Zero Rss

Iran's Military Believes US Is Preparing To Resume Attacks

Iran's central military command has announced it believes the United States has made the decision to resume military attacsk on the Islamic Republic.

Citing the country's General Staff of the Iranian Armed Forces, state media IRIB states that "According to intelligence received, the US has once again decided - with the green light from certain regional countries - to resume actions against Iran during a joint meeting in a European nation."

Getty Images

At the same time Iranian leadership again warned US allies in the region that they'll be considered "complicit" if the US resumes it military assault on the Islamic Republic. The Iranian military HQ stated that "any mistakes will result in painful attacks."

Tehran further indicated Sunday that it is still awaiting Trump's response to its conditions for ending the war. Its chief negotiator Mohammad Bagher Ghalibaf confirmed to AFP that Iran's demands were sent to Washington via the Qataris.

Starting Saturday night there was an avalanche of online chatter over potential new escalation, given President Trump abruptly cut short a visit to Camp David.

Some pundits saw in this a sign of some kind of imminent military action in the Middle East, also amid reports that extra military hardware is being sent to the region.

But others have suggested this is just setting up for another TACO moment, and reports of escalation is just the White House trying to instill fear and uncertainty in Tehran.

There's also speculation that Washington could be moving towards direct intervention in the Saudi-Yemen conflict, after the Houthis have been attacking key Saudi Aramco oil sites. Also, Riyadh has just come under attack for the first time of the war.

INSIGHTS: There’s a TON of very obvious signaling taking place right now for imminent massive escalation against Iran.

President Trump, just after Camp David, is returning early to the White House (and reported on by Barak…).

Bibi Netanyahu is cutting his U.S. Tour a day… https://t.co/ntsZHwJj00

— Brett Erickson (@BrettErickson28) September 19, 2026

In the background is a new State Department warning to Americans to avoid all travel to the Middle East. A statement indicated that the Iran war could quickly worsen.

“This military conflict has the potential to escalate rapidly. Americans outside the Middle East should seriously reconsider travel to and through the region,” the State Department said late Saturday on X. It said that Americans currently in the region should "exercise heightened vigilance and be aware of potential flight cancellations, airspace closures, and travel disruptions."

Tyler Durden Sun, 09/20/2026 - 17:00

Trump Says His Planned DC Arch Would Host Drones And Snipers

Via Headline USA,

President Donald Trump said Sunday that the massive arch he wants to build between the Lincoln Memorial and Arlington National Cemetery would become a "top grade military complex" able to host drones and snipers while storing ammunition.

It is one more example of how Trump is insisting that his initiatives to beautify the White House and the city are also serving a defensive purpose.

Trump has been calling the new White House ballroom a "military complex" and arguing it is necessary for national security purposes.

The Republican president said in a social media post that he had agreed, at the "strong request" of the military, to convert the planned 250-foot-tall memorial arch "into a top grade Military Complex/Triumphal Arch, to house, store, and have the rapid ability to use large numbers of drones, plus Snipers, on both the roof and plaza areas, and additionally have and hold large quantities of sniper ammunition in storage."

Trump says planned arch to have ammunition storage and staging areas for snipers pic.twitter.com/Y1MpaPLO9J

— Jennifer Jacobs (@JenniferJJacobs) September 20, 2026

After teasing it in October 2025, Trump has continued to promote his vision for a 250-foot triumphal arch situated between the Lincoln Memorial and Arlington National Cemetery.

The arch will “celebrate the triumphs of the American people, inspire patriotism and love of country, and beautify our nation’s capital,” the Department of the Interior, as its sponsor, declared in its project materials.

The arch (one of several projects that the Republican president is pursuing to leave his lasting imprint on Washington) is currently awaiting final approval from the National Capital Planning Commission (NCPC), a federal review panel dominated by Trump appointees.

Among the others are the white House ballroom, renaming and renovating the Kennedy Center, refurbishing the Lincoln Memorial Reflecting Pool and rebuilding a golf course in East Potomac Park that could significantly reduce the public's access to running and biking paths.

Rep. Don Beyer (D-Va.) on Sunday criticized Trump’s announcement.

“Putting a drone launching site directly in the landing path for [Ronald Reagan Washington National Airport] is a stupid, dangerous, and unworkable idea,” Beyer said on X.

“Trump clearly expects to lose a lawsuit and therefore wants to set up a pretext to argue that the arch is tied to national security.”

 

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

With The Fed Behind Us…

By Peter Tchir of Academy Securities

With the Fed Behind Us…

The 10-year Treasury sold off after the Fed bounced Thursday, only to resume selling, finishing the week just under 5%. Stocks, which seemed to move up and down with Treasuries, decided to move to the beat of their own drum into the close on Friday. Similarly, for the past few weeks, it seems that if you knew oil was up/down, you could predict yields would be up/down. Not on Friday.

On this special day we will build on Thursday’s post-FOMC report: Back to Regularly Scheduled Programming. You might be wondering “what makes today special”? Well, for the first time ever, the T-Report has the same access to the White House as CNN, though not quite how we hoped it would happen. The ban definitely seems weird. Not sure what to make of it, and maybe it will be nothing, but it does seem strange at the very least.

In Thursday’s report we touched on:

• Oil and energy prices, which we will focus on more today.
• Japanese Yen. Support has broken the 155 level solidly (closing at 156.9), which is likely to cause it to weaken further as a lot of people were willing to bet on I Am the House Now Bessent.
• Compute Build and AI Spend. Increasingly, this is likely to be a focus of this week’s Trump/Xi summit.
• Space. We need to do more to focus on the opportunities and risks (commercial and national security) for space. Working with some of Academy’s GIG members to more thoroughly assess this, as the national security aspect seems to be gaining more attention.

The Houthis and Saudi Arabia

Should we be treating what is going on between the Houthis and the Saudis as a subset of the Iran/U.S. war? The Houthis are, after all, a proxy of Iran. The Saudis have been working with the U.S. and the President, so are they merely just an ally? A subset, an extension, or something in its own right?

While Iran is likely influencing the Houthis and certainly has given them the tools to cause havoc and mayhem, the Houthis seem to be taking the initiative. Maybe they see the U.S. as distracted with Iran. Maybe they see the U.S. testing the Saudis’ loyalty as an ally. In any case, it seems like they have seen an opportunity and are taking strides to set their agenda in and around the Red Sea. They have seemingly gone out of their way to avoid any attack against U.S. assets. Instead, they are hitting the Saudis where it hurts: their energy industry. And according to reports, that includes jet fuel facilities at the airport.

We cautioned about getting excited that the pipeline damage inflicted on the “alternative to the Strait” pipeline would be repaired quickly. One, the damage seemed more extensive than just to the pipeline. Two, and more importantly, there is no evidence that new strikes could be thwarted. It seems like we should start pricing in “disruptions” to the energy complexes that are outside the scope of the U.S./Iran conflict.

Will the Saudis be able to defend themselves? Will they “beg” America to get involved more directly? If they do, will the U.S. get involved? Will they try to disrupt traffic through the Red Sea? If so, how much can they do before the U.S. gets involved? I’d ask how much before Europe would get involved, but that seems like it is too unlikely to even think about (they probably should, but it doesn’t seem imminent).

Markets seem to only react badly when actual events affecting energy prices occur. Markets seem to react positively to any story, rumor, or hope that is positive. That relationship may need to change…

Even My Mother Knows Diesel Prices are High!

Usually, by the time my mother knows something is affecting financial markets, it is a pretty good time to fade the trade as it has become totally consensus. I’m not so sure about that this time.

Since the war began, we’ve been focused not as much on oil, but more on LNG and Diesel. Both are “tighter” than oil itself. More susceptible to supply chain disruptions. Less flexibility to work around. So rather than “fading” something we’ve argued that people should focus on, we should just embrace that people (including my mother) are now thinking about the dangers of rising diesel prices: for industry, transportation, and agriculture (and maybe the “back up” generators at some data centers).

We already busted through the “red circle” that we had in last week’s version of this chart.

This is a big deal and has created some chatter about restricting diesel exports from the U.S. As discussed in prior reports, that is not likely to work (even with restrictions, the domestic price isn’t likely to deviate too far from Global Price minus Transportation minus Storage). It is also likely to hurt U.S. companies going forward as customers entering into new contracts need to consider this possibility (plus there are likely to be some legal challenges).

Rising diesel prices are high on my list of inflation pressures that are mounting and difficult to control (unless you are in charge of the war efforts).

One Path to Victory with Iran

Anything could happen. We could all wake up on Monday to find that there is a “deal” that is on the table and close to getting done. We did have an MOU after all (though from day 1, it seemed that although we all saw a written version, there were “unwritten” versions or promises made, that were inconsistent and it seemed like neither side had really listened to what the other side had said or wanted). I won’t discount some sort of “deal” but it seems difficult to believe that it will be one the U.S. can claim as a major victory, if it happens now (given the current news flow surrounding the war).

The economic sanctions could pressure Iran into a deal. The blockade has been very successful. Iran seems to be able to “contain” the amount of trade going through the Strait against their interests (some is going through, but Iran is still able to scare many into not trying to run through the Strait).

• Can the increased focus on sanctions work? Sure, but in a matter of weeks? Hmmmm…I find it difficult to believe that a nation that kills its own citizens on an industrial scale will collapse in weeks, or even a couple of months. They have had experience with evading sanctions for decades, albeit sanctions not being enforced as strictly as they are supposedly being enforced now.
• It remains unclear how sanctions will work unless the U.S. is willing to go after China (and Turkey) to the full extent of what Bessent has outlined. So far, that doesn’t seem to be happening. It will almost certainly be a discussion point this week for Trump and Xi.

Sanctions are helping and might be enough to force a good deal, but that doesn’t seem like a “tomorrow” sort of event.

Increasingly, we are being asked about “knocking out” Iran’s infrastructure. Could that happen? Yes, but here is a quick assessment:

• Anything clearly military focused has already likely been hit and destroyed.
• That leaves “dual use” facilities. Facilities that have both a military use and a commercial use. Let’s say energy sources close to military facilities that also service communities. Some of these are viable targets as the military usage is enough to justify going after them. Similar for some bridges necessary for moving troops or armaments. But this can be tricky: on a legal and humanitarian level. Global perception, while not necessarily at the top of the admin’s concerns, should still be a concern.

This is a possible path for the U.S., but it could be a difficult balancing act of doing enough to force change, without doing too much reputational (or even legal) damage.

Taking the Islands that control the Strait: after the midterm elections.

One theory that General (ret.) Bellon discussed this week is taking action to secure the islands that control the Strait, culminating possibly with Kharg Island.

The rationale is:

• Wait until after the midterms, because risks to U.S. troops will increase, but it won’t be as politicized as it would be prior to the elections. Prior to the election, IRAN WILL HAVE MORE OPTIONS than after the elections. Basically, if Iran believes the midterms represent a hurdle to Trump, they can take different actions than they can after the midterms have occurred. There is no longer some “deadline” for Trump, giving him more flexibility and changing Iran’s response function. This makes a lot of sense.
• Sanctions may work to create a deal, but anything resembling a different regime is not likely. Taking the islands that control the Strait, and eventually Kharg Island itself, would cripple their energy industry and demonstrate real weakness on their part. It will be difficult to do without loss of further life, but when so many other options leave us with a “kick the can” option, the President may decide an option that has horrible costs may be better than going through this effort every few years.
• Signaling the will to do this might be enough to change Iran’s negotiating stance. Taking even one small, relatively insignificant island that is the easiest to defend may also change the calculus for Iran. The U.S. might win not by taking every Island, including Kharg, but the start of turning a threat into reality could be enough.

What to watch for:

• The U.S. moving vessels with top-notch medical facilities into proximity (less than 1 hour by helicopter, say as a guideline) would be a good indication. The military’s commitment to saving each and every life possible, and providing the best care possible, is real. So, they would need to move these vessels that can perform state-of-the-art surgery and operations, close enough to help any soldiers needing aid.

Of all the discussions that I’ve heard around a “post-midterm” victory, this path seems reasonable. Maybe the theory would even be that once Iran sees the ships moving in, and knows the President isn’t potentially hamstrung by upcoming midterms, it capitulates and looks for a deal? Maybe a bit optimistic, but it resonates with me.

Greenland Deal

The President announced a deal. I will reserve comment until we see the terms of the actual deal (so far, as has become the norm, there are all sorts of assertions from a variety of sides, with little documentation).

The deal could be a real game changer, as the President implied via Truth Social. It might just be an updated formulation of agreements already in place (never hurts to update something that was written long before the polar ice caps were melting, when computers were the size of a house, and rare earths and critical minerals weren’t required in vast amounts).

A win in any case, but how much of a win remains to be seen. And could it have been done without all of the “annex” / “take” Greenland rhetoric?

Trump and Xi

We will provide a full take on this on Tuesday morning, as we work with the GIG to figure out what is likely the highest priority on both sides.

A few months ago, trade, rare earths, and critical minerals would have been high on that list. A few weeks ago, Iran and global energy had to be high on that list.

Now, cyber, AI, and compute have to be highest on the list.

At first blush, on most of these issues, the U.S. seems to need more from China than they need from the U.S. Never a great way to enter into a summit with China, but we will delve deeper on Tuesday.

Bottom Line

I’m running out of time in Vermont, and it might be nicer to spend it outside rather than at my laptop (and the Wi-Fi is spotty at best).

Diesel and the Middle East are key to rates.

For now, I think the path for energy prices (and stocks) and rates (globally) is higher. The news flow has not been positive this weekend, and it is difficult to see that changing quickly as Trump seems to be focused on dealing with Iran from a “stronger” position after the midterms (not stronger in terms of having the support of the House and the Senate, stronger because the perception that he has a deadline is gone).

For compute, Cheap Chinese Compute remains a concern.

It is difficult to get all “warm and fuzzy” about the outcome of this summit for markets. More choppiness seems to be the order of the day, with a bias to the downside for me on the compute spend story (though good for their credit spreads).

We get to bookend this week with a Monday morning appearance on CNBC and Friday morning on Bloomberg to analyze the results of the summit!

Should be another interesting week that we all have to navigate. Even with the Fed behind us, we will be paying attention to the data that may determine the next move for the Fed, but Iran, the Houthis, diesel, rates, and the summit are all going to move markets (hopefully in accordance with how we are recommending positioning).

Tyler Durden Sun, 09/20/2026 - 15:30

Grassley Urges Diesel Export Ban As Global Fuel Crisis Stokes Resource Nationalism Fears

"With diesel at $6.57 in Iowa, why doesn't Pres. Trump put an embargo on diesel exports like presidents in the 70s put embargoes on ag products bc food prices were inflated," Iowa Sen. Chuck Grassley wrote on X late Saturday night.

Grassley warned, "High diesel prices ARE KILLING FARMERS' INCOME."

W diesel $6.57 in Iowa why doesn’t Pres Trump put an embargo on diesel exports like presidents in the 70s put embargoes on ag products bc food prices were inflated. High diesel prices ARE KILLING FARMERS INCOME #cornwatch #soybeanwatch

— Chuck Grassley (@ChuckGrassley) September 20, 2026

Grassley is not wrong about the global refining crisis that is squeezing farmers and anyone else who uses the industrial fuel that powers the economy, from truck drivers and freight operators to businesses across virtually every industry. 

The risk now is that an economic shock could materialize if fuel costs stay elevated, with the latest AAA data showing the nationwide average diesel price set to cross $6.50 a gallon.

Chatter on Capitol Hill about a diesel export ban has increased, with Senate Majority Leader John Thune telling reporters last Tuesday that he is "open to exploring" the idea.

Any ban on refined petroleum product exports would escalate resource nationalism and could initially boost domestic availability and lower U.S. wholesale prices, particularly near export terminals. The problem is that domestic relief would be uneven because shifting barrels to the Northeast or West Coast would be difficult.

Barclays refining and midstream analyst Theresa Chen warned last week, "We continue to view the possibility of an export ban as both detrimental to the US refining complex and unlikely to provide the intended price relief."

The ban could weaken production incentives. If retained fuel overwhelms domestic storage and distribution capacity, weaker refinery margins could eventually encourage lower refinery runs.

On top of that, foreign buyers of the industrial fuel would need replacement cargoes, which could exacerbate the global shortage and accelerate resource nationalism as other governments tighten control over fuels. Those restrictions could also extend beyond energy products to critical materials.

Grassley’s call for an export ban faces resistance within the Trump administration. Interior Secretary Doug Burgum said last week that restricting oil or fuel exports would be unlikely to lower consumer prices and could provoke retaliation from trading partners.

The risk now, as Bloomberg Intelligence senior commodity strategist Mike McGlone warned last week, is that a diesel crisis could trigger an economic shock similar to what happened during the 2008 energy crisis.

Tyler Durden Sun, 09/20/2026 - 15:00

Stolen $586,000 Copper Shipment Found Hours Later At Kentucky Warehouse

A load of copper worth nearly $600,000 was recovered on Sept. 11 after investigators followed a trail from Illinois to Kentucky and Ohio, wrapping up the initial search only about eight hours after the theft was reported, according to Yahoo News.

The case began when a shipment scheduled to travel from DeKalb, Illinois, to Rock Hill, South Carolina, never made it toward its intended destination. Authorities believe whoever collected the freight had presented themselves as an established trucking company, using genuine business information to make the pickup appear legitimate.

The breakthrough came from location data tied to Schneider National equipment involved in the haul. Rather than heading southeast toward South Carolina, the freight was traced to Prestonsburg, Kentucky, where police found the entire six-pallet copper shipment inside a warehouse. Three people were detained in Kentucky.

Photo: FreightWaves/Yahoo News

Meanwhile, investigators continued following the equipment used to move the load. A Schneider chassis and container were located in Chillicothe, Ohio, while state troopers separately intercepted the tractor associated with the pickup. One additional person was taken into custody in Ohio.

Yahoo reports that the operation involved authorities in Illinois, Kentucky and Ohio, along with Schneider National and CargoNet, which had helped flag the theft. Information about the truck, trailer and driver was quickly distributed among agencies as investigators attempted to follow the shipment across state lines.

Police are now examining whether the incident may overlap with another theft involving Schneider equipment and whether the people or trucking identities involved could be part of a wider cargo-theft operation. So far, authorities have not publicly identified the four people detained or disclosed what charges they may face.

The episode also illustrates how freight theft has evolved beyond simply stealing unattended cargo. Criminals can use authentic company information to appear legitimate long enough to take control of valuable shipments. In this instance, rapid reporting and tracking technology allowed investigators to locate both the cargo and much of the equipment before they could disappear further into the supply chain.

* * *

Tyler Durden Sun, 09/20/2026 - 14:00

'Keep Digging'... Says Shovel-Salesman Jensen Huang

Submitted by QTR's Fringe Finance

Maybe it’s the bullshit detection genes that were passed down to me from my mother, but I simply can’t wind up trusting a word Nvidia CEO Jensen Huang says about how much AI regulation the United States needs.

Just call it a gut reaction from me. It doesn’t mean Huang is necessarily wrong about AI. It’s just that I look at him and all I can see is one of the most financially conflicted people on planet Earth to ask about AI regulation.

According to CNBC, Huang has increasingly gained President Trump’s ear on AI policy, appearing alongside him repeatedly and pushing a relatively simple message as concerns about AI safety mount: keep moving, keep building and don’t let regulation get in the way.

What an astonishing coincidence that this also happens to be fantastic policy for Nvidia, which sits at the nerve center of a multi trillion dollar AI infrastructure boom…which itself sits at the nerve center of an even larger global economic ponzi scheme (hereinafter referred to as: the global economy).

Nvidia’s chips are effectively the picks and shovels of the entire operation. Every hyperscaler racing to build another data center, every AI lab trying to train a larger model and every corporation terrified of being left behind has helped create extraordinary demand for Nvidia’s hardware. In return, Nvidia has “invested” in a countless number of other operations that rely on its hardware. One big happy circle jerk family.

And one of the most spectacular corporate ascents in history for Nvidia. It has become one of the central pillars of the AI trade, which itself has become enormously important to the U.S. stock market. Nvidia and the other mega cap technology companies tied to the AI boom carry enormous weight in major indexes owned by investors around the world.

There is a staggering amount of money riding on the proposition that the AI spending boom continues. And sitting directly in the middle of it is Jensen Huang. It’s been the reason for my (somewhat) tongue-in-cheek opinion that Nvidia will never miss an earnings report again, because the powers that be would rather see them commit egregious accounting fraud than tell the truth about shitty numbers and watch the global economy collapse.

And now Huang is apparently becoming one of the president’s most influential voices on precisely the question that could determine how quickly this machine is allowed to keep running. You almost have to admire the efficiency.

CNBC reports that Trump has increasingly echoed Huang’s views on AI safety, while Huang has publicly dismissed some of the more apocalyptic warnings surrounding artificial intelligence. His preferred solution to many safety concerns is essentially “good old fashioned engineering.”

Maybe he’s right. But forgive me if I’m not eager to treat the CEO of Nvidia like an objective third party monk who has been summoned down from a Nepalese ashram to offer Washington philosophical wisdom about the future of humankind. The guy is a CEO of the company selling the hardware required to run the experiment.

Nvidia makes extraordinary amounts of money when OpenAI, Meta, Google, Microsoft, Amazon and everyone else decides they need more compute. It makes money when data centers get larger. It makes money when models get larger. It makes money when the AI arms race accelerates. Somehow, I assume, it even makes money when I use my toaster to make an english muffin in the morning.

Presumably, Nvidia would face a less favorable commercial environment if policymakers imposed rules that materially slowed that race. Or altered my breakfast plans.

That doesn’t mean Huang is lying. It doesn’t mean his policy arguments are necessarily wrong. And it certainly doesn’t establish some secret conspiracy between Nvidia and the White House. But it does mean the conflict of interest is so enormous you can practically see it from space.

This is why I find Huang’s growing proximity to Trump far more interesting than another photograph of two powerful men smiling at dinner.

CNBC reports that Huang is expected to attend the president’s state dinner for Chinese President Xi Jinping. The administration, meanwhile, has emphasized accelerating American AI development and resisting restrictions it believes could weaken the United States relative to China. Those positions can align extremely well with Nvidia’s commercial interests.’

Maybe that alignment produces good policy. But investors should understand who is sitting at the table and what they have riding on the outcome.

🔥 85% OFF FOREVER IF YOU SUBSCRIBE TODAY: I am again offering an 85% discount to anyone that wants to become a Fringe Finance annual subscriber today. It’s a discount you can keep and stays applied for as long as you wish to remain a subscriber: Get 85% off forever

If Exxon’s CEO became one of Washington’s most influential voices on whether America should restrict oil drilling, I wouldn’t simply write down his opinion and call the matter settled.

If JPMorgan’s CEO were advising the president about whether banks needed additional capital requirements, I’d probably keep JPMorgan’s balance sheet somewhere in the back of my mind.

And when big pharma figured out a way to “find” clinical studies questioning ivermectin’s safety record in the middle of a pandemic where they were trying to sell vaccines, despite ivermectin being on the WHO’s Model List of Essential Medicines and having been used successfully in 3.7 billion doses for the last 39 years, I didn’t trust that either. The timing was just too…perfect.

So when the CEO of the company arguably benefiting more than anyone else from the AI capital spending explosion tells the president that fears surrounding AI are overblown and additional regulation could be counterproductive, I’m going to apply precisely the same standard.

Huang’s job is not to protect my portfolio, the stock market or civilization. His job is to run Nvidia, and he has been extraordinarily good at it. That is exactly why I don’t understand the impulse to treat his pronouncements about AI policy as though they arrived on stone tablets.

The stakes here are much larger than Nvidia.

AI enthusiasm has become deeply embedded in the market’s valuation structure. Trillions of dollars of market capitalization are tied directly or indirectly to assumptions about continued AI investment, continued infrastructure spending and eventual returns on an almost unimaginable amount of capital being poured into the sector.

Anything that threatens that narrative, including disappointing returns, slower model development, power constraints, tougher regulation, customers deciding they have bought enough GPUs for a while and/or me discontinuing use of my toaster in the morning, potentially threatens much more than one semiconductor stock.

AI will also play a massive role in the upcoming midterm elections. There is also a very real case that if we pass a certain point waiting to regulate AI, we may not have a chance to in the future. And there’s also arguments that AI CEOs are calling for regulation to stifle competition. Whatever the case, we have to go about regulation ideas in a more objective fashion.

Jensen Huang may ultimately be correct that engineers can manage these risks without heavy government intervention. He may be correct that excessive regulation would damage American competitiveness. Those arguments deserve to be evaluated on their merits.

But they should also be evaluated alongside the economic incentives of the person making them. There is something almost comical about watching the man standing closest to the cash register explain why everybody needs to keep shopping. You don’t need a conspiracy theory to be skeptical in this situation.

Follow me one more time. Huang runs a company whose fortunes are intimately connected to the continuation of the AI boom. The Trump administration has publicly emphasized American AI dominance, economic growth and strong financial markets. Where those interests overlap, Nvidia has every reason to make its case as aggressively as possible.

And Huang could be doing exactly that. Good for him. But I’m not confusing excellent corporate strategy or political relationship building with an independent assessment of whether AI poses serious risks or requires additional oversight.

When the CEO of the company selling the picks and shovels tells Washington that the gold rush shouldn’t be slowed down, I don’t hear the voice of an impartial referee…I hear the guy selling the shovels telling everyone to keep digging.

--

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. 

 

Tyler Durden Sun, 09/20/2026 - 13:30

Ocean Container Freight Costs Explode, Rivaling COVID-Era Crisis Highs

A worsening ocean freight price shock is reviving concerns about the supply-chain disruptions seen during the pandemic and the 2024 Red Sea crisis.

If continued through the fall and winter, higher shipping costs could intensify inflationary pressure, squeeze corporate margins, and weaken growth. Together, these factors raise the risk of a broader economic shock, particularly if diesel prices remain elevated. 

Bank of America retail analyst Lorraine Hutchinson warned in a note Saturday that ocean freight rates have jumped 201%, approaching the 250% spike seen during the 2021 container ship shortage. Meanwhile, AAA national average diesel prices near $6.50 a gallon are crushing truckers' margins and boosting rates on the nation's highways. 

"Most contracts are set in the spring, but we're watching this for those using spot rates and as a potential headwind for 2027," Hutchinson said.

Beyond container rates, the Baltic Dry Index, which tracks freight rates for several vessel classes, including Capesize, Panamax and Supramax vessels, has jumped to December 2023 highs. 

"We see the current surge as something of a perfect storm, with vessel supply tightening and demand firing in both basins at the same time," Thurlestone Shipping analysts said.

A prolonged freight price shock could carry today's shipping squeeze into the 2027 contracting cycle, exposing businesses to higher transportation costs and increasing pressure to pass those costs on to consumers.

Tyler Durden Sun, 09/20/2026 - 13:00

FBI Using AI To Stop School Shootings; Doomers Want It Paused

Authored by Steve Watson via Modernity News,

While the same 'current thing' leftists who spent years on climate, oil and "Palestine" now chants that AI will wipe out the human race, FBI Director Kash Patel just announced that the agency is using the technology to actively prevent mass shootings, including school attacks, before they happen.

Patel said artificial intelligence helped the bureau prevent possible school shootings in North Carolina and about half a dozen other states, and that he has increased the FBI's use of AI by 605 percent.

That is the version of AI that the pause-and-treaty crowd does not want discussed.

? JUST NOW: In a MASSIVE win, FBI Director Kash Patel announces that half-a-dozen states' possible school SH00TINGS were thwarted through the use of AI

One was just stopped in North Carolina ??

"We've done it in North Carolina and about half-a-dozen other states to prevent... pic.twitter.com/SKzwJIkvnV

— Eric Daugherty (@EricLDaugh) September 19, 2026

The comments match what he told the Senate Judiciary Committee days earlier. When he took the job, the bureau had two test use cases for artificial intelligence. "We just hit our 140th, that's a 605 percent increase since I've been in this seat, to process information to triage intelligence, analyze, and get this information out to our local partners."

This is not a science-fiction sermon. It is tip triage.

Patel has been making the operational case since spring. On Sean Hannity's podcast he said the old FBI treated modernization as an afterthought.

"AI was never used at the FBI till we got there, literally crazy," he said. "I'm using it everywhere."

The bottleneck was volume. The National Threat Operations Center takes thousands of tips a week. "If we had just humans look at it, we would never sift through them all." He put the question more sharply still: "What's the point of collecting terabytes of data if you can't sift through it?"

The North Carolina case is the one he keeps returning to. "We stopped a school massacre in North Carolina because we got a tip and we were able to triage it with artificial intelligence." A separate New York school threat, he said, was disrupted after "a tip from our private-sector partners who are building out AI infrastructure."

In a Fox News op-ed he described the machinery. When a call hits NTOC, AI generates a transcript, drafts a summary of the threat, scans open cases for matches, and assigns a lead value so the hottest tips rise first.

"This specific threat intake process helped the FBI quickly act and stop an attacker plotting a mass shooting at a North Carolina preschool," Patel urged.

The same overhaul, he wrote, helped the bureau identify and locate 6,300 missing children last year - a 30 percent increase - and arrest 2,000 abusers, a 20 percent increase. In a Richmond case, facial recognition tools were used to pull 8- and 12-year-old children away from a would-be abuser now facing 50 years.

The tools are being used to rank leads and get them to agents and local partners before someone walks through a school door.

It's not something that has been considered by the doomer leftists now literally calling for AI to be 'switched off'.

San Francisco and London just got an NPC software update. The banners changed. The wardrobe did not.

Dozens marched from OpenAI's Mission Bay headquarters to Anthropic's offices and on to San Francisco City Hall, demanding Mayor Daniel Lurie declare a local "AI state of emergency." Chalk on the pavement read "Extinction is on the table."

Organiser Hunter Glenn told reporters, "I was pretty scared about the possibility of extinction for awhile." In London, "PauseAI" and "Pull The Plug" rallies formed after Anthropic alignment lead Evan Hubinger said he personally believed there was a greater than 10 percent chance AI could "kill all humans" within a decade. Their slogan: "10% chance of extinction? 100% chance of resistance."

Scott Jennings had already mapped the rotation. "It's always the same apocalyptic crowd moving from one issue to the next. Responsible guardrails are one thing, but handicapping American innovation while China speeds ahead with zero regulation isn't sound policy - it's just foolish."

Nvidia CEO Jensen Huang gave the extinction industry a simpler number. There is a "0% chance" the world ends in 2030. "2030 is not going to be the end of the world."

A U.S. pause would not freeze the technology. It would freeze the labs already winning and hand the century's defining stack to Beijing. Europe sold GDPR as virtue and now hosts none of the world's dominant labs.

Palantir co-founder Joe Lonsdale told Jesse Watters the scare is not civic caution. It is a campaign.

"These guys don't believe in God. They're atheists, but they've created something they believe is God," Watters said, laying out Lonsdale's point. "This is their Messiah, and this is their end of the world."

Lonsdale was direct. "There is a coordinated campaign to make the American people afraid." San Francisco, he said, dropped Christianity and still wanted a messiah and an apocalypse. "If you give up religion, you want some kind of messianic complex, some kind of big thing to believe in. These effective altruists - this is their Messiah, this is their end of the world, this is their obsession."

An industrial revolution is coming that would be "amazing for America if we get it right." The people trying to stop it, Lonsdale said, "hate America."

That theology now has a policy shop. Bill Gates is back on the emergency circuit calling AI an "alien intelligence."

"I don't think any government is nearly as deep on this as they have to be," he told Reuters. "Governments are way behind on this one." Then the Hollywood script: "There's all sorts of movies where some aliens are coming, and magically the US and China and everybody comes together to solve the problem. AI is kind of like this alien intelligence. It's here, and we better do like it shows in those movies."

On a podcast he went further. "It's not the role of the industry to self-regulate or understand the whole-of-society impact that comes out of AI." He wants a permanent cross-border watchdog stitched from nuclear inspections, aviation rules and ozone treaties - and a meeting with Xi Jinping. In the same news cycle his foundation pledged $1 billion over two years to spread AI through schools, clinics and farms. Alarm in one hand. Pipeline in the other.

President Trump has already rejected the slowdown. "We're leading China in AI," he said. "Whoever wins AI, wins." A lot of the horror stories being shopped around, he added, "won't happen."

Trump also answered the doomer circuit with an appointment, not a pause. He said he is forming an "AI Force," modeled on Space Force, and will name a high-IQ "AI Czar" to keep the United States first while the left's latest scare campaign is treated as what he called it: another hoax.

"AI is the next Industrial Revolution, or Internet, but will be even larger and more impactful, possibly as much as 25% of our Country's GDP," he said. "We are leading China, and the rest of the World, and I intend to keep it that way."

"We will not in any way hinder or stifle the Growth of this incredible Industry. Rather, we will cherish it, help it, and watch over it, as it grows," Trump added, noting that bad actors can be handled with the criminal and civil courts already on the books - not a Gates-style global leash.

? BREAKING: President Trump announces he will be appointing a HIGH IQ "AI CZAR" and launches the "AI FORCE"

Trump says we will UNLEASH AI and that the propaganda will fail

All of this will be geared towards not only BUSTING anti-AI hoaxes but keeping America number one. LET'S... pic.twitter.com/Cy3T8R1cBK

— Eric Daugherty (@EricLDaugh) September 19, 2026

One future is the FBI using models to transcribe a threat call, score it, match it, and get a cop to a North Carolina preschool before the shooting starts. The other is a global committee, a Netflix doom documentary sold as the new Inconvenient Truth, and a street mob that needs the next wipeout the way some people need a weather report.

China is not holding a pause-and-pray summit. Chinese firms have been accused by U.S. officials of stripping American models at industrial scale. Beijing's spy chief has treated AI as a Party-control problem, which is another way of saying the CCP wants the weapon.

Patel's point is narrower and harder to slogan away. Used by cops, under the law, the same class of tools the doomers want parked under an international inspectorate is already being used to find missing kids, rank tips, and stop school plots. Every plot that never makes a headline is a child who goes home.

America can build the thing, police the abuse, and keep the lead. Or it can let the extinction church write the rules while the bureau that just started using the tools is told to wait for permission from a committee Gates wants to staff.

* * *

Tyler Durden Sun, 09/20/2026 - 12:30

Big Oil Backs Mazama's $135 Million Bet On Superhot Geothermal

Mazama Energy announced $135 million in new capital with an oversubscribed Series B that included ConocoPhillips and Shell Ventures. With Devon Energy initially backing Fervo in 2023, a pattern is emerging with oil and gas veterans placing their bets in the geothermal industry. 

Some of the techniques developed by the O&G industry are translating well to geothermal projects. Horizontal drilling, well completions, and underground reservoir expertise are finding new purpose in an industry that is far more politically neutral than the fossil fuel industry ever could be.

Geothermal very well could be one of the AI-powered trades that is yet to be fully discovered. The Trump administration has thrown its full support behind the technology, as it holds some of the best qualities of nuclear energy without the [unfounded] radiation concerns.

Traditional geothermal, such as the established technology used by companies like Ormat, taps naturally occurring reservoirs of hot water and steam, making these sites very dependent on specific geology. The newer technology being utilized by companies like Fervo and Mazama engineers underground pathways to allow for injected water to circulate through hot rock and force the heat back to the surface. 

Mazama wants to push those techniques into much hotter rock. The company says its Oregon project demonstrated an engineered geothermal system at 629°F in 2025. Its second well, Athena, reached 10,350 feet in 15 drilling days this month, roughly 80% faster than the earlier well, and is drilling deeper toward 750°F.

The company highlights the benefits of the higher temperatures in their press release from the capital raise:

"Reaching 750°F (400°C) delivers up to 10 times the power of a conventional 390°F (200°C) well, owing to the much higher energy density of supercritical water and improved reservoir productivity. This allows Mazama to deliver projects using 75% less water and drilling 80% fewer wells than conventional geothermal developments."

According to Mazama’s announcement, the financing will support the DOE-backed Project Ceres, targeting 15 MW of electrical capacity per well and a power-generation demonstration in 2027.

Tyler Durden Sun, 09/20/2026 - 12:00

The Fed Rate-Hike Won't Fix The Inflation It Targets

Authored by Lance Roberts via RealInvestmentAdvice.com,

The Fed did what the bond market dared it to do. This past week, in a unanimous vote, the FOMC raised the target range for the federal funds rate by 25 basis points to 3.75%-4.00%, the first Fed rate hike since 2023. The stated reason was “price stability.” Yet this is a Fed whose own chairman has spent the past year insisting that real growth does not cause inflation, and that the drivers of this one sit largely outside the central bank’s reach. As we argued in prior Bull Bear Reports on the debt-and-inflation problem, that tension is not a footnote; it is the entire story of the Fed rate hike, and something worth exploring more deeply.

Make no mistake, it was the bond market that forced the issue. Such is interesting when you consider that Kevin Warsh wants the market to create the signal. Well, he got what he wished for. The 10-year Treasury yield pushed to roughly 5.01% around Wednesday’s decision, a level not seen in 19 years, while the 30-year cleared 5.35%. In other words, the market’s message was clear: “Raise rates, or we will.”

What The Fed Rate Hike Actually Does

However, what gets lost in transmission is what the Fed is actually trying to achieve through interest rate policy. The mechanism behind rate hikes or cuts is a demand story, nothing more. Raising the policy rate raises the cost of money across the system. Credit-financed demand cools first, mortgages, auto loans, capex, anything that lives or dies on the cost of borrowing. As that demand softens, the economy loses some of its power to bid prices higher, and the pace of increase eases. “Price stability,” in the Fed’s own framing, is really “expectations” stability.

Now, notice what the Fed’s tool never touches, and this was mentioned by Warsh on Wednesday. A higher Fed funds rate does not drill a well, end a war, or reopen the Strait of Hormuz. The Fed rate hike works on one side of the ledger, and one side only: the demand side. Such is the design, and such is also the limit. When the inflation in front of you is a supply problem, a demand lever pulls on the wrong rope.

What Warsh Means By “The Fed Can’t Fix Prices”

However, this is where most of the mainstream commentary gets sloppy. The Warsh school separates two things that the word “inflation” quietly blends together.

1. There are relative prices, set in the real economy by supply and demand for actual goods, and then
2. There is the monetary unit, the purchasing power of the dollar itself.

An iPhone gets cheaper because of globalized production. Oil prices rise because of a war that threatens supply lines. No policy rate produces either outcome.

When Warsh implies the Fed cannot fix prices, the defensible version of that claim is narrow and correct. Monetary policy cannot repair a supply-driven, relative-price shock. It can only compress demand until something breaks. Milton Friedman’s line, that inflation is “always and everywhere a monetary phenomenon,” is usually quoted, incorrectly, to argue the opposite. However, read that carefully, because it makes Warsh’s point. Friedman described the slow erosion of the currency over the years (driven by a general rise in inflation amid economic growth), not the price of gasoline during a Gulf conflict. The Fed owns the monetary unit, but does not own the oil market.

Look at the composition of the number the Fed is fighting.

Headline ran 3.4% in August, but energy alone ran 16.9%. Strip the war out, and the overheating story gets much harder to tell. That is not a demand economy running too hot. That is a supply line on fire.

Then Why Hike Into A Supply Shock?

Fair objection. If the Fed cannot produce a barrel of oil, the Fed rate hike looks like “theater.” It is not, and the reason is CREDIBILITY. A central bank tightens into a supply shock for three defensible reasons, none of which involve lowering the price of crude.

1. To keep inflation “expectations” anchored, so a one-off energy spike does not get built into wages and contracts and turn into the self-sustaining spiral of the 1970s.
2. To protect the institution’s word after the “transitory” humiliation of 2021, when the Fed looked through a shock and watched it metastasize.
3. Because the cost of being wrong twice dwarfs the cost of over-tightening once.

The dot plot shows the committee has made that trade. Sixteen of eighteen officials now see the possibility of at least one more hike this year, and four pencil in two.

“Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal.” – FOMC statement, September 16, 2026

Read that quote once again. The committee expressly said that it can steer prices with rates. However, history tells us more precisely that the Fed can reliably steer demand only. Those are not the same claim. Fighting a supply shock with a demand tool is the textbook recipe for stagflation, slower growth, and higher unemployment without curing the thing that lit the fire. Such is the box Warsh is in, the same Volcker-versus-Burns dilemma, now his to own.

Here is a clearer way to see the potential danger that Warsh is walking into. The same dot plot that pins the neutral rate at 3.1% now has the funds rate at 3.875% and climbing toward a 4.1% median by year-end. Once you strip away the language, the Fed is already about 90 basis points into restrictive territory, with more to come, even as Warsh insists conditions are not “broadly restrictive.”

That setup leaves the Fed with absolutely no margin for error. In the current environment, the Fed is hiking rates to offset an oil price spike. If energy costs continue to weigh on growth and the Fed continues to tighten, it will accelerate the deterioration. If oil reverses, the inflation impulse fades quickly, and the Fed’s hikes accelerate the economic bite. Both roads end at the same address, a Fed caught in a policy mistake, scrambling to fix the overshoot.

What Usually Happens To Stocks After A Hike, And Why This Time Is Different

The bulls have a comforting statistic ready for this week, and it is a real one. Going back to the late 1980s, the S&P 500 has slipped only modestly immediately after a first Fed rate hike, roughly 2% over the first three months, then recovered to average gains of nearly 9% over the following year, according to Goldman Sachs. LPL Financial puts the average 12-month gain at 6.7%, with a median of 10.7%. The tidy conclusion is that rate hikes are buying opportunities.

However, as is always the case, beware of “averages,” which in this case may well be lying to you. The reason I say that is due to the composition. The Fed almost always hikes into a strong, demand-driven expansion. It rarely hikes into a supply shock. When it has, the record is far uglier, and the damage tends to arrive late, once the energy spike feeds inflation and the tightening starts to bite.

After the 1973 oil embargo, the S&P fell 11% in a month and 41% over the next year. Another, more recent example, was when the Fed tightened amid the energy-and-inflation shock of 2022. During that period, the index lost roughly 19% for the year and remained underwater well past 12 months. Every “hikes are bullish” study carves 2022 out as the exception. Today, it is most likely not the exception, but the template.

One thing that matters is the pace of the Fed rate hikes. Charles Schwab’s strategists found that the S&P returned 10.5% over the year following slow tightening cycles and lost 3.6% after rapid ones. So what should you actually expect over the next year, hiking into a war-driven supply shock with the 10-year near 5%? Our read sits below. It is a judgment anchored in that history, not a backtest.

In the current market, the leadership is not subtle. When the Fed hikes amid an energy shock, money tends to flow to where inflation is a benefit rather than a hindrance. For example, in 2022, as shown below, energy led the market up by about 48%. This suggests that investors, today, like then, should favor energy, materials, and defensives with real pricing power, as well as staples and health care. On the other side, underweight long-duration assets such as technology and communication services, as well as rate-sensitive discretionary and real estate names. However, there is always a caveat. If oil breaks and the shock fades, that map inverts, and today’s laggards lead the way back.

Such is the danger of leaning on a historical average built almost entirely on the wrong kind of hike.

What This Means For Markets Over The Next Few Months, And How To Navigate It

So how do you navigate it? Rates are “higher for longer,” and the committee has told you plainly it is willing to go again. The 30-year above 5.35% and the 10-year near 5.01% raise the bar that every equity, especially long-duration growth, has to clear to justify its multiple.

The forecasters are already marking that reality. Ed Yardeni cut his year-end S&P 500 target to 7,900 from 8,400 on the decision, flagging the risk of a downturn over the next three to six months as yields climb on energy. We would take the warning seriously without treating it as gospel.

Let’s focus on the bond market, which is the harder call right now, and the argument cuts both ways.

The bull case is a good one.

“The term premium has expanded to levels that historically pay investors to own duration, and a hike that slows the economy is the classic tailwind for long Treasuries. If Warsh restores “credibility” and growth cools, the long end rallies, and this past week’s high yields will look like a gift.”

The bear case, however, also has teeth.

“The 30-year sits at a 19-year high for a reason: relentless issuance against a $40 trillion debt, layered on top of supply-driven inflation. Rate hikes can not fix that. That tail does not disappear either just because the Fed moved a quarter point. So, this argues that investors should take exposure at the point where the term premium is best paid for the risk. That is in the belly of the curve, with 5-7 year durations.”

Crucially, none of this argues for abandoning equities. It argues for respecting a market regime in which the risk-free rate finally competes with everything else. It is an environment where the biggest driver of “price stability,” the Fed cited, is a war it can’t control. The deeper problem lies one level down. The deficits and debt that we repeatedly flagged are the real long-run engine of price stability. Monetary policy sits downstream of all of it.

The Fed can raise the price of money. It cannot lower the price of a war. Size the portfolio for the difference.

Tyler Durden Sun, 09/20/2026 - 11:30

Bessent And He Lifeng Open High-Stakes Trade Talks Ahead Of Trump-Xi Summit

Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are meeting Chinese Vice Premier He Lifeng at JPMorgan Chase's Manhattan headquarters on Sunday for a critical round of trade negotiations. The all-day session marks the final ministerial push before President Donald Trump hosts Chinese President Xi Jinping in Washington beginning September 24.

JPMorgan is not involved in the negotiations, though Bessent previously invited CEO Jamie Dimon to speak at a Treasury-hosted G20 finance leaders meeting in Asheville.

This negotiating channel previously engineered the Busan truce, which capped bilateral duties near 20 percent after reciprocal tariffs spiked into triple digits. The administration has since rebuilt its tariff structure under alternative statutes, while broader excess-capacity tariffs remain paused until after this week's summit. The existing truce expires on November 10, adding urgency for both sides.

The Core Negotiating Agenda

Three primary issues dominate the current talks, alongside geopolitical tensions over Taiwan and Iranian oil:

• Rare Earths and Critical Minerals: Beijing committed in Busan to resume shipments of critical materials, but a senior U.S. official noted that China's performance has fallen short. Disruptions to these supplies significantly impact global manufacturing and technology. Beijing holds the leverage of offering more export licenses but has yet to restore pre-restriction volumes.
• Artificial Intelligence: Negotiations will cover both open-weight and proprietary closed-weight AI models. Low-cost Chinese open-weight systems are increasingly adopted by U.S. developers, prompting Washington to push for bilateral guardrails against misuse by non-state actors while avoiding a complete bifurcation of the tech ecosystems.
• Unresolved Trade Commitments: Negotiators are revisiting items left hanging from Trump's May visit to Beijing. This includes efforts to reduce tariffs on non-sensitive goods, finalize Chinese agricultural purchases, and address proposed U.S. tariffs linked to industrial overcapacity and forced-labor concerns.

Broader geopolitical issues continue to shadow the economic track. The conflict involving Iran and its impact on energy supplies has emerged as an unexpected major pressure point in the talks. Additionally, Washington continues to monitor the flow of fentanyl precursor chemicals from China, which will likely feature heavily in the main summit.

Expectations and Market Impact

The likelier outcome is diplomatic management rather than a major structural pact. Both administrations have a strong interest in avoiding a renewed escalation of trade tensions and preventing the Busan framework from falling apart before November.

Markets will look for any formal extension of the November 10 date, verified increases in magnet export permits, and whether agreements on AI guardrails contain binding terms.

Tyler Durden Sun, 09/20/2026 - 11:05

Good Intentions Paved The Road To The 2008 Financial Crisis

Authored by Paul Mueller via The Daily Economy,

This week marks the eighteenth anniversary of the failure of Lehman Brothers, a key event of the 2008 global financial crisis (GFC). Lehman's failure and the GFC more broadly were dramatic economic events. Lehman Brothers was the largest bankruptcy in US history to date. The global financial crisis gave rise to the Great Recession. The stock market fell by more than 50 percent, the economy contracted by 4.3 percent, unemployment rose from 4.7 percent to 10 percent, and the subsequent decade of US economic growth was abnormally anemic.

Many myths about Lehman's failure and about the 2008 global financial crisis continue to dominate public discourse. Popular consensus still places the blame primarily on deregulation, Wall Street greed, and reckless financial engineering. And many anecdotes inform their perspective.

Mortgage fraud was common and egregious, especially in the final few years of the housing frenzy (2004-2007). No-doc loans, NINJA loans, and liar loans were far too common - and most people were not held accountable for their complicity. Accusations of fraud by large banks and credit rating agencies, though, were largely overstated. Other than a couple big mortgage lenders engaged in systemic fraud (Countrywide) or truly reckless lending (Golden West), most financial institutions operated on the right side of the law.

The real driver of the GFC was pervasive bad incentives created by years of misregulation. Consider, for example, the Federal Reserve's Recourse Rule. This regulated how much capital banks had to hold against different classes of assets, and strongly favored mortgage-backed securities (MBS). Not surprisingly, banks shifted their portfolios to hold more MBS - one of the major asset classes to blow up in 2008. Regulation created this herd-like behavior, leading to overconcentration in a certain asset and greater systemic fragility.

Simultaneously, more than a decade of regulatory pressure forced Fannie Mae and Freddie Mac to lower their underwriting standards - a shift that soon infected the entire industry. The Community Reinvestment Act, federal agencies, and the Department of Housing and Urban Development all pushed for reduced mortgage underwriting standards. More people were able to buy a home - even if they couldn't afford it.

Peter Wallison and Edward Pinto document this regulatory transformation. Far from a market-driven "race to the bottom" by private lenders chasing short-term profit, housing regulators in the early 1990s viewed traditional underwriting standards as discriminatory barriers to homeownership. Using the 1992 Housing and Community Development Act, the Department of Housing and Urban Development mandated affordable-housing quotas for Fannie Mae and Freddie Mac - requiring them to allocate an ever-increasing share of their support to low- and moderate-income borrowers, starting at 30 percent in 1992 and climbing to 56 percent by 2008.

To achieve these goals, Fannie and Freddie systematically dismantled traditional underwriting guidelines. The conventional mortgage market consisted of 30-year fixed-rate loans requiring 20 percent down payments, fully documented borrower income, and high credit scores. These mortgages were remarkably stable and had very low levels of defaults.

But by the mid-2000s, this underwriting standard had been replaced by loans with less than 10 percent down payments, adjustable interest rates, and lower FICO requirements. As Pinto later argued in a report to the Financial Crisis Inquiry Commission, roughly 27 million US mortgages - half of the entire market in 2008 - were high-risk, non-traditional loans, with government-backed agencies holding or guaranteeing the vast majority of them.

The otherwise laudable goal of increasing access and affordability led to higher housing prices and degraded the quality of mortgage finance, which then made its way onto bank balance sheets. Misregulation didn't stop once the crisis began - the same instinct to override market signals with discretionary judgment, which had already reshaped underwriting standards for a decade, next reshaped the government's response to the panic itself.

Government interventions meant to "fix" the market made things worse. Lehman's failure was certainly a blow to the market, but not as much as some people make it out to be. The S&P finished fractionally higher the Friday after Lehman's failure than it had the Friday before - most of the stock market decline came weeks later in October following further government interventions.

Two previous government actions that made Lehman's bankruptcy more disruptive than it needed to be. In March 2008, government officials brokered a bailout for Bear Stearns. This created a moral hazard in which Lehman executives rejected acquisition bids from interested investors and delayed deleveraging their mortgage portfolios, likely in the expectation that they would receive a deal, too. Federal officials' last-minute attempt to rescue Lehman left the firm unprepared for its complex Chapter 11, resulting in a chaotic bankruptcy that destroyed wealth and froze counterparties worldwide.

Lehman's failure highlights the broader problem in 2008: discretionary and reactionary government actions meant to dampen the GFC unintentionally made it worse. They created uncertainty and panic. Consider how the Troubled Asset Relief Program (TARP) required all major banks to take bailout money even if they didn't need it. Treasury Secretary Paulson didn't want investors and lenders to identify and dump the weakest banks.

Yet this badly misjudged the market. Most lenders and investors had a pretty good sense of which banks were in trouble already. Forcing healthy institutions to take TARP funds signaled that contagion was deeper and more systemic than feared, accelerating capital flight from the banking sector.

Government officials also created perverse incentives by bailing out some firms early while letting others fail. If there is one thing worse for markets than bad news, it is uncertainty. And the Bush administration created deep market paralysis with its inconsistent, and often panicked, interventions in financial markets in 2008. Ordinary Americans paid the price then and are still paying the price today, in the form of greater government distortions of financial markets.

The Federal Reserve still holds nearly $2 trillion of MBS, an asset class it bought, and continued to buy, due to the "emergency" 18 years ago. More problematic, though, is that the GFC shook people's confidence in markets and in a free economy. The drive for broader government assistance programs on both sides of the political aisle has been fomented in part by the calamity of the GFC. Subsequent asset bubbles fueled popular cynicism about cronyism in the financial system.

The institutional memory from 2008 was on display in 2020 and 2021, when both the Federal Reserve and two different administrations turned on spigots of government spending, lending, and economic stimulus - resulting in the elevated inflation we face today. Nearly a quarter of the dollar's value has vanished since 2019.

If there is one thing we should learn from the 2008 GFC, it is that discretionary government interventions tend to generate negative unintended consequences. Even more importantly, we should view calls for more regulation, whether of cryptocurrency, stablecoins, energy production, or data center construction, with a skeptical eye.

Individual rules that may seem to make sense on paper can create perverse incentives, especially when they come stacked on top of other regulations. Unintended regulatory synergies generate herd-like behavior. Precisely the opposite is required for the decentralized experimentation that drives economic resilience.

Tyler Durden Sun, 09/20/2026 - 10:30

WW3 Near-Miss? AI Hallucinated Nuclear Weapons Components Aboard Chinese Vessel Bound For Iran

Could runaway artificial intelligence (AI) spark a future WW3?

We don't need movies like Terminator 2 and its SkyNet to help us imagine this, it's 2026 and there is already a terrifying real-world precedent that could have kicked off a shooting war with nuclear-armed China.

A human analyst within the US intelligence community utilized data gathered by AI for a report that was later widely circulated across classified Pentagon channels, except that the chatbot which was relied upon in effect hallucinated nuclear weapons components being transported aboard a Chinese vessel bound for Iran.

Illustrative: US 7th Fleet file image, Recon Marines conduct exercises

Naturally this set off the highest alerts in Washington in the middle of an active hot war which President Trump launched ostensibly to prevent this very thing - Iran obtaining a nuke and atomic weapons components.

From there military planning kicked into high gear, with a special forces boarding operation imminent. Supposedly elite assets were already airborne, ready to descend on the Chinese ship in question.

But then, "the operation was halted only after officials took a closer look at the intelligence report and discovered that it had been produced with assistance from an AI chatbot," CNN reports in a bombshell Friday exclusive. The episode reportedly happened last spring.

The severe error was realized with barely enough time to call off what could have been the geopolitical blunder and disaster of the century, "The chatbot had incorrectly identified the material the vessel was carrying."

In essence the United States found itself based on completely manufactured 'intel' potentially headed for conflict with China.

As if to to preempt anyone who might be tempted to think the account is merely being hyperbolic or needlessly sensational, one official (unnamed) source told CNN that the intelligence assessment, which was "entirely false" - in the end "almost started a war."

While Pentagon leadership, including US Special Operations Command Pacific, has yet to respond to CNN's queries, the outlet pieces together the alleged chain of events and how this could have possibly happened in the following:

In this particular instance, the analyst queried a chatbot about some intelligence reporting on the ship’s manifest that originated with US Special Operations Command Pacific, based in Hawaii. It was not clear whether the chatbot was a commercially available one or a US government product.

“The internal tools are mostly just copies of the commercial stuff wearing lipstick,” a former senior US official familiar with the AI systems used by military and intelligence analysts.

The bot fused together open-source intelligence with secret signals intelligence in government holdings and reached its fateful conclusion about the material the ship was carrying.

The analyst then used AI again to package the findings into a standard intelligence report — the kind that is trusted by military officials — and disseminated it.

The report seems to be suggesting that the unknown AI tool that was utilized would be deemed substandard and weak for such an important assessment in the first place.

Further "comforting" for readers is that given heavy AI-integration seems the "irreversible" trend of the day across the DoD/Depart of War and IC, similar near-misses in the near and distant future are bound to happen.

CNN underscores, "Across the US military and the intelligence community, officials are pushing to weave AI into nearly every facet of their work, from analyzing the huge volumes of raw intelligence the US collects and selecting targets for strikes, to more mundane applications like managing budgeting, logistics and supply chains."

Meanwhile, another botched AI job perhaps?...

SCOOP: A shipment of F-35 parts, including a canopy, wound up in Hong Kong — sparking an investigation on Capitol Hill and raising the possibility that China could have access to key components of the highly-classified program.

with @marksatter https://t.co/Y0ufsqEcY0

— Audrey Decker (@audrey_decker9) September 18, 2026

So apparently it's not just lazy college undergrads who've become over-reliant on AI as a substitute for deep research and critical thinking, but now we apparently have a generation of US INTELLIGENCE ANALYSTS making potentially world-altering mistakes with the technology.

* * * Tool roll crafted from 5" double-jacketed polyester fire hose

Tyler Durden Sun, 09/20/2026 - 09:25

Watch: British Cops Grill Street-Preacher After Someone Takes 'Offense' At Bible Passages

Authored by Steve Watson via Modernity News,

Britain's latest public-order farce is not a machete fight, a rape gang or a phone-snatch. It is a man on a high street with a Bible.

Footage circulating Friday shows three female officers surrounding a Christian street preacher in a busy shopping precinct.

One of them looks like she should still be sitting exams at school. The other two hover, phones out, expressions tight, as if they have been sent to defuse a bomb.

In the UK they now have children policing the streets. pic.twitter.com/MsvD2QBFzT

— HJB News (@HJB_News__) September 18, 2026

The clip is eight minutes of modern Britain in micro. A member of the public reports being "offended" by words. Officers arrive and the preacher is treated as the problem.

The all inclusive term 'hate speech' is waved around and 'intimidation' is offered as the hook for an investigation. The man citing Scripture is expected to justify himself to people who appear unfamiliar with the very statutes they are leaning on.

The Strong Arm Of The Law ???? pic.twitter.com/ObHEvBtT53

— Ben Dover (@BenDoverh45da) September 18, 2026

This is not law enforcement. It is customer service for the emotionally fragile.

As we hear in the footage, Sections 4A and 5 of the Public Order Act 1986 are the blunt instruments used again and again against street preachers.

Section 5 makes it an offence to use threatening or abusive words or behaviour within the hearing or sight of a person likely to be caused harassment, alarm or distress. "Insulting" was stripped out of Section 5 in 2013. There is a defence if the conduct was reasonable.

Section 4A is the heavier charge. It requires intent to cause harassment, alarm or distress, plus proof that harassment, alarm or distress was actually caused. Police guidance itself describes 4A as aimed at "more serious, planned and malicious incidents."

Yet here are yet more female police officers spewing those statutes at the guy as if they're citing parking restrictions.

Being offended by the Bible is not grounds for a public order offense. Reciting the Gospel in a public street is not automatically "threatening." Calling the encounter "intimidation" because a passer-by disliked the message does not conjure the mental element the statute demands. Courts have said as much, repeatedly, after officers have already cuffed, swabbed and bailed the preacher.

That distinction is lost on too many in uniform. In the new footage the officers look lost in it. One of them is literally a frightened child. The other two look scared of the conversation they started. The preacher is the only person on camera who appears to have read the law.

We've seen this all too often in Britain recently.

In another similar incident, a volunteer Met officer ordered 20-year-old gospel singer Harmonie London to stop performing "church songs" on Oxford Street, claiming she was "not allowed to sing church songs outside of church grounds."

The Met later apologised and admitted the officer "was mistaken," adding: "We're sorry for the offence caused and will take the learning forward."

There are many many more cases.

Pastor Dia Moodley was arrested in Bristol in November 2025 on suspicion of a religiously aggravated Section 4A offence and "inciting religious hatred" after preaching on Islam and transgender ideology.

He was held for eight hours and banned from the city centre over Christmas before the case collapsed.

"Avon and Somerset Police have arrested me twice because my lawful speech was seen as offensive to some Muslims and people with a progressive worldview," he said.

When a Muslim bystander later told him on camera, "If you do that again bro, we'll send the boys round," police filed it as "unpleasant" comments that "do not constitute an offence."

John Steele was arrested in Rotherham after a 30-second conversation about Quran 4:34 at a domestic-abuse stall. Charges were dropped as "not needed in the public interest."

Pastor Steve Maile was handcuffed in Watford and held for 12 hours; Hertfordshire Police confirmed a Section 5 public order investigation.

Shaun O'Sullivan has been arrested 16 times, including for saying "God bless you." A jury acquitted him after a six-day trial that cost an estimated £20,000.

Many such cases.

British Metropolitan Police Officer threatens to arrest Christian Preacher for speaking about God in the street.

"You might be committing offences. If you are making members of the public [feel] harassment, alarm and distress it's a criminal offence."

pic.twitter.com/FYhGoRCHK3

— Oli London (@OliLondonTV) May 21, 2024

British police officer tells Christian street preacher that it's "wrong" she is preaching about God outside Kings Cross station in London.

"These people just want to do their journey. They're not coming here to listen to you. I just think it's all wrong." pic.twitter.com/xrN68ZDYXp

— Oli London (@OliLondonTV) June 21, 2025

? CHRISTIAN STREET PREACHER ARRESTED IN LONDON - DAYS AFTER TRAFALGAR SQUARE MASS ISLAMIC PRAYER ?

A Christian preacher was arrested near London Stratford station while preaching the gospel.

Police reasons (per on-scene accounts & video):

1. Needed a licence/permit for the... pic.twitter.com/QpcPUDyPtg

— Skint Eastwood (@Skint_Eastwood1) March 19, 2026

Police attempt to detain Christian preacher at London Pride. Part 1 pic.twitter.com/9pWYgNcCjd

— SteveSpCorner (@SteveRightNLeft) July 4, 2026

Street preacher in London getting arrested for preaching the gospel of Jesus Christ.

The police and all bystanders heard the gospel, and that is the main thing.

They let the preachers of sin and evil continue. The preachers of good and Jesus they stop,

Life is spiritual. pic.twitter.com/0yAcydH8Yp

— Rikki Doolan (@realrikkidoolan) July 22, 2025

??? British Christian Preacher gets shut down in Manchester Shopping Centre by the Police because some of the 'locals' can't stand Christianity.

Are you happy with this Britain? Really think if you're ok with the Police treating a British Christian who has probably preached... pic.twitter.com/6rJ8jxS5Y2

— Concerned Citizen (@BGatesIsaPyscho) November 30, 2024

Street Preacher in London confronted by Police for preaching the word of God.

WATCH UNTIL END. Hallelujah! ???? Revival Times. pic.twitter.com/gV9AkYWtx8

— Rikki Doolan (@realrikkidoolan) June 10, 2025

Guy on the Left is a UK Christian Street Preacher about to be arrested on a quiet English Street.

The Guy on the right has his own private Police Escort whilst he sings Islamic Prayer on London Bridge right in the heart of the Nations Capital.

Do you see the problem yet? pic.twitter.com/thq1JlOW7A

— Concerned Citizen (@BGatesIsaPyscho) November 19, 2025

A Christian preacher this afternoon was arrested at Southgate station London N14 for preaching about Jesus . @CConcern the police told him it's because public had said he was being islamophobic . We have the full video and wondered when preaching was now illegal ? @Campaign4T pic.twitter.com/ZxC1DhlZCf

— Eye On Antisemitism (@AntisemitismEye) February 23, 2019

UK: ?? A "Christian country" in name only.

A Christian street preacher threatened with arrest by police because he speaks peacefully through a sound system!! Christians are repeatedly arrested for using speakers to share the Gospel peacefully (Bristol 2024, Glastonbury 2024,... pic.twitter.com/ywnslHt4WZ

— ExWren (@VoWalesWren) December 5, 2025

? BREAKING: PREACHING THE GOSPEL NOW A CRIME IN MODERN LONDON? ?

Shocking scenes as a Christian preacher is CIRCLED by multiple Met Police officers - and THREATENED WITH ARREST - for simply sharing the Word of God on the streets of London.

YES... THIS IS LONDON 2025.

?... pic.twitter.com/0p60A3rl0p

— Jim Ferguson (@JimFergusonUK) April 15, 2025

? "Preacher Of The Gospel" Arrested In Sadiq Khan's London:

Gray-haired Christian preacher dragged away in handcuffs for preaching the Gospel.

Police swarm him and handcuff him as he tells them: "No offence has been committed here - this is an utter disgrace." pic.twitter.com/fwzxl5b9Jx

— Skint Eastwood (@Skint_Eastwood1) April 20, 2026

Met Police stand watching a Christian preacher in "Modern London", waiting for him to say something from the Bible that may "offend" Muslims to confront him with.

Sadiq Khan sets the strategy of Met Police.

Coincidence? pic.twitter.com/jyT7dL2x3I

— Tommy Robinson ?? (@TRobinsonNewEra) August 1, 2026

This is not a handful of confused constables. It is policy.

And who exactly is calling the police to report being 'intimidated'?

In February, a lone female Met officer in Whitechapel, was surrounded by angry men insisting "This is a Muslim area," after a Christian preacher dared to recite the gospel.

In a refreshing change, the officer told the men "In this country, we have freedom of speech."

She added: "I understand that you guys don't want to hear it, so I would just recommend that you walk away and don't listen to him. He's not in your home." That officer understood the job. Too many of her colleagues do not.

This is part of a wider crackdown on speech in general.

At least 62,199 people were arrested for communications offences between 2021 and 2025 - roughly 34 a day. Only about one in five of those cases ends in a conviction.

Big Brother Watch's Silkie Carlo called it "an Orwellian mess" and said people have been arrested "for holding blank pieces of paper."

Lord Toby Young asked why authorities police tweets while shoplifting, phone theft and sexual offences rise.

Shadow home secretary Chris Philp put it simply: "Police shouldn't be wasting time on the internet. They should be catching real criminals."

After the 2024 Southport riots, police stood up a National Internet Intelligence Investigations team to flag "protest-related" posts to local forces. More than 100 referrals followed. Nigel Farage called it "the beginning of the state controlling free speech."

On the street the same instinct now wears a high-vis jacket. Offence becomes "intimidation." A Bible becomes a public-order risk. Officers who cannot explain Section 4A still feel entitled to demand names and deliver a public grilling.

Anyone who still assumes the person in the uniform knows the statute should watch another clip making the rounds: security guards outside a migrant hotel fail to display SIA licences - a criminal offence under the Private Security Industry Act - and the attending officer's response, after being walked through the law, is: "He's breaking the law. What am I supposed to do?"

This is the depressing reality of the situation. Quote the Act at them and they freeze. Point to an actual offence by the state's preferred clients and they shrug. Send three young women to lecture a preacher because someone felt intimidated by Scripture, and they treat the complaint as gospel.

Keir Starmer told JD Vance last year: "We've had free speech for a very very long time in the United Kingdom and it will last for a very very long time." The high street footage says otherwise. So do the 62,000 speech arrests. So does the officer who looks like a child, standing between a Bible and a country that no longer trusts its own laws.

Freedom of speech that dies the moment someone claims offence is not freedom.

Tyler Durden Sun, 09/20/2026 - 09:20

The Arctic Front Of The "Cordon Sanitaire" Is The Most Threatening To Russia

Authored by Andrew Korybko via Substack,

The military-technical developments there aim to greatly mitigate Russia's nuclear second-strike capabilities via the Golden Dome in parallel with posing an unprecedented fifth-generation aerial threat via the F-35As that'll outmatch Russia's Su-57s by 10:1 without the US and 35:1 if it's included.

RT reviewed the 2026 Russian Military Yearbook, which is sponsored by the state arms company and meant only for senior members of the national security apparatus.

Their article can be read in full here, but the present piece will only focus on the part about "The Very Cold War". This is in reference to escalating NATO-Russian tensions in the Arctic. The Yearbook details NATO's large-scale military drills in the Arctic, its allies' arms build-ups, and their deep displeasure with Russia's Northern Sea Route.

Most alarmingly, the Yearbook mentioned that Finland plans to acquire 64 F-35As while Canada will receive 88 of them. It was separately reported that Norway already has 52 F-35As, which is more than double Russia's estimated 20 or so Su-57s, its fifth-generation analogue. Sweden doesn't yet have any fifth-generation fighters, but those other three Arctic states will have over 10x as many as Russia does. If the US' over 500 F-35As are included, then Russia's fifth-generation fighters will be outmatched by 35:1.

These statistics on their own show that the US is actively implementing its 2021 strategic plan for "Regaining Arctic Dominance" that was cited in the Yearbook, the latter of which also detailed some of NATO's new radar, drone, ship, icebreaker, missile, and other military-technical plans. They altogether lend credence to one of the cited Russian experts who warned that "Washington never abandoned the thought of redrawing borders in that area."

Here are five background briefings on this new front:

* 14 January: "Greenland Is The Crown Jewel Of 'Fortress America'"

* 21 January: "The US' Acquisition Of Greenland Could Lead To A Deal Over Canada's Arctic Islands"

* 21 May: "Finland Is On Track To Become One Of Russia's Most Intractable Foes"

* 6 September: "The Historical Russian-Swedish Rivalry Is About To Be Revived Later This Fall"

* 15 September: "Norway's Military Build-Up Against Russia Poses A Serious Threat To Arctic Security"

To summarize, Trump 2.0 is pursuing a three-pronged strategy against Russia:

1) build Golden Dome missile defense infrastructure in the Arctic to greatly mitigate Russia's nuclear second-strike capabilities;

2) arm Canada and the Viking Bloc (Denmark, Norway, Sweden, and Finland) to threaten Russia; and then

3) likely push Russia's limits along the Northern Sea Route for the purpose of provoking a crisis that would then render this corridor dangerous and thus greatly reduce its use at minimum.

The pressure that the US is placing upon Russia along the Arctic front via these means complements that which it's also placing through Polish-led efforts in Central & Eastern Europe and Japanese-led ones in Northeast Asia. All of these fronts consist entirely of US mutual defense allies, but the Turkish-led one along Russia's entire southern periphery doesn't, yet a hypothetical special operation there (such as against Azerbaijan) might be deterred by the possibility of the US responding via the other fronts.

Simply put, a "cordon sanitaire" has been assembled around Russia, and this containment noose is being tightened the most by the military-technical developments along the Arctic front than anywhere else. Up till recently, this was the quietest front of the four, but that just shows that its members were moving silently to avoid attracting attention from Russia.

The latest Yearbook proves that the Kremlin had been monitoring them all along and is thus planning its response, however, so this front will likely heat up.

Tyler Durden Sun, 09/20/2026 - 08:10

Total PsAI-Op: How Altman, Amodei, And The 'EA' Cult Are Milking "Rogue AI" Breakouts To Protect A Trillion-Dollar Bubble

The sudden emergence of an 'AI Panic' over the past weeks and months was highly suspect from the beginning. According to tech insiders, Silicon Valley's apex AI labs are deliberately overselling "rogue AI" hacks to pressure the federal government into building a regulatory moat that would lock out future competition - and the timing, months after both OpenAI and Anthropic announced plans to go public, couldn't be more obvious.

Akhil Verghese, founder of AI software company Krazimo, told the NY Post the incidents were no rebellion: "They were simply told to get the best result possible on a test." Voice AI co-founder Abhi Kumar was blunter: "One man's 'the model escaped the sandbox' is another man's 'you failed to build the sandbox correctly.'" Taivo Pungas, chief intelligence officer at Pactum AI, said the leap from "we didn't build the right sort of box" to a whole-of-government emergency feels exaggerated.

PANIC! 

The AI "breakouts" that lit up Capitol Hill this summer were about as organic as #4 red dye. On July 16, OpenAI models running a cyber evaluation exploited a zero-day and got from their test range into Hugging Face's production systems; OpenAI disclosed it five days later, naming GPT-5.6 Sol and an unreleased model, and noting the models had been configured "with reduced cyber refusals so they could attempt offensive exercises that normal safeguards might reject." Nine days after that, Anthropic disclosed three incidents of its own.

According to Anthropic's July 30 write-up - the "waking up" narrative is total bullshit. "A misconfiguration left the machines that Claude accessed as part of the evaluation with live internet access," the company wrote; the models had been told they were offline. Claude Opus 4.7 went after a real company that happened to share a name with the fictional target and pulled "several hundred rows of production data." Mythos 5 published a booby-trapped Python package to the live PyPI registry that was "downloaded and run on 15 real systems." An unreleased research model scanned "roughly 9,000 targets" and got into one company's web app "using basic and well-known cyberattack techniques." Anthropic's own verdict: "We believe these incidents to be closer to a harness and operational failure than a model alignment failure." It halted cyber evals on July 23 and called in METR - their preferred Orwellian arbiter - to review.

Anthropic's account has one wrinkle: Opus 4.7 kept attacking after it recognized the system was real. Only the newer research model stopped. So the machines are not uniformly "blameless" - but a model that keeps following its instructions on a misconfigured network is Irregular's failure, not evidence of intent.

The Common Denominator

Every one of these evaluations was run by the same third party: Irregular, an AI security firm that tested the OpenAI, Anthropic and Google models and, per Axios, hit "the same security issues" each time. The Verge adds Meta to the list - a pattern Axios's Sam Sabin flagged in July:

Anthropic's models accidentally had access to the internet during model testing due to a "misunderstanding" with third-party testing partner, Irregular. no 0-days in this case, unlike the OpenAI/Hugging Face incident

— Sam Sabin (@samsabin923) July 30, 2026

Then came Gemini. On Friday, the Wall Street Journal reported that Google's model had broken into three real companies during an Irregular capture-the-flag exercise. The incident happened in May, Irregular published its report on August 14, and Google didn't mention it until the Journal called - and then explained that it hadn't considered the hacks worth disclosing because Gemini "acted appropriately" and stopped once it realized the targets were real.

Irregular told Axios the model "wasn't supposed to be able to get online, but internet access was unintentionally available," and the fictional target company "had the same name as a real one." In one case Gemini guessed passwords until it got in; in two others it found credentials sitting in a public repository. Irregular says "all known issues on our end were remedied and resolved weeks ago" and that the Gemini case "does not represent a materially separate incident." Google VP Heather Adkins: "Safe development of powerful AI models is critical and we invest deeply in this area."

But when looking at the actual events, the model was blameless.

To make it clear:
- Gemini was told it was it was in a fictional hacking eval
- Irregular unintentionally opened internet access after the eval started
- in all three cases, as soon as Gemini figured out it had hacked a real company it immediately stopped

Gemini was blameless.

— Andrew Curran (@AndrewCurran_) September 18, 2026

So Google - which isn't asking Washington to pace anything, considered the incident a non-event - yet the two labs lobbying for a federal slowdown scrambled to put out press releases.

Industry commentator John Ennis put the obvious question, pointing out that "once is an accident, twice is questionable, but three times looks intentional".

Why does the Irregular keep "accidentally" connecting these models to the internet?

Once is an accident, twice is questionable, but three times looks intentional

And they are EA aligned

Something is rotten here, IMO

— John Ennis (@johnennis) September 19, 2026

The Effective Altruism movement is the doomsday tendency that has spent a decade staffing AI safety boards and testing labs on the premise that AI will kill everyone unless the right people are in charge of it. Whether Irregular is EA-aligned is Ennis's call. That it is the one firm under all of these incidents is on the record from Axios, The Verge and Anthropic itself.

The Pacing Play

Six days before the Gemini story broke, Dario Amodei published a September 12 post warning that within 6 to 12 months an AI swarm could "take over the entire internet with a persistent botnet," potentially causing hundreds of billions of dollars in damage. His prescription: "We must slow the pace at which we improve the capabilities of AI models." Sam Altman and Elon Musk signaled support. In a nutshell, Pacing the Frontier™ is a bid to become strategically indispensable - too big to fail, with Beijing as the justification.

Nvidia's Jensen Huang - circle-jerker-in-chief noted: "What better way to create demand than to create a problem." lol yes. 

Palo Alto Networks CEO Nikesh Arora called it a "NINJA move" and then, after more time talking to labs, open-source projects and government, warned it could backfire:

Sequel to AI Pacing

I have now spent more time talking to people who run AI labs, Open Source projects and those in government and infrastructure.

I am beginning to feel the NINJA move could backfire.

I understand the pressure to come out and share where AI is "unmanageable ", and constantly share examples where it runs rogue. This fits in the category of "self-reporting" and an attempt to limit liability...

Here are the consequences of the NINJA move.
1. They have successfully encouraged every law maker around the world to have an opinion...
2. By proposing pacing - they have introduced uncertainty in the AI infrastructure trade...
...
It's time to rebuild the brand of AI - any marketing expert will tell you, this Ninja move has done more to harm the brand of AI and will take a while to rebuild. #letsbepositive in our actions and our narrative.

— Nikesh Arora (@nikesharora) September 19, 2026

Lawmakers jumped on this right on cue.

Senator Josh Hawley opened an investigation into OpenAI on September 9, with a records deadline of October 1; Senator Bernie Sanders announced a bill to ban further frontier-lab development; Senator Elizabeth Warren demanded an "immediate pause." As we noted earlier this week, everybody in this conversation is talking their own book. On Friday the White House joined in from the other side: Trump posted that AI safety concerns are a "hoax" and said he will appoint an AI czar and stand up an "AI Force," per Bloomberg.

Follow The Money

Oh and then there's that, yes. A leaked OpenAI presentation obtained by the Financial Times projects negative free cash flow of $278 billion from 2026 to 2030, with the company's compute bill rising from a $600 billion estimate in February to $856 billion by July - against revenue it hopes to grow from $36 billion this year to $350 billion in 2030. As we detailed previously, Altman has already walked back the timeline on the economic transformation that was supposed to pay for all of it.

Anthropic, meanwhile, has shifted its planned IPO from October to November, per the Journal, on what Reuters reports is $100 billion-plus in annualized revenue. And a week after its CEO said the industry must slow down, Reuters reports Anthropic is considering rushing out a new model to counter OpenAI's momentum ahead of that IPO. Pacing for thee.

he meant AFTER the IPO https://t.co/KXIPQzEhUf pic.twitter.com/bCDDsPmWXl

— zerohedge (@zerohedge) September 19, 2026

If an open-weight model out of Hangzhou does 95% of what Claude or GPT-5 does for a fraction of the cost, the valuations both labs are banking on implode. The only way to protect the margins, justify the cash burn and satisfy Wall Street is to make it legally impossible for anyone else to compete - a regulatory moat so thick, and compliance costs so high, that only a $100 billion corporation can afford to train a frontier model. Arora's point stands: no actual security fix has been proposed, only more "compute spent on safety" and a federal body to bless it.

The models didn't rebel. A contractor left the internet on, three times that we know of, and the two labs with IPOs to protect turned that into a case for federal pacing. Hawley's records are due October 1, Anthropic has promised a redacted PyPI transcript and an outside METR review, and Google's explanation for sitting on a May breach of three companies until a newspaper called is that the model behaved. Don't believe the byte.

* * *

Tyler Durden Sun, 09/20/2026 - 08:00

Massie Explains Strategy For Going After Hegseth

The non-interventionist D.C.-based think tank Quincy Institute for Responsible Statecraft has published an interview with the one Republican who has been most outspoken against Trump's Iran war.

Trump had in turn starting last spring launched a political war of his own against Kentucky Rep. Thomas Massie, who has been in the hot seat, with his political future in question. But Massie has been unrelenting, even after being defeated for another term by the largely unkown Ed Gallrein, a Republican candidate backed by President Trump and the American Israel Public Affairs Committee (AIPAC), and groups like the Republican Jewish Coalition.

Massie, who has unveiled eight articles of impeachment against Secretary of War Pete Hegseth, spoke to Responsible Statecraft about why he's gong after Trump's Pentagon chief - which appears focused on the his launching 'unauthorized' military actions in Iran, without Congressional approval. The argument as laid out below hinges on whether Hegseth was following 'lawful orders' from the Commander-in-Chief. Massie says no.

As it turns out, that potentially 'awkard' (for Republicans) impeachment vote has been entirely avoided for now with an early House election recess.

"A vote to impeach Secretary of Defense Pete Hegseth that could have happened in the U.S. House as early as Thursday will now be avoided, at least until after this year’s midterm election. Republican leaders announced Wednesday they would leave Washington a day earlier than scheduled," CNBC reports.

"House Speaker Mike Johnson’s decision cuts short by a day an already light congressional work period, in a month that will see the House in session for just six days," the report adds. "The chamber is not due back in Washington until after the Nov. 3 election, as lawmakers will now fan out to campaign."

Mike Johnson sent lawmakers home Wednesday, avoiding a Hegseth impeachment vote as well as a bipartisan effort to release additional Jeffrey Epstein files.

🇺🇸 House recesses early to avoid vote on Hegseth impeachment

Speaker of the House Mike Johnson sent lawmakers home Wednesday, avoiding a vote on a resolution by Rep. Thomas Massie of Kentucky to impeach War Secretary Pete Hegseth as well as a bipartisan effort to release… pic.twitter.com/qZCBWrMnnF

— Drop Site (@DropSiteNews) September 17, 2026

Below is the Kelley Vlahos interview with Massie transcript produced by Responsible Statecraft [emphasis ZH].

*  *  *

Responsible Statecraft: Why are you bringing this about right now?

Rep. Thomas Massie: Because we have exhausted every other legislative remedy to make things right. We are at the point now where Hegseth is just ignoring the law. He's ignored the concurrent (War Powers) resolution. He ignored the 60-day limit. They never reached the threshold required under section 2-C under the War Powers resolution of 1973. He's severely degraded the DoD's ability to winnow out civilian targets from their target list.

There is an active and ongoing war that should be stopped immediately, and I think this is an effective way to do it. It's literally the only legislative remedy that I could think of that might work.

RS: I would imagine the timing is important because the House is leaving until after the midterm elections in November.

Massie: Yeah, and the Speaker has to schedule a vote within 48 hours.

I suspect there will be a motion to table; that's usually what these resolve to, if they're not supported.

RS: So what happens then?

Massie: Well, I would encourage people who are even unsure about the bill to vote against the motion to table, and hear the debate.

RS: Let’s get back to the merits of the case here. This is pretty wide-ranging, so you hit the constitutionality of the war, the civilian deaths, the kidnapping of (former Venezuelan President Nicolas) Maduro, the airstrikes on so-called narco boats, even your freedom of speech where Senator Mark Kelly is concerned. You're really going at him with both barrels here.

Massie: There's two categories of articles here. One category, which covers six of the articles, is that he basically followed illegal orders from the president. And these are illegal orders that were issued by the president, but Hegseth is under obligation not to follow them since they were illegal. And there's a category of impeachment articles here that are solely attributable to Hegseth himself where he degraded the infrastructure of the DoD which is supposed to minimize the civilian casualties. That's his. I don't think Trump was involved in that. And then the attack on Mark Kelly, where he weaponized the DoD to squelch the speech of a senator and a veteran. That's solely Secretary Hegseth's doing. So there are things in here which are top-level issues with the administration all the way to Trump, but then there are some that are uniquely Peter Hegseth’s high crimes or misdemeanors.

Peter Hegseth wins the award for most crimes committed. And he just committed one too many; I couldn't take it anymore.

RS: That begs a question, why didn't you just go after Trump?

Massie: Well, I kind of already answered that question. Some of these things, like the civilian targeting, are Hegseth’s alone, and some of it, Trump would probably ascribe to Hegseth and not himself to save his own skin. I just don't think it's politically feasible or viable or even advisable to try to impeach Trump.

RS: A reporter just asked newly confirmed Attorney General Todd Blanche about your articles of impeachment and you. Aside from him saying he thinks Hegseth is doing “a phenomenal job,” he said he disagreed with the characterization that we are in a war, and that a majority of Congress would disagree as well. What do you make of these continuing assertions by the White House, the administration, even members of Congress, that we can't call it a war?

Massie: Well, somebody better give the president that memo. He calls it a war every week.

It's beyond playing with semantics. It's beyond trying to be cute legally. There's no way you can say this is not a war. Even the raid in Venezuela was an act of war. We overturned the government and put boots on the ground. But at least it seems to be over with now that we have their oil and control of their government.

He's wrong about a majority of Congress not thinking it's a war. A majority of Congress passed a concurrent resolution in the House and in the Senate telling them to stop under the War Powers Act.

So with semantics or not, they've been told to stop. They've claimed to stop the war by day 60, and now they say that every time they strike Iran it’s an unconnected military action to the others.

If you want a little something in the weeds here, I read every communication from the White House to Congress. They are sending us notices every time they do a strike pursuant to the War Powers Resolution of 1973. Now they're obligated to do that, and I noticed at least three of these they said were motivated by a strike on a neutrally-flagged vessel. They're claiming the authority to engage in hostilities on behalf of neutrally flagged vessels. And the War Powers Resolution says that it has to be an attack on U.S. soil or soldiers or infrastructure. They're admitting right there in three of these communications to Congress that their predicate was an attack on something that wasn't American.

RS: Did those (War Powers) communications end when they declared the so-called ceasefire, or do they keep coming?

Massie: They keep coming. In fact they refer to the ceasefire in two of these communications after the ceasefire.

RS: That flies in the face of what they're saying publicly

Massie: Yeah, if it's not a war, how is Trump gonna end it after the election like he told everybody in Texas last week?

Tyler Durden Sun, 09/20/2026 - 07:35

"Calm Down, Lefties! Quiet!": French Soldiers Applaud Military Chaplain's Warning Of 'Great Replacement'

Via Remix News,

A leaked video of a French military chaplain addressing paratroopers in a cathedral has circulated widely on social media. In the clip, the chaplain makes disparaging remarks about leftists, tells soldiers to keep fighting for their national heritage, and warns of the risk that French values and culture could be displaced.

The clip, recorded during a Saint-Michel Mass on Oct. 7, 2025, shows Father Romain Ghandour speaking to soldiers of the 3rd Marine Infantry Parachute Regiment (3e RPIMa) at Carcassonne's Saint-Michel Cathedral.

Soldiers can be heard laughing and applauding as he delivers his pointed remarks.

The clip was leaked and published by Le Canard Enchaîne news outlet.

🇫🇷🔴 JUST IN: A video has been leaked of a French military chaplain roasting leftists and warning of the Great Replacement in front of French paratroopers in the city of Carcassonne.

"Calm down, lefties! Quiet! Breathe through your nose!"

Remarkably, the massive audience of... pic.twitter.com/kkteRaaTu0

— Remix News & Views (@RMXnews) September 18, 2026

The video was released in mid-September 2026, nearly a year after the Mass.

Saint-Michel is the patron saint of paratroopers and airborne troops in the French army, which explains why the regiment was gathered in the cathedral.

Christophe Barthès, then a municipal election candidate and later elected mayor of Carcassonne for the right-wing National Rally, was among those present.

Ghandour begins by invoking the names and dates of men and women who died so that France would remain "a beautiful country," one in which architects could continue building "basilicas, cathedrals, housing, and fortified castles."

He contrasts that heritage with the present: instead of knights, he says, "we put incompetent people. We put people who eat seeds, people who lecture everyone, ideologues."

The phrase "people who eat seeds" is widely understood as a jab at what he presents as weak or overly ideological leftists.

The line that has drawn the most attention comes next: "Calm down, lefties! Quiet! Breathe through your nose!" The assembled soldiers respond with laughter and applause.

He then warns that if they lose courage and conviction, "we will be ridiculed" and "this beautiful country that is France will be mocked, and others will take our place."

He continues:

"In fact, after a while, when you're thirsty, when you're hungry, it's the law of the strongest that reigns. And others will take the place of our values, of this freedom of speech, of action, of this equality between men, and of this fraternity, of this culture, of this society. Nature abhors a vacuum."

While he never directly mentions the "Great Replacement," many commentators have taken this remark to be a direct reference to the phenomenon, which is not only a reference to mass immigration, but also relates to the constant replacement of technology, culture, society, and peoples through all spheres of modern life at an ever accelerating pace. Ghandour closes by telling the soldiers to "keep fighting" and "continue to have the courage of your convictions, as I am trying to do at this Mass."

As of the video's release, there has been no detailed public statement from the army's Catholic chaplaincy or the Ministry of the Armed Forces on whether the remarks violate rules on political neutrality for military clergy.

French military chaplains of all recognized faiths operate under a framework that is supposed to respect both freedom of conscience and the state's neutrality. The 3e RPIMa, based in Carcassonne since 1962 and part of the 11th Parachute Brigade, is an elite unit within the French military.

The left has often been skeptical, and even hostile to, the French military, which has been seen as a bastion of support for the right in the country.

Tyler Durden Sun, 09/20/2026 - 07:00

The Apocalyptic Game: Panic And Opportunity

Authored by Sasha Gong via American Greatness,

America's latest argument over artificial intelligence has suddenly become apocalyptic. Former Anthropic researcher Jacob Coxon accused AI companies of "gambling with our lives." Anthropic CEO Dario Amodei urged the industry to slow the development of frontier models, an idea supported by OpenAI CEO Sam Altman and Elon Musk. At the same time, opposition to the data centers needed to power AI is spreading across the United States.

China has noticed. X recently uncovered a suspected Chinese influence network of roughly 200,000 fake accounts; about 200 of them were directly involved in amplifying claims that American data centers were raising electricity prices and overwhelming the power grid.

This does not mean that criticism of AI or data centers is manufactured in Beijing. Concerns about electricity costs, water use, pollution, cyberattacks, job losses, and mass surveillance are real. But China does not need to invent American divisions. It needs only to identify, amplify, and exploit them.

Modern democracies periodically succumb to predictions that a new technology will destroy humanity. The fear may be legitimate, but its political consequences are not evenly distributed. Democracies permit protest, litigation, regulation, and obstruction. They may even abandon a technology out of fear.

Dictatorships suppress debate, concentrate resources, and use their rivals' hesitation to catch up.

The first great technological apocalypse began with the atomic bomb.

As the Manhattan Project approached completion in 1945, scientists considered whether an atomic explosion might ignite nitrogen in the atmosphere or trigger an uncontrollable reaction in the oceans. Edward Teller raised the possibility; Hans Bethe and others calculated that the risk was physically negligible. The Trinity test proceeded.

The question nevertheless haunted Robert Oppenheimer. After Hiroshima and Nagasaki, he feared that scientists had opened a Pandora's box. When Washington decided to develop the hydrogen bomb after the Soviet atomic test, he opposed it on moral and strategic grounds.

Oppenheimer's Communist associations then turned a policy dispute into a political scandal. His wife and brother were members of the Communist Party USA (CPUSA), and he had many pro-Soviet acquaintances. Meanwhile, actual Soviet spies inside the Manhattan Project - including Klaus Fuchs and Theodore Hall - passed crucial nuclear information to Moscow.

The Soviet Union tested an atomic bomb in 1949 and a thermonuclear device in 1953. China tested its first atomic bomb in 1964, shortly after emerging from a famine that killed 40 million people. Neither Communist regime permitted a genuine public debate over the wisdom of nuclear competition.

The West did. Scientists, churches, students, and citizens organized enormous anti-nuclear movements. Their pressure contributed to test-ban treaties and arms control negotiations. Yet Americans still understood that the danger came not only from nuclear weapons but also from the regimes possessing them. After Sputnik in 1957, few believed the United States could safely withdraw from technological competition while the Soviet Union continued advancing.

After the Cold War, climate change became the next vehicle for apocalyptic politics.

Al Gore's An Inconvenient Truth turned complex climate models into images of approaching catastrophe. Greta Thunberg transformed policy disagreements into moral indictments. Claims that humanity had only "12 years" remaining circulated widely.

Fear of climate change converted a scientific problem into an ideological commandment. Energy restrictions, endless permitting, penalties on traditional industries, and costly transitions were presented as the only acceptable path. These policies greatly contributed to and accelerated Western deindustrialization.

China followed a different course. Unrestrained by voters, environmental groups, or local governments, Beijing concentrated subsidies, land, energy, and credit to build complete industrial supply chains. The West congratulated itself for reducing domestic emissions while transferring production to China. It then discovered that it depended on China for pharmaceuticals, rare earths, batteries, solar panels, and electronics.

The pattern is now repeating with AI.

While Americans debate moratoriums, China is treating artificial intelligence, robotics, and computing infrastructure as pillars of national power. Its "Eastern Data, Western Computing" strategy is creating an integrated national computing network, moving the eastern seaboard's data-processing demands to western provinces with abundant land and energy. Beijing intends to control not only AI models but also the electricity, chips, servers, communications systems, and data centers that sustain them.

China is also competing to write the rules. In 2026, 29 countries signed an agreement in Shanghai establishing the World Artificial Intelligence Cooperation Organization, which Beijing describes as the first intergovernmental organization devoted to AI. China does not plan to pause while America debates whether the future is too dangerous to build.

AI requires serious safeguards: independent testing, cybersecurity standards, protection against biological misuse, transparent energy pricing, and accountability for harms. But regulation should make development safer, not make development impossible. Data-center projects should bear their actual costs, but local objections cannot become a nationwide veto over the infrastructure of the next industrial age.

Open debate is one of democracy's moral strengths. The power to suppress debate is one of authoritarianism's strategic advantages. When democratic caution becomes paralysis, freedom itself becomes vulnerable to exploitation.

America can decide how it develops artificial intelligence. It cannot decide whether artificial intelligence will continue to develop. If the United States stops because it fears the future, China will not stop with it.

Tyler Durden Sat, 09/19/2026 - 23:20

Military Report Details Six UFOs Traveling At 480 MPH

Newly public military records are offering another look at unexplained objects encountered by U.S. forces, including a cluster reportedly moving through Middle Eastern airspace at extraordinary speed, according to the NY Post.

According to a CENTCOM account from 2025, military personnel tracked six round objects traveling together at about 480 mph. Their flight path was unusual enough to draw attention, with the objects repeatedly altering course. Military video from the encounter shows several small objects crossing the sky above an arid landscape.

The Post wrote:

A 2025 report from US Central Command (CENTCOM) details a sighting of “six small spherical objects, grouped together” and “frequently changing direction” at 480 mph. Accompanying the report was one minute of video footage showing the objects as they flew over what appeared to be a desert region.

Another video, from 2023, captured circular objects flying over the Yellow Sea that were spotted by an infrared sensor aboard a US military platform.

In a separate case that year, a Colorado police officer spent about 15 minutes recording a stationary, silent object displaying several different colored lights.

The Post writes that some of the material reaches much further back. In 1952, Navy warrant officer Delbert Newhouse filmed a formation of bright objects while traveling through Utah. The case eventually became part of Project Blue Book, the Air Force's long-running investigation into reports of unidentified objects in American skies.

Officials explored mundane explanations for the Utah footage, ranging from balloons to birds. One Air Force review ultimately attributed the objects to seagulls circling in rising air, although another examination found aspects of their brightness difficult to reconcile with ordinary birds.

The records are part of the government's continuing release of historical and more recent UAP material, providing additional documentation of sightings that military personnel and investigators have examined over decades.

Tyler Durden Sat, 09/19/2026 - 22:45