New York Times reporter Sheryl Gay Stolberg wrote one of the most hilarious, misleading pieces I’ve seen in recent months, castigating the NIH for a new vaccine injury clinic based on a leaked statement by Jack Leslie, a senior advisor to the PR firm Weber Shandwick which represents most major vaccine manufacturers.
I’m not joking. This is the journalism I get for my paid subscription to the New York Times.
Like most senior executives at the global PR firm Weber Shandwick, Jack Leslie makes buckets of money helping corporations sell themselves and their products to the American public. In the last handful of years, Weber Shandwick’s clients have included the bulk of the global vaccine giants including Pfizer, Moderna, GSK, Sanofi, Novartis, and Eli Lilly.
But when he’s not raking in oodles of cash repping corporate America, Leslie also takes on some unpaid healthcare positions as further leverage to market his lucrative pharma clients, such as heading the board of the NIH Clinical Center Research Hospital Board. The board met on Friday morning and Leslie’s first order of business, I am told, was voting to castigate HHS Secretary Robert F. Kennedy Jr. for establishing a new NIH clinic to study vaccine injuries.
Leslie then leaked his statement and the vote to Sheryl Gay Stolberg at the New York Times, whose story appeared within hours.
Stolberg’s reporting – or whatever it was – failed to disclose that Leslie works for Weber Shandwick which advises pretty much every vaccine company on the planet. Here’s how Stolberg describes him to New York Times readers:
Mr. Leslie, a former chairman of the global public relations firm Weber Shandwick, has advised the World Health Organization and numerous health-oriented philanthropies, and government bodies under presidents of both parties. He also chairs the board of the Elizabeth Glaser Pediatric AIDS Foundation, and advises global health institutes at two universities, Duke and Georgetown.
And here’s what a tiny amount of suspicion and about 45 seconds on Google got me when I searched Leslie’s background: his current biography at Weber Shandwick. Note the plaudits for Leslie’s work advising vaccine manufacturers Pfizer, Johnson & Johnson, Merck, and Sanofi.
Back in 2022, I reported that Weber Shandwick had won a $50 million contract to embed their personnel at the CDC’s vaccine center and advise physicians on COVID vaccines, while Weber Shandwick simultaneously had contracts with Pfizer and Moderna to promote their COVID vaccines. I caught one Weber Shandwick employee writing on LinkedIn that his duties at the CDC “focuses on boosting vaccination rates for flu, HPV, whooping cough, and COVID-19.”
Days after my report, Senator Rand Paul sent the CDC a letter demanding that the agency turn over copies of their contract with Weber Shandwick, as well as the names of all of Weber Shandwick employees who were working at the CDC. A source inside HHS told me last year that, shortly after Kennedy was sworn in as HHS Secretary, Weber Shandwick’s lucrative contract with the CDC was cancelled.
NIH established the Clinical Center Research Hospital Board in 2016 to advise NIH leadership on safety and regulatory compliance, and the NIH Director chooses the board members. Francis Collins appointed Jack Leslie to the board in 2022, and he was made chair in 2024.
The board’s federal charter states that members must meet the following criteria: Nationally recognized leaders in sectors related to the NIH Clinical Center’s duties, research hospital administration, clinical care, safety and quality, clinical and research compliance, or clinical research.
However, two individuals are chosen if they have been patients in clinical research studies.
I sent Francis Collins an email through his public relations rep asking why he chose Jack Leslie as a board member and how Leslie’s background in pharmaceutical PR qualified him to be on the NIH Clinical Center’s board. “Can you explain your thinking on that?” I asked Dr. Collins.
Collins did not respond to repeated requests for an explanation.
I also sent questions to Jack Leslie through his Weber Shandwick email asking who his current pharmaceutical clients are. However, Leslie also did not respond to repeated requests for comment.
Pezeshkian Now Says Sanctions Must Be Peeled Off Before US Dialogue Returns
Iranian President Masoud Pezeshkian appeared to add yet another stipulation to Tehran’s growing list of demands that must be met if it is to get back to the negotiating table with the US.
Pezeshkian stated that some Washington-led sanctions must be peeled back before direct dialogue can resume again. He voiced that the constantly ratcheting economic warfare is closing diplomatic avenues, and so there must be a ‘practical’ easing of pressure to set an atmosphere of honest talks.
“Threats and sanctions must be removed in practice to pave the way for dialogue. We cannot increase the intensity of sanctions and pressure every day, close the avenues of interaction, and at the same time talk about negotiations,” he wrote on X.
Xinhua
He is perhaps taking note of what’s happening in US-Russia relations, where President Trump just waived the sweeping Graham sanctions package just ahead of when they were expected to be enacted. Trump also earlier this month facilitated the diesel release deal with Putin.
Out of these overtures has come an increase in direct Moscow-Washington dialogue. It seems Pezeshkian is holding out for the possibility of a scenario like this, depending on how desperate the White House becomes for a peace deal.
While there’s no doubt that Iran’s economy is under immense pressure, and average people are feeling the pain on a daily basis – especially given the plunging Rial amid runaway inflation – Iranian leaders say the country can endure in this wartime state of survival for at least years more.
The Pentagon and the Trump administration have been saying something different, however.
US Central Command chief Brad Cooper claimed last week that “The financial strain on Iran’s military has become so significant that there are reports of Iran-aligned militia groups across the region withholding payments to their soldiers in order to funnel money back to the IRGC, which also is not paying its troops.”
At various times over the last several months, Iranian officials have admitted the deep financial pain within society and impacting government coffers, also amid the US naval blockade which prevents Iranian oil from reaching global markets.
Yet Iranian leaders have remained defiant…
Iran has little hope that current talks yield progress–instead, it is preparing for US escalation, which it sees as likely. Araghchi also issues a thinly veiled threat: any escalation “will put civilian lives and the wellbeing of all regional states and the global economy at great risk.” https://t.co/cbLjyAgn0R
For example, Iran’s Central Bank chief Abdolnaser Hemmati said earlier this month, “Despite all these pressures, the Iranian economy has demonstrated very good resilience, and the claim that Iran’s economy is collapsing is nothing more than an illusion.”
It continues to be a high stakes standoff and game of each warring side waiting the other out, seeing how much economic and political cost can be inflicted.
Medicare and Medicaid Administrator Dr. Mehmet Oz announced in the Oval Office on Tuesday that the Department of Health and Human Services (HHS) is deferring an additional $1.2 billion in Medicaid funding from California over concerns of widespread fraud in its state healthcare programs.
The federal government’s withholding of Medicaid payments to California now totals more than $3.3 billion.
“They just got the note, and we’re doing that because of the growth of personal care services in California,” Oz said.
“California has been growing that program 24 percent in the last three years. That is twice the rate of every other state average in the country. Impossible for us to understand how that could be so.”
President Donald Trump, Vice President JD Vance, and independent journalist Nick Shirley joined Oz at the Oval Office event on Tuesday.
Trump administration officials credited Shirley for his work in exposing healthcare fraud in Minnesota last December, which launched him into the national spotlight as an independent government watchdog.
“I just was concerned about the well-being of our tax dollars,” Shirley said during the White House event. “There’s never been an incentive for anyone to ever expose fraud. In fact, when I expose fraud, instead of the mainstream media investigating the fraud, they investigated me, and people actually, in fact, wanted to kill me after I exposed the fraud.”
After his video highlighted alleged fraud in Minnesota’s daycare programs, Shirley made additional videos in New York and California.
In Oz’s announcement Tuesday, he clarified that the deferment affects California’s Medicaid payments directed to personal care services.
“Just that one little area where you’re paying someone to carry groceries upstairs for your mom, which many of you would carry groceries upstairs for your mom for free, I would think, but in California, they’ll pay you a lot of money for it, and it’s actually run by the counties,” Oz said.
Trump signed an executive order on March 16 to officially create an anti-fraud task force to be headed by Vance.
As part of Tuesday’s White House event, Trump and Vance announced a $25 million Fraud Whistleblower Incentive Program (WHIP), designed to reward Americans who help report misuses of U.S. tax dollars.
Under the program, citizens who provide tips that lead to a successful fraud conviction or a significant federal enforcement action are eligible to receive 1 percent of the amount of fraud discovered, Trump said.
The Justice Department will oversee WHIP, and Americans can submit tips online at fraud.gov.
“For the first time ever, there’ll be an incentive for people to actually go out and make that change inside their own community,” Shirley said about WHIP. “I hope by today, millions of people are empowered inside of the United States to go out and actually make a change inside your own community, and you’ll actually be rewarded for saving America money.”
Oz announced that the latest action against California’s Medicaid program was on behalf of HHS Secretary Robert F. Kennedy Jr., who said on July 21 that CMS was withholding more than $867 million in Medicaid payments to California.
“Every dollar the federal government allows to be lost to fraud, waste, and abuse is a dollar stolen from American patients and the American taxpayer,” Kennedy said at the time. “That’s money that should be going to legitimate healthcare.”
In May, Vice President JD Vance announced $1.3 billion would be withheld from California’s Medicaid payments over potentially fraudulent billing patterns.
“We want to protect these programs for the kids and the families who need them,” Vance previously said. “We want to ensure that the American taxpayer isn’t getting fleeced.”
California Gov. Gavin Newsom has called the withholding of funds politically motivated. His office did not respond to a request for comment about the latest deferment.
Donald Trump Jr. Privately Breaks With His Father On Foreign Policy: Report
Donald Trump Jr. has privately opposed his father’s war with Iran from the very beginning, even personally confronting President Donald Trump with his objections, according to The Atlantic.
Donald Trump Jr. and former President Trump. Photo: Douglas P. DeFelice via Getty Images
The president’s eldest son has repeatedly voiced his opposition to the nearly eight-month conflict behind closed doors, despite carefully avoiding any public criticism of his father.
Two anonymous sources who reportedly spoke directly with Trump Jr. said the MAGA leader has repeatedly questioned the military campaign, a position in line with his longstanding opposition to U.S. involvement in foreign wars.
The disagreement reportedly dates back to the beginning of the conflict, when Trump Jr. made his objections known directly to the president.
“Don has kept his views on the subject private, as he would never publicly break with his dad on an issue like this, but I can’t imagine anyone who knows Don would be surprised by his personal views on the subject,” a person supposedly close to Trump Jr. told the leftwing magazine.
Trump Jr. has repeatedly championed his father as a leader who would keep America out of costly foreign entanglements, particularly in the Middle East.
Trump Jr.’s reported opposition also reflects broader divisions within the MAGA movement, where prominent conservative voices have questioned whether the conflict is consistent with the president’s campaign promises.
Meanwhile, the war has become an increasingly difficult political issue for Republicans ahead of November’s midterm elections.
Rising gasoline prices and mounting economic pressures have fueled public frustration, while a Pew Research Center poll found that 65% of Americans disapprove of the administration’s handling of the conflict.
A spokesman for Trump Jr. refused to comment on the report.
New York Gov. Kathy Hochul has directed the state Department of Health to consider ending the state’s Medicaid social adult day care benefit.
The directive came on the same day that state and federal investigators carried out a crackdown on providers suspected of fraud, and on the same day that Hochul announced 16 arrests in a separate auto insurance fraud investigation.
Hochul, a Democrat, stated at an Oct. 20 press conference that she had told the department to look at “all options to eliminate continued fraud, waste and abuse.” Those options include phasing out the benefit and moving participants to other services for older New Yorkers. The department’s recommendations are due by Dec. 31.
Social adult day care is a non-medical benefit offered through New York’s Medicaid managed long-term care program.
It provides daytime supervision, meals, social activities, and personal care in a community setting. More than 400 programs serve about 45,000 Medicaid members at an estimated cost of more than $500 million a year, according to the governor’s office. The federal Centers for Medicare & Medicaid Services (CMS) approves the benefit and helps fund it.
The announcement followed what the governor’s office called a months-long investigation targeting more than 100 providers. The state Department of Health, the state Office of the Medicaid Inspector General, and the state attorney general’s Medicaid Fraud Control Unit worked with the FBI and the federal Health and Human Services inspector general.
FBI agents and state officials raided programs across New York City on Oct. 20. CMS Administrator Dr. Mehmet Oz called the operation the largest enforcement action of its kind.
Hochul said she had gone to Washington to meet with Oz to discuss working together against Medicaid fraud, and that the investigation is targeting providers suspected of money laundering, kickbacks, and improper billing.
“We will find you, we will prosecute you, and we will hold you accountable,” Hochul said.
At the same press conference, Hochul announced that a joint investigation by the State Police and the Department of Financial Services had led to 16 arrests in auto insurance fraud cases.
The cases involved nearly $500,000 in attempted fraudulent claims in New York City and Suffolk, Onondaga, Monroe, and Erie counties. Hochul said New Yorkers pay about $4,000 a year for auto insurance, almost $1,500 more than the national average, and that she expects the arrests and insurance reforms in this year’s state budget to start lowering rates.
Reviewing Adult Day Care Claims
Regarding the crackdown on adult day care fraud, Hochul ordered the department and the state Medicaid inspector general to require health plans to review social adult day care claims before paying them and to pursue payment suspensions. A moratorium on new providers that the department imposed in July remains in effect until January 2027 and may be extended.
State Health Commissioner Dr. James McDonald said the department will advise Hochul on whether further reforms can deliver accountability or whether participants would do better under other services.
“Medicaid is a lifeline for millions of New Yorkers,” Hochul said in a statement. “Protecting that lifeline means defending access to care and defending the integrity of the programs that provide it.”
The program has drawn scrutiny before. A February audit by state Comptroller Thomas DiNapoli found that managed care plans paid $2.4 billion for adult day care services from January 2019 through October 2024. Payments rose more than 141 percent from 2021 to 2023.
Auditors identified $285 million in questionable payments to centers for dates after at least one plan had dropped them from its network. That included more than $28.6 million to centers terminated for cause, such as fraud.
In one case, a center that one plan cut for fraud, waste, and abuse in 2021 stayed in the networks of 18 other plans and was paid more than $12.9 million afterward.
Auditors also found that a Flushing center with a legal capacity of 323 billed for 530 people on a single day in September 2022.
In its response to the audit, the Health Department said the comptroller’s sampling method could overstate how widespread the problems were. The comptroller’s office called that statement misleading.
Earlier this year, two people in Brooklyn pleaded guilty to a $68 million adult day care fraud scheme, according to the governor’s office.
Asked whether ending the benefit would require federal approval and what services the participants would move to, the state Health Department referred The Epoch Times to the governor’s announcement.
Hochul faces Republican Bruce Blakeman in the Nov. 3 governor’s race.
Blakeman’s campaign and CMS did not respond to a request for comment from The Epoch Times before publication.
Elon Musk has confirmed that Ndiaga Diagne, the 53-year-old Senegal-born naturalized citizen who opened fire outside a downtown Austin bar in March and killed three people, was a former Tesla employee at the company’s Gigafactory Texas.
Diagne was fired after he violently assaulted a female coworker who accidentally stepped on his prayer rug during a company-sanctioned break.
Months later he carried out the attack while wearing a “Property of Allah” hoodie and an Iranian-flag shirt.
HOLY SH*T Elon Musk reveals that Ndiaga Diagne, the Muslim man who k*lled 3 people in Austin, was an ex-Tesla employee whom he fired. Diagne was fired after he assaulted a woman for stepping on his prayer rug. Months later, he carried out the shooting. https://t.co/cvqU6KyEly
On March 1, 2026, shortly before 2 a.m., Diagne drove a black Cadillac SUV past Buford’s Backyard Beer Garden on West Sixth Street, a popular nightlife strip near the University of Texas. He activated his hazard lights, rolled down the window, and fired a handgun into the patio and sidewalk crowd.
He then parked, exited with an AR-style rifle, and continued shooting along the street before Austin police arrived within roughly a minute and fatally shot him.
Three people were killed: 19-year-old former Texas Tech student Ryder Harrington, 21-year-old University of Texas student Savitha Shanmugasundaram, and 30-year-old Jorge Pederson. Roughly 15 others were wounded.
Diagne, a Pflugerville resident, entered the United States in 2000 on a tourist visa, obtained a green card in 2006 after marrying a U.S. citizen, and was naturalized in 2013.
He had a prior criminal record that included a 2022 hit-and-run reduced to a misdemeanor and later dismissed after probation, as well as domestic violence allegations.
He legally purchased the firearms used in the attack in San Antonio in 2017. A Quran was found in his SUV. The FBI later determined he acted alone with no evidence of direction, funding, or support from a foreign terrorist organization, though investigators noted indicators potentially tied to the conflict involving Iran and Diagne’s admiration for Iran’s former leadership. He had not previously been on the FBI’s radar.
It was this guy. Then the Legacy Media wanted to hide this photo and his motive. https://t.co/PJG6HowzJt
In a recent interview with biographer Walter Isaacson on The Builders, Musk recounted the earlier incident at the factory. “We had someone who was working at the Tesla factory in Austin until December of last year. He was fired because he assaulted a woman who stepped on his prayer rug in the factory,” Musk said.
He continued, “She wasn’t expecting anyone to be praying in the factory, and he was praying in the factory. She accidentally stepped on his prayer rug, and he assaulted her, violently assaulted her. So he was fired for that. And then a few months later, he went and killed three students in the bar in downtown Austin.”
After a long pause, Musk urged “Now, I think we shouldn’t let people like that into the country.“
Full interview:
A civil lawsuit filed by 65-year-old Tesla employee Lillian Brady in Travis County alleges that on December 4, 2025, Diagne grabbed her and threw her to the ground without provocation while he was praying on a walking path in a common area.
Brady reported the assault to Tesla and local authorities but says the company withheld Diagne’s identity, preventing her from pursuing charges. She only connected him to the shooting when she recognized his face in news coverage.
Her attorney, Bob Hilliard, stated: “We already know the shooter violently assaulted a Tesla employee months before the Sixth Street shooting and Tesla had the shooter’s name and information about that earlier attack – why they chose not to act or warn law enforcement raises very serious questions the public deserves an answer to.”
Brady herself said Tesla’s handling was “unethical” and that identifying him earlier “maybe all this could have been avoided.”
Tesla has not publicly confirmed the employment details, and some aspects of the assault claim remain allegations in civil court. The company later obtained arbitration for the suit, avoiding a public trial. Austin Police Chief Lisa Davis said her department had no prior contact with Diagne.
The case illustrates the gap between private employers spotting clear warning signs of violence tied to religious intolerance and an immigration system that naturalized Diagne years earlier with no subsequent removal pathway.
Musk’s point is straightforward: screening for individuals who respond to accidental contact with a prayer rug by violently assaulting a coworker is not bigotry; it is basic risk assessment.
The same man later killed three Americans on a night out. Legacy coverage initially emphasized mental health or the broader Iran conflict while downplaying the “Property of Allah” clothing and the prior workplace assault. The photo of Diagne in the hoodie circulated widely on social media once available.
Diagne’s history of family violence allegations, the hit-and-run, and the factory incident were not secret. Yet he remained in the country, obtained firearms legally, and was able to work at a major American manufacturer until the prayer-rug assault forced his termination.
The FBI’s conclusion that he acted alone does not erase the pattern or the preventable nature of the earlier violence. Screening for ideological incompatibility with the rule of law and equal treatment of women is not optional when the alternative is more dead Americans on Sixth Street.
Situational Unawareness: Banks Ran Out Of Room To Lever Up The AI Trade, So They Made More
When a bank runs out of room to lend to hedge funds piling into the most crowded trade on the planet, there are two options: stop lending, or find more room. Barclays found more room…
According to a Bloomberg exclusive published Tuesday, Barclays (BARC) executives wanted extra capacity to lend more aggressively to hedge fund clients as Asian AI stocks went vertical earlier this year. The fix: the bank’s macro rates traders ended up lending part of their own capital allocation to the prime financing business through an internal auction. The reason they had to: over the summer Barclays had reached its maximum limits on how much financing it could extend to hedge fund clients in Asia. Bloomberg’s verdict: Barclays and its peers are “finding ways to meet demand, despite bumping up against internal constraints.”
In other words, the internal risk limits did their job, flagged that the bank had lent enough… and the bank responded by moving the goalposts.
Below we walk through why this matters, why Barclays is hardly alone, and why Goldman’s own prime book data shows exactly how the banks “fixed” the problem (hint: more shorts, not fewer longs).
“Disciplined”… Right Up To The Limit
The pitch inside Barclays, per Bloomberg’s sources, was simple: allocate more balance sheet to higher-returning businesses like prime brokerage (housed in the global markets unit run by Adeel Khan) given the “huge growth” expected in Asian tech stocks. Rates traders, whose returns on balance sheet don’t look nearly as sexy as financing Korean memory stocks at peak euphoria, became the donors.
Barclays’ official line:
“We deploy our investment bank balance sheet dynamically, responding to client opportunities while maintaining a disciplined approach to risk and returns.”
Translation: we found a client opportunity, and we deployed dynamically. Meanwhile, the “disciplined” part kicked in only after the limit was hit.
Regular readers will recall that the Bank of England had already started poking around exactly this corner of the market just as the AI trade was cracking in July:
Bank of England probes Asian equity risk at prime brokers
And as we noted when regulators finally found their situational awareness (Sep 24), the BoE is specifically looking at the rapid growth of London prime brokers financing Asian equities this year, after names like SK Hynix went vertical. London prime brokers financing Asian equities… it’s almost as if someone had a specific bank in mind.
The Irony: Barclays Was The One That Said No To Leopold
Here’s the twist that makes the story worse, not better. Per Bloomberg, Barclays had previously declined to take on Situational Awareness as a client because of concerns over concentration risk in the AI sector. Good call, as it turned out.
For those who missed it (i.e., regulators), Leopold Aschenbrenner’s fund was running roughly 4x leverage via total return swaps, largely through Goldman, on a long AI infrastructure / short software book. When AI rolled over in July, the margin calls hit, and the fund dumped its entire public book on Ken Griffin’s doorstep at roughly a 10% discount, collapsing from $45 billion to about $10 billion in a matter of days (“Situational Bewareness”, Jul 30). Citadel, naturally, soared 6% in July on the firesale (Aug 5), and promptly flipped almost all of it (Aug 21). Our take at the time:
Archegos 2.0 it was.
*SITUATIONAL AWARENESS ASSETS SAID TO FALL TO $10 BILLION
Down from $45BN less than a month ago. Historic implosion.
Who is Archegos 3.0… there is still about $500BN in TRS excess leverage
So the “prudent” bank avoided the single most obvious blowup of the year, and still maxed out its Asian hedge fund lending to the point where it had to borrow capital from another desk to keep going. Which tells you that Leopold wasn’t the problem; he was merely the most visible symptom of a market where everyone was levered to the same AI theme through the same few dealers’ balance sheets.
“We are also seeing dealers offering a record amount of leveraged exposure to stocks via futures and total return swaps. Equity inventory on their balance sheet has risen to a high of $223 billion… This is demand driven, but also dealers’ balance sheets are likely running into supply issues due to regulatory constraints.” (emphasis ours)
Barclays has now confirmed the “supply issues” part, and how it got around them.
And we know how that story ended:
The chip/memory trade peaked THE DAY total return swap funding costs hit a record (as noted back in June).
The entire trade was all just leverage – largely from Situational Awareness – masking as narrative
Barclays isn’t the only one bumping its head on the ceiling. Bloomberg notes that Goldman said earlier this month that demand for equities financing continues to exceed available industry capacity, with CFO Denis Coleman saying it allowed the bank to “remain selective in deploying resources.” Back in July, Coleman said that in prime and FICC financing there was “far more demand across the segment than we’re willing to engage.” UBS CFO Todd Tuckner, meanwhile, said in July the bank’s equities balance sheet was being used “more sparingly” for prime brokerage.
Put differently: Goldman and UBS publicly say they are rationing, and Barclays (which has spent years clawing its way up the prime brokerage league tables) is the one finding creative ways to fill the excess demand its rivals are turning away. When the biggest prime brokers on the Street are telling you demand exceeds what they’re willing to finance, being the marginal lender who says yes is not usually a winning position.
How The Banks “Fixed” It: Make The Clients Short More
The most interesting detail in the Bloomberg piece is buried near the end: traders at Barclays, as at other banks including Goldman, worked with hedge fund clients to limit their balance sheet use by encouraging them to take more short positions, which lessen the burden on prime brokers’ books (short proceeds help fund the longs internally).
“Our PB data showed US L/S net leverage fell 3.2pts last week, the largest weekly decline since Liberation Day and fourth-largest over the past five years. At 43.7%, net leverage now sits at a five-year low.“
But here’s the kicker:
“What’s notable about the reduction in hedge fund net exposure is that essentially all of it since the end of July has come from an increase in shorts (not a reduction in longs) – h/t GS’ Vincent Lin for the stats. Short exposure is now near five-year highs, while long exposure remains in the 53rd/72nd percentiles over the past three/five years… Said another way, managers have aggressively reduced their directional exposure, but haven’t meaningfully reduced their long books.” (emphasis ours)
The numbers: since July 31, long leverage is down a whopping 0.5pt to 128.8%, while short leverage is up 8.0pt to 85.1%, the 100th percentile over five years. Do the napkin math and gross leverage is roughly 214%, i.e., up, not down, since the Situational Awareness blowup.
Coppersmith is under no illusions about what that means if the pain continues:
“If the performance pressure continues, there’s certainly scope for further de-grossing through long sales and short covering, but it’s also worth recognizing just how much more defensive a lot of portfolios now look.” (emphasis ours)
And the de-grossing has already started in the very names the prime brokers were financing in Asia:
“Global Tech saw its largest percentage net selling on record since 2016, with semis accounting for 57% of US technology net selling. A pretty remarkable unwind taking place across some of the most popular areas of the market.” (emphasis ours)
UBS’ trading desk sees the same setup. Here is desk trader Torsten Sippel in his weekly note (Oct 18, available to pro subs):
“This week’s action looks like a positioning reset rather than broad equity liquidation, action very similar to the Situational Awareness driven unwind a couple months ago… That distinction matters given Hedge Fund net exposure has already fallen to the 30th percentile while gross remains above the 90th percentile on a five-year basis, leaving portfolios vulnerable to additional de-grossing if P&L pressure persists.” (emphasis ours)
Translation: nobody actually de-risked. The longs are still there. The banks simply asked clients to bolt on more shorts so the net looks tamer and the prime broker’s balance sheet usage looks lighter. That works beautifully… until longs and shorts move against the fund at the same time, which, as Leopold could tell you, is exactly what happened in July when AI infrastructure dumped and software ripped. A hedged book with 214% gross is still a 214% gross book.
The Payoff Comes Thursday
Why stretch so hard? Because it pays. Barclays’ equities arm is expected to report £865 million ($1.2 billion) in Q3 revenue on Thursday, per Bloomberg consensus, which would be its best third quarter since at least 2009, the year after it bought Lehman’s North American business. We are sure the Lehman reference is purely coincidental.
Prime brokerage has been the key driver of equities revenue across the Street this year, and the volatility that “fueled much of the surge in trading revenue” was itself largely a function of the leverage the prime brokers were extending. It’s a closed loop: banks lend to funds, funds bid up AI, AI volatility generates trading revenue, revenue justifies more balance sheet for prime. Right up until the loop runs in reverse.
Bottom Line
Barclays’ spokesperson insists the bank maintains “a disciplined approach to risk and returns.” Perhaps. But discipline usually means that when you hit a limit, you stop, not that you hold an auction to borrow capital from the rates desk so you can keep financing the hottest trade in Asia. And when the “solution” to clients’ bloated balance sheet usage is to have them pile on shorts, pushing short leverage to five-year highs while long books barely budge, the system isn’t less levered; it’s just levered in a way that looks better on the prime broker’s capital report.
With the BoE already examining London prime brokers’ Asian equity books, with UBS saying last week’s de-grossing looked like a replay of the Situational Awareness unwind, and with gross leverage still near record, we suspect the question isn’t whether Archegos 3.0 is out there, but which prime broker’s balance sheet it’s sitting on. The one that turned away Leopold may not be the one that turned away everyone.
We’ll check back after Barclays reports on Thursday, and listen carefully for whether anyone on the call asks about Asia.
More than 300,000 foreign nationals have had their U.S. visas revoked since President Donald Trump entered office for a second term, due to criminal activity, fraud, or threats to national security.
State Department spokesman Tommy Pigott said Oct. 20 that the pace of visa revocations by the Trump administration – as it reaches the two year mark of its four year term – has set a record.
“The Trump administration has revoked more visas at a faster pace than any administration in history,” Pigott wrote in a post on X. “Let the message be clear: we have zero tolerance for foreigners here on visas who break the law, commit fraud, or undermine our national security.”
A State Department official confirmed to The Epoch Times via email that the “vast majority” of revocations were due to criminal activity, public safety concerns, immigration violations, fraud, or other information indicating the foreign national was no longer eligible for a U.S. visa.
In 2025, the Bureau of Consular Affairs established a visa-vetting center in Washington, the official said, which led to the overturn of 23,000 of the 300,000 visas.
The majority of these were for criminal activity and other threats to public safety, the State Department official said, including 25 percent for assault and related offenses, 22 percent for driving under the influence, 7 percent for theft, and 7 percent for substance abuse or distribution. Other reasons for revocation included visa overstays and violations of student visa conditions.
Another 4,000 visa revocations targeted aliens who allegedly participated in facilitating birth tourism. These individuals attempted, at scale, to exploit U.S. law which grants citizenship to children born on U.S. soil.
The Supreme Court in a June 30 decision rejected the president’s executive order that aimed to limit birthright citizenship from children of illegal foreign nationals and temporary visa holders.
Following that ruling, the Department of Justice (DOJ) directed its federal prosecutors to prioritize investigations into birth tourism schemes. Attorney General Todd Blanche told The Epoch Times earlier this month that the DOJ is coordinating with other federal agencies to tighten the visa screening process to combat birth tourism.
In August, after the Supreme Court’s ruling, Trump issued two more limited orders for “Continuing to Protect the Meaning and Value of American Citizenship” and “Ending Birth Tourism” in an effort to restrict birthright citizenship consistent with historical exceptions recognized by the Supreme Court. The first of these has since been blocked in federal court.
The State Department did launch a birth tourism prevention task force in August, which has led to the revocation of visas in relation to birth tourism.
“One couple used a conference and a vacation trip to go shopping as cover stories to give birth to two children in the United States, lying about their travel purpose in two separate visa applications,” the agency previously said.
A Record Pace
In January, the State Department announced it had revoked 100,000 visas in the first year of Trump’s second term. By Aug. 10, the department said it had revoked another 75,000 visas in seven months.
Two months later on Oct. 1, that number increased by another 75,000 to a total of 250,000 visa revocations since January 2025.
“Every visa decision is a national security decision. Through continuous vetting on a scale never seen before, we are identifying and removing those who commit crimes, support terrorism, defraud Americans, or abuse our immigration system,” Pigott previously told The Epoch Times. “A U.S. visa is a privilege, not a right – and if you violate the terms of that privilege, you will lose it.”
Pigott’s Oct. 20 announcement that revocations have exceeded 300,000 shows the State Department has further accelerated the pace in recent weeks, with the overall rate more than double the 2025 level.
“We are taking, and will continue to take, action to keep our borders, and our nation, secure,” Pigott said on X.
The increasing amount of visa revocations is a sharp contrast from the previous administration. Pigott reported in January that the State Department, in the last year of the Biden administration, revoked approximately 40,000 visas.
A recent report by the Department of Homeland Security’s Office of Inspector General found the Biden administration took little action on visa overstays due to limited resources and a policy implemented by then-Secretary Alejandro Mayorkas, which reshaped how immigration authorities targeted foreign nationals for enforcement action.
As a result, the report found that from fiscal years 2021 to 2024, Immigration and Customs Enforcement (ICE) received more than 3 million leads about possible alien overstays, with 104,049 classified as potential threats to national security and the American public.
Only 496 investigations were opened and eight foreign nationals arrested, the report showed.
Bloomberg Drops $80 Million On Democrats’ Midterm Push: $24 Million To Everytown, $16 Million To House Majority PAC
Michael Bloomberg has sent about $80 million to Democratic causes in September and October, with at least $50 million aimed at House races and roughly $10 million more on the way, according to figures his team gave The New York Times. The filings that would confirm the gifts are not yet public: they are due this week, and some of the giving was still under way when the Times reported it Tuesday.
Former Mayor of New York City Michael Bloomberg delivers remarks at the Bloomberg Global Business Forum, on the sidelines of the 79th session of the United National General Assembly (UNGA) in New York City, U.S., September 24, 2024. Elizabeth Frantz | Reuters
The biggest House checks went to two groups: $24 million to Everytown for Gun Safety, which he co-founded, and $16 million to House Majority PAC, the super PAC aligned with House Minority Leader Hakeem Jeffries. Bloomberg is now the largest disclosed donor to both groups. His Everytown money also freed up House Majority PAC funds for a roughly $10 million joint ad campaign for eight women House Democrats who have worked on gun safety.
The rest, as itemized: $5 million to the super PAC allied with the League of Conservation Voters, $3.5 million to a group electing Democratic scientists and doctors, $2.5 million to a super PAC backing Texas Senate nominee James Talarico, $8 million across about six battleground governor’s races, and $2.5 million to a super PAC backing New York Gov. Kathy Hochul. Those seven gifts add up to $61.5 million, so about $18.5 million of the $80 million is not broken out by recipient, and one donation backing Pennsylvania Gov. Josh Shapiro, a possible 2028 candidate, carries no amount.
Howard Wolfson, Bloomberg’s political adviser, said the donor “believes in participation in our democracy,” that “resources matter in campaigns,” and that he “expects a result.” “The difference between 221 and 230, in terms of the House majority, really matters,” Wolfson said. Jeffries said Bloomberg “played an incredibly instrumental role” in the 2018 midterms and that his support “will once again help Democrats flip the House.”
Bloomberg, 84, is concentrating on the House because Democrats are favored to win it, while the Senate is seen as a toss-up and other big donors are shifting money there. Wolfson described him as a centrist who is worried about the party’s leftward drift, particularly on Israel, and said he is not funding candidates backed by the Democratic Socialists of America. He has not picked a 2028 candidate but would likely back one with a similar outlook.
The money lands against a Republican spending wave. Trump told reporters he plans to steer $400 million to $500 million to Republicans in the midterms, Reuters reported in September. The Trump-affiliated No Going Back PAC had reserved more than $74 million of ad time across 15 House races and Senate races in six states, MAGA Inc. put $10 million into the Texas Senate race, and Musk’s America PAC has spent more than $7 million on digital ads, texts, calls and mailers. The Times describes Democrats as watching nervously while Musk and Trump’s super PAC spend hundreds of millions, a question we took up earlier this month in asking whether Musk can rescue Republicans.
The party committees are lopsided. The Republican National Committee started September with about $126 million and was down to $76 million by Oct. 14, after sending more than $44 million to the National Republican Congressional Committee and the National Republican Senatorial Committee, according to a Times report. The Democratic National Committee, by contrast, has reported negative cash on hand, counting debt, for nearly the entire 2025-26 cycle.
Bloomberg’s fall budget resembles his 2018 midterm spending, which his team regards as his most effective campaign. That year he pledged at least $80 million in June and CBS News reported his total reached $110 million by late October, when Democrats took the House. Since then he has spent more than $1 billion on a failed 2020 presidential run and, this spring, $11 million to help Assembly member Micah Lasher win the Democratic primary for Jerrold Nadler’s seat.
META Erases Most Afterhours Gains After CFO Warns “Significant Investment” Will Raise Serving Costs
Update: We concluded our prompt earnings wrap (below), by saying that the question now is whether Zuck will scare investors on the call by noting that capex may raise much more.” Well, CFO Susan Li did not help the case saying that “Muse’s compute intensity means that expanding its user base will require significant investment, and we expect total serving costs to rise. At the same time, we expect to improve compute cost efficiency by more than 10-fold over the next year.”
Translation: much more capex spending is coming, as in MUCH more, and not just the record $59BN implied by the 2026 capex guide…
… but much more in 2027 and beyond (sadly the company no longer provides guidance beyond this year). Which is a problem for a company which just joined Amazon in watching its free cash flow turn negative.
The stock did not like it, and after hitting a session high of $748.8, it has erased almost all after hours gains.
* * *
Earlier
In our preview of Meta’s earnings, we laid out expectations…
Family of Apps operating income estimate $23.96 billion
Reality Labs operating loss estimate $5.21 billion
Operating margin estimate 32.5%
EPS estimate $3.56
Ad impressions estimate +12.3%
Average price per ad estimate +11.2%
Average Family service users per day estimate 3.66 billion
… and also sketched a setup of what to expect from earnings:Â
expectations at 9/10,
positioning at 8/10,
Mag 7 exposure at a record,
an implied move that Goldman calls cheap,
a buyside bar for 2027 spending that’s $50 billion above the Street,
a product whose growth may already have peaked, and…
an equity raise that the majority of the buyside expects as soon as the stock lets it.
Bloomberg points out that at 19x forward earnings, Meta is the second-cheapest Mag 7 stock after Nvidia. Well, it probably should be.
The bull case is that Zuckerberg beats, guides Q4 to $75 billion, drops a Muse DAU number (although with Claude just launching its own agents, it is about to get crowded) and keeps 2027 vague, and the stock grinds to $800 and the equity offering. The bear case is that he does all that and then says the words “notably larger” about 2027 capex. Judging by Meta’s last two Q3 prints (-4% and -11% last October), and the last two prints overall (-9% and -8%), we know which one the tape has favored lately: the market keeps paying Meta for products and charging it for the bill.
With that in mind, here’s what Meta reported moments ago for its Q3 quarter:
Family of Apps operating income $17.12 billion, -31% y/y, beating estimate $23.3 billion
Reality Labs operating loss $4.13 billion vs. loss $4.43 billion y/y, estimate loss $5.13 billion
Â
EPS $3.83 vs. $1.05 y/y, beating estimate $3.57
Operating margin 20% vs. 40% y/y
Here is how the numbers came relative to expectations:
There was some notable weakness in the company’s core ad business: while average ad prices rose, impression growth actually collapsed.Â
Ad impressions +10% vs. +14% y/y, estimate +12.3%
Average price per ad +14% vs. +10% y/y, estimate +11.2%
A few more highlights from the quarter:
Meta Establishes New  Non-Voting Class C Common Stock
Meta Lifts Expense Outlook to Incorporate $9.9B Legal Charge
Looking ahead, Meta shared the following Q4 revenue guidance: $73-76BN, vs sellside estimates of $73.6BN; recall in our preview we noted that the Street is at ~$73.5 billion (+24% FXN), with JPM’s Schilsky saying investors “will tolerate no more than a 1-point FXN decel on the top end of the guidance range,” so the expected guide is $72-75 billion. Deutsche hears a slightly lower top end, “roughly $74-74.5bn.”
So Q4 guidance roughly in line with expectations… however that takes place at the expense of another capex increase, with Meta now expecting capex in the range of $135-$145, up from $130-$145 billion.Â
Doing some quick math here, we find that as a result of underspending on capex in 2026, META now has to spend as much as $59BN in one quarter, an absolute record considering its previous record was $34.9bn… this quarter. It will be interesting to see what META spends all this money on.
But wait, there’s more because remember capex is just half the story since Meta can book data center spending either as capex (building it) or opex (leasing it from the likes of Crusoe), JPM said to watch the sum: “Buyside Consensus for 2027 Opex + Capex is in the range of $435B to $475B – that’s a midpoint of $455B.”Â
In this context, Meta raised its expense outlook to incorporate the $9.9 billion charge related to legal proceedings recognized in the third quarter, and now expects full year 2026 total expenses to be in the range of $175-179 billion. We will circle back once we calculate what all this means for the company’s blended all in opex and capex for 2027 but it will be big.
Some more from the company:
Meta Establishes New  Non-Voting Class C Common StockÂ
Meta Lifts Expense Outlook to Incorporate $9.9B Legal Charge
“Excluding the third quarter legal charge, we continue to expect 2026 operating income to be above 2025 operating income.”
“We now expect full year 2026 total expenses to be in the range of $175-179 billion.”
“We expect fourth quarter 2026 total revenue to be in the range of $73-76 billion.”
To the last point, news broke today that Meta plans to introduce a new class of non-voting stock that it could use to fund its heavy spending on artificial intelligence, according to a Semafor report. The plan could be announced as soon as Wednesday during the company’s quarterly earnings report, the publication said, enabling Meta to use the stock to fund acquisitions and AI spending without diluting CEO Mark Zuckerberg’s control of the company.
Following the earnings release, the initial stock reaction was muted but shares have now picked a direction – the stock was up 4% after hours, before easing back on the gains, and up about 2% at last check.Â
The question now is whether Zuck will scare investors on the call by noting that capex may raise much more.
