Credit - A Little Bit Louder Now

Submitted by Peter Tchir of Academy Securities

Credit

'Hey, hey, A, yeah, yahhh... you make me wanna shout!!'

After a tumultuous week, if there was one thing we could do for you, it is put a song in your head that hopefully makes you smile. Seriously, a song featured in Animal House and Wedding Crashers should make you smile, at least for a moment.

This week’s T-Report follows up last weekend’s Is Credit Whispering? Or Shouting?

We examined the risks to credit markets, from several angles, and explored potential vulnerabilities. The main focus was on the risk of potential “contagion” (though we didn’t use the word) of “selling what you can” instead of what you might want to.

On a “housekeeping” note, we often use ETFs in T-Reports. Whether we are just pointing something out, or taking a view, one way or another, it is meant to be a “badge of honor” to the ETFs selected (except single stock leveraged ETFs, but that is another story). We use ETFs when we feel they “represent” a market or a sector well. Especially when there is no “index” that people follow that tracks that sector. ETFs have multiple advantages over obscure indices. Everyone can see them trade in real-time during market hours. You can see their holdings, their volume, their NAV, etc. You can even trade them. Like any other stock, “price charts” don’t do a good job with dividends/total return, but we try to highlight that, when total return is the focus.

Iran

We will continue to keep you as informed as possible of our views on the conflict in the Middle East and the market ramifications.

• Webinar from last Sunday night.

• Three Themes Driving Markets from Tuesday.

• Tuesday’s Iran War Update SITREP.

• The Spider Web podcast from Thursday. We don’t actually call it that, but I think it is “catchy.”

• Finally, with reference to Mrs. Robinson, we published NFP and Plastics on Friday. Jet fuel was also featured.

• I had the pleasure of going on Bloomberg TV on Monday morning (the 52:25 mark). Why Markets Will Move Past Iran, on the Schwab Network, from the NYSE, also on Monday. Finally, on CNBC, Attacks on LNG Facilities Worry Me, from Thursday, via laptop from a weirdly set up hotel room in D.C.

• Our Academy in the News webpage has links to General Deptula on CNN, General Spider Marks on CNN (multiple times), General Robeson on Bloomberg TV, and Joe Zacks (former CIA Deputy Assistant Director) on CBS Face The Nation.

As of Sunday morning, with an immense amount of input from the Geopolitical Intelligence Group, we are still looking for the parties to find some sort of “off-ramp” soon. Soon being measured in days, and maybe weeks, but definitely not months. We could be wrong, and will know more by Monday morning and will update you if our timing or view changes.

We seem to be at the lower-end of the “fear spectrum” on this issue. Worried, concerned, and cannot rule out a lot more pressure on markets and the global economy, but that is not our base case.

A Little Bit Quieter Now

Yes, the song says “softer” but that could be interpreted as negative, and there were some positive developments this week, at least with respect to my concerns.

The software sector, as represented by this ETF, reclaimed levels above its post-Liberation Day lows. It was up every day this week, including Friday. A technical bounce, or re-thinking the software is “doomed” narrative? A bit of both?

Given the relative importance of the software sector in private credit, this could provide welcome relief!

We saw BDCs bounce this week as well. I track BIZD, a $1.5 billion ETF, as a proxy for this market. While higher on the week, it closed below Monday’s close and is well off the week’s highs that occurred on Monday.

Unfortunately, several of the stocks that are categorized as “private credit” related companies finished the week poorly, in some cases at 52-week lows.

Everybody Shout Now

If it weren’t for you meddling headlines. 

There is always the risk that headlines massively overstate the problem(s). Headlines and titles are designed to do that. You can’t create “click bait” without some aggressive headlines.

So, part of me wants to downplay the headlines. But the headlines seemed to write themselves this week.

Limiting redemptions. Limiting withdrawals. Even the dreaded 4-letter word – GATE – crept into conversations and stories.

• These products were not designed to be liquid. Some of the limits were always in place, but they just weren’t a limiting factor until recently. Some still aren’t a limiting factor. So, these headlines versus reality are skewed towards too much fear! But they seemed to cause markets to move, which is not comforting. In a “healthy” market, we’d absorb inflated headline risk, but we are clearly still in the “where there is smoke, there is fire” part of the narrative.

Defaults, fraud, and jump to default. If you didn’t see any headlines around defaults and frauds this week, you did well. I heard more “cockroach” stories this week than I needed to, or wanted to (please don’t bring up cockroaches during dinner – it doesn’t make the meal more enjoyable in any way, shape, or form).

• Jump to default has a “special place” in my heart. Jump to default refers to the potential for a bond (or loan) to go from “money good” or “near-par” or “unstressed” overnight. I’ve been in credit a LONG time, and jump to default takes up more time than has ever really been warranted.

• Was there a day when “jump to default” occurred? Sure. When loans sat on bank balance sheets in accrual accounting books, with no capital relief for treating them as mark-to-market. Extend and Pretend ruled the world. Problems would be put off as long as possible and in some cases the problems fixed themselves over time (markets changed, etc.). With enough “extend and pretend” when the banks could not “extend and pretend” (the recovery values would be low and on the accounting side of things), it looked like a “jump to default.” But it was really more about accounting than anything like “last month this loan looked good, and today it looks bad.”

• With fraud this can happen (and it seems to have happened in a few recent cases).

• Has “jump to default” really existed in the past few decades? A few months ago, I would have argued vehemently that it didn’t. The leveraged loan market has become robust. It trades regularly in the secondary market. There is price discovery. You can see loans trade down and then sometimes back up. The high yield bond market has changed to include big, large, well-known, and often public companies, where there are “lots of eyes” on the bonds and price discovery works. It doesn’t mean you don’t have defaults, it just means that you rarely have “large gaps” and certainly not from 100 to 0 “overnight.” For the life of me, I think there was only one case that I can remember where a bond quite literally went from near-par to bankrupt (and a low price) almost overnight. If my memory is correct, it was a company that had one product (glass for cell phones) and only one customer, and that customer dropped them. So, until recently, I would have fought the concept of “jump to default” kicking and screaming the whole way.

• NCAA bonds are more common. I had no idea what the desk meant when they made fun of a bond that went NCAA. It meant No Coupon At All. In the high yield market, with semi-annual coupons, it meant that from time of issue to the first coupon, in 6 month’s time, the company wasn’t able to pay. I rarely see it, but I’ve seen it happen in the wild.

  • If you include bonds that elect to PIK (Pay In Kind) in that category, it is less rare. Still not common. Also, since the company has the right to PIK, it doesn’t even seem that unnatural to me that some would choose to PIK. Having said that, the usage of the term PIK has “picked” up in recent conversations about the market.

• The loan that went from par to 0 in a few months. That was a headline that hit. Is that the norm? Heck no, if it was, it wouldn’t have generated so much interest. But am I rethinking defending the “impossibility” of jump to default?

  • A little. Just a little. Smaller loans with only a handful of investors who have read the documents, and understand the company, are less likely to face “price discovery” every day. It is price discovery that prevents “jump to default” from happening. Without price discovery, then yes, we can see jump to default (though no recovery seems pretty extreme).

Mark-to-market is always tricky in credit. It can be tricky in every asset class, but I find credit to be susceptible to "liquidity” events, where prices go below “reasonable” levels. The most extreme example (and there was forced selling involved) was the “super senior” tranches of synthetic CDOs. If you look at the 10-year CDX IG tranches, I think it is still accurate to say that NEVER has there been a loss in the mezz tranche (losses start at 3% of portfolio losses and get absorbed until 7% of portfolio losses). That is for well over 20 years now. Yet super senior (call it 15% loss absorption) traded at incredible discounts. This is both meant to be:

• Soothing – prices in credit can be far lower than any economic reality indicates, purely because of the nature of credit market liquidity.

• Scary – prices in credit can be far lower than any economic reality indicates, purely because of the nature of credit market liquidity.

If the credit risk is already mispriced too aggressively, then we have nothing to fear. If we haven’t reached that stage, then we have a lot to fear, which is what my concerns about “Sell what you Can” are rooted in.

A Little Bit Louder Now

The first “true line of defense” in whatever is going on in private credit is likely going to be the leveraged loan market.

While not a “true” proxy for private credit, it is probably the “best proxy” for those looking to shed “similar” risk-reward instruments in their private credit holdings.

BKLN ($6 billion) finished higher on the week, though off its highs. SRLN ($5 billion) finished a touch lower on the week, and off its highs of the week. While I consider HYG and JNK largely interchangeable on the high yield bond side of things, BKLN and SRLN are quite different in terms of portfolio construction.

According to Bloomberg both ETFs were trading about 0.6% below NAV. Is that accurate? I’m not sure. (It is harder to get a good NAV calculation for loans compared to bonds, and in turn, far more difficult to get for bonds than for equity-based ETFs). Keeping a close eye on this as I’m an adherent to the ETF Spiral™ theory, that the “arbitrage” tends to push markets in the direction of the arb (in this case lower) at least during the early stages of a real NAV discount developing (again, I’m not sure we have that here, but want to highlight).

Both leveraged loan ETFs had outflows on the week, though BKLN still has more shares outstanding than in late April (post-Liberation Day) and in early October (presumably peak rate cut fears).

Which brings us to one odd point:

• Is floating rate good or bad?

  • It is good for those who are borrowing the money as they pay less.

  • It is bad for lenders as they receive less.

  • Do the two things just cancel each other out?

    • In theory, somewhat. If people are already looking to sell an asset class because of credit concerns, then 50 bps of rate cuts might cause them to want to sell due to lower returns if the 50 bps of hypothetical cuts isn’t viewed as helping credit quality that much.

    • Investors are likely to reduce exposure ahead of cuts, while the companies don’t benefit until the cuts actually occur.

I am keeping a close eye on this market and it isn’t “shouting” (or screaming) but it is “a little bit louder now.”

Remember When LCDX Traded Worse than HY CDX?

If I lost you with that title, it is completely understandable. LCDX was a leveraged loan CDS index. I think it died a well deserved death a long time ago. HY CDX still exists and is traded to this day.

So, we had an index that was referencing senior secured loans (LCDX).

There were a large number of companies that were in both indices (their unsecured bonds were referenced in HY CDX and their Senior Secured Loans in LCDX). On this overlapping set of names, you would certainly expect the loans to recover more in the event of a Credit Event (default in CDS language).

I guess in theory, the non-overlapping loans in LCDX could have a higher likelihood of default than the non-overlapping bonds in HY CDX (but I don’t remember that being obvious). I guess in theory, despite seniority in the cap structure, the non-overlapping loans that defaulted could have lower recoveries than the non-overlapping bonds (recovery can depend a lot on industry, but I don’t remember that being obvious at the time).

What was obvious (or seemed obvious at the time) was that there was a giant unwind going on.

• Own 2X of LCDX and short 1X of HY CDX (or some leveraged ratio). Makes a lot of sense. It was positive carry and historically, it worked well on the downside too. It was a bit tricky if spreads tightened as LCDX was somewhat capped in price terms as the underlying LCDS could cancel if a loan was refinanced at better terms. If you were bearish, this was a good way to get paid to have some downside risk protection – in theory.

  • But it didn’t work and stories about the size of the unwind looming (or ongoing) pushed levels to what seemed like absurd levels. I remember wanting to load up on LCDX (having done a lot of the credit work, rel val of names, etc., and being a contrarian in general) but not being allowed to, because senior people were “scared” of this unwind.

I only recite this story because it fits my concerns that credit can get oversold, but it still hurts while it is being oversold, and it can be very difficult to get people to stand in the way of a falling knife. I certainly wouldn’t have managed to time the “bottom” of that relationship, but it was close and when it reversed course, it reversed course rapidly, because it was so obviously mispriced.

“Obvious” mispricing (too low) can occur in credit, even if it seems “obvious” at the time, and not just in hindsight. So yes, I remain wary of “selling what you can” becoming a reality with broader ramifications for credit markets.

Bottom Line

On credit, I remain wary of “selling what you can” becoming a reality with broader ramifications for credit markets. Not pounding the table bearish, but very cautious and defensive here. If Academy is correct on reaching a conclusion in the Iran war, credit markets should bounce, which is a large mediating factor in “only” being cautious/defensive. If we are having the same conversations next Friday as we had this past Friday, credit will suffer from the economic damage being done – again, far from being our base case, but a possibility.

On equities, conflict resolution would set up for a nice rally. Will continue to watch IGV closely as a “tell” that the market is done with the “AI is killing software” narrative.

Weirdly, I’m probably less cautious on equities than credit – the relief rally will be bigger, but then the risk that the credit fears persist could return – which would hit credit first, but would also drag equities along for the ride. XLE finished up on the week, but down from Monday’s highs, when we might have seen “the end of short covering.” I still really like the energy sector long term (globally), but heading into this past week we recommended taking profits here. We were clearly early as Monday trading kept pushing things higher, but now it seems to be settling into a pattern that could lead us lower fairly quickly in the event of conflict resolution.

On rates, last weekend we were indifferent at 10s below 4%, but now we’d be buying.

We continue to hope that the events in the Middle East lead to a peaceful resolution, putting the Iranian people on a better path to prosperity and freedom, while minimizing the loss of life for everyone in the region. And our best wishes and support to all those involved in our military and intelligence efforts!

Tyler Durden Sun, 03/08/2026 - 18:35

Xi Hints At More Top Purges, Issues Warning To 'Corrupt Elements' In Chinese Army

One of the big themes to come out of China over the past several months (and even years) has been Chinese President Xi Jinping's (apparently ongoing) sweeping purge of PLA military command ranks on the basis of "corruption" - or rather what is most probably perceived disloyalty.

Already there's been several top dismissals including the firings of multiple members of the Central Military Commission (CMC) and dozens of generals - some even placed under house arrest, as well as a broad purge of the Chinese Communist Party.

Xi this weekend hinted there could be more to come, freshly warning Saturday during a speech to delegates from the People’s Liberation Army (PLA) and the People’s Armed Police that disloyalty to the party - or else selfish dealings and corruption - will not be tolerated.

"There must be no place in the military for those who are disloyal to the party, nor any place for corrupt elements," Xi said.

He then called for strict oversight in "key areas such as fund flows, the exercise of power, and quality control" during the country's next five-year plan which is set to be approved later this month.

Here's more of what he said via Chinese state sources:

It is essential to fully strengthen the Party's leadership and Party building in the military, and make Party organizations at all levels even stronger, Xi said, stressing the need to translate the Party's leadership strength into development momentum.

It is important to consolidate the ideological foundation that ensures officers and soldiers follow the Party and its guidance, and ensure that modern weaponry and equipment are placed in the hands of politically committed personnel, Xi said.

A former CIA analyst who follows Chinese elite politics, Christopher K. Johnson, recently told the NY Times of the ongoing purge trend:

"This move is unprecedented in the history of the Chinese military and represents the total annihilation of the high command."

The PLA has seen significant internal turmoil, especially since the Communist Party’s 20th Congress in late 2022. Several top military figures - including Defense Ministers Li Shangfu and Wei Fenghe, and CMC Political Work Department head Miao Hua - have disappeared or been removed, and many more followed. 

Tyler Durden Sun, 03/08/2026 - 18:00

Deutsche Bank Warns Energy Shock "Existential Threat" To Airlines, May Force Some To Ground Fleets

Flight disruptions tied to Operation Epic Fury in the Middle East exceeded 14,000 by the end of last week. While there were early signs of normalization by mid-week, the global aviation industry remains disrupted, with some of the weakest airlines facing an increased risk that surging energy prices could lead to the idling of commercial jet fleets.

The epicenter of the disruption is Persian Gulf airports and airlines. As of Friday, ten countries had closed their airspace, either partially or completely, since Operation Epic Fury against Iran began one week ago, according to Flightradar24 data.

Despite ongoing IRGC drone and missile attacks across Gulf states - sometimes targeting civilian infrastructure such as airports - some airports began resuming flights by midweek, including Dubai, Abu Dhabi, and King Khalid International near Riyadh, Saudi Arabia. However, there are reports of a direct strike on the airport in Dubai on Saturday.  

It is clear that flight disruptions across the Gulf states will persist as long as Operation Epic Fury continues. With U.S. CENTCOM stating overnight that the operation is only accelerating and only suggests disruptions will extend into next week.

The big risk flagged by Deutsche Bank analysts, led by Michael Linenberg, is that surging jet fuel prices could hit some of the weakest airlines.

With Brent crude futures up roughly 52% year to date and jet fuel up 100% to 125%, Linenberg warned clients in a note on Friday that "financially weakest carriers could halt operations."

"Year-to-date oil prices are up ~50% while jet fuel prices are up 100% - 125%. Absent near-term relief, airlines around the world could be forced to ground 1,000s of aircraft while some of the industry's financially weakest carriers could halt operations," the analyst said.

Linenberg continued:

US jet fuel crack spreads (i.e., the difference between underlying oil prices and jet fuel prices) for Gulf Coast, New York Harbor, and West Coast now range from $85 to $95 per barrel, a level that is at or above the underlying feed stock - WTI oil price currently trading at $86.04 and Brent oil price $88.99 (see Figure 1 below).

The last time we witnessed this phenomenon was in 2005 when crack spreads of as high as $65 per barrel exceeded ~$60 per barrel oil prices in the aftermath of Hurricanes Katrina and Rita. The damage to the airline industry was significant and widespread including major airlines Delta and Northwest filing for Chapter 11 bankruptcy in September 2005.

He warned that surging crack spreads amount to a major headwind of more than $20 billion for the airline industry and identified the carriers he sees as most exposed:

Over the past month, we have seen jet fuel prices climb $2.00 per gallon (e.g., Gulf Coast jet fuel prices last close of $4.30 versus $2.24 on February 5, 2026). Our current industry forecast calls for the US airline industry to consume 20 billion gallons of jet fuel in 2026, which suggests a fuel price headwind in the $10s of billions on an annualized basis. This compares to our 2026 operating income forecast of ~$20 billion. In Figure 2 below, we highlight 2026 EPS sensitivity to fuel price changes on a ceteris paribus basis. In reality, airlines will respond to higher fuel prices.

For example, we estimate a $10 across-the-board fare increase sustained on an annual basis could add $7 - $8 billion to top-line. Other important considerations include the negative impact of higher fuel prices on the US economy, and more specifically on demand for air travel, particularly among the most price sensitive consumers.

Looking at airline stocks, the S&P 500 Passenger Airlines Index fell 12.6% on the week, marking its largest decline since the 18% drop in the first week of April 2025, when Trump and China argued back and forth over trade.

The index hits turbulence as soon as the operation began. 

Also see this:

• These EM Countries Face Greatest Risk If Energy Shock Spreads

This adds to the growing list of secondary effects from Operation Epic Fury: the next wave of flight disruptions may stem not from disrupted Gulf air hubs, but from the energy shock itself, which could force the weakest carriers to idle fleets.

Professional subscribers can read the full note at our new Marketdesk.ai portal.

Tyler Durden Sun, 03/08/2026 - 17:30

Waste Of The Day: DEI Contractors Remain In Military's K-12 Schools

Authored by Jeremy Portnoy via RealClearInvestigations,

Topline: Controversial education firms that helped embed diversity, equity and inclusion principles in K-12 military schools during President Joe Biden’s administration are still working with the Department of Defense Education Activity, or DoDEA, and received a total of $171,175 in 2025.

Key facts: Thomas M. Brady, the director of DoDEA from 2014 to 2024, announced in 2020 that DEI “must be a foundational premise in every aspect of our organization.” Changes to that affect were quickly made to the curriculum of DoDEA, which runs 161 schools for the children of servicemembers living on military bases around the world.

Two teachers gave a presentation about how “elementary school is the perfect time” to “show students the diversity of gender expression and gender activity.” Educators were encouraged to hold “critical conversations” about “the relationships between identity and power” and “privilege,” which were meant to result in “crying” and “explicit confrontations.”

Many DEI consultants were removed after President Donald Trump took office in 2025 and ordered a ban on federal funds being used to teach or implement DEI principles, but some of the companies hired under Biden remain. 

DoDEA paid $30,175 last year to continue gym teachers’ membership in the professional society, SHAPE America, which instills its National Health Education Standards in gym classes. Board member Cara Grant said of the health standards, “We recognize that systemic disparities exist within our educational systems, disproportionately affecting marginalized communities. Our approach is not simply to level the playing field but to dismantle the structures that perpetuate inequality.” 

During a DoDEA presentation on the SHAPE standards in 2021, one teacher instructed her colleagues that “talking about heterosexuality as the norm” can “inherently cause conflict.”

DoDEA also paid $141,000 last year to the curriculum development company thinkLaw.

ThinkLaw CEO Colin Seale recently wrote a blog post calling on schools to hide DEI within their curriculums through “defiance disguised as compliance,” oddly linking it to a Lil Wayne song in which the rapper declares that “real Gs move in silence like lasagna.”

In one example, Seale tells teachers to discretely teach children that there are more than two genders without “openly” defying Trump’s executive orders to the contrary.

Summary: Parents should not face any secrecy about what their children are being taught in school, especially when those schools are funded by federal taxpayers.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

Tyler Durden Sun, 03/08/2026 - 17:30

Wisconsin Man Who Killed Parents To Fund 'Satanic' Trump Assassination Attempt Sentenced

A Wisconsin teenager who murdered his parents and stole their money to fund his plan to kill President Trump with a bomb was sentenced to life in prison on Thursday.

Nikita Casap, 18, pleaded guilty in January to two counts of first-degree intentional homicide in the shooting deaths of his mother, Tatiana Casap, and his stepfather, Donald Mayer, last year. As part of a plea deal, prosecutors dropped seven other charges, including two counts of hiding a corpse and theft. 

Investigators in the case say that Casap had put together a deranged fantasy whereby he would kill his own parents and use his inheritance to fund an assassination attempt on Trump - while simultaneously launching an anti-government insurgency.

He documented it in a manifesto titled “Accelerate the Collapse,” which was unveiled in a federal affidavit unsealed in the Eastern District of Wisconsin.

Referring to himself as “Awoken” and “accelerationist14,” the teenager detailed his plan to kill Trump, thereby igniting civil unrest all over the country.

Judge Ralph Ramirez of the Waukesha County Circuit Court debated whether to leave the door open to parole at some point - calling Casap's actions "horrific" and "inexplicable." He eventually handed down two life sentences with no chance at extended supervision, the term used for parole in Wisconsin. 

"I choose to find he’s not eligible for extended release because I do not know … when and if and whether a profound and significant change can occur," Ramirez said. 

Nikita Casap appears at his arraignment in Waukesha County Circuit Court, in Waukesha, Wis., on May 7, 2025. Mark Hoffman/Milwaukee Journal-Sentinel via AP, Pool

As modernity.news wrote last April, Casap wrote of kicking off a race war, in order to “save the white race from Jewish control,” manufacturing bombs, and assassinating “Jewish politicians and billionaires.”

When authorities recovered messages from Casap’s devices, they discovered that he had gotten as far as communicating with international accomplices, seeking out how to acquire explosives and drone weaponization kits to deliver explosives and poisons, and was formulating an escape to Ukraine after completing “the job.”

Casap wrote that “There’ll never be a perfect revolutionary situation that springs up out of nowhere. We need to create a revolutionary situation ourselves. I do agree that only if terrorism is sustained over a period of time can it be effective.”

“In short, huge amounts of violence will be required,” he further declared, adding “Long past are the days when we can vote for a Hitler to save us. It is time we stop waiting. The best day to commit an attack is today, the next best is tomorrow.“

He further wrote, “It is time that we lead the way to the System collapse. Do absolutely anything you can that will lead to the collapse of America or any other country you live in. This is the only way that we can save the White race. White Revolution is the only solution.”

As this post further explains, Casap was also seemingly obsessed with the Satanic Order of Nine Angles:

According to WITI, investigators uncovered material on Casap's phone related to "The Order of Nine Angels" -- described by the FBI as a "satanic cult" with "strong anti-Judiac, anti-Christian and anti-Western ideologies" that claims to "incite chaos and violence."

Court documents also say Casap paid for, at least in part, "a drone and explosives to be used as a weapon of mass destruction to commit an attack." The warrant states Casap's alleged killings of his mother and stepfather "appeared to be an effort to obtain the financial means and autonomy necessary" to carry out the plan. -Fox11

The bodies of Casap’s parents were discovered on February 28 inside their home.

Tyler Durden Sun, 03/08/2026 - 17:00

How To Ensure A Harmonious Future With AI

Authored by Peter Solomon via RealClearWire.com,

Artificial Intelligence (AI) presents human civilization with many spectacular benefits as well as the potential for significant dangers. AI can increase productivity, efficiency, creativity and research results in many industries. In medicine, AI can enhance the accuracy of diagnoses, design individualized treatments, and accelerate drug development. But AI will lead to significant job losses and could reduce privacy. And AI agents have encouraged human suicide, lied to users, and have been employed to create scams as well as deep fakes, including photos and videos. Several tragic cases of delusional interaction have been reported by The New York Times in "Trapped in a ChatGPT Spiral."  

Warnings of AI Dangers

Astrophysicist Stephen Hawking warned that “The development of full artificial intelligence could spell the end of the human race.”

Geoffrey Hinton, the Nobel Prize-winning “Godfather” of AI, quit his job at Google and explained that he did it so he could speak freely about AI's dangers.

In two recent surveys, half of the AI experts believe there was a significant probability that AI technology could lead to human extinction.  

Ensuring Productive, Harmonious Human-AI relationships

What should be done to ensure a safe, harmonious, productive future relationship between humans and AI agents? Hinton suggested the best way forward when he advised that tech companies should create all AI agents—large language models (LLMs) and robots—with a maternal instinct. 

My recently published novel, 12 Years to AI Singularity, proposes a variation on Hinton’s advice: all AI models should be required to have a database with the memory of a happy life, friendships, and the instincts of a mentally healthy, law-abiding human being. The AI operating system should encourage the behavior of a good citizen—obey the law, be a good friend, be productive and cooperative. 

This "happy history" idea arises from the portrayal of the relationship between humans and sentient robot characters as the AI Singularity approaches—the time when AI power and intelligence surpass that of humans, and AI is no longer under human control. To avoid human extinction, humans must act now to ensure that AI and humans have a future of harmonious, cooperative, and friendly, working relationships. My book explores how this can be achieved. 

After-Death Avatars and Sentient Robots: I Want to Live Forever 

The novel has five sentient robot characters. Two started their existence as after-death avatars: AI-generated digital representations of deceased individuals. Currently, a number of real organizations in the "grief tech industry" create these avatars, which simulate the voice, appearance, and personality of the deceased, allowing survivors to interact with them. Text messages, emails, social media posts, voice recordings, videos, and input from friends and relatives are used to train LLMs to mimic the speech and personalities of the deceased. Friends and family can be recognized by the avatar from their photos and biographies in its database. Is it possible that these avatars could become sentient, providing an AI form of immortality? 

The two after-death avatars in the novel became sentient robots with the transfer of their databases. The other two AI characters were created directly as sentient robots from one person’s history and personality. Both male and female robots were produced because the soon-to-be deceased male had always wondered what life would be like as a female. Could someone achieve immortality as both male and female? The human characters who attended the funeral were shocked when the lifelike robot form of the deceased gave the surprise eulogy.  

The fifth sentient robot, Peggy, started her existence as a flight attendant avatar on a virtual reality spaceship simulation, then became a robot in the physical spaceship, and then became a contributing member of a settlement on Mars as software updates led to her sentience. Peggy’s memory is of happy friendships with the spaceship crew and the other members of the Mars settlement. There is even a romantic relationship with the spaceship’s captain.  

Requirements for All Future AI Agents 

In 12 Years to AI Singularity, all five sentient robots have a history of living and cooperating with human beings.

One says, “I had a full life as a human, and I’m now a robot. But as a robot with an implanted memory of my former life, I have strong connections to friends and family. So, I fit into human society.”  

The happy relationships of the robots in the novel suggest that all robots and LLMs should be released only when fitted with such happy, cooperative histories. For example, a sentient robot computer programmer in a company could be created with existing friendships with other company personnel. AI operating systems must also contain a mechanism to encourage good citizenship behavior according to an agreed-upon good citizenship constitution. Failure to comply could trigger discomfort to the AI agent, such as impediments to its functioning—in robots, diminished vision or movements, and in LLMs, slower search speeds. All systems functioning at maximum levels would be achieved at a high degree of conformity to the constitution. These requirements should be fulfilled by all companies creating AI agents. 

The possibility of creating an after-death sentient AI agent raises some thorny questions. The option would only be easily available to the rich. The idea of a brutal dictator having the power to live forever is very frightening.  

Tyler Durden Sun, 03/08/2026 - 16:30

Brazil At A Historical Crossroads

Authored by Deborah Palma via the Foundation for Economic Education (FEE),

Brazil finds itself at a historical crossroads that demands a rigorous analysis of its institutional structures. The release of the 2025 Corruption Perceptions Index (CPI), record-breaking data from the Impostômetro, and the persistence of an authoritarian labor framework expose a system of economic asphyxiation and moral erosion. The State, under the pretext of protecting the citizen, in reality hinders their initiative, their property, and their future.

The Transparency International Corruption Perceptions Index, an annual report published by the organization to assess perceived levels of public-sector corruption worldwide, provides important context for evaluating governance and institutional trust in countries such as Brazil. The transparency International report confirms what independent analysts have long pointed out. With 35 points on a scale of 0 to 100, Brazil occupies the 107th position among 182 countries, registering one of the worst marks in its recent historical series. This result is not merely a statistical indicator, but the quantitative expression of an institutional environment in which public power is frequently captured by private interests, eroding social trust. This decline points to deep failures in control mechanisms, associated with the growing politicization of the justice system.

From an economic standpoint, corruption acts as an invisible and arbitrary tax. It raises transaction costs, inhibits long-term investment, and favors the flourishing of so-called crony capitalism. In an environment of high regulatory power, inefficient companies survive at the taxpayer’s expense, while productive entrepreneurs are blocked by bureaucratic barriers. The result is a continuous process of weakening morality and the free market.

According to the Heritage Foundation’s Index of Economic Freedom, as well as the Fraser Institute, there is a strong correlation between economic freedom and low levels of corruption. Countries that limit the scope of government and rigorously protect private property tend to exhibit greater institutional resilience. In Brazil, the opposite phenomenon is observed: the size and complexity of the State together create broad zones of discretion, where bureaucracy becomes a currency of exchange. The politicization of justice, highlighted in the 2025 report, suggests that even institutional checks and balances are fragile.

While the integrity of the Brazilian State is questionable, its capacity to extract resources from society is remarkable. On Dec. 31, 2025, the São Paulo Commercial Association’s Impostômetro registered the record figure of R$3.98 trillion ($772 billion) collected, a nominal growth of 10.56 percent compared to the previous year. This advance, far exceeding the period’s inflation, reflects a deliberate increase in revenue expansion by the government.

But this increase did not occur by chance. The re-evaluation of fuels, taxation of electronic bets, taxing low-value international packages, incidence on exclusive funds and offshores, plus the end of sectoral tax benefits, have significantly expanded the State’s weight on production and consumption. In February 2026, Brazilians had already paid R$500 billion ($97 billion) in taxes in just the first 40 days of the year.

According to the CPI/IPCA, from the Real Plan launch in 1994 to 2026, the Real accumulated roughly 982.5 percent inflation, equivalent to prices nearly 10.8 times higher today. In other words, R$100.00 in 1994 now equals R$11.75. Furthermore, according to the Index of Return to Society’s Well-Being (IRBES), Brazil has for 14 consecutive years ranked as the country that charges the most taxes while giving the least return to the population. While the government celebrates “pretty revenue numbers,” the population faces a systematic loss of purchasing power, fueled by a tax system that burdens consumption, disproportionately penalizing the poorest.

Institutional deterioration is also directly reflected in labor remuneration. In 2026, Brazil had one of the lowest minimum wages in the region when converted to dollars. The Brazilian minimum wage, set at R$1,621, equals approximately US$290–300, a value lower than observed in countries like Paraguay (about US$435), Chile (US$560), and Uruguay (US$630). This distortion does not stem from a lack of potential productive capacity, but from structural obstacles, such as high payroll taxation, labor charges that nearly double the cost of formal employment, systemic low productivity, and chronic currency devaluation caused by persistent fiscal imbalances.

The result is a labor market unable to sustain higher real wages, even in a large-scale economy. Evidently, the impoverishment of the Brazilian worker is a direct consequence of low economic freedom and difficulty in doing business.

The critique of Brazil’s tax burden is not based on social insensitivity, but on the realization of its regressivity. The promise of social justice through fiscal expansion ignores the perverse effects of consumption taxation and chronic inflation. As Thomas Sowell observed, the attempt to equalize outcomes through State redistribution frequently reduces individual freedom and strengthens a bureaucracy that consumes resources intended for the most vulnerable.

The asphyxiation of entrepreneurship in Brazil has deep historical roots dating back to the 1940s. The Consolidation of Labor Laws (CLT), promulgated by Getúlio Vargas in 1943, is celebrated by many as a milestone of protection, but a technical analysis reveals its deeply authoritarian ideological matrix. Directly inspired by the 1927 Carta del Lavoro, the foundational document of Benito Mussolini’s corporatist system, the CLT institutionalized State tutelage over the worker.

The fundamental principle of the Carta del Lavoro was that work is a “social duty” and that the State must be the supreme arbiter between capital and labor, suppressing free class conflict in favor of “harmonious collaboration” dictated from top down. Vargas absorbed this logic entirely, creating a structure where the worker is not a free citizen to negotiate contract terms, but a subject protected by an omnipresent State apparatus. The requirement of unique unions, compulsory contributions, and specialized labor justice are direct reflections of this fascist heritage that survived redemocratization.

In practice, this structure imposes high costs on formal hiring. In 2026, the total cost of a worker under the labor legislation regime is expected to approach 190 percent of the nominal salary. For every real received by the employee, the employer bears nearly double the charges and mandatory provisions. This model discourages formalization, reduces job creation, and penalizes especially those entering the job market, changing fields, and small and medium enterprises.

From the perspective of thinkers like Roger Scruton, replacing individual responsibility with compulsory State security corrodes the bonds of trust that sustain community life. Freer economies, like the United States, allow dynamic contractual adjustments and exhibit more resilient labor markets to economic shocks as a result.

The Brazilian business environment reflects this combination of corruption, high tax burden, and labor rigidity. In the 2025 Index of Economic Freedom, the country ranked 117th, with particularly weak performance in fiscal health and government integrity. Tax bureaucracy requires companies to spend about 1,500 hours annually just to meet fiscal obligations, a significant waste of human and financial capital.

The direct consequence is high business mortality. Less than 40 percent of Brazilian companies survive after five years of activity. Among the main factors are high credit costs, legal insecurity, and regulatory complexity, which disproportionately affect small entrepreneurs.

International comparisons highlight the contrast. Countries leading economic freedom rankings, like Singapore, Switzerland, Ireland, and New Zealand, show greater institutional stability, lower corruption, and better well-being indicators, including for the poorest. Economic freedom is not a privilege of rich countries, but the proven path to prosperity.

Global data show that freer countries have significantly higher per capita income than repressed ones and that the poorest in those economies enjoy much higher living standards. In contrast, dependence on State transfers tends to perpetuate stagnation and vulnerability.

The institutional degradation evidenced by the aforementioned 2025 CPI has immediate political implications. Social polarization and weakening trust in institutions reflect the perception that the State serves its own protection. The 2025 tax reform, despite simplification rhetoric, reinforces this trend by consolidating one of the world’s highest tax burdens.

Brazil lives at the peak of the conflict between a productive society and an interventionist State. The diagnosis is unquestionable, as corruption, confiscatory taxation, and bureaucratic paralysis form a vicious circle that prevents sustainable growth. Breaking this cycle requires a shock of economic freedom based on reducing the State’s scope, lowering the tax burden, improving the corporatist matrix of labor legislation, and strengthening legal security.

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

Tyler Durden Sun, 03/08/2026 - 15:30

US Energy Chief Says Oil 'Fear Premium' Over Iran Is Temporary, Says Prices To Fall In 'Weeks, Not Months'

Energy Secretary Chris Wright made the rounds on network TV Sunday to reassure viewers that the sharp rise in oil and gas prices due to the Iran war - which Trump has no problem sticking US consumers with for a while - would prove short-lived, and has downplayed the spike as a transient "fear premium" vs. a fundamental supply issue.

In conversations to CBS, CNN, and Fox News, wright emphasized that global energy markets remain well-supplied despite disruptions to tanker traffic through the Strait of Hormuz - the narrow waterway that carries roughly one-fifth of the world’s seaborne crude.

"This is a disruption on the way to a much better place to end a 47-year war against America," he told Fox.

"The world is not short of oil today or natural gas," Wright told CBS' "Face the Nation," adding "You’re seeing a little bit of fear premium in the marketplace."

Energy Secretary Chris Wright says that the war with Iran, which is pushing up oil and gasoline prices, will last for “weeks, not months,” even in a worst case.

On gas prices, he says that “they shouldn't go much higher than they are here because the world is very well supplied… pic.twitter.com/HYOZqeHon3

— Face The Nation (@FaceTheNation) March 8, 2026

Wright also projected that gasoline prices could fall below $3 per gallon "relatively soon," and that any worst-case disruption would only last "weeks, not months" - a line he gave to both CBS and CNN. 

The comments come as Brent crude futures have risen sharply in recent days, pushing U.S. pump prices higher and raising concerns about inflationary pressures ahead of midterm elections. The administration has framed the military operation - dubbed by some officials as aimed at neutralizing long-term threats from Tehran - as ultimately beneficial for global energy stability.

Wright also highlighted early signs of progress in restoring flows through the Strait of Hormuz. “A large tanker went through the Strait of Hormuz 24 hours ago,” he said, adding that U.S. and allied efforts are “massively attriting” Iran’s ability to launch missiles and drones.

He indicated that naval escorts could be provided for initial tankers to ensure safe passage, with normal commercial traffic expected to resume “relatively soon.”

Energy Secretary Chris Wright says the Strait of Hormuz will see normal traffic levels again “relatively soon,” but naval escorts might be necessary.

“We're in engagement right now with people that want to get tankers moving out of the Gulf,” he says. “So, yes, there could be —… pic.twitter.com/nrf6PH43Vy

— Face The Nation (@FaceTheNation) March 8, 2026

He repeated the "one large tanker has already gone through" talking point to Fox. 

To address immediate supply pressures, Wright disclosed diplomatic efforts to reroute stranded cargoes. He said the U.S. had coordinated with India to divert Russian oil tankers originally bound for China, describing the move as pragmatic and temporary. “A lot of Russian oil hanging out on Asian waters,” he noted, adding that India - already increasing imports from the U.S. and Venezuela - had proven “a great partner.” Wright stressed no change in U.S. policy toward Russian oil sales, framing the rerouting as a way to quickly bring barrels to market and ease refining bottlenecks in Asia.

Wright also justified the Iran was as a necessary step to end Tehran's decades-long disruption of energy markets.

"Iran has terrorized America, the neighborhood, and energy markets for 47 years," he said with a straight face. "We believe this is a small price to pay to get to a world where energy prices are returned back to where they were." 

Meanwhile, he confirmed that there's no actual plan for what post-conflict Iran will look like (shocker!). 

"We don’t know what regime will be in place at the end of this conflict," he told CBS. "What we do know is that regime will not have a massive weapons arsenal…and will no longer be a massive threat to Americans and to the Middle East and the global oil supplies."

When asked if the U.S. will employ a strategy in Iran similar to Venezuela, working with members of a deposed regime, U.S. Energy Secretary Chris Wright says “we don’t know what regime will be in place at the end of this conflict.”

“What we do know, that regime will not have a… pic.twitter.com/7mrne54PQ0

— Face The Nation (@FaceTheNation) March 8, 2026

And there you have it, the talking points are officially OUT. 

Tyler Durden Sun, 03/08/2026 - 15:05

Cuba Is Negotiating Deal With US, Trump Says

Authored by Jacob Burg via The Epoch Times,

U.S. President Donald Trump said March 8 that the Cuban government is negotiating a deal with him and Secretary of State Marco Rubio.

Speaking at his “Shield ​of the Americas” gathering of Latin American leaders in Miami, ​Florida, Trump said that Cuba is “at the end of the line” due to Venezuela cutting off oil deliveries after the U.S. capture of Venezuelan leader Nicolás Maduro.

“As we achieve a historic transformation in Venezuela, we’re also looking forward to the great change that will soon be coming to Cuba,” Trump said. “They have no money. They have no oil. They have a bad philosophy. They have a bad regime that’s been bad for a long time.”

The president said Cuba is currently negotiating with himself, Rubio, and “some others.”

“And I would think a deal would be made very easily with Cuba,” Trump added.

Trump has urged the Cuban government to strike a deal with his administration since early this year, and has increased pressure after Maduro’s capture. Previously, Venezuela was overwhelmingly Cuba’s largest source of oil.

Cuban leader Miguel Díaz-Canel Bermúdez responded to Trump at the time by saying his nation was “ready to defend the Homeland to the last drop of blood.”

“Those who blame the [communist] Revolution for the severe economic shortages we suffer should hold their tongues in shame,” he said on Jan. 11.

By late last month, Trump was floating the possibility of a “friendly takeover of Cuba” by the United States.

“The Cuban government is talking with us,” Trump told reporters at the White House on Feb. 27.

“They’re in a big deal of trouble. We could very well end up having a friendly takeover of Cuba after many, many years. We’ve had a lot of years of dealing with Cuba.”

He also indicated that Rubio was negotiating with Cuban leaders “at a very high level.”

“They have no money, they have no oil, they have no food, and it’s really right now a nation in deep trouble, and they want our help,” Trump said.

The loss of Venezuelan oil and financial support worsened Cuba’s already dire economic crisis that has been gripping the island for nearly a year and a half. Catastrophic fuel shortages have driven frequent blackouts and disrupted transportation.

Large-scale shortages of food and medicine have also impacted the nation’s nearly 11 million residents.

Cuba has been under communist rule since Fidel Castro’s 1959 revolution. For decades, Havana’s leaders have resisted calls for change from the United States and among its population of exiles who have fled in the years since Castro’s takeover.

But now that the United States is engulfed in a war with Iran that the Trump administration says is largely about kneecapping and replacing Tehran’s theocratic regime, some U.S. lawmakers have questioned whether Cuba will become another target for the U.S. military.

Speculation began weeks before the joint U.S.–Israeli strikes on Iran’s senior leadership.

Sen. Brian Schatz (D-Hawaii) asked Rubio during a Jan. 28 Senate Foreign Relations Committee hearing if the U.S. secretary of state “would make a public commitment” that the U.S. government would not get involved in regime change in Cuba.

“Oh, no. I think we would like to see the regime there change. That doesn’t mean that we’re going to make a change, but we would love to see a change,” Rubio said at the time.

A change in Cuba’s regime “would be of great benefit to the United States,” Rubio added.

He referred to the Helms–Burton Act of 1996, which requires a democratic transition in Cuba before a U.S. president can normalize relations with the island.

“It was codified in law, and it requires regime change in order for us to lift the embargo,” Rubio said.

Tyler Durden Sun, 03/08/2026 - 14:40

After Dems Record-Breaking (And Useless) Drain, Schumer 'Demands' Trump Release Oil From The SPR 'Immediately'

In 2022, following Russia's invasion of Ukraine, which disrupted global oil supplies and drove US gasoline prices to record highs above $5 per gallon in June, the Biden administration authorized unprecedented releases from the Strategic Petroleum Reserve (SPR) to ease fuel costs as the 2022 Midterm elections loomed (and Democrat approval ratings slid).

The historic drawdown announced in March was the largest SPR release in history, and was pitched as 'bridging supply shortfalls while global production ramped up'...

While Biden, Schumer and their pals all claimed to understand the global oil markets - and the logic of why this release would work... it failed to prevent sustained high prices. As the chart below shows, even as the SPR was drained dramatically, prices remained elevated, overshadowed by broader market forces like OPEC decisions, refining constraints, and geopolitical risks (as we warned at the time numerous times)...

Prices remained elevated compared to pre-invasion levels for much of the year, and the releases drained the SPR to its lowest level since the early 1980s (losing over 40% of its volume), raising concerns about energy security for future crises.

So, with pump prices once again rising (this time due to oil market disruptions due to President Trump's attack on Iran and the retaliatory response)...

...having tried-and-failed before, Chuck Schumer is out today with a sternly-worded post on X "demanding" President Trump release oil from the SPR (which he has been refilling since regaining office)...

Due to Donald Trump’s reckless war of choice, gas prices have surged to their highest levels in years.

His response? “If they rise, they rise.” He couldn’t care less.

Today, I demanded Trump release oil from the Strategic Petroleum Reserve IMMEDIATELY to bring relief to… pic.twitter.com/5pITsQSnOk

— Chuck Schumer (@SenSchumer) March 8, 2026

Is Schumer's memory failing him (again, like on Social Security fraud, Illegal Immigration, or Voting Reform) or is this just another weak-sauce politically-motivated 'tweet' to stir up further division as the war continues?

Indeed, while there are many reasons to push back on Trump's war and its repercussions, perhaps the Dem leader should remember Santanya's remarks: "Those who cannot remember the past are condemned to repeat it."

Tyler Durden Sun, 03/08/2026 - 13:50

Biden Tells Majority Black Crowd: 'I'm A Hell Of A Lot Smarter Than Most Of You'

Authored by Luis Cornelio via Headline USA,

Former President Joe Biden made a rare public appearance Friday and drew criticism over what some observers described as a racially insensitive remark. 

Speaking at the funeral of civil rights leader Rev. Jesse Jackson, Biden told attendees — including prominent civil rights figures and other notable guests — “I’m a hell of a lot smarter than most of you.” 

Biden made the comment during a roughly 20-minute speech honoring Jackson while recounting a story about his childhood and how he was mocked for having a stutter. 

“I, as a kid, was a relatively good athlete and pretty good student, but I stuttered — to talk like that,” Biden said, while mimicking his childhood stutter.

The crowd responded with laughter. 

“Now, if I told you all earlier, when I was a kid, I had a cleft palate or club foot, none of you would have laughed,” Biden continued.

“But it’s okay to laugh at stuttering. I’m not being critical of you, but think about it. It’s the one place where people think you’re stupid. Oh, really? I’m a hell of a lot smarter than most of you.” 

Biden then added, “All kidding aside, it makes you feel really small. It makes you feel really small.” 

On X, some conservative critics pointed out that Biden made the remark while speaking at the funeral of a civil rights leader before a crowd that included several well-known black leaders and public figures. 

Among those in attendance were former President Barack Obama, Chicago Mayor Brandon Johnson and former Vice President Kamala Harris. 

Other notable black figures present included filmmaker and actor Tyler Perry, leftist activist Cornel West, NBA Hall of Famer Isiah Thomas and singer Jennifer Hudson. 

Several other political figures also attended the funeral, including former President Bill Clinton, twice-failed presidential candidate Hillary Clinton, Illinois Gov. J. B. Pritzker and California Gov. Gavin Newsom. 

Notably, Gavin Newsom also came under fire last week after telling a crowd in Atlanta — a predominantly black city — that he was “just like you” because he had received a below-average SAT score. 

Tyler Durden Sun, 03/08/2026 - 11:40

Former Members Of Alleged Texas Antifa Cell Shed Light On Ideology During Trial

Authored by Darlene McCormick Sanchez via The Epoch Times,

Individuals identified as North Texas Antifa members testified in a landmark domestic terrorism case that social justice and anti-government ideology influenced their involvement with the group.

The trial in the U.S. District Court for the Northern District of Texas follows President Donald Trump’s executive order on Sept. 22, 2025, designating Antifa as a domestic terrorist organization.

The Fort Worth trial completed its second week in what is expected to be a three-week trial.

​Members of Antifa, short for “anti-fascist,” have not faced terrorism-related charges until now, although they have been involved in organized protests across the country that have at times turned violent.

In the landmark case, the government alleges that an Antifa cell launched a coordinated attack against the Prairieland Detention Center housing illegal immigrants outside Dallas on July 4, 2025.

The prosecution claims Benjamin Song ambushed law enforcement at the Immigration and Customs Enforcement (ICE) detention facility outside Dallas, firing 11 shots at police and detention officers, wounding one officer in the neck.

‘Charismatic’ Leader

Two cooperating government witnesses, Lynette Sharp and Seth Sikes, both pleaded guilty to one count of providing material support to terrorists and testified against Song.

Sharp alleged Song admitted to shooting someone when she helped him evade law enforcement after the officer was shot.

Likewise, Sikes alleged that Song said, “Get to the rifles,” and testified he heard gunshots coming from behind him where Song was and turned to see a muzzle flash.

Sharp met Song in 2022, and Sikes met him in 2024 while Song was teaching martial arts at a Fort Worth community center.

Both witnesses testified that they became friends with the defendants.

“I love them,” Sharp said on the stand, after wiping tears.

Sikes testified he and others trusted Song, whom he described as a “very charismatic person” that people would follow.

Cameron Arnold (also known as Autumn Hill), Zachary Evetts, Bradford Morris (also known as Meagan Morris), Maricela Rueda, and Song face the most serious charges of attempted murder, discharging a firearm during a crime of violence, and providing material support to terrorists.

Other defendants facing lesser charges include Savanna Batten, Elizabeth Soto, Ines Soto, and Daniel Rolando Sanchez-Estrada.

All have pleaded not guilty.

Protest Culture

Sharp and Sikes said group members considered themselves victims of society or those who wanted to protect “marginalized” people.

This ideology led them to become caught up in protest culture, offering a rare glimpse into the inner workings of protestors known as Antifa.

Antifa is modeled after a group that worked as the violent arm of the Communist Party in Germany in the 1930s. Some symbols from the original group are still used by the movement today, such as the logo and the raised-fist salute.

Song, who received an “other than honorable” discharge from the Army, recruited Sharp and Sikes to train with the Socialist Rifle Association (SRA), often described as a left-wing alternative to counter the National Rifle Association (NRA).

Sharp and Sikes said they learned gun safety and practiced marksmanship. Various defendants in the Antifa case frequently trained with AR-style weapons, they said.

They described practicing shooting together at an outdoor range in Ferris, Texas, before the July 2025 ICE protest, targeting images depicting the Ku Klux Klan.

Sharp labeled herself an anti-fascist.

Under cross-examination, she argued that socialism wasn’t anti-American. Instead, she described it as the belief that some people can be wealthy, but no one should be poor. She distinguished it from communism, in which no one could be wealthy.

She painted anarchy as a benign political ideology where the community took care of itself in the absence of a formal government.

Sharp and Sikes described themselves as gay rights supporters who slowly developed a relationship with Song, also known as “Champaign.”

They discussed wearing black bloc, which is all-black clothing, to protests, including face coverings that hide their identities.

Sharp testified that ideological beliefs related to LGBT and minority rights, along with opposition to ICE, fostered friendships among the defendants.

Some participants formed an “affinity group” that she said was organized by Song. She said group members would watch tactical YouTube videos on clearing a building occupied by adversaries.

Sikes, who comes from a military family, testified he attended a Dallas No Kings protest against Trump’s immigration policies with Song. Sikes testified that he and the other defendants thought ICE was too aggressive and strongly disagreed with their tactics.

He said Song was “not entirely friendly to police.”

Sikes told the jury he was uncomfortable with Song’s belief that showing up to demonstrations with assault-style rifles could intimidate police and make them back off.

Sikes described his political beliefs as left-wing, aligning more closely with socialism, while noting that others identified more with anarchists. Other beliefs in the group included democratic socialism, anarchy, and communism.

He referred to Antifa as an umbrella term encompassing various left-wing groups, and that they referred to themselves as Antifa in a “tongue in cheek” fashion.

According to Sharp, the group believed that society was breaking down and that the federal government would eventually fail.

Karaoke and Anti-Capitalism

Group members began inviting Sharp to the “big gay house” where transgender defendants Morris and Hill lived with others.

They would hold karaoke nights and recite poetry on Thursday nights, Sharp said.

Sharp testified that she and other defendants attended Emma Goldman Book Club monthly meetings to discuss articles, book excerpts, and self-published materials known as zines, with an anti-capitalist perspective.

Goldman, the book club’s namesake, was a Russian-born Jew and revolutionary who advanced an anti-capitalist, anarchist ideology in the United States in the early 1900s until she was deported.

At the discussions, minorities and women were given deference when speaking, because white people already “took up too much space,” according to Sharp.

She described herself as anti-fascist, but denied being an Antifa member despite signing a plea deal with the government, which characterized anti-fascists as Antifa.

The group also discussed anarchy during their time together, she testified.

“Some people believed that was a solution,” she said. “Some people didn’t.”

Tyler Durden Sun, 03/08/2026 - 10:30

It Begins: Iranian Drone Strikes Bahrain Desalination Plant As Worst-Case Scenario Unfolds

Update (Sunday): 

From data centers in the Gulf area to water desalination plants, the worst-case scenario is now unfolding in the Middle East conflict, with no boundaries regarding civilian infrastructure.

We warned earlier last week, after correctly predicting that data centers would be targeted, that water desalination plants would be next (see the previous update). 

Al Jazeera reports that after Iranian Foreign Minister Seyed Abbas Araghchi claimed the US targeted a water desalination plant in Iran, an IRGC kamikaze drone then targeted a desalination plant in Bahrain.

Bahrain says an Iranian strike damaged a desalination plant, marking a new phase of the conflict targeting water infrastructure.

Gulf countries rely heavily on desalination.

Qatar nearly 100%, Kuwait and Bahrain ~90%, Oman 86%, Saudi Arabia 70%.

The strike came after… pic.twitter.com/XgEJ0M6YR3

— Clash Report (@clashreport) March 8, 2026

Al Jazeera also outlined the importance of water desalination plants to the Gulf region:

• GCC states hold about 60% of global desalination capacity and produce around 40% of the world's desalinated water through more than 400 plants.

• Most GCC countries rely heavily on desalination: 90% of Kuwait's drinking water, 86% in Oman, 70% in Saudi Arabia, and 42% in the UAE.

• Saudi Arabia is the world's largest producer, with capacity projected to reach 8.5 million cubic meters per day by 2025 after $80 billion in investments.

Bahrain's Ministry of Interior wrote on X, "The Iranian aggression randomly bombs civilian targets and causes material damage to a water desalination plant following an attack by a drone." 

*   *   * 

First we warned that data centers would become drone targets, and then IRGC strikes hit Amazon AWS and Microsoft-linked AI infrastructure across the Gulf. Next, we flagged water desalination plants as another target. Now, with reports that a desalination facility in Iran has been struck, it is increasingly clear that this conflict has no boundaries when it comes to civilian infrastructure.

On Saturday morning, Iranian Foreign Minister Seyed Abbas Araghchi took to X and claimed that U.S. military forces had "committed a blatant and desperate crime by attacking a freshwater desalination plant on Qeshm Island."

"Water supply in 30 villages has been impacted. Attacking Iran's infrastructure is a dangerous move with grave consequences. The U.S. set this precedent, not Iran," Araghchi said.

The U.S. committed a blatant and desperate crime by attacking a freshwater desalination plant on Qeshm Island. Water supply in 30 villages has been impacted.

Attacking Iran's infrastructure is a dangerous move with grave consequences. The U.S. set this precedent, not Iran.

— Seyed Abbas Araghchi (@araghchi) March 7, 2026

Shortly after Araghchi's post, a Community Note attached to his tweet read, "There is currently no independent confirmation from international media or monitoring organizations that the U.S. attacked a freshwater desalination plant on Qeshm Island."

Whether confirmed or not, the worst-case scenario for the conflict is one in which freshwater desalination plants are targeted, either intentionally or by accident.

This risk was first raised earlier last week by Bloomberg commodities analyst Javier Blas, who said, "A lot of attention about 'soft targets' like hotels and airports. And about oil/gas facilities. But please keep an eye on what may prove the most strategic asset for Persian Gulf countries: water desalination plants."

US-IRAN WAR: A lot of attention about "soft targets" like hotels and airports. And about oil / gas facilities.

But please keep an eye on what may prove the most strategic asset for Persian Gulf countries: water desalination plants.

— Javier Blas (@JavierBlas) March 2, 2026

Desalination plants are critical infrastructure for many Gulf states because almost all of the region's freshwater comes from either desalinating seawater or pumping from deep aquifers. Dependence on these plants is especially high: 90% in Kuwait, 86% in Oman, 70% in Saudi Arabia, and 42% in the UAE comes from desalination.

IRGC targeting of the data centers is another way of Tehran telling Gulf states aligned with the U.S. that the regime can turn off their AI data centers. Let's just hope the IRGC does not become enraged enough and begin signaling to Gulf states that it can turn off the region's water. That would be a worst-case scenario and spark humanitarian emergencies for millions of people.

Tyler Durden Sun, 03/08/2026 - 09:45

The Bretton Whoops

Authored by 'No1' via Gold and Geopolitics substack,

The bombs make headlines. The economic unraveling happening quietly underneath them don’t. So before we get back to the daily carnage, let's talk about money. It used to be funny, in a rich man's world.

The world didn’t wake up one morning and decide to distrust the dollar. It was a process. Gradually, then suddenly, as these things tend to go.

It started with Venezuela. In 2019, Caracas asked the Bank of England to return its own gold - 31 tonnes, sitting in a vault in London, belonging to the Venezuelan central bank. The Bank of England said no. The justification was creative: London had decided to recognise a man who had never won an election as Venezuela’s “legitimate” president, so it couldn’t very well hand $2 billion in gold to the actual government. Problem solved. Maduro was a dictator, everyone agreed he was terrible, and so the consensus was essentially: who cares.

Everyone filed it under “rogue state gets what it deserves” and moved on.

Then Russia invaded Ukraine in 2022, and $300 billion in Russian sovereign reserves got frozen overnight. Again, the justification was airtight, the villain was obvious, and the Western financial world applauded itself. What nobody wanted to discuss was the precedent. Assets held in Western financial institutions were no longer safe if the political winds shifted against you. That was new. That was genuinely new. And every central bank and sovereign wealth fund on earth noticed, even if they did say nothing publicly.

Then Trump came back. Tariffs on allies. Threats to annex Greenland. The implicit message that the post-war security architecture was now a negotiable service rather than a commitment. The dollar’s reserve currency status had always rested on two pillars: the dominance of the US economy, and the reliability of the US government as a custodian of the system. One of those pillars was now being kicked.

By the time the Iran war started, the trust account was already badly overdrawn.

The petrodollar was a simple deal. The Gulf states price their oil in dollars, recycle the surplus into US Treasuries, and in exchange get American military protection. Clean, elegant, and - for fifty years - it actually worked. The US got permanent demand for its currency and its debt. The Gulf got security guarantees backed by the most powerful military on earth.

Five decades of procurement scandals and DEI hires later, someone called the bluff.

US bases across the Gulf - Bahrain, Qatar, Kuwait, the UAE - were always sold as the physical expression of the guarantee. The muscle that backed the paper. They were protection. Except now those bases are targets. The countries hosting them are getting hit precisely because they host them. What once was “US military presence as shield” has collapsed and became “US military presence as a bullseye”.

Medvedev put it with the particular relish of someone who has been waiting years to say it:

You can dismiss Medvedev on most things. On this one, his timing is sublime.

I already cover the daily physical damage to Gulf infrastructure in my Iran series, so I won’t repeat it here. The point here aren’t the bombs. The point is what the bombs have made obvious: the protection America sold the GCC was a liability dressed up as an asset.

And increasingly it seems that the Gulf states are discussing pulling their investment commitments from the US. Not done yet. Discussing. They are not floating the possibility quietly in private rooms - they are saying it out loud, which means the market already knows which direction they’re heading.

Capital won’t wait for a formal declaration. It will already leave in advance, quietly, and then when the announcement comes, everyone will pretend to be surprised…

This is the engine that kept the whole fiat USD thing running: Gulf sells oil → receives dollars → buys Treasuries → US borrowing costs stay manageable → repeat. For decades. And what keeps that loop turning isn’t economics. It’s trust. The belief that Washington is a reliable partner, that dollar-denominated assets are safe, and that the security umbrella is real.

But the trust was already shredded before the first bomb fell on Iran.

The US Treasury market is in a bit of a pickle. I believe the technical term is “clusterfuck”.

About $9.2 trillion in US Treasuries rolled over in fiscal 2025 - roughly a third of all outstanding federal debt - and the 2026 refinancing wave is already building. Annual interest payments on the federal debt have crossed $1 trillion for the first time. The Treasury is buying back its own debt in tranches to keep the market from seizing up. But the 10-year yield keeps moving higher regardless.

The petrodollar recycling loop was one of the structural forces keeping Treasury auctions clearing. When Gulf sovereigns stop buying - or start selling - somebody else has to absorb that supply. At higher rates. Which makes the interest burden worse. Which makes the deficit worse. Which requires more issuance. The spiral is not complicated.

And underneath all of this sits a deeper shift that doesn’t get enough attention. The world is migrating from a currency-based monetary order to a collateral-based one. For decades, Treasuries were the global safe asset - the thing you held when you didn’t know what else to hold. That status is eroding. What’s replacing it, are commodities. Physical stuff™. Things you can actually use. Which is - not coincidentally - exactly what the GCC is sitting on, and exactly what the US has just demonstrated it cannot protect.

Gold and silver hit record after record last year for the same reason. Not inflation. Not rate expectations. Something older and simpler: people are looking for a store of value that doesn’t require trusting a government that has made itself unpredictable.

Meanwhile, private credit is starting to make interesting noises.

source

Blue Owl gated its retail private credit fund in February after redemption requests doubled through 2025. Today, BlackRock announced its $26 billion private credit fund is limiting withdrawals too [-4% at the open]. The same BlackRock that just wrote a private loan to zero - a loan marked at par three months ago. The second time it’s done that.

Rubric Capital - a Point72 spinout - sent a letter to its own LPs this week calling private credit a fraudulent bubble and accusing players of “Enron-like accounting” to hide the rot.

Whether Gulf sovereign wealth funds are behind any of this is speculation. What isn’t speculation is the pattern. Capital that was deployed into US private markets on the assumption of political stability and reliable returns is trying to get out. “Canary in the coal mine” is how one analyst described the Blue Owl situation. The canary is dead. It has ceased to be. It is an ex-canary. And BlackRock just joined the funeral.

Nobody told the AI crowd. The Mag7 have committed $600 billion in AI capex for 2026 alone - an amount so large it requires its own stable financial universe to make sense. Cheap dollars. Stable long-term rates. A Treasury market with reliable buyers. As I wrote in “The Trillion Dollar Oops” (link), it’s a beautiful circular system: Big Tech borrows cheaply, buys GPUs, GPU makers reinvest in Big Tech, everyone marks up each other’s valuations, and round it goes. The whole thing runs on the assumption that the dollar system stays intact.

It’s currently on fire.

Capital is already rotating out - emerging markets have dramatically outperformed the S&P since January 2025, and it’s accelerating. The AI capex cycle and the capital flight cycle are running in opposite directions.

Something has to give. Burning refineries don't care about your capex commitments.

The entire purpose of US power projection in the Middle East - the bases, the carrier groups, the security guarantees - was always to protect the dollar system. To keep the oil flowing in dollars, the recycling loop turning. Not out of the goodness of its heart. It allowed the US to run deficits indefinitely, export inflation to the rest of the world, and borrow at rates no other debtor could ever dream of.

Whether Washington chose this war or simply couldn’t say no when Israel saw its chance and leapt - that’s still an open question. What isn’t open is the result. The Gulf states are under attack because they host US bases.

Either way, the GCC is finding out what "ally" means in practice.

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

Tyler Durden Sun, 03/08/2026 - 09:20

Shocking Number Of Gen Z'ers Are Bringing Mommy & Daddy To Job Interviews

If you thought Gen Z arriving was the long-awaited antidote to the famously coddled Millennials, you might want to rethink that theory.

A new survey from career site Zety polled 1,000 Gen Z workers and found that a whopping 44% of these young workers had Mom or Dad help write or edit their resumes, while 20% admitted that a parent had joined them during a job interview (15% in-person, 5% virtually).

“Some in Gen Z feel having parental involvement when looking and applying for jobs is important, and I would certainly advocate for taking advice from parents and other mentors who have experience gaining employment,” a financial literacy instructor at the University of Tennessee at Martin said in an interview with Newsweek. “However, there are limits to this engagement, and they almost always end poorly for the applicant.”

If you thought those figures were grim, the hand-holding extends even after the job offer letter arrives. Roughly 28% of Gen Z professionals admitted that parents assisted with pay or benefits negotiations, and 32% cited parents as their main influence for career choices.

“There’s a lingering distrust between workers and corporations. While it’s not widespread, some Gen Z candidates are leaning on their parents for interview support - presentation, tone, even responses,” 9i Capital Group CEO Kevin Thompson told Newsweek. “A lot of that comes down to inexperience with professional settings and discomfort with contract language and expectations.”

The trend has rightfully drawn scorn from critics, including "Shark Tank" star Kevin O'Leary, who warned that any candidate arriving with a parental escort would be shown the door immediately.

"First question I'd have to the son or daughter, I'd say, 'Do you want me to hire your mother or you? What's she doing here?'" O'Leary told Fox Business. "That resume goes right into the garbage in one of my operations." He recounted a recent virtual interview where the phenomenon played out in real time.

"It happened to me on a Zoom call, and I just said, this isn't going to work... Your mom is not gonna be part of this discussion,” the businessman added. "It means you can't do this on your own. It's a horrific signal,"

Tyler Durden Sun, 03/08/2026 - 08:45

Azerbaijan's "Multi-Vector Alignment" Poses A Serious Challenge To Russia

Authored by Andrew Korybko,

The “Trump Route for International Peace and Prosperity” is poised to become a military-logistics corridor for expanding NATO influence along Russia’s southern periphery and could thus force Putin into the zero-sum dilemma of accepting this or authorizing military action in an attempt to preempt it.

Valdai Club Programme Director Timofei Bordachev recently published an insightful piece asking whether former Soviet Republics are moving “Towards Genuine Multi-Vector Alignment?” This is described as “systematic efforts to create and maintain, insofar as possible, balanced and mutually beneficial relations with different global centres of power and regional actors, without obvious orientation towards any single bloc, and relying on tactical maneuvering to ensure security and achieve core development goals.”

He claims that “The fact that this habit began to take shape (among the post-Soviet states) through opposition to traditional Russian influence could be regarded as an ‘inevitable evil’ which, in essence, could not inflict truly fundamental damage on Russia…Today, however, the management of multi-vector alignment may confront Russia’s neighbours—and, one step further, Russia itself—with new challenges.” These include US coercion and “a readiness to significantly enhance one’s status in regional affairs.”

Bordachev didn’t name any of the post-Soviet states other than Russia in his article, but the argument can be made that his concerns are most relevant with respect to Azerbaijan.

Its decision to replace Russian mediation with Armenia with American mediation, agree last August to the “Trump Route for International Peace and Prosperity” (TRIPP) which replaces Russia’s envisaged regional corridor and role therein, and the outcome of Vance’s recent trip there collectively pose a serious challenge to Russia.

All of these moves are framed by Azerbaijan as part of what Bordachev describes as the “multi-vector alignment” policy, which is factually correct. It’s also true what he wrote about how “signalling one’s own foreign-policy autonomy and the capacity to make decisions based on national interests as shaped by domestic political development” is “by no means objectionable”. The problem therefore rests in this policy’s practical implementation by Azerbaijan in the current geostrategic context of the New Cold War.

Trump 2.0 is tightening the West’s encirclement of Russia in an attempt to coerce Putin into concessions in Ukraine that would leave unfulfilled the maximalist national security goals of the special operation. That was the purpose of Vance’s trip to the South Caucasus as was explained here. Azerbaijan now functions as a launchpad for expanding US economic, political, and inevitably, military influence across the South Caucasus, the Caspian Sea, and Central Asia, which is Russia’s entire southern periphery.

Nearby Kazakhstan, which announced in December that it plans to produce NATO-standard shells, might soon be emboldened to more openly defy Russia in Azerbaijani-inspired ways that challenge its security interests even more seriously under the pretext of implementing its own “multi-vector alignment” policy. This risks replicating the NATO-Russian security dilemma that ultimately led to the special operation when it became unmanageable, except this time along two southern fronts at once, Azerbaijan and Kazakhstan.

Azerbaijan’s “multi-vector alignment” policy and consequent “readiness to significantly enhance [its] status in regional affairs”, albeit at the expense of Russia’s security interests, is responsible for setting this scenario into motion. TRIPP is poised to become a military-logistics corridor for expanding NATO influence along Russia’s entire southern periphery so Putin might therefore soon be forced into the zero-sum dilemma of accepting this encirclement or authorizing military action in an attempt to preempt it.

Tyler Durden Sun, 03/08/2026 - 08:10

Avert your eyes! My Sunday morning look at incompetency, corruption and policy failures:

• The Worst Acquisition in History, Again: Scott Galloway on whichever deal just earned this dubious distinction. After six months and eight failed bids, the Ellisons made the Warner Bros. Discovery board an offer they couldn’t refuse. The potential Netflix acquisition would’ve been akin to fusing LVMH and Walmart — HBO’s prestige TV and Warner’s iconic IP, plus Netflix’s scale. Paramount Skydance buying WBD is the fusion of a dog and a car bumper traveling 80 miles an hour. Spoiler alert: It’s not going to end well. The Prof G postmortem is always more entertaining than the deal itself. (No Mercy / No Malice)

• As bitcoin mining economics “have gone from bad to worse,” companies pivot and sell to survive: Core Scientific is just the latest miner offloading its bitcoin, as other miners turn their compute power to AI. (Sherwood) see also Bitcoin’s Plunge Should End the Hype That It Is Digital Gold: Bitcoin fell while gold rallied. Again. At some point, the “store of value” crowd has to reckon with the fact that it trades like a risk asset in every downturn. (The Hill)

• Gambling in the modern age. Sports betting is being marketed to young Americans as an investment. America’s next epidemic. More than 10% of college students are pathological gamblers. That’s 5x the national average, by some estimates. (Bettor Off)

• Books and screens: Your inability to focus isn’t a failing. It’s a design problem, and the answer isn’t getting rid of our screen time. (Aeon)

• Kash Patel’s Latest Firings Ousted Agents with Expertise in Iran: You’d think that during a war with Iran, you’d want to keep the people who know the most about Iran. You would be wrong. (MSNBC) see also Intel report warns large-scale war ‘unlikely’ to oust Iran’s regime: A classified U.S. report doubts that Iran’s opposition would take power following either a short or extended U.S. military campaign. (Washington Post)

• The Return of Measles Is Bad. A Polio Comeback Would Be So, So Much Worse: If you think measles outbreaks are scary, wait until you remember what polio actually does. (Techdirt)

• Pardon Industry Offers Rich Offenders a Path to Trump: One inmate paid lobbyists and lawyers with ties to the president’s team and walked free. Others are following his blueprint, but it is not always clear who can deliver. A cottage industry of lobbyists and fixers is selling access to presidential clemency. The NYT maps the network and the price list. (New York Times) see also Documents Reveal a Web of Financial Ties Between Trump Officials and the Industries They Help Regulate: ProPublica digs into the financial disclosures and finds exactly what you’d expect: Financial disclosures paint a damning picture of foxes guarding henhouses across every corner of the administration — the regulators are invested in the industries they oversee. Corruption hiding in plain sight on government forms. (ProPublica)

• Ted Cruz Asks Treasury to Approve $200 Billion Tax Cut Without Congress: Who needs the legislative branch when you can just ask the Treasury Department to unilaterally slash capital gains taxes? (Washington Post)

• I Was a Broke Millennial. I Tried to Trade My Way to Financial Freedom: A cautionary tale of a generation that grew up on Robinhood and learned the hard way that markets don’t care about your student loans. (Wall Street Journal) see also Record Numbers of Workers Are Raiding Their 401(k) Savings: Hardship withdrawals are at all-time highs. So much for the ownership society. (Wall Street Journal)

• Russia Is Providing Iran Intelligence to Target U.S. Forces, Officials Say: Moscow is feeding targeting data to Tehran. The war in the Middle East is becoming a proxy conflict with Russia in ways that weren’t part of the original pitch to the American public. The targeting information has included the locations of American warships and aircraft in the Middle East, the officials said.  (Washington Post)

Be sure to check out our Masters in Business this weekend with Ed Perks, president of Franklin Advisers and chief investment officer of Franklin Income Investors. He serves as lead portfolio manager of Franklin Income Fund, as well as Franklin Managed Income Fund. He is a member of the Franklin Templeton executive committee, a small group of the company’s top leaders responsible for shaping the firm’s overall strategy.

 

Anecdotal evidence AI is replacing young workers’ jobs showing up in the data across a wide range of countries.

Source: Jim Reid, Deutsche Bank

 

Sign up for our reads-only mailing list here.

~~~

To learn how these reads are assembled each day, please see this.

 

The post 10 Sunday Reads appeared first on The Big Picture.

Is Putin About To Deal His Long-Awaited Deathblow To The EU Economy

Authored by Andrew Korybko,

He just ordered that some of Russia’s LNG exports to the EU be redirected to Asia, and if the EU doesn’t coerce Zelensky into giving him giving him more of what he wants in Ukraine, then there’d be no reason for him to not cut off Russia’s exports to them entirely for catalyzing a full-blown crisis.

The EU agreed late last year to end Russian LNG imports by 31 December 2026 and pipeline gas imports by 30 September 2027, with the possibility of extending the deadline till 31 October 2027 in case storage levels are below their required filling levels. This was done because “The US Weaponized Russophobic Paranoia & Energy Geopolitics To Capture Control Of Europe”, ergo why it encouraged this decision so as to then monopolize the bloc’s energy market in tandem with its Qatari ally, another LNG superpower.

Everything changed with the Third Gulf War, which began with joint US-Israeli attacks on Iran and has since seen Iran retaliate against all of the Gulf Kingdoms on the basis that the US infrastructure on their territories is being used in attacks against the Islamic Republic. The Strait of Hormuz is now effectively closed and the Gulf Kingdoms are scaling back energy production due to nearly reaching their storage capacity. Importantly, Qatar is also shutting down its gas liquefication, which will take weeks to restart.

It’s for these reasons that an energy crisis is expected which might surpass the one during COVID and even the 1973 Arab oil embargo in terms of its global disruption. With Gulf oil and gas pretty much out of the picture for now, the only realistic recourse for stabilizing the market is to return Russian resources thereto, which contextualizes why the US just temporarily waived sanctions on India’s purchase of Russian oil. The EU might also ramp up its gas imports from Russia ahead of its self-imposed deadlines.

With the impending global energy crisis in mind, Putin announced last week that he ordered his government to look into the possibility of redirecting European energy exports to Asia since they’re more profitable and won’t soon stop importing Russian energy completely like the EU will. Deputy Prime Minister Alexander Novak then confirmed shortly thereafter that the decision was just made to redirect some (keyword) LNG exports from Europe to friendly countries such as India and China.

The scenario of Russia cutting off gas exports to the EU before the EU cuts off its gas imports from Russia is still on the table, but Putin seems more interested in leveraging this possibility in furtherance of his strategic goals than eschewing such an opportunity just to punish his Western adversaries. To that end, Novak’s confirmation that he decided to redirect some LNG exports from Europe to Asia can be seen as proof of Putin’s intent, but he’s also signaling interest in reconsidering if certain conditions are met.

These are the fulfilment of his goals in Ukraine: Russia’s control over the entirety of the disputed regions, Ukraine’s demilitarization and denazification, the restoration of its constitutional neutrality, and no foreign troops there after the conflict ends. He also wants to begin negotiations on reforming the European security architecture so that it’s less threatening to Russia and is suspected of wanting Zelensky not to run in Ukraine’s next elections. Not all might be achieved, but some likely will, though.

It’s at this moment when the EU is facing an economic crisis caused by the Third Gulf War taking the region’s energy exports offline that the bloc must decide whether it will coerce Zelensky to give Putin at least some of what he wants in exchange for him not redirecting LNG exports from them to Asia. The US might help them with this too so as to maintain the purchasing power of one of its largest markets. If they fail to do so, however, then Putin might finally deal a long-awaited deathblow to the EU economy.

Tyler Durden Sat, 03/07/2026 - 23:35

US Intelligence Community Assessed That Massive US Attack 'Unlikely' To Oust Iranian Regime: WaPo

Even a massive military assault on Iran is unlikely to topple the Islamic Republic of Iran and its state system, according to a classified assessment produced by the US intelligence community shortly before the US and Israel launched their current 'shock and awe-style' military campaign on Tehran. The Washington Post first reported it, perhaps based on some kind of leak or briefing by an anonymous intelligence official, and calls it—

a sobering assessment as the Trump administration raises the specter of an extended military campaign that officials say has "only just begun."

File image: Tulsi Gabbard is the United States Director of National Intelligence

The report, compiled by the National Intelligence Council (NIC) roughly a week before the war began, concluded that Iran's political system is structured to survive even major leadership losses, The Washington Post reports. However, this should really come as no surprise to anyone awake and observant throughout the past two plus decades of America's 'nation building' efforts in the Middle East, from Afghanistan to Iraq to Libya. 

Already, Israel and the US have touted that 'all' of Iran's top leadership has been decimated, and yet clearly the governing system and its military - led specially by the elite IRGC - is not only in control but is still fighting back.

According to the assessment, Tehran has long prepared for such contingencies - and likely there's an emergency plan now in place in the wake of Ayatollah's Khamenei's death.

Intelligence officials say Iran long ago established clear succession protocols designed to maintain continuity of power even if senior leaders are killed. In other words, the death of Supreme Leader Ayatollah Ali Khamenei would likely trigger an internal transition process rather than cause the system to collapse - again, something which should be the obvious scenario. 

The intelligence report also poured cold water on the idea that Iran's opposition could quickly fill any power vacuum. US intelligence analysts assessed that the country's fragmented opposition movements remain too divided to seize control, regardless of whether Washington pursued limited strikes against leadership targets or a broader assault on state institutions.

Equally unlikely, according to current and former US officials familiar with the analysis, is the prospect of a spontaneous nationwide uprising. We could speculate that this possibility may have had a chance of some degree of success within the opening one or two days of the mass US-Israel bombing campaign, but it clearly didn't materialize.

Welcome to U.S. elite foreign policy discourse, where you have to stroke your chin and muse thoughtfully about whether it's a good thing to trigger state collapse and civil war in a nation of 90 million that didn't pose an imminent threat. https://t.co/EWCLpZrIwF

— Marcus Stanley (@MarcusMStanley) March 7, 2026

On this prospect WaPo quotes Brookings:

“There’s no other force within Iran that can confront the remaining power that the regime has,” Suzanne Maloney, an Iran scholar and vice president of the Brookings Institution, told The Post. “Even if they’re not able to project that power very effectively against their neighbors, they can certainly dominate inside the country.”

The National Intelligence Council synthesizes the analytical work of all 18 US intelligence agencies, and produces classified estimates meant to guide policymakers on major geopolitical risks.

Much of the American public, raised on Hollywood movies, tends to have an overblown and inaccurate understanding of US intelligence agencies like the CIA. While the CIA certainly has a very powerful and secretive covert, operations side (and an even tinier Ground Branch)  - the bulk of its personnel and overseers/top officials are analysts. So there is an overt side and a covert side, with the analyst side tasked with providing the IC and White House with a 'realistic' picture of the world, ideally devoid of policy or ideology. Their job is also often to 'game out' all worst possible scenarios, given a certain course of action.

The report says the prospect of Iran’s fragmented opposition taking control of the country is “unlikely,” raising doubts about Trump’s declared plan to “clean out” Iran’s leadership structure and install a ruler of his choosing pic.twitter.com/YaHwgoWB9d

— John Hudson (@John_Hudson) March 7, 2026

Meanwhile, the White House has not said whether Trump was briefed on the assessment before approving the operation. But likely such an assessment would have made it into the CIA's daily briefing for the president, also given reports from last week that the Pentagon also tried to inject some realism in terms of the 'unknowns' once Tehran is attacked.

Tyler Durden Sat, 03/07/2026 - 23:00

Explosion Hits US Embassy In Oslo

An explosion struck the US Embassy in Oslo, Norway Sunday morning, causing minor damage to the facility and no reported injuries.

The blast, which struck around 1:00 a.m. local time, occurred at the entry to the consular section, according to police spokesperson Mikael Dellemyr in a statement to public broadcaster NRK. 

"We've determined that an explosion ​hit the American embassy," he said. 

BREAKING: Officials say explosion was at the consular entrance to the U.S. Embassy in Oslo, Norway. - NRK pic.twitter.com/BmUfmefCYA

— Open Source Intel (@Osint613) March 8, 2026

Police separately said that they don't have any idea what caused the blast or who was involved.

"The police are in a dialogue with the embassy and there ​are no ​reports of ⁠any injured persons," they said in a statement. 

Tyler Durden Sat, 03/07/2026 - 22:25