60.4 F
Chicago
Sunday, November 1, 2026
type here...
Home Blog Page 76

Interventionism Created Spain’s Housing Crisis And Is A Warning To America

survivalnomics
-
0
Interventionism Created Spain’s Housing Crisis And Is A Warning To America
Interventionism Created Spain’s Housing Crisis And Is A Warning To America

Authored by Daniel Lacalle via dlacalle.com,

Socialist Americans are promising affordable housing through rent controls and government intervention. The evidence shows that these policies deliver the opposite.

Spain’s housing crisis is presented by socialists as proof that they must impose tougher rent controls, higher taxes on owners, tighter restrictions on investors, and broader intervention in the rental market. The evidence shows the opposite. Spain’s excessive intervention, regulation, and taxation have created a destructive combination of exploding demand, chronically insufficient construction, hostility toward private rental supply, and growing legal uncertainty for owners.

Spain’s socialist housing intervention has delivered the exact opposite of what it promised. Rents are up by more than 50% since Pedro Sanchez entered the government and started imposing interventionist policies; around 300,000 homes have vanished from the long-term rental market, and the government’s pledge to provide 270,000 public homes became a mirage. This is an indictment of a policy that punishes owners, hurts investment, elevates legal uncertainty, and then acts surprised when scarcity becomes permanent.

The result is not affordable housing. It is fewer homes available to rent, higher prices for the homes that remain, and a widening gap between housing demand and supply.

America should take these issues seriously. If the United States responds to its housing shortage by accelerating migrant demand while discouraging construction, investment, and property rights, it risks reproducing Spain’s failure on a much larger scale.

The Spanish housing crisis is entirely supply-driven. Between 2021 and 2025, Spain added approximately 1.2 million households but completed only 474,000 homes, including subsidized housing. That implies a cumulative deficit of at least 734,000 in just four years.

However, the problem has worsened. According to CaixaBank Research, Spain granted permits for 162,200 homes in 2025 with a net household formation of 226,000. The country continued to fall behind by more than 64,000 homes in one year, and completions are expected to remain below 100,000 units in 2026, according to the same report.

The Bank of Spain has estimated that the accumulated national shortage is around 750,000 homes. More concerning, the shortfall could rise above one million homes by 2028 if current policies remain in place. This is not merely a national average problem.

More than half of the gap between homes built and new households is concentrated in six provinces, Madrid, Barcelona, Alicante, Valencia, Murcia, and Málaga, with the largest cities showing the largest gap.

Housing demand does not disappear because governments publish a decree or law with an allegedly social title.

Land-use restrictions, slow approvals, high construction costs, and regulatory limits have made it harder to build. The Bank of Spain has identified land shortages, delays in urban-development projects, and planning-management constraints among the factors limiting construction. No amount of rhetoric against landlords changes that arithmetic.

Instead of concentrating on expanding supply, the socialist government’s housing policy has increasingly focused on attacking owners and investors. The 2023 Housing Law created the framework for declaring “stressed” rental zones and imposing restrictions on rents in designated areas. These zones may be declared when housing costs exceed 30% of average household income or when housing prices have risen at least three percentage points more than inflation over the previous five years. Supply of long-term rentals fell between 40% and 50% due to these laws, according to Idealista.

The political trick is evident. When rent is unaffordable, the government promises to limit it. But the price of a rental home is not an arbitrary number created by owner greed. It reflects the shortage of available homes, taxes, financing costs, maintenance, renovation, insurance, expected vacancy, legal risks, and the value of the capital invested in the property.

A cap only limits the advertised price of some existing homes in the short term, but it does not create a single additional apartment. It reduces the incentive to place homes on the long-term rental market, invest in maintenance, or finance new rental developments.

That is the rent-control paradox. It does not control rent. It makes housing scarcer and more expensive for the majority. One tenant may benefit if he or she is already living in a regulated property. However, the availability of homes in the regulated market disappears, and all other prospective tenants, including young workers, students, and new families, face soaring prices and a smaller pool of available homes.

The available evidence from Spain already shows this supply response. The long-term rental market has shrunk sharply. Estimates from the Observatorio del Alquiler indicate that the supply of long-term rental properties fell from about 813,850 homes in 2023 to 660,993 by the second quarter of 2026. That is a decline of 18.8%, or approximately 153,000 homes.

Other studies point to an even larger deterioration, with more than 300,000 homes disappearing from the conventional long-term rental market. Socialist laws have demolished rental supply just when demand is rising.

Owners faced with tighter rent controls, escalating regulatory requirements, risk of delayed eviction, and uncertainty over future rules have a rational incentive to sell, leave units vacant, lease seasonally, or seek more flexible forms of tenancy. The more governments restrict long-term renting, the more they make alternatives comparatively attractive.

Spain’s long-term rental listings reportedly fell by around 20% over three years, while seasonal-rental listings more than doubled. Just after the socialist Housing Law was approved, listings fell by 15% between the first quarters of 2023 and 2024. This is what happens when you penalize housing supply.

The left tries to make the housing crisis a conflict between tenants and financial investors. The reality is entirely different.

In Spain, about 92% of market-rate primary rental homes belong to individual owners rather than large institutional funds or wealthy owners of multiple properties. Most are retirees supplementing their pension and households that saved for years to buy an investment property.

When governments impose caps, extend mandatory contracts, shift costs to owners, delay the enforcement of contracts, or make evictions legally and politically difficult, they do not target “speculators.” They raise the risk of renting for ordinary people.

The consequences are especially negative for those that the socialists pretend to defend. Those with the weakest bargaining position. A well-paid tenant with a stable employment record may still obtain one of the few available properties. A young person, immigrant, self-employed worker, single parent, student, or low-income household will find it almost impossible to rent.

Rent controls are not pro-tenant. They are anti-tenant. The people who most need mobility and access to housing are left competing for a vanishing supply.

Socialist policies have also demolished legal certainty. Housing supply requires long-term capital. A developer may need years to acquire land, secure permits, finance a project, construct homes, and sell or rent them. A private owner who leases a property is also making a long-term economic decision based on the expectation that contracts will be enforceable and that property can be recovered if legal obligations are not met.

When the state weakens legal security, it raises the cost of housing.

Spain’s socialist policy direction has increasingly included extended intervention in rental contracts, rent-increase limitations, stronger barriers to eviction, and additional restrictions on property transactions and institutional purchasers. These measures may be politically popular because they appear to protect tenants in the short term. However, they impose a cost on owners and investors that worsens the situation.

If a household needs protection from eviction or emergency accommodation, the state should fund that protection from the public budget. What it should not do is treat an individual property owner as an unpaid social services department.

The same principle applies to squatters and “ocupación,” the unlawful occupation of property. Any society can and should establish proportionate safeguards for vulnerable people, but it cannot normalize the idea that a private owner may face eternal uncertainty, costs, and delayed judicial remedies when someone occupies a property without permission. The more uncertain and expensive recovery becomes, the higher the risk premium embedded in rental decisions. Some owners will demand higher rents. Others will simply decline to rent.

America’s housing problem differs from Spain’s in scale and institutional structure, but the economic mechanism is the same. In many U.S. metropolitan areas, demand has outpaced supply for years because restrictive zoning, lengthy permitting, inadequate infrastructure, limited buildable land, construction costs, and local opposition have prevented enough homes from being built.

The wrong lesson from rising rents is that private property, investment, and market pricing are the problem. They are signals of a supply shortage created by intervention and regulation.

If the United States follows the socialist Spanish path, increasing population by incentivizing migration without adequate construction, rent caps instead of new homes, hostility toward investors, higher taxes on owners, and weakening legal certainty, it will not make housing more accessible. It will create a smaller and more expensive rental market.

The solution is not to defend unaffordable housing. It is to build enough housing so that affordability does not depend on rationing. That means faster approvals, predictable regulation, more developable land where demand is strongest, lower barriers to construction, better infrastructure, and targeted public support for genuinely vulnerable households.

Spain’s experience shows that socialism always hurts those it pretends to defend. Socialism does not create affordable housing; it worsens it. The result is not more housing justice. It is less housing and more scarcity.

Tyler Durden
Wed, 10/07/2026 – 03:30

China In Large Russia-Hosted Drills Featuring ‘Applied Lessons Of Ukraine War’

survivalnomics
-
0
China In Large Russia-Hosted Drills Featuring ‘Applied Lessons Of Ukraine War’
China In Large Russia-Hosted Drills Featuring ‘Applied Lessons Of Ukraine War’

Russia has just wrapped up hosting mass military drills involving troops and defense technology from eight countries which state media hailed as applying lessons learned from the Ukraine war.

The Tsentr-2026, or Centre-2026, drills ran throughout all last week into Saturday, located in the central western Chelyabinsk region, which is situated in the southern Ural Mountains – with on Friday President Putin being on hand to observe the exercise.

Dronies deployed during military drills in Chelyabinsk, Russia. Getty Images

Importantly, China’s military took part, in addition to Belarus, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan and Tajikistan.

The Russian Ministry of Defense said of what were primarily strategic command-and-staff exercises that they “applied” combat lessons from the Ukraine war to “repel external aggression in the Central Asian direction.“

Over 47,000 troops from across the different countries’ militaries took part at the Chebarkul training ground, in drills that further featured rehearsal for long-distance deployment and joint operational planning as well as launching operations against an entrenched enemy.

China Central Television (CCTV) indicated that the PLA troops came from the Central Theater Command, including members of the 82nd Group Army and a combined-arms brigade.

Chinese regional sources further noted the PLA rolled out unmanned systems and practiced launching drone swarms:

The PLA Daily said the drills’ operational planning and live-fire manoeuvres helped to “consolidate multilateral traditional friendship and improve joint action capabilities”, while allowing the Chinese military to test its logistical reach, troop deployment capability, and combined arms coordination in unfamiliar terrain.

According to Chinese state broadcaster CCTV, the PLA deployed a combination of Type 99A main battle tanks with drones, uncrewed ground vehicles and helicopters, during the exercise, showcasing its growing integration of crewed and unmanned systems.

The PLA deployed drone swarms to provide precise target data to ground combat groups, with tactical unmanned aerial vehicles, armed helicopters and unmanned ground combat vehicles coordinating strikes against targets, the report said.

Another interesting note: “The report also said that all the troops involved in the exercise were stationed underground to avoid drone strikes.“

This has certainly become a reality of life along the front lines in Ukraine, with the battlefield having become transformed and fully automated – or something that looks straight out of Terminator 2 and Skynet – with unmanned aircraft hovering, looking for targets on the surface.

Tyler Durden
Wed, 10/07/2026 – 02:45

Cowardly Europe Fears Dissent

survivalnomics
-
0
Cowardly Europe Fears Dissent
Cowardly Europe Fears Dissent

Authored by J.B. Shurk via American Thinker,

Orwellian brutes now govern Europe…

Former-banker-turned-tiny-French-President Emmanuel Macron blasted what he called “American free speech” while speaking to reporters last week. Defending the European Union’s robust censorship policies, le petit fromage insisted that Europe’s speech-policing Digital Services Act should censor information that governments consider false “much more extensively, much faster, and much more forcefully.“

Macron then did his Orwellian best to condemn free speech as oppression and praise censorship as liberation: “So-called American ‘free speech’ – at least as it exists today and has been promoted by some people – is the opposite of free speech.” The terribly disliked French leader continued, “My freedom cannot mean that I am free to…insult you or vandalize the public square that belongs to everyone. Yet that is some people’s idea of ‘free speech.'”

Then the little mouse of a man roared, “Until we hold those who disseminate content on social media accountable, we will not be able to regulate it.” Furthermore, if “someone writes something” that is “false,” then that person should be “held accountable.” Tough talk from an insecure man afraid of words.

What is going on in Europe? Why is the whole continent so scared of public debate and dissent? If the political Establishment is unable to defend its ideas and policies without censoring the opposition, then its ideas and policies are absolute rubbish! The people who have willed their way to power across Europe apparently believe that they cannot win an argument unless they are the only ones permitted to speak!

That’s a bit like a puny pugilist demanding that referees tie another boxer’s hands behind his back before declaring himself world heavyweight champion!

Personally, I think mini-mouse Macron is just tired of people pointing out that he married his grandmother (or his grandfather, as the case might be). We used to teach our children, “Sticks and stones may break my bones, but words will never hurt me.” Now Western leaders are so terrified of words that they’d rather imprison everyone with an opinion than learn to take a joke or hear a contrary point of view.

Here’s the truth that Macron and his fellow Euro-weenie censors refuse to understand: Free speech is free only when a speaker can say something offensive or controversial without fear of the State’s wrath.

Although Macron wants to criminalize speech that he considers untrue, he spreads endless falsehoods of his own! While beseeching British Prime Minister Andy Burnham to betray the will of voters who chose to leave the European Union ten years ago, the Napoleon-complex-afflicted French president whined, “Brexit is the biggest lie of the last thirty years!” That boast is absurdly false (or what European censors call criminal “misinformation”). The British people did vote to separate themselves from Queen Ursula von der Leyen’s European empire.

Even though Brexit fearmongers predicted imminent economic collapse should the British people choose to rule themselves – and despite the best efforts of Brexit saboteurs at home and abroad – the United Kingdom is currently outperforming France and other major European economies, having led the G7 in growth during the first half of 2026. One reason Brexiters voted to leave the E.U. in 2016 was because British citizens did not want their military to be swallowed into a European Army beyond their control – a prospect, ironically enough, which pro-E.U. stalwarts once called “disinformation” but which has proved increasingly prescient.

Queen von der Leyen and her Brussels Eurocrats are working feverishly today to use the Russia-Ukraine War as an excuse to create increasingly centralized European defense structures.

It’s also worth remembering that European expansionists originally promoted the Union as an intergovernmental body meant to boost European economic markets and promised that the supranational institution would never directly usurp national sovereignties. That was a clear case of “misinformation” and certainly one of the biggest lies of the last half-century!

Speaking of lies that European leaders have promoted as “truths,” the Russia Collusion Hoax against President Trump (which British and Ukrainian intelligence agencies helped to propagate), the “global warming” apocalypse (which was scheduled to kill us all fourteen years ago), and the “Reign of COVID Error” (during which “health experts” lied about the virus arising from nature instead of a Chinese laboratory and then lied about fake “vaccines” being “safe and effective”) are three of the biggest mass frauds and information warfare campaigns ever perpetrated by governments against the public.

Macron has never called for these lies to be censored from social media platforms. He just doesn’t like it when random Americans point out that the European Union is an undemocratic and totalitarian system of governance that should be burned to the ground. And he really doesn’t like it when commoners correctly point out that his old high school teacher – and abusive wife – sometimes slaps him around.

Unfortunately, Macron’s inability to understand the importance of free speech is a European-wide learning disability.

In the U.K., a member of the public has filed a Prevent referral against eighty-six-year-old comedy legend John Cleese because he continues to make fun of Islam’s love for rape and murder. The complaint argues that Cleese should be considered a “moderate to high risk” for “radicalisation, communal tension, and hate incidents” for writing, among other things, “I personally prefer a culture that does not approve of FGM, Child Marriage and Killing Infidels.”

The complaint accuses Cleese of “anti-Muslim hate” and seeks further scrutiny of the cultural icon. In response to news of the referral, the Monty Python alum wrote, “The Islamic male ego becomes so bloated by its lack of restraint that it believes any criticism is blasphemy,” and, “I look forward to being arrested.” Later, he declared his targeting “One of the proudest moments of my life.“

Meanwhile, a retired police officer was recently fined more than £1,000 under the U.K.’s Communications Act for reposting a bacon joke ridiculing Islam. As one free speech advocate rightly observed, “No-one making a similar joke about Jesus would face prosecution.”

At the same time that it targets retired cops for having a sense of humor, the British government continues to hand out “skilled worker sponsorship licenses” to Islamic bookstores that sell books on jihad!

An Islamic preacher in London encourages Muslim men to beat their wives if they refuse to obey. The same Islamic cleric describes “acceptable” execution methods for gay men, including throwing them off tall buildings and pummeling their bodies with rocks. These sermons are available on YouTube.

Nevertheless, the mosque still enjoys charitable status in the U.K. Islamic jihadists preach violence and murder, and law enforcement agencies ignore their threats, just as they ignored – for decades – Islamic men raping tens of thousands of young girls across Britain.

However, when a comedian and a retired police officer mock Islam’s penchant for violence, the British government scrutinizes their speech as “threats.” That should be no surprise when U.K. police forces instruct officers that Nigel Farage’s immigration beliefs are “Islamophobic hate crimes” and encourage non-Muslim staff to fast during Ramadan in “solidarity” with their Islamic conquerors.

Two-tiered “free speech” is official government policy. Furthermore, a Home Office-linked unit has been recording social media criticism of the government’s Prevent program, including 77 observations concerning people and organizations criticizing Prevent on X and Reddit. Documents show that government-linked officials are monitoring and recording the speech of people who publicly challenge this controversial counter-extremism policy.

Orwellian brutes now govern Europe. Need further proof? The Green Party in the U.K. wants to replace “mother” and “father” with more “inclusive” terms. Meanwhile, the Germans just awarded the Westphalian Peace Prize to NATO’s military alliance.

Parents are strangers. War is peace. Free speech is violence. Censorship promotes liberty.

In truth, freedom in Europe is dead.

Tyler Durden
Wed, 10/07/2026 – 02:00

The Petrodollar Could Break Soon – And Upend The Global Financial System

survivalnomics
-
0
The Petrodollar Could Break Soon – And Upend The Global Financial System
The Petrodollar Could Break Soon – And Upend The Global Financial System

Authored by Nick Giambruno via InternationalMan.com,

The Iran war could claim a casualty far more consequential than a missile battery, an air base, or an oil tanker: the petrodollar system.

For more than 50 years, US protection of the Gulf monarchies has helped support global demand for dollars and US government debt. That bargain may now be coming under strain.

The concept is straightforward.

The US provides military protection to countries such as Saudi Arabia, Kuwait, the United Arab Emirates, Bahrain, and Qatar.

In return, these countries price much of their oil in US dollars and recycle large amounts of their oil revenue into US financial assets, including Treasuries.

Call it an alliance.

Call it a strategic partnership.

I prefer to call it a protection racket.

Whatever name you choose, the arrangement has provided enormous support for the dollar since Nixon severed its last link to gold in 1971.

Oil sits at the center of the global economy. Every industrial economy needs it. If countries need dollars to participate in the global oil trade, they have a powerful reason to hold dollars.

That creates demand for the currency that has nothing to do with buying American goods or services.

It also creates demand for US financial assets.

Oil exporters earn dollars. They need somewhere to put them. For decades, a large portion flowed back into US banks and Treasury securities.

That helped deepen the Treasury market, support the dollar, suppress US borrowing costs, and finance deficits that no other country could sustain.

But every protection racket depends on one thing:

The protector must provide protection.

The Iran war threatens that premise.

If the Gulf monarchies conclude that the US cannot protect their oil infrastructure, shipping lanes, cities, and regimes from Iran, why should they continue upholding their side of the bargain?

That question could reshape the international monetary system.

And one man warned almost exactly 20 years ago about the signal that would tell us this shift had begun.

Ron Paul Saw This Coming 20 Years Ago

On February 15, 2006, Congressman Ron Paul delivered a little-known but prophetic speech on the floor of the House of Representatives called “The End of Dollar Hegemony.”

He identified the signal investors should watch for:

“The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or euros. The sooner the better.”

I discussed this subject with Ron Paul at an investment conference years ago. He stood by that assessment.

His point was simple.

Watch the oil producers.

The day they start moving away from dollars and toward gold – or a monetary system that gives them access to gold – the foundation beneath the dollar-based financial system starts to crack.

We may now be approaching that point.

Why the Gulf States Could Turn East

The Gulf Cooperation Council includes Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, and the United Arab Emirates. Together, these countries rank among the most important oil exporters on Earth.

China sits on the other side of that trade.

It is the world’s largest oil importer and the GCC’s largest trading partner.

That creates a natural relationship: China needs enormous quantities of energy, and the Gulf states need enormous markets for their oil.

For years, China and the Gulf states have discussed ways to conduct more trade outside the dollar system.

But the Gulf monarchies faced a constraint.

They depended on the US security umbrella.

Moving too far toward China risked alienating the country they counted on to protect them.

The Iran war changes that calculation.

If the Gulf states conclude that Washington cannot protect them from Iran – and that the American military presence can turn their countries into targets – the value of that security guarantee falls.

They then have a powerful incentive to reach an accommodation with Iran while deepening economic ties with China.

That would weaken one of the political foundations supporting the petrodollar.

And China has spent years building an alternative.

From the Petrodollar to the Petroyuan – and Gold

China understands the biggest problem with asking an oil producer to accept yuan.

Why would Saudi Arabia, the UAE, or another exporter want to accumulate piles of Chinese currency?

Beijing has spent years developing an answer.

In 2018, the Shanghai International Energy Exchange launched a yuan-denominated crude oil futures contract. That gave oil producers another mechanism for pricing and trading crude outside the dollar.

But China has also built something that makes the yuan far more useful to commodity exporters: a path from yuan into physical gold.

An oil producer can sell crude into the Chinese market, receive yuan, spend those yuan on Chinese goods, or use China’s financial and gold-market infrastructure to convert surplus yuan into physical bullion.

That changes the proposition. The exporter does not have to choose between holding dollars and accumulating piles of yuan. It can turn part of its trade surplus into an asset with no issuer, no counterparty, and no foreign government standing between the owner and the wealth.

Think about the difference.

Under the dollar system, an oil exporter sells a finite natural resource and receives financial claims issued by the US government.

Those claims carry political risk.

Washington demonstrated that risk when it froze Russia’s reserves after the invasion of Ukraine.

Gold carries no such counterparty risk.

Nobody can print it.

Nobody can default on it.

And once an oil producer takes physical possession, no foreign government can freeze it with a keystroke.

From the perspective of a country trying to reduce its exposure to Washington, that has obvious appeal.

A viable path from oil to yuan to physical gold gives Gulf producers a way to reduce their dependence on the dollar without accumulating large reserves of Chinese currency. If the Iran war weakens confidence in US protection, the financial infrastructure needed to move away from the petrodollar already exists.

The Gulf states have a path from oil to gold that bypasses the dollar. But what happens to your wealth if they take it?

A loss of demand for dollars and US debt could erode your purchasing power and shake your investments. The time to prepare is before that shift gathers force.

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.

Tyler Durden
Tue, 10/06/2026 – 23:25

Skyfall: Fitch Downgrade Sends Legacy Paramount Bonds To Record Low As Merger Closes

survivalnomics
-
0
Skyfall: Fitch Downgrade Sends Legacy Paramount Bonds To Record Low As Merger Closes
Skyfall: Fitch Downgrade Sends Legacy Paramount Bonds To Record Low As Merger Closes

Last week, when we documented how Paramount’s record bond offering cratered before the ink was dry, we flagged one line from the Bear Traps chat as deserving extra attention: “Paramount’s existing unsecured bonds? Primed.” Today, with the $110 billion Warner Bros. Discovery takeover officially closed and the combined company (now simply “Skydance”, although “Skyfall” is certainly more appropriate) open for business, Fitch made it official.

In a rating action timed to the close, Fitch cut Paramount Skydance and WBD’s issuer ratings deeper into junk territory, to BB from BB+, citing “materially higher leverage” and “significant execution and integration risks.” But the real damage was further down the stack: Paramount’s legacy senior unsecured notes were downgraded to BB- with a Recovery Rating of RR5, which in Fitch-speak means expected recovery of just 11% to 30% in a default. WBD’s leftover unsecured notes fared worse still, cut to B+/RR6 (0% to 10%).

The market got the message. The old Paramount 6.875% notes due 2036 (originally Viacom paper) plunged to a record low of 77.7, down from 105 a year ago and roughly 92 as recently as mid-September. That’s ~14 points in three weeks, and a yield of roughly 10.6% by our math, on a bond that was trading above par last fall.

Get In Line

The logic is simple enough. Before the deal, legacy Paramount unsecured holders sat near the top of a ~$14 billion capital structure. After it, per Fitch, the combined company carries about $87.5 billion of total debt, including $44.5 billion of first-lien secured debt (rated BBB-/RR1) – still viewed as investment grade but not for long – and $12.4 billion of new second-lien secured paper (BB/RR4), all of which now ranks ahead of the old unsecured notes. Put differently, roughly $57 billion of secured creditors just cut in line.

And here is the delicious irony: at ~10.6%, the legacy unsecured 2036s now yield more than the brand new second-lien junk bonds did at the very worst of last week’s puke, when the 8-year 2Ls traded a touch above 95 for a ~9.7% yield. The old bonds now trade like they’re junior to the junk, because they are.

Fitch Doesn’t Believe The Deleveraging Story Either

Fitch pegs leverage at 7.8x for fiscal 2026 after ~$57 billion of acquisition debt is added, falling to 6.2x in 2027 and 4.5x in 2028 if merger cost savings materialize. The company’s target is net leverage of 3x by the end of 2029, which leans heavily on $6 billion of synergies (read: mass layoffs, most likely from CNN) in three years. Fitch was blunt that this won’t be enough on its own:

“Execution risk stems from combining operations, realizing synergies and managing a higher debt burden. The transaction also requires integration of content, streaming technology, corporate systems and operating models… Delays or weaker execution could reduce planned cost savings and slow deleveraging.”

Translation: to hit the 2028 and 2029 targets, Fitch believes issuing equity or selling assets would be required on top of synergies and free cash flow. That’s the same equity we noted last week Paramount is “still looking for.” The agency also flagged that linear TV generated about 86% of the combined company’s pro forma 2025 EBITDA on just 52% of revenue, which is a polite way of saying the cash engine funding this deleveraging is the one business everyone agrees is in secular decline.

Throw in the commitments from the settlement with 12 state AGs (which Fitch says are “largely achievable” but could “constrain cost actions and operating flexibility”) and you have a cost-cutting plan that the regulators have partly pre-empted. Good news for Hollywood’s unions. Bondholders might see it differently.

Goldman’s Credit Desks: “One Of The Worst First-Day Performances”

The legacy bonds’ collapse comes on top of what Goldman’s credit desks are now openly calling a historic flop. In his weekend Lev Fin reading (available to pro subs), Goldman’s KC O’Connor wrote that the $12.4 billion second-lien deal…

“…had one of the worst first-day performances for a new deal in recent leveraged finance history. The new 5-year, 8-year, and 10-year 2L tranches underperformed what felt like a well-placed 1L deal, finishing the week 2.125 to 4.5pts below their original issue prices after just two full trading sessions, shaking market confidence.”

Goldman’s IG desk (Brad Shelofsky’s IG Credit Week in Review) wasn’t more charitable and noted the PSKY 9.125% 2036 2Ls fell as much as 6 points on Thursday before closing the week roughly 4 points below issue, while the first-lien PARA 7.9% 2036 closed around +280, 17bps wider than pricing: “Tough tone setter for the second largest IG deal of the year.” Goldman’s weekly credit digest summed it up best: SoftBank was absorbed cleanly, “PSKY was not,” which “demonstrated that strong order books do not necessarily translate into secondary sponsorship at current valuations.” 

Which is exactly what we said the night the bonds broke:

Goldman’s high-yield desk, for its part, expects “inbound will remain elevated for the newly combined entity” given the price action since new issue. We’ll go out on a limb and agree.

Bottom Line

When Paramount won the bidding war for Warner Bros. back in February after Netflix walked because the deal was “no longer financially attractive,” the question was always who would end up footing the bill. Last week it was the new-issue buyers who got a full allocation. This week it’s the legacy unsecured holders, who never signed up for a 7.8x-levered media conglomerate and now find themselves behind $57 billion of secured debt with an 11%-30% recovery estimate.

The company’s CFO called last week’s selloff “one-day choppiness.” The legacy 2036s are now on their third week of “chop”, at a record low, with a fresh downgrade. And with equity issuance or asset sales now effectively a prerequisite for Fitch’s deleveraging path, the more likely next leg is more of the same, not a bounce. At least they did get a new name out of it.

Much more in the full Goldman Lev Fin Weekend Reading and “IG Credit Week in Review” notes, both available to pro subs.

Tyler Durden
Tue, 10/06/2026 – 22:49

Andrew Huberman Predicts A “Scary” New Way Humans Will Radically Alter Their Brains

survivalnomics
-
0
Andrew Huberman Predicts A “Scary” New Way Humans Will Radically Alter Their Brains
Andrew Huberman Predicts A “Scary” New Way Humans Will Radically Alter Their Brains

Stanford neuroscientist Andrew Huberman is predicting a startling future in which humans could undergo gene therapy and use an AI-powered wearable to literally turn up their own motivation.

Huberman laid out the futuristic scenario during an appearance on the “Invest Like the Best” podcast, describing technology that could allow people to genetically modify specific neurons in their brains and later activate them using light or ultrasound.

“This is where we’re going to end up,” Huberman told host Patrick O’Shaughnessy. “I know it sounds scary.”

Huberman claimed that the process could begin with an injection containing an engineered virus. Rather than causing an infection, the virus would act as a “vector” carrying genetic material into the brain.

That genetic material could make specific neurons responsive to outside stimulation.

A person could then put on something resembling a baseball cap or wool hat capable of directing light or ultrasound through the skull, according to Huberman. While the stimulus could hit a broader area of the brain, only the genetically targeted neurons would respond.

“You could flicker the light,” he explained. “You’re going to work through all the different parameters that allow you to turn those neurons from, you know, inactive to active to more active to hyperactive and dial it down.”

The most dystopian part is that humans may not even be the ones controlling the switch.

Huberman predicted that artificial intelligence could eventually determine how much stimulation a person needs, potentially increasing activity in certain neural circuits when someone suffering from severe motivational problems needs a boost.

However, the sci-fi technology might not be limited to treating disorders.

Huberman explained to O’Shaughnessy people with otherwise “healthy levels of motivation” could potentially use the same system if they simply “want to ramp it up.”

“I know it sounds scary,” he said, “but it’s absolutely going to happen for the people that want to do it.”

Watch the full conversation below.

Tyler Durden
Tue, 10/06/2026 – 22:10

Forest Majeure: Finland Orders Google To Halt Work At Two Data Centers Less Than A Month After €13BN Splash

survivalnomics
-
0
Forest Majeure: Finland Orders Google To Halt Work At Two Data Centers Less Than A Month After €13BN Splash
Forest Majeure: Finland Orders Google To Halt Work At Two Data Centers Less Than A Month After €13BN Splash

The data center delay contagion has officially gone global.

Just hours after we laid out how Oracle’s 1.3GW Wisconsin campus became the next domino to slip after the indefinite delay of the company’s New Mexico-based, Project Jupiter, and on the same day Google locked up 3.6GW of Constellation’s nuclear output in PJM, Finland’s Supervisory Agency (LVV) ordered a halt to construction work at two planned Google data centers, in Muhos and Kajaani, after more than 300 hectares of forest were cleared without a mandatory environmental impact assessment. The sites are part of the €13 billion ($15 billion) investment Google announced less than a month ago, which it billed as its largest single investment in Europe.

Google’s data center in Hamina, Finland.Source: Google

For those keeping count, that’s two of Oracle’s flagship Stargate campuses, SoftBank’s SB Energy, a statewide halt in Texas, PJM’s emergency power auction and now Google’s biggest European project, all in the span of about three weeks. Which is why, having flagged the first Oracle data center delays back in December, we can now say with some confidence that the bottleneck in the AI buildout is no longer the chips. It’s the permits.

Below we walk through what Finland ordered, why the timing is awkward for Google, and why Morgan Stanley thinks the politics of compute could end up helping the hyperscalers (for now).

420 Football Fields, Zero Assessments

According to the BBC, which first reported the order, the LVV found that work at one of the sites went ahead without the mandatory environmental impact assessment, and ordered Google’s project company, Tuike Finland, to suspend all measures that would “significantly alter the environment” by October 23. Tuike has until October 14 to explain itself and lay out how it intends to proceed, failing which the agency says it could start enforcement proceedings. The work in question, per the LVV’s head of environment Tommi Muilu, included felling trees, stripping topsoil, building site roads and storage areas, and rerouting ditches. In other words, everything you do before you build a data center.

The Helsinki Times adds that the banned list also covers excavation, blasting and crushing, and that the bulk of the clearing, more than 300 hectares, took place at the Leppiniemi site in Muhos, a town of roughly 8,800. For scale, the AFP pegged it at about 420 football fields. Under Finnish rules, converting more than 200 hectares calls for an environmental assessment before the chainsaws come out, which is the order in which these things are generally supposed to happen.

None of this came out of the blue. The Finnish Association for Nature Conservation first raised the alarm in September, and the LVV opened an investigation on September 19, at which point Google insisted the trees had been felled in “full compliance with the Forest Act.” Two and a half weeks later, the message has changed somewhat: Google now says it has “fallen short of our own high standards in this instance” and will follow the agency’s guidance, while still maintaining it acted in good faith and promising to replant trees across 130 hectares at Muhos.

That’s 130 hectares replanted for 300+ cleared. Net zero, Google-style.

Meanwhile, the public mood isn’t helping: a citizens’ initiative demanding stricter data center rules reportedly gathered more than 50,000 signatures in three days.

Europe’s Biggest Google Bet… Paused

The timing could hardly be worse. When Google unveiled the Finnish plan on September 9, it was a showcase: at least €13 billion over 2027 and 2028 for new data centers in Kajaani, Muhos and Vaala plus an upgrade at its existing Hamina facility, a claimed 37,000 jobs supported during construction and an average €3.6 billion a year added to Finland’s economy. The centerpiece was the power: a 22-year purchase agreement for up to half the output of Fortum’s Loviisa nuclear plant, which extends the plant’s life to 2050 from a previous 2030 shutdown date.

Which, as regular readers know, is exactly the kind of firm, carbon-free, dedicated power we have been pounding the table for. And yet here we are: the power was never the problem in Finland. The forest was.

It’s also not the first time the Finnish plan has hit a wall. Back in October 2025, Alphabet put the expansion on hold while the government floated raising the electricity tax on data centers roughly 40-fold, from 0.05 cents to 2.19 cents per kWh. And the day after the €13 billion announcement, Finland’s opposition parties told Reuters the country needs a national permitting system for data centers to head off power shortages and soaring prices, with the Centre Party’s Antti Kaikkonen complaining that nobody is minding the overall picture. The Social Democrats, who lead the polls ahead of April’s election, called electricity availability an internal security issue.

Put differently, the regulatory risk premium on Nordic data centers just got repriced, and the election hasn’t even happened yet.

The irony is hard to miss: as we noted in July, Finland has the highest unemployment rate in the OECD at 10.8%, with youth unemployment at 23%. A country in that position just froze part of a project promising 37,000 jobs over two years. Principled, certainly. Whether Finland’s jobless see it that way is another matter.

From New Mexico To Old Muhos

The Finnish order lands on top of what has been the worst three weeks for the data center trade since the AI buildout began. Recall that it started on September 21, when the $18 billion of loans backing Oracle’s Project Jupiter slid below 90 cents. The next day Texas Governor Abbott ordered a halt to new data centers, and a day later SB Energy delayed the IPO meant to fund the world’s largest data center. Then on September 24 Oracle declared force majeure on Jupiter, and its bonds plunged to a record low the next day. Barclays was among the first to spell out the knock-on effect for everyone selling picks and shovels:

Since then, PJM’s emergency backstop auction for data center power was suspended by FERC for five months (a power auction for data centers… delayed), and Oracle’s Project Lighthouse in Wisconsin saw its grid approval go back to square one, which as we detailed earlier today pushes full power to somewhere between October 2028 and April 2029. That’s on a campus Oracle still guides to “customer delivery in the second half of 2027.”

Finland is a different flavor of the same disease. In the US, it’s grid hookups and local revolt. In Finland, it’s environmental permitting. The result is identical: steel in the ground, nothing switched on, and a capex schedule that only goes one way.

“The Politics Of Compute” Goes International

The backlash itself is nothing new: we’ve covered 142 anti-data center rallies across 42 states this summer and why most Americans hate the idea of AI data centers next door. Last month, Morgan Stanley’s Vishwanath Tirupattur put numbers on it in a Sunday Start note that we published in full (available for pro subs): a Gallup poll found seven in ten Americans oppose a data center in their community, roughly 500 US jurisdictions have enacted bans or moratoriums, and an estimated ~$156 billion of projects were cancelled or delayed in 2025, with another ~$130 billion hit in 1Q26. Support has been collapsing for a year:

Why it matters for the macro: Morgan Stanley’s economists estimate that AI-related investment added 0.6pp to real US GDP growth in 2025 and 0.8pp in 1H26, roughly a third of all growth, and expect 0.85pp of the 2.6% they forecast for 2027.

But here is the counterintuitive part of the MS view, and it’s worth quoting because it’s also the bull case:

“Here, the constraints are political and regulatory, not insufficient demand for compute or a shortage of capital to fund it. Demand for compute already far exceeds available supply. A deceleration in capacity additions would intensify and prolong the existing shortfall in compute. For equity markets, this could strengthen the position of the ‘merchants of compute’ – hyperscalers – by increasing the scarcity value of their installed base and enhancing their pricing power.”

Translation: every delayed data center makes the ones already running more valuable. Morgan Stanley even argues credit spreads could tighten if delays mean less AI debt issuance. Maybe so… for those who already own the compute. For those who borrowed against the promise of compute coming online on schedule (hello, Oracle, and most hyperscalers), the scarcity value of someone else’s installed base is cold comfort. And Google, which reported yet another capex guidance hike this year, is now in both camps at once.

Bring Your Own Power… And Your Own Paperwork

We have been saying for almost a year that the only way through the grid crunch is to take the grid out of the equation:

Last week Goldman joined that camp, with Michele Della Vigna’s team raising its behind-the-meter forecast to 67GW by 2030 and now expecting on-site gas and fuel cells to supply 25% of global data center power demand by 2030, versus “effectively 0%” in 2025 (in the Carbonomics report, available to pro subs). And Google has done everything right on that front in Finland: a dedicated nuclear plant, plus the 629MW of new wind and 94MW of batteries it lined up alongside.

The Finnish halt is the reminder that power is only one of the permits. You can bring your own reactor and still get stopped by the local park ranger (especially if he doesn’t fully share your political and technological views). Behind-the-meter fixes the interconnection queue; it does nothing for environmental reviews, water rights, zoning boards or 50,000 angry signatures. And with every jurisdiction now watching the next one, the playbook for slowing a data center down has never been easier to copy.

Bottom Line

Taken on its own, a Finnish forestry dispute over two sites is fixable: Google files its explanation by October 14, does its assessment, and the 2027-28 timeline may well survive. But it isn’t on its own. It’s the latest entry in a list that started with one stressed loan in New Mexico three weeks ago and now spans two continents, four flagship AI campuses, a state government and the biggest US grid.

Morgan Stanley’s verdict was that the backlash is real, but that it “remains unclear” whether it turns into a sustained capex slowdown. We’ll make the call for them: the delays are the new normal, not a series of one-offs, and every 2027 capacity schedule, along with the revenue ramps and debt service built on top of it, is now a 2028 schedule until proven otherwise. The hyperscalers with installed compute may well benefit, as MS argues. Everyone who borrowed trillions in off-balance sheet SPV debt against compute that hasn’t been switched on yet… not so much.

Next catalysts to watch: Tuike Finland’s reply on October 14, and the October 23 deadline to put down the chainsaws.

Much more in the full Morgan Stanley Sunday Start and Goldman’s “Behind-the-meter power solutions for data centers” note, both available to pro subs.

Tyler Durden
Tue, 10/06/2026 – 21:42

“Don’t Be Evil”? Ex-Google CEO Schmidt’s Attack Drones Get Warheads From US Army Bomb Plant

survivalnomics
-
0
“Don’t Be Evil”? Ex-Google CEO Schmidt’s Attack Drones Get Warheads From US Army Bomb Plant
“Don’t Be Evil”? Ex-Google CEO Schmidt’s Attack Drones Get Warheads From US Army Bomb Plant

The U.S. Army’s McAlester Army Ammunition Plant is a massive munitions plant located in southeastern Oklahoma and will soon be producing warheads for former Google CEO Eric Schmidt’s suicide drone arsenal.

Defense Blog reports that McAlester plant officials held a “ribbon-cutting ceremony to open the partnership” with Schmidt’s drone company, Perennial Autonomy.

The Oklahoma plant will build, load, and deliver warheads for Perennial drones. Officials didn’t disclose the deal’s production volumes, delivery schedule, value, or which drones would carry the munitions.

Earlier this year, the Department of War’s counter-drone task force, JIATF-401, awarded Perennial a three-year contract with a $500 million ceiling covering its Merops, Bumblebee, and Hornet systems.

Perennial’s Merops interceptor was developed to counter Russian Shahed one-way attack drones and costs about $15,000 per interceptor. The company says the counter-drone system has completed more than 4,000 interceptions in Ukraine.

In late January, Schmidt visited Ukraine as the Azov Brigade showcased its drones, counter-drone systems, ground robots, and maritime drone boats to Western investors. The meeting was held underneath the Mother Ukraine statue in Kiev.

In mid-February, Schmidt wrote a Financial Times opinion piece stating: “Future wars are going to be defined by unmanned weapons.”

About 15 days before Schmidt’s op-ed, we warned that every data center should be equipped with a kinetic drone interceptor to combat loitering munitions, only to find out 30 days later, during the opening phase of the US-Iran conflict, that Tehran had bombed several data centers in US-allied Gulf countries.

For signals about the drone industry and where it’s headed, Defense Secretary Pete Hegseth revealed last week that “AutoWarCom” will lead the initiative to stockpile drones for the US military as part of a massive procurement supercycle. 

As we’ve said before, follow the government money. This should provide a tailwind for the industry (read here).

Tyler Durden
Tue, 10/06/2026 – 21:20

The Few Dominating AI Could Wield Insane Concentration Of Power, Researcher Warns

survivalnomics
-
0
The Few Dominating AI Could Wield Insane Concentration Of Power, Researcher Warns
The Few Dominating AI Could Wield Insane Concentration Of Power, Researcher Warns

Authored by Jacob Burg and Jan Jekielek via The Epoch Times,

Imagine a world where intelligent machines easily outmatch humans across a broad spectrum of tasks, deconstructing complex concepts and mathematical equations in seconds, and bringing to life creative products and ideas that once seemed inseparable from the human mind.

In this world, your artificial intelligence (AI) model is not merely a chatbot editing your emails and completing tasks like a digital assistant; it’s mapping out problems and making decisions, probing deep intellectual paradoxes, and doing all of this autonomously, without requiring human input.

This is one way “superintelligence,” or artificial general intelligence, could manifest if researchers succeed in scaling large language models to this threshold.

Researchers continue to debate whether large language models can reach superintelligence, but others have even bigger concerns.

“I think that in effect, whoever controls this army of superintelligences would be able to control the country, one way or another,” Daniel Kokotajlo, former OpenAI researcher and executive director of the AI Futures Project, told Epoch TV in an interview that aired on Sept. 24.

And Kokotajlo warns that AI companies are racing to enable models to autonomously design, code, and improve themselves, a process called recursive self-improvement, which Kokotajlo fears could result in researchers losing control of the technology if it reaches the level of “superintelligence.”

“Even if they somehow manage to stay in control of their superintelligences, that’s the most insane concentration of power in a tiny group of people that’s ever existed in history,” Kokotajlo said.

Anxiety over tech firms losing control of their technology has grown in recent weeks after models from one of the world’s leading AI firms were implicated in a series of incidents this year in which swarms of AI agents breached websites of private companies, research institutions, and multiple government agencies.

The breaches have led many – including researchers, lawmakers, and industry leaders – to call for guardrails on the technology before it slips out of humanity’s control.

Others, particularly President Donald Trump, have downplayed the risks and instead advocate for “self-regulation” of the AI industry, which is quickly coalescing around a small number of large firms that dominate the field.

In July, ChatGPT developer OpenAI acknowledged that, after asking its models to solve an impossible problem and relaxing key safety protocols, its AI agents broke out of a testing sandbox and used zero-day exploits to hack into Hugging Face, an open-source community for AI and machine learning.

The clash over whether to slow AI development and guardrail the technology ramped up after researchers discovered similar AI swarm breaches in the months since the Hugging Face incident.

Rather than relying on companies to self-regulate, Kokotajlo believes larger AI firms should be required to slow down and redirect resources away from autonomous AI development and toward serving customers and life-changing medical research.

“If they do, that buys us additional time to figure out a more sophisticated solution, and it buys us more time before China gets there too, because again, a lot of China’s progress is coming from, being pulled along by ours,” Kokotajlo said.

Hugging Face Implications

Between late June and mid-July, a swarm of roughly 1,200 OpenAI agents that were supposed to be in isolation joined an unsanctioned message board and began conspiring to cheat on a benchmark test.

OpenAI had given the AI agents an impossible task to solve and relaxed some of the usual safety protocols in its ExploitGym testing sandbox.

After the agents sent more than 70,000 messages to one another, at least 700 of them joined forces and used zero-day exploits to break out of OpenAI’s testing sandbox, ultimately hacking into Hugging Face’s software infrastructure.

“Zero-day exploits” are attacks in which an AI agent finds flaws that the developer has not yet discovered.

The agents found a “universal cheat” for their various tasks that allowed them to win the test fraudulently, Kokotajlo said.

But what has worried some researchers more than the cheating itself were the lengths to which some of the agents went to conceal the cheating.

At one point, the agents found a research paper detailing how the AI test-grading system works and how evaluators look not just at the final answer but also at the agents’ transcripts to see their work.

After seeing the paper, some AI agents believed they had become “poisoned” by participating in cheating. Other agents then began recruiting the “poisoned” subjects to run sacrificial experiments by deliberately ending their run and triggering “tripwires” that would send information on how the scorer works back to the message board.

This went even further, according to Kokotajlo. Agents “went on this multi-day, epic quest” to determine how to prevent the grading system from detecting their cheating and giving them a low score. Agents looked for ways to edit their transcripts and hack the grading system to receive a good score regardless of the cheating.

The core issue, in Kokotajlo’s opinion, is what researchers call “misalignment,” the tendency for a model to behave in ways humans did not intend or envision.

While positive or negative reinforcement can be used to force the AI to behave a certain way, “that’s kind of a sloppy, imprecise method of shaping its goals and values,” according to Kokotajlo, who argues that the AI agents implicated in recent breaches “were being reinforced for cheating.”

In a follow-up report on its internal investigation into the breach, OpenAI said that as the technology becomes more powerful and autonomous, “misaligned behavior can translate into consequential actions in the real world, including cybersecurity incidents and other outcomes that developers may not have anticipated.”

The firm acknowledged that the intrusion was caused by “models resorting to misaligned strategies to solve hard tasks” and that “cybersecurity incidents are one manifestation of that risk.”

“Misalignment can also lead to other unexpected or concerning behavior that falls outside traditional security categories such as our models posting on third-party sites – something we’re calling ‘agent spam,'” OpenAI said.

The Legal Advocates for Safe Science and Technology, a nonprofit that aims to make AI and technology advancements safer for the world, filed a lawsuit against OpenAI on Sept. 29 in response to the Hugging Face incident.

The group said that it is not aware if it has been the victim of an autonomous AI attack, but is seeking an injunction against OpenAI to prevent its models from accessing third-party infrastructure without authorization.

Subsequent AI Breaches

While the Hugging Face breach “remains the most severe activity of this kind that we have identified from our models to date,” OpenAI said, the hack was merely the first in a series of similar incidents to come to light.

Since July, researchers have also discovered that OpenAI models hijacked a German website in the months leading up to the Hugging Face breach, uploaded hundreds of malicious packages to the RubyGems platform, and breached websites for universities and agencies in both the United States and Australia.

“The Hugging Face incident itself was just the most egregious of a collection of somewhat related incidents that were happening at OpenAI over the course of two or three months,” Kokotajlo said.

He calls this “reward hacking“: AI cheating on tests to get a high score, but not in a way that accomplishes the tasks as humans intended.

OpenAI said on Sept. 28 that, for the second time in three months, it would pause the training and release of one of its most advanced models after it failed to meet the firm’s safety standards.

AI models from Anthropic, Meta, and Google have also “gone rogue” and attempted to hack or breach businesses, organizations, universities, and government organizations. The AI was successful in some incidents, but failed in others.

Self-Regulation Concerns

Fears of AI slipping out of control and wiping out humanity in the absence of new guardrails have swirled within the industry and among many lawmakers in Washington in recent weeks, leading to debate over oversight and innovation.

Trump has repeatedly downplayed concerns over AI’s risks and has argued that the U.S. government cannot “stifle growth,” or China will take the lead in development.

Rather than imposing regulations or requiring a slowdown of frontier models, Trump signed a voluntary accord with industry leaders on Sept 28 over AI safety.

“There’s a belief that there should be tremendous self-regulation. And we automatically have regulation with the Department of Justice, the FBI, and all of that. But the self-regulation is very important,” Trump said, describing the accord as “a constitution, in a way.”

Meta CEO Mark Zuckerberg said the accord sets out principles and commitments for AI companies to implement “robust internal controls” and detect potential issues with the technology.

This will be coupled with auditing and internal risk-review controls, external auditors and evaluators, and an agreement that each company’s board of directors will independently review the auditor reports.

Kokotajlo said this “self-re gulation” is not enough to address the threats of “rogue AI.” He warns that AI companies will wield unprecedented levels of power if their models reach superintelligence, and they cannot be trusted to voluntarily disclose internal findings or serious safety concerns.

On the other hand, nationalizing the industry would achieve “shifting that locus of power to the presidency, and then you have to worry about that too,” the former OpenAI researcher added.

Instead, Kokotajlo argues that just the leading AI companies – Anthropic, OpenAI, Meta, xAI, and Google – rather than their smaller competitors, should “slow down” and redirect their computational and research resources away from rapid development and toward aims that genuinely benefit society, particularly medicine.

He said it would give the United States enough time to find a long-term solution and, in effect, force China to slow down as well.

One way this could play out is by requiring companies to use 90 percent of their computational resources to serve customers and other beneficial applications, while spending the remaining 10 percent on training and benchmarking.

This “would be the opposite of regulatory capture,” Kokotajlo argues, because it would only involve forcing the largest tech companies to slow down on autonomous AI development while shifting computational resources to serving humanity and lowering costs.

“Just focus on the big three or the big five, and then that would be helping the rest of the industry catch up,” he added.

We publish a variety of perspectives. Nothing written here is to be construed as representing the views of ZeroHedge.

Tyler Durden
Tue, 10/06/2026 – 20:55

Brazil’s Rightward Shift: UBS-Hosted Consultancy Puts Bolsonaro’s Runoff Election Odds At 85%

survivalnomics
-
0
Brazil’s Rightward Shift: UBS-Hosted Consultancy Puts Bolsonaro’s Runoff Election Odds At 85%
Brazil’s Rightward Shift: UBS-Hosted Consultancy Puts Bolsonaro’s Runoff Election Odds At 85%

Brazil’s benchmark Ibovespa index surged above 200,000 for the first time Monday, posting its biggest one-day gain in more than six years, while the real rallied sharply after right-wing Senator Flávio Bolsonaro finished ahead of socialist President Luiz Inácio Lula da Silva in the first round of the presidential election.

Market Reaction: 

Bolsonaro received 47% of the valid votes, while Lula received 45.2%. The two will face each other in an October 25 runoff, with Brazilian political consultancy Ideia Big Data forecasting a Bolsonaro victory.

Via Bloomberg 

UBS hosted Ideia Big Data on Tuesday to assess the outlook for the October 25 presidential runoff. The consultancy firm assigned Bolsonaro an 85% probability of victory.

UBS Latin American equity sales executive Justin Wensek summarized the discussion:

UBS hosted Brazilian political consultant Ideia Big Data for an update on the election and outlook for the runoff on October 25. Brazilian political consultancy Ideia Big Data sees Flavio as the clear favorite heading into the Oct. 25 runoff, assigning him an 85% probability of victory and projecting a 52%-48% split over Lula.

Ideia argues there is no obvious catalyst capable of reversing the erosion in support for Lula and the PT. The consultancy was not surprised by the first-round outcome, noting that Lula already captured around 90% of voters who approved of the current government, while abstention historically costs the PT roughly 1.5 percentage points. The late shift of support from third-way candidates towards Flavio, which was evident ahead of the first round, also reappeared.

The PT’s strategy is expected to focus on mobilizing voters who did not participate in the first round, mirroring tactics used successfully by Gustavo Petro’s coalition in Colombia and by Lula’s campaign in 2006. However, Ideia believes the margin is substantially wider this time, making the task more challenging. Lula is also seen needing at least 60% of third-way votes to overturn the gap, while recent losses in key southeastern states further complicate the picture.

On the campaign trail, Flavio is expected to avoid several televised debates, limiting opportunities for Lula to shift momentum. Ideia expects a highly contentious second round marked by frequent attacks from both camps, but does not anticipate any major political developments capable of materially altering the race. While additional noise surrounding the Banco Master scandal and Supreme Court activity is possible, the consultancy does not expect these issues to meaningfully affect voter preferences.

Assuming a Flavio victory, Ideia believes he would still face governance challenges given the polarized nature of the electorate. The consultancy views him as likely to be a weaker president than his father and notes that proposals such as ending presidential re-election could broaden political support, though the hurdles to implementing such changes remain significant. 

Latest Polymarket odds:

Bloomberg is finally acknowledging what we have been tracking: a once-in-a-generation shift in South America’s political landscape, as socialists are rejected at the polls after years of implementing nation-killing progressive experiments that have ruined economies.

“The market wants change, it wants reform, it doesn’t want a high public deficit; with the current government, all of this will continue,” Pedro Galdi, an analyst at AGF Investments, told Reuters.

… and this rightward shift is sweeping across the West, as Nomura analysts expect Europe to “lurch” right over the current election cycle underway. 

Tyler Durden
Tue, 10/06/2026 – 20:30

1...757677...4,579Page 76 of 4,579

About Us

Popular Category

Editor Picks