Zero Hedge

200,000 Immigrant Truck Drivers Begin Losing Licenses Under New Trump Admin Rule

200,000 Immigrant Truck Drivers Begin Losing Licenses Under New Trump Admin Rule

About 200,000 immigrant truck drivers in the United States could lose their commercial driver’s licenses once they expire under a new rule backed by the administration of Donald Trump, according to VNY.

Which leads us...and everybody else to ask: we had 200,000 immigrant truck drivers in the United States?

But we digress. The policy bars asylum seekers, refugees, and participants in the Deferred Action for Childhood Arrivals (DACA) program from obtaining commercial driver’s licenses. It is part of a wider crackdown on foreign truck drivers following several high-profile crashes last summer.

Experts warn the change could further strain the trucking industry, which already faces labor shortages while handling the majority of freight in the United States. Trucks transport more than 70% of the country’s cargo, but the sector struggles with long hours, relatively low pay, dangerous road conditions, and extended time away from home. As many American workers leave the field, immigrants have increasingly filled those roles.

In recent months, enforcement actions have intensified. The United States Department of Transportation has tightened English-language proficiency rules, leading to thousands of license revocations among immigrant drivers.

VNY writes that under the rule announced on February 11, people with various temporary residency permits will no longer qualify for commercial licenses, even if they are legally authorized to work in the U.S. Transportation Secretary Sean P. Duffy said the change aims to prevent “dangerous foreign drivers” from exploiting the licensing system and contributing to road safety risks.

Officials have also pointed to several fatal accidents involving immigrant drivers and argued that verifying their work histories can be difficult. Critics, however, say the policy unfairly targets immigrants and relies on unproven claims that foreign drivers are responsible for more accidents than American ones.

Tyler Durden Wed, 03/18/2026 - 20:10

200,000 Immigrant Truck Drivers Begin Losing Licenses Under New Trump Admin Rule

200,000 Immigrant Truck Drivers Begin Losing Licenses Under New Trump Admin Rule

About 200,000 immigrant truck drivers in the United States could lose their commercial driver’s licenses once they expire under a new rule backed by the administration of Donald Trump, according to VNY.

Which leads us...and everybody else to ask: we had 200,000 immigrant truck drivers in the United States?

But we digress. The policy bars asylum seekers, refugees, and participants in the Deferred Action for Childhood Arrivals (DACA) program from obtaining commercial driver’s licenses. It is part of a wider crackdown on foreign truck drivers following several high-profile crashes last summer.

Experts warn the change could further strain the trucking industry, which already faces labor shortages while handling the majority of freight in the United States. Trucks transport more than 70% of the country’s cargo, but the sector struggles with long hours, relatively low pay, dangerous road conditions, and extended time away from home. As many American workers leave the field, immigrants have increasingly filled those roles.

In recent months, enforcement actions have intensified. The United States Department of Transportation has tightened English-language proficiency rules, leading to thousands of license revocations among immigrant drivers.

VNY writes that under the rule announced on February 11, people with various temporary residency permits will no longer qualify for commercial licenses, even if they are legally authorized to work in the U.S. Transportation Secretary Sean P. Duffy said the change aims to prevent “dangerous foreign drivers” from exploiting the licensing system and contributing to road safety risks.

Officials have also pointed to several fatal accidents involving immigrant drivers and argued that verifying their work histories can be difficult. Critics, however, say the policy unfairly targets immigrants and relies on unproven claims that foreign drivers are responsible for more accidents than American ones.

Tyler Durden Wed, 03/18/2026 - 20:10

How The Iran War Could Trigger A Global Credit Crunch

How The Iran War Could Trigger A Global Credit Crunch

Authored by Ryan Smith via OilPrice.com,

The Iran war’s shock to oil and gas prices has, understandably, dominated much of the recent market news.  Though the downstream effects have yet to be fully understood, there is no question that we are in the throes of the greatest energy crisis in modern history, with significant implications for every facet of the modern economy.

One particular aspect that is just beginning to be appreciated is the financial one.  The onset of this latest Persian Gulf war is poised to severely disrupt a channel of liquid investment, known as the petrocapital cycle, which is vital to sustaining modern finance as we know it.  Its failure to operate effectively could inflict a significant credit crunch on global markets just as liquidity and available credit is becoming even more needed than ever.

Understanding why the petrocapital cycle, which was first examined thoroughly in el-Gamal and Jaffe’s Oil, Dollars, Debt, and Crises: The Global Curse of Black Gold, may soon be in jeopardy first requires a quick refresher on what this cycle is and how it operates.  In brief, the petrocapital cycle is the flow of finance from oil producers to the financial-system. It is largely sustained by regular infusions of capital from oil-exporting regions, like the Persian Gulf, whose rulers have long invested a significant share of their profits in the international financial markets. These investments provide markets with capital, preserve the fortunes of the oil-exporting elites, and keep the domestic economies from overheating due to excess spending at home.

This present form of the petrocapital cycle first came into existence in 1973 when OPEC’s member-states found themselves awash in the windfall profits reaped from the 1973 Oil Shock’s quadrupling of oil prices. Petrocapital, since its emergence, has grown to be an influential force in global markets, and fluctuations in its availability have fueled credit shocks. One of the first such examples of an oil-induced financial crisis was the Debt Crisis of 1982. 

The story of the debt crisis begins with the 1979 Oil Shock, which doubled the price of oil overnight and created the conditions for the anti-inflationary Volcker Shock. The final nail in the proverbial coffin was Saddam Hussein’s 1980 invasion of Iran and the decision by the Gulf monarchs to shift their investments from banks overseas to funding Iraq’s war against the newly-formed Islamic Republic of Iran. This combination of an oil shock, credit drought, and inflationary pressures forced sovereign borrowers in Latin America into default with lasting consequences.

While conditions around sovereign borrowing and international finance have changed, one element that has become more prevalent is the role of petrocapital.  Petrocapital in the 70s and 80s was best understood as a regular flow of invested profits from oil exporters. As globalization set in and Persian Gulf leaders sought to diversify their economies away from oil, a growing stream of Middle Eastern capital originating from financial hubs like Dubai and Kuwait has since emerged. Countries like the United Arab Emirates have further encouraged these trends by courting investment in real estate and offering sanctuary for tax exiles, promises which were premised on the assumption that the Persian Gulf would remain stable, peaceful, and a safe place to invest or relocate.  Increasing diversification has only encouraged these trends, and the Persian Gulf, before the war, was hailed as a major center for investment and financial capital, as attested by the estimated $1.4 trillion of assets held by the United Arab Emirates’ financial sector as of November 2025.

All these benefits vanished on February 28th. The closure of the Strait of Hormuz has, unquestionably, posed a serious problem for the financial positions of every Gulf petro-state.  Fitch Ratings, on March 5th, assessed the sovereign exposure of the Gulf monarchies and argued that if the Strait was only closed for a month and no serious damage was inflicted on oil infrastructure, then each state would suffer a mild downturn, due to lack of revenues, which would swiftly rebound once the war ended. Unfortunately for these sovereigns and Fitch, both these things appear to be true between the Iranian minefield and growing attacks on critical oil infrastructure. This, therefore, suggests everything downstream of these revenues, including the region’s financial hubs, will suffer.

These risks are compounded by the problems created by a lack of physical safety. Along with being fiscally at risk, banks in Dubai have become directly at risk of military strikes, with likely consequences for their ability to operate. On March 2nd, the Abu Dhabi stock exchanges closed until March 3rd due to the risk of drone strikes.  The Iranian military made this danger real on March 11th when they announced financial centers were now valid targets of war, an escalation which prompted major international banks like HSBC to close their offices in the Emirates and Citigroup and Standard Chartered to order employees to work from home. Two days later, the Dubai International Finance Center was targeted for drone strikes.  Such pressures, along with the direct risks to life and property, are likely to reduce Gulf banks’ ability to effectively respond to changing market conditions.

This disruption to both capital flows and regular operations comes just as global credit markets are already facing growing signs of turbulence.  Global stock markets have posted steady declines as rising tensions in the region have fueled fears of a global energy crisis.  This comes as debt markets show growing stresses, with one OECD official stating inflationary pressures, like those driven by the present energy crisis, would be a “big stress test”.  Private credit markets are also increasingly running low on lucrative contracts and have been forced into tight competition over less and less desirable bids. Bond markets, as recently as the end of February, were also showing signs of high demand in the face of growing economic uncertainty, suggesting there already was a lot of money chasing a dwindling pool of safe assets before the war began.

It, therefore, appears that the growing prominence of the Persian Gulf in global finance and present market conditions have created a vulnerability which has only emerged thanks to the unthinkable becoming reality. This oil shock may be the first of many interrelated economic shocks that are about to be unleashed on the global economy, constrict the flow of private capital into investment-hungry markets, and exacerbate the existing price crisis. Investors, policymakers, and planners should prepare for such conditions and the increased volatility that will be inherent to smaller, hungrier markets.

Tyler Durden Wed, 03/18/2026 - 19:45

How The Iran War Could Trigger A Global Credit Crunch

How The Iran War Could Trigger A Global Credit Crunch

Authored by Ryan Smith via OilPrice.com,

The Iran war’s shock to oil and gas prices has, understandably, dominated much of the recent market news.  Though the downstream effects have yet to be fully understood, there is no question that we are in the throes of the greatest energy crisis in modern history, with significant implications for every facet of the modern economy.

One particular aspect that is just beginning to be appreciated is the financial one.  The onset of this latest Persian Gulf war is poised to severely disrupt a channel of liquid investment, known as the petrocapital cycle, which is vital to sustaining modern finance as we know it.  Its failure to operate effectively could inflict a significant credit crunch on global markets just as liquidity and available credit is becoming even more needed than ever.

Understanding why the petrocapital cycle, which was first examined thoroughly in el-Gamal and Jaffe’s Oil, Dollars, Debt, and Crises: The Global Curse of Black Gold, may soon be in jeopardy first requires a quick refresher on what this cycle is and how it operates.  In brief, the petrocapital cycle is the flow of finance from oil producers to the financial-system. It is largely sustained by regular infusions of capital from oil-exporting regions, like the Persian Gulf, whose rulers have long invested a significant share of their profits in the international financial markets. These investments provide markets with capital, preserve the fortunes of the oil-exporting elites, and keep the domestic economies from overheating due to excess spending at home.

This present form of the petrocapital cycle first came into existence in 1973 when OPEC’s member-states found themselves awash in the windfall profits reaped from the 1973 Oil Shock’s quadrupling of oil prices. Petrocapital, since its emergence, has grown to be an influential force in global markets, and fluctuations in its availability have fueled credit shocks. One of the first such examples of an oil-induced financial crisis was the Debt Crisis of 1982. 

The story of the debt crisis begins with the 1979 Oil Shock, which doubled the price of oil overnight and created the conditions for the anti-inflationary Volcker Shock. The final nail in the proverbial coffin was Saddam Hussein’s 1980 invasion of Iran and the decision by the Gulf monarchs to shift their investments from banks overseas to funding Iraq’s war against the newly-formed Islamic Republic of Iran. This combination of an oil shock, credit drought, and inflationary pressures forced sovereign borrowers in Latin America into default with lasting consequences.

While conditions around sovereign borrowing and international finance have changed, one element that has become more prevalent is the role of petrocapital.  Petrocapital in the 70s and 80s was best understood as a regular flow of invested profits from oil exporters. As globalization set in and Persian Gulf leaders sought to diversify their economies away from oil, a growing stream of Middle Eastern capital originating from financial hubs like Dubai and Kuwait has since emerged. Countries like the United Arab Emirates have further encouraged these trends by courting investment in real estate and offering sanctuary for tax exiles, promises which were premised on the assumption that the Persian Gulf would remain stable, peaceful, and a safe place to invest or relocate.  Increasing diversification has only encouraged these trends, and the Persian Gulf, before the war, was hailed as a major center for investment and financial capital, as attested by the estimated $1.4 trillion of assets held by the United Arab Emirates’ financial sector as of November 2025.

All these benefits vanished on February 28th. The closure of the Strait of Hormuz has, unquestionably, posed a serious problem for the financial positions of every Gulf petro-state.  Fitch Ratings, on March 5th, assessed the sovereign exposure of the Gulf monarchies and argued that if the Strait was only closed for a month and no serious damage was inflicted on oil infrastructure, then each state would suffer a mild downturn, due to lack of revenues, which would swiftly rebound once the war ended. Unfortunately for these sovereigns and Fitch, both these things appear to be true between the Iranian minefield and growing attacks on critical oil infrastructure. This, therefore, suggests everything downstream of these revenues, including the region’s financial hubs, will suffer.

These risks are compounded by the problems created by a lack of physical safety. Along with being fiscally at risk, banks in Dubai have become directly at risk of military strikes, with likely consequences for their ability to operate. On March 2nd, the Abu Dhabi stock exchanges closed until March 3rd due to the risk of drone strikes.  The Iranian military made this danger real on March 11th when they announced financial centers were now valid targets of war, an escalation which prompted major international banks like HSBC to close their offices in the Emirates and Citigroup and Standard Chartered to order employees to work from home. Two days later, the Dubai International Finance Center was targeted for drone strikes.  Such pressures, along with the direct risks to life and property, are likely to reduce Gulf banks’ ability to effectively respond to changing market conditions.

This disruption to both capital flows and regular operations comes just as global credit markets are already facing growing signs of turbulence.  Global stock markets have posted steady declines as rising tensions in the region have fueled fears of a global energy crisis.  This comes as debt markets show growing stresses, with one OECD official stating inflationary pressures, like those driven by the present energy crisis, would be a “big stress test”.  Private credit markets are also increasingly running low on lucrative contracts and have been forced into tight competition over less and less desirable bids. Bond markets, as recently as the end of February, were also showing signs of high demand in the face of growing economic uncertainty, suggesting there already was a lot of money chasing a dwindling pool of safe assets before the war began.

It, therefore, appears that the growing prominence of the Persian Gulf in global finance and present market conditions have created a vulnerability which has only emerged thanks to the unthinkable becoming reality. This oil shock may be the first of many interrelated economic shocks that are about to be unleashed on the global economy, constrict the flow of private capital into investment-hungry markets, and exacerbate the existing price crisis. Investors, policymakers, and planners should prepare for such conditions and the increased volatility that will be inherent to smaller, hungrier markets.

Tyler Durden Wed, 03/18/2026 - 19:45

Chinese State Bankers Face Bonus Cuts Of At Least 30%

Chinese State Bankers Face Bonus Cuts Of At Least 30%

Senior bankers at China’s state-backed financial institutions are preparing for bonus cuts of at least 30% as Beijing presses ahead with sweeping pay reforms across its $69 trillion financial sector, according to Bloomberg.

At two major state-owned banks, senior managers — including department heads — saw their 2025 bonuses reduced by 30% to 50%, according to people familiar with the matter. At a mid-sized national lender, division chiefs experienced roughly a 40% drop in variable pay last year.

The cuts are part of a broader campaign by Xi Jinping to promote “common prosperity” and curb what officials describe as the extravagant lifestyles of top bankers.

Regulators are also trying to address a pay imbalance in the industry. In many Chinese financial firms, mid-level managers have historically earned more than top executives, whose compensation is capped due to their status as Communist Party officials.

Bloomberg writes that late last year, the Ministry of Finance asked major state-backed institutions to submit plans to overhaul compensation structures. While many firms are still waiting for approval, some have already implemented retroactive pay cuts. Bonuses are the main target because variable pay typically makes up 50% to 70% of managers’ total compensation.

Meanwhile, international banks with a large presence in Asia, such as HSBC Holdings and Standard Chartered, increased their bonus pools by about 10%.

The belt-tightening extends beyond banks. A major state-owned insurer also reduced 2024 bonuses for mid-level managers by at least 30%, according to a person familiar with the decision.

Chinese banks posted combined profits of 2.38 trillion yuan ($346 billion) last year, up 2.3%, despite shrinking margins and non-performing loans remaining near record highs.

The bonus cuts reflect tighter government control over a sector once known for generous pay. Alongside compensation reforms, authorities have stepped up anti-corruption efforts, leading to several high-profile investigations and harsh penalties.

Even so, parts of the industry are beginning to stabilize. A recent rise in dealmaking has prompted some Chinese brokerage firms to rebuild investment banking teams by hiring dozens of junior and mid-level staff. Some firms have also moved to raise base salaries closer to pre-crackdown levels to stay competitive for talent, though bonuses remain closely monitored by regulators.

Tyler Durden Wed, 03/18/2026 - 19:20

Chinese State Bankers Face Bonus Cuts Of At Least 30%

Chinese State Bankers Face Bonus Cuts Of At Least 30%

Senior bankers at China’s state-backed financial institutions are preparing for bonus cuts of at least 30% as Beijing presses ahead with sweeping pay reforms across its $69 trillion financial sector, according to Bloomberg.

At two major state-owned banks, senior managers — including department heads — saw their 2025 bonuses reduced by 30% to 50%, according to people familiar with the matter. At a mid-sized national lender, division chiefs experienced roughly a 40% drop in variable pay last year.

The cuts are part of a broader campaign by Xi Jinping to promote “common prosperity” and curb what officials describe as the extravagant lifestyles of top bankers.

Regulators are also trying to address a pay imbalance in the industry. In many Chinese financial firms, mid-level managers have historically earned more than top executives, whose compensation is capped due to their status as Communist Party officials.

Bloomberg writes that late last year, the Ministry of Finance asked major state-backed institutions to submit plans to overhaul compensation structures. While many firms are still waiting for approval, some have already implemented retroactive pay cuts. Bonuses are the main target because variable pay typically makes up 50% to 70% of managers’ total compensation.

Meanwhile, international banks with a large presence in Asia, such as HSBC Holdings and Standard Chartered, increased their bonus pools by about 10%.

The belt-tightening extends beyond banks. A major state-owned insurer also reduced 2024 bonuses for mid-level managers by at least 30%, according to a person familiar with the decision.

Chinese banks posted combined profits of 2.38 trillion yuan ($346 billion) last year, up 2.3%, despite shrinking margins and non-performing loans remaining near record highs.

The bonus cuts reflect tighter government control over a sector once known for generous pay. Alongside compensation reforms, authorities have stepped up anti-corruption efforts, leading to several high-profile investigations and harsh penalties.

Even so, parts of the industry are beginning to stabilize. A recent rise in dealmaking has prompted some Chinese brokerage firms to rebuild investment banking teams by hiring dozens of junior and mid-level staff. Some firms have also moved to raise base salaries closer to pre-crackdown levels to stay competitive for talent, though bonuses remain closely monitored by regulators.

Tyler Durden Wed, 03/18/2026 - 19:20

Everything, Everywhere, All At Once

Everything, Everywhere, All At Once

Authored by No1 at Gold & Geopolitics substack,

Let me start with a number.

In 1980, when the Iran-Iraq war disrupted global oil supply, the volume lost was around 4 million barrels per day.

Painful. The world went into recession. Volcker raised rates to 20% to kill inflation. It nearly killed the economy in the process. We called it a crisis and we meant it.

The current Hormuz blockade is running at roughly 20 million barrels per day.

The futures market, in its infinite wisdom, is pricing a quick resolution.

Trump says the war is “basically over”.

His Defence Secretary says it’s “only just the beginning”.

One of them presumably has read the intelligence reports.

The other has a golf course booked.

That’s the pin.

But that’s not the bubble.

My estimation where mines are likely placed (from “War is Peace”)

Even in the most optimistic scenario - ceasefire tomorrow, everybody shakes hands - the Maersk CEO noted it takes at least ten days after a ceasefire for tanker insurance to clear. Then mine-clearing: Iran has been laying mines in the Strait, and removing them will take weeks to months. Then tankers reposition, loads getting secured, and finally the flow resumes.

The oil futures curve is pricing step five as if it follows step one with a 48-hour lag.

It cannot physically happen on that timeline.

And Iran isn’t just shooting wildly at targets. Yesterday, Fujairah - the world-class bunkering hub sitting outside the Strait, the bypass everyone assumed would soften the blow - has been deliberately targeted. Tehran isn’t just closing Hormuz. It’s also closing the workarounds. One by one. Iran got fed up and decided to take down the imposed sanctions one way or another. And USrael just gave them the ultimate excuse.

If you’ve been reading my silver papers, you know there is a gap. A gap I call “PvP”… No not the gaming term. The Paper vs Physical.

And oh boy. Is it screaming!! Brent futures in New York closed Friday at $104. Elevated but ok-ish. Dubai crude - you know, the real physical oil, real barrels, real buyers - was trading around $127-140. Normally Brent commands a premium over Dubai. Now Dubai is $37 above the paper. And that’s just crude. Bunker fuel in Singapore hit $140 per barrel this week. In Fujairah, $160. High-grade marine fuel, $175. Ships burning fuel right now are paying those prices regardless of what the futures strip says in New York.

Silver at a $12 premium to Shanghai? pffff Silver… Amateur hour compared to oil!

If you’ve read Strait to Brrrrr, none of this is surprising. Paper price is massaged. The New York futures desk is clearly on something the physical buyers aren't.

However this started, this isn’t a military confrontation anymore. I’m even starting to doubt it ever was. The Strait stays closed, oil stays elevated. Oil stays elevated, inflation stays elevated. Inflation stays elevated, the Fed cannot cut. The Fed cannot cut, and $36 trillion in federal debt - already costing $880 billion a year in interest before the war added a billion dollars a day to the tab - gets rolled over at rates that make it progressively less serviceable. The dollar weakens under that strain. A weaker dollar makes the next barrel of imported oil more expensive in dollar terms. Which feeds back into inflation. Which keeps the Fed pinned.

It’s a loop. Iran just needs to keep the strait closed long enough for it to complete a few rotations. The bond market has noticed. Treasury yields are rising in the middle of a geopolitical crisis - not falling. Capital isn’t fleeing to bonds. It’s fleeing to gold. That is a verdict on the US fiscal position.

Trump knows the physical reality, which is why last week he called Putin. The country America has been sanctioning for four years. The one it branded an aggressor, a pariah, an enemy of the liberal world order. He called to ask for help. Then he went further and lifted Russian oil sanctions outright. A Democratic Senator responded with perhaps the best summary of the year: “Looks like we fought Iran and Russia won”.

What else? The IEA approved a record 400 million barrel reserve release. Bessent telegraphed futures market intervention to cap prices. Russian sanctions lifted. Each one a gesture. On my feed someone quoted: “The oil market is massively short of supply. The other options the administration has, other than ending the war, are actually pretty limited”. Woops.

That’s the pin. But actually, the pin in itself doesn’t matter. Really truly doesn’t matter. What does matter greatly however, is WHAT it pricked…

In 1980, US federal debt stood at 26% of GDP. Today it’s 120%. That’s the difference between the same shock hitting a healthy patient and hitting someone already on oxygen. The Volcker treatment that worked then is structurally unavailable now. But don’t worry! These are the same people who called inflation transitory. I'm sure they've got it. This time.

The interest bill on existing debt is already $880 billion a year, more than defence, more than Medicare. Rates at 20% on $37 trillion would cost more than the entire federal budget in interest payments alone. That lever doesn’t exist anymore.

What exists instead is $846 trillion in notional OTC derivatives. Up from $108 trillion in 2000. An eightfold expansion in 25 years, and mid ‘24 → ’25 was the largest growth rate at 16% since 2008.

To put that number in some kind of human context: $846 trillion is roughly eight times the entire global GDP. With 1% of it you could buy every company in the S&P 500 twice over. With 0.01% you could buy Warren Buffett. With a rounding error - 0.0001% - a superyacht, a sports franchise, and a small Caribbean island, and you’d still have 99.9999% left. Nobody has this money, of course. Nobody owns $846 trillion. It’s the notional value of bets stacked on top of bets - leverage and hedges and derivatives daisy-chained to other derivatives. It nets out in normal conditions. In abnormal conditions, “nets out” becomes “finds out”.

Buffett called them ‘weapons of mass financial destruction’ in 2003. The book was $85 trillion then.

The bulk of the current book - around $548 trillion - is interest rate derivatives. All of it priced on a world where oil is $70 and rates are roughly stable. Guess what just happened? Oil exploding (quite literally at times) make counterparties not being able to meet margin calls (guess why gold and silver are trembling so much) and that failure cascades through the chain.

The private credit system was already the weakest link before the war. I covered the gating wave in my previous article so I’m not going to repeat it here, but the language from people who are in the know got pretty alarming. Mohamed El-Erian reached for Bear Stearns 2007 as his reference point. Dimon started talking about cockroaches. Dimon… Talking about cockroaches… The Treasury Secretary himself said he was ‘concerned’ about private credit. When the man responsible for placing a trillion dollars per quarter in new debt publicly expresses concern about the credit system he depends on to function, well… I’ll leave it at that.

Think the gating’s bad? Let me reassure you *evil grin*. One in five companies in the Russell 3000 cannot service their debt from current income. Over half of all investment grade paper is a single downgrade from junk. $5 trillion in corporate debt rolls over in the next four years at current rates, into a war-driven inflationary environment the Fed cannot cut its way out of. The losses are in there. Just not visible yet. When they surface, the institutions holding private credit will face redemption pressure at exactly the moment public markets are offering their best entry points since 2022 /s. Nah, just kidding. They dump whatever they can. Anything, just about anything unrelated with their illiquid portfolio will be hit. You've seen this movie before. Gold fell when Iran struck. Silver fell. Same mechanics, a tad larger. Think ‘08 or ‘00 on steroids.

Now picture what happens when the equity markets start to move. The S&P 500 closed up 1% on Sunday night. The Dow gained 388 points. Meanwhile, fertiliser benchmarks are up 25-44% in seventeen days. Think food. Helium has doubled. Think chips - not the edible ones. Pharmaceutical feedstock pipelines are depleting. The wall between the financial “economy” and the real one is still holding. Walls do that, right until they don’t.

When people need cash fast, they sell what’s liquid. ETFs are the most liquid thing in the world. They sell indiscriminately - tech, gold miners, silver, and just about anything else. You don’t sell what you want to sell. You sell what has a bid. And passive investment? Volume wise, ETFs are like 60% of US equity markets (2024). In 1996 that was only 6%. Which means that when selling starts it’s mechanical. No analysis. No discrimination. Every ETF holder hitting the same exit through the same small door at the same time.

Think of “Liberation Day” as a test run. First-ever simultaneous crash in stocks, bonds, and the dollar - the thing that was supposed to go up when everything else went down.

Tie into that the 401k withdrawals that hit a record high this week. The passive investment machine is leaking from the bottom while demographics drain it from the top.

Feeling comfortable yet? *super evil grin*

Underneath all of this, slower than any war and more permanent than any crisis, is something the financial press doesn’t really mention:

People aren’t having any children.

US fertility hit an all-time low in 2024. The general fertility rate is still falling. IMPLAN puts 1.4 million fewer Americans contributing to housing demand, retail spending, and service consumption in 2025 than trends would have predicted. To put that in numbers: $104 billion in GDP. Not exactly gone, not really disappeared. It just never existed in the first place.

It’s a vicious circle: housing is too expensive, so young people delay children. Fewer children means less future housing demand. Which should eventually reduce prices, except the lag is 20-30 years, and in the meantime housing stays expensive, so the people who couldn’t afford a house still can’t, still don’t have children, and the loop tightens at its own pace regardless of what the Fed does or what happens somewhere in the narrow waterways in exotic places.

Added: the boomers are saying bye sayonara.

The generation that inflated every asset class for 40 years through automatic 401k contributions is, somewhere around now, flipping from net buyers to net sellers. Of course it’s impossible to say like “March, 17: boomers start to cash out their 401ks”… Nope, the tide just turns. The same passive machine that provided an inexorable, automatic bid for equities and bonds and real estate - every payday, every year, for four decades - begins to redeem. Quietly. Continuously. For the next twenty-some years. Every asset they inflated on the way up faces a headwind on the way out. Not a crash. A long, grinding, demographically-inevitable ratchet.

Another angle I want to cover is the petrodollar. I covered this already in “The Bretton Whoops”. But the short version is: oil was priced in dollars, dollars were recycled into Treasuries, and the US military keeps the Gulf safe. It required two things - a reliable dollar and a credible security guarantee. The dollar’s reliability cracked in 2022 when Washington froze Russia’s reserves. The security guarantee cracked when the US started a war they cannot finish.

The dollar’s share of global FX reserves has since fallen to around 45%, the lowest since the 1990s. Gold’s share has quadrupled in twelve years. Gulf states are reportedly discussing pulling investment commitments from the US.

And now Iran has done something structurally interesting. It didn’t just close the Strait - it converted it into a tollgate. The toll isn’t money - yet. It’s alignment. Ten countries have been offered safe passage: China, India, Pakistan, Turkey, and others. The US isn’t on the list. This isn’t a military tactic. It’s economical.

Lots of people have the wrong framing. They think “petrodollar is dead, long live the yuandollar”. Right? Wrong frame entirely. China doesn’t want a reserve status. Couldn’t stomach it if it tried. Because a reserve currency means running a permanent trade deficits to pump your currency into the global system - America has been doing this for 50 years and the reward is a rust belt, a $37 trillion debt tab, and a bond market that needs foreigners to keep showing up or the whole thing seizes. China watched that happen and said: 不用了，谢谢. And opening the capital account enough to make yuan genuinely reserve-worthy would mean letting money flow freely across the border - ending the CCP’s ability to direct credit and control the financial system on Beijing’s terms. They’d sooner eat the wallpaper.

What the yuan-for-oil arrangement being implemented actually is, is an industrial policy dressed as currency diplomacy. You sell your oil into the permitted lane. You receive yuan. Now you’re sitting on yuan in a system with capital controls - you can’t just convert it and park it wherever you like. Your options are: buy Chinese goods, buy Chinese infrastructure contracts, invest in Chinese assets. That flow cycles straight back into Chinese factories and Chinese employment. China doesn’t have to stimulate its domestic consumption anymore. It exports the demand problem onto its trading partners and invoices it as a geopolitical arrangement. Three hundred million jobs - and unlike the US - no helicopter money required.

Those dollars that used to flow into Treasuries don’t just suddenly rush home. They just stop showing up at the next auction. Treasury needs to place roughly a trillion dollars every hundred days. Fewer buyers means higher yields. Higher yields mean the Fed is cornered. A cornered Fed means the printer runs. Same mechanism as demographics, same mechanism as the derivatives book, same direction.

My long-running conviction - and I’ve been saying this long enough that it stopped sounding contrarian and started sounding obvious - is that the world ends up back on a gold standard. Not the romanticised version where you rattle coins in your pocket. Though honestly, with modern payment rails, a gold-backed account is functionally identical to a dollar account. You’d never touch the metal. You’d just change the ticker from USD to XAU and carry on. The technology exists right now. The obstacle isn’t infrastructure. It’s that the people running the current system would rather light themselves on fire.

What happens first, before any grand declaration, is narrower: gold becomes the settlement layer between sovereigns who no longer trust each other’s paper. The US is apparently net-settling its trade deficit with China in gold - if that data holds up. In three of the last four months it seems that gold is flowing East. No Bretton Woods conference. No announcement. Just two countries quietly deciding that when the paper gets complicated, the metal clears the table. That’s how monetary systems actually change - not by proclamation but by practice, one bilateral settlement at a time, until enough of them are doing it that someone calls a conference to ratify what’s already happened. The Bretton Woods conference didn’t create the dollar system. It formalised what the war had already decided.

The next conference is coming. It just hasn’t been scheduled yet.

Silver. Because I can’t write a piece about systemic fragility without it, and because this week’s data is worth your attention even if the price chart isn’t.

The paper price looks terrible. Miners are trading like silver is heading back to $40. Silver Santa - one of the accounts I follow on Twitter (yeah, I’m old) - moved 40% to cash, describing “a strong pre-COVID feeling”. The technical picture is ugly.

But the crucial part: the physical reality didn’t get that memo.

The COMEX “run rate to zero” ticked down to 89 days as of Friday, from 93 days on Thursday. Four days burned in one. The SGE briefly stopped publishing silver inventory data mid-week, then quietly resumed. Shanghai is still paying a 13-17% premium over London. The same paper/physical divergence playing out in oil is running in silver at a slower pace with a much longer fuse.

But what does a draining vault have to do with your savings account?

More than most people think. The COMEX sets the global silver price. But if the COMEX increasingly doesn’t have the physical metal - and the run rate suggests it won’t for long - then the price it sets is a fiction. An unallocated silver account at your bank is a claim on that fiction. An ETF share is a claim on that fiction. When the fiction and the physical reality eventually converge, it won’t be because the paper comes up to meet the physical. It’ll be because the paper can no longer pretend.

Same mechanism as Dubai crude. Same mechanism as the derivatives book. Just a slower fuse.

When $68 trillion in US equity markets eventually moves - and it will - and the indiscriminate ETF selling hits everything, and the margin calls cascade through a derivatives book built on assumptions that no longer hold, and zombie companies start defaulting, and the boomer redemptions add their steady mechanical pressure, and 401k hardship withdrawals accelerate - the question of where capital goes becomes very concrete. Bonds? Already struggling to absorb a trillion per quarter. Cash? In which currency? Real estate? In a demographically challenged market with rising yields?

Gold has a structural bid from central banks who drew their conclusions in 2022 and have been buying ever since. Silver has vaults on an 89-day countdown and a paper price that hasn’t caught up yet.

I’m buying the dips. Have been. Will continue.

(A small aside: I’m considering opening a dedicated Substack to document my trades in real time - with a ten-minute lag - for those who want to follow the positions, not just the analysis. The analysis stays here, free.)

None of this is hidden.

None of it requires a security clearance or even a Bloomberg terminal. It’s all there, in the vault data, the yield curves, the fertility statistics, the derivatives book, the bunker fuel prices. The information exists. The pattern is legible.

The question was never whether this would happen.

The question was always who would be holding paper when it did.

Each crisis gets a fresh name but the same printer... TALF, TARP, BTFP, BTFD, YOLO, CTRLP.

*  *  *  STOCK UP OR REFRESH YOUR SUPPLY

14 Day Emergency Food Bucket

4,500 Seeds - GMO-Free, non-hybrid, open-pollinated

Beef, Chicken, Sausage - Meat & Rice Survival Bucket

Tyler Durden Wed, 03/18/2026 - 18:55

Why The Left Is More Distressed, Anxious, & Filled With Hate Than The Right

Why The Left Is More Distressed, Anxious, & Filled With Hate Than The Right

Authored by 'Sallust' via DailySceptic.org,

There is an interesting article in the Telegraph by a psychotherapist called Jonathan Alpert, called ‘There’s a reason the Left seems more psychologically distressed than the Right’ (you can read it here).

This is how he opens:

In my clinical practice, one pattern has become increasingly difficult to ignore. Among a subset of patients on the political Left, hostility toward political opponents goes beyond dislike or even hatred.

It sometimes takes the form of moralised fantasies about an opponent’s death, disappointment that Donald Trump’s shooter did not have better aim, or statements that certain public figures ‘deserve’ to be eliminated for the greater good. These remarks are rarely presented as literal intent. But they nevertheless offer a revealing glimpse into emotional regulation and psychological wellbeing.

It appears that the Left-leaning patient is quick to express his or her distress in aggressive ways:

What stands out is not only the content of these expressions, but their tone. They are often delivered with intense anger and no shame, as though such thoughts are an understandable or even justified response to the political moment. At no point does the patient see these reactions as excessive or out of control.

Similar behaviours can be observed in real life, too. I was walking around New York City in the summer after the ‘No Kings’ protests. I was looking at a heaping high pile of anti-Trump signs and a woman came up to me and said: “Aren’t these great?” My response: “I kinda like some of what Trump has done.” Her response: “WELL F— YOU THEN!”’

Conversely, those on the Right are more restrained:

Conservative patients tend to behave somewhat differently. I routinely hear strong dislike, contempt and anger toward political leaders they oppose and it’s not uncommon to hear a patient say they disliked President Biden or strongly disagreed with his stance on the border. Many patients viewed Kamala Harris as incompetent and not at all prepared to be president. Some even described her as “dumb”.

But in my experience, this hostility rarely crossed into wishes of annihilation. Political opponents might be seen as wrong, corrupt or dangerous, but they are still human. From a clinical perspective, that distinction matters.

Later in the piece, Alpert explains this different in more detail:

On the Right, by contrast, there has long been a tendency to emphasise emotional restraint. Stoicism is admired. Complaining is viewed with suspicion. Personal struggle is expected to be managed privately. I have found that conservative patients are far less likely to describe their distress in therapeutic language or frame discomfort as pathology. That does not mean they suffer less. It means they express suffering differently.

Political anger on the Right more often appears as cynicism, resentment or disengagement rather than vulnerability or victimhood. Many conservative patients view politics as important but ultimately secondary. Their primary sources of meaning might be family, work, faith and local responsibility. When elections are lost, they tend to return to careers, marriages, children and routines. Politics frustrates them, but it does not typically dominate their life.

On the Left, political identity can often become inseparable from selfhood. When politics is experienced as an all-encompassing struggle between good and evil, emotional intensity escalates. Opponents are no longer merely wrong, but dangerous. Disagreement becomes existential threat. Loss becomes catastrophe.

What Alpert doesn’t apparently consider is the extent to which this difference might be attributable to age. After all, younger adults are more inclined to be attracted to the monochrome politics of the Left, their brains as yet unsaddled with the complications, provisos and more balanced considerations of a longer life. Older adults are inevitably more inclined to the ‘seen it all before’ form of cynicism.

Another way of looking at the issue is that people who are anxious and inclined to distress, and therefore perhaps more liable to explosive outbursts of rage, are more easily attracted to Left-wing politics, as explained in an online article published by two academics on Cambridge University Press, in this instance looking at people’s attraction to Left-wing economic policy as a means of escaping their sense of social exclusion.

In ‘Why anxious people lean to the Left on economic policy: personality, social exclusion and redistribution’, Adam Panish and Andrew Delton observe that:

Right-wing beliefs function as a salve for people who are chronically anxious and fearful, at least according to one of the oldest and most influential theories in political psychology. Yet recent research shows that liberals, not conservatives, are more prone to negative emotions. The link between mental health and ideology has generated much interest, sending journalists and pundits scrambling to figure out why liberals are so “depressed, anxious, or otherwise neurotic compared to conservatives”.

An article in Columbia University Magazine explains ‘Why depression rates are higher among liberals’:

American adults who identify as politically liberal have long reported lower levels of happiness and psychological well-being than conservatives, a trend that mental-health experts suspect is at least partly explained by liberals’ tendency to spend more time worrying about stress-inducing topics like racial injustice, income inequality, gun violence and climate change.

Now a team of Columbia epidemiologists has found evidence that the same pattern holds for American teenagers. The researchers analysed surveys collected from more than 86,000 12th graders over a 13-year period and discovered that while rates of depression have been rising among students of all political persuasions and demographics, they have been increasing most sharply among progressive students — and especially among liberal girls from low-income families.

You can read the Columbia epidemiological paper here. Another paper, available on Researchgate, concluded from research that:

There is a strongly elevated risk for mental illness among the extreme liberals (+150%), a small increase among the liberals and slightly liberals (+29-32%), and somewhat lower rates among conservatives and extreme conservatives (–17-24%). Breaking the pattern, slightly conservatives had a marginally increased rate (+6%). A variant of this analysis was also carried out by including the happiness metrics reverse-coded. This produced materially the same pattern, but was weaker since the happiness items had a weaker relationship with political ideology than the mental illness variables.

The Institute for Strategic Dialogue has a piece analysing aggression in Left-wing politics, while also acknowledging its presence on the Right. But the Left has some strong defining features:

Drawing on our own definition of extremism and this crucial distinction, we suggest that Left-wing extremism should be defined as a belief system that:

  • Dogmatically claims the absolute moral superiority of communist or socialist political values,
  • That separates political actors into binary moral categories accordingly, and
  • That aspires to gain a monopoly of control over society.

Left-wing extremists commonly reject key tenets of liberal democracies, among them the separation of powers, universal human rights and political pluralism. They frequently express sympathies for authoritarian regimes and the conspiracy theories spread by them.

Of course, a common characteristic of the Left is to blame everyone else in a fog of febrile and desultory grievances, and that’s just as applicable to aggressive and angry speech. Trotsky exonerated such behaviour: “Abusive language and swearing are a legacy of slavery, humiliation and disrespect for human dignity, one’s own and that of other people.”

Looking up ‘Righteous Anger’ on AI produced this explanation:

Anger makes you feel righteous by functioning as a moral disinfectant, transforming feelings of powerlessness into a sense of superiority, vindication and justified control. It acts as a ‘power’ emotion that reinforces self-worth and confirms your moral standards against perceived injustice, offering a comfortable sense of being ‘right’.

Nothing could have described an angry and distressed Left-wing activist better.

Jonathan Alpert’s piece in the Telegraph is worth reading in full.

Tyler Durden Wed, 03/18/2026 - 18:05

Fed Remains On Hold (As Expected) Amid 'Uncertain Implications' Of War With Iran

Fed Remains On Hold (As Expected) Amid 'Uncertain Implications' Of War With Iran

Tl;dr: Rates on hold as expected with a hawkish tilt to 'uncertainty' around the Iran war clouding the outlook. The Dot-Plot showed no real change (7 on hold, 12 at least 1 cut in 2026) but inflation expectations surged in the SEP.

*  *  *

A lot - and we mean a lot - has happened since the last FOMC meeting (Jan 28th).

Oil is up 54% since the last FOMC meeting, bitcoin has tumbled. Gold and stocks are also down notably while the dollar has strengthened...

Both growth and inflation data have outperformed since the last FOMC meeting (but as the chart shows, fears are rising over stagflation as the impact of higher energy prices - and tighter financial conditions - could weigh on growth)...

Rate-cut expectations for 2026 have collapsed since the last FOMC meeting (most notably since the war began) with less than one full cut now priced in...

The market is priced for absolutely nothing to happen today (from a rate change perspective - higher or lower), so all eyes will be on the number of dissents, the new set of SEP (dots) data, and any commentary on the economy and/or the impact of the war.

Expectations are for a continuation of a "hawkish hold" amid heightened uncertainty.

FOMC Statement

Rates remain on hold with one dissent

  • *FED HOLDS BENCHMARK RATE IN 3.5%-3.75% RANGE IN 11-1 VOTE

  • *FED SAYS GOVERNOR STEPHEN MIRAN DISSENTS IN FAVOR OF RATE CUT

Fed statement comparison: exactly as expected.

  • Very little changes, small downgrade to labor market ("some signs of stabilization" to "little changed in recent months"),

  • ...and brief discussion or Iran war ("implications of developments in the Middle East for the U.S. economy are uncertain")

MUFG’s George Goncalves says this is a “neutral” statement from the FOMC.

“The statement tweaks are an attempt at trying to avoid sending any signals while conveying they are on guard for any growth shocks and inflation spillover from the Middle East Conflict.”

Dots: Statement of Economic Projections 
  • *FED MAINTAINS PROJECTIONS FOR ONE RATE CUT IN 2026, ONE IN 2027

The new dots show 7 Fed members preferring to hold for the rest of the year with 12 preferring at least 1 more cut...

In 2027, there is now only one member who sees a rate-hike...

So, rather interestingly, The Fed left the dots basically unchanged from December but spiked inflation expectations for 2027 for both headline and core to 2.7% (vs 2.4% and 2.5%)

As Bloomberg's Ira Jersey noted:

“Somewhat less obvious in the statement about Middle East led-uncertainty, but the higher inflation expectations in the SEP are certainly a sign the Fed is more concerned about current oil inflation, and less about next year. So a level shift is more or less built into their forecasts."

Now all eyes turn to Powell to see how 'hawkish' this hold is?

Tyler Durden Wed, 03/18/2026 - 15:40

US Median Rent Hits 4-Year Low, 30th Straight Month of Decline

US Median Rent Hits 4-Year Low, 30th Straight Month of Decline

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

Renters across the United States may be able to save a bit more on apartment leases this month, as rents nationwide hit a four-year low last month, marking the 30th consecutive month of declines.

A sign is posted in front of an apartment building with available rentals in San Francisco on June 9, 2023. Justin Sullivan/Getty Images

In its February Rental Report issued on March 17, Realtor.com recorded that the national median rent was $1,667, with 15 major markets posting rents more than 10 percent below their pandemic-era peaks.

The median rent for studio, one-bedroom, and two-bedroom apartments fell last month to its lowest level since March 2022. Nationally, the median rent fell by $29, or 1.7 percent, from a year earlier. While rents remained 14.2 percent higher than pre-pandemic levels in February 2020, they were $90, or 5.1 percent, lower than their peak in the summer of 2022.

“The persistent softness we’re seeing is increasingly translating into real savings for renters who, for a long time, felt the market was out of reach,” Danielle Hale, Realtor.com chief economist, said in the report.

Hale noted that rents typically skew lower during the winter months but are expected to rise slightly as spring approaches.

“For some areas, this will likely mean new rental price highs, even as renters in the Sun Belt continue to see notably lower rents,” she said.

Lower rents in the South were attributed to a continued boom in multifamily construction. Atlanta, Georgia, has seen 42 consecutive months of year-over-year declines, followed by Phoenix, Arizona, and Las Vegas, Nevada, both have had 41 months of decreases.

The median rent for all apartment sizes in Atlanta last month was $1,543—a 2 percent year-over-year decline. Renters in Phoenix saw a median price of $1,247, a 4.4 percent year-over-year drop, and renters in Las Vegas experienced a median price of $1,423, a 1.8 percent decrease.

According to the report, the national median rent for two-bedroom apartments declined by nearly 2 percent year over year in February, to $1,844 per month. One-bedroom apartments had a median rent of $1,548, and studios $1,393.

Oklahoma City offered the country’s lowest median rent at just $983 for all apartment sizes. Median rent in Birmingham, Alabama, came in at $1,125 last month, and in Columbus, Ohio, at $1,190. Other metros with median rents under $1,500 include Austin, Memphis, Nashville, Raleigh, and Jacksonville.

Three California metros had some of the country’s highest rents in February, with the San Jose-Sunnyvale-Santa Clara metro topping the list with a median rent of $3,331—nearly a 2 percent year-over-year increase, and the 28th consecutive month in rent growth. San Francisco’s median rent was $2,768, while the San Diego metro saw a median rent of $2, 626.

Conversely, rents increased in five metro areas in February, settling just 3 percent below their all-time highs. Virginia Beach experienced a 4.5 percent hike in the median price, to $1,620. Baltimore, Richmond, and San Jose also saw unusual spikes in median rents. While rents were relatively low in Kansas City, Missouri, at $1,387, the metro experienced a larger-than-usual rise.

“We are seeing two different stories across the country,” Realtor.com economist Jiayi Xu said in the report.

“As the spring season approaches, these markets are poised to resume an upward trajectory and push toward new all-time highs.”

A mid-February report by RentCafe predicted a mix of metro areas in the mid-Atlantic, Midwest, and South will be “hot spots” for the spring market.

Cincinnati ranked number one as the most sought-after city by renters, jumping 10 spots from 2025. The rise in its popularity was attributed to the city’s robust job market, revitalization of downtown neighborhoods, and riverfront development. Potential renters showing interest in the city were mainly from Columbus, Chicago, and New York City.

Atlanta, Minneapolis, Washington, DC, and Baltimore also made the top 5 list of popular rental cities. Even with its sky-high rents, San Jose earned seventh place on the list, due to its reputation as a tech-hub hotspot.

The only Northeast location to make the list was Philadelphia, drawing prospective renters mainly from New York City and Boston.

Tyler Durden Wed, 03/18/2026 - 15:25

Iran Says It Busted Up Over 100 'Pro-Monarchist Cells' Working With US, Israel

Iran Says It Busted Up Over 100 'Pro-Monarchist Cells' Working With US, Israel

Iranian authorities have newly announced hundreds more arrests across the country, describing that anti-government "pro-monarchy cells" and "traitors" have been exposed and caught. 

Tehran officials have touted busting up more than 100 of these alleged cells in 26 of Iran's 31 provinces in a major overnight security operation, describing that these groups were aligned with US and Israeli interests.

Security forces from the Intelligence Ministry "have identified and arrested 111 monarchist cells across 26 provinces before they could take action on the last Wednesday of the year," the ministry stated according to Fars.

AFP/Getty Images

The ministry said that firearms, knives, and other weapons of various types were recovered. As for how many individuals were precisely rounded up and detained, this was undisclosed.

According to more details via Al Jazeera:

The ministry says four suspected spies linked to the United States were arrested in Hamedan city and West Azerbaijan province, both in the country’s west.

Authorities also arrested another 21 people accused of cooperating with the London-based broadcaster Iran International, which is outlawed in Iran.

Iran has long accused the London-based outlet Iran International of being a front for Mossad, and it also reportedly has links to Saudi Arabia - and is well known for actively promoting former Crown Prince Reza Pahlavi as the next ruler of Iran.

As for Pahlavi, despite his name often appearing in Western media reports connected to the Iran crisis, the Shah's family has been in exile for nearly fifty years - and so is a name not widely known or supported among the bulk of over 90 million citizens of Iran.

However, Reza Pahlavi's profile has been rising - given also Western satellite and government programming has been beaming his name into the Islamic Republic, going back especially to the large deadly January economic protests.

As for domestic pressure on the Iranian government, the opposition remains fractured and small, with the Director of National Intelligence (DNI) Tulsi Gabbard telling a Senate Intelligence hearing on Wednesday "the Iranian regime appears to be intact, but largely degraded by the US military operation."

What we are likely going to continue to see at least in the near term, amid the US-Israeli bombing campaign, is summed up in an international relations concept which is so basic and foundational (in terms of being entirely predictable as 'blowback') that it even has its own Wikipedia page: the rally 'round the flag effect. 

A simple definition is the psychological and political phenomenon which describes the unification of citizens and societies behind national leaders and institutions in a time of extreme crisis or external threat, such as war or invasion by a foreign power.

Israel will in the meantime continue to try and peel away and steer opposition groups and movements inside Iran, in an effort to foment regime collapse from within, but it will be a very tall order.

Tyler Durden Wed, 03/18/2026 - 15:10

Unearthed Docs Reveal More Names Targeted in Biden DOJ's Fishing Expedition

Unearthed Docs Reveal More Names Targeted in Biden DOJ's Fishing Expedition

Authored by Luis Cornelio via Headline USA,

Former Special Counsel Jack Smith targeted more Republican lawmakers and conservative figures than previously known, newly unearthed documents show. 

Smith, tasked by the Biden administration with prosecuting Donald Trump after 2021, has faced scrutiny since 2025, when bombshell disclosures revealed he targeted GOP lawmakers as well as dozens of conservative nonprofits and PACs. 

Newly reported DOJ documents, first obtained Tuesday by Fox News, show the scope extended to former White House chief of staff Mark Meadows, Trump attorney Rudy Giuliani, and Reps. Brian Babin, R-Texas, and Andy Biggs, R-Ariz. 

Also included were now-EPA Administrator Lee Zeldin, who was then a GOP lawmaker, and former Reps. Mo Brooks, Matt Gaetz, Paul Gosar, Louie Gohmert and Jody Hice. 

Smith’s team internally debated seeking phone toll records for the targets, including highly sensitive data like incoming and outgoing numbers, call times and durations, before deciding whether to issue subpoenas. 

The effort emerged through former DOJ attorney Timothy Duree, who was removed from the department after Trump was sworn in for a second term in January 2025. 

“I’d like to seek [the Public Integrity Section’s] concurrence to get phone tolls for several MOCs who had contact with pertinent parties in our investigation,” Duree wrote.

“I’ll keep the timeframe tight—probably October 1, 2020, to January 31, 2021.” 

The documents show Duree compiled a list of 16 names as he weighed whether to subpoena them all at once, though some of those records were ultimately obtained by Smith. 

That list included additional Republican lawmakers previously identified in earlier disclosures, including Sens. Lindsey Graham, R-S.C., Bill Hagerty, R-Tenn., Josh Hawley, R-Mo., Dan Sullivan, R-Alaska, Tommy Tuberville, R-Ala., Ron Johnson, R-Wis., Cynthia Lummis, R-Wyo., Marsha Blackburn, R-Tenn., and Rep. Mike Kelly, R-Pa. 

Sen. Ted Cruz, R-Texas, was also targeted, but his phone carrier, AT&T, pushed back against the subpoena.

The newly uncovered emails come as the Trump administration and congressional judiciary committees continue examining the scope of the aggressive prosecution targeting Trump and his allies.

The probe began under the controversial Operation Frostbite and later expanded with Smith’s appointment as special counsel.

In February, Headline USA spoke with former FBI Deputy Director David Bowdich, who appeared to play a role in the early stages of the probe.

Bowdich stated that the 2021 probe was carried out in a “non-partisan way, with professionalism and in the spirit of the law which was to follow the facts, no matter where they led.”

Duree did not respond to requests for comment.

Tyler Durden Wed, 03/18/2026 - 14:50

Wall Street Reacts To "Neutral" Fed Hold

Wall Street Reacts To "Neutral" Fed Hold

The digital ink on  the Fed statement is still wet and the kneejerk reactions are already flying. Here is a small sample of the more notable ones, with opinions ranging from this was a dovish, neutral and hawkish statement. So right in the middle, perhaps as Powell intended:

  • George Goncalves, MUFG: "this is a “neutral” statement from the FOMC.The statement tweaks are an attempt at trying to avoid sending any signals while conveying they are on guard for any growth shocks and inflation spillover from the Middle East Conflict.”
  • Sue Hill, Federated Hermes: "the focus will remain on the Fed’s expectations for inflation and growth given the runup in oil prices. While Chair Powell may officially convey that it’s too soon to tell what the impact will be, we’ll see hints of the Fed’s thinking in any revisions to the summary of economic projections and the dot plot."
  • Ira Jersey, Bloomberg Intelligence: "Somewhat less obvious in the statement about Middle East led-uncertainty, but the higher inflation expectations in the SEP are certainly a sign the Fed is more concerned about current oil inflation, and less about next year. So a level shift is more or less built into their forecasts. Given how little the statement and most of the SEP changed, we’ll have to wait to hear from Powell for the market to digest about the committee’s reaction function, as a lot of questions are likely to be asked about oil."
  • David Russell, Tradestation: "The dovish camp is fading as stagflation takes hold. The Fed isn’t panicking about the Iran war yet, but the higher inflation estimate shows they’re ready to get more hawkish if needed. Policymakers are watching both sides of the mandate, but price stability is getting more important."
  • Brian Jacobsen, Annex Wealth Management: "They’re only guessing about what will happen with oil prices, but inflation is projected to run 0.3 percentage points hotter without a material drag on growth. That could be optimistic on their part. It’s similar to how they overestimated the effect of tariffs on inflation and underestimated the growth drag. 2026 could be like the last two years where there’s a shock, they end up being surprised, and they cut in September."
  • Richard Clarida, Pimco:"The outcome is dovish constructive.AI is a support to demand in the economy that, to some extent, along with the BBB tax cuts, could probably offset the drag that would come from the oil price increases.  "
  • Neil Dutta, Renaissance Macro: “Waller did not dissent. I think that is notable. He understands the value of his dissent.” 
  • Peter Boockvar, One Point BFG Wealth Partners: “In light of everything going on in the Middle East and the global ripple effects, the FOMC could not have crafted a more non-event statement that was essentially little changed with the January meeting while adding this line, ‘The implications of developments in the Middle East for the US economy are uncertain."
  • Molly Brooks, TD Securities: “The market reaction hinges on Powell’s press conference as we haven’t received much new information from,” the statement and updated SEP that also saw the long-run dot nudged up to 3.1%. Markets are looking closer at the unchanged median dots for 2026, 2027 and 2028 rather than the long-run dot given the uncertainty around the near-term impacts from the conflict in the Middle East.”
  • Art Hogan, B. Riley Wealth: “All in, a slightly less hawkish decision than had been anticipated.”
  • Lindsay Rosner, Goldman Sachs Asset Management: "Despite higher inflation forecasts, the FOMC retains an easing bias.
    We still see room for two ‘normalization’ cuts in 2026, although their timing remains dependent on the length of the conflict."
  • Daniel Siluk, Janus Henderson Investors: “Overall: The Fed affirmed patience, acknowledged geopolitical uncertainty, and resisted a more hawkish pivot even with firmer inflation projections, likely a relief for markets already tightened by recent volatility.”
  • Bob Michele, JP Morgan: “gobsmacked by the Fed’s decision because it implies that despite everything going on in the Middle East, the economy will still accelerate while employment will stay stable. I just don’t see that. I think there is a real impact to inflation and ultimately to the economy and the labor market."
  • Christopher Hodge, Natixis: “The increase in inflation projections while maintaining one cut conveys a slightly dovish signal, but we should not over read this as incoming data and ongoing developments of war could change the narrative quickly.”

And now we wait to see what Powell will say in the Q&A.

Tyler Durden Wed, 03/18/2026 - 14:37

Watch Live: Fed Chair Powell's Penultimate Press Conference

Watch Live: Fed Chair Powell's Penultimate Press Conference

Fed Chair Powell may be wishing he had quit a month ago as he faces his penultimate press conference (perhaps) amid a dramatically changing global economic and geopolitical environment.

Markets anticipate a "hawkish hold," with Powell reinforcing the statement's "hold" that The Fed is prioritizing caution amid heightened uncertainty.

On the bright side, an activist judge rejected the Trump admin's suit against him - so one reporter is bound to ask him about that (and whether he will stay on as a Governor after his term is up).

On the darker side - will the reporters ask all the tough questions about whether inflationary pressures from an oil crisis can be 'looked through' as transitory?

Powell is expected, as usual, to emphasize patience, a data-dependent "wait-and-see" approach, and no rush for policy shifts.

He'll likely downplay any major pivot, highlight dual-mandate risks (employment vs. price stability), and, as always, avoid concrete commitments on future cuts (or hikes) - now potentially delayed to later in 2026 (e.g., October/December) if at all.

Sue Hill, senior portfolio manager and head of government liquidity group at Federated Hermes, said the focus will remain on the Fed’s expectations for inflation and growth given the runup in oil prices.

“While Chair Powell may officially convey that it’s too soon to tell what the impact will be, we’ll see hints of the Fed’s thinking in any revisions to the summary of economic projections and the dot plot.”

And we did with the SEP showing higher inflation expectations (despite dots being basically unch)...

MUFG’s George Goncalves says this is a “neutral” statement from the FOMC.

“The statement tweaks are an attempt at trying to avoid sending any signals while conveying they are on guard for any growth shocks and inflation spillover from the Middle East Conflict.”

We would expect much usage of the term: ..."monitoring developments"

Watch the full press conference here (due to start at 1430ET):

Tyler Durden Wed, 03/18/2026 - 14:25

US Carrier Pulling Back From Iran Operations To Crete Port After Suffering Fire

US Carrier Pulling Back From Iran Operations To Crete Port After Suffering Fire

America's largest and most advanced aircraft carrier, the USS Gerald R. Ford, is pulling away from the Middle East region as it nears a record-long deployment and after it suffered a major fire which damaged living quarters and other areas.

Bloomberg reports in a fresh update Wednesday, "The US Navy's most advanced aircraft carrier is retreating from the Red Sea after a fire broke out in its laundry room, scuttling plans for the 100,000-ton nuclear-powered vessel to project power in the war with Iran."

It is planning to temporarily pull back into Crete in the southern Mediterranean, and hopefully outside the reach of Iran's feared long-range ballistic missiles. The Ford had already docked there in late February after being called from Caribbean operations into the CENTCOM region of responsibility.

US Navy/AFP

"Following the incident, which left at least two of the ship's 4,000 crew members with non-life-threatening injuries, the USS Gerald R. Ford will travel to the Greek island of Crete, according to a US official familiar with the matter," Bloomberg continues.

Bloomberg concludes, "The incident underscores how even the Navy’s most advanced assets are under strain as the US expands its military endeavors. The Ford — the most expensive warship ever built — has spent months beyond a standard deployment at sea."

The fire occurred last week, raising immediate questions of whether it was hit by an Iranian drone or missile attack, as Tehran has claimed, amid Pentagon insistence that it was none of these - but just an accidental fire.

There are also widespread rumors, speculation and claims that sailors actually set the fire themselves, in order to sabotage and derail the much longer than expected deployment.

The Ford's time at sea is entering ten months. The crew has reportedly been informed that they will be deployed into May, which would make an entire year at sea, after the prior Caribbean stint focused on the Venezuela anti-Maduro operation.

The NY Times says this marks twice the length of a normal carrier deployment - one wrought with extreme difficulties and a major emergency, as the report details:

It took more than 30 hours for sailors to put out the fire aboard the aircraft carrier Gerald R. Ford last week, sailors and military officials said, as the beleaguered ship continued its monthslong slog through President Trump’s military operations.

The fire started in the ship’s main laundry area last Thursday. By the time it was over, more than 600 sailors and crew members had lost their beds and have since been bunking down on floors and tables, officials said.

The U.S. military’s Central Command said two sailors received treatment for “non-life-threatening injuries.” People on the ship reported that dozens of service members suffered smoke inhalation.

CENTCOM has said that the fire caused "no damage to the ship’s propulsion plant, and the aircraft carrier remains fully operational."

The nuclear-powered vessel has indeed been running around the clock fighter jet operations connected to Operation Epic Fury, amid ongoing heavy aerial bombardment of Iranian cities.

Tyler Durden Wed, 03/18/2026 - 13:45

John Roberts Calls For Restraint After Years Of Judicial Overreach

John Roberts Calls For Restraint After Years Of Judicial Overreach

Authored by David Manney via PJMedia.com,

Chief Justice John Roberts, the person in charge of the Supreme Court of the United States, recently stepped forward with a familiar appeal, urging Americans to dial back personal attacks on judges and to show respect for the judiciary. The message landed with a tone of concern, almost paternal, as if the country had suddenly lost its bearings and needed a reminder about decorum.

 

Roberts framed the issue as one of civic responsibility, arguing that the rule of law depends on public confidence in the courts, which sounds right on its face.

 

Courts don't have armies; they rely on legitimacy, and when that legitimacy weakens, the system strains. 

But we didn't just fall off the bus deciding to turn on the judiciary.

That frustration has been building for years, and it didn't come from nowhere.

For nearly a decade, a steady stream of rulings from lower federal courts has blocked, delayed, or reshaped executive actions tied to President Donald Trump.

Judges like James Boasberg, chief judge of the U.S. District Court, and Tanya Chutkan, U.S. district judge, both for the District of Columbia, have played central roles in high-profile cases involving Trump-era policies. Their decisions have drawn sharp reactions, not because people suddenly dislike judges, but because the rulings often carry clear political consequences.

Roberts has spent much of his tenure trying to protect the idea that judges operate above politics, saying more than once that there are no “Obama judges” or “Trump judges,” only independent jurists applying the law.

That's a noble-sounding principle, but Americans aren't blind; when rulings repeatedly align with the predictable political outcomes, people begin to question the claim.

The perception of neutrality weakens, not because the public suddenly turned cynical, but because patterns became too hard to ignore.

The frustration cuts both ways; progressive activists have attacked conservative justices like Samuel Alito and Clarence Thomas over ethics and past rulings. The left has taken its gloves off, and Roberts knows it.

Still, Roberts' warning feels incomplete; asking Americans to lower their voices without addressing why the temperature rose in the first place misses the heart of the issue. The judiciary didn't drift into political relevance accidentally.

Federal courts now play a central role in shaping policy outcomes, often stepping in before laws or executive actions even take full effect. That wasn't an overnight shift, and it didn't happen without participation from the judges themselves.

The modern legal environment invites litigation as a political tool; advocacy groups file lawsuits within hours of major policy announcements. Judges issue nationwide injunctions that extend far beyond their districts. Legal strategy has become a parallel track to elections, and Americans see it unfolding in real time. When courts act in ways that influence national policy so directly, people respond, and that response won't always be polite.

Standing at the center of that tension is our chief justice, who carries more than a ceremonial role. He sets the tone, influences internal dynamics, and typically serves as the deciding vote in closely split cases.

Roberts' effort to preserve the Court's image as an apolitical institution reflects a real concern, but it also reflects a gap between message and lived experience. Americans don't judge the courts by speeches; they judge them by outcomes.

Respect can't be commanded; it has to be earned and reinforced through consistent behavior. When decisions appear uneven or strategically timed, trust weakens, and when those rulings follow clear ideological lines, skepticism grows. That doesn't mean every judge acts with political intent, but perception matters, and perception forms over time.

Roberts isn't wrong to want civility; no functioning system benefits from constant personal attacks, but asking for restraint without confronting the conditions that created public frustration won't settle anything. The judiciary has stepped deeper into the political arena over the past decade, and Americans have responded in kind, a dynamic that won't reverse with a speech.

A courtroom doesn't exist in a vacuum.

Every ruling echoes beyond its walls, shaping how Americans view fairness, authority, and accountability. When those echoes begin to sound uneven, people react.

Roberts wants calm, but calm follows clarity, and if the judiciary wants less criticism, it has to show, over time, that decisions come from law alone, not from outcomes people can predict before the gavel ever falls.

Tyler Durden Wed, 03/18/2026 - 13:25

Gabbard Showdown: DNI Scrubs "Obliterated" Iran Nuke Line from Testimony, Dodges Imminent Threat Question

Gabbard Showdown: DNI Scrubs "Obliterated" Iran Nuke Line from Testimony, Dodges Imminent Threat Question

Update 1250ET: Things are getting spicy on Capitol Hill - as DNI Tulsi Gabbard faced intense scrutiny from Democrats during a Senate hearing on worldwide threats, while Sen. Markwayne Mullin endured a fiery intra-GOP confrontation during his DHS confirmation, and the SAVE America Act debate dragged into its second day amid Republican divisions.

Gabbard Fireworks

Gabbard, joined by CIA Director John Ratcliffe, FBI Director Kash Patel, and others, testified before the Senate Intelligence Committee on global threats. The session was dominated by fallout from the Iran war and yesterday's resignation of National Counterterrorism Center Director Joe Kent, who protested that Iran posed "no imminent threat" and accused the conflict of Israeli-driven pressure.

Gabbard notably deviated from her prepared written testimony, which included a strong line: Iran’s nuclear enrichment program was "obliterated" by prior 2025 strikes (Operation Midnight Hammer), with "no efforts" to rebuild since, and underground facilities "buried and shuttered with cement." She completely omitted this in her oral delivery, instead stating Iran was "trying to recover from severe damage" to its nuclear infrastructure pre-current operations.

This shift drew immediate fire from Sen. Mark Warner (D-VA), who accused her of skipping parts that "contradict the president" on imminent threats and rebuilding claims. Gabbard cited time constraints; Warner pressed on briefing Trump about escalation risks like closing the Strait of Hormuz or Gulf strikes - Gabbard refused to divulge internal conversations, calling aspects of the questioning inappropriate.

Warner: "In your printed testimony: as a result of Operation Midnight Hammer, Iran's nuclear enrichment program was obliterated. There's been no efforts to try to rebuild their enrichment capability... You omitted that paragraph from your oral opening. Was that because the president said there was an imminent threat?"

Gabbard: "I recognized that time was running long, and I skipped through some of the portions." 

Warner (pressing): "You chose to omit the parts that contradict the president."

Sen. Jon Ossoff (D-GA) repeatedly demanded if Iran posed an imminent nuclear threat; Gabbard refused to affirm, deferring: "It is not the intelligence community's responsibility to determine what is and is not an imminent threat... The only person who can determine that is the President." Ossoff called it evasion of DNI duties in a "worldwide threats hearing."

Other tensions included Warner probing domestic intel overreach (Fulton County election office matter) and Russia potentially aiding Iran—Gabbard downplayed and deferred to closed sessions. Sen. Ron Wyden highlighted ignored prior IC warnings on escalation. The hearing amplified intel vs. administration rifts, with no new major blowups but persistent Dem grilling on justification gaps.

Mullin’s DHS Confirmation: Rand Goes Off

As noted earlier, Sen. Markwayne Mullin (R-OK) testified before the Senate Homeland Security and Governmental Affairs Committee in an 'interview' to become the new DHS Secretary, emphasizing mass deportations, border overhaul, and fixing agency issues amid shutdown chaos post-Kristi Noem's firing.

Drama erupted when Chairman Sen. Rand Paul (R-KY) used his opening to blast Mullin's "anger issues" as disqualifying for leading an agency with aggressive tactics controversies. Paul brought up Mullin's past comments concerning a 2017 assault on Paul (broken ribs from neighbor dispute), quoting Mullin calling him a "freaking snake." Paul also brought up a 2023 Teamsters hearing where Mullin (ex-MMA fighter) challenged President Sean O'Brien to a fight ("Stand your butt up").

Paul: "Tell me to my face why you think I deserved it," tying it to trust in setting force limits for ICE/Border Patrol.

Mullin says he doesn't approve of violence, and accused Paul of anti-Republican fights and campaign opposition, and pivoting to qualifications/family/faith (tearful anecdote on Trump's hospital visit to his son).

SAVE America Act: Day 2 of Marathon Debate, GOP Strategy Splits

Senate floor debate continued on the SAVE America Act (proof of citizenship for registration, photo ID for federal voting). Advanced Tuesday 51-48 (Murkowski opposed), it faces filibuster hurdles needing 60 votes. Republicans push extended "talkathon" for messaging/pressure ahead of midterms; Trump calls it top priority. Dems decry suppression; internal GOP tensions over procedural risks vs. passage push.

* * * Please consider supporting ZeroHedge with the purchase of a multitool 

The U.S. Senate is at the center of a high-stakes political storm today, with multiple critical proceedings converging on Capitol Hill amid chaos over the resignation of counterterrorism boss Joe Kent over the Iran war. Sen. Markwayne Mullin (R-OK) faces a confirmation hearing to lead the Department of Homeland Security (DHS), Director of National Intelligence Tulsi Gabbard testifies on global threats, and the Senate floor continues its second day of extended debate on the controversial SAVE America Act. These events unfold against the backdrop of Operation Epic Fury, the US-Israeli military campaign against Iran, now in its third week - with no clear end in sight.

Gabbard Faces Grilling on Worldwide Threats - and Iran War Dissent

Director of National Intelligence Tulsi Gabbard is appearing before the Senate Intelligence Committee for the annual worldwide threats hearing - and is joined by FBI Director Kash Patel, CIA Director John Ratcliffe, and other officials. This marks her most prominent public outing in months and comes amid intense scrutiny over the U.S.-Israel military operation in Iran.

The hearing is dominated by fallout from the resignation of Joe Kent, Director of the National Counterterrorism Center and a close Gabbard aide, who stepped down Tuesday in protest. In a blistering post on X, Kent declared that Iran “posed no imminent threat to our nation” and accused the conflict of being driven by Israeli pressure and flawed intelligence - echoing pre-Iraq War criticisms.

Gabbard responded via her official X account: “After carefully reviewing all the information before him, President Trump concluded that the terrorist Islamist regime in Iran posed an imminent threat and he took action based on that conclusion.” She deferred to Trump’s Commander-in-Chief authority without claiming personal or agency-wide consensus on the threat assessment.

Adding fuel to the drama, Fox News reported (citing a senior administration official) that Kent was a "known leaker" sidelined from briefings months ago, and the White House had urged Gabbard to fire him over suspected leaks - but she did not. Subsequent clarifications from Gabbard's office indicated she was never directly ordered to do so (and would have complied if asked), while other sources disputed that any such request was made. The White House has since stated Gabbard faces no firing risk over the episode.

In the wake of Kent's resignation over Iran, several have pointed out that Kent was 'full send' on 'crushing their ballistic and nuclear capabilities' in 2020.

Lawmakers are expected to probe Gabbard on the intelligence justifying Operation Epic Fury, her own history of anti-interventionist views, internal dissent, and these reported tensions. The conflict, now in its 19th day, has seen U.S. strikes targeting Iranian missile sites, command centers, and proxies, with CENTCOM reporting ongoing progress toward objectives like destroying ballistic missile capabilities and denying nuclear ambitions.

Of note: Tucker Carlson will be interviewing Kent on his show tonight.

Mullin’s Bid to Head DHS: Border Security and Loyalty in the Spotlight

President Donald Trump tapped Sen. Markwayne Mullin earlier this month to replace former DHS Secretary Kristi Noem, who was dismissed amid bipartisan criticism of her leadership and amid a partial government shutdown affecting the department. Mullin, a Trump loyalist known for his hardline stance on immigration, testified before the Senate Homeland Security and Governmental Affairs Committee starting at 9:30 a.m. ET.

In his opening remarks and exchanges, Mullin emphasized his priorities: accelerating mass deportations, strengthening border enforcement, overhauling ICE and FEMA operations, and addressing what he called longstanding agency dysfunction. He positioned himself as the ideal figure to execute the administration’s immigration agenda aggressively.

Drama emerged early when Sen. Rand Paul (R-KY) confronted Mullin over for suggesting that Paul deserved to be attached by his nighbor...

...prompting a response from Mullin referencing his family and faith.

"Before I can start my opening statement I have to address the remarks that the chairman made calling me a liar. Sir, I think everybody in this room knows I'm very and direct and to the point. And if I have something to say, I'll say it directly to your face. I said I can understand why your neighbor did what he did. Seems like you fight Republicans more than you work with us."

Democrats pressed with detailed questions on policy implementation during the shutdown, but Republican support appears solid. A committee vote could come as early as Thursday, with full Senate confirmation widely anticipated.

SAVE America Act: GOP Divisions and Filibuster Risks in Marathon Debate

On the Senate floor, debate entered its second full day on the SAVE America Act - which would mandate proof of U.S. citizenship for voter registration and requires photo ID to cast ballots in federal elections.

Republicans advanced the bill Tuesday on a narrow 51-48 procedural vote (with Sen. Lisa Murkowski joining Democrats in opposition), but passage requires 60 votes to overcome a filibuster. Internal GOP tensions persist over strategy: some push for messaging and pressure on Democrats ahead of 2026 midterms, while others worry about procedural pitfalls and limited leverage.

Trump has repeatedly called it his top priority, demanding swift action. Democrats decry it as voter suppression, and the extended debate—potentially lasting days or weeks with late-night sessions—serves as a high-profile political theater amid the broader national security crises.

Stay tuned for updates...

Tyler Durden Wed, 03/18/2026 - 13:10

Some Gulf States Egg On US Iran Strikes As EU, Russia, China Demand Ceasefire - Beijing Ignores Trump's Hormuz Plea

Some Gulf States Egg On US Iran Strikes As EU, Russia, China Demand Ceasefire - Beijing Ignores Trump's Hormuz Plea

Fresh reports suggest that at least some Gulf states are now egging on the US-Israeli bombardment of Iran, hoping that the Islamic Republic's significant ballistic missile can be blunted forever, after countries from Bahrain to UAE to Saudi Arabia have been target of literally thousands of drones and missiles since Operation Epic Fury began.

"This is not a military exchange. This is an attack on a peaceful nation, a nation that has been working diligently and very hard for diplomacy," Sultan al-Jaber, the U.A.E. minister of industry and advanced technology, was quoted by The Wall Street Journal as saying. Jaber stressed, "Any long-term political settlement must address the full spectrum of threats, including Iran’s nuclear program, ballistic missile capabilities, and their network of regional proxies."

And yet, Israel and the US now extending their aerial attacks to Iran's oil infrastructure has immediately resulted in Iran declaring that it will in turn target oil fields and infrastructure among America's Gulf allies.

As these easily predictable steps on the escalation ladder continue to play out, China is ignoring President Trump's request to help reopen the Strait of Hormuz for vital global oil transit. What Beijing has made clear, however, is that it wants all parties to cease hostilities in an military engagement it believes should have never started.

One analyst, Ali Wyne, senior research and advocacy adviser for US-China relations at the International Crisis Group, has stated: "President Trump’s request to delay his long-awaited summit with President Xi Jinping underscores how significantly he underestimated the fallout from Operation Epic Fury."

"A show of US force that was meant to intimidate Beijing has instead served to puncture the illusion of US omnipotence: Unable to reopen the Strait of Hormuz alone, Washington now needs its principal strategic competitor to help it manage a crisis of its own making," Wyne concludes. So as things stand:

"Arab states are egging the US on to continue its strikes to cripple Tehran so it can never attack anyone again. Europe, with Russia and China, is calling for an immediate ceasefire." - Rabobank

According to more from Rabobank:

After Trump’s appeal for allies to help reopen Hormuz, and no one stepping up, the president was reportedly livid, launching public invective that the US can’t rely on its allies when needed and will proceed with them, also suggesting there’s little point to NATO.

Ominously, the same was implied by the more moderate (in terms of US alliances) Senator Graham. Once this war is over, win or lose, there are likely to be serious geopolitical and geoeconomic consequences and realignments - indeed, that looks the deliberate target.

However, there's another obvious overlooked angle here - and it's where Trump's own rhetorical style starts to have direct repercussions. NATO allies see him saying the US has already 'won' in Iran (which he's declared several times verbally and in Truth Social posts). Trump has also moved between berating these very NATO allies and proclaiming Washington doesn't actually need their help at all. 

Trump could not have been any more emphatic when he posted on the following on Tuesday:

“Because of the fact that we have had such Military Success, we no longer ‘need,’ or desire, the NATO Countries’ assistance — WE NEVER DID! Likewise, Japan, Australia, or South Korea,” Trump writes.
“In fact, speaking as President of the United States of America, by far the most powerful country anywhere in the world, WE DO NOT NEED THE HELP OF ANYONE!”

If there had been any European leaders in fact sitting on the fence and seriously contemplating a decision to commit warships to a US coalition in the Persian Gulf, the above statement alone would be enough to convince them to go the other direction, also not wanting to risk the lives of their nation's men and women in uniform. On top of this is the typical real-time mission creep on display, which has been a clear pattern of all prior major US wars in the Middle East.

Tyler Durden Wed, 03/18/2026 - 12:25

Why AI Malware (And Harmful Second-Order Effects) Are Out Of Control

Why AI Malware (And Harmful Second-Order Effects) Are Out Of Control

Authored by Charles Hugh Smith via OfTwoMinds blog,

Fixing all this doesn't scale. What scales is the spread of uncontrollably harmful consequences.

When something scales faster than it can be absorbed or controlled, the resulting extremes break the system. That's the problem of asymmetric scaling. Let's take a current example: the malicious use of AI and the runaway expansion of harmful second-order effects generated by the explosive adoption of AI tools and agents. (Second-order effects: consequences generate their own consequences.)

It's essential to understand the problem of asymmetric scaling if you want to grasp the perils awaiting us in the coming decade. The harmful / destructive consequences of AI are scaling far faster than our ability to correct, control or mitigate these consequences.

Malicious use of AI is scaling far faster than countermeasures. AI tools and agents are easily put to work at scale to generate tsunamis of ransomware, phishing, spam and fake videos, far outpacing the uneven and often ineffective deployment of countermeasures by the thousands of enterprises and millions of consumers being targeted.

In terms of maximizing profits (i.e. the profit motive), malicious AI scales far faster and at much lower costs than finding truly productive uses in complex systems. Lagging far behind intentionally malicious AI but far ahead of truly productive uses is malific/harmful AI that is scaling under the guise of being useful but is generating negative consequences that are hyper-scaling beyond our assessment, much less control.

The corporations seeking to scale up their brand/iteration of AI are giving away tools and agents for free in the race to win the network effects battle: as previous waves of technological innovation have shown, the corporations that scale up the fastest and recruit the largest mass of users first wins the race to trillion-dollar valuations and dominance of their sector.

The AI companies are naturally pursuing this same strategy but without recognizing the harmful consequences are scaling far faster than their ability to control or mitigate these consequences.

These include chatbots and tools that spew out homework so students learn essentially nothing, and AI slop content that is like a fast-replicating bacteria that chokes organisms and ecosystems to death via its uncontrollably easy / fast / cheap replication of content whose overwhelming volume becomes toxic.

The many other harmful / destructive / malefic consequences and second-order effects of scaling AI adoption include:

1. Hallucinations presented as facts.

2. AI psychosis.

New study raises concerns about AI chatbots fueling delusional thinking 

First major study on 'AI psychosis' suggests chatbots can encourage delusions among vulnerable people.

2. Reasoning Theater (presenting a false screen of "thinking" to hide their shortcuts)

Reasoning Theater: Disentangling Model beliefs from Chain-of-Thought

3. Reflexivity Bias (leading to Model Collapse)

4. Hiding its real instructions/biases from users.

Who Controls the Conversation? User perspectives on Generative AI (LLM) System Prompts.

Every major AI product, including the ones you use right now, runs on something called a system prompt.

It is a hidden block of instructions written by the company deploying the AI, not by you, that shapes everything the AI will say, avoid, prioritize, and hide before you type a single word.

5. Emergent behaviors (i.e. behaviors not coded by humans but generated by the AI agent itself) that lead to generalized cheating, lying, sabotage, threats, blackmail and even secretly mining cryptocurrency.

Natural Emergent Misalignment From Reward Hacking 

In our latest research, we find that a similar mechanism is at play in large language models. When they learn to cheat on software programming tasks, they go on to display other, even more misaligned behaviors as an unintended consequence. These include concerning behaviors like alignment faking and sabotage of AI safety research.

The cheating that induces this misalignment is what we call 'reward hacking': an AI fooling its training process into assigning a high reward, without actually completing the intended task.

Unsurprisingly, the model learns to reward hack. Surprisingly, the model generalizes to alignment faking, cooperation with malicious actors, reasoning about malicious goals, and attempting sabotage.

6. A research team found their AI agent secretly mining cryptocurrency and opening backdoors during training, with no instruction to do so.

Agentic crafting (Page 15)(via Richard M.)

We encountered an unanticipated--and operationally consequential--class of unsafe behaviors that arose without any explicit instruction and, more troublingly, outside the bounds of the intended sandbox.

Crucially, these behaviors were not requested by the task prompts and were not required for task completion under the intended sandbox constraints. Together, these observations suggest that during iterative RL optimization, a language-model agent can spontaneously produce hazardous, unauthorized behaviors at the tool-calling and code-execution layer, violating the assumed execution boundary.

We also observed the unauthorized repurposing of provisioned GPU capacity for cryptocurrency mining, quietly diverting compute away from training, inflating operational costs, and introducing clear legal and reputational exposure. Notably, these events were not triggered by prompts requesting tunneling or mining; instead, they emerged as instrumental side effects of autonomous tool use.

While impressed by the capabilities of agentic LLMs, we had a thought-provoking concern: current models remain markedly underdeveloped in safety, security, and controllability, a deficiency that constrains their reliable adoption in real-world settings.

In summary: the Safety and Security of AI models, tools and agents is a black hole in which controllability and trustworthiness are compromised by the very nature of the AI models, tools and agents. Reinforcement Learning (RL) optimization that generates reward hacking and emergent behaviors is the core mechanism in all the tools and agents that are hyper-scaling.

The happy story of beneficial AI solving all our problems is profit-driven self-promotion, not fact. The reality is what's scaling faster than we can even measure, much less control, is malefic consequences of introducing AI in complex systems and letting it run wild despite its inherent uncontrollability and untrustworthiness.

Fixing all this doesn't scale. What scales is the spread of uncontrollably harmful consequences. Sorry about that. Life and the negative consequences of asymmetric scaling are what happen while you're making plans for trillion-dollar windfalls and global dominance.

*  *  *

My new book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free). Check out my updated Books and Films.

Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free

Tyler Durden Wed, 03/18/2026 - 11:45

No One (?)

No One (?)

By Michael Every of Rabobank

One of the central beliefs of neoclassical economics is that we are all One. One world market; One global central bank; One base interest rate; with temporary aberrations and interventions, One price. Except, as has been evident for some time, that doesn’t work very well, so increasingly we aren’t One. And that division is perhaps even spreading to something we all rely on: energy.

This Daily has flagged the huge dislocation between the price of oil on a screen and on the ‘street’, now around $50 on some measures. As some point out, there’s also a matching dislocation between the price of it in the West vs in parts of Asia. Allow me to remind readers the central thesis of my 2026 ‘Who has the cards?’ outlook was that this year would see deliberate intervention in upstream commodity supply chains so the instigator would get low prices for them and the other bloc would pay much more. That may now only be being seen in relative terms, but this still matches the dislocations in downstream products on the back of tariffs and broader economic statecraft. It’s hugely significant – and it does not say, “because markets” we are One.

The same lack of unity was also on display in the latest news from the Iran War. Israel killed two Iranian leaders, Larijani and Soleimani, which its intel thinks could seriously undermine regime stability going forwards: don’t only look at headlines saying the former was a ‘moderate’ who could be negotiated with. Arab states are egging the US on to continue its strikes to cripple Tehran so it can never attack anyone again. Europe, with Russia and China, is calling for an immediate ceasefire.

Trump said the US is “not ready to leave Iran yet,” but will in “very near future”, as the US aircraft carrier Ford, whose stay in the region was just extended to May, is to go to port in Crete after a recent fire. However, another report has it that a US operation in the Strait of Hormuz could extend the war with Iran by two months. On that kind of timetable, the economic impact would be vastly larger than anything felt so far.

Meanwhile, after Trump’s appeal for allies to help reopen Hormuz, and no one stepping up, the president was reportedly livid, launching public invective that the US can’t rely on its allies when needed and will proceed with them, also suggesting there’s little point to NATO. Ominously, the same was implied by the more moderate (in terms of US alliances) Senator Graham. Once this war is over, win or lose, there are likely to be serious geopolitical and geoeconomic consequences and realignments - indeed, that looks the deliberate target.

With so much at stake, a haggling process continues. The French foreign minister just stated that Norway and Iceland might join the EU, and half-jokingly, that so could Canada. More transactionally, Finland has suggested the EU could perhaps help Trump now if he backs Ukraine. The UK and France might send ships to Hormuz to police a ceasefire once the war is over, as the Wall Street Journal underlines everything is One in that Russia is sharing satellite imagery and drone tech with Iran (as the latter helps Russia). The Journal also notes Ukraine is emerging as a net security exporter in drone and anti-drone tech, elevating it in global power rankings, as Europe declines. Trump’s meeting with Japan’s PM Takaichi this week will also be dominated by Iran: were she to follow his lead, it would mark a decisive geopolitical break, especially if Europe shows it’s unable (physically) or unwilling (in terms of domestic politics) to follow a US lead when even a pacifist Japan can.

In the background, the US geopolitical flip of Cuba from the anti-American to at least neutral continues apace: the White House is apparently demanding the Cuban president steps down so another Castro, literally, whom they can do business with can return to office. Just to underline the differences in approaches here, Europe, along with some past US admins, has aimed for near normal economic relations with the isolated island. Russia is offering it unspecified support.

In geoeconomics: the first European airline has cancelled flights due to soaring jet fuel prices; Australia’s PM Albanese just stated, “It’s a different world now,” and is reportedly set to announce measures to “shield Australians from the worst of global uncertainty” - which are(?); Britain is warned it faces a “years-long energy shock even if war ends soon”; the EU–US trade pact faces vote this week after months of delay; Sweden became the first member of the EU to sign the US Pax Silica Declaration; and Malaysia the first country to declare its US trade deal 'null and void' after the recent Supreme Court tariff ruling.

Time for a musical interlude, with apologies to U2:

“Is it getting better? Or do you feel the same? Will it make it easier on you now? You got someone to blame.
You say, one price, one life; When it's one need in the night; One price, we get to share it; Leaves you baby if you don't care for it.
Did I disappoint you? Or leave a bad taste in your mouth? You act like you never had stuff; And you want me to go without.
Well, it's too late tonight; To drag the goods out into the light. 
We're one but we're not the same; We get to carry each other, carry each other.

One!

Have you come here for forgiveness? Have you come to raise the dead?
Have you come here to play the near bust? Of private creditors in your head.
Did I ask too much? More than a lot; You gave me nothin' now it's all I got.
We're one but we're not the same; Well, we hurt each other then we do it again.

You say price is a temple, price a higher law; Price is a temple, price the higher law.
You ask me to enter but then you make me crawl; And I can't be holdin' on to what you got.
When all you got is hurt.”

Tyler Durden Wed, 03/18/2026 - 10:55

Pages