Putin 'Kept His Word' On Ceasefire, Trump Says, As Large Attacks On Kiev Resume

President Trump has praised his Russian counterpart for keeping his word on the brief winter freeze ceasefire. Last week Trump had picked up the phone and urged President Putin to refrain from attacking Kiev and other major cities.

Trump said of the surprise pause that Putin had agreed to halt strikes for one week. Trump has newly told reporters that the agreement expired on Sunday, and that Russia kept its word.

"It was Sunday to Sunday, and it opened up and he hit them hard last night," Trump explained at the White House on Tuesday. "He kept his word on that… we’ll take anything, because it’s really, really cold over there."

Russian attack in the Ukrainian capital on Feb. 3, 2026. via Associated Press

But it was only last Thursday Jan.29 that first Trump unveiled the contents of the prior Putin call. It seems the pause lasted a little short of a full week, but maybe Trump is only counting business days? It is possible the phone call in question was held significantly before the announcement, but it remains there has not been a full week that Kiev hasn't seen bombs or drones in the sky.

What Trump said at the time was: "Because of the extreme cold…I personally asked President Putin not to fire on Kiev and the cities and towns for a week." He went on to say Putin "agreed to do that," adding that "we’re very happy" with the outcome.

On Wednesday, American, Ukrainian and Russian representatives are once again gathered the United Arab Emirates for the next round of trilateral talks in an effort to forge a final peace. The Abu Dhabi talks are expected to run until Thursday. 

Ukrainian President Volodymyr Zelensky is complaining about the timeline of Trump's winter brief truce, saying it only began last Friday, a day after Trump announced he reached the temporary deal.

And then as Reuters reported:

Russia's air attack on Ukraine's energy system overnight on Tuesday was the biggest since the start of 2026, Ukraine's leading private energy company said.

Power generation and distribution facilities came under attack, and thousands of people were left without electricity, DTEK said on the Telegram messaging app. 

Over 70 missiles and several hundred drones were sent, some knocking out power and thermal plants, amid ongoing slow and costly repairs.

"We await the reaction of America to the Russian strikes," Zelensky said in a Tuesday night statement. “It was the U.S. proposal to halt strikes on energy during diplomacy and severe winter weather. The president of the United States made the request personally. Russia responded with a record number of ballistic missiles.”

He is demanding that Russia feel the pain. "The US Congress has long been working on a new sanctions bill, and there must be progress on it. European partners can take decisive steps regarding Russian oil tankers’ earnings for the war. Russia must feel pressure so that it moves in negotiations toward peace," Zelensky added - though one wonders what there is left to sanction.

The consequences of the attack on Kyiv. pic.twitter.com/XSCs8eRgLY

— WarTranslated (@wartranslated) February 3, 2026

Ukrainian officials have condemned what they are calling a "winter genocide" - given that the latest big strike happened when it is -20C (-4F) in the capital. That's where more than 1,000 tower blocks in the capital were left without heating once again in the wake of the assault which marked the end of the Trump-Putin short truce.

Tyler Durden Wed, 02/04/2026 - 09:50

New York To Deploy Legal Observers From AG James' Office To Monitor Federal Immigration Agents

Authored by Troy Myers via The Epoch Times,

New York is launching a new initiative to monitor immigration enforcement in the state, Attorney General Letitia James said Tuesday.

Her announcement comes amid heightened tensions and increasing protests, threats, and violence against federal agents carrying out arrests of illegal aliens. As part of James’s initiative, her office will deploy legal observers to document immigration enforcement in New York.

The attorney general said the Legal Observation Project’s goal is to protect her citizens’ rights.

“As Attorney General, I am proud to protect New Yorkers’ constitutional rights to speak freely, protest peacefully, and go about their lives without fear of unlawful federal action,” she said in the Tuesday news release.

Wearing purple safety vests, James’s staffers will observe enforcement operations where appropriate and document actions by federal agents.

The legal observers will participate on a voluntary basis, the news release said, serving as neutral witnesses and recording information that could be used in future legal actions.

As enforcement against illegal immigrants continues nationwide, the attorney general said the Legal Observation Project aims to ensure operations stay within the bounds of the law.

“We have seen in Minnesota how quickly and tragically federal operations can escalate in the absence of transparency and accountability,” James said, adding her legal observers will begin monitoring in the coming weeks.

The New York Office of Attorney General staffers will not interfere with law enforcement activity, the news release read.

James’s initiative comes a day after Homeland Secretary Kristi Noem said federal officers in Minneapolis, where large-scale immigration enforcement has been ongoing for weeks, will now be wearing body cameras.

In recent weeks, federal agents fatally shot two protesters in Minneapolis during altercations: A woman who appeared to ram an officer with her car and a man who was carrying a pistol and two magazines when he approached federal agents. Federal officials have maintained the shootings were tragic but justified.

As funding becomes available, body cameras for federal agents will be widely deployed.

"We will rapidly acquire and deploy body cameras to DHS law enforcement across the country,” Noem wrote in her announcement on X.

Body cameras are commonly worn among local and state law enforcement, but Immigration and Customs Enforcement (ICE) agents are not required to wear them.

Although as part of a pilot program that began in 2024, body cameras have been deployed to some ICE officers.

In addition to body cameras being deployed nationwide in the coming weeks for federal officers, James also urged New Yorkers to submit their own videos and documentation of immigration enforcement activities.

Her office said it set up an online portal to which citizens can send their reports.

Tyler Durden Wed, 02/04/2026 - 09:30

No Surprises In Treasury Refunding Statement: No Auction Size Increases For "Next Several Quarters"

Ahead of today's much-anticipated quarterly refunding announcement by the US Treasury, some were hopeful that Bessent could pull an anti-Yellen and forecast a gradual decline in long-term issuance in coming quarters, sending yields lower. None of the happened, however, and instead the Treasury did not surprise markets, announcing that this quarter's refunding total would come in line with estimates, at $125BN (to refund $90.2BN in securities). And while the Treasury said that auction sizes would be unchanged for "next several quarters" as expected, the department said it would continue to rely on bills to fund the increasing amount of federal spending. That said, by late March, the Treasury anticipates incrementally reducing short-dated bill auction sizes in light of the April 15 tax date. These reductions will lead - the Treasury believes - to a cumulative $250-300 billion net decline in total bill supply by early May.

Here is a summary of what the Treasury announced:

No surprises in today's Refunding statement

1. No change in net issuance: Treasury says will keep coupon, floating rate note auction sizes unchanged for "next several quarters" as expected. No ramp in issuance yet. 
2. Refunding size: Treasury offering $125BN in quarterly refunding, as expected. Will sell $58BN in 3Y, $42BN in 10Y and $25BN in 30Y, and will keep auctions sizes unchanged through May. 
3. Bills:  Despite QE Lite, the Treasury expects to "maintain the offering sizes of benchmark bills at current levels into mid-March" By late March, Treasury anticipates incrementally reducing short-dated bill auction sizes in light of the April 15 tax date. These reductions will lead to a cumulative $250-300 billion net decline in total bill supply by early May
4. Cash: Treasury assumes an $850BN cash balance at the end of March.  However, based on current projections for the upcoming refunding quarter, Treasury estimates that the size of the Treasury General Account (TGA) could peak around $1,025 BN by late April.
5. Buybacks: Treasury expects to purchase up to $38BN in off-the-run securities across buckets for "liquidity support" and up to $75 billion in the 1-month to 2-year bucket for cash management purposes in the coming quarter.

Taking a closer look at the Treasury's quarterly refunding statement published at 8:30am Wednesday, the department said it anticipated keeping auction sizes unchanged for nominal notes, bonds and floating-rate notes, “for at least the next several quarters”, a paraphrase of the same forward guidance that debt managers have used for two years now.

As for next week’s refunding auctions, they will total $125 billion, as expected, and will be made up of: 

• $58 billion of 3-year notes on Feb. 10
• $42 billion of 10-year notes on Feb. 11
• $25 billion of 30-year bonds on Feb. 12

The refunding will raise new cash of approximately $34.8BN, net of the $90.2BN in maturing securities.

The Treasury also said it’s “monitoring” the Federal Reserve’s expanded purchases of bills, which mature in a year or less. The central bank in December stunned markets (if not ZH readers, who knew about the move well ahead of time), when it said it would buy $40 billion a month of Bills until April, in an effort to ensure ample reserves in the banking system. And the department is keeping an eye on “growing demand for Treasury bills from the private sector."

As a result, based on current fiscal forecasts, Treasury expects to maintain the offering sizes of benchmark bills at or near current levels into mid-March.  By late March, Treasury anticipates incrementally reducing short-dated bill auction sizes in light of the April 15 tax date.  These reductions will likely lead to a cumulative $250-300 billion net decline in total bill supply by early May. The Treasury "will continue to evaluate near-term borrowing needs and assess additional adjustments to bill auction sizes as appropriate."

The department has for several quarter relied on T-Bills to fund the steadily increasing amount of federal spending. Amid that focus, some market participants ahead of Wednesday’s release reported speculation of aggressive moves to outright reduce bond issuance to help pull down yields that serve as a benchmark for mortgages and other loans. That did not happen.

Separately, the Treasury also "continues to evaluate potential future increases to nominal coupon and FRN auction sizes, with a focus on trends in structural demand and potential costs and risks of various issuance profiles,” the department said. FRNs refer to floating rate notes.

“While the administration’s focus on affordability measures has brought back questions about potential efforts to lower borrowing costs via more active adjustments to the issuance mix, we do not expect Treasury to do so at this point,” Goldman Sachs strategists William Marshall and Bill Zu wrote ahead of Wednesday’s release. Goldman’s take reflected the views of many dealers. Any move to cut sales of bonds, or 10-year notes, would have run against the department’s long-standing pledge to be “regular and predictable” in its debt management. Bessent himself invoked that language in a speech in November.

“The statement itself was very much steady-as-she-goes, with the Treasury reiterating the view that nominal coupon and FRN auction sizes will hold ‘for at least the next several quarters,’” said John Canavan, lead analyst at Oxford Economics.

Meantime, the Fed’s purchases reduce “the risk of Treasury oversupplying” the market with more bills than investors are prepared to handle, Morgan Stanley strategists led by Martin Tobias wrote in their refunding preview. Beyond April, the Fed’s plans are unclear, however — all the more so given Kevin Warsh’s nomination to become the next chair in May. Warsh has in the past advocated shrinking the Fed’s securities portfolio.

Two more things to note: 

While the Treasury assumes an $850 billion cash balance at the end of March, based on current projections for the upcoming refunding quarter, the Treasury now estimates that the size of the Treasury General Account (TGA) could peak around $1,025 billion (plus or minus $50 billion) by late April, before declining rapidly in May after tax day (this estimate reflects significant uncertainty regarding the size of April tax receipts, as well as macroeconomic factors and the path of fiscal and monetary policy).

Additionally, as part of its quarterly Treasury buyback schedule release, the Treasury said it anticipates that, over the course of the upcoming quarter, it will purchase up to $38 billion in off-the-run securities across buckets for liquidity support and up to $75 billion in the 1-month to 2-year bucket for cash management purposes. 

Digging a little deeper we find the following:

1. The minutes of the Treasury Borrowing Advisory Committee’s Feb. 3 meeting indicated the following:

Debt Manager Liang Jensen summarized primary dealers’ views on floating-rate notes indexed to the Secured Overnight Financing Rate (SOFR). Most dealers expressed support for Treasury issuing SOFR-indexed FRNs.

• Supporters argued that a Treasury SOFR FRN would diversify Treasury’s front-end issuance mix and potentially reduce funding costs, given the strong incremental demand
• Some dealers emphasized the risk of potentially cannibalizing demand for Treasury bills and for the existing 2-year Treasury FRN, while several dealers cautioned that Treasury could be exposed to spikes in SOFR during periods of funding market stress
• Most dealers pointed to a 1-year final maturity as particularly attractive in meeting demand from Money Market Funds
• Committee briefly discussed the feedback from dealers and the pros and cons of Treasury issuing a SOFR-linked FRN, and concluded that Treasury should study the idea further

Committee discussed the first charge, addressing bill purchases and the consolidated balance sheet  —  concept of a consolidated balance sheet between the Federal Reserve and Treasury was previously addressed in a February 2020 Committee presentation

• Committee then discussed the circumstances where Treasury should focus on the composition of privately-held Treasury debt outstanding or the composition of total debt outstanding
• Presenter reviewed how key elements of the Fed’s balance sheet alter effective interest rate risk when considered on a consolidated basis
• The presenter noted that, in the current environment, it would be reasonable for Treasury to meet some portion of the Federal Reserve’s System Open Market Account (SOMA) demand for Treasury bills through increased issuance in this sector of the curve
• Also discussed how the results of the Committee’s optimal debt issuance model might change when separating the interest-bearing and non-interest-bearing components
• Presenter advised that Fed policy inflection points are relevant times to consider the composition of privately-held Treasury securities when making issuance decisions

Committee discussed second charge, which addressed trends in demand for Treasury securities. Presenter highlighted several structural shifts shaping demand, including runoff from SOMA, growth in MMF assets, expanding bank portfolios, evolving pension plan structures, increasing Treasury holdings by foreign private investors, and potential demand associated with stablecoins

• The discussion covered key considerations—such as collateral needs, duration management, diversification benefits, and central bank reserve management—that are influencing Treasury allocations in portfolios
• Presenter concluded incremental demand for Treasuries might evolve going forward, noting that the short and intermediate sectors of the curve were likely to experience the broadest growth

2. TBAC (Treasury Borrowing Advisory Committee) said it had a “robust” discussion on the relative tradeoffs of increasing auction sizes more gradually, perhaps earlier than needed, compared to a more accelerated path of increases when the financing gap is larger. While noting the importance of keeping the mandates of the Federal Reserve and Treasury separate, the committee said there can be “cross effects.” 

• The committee in a letter to Treasury Secretary Scott Bessent discussed the level of demand at various points of the curve, while noting that dynamics may continue to evolve prior to the need to raise coupon auction sizes
• “As always, the Committee felt strong communication to ensure a regular and predictable operating framework would help to facilitate any adjustment period for market participants,” TBAC wrote
• Committee also discussed the value of Treasury securities as a portfolio diversification tool, noting that in recent years it has been more volatile, with Treasury securities at times being positively correlated with equity returns
• Reduced diversification value could be a headwind for some segments of Treasury demand, though some TBAC members felt that the markets were returning to more typical countercyclical performance versus risky assets
• Committee concluded that the demand function for Treasury securities was healthy, with several members noting that the distinction between buying Treasury securities for duration and buying them on an asset swapped basis was meaningful.
  • Committee noted the reduction of demand for longer-duration sovereign debt in certain jurisdictions and, in some cases, the shift to shorter issuance from those respective debt management offices
• Committee discussed how Treasury should consider the composition of privately-held Treasury securities compared to total Treasury debt outstanding, including the holdings of the Federal Reserve’s System Open Market Account (SOMA), when evaluating its issuance mix
  • It was in broad agreement that the Fed policy inflection points are relevant times to consider the composition of privately held Treasury securities when making issuance decisions
  • The Fed has a recent history of meaningful Quantitative Easing (QE) actions over short periods of time, the effects of which Treasury could consider in due course. QE that has run its policy course changes the composition of private holdings
  • Treasury may find that it can make cost- and risk-efficient adjustments to its issuance mix due to the resulting changes in supply and demand, within its ever-important “regular and predictable” framework.  Present day considerations include increased demand for Treasury bills as part of Federal Reserve MBS run-off reinvestments and RMPs
• “The separation of mandates for the Treasury and Fed is important, but it is well understood that there can be cross effects; Treasury could factor in the impact of these effects on privately-held Treasury balances when it evaluates its issuance mix,” TBAC wrote

Tyler Durden Wed, 02/04/2026 - 09:20

EU vs. Elon Musk: The Battle Over Free Speech Escalates In Paris

Submitted by Thomas Kolbe

A raid on Elon Musk’s company X in Paris: On Tuesday morning, the French public prosecutor gained access to the company’s offices. The stated purpose of the investigation is the dissemination of child pornography and violations of personal rights through the spread of Deepfakes.

X’s offices in Paris, which were searched by investigators from the Paris prosecutor’s office, the national cyber crime unit and Europol

The French prosecutor’s office carried out the search Tuesday morning at Elon Musk’s X offices in Paris. Officially, the raid targets suspicions of distributing child pornography, according to a statement from the authority. As a further justification, the “Internet and Cybercrime” division cited the recently criticized so-called sexual Deepfakes.

These photo and video manipulations are generated using the AI of the Grok application, which the X platform provides to its users. Another allegation against the platform’s operators concerns the distribution of material denying the Holocaust.

The French prosecutor’s office is thus deploying maximum heavy artillery against X at the next escalation level. These appear to be politically motivated accusations, as the operator of a communication platform ethically cannot be responsible for content published by individual users.

Different Stage 

Clearly, there is more at stake. At the center is the conflict between the European Union and the U.S. government. The recurring point of contention: enforcing European censorship laws under the Digital Services Act (DSA)—now using a morally escalated strategy. Child pornography, Holocaust denial—hardly worse can be imagined. Such content is commercially damaging. And this aligns precisely with the French government’s strategic line, acting here as the executing arm of the EU Commission.

The fight for free speech in Europe has now shifted to a moral battlefield, where rule of law, freedom of expression, and responsibility for certain content are merged into a politically exploitable attack vector.

The message is clear: Those who do not comply with our censorship framework will be pelted with dirt until something sticks. The framework covers the entire conceivable range of direct and indirect censorship—from chat monitoring to editorial oversight of forum content, to post deletion or algorithmic reach limitations.

There is no other way to interpret it: rising criticism from the European public regarding EU Commission policies, open borders, and the green transition has gone too far for the leadership circles. Political fractures loom, seemingly irreparable.

The raid at the Paris office also resembles a classic political smoke screen. France, one of the many fading stars in the EU sky, would have every reason to debate other pressing topics rather than media-staged raids on X in the style of classic police states. Over all government action—or more precisely, inaction—hangs a veritable fiscal crisis. The welfare state is overstretched, the migration crisis forces the country into ever-expanding social programs, and debt is rising again this year by a dramatic five percent of GDP. France is approaching 120 percent debt-to-GDP, nearing de facto insolvency.

Wouldn’t even this visible plunge into the debt spiral alone warrant a deeper debate and new elections, Monsieur le Président?

That a president without a popular mandate, Emmanuel Macron, with approval ratings around 15 percent, chooses to engage in an escalating conflict with Elon Musk on a side front to distract from fundamental problems may be politically understandable. Yet it also exposes the full impotence of France and European politics in general.

The European Union presents itself as a political paper giant, now seeking open conflict with perceived internal and external enemies: internally corroded, lacking trust from the public, economically in decline, and an energy parasitic actor that has shot itself in the foot multiple times by entering a conflict with its most important supplier, Russia, blindly. The colossus staggers toward its end like a mindless schoolyard bully.

Against this backdrop, the rising pressure on opposition voices must be understood. Open resistance is forming in the digital space against the Euro-regime, now fighting back against the unraveling of its climate and power complex, which can no longer be saved. That efforts are being intensified to suppress dissenting opinions fits seamlessly into this logic of decline.

In the case of platform X, the conflict culminates with the disliked American government under President Donald Trump, alongside whom Elon Musk stands as a vocal defender of free speech—and against whom EU elites are now aggressively focusing their attacks. Whether one likes it or not: Trump remains one of the last relevant actors actively defending core Western values like free speech and market economy, while the EU mutates into a substantial control leviathan across all levels of society.

Eerie Silence 

In Europe, it has become eerily quiet around proponents of enlightened politics, those who would defend individual freedoms against an increasingly repressive state apparatus. Tuesday’s actions by French authorities fit perfectly into the EU’s general line: gradually undermining civil rights and freedom of speech through the growing censorship apparatus of the DSA.

And the more cohesive, powerful, and vocal the opposition in Eastern Europe and beyond the Atlantic becomes, forming a strategically acting unit against Brussels’ centralism, the more aggressive—and simultaneously defensive—the Brussels body reacts. Its gestures resemble a staggering boxer sensing the next punch could switch off the lights.

Repeated references to child pornography or alleged copyright violations to justify censorship appear as crude deception maneuvers that even the last supporter of the von der Leyen-Macron EU can see through. These are classic issues for which existing criminal law would suffice.

Yet this finding does nothing to change the central fact: Europe still lacks a firm, decisive confrontation of the bourgeois remnants of our society with this increasingly despotic pseudo-elite.

* * * 

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

Tyler Durden Wed, 02/04/2026 - 07:20

Gold Giant Bundesbank Signals An Open Vote Of No Confidence in Global Monetary Stability

Submitted by Thomas Kolbe

The German Bundesbank hoards the second-largest gold reserves among central banks. The precious metal serves as an insurance policy for both states and private individuals. Its massive price surge shows that the dice have already been cast: governments will attempt to inflate their debts.

Anyone acquiring precious metals in these weeks simultaneously casts a verdict on their currency. This may be a conscious portfolio decision or simply an undefined desire to have a monetary insurance policy at hand. One never knows what the future holds.

Gold jewelry or collectible silver coins are aesthetically appealing and trigger our instinct to collect. What private purchases and the massive hoarding of gold by central banks share is their monetary-policy background.

In honest moments, looking at the soaring global sovereign debts and escalating geopolitical conflicts, we know that our monetary system is heading for severe turbulence. In many places, the fiscal Rubicon has long been crossed. With debt-to-GDP ratios well above 100 percent—in the U.S., China, and numerous European countries—only a massive expansion of the money supply can ensure the public sector’s ability to pay.

Bundesbank Holds Massive Gold Reserves

This occurs at the expense of those trusting in cash. In this context, it is noteworthy that the German Bundesbank hoards the second-largest gold reserves among global central banks.

3,350 tons of gold, with a market value of roughly half a trillion euros, are split between the Bundesbank’s vaults in Frankfurt (50 percent), the New York Federal Reserve (37 percent), and a storage facility in the City of London (13 percent). It is an inheritance from the old Bretton Woods system, when gold was stored near major global trade hubs.

The time is drawing closer to bring the reserves stored abroad back home. In a fragile monetary system, precaution is not alarmism—it is pure self-protection.

Italian Prime Minister Giorgia Meloni must have thought the same. She is working under intense pressure to formally transfer the Italian central bank’s gold reserves to the state—a step equivalent to an open vote of no confidence against the European Central Bank. 

Italy holds 2,452 tons of gold, ranking third internationally behind the U.S. and Germany, giving it, like Germany, a bargaining chip to restart its own currency should a severe euro crisis ever occur.

From the Frankfurt ECB Tower, these developments are viewed with the utmost concern. Nothing corrodes a monetary system faster and more effectively than a loss of confidence in creditworthiness. The banking system, as well as pension funds and retirement insurance, rely on the stability of government bonds recorded on their balance sheets.

Once it became clear that states could no longer consolidate fiscally, the bond market corrected sharply. Billions in losses are on the books, only not written off due to special valuation rules granted by lawmakers.

From the ECB’s perspective, the hoarding of national gold reveals dangerous secession tendencies. It still holds around 500 tons of gold from the early days of the monetary union, when member states contributed gold reserves proportionally to their GDP to support the euro. This is far from sufficient to provide the euro with a stable, metal-backed anchor after decades of money growth.

The repeated desire of ECB President Christine Lagarde to centralize national gold reserves at the ECB vault is almost universally rejected by eurozone members. So much for the repeatedly touted integration of the euro system.

Gold as a Global Trust Anchor

Elsewhere, gold has also become central to stabilizing trust. The BRICS nations have for years worked on creating a payment system independent of SWIFT but have failed so far because no one trusts the Asian hegemon, China.

The solution—the pegging of mutual transfers to gold—was adopted by China during the global financial crisis more than fifteen years ago, when it became the largest buyer in the precious metals market. With roughly 2,300 tons, China now holds the fourth-largest gold reserves in the world.

Besides China, Russia, Turkey, India, and Poland, as well as countries like Egypt and Thailand, have significantly increased their gold holdings since 2008. The price increase is therefore justified and likely to continue in the long term, albeit with growing volatility. 

A positive side effect of this reevaluation is a kind of balance-sheet repair. The deep gaps created by the bond market crisis are closed by the appreciation of gold for those who recognized the approaching sovereign debt danger early.

In Germany’s Bundesbank, gold now represents roughly 80 percent of the entire balance sheet. There is thus motivation in many places to continue boosting the gold price. It is an elegant way to stabilize the monetary system while simultaneously repairing past damages across different institutional levels through a simple repricing.

States Strive for a Gold Monopoly

It is almost a historical irony. When U.S. President Richard Nixon terminated the dollar’s convertibility into gold in 1971 amid soaring debt and massive inflation of liabilities, the so-called fiat credit money system was set in motion. Debts exploded, and states could borrow nearly without limit.

Unbacked credit, combined with ever-lowering reserve requirements, created a perfect Ponzi system, which has now entered its crisis stage.

German policymakers tried to escape this debt spiral by enshrining the so-called debt brake a few years ago. Yet the corrosive erosion of this fiscal constraint began immediately afterward and was ultimately buried last year by Chancellor Friedrich Merz and his high-stakes special fund gamble.

With this policy of unlimited state credit, citizens are driven toward safe havens such as precious metals, accelerating the decline of the fiat credit money system.

The relationship of states to gold remains ambivalent. Aside from committed fiat regimes like Canada, which holds no gold at all, it is becoming increasingly clear that gold can either extend the Ponzi scheme or initiate a new monetary system.

However, citizens fleeing into the safe haven of precious metals become potentially dangerous antagonists, prompting an immediate political counterreaction. Gold purchases are recorded, limited, and legislated in ways clearly designed to capture future portfolio gains.

The Netherlands, for example, is expected to begin taxing unrealized capital gains in 2028—a clear warning.

A general, sharp appreciation of precious metals could create tens of thousands of capital-strong, independent families, particularly in Europe. It is precisely this independence that vexes the etatists in Brussels and EU capitals. The fiscal effect of harvesting book gains in the private sector also plays a role, given runaway sovereign debt.

The ambivalence of gold—and this applies to precious metals as well as other assets without counterparty risk, such as Bitcoin—inevitably provokes massive repression in political regimes focused on citizen control.

Expect other European states soon to follow the Netherlands’ example. The fight for sovereignty has begun.

* * * 

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

Tyler Durden Wed, 02/04/2026 - 03:30

China's Rare Earth 'Monopoly' - And Why Markets Will Break It

Authored by Walter Donway via The Epoch Times (emphasis ours),

Commentary

With its recent announcement of a trade deal with China, the White House intended to reassure markets, manufacturers, and the military that China would not sever the supply lines of “rare earths” to the United States. Among other concessions, Beijing committed itself to avoid restricting exports of rare earth elements and related critical minerals essential to advanced manufacturing, clean “green” energy, and modern weapons systems. The agreement was described as a win for American economic strength and national security. But the very need for such a promise reveals an uncomfortable truth: the United States, long the world’s leading industrial power, has become dependent on the goodwill of a strategic rival for materials central to its economy and its defense.

Environmental impact is visible near an industrial plant in Baotou, Inner Mongolia, China, on Feb. 4, 2016. ebenart/Shutterstock

That dependence did not arise because rare earth minerals are scarce. They are not. Nor did it arise because China alone possesses the technical capacity to mine or refine them. It arose from a long chain of economic and political decisions—made largely in free societies—that concentrated production in a country willing to accept costs others would not.

Understanding how that happened is essential to understanding why China’s apparent monopoly is far less “coercive,” and far less durable, than it looks.

Not Rare, Just Hell to Process

Rare earth elements are a group of seventeen metals mostly in the first row below the main periodic table in the lanthanide series (elements 57–71), plus Scandium (Sc, #21) and Yttrium (Y, #39), which share similar properties and are found in the same deposits as the lanthanides. They are “transition metals” with distinctive magnetic and fluorescent characteristics. The first was identified in 1787, and by 1947 all had been identified. (“Earths” is an archaic term for oxides, the form in which these elements are found.)

Think of these elements not as bulk materials but as metallurgical spices, used in tiny quantities to produce dramatic improvements in performance. Add neodymium to iron and boron and get the strongest permanent magnet known. Add yttrium to turbine alloys and jet engines can tolerate extraordinary heat. Europium makes modern display screens possible; terbium enables efficient electric motors; samarium strengthens guidance systems and sensors.

Despite their name, rare earths are widespread. Significant deposits exist in the United States, Australia, Brazil, India, and elsewhere. What makes them challenging is not their scarcity but their processing. The essential problem is that they are chemically almost identical, so how do you devise subtly different processes to separate them? More generally, they are chemically stubborn—for example, often intermingled with radioactive materials, and require dozens—sometimes more than a hundred—separation and purification steps. Each step consumes energy and produces toxic waste, making rare earth refining among the most environmentally punishing metallurgical processes in the modern economy.

The crux of the matter is straightforward. Mining rare earths is manageable. Processing them cleanly and at scale is hard, expensive, and politically fraught.

How China Built Dominance

China’s rise to dominance in rare earths was neither accidental nor inevitable. Beginning in the 1980s and accelerating through the 1990s and 2000s, China’s one-party dictatorship made a deliberate choice to invest heavily in mining and processing capacity. It did so under the conditions of a command economy that differed starkly from those in the West. Environmental controls were lax or poorly enforced. Local opposition carried little weight. State support absorbed losses and encouraged long-term specialization.

The outcome was leadership—at a price paid largely by Chinese communities and ecosystems. In Inner Mongolia, the world’s largest rare-earth mining region, toxic tailings ponds and contaminated water became infamous. Workers there suffered severe health issues from chronic exposure to toxic dust, heavy metals, and radioactive materials. There were—and are—high rates of respiratory, bone, and other diseases, compounded by environmental devastation and working conditions in the heavily polluting industry. Those costs, however, paid by workers and nearby communities for decades, translated into lower global prices. Western manufacturers benefited as consumer electronics became cheaper, and electric motors became smaller and more efficient. Companies like Apple could embed rare earth magnets throughout their products because the marginal cost was low. Magnets made of rare earth alloys like neodymium, the strongest by weight we know, give that satisfyingly decisive “click” when your laptop closes—and have uses in EVs, phones, and defense systems.

Over time, markets adapted rationally to these price signals. Western processing facilities closed. The United States, once a major producer, allowed its separation capacity to disappear. Even when rare earths were mined in California or Australia, the ore was shipped to China for refining. By the early 2020s, China accounted for roughly 70 percent of global rare-earth mining and more than 90 percent of processing and finished metal production.

Laissez-faire indifference did not produce this concentration. It owed as well to asymmetric regulation. Western governments imposed strict pollution controls and heavy liability that raised domestic costs, while China tolerated environmental and human damage in pursuit of strategic advantage. Markets responded to prices and rules as they existed, and production flowed—over time—to where it was cheapest and easiest to operate, even when that ease was politically manufactured. In this sense, China’s dominance was market-mediated, but politically orchestrated.

(In fact, a few analysts warned for years that China’s tolerance for environmental damage and state-directed investment would translate into strategic leverage. They included Jack Lifton of Technology Metals Research, Dudley Kingsnorth of Industrial Minerals Company of Australia, and researchers at the Congressional Research Service and RAND Corporation—warnings that were widely noted but largely discounted at the time.)

From Specialization to Vulnerability

For years, this arrangement appeared stable. Rare earths are used in surprisingly small quantities, even at scale, and the total global market is modest—comparable in value to the North American avocado market. Shortages were rare. Prices generally trended downward. Supply chains became hyper-specialized, optimized for cost rather than resilience.

The strategic implications were visible, but easy for businessmen and politicians alike to ignore—until China began to test its leverage.

In 2010, during a diplomatic dispute with Japan, Chinese rare-earth exports suddenly slowed. Prices spiked. Panic followed. Although China denied imposing a formal embargo, the message was unmistakable.

A decade later, amid rising trade tensions with the United States, Beijing made its intentions clearer. Export controls were tightened. Licensing requirements expanded. Restrictions on rare-earth processing technologies were imposed.

By 2025, China was openly treating rare earths as a strategic asset, one that could be weaponized in response to tariffs, sanctions, or military pressure. The risks could no longer be ignored. Modern defense systems depend heavily on rare earths. An F-35 fighter jet contains hundreds of pounds of rare-earth materials. Missiles, radar, satellites, and secure communications systems all rely on specialized magnets and alloys for which there are no easy substitutes.

And 2026 continues the uncomfortable dilemma. The United States has the resources, capital, and technical expertise to rebuild domestic capacity—but not quickly. Processing facilities take years to permit and construct. Skilled labor must be trained. Supply chains must be reassembled. In the short run, dependence remained. Trump’s sudden tariff war, framed by Beijing as yet another affront to China’s long-promised redemption from its “century of humiliation,” sharpened the confrontation between what the Chinese Communist Party perceives as a resurgent Middle Kingdom and a declining hegemon.

All of this helps explain the White House’s eagerness to secure Chinese assurances. The deal bought time. It did not solve the problem.

Coercive Monopolies Are Fragile

It is tempting to describe China’s position as a market failure or a natural monopoly. Neither description is quite right. China’s dominance is better understood as a coercive monopoly—one sustained not by insurmountable efficiencies, but by political and regulatory asymmetries. It exists because the command economy of one country accepted environmental and social costs that others rejected, and because governments elsewhere constrained domestic production without fully accounting for strategic consequences.

Coercive monopolies are inherently unstable. They persist only so long as the costs of entry exceed the perceived risks of dependence. Once that balance shifts, the monopoly begins to erode. China’s own actions are now accelerating that shift.

Export restrictions and licensing regimes raise prices and introduce entrepreneurial uncertainty. Those effects are painful in the short term, but they also activate powerful counterforces. Higher prices make alternative supply economically viable. Unreliable supply makes diversification valuable. Strategic risk becomes something investors and manufacturers are willing to pay to avoid. This is the market logic that China cannot escape. By tightening its grip, Beijing invites others to loosen it.

From the American Institute for Economic Research (AIER)

Tyler Durden Tue, 02/03/2026 - 20:55

Sixth Circuit Throws Out DOJ Misconduct Complaint Against Judge Boasberg

The Sixth Circuit Court of Appeals has dismissed a Department of Justice misconduct complaint targeting U.S. District Judge James Boasberg.

Boasberg, an Obama appointee, has been under fire from the right for multiple partisan rulings against the Trump administration and for approving warrants in former special counsel Jack Smith's Arctic Frost investigation that allowed investigators to seize the phone records of Republican members of Congress, a decision widely seen as a politically motivated assault on lawmakers aligned with the president.

The misconduct complaint stemmed from remarks Boasberg reportedly made at the March 2025 Judicial Conference. According to the complaint, he warned Chief Justice John Roberts that the Trump administration intended to “disregard rulings of federal courts” and provoke “a constitutional crisis.”

The Trump administration argued those comments crossed ethical lines and violated the judicial code of conduct.

The complaint also pointed to Boasberg’s 2025 ruling blocking Trump’s plan to deport Venezuelan nationals to El Salvador’s CECOT prison under the Alien Enemies Act. That decision fueled accusations that Boasberg harbored an ideological bias against Trump’s immigration enforcement priorities.

Sixth Circuit Chief Judge Jeffrey S. Sutton formally dismissed the misconduct complaint on December 19, 2025, though the decision did not become public until this week. 

In his decision, Sutton emphasized that the federal government provided no credible evidence of the alleged comments. He wrote that the allegations lacked any corroborating source, and "a recycling of unadorned allegations with no reference to a source does not corroborate them." Sutton added that "a repetition of uncorroborated statements rarely supplies a basis for a valid misconduct complaint."

Even if the comments attributed to Boasberg were verified, Sutton argued, the Trump administration failed to demonstrate how they violated the Codes of Judicial Conduct. He described the Judicial Conference of the United States as "the policymaking body for the judiciary," composed of a diverse group of federal judges from across the country appointed by different presidents. The conference addresses a broad spectrum of judicial issues, from budgets and courthouse maintenance to workplace conduct, judicial security, and judicial independence.

Sutton noted that candid discussions among federal judicial leaders on matters of common concern are a core function of the Judicial Conference. "A key point of the Judicial Conference and the related meetings is to facilitate candid conversations about judicial administration among leaders of the federal judiciary about matters of common concern," he wrote. 

"Confirming the point, the Chief Justice's 2024 year-end report raised general concerns about threats to judicial independence, security concerns for judges, and respect for court orders throughout American history," Sutton added. That report, in his view, validated the appropriateness of similar concerns being voiced at the Judicial Conference.

The White House was not happy with the ruling.

"Left-wing, activist judges have gone totally rogue," a White House official told Fox News Digital. "They're undermining the rule of law in service of their own radical agenda. It needs to stop. And the White House fully embraces impeachment efforts." 

The White House official also argued President Donald Trump needs the freedom to “lawfully implement the agenda the American people elected him on.” The official argued that judges who repeatedly hand down partisan rulings cross a line from interpreting the law to shaping policy, turning the bench into a political weapon. In doing so, the official said, those judges undermine public trust and surrender any legitimate claim to impartiality. The administration has made clear it views activist judges as a fundamental threat to its ability to govern. 

The dismissal of the misconduct complaint hardly ends Boasberg’s troubles. The White House may still pursue other avenues, and he could still face impeachment. During a Senate Judiciary Committee hearing last month, Sen. Ted Cruz urged the House to begin impeachment proceedings against Boasberg over his controversial gag orders in 2023. 

Tyler Durden Tue, 02/03/2026 - 20:30

RFK Jr. Announces $100 Million Program Aimed At Homelessness And Addiction

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Health Secretary Robert F. Kennedy Jr. on Feb. 2 announced a new $100 million program that he said will help homeless people find jobs and treat drug abuse.

Health Secretary Robert Kennedy Jr. in the East Room of the White House on Jan. 16, 2026. Madalina Kilroy/The Epoch Times

The $100 million investment is aimed at assisting homeless people and drug users in recovering from addiction, finding employment, and locating stable housing.

Kennedy told an event on Prevention Day—which is sponsored by the government and dedicated to preventing drug abuse—in Washington on Monday that the health care system under the previous administration was designed to cycle people who suffer from mental illness and drug addiction “between sidewalks, emergency room visits, jails, mental hospitals, and shelters.”

“No one took responsibility for the whole person. No one stayed long enough to help them recover, to help them reestablish their links, and teach them the lessons of how to live in a community,” he said. “That system is neither humane nor effective.”

Kennedy, who has said his addiction to heroin ended with help from 12-step programs, said that the $100 million would fund pilot initiatives that are crafted to resolve long-term homelessness and reduce opioid addiction by expanding treatment regimens that emphasize recovery and self-sufficiency. The program is known as Safety Through Recovery, Engagement, and Evidence-based Treatment and Supports, or STREETS.

“STREETS will engage people continuously, from first contact on the street through recovery, through employment, and through self-sufficiency,” Kennedy said. “Law enforcement, first responders, courts, housing providers, and health care systems will work as one team, so people will no longer fall through the cracks.”

Anyone else rewatching The Wire rn?

STREETS follows an executive order President Donald Trump signed in January that says drug addiction is a chronic disease and that the administration needs to prioritize addiction treatment and recovery.

The new program builds on an investment federal health officials awarded in 2025 to boost homes for recovering addicts. Kennedy says he knows many people who have recovered in such homes.

Kennedy also announced the government will be providing $10 million through an assisted outpatient program to help adults designated as having serious mental illness, which he said will reduce hospitalization, incarceration, and homelessness.

Officials also said that the Department of Health and Human Services will, moving forward, let states use federal funding to pay for addicted parents to receive Food and Drug Administration-approved medications.

And they said that they would be giving faith-based organizations that meet certain standards funding to help with drug addiction recovery.

“This is a chronic disease. It’s a physical disease, it’s a mental disease, it’s emotional disease, but above all, it’s a spiritual disease,“ Kennedy said. ”And we need to recognize that, and faith-based organizations play a critical role in ... helping people reestablish their connections to community.”

Tyler Durden Tue, 02/03/2026 - 20:05

Why Skyrocketing Premiums Were Inevitable With Obamacare's Design

Authored by Lawrence Wilson via The Epoch Times,

The Affordable Care Act would “bend the cost curve” in health care, “moving the health care system toward higher quality and more efficient care.” So said a White House statement in 2013.

Many people now agree that didn’t happen.

“We pay more than any other country in the world for worse health care,” Sen. Elissa Slotkin (D-Mich.) said while campaigning for office in 2024.

“Families pay more, get less, and we’re left with few choices,” Rep. Mike Lawler (R-N.Y.) testified in a December 2025 committee hearing.

A combined 70 percent of Americans believe the U.S. health care system is either in crisis or has major problems, according to a 2025 Gallup poll.

Health insurance premiums have more than doubled since Obamacare began in 2014, rising twice as fast as inflation. And satisfaction with the cost of health care registered a record low in 2025, at 16 percent.

How did that happen?

Many consumers believe insurance companies are responsible. Insurers shift the blame to hospitals and pharmaceutical companies. Pharmaceutical companies say pharmacy benefit managers are at fault. Political parties blame each other.

Some independent observers agree that the rise in premiums, especially recently, is largely driven by external forces, including the increased use of expensive medications, rising labor costs, and inflation, which reached a 40-year high in 2022.

Others see a more basic cause, one with roots in the Affordable Care Act, the federal law that created Obamacare. Some of the same policies that make Obamacare popular with consumers are actually cracks in its foundation, these observers say. Those policies all but guaranteed premium increases, especially in the program’s early years.

House Speaker Mike Johnson (R-La.) speaks to reporters as he leaves the House chamber at the U.S. Capitol on Dec. 17, 2025. On Jan. 8, 2026, seventeen House Republicans joined Democrats to pass a three-year extension of the expired Affordable Care Act premium tax credits. Kevin Dietsch/Getty Images

Here are the key provisions of Obamacare, which some experts say undermined its success.

Foundations of Obamacare

The Affordable Care Act made profound changes in the health insurance industry. One of the changes required insurance companies to issue health insurance in the individual and small-group markets to any applicant, regardless of pre-existing illness.

Americans generally like that idea. More than two-thirds of the public says that provision is very important, according to polling by health care research group KFF. That includes 54 percent of Republicans, 66 percent of independents, and 79 percent of Democrats.

Known as guaranteed issue, this was one of four foundational provisions built into Obamacare to make health insurance available to more Americans.

The second foundation was community rating, which required insurers to rate, or price, their plans based on the demographic profile of a community, with only limited increases based on age and tobacco use. According to this provision, premiums for people of the same age group in the same geographic area are pretty much the same.

The third foundation was the requirement that certain essential health benefits be included in every plan, except for catastrophic health plans. This ensured that consumers would get real value for their money and not be surprised to find that services such as emergency room visits or maternity care were not covered.

The Department of Health and Human Services eventually decided on 10 essential health benefits.

The final foundation was the individual mandate. This required most adults to either buy health insurance or pay a fine. The point was to keep overall costs down by ensuring that young, healthy people, who would likely incur fewer charges, would stay in the market. The fine was $95 per adult in 2014 and rose to $695 by 2016.

Informational pamphlets are displayed during a health care enrollment fair in Richmond, Calif., on March 31, 2014. Health insurance premiums have more than doubled since Obamacare began in 2014, rising twice as fast as inflation. Justin Sullivan/Getty Images

Though some of these provisions were popular with consumers, they increased both cost and risk for health insurers. And though the new rules made insurance premiums lower for some customers, prices went up for some others.

And the new rules applied to all new plans for individual and small-group insurance sold in the United States, guaranteeing a shift in the entire market, not just the Obamacare exchanges.

Higher Cost, Increased Risk

As the Affordable Care Act was being considered and implemented, stakeholders warned that these sweeping changes could make insurance more expensive. At a minimum, they said, the requirement that plans cover a suite of essential health benefits could raise premiums.

The Board of Health Care Services at the National Academies warned that including too many essential health benefits could make insurance unaffordable for individuals and small businesses.

“If this occurs, the principal reason for the [Affordable Care Act]—enabling people to purchase health insurance and thus covering more of the population—will not be met,” the board wrote in 2012.

Insurers were wary too. America’s Health Insurance Plans, an industry trade group, told regulators in a 2012 letter that the choice of essential health benefits would have “far-reaching implications” on the affordability of health insurance.

Increased risk was also a concern.

Insurers speculated on the legality of the individual mandate and warned that Obamacare wouldn’t be viable without it.

“The insurance market reforms cannot function as Congress intended without the mandate and therefore should be struck down if the mandate is held to be unconstitutional,” the insurance trade group argued in a brief filed with the Blue Cross Blue Shield Association.

The old risk management strategy of medical underwriting—pricing premiums based on the underlying health risks of an individual or members of a small group—was no longer an option.

Community pricing would reduce premiums for people with pre-existing conditions or other health risks. But premiums would increase for younger and healthier people. Some observers feared that younger people might stay out of the market, then buy health insurance only when they became ill.

If that happened, it would throw off the risk predictions insurers had made, leaving them with an older, sicker population to cover. In the insurance business, this situation is known as adverse selection.

Timothy Jost of Washington and Lee University School of Law, in a 2010 report for The Commonwealth Fund, called that possibility “the greatest threat facing exchanges.”

Michael F. Cannon, a health policy expert at the Cato Institute, in 2010 saw the potential for an “adverse-selection death spiral.”

Risk Mitigation

The Affordable Care Act acknowledged the increased risk for insurers and included three provisions to keep premium prices stable.

First, the law included a risk adjustment. This was meant to protect health plans that wound up ensuring an exceptionally high-risk group of people. Plans that wound up with a lower-than-average risk group would make a payment to plans having a higher-than-average risk group.

Second, the law included a reinsurance program. This was to help plans deal with unexpectedly high medical costs for an individual enrollee. All insurers paid into a reinsurance pool. At the end of the year, each could submit a claim for individual enrollee costs that exceeded a certain threshold. This program, which was intended to be temporary, ran from 2014 through 2016.

Third, the law created risk corridors. This was to help health plans whose total claim payments exceeded the predicted amount. Plans that had lower-than-expected claim totals would pay into a fund. The fund would make payments to plans with claim costs higher than their target amount. This program was also intended to be temporary and ran from 2014 through 2016.

A customer meets with a Sunshine Life and Health Advisors agent while waiting for the Affordable Care Act website to come back online to purchase a health insurance plan in Miami on March 31, 2014. Joe Raedle/Getty Images

The Spiral Begins

The first several years of Obamacare saw lower-than-expected enrollment, higher-than-anticipated costs, and diminishing choice in the marketplace.

Enrollment was significantly lower than expected in the early years, which observers had warned could be a sign of adverse selection.

After a shaky start due to glitches in the online marketplaces, enrollment in 2014 actually exceeded the modest Congressional Budget Office forecast.

Yet the overall market grew by just 4.2 million that year, as many of the 8 million Obamacare enrollees were people who had moved over from the commercial market, according to a report by Amanda E. Kowalski of Yale University.

By 2018, Obamacare enrollment stood at 11.8 million, nearly 1 million less than in 2016 and less than half of the 25 million predicted by that date.

Data suggest that many of the missing enrollees were young adults.

Obamacare needed an enrollment mix that included 38 percent young adults to avoid a “death spiral,” Cato Institute reported in early 2014.

At the close of its first enrollment period in 2014, Obamacare had an enrollment pool that was just 28 percent young adults aged 18–34. A Commonwealth Fund report indicated that people whose premiums increased had been slightly less likely to buy insurance in 2014. Young adults would have been among those whose rates went up.

The individual mandate, which aimed to offset this factor, faced court challenges beginning in 2010. Though it was not ultimately ruled unconstitutional, Congress set the penalty for noncompliance at $0 in 2017, effectively ending the federal mandate.

A pedestrian walks past an insurance agency that offers Affordable Care Act plans, in Miami on Jan. 28, 2021. Following the COVID-19 pandemic and enhanced subsidies approved by Congress in 2021, enrollment more than doubled, reaching a record 24.3 million in 2025. Joe Raedle/Getty Images

Enrollee age was not the only indicator of adverse enrollment, Kowalski reported. Her analysis of cost data concluded that marketplaces in at least 16 states experienced adverse enrollment in 2014.

Data indicate the cost of insuring Obamacare enrollees exceeded expected levels in the early years.

The reinsurance program had obligations exceeding income by nearly $10 billion over three years.

The risk corridors program fared no better. Income was insufficient to meet obligations in 2014, so all 2015 income and at least a part of 2016 income was used to pay off the 2014 shortfall.

The increased coverage requirements had the predictable effect of increasing premium prices, according to a 2017 report by the Department of Health and Human Services.

“In most states these regulations increased insurance coverage requirements and would be expected, on average, to increase the price of [Affordable Care Act]-compliant plans relative to pre-[Affordable Care Act] plans all else equal.”

Premiums increased 22 percent in the first year and a total of 84 percent by 2018.

Insurers began to leave the marketplace. In 2015, an average of 8.8 insurers in each state participated in Obamacare, according to KFF. By 2018, that number had dropped more than one-third.

The COVID Years and Beyond

In the middle years of Obamacare, enrollment decreased, then plateaued after reaching a high of 12.7 million in 2016. Premiums decreased somewhat too, dropping about 9 percent over four years from their high point in 2018. And insurer participation ticked up slightly in 2019.

Then came COVID-19 and the enhanced premium subsidies created by Congress in 2021.

A woman wearing a face mask walks past a COVID-19 test site in Manhattan, N.Y., on Nov. 2, 2020. Chung I Ho/The Epoch Times

Those enhanced subsidies, which expired in 2025, provided financial help to Americans with higher incomes and further lowered the cost of Obamacare for low-income people. Enrollment more than doubled, reaching an all-time high of 24.3 million in 2025.

Yet as enrollment spiraled upward, so did premiums. Prices reached a new high in 2025, averaging $497 per month for a 40-year-old enrolled in the most popular plan.

What didn’t change dramatically was the age profile of enrollees. Though some young adults entered the market in the era of enhanced subsidies, their numbers never exceeded the 2014 rate of 28 percent.

And despite a rise in the number of insurers doing business in Obamacare, some of the largest companies say they find it unprofitable.

David Joyner, the CEO of CVS Health, testifying before Congress on Jan. 22,  said its costs exceeded income in the Obamacare marketplaces last year, and Gail Boudreaux, CEO of Elevance Health—the parent company of Anthem—said it did not turn a profit from Obamacare in 2025.

David Cordani of The Cigna Group said, “We lost money in the exchange all but two years since 2014.”

Tyler Durden Tue, 02/03/2026 - 17:40

English Only: Florida Eliminates Foreign Language Options For Driver's License Testing

Florida announced on Friday that all driver's license exams will be conducted in English only starting Feb. 6, and will end testing in other languages such as Arabic, Chinese, Haitian Creole, Spanish, and Russian, the state's Department of Highway Safety and Motor Vehicles said.

Vehicles travel along I-95 in Miami, Fla., on May 24, 2024. Joe Raedle/Getty Images

The change applies to both commercial and non-commercial driver's licenses and permits. 

The move comes after federal authorities mandated last year that all commercial drivers be proficient in English to ensure safety - leading to 9,500 commercial truckers getting booted from service by December 2025 for failing proficiency checks. 

"This is a much needed step forward to protect Floridians," said Florida Chief Financial Officer Blaise Ingoglia in a post to social media. 

Miami-Dade County Tax Collector Dariel Fernandez agreed, writing on social media "This decision was made to strengthen roadway safety, ensure clear communication, and support consistent understanding of traffic laws across our state." 

That said, Fernandez acknowledged that this may be difficult for Floridians who don't speak English natively, writing "[As] an immigrant, I understand the challenges many in our community may face."

As the Epoch Times notes further, Florida, in recent years, has increased restrictions on the issuing of driver’s licenses, citing an effort to combat illegal immigration. In 2024, Florida Gov. Ron DeSantis signed into law legislation that stripped recognition of out-of-state licenses and identity cards issued to illegal immigrants and increased criminal penalties for driving without a Florida-recognized license.

“We don’t give driver’s licenses to illegal aliens, which you shouldn’t,” DeSantis remarked at an event in March 2024. “This is going to be a deterrent for illegal immigration into the state of Florida.”

Last August, an Indian national was accused of causing a deadly crash that killed three people when he made an illegal U-turn driving a semi-truck in Florida. The Department of Transportation found that Harjinder Singh, an illegal immigrant, did not pass an English proficiency exam. He was issued a commercial driver’s license by both Washington state and California.

Singh pleaded not guilty to charges of vehicular homicide in September 2025.

Tyler Durden Tue, 02/03/2026 - 17:20

Trump Says Administration Will Seek $1 Billion In Damages From Harvard

Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

President Donald Trump said on Feb. 2 that his administration would demand Harvard University to pay $1 billion in damages, labeling the university as “strongly antisemitic.”

A flag hangs on campus at Harvard University in Cambridge, Mass., on Sept. 4, 2025. Shannon Stapleton/Reuters

“We are now seeking One Billion Dollars in damages, and want nothing further to do, into the future, with Harvard University,” the president said in a Truth Social post.

The Trump administration last year attempted to freeze billions of dollars in federal funding from Harvard following an investigation into diversity, equity, and inclusion (DEI) initiatives and claims of anti-Semitism in higher education. The White House said in April that Harvard had failed to protect its students from harassment and violence on campus.

“Harvard has been, for a long time, behaving very badly! They wanted to do a convoluted job training concept, but it was turned down in that it was wholly inadequate and would not have been, in our opinion, successful,” Trump wrote.

“It was merely a way of Harvard getting out of a large cash settlement of more than 500 Million Dollars, a number that should be much higher for the serious and heinous illegalities that they have committed.”

Trump also accused Harvard of “feeding a lot of ‘nonsense’” to The New York Times, but did not provide further details.

The Epoch Times has reached out to Harvard for comment, but did not receive a response by publication time.

Jewish students at Harvard reported incidents of harassment following the Oct. 7, 2023, attacks against Israel by Hamas-led terrorists and the subsequent Israeli military offensive in Gaza. Students sued the school, and its former president, Claudine Gay, resigned after congressional hearings on campus anti-Semitism.

Harvard President Alan Garber arrives to speak at the 374th Harvard Commencement in Cambridge, Mass., on May 29, 2025. Rick Friedman/AFP via Getty Images

Harvard President Alan Garber, who succeeded Gay, rejected a list of conditions outlined by a federal anti-Semitism task force and filed a lawsuit against the administration in April 2025, seeking to restore $2.2 billion in grants and contracts withheld by the government.

A federal judge later reversed the funding freeze, ruling that the government violated the First Amendment through its efforts to combat anti-Semitism. The Justice Department appealed the decision in December 2025.

Trump also issued a proclamation on June 4, 2025, seeking to end Harvard’s visa program for international students, prompting the university to file another legal challenge.

Several other Ivy League schools, including Columbia University and Brown University, have reached agreements with the administration and accepted certain government demands. Columbia agreed to pay more than $220 million to the government, and Brown said it will pay $50 million to support local workforce development.

Reuters, Aaron Gifford, and Travis Gillmore contributed to this report.

Tyler Durden Tue, 02/03/2026 - 17:00

Third Georgia Democrat Lawmaker Accused Of Pandemic Fraud

A Democrat member of the Georgia House of Representatives was charged Friday with lying to obtain thousands of dollars in emergency pandemic unemployment assistance, according to federal prosecutors - the third Democrat in the Georgia House to be accused of doing so. 

Rep. Dexter Sharper, 54

Dexter Sharper, 54, of Valdosta, is accused of falsely claiming he was unemployed while collecting benefits intended to those who had lost their jobs during the COVID-19 pandemic. Sharper allegedly received $13,825 in unemployment assistance between April 2020 and May 2021, while continuing to earn income from various sources. 

"While many of his constituents and fellow citizens were losing jobs and desperately needed unemployment assistance during the pandemic, Representative Sharper allegedly pretended to be out of work to collect a share of unemployment benefits for himself," said US Attorney Theodore S. Hertzberg. 

Court records reveal that Sharper certified in 38 weekly filings that he was unemployed and was actively seeking employment. Investigators say he was lying and continued to receive weekly pay from the Georgia General Assembly, as well as from his party rental business - with additional income as a musician. 

“These charges point to some disgraceful conduct at the highest level, which should shock and repulse every citizen”, said Georgia State Inspector General Nigel Lange. “The alleged activities describe a disgusting abuse by an elected official who appeared to trade his integrity for money destined for those in need. Shameful.” 

Two other Democratic state reps have been indicted on similar charges related to pandemic unemployment fraud;

In December, Rep. Sharon Henderson was charged with two counts of theft of government funds and 10 counts of making false statements, resulting in her suspension last week by Gov. Brian Kemp. 

Rep. Sharon Henderson (D)

Meanwhile, Rep. Karen Bennett resigned from office two days before she was charged and pleaded guilty to making false statements earlier in January. 

Rep. Karen Bennett (D)

Birds of a feather, eh? 

Tyler Durden Tue, 02/03/2026 - 16:40

Mamdani NYC Housing Plan Has Insiders Curious, Skeptical

Authored by Petr Svab via The Epoch Times,

The new mayor of New York City, Zohran Mamdani, has put forward a plan to make housing more affordable, including the government building more housing, freezing rents, and potentially taking over properties from landlords who fail to fix them up.

Affordability is indeed an issue worth addressing, several industry insiders told The Epoch Times. But they weren’t sure how Mamdani could succeed where previous administrations largely hadn’t.

“He’s proven to be really skilled at walking a fine line between opposing parties with different priorities and making each party feel like they’re being catered to,” said Devin Lynch, sales manager at Howard Hanna NYC, a real estate brokerage.

Lynch pointed to the housing ballot proposals that gave the mayor more power over approving housing projects. Many Mamdani voters opposed the measures, worrying they would strip local communities of a voice in the approval process, Lynch said.

“He couldn’t do that because he also courted the union vote, and they all needed the construction and the ‘Yes’ on those ballot proposals for their members. So he’s really threading the needle between these two different opposing goals in his constituency.”

There’s also much uncertainty about the specifics of Mamdani’s plan, given that he has just assumed office, said Michelle Griffith, a real estate agent at the New York City-based Douglas Elliman brokerage.

“We’re all trying to be as optimistic as possible. But the truth is, he’s been mayor for not even four weeks. So we still don’t know what is going to happen,” she said.

“Short term, there’s going to be a rent freeze, so that’s how he’s going to try to soften it for people immediately. And then long term, it’s building more affordable housing.”

Rent Freeze

There are significant caveats to Mamdani’s proposed rent freeze, according to Lynch.

The mayor doesn’t have direct authority to freeze rents city-wide. What he could do is to appoint members to the Rent Guidelines Board, which could freeze rents across rent-stabilized housing units. More than 40 percent of all rental units in the city, almost one million, are rent-stabilized. Their tenants pay rent that is on average about 25 percent below market.

Mamdani can appoint five members of the nine-member board this year, giving him a majority. Whatever decision the board makes would come into effect on Oct. 1 and only for leases that start on that date or later.

However, it’s not just tenants who are struggling with affordability. Costs for landlords have increased, too.

“You already have a lot of landlords that are really struggling to operate in the black,” said Seamus Nally, the chief executive at TurboTenant, a property management platform that caters to smaller-scale landlords.

Maintenance costs have increased by some 40 percent since 2019 and insurance costs skyrocketed by 150 percent, according to a report by the Furman Center, New York University’s housing think-tank.

Meanwhile, New York’s 2019 Housing Stability and Tenant Protection Act not only made it nearly impossible to release rental units from rent-stabilization, but also capped how much landlords can hike rents, regardless of how much they need to invest in renovations.

Since then, net income from rent-stabilized units has dropped by some 12 percent, according to the Furman Center.

Mamdani’s rent freeze would add yet another squeeze.

“The landlords we’ve got an opportunity to talk to in the area, they’re very concerned,” Nally said.

There also appears to be a growing phenomenon in the city, where landlords leave vacated rent-stabilized apartments empty.

There are now estimated 50,000 to 100,000 such empty units in the city now, Lynch said.

Landlords used to be able to release such homes from rent-stabilization and thus have a prospect to recoup the substantial capital investment many require. In some cases, however, that led to abuse where landlords harassed tenants into leaving so they could hike rents. The 2019 law put a stop to that.

However, it now appears that some landlords are stuck with dilapidated apartments that are not worth fixing.

“You’re looking at non-compliant electric, non-compliant plumbing, potentially structural issues that need to be addressed. And that’s in addition to the standard stuff, like replacing floors, replacing appliances,” Lynch said.

Rather than sinking capital in such projects, some landlords bank on the building going up in price over time or that the law will eventually change, he said.

Government Intervention

Mamdani tapped Cea Weaver, a tenant activist, to head his Office to Protect Tenants. Weaver lobbied for the 2019 state law and has proposed that the city buy “buildings where the landlord is no longer interested in ownership.”

In January, Mamdani tried to delay the sale of one such distressed landlord, Pinnacle Group, which went bankrupt after its business model of hiking rents on rent-stabilized units unraveled. However, the sale went through, and Summit Properties USA obtained over 5,000 mostly rent-stabilized housing units for less than $90,000 per unit.

Lynch doubted whether Mamdani would actually pursue the course outlined by Weaver, as it would come with political responsibility for extensive tenant complaints.

It’s easy to be the “knight in shining armor” speaking on behalf of dissatisfied tenants, but “once you directly assume those problems and the realities of addressing the problems, you learn it’s much harder,” he said.

Public Construction

Another aspect of Mamdani’s plan involves substantially increasing the quantity of affordable housing paid for with public funds. He has promised 200,000 housing units in 10 years at the cost of $100 billion.

He proposed financing this by drawing on municipal bonds and hiking taxes on richer city dwellers. Both of those proposals, however, would require state approval.

Mamdani may get some support from Gov. Kathy Hochul, who may be eager to court his voters, Lynch said.

“That will be a big part of her voting base if she runs for reelection” later this year, he said.

Still, the city already carries a substantial debt burden with its interest expenses having risen by more than 20 percent since 2023.

Mamdani promised to expedite approvals of affordable housing projects, while at the same time promising to use all union labor, which would significantly limit capacity.

There’s still much uncertainty about how the plan will look and what aspects of it will materialize, Griffith said.

Mamdani promises that the public will pay, while the previous mayor, Eric Adams, promised the private sector would pay. And before that, Mayor Bill DeBlasio was “somewhat in the middle of those two,” she said.

“And where are we at now? We still have an affordability crisis,” Griffith said.

The next big question is what will happen with whatever housing Mamdani manages to build. The city’s public housing projects have been notorious for slow and inadequate maintenance, even as the city’s housing expenses nearly doubled since 2022.

Nally argued it may be more effective to make it easier for the residents, rather than the government, to build housing. He gave the example of Austin, Texas, where easing regulations helped to spur a housing construction boom.

“I’m skeptical that what will work is more government involvement when some of the petri dishes that we’ve seen work across the United States have actually used less government involvement,” he said.

Tyler Durden Tue, 02/03/2026 - 15:20

Gabbard Defends Presence At Fulton County Election Warrant Execution

Authored by Zachary Stieber via The Epoch Times,

National Intelligence Director Tulsi Gabbard on Feb. 2 defended her presence at a Fulton County elections office while FBI agents executed a search warrant there, saying President Donald Trump had requested that she go to the Georgia office and that she has the authority to take action related to election integrity and security.

“Interference in U.S. elections is a threat to our republic and a national security threat,” Gabbard said in a letter to members of Congress.

“The president and his administration are committed to safeguarding the integrity of U.S. elections to ensure that neither foreign nor domestic powers undermine the American people’s right to determine who our elected leaders are.”

She said that Trump tasked her office with taking appropriate action under the authority granted by Congress toward ensuring the integrity of elections, and specifically directed her to observe the execution of the warrant in Fulton County near Atlanta on Jan. 28.

She also said she facilitated a call in which Trump briefly thanked the agents for their work. Trump did not ask any questions during the call, and neither the president nor Gabbard issued directives, she said.

FBI officials previously described agents as executing a court-authorized warrant about a month after the Trump administration filed a lawsuit against the county seeking voting records from the 2020 presidential election. County officials have said the records were under seal and could not be produced absent a court order.

Trump has alleged that he lost in Georgia in 2020 because of election fraud.

Sen. Mark Warner (D-Va.) and Rep. Jim Himes (D-Conn.), top Democrats on congressional intelligence committees, in a Jan. 29 letter said Gabbard’s presence was “deeply concerning.”

“The intelligence community should be focused on foreign threats and, as you yourself have testified, when those intelligence authorities are turned inwards the results can be devastating for Americans privacy and civil liberties,” they wrote.

The lawmakers asked for Gabbard’s reasoning for attending the FBI operation and legal authorities for her involvement and that of other intelligence officials.

Rep. Raja Krishnamoorthi (D-Ill.) was among other critics of Gabbard’s actions.

“The seizure of ballots in Fulton County may trace back to Trump’s refusal to accept his 2020 loss, but the danger is forward-looking. Tulsi Gabbard has no legal role in domestic law enforcement, and the FBI should not be seizing ballots,” he said on social media on Feb. 1.

Gabbard said in response that personnel from the National Counterintelligence and Security Center traveled with her to Fulton County but were not present during the execution of the warrant. She said that she has not seen the warrant, which is under seal, or evidence submitted to the court by the Department of Justice.

She also said that to preserve the integrity of American elections, officials must determine whether there has been malign interference and whether election systems are vulnerable to future exploitation.

“Election security is a national security issue,” Gabbard wrote.

The National Security Act gives the Office of the Director of National Intelligence the authority to coordinate and integrate national intelligence, including intelligence related to elections, Gabbard said.

She promised that the office would not “irresponsibly share incomplete intelligence assessments” concerning election interference.

Joe Kent, director of the National Counterterrorism Center, said on X this week that Gabbard had found 2020 election fraud. Kent, who did not elaborate, later shared Gabbard’s letter to Warner and Himes.

Tyler Durden Tue, 02/03/2026 - 14:00

Kremlin Says India Hasn't Confirmed Oil Cutoff As Modi Govt Mute, Hasn't Ratified

The Kremlin on Tuesday pushed back on Trump's claims that India is preparing to cut off Russian oil purchases following his major Truth Social announcement of a new US-India trade deal that sharply reduces tariffs on Indian exports.

"So far, we haven't heard any statements from New Delhi on this matter," Kremlin spokesman Dmitry Peskov told reporters, signaling that Moscow has received no official confirmation from India in light of Trump's assertions.

via Reuters

Peskov said Moscow is still "carefully monitoring the news" around Trump's claims, on the heels of his "wonderful" phone call with India's Modi and the tariff relief.

Trump had announced the US will trim its punitive tariff on Indian imports to 18% after striking what he hailed as a new "trade deal” with Prime Minister Narendra Modi. Crucially it hinges on New Delhi having reportedly ended its purchases of Russian crude and swapping them for massive US energy and goods buys.

"Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%," Trump posted. "Our amazing relationship with India will be even stronger going forward."

And yet, 24 hours later and India's Foreign Ministry has also remained silent on the question of abandoning Russian oil.

Given all of this, and that the potential remains that Trump's statements were too out front and presumptuous in terms of anything India may have actually agreed to in a finalized way, Peskov additionally said that while Russia "respects" US-Indian relations, Moscow's priority remains its own "strategic partnership" with New Delhi.

"And we intend to continue to comprehensively develop our bilateral relations with New Delhi, which is exactly what we’re doing," he emphasized.

As recently as December, President Vladimir Putin said Russia was prepared to continue “uninterrupted shipments” of oil to India despite pressure from Washington.

Modi's learning from Trump's social media about how India will not buy Russian oil & details of US India trade deal (before any Indian announcement) is certainly a first...

Modiji has undoubtedly given many firsts to India. Learning from Trump’s X account about how India will not buy Russian oil & details of US India trade deal (before any Indian announcement) is certainly a first. Jai Modiji pic.twitter.com/Yt44xgcVeA

— Mahua Moitra (@MahuaMoitra) February 2, 2026

Perhaps Trump's statement was intentionally premature in order to build more leverage and pile the pressure on Modi? The 'devil is in the details' in terms of what was actually agreed to in the phone call. The coming days will likely tell.

* * *

Below is more commentary via Rabobank...

Trump also struck a trade deal with India, reducing reciprocal tariffs to 18% and dropping the additional 25% after claiming India would stop buying Russian oil in favor of Venezuelan, showing how geopolitics links up. This isn’t the FTA the EU just signed, but let’s see which proves more important over time: as a well-placed Indian source noted to me, there‘s no growth in Europe vs. the US.

The fact the US will insist on the same no-transshipment rules for Chinese goods that it has with other trade partners is a blow to Beijing; equally, it blows up European hopes of building a trade coalition without the US (and in India frictions will continue, i.e., the EU agreed on green tech collaboration with Delhi, but the US said it is going to sell it more coal). The defense component will also be key. Europe now has a strategic partnership with India in that regard, but national governments hold sway there: will they want to see their defense industries moved to South Asia(?) By contrast, the US is able to move faster, though we shall see what they are prepared to share with India. Delhi at least gets to play both sides off against the other.

Tyler Durden Tue, 02/03/2026 - 13:40

EU Pushes Rare Earth Mineral Partnership With US To Cut China Reliance

The European Union plans to propose a new critical-minerals partnership with the United States, aimed at limiting China’s influence and strengthening shared supply chains, according to Bloomberg.

According to people familiar with the talks, the EU is ready to sign a memorandum of understanding that would create a “Strategic Partnership Roadmap” within three months. The goal is to coordinate efforts to secure key minerals needed for modern technologies and reduce reliance on China’s low-cost supplies, which currently give Beijing significant leverage.

Under the proposal, the EU and US would explore joint mining and processing projects, consider price-support systems, and develop safeguards against market manipulation and oversupply. The plan also calls for building more resilient supply networks between both sides.

Bloomberg reports that the draft agreement stresses respect for territorial integrity, an issue that gained importance after recent tensions linked to President Donald Trump’s comments about Greenland. The proposal arrives as Washington prepares to meet with allied countries to advance agreements that cut dependence on Chinese minerals.

While similar efforts by previous US administrations have had limited results, officials say this push reflects growing urgency after China imposed export controls on rare earths last year. Although some restrictions were eased following talks between Trump and Xi Jinping, US officials are now seeking faster progress.

Washington is also urging partners to adopt pricing mechanisms to protect Western producers from cheaper Chinese exports. When the US encouraged individual EU countries to sign bilateral deals, the European Commission pushed for a unified approach, receiving backing from member states to negotiate on their behalf.

Despite doubts about whether a comprehensive agreement can be reached quickly, the EU’s offer suggests negotiations are moving forward. The proposal aligns with US interest in stockpiling minerals, following Trump’s recent $12 billion stockpile initiative.

According to sources, the new draft centers on closer cooperation to strengthen supply chains, cut strategic dependencies, and improve resilience to disruptions, while also deepening industrial and economic ties through joint projects. It proposes mutual exemptions from certain export controls on critical raw materials and calls for expanded collaboration on research and innovation across the full supply chain. The plan also emphasizes sharing information on risks and market conditions, boosting transparency, and considering measures such as joint stockpiles or a coordinated response group. In addition, it outlines closer alignment on how both sides handle export restrictions involving third countries.

Recall, the Trump administration is preparing to launch a major initiative aimed at protecting US manufacturers from disruptions in the supply of critical minerals, committing about $12 billion in initial funding to build a strategic stockpile of essential materials. The project, known as Project Vault, is designed to reduce America’s dependence on China for rare earths and other strategically important metals. By creating a centralized reserve for civilian industries, officials hope to cushion companies against sudden shortages and sharp price swings that can disrupt production and strain finances.

More than a dozen major companies have joined Project Vault, including General Motors, Stellantis, Boeing, Corning, GE Vernova, and Google. Three large trading firms - Hartree Partners, Traxys North America, and Mercuria Energy - will handle sourcing and purchasing materials for the stockpile.

Tyler Durden Tue, 02/03/2026 - 13:00

Novo Nordisk Shares Sink After Sales Outlook Misses As US GLP-1 Competition Intensifies

Novo Nordisk ADRs were clubbed like a baby seal around midday after the Danish drugmaker said in an early full-year outlook release that it expects sales to shrink 5% to 13% at constant exchange rates, far worse than the expected 1.3% decline Wall Street analysts had been expecting, according to Bloomberg consensus.

Here's a snapshot of the full year forecast (courtesy of Bloomberg):

• Sees sales at constant exchange rates -5% to -13%, estimate -1.39% (Bloomberg Consensus)

• Sees operating profit at constant FX -5% to -13%, estimate -3.12%

Novo's annual sales last declined in 2017 during an insulin price war in the US market. The Danish drugmaker faces a multi-front battle, with Eli Lilly's Zepbound gaining ever-larger market share in the US and continued pressure from copycat versions of Ozempic.

Trading was halted ahead of the report. When trading resumed, Novo's U.S.-listed shares plunged 13%, the largest intra-day decline since -21% on July 29, 2025.

Since Novo ADRs peaked around $145 in mid-2024, shares have been locked in a vicious bear market, down about 64% from the highs.

Hopes for a turnaround emerged late last year (read here), but those expectations have since been erased after today's dismal outlook.

Last week, Goldman analyst Faris Mourad told clients that "obesity drugs narrative sentiment is on the rise" and "it's an opportunity to buy the dip."

More here on Mourad's call urging clients to buy into beaten-down obesity drug stocks.

And Goldman's long-time Novo bull, analyst James Quigley, is out with his first take on earnings, writing:

"At the time of writing, the Novo ADR was -14.5%, tomorrow morning we would expect the Novo shares to react broadly in line with the implied FY26 operating cuts of c.9%, as FY26 is a re-set year with respect to the pricing aspect of the GLP-1 market." 

Perhaps it's time for Quigley to just give up on Novo... 

Tyler Durden Tue, 02/03/2026 - 12:45

US Shoots Down Iranian Drone In 'Self-Defense' In Gulf Waters

Update (1243ET): 

A highly dangerous direct first encounter between Iranian and US forces operating in close proximity in the Persian Gulf region, as an Iranian drone has been downed:

• US F-35 WARPLANE SHOT DOWN DRONE IN SELF-DEFENSE: CENTCOM

"USS Abraham Lincoln (CVN 72) was transiting the Arabian Sea approximately 500 miles from Iran's southern coast when an Iranian Shahed-139 drone unnecessarily maneuvered toward the ship. The Iranian drone continued to fly toward the ship despite de-escalatory measures taken by US forces operating in international waters," US Central Command (CENTCOM) Spokesman Capt. Tim Hawkins said.

An F-35C fighter jet launched from the carrier shot down the drone in self-defense to protect the vessel and its crew, Hawkins claimed in the official explanation. There were no reports of injuries.

There's as yet no account of the incident from the Iranian side, at a moment the Islamic Republic has said its "finger is on the trigger" while awaiting a potential Trump decision for military action. This event alone could derail the expected Friday nuclear talks hosted by Turkey.

In energy markets, WTI futures briefly spiked into $63/bbl handle and have since retreated to $62/bbl. 

Headlines from White House press secretary Karoline Leavitt:

• CENTCOM ACTED APPROPRIATELY TO SHOOT DOWN IRAN DRONE

• IRANIAN DRONE WAS UNMANNED

The comment above was enough to hit oil after the spike... 

Here is what one X slueth is saying (read thread). 

*  *  *

UK Maritime Trade Operations warned of a "suspicious activity" on Tuesday morning at the Strait of Hormuz, the world's most critical energy chokepoint, after numerous small armed boats attempted to stop a U.S. oil tanker.

This is what UKMTO has reported so far:

• Location: about 16 nautical miles north of Oman, within the inbound traffic separation scheme

• Incident: a merchant vessel was hailed on VHF by multiple small armed boats

• Response: the vessel ignored requests to stop and continued on its planned route

• Status: authorities are investigating

• Guidance: all vessels are advised to transit with caution and report any suspicious activity to UKMTO

Here's the UKMTO Advisory:

The Wall Street Journal provided more color on the situation, including the U.S. tanker:

Maritime-security firm Vanguard Tech said in a message to clients that six Iranian gunboats armed with 50-caliber guns approached the tanker as it entered the strategic waterway and ordered it to kill the engines and prepare to be boarded. Instead, the vessel sped up and was later escorted by a U.S. warship.

U.S. officials confirmed armed Iranian boats tried to stop a U.S.-flagged ship and that it was escorted to safety.

The incident occurred at the critical maritime chokepoint where 20% of oil trade and a large share of LNG flows pass daily.  

At its narrowest, shipping lanes are only about 2 miles wide in each direction...

Brent crude prices are marginally higher on the session, trading around $66/bbl handle.

UBS analyst Dominic Ellis provided clients with his assessment of the crude oil market early Tuesday: "The Lowdown: Oil At Risk Of Near-Term Pullback But Risks Remain."

Ellis continued:

In the near term, UBS strategists are expecting a pullback in oil, which is running ahead of their assumptions for the quarter and the year. They see the market as oversupplied this quarter and in the full year, which should pull Brent back down into the low $60s. It is now in the mid $60s having touched low $70s very recently.

What is challenging their view is that the U.S. is building up a presence in the Middle East, and there is a perceived risk of direct intervention in Iran, which could impact Iranian supply and potentially if things spill over into the wider region, affect the 20% of global crude flows that pass through the Strait of Hormuz.

Brent crude prices...

US-Iran tensions appear to be simmering down:

• Oil Prices Tumble 5% Amid Signs Of US-Iran De-escalation

This comes as the U.S. has been building up naval forces in the region for a possible strike on Iran.

Tyler Durden Tue, 02/03/2026 - 12:43

Watch: Viral Video Exposes Democrats' Staggering Hypocrisy On Immigration Enforcement

Authored by Steve Watson via Modernity.news,

A viral video compilation circulating on X has laid bare the dramatic reversal in Democratic positions on immigration, showcasing top party figures advocating for robust border security measures that they now vehemently oppose.

This shift comes amid growing public demand for deportations, exposing a calculated pivot away from policies that once aligned with American interests.

The video, posted by @WesternLensman on X, features archived clips of prominent Democrats articulating views on immigration that echo today’s America First agenda. It underscores how border security was once a bipartisan consensus before the party’s radical elements took over.

NEW VIDEO: For decades, border security and immigration enforcement weren’t controversial or radical ideas.

The only thing that changed?

Democrats. pic.twitter.com/h1MHLdRIn3

— Western Lensman (@WesternLensman) February 2, 2026

In one clip, former President Barack Obama states, “Americans are right to demand better border security and better enforcement of the immigration laws.”

Obama continues in another segment: “We simply cannot allow people to pour into the United States undetected, undocumented, unchecked.”

He adds, “We’ve had five million undocumented workers come over the borders. It has become an extraordinary problem.”

Former President Bill Clinton echoes this sentiment: “All Americans not only in the states most heavily affected but in every place in this country are rightly disturbed by the large numbers of illegal aliens entering our country.”

Clinton asserts, “And we must do more to stop it.”

Joe Biden, in an older clip, is asked, “Yes or no, would you allow sanctuary cities to ignore the federal law?”

He responds, “No. Any city should listen to the Department of Homeland Security.”

Hillary Clinton criticizes sanctuary policies: “The city made a mistake not to deport someone that the federal government strongly felt should be deported.”

Clinton also says, “Just because your child gets across the border, that doesn’t mean the child gets to stay.”

She further declares, “We do not think the comprehensive health care benefits should be extended to those who are undocumented workers and illegal aliens.”

Clinton emphasizes, “We do not want to do anything to encourage more illegal immigration.”

Senate Majority Leader Chuck Schumer explains, “People say, well why can’t you stop illegal immigrants from coming here? And the number one answer we give is when they come here they can get jobs, get benefits against the law because of fraud.”

Schumer states plainly, “Illegal immigration is wrong, plain and simple,” further warning “Open borders, you’re doing away with a concept of nation state.”

Senator Bernie Sanders affirms, “Our nation like all nations has the right and obligation to control its borders.”

Finally, Obama reinforces accountability: “No matter how decent they are, no matter their reasons, 11 million who broke these laws should be held accountable.”

This compilation arrives as Democrats ramp up efforts to undermine ICE and DHS operations. Recent reports highlight Senate Democrats threatening to block government funding over demands for reforms to immigration enforcement following incidents in Minneapolis, including fatal shootings by federal agents. They seek measures like requiring warrants for arrests and ending roving patrols, moves that would hamstring border security.

Such positions mark a stark departure from their earlier stances, prioritizing open borders and globalist priorities over national sovereignty.

This hypocrisy is all the more glaring given the overwhelming public support for mass deportations. As we previously reported, multiple polls confirm that 55% to 64% of Americans favor deporting all illegal immigrants, with sentiments hardening against unchecked influxes.

The video serves as a potent reminder that secure borders were once uncontroversial—until Democrats decided otherwise to chase votes and advance agendas that erode American communities.

With President Trump poised to ramp up enforcement, these past admissions from Democratic leaders only strengthen the case for restoring law and order at the border, putting America first once more.

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

Tyler Durden Tue, 02/03/2026 - 12:25

'SaaSpocalypse' Strikes As Private Credit-Software Stock Vicious Cycle Accelerates

Yesterday, in a must read report for everyone, we highlighted the shocking reality of the circular firing squad evolving between private credit providers (BDCs) and software companies as the latter suffers from artificial intelligence's domination and the former's pain grows from the massive exposure it faces to those very same software entities.

“Software is the largest sector exposure for BDCs, at around 20% of portfolios, making the industry particularly sensitive to the recent decline in software equity and credit valuations,” Barclays analysts including Peter Troisi wrote in a note available to pro subs.

The total exposure was about $100 billion in the third quarter of last year, the analysts said, citing PitchBook data.

Read the full report here...

Today the vicious cycle is accelerating as the details of the report hit the mainstream with Bloomberg reporting that sentiment has gone from bearish to doomsday lately with traders dumping shares of companies across the industry as fears about the destruction to be wrought by artificial intelligence pile up.

“We call it the ‘SaaSpocalypse,’ an apocalypse for software-as-a-service stocks,” said Jeffrey Favuzza, who works on the equity trading desk at Jefferies.

“Trading is very much ‘get me out’ style selling.”

The anxiety was underscored Tuesday after AI startup Anthropic released a productivity tool for in-house lawyers, sending shares of legal software and publishing firms tumbling.

Hedge funds have already been exiting the 'software' building en masse, as noted over the weekend, Goldman's Prime Brokerage showed a stunning chart: the divergence between hedge fund exposure in semiconductor companies (broadly seen as beneficiaries of the AI supercycle) and software companies (increasingly seen as the biggest losers of AI), has never been greater.

It appears that the rest of the market is now waking up to that pain trade.

Goldman Sachs Software stock basket is collapsing, now back near Liberation Day lows from last year...

Perceived risks to the software industry have been simmering for months, with the January release of the Claude Cowork tool from Anthropic supercharging disruption fears.

“I ask clients, ‘what’s your hold-your-nose level?’ and even with all the capitulation, I haven’t heard any conviction on where that is,” Favuzza said.

“People are just selling everything and don’t care about the price.”

All told, the S&P North American software index is on a three-week losing streak that pushed it to a 15% drop in January, its biggest monthly decline since October 2008.

Simply put, fears of an AI-induced wave of obsolescence have left investors wondering which industries will be left behind.

“The draconian view is that software will be the next print media or department stores, in terms of their prospects,” said Favuzza at Jefferies.

“That the pendulum has swung so far to the sell-everything side suggests there will be super-attractive opportunities that come out of this. However, we’re all waiting for an acceleration, and when I look out to 2026 or 2027 numbers, it is hard to see the upside. If Microsoft is struggling, imagine how bad it could be for companies more in the path of disruption, or without its dominant position.”

FactSet notes that 75% of companies have beat on EPS and 65% beat on revenue. That’s not great by hit-rate standards.

Instead, as Bloomberg reports, the lift is coming from magnitude - fewer companies are clearing the bar, but the ones that do are clearing it by enough to keep the aggregate results looking healthy.

But, as we noted in detail previously, and briefly at the start of this note, the pain in software is not staying there as BDCs are suffering significantly.

Private credit could see default rates surge to as high as 13% in the US if artificial intelligence triggers an “aggressive” disruption among corporate borrowers, UBS Group AG strategists wrote in a separate note on Monday.

And today we see that fear contagiously accelerate in the BDCs, including Blue Owl, Blackstone, and Ares...

The central issue facing investors who want to buy software stocks is separating the AI winners from the losers. Clearly, some of these companies are going to thrive, meaning their stocks are effectively on sale after the recent rout. But it may be too early to determine who they are.

“The fear with AI is that there’s more competition, more pricing pressure, and that their competitive moats have gotten shallower, meaning they could be easier to replace with AI,” said Thomas Shipp, head of equity research at LPL Financial, which has $2.4 trillion in brokerage and advisory assets.

“The range of outcomes for their growth has gotten wider, which means it’s harder to assign fair valuations or see what looks cheap.”

For now, traders are selling first as the threat of falling software equity prices prompts painful balance sheet reflection at private credit shops (which don't report until late Fed/early March), triggering less availability of credit (or pulling existing lines), feeding back into lower growth potential for software companies (which already face existential threats from AI).

Much more on this whole fiasco in the full Barclays note available to pro subs.

Tyler Durden Tue, 02/03/2026 - 12:10