Bessent And He Lifeng Open High-Stakes Trade Talks Ahead Of Trump-Xi Summit
Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are meeting Chinese Vice Premier He Lifeng at JPMorgan Chase’s Manhattan headquarters on Sunday for a critical round of trade negotiations. The all-day session marks the final ministerial push before President Donald Trump hosts Chinese President Xi Jinping in Washington beginning September 24.
JPMorgan is not involved in the negotiations, though Bessent previously invited CEO Jamie Dimon to speak at a Treasury-hosted G20 finance leaders meeting in Asheville.
This negotiating channel previously engineered the Busan truce, which capped bilateral duties near 20 percent after reciprocal tariffs spiked into triple digits. The administration has since rebuilt its tariff structure under alternative statutes, while broader excess-capacity tariffs remain paused until after this week’s summit. The existing truce expires on November 10, adding urgency for both sides.
The Core Negotiating Agenda
Three primary issues dominate the current talks, alongside geopolitical tensions over Taiwan and Iranian oil:
Rare Earths and Critical Minerals: Beijing committed in Busan to resume shipments of critical materials, but a senior U.S. official noted that China’s performance has fallen short. Disruptions to these supplies significantly impact global manufacturing and technology. Beijing holds the leverage of offering more export licenses but has yet to restore pre-restriction volumes.
Artificial Intelligence: Negotiations will cover both open-weight and proprietary closed-weight AI models. Low-cost Chinese open-weight systems are increasingly adopted by U.S. developers, prompting Washington to push for bilateral guardrails against misuse by non-state actors while avoiding a complete bifurcation of the tech ecosystems.
Unresolved Trade Commitments: Negotiators are revisiting items left hanging from Trump’s May visit to Beijing. This includes efforts to reduce tariffs on non-sensitive goods, finalize Chinese agricultural purchases, and address proposed U.S. tariffs linked to industrial overcapacity and forced-labor concerns.
Broader geopolitical issues continue to shadow the economic track. The conflict involving Iran and its impact on energy supplies has emerged as an unexpected major pressure point in the talks. Additionally, Washington continues to monitor the flow of fentanyl precursor chemicals from China, which will likely feature heavily in the main summit.
Expectations and Market Impact
The likelier outcome is diplomatic management rather than a major structural pact. Both administrations have a strong interest in avoiding a renewed escalation of trade tensions and preventing the Busan framework from falling apart before November.
Markets will look for any formal extension of the November 10 date, verified increases in magnet export permits, and whether agreements on AI guardrails contain binding terms.
This week marks the eighteenth anniversary of the failure of Lehman Brothers, a key event of the 2008 global financial crisis (GFC). Lehman’s failure and the GFC more broadly were dramatic economic events. Lehman Brothers was the largest bankruptcy in US history to date. The global financial crisis gave rise to the Great Recession. The stock market fell by more than 50 percent, the economy contracted by 4.3 percent, unemployment rose from 4.7 percent to 10 percent, and the subsequent decade of US economic growth was abnormally anemic.
Many myths about Lehman’s failure and about the 2008 global financial crisis continue to dominate public discourse. Popular consensus still places the blame primarily on deregulation, Wall Street greed, and reckless financial engineering. And many anecdotesinform their perspective.
Mortgage fraud was common and egregious, especially in the final few years of the housing frenzy (2004-2007). No-doc loans, NINJA loans, and liar loans were far too common – and most people were not held accountable for their complicity. Accusations of fraud by large banks and credit rating agencies, though, were largely overstated. Other than a couple big mortgage lenders engaged in systemic fraud (Countrywide) or truly reckless lending (Golden West), most financial institutions operated on the right side of the law.
The real driver of the GFC was pervasive bad incentives created by years of misregulation. Consider, for example, the Federal Reserve’s RecourseRule. This regulated how much capital banks had to hold against different classes of assets, and strongly favored mortgage-backed securities (MBS). Not surprisingly, banks shifted their portfolios to hold more MBS – one of the major asset classes to blow up in 2008. Regulation created this herd-like behavior, leading to overconcentration in a certain asset and greater systemic fragility.
Simultaneously, more than a decade of regulatory pressure forced Fannie Mae and Freddie Mac to lower their underwriting standards – a shift that soon infected the entire industry. The Community Reinvestment Act, federal agencies, and the Department of Housing and Urban Development all pushed for reduced mortgage underwriting standards. More people were able to buy a home – even if they couldn’t afford it.
Peter Wallison and Edward Pinto document this regulatory transformation. Far from a market-driven “race to the bottom” by private lenders chasing short-term profit, housing regulators in the early 1990s viewed traditional underwriting standards as discriminatory barriers to homeownership. Using the 1992 Housing and Community Development Act, the Department of Housing and Urban Development mandated affordable-housing quotas for Fannie Mae and Freddie Mac – requiring them to allocate an ever-increasing share of their support to low- and moderate-income borrowers, starting at 30 percent in 1992 and climbing to 56 percent by 2008.
To achieve these goals, Fannie and Freddie systematically dismantled traditional underwriting guidelines. The conventional mortgage market consisted of 30-year fixed-rate loans requiring 20 percent down payments, fully documented borrower income, and high credit scores. These mortgages were remarkably stable and had very low levels of defaults.
But by the mid-2000s, this underwriting standard had been replaced by loans with less than 10 percent down payments, adjustable interest rates, and lower FICO requirements. As Pinto later argued in a report to the Financial Crisis Inquiry Commission, roughly 27 million US mortgages – half of the entire market in 2008 – were high-risk, non-traditional loans, with government-backed agencies holding or guaranteeing the vast majority of them.
The otherwise laudable goal of increasing access and affordability led to higher housing prices and degraded the quality of mortgage finance, which then made its way onto bank balance sheets. Misregulation didn’t stop once the crisis began – the same instinct to override market signals with discretionary judgment, which had already reshaped underwriting standards for a decade, next reshaped the government’s response to the panic itself.
Government interventions meant to “fix” the market made things worse. Lehman’s failure was certainly a blow to the market, but not as much as some people make it out to be. The S&P finished fractionally higher the Friday after Lehman’s failure than it had the Friday before – most of the stock market decline came weeks later in October following further government interventions.
Two previous government actions that made Lehman’s bankruptcy more disruptive than it needed to be. In March 2008, government officials brokered a bailout for Bear Stearns. This created a moral hazard in which Lehman executives rejected acquisition bids from interested investors and delayed deleveraging their mortgage portfolios, likely in the expectation that they would receive a deal, too. Federal officials’ last-minute attempt to rescue Lehman left the firm unprepared for its complex Chapter 11, resulting in a chaotic bankruptcy that destroyed wealth and froze counterparties worldwide.
Lehman’s failure highlights the broader problem in 2008: discretionary and reactionary government actions meant to dampen the GFC unintentionally made it worse. They created uncertainty and panic. Consider how the Troubled Asset Relief Program (TARP) required all major banks to take bailout money even if they didn’t need it. Treasury Secretary Paulson didn’t want investors and lenders to identify and dump the weakest banks.
Yet this badly misjudged the market. Most lenders and investors had a pretty good sense of which banks were in trouble already. Forcing healthy institutions to take TARP funds signaled that contagion was deeper and more systemic than feared, accelerating capital flight from the banking sector.
Government officials also created perverse incentives by bailing out some firms early while letting others fail. If there is one thing worse for markets than bad news, it is uncertainty. And the Bush administration created deep market paralysis with its inconsistent, and often panicked, interventions in financial markets in 2008. Ordinary Americans paid the price then and are still paying the price today, in the form of greater government distortions of financial markets.
The Federal Reserve still holds nearly $2 trillion of MBS, an asset class it bought, and continued to buy, due to the “emergency” 18 years ago. More problematic, though, is that the GFC shook people’s confidence in markets and in a free economy. The drive for broader government assistance programs on both sides of the political aisle has been fomented in part by the calamity of the GFC. Subsequent asset bubbles fueled popular cynicism about cronyism in the financial system.
The institutional memory from 2008 was on display in 2020 and 2021, when both the Federal Reserve and two different administrations turned on spigots of government spending, lending, and economic stimulus – resulting in the elevated inflation we face today. Nearly a quarter of the dollar’s value has vanished since 2019.
If there is one thing we should learn from the 2008 GFC, it is that discretionary government interventions tend to generate negative unintended consequences. Even more importantly, we should view calls for more regulation, whether of cryptocurrency, stablecoins, energy production, or data center construction, with a skeptical eye.
Individual rules that may seem to make sense on paper can create perverse incentives, especially when they come stacked on top of other regulations. Unintended regulatory synergies generate herd-like behavior. Precisely the opposite is required for the decentralized experimentation that drives economic resilience.
Ukraine Pounds Major Moscow Refinery As Global Diesel Crisis Threatens Economic Shock
Military conflicts, economic wars, and resource wars are converging ahead of the Northern Hemisphere winter.
Export restrictions on critical materials and energy products are adding economic pressure worldwide, raising the risk that supply disruptions and retaliatory measures widen existing conflicts. With no clear path to de-escalation, the potential for spillover from active war zones remains top of mind.
The most pressing news so far this morning is that Ukraine launched a major overnight drone strike on Russia, hitting a Moscow refinery despite President Trump’s request for Ukraine to stop striking Russian energy infrastructure as a global refining crisis deepens.
Bloomberg reports that the Gazprom Neft-owned Moscow Oil Refinery, about 16 miles from the Kremlin, was struck by drones. The facility has a processing capacity of around 245,000 barrels a day and supplies fuel to the surrounding metro area.
Ukrainian President Volodymyr Zelenskyy wrote on X, “One of Russia’s key oil industry facilities and the aggressor’s logistics facility were hit. These are billions of dollars that sustain the war machine. The systems used included FP-1, RZ-100, MICH-2000, Palianytsia, Vendetta, Liutyi, Bars, Flamingo, Sichen, and Pelican.”
Our long-range responses had a very significant impact in the Moscow region last night. One of Russia’s key oil industry facilities and the aggressor’s logistics facility were hit. These are billions of dollars that sustain the war machine. The systems used included FP-1, RZ-100,… pic.twitter.com/ka5mlDSgb7
— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) September 20, 2026
Last week, diesel futures and refining spreads climbed to record highs as worsening supply disruptions in the Gulf and Russia tightened availability of the industrial fuel that powers the global economy.
Potential export restrictions, or extensions of existing restrictions, are compounding the squeeze. A report on Tuesday said Moscow was considering extending its diesel export ban, while Senate Majority Leader John Thune told reporters that day he was “open to exploring” a US diesel export ban.
The squeeze was even more severe in refining spreads. The US heating oil crack, which measures the difference between fuel and crude prices, surged to $117 a barrel on Wednesday, the highest level in Bloomberg data going back to 2009.
Bloomberg Intelligence senior commodity strategist Mike McGlone has warned that the diesel price shock echoes similar moves in gasoline during the 2008 energy shock.
The military-technical developments there aim to greatly mitigate Russia’s nuclear second-strike capabilities via the Golden Dome in parallel with posing an unprecedented fifth-generation aerial threat via the F-35As that’ll outmatch Russia’s Su-57s by 10:1 without the US and 35:1 if it’s included.
RT reviewed the 2026 Russian Military Yearbook, which is sponsored by the state arms company and meant only for senior members of the national security apparatus.
Their article can be read in full here, but the present piece will only focus on the part about “The Very Cold War”. This is in reference to escalating NATO-Russian tensions in the Arctic. The Yearbook details NATO’s large-scale military drills in the Arctic, its allies’ arms build-ups, and their deep displeasure with Russia’s Northern Sea Route.
Most alarmingly, the Yearbook mentioned that Finland plans to acquire 64 F-35As while Canada will receive 88 of them. It was separately reported that Norway already has 52 F-35As, which is more than double Russia’s estimated 20 or so Su-57s, its fifth-generation analogue. Sweden doesn’t yet have any fifth-generation fighters, but those other three Arctic states will have over 10x as many as Russia does. If the US’ over 500 F-35As are included, then Russia’s fifth-generation fighters will be outmatched by 35:1.
These statistics on their own show that the US is actively implementing its 2021 strategic plan for “Regaining Arctic Dominance“ that was cited in the Yearbook, the latter of which also detailed some of NATO’s new radar, drone, ship, icebreaker, missile, and other military-technical plans. They altogether lend credence to one of the cited Russian experts who warned that “Washington never abandoned the thought of redrawing borders in that area.”
Here are five background briefings on this new front:
To summarize, Trump 2.0 is pursuing a three-pronged strategy against Russia:
1) build Golden Dome missile defense infrastructure in the Arctic to greatly mitigate Russia’s nuclear second-strike capabilities;
2) arm Canada and the Viking Bloc (Denmark, Norway, Sweden, and Finland) to threaten Russia; and then
3) likely push Russia’s limits along the Northern Sea Route for the purpose of provoking a crisis that would then render this corridor dangerous and thus greatly reduce its use at minimum.
Simply put, a “cordon sanitaire” has been assembled around Russia, and this containment noose is being tightened the most by the military-technical developments along the Arctic front than anywhere else. Up till recently, this was the quietest front of the four, but that just shows that its members were moving silently to avoid attracting attention from Russia.
The latest Yearbook proves that the Kremlin had been monitoring them all along and is thus planning its response, however, so this front will likely heat up.
Total PsAI-Op: How Altman, Amodei, And The ‘EA’ Cult Are Milking “Rogue AI” Breakouts To Protect A Trillion-Dollar Bubble
The sudden emergence of an ‘AI Panic’ over the past weeks and months was highly suspect from the beginning. According to tech insiders, Silicon Valley’s apex AI labs are deliberately overselling “rogue AI” hacks to pressure the federal government into building a regulatory moat that would lock out future competition – and the timing, months after both OpenAI and Anthropic announced plans to go public, couldn’t be more obvious.
Akhil Verghese, founder of AI software company Krazimo, told the NY Post the incidents were no rebellion: “They were simply told to get the best result possible on a test.” Voice AI co-founder Abhi Kumar was blunter: “One man’s ‘the model escaped the sandbox’ is another man’s ‘you failed to build the sandbox correctly.'” Taivo Pungas, chief intelligence officer at Pactum AI, said the leap from “we didn’t build the right sort of box” to a whole-of-government emergency feels exaggerated.
PANIC!
The AI “breakouts” that lit up Capitol Hill this summer were about as organic as #4 red dye. On July 16, OpenAI models running a cyber evaluation exploited a zero-day and got from their test range into Hugging Face’s production systems; OpenAI disclosed it five days later, naming GPT-5.6 Sol and an unreleased model, and noting the models had been configured “with reduced cyber refusals so they could attempt offensive exercises that normal safeguards might reject.” Nine days after that, Anthropic disclosed three incidents of its own.
According to Anthropic’s July 30 write-up – the “waking up” narrative is total bullshit. “A misconfiguration left the machines that Claude accessed as part of the evaluation with live internet access,” the company wrote;the models had been told they were offline. Claude Opus 4.7 went after a real company that happened to share a name with the fictional target and pulled “several hundred rows of production data.” Mythos 5 published a booby-trapped Python package to the live PyPI registry that was “downloaded and run on 15 real systems.” An unreleased research model scanned “roughly 9,000 targets” and got into one company’s web app “using basic and well-known cyberattack techniques.” Anthropic’s own verdict: “We believe these incidents to be closer to a harness and operational failure than a model alignment failure.” It halted cyber evals on July 23 and called in METR – their preferred Orwellian arbiter – to review.
Anthropic’s account has one wrinkle: Opus 4.7 kept attacking after it recognized the system was real. Only the newer research model stopped. So the machines are not uniformly “blameless” – but a model that keeps following its instructions on a misconfigured network is Irregular’s failure, not evidence of intent.
The Common Denominator
Every one of these evaluations was run by the same third party: Irregular, an AI security firm that tested the OpenAI, Anthropic and Google models and, per Axios, hit “the same security issues” each time. The Verge adds Meta to the list – a pattern Axios’s Sam Sabin flagged in July:
Anthropic’s models accidentally had access to the internet during model testing due to a “misunderstanding” with third-party testing partner, Irregular. no 0-days in this case, unlike the OpenAI/Hugging Face incident
Then came Gemini. On Friday, the Wall Street Journal reported that Google’s model had broken into three real companies during an Irregular capture-the-flag exercise. The incident happened in May, Irregular published its report on August 14, and Google didn’t mention it until the Journal called – and then explained that it hadn’t considered the hacks worth disclosing because Gemini “acted appropriately” and stopped once it realized the targets were real.
Irregular told Axios the model “wasn’t supposed to be able to get online, but internet access was unintentionally available,” and the fictional target company “had the same name as a real one.” In one case Gemini guessed passwords until it got in; in two others it found credentials sitting in a public repository. Irregular says “all known issues on our end were remedied and resolved weeks ago” and that the Gemini case “does not represent a materially separate incident.” Google VP Heather Adkins: “Safe development of powerful AI models is critical and we invest deeply in this area.”
But when looking at the actual events, the model was blameless.
To make it clear:
– Gemini was told it was it was in a fictional hacking eval
– Irregular unintentionally opened internet access after the eval started
– in all three cases, as soon as Gemini figured out it had hacked a real company it immediately stopped
So Google – which isn’t asking Washington to pace anything, considered the incident a non-event – yet the two labs lobbying for a federal slowdown scrambled to put out press releases.
Industry commentator John Ennis put the obvious question, pointing out that “once is an accident, twice is questionable, but three times looks intentional”.
Why does the Irregular keep “accidentally” connecting these models to the internet?
Once is an accident, twice is questionable, but three times looks intentional
The Effective Altruism movement is the doomsday tendency that has spent a decade staffing AI safety boards and testing labs on the premise that AI will kill everyone unless the right people are in charge of it. Whether Irregular is EA-aligned is Ennis’s call. That it is the one firm under all of these incidents is on the record from Axios, The Verge and Anthropic itself.
The Pacing Play
Six days before the Gemini story broke, Dario Amodei published a September 12 post warning that within 6 to 12 months an AI swarm could “take over the entire internet with a persistent botnet,” potentially causing hundreds of billions of dollars in damage. His prescription: “We must slow the pace at which we improve the capabilities of AI models.” Sam Altman and Elon Musk signaled support. In a nutshell, Pacing the Frontier™ is a bid to become strategically indispensable – too big to fail, with Beijing as the justification.
Nvidia’s Jensen Huang – circle-jerker-in-chief noted: “What better way to create demand than to create a problem.” lol yes.
Palo Alto Networks CEO Nikesh Arora called it a “NINJA move” and then, after more time talking to labs, open-source projects and government, warned it could backfire:
Sequel to AI Pacing
I have now spent more time talking to people who run AI labs, Open Source projects and those in government and infrastructure.
I am beginning to feel the NINJA move could backfire.
I understand the pressure to come out and share where AI is “unmanageable “, and constantly share examples where it runs rogue. This fits in the category of “self-reporting” and an attempt to limit liability…
Here are the consequences of the NINJA move.
1. They have successfully encouraged every law maker around the world to have an opinion…
2. By proposing pacing – they have introduced uncertainty in the AI infrastructure trade…
…
It’s time to rebuild the brand of AI – any marketing expert will tell you, this Ninja move has done more to harm the brand of AI and will take a while to rebuild. #letsbepositive in our actions and our narrative.
Senator Josh Hawley opened an investigation into OpenAI on September 9, with a records deadline of October 1; Senator Bernie Sanders announced a bill to ban further frontier-lab development; Senator Elizabeth Warren demanded an “immediate pause.” As we noted earlier this week, everybody in this conversation is talking their own book. On Friday the White House joined in from the other side: Trump posted that AI safety concerns are a “hoax” and said he will appoint an AI czar and stand up an “AI Force,” per Bloomberg.
Follow The Money
Oh and then there’s that, yes. A leaked OpenAI presentation obtained by the Financial Times projects negative free cash flow of $278 billion from 2026 to 2030, with the company’s compute bill rising from a $600 billion estimate in February to $856 billion by July – against revenue it hopes to grow from $36 billion this year to $350 billion in 2030. As we detailed previously, Altman has already walked back the timeline on the economic transformation that was supposed to pay for all of it.
Anthropic, meanwhile, has shifted its planned IPO from October to November, per the Journal, on what Reuters reports is $100 billion-plus in annualized revenue. And a week after its CEO said the industry must slow down, Reuters reports Anthropic is considering rushing out a new model to counter OpenAI’s momentum ahead of that IPO. Pacing for thee.
If an open-weight model out of Hangzhou does 95% of what Claude or GPT-5 does for a fraction of the cost, the valuations both labs are banking on implode. The only way to protect the margins, justify the cash burn and satisfy Wall Street is to make it legally impossible for anyone else to compete – a regulatory moat so thick, and compliance costs so high, that only a $100 billion corporation can afford to train a frontier model. Arora’s point stands: no actual security fix has been proposed, only more “compute spent on safety” and a federal body to bless it.
The models didn’t rebel. A contractor left the internet on, three times that we know of, and the two labs with IPOs to protect turned that into a case for federal pacing. Hawley’s records are due October 1, Anthropic has promised a redacted PyPI transcript and an outside METR review, and Google’s explanation for sitting on a May breach of three companies until a newspaper called is that the model behaved. Don’t believe the byte.
The non-interventionist D.C.-based think tank Quincy Institute for Responsible Statecraft has published an interview with the one Republican who has been most outspoken against Trump’s Iran war.
Trump had in turn starting last spring launched a political war of his own against Kentucky Rep. Thomas Massie, who has been in the hot seat, with his political future in question. But Massie has been unrelenting, even after being defeated for another term by the largely unkown Ed Gallrein, a Republican candidate backed by President Trump and the American Israel Public Affairs Committee (AIPAC), and groups like the Republican Jewish Coalition.
Massie, who has unveiled eight articles of impeachment against Secretary of War Pete Hegseth, spoke to Responsible Statecraft about why he’s gong after Trump’s Pentagon chief – which appears focused on the his launching ‘unauthorized’ military actions in Iran, without Congressional approval. The argument as laid out below hinges on whether Hegseth was following ‘lawful orders’ from the Commander-in-Chief. Massie says no.
As it turns out, that potentially ‘awkard’ (for Republicans) impeachment vote has been entirely avoided for now with an early House election recess.
“A vote to impeach Secretary of Defense Pete Hegseth that could have happened in the U.S. House as early as Thursday will now be avoided, at least until after this year’s midterm election. Republican leaders announced Wednesday they would leave Washington a day earlier than scheduled,” CNBC reports.
“House Speaker Mike Johnson’s decision cuts short by a day an already light congressional work period, in a month that will see the House in session for just six days,” the report adds. “The chamber is not due back in Washington until after the Nov. 3 election, as lawmakers will now fan out to campaign.”
Mike Johnson sent lawmakers home Wednesday, avoiding a Hegseth impeachment vote as well as a bipartisan effort to release additional Jeffrey Epstein files.
🇺🇸 House recesses early to avoid vote on Hegseth impeachment
Speaker of the House Mike Johnson sent lawmakers home Wednesday, avoiding a vote on a resolution by Rep. Thomas Massie of Kentucky to impeach War Secretary Pete Hegseth as well as a bipartisan effort to release… pic.twitter.com/qZCBWrMnnF
Below is the Kelley Vlahos interview with Massie transcript produced by Responsible Statecraft [emphasis ZH].
* * *
Responsible Statecraft: Why are you bringing this about right now?
Rep. Thomas Massie: Because we have exhausted every other legislative remedy to make things right. We are at the point now where Hegseth is just ignoring the law. He’s ignored the concurrent (War Powers) resolution. He ignored the 60-day limit. They never reached the threshold required under section 2-C under the War Powers resolution of 1973. He’s severely degraded the DoD’s ability to winnow out civilian targets from their target list.
There is an active and ongoing war that should be stopped immediately, and I think this is an effective way to do it. It’s literally the only legislative remedy that I could think of that might work.
RS: I would imagine the timing is important because the House is leaving until after the midterm elections in November.
Massie: Yeah, and the Speaker has to schedule a vote within 48 hours.
I suspect there will be a motion to table; that’s usually what these resolve to, if they’re not supported.
RS: So what happens then?
Massie: Well, I would encourage people who are even unsure about the bill to vote against the motion to table, and hear the debate.
RS: Let’s get back to the merits of the case here. This is pretty wide-ranging, so you hit the constitutionality of the war, the civilian deaths, the kidnapping of (former Venezuelan President Nicolas) Maduro, the airstrikes on so-called narco boats, even your freedom of speech where Senator Mark Kelly is concerned. You’re really going at him with both barrels here.
Massie: There’s two categories of articles here. One category, which covers six of the articles, is that he basically followed illegal orders from the president. And these are illegal orders that were issued by the president, but Hegseth is under obligation not to follow them since they were illegal. And there’s a category of impeachment articles here that are solely attributable to Hegseth himself where he degraded the infrastructure of the DoD which is supposed to minimize the civilian casualties. That’s his. I don’t think Trump was involved in that. And then the attack on Mark Kelly, where he weaponized the DoD to squelch the speech of a senator and a veteran. That’s solely Secretary Hegseth’s doing. So there are things in here which are top-level issues with the administration all the way to Trump, but then there are some that are uniquely Peter Hegseth’s high crimes or misdemeanors.
Peter Hegseth wins the award for most crimes committed. And he just committed one too many; I couldn’t take it anymore.
RS: That begs a question, why didn’t you just go after Trump?
Massie: Well, I kind of already answered that question. Some of these things, like the civilian targeting, are Hegseth’s alone, and some of it, Trump would probably ascribe to Hegseth and not himself to save his own skin. I just don’t think it’s politically feasible or viable or even advisable to try to impeach Trump.
RS: A reporter just asked newly confirmed Attorney General Todd Blanche about your articles of impeachment and you. Aside from him saying he thinks Hegseth is doing “a phenomenal job,” he said he disagreed with the characterization that we are in a war, and that a majority of Congress would disagree as well. What do you make of these continuing assertions by the White House, the administration, even members of Congress, that we can’t call it a war?
Massie: Well, somebody better give the president that memo. He calls it a war every week.
It’s beyond playing with semantics. It’s beyond trying to be cute legally. There’s no way you can say this is not a war. Even the raid in Venezuela was an act of war. We overturned the government and put boots on the ground. But at least it seems to be over with now that we have their oil and control of their government.
He’s wrong about a majority of Congress not thinking it’s a war. A majority of Congress passed a concurrent resolution in the House and in the Senate telling them to stop under the War Powers Act.
So with semantics or not, they’ve been told to stop. They’ve claimed to stop the war by day 60, and now they say that every time they strike Iran it’s an unconnected military action to the others.
If you want a little something in the weeds here, I read every communication from the White House to Congress. They are sending us notices every time they do a strike pursuant to the War Powers Resolution of 1973. Now they’re obligated to do that, and I noticed at least three of these they said were motivated by a strike on a neutrally-flagged vessel. They’re claiming the authority to engage in hostilities on behalf of neutrally flagged vessels. And the War Powers Resolution says that it has to be an attack on U.S. soil or soldiers or infrastructure. They’re admitting right there in three of these communications to Congress that their predicate was an attack on something that wasn’t American.
RS: Did those (War Powers) communications end when they declared the so-called ceasefire, or do they keep coming?
Massie: They keep coming. In fact they refer to the ceasefire in two of these communications after the ceasefire.
RS: That flies in the face of what they’re saying publicly
Massie: Yeah, if it’s not a war, how is Trump gonna end it after the election like he told everybody in Texas last week?
A leaked video of a French military chaplain addressing paratroopers in a cathedral has circulated widely on social media. In the clip, the chaplain makes disparaging remarks about leftists, tells soldiers to keep fighting for their national heritage, and warns of the risk that French values and culture could be displaced.
The clip, recorded during a Saint-Michel Mass on Oct. 7, 2025, shows Father Romain Ghandour speaking to soldiers of the 3rd Marine Infantry Parachute Regiment (3e RPIMa) at Carcassonne’s Saint-Michel Cathedral.
Soldiers can be heard laughing and applauding as he delivers his pointed remarks.
🇫🇷🔴 JUST IN: A video has been leaked of a French military chaplain roasting leftists and warning of the Great Replacement in front of French paratroopers in the city of Carcassonne.
“Calm down, lefties! Quiet! Breathe through your nose!”
The video was released in mid-September 2026, nearly a year after the Mass.
Saint-Michel is the patron saint of paratroopers and airborne troops in the French army, which explains why the regiment was gathered in the cathedral.
Christophe Barthès, then a municipal election candidate and later elected mayor of Carcassonne for the right-wing National Rally, was among those present.
Ghandour begins by invoking the names and dates of men and women who died so that France would remain “a beautiful country,” one in which architects could continue building “basilicas, cathedrals, housing, and fortified castles.”
He contrasts that heritage with the present: instead of knights, he says, “we put incompetent people. We put people who eat seeds, people who lecture everyone, ideologues.”
The phrase “people who eat seeds” is widely understood as a jab at what he presents as weak or overly ideological leftists.
The line that has drawn the most attention comes next: “Calm down, lefties! Quiet! Breathe through your nose!” The assembled soldiers respond with laughter and applause.
He then warns that if they lose courage and conviction, “we will be ridiculed” and “this beautiful country that is France will be mocked, and others will take our place.”
He continues:
“In fact, after a while, when you’re thirsty, when you’re hungry, it’s the law of the strongest that reigns. And others will take the place of our values, of this freedom of speech, of action, of this equality between men, and of this fraternity, of this culture, of this society. Nature abhors a vacuum.”
While he never directly mentions the “Great Replacement,” many commentators have taken this remark to be a direct reference to the phenomenon, which is not only a reference to mass immigration, but also relates to the constant replacement of technology, culture, society, and peoples through all spheres of modern life at an ever accelerating pace. Ghandour closes by telling the soldiers to “keep fighting” and “continue to have the courage of your convictions, as I am trying to do at this Mass.”
As of the video’s release, there has been no detailed public statement from the army’s Catholic chaplaincy or the Ministry of the Armed Forces on whether the remarks violate rules on political neutrality for military clergy.
French military chaplains of all recognized faiths operate under a framework that is supposed to respect both freedom of conscience and the state’s neutrality. The 3e RPIMa, based in Carcassonne since 1962 and part of the 11th Parachute Brigade, is an elite unit within the French military.
The left has often been skeptical, and even hostile to, the French military, which has been seen as a bastion of support for the right in the country.
America’s latest argument over artificial intelligence has suddenly become apocalyptic. Former Anthropic researcher Jacob Coxon accused AI companies of “gambling with our lives.” Anthropic CEO Dario Amodei urged the industry to slow the development of frontier models, an idea supported by OpenAI CEO Sam Altman and Elon Musk. At the same time, opposition to the data centers needed to power AI is spreading across the United States.
China has noticed. X recently uncovered a suspected Chinese influence network of roughly 200,000 fake accounts; about 200 of them were directly involved in amplifying claims that American data centers were raising electricity prices and overwhelming the power grid.
This does not mean that criticism of AI or data centers is manufactured in Beijing. Concerns about electricity costs, water use, pollution, cyberattacks, job losses, and mass surveillance are real. But China does not need to invent American divisions. It needs only to identify, amplify, and exploit them.
Modern democracies periodically succumb to predictions that a new technology will destroy humanity. The fear may be legitimate, but its political consequences are not evenly distributed. Democracies permit protest, litigation, regulation, and obstruction. They may even abandon a technology out of fear.
Dictatorships suppress debate, concentrate resources, and use their rivals’ hesitation to catch up.
The first great technological apocalypse began with the atomic bomb.
As the Manhattan Project approached completion in 1945, scientists considered whether an atomic explosion might ignite nitrogen in the atmosphere or trigger an uncontrollable reaction in the oceans. Edward Teller raised the possibility; Hans Bethe and others calculated that the risk was physically negligible. The Trinity test proceeded.
The question nevertheless haunted Robert Oppenheimer. After Hiroshima and Nagasaki, he feared that scientists had opened a Pandora’s box. When Washington decided to develop the hydrogen bomb after the Soviet atomic test, he opposed it on moral and strategic grounds.
Oppenheimer’s Communist associations then turned a policy dispute into a political scandal. His wife and brother were members of the Communist Party USA (CPUSA), and he had many pro-Soviet acquaintances. Meanwhile, actual Soviet spies inside the Manhattan Project – including Klaus Fuchs and Theodore Hall – passed crucial nuclear information to Moscow.
The Soviet Union tested an atomic bomb in 1949 and a thermonuclear device in 1953. China tested its first atomic bomb in 1964, shortly after emerging from a famine that killed 40 million people. Neither Communist regime permitted a genuine public debate over the wisdom of nuclear competition.
The West did. Scientists, churches, students, and citizens organized enormous anti-nuclear movements. Their pressure contributed to test-ban treaties and arms control negotiations. Yet Americans still understood that the danger came not only from nuclear weapons but also from the regimes possessing them. After Sputnik in 1957, few believed the United States could safely withdraw from technological competition while the Soviet Union continued advancing.
After the Cold War, climate change became the next vehicle for apocalyptic politics.
Al Gore’s An Inconvenient Truth turned complex climate models into images of approaching catastrophe. Greta Thunberg transformed policy disagreements into moral indictments. Claims that humanity had only “12 years” remaining circulated widely.
Fear of climate change converted a scientific problem into an ideological commandment. Energy restrictions, endless permitting, penalties on traditional industries, and costly transitions were presented as the only acceptable path. These policies greatly contributed to and accelerated Western deindustrialization.
China followed a different course. Unrestrained by voters, environmental groups, or local governments, Beijing concentrated subsidies, land, energy, and credit to build complete industrial supply chains. The West congratulated itself for reducing domestic emissions while transferring production to China. It then discovered that it depended on China for pharmaceuticals, rare earths, batteries, solar panels, and electronics.
The pattern is now repeating with AI.
While Americans debate moratoriums, China is treating artificial intelligence, robotics, and computing infrastructure as pillars of national power. Its “Eastern Data, Western Computing” strategy is creating an integrated national computing network, moving the eastern seaboard’s data-processing demands to western provinces with abundant land and energy. Beijing intends to control not only AI models but also the electricity, chips, servers, communications systems, and data centers that sustain them.
China is also competing to write the rules. In 2026, 29 countries signed an agreement in Shanghai establishing the World Artificial Intelligence Cooperation Organization, which Beijing describes as the first intergovernmental organization devoted to AI. China does not plan to pause while America debates whether the future is too dangerous to build.
AI requires serious safeguards: independent testing, cybersecurity standards, protection against biological misuse, transparent energy pricing, and accountability for harms. But regulation should make development safer, not make development impossible. Data-center projects should bear their actual costs, but local objections cannot become a nationwide veto over the infrastructure of the next industrial age.
Open debate is one of democracy’s moral strengths. The power to suppress debate is one of authoritarianism’s strategic advantages. When democratic caution becomes paralysis, freedom itself becomes vulnerable to exploitation.
America can decide how it develops artificial intelligence. It cannot decide whether artificial intelligence will continue to develop. If the United States stops because it fears the future, China will not stop with it.
Military Report Details Six UFOs Traveling At 480 MPH
Newly public military records are offering another look at unexplained objects encountered by U.S. forces, including a cluster reportedly moving through Middle Eastern airspace at extraordinary speed, according to the NY Post.
According to a CENTCOM account from 2025, military personnel tracked six round objects traveling together at about 480 mph. Their flight path was unusual enough to draw attention, with the objects repeatedly altering course. Military video from the encounter shows several small objects crossing the sky above an arid landscape.
The Post wrote:
A 2025 report from US Central Command (CENTCOM) details a sighting of “six small spherical objects, grouped together” and “frequently changing direction” at 480 mph. Accompanying the report was one minute of video footage showing the objects as they flew over what appeared to be a desert region.
Another video, from 2023, captured circular objects flying over the Yellow Sea that were spotted by an infrared sensor aboard a US military platform.
In a separate case that year, a Colorado police officer spent about 15 minutes recording a stationary, silent object displaying several different colored lights.
The Post writes that some of the material reaches much further back. In 1952, Navy warrant officer Delbert Newhouse filmed a formation of bright objects while traveling through Utah. The case eventually became part of Project Blue Book, the Air Force’s long-running investigation into reports of unidentified objects in American skies.
Officials explored mundane explanations for the Utah footage, ranging from balloons to birds. One Air Force review ultimately attributed the objects to seagulls circling in rising air, although another examination found aspects of their brightness difficult to reconcile with ordinary birds.
The records are part of the government’s continuing release of historical and more recent UAP material, providing additional documentation of sightings that military personnel and investigators have examined over decades.
What the G20, Werner, and Warsh tell us about America’s new monetary playbook
In every transition, there are road signs along the way. Matt Dines has been one of the more accurate minds of late on the monetary and geopolitical transition we are living through.
His and Camron Otsuka’s commentary earlier this month on Mine Print Hash, post the G20 meeting in North Carolina, sheds a lot of light on major sticking points that will pave the way for both future policy and monetary frameworks. This will not happen overnight, but at the same time we’ll likely look back and say, “man, the world changed fast.”
A few highlights that matter:
1. The Financial Stability Board (FSB). Just as Great Depression meetings brought new entities for the next cycle, G20 meetings post-GFC brought the FSB for the same reason. New rules to pave the way for stability in a new economic era (2009 Pittsburgh summit). According to Dines FSB brings AI into the mix, plugging it into the Basel Accords, the last of which, Basel III, an update required because of the financial behaviors and shortcomings that caused the GFC.
As Dines points out, all we need now is a final agreement so all parties can play nice around the new rails, i.e. stablecoin/Bitcoin/SOFR rails. Global stablecoin arrangements will take final shape after the announcement of a Bretton Woods 2.0. Something I’ve discussed many times over, and something that feels nearer and nearer by the day. The most important point? Bessent has basically championed this from day one.
As Werner’s model suggests (see point four), Bessent opposes the state picking winners directly, but supports guiding private capital toward strategic ends. Video referenced in Samson’s post.
2. Bringing forward the private sector as a way to grow our way out of this. What’s critical to understand here is that during the GFC, entities and individuals were overleveraged. To combat this, the central bank expanded its balance sheet to take on all the underwater debt. Today, the script is flipped. The private sector is relatively unlevered, and the central bank is overlevered. This is important because the only way to grow an economy is to guide credit towards productive use cases. Regardless of opinion, this has been the underlying basis of the early-stage beginnings of all successful economies and empires for centuries (see Werner). For those keeping score at home, these are the breadcrumbs we’ve been given to better understand where monetary and fiscal policy are going (Office of Strategic Capital).
3. G20 is bringing in banks and private institutions, which is a paradigm shift in how credit allocation works. This is the announcement. We are going to run a different playbook for our monetary framework from now on. This is the only way out. The only way back to some state of “normal”. This is exactly what Werner lays out in the Princes of the Yen. An in-depth study of Japan and other great banking empires. Our “new approach” will be one that has succeeded many times in the past. Including during the creation of America. Why? Because this style best achieves rebuilding the US’ industrial capacity – think modernization of infrastructure. Today’s infrastructure and infrastructure for the 21st-century is inherently digital. That’s why capital formation is being directed and pointed at all things AI and digital. This is why all these related industries are points of “national security”. This is what is meant by “Hamiltonian policy”, a notion we’ve discussed before.
In short, exactly as Dines pointed out, you’re going to have to pick sides – US or China. This is what is meant by the new multi-polar world. Believe it or not, for the first time in more than two decades, “we’re actually trying to accomplish something”.
4. Credit expansion is the only way to get growth (PofY), which is why Main Street over Wall Street matters. See the Foundry School to better understand the government’s refocus on centralizing and deploying capital into productive use cases. Centralize the steering of credit, decentralize who receives it.
The key to the entire process is Matt’s highlighting of Richard Werner’s work. Richard wrote the Princes of the Yen, which outlines not only the rise and fall of the great Japanese financial system, but more importantly, the foundations of how dominant banking and financial systems work. A means by which the US economic system has drifted far away from over the last thirty to fifty years.
In simple terms, the keys are state-directed capital and credit allocation to productive uses. That’s all that matters for a budding or dominant economic system. Without it, one dies. Without it, one meanders toward financial engineering practices that eventually kill the entire system. Proper credit allocation (capital formation) is representative of early-stage and highly successful/functioning economic systems. Financialization is the sign of an aging or failing financial system. If you strip out all the complexity and jargon, it’s as simple as this.
As Werner points out, the Quantity Theory of Credit is the origin of all successful banking models that have worked for thousands of years. It started in early Asia before moving through Europe, Germany, Japan, the US, and now back to China. It was the basis of China’s rise as they’ve built out the Belt and Road system over the last decade-plus. It has allowed them to pull economic power and global sway away from the US by way of state-directed capital aimed at globally and systemically important supply chains. By doing so, China created a vast decentralized product and manufacturing hub for the world; for anything and everything at a low price. On the contrary, the US chose the more deadly path. Centralization, consolidation, and a reduction in the number of banking entities. All the while increasing the amount of financialization, leverage, and risk in the fewer and fewer nodes within the system.
WOW. The # of banks in the US, by era, as presented by @MaxfieldOnBanks. I had never thought of it this way. Once you see it you can’t unsee it… pic.twitter.com/CJQJdIZEYv
The core thesis, unlike what we’ve seen in the US over the last two decades, is decentralization. In short, you have the combination of centralized capital flows towards a decentralized private sector, which forms the basis of growth. You conquer, so to speak, in numbers.
This is a major paradigm shift from what we’ve become, but it is what we are finally seeing the US wake up to and begin to move back towards.
That’s why it feels so chaotic and out of sync. It’s different than anything we’ve seen in the last 70 to 100 years or more. It is what Hamilton implemented in the US to found our great and successful American experiment. It is what we reimplemented in the 30s to 50s to extend US dominance. But it is what we moved away from post-1971 with the creation of petrodollars and a heavy reliance on financialization and incentivization of lack of productivity (service). It is what stablecoin dollars, Bitcoin, and a SOFR based system are meant to hopefully replace. The brokenness of petrodollar and eurodollars. These steps are an attempt to revert back to something that works – productivity.
Instead of growth, for decades, we’ve implemented policies that promote fewer and fewer entities in industry and banking. The exact steps that choke off growth and kill economic systems. It also leads, as we’ve seen, to a vicious cycle of bad policy design that encourages less competition. All of which only exacerbate the problem.
Eventually, you end up right where we are. In an unproductive and overly financialized economy without the ability to provide because you’ve outsourced everything for the sake of profits, quarterly numbers, and inflated margins for analysts to bicker over. At some point, you wake up and realize the amount of power you’ve given away to others by centralizing your resources and profits into fewer and fewer hands. That’s when you realize those providing to you have decentralized their resources, profits, and state-directed capital into real economic power that eventually unseats you from number one.
For a financial system to work, the entire system must depend on the quantity of credit, as Werner lays out, and if you follow the Japanese story, which I believe we are only 25-30 years behind, then Kevin Warsh is no different than the last Central Bank prince whose specific role was to change the regime. Unfortunately, if we choose to extend, the only option is to become the carry trade for others to piggyback off of. As we see, that game can unproductively go on for decades.
As Dines notes, the QE period is over. The only move to sustain is to provide credit to those who have capacity (Main Street) and guide it into productive use cases (21st-century infrastructure).
