It only took two weeks of fighting for a majority of polled Americans to conclude that the war on Iran benefits Israel more than the United States. If comments from a prominent, former Navy SEAL and graffiti written in the dust of a US Air Force jet in the Middle East are any indication, many American service members are convinced their participation in the war only serves the agenda of the State of Israel and its prime minister, Benjamin Netanyahu.  

On Sunday, Quincy Institute for Responsible Statecraft executive VP Trita Parsi posted a photo that he said was sent to him “from the field” showing temporary graffiti one or more service members had written in the dust of a military aircraft: 

Some messages on what looks like a Boeing KC-135R Stratotanker satirically embrace the idea that American service members should be enthusiastic about serving Israel: 

• “Be a good goy and do what Israel tells you to!!!” 
• “I LOVE ISRAEL. I AM A GOOD GOYIM.” 
• “BiBi’s Cucks” 

Some clarifications are in order. “Bibi” is a nickname used by Netanyahu, and “cuck” refers to weak men who submit to other men’s domination. “Goy” and “goyim” are, respectively, singular and plural Hebrew nouns used to refer to non-Jews. Those two words aren’t inherently derogatory toward non-Jews. However, like other labels for people, they can be used derisively or as an “outsider label” depending on the context. For example, in an email conversation with AI scientist Roger Schank, convicted sex-criminal Jeffrey Epstein wrote, “This is the way the jew [sic] make money… let the goyim deal in the real world.”

Epstein made an appearance on the dusty wing flap too. Reflecting a widespread but not-yet-proven theory that Israel coerced Trump into starting a war on Iran by threatening to release damning information obtained by Epstein, one of the messages repeats a common play on words that turns US “Operation Epic Fury” into “Operation Epstein Fury.” 

Another message mocks the Trump administration’s recurring claims that a deal to end the five-month-old war and open the Strait of Hormuz is imminent: “Peace Deal #64 Incoming… ALL THIS FOR THE HOLY LAND.” Another mocks the surveillance state that’s rising at home while service members who are sworn to defend the Constitution are sent overseas for an unconstitutional war launched on false premises: “I love Flock Cameras.”  

As this is written, mainstream media isn’t touching the story with a ten-foot-pole, despite the sound reputation of Parsi, who has vouched for its authenticity. The media silence about the messages has thus far relieved the Pentagon from having to issue a statement about them. If it does, we can expect the DOD to claim the graffiti is unrepresentative of how most US service members feel.

Parsi says a service member told him that journalists have no idea how low morale is. “What people in the media don’t understand when they compare past conflicts to this one, is this operation has no morale behind it,” the military man told Parsi. “That makes a world of difference to service members deployed to undesirable locations indefinitely.”

In an interview with Tucker Carlson last month, podcaster and former Navy SEAL Shawn Ryan gave some blunt insights into similar feelings among special operators still on active duty:

“I just had some buddies leave and everybody knows what this is. Everybody knows they’re fighting for Israel. It’s a joke. This is not me saying this, this is them. This is the guys that are gonna go over there in Tier 1, Tier 2 units that are joking around, saying ‘this isn’t even for us.’

Throughout history, that’s not a winning strategy. If they don’t believe in what they’re potentially going to do…and they know it’s not for the United States, it’s for a foreign country — like, the fight’s out of the dog, buddy...They know it’s not for us. They’re not defending our country.”

Ryan said he’d just hosted a pre-deployment party for an operator, who was fixated on the grim reality of what service in the war on Iran is really about. “That’s all he was talking about. And it’s fucking sad…like, why don’t you just get out, man?” 

Shawn Ryan just said the quiet part out loud on Tucker:
“Everybody knows they’re fighting for Israel. It’s a joke.”

Active Tier 1 and Tier 2 guys are openly joking: “Yeah… this isn’t even for us.”

“They know it’s not for the United States. It’s for a foreign country.”

“They… pic.twitter.com/sJN20gUJ0b

— Defiant Ghost (@TheDefiantGhost) July 24, 2026

Thanks to reporting on the extent to which the Israeli government went to sell Trump on breaking his campaign promise to be a “peace president,” it’s been increasingly common to hear the war being characterized as a “war for Israel.” Having convinced America to attack its chief regional rival — in a war that has killed at least 18 service members and wounded more than 600 others — Israel is now abstaining from direct participation.

As far-right finance minister Bezalel Smotrich said last month, “The State of Israel has no interest in joining the contained confrontation between Iran and the United States. The current situation is the best one for us.”

Via Remix News,

Meta’s Facebook and Instagram platforms have begun displaying targeted warning messages to users searching for news or information related to mass immigration, including terms such as “Ceuta.”

The prompts caution users to “be careful when searching for migration info” and include a prominent link or button offering “help with moving to a new country.”

🌍🔴BREAKING: Facebook is now displaying a message warning users to be “careful when searching for migration info” when they search for news related to mass immigration, including keywords like “Ceuta.”

If users click on the new link, they will be directed to a page that offers… pic.twitter.com/EherEJiMJX

— Remix News & Views (@RMXnews) August 17, 2026

Clicking through takes users to a Meta Help Center page titled “Help is available if you want to move to a new country.” That page, created in consultation with experts from the International Organization for Migration (IOM) and the Organization for Security and Co-operation in Europe (OSCE), provides tips and guidance to help migrants enter Europe and other states.

The site encourages regular migration, compliant with the laws of origin, transit, and destination countries, compared to illegal migration, which it describes as dangerous and likely to expose people to violence, exploitation, and abuse.

The resource further directs users to the UNHCR website for information on asylum procedures, resettlement options for recognized refugees, and family reunification. These programs are fueling mass immigration into Europe and North America, often through legal channels, which offer a significantly larger demographic threat than illegal channels.

It also references IOM services and, in related materials and app descriptions circulating with the prompts, points toward the IOM’s MigApp. That mobile application is officially branded by the UN migration agency as a tool for “empowering migrants,” offering information on visas, health regulations, risks, money transfers, document storage, and access to IOM programs.

The feature appears to have rolled out recently and has drawn attention amid a surge of irregular migrant crossings into the Spanish enclave of Ceuta. In late July 2026, tens of thousands of people attempted to enter Ceuta by swimming or scaling border fences, with reports of dozens of deaths.

Investigations showed that many of the attempts were coordinated through large public Facebook groups that shared maps, distances, equipment recommendations, and calls for additional crossings. Meta removed multiple groups after media reports, stating it monitors the situation in real time and removes content that facilitates human smuggling.

Critics argue that Meta’s messaging goes beyond safety warnings and actively steers users, potentially including those researching or considering irregular routes, toward UN institutions that support asylum claims and migrant empowerment. Fox News correspondent Bill Melugin highlighted screenshots of the Instagram interstitial, noting that the “get migration info” pathway leads directly to UN resources for asylum seekers and the empowering-migrants app.

Dan Lyman wrote on X that “journalists in Europe have noticed this ‘guide’ when conducting searches on Instagram for ‘Ceuta.’”

Lyman further notes that a reporter told him, “It’s a guidebook to migration when people are searching for illegal immigration.”

Journalists in Europe have noticed this “guide” when conducting searches on Instagram for “Ceuta.”

“It’s a guidebook to migration when people are searching illegal immigration,” a reporter told me.

This is brand new.

A prompt pops-up with a query followed by a detailed… https://t.co/RXPd4RqQWb pic.twitter.com/GMsChgnZkh

— Wid Lyman (@Wid_Lyman) August 16, 2026

The EU knows that images like Ceuta are a boon to right-wing parties. For those seeking to come to Europe, there are many doors open. This new prompt from Meta may serve as a guidebook for mass immigration through the legal channels the EU desires.

Read more here…

Following up on our “Winter Is Coming: Europe Faces Twin Diesel And NatGas Crunch“ note earlier this month, which focused on Europe as a whole, UBS analysts focused on Germany’s natural gas inventories Monday morning and warned that levels are alarmingly low for this time of year, raising the risk of elevated prices and a renewed supply crunch if the Northern Hemisphere experiences a severe winter.

Simon Penn, a London-based UBS macro strategist, wrote earlier today that Germany’s NatGas storage is just 48% full, compared with 65% a year ago and 75% during the 2022 energy crisis. 

We would go a step further: inventories are now at their lowest level for this time of year in 17 years.

Penn added more color:

Economist Felix Huefner sees Germany hitting 65% in November, compared to the government target of 80% and the EU’s target of 90%. This generates a number of risks. 

A surge in demand and hence gas prices if Germany attempts to achieve its targets; increased pressure on Germany’s fiscal position if the government needs to use Trading Hub Europe (THE) to replenish stocks; pressures elsewhere in Europe as German demand crowds out other national buyers; Germany’s regasification facilities are limited which means even if it can find LNG supply, it can’t necessarily convert that to stored gas. Hence, a gas shortage could ensue late winter anyway. 

The ECB estimates that a 10% increase in wholesale gas prices adds 0.6pp to Eurozone headline inflation. In addition, all that is likely to place downward pressure on German GDP, which is already threatened by the consequences of a near-dry Rhine river. There is now a mere 10cm of navigable depth at the Kaub pinch point – in February it was 400cm and a year ago 200cm. Cargo barges are down to 10-20% of capacity to stay afloat.

Circling back to our Aug. 7 “Winter Is Coming” note, we warned that it is not just a global diesel crunch keeping Goldman’s Samantha Dart up at night. NatGas is another mounting concern.

Continued disruption through the Strait of Hormuz, compounded by historically low Rhine River levels, is slowing Europe’s effort to rebuild NatGas stockpiles. That risk is now materializing in the inventory data.

Here is where Europe stands in terms of NatGas storage:

At this point, Europeans had better hope that a strong El Niño would produce relatively mild weather. Otherwise, the continent could face a cold and extremely expensive winter.

Authored by Kenneth Timmerman via American Greatness,

Americans pay little attention to Europe, other than to sneer at the Euro-elites and bemoan the fecklessness of European leaders.

I am guilty of both sins. Mea culpa.

But I am also aware of the coming existential crisis facing Europe as a whole and the European Union quite specifically.

It comes in several flavors, and all of them are bitter.

First is the shock and embarrassment posed by the influx of 72,000 North African Muslim wannabe migrants into Ceuta, one of two tiny Spanish enclaves in Morocco, just miles away from the Spanish mainland near Gibraltar.

The inability—or unwillingness—of the Spanish authorities to repulse them has provoked a Europe-wide reaction, prompting Italy’s center-right prime minister, Giorgia Meloni, to impose passport controls on visitors from Spain for the first time since the Schengen accords of 1995 created a “borderless” European space.

Spain retaliated last week, imposing controls of its own on visitors from Italy.

This week Meloni teamed up with her center-left Danish counterpart, Mette Frederiksen, to jointly condemn uncontrolled migration.

“We are both proud of Europe’s Christian cultural heritage and want to protect it,” they said on Monday. “We expect those who come to our countries and choose to make Europe their home to respect our values and not seek to impose ways of life on us that we do not share.”

Meloni drafted a letter to European Commission President Ursula von der Leyen condemning lax EU immigration policies, which was joined by Frederiksen and 21 EU leaders.

Immigration has been a long-simmering issue since German Chancellor Angela Merkel opened the floodgates to hundreds of thousands of Syrian “refugees” in 2015. The Ceuta stampede is just the latest chapter.

Fabrice Leggeri, a Frenchman who was executive director of the EU Border and Coast Guard Agency from 2015 to 2022, fought tooth and nail to standardize EU immigration procedures and to transform his bureaucratic backwater into a real law enforcement agency.

He was stymied by the European Commissioner in charge of Home Affairs, Ylva Johansson of Sweden. “Don’t worry,” she said. “You don’t need guns and uniforms because migrants come in search of love. Europe is an aging continent, so whether you like it or not, it is your job to welcome migrants.”

Next comes EU enlargement.

Standing at the gates to join the EU’s 27 member states are tiny Montenegro and Albania. Then comes Iceland, should its citizens approve a resumption of EU membership talks in an upcoming referendum.

While only Albania, which is predominantly Muslim, is controversial, their accession could open the door to membership talks with Ukraine and Serbia.

Ukraine would require a peace deal with Russia, which would be less likely should Ukraine be rewarded with EU membership. Serbia, a Russian ally and gateway to the Russian economy, poses its own problems.

And finally, there is the whole question of democracy and freedom.

EU citizens rail incessantly over the often ridiculous regulations enacted by the unelected bureaucrats of the European Commission that affect their daily lives.

Many of these are motivated by Europe’s powerful “Green” parties and lobbyists. Others stem from the left-wing, anti-capitalist, anti-farmer bias of the Eurocrats.

One case in point: the reintroduction of wolves onto agricultural lands where the predators had been eradicated generations ago. Today, the wolf packs are protected as endangered species even as they devastate sheep herds from Sweden to southern Italy.

I know farmers who brave the authorities and secretly hunt down wolves endangering their livelihoods. They operate as a veritable underground resistance movement, communicating using coded texts, always watchful of the police.

It’s a running joke that a young Swedish girl could get gang-raped by Syrian immigrants, and the police wouldn’t lift a finger. But if a farmer got caught killing a wolf, they would exhaust every investigative and prosecutorial resource to put him away for years.

European Commission President Ursula von der Leyen is certainly aware of the dissenters among the European Parliament, mainly from the populist or center-right parties.

But instead of accommodating them, she is attempting to reinforce the powers of the unelected Commission by doing away with the existing rule of unanimity when it comes to foreign policy decisions.

For years, Hungarian leader Viktor Orbán vetoed European Commission policies that invariably criticized Israel, supported the Palestinians, or criticized the United States.

His election loss only emboldened Ms. von der Leyen, who frequently clashed with Orbán personally and in public.

Now she wants to allow a simple majority of member states to approve foreign policy dictates, a shift that would essentially create the “tyranny of the majority” America’s founders warned about 250 years ago.

Former Belgian Prime Minister and European Council President Charles Michel is scathing in his criticism of von der Leyen. “Today, the Commission is trying to take control. That’s not in line with the [EU] treaty,” he told a Belgian magazine in April. “There is super authoritarian governance.”

Much but not all of those new powers came during the COVID years and in response to the war in Ukraine. But the anti-democratic gene runs deep among the Eurocrats.

Former Czech President and Prime Minister Václav Klaus lived through decades of Soviet Communism imposed on his country after World War II. Already in 2009, he was warning about the lack of democratic institutions within the EU.

“The present decision-making system of the European Union is different from a classic parliamentary democracy, tested and proven by history… Here, only one single alternative is being promoted, and those who dare think about a different option are labelled as enemies of European integration.

“Not so long ago, in our part of Europe we lived in a political system that permitted no alternatives and therefore also no parliamentary opposition. It was through this experience that we learned the bitter lesson that with no opposition, there is no freedom. That is why political alternatives must exist.”

Europe and the EU are at a crossroads.

Down one road, Europe will become increasingly authoritarian and increasingly centralized, while its founding cultures will be increasingly marginalized and demeaned in favor of Muslim immigration and multiculturalism. These were the faults that led to Brexit, Britain’s withdrawal from the EU.

Down another road, Europe will return to its roots, celebrate its diverse cultures and its Christian and Jewish heritage, and honor the wishes of its member states and their people.

Count me skeptical, but I don’t see that democratic alternative on the horizon, at least not yet.

Authored by Andrew Korybko,

He might be flirting with a radical policy recalibration even if he soon changes his mind…

Trump unexpectedly announced that the US will “substantially reduce” its participation in the annual Ulchi Freedom Shield large-scale joint military drills with South Korea that he was apparently unaware of till just recently and which began this week. He described his decision as being “Based on my very good relationship with Kim Jong Un” and aimed at not “send[ing] a signal that is totally inappropriate and hostile”. He also complained about its costs and South Korea’s refusal to help the US fight Iran.

Trump’s favor to Kim was unexpected because he mentioned North Korea alongside Russia, China, and Iran as “US adversaries” just last month who have the ability to manipulate US elections. His Under Secretary of War Elbridge Colby was also in Southeast Asia in early August, where he was replicating the NATO 3.0 concept through what can be called AUKUS+. While it’s mainly aimed at containing China, fearmongering about North Korea could raise its appeal among some South Koreans and Japanese.

On that topic, those two states are US mutual defense allies, and they share similar threat perceptions of China and North Korea. They’re also rapidly militarizing, with South Korea planning to build its first nuclear submarine with American assistance and Japan considering abandoning its Three Non-Nuclear Principles, both of which have heightened regional tensions to the US’ divide-and-rule benefit. The same goes for the latest Russian-Japanese tensions over the Southern Kurils in which the US backs Japan.

It was therefore completely unexpected that Trump would do Kim a favor as significant as “substantially reducing” the US’ participation in its annual large-scale joint military drills with South Korea since this goes against all of the abovementioned policies. While only he can account for his reasons, and it’s possible that he simply felt like it and there’s nothing deeper, it can’t be ruled out that he has some plan in mind. His South Korean counterpart’s recent call to resume talks with the North could provide a hint.

Trump might thus be considering the resumption of his own talks with Kim, whether bilaterally like during his first term and/or somehow connected with his “Board of Peace” initiative, the motivation of which could be a blend of personal and geostrategic calculations. As regards the first, he might want to cement his legacy as a “president of peace” like he’s previously described himself as while also distracting from the political-military debacle of the Third Gulf War that he initiated earlier this year.

On the geostrategic front, Trump might fear that Russia, North Korea, and China could strengthen their military-security ties to the point of a de facto alliance in the face of the challenge that AUKUS+ poses to them all, which could risk World War III by miscalculation if North Korea carries out more nuclear and/or missile tests amidst worsening regional tensions. Essentially, the speculative resumption of Trump-Kim talks could therefore be for escalation-control purposes, though only if they’re successful.

It’s admittedly premature to analyze anything beyond what was already mentioned in this piece, and even that which was written is reasonable conjecture, but it’s nevertheless notable that Trump unexpectedly did such a significant favor for Kim in spite of the rising regional tensions that the US is responsible for. After all, this single move goes against all of the US’ policies in Northeast Asia, so it’s not far-fetched that he might be flirting with a radical policy recalibration even if he soon changes his mind.

More than two months ago, long before most Wall Street analysts had any clue that the bulk of the AI buildout commitments were diligently hidden in various off-balance sheet SPVs and other (perfectly legal) accounting gimmicks, we wrote a lengthy article detailing just that, and explaining why far beyond the $1 trillion (and rapidly rising) in annual plain vanilla capex — all of which now has to be funded through debt issuance since free cash flow across the hyperscaler universe is negative for the foreseeable future (if not forever) — which most pundits obsess over daily…

… the real risk was in the “The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle.”

The $1.8 Trillion Off-Balance Sheet Time Bomb At The Heart Of The AI Supercycle https://t.co/2IAxYrTXjL

— zerohedge (@zerohedge) June 12, 2026

We followed up on this critical topic after the latest batch of hyperscaler earnings in late July, which revealed that the nearly $2 trillion in spending commitments had exploded in the second quarter, with just GOOGL and META north of $1.5 trillion, which prompted us to conclude that “across all hypers, off BS commitments are now $3+ trillion, double in one quarter.”

*MICROSOFT: LEASES THAT HADN’T COMMENCED $329.1B AS OF JUNE 30

we will be updating the off balance sheet obligations/debt for Q2 soon. It will probably rise by $1TN+ to $3TN.

— zerohedge (@zerohedge) July 29, 2026

The SPV bubble is batshit insane

GOOGL is $826BN and now Meta said it has already committed almost $700 billion in future AI spending (BBG).

Across all hypers, off BS commitments are now $3+ trillion, double in one quarter.
GLTA https://t.co/HyV9ZGgFu5

— zerohedge (@zerohedge) July 30, 2026

Many, traditionally those who had no idea what we were talking about or the implications of the above findings, took the conventional route and either mocked or slighted what we had found. 

But not everyone: first it was Nvidia which, scrambling to distance itself from the circular financings that were meant to fund precisely these kinds of gargantuan off balance sheet SPVs, unveiled its $500 billion arrangement with a handful of private credit firms (an arrangement that was nothing new, as Nvidia had already done just that particular deal on numerous occasions, and it merely formalized it in the form of an open-ended MOU).

Second and more important, two months after our first warnings, the WSJ finally caught up, and in an article over the weekend titled “Why Big Tech’s AI Spending Is $3 Trillion Higher Than It Seems“, it confirmed everything we have been reporting since early June.

Not to put too fine a point on it, but WSJ authors Rudegeair and Santilli echoed everything we said in our original report more than two months ago, to wit: 

Each quarter, big tech companies disclose their massive capital expenditures on artificial-intelligence infrastructure, from data centers to chips. But those figures don’t come close to expressing the full extent of future spending to which Google parent Alphabet, Meta Platforms, Oracle and many others have committed. That is because a huge swath of their coming financial obligations aren’t reflected on their balance sheets.

Nine top tech companies had some $3 trillion of off-balance-sheet commitments mostly related to AI, according to a Wall Street Journal analysis of footnotes in their most recent securities filings. Those obligations are growing faster than traditional “capex,” which totaled about $600 billion over the past year they reported, and were about triple what the companies owe under their outstanding leases and long-term borrowings.

Back in June, we showed this staggering surge in off balance sheet purchase commitment as follows. Needless to say, the latest number is substantially higher.

And this is how the WSJ compared side by side the on (capex) vs off balance sheet obligations at the 6 hyperscalers. Needless to say, the management teams at the big AI spenders are doing everything in their power to cover up just how spectacularly massive their true spending plans are.

The WSJ also takes a look at the off B/S SPVs we have been discussing ever since we explained back in January why Meta’s Beignet funding model will be imitated by all of its peers throughout 2026 and onward.

As a reminder, META is already neck deep in off-balance sheet debt. Here is a schematic of its $27.3 billion SPV with Blue Owl “Project Beignet” for the Hyperion data center. None of this touches META’s balance sheet.

Expect hundreds of billions of these in 2026 https://t.co/794EgSiiZ9 pic.twitter.com/7hMyVW6Lno

— zerohedge (@zerohedge) January 29, 2026

Of course, that’s precisely what happened and this is how the WSJ lays out the funding of Meta’s gigantic “Hyperion” data-center project in Louisiana, which is the size of about 1,700 football fields, and which “helps explain how big obligations wind up off tech companies’ balance sheets.”

Meta initially agreed to lease Hyperion for a four-year term starting in 2029, with options to renew for up to 20 years. It guaranteed that it would make bondholders whole if it doesn’t stay the entire two decades. The company doesn’t think payments under that guarantee are probable, so it hasn’t recorded any liability on its balance sheet.

In accordance with accounting rules, Meta’s Hyperion lease obligations will remain off balance sheet until it starts paying rent. It said its aggregate initial lease commitment is about $12.3 billion. Meta disclosed $347 billion in total obligations for leases that haven’t kicked in yet, including for Hyperion, as of June.

This is the WSJ’s version of our graphic from 8 months ago: 

Remember what we said about expecting “hundreds of these in 2026?” Apparently it came as a surprise to the WSJ, which writes that “across the companies the Journal analyzed, promises of payments under these uncommenced leases totaled $1.2 trillion in off-balance–sheet obligations, or about four times more than what was disclosed a year earlier. In addition to Meta, the Journal reviewed commitments for Alphabet, Amazon.com, Microsoft, Oracle, Nvidia, Broadcom, SpaceX and Advanced Micro Devices.”

Of course, as we explained two months ago, the uncommenced leases are just a part of the off B/S liabilities. There’s much more: 

“Data centers get stuffed with a lot of hardware, including the Nvidia chips that are used to train and run models and memory chips that store information. To buy all that, companies sign long-term contractual agreements well in advance to lock in production from their suppliers.”

… which is why Nvidia has the most to lose if funding deals that enable the AI bubble aren’t in place, which is precisely why the company rushed and forced the various private credit firms to deliver the $500 billion deal announced last week. Putting a number to it: 

“Those and other purchase obligations at the companies the Journal examined stand at a whopping $1.9 trillion. Under accounting rules, purchase commitments typically remain off balance sheet until a product or service is delivered.”

The uncommenced leases and purchase commitments are the bulk of the off balance sheet “ticking time bomb” we discussed in June. Only then it was $1.8 trillion. It has since grown by 50% to $3 trillion…. in two months! And this is how the WSJ redid another one of our June charts:

What happens next depends very much on whether or is an optimist… or not.

For the former, the WSJ says that “there are reasons to believe tech companies will make good on all their obligations. Optimists see the skyrocketing demand for AI tools—which has lifted the stock market and led to shortages of key hardware—as a proof point that demand is going to be strong for years, and the money to pay off all these bills will be rolling in.”

As for the others, well the problems are only starting. First, this unprecedented explosion in off balance sheet liabilities in “a worrying sign that some tech companies that once seemed to have fortress balance sheets have needed to tap the capital markets frequently.”

Alphabet and Amazon recently posted results showing negative free cash flow, meaning their capital spending exceeded the cash they brought in from operating their businesses.”

And that is before considering the implications of trillions in off-balance–sheet commitments. Whether or not the revenues ever arrive, purchase commitments and signed leases can’t be canceled, for the most part. 

The worst case scenarios is that these tech giants companies, which until recently had pristine balance sheets will be paying an expensive tab for infrastructure that they can’t profitably use “if things go wrong.” These obligations could also lead increasingly indebted companies to have to borrow even more.

One way such a catastrophic scenario may happen, is if Chinese open-weight models accelerate their market share grab by dramatically undercutting the token prices of frontier models (as they have been doing), and lead to a collapse in hyperscaler profits as compute creation shifts to China and its far cheaper chips, not to mention far more abundant sources of cheap energy… which is precisely what is happening right now, with token prices in historic free fall, crashing more than 50% in just the past few weeks as Chinese open-models unleash a historic race to the bottom.

And since the entire WSJ is effectively re-print of what we said in early June, we will leave readers with our conclusion from then as it is just as accurate today as it was two months ago (and $1.2 trillion less in off balance sheet obligations).

Vendor financing and repurchase-style arrangements mean a single counterparty’s stress can propagate through several balance sheets at once. Think of it as rehypothecated leverage. Concentration compounds it: the >$2tn of remaining performance obligations across major AI players is built on a handful of very large, long-duration contracts, so the backlog that justifies the spending is also a concentrated counterparty exposure.

The off-balance-sheet items aren’t fraudulent or even unusual accounting — they’re mostly standard treatment. The hazard is timing and visibility, and it shows up in three deferred effects:

Capex is being committed ahead of the revenue and free cash flow meant to support it; capex revisions have run well ahead of sales and FCF revisions. The depreciation from all this spending is largely still deferred, rising construction-in-progress balances (ORCL ~+200%, META ~+90% YoY) mean today’s margins haven’t yet absorbed the expense already locked in. And when it does land, cumulative depreciation for MSFT, ORCL, META, and GOOGL could exceed $520bn over three years, pushing depreciation as a share of revenue sharply higher (ORCL potentially 7%→28%, META 9%→19% by FY28). To hold margins, every other cost line has to fall — which only works if sales rise to match, and so far they haven’t kept pace.

Even a careful analyst can’t fully size the exposure, because classification and disclosure are inconsistent. Whether a compute-capacity deal even counts as a lease turns on judgment calls (does the contract specify a particular GPU/rack, who controls the workloads, etc.). Disclosure varies accordingly: Nvidia quantified $30bn of cloud-service commitments and Oracle $10bn, while Meta declined to quantify the cloud-capacity portion of its $238bn in commitments. That inconsistency means any cross-company comparison of “true” leverage rests on differing materiality judgments — so the aggregate numbers, large as they are, are themselves uncertain.

The good news is that, for now, the risks aren’t an imminent solvency problem, but a set of timing and disclosure mismatches – a deferred depreciation wall, capex running ahead of monetization, leverage migrating into the supplier/private-credit layer, and classification judgments that make true capital intensity hard to compare across companies. For their part, hyperscalers have taken advantage of the current moment of market euphoria to raise as much capital as they can, aware that the window will eventually shut. The question is when sentiment turns, and when all these funding conduits are shut, will there be enough funding to sustain the AI revolution for the foreseeable future. Of course, this question becomes moot if demand shifts, and instead of buying the latest and greatest offering from Anthropic or OpenAI for a stratospheric number of tokens, consumers and enterprises turn to dirt-cheap alternatives from China which offer 90% of the performance of frontier models for a fraction of the cost, then all bets are off.

Much more in our full must-read (as the WSJ clearly found) report from June, as well as the  “AI Ecosystem: Charting Recent Trends“  report available to pro subs.

Earlier today we reported that China’s highly touted DRAM memory maker CXMT recently surpassed Tencent to become China’s most valuable company.

That may be just the start, because hot on the heels of the biggest Chinese IPO this decade, comes that “other” Chinese memory maker, Yangtze Memory Technologies Corporation (YMTC) which has now broken into the world’s top three NAND flash memory suppliers by volume for the first time, marking a milestone for China’s semiconductor ambitions as it strives to narrow the revenue gap with global rivals in high-value data-center storage.

The Wuhan-based chipmaker captured 14% of global NAND bit shipments – a measure of total storage capacity shipped rather than total chip units – in the second quarter, narrowly overtaking Japan’s Kioxia, according to data from Counterpoint Research published on Wednesday.

Samsung Electronics retained the global lead with a 25% market share, while SK Hynix – including its Solidigm subsidiary – was second at 22%.

YMTC’s shipments climbed 22% year on year and 5% quarter on quarter, driven by expanding supplies to domestic electronics manufacturers and the increased production of its latest-generation 3D NAND architecture, Counterpoint said.

Despite its surge in shipment volume, YMTC’s market position lags in dollar terms. The company ranked fifth globally in NAND revenue for the quarter, placing it behind both US-based Micron Technology and Kioxia.

The gap stems from YMTC’s heavy exposure to lower-margin consumer products and a relatively small footprint in enterprise solid-state drives (eSSDs), which command higher pricing.

The product mix imbalance is increasingly squeezing revenue as artificial intelligence reshapes global storage demand.

eSSDs accounted for 48% of total global NAND bit shipments in the second quarter, nearly doubling their 26% share from a year earlier. Counterpoint attributed the surge to a broader shift in AI workloads from model training towards inference, which requires vast amounts of fast storage for frequently accessed data sets.

The research firm projected server eSSDs would account for more than half of all NAND bits shipped by the end of the year.

To capture this higher-margin market, YMTC planned to shift its product mix further towards eSSDs in the second half of the year to cement its third-place global standing, supported by expanding avenues for capital, Counterpoint said.

The strategy comes as YMTC continues to scale its manufacturing operations despite years of US trade restrictions designed to limit its access to advanced semiconductor manufacturing equipment.

Morgan Stanley said in May that YMTC was increasing utilization in its second fabrication plant in Wuhan while advancing construction and tool installation at a third facility. The bank estimated the company would add about 35,000 wafers per month of capacity this year, with substantially larger increases planned for 2027 and 2028.

The expansion aligns with Beijing’s push to localise China’s AI infrastructure, which would drive growing domestic demand for home-grown eSSDs and high-bandwidth memory through installation in data centres, Bernstein Research said in May.

Authored by John Maxwell Hamilton via RealClearPolitics,

In 1896, a daring journalist covering the Cuban revolution against their colonial masters crossed the Spanish lines three times to interview insurgent leaders. William Francis Mannix’s final trip into the Cuban interior was made at the request of the leader of the insurgent government, Salvador Cisneros Betancourt. El Presidente Cisneros wanted the intrepid correspondent to carry back an appeal begging for support from the American people.

Mannix’s riveting reports appeared on the front page of the New York Times and other leading newspapers. After the Spanish expelled Mannix from Cuba, he was invited to speak to the National Geographic Society and other prestigious gatherings. The Cuban appeal was published in the Congressional Record. “I applaud and approve every word in that splendid appeal,” said Alabama Sen. John T. Morgan, who supported U.S. government intervention to help the Cuban rebels.

The nation’s leading newspapers decried Spain’s subsequent expulsion of Mannix from Cuba. The Washington Star, another newspaper that carried Mannix’s dispatches, said he was being banished “for having told the truth about insurgents and their cause.”

Mannix scored a journalistic triumph, but it was not one that his editors, legislators, or readers imagined. His three trips over enemy lines and his stories, including the Cisneros appeal, were all fakes. Mannix wrote them while sitting in the bar of the Moscotte Hotel in Havana or – for a change of scenery – on the hotel’s veranda.

In an October 2017 interview on Fox News, President Donald Trump said, “I’ve really started this whole ‘fake news’ thing.” He called it “one of the greatest of all the terms I’ve come up with.” But faking has a long history. No journalist surpassed Mannix as a fabulist in Cuba, but many followed in his footsteps on the island. Their fabricated sensationalizing reached such proportions that a book-length expose was devoted to the subject on the eve of the United States entering war with Spain. It was called Facts and Fakes About Cuba.

This article and two that follow give perspective on three aspects of fake news: its long history, its attraction to readers, and the consequences of political fake news.

The power of modern technology to pollute streams of information has made fake news seem terrifyingly new. Russian bots flood the Internet with horrifying stories that did not happen. Political operatives produce AI-generated videos of despicable speeches their opponents did not deliver. Your crazy cousin spreads word in his social media posts that President Trump’s supporters staged the assassination attempts on his life. As to the latter, a NewsGuard/YouGov poll recently found that almost one-third of Americans believe at least one of the three attempts on Trump’s life was staged.

Modern technology is a force multiplier for falsehood. But technology is not the root cause. The launching pad is and always has been people: people who for a variety of reasons want to mislead, and people who for a variety of reasons find falsehood more satisfying than fact. Fake news goes back much further than the computer, the television, the radio, the typewriter, or the printing press.

The history of mankind has been a history of the battle between truth and falsehood. The ancient Greeks created gods in their own image by naming them Apate (fraud), Dolos (guile), and Pheme (rumor). The Roman poet Virgil wrote in the Aeneid of the goddess Rumor:

Her frightening mingle of truth and lies,/ Rhapsodically singing about them in the darkness,/ And all the people hear what she is singing.

One place Rumor did her work was on a busy street corner near the Piazza Navona. Beginning in the 16th century, Romans surreptitiously placed false malicious notes about public figures on a statue of Pasquino, who in legend was supposed to be a local tailor and wit. The name of the mendacious notes lives on as pasquinades.

Buttered news

In the years leading up to the French Revolution, historian Robert Darnton documented that France was awash in misinformation. Craque was slang for fake news. The word mimicked the cracking sound of branches around the Tree of Crakow in Paris, where people gathered in the same way the English did at St. Paul’s Cathedral. St. Paul’s, where pamphlets were sold and gossip exchanged, was called “the mint of all famous lies.”

A hinge point in fake news came in the 1620s, when London printer Nathaniel Butter published the first serialized English-language commercial newspaper, “The News of this Present Week.” As soon as it and others like it appeared, discerning critics ridiculed the emergence of “buttered news.”

Butter’s newspaper could not have appeared without moveable type and the printing press, but this technology had been around for some time. What changed was the emergence of a growing middle class who could read and had disposable income to spend on news – even news of dubious provenance.

Butter and those who joined him in the newsbook business were only beginning to understand journalism. They sometimes published the oldest news first, as if to keep things in order. The British crown constrained them by forbidding the publication of domestic news. Forced to go abroad, they relied on second-hand reports, the spicier the better. A typical article read, “A strange apparition at Rome, of two mighty armies,” whose battle in the air was followed by a storm of “blood and fire from heaven.” According to one historian, “Roughly one-tenth of these early newspapers contained some sort of apparition, vision, or monstrous-birth item,” such as boy-girl twins born to a Swiss cow.

Not all falsehood is fake

We need to be clear about definitions. Fake news is intentional falsification. A factual error in a newspaper is not fake news. It is a mistake. A mistake may be due to sloppy newsgathering or an accidental slip. It may call for firing the reporter. But the author did not aim to deceive. It wasn’t a hoax.

Politicians find it convenient to overlook these definitional niceties. They discredit factual news that makes them look bad by calling it “fake news.” They become the fakers.

The term fake news was routinely splashed across the pages of American newspapers in the late 19th and early 20th centuries. Each day readers were greeted by headlines like these: “Malicious Fake News.” “Fake News Again.” “Bit of Fake News.” “Concerning Fake News.” “More Fake ‘News.'” “Fake Stories Afloat.” “Fake News. Pope Has Died Twenty-Two Times in Five Years.”

The faking habit waned as the 20th century rolled on. First, the cost of starting a new newspaper soared, so it was more difficult for scallywags to wade into the gutter. Second, the intense competition for readers drove the least profitable newspapers out of business. Those that were left found they earned more money by competing on the basis of reliability. Balanced fact-based reports attracted more readers than partisan news. Advertisers preferred to see their products promoted in credible publications.

Of course, some newspapers were outliers. The New York Graphic billed itself as offering “Nothing But the Truth” and then made a merry practice of lying. Long before modern technology made it easy to fake photographs, the Graphic pasted real-life faces on posed bodies. These appeared alongside made-up lonely heart stories.

Many years later fakes still appeared newspapers. In 1980 the Washington Post won a Pulitzer Prize for “Jimmy’s World,” a story about an 8-year-old heroin addict fabricated by reporter Janet Cooke. A fake in the New York Times the next year was eerily similar to William Mannix’s in Cuba. Freelancer Christopher Jones, hired by the Times magazine, invented a detailed story about spending a month with Khmer Rouge guerrillas, who were in hiding in Cambodia. He never left Spain.

But ethical standards had set in by that time. The Graphic went bankrupt in 1932. Its debts amounted to millions. The Post issued a lengthy mea culpa and returned the Pulitzer Prize. When the New York Times realized that Jones might not have been on the up and up, the executive editor assigned three reporters to determine conclusively that the story was a fabrication and then apologized profusely.

We are now back to the buttered days of journalism for the opposite reason we left them behind. The legacy media, as the old established media are called, carry on, albeit in smaller numbers and with generally lower profits. Meanwhile a tidal wave of new, irresponsible media has emerged. The costs of entry are low, and ethics is often considered a nuisance. These news outlets are as eager to fake as Nathaniel Butter and William Mannix were.

Our attraction to fakers like these will be the subject of Part II.

John Maxwell Hamilton, an RCP columnist, is at work on a biography of the journalist-faker William Francis Mannix. His recent book Manipulating the Masses: Woodrow Wilson and the Birth of American Propaganda won the Goldsmith Prize.

Large US naval battleships continue to suffer problems at sea. While there have been many headlines of late detailing the problems of the USS Abraham Lincoln carrier connected to its extended deployment amid the Iran war, a separate warship is having serious problems in Pacific waters, quite apart from the crisis in the Persian Gulf.

“A US Navy guided-missile destroyer spent four days last month without working toilets, galley services and air conditioning in the blistering heat of the South China Sea after the warship lost power,” CNN reports.

The military has since confirmed an engineering failure which caused the significant outage, which basically shut down all the ship’s systems, including the ability to maneuver on its own.

A US 7th Fleet statement identified that the USS Benfold, an Arleigh Burke-class guided-missile destroyer, was on routine operations in the Indo-Pacific on when an “engineering casualty involving its generators” occurred. 

It happened on July 24, and has now set back additional operations. It was supposed to be part of the USS George Washington strike group which is at the moment headed to the Middle East in order to relieve the Lincoln carrier. 

However, the Benfold is still stuck in Asian waters. “There were no injuries to the crew, who demonstrated resilience, grit, professionalism, and unwavering steadiness in their response,” the US Navy statement said.

The four-day crisis impacted the ship’s galley services, toilets, air conditioning and potable water, the 7th Fleet also confirmed. The heat would have been sweltering.

No explanations have been given as to how the crew managed the waste problem. USNI, which first reported the crisis, describes of the repair process:

The George Washington Carrier Strike Group supported the destroyer, according to 7th Fleet. USS Robert Smalls (CG-62), the cruiser attached to the George Washington Carrier Strike Group, helped provide meals for the crew, Comer said.

Contractor tugboats towed Benfold to Subic Bay where it was met by personnel from the Ship Repair Facility – Japan Regional Maintenance Center on July 28, with crew receiving contracted lodging off the ship the next day. Power was restored on July 30, Comer said.

All repairs were completed by Aug. 7 when the ship completed a berth shift for fuel. The destroyer left Subic Bay on Aug. 8.

Benfold, which had been sailing with the George Washington Carrier Strike Group, pulled into Yokosuka, Japan, on Thursday, according to ship spotters. It did not transit the Malacca Strait with the other ships of the GW CSG, which are likely heading toward the Middle East.

The timing of this engineering failure incident is very bad for the navy, given already there’s much scrutiny being placed on long deployments at sea connected to the Iran conflict.

US Navy destroyer left without working toilets, food service or AC for FOUR DAYS after losing power in sweltering South China Sea

USS Benfold suffered generator failure on July 24, leaving its crew without basic amenities amid blistering heat — 7th Fleet spox confirms to CNN pic.twitter.com/CJBm5r7jv1

— Michael Ashura (@MichaelAshura) August 17, 2026

Congressional leaders are currently focused on the beleaguered USS Abraham Lincoln, amid reports of problems in supplying the ship and mental health problems following a record-deployment.

The Hill reports Monday that “A group of 15 senators said Defense Secretary Pete Hegseth owes Americans answers about the ongoing deployment of the USS Abraham Lincoln aircraft carrier strike group after reports of low morale and a mental health crisis among service members aboard.”

Authored by Sydney Rodman via RealClearEnergy,

One of President Trump’s campaign promises was eliminating climate scams. As net-zero climate policies fade into the shadows, another climate scam is biting the dust.

Bill Gates’s daughter, Phoebe Gates, may not have her father’s entrepreneurial talent, but she, too, frequently peddles climate alarmism. Mr. Gates, however, renounced climate doomerism last year in a widely-shared memo.

A recent media investigation determined the younger Gates and her cofounder, climate influencer Sophia Kianni‘s self-described sustainable e-commerce startup, Phia, was reportedly collecting sales commissions it had not earned. Phia was marketed as a climate-friendly platform that directed shoppers to secondhand products. Unsurprisingly, the startup created its own climate of lies.

Phia claims to be climate-friendly by promoting secondhand clothing options. Co-founder Sophia Kianni described Phia as having a fundamental “sustainability aspect … buying an item secondhand actually represents an 80% reduction in carbon footprint compared to buying new.” Before studying at Stanford University, Ms. Kianni founded a major Left-wing climate activism organization called Climate Cardinals and served as a climate ambassador at COP27 in Egypt. Gates, for her part, frequently touts her sustainability and climate bona fides. Like father, like daughter.

On the surface, Phia appeared to be successful and profitable. The company secured considerable amounts of seed funding, totaling over $43 million, and had a reported valuation of $185 million by early 2026.

Yet, Phia reportedly was cheating the system. The startup was allegedly using computer code to claim it facilitated numerous purchases – and thus collect a portion of sales – that it had nothing to do with. According to computer experts who investigated the coding behind Phia’s platform, a plug-in extension, quietly, unknown to the user, opened an invisible tab in the background. Doing so digitally registered Phia, falsely, as an affiliate marketer involved in the online transaction. Since some revenue in online commerce automatically goes to the affiliate marketer who was the final click before the user’s purchase, Phia made itself that final click – even though it was not – and earned millions.

Just as damning, Phia’s damage-control efforts sowed more doubts about their fishy operations. Phia’s spokesperson responded to allegations, stating that “as soon as we were notified, our team worked overnight to identify, mitigate, and has since resolved the issue.” In other words, the company supposedly resolved the issue, but didn’t deny any wrongdoing.

Phia’s reputation could be in jeopardy. It received investment from celebrities such as Sydney Sweeney, Khloé Kardashian, Jessica Alba, Kris Jenner, and Hailey Bieber. Those investors may now wonder how much deception and incompetence is going on behind the scenes related to other facets of Phia’s business model. In fact, this isn’t Phia’s first scandal. In November, Phia was reportedly busted capturing a “concerning amount of user data,” according to reports, including collecting users’ banking information.

A former senior executive for Climate Cardinals, who wishes to stay anonymous, has now come forward about Kianni’s mismanagement style to the author. The anonymous whistleblower shared, “I was involved for two years and we didn’t really do anything. It ruined my perspective for prestige.” The whistleblower alleges that a company executive told him “all the numbers on the website are artificially inflated. None of them are real.” Soon after, the company experienced a mass exodus of personnel, who decided that, in the source’s words, they “no longer wanted to be part of the lies.” After Kianni migrated to Phia, her past stayed with her. In order to get ahead, Sophia lied about a fake assistant and even bragged about it.

It is worth asking: is Phia on the path to being Theranos 2.0? The parallels to Theranos, the disastrous tech startup that investigative journalists exposed as being among the greatest scams of modern times – ultimately costing investors hundreds of millions of dollars – are uncanny. Oddly enough, founders of both companies started their company at Stanford and faced rejection there, helping place a “chip on their shoulder,” in Phoebe Gates’s words.

Both of these startups had great ideas in theory – but they did not survive reality. In fact, they never tried. That is also the case for the climate movement writ large.

Climate alarmism, itself a scam, is a macrocosm of the Phia story. It’s a movement based on activism, not facts, and its fundamental claims don’t hold up under scrutiny. Climate programs also received billions of government funds under President Biden, until the judicious Trump administration took notice and ended the gravy train. Falsehoods and fear mongering can be quite lucrative.

Phia should serve as a cautionary tale for the future of so-called climate investment – and the climate movement itself.

Sydney Rodman is a visiting fellow at Independent Women’s Center for Energy and Conservation.