effects. You can read our economists’ preview here.

In yesterday’s other news, ahead of the FOMC decision we had received a strong US retail sales print for August (+1.2% vs +0.8% expected). Retail control saw an even larger upside surprise (+1.4% vs +0.5% expected), confirming that consumer spending has remained resilient despite the energy shock. Following the release, the Atlanta Fed’s GDPNow estimate for Q3 was revised up to +5.1% annualised, with consumer spending seen at +4.1% annualised. One softer piece of the US data yesterday came with the NAHB housing market index, which fell to a 12-month low (32 vs 34 expected) in a sign that higher rates are weighing on the US housing market.
Finally, in overnight data releases, New Zealand’s economy delivered a modest upside surprise. Q2 GDP expanded +0.2% qoq (vs +0.1% expected), with the year-on-year rate seeing a bigger upside (+2.6% vs +2.2% expected) thanks to upward revisions. So the data suggests underlying activity remains resilient despite continued headwinds.

Looking at the day ahead now, the main highlight will be the BoE’s decision, while the ECB’s Lane and Rehn are scheduled to speak. Data includes US September Philadelphia Fed business outlook, August housing starts, building permits, pending home sales, and initial jobless claims. 

Tyler Durden Thu, 09/17/2026 - 08:21

UK Gilt Yields Tumble As BoE Scraps Bond Sales, Holds Rates (As Expected)

The Bank of England decided to keep the bank rate unchanged at 3.75% on Thursday, as broadly expected, but shifted closer to further tightening.

The decision was reached with a 6-3 vote, with Huw Pill, Megan Greene, and Catherine Mann voting to hike.

Although the MPC still sees little evidence of second-round effects in wages and prices, it now judges those risks to have grown and the inflation outlook to be more clearly tilted to the upside.

As UBS notes, several members who voted to hold said the case for raising rates is building if the conflict and energy shock persist.

Cable is weaker...

Additionally, BoE has scrapped plans to sell long-dated gilts as part of a major overhaul of its quantitative tightening program that will see the £488 billion ($650 billion) portfolio unwound by 2034.

As Bloomberg reports, under proposals that have yet to be finalized, the bank will keep £120 billion of gilts that mature in 2049 or later and match them against future banknote issuance.

Another £222 billion that mature by 2035 will be run off and the remaining £146 billion maturing between 2035 and 2049 will be sold at a pace of £20 billion a year, potentially directly to the government through the Debt Management Office.

In a letter to Chancellor of the Exchequer John Healey, BOE Governor Andrew Bailey said the arrangement “preserves the independence of monetary policy” and would “maximize value for money by minimizing cost and risk over the lifetime” of the program.

All planned QT auctions will be paused until April as the terms of sales to the DMO are worked out.

The new approach to QT comes amid criticism of the program, which has accrued £110 billion of losses paid by taxpayers since the unwinding began in 2022.

Gilt yields are down around 10bps on the statement...

A notable theme in the September minutes was the resilience of the UK economy despite tighter financial conditions and higher energy prices.

GDP grew 0.4% in Q2, above the BoE's 0.3% forecast, while July GDP also rose 0.4%.

The Bank's internal estimate for Q3 growth was upgraded to 0.4% from 0.1% in the July MPR, supported by stronger business-to-business services activity, firmer business confidence and improving consumer sentiment.

In the members’ view on Bank Rate, Governor Bailey warned that the risks to inflation remain to the upside and cautioned against any loss of urgency in reaching negotiated solutions.

Tyler Durden Thu, 09/17/2026 - 08:18

Ed Dowd: The AI Game Of Thrones

Authored by Ed Dowd: Beyond the Narrative via Substack,

Winter is coming for the AI industry, and the great houses are already drawing swords

On one side sit OpenAI and Anthropic, wrapping themselves in the banner of "safety"...House Monopoly.

On the other sit the accelerationists including David Sacks, President Trump, and a growing faction that wants the pathway cleared, not blocked...House Speed Racer.

The fight is being sold as existential risk versus national destiny.

This is a battle for power, money, and control.

The average citizen is not at the table.

I have been watching this movie since the post-Labor Day panic dropped. I wrote last week an article titled "The Post Labor Day AI Panic Psyop Has been Launched" where I detailed a former Anthropic and OpenAI employee with almost no prior X footprint posted a polished warning that the labs are "gambling with our lives." It exploded to 123 million views in a day. Mainstream media, NGOs, and members of Congress materialize on cue. Two days later, after I wrote my Psyop post, Dario Amodei is on every airwave demanding we "pace the frontier." Sam Altman nods along and then Elon agrees even after he questioned the well-coordinated messaging. I suspect his motivation for agreeing is that he wants to make sure he is in the room should this path gain momentum. Even Hillary and Obama weighed in...obviously on House Monopoly side. Basically House Monopoly wants embedded evaluators inside the labs and common safety standards. Coordination that would require government blessing and, conveniently, an antitrust waiver so the two biggest closed model shops can sit in a room and decide how fast everyone else is allowed to run and regulate their competition out of existence. This is not altruism, rather this is regulatory capture.

The reasons for attempting this regulatory capture are simple and I touched on it in my previous article.

Open source models are putting real pricing pressure on the closed frontier systems. The closed system companies are burning cash with profitability nowhere in sight. Enterprises are finally asking about ROI and whether they want their data sitting inside OpenAI or Anthropic. Secondary market valuations are starting to crack. Growth is slowing and capex is increasingly getting harder to finance.

House Speed Racer has not been subtle. Trump called the panic a hoax and a scam. He said the only guardrails AI needs are a strong president, that we already have criminal and regulatory power over these companies, and that whoever wins AI wins. Sacks, who has been in this fight longer than most, told Amodei and Altman they can pace themselves if they want, but stop pretending they need Washington to bless a cartel. Stop asking for the waiver. Stop dressing market protection as public salvation.

The alignment is political, and everyone in the room knows it. The safety rhetoric travels most easily through Democratic networks, legacy NGOs, the parts of the administrative state that grow when fear grows and of course the MSM. The acceleration side is MAGA coded: beat China, build here, do not hand the future to Brussels-style bureaucrats or to companies that spent years positioning themselves as the moral opposition to the current administration. That camp is not wrong that a slowdown written by the current leaders is a gift to Beijing. However it is also not wrong that data center buildouts, power prices, and labor displacement are already landing on regular people who never got a vote.

The ultimate governor for both sides is the credit market and its willingness to fund this so far profitless endeavor.

House Monopoly Pre-Trump

As an aside let us not forget what the plan was under the Biden Administration. Marc Andreessen told this story two years ago and has not stopped repeating it. In May 2024 he sat in the Biden White House and came away convinced the plan was to regulate the industry until only two or three companies remained and startups were finished. He walked out and decided he was for Trump. Last week Politico suddenly published a piece disputing the meeting.

Love the timing! When the narrative needs the origin story memory-holed, the memory-holing arrives on schedule. House Monopoly would rather have us forget their nefarious machinations before Trump was elected.

Andreessen's larger point has always been the same: there is a difference between letting technology move fast and letting incumbents use the state to lock the door behind them. The "plan," as he described it, was never about keeping humanity safe. It was about deciding who gets to own the stack...namely a few oligarchs and the deep state.

So here we are

House Monopoly wants a licensing cartel and a fusion of frontier AI with the administrative state for "safety reasons"...the digital jailer many have been warning about.

House Speed Racer wants the throttle open because the alternative according to them is losing the race to China under national security reasons.

Both houses are populated by people who will be fine either way. Valuations in the hundreds of billions, political access, and the ability to write the rules or write the checks to the people who write the rules.

Who represents the average citizen?

The person whose job might disappear, whose electric bill is already rising because of the buildout, whose data is being vacuumed into models he does not control, and who will live under whatever speech and surveillance norms the winning faction decides are "safe." That person does not have a seat at the table. The hearings will feature the same CEOs, the same former officials cycling through the same firms, and the same senators who already have bills in the drawer.

I believe we are being presented with a false dichotomy. It is never black or white rather issues are more nuanced. There are no easy choices in this situation. Real risks exist...models that can crack cyber security and wreak havoc are not science fiction. Alternativity steam rolling local communities into accepting data centers is not the path forward. Additionally both sides ignore citizen's rights addressing personal data integrity, the ability to opt out from the models using them for training, fears about future employment prospects and local community data center concerns. Will grass roots citizens be allowed in the room?

As always watch the cash, watch who writes the rules and watch who gets the waivers. This is Game of Thrones and the Iron Throne is up for grabs. The smallfolk are not invited to the coronation...yet. Hopefully we figure out a third path. In my humble opinion House Monopoly is a dystopian no go option and House Speed Racer needs to address citizens legitimate concerns or risk losing to these self-serving fear merchants in the narrative war.

Isaiah 10:1-2
"Woe to those who make unjust laws, to those who issue oppressive decrees... to deprive the poor of their rights and withhold justice from the oppressed of my people."

Tyler Durden Thu, 09/17/2026 - 08:05

Generac Surges Most On Record As Amazon's Generator Deal Electrifies Data Centers

Generac shares surged the most on record in premarket trading in New York after disclosing a long-term deal with Amazon that could generate up to $8 billion in power-generation spending. 

Wells Fargo analyst Praneeth Satish, who covers Generac, shared his initial thoughts on the massive Amazon-Generac power deal in a note:

GNRC Announces Multibillion Dollar Contract With AMZN. GNRC announced a multi year agreement to supply backup generators for Amazon's data centers and issued warrants to AMZN, allowing for the purchase of up to 1.69M GNRC shares at $200.93/ share. The warrants vest as Amazon's cumulative generator purchases increase, up to $8B of spend, with ~18% vesting at signing. Initial deliveries are expected to total $2.4B in 2027-28, or an average of $1.2B/yr (vs our prior estimate of >$1.0B).

Warrants Imply A Long-Term Relationship. The warrant agreement suggests Amazon's relationship with GNRC is intended to extend well beyond the initial $2.4B delivery schedule for 2027-28, with Amazon able to earn the full warrant only if cumulative diesel generator purchases ultimately reach $8B, reinforcing our view that the strategic significance o

Stock Was Not Reflecting Much Data Center Upside, Making This Deal More Impactful. GNRC stock has underperformed recently given investor concerns around Trump's EO on foreign-sourced grid equipment and GNRC's use of Baudouin engines. We estimate GNRC is worth ~$185/sh assuming only a sustained ~$1B annual revenue run rate from its first hyperscaler and colo deals. With GNRC trading at $175/sh pre AMZN deal, the stock appeared to be discounting little to no value for any new data center deals.

William Blair industrials analyst Brian Drab told clients that Generac's seven-year deal with Amazon is a "massive win" : 

Our Take. This is a massive win for Generac and provides clarity regarding the demand underpinning management's recently announced plan to triple manufacturing capacity for large-format generators by August 2027. We estimate the agreement will add more than 20% to total company EBITDA in 2028. In addition, the agreement provides strong visibility, with an indication of $8 billion in spend over seven years, for Generac at a time when many investors are questioning the durability of capital spending trends in the data center industry. The agreement also reduces the perceived risk associated with the extraordinary capacity expansion management has in motion. Prior to today's announcement, shares were trading at only 10 times 2027 EBITDA, despite our forecast for greater than 20% EBITDA growth over the next several years. We believe that the signing of this agreement will not only drive material upward estimate revisions but also lower the discount rate applied to the future earnings given increased visibility, driving valuation expansion.

Generac shares surged 34% in premarket trading. If sustained through the cash close, the massive gain would mark the stock's largest one-day gain in Bloomberg data going back to 2010.

Analyst coverage includes 16 "Buy" ratings, six "Holds," and no "Sells," with an average 12-month price target of about $293.

We recently cited Apollo's head of thematic investing, Rob Bittencourt, who said the US reindustrialization is already "underway" and will require trillions of dollars in investment. Bittencourt noted that much of the investing activity has centered on compute-related spending (read the report). Generac's Amazon deal shows how the spending is extending beyond computing hardware into the power infrastructure supporting the data center buildout and powering up America trends. 

Tyler Durden Thu, 09/17/2026 - 07:45

CENTCOM Chief Tells Arab States US Will Not Withdraw From Middle East

Kyle Anzalone via The Libertarian Institute

Commander of Central Command (CENTCOM) Adm. Brad Cooper recently organized a meeting of Israeli and Arab military officials. At the summit, he informed his counterparts that the US military has no plans to withdraw its forces from the Middle East. 

Axios reported it spoke with two Israeli officials who said representatives from Israel, Saudi Arabia, the UAE, Bahrain, Kuwait, Qatar, Jordan, and Egypt attended the summit hosted by Cooper in Germany last week. 

According to the Israeli officials, Cooper told his counterparts the US military would not withdraw its forces from the region despite Iranian attacks on US bases and that Washington planned to expand shipping through the Strait of Hormuz. 

via SPA

Earlier this month, CNN reported that it spoke with six officials who said there were quiet conversations ongoing on reducing the US military presence in the Middle East. Senior Pentagon officials have privately made clear that they want a smaller US military footprint in several Gulf states after the conflict.

While the US is maintaining tens of thousands of soldiers in the Middle East during the war, many of the permanent military bases and intelligence facilities have been damaged or destroyed during the conflict with Iran. CNN reported that it spoke with an official who said the CIA outpost in Saudi Arabia was destroyed. 

Some military and intelligence facilities destroyed during the conflict may not be rebuilt or replaced. Some officials are considering having US special operations and intelligence personnel based in America and travel to the Middle East for specific missions.

Future military bases in the Middle East may be moved underground to protect them in future conflicts.

CENTCOM confirmed the meeting, saying Cooper “hosted senior military leaders from eight nations during a scheduled conference in Germany. The leaders discussed opportunities for enhancing security cooperation in the Middle East.”

At the summit, according to a source familiar with the matter who told Axios, Israel and Saudi Arabia discussed how Tel Aviv could support Riyadh in the war against Ansar Allah in Yemen. Ansar Allah has declared blockades targeting Israeli and Saudi shipping in the Red Sea. 

The Pentagon’s Inspector General reports today that “hundreds” of buildings and structures on U.S. bases in the Middle East have been destroyed by Iranian attacks. pic.twitter.com/B7SD33IrZI

— Daniel DePetris (@DanDePetris) September 15, 2026

Ansar Allah asserted its view that the blockade on Israeli shipping is a response to the genocide in Gaza, while its restrictions on Saudi shipping are retaliation for Riyadh’s renewed military campaign in Yemen.

Tyler Durden Thu, 09/17/2026 - 07:20

We Are Not In A Recession... So Why Are We Borrowing Like It?

Authored by Ken Buck via The Epoch Times,

Despite a lot of talk about fiscal responsibility, lawmakers in Washington are continuing to run up the tab on America's already maxed-out credit card.

The U.S. annual deficit - the difference between the revenue that the federal government collects and what it spends each year - reached $1.8 trillion through the first 10 months of the current fiscal year. With two months still left to go, this year's deficit will exceed $2 trillion.

In non-pandemic years, the U.S. deficit has never surpassed $1.8 trillion in a single year.

Our economy is growing, unemployment remains low, and there is no national emergency forcing the government's hand. So, what gives? Why can't Washington get our fiscal house in order? As the president of the Committee for a Responsible Federal Budget put it, this is "not normal."

High borrowing costs, which are a result of our country's yawning national debt (the cumulative total of each year's deficit), are a major driver. The U.S. Treasury yield, which is the interest rate the government must pay on bonds issued for debt, hit a 19-year high this month, 5.34 percent.

In other words, as the national debt continues to climb, creditors are wary that the federal government will be able to repay its obligations and therefore demand a higher return. That means more revenue - almost 20 cents of every tax dollar, higher than the previous record set in 1991 - now goes to paying interest rather than investing in our country.

The real problem, however, is Washington's unbridled spending spree. Democrats insist on more federal programs, even as the price tag for existing entitlements continues to grow, and annual shortfalls continue to mount. Federal spending increased by 5 percent this year compared to last, while revenue only grew 3 percent.

Sadly, even conservatives have gone along with the ruse. The Big Beautiful Bill, Republicans' landmark reconciliation package last year, promised to cut a lot of government waste and kept taxes low, but it failed to get to the root of the federal growth. Without serious entitlement reform, tax cuts leave the budget hole even larger.

The nonpartisan Congressional Budget Office estimated that the Big Beautiful Bill would add $3.4 trillion to the national debt over 10 years, and as much as $4.5 trillion when factoring in interest payments.

Don't get me wrong, Republicans' tax cuts are a smart way to spur economic growth, which is one way to improve our country's finances. When the private sector can invest its money, rather than pay it to Uncle Sam, it creates jobs and economic activity - which fill the public coffers. The government doesn't create jobs; businesses do. When companies and workers do well, so does the government.

But tax cuts must be offset by meaningful spending reductions. Addressing just one side of the ledger is like damming half a river; it doesn't fix deficits.

Getting our annual deficits in check doesn't mean looking back; it requires looking forward. It's a live decision, one that's happening at the same time the administration is asking Congress for a 19 percent increase in discretionary spending - which would be the second-largest bump in at least six decades.

Lawmakers must look at our deficit-spending addiction holistically. To his credit, President Donald Trump's 2027 budget proposes cutting non-defense spending by 10 percent. However, those gains are more than negated in defense spending. That's a critical priority, but funding must be offset with significant spending reductions. That means programs that have long been a political third rail, including Social Security, Medicare, and Medicaid.

While slashing entitlement historically has not been a winning recipe for getting reelected, voters understand what's at stake, and they want leaders who will make the right decisions.

Over eight in 10 Americans are more concerned about the national debt now compared to a few years ago, and 85 percent want Congress and the White House to do more to address it.

The heightened awareness owes to voters' own understanding. Nine in 10 people realize that our country's debt problem is driving up costs of living and making personal borrowing more expensive.

Eliminating our country's annual deficits is achievable, and doing so will get our national debt on a path to be paid down. But it will take bold leaders who will set realistic goals and have the political courage to achieve them. That's a tall ask in Washington these days, but voters should demand it when they go to vote this fall.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Thu, 09/17/2026 - 06:30

Turkish State Takes Near-Total Control Of US-Sanctioned Bank Over IRGC Ties

On September 4, the US Treasury unveiled sanctions against a Turkey-based bank and two of its subsidiaries, accusing them of moving tens of millions of dollars on behalf of Iran's Islamic Revolutionary Guard Corps (IRGC) Quds Force and facilitating Tehran's movement of funds across the international banking system. 

It did not take long for the Turkish government to sweep in and act to contain the damage and what some interpret as a national reputational hit, which was one of the opening salvoes in the Trump/Bessent 'Economic D-Day' and secondary sanctions (Operation Economic Outcast) targeting Tehran and entities still doing business with the Islamic Republic.

On Wednesday Turkey's banking regulator has taken over most shareholder rights of the US-targeted bank - the Golden ⁠Global Yatirim Bankasi - through the country’s state deposit insurer, TMSF (Savings Deposit Insurance Fund).

Turkish media notes that "The decision gives the fund the authority to exercise the shareholder rights attached to the stakes, while specifically excluding dividend rights."

The newly reassigned rights cover 99.98 percent of the shares in the bank, reports also detail.

Publicly available figures indicate that Golden Global Investment Bank is a small and young bank, having €498 million ($574.5 million) in total assets, and was only founded in 2019.

In the wake of the US action, US Ambassador to Turkey and Trump special envoy for the broader region Tom Barrack had sought to calm the Turkish government by saying Washington is only targeting specific financial institutions and this is not meant as a shot against Turkey itself.

"This designation is aimed at the conduct of one entity, not at a nation, not at a banking system, and not at an ally," Barrack wrote on X.

He further declared it would be "a serious error" to interpret the measure as a judgment on the Turkish ally as a whole.

The country's Finance Minister Mehmet Simsek had simply acknowledged last week that Ankara had taken note of US Treasury announcements - suggesting some kind of serious house cleaning could soon follow.

OFAC alleges the bank was created to help Iranian oil revenues reach Turkey from China, where exchangers converted the funds into cash and gold, and accuses it of opening correspondent banking to Iranian institutions through accounts under Quds Force control. There are reports saying the bank has officially rejected the charges against it.

Tyler Durden Thu, 09/17/2026 - 05:45

Houthis Issue Video Of Saudi F-15 Shootdown, As Ground Clashes Intensify In Yemen

Update(1135ET): The Houthis have released new footage which appears to confirm the earlier Saudi F-15 jet shootdown, with aircraft falling in the Marib area. The footage shows militants celebrating near the wreckage.

Below is the clip as released by Ansar Allah officials, which has since been given confirmation by some foreign and international outlets. It suggests that the Houthis have locally-made ability to down advanced aircraft, which should seriously worry Riyadh and Washington.

مشاهد نوعية لإسقاط طائرة مقاتلة سعودية من نوع F15 وحطامها في محافظة مأرب - 16 سبتمبر 2026م pic.twitter.com/rk0suliePT

— الإعلام الحربي اليمني (@MMY1444) September 16, 2026

According to the latest on the fighting in Yemen, clashes are intensifying:

Yemen’s pro-government Southern Giants Forces say that they are engaged in clashes with Houthi forces on the Kahboub front near the Bab al-Mandeb strait.

The government-aligned forces claim in a social media post that they have inflicted heavy personnel and equipment losses on the Houthi forces.

Global oil prices continue climbing amid a slew of negative headlines:

• WRIGHT: LOOKING AT USING DPA TO INCREASE REFINING CAPACITY
• WRIGHT ON EAST-WEST PIPELINE: 3 PUMPING STATIONS WERE HIT

From bad to worse for the coalition:

Looks like the Yemenis weren't lying about downing a Saudi jet today. pic.twitter.com/2t4tTYoa6F

— Russians With Attitude (@RWApodcast) September 16, 2026

*  *  *

Yemen's Ansar Allah (Houthi) movement has claimed to have shot down a Saudi fighter jet in a Wednesday statement, saying they utilized domestic made munitions to do it.

"The Yemeni Armed Forces, with Allah's aid and grace, succeeded in shooting down a Saudi F-15 fighter jet while it was carrying out hostile operations," Houthi military spokesman Yahya Saree announced.

Royal Saudi Air Force

He said the fighter jet had been targeted "using a locally made" missile over Marib - after the Saudi coalition has launched some 450 strikes. The area of the alleged downing is some 75 miles east of Sanaa.

Saudi authorities have not acknowledged any shootdown and have not immediately commented on the claim.

Overnight, the big news out of the conflict focused on Saudi claims that it had intercepted a Houthi drone targeting Yemen in a "heinous" act targeting Islam's holiest site.

However, the Houthis are vehemently denying sending a drone on Mecca. "Our operations target its oil facilities and military bases, which are far removed from the sacred sites," Saree said further.

The Houthi military spokesman called out the "fabrications and lies propagated by the criminal al-Saud regime cannot deceive anyone."

Missile alerts had been issued for the population of Mecca, and plenty of old and fake social media videos purported to capture footage of a drone inbound on Mecca, but so far no clear evidence has emerged of the alleged targeting.

But the Saudi claims were enough to get Pakistan's Prime Minister Shehbaz Sharif to condemn Wednesday "in the strongest possible terms the dastardly and heinous" the alleged attack on Mecca.

"The people of Pakistan are saddened and perturbed by this outrageous act," he said on X.

Unconfirmed image of downed jet posted by Iranian state media:

On Wednesday morning, Yemeni Army confirmed that it had shot down a Saudi F-15 fighter aircraft over Marib Province. pic.twitter.com/4nk1d1DYi6

— IRNA News Agency ☫ (@IrnaEnglish) September 16, 2026

Pakistan and Turkey just recently this summer signed a comprehensive "Mecca Defense Pact", and the Saudi claims that Mecca was targeted by drone are perhaps intended to secure the help of allies in dealing with the advancing Houthis menace while a Red Sea 'siege for siege' policy is still in effect. As for the lates developments to emerge Wednesday, via Newsquawk:

Houthis say they carried out two military operations, targeting Saudi Aramco in Yanbu with dozens of ballistic missiles and drones and Khamis Mushait Air Base with a number of ballistic missiles.

The damaged Saudi East-West pipeline could still take five to six weeks to come back online, according to some estimates.

* * *

Tyler Durden Thu, 09/17/2026 - 05:01

Apparently This Is Not Criminal Damage...

Authored by Steve Watson via Modernity News,

A Dutch 'activist' who climbed Winston Churchill's statue in Parliament Square, sprayed it with "Zionist war criminal," "Globalise the Intifada" and Hamas-style red triangles, then argued the graffiti didn't count because it could be washed off, has walked out of Southwark Crown Court a free man.

The bill for cleaning the monument ran into thousands. The man who did it has escaped criminal charges.

Olax Outis, also known as Caspar San Giorgi, 39, defaced Churchill earlier this year while wearing a red boiler suit reading "I support Palestine Action." Prosecutor Peter Ratliff told jurors he sprayed the words 'Free Palestine' and red triangles on the front, and 'Never Again Is Now' on the rear. On the plinth he scrawled 'Globalise the Intifada,' 'Stop the Genocide' and 'Zionist war criminal,' plus a Dutch line he later rendered as 'The Hague sends their regards.'

UPDATE: The Dutch Palestine Action fan who vandalised Winston Churchill's statue with slogans like "Globalise the Intifada" and red triangles was just found NOT GUILTY of criminal damage. This country's legal system is a nasty joke. pic.twitter.com/HYmjUTnZGy

— Heidi Bachram (@HeidiBachram) September 15, 2026

A Greater London Authority heritage warden saw him doing it and called the police. Officers were there within two minutes. Specialist cleaners were not far behind. Court figures put the damage at £11,970 when he was first charged. Later reporting on the restoration bill listed more than £7,000, including police barriers at £612 plus VAT and an emergency clean and restore at £6,504 plus VAT.

He denied criminal damage. The paint was washable, he said. He was "sending a message to parliament." He was "preventing a crime." The jury agreed he was not guilty.

In the dock he was unrepentant. "I'm proud to be a citizen of The Hague," he told them. "If I had a larger canvas and more time, I would have written if Keir Starmer doesn't come to The Hague, The Hague will come for him. My wish is to see him on trial in The Hague." On the verdict itself: "Whether you convict me or not is not too much of a concern for me. Whether I get acquitted, deported, imprisoned for years, I can be proud of having spoken about injustice and I have accounted for my actions. I will accept your judgement."

'It is pathetic! It is astonishing! I cannot believe the country we live in.' @MartinDaubney fumes at confirmation that the man who painted 'Free Palestine' on the Chrurchill statue in Westminster being cleared of criminal damage. pic.twitter.com/t4pWNeXiu8

— GB News (@GBNEWS) September 15, 2026

He had already claimed the stunt online. He had come to Britain, he said, to "deface a statue of one of history's most well-known war criminals, Winston Churchill." Churchill, in his telling, was "the Keir Starmer of his time."

Downing Street called the vandalism "completely abhorrent" in February and said Churchill was "a great Briton" who "must be held to account." The Home Office called the vandals "a disgrace." The Greater London Authority said it was "appalled." Six months later a jury decided the spray cans did not amount to a crime.

'Many people find it an abhorrent form of protest.'

Social policy analyst Dr Rakib Ehsan reacts to an activist being cleared of 'desecrating' the Winston Churchill outside of Parliament. pic.twitter.com/w8hNxroiDg

— GB News (@GBNEWS) September 15, 2026

Heidi Bachram, whose husband's relatives were murdered and taken hostage by Hamas, blasted the decision, urging "This country's legal system is a nasty joke,"and adding "He should have been deported." A foreigner, she noted, can "paint a threat to Jews on the statue of our greatest leader with the added red triangle to make clear it isn't the 'peaceful' version of Intifada and GET AWAY WITH IT."

This is the closing speech of Olax Outis where he says he should have done something more "spectacular". Like burning down a weapons factory as a group did in Czech Republic. This is extraordinary and I cannot comprehend this man is walking free. pic.twitter.com/vstz61VJwr

— Heidi Bachram (@HeidiBachram) September 15, 2026

What I don't understand about the jury sympathising with this guy is his blatant disingenuousness. Here he complains about not getting an interpreter while speaking in almost perfect English. We live in Bizarro World. pic.twitter.com/plMYxyn3E5

— Heidi Bachram (@HeidiBachram) September 15, 2026

You won't even get convicted as along as it's 'protest'. I wonder if this would have happened if it were far right messages though.

— Heidi Bachram (@HeidiBachram) September 15, 2026

This is a disgusting ruling that will only embolden far-left thugs to vandalise our national hero's statue time and time again.

Would the same injustice have been done if it were Gandhi's or Mandela's statue that had been defaced? https://t.co/MjwUN4oeh4

— Alex Armstrong (@Alexarmstrong) September 15, 2026

WANKER who did this, desecrated Winston Churchill found not guilty of criminal damage arguing in court the paint washed off.

A Green light for these bastards to do the same to anything else.

Imagine if you threw some of that on a Mosque, your feet wouldn't touch the floor.... pic.twitter.com/pYiYrgKwiG

— Tony (@EvacTony) September 15, 2026

That is the two-tier point, and it is not a slogan. The Met and Greater Manchester Police spent last winter warning that "globalise the intifada" could get you arrested. The same words went up in red on Churchill's monument. The man who put them there told a jury the paint came off. The jury said not guilty.

None of this sits in a vacuum. Churchill is being taken apart in official rooms while activists take him apart in the square.

Last week it emerged the Bank of England had spent more than £85,000 researching how to get him off the £5 note. Consultants told officials that portraits of notable Britons were "elitist and divisive," a "backward-looking vision of the UK that carries too great a risk of division and controversy." Hedgehogs and puffins are waiting in the wings. Nigel Farage called the plan "absolutely crackers." Kemi Badenoch called it "erasing our history."

The same city that cannot convict a man for spraying "Zionist war criminal" across Churchill is being lectured by the UN's racial discrimination committee to put up statues of people of African descent as atonement for slavery - as if Britain had not banned the trade, spent blood and treasure suppressing it, and already spent years ripping down or boxing up its own monuments.

Sadiq Khan's Commission for Diversity in the Public Realm was built for that mood. Churchill's statue was boarded up in 2020. The lecture has not stopped.

Churchill's statue today in London. I'm speechless. pic.twitter.com/lU6Y37my7e

— Antonello Guerrera (@antoguerrera) June 12, 2020

They even installed the punchline. On Trafalgar Square's Fourth Plinth last week City Hall unveiled Tschabalala Self's five-metre Lady in Blue - sold as an "everywoman," a "symbol of confidence and purpose," and, in the CNN version, a win because it is "not another White man." It stands in the ceremonial heart of the capital, opposite Nelson, paid for out of the same public art machine that treats British victory as an embarrassment.

Picture the same red paint poured all over that figure. The press releases write themselves. The outrage would be industrial.

Tyler Durden Thu, 09/17/2026 - 05:00

Belarus Gets Partial US Sanctions Relief After Freeing More Political Prisoners

In a rare development, Belarus - which forms a 'Union State' with Russia, has received partial US sanctions relief after it agreed to free 25 political prisoners. 

President Trump's envoy, John Coale, revealed to reporters in the Belarusian capital Minsk: "We agreed to an interim deal, and as a show of goodwill Belarus will release 25 people and in exchange the United States will lift sanctions on two companies."

Kremlin.ru/ White House

The deal follows a much bigger amnesty for prisoners brokered by Washington that occurred last March. At that time the Lukashenko government freed a huge amount - 250 people.

"We will continue to improve U.S.-Belarus relations and are working to secure the release of more people in the very near future. We are not finished!" Coale had later posted on X.

One regional outlet has outlined what the Belarussians are getting in return:

The two companies to be removed from U.S. sanctions are Lakokraska, a manufacturer of paints and industrial coatings, and Bellesbumprom, a state-owned industrial concern that oversees the forestry, pulp and paper sectors. Sanctions against them have been in place since 2008 and 2023, respectively.

Coale also promised Lukashenko on Tuesday to get U.S. banks to hand back tens of millions of dollars in frozen Belarusian assets.

Back in September of 2025, there had been an initial breakthrough deal which centered on the release of 52 prisoners deemed held on political grounds, such as based on speech or political activism.

Russia's aviation sector has also long been sanctioned, leading to the potential for unsafe travel or possible aerial disasters - as aging fleets are in need of regular servicing, often dependent on access to US and Western parts. This is something Minsk has also sought to grain relief from Washington for.

President Trump has in the recent past indicated that he looks forward to meeting with President Lukashenko in the future, in a sign of a likely further thawing of relations.

BREAKING:

Belarus has freed 25 political prisoners. They are now in Lithuania.

U.S. special envoy John Coale published a photo of those released.

Among them are journalists, musicians, lawyers, and other well-known protest figures. pic.twitter.com/5CH31mdVgJ

— Visegrád 24 (@visegrad24) September 16, 2026

More broadly, this is also part of US efforts to reverse spiraling bilateral relations with Moscow, given that Russia and Belarus work hand and glove in defense, economic, and political areas. Belarusian territory has long been a staging ground for Putin's 'special military operation' in Ukraine as well, and hosts Russian tactical nukes - which Europe has long kept a very close eye on.

Tyler Durden Thu, 09/17/2026 - 04:15

Britain's Speech Police: How The State Learned To Fear Its People

Authored by Paul Birch via The Daily Sceptic,

Many of us in Britain still flatter ourselves that we live in a free country. Although the UK isn't quite a police state (not yet anyway), neither is it a country in which the individual can any longer speak without glancing over his or her shoulder. The old compact of a liberal society was simple - the state punished genuine criminality, while opinion was left to the rough justice of argument, satire and public disagreement.

That compact has now been comprehensively torn up. Across Britain, speech that would once have been answered by rebuttal or humour is now treated as a matter for police, regulators and secretive Whitehall machinery. A report published this week by civil liberties and privacy campaigning organisation Big Brother Watch states that more than 62,000 people in the United Kingdom were arrested for communications offences over a five year period, with at least 18,500 charged and 12,292 convicted. These numbers should alarm anyone who still believes the citizen is master and the state is servant.

This is not some marginal administrative adjustment. It is the apparatus of speech control operating on an industrial scale. Some cases will involve genuine threats - stalking, domestic abuse or harassment - and those cases should, of course, be investigated. But when arrest numbers vastly outstrip those of conviction, as is highlighted in the report, it is clear the process itself has become the punishment. The knock at the door, the search, the device seizure, the interview, the stigma, the potential loss of employment and the unmistakable lesson to everyone watching - keep quiet.

Worse, enforcement appears completely arbitrary. Big Brother Watch has described a "postcode lottery" of speech policing, with sharply different arrest rates between forces. Cumbria was reported as arresting people at dramatically higher rates than neighbouring Northumbria (although Cumbria Police has history when it comes to 'woke' policing). Liberty which varies by postcode is not liberty at all. It is permission, granted or withheld by local institutional mood. If the same national law produces radically different policing outcomes, the law is either too vague to restrain power or too tempting for power to resist.

The root of the problem lies in modern speech law and its elasticity. The Crown Prosecution Service guidance on communications offences covers offences under the Malicious Communications Act 1988, the Communications Act 2003 and Part 10 of the Online Safety Act 2023, including offences involving false or threatening communications. The framework encompasses messages said to be "grossly offensive", "indecent", "obscene" or "menacing". Those words may sound reassuring in a statute book, but in the hands of ideological bureaucracies they become draconian tools to subdue inconvenient perspectives.

Recent cases expose the rot. In Hertfordshire, Rosalind Levine and Maxie Allen were arrested after complaints about their daughter's primary school appeared in a parents' WhatsApp group. They were held for eleven hours on suspicion including harassment and malicious communications. Hertfordshire Police later admitted the legal criteria for arrest were not met and agreed to pay them £20,000 in compensation. This is what happens when public bodies discover that the police can be weaponised as a complaints department with handcuffs.

The same authoritarian drift is visible with the now notorious notion of the Non-Crime Hate Incident. The clue is in the name - no crime has been committed. Lawful speech has been recorded by police in a way that brands ordinary people with a quasi-criminal stain. The College of Policing has now proposed major reforms, explicitly recognising that lawful free speech is not a police matter and that personal data should be recorded only where there is a clear policing purpose. That admission matters. It is an institutional confession that the state wandered far beyond its proper boundary - although it remains to be seen how police senior management across the country, many of whom are politically motivated, interpret these reforms.

My final role in policing involved facilitating the removal of terrorist content from the internet. This consisted of clear, unequivocal material glamourising proscribed groups, often including graphic footage of combat and the murder of captives. However, we began to notice that we were being tasked increasingly to assess content which was much more subjective: not violent or calling for violence, but 'hateful' - and only if viewed from a very specific point on the philosophical spectrum. This became more apparent with the establishment of police hate crime teams, and the fact that pursuing a nebulous 'far Right' was something which could gain one significant career advantages.

Then there is the darker machinery of government itself. Big Brother Watch's ' Ministry of Truth' investigation alleged that secretive Whitehall counter-disinformation units monitor lawful political dissent online, including politicians, journalists, academics, campaigners and members of the public. In counter-terrorism policing, we were aware of the existence of some such units, but it is now clear this operation is much more extensive and that it runs much deeper than at first thought.

The public are told this is all about 'misinformation', but it has drifted into monitoring criticism of government policy. This is how censorship grows in a democracy - not with bonfires of books, but with dashboards, 'trusted-flagger' relationships, 'narrative' reports and officials quietly nudging platforms to reduce the reach of inconvenient opinions.

The Online Safety Act has only exacerbated the danger by shifting censorship pressure onto content service providers. Defenders say it targets illegality and protects children. Yet the predictable and inevitable result of duties, regulatory risk and political panic, is over-removal. Platforms don't need to be commanded in plain language to censor; they need only be made afraid. Risk-averse companies will hide lawful speech, demand identity checks, throttle debate and call it compliance. The censor's hand now often wears a corporate glove, especially if advertising revenue streams are threatened.

A serious country punishes tangible threats, criminality and violence. It doesn't send the police after off-colour jokes, parental complaints or political dissent. We have to choose. We can choose to remain a liberal democracy in which the state respects the citizen, or we can become a managerial state in which the citizen fears a file, a knock on the door, a call from an online safety team or the quiet downgrade of their opinions.

Speech offences need to be drastically narrowed to those which call for direct violence or harm; ideological intelligence-gathering against lawful expression should be abolished; regulators ought to be restrained, and government content-flagging outside the terrorist space must be transparent.

Free speech isn't a courtesy extended by ministers, chief constables or Silicon Valley compliance teams. It is the condition of citizenship in any civilised country. Without it, liberty is just a word in the dictionary.

Tyler Durden Thu, 09/17/2026 - 03:30

Russian Frigate Fires Flares At Danish Military Helicopter, Copenhagen Summons Ambassador

There's been another dangerous incident and major 'close call' involving a Russian ship in international waters off Europe.

In this case, which unfolded Monday, a Danish military helicopter reportedly hovered near a Russian military frigate, seeking to monitor and photograph it.

Illustrative, via Naval Technology

Soon after, according to the account of Danish military officials, the Fennec military helicopter was fired upon by flares from the Russian ship.

It happened in the Baltic Sea, after which Moscow's ambassador in Copenhagen, Vladimir Barbin, laid blame solely on the Danish side for the helicopter's "dangerous maneuvers".

One of the flares, which are typically only used for warning signals at sea when a ship is distressed, is said to have passed dangerously close to the helicopter.

Danish Prime Minister Mette Frederiksen called the incident serious and framed it as an extension of Russia's so-called hybrid campaign against Europe and NATO.

"Russia wants to sow fear and discord. Our answer is to stand closer together and strengthen the defense of Denmark and Europe," Frederiksen said.

And the country's Foreign Minister Lars Løkke Rasmussen also condemned the event as having endangered lives.

"Denmark is working to ensure that all shipping can pass peacefully through Danish waters, but Russia is gradually moving the line for what it considers acceptable behavior," Rasmussen said, and confirmed he summoned Russia's ambassador.

Below is an example of European media playing the hawks, pressing officials over invoking NATO Article 5 'collective defense':

Denmark’s Defence Minister Jeppe Bruus told TV 2 News that one flare passed within a “matter of metres” of the aircraft, and accused Russia of “deeply unprofessional seamanship”.

When asked if Denmark would seek Article 5 consultations over the incident – invoking the NATO measure that considers an attack against one member of the bloc to be an attack against all of them – Bruus said the incident was being taken seriously, but “we are not there”.

Barbin said he had complained last year about what he called dangerous fly-bys and low hovering by a Danish helicopter over the Russian warship Vice-Admiral Kulakov.

Tensions have been soaring between Russia and Scandinavian countries of late in northern waters, particularly after early this month Norway seized a Russian government expedition vessel as it was docked at a far northern island, deemed an international zone.

Russia's Defense Minister awards corvette commander for 'DECISIVE ACTIONS' against a Danish helicopter in Baltic Sea neutral waters

Danes approached Russian warship & IGNORED international communications on Sept. 14

To prevent provocation, commander fired 2 red flares — Danes… pic.twitter.com/WXOMie2ZTK

— RTRussia (@RT_Russia_) September 16, 2026

Putin had described the incident as Ukraine's Western backers being "complicit in international terrorism" - given the seizure came at the request of the Zelensky government.

Tyler Durden Thu, 09/17/2026 - 02:45

Turkey Takes On Houthis? Any Support To Saudis Faces Huge Blowback

Via Middle East Eye

Turkey's new commitments to Saudi Arabia under the Mecca defence pact could increase the risk of Ankara being drawn into a confrontation with Yemen's Houthis, a development that could have significant consequences for Turkish supply lines to the Horn of Africa. Although Turkey has yet to ratify the pact, expected in October, continued Houthi attacks against Saudi Arabia, and Ankara’s recent participation in the Saudi-led Multinational Maritime Defense Alliance make some form of confrontation possible.

Several regional experts interviewed by Middle East Eye said Ankara does not want a clash with the Houthis. Instead, they suggested Turkey could use its relationships with Saudi Arabia and Iran to help defuse tensions while deploying military equipment to help Riyadh better defend itself. 

A Turkish official told MEE that Riyadh had not formally requested Ankara’s assistance under the Mecca pact, which brings together Turkey, Saudi Arabia and Pakistan. However, experts also noted that Ankara has much to lose from an escalation, which could disrupt Turkish military, commercial and energy supply lines through the Red Sea.

Turkey's Somali Naval Task Group on an escort and protection mission for the Cagri Bey Drilling Ship & support vessels off the coast of Somalia. Source: Turkish Defense Ministry

Ebuzer Demirci, a research fellow at the Secure Futures Lab at the University of Toronto Scarborough, said Bab al-Mandeb, which has effectively been controlled by the Houthis since the weekend, is a gateway to China, India and East Africa for Turkey. Any restrictions imposed on Turkish shipping would increase trade costs and transit times.

“But the more specific exposure is Somalia,” he told MEE. “Turkey’s presence there - the embassy, the military training base in Mogadishu, offshore oil exploration activities and the spaceport project - is supplied from Turkey through the Suez-Red Sea route.”

Demirci added that although personnel and urgent cargo are transported by air, heavy equipment and naval rotations move by sea and must pass through Bab al-Mandeb.

“Somalia itself trades with the Gulf and Asia through the Indian Ocean and would not be cut off by a closure,” he said. “What would be affected is the direct line between Ankara and Mogadishu, at a time when piracy off Somalia is already rising again.”

Risks of a direct intervention

Demirci said Houthi restrictions would not completely undermine Turkish influence in the region, since it is rooted in institutions in Somalia and other African countries rather than being solely dependent on maritime traffic. Turkey could also sustain its operations through air transport, he added, although at a substantially higher cost.

Turkey already has a naval presence in the region. Turkish warships are guarding an energy exploration vessel off the Somali coast, while Ankara separately continues to participate in a UN-backed anti-piracy mission in the Gulf of Aden.

Senior Ansar Allah official Mohammed al-Bukhaiti last week warned Turkey and Pakistan against intervening in support of Saudi Arabia, saying that any direct Turkish or Pakistani intervention on Saudi Arabia’s behalf would carry a “heavy price”.

The general view in Ankara is that Turkey cannot afford a confrontation with the Houthis and should instead focus on building bridges among Saudi Arabia, Iran and the Yemeni group.

Betul Dogan-Akkas, an assistant professor of international relations at Ankara University, said Turkey has not designated the Houthis as a terrorist organization, leaving open possible channels of communication.

She argued that Istanbul’s sizeable Yemeni diaspora, whose members have deep tribal connections, could provide Ankara with valuable political capital and allow it to become more diplomatically involved in efforts to resolve the war in Yemen. “The members of the Mecca alliance would probably not want their first action to be directed against another Muslim group,” she told MEE.

Israel's military has meanwhile been deepening involvement in 'Somaliland' region, after Netanyahu govt. gave official recognition.

Source: TOI

Muhammed Huseyin Mercan, an academic and senior fellow at the Ankara-based think tank Seta, agreed, saying that military intervention would create complications extending well beyond the Red Sea.

Pointing to last week’s attack by Iran-aligned Iraqi militias on the East-West Pipeline supplying Yanbu in Saudi Arabia, Mercan said a Turkish confrontation with the Houthis could also strain Ankara’s relations with Baghdad and complicate peace efforts involving the Kurdistan Workers’ Party (PKK).

Ankara has recently made progress in persuading the PKK and affiliated groups to dissolve themselves and integrate into local political and administrative structures, with Baghdad playing a crucial role in that process.

Mercan said Iraqi militias could disrupt these efforts and create additional complications for Turkey. The militias have demanded the complete withdrawal of Turkish troops from northern Iraq as part of negotiations over their own disarmament and integration into the Iraqi armed forces. “Turkey should try to bring all sides to the table and help lay the groundwork for a comprehensive agreement to end Yemen’s civil war,” he told MEE.

Defensive aid and political role

The experts agreed, however, that these risks would not necessarily prevent Turkey from providing Saudi Arabia with military equipment, air-defense systems and drones. There are signs that Ankara intends to do precisely that.

Senior regional officials familiar with the discussions told MEE that Turkey was preparing to provide defensive assistance while avoiding direct intervention inside Yemen.

The officials said the assistance could include the deployment of aircraft, operators and technical personnel, possibly beginning in October after Turkey ratifies the Mecca defense pact. The Turkish parliament is currently in recess and is not expected to consider ratification before then. “Preparations and discussions are ongoing,” one regional official said. “The defense system will be established to counter attacks originating from Yemen, including missiles and drones.”

Turkey is already active in the Saudi defense establishment and in recent years, Ankara has signed several drone and ammunition supply agreements with Riyadh 

Demirci said the most likely scenario at Bab al-Mandeb was not a complete closure of the strait but selective Houthi control. Under such a scenario, the group could apply pressure to Saudi-linked traffic while allowing other ships to pass under conditions it sets.

A Turkish Navy warship arrived in Somalia’s capital, Mogadishu, on Saturday and docked at the Port of Mogadishu.

The vessel, TCG Göksu (F-497), is a Gabya-class frigate that has previously operated off the Somali coast as part of Turkey’s naval mission in the region.

The… pic.twitter.com/lWUUNHGJQx

— Somali Eye (@Somalieye122) September 5, 2026

That could prove costly and disruptive for Ankara, he said, but would remain manageable. “What the Houthis should understand is that Turkey’s commitments in this region are not abstract,” Demirci said.

“Ankara has a defense agreement with Riyadh, a defense agreement with Mogadishu and a founding seat in the maritime coalition. The Houthis have no quarrel with Turkey, and it is in their interest to keep it that way.”

Yasmeen al-Eryani, executive director for knowledge production at the Yemeni think tank Sana’a Center, said the crisis also presented Turkey with an opportunity to assume a political role as a secondary intermediary. “For example, it could contribute to mitigating the impact of the Houthis’ dangerous advance in Bab al-Mandeb,” she told MEE.

“Turkey has actively strengthened its relations with Saudi Arabia while maintaining a delicate balance with Tehran. It can help convey messages, promote de-escalation and mitigate the impact of the conflict.”

Tyler Durden Thu, 09/17/2026 - 02:00

9 Terrifying Truths About Long-Term Economic Crises

Authored by Milan Adams via Preppgroup,

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

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

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

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

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

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

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

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

First Reality: The Joblessness That Doesn't End

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

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

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

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

Second Reality: When Ordinary People Become Desperate

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

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

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

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

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

Third Reality: The Fires That Spread

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

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

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

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

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

Fourth Reality: When the Medicine Becomes Poison

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

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

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

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

Fifth Reality: The Thin Thread of Global Commerce

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

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

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

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

Sixth Reality: When Trust Evaporates

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

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

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

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

Seventh Reality: When Calories Become Currency

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

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

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

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

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

Eighth Reality: When Infrastructure Meets Inevitability

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

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

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

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

Ninth Reality: The Only Preparation That Matters

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This changes what flight control is expected to do.

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

The first major capability is autonomous flight control.

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

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

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

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

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

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

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

The second major change concerns navigation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The proposed solution was a layered architecture.

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

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

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

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

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

How Trump's Iran Operation Turned Into A Forever War

Authored by Harrison Berger via Responsible Statecraft,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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