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Deadlocked At Square Zero: Very First Line Of Iran's Latest Proposal 'Unacceptable,' Trump Says

Deadlocked At Square Zero: Very First Line Of Iran's Latest Proposal 'Unacceptable,' Trump Says

Tehran and Washington are truly not just back to square one, but it's as if no rounds of dialogue - direct or indirect - have even taken place. It's more like being back at square zero - and the US President has just acknowledged it.

President Trump told reporters aboard Air Force One Friday while departing Beijing that even the very first first sentence of Iran's latest proposal was "unacceptable" and blamed the Iranians for backtracking on the nuclear issue.

The first sentence was an “unacceptable sentence, because they have fully agreed no nuclear, and if they have any nuclear of any form, I don’t read the rest,” he said, stressing that he remains unsatisfied with the "level of guarantee from them."

Trump's remarks center on his allegation that Iran agreed to give up its "nuclear dust" but then quickly “then they took it back" - but then stated his view that Tehran will eventually agree to it anyway.

"I looked at it, and I don't like the first sentence. I just throw it away," Trump said.

via Associated Press

He once again in the comments called for Iran to completely abandon any nuclear capability, insisting there can be "no nuclear of any form." He described: "You've got to get all the fuel out and no more production. You have to get everything."

Trump has said China's President Xi Jinping is in full agreement that Iran should not have a nuclear weapon:

According to Trump, Iranian representatives acknowledged only the United States and possibly China possess the specialized equipment necessary to remove radioactive debris from the damaged sites.

"They said the only one that can remove it is China or the U.S.," Trump said. "They said you were right. It is a complete obliteration."

The president has said the nuclear material is now "entombed" under ground after nuclear sites were "obliterated" - from bombing operations last June and this latest round of US-Israeli attacks in February through March and early April.

Also this week while in China Trump told Fox News in an interview that he did not underestimate the situation in Iran, despite the constantly shifting and expanding timeline and stated goals within the early weeks of Operation Epic Fury. 

TRUMP TO FOX: DIDN'T UNDERESTIMATE ANYTHING ON IRAN

Meanwhile, Iranian Foreign Minister Abbas Araghchi said on Friday that the topic of uranium enrichment "is currently not on the agenda of discussions or negotiations," but will be addressed in later stages, as cited in Tasnim.

On China and whether President Xi agreed to commit to pressuring the Iranians to reopen the Strait of Hormuz, Trump said Friday "we don’t need favors" but that "we may have to do a little cleanup work."

"We had a little month-long ceasefire, I guess you’d call it, but we have a blockade that’s so effective, that’s why we did the ceasefire," he said, after suggesting that the conflict with Iran could continue.

Tyler Durden Fri, 05/15/2026 - 16:15

DHS Pushes Forward With Large-Scale Warehouse Immigration Detention Hubs

DHS Pushes Forward With Large-Scale Warehouse Immigration Detention Hubs

Via American Greatness,

The Department of Homeland Security (DHS) is continuing efforts to transform warehouses into large-scale immigration detention centers despite a growing number of politically motivated lawsuits.

Officials with US Immigration and Customs Enforcement (ICE) recently discussed plans to award contracts for construction and operations at warehouse sites in San Antonio and near El Paso, according to people briefed on the internal meetings. The administration is also examining how to continue work at a site near Hagerstown, Maryland, while complying with a court order limiting construction activity there.

The warehouse initiative has become a central part of the Trump administration’s broader deportation agenda, with officials arguing the facilities will allow ICE to process and detain illegal immigrants more efficiently through centralized hubs capable of housing large numbers of detainees.

Critics from both political parties have attacked the proposal, while several states have filed lawsuits claiming the administration failed to complete environmental reviews required under federal law.

Homeland Security Secretary Markwayne Mullin ordered a review of the estimated $38 billion project after taking office earlier this year. The plan was originally launched under former DHS Secretary Kristi Noem.

The administration appears determined to move forward with the project despite the legal challenges. ICE is reportedly preparing environmental assessments for the two Texas sites, with the goal of having both facilities operational by early 2027.

A DHS spokesperson said the department is reviewing policies and proposals adopted before Mullin assumed leadership and intends to work with local communities, including some in areas that strongly supported President Donald Trump.

Tyler Durden Fri, 05/15/2026 - 15:55

SpaceX Reportedly Chooses Nasdaq And "SPCX" Ticker For Mega IPO

SpaceX Reportedly Chooses Nasdaq And "SPCX" Ticker For Mega IPO

Elon Musk's rocket company, SpaceX, has reportedly selected Nasdaq for its long-awaited IPO and is targeting a June 11 pricing, followed by a June 12 debut under the ticker "SPCX," according to a Reuters report released late in Friday's U.S. cash session.

Immediately after the report, odds for "SPCX" on the Polymarket bet, "What will SpaceX's public ticker be?" soared to nearly 100%.

//--> //--> Will SpaceX's public ticker be another ticker?
Yes 97% · No 3%
View full market & trade on Polymarket

In April, SpaceX confidentially filed for an IPO with the SEC and is planning to disclose its prospectus as soon as next week, according to CNBC.

SpaceX's IPO could raise upwards of $75 billion for the rocket company and dwarf Saudi Aramco's $29 billion debut in 2019. The money raised would be used to fund an "insane flight rate" for the Starship rocket and to push ahead with deploying orbital data centers in low Earth orbit. The company's valuation stands at around $1.75 trillion.

The timing comes amid a broader reopening of the IPO window for AI firms, with major chatbot startups such as OpenAI and Anthropic increasingly viewed as potential second-half candidates.

Goldman's Tony Pasquariello offered additional insight on the upcoming SpaceX IPO:

In most every single client meeting that I have, the question of how the tape will absorb a series of mega IPOs comes up.

While understanding that potentially adding trillions of dollars of market cap is worth discussion, as mentioned a few times recently, I'd argue there's good reason to be optimistic here (I'm a taker of opposing views).

I'll add a few points to the running conversation here:

i. to level set, at $77tr of market cap, the US equity asset class is immense (the next closest country is China at $12tr).

ii. in 1999, 380 IPOs rolled off the assembly line; for 2026, GIR currently expects 100.

iii. asset size is one consideration, yet asset quality is another -- I remember 1999, and let's just say comprehensive asset quality didn't stand the test of time.

Wall Street is certainly hungry for IPOs after a prolonged drought. This week, we saw AI chipmaker Cerebras surge nearly 70% in its debut.

SpaceX's IPO filing could come around the 12th test flight of the Starship rocket, expected as early as next Tuesday.

Tyler Durden Fri, 05/15/2026 - 15:40

Uranium Gap Worsens: Nuclear News Roundup

Uranium Gap Worsens: Nuclear News Roundup

Goldman analyst Brian Lee reviews headlines across the nuclear industry for March (full note here).  

New reactor progress and announcements

North America

  • 4/16/2026 – Canada: Bruce Power has signed an MoU with SaskPower to share its experience in large-scale nuclear reactors, including project development and long-term operations, as Saskatchewan evaluates large reactor technologies alongside its SMR program. The agreement formalizes information-sharing and aligns provincial and federal nuclear strategies.
  • 4/24/2026 – United States: Duke Energy's Robinson nuclear power plant has been cleared for extended operation to 80 years, after the US Nuclear Regulatory Commission completed its fastest-ever subsequent license renewal review. The approval allows the 759 MW Robinson Unit 2 in South Carolina to operate until 2050, under new accelerated federal timelines.
  • 4/29/2026 – United States: The US NRC has approved subsequent license renewals for St Lucie Units 1 and 2, clearing the Florida Power & Light plant to operate for up to 80 years, with Unit 1 licensed to 2056 and Unit 2 to 2063. The decision follows ageing-management reviews for the extended operating period and secures long-term operation of the two pressurized water reactors.
  • 5/5/2026 – United States: Brookfield and The Nuclear Company have formed a JV to manage the potential completion of the two VC Summer AP1000 units in South Carolina, supporting due diligence and execution if the project proceeds, subject to approvals and a final investment decision.

Europe

  • 4/10/2026 – Czechia: ČEZ is exploring extending the operating life of its four Dukovany reactors to up to 80 years, having launched a preparatory process for long-term operation beyond the current 60-year plan, while also assessing potential life extensions at Temelín, subject to ongoing safety and economic evaluations.
  • 4/10/2026 – Lithuania: Lithuania has received regulatory approval to begin dismantling reactor channels at Ignalina Unit 2, after completing the same work at Unit 1, with dismantling and decontamination scheduled to start at end-2026 following preparatory activities by state-owned decommissioning company Altra.
  • 4/16/2026 – Bulgaria: Bulgaria’s energy minister has said the new Kozloduy Units 7 and 8 should be built at fixed prices, citing past nuclear projects where cost overruns derailed delivery, as the government seeks tighter cost control while advancing plans for two Westinghouse AP1000 reactors at the site.
  • 4/30/2026 – Belgium: Belgium is in talks with Engie to take over its full nuclear fleet, covering all seven reactors, with decommissioning work paused while negotiations continue. The move would allow the state to keep options open on life extensions and future nuclear capacity.

Asia and other

  • 4/9/2026 – India: EDF and NTPC have signed a non-binding MoU to explore cooperation on new nuclear projects in India, including assessing EDF’s EPR technology, localisation opportunities, project economics, training, and potential sites, following approvals from Indian government ministries.
  • 4/13/2026 – South Korea: Saeul Unit 3 has started up after achieving first criticality on 12 April, with KHNP confirming the APR-1400 reactor entered its initial start-up phase following completion of all required pre-operational inspections; output will be ramped up through testing ahead of commercial operation in the second half of 2026.
  • 4/16/2026 – Japan: Kashiwazaki-Kariwa 6 has resumed commercial operation, becoming the first TEPCO-owned reactor to return to service since Fukushima, after Japan’s regulator completed final pre-operational inspections. The 1,356 MWe ABWR, offline since 2012, re-entered commercial operation on 16 April following resolution of technical issues encountered during restart testing.
  • 4/20/2026 – Kazakhstan: Kazakhstan has adopted a nuclear strategy targeting at least three plants by 2050, with a fourth under consideration to meet rising power demand; the plan also includes assessing SMRs and replacing coal capacity with nuclear to bolster energy security and meet climate goals.
  • 4/20/2026 – China: Taipingling Unit 1 has entered commercial operation, with CGN confirming the 1,116 MWe Hualong One (HPR1000) reactor began service on 19 April after completing commissioning tests. It is the first of six units planned at the Taipingling site in Guangdong province.
  • 4/28/2026 – Bangladesh: Fuel loading has begun at Bangladesh’s first nuclear power plant, with 163 fuel assemblies being loaded into Rooppur Unit 1, marking the start of the reactor’s start-up and commissioning phase following issuance of its operating licence earlier in April.
  • 4/29/2026 – Russia: Russia’s nuclear regulator Rostekhnadzor has approved the readiness of Kursk II Unit 1, issuing a certificate of compliance that confirms the 1,250 MWe VVER-TOI reactor meets safety and design requirements and is fully ready for commissioning and market entry.
  • 4/29/2026 – China: San’ao Unit 1 has entered commercial operation, with CGN confirming the 1,116 MWe Hualong One reactor completed commissioning on 29 April 2026. It is the first of six units planned at the Zhejiang site.
  • 5/6/2026 – China: Fuel loading has been completed at two new Chinese reactors, with 177 fuel assemblies inserted at Taipingling Unit 2 and Changjiang Unit 3, both Hualong One units, marking their transition into the nuclear commissioning phase ahead of start-up.
  • 5/7/2026 – Turkey: Turkey’s nuclear regulator has approved commissioning work at Akkuyu Unit 2, allowing pre-fuel-loading tests to begin at the second VVER-1200 unit of the Akkuyu plant.

SMR announcement tracker

  • 4/8/2026 – Sweden: GE Vernova Hitachi Nuclear Energy and AFRY have agreed a non-exclusive collaboration to support deployment of the BWRX-300 SMR, with AFRY providing engineering, advisory and licensing support to enable scalable SMR projects across Europe, including support for licensing in Sweden.
  • 4/13/2026 – UK: The UK has signed a contract to deliver its first SMRs, with Great British Energy – Nuclear and Rolls-Royce SMR agreeing to begin work on three units at Wylfa (Anglesey), enabling site design and early procurement ahead of a final investment decision.
  • 4/14/2026 – Netherlands: A Dutch nuclear new-build partnership has been announced, with Mammoet and ULC-Energy signing a cooperation agreement to streamline construction of new nuclear facilities in the Netherlands. The collaboration focuses on modular construction and heavy-lifting expertise, and is aligned with government plans for new large reactors and future SMR deployment.
  • 4/14/2026 – United States: The US Air Force has named Buckley (Colorado) and Malmstrom (Montana) as potential microreactor sites, with deployment under the ANPI programme targeted for 2030 or earlier.
  • 4/16/2026 – United States: The NRC has received an application to build a KRONOS microreactor at the University of Illinois, with the construction permit application filed on 31 March in partnership with NANO Nuclear Energy.
  • 4/17/2026 – Netherlands: A Dutch consortium has signed an MoU to advance construction of Europe’s first commercial molten salt reactor, covering a non-nuclear test facility and pilot programme, a nuclear demonstrator at Petten, and a 100 MWe commercial MSR in Zeeland, targeted for operation by 2034.
  • 4/20/2026 – Poland: OSGE has signed a letter of intent with Poland’s Industrial Development Agency to prepare a BWRX-300 SMR project at Stalowa Wola, setting the framework for a future investment agreement.
  • 4/20/2026 – United States: Kairos Power has broken ground on the Hermes 2 demonstration reactor in Oak Ridge, Tennessee, the company’s first commercial-scale and power-producing Generation IV reactor. The project will supply up to 50 MW to the Tennessee Valley Authority grid under Kairos’s agreement with Google, and builds on lessons from the non-power Hermes 1 reactor now under construction.
  • 4/24/2026 – United States: The US Air Force has selected Radiant, Westinghouse Government Services, and Antares as microreactor developers under the ANPI programme, pairing them with Buckley (Colorado), Malmstrom (Montana), and Joint Base San Antonio (Texas), respectively, with a goal of deploying at least one reactor by 2030 or earlier.
  • 4/27/2026 – Czechia: ČEZ has signed an early-works contract with Rolls-Royce SMR for a proposed SMR at the Temelín nuclear site, enabling site-specific design, licensing and permitting preparation. The agreement covers early engineering only and is not a final investment decision or start of construction.
  • 4/27/2026 – France: Stellaria and France’s CEA have signed a letter of intent to study building an experimental molten salt reactor at Cadarache, covering the 100 kW Alvin experimental MSR and a future 10 MWe prototype (MegAlvin) as part of a feasibility study for an Alpha basic nuclear installation at the site.
  • 4/30/2026 – Canada: Canada plans to release a new Nuclear Energy Strategy by end-2026, alongside funding to assess Canadian-controlled microreactors for remote and northern defence sites, with the strategy focused on new builds, exports, fuel supply, and nuclear innovation.
  • 5/1/2026 – Canada: OPG has installed the basemat foundation module at the Darlington SMR site, marking a key construction milestone for the G7’s first SMR. The 953-tonne modular basemat was placed 35 metres below ground, advancing construction of the first BWRX-300 unit.
  • 5/5/2026 – Sweden: Blykalla and ABB have signed a Joint Development Agreement to deepen cooperation on lead-cooled SMRs, covering joint development of SEALER reactor elements with ABB as a key partner for automation and control systems.
  • 5/7/2026 – United States: US pilot SMR licensing has advanced on two fronts, with the DOE approving the Documented Safety Analysis for Aalo Atomics’ Aalo-X experimental reactor, and the NRC approving the Principal Design Criteria topical report for Oklo’s Aurora powerhouse, marking key regulatory milestones for both projects.
Global reactor critical updates

In the month of April, there have been few changes to new reactor construction starts, grid connections, shutdowns, or restarts.

Global reactor construction tracker

Fuel announcements

  • 4/8/2026 – Russia: Testing of innovative VVER fuel has begun at Russia’s Balakovo 1, where three pilot fuel assemblies with chromium-coated cladding and MOX fuel rods were loaded into a VVER-1000 reactor.
  • 4/9/2026 – France: Framatome has signed an agreement with four EU utilities (ČEZ, Fortum, MVM Paks NPP, and Slovenské elektrárne) to develop a fully European VVER-440 fuel design, supporting fuel-supply diversification and reduced reliance on Russian fuel. First deliveries targeted for the early 2030s.
  • 4/14/2026 – Poland: Poland’s SGE has signed cooperation agreements with Spain’s Enusa and GNF Enusa to strengthen nuclear fuel strategy, procurement, and supply-chain development in support of BWRX-300 SMR deployment across Europe.
  • 4/17/2026 – United States: ConverDyn is studying a second US uranium conversion plant (“Metropolis 2.0”), alongside an expansion of its existing Metropolis Works facility, with feasibility work under way.
  • 4/28/2026 – United States: Ur-Energy has begun ISR uranium mining at its Shirley Basin project in Wyoming, with production under way at Mine Unit 1.
  • 5/1/2026 – India: India’s Atomic Energy Regulatory Board has granted an operating licence to the NFC-Kota fuel plant in Rajasthan, enabling production of ~500 tpa of natural UO₂ fuel to support indigenous 700 MWe PHWRs.
  • 5/6/2026 – UK: Urenco has completed its first LEU+ trial run at the Capenhurst site, producing uranium enriched to ~7% U-235, confirming capability to supply LEU+ (5–10%) with commercial availability planned soon.
  • 5/8/2026 – Japan: Japan shipped ~1.7 tonnes of HALEU to the United States, marking the largest international uranium transfer handled by the NNSA, to support the US HALEU Availability Program and advanced reactor fuel supply.
Uranium pricing and volume trackers

Spot pricing steadies, supported by Sprott activity. Spot U₃O₈ prices rebounded through mid April following late March softness, rising from the low $80s to the mid and high $80s, briefly touching ~$87/lb around WNFC Monaco. Momentum faded toward late April and early May, with prices drifting modestly lower into the mid $80s.

Term pricing stable. Term uranium pricing remained firm through April and into early May, holding around ~$90/lb. Market engagement stayed active, supported by ongoing utility discussions around mid and long term coverage. Floors largely holding in the mid $70s and ceilings extending into the low $130s for long dated deliveries.

Key supply/demand and pricing charts

Updating supply-demand model: We update our uranium supply/demand model to include updated forecasts for SMR deployments. We are conservatively anticipating SMR deployments reach nearly 2GW in 2030, and grow at 2GW-3GW per year through 2045, representing cumulative deployments of ~46GW in 2045. This represents a 6% uplift to our 2045 nuclear power generation forecast. Based on our fuel burn assumptions, we estimate these deployments will create a uranium demand need of ~62mn lbs in 2045, or 17% upside to our 2045 forecast.

Revisions to power generation forecast. We have maintained our large reactor forecast, but now include estimates for global SMR deployments between 2026-2045. We believe these estimates are relatively conservative. As a result of our changes, we see an expanding deficit over the medium-term. Our forecast does not include nuclear uprates to existing facilities, which provides further upside.

More in the full note available to pro subs.

Tyler Durden Fri, 05/15/2026 - 15:25

UCLA Medical School Accused Of Racial Discrimination In Defiance Of Supreme Court

UCLA Medical School Accused Of Racial Discrimination In Defiance Of Supreme Court

Authored by Jonathan Turley,

We previously discussed a disturbing account of how medical students at the David Geffen School of Medicine at the University of California, Los Angeles (UCLA) were subjected to a bizarre class where one of the university’s “activists-in-residence” showered them with anti-Semitic postings and racist rhetoric. Now, the Justice Department has found that the university engaged in systemic racial discrimination in the admission of medical students. Given the university’s history, it is hardly surprising, but it remains unclear how the university will respond to the findings.

The DOJ’s Civil Rights Division announced that the medical school violated Title VI of the 1964 Civil Rights Act by giving preferential treatment to black and Hispanic applicants.

The investigation followed the Supreme Court’s 2023 ruling in Students for Fair Admissions v. Harvard, which barred race-based admissions.

In the DOJ’s “Findings” letter, black and Hispanic admits in some years averaged MCAT scores in the 66th to 72nd percentile, while Asian and white students averaged scores in the mid-to-high 80th percentiles.

Assistant Attorney General Harmeet Dhillon indicated that the Justice Department found that UCLA medical school leadership discussed how to achieve “diversity goals” and other strategies after the Supreme Court ruling.

After the historic ruling in the Harvard and North Carolina cases barring the use of racial criteria in admissions, administrators and academics admitted what they had long denied: that race was having a major role in admissions.

In anticipation of the rulings, many schools, including the California system, eliminated standardized testing. Without objective scores, there is less ability to identify the use of non-scholastic criteria for admissions. By eliminating or devaluing standardized testing, admissions offices can use the more subjective essays to achieve the same race-based results.

I wrote about how administrators were already preparing to use essays as an indirect way to achieve the same identifications and preferences in admissions.

The essay “prompts” encourage students to effectively self-identify by discussing incidents where they faced discrimination.

The shift to the essays would allow the removal of high-scoring students while elevating those with lower scores. That prediction was quickly confirmed, as top candidates were rejected based on their essays, while schools used essays to flag their backgrounds.

Faculty and administrators at UCLA and other schools remain adamant in using race-based admissions. They simply justify discrimination as equity and diversity. 

This is the same school that required medical students to sit through a raving lecture from “a formerly unhoused and incarcerated poverty scholar who prefers to keep their face covered in public.”

In her two-hour lecture, Gray-Garcia dismissed modern medicine as “white science” and told the medical students to engage in a prayer to “mama Earth.” Students were expected to pray and affirm that “Mama Earth was never meant to be bought, sold, pimped or played.”

The scene captured the erosion of academic integrity at schools like UCLA as woke agendas overwhelm the curriculum. After yielding to that agenda for years and allegedly struggling to evade the Supreme Court decision, UCLA remains a hardened silo of woke priorities and policies. It will take the threat of the most serious consequences to dislodge this academic administration. In the end, they may yield or draw out the conflict in the hope that a new Democratic administration will allow them to return to racially discriminatory admissions.

Tyler Durden Fri, 05/15/2026 - 15:10

BWXT Holds A Realistic Path To Expanding Nuclear Capacity

BWXT Holds A Realistic Path To Expanding Nuclear Capacity

Ananym Capital is urging BWXT to commercialize its reactor production capabilities. The investor is looking for BWXT to bring back one of their old small modular reactor (SMR) design, mPower, that was abandoned in 2017. 

BWXT already produces one to three reactors each year for U.S. aircraft carriers and submarines. That steady cadence gives it unmatched experience turning complex nuclear hardware into delivered hardware on a predictable basis. 

With only a handful of AP1000 units built worldwide, no other American players can claim comparable low technology risk when it comes to actual reactor production. 

This stands in contrast to the wave of microreactor developers pitching novel concepts. Many remain years from full-scale deployment, still navigating licensing for core designs and advanced materials with minimum operating history. 

BWXT does not need to invent a new reactor architecture to matter. It can adapt existing pressurized water technology it has built and serviced for decades, then apply it where demand is clearest: data centers and industrial users seeking reliable, always-on power.

Ananym is pushing the revival of an old SMR design BWXT was working on with Bechtel in the early 2000s. The project was closed down after the program struggled to bring off-takers on board. 

While the idea makes sense with BWXT being one of the more experienced reactor developers in the world, it would be a far less complicated effort to simply do more of what they're already good at

Instead of having to design a new reactor that has not seen operations yet, the company could instead increase the production rate of their naval reactor line for use in other government applications or in the commercial industry

The concept is not without its headaches, as we discussed previously with a similar idea from HGP Intelligent Energy. The reactors will likely require some amount of redesign to work at lower uranium enrichment levels. 

Whether BWXT decides to revive the shelved SMR project or simply do more of what they already are good at, the general idea just makes too much sense: stop trying to reinvent the [nuclear] wheel.

Tyler Durden Fri, 05/15/2026 - 14:25

Home Prices Register Biggest Annual Increase In More Than A Year: Report

Home Prices Register Biggest Annual Increase In More Than A Year: Report

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

The median home sales price in the United States jumped 2.4 percent in April from a year ago, the largest increase since March 2025, real estate brokerage Redfin said in a May 12 statement.

A home for sale in Austin, Texas, on April 24, 2025. Brandon Bell/Getty Images

The company attributed the price increase to more buyers entering the housing market amid a stabilizing job market. In April, the United States added 115,000 jobs, well above the expected 62,000.

“The April jobs report showed stronger-than-expected hiring, reducing recession risk. This likely helped fuel a pop in housing demand. Pending home sales hit the highest level since February 2023 last month, rising 2 percent from the month before—the largest increase since March 2025,” Redfin said.

In addition to buyers coming off the sidelines, sellers are also doing the same, with active listings of homes for sale in April hitting the highest level since March 2020.

Lower mortgage rates are incentivizing prospective buyers to consider purchases. Last year, the weekly average rate of the 30-year fixed-rate mortgage had hit an annual peak of 7.04 percent in mid-January, according to data from Freddie Mac.

The rate has come down to 6.37 percent for the week ending May 6. It had declined below the 6 percent level in February, the first time this has happened since September 2022.

Amid the jump in home sale prices in April, discounts offered on home purchases are tapering, Redfin said.

Last month, the share of homes sold for less than their original listed price was 60.5 percent—the sixth straight month of decline. According to the brokerage, securing discounts is getting harder as demand grows and sellers price homes more competitively.

“Homebuyer demand increased significantly at the end of March following a relatively quiet period in January and February. This is the first time post-pandemic I’ve felt the frenzy and comeback of a true spring market,” said Dawn Kane, a Redfin Premier real estate agent.

“Still, sellers must maintain realistic pricing strategies. Market data and buyer activity indicate that overpriced homes remain on the market longer, while competitively priced properties sell more quickly and efficiently, often receiving multiple offers.”

In a May 6 post, real estate marketplace Zillow suggested that if mortgage rates were to fall back to the 6 percent range seen earlier this year, home sales figures could improve.

Prospective buyers who saw through last year’s markets now have more options and improved affordability while choosing their homes. Last month, the monthly mortgage payment on a typical U.S. home declined 3.4 percent year over year to $1,829, Zillow said.

Housing Construction, Improving Affordability

On the construction side, housing construction “bounced back” in March, with builders ramping up production, the National Association of Home Builders (NAHB) said in an April 29 statement.

NAHB Chairman Bill Owens said that the rebound suggests builders are responding to regional improvements in housing demand despite affordability challenges.

Privately owned housing construction starts had risen by 10.8 percent in March from a year back, according to April 29 data from the Census Bureau. This uptick in housing starts could be a positive signal that the sector may be stabilizing, Owens said.

Single-family starts drove much of the monthly increase, indicating that builders are cautiously ramping up production to meet persistent inventory shortages in the resale market,” said Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis.

“While this is an encouraging sign, the pace of construction is likely to remain measured as builders continue to navigate elevated financing costs and labor availability.”

The Trump administration has taken various measures to improve housing affordability.

In late April, the Department of Housing and Urban Development (HUD) and the Department of Agriculture revoked a policy on energy standards for newly built single-family and multifamily homes.

If the standards were enforced, home construction costs would have risen by $20,000 to $31,000, HUD said. This could have pushed many first-time buyers out of the housing market.

Last month, HUD announced that the Federal Housing Administration has joined with Fannie Mae and Freddie Mac to implement new mortgage credit score models that seek to make home buying more affordable.

This historic move is intended to lower costs for the American people after years of rising prices under the status quo credit score system,” the department said.

Tyler Durden Fri, 05/15/2026 - 13:45

Collum: Was Fed Chair Warsh Chosen For A Controlled Demolition?

Collum: Was Fed Chair Warsh Chosen For A Controlled Demolition?

Supposed monetary hawk Kevin Warsh, who was officially sworn in as the 17th Fed Chair earlier this week, will now face the dilemma of staying true to his hawkish roots or caving to his unabashed high-rate hating President. That is, of course, unless there’s a deeper plan at play…

Last night, Cornell professor Dave Collum hosted Michael Lebowitz and Stephanie Pomboy for a deep dived into ‘How F***ed Markets Are’ where Dave posited the theory that Warsh man be a demolition man for a managed crash.

Collum and co. also talked about the insane disconnect between the economy and financial markets… and why Pomboy has increasingly abandoned financial assets altogether in favor of gold and hard assets.

Dave’s Fed truther theory and other highlights from last night below:

Retail Retards

Collum warned that modern markets have become completely detached from traditional valuation discipline… but that reality will eventually set in.

“It’s my assertion that probably greater than 50% of the investors in the world don’t understand what valuation means… Everything’s a Bitcoin price now.”

Standard valuation metrics have compounded roughly 4% annually for 45 years and are now firmly in “the nosebleed section,” yet “nobody cares,” per Collum.

Classic warning indicators are now near historic extremes. Lebowitz noted that “CAPE is near its all-time high. It’s above the 1929 level and just short of the dot-com level.” He argued the bigger danger may actually be hiding in supposedly “safe” stocks like Walmart and Costco.

Pomboy has opted out of the mania altogether. How? Real assets.

“Markets can go on longer than you can remain solvent betting against it…. I finally just sort of resigned myself to buying gold… At the end of the day I have been outperforming those markets by only gold.”

Why Warsh?

Collum posed the question of Kevin Warsh as Trump’s Fed Chair pick. Trump regularly announces that interest rates are too high and yet picks the ostensible hawk of the bunch to lead the Fed? But that may be a facade, according to Lebowitz:

“I think Kevin Warsh and Jerome Powell are the same guy.” 

Lebowitz argued that the market may be projecting qualities onto Warsh that simply are not real. He acknowledged that Warsh currently sounds tougher, but there’s no way he’s gonna cut rates. “I thought he may come in and try to do 25 just to appease the president. There’s no way he could do that after the CPI and PPI data we had this week.”

Every Fed chair talks tough before markets crack (Greenspan was an Austrian/Ayn Rand-adjacent philosopher prior to his reign of easy money).

“Warsh was there in 2008, ’09 when they were introducing QE,” Lebowitz added. “Powell came off as very austere until the COVID hit the fan.”

Collum floated the darker theory that Warsh may have been chosen precisely because he is viewed as credible enough to oversee a painful reckoning. “What if Warsh’s assignment is ‘we need someone with the guts to usher this sucker down?’”

Check out the full debate for their deep dive into the ticking timebomb that are private credit markets and more. Also available on YouTube and Spotify.

 

Tyler Durden Fri, 05/15/2026 - 13:05

With 4,900 AI Data Centers, There's Likely One Coming To Your Neighborhood

With 4,900 AI Data Centers, There's Likely One Coming To Your Neighborhood

Authored by Mary Prenon via The Epoch Times (emphasis ours),

As artificial intelligence continues to permeate everyday life, the data centers needed to support the burgeoning technology are popping up across America - many close to residential areas. More than one-third of Americans now live within a few miles of at least one data center.

That proximity means many development projects are not going smoothly, as residents raise questions about the unknown effects on their resources. Both residents and developers who spoke to The Epoch Times pointed to transparency as a key issue.

The developers also said they are working to address residents’ concerns at the planning stage, adding safeguards to reduce water and energy requirements.

Meanwhile, grassroots opposition to data centers is gaining momentum going into the 2026 elections.

Built in Clusters

The United States currently has more than 3,100 data centers in operation and more than 1,800 in various stages of development, according to data provided by infrastructure intelligence and mapping platform Data Center Map.

Virginia, Texas, and California lead the nation in the number of data centers, according to the data. Virginia alone has a combined total of 711 currently operational, under-construction, and planned centers. Texas has a combined total of 544, and California, 333.

These data facilities are typically massive buildings housing information technology infrastructure, data-storage systems, and networking and processing equipment. They also require power subsystems, backup generators, and HVAC and cooling systems to prevent hardware from overheating.

According to a recent Pew Research Center analysis, 87 percent of existing data centers are located in urban regions, while 67 percent of planned data centers are targeted for construction in rural areas.

The analysis also reveals that 38 percent of Americans currently live within five miles of at least one operating data center.

“These structures tend to be built in clusters: Nine in 10 data centers are within five miles of another one,” the report notes. “As a result, a majority of Americans who live near one data center also live near at least one more.”

‘Wait a Minute’

According to Data Center Watch, community opposition to data centers is surging nationwide, shifting from individual zoning disputes into a national political force.

An estimated $152 billion in potential investment was blocked or delayed in 2025, including $98 billion in the second quarter alone—more than all disruptions combined since 2023 and affecting 20 projects, the research organization’s data show.

The activity accelerated sharply in the third and fourth quarters, with hundreds of activist groups across 42 states organizing to block the construction or expansion of data centers toward the end of the year.

We came together and said no, and I’m very proud of the outcry of average citizens to say ‘wait a minute’ before going ahead with this,” Danei Edelen, who heads up the grassroots group Southern Ohio Responsible Development (SORD), located in Brown County, told The Epoch Times. Her hometown of Mount Orab, about 40 miles east of Cincinnati, is the latest target for a hyperscale data center.

Members of Southern Ohio Responsible Development pose with a sign opposing a planned data center in Mount Orab, Ohio, in March 2026. Mount Orab, about 40 miles east of Cincinnati, is the latest target for a hyperscale data center. Courtesy of Danei Edelen/Southern Ohio Responsible Development

“Some of these centers can use up to 5 million gallons of water, which is equivalent to a small town,” Edelen said. “As for the noise, it can be like having a motorcycle running 24/7.”

The group also has concerns about health hazards that could result from possible air pollution, water contamination, or exposure to high-voltage electricity.

With influence from SORD and other Brown County residents, the local government recently issued a six-month moratorium on the project, which could potentially encompass nearly 1,200 acres.

In an aerial view, the Elemental Critical Data Center facility is seen in Austin, Texas, on April 8, 2026. Virginia, Texas, and California lead the nation in the number of data centers, according to data provided by infrastructure intelligence and mapping platform Data Center Map. Brandon Bell/Getty Images

Clayton Tucker, secretary of the Texas Farmers Union and Democratic candidate for Texas agriculture minister, said he’s concerned about insufficient water for irrigation.

“It can cost up to $40,000 to drill for a new well, and some of these centers are water hogs, using incredible amounts of water here in the Dust Bowl,” he told The Epoch Times.

He said water levels in some wells in the state have already dropped by 25 feet.

Tucker also worries about the escalation of utility bills.

“Some of these centers are like building an entire new city, and power usage is expected to triple or quadruple by 2032,” he said.

Tucker has spoken with farmers in other states who have seen a recent influx of data centers.

He noted that although state and federal governments have had little involvement, local governments have been sensitive to their concerns. Action by several bipartisan city councils has managed to pause plans for data centers in Athens and San Marcos, Texas.

“Our main goal is to delay these projects and wait for better technology,” Tucker said. “Having centers that use no water and computer chips that use a fraction of the power with little or no noise would resolve a lot of resource issues.”

SORD is ready to go one step further by proposing a state constitutional amendment that would ban hyperscale data centers. The group is working to gather 413,000 valid signatures to qualify for a ballot measure in the next election.

The Biggest Problem

Jennifer Dunphy, public health consultant and author of “The Toxin Handbook,” told The Epoch Times that plans are already on the books for a new large data center within five miles of her home in Orange County, California. Her concern is more about what these centers could transform into for the future.

The big question is about where these centers are headed,” she said. “As they need more and more power and resources, they’ll grow and become more complex, possibly adding health effects in the future.”

Currently, she noted, there’s no evidence directly linking data centers to any specific health effect, but there are concerns about electromagnetic fields and air pollution affecting people with co-morbidities such as chronic obstructive pulmonary disease, asthma, and certain heart conditions, or the elderly.

Dunphy also believes the likelihood of water contamination from data centers is slim.

“I would be more worried about petrochemical or manufacturing centers producing chemical runoffs,” she said. “Then it becomes more of a concern.”

The biggest problem, she noted, is that there have been no large-scale studies about data centers and their impacts on local communities.

“We don’t know enough about these to have them in our backyard,” she said. “And no, I am not in favor of a data center near my home.”

Edelen said her group is not against responsible development.

“We just want more time to study the impact this may have on the community,” she said.

Emma Cox is the chief commercial officer for ClimeCo, a Houston-based global environmental advisory and decarbonization firm helping builders develop more responsibly by reducing carbon emissions and greenhouse gases.

“Data centers are going up incredibly quickly, and my caution is that some developers are not considering responsible growth,” she told The Epoch Times. “As a result, I believe both the environment and human health could suffer.”

The Texas Farmers Union seeks more openness and honesty when data centers are proposed.

“A lot of times, developers don’t tell you the whole truth,” Tucker said.

A local resident holds a sign during a public meeting in Canaan Valley, W. Va., on June 30, 2025. Data centers’ large power consumption and water use remain top concerns for residents when new projects are considered. Ulysse Bellier/AFP via Getty Images

A Redfin-commissioned, Ipsos-conducted survey found that 47 percent of residents object to the construction of AI data centers in their neighborhoods, while 38 percent support the projects.

The survey also showed that younger Americans are more likely to support building data centers in their “backyard.” Politically, 49 percent of Republicans and 36 percent of Democrats support the construction of data centers.

‘A Convenient Scapegoat’

Daren Shumate, CEO of Shumate Engineering in Tysons, Virginia, has been involved in data center construction since 1998.

“From a developer’s viewpoint, there are two major requirements for site selection of data centers: ample power availability and the local jurisdiction that will allow you to build,” he told The Epoch Times.

While he acknowledged that these mega centers are water- and energy-intensive, he said safeguards are being built into plans for new facilities.

“Data centers are a convenient scapegoat when it comes to issues concerning water and power,” he said. “Many of the newer centers are now relying on air-cooled chillers or refrigeration as opposed to evaporative water systems and cooling towers. Those designs call for very low water usage.”

Substations and transformers are seen at a Digital Realty data center in Ashburn, Va., on Nov. 12, 2025. Daren Shumate, whose company has worked in data center construction for decades, said new facilities are being built with water-saving designs and energy safeguards. Andrew Caballero-Reynolds/AFP via Getty Images

As a result, he said, a data center should have little effect on a community’s water supply or water rates.

Regarding power supply, Shumate said electricity usage varies depending on the size of the data center. It can range from 10 megawatts for smaller facilities to 200 megawatts for hyperscale centers, typically operated by Big Tech firms such as Microsoft, Amazon, Apple, and Oracle.

In some cases, these centers require additional buildings for cooling and other operations, often requiring another 100 megawatts per building, Shumate said.

“Unlike a regular office building that usually runs from 8 a.m. to 5 p.m., a data center operates 24 hours a day and seven days a week. You turn it on and never turn it off,” he said.

While acknowledging concerns about power grid failures, Shumate said developers are taking steps to mitigate them.

“Most large data centers are now required to have back-up battery systems that will provide an uninterrupted power supply, and these batteries are constantly charging,” he said. “That means the centers won’t be putting any extra strain on the power companies when an outage occurs.”

Shumate also believes the expansion of data centers will have minimal effect on utility rates for local consumers.

“Local utility firms will be earning a huge amount of money from these centers, which they can use to improve their infrastructure without adding to consumer bills,” he said. “Better design techniques using LED lighting, insulation, windows, and other materials are designed to stabilize data center electricity usage.”

He also noted that many developers are establishing building criteria to ensure data centers are not located adjacent to schools or residential properties.

“While mechanical units can produce noise, developers can design systems to mitigate the data center noise,” he said.

Harry Sudock, chief business officer of CleanSpark, a Las Vegas-based data-center developer, has handled land acquisition and data center construction for nearly 40 years.

“Power availability and speed to delivery are actually more important than land prices when choosing a location,” he told The Epoch Times. “We also look for areas where there’s already a significant amount of electrical infrastructure in place, including former manufacturing hubs.”

Read the rest here...

Tyler Durden Fri, 05/15/2026 - 12:45

US Gasoline Inventories Plunging On Surging Exports, Resilient Demand

US Gasoline Inventories Plunging On Surging Exports, Resilient Demand

Prompt Brent/WTI crude nearby futures increased by 5/7% week-over-week to $105/101 as flows through the Strait of Hormuz remained very low and on limited signs of progress on a US-Iran deal.

Meanwhile, as global oil inventories collapse at a record pace yet sliding Chinese demand and strategic releases from Beijing keep crude prices relatively stable, Goldman writes that the US gasoline market has become very tight, with inventories drawing at a rapid average pace of 0.7mb/d since April 1st to 5% below their historical seasonal median this week.

This has been driven by a combination of:

  • Surging net exports demand. US gasoline net exports are up 0.34mb/d year-over-year (4-week average) 

  • Resilient domestic demand. Gasoline demand is resilient at just 0.2mb/d below its year-ago level (no demand destruction yet) and we are now entering the summer driving season.

  • Price incentives to shift production to distillates. Strong jet fuel and diesel margins are incentivizing refineries to increase yields of those products. 

On the pricing side, wholesale gasoline prices in the US are approximately 15% ($21/bbl) higher than in Asia and Europe (Exhibit 1 above), and US retail prices are just $0.5/gal below their all-time high.

Goldman says that while it's not the bank's base case, the probability of US oil export restrictions likely rises with US retail gasoline prices. 

Turning to oil, the IEA estimates in its latest Oil Market Report (OMR) an April deficit of 5.3mb/d, suggesting that the deficit may be less large than most had estimated last month, driven by:

Slightly lower IEA demand. Since the beginning of the crisis, the IEA has cumulatively (May - Feb OMR) downgraded its estimate of April demand by 3.1mb/d to 100.4mb/d (vs. a slightly smaller downgrade of 2.9mb/d in Goldman's balance).

  • By product: Net cumulative downgrades by the IEA were largest (in mb/d terms) for LPG and ethane (11%), naphtha (13%), and jet and kerosene (7%) for which Goldman has also been seeing the highest risks of scarcity of supply. 
  • By region: Net cumulative downgrades were largest for the Middle East (11%), China (5%), EM Asia ex China ex India (5%), and OECD Asia Oceania (7%). Notably, the IEA upgraded US demand from last month’s OMR by 0.5mb/d on resilient diesel and gasoline demand.

  • Less large IEA drop in Middle East Supply. The IEA estimates Gulf (defined as Iran, Iraq, Kuwait, Qatar, Saudi Arabia, UAE) crude supply in April at 15.0mb/d, which is 4.0mb/d higher than the previous Goldman balance estimate (11.0mb/d) and 1.2mb/d higher than OPEC secondary sources (13.8mb/d).
    • The IEA supply beat was driven primarily by Iran and the UAE, likely reflecting less binding storage constraints than expected due to untrackable storage capacity.

The IEA reports that SPR releases from IEA countries averaged 2.1mb/d in April (but picked up significantly in the second half of the month). This has been a significantly larger offset for crude than for refined products — of the 90mb of total government inventories released since March 11th, 82mb are crude oil, while only 8mb are refined products.

US production in 2026 Q1 also surprised to the upside, with the modest beats concentrated in oil production by E&Ps (+2.1%) and liquids production by majors (+1.3%).

More in the full Goldman oil tracker note available to pro subs.

Tyler Durden Fri, 05/15/2026 - 12:25

The Fed Is Losing Its Biggest Dove

The Fed Is Losing Its Biggest Dove

Via RealInvestmentAdvice.com,

Jerome Powell’s term as Fed Chairman expires today, with Kevin Warsh now confirmed by the Senate as his successor.

The transition has implications beyond a change in the Fed’s leadership.

Further, Stephen Miran, who was appointed Fed Governor in September 2025 to fill the vacancy left by Adriana Kugler, is seeing his term come to an end.

Most noteworthy during his term, he dissented at all six FOMC meetings he attended, consistently pushing for 50-basis-point rate cuts.

It’s not a stretch to say he was the Fed’s biggest dove.

In the graphic below, we circle Miran’s year-end Fed Funds projection in the latest Fed’s dot plot.

As shown, Miran projected a year-end 2026 Fed Funds rate of 2.625%, nearly a full percentage point below the current median of 3.42%. That dovish voice is now gone.

Warsh’s arrival shifts the balance. Here are a few considerations worth keeping in mind:

  • The Fed tilted slightly more hawkishly: Warsh may prove more dovish than his reputation suggests, but it is nearly impossible he will match Miran’s appetite for cuts.

  • The next FOMC meeting on June 17th is unlikely to produce action. Given recent inflation data, we see little appetite for rate cuts at the next FOMC meeting despite new leadership.

  • Powell isn’t gone. He has pledged to remain a Fed Governor through January 2028, or until ongoing investigations into the Fed’s construction project and legal challenges against Governor Lisa Cook reach what he calls “transparency and finality.”

The bottom line: The Fed just got incrementally more hawkish, and the June meeting will be the first test of what that actually means. Moreover, Kevin Warsh will now be on the speaking circuit, so we can better ascertain his thoughts on inflation, employment, and how he will lead the Fed going forward.

Tyler Durden Fri, 05/15/2026 - 12:05

CIA Head Ratcliffe Spotted In Cuba As Trump Refocuses Crosshairs On Havana Communists

CIA Head Ratcliffe Spotted In Cuba As Trump Refocuses Crosshairs On Havana Communists

We noted on Thursday that, once President Trump's summit with Chinese President Xi Jinping concluded, the Trump team's next focus would likely shift back toward Cuba. That pivot now appears underway. Aboard Air Force One early Friday, while returning stateside, Trump told reporters that "Cuba needs our help," signaling the Caribbean island nation is moving higher on the administration's agenda.

A new AP report offers more insight into how the Trump administration is shifting attention back toward Cuba: CIA Director John Ratcliffe met with officials in Havana on Thursday, reopening a channel for political dialogue between the two countries.

Ratcliffe and top U.S. officials, some of whose faces were blurred in images released by the CIA on X, held high-level talks with Cuba's Interior Minister, the head of Cuban intelligence, and Raúl Castro's grandson, Raulito Rodríguez Castro.

Havana's communist government released a statement noting that the meeting "took place Thursday, May 14, against a backdrop of complex bilateral relations."

AP noted that Cuban officials presented a report to Ratcliffe and his team, claiming to demonstrate that the communist-run island poses no threat to U.S. national security.

Consequently, Havana maintains there are no legitimate grounds for its continued inclusion on the U.S. list of state sponsors of terrorism.

However...

As per The Washington Times, "Cuba's intelligence apparatus is training foreign nationals to wage war against the West."

Thursday's meeting comes after a report that Cuba's power grid collapsed further into blackout conditions, as Energy Minister Vicente de la O Levy warned that the island is completely out of fuel for diesel generators. This comes as Trump's fuel blockade remains in effect.

Let's not forget that the Trump team is prepared to provide $100 million in direct humanitarian assistance if Havana moves forward with political reforms after decades of nation-killing communism.

Related

Trump and his team appear to be refocusing their efforts on the Western Hemisphere, with more news on Cuba likely to come next week.

Tyler Durden Fri, 05/15/2026 - 11:44

Musical Chairs

Musical Chairs

By Molly Schwartz, cross-asset macro strategist at Rabobank

Yesterday, Trump spoke with Xi in Beijing. While markets kept a watchful eye on any headlines about the war in Iran, palates were left dry as only tepid announcements dripped out, such as that China “offered help” on Iran and “pledged not to send weapons.” What they did not manage to evade was a conversation about Taiwan. During the two and a half hour conversation with Trump, Xi underscored that US intervention in Taiwan could trigger a “highly dangerous situation.” While Rubio underscored that the topic of American arms sales to Taiwan wasn’t a major focus of discussion, it likely will be when Congress’ approved USD 14bn arms sale to Taiwan lands on Trump’s desk, and again when Xi visits the White House in September.

While the US and China are stalled in the geopolitical arena, the financial scene seems to be bearing fruit. Treasury secretary Scott Bessent announced that conversations around the creation of a “Board of Investment” were underway, and that tariffs would be reduced or removed for products that the US doesn’t plan on reshoring, like fireworks. China also agreed to buy 200 “big” Boeing planes, according to Trump, which would mark the first significant Chinese purchase of Boeing jets since the last time Trump went to Beijing in 2017. China also hinted that they may intend to buy more US energy to compensate for flows disrupted by the war.

Though Iran didn’t appear to produce much in the way of headlines, the Strait is still closed, and Brent crude oil is still trading above $100/bbl at $106/bbl at the time of writing. According to Reuters, the IRGC announced that some 30 vessels have crossed the Strait since Wednesday (with Tehran’s permission), and transit is being permitted for “some” Chinese vessels.

US Treasury yields closed higher after hotter-than-expected trade price data for April printed, with import prices up 1.9% m/m and export prices up 3.3% m/m. These were the fastest monthly price index increases since early 2022 for both. However, the import price index, excluding petroleum, registered more modest gains of only 0.7% which, while hotter than the expected print of 0.5%, is cooler than levels seen as recently as January and February of this year. USD was the best performing G10 currency yesterday on a one day view. Yesterday afternoon saw a surge in yields across the board, absent a clear driver in sparse news flow, as the 2 year closed 3bp higher, above 4.00%.

Warsh was recently voted in as Fed Chair by the US Senate, but this creates a game of grown up musical chairs for the Board of Governors. There can only be seven Governors on the FOMC, and with Powell not giving his seat up just yet, if no one steps down, we have eight. However, Stephen Miran has announced that he would be stepping down as Governor and has submitted his resignation, effective upon Warsh being sworn in. Miran also assured that while he believes it’s important that the Fed only have one chair, Powell could help Warsh through the transition.

Bloomberg’s Anna Wong hit Powell with an uncomfortable reality check: “if Powell’s Fed had been more active in getting its own house in order following a massive miss on inflation, outsiders would have had less motive and opportunity to attack.” Powell’s Fed was criticized for its slow response to the inflationary pressures which led to “the Great Inflation.” Wong summarizes that “[Powell’s] limited push for accountability, such as a thorough review of Fed’s forecasting framework, opened the door to the nomination of a more aggressive outside like Warsh, who has vowed to ‘break some heads’ at the Fed. The moral of story: Get your own house in order or someone will do it for you.”

Across the pond, UK Health Secretary, Wes Streeting, resigned from his role in an attempt to take over Starmer’s seat. In a statement posted to X, Streeting outlined his accomplishments as Health Secretary, but claimed that he has “lost confidence” in Starmer’s leadership, partially due to the success of the Reform party in elections across the UK last week. Manchester Mayor Andy Burnham has also thrown his hat into the ring after MP Josh Simmons resigned, allowing Burnham to run for Parliament and make a bid for Labour leader as well.

The 30 year gilt yield is down from yesterday’s level of 5.74% to 5.67%, and GBP was the worst performing G10 currency on a one day view, depreciating 0.9% against USD and 0.6% against EUR, and on a month-to-date view, dropped from the fourth worst performing G10 currency to the worst. See Jane Foley’s commentary on GBP here.

Tyler Durden Fri, 05/15/2026 - 11:30

Great Global Energy Rewiring Accelerates: UAE To Double Crude Export Capacity Bypassing Hormuz Chaos

Great Global Energy Rewiring Accelerates: UAE To Double Crude Export Capacity Bypassing Hormuz Chaos

Days after the U.S. bombing campaign against Iran began, we pointed out on March 3 that the conflict was likely to accelerate a major Gulf infrastructure push to bypass the Strait of Hormuz. Saudi Arabia's East-West pipeline to the Red Sea stood out as the clearest signal that regional producers needed a credible Plan B for moving crude and crude products when the Hormuz chokepoint becomes disrupted. That logic is now coming into sharper focus for the UAE.

March 3:

Abu Dhabi National Oil Co. (ADNOC) is the UAE's state-owned energy giant and is set to double its crude-export capacity that bypasses the Hormuz chokepoint next year with the construction of a new pipeline to Fujairah on the Gulf of Oman, according to a new Bloomberg report.

The pipeline project would expand an existing 1.5 million-barrel-a-day pipeline, which has become critical for ADNOC amid the ongoing Hormuz disruption. This allows the UAE to keep about half of its oil exports flowing to the world.

The current bottleneck for the UAE is that ADNOC's pipeline can handle only about half of its normal export volumes, limiting revenues and proving particularly troubling for the Gulf producer, whose oil-related activity accounted for 22.7% of GDP in Q1 2025.

The urgency to divert flows, or in fact rewire energy flows, will be a top priority for other Gulf producers because oil still matters heavily for public finances and their billionaires.

Perhaps Gulf producers received another memo after President Trump's comments on Air Force One earlier today, following his China trip, when he said the U.S. does not need to reopen the Hormuz chokepoint. The U.S. still has a naval blockade in place to pressure Iran's energy complex into collapse, with hopes that Tehran will sign a peace deal.

Tyler Durden Fri, 05/15/2026 - 11:15

Trump Talk, Taiwan, & 'Thucydides Trap' Threat Triggers Market Mayhem Overnight

Trump Talk, Taiwan, & 'Thucydides Trap' Threat Triggers Market Mayhem Overnight

Traders are waking this morning in the US to some relative market mayhem and questioning what came first - the oil spike or the geopolitical angst - to trigger these moves as it appears the market finally remembered there's more going on in the world than trading 'short compute' demand to the moon...

Oil prices are up significantly (WTI >$100)...

Bond yields are breaking out everywhere (10Y 4.5%, 30Y UST 5.10%!, 30Y Gilt 5.82% - highest sine 1982)...

Equity markets sharply lower overnight (Kospi -6%, Japan Semis  approx. -5%, Japan momentum approx. -2.5% Nasdaq -1.5% as levered ETF exposure and high concentration clearly exacerbating the sell off)...

The catalysts are intertwined with what appears to be a nothing-burger in terms of outcomes from Trump's trip to China (exacerbated by Xi's not so hidden threat) and Trump's comments on the Strait of Hormuz..

China Summit

As Goldman Sachs one-delta desk-head, Rich Privorotsky, notes this morning, the Xi/Trump summit appeared to yield little in the way of immediate tangible outcomes.

Despite all the positive rhetoric, Boeing sank,  KWEB closed -4.6%, the details around NVIDIA H200 exports remain murky and even some of the headline “wins” looked shaky.

Reuters reported that Chinese customs “halted export clearances for hundreds of U.S. beef plants” just hours after approvals had seemingly been renewed during the summit. 

For now this still looks more like stabilization than a durable reset. 

Feels like the US side came hoping for transactional risk deals while China was looking for a broader multi year reset and foundations for more constructive dialogue.

Talking to reporters aboard Air Force One, Trump said that the two leaders talked about Taiwan "a lot," NBC News reported.

“On Taiwan, he does not want to see a fight for independence because that would be a very strong confrontation," Trump said.

Trump said he hadn't made any decisions about sales of arms to Taiwan, but he will "make a determination," the Associated Press reported.

Xi told Trump that he opposes Taiwan's independence, and Trump said he heard the Chinese leader out without offering any response.

The references to the “Thucydides Trap” did not go unnoticed either:

Xi invoked whether China and the US could “transcend the so-called Thucydides Trap” (the theory that when a rising power threatens to displace an established great power, war becomes highly likely).

...very deliberate language and clearly aimed at framing this as something much bigger than tariffs or trade.

Trump later had to go on a posting offensive clarifying that he must have been referring to the Biden administration...

When President Xi very elegantly referred to the United States as perhaps being a declining nation, he was referring to the tremendous damage we suffered during the four years of Sleepy Joe Biden and the Biden Administration, and on that score, he was 100% correct. Our Country suffered immeasurably with open borders, high taxes, transgender for everybody, men in women’s sports, DEI, horrible trade deals, rampant crime, and so much more!

President Xi was not referring to the incredible rise that the United States has displayed to the world during the 16 spectacular months of the Trump Administration, which includes all-time high stock markets and 401K’s, military victory and thriving relationship in Venezuela, the military decimation of Iran (to be continued!) — Strongest military on earth by far, economic powerhouse again, with a record 18 trillion dollars being invested into the United States by others, best U.S. job market in history, with more people working in the United States right now than ever before, ending country destroying DEI, and so many other things that it would be impossible to readily list.

In fact, President Xi congratulated me on so many tremendous successes in such a short period of time.

Two years ago, we were, in fact, a Nation in decline. On that, I fully agree with President Xi!

But now, the United States is the hottest Nation anywhere in the world, and hopefully our relationship with China will be stronger and better than ever before!

However, as Privorotsky noted, the market probably came in pricing deal momentum and instead got managed coexistence. 

That is still positive in macro terms, just less catalytic for risk assets immediately.

Now, to the second part of the double-whammy...

Oil

This is where Privorotsky says 'the rubber meets the road.' 

Feels like the US held back from escalation ahead of the China summit, hopeful Beijing might lean on Iran to de-escalate.

But China’s messaging remained diplomatic rather than forceful, saying “the most urgent issue is to keep the ceasefire” and calling for “good-faith negotiation between the two sides.” 

Trump said he and Xi agreed that Iran cannot have nuclear weapons, returning market focus to the ongoing closure of the Strait of Hormuz.

Reopening the waterway has been a key objective for the US in diplomatic efforts since a ceasefire between Washington and Tehran took hold about five weeks ago. But Iran insists it keep an oversight of traffic through the maritime chokepoing as part of any peace agreement, stoking fears of a prolonged disruption in energy exports from the Persian Gulf.

Trump oscillated between threatening further attacks on Iran, including in a Truth Social post between meetings with Xi, and insisting the US does not rely on energy imports through the Strait of Hormuz.

“They need the Strait more than we need it open, we don’t, we don’t need it at all,” Trump said in an interview with Fox News.

Trump says US is “doing it to help Israel and to help Saudi Arabia” and other gulf allies.

“It also helps China”

That comment triggered a jump in crude prices, rise in the dollar, and drop in gold...

For now, it appears the combination of Trump's nonchalance about the Strait and the over-arching geopolitical threat from Xi (combined with a disappointing outcome from the talks in terms of tangible trade deals) are enough to trump the Gamma Squeeze in AI/Semis (so far).

So now the question becomes:

Does the US feel compelled to escalate further (with China... or Iran)?

Markets are understandably skittish into the weekend risk window, which combined with the options expiration removing a chunk of positive (stabilizing) gamma, leaves markets more free to move (up or down).

Tyler Durden Fri, 05/15/2026 - 11:00

US And China Agree To Establish Trade And Investment Boards As Trump-Xi Summit Delivers Modest Wins

US And China Agree To Establish Trade And Investment Boards As Trump-Xi Summit Delivers Modest Wins

U.S. and Chinese leaders agreed to establish a new "Board of Trade" and a parallel "Board of Investment" during President Donald Trump’s two-day visit to Beijing - a summit that ended much as it began: with significant pageantry, warm personal rapport between the leaders, and modest, incremental progress on trade. The new boards aim to oversee bilateral purchases, manage trade differences, facilitate deals in non-sensitive sectors (with roughly $30 billion in goods identified), and provide a standing channel to prevent future escalations without constant high-level intervention.

President Trump and Chinese leader Xi Jinping at the Great Hall of the People in Beijing. Alex Wong/Getty Images

The boards were a pre-summit priority pushed by U.S. officials, including Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer. They build on preparatory talks in South Korea that produced what both sides described as "generally balanced and positive outcomes." Chinese state media, including Xinhua, highlighted the agreements as part of efforts to expand practical cooperation and maintain stable economic ties.

This development aligns with Xi Jinping’s broader push to reframe the bilateral relationship as one of "constructive strategic stability" - a new guiding vision intended to provide predictability for the next three years and beyond, emphasizing cooperation as the mainstay while allowing for "moderate competition" and "manageable differences." Xi described it as a positive, sound, constant, and enduring stability that should translate into concrete actions.

Trade and Economic Deliverables
  • Boeing Aircraft: China committed to purchasing 200 Boeing jets, with Trump indicating the order could potentially grow to 750 based on performance. This was the most visible commercial headline, though it fell short of earlier speculation around larger volumes and drew a muted market reaction.
  • Agriculture and Energy: Progress on expanded U.S. farm product sales (soybeans, beef, and other goods, with reports of commitments up to $10–50 billion in some readouts) and potential energy deals. Xi told accompanying U.S. CEOs that "China’s door will only open wider" to American businesses, signaling greater market access in mutually beneficial areas.
  • Investment Outlook: Discussions included pathways for Chinese investment into non-sensitive U.S. sectors, with the Board of Investment intended to provide clearer guidelines and reduce uncertainty from national security reviews.

Trump touted "fantastic trade deals" upon departure, while Xi emphasized win-win outcomes and the importance of sustaining momentum in economic ties.

And hey, America apparently needs 500,000 Chinese students in the US, and China should be able to purchase US farmland so that collages and farm prices don't collapse, or something. 

Areas Without Breakthroughs

Despite the institutional progress, several high-priority issues saw limited or no resolution:

  • Nvidia H200 AI Chips: No major summit agreement on advanced AI chip exports. While some U.S. licensing approvals for sales to select Chinese firms occurred around the visit (with Jensen Huang joining the delegation), export controls remained a sticking point and were not centrally resolved in leader-level talks.
  • Rare Earths: No announced extension of the existing truce or easing of Chinese export controls, which continue to affect U.S. chipmakers and aerospace firms. This remains a lingering vulnerability from prior tariff exchanges.
  • Iran Conflict: Both leaders expressed a shared desire for stability and reopening the Strait of Hormuz, with Xi showing interest in greater U.S. oil purchases to reduce Middle East dependence. However, China offered no concrete commitments to leverage its influence with Tehran. Beijing’s foreign ministry reiterated support for peace efforts without pledging active intervention.
Taiwan And Competing Narratives

Competing narratives quickly emerged from the summit - highlighting the persistent gap in how Washington and Beijing frame their relationship. Chinese state media, including Xinhua, emphasized Taiwan as "the most important issue" in bilateral ties, with Xi warning Trump that mishandling it could lead to confrontation or even conflict while reiterating opposition to “Taiwan independence.” (U.S. officials, including Secretary of State Marco Rubio, reaffirmed that American policy on Taiwan remains unchanged.) In contrast, the White House readout and Trump’s public comments focused heavily on international issues such as Iran, reopening the Strait of Hormuz, global energy security, and economic cooperation - including Xi’s reported interest in buying more U.S. oil to reduce Middle East dependence, fentanyl precursor controls, and increased agricultural purchases. Trump described the relationship as one that is “going to be better than ever before,” while Xi suggested that "cooperation benefits both, while conflict hurts both." Analysts noted that Beijing’s spotlight on Taiwan may serve to shape domestic and international perception and divert attention from other sensitive topics like trade imbalances, nuclear issues, and Iran. Meanwhile, the strong U.S. business delegation - including NVIDIA’s Jensen Huang - underscored Washington’s priority of securing concrete commercial wins. These divergent readouts reflect each side’s strategic messaging priorities: China seeking to reinforce red lines and stability on its terms, and the U.S. highlighting transactional progress and geopolitical alignment.

As Rabobank notes;

While markets kept a watchful eye on any headlines about the war in Iran, palates were left dry as only tepid announcements dripped out, such as that China “offered help” on Iran and “pledged not to send weapons.” What they did not manage to evade was a conversation about Taiwan. During the two and a half hour conversation with Trump, Xi underscored that US intervention in Taiwan could trigger a “highly dangerous situation.” While Rubio underscored that the topic of American arms sales to Taiwan wasn’t a major focus of discussion, it likely will be when Congress’ approved USD 14bn arms sale to Taiwan lands on Trump’s desk, and again when Xi visits the White House in September.

* * *

Overall Assessment: The summit went a long way in stabilizing ties through new dialogue mechanisms and modest commercial wins rather than grand bargains. Trump returned with a few modest wins he can highlight domestically ahead of midterms - though the whole 'Chinese students and farms' might be a tough pitch to MAGA, while Xi secured a narrative of strategic predictability and time for China to address its economic challenges.

Underlying rivalries in technology, supply chains, Taiwan, and global influence persist, but the relationship now has a more structured channel for management. Future progress is likely to remain incremental and transactional, with the newly agreed boards playing a central role in testing whether this stability proves durable.

Tyler Durden Fri, 05/15/2026 - 10:45

The Stagflation Narrative: What Doomers Get Wrong

The Stagflation Narrative: What Doomers Get Wrong

Authored by Lance Roberts via RealInvestmentAdvice.com,

The stagflation narrative dominating financial social media isn’t completely wrong. That’s what makes it so dangerous. After more than 30 years of managing client portfolios through actual inflationary cycles, not watching them on YouTube, I’ve learned that the most damaging investment advice isn’t built on outright lies. It’s built on partial truths, stretched past the point where the data still holds.

If you haven’t read Commodity Supercycle: The Enemy Of The Bull Thesis (Part 1), it is an important primer to today’s discussion.

Let’s dig in.

The doomers have legitimate inputs. Supply chains are genuinely under pressure, and the dollar currently faces real structural headwinds. Central banks have been buying gold at a historic pace. Equity valuations in certain segments are stretched, and every one of those observations is defensible. However, the leap from those observations to “sell everything, go all-in on commodities, bonds are dead forever, the great reset is here,” is where the analysis ends and the storytelling begins.

I want to do two things here. First, I’ll score the stagflation narrative claim-by-claim. We will give credit where it’s earned and expose where the logic collapses. I’ll lay out what a sound investment framework actually looks like when the data, not the narrative, drives the decision. Moreover, why the boom-bust nature of commodity markets and the AI-driven capex cycle both fundamentally change where allocations belong.

The Stagflation Narrative Spreading Across Social Media

Spend an hour on X, and you’ll encounter some version of the same script.

  • The Federal Reserve has destroyed the currency.

  • The 1970s are back, only worse.

  • Commodities are going to surge for the next decade.

  • Gold is the only real money.

  • Bonds are a guaranteed way to lose purchasing power.

  • Anyone still holding a diversified portfolio is either naive or not paying attention.

The 1970s comparison is the narrative’s analytical spine. Commodity prices surged for the better part of a decade while equities went nowhere in real terms. Gold went from $35 an ounce to over $800, and the people who held hard assets looked prescient for years. It’s a compelling story, with the added appeal of casting the narrator as the maverick who sees what the establishment refuses to acknowledge.

Here’s the problem.

The 1970s worked the way they did because of structural economic conditions that no longer exist. Both the boom-bust nature of commodity cycles and the emergence of the AI-driven capex boom create dynamics that the doomer framework fails to incorporate.

Before I take this apart, I want to be clear about something. The inputs behind the stagflation narrative deserve serious consideration. As such, dismissing them entirely would be just as intellectually sloppy as swallowing them whole.

As I laid out in Part 1 of this series, supply inelasticity is real. More than a decade of ESG-driven capital discipline, underinvestment in exploration, and production curtailment has left several commodity markets unable to respond quickly when demand rises. That constraint doesn’t vanish because we want it to. It gives the commodity cycle real legs, supporting the bull thesis for select commodities over a meaningful but finite window.

The dollar does face genuine headwinds. Structural fiscal deficits, a Federal Reserve with a long track record of accommodation, and geopolitical pressure on the reserve currency system are all real concerns. JPMorgan projects gold at $5,000 per ounce in 2026, as central bank accumulation runs at roughly 585 tonnes per quarter. There are also pockets of equity valuations that are stretched enough to carry real multiple-compression risk if earnings disappoint.

So the inputs are legitimate. Therefore, there is a version of the commodity trade, sized correctly and timed with discipline, that makes sense right now. The doomer narrative isn’t wrong about the forces in play. It’s wrong about what those forces mean, how long they last, and how to construct a portfolio around them.

Where the Narrative Falls Apart

The entire doomer framework rests on one foundational assumption: the 1970s stagflation cycle will repeat itself. Therefore, a 1970s portfolio, heavy on commodities, short on bonds, light on equities, will produce 1970s results. Unfortunately, that assumption doesn’t survive contact with the structural differences between the two economies.

The U.S. economy in the 1970s was built on manufacturing, which accounted for roughly 25% to 28% of GDP. Most crucially, it had a large unionized workforce with cost-of-living clauses written directly into labor contracts. When commodity prices rose, wages rose automatically. In other words, rising costs triggered wage increases, which sustained purchasing power, which kept spending alive even as prices climbed. That feedback loop extended the cycle for years.

The U.S. economy today is roughly 70% to 75% services, and manufacturing accounts for approximately 11% of GDP. The COLA-adjusted workforce is gone. Therefore, when commodity prices rise today, the increase doesn’t trigger wage catch-upInstead, it functions as a direct tax on purchasing power, and consumers absorb it immediately. What took years to produce meaningful demand destruction in the 1970s now shows up in six to twelve months.

“The 1970s cycle ran on wage indexing. Without it, commodity inflation becomes a demand tax, and demand destruction arrives fast. That is the analytical flaw at the core of the doomer stagflation narrative.”

The Inflation Sequence

The doomer version of the stagflation narrative treats the inflation phase as permanent. It isn’t. It’s a phase inside a sequence, and the sequence has a specific ending that the all-in commodity thesis is completely unprepared for.

  1. Commodity prices rise. Input costs surge.

  2. Consumers carrying record debt loads pull back.

  3. Business investment contracts.

  4. Growth slows.

  5. The Fed pivots.

  6. Rate cuts follow.

  7. Bond prices rise.

In other words, the same event that terminates the commodity rally launches the bond recovery.

We saw this exact sequence in compressed form between 2022 and 2024. Commodities surged amid the Russia-Ukraine shock and pandemic-related supply chain disruptions. Bonds had their worst calendar year in modern history. The doomers called it permanent. Then growth wobbled, the Fed pivoted, and by 2024 intermediate Treasuries had recovered sharply while commodity prices corrected from their peaks. The people who abandoned bonds entirely after 2022 missed a significant rally and held concentrated commodity exposure through the drawdown.

The doomer stagflation narrative is built to profit from Phases 1 and 2, but it has no plan, framework, or exit discipline for Phases 3 through 6. That is where the damage happens.

The Gold Logic and the Bond Mistake

Gold deserves a real discussion, because this is where the doomer stagflation narrative contains its most glaring internal contradiction. Own gold, the argument goes, because the dollar is collapsing and you need to escape a failing monetary system.

Gold is priced in dollars and traded in dollar-denominated markets. Its entire value proposition is measured against the purchasing power of the US dollar. When someone argues that the dollar is collapsing and the solution is a dollar-denominated asset, the argument refutes itself. Central banks buying gold aren’t abandoning the monetary system; they’re diversifying their reserve compositions within it. The Chinese People’s Bank is reducing its concentration in dollar-denominated Treasuries, specifically, but that is a rotation within the system, not an escape from it.

Gold earns a real place in a sound portfolio as a hedge against policy error, inflation (which is what the debasement argument refers to), and geopolitical stress. A 5% weighting of a portfolio allocated to gold, sized appropriately for its volatility, is a defensible position backed by institutional demand data. 50% of a portfolio concentrated in gold because the financial system is “about to collapse” is speculation with an apocalyptic narrative.

The bond mistake is where the most retail damage has been done. The doomers drew a permanent conclusion from 2022’s historically bad bond year. What they missed is that the inflation phase that crushed bonds in 2022 is the same mechanism that eventually forces the Fed to cut rates, which drives bond prices higher. Walking away after the loss and missing the recovery is the most expensive way to be partially right.

I’ve been doing this long enough to know that the most dangerous market narratives are the ones that are right about enough to feel credible all the way through. The stagflation narrative qualifies. Here is every major doomer claim, scored against what the data actually shows.

High Prices Cure High Prices

There’s a mechanism the doomer stagflation narrative never seriously models, and it’s the most reliable force in commodity markets: high prices cure high prices. When commodity prices rise far enough, they do three things simultaneously.

  • They incentivize new supply investment

  • Activate marginal producers who couldn’t profitably operate at lower price levels (increasing supply)

  • And they accelerate demand substitution as consumers and businesses find alternatives.

The ESG and underinvestment thesis that Part 1 establishes is real and important, as it delays the supply response and extends the cycle beyond what a typical demand shock would produce. But it doesn’t eliminate the supply response. It sets the clock to a longer timer. The critical insight for portfolio construction is that the timer runs at different speeds for different commodities, and that determines how much of each you should own and how tightly you need to manage the exit.

The 2011 oil market is the canonical example, as West Texas Intermediate Crude traded around $100 per barrel for three consecutive years. During that stretch, the price level didn’t feel unsustainable to the doomers of that era, either, and peak oil narratives were everywhere. Then, oil producers, directly incentivized by those high prices, flooded the market with supply. By early 2016, WTI was trading at $26. The doomers who held concentrated energy positions through that collapse, because the “structural case was intact,” experienced the full arithmetic of boom-bust without a framework for managing it.

CONSISTENCY WITH PART 1  The ESG and underinvestment constraints that Part 1 identifies extend the supply response timeline, but they don’t eliminate it. Gold has the longest clock. Energy has the shortest. That difference in supply response curves should directly determine relative position sizes and exit discipline.

Investment Strategy For Today’s Environment

The doomer stagflation narrative misses a second major dynamic entirely: the AI-driven capital expenditure cycle running through the U.S. economy creates a domestic earnings multiplier that didn’t exist in prior stagflation episodes. Microsoft, Oracle, Google, Amazon, and Meta alone are spending hundreds of billions on AI infrastructure that will approach $1.1 trillion by 2027. That capital flows directly into semiconductors, power infrastructure, and data center supply chains, which in turn creates a domestic growth differential with no comparable international analog.

That “multiplier effect” is critical to this story as discussed previously in The Deficit Narrative May Find Its Cure In AI.”

The American Society of Civil Engineers (ASCE) estimates that every $1 billion in infrastructure investment creates 13,000 jobs and adds $3 billion to GDP over a decade. Therefore, if the U.S. invests $1.8 trillion in AI infrastructure by 2030—plausible given the $500 billion energy need, $300 billion for data centers (150 new centers at $2 billion each), and $200 billion for chip production—GDP could rise by $5 trillion over 10 years, or roughly $300 billion annually. However, that $1.8 trillion is only the beginning. McKinsey & Company expects spending to reach $6 trillion by 2030, just 5 years from now, equating to $18 trillion in economic growth.

That effect was already evident in the Q1-2026 GDP report, where nearly 75% of the 2% annualized growth rate was attributable to business investment in data centers. Currently, the U.S. is projected to grow at roughly 1.8% to 2% in 2026, while Europe struggles to hold 0.5% to 0.8%, and China manages a structural property and debt overhang. That earnings growth differential is real and durable throughout the buildout. The previous case for rotating toward international equities on valuation grounds has also weakened considerably. While European equities ran hard in 2024 and Indian equities now trade at multiples rivaling those of U.S. mid-caps, the broad international valuation discount has compressed.

That said, the AI capex argument carries two important constraints.

  • First, the earnings are highly concentrated in roughly 8 to 12 companies. The rest of the S&P 500 still faces the same multiple compression risk in a stagflationary environment described in the article. Therefore, owning the broad index is not the same trade as owning the direct beneficiaries.
  • Second, the capex cycle carries borrowed-demand risk, as these companies pull years of infrastructure investment into a compressed window. When capex growth plateaus, the GDP contribution reverses. The 1990s telecom buildout produced genuine earnings growth in infrastructure, yet ended in a brutal equity cycle when spending decelerated.

The framework that holds together across all of these dynamics, the commodity boom-bust cycle, the structural compression of demand destruction, the AI capex differential, and the bond recovery sequence, requires four separate allocation legs, each sized for its own cycle duration and exit trigger.

THE REVISED FRAMEWORK  The doomer stagflation narrative gets the commodity direction right for the first leg and wrong about the duration, the differentiation by commodity, the bond thesis, and the domestic equity landscape transformed by the AI capex cycle. Own what the data supports. Exit on the supply response clock, not the narrative.

Conclusion

Fear is a durable marketing strategy. The stagflation narrative will keep finding new audiences because it wraps legitimate macro concerns inside an emotionally satisfying story, a villain, a hero, and a clear trade. The people selling it know that partial truths are more persuasive than outright falsehoods. They also know that by the time the cycle turns and the narrative fails, their followers will attribute the losses to bad luck rather than bad analysis.

I’ve watched this play out repeatedly in commodity markets, from the commodity supercycle of 2007 to 2009 to the metals boom of the early 2000s to the oil market in 2011 to 2014. Every time, the same pattern: a legitimate supply constraint, a genuine price move, a narrative that extrapolated the trend into permanence, and then the eventual supply response that high prices had been quietly incentivizing all along. The cycle doesn’t announce its end. It just ends.

The commodity cycle developing now is real, and the AI-driven domestic growth differential is real. However, the bond recovery that follows demand destruction is also real. A portfolio that acknowledges all three, with targeted U.S. growth exposure in the AI infrastructure beneficiaries, U.S. value for the commodity cycle with a domestic earnings anchor, commodity and gold exposure sized by supply response clock rather than apocalyptic conviction, and intermediate bonds providing ballast, is built to survive the full sequence.

That’s the difference between investing in a cycle and betting on a narrative.

Tyler Durden Fri, 05/15/2026 - 10:30

Iran Says It Has "No Trust" In US, Insists There Is "No Military Solution"

Iran Says It Has "No Trust" In US, Insists There Is "No Military Solution"

Iranian Foreign Minister Abbas Araghchi said on Friday that Tehran has "no trust" in the United States and remains interested in negotiations only if Washington demonstrates seriousness, as talks aimed at ending the war remain stalled. Speaking to Indian media during the second day of the BRICS foreign ministers meeting in New Delhi, Araghchi said military initiatives are ineffective in resolving regional crises, Turkey Today reported.

“There is no military solution, and the U.S. must understand this reality,” Araghchi said, according to a statement shared by Iran’s Foreign Ministry. “They cannot achieve their goals through military action, but the situation would be different if they pursue diplomacy,” he added.

Araghchi also said the United States and Israel had “tested” Iran at least twice during the conflict.

The Iranian foreign minister said one of the main obstacles during negotiations with Washington has been inconsistent messaging from American officials. Araghchi said contradictory statements, interviews and communications from U.S. officials created deep mistrust between the two sides.

Iran has repeatedly accused Washington of pursuing diplomacy publicly while supporting military pressure against Tehran behind the scenes.

Regional tensions escalated after the United States and Israel launched strikes against Iran on Feb. 28, triggering retaliatory attacks by Tehran against Israel and U.S. allies in the Gulf region.

Although a prolonged ceasefire is currently in effect, negotiations aimed at reaching a permanent settlement have largely stalled.

Commenting on the Strait of Hormuz, Araghchi said Iran continues to allow passage for “friendly countries” while imposing restrictions on what he described as “enemy ships.”

“The Strait of Hormuz is not closed to friendly countries. Restrictions are for enemy ships,” he said, although it is unclear why Iran then claims Chinese ships had been blocked until yesterday since China remains Iran's largest, if not only, oil export client. 

“In recent days, many vessels passed through the Strait of Hormuz with the assistance of our naval forces, and this process will continue,” he added.

Araghchi said ships belonging to friendly states and other commercial vessels must coordinate with Iranian armed forces while transiting the strategic waterway.

“The only solution is the complete end of the aggressive war, and afterward we will guarantee the safe passage of every ship,” he said.

He also reiterated Tehran’s position that Iran acted within its right to self-defense following the outbreak of the conflict.

Tyler Durden Fri, 05/15/2026 - 10:10

US Industrial Production Surged In April

US Industrial Production Surged In April

Despite record low consumer sentiment (if you believe UMich), this morning saw the Empire Fed survey show New York state factory activity expanded in May at the fastest pace in four years, and firms grew more optimistic about the outlook.

That was followed by a much hotter than expected Industrial Production print (up 0.7% MoM vs +0.3% MoM exp and higher than the highest estimate) for April (and March's decline revised stronger), lifting annual growth up to +1.35% YoY...

Source: Bloomberg

April's gain for US industrial production was the largest since February 2025.

Manufacturing output rose 0.6 percent in April after edging up 0.1 percent in March.

The production of durables increased 1.2 percent in April, with gains in most categories.

The largest increase was in the output of motor vehicles and parts, which jumped 3.7 percent.

Nondurable manufacturing production edged down 0.1 percent, as declines in several categories - notably the indexes for chemicals and for plastics and rubber products, which both decreased 0.9 percent - were mostly offset by increases in the indexes for food, beverage, and tobacco products, for printing and support, and for petroleum and coal products.

Mining output edged down 0.1 percent in April after falling 1.6 percent in March. 

The output of utilities increased 1.9 percent in April, with gains in both electric and natural gas utilities.

Capacity Utilization continued to rise to 76.1% (better than the 75.8% expected)...

So, if Americans are so pissed off (UMich), why is production and factory activity (and retail sales) picking up?

Tyler Durden Fri, 05/15/2026 - 09:27

My President Went To Beijing And All I Got Was This Crummy T-Shirt

My President Went To Beijing And All I Got Was This Crummy T-Shirt

Authored by Peter Tchir via Academy Securities,

Stocks rallied after Jensen hopped on AF1 in Alaska. They rallied several times yesterday on Iran/China headlines, on Boeing selling planes headlines, and other soundbites from the much heralded Xi and Trump Summit.

As discussed in Wednesday’s report China and Trade, we did not have high expectations regarding this meeting. We did feel that the President wanted a deal badly enough, that we would get something to help markets, even though it seemed like China had a marginally better/better hand than the U.S.

What we were not expecting was a perfunctory set of meetings and press conferences.

The President is many things, but perfunctory is rarely one of them.

Perfunctory describes an action carried out quickly, superficially, or carelessly, usually as a routine duty rather than out of genuine interest or care.

It implies a lack of enthusiasm, effort, or thoroughness, often done merely to get a task finished.  (via AI finding the Merriam Webster definition).

With a truly impressive entourage of politicians, political appointees and business leaders, the stage seemed set for something “bigger” than what we got. We often get more market moving social media posts in the middle of the night than we got as part of this historic meeting.

I did not have high expectations, but I was hoping for more than what we got.

I would rather have seen some confrontation and pushing an agenda, than what seemed quite “perfunctory”.

It leaves me (and possibly markets) a little confused.

Have stocks been pumped as high as they can?

What decision does the President make with Iran over the weekend? 

It did not seem like there was any commitment from China to help, and according to at least some comments from the President, China was not asked to help.

Really, not sure what to make of the lack of headlines, but cannot help but think of those souvenir T-Shirts saying My President Went to Beijing and all I got was this Crummy T-Shirt.

It could have been worse.

It could have been a lot better. 

But with bonds under pressure, the affordability issue getting more and more attention, and stocks at all time highs, I think markets needed something more than we got.

Maybe there will be a “surprise” statement or two in the coming days, following up on the meeting, but I am disappointed, and suspect markets are too!

Tyler Durden Fri, 05/15/2026 - 09:15

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