Judge Temporarily Blocks Democrat-Backed Referendum To Redraw Virginia's Congressional Map

Authored by Aldgra Fredly via The Epoch Times,

A county judge in Virginia issued an emergency restraining order on Feb. 19, pausing a referendum backed by Democrats that aims to redraw the state’s congressional maps.

Tazewell County Circuit Judge Jack Hurley issued the order following a Feb. 18 motion by the National Republican Congressional Committee (NRCC) that sought to challenge House Bill 1384.

HB1384 schedules a referendum for April 21 on a proposed constitutional amendment to allow the General Assembly to redraw the state’s congressional districts.

Virginia’s redistricting plan was projected to give Democrats four more U.S. House seats.

The Republican request for a restraining order argued that Democrats were ramming redistricting-related bills through the Legislature despite legal hurdles that prevent such a rushed process.

In its Feb. 18 filing, NRCC argued that HB1384 violates the Constitution by calling a referendum less than 90 days after it cleared the Legislature for the second time.

The Constitution requires at least 90 days between the final passage and submission to the voters, according to the filing.

In his ruling, Hurley found that temporary relief was warranted in this case to preserve “the status quo between the parties pending a hearing on a motion for a preliminary injunction.”

He also found the plaintiffs were likely to succeed in their claim that ballot language, as set by HB1384, violates the state’s Constitution because it is misleading, in particular, the “restore fairness” language, because it “would lead a voter to believe he or she were doing something unfair by voting against the proposed amendment.”

Hurley’s order temporarily restrains local officials from “administering, preparing for, taking any action to further the procedure of the referendum, or otherwise moving forward with causing an election to be held on the proposed constitutional amendment contained within House Joint Resolution 6007.”

The restraining order will remain in effect through March 18, according to the ruling. Early voting on the amendment was scheduled to begin on March 6 and conclude on April 21.

In a statement, NRCC spokesperson Mike Marinella hailed Hurley’s order as a “massive win in defending honest representation” for all residents in Virginia.

“For a second time, the Virginia courts have ruled against Virginia Democrats’ partisan attempt to ignore their own Constitution and rig the system in their favor,” Marinella said.

Hurley had initially blocked the effort in a January ruling, but the Virginia Supreme Court later allowed the plan to proceed to an April voter referendum after an appeal.

Hurley’s latest order has now halted the ballot initiative.

Virginia House Speaker Don Scott, a Democrat, has indicated the Democratic Party will appeal the judge’s decision.

He said he is confident Hurley’s latest order will not stand, given the state Supreme Court’s earlier reversal of his previous order.

“The Supreme Court of Virginia has already made clear that this matter will go to the voters, but Republicans unhappy with that ruling went back to their friendly judge,” Scott said.

House Minority Leader Hakeem Jeffries (D-N.Y.) told CNN on Feb. 15 that Democrats will do “whatever it takes” to make Virginia’s redistricting plan successful, adding the party is ready to spend “tens of millions of dollars” on the Virginia ballot initiative.

“Republicans started this redistricting war, and Democrats have made it clear we’re going to finish it. We’re going to make sure that there is a fair national map,” he said.

Republicans, who hold a narrow House majority, have already passed redistricting plans in Texas, Missouri, Ohio, and North Carolina.

Earlier this year, Florida Gov. Ron DeSantis said he would call a special session for April for the Sunshine State’s GOP-controlled Legislature to draw new U.S. House districts.

Tyler Durden Fri, 02/20/2026 - 14:00

"We Saw It. We Passed": Blue Owl Fails To Secure Third Party Funding For $4 Billion Data Center

As we discussed extensively yesterday, Blue Owl already has huge headaches with its software exposure, being forced to dump a substantial amount of its SaaS-linked loans (to related parties among others) as it gates retail investors in its private credit fund amid a tsunami of redemption requests. We now learn that the massive private credit asset manager is also facing major hardware challenges too. 

According to Insider, Blue Owl - which is also a leading investor in the data center boom funding countless projects with private loans - was unable to arrange financing for a $4 billion data center it is co-developing in Pennsylvania after pitching lenders to help bankroll the project in recent months.

The facility, located in Lancaster county 80 miles west of Philadelphia, will be occupied by CoreWeave, a junk-rated provider of cloud computing services that has become a closely watched name in the AI race for its rapid expansion due to the massive debt load it took on to fund that expansion which has sent its credit default swaps to record wides.

CoreWeave's Lancater data center: Photo: Bloomberg/Getty Images

An executive who arranges debt for major data center deals told Insider that the lack of interest in the Lancaster project was due to growing caution among lenders and investors about taking on sizable exposures to AI players with less-than-sterling credit. CoreWeave  has a junk rating of B1/B+, according to S&P and Moodys

"We saw it. We passed," a senior executive at a large specialty lender told Insider.

A Blue Owl spokesman said that the company had "considered" third-party financing for the Lancaster project "as we would with any transaction as we explore alternatives before choosing the most attractive path forward." This suggests that not only was Blue Owl unwilling to fund the project internally, but when it tried to syndicate the private loan, the phone calls went straight to voicemail. 

Understandably, already sweating under the spotlight of the market which has sent its stock price crashing in recent weeks, the Blue Owl spokesman added that the project, which he said is already under construction, "is fully funded, on time, and on budget." It wasn't immediately clear who had "funded" the project is, as Insider reports, 3rd party lenders had balked while Blue Owl itself was aggressively dumping its own software exposure.

To that point, Insider notes that it is unclear whether Blue Owl has been funding construction entirely from its own capital. If Blue Owl is unable to raise debt for the Lancaster development, the company - already facing massive redemption requests across its various funds - would be on the hook for a potentially huge outlay of cash to pay for the data center's construction.

The situation shows the complications and risks involved in financing the massive buildout of infrastructure for AI computing. Brennan Hawken, an equity analyst at BMO Capital Markets who covers Blue Owl, said that difficulties to raise debt for the Lancaster project would raise concern.

"I'm not familiar with this deal, but if there is a struggle to find the debt financing, that's a bit of a red flag that I would want to drill into," Hawken said.

How we got here

Last summer, CoreWeave announced it would lease 100 megawatts of initial capacity at the Lancaster data center and potentially expand its commitment to 300 megawatts. The company said it would pour up to $6 billion into the project to equip it with chips and other cloud infrastructure. A month later, in August, Chirisa Technology Parks announced it would partner with Blue Owl and Machine Investment Group to develop the project. The partnership said it would provide $4 billion of funding, an amount separate from CoreWeave's investment, to support the construction of the project's data center facilities. 

In the fall, Blue Owl began shopping the development to potential lenders, a person familiar with that effort told Insider. 

Blue Owl has been one of the more "creative" financial architects of the data center building boom. Last year, it structured an off-balance sheet deal to partner with Meta in the ownership of a large data center campus that Meta will build and operate in Louisiana.

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.

Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno

— zerohedge (@zerohedge) January 29, 2026

Blue Owl piggybacked on Meta's strong credit to raise $27.3 billion of investment-grade corporate bonds against its share of the project's equity, proceeds that will be used to help pay for construction.

Blue Owl could arrange a similar type of vehicle that could attempt to tap the credit of an investment-grade customer of CoreWeave's who might use the Lancaster facility or Nvidia, the chipmaker that has purchased large stakes in CoreWeave. It could also potentially raise cash for construction debt by tapping large institutional investor clients to pool together a loan, Hawken said.

Much of the development of hyperscale data center campuses has sought to utilize the strong credit ratings and deep pockets of big-tech partners.

Coreweave's data center challenges are only the latest hurdle that the AI supercycle is facing now that the market has realized the trillions in future funding needs will have to be largely filled with debt, including government funding (See "It Will Take $5 Trillion To Fund The AI Cycle, And The US Government Is On The Hook For Over $1 Trillion")

Insider previously reported that major banks had recent difficulty selling off pieces of $38 billion of debt to finance the construction of two data center campuses that will be anchored by Oracle. Banks often sell pieces of such large commitments to other lenders to spread risk and also reap a quick profit.

The slowdown in interest in participating in that financing was due to worries about Oracle's enormous AI spending and whether the tech company's credit rating could be impacted by those outlays. Oracle has since sought to calm the lending market, announcing that it would raise up to $50 billion of cash from stock and bond offerings in order to "maintain a solid investment-grade balance sheet."

Blue Owl stocks tumbled at the open to a fresh multi-year low, although it wasn't clear if that was due to the Coreweave news or because of its mutiple other issues. Coreweave's dump today, on the other hand, can likely be attributed largely to the data center news which, unless it manages to find a generous partner, will only be the start of its headaches. 

 

Tyler Durden Fri, 02/20/2026 - 13:35

"We Saw It. We Passed": Blue Owl Fails To Secure Third Party Funding For $4 Billion Data Center

As we discussed extensively yesterday, Blue Owl already has huge headaches with its software exposure, being forced to dump a substantial amount of its SaaS-linked loans (to related parties among others) as it gates retail investors in its private credit fund amid a tsunami of redemption requests. We now learn that the massive private credit asset manager is also facing major hardware challenges too. 

According to Insider, Blue Owl - which is also a leading investor in the data center boom funding countless projects with private loans - was unable to arrange financing for a $4 billion data center it is co-developing in Pennsylvania after pitching lenders to help bankroll the project in recent months.

The facility, located in Lancaster county 80 miles west of Philadelphia, will be occupied by CoreWeave, a junk-rated provider of cloud computing services that has become a closely watched name in the AI race for its rapid expansion due to the massive debt load it took on to fund that expansion which has sent its credit default swaps to record wides.

CoreWeave's Lancater data center: Photo: Bloomberg/Getty Images

An executive who arranges debt for major data center deals told Insider that the lack of interest in the Lancaster project was due to growing caution among lenders and investors about taking on sizable exposures to AI players with less-than-sterling credit. CoreWeave  has a junk rating of B1/B+, according to S&P and Moodys

"We saw it. We passed," a senior executive at a large specialty lender told Insider.

A Blue Owl spokesman said that the company had "considered" third-party financing for the Lancaster project "as we would with any transaction as we explore alternatives before choosing the most attractive path forward." This suggests that not only was Blue Owl unwilling to fund the project internally, but when it tried to syndicate the private loan, the phone calls went straight to voicemail. 

Understandably, already sweating under the spotlight of the market which has sent its stock price crashing in recent weeks, the Blue Owl spokesman added that the project, which he said is already under construction, "is fully funded, on time, and on budget." It wasn't immediately clear who had "funded" the project is, as Insider reports, 3rd party lenders had balked while Blue Owl itself was aggressively dumping its own software exposure.

To that point, Insider notes that it is unclear whether Blue Owl has been funding construction entirely from its own capital. If Blue Owl is unable to raise debt for the Lancaster development, the company - already facing massive redemption requests across its various funds - would be on the hook for a potentially huge outlay of cash to pay for the data center's construction.

The situation shows the complications and risks involved in financing the massive buildout of infrastructure for AI computing. Brennan Hawken, an equity analyst at BMO Capital Markets who covers Blue Owl, said that difficulties to raise debt for the Lancaster project would raise concern.

"I'm not familiar with this deal, but if there is a struggle to find the debt financing, that's a bit of a red flag that I would want to drill into," Hawken said.

How we got here

Last summer, CoreWeave announced it would lease 100 megawatts of initial capacity at the Lancaster data center and potentially expand its commitment to 300 megawatts. The company said it would pour up to $6 billion into the project to equip it with chips and other cloud infrastructure. A month later, in August, Chirisa Technology Parks announced it would partner with Blue Owl and Machine Investment Group to develop the project. The partnership said it would provide $4 billion of funding, an amount separate from CoreWeave's investment, to support the construction of the project's data center facilities. 

In the fall, Blue Owl began shopping the development to potential lenders, a person familiar with that effort told Insider. 

Blue Owl has been one of the more "creative" financial architects of the data center building boom. Last year, it structured an off-balance sheet deal to partner with Meta in the ownership of a large data center campus that Meta will build and operate in Louisiana.

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl "Project Beignet" for the Hyperion data center. None of this touches META's balance sheet.

Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno

— zerohedge (@zerohedge) January 29, 2026

Blue Owl piggybacked on Meta's strong credit to raise $27.3 billion of investment-grade corporate bonds against its share of the project's equity, proceeds that will be used to help pay for construction.

Blue Owl could arrange a similar type of vehicle that could attempt to tap the credit of an investment-grade customer of CoreWeave's who might use the Lancaster facility or Nvidia, the chipmaker that has purchased large stakes in CoreWeave. It could also potentially raise cash for construction debt by tapping large institutional investor clients to pool together a loan, Hawken said.

Much of the development of hyperscale data center campuses has sought to utilize the strong credit ratings and deep pockets of big-tech partners.

Coreweave's data center challenges are only the latest hurdle that the AI supercycle is facing now that the market has realized the trillions in future funding needs will have to be largely filled with debt, including government funding (See "It Will Take $5 Trillion To Fund The AI Cycle, And The US Government Is On The Hook For Over $1 Trillion")

Insider previously reported that major banks had recent difficulty selling off pieces of $38 billion of debt to finance the construction of two data center campuses that will be anchored by Oracle. Banks often sell pieces of such large commitments to other lenders to spread risk and also reap a quick profit.

The slowdown in interest in participating in that financing was due to worries about Oracle's enormous AI spending and whether the tech company's credit rating could be impacted by those outlays. Oracle has since sought to calm the lending market, announcing that it would raise up to $50 billion of cash from stock and bond offerings in order to "maintain a solid investment-grade balance sheet."

Blue Owl stocks tumbled at the open to a fresh multi-year low, although it wasn't clear if that was due to the Coreweave news or because of its mutiple other issues. Coreweave's dump today, on the other hand, can likely be attributed largely to the data center news which, unless it manages to find a generous partner, will only be the start of its headaches. 

 

Tyler Durden Fri, 02/20/2026 - 13:35

Oakland Mayor, Who Supported 'Defund The Police' Has Her Car Stolen

Authored by Luis Cornelio via Headline USA,

An alleged thief stole Oakland Mayor Barbara Lee’s city-owned vehicle after breaking into her office just two days earlier, according to the California edition of the New York Post. 

The Oakland Police Department recovered the vehicle within hours, two days after somebody tampered with her office’s door. 

“The Oakland Police Department is investigating the theft of a city-owned vehicle. On February 17, 2026, OPD was notified that the vehicle was stolen from Oakland City Hall,” the OPD said through a spokesperson.

“The vehicle was recovered within hours. OPD is following up on potential leads.” 

Lee took office in May 2025 after serving more than two decades in Congress.

She previously expressed support for efforts to “restructure” and “overhaul” policing during the 2020 protests, language widely associated with the “defund the police” movement. 

In 2020, she told Politico she was “really proud” of the Minneapolis City Council’s pledge to defund the local police. 

In December 2020, she also said, “We have to restructure our funding priorities in terms of how we make our communities safe.” 

“We have seen video after video over the last few weeks of peaceful protestors being met with extreme violence from police,” Lee said during the 2020 protest in favor of George Floyd.

“We can’t wait. It’s time to overhaul our policing system.”  

According to the New York Post, police already had an arrest warrant for the alleged suspect.  

In a statement, Lee claimed her administration takes crimes seriously:  

“As with criminal cases such as this, the Oakland Police Department is actively investigating, and we cannot comment further at this time. No one in Oakland should have to worry about their car being stolen, whether they’re a resident, a city worker, or the Mayor. Public safety is a priority across our entire city.” 

The theft comes amid a broader problem for Oakland as the city reported 9,914 motor vehicle thefts in 2024, one of the highest rates in the country. 

Tyler Durden Fri, 02/20/2026 - 13:20

Oakland Mayor, Who Supported 'Defund The Police' Has Her Car Stolen

Authored by Luis Cornelio via Headline USA,

An alleged thief stole Oakland Mayor Barbara Lee’s city-owned vehicle after breaking into her office just two days earlier, according to the California edition of the New York Post. 

The Oakland Police Department recovered the vehicle within hours, two days after somebody tampered with her office’s door. 

“The Oakland Police Department is investigating the theft of a city-owned vehicle. On February 17, 2026, OPD was notified that the vehicle was stolen from Oakland City Hall,” the OPD said through a spokesperson.

“The vehicle was recovered within hours. OPD is following up on potential leads.” 

Lee took office in May 2025 after serving more than two decades in Congress.

She previously expressed support for efforts to “restructure” and “overhaul” policing during the 2020 protests, language widely associated with the “defund the police” movement. 

In 2020, she told Politico she was “really proud” of the Minneapolis City Council’s pledge to defund the local police. 

In December 2020, she also said, “We have to restructure our funding priorities in terms of how we make our communities safe.” 

“We have seen video after video over the last few weeks of peaceful protestors being met with extreme violence from police,” Lee said during the 2020 protest in favor of George Floyd.

“We can’t wait. It’s time to overhaul our policing system.”  

According to the New York Post, police already had an arrest warrant for the alleged suspect.  

In a statement, Lee claimed her administration takes crimes seriously:  

“As with criminal cases such as this, the Oakland Police Department is actively investigating, and we cannot comment further at this time. No one in Oakland should have to worry about their car being stolen, whether they’re a resident, a city worker, or the Mayor. Public safety is a priority across our entire city.” 

The theft comes amid a broader problem for Oakland as the city reported 9,914 motor vehicle thefts in 2024, one of the highest rates in the country. 

Tyler Durden Fri, 02/20/2026 - 13:20

Goldman's Meeting With Top Memory Supplier Points To Higher Prices As Crunch Worsens

The high-bandwidth memory (HBM) shortage is already pressuring the margins of consumer electronics companies, disrupting product launches, and pushing up the prices of TVs and computers. The latest development is Valve's handheld gaming PC, which is reportedly out of stock in select regions as the memory crunch now filters into retail availability.

We have been leaning on institutional channel checks across the semis and hardware coverage universe to gain an insider's perspective on what's happening across the memory space and what to potentially expect in the quarters ahead.

The latest read comes from Goldman analysts led by Giuni Lee, following a discussion with SK Hynix, a critical supplier of HBM chips, on the implications of a very tight memory market.

Lee offered clients five key takeaways from her conversation with SK Hynix:

1. Memory pricing is likely to growth throughout this year driven by real demand and tight supply,

2. Healthy inventory levels and strengthening supplier leverage are leading to increased discussions around longer term contracts,

3. The current tight conventional DRAM S/D could lead to more favorable terms for HBM business in 2027,

4. The 1c nm ramp in 2026 mainly for conventional DRAM, while for HBM mainly starting from 2027, and

5. Capex guidance and focus on DRAM/HBM investments are largely inline with GSe. We reiterate our Buy rating on Hynix

On the memory market, Lee delivered clients a detailed readout on current conditions:

Memory pricing growth likely throughout this year driven by real demand and tight supply

Hynix thinks the current memory pricing uptrend could continue throughout this year driven by robust demand from AI customers. The company expects AI customers will continue to maintain sizable investment scale as they are making meaningful progress in their AI services. While the company acknowledged potential despeccing from PC/mobile customers could weigh on memory demand, it still expects upward pricing trajectory also led by limited supply growth. The company mentioned that the industry-wide limited clean room space is contributing to tight supply and favorable condition for memory pricing. The company sees low possibility of meaningful double-booking of memory orders, as customers are aware that memory capacity cannot be increased meaningfully in the short-term, hence they recognize double-booking will not lead to more allocation but rather drive up pricing further.

The rest of Lee's takeaways from her discussion with SK Hynix are available on the Marketdesk.ai portal for professional subscribers.

Tyler Durden Fri, 02/20/2026 - 12:40

Goldman's Meeting With Top Memory Supplier Points To Higher Prices As Crunch Worsens

The high-bandwidth memory (HBM) shortage is already pressuring the margins of consumer electronics companies, disrupting product launches, and pushing up the prices of TVs and computers. The latest development is Valve's handheld gaming PC, which is reportedly out of stock in select regions as the memory crunch now filters into retail availability.

We have been leaning on institutional channel checks across the semis and hardware coverage universe to gain an insider's perspective on what's happening across the memory space and what to potentially expect in the quarters ahead.

The latest read comes from Goldman analysts led by Giuni Lee, following a discussion with SK Hynix, a critical supplier of HBM chips, on the implications of a very tight memory market.

Lee offered clients five key takeaways from her conversation with SK Hynix:

1. Memory pricing is likely to growth throughout this year driven by real demand and tight supply,

2. Healthy inventory levels and strengthening supplier leverage are leading to increased discussions around longer term contracts,

3. The current tight conventional DRAM S/D could lead to more favorable terms for HBM business in 2027,

4. The 1c nm ramp in 2026 mainly for conventional DRAM, while for HBM mainly starting from 2027, and

5. Capex guidance and focus on DRAM/HBM investments are largely inline with GSe. We reiterate our Buy rating on Hynix

On the memory market, Lee delivered clients a detailed readout on current conditions:

Memory pricing growth likely throughout this year driven by real demand and tight supply

Hynix thinks the current memory pricing uptrend could continue throughout this year driven by robust demand from AI customers. The company expects AI customers will continue to maintain sizable investment scale as they are making meaningful progress in their AI services. While the company acknowledged potential despeccing from PC/mobile customers could weigh on memory demand, it still expects upward pricing trajectory also led by limited supply growth. The company mentioned that the industry-wide limited clean room space is contributing to tight supply and favorable condition for memory pricing. The company sees low possibility of meaningful double-booking of memory orders, as customers are aware that memory capacity cannot be increased meaningfully in the short-term, hence they recognize double-booking will not lead to more allocation but rather drive up pricing further.

The rest of Lee's takeaways from her discussion with SK Hynix are available on the Marketdesk.ai portal for professional subscribers.

Tyler Durden Fri, 02/20/2026 - 12:40

 

 

SCOTUS:  Article I, Section 8, of the Constitution specifies that “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises.” The Framers recognized the unique importance of this taxing power—a power which “very clear[ly]” includes the power to impose tariffs. Gibbons v. Ogden, 9 Wheat. 1, 201. And they gave Congress “alone . . . access to the pockets of the people.” The Federalist No. 48, p. 310 (J. Madison). The Framers did not vest any part of the taxing power in the Executive Branch. See Nicol v. Ames, 173 U. S. 509, 515.

–U.S. Supreme Court, February 20, 2026

 

The long-awaited Supreme Court decision on tariffs is finally out; it was a 7-2 decision in part, 6-3 decision more broadly (I thought this should have been 9-0 or 8-1, but…).

As we have seen in prior legal decisions with broad economic impact, the street doesn’t quite understand the subtle nuances of the case.1 Regular readers have seen my tariff criticism since Liberation Day (April 2, 2025); I have been tracking the case and thinking about the ramifications as it wound through the courts.

Rather than spike the football, I would rather take a moment to step back and consider the winners and losers of tariffs.

WINNERS:

• Consumers: There’s no way around it, but tariffs operate like a European VAT tax on consumers (minus free health care and college). The average American household has been paying ~$1,800 or more annually for tariffs; even more from wealthier families that account for nearly half of US consumer spending. The administration has been angry at people reminding consumers of this. 2

But the US Consumer is the big winner here. Assume about half of those few thousand dollars are no longer going to be a dragon their annual budgets.

The $5-7,000 tariff penalty on automobiles still exists, but at least other products may see higher prices ease.

• Companies that already filed for tariff refunds: Many of America’s largest companies have already filed for refunds. It is not all that simple or easy to demand a refund on paid tariffs – shepherding it through the process makes filing your taxes look easy. But many of the biggest retailers and manufacturers have already lined up for the nearly $200 billion in tariffs companies already paid. This will straight to the bottom line, as the consumers who willingly paid higher prices won’t see any of the cash refunds.

• The US Dollar: During 2025, the US Dollar fell 9.3%. The last time the US dollar fell this much was in 2017. Both years were the first year of a Trump Administration; each time there were substantial rises in tariffs, along with consternation from allies and trading partners, along with a modest repatriation of overseas investments in the United States.

Depending on how the White House responds, we could see the dollar’s decline slow and reverse itself over the course of the year.

• Neal Katyal: Obama’s former solicitor general argued and won the case at both the DC Court of Appeals and U.S. Supreme Court. His thoughtful approach to constitutional arguments have consistently carried the day. He has cemented his legacy as one of the most effective SCOTUS litigants of the modern era.

• Inflation: if tariffs are inflationary then the overturning of some or all tariffs should be disinflationary. The net impact on this going forward is positive for bonds. This might even clear the way for the Federal Reserve to have faster FOMC rate cuts.

• Separation of Powers, US Constitution: The plain language of Article 1, Section 8 reserves the power to tax, including levying duties and tariffs, to Congress. It’s not a big leap to suggest that this is the first time since January 20, 2025, that the US Constitution is the controlling factor in a major policy decision.

• Retailers, Manufacturers, and Consumer Discretionary: The biggest impact of the tariffs has fallen on several groups:

-Traditional Retailers:  Walmart, Amazon, Costco Target, Best Buy
-Home improvement: Home Depot, Lowe’s, IKEA, Williams‑Sonoma, etc.
-Appliance makers: Apple, Samsung, LG, Electrolux, GE Appliances, Lenovo
-Industrial Manufacturers  – Caterpillar, Deere, Polaris, Stanley Works, etc.
-Consumer discretionary –Lululemon, Nike, Revlon Luxottica
-Auto parts importers: Toyota, General Motors, Ford, Volkswagen, BorgWarner, Kawasaki, Goodyear, Yokohama Tire, etc.
-Food importers: Dole Fresh Fruit Co., Bumble Bee

That’s a short list; there are obviously hundreds more public companies and thousands more private ones that benefit from this ruling.

• Supreme Court: The past few years have not been kind to SCOTUS (although these have all been self-inflicted wounds). They have been mired in a kickback/gifts to sitting justices scandal; the lack of a standing, enforceable set of ethics rules is a disgraceful embarrassment. But the bigger issue has been a series of unconscionable and undefendable decisions. When partisan rulings remind constitutional law scholars of the Dred Scott “separate but equal” decision, the court has jumped the tracks.

There was every opportunity for the court to blow this decision ignore the plain written word of the constitution and the concept of separation of powers. It’s no surprise that Chief Justice Roberts, an institutionalist, wrote the lead decision himself, rebuking the president for his overreach.3

 

Coming later: The IEEPA Tariff Ruling’s Losers

 

 

 

 

Previously:
IEEPA Tariffs Update (January 27, 2026)

It’s Tariff Week! * (January 12, 2026)

Tariffs Likely To Be Overturned (November 5, 2025)

Might Tariffs Get “Overturned”? (July 31, 2025)

The Muted Impact of Tariffs on Inflation So Far (July 17, 2025)

Are Tariffs a New US VAT Tax? (March 31, 2025)

MiB: Special Edition: Neal Katyal on Challenging Trump’s Global Tariffs (September 3, 2025)

Neal Katyal on Challenging Trump’s Global Tariffs (September 8, 2025)

Which States Could Suffer the Most From Trade War Tariffs? (September 16, 2019)

 

 

 

__________

1. The usual pontificating pundits, whose track records leave much to be desired, have been breathlessly revealing their ignorance of all things jurisprudential. If you must preface your TV remarks with “I’m not a lawyer but” then perhaps you should pour yourself a tall glass of STFU and admit that you don’t know….

2. Companies like Amazon originally threatened to break out tariffs expenses in their displayed prices were met with wrath from the President; more recently, consider Kevin Hassett’s embarrassing hissy fit at independent New York Fed research that found consumers shouldered as much as 94% of the tariff expense.

3. It will be fun to watch the Justices sit in the front row of the State of the Union and suffer through Trump’s wrath. He won’t be able to help himself, and it could even mark an interesting moment in how things proceed.

The post Winners & Losers of SCOTUS Decision Striking Down Tariffs appeared first on The Big Picture.

Meta's AI Would Like To Keep You Posting After You're Dead

Ever since social media became a fixture of daily life, an uncomfortable question has lingered: what should happen to someone’s account after they die? Leave it frozen in time? Hand it to family members as a memorial? Or quietly let it fade into the algorithm?

A few years ago, Meta Platforms explored a far more ambitious possibility, according to Futurism. In 2023, the company received a patent describing how a large language model could be trained on a user’s past posts to simulate their voice and behavior — keeping an account active if the person were “absent,” including in the event of death. The filing, led by CTO Andrew Bosworth, outlined how such a system could generate posts, comments, likes, and even private messages in the user’s style.

The idea was striking, and for many, unsettling. Meta has since said it has no plans to move forward with that example. But the patent offers a snapshot of a moment when tech companies were aggressively testing the limits of what generative AI might do — including extending a person’s digital presence beyond their lifetime.

The Futurism piece says that the concept isn’t entirely theoretical. A small but growing “grief tech” sector has promoted AI tools that recreate voices or personalities of the deceased using photos, recordings, and written messages. Proponents argue that such tools could offer comfort. Critics worry they could complicate the grieving process.

Even within Meta’s own public comments, there has been ambivalence. CEO Mark Zuckerberg has spoken about AI companions as a way to address loneliness and, in a 2023 interview with podcaster Lex Fridman, suggested that interacting with digital representations of loved ones might help some people cope with loss. He also acknowledged the psychological risks and the need for deeper study.

The business logic behind such experiments is difficult to ignore. Platforms like Facebook are filled with dormant accounts — profiles that remain but are rarely updated. More AI-generated activity could mean more engagement and more data. As University of Birmingham law professor Edina Harbinja observed, the commercial incentive is clear, even if the ethical path forward is not.

Others urge caution. University of Virginia sociologist Joseph Davis has argued that part of grieving involves confronting the reality of loss, not blurring it with simulations.

Meta has distanced itself from the patent’s more provocative scenario. Still, its existence underscores how far companies have been willing to push generative AI — and how complex the questions become when technology intersects with death, memory, and identity.

Tyler Durden Fri, 02/20/2026 - 12:00

Meta's AI Would Like To Keep You Posting After You're Dead

Ever since social media became a fixture of daily life, an uncomfortable question has lingered: what should happen to someone’s account after they die? Leave it frozen in time? Hand it to family members as a memorial? Or quietly let it fade into the algorithm?

A few years ago, Meta Platforms explored a far more ambitious possibility, according to Futurism. In 2023, the company received a patent describing how a large language model could be trained on a user’s past posts to simulate their voice and behavior — keeping an account active if the person were “absent,” including in the event of death. The filing, led by CTO Andrew Bosworth, outlined how such a system could generate posts, comments, likes, and even private messages in the user’s style.

The idea was striking, and for many, unsettling. Meta has since said it has no plans to move forward with that example. But the patent offers a snapshot of a moment when tech companies were aggressively testing the limits of what generative AI might do — including extending a person’s digital presence beyond their lifetime.

The Futurism piece says that the concept isn’t entirely theoretical. A small but growing “grief tech” sector has promoted AI tools that recreate voices or personalities of the deceased using photos, recordings, and written messages. Proponents argue that such tools could offer comfort. Critics worry they could complicate the grieving process.

Even within Meta’s own public comments, there has been ambivalence. CEO Mark Zuckerberg has spoken about AI companions as a way to address loneliness and, in a 2023 interview with podcaster Lex Fridman, suggested that interacting with digital representations of loved ones might help some people cope with loss. He also acknowledged the psychological risks and the need for deeper study.

The business logic behind such experiments is difficult to ignore. Platforms like Facebook are filled with dormant accounts — profiles that remain but are rarely updated. More AI-generated activity could mean more engagement and more data. As University of Birmingham law professor Edina Harbinja observed, the commercial incentive is clear, even if the ethical path forward is not.

Others urge caution. University of Virginia sociologist Joseph Davis has argued that part of grieving involves confronting the reality of loss, not blurring it with simulations.

Meta has distanced itself from the patent’s more provocative scenario. Still, its existence underscores how far companies have been willing to push generative AI — and how complex the questions become when technology intersects with death, memory, and identity.

Tyler Durden Fri, 02/20/2026 - 12:00

The 2025 reconciliation act included a wide range of provisions that affect policies governing federal revenues and spending. This working paper describes the key methods that CBO used to estimate the law's macroeconomic effects.

Inflation Fears Plummet As UMich's Democratic Bias Is Exposed

After rebounding strongly in preliminary February data (as Democrats came to their senses over the fearmongered Trump tariff-flation), the final UMich sentiment survey print slipped lower with the headline lowered from 57.3 to 56.6. Both Current Conditions and Expectations were lower than the flash print with the latter falling to 2 month lows and the former holding at 4-month highs...

Does anyone else think its weird that all the numbers were exactly the same at 56.6

Source: Bloomberg

Democrats and Republicans led the decrease in inflation expectations...

Source: Bloomberg

UMich Survey Director Joanna Hsu noted that "all index components posted insignificant movements this month; overall, consumers do not perceive any material differences in the economy from last month."

Democrats confidence is at its highest since July 2025...

Year-ahead inflation expectations fell from 4.0% last month to 3.4% this month, the lowest reading since January 2025.

Hsu concludes that "A sizable month-to-month increase in sentiment for the largest stockholders was fully offset by a decline among consumers without stock holdings. Similar divergences were seen across income and education, where higher-income or college educated consumers exhibited increases in sentiment while lower-income or less-educated counterparts did not. With their much stronger income prospects and investment porfolios, wealthier and higher-income consumers feel better insulated from any possible risks to the economy."

Finally, why all this is nonsense (h/t @MikeZaccardi via FundStrat)

Why did UMich suddenly starting weighting their survey to Democrats when Trump was elected?

Tyler Durden Fri, 02/20/2026 - 11:15

Inflation Fears Plummet As UMich's Democratic Bias Is Exposed

After rebounding strongly in preliminary February data (as Democrats came to their senses over the fearmongered Trump tariff-flation), the final UMich sentiment survey print slipped lower with the headline lowered from 57.3 to 56.6. Both Current Conditions and Expectations were lower than the flash print with the latter falling to 2 month lows and the former holding at 4-month highs...

Does anyone else think its weird that all the numbers were exactly the same at 56.6

Source: Bloomberg

Democrats and Republicans led the decrease in inflation expectations...

Source: Bloomberg

UMich Survey Director Joanna Hsu noted that "all index components posted insignificant movements this month; overall, consumers do not perceive any material differences in the economy from last month."

Democrats confidence is at its highest since July 2025...

Year-ahead inflation expectations fell from 4.0% last month to 3.4% this month, the lowest reading since January 2025.

Hsu concludes that "A sizable month-to-month increase in sentiment for the largest stockholders was fully offset by a decline among consumers without stock holdings. Similar divergences were seen across income and education, where higher-income or college educated consumers exhibited increases in sentiment while lower-income or less-educated counterparts did not. With their much stronger income prospects and investment porfolios, wealthier and higher-income consumers feel better insulated from any possible risks to the economy."

Finally, why all this is nonsense (h/t @MikeZaccardi via FundStrat)

Why did UMich suddenly starting weighting their survey to Democrats when Trump was elected?

Tyler Durden Fri, 02/20/2026 - 11:15

Watch: School Kids Chant "F**k ICE" In Disturbing Classroom Presentation

Authored by Steve Watson via Modernity.news,

A disturbing video has surfaced showing middle school students delivering a classroom presentation that openly attacks U.S. Immigration and Customs Enforcement (ICE) and promotes unchecked immigration.

Dressed in black hoodies, the boys stand before their peers, chanting profanities and gesturing defiantly against the agents protecting America’s borders.

The footage captures the students declaring “F*ck ICE” while raising their middle fingers to federal immigration enforcement.

Students give a presentation to their class about being pro-immigration and against police officers and ICE

They say “F*ck ICE” and all give the middle finger to federal immigration enforcement

This is absolutely unacceptable. Our kids are being indoctrinated to support a… pic.twitter.com/ojhDF61pLR

— Wall Street Apes (@WallStreetApes) February 19, 2026

The presentation pushes a pro-immigration stance while demonizing police and ICE, framing border security as oppression. Such displays reveal how leftist agendas have infiltrated classrooms, turning education into a breeding ground for open-borders extremism that undermines national sovereignty.

Details behind the TikTok clip have not emerged, but this incident aligns with a wave of anti-ICE activism sweeping schools nationwide.

Just weeks ago, students at North Central High School in Indianapolis staged a viral protest against ICE, with critics noting how such actions reflect disengagement from real immigration issues and instead fuel misguided opposition to law enforcement.

North Central High School in Indianapolis —which prides itself on being one of Indiana’s most diverse schools — staged an “ICE walkout” today and it looked exactly how you’d expect.

Zero federal funds should go to these institutions. pic.twitter.com/aPghhH17T3

— johnny maga (@johnnymaga) February 3, 2026

Parents and patriots are rightly outraged, seeing this as part of a broader assault on American values. When schools allow kids to spew vulgarity against those enforcing the law, it signals a dangerous shift toward anarchy.

This isn’t isolated. Recall our coverage of the Chicago high schooler assaulted for holding an “I Love ICE” sign during an anti-ICE protest. The student, Danny Spud, was punched after standing alone against the mob.

“Today, students at my high school in Chicago held an Anti-ICE protest. I was the only one that decided to hold a sign that said ‘I Love ICE’. Instead of allowing me to express my opinion, I was assaulted — Just for standing up for law enforcement,” Spud said.

Schools are also censoring conservative and religious figures. In Kansas, a guidance counselor at Marshall Elementary banned students from naming Charlie Kirk, Donald Trump, or Jesus as role models in a “Find Your Voice” assignment.

“The guidance counselor got very uncomfortable and refused to allow this name to be written on the board, yelling that he was ‘not a hero,’ and that he was not a role model,” a report noted.

Higher education fares no better. At the University of Illinois Urbana-Champaign, required courses shove immigration activism down students’ throats, teaching future educators to use terms like “undocumented” and resist ICE.

“No human being is illegal,” one slide proclaims. A whistleblower revealed: “I haven’t actually learned anything for education about, like, how to set up a classroom… just like basic curriculum that kids are going to be taught, like math and science.” Instead, it’s all about radical ideology.

In addition, teachers unions are funneling millions to Soros-linked groups and anti-border causes. Recent filings show the NEA sending cash to dark money outfits for protests and gerrymandering.

“This is absolutely frightening because I’ll bet you the amount of teachers that don’t know where that money is going,” Fox News commentator Emily Compagno commented. Public funds meant for learning are propping up division.

These examples paint a clear picture: America’s education system is under siege by forces intent on eroding borders, faith, and freedom.

Solutions exist. Oklahoma’s “America First Test” for certifying teachers weeds out far-left radicals, banning drag queen events and BLM propaganda. “Either evolve or dissolve,” one exposed teacher training urged—now turned against the indoctrinators. This ensures classrooms prioritize real education over activism.

Leftists panic at the idea of teaching kids to love America. When Stephen Miller announced plans to defund woke culture and promote patriotism, Jemele Hill declared, “This should frighten everyone.” But as Miller stated: “Children will be taught to love America. Children will be taught to be patriots.” Why fear pride in the greatest nation?

 

America’s future hinges on reclaiming schools from this toxic grip. Defund the radicals, empower parents, and restore education that builds patriots—not pawns for globalist schemes. The fight for our kids’ minds is the fight for the republic.

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

Tyler Durden Fri, 02/20/2026 - 10:30

2025 New Home Sales Highest Since 2021

US New Home Sales dipped 1.7% MoM in December (after a 15.5% MoM surge in November)...

...but ended the year at 745k - the highest SAAR since 2021...

"New" home sales have notably decoupled from "used" home sales in the last few years as homebuilders incentivize buyers (reducing margins) and lower prices (reducing revenues)...

Lower mortgage rates support modest further improvements in sales...

Will this be Trump's lead on housing affordability?

Tyler Durden Fri, 02/20/2026 - 10:24

From sanitation workers in Philadelphia to Boeing machinists in Missouri to nurses in California, thousands of workers across the country went on strike last year to demand higher pay, better benefits, and safer working conditions. New data from the Bureau of Labor Statistics (BLS) show that 306,800 workers were involved in 30 major work stoppages in 2025, a 13% increase from 2024. This is likely an undercount of strike activity given data limitations. However, the number of workers involved in major strikes remains elevated compared with the strike activity that occurred in the early 2000s (see Figure A).

Figure A

Most major work stoppages in 2025 (17) took place in the public sector. Six involved workers at public colleges and universities, including a five-day strike involving 1,400 custodial, maintenance, and services workers at the University of Minnesota where the Teamsters secured higher wage increases and other concessions. Public administration had five major work stoppages and the health care sector had four major work stoppages.

Thirteen major work stoppages took place in the private sector. Seven involved health care workers, including a historic 46-day strike involving 5,000 nurses at Providence Hospitals where the Oregon Nurses Association secured substantial wage increases, better staffing plans for patient care, and guaranteed pay for missed breaks or meals. Manufacturing and retail trade had two major work stoppages each.

Major work stoppages took place in 15 states across the U.S. in 2025. The five states with the most stoppages were California (18), Washington (3), Colorado (2), Illinois (2), and Oregon (2). Some strikes took place across state lines: For example, the five-month strike involving 3,200 Boeing machinists occurred in both Missouri and Illinois where the International Association of Machinists and Aerospace Workers secured a 24% general wage increase during the length of the contract.  

As noted above, there are limitations to the BLS data, which only include information on work stoppages (both strikes and lockouts) involving 1,000 or more workers and lasting one full work shift between Monday–Friday, excluding federal holidays. For example, the 2025 data did not capture a four-day strike involving 580 hockey players and the East Coast Hockey League because it didn’t meet the size limitations.

Given that a majority (58%) of private-sector workers are employed by firms with fewer than 1,000 employees, these size and duration limits mean that BLS is not capturing many workers who walked off the job in 2025. While BLS shows 30 major work stoppages in 2025, Cornell’s Labor Action Tracker reports 303 work stoppages—298 strikes and 5 lockouts.

Policymakers should strengthen workers’ right to strike

Strikes are a powerful tool that workers can use to rectify the imbalance of bargaining power in the labor market. At a time when affordability and rising income inequality are at the front of workers’ minds, strikes can provide critical leverage to win wage gains, maintain and expand benefits, and improve working conditions. The National Labor Relations Act provides most private-sector workers, whether they are in a union or not, the right to strike. However, bad National Labor Relations Board (NLRB) and Supreme Court decisions have eroded this right over time. For example, in NLRB v. Mackay Radio & Telegraph Co., the Supreme Court ruled that employers can legally hire permanent replacements for striking workers in some cases.

There is no federal law that gives public-sector workers the right to strike, but a dozen states have extended this right to some state and local government workers. Even with these limitations, thousands of workers across the country and across sectors went on strike to demand fair pay and improved working conditions.

Policymakers—on the federal and state level—should pass laws that strengthen workers’ right to strike. Congress should pass the Protecting the Right to Organize (PRO) Act, which strengthens private-sector workers’ right to strike by eliminating the prohibition on secondary strikes, allowing the use of intermittent strikes, and prohibiting employers from permanently replacing striking workers. Congress should also pass the Striking and Locked Out Workers Healthcare Protection Act, which would prevent employers from cutting off workers’ health care as a form of retaliation, and the Food Secure Strikers Act, which would allow striking workers to qualify for Supplemental Nutrition Assistance Program (SNAP) benefits.

State lawmakers should extend full collective bargaining rights, including the right to strike, to all public-sector workers. State lawmakers should also join New Jersey, New York, Oregon, and Washington state in making striking workers eligible for unemployment insurance benefits.

Matt Taibbi: Epstein Files Are "Uniquely Destructive" To Both Political Parties

Submitted by QTR's Fringe Finance

This week I interviewed Matt Taibbi at a moment when, as he put it, “this is a pretty weird time.” He had just learned that his outlet, Racket News, had been investigated by the British government using what he described as “human intelligence sources and all kinds of crazy stuff.”

“It’s been pretty weird,” he told me. What struck him most was how normalized this kind of pressure has become. Governments, he said, now routinely “hire out private intelligence firms and private PR firms to devise strategies to undermine negative press.” If you’re doing adversarial reporting, he added, “you’ll get swept up in this. So you probably have been, you just don’t know it.”

From there, we moved into the Epstein story, which has become a political third rail. I asked him whether bipartisan silence around certain issues should worry people. Taibbi said most of what happens in Washington is already bipartisan; the public just doesn’t see it. “The thing that we call the news,” he said, is “a sliver of disagreement” between parties. The rest—“98% of the business that’s done there”—happens with quiet agreement.

On the Epstein files, he argued that both parties miscalculated. The Trump camp, he said, built expectations around full transparency and then stumbled. “Dumping tons of stuff out without any context tends to have a lot of unintended consequences,” he said. The result has been politically damaging across the board.

He also pushed back on some of the public narrative. The fascination with Epstein, he said, rests on three assumptions: that Epstein worked for intelligence, that he ran a vast trafficking ring, and that the two were connected through political blackmail. “There’s an abundance of evidence” of serious sexual crimes, he acknowledged. But on the intelligence-blackmail theory, “there’s nothing that puts it all together and says that’s what was happening. It could, but it’s just not there yet.”

What he does see is a slow-burn release strategy. “You’ll notice that they never fully release everything,” he told me. “It’s like Zeno’s paradox. We’re never going to get all the way to the wall with this.” Each new tranche fuels public demand and media frenzy, with the promise that the next batch might contain the “kill shot” that takes down someone powerful.

We then shifted to New York politics and the rise of Zohran Mamdani. Taibbi sees his early proposals—like raising property taxes—as predictable. If state-level backing doesn’t materialize, he suggested, the Democratic Party may distance itself. “The Democratic Party has decided not to back this horse,” he said. In his view, the party faces a structural dilemma: a base that is moving left out of economic frustration, and a national electoral map that may not tolerate that shift.

He connected that frustration to student debt and monetary policy. When I brought up inflation and deficit spending, he traced the arc back to post-2008 policies and the explosion of quantitative easing. “All you’re doing is accelerating inequality on the one hand,” he said, “and you’re raising the debt burden for everybody else.” The result, he argued, is a generation that feels locked out of homeownership and upward mobility.

On immigration and recent ICE enforcement actions, Taibbi resisted simple partisanship. He said he found neighborhood sweeps and masked agents “scary,” comparing aspects of the approach to “an enhanced federal version of stop and frisk.” At the same time, he criticized the ideological shift that made even basic border enforcement seem taboo. “It’s not like having borders is inherently xenophobic,” he said. “It’s just a part of governance. Part of being a nation.”

At the end of the conversation, Taibbi outlined changes at Racket News. He said he had “basically fired” himself as editor-in-chief and brought in new leadership to refocus on document-based investigations. The site, he told me, is doubling down on FOIA-driven reporting and digging into stories like expansive FBI investigations and the British controversy now touching his own outlet.

The through line of our discussion was less about left versus right than about institutions under strain—media, parties, law enforcement, and financial systems alike. Taibbi’s core warning was that much of what truly matters happens in the bipartisan shadows, while the public argues over the sliver that makes it onto cable news.

(WATCH THE FULL VIDEO INTERVIEW WITH MATT HERE). 

Tyler Durden Fri, 02/20/2026 - 10:00

US & Chinese Fighter Jets In Rare Brief Face-Off Near Korea

US and Chinese fighter jets engaged in a brief aerial standoff over waters near the Korean Peninsula this week, according to South Korean media, in a rare and dangerous incident that underscores ongoing simmering tensions between Washington and Beijing.

Yonhap, citing military sources, reported that China scrambled aircraft on Wednesday after roughly 10 US jets took off from an American airbase in South Korea for planned drills. The US had reportedly filed its flight plan in advance.

F-16 fighters assigned to US Forces Korea (USFK) launched from Osan Air Base in Pyeongtaek, about 60 kilometers south of Seoul, and flew near the overlapping air defense identification zones (ADIZ) of South Korea and China. The US aircraft did not enter China’s ADIZ, according to the report, but alarm bells still went off for the Chinese PLA military.

Chosun Daily: The South Korean and U.S. Air Forces conduct a joint formation flight, escorting a US Air Force B-1B 'Lancer' strategic bomber with fighter jets, following North Korea's ICBM provocation in February 2023. 

In response, "The Chinese People's Liberation Army organized naval and air forces to monitor and effectively respond to the activities throughout the process in accordance with laws and regulations," China's Global Times reported Friday.

The outlet described the episode as US warplanes operating in airspace facing China over the Yellow Sea - a move that prompted Beijing's rapid response.

"The F-16s reportedly flew to an area between the respective air defense identification zones of South Korea and China, prompting the Chinese military to dispatch its own fighter jets to the scene, but no clash occurred," Yonhap writes.

According to more unusual aspects to the incident:

The paper also noted an “unusual” number of US jets in the air, adding that it could suggest that the exercise had been “aimed at signaling deterrence toward China.”

Yonhap news agency said that Washington had informed Seoul of the planned mission, but did not elaborate.

China’s Global Times acknowledged the incident, saying that Beijing’s military “organized sea and air forces to conduct continuous monitoring… and effectively responded to and handled the situation.”

In the background, President Trump has continued to positively tout his highly anticipated trip to Beijing the first week of April. On China's red lines concerning handing over to Taiwan record-breaking arms packages, Trump has remained ambiguous...

Trump says he "wouldn't answer" a question on how the US would respond if Taiwan were attacked by China.

"I would have just said that it's none of your business right now ... When it comes to war, you don't talk about your strategy," he says.pic.twitter.com/kcih0jRPBI

— Rosie Birchard (@RosieBirchard) February 20, 2026

As for other tensions, Beijing is not happy that Washington is accusing it of conducting banned nuclear weapons detonation tests.

The CCP has responded to the accusation of an alleged 2020 test via state mouthpiece (@HuXijin_GT), saying there is an ulterior motive for the timing of this announcement: "Trump is eager to resume nuclear testing and needs a plausible reason, and accusing China of conducting nuclear tests is the perfect pretext."

Tyler Durden Fri, 02/20/2026 - 09:40

Agentic AI Isn't Eating Software – It's Feeding Market Volatility

Authored by David Parsons via BondVigilantes.com,

The sharp sell‑off across software names in recent weeks has prompted questions from investors, many centred on whether the rapid rise of agentic artificial intelligence marks the beginning of a deeper structural shift in enterprise technology.

The catalyst was the latest demonstration from Anthropic’s Claude platform, whose new “Cowork” and “Code” capabilities promise to automate tasks that were once firmly in human hands, from drafting documents and synthesising research to generating production‑ready code. Equity markets were quick to draw conclusions, punishing enterprise software companies without drawing any distinctions, based on the assumption that their software tools and embedded long term relationships were significantly devalued.

Discussions among technology specialists, both within M&G and across the broader industry, agree that the market move has been overdone. Rather than reflecting the pace or scale of disruption in the software environment, prices have been driven lower by perceived risk rather than evidence that software company valuations have been impaired by the AI revolution. The degree of weakness bears little resemblance to what is actually happening inside real enterprise businesses. Instead of a measured repricing based on a quantifiable change in credit quality, this has been a largely sentiment-driven reaction to a headline‑grabbing demonstration.

Source: M&G, Bloomberg Indices (Ref. S5SOFWTR, NDX, SPX, SISCSE, SXXP) as at 13 February 2026.

Most enterprise software vendors have already embraced the need to incorporate AI into their architecture. Many large vendors have spent years developing their products, integrating machine learning into their platforms and automating processes in compliance, risk management, customer analytics, IT operations and more. The emergence of tools like Claude sits within this longer term evolution rather than representing a sudden and existential shock. While impressive in isolation, few AI tools are ready for large scale integration into client processes. Corporate buyers, whilst keen to embrace the latest technologies, struggle to keep pace with the constant rollout of AI-led applications. In practice, procurement cycles, organisational constraints, audit trails and governance requirements will continue to slow adoption, particularly in regulated, core business processes or critical IT systems.

Existing enterprise software systems sit at the heart of major businesses, making software companies more resilient than current market pricing would suggest. Enterprise platforms anchor trading desks, risk management, regulatory reporting, client‑servicing infrastructure and internal control frameworks. They are embedded in workflows and integrated within legacy systems creating substantial financial, operational and regulatory switching costs that represent a significant ‘moat’ for software businesses. For most large organisations, reliability and continuity matter far more than theoretical productivity gains.

Despite the noise around AI agents, there is little evidence of customers abandoning incumbents. A more likely scenario is the opposite, that new AI tools reinforce the competitive position of established software vendors. Incumbents also hold decades of proprietary, structured, client specific data. This could materially improve AI model performance and suggests that partnerships between software vendors and AI agent developers such as Anthropic is a likely out-turn. Far from being disrupted, many Software companies could actually become strategic partners in the development of next‑generation AI tools and systems.

As with any period of rapid technological change, there will be winners and losers. Vendors offering more client-centric or commoditised applications with low switching barriers may potentially face challenges. Pricing structures will likely evolve and we may see linkages to cost savings or productivity introduced alongside more traditional licence based models may evolve too. Change is inevitable from the introduction of AI into almost every business over the next few years, but it is too early to assume AI is sounding the death-knell of large parts of the software sector, or as we have also seen recently, the wealth management sector.

M&G, Bloomberg Indices (Ref. LUACTRUU, I00394US, I40257US) as at 13 February 2026

For credit investors, the more important question is whether the equity‑led repricing signals underlying stresses in cashflows, leverage or financing risk. On this point, the picture remains reassuring. Credit spreads have widened and valuations have compressed, especially among lenders to private software companies where sentiment is fragile, but the underlying credit characteristics of most public issuers remain solid. Software revenues are sticky, renewal rates remain high, and long‑term contracts continue to anchor client relationships. What the sector is experiencing reflects sentiment rather than a permanent change in credit fundamentals.

Markets seems likely to continue trying to anticipate winners and losers across the sector, with software currently at the centre of concern. Current market price action feels overdone and without evidence to the contrary should correct. AI will embed itself into many (possibly most?) industries in the next few years, and market participants will have to inevitably become more pragmatic and discerning as to the likely winners and losers based on evidence rather than over-hyped expectation. Our view remains that AI will enhance rather than replace incumbent software, strengthening rather than weakening the sector’s long‑term foundations.

The narrative that “AI will eat software” has run far ahead of reality. Agentic AI tools marks an important evolution, but it does not constitute an existential threat to the core of the enterprise software industry. For bond investors, this sentiment‑driven repricing may create pockets of value in fundamentally strong issuers whose long‑term strategic positioning remains intact. The foundational advantages enjoyed by enterprise software providers should prove far more durable than current market pricing suggests.

Tyler Durden Fri, 02/20/2026 - 09:25

Q4 GDP Unexpectedly Grows At 1.4%, Half Expected Pace, As Government Shutdown Slams Growth

There was a big surprise at 8:30am ET when the BEA reported the (delayed) GDP print for the last quarter of 2025: With consensus expecting a 2.8% print  (and the Atlanta Fed GDPNow model even higher) which would already be a big drop from the 4.4% in Q3, the BEA instead reported that the US economy grew at just 1.4% in the fourth quarter, the slowest growth since the tariff shock of Q1 2025.

According to the BEA, the contributors to the increase in real GDP in the fourth quarter were increases in consumer spending and investment. These movements were partly offset by decreases in government spending and exports. Imports, which are a subtraction in the calculation of GDP, decreased. 

Overall, the economy expanded 2.2% last year, data from the Bureau of Economic Analysis showed.

Specifically, the Q4 breakdown was as follows:

• Personal consumption slowed notably, from 2.34% of the bottom line GDP to just 1.58% or more than 100% of the final 1.42% GDP print
• Fixed Investment contributed to 0.45% of bottom line GDP, up from 0.15% in Q3
• Change in private inventories added 0.21%, up from a decline of -0.12% in Q3
• Net exports (exports less imports) continued to normalize and in Q4 added just 0.08% to the GDP number, down dramatically from 1.62% in Q3
• Last and definitely worse, government was actually a major drawdown, reducing the Q4 GDP by 0.9%, a sharp reversal from the 0.38% addition in Q3.

And visually:

Of the above, the most notable variable was government spending, which due to the government shutdown in Q4 tumbled by 5.1% - the biggest drop since covid - and subtracted 0.9% from the final GDP number.

Knowing in advance how bad the number would be due to the shutdown, less than an hour before the data were released, Trump posted on social media that the shutdown would cost the US “at least two points in GDP.”

That may be an exageration, but it is modest: if one takes the average growth in recent quarters due to government which is about 0.5-0.6% and subtracts the 0.9% hit in Q4, the actual swing is about 1.5%. 

Of course, this is just a delayed reversal, and expect to see Q1 GDP offset by this much if not more, meaning Q1 GDP will likely print around 4%.

Government slowdown aside, perhaps an even more notable print is the continued explosion in spending on computers/peripheral equipment courtesy of AI, which has surged 70% in the past year and has more than doubled to $300BN at the end of 2025, more than double since the launch of chatGPT in 2022. 

Despite the year-end slowdown, the data capped a solid year for the US economy, which shrank in the first quarter amid a monumental pre-tariff surge in imports, only to round out 2025 with one of the strongest growth rates in years. The turnaround came after Trump backed off of his most punitive levies and the Federal Reserve lowered interest rates, helping drive the stock market to record highs and enabling wealthier Americans to keep spending.

Separate monthly data out Friday showed the Fed’s preferred measure of underlying inflation — the core PCE index — rose 0.4% in December, the most in nearly a year. On an annual basis, the core PCE, which excludes food and energy, climbed 3%, compared to 2.8% at the start of 2025. All of these prints were hot...

... suggesting that all else equal, the US is once again flirting with stagflation, although as has so often been the case, the Q4 GDP print is an outlier, as is the December PCE, the first impacted by the government shutdown the second heated up by higher commodity prices which will reverse as soon as the geopolitical circus involving Iran quiets down. 

Tyler Durden Fri, 02/20/2026 - 09:17