US derivatives exchange CME Group and index provider Silicon Data have teamed up to create a futures market for computing power, a key source driving the AI boom. Bloomberg reports that the futures will help traders, financial firms, AI builders and cloud providers manage volatility and price swings. Indexes from market-intelligence firm Silicon Data will help underpin the products. The project is still pending regulatory review.

“As the backbone of the digital economy, compute is the new oil of the 21st century,” CME CEO Terry Duffy said in the statement. “Every AI model trained, every transaction cleared and every byte of data processed runs on compute, which is becoming a fast-emerging asset class in its own right.”

CME’s addition of compute futures signals a broader shift to make the asset tradable like other commodities. Creating a futures market can help make the costs more transparent and raise overall market efficiency. 

Computing power, better known as “compute”, has seen soaring demand as AI companies use it to power their systems. BlackRock CEO Larry Fink said last week that a new asset class will likely be buying futures of compute given the shortage and high demand.

Futures contracts, which give investors the ability to bet on the future value of a commodity such as oil or metals at a certain date, are traded on exchanges such as Chicago-based CME’s, and require a brokerage account that’s approved to trade futures.

The need for compute power has been growing as AI technologies have scaled. But until now, it’s been difficult to hedge against price swings and other costs.

The index from Silicon Data, which is backed by trading firm DRW Holdings, provides a benchmark for traders and others to follow, giving insight into the cost of goods for those building AI products or in need of graphics processing unit computing power.

Silicon Data, founded by former DRW trader Carmen Li, created daily GPU benchmarks for on-demand rental rates, giving customers insight into the cost of goods for those building AI products or in need of GPU computing power.

The company’s Silicon Data H100 Rental Index tracks the hourly cost of renting a GPU, which is the workhorse for training AI models.

A data center typically uses hundreds or even thousands of processors, which can cost thousands of dollars.

Authored by Micah Zimmerman via Bitcoin Magazine,

Five of the nation’s largest labor organizations are urging the Senate to vote against a pending cryptocurrency market structure bill, warning that the legislation would expose retirement accounts to digital asset volatility ahead of a key committee vote Thursday.

The AFL-CIO, Service Employees International Union, American Federation of Teachers, National Education Association, and American Federation of State, County and Municipal Employees sent letters and emails to Senate Banking Committee members, according to CNBC, which obtained the correspondence first.

The crypto industry takes ‘risks’

The groups wrote that the bill “jeopardizes the stability of workers’ retirement plans, including public pensions, and introduces significant volatility to retirement savings accounts.”

“This legislation invites the cryptocurrency industry to take outsized risks, knowing that if those risky bets do not pay off, it is working people and retirees, not crypto billionaires, who will pay the price,” the unions wrote in a joint letter to all senators.

The AFL-CIO, in a separate email to Banking Committee members, warned that “absent sufficient regulation, embedding cryptocurrencies and other digital assets into the real economy will have a destabilizing effect, while benefiting issuers and platforms at the expense of working people.”

The Senate Banking Committee is scheduled to mark up and vote on the bill Thursday. Despite months of bipartisan talks, it remains unclear whether any Democrats on the committee will vote in favor of the measure. Several lawmakers say the bill needs more work on ethics, conflict-of-interest, and security provisions.

Labor groups are not the sole source of opposition. The American Bankers Association has also pushed back on updated language in the bill concerning stablecoin holdings. ABA CEO Rob Nichols wrote to bank executives on May 10 that a provision barring cryptocurrency firms from paying yield on payment stablecoins remains a threat to traditional bank deposits, arguing it would “unnecessarily incentivize the flight of bank deposits.” 

The crypto industry, in contrast, has backed the revised language, with Coinbase voicing support for the restriction.

Michael Saylor chimes in

Strategy Executive Chairman Michael Saylor took a position in favor of the legislation. In a post on X, Saylor wrote that the bill “would unlock the next wave of Digital Capital, Digital Credit, and Digital Equity in the U.S. and globally,” calling it a framework for “STRC-powered digital yield markets” and a signal of “institutional validation for BTC.”

The key language: the bill recognizes activity-based rewards tied to payment stablecoins and distributed ledger participation as “critical to enabling innovation, competition, and consumer adoption.” That is the path to responsible digital yield markets. https://t.co/PTpjmmkqO1

— Michael Saylor (@saylor) May 12, 2026

The crypto industry has identified the bill as its top legislative priority this session. Whether that momentum carries through committee — and into a full Senate vote — now depends on resolving opposition from organized labor, traditional banks, and a block of Senate Democrats who have yet to commit their support.

Looks like NYC’s communist mayor has had second thoughts about extracting more taxes by raising New Yorkers’ property taxes – something he vowed to do to help close a two-year deficit.

According to Bloomberg, the decision to drop the tax hike will be included in Mamdani’s executive budget released today, which will mark the latest version of his spending plan for the fiscal year beginning July 1. 

This is separate from a tax on second homes (the so-called pied-à-terre) that was initiated by Governor Kathy Hochul – which is still under consideration as part of state budget negotiations. 

Earlier this year, Mamdani threatened to raise property taxes by nearly 10% as a way to lobby Hochul for more funding. He had little support for an across-the-board increase, with City Council members including Speaker Julie Menin opposing the plan. Any increase would have needed to be passed by that chamber. -Bloomberg

Mamdani’s preliminary budget proposal earned the city a credit rating downgrade to negative, citing the city’s long-term structural problems. He also proposed raiding the city’s emergency savings account for $1 billion to help close the gap. 

On Tuesday, Hochul and Mamdani announced that the state would slide NYC an additional $4 billion to help close the budget gap that Mamdani has called a “generational fiscal crisis” rivaling the Great Recession. To fix this, his only solution has been higher taxes on the wealthy and corporations – because heaven forbid they slash spending to a meaningful degree (or at all). 

This reversal comes amid a great exodus of wealth from New York State.

The decision to drop the across-the-board property tax hike unfolds against the backdrop of a sustained and accelerating departure of high earners, businesses, and capital from New York City and the state. New York has already lost tens of billions in tax revenue as residents and employers relocate to lower-tax states.

NYC has recorded a net loss of roughly 220,000 residents since 2021. In the past two years alone, approximately 6,000 businesses have closed or moved out. The damage is concentrated among the taxpayers who fund the majority of city services: the top 1 percent of earners contribute more than 40 percent of income tax revenue, and that group is leaving in disproportionate numbers. More than 125,000 New Yorkers have relocated to Florida in recent years, taking nearly $14 billion in adjusted gross income with them.

A May 2026 analysis noted that repeated tax increases intended to offset lost revenue have only driven more departures, with the city suffering significant wealth decline as a direct result. An April 2026 piece warned that Mamdani’s broader tax agenda – including hikes on high earners and the pied-à-terre tax still advancing at the state level – risks accelerating the migration of wealth and businesses to states like Florida, Texas, and the Carolinas. Even Governor Hochul has publicly implored wealthy taxpayers to stop leaving, underscoring how severe the fiscal pressure has become.

New York Gov Kathy Hochul is begging wealthy people who have moved to Florida and Texas to come back to New York and pay taxes. 🤣

“I need people who are high net worth to support the generous social programs that we want to have in our state. Now, there are some patriotic… pic.twitter.com/B4ql1ktcq6

— Based Jessica (@RealJessica) March 18, 2026

By walking back the property tax increase, Mamdani is confronting the hard limit of his strategy: the very people and companies needed to fund expansive spending are already voting with their feet. Yet the state continues to push additional taxes on second homes and corporations, meaning the underlying incentives fueling the exodus remain firmly in place. The wealthy are not waiting for further experiments – they are leaving.

A day after initial allegations were first widely reported, Pakistan’s government has issued a public rejection of claims that it hosted Iranian military aircraft in order to shield them from coming under US-Israeli attack during the opening weeks of Operation Epic Fury.

However, Islamabad in the statement did acknowledged the presence of some Iranian planes at its airports – but described these as legitimate escorts related to high level diplomatic visits and contacts.

“Following the ceasefire and during the initial round of the Islamabad Talks, a number of aircraft from Iran and the United States arrived in Pakistan to facilitate the movement of diplomatic personnel, security teams and administrative staff associated with the talks process,” a Tuesday statement by Pakistan said. “Some aircraft and support personnel remained temporarily in Pakistan in anticipation of subsequent rounds of engagement.”

The initial Monday headlines suggesting Pakistan sought to protect Iranian military assets resulted in some outrage in D.C. and among the pundit class.

A late in the day Monday CBS News report alleged that US-ally Pakistan allowed Iran to park military aircraft at its airfields, and thus outside the US-Israeli strike zone during Operation Epic Fury:

As Pakistan positioned itself as a diplomatic conduit between Tehran and Washington, it quietly allowed Iranian military aircraft to park on its airfields, potentially shielding them from American airstrikes, according to U.S. officials with knowledge of the matter. 

Iran also sent civilian aircraft to park in neighboring Afghanistan. It was not clear if military aircraft were among those flights, two of the officials told CBS News. 

President Trump and admin officials have repeatedly declared the utter and total destruction of Iran’s air force and navy, but apparently some planes were missed.

According to more from CBS: 

Together, the movements reflected an apparent effort to insulate some of Iran’s remaining military and aviation assets from the expanding conflict, even as officials publicly served as brokers for de-escalation. 

The U.S. officials, who all spoke only under condition of anonymity to discuss national security issues, told CBS News that days after President Trump announced the ceasefire with Iran in early April, Tehran sent multiple aircraft to Pakistan Air Force Base Nur Khan, a strategically important military installation located just outside the Pakistani garrison city of Rawalpindi. 

One well-known war correspondent who spends time in Pakistan appeared to back Pakistan’s account:

As someone who was also in Pakistan for weeks after the Islamabad talks waiting in hope of round two, this checks out:

“Following the ceasefire and during the initial round of the Islamabad Talks, a number of aircraft from Iran and the United States arrived in Pakistan to… https://t.co/eLyANnlUMG

— Caitlin Doornbos (@CaitlinDoornbos) May 12, 2026

Islamabad is further framing the CBS story as one which seeks to dampen confidence in its role as a neutral mediator, as the warring sides still seek to hammer out a basis for future talks and a peace deal.

Authored by Jonathan Turley,

California gubernatorial candidate Tom Steyer has run on the slogan of “actions speak louder than words.”

It may now be time for him to prove it and bring a defamation action against opponent Katie Porter for her accusations that he engaged in dirty politics.

Porter used a CNN interview to accuse Steyer of finding and leaking the infamous video of her abusing a staffer and yelling “Get out of my f**king shot.”

Katie Porter’s campaign for governor has languished at around ten percent, even after the implosion of Eric Swalwell as the frontrunner among Democratic candidates. At times, she appears to be seeking to win by profanity rather than policies, holding up signs reading “F**k Trump” and other insults.

On CNN’s Inside Politics, however, Porter may have gone too far with her rhetoric. She told Dana Bash that it was Steyer who stabbed her in the back with the video:

“Well, given that Tom Steyer is the person who leaked the video with me and the staffer from five years ago, he pretty clearly wanted to be governor bad enough to knock me down to do it.”

Steyer’s campaign immediately denied the allegation, insisting (through spokesperson Sepi Esfahlani) “Tom has nothing to do with that video. This is an attempt from Katie Porter to deflect from her past mistakes. Katie Porter only has one person to blame for her standing in the race, and it’s herself.”

As for Bash, the host clearly wanted to set the network apart from Porter’s claims, stating at the end of the interview “I should note that we don’t have evidence that Steyer leaked that video of you. If you have it, please bring it.”

That evidence has not been forthcoming.

The question is whether Porter has produced a more viable defamation case than a political campaign.

At the outset, Steyer would face the higher burden as a public figure.

In New York Times v. Sullivan, the Supreme Court crafted the actual malice standard, requiring public officials to shoulder the higher burden of proving defamation. Under that standard, an official would have to show either actual knowledge of its falsity or a reckless disregard of the truth.

The standard was later extended to public figures.  The Supreme Court has held that public figure status applies when  someone “thrust[s] himself into the vortex of [the] public issue [and] engage[s] the public’s attention in an attempt to influence its outcome.” A limited-purpose public figure status applies if someone voluntarily “draw[s] attention to himself” or allows himself to become part of a controversy “as a fulcrum to create public discussion.” Wolston v. Reader’s Digest Association, 443 U.S. 157, 168 (1979).

Steyer is a full public figure.

Yet, if Porter has no evidence of his connection to the videotape, this could satisfy either the actual malice or the reckless disregard elements.

However, is it defamatory to accuse a fellow politician of playing dirty?

The release of the videotape was not a criminal act and Porter does not suggest such a violation in her accusation. She is simply saying that Steyer will do most anything to win, including dirty tricks.

Richard Nixon, Hillary Clinton, and others have been accused of dirty tricks in politics. It is a standard accusation in politics.

Yet, Steyer has denied the allegation, so Porter is also effectively calling him a liar.

This is not a matter of opinion alone.

Certainly, Porter’s view of Steyer’s character and ambition is an opinion. However, whether he was the one who released the video is either true or it is not.

The Porter claim is meant to lower Steyer’s reputation with the public, though she can claim that all political battles are ultimately an attack on character, capability, or both.

The controversy touches on a sometimes subtle point of fact v. opinion.

The case reminds one of Mr. Chow of New York v. Ste. Jour Azur, 759 F.2d 219, (2d Cir. 1985), where a Chinese restaurant sued a food critic for a negative review. The reviewer made the following allegedly libelous comments:

(1) “It is impossible to have the basic condiments … on the table.”

(2) “The sweet and sour pork contained more dough … than meat.”

(3) “The green peppers … remained still frozen on the plate.”

(4) The rice was “soaking … in oil.”

(5) The Peking Duck “was made up of only one dish (instead of the traditional three).”

(6) The pancakes were “the thickness of a finger.”

The jury found for the restaurant and awarded $20,000 in compensatory and $5 in punitive damages. However, the court of appeals reversed, holding that the statements were protected as “opinion.” Notably, the statement about the Peking Duck came closest in the court’s view since it was a factual statement, but the court still found that it would not support the verdict due to the absence of malice:

Because of the absence of evidence showing either that Bridault or Millau knew that Peking Duck was not traditionally served as three dishes or that they subjectively entertained serious doubts about the accuracy of the statement that it is traditionally served in three dishes, we cannot say that the existence of malice has been established by clear and convincing evidence. Thus, this statement cannot support the judgment entered below.

Here, Porter claims that Steyer was the culprit behind the video release despite Steyer’s denials.

Generally, broadcast statements on the news are treated as libel as opposed to slander.

Steyer could even attempt to argue that this is a per se category of defamation by impugning his integrity. It is not necessary in California to allege an actual criminal act so long as the statement attacks the person’s integrity as to bring him into disrepute. Maher v. Devlin (1928) 203 Cal. 270, 275. This includes falsely charging a person with “a violation of confidence reposed in him or with treachery to his associates.” Dethlefsen v. Stull (1948) 86 Cal.App.2d 499, 502.

It is admittedly a close case and Porter could argue opinion defenses. Truth also remains a defense if Porter can do as Bash requested and bring the receipts for the allegation.

In the end, Steyer may not consider the powder worth the prize when it comes to Porter. It would, however, make for a more interesting case than the campaign of either candidate.

Kuwait and Iran are barely separated by a small section of Iraqi coastline at the head of the Persian Gulf, but they do share a maritime border. But given the small oil-rich Sunni sheikdom’s close proximity to the Islamic Republic, and given its historic role in hosting American forces and bases, it is to be expected that it would be heavily targeted in Iranian military operations.

Indeed, Kuwait has alongside the UAE absorbed some of the biggest ballistic missile and drone attacks out of Israel during the US-Israeli Operation Epic Fury. US forces have even had to retreat to other locations deeper in the Middle East or even outside the theatre, given the repeat attacks and looming threat of new attack even amid broader ceasefire.

But in tandem with an air war, there’s has been a covert war happening in the shadows, with Kuwait’s interior ministry newly announcing on Tuesday it has arrested four ‘infiltrators’ affiliated with Iran’s Islamic Revolutionary Guards (IRGC). The ground attack incident is said to have happened earlier this month, and involved heavy exchanges of fire.

The elite IRGC operatives reportedly tried to enter the Gulf state by sea, per Kuwait state news agency KUNA. A firefight ensued, and the ministry later confirmed one member of Kuwait’s armed forces was seriously wounded in resulting clashes with the infiltrating small group of Iranians.

The Interior Ministry accused the IRGC operatives of seeking to launch “hostile” activities inside Kuwait. “Confession of the infiltration group to Kuwaiti territories during interrogation with them of their affiliation to the Revolutionary Guard in the Islamic Republic of Iran,” the ministry stated.

KUWAIT HAS SUMMONED IRAN’S AMBASSADOR AFTER ALLEGING THAT IRGC PERSONNEL INFILTRATED BUBIYAN ISLAND & CLASHED WITH KUWAITI SECURITY FORCES

It appears that only two of the Iranian group are in custody while two escaped, per an initial statement. As for the operatives in custody, “They confessed to being tasked with infiltrating Bubiyan Island aboard a fishing boat rented specifically to carry out hostile acts against Kuwait,” the official Kuwaiti statement added.

Other sources, including the defense ministry, say that all four have been detained and identified, amid early conflicting reports:

Kuwait’s Defense Ministry reported on May 3 that naval Col. Amir Hossein Abdolmohammad Zaraei, naval Col. Abdolsamad Yedaleh Ghanavati, naval Capt. Ahmad Jamshid Gholamreza Zolfaghari and 1st Lt. Mohammad Hossein Sohrab Foroughi Rad had been arrested in territorial waters after attempting to infiltrate Bubiyan Island.

Kuwaiti Armed Forces stationed on Bubiyan Island exchanged fire with the men during the confrontation, resulting in severe injuries to one service member.

Bubiyan is the largest of a group of eight islands belonging to Kuwait, lying in the north-western corner of the Persian Gulf. Importantly, the large island is home to Mubarak Al Kabeer Port, part of China’s Belt and Road initiative.

Kuwait is a very small country and Bubiyan Island is not some distant place but strategically located close to population centers and energy sites although the island itself is empty. pic.twitter.com/Fdd8RU3NqS

— Alberto Miguel Fernandez (@AlbertoMiguelF5) May 12, 2026

That the alleged Iranian high-risk operation focused on an island with a key China-built port is quickly becoming focus of Western media reports. According to ABC:  

Kuwait accused Iran on Tuesday of sending an armed paramilitary Revolutionary Guard team to launch a failed attack earlier this month on an island in the Middle East nation home to a China-funded port project.

The accusation by Kuwait of an Iranian link to the incident came just before U.S. President Donald Trump travels to Beijing for a meeting with Chinese President Xi Jinping.

Tehran has yet to acknowledge or own up to the incident, and is not expected to, unless it is an outright denial. 

One freight and oil transit industry headline from early March underscores just how ambitious and costly the China-backed project remains: Kuwait, China Advance USD 4.1 Billion Mubarak Al-Kabeer Port Project…

Kuwait and China have agreed to strengthen their commercial and maritime cooperation through the construction of a new container port on Kuwait’s Bubiyan Island. The project marks a significant step in deepening bilateral economic ties and enhancing the oil-rich country’s strategic position within regional shipping networks.

The Chinese majority state-owned firm China Communications Construction Company will undertake the Engineering, Procurement, and Construction (EPC) works for the project’s first phase.

The development of the new container hub in the north of the country is expected to expand Kuwait’s port capacity and reinforce its role in both regional and global trade flows.

And yet, current Kuwaiti oil export flows remain forcibly halted, due to the Strait of Hormuz closure and ongoing standoff, which has on the one hand seen Iran target ‘unauthorized’ foreign shipping with drones and missiles, and on the other seen the US Navy maintain its own blockade of Iranian ports.

Authored by Bryan Hyde via American Greatness,

Virginia Democrats, along with their state Attorney General, have asked the US Supreme Court to override the Virginia Supreme Court’s decision last week that struck down a partisan redistricting plan.

ABC News reports Virginia Attorney General Jay Jones wrote in the emergency application filed on Monday that the Virginia Supreme Court was “deeply mistaken” when it invalidated a ballot measure to amend the state constitution that would have netted Democrats as many as four new congressional seats.

The state Supreme Court had ruled last Friday, in a 4–3 decision, that Democrats had violated the state Constitution, by failing to follow proper procedures, while racing to get the measure on the ballot before the midterm elections.

According to SCOTUSblog, Virginia’s General Assembly adopted a new map in February that would have favored Democrats in 10 of the state’s 11 seats in the US House—a potential increase of four seats from the current balance between Democrats and Republicans in Virginia.

The new map hinged on obtaining approval for an amendment to the Virginia constitution that would give the state legislature the power to draw a new congressional map outside of the normal cycle following the decennial census.

In a referendum held in April, Virginia voters approved that amendment by a margin of three percentage points.

The Virginia Supreme Court ruled that the referendum was not valid because the General Assembly had not followed proper procedures when it put the new amendment on the ballot.

In Monday’s 24-page filing, Jones argued:

“The irreparable harm resulting from the Supreme Court of Virginia’s decision is profound and immediate. By forcing the Commonwealth to conduct its congressional elections using districts different from those adopted by the General Assembly pursuant to a constitutional amendment the people just ratified, the Supreme Court of Virginia has deprived voters, candidates, and the Commonwealth of their right to the lawfully enacted congressional districts.”

Legal experts told ABC News last week that they believe Democrats have little chance of a successful appeal at the US Supreme Court because the state Supreme Court would be the highest authority dealing with state constitutional issues and no federal issues are at stake.

According to former Virginia Attorney General Ken Cuccinelli, “The Virginia Supreme Court is the final authority on Virginia constitutional questions. This is the end, folks. You will have the same map in 2026 that existed in 2024. That is now unchangeable and immutable.”

Politico reports that Chief Justice John Roberts, who oversees emergency appeals arising from Virginia, instructed the Republicans who challenged the Virginia referendum to respond to Jones’ appeal by Thursday at 5 p.m.

🚨 JUST IN: It’s now being speculated the US Supreme Court will LAUGH Virginia Democrats OUT OF THE ROOM after they just filed with SCOTUS to reinstate their draconian 10D-1R gerrymandered House map

Dems want the federal court to NULLIFY their own State Supreme Court and… pic.twitter.com/5Q0KtVULKH

— Eric Daugherty (@EricLDaugh) May 11, 2026

Summary:

• Cattle ranchers respond with first-takes on proposed policies from White House 

• Tuesday: Trump team is “fine-tuning” an executive order aimed at reducing ‌domestic beef prices

• Monday: Tyson Sinks, Walmart Falls After Trump Moves To Temporarily Lower Beef Import Tariffs

Ranchers Respond

Following Monday afternoon’s WSJ report that the White House will temporarily cut beef import tariffs, we spoke with three ranchers across America’s beef-producing corridor, centered on the Great and Southern Plains, to gauge industry sentiment.

The message from all three, including Elkins Cattle Company, Beck Ranch, and KC Cattle Company, premier ranchers featured in the ZeroHedge Store, was broadly the same: the proposed policy may briefly ease pressure on ground beef prices at the supermarket, but it does little to address the deeper structural crisis facing the nation’s cattle herd and could further weaken domestic producers.  

With U.S. herds already near historic lows and ranchers still battered by elevated costs for diesel, labor, fertilizer, equipment, and transportation, a flood of cheap imported beef risks pushing cattle prices lower without reducing producers’ operating expenses.

In other words, Trump’s potential move to ease beef prices at the store appears aimed at boosting affordability ahead of the midterms. What needs to happen is for the administration to push pro-growth policies that rebuild America’s cattle supply over the medium to long term.

By Tuesday morning, Reuters reports that the Trump team is “fine-tuning” an executive order aimed at reducing ‌domestic beef prices.

“The president is committed to lowering beef and other grocery costs for everyday Americans, and the administration is accordingly fine-tuning potential executive actions to alleviate temporary shortages in the domestic beef market,” the White House told the outlet in an emailed statement.

Here’s the first take from Tim Elkins of Elkins Cattle Company (of Texas):

Here is how I see it:

Tariff-rate quota is basically a penalty threshold that gets removed. This in turn, allows imported beef to enter at lower tarrifs. US cattle herds are at record lows BUT we have slowly been rebuilding. By removing this barrier this is going to drive cattle prices down.

While that’s GOOD for consumers, it’s VERY bad for us cattle ranchers. Our input costs are still sky high. Think: Transport (diesel costs), tractor parts, labor, fertilizer etc. These costs DONT come down for us with this. It just makes us compete with lower cost, lower quality imported beef.

With supply rising due to this, it will lower consumer costs, but it doesn’t change our input costs. We already have been subsiding a lot of the costs because the consumer will simply not pay the prices, meaning lower profit margins to us.

To the point of barely surviving the way it is today with cattle prices are RECORD HIGHS. The main brunt of this will be felt amongst Cow-Calf operators (who grow herds) and stocker operations (feeders).

The BIG winners here, again, is the BIG 4 packers who have a monopoly on the industry. (Tyson, JBS, Cargill, National Beef).

Lowers costs for them while putting American Ranchers/Farmers in the backseat… If these imports suppress cattle prices, as I expect they will, US-based ranchers will likely not grow herds aggressively in a time where herds are already EXTREMELY low.

This doesn’t fix anything and in fact kicks the can down the road to a bigger problem. Also, most of this will be seen in “Trimmings” of the cow often used to make ground beef/hamburgers.

Due to the quality of the animals coming in from oversees being so much worse than US raised beef, it is HIGHLY unlikely that you will see your higher end steak prices come down at all.

Our “trimmings” prices, which typically is the only area cattle producers can make any return on, will be forced lower, which will CRUSH US beef producers.

However, your typical McDonald’s burger, at today’s prices, will just return the difference to big corporations and the BIG 4. By NO WAY, does this support US ranches/farms. Rather, puts most on the brink of total collapse.

I think personally that this is a serious threat on US producers and will strain many ranchers to the point of shutting their doors.

Over time, we have put the BIG 4 in the driver’s seat while ignoring the folks that have done all the heavy lifting and doing the right thing day after day.

Second take is from Annalisa Beck of Bech Ranch (of Wyoming):

Tariff-rate quota suspension is intended to address short-term beef supply shortages and high consumer prices. This will only be a short-term fix.

The price of the calf at auction is currently at its highest. The entire cattle-raising part of the country is in a drought.

The price of hay, fertilizer, diesel fuel, and other inputs are at their highest. Those high-priced calves haven’t even hit the store shelves yet; we are about a year away from that.

However, we have seen a dramatic increase in the direct-to-consumer prices, especially in the operations that don’t raise all of their own cows from birth (some are selling their ground beef for $18/lb – this makes me want to choke).

The only way to fix the problem long term is to lower input prices (diesel, fertilizer, hay), lower the price the rancher is getting at auction (which will actually force more ranchers out of the system), or realize that $12 for a pound of ground beef that will feed a family of 4 at $3/serving is really not that expensive when everyone is ok with a $7 12 oz latte, or a $14 value meal that only feeds one person.

I think instead of screaming that the prices are too high, we need to educate the consumer that good, locally raised, nutrient-dense food is worth the investment.

The third take is from Patrick Montgomery of KC Cattle Company (of Missouri):

I understand why the Trump administration is doing this. Beef is too expensive at the grocery store. The cattle inventory is at historic lows. RFK is publicly pleading with American ranchers to stop selling their breeding stock and they won’t, because the economics of ranching are broken. Your average cattleman wants to retire and there is no next generation replacing him. Trump needs consumer prices down by the midterms and suspending the TRQ is the fastest lever he can pull.

I get it. But this is a band-aid on an arterial bleed.

The real problem is structural and neither side of the aisle will touch it. Fix the money. Not through more subsidies. Not through grants. Bring back an actual free market for agriculture.

America is not capable of feeding its own populace anymore.

Here is why.

Crop land. America’s farmland overwhelmingly produces corn and soybeans. Much of that goes to export or gets processed into products we should not be consuming. Why? Because it is heavily subsidized and farmers are incentivized to grow it. This has been the case for over 50 years, dating back to Earl Butz’s “get big or get out” USDA policy in the early 1970s. Before Butz, American farms were diversified. After Butz, we became a monoculture economy. Ironically, Butz was Cargill’s guy.

If our country ripped away those subsidies today it would be disastrous because we have lost the ability to grow anything else at scale. We don’t have the implements for American farmers to produce vegetables and diversified crops at volume. We have degraded our soil health with decades of artificial fertilizers, herbicides, and fungicides. We do not have the logistics infrastructure to move a consumable product from an American farm to an American kitchen. And we have lost the institutional knowledge. Three generations of farmers have known nothing but corn and beans.

Protein is equally broken. Why would anyone start a ranching operation to break even or lose money and on a good year net 2%? Warren Buffett would not invest in that business and neither will the next generation of farmers.

Since the pandemic we have exported our beef production to countries like Brazil at an accelerating rate. According to Austin Frerick’s book Barons, Brazil dedicates a landmass the size of Vermont and New Hampshire combined to producing beef for the American market. Brazilian companies own controlling equity in two of the Big Four packers. JBS is publicly traded and their annual 10K filings over the last few years are fascinating if you understand what has been happening to the domestic supply chain. Why would Brazilian-owned companies care if American ranches disappear? That is good for their business. Happy to go deeper on that if it is useful.

Our largest pork producer is Smithfield, owned by a CCP-held entity. Given the current state of the world that should concern everyone.

The part that scares me most. Syngenta controls the proprietary seed genetics that go into American farm ground. Syngenta is directly owned by the CCP. Subsidized dollars from American farmers flow directly into a Chinese state owned company that controls what we can plant and how we plant it.

So what is the fix? Fix the money.

We do not need more subsidies. We need food sovereignty. American farmers cannot compete against imports produced under less regulation at cheaper cost. Suspending the TRQ makes that problem worse in the short term even if it helps consumers at the register.

I do like the SBA access-to-capital piece. That is the single hardest barrier in farming. But without structural reform, those dollars end up subsidizing the mega corporations that sit between the farmer and the consumer, not the farmer.

One more layer to this that I think matters.

Peter Zeihan has been writing for years about the unraveling of the post World War 2 global trade order. The system established at Bretton Woods in 1944, where America guaranteed freedom of the seas and open markets in exchange for alliance solidarity, has governed global commerce for 80 years. That system is coming apart. We are watching it in real time. The fallout with the EU. Britain going its own direction. The fracturing of traditional trade partnerships including with China. Increasingly common conflicts involving Iran and Venezuela designed to apply pressure. Our own push toward energy independence.

The world is becoming less global and more national. Most people in Washington understand this when it comes to energy. When it comes to semiconductors. When it comes to defense manufacturing.

The question I hear no one in power asking is this. What happens if we poke the bear and they turn off our food? What is the contingency plan for a country that cannot feed itself without foreign controlled supply chains, foreign owned processing, and foreign owned seed genetics?

Maybe that plan exists and it is classified. But I do not see how it works when the same entities that control our protein processing also have deep economic ties to the countries we are applying pressure to. Follow the ownership structures. Follow the money. The vulnerability is not theoretical. It is sitting in plain sight.

That is why food sovereignty is not a consumer issue. It is a national security issue. And until the people making policy treat it that way, we are going to keep putting bandaids on a problem that requires surgery.

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Tyson Sinks, Walmart Falls After Trump Moves To Temporarily Lower Beef Import Tariffs

Tyson Foods and Walmart shares moved lower around noon in New York, while major Brazilian meatpacker Minerva Foods moved higher on a Wall Street Journal report that says the White House will temporarily cut beef import tariffs

According to the WSJ report, the plan would suspend the annual tariff-rate quota, which imposes higher duties once import limits are reached, allowing more foreign beef to flood the U.S. at lower tariff rates to suppress soaring prices.

The move comes as the U.S. cattle herd has fallen to a 75-year low, driving the latest USDA national average supermarket beef prices to near $7 per pound, squeezing meat processors and pushing consumers into trade-downs to cheaper proteins such as chicken and pork.

Walmart shares are down about 2.5% around noon.

Tyson Foods shares dropped about 4.5%.

Meanwhile, Brazilian meatpacker Minerva is up nearly 2%.

Related beef coverage: 

• “No Quick Fixes”: Supply-Chain Deep Dive Shows Beef Prices To Remain High

• US Beef Cow Cycle Low Set To Deepen, Keeping Steak Prices High

• DoJ Opens Criminal Probe Into Meatpacking Cartel As Food Stocks Slide

The move by the Trump administration to put a ceiling on ground beef and steak prices comes ahead of the midterm elections, as a race to make things more affordable in the wake of the energy price spike following the U.S.-Iran war becomes a central focus again.

We suspect U.S. ranchers won’t be too happy about foreign meats set to flood the U.S. in even greater quantities. 

A total of 11 hantavirus cases have been confirmed as of Tuesday morning, with global health officials warning that the number could rise.

The risk to the public from an illness called the hantavirus is low, a U.S. official said on May 11.

“Let me be crystal clear: the risk of hantavirus to the general public remains very, very low,” Dr. Brian Christine, assistant secretary for health and head of the U.S. Public Health Service, told reporters during a briefing in Omaha, Nebraska.

The Centers for Disease Control and Prevention had said in a May 8 health alert to doctors and health departments that doctors should be aware that imported hantavirus cases were possible but that “the risk of broad spread to the United States is considered extremely unlikely at this time.”

As Zachary Stieber reports for The Epoch Times, multiple people on board the M.V. Hondius, which departed from Argentina on April 1 and traveled to remote locations, including Antarctica, contracted a variant of the hantavirus called the Andes variant.

Three have died.

Christine said on Monday that “the Andes variant of this virus does not spread easily, and it requires prolonged close contact with someone who is already symptomatic.”

An American cruise ship passenger who tested positive on one test and negative on another was transported early Monday to the biocontainment unit at the University of Nebraska Medical Center, officials said. That individual is doing well and has no symptoms, Dr. Angela Hewlett, director of the unit, said at the briefing. That person will be tested again at some point.

Fifteen other Americans, including a British American, who were on the Hondius were admitted around the same time into a separate area called the quarantine unit. They have not displayed symptoms. They may be tested, based on conversations between physicians and those individuals, officials said.

Two additional Americans who were aboard the ship were transported to a biocontainment unit at Emory University in Atlanta. One of those Americans has shown symptoms of hantavirus; the other is that person’s partner.

The people being cared for at the facilities in Nebraska and Georgia can leave after they have been symptom-free for at least a few days, according to Dr. Brendan Jackson, acting director of the CDC’s Division of High-Consequence Pathogens and Pathology.

Other Americans who previously left the Hondius are in contact with state officials and have been told that if they develop symptoms, they should alert their doctors and those officials, Jackson said.

Symptoms of the hantavirus include fever, fatigue, and shortness of breath.

The virus typically spreads from contact with infected rodents, but officials say it may have been transmitted from person-to-person on the cruise ship.

Dr. Jay Bhattacharya, acting CDC director, said over the weekend that hantavirus is “not COVID” because it does not transmit as easily.

“I can assure you that the CDC has been absolutely on top of this outbreak,” he said.

“There’s not a great wealth of information,” said WHO epidemiologist Olivier le Polain during a public briefing Monday.

“We don’t know how much it might spread just before people develop symptoms.”

Decades of experience in South America have shown the virus to be associated with “rare human-to-human transmission after close and prolonged contact with a sick, infected person,” Erica Pan, California’s public health officer, told reporters Monday.

But the available evidence is limited.

No indications of a larger outbreak of the deadly hantavirus have appeared so far, a World Health Organization official said on May 12.

“At the moment, there is no sign that we are seeing the start of a larger outbreak,” Tedros Adhanom Ghebreyesus, the organization’s director-general, told reporters in Madrid, Spain, during a press conference with Spain’s prime minister.

“But, of course, the situation could change, and given the long incubation period of the virus, it’s possible we might see more cases in the coming weeks.”

The incubation period for the Andes variant of the virus is up to 42 days.

By Benjamin Picton, Senior Markets Strategist At Rabobank

Massive Live Support

“On massive life support” was Donald Trump’s characterization of the US-Iran ceasefire yesterday. This followed Sunday’s rejection of Iranian terms for peace that Trump described as “totally unacceptable”. In a boy-who-cried-wolf-style sign of growing market insensitivity to Presidential prognostications, Brent was only up 2.88% to $104.21/bbl and WTI crude remains below $100/bbl. Dated Brent rose by 0.6% yesterday to $105.62. This even as the Wall Street Journal reports that the UAE has been “secretly” carrying out attacks on Iran, including on refining infrastructure. 

US equities closed broadly higher but European stocks were mixed. The FTSE100 eked out gains despite (because of?) fresh signs that Keir Starmer’s premiership is also on “massive life support” as more than 70 of his own MPs have now publicly voiced opinions that the Prime Minister should go following last week’s shellacking at the hands of the Reform party in local government elections. The French CAC40 fell by 0.69% and the German DAX was virtually unchanged. Asian stocks also had a mixed session earlier in the day with losses for Japanese and Australian indices, but gains for chip-heavy markets in China, South Korea and Taiwan.

Bond markets have been more unified in their gloom over the last 24 hours. Yields on US 10s were unchanged at 4.41%, but virtually everywhere else saw chunky rises in benchmark borrowing costs. Yields on 10-year OATs were up 3.9bps, 3.5bps for Bunds, while Gilts saw yields spike 8.6bps in a sign that bond traders might be thinking it’s a case of “better the devil you know” when it comes left-of-centre Prime Ministers in the UK.

With the prime ministerial instability gauge now well and truly pointed towards “embattled”, Starmer gave a speech yesterday that was intended to strike a tone of defiance and send the message that he wouldn’t be going anywhere. In that speech he suggested that he had not been sufficiently radical in forcing the pace of change, that the UK needed to forge closer military and economic ties with the EU, and that “if we don’t get this right, our country will go down a very dark path” – by which he presumably means it would elect Nigel Farage as his replacement.

This might sound like a curious response to the rising appeal of a Eurosceptic party channelling popular sentiment that the country has already changed too much, too fast, while the incumbent government’s revealed lack of electoral appeal suggests that many voters think the country is already headed down a very dark path under Starmer’s leadership. The implication here is that Starmer isn’t really fighting Reform, but the rise of the left-wing Green party who are siphoning off erstwhile Labour votes. Clearly, the center cannot hold and we should expect even more intense polarisation ahead, and probably more damage to the budget. Whither the Gilt market?

Speaking of budgets, Starmer isn’t the only Anglosphere Labour leader saying that things aren’t changing fast enough. Australian PM Albanese made the same comment in relation to his country’s poisonously expensive housing market this week as his Treasurer prepares to deliver the Commonwealth budget later today.

As is now the norm for budgets, most of the major initiatives have been strategically leaked well in advance and a wind-back of investor tax concessions has been telegraphed as a social cohesion measure to placate Gen Zs angry about their effect on house prices (for our detailed thoughts on this, see here). The budget is also expected to introduce new rules for discretionary trust distributions to be taxed at the company rate (to reduce their appeal as a tax-minimisation device) alongside measures to boost defence spending and cut the pace of growth in the welfare state – something that Starmer was unable to secure support for among his own MPs.

Treasurer Chalmers has said there will be a focus on resilience with “more than the usual amount of savings, and more than the usual amount of [tax] reform”. Overall, the vibe seems to be a tightening of fiscal settings – which ought to be welcomed by the RBA – coupled with tax nudges to direct a greater volume of capital toward the productive sectors of the economy rather than allowing it to congeal in the housing market. Whither Aussie bonds?

Of course, while all this is going on the Strait of Hormuz remains functionally closed and world fertilizer and energy markets are treading air like Wile-e-Coyote run off the cliff. Donald Trump will be traveling to Beijing tomorrow to meet with Xi Jinping. Finding a resolution to the war is sure to be at the top of the agenda, with Trump likely to press Xi to lean on his Iranian and Russian allies to seek peace in their respective theatres. Russia has made conciliatory noises in recent days, while Iran has indicated a willingness to hand over some highly enriched uranium to an unspecified third party (Russia?). Is there a grand bargain to be made?

In a case of curious timing, the US just imposed fresh sanctions on individuals and firms involved in facilitating Iranian oil sales to China, and Acting Secretary of the Navy Hung Cao yesterday released a new 30-year shipbuilding plan. That plan anticipates the acquisition of 11 nuclear-powered Trump class battleships, new underwater drones, and an ongoing review to the Ford class aircraft carrier design to increase lethality and reliability while reducing unit costs and production lead times. The planned expansion of the US fleet and shipbuilding industrial base is undoubtedly a reaction to China’s growing naval strength and substantial advantage in production capacity. The message to Xi is an unsubtle one.

The FT’s Gideon Rachman characterises Trump as arriving at Xi’s court in a state of supplication, having effectively lost the trade war vs China and the shooting war vs Iran. This perhaps overstates the weakness of Trump’s position by ignoring the fact that the US has tightened its grip on global energy supply chains and has shown that is has the power to put its foot on the hosepipe of Chinese energy imports whenever it likes. In the flurry of commentary over China’s bumper trade surplus in April, it seems to have been missed that import volumes for crude oil were down sharply, but values were higher. Yesterday’s April PPI figures for China also underscored the uncomfortable effects that the Iran war is having on the Chinese industrial economy.

Xi will be acutely aware of this, and he will also be aware that the US holds similar power to disrupt Chinese food imports if it was of a mind to do so. Seapower IS power, as the shipbuilding plan should remind us all. In this respect, Trump holds better cards than the FT is giving him credit for. Perhaps it is no coincidence that China bought more soybeans in April than it had done for months.