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OpenAI-Microsoft Friction Grows As ChatGPT App Growth Slows, Data Center Buildout Risks Overcapacity

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OpenAI-Microsoft Friction Grows As ChatGPT App Growth Slows, Data Center Buildout Risks Overcapacity

OpenAI’s aggressive expansion of datacenters and infrastructure investments – along with its massive pipeline of future projects, fueled by what we call a “circle jerk” in AI vendor financing – has prompted warnings from Microsoft executives that meeting all of Sam Altman’s infrastructure demands could generate overcapacity risks over data centers, according to The Information. Meanwhile, a separate TechCrunch report indicates that ChatGPT’s mobile app growth may have already peaked.

An OpenAI employee told The Information that the chatbot startup ($500 billion valuation) has budgeted approximately $450 billion in server expenses through 2030, with additional plans to rent servers from Microsoft and Oracle. 

OpenAI has made requests for increased computing capacity with Microsoft, which has sparked internal friction between both companies. Microsoft retains “first dibs” on supplying OpenAI data center capacity due to its $13 billion investment; however, practical constraints such as construction limits and power market woes have slowed its ability to scale

Microsoft executives, including CFO Amy Hood, cautioned against overbuilding servers that might not yield returns, while OpenAI CEO Altman pushed for faster expansion

The Information continued:

There are usually two sides to most stories of marital friction. For OpenAI, its frustrations speak to the startup’s seemingly bottomless computing needs, which have multiplied by the month. Over the past year, OpenAI CEO Sam Altman frequently pressed Microsoft to move more quickly in adding capacity to meet those needs.

And for their part, Microsoft leaders told Altman the company simply couldn’t supply that capacity as fast as he wanted due to fundamental constraints in the construction process, such as connecting new data centers to power. Chief Financial Officer Amy Hood and her staff told colleagues that catering to OpenAI’s demands could put Microsoft at risk of overbuilding servers that might not produce a financial return, according to people involved in the discussions.

Eventually, the two companies came to a resolution. In the summer of 2024, Altman and Microsoft CEO Satya Nadella agreed it would be impossible for Microsoft to be the startup’s sole cloud provider given OpenAI’s recent growth, according to people who spoke to them. As a result, Microsoft began granting OpenAI waivers to strike deals with other cloud providers.

Hood’s overbuilding server risk comes around the time that new global daily active user (DAUs) data from third-party app intelligence firm Apptopia shows “ChatGPT’s mobile app growth may have hit its peak,” according to TechCrunch. 

In the U.S…

And more evidence that ChatGPT’s hype is fading.

Fueling the data center bubble and breaking down how the giant “circle jerk” works, we exposed the infinite money glitch earlier this month.

More complex via Bloomberg.

Super impressive Capex by hyperscalers. 

And comes as:

While the Bank of England warned earlier this month that AI-related valuations are “stretched.” The irony of this warning is that central bankers very rarely make the right calls. 

This story builds on:

The bigger question is whether user fatigue with AI products is only now beginning to emerge. If that’s the case, Hood’s concerns about OpenAI’s aggressive expansion may be justified, as Goldman’s James Schneider told clients, “The net impact of our model updates extends the duration of peak datacenter occupancy well into 2026 (from the end of 2025 previously). After this point, we forecast a modest, but gradual loosening of supply/demand balance in 2027…”

Schneider added more color:

Reconciling our revised supply and demand updates, our baseline forecast for supply sufficiency stays largely unchanged in 2025 at 92% but increases by an average of 2% in 2026 to 92%, and 2% in 2027 to 92% – with a longer-term forecast supply sufficiency of 89% by 2030 – a 1% increase from our prior version of the supply/demand model. As a result, we now believe the peak of datacenter supply sufficiency is likely to be pushed out into 2026, from the end of 2025 as previously forecast. We believe the datacenter market’s current supply/demand tightness will extend for longer, and our model continues to suggest that market occupancy will stabilize around average levels seen over the past 18 months. In summary, we believe the outlook for datacenter supply, demand, and their implied supply sufficiency remains relatively healthy for now. We continue to watch for incremental datapoints that could cause a shift in expectations – and we are closely watching for any changes (GPU demand, AI model efficiencies, announced incremental supply additions such as Stargate) that could significantly impact medium-term supply/demand balance.

ZeroHedge Pro Subs can read the full global datacenter supply/demand report in the usual place.

Tyler Durden
Mon, 10/20/2025 – 11:50

Was The CIA Misleading Witkoff & Kushner On Key Intel About Hamas During Critical Phase Of Peace-Talks

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Was The CIA Misleading Witkoff & Kushner On Key Intel About Hamas During Critical Phase Of Peace-Talks

Authored by ‘sundance’ via The Last Refuge,

A fascinating hour-long interview with Steve Witkoff and Jared Kushner as they outline the backstory to the Israel-Hamas peace agreement in Gaza.

During a segment (prompted below) Witkoff and Kushner are outlining the step-by-step process as they engaged the leaders of Qatar, Turkey and Egypt. 

Witkoff reveals how the CIA was briefing them both, multiple times a day, and the briefing itself was exactly the opposite of what Emir of Qatar and Presidents of Turkey and Egypt were telling them. 

The CIA intelligence was the exact opposite of reality.  

WATCH:

What they are describing is EXACTLY why we outlined how ‘outside govt’ emissaries were/are vitally necessary to work around the control agenda of the U.S. Intelligence Community. 

This small example is stunning in magnitude when considered around the importance of the moment.

On a positive note, with Witkoff making this stunning public statement, we can now add a major datapoint to President Trump’s reference of NOT TRUSTING the CIA. 

Combined with the previous assertions of Marco Rubio and Tulsi Gabbard on essentially the same level of outlook, this example of the CIA getting it wrong (misleading the administration) has long-range ramifications beyond the Hamas example.

With this backdrop for reference, surely now we can have an optimistic sense that President Trump doesn’t trust the CIA intelligence on the Russia-Ukraine conflict.

Tyler Durden
Mon, 10/20/2025 – 10:20

Key Events This Week: CPI; Fed Blackout Joins Government Blackout

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Key Events This Week: CPI; Fed Blackout Joins Government Blackout

As futures indicate this morning, and as DB’s Jim Reid writes overnight, the mood music on tariffs has sounded much more positive in recent days. As it stands, President Trump has threatened additional 100% tariffs on China from November 1, but Treasury Secretary Bessent said that he’d be meeting with China’s Vice Premier He Lifeng in person this week. And on Friday, President Trump said he thought that a meeting with Chinese President Xi in South Korea would still go ahead, and said “I think we’re getting along with China”. So that’s added to investor expectations that those 100% tariffs won’t come into force, and if we look at Polymarket, it’s currently pointing to just a 7% chance they come into effect by November 1.

As all that’s happening, we still have the ongoing government shutdown in the US, which is now on day 20. Bear in mind that only two shutdowns have been longer than this one, which were the 35-day shutdown in 2018-19, and the 21-day shutdown in 1995-96. And as it stands, there’s still no sign of a compromise between Republicans and Democrats that would see the government re-open. In terms of the market implications, this is still affecting the flow of economic data, so we’re not getting regular releases like the weekly initial jobless claims, and we don’t have the payrolls number for September either. However, this week we will get the postponed CPI release for September, which is coming out on Friday, just in time for the FOMC meeting the week after.

In terms of what to expect, DB’s economists are looking for headline CPI to come in at a monthly +0.42% pace, which would push up the year-on-year rate to +3.1%, and be the strongest monthly print since January. Meanwhile for core CPI, they expect that to come in at +0.32%, with the year-on-year print remaining at +3.1%. Within the data, they’re still looking for signs of tariff impacts in core goods, with a focus on categories like apparel and new vehicles that haven’t yet seen a meaningful tariff pass-through. 

Otherwise this week, another key data highlight will be the October flash PMIs on Friday, which will give us an initial indication as to how the global economy has fared at the start of Q4. We also have a few CPI prints elsewhere, including from Japan, the UK and Canada.

There are no speaking engagements by Fed officials this week, reflecting the FOMC’s blackout period.

On the earnings side, we’ve got more than 80 companies in the S&P 500 reporting this week – accounting for some 20% of S&P market cap – including Tesla and Netflix, along with more than 80 from the STOXX 600, including Barclays, NatWest and SAP.

Here is a day day-by-day calendar of events

Monday October 20

  • Data: Germany September PPI, Italy August current account balance, Eurozone August construction output, Canada September industrial and raw materials price index
  • Central banks: ECB’s Schnabel, Nagel and Vujcic speak, BoC Q3 business outlook survey
  • Earnings: Zions Bancorp
  • Other: China’s Fourth Plenum (through October 23rd)

Tuesday October 21

  • Data: US October Philadelphia Fed non-manufacturing activity, UK September public finances, Canada September CPI
  • Central banks: ECB’s Lagarde, Escriva, Nagel, Lane and Kocher speak
  • Earnings: Western Alliance Bancorp, Netflix, General Electric, Coca-Cola, Philip Morris, RTX, Texas Instruments, Capital One Financial, Lockheed Martin, 3M, General Motors

Wednesday October 22

  • Data: UK September CPI, RPI, PPI, August house price index, Japan September trade balance
  • Central banks: ECB’s Lagarde and de Guindos speak
  • Earnings: Tesla, SAP, IBM, Thermo Fisher Scientific, AT&T, UniCredit, Barclays, Hilton, Heineken, Southwest Airlines, Alcoa
  • Auctions: US 20-yr Bond

Thursday October 23

  • Data: US September existing home sales, October Kansas City Fed manufacturing activity, France October business confidence, Eurozone October consumer confidence, Canada August retail sales
  • Central banks: ECB’s Lane speaks
  • Earnings: T-Mobile US, Blackstone, Intel, Union Pacific, Honeywell, Newmont, Lloyds, Ford Motor
  • Auctions: US 5-yr TIPS 
  • Other: European Council summit of EU leaders in Brussels

Friday October 24

  • Data: Global October flash PMIs, US September CPI, October Kansas City Fed services activity, UK October GfK consumer confidence, September retail sales, Japan September national CPI, France October consumer confidence, Sweden September PPI
  • Central banks: ECB’s Nagel, Cipollone and Villeroy speak
  • Earnings: Procter & Gamble, Sanofi, NatWest, Porsche
  • Other: Moody’s review France’s credit rating, Ireland presidential election

Looking at just the US, Goldman writes that the September CPI report—originally scheduled for release last week—will be released on Friday. The new home sales report on Thursday will be postponed if the federal government shutdown continues until then. The Department of Labor will also postpone the official release of the jobless claims report if the government shutdown continues through Thursday, but preliminary state-level claims data will likely be available. There are no speaking engagements by Fed officials this week, reflecting the FOMC’s blackout period.

Monday, October 20 

  • There are no major economic data releases scheduled.

Tuesday, October 21 

  • 08:30 AM Philadelphia Fed non-manufacturing index, October (last -12.3)

Wednesday, October 22 

  • There are no major economic data releases scheduled.

Thursday, October 23 

  • 08:30 AM Initial jobless claims, week ended October 18 (GS 225k, consensus 226k, GS estimate of last 219k); Continuing jobless claims, week ended October 11 (GS estimate of last 1,912k): We forecast that initial jobless claims edged up to 225k in the week ended October 18th. Using state-level data from the Department of Labor (DOL), we now estimate that initial claims declined to 219k in the week ended October 11th (with a likely range between 216k and 222k; vs. our estimate of 217k on Thursday) reflecting new data uploaded by Massachusetts and Tennessee on Friday that were missing in DOL’s Thursday upload. We estimate that continuing claims declined to 1,912k in the week ended October 4th (with a likely range between 1,903k and 1,920k; vs. our previous estimate of 1,917k), also reflecting new data uploaded by Massachusetts and Tennessee.
  • 10:00 AM Existing home sales, September (GS -1.5%, consensus +1.5%, last -0.2%)
  • 11:00 AM Kansas City Fed manufacturing index, October (last +4)

Friday, October 24 

  • 08:30 AM CPI (MoM), September (GS +0.33%, consensus +0.4%, last +0.4%); Core CPI (MoM), September (GS +0.25%, consensus +0.3%, last +0.3%); CPI (YoY), September (GS +3.02%, consensus +3.1%, last +2.92%); Core CPI (YoY), September (GS +3.05%, consensus +3.1%, last +3.11%): We estimate a 0.25% increase in September core CPI (month-over-month SA), which would leave the year-over-year rate unchanged at 3.1% on a rounded basis. Our forecast reflects unchanged used car prices reflecting the signal from auction prices, a slight increase in new car prices (+0.2%) reflecting an increase in dealer incentives, and an increase in car insurance prices (+0.3%) based on premiums in our online dataset. We forecast a decline in airfares in September (-1.5%), reflecting a fading boost from seasonal distortions and a decline in underlying airfares based on our equity analysts’ tracking of online price data. We have penciled in upward pressure from tariffs on categories that are particularly exposed (such as communication, household furnishings, and recreation) worth +0.07pp on core inflation. We expect moderation in the shelter components on net after a jump in the prior month (primary rent +0.25% in September vs. +0.30% in August; OER +0.26% vs. +0.38%). We estimate a 0.33% rise in headline CPI, reflecting higher food (+0.25%) and energy (+1.5%) prices. Our forecast is consistent with a 0.21% increase in core PCE in September. We will update our core PCE forecast after the CPI is released.
  • 08:30 AM New home sales, September (GS -11.6%, consensus -11.6%, last +20.5%) 
  • 09:45 AM S&P Global US manufacturing PMI, October final (consensus 51.8, last 52.0): S&P Global US services PMI, October final (consensus 53.5, last 54.2)
  • 10:00 AM University of Michigan consumer sentiment, October final (GS 54.0, consensus 55.0, last 55.0): University of Michigan 5-10-year inflation expectations, October final (GS 3.8%, last 3.7%)

Source: DB, Goldman

Tyler Durden
Mon, 10/20/2025 – 10:10

White House’s Hassett Says Shutdown Could End This Week, Threatens “Stronger Measures” If Democrats Balk

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White House’s Hassett Says Shutdown Could End This Week, Threatens “Stronger Measures” If Democrats Balk

With the government shutdown in its third week, White House’s top economic advisor Kevin Hassett said on Monday that the government shutdown is “likely to end sometime this week,” and that if it does not, the Trump administration may impose “stronger measures” to try and force Democrats to cooperate.

Hassett told CNBC that he’s heard from the Senate that Democrats thought it would be “bad optics” to vote to reopen the government before this weekend’s nationwide “No Kings” protest.

“Now there’s a shot that this week, things will come together, and very quickly,” he said. “The moderate Democrats will move forward and get us an open government, at which point we could negotiate whatever policies they want to negotiate with regular order.”

I think the Schumer shutdown is likely to end sometime this week,” he said, referring to Senate Minority Leader Chuck Schumer (D-NY), who Republicans have blamed for letting the government shut down.

If it doesn’t reopen, “I think that the White House is going to have to look very closely, along with [White House budget chief Russell] Vought, at stronger measures that we could take to bring them to the table,” Hassett continued – suggesting that Democrats are simply looking for a politically opportune time to fold. 

Watch:

Hassett’s comments added to the market’s Monday morning momentum, and sent Polymarket betters into a frenzy as to when the shutdown will end. 

Hassett’s comments aside, the shutdown is currently in day 20 – with no obvious end in sight. 

The top issue is Affordable Care Act subsidies – which Democrats are demanding an extension of a Biden-era pandemic ACA expansion set to expire at the end of the year – arguing that failing to do so would increase healthcare costs for families. 

That said, maintaining the tax credit carries a big price tag – as permanently expanding the most generous benefits would increase the deficit by $350 billion from 2026 – 2035, according to the Congressional Budget Office. 

Lawmakers don’t have much time, however, as around a dozen states have published ACA heal insurance prices for 2026 which show many premiums skyrocketing unless Congress extends. By next week, dozens of other states will reveal pricing for next year.

Tyler Durden
Mon, 10/20/2025 – 09:55

Judge Who Approved Mar-a-Lago Raid Once Shared Office With Jeffrey Epstein

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Judge Who Approved Mar-a-Lago Raid Once Shared Office With Jeffrey Epstein

Authored by Ken Silva via HeadlineUSA (emphasis ours),

U.S. Judge Bruce Reinhart, who issued the warrant for the FBI’s raid on President Donald Trump’s Mar-a-Lago home in 2022, once shared office space with deceased sex trafficker Jeffrey Epstein, according to newly revealed records.

Bruce Reinhart / IMAGE: @mazemoore

Some of Judge Reinhart’s links to Epstein have long been known. Reinhart worked for the U.S. Attorney’s Office Southern District of Florida while that branch was prosecuting Epstein for sex crimes in the mid-2000s, and he left that office to work for Epstein in January 2008—more than six months before the Justice Department’s plea deal with Epstein was finalized.

But that’s not all. On Friday, the House Oversight Committee released a transcript of its interview with former U.S. Attorney for the Southern District of Florida Alex Acosta, who signed off on the Epstein plea deal. That transcript reveals that Judge Reinhart not only worked as an attorney for Epstein; he shared office with the deceased sex trafficker.

Indeed, Reinhart incorporated his private practice, Bruce E. Reinhart P.A., on Oct. 23, 2007, listing his address at 250 Australian Ave. South, Suite 1400, West Palm Beach, Florida. Exactly one week later, Epstein incorporated an organization called the Florida Science Foundation at the same address, which is also the office of his former lead attorney, Jack Goldberger.

Epstein would go on to work at the Florida Science Foundation on work-release while serving his 13-month sentence in 2008 and 2009—what’s widely been described as a “sweetheart” plea deal—for procuring a child for prostitution.

When House Oversight Committee investigators presented this evidence to Acosta last month, he expressed surprise.

So you’ve just disclosed something that I did not know,” Acosta said. “I knew that he had left to work for Epstein while this case was pending. I did not know that he is the one that filed these articles of incorporation.

Acosta also said it was unethical for Reinhart to have incorporated his private law practice while he was still working for the DOJ.

Most of the House Oversight Committee’s interview with Acosta focused on the plea deal his office granted Epstein. Acosta served as Trump’s Labor Secretary from 2017 to 2019, resigning after his role in the plea deal was thrust back into the public spotlight when Epstein was arrested again in July 2019.

Acosta has defended the plea deal on the grounds that it did result in Epstein’s incarceration and registration as a sex offender.

During his interview with the House Oversight Committee, he said taking Epstein to trial would’ve been a “crapshoot.”

He also blamed Epstein’s work-release on local authorities.

“He obtained work release from the Palm Beach sheriff under a factual situation that’s sketchy at best,” Acosta said. “I don’t remember all the details, but I think his work release was at an institution that had just been incorporated, or something along those lines. That was the Palm Beach sheriff’s decision.”

Ken Silva is the editor of Headline USA. Follow him at x.com/jd_cashless.

Tyler Durden
Mon, 10/20/2025 – 09:40

Don Lemon Urges ‘Black And Brown’ Americans To Arm Themselves Against ICE

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Don Lemon Urges ‘Black And Brown’ Americans To Arm Themselves Against ICE

Authored by Luis Cornelio via HeadlineUSA,

Disgraced former CNN host Don Lemon urged “black” and “brown” Americans on Wednesday to take up arms, warning they could be swept up in President Donald Trump’s ICE operations. 

Don Lemon / IMAGE: CNN via YouTube

He made the incendiary claim during a podcast interview with Wajahat Ali, citing the small number of cases involving U.S. citizens being briefly detained by ICE in cities like Chicago. 

“I just want to be very clear here. I am not condoning or promoting violence,” Lemon began, before invoking the Second Amendment. “Here’s what I’m saying to black and brown people, to Mexican people, to people who are here legally and who can go and buy a gun legally and have a license to carry legally: Go do it! Why not? Go do it! It is your Second Amendment right.” 

Lemon then urged “black households,” “Indian Americans,” “Mexican Americans,” and, as he put it, “whatever you are,” to purchase firearms legally, claiming the show of force could discourage the Trump administration from conducting immigration raids. 

“Get a license to carry legally,” he said. “Because when you have people knocking on your door and taking you away without due process as a citizen, isn’t that what the Second Amendment was written for?” 

He continued, “Go back and read what the Second Amendment says. And perhaps it will knock some sense … in the heads of these people who are saying: ‘Well, it’s all great. I don’t believe they’re doing it without due process. They’re asking people for papers. They’re not really beating people up. These people are doing things that are illegal.’”  

Lemon’s comments come amid the legacy media’s fixation on rare cases of American citizens briefly detained during ICE raids, most of which are quickly clarified or resolved. 

White House border czar Tom Homan has repeatedly clarified that ICE conducts only targeted operations focused on individuals with existing deportation orders. However, illegal aliens without such orders, as well as citizens lacking proper identification, may be temporarily detained if swept up during these raids. 

When reached by email, Lemon could not provide evidence of any widespread targeting of U.S. citizens by ICE by the time of publication. 

Watch Lemon’s full remarks below:

Tyler Durden
Mon, 10/20/2025 – 09:00

EU Capital Markets Union: Germany’s Merz Calls For A “Wall Street” For Europe

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EU Capital Markets Union: Germany’s Merz Calls For A “Wall Street” For Europe

Submitted by Thomas Kolbe

In the German Bundestag, Friedrich Merz appealed to the EU to integrate the fragmented European capital market more deeply and reduce bureaucratic hurdles. His vision for the next step: a kind of Wall Street for Europe.

German Chancellor Friedrich Merz used his government statement on Thursday to take a strategic look at what he called the “fragmented and over-bureaucratized” European stock and capital market landscape. His stated goal: the completion of the Capital Markets Union.

“We need a kind of European Stock Exchange, so that successful companies like BionTech from Germany don’t have to go to the New York Stock Exchange,” Merz said. “Our companies need a sufficiently broad and deep capital market to fund themselves faster and more efficiently.”

Keeping Value Creation in Europe 

The Chancellor linked this call to a strong appeal to the European Commission for consistent de-bureaucratization of the fragmented European capital market. Only in this way, he stressed, will the value created from German and European research truly remain in Europe. Only then can societal wealth grow via the capital market, Merz argued.

The debate is fueled by the growing trend of European innovative companies raising capital on U.S. exchanges. Recent examples include Linde, Birkenstock Holding, and BioNTech – firms that chose Wall Street listings over domestic options.

This discussion fits into a broader financial context: the integration of European financial and capital markets. A far-reaching harmonization of financial hubs and access to capital would not be a mistake. Currently, there are around 15 securities exchanges in the Eurozone. The two largest operators – Euronext N.V. and Deutsche Börse AG – together handle about 80 percent of the annual €8 trillion equity trading volume.

Ending Capital Flight 

Merz’ initiative stands not only for institutional reform but also as an attempt to free Europe’s financial markets from self-imposed regulatory constraints.

The Chancellor emphasized the importance of better financing for innovative startups in high-tech future industries. Experience shows, however, that these companies tend to rely on venture capital – and they have no difficulty listing on international exchanges like Frankfurt or London.

The real question for Brussels and Berlin is whether focusing on a new financial hub alone is enough to prevent visible capital flows from Europe to the United States.

Germany alone lost around €64.5 billion last year due to capital flight – a symptom of deeper issues: an overbearing regulatory framework from Brussels and EU capitals, excessive fiscal burdens, and an escalating energy cost crisis.

The Real Target 

These are fundamental economic imbalances that cannot be resolved simply by creating a European mega-exchange. They are homegrown design flaws – at the heart of today’s economic crisis.

In reality, the debate over the Capital Markets Union is about something else entirely: the European Commission’s strategic goal to consolidate member state debt under its roof. This would give Brussels greater financial clout through regular EU bond issuances. More centralization in Brussels, less national oversight – the dream of the Brussels power center.

The EU is gradually moving toward a paradigm shift in debt financing. Originally, the Commission was strictly prohibited from financing itself via market issuances. That red line has long been crossed.

The COVID lockdowns provided a lever to launch NextGenerationEU, an unprecedented €800 billion debt program. This money largely financed national deficits, with the Commission acting as a market borrower, backed by the European Central Bank.

Brussels Is Already Active in the Market 

It is no secret that Brussels wants to expand this model. The Ukraine conflict serves as a convenient pretext to issue new joint debt under the media-amplified threat of Russian aggression. Chancellor Merz has already indicated this spring that EU-wide borrowing for defense purposes is not off the table – but only for “absolute exceptional cases.”

Merz deliberately avoided the term “Eurobonds,” just like Ursula von der Leyen, who in her State of the Union speech on September 10 circumnavigated the term, instead proposing a common European budget for “European goods.”

The signal is clear: we are in a transitional phase where old debt rules are being gradually loosened, and the centralization of debt issuance in Brussels is systematically advanced.

Euroclear as an Anchor 

This aligns seamlessly with thinking about a shared European exchange – potentially hosted by Euroclear in Brussels, the central player in the safekeeping and settlement of Eurozone securities. A serious move would also consider relocating the European Central Bank to Brussels for fast debt issuance.

The EU’s response to the looming debt crisis is obvious: a much higher degree of centralization. Activating capital that can be leveraged to expand debt becomes strategic; the exchange consolidation is just a secondary concern.

This also ties into the debate over using frozen Russian assets at Euroclear. The goal: collateralize a portfolio worth around €200 billion, largely expired European sovereign bonds, to finance reparations loans to Ukraine. Brussels is searching for credit collateral, regardless of origin.

Tyler Durden
Mon, 10/20/2025 – 05:20

Internet Outage Sparked By “Operational Issues” At Amazon AWS Data Centers In Northern Virginia

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Internet Outage Sparked By “Operational Issues” At Amazon AWS Data Centers In Northern Virginia

A massive internet outage is being reported at the start of the new workweek. The problem appears to be originating from Amazon Web Services (AWS), which provides infrastructure that powers much of the modern internet.

AWS’ Service Health Dashboard shows “operational issues” in its US-East-1 region (Northern Virginia), one of its largest data centers.

What’s happening:

  • Several AWS services, including DynamoDB and others, are experiencing slow performance (high latency) or failures (high error rates).

Impact:

  • Apps and websites that rely on AWS may be loading slowly, timing out, or not working at all.

  • Users may be unable to create or update support cases through AWS’ help system.

  • Widespread slowdowns and outages are being reported across major platforms that depend on Amazon’s cloud, including Snapchat, Roblox, Amazon Alexa, Fortnite, Ring, Robinhood, Venmo, Lyft, and many others.

There’s no official statement yet on what sparked the outage at AWS’ Virginia data centers.

Developing.

Tyler Durden
Mon, 10/20/2025 – 04:54

Shell’s Fuel Shortage In Indonesia Proves The Next Era Is Electric

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Shell’s Fuel Shortage In Indonesia Proves The Next Era Is Electric

Around 200 Shell outlets in Indonesia have run out of gasoline after domestic supply disruptions tied to state oil giant PT Pertamina and a sweeping corruption probe, according to Bloomberg.

Rivals such as BP AKR and Vitol’s Vivo have also been empty for weeks. Lines now snake through Pertamina’s own stations, the only ones still reliably selling fuel — though “neither drivers, nor private competitors, trust the quality of the product it offers.” Shell decided in May to leave the retail market altogether.

A century ago, Indonesia was among the world’s great petroleum producers. A deal between a London trader and a Dutch oilfield operator in Sumatra led to the founding of what became Shell in 1907. But the nationalization of its Indonesian arm in 1957 created Pertamina, which soon became a symbol of both wealth and graft. Under General Ibnu Sutowo, who ran the company until 1976, Pertamina collapsed under billions in debt and became shorthand for elite excess.

Bloomberg writes that since those glory days, output has fallen by two-thirds while the population has doubled to 283 million. Indonesia now imports much of its refined fuel, consumes more gasoline than Germany, and boasts one of the world’s largest vehicle fleets — mostly scooters. As ever, the profits have flowed toward insiders. Suharto-era cronies dominated oil trading in the 1980s, and protests over fuel prices helped bring down his regime in 1998.

Promises of reform have repeatedly failed. President Joko Widodo once vowed to dismantle the “oil-and-gas mafia,” but corruption endured. This February, President Prabowo Subianto’s government launched an investigation into allegations that $11.9 billion was siphoned from Pertamina between 2018 and 2023 — largely by diluting premium gasoline with lower-grade fuel, damaging countless engines in the process.

Distrust has driven consumers to private retailers such as Shell, BP, and Vivo. Yet import restrictions prevented these firms from meeting surging demand. They were forced to seek extra supplies from Pertamina — and, wary of contamination, often refused delivery. The result: a nationwide fuel drought.

The chaos is accelerating Indonesia’s quiet electric revolution. Battery-powered vehicles already command more than 14% of the market, thanks to cheap electricity and falling prices. The top-selling electric scooter, the Polytron Fox R, costs roughly two-thirds as much as its gas rival, Honda’s BeAT. Even with limited public charging, private swap stations and home outlets are filling the gap.

This could be a story of renewal: a vast, resource-rich nation pivoting toward clean, affordable energy. But that future depends on loosening the grip of a fossil-fueled elite that’s profited from dysfunction for decades. As long as Pertamina’s monopoly endures, innovation will struggle to breathe.

Indonesia’s gasoline crisis mirrors the public anger spilling into its streets — both driven by a collapse of trust in the state. If President Prabowo wants to get ahead of that, he should use the EV boom to open the market and curb Pertamina’s dominance, “acting as ruthlessly as his predecessor Widodo did in liquidating its scandal-plagued trading arm back in 2015.”

The kleptocratic habits of the Suharto years have no place in a modern democracy. The well has run dry; the future, unmistakably, is electric.

Tyler Durden
Mon, 10/20/2025 – 04:15

The Rise & Rise Of AfD: Exploring The Unprecedented Political Dumbassery Afoot In The Federal Republic

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The Rise & Rise Of AfD: Exploring The Unprecedented Political Dumbassery Afoot In The Federal Republic

Authored by ‘eugyppius’ via A Plague Chronicle,

The firewall is making AfD the strongest party in Germany, artificially empowering the left and destroying the centre-right, who alone can lift it

There’s a subtle, little-discussed but very bizarre political phenomenon that has interested me ever since I started blogging and paying serious attention to politics.

I first noticed it during Covid. Back in those dark days, virus understanders sold measures like lockdowns and masking to the public first as a means of keeping hospitals at capacity by slowing virus infections, then as a means of slowing virus infections just because, and finally as rituals that we had to do more of whenever infections rose, regardless of what effect they had on anything. Mass vaccination followed a nearly identical arc. At first the vaccinators said everyone had to be vaccinated to stop the virus, but by late Autumn 2021 they wanted to vaccinate everybody as much as possible because reasons. In both cases you could see, in real time, the ends towards which we were striving regressing, until finally the means became unquestionable ends in themselves.

I propose to call this phenomenon endification, and I think it is very significant.

It seems to happen whenever you mobilise large, complex systems towards goals that sooner or later prove unattainable. As these goals pass out of reach but the system remains mobilised, basic understandings of what we are even trying to do shift. The erstwhile means become almost sacred, worthy of pursuing in themselves, often for moral reasons. This can go on for a very long time even though it makes no sense and is painfully retarded.

Germany seems especially prone to endification, probably for cultural reasons stemming from our pathological commitment to thoroughness.

We have to do things longer and harder than everybody else, always with an aura of breathless moral urgency and self-importance. Imagine shades of Covid idiocy happening in many different political domains all the time. Our climate policies have long since become endified, the nuclear phaseout was endified and many aspects of mass migration have been endified.

The brings me to the crazy and ridiculous firewall against the AfD – the unending Antifa-enforced political tabu upon achieving anything with AfD votes at the state or federal level. AfD support is held to be contaminating, regardless of whatever it is the AfD happen to be supporting. It can turn even the most ordinary routine legislation into dark evil malicious fascism.

The firewall against the AfD splits the right and so it is a great gift to the left.

For example, it’s the only reason the SPD has a say in the federal government after their disastrous showing in the traffic light coalition. It’s the only reason the left is still a force in East Germany outside Brandenburg at all. Should we get new elections, the firewall will probably bring the Greens into government too. If it didn’t exist, the left would have to invent it, that is how well the firewall is working out for them.

The AfD also benefits enormously from the firewall, even though it’s not of their making. The last ten years of German politics have been one unending nightmarish festival of failure and stupidity.

All the establishment parties have taken turns implicating themselves in this amazing shitshow, while religiously sparing the AfD any association with their unprecedented failures. The firewall lends truth to the AfD’s name; it has allowed Alternative für Deutschland to become the only conceivable political alternative in Germany. As things get worse and voters grow more desperate for alternatives, the AfD just becomes stronger. The firewall is an AfD-maximising machine.

The firewall is only really bad for the people who invented it and who alone have the power to end it. I speak here of the centre-right Union parties, the CDU and the CSU. They maintain the firewall not because it helps them or because it is a good idea or even because the AfD are evil fascists, but because the firewall has been endified.

In 2018, when the CDU first set up the firewall, it had a coherent purpose. It was supposed to be a means of keeping the AfD small by dissuading CDU supporters from defecting to their upstart rival. CDU leadership had seen how the rising Green Party ate into the support of the SPD after reunification, and they thought they could prevent the same thing from happening to them. They would have been better off doing nothing at all, because after seven years of firewall the AfD are stronger than the Greens ever were. The whole thing has become a lesson in why you should avoid heavy-handed interventions in complex systems and just govern pragmatically with whatever majorities are at hand.

Let us survey the damage: The firewall has helped the AfD supplant the CDU as the standard right-of-centre party across the entire East. In Mecklenburg-Vorpommern and Sachsen-Anhalt, the Evil Hitler Fascists are within striking distance of outright majorities. Ballooning AfD popularity is fuelled by the failures of Merz’s federal government, where the firewall has locked the Union into a doomed coalition with the radicalised and hostile Social Democrats. The SPD have so far obstructed all major federal initiatives, probably for the purpose of hurting the CDU still further and driving them into the arms of the AfD. It is a strategy the left first tried during the federal election campaign, and one they have so far refused to abandon.

Various preeminent Union personalities, eager to stop the destruction of their party, have demanded a change in course. These firewall-rethinkers include former CDU General Secretary Peter Tauber – the very man who played a leading role in devising the firewall strategy in the first place. Shortly after Stern published Tauber’s mild and very careful dissent, a series of CDU politicians from East Germany lined up to say that they, too, would desperately like to see a new approach to the AfD. As I type this, CDU leadership have withdrawn for a highly secret meeting to discuss this dilemma and how they will deal with the AfD in the future.

Alas, endification is a powerful force. You can’t just turn it off. Chancellor Friedrich Merz, whose political instincts rival those of most earthworms, has used the days and hours ahead of this meeting to sing the praises of the firewall. In response to a journalist’s question last Tuesday, Merz intoned absurdly and for no reason at all that “We are the firewall!” And yesterday, at some political event in Sauerland, he ruled out cooperation with the AfD in any form – “at least not under me as party leader of the CDU.” Merz further claimed that “there is no common ground between the CDU and the AfD” and complained that AfD opposition to the European Union, NATO and the European Monetary Union means that the party “is against everything that has made the Federal Republic of Germany great and strong over the past eight decades.”

An inability to articulate why we have to keep doing a senseless thing, and the proliferation of obviously fake reasons for said senseless thing, are among the most telltale symptoms of endification. Thus I invite you to appreciate how dumb Merz’s arguments are:

Whatever they got us in the past, EU initiatives and NATO-driven foreign policy are killing German industry. EU rules are presently blocking our attempts to increase natural gas power generation, without which our electricity grid will become totally unstable. The EU’s expanded Emissions Trading System (ETS2) from 2027 is set to make heating and transportation wildly more expensive than they have to be for zero reason. None of this is making Germany strong, but that’s not even the half of it. Lest you hope too hard that the AfD can fix any of this, you must remember that they can only govern federally with the CDU, and the Union will never go along with dropping the Euro, withdrawing from the EU or leaving NATO, even if the AfD were clearly demanding these things (which they’re mostly not). Merz’s objections are entirely moot.

The firewall has caused an enormous amount of potential energy to accumulate in the German political system. Only three resolutions are conceivable:

1) The CDU convinces the SPD or other partners on the left to implement some bare minimum of the reforms necessary to slow or even stop deindustrialisation, rein in the runaway costs of the social welfare state and do something about mass migration. This would reduce AfD support, particularly in the West, and ease pressure on the party system more generally.

2) The left parties goad the Union into successfully requesting that the Federal Constitutional Court in Karlsruhe ban the AfD. In an instant, the SPD, the Greens and Die Linke would have de facto majorities not only in the Bundestag but across the state parliaments. After this judicial revolution, we would probably find ourselves in a second DDR-style regime, ruled by an unpopular, threatened and highly repressive left.

3) The firewall breaks down and after a substantial internal struggle, the CDU pursues some form of cooperation with the AfD federally. The left parties would turn on the Union across Germany, and the CDU would have to seek outright coalitions or toleration arrangements with the AfD in many state parliaments too. The political realignment would happen suddenly, in less than a few months.

Of these three possibilities, 1) seems stupid and inconceivable. If the left were committed to governing with the Union, they would already be doing that. The nightmare disaster of 2) can only happen if the Union are dumb enough to let it, which indeed is possible, but I still favour 3) as the most likely outcome. At some point, in a way that is as yet unimaginable to us, the firewall will probably come down. The sooner this happens, the better it will be for the CDU. As the Union dithers, they are losing ground they may never regain and all the while more explosive energy is accumulating in the party system.

If Union leadership were minimally rational, they would stop making public statements about how bad the AfD are and begin preparing this strategic shift behind the scenes, with all the bullying, bribing, threatening and coaxing that will require. Ten years of AfD demonisation have made this a mammoth task. But they are not doing that, because endification has made them stupid. They have to make things much, much worse for themselves first, only to end up in the same place two or three years later than they would’ve otherwise – poorer, weaker and worse off.

Tyler Durden
Mon, 10/20/2025 – 03:30