US Reports Biggest Ever Budget Surplus For Month Of September Thanks To Record Tariffs

Those looking for data on the US budget deficit contained in the Monthly Treasury Statement had to wait a few weeks because of the government shutdown, but better late than never, and today at 2pm, the Treasury unveiled the US income statement for the just concluded fiscal year 2025. It was ugly, but not as ugly as it could have been and the month of September was outright impressive. 

Starting at the top with the month of September, the numbers were surprisingly sold: total tax revenue of $543 billion were the highest since April (which is tax-collections month), a 3.2% improvement from a year ago, and pushed the 6-month moving average to a record high $496 billion.

As usual, the vast majority of govt receipts was in the form of individual income taxes ($298BN out of $544BN), with Social Security contributing about a 3rd of the total receipts and Corporate Income Taxes accounting for 11% or $62 billion of the total. 

On the outlays side, here too there were notable improvements, with the US government spending only $346 billion, a sharp from from the $689 billion in August, and down a whopping 25% from the $463 billion last September. Even more remarkable is that the six month moving average of govt spending suddenly slumped from $604 billion - the highest since covid - to $573 billion, the lowest since June 2024. Yes, the improvement may be small, but every little bit helps and whatever Trump is doing to shrink govt spending is starting to show.

As shown in the chart above, the biggest spending categories for Sept were Social Security, Health and National Defense, accounting for $133BN, $94BN and $76BN respectively. What is odd is that net interest was only $37BN which is likely due to some calendar effect and we expect this surprisingly low spending total to catch up in October. But for now we can enjoy the trend even if it is fake.

On a monthly basis, the September surplus was one of the best months in recent history for US government budget...

... and the just concluded month was a record for the month of September, which has traditionally been a strong, surplusy month except in the period following covid.

A big reason for the stellar September surplus is that tariff collections continued apace, and in September the US government collected a record $29.7 billion in tariffs, which translated in a record $195 billion for the fiscal year. And since Trump's tariff regime was only active for 6 of the past 12 month, expect tariffs to deliver about $350 billion in annual revenue every year, unless they are canceled.

Turning to the full fiscal year which concluded on Sept 30, the picture here was less pleasant, with the US spending just over $7 trillion (broken down below) offset by $5.2 trillion in receipts...

... resulting in a full-year deficit of $1.775 trillion which while still high, managed to stage an impressive reversal in recent months. As shown below, until a few months ago, 2025 was set to surpass both 2023 and 2024 in terms of the total deficit. And yet, in September, the belt-tightening meant that the cumulative full year deficit shrank enough to improve on both 2023 and 2024!

That's the good news. The bad news is that the impressive September numbers were largely a calendar effect with much of the outlays delayed until next month, which means October's numbers will be that much uglier. And worse, the exponential increase in total US debt which will surpass $38 trillion in 2 days and $40 trillion in under a year...

... means that the US interest expense continues to be the most dangerous, and rapidly rising, spending category of all: to wit, at $1.22 trillion in the past 12 months, gross interest expense is less than $400 billion away from catching up to Social Security Spending. 

And with annual gross interest unlikely to decline ever again, because while rates may drop, the total amount of debt on which they accrue will only keep rising, it is safe to say that every month and every year we will have a record LTM interest print...

... which is a problem, because tariffs or not, DOGE or not, the US spends 23 cents of every dollar in revenue collected to pay down just the interest on debt...

... and that number will keep rising indefinitely, which is also why gold is now pricing in the coming yield curve control as anything else means game over.

Tyler Durden Thu, 10/16/2025 - 18:00

Harvard Course On Black Women In Politics Omits Prominent Conservatives

Authored by Nancy Bareham via The College Fix,

Conservatives are nowhere to be seen in a Harvard University course focused on black women in politics, according to a copy of the syllabus obtained by The College Fix.

Dr. Mildred Jefferson, the first black woman to graduate from Harvard University's medical school; Courtesy of American Life League

'History 167: Race, Gender, and the Law Through the Archive' praises First Lady Michelle Obama, failed Georgia gubernatorial candidate Stacey Abrams, and Vice President Kamala Harris for having “left their mark on 21st-century politics and grassroots organizing.”

The course says it will examine black women in the 20th century who “shap[ed] politics, grassroots organizing, the legal profession, and higher education during Jim (Jane) Crow and beyond.” Topics include “reproductive rights,” “non-binary people,” and “Black Feminism,” according to the syllabus.

But the course leaves out prominent conservative black women, including one who even made history at Harvard.

Left off of the syllabus are Zora Neale Hurston, Roberta Church, and Dr. Mildred Jefferson. Hurston is an accomplished writer and Republican, while Church served in both the Eisenhower and Nixon presidential administrations. Dr. Jefferson (pictured) was the first black woman to graduate from Harvard’s Medical School and advocated against abortion.

Professor Myisha Eatmon, one of the listed instructors on the course, did not respond to three inquiries made by The College Fix about who the class would study in the past several weeks. She has previously said “racism is a virus and white privilege is a drug,” according to the Washington Free Beacon. After publication of the article, a journalist at another publication informed The Fix that he received an automated response from Eatmon indicating she was on medical leave. The Fix had not received a similar response to past emails.

Students will read from critical race theorist Kimberle Crenshaw, Rutgers University Professor Brittney Cooper, and former Black Panther leader Angela Davis.

Learning objectives including defining “intersectionality,” understanding “the role of Black women in safeguarding reproductive rights leading up to Roe v. Wade and beyond, and “[e]xplain how Jim Crow affected the lives of Black women as individuals at the intersection of multiple identities.”

The course content drew criticism from Brenda Thiam, an ambassador for Project 21. The group advocates for black conservatism and is part of the National Center for Public Policy Research.

“This course sounds like the content only leans towards far left agenda ideologies,” Thiam told The Fix via email.

“The first paragraph spoke only of Black women who are Democrats. Black Democrat women are not the only Black women who have paved the way in the political arena,” she said. Thiam is a former Republican legislator in Maryland.

By limiting the course to cover only liberal women in the world of politics they are denying students a full view of political history, Thiam said.

The former delegate mentioned Secretary of State Condoleezza Rice and deceased Utah Congresswoman Mia Love as two people also worthy of recognition.

“These women were pioneers in the field of politics, and paved the way for other women who have served in politics,” she said.

“They must be included in the course content to ensure course participants receive a full range of political views.”

She said there is still some value to the course, because students will learn “about the work of women in politics who happen to be Black” and “will allow participants to consider their own path in politics as they learn about the work of women in politics.”

Yet, Thiam said, Harvard “must modify the course content to include conservative/Republican women’s views.”

Tyler Durden Thu, 10/16/2025 - 17:40

'Disruptions Come First, Benefits Take Time': Fed Warns Of AI's Imminent Impact On Job Market

Earlier, Richmond Fed President Thomas Barkin told an audience at the Aiken Chamber of Commerce in South Carolina that consumers "are still spending ... we're not in 2022 anymore. Consumers aren't as flush," while also discussing artificial intelligence trends in the labor market. 

"While consumers are still spending, we are not in 2022 anymore. Consumers are not as flush. They are making choices," Barkin said, adding that demand remains strong among higher-income earners. 

Barkin then discussed AI trends reshaping the job market, noting that adoption is ramping up across call centers and in coding roles. He observed a noticeable shift in hiring dynamics, with executives reporting a surge in applicants for every open position.

UBS analyst Nana Antiedu was keeping track of Barkin's comments earlier... 

Barkin's comments come just one day after the Federal Reserve's Beige Book was released, which appeared rather uneventful at first glance. However, one section deserves attention (read here). Here's an excerpt from our note yesterday:

In labor markets, the picture remains one of muted stability and rising wages (thanks to the collapse of labor supply from illegal aliens). One notable change was the discussion of Artificial Intelligence as potentially taking away from labor demand. Oh, just wait: it's only starting... and it ends with Universal Basic Income. Here are the details: 

• In most Districts, more employers reported lowering head counts through layoffs and attrition, with contacts citing weaker demand, elevated economic uncertainty, and, in some cases, increased investment in artificial intelligence technologies.

Also yesterday, Fed Governor Christopher Waller addressed the long-standing debate over whether new technologies destroy or create jobs in Arlington at the DC Fintech Week... 

Whenever a new technology emerges, the first question economists get is about jobs: Will this replace people or make them more productive? The challenge is that, with innovation, there is often a time inconsistency between the costs and the benefits. The disruptions come first; the benefits take time. When a new technology appears, it's always easier to see the jobs that are likely to disappear, but it's much harder to see the ones that will be created. When automobiles came on the scene, it was easy to see that saddlemakers' jobs would disappear. But it wasn't obvious that the saddlemaker's skills could be used to make car seats and that higher-productivity auto production would create many more and much higher-paying jobs. Ten years ago, if I had said something called TikTok would arrive soon, no one would likely have been able to imagine that, or that social media would create what is now an established occupation—influencer.

The pattern appears to be repeating—only faster. A recent study by Stanford economists found that employment has fallen about 13 percent in occupations most exposed to AI, relative to those less affected. Those contractions have appeared mainly in support and administrative roles—fields that tend to be automated first. This early effect from AI is consistent with what I have been hearing from business contacts. Retailers in particular are cutting back on employment for call centers and IT-related occupations. So far, most say this is being handled through attrition, but a number of retailers say that there is the potential for downsizing next year. That is also a message from a New York Fed survey that finds very few businesses are reporting AI-induced layoffs; they are instead using the technology to retrain employees. That said, AI is influencing recruiting for these firms, with some scaling back hiring because of AI and others adding workers who are proficient in its use. Looking ahead, however, layoffs and reductions in hiring plans due to AI use are expected to increase, especially for workers with a college degree.

Returning to my final point, history has shown us that technology improves productivity and our standard of living. We initially always talk about how it will be a substitute for labor. This was the basic premise behind Marx's theory of capitalism—machines would replace humans in production, which would raise unemployment so high that social revolution would occur, leading to the end of capitalism and the rise of a socialist utopia. Yet this theory makes the fundamental mistake of failing to see that capital and labor are complements, not substitutes. More machines mean a firm can produce more output, but that also requires more labor as well. This is obvious just looking at economic data. The U.S. capital stock, measured in constant prices, is seven times larger than it was in 1950. Yet the unemployment rate in September 1950 was 4.4 percent, and it is 4.3 percent as of August 2025. This is why economists are typically techno-optimists—history has repeatedly shown that adopting new technologies leads to economic growth and greater employment, not less. Technological disruption is one form of a concept that economists have studied since Joseph Schumpeter named it in 1942: creative destruction. This topic has never been more relevant, and I note that just last week a share of the Nobel Prize in Economics was awarded to two economists who explored how productivity-enhancing disruption raises living standards

There will surely be losers and winners from AI, but aside from questions about how AI's gains will be distributed, there is the more fundamental matter of how they will be measured, even at a macro level. Firms are using AI to increase productivity, which allows for greater output based on the same level of inputs. This gain is counted in gross domestic product (GDP) and its corollary, gross national income.

In America, one common feature of great technological innovations has been an onslaught of competition that has rapidly driven down costs and resulted in rapid and widespread adoption. If hardware and software innovation continue to drive down the cost of AI, then I see few barriers to its ongoing proliferation throughout the economy. That prospect, clearly, is driving the surge of AI investment we have seen. Will it continue? That will depend, in part, on whether AI delivers on the productivity increases that some believe it will bring.

Building on a recent Goldman report, the current adoption rate stands at roughly 9.2% economywide. Skeptics like Elliott Management have called this AI cycle "overhyped." 

However, a team of Morgan Stanley analysts recently told clients that "AI impacts may take longer to appear in economic data," with the first real signs not expected until "later this decade and into the next."

"While AI adoption may be faster than past technologies, we think it is still too early to see it in economic data, outside of business investment," Stephen Byrd told clients. 

What's evident is that the early signs of AI job displacement are underway. We've done the hard work to figure out this trend with more details found here:

• AI Will Lead To 300 Million Layoffs In The US And Europe

• 200,000 Wall Street Jobs At Risk As "Agentic" AI Becomes "Major Breakthrough"

• Goldman Identifies Next Industry AI Will Disrupt

• Here Are The Jobs That Will Be Displaced By AI

• Morgan Stanley: AI Adoption Rate To Outpace Past Tech Cycles, But Measurable Economic Impact May Not Arrive Until Late Decade

• Billions Spent On Data Centers - But Where Is The AI Adoption Rate?

Fund UBI stimmies with tariffs? 

Tyler Durden Thu, 10/16/2025 - 17:20

How Trump Crushed The Left's Media Machine

Submitted By Thomas Kolbe

Donald Trump is the master of memes — and of the media. No modern political figure understands better how to energize the long-humiliated conservative-patriotic soul that has been crushed for decades by a left-liberal media zeitgeist. His Gaza performance is the latest chapter in the ongoing media revolution of our time.

Peace in Gaza. The guns have fallen silent between Israel Defense Forces and Hamas. What was unthinkable for decades has happened: a historic breakthrough. Hostage and POW exchanges — all brokered by U.S. President Donald Trump.

The achievement alone commands extraordinary respect. But with Trump now mediating in Armenia-Azerbaijan, between Israel and Iran, and pressing ahead with unfinished work in Ukraine, a Nobel Peace Prize would seem almost inevitable.

And Trump, ever the media virtuoso, translated this geopolitical power move into the perfect, iconic imagery.

Trump Plays the Media Like a Grand Piano

Whether delivering his address in the Knesset or receiving European leaders and global political elites, the spectacle was unmistakable: a parade of dignitaries bowing before the American president — a display directed not just at European audiences but at the power brokers of the Arab world as well.

The scene recalled the now-famous White House moment during the Ukraine debate: Ursula von der Leyen, Friedrich Merz, Keir Starmer, and Emmanuel Macron lined up like schoolboys at the teacher’s desk, listening to the president.

The moment culminated in Trump’s demonstrative handshake with Macron — a symbol of Europe’s complete submission to Washington’s dominant player.

Total Dominance

The world witnessed it in real time: Trump controls the iconography of power like no one else. He projects himself as the new ordering force in the Middle East, backed by allies like Saudi Arabia, now tied to Washington through billions in investment. Traveling aboard Air Force One between Washington, Tel Aviv, and Sharm el-Sheikh, he turned diplomacy into a livestream event.

Europe, once the colonial power in the region, was reduced to a spectator role. Even the congratulatory statements from European heads of state looked awkward against Trump’s monologue. His media strategy leaves no room for co-stars. This is a one-man show. And Trump plays the lead.

A Masterclass in Iconography

The list of Trump’s choreographed power moves is long. Remember the handshake with von der Leyen sealing the U.S.-EU trade deal? It was all about the image.

He hosted his European counterparts at his private golf resort in Scotland, flying them in via his personal helicopter — no military escort. Everything followed a scripted, perfectly timed playbook. The message: America is back on top.

Europe, dimmed to its real geopolitical size, played second fiddle. The era of European globalism sneaking through the American back door — via forums like World Economic Forum — is over. So is the age of U.S. presidents pushing the European climate agenda, from Bill Clinton to Barack Obama to Joe Biden. Trump is burying the CO₂ climate cult in America once and for all.

The Second Declaration of Independence

Repeatedly, the same image played out: in the Oval Office, Trump signs executive order after executive order, driving his cabinet to implement a deregulation blitz — a second Declaration of Independence from the Old Continent.

Another media bombshell followed on April 2: in the Rose Garden, Trump declared a global tariff war. Through a few bold, poster-sized charts, he ended an era: the era of free riding on the dollar system was over.

Two days after the last London Interbank Offered Rate (LIBOR) contract expired, the pricing of dollar credit returned to Washington’s control via the Secured Overnight Financing Rate (SOFR).

Beyond Symbolism

Most Europeans still don’t grasp the signal: the U.S. will no longer let itself be hitched to Europe’s geopolitical cart — certainly not to die on European battlefields again. Not in a war with Russia that isn’t in America’s strategic interest.

The Trump-Putin media plot in Alaska made that message unmistakable.

Trump’s power lies in his ability to dominate narratives, shape symbolic language, and project an unapologetic American patriotism. Europe’s reaction is defensive: through Digital Services Act, Digital Markets Act, planned chat controls and digital IDs, Brussels tries to claw back control of the narrative by brute bureaucratic force. But against Washington’s renewed self-confidence and civic model, the Eurocrats look like yesterday’s men.

The Butler Moment

The turning point came in Butler, Pennsylvania: after the assassination attempt, Trump, bloodied and defiant, raised his fist and shouted “Fight! Fight! Fight!” in front of the American flag. That image burned itself into the national psyche. It was a declaration of war against cultural Marxism — the ideological core of Europe’s eco-socialist movement.

Trump had cracked the media code long before that. From flipping burgers at McDonald's to posing as a garbage truck driver — it wasn’t cheap campaign theater. It was strategic authenticity, in stark contrast to the aloof eco-socialist bureaucrats.

The result: attention shifted to him, away from choreographed smear campaigns and the concealed frailty of Biden. Trump didn’t fake being “the people.” He embodied it — and weaponized authenticity into power.

Dismantling the Machine

After his election, Trump moved fast to dismantle the left’s media machine. The breakup of United States Agency for International Development was a key moment. State-aligned broadcasters folded, funding pipelines to statist media, green ideology, and eco-socialist activism dried up.

Trump struck a chord with the times. He transformed media dominance and narrative instinct into electoral power. His biggest coup? Killing the CO₂ myth. In Trump’s America, CO₂ is no longer the demon gas upon which an eco-socialist nightmare could be built.

The question now is: How long before this media collapse of the Left reaches Europe? When it does, the rising conservative forces in Eastern Europe — led by Viktor Orbán — may find their historic hour has come.

In politics, good governance alone is never enough. You must project it — with the right imagery, in tune with the zeitgeist.

* * * 

About the author: Thomas Kolbe, born in 1978 in Neuss/ Germany, is a graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination

Tyler Durden Thu, 10/16/2025 - 16:20

Wishful Thinking? MSM Speculates Trump To Announce Tomahawks For Ukraine Friday

The Financial Times as well as some pro-NATO military analysts say that we should expect President Trump to greenlight a limited number of long-range Tomahawk missiles for Ukraine. "The US president is expected to discuss potential deliveries and how Ukraine would use the weapon with his Ukrainian counterpart Volodymyr Zelenskyy at the White House on Friday," FT writes.

But it's all still up in the air (and Trump remains notoriously hard to predict), given Presidents Trump and Putin just had a "lengthy" and "positive and productive" phone call on Thursday, wherein the two lined up a series of high-level summits, including the expectation that Trump and Putin will have an eventual bilateral summit in Budapest to bring this “inglorious” War, between Russia and Ukraine, to an end - as Trump put it in a Truth Social post.

US Navy image

Among many troubling aspects to this is that the systems would likely require American contractors to operate. Typically Tomahawks are launched by sea or air, but Ukraine will have to be given a ground-launched version.

Mainstream media has of late also confirmed Trump had already authorized US intelligence to help the Ukrainians with targeting energy sites deep inside Russia.

Whatever is handed over, which is unlikely to surpass several dozens, would have to be carefully used against "strategic targets":

It is unclear how many Tomahawks the US would be willing to sell to Nato allies for Ukraine, especially since the Pentagon has been expending them at a higher rate than it has been buying them. "That’s what they’re probably arguing over right now within the Pentagon," said Jim Townsend, a former US deputy assistant secretary of defence.

The US has bought only 202 Tomahawks since 2022, but has used at least 124 against the Houthis and Iran since 2024. It is also possible the US would use Tomahawks in any strike on Venezuelan soil. “If we do give Tomahawks, it won’t be a huge batch, and that means that Zelenskyy will have to be very careful in terms of how he uses these,” Townsend said, adding they would only be used on the most strategic targets with the greatest chance of success.

Already anticipating this, Russian Foreign Ministry spokeswoman Maria Zakharova has newly warned that Ukraine is plotting to use the long-range missiles to carry out "terrorist attacks" on Russia.

Zakharova said to reporters Wednesday that "the Kiev regime is not hiding its preparation of new terrorist attacks against our country aimed at escalating the conflict" - further underscoring that it was "obvious" these plans are being drawn up in anticipation of getting Tomahawks.

Source: Institute for the Study of War (ISW)

Alex Christoforou of The Duran podcast, commenting on the implications of Tomahawk transfers, offers the following perspective:

1. Further normalizes US/NATO direct attacks into Russia. In three years the US has accomplished what was seen as taboo for 80 years...it is acceptable for US to directly strike Russia. This is a precedent that will be leveraged in the future.

2. Further normalizes western boots on the ground in Ukraine. The US is making no secret of the fact that they will be in Ukraine operating the missiles. US/NATO boots on the ground are no longer off limits.

FT: The missiles could be delivered relatively quickly with the involvement of American contractors to assist in their use. This would eliminate the need for extensive training of Ukrainian troops and would allow the US to maintain control over targets and other issues.

Russia will likely respond "with irresponsible rhetoric that includes some nuclear saber-rattling," as well as "a few larger strikes" on Ukraine.

At the very least, this will inject a new level of unpredictability into a conflict which is already spiraling toward direct NATO-Russia nuclear-armed confrontation.

Tyler Durden Thu, 10/16/2025 - 15:45

Regional Banks Crash As More Credit "Cockroaches" Emerge

Just when the market was starting to finally freak out - with a one month delay - about the Tricolor and First Brands bankruptcy following yesterday's fingerpointing session between JPM's Jamie Dimon and various private credit firms in which both accused each other of harboring more credit "cockroaches", this morning the credit freak out went to 11 as two regional US banks crashed after they both disclosed problems with loans involving allegations of fraud (completely unrelated to Tricolor or First Brands), adding to concern that more cockroaches are indeed emerging in borrowers’ creditworthiness.

While those hits can be easily absorbed by the biggest US banks, the totals are more worrisome for regional lenders.

“If JPMorgan has a loan problem with Tricolor, it’s puny,” Mike Mayo, an analyst at Wells Fargo & Co., said in an interview.

“But if smaller banks have problems with these loans, it takes more of a hit.”

Shares of Zions Bancorp plunged 12% after it disclosed a $50 million charge-off for a loan underwritten by its wholly-owned subsidiary, California Bank & Trust, in San Diego.

Bloomberg reports that Zions said in a lawsuit that California Bank & Trust is owed the money from two investment funds tied to Andrew Stupin and Gerald Marcil, among other parties.

California Bank & Trust provided two revolving credit facilities to the borrowers in 2016 and 2017 totaling more than $60 million, to finance their purchase of distressed commercial mortgage loans, according to the lawsuit.

The terms gave the bank “first-priority, perfected security interest” in all collateral, including each mortgage loan purchased by the investment funds.

But after an investigation, the lender found that many of the notes and underlying properties were transferred to other entities.

And those properties have already been foreclosed on or were about to be, according to the lawsuit.

But it gets worse as Bloomberg points out that Western Alliance also lent money to the same investor group, for them to originate or buy mortgage loans, according to the bank’s lawsuit in August. The outstanding balance of that loan is $98.6 million.

Western Alliance found that the collateral was supposed to be backed by a first-priority lien, but that wasn’t the case.

It alleged that the borrower created fake title policies by omitting the senior liens.

At the same time, the borrower drained funds from accounts that acted as additional collateral, according to the lawsuit.

As of Aug. 18, the borrower held a little over $1,000 in their bank account at Western Alliance, while the required monthly average was $2 million, according to the lawsuit.

If that wasn't enough, Western Alliance also said it also has exposure to the collapse of auto-parts supplier First Brands Group.

But, and clearly nobody believed this, it doesn’t expect the issue to change its 2025 outlook. Yeah right... 

Shares tumbled as much as 11% after the admission...

It will be ironic if WAL barely survived the 2023 banking crisis only to be destroyed because it failed to do due diligence on its clients a few years later.

“There have been a number of ‘one-off’ credit events that a number of banks have previewed going into the quarter,” Terry McEvoy, an analyst at Stephens Inc., said in an interview.

“They have not gone unnoticed by bank investors.”

The news slammed the broader regional index. 

As Bloomberg notes, even if each of the credit event are isolated, banks taking losses from bad loans are making headlines more often in the past two months. After the bankruptcy of sub-prime auto lender Tricolor Holdings last month, JPMorgan wrote down $170 million and Fifth Third Bancorp wrote down as much as $200 million. 

Meanwhile, the investment bank at the center of the entire First Brands saga, Jefferies, continues to get crushed, and at last check was down over 10%.

 

*  *  * NICE AND EASY

Astaxanthin // Peak Focus // Mushroom 10x

Tyler Durden Thu, 10/16/2025 - 15:35

Sixth Circuit Rules In Favor Of School Ban On "Let's Go Brandon" Sweatshirts

Authored by Joanthan Turley,

We previously discussed the case of B.A. v. Tri County Area Schools, where two middle schoolers in Michigan were prevented from wearing “Let’s Go Brandon” sweatshirts. However, a divided panel on the United States Court of Appeals for the Sixth Circuit has ruled that the school district was within its authority to ban the sweatshirts.  The decision, in my view, is wrong, and this could prove a viable case for Supreme Court review, assuming that the plaintiffs will not seek an en banc review.

“Let’s Go Brandon!” has become a similarly unintended political battle cry not just against Biden but also against the bias of the media. It derives from an Oct. 2 interview with race-car driver Brandon Brown after he won his first NASCAR Xfinity Series race. During the interview, NBC reporter Kelli Stavast’s questions were drowned out by loud and clear chants of “F*** Joe Biden.” Stavast quickly and inexplicably declared, “You can hear the chants from the crowd, ‘Let’s go, Brandon!’”

“Let’s Go Brandon!” instantly became a type of “Yankee Doodling” of the political and media establishment.

In this case, an assistant principal (Andrew Buikema) and a teacher (Wendy Bradford) “ordered the boys to remove the sweatshirts” for allegedly breaking the school dress code. However, other students were allowed to don political apparel with other political causes, including “gay-pride-themed hoodies.”

The district dress code states the following:

“Students and parents have the right to determine a student’s dress, except when the school administration determines a student’s dress is in conflict with state policy, is a danger to the students’ health and safety, is obscene, is disruptive to the teaching and/or learning environment by calling undue attention to oneself. The dress code may be enforced by any staff member.”

The district reserves the right to bar any clothing “with messages or illustrations that are lewd, indecent, vulgar, or profane, or that advertise any product or service not permitted by law to minors.”

The funny thing about this action is that the slogan is not profane.

To the contrary, it substitutes non-profane words for profane words. Nevertheless, “D.A.” was stopped in the hall by Buikema and told that his “Let’s Go Brandon” sweatshirt was equivalent to “the f–word.”

Sixth Circuit Judge John Nalbandian was joined by Judge Karen Nelson Moore in holding that, under the “vulgarity exception,” the action was constitutional:

“The Constitution doesn’t hamstring school administrators when they are trying to limit profanity and vulgarity in the classroom during school hours. Again, students do not “shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.” But neither are school administrators powerless to prevent student speech that the administrators reasonably understand to be profane or vulgar. And so “the First Amendment gives a … student the classroom right to wear Tinker’s armband, but not Cohen’s jacket.” Schools are charged with teaching students the “fundamental values necessary to the maintenance of a democratic political system.” And avoiding “vulgar and offensive terms in public discourse” is one such value. After all, “[e]ven the most heated political discourse in a democratic society requires consideration for the personal sensibilities of the other participants and audiences.” …

[A] euphemism is not the same as the explicitly vulgar or profane word it replaces. “Heck” is not literally the same word as “Hell.” But the word’s communicative content is the same even if the speaker takes some steps to obscure the offensive word. The plaintiffs concede that a school could prohibit students from saying “Fuck Joe Biden” because “[k]ids can’t say ‘fuck’ at school.” And yet they insist that the euphemism “Let’s Go Brandon” is distinct—even though many people understand that slogan to mean “Fuck Joe Biden.” So it’s not clear that the school administrators acted unreasonably in determining that the euphemism still conveyed that vulgar message.

After all, Fraser—the first case that recognized the vulgarity exception—involved a school assembly speech that had a rather elaborate sexual metaphor instead of explicitly vulgar or obscene words. And yet the Supreme Court had no reservation in holding that the school was not required to tolerate “lewd, indecent, or offensive speech and conduct.” And it was up to the school to determine “what manner of speech in the classroom or in school assembly is inappropriate.” Because “[t]he pervasive sexual innuendo in Fraser’s speech was plainly offensive to both teachers and students—indeed to any mature person,” the school could discipline his speech despite the absence of explicitly obscene or vulgar words. And so Fraser demonstrates that a school may regulate speech that conveys an obscene or vulgar message even when the words used are not themselves obscene or vulgar.”

In fairness to the majority, courts have been highly deferential to school officials in these areas, particularly in the Sixth Circuit. In Tinker v. Des Moines, the Supreme Court famously declared that students do not “shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.” That may be true, but apparently, they can shed their sweatshirts in Michigan.

Judge John Bush offered a spirited dissent, stating:

“[T]he speech here—”Let’s Go Brandon!”—is neither vulgar nor profane on its face, and therefore does not fall into [the Fraser] exception. To the contrary, the phrase is purely political speech. It criticizes a political official—the type of expression that sits “at the core of what the First Amendment is designed to protect.” No doubt, its euphemistic meaning was offensive to some, particularly those who supported President Biden. But offensive political speech is allowed in school, so long as it does not cause disruption under Tinker. As explained below, Tinker is the standard our circuit applied to cases involving Confederate flag T-shirts and a hat depicting an AR-15 rifle—depictions arguably more offensive than “Let’s Go Brandon!” …

The majority says the sweatshirts’ slogan is crude. But neither the phrase itself nor any word in it has ever been bleeped on television, radio, or other media. Not one of the “seven words you can never say on television” appears in it . Instead, the phrase has been used to advance political arguments, primarily in opposition to President Biden’s policies and secondarily to complain about the way liberal-biased media treats conservatives. It serves as a coded critique—a sarcastic catchphrase meant to express frustration, resentment, and discontent with political opponents. The phrase has been used by members of Congress during debate. And even President Biden himself, attempting to deflect criticism, “agreed” with the phrase.

We cannot lose sight of a key fact: the students’ sweatshirts do not say “F*ck Joe Biden.” Instead, they bear a sanitized phrase made famous by sports reporter Kelli Stavast while interviewing NASCAR race winner Brandon Brown at the Talladega Superspeedway. The reporter said the crowd behind them was yelling “Let’s go, Brandon!” She did not report the vulgar phrase that was actually being chanted. The Majority even concedes Stavast may have used the sanitized phrase to “put a fig leaf over the chant’s vulgarity.” That is telling….”

Judge Bush is correct. The opinion constitutes a significant infringement on the free speech rights of students. I readily admit that I am critical of some past cases, including Morse v. Frederick, 551 U.S. 393 (2007), where the Supreme Court ruled 5-4 that the Juneau-Douglas High School could suspend student Joseph Frederick after he displayed a banner reading “BONG HiTS 4 JESUS” across the street from the school during the 2002 Winter Olympics torch relay. In my view, the courts have honored Tinker largely in the breach in such cases.

This case, however, involves a sweatshirt without a single vulgar term and a clear political message. It reflects a difference in the default position of both sides. The default in close cases for the majority is with the school’s authority to curtail speech, while the default of Judge Bush is with free speech. As Judge Bush noted:

“Because even offensive political speech demands First Amendment protection, it is inappropriate to delegate unfettered discretion to school officials to characterize the phrase “Let’s Go Brandon!” as vulgar and then regulate it outside the bounds of Tinker. The majority essentially gives school administrators boundless discretion—akin to “I know it when I see it,” Jacobellis v. Ohio, 378 U.S. 184, 197 (1964) (Stewart, J., concurring)—to redefine facially non-vulgar speech as vulgarity in order to ban it.”

The plaintiffs should appeal this opinion. They have a strong dissent from Judge Bush and a strong free speech case to make either to the full court or the Supreme Court.

Here is the opinion: B.A. v. Tri County Area Schools

*  *  *

Tyler Durden Thu, 10/16/2025 - 15:25

Foreign Espionage Arrests Up 50%: FBI

Authored by Catherine Yang via The Epoch Times,

FBI Director Kash Patel said on Oct. 15 that the agency is cracking down on espionage by foreign adversaries, with an increase in arrests as high as 50 percent.

“We have gone after espionage activities against our main counterparts in China, Russia, and Iran,” he said at a press conference.

“In China alone, we’ve had over a 50 percent increase in espionage arrests alone, and prosecutions,” Patel said. “In Iran, we have had a 50 percent increase, again, in espionage cases. And in Russia, we had a 33 percent increase in espionage cases alone.”

State Department employee Ashley Tellis, arrested on Oct. 12, was accused of removing classified information and meeting with Chinese regime officials.

A former State Department employee, Michael Schena, was arrested in March and sentenced on Sept. 4 for conspiring to collect and transmit national defense information to Chinese authorities.

In August, two Chinese nationals were arrested and accused of smuggling sensitive AI chips, subject to export controls, to China.

In June, two Chinese nationals were arrested on charges of spying for Chinese intelligence operations.

In September, an Armenian national was charged with conspiring to export goods and information that would help with semiconductor manufacturing to Russia.

On Aug. 6, Taylor Adam Lee, an active duty soldier, was arrested on charges of attempted transmission of national defense information to a foreign adversary, Russia.

In March, two Iranian nationals were charged with conspiring to supply drones and launder money for the IRGC, a designated foreign terrorist organization.

Patel also said there have been 125 counterterrorism cases this year, compared to 100 last year. And he cited increased disruptions of cybercrime enterprises.

“This year, you already have 52 arrests. Fifty-two arrests of violent cyber criminals who are stealing from senior citizens, who are violating our children’s rights and freedoms, and who are violating everyday Americans,” he said.

U.S. law enforcement, cooperating with UK law enforcement, announced the seizure of $15 billion in bitcoin from a Cambodian cyberscam ring on Oct. 14. This represents the largest-ever digital currency seizure by U.S. law enforcement.

Chen Zhi and his Prince Group conglomerate allegedly engaged in a massive wire fraud and money laundering conspiracy via at least 10 slave labor scam compounds across Cambodia.

The scam ring also used networks around the world, according to the Justice Department, and one such branch in Brooklyn was responsible for laundering millions of dollars taken from more than 250 victims in the United States.

Tyler Durden Thu, 10/16/2025 - 14:45

WTF Is Going On...

The markets are a little wild today and there is no specific item driving it from what we can see.

Here are a few that we are hearing

• 16th day of the shutdown and no signs of a break (chatter that it may last til Thanksgiving)

• Geopolitical risk rising: Lengthy Putin call, China-US trade tensions escalating, India ignoring Trump demand to stop buying Russian oil

• Hawkish FedSpeak - Waller sounded less dovish than normal

• Huge OpEx - The notional open interest for this expiration is the largest recorded for any October.

• Regional bank angst - Zions and Western Alliance down big on loan losses.

• US funding market stress - surging SOFR rates signaling a liquidity shortage

WTF is going on...

Stocks are tanking...

Regional banks getting slammed...

Bonds are aggressively bid with 2Y yields are suddenly collapsing (10Y back below 4.00%)...

Gold is going vertical (up)...

And crypto is going vertical (down)...

If we had to guess, we would say this is mostly related to the funding stress finally being recognized by a broader set of market participants as it seems demand for 'good' collateral is on the rise (gold and short-dated bonds) and leveraged risky assets are dumped.

The most important indicator, as always, remains the SOFR rate: should the recent drift higher continue, the self-fulfilling cascade of a liquidity shortage will almost certainly be activated.

And today's SRF auction shows the stress continues to build...

In fact it's worsening...

Trade accordingly.

*  *  * And if that's not working out, try some lithium

Tyler Durden Thu, 10/16/2025 - 14:40

15 Democratic Governors Announce Health Alliance To Counter RFK Jr.

Authored by Zachary Stieber via The Epoch Times,

The Democratic governors of 14 states and the territory of Guam on Oct. 15 announced a new coalition they said will provide scientific information to counter Health Secretary Robert F. Kennedy Jr.

The Governors Public Health Alliance is aiming to boost coordination between states on public health guidance, preparing for emergencies, and detecting health threats. It plans to issue recommendations to the public on vaccines and other health topics, as the governors say guidance from the federal government can no longer be trusted.  

“We can no longer rely on the information coming out of Washington, DC, but our states are coming together to unequivocally state that science still matters,” Washington state Gov. Bob Ferguson said in a statement.

“While Donald Trump and RFK Jr. turn their backs on public health, governors are stepping up to make sure our residents have the health care they need and deserve,” Massachusetts Gov. Maura Healey added.

The Department of Health and Human Services (HHS) criticized the development.

“Democrat-led states that imposed unscientific school closures, toddler mask mandates, and vaccine passports during the COVID era are the ones who destroyed public trust in public health. Now, the same governors who eroded that trust are trying to reinvent public health under the guise of ‘coordination,’” Andrew Nixon, the communications director for the department, told The Epoch Times in an email.

“The Trump Administration and Secretary Kennedy are rebuilding that trust by grounding every policy in rigorous evidence and Gold Standard Science—not the failed politics of the pandemic.”

Among other HHS divisions, Kennedy oversees the Centers for Disease Control and Prevention. His moves, including the removal of all members of the CDC’s vaccine advisory panel over conflicts of interest, have drawn criticism from Democrats.

The panel, now comprising experts selected by Kennedy, has advised the CDC to change recommendations for vaccines for COVID-19 and measles. The CDC recently accepted the changes.

Some outside groups and coalitions have issued competing vaccination recommendations, including a western states alliance spearheaded by California. Multiple states have updated rules to let pharmacists prescribe vaccines not recommended by the CDC.

The governors’ coalition will build on those efforts by facilitating meetings with state officials, global health leaders, and other groups, according to GovAct, a nonprofit that describes itself as a nonpartisan initiative formed by governors. Other initiatives from the organization include the Reproductive Freedom Alliance, which is aimed at “protecting and expanding reproductive freedom,” including through expanded access to abortion.

All the governors that are part of the initiatives are Democrats, although GovAct’s advisory board features several former Republican governors, including former Montana Gov. Marc Racicot.

The governors in the public health alliance represent California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Maryland, New Jersey, New York, North Carolina, Oregon, Rhode Island, and Washington state. Guam’s governor is also part of the group.

The alliance’s advisers include Dr. Mandy Cohen, who served as director of the CDC under President Joe Biden; Dr. Anne Zink, Alaska’s top medical officer from 2018 to 2024; and Dr. Raj Panjabi, a White House official during the Biden administration.

“With many health threats at our doorstep, collaboration and communication between governors is essential to protect the health of families and save lives,” Cohen, who has called on Kennedy to resign, said in a statement.

“This alliance creates the framework to support the national coordination needed to safeguard communities.”

Tyler Durden Thu, 10/16/2025 - 14:10

13 Reasons Why Gold Has Outperformed Stocks Since 2000

Authored by Timothy Nash, Anthony Storer, Jim Hop, & Tom Rastin via RealClearMarkets.com,

The recent increase in gold prices in the United States and around the world has been driven by a confluence of economic, financial, and political factors. 

This environment, where gold has outperformed U.S. GDP and the four major U.S. stock markets, began in 2000 and has continued to date (see Exhibits 1, 2, 3). 

We outline 13 reasons why gold has outperformed most major investments and why it is likely to continue attracting individual and institutional investors. 

1. A haven during uncertain times.

Throughout history, people — from merchants to royalty — have held gold as a hedge against inflation, economic uncertainty, and war.  Having gold in your pocket allowed you to overcome political difficulties, especially when paper currencies collapsed.

2. Geopolitical disagreements.

Recent geopolitical uncertainty has been a major catalyst in the rise of global gold prices.  Instability in the Middle East, conflict in Ukraine, and the collapse of Hong Kong as a free state under the Sino-British Agreement have been constant sources of concern, driving up the price of gold. 

3. The Federal Reserve.

For more than half a century now, the price of gold has increased in part as a hedge against inflation and poor U.S. monetary policy. The U.S. dollar purchases 16.78% of what it did 50 years ago, according to the Bureau of Labor Statistics Inflation Calculator.  Its purchasing power would be more than 100% if the dollar was still backed by gold.

4. Inflation and the U. S. Dollar.

For most of our history, the U.S. dollar was backed by gold and/or silver.  In the early 1900’s, it was believed 100 one-ounce gold coins should purchase an average-priced home.  In 1980, gold averaged roughly $615 an ounce, while the median home price in the United States was roughly $64,600.  According to the Federal Reserve Bank of St. Louis, the median home price is $422,600, while gold traded at almost $4,203 an ounce on October 15th, according to Yahoo Finance.  In 1980, it took roughly 100 ounces of gold to buy a new home; the same is true today. Clearly, investment in gold has preserved and increased wealth. The same cannot be said about the U.S. dollar.

5. Central Banks.

Many Central Banks and governments are purchasing gold as a hedge against inflation and growing concern over the value of the U.S. dollar.  Consider the U.S. national debt, for instance, which has grown from just under $6 trillion in 2000 to almost $38 trillion today.

6. The national debt and its global emulation.

The U.S. national debt is more than $37.85 trillion and is 124.86% of GDP, dramatically higher than the 34.68% in 1980.  That is equivalent to $110,176 per citizen or $326,500 per taxpayer.  Notably, irresponsible government spending is not exclusive to the U. S., with many countries, such as Japan and China, having larger deficits per capita.

7. U.S. Political instability.

The annual U.S. federal budget deficit is running at roughly $1.9 trillion, with little chance of reduction given the lack of political cooperation. To reverse the trend of budget deficits, American voters must vote for both economic growth and financial stability.

8. The global public policy divide.

Conflicts over public policy, in areas such as trade and tax policy, food production regulation, and electric vehicle production have sparked much disagreement, helping to drive gold prices higher.

9. Philosophy and economic growth.

In recent decades, the United States and other countries whose economic wealth is largely based on free-market capitalism and the rule of law have experienced increased regulation, decreased entrepreneurship, and fewer profit opportunities. This has been negatively influencing economic growth and structures in the United States and the West, leading to increased investment in gold.

10. The stock market and U.S. GDP.

Gold has outperformed the four major U.S. stock indices from 2000 to the end of September 2025.  It has also outperformed silver and U.S. GDP in terms of economic growth and has dramatically outpaced inflation, proving once again that gold as a safe-haven investment continues to stand the test of time.

11. The true intention of BRICS.

Brazil, Russia, India, China, South Africa, and a growing number of smaller, less-friendly other countries have purchased large quantities of gold, aiming to replace the U.S. dollar’s status as the world reserve currency.  If the dollar is replaced, it will make international transactions more costly for U.S. producers and consumers, while rendering U. S. foreign policy less effective.

12. Technological advancements and the AI boom.

Gold use in technology increased from 2000 to peak usage in 2010. Moreover, as AI technology and power stations have advanced, demand for gold has recently surged again due to its superior conductivity and corrosion resistance. 

13. The supply of Gold continues to be outpaced by demand.

The global demand for gold in 2024 and so far in 2025 has reached new record highs, while new supply from sources has been unable to keep pace.  This seems to indicate that unless one or more of the above factors are mitigated, the price of gold in the years to come will increase. 

Conclusion

On October 9th, the price of gold closed at just above $3,946 an ounce, down almost $100 for the day and the stock markets rose after the announcement of a settlement between Gaza and Israel.  However, the next day, major stock markets dropped by more than 800 points as China announced restrictive policies on rare-earth mineral sales to the United States, driving gold again above $4,000 an ounce. 

The only way to bring gold prices down is to adopt rational political and economic policies that enhance economic and political freedom across the United States and around the world.  Policies that will provide an opportunity for ALL citizens to live in a freer, more competitive and prosperous United States and world, where freedom and hard work dictate success, not politicians and regulations.

Tyler Durden Thu, 10/16/2025 - 13:35

Trump: "Great Progress Made" Towards Peace In Putin Call, Gaza Deal Paves Way For Ukraine Truce

President Trump has just concluded his "lengthy" phone conversation with Russian President Vladimir Putin, after which he declared on Truth Social that "great progress was made" towards peace in the Ukraine conflict.

He further called it "a very productive" conversation wherein Putin congratulated him on the "Great Accomplishment of Peace in the Middle East" - in reference to the Gaza peace deal.

Importantly, Trump then emphasized, "I actually believe that the Success in the Middle East will help in our negotiation in attaining an end to the War with Russia/Ukraine."

Trump signaled there will be a high level meeting between US and Russian officials, and eventually another direct Trump-Putin summit, which he said would eventually happen in Budapest Hungary.

According to more from Trump's statement:

We also spent a great deal of time talking about Trade between Russia and the United States when the War with Ukraine is over.

At the conclusion of the call, we agreed that there will be a meeting of our High Level Advisors, next week. The United States’ initial meetings will be led by Secretary of State Marco Rubio, together with various other people, to be designated. A meeting location is to be determined.

President Putin and I will then meet in an agreed upon location, Budapest, Hungary, to see if we can bring this “inglorious” War, between Russia and Ukraine, to an end.

President Zelenskyy and I will be meeting tomorrow, in the Oval Office, where we will discuss my conversation with President Putin, and much more.

I believe great progress was made with today’s telephone conversation.

But the reality is Trump is still unwilling to pressure Kiev on making territorial concessions (at least publicly, and as far as we know), and there also needs to be more robust guarantees of never joining NATO. All the while Trump is said to be mulling Tomahawk missiles. The full note...

As for the Kremlin side, it issued a much vaguer initial statement, also agreeing that it was a "positive and productive" phone call.

But at least the two sides are talking, but let's hope it actually leads somewhere - and fast - before Europe leads to West further up the escalation ladder toward WW3-style nuclear confrontation with Moscow.

Tcitizen Thu, 10/16/2025 - 13:20

Rare Earth Miner Stocks Slammed After U.S. Defense Department Cancels Cobalt Purchase

Rare earth and battery metal stocks are tumbling today after the U.S. Defense Department abruptly canceled a high-profile tender to buy cobalt - at least for now - cutting short a torrid rally that had lifted the sector over the past several months.

However, it looks as though the cancellation may only be temporary, which if true the market is certainly overlooking…

Cobalt producers and related mining stocks had surged as prices more than doubled since February, fueled by export restrictions in the Democratic Republic of Congo — which supplies about three-quarters of global output — and renewed optimism over Western efforts to secure critical minerals.

The Defense Logistics Agency (DLA) had sought bids since mid-August for up to 7,500 tons of cobalt over five years — a contract worth as much as $500 million — as part of Washington’s broader effort to rebuild domestic supplies of critical minerals, according to Bloomberg. After repeatedly extending the bid deadline from Aug. 29 to Oct. 15, the agency has now scrapped the tender altogether.

“There are outstanding issues with the Statement of Work that need resolution before offers may be solicited,” a notice on a U.S. government website said Wednesday. “Upon resolution, solicitation will be re-issued with a new opening and closing date.”

The cancellation marks a setback for U.S. plans to reduce reliance on China for key inputs in electric vehicles, batteries, and defense systems. Cobalt is used in rechargeable batteries, magnets, munitions, and jet engines, and Beijing dominates global processing while maintaining a significant state stockpile.

Bloomberg writes that the now-abandoned tender followed a sharp rebound in cobalt prices, which have doubled since February after the Democratic Republic of Congo imposed export restrictions.

The DLA had been courting suppliers including units of Vale SA in Canada, Sumitomo Metal Mining Co. in Japan, and Glencore Plc’s Nikkelverk plant in Norway, seeking fixed prices for alloy-grade cobalt over five years. The U.S. had planned to spend between $2 million and $500 million under the program.

Tyler Durden Thu, 10/16/2025 - 12:15

WTI Hovers Near 5 Month Lows After India Confusion, Record US Production

Oil prices are flat this morning (holding near five-month low) amid mixed signals on President Trump’s push to stop India’s purchases of Russian crude, his lengthy ongoing talks with President Putin, and a surprisingly large crude inventory build reported by API last night.

India’s oil refiners said they expect to reduce - not stop - the purchase of Russian crude, a move that could squeeze global supply, following remarks by Trump that the South Asian nation would halt all buying.

Bloomberg reports that Mangalore Refinery and Petrochemicals Ltd Managing Director Mundkur Shyamprasad Kamath told an analyst conference call Thursday that he was “confident” his company would continue buying Russian oil.

“We are not trying to slow down or anything,” he said when asked how he sees US push to stop Russian oil buying.

“For us it is business as usual, with respect to sourcing. We are sourcing those Russian barrels that is available today.”

India has flip-flopped between defying the US and crimping Russian imports in response to pressure from Washington to cut back.

The decisions India ultimately takes are vital for Moscow, which needs petrodollars to help fund its war in Ukraine.

Still, the market is awaiting clarification on the situation from the government in New Delhi, which didn’t officially confirm or deny Trump’s remarks.

Trump didn’t set out a timeline for India to wind down purchases of Russian oil, or give any indication of how Washington might enforce or scrutinize the shift, but said that the buying wouldn’t stop immediately.

The development took some air out of the earlier rally, with traders newly assured that the halt to India’s imports of Moscow’s crude won’t be immediate.

We will see shortly whether the official data confirms API's notable build.

API

• Crude +7.36mm 

• Cushing: -978k

• Gasoline: +3.0mm

• Distillate: -4.8mm

DOE

• Crude +3.524mm (+300k exp, +2.3mm whisper)

• Cushing: -703k

• Gasoline: -267k

• Distillate: +4.529mm - biggest draw since Jan

he official crude build of 3.52mm barrels was modest (and well below the huge 7.4mm barrel build reported by API). That is the 3rd weekly build in crude stocks in a row (and 3rd weekly draw in stocks at Cushing). Distillates inventories plunged by 4.53mm barrels - the biggest draw since January - perhaps affected by  the El Segundo refinery fire

Source: Bloomberg

Including the 760k barrel addition to the SPR, last week saw one of the largest weekly builds in total US crude inventories of the year...

Source: Bloomberg

US Crude production rose once again, to a new reocrd high at 13.636mm b/d...

Source: Bloomberg

WTI is testing back near 5-month lows...

"Inventory builds have now eclipsed 2024 build pace by +220 (million barrels), with pressure pushing on the seaborne market. Nearly all regions are seemingly under selling pressure," Brian Leisen, global oil strategist at RBC Capital Markets, wrote.

Tyler Durden Thu, 10/16/2025 - 12:07

Trump Says India Agreed To Stop Buying Oil From Russia

Authored by Emel Akan via The Epoch Times,

President Donald Trump announced on Oct. 15 that India has pledged to stop purchasing oil from Russia within a short period, a decision that would help cut off funding for Moscow’s ongoing war in Ukraine.

“Within a short period of time, they will not be buying oil from Russia,” Trump told reporters in the Oval Office during a press conference.

Trump said Indian Prime Minister Narendra Modi gave him the assurance on Oct. 15.

“That’s a big stop,” Trump said. “Now [I’ve] got to get China to do the same thing.”

Trump has repeatedly accused India and China of buying Russian crude oil and funding Moscow’s aggression in Eastern Europe.

“We were not happy with him buying oil from Russia, because that lets Russia continue on with this ridiculous war,” Trump said of Modi.

On Aug. 6, Trump issued an executive order raising the tariff rate on Indian goods entering the United States to 50 percent.

Trump pointed to India’s continued purchases of Russian oil as justification for the significant increase in levies on the nation’s exports.

In recent years, India has become one of Russia’s most important trading partners, with annual bilateral trade rising to nearly $69 billion.

The rapid increase in trade has been fueled primarily by energy purchases.

Before Russia invaded Ukraine, India’s annual crude oil imports from Russia hovered at about $1 billion. But since the war began, imports have skyrocketed, reaching $25.5 billion in 2022, $48.6 billion in 2023, and $52.7 billion in 2024, according to the U.N. Comtrade database.

Experts at the Observer Research Foundation think tank estimate that India accounts for more than one-third of Russia’s crude exports, behind China’s 50 percent share.

“Indian refiners have temporarily ramped up Russian crude imports, without any visible signs of concern emerging from the political leadership,” the foundation wrote in a report.

The United States has accused India of reselling Russian oil on the open market, allegedly further benefiting Russia.

“India’s subsequent reselling of this oil on the open market, often at significant profit, further enables the Russian Federation’s economy to fund its aggression,” Trump’s executive order reads.

In December 2021, Russian President Vladimir Putin and Modi signed a flurry of trade and arms deals. Putin and Modi also signed nine agreements related to trade, research, and climate action in July 2024.

According to the U.S. Trade Representative’s Office, the U.S. goods trade deficit with India was almost $46 billion in 2024, representing a 5.9 percent increase from 2023.

Tyler Durden Thu, 10/16/2025 - 11:45

Government Shutdown Enters 16th Day: These Are The Regions Most & Least Impacted

Authored by Mary Prenon via The Epoch Times,

As the federal government shutdown drags on, some states are feeling the pinch a lot more than others—and the nation’s capital is the most affected region.

An Oct. 15 report from WalletHub indicates that some 900,000 federal employees have been furloughed, while another 700,000 continue to work without pay. Essential services such as air traffic control and military operations are continuing.

The data shows that Washington, DC is experiencing the brunt of the stalemate, given that 25 percent of all jobs there are related to the federal government. The District is also home to the highest number of federal contract dollars per capita, which translates to an impasse on many ongoing projects.

In addition, the capital has the second-highest number of residents enrolled in the Supplemental Nutrition Assistance Program (SNAP), which is still operating, but runs the risk of losing all funding if the deadlock continues much longer.

Hawaii is listed as the second most affected state, also because of its large number of federal workers. About 5.6 percent of all jobs in Hawaii are federal positions.

Real estate comprises nearly 23 percent of Hawaii’s gross state product—the fourth-highest share in the United States.

The report indicates the shutdown could have an adverse effect on mortgage processing due to staff shortages at the IRS, Federal Housing Administration, and Department of Veterans Affairs.

In addition, Hawaii has some of the country’s largest numbers of national parks.

“The latest government shutdown makes life stressful for people across the U.S., but places like DC and Hawaii, where a high percentage of residents work directly for the government or have government contracts, are getting hit the hardest,” WalletHub analyst Chip Lupo noted in the report.

“States with a lot of residents who receive SNAP benefits, such as New Mexico, also could be in a dire situation if money for this vital program runs out before the gridlock ends.”

New Mexico is listed as the third state most affected by the government shutdown, as it receives more than $6,000 per capita in federal contracts, and a fifth of its population is enrolled in the SNAP Program.

“That means an extended shutdown could lead to a big chunk of the state’s residents struggling to afford food if the government no longer has any funds available for benefits,” the report states.

New Mexico also has the seventh-highest percentage of federal jobs and the fifth-most national parks per capita.

According to the Congressional Budget Office, the shutdown is estimated to cost the U.S. economy close to $400 million per day.

Other states hurt the most by the shutdown include Alaska, Maryland, Virginia, West Virginia, Alabama, Oklahoma, and Arizona.

Meanwhile, Minnesota, Iowa, Indiana, Nebraska, and New Hampshire represent the top five states that are least affected by the shutdown.

As negotiations over spending limits, foreign aid, and healthcare subsidies continue, the government shutdown has lasted 15 full days and entered its 16th day on Oct. 16.

The longest U.S. government shutdown on record lasted 35 days, from December 2018 to January 2019.

Tyler Durden Thu, 10/16/2025 - 11:05

 

My contrarian instincts often kick in when I see the crowd reaching a questionable consensus. Most of the time, what the crowd does IS the market; what they say, however, is often suspect.

Over the past few years, the crowd has expected rapid Federal Reserve rate cuts that never materialized; there were repeated expectations in 2022, ’23, and ‘24 of an imminent recession that never happened; the fears caused by market concentration seem to have also been ignored by Mr. Market.

Then there is the endless cacophony of bubble chatter.

I cannot recall ever hearing the crowd identify a bubble in real time, and then there actually a) being a bubble that b) burst soon after. By definition, the crowd creates bubbles through a combination of psychology, greed/FOMO, excess liquidity, and sheer recklessness.

Way back in 2011, I tried to create a checklist of how to spot a bubble in real-time. With the benefit of time and hindsight, it is easy to see the influence of the Great Financial Crisis on that list. It is 14 bullet quantitative points that should allow you to see if any market is exhibiting bubblicious tendencies.

Let’s go through those 14 points to see how they hold up today:

Standard Deviations of Valuation: Markets are pricey, but not Japan 1989/1999-2000 Dotcom pricey

Significantly elevated returns: The past 15 years have seen returns of 16% annually. This is the third-best rolling 15-year period since WW2, but it also follows a 57% GFC crash. The past two years 25% annually. 2023-24 certainly counts as elevated.

Excess leverage: While there are some leveraged products put there like 2X and 3X ETFs, it is hardly a meaningful amount of capital (the same was said about Subprime, but that was wildly infiltrated throughout the entirety of the financial system)

New financial products: Alts? Private Credit? Neither is so much “New” as newly popular.

Expansion of Credit: Mostly tight, not very available.

Trading Volumes Spike: NYSE average daily trading volume (ADV) is roughly 1.36 billion shares – somewhat above historical average of 900 million to 1.2 billion shares per day. NASDAQ average daily volumes has exceeded 9 billion shares through 2025.​ ADV ranges 6–8 billion shares daily, so activity this year is well above average.

Perverse Incentives: I am not aware of much here other than the land grab in alts, the huge number of new ETFs, and the return of meme stock trading.

Tortured rationalizations: These are ever-present, but there has been some uptick lately.

Unintended Consequences: Have yet to fully happen.

Employment trends: Full employment is offset by eye-watering salaries for AI engineers.

Credit Spreads: Are very tight, and make me wonder why anyone would want to own HY when IG is almost the same pricing

Credit Standards: Still tight since the GFC.

Default Rates: Low, but moving higher in autos, credit card, mortgage but especially student loan debt.

Unusually Low Volatility: VIX atr 20 is not exactly complacent; as we saw in April, VOL has been quick to respond to any issue…

So while there are some signs of bubblicious activity, it is hardly overwhelming or seriously determinative in my view. Stocks are pricey, but this seems less like a bubble and more like a later stage bull market cycle.

Earlier this year, I noted what a spectacularly underappreciated 15 years we have enjoyed. The bubble talk looks like a lot more of the same…

Remember, Greenspan’s “Irrational Exuberance” speech was December, 1996. All bull markets run further, longer, and higher than most expect…

 

 

 

Previously:
Checklist: How to Spot a Bubble in Real Time (June 9, 2011)

A Spectacularly Underappreciated 15 Years (April 28, 2025)

 

 

 

Realtime Bubble Checklist
1. Standard Deviations of Valuation: Look at traditional metrics –  valuations, P/E, price to sales, etc. — to rise two or even three standard deviations away from the historical mean.

2. Significantly elevated returns:  The S&P500 returns in the 1990s were far beyond what one could reasonably expect on a sustainable basis. The years around Greenspan’s “Irrational Exuberance” speech suggest that a bubble was forming:

1995    37.58
1996    22.96
1997    33.36
1998    28.58
1999    21.04

And the Nasdaq numbers were even better.

3. Excess leverage: Every great financial bubble has at its root easy money and rampant speculation. Find the leverage, and speculation won’t be too far behind.

4. New financial products: This is not a sufficient condition for bubble, but it does seems that each major bubble has new products somewhere in the mix. It may be Index funds, derivatives, tulips, 2/28 Arms.

5. Expansion of Credit:  This is beyond mere speculative leverage. With lots of money floating around, we eventually get around to funding the public to help inflate the bubble. From Credit cards to HELOCs, the 20th century was when the public was invited to leverage up.

6. Trading Volumes Spike: We saw it in equities, we saw it in derivatives, and we’ve seen it in houses: The transaction volumes in every major boom and bust, almost by definition, rises dramatically.

7. Perverse Incentives: Where you have unaligned incentives between corporate employees and shareholders, you get perverse results — like 300 mortgage companies blowing themselves up.

8. Tortured rationalizations: Look for absurd explanations for the new paradigm: Price to Clicks ratio, aggregating eyeballs, Dow 36,000.

9. Unintended Consequences: All legislation has unexpected and unwanted side effects. What recent (or not so recent) laws may have created an unexpected and bizarre result?

10. Employment trends:  A big increase in a given field — real estate brokers, day traders, etc. — may be a clue as to a developing bubble.

11. Credit Spreads: Look for a very low spread between legitimately AAA bonds and higher yielding junk can be indicative of fixed income risk appetites running too hot.

12. Credit Standards: Low and falling lending standards are always a forward indicator of credit trouble ahead. This can be part of a bubble psychology.

13. Default Rates: Very low default rates on corporate and high yield bonds can indicates the ease with which even poorly run companies can refinance. This suggests excess liquidity, and creates false sense of security.

14. Unusually Low Volatility: Low equity volatility readings over an extended period indicates equity investor complacency.

The post RealTime Bubble Checklist appeared first on The Big Picture.

Did Goldman Just Spot 'Peak Reddit'?

A team of Goldman analysts led by Eric Sheridan published an earnings preview note that covered the digital advertising sub-sector. What caught our attention wasn't the changes in stock recommendations, but a section further down that cited SensorTower data on growth and engagement trends across major social media platforms. 

Building on our earlier report that "ChatGPT massively reduced Reddit citations," with SimilarWeb data showing steep declines in U.S. web traffic on Reddit, Sheridan expanded on this emerging theme, citing new SensorTower data that showed both monthly active users and time spent on Reddit have peaked. 

The decline and fall of social media pic.twitter.com/woMZkCDlsN

— zerohedge (@zerohedge) October 16, 2025

SensorTower shows Reddit's monthly user time spent in the app or website worldwide and the U.S. steadily increased since the early days of Covid, but likely peaked earlier this year, as shown in the data below... 

Data from SensorTower indicates that user growth & total time spent in app remains somewhat stable in the U.S. while seeing stronger growth in international markets and overall continuing to surprise to the upside (albeit seeing a slight deceleration towards the end of Q3). We call out four platforms that are seeing particularly strong engagement trends in Q3: Instagram (total time spent up +17% YoY and +16% YoY globally & in the U.S., respectively), Pinterest (+14% YoY / +21% YoY), YouTube (+1% YoY /+5% YoY), and Facebook ((1)% YoY / +3% YoY).

Reddit's global monthly active users have also plateaued over the past year. In the U.S., monthly active users peaked in the summer of 2024 and have since declined as users lose interest, likely hooked instead on short-form video platforms such as TikTok, YouTube Shorts, and Instagram or Facebook Reels.

The platforms that have seen the largest monthly average user growth since Jan 2021 levels are Reddit, Pinterest, and Instagram in the U.S. and Reddit, Snapchat and Instagram globally, according to SensorTower. In Q3, specifically, Pinterest, Instagram, and Snapchat are seeing the strongest global MAU growth amongst the comp set, with SensorTower data indicating average global MAUs grew +7% YoY, +5% YoY and +5% YoY in Q3 for each platform, respectively.

And where has the engagement shifted? Well, as the analysts point out, "short-form video remains a key driver of engagement growth for Instagram and YouTube." 

As we've discussed in prior research, short-form video remains a dominant theme within digital advertising and continues to be a key driver of engagement growth (time spent, sessions per day, etc.) for several of the major US platforms. To track this theme, we analyze data from SensorTower on user growth & engagement for what we consider to be the three primary short-form video platforms: TikTok, Instagram and YouTube. The data indicates that average time spent per user per day continues to increase for both Instagram (~52 mins daily in the U.S. and ~71 mins globally in Q3, vs. ~37 mins and ~54 mins in Q3'21, respectively) and YouTube (~79 mins daily in the U.S. and ~83 mins globally in Q3, vs. ~62 mins and ~71 mins in Q3'21, respectively). For TikTok, average U.S. time spent per user per day was ~78 mins/day, down from ~85 mins/day in Q3'21 and a peak of ~92 mins/day in mid 2023.

Let's take a step back with a focus on Reddit. At the start of the month, we cited Reddit's U.S. daily active users data via SimilarWeb from X user Bert Tian, who stated:

$RDDT US Website DAU (source @Similarweb ) has dropped sharply after ChatGPT massively reduced Reddit citations — traffic is not even close to early-year levels.

Multiple data vendors are all picking up the shift in ChatGPT citation patterns. Reasons still unclear, but one guess is that ChatGPT may be limiting web search for free accounts as a cost-cutting move to push monetization.

Source: X user Bert Tian

As we noted at the time, who in the AI chatbot world, including OpenAI, thought it was a great idea to pull citations from Reddit, a platform plagued with opinions rather than truth, which skews chatbot answers from end-users? Also, Reddit has a far-left hate epidemic. Even citing Wikipedia is a disaster for the pursuit of truth (hence Musk's move to launch Grokipedia).

Source: TryProfound

Why are Reddit monthly users and engagements sliding? Could users just be burnt out with endless streams of Trump headlines, or perhaps they're developing 'TikTok Brain Rot' with an addiction to short-form videos? Or are ChatGPT citation patterns helping to accelerate lower web traffic? There are many questions. 

One thing we do know: Shares have yet to recover since the Oct. 1 report about new traffic data.

ZeroHedge Pro Subs can read the entire report in the usual place. Chartpack is extensive, with a lot more in the report. 

Tyler Durden Thu, 10/16/2025 - 10:45

The post The Trump Boom: A Legend in His Own Mind appeared first on CEPR.

Fool Me Once...

By Bas van Geffen, Rabobank Senior Macro Strategist

The US-China trade war is flaring up again, and the US government is still shutdown. But it’s also earnings season and we have AI deals, so stocks are going higher. How long will that last? And if the S&P 500 suddenly does become sensitive to the unravelling of international relations and global trade, who caves first?

According to Treasury Secretary Bessent, it won’t be the US government. They will not negotiate with China, just because the stock market is going down. That’s easy to say when markets are still going up, but will they stick to it? In any case, such statements do not exude confidence.

Bessent and US Trade Representative Greer noted that the Chinese restrictions on rare earths show that China cannot be trusted with the global supply chain: “It’s an exercise in economic coercion on every country across the world.” The Treasury Secretary concluded that if China cannot be a reliable partner, then the world must decouple.

Considering that the Chinese restrictions on rare earths will give that decoupling an extra nudge, why is the US so unhappy? At the same time, Bessent floated the possibility of a longer deferral of US tariffs on Chinese goods, in return for a delay to Beijing’s new restrictions on rare earths. If China’s supply of rare earths and magnets has been so unreliable despite an earlier agreement between the two countries, then why is Bessent willing to try again?

In the eyes of the Trump administration, things are perhaps moving in the right direction. Even if they are, things are certainly moving too fast for the US and the global economy. But remember, the stock market will not affect the US’ position in the negotiations with China. Neither will potential supply chain disruptions, or economic damage.

Nonetheless, Bessent did offer China another offramp: he suggested that, perhaps, the vice minister of Commerce had “gone rogue.” The US Treasury Secretary added that he “believes China is open to discussion,” and said he was “optimistic that this can be de-escalated” thanks to the strong relationship between President Trump and President Xi.

Trump, however, declared that the US and China are now in a sustained trade war. So, will Bessent’s suggestion of new trade truce get Trump’s approval? And are Chinese officials willing to entertain negotiations, while the US lambasts them at the same time? Will Beijing drop its own vice minister to restart the talks? China did not take the offramp provided by Trump last weekend either.

As the tensions between the US and China re-escalate, the Trump administration’s tactics are becoming less and less covert. The Dutch minister of Finance denied that there had been any US involvement in the unprecedented move to take control of Nexperia, but court documents indicate that the US had in fact warned the Netherlands months earlier that the company could be put on the entity list, subjecting it to US trade restrictions.

Add outright election interference to that. Yesterday, Bessent said that the US would arrange another $20 billion support for Argentina, as the country tries to overcome a liquidity crisis. But will that support be conditional on Milei winning the mid-term elections later this month, just like the $20 billion swap line might be? Trump has certainly suggested that: “I’m with this man because his philosophy is correct [...] And if he wins, we’re staying with him. And if he doesn’t win, we’re gone.”

But we’ll undoubtedly have another AI-deal somewhere, soon.

Equities may continually post gains, gold is too. The metal has surpassed $4,200 per troy ounce, in what has been coined the “debasement trade.” The IMF warned that global public debt will exceed 100% of GDP by the end of the decade, which would be the highest since the aftermath of World War II.

The IMF suggests that governments “spend smarter,” as debt servicing costs are rising: “Redirecting public spending toward infrastructure, education, health, and research and development, without increasing overall spending, can deliver significant long-term gains in output,” which would in turn improve debt sustainability.

Yet, many countries have now realised that there are a couple more items to add to that list, including defence, critical resources, and industry.

Tyler Durden Thu, 10/16/2025 - 10:25