Lululemon has settled its proxy fight with founder Chip Wilson, ending one of the year’s top proxy battles, according to Reuters. This follows a fiery letter to shareholders from Wilson earlier this year, calling for activism, as the athletic apparel retailer has seen its shares collapse, lost market share in the leggings market, and become entangled in multiple see-through leggings quality-control issues with customers.

Reuters first reported Tuesday evening that Lululemon and Wilson were nearing a settlement that would give him two board nominees and include a commitment to find another mutually agreed-upon director at a future date.

The agreement would give Wilson regular access to Heidi O’Neill, Lululemon’s incoming CEO, according to Reuters, which cited sources.

The dispute comes as Lululemon’s North American sales weaken, competition from Alo and Vuori intensifies, and the stock is down nearly 77% from its 2024 peak of around $500 per share.

In late February, Wilson wrote a fiery letter to shareholders, in which he said, “In support of all shareholders, I am pursuing a campaign to catalyze a quantum of change that is sorely needed at Lululemon. To effect that change, I have pursued private, constructive dialogues with the Lululemon Board of Directors (the ‘Board’) for the past few months. My attempts toward a sensible solution have not been reciprocated.”

He continued, “While we have proposed changing three directors, our strong feeling is that more than three directors should be replaced.”

Wall Street analysts tracked by Bloomberg are mostly neutral on the stock. 

Even before Chip’s public letter, we pointed out: “Lululemon’s path back to relevance in the athletic space may require a shake-up of the Board.”

Time for Chip to launch a plan to save comapny he founded in 1998. 

Summary

• Iran only having ‘indirect’ US contacts while asserting that enriched uranium is ‘off the table’ for negotiations: state TV says Tehran has a draft of the initial unofficial framework for MOU with US.
• IRGC keeping up the rhetoric: warns that Iran would “turn the area from Chabahar to Mahshahr into a graveyard for aggressors” if the ceasefire collapses.
• CENTCOM: “Clearly the Iranians are trying to hedge their bets here and put more pressure on the US.”
• Iranian president: “The main battleground today is the economic war.“
• Tabriz International Airport in northwestern Iran– which sustained heavy damage from airstrikes during the peak of the aerial bombings – is officially operational again, bringing restored airports to 20 reopened.

*  *  *

Oil Dumps on MOU Headlines

As for the status of talks, the below headlines present the latest (and noticeably absent is the enriched uranium question, or release of Iranian funds). Bloomberg summarizes: “An unofficial draft of a US-Iran interim peace deal says maritime traffic through the Strait of Hormuz can return to normal within a month of the agreement being finalized, according to Iranian state television.
It’s unclear how recent the draft, reported by IRIB News, is or whether the US has agreed to the terms.”

• Iran’s state TV says it has a draft of the initial unofficial framework for MOU with US
• According to draft MOU US military forces will withdraw from vicinity of Iran and lift naval blockade
• Iran’s state TV says in return, Iran has committed to restoring the number of commercial transit ships through Hormuz Strait to pre-war levels within one month
• Iran’s state TV says military vessels are not included in this draft agreement
• Iran’s state TV: A final agreement will be approved as a binding UN Security Council resolution if reached in 60 days.
• The Islamabad memorandum framework is still in progress, stating no action will be taken by Iran without “tangible verification.”
• If a final deal is reached within 60 days, this agreement will be approved in the form of a binding UN Security Council resolution.
• The management and route of ship traffic through Strait of Hormuz will be handled by Iran in cooperation with Oman.

Oil dumping on the headlines:

Iran Vows ‘Graveyard For Aggressors’ amid ‘Indirect’ US Contacts

Tehran is keeping the war rhetoric cranked to a maximum, but is also conceding that a return to full-scale war with the United States and Israel is ‘unlikely’ at this stage. The Islamic Republic says at this moment only ‘indirect’ contact with Washington is happening, as cited in Bloomberg.

The IRGC is seeking to dismantle any assumption that Iran is entering peace talks from a position of tactical submission. Speaking to the semi-official Tasnim news agency, Mohammad Akbarzadeh – the political deputy of the IRGC Navy – warned that any resumption of US kinetic activity would result in catastrophic casualties for Western forces.

Akbarzadeh touted that the armed forces remain at a level of total readiness, threatening that Iran would “turn the area from Chabahar to Mahshahr into a graveyard for aggressors” if the ceasefire collapses. “Our fighters today carry in their chests the urge for hand-to-hand battle with the enemy,” Akbarzadeh declared, writing off the prospect of a renewed Western assault due to what he assessed as the “weakness” of the American-led coalition.

Pentagon: Iran ‘Hedging its Bets’ in Hormuz Strait

The Pentagon has acknowledged that Iran is ‘hedging its bets’ amid Hormuz tensions:

Former CENTCOM Commander Gen. Joseph Votel said Iran’s reported effort to lay mines in the Strait of Hormuz suggests Tehran is “hedging its bets” and attempting to ramp up pressure on the U.S. amid ongoing negotiations.

“Clearly the Iranians are trying to hedge their bets here and put more pressure on the U.S., and what we saw here was CENTCOM detecting that and then taking military action to address it very, very quickly,” Votel said during a Tuesday appearance on Fox News’ “America Reports.”

Iranian source to DropSite:

“If the U.S. cannot give the money that belongs to Iran back to Iran, and the U.S. cannot put a leash on Netanyahu and stop him from going on a rampage in Lebanon, then it shows that this conflict has not ended,” Izadi says. “This is a test for Iran to see what’s going on with the other side.”

🎥 NEW: Jeremy Scahill reported this morning that Iranian officials say the U.S. has accepted Iran’s red lines in the latest revisions to the ceasefire declaration, but is asking for time to “manage domestic public opinion” before formally announcing acceptance of the interim… pic.twitter.com/Pmovw5sEKk

— Drop Site (@DropSiteNews) May 27, 2026

Enriched Uranium Not on the Agenda

And all the while Iranian leaders have continued to make clear they will not bow to the central Trump administration demand of transferring Iran’s highly enriched uranium out of the country – though there were prior unconfirmed reports that China could be an acceptable destination for some Iranian officials.

Speaking from the sidelines of an international security conference in Moscow, Ali Bagheri Kani, deputy secretary of the Supreme National Security Council, bluntly told Fars news agency: “This issue is not on the agenda of the negotiations.”

Iranian President Masoud Pezeshkian in fresh remarks is signaling that the conflict has simply migrated from an air and sea war to the global financial system.

Pezeshkian: Main Battleground Now the Economic War

Meeting with the Tehran Chamber of Commerce on Wednesday, Pezeshkian urged a structural overhaul of the country’s domestic market, calling for an immediate expansion of the private sector to act as an economic shield.

“The main battleground today is the economic war,” Pezeshkian stated, according to Tasnim. “We believe the more capable, agile, and active the private sector is, the stronger the country’s economic foundation will become, and the greater our national power will be in the face of external pressures and threats.”

Pezeshkian framed the Western shift toward sanctions and capital starvation as an admission of military failure by Washington and its Israeli ally. “After failing to achieve its objectives on the military front, the enemy has focused on damaging the country’s economic resilience and disrupting the livelihoods of the people,” the president added.

Indeed this is obviously what the US naval blockade on Iranian ports aims to accomplish, which Washington continuing to bet on some kind of mass anti-regime uprising, which has yet to materialize since the start of Operation Epic Fury.

20 Damaged Airports Across Country Reopened

To demonstrate its resolve and resiliency even while Washington tries to keep the economic chokehold on, Iranian civic workers continue to rebuild logistical infrastructure at rapid pace.

As the latest example, on Wednesday the Civil Aviation Organization announced that Tabriz International Airport in northwestern Iran- which sustained heavy damage from airstrikes during the peak of the aerial bombings – is officially operational again.

“The gateway to northwest Iran”…

According to public broadcaster IRIB, domestic technical teams managed to bypass supply chain bottlenecks to restore the facility to full service. “Tabriz Airport, which was attacked during the recent war, has now been restored to activity by Iranian specialists and will reopen on Wednesday,” a spokesperson confirmed.

Tabriz joins a growing list of critical transit hubs rushing to normalize operations, according to Al Jazeera, while state media reports state that the total number of reopened airports across the country has now reached 20. 

Authored by Aldgra Fredly via The Epoch Times,

Former President Joe Biden filed a lawsuit on May 26 in a bid to block the Department of Justice (DOJ) from releasing audio recordings and transcripts of his private conversations with a biographer that were connected to a 2023 special counsel probe into his handling of classified records.

The lawsuit, filed in the U.S. District Court for the District of Columbia, comes as the DOJ planned to release the materials to the House Judiciary Committee and conservative think tank The Heritage ​Foundation on June 15.

The materials stemmed from private conversations Biden had with ghostwriter Mark Zwonitzer in his home between 2016 and 2017 as part of the writing process for his memoir titled “Promise Me, Dad: A Year of Hope, Hardship, and Purpose.”

The book detailed Biden’s decision to run for the 2016 ​presidency while ⁠his eldest son, Beau, fought brain cancer and later passed away in 2015, according to the lawsuit.

The DOJ later obtained the materials in 2023 as part of former special counsel Robert Hur’s investigation into Biden’s handling of classified information after his vice presidency.

The probe ended in 2024 with findings that Biden had willfully retained classified materials, though no criminal charges were pursued. Hur said at the time that the evidence fell short of proof beyond a reasonable doubt.

According to Biden’s lawsuit, the DOJ initially withheld the materials under the Freedom of Information Act (FOIA) on the grounds that they were exempt from disclosure, but the department later reversed its position under President Donald Trump’s second term.

The lawsuit seeks judicial review to stop the DOJ from disclosing the materials, citing Biden’s privacy rights and the DOJ’s obligations to protect “sensitive and highly personal law enforcement information.”

“Every American, including a sitting or former Vice President, has a right to privacy in the personal conversations he has within his own home,” the lawsuit stated.

“And when the U.S. Department of Justice obtains that private information through a criminal investigation, the department bears a particular responsibility to protect it from disclosure.”

The Epoch Times reached out to the DOJ for comment, but did not receive a response by publication time.

Biden has earlier sought to intervene in the Heritage Foundation’s lawsuit against the DOJ over the materials. ⁠Last ​week, a judge allowed Biden to join ​the case but barred him from pursuing claims about the committee’s request for the materials, ​according to court records.

Oversight Project, a legal advocacy arm of The Heritage Foundation, said on May 11 that the public deserves access to the materials and called for full transparency regarding Hur’s 2023 probe.

“President Biden revealed classified information and was not prosecuted,” Oversight Project President Mike Howell said in a statement, adding, “These tapes will further prove the massive lie regarding Biden’s fitness for office and the fact Biden revealed classified information.”

The breathtaking rally in South Korean stocks hit a couple of key milestones overnight.

The benchmark Kospi index at one point in the session was up 100% for 2026, rivaling the Nasdaq 100 Index’s 102% surge in 1999 – right before the bubble burst…

Samsung (005930) was up 2.7% and SK Hynix (000660) soared 9.3% rallying to new record highs mainly on three things:

1) overnight backdrop of SOX +5.5% driven by MU +19% strength,

2) launch of leveraged ETF instruments including 14 products that track 2x the return, and 2 inverse products that track -2x the return of SEC(005930) and SK HYNIX(000660), and

3) reports of SEC’s union members voting in favor of a compensation deal and separately, that SK Hynix is making efforts to strengthen its long-term supply agreements via more favorable terms such as higher prepayment and ultra-long tenors of five years or more.

Flow-wise, foreigners extended their net-selling streak in SK HYNIX to 14 consecutive days, selling -$156mn today, while they’ve also ended as marginal net sellers in SEC (-$54mn).

Local instos were net buyers in both names, as they added +$928mn in SK HYNIX and +$330mn in SEC, while retail investors profit-took in both names (-$723mn in SK HYNIX and -$240mn in SEC).

The market value of memory-chip maker SK Hynix surged above $1 trillion for the first time as investors bet the AI boom will lead to a sustained revaluation of the industry.

Both now larger than Berkshire and Eli Lilly.

Both Hynix and Micron stocks have 10x over one year…

In the fourth quarter of 2025, SK Hynix controlled 57% of global HBM market share by revenue, Counterpoint Research’s data show. Samsung and Micron followed with 22% and 21%, respectively.

As Bloomberg’s Phill Serafino reports, SK Hynix and Samsung account for almost three-quarters of the Kospi’s gains this year as customers who are building data centers clamor for high-bandwidth memory chips.

(US producer Micron also reached a $1 trillion value yesterday.)

Despite that, almost half of the stocks in the Kospi are down for the year.

The index trades at less than half the earnings multiple of the S&P 500, attracting bargain-hunting hedge fund managers.

Even with their rapid ascent this year, SK Hynix shares trade at about seven times one-year forward earnings, compared with 27 times for the Philadelphia Semiconductor Index.

“Judging by earnings power alone, it’s difficult to predict a near-term peak,” said Cha So-Yoon, an equity investment manager at Taurus Asset Management in Seoul.

“Even if investors don’t assign Big Tech-style multiples of 20 times, many are eyeing up to 10 times earnings as a near-term upside.”

“Memory chipmakers have been irrationally undervalued, but we are now seeing the trend of recovery in their valuation gap,” said Kang DaeKwun, chief investment officer at Life Asset Management in Seoul.

“We are still at the early stage of the rally.”

The undervaluation persists despite government efforts to push companies to improve shareholder returns and modernize governance.

The market is still bogged down by its legacy of family-controlled business empires with complicated issues tied to cross-shareholdings and high inheritance taxes.

The ultimate goal of the Korean government and regulators is to win developed-market status from index provider MSCI, a shift that could fuel another leg higher for the market.

Perhaps most strikingly, another emerging spillover channel from the AI boom is fiscal – taxes from highly profitable tech equipment manufacturers are filling government coffers, creating more flexibility to spend or pay down debt.

Goldman Sachs estimates that South Korea will see a fiscal windfall of about 5pp of GDP this year.

Despite the euphoria, some analysts are concerned that the surge may not prove to be durable.

The rally is built on the assumption that earnings will increase at an astronomical pace, and any easing of supply bottlenecks or slowdown in AI capital expenditure could lead to reversals.

Global stocks pushed higher on Wednesday as momentum in AI and memory chips fueled a continued risk-on rally. The MSCI All Country World Index, South Korea’s Kospi, and Japan’s Nikkei all hit record highs.

The rally was led by chip stocks, with SK Hynix and Micron’s market values topping $1 trillion for the first time. Sentiment from Tuesday into Wednesday was fueled by a bullish note from UBS analyst Tim Arcuri on Micron, which ended 19% higher in the US.

Sentiment on Wednesday was boosted after Samsung’s largest union approved a labor deal that gives chip workers an average bonus of roughly $340,000, avoiding what could have been a devastating strike that might have disrupted the global memory chip supply chain amid historic demand from data center buildouts.

Samsung and its labor union have buried the hatchet and signed a new wage agreement earlier today. This means the company will not face any chip production disruption.

The signing ceremony took place earlier today at Samsung Electronics’ The UniverSE learning center in Giheung,… pic.twitter.com/XIybSV0Cdg

— SamMobile – Samsung news! (@SamMobiles) May 27, 2026

Nikkei Asia reported that the labor deal signed earlier this morning set aside 10.5% of the company’s operating profit for the worker bonus pool.

Nikkei Asia outlined four important facts of the wage deal that averts chip strikes: 

Who gets what?

Under the terms of the agreement, the bonus will be paid to 78,000 employees in Samsung’s device solutions division, which produces all types of semiconductors.

Employees in the memory business unit are expected to reap the biggest share, as they generate the largest portion of the company’s profits. Assuming Samsung’s memory business unit reports 200 trillion won of operating profit this year, its employees are expected to be paid an average bonus of 600 million won in the form of company shares in January 2027.

They can sell one-third of those shares immediately. But they must hold one-third of them for at least a year and the remainder for two years.

Other units, meanwhile, will be paid far less. For instance, employees in the foundry unit, which produces contract chips for outside customers, are expected to get bonuses of 200 million won each. The same rules as for the device solutions business apply.

Is this bigger than SK Hynix’s bonuses?

Samsung rival SK Hynix faced — and resolved — a similar dispute with its own workers last year. The company said it plans to use 10% of its 2026 operating profit for bonuses to be paid early next year. Employees can choose to take the payments in cash or company shares.

An average SK Hynix employee can expect a bonus of about 400 million won, assuming, based on first-quarter results, the company posts 140 trillion won of operating profit this year. But with brokerage houses expecting an even bigger full-year profit figure, its bonus payments could end up topping Samsung’s.

As a leading supplier of high-bandwidth memory chips for AI computing, SK Hynix has ridden the artificial intelligence boom to record profits and a trillion-dollar valuation. Samsung’s union even cited its rival’s success when presenting its case to management for bigger bonuses.

Who’s unhappy with the deal?

While Samsung’s semiconductor workers are expected to enjoy fat bonuses, their counterparts in the device experience, or DX, division, which produces smartphones, TVs and home appliances, are being left with comparatively tiny bonuses. They will receive just 6 million won in special payments, also in the form of company shares.

A small union representing them had filed a court petition to try to block the deal as DX workers were left out of Wednesday’s agreement. But the court rejected their claim, saying it respected the bigger unions’ right to negotiate with management.

What could the deal mean for South Korean labor policy?

The Samsung unions’ victory in winning such a large bonus could increase pressure on the government to create systems for workers in more fields to negotiate for a share of profits, though the effects of such arrangements could be limited to a small number of industries.

The Federation of Korean Trade Unions expressed hope that the Samsung deal “will serve as the starting point for serious discussions on ‘growth through shared gains.'” It called on the government to establish “fair distribution mechanisms so that the enormous productivity gains and profits generated are not concentrated in the hands of a few.”

Corporate groups, however, were quick to point out that the situation at Samsung is a unique case of an industry in the middle of an exceptional boom. “Labor should not generalize this and spread excessive demands for incentives across industries,” the Korea Enterprises Federation said in a statement.

The case is not likely to spur policy changes or have broad ripple effects throughout the economy because most industries do not generate the massive profits currently being logged at major chipmakers, said Lee Byoung-hoon, a professor at Chung-Ang University. “There is only a small number of companies that can pay these kinds of huge bonuses, like semiconductors or shipbuilding or automakers,” Lee told Nikkei Asia.

“So negotiation of these big bonuses will be a big issue, but it will apply to only a small portion of the workforce in [South] Korea,” Lee said.

Last week, we noted that the sudden wealth effect of the AI memory boom has spurred some Samsung and SK Hynix workers to panic-buy Ferraris and other exotic sports cars.

Meanwhile…

• Korean Bubble Mania: Retail Investors Max Out On Margin Debt, Choose To “Risk Complete Collapse” Than Miss Stock Rally

The AI bubble continues to inflate into late spring, soon to be early summer, with global risk appetite and chip momentum showing little evidence of being derailed by the US-Iran war, at least so far.

Submitted by Thomas Kolbe

Regulation follows regulation. On August 12, the so-called EU Packaging and Packaging Waste Regulation (PPWR) will enter into force, reorganizing the recycling framework for packaging across Europe. Adopted last year, the regulation becomes binding for all EU member states and companies on August 12 and, as an EU regulation, does not require transposition into national law. The PPWR will replace the current patchwork of national packaging recycling laws with a unified framework for the EU single market. Until then, Germany’s existing Packaging Act (VerpackG) remains in effect.

Brussels always tells the same story: regulation is supposed to strengthen the European single market and harmonize economic and environmental objectives. A beautiful narrative — especially for those who stand to profit from it. Similar dynamics have already emerged in other sectors, such as carbon emissions trading. In the end, compliance costs for affected businesses rise, the bureaucratic apparatus expands through new control and sanctioning mechanisms, and the overall economy loses competitiveness.

According to the European Commission, the goal of the regulatory push is to ensure that by 2030 only recyclable packaging materials circulate within the EU economy. The regulation aims to reduce packaging waste, increase corporate recycling quotas, and firmly embed the circular economy into a binding legal framework. The PPWR is one of the building blocks of the Green Deal, which seeks to lead the EU economy toward a carbon-neutral future through an increasingly detailed and expansive regulatory architecture covering national recycling efforts as well as sector-specific initiatives.

Brussels’ regulatory activism offers repeated insights into the logic of bureaucratic systems. Such systems develop a kind of life of their own and an inherent drive to acquire ever more competencies and powers — an evolutionary struggle for institutional survival that gradually eliminates any meaningful feedback loop with the economic system bureaucracy claims to regulate. This recurring process has consequences: increasingly detached from business realities, ideologically driven compliance pressure continues to mount across affected sectors. As a result, adaptation, documentation, and implementation costs require businesses to devote ever more resources simply to satisfy regulatory demands.

The biggest burden imposed by the new regulation will fall on companies selling goods across borders without maintaining their own local branch offices in destination countries. The PPWR forces such firms to hire local authorized representatives or specialized service providers to manage registration, documentation, and communication with local authorities in detail in order to oversee the packaging recycling process. The regulation is structured in such a way that there is practically no possibility of integrating these requirements into normal business operations without significant bureaucracy and expense.

The EU is thereby creating yet another artificial compliance market. It generates business opportunities for consultants and service providers that would likely not survive in a truly free market. This development is already familiar from the ever-expanding climate regulation architecture. And, as is typical with excessive bureaucracy, large corporations with their own branch networks naturally enjoy major cost advantages over smaller niche businesses, which must now spend substantial time, money, and personnel building compliance networks of their own. None of this resembles an integrated European single market anymore. The economy increasingly serves as a playground for the ideological fantasies of an ever-growing class of officials.

What we are witnessing here is a fundamental ideological, administrative, and political problem. The packaging regulation fits into the broader structure of intrusive, hyper-detailed, and sanction-heavy regulation from an authority that no longer recognizes the signs of the times — namely the economic crisis that its own policies have helped fuel. Germany’s annual bureaucratic burden is estimated by the ifo Institute at roughly €146 billion in direct and indirect costs — an absolute disaster for the country as a business location. Moreover, this policy of micromanagement stifles innovation in materials, logistics, and recycling technologies, and will ultimately deliver worse outcomes at far higher cost than a free market would.

Petty, exhausting, and expensive, Euro-bureaucracy is steadily eroding Europe’s competitiveness and turning private-sector investment into a gamble. The idea of the free market — namely that consumer demand for cleaner and more environmentally friendly production and logistics can be expressed through competition itself, one of civilization’s greatest achievements — appears to have largely vanished within today’s EU.

In contrast to competing jurisdictions such as the United States, which are lowering compliance costs through deregulation, Europe’s misguided trajectory becomes especially obvious. One final statistic illustrates the scale of the problem: according to an analysis by the Institute for Employment Research (IAB), German businesses alone have had to dedicate roughly 325,000 additional workers over the past three years simply to manage growing bureaucratic requirements.

These are staggering figures that reveal the true scale of Euro-bureaucracy. And at present, it does not appear that opposition forces are strong enough to divert the EU from its current path away from market economics and toward state management and ever-expanding bureaucracy.

* * *

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

According to Czech President Petr Pavel, a full half of the Kiev-supporting Western coalition has quietly abandoned Prague’s flagship initiative to jointly procure artillery ammunition for Ukraine’s military.

Pavel said that while 18 countries participated last year, only nine are still making financial contributions now. “This initiative has been delivering up to 50 per cent of all large caliber ammunition to the Ukrainians, so in this sense it cannot be replaced easily by anything else,” the FT on Tuesday quoted the Czech president as saying.

It’s unclear precisely which precise countries have dropped participation, but reports indicate that Germany and some Scandinavian countries remain involved.

But the program is now teetering on life support as donor fatigue morphs into outright abandonment, and also as the Ukraine conflict has mostly slipped from driving world headlines, as attention has turned to the US-Israeli war in Iran instead, alongside the Hormuz Strait standoff and global crude crisis.

When Pavel first launched the initiative in 2024, 18 countries – including Canada, Denmark, Germany, and the Netherlands – enthusiastically led the way and jumped on board.

But he conceded this week, “The initiative is still working, but the new difficulty is that only about nine member states are contributing financially.”

NATO officials have confirmed to Reuters that as of February, the scheme had only managed to crawl to €1.4 billion ($1.62 billion) in total funding, which is less than a third of the €5 billion Pavel originally projected. 

Ukraine has struggled with persistent artillery deficits since early 2022, while Russia has been well supplied, and its frontline forces are able to fire at many times the rate of Ukrainian artillery units.

As for the Czech program, which involved officials scouring the globe to source immense supplies of badly needed artillery shells, one Western official bluntly told the Financial Times: “Some countries now feel that it is strange to pay for something that is not even properly supported by the ruling politicians of the lead country.”

But even as ammo efforts fall short, there’s also been little appetite for getting the warring sides to the table once again, as diplomacy has long taken a backseat to finding a ‘battlefield solution’.

Submitted by Thomas Kolbe

The German federal government and municipalities are the major fiscal losers of 2026. The partly dramatic collapse in tax revenues reveals two things: the transformation disaster is staggering toward its end, and citizens are being squeezed by the state like lemons until the very last moment.

No matter how you spin it, the tax party of Germany’s welfare-state engineers is over. In the first four months of the year, Germany’s total tax intake developed into a fiscal catastrophe. During that period, the federal government, states, and municipalities collected 2%  less revenue than a year earlier.

At first glance, that may sound unspectacular. In reality, however, it marks a turning point. Until now, complaints from German budget politicians merely reflected disappointment over slower growth in tax revenues – never an outright decline in state income. That has apparently changed.

Every social welfare system – and with it the entire state apparatus – has been structured around the assumption of disproportionately rising tax revenues. Where this ultimately leads can be seen in the spending behavior of the federal government. Berlin has maneuvered itself into a self-reinforcing spending spiral. The rules of prudent bookkeeping, once considered binding even for political leaders, have been discarded in the stampede of the new socialism. Federal expenditures are now increasing at an annual rate of more than 5%. Yet the federal government itself has suffered an 8.3% decline in tax revenues compared with last year.

Rightly so: decadent excess must eventually be punished. Or put differently: Finance Minister Lars Klingbeil is not merely overwhelmed by his responsibilities – he is a political gambler, much like his chancellor, a reckless counterfeiter intoxicated by delusions of political omnipotence and state-engineered possibility.

A look under the fiscal hood reveals the real damage. The dramatic collapse in tax revenues is especially visible at the municipal level. Treasurers across Germany are fighting on the front lines against the consequences of the destructive ideology of the green transformation. They are the first to notice how industrial zones are emptying out – a process that has accelerated in former industrial centers where Germany once dominated global markets in automobiles, machinery, and chemicals. Now those same regions are watching their municipal revenues implode.

The consequences are severe: in the first four months of the year, total municipal tax revenues fell by 20.4%. The permanent economic depression is destroying the business tax base — the fiscal anchor of local government finances – and is virtually forcing Berlin into additional bailout measures to stabilize municipalities.

At least we now understand the true purpose of Germany’s gigantic “special fund”: it was merely the first massive bridge loan, and many more will undoubtedly follow. The cognitive dissonance is pathological. Within the ranks of the CDU, SPD, Greens, Left Party, and FDP, politicians still believe they can somehow reach the promised shores of green utopia. Transformation has become a psychological crutch, an excuse for catastrophic failure. Even after the high priests of climate ideology quietly abandoned their own apocalypse rhetoric, Germany’s political establishment remains on course.

All that is supposedly needed is more time, more fear-driven behavior modification of citizens, and a fresh flood of debt. That is the narrative. How badly they miscalculated.

Without a functioning economy there are no taxes. If Germany’s political class retained even a rudimentary connection to economic reality, the conclusion would now be obvious: the state must adapt to new economic conditions. The fantasy that Germany can operate as a global welfare office has failed. Equally disastrous is the military-political experiment of financing a proxy war against Russia. And Germany’s remilitarization – currently costing roughly €110 billion annually, or 2.5% of GDP – will likewise crash against the cliffs of economic reality.

With almost visible pride, Finance Minister Klingbeil recently announced that Germany would require an additional €800 billion in debt by 2030 to achieve the coalition’s ambitious political objectives. Quite apart from the fact that these goals are driving the country and its economy into chaos, the real figure will likely exceed €1 trillion merely to keep this decaying ship afloat.

Could it be that Merz and Klingbeil are becoming intoxicated by debt itself? That the debt crisis merely provides the pretext for imposing new taxes on Germany’s middle class and effectively expropriating it? Hatred toward the native population increasingly appears to be the glue holding this catastrophe coalition together, as Labor Minister Bärbel Bas recently demonstrated. For political figures like Bas, the German population is little more than a faceless “uniform brown mass,” a chapter of history to be closed – and the worse conditions become, the more ruthlessly the tax hammer will fall.

The direction of future tax policy is already visible in the states’ revenue figures. Thanks to an 8% increase in real estate transfer taxes – effectively a tax on accumulated substance – Germany’s sixteen state governments were still able to post a combined 2.4 percent increase in revenues between January and April.

Debates over expanding inheritance taxes on business assets, along with renewed attempts to introduce a wealth tax, reveal the strategy clearly: the political class intends to compensate for its own failure by extracting the economic substance of Germany’s middle class. The first step in this confiscatory process was the restructuring of property taxes. Homeowners are the initial victims, trapped by the very immobility of real estate itself.

Payroll tax revenues – critical for every level of government – have so far remained relatively stable despite the growing weakness of the labor market. But Berlin and the state governments should not become overly optimistic. The loss of half a million jobs in the first quarter of the year should be interpreted as the first lightning flashes of a much larger crisis approaching on the horizon.

So far, the fiscal consequences have merely been delayed by inflation, the stealth taxation of bracket creep, and higher levies such as the CO2 tax. That delay, however, will not last forever.

* * *

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

Aluminum prices in London are up nearly 17% since the onset of the U.S.-Iran conflict, as a growing chorus of top commodity desks, including Mercuria, Goldman, JPMorgan, and others, warn that the market is facing a major supply shock.

That disruption, driven firstly by Middle East smelter outages and the Hormuz maritime chokepoint, is now colliding with new concerns that China may be forced to curtail output amid energy-use and emissions inspections, according to Bloomberg. 

More color from the report:

Chinese authorities are now moving to rein in that over- production as inventories swell. A smelter in Baise, Guangxi province, has already cut output of molten aluminum, Mysteel wrote, without providing estimates of volumes affected. The steel and oil refining industries will also be targeted, the Ministry of Industry and Information Technology said in a statement on May 13.

Building on production cut risks in China, as it is the world’s biggest producer, there is another report from Bloomberg that Guinea, the world’s largest bauxite producer, is preparing to limit exports of the ore, threatening flows to China’s aluminum industry.

Mines and Geology Minister Bouna Sylla told the outlet that the West African nation will dial back bauxite exports in June after a surge in exports sparked a price slump that the government wants to correct.

“Supply mustn’t exceed demand,” Sylla said. “We want to regulate the quantity to raise prices back to reasonable levels.”

For context, most of Guinea’s bauxite is loaded on bulk carriers and shipped to China, where it’s first refined into alumina, then turned into the industrial metal aluminum. 

The complexity of the aluminum supply shock extends well beyond Gulf disruptions, as we outline in this note, which is why prices in London are trading around $3,673 a ton, the highest since March 2022.

JPMorgan analysts recently warned that the industry is descending into a black hole, or a “metaphorical point of no return,” where the “global aluminum market will face a serious and prolonged supply outage,” even if vessel flows through the Hormuz chokepoint resume in the near term.

Additional market warnings:

• Mercuria, Goldman, JPMorgan See Major Aluminum Market Shock

The great aluminum squeeze is underway. Prices are likely going higher.

Authored by Lawrence Franklin via The Gatestone Institute,

The widened scope and quickened pace of the Islamic State’s military operations in the Sahel region — just below North Africa, roughly from Senegal to Sudan — threatens to alter the strategic orientation of the African continent. Efforts at countering terrorist operations in the Sahel, such as they were, have evidently failed. As all roads to Mali’s capital of Bamoko are now blocked, that country might be the first state to “go under.”

On April 25, during a coordinated attack on several Malian cities, Muslim terrorists killed the country’s Minister of Defense. The terrorists then drove the Malian Army and its allied Russian mercenaries out of the country’s north.

The military juntas ruling Mali, Burkina Faso and Niger have proven themselves as ineffective at combatting Islamic terrorist operations as the democracies that they overthrew. The increasing terrorist assaults across the Sahel and the jihadists’s determined efforts to take over Mali, Burkina Faso, and Niger have eroded the sovereignty of these states.

The combat successes of the jihadists in the Sahel in March 2022 precipitated their elevation to the status of “Islamic State Sahel Province” within the hierarchy of the IS, and several other factors have facilitated the growth of the jihadist advance in the Sahel.

The cooling of the once global counterterrorist crusade — following an apparent shift in focus by the world’s great power rivalries, as well as fewer resources directed against the terrorist problem — left a vacuum that was adroitly filled by jihadist groups, which has reduced the pressure on Islamic State and Al Qaeda regional affiliates.

Another situation that might have impacted negatively upon the Sahel’s overall security is the monumental migratory flow of Africans from sub-Saharan countries who pass through the Sahel to the Mediterranean, and the consequent stress this puts on the Sahel economies.

A third force eroding state sovereignty of Sahel countries is warfare waged by Al Qaeda terrorist affiliates that are rivals of the Islamic State, such as the Jama’at Nusrat al-Islam wal Muslimin (JNIM). JNIM also coordinates attacks with the Malian anti-government militia known as the Azawad Liberation Front.

Jihadist violence has become ubiquitous in the Sahel, and recently expanded to include fighting between Islamic State and Al Qaeda. On April 2, a notable clash between these two rival terrorist networks occurred in western Niger.

The Sahel now appears to be the epicenter of global terrorist violence. Sahel’s terrorist groups might also be acquiring confidence that they can achieve permanent and more ambitious goals in the near future.

Islamic State units have also been exploiting the deteriorating security situation in the Sahel and in Nigeria’s northeastern states, which are already governed under Islamic sharia law. Islamic State probably feels buoyed by its easy success in recent battles with the Nigerian Army.

On April 25, Al Qaeda terrorists conducted simultaneous attacks against several Malian urban areas. Their success might well tempt jihadist fighters to move into major urban areas in northern Nigeria and elsewhere in the Sahel.

An additional worrisome trend indicates that terrorist violence is moving westward to Africa’s Atlantic coast.

State control increasingly is being eroded in the Sahel region, despite multilateral efforts to sustain the sovereignty of several states in the Sahel, such as the Multi-National Joint Task Force (MNJTF) consisting of Chad, Nigeria, Benin, Cameroon, and, until last year, Niger. The MNJTF had made significant strides in halting the advance of the Al Qaeda-affiliated Boko Haram terrorist group, particularly in Chad, but recently the overall scorecard is less conclusive.

The MNJTF is sustained mostly by the continent-wide Organization of the African Union (OAU). While the MNJTF originally planned to field a 10,000-member OAU army, insufficient air cover, poor communications, and logistical problems have reduced the organization’s effectiveness.

Another multinational group — the “G5 Sahel” of Mauritania, Burkina Faso, Chad, Mali, and Niger — proved ineffective after its 2014 launch. Beset by bureaucratic problems, military coups, and lack of adequate commitment by member states, it dissolved in December 2023.

France, the former colonial “mother country” of several Sahel states, has also made a valiant effort to contain the region’s Islamist threat. Acting on behalf of a Malian request for military support, France in 2013 dispatched troops to northern Mali in “Operation Serval.”

After substantial success, France, along with UN political support, launched “Operation Barkhane” in 2014 to combat Islamist terrorist activity in the Sahel region. The mission ended in 2022, however, when, following military coups, three Sahelian states asked the French to leave. Later, these same three states invited assistance from Russian mercenaries, which has not resulted in any permanent progress on the battlefield.

With the advance of Islamic terrorist control over ever wider swaths of the Sahel, in recent years, US Special Forces teams have been operating in Niger. On October 4, 2017, this deployment resulted in the killing of four US soldiers and a score of Nigerien soldiers in an ambush staged by “Islamic State in the Greater Sahara.” More recently, US national security priorities elsewhere seem to have resulted in a diminution of American military involvement in the Sahel.

The steady advance of Islamic terrorist control over territory in the Sahel could soon threaten the sovereignty of West African states on the continent’s Atlantic Coast — just across the ocean from Latin America and the United States.

It is past time for the US to take action to protect not only the vast natural resources in the area, but also to stop even more of Africa from being swallowed up by this expanding jihadist takeover.