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Brown University Prof Bans Take-Home Exams After Mass-Cheating

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Brown University Prof Bans Take-Home Exams After Mass-Cheating

Authored by Jennifer Kabbany via The College Fix,

A Brown University professor says he will no longer allow students to take exams at home after he caught a large chunk of his class cheating on a test.

Economics Professor Roberto Serrano said he allowed students to take a midterm at home, and 40 students, nearly half the class, earned a perfect 100; among the 86 students in the class, the average overall class score was 96, the Chronicle of Higher Education reported July 6.

“I immediately knew that something was fishy. In previous editions of the course, the average grade in the midterm ranged from 65 to 80,” the Ivy League professor said.

He said further review seemed to confirm his suspicions, so he told the class:

“I’m not going to declare it void for now. I’m going to give the class a chance to prove me wrong. If the distribution of grades in the final exam looks roughly similar to the distribution of grades on the midterm, then I’ll count the midterm. If not, I will declare the midterm null and void. Also, the final will be in person.”

Serrano told the Chronicle that, unfortunately, his fears were confirmed.

“Between the midterm in March and the final in May, there was a consistent flow of students dropping the class — many of them had scored 100 on the midterm,” he said.

“Of the 59 students that took the final, 19 of them failed, so they also failed the course. Quite a few showed up, signed the exam, and turned it in blank. The average grade for this final was by far the lowest in the history of this course.”

Underscoring the cheating scandal, Serrano is blind, and has had to overcome numerous hurdles as a student and an academic.

Asked what he thinks of students taking the easy route, Serrano said they’re only selling themselves short.

“A culture of effort and hard work should be inherent to learning. I worry many of our students now have the wrong idea, believing that the answer to any question can be obtained with a couple of clicks of the mouse,” he told the Chronicle.

“I tell them that years from now, their grades won’t matter. What will matter is how much they learned and how much stayed in their brain.”

Tyler Durden
Wed, 07/08/2026 – 15:20

Coffee Lovers, Take Note: Lavazza Sounds Alarm, Suggest It May Be Time To Stock Up

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Coffee Lovers, Take Note: Lavazza Sounds Alarm, Suggest It May Be Time To Stock Up

Following the largest daily surge in Arabica coffee futures since the Dot-Com bubble, the head of Italian coffee giant Lavazza Group warned that prices are unlikely to fall over the next two years.

Giuseppe Lavazza, chairman of the Italian roaster, was quoted by Bloomberg as saying, “The market needs to have stability before it’s time to think about a reduction of prices.”

Lavazza explained that it will take two harvests and a massive rebuilding phase to replenish inventories and ease supply constraints, making lower prices unlikely over the next two years.

On Monday, Arabica futures in New York posted their biggest jump in 26 years, as worsening weather in Brazil and shrinking exchange-managed stockpiles fueled a rally. The violent move higher was not just weather-driven. A big short squeeze also materialized.

That sent 60-day volatility to the highest since 2014 levels – a period where weather-driven supply shock in Brazil dented global supplies. 

Making matters worse is the El Niño weather phenomenon that will start emerging in the months ahead and will create adverse weather conditions not just for top-grower Brazil but for other agri belts around the world.

“I think we are living in a long-lasting period of instability and uncertainty,” Lavazza warned, adding, “Instability is the new constant.”

Lavazza noted, “We need a couple of very strong crops from Brazil and Vietnam to rebuild stability. So maybe the first good crop is arriving,” but we don’t yet have evidence it will be as good as was expected at the end of 2025. 

He added: “The coffee market now shows fundamental changes compared to the past. We are living in an environment we don’t know very well.”

The takeaway for coffee lovers is simple: stock up.

Tyler Durden
Wed, 07/08/2026 – 14:45

Are Flattening Curves And Style Rotations Deceptive Omens?

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Are Flattening Curves And Style Rotations Deceptive Omens?

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Bond market pundits often warn that bear yield curve flatteners or inverted yield curves ultimately lead to recessions. Similarly, some equity experts caution that periods of violent back-and-forth rotations among stock sectors and/or style factors are precursors to a market top.  Additionally, the combination of a bearish flattening trend and volatile equity rotations leads some analysts to forecast a recession, with concerning market repercussions.  

The argument we present in this article is that predicting economic or financial market activity is not as simple as following two indicators. Bear flattening trades, inverted yield curves, and frantic style (factor or sector) rotations are not definitive warnings of a market peak. They are extremely informative about where the economy, markets, and investor sentiment stand, but they do not tell investors whether or when the economic or market cycle will turn. Knowing where you are in a cycle is not the same as knowing when it ends. Confusing the two is a common mistake and can be a costly one for investors in late-cycle analysis.

Given that both indicators are currently flashing red, we explore how they can serve as important warnings of pending financial market and economic turbulence, but also as deceptive omens.

What The Yield Curve Tells Us

The shape of the yield curve, or the difference in yields between long and short-term US Treasury securities, indicates the market’s expected path for short rates plus a term premium. In other words, where does the market expect Fed Funds to be in the future, plus how much of a yield premium is the market paying investors to take on the inflation, economic, and oversupply risks of holding Treasury securities?

To help appreciate where the yield curve stands today and how it’s changed recently, we’ve included the graph below.

A notable feature of this long-term graph is that every time the yield curve flattened and inverted, i.e., the 2-year yield rose above the 10-year yield (the blue line fell below 0 on the y-axis), a recession (gray) followed. There is one exception. In 2022, the curve flattened, inverted, and then steepened, yet a recession has not materialized. 

Current Yield Curve Flattening

Recently, the yield curve has been flattening (declining) while bond yields have risen. In bond market parlance, that is called a bear market flattener (higher yields and a flattening yield curve). The table below shows that since late February, when the Iran conflict started, the 2-year note has risen by 76 basis points, the 10-year note by 46 basis points, and the 30-year bond by only 25 basis points. As a result, the 2/10-year yield curve flattened by 30 basis points and the 2/30-year curve by 51 basis points.

A bear flattening is the result of investors raising their collective expectations for higher short-term rates. This can be due to strong economic growth expectations and/or higher prices. At the same time, longer-maturity yields are less responsive, likely due to a subdued long-run growth forecast or a belief that higher inflation is temporary.

The flattening or inversion of the yield curve creates more restrictive financial conditions, acting as a brake on economic activity. An economy that warrants slowing is often one that is late in its economic cycle.

When the long-maturity yield falls below the short-maturity yield, i.e., it inverts, the usual interpretation is that investors expect future rate cuts because policy and/or rates are restrictive enough that the central bank will have to reverse course. However, that definition fails to consider the term premium, the compensation investors demand for holding longer-duration notes and bonds. A curve can flatten or even be inverted because the market expects rate cuts and/or because the term premium has compressed toward zero. Thus, it’s not definitive whether an inverted curve is due to expected rate cuts, well-anchored inflation, or forecasts of an economic downturn.

Equity Rotations

Equity leadership can be a tell of similar concerns, but through a different mechanism. Stocks are claims on future corporate cash flows, and those claims have duration. For instance, growth companies tend to have minimal cash flows or even run losses in the near term, but expectations are for large and growing earnings in the future. Thus, valuations for growth companies are based on distant-future cash flows and, accordingly, have a long duration.

Conversely, value companies generate cash flows that are nearer and more certain and are therefore considered to have shorter durations. When short-term interest rates rise and uncertainty about the future increases, the present value of distant cash flows is marked down far more than that of near cash flows.

For example, the 1-year present value of $100 at a 5% discount rate is $95.24, and at a 4% discount rate, it’s $96.15. The 1% change in rates impacts the present value by $0.91. Conversely, the 10-year present value of $100 at 5% and 4% is $61.39 and $67.56, respectively, resulting in a difference of $6.17 for the 1% change in rates. Accordingly, valuation multiples of growth companies tend to compress relative to those of value companies.

As we share below, in a hypothetical example, the value of the future cash flows of a value company with more upfront cash flows declines less with a 3% increase in the discount rate than that of a growth firm with more cash flows expected in the distant future.

A growth-to-value rotation is the equity market’s version of the yield curve flattening: both are duration-related repricings driven by the same change in the cost of money.

When Rotations Become Volatile

Typically, equity rotations in a late-cycle market become more volatile. In other words, no style or sector leads or lags for long stretches. These rapid rotations help clue us into a market regime that is becoming contested or changing.

Through the middle of an expansion, the macro picture is often clear with trend growth, accommodative or neutral monetary policy, and a steady discount rate. Because the regime is stable, leadership often remains in place for long periods as investor capital concentrates on the companies that benefit most from prevailing conditions. However, the market regime becomes challenged as changes in the broad economic and market environment are anticipated. Investors start asking questions such as:

  • Is monetary policy changing?

  • Is growth decelerating or reaccelerating?

  • Is inflation sticky or transitory?

As new economic and corporate data feed into the market, the discount rate becomes more sensitive. The market is forced to continually toy with its assumptions, and leadership ping-pongs as a result.

The volatility of style leadership is a proxy for regime uncertainty. The whipsaw action itself, not necessarily which types of stocks lead or lag, is the tell. A market that cannot decide between value and growth is a market that cannot decide what the discount rate will be, which is to say, a market that senses the regime is changing beneath it.

False Signals

There is a complication with what we have presented. The yield curve can be distorted by forces unrelated to the business cycle, such as shifts in the bond term premium, large-scale asset purchases (QE) or their reversal (QT), and significant government bond supply.  Equity rotations are at times heavily influenced by momentum chases and bouts of speculative behavior. Moreover, the rise of passive investment strategies tends to accentuate momentum trends.

When other factors influence the yield curve or the volatility of equity rotations, the “forecast” embedded in the curve and rotations becomes muddied and can falsely signal a market and economic top.

Condition And Timing Indicators

This brings us to the distinction that should govern how the signals are used. There is a difference between a condition indicator and a timing indicator. A condition indicator describes the economic and market landscape. A timing indicator tells you when the next event arrives. Flat curves and unstable leadership are good indicators of conditions, but can make for poor timing indicators.

This concept is like weather forecasting. A falling barometer tells you the atmosphere favors a change in the weather, likely a storm. It does not tell you what day or time the storm will arrive. In fact, despite the drop in barometric pressure, the storm may never form. Reading a barometer as a surefire countdown clock to a storm is an error, no matter how reliably storms and falling pressure correlate.

Summary

If you cannot extract a time frame for an economic and market peak from these signals, then what purpose do they serve?

The answer is that they help us prepare for a widening series of potential outcomes. Today, for instance, with the yield curve flattening and a series of violent rotations, we are maintaining stricter stop-loss levels, paying closer attention to technical analysis, focusing on our SimpleVisor rotation analysis tools, and assessing our risk more frequently.

The signals suggest the regime may be changing, and we should be prepared for that possibility. However, until that becomes more evident, we must take advantage of what the market has to offer. 

Tyler Durden
Wed, 07/08/2026 – 14:25

Bezos’ Blue Origin Seeks $10 Billion In First-Ever Outside Funding Round

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Bezos’ Blue Origin Seeks $10 Billion In First-Ever Outside Funding Round

Fresh off Elon Musk’s SpaceX IPO, it appears that, for the first time, Blue Origin is preparing to raise outside capital in a deal that would value Jeff Bezos’ rocket company at about $130 billion.

Andrew Ross Sorkin, financial columnist for The New York Times and a co-anchor of CNBC’s Squawk Box, wrote in a DealBook report, “I’ve got a scoop on Blue Origin closing in on a big fund-raising round, which is expected to value Jeff Bezos’ spaceflight company at about $130 billion.”

“It would be the first time that outside investors buy a piece of Blue Origin in its 25-year history,” Sorkin said.

Blue Origin is seeking $10 billion in a new funding round, with Coatue Management expected to lead with a $4 billion commitment. Bezos is preparing to contribute $2 billion, while the remaining $4 billion is expected to come from outside investors.

The fundraising would give Blue Origin a $130 billion valuation as it ramps up spending and tries to narrow the gap with SpaceX – yet that gap remains massive in terms of launch capacity.

In recent days, NASA Administrator Jared Isaacman said investigators have found that a “potential engine issue” was the cause of the catastrophic Blue Origin New Glenn rocket explosion that damaged part of a launch pad at Cape Canaveral on May 28.

Blue Origin has relied heavily on Bezos’ personal wealth for years, including proceeds from Amazon stock sales. Bringing in outside money will accelerate spending and allow for more competition in America’s space race, which the Trump administration has said is necessary to create a robust space industry.

Musk’s SpaceX went public last month and raised $85 billion. SpaceX is now valued at nearly $2 trillion, despite a pullback in shares, currently trading around $150 in the premarket session.

A flurry of Wall Street analysts are turning incredibly bullish on SpaceX, with 12-month price targets ranging from Raymond James’ $800 to Arete Research’s $401 and Morgan Stanley’s $300. That’s because SpaceX has a launch moat that will be maintained for years – its launch capacity surpasses not just Bezos’ rocket company, but entire nation states such as China and Russia combined. Read the report.

Tyler Durden
Wed, 07/08/2026 – 13:45

The Great Migration: What The Dow-To-Gold Ratio Is Telling Us

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The Great Migration: What The Dow-To-Gold Ratio Is Telling Us

Authored by Bryan Lutz, Editor at Dollarcollapse.com,

It takes about 13 ounces of gold to buy the Dow Jones Industrial Average. The Dow-to-gold ratio prices the entire American stock market. And it does it in the one currency no central bank can print. Over the past century, it tells the same story.

It measures when the US stock market is overvalued… when it’s promising too much.

And there are a lot of promises that don’t look as good as they should these days.

A bond pays only if the issuer stays solvent.

A dollar holds its value only if the people who print it show restraint.

Yet, tangible wealth answers to no one. An ounce of gold is worth an ounce of gold whether a single counterparty keeps their word, which is what makes gold an honest denominator in the Dow-to-Gold ratio.

The ratio goes up, and it comes down. During the great manias of the twentieth century, paper looked invincible: 18 ounces to buy the Dow in 1929, 28 in 1966, 41 at the top of the dot-com boom in 2000. Then the tide went out, bubbles popped and the markets turned to commodities over equities.

As the ratio goes down, eventually it hits a bottom.

The same Dow cost almost nothing in metal, barely 2 ounces in 1932 and close to a single ounce in 1980. So, greed priced the top. Fear, and sound money, priced the bottom.

A century in one line:

Every peak in paper has been repriced in gold.

Each top marked a moment the market trusted claims more than the things behind them, and each was followed by a long migration back toward metal that ran for years, not months.

Here is where we correct the record. The move off the 2000 top has been anything but tidy. The ratio fell to roughly 6 by 2011, then the long everything-rally, cheap money layered on cheap money, hauled it back above 19 by 2021. The 2026 equity melt-up has lifted it again, to about 13, even with gold sitting near record highs.

The same story, up close:

However, the long-term trend since 2000 points down. The path has been a bit of a switchback. Anyone waiting for a clean glide toward gold got a decade of reversals instead, which is why we distrust anyone selling a date for gold.

Gold’s historic floor sits between 1 and 2 ounces. From 13, most of that move is still ahead, whenever the switchback resolves. In my opinion, this is not the time to wager a standard 60/40 portfolio as a wager that the denominator stays at or around 13. Stocks, and bonds are unlikely promise-keepers, and believing the dollar behind them holds is just as risky. The denominator is not sitting still. Every deficit the Treasury runs and every dollar the Fed prints wears down the promises the old 60/40 portfolio depends on. For most of the past forty years, it paid anyway. This time it will not.

“All roads, in other words, lead to trouble of some sort, which makes year-ahead asset allocation pretty easy: you just own everything that protects you regardless of which road gets traveled.”

~ John Rubino, The Money Bubble

After twenty-five years, the score still reads the same. Paper is expensive, and gold is patient.

Tyler Durden
Wed, 07/08/2026 – 13:25

Stellar 10Y Auction Stops Through, With 3rd Highest Foreign Demand On Record

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Stellar 10Y Auction Stops Through, With 3rd Highest Foreign Demand On Record

Following yesterday’s stellar 3Y auction, moments ago – with yields surging to the highest level since mid-May – the Treasury completed the sale of $39BN in a 9 Year 10 Month reopening of 10Y cusip QQ7, in what was another spectacular auction.

The note sale, which priced just after 1pm ET, stopped at a high yield of 4.580%, up from last month’s 4.538%, and stopped through the When Issued 4.586% by 0.6bps, the biggest stop through since Sept ’25.

The bid to cover rose to 2.593 from 2.565, which was the highest BtC also since last September, and obviously well above the six-auction average of 2.46.

The internals were also some of the best on record: foreign buyers (i.e., indirects) were awarded 81.5% of the auction, up from 78.21% in June and the 3rd highest on record.

And with Directs sliding to 10.73%, the lowest since April 25, Dealers were left holding just 7.8%, down from 9.5% in June and the lowest since January.

Overall, this was an extremely strong auction, perhaps the best 10Y of 2026, and with yields surging today, it shows that not only retail traders, but bond investors are also willing to buy the dips. 

Tyler Durden
Wed, 07/08/2026 – 13:24

Russia Bans Diesel Exports, Assuring Even Higher Prices

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Russia Bans Diesel Exports, Assuring Even Higher Prices

As was widely speculated in recent days, Russia banned exports of diesel in order to avoid domestic shortages after a flurry of attacks by Ukrainian drones on the nation’s refineries.

“Today we introduced ban on exports of diesel,” Deputy Prime Minister Alexander Novak said at the government’s meeting with President Vladimir Putin.

The decision will further squeeze global fuel markets, which are already under pressure due to the supply disruption caused by the Iran war. Russia’s decision means that the recent surge in the diesel margins to record highs, which have completely disconnected with oil prices, are set to rise even more. 

Last year, Russia accounted for about 11% of global supplies of diesel, according to data compiled by Bloomberg from analytics firm Vortexa.

The logical corollary is what the DOE reported earlier today, namely that US product exports – which include diesel and other refined products – surged to a record high.

Exports of the fuel were previously banned only for traders and other sellers in Russia that don’t make their own fuel.

The diesel ban comes on top of existing restrictions on most shipments of gasoline and jet fuel. Russia has been struggling to ensure domestic oil-product supplies and to contain prices at the pump after drone attacks damaged several refineries. 

Ukraine’s intensified strikes pushed Russia’s crude-processing rates to multi-year lows. Many regions have been forced to impose some degree of fuel rationing because of the disruptions. 

Even before the ban, Russia’s diesel and gasoil exports were dropping significantly. During the first three weeks of June, its exports of diesel and gasoil averaged about 490,000 barrels a day, only slightly more than half of what the nation shipped to foreign markets in 2025, according to data compiled by Bloomberg from Vortexa.

Tyler Durden
Wed, 07/08/2026 – 13:10

Iran Threatens To Choke Off Hormuz Again As US Readies Blockade; Trump Says Tehran Wants To Assassinate Him

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Iran Threatens To Choke Off Hormuz Again As US Readies Blockade; Trump Says Tehran Wants To Assassinate Him

Summary

  • Trump tells NATO summit that Iran wants to assassinate him: “on every single one of their list.”
  • Iran threatens to reclose the Strait of Hormuz and suspended final talks with the US.
  • The US earlier revoked an Iranian oil waiver & now signals readiness to restore a maritime blockade.
  • Trump said the ceasefire is over and warned of fresh US strikes on Iran, probably “tonight”.
  • Oil jumps above $80 as fears of renewed conflict & return to Hormuz Strait closure intensifies.

Strait of Hormuz traffic returns to normal by August 31?
Yes 19% · No 82%
View full market & trade on Polymarket

*  *  *

Trump Tells NATO Summit Iranians Want To Assassinate Him

President Trump while giving a closing address at the end of the NATO summit in Ankara repeatedly claimed that Iran was plotting to assassinate him, saying he was “on every single one of their list.” He claimed: “They want to take out the US Leader. I’m on every single one of their list. So far, I’ve had a bit of luck, but maybe it won’t last. They’re evil and sick people, and we must get rid of this cancer.”

He suggested that it’s time to “finish the job” and yet at other times while fielding questions from reporters shied away from laying out anything that sounds like regime change. Instead he opted to again talk about how the US can never allow Iran to have a nuclear weapon. He again stressed that “lunatics” can never have a nuclear weapon.

On the claimed assassination plot, it’s unclear whether he has something specific in mind, in terms of a recent statement from the Iranian government. He could be referencing media reports from earlier this week quoting mourners and speakers at Khamenei’s funeral. For example the following was in a Tuesday Reuters report:

As they passed under a bridge, mourners hurled stones at a billboard hung from above ​showing U.S. President Donald Trump with a bullet aimed at his head.

“The U.S. killed our father,” it read. “We won’t let you go!”

As demonstrators set fire ​to U.S. and British flags, women in black chadors held aloft red placards with the English words “KILL TRUMP” in black letters.

Others held ⁠aloft posters with the faces of Trump, Vice President JD Vance, Defense Secretary Pete Hegseth or Israeli Prime Minister Benjamin Netanyahu, each depicted in the crosshairs of a ​gunsight, with the words “There will be blood”.

Ahead of more potential renewed strikes on Iran tonight, CENTCOM is saying its forces are at the ready:

Iran Threatens To Reclose Strait, as US Military ‘Ready’ to Restart Blockade

Iran has once again threatened to close the Strait of Hormuz, according to state broadcaster Press TV on Wednesday, citing an Iranian official. Iran is of course planning strait only under its own arrangements, or a protocol involving collection of fees and utilizing a designated route close to its coast, “as per the Islamabad Memorandum of Understanding (MoU).”

The Iranian official further warned the military stands ready to “strike at least twice the number of targets hit” in response to any strikes by the United States. “The developments of the past 48 hours show Iran won’t back down from managing the Hormuz,” the source noted.

  • “The U.S. military stands ready to restart the blockade of ships to and from Iranian ports if ordered to do so, a U.S. official tells Fox News”, Fox’s Friden reports.
  • “Iran suspends talks on a final settlement with the United States”, TASS reports citing an Iranian source.

“Any threat will receive a powerful response,” the official was quoted in Press TV as saying, and warned further that the Islamic Republic’s armed forces do “not distinguish between the United States and its partners in the region.” The official warned Trump that the US “will gain nothing” from making such threats.

“He (Trump) will certainly lose both the Strait of Hormuz and the negotiations over a final agreement,” said the source. “The choice is now his.” Meanwhile…

OIL EXTENDS GAINS, BRENT CRUDE RISES ABOVE $80 A BARREL

And WTI…

Trump: “Probably Hit Iran Tonight”

After earlier saying from the NATO summit in Ankara that the Iran ceasefire is “over” – and amid fears of renewal of full-scale war given that Tehran has launched drone and missile attacks on nearby American allies Kuwait and Bahrain once again, President Trump said on Wednesday that he would “probably hit Iran tonight”.

He issued the major threat and warning during a press conference at the NATO summit: “I’ll give a little warning: We’re going to hit them hard tonight,” he told reporters just before his meeting with Ukrainian President Volodymyr Zelensky. He later lambasted Iran for “killing soldiers, killing people for 47 years,” and that because of that, the US has “a score to settle.” He added: “We may just do it without a deal.” He also sought to once again explain his view that it’s not about regime change, but about the nuclear issue.

Geopolitical news source DropSite is pushing back against some of Trump’s newest claims, particularly that Iranians security services gunned down “54,000 protesters” during the January economic protests, commenting:

Trump today claimed Iran’s revolutionary regime killed 54,000 protesters at the start of the year, inflating the 40,000 figure he repeated through much of the US-Israeli war to justify and build support for U.S. action. There is no evidence for either figure.

HRANA, which has received U.S. funding, documented about 7,000 deaths, including many Iranian security and police. Iran puts the death toll just above 3,100 and says rioters killed civilians during protests that were overtaken by Israel- and U.S.-backed armed elements. Scores of videos from the January 2026 riots show armed men destroying mosques and government buildings and carrying out vigilante killings of security personnel.

Meanwhile, it’s not a war, Trump has repeated… but what’s next and what is the ultimate endgame here? Is there a coherent strategy yet? Trump further on Wednesday, while speaking alongside Zelensky and fielding questions, floated that “if we have to we will take out higher level targets” – and that “we may take over Kharg Island”. He again admitted the Iran deal may not stick, after the US “knocked out 28 boats last night”. He further warned that US forces will probably take out more boats tonight.

  • TRUMP, ON ATTACKS TONIGHT: NOT A THING IRAN CAN DO ABOUT IT
  • TRUMP:WOULD HATE TO STRIKE DESALINATION PLANTS, BUT MAY HAVE TO
  • TRUMP: WE MAY PUT DOWN THE BLOCKADE ON IRAN
  • TRUMP: BLOCKADE WOULD ONLY APPLY TO IRAN

Trump on Ceasefire, MoU Deal: “I think it’s over; they’re scum.”

Brent crude futures jumped more than 6% in London after President Trump told reporters at a press conference in Ankara that the tentative ceasefire with Iran is over.

“To me, I think it’s over. I don’t want to deal with them anymore; they’re scum,” Trump told reporters. 

Trump’s remarks came after Iran launched missiles and kamikaze drones at several merchant vessels in the Hormuz chokepoint on Tuesday. This was countered by overnight US strikes, as fears of conflict erupting once more are on the rise.

However, Trump stopped short of saying the U.S. would restart the war and said he would let talks continue if the parties were willing.

Crude Update

In European trade, front-month Brent crude futures jumped 6% to $78.63 a barrel, while West Texas Intermediate rose 6.2% to $74.85 a barrel. Natural gas prices rose as well, with the benchmark Dutch TTF contract up 4.8% to 49.04 euros per megawatt-hour.

Hours before the strikes, the US Treasury revoked a sanctions waiver that had allowed Tehran to sell oil, reversing a key element of the interim deal.

Trump also told reporters that he would continue to let his negotiators talk to Tehran, though he thought “they’re wasting their time.”

Eroding Confidence in Strait’s Reopening

On Tuesday afternoon, the Joint Maritime Information Center upgraded the Hormuz risk rating to “Severe” after three tankers were targeted by Iran. This renewed uncertainty in the critical waterway will only pressure the normalization of vessel flows.

“Every renewed attack on commercial shipping further erodes confidence in the Strait’s reopening, making each future recovery more fragile than the last,” said Michelle Brouhard, head of policy and geopolitical risk at Kpler. “If every reopening is assumed to be temporary, freight rates remain elevated, insurance costs remain high and fewer vessels are willing to re-enter the Gulf.”

Dominic Ellis, UBS equity analyst covering oil and gas, wrote in a note:

The US carried out a new round of strikes against Iran in response to recent Iranian attacks on commercial vessels in the Strait of Hormuz. Iran in turn launched missile and drone attacks on US assets in Kuwait and Bahrain. While this latest escalation does not mean an end to the diplomatic progress made in recent weeks, it underscores the challenges of diplomacy when both sides believe they have the upper hand.

Markets were too quick to buy into the de-escalation narrative in my view, and while there has been evidence of progress and of a rebound in vessel flows via the Strait of Hormuz, the latest developments may lead to more realistic expectations on the return to normalcy and a slightly higher range for oil in the near term.

The likelihood of a spike above $100/b remains low, however, even in the event of further tit-for-tat strikes in the Middle East, given the surprise sustained drop in Chinese crude imports.

Latest Bloomberg data tracking ships transiting the Hormuz chokepoint with transponders on remain elevated, but the number of vessels making the East-West route has fallen dramatically, while West-East remains steady.

Also, note that the oil market’s forward curve has shifted into backwardation. This occurs when near-term futures trade at a premium to longer-dated contracts. The shift shows traders are once again willing to pay up for immediate crude supplies.

More Geopolitical Headlines

via Newsquawk…

Iran Commentary

  • Iranian Parliament Speaker Ghalibaf said the US has violated major parts of the MoU, citing US attacks on southern Iran, reinstating oil sanctions and threats of further strikes as MoU violations.
  • Iran’s Foreign Ministry states that the US activity overnight has “rendered important and fundamental parts of the Memorandum of Understanding on the End of the War ineffective”.
  • Iranian President Pezeshkian said the US, whether as World Cup host or in its foreign policy, manipulates the rules and resorts to deception, and that Iran rejects such tactics.
  • Iran’s top joint miliary command said Iran will give a crushing response to America’s aggression and terrorist action, and under no circumstances will they allow them to interfere in the affairs of the Strait of Hormuz and its management.
  • Advisor to Iran’s Supreme Leader said US President Trump intends to attack again and we are fully prepared.
  • Iran’s Foreign Ministry condemns the US Treasury’s move to revoke the temporary suspension of sanctions on Iranian oil sales, will take any measure it deems necessary to safeguard its interests and national security. Iran holds the US government responsible for the consequences of the breach of the Memorandum of Understanding.

Overnight Attacks

  • Several explosions have been heard in Bushehr, Iran, according to Mehr news; Mehr’s journalist on Kharg Island denies reported of an attack on Kharg, despite some reported of an incident being published. Elsewhere, sirens were reported in Bahrain once again.
  • Renewed explosions sounds heard around Iran’s Qeshm and Sirik, Mehr reported.
  • Iran’s army said it targeted the Sheikh Isa Base in Bahrain and warns of more attacks if the US repeats strikes on Iran, Mehr reported.
  • Iran’s IRGC said that, in response to the US aggression, they hit 85 important US military installations in Port Salman, Bahrain’s 5th Maritime Zone and Kuwait’s Ali Salem Air Base.
  • Iran’s IRGC said they downed a US Mq9 drone in the south of Iran, Press TV reported.
  • Iran fires several anti-ship missiles and drones towards US Navy warships in the Sea of Oman, Fars reported citing the Middle East Spectator.
  • A US official said the strike on Iran was a punitive action, not a proportional response, and that the operation will not end in the short term, CNN reported.

US Commentary

  • US President Trump said the Iran ceasefire is over “I think”; as far as I am concerned, it is a waste of time dealing with Iran. On the MoU, “think it is over”. Adds, “I do not want to deal with Iran”, they are a “bunch of liars”.
  • US President Trump said (on Iran) he will allow US negotiators to continue to talk if they want. But, “I think this is a waste of time”.
  • US President Trump said have had some great meetings; attacked very powerfully against Iran last night. Have wasted a lot of time with Iran. Iran does not know what it is doing. Iran shot rockets at the ships, which is why the US shot back. Iran is a “dirty” player, “are scum”.
  • US President Trump approved the Iran strike plan and ordered it while in Turkey, a US official tells Axios’ Ravid; the official said it is still unclear how long the strikes are going to continue.
  • US Secretary of Defence Hegseth has cancelled his visit to Israel, N12/Ynet report.

Others

  • Turkish President Erdogan said Europe must take more responsibility when it comes to NATO.
  • US President Trump said China is attempting to takeover the Panama Canal, will not let this happen. China has been treating the US right. Big fan of Chinese President Xi.
  • Ukrainian Armed Forces said Kyiv is under missile attack.
  • Israeli fighter jets carried out attacks in Barachit and Beit Yahoun in southern Lebanon.
  • A Pakistani Boeing (BA) plane flying to Karachi has crashed, with sources stating the plane was mistakenly targeted by the US, IRIB reported.
  • Chevron’s (CVX) Yasa Polaris oil tanker, used for CPC shipments, was attacked by drones off Russia’s Black Sea coast, according to sources.
  • Russia’s Gazprom said Ukraine attacked facilities of gas exports to Turkey; supplies not affected.
  • Ukraine’s Military said it struck two oil refineries, six tankers, bridges and the Borisoglebsk airfield; AIF-NK oil refinery in Nizhny Kamsk was also damaged.

Tyler Durden
Wed, 07/08/2026 – 13:05

Trump Admin Approves Public Release Of OpenAI’s GPT-5.6 Models Ahead Of Thursday Release

survivalnomics
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Trump Admin Approves Public Release Of OpenAI’s GPT-5.6 Models Ahead Of Thursday Release

The Trump administration has approved the wide public release of OpenAI’s advanced GPT-5.6 model family, a source familiar with the discussions confirmed to Axios on Tuesday. OpenAI announced late Tuesday night that its flagship model, named Sol, along with the more accessible Terra and Luna variants, will launch publicly this Thursday.

Prompt via GPTcommands

The decision marks the latest delayed rollout due to coordination between the U.S. government and leading AI companies over access to frontier systems.

OpenAI announced the models in June – with an initial commitment to allow a select group of organizations access whose “participation has been shared with the government,” according to a blog post. According to the company, “we’re introducing a new max reasoning effort to give Sol the most time to reason deeply. Additionally, we’re introducing a new ultra mode that goes beyond the capabilities of a single agent by leveraging subagents to accelerate complex work.”

Last month, the administration directed OpenAI to begin with a limited release of GPT-5.6, restricting early access to government-approved entities only. OpenAI had publicly stated at the time that a staggered approach was not its preferred method and that both companies and regulators were operating without finalized standards called for in President Trump’s recent AI executive order.

The new green light followed additional testing and meetings – with technical experts from OpenAI traveling to Washington, D.C. to answer questions during the review process. The evaluation was conducted by the Center for AI Standards and Innovation (CAISI) within the Department of Commerce – the entity responsible for assessing advanced AI systems for safety, security, and standards alignment.

The New Normal

Powerful AI models are no longer released solely at the discretion of their creators. The U.S. government and top AI labs are actively negotiating – model by model, in real time – who gets access and under what conditions due to concerns over national security, potential misuse, the need to maintain American leadership in AI while managing downsides. Of course, big brother is also shackling US models while cheaper, more efficient, open-weighted Chinese models are starting to dominate. That said – China is now considering restricting access to their models.

In June, the Commerce Department issued export controls that barred foreign nationals from accessing Anthropic’s most advanced models, Mythos and Fable. The restrictions were so broad that Anthropic temporarily withdrew the models from the market entirely to comply.

The ban on Fable was lifted last week, with customer access restored the following day after safeguards were implemented – and users reporting performance hits thanks to the beefed up guardrails.

So, this is the new normal. Companies like OpenAI and Anthropic have said they are working with the government while clearer, more standardized release frameworks – outlined in the administration’s executive order – are still being finalized.

For developers and users, the immediate outcome is positive: after weeks of limited availability, GPT-5.6’s full capabilities will soon be open to the broader public and enterprise customers. For policymakers, it demonstrates that targeted reviews and technical collaboration can resolve concerns without indefinite delays.

Tyler Durden
Wed, 07/08/2026 – 10:25

The Plumbing For Vast Defense Spending Needs To Be Set Up

survivalnomics
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The Plumbing For Vast Defense Spending Needs To Be Set Up

By Michael Every of Rabobank

In response to Iranian strikes on ships using the Omani route in Hormuz, the US has struck Iranian air defense, missile, and drone sites in the Strait and suspended its oil sanctions waiver. These are clear breaches of the MoU, and we will now see if Iran escalates –it says it will take “decisive” action– with the risk of war if the US is also prepared to go that route. We suspect the US will try to step back for now. Even so, it should be clear why our base case is that more war is likely after the midterms. Obviously, oil prices are up today on this news; but crack spreads are already so wide that hardly matters.

Elsewhere in the Middle East, Secretary of War Hegseth is to visit Israel today as PM Netanyahu reiterates that he and Trump align on ”the big things” over Iran; bomb attacks rocked Damascus as France’s Macron visited; Lebanon’s president is to get his first White House visit; and the FT reports Saudi Arabia is blocking private sector payments to Dubai – a sign of rising tensions between those two GCC economies.

At the Ankara NATO summit, Trump struck a friendlier tone towards Turkey than many in Europe, removed sanctions over its purchase of the S-400 Russian antiaircraft system, and saying he’ll “certainly consider” selling them F-35s – setting off alarms in Jerusalem and Athens.

The summit has already seen Secretary General Rutte say, “Admit it – Trump was right.” Yes, Trump just reiterated he could pull all his troops out of Europe (no: Congress wouldn’t allow it) and still wants to control Greenland, which implies fission. But NATO announced joint economic projects to counter Russia and China, ranging from critical minerals to drones to missile shields, aimed at building up a joint military-industrial base: that implies fusion. So does South Korea and NATO agreeing to open procurement talks as President Lee Jae Myung calls for a higher-level defence partnership, something Japan is also pushing for; and as Japan, South Korea, and the US announced cooperation over a new US breakthrough in small modular nuclear reactors. If we count Australia in too at some point, that all seems like a potential building ‘bloc’.

That still comes at a very high price. Ankara has already seen $50bn in defense deals, but that’s a tiny fraction of what’s needed to rearm. Indeed, as European and Canadian defence spending growth is expected to slow this year, and the UK’s new plan falls far short of what’s required, there’s chatter of a ‘World Bank for Defence’, as the UK Chancellor also calls for rival international defense schemes to merge. In short, the plumbing for vast spending needs to be set up.

In that light, yesterday saw the BOE float easing bank capital rules despite what Bloomberg calls “mounting risks,” following new Fed Chair Warsh’s stance: will the BOE also encourage lending into the physical economy, i.e., the military-industrial complex, rather than just holding financial assets; and could it follow a potential US lead on a new inflation measure, as our US strategist plots here? Moreover, the BOE’s new crypto framework regulates GBP stablecoins but allows foreign ones, i.e., USD, to operate under US legislation, opening the door to their adoption.

Not in the same arena (yet), the RBNZ today hiked rates 25bps to 2.50%, as both we and the market had expected. The Bank said that more tightening is needed to bring inflation sustainably back to the 2% midpoint of its target, and RaboResearch maintains a forecast of two more 25bp rate hikes in 2026, with an additional 25bp hike in Q1 next year to bring the OCR to 3.25%.

Meanwhile, German business leaders warned Chancellor Merz that far more is needed to prevent the country experiencing a ‘lost decade’; Airbus is to make its first foray into engine manufacturing with a hydrogen project; and EU border chaos has prompted a delay to a planned pre-authorized travel system.

In the Americas, the White House is pressuring retailers over beef prices; and Canada told the UAE it’s not ready for a planned C$70bn of FDI as it doesn’t have any projects on hand(!)

In Asia, a Chinese policy advisor stated that China has the potential to become the world’s largest consumer market by 2041 – as data show its housing market has reversed 20-years of price gains (not always a bad thing in terms of consumer spending power), and a report has it that hundreds of millions of workers are now in the gig economy. That would imply China’s huge trade surplus will be very hard to eliminate, as a trade war with Europe looms alongside tariffs from the US and an emerging bloc-based NATO architecture.

Indeed, as the IMF appoints former BOE advisor Tenreyro as its next chief economist, the old establishment is on the back foot. See the op-ed today in the New York Times from Mohamed El-Erian arguing ‘America was being played. The Bessent Doctrine says those days are over’, which says economic statecraft has taken over and the global leaders of tomorrow need to learn that “considerations of national security, domestic politics, and geopolitics no longer play second fiddle to traditional business interests in determining corporate and economic outcomes. Those business interests are now being sidelined.” This will be a shock to anyone who didn’t read Grand Macro Strategy in November 2024, which made the same arguments and showed how it would happen.

Contrast that with the argument made by Adam Tooze in the Financial Times that the USD is no longer a global reserve FX but just a “profit dollar” backed by rising asset prices. There’s a vast realpolitik difference between financialisation and production but arguing one shouldn’t hold dollars because US assets appreciate is rather odd absent a counterargument for Hamiltonian neomercantilism which many, if not all, critics of the US also reject as the solution.

But back to “domestic politics.” The US Democratic Party candidate for a Maine Senate seat is being pressured to step down over a serious criminal allegation, opening a tug-of-war not just for that seat but within the Democrats between the mainstream and populist wing. That’s after President Trump used an Independence Day speech to rail against “communism.”

In France, Le Pen was given the legal all clear to run for president in 2027, while wearing a police ankle tag. Does this open the door to populists winning or is this an Establishment tactic to put forward a hobbled Le Pen rather than her nimbler (and more popular) deputy Bardella?

Reform UK leader Farage resigned his parliamentary seat over allegations he should have reported a large personal gift and possible party financial support before becoming an MP. He wants to fight a “two-fingers up to the Establishment” by-election, which Labour and the Tories will not contest. One view is Farage is now a farce, as when he wins the pointless by-election the parliamentary investigation into the gifts will just continue. Yet if it concludes there was wrongdoing, he faces suspension from Parliament for 30 days… and another by-election. Another view is Farage is a force and White Van Man will see the Establishment as the farce, just as happened with Trump. Mirroring that episode, the Guardian are pushing a criminal component to the gifts: but Channel 4 interviews of ‘pub-ulists’ in Farage’s seat of Clacton, even with leading questions, saw that as a stitch-up.

Indeed, the Establishment can lose: Prince Harry and other claimants could face a £50m(!) legal bill after losing a phone-hacking court case. Expect a slew of new streaming specials on how to make cupcakes soon?

It’s not only the IMF, central banks, and NATO, who need to get baking, perhaps.

Tyler Durden
Wed, 07/08/2026 – 10:05

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