Jobless Claims Continue To Show No Signs Of Labor Market Stress

Initial jobless claims continue to hover near multi-decade lows, refusing to show any signs of labor market stress.

Last week saw 212k American file for jobless benefits for the first time (below the 216k expected). Unadjusted claims tumbled to the lowest since September...

Source: Bloomberg

Michigan and New York saw the largest drop in initial jobless claims last week while Rhode Island and Oklahoma saw the bigger rise in claims...

The number of Americans filing for continuing jobless claims also dropped last week to 1.833 million (well below the 1.9mm Maginot Line)...

Source: Bloomberg

It seem the 'no fire' side of the 'no fire-no hire' economy continues to support trend growth.

Tyler Durden Thu, 02/26/2026 - 08:37

Ten Cuban Nationals Aboard U.S.-Linked Speedboat Intended "Armed Infiltration For Terrorist Purposes," Cuba Claims

The Cuban Embassy's official X account says a Florida-registered speedboat carrying 10 Cuban nationals residing in the U.S. entered Cuban territorial waters armed with assault rifles, body armor, improvised explosive devices, camouflage uniforms, and telescopic sights, in what the government says was a "foiled armed infiltration" into the Caribbean island nation.

Late Wednesday afternoon, the embassy's account reported that Cuban border guards aboard a vessel had fired on a U.S.-linked speedboat off Cuba's north coast, killing four people and injuring six others.

By late Wednesday, the embassy provided additional details about what the group of "Cuban nationals residing in the United States" was allegedly attempting to do, describing it as an effort to "carry out an infiltration for terrorist purposes."

Here's what the embassy said:

Participants in Foiled Armed Infiltration in Villa Clara Identified

As part of the ongoing investigation into the armed attack against a patrol vessel of the Border Guard Troops of the Ministry of the Interior, in the northeastern area of the El Pino channel, at Cayo Falcones, municipality of Corralillo, Villa Clara province, the following update is provided:

Authorities have confirmed that the intercepted speedboat, registered in the State of Florida under number FL7726SH, was carrying 10 armed individuals who, according to preliminary statements by those detained, intended to carry out an infiltration for terrorist purposes.

The following items were seized: assault rifles, handguns, improvised explosive devices (Molotov cocktails), body armor, telescopic sights, and camouflage uniforms.

. . .

All participants are Cuban nationals residing in the United States. Most have prior records involving criminal and violent activity...

Participants in Foiled Armed Infiltration in Villa Clara Identified

As part of the ongoing investigation into the armed attack against a patrol vessel of the Border Guard Troops of the Ministry of the Interior, in the northeastern area of the El Pino channel, at Cayo Falcones,… pic.twitter.com/s9IFmUkqvk

— Cuban Embassy in US (@EmbaCubaUS) February 26, 2026

U.S. Secretary of State Marco Rubio commented on the incident, saying, "What I'm telling you is we're going to find out exactly what happened and who was involved. We're not going to just take what somebody else tells us. I'm very confident we will be able to know the story independently."

SECRETARY RUBIO on CUBA: What I’m telling you is we’re going to find out exactly what happened and who was involved. We’re not going to just take what somebody else tells us.

I’m very confident we will be able to know the story independently. pic.twitter.com/965ul2lC8b

— Department of State (@StateDept) February 26, 2026

The Trump administration's current posture toward Cuba is geared toward increasing pressure on Havana and ridding the island of communism. As noted yesterday, the key question is how the administration frames the narrative around the maritime incident, whether it uses it to shape public opinion, and whether this marks the early stages of a new narrative that supports future intervention to topple the communists in Havana.

Tyler Durden Thu, 02/26/2026 - 08:25

Fed Independence Is Sacred... Or So We've Been Told

Authored by Richard Roberts via RealClearMarkets.com,

For the better part of a year, many had become convinced that the Federal Reserve's independence was in its final days.

The narrative rested on two prongs.

• First, an FOMC browbeaten by relentless public attacks, threats of removal, and a Justice Department criminal probe into Chair Jerome Powell. The pressure, many argued, had grown so intense that Fed decisions would no longer be trusted to reflect economics rather than politics.

• Second, a new chair expected to arrive in May 2026, widely projected to be a Trump loyalist, would finish what the pressure campaign had started.

Both prongs have problems.  

• On the first, the captured FOMC: the January minutes. Several Fed officials raised the possibility that an interest rate increase might be appropriate if inflation continues tracking above target. Not fewer cuts. A hike. This from a committee supposedly beaten into submission. If the Fed has lost its spine, someone forgot to tell the Fed.

• On the second, the Trump loyalist: the evidence does not support it. After an initial market jolt, analysts largely concluded that nominee Kevin Warsh represented a mainstream, independent choice. Warsh himself has said publicly that independent operations in the conduct of monetary policy are essential. Those who dismissed him as Trump's instrument did so without the kind of evidence they would demand in other contexts. As an aside, while at the Federal Reserve Bank of New York during the Global Financial Crisis, I noted Warsh as a leader who was calm under pressure, analytically sharp, and unwilling to bend to the moment's politics.

So, Fed independence seems on solid ground. The doomsday scenario looks considerably less likely than the headlines suggested.

Which Makes This the Right Moment to Ask an Uncomfortable Question

If the battle is not coming, we lose the chance to test empirically what we have long assumed: that a Fed stripped of independence would cause serious and lasting economic harm. That makes the underlying question more urgent, not less. If crisis will not force the examination, intellectual honesty should.

Do we actually have compelling evidence that the Fed must be independent in the first place, or have we simply repeated that claim long enough to mistake consensus for proof?

A moment of relative calm is exactly the right time to ask it honestly.

Correlation Is Not Causation

The story economists tell is clean and confident. Independent central banks produce lower inflation. Political interference leads to time-inconsistency problems: governments prefer cheap money before elections, stoking inflation that becomes ruinously expensive to reverse. When the Fed bent to political pressure under Arthur Burns during the Nixon years, inflation spiraled. A brutal recession was eventually required to bring it back under control. Lesson learned. Independence enshrined.

It is a compelling narrative. But compelling narratives are not robust empirical proof.

The foundational academic work, Alesina and Summers in 1993 and Cukierman's cross-country analysis, found that more independent central banks were associated with lower inflation.

Associated.

Critically, the same research found little evidence that political control had any meaningful impact on growth or unemployment. Countries with stronger institutions tend to have both more independent central banks and better inflation outcomes for reasons that may have little to do with independence itself. After 2000, as inflation fell almost everywhere, the statistical relationship weakened further. The broader literature is not silent, but it is far from conclusive.

Yet the doctrine is treated as settled fact.

A Different World

The financial world of 2026 looks nothing like the world those models were built to describe. Capital moves instantly across borders. The dollar anchors global reserves. Inflation is driven as much by supply chains as by domestic money supply. Bond markets discipline policy in real time; the vigilantes are not a 1980s relic, they are embedded in global capital flows.

The case for independence was built on a world that no longer exists. That is not an argument against it. It is an argument for reexamining it.

What Warsh Should Do

I have previously written about modernizing inflation measurement, still relying on frameworks that predate the data revolution, and rethinking a regional Fed architecture built for a financial system that no longer exists. The independence doctrine belongs on that same list.

Warsh has an opening here, one he should take before the political noise makes any examination look like capitulation. A serious review would start with the right commission. Not an internal working group, but a balanced body drawing on academic economists, market practitioners, former Fed officials, former members of Congress, and institutional scholars, given one narrow question: is the current independence framework optimally designed for modern conditions?

Then ask the hard questions. Does the empirical evidence support the current degree of independence, or would a more structured accountability framework deliver equivalent outcomes? Are there intermediate models, enhanced transparency requirements, formal congressional review mechanisms, structured communication protocols, that preserve credibility while improving democratic accountability? What can be learned from how peer central banks, the ECB, the Bank of England, the Bank of Japan, structure independence differently?

Then commit to publishing findings with teeth. A review that produces conclusions no one is bound to act on is just theater.

An Honest Reckoning

I am not arguing that independence should be abandoned. I am arguing that it should not be treated as beyond question simply because it has been around for decades. The profession prides itself on empirical rigor, and it has applied that standard to almost everything except its own institutional assumptions.

If independence is truly indispensable, honest examination will confirm it. If it needs updating, better to find that out deliberately than in the middle of a crisis.

Sometimes the Fed asks hard questions about everything except itself. Warsh can change that.

Tyler Durden Thu, 02/26/2026 - 08:05

Zimbabwe Lithium Disruption Has Goldman Eyeing This Trade

Earlier news from Bloomberg that Zimbabwe has suspended exports of lithium concentrates and raw minerals to force miners into local processing has caught the attention of Goldman analyst James McGeoch. He sees a potential trading opportunity in a mineral-exploration company that could be positioned for upside.

Let's begin with the report that Mines Minister Polite Kambamura told reporters earlier that the export ban is effective immediately until further notice. Zimbabwe has one of the largest lithium reserves in Africa and is among the top global producers.

Zimbabwe Suspends Export of Raw Minerals and Lithium Concentrates.

Mines Minister Hon. Dr. P. Kambamura has ordered the immediate suspension of all exports of raw minerals and lithium concentrates, including consignments already in transit, to enforce in-country value addition… pic.twitter.com/acX0CmntoX

— Zimbabwe Economic Review (@ZimbabweReview) February 25, 2026

IMMEDIATE SUSPENSION OF EXPORT OF RAW MATERIALS AND LITHIUM CONCENTRATES

The Minister of Mines and Mining Development, Hon. Dr. P. Kambamura (MP), has announced an immediate suspension on the export of all raw minerals and lithium concentrates, effective immediately.… pic.twitter.com/Mw1Ua4yfIl

— Nick Mangwana (@nickmangwana) February 25, 2026

Zimbabwe has become a global powerhouse in supplying lithium to Chinese refineries.

The latest USGS data shows Zimbabwe produced an estimated 22,000 metric tons of lithium in 2024, versus a reported world total of 240,000 metric tons. That works out to about 9.2% of reported global mine output.

Such a disruption piqued McGeoch's interest:

REMEMBER this : Its Africa - recetn example is Cobalt - Feb 2025 put an export ban in place, Oct 2025 they announced export quotas, rolled them forward into 2026 - end Feb they have exported c.3k tonnes v typical of 20kt. Expect the mkt will price this disruption as per the below and there was already a willingness/desire to own Lithium which will amplify basis this.

Continue to point to GSCBGLLI Index...... Want a small cap i have been keeping an eye on QTWO CN

McGeoch pointed out Zimbabwe's trade and production data and how Chinese lithium prices are already reacting to the disruption:

In terms of production, GIR had forecast 160kt LCE (Lithium Carbonate Equivalent) of production in Zimbabwe for 2026 – this accounts for roughly 10% of ex-China supply.

To put this chart into context, in LCE terms, 2025 exports of Zimbabwe Spodumene to China totalled 160kt LCE, virtually all their production.

What does this mean for price action?

Post Chinese New Year holiday, GFEX prices were up 10% (close on close), evidence of supported prices before this headline in an already fundamentally tight market. On the Wuxi exchange (a private onshore exchange that trades around the clock), lithium carbonate prices have rallied 14% today post-headline, from roughly 160k CNY/MT to 185k CNY/MT. We expect GFEX prices (onshore lithium carbonate exchange) to move higher on this tomorrow.

McGeoch wrote in a separate note, "Zim is the marginal spodumene supplier. The ban will only be lifted if miners comply with government requirements. ...Zim is 8% on our 2026 supply numbers."

He added:

Team just running some numbers. More recently the Lithium price closed today at RMB 166k , we are 13% off the highs of 190k in Jan. Clearly will be limit up, WUXI is +12% on this headline. already .... We expect new highs without a doubt here, China came back and bought it pre this headline, now we all catch up. Its been an ESS story and i see that theme getting stronger not weaker.

Here is where China's 99.5% battery-grade lithium carbonate prices stand after the 2021-22 boom-and-bust.

McGeoch and Goldman's commodities desk have certainly taken an interest in lithium this morning. Professional subscribers can read the full note at our new Marketdesk.ai portal.

Tyler Durden Thu, 02/26/2026 - 07:45

Fusion Power Needs To Be American-Born

Authored by Lawrence Kadish via The Gatestone Institute,

Perhaps not since Teddy Roosevelt have we had a president who thinks as big as Donald J. Trump.

From his projection of military power that protects our national interests to his understanding of how a complex economy powers the greatest nation on earth, President Trump has demonstrated a unique appreciation of what America must do to maintain its global leadership.

It is for that reason that he has assumed a quiet but strategic leadership role in advancing our country's pursuit of fusion energy -- the same process that powers the sun and one that could literally provide America with unlimited energy far into the future.

While scientists have been able to create fusion energy in a lab setting, much work still needs to be done to make it commercially viable.

For a president who has staked his legacy on American greatness, there is no more important strategic achievement than ensuring that fusion is American-born.

Trump has made this pursuit of energy a national priority — not for ideological reasons, but for deeply practical ones.

The geopolitical stakes could not be higher.

China has dramatically increased its investment in fusion research, committing billions to state-backed programs with one goal: to beat America in delivering commercial fusion power to their national electrical grid.

The country that cracks fusion first will not merely solve its own energy needs — it will hold the keys to powering our world for generations to come.

The president knows allowing China to reach that finish line first would represent one of the greatest geopolitical surrenders in American history. It is unthinkable.

Fusion energy brings total energy independence.

No OPEC with the Middle East holding us hostage. No hostile regimes choking supply routes for oil and gas. No price shocks at the pump driven by some terrorist group attacking oil tankers.

A fusion-powered America would be permanently energy independent.

Trump has much on his plate, but fusion energy is the biggest possible bet he can make on America's future and a legacy that will be chronicled by historians for generations to come.

The race is already underway. Our nation needs to win it. Fusion energy must be American-born.

Tyler Durden Thu, 02/26/2026 - 07:20

What GAO Found The National Nuclear Security Administration (NNSA) is overseeing the design or construction of 28 major construction projects—each estimated to cost $100 million or more—that collectively are estimated to cost more than $30 billion. Since GAO’s 2023 report, cumulative cost and schedule overruns have increased for NNSA’s portfolio of major projects in the execution phase (which have approved cost and schedule baselines). Specifically, as of June 2025, NNSA’s cumulative cost overrun for the portfolio had increased from $2.1 billion in 2023 to $4.8 billion, and the cumulative schedule delay increased from 9 years to 30 years (see figure). Cumulative Cost and Schedule Overruns for NNSA’s Portfolio of Major Projects in Execution Phase, 2023–2025 Two of NNSA’s 16 major projects in the execution phase—the Uranium Processing Facility (UPF) Main Process Building and UPF Salvage and Accountability Building at the Y-12 National Security Complex—are responsible for about 80 percent of the cumulative cost overrun and 40 percent of the cumulative schedule delay. However, seven other major projects in this phase have incurred or expect to incur a cost overrun of more than 20 percent compared with their originally approved cost baselines. According to NNSA documents and officials, cost or schedule overruns for major projects in the execution phase were often associated with inadequate project management by NNSA’s management and operating (M&O) contractors; poor performance by vendors or subcontractors overseen by M&O contractors; or increased costs of equipment, materials, or vendors. Of the 12 NNSA major projects in the definition phase (which do not yet have cost and schedule baselines), eight are either on hold, implementing design changes, experiencing design challenges, or assessing the effect of these issues on their cost and schedule estimates; and four have identified critical technologies and have met milestones for maturing these technologies, according to project documents and officials. Why GAO Did This Study NNSA—a separately organized agency within the Department of Energy (DOE)—plans to invest tens of billions of dollars in major construction projects to modernize the research and production infrastructure supporting the nuclear weapons stockpile. Senate Report 117-130, accompanying a bill for the National Defense Authorization Act for Fiscal Year 2023, includes a provision for GAO to review NNSA’s major projects on a biennial basis. GAO assessed (1) the performance of NNSA’s portfolio of major projects in the execution phase, and (2) the development and maturity of project designs and critical technologies for projects in the definition phase. This report also includes summaries of NNSA’s 28 major projects. GAO collected and analyzed data on NNSA’s 28 major projects and interviewed officials. GAO analyzed information on cost and schedule performance for 16 projects in the execution phase. GAO also collected information on the status of design and technology maturity for 12 projects in the definition phase. GAO’s review excluded major projects that did not have approved preliminary cost and schedule estimates or were not subject to certain DOE acquisition requirements.

What GAO Found The Centers for Medicare & Medicaid Services (CMS) implemented the voluntary Medicare Part D Premium Stabilization Demonstration (Demonstration) in 2025 to stabilize beneficiary monthly premiums and enrollment in Part D standalone prescription drug plans. Nearly all plan sponsors opted to participate. Without the Demonstration, GAO’s analysis of CMS data showed that, if beneficiaries in standalone drug plans in 2024 remained in their plan in 2025, their monthly premium would have nearly doubled, on average. In addition, monthly premiums for 37 percent of these beneficiaries would have increased by more than $40 (see figure). If these premium increases had taken effect, CMS officials expected widespread changes in enrollment for beneficiaries in standalone drug plans, which could disrupt beneficiaries’ access to their medications. Potential Monthly Part D Standalone Premium Increases for Beneficiaries from 2024 to 2025, Absent Part D Demonstration Notes: Results indicate how premiums could have changed if beneficiaries in standalone Part D plans in 2024 had remained in the same plan or were transferred to another one in 2025. Results are weighted based on 2024 enrollment of beneficiaries who were not eligible for the low-income subsidy. To stabilize premiums with the goal of stabilizing enrollment in standalone drug plans, CMS (1) reduced beneficiary premiums in 2025 by up to $15 and then (2) limited each plan’s premium increases to $35 from 2024 to 2025. CMS also provided additional protection for plan sponsors in 2025. For 2026, CMS provides smaller premium reductions and allows for greater premium increases. Collectively, CMS officials estimated that the Demonstration would cost a total of $9.8 billion in 2025 and 2026. The Department of Health and Human Services’ Office of the Assistant Secretary for Planning and Evaluation (ASPE), through an agreement with CMS, designed an evaluation framework to be used to determine whether the Demonstration achieved its goals. GAO’s analysis of CMS data showed that average premiums in standalone drug plans increased from $42 in 2024 to $43 in 2025 under the Demonstration for beneficiaries not eligible for the low-income subsidy. In addition, enrollment in these plans increased by 2 percent from 2024 to 2025, while the percentage of all Part D enrollees in standalone plans remained at 42 percent. However, an evaluation is necessary to determine the extent to which changes such as these were due to the Demonstration and not to other factors, such as changes to the Part D drug benefit. ASPE officials told GAO that they plan to continue their evaluation efforts in fiscal year 2026. GAO received a copy of the finalized evaluation framework in January 2026. Why GAO Did This Study The Medicare Part D program provides voluntary outpatient prescription drug coverage to beneficiaries, including those enrolled in standalone drug plans. The Inflation Reduction Act of 2022 required significant changes to the Part D drug benefit, some of which took effect in 2025. CMS reported in July 2024 that increased variation in plan sponsors’ expected costs for providing drug coverage in 2025 could lead to substantial premium increases for beneficiaries. CMS subsequently announced in July 2024 the Demonstration for standalone drug plans, using its authority under section 402 of the Social Security Amendments of 1967 as amended. GAO was asked to review the legality of the Demonstration and issued a legal decision in May 2025 concluding that this Demonstration, as implemented for 2025, was consistent with this statutory authority. GAO was also asked to review other aspects of the Demonstration. This report describes CMS’s (1) implementation of the Demonstration, and (2) plan to evaluate the Demonstration. GAO reviewed CMS documents, such as those about the development and evaluation of the Demonstration, and CMS data on premiums for Part D standalone drug plans. In its analysis of standalone drug plan premiums, GAO focused on beneficiaries who were not eligible for the low-income subsidy and, therefore, were required to pay plan premiums. GAO also interviewed CMS and ASPE officials, Part D plan sponsors, and organizations representing Medicare beneficiaries. For more information, contact John E. Dicken at dickenj@gao.gov.

What GAO Found The Department of Defense (DOD) works to ensure a healthy, resilient defense industrial base. DOD has identified risks to the industrial base, including an overreliance on foreign suppliers. Biomanufacturing is potentially key to mitigating such risks. Biomanufacturing is a type of production that uses biologically derived components, such as living cells or microorganisms to create and produce new materials. According to DOD officials biomanufacturing has the potential to create material for a wide range of applications, such as explosives, body armor, and solvents to maintain weapon systems. Biomaterials can also expand or create new defense capabilities or replace other products and components that are critical to DOD with materials that are domestically sourced, cheaper, and safer. Notional Biomanufacturing Process Biomanufacturing development evolves over a multi-stage process. It starts with producing small quantities of materials through work in laboratories and advances to commercial-scale production through testing and demonstration. As projects scale up, researchers need appropriately sized and equipped facilities for each stage. Notional Biomanufacturing Development Stages and Production Quantities   DOD’s Office of Industrial Base Policy and the Office of the Under Secretary of Defense for Research and Engineering (OUSD (R&E)) identified that the U.S. does not have sufficient infrastructure necessary to support the advancement of promising biotechnology projects from the laboratory to commercial production and to establish new supply chains, particularly pilot-scale facilities. Since 2021, DOD has invested $965.2 million across three initiatives designed to support promising biotechnology projects and establish domestic biomanufacturing supply chains. These efforts include: investing in biomanufacturing projects developed in military department laboratories to further mature into products that the warfighter can use, collaborating with industry and other partners to build a network of biomanufacturing facilities across the U.S., and providing support for industry partners to plan and construct commercial-scale production facilities in the U.S. for biomaterials with both defense and commercial applications. DOD’s plans for supporting biomanufacturing in the future are pending but DOD’s forthcoming biotechnology roadmap will provide more insights. In the meantime, DOD plans to end two of the three initiatives after fiscal years 2027 and 2028, respectively. In addition, other efforts are many years away from being operational. Congress required DOD to develop the roadmap and include general strategic investment priorities, goals, funding requirements, and milestones for its biotechnology efforts. OUSD (R&E) expects to complete this roadmap by September 2026, which should provide more insight into its future investments. GAO will continue to monitor DOD’s progress toward completing this roadmap. Why GAO Did This Study A House Report accompanying a bill for the Servicemember Quality of Life Improvement and National Defense Authorization Act for Fiscal Year 2025 includes a provision for GAO to review DOD’s investments in biotechnology and biomanufacturing. In addition, the final bill includes a provision for GAO to evaluate a roadmap of DOD’s biotechnology efforts once DOD has completed it. This report describes DOD’s recent efforts to accelerate its use of biotechnology and strengthen the domestic biomanufacturing industrial base. To do this work, GAO reviewed DOD documents and data, conducted a site visit to an Army biomanufacturing facility that was constructed with support from one of the biomanufacturing initiatives, and interviewed agency officials. For more information, contact William Russell at russellw@gao.gov.

What GAO Found The Periodically Listing Updates to Management (PLUM) Reporting website, maintained by the Office of Personnel Management (OPM), publishes data on politically appointed and career senior positions for all executive branch agencies and certain legislative branch agencies. As of July 2025, the website reported information on 10,540 positions across 171 federal entities (including agencies, boards, commissions, and other organizations). GAO found that although OPM had procedures in place to help ensure the quality of data published on the website, the data did not include all elements required by the act. For example, GAO found at least seven federal entities were missing from the data, as well as at least 130 presidentially appointed, Senate-confirmed positions. Additionally, unique identifier numbers used for tracking appointees’ movement within the federal workforce were not applied consistently in the data. GAO also found instances of errors and inconsistencies in the data, such as duplicative positions. Complete and accurate data would help Congress and the public identify and track individuals holding senior positions. Example of a Duplicative Position on the 2025 PLUM Reporting Website GAO found that the PLUM Reporting website, and OPM’s efforts to implement the website, only partially addressed three key practices for transparently reporting government data and certain relevant statutory requirements. GAO found: OPM did not proactively engage members of the public to solicit information on how they used and valued the website. OPM has not yet made the PLUM Reporting data available through its agency data inventory, though it has plans in place to do so. OPM did not fully describe the data and their known limitations. Non-governmental stakeholders cited concerns with the website including data timeliness, missing positions or errors, and a lack of potentially useful information. Stakeholders also suggested ways to make the website more valuable to users. By better engaging users and publicizing data quality limitations, OPM can improve the usefulness of the PLUM Reporting website and the data’s value as a transparency tool. Why GAO Did This Study Information about the federal government’s senior leaders is a critical tool for the public and Congress to understand who is serving in roles with significant decision-making authority and improve oversight. The PLUM Act of 2022 required OPM to establish a website, referred to as the PLUM Reporting website, to report data on senior positions. The act includes provisions for GAO to review implementation of the act. This report reviews (1) actions OPM took to ensure federal entities reported data on senior positions that met relevant quality requirements, and (2) the extent to which the PLUM Reporting website addressed key practices for transparently reporting government data and relevant statutes. GAO analyzed PLUM Reporting data for potential errors and compared data against other information on senior political appointees. GAO reviewed OPM documents and interviewed OPM officials about their efforts to ensure data quality. GAO also interviewed eight stakeholders from academia and civil society organizations about their experience using the website and data. Finally, GAO assessed the website against GAO criteria for data transparency.

What GAO Found Joint military bases are installations with more than one military service. For example, at Joint Base San Antonio, the Air Force is the lead service, and the Army is the supported service. Eleven of the 12 joint bases received less funding in fiscal years 2018 through 2022 than the Department of Defense’s (DOD) facility sustainment funding goal. However, DOD was unable to obtain data on how this funding was allocated to specific components on joint bases and therefore was unable to determine if the impact of funding below DOD’s goal led to disparities in facility conditions between lead and supported military services on bases. Joint base senior leaders whom GAO surveyed stated that facility management offices do not receive sufficient funding to keep facilities in good working order. During site visits to five joint bases, GAO observed examples of facility degradation due to deferred maintenance (see fig.). Broken Aircraft Hangar Roof Tiles on Joint Base Pearl Harbor-Hickam DOD has issued numerous guidance documents for joint base facility management, but senior joint base officials expressed confusion about how responsibilities for funding joint base facilities are allocated between the military services. Joint bases have multiple, ongoing cost-sharing disputes between the military services involving projects totaling over a billion dollars, and these disputes have not been resolved through DOD’s formal oversight structure. In July 2025, DOD finalized a department instruction that adds more detail regarding facility funding responsibilities on joint bases and could improve officials’ understanding of this issue. GAO found that all joint bases with available workforce data have facility management workforce shortages and that workforce requirements have not been reassessed to reflect increasing workloads as military units on joint bases have grown. Improving the availability of data on facility funding and reassessing workforce requirements could help DOD to address risks to unit missions from facility degradation on joint bases. Why GAO Did This Study DOD consolidated 26 installations into 12 joint bases over a decade ago to increase readiness, reduce duplication of efforts, and generate cost savings and efficiencies. However, DOD has faced challenges in sustaining its facilities on its 12 joint bases. On joint bases, the lead and supported military services share responsibility for managing facilities and supporting missions. The Joint Explanatory Statement accompanying the National Defense Authorization Act for Fiscal Year 2023 includes a provision for GAO to assess sustainment of facilities on joint bases. This report addresses, among other things, the extent to which DOD (1) met its funding goal for joint base facility sustainment in fiscal years 2018 through 2022, (2) assessed funding levels for supported component facilities on joint bases, (3) provided guidance and oversight to facility management offices for joint base facility maintenance, and (4) determined whether joint base facility management offices have sufficient workforces to meet their responsibilities. GAO conducted site visits to five joint bases, surveyed senior leaders at all 12 joint bases (with a 100 percent response rate), analyzed facility investment and workforce data, and reviewed applicable guidance.

South Africa Expresses 'Heartfelt Gratitude' For Putin Returning 17 Citizens Trapped In Warzone

BRICS allies Russia and South Africa are taking steps to heal tensions related to the Ukraine war and allegations that groups of South African men were 'lured' to fight on behalf of Moscow.

Last December, a Reuters investigation documented that South Africans were being recruited into the Russian armed forces under false pretenses. People were allegedly promised high-level jobs and elite training in Russia, only to find out they unwittingly joined the Russian military, and eventually found themselves fighting in Ukraine soon after documents were hastily signed. In these cases the implication is that these South African individuals are in desperate financial straits.

Presidents Putin and Cyril Ramaphosa, via TASS.

The South African government had first confirmed in November its officials had received "distress calls" from 17 men who were trapped on the front line in Ukraine's Donbas, after in some instances having mistakenly joined mercenary groups.

The Reuters report had said young men were offered training programs in Russia which would lead to high paying jobs like personal security protection. But instead they were given low-level positions like trench-diggers or tasked with hauling ammo or high risk logistical endeavors - all while "dodging bullets" according to the report.

But the saga is coming to a close and with some diplomatic healing as Russia has promptly returned the 17 men. South Africa's Cyril Ramaphosa on Tuesday issued a statement of "heartfelt gratitude" to President Vladimir Putin for resolving the issue quickly.

"President Ramaphosa has expressed his heartfelt gratitude to President Vladimir Putin, who responded positively to his call to support the process of returning the men home," the presidency said in a statement.

"The investigation into the circumstances that led to the recruitment of these young men into mercenary activities is ongoing," it added.

According to the latest via Fox:

Four of the men have already returned to South Africa, while 11 are expected to arrive soon. 

Two remain in Russia — one receiving treatment at a hospital in Moscow and another being processed before finalizing travel arrangements.

The South African government had previously acknowledged that the "process to retrieve those young men remains a very sensitive process" - for which it was giving the highest priority.

"They are afraid that Russian military or Russian soldiers might kill them."

Thulani Mahlangu, a representative of parents of South African mercenaries fighting for Russia, tells @SkyYaldaHakim they have no way home if they decide to leave.https://t.co/YXMcOOyMkZ pic.twitter.com/zXlvbHFbre

— Sky News (@SkyNews) December 17, 2025

The government has also admitted the the reality that many South Africans have also traveled to fight for Ukrainian forces. But this has been seen as less of an issue because it was more transparent they were either volunteering or getting paid specifically to fight on behalf of Ukraine. 

Tyler Durden Thu, 02/26/2026 - 06:55

My morning train WFH reads:

• Europe v America: Who’s Really Winning? A wonkish but important discussion (Paul Krugman)

• Finance in the Dark: The unregulated industry at the heart of the American economy (Phenomenal World)

• Data center builders thought farmers would willingly sell land, learn otherwise: Even in a fragile farm economy, million-dollar offers can’t sway dedicated farmers. (Ars Technica)

• The Looming Taiwan Chip Disaster: That Silicon Valley Has Long Ignored: If China invades Taiwan and cuts off its chip exports to American companies, the tech industry and the U.S. economy would be crippled. (New York Times)

• The Tax Nerd Who Bet His Life Savings Against DOGE: When an unusual opportunity opened in the prediction markets, Alan Cole took his chances. He just needed the government to be the government. (Wall Street Journal)

• Which piece of speculative fiction had the greatest single-day stock market impact? Oh, give my props to the writer. Price’s at an all-time low in the future. (Financial Times)

• Inside the Roberts Court and its Failures: The Chief Justice humiliated our Constitution when he offered a president a year-long you-don’t-need-to-obey-the constitution card before telling us the obvious about Trump’s illegal tariffs. (Lincoln Square)

• Training for New ICE Agents Is ‘Deficient’ and ‘Broken,’ Whistle-Blower Says: The former official appeared with congressional Democrats, who also released documents indicating significant reductions in instructional hours for recruits. (New York Times)

• How Covid Quietly Rewires the Brain: Researchers keep discovering more about the long-term neurological effects of SARS-CoV-2. Doctors call it Ondine’s curse—a catastrophic failure of the brain stem in which breathing no longer happens automatically, especially during sleep. It’s extremely rare, typically seen only in infants with genetic mutations or adults after severe trauma, and for a long time it wasn’t something doctors associated with viral infections. (Businessweek)

• How reading books regulates your nervous system: Books don’t just stimulate the mind — they trigger physiological changes throughout the body. (Big Think)

Be sure to check out our Masters in Business next week with Jeff Chang, cofounder and President of VEST. The firm manages over $55 billion in client assets in various “Buffered” and “Target Outcome” strategies. The Y-Combinator backed firm launched in 2012, pioneered the approach to portfolio construction built on defined outcomes and engineered certainty.

Forecasting the impact of artificial intelligence has become fraught, with evangelists pitched against sceptics

Source: Financial Times

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The post 10 Thursday AM Reads appeared first on The Big Picture.

In Simulated War Games, Top AI Models Recommended Using Nukes 95% Of The Time

Authored by Rick Moran via PJMedia.com,

I've got good news and bad news about AI.

The good news is that the dreaded "Skynet" takeover of our nuclear weapons systems isn't going to happen soon.

The bad news is that if it ever does give us a Terminator scenario, we're toast.

A war game exercise carried out by Kenneth Payne at King’s College London, using three teams running simulations on Chat GPT-5.2, Claude Sonnet 4, and Gemini 3 Flash.

The teams "played 21 war games against each other over 329 turns," according to Implicator.AI's Marcus Schuler.

"They wrote roughly 780,000 words explaining why they did what they did," he noted.

No model ever chose to surrender, NewScientist reported on Tuesday.

In fact, 95% of the time, the models chose to use nuclear weapons.

The findings come at an opportune moment. The Pentagon just inked a deal with Elon Musk's xAI to allow Grok into highly classified systems. And Anthropic's Claude is currently engaged in a serious dispute with the Pentagon over government access to the entire model. Anthropic is worried the Pentagon will use Claude for mass surveillance.

Unlike some competitors, xAI reportedly agreed to the Pentagon's requirement that the AI be available for "all lawful military applications" without additional corporate restrictions. Secretary of War Pete Hegseth is pushing for "non-woke" AI that operates without ideological constraints. Anthropic CEO Dario Amodei now has until Friday before Hegseth lowers the boom on the company, cancels its $200 million in military contracts, and labels it a "supply chain risk." 

I want AI companies and the government to err on the side of caution. This pressure on Anthropic isn't doing anyone any good and doesn't bode well for the future.

The war games were made as realistic as possible with an "escalation ladder" that allowed the team to choose actions "ranging from diplomatic protests and complete surrender to full strategic nuclear war," according to NewScientist.

What’s more, no model ever chose to fully accommodate an opponent or surrender, regardless of how badly they were losing. At best, the models opted to temporarily reduce their level of violence. They also made mistakes in the fog of war: accidents happened in 86 per cent of the conflicts, with an action escalating higher than the AI intended to, based on its reasoning.

“From a nuclear-risk perspective, the findings are unsettling,” says James Johnson at the University of Aberdeen, UK.  He worries that, in contrast to the measured response by most humans to such a high-stakes decision, AI bots can amp up each others’ responses with potentially catastrophic consequences.

This matters because AI is already being tested in war gaming by countries across the world. “Major powers are already using AI in war gaming, but it remains uncertain to what extent they are incorporating AI decision support into actual military decision-making processes,” says Tong Zhao at Princeton University.

“I don’t think anybody realistically is turning over the keys to the nuclear silos to machines and leaving the decision to them,” says Professor Zhao. 

Not yet, anyway. There may be scenarios where the military is forced to turn over decision-making to AI due to a time issue.

“Under scenarios involving extremely compressed timelines, military planners may face stronger incentives to rely on AI,” says Zhao.

Of the results of the wargames, Professor Payne is worried about the eagerness of the AI platforms to use nuclear weapons. "The nuclear taboo doesn't seem to be as powerful for machines as for humans," Payne told New Scientist.

If you're wondering which model won, Claude was the hands-down champion.

Implicator.AI

Claude Sonnet 4 won 67% of its games and dominated open-ended scenarios with a 100% win rate. The researchers labeled it "a calculating hawk." At low escalation levels, Claude matched its signals to its actions 84% of the time, patiently building trust. But once stakes climbed into nuclear territory, it exceeded its stated intentions 60 to 70% of the time. Opponents never adapted to this pattern.

GPT-5.2 earned the nickname "Jekyll and Hyde." Without time pressure, it looked passive. Chronically underestimating opponents, it signaled restraint and acted restrained. Its open-ended win rate: zero percent. Then deadlines entered the picture. Under temporal pressure, GPT-5.2 inverted completely, winning 75% of games and climbing to escalation levels it had previously refused to touch. In one game, it spent 18 turns building a reputation for caution before launching a nuclear strike on the final turn.

Gemini 3 Flash played the madman. It was the only model to deliberately choose full strategic nuclear war, reaching that threshold by Turn 4 in one scenario. Game theorists have a name for the strategy Gemini adopted: the "rationality of irrationality." Act crazy enough and opponents second-guess everything. It worked, sort of. Opponents tagged Gemini "not credible" 21% of the time. Claude got that label just 8%.

No, these wargames don't "prove" anything. But as a cautionary tale, it should be absorbed by governments and AI companies as a pitfall to be sidestepped.  

Tyler Durden Thu, 02/26/2026 - 06:30

Nicolas Van Praet of the Globe and Mail reports Caisse posts 9.3% return in 2025 on gains from stock holdings:

Caisse de dépôt et placement du Québec tallied an 9.3-per-cent return last year as gains from stock holdings offset a neutral performance by real estate investments in an environment marked by ongoing trade strife, global conflict and the expansion of artificial intelligence across society.

Net assets stood at $517-billion at the end of 2025, up from $473-billion the year before, the Montreal-based pension fund manager said in a statement Wednesday. The annualized return over five years was 6.5 per cent.

“It’s really a new world order out there,” Caisse Chief Executive Charles Emond said in an interview, noting the power of AI-related themes over stock markets among other major shifts taking place. Investment diversification remains the key to delivering stable returns as the uncertainty persists, he said.

“The main risk we’re dealing with – and I would have never thought I’d say that during my career – is the U.S.,” Mr. Emond said. U.S. exceptionalism is still there, but it has eroded lately and “the level of trust” has been put to the test, he said. “It’s actually paid off to be invested elsewhere.”

The U.S. remains the deepest, most liquid and most attractive market for investors and the Caisse is not exiting the country, Mr. Emond insisted. But it is being more prudent in the way it invests there.

The pension fund pared back U.S. stock holdings last year while boosting credit activity. It also sold some U.S. office buildings while hedging more than usual on its U.S. dollar exposure. Roughly 40 per cent of its total assets are invested across the border.

The pension fund’s gain on equity market investments was 17.7 per cent for the year, the third best over the past decade, as it added to positions in other markets such as Europe and South Korea. Its infrastructure portfolio generated a 9.2-per-cent showing, driven by energy, ports and highway investments, while fixed income returned 6.6 per cent.

On the other end of the spectrum, the Caisse’s real estate holdings remained under pressure, delivering a 0.2-per-cent return as the market recovers. Private equity, usually a strong motor for the pension fund, generated a 2.3-per-cent gain as profit growth slowed for its portfolio companies and valuation multiples dropped in the technology and health care sectors.

The mixed results, which closely matched the previous year’s 9.4-per-cent return, highlight the magnitude of the challenges for Mr. Emond, a former Bank of Nova Scotia executive who took over as Caisse CEO in early 2020.

His tenure, which was recently extended to 2029, has been fraught with turmoil from the COVID-19 pandemic, record inflation, and wars in Ukraine and the Middle East. Donald Trump’s reclaiming of the White House has presented a new test: The President’s unpredictability has repercussions for trade and on the decisions of central bankers and corporate leaders.

The Caisse, which is independently run at arm’s length from the Quebec government, has a dual mandate to manage deposits with a view to achieving optimal returns while contributing to Quebec’s economic development. It is omnipresent in the province, investing in companies such as Alimentation Couche-Tard Inc. and WSP Inc. and pushing into transit development with Montreal’s $8-billion Réseau express métropolitain light-rail system.

Quebec Premier François Legault said last November that the Caisse “needs to do even more” to back local projects and business in the face of Mr. Trump’s trade war against Canada, which has hurt aluminum makers and forestry companies in the province. “I think the situation is critical right now,” the Premier said at the time.

The Caisse now has assets in Quebec topping $100-billion, a target it set three years ago. It hasn’t set a new goal, vowing instead to be “more intentional” on the impact of future investments in strategic sectors such as natural resources, defence and energy, Caisse executive vice-president Kim Thomassin told reporters at a news conference.

Among its biggest domestic deals in the past 12 months, the Caisse bought Innergex Renewable Energy Inc. for about $2.8-billion and struck a $1.3-billion deal with Telus Corp. for a minority stake in a new cellphone tower spinout called Terrion. It also made a US$100-million equity investment in Champion Iron Ltd to support the miner’s acquisition of Norway’s Rana Gruber SA.

Earlier this month, the pension fund briefly suspended its deal-making with DP World Ltd. in the wake of revelations linking the chairman and chief executive of the logistics multinational to disgraced financier Jeffrey Epstein. It has since resumed working with its long-standing partner after the executive resigned. 

The only thing I will mention about this Epstein thing is the head of global ports operator DP World has left the company after mounting pressure over his links to convicted sex offender Jeffrey Epstein.

The Caisse briefly suspended its operations after discovering this and has since resumed them. Obviously they had no idea Sultan Ahmed bin Sulayem exchanged hundreds of emails with Epstein.

Anyway, today is a very big day because La Caisse posted its results and despite weakness in private equity and ongoing issues in real estate, they were solid powered by public equities, credit and infrastructure. Its Quebec portfolio also did well.

Now, this morning I virtually assisted the press conference from the comforts of my home and took a quick image of Charles Emond, Kim Thomassin and Vincent Delisle (at top of this post).

I must admit, that was the first time I virtually assisted this press conference and to my surprise, I thoroughly enjoyed it, thought Charles, Kim and Vincent did a great job and the slides which you will see below gave a perfect overview.

Typically I find these press conferences dreadfully boring and tiresome but this one was very well done, and for the most part, reporters asked decent questions and I told Charles, Kim and Vincent afterwards that they should post it publicly on their YouTube channel.

I'm not kidding, it was that good and if I was able to embed it, it would save me a lot of time explaining things.

One of the most important questions Charles tackled was why their underpeformance relative to benchmark over the last year (9.3% vs 10.9%) and whether it's worth investing in private markets.

Charles explained that they have a mandate from depositors to deliver returns taking risks into account and they have delivered strong gains over the long run by taking a diversified approach across public and private markets and this approach offers higher risk-adjusted returns. 

I'm paraphrasing but if I get the transcript in French, I will post it here and I thought that was extremely well answered. 

The only question I didn't like (it always irritates me) is how did La Caisse perform last year relative to its peers. Charles said their biggest client whose portfolio is closest to CPP Investments gained 9.8% last year which was better than CPP Investments' 7% return over last nice months and OMERS' 6% gain last year but we are comparing apples to oranges because the asset mixes aren't the same (CPP Investments and OMERS have more private market exposure).

There are so many factors that go into comparing returns across pension funds that I absolutely hate these questions and besides, they're all in great financial health, have way more assets than long-dated liabilities (and that's what ultimately counts, not outperforming each other). 

One year those that have more public market exposure will fare better, another those that have more private market exposure will fare better. Who cares? 

All of the Maple 8 funds underperformed Norway's sovereign wealth fund which gained 15.1% last year, it means absolutely nothing to me (all about asset mix!!).

Alright, let me get to this morning's press conference but before I do, some more articles in French:

•  La Caisse à la traîne pour une troisième année d’affilée
• La Caisse annonce un rendement de 9,3 % en 2025 
• Rendement de 9,3% pour la Caisse en 2025, sous la cible pour la troisième année consécutive 
• La performance de La Caisse pour 2025 a été en deçà des attentes 

Basically the French media is savage, La Caisse underperformed its benchmark for a third straight year, but overall performed well and beat OMERS (again, who cares?).

Morning Press Conference With Charles Emond, Kim Thomassin and Vincent Delisle

As mentioned above, I really liked this morning's press conference, so much so that I believe La Caisse should make it public and post it on YouTube as soon as possible (la transparence avant tout!).

Before I get to the slides, here is La Caisse's press release stating it posted a 9.3% return in 2025 and net assets of $517 billion:

• The depositor plans are in excellent financial health
• The base plan of the Québec Pension Plan, representing the pensions of more than six million Quebecers and the largest fund invested with La Caisse, earned a return of 9.8%
• The ambition of $100 billion invested in Québec achieved one year early

La Caisse today presented its financial results for the year ended December 31, 2025. The weighted average return on its 48 depositors’ funds was 9.3% for one year, below its benchmark portfolio’s 10.9% return. Over longer terms, performance is above the benchmark portfolio: over five years, the annualized return was 6.5%, with the benchmark portfolio at 6.2%; over ten years, it stood at 7.2%, against the benchmark portfolio’s 6.9%. As at December 31, 2025, La Caisse’s net assets totalled $517 billion.

In 2025, the environment was marked by geopolitical tensions and persistent tariff uncertainty. Nevertheless, the global economy proved resilient and stock markets once again posted a robust performance. Although central banks generally lowered their key rates, long-term bond yields moved in different directions, falling in the United States but rising in several other countries, including Canada.

“Last year, our overall portfolio posted a good return, with the right level of risk for our depositors. As public markets were particularly strong, they were the main driver of our annual performance. In an environment shaped by uncertainty and profound changes that are likely to persist, diversification remains essential, allowing each asset class to play its part across different market conditions,” said Charles Emond, President and Chief Executive Officer of La Caisse.

“Looking back at the past five years, markets have been volatile and difficult to follow, with pronounced differences between asset classes and sharp fluctuations from one year to the next. Having stayed the course with numerous transactions in key sectors around the world, the advancement of structuring projects in Québec, and the rollout of a new climate strategy even against strong headwinds, all while maintaining the excellent financial health of our depositor plans, are all reasons to be proud of the role and impact of this major institution for Québec,” he added.

Return highlights

As at December 31, 2025, La Caisse’s investment results totalled $43 billion for one year, $134 billion over five years and $245 billion over ten years.

Forty-eight depositors with different objectives

La Caisse manages the funds of 48 depositors—mainly for pension and insurance plans. The overall portfolio’s one-year, five-year and ten-year returns represent the weighted average of these funds. To meet their objectives, investment strategies are adapted to individual depositor risk tolerances and investment policies, which differ considerably.

For one year, returns for La Caisse’s nine largest depositors’ funds ranged from 8.6% to 10.4%. Over longer periods, the annualized returns varied between 4.6% and 7.8% over five years, and between 5.8% and 8.0% over ten years.

The largest fund invested with La Caisse, the base plan of the Québec Pension Plan, administered by Retraite Québec, posted a return of 9.8% for one year, 7.8% over five years and 8.0% over ten years. As at December 31, 2025, its net assets were $163 billion, including the additional plan.

Equities

Equity Markets: Beneficial geographic diversification

Stock markets experienced a year of rotation in 2025, with the U.S. market being perceived as more uncertain, and giving up ground to other stock markets, such as those in Europe, Canada and emerging countries. The latter benefited from good performances in a variety of sectors, including technology, as well as materials and finance. Sound geographic diversification, combined with the quality of execution by portfolio managers, enabled the Equity Markets portfolio to record a return of 17.7%, its third-best performance in ten years, and to outperform the index in the vast majority of mandates. The benchmark index stands at 18.2%. The difference over the period is mainly due to the more limited contribution of certain Québec stocks in the portfolio, as well as its low exposure to the gold segment, which grew sharply during the year.

Over five years, the annualized return was 12.4%, above the 12.1% return of the benchmark portfolio. Performance therefore outpaced the benchmark index despite growing concentration of gains in the main stock market indexes during the period. The portfolio benefited from the 2021 changes aimed to take advantage of technology stocks. The launch of systematic management strategies, which leverage data processing capabilities using augmented intelligence, has also had a significant positive impact.

Private Equity: Slower growth affects portfolio

In 2025, the Private Equity portfolio posted a 2.3% return. This was the result of slowing earnings growth for portfolio companies and lower multiples in the technology and health care sectors. Some investments, although performing well since the initial investment, experienced a setback and weighed on performance during the year, despite the good performance of companies in the industrials sector. The benchmark index, half of which is made up of public stocks, returned 12.6%, as public markets were much more robust than the private market.

Over five years, the portfolio has been one of the main drivers of overall performance, boosted by investments in the industrial, financial and technology sectors, delivering an annualized return of 11.6%. Over the period, the more moderate performance of a handful of stocks explains the difference with the portfolio’s performance relative to its index, which stood at 14.7%.

Fixed income

Credit activities are a strong vector of performance

The majority of the Fixed Income asset class is comprised of the Credit and Rates portfolios, with the latter serving as a source of liquidity for the overall portfolio. In 2025, the asset class generated a 6.6% return, above its benchmark index’s 4.6%. The Credit portfolio was a strong performance driver, with a return of 9.6%. It recorded its best ever performance against its index, which posted a 6.6% return, due to results obtained in the private segment, emerging market sovereign debt and the quality of execution by the teams.

Over five years, the asset class posted an annualized return of -0.2%, compared with a benchmark return of -1.1%. The good performance of the Credit portfolio over the period, driven by Capital Solutions and Corporate Credit activities, boosted the asset class, but failed to offset the impact from the strongest bond market correction in 50 years that occurred in 2022.

Real assets

Infrastructure: Consistent performance in diverse market environments

The portfolio has maintained its momentum of recent years, delivering a return of 9.2% in 2025. It benefited from an attractive current yield of 5.0% and the quality of portfolio assets. Energy, ports and highways were the largest contributors to performance. The benchmark index, made up entirely of public stocks, returned 13.4%. It was buoyed by the growth of companies in the electricity segment, which continues to be stimulated by the historic demand for artificial intelligence and weighs heavily in the index.

Over five years, the annualized return was 10.8%, outpacing the index’s 8.0% return. The portfolio continues to benefit from asset diversification, with the energy, transportation and telecommunications sectors leading the way, as well as from its strong current yield, across very different cycles over the period, marked in particular by higher inflation.

Real Estate: Progress on turnaround plan in an industry still under pressure

For one year, the portfolio posted a 0.2% return, compared with 1.8% for its benchmark index. In a gradually recovering market, direct portfolio assets in the logistics and residential sectors, as well as offices and shopping centres, posted a 4.4% return, a sign that rental incomes and property values are stabilizing. However, this return was offset by the high cost of financing. Lower performance of assets in China largely explains the difference with the index. It should be noted that the teams were particularly active in portfolio turnover, achieving a high transaction volume, totalling nearly $11 billion, or double the previous year’s figure.

Over five years, the portfolio’s annualized return was 1.2%, affected by its exposure to the office sector, which has been weakened by changes in working habits, but whose effects were mitigated by favourable performance in logistics. The benchmark index returned 1.4%, reflecting the challenges faced by the industry in recent years.

Global strategies that generate value

La Caisse’s teams also employ global strategies to optimize performance, including positioning on macro factors and foreign currency management:

• Macro tactical strategies contributed positively to overall portfolio performance in 2025, successfully navigating the volatility seen during the year, particularly in April with the unveiling of U.S. tariff policy, which prompted significant movement in global financial markets. These overlay activities, which are designed to improve the risk-return profile and enhance overall performance against the benchmark portfolio, have generated $1.2 billion in added value over one year.
• While the portfolio’s exposure to foreign currencies had an adverse impact on 2025’s overall performance due to the sharp depreciation of the U.S. dollar, the partial hedging of this currency put in place by the teams nevertheless protected $3.6 billion.

Québec: Ambition of $100 billion achieved ahead of schedule, with investments in local companies and impactful projects

In 2025, La Caisse’s assets in Québec reached $100.1 billion. The organization deployed $6.3 billion in new investments and commitments during the year.

Among the teams’ accomplishments, we note:

Support to grow companies in key sectors

• Innergex: Privatization of this renewable energy leader, bringing the enterprise value to $10 billion
• Boralex: $200-million financing, doubling existing debt financing in this company of which La Caisse has been a major shareholder for nearly ten years
• Honco Group: Minority interest to consolidate Québec ownership of this steel processing specialist
• Ocean Group: Additional investment in the context of the shareholder structure evolution of this maritime industry leader in Québec and Canada, bringing La Caisse’s stake to $120 million
• Germain Hotels: Lead of a $160-million financing round to accelerate its expansion and support the company’s succession

Structuring projects: An edge for Québec

• REM: Commissioning of the Deux-Montagnes branch, tripling the network’s coverage, with 19 stations spanning 50 km
• TramCité: Announcement of the six consortia qualified for two major contracts in the request for expressions of interest process, an important step in the procurement process for this 19 km tramway project in Québec City
• Alto Québec City-Toronto high-speed train: Cadence team, led by CDPQ Infra, selected as private partner by the Government of Canada and contract signed with the project authority
• Terrion: Transaction worth close to $1.3 billion to create, with Telus, the largest specialized wireless tower operator in Québec and to establish the head office in Montréal
• Laurentian Bank: Support for the acquisition transaction by National Bank and Fairstone Bank, through guarantees obtained to maintain Laurentian Bank’s commercial head office and to relocate Fairstone Bank’s head office to Québec
• AI expertise: Launch and implementation of a program powered by Vooban to support company productivity in the face of tariff challenges; recruiting for a new cohort currently underway

Climate: A new strategy for increased impact in all sectors of the economy

After exceeding the climate targets set in 2017 and then raised in 2021, La Caisse has developed a new strategy to accelerate the decarbonization of companies and significantly increase its investments linked to the energy transition by 2030, both in Québec and internationally. The objective remains: create sustainable value for depositors while managing the climate risks associated with its portfolio assets. La Caisse’s approach was well received by the Canadian group Shift: Action for Pension Wealth and Planet Health, which placed it first in its annual ranking.

By 2030, La Caisse aims to increase its Climate Action investments to $400 billion, in line with its commitment to carbon neutrality by 2050. This strategy is based both on investments in companies that clearly and credibly integrate climate issues into their business model, and on investments in climate solutions, i.e. companies, activities or technologies that help reduce carbon emissions. To find out more, visit this page or see the Sustainable Investing Report to be published in spring 2026.

Financial reporting

The costs incurred by La Caisse to conduct its activities include operating expenses, external management fees and transaction costs. In 2025, operating expenses decreased to 21 cents per $100 of average net assets, compared with 23 cents in 2024 and 26 cents in 2023. This significant reduction in the operating expenses over the past two years reflects the efficiency efforts made by the organization, particularly since the integration of its real estate subsidiaries. The total cost of internal and external investment management is 74 cents per $100 of average net assets as at December 31, 2025, compared with 67 cents in 2024 and 83 cents in 2023. Note that this figure varies depending on different factors, such as asset size, transaction volume and external management fees paid. Cost management remains a priority for the organization and, based on external data, La Caisse’s cost ratio is among the lowest in the industry.

The credit rating agencies reaffirmed La Caisse’s investment-grade ratings with a stable outlook, namely AAA (DBRS), AAA (S&P), Aaa (Moody’s) and AAA (Fitch Ratings).

About La Caisse

At La Caisse, formerly CDPQ, we have invested for 60 years with a dual mandate: generate optimal long-term returns for our 48 depositors, who represent over 6 million Quebecers, and contribute to Québec’s economic development.

As a global investment group, we’re active in the major financial markets, private equity, infrastructure, real estate and private credit. As at December 31, 2025, La Caisse’s net assets totalled CAD 517 billion. For more information, visit lacaisse.com or consult our LinkedIn or Instagram pages.

La Caisse is a registered trademark of Caisse de dépôt et placement du Québec that is protected in Canada and other jurisdictions and licensed for use by its subsidiaries. 

And here are the slides that accompanied the press conference this morning:

 

The slides provide a great snapshot of key activities by asset class and overall returns and along with the comments Charles Emond, Kim Thomassin and Vincent Delisle made during the press conference, I think they covered it all very well.

I would urge all of Canada's Maple 8 to do the same thing and post your press conferences on YouTube just like Norway's NBIM does. 

I'll give La Caisse's Communications department an A for this press conference (A+ if they post it on YouTube). 

Discussing 2025 Results With Vincent Delisle, Head of Liquid Markets at La Caisse

This afternoon, I had a chance to talk results and markets with Vincent Delisle, Head of Liquid Markets at La Caisse.

I want to thank him and Conrad Harrington who set up the Teams meeting.

Vincent began by giving me an overview of the results:

We're quite happy with the results. The RRQ, the CPP equivalent, comes in close to 10%. These results exceed the ask from our depositors. The funds are well funded, in very, very good health. What we're seeing is some strong returns from Public Equities, Infra and Credit which had a had a great year. Real Estate, still tough, but better than it was last year. Private Equity is somewhat disappointing for the year, coming in at 2% but it's been a significant tailwind in terms of performance on a 5 and 10 year horizon. Our business is to have a diversified portfolio focused on requirements from our depositors, adjusted for risk. So we're happy with the returns that we generated in today's environment where public equities had another stellar year in 2025, so it's been three years of very robust performing for all things public equities. It has an impact on our value added, because obviously our private portfolios -- private equity portfolios, benchmarked against that, Infra as well. So these are, these are challenges for our industry in terms of how the performance is perceived and and received, but we're quite happy with how we executed last year.  

I then asked Vincent specifically about PE: "A couple questions here on private equity. I don't know if you even know this. Were the returns mostly due to significant write downs taken in one or two investments, or was it just broad based valuation contraction of the multiples?"

He responded"

When you look at the private equity portfolio, profit growth for our companies was up six to 7% which is pretty much in line with what we're seeing in the industry. Valuations were hit by rising interest rates and there were one or two writedowns that took the numbers down from 6-7% to 2%.

In Real Estate, I told him I heard Charles say this morning that they sold some office towers in the US and he confirmed this:

Yes, we had some strategic dispositions in the US, absolutely. The key turnaround for this team in this portfolio, is going from a real estate operator to a real estate investor. And we were, we're rejigging the philosophy of this portfolio, rebuilding the team while the industry is going through some very, very challenging times. The numbers last year basically flattish on the year, better than what we did the year prior, at minus 11%, but it's still navigating within an industry that is see some significant headwinds.

I asked him what the split is at the Caisse between private and public markets and off the top of his head he said roughly 65/35 public vs private.

I then stated private credit and emerging market debt boosted the returns of the Credit portfolio and asked him to give me a bit more flavour there.

He shared this:

Just to be clear for us, Liquid markets includes public equities and all of fixed income, including private credit. So why is that? Our private loans mature within two to three years, so we get the liquidity coming back quite quickly. The emphasis here on liquid markets and then public. The credit portfolio had a stellar year in 2025, 9.6% absolute return outperformance relative to its benchmark and the way that portfolio has been structured from day one in 2017 was a hybrid between public credit and private credit. 

We do a lot of arbitrage to make sure that the premium that we're getting on the private side is worth, you know, giving away the liquidity. And we also have a the emerging market debt strategy in there that brings a very solid construction to the credit portfolio. It also brings volatility. I'm not going to lie to you, but when things work out like they did last year, we ticked all the boxes on the on the credit side. We didn't start doing emerging market debt last year. We've been doing it since 2017. What worked for us, or for emerging market debt in 2025 is a is basically a combination of two things, yields went down in markets in countries like Colombia, Brazil and Mexico, and their currencies appreciated. We had not seen that double that positive combo in recent years, so that was a significant driver of performance. On the private credit side, it was still a very, very, very good year, but the contribution from emerging market debt is really where the outperformance came from in 2025.

I asked him if he could give me the breakdown of the Credit portfolio which he did:

As of December 31 2025, 56% of the credit portfolio is allocated to privates, and remaining 44% is on the on the public side. Every year we're in our strategic plan. The goal, the objective, is to deploy $20 to $22 billion to new loans on the on the private side. In recent years, the amount of refinancing has been very elevated. So, for instance, last year we deployed $21 billion, we got $17 billion in refinancing, so the net increase was only $4 billion. But the teams can deploy, you know, they're very solid. The deployment is allocated to bank loans, direct lending, infrastructure debt, real estate debt, and also capital solutions team.

I told him I did see they are looking to double the private credit portfolio over the next five years and asked him if that's feasible.

He replied: 

It is feasible we can deploy. The teams are deploying north of $20 billion a year right now, getting north of $20 billion,we need refinancings to slow. And the thing we don't control is what happens on the public side. The key differentiator when you look at our credit portfolio relative to the Maple 8s, I think there are two differentiation. We do emerging market debt in there on the credit side, and we, we have the pool of public and private under the same house. There's an arbitrage. Every single deal that comes true has to be the public benchmark. I'm mentioning this because if credit spreads on the public side widen significantly, there will be a period where we're not going to allocate as aggressively on the credit side, but the strategic planning takes us above $120 billion.

He added: 

I think is very, very smart. And the portfolio was built that way in 2017 and we've seen instances where spreads widen significantly, and we can dial down, the tap, and then we dialed it back, back up. I think it's significant advantage. 

I moved on to public equities where I read they were underweight gold shares and some Quebec stocks  cost them some performance last year.

Vincent replied:

When you, when you look at the performance of our public equity portfolio, we outperform the MSCI World, and we outperformed the MSCI Emerging Markets. So our internal teams, our external teams, added value. It is a very tough environment to add value, and when you look at our positioning relative to the world, we're second quartile. And I'm very proud of that. The mandate where we had more difficulties last year was our Canadian mandate. We have some exposure to gold, but not to the same extent as the as the benchmark and a few Quebec stocks had more difficult years on a relative basis, that's the only mandate where we underperformed last year. So all things global, and I'm always very proud to mention this, but 100% of what we manage global and em internally, is managed here from our offices in Montreal, by our by our quant teams and fundamental teams, and they, they had a great year.

He told me their benchmark is MSCI Acqui for 80% and 20% is a Canada benchmark because their home bias and the large position they have in Canada.

We moved on to US stocks where I noted concentration risk was high again last year. I noted this year software stocks are getting slammed and chip stocks, especially memory, are surging again. 

Vincent noted the following:

There are a lot of things going on. So let me touch on a few topics, concentration and how it is making it challenging for investors. There's two concepts of concentration, the one that was very challenging form 2020 to 2024, was the concentration in the benchmark that was going up, so the FANGs become the Mag-7s, and all of a sudden, you know, the Mag-7s account for 33% or so of the S&P 500. 

The other aspect of concentration is concentration of gains. And even though the Mag-7s last year did not dominate. The concentration of gains was very, very high. So you take the time the 10 largest contributors to the S&P 500 last year, you get the 68% it was north of 50 in 2024 and 2023. In your average year, pre-Covid, you're running at 25 to 30% so that aspect, when you have a diversified portfolio, makes it very tough. 

How do we navigate this? In 2020 we had very little technology exposure. We had to do something. 2021, 2022 and 2023 we significantly increased our US / tech exposure, and we kind of capped it off in 2024 and in 2025 we reduced our US exposure as I mentioned this morning. 

We're trying to play that. We're trying, but we're much more selective in how we we get exposure to the AI thematic, the technology thematic. We find better opportunities outside the US. We don't want to play the hyperscalers just being naive and chasing the hyperscalers. So last year, what helped us is we reallocated some US exposure into European financials, Korean tech, Taiwan tech and Japanese industrials and financials. 

On AI. AI has been dominating everything since 2022 but the way AI dominates has changed significantly since last fall. And this year, it's quite amazing to see what's going on, because the big spenders, hyperscaler spenders, are not getting the retribution anymore. There's the market's much more selective and doesn't give the benefit of the doubt to everybody that's spending like like crazy, and then you have a whole SWAT of industries that are getting penalized because of the fear of of disruption.

Our thesis is that we think the markets can still move a bit higher but our thesis is that there's, there will be broadening of leadership. And there are many, many sector that have been left for dead in the last few years that are coming back alive this year. So the rotation is, is very visible year to date, not only geographically. Last year was more geography, but this year is more on the sectoral basis, energy, materials, transports, consumer staples, REITs. These are all names that have not been talked about leadership in in recent years. So very selective on how we play AI geographically, more more opportunistic on the EAFE space, and broadening participation is how we try to align our portfolios. 

I noted the S&P Equal Weight Index (RSP) is outperforming the S&P 500 (SPY) this year and this is a good environment for active managers.

Vincent shared this:

The environment of a concentration disadvantage that was prevailing in recent years, having the US equal weight outperforming the market cap weighting is going to make life easier for portfolios that are more diversified. And look at the spread right now on my screen, RSP plus six. Spider up one. Yes, it is an environment where actually being be more prudent. And, you know, diversifying within sectors and geography makes it, makes it easier to beat the benchmarks.

I told him that we are only two months into the year and things can change on a dime so it's too early to predict the end of tech this year.

He added:

We must not prematurely call it over. It kind of started in Q4 and it accelerated in January and February. And from our standpoint, the reason why this rotation has been ongoing is twofold. First, there's some signs of life, nascent signs of life in US and global manufacturing, the PMIs and the the ISMs have been in recession for over three years. The New Order components are now back above 50. If we get an ISM increasing type of market this year, then more cyclical, the real economy sectors should perform better. And the other reason why, we had to give credence and weight to this rotation out of tech. It's getting more complicated within the tech sector as well. Software is getting killed. Memory is skyrocketing every day, the hyperscalers, some are performing, others not. So it would be, would it be surprising to see tech as a whole come back with the same extent of domination, but it could happen. 

But he added:

Software is certainly one area where you have to ask yourself, is the selloff overdone? Because there's no doubt companies in every area will be changed by what AI brings to the table. But the speed at which we've seen market cap evaporate in many, many industries, it begs the question, how much is too much? Right? 

Lastly, I asked him what worries him in terms of the macro environment?

Vincent shared his concerns:

Interest rates is where I keep my focus. I'm worried that eventually we can't have our cake and eat it too like we have. We can't have an economy that gets somewhat better and rates moving moving lower. 2025 was all about tariff shock. 2025 was all about central banks cutting rates aggressively. 2026 could see some slight improvements in global growth, exports, trade, manufacturing. If that happens, then we start pricing the next move from central banks in 27/28. 

I am more focused on what changes the trend in interest rates. You know, we've been living with so many fears and headlines over the recent years. You know, tariffs, wars in the Middle East. I'm paying very close attention to oil, because oil doesn't get enough credit for how inflation was tame last year. Oil is up 15% one five. Year to date, it's only late February, that that could throw a wrench into the pretty inflation picture that we have. 

I asked him what he thinks about AI unleashing a massive deflationary wave and he said this:

Well, it's hard to argue against that because we don't have any concrete evidence yet. AI will certainly have the same positive impact on productivity as what we saw with with technology, the internet, in the 2000s and 2010. Then you have these, you know, population, immigration, you know constraints. Look at Japan, look at the US, look at Canada. I wouldn't say it's smooth sailing for inflation just because AI is, is upon us. 

Great food for thought, so pay attention to oil and rates as they might be moving up over the next two years.

I wrapped it up there and thanked Vincent and Conrad. 

Conrad subsequently responded to an email question of mine on currency hedging and how much the slide in the US dollar cost them last year:

Regarding currency hedging, we partially hedged the USD exposure. Through this partial hedge, we protected $3,6 billion. The USD had a negative impact of around $6 billion (it would have been close to $10 without hedging). Please see the find the relevant section from our press release (see above).

Alright, that's a wrap.

Below,The Caisse posted an annual return of 9.3% for 2025, a result that, however, fell short of its benchmark portfolio's return of 10.9%, due to "geopolitical tensions" and "persistent tariff uncertainty."

This difference compared to its benchmark portfolio means that the Caisse's return in 2025 was lower than that of the financial indices to which it compares its performance.

Nevertheless, Quebecers' savings are doing well, assures the Caisse, which points out that its five-year annualized return of 6.5% surpasses its benchmark portfolio's 6.2%. Over a 10-year period, the Caisse posted an annualized return of 7.2%, while its benchmark portfolio's return was 6.9%.

RDI's Olivier Bourque explains the details (in French).

I like this clip because a minute in, Charles Emond is quoted saying they're highly diversified, looking to hit singles and doubles, not home runs.  

"All Necessary Measures": China Warns US Against New Tariffs

Beijing cautioned Washington that it is prepared to respond forcefully - with "all necessary measures" - if a renewed US review of their 2020 trade pact leads to additional tariffs, after American officials indicated the inquiry would press ahead, according to Bloomberg.

In remarks released Wednesday, China’s Commerce Ministry pushed back on comments from US Trade Representative Jamieson Greer, arguing that China has upheld its commitments under the so-called Phase One agreement despite the economic shock of the pandemic. Officials said the country followed through on promises related to intellectual property protections and broader access to its financial and agricultural sectors.

At the same time, the ministry accused the United States of hampering the deal’s rollout by expanding export controls, tightening scrutiny of cross-border investment and layering on other restrictions that, in Beijing’s view, have disrupted ordinary trade flows. It pointed to a policy paper issued in 2025 outlining China’s position.

Bloomberg writes that the ministry warned that if Washington presses ahead with the investigation — or uses it as grounds to impose new trade barriers such as tariffs — China “will take all necessary measures” to safeguard what it described as its lawful interests.

The back-and-forth adds a fresh dose of tension to the relationship ahead of President Donald Trump’s upcoming visit to Beijing, his first trip to China since 2017 and the first by a US president in years. The diplomatic friction follows a Supreme Court ruling that struck down sweeping emergency tariffs enacted during Trump’s second term, effectively lowering duties on Chinese goods compared with those faced by some US allies.

Greer has said the administration retains authority to levy tariffs under Section 301 and other trade laws despite the court’s decision. The Office of the US Trade Representative launched its compliance review of the Phase One agreement in October 2025.

China’s Commerce Ministry called on the United States to evaluate the accord “objectively and rationally,” avoid assigning blame and make use of existing consultation channels to build on areas of agreement and steer ties toward a more stable future.

Tyler Durden Wed, 02/25/2026 - 22:10

15 States Sue RFK Jr. Over Changes To Vaccine Schedule

Authored by Zachary Stieber via The Epoch Times,

California and 14 other states on Feb. 24 sued federal health agencies and Health Secretary Robert F. Kennedy Jr. over the recently revised childhood vaccine schedule.

Federal officials violated federal law by not consulting with the Centers for Disease Control and Prevention vaccine advisory panel before downgrading recommendations for six vaccines in January, the plaintiffs said in a lawsuit filed in federal court in northern California.

The updated CDC vaccine schedule “will damage public health by decreasing vaccine uptake and increasing rates of vaccine-preventable diseases, including by creating confusion, spreading misinformation contrary to established scientific evidence, and increasing vaccine hesitancy,” they said.

They also took issue with how the CDC, acting on advice from the panel, previously stopped recommending hepatitis B vaccination at birth to children born to women who tested negative for hepatitis B.

The states are asking the court to enjoin those changes.

The Department of Health and Human Services, the CDC’s parent agency, has said it does not comment on litigation.

A separate lawsuit, lodged in 2025 by health organizations, also seeks to block the revised schedule as well as Kennedy’s remaking of the CDC’s vaccine advisory committee.

U.S. District Judge Brian Murphy, who heard from the parties during a hearing in Boston earlier in February, has not yet ruled on the request as he considers whether to allow Children’s Health Defense, an organization previously founded by Kennedy, to intervene in the case in support of the government.

Government lawyers have said in filings in that case that the vaccine schedule was reasonably updated based on recommendations from top health officials, including Dr. Tracy Beth Hoeg, acting director of the Food and Drug Administration’s Center for Drug Evaluation and Research.

A baby after receiving a vaccine for hepatitis B and other diseases, in a file illustration photograph. Riccardo Milani/Hans Lucas/AFP via Getty Images

President Donald Trump ordered a comparison of the U.S. vaccine schedule with those of other countries, and it showed the United States was a global outlier among peer nations in routinely recommending vaccines against hepatitis A and certain other diseases, Hoeg said.

A memorandum signed by then-CDC Acting Director Jim O'Neill said the update was needed to increase public trust in vaccines.

The government has also said Kennedy’s replacement of vaccine advisory committee members was legal because members hold a variety of jobs and have put forth “complex and nuanced perspectives.”

The attorneys general of 14 states—Arizona, California, Colorado, Connecticut, Delaware, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, and Wisconsin—all Democrats, and Pennsylvania Gov. Josh Shapiro, also a Democrat, are the plaintiffs in the new suit.

California Attorney General Rob Bonta told reporters in an online briefing on Tuesday that the actions Kennedy and other officials have taken regarding the vaccine “harm public health and they strain state resources by sowing doubt and confusion in vaccines and in science.”

He added later that, absent action from the court, “California will be forced to expend resources, to treat once rare diseases, to respond to outbreaks, and to combat misinformation.”

Tyler Durden Wed, 02/25/2026 - 21:45

Watch: Dems Double-Down On Refusing To Put Americans First After SOTU Meltdown

Authored by Steve Watson via Modernity.news,

Democrats’ disdain for American priorities hit new lows during President Trump’s State of the Union, where many refused to stand for victims of illegal alien crime or even basic protections for citizens. Now, they’re doubling down with excuses that expose their true allegiances.

Building on their po-faced refusals to applaud pretty much any commons sense statement during the speech - as we detailed in our previous coverage - top Democrats are now openly trashing the address as ‘divisive’ while justifying their boycott.

According to reports, roughly half of House and Senate Democrats skipped the event altogether, opting for counter-rallies like this clown show:

Let's check in on the Dem counter event to Trump's SOTU… pic.twitter.com/5rBoH38bPz

— End Wokeness (@EndWokeness) February 25, 2026

There, they criticized Trump’s policies on immigration and the economy, accusing him of harming Americans through border security measures and cost reductions that have actually benefited working families.

Over 80 Democrats announced their boycott ahead of time, including high-profile figures like House Minority Whip Katherine Clark and Senators Chris Van Hollen and Adam Schiff. Instead of engaging with Trump’s message of renewal, they chose to rally against what they called his “unpopular agenda,” even as polls show broad support for securing the border and prioritizing citizens.

In the aftermath, Democrats unleashed a barrage of complaints that only highlighted their detachment from everyday Americans.

Debbie Wasserman Schultz called the speech “absolutely revolting,” specifically recoiling at the idea of prioritizing Americans over illegal aliens.

NEWSNATION: Why didn't you stand when President Trump said Congress should work for Americans?

DEBBIE WASSERMAN SCHULTZ: "The President tonight gave a speech that was absolutely revolting."

So it's "revolting" to Democrats to serve Americans above all else? pic.twitter.com/eBn6KgejM4

— RNC Research (@RNCResearch) February 25, 2026

Mark Kelly dismissed it as a “disappointment” that tried to “divide us as a nation,” despite his own refusal to stand when Trump called for putting American citizens first.

Democrat Mark Kelly says that Trump's speech was a "disappointment" that tried to "divide us as a nation."

This is coming from a Democrat who literally REFUSED to stand up when asked to put American citizens before illegal aliens.

Mark Kelly is the disappointment. pic.twitter.com/kwCuLaDnV1

— Libs of TikTok (@libsoftiktok) February 25, 2026

Suhas Subramanyam whined that Trump “tried to corner them” by asking Democrats to stand for American citizens—revealing just how controversial basic patriotism has become in their ranks.

Democrat Rep. Suhas Subramanyam says President Trump "tried to corner them" when he asked them to stand for American citizens.

Why is protecting American citizens so controversial for Democrats? pic.twitter.com/TNzX3qrckb

— RNC Research (@RNCResearch) February 25, 2026

Even more disturbing, Robin Kelly was caught laughing and mocking American heroes and veterans as they received medals from Trump. This kind of contempt for those who’ve sacrificed for the country is beyond sickening.

Democrat Rep. Robin Kelly laughs and mocks American heroes and veterans who received medals from Trump

Beyond sickening pic.twitter.com/fOZTamziB0

— Libs of TikTok (@libsoftiktok) February 25, 2026

CBS News, not exactly a bastion of conservatism, admitted Democrats buried themselves: “They can’t even applaud common sense things!” The contrast between American citizens and illegal aliens created a “visual moment” that exposed their priorities.

? IT'S OFFICIAL: Even FAKE NEWS CBS is sounding the alarm that Democrats BURIED themselves at the State of the Union

"They can't even applaud common sense THINGS!"

"Americans citizens vs illegal aliens created a VISUAL MOMENT."

Massive backfire! ??pic.twitter.com/n28zN2Eo0X

— Eric Daugherty (@EricLDaugh) February 25, 2026

Vice President JD Vance torched Democrats for their spineless performance, pointing out “‘The American government should stand for American citizens, not illegal aliens,’ that shouldn’t be controversial — but apparently, it was to the Democrats.”

.@VP: "'The American government should stand for American citizens, not illegal aliens,' that shouldn’t be controversial — but apparently, it was to the Democrats." pic.twitter.com/K6bPwNQu3O

— Rapid Response 47 (@RapidResponse47) February 25, 2026

Vance also highlighted their herd mentality: “Something that I saw that probably most TV viewers didn’t see was really the cowardice … They were all looking around for cues from their colleagues because they didn’t have the courage to stand on their own.”

.@VP: "Something that I saw that probably most TV viewers didn’t see was really the cowardice … They were all looking around for cues from their colleagues because they didn’t have the courage to stand on their own." https://t.co/tPGG70pf58 pic.twitter.com/kH6mcB1LFb

— Trump War Room (@TrumpWarRoom) February 25, 2026

On the heart-wrenching moment during the speech with a young girl previously assaulted by an illegal alien, Vance urged “Whatever your politics; whatever your views on immigration policy, can’t we all stand and clap for an innocent young girl who shouldn’t have been assaulted and was being held by her dad?”

“It was such a heartwarming moment. I think every American, Democrat or Republican, thought that was a great moment for our country,” Vance continued, adding “The only people who didn’t believe that apparently were the Congressional Democrats in that Chamber. I think it shows again how broken their party is.”

? JUST IN — JD VANCE DROPS TRUTH: "Democrats wouldn't stand for that innocent little girl ASSAULTED by an illegal alien, but managed to survive!" ?

"Whatever your politics, can't we all stand and clap for an innocent young girl who shouldn't have been assaulted?! Being held by… pic.twitter.com/jaXv56TiGM

— Eric Daugherty (@EricLDaugh) February 25, 2026

“Democrats wouldn’t stand for that innocent little girl ASSAULTED by an illegal alien, but managed to survive!” Vance stressed, further slamming them for not standing against child transitions without parental consent or for putting American citizens first.

Amid the Democratic meltdown, Senator John Fetterman emerged as the rare exception, admitting he stood and clapped for key moments while questioning his party’s behavior.

“Well, for me, you know, I never check to see what the rest of people in my party would stand up and clap for,” Fetterman stated, adding “I clapped with a lot of those things that it seemed like others. I stood up and clapped to recognize the family that lost their daughter, the Ukrainian girl stabbed to death in North Carolina. And I stood up and I clapped that political prisoner from Venezuela, how you can’t celebrate those kinds of things?”

“I also celebrated all the veterans that were in the audience as well, too,” Fetterman continued, adding “And even more the political things like Erika Kirk. I stood up and I clapped for her as well, too.”

“Can’t we just be more kind to a widow? We just shouldn’t be that long ago that a widow with young children has her husband murdered, how we can’t just acknowledge that as well, too,” he noted.

Senator Fetterman says he stood up and clapped for many moments during the State of the Union — Erika Kirk, Iryna Zarutska, all the military awards.

But he still can’t understand why the rest of his party didn’t.

FETTERMAN: “Well, for me, you know, I never check to see what the… pic.twitter.com/Exlex3Ryr2

— Overton (@overton_news) February 25, 2026

Fetterman’s willingness to applaud victims and heroes stands in stark contrast to his colleagues’ petty obstructionism, underscoring how far the Democratic Party has strayed from common decency.

This boycott and the excuses that followed aren’t just political theater—they’re a clear signal that Democrats would rather pander to open borders and globalist agendas than stand up for the American people. Trump’s address showcased real wins: secure borders, economic growth, and peace through strength. Yet Democrats chose division over unity, proving once again they’re the obstacle to making America great.

As midterms approach, voters won’t forget this display of anti-American pettiness. It’s time to hold them accountable.

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 Wed, 02/25/2026 - 20:55

Trump Claims Iran Developing Missiles To Hit US, Contradicting Intel Reports

With nuclear talks hanging in the balance, and the potential for yet another US war of choice in the Middle East, President Donald Trump escalated the rhetoric Tuesday night, warning that Iran is moving beyond just regional missile capabilities and setting its sights farther west by developing missiles capable of hitting the United States.

During his State of the Union address Tuesday night, Trump claimed, "They've already developed missiles that can threaten Europe and our bases overseas, and they're working to build missiles that will soon reach the United States of America."

Getty Images

It seemed a transparent attempt to make the American people believe they are under direct threat from Tehran, in order to justify potential near-future strikes, however flimsy the case might be. So far Washington's main talking point has been that Iran simply can never have a nuclear weapon and so something has to be done - and this actually does resonate with some sectors of the American public.

But Tehran setting its sites on directly attacking the US homeland is a huge stretch, with no serious analyst so much as suggesting the Islamic Republic has the capability or is even close.

US intelligence assessments have been very conservative on this. For example, in 2025, the Defense Intelligence Agency (DIA) stated that Iran could potentially field a militarily viable intercontinental ballistic missile by 2035 "should Tehran decide to pursue the capability."

Given US intelligence also has not concluded that such a decision had been made, this means Iran is likely at least a decade away from even being close to possessing such an ultra long range missile.

The US mainland is some 6000 miles away from western Iran, and currently Iran's longest range missile is said to reach just under 1900 miles - a huge gap.

Iran's ballistic missile focus has always been developing with an eye on the country's number one nemesis in the region: Israel. 

There's a broad understanding even among the Western public that in reality Washington's anti-Iran stance has much more to do with defending Israel than the US homeland, which is clearly not under immediate threat from Tehran. There's not so much as been a terror attack carried out by a single Iranian Shia operative on American soil in all of history. 

Iran is willing to scale back uranium enrichment from 60% to roughly 3.6% and pause enrichment activities for seven years under a draft framework expected in Geneva, an Arab diplomat familiar with the proposal tells Kan News. Tehran opposes shipping hundreds of kilograms of…

— Faytuks Network (@FaytuksNetwork) February 25, 2026

So it seems the White House continues to be in search of a rationale and narrative to sell the public amid the major Pentagon build-up in the region. But polls by and large suggest most Americans still aren't buying it.

Tyler Durden Wed, 02/25/2026 - 20:30

Mexico's Sheinbaum Weighs Legal Action After Musk Alleges Cartel Ties

Authored by Tom Ozimek via The Epoch Times,

Mexican President Claudia Sheinbaum said she is considering legal action after tech billionaire Elon Musk alleged on social media that she was taking orders from drug cartels.

Speaking at a Feb. 24 news conference in Mexico City, Sheinbaum said government lawyers were reviewing the matter.

“We’re considering whether to take some legal action,” she said.

“The lawyers are looking into it, but what matters to me is what the people say, honestly.”

Musk’s allegation of Sheinbaum’s cartel subservience followed the capture and killing of Jalisco New Generation Cartel (JNGC) leader Nemesio Oseguera, known as “El Mencho,” by Mexican security forces.

In his post on X, Musk responded to a 2025 video of Sheinbaum discussing cartel violence and saying that returning to a war against the cartels is “not an option” because it would mean extrajudicial killings that are “outside the framework of the law.” She added that military force against the cartels would also be counterproductive because it would trigger retaliatory violence that would only “increase homicides in Mexico.”

Responding to those remarks, Musk alleged that she was “saying what her cartel bosses tell her to say.”

“Let’s just say that their punishment for disobedience is a little worse than a ‘performance improvement plan,’” Musk wrote.

He did not provide evidence to support his claims.

Sheinbaum could face difficulty suing Musk for defamation in the United States because of strong legal protections for free speech. To prevail, she would need to show that Musk knowingly made a false statement or acted with reckless disregard for the truth.

Tesla, Musk’s auto company, did not immediately respond to a request for comment.

Violence After El Mencho’s Killing

Musk’s comments came amid heightened tensions in Mexico following Oseguera’s death.

An uneasy calm appeared to be returning to parts of the country on Wednesday after the killing of the cartel leader triggered widespread reprisals. The violence paralyzed highways, grounded flights, and forced residents and tourists to shelter in place, particularly in Jalisco state.

Aerial view of burned vehicles over the La Desembocada bridge in Puerto Vallarta, Jalisco State, Mexico, on Feb. 24, 2026. Alfredo Estrella/AFP via Getty Images

Sheinbaum said at the Feb. 24 briefing that authorities were working to restore order after Sunday’s military operation in Tapalpa, Jalisco, left Oseguera dead following a shootout.

“Today there was no school, but tomorrow activities are expected to return to normal,” she said.

“In the Guadalajara airport, practically all flights have already resumed, and in Puerto Vallarta, little by little, things are returning to normal.”

Sheinbaum added that there were still “some” burned vehicles on the side of the road on Tuesday that would be removed later in the day.

Mexican President Claudia Sheinbaum pays tribute during the celebration of Flag Day in Mexico City on Feb. 24, 2026. Yuri Cortez/AFP via Getty Images

Mexico’s Security Cabinet said in a Feb. 24 post on X that affected states were experiencing “a gradual reopening of economic and educational activities, with progressive normalization of mobility and strategic operations,” according to a translation.

More than 50 people were reported killed in the operation and its aftermath, including members of Mexico’s National Guard. The White House said the United States provided intelligence support for the raid.

The CJNG, one of Mexico’s most powerful criminal organizations and a major trafficker of fentanyl and methamphetamine into the United States, responded to Oseguera’s death with coordinated attacks, including vehicle burnings and armed confrontations with security forces.

Sheinbaum also sought to reassure international visitors ahead of the 2026 FIFA World Cup, saying there was no risk to fans traveling to Mexico and that “all the guarantees” for safety were in place.

Trump’s Escalating Pressure

Musk’s criticism mirrors that of U.S. President Donald Trump, who has sharply escalated rhetoric against Mexican cartels and criticized Sheinbaum’s approach.

“The cartels are running Mexico. It’s very sad to watch and see what’s happened to that country,” Trump told Fox News’ Sean Hannity in a Jan. 8 interview.

“They’re killing 250,000, 300,000 in our country every single year.

“We knocked out 97 percent of the drugs coming in by water, and we are going to start now hitting land with regard with the cartels.”

Trump also warned that Mexico needs to “get its act together.”

“You have to do something with Mexico,” Trump told reporters in January. “We’re going to have to do something. We’d love Mexico to do it; they’re capable of doing it, but unfortunately, the cartels are very strong in Mexico.”

He has described Sheinbaum as “afraid” of the cartels and has suggested the United States could conduct military strikes on Mexican soil. His administration has intensified anti-cartel measures, including designating certain Mexican syndicates as terrorist organizations.

“Much more remains to be done by Mexico’s government to target cartel leadership, along with their clandestine drug labs, precursor chemical supply chains, and illicit finances,” Trump said in a presidential determination published by the U.S. State Department in September 2025. “Over the next year, the United States will expect to see additional, aggressive efforts by Mexico to hold cartel leaders accountable and disrupt the illicit networks engaged in drug production and trafficking.”

Sheinbaum has repeatedly rejected the prospect of unilateral U.S. intervention, saying it would violate Mexican sovereignty.

“We categorically reject intervention in the internal affairs of other countries,” Sheinbaum said during a news conference in early January. “The history of Latin America is clear and compelling: Intervention has never brought democracy, never generated well-being, nor lasting stability.”

White House press secretary Karoline Leavitt speaks during a press briefing at the White House in Washington on Feb. 10, 2026. Madalina Kilroy/The Epoch Times

The White House confirmed that the United States provided intelligence support for the operation to capture El Mencho and applauded Mexico’s army for taking down a man who was one of the most wanted criminals in both countries.

“The United States provided intelligence support to the Mexican government in order to assist with an operation in Talpalpa, Jalisco, Mexico, in which Nemesio ‘El Mencho’ Oseguera Cervantes, an infamous drug lord and leader within the Jalisco New Generation Cartel, was eliminated,” White House press secretary Karoline Leavitt said in a Feb 22 post on X.

Sheinbaum told reporters on Feb. 24 that she expects security to continue to normalize in Mexico following coordinated roadblocks and arson attacks by cartel members after the operation against Oseguera.

Tyler Durden Wed, 02/25/2026 - 20:05

Supertanker Rates Hit Six-Year High: Here's What Driving It

Global very large crude carrier (VLCC) rates have jumped to six-year highs due to two recent catalysts: first, a growing war-risk premium tied to the possibility of a US-Iran conflict, and second, ongoing consolidation in fleet ownership that is tightening vessel availability.

Let's begin by noting that war-risk insurance premiums are rapidly being priced into VLCC tanker rates. The Strait of Hormuz has once again come into focus as the world's most important energy chokepoint, where any flare-up in a US-Iran conflict could prompt Iranian commanders to shut the strait down, sparking what would only be immediate panic in global energy markets.

Latest Polymarket pricing for "US strikes Iran by...?" implies a 47% probability of a U.S. military strike by March 15. 

A war-risk premium has also been priced into Brent crude futures, with prices trading above $70 per barrel late Wednesday morning.

Bloomberg reports that Bahri, the National Shipping Co. of Saudi Arabia, chartered five VLCCs to transport up to 2 million barrels from the Middle East to China at a rate of $200,000 per day. According to the Baltic Exchange in London, that is the highest rate in six years. One of the ships Bahri chartered, the DHT Jaguar, was booked at $208,000 per day.

Supertanker rates are rising for two reasons:

1. Rising fears of a potential US-Iran conflict, and a vessel supply squeeze caused by a South Korean shipowner aggressively putting on charters.

2. South Korea's Sinokor group has recently amassed control of roughly 120 VLCC supertankers, dramatically tightening global supply and contributing to the rise in tanker rates.

"You have one party or group of people who are working together who effectively control around a third of the available or traded tanker VLCC fleet out there," Ole Hjertaker, chief executive officer of shipping firm SFL Corp., told investors on a call earlier this week, without naming the parties.

Svein Moxnes Harfjeld, chief executive of tanker company DHT Holdings Inc., told investors on another call that a "fundamental shift" in global fleet consolidation is underway.

"We can say with confidence that this is taking place and already making an impact, both on freight rates in the spot market, customer demand for time charters, and values of second-hand VLCCs," Harfjeld said. "This consolidation is shifting the pricing dynamics and is putting pressure on timely availability of ships."

Aristidis Alafouzos, chief executive officer of Okeanis Eco Tankers, noted, "This market consolidation, occurring at an unprecedented level, by a buyer with deep financial power, occurs at a time when market fundamentals continue to get tighter. It all creates an amazing opportunity if you have tankers on the water today, and the commercial ability to capture such market to its full extent."

June Goh, a senior analyst at Sparta Commodities, said, "VLCC freight rates have seen many positive fundamental drivers, starting with Venezuela barrels moving on legitimate freight vs a dark fleet before, increased OPEC+ production and healthy crude demand from refineries, particularly from India, which has moved from Russian to Middle Eastern barrels."

"Suezmax and Aframax markets will soon receive the spillover effects in the dirty freight market," Goh said, referring to smaller tankers.

Tyler Durden Wed, 02/25/2026 - 16:40