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Stock Futures Drop To Close Out August As Oil Jumps On Renewed Iran Hostilities US stock futures dropped in thin trading with most traders out as summer draws to a close, while oil prices jumped after the US and Iran exchanged attacks for first time in weeks. Brent futures rallied almost 4% topping $90-handle and WTI contracts rise above $86 a barrel. As of 8:00am ET, S&P futures dropped about 0.2% and contracts on the Nasdaq 100 dipped 0.1% as most Mag 7 stocks drop while energy stocks rise (CVX +2%, XOM +2%) with as tensions resume in the Middle East. Europe’s benchmark Stoxx 600 equity index edged 0.2% lower, with UK markets closed for a holiday. Asian equities fall across the region. Nikkei sheds almost 1% while the Kospi closed flat, reversing an earlier loss. Hang Seng drifts 0.7% lower and ChiNext is down 1.3%. The dollar weakens against most FX majors. The yen strengthens back below 160/USD following Treasury Secretary Bessent’s BOJ remarks. Offshore yuan is 0.1% firmer after a small manufacturing PMI beat. Treasury 10-year yields are flat at 4.72% after Friday's post J-Hole blowout as the curve bull steepens despite higher energy prices. In commodities, the overnight Middle East attacks are driving oil prices higher with WTI above $85/bbl and Brent above $90/bbl. Elsewhere base metals are outperforming precious even as gold recovered from a $50 drop to trade unchanged around $4,460 an ounce. This week’s macro data include ISM / NFP with NFP one of 2 key prints (CPI) for the Fed to determine a Sept hike. Stronger ISM may boost the broadening portion of the rally. AVGO earnings may boost the Tech / AI theme. In premarket trading, Mag 7 stocks are mostly lower with the exception of NVDA which rises 0.6% after Friday's slide (Apple -0.3%, Meta -0.1%, Amazon -0.4%, Alphabet -0.5%, Tesla -0.6%, Microsoft -0.6%) BioMarin Pharmaceutical (BMRN) rises 4% after the company said it had entered into binding terms with Ascendis Pharma, resolving the patent and ancillary disputes concerning Ascendis’s Yuviwel. Energy stocks (CVX +2%, XOM +2%) rise with oil as tensions spiked in the Middle East, with the US and Iran exchanging strikes for the first time in about a month and Tehran claiming a tanker was hit by mines in the Strait of Hormuz. Kaiser Aluminum (KALU) rises 2% after UBS analyst Alex Stansbury raised the recommendation on to buy from neutral. PG&E (PCG) falls 15% and Edison International (EIX) declines 5.5% as California legislators introduced a bill that would update the state’s wildfire response without shifting liability away from publicly traded utilities. Pinterest (PINS) slips 3% after announcing Chief Financial Officer Julia Brau Donnelly will step down from her role on Oct. 30 after three years with the company. Science Applications (SAIC) rises 8% after the government IT services contractor boosted its revenue guidance for the full year. SLB (SLB) inches 1% higher after agreeing to acquire Kelvion, a firm that provides data center cooling solutions, from investors including Apollo Funds for $3.4 billion in cash. In other corporate news Amgen’s Repatha (evolocumab) reduced the risk of death by 20% in high-risk adults without prior heart attack or stroke, versus placebo, in a pre-specified Phase 3 trial. SpaceX and NASA are delaying the launch of a planned mission to the International Space Station to fix an oxidizer leak in the Dragon spacecraft’s propulsion system. Shein Global Holdings Ltd. priced its IPO in Hong Kong. The fast-fashion retailer raised $1.7 billion, giving it a market value of $26 billion that’s a far cry from the $100 billion it once commanded. The shares fell as much as 17% in gray market trading. US markets are set to open lower in the last trading session of a low-volume August as oil prices jumped on the back of renewed hostilities in the Middle East. A renewed rise in oil prices complicates the outlook for interest rates as investors digest Federal Reserve Chairman Kevin Warsh’s hawkish inflation comments at Jackson Hole. Traders boosted bets on a September rate hike after he spoke, although some market commentators expressed skepticism about such a move. That said, traders already have an eye on the month ahead, with cross-current signals from other assets including bonds, the energy complex and currencies, while conversations on AI capex are never far from earshot.  A lot of weekend commentary was devoted to digesting the Warsh speech at Jackson Hole, with some commentators of the view that it wasn’t as epochal as the volume of attention suggests. Yes, the tone was hawkish, but some bond investors are voicing skepticism about Fed hikes. Warsh said financial conditions aren’t currently restrictive and described rates as the Fed’s “predominant tool” for achieving its mandate, while stopping short of signaling support for a hike in September. Even so, bond investors at ABN Amro Investment Solutions and Brandywine Global Investment Management are skeptical that higher rates will happen The Federal Reserve Reform Act of 1977 lists three objectives: maximum employment, stable prices, and moderate long-term interest rates. The third receives remarkably little attention, with the first two hogging the limelight, notes Gary Paulin of Northern Trust Asset Management. “Could that objective become more important if the other two prove difficult to manage simultaneously?” Paulin thinks it could. Meanwhile, real-world inflation remains in view: Brazil, the world’s biggest exporter of soybeans, cotton, coffee, sugar and orange juice, is about to kick off planting season facing a global diesel crunch colliding with a seasonal spike in demand for the fuel. Goldman Sachs stepped up warnings of tightness in global refining driven by wars in the Middle East and between Moscow and Kyiv, with the bank more than doubling its forecasts for profits from making diesel. Additionally, the US-China AI funding divide remains a perplexing question for investors. While hyperscalers have gone from accounting for 2% of US nonfinancial investment-grade bond issuance in 2025 to 19% this year, China’s AI race is creating no such pressure on yields as its tech firms rely predominately on bank loans and equity financing rather than the bond market. But a resource-hungry AI revolution will require broader funding avenues over the long run. Speaking of AI, SK Hynix is studying the feasibility of a joint venture to make memory chips in Japan to meet surging AI demand while controlling production costs. And Amazon is expected to be the next hyperscaler to tap Australia’s debt market for billions of dollars in capital, according to the Financial Review.  The VanEck Semiconductor ETF (SMH) has increasingly become an expression of semiconductor/AI FOMO, with investors chasing upside through long calls, creating a “vol up/spot up” dynamic at times this year before the recent reversal. And the semiconductor cohort that drove the early summer tech melt-up is giving way to other pockets in tech, as explored in today’s Taking Stock column.  In geopolitics, this week’s G20 meeting in North Carolina is in focus. The US Treasury has excluded journalists from several media outlets, including Bloomberg News, from the gathering. Bessent is said to be pushing the G20 to rethink China trade terms, Reuters reported.   European stocks trade sideways at the start of the week with the Stoxx 600 down 0.1% as oil prices and bond yields rose amid simmering tensions between the US and Iran, and on low volumes, with London closed for a bank holiday.  Here are the biggest movers Monday: Engcon gains as much as 9.5%, the most since July, after Swedish business daily Dagens Industri named the construction equipment firm its stock of the week, recommending readers buy shares in the company InPost trades little changed after its stronger than expected 2Q profitability was overshadowed by a weaker outlook for the remainder of the year, with new EU customs rules on small parcels set to weigh on volumes in Poland Bakkafrost shares fall as much as 7.6%, the most since July, after the salmon farmer reported its latest earnings. SB1 Markets says another weak quarter in Scotland weighs on the result due to “significant” biological issues Asian stocks recovered from earlier declines as South Korean shares swung to a gain, while regional financial companies also advanced. The MSCI Asia Pacific Index was little changed after earlier dropping more than 1%. Korea’s Kospi closed up 0.5%, led by gains in Samsung Electronics and SK Hynix, while China’s CSI 300 Index rose 0.3%. Regional stocks had fallen at the start of trade after Fed chair Kevin Warsh sounded hawkish in his comments at Jackson Hole on Friday. MSCI’s regional equity gauge has risen 3.1% in August, snapping two months of declines.  A gauge of Asia’s bank shares led gains on expectations of higher yields. Energy and utilities stocks also rose on higher oil prices stemming from the US attack on Iranian rocket launchers that were preparing to send mines into the Strait of Hormuz. A gauge of Asia’s bank shares led gains on expectations of higher yields. Energy and utilities stocks also rose on higher oil prices stemming from the US attack on Iranian rocket launchers that were preparing to send mines into the Strait of Hormuz. Warsh had warned inflation isn’t meaningfully slowing and added policymakers must be confident that it is clearly moving to their objective. Otherwise, they “have work to do.” Warsh’s remarks “were the clearest signal yet that the Fed sees inflation, not growth, as the bigger risk right now,” said Billy Leung, an investment strategist at Global X Management. “Markets have quickly repriced September hike odds.” “On the positive story, under the surface is that AI monetization is broadening out,” Leung said. “We saw enterprise software and cybersecurity names post some of their strongest moves of the year on earnings, which tells you the AI trade is no longer just about chips and hyperscalers.” In FX, the dollar weakens against most FX majors. The yen strengthens back below 160/USD following Treasury Secretary Bessent’s BOJ remarks. Offshore yuan is 0.1% firmer after a small manufacturing PMI beat. In rates, treasury 10-year yield eases a basis point to 4.71%. Australian yields are little changed. JGB futures inch slightly lower. In rates, treasuries mixed with the yield curve steeper in thin trading conditions with UK market closed for a bank holiday. Front-end tenors outperform as investors continue to digest Federal Reserve Chairman Kevin Warsh’s hawkish comments on inflation last week in Jackson Hole, which spurred the biggest increase in 2-year yields since June 17 as additional tightening was priced in. Front-end yields are 1bp-2bp richer on the day, long-end tenors cheaper by about 1bp, steepening 2s10s by about 2.5bp, 5s30s by about 2bp, unwinding a small portion of Friday’s dramatic flattening move; 10-year yields are little changed around 4.72% Long-end tenors may benefit over Monday’s session from anticipation of buying related to the month-index index rebalancing at 4pm, which will increase its duration by an estimated 0.10 year.  Regarding Fed policy expectations, around 16bp of tightening remains priced in for the Sept. 16 decision; Barr, Waller and Hammack are scheduled to speak this week before the Sept. 5 start of the external communications blackout around that meeting. IG dollar issuance slate empty so far, and Treasury coupon issuance is on hiatus until next week’s 3- and 10-year note and 30-year bond auctions. In commodities, oil benchmarks are up more than 3%, after tensions rose in the Middle East, with the US and Iran exchanging strikes for the first time in about a month while Tehran claimed a tanker was hit by mines in the Strait of Hormuz. Brent futures rally almost 4% topping $90-handle and WTI contracts rise above $86 a barrel. Gold falls more than $40 to near $4,410 an ounce. US economic data calendar includes August Dallas Fed manufacturing activity at 10:30am; ahead this week are ISM manufacturing and services gauges, JOLTS job openings, ADP employment change and, on Friday, the August jobs report Market Snapshot Top Overnight News Iran and the United States traded attacks for the first time in over a month overnight into Monday. Iran fired missiles toward US military targets in Jordan and the United Arab Emirates in retaliation for a strike on Iranian rocket launchers that the US said were trying to launch sea mines into the Strait of Hormuz. The exchange of strikes came just days after President Donald Trump declared the Strait of Hormuz free from mines and is a break with Washington’s recent shift in focus to maximizing economic pressure on Iran rather than military actions. CNN Iranian leaders are acknowledging the economic toll of war with the U.S., with the supreme leader urging the government to address the hardship and the president saying foreign trade has shrunk by a third due to the American sanctions and blockade. Yet Tehran signaled no retreat on Saturday, ‌vowing to withstand U.S. pressure, pursue diplomacy and maintain what it said was control over the Strait of Hormuz. Reuters President Donal Trump said Friday night the United States has reached an oil agreement with Venezuela, a move he said will “more than double” American oil reserves, increase oil supply and lower gas prices. The deal is said to “secure majority control” of more than 65B barrels worth of oil reserves in Venezuela, or ~20% of the country’s total. CNN / FT U.S. Treasury Secretary Scott Bessent said on Sunday he will encourage G20 members to re-examine terms of ‌trade with China to shrink global imbalances and press Beijing to rebalance its economy away from exports and toward domestic consumption. Bessent said in an interview ahead of a G20 finance leaders meeting that the current flood of exports from China was unsustainable, even though the U.S. direct trade position with China was "rapidly improving." Reuters  China’s official manufacturing PMI remained in contraction in August, suggesting that momentum has yet to rebound after July’s sharp downturn. BBG China will start checking the security of its military supply chains, joining other nations in ramping up self-reliance of their defense industries. Iranian authorities seized an unidentified bulk carrier for polluting waters in the Persian Gulf near Bandar Abbas, state-run Islamic Republic News Agency reports. SK Hynix is exploring a joint venture to make memory chips in Japan to meet surging AI demand, Chairman Chey Tae-won said. BBG South Korea’s industrial production for Jul came in ahead of expectations at +0.2% M/M (vs. the Street -0.5%). BBG Russia’s Defense Ministry said it is planning “massive strikes” on Ukraine’s energy infrastructure, days after launching a devastating attack on a warehouse near Kyiv, amplifying fears of another winter assault. CNBC   September is historically the worst month for Wall St, and traders are preparing for volatility during the coming weeks, with the FOMC meeting on 9/16 potentially a major catalyst. Barron’s  A bipartisan US bill would permanently ban Chinese internet-connected vehicles, and target Chinese software and hardware in US autos: NYT  Geopolitical Update US attacked two missile launchers of the IRGC on Larak Island on Sunday, which were said to be on standby to launch missiles with sea mines toward the Strait of Hormuz, while there were later reports of explosions heard near Larak Island. US Central Command said IRGC claims of US aggression in the Strait of Hormuz are false, but added the US conducted limited precise action against IRGC minelaying forces that posed an imminent threat in the Strait of Hormuz. Iran’s Revolutionary Guards warned the US strike on Larak Island would be met with a response and punishment, while it said several soldiers and civilians were killed and wounded in the assault. Iran's Revolutionary Guards later announced that they retaliated with missiles and drones against two US bases in Jordan and warned that any attack against them will be met with a more devastating response, although a US official cited by Fox News stated no major damage in Iranian attacks on US forces in Jordan and that all missiles were intercepted. Iran's Press TV noted reports of Iran firing missiles towards US vessels in the Strait of Hormuz, and there were reports of explosions heard in the UAE and in Qatar, while Iran's army later said it launched tens of drones at the Al Minhad air base in the UAE. IRGC said a supertanker caught fire and was halted after being struck by two naval mines in the Strait of Hormuz, while it added that the tanker was attempting to pass illegally through the Strait of Hormuz and that ships must comply with its rules for passage. IRGC separately announced that it shot down a US MQ-9 drone over the Strait of Hormuz. Iran's Foreign Ministry said it will respond decisively to any further enemy military aggression, and stated that the US and parties supporting its military actions bear full responsibility for consequences of escalation. US President Trump reiterated in a pre-recorded Fox News interview that Iran cannot have a nuclear weapon and said the Iran blockade has been unbelievable, while he also commented that the US had to intervene in the Middle East to prevent Iran from using a nuclear weapon against Israel and other countries in the region and possibly against the US. US President Trump posted a generated video with the caption "Kharg Island being blown to smithereens!!!" US Treasury Secretary Bessent said the US Treasury plans to impose more Iran secondary sanctions every week, starting with banks. He also stated that they are telling banks it's not okay to have Iranian money and to aid the Iranian regime, and they will probably just sanction a bank outright next time, after the US imposed curbs on an Egyptian bank's United Arab Emirates branches. Iranian President Pezeshkian said they are not looking for war, but will give a decisive response to the aggressors, while he added that instability and unrest in the region are not in the interest of any countries and will create challenges for everyone. Iran's President said on Friday that Iran is ready for cooperation and understanding with regional countries, including Saudi Arabia and the UAE, while it is to open its route if four commitments are met. He also stated that Iran is to increase gasoline prices, and that exports and imports have decreased by up to 35% because of US sanctions and the blockade. US officials said they are monitoring the Strait of Hormuz and will strike any forces that threaten navigation in the waterway, Al Arabiya reported. Iran's IRGC Navy said compliance with regulations issued for the Strait of Hormuz is mandatory and warned against being “misled” by the US, Press TV reported. Yemeni armed forces reportedly targeted Saudi ships in the Red Sea, ISNA reported citing Yemeni media reports. UAE Ministry of Defense denied reports that Al Minhad Air Base was targeted by missiles, calling the claims unfounded and saying it remains on high alert and fully prepared to respond to any threats. Iranian oil operations are continuing on Kharg Island, and the oil sector there has not stopped, Al Hadath reported. A more detailed look at global markets courtesy of Newsquawk APAC stocks were mostly lower heading into month-end and after recent hawkish comments from Fed Chair Warsh at Jackson Hole, while tensions in the Middle East escalated over the weekend after the US and Iran resumed strikes for the first time in over a month. ASX 200 saw mixed price action and was initially kept afloat amid strength in the top-weighted financials sector and with gains also seen in energy, utility and consumer industries, although upside was limited and eventually reversed following disappointing Private Sector Credit and Company Profits data. Nikkei 225 gapped lower at the open to below the 66,000 level, although it was off today's worst levels as participants also reflected on stronger-than-expected Japanese Industrial Production and Retail Sales data. KOSPI retreated amid weakness in its tech heavyweights and with a report noting that day traders are abandoning Korean chip leveraged ETFs in large numbers, with leveraged ETFs targeting twice the daily returns of chipmakers Samsung Electronics and SK Hynix, on course for their first monthly outflow. Hang Seng and Shanghai Comp were subdued, with risk appetite not helped by the latest official PMI data, in which headline Manufacturing topped forecasts, but Non-Manufacturing disappointed and both remained in contraction territory. Top Asian News Japanese government is to request JPY 143tln for the budget (general account) in FY27, Nikkei reported citing sources. South Korean President Lee nominated Lee Hyoung-il as the new finance minister and Kang Shin-chul as defence minister. China’s MOFCOM targets around CNY 60tln in total retail sales of consumer goods by 2030. New Zealand government cancelled fuel tax hike planned for next year. European bourses are mixed to start the week, with Italy's FTSE MIB outperforming while Germany's DAX 40 lags. To note, UK markets are closed today for a Summer Bank Holiday. Little in terms of newsflow; however, the US and Iran exchanged strikes for the first time in around a month at the weekend, with the US targeting Larak Island while Iran struck two US bases in Jordan. Overnight, South Korea's KOSPI gapped lower and traded with losses as much as 3.6%, before reversing and closing with gains of 0.5%. Samsung Securities' Roy Lim explains this reversal by pointing to notable buying by pension funds, primarily in tech names. Lim said pensions bought KRW 120bln worth of shares over a 20-minute period heading into the close. Sectors are mixed. Chemicals top the sector pile, with Autos and Energy completing the sector outperformers. Tech is the laggard, with worries that the Fed hiking rates will drag yields higher and, in turn, weigh on tech. Real Estate and Industrials round out the sector laggards. Top European News German North Rhine Westphalia CPI (Aug MM) 0.2% (Prev. 0.9%). German North Rhine Westphalia CPI (Aug YY) 2.9% (Prev. 2.7%). FX Some USD weakness emerged this morning with DXY falling to a base around 99.50 which is the 50% Fibonacci retracement of the 99.19-99.72 rally seen after Warsh’s speech. Sell side commentary viewed the speech as hawkish, but Morgan Stanley said it was “not convinced it means hikes are coming” while GS said nothing is yet baked in and with focus on incoming data. Some also note algos reacted to Warsh’s use of “hike” within the context of “hikes on the trails”, in his use of a Kohn/Bernanke analogy. Note, month end may be playing a part in some of the moves seen this morning, where Barclays sees moderate USD selling. Action elsewhere paints the picture of the weaker USD, with all majors firmer vs. the Buck. JPY leads with earlier, modest losses accelerated around 160.00 where it fell to a 159.74 base. Data overnight showed better-than-expected Japanese Industrial Production and Retail Sales data, though nothing which moved JPY at the time. EUR keeps focus on French politics where PM Lecornu’s preview of the 2027 budget ruled out tax increases and de-indexing small pensions. In terms of the 2027 presidential election, an Elabe poll showed Le Pen victorious in every run-off tested, while Philippe (centre) currently appears best placed to challenge, polling at around 47.5%. On the left is Mélenchon, whose odds have ticked lower in recent days, perhaps a welcome development to EUR and EGBs. For now, EUR within a thin 1.1578-1.1606 with UK participants away on Bank holiday. To remind, Barclays sees moderate EUR buying vs USD. Fixed Income A contained start to the week for fixed income. The European morning has been particularly quiet, owing to the fact that the UK is away on Bank Holiday. USTs are currently firmer by a few ticks, in 108-01 to 108-09 parameters; note, the initial low went below last week’s trough by half a tick, and any resumption of the move looks to 107-31+ from the last week of July. Overnight, USTs, JGBs and Bunds were all in relatively narrow ranges and ultimately didn't significantly differ from the unchanged mark. Broadly speaking, the main focus was the weekend’s geopolitical updates and particularly US action on Larak Island and then Iranian retaliation. Geopolitics aside, desks remain focused on the speech by Fed Chair Warsh last week, which had a hawkish skew and has contributed to the implied probability of a September 25bps hike increasing to just under 60% currently via CME, vs around 41% one week ago. Bunds reside in the red by a few ticks. Nonetheless, the benchmark holds at the upper-end of 123.43-60 parameters. No move to the German State CPIs, which saw the Y/Y tick up modestly from the prior, in-fitting with consensus for the 13:00BST mainland figure. On Tuesday, we get the Flash EZ HICP series, and given what we have seen so far the energy component may be the most pertinent. Commodities Over the weekend, tensions between the US and Iran escalated after US forces struck IRGC missile and minelaying capabilities on Larak Island, prompting Iran to retaliate with missile and drone attacks against US and regional military targets. Further, Iran reported striking a tanker with mines, downing a US drone and targeting US vessels, while both sides exchanged warnings of further retaliation. President Trump reiterated that Iran cannot obtain nuclear weapons, while Washington is also intensifying economic pressure through additional sanctions. Despite the escalation, Iranian leaders said they do not seek war and remain open to regional cooperation, whilst also warning of a decisive response to further attacks. WTI Oct and Brent Nov futures gapped higher at the open after the US and Iran resumed strikes for the first time in over a month. The contracts are firmer by over 3%, with USD 84.11-86.53/bbl and USD 89.03-91.38/bbl ranges respectively. Dutch TTF surged by some 4% intraday and tested EUR 70/MWh this morning. “Tight supply entering the heating season leaves the market vulnerable to spikes higher later in the year”, ING says. Metals are flat/mixed with the complex somewhat cushioned by the softer USD despite the backdrop of higher energy prices. Spot gold moves closer to its 100 DMA to the downside (USD 4,370/oz) after dipping under Friday’s low (4,445/oz) to trade in a current USD 4,396-4,472/oz range. 3M LME copper trades in a narrow USD 14,223.68- 14,388.55/t. Central Banks Riksbank Deputy Governor Jansson said Sweden’s inflation outlook has become more uncertain after unexpectedly high inflation readings this summer but the Riksbank's have scope to wait before adjusting monetary policy, even if there are some risks of elevated inflation going forward. Jansoon added that Sweden’s economic recovery could prove more persistent than expected but does not currently see signs that Sweden’s economy is at risk of overheating soon. New Zealand NZIER Shadow Board recommended the RBNZ hike the OCR by 25bps to 2.75% at its meeting this week. Geopolitics: Ukraine The EU is to unveil "one of the biggest" Russia sanctions list in retaliation of hybrid threats, with the package to come alongside bilateral measures being prepared by Berlin, POLITICO reported citing sources. Ukrainian President Zelensky is to send top sanctions adviser to Capitol Hill this week in a bid to convince House lawmakers to drop their opposition to the Senate-passed Russia sanctions bill, Punchbowl reported. US Event Calendar 10:30 am: Aug Dallas Fed Manf. Activity, est. 1.6, prior 1.3   Tyler Durden Mon, 08/31/2026 - 08:39

24 States To Sue US Postal Service Over Mail-In Ballot Restrictions When did "election integrity" become such a contentious issue in the US?  Perhaps it was election night in November 2020 when Joe Biden and the Democrats received an impressive "hockey stick" spike in votes after most Americans went to bed.  Most of these votes came from absentee mail-in ballots, an event which inflated Joe Biden's numbers to 81.2 million - The greatest number of votes any candidate has ever received in US history. That's right, the candidate who was rarely seen for half of the campaign cycle and who could barely fill a room during campaign speeches was apparently the most popular candidate of all time.   It's understandable why a large percentage of the public viewed this incident with great suspicion.  In 2024, with covid confusion gone and all eyes watching the polls carefully, Kamala Harris fell short of Biden by 6.3 million votes.  Ironically, many Dems suggested that that the election was "rigged" in Trump's favor because of the sizable discrepancy between Harris and Biden.  They didn't consider the possibility that the 2020 election might have been rigged in Biden's favor, giving him a vote count that probably won't be matched again for many elections to come. Or, maybe Joe Biden really was that charismatic, earning the most votes of all time.  He's a sharp and engaging guy.  In any case, the Trump Administration has made election integrity the centerpiece of its political mission.  Two important policies are at stake:  Voter identification which nearly 80% of the public supports, and limitations on mail-in ballots including tracking and verification to prevent fraud.  Democrats are aggressively opposed to both, calling the measures "racist" and "fascist".  Why?  Probably because they want the option to cheat.  There's really no other explanation for standing against secure voting.  Trump's efforts to pass these rules into law through traditional congressional measures has been met with numerous obstacles, including a small handful of Republicans who are siding with the Democrats.  Trump is now trying alternative pathways. The March 2026 executive order that triggered the USPS rule is titled Ensuring Citizenship Verification and Integrity in Federal Elections. It says unique ballot-envelope identifiers such as barcodes “enable confirmation that only citizens receive and cast ballots, reducing the risk of fraud and protecting the integrity of Federal elections.” The Postal Service also reserves the right to reject ballots without proper verification of legal voter recipients.  Sounds like commons sense, and the Supreme Court has agreed, for now.  The court issued a procedural stay that let the executive order move forward, but the legality remains in question.   Meanwhile, 24 states and the District of Columbia have moved to sue the Postal Service to prevent ballot tracking measures.  The rule would require states to enroll mail-eligible voters in a USPS portal, use USPS-approved ballot envelopes with trackable barcodes, and allow USPS not to deliver ballots that do not meet those conditions. The states argue that this exceeds USPS’s authority, interferes with states’ control of elections, and risks blocking lawful ballots shortly before the November 2026 midterms.  Democrats in multiple states have been rather open about their intentions to allow illegal immigrants to vote in elections.  For example, the D.C. Council (Democratic) passed the Noncitizen Voting Act in 2022. It lets noncitizens vote in local D.C. elections. During House voting to repeal that law (2024 and again June 2025), 148 Democrats voted no - meaning they wanted D.C. to keep illegal immigrant voting in place. Ballot measures help to prevent blue states from skirting federal voting laws when it comes to citizenship.   The blackpill argument in light of voter fraud is that the system is "already too far gone to save", but there's no such thing as an overnight fix.  Such problems take years to develop and they take years to remedy, starting with basic baby steps and fundamentals.  Extensive tracking of mail-in ballots to make sure they're secure and legitimate is a no-brainer.  It should already be law.  The fact that certain groups don't want any verification in place for voting tells us everything we need to know about their intentions.     Tyler Durden Mon, 08/31/2026 - 08:05

Bessent Convenes G20 Finance Chiefs To Confront China's $1.2 Trillion Trade Surplus Treasury Secretary Scott Bessent will meet with G20 finance ministers and central bank governors later today in Asheville, North Carolina, to discuss strategies for reviving economic growth, correcting global imbalances, reassessing trade relationships with China, and addressing the sovereign debt mess. The agenda today will also include plans to deepen Iran's economic isolation, Reuters reported, citing a senior US Treasury official. The discussions signal a continuation of the financial-pressure campaign Bessent unveiled last week (read here). "The world cannot have a China with a $1.2 trillion trade surplus," Bessent told the outlet on Sunday. "The rest of the world is going to have to examine their terms of trade with China." Bessent accused Beijing of attempting to "export its way" out of an economic slowdown by flooding overseas markets with cheap Chinese goods that undermine foreign industrial bases. He said G20 members should pressure China to stimulate domestic consumption rather than dump goods in overseas markets. A Treasury official told Reuters, "And so we're really focusing on this head-on in our G20 discussions to ensure that our economies compete on productivity, innovation, and investment, and not on just sort of policies that push excess production and excess capacity into global markets." The comments from Bessent and the Treasury official echo similar comments from the administration, which is pressuring Beijing to change its export-heavy economic model because of the damage it inflicts on foreign industrial bases. Europe's auto manufacturing base has found that out the hard way with the flood of BYD EVs.  US Trade Representative Jamieson Greer told Axios earlier this month, "We did that for 25 years with our best people, and everything got worse," referring to efforts to persuade China to shift toward greater consumption. The Treasury's warning ahead of today's G20 meeting comes as the Trump administration prepares to impose a 7.5% tariff on Chinese goods over excess manufacturing capacity. The measure would restore Trump's second-term tariffs on China to roughly 20%. Chinese Foreign Ministry spokesman Guo Jiakun told reporters earlier today that any differences with the US should be resolved through dialogue. "China-US economic and trade ties are mutually beneficial in nature," Guo said at a regular briefing in Beijing. "China never seeks a trade surplus and opposes unilateral tariff measures in all forms." Last Monday, Bessent announced "Operation Economic Outcast" against Iran, resulting in sanctions against nearly 60 Iran-linked entities, including many based in China. The objective is to break China's reliance on cheap crude imports from the Gulf region. Politico recently reported that hawkish lawmakers on Capitol Hill have urged the Trump administration to target large Chinese banks to cut off Iran's economic lifeline. The Trump administration appears to be recalibrating its pressure campaign against the world's second-largest economy carefully ahead of President Trump's summit with Chinese leader Xi Jinping next month. We suspect the Trump team is negotiating with China before the meeting, with any meaningful escalation in tariffs or sanctions more likely to follow after the meeting.  Tyler Durden Mon, 08/31/2026 - 07:20

Feds Arrest Foreign National In California On Voter Fraud Charges Authored by Jack Phillips via The Epoch Times, Federal officials on Aug. 28 arrested a foreign national living in California who they say illegally registered to vote and made false statements. Election workers conduct ballot tabulation at the Los Angeles County Ballot Processing Center during California's state primary election in the City of Industry, Calif., on June 2, 2026. Patrick T. Fallon/AFP via Getty Images Darwin Jonathan Rivera Flores, 30, a Honduran national and lawful permanent resident living in Southern California, is accused by prosecutors of making felony false claims of being an American citizen on voter forms. He faces two charges-making a false claim to U.S. citizenship and fraudulent voter registration. Rivera, who entered the United States in 2002, was also accused of physically disrupting federal immigration operations during a protest at the federal office earlier this year in Camarillo, California. For that, he was given a misdemeanor citation before pleading guilty and receiving a one-year probation sentence, said the Department of Justice (DOJ) on Aug. 28. According to the DOJ, Rivera sent a federal agent text messages between April and July, writing to the agent at one point: "Your not the good guy I can't wait until the mid terms you dont have qualified immunity then we can start and indict all you guys one bye one [sic]." Following an investigation, Rivera allegedly was discovered to have registered to vote and proclaimed that he was a U.S. citizen in his 2025 application. Records that were obtained by the California secretary of state and the County of Los Angeles show that the "United States of America" was listed as his birthplace, according to the DOJ. "There is no record of Rivera seeking or obtaining U.S. citizenship," said the DOJ in a news release about his arrest, adding that he hasn't voted in an U.S. election. "Noncitizens who commit fraud so they can vote in American elections do so in violation of federal law and should expect to be prosecuted," said Assistant Attorney General Harmeet K. Dhillon of the DOJ's Civil Rights Division, in a statement. "Let this criminal complaint serve as a reminder that the Justice Department stands ready to enforce the laws Congress enacted to ensure only American citizens vote in federal elections." First Assistant U.S. Attorney Bill Essayli said in a statement that "today's arrest is the first of many to come" in his district. "Because states like California allow non-citizens to easily register to vote and receive a ballot by mail, there is no telling how many non-citizens are currently registered," he added in an X post. Video footage that was included in the U.S. attorney's post showed law enforcement officials surrounding a man who was being handcuffed. It's not clear if Rivera Flores has legal representation who can speak on his behalf. He was expected to make an initial court appearance in the United States District Court for the Central District of California in Los Angeles on Aug. 28. It comes weeks after Essayli announced is office is pursuing several election fraud investigations alongside the FBI to carry out a "comprehensive audit of California's voter rolls" amid questions about the state's election systems. "California's election system has serious structural vulnerabilities," Essayli wrote on X in June. "Universal vote-by-mail with no voter ID requirements creates conditions where fraud can go undetected and unpunished, eroding public confidence." Tyler Durden Mon, 08/31/2026 - 06:30

One Every Minute: These Numbers Are Unsustainable... Authored by Steve Watson via Modernity News, One migrant is now being granted settlement or citizenship in Britain every single minute, according to newly released Home Office figures. In the three months to June 2026, 140,122 foreign nationals were given indefinite leave to remain or British citizenship - 1.07 people every 60 seconds. Across the full year, nearly 200,000 were handed indefinite leave to remain (ILR), a 16-year record and a 24 per cent jump on the year before. Another 245,520 were granted citizenship. Applications to become British hit an all-time high of 315,224. This is the so called "Boriswave" arriving at the welfare office. The people waved in when salary and skills thresholds were slashed are now converting temporary visas into a permanent claim on housing, the NHS, benefits and, in time, the state pension. 'The numbers we see now are a huge increase on where they have been in the last few years.' Research Director at the Centre for Migration Control reacts to Home Office data showing one migrant is being granted settlement or citizenship in Britain every minute. pic.twitter.com/k1PRUEofoH — GB News (@GBNEWS) August 30, 2026 Robert Bates, research director at the Centre for Migration Control, put it without decoration: the numbers are unsustainable, and the damage will have to be undone. ILR is not a courtesy stamp. It is the right to remain for life, to access the same welfare entitlements as a citizen, to apply for social housing, and, after a further year, to apply for a passport. Once that status is issued, reversing it is a political fight the Home Office has spent years refusing to have. Bates told GB News the latest settlement totals are "a huge increase on where they have been in the last few years." In the year to June, he noted, Britain issued around 200,000 grants of settlement - a 243 per cent increase on 2017. Every one of those people, he said, can claim benefits, social housing and NHS care, "and they will all end up being pensioners drawing money from the state." Full segment: "Just one in five of those individuals are actually work main applicants," Bates said. "Over half are family members and dependants, and actually one in seven are refugees. So this idea that they're all going to be economic dynamite and aren't going to make use of Britain's welfare state is pie in the sky thinking." Indian nationals led settlement grants, with Chinese grants quadrupling. The pipeline behind them is larger still. The Home Office's own earned-settlement consultation estimated that between 1.3 million and 2.2 million people will settle in the UK between 2026 and 2030, with a central forecast of 1.6 million and a peak year around 450,000 in 2028. Health and care visa holders who arrived in the post-2021 surge become eligible in a cluster from 2027. That is not a trickle. It is a second population event, baked in before Shabana Mahmood's promised 10-year wait even takes effect. Bates's warning was blunt. "If the Labour Government continues to drag its heels on its reforms to indefinite leave to remain, then we could be facing a catastrophe." Even "the Home Office's conservative estimates suggest a £10billion, or up to several hundred billion pounds." "This is something that simply a country's books cannot afford." While the settlement machine stamps papers, the asylum machine prints invoices. The asylum system cost the British taxpayer £4.3 billion in 2025/26. Official Home Office spending on asylum stood at £4.36 billion in that year. Centre for Migration Control toted up the last ten years at £25 billion spent accommodating, supporting and processing illegal arrivals and asylum claimants. Bates calculated that as £150 a year from every household, an eightfold rise on the bill a decade ago. The asylum system cost the British taxpayer £4.3bn in 2025/26. In the last decade a total of £25bn has been spent on accommodating, supporting and processing illegal migrants/ 'asylum seekers'. This money should have been spent on British priorities. https://t.co/yXA9tSj3hf — Centre for Migration Control (@migrationCtrl) August 28, 2026 Labour's answer is a press release about hotels. Hotel numbers have been cut. At the end of June there were 16,021 people in hotels, half the 32,041 of a year earlier and well below the 56,000 peak of 2023. Fewer than 160 hotels remain in use, against around 400 at the height of the Conservative mess. Thirteen more sites were handed back in August, with ministers advertising £51 million in savings from that batch and £224 million from this year's closures. What they do not advertise is the relocation. 69,038 asylum seekers are now in houses, flats and bedsits - up 4 per cent in a year and double a decade ago. The North West, including Manchester, holds the largest share: 16,349 in dispersed private rentals, almost a quarter of the supported total. Bates wrote that some 73,000 people are now in non-hotel accommodation, up since the election. They are not going into detention. The detention estate has fewer than 2,500 beds. They are going into the street behind yours. Andy Burnham's instruction to the country was that middle-class areas should "play their part" so the "poorest communities" do not take "the lion's share." In practice that means villages such as Piddington - population 350 - being lined up to host hundreds of unvetted arrivals. Hotels were a visible scandal. Houses in multiple occupation are a quieter one. The bill does not shrink because the sign on the door changes from "Holiday Inn" to "dispersal." Mahmood's line is that control is being "restored." "A little over two years into office and the asylum backlog is down, the number of asylum seekers in hotels is falling, illegal working arrests are at record levels, and deportations and returns are up markedly," she said. "Small boats numbers are also now falling, but we are not complacent." The small print tells a different story. 86,000 people claimed asylum in the year to June - down 21 per cent, but still far above the pre-2021 normal. 33,000 came on small boats. Detected illegal arrivals totalled 38,000. Returns of people with no right to be here rose to 41,000, including 6,000 foreign offenders. That sounds like movement until it is set against the stock. More than 210,000 people have crossed the Channel since 2018. Analysis of Home Office figures found 9,694 of those dinghy arrivals had been deported between 2018 and the first half of 2026. Fewer than 10,000 removed in eight years. Bates's assessment of Labour's record on the only number that matters - removal - was savage. "Less than eight per cent of small boat migrants who have arrived under Labour have actually been removed, and this includes, of course, those who were sent to France before sneaking back into the country." He added, that "Since Labour took power, the Home Office has deported more Poles than it has individuals from the top five small boat nationalities combined." The backlog at initial decision has been cut to around 40,000, the lowest since 2019. Appeals have exploded the other way. In March 2023 there were roughly 8,000 cases in the First-tier Immigration Tribunal. By March 2026 the figure was well over 87,000. Applications are being "waved through," Bates wrote, while the courts fill up with a second queue. Failed claimants stay. The boats keep coming because the people in northern France can see the same statistics. "Even if their asylum application is eventually rejected, the human rights framework of this country, along with the Refugee Convention, means they will never be removed." Shadow home secretary Chris Philp accused ministers of shifting the problem, not ending it: "Labour are moving illegal immigrants out of hotels and into flats in your building, and now they are telling them to go and disappear without a trace." The Conservative offer is to leave the ECHR and "deport every illegal immigrant." Reform has gone further and talked about abolishing ILR as a category. Labour's offer is a longer wait, a £10,000 repayment levy for those who later earn, and another round of former barracks. None of that touches the people already being stamped through at one a minute. Settlement and the asylum bill are only half the ledger. The other half is what happens after arrival - and that is the file the government is in court to keep shut. Ministers are spending public money to block the release of conviction data by nationality for England and Wales, the dataset the Centre for Migration Control requested under FOI and the Information Commissioner ordered out. Justice Secretary David Lammy sanctioned an appeal. Families of the dead and the raped asked him to drop it. Alex Whyte, whose sister Rhiannon was stabbed 23 times with a screwdriver by Sudanese small-boat arrival Deng Chol Majek at the asylum hotel where she worked, told GB News she felt "sick, disgusted and completely let down." Anger, she said, "doesn't even cover what I feel, and it never will." Labour, she added, is "too afraid to admit" what open borders have done. "Open your eyes. You are so aware of what is happening, but you are too afraid to admit it." The families' letter to the Justice Secretary stated "Imagine if someone you loved had been attacked, abused, or killed by a person who had entered Britain from abroad." Victims and the public "deserve transparency about the people who enter our country and the crimes they subsequently commit." Withholding the data "damages trust" and blocks "meaningful action." Partial figures already out explain the panic. Foreign nationals accounted for 14.1 per cent of sexual offence convictions in 2025. They made up about 9 per cent of the population and 26.1 per cent of sexual-offence arrests - 3.5 times the British rate. On the railways, CMC's British Transport Police data showed foreigners were 79 per cent of theft arrests in 2025, 40 per cent of drug-offence arrests, 37 per cent of sexual-offence arrests and 36 per cent of violent-crime arrests. Across England and Wales, foreign nationals were arrested 172,889 times in the year to March 2025 - one every 183 seconds. That is why the Ministry of Justice is in a tribunal instead of a press conference. They know a nationality breakdown, published in full, would not produce a seminar. It would produce a reckoning. They know it would trigger mass unrest. So they fight the Information Commissioner with the same Treasury that cannot find an extra nurse and can find £4.3 billion for a system Bates described as "perma-chaos." Net migration has come off the 2023 peak of 944,000. The year to December 2025 was estimated at 171,000. Work visas are down. Study visas are down. Labour waves those charts as proof the fever has broken. Settlement is the delayed charge on the same account. You can slow the inflow and still lock in the stock. You can close a hotel and open a house. You can cut the initial backlog and watch the appeals list triple. You can talk about "earned settlement" while stamping 140,000 grants in a single quarter. Bates's line on the student route captures the wider fraud. Around three-quarters of a million visas are still being issued, with students the largest slice. "We are seeing an increasing trend now of the student visa route being increasingly used not just actually to come and study at a world-beating university, but as a back door into Britain and a long-term migration route." He further noted that more than 60 per cent of people arriving on student visas were still here more than three years after their courses ended. "So there is huge, huge pressure that is being piled already on the British welfare state." That pressure is not an accident of weather in the Channel. It is a policy choice repeated by two governments: admit first, process later, settle always, remove almost never, and treat the public's demand for numbers by nationality as a public-order risk rather than a democratic right. Mahmood says fairness is being restored. Burnham says nicer postcodes must take their share. The Home Office says the hotels are emptying. The stopwatch says otherwise. One grant a minute. Two hundred thousand settlements in a year. A quarter of a million new citizens. A record citizenship queue. A forecast of up to 2.2 million more settlers before the decade is out. Four billion and more on asylum this year, twenty-five billion across ten. Nine thousand-odd Channel arrivals removed from more than two hundred thousand who came. These numbers are unsustainable. The people running the system know it. That is why the crime file stays in the vault, why the hotels become HMOs, and why settlement is being issued faster than the country can absorb, house, police or afford it. 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 Mon, 08/31/2026 - 05:00

Google Retreats On 'Parasite SEO' Crackdown In Europe To Head Off EU Antitrust Fine Alphabet's Google said on Friday that it has changed how it enforces its spam rules in Europe, following concerns from EU regulators that the policy could unfairly hurt news publishers and other websites that carry content from commercial partners. The Google logo outside the company's offices in London on June 24, 2025. Carlos Jasso/Reuters The dispute centers on Google's policy against "site reputation abuse," a practice often called "parasite SEO." It occurs when a third party publishes content on a well-established website primarily to benefit from that site's strong reputation in Google Search and gain higher rankings than the content might receive on its own. Google introduced the policy to target arrangements in which outside companies use trusted websites mainly as vehicles for boosting their search visibility. European regulators, however, raised concerns that Google's enforcement was too broad. They found that the policy was also reducing the search rankings of legitimate publishers simply because their websites contained material produced with, or supplied by, commercial partners. Google said that from August 30, manual actions taken under the policy will no longer apply to users in the European Economic Area - the 27 EU states plus Iceland, Norway, and Liechtenstein. The policy remains unchanged everywhere else. The policy does not apply to ZeroHedge, as Google explicitly distinguishes editorial syndication from “site reputation abuse.” This is different from "parasite SEO" where an outside company places unrelated content on a trusted domain in order to exploit that site's Google ranking strength. And - since Google search algos still hate us with the white hot passion of 1,000 suns, the 'ranking strength' aspect would be moot anyway.  Google has now adjusted its approach in Europe in an effort to address those concerns and avoid a potential antitrust penalty. DMA breaches carry fines of up to 10% of global turnover. The two sides are describing the same climbdown differently. "We welcome the repeal of this policy, which unfairly penalised publishers and other business users of Google Search," Commission spokesman Thomas Regnier said, adding that "thanks to the DMA, Google Search will no longer demote press publications solely for hosting third-party content." Google, for its part, called it an adjustment to "our enforcement approach" - and warned that "an overbroad application of the DMA could prevent us from addressing real threats to the integrity of our search results." Tyler Durden Mon, 08/31/2026 - 04:15

Canadian Leftists Want To Use Great Lakes Seaway As A Weapon Against The US If anyone had any doubt that Canada is a predominantly far-left country, one only need look at polls in support of Market Carney's trade war rhetoric against the US.  Over 70% of the Canadian population is currently in support of Carney's decision to dismiss trade negotiations with the Trump Administration.  Much of the rhetoric online repeats leftist talking points, including the claim that America is now a "fascist" state and cutting a deal with Trump would be the same as "cutting a deal with the Third Reich".       Keep in mind, Carney was so close to a deal with the US that Trump had paused new tariffs and Carney asked premiers to put American liquor back on provincial shelves.  The was two days before he abruptly backed out and abandoned any future talks.  Why?  Theories abound.  The most prominent theory being that Carney has been talking with US Democrats and was convinced to avoid cutting a deal with Trump before the midterm elections in November.  Any deal would be seen as a win for Trump that might boost Republicans.  Other theories cite potential foreign influence from the EU.  Carney was on vacation in Italy just before the negotiations were to finalize and he engaged in a flurry of meetings and calls with European officials just after his trade war decision.  Leftists governments in Europe and communists in China have much to gain by continued tensions between Canada and the US.  It should be noted that the full text of the deal still has not been released to the Canadian public for review.  Opposition Leader Pierre Poilievre called on the Prime Minister to release details of the failed trade deal with the United States and reconvene parliament.  “We need to see the deal that we rejected. Canadians have not seen it,” said Poilievre.        Whatever may have happened to convince Carney to walk away from the best tariff deal that was offered to any country, the aftermath has stirred plenty of Canadian citizens into a hostile frenzy.  One is reminded of Scrappy Doo, yipping and yapping and nipping at the heals of a much larger opponent in the delusion that this will accomplish something.  In the meantime, 33% of Canada's GDP relies on exports and 78% of those exports rely on US markets.  Furthermore, there are no practical alternatives.  Without a near-term deal with the US, Canada faces severe recession, or worse.  Canadian officials and the public have not yet come to accept this reality.  They have been busy conjuring ways to "hurt" the US, but these tactics are based on an ignorance of the bigger picture.  For example, Canadian officials recommended shutting off electric supplies to the US eastern seaboard.  However, Canada provides less than 1% of all US electricity.  Meaning, they have no leverage.  They also called for a shutdown of oil exports to the US, but the US is a net exporter of oil and the largest oil producer in the world.  Going without Canadian oil would cause prices to rise, but it would not do the kind of damage they are hoping for.  Trump's latest landmark deal with Venezuela will mitigate any potential supply disruptions from Canada.     Plus, 70% of Canadian oil traveling from Alberta to Ontario uses pipelines that cross into US territory (the Enbridge Mainline).  It would be a disaster for them to escalate.  This brings us to the newest ingenious idea from Canadian leftists, which is to shut down US access to the St. Lawrence Seaway from the Great Lakes to the Atlantic Ocean.  Or, increase tolls to crippling levels at the various Canadian controlled locks.  Canada is now considering charging a toll for US ships travelling the Straight Of Ontario. pic.twitter.com/jNjLYVaUsA — Dean Blundell🇨🇦 (@ItsDeanBlundell) August 28, 2026 There is a problem with this plan, though.  First, Canada already charges tolls at these locks and has done so for decades.   Every ship entering the Great Lakes goes through the Welland Canal, located fully in Canada. There’s no other option. $26.3 billion of US trade depends on it. Would be a shame if tolls skyrocketed or it was transit-taxed heavily… Thank you for your attention to this matter. pic.twitter.com/CmAfXiToOR — Stephano🍁Barberis (@HelloStephano) August 28, 2026 On the other hand, the US also controls at least two locks on the same waterway which Canadian ships use regularly.  The US government waived collection of tolls on the seaway back in 1986.  Meaning Canada is the only country that collects tolls, but this could be easily changed.  If Canada tried to charge higher tolls or block access, the US could to do the same, and the US has the actual military resources to enforce such measures.   By extension, if Canada tried to initiate a wider resource war against the US, their oil pipelines going through the US could be cut off.  Once again, Canada simply has no economic leverage.  The sooner they accept this, the sooner they can avoid a painful economic decline.      Tyler Durden Mon, 08/31/2026 - 02:45

The Telephone, Political Entrepreneurship, And Theodore M. Vail Authored by Joshua Mawhorter via Mises Institute, Originally, this article was intended to be an exploration as to how-after a period of initial patent monopoly and an all-too-brief episode of freer market competition-cronyism reestablished a telephone monopoly that would last for decades. While such an article is worthwhile and hopefully forthcoming, I was struck by the influence of one man's leadership strategy as president of AT&T/the Bell System and how open he was about limiting competition in his industry, inviting regulation, and seeking a "middle ground" between a pure state-owned monopoly and true free market competition. That man was Theodore M. Vail. This article largely presents Vail in his own words and seeks to demonstrate how transparent he was about inviting state intervention to move his industry toward monopoly. By way of brief introduction, Vail joined the Bell enterprise in 1878 as general manager, helping build the young telephone industry. After leaving in 1887, he returned in 1907 as president of AT&T, where he pursued his vision of "One Policy, One System, Universal Service" and moved the Bell System toward consolidation and government regulation. He provides a quintessential illustration of political entrepreneurship and cronyism in the telephone industry. Historian Burton Fulsom's The Myth of the Robber Barons: A New Look at the Rise of Big Business in America makes the critical distinction between "political entrepreneurs" and "market entrepreneurs" (p. 1): Those who tried to succeed in [business] through federal aid, pools, vote buying, or stock speculation we will classify as political entrepreneurs. Those who tried to succeed in [business] primarily by creating and marketing a superior product at a low cost we will classify as market entrepreneurs. (emphasis added) Along similar lines, Patrick Newman defines cronyism in the following way, "government intervention that benefits special interests at the expense of the public interest." This distinction is critical because it qualitatively differentiates those who succeed through the production-and-exchange mechanism and those who use the political means and cronyism to gain wealth at the expense of the public. Theodore N. Vail: The Beginning of the End of Competition (1907-1913) "Effective, aggressive competition, and regulation and control are inconsistent with each other, and cannot be had at the same time." - Theodore M. Vail, AT&T's 1910 Annual Report On April 30, 1907, Vail rejoined AT&T as president, "marking the beginning of the end of telephone competition." According to Adam D. Thierer in "Unnatural Monopoly: Critical Moments In the Development of The Bell System Monopoly," "His return to the firm changed its fundamental focus from competition to consolidation." Rather than market competition, Vail's most important goals as president of AT&T were "the elimination of competitors, the befriending of policymakers and regulators, and the expansion of telephone service to the general public." Vail pushed for "One Policy, One System, Universal Service." Of course, since this could not be achieved on a free market, or even on a hampered market that allowed a good degree of genuine competition, it had to be achieved by further state intervention. As the above quote from Vail recognized, market competition and "regulation and control are inconsistent with each other, and cannot be had at the same time." Obviously, Vail favored the latter. He went on to state further, "Control or regulation. . .means everything which is the opposite of and inconsistent with effective competition." And, in 1917-after several successful efforts to limit competition through state intervention-Vail declared, These two [competition and control/regulation] are absolutely inconsistent. If the public is getting the fullest advantage of control and regulation, no competition except destructive competition can exist. . . . Under proper control and regulation, complete, соextensive competition could not exist. What follows below are some selected quotes from Vail, in his own words and in context, that express his desire for government intervention and regulation into the telephone industry that would benefit AT&T. The interested reader should note Vail's transparency. Regarding his goal of a universal telephone system and in the context of some competition, Vail wrote in AT&T's 1910 Annual Report, It is not believed that this [a universal telephone system] can be accomplished by separately controlled or distinct systems nor that there can be competition in the accepted sense of competition. It is believed that all this can be accomplished to the reasonable satisfaction of the public with its acquiescence, under such control and regulation as will afford the public much better service at less cost than any competition or government-owned monopoly could permanently afford and at the same time be self-sustaining. Vail's belief, as stated above, was that there should be neither pure market competition nor full state ownership but the soothing and seductive "middle" solution-regulated capitalism or a "mixed market." Of course, this sounds reasonable to many people because they misunderstand or forget the nature of the state and also misunderstand the relationship between the state and big business. The key insight to understand is that state intervention-usually in the name of the "public good"-often purposely benefits big business at the expense of the consuming public. Vail also openly expressed his desire for a monopoly under one system. He believed there would be two acceptable methods by which this could be accomplished: This process of combination will continue until all telephone exchanges and lines will be merged either into one company owning and operating the whole system, or until a number of companies. . .[are] closely associated under the control of one central organization exercising all the functions of centralized general administration. But whatever may be the form of the operating organization, there is bound to be for legal purposes and the holding of franchises, some sort of subordinate state organization which will bring the business and property in each locality under the jurisdiction of the state in which it is situated and operated. Vail opposed full nationalization, instead preferring cronyism. Over time, Vail's wishes were largely granted by the state as AT&T entrenched a monopoly through politics. In 1910, Vail directly argued that regulated companies should be protected from competition. He wrote, If there is to be state control and regulation, there should also be state protection-protection to a corporation striving to serve the whole community (some part of whose service must necessarily be unprofitable), from aggressive competition which covers only that part which is profitable. Governmental control should protect the investor as well as the public. It should ensure to the public good service and fair rates. It should also ensure fair returns to the investor. A public utility giving good service at fair rates should not be subject to competition at unfair rates. Keeping track, state control and regulation should provide protection from "aggressive competition," protect from the profit-and-loss test, assure "fair" returns to investors, and ensure that a firm offering its goods for "fair" rates should be protected from those who offer their services at "unfair" rates (i.e., lower prices). Of course, such high-minded rhetoric-"fair," "striving to serve the whole community"-are arbitrary and simply prejudge the conclusion in favor of whatever AT&T, industry insiders, and government regulators decide. However, Vail reassures us that he is not an enemy of all competition, It is not that all competition should be suppressed, but that all competition should be regulated and controlled. That competition should be suppressed which arises out of the promotion of unnecessary duplication, which gives no additional facilities or service, which is in no sense either extension or improvement, which without initiative or enterprise tries to take advantage of the initiative and enterprise of others by sharing the profitable without assuming any of the burden of the unprofitable parts or which has only the selfishly speculative object of forcing a consolidation or purchase. (emphasis added) Thus, instead of allowing entrepreneurs and consumers to freely interact and decide the landscape of the market based on what goods they produce and value, the extent of alternative competitors, market prices, and profit and loss, competition only ought to be allowed within the range that the state and key firms decide. As opposed to a pure free market and state ownership, Vail argued that regulated capitalism would have all the benefits of both without the disadvantages of either. When thoroughly understood it will be found that "control" will give more of the benefits and public advantages, which are expected to be obtained by state ownership, than could be obtained through such [private[ ownership, and will obtain them without the public burden of either the public office-holder or public debt or operating deficit. It is conceded that as a rule private management is better, more economical and more efficient than public management, and much more advanced and enterprising. When through a wise and judicious state control and regulation all the advantages without any of the disadvantages of state ownership are secured, state ownership is doomed. Apparently, according to Vail, there was nothing to fear, "The proper use of corporate organization or combination under proper regulation or control cannot be objected to." AT&T, Antitrust Danger, & the Kingsbury Commitment (1912-1913) At first, to attempt to achieve his vision of a uniform system under AT&T, Vail began acquiring a number of independent competitors until such activity caught the attention of the federal government because of existing antitrust statutes. Michael K. Kellogg, John Thorne, and Peter W. Huber write in Federal Telecommunications Law (1999), In 1912, fresh on the heels of its victory against Rockefeller, the U.S. Justice Department threatened to take on Vail. There followed a great deal of sound and fury, no doubt reflecting America's traditional populist mistrust of monopoly. In the end, however, government officials would conclude that monopoly in communications was much more tolerable than monopoly in oil. To avoid antitrust lawsuits, Vail orchestrated the Kingsburg Commitment in 1913 (a year with which readers are doubtless familiar for several other reasons). According to industry historian Gerald W. Brock in his book The Telecommunications Industry: The Dynamics of Market Structure (1981), Rather than risk legal action that could be adverse to the system, the Bell system entered into negotiation with the attorney general and in December 1913 reached an agreement known as the Kingsbury Commitment. Correctly assessing the precarious situation of AT&T, Vail tried another-more successful-strategy. The strategy that was reached was essentially an agreement between AT&T and the federal government. AT&T agreed to abandon further acquisitions, sell its Western Union holdings ($30 million), and permit independent telephone companies to interconnect with its system, while the government allowed AT&T to retain its increasingly-dominant position. For Vail, this was a far more favorable alternative to having the government dismantle the Bell System. It constrained AT&T's expansion through acquisition but gave it something far more valuable-the government's acceptance of AT&T's dominant, regulated position in the telephone industry. Richard Vietor writes in Contrived Competition: Regulation and Deregulation in America (1994, p. 172; also quoted in Thierer), Vail chose at this time [i.e., around the time of the 1913 Kingsbury Commitment] to put AT&T squarely behind government regulation, as the quid pro quo for avoiding competition. This was the only politically acceptable way for AT&T to monopolize telephony. . . . It seemed a necessary trade-off for the attainment of universal service. (emphasis added) This was precisely Vail's strategy. Robert W. Garnet-author of The Telephone Enterprise: The Evolution of the Bell's Horizontal Structure-writes (1985, p. 130; also quoted in Thierer), Regulation played a crucial role in Vail's plans. Astute enough to realize that the kind of system he proposed-universal integrated monopoly-would stand little chance of gaining public approval without some form of public control, he embraced state regulation. In doing so, he broke with the company's long-standing opposition to what [AT&T] management had traditionally regarded as an unwarranted intrusion on its prerogatives. But after years of unfettered competition, during which the firm's financial strengths had been sapped and its efforts to build an integrated system had been dangerously undermined, regulation became a much-preferred alternative. (emphasis added) Conclusion All this provides ample evidence of the cronyism and political entrepreneurship within the telephone industry. While speaking of banking in particular, Rothbard provides a simple and profound general insight which every student of economic and political history ought to remember, Fortunately for the cartelists, a solution to this vexing problem lay at hand. Monopoly could be put over in the name of opposition to monopoly! In that way, using the rhetoric beloved by Americans, the form of the political economy could be maintained, while the content could be totally reversed. (emphasis in original) This history also serves to confirm the key insight of Gabriel Kolko's The Triumph of Conservatism, that-contrary to the popular historical narrative concerning the Progressive Era-certain key businesses often invited and helped shape regulations in order to achieve a cartel or a monopoly at the expense of the consuming public. Instead of the government and the consuming public teaming up against big business, the government and big business largely teamed against the consuming public. "Competition was unacceptable to many key business and financial interests," writes Kolko, therefore, the power of the federal government had to be sought to establish monopoly. But don't just take Kolko's word for it, take that of Theodore M. Vail in 1917, We have repeatedly and constantly contended that competition, so far as the public utilities are concerned, is costly, unsatisfactory, undependable. That as an incentive to development or improvement [competition] has passed its period of usefulness, if indeed it ever had any. We have also contended with equal constancy, that with combination of like utilities under proper control and regulation the service to the public would be better, more progressive, efficient and economical than competitive service given by the separate systems. Tyler Durden Sun, 08/30/2026 - 22:10

US Forces Sink Vessel Providing At-Sea Refueling For Cartel: SOUTHCOM Authored by Ryan Morgan via The Epoch Times, U.S. forces, on Aug. 28, sank a vessel in the eastern Pacific that the U.S. Southern Command (SOUTHCOM) said was serving as an at-sea refueling point for drug-trafficking boats. A vessel suspected of providing at-sea refueling for drug traffickers burns after being targeted by U.S. forces on Aug. 28, 2026. U.S. Southern Command SOUTHCOM, which oversees military operations in and around Central and South America, said U.S. forces worked in coordination with the government of Ecuador to track down the vessel. "Intelligence confirmed the vessel, previously identified and targeted under Department of the Treasury sanctions, was operating in support of the Los Choneros violent narco-terrorist organization," SOUTHCOM said in a press statement. Los Choneros is one of more than a dozen Latin American transnational criminal enterprises that the U.S. government has designated as a foreign terrorist organization since the start of President Donald Trump's second term. According to SOUTHCOM, U.S. Marines and sailors launched from the amphibious transport dock ship USS San Antonio to board and search the vessel, and did so without incident. "Individuals removed from the vessel were safely escorted to Ecuador. Once cleared, U.S. forces sank the vessel," SOUTHCOM said. SOUTHCOM has since published footage purporting to show U.S. forces boarding the suspect vessel, as well as footage of the boat being destroyed in a fiery blast. "Today's operation is a stark example of the Americas Counter Cartel Coalition's power to dismantle the sophisticated, clandestine narco-terrorist tactics and capabilities that have enabled the trafficking of dangerous drugs destined for American communities," SOUTHCOM commander Gen. Francis L. Donovan said of the operation. The Americas Counter Cartel Coalition, formed in March of this year, is a military partnership between the United States and other Western Hemisphere nations to disrupt cartel operations. The U.S. military had been taking a more forceful approach to disrupt cartel operations even before recruiting regional partners through the Americas Counter Cartel Coalition. On Sept. 2, 2025, U.S. forces bombed a boat in the Caribbean Sea, which officials said was transporting narcotics, killing 11. It was the first in an ongoing series of strikes on drug boats. U.S. forces have struck dozens more vessels in the Caribbean and eastern Pacific in the past year. Most recently, SOUTHCOM claimed responsibility for a strike in the Caribbean on Aug. 25 that killed four people it identified as members of a drug-trafficking network. The campaign of lethal strikes on boats has met with scrutiny and criticism. Sen. Tim Kaine (D-Va.), in an Aug. 3 letter to the president, said: "A careful review of the available evidence suggests that the United States has killed individuals who are not involved in narcotrafficking." A December report by Human Rights Watch described the campaign of boat strikes as a series of "extrajudicial killings." The family members of two Trinidadian nationals who have been missing since October filed a wrongful death lawsuit against the United States in January. The plaintiffs claimed that the two missing men had been working as migrant laborers in neighboring Venezuela, and had arranged a boat ride home to Trinidad and Tobago, but were likely killed in an Oct. 14 strike by U.S. forces. The U.S. government has not publicly identified any of the individuals they believe to have killed in these boat strikes. Tyler Durden Sun, 08/30/2026 - 21:00

Central Asia Resists US Pressure To Choose Sides In AI Race Authored by Eurasianet via OilPrice, Kazakhstan is continuing to expand AI cooperation with China even after joining the US-led Pax Silica initiative. Uzbekistan says it wants access to both cutting-edge American technology and lower-cost Chinese AI models rather than choosing between them. Their positions illustrate the difficulty Washington faces in persuading Central Asian governments to take sides in the intensifying US-China technology rivalry. Kazakhstan and Uzbekistan are tossing figurative darts at a US trial balloon connected to the intensifying race between the United States and China for leadership in AI development. Reuters reported on August 14 that the US State Department had drafted a note stating that any nation interested in widening access to advanced American know-how and technology in the AI sector under a program known as Pax Silica must refrain from participating in a rival Chinese initiative known as the World Artificial Intelligence Cooperation Organization (WAICO). Kazakhstan is a member of both Pax Silica and WAICO, while Uzbekistan is a signatory to the Chinese initiative while expressing keen interest in expanding cooperation with the United States in AI development. More broadly, the United States has taken steps over the past 18 months to expand economic ties with all five Central Asian states. Actions and statements by Kazakh and Uzbek officials since news of the draft State Department note began circulating indicate that both states are disinclined to adhere to what amounts to an American demand. Kazakh officials have not publicly commented on the issue of the country's participation in both Pax Silica and WAICO, but recent developments suggest Astana is intent on maintaining close contacts with China in the AI sphere. On August 18, experts from the countries' respective academies of sciences agreed to jointly develop a science-focused AI platform to analyze "scientific literature and large data sets, identifying patterns, formulating and testing hypotheses, modeling complex processes, planning experiments, and predicting results," according to a Kazakh government statement. The Kazakhstan and China are also working on an AI initiative called DeepBas, which aims to develop "specialized models" enabling the more efficient management of water resources. Exchange programs are likewise proceeding. Kazakh engineers from the national space company recently participated in a training program in China on using AI to analyze satellite data to improve natural disaster early warning capabilities. In addition, at a recent symposium in Almaty, Chinese and Kazakh researchers discussed AI applications in medicine and agriculture, as well as joint research and training for young AI specialists. Uzbekistan has perhaps been more direct in addressing the brewing AI issue. Speaking at a technology forum in Tashkent on August 24, Bobur Khodjaev, an aide to President Shavkat Mirziyoyev, issued what could be considered a veiled plea for the US to abandon an "us-or-them" stance on AI development. He also stated that Uzbek officials would continue to opt for the best available AI solutions, regardless of national origin. He acknowledged that American tech may be superior but also stressed that China offered more affordable options. "As a developing country, we want to have access to all available technologies," Gazeta.uz quoted Khodjaev as saying. "Specifically referring to the US and China, obviously American tech companies offer cutting-edge AI chips and AI models. China, in turn, offers open-source models that are significantly cheaper than American ones. And we would like to have access to both." "We are open to collaboration with all partners and interested parties and strive to implement artificial intelligence technologies not only in finance but in all areas of our economy," Khodjaev added. Tyler Durden Sun, 08/30/2026 - 19:50