US Warns Europe: Release Emergency Diesel Supplies Or Face Export Ban
The refined products crisis remains unresolved as the Northern Hemisphere winter approaches.
Speaking in the Oval Office on Wednesday, President Trump said he holds discussions “every day” about a potential diesel export ban, blaming Russia’s war in Ukraine for fueling the supply squeeze. His administration is now pressuring European governments to release emergency diesel inventories to contain further price surges and reduce the risk of an economic shock in the coming months.
Reuters reports that the Trump administration has asked Germany and France to release emergency diesel inventories to help create a buffer against the supply squeeze in the industrial fuel or face a potential US diesel export ban.
The total request calls for the release of 120 million barrels of diesel over the next six months, according to a source in a European capital cited by the outlet. That would be equivalent to about 660,000 barrels a day of additional supply.
“It is in Europe’s best interest to work with the United States as we pursue multiple pathways to boost the supply of refined products and lower costs for consumers,” one source, a US official, told Reuters.
Trump warned yesterday in the Oval Office that an export ban would “have a negative impact on gasoline” prices but could lower diesel costs. He warned that Russia’s war with Ukraine is the main driver of soaring prices. Russia recently extended an export ban on the industrial fuel.
Goldman analysts Yulia Zhestkova Grigsby, Alexandra Paulus and Daan Struyven noted earlier this week that estimated “dark exports” have helped boost Persian Gulf oil exports to 23.3 million barrels a day over the past week, back to prewar levels. Still, refined product exports remain at just half of their 2025 averages.
Goldman energy analyst Nikhil Bhandari warned last month that the refining crisis would persist through 2027 and prolong the pain at the pump.
Elevated diesel prices across the West risk triggering an economic shock, according to Bloomberg Intelligence senior commodity strategist Mike McGlone. He said that shock could be similar to what happened during the 2008 energy crisis.
Perhaps the first domino has already fallen: trucking companies with the weakest balance sheets fall first.
Bloomberg commodities expert Javier Blas wrote earlier on X, “Europe is finding itself sandwiched from all sides when it comes to refined products … diesel in particular (some of the damage is due to the US-Iran war; some is due to Ukraine-Russia; some is due to China, and a lot is self-inflicted). Policy response: Head in the sand.”
US Energy Secretary Chris Wright said Wednesday that the Trump administration expects announcements from Europe very soon about tapping emergency diesel supplies.
Tennessee Botches Execution: Inmate Still Snoring After Two Doses Of Pentobarbital, Hauled To Hospital
The State of Tennessee spent Wednesday trying to carry out a death sentence it has had on the books for thirty years, and ended the night with the condemned woman in an ambulance.
Christa Gail Pike, 50 – the only woman on Tennessee’s death row – was still breathing, audibly snoring, and maintaining a heartbeat after prison staff administered two doses of pentobarbital at Nashville’s Riverbend Maximum Security Institution. Media witnesses were escorted out around 8:53 p.m. local time while her snoring could still be heard. Pike was subsequently rushed to an off-site hospital, prompting Governor Bill Lee to halt all remaining executions for the year and order a third-party review.
Pike was sentenced to death in 1996 for the torture-murder of 19-year-old Colleen Slemmer, a Job Corps classmate she lured into the Knoxville woods in January 1995 at age 18 – where she bashed the girl’s skull in with a chunk of asphalt after carving a pentagram into the victim’s chest with a friend. Pike started showing off pieces of Slemmer’s skull at school, at which point she was arrested (with a chunk of skull found in her pocket).
Fox 17 investigative reporter Kelly Avellino posted that Pike “appeared to receive 2 doses of pentobarbital, and she was still awake 40 minutes after” before being transported.
Unbelieveable. Officials were unable to carry out the execution of Christa Gail Pike, witnesses said, after the lethal injection was administered. Pike appeared to receive 2 doses of pentobarbital, and she was still awake 40 minutes after. Pike is now en route to the hosptial. https://t.co/oUfWXlhAsx
A day that started in court and ended in an ambulance
Pike was scheduled to die at 10 a.m. She would have been the first woman executed in Tennessee in roughly 200 years, and the 19th woman executed in the United States since 1976.
That morning, the U.S. Court of Appeals for the Sixth Circuit issued a short 2-1 stay. The Tennessee attorney general immediately asked the U.S. Supreme Court to vacate it. Just before 6 p.m., the Court complied, issuing a two-sentence order devoid of reasoning. Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson dissented, with Sotomayor writing that “Tennessee’s desire to expedite Pike’s execution by a few days or even weeks cannot outweigh her ‘fundamental interest in [her] own life.’” She added that in capital cases, an “appreciation of our own fallibility” demands caution “before acting irretrievably.” With the legal roadblocks cleared, the state proceeded.
The judicial scramble followed Governor Lee’s denial of clemency two days prior. On Sept. 28, he announced that after “deliberate consideration,” he would uphold “the sentence of the State of Tennessee.”
What the witnesses actually saw
Tennessee Lookout and the Tennessean reconstructed the chaotic scene inside the chamber using accounts from media witnesses, including reporters from WBIR, WKRN, WVLT, the Nashville Banner, and the AP:
6:41 p.m. Witnesses enter. Curtain closed. Groaning and crying are audible before the microphone is turned on.
7:26 p.m. Curtain opens. Pike, strapped to the gurney, delivers her final statement. She says she is “going to leave this world the way I spent most of my life, and that is in love,” extending that love even to people “hating on her.” She closes with, “I’m at peace. I’m ready to be free. This is a happy day.”
7:34 p.m. “My arm feels like it’s about to burst open,” Pike says. A witness also reports hearing, “One spot is really throbbing.”
7:39 p.m. Pike is still lifting her head, taking deep breaths, and kicking her feet hard enough to knock the sheet off.
7:41 p.m. An employee places a rock in view of the witnesses – the protocol’s signal that the inmate appears comatose. However, Pike’s jaw is still moving. Minutes later, she opens her mouth in “a very large yawn.”
7:46 p.m. Curtain drops.
7:49 p.m. Curtain rises. Pike is loudly snoring. A spiritual adviser is brought back into the chamber.
7:54 p.m. Pike grunts, lifts her head, and opens her mouth.
7:56 p.m. Her body jolts off the gurney into a “V” shape, head and legs lifting simultaneously.
8:01 p.m. The rock is placed a second time. Pike is still breathing, snoring, and flexing her neck.
8:05 p.m. Curtain is closed for good.
Until 8:53 p.m. Rhythmic snoring continues behind the curtain, punctuated by the sound of doors opening and closing. The microphone is cut, and witnesses are escorted out. As far as they know, Pike is still alive.
WKRN’s Tori Gessner, a veteran of multiple Tennessee executions, told the Lookout: “Nothing about today was normal, typical at all, and the court delay was just the tip of the iceberg.” Nashville Banner’s Steven Hale added: “I cannot emphasize enough how much of whatever just happened, happened behind a closed curtain… When Christa Pike was still alive, we could still hear her breathing, but we could not see what was going on.”
Shortly after 9 p.m., ambulances and fire trucks were seen departing Riverbend with their emergency lights activated.
The state’s line, and the lawyers’ line
More than two hours after the botched execution, Tennessee Department of Correction spokeswoman Dorinda Carter issued the following statement:
“The Tennessee Department of Correction followed every step of the State’s lawful, established execution protocol approved by the Attorney General’s Office. The lethal injection chemical in the protocol has consistently been effective, and the protocol does not allow for additional procedures beyond what was carried out this evening. Christa Pike has been transported to an off-site medical facility.”
So if two rounds fail to kill the inmate, protocol dictates the execution ends and the inmate goes to a hospital.
“Tonight the State of Tennessee once again failed to carry out a lawful execution. We take no pleasure in being right, but the concerns raised by Ms. Pike proved to be true: difficult vein access, blown veins, degraded pentobarbital, no emergency medical care available when things inevitably go wrong, all under a protocol that remains veiled in secrecy.”
In an emergency motion filed while Pike was still in the chamber, her defense informed the U.S. District Court for the Eastern District of Tennessee that she “has not lost consciousness and still has a heartbeat and is audibly snoring.” Attorney Kelly Gleason stated Pike desperately needed immediate medical care, noting that counsel couldn’t get state officials on the phone to halt the process. Judge Clifton L. Corker ultimately ruled the motion moot because the state had already informed the court that medical care was underway. Pike’s current condition remains unreleased, though one of her lawyers told the BBC she was “being provided life-saving measures.”
Dr. Joel Zivot, a medical expert retained by the defense, told the BBC it is “very possible that as a consequence of the delay of the beginning of resuscitation she will have a brain injury.” He suggested Pike likely never absorbed a sufficient blood level of pentobarbital to stop her breathing and circulation. Notably, no independent toxicology report has been produced.
Lee hits pause
At approximately 11:16 p.m., Governor Lee halted another execution scheduled for later this year. Via the Tennessean:
“Carrying out a lawfully imposed sentence is among the State’s most serious responsibilities, and the people of Tennessee expect it to be done in a manner that is not only legal and constitutional, but is effective. … Therefore, the remaining scheduled execution will not be carried out this year.”
Lee ordered a “comprehensive, third-party review” of the Pike debacle – while Gary Wayne Sutton, who was scheduled to die on Dec. 3 for the 1992 murders of Tommy Griffin and Connie Branam in Blount County – was spared for now.
Lee had explicitly declined to halt Pike’s execution. His attorney general’s office spent the afternoon racing to the Supreme Court to ensure it happened Wednesday night rather than next week. The protocol the AG approved is the very same one Carter proudly claimed was followed to the letter. Whether it was “effective” is a separate question, and on Wednesday night, the undeniable answer was no.
A Lone Voice Of Sanity On NATO’s Eastern Flank Emerges
There are a few sane voices left in the EU and NATO when it comes to urging an immediate de-escalation of rhetoric regarding Russia. Still, it’s a refreshing surprise when dovish sentiment comes from a country forming part of NATO’s eastern flank in particular.
“We always need to think about the worst-case scenario,” Bulgarian Prime Minister Rumen Radev has told a European defense summit while warning that seeking to impose total defeat on Russia poses real risks of nuclear war.
Radev instead urged robust diplomacy to avert such a catastrophe. “The problem is that no one is raising the question about nuclear risk. Does it exist? Maybe not, I don’t know, but this is a risk,” he stated in remarks published Wednesday.
“I don’t think the war in Ukraine will end in a nuclear war but we have to be prepared for the risk.”
“We always need to think about the worst-case scenario. Are we prepared for this? Does anybody speak about risk assessment? Does it exist at all? Because we have been trying to achieve a conventional victory over the biggest nuclear power.”
He acknowledged that “there is a nuclear card” which Russia would be more likely to play if it perceived itself cornered.
“We need to have this into account. We cannot close our eyes (to the fact) that there are nuclear weapons on our continent, there are nuclear weapons in the arsenal of Russia.”
The Bulgarian prime minister emphasized, “And this is part of the game calculation.” What has he gotten for his sensible calls for walking back tensions with Moscow? Western mainstream media has consistently labeled him “Kremlin-friendly”.
Radev still made clear in this week’s comments that he rejected “this type of speaking” [nuclear rhetoric] from the Kremlin, referring to the recent example of Russian Foreign Minister Sergey Lavrov, who warned earlier this month that a war between Russia and Europe would be “completely different” and “very short”.
The words were widely seen as a veiled threat of deploying strategic forces against Europe.
Early this week NATO leadership called out what it slammed as ‘desperate’ rhetoric on the part of the Kremlin, also at a moment of growing accusations from European officials that Moscow is engaged in sabotage against EU interests and assets.
“Russia’s use of hybrid tactics is a sign of desperation. But we will not be dissuaded from our support to Ukraine,” NATO spokesperson Allison Hart said Tuesday, adding that “we [NATO] have what it takes to defend every inch of allied territory and remain strong, ready, and able to counter any threat.”
“NATO is a defensive alliance and none of our activities or exercises pose a risk to any part of Russia,” she reiterated. “We strongly denounce the threat of force, including any irresponsible nuclear rhetoric.” Hart added: “We call on Russia to end its unprovoked war in Ukraine.”
Finally some serious questioning of the narrative: Where is the proof that the ‘Russians are coming’ – or are on the brink of some kind of invasion of European states?
Now that everyone’s admitting there was never an imminent Russian attack on Europe, the question is: who spread the rumors & what purposes did they serve. Because we keep getting these fake invasion panics, coupled with reminders about how many got Russia’s 2022 invasion wrong. https://t.co/uHAjy4bcM0
As for other tiny handful of EU countries which have been voices of sanity which call for dialogue with Russia, this has included:
Slovakia
Austria
Czech Republic
and Hungary (or at least, while it was previously under Viktor Orban)
Meanwhile, on Wednesday a new alarming headline has emerged connected with the Ukraine war: Russian Foreign Ministry spokesperson says European weapons factories producing arms for Ukraine are legitimate military targets for Russia. Things look to grow a lot hotter before they cool off.
Global investors spend a great deal of time worrying about an alleged artificial intelligence bubble. However, they should pay more attention to the government debt bubble. The most dangerous assumption is that governments can keep borrowing and making promises because central banks will always step in, disguising fiscal irresponsibility with quantitative easing programs. Many market participants hail debt accumulation and expanding government size in the economy because they believe it will create asset inflation forever. However, encouraging malinvestment and complacency is a poor long-term strategy.
Furthermore, buying government bonds does not create the wealth needed to pay for those promises. Many pension funds and Keynesian market participants are discovering that supporting constant government expansion is not profitable. The massive losses in some complacent bond portfolios show the mistake. The Bloomberg Global Aggregate Index remains significantly underwater from its early 2021 peak, sitting at an overall net decline of approximately 16% as of September 25, 2026. Smart bond investors have steered away from duration and government debt, concentrating their strategies on credit, low duration, and private debt.
Public debt is like a massive iceberg. The bonds that have already been issued are the visible part of the iceberg. However, the 94% global public debt to GDP only tells a small part of the story. Below the surface are unfinanced commitments to pensions, healthcare, and other spending that have no adequate funding and add up to 300% of GDP. Looking only at outstanding debt provides us an incomplete picture of what taxpayers may eventually have to finance. Even worse, it gives a wrong view of government solvency.
The IMF projects global public debt will reach 100% of GDP by 2029, with the increase driven by major economies. Thus, this problem extends well beyond the emerging markets usually associated with debt crises.
The United States provides a clear example. Treasury’s fiscal 2025 financial report puts federal debt held by the public at 99% of GDP and separately reports approximately $88.4 trillion in projected social insurance funding shortfalls, measured in present-value terms over 75 years.
That figure measures the gap between projected benefit payments and dedicated revenues, discounted into today’s dollars, and depends on assumptions about future conditions. Nonetheless, these are spending promises that require financing or changes to the rules.
The pressure will become harder to manage if governments continue postponing spending cuts and structural reforms. Rising demands for social spending and defense added to increasing interest burdens make the situation worse. Every government may consider all its spending plans essential, but calling them essential does not make them affordable.
The political incentives are evident. Politicians can announce benefits today and leave future taxpayers to cover the cost. As populism takes over, promises become larger and solvency weakens.
Cutting spending attracts opposition immediately, whereas borrowing seems to be hailed and postpones the argument. However, refusing to choose between competing priorities does not remove the cost. The bill is passed to someone else and under worse conditions.
Central banks can make borrowing easier and help governments disguise the problem for a while. Lower interest costs can provide some relief. However, governments use that relief to increase spending instead of repairing their finances. Thus, the underlying problem keeps growing.
Quantitative easing may calm markets and reduce risk premiums for a while. However, central banks do not print solvency, and bond purchases do not make permanent overspending sustainable.
Furthermore, QE does not make the public sector’s obligations disappear. When a central bank buys long-term government bonds using interest-bearing bank reserves, it effectively replaces longer-term borrowing with liabilities whose cost moves with overnight interest rates, according to the Bank For International Settlements. Viewed together, the government and central bank become more exposed to increases in short-term rates, not less. Once we understand this situation, we also see why inflation is rising. Central banks and governments are eroding the purchasing power of the currency by issuing too much money-debt compared to the private sector demand. Additionally, higher taxes constantly weaken the private sector. All this combined leads to stagnation and persistent inflation.
Consider a simple example. A government saves one percentage point of GDP in interest costs but increases its deficit before interest payments by the same percentage point. Additional overspending has more than absorbed the cheaper financing. Thus, a monetary intervention in the bond market coexists with a worsening fiscal position.
Governments have grown accustomed to the idea that they can spend more during growth periods and even more during recessions. As such, the placebo effect of central bank intervention lasts less every time.
There is also a problem with incentives. If politicians expect the central bank to intervene whenever borrowing becomes uncomfortable, they will never make difficult spending decisions. Each bailout can buy time, but time is useful only if governments use it to change course. Governments use easing periods to announce even more spending and pretend that their policies work.
Financial repression is also shifting the burden while impoverishing citizens. Governments can steer savings towards public debt, but they keep returns below inflation, reducing the real value of what they owe.
The sad truth is that no government is going to provide savers a real economic return when investing in their debt. It is a real and many times nominal loss.
Savers and taxpayers pay through lost purchasing power. As governments then use the savings to finance more deficits, citizens suffer without gaining healthier public finances. Taking purchasing power from savers does not make debt affordable; it makes everyone poorer.
Ignoring the problem and delaying spending cuts also makes the adjustment harder. Treasury estimates that delaying fiscal reform until 2036 would increase the average adjustment needed from 4.7% to 5.6% of GDP. Waiting for the next central-bank intervention is therefore a comfortable but costly political choice.
The solution comes from cutting spending and reforming committed programs before a crisis forces abrupt changes. Stronger productivity, private investment, and competition must also be part of the answer. Governments cannot keep weakening the productive economy with ever-increasing taxes while expecting it to finance ever-larger promises.
Central banks cannot fix the sovereign debt bubble. The short-term placebo effect fades away faster every time, regardless of the size of the purchase plan. QE and financial repression did not buy time, because governments did nothing and left the underlying problem unresolved. Citizens are paying for the same irresponsibility through inflation, weaker growth, lower real net wages, and higher taxes. The absence of a bond-market crisis today does not mean the problem has disappeared; it is just eroding the productive economy through crowding out and financial repression.
The next time you hear a politician promising free stuff, remember that you will pay for it many times over.
A mysterious breakup of a decades-old American spy satellite has sent debris hurtling through low-Earth orbit, with the U.S. Space Force now tracking the fragments for potential threats to other spacecraft, according to Space-Track.
The satellite, known as USA 32, came apart on September 13 at approximately 5:13 p.m. ET, according to U.S. Space Forces-Space. Officials have not publicly determined what caused the nearly 40-year-old spacecraft to suddenly fragment.
“All tracked debris are being incorporated into routine conjunction assessment screenings to support spaceflight safety,” U.S. Space Forces-Space said in a notice. “No immediate threats have been identified; further analysis is ongoing.”
USA 32 had been circling Earth since the final years of the Cold War.
The National Reconnaissance Office satellite blasted into space aboard a Titan II rocket on September 5, 1988. Public records identify the spacecraft as an electronic and signals intelligence satellite designed to collect information from orbit.
USA 32 has also been identified as FARRAH III, part of a secretive family of American intelligence satellites whose name was inspired by actress Farrah Fawcett.
The satellite was traveling in an orbit roughly 480 miles above Earth when it broke apart. Officials have yet to disclose how many fragments were produced.
That uncertainty matters because debris traveling at orbital speeds can pose a hazard to functioning satellites even when the individual pieces are relatively small. Space Force tracking systems routinely monitor objects around Earth and screen their trajectories for possible collisions.
Exactly what happened to USA 32 remains a mystery.
A collision with an untracked object is one possible explanation for an unexpected satellite breakup. Aging spacecraft can also fragment because of failures involving batteries, pressurized tanks or other components. There is currently no public evidence establishing any of those scenarios as the cause of USA 32’s demise.
16 U.S. Trucking Companies File For Bankruptcy In Less Than A Month As Diesel Prices Soar
Diesel prices have exploded over the past month, creating another major cost shock for an industry that was already operating on thin margins. The national average climbed from roughly $5.60 per gallon at the end of August to a record $6.53 in late September, an increase of about 17% in just a few weeks. Prices have eased slightly from that peak, but the EIA’s latest weekly reading still puts diesel at $6.38 per gallon, compared with $5.60 at the end of August.
Now the financial damage is beginning to show up. Sixteen American trucking companies have entered bankruptcy proceedings in less than a month, affecting more than 250 jobs, according to FreightWaves and the Independent. Eight filed for Chapter 11 bankruptcy, allowing them to continue operating while restructuring their debts, while seven entered Chapter 7 and are liquidating their assets and shutting down.
Among the larger companies seeking Chapter 11 protection are Xoco Transport and Globemaster. Neither specified the cause of its financial problems in federal court filings, and diesel is hardly the industry’s only problem. Carriers have also been grappling with rising labor, insurance, maintenance and regulatory costs, while seasonal slowdowns can leave them without enough revenue to absorb those increases.
But the sudden surge in fuel costs adds another layer of pressure because trucking companies have limited options when diesel jumps this quickly. They can absorb the expense and sacrifice margins, pass it through with higher freight rates and risk losing business, or cut workers and equipment. The latter can keep a company alive temporarily, but it also reduces shipping capacity and the amount of revenue the carrier can generate.
And for now, there is little reason to consider the diesel problem resolved. Prices remain near historic highs and are still heavily tied to the war with Iran and the resulting disruption to global energy supplies.
Even as crude shipments through the Strait of Hormuz have begun recovering, refined-product flows remain constrained, inventories have been depleted and damaged Middle Eastern refining infrastructure continues to limit supply. Until those disruptions ease materially, diesel remains another major transmission mechanism through which the Iran war is feeding directly into the U.S. economy.
The Israel military’s Chief of Staff Eyal Zamir has canceled a planned trip to the US due to a “sensitive security situation,” Israeli news outlet i24 reported on 30 September.
There is “increased alertness” in the army, said i24 military analyst Yossi Yehoshua. “The decision to cancel the trip was made by the military’s top echelon even before Prime Minister Benjamin Netanyahu’s statements yesterday regarding threats to Israel,” the report added.
Image source: IDF
A senior Israeli army source told i24, “You can’t put the military on alert and fly abroad.“
Zamir was scheduled to hold multiple meetings with the commander of US Central Command (CENTCOM).
“The talks were intended to deal with joint security coordination and preparations for developments in the region. Nevertheless, the state of high alert declared in the operational units of the [military], alongside the need for close management of readiness on the ground, determined that at this time the chief of staff must remain in Israel,” the outlet wrote.
A FlyDubai jet headed from Dubai to Tel Aviv landed in Saudi Arabia on Wednesday after the Emirati pilot was attacked by his Omani copilot – reportedly in an effort to crash the plane.
Opposition figures in Israel accuse Netanyahu of exaggerating a routine security warning weeks before the election to shift attention toward national security.
Security officials reportedly questioned the public warning and said there was no concrete intelligence linking an… pic.twitter.com/w2Bpn6r9nu
Hebrew media reports say Tel Aviv is suspecting it was an “attempted terror attack.”
One day before the incident took place, Israeli Prime Minister Benjamin Netanyahu held a security establishment assessment and talks with opposition leader Yair Lapid over an alleged, pre-Israeli election “security threat” that the premier had announced earlier on Tuesday.
“There are signs our enemies will try to attack us ahead of election,“ Netanyahu had announced on Tuesday.
“Don’t mess with us, not now and not ever. Our long arm will reach you anywhere and at any time,” he added.
Netanyahu’s threats coincide with a US military buildup of around 50,000 troops deployed across West Asia.
🇮🇱 Israeli PM Netanyahu secretly met UAE President Mohamed bin Zayed on Sunday and asked him to deny that he warned Netanyahu of a major Hamas attack days before October 7, a source with firsthand knowledge told Haaretz.
Taiwan Plans $930 Million Sea Drone Buildout As China Expands Maritime Pressure
Taiwan is moving quickly to build a large fleet of unmanned vessels as it looks for cheaper, scalable ways to complicate any Chinese attempt to blockade or cross the Taiwan Strait, according to Nikkei Asia.
The emerging strategy combines something Taiwan already does well, building ships and sophisticated electronics, with American expertise in autonomous systems, artificial intelligence and military command networks.
The potential scale is significant. Taiwan’s navy is considering roughly 1,320 small attack drones for the water, with spending estimated at about NT$29.6 billion, or $930 million. The Coast Guard is pursuing unmanned vessels as well, creating what could become a meaningful new domestic market for maritime defense technology.
Taiwan does not need to build the industry from scratch. It already has shipyards capable of designing and producing the physical platforms, along with a deep electronics manufacturing ecosystem. What it needs are many of the technologies that turn an unmanned boat into an effective military system: secure communications, autonomous navigation, sensors, AI, command-and-control software and the ability to coordinate large numbers of vessels simultaneously.
That is where U.S. defense technology companies are increasingly entering the picture. CSBC, Taiwan’s government-backed shipbuilder, recently partnered with Rhode Island-based Havoc to develop autonomous surface vessels using Taiwanese manufacturing and American autonomy technology. Saronic, Anduril, MARTAC, VATN Systems, Albacore, Shield AI and Auterion have also established relationships with Taiwanese organizations, including the government-owned National Chung-Shan Institute of Science and Technology.
Havoc CEO Paul Lwin described the model simply: “American autonomy software, Taiwan-built platforms, Taiwan workforce.”
Nikkei Asia writes that domestic companies are positioning themselves for the spending wave. CSBC has developed its Endeavor Manta unmanned boat and says it has capacity to manufacture about 40 annually. Established shipbuilders Jong Shyn and Lungteh are competing for contracts, while companies better known for drones and semiconductors, including Thunder Tiger and Myson Century, are moving into unmanned maritime systems.
The attraction is partly economic. Instead of attempting to match China ship for ship, Taiwan could deploy large numbers of smaller and cheaper autonomous platforms capable of surveillance, targeting, protecting undersea infrastructure and, in some cases, carrying weapons. The war in Ukraine has provided a real-world demonstration of how unmanned systems can impose substantial costs on a conventionally superior military.
But producing thousands of drone boats is only part of the equation. They must continue communicating, navigating and coordinating in a contested environment where satellites, communications infrastructure and command centers could themselves become targets.
“The key gaps are resilient communications, AI-enabled autonomy and C2, and multi-vessel coordination,” said Cathy Fang of Taiwan’s Research Institute for Democracy, Society and Emerging Technology.
That technological gap helps explain why the growing U.S.-Taiwan partnerships matter. Taiwan can supply the shipyards, electronics manufacturing and eventually the production scale, while American defense technology firms provide much of the software and autonomy layer.
If the navy ultimately proceeds with its proposed 1,320-vessel program, the result could be more than another Taiwanese weapons purchase. It could provide the anchor customer needed to establish an entirely new domestic defense industry built around producing autonomous vessels in large numbers, with Taiwan manufacturing the hardware and U.S. companies supplying much of the technological nervous system.
On August 11 I wrote US Disabilities Hit an All-Time High of 37 Million In July: UP 23% Since Feb 2021. The BLS Current Population Survey printed 37,029,000 Americans 16 and over reporting a disability. That is seven million more people since February 2021, a 3-to-4 sigma break from the pre-2020 plateau that has not mean-reverted.
The inflection is February 2021 with the Covid vaccine rollout not in 2020 when Covid was at its most virulent strain. Alternative explanations fail the timing and the magnitude test. The UK PIP system corroborates that US survey signal with something the American series cannot give you: medically assessed new claims broken down by body system and underlying cause.
If you want to know whether that US survey signal is real, stop arguing about survey design and look at an administrative system that actually diagnoses people.
Go back to the UK Disabilities (PIP) Project we published at Phinance Technologies. The page is still up…use it. It was built so researchers, doctors, and ordinary citizens could see the same thing we saw in 2023. You can look at total body system new claims or by underlying cause new claims (best viewed on desktop) within a body system. You can pick absolute new claims, excess new claims, percent excess new claims and excess new claims z score. We also break it out by monthly and yearly data. Finally you can sort it by age group as well. Play with data and be horrified like we were in 2023. Interactive charts…all done by Phinance Technologies for free.
PIP is not the protagonist from Charles Dickens’s novel Great Expectations. It is the UK’s main working-age disability benefit officially known as the Personal Independence Pension program by the UK Department of Work. Claims are medically assessed. Decisions, “clearances,” as noted above are coded by body system and then by underlying cause. The positive award rate has been stable at around 40 percent, so you are not looking at a sudden collapse in standards. You are looking at more people presenting with more illness…new claims, not just the stock of existing claimants, sorted monthly or yearly and by age band versus a 2016-2019 trend.
That is the advantage over the US survey. The BLS series tells you that disability exploded after early 2021 with the vaccine rollout and not in 2020 with the virus. PIP tells you where in the body it exploded, and it lets you watch the timing against the vaccine rollout curve on the same chart.
Two Body Systems Make the Point
Hematological (blood) disorders went off the rails. New excess clearances rose about 217 percent in 2021 and then 522 percent in 2022 while 2023 declined but still at an absurd 374 percent above trend. Over 300 percent above trend two years running. When looking at new claims on a monthly basis Hematology jumped early and hard almost coincident with the first doses. That is a regime change in medically assessed claims. I have posted those charts more than once on X in 2023. Something broke and the administrative system recorded it at a scale that alone should have produced a public-health investigation…it did not.
Musculoskeletal claims tell a different, equally inconvenient story. Monthly clearances sat near a “normal” 10,000 through 2020 and early 2021. Then, around September 2021, they jumped and stayed elevated above 18,000 a month. The rise did not arrive with the first lockdowns or the first COVID wave. It arrived after the mass rollout and into the booster period. Inflammation, joint and soft-tissue disease, the conditions that take people out of work and onto daily-living and mobility awards. The timing is not subtle.
Those two systems are not the whole file. Cardiovascular and neurological claims rose. Breast-cancer clearances showed large excesses in 2022 and 2023 with high z-scores. Different latencies, same calendar: the break is 2021, not 2020. That is why the UK file is useful. It is not one blob called “disability.” It is a set of body systems with different clocks, all accelerating after the intervention that was supposed to end the emergency.
People will say PIP is being gamed by fraud. Look at the body-system split before you buy that. A fraud wave does not preferentially light up hematology in early 2021 and musculoskeletal in late 2021 while neurological claims print 20 plus-sigma years. An awareness campaign does not move breast-cancer clearances. Two independent disability systems, two countries, both detecting the same inflection period in 2021.
The fiscal piece is already visible in Britain. Claimant counts have roughly doubled since 2019. Psychiatric disorders are now the largest single category. Spending is on a path that forces politicians to talk about “sustainability” and tighter points tests instead of asking why so many working-age bodies failed in the same window. The US version of that conversation is coming. A permanently larger disabled share of the 16-plus US population is lower labor force participation, higher absence, higher insurance cost, and more pressure on SSDI and Medicaid. You can ignore a chart. You cannot ignore the payroll.
Bottom Line
I am not a clinician. We said that on the site in 2023 and asked doctors to explain the findings…mostly crickets. The charts are still there. Pick a body system. Pick an age band. Look at the cumulative dose curve. Watch across the many body systems how in 2020 they stay close to trend and then in 2021 they leave the trend. That is the instruction. The US disability series tells you that the population got sicker after February 2021 in the US. The UK PIP file tells you which systems broke and when.
Together they are the corroborating signal no one in official public health circles wants you to see.
The great cover up continues into 2026 and the damage is slowly compounding.
Brazil Election Polls Too Close To Call, But Polymarket Gives Bolsonaro Clear Lead
Brazil’s presidential race is entering the final stretch ahead of Sunday’s first-round vote.
HSBC strategists led by Nicole Inui wrote in a note that the latest polls show socialist President Luiz Inácio Lula da Silva slightly ahead of right-wing Senator Flávio Bolsonaro, though the race remains neck and neck.
Both candidates remain statistically tied. If no candidate wins more than 50% of valid votes, the two will face a runoff on October 25.
Lula (Left); Bolsonaro (Right)
“Brazil’s presidential elections are entering their final stretch with first round elections to be held Sunday, 4 Oct. If no candidate wins more than half of the valid vote, a run-off will be held on 25 Oct,” Inui wrote in the note.
Inui continued, “If no candidate wins more than half of the valid vote , a run-off will be held on 25 Oct. First-round election results could be a major market-moving event, we think. The key variable is the margin between the leading candidates. Latest polls point to a tight margin of 5ppts between current president Lula da Silva (PT) vs. Senator Flávio Bolsonaro.
“A narrower lead for President Lula or stronger performance by third-party candidates could add to policy change expectations, which could support risk-on sentiment. However, history suggests some caution: since 1989, every first-round winner has secured the presidency in the run-off of elections,” the analyst said.
However, Polymarket bettors see a clearer favorite, giving Bolsonaro a 60% chance of winning, compared with 39% for Lula.
Here’s more from HSBC analysts on market impacts:
What to look out for:
Brazil heads to the polls on 4 October, with a second round scheduled for 25 October if no candidate wins more than 50% of valid votes. Recent polling is pointing towards a highly competitive presidential race, with neither candidate expected to garner enough votes to win in the first round. Since 1989, all but one went to a second round. Leading candidates received between c42-c53% in the first-round vote and all went on to eventually win. In other words, first round winners prevailed and they won the first round by c42%-49%. In the last election cycle, the margin of victory was the tightest in recent history at 1.8ppts (50.9% for Lula vs 49.1% for Bolsonaro), with Lula’s vote share only increasing by 2.5ppts between rounds, compared with c9-15ppts for winners in previous five runoffs. This is a useful benchmark for a highly polarized election, we think, especially considering there are no relevant left-wing candidates besides Lula in the first round.
Initial upside, not necessarily sustained
In the first trading session following the 2022 first round election, the IBOV surged 5.5%, while real strengthened against the dollar. In the 2022 elections, privatization hopes drove the largest immediate gains in SOEs at the time (Copasa, Sabesp, Cemig), and interest rate futures immediately fell, with consumer discretionary accounting for 50% of the top 10 performers. The move likely was attributed to Bolsonaro’s stronger-than-expected (vs polls) first round results and the composition of the incoming Congress, which together reduced the policy risk premium investors had considered before the vote. However, the Ibovespa came down from its highs leading up to the second round, declining 1.4% from the close after the first round, but still 4.1% above pre-first-round level. The BRL and iShares MSCI Brazil ETF (EWZ Index) followed a similar pattern, but the EWZ saw greater appreciation from 1 September 2022 than the Ibovespa around the run-off. Leading up to the run-off, reduced perceived risks of government intervention continued to support utilities and energy, which retained gains, while consumer discretionary’s initial rally faded as interest rate futures rose again.
A similar story could occur for 2026. An outsized reaction could occur immediately after 4 October if investors mark down the perceived fiscal/policy-risk premium based on a tight first round outcome, like what occurred in 2022, but would not necessarily extend into a three week straight rally. Subsequent price action would depend on polling, endorsements, campaign economic proposals, the congressional result, and the long end of the Brazilian rates curve. We believe a first round result associated with lower long-term fiscal risk would likely produce a broader domestic risk-on trade, with SOEs, domestic cyclicals, and bond proxies potentially experiencing the most upside. If first round results are tighter than in the prior elections, equity markets could react positively on expectations of fiscal consolidation ahead.
And post-election results? We see asymmetric returns for equity markets
We expect an initial knee-jerk reaction following the run-off as markets reassess the likelihood of fiscal consolidation under the incoming administration. A result that increases confidence in a more credible fiscal path could drive a relatively rapid rerating through lower-end yields, tighter risk premia, and stronger performance in domestic cyclicals and bond proxies where valuations are sensitive to fiscal and rate outlooks. Conversely, a result that reduces expectations for fiscal consolidation could trigger an initial derating, but we see some valuation support limiting the downside in parts of the market. Many election sensitive names including Petrobras are already trading close to historical trough valuations on an EV/EBITDA basis, leaving less room for further multiple compression Petrobras, 16 Aug. And Banco do Brasil is trading at a P/B of 0.7x and a 69% discount to Itau, close to a historic high, Brazilian Financials, 14 Sept.
Given the close race, we would emphasize segments that can participate in a relief rally without requiring an aggressive risk stance. Lower-beta yield names and selected bond proxies appear better placed to capture upside from lower long-end rates while offering more resilience if the market reaction is short lived. Politically exposed names and higher beta domestic cyclicals could outperform in a market-friendly scenario, but they would also be more sensitive to any reversal in fiscal expectations.
Polls suggest the race remains too close to call, while Polymarket odds point to Bolsonaro as the favorite.
