ZeroHedge News

Navy's Top Officer Admits Ford Carrier Fire Halted Its Combat Sorties For Two Days

Tyler Durden — Sat, 04 Apr 2026 11:35:00 +0000

Navy's Top Officer Admits Ford Carrier Fire Halted Its Combat Sorties For Two Days

More details continue to belatedly come out in piecemeal fashion related to the Navy's largest and most expensive supercarrier, the USS Gerald R Ford. It has withdrawn from the Iran theatre of operations and Mideast regional waters, now anchored in Croatia (Split) for largescale emergency repairs, after a March 12 fire which the Pentagon has said was non-combat related left some sailors with minor injuries.

New information has been disclosed by no less than the US Navy's top officer. He has described in fresh remarks that the USS Ford was unable to fly sorties for two days due to (the alleged) laundry fire, which took over a full day to extinguish.

US Navy/AFP/Getty Images

CNN has underscored that this marks the "first indication that the blaze hindered combat operations against Iran." So the incident has been confirmed to have resulted in a complete halt to two days of combat operations against Iran - which is hugely significant given that only two carriers were launching operations at that time (the other was the USS Lincoln). And now the USS George HW Bush is en route across the Atlantic in a scheduled deployment.

Chief of Naval Operations Adm. Daryl Caudle, addressed the Washington-based think tank the Center for Strategic and International Studies (CSIS) on Tuesday. While praising the crew's response to the fire, he stated the following:

"They fought that, put it out, and started flying sorties two days after that, so I’m very proud of that crew," he said.

Caudle described that they ended up battling the blaze - and cleaned up the water damage and fire-fighting substances, for a total of 30 hours.

He also confirmed prior reports of some 600 sailors being displaced from their sleeping quarters due to the damage.

As for the precise cause of the blaze, the last official word was a March 28 statement from 6th Fleet saying, "military and federal civilian law enforcement continued investigations into a fire aboard the ship originating in the ship’s laundry facilities."

This comes amid an avalanche of speculation that the Ford might have been hit by an Iranian missile or drone - but this remains just theorizing and speculation.

It's problems run deeper, Bloomberg writes...

The USS Gerald R. Ford aircraft carrier arrived at a port in Crete on Monday after it had to leave the Middle East — and the war against Iran — when a fire broke out in its laundry area. But the massive ship’s problems run a lot deeper. https://t.co/B9odzYd9UY
— Bloomberg (@business) March 24, 2026

Adm. Caudle did make another important admission in his Tuesday remarks. He said: "The challenge … is how do you buy down risk in other parts of the world while you're focusing a lot of resources in one area." Already major US military assets have been diverted from southeast Asia, where China's pressure campaign on Taiwan continues, toward the Middle East in relation to Operation Epic Fury.

Tyler Durden Sat, 04/04/2026 - 07:35

What Might Transatlantic Security Look Like If The US Leaves NATO?

Tyler Durden — Sat, 04 Apr 2026 11:00:00 +0000

What Might Transatlantic Security Look Like If The US Leaves NATO?

Authored by Andrew Korybko,

If NATO as a whole remains more or less intact upon the US’ hypothetical exit, and the US then reaches bilateral security deals with Poland, the Baltic States, and Turkiye, then not much would change from Russia’s perspective.

Trump’s latest talk about the US leaving NATO is being taken seriously by many Europeans owing to his rage over their refusal to help him reopen the Strait of Hormuz, not to mention them denying the US access to its own bases on their territory and even their airspace for use in the Third Gulf War.

It’s possible that this is just a bluff, however, to usher in the radical reforms that he envisages and which were described here in connection with a prior report about his supposed “pay to play” plans.

Nevertheless, it’s also possible that he’s indeed serious and that the US will ultimately end up leaving NATO, in which case it’s useful to analyze the future of transatlantic security.

For starters, the headquarters of both EUCOM and AFRICOM are in Germany, and it would be very difficult and inconvenient to relocate them.

Therefore, the US might reach a bilateral security deal with Germany in this scenario, which could set the basis for other such deals with other NATO members.

Such arrangements would likely include terms that are advantageous to the US such as its allies committing 5% of their GDP to defense like has already been demanded of them as well as giving a preference to American companies for military-technical procurement.

The US might also demand that its troops be granted immunity for any crimes that they might commit while based in their allied nation.

Trump could seek to enshrine trade privileges for the US into any security deal too knowing him.

The only countries that would likely agree to such terms are those whose leaders either sincerely fear Russia or manipulate the public on this pretext, thus Poland and the Baltic States for sure, but Finland and Romania can’t be ruled out either.

They and the other NATO members would still enjoy Article 5 assurances amongst themselves, but it’s also possible that larger members like France, Germany, Italy, and/or the UK might follow the US’ lead in making demands of the smaller ones for ensuring this.

In that event, the European security system could fundamentally change, but concerns about Russia exploiting the optics of infighting (even if only for soft power purposes and not by initiating hostilities against post-US NATO) could deter the aforementioned larger members from doing this.

If NATO as a whole remains more or less intact upon the US’ hypothetical exit, and the US then reaches bilateral security deals with Poland and the Baltic States, then not much would change from Russia’s perspective.

The same goes for if the US reaches such a deal with Turkiye, which enjoys pragmatic ties with Russia unlike Poland and the Baltic States but is poised to take the lead in expanding Western influence along its southern periphery through the “Trump Route for International Peace and Prosperity”.

If the US remains committed to Turkiye’s defense, any potential clash with Russia could risk World War III. If no such deal is reached, however, then Russia might be more proactive in pushing back against Turkish influence there.

All in all, transatlantic security isn’t expected to change much if the US leaves NATO so long as it retains Article 5-like obligations to several of the bloc’s key members, namely Poland, the Baltic States, and Turkiye.

If it doesn’t, then Russia might consider preventive military action against post-US NATO to eliminate security threats emanating from it, but it could be deterred by nuclear-armed France and/or the UK reaffirming their Article 5 obligations to the bloc’s members.

Nothing would really change then.

Tyler Durden Sat, 04/04/2026 - 07:00

Has Concern Over Hormuz Made Us Forget The Red Sea?

Tyler Durden — Sat, 04 Apr 2026 03:00:00 +0000

Has Concern Over Hormuz Made Us Forget The Red Sea?

Authored by Gregory Copley via The Epoch Times,

Wartime concerns about the security of maritime energy traffic through the Strait of Hormuz—connecting the Indian Ocean/Gulf of Oman with the Persian Gulf—have overshadowed the fact that the related issue of Red Sea security is far from resolved and is, in fact, becoming more dynamic.

The Red Sea–Suez link between the Mediterranean and the Indian Ocean is of equal strategic importance to global trade as the Hormuz choke point and is, through geography and common players, intrinsically linked with the Persian Gulf conflict.

But it is Ethiopia’s civil war, brewing with different factions and with varying intensity since the coup against Emperor Haile Selassie I in 1974, which is again moving in ways that could prove decisive.

Always, in the background, is the reality that Ethiopia could revive its historical influence over the Red Sea–Suez sea line of communication (SLOC).

Inside Ethiopia, the conflicts that have been raging since 1974 between different governments and different factions are at a new level.

The four different Fano opposition militia groups, representing different areas of the Amhara heartland, have been fighting against the central government of Prime Minister Abiy Ahmed Ali for several years. In early 2026, they came together with a united manifesto of their intentions. This has revived the momentum of the threat to Abiy’s Prosperity Party government.

A statement issued by a united Fano on Jan. 17, 2026 (Tir 9, 2018, in the Ethiopian calendar) noted:

“So that the Amhara struggle may become one, the leaders of the Amhara Fano National Force and the Amhara Fano People’s Organization, through a historic decision that demanded courage, open-heartedness, decisiveness, and trust in the people, have been able to make Fano unity a reality. ... We have designated one leader, one organization.”

Significantly, the leadership of the united Fano all titled themselves as “Arbegna,” a nod to the Arbegnoch, the Patriots, who, under the banner of Emperor Haile Selassie I, fought against the Italian invaders of Ethiopia from 1935 to 1941. This led to the ouster of the Italians at the Battle of Gondar, in late November 1941, the first major Allied victory of World War II, in the ouster of an Axis power (Italy) from territory it had seized.

Today, the result of the four separate Amhara Fano groups fighting against the Abiy government over the past several years was the creation—finally—of the Amhara Fano National Movement (AFNM) as an umbrella for all civil and military operations. AFNM, however, described itself as working on behalf of all Ethiopians desirous of the restoration of the multi-ethnic empire. (Ethiopia is home to some 80 ethnic and linguistic groups.)

Prime Minister Abiy, half-Amhara and half-Oromo, has consistently identified with Oromo causes and first fought against a Tigrean-dominated government of Ethiopia, and then against the Tigrean People’s Liberation Front (TPLF) militia, which was forced into a ceasefire—essentially a military surrender by the TPLF—in November 2022.

Abiy’s Prosperity Party government has increasingly been rejected by his original Oromo militant supporters, who regard him as “insufficiently Oromo” in outlook, and the government’s writ—or its area of focus—now rarely extends beyond the capital, Addis Ababa. The exception for Abiy’s travels is to some major projects such as the Grand Ethiopian Renaissance Dam in the Benishangul-Gumuz Region of western Ethiopia. The dam has been the subject of some hostility from Egypt, which sees its existence as infringing on Egypt’s “right” to control the waters of the Blue Nile, even though they originate in Lake Tana in the Amhara Highlands of Ethiopia, outside Egypt’s territories.

The AFNM designated its first chairman as Arbegna Zemene Kasse, and its military commander as Brigadier General Tefera Mamo.

Meanwhile, Abiy’s government has become increasingly dependent on support from the governments of the United Arab Emirates, Saudi Arabia, and, to an extent, Turkey and the PRC, each of which has a strong interest in dominating the Red Sea–Suez sea line of communication.

To a key extent, Abiy has focused on modernizing the capital, Addis Ababa—which now resembles a Dubai skyline—but has less control over the broader hinterland of Ethiopia.

At the same time, the government of Egypt is working to support various Ethiopian regional independence groups to destabilize Ethiopian control of the Blue Nile waters, which Egypt claims are critical to its national security and economic well-being. Egypt has maintained an on-and-off war approach to Ethiopia since the late 19th century and lost several major military confrontations with Ethiopia during the late 19th century. All of the supporting nations, as far as Abiy is concerned, also have interests that are inimical to Ethiopia’s revival of Red Sea influence.

It is important to note that Abiy has consistently ensured there is very little foreign news reporting from Ethiopia, which has had the positive benefit for the government that the civil wars, and the massive loss of life, have not been widely known around the world.

On the other hand, it has also prevented international investor and tourism interest in the country.

Now, Turkey, in particular, is vying for control of the region. It now actively controls the Somalian government and uses Somalian coastal territory for its military testing of ballistic missiles, among other things. It was particularly hostile to Israel’s diplomatic recognition of independent Somaliland, on the Red Sea coastline, in late December 2025.

Internally, in Ethiopia, the AFNM has been speaking—in its initial unity document—about representing the interests of all Ethiopian ethnicities and regions, not just the Amhara people and regions. It has been gathering significant military momentum, with additions to its ranks coming from defecting government forces. It did not, however, mention the restoration of Ethiopia’s last constitution from the pre-coup era, given that this was the last democratic reference point for the country.

All subsequent “constitutions” have been designed in the divide-and-conquer mode to keep ethnic groups separate and competitive, keeping various Ethiopian peoples as second-class citizens.

But what the AFNM has failed to do is to address meaningful international support or define the future shape of Ethiopia if it were to attain power. There has been no public discussion of its proposed economic or strategic policies. Only the adoption of the name of the Patriots—the Arbegnoch—gives any indication of its reflection of traditional Ethiopian values or historical Ethiopian geopolitical aspirations, which would include a reunification with Eritrea and the reacquisition of Ethiopia’s traditional Red Sea coastline.

It is significant, however, that Eritrea has been supporting the AFNM groups with arms and other support, and some Tigrean elements from the now-split TPLF have also supported Fano groups.

The AFNM operates freely in Amhara areas close to Addis Ababa and could certainly challenge Abiy’s forces in the capital. The other factor is the reporting that Abiy himself may be closer to the end of his leadership than the start of it. Change may not be imminent, but Abiy is becoming somewhat embattled.

But no wonder the world is oblivious to the wars of the Horn of Africa: The prime minister has consistently kept foreign journalists out of the country.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

* * *

Tyler Durden Fri, 04/03/2026 - 23:00

America Dependent On Chinese Electrical Parts For AI Build-Out

Tyler Durden — Sat, 04 Apr 2026 02:15:00 +0000

America Dependent On Chinese Electrical Parts For AI Build-Out

The race for U.S. leadership in AI is hitting a tangible wall made of steel, copper, and imported circuit breakers. Trillions in planned spending on data centers are running up against chronic shortages of transformers, switchgear, and batteries, the unglamorous gear that actually delivers power to the racks.

AI Takeover Complete: Data Center Construction Surpasses Office Construction For The First Time https://t.co/g5WxE9glY3
— zerohedge (@zerohedge) February 27, 2026

Domestic production has not scaled anywhere near fast enough, leaving developers with little choice but to lean on overseas suppliers, predominantly from China. The result is lengthening lead times that threaten to push back or cancel projects already baked into corporate budgets and national strategy.

Bloomberg reports electrical equipment, though a small slice of total project costs, is the component that can bring everything to a halt. Their leading example is the massive facility under construction in Abilene, TX, expected to draw as much as 1.2 gigawatts once it serves OpenAI.

For comparison, that's more energy than a Westinghouse AP1000 reactor can provide...

We previously pointed out exactly this vulnerability back in August 2025 when Wood Mackenzie sounded the alarm on transformer shortages. The consultancy projected demand would exceed supply by 30 percent that year alone, with U.S. manufacturers able to cover only a fraction of needs and roughly 80 percent of units imported. We warned then that the AI boom was colliding with a grid already buckling under failed green policies and surging electricity loads, a dynamic that has only intensified since.

In January, we highlighted America’s aging power infrastructure, showing how data-center demand is now a measurable slice of national consumption and exposing decades of underinvestment that no amount of policy rhetoric can paper over.

The current administration is doing what they can to try and ensure costs are not passed on to household consumers, with the recent agreement made between the White House and some of the biggest hyperscalers. But with news from Constellation that no matter how hard new energy generation is pushed onto the grid, long connection queues will destroy any possibility of the national grid finding balance.

Tyler Durden Fri, 04/03/2026 - 22:15

Forget Minnesota - The Amount Of Fraud Uncovered In California Is Staggering

Tyler Durden — Sat, 04 Apr 2026 01:30:00 +0000

Forget Minnesota - The Amount Of Fraud Uncovered In California Is Staggering

Authored by Christopher F. Rufo, Ryan Thrope, Kenneth Schrupp & Haley Strack via City Journal,

California is a cash machine. The state collects some of the country’s highest income, business, and fuel taxes, and now spends more than $300 billion per year. And yet, everywhere you look, California seems to be falling apart.

The roads are crumbling. Mismanaged wildfires have turned neighborhoods into ash. Drug addiction and homelessness have metastasized, turning parts of Los Angeles and San Francisco into no-go zones. And the cost-of-living crisis is pricing middle-class taxpayers out of basic necessities like groceries and gas, even as the state spends billions on welfare programs that never seem to lift anyone out of poverty.

Californians are beginning to ask: Where is all this money going? On paper, it funds hospitals, universities, schools, prisons, infrastructure, and other public services. But beneath the surface, something else is happening that California Governor Gavin Newsom does not want you to see: massive, systematic, brazen fraud.

We conducted interviews with public officials, fraud experts, and political figures, and reviewed hundreds of pages of government reports, state audits, criminal indictments, and other public records on California fraud. From unemployment insurance and Medicaid to failed homeless initiatives and welfare programs, seemingly every state program has been compromised by criminals. The best estimates suggest that, on the governor’s watch, fraudsters, scammers, and organized crime rings have stolen at least $180 billion from taxpayers.

Welcome to Gavin Newsom’s empire of fraud.

Fourteen months after Newsom began his first term as governor of California, the Covid-19 pandemic swept the world. Roughly 2.7 million Californians eventually lost their jobs. The state’s economy went into freefall as its leaders imposed some of the country’s most restrictive public-health measures. In response to the crisis, Newsom sought to dump pallets of cash across the state—as quickly as possible.

One way to inject money was through California’s massive unemployment insurance program (UI). Unemployment insurance is administered by the state’s Employment Development Department (EDD), which can process billions of dollars in payments monthly. Before the state turned on the cash machine, however, experts had warned that the system was ripe for fraud.

Haywood Talcove, one of America’s leading fraud specialists and CEO of LexisNexis Risk Solutions for Government, was one such expert. “I was begging [federal officials] not to let the money go out like that, because it was going to be the biggest fraud in the history of our country,” he said. “Obviously, I wasn’t successful.”

For many reasons, California was particularly susceptible to the large-scale fraud schemes Haywood Talcove saw on the horizon. Not only did the state have some of the most generous welfare programs in the country; its bureaucrats had also failed to implement some basic fraud controls during Newsom’s tenure.

“They literally suspended all of the rules for the [unemployment insurance] program,” Talcove said. “[That made] it possible for anyone to get that benefit even if they weren’t entitled to it. It was very intentional. They knew what they were doing. But it caught up to them because it just got so out of control.”

The scams began almost immediately, with criminals from around the world reportedly siphoning cash from the program. In one case, a Romanian-led fraud ring orchestrated a $5 million unemployment-insurance scheme. Members allegedly “recruited potential [EDD-benefit] applicants through Facebook” and met them at “parks throughout Southern California to complete the application process,” according to the U.S. Attorney’s Office for the Southern District of California. “Applicants paid . . . a partial fee up front for assisting with fraudulent applications and another fee after applicants received EDD payments,” the office said. Many of the fraudsters wired the stolen funds to Romania.

Around September 2020, Fontrell Antonio Baines, a rapper from Memphis known as Nuke Bizzle, released a music video on YouTube entitled “EDD.” In the song, Baines bragged about ripping off California’s UI program. “Go to the bank with a stack of these,” Baines rapped, holding up EDD envelopes. Another rapper can be heard saying: “You gotta sell cocaine, I just file a claim.” All told, Baines obtained more than $700,000 in stolen funds using preloaded EDD debit cards. He pleaded guilty to federal charges.

Nor were these isolated incidents. A member of the SFV Peckerwoods, a California-based neo-Nazi gang, allegedly ran an unemployment scam during the pandemic. So did Michael Thompson, a one-time leader of the Aryan Brotherhood, who was eventually convicted. California’s prison population apparently got in on the action, too: the EDD allegedly paid out hundreds of millions of dollars in fraudulent claims in prisoners’ names, including those of at least 133 inmates on death row.

Remarkably, EDD not only failed regularly to cross-reference its unemployment payouts with a list of state prisoners, but it also had just two bureaucrats assigned manually to inspect reports of suspected fraud. State officials eventually admitted to having paid out approximately $20 billion in fraudulent claims during the pandemic, and to making an estimated $55 billion in improper payments. Talcove claims those figures don’t even tell the full story. “The state lost $32.6 billion dollars of taxpayer money to fraudulent applications,” he said. “In California, at one point, you had more people applying for unemployment insurance benefits than you had people over the age of 18.”

While Newsom has conceded that “bad actors” took advantage of the UI program, he has also defended his government’s record, saying they took swift action as soon as the alleged prison scheme surfaced. The EDD, for its part, has a webpage documenting its anti-fraud efforts. But any suggestion that California has fraud under wraps is contradicted by findings from its non-partisan state auditor.

Last December, the auditor reported that EDD’s UI program—which remains on the auditor’s “High Risk” list—had a fraud rate of 7.6 percent in 2023 and 7.9 percent in 2024. Applied to the state’s UI spending, those figures suggest more than $1 billion in stolen taxpayer funds since the pandemic. “EDD continues to have high rates of improper UI payments, including fraudulent payments,” the auditor wrote. “These inadequacies have resulted in a substantial risk of serious detriment to the State and its residents.”

While many states dealt with UI scams during the pandemic, California stands in a class of its own. At best, the EDD’s performance amounted to mass government incompetence; at worst, it reflects total indifference to fraud.

“This happens in every single state,” Talcove concluded, “but it happens a lot more in California.”

Newsom came to power vowing to pursue “guaranteed health care” for Californians. Under his leadership, the state extended Medi-Cal coverage to illegal aliens, covered sex-change surgeries for Medi-Cal enrollees, and offered “gender-affirming care services” to enrollees of “all ages.”

Total budgeted Medi-Cal spending—which includes federal, state, and local contributions—has more than doubled on the governor’s watch, rising from $93.5 billion the year before he took office to $196.7 billion in the current annual budget. During the same period, California’s resident population declined by 0.2 percent.

Experts have long warned of Medi-Cal’s vulnerabilities to fraud. The state auditor first designated “Medi-Cal Eligibility” as a “high-risk” issue in 2007 and has applied that label to it ever since. But the state government has made little progress in addressing what the auditor calls “eligibility discrepancies” that present a “substantial risk of serious financial detriment to the State.” California’s attorney general has conceded that “Medi-Cal fraud could reach billions of dollars annually.”

Newsom may have inherited a bad situation, but his actions have made it worse. During the Biden administration, California received federal approval to “increase, and eventually eliminate, asset limits” for some Medi-Cal recipients, a change that, according to Talcove, resulted in flood of improper payments. In addition, Medi-Cal suspended prior authorization requirements for certain health-care services and medications, creating yet another vulnerability for fraudsters to exploit.

In some cases, prosecutors say, that is precisely what happened. In one instance, Paul Richard Randall, Kyrollos Mekail, and Patricia Anderson allegedly “took advantage” of Medi-Cal’s loosened restrictions as part of a scheme that defrauded taxpayers of more than $178 million. The conspirators allegedly used a business called Monte Vista Pharmacy to process fraudulent prescriptions; Randall and others allegedly laundered the proceeds through third parties to fund kickbacks to Anderson and obscure the operation from law enforcement, according to a 2025 Department of Justice press release. Mekail had pleaded guilty to criminal charges in August 2024, and Randall is reportedly expected to do the same this year.

In-Home Supportive Services, a Medi-Cal sub-program, has also presented major fraud concerns. In 2009, former Governor Arnold Schwarzenegger estimated that IHSS fraud could be as high as 25 percent. That same year, a Sacramento grand jury report on the county’s IHSS program claimed IHSS fraud was “reported to be rampant and out-of-control.”

Yet, even in light of these worries, Newsom has dramatically increased funding for IHSS. Between Newsom’s first budget and his most recent proposal, the state legislative analyst estimates that total IHSS costs will have swollen by around 170 percent, with $33.4 billion proposed for the next fiscal year, including $12.5 billion from the state. According to recent estimates, taxpayers are funding nearly 800,000 IHSS providers, who offer caregiving, cooking, shopping, cleaning, and laundry services to elderly and disabled people. In about 70 percent of cases, providers and recipients are family members. According to co-author Schrupp’s reporting, the IHSS program is responsible for 41 percent of all “job gains” during the Newsom administration.

The IHSS program almost seems designed to facilitate scams. According to sworn testimony summarized in the Sacramento report, IHSS participants have falsely represented recipients’ needs; misrepresented hours worked timecards; and even secured payment after a recipient has died. The system operates largely on trust, with providers “working” in the privacy of the recipient’s home. The state’s IHSS protocols explicitly prohibit random unannounced home visits, which would be the best tool to uncover any potential rackets.

Oversight of the IHSS program is woefully inadequate. A 2021 Riverside County audit of the local IHSS program, for example, found county social workers had failed to process and report “integrity referrals” in a “timely” fashion. When complaints did reach county regulators, many, apparently, were reviewed by people with financial ties to IHSS. The report found that 41 of the 68 county staff at the Department of Public Social Services, which the auditor claimed is responsible for program oversight, were also IHSS providers—that is, they had a vested interest in protecting the system.

Beginning in 2024, federal officials announced multiple prosecutions for IHSS fraud. In one case, prosecutors alleged that Cindy Lynn Fromm claimed to have provided services for more than a year while the recipient was incarcerated. In others, prosecutors said that IHSS caregivers falsified timesheets and claimed to have provided services while beneficiaries were in hospitals, care homes, other facilities—or dead.

Experts who have studied the Medicaid system say that it has long been rife with fraud. Malcolm Sparrow, a Harvard professor who has advised the federal government on health-care fraud, suggested to Congress that “fraud and abuse” might represent somewhere between 10 percent and 20 percent of Medicaid spending. (Sparrow noted difficulties in attempting to calculate accurate “loss rates,” due to the fact that government studies “have been sadly lacking in rigor” and have “produced comfortingly low and quite misleading estimates.”) Brian Blase, president of the nonpartisan Paragon Health Institute, estimates a current Medicaid fraud rate of “15 to 20 percent of the entire program.”

Talcove estimates that the Medicaid fraud rate in California is 20 percent, which he calls a “very conservative” figure. Federal officials, however, believe that the current Medi-Cal fraud rate is even higher—and, given the state’s oversight failures and massive Medi-Cal expansion under Newsom, they are almost certainly right. Multiple high-ranking sources at the U.S. Department of Health and Human Services, which is currently probing fraud in California, told City Journal on the condition of anonymity that their initial estimate for Medi-Cal’s fraud rate since 2019 is 25 percent.

Based on state experts’ best guesses of annual Medi-Cal expenditures and applying a conservative, 15 percent fraud rate to each fiscal year since 2019, Medi-Cal has lost some $146 billion in taxpayer funds to fraud on Gavin Newsom’s watch.

Meantime, in Sacramento, state legislators have begun sounding the alarm. In February, Leticia Castillo, a Republican in the California State Assembly, proposed a bill that would create a Medi-Cal “fraud assessment task force” to “review current fraud prevention tools” and “evaluate how best practices from the federal government and other states could be applied in California.”

To date, Newsom has not supported the bill publicly.

The other major target for fraudsters is California’s expansive welfare state. As governor, Newsom has sought to project an image of a compassionate California that cares for its most vulnerable residents. The state is famously home to enormous wealth, but also to millions living in poverty, and, as of 2024, to more than 180,000 homeless people.

Responding to these realities, Newsom has unleashed a wave of spending on welfare initiatives. He has overseen much of a $24 billion state spend on homelessness projects, roughly doubled food-stamp benefits during the pandemic, and has maintained high levels of cash assistance. Just like unemployment insurance and Medi-Cal, though, these welfare programs proved easy targets for swindlers. The homelessness spending, for example, was a massive transfer of funds into a complicated web of non-profits and other contractors, with apparently little oversight. Unsurprisingly, fraud cases followed.

Cody Holmes served as chief financial officer of Shangri-La Industries, a Los Angeles–based affordable-housing developer. His company reportedly received nearly $26 million from the state to develop properties under a program aimed at housing the homeless. Prosecutors reportedly allege that Holmes, who pleaded not guilty, embezzled roughly $2.2 million to pay for “exotic cars” and monthly rent for a “6,500-square-foot mansion.” A City Journal review of political donations revealed Holmes was a frequent contributor to Democratic politicians and causes in California.

In a separate case, Steven Taylor was charged for having allegedly used “fake bank statements and false cash representations” to secure loans to fund his real-estate business. Taylor then allegedly used those illegitimately obtained loans to purchase an $11.2 million home, which he sold for $27.3 million to a publicly funded homeless-housing developer.

Earlier this year, Alexander Soofer, who served as the CEO of Abundant Blessings, a Los Angeles-based homelessness charity, was charged for having allegedly pocketed at least $10 million in homelessness funding to bankroll a “luxury lifestyle that included lavish vacations and designer clothes.”

None of these cases should come as a surprise. A 2024 report from the Inspector General Office for the United States Department of Housing and Urban Development found that California’s housing agency was not “adequately prepared to prevent, detect, and respond to fraud due to the lack of focus it placed on fraud risks and establishing a robust fraud risk management framework.” In addition, a 2024 report from California’s state auditor highlighted the government’s limited data on homelessness programs. For three of the five initiatives the auditor examined, it was “unable to fully assess” their success because of a lack of outcome data.

For many California watchers, the 2024 audit came years too late. In 2020, Representative Kevin Kiley, then serving in the California State Assembly, requested a similar report, he told City Journal, but state legislative Democrats rejected the proposal after Newsom intervened. “I brought the proposal to the state’s joint legislative audit committee, and it fell one vote short of approval after the administration came and testified against doing the audit,” Kiley said. “They likely knew what the audit would show and didn’t want taxpayers to get that window into how their money is, quite frankly, being squandered.”

Officials have also raised concerns about fraud in California’s SNAP benefits, officially known as CalFresh and more commonly called food stamps. As of last year, the state auditor had designated CalFresh as a “high risk” program. Annual state spending on food stamps has risen from roughly $8 billion in 2015 to nearly $16 billion under Newsom.

That expansion coincided with several fraud cases. In 2023, 15 people associated with a Romanian criminal ring were arrested for allegedly stealing CalFresh and other welfare funding, at least one of whom later pleaded guilty. The following year, seven people were charged for allegedly making “fraudulent cash withdrawals” as part of a multi-hundred-thousand-dollar theft of welfare benefits. In March, more than 50 people were charged as part of “a yearslong crackdown on organized theft rings” that included “many with ties to Romania.” The defendants allegedly stole millions in public funds by exploiting California’s Electronic Benefit Transfer system, which distributes benefits for programs like CalFresh.

Notwithstanding this steady drumbeat of fraud cases, at least one California Democratic lawmaker is pushing to lower penalties for those who steal from state welfare programs. In April 2025, State Senator Lola Smallwood-Cuevas sponsored a bill that would raise the threshold for felony welfare fraud from $950 to $25,000. The measure would also make it more difficult to charge perjury based on misstatements to county welfare departments. Republican State Assemblyman Carl DeMaio has said that if the bill becomes law, it will effectively “legalize welfare fraud” in California.

Federal prosecutors, however, are stepping up enforcement. Last year, Bill Essayli, first assistant U.S. attorney for the Central District of California, announced the creation of a federal task force to combat fraud and corruption in the state’s homelessness programs. The task force has already brought charges in several multimillion-dollar homelessness-fraud cases—and Essayli has vowed that more are coming. “California has spent $24 billion in the last five years on homelessness, and no one can account for where that money has really gone,” Essayli said in January. Gavin Newsom, he added, is the “king of fraud.”

We reached out to Newsom’s office for comment on this story. A spokesperson, whose signature featured “she/her” pronouns, called Kiley’s claims “ridiculous,” accused the Trump administration of “mak[ing] up numbers,” and suggested, remarkably, that California had “no missing homelessness funds.”

The culture of fraud in California is so pervasive that it has allegedly reached the governor’s own office. Between 2022 and December 2024, Newsom’s chief of staff was Dana Williamson. In November 2025, she was charged with fraud for allegedly “siphoning campaign and COVID-19 recovery funds into her and an associate’s pockets.” Two other “well-connected aides in state politics were also charged” and struck plea deals that reportedly confirmed the scheme’s existence.

Newsom’s office said they were made aware of an investigation into Williamson in late 2024 and immediately moved to place her on leave. When she officially left the governor’s office a month later, though, Newsom’s send-off message applauded her “insight, tenacity, and big heart,” while making no mention of the investigation against her. And even with the charges against her, Williamson walked away from government with a $50,000 payout for unused vacation time.

Williamson, who has pleaded not guilty, is not the only state official to be charged with fraud during the Newsom administration. In January, Phyllis Hope Stitt, a former EDD employee responsible for determining UI claimant eligibility during the pandemic, pleaded guilty to defrauding the program of more than $750,000. That same month, former Madera County benefits eligibility worker Leticia Mariscal was charged for allegedly embezzling $40,000 in food stamp benefits.

The pattern that emerges in California is not one of isolated breakdowns in oversight but of a vast system that almost seems to invite fraud. From widespread failures in unemployment insurance to alleged schemes targeting Medi-Cal to mounting concerns over homelessness spending, each case points to significant lapses by state officials charged with stewarding public funds. According to California Assemblyman David Tangipa, “Sacramento is pervaded by a culture of corruption.” And he points the finger right to the top: Newsom, he says, has helped “create[] an environment where corruption thrives.”

Still, California’s fraud crisis is not a lost cause, nor is it beyond correction. On March 16, President Donald Trump signed an executive order creating the Task Force to Eliminate Fraud. The effort, led by Vice President J.D. Vance, will “coordinate government-wide efforts to combat widespread fraud, waste, and abuse in Federal benefit programs.” A fact sheet released by the White House highlighted California as a state where “insufficient safeguards and weak oversight increase the risk of large-scale fraud.”

The Minnesota fraud scandal, brought to national attention by City Journal, offers a revealing case study of what can happen when a seemingly hidden problem—one long in plain sight—finally comes into view. The extent of fraud in Minnesota had been an open secret for years. But once the scandal drew national attention, investigations snowballed, ultimately derailing the political career of Tim Walz. It may seem unlikely today, but a similar outcome is possible for Newsom in California.

Newsom is not untouchable, and the scale of fraud in California appears far larger than in Minnesota. Despite his claim to have taken “decisive action” against one form of fraud, the broader problem is real and ongoing, and taxpayers, in California and across the country, have reason to be furious. Newsom will no doubt rely on charisma and partisan appeal to downplay the extent of these abuses. But listen closely, and you can still hear the California cash machine, steadily dispensing untold billions to criminals, scammers, and organized crime rings—funds taken from taxpayers and diverted from those most in need.

Christopher F. Rufo is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and the author of America’s Cultural Revolution. Ryan Thorpe is a technical writer at the Manhattan Institute. Kenneth Schrupp and Haley Strack are investigative reporters at City Journal.

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Tyler Durden Fri, 04/03/2026 - 21:30

Colorado Forces Lawyers To Swear They Won't Help Feds Nab Illegals

Tyler Durden — Sat, 04 Apr 2026 00:45:00 +0000

Colorado Forces Lawyers To Swear They Won't Help Feds Nab Illegals

Lawyers in the Mile High State are now being strong-armed by Democrats into signing a radical anti-immigration-enforcement pledge just to do their jobs.

Starting March 30, 2026, every private attorney logging into Colorado’s official Courts E-Filing system (CCE) must certify - under penalty of perjury - that they will never use or share non-public personal information from court records to assist federal immigration authorities. Refuse? You’re shut out of the system entirely. No filing lawsuits, no checking case files, no representing clients in state court. Period.

The certification reads in part: “I certify under penalty of perjury that I will not use personal identifying information obtained from the database… for the purpose of investigating for, participating in, cooperating with, or assisting in federal immigration enforcement, including enforcement of civil immigration laws and 8 U.S.C. sec. 1325 or 1326, unless required by federal or state law or to comply with a court-issued subpoena, warrant, or order.”

Colorado is now requiring lawyers in the State, as a condition of logging into its court e-filing system, to promise not to cooperate with federal authorities in enforcing federal immigration law.

Please understand:
- I do not practice immigration law.
- I do not practice… pic.twitter.com/khYDf5TkQd
— Ian Speir (@IanSpeir) April 2, 2026

It’s not optional for immigration lawyers only. It hits every practicing attorney in Colorado - divorce attorneys, personal injury lawyers, estate planners, the works. Government employees get a free pass. Everyone else? Sign or sit on the sidelines.

The order comes straight from Senate Bill 25-276, the “Protect Civil Rights Immigration Status” act rammed through by Democrats and signed by Gov. Jared Polis on May 23, 2025. The bill expanded Colorado’s already aggressive sanctuary-style rules by slapping the Judicial Branch with the same restrictions as other state agencies - all in the name of blocking “federal civil immigration enforcement.”

The Colorado Judicial Branch openly admits the move is designed to keep state resources from helping ICE. On its official website, officials wrote: “This legislation seeks to prevent the use of state resources for federal civil immigration enforcement.” They even acknowledged the backlash, saying, “We recognize that some people may be frustrated by the requirements of this new legislation. However, the judiciary is required to comply with the laws as enacted by the legislature.”

Why isn’t this OBSTRUCTION of JUSTICE ⁉️ @TheJusticeDept https://t.co/BwJxmFwIJR
— Sidney Powell 🇺🇸 Attorney, Author, Gladiator (@SidneyPowell1) April 3, 2026

A brief version of the same popup appeared last September before being yanked for “further discussion.” Now it’s back for good.

Critics say the policy doesn’t just create a massive headache for lawyers trying to meet filing deadlines - it raises serious questions about compelled speech, access to the courts, and whether the state can force officers of the court to swear off cooperating with federal law on pain of professional paralysis.

I'll be damned. I practice law here in Colorado as well. Just logged in. Here's the text of their "announcement." This is indefensible. pic.twitter.com/XPPIFHLasT
— Matt Barber (@ThatMattBarber) April 2, 2026

Colorado has positioned itself as one of the nation’s most defiant sanctuary states, repeatedly slapping limits on local cooperation with ICE. The new certification is just the latest example of Democrats putting ideology over basic functionality of the justice system.

This is blatantly illegal. https://t.co/R5auplUKRy
— Sean Davis (@seanmdav) April 2, 2026

A federal judge this week tossed a Trump administration lawsuit challenging some of these same policies, ruling the feds can’t force states to play along. But for thousands of Colorado lawyers just trying to file a motion or check a docket, the message from the state is crystal clear: Help enforce immigration laws? Not on our watch — and not in our courts.

Tyler Durden Fri, 04/03/2026 - 20:45

Micro AI Sentry Guns May Be Next Layer Of Defense For Data Centers Against Kamikaze Drones

Tyler Durden — Sat, 04 Apr 2026 00:00:00 +0000

Micro AI Sentry Guns May Be Next Layer Of Defense For Data Centers Against Kamikaze Drones

Submitted by Cameron Rowe, Co-Founder and CEO of Sentradel,

Most people don’t think about what the “cloud” actually is. It’s a physical building full of servers storing everything from your medical records to your social media. Every Google search, every ChatGPT query, every hospital pulling up your health history routes through a data center. Right now, those buildings have about as much aerial protection as your local Costco.

In March 2026, Iranian Shahed drones struck three AWS data centers in the UAE and Bahrain. Multiple availability zones went down simultaneously, taking core services like EC2, S3, and Lambda offline, cascading outages to banks, payment platforms, and ride-hailing apps across the region. It was the first confirmed kinetic attack on a hyperscale data center run by a U.S. company. Shortly after, Iranian state media published a list of “Enemy Technology Infrastructure,” including Microsoft, Google, and Oracle facilities, painting targets on every major cloud provider in contested regions.

Yes, the cloud is distributed. Workloads can fail over. But data still lives somewhere physical, and partial corruption or destruction can be devastating in ways a temporary outage doesn’t capture. Medical records, financial transactions, and AI training datasets are worth hundreds of millions. When those are gone, they’re gone.

Global data center capex is approaching $1 trillion in 2026. The top four hyperscalers are collectively spending nearly $600 billion on infrastructure this year. That’s the physical backbone of modern life, sitting behind chain-link fences, with no ability to stop a drone costing between $30,000 and $80,000.

These facilities were never built to survive military threats. Security was designed around physical intrusion and cyberattacks, not one-way attack drones that cost a fraction of what they destroy.

Decentralization helps at the margins, but hundreds of billions of dollars poured into existing mega facilities can’t be shifted overnight. The real answer is layered detection and intercept: radar, RF sensors, EO/IR tracking, and kinetic or electronic defeat systems working together around these sites.

Autonomous counter-drone system

Watch: Autonomous counter-drone system

The military may eventually provide coverage for the most critical nodes, but they’ll prioritize their own assets first. And human life should come before server racks. That’s exactly why data centers need to be more proactive about protecting their own infrastructure rather than waiting for someone else to do it. Sentradel is already marketing counter-drone solutions to data center operators; it's likely to become more important over the next year as these kamikaze drones continue to improve rapidly in AI, speed, and payload.

* * *

Tyler Durden Fri, 04/03/2026 - 20:00

February Net Trailer Orders Down 43% As Bookings Fall 26%

Tyler Durden — Fri, 03 Apr 2026 23:20:00 +0000

February Net Trailer Orders Down 43% As Bookings Fall 26%

Preliminary February net trailer orders fell by about 10,000 units from January’s 23,300, a 43% month-over-month decline, according to TheTrucker.com.

“Sequentially, a drop in net orders was expected, as the industry transitions from the strongest to the weakest order months of the annual cycle,” said Jennifer McNealy, director CV market research & publications at ACT Research.

“Trailer makers now will begin to take fewer orders and start to work down the backlog that grew during the peak of order season at the end of the previous year, which in this year’s cycle started and ended later than usual, as fleet decision-making hesitance into late 2025 delayed the cycle a bit and caused a high-side surprise in January.”

The report notes that February bookings totaled 13,200 units—26% lower than February 2025. After seasonal adjustment, orders come to 12,300 units. Final figures will be released later this month, with preliminary estimates typically within ±5% accuracy.

“We now question when we will see 20k-plus-unit order intake months again, and how quickly trailer OEMs will build down the still-thin backlog, particularly given concerns about the level of activity in the key freight-generating economic sectors that drive transportation demand,” McNealy said.

Tyler Durden Fri, 04/03/2026 - 19:20

FBI Issues Public Alert On Americans Using Foreign Apps

Tyler Durden — Fri, 03 Apr 2026 22:40:00 +0000

FBI Issues Public Alert On Americans Using Foreign Apps

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

The FBI identified data security risks from foreign-developed mobile apps used in the United States, the agency warned in a March 31 public service announcement.

In this photo illustration, a hacker types on a computer keyboard on May 13, 2025. Oleksii Pydsosonnii/The Epoch Times

“As of early 2026, many of the most downloaded and top-grossing apps in the United States are developed and maintained by foreign companies, particularly those based in China,” the FBI said, without naming any apps.

“The apps that maintain digital infrastructure in China are subject to China’s extensive national security laws, enabling the Chinese government to potentially access mobile app users’ data.”

In the Google Play store, the most popular apps include short-form video platform TikTok, video editor CapCut, artificial intelligence video generator PixVerse, and communication app Telegram X. China-based ByteDance maintains ownership of TikTok and CapCut. PixVerse is owned by a Singaporean company, and the developer of Telegram X is based in the United Arab Emirates.

On Apple’s App Store, the top free apps include CapCut, TikTok, and Chinese shopping apps Temu and Shein.

In its alert, the FBI warned users to be aware of the types of data the foreign apps request access to when they are downloaded.

“When access is permitted by the user, the app can persistently collect data and users’ private information throughout the device, not just within the app or while the app is active,” the bureau said.

The privacy policy of an app, which can typically be accessed on the company website, reveals where the harvested data, including system prompts and personal info, are stored. Some of the apps store data in servers located in China. Some apps do not allow users to run them unless they consent to data sharing, the FBI said.

Certain apps offer options to invite friends or other contacts to use the apps. Once an app is downloaded, the default permissions may allow the developer to collect and store information about users’ names, email IDs, physical addresses, user IDs, and stored contacts’ phone numbers.

“Some apps may also contain malware that could collect data beyond what is authorized by the user. This could include malicious code and hard-to-remove malware designed to exploit known vulnerabilities in various operating systems and insert a backdoor for escalated privileges,” the agency said.

“Downloading apps from unfamiliar websites or third-party app stores runs a higher risk of embedding malware. Official apps stores scan for malicious content, lowering the risk of malware or malicious code on devices.”

The FBI advised people to disable unnecessary data sharing on apps, stick to downloading verified apps from official app stores, perform regular device software updates, and change passwords regularly.

U.S. authorities have taken action against Chinese apps that pose privacy risks to citizens.

In February, Texas Attorney General Ken Paxton filed a lawsuit against Shein, stating: “Not only is Shein harming consumers with toxic synthetic materials, but it’s also exposing Americans’ data to Communist China. This must come to an end.”

The same month, Paxton sued Temu over suspected ties to the Chinese Communist Party (CCP).

In 2025, President Donald Trump issued an executive order for the United States to acquire TikTok from Chinese parent company ByteDance. In January, a deal was finalized that set up a U.S. majority-owned joint venture to oversee TikTok’s American operations.

AI, VPN Risks

In 2025, Florida Chief Financial Officer Jimmy Patronis banned the Chinese artificial intelligence model DeepSeek from the state’s Department of Financial Services. New York and Texas also banned DeepSeek from state government devices and networks last year.

“Texas will not allow the Chinese Communist Party to infiltrate our state’s critical infrastructure through data-harvesting AI and social media apps,” Texas Gov. Greg Abbott said at the time. “Texas will continue to protect and defend our state from hostile foreign actors.”

In a June 2025 report, the Tech Transparency Project, a research initiative that seeks to hold big tech companies accountable, warned that Apple and Google app stores were allowing virtual private networks (VPNs) owned by Chinese companies on their platforms, thus presenting security risks.

“Chinese-owned VPNs raise serious privacy and security concerns for Americans because Chinese companies can be forced to share user data with the Chinese government under the country’s national security laws,” the report warned. “VPNs have access to particularly sensitive user data since they see all of a person’s web activity.”

Earlier this year, Republican lawmakers introduced the Securing Federal Devices from Chinese Applications Act to block apps controlled by the CCP from U.S. government devices, according to a Jan. 16 statement from the office of Rep. Jefferson Shreve (R-Ind.).

“If an app is controlled by the CCP, it does not belong on a U.S. government device,” Shreve said. “This bill shuts the door on CCP spyware and makes clear the federal government will not aid China’s surveillance state.”

Tyler Durden Fri, 04/03/2026 - 18:40

High Taxes, Power Bill Crisis Send Maryland Gov. Moore's Poll Numbers To Record Low

Tyler Durden — Fri, 03 Apr 2026 22:00:00 +0000

High Taxes, Power Bill Crisis Send Maryland Gov. Moore's Poll Numbers To Record Low

Left-wing Maryland Gov. Wes Moore’s approval rating has slid to a new record low as the Democrat darling, seen as Soros-friendly and as having aspirations to become the Democratic Party’s 2028 nominee, increasingly looks dimmer by the month.

Moore and Alex Soros.

Moore’s approval rating tumbled to 48% for the first time since he took office two years ago, as the Democratic Party is likely freaking out that even in one of the bluest states in America, ruled by the kings and queens of the progressive party in a one-party fashion, their rising star (now sinking star) is seeing mounting voter backlash as the state descends into multiple crises, from a fisical mess to power bills to crime and even a massive exodus of residents.

High taxes breaking the pocketbooks of working poor, horrible leadership, dishonesty, terrible fiscal management by the state, and the power bill crisis are the top reasons for the growing resentment captured in the new UMBC poll, which surveyed 804 Marylanders in mid-March, 731 of whom indicated they were registered voters.

In October 2024 and February 2025 polls, Moore's approval ratings stood around 52%. In another October 2024 poll, he had a rating of around 54%.

Last Thursday, Moore was greeted with a stadium full of boos at Camden Yards on Opening Day for Orioles baseball. At the time, we noted that this was one of the clearest indicators of growing backlash against a governor operating under the failed Democratic Party framework, which is sending the state into financial ruin, and risks creating an 'Illinois 2.0.'

Gov. Wes Moore was booed by the crowd ahead of the Orioles home opener on Thursday. https://t.co/KdJaF2jx68 pic.twitter.com/pA0p6G2z8m
— FOX Baltimore (@FOXBaltimore) March 26, 2026

"I am not surprised he was booed, given his poor job performance. He raised our taxes to record levels, blew through a $5 billion budget surplus, increased state spending to record levels, assaulted local control over zoning matters, and made our streets less safe by ending cooperation with ICE and allowing violent illegal immigrants to roam our streets," said Republican council candidate, State Delegate Nino Mangione.

He added, "Wes Moore is, without question, the worst governor in the history of Maryland. I am not surprised he was booed. The boos were well deserved."

Local outlet Fox Baltimore noted, "The governor’s approval numbers mark a double-digit decline in public polling since the first-term Democrat took office almost four years ago. Previous surveys show approval ratings in the mid-50s and low 60s."

Maryland is a one-party-ruled state of Democratic kings and queens, where Republicans are nonexistent in any sizeable political power, which has resulted in absolutely no balance and no accountability. The financial implosion in the state, sparking a mass exodus of residents and multiple other crises, is the direction Democrats have proudly chosen, driven by a failed woke framework under the governor.

Republican State Delegate Robin Grammer Jr. said, "Moore's approval rating is tanking because he is destroying Maryland's middle class, chasing retirees from our state and making the American Dream impossible for our youth."

We have spoken with the heads of local financial institutions and wealth advisors who have been strategizing with their high-net-worth clients about leaving the state since Moore took office. The decline of Maryland is a byproduct of one-party rule by the Democratic Party’s DEI leadership... but betting markets remain convinced...

...no matter how bad it gets?

* * *

Tyler Durden Fri, 04/03/2026 - 18:00

It's Past Time To Privatize The Post Office

Tyler Durden — Fri, 03 Apr 2026 21:20:00 +0000

It's Past Time To Privatize The Post Office

Submitted by QTR's Fringe Finance

A new piece from the Cato Institute lays out how bad things have gotten at the post office, arguing that the United States Postal Service is facing a severe and worsening financial crisis. According to the article, USPS has been losing billions of dollars annually for well over a decade and is now at a point where it cannot realistically fix its problems without major structural changes. I could have told you this after the horror show I lived through at the post office back in September of 2025.

The USPS now is the predictable outcome of trying to run a massive logistics operation through a government bureaucracy that moves slowly, resists change, and answers more to politics than to performance. The piece makes clear that USPS was built for a world that no longer exists, yet it continues operating as if nothing has changed because, as usual, government institutions are the last to notice reality.

The problems outlined are extensive and, frankly, not surprising. Mail volumes have collapsed as Americans switched to faster, cheaper digital alternatives, yet USPS continues to behave like it’s still 1995. What mail remains is increasingly dominated by low-value marketing material, while the agency struggles to compete in package delivery against companies that actually specialize in logistics.

Even Amazon, a company that started as an online bookstore (what could be less efficient to ship than godd*mn books — bricks?), has figured out how to build a better delivery network.

Meanwhile, visits to post offices have fallen off a cliff, but the system has barely shrunk its footprint. Labor costs remain enormous, productivity lags, and the workforce is structured in ways that prioritize stability over efficiency.

The result is exactly what you would expect when there is no real pressure to perform: bitchy apathetic staff, declining output, rising inefficiency, and billions in annual losses that just keep piling up. In the private sector, that kind of performance would trigger a full-scale overhaul or bankruptcy.

In government, it triggers a Congressional hearing and maybe a strongly worded memo, in addition to switching the Postmaster General and paying the new guy even more than the last guy got paid.

This is why privatization is not some radical idea but a logical response to a system that clearly is not working. A privatized USPS would finally be allowed to operate like a business instead of a political artifact. It could close unprofitable locations without needing a congressional debate, adjust delivery schedules based on actual demand, and invest in technology that improves service instead of maintaining outdated systems because “that’s how it’s always been done.”

Most importantly, it would have to make money (or at least stop losing it) which is a constraint that tends to focus the mind in ways government management never quite experiences. When survival depends on efficiency, organizations tend to discover it very quickly.

The contrast with private carriers like FedEx and UPS could not be clearer. These companies operate in a world where excuses don’t pay the bills. They optimize routes, invest in automation, analyze data, and constantly refine their operations because if they don’t, their competitors will. They have built systems that deliver packages faster, track them more precisely, and adapt to changing demand almost in real time. None of this happened because a committee approved it after years of debate. It happened because the profit motive demands results.

Meanwhile, USPS is stuck navigating layers of regulation and political oversight, where even obvious changes can take years to implement, if they happen at all.

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There is also the small matter of accountability. Private companies cannot run losses indefinitely and expect someone else to quietly cover the gap. They either fix the problem or they go under. USPS, on the other hand, operates with the understanding that there will always be some form of backstop, explicit or not. That safety net removes urgency and allows inefficiencies to persist far longer than they would anywhere else. It is the classic government model: spend more, deliver less, and call it a “challenge” instead of a failure. Privatization would replace that dynamic with one where performance actually matters, where bad decisions have consequences, and where efficiency is not optional.

Of course, defenders of the status quo often argue that privatization would undermine public service, but that assumes the current system is delivering high-quality service to begin with. Other countries have already shown that it is possible to maintain universal delivery while still operating under private or semi-private models. Targeted subsidies can ensure rural access without requiring the entire system to function inefficiently. The difference is that those systems are designed around outcomes, not inertia.

At some point, it becomes difficult to ignore the obvious. Government agencies are notoriously bad at adapting, innovating, or even cutting costs, because they are not structured to do any of those things well. The USPS is not an exception; it is a textbook example. Continuing down the current path means more losses, more inefficiency, and more attempts to patch over structural problems with temporary fixes. Privatization, by contrast, offers a way to align incentives with reality, bringing the postal system into the same competitive, performance-driven environment that has already transformed the rest of the logistics industry. And if that means admitting that the government is not particularly good at running a nationwide delivery business, that is less a controversial statement than an overdue acknowledgment of what the evidence has been showing for years.

QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. This post represents my opinions only. In addition, please understand I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have been hand selected by me, have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author, reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions. All positions can change immediately as soon as I publish this, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullshit my way through things easier.

The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.

Tyler Durden Fri, 04/03/2026 - 17:20

Tiger Woods Flexes Call With Trump Before DUI Arrest; Pardon Odds Remain Low

Tyler Durden — Fri, 03 Apr 2026 20:40:00 +0000

Tiger Woods Flexes Call With Trump Before DUI Arrest; Pardon Odds Remain Low

Bodycam footage shows Tiger Woods telling local authorities on Jupiter Island that he spoke with President Trump shortly after he flipped his Land Rover SUV and was arrested for DUI.

"You got it. Thank you, bye... I was just talking to the President," Woods told a local police officer seen in the bodycam footage. The officer was asking Woods to remain on the scene. Bodycam video was obtained by the New York Post.

Tiger Woods flexes his call with Trump to law enforcement after DUI:

"You got it. Thank you, bye... I was just talking to the President." pic.twitter.com/El9GDw6SWJ
— Headquarters (@HQNewsNow) April 3, 2026

Last Friday, Woods crashed his Land Rover into another vehicle, resulting in his $100,000-plus SUV turning onto its driver's side.

Unfortunately for Woods, he failed a on-scene sobriety test administered by police after what they say he showed "signs of impairment" and appeared "lethargic." Woods blew "triple-zeroes" on a breathalyzer but failed to submit a urine test.

Woods told officers he was "hoping to" play in the upcoming Masters Tournament, but in a statement posted on X on Tuesday, he told the golfing world that he would pause tournament play for the foreseeable future and "seek treatment."

"I know and understand the seriousness of the situation I find myself in today. I am stepping away for a period of time to seek treatment and focus on my health. This is necessary in order for me to prioritize my well-being and work toward lasting recovery," Woods stated (or perhaps his layer stated).

A new Polymarket bet, "Will Trump pardon Tiger Woods by June 30?" showed about a 6% chance as of Friday around lunchtime that the pro golfer would be pardoned by Trump.

Woods admitted he took "a few pills" before the crash. Officers also found hydrocodone pills at the crash scene.

This incident marks the second DUI in the Jupiter Island area over the last decade.

Will Trump pardon Tiger Woods? Polymarket is already taking bets...

Tyler Durden Fri, 04/03/2026 - 16:40

DOJ Is Done Releasing Epstein Files

Tyler Durden — Fri, 03 Apr 2026 20:00:00 +0000

DOJ Is Done Releasing Epstein Files

Authored by Steve Watson via modernity.news,

In a move sparking fresh skepticism among Americans demanding full accountability, the new acting Attorney General Todd Blanche has declared the Jeffrey Epstein files chapter closed. This came just hours after President Trump reassigned Pam Bondi, with Blanche - Trump’s former personal attorney - stepping in as acting AG and signaling it’s time to move on from the scandal.

“The DOJ has now released ALL the files with respect to the Epstein saga,” Blanche stated on Fox News. He added, “I think that to the extent the Epstein files was a part of the past year of this Justice Department, it should not be a part of anything going forward.”

Jesse Watters pressed Blanche directly on whether he thought Bondi mishandled the Epstein files. Blanche responded, “First of all, I have never heard President Trump say that the Attorney General was, that anything that happened to her had anything to do with the Epstein files. So look, the Epstein files has been a saga that’s lasted for the entire for the past year.” He further defended the process, noting that Bondi and he “appeared in front of Congress voluntarily a couple weeks ago to answer any questions they had” and made documents available for review.

🚨 IT'S OFFICIAL: The Epstein Files are DONE, acting AG Todd Blanche announces

"The DOJ has now released ALL the files with respect to the Epstein saga."pic.twitter.com/dT9dLvoASd
— Eric Daugherty (@EricLDaugh) April 3, 2026

When Watters asked, “Who was Epstein spying for?” Blanche replied, “I don’t know that he was spying for anybody. Nobody’s ever said that.” He claimed there is “no evidence in the Epstein files” suggesting Epstein worked for a foreign country.

Todd Blanche wastes no time covering up for the Epstein child trafficking network and says he has no idea which country Jeffrey Epstein was working for or spying for.

He says there is no evidence in the Epstein files that proves Epstein was a spy.

JESSE WATTERS: Who was Epstein… pic.twitter.com/EtyHPLakVN
— Shadow of Ezra (@ShadowofEzra) April 3, 2026

On the question of releasing names of men who abused girls, Blanche previously pushed back, asking “What does that mean? I don’t understand what that means.” He also stated plainly, “It’s not a crime to party with Mr. Epstein.”

Reporter: Will we learn the identities of the men in the Epstein files?
Todd Blanche, Trump’s Attorney General: “What does that mean?”

🤬It means: Who raped children, who enabled it, and who’s still being shielded?
Stop pretending the question is unclear. The cover-up is the… pic.twitter.com/i6nGtX9P74
— Truthseeker (@Xx17965797N) April 3, 2026

Blanche doubled down on the administration’s position: “When Trump said let’s release the Epstein files… we did it.”

The timing aligns with Trump’s decision to move Bondi to the private sector amid reported frustrations over her pace on key matters, including the Epstein files. Critics had highlighted her earlier claims of possessing a client list and distributing repetitive binders, followed by a DOJ memo stating no such list existed.

Yet the assertion that “all files” are out faces immediate pushback. The DOJ reviewed roughly six million potentially responsive documents but released only about 3.5 million publicly, leaving millions still unreleased, redacted, or withheld.

This latest development deepens concerns over an Epstein cover up. FBI officers have raised alarms, with suspicions of document shredding after his death.

Separately, a foreign hacker who cracked into the FBI’s Epstein files in 2023 was reportedly disgusted at the scale of child sexual abuse material uncovered, underscoring how much sensitive content may still remain hidden.

Epstein survivor reactions and ongoing victim calls for transparency continue to highlight the stakes.

Annie Farmer, a survivor of Jeffrey Epstein and Ghislaine Maxwell, reacts to President Trump firing Pam Bondi as U.S. attorney general. Trump said Deputy Attorney General Todd Blanche will be acting attorney general. pic.twitter.com/MrysNjbVOA
— CBS News (@CBSNews) April 2, 2026

Blanche has remained guarded on specifics. His responses often circled back to congressional access rather than new public disclosures, while emphasizing a pivot to other fraud cases nationwide.

The Epstein operation represented far more than one man’s crimes — it exposed a network that reached the highest levels of power, protected for years by institutional gatekeepers. Declaring the files “done” while millions of pages stay locked away does little to rebuild trust in a system long accused of shielding the elite.

Americans who supported Trump’s mandate expect genuine sunlight on these matters, not a premature shutdown dressed as completion. The deep state’s habits of concealment die hard, and the demand for full disclosure — for the victims and the public’s right to know — will not fade quietly.

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

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Our best-selling steak bundle

Tyler Durden Fri, 04/03/2026 - 16:00

Second US Warplane Lost: A-10 Warthog Crashes Near Hormuz Shortly After F-15 Shootdown

Tyler Durden — Fri, 03 Apr 2026 19:30:00 +0000

Second US Warplane Lost: A-10 Warthog Crashes Near Hormuz Shortly After F-15 Shootdown

Update(1535ET): Friday has witnessed a sudden spate of disasters for the US Air Force over Iran. The downed F-15 situation is still ongoing, there are unconfirmed reports a Blackhawk helicopter may have been shot down, and now the NYT is confirming an A-10 Warthog crashed in the Persian Gulf region:

A second Air Force combat plane crashed in the Persian Gulf region on Friday, and the lone pilot was safely rescued, according to two U.S. officials who spoke on condition of anonymity to discuss operational matters. The A-10 Warthog attack plane went down near the Strait of Hormuz about the same time that an Air Force F-15E was shot down over Iran, the officials said. In that incident, one crew member was rescued and search-and-rescue operators are looking for the second airman.

The A-10 incident has seen very little in the way of any details emerge. Currently there's chatter that a second US crew member apparently shot down in the F-15 may have been rescued also. And..

US President Trump tells NBC News downing of US jet won't affect Iran talks.

"No, not at all. No, it's war. We're in war."

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Set yourself up with a great BBQ

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Update(11:55ET): The NY Times has cited US and Israeli officials who has given confirmation that a US fighter jet was downed and that a major rescue operation is underway, with the fate of the plane's crew unclear:

The fate of the plane’s crew was unclear, as American officials scrambled to mount a search and rescue operation before Iran could get to any survivors, said the U.S. and Israeli officials, who spoke on the condition of anonymity to discuss military operations.

The situation creates a military and diplomatic challenge for the United States, as President Trump has threatened in recent days to bombard Iran “back to the Stone Ages.” Over the past 24 hours, the United States and Iran have been trading attacks on military and civilian infrastructure in the region.

The U.S. jet was an F-15E, U.S. officials said, which has a standard crew of two, and not one of the stealth fighters of more recent design. Just days ago, Defense Secretary Pete Hegseth said Iran’s air defenses were so degraded that the United States was sending B-52 bombers over the country; the F-15E is much smaller, faster and more agile, making it a tougher target.

Iran’s IRGC-affiliated Tasnim News Agency has published a video of people in southern Kohgiluyeh and Boyer-Ahmad province “searching for American pilots”. pic.twitter.com/0i91p9y4Qt
— Ghoncheh Habibiazad | غنچه (@GhonchehAzad) April 3, 2026

There are also unconfirmed claims that a helicopter may have been shot down as it was engaged in the search and rescue mission. Supposedly state media has also issued a bounty for the capture of any US pilot by Iranian citizens.

Reports that a pilot has been located and rescued, via CBS, WSJ and others:

Two U.S. officials have confirmed that one member of the crew of an American F-15E shot down over Iran has been rescued. The status of the second crew member is unknown. A search-and-rescue operation is ongoing.

BREAKING: One of two crew members of a U.S. fighter jet that was shot down over Iran was located and rescued by U.S. special forces and the search for the second is ongoing, sources tell Axios. https://t.co/ZXndzj9n5I
— Axios (@axios) April 3, 2026

Below: unconfirmed but widely circulating images...

🚨UNCONFIRMED: Initial reports from Iran indicate the successful targeting of an American helicopter during search operations of downed F-15 fighter jet earlier today. pic.twitter.com/vhZvAn7ZsJ
— Clash Observer (@clashobserver) April 3, 2026

In the meantime Iran's parliament speaker and the man who appears to be de facto running the day-to-day of the country is trolling the United States:

After defeating Iran 37 times in a row, this brilliant no-strategy war they started has now been downgraded from “regime change” to “Hey! Can anyone find our pilots? Please?🥺”

Wow. What incredible progress. Absolute geniuses.
— محمدباقر قالیباف | MB Ghalibaf (@mb_ghalibaf) April 3, 2026

Reports of people shooting at helicopters/planes with small arms from the ground:

Iranian farmers were shooting at American search and rescue helicopters with rifles in a desperate attempt to down them, but according to CNN's guest, perhaps Iranians helped the fighter pilot because they're "happy that he's there." https://t.co/JpvkB9VMpT
— Glenn Greenwald (@ggreenwald) April 3, 2026

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Iranian media has announced that national forces have shot down a US fighter jet, and a US search and rescue effort is is active over Iran in an effort to locate two crew.

Israeli media as well as Axios are also reporting it, with emerging photos and videos suggesting it is an F-15 fighter jet. "Iranian state media published pictures and videos that allegedly show parts of the downed plane and one of the ejection seats," Axios writes. Photos initially released via state Fars:

BIG: Iranian state media released images of debris from a U.S. Air Force F-15E Strike Eagle fighter jet.

Iran initially claimed it had shot down an F-35, but the wreckage shown clearly matches an F-15E. pic.twitter.com/JMQvv0h2yo
— Clash Report (@clashreport) April 3, 2026

There are also emerging reports that Iran may have captured one of the pilots, while separately Israel's N12 reports that the US has sent "large forces" to rescue the crew. Presumably this is an aerial mission, including spotter aircraft and helicopters - leading to potential greater exposure to ground fire.

It is possible that US Special Forces operators could also be involved in the rescue mission, but CENTCOM within the opening hours of the incident has not confirm anything.

A McDonnell-Douglas ACES II (Advanced Concept Ejection Seat) from a US Air Force F-15E Strike Eagle has been found by residents in Southern Iran, the whereabouts or status of the pilot and weapons officer is currently unknown:

DropSite News, which maintains sources inside Iran, writes the following:

An Iranian official told Drop Site News that a U.S. F-15 warplane struck by Iranian forces went down over southern Tehran Province, with intense fire reported at the crash site. The official said the nature of the strike prevented the pilot[s] from ejecting before the aircraft crashed. No remains have been found.

There have been images and footage also circulating showing very low flights by potential US military spotter aircraft, likely looking for surviving crew of the F-15.

A US Air Force HC-130J "Combat King II" Combat Search and Rescue (CSAR) Aircraft seen flying extremely low over the countryside of Southern Iran.

A U.S. Air Force HC-130J “Combat King II” Combat Search and Rescue (CSAR) Aircraft seen flying extremely low over the countryside of Southern Iran, as the search continues for the crew of a downed American F-15E Strike Eagle. pic.twitter.com/vQL7umqmYy
— OSINTdefender (@sentdefender) April 3, 2026

Evidence of low-flying helicopters deployed as part of the recovery efforts...

Crazy, scenes from the ongoing US search operation in the Dehdasht area of the Kohgiluyeh and Boyer-Ahmad Province, southwest Iran. pic.twitter.com/Leksyki4Xu
— War Flash (@WarFlash_2630) April 3, 2026

After more than a month of Trump's Operation Epic Fury, the Pentagon has lost a slew of aircraft, including heavy refueling tankers, drones, and even three F-15s downed over Kuwait (which CENTCOM claimed was a 'friendly fire' incident). A stealth F-35 was also damaged, resulting in an emergency landing in a Middle East country.

Neither the US military nor the White House have immediately respond to requests for comment.

Tyler Durden Fri, 04/03/2026 - 15:30

Hegseth: Military Bases Are No Longer Gun-Free Zones

Tyler Durden — Fri, 03 Apr 2026 19:00:00 +0000

Hegseth: Military Bases Are No Longer Gun-Free Zones

Authored by Catherine Salgado via PJMedia.ocm,

Secretary of War Pete Hegseth has overturned the controversial rule banning firearms from military installations.

Up until now, it was nearly impossible for servicemen to obtain permission to carry personal firearms on military posts and bases. That is about the change.

“Not all enemies are foreign, nor are they all outside our borders,” said Hegseth in an April 2 video.

“Some are domestic. Confirming your God-given right to self protection is what I'm signing into action today. And I'm proud to do so.”

Our military installations have been turned into gun-free zones—leaving our service members vulnerable and exposed.

That ends today. pic.twitter.com/IQ204YepZ0
— Secretary of War Pete Hegseth (@SecWar) April 2, 2026

There have been multiple murders or mass casualty events on bases in the last decade, numerous drone incursions on military property, and a growing trend of foreigners breaching military bases, so there is good reason to think servicemen should be able to carry firearms on installations. Besides which, the overwhelming majority of mass shootings occur in gun-free zones. But Hegseth above all based his argument on the Constitution.

“Our great republic was founded on a simple yet bold idea: our rights, as citizens, are not granted to us by government, but instead, by God,” the secretary said.

“250 years ago, the Revolutionary War was fought to secure our God-given rights. The Second Amendment to our Constitution enshrines the right of all citizens to carry weapons to protect themselves, their families, and their fellow countrymen.”

And if any citizens can be trusted with guns, Hegseth argued, it is servicemen.

“The War Department's uniformed service members are trained at the highest and unwavering standards. These war fighters, entrusted with the safety of our nation, are no less entitled to exercise their God-given right to keep and bear arms than any other American,” he emphasized.

Indeed, Hegseth stated, “Our warfighters defend the right of others to carry, they should be able to carry themselves. Recent events like what happened at Fort Stewart, Holloman Air Force Base, or Pensacola Naval Air Station have made clear that some threats are closer to home than we would like.”

In 2019, a member of the Royal Saudi Air Force committed a terrorist attack at Pensacola’s Naval Air Station that killed three sailors and injured multiple others. In August 2025, Sgt. Quornelius Radford shot five fellow soldiers at Georgia’s Fort Stewart. Most recently, on March 17, civilian Ashanti Stewart killed herself after shooting and injuring a service member at Holloman Air Force Base in New Mexico.

Hegseth reflected, “In these instances, minutes are a lifetime. And our service members have the courage and training to make those precious short minutes count. Before today, it was virtually impossible — most people probably don't know this — it was virtually impossible for War Department personnel to get permission to carry and store their own personal weapons, aligned with the state laws where we operate our installations. I mean, effectively, our bases across the country were gun free zones, unless you're training, or unless you are a military policeman, you couldn't carry.”

That is a potentially dangerous state of affairs, Hegseth argued. “You couldn't bring your own firearm for your own personal protection onto post. Well, that's no longer. The memo I'm signing today directs installation commanders to allow requests for personal protection, to carry a privately owned firearm, with the presumption that it is necessary for personal protection.”

He clarified, “If a request is for some reason denied, the reason for that denial will be in writing and will explain in detail the basis for that direction. Again, the presumption is, service members will be able to have their Second Amendment right on post.”

That way, if there are more attempted terrorists and mass shooters, servicemen will have their personal firearms ready.

Tyler Durden Fri, 04/03/2026 - 15:00

Trump Proposes $1.5 Trillion In War Spending, 'Largest In Decades'

Tyler Durden — Fri, 03 Apr 2026 18:10:00 +0000

Trump Proposes $1.5 Trillion In War Spending, 'Largest In Decades'

Via The Cradle

US President Donald Trump is asking Congress to boost military spending to $1.5 trillion for 2027, the largest such request in decades, while demanding cuts to domestic spending on social programs, AP reported Friday.

The White House released details of the desired spending increase on Friday as part of Trump's 2027 budget proposal. The proposal comes amid the US-Israeli war on Iran, which is costing US taxpayers over $11 billon for each week it continues.

US Army/AP image

Last month, the Pentagon proposed receiving an additional $200 billion to backfill munitions and supplies used in the war, which has killed 3,527 Iranians, including 1,606 civilians and at least 244 children.

While the White House is demanding huge sums for war, Trump's proposal would reduce non-defense spending by 10 percent, primarily by shifting some responsibility for social programs to state and local governments.

"We're fighting wars. We can't take care of day care," Trump said at a private White House event on Wednesday. "It's not possible for us to take care of day care, Medicaid, Medicare – all these individual things," he said. "They can do it on a state basis. You can't do it on a federal."

According to AP, "The president's annual budget more broadly is considered a reflection of the administration's values," but does not carry the force of law.

For Trump's spending proposal to take effect, Congress would have to approve it. The US is already heavily in debt, with the federal government spending nearly $2 trillion more than it receives in tax receipts each year. This year, the national debt surpassed $39 trillion, while the debt-to-Gross Domestic Product (GDP) ratio now exceeds 120 percent, surpassing the peak reached after World War II.

While Trump ran for president on a platform of ending US wars abroad and putting the needs of US citizens first, he has instead prioritized initiating foreign wars in support of Israel's project to expand its hegemony and territory in West Asia.

The war on Iran is providing a boon to US and Israeli weapons firms, who stand to earn hundreds of billions in additional profits. After meeting with major defense contractors at the White House in early March, Trump said the companies had agreed to quadruple production of "exquisite" and sophisticated defense systems that can repel ballistic missile attacks, such as Patriot missile batteries and Terminal High Altitude Area Defense (THAAD) interceptors.

Each THAAD interceptor missile costs roughly $12.7 million, and each Patriot PAC-3 interceptor costs about $3.7 million. The interceptors have been used in large quantities to intercept Iran's retaliatory missile and drone attacks on Israel and US bases in the Gulf.

Among the weapons firms that stand to benefit most from the war are RTX (Raytheon), which makes Tomahawk missiles; Boeing, which builds F-15 and Growler warplanes; and Lockheed Martin, which produces F-35 warplanes and Patriot and THAAD interceptors.

Other firms that benefit include Northrop Grumman, which builds B-2 stealth bombers and radar technology; General Dynamics, which produces submarines, bombs, and warheads for missiles; and L3/Harris, which makes solid rocket motors for THAAD missiles and electronics and sensors for reconnaissance aircraft.

US defense stocks have rallied strongly since February 2022, when Russia invaded Ukraine. Israel's genocide of Palestinians in Gaza starting on 7 October 2023 provided an additional boost, as did the US and Israeli war on Iran in June of last year and the anticipation of the second US-Israeli war on the Islamic Republic that began in February.

* * *

Tyler Durden Fri, 04/03/2026 - 14:10

Acting AG Todd Blanche: Investigating ActBlue Allegations Is A Top Priority

Tyler Durden — Fri, 03 Apr 2026 17:00:00 +0000

Acting AG Todd Blanche: Investigating ActBlue Allegations Is A Top Priority

The Democratic Party's premier fundraising machine is in serious legal jeopardy, and the new man running the Justice Department just made clear he intends to do something about it.

The New York Times reported on Thursday that ActBlue’s own lawyers had warned its leadership in early 2025 that it may have lied to Congress about how it screens out illegal foreign donations.

In 2023, ActBlue CEO Regina Wallace-Jones sent a letter to Republican congressional investigators assuring them the platform used rigorous safeguards. The letter described "multilayered" screenings that helped "root out" overseas contributions. What the platform's own legal team later discovered was considerably more inconvenient: those protections weren't consistently applied in practice.

“This presents a substantial risk for ActBlue,” the law firm, Covington & Burling, wrote in one of two memos expressing legal concerns. One memo raised the specter of a criminal investigation if prosecutors believed that ActBlue had tried to conceal facts about its efforts to prevent foreign contributions.

Federal election law prohibits foreign citizens or people who are not permanent residents from donating directly to federal candidates or political action committees. Lying to or obstructing Congress is a crime.

The memos instigated a meltdown at the highest levels of ActBlue, one of the Democratic Party’s most vital financial organs.

Acting Attorney General Todd Blanche, freshly installed at the helm of the DOJ after Pam Bondi's departure, went on Jesse Watters' Fox News show Thursday and left little ambiguity about where this investigation stands.

“I can tell you that that is a priority of this administration and this Department of Justice,” Blanche said. “And it's something that a lot of people have been worried about it for a very long time. And you should rest assured that it includes the Department of Justice, and it includes me."

🚨 BREAKING: Todd Blanche indicates the DOJ is ACTIVELY INVESTIGATING ActBlue getting foreign donations and lying about it

"That's a priority of this admin and DOJ. People have been worried about it for a VERY long time. Rest assured it includes the DOJ, and it includes ME."… pic.twitter.com/yCGKiysWkW
— Eric Daugherty (@EricLDaugh) April 3, 2026

The New York Post added fuel to the fire with a separate exclusive, revealing that ActBlue changed its fraud prevention policy twice during the 2024 campaign cycle — both times in a more permissive direction. The platform modified standards in April 2024 and again in September, with the relaxed guidelines allowing more fraudulent contributions per month to slip through. Under the updated policy, up to 6.4% of total ActBlue donations that should have been rejected for fraud were instead processed without issue.

Foreign donors who paid through third-party apps like Apple Pay, PayPal, or Venmo were not asked for passport information — a significant gap in a system that ActBlue had represented to Congress as comprehensive and multi-tiered. The platform sent a follow-up letter to Congress in June 2025, claiming it had "recently implemented additional restrictions" to reject contributions from foreign countries, including those made through third-party processors.

“Did Democrats use ActBlue to funnel foreign money in American elections and then LIE to Congress about it?” Sen. Bernie Moreno asked in a post on X. “The Senate must immediately renew investigations into ActBlue, their lawyers, and their entire leadership team.”

ActBlue board chair Kimberly Peeler-Allen attempted to tamp down the story, telling the Times that "less than 1 percent" of contributions in the 2024 cycle showed signs of foreign origin. That number, however small it may sound, represents potentially millions of dollars on a platform that processed over $7 billion in the past five years. A Covington spokesman said the firm has "complete confidence in the legal advice our lawyers provided to ActBlue" — a carefully worded non-denial that speaks volumes about the legal exposure now facing the organization.

In addition to the Department of Justice, the House Oversight Committee revealed that congressional investigations into ActBlue will continue.

🚨 BREAKING: Reporting confirms what we’ve been investigating.

ActBlue’s own lawyers warned it may have misled Congress about safeguards against foreign donations. @GOPoversight, @HouseAdmin & @JudiciaryGOP will continue getting answers. https://t.co/nZS04x99lF
— Oversight Committee (@GOPoversight) April 2, 2026

With DOJ scrutiny and congressional Republican probes accelerating ahead of the midterms, ActBlue is running out of runway.

Tyler Durden Fri, 04/03/2026 - 13:00

Oil Shocks & Recessionary Outcomes

Tyler Durden — Fri, 03 Apr 2026 16:30:00 +0000

Oil Shocks & Recessionary Outcomes

Authored by Lance Roberts via RealInvestmentAdvice.com,

After more than three decades of watching oil markets upend economies, one pattern keeps repeating: investors learn the wrong lessons from the last shock. The 1973 OPEC embargo taught us that geopolitical disruptions are temporary. That lesson then got everyone killed, financially speaking, in 1979. The 2003 Iraq War produced only a mild oil bump and no recession, so traders got comfortable. Then 2008 happened. Today, with Brent crude having spiked over 60% since U.S. and Israeli strikes on Iran began in late February, the same dangerous reasoning is circulating again. That narrative is that this “event” is manageable and will resolve quickly. If that is the case, then the economy will absorb it.

That may indeed be the case. However, the conditions that determine whether an oil shock becomes a full recession are specific, quantifiable, and worth examining with clear eyes. That is what this analysis does.

Not All Oil Shocks Are The Same

The post-World War II era has produced a half-dozen oil price crises significant enough to reshape the global economy. They share a surface-level similarity: prices spike, headlines scream, and politicians rage. However, beyond those commonalities, they diverge dramatically in their underlying causes and economic consequences. (Read Energy Price as an Economic Indicator)

The 1973 OPEC Embargo stands alone as the archetype. OAPEC nations cut production and placed a deliberate embargo on the United States in response to U.S. support for Israel during the Yom Kippur War. In roughly 4 months, the price of crude oil rose from $3 per barrel to nearly $12 globally, a 300% surge. The U.S. economy, already running hot with inflation at 3.4%, could not absorb the blow. GDP contracted 0.5% in 1974. Unemployment climbed from 4.6% to 9% by May 1975. The Fed raised its benchmark rate from 5.75% in 1972 to 12% by 1974 and still could not contain prices. The result was stagflation: high inflation (above 9%), high unemployment, and slow economic growth. Those THREE factors are the ugliest combination in economics.

Note: That last sentence is crucially important. Headlines are currently filled with the term “stagflation.” As discussed in the linked article above, current economic data does not meet the definition of stagflation.

The 1979 Iranian Revolution delivered a second shock to an economy still bruised from the first. Iran’s oil exports, then running at roughly 5 million barrels per day, collapsed as internal chaos overtook the country. Unlike the 1973 embargo, this was not a deliberate strategy; it was a production collapse driven by revolution. The oil supply only dropped about 4% globally, but the market’s reaction doubled crude prices to nearly $40 per barrel within 12 months. The Iran-Iraq War, which began in 1980, compounded the disruption. The U.S. entered another recession. Fed Chairman Paul Volcker ultimately had to drive interest rates to 20% to break the inflation spiral.

The 1990 Gulf War shock was sharper but shorter. Iraq’s invasion of Kuwait removed roughly 4.3 million barrels per day from the market. Oil went from $15 to $42 per barrel in two months, a 75% spike. The U.S. entered a mild recession, with the S&P 500 falling about 21% from its peak. Crucially, the disruption lasted only months. Once coalition forces pushed Iraq back and Kuwaiti fields resumed production, prices fell sharply, and the economic damage was contained. This episode is the key comparative reference point for why duration matters so much.

The 2007-2008 oil surge is more complex. Prices rose nearly 100%, from roughly $50 to a peak of $147 per barrel in July 2008. The cause was not primarily a supply disruption; it was demand-driven, driven by a decade of explosive growth in China and by hoarding commodities in an unprecedented manner. But the shock landed on an economy already fracturing from the housing and credit collapse. The S&P 500 would go on to lose 55% from peak to trough. Attributing that devastation primarily to oil prices misreads the episode. The financial system’s breakdown amplified every other economic stress factor.

The Russia-Ukraine oil shock of 2022 drove Brent crude to $139 per barrel by March before falling back. The U.S. never officially entered a recession by the traditional two-quarter GDP definition, though it suffered a significant corrective event. The key difference was that the U.S. had by then become a net exporter of petroleum products, blunting the direct impact of prior shocks. However, the Fed was aggressively hiking interest rates to combat the surge in inflation resulting from the Pandemic-driven stimulus.

So, what does this mean?

What Separates The Killers From The Scares

The Federal Reserve Board’s own researchers concluded that there is no mechanical link between net oil price increases and subsequent recessions, even controlling for the magnitude of the spike. That statement sounds almost reassuring; however, what it actually means is more sobering. The same oil shock that causes a deep recession in one environment may barely register in another. The conditions surrounding the shock determine the outcome.

Five variables differentiate the recession-inducing shocks from the ones that economies absorbed:

Duration and persistence of the disruption. The 1973 embargo lasted six months. The Iranian Revolution removed Iranian supply for much of 1979, then extended it by the Iran-Iraq War into the 1980s. These were multi-year disruptions that forced structural change, manufacturers to reprice inputs, households to slash consumption, and central banks to make crisis decisions in real time. The 1990 Gulf War spike lasted two months before Kuwait came back online. The economy absorbed a body blow, but not a sustained one. The difference between a broken rib and a severed artery is time and severity.
Inflation conditions before the shock. The 1973 and 1979 shocks both hit economies where inflation was already elevated, and inflation expectations were untethered. The St. Louis Fed’s research found that the average real energy price increase preceding the four recessions between 1973 and 1991 was 17.5%, and in each case, the shock compounded pre-existing inflation dynamics. When workers expect prices to keep rising, they demand higher wages. When companies expect input costs to keep rising, they raise prices pre-emptively. The wage-price spiral becomes self-reinforcing. The 2004 to 2005 oil price increase was actually larger than the one that preceded the 2007 to 2009 recession, yet it did not trigger a recession. The difference was that inflation expectations were anchored in the mid-2000s, unlike in the 1970s.
The role of monetary policy and its timing. Paul Volcker’s decision to raise rates to 20% was the necessary kill shot on 1970s stagflation, but it also pushed the economy into a severe 1981 to 1982 recession. The Fed’s response to an oil shock matters as much as the shock itself. An accommodative Fed that lets oil-driven inflation embed in the broader economy risks a worse outcome. A hawkish Fed that overreacts to supply-side inflation can trigger a recession independent of the oil shock itself. Neither 2003 nor 2010 saw the Fed forced into a crisis tightening cycle specifically because of oil.
Energy intensity of the economy. This is the most structurally important factor for the current period. The amount of oil required to produce one unit of U.S. GDP has declined by more than 70 percent since the 1970s, according to World Bank data. As Paul Krugman noted in a recent analysis, the U.S. economy has roughly tripled in size since the late 1970s while consuming approximately the same total volume of oil. Every dollar of GDP today requires dramatically less energy than it did in 1973. As the IMF estimated, a sustained 30% increase in oil prices would reduce global GDP by up to 0.5%, which is serious but not catastrophic. The same shock in 1973 could cause damage multiple times that amount.
U.S. net energy position. In 1973, the United States imported nearly everything it consumed. Today, the U.S. runs a net petroleum trade surplus — $58 billion in 2025, per Census Bureau data. Higher oil prices are a direct tax on importers. They’re a revenue windfall for exporters. The U.S. is now partially both, which fundamentally changes the calculus. Energy companies and the states where they operate benefit from price spikes even as consumers are hurt. That offset did not exist in any meaningful way before the shale revolution.

The 2026 Oil Shock – How Does It Compare?

On February 28, 2026, the United States and Israel launched coordinated strikes on Iran targeting leadership, security forces, and missile infrastructure. Within days, Iran retaliated with missile strikes targeting oil vessels and infrastructure throughout the Gulf region. The Strait of Hormuz, through which roughly 20 million barrels per day of crude oil and refined products normally flow, representing about 20% of global seaborne oil trade, effectively closed to normal traffic. Such headlines generally provide a springboard for more catastrophic views.

Those actions caused Brent crude to surge from around $70 per barrel before the conflict to $113.52 as of March 23. That is a 60-plus percent spike in under four weeks. In nominal terms, this is approaching the 2008 peak of $147 per barrel. The IEA’s 32 member nations coordinated the largest emergency drawdown of strategic reserves in the agency’s 52-year history, releasing 400 million barrels, more than double the volume deployed after the Russia-Ukraine outbreak in 2022.

So is this time different? In some ways, yes — and in ways that cut both directions.

The structural arguments for a more muted impact are real.

The U.S. oil intensity of GDP has fallen roughly 70% since 1973.
The U.S. is a net petroleum exporter.
The strategic reserve architecture now exists specifically for scenarios like this.
And inflation expectations, while elevated, are nowhere near the unanchored levels of the late 1970s.

Given this backdrop, Oxford Economics modeling suggests that global oil prices would need to average $140 per barrel for two months, alongside significant financial market tightening and deteriorating consumer confidence, to pose a clear recessionary risk.

On the other hand, the arguments for this being a more dangerous shock are equally serious. The Strait of Hormuz presents a physical chokepoint that cannot be bypassed through rerouting or sanctions workarounds, the way Russian supply was redirected after 2022. Roughly 80% of Asia’s oil imports transit that strait. Vietnam holds fewer than 20 days of reserve supply. The European Central Bank has already postponed planned rate cuts, raised its 2026 inflation forecast, and warned of the risk of stagflation for energy-intensive economies. Germany, the UK, and Italy face the highest recession exposure in Europe. And the U.S. economy entered this shock with a soft labor market, elevated consumer debt, declining consumer sentiment, and a stock market trading at historically expensive valuations before the conflict began.

Capital Economics recently projected that even in a contained three-month conflict scenario, Brent could average $150 per barrel over the next six months. In such a prolonged scenario, the IMF Managing Director warned of a meaningful global inflationary impact. Morgan Stanley also flagged that a conflict lasting longer than a few weeks would meaningfully raise recession probabilities through multiple channels: energy costs, inflation persistence, and tightening financial conditions.

This shock is bigger in scope than 1990, comparable in speed to 1973, structurally more like the physical supply shock of 1979 than the demand-driven surge of 2007, and occurring in an economy that is better insulated in some ways but already stressed in others.

The honest answer is that the outcome is genuinely uncertain and a situation that investors should not entirely ignore.

MARKET BEHAVIOR AND THE INVESTOR PLAYBOOK

History draws a sharp line between market outcomes in oil shocks that became recessions and those that did not. That line does not disappear just because it’s uncomfortable.

In the four oil-linked recessions between 1973 and 1991, the S&P 500 experienced average peak-to-trough declines of 20-48%. The 2007 to 2009 Great Recession, where elevated oil prices compounded financial system collapse, saw the index fall 55% from its highs. Recovery in these recession scenarios took anywhere from 126 trading days (post-COVID) to 895 trading days (post-Great Recession) to reclaim prior levels. That dispersion matters to any investor thinking about sequence-of-returns risk or near-term liquidity needs.

The non-recession oil shock episodes tell a different story. After the 2003 Iraq War oil spike, the S&P 500 delivered roughly 25% gains over the following year. Following the 2016 OPEC production cut cycle and resulting price rebound, equities posted approximately 19% returns in the subsequent 12 months. Kedia Advisory’s analysis of 7 oil spike episodes since 1986 found that the S&P 500 averaged a 24% return in the year following a major oil surge, with 6 of the 7 episodes producing positive forward returns. The one exception was 2008, when oil’s spike coincided with total financial system breakdown.

The critical investor lesson is that the oil shock itself rarely determines the market outcome. The recession does. And the recession typically follows when the shock is persistent, when it combines with pre-existing economic weakness, and when monetary policy cannot respond flexibly. That is precisely the risk matrix investors need to monitor right now.

What should investors do differently given this analysis? Three principles apply regardless of how the current conflict resolves.

Manage duration risk in fixed income carefully. If this shock persists and inflation re-accelerates, the Fed will face pressure to keep rates higher for longer. That means Treasuries with long maturities carry more risk than they appear. Short-duration Treasuries and I-bonds remain the cleaner defensive position.
Review energy exposure deliberately. Energy stocks historically outperform during sustained oil price shocks. The 2022 experience confirmed this as energy was the only S&P 500 sector to post positive returns for the year. But energy stocks often reverse sharply when the shock resolves, so this is a tactical, not a structural, position.
Most importantly, do not let the shock force reactive decisions. The S&P 500 is already down about 7% month-to-date as of late March. A further 10 to 15% correction would not be historically unusual, even in a non-recessionary oil-shock scenario. For investors with properly structured portfolios, that kind of volatility is noise. For investors concentrated in high-multiple, rate-sensitive growth stocks, it may be the beginning of a more serious repricing.

The data across 50 years of oil shocks says this: if it’s a scare, markets often recover quickly, and investors who sold regret it. If it’s the beginning of a recession, the damage compounds for months before the bottom is clear. The difference between those two outcomes is driven by factors that are still unfolding and questions that need to be answered.

How long will the Strait of Hormuz remain disrupted?
Will inflation expectations remain anchored or begin to drift higher?
And, most critically, will the Fed maintain its policy flexibility or lose it?

I’m watching all three closely, and so should you.

Tyler Durden Fri, 04/03/2026 - 12:30

Senior Iranian Official Involved In Reaching Out To Vance Severely Wounded In Airstrike

Tyler Durden — Fri, 03 Apr 2026 16:00:00 +0000

Senior Iranian Official Involved In Reaching Out To Vance Severely Wounded In Airstrike

A top Iranian official who was involved in diplomatic outreach and indirect talks or messaging with the United States and Pakistani mediators was reportedly critically wounded in a US-Israeli strike. Kamal Kharazi, an 81-year-old senior adviser to Tehran and former foreign minister, lost his wife in the Wednesday strike on his home, state media has said.

Kharazi chairs Iran's Strategic Council on Foreign Relations and has been viewed as a potential backchannel negotiator involving Islamabad, but now he's been hospitalized with serious injuries, state media has also said.

"We have seen what looks like an assassination attempt against the former foreign minister, Kamal Kharazi … We don’t know why he’s been targeted. He has been gravely wounded, and his wife was killed," said an Al Jazeera correspondent in Tehran.

Iranian officials described to Mehr News Agency that Kharazi was overseeing outreach to Pakistan tied to a possible meeting with US Vice President JD Vance. A potential Vance trip to Pakistan was initially reported as possibly being in the works late last month.

But Middle East Eye has reported that Kharazi was not seeing much room for diplomacy as US-Israeli actions escalate to attacks on Iranian infrastructure and energy:

He told CNN in March, "I don’t see any room for diplomacy anymore. Because Donald Trump had been deceiving others and not keeping with his promises, and we experienced this in two times of negotiations – that while we were engaged in negotiation, they struck us."

If he succumbs to his wounds, Kharrazi would be the latest senior Iranian official killed since the war began.

In addition to Khamenei, top security adviser Ali Shamkhani, Revolutionary Guard commander Mohammad Pakpour, Armed Forces Chief of Staff Abdolrahim Mousavi, and Defence Minister Aziz Nasirzadeh were all killed on the first day of the war.

Ali Larijani, secretary of the Supreme National Security Council, was killed on 17 March, along with his son and one of his ⁠deputies. Intelligence minister and head of civilian monitoring, Esmail Khatib, was killed in an Israeli strike a day later.

Some analysts and pundits have accused Israel in particular of trying to sabotage any US-Iran talks, as the Netanyahu government wants to see complete regime collapse in the Islamic Republic.

“While we were engaged in negotiations, they struck us,” #Iran’s Kamal Kharazi told CNN on Mar. 9. Today his home was struck, wife killed, he sustained serious injuries. NYT reports Kharazi was discussing w Pakistan possible US-Iran negotiations w VP Vance pic.twitter.com/fv61PK8ES0
— Joyce Karam (@Joyce_Karam) April 1, 2026

Israel has also stood accused of seeking to create the conditions to lure the White House into authorizing 'limited' strikes which would inevitably become an open-ended war with no timeline.

* * * Meanwhile you can just order things...

Tyler Durden Fri, 04/03/2026 - 12:00

Poison Ivey: Chicago Bulls Release Forward After He Speaks Out Against Pride Month

Tyler Durden — Fri, 03 Apr 2026 15:30:00 +0000

Poison Ivey: Chicago Bulls Release Forward After He Speaks Out Against Pride Month

Authored by Jonathan Turley,

This week, the Chicago Bulls waived guard Jaden Ivey for “conduct detrimental to the team.”

No, Ivey did not assault anyone or gamble on games.

He did not call for violence.

Ivey expressed his opposing religious beliefs, including criticizing the NBA’s Pride Month celebrations.

There is no question that private companies have the right to control employees’ on-the-job speech, including barring demonstrations such as kneeling during the national anthem. However, the Ivey controversy exposes the hypocrisy of sports associations and teams in the combination of corporate virtue signaling and athlete speech limitations.

Companies in various fields have asserted the right to condition contracts on the possibility of termination due to public behavior or comments that are detrimental to the company.

Notably, this was a player speaking off the basketball court who was deemed “detrimental” to the brand. The main concern is the lack of consistency. Actors such as Rachel Zegler have tanked their own movies to use their platforms to advance their own political viewpoints. Likewise, athletes have routinely espoused controversial views on racial divisions or law enforcement without losing their contracts. Recently, teams supported athletes espousing anti-ICE sentiments. In other words, it is not advocacy but the cause that these companies focus on when allowing or punishing speech.

At the same time, the NFL and NBA require players to wear and espouse views that some of them — like some in the nation — may oppose. Ivey was objecting that he does not feel that Pride Month is espousing “righteous” lifestyles. Ivey was not attacking the Bulls or the game. He was asserting that he does not support the virtues or values being endorsed by the company.

Many of us were offended by social media postings by Ivey in referring to Catholicism as a “false religion.” He also drew the ire of many by telling a fan that “God does not hear your prayer if you are a sinner.”

However, it appears that it was his criticism of the LGBTQ community and Pride Month that ended the matter with the NBA. Ivey objected to the advocacy required by the NBA, objecting “they proclaim it. They show it to the world. They say, ‘Come join us for Pride Month,’ to celebrate unrighteousness.”

The issue of “talent” becoming notorious has long been a focus of sports and entertainment contracts. Hateful or divisive public comments can impact a brand or corporate image. For example, a team does not have to continue an association with a racist spewing hateful remarks about fans.

The Ivey controversy should force a discussion of the countervailing responsibilities of the teams and the NBA. Some of us have previously criticized the virtue-signaling of associations like the NFL, with giant statements in the end zones and on players’ helmets. Many fans would like these teams to stop lecturing them and simply play sports. We do not need morality or civics lessons from the likes of NFL Commissioner Roger Goodell.

However, if the NFL and NBA are going to get into the business of shaping fans’ values, they may need to accept greater leeway for athletes who hold opposing values. Instead, they are expecting athletes like Ivey to effectively endorse approved values while barring them from expressing dissenting views.

This is not the first such controversy. Years ago, former coach Tony Dungy was the subject of a cancel campaign because he expressed his faith at a pro-life rally.

Former Washington Commanders defensive coordinator Jack Del Rio was punished for expressing a dissenting view of what happened on January 6th and what he viewed as the different treatment given to these cases, including excessive sentences.

Likewise, recently, Chicago Cubs player Matt Shaw was the target of a campaign to trade him after he attended the funeral of Charlie Kirk.

Sports organizations, like other businesses, have every right to bar protests and political statements at games. They should, however, apply the same standard to themselves. It is time to get virtue signaling and social statements out of sports. Teams need to stop picking sides on social and political issues while blocking opposing views from their athletes. Once out of the business of shaping public values and views, these teams will be in a better position to demand that athletes avoid controversial public statements that alienate fans or harm a brand.

Otherwise, teams could simply bar such commentary during games and allow athletes the same freedom of expression outside of the game that the teams enjoy during games.

None of this means that Jaden Ivey is right or admirable in his specific statements. It only means that, if teams want him to just play basketball, they should do the same.

Jonathan Turley is a law professor and the best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.”

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Tyler Durden Fri, 04/03/2026 - 11:30

Services Sector Contraction In March Screams Q1 Stagflation

Tyler Durden — Fri, 03 Apr 2026 14:15:00 +0000

Services Sector Contraction In March Screams Q1 Stagflation

Following S&P Global's Manufacturing PMI's better than expected print higher (signaling resilience in the face of March's war in Iran), the data released this morning showed the US Services Sector experienced a contraction of activity at the end of the first quarter of 2026.

The headline S&P Global US Services PMI Business Activity Index recorded 49.8 in March, down from February’s 51.7 and lower than the earlier ‘flash’ estimate of 51.1.

It was the first decline recorded in over three years amid the weakest rise in new work since April 2024.

“The PMI survey data show the US economy buckling under the strain of rising prices and intensifying uncertainty, as the war in the Middle East exacerbates existing concerns regarding other policy decisions in recent months, notably with respect to tariffs," said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence

The service sector has slipped into contraction for the first time since January 2023, dragging the overall economy down to a near-stalled 0.5% annualized rate of growth in March...

Worst hit is consumer-facing service sectors where, barring the pandemic lockdowns, the downturn reported in March was among the steepest recorded since data were first available in 2009.

However, financial services and tech, both of which performed strongly last year, have shown some signs of weaker performance amid financial market volatility and concerns over higher interest rates, which have deterred investment.

“Key to the deteriorating growth trend is a pull-back in spending amid worsening affordability, with costs and selling prices surging higher in March amid spiking energy prices.

The survey data are broadly consistent with consumer price inflation accelerating close to 4% as firms increasingly seek to push through higher costs onto customers in the coming months. "

The stagflationary environment of stalled growth and surging price pressures pictured by the PMI presents a major challenge to policymakers, especially with the March survey also indicating falling employment.

"Clearly much depends on the duration of the conflict. The fact that business confidence has merely dipped and not slumped is a sign that businesses are hopeful of a swift resolution to the war," added Williamson.

"However, a concern is that the energy disruption unleashed by the war in the Middle East may well have an impact that lasts far longer than any actual conflict and may test the resilience of business and households over the coming months.”

Ironic that this occurred during a month that saw the economy add a surprising 178k jobs.

Tyler Durden Fri, 04/03/2026 - 10:15

March Jobs Shocker: Payrolls Soar By 178K Most Since 2024, Blowing Away All Estimates; Unemployment Rate Drops

Tyler Durden — Fri, 03 Apr 2026 14:01:12 +0000

March Jobs Shocker: Payrolls Soar By 178K Most Since 2024, Blowing Away All Estimates; Unemployment Rate Drops

We titled our nonfarm payroll preview post "a substantial bounce" and boy were we right: with consensus expecting a material rebound from February's negative print (which was revised as usual worse, from -92K to -133K), what the BLS reported instead was a huge beat to expectations of a 65K increase, with March jobs reportedly rising by 178K, the biggest increase since December 2024.

The number was driven entirely by a surge in private workers which added 186K in March, far above estimates of 78K. Government workers continued to drop, sliding by 8K in March and now negative 8 of the past 9 months,

This was not only higher than all estimates but was a 3 sigma beat to the median forecast, something we haven't seen in over a year.

In keeping with tradition, the previous month's data was revised sharply negative, from -92K to -133K, despite expectations of an upward revision. Yet for once there was an upward revision in the historical data: the change in total nonfarm payroll employment for January was revised up by 34,000, from +126,000 to +160,000, and the change for February was revised down by 41,000, from -92,000 to -133,000. With these revisions, employment in January and February combined is 7,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government

A quick look at the Household survey shows that while the establishment survey posted a solid increase of 178K, the Household increase declined again, dropping by 64K, the 3rd month in a row.

This means that despite all attempt to revise away the impact of illegal immigration, it still lingers with total number of payrolls (Establishment) running well ahead of employed workers (Household).

There was more good news: the unemployment rate actually dropped from 4.4% to 4.3% amid expectations of an unchanged print. This was despite a drop in the actual number of employed workers (per the Household survey) but offset by an even bigger drop in the civilian labor force, which declined by almost 400K, from 170.483MM to 170.087MM.

While the unemployment rate dropped, the labor force participation rate slumped to a 5 year low, largely due to the halt of illegal immigration, helping keep unemployment depressed.

Among the major worker groups, the unemployment rate for people who are Asian (3.7%) decreased in March. The jobless rates for adult men (3.8%), adult women (4.0%), teenagers (13.7%), and people who are White (3.6%), Black (7.1%), or Hispanic (4.8%) all posted a modest sequential drop.

There was some good news for the Fed too, with a 0.2% increase in monthly average hourly earnings, below the 0.3% est and down from 0.4% in February, the annual increase in hourly earnings was just 3.5%, the lowest in 3 years, and below estimates of a 3.7% increase. It appears that the most important metric for the Fed - hourly earnings - is starting to take on water.

Yet while it was good for the Fed, it may not be good for others: with wage growth decelerating, the employment base - especially among native born workers (see below) remains narrow, reliant on public or quasi-public demand drivers rather than rate-sensitive private activity.

A few additional highlights from the report:

The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.8 million in March but is up by 322,000 over the year. The long-term unemployed accounted for 25.4 percent of all unemployed people in March.
Both the labor force participation rate, at 61.9 percent, and the employment-population ratio, at 59.2 percent, both at multiyear lows
The number of people employed part time for economic reasons, at 4.5 million, changed little in March. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs.
The number of people not in the labor force who currently want a job changed little at 6.0 million in March. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.
Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force increased by 325,000 in March to 1.9 million. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey.
The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, increased by 144,000 in March to 510,000.

Taking a closer look at the Establishment survey, in March job gains occurred in health care, in construction, and in transportation and warehousing. Federal government employment continued to decline.

Health care added 76,000 jobs in March. Employment in ambulatory health care services rose by 54,000, reflecting an increase of 35,000 in offices of physicians as workers returned from a strike. Employment also increased in hospitals (+15,000). Over the prior 12 months, health care had added an average of 29,000 jobs per month.
Employment in construction grew by 26,000 in March but had shown little net change over the prior 12 months.
Transportation and warehousing added 21,000 jobs, reflecting a gain in couriers and messengers (+20,000). Employment in transportation and warehousing is down by 139,000 since reaching a peak in February 2025.
Employment in social assistance continued its upward trend in March (+14,000), primarily in individual and family services (+11,000).
Federal government employment continued to decline in March (-18,000). Since reaching a peak in October 2024, federal government employment is down by 355,000, or 11.8 percent. Federal employees on furlough during the partial government shutdown were counted as employed in the establishment survey because they worked or received (or will receive) pay for the pay period that included the 12th of the month.
Employment in financial activities edged down by 15,000 in March, reflecting a loss in finance and insurance (-16,000). Employment in financial activities is down by 77,000 since reaching a peak in May 2025.

Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; retail trade; information; professional and business services; leisure and hospitality; and other services.

The composition of the March jobs report was subpar: job growth was once again dominated by healthcare, a sector largely insulated from slowing growth or the Fed’s aggressive rate stance. Healthcare alone accounted for 76,000 of the 178,000 jobs added,more than 40% of the month’s total, driven in part by workers returning from a physician strike. Outside of that, there’s little to celebrate: construction showed modest gains, transportation remains well below its 2025 peak, and financial activities continued to shed jobs. Perhaps the best news was that government workers - which on the margin add little value, and are a drain of taxpayer resources - dropped again, now for the 6th straight month and 8 of the past 9.

Peeking below the surface of this month's report, we find that the quality distribution was solid, with +335K full-time jobs added, offset by a 188K drop in part-time jobs.

Last but not least, one of the most closely watched series, that of native vs foreign-born (mostly illegal) workers showed the biggest monthly increase in foreign-born workers since January 2025, which suggests that the strength in today's jobs report may have been derived from the one thing that Trump has been eager to do away with: illegal labor.

* * * 2 more in stock then it's gone

Tyler Durden Fri, 04/03/2026 - 10:01

Why Are They So Obsessed With This?

Tyler Durden — Fri, 03 Apr 2026 14:00:00 +0000

Why Are They So Obsessed With This?

Authored by Steve Watson via Modernity.news,

As NASA’s Artemis II mission — the first crewed flight around the Moon in over half a century — gets underway, some in the media couldn’t resist injecting race into humanity’s greatest technical achievement.

Instead of celebrating the engineering triumph and the daring crew pushing the boundaries of exploration, certain outlets fixated on skin colour and “representation.” This is the same crowd that claims to champion science, yet they reduce every milestone to identity politics.

A Sky News reporter declared that the Apollo missions to the Moon “didn’t represent humanity because ‘Apollo was all white men…’” highlighting how even lunar history must now be filtered through the lens of grievance.

Sky News Reporter says that the Apollo missions to the Moon didn't represent humanity because "Apollo was all white men..."pic.twitter.com/xuvLEeWFOu
— Libs of TikTok (@libsoftiktok) April 2, 2026

They couldn’t even exclude a manned moon mission, a stepping stone to colonising Mars, from this twisted obsession.

In a separate incident, a reporter attempted to goad NASA astronaut Victor Glover, pilot on Artemis II and incidentally the first person of colour to venture beyond low Earth orbit on a lunar mission, into giving a DEI soundbite.

Glover’s response, however, was a masterclass in sanity, as he responded, “I hope one day we can look at this as human history, not black history or women’s history.”

NASA pilot Victor Glover CLAPS back after being asked what it means to be the first black man to visit the moon: “It’s the story of humanity, not black history, not women’s history, but that it becomes human history.”

“I also HOPE we are pushing the other direction that one day… pic.twitter.com/0ctJfiWVRE
— RedWave Press (@RedWavePress) April 2, 2026

Glover’s crew — including commander Reid Wiseman, mission specialist Christina Koch (the first woman to fly this far), and Canadian Jeremy Hansen — represents the best of merit-based selection, not quotas. Yet the race-obsessed can’t let it stand on its own.

X users weren’t having any of the nonsense. One sharp reply nailed the absurdity: “No mission will ever represent humanity until we have the world’s first trans, non-binary, dual spirit, free Palestine astronaut of color!”

No mission will ever represent humanity until we have the world's first trans, non-binary, dual spirit, free Palestine astronaut of color! pic.twitter.com/y0lgjxqQ5y
— MAGAMemeNY (@MAGAMemeNY) April 2, 2026

This fixation isn’t new. During Apollo, the focus was on beating the Soviets and landing on the Moon — full stop. No one paused the Saturn V countdown to lecture about demographics.

The 650 million people glued to their TVs in 1969 weren’t obsessing over the astronauts’ skin color; they were witnessing what free people, driven by merit and competition, could achieve. Now, as Artemis II builds on that foundation toward Mars, the same voices demand we rewrite the past to fit today’s dogma.

Real progress comes from excellence, not enforced outcomes. The Moon — and eventually Mars — doesn’t care about race quotas. It demands the sharpest minds and the boldest spirits. That’s the spirit that built Apollo and will get us back there and beyond.

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

* * *

Tyler Durden Fri, 04/03/2026 - 10:00

Hegseth Ousts Chief Of The Army As Iran War Persists

Tyler Durden — Fri, 03 Apr 2026 13:30:00 +0000

Hegseth Ousts Chief Of The Army As Iran War Persists

The Pentagon shake-up under Trump has not ended, as on Thursday Pete Hegseth has dismissed Army Chief of Staff Gen. Randy George, asking him to step down into early retirement.

The move is unusual, given this is the head of the Army and the United States is past the one-moth mark in Trump's Operation Epic Fury. A reason hasn't been given as to what amounts to Gen. George being effectively fired.

CBS writes, "One of the sources said Hegseth wants someone in the role who will implement President Trump and Hegseth's vision for the Army."

A top defense official has also said: "We are grateful for his service, but it was time for a leadership change in the Army."

The chief of the Army is typically a four-year term, and already there's speculation over who will be the likely candidate to lead next:

The current vice chief of staff of the Army, Gen. Christopher LaNeve, who was formerly Hegseth's military aide, will likely be considered as a replacement. He previously served as the commanding general of the Army's 82nd Airborne Division from 2022 to 2023.

The U.S. Military Academy at West Point posted photos on social media on Thursday of George, saying he "shared experience-driven guidance with cadets preparing to lead" during a visit.

There's been some serious background controversy over the last weeks among top command ranks regarding the Trump admin's preferences:

Defense Secretary Pete Hegseth is blocking the promotion of four Army officers to be one-star generals, a highly unusual move that has prompted some senior military officials to question whether the officers are being singled out because of their race or gender.

Two of the officers targeted by Mr. Hegseth are Black and two are women on a promotion list that consists of about three dozen officers, most of whom are white men, senior military officials said.

Mr. Hegseth had been pressing senior Army leaders, including Army Secretary Daniel P. Driscoll, for months to remove the officers’ names, military officials said. But Mr. Driscoll, citing the officers’ decades-long records of exemplary service, had repeatedly refused.

As for Gen. George, he was commissioned as an infantry officer out of US Military Academy in 1988 and saw deployments in Operation Desert Shield, Operation Desert Storm, Operation Iraqi Freedom, and Operation Enduring Freedom. He later served as vice chief of staff of the Army from 2022 to 2023, before being nominated by Biden to become Army chief of staff.

Tyler Durden Fri, 04/03/2026 - 09:30

Cash Is King, Dowd Sees $10,000 Gold As The Credit Market "Is Starting To End The Party"

Tyler Durden — Fri, 03 Apr 2026 13:00:00 +0000

Cash Is King, Dowd Sees $10,000 Gold As The Credit Market "Is Starting To End The Party"

Via Greg Hunter’s USAWatchdog.com,

Wall Street money manager and financial analyst Ed Dowd of PhinanceTechnologies.com warned at the end of January that the “Credit Destruction Cycle” was showing up in something called private credit.

Dowd was worried about extreme risk in the economy, especially with all the growth in lending in the last two years coming from private credit.

Has this gotten better or worse?

Dowd says, “It’s gotten worse, and it has spread..."

"The number if credit funds that have gated their investors keeps growing. This is important because high net worth individuals, insurance companies and pension funds put millions of dollars in these private credit funds and now they want to redeem them, and there is a gate. The last two years of loan growth in the economy was from banks loaning to private credit. . .. There have been earth shaking events in private credit land. That started a cascading effect of people becoming worried about their private credit fund.

Then, redemptions started, and some funds like Blue Owl have taken massive hits. They had to gate their fund. Apollo gated their fund. Black Rock gated their fund, and KKR has gated their fund.

So, there is a lot of gating going on.

Basically, this is the beginning of the credit cycle rolling over.

This starts in the most egregious sector, which looks like private credit. . ..

So, the credit market is starting to end the party, and we are going to see this cascade throughout the whole economy.”

The Iran war just turbocharges the entire negative global scenario.

Dowd says, “You layer on top of this the Iran war and that only hastens the whole thing unless there is a quick resolution.”

Isn’t Iran getting creamed financially speaking? Dowd say:

“Financially speaking, yes, but we have no way to know what’s going on or who they are negotiating with. It’s kind of an information black hole. There is propaganda from our side and their side.

My hope is that this is resolved as quickly as possible without troops on the ground.

If we got that, and the Strait of Hormuz is opened rather quickly, there would be a rally in our markets, but the forces bearing down on the economy are going to happen regardless.

There will be a temporary relief rally, but what I am predicting is still going to roll through the system.

If there is no quick resolution, then this will hasten everything because there will be global demand destruction.

This will hasten a global recession that I see coming no matter what.”

Dowd put out a report forecasting what’s coming in 2026. Any way you cut it, not many will escape the pain, and there is a lot left to come in Dowd’s 2026 forecast. Dowd says, “I am in a very conservative mood..."

"Our call from our economic report is risk assets are going to be under pressure.

Cash is king in this scenario. . .. We think inflation is going to be coming down. Even though we call this an oil price shock, it’s not an inflation shock because demand destruction will eventually come.

Inflation will go up in the near term, but inflation will roll over as everything else will roll over price wise, especially the housing part of the CPI. That is already under pressure.

Rents have been coming down, and home prices always follow. It is now cheaper to rent a house than to own a house.

Home prices are going to come down, and that will cause a recession in and of itself.

You throw a bursting AI bubble on top of that and a Chinese economy that is going into the tank this year and you get a global recession...

...Let me remind you, private credit already started to have its problems before the war even started with Iran, and private credit is the canary in the coal mine.”

Dowd is still forecasting gold to hit $10,000 per ounce in the next few years (2030) and is also still bullish on silver long term. Dowd goes into detail about the severe problems China is facing with its economy and does not see how it can be a global financial superpower anytime soon. This is fascinating analysis on China’s financial situation that everybody should listen to. (Order the full China report here.) Like Martin Armstrong, Dowd is also a big fan of stocking up on food and water in case of supply chain disruptions.

There is more in the 47-minute interview.

Join Greg Hunter of USAWatchdog as he goes One-on-One with money manager and investment expert Ed Dowd as he explains why we are starting to see big trouble for the US economy. Dowd predicted this was coming in January with his report called “US Economy Outlook 2026.”

Tyler Durden Fri, 04/03/2026 - 09:00