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Via Middle East Eye

As renewed attacks between Iran and the US expand into Iraq and Yemen, the Hamshahri daily, which has close ties to the Islamic Revolutionary Guard Corps (IRGC), has dedicated its front page to a report on the force's speedboats in the Gulf.

On Wednesday, the daily described the boats as the "winning card in the Persian Gulf" and said they are one of the main elements of Iran's deterrence against an expansion of US attacks. "The fleet has become one of the most complex challenges facing American forces in the Persian Gulf over the past two decades by relying on the 'swarm attack' tactic. It has also served as Iran's strategic tool in the Strait of Hormuz over the past five months," Hamshahri wrote.

According to the report, Iran's naval strategy is based on developing small, high-speed, low-cost boats in large numbers. Rather than competing directly with larger fleets, the strategy aims to increase the enemy's costs and limit its freedom of action.

On the role of the boats in keeping the Strait of Hormuz closed, Hamshahri added: "The combination of speedboats, naval mines, cruise and ballistic missiles, and drones has completed the puzzle of Iran's strategic encirclement of the Strait of Hormuz."

Brigadier General Hossein Alaei, the first commander of the Islamic Revolutionary Guard Corps (IRGC) Navy and a former Iranian defence official, has joined political figures calling for an end to the war with the United States, saying Iran's true victory lies in restoring peace and stability.

Alaei, who served as a senior IRGC commander during the Iran-Iraq War (1980–1988), commented on the conflicts launched against Iran by the United States and Israel since June 2025.

"In war, while it is true that Iran defends itself, stands firm, and strikes back at its enemy, the very existence of war is to the detriment of the Iranian people," he said.

The former IRGC commander also criticized the collapse of the memorandum of understanding (MoU) between Iran and the United States. He described the agreement as a complete victory for Iran and a defeat for Israel. "In this agreement, we gave up virtually nothing," Alaei said.

"The US believes it has stripped, damaged and destroyed Iran's nuclear program. The maximum we have conceded is that we will discuss the nuclear issue in the future, while from the beginning Iran's position was not to possess nuclear weapons."

Iranians sing "Bella Ciao" to mock the Americans while cruising through the Strait of Hormuz, as a vessel waits in the background for permission from the IRGC to pass. pic.twitter.com/C08QEKkFWn

— The Saviour (@TheSaviour) July 26, 2026

He also said the agreement had put pressure on Israel to halt its military strikes on Lebanon. "Israel wanted to strike Lebanon every day; through this agreement, we stopped Israel's daily attacks on Lebanon. This is a very big victory," he said.

While hardline factions in Iran have called for an end to all negotiations with the United States and for the war to continue since military clashes resumed on July 7, some figures from the older generation of the IRGC, including Alaei, are advocating an end to the fighting.

Update (1130ET): The Wall Street Journal reports that Situational Awareness, the highflying artificial-intelligence-focused hedge-fund firm, sold the bulk of its stock portfolio to Ken Griffin's investment firm Citadel after suffering deep losses, according to people familiar with the matter.

*  *  *

Update (1000ET): Situational Awareness has exited all of their public investments, CNBC’s David Faber reports on air, citing people familiar with the situation.

Faber reports that the liquidation was done “through one enormous trade."

Roughly two-thirds of the assets under management at Situational Awareness were public equities, both that he owned on the long side and that he was shorting, Faber says.

That could help explain the panic bid in Nasdaq this morning, as investors may believe the overhang from this unwind is over...

...do you really think that Leopold was the only 'smartest man in the room' that was using TRS to massively lever into momentum?

*  *  *

In 2020/2021, one fund almost single-handedly used massive amounts of leverage to drive several big media and tech stocks dramatically higher.

That fund - Archegos - run by the now infamous Bill Hwang - used Total Return Swaps (TRS) to build massive levered positions on the back of de minimus capital (and even more notably, without everyone seeing how much he really owns because these were 'off-balance-sheet' swaps).

For a while, everything was awesome.

The prime brokers were earning their interest and Archegos was making bank, Hwang was a genius, as the shares rose on the back of their own virtuous buying circle.

But then, one day in March 2021, one of his big stocks (ViacomCBS) suddenly drops a lot because the company sold more shares.

The banks came knocking for some more collateral to cover the losses (which were huge due to the leverage), but Archegos didn't have the cash (and they had been using TRS from a number of brokers - none of which knew about - creating a systemic crisis). 

The prime brokers were forced to liquidate the holdings (first one to sell wins), and the result was the escalator up in shares became an elevator down (see chart above) in a number of the names that Archegos was holding.

Since then we have had a few scares, but in general, banks have improved their risk management process (a number of risk managers were fired over Archegos).

But, the money that primes can make from the interest and the incessant momentum of the AI bubble perhaps became too much to miss out on... especially when you know other competitors are doing 'the thing'.

All of which brings us to the last month...

About six weeks ago, we raised a big red flag that something was going on as soaring funding costs suggested the banks were offering significant leverage...

Unprecedented surge in S&P funding costs by dealers lending out futures and Total Return Swaps (remember Archegos) to institutional clients. Think of it as lending costs for long positions. pic.twitter.com/x9KQu4r9MK

— zerohedge (@zerohedge) June 15, 2026

The last few weeks have seen dramatic unwinds of a number of the highest-flying AI-related names (and the total collapse of momentum)...

Put those two things together and we smelled a TRS-Tantrum.

Overnight, we may have found the first culprit caught in this over-levered trap.

Situational Awareness, a hedge fund launched by former OpenAI employee Leopold Aschenbrenner that manages around $20 billion, is seeking new money after facing losses linked to declining AI stocks, the Financial Times reported.

Situational Awareness (SA) said in an investor letter dated July 24 outlining its half-year performance that it had "not been immune" to the market moves, including in Asia, but added that the dynamic had created opportunities for investment, the FT reported. The hedge fund was up 439% on a net basis this year through the end of June, the paper said. 

The fund engaged existing investors and lenders in discussions on raising capital, according to the FT, which cited unidentified people briefed on the matter.

“PS. At times we call out opportunities that seem like a particularly good time to add funds, if you have been waiting for one,” he said in the investor letter, seen by the FT, which was sent in recent days and offered the ability to invest new cash on August 1.

Some investors have been offered the option to purchase assets in its portfolio, the newspaper added.

The talks were described as ad-hoc by one of the people.

As Bloomberg reports, some of the fund’s largest holdings have slumped in recent weeks.

Shares of AI-focused cloud platform Nebius Group NV, in which the fund disclosed a multi-billion-dollar position in May, have dropped 48% from a peak last month, wiping around $35 billion from the company’s market value.

In March, Situational reported a large position in Sandisk Corp., which has fallen 56% in just over a month, and another in SharonAI Holdings Inc., which is down by a similar margin since mid-June.

Do those charts look familiar?

Look again at the PARA chart at the top - pumped and dumped by Archegos.

CNBC's David Faber reported this morning that several of the firm’s prime brokers - including Bank of America, Goldman Sachs and JPMorgan Chase - have been working with the fund as it seeks to meet margin requirements or reduce positions in an orderly fashion, according to people familiar with the discussions.

The brokers have been marketing a group of the firm’s holdings on both the long and short side for sale prior to today’s start of trading, according to people familiar with the situation.

These reports have been denied by the fund.

Martin Shkreli (consider the source), confirms that SA is down 50% MTD and that Goldman is liquidating...

Rumors:
SALP down more than 50% MTD
SALP was up 200% YTD and is now down more than 30%
GSCO has liquidated some SALP positions

Source: Godel News
*want to be clear we wish SALP well and hope all of our clients and non-clients do great. just reporting what we're hearing. https://t.co/zcmVNNCK94

— Martin Shkreli (@MartinShkreli) July 29, 2026

In around 15 days, the next set of 13Fs will drop and we will discover which dealers have the most TRS exposure on their books.

As a reminder, Bill Hwang was sentenced to 18 years in prison...

Another alleged Russian projectile has breached NATO airspace, which resulted in Polish warplanes being scrambled as they prepared to shoot it down.

However, what's been declared a probable Russian ballistic missile crashed to the ground in an uninhabited field in eastern Poland, leaving a huge crater and scattered debris in its wake. Some European outlets have more simply called it an 'unidentified object'.

Polish Prime Minister Donald Tusk on Thursday addressed the overnight incident while visiting the impact site, saying, "All the indications are that it was a Russian Kh-101 ballistic missile, but we want to be 100% certain about the type of missile and who launched it."

"There was no direct threat because the missile landed in an uninhabited area. We were ready to shoot it down had it continued its flight," he added.

The operational command of Poland's armed forces said that "a helicopter crew located the probable crash site of the object in an undeveloped area near the village of Tarnawa-Kolonia in Lublin province," after it was seen at 3:40am local time.

"Officers discovered a crater and scattered debris from an unidentified object in a field located about 2 kilometers from the nearest buildings, between the villages," local police also stated on X.

There were reports of Polish air sirens sounding in some border areas overnight, given that across the border in Ukraine Russia was busy launching another major drone and missile attack.

President Zelensky addressed the huge scope of the latest overnight attacks, describing that at least eight people were killed across the country, with dozens more injured. 

The attacks focused on the capital and another nine regions, he said, reaching as far west as Lviv region. In all the military said it intercepted by various means 265 drones and 55 missiles, while "preliminary information" indicated 11 missiles and 17 drones impacted across 20 sites.

"In a situation where we critically lack missiles for air defense from our partners, our soldiers are doing the seemingly impossible, demonstrating a very high level of professionalism," Zelensky stated. "This extraordinary expertise saves lives when the supply of missiles for air defense systems is insufficient or delayed."

As for these breaches of European or NATO airspace, which is spillover from the Ukraine war, there's been an uptick in these of late.

The sound of a Russian Kh-101 cruise missile impacting near the village of Targowisko, eastern Poland, this morning.

In the video, you can hear the missile releasing two sets of flares as a countermeasure against air defence systems, confirming it was still intact up to one… pic.twitter.com/5FLhfTqx3L

— AMK Mapping ???? (@AMK_Mapping_) July 30, 2026

In prior recent instances of drones entering neighboring airspace, particularly in Baltic countries and also Poland, NATO jets were scrambled - and in some cases drones are safely brought down via electronic intercept means.

But each instance creates new tensions between Russia and NATO, and the typical accusations and threats then fly. The Kremlin has of late been especially alarmed at the Trump administration transferring 5,000 US troops from Germany to Poland, near Russia's doorstep.

By Bas van Geffen, senior market strategist at Rabobank

The Houthis are considering charging fees on vessels sailing through the Bab el-Mandeb Strait. Reuters reported that the plan was discussed with Iran’s leadership, who have offered help to set up an authority to collect the toll.

Besides the potential revenue source, the aim of the Bab el-Mandeb fees would reportedly be to normalize the idea of charging fees on international waters.

But freedom isn’t fees. President Trump has repeatedly rejected the idea of Iran levying a toll in the Strait of Hormuz, so why would the US president accept such a plan in any other strait? European countries have also vehemently opposed that idea. Moreover, the Houthis indicated that Chinese vessels would be exempted from these fees – creating a clear split in the freedom of navigation for different camps. So, the plan could also be used to put further pressure on the US and its allies.

The US has, meanwhile, stepped up its attacks against Iran, in retaliation for the Iranian strikes on its military bases Jordan. According to the Wall Street Journal, Trump has been briefed on a two-week campaign of air strikes that could impact Iran’s missile capabilities. However, Iran managed to recover relatively quickly after operation Epic Fury.

Moreover, according to press reports, China is sending hundreds of rocket launchers to Iran. The shoulder-fired weapons are harder to take out, due to their mobility. And these mobile air defences make any US campaign more difficult and riskier.

The potential implications of the weapons sale reach far beyond the Middle East. China’s support for Iran could indicate that Beijing is hoping to use this as a proxy war or a war of attrition against the US – with reports of dwindling weapons stockpiles. Or, at least, to expose the US’s vulnerabilities.

At the very least, the arms deal goes against President Xi’s promise to Trump not to supply any weapons to Iran. That, in turn, could perhaps cause the White House to reconsider its own arms deliveries to Taiwan. President Trump paused these deliveries after meeting with Xi in May.

The renewed escalation in the Middle East is putting some upward pressure on energy prices again. Brent touched $93 per barrel this morning.

Despite the ongoing inflation risks from the Iran war, the Fed refrained from any policy action. However, the Fed’s “family fight” did cause a big split between the central bankers: three FOMC members cast a dissenting vote, favoring a rate hike instead.

These dissents clearly demonstrate that support for a rate hike is building. That should keep market speculation of a rate hike alive in the coming weeks. We acknowledge that the risk of a rate hike in the coming months has increased, but we still believe that the Fed is more likely to stay on hold through 2026.

The policy statement was largely identical to last month’s, and Chair Warsh talked a lot about the FOMC’s commitment to meeting its 2% inflation target. However, the lack of policy action may have damaged Warsh’ inflation fighting credentials yesterday. Long-term US yields rose after the policy decision: the 30-year yield hit a 19-year high in Asian trading and remains above 5.2%.

Carvana shares plunged in premarket trading after the online used-car retailer issued full-year earnings guidance that may fall short of Wall Street expectations, as vehicle sales growth slowed and profit per car declined. The outlook raises questions about whether Carvana's rapid expansion can justify its high stock valuation.

Carvana reported a record second-quarter adjusted EBITDA of $769 million, narrowly beating the $766.2 million consensus estimate among analysts tracked by Bloomberg, as vehicle sales rose 38% to more than 197,300. Still, sales growth slowed to its weakest quarter since 3Q24, while gross profit per unit declined, suggesting margin pressures remain a major problem.

"This marks 10 straight quarters of being the fastest-growing and most profitable automotive retailer — achieving both by large margins," CEO Ernest Garcia wrote in a letter to shareholders. "We have said that we believe the biggest driver of our results for the foreseeable future will be our execution, and we still believe it."

The online used-car retailer forecasted full-year adjusted EBITDA of $2.7 billion to $3 billion, with the midpoint below the Bloomberg Consensus estimate of $2.99 billion.

Barclays auto analyst John Babcock commented on the earnings:

2Q26 Review: Guidance not as hoped, but we think there is more upside risk

CVNA 2Q26 adj. EBITDA below Barclays, just above Street. 2026 EBITDA guidance ($2.7-$3.0bn) in-line to below Street forecasts and likely disappointed investors seeking upside levers. However, we think there is more upside risk to our forecasts. We maintain OW rating with new PT of $93.

Carvana shares fell about 8% in premarket trading. The year-to-date decline through Wednesday's close stands at around 21.5%. The stock has remained range-bound for 13 months, repeatedly bouncing between resistance near $80 and support around $60.

Here is what other Wall Street desks are saying, courtesy of Bloomberg:

Bloomberg Intelligence

• "Carvana is likely to favor market-share gains over near-term margin expansion in 2H as management prioritizes scale, inventory and customer reach"
• "Lower customer financing rates are supporting demand but weighing on near-term economics before inventory fully catches up and conversion improves"

Morgan Stanley (overweight, PT to $90 from $102)

• Following results, trimming estimates on lighter financing gross profit per unit (GPU)
• "Every GPU-specific question was met with directional color, and management declined to offer quarter-specific or line-item- specific guidance"

JPMorgan (overweight, PT $100)

• Carvana reported a mixed quarter, with 2H forecast looking conservative with operational constraints easing.
• Shares are lower as "the company cycles past a combination of internal, external, and tougher y/y comparisons that have impacted the y/y margin profile"

Having collapsed to its weakest relative to the dollar in 40 years, it appears the Ministry of Finance and Bank of Japan has had enough and intervened.

Having tagged 164/USD, the Japanese currency suddenly exploded stronger (below 160/USD, which was the prior level of intervention)...

The scale of the move is commensurate with the last large intervention in April.

Obviously, there is no confirmation, yet, but the timing, coming after the Fed and after Japan markets have closed, would certainly fit what we know about the MoF’s tactics, and that’s why there’s renewed speculation over official action. 

Developing...

The US economy grew at a far weaker than expected pace in the second quarter despite a pickup in consumer spending and solid business investment. According to the BEA, GDP (inflation adjusted) rose just 1.5% in the period, according to the first estimate issued Thursday by the Bureau of Economic Analysis. This was well below the 2.0% median estimate. 

The contributors to the increase in real GDP in the second quarter were increases in consumer spending, investment, and exports that were partly offset by a decrease in government spending. A decline in volatile net exports masked strength in underlying demand as imports, which are a subtraction in the calculation of GDP, increased. Consumer spending, which comprises about two-thirds of economic activity, rose at a 3.2% rate. Business investment continued to boom amid a debt-fueled rush to invest in artificial intelligence.

A closer look at the underlying data:

• Business investment remained a key driver of growth in the second quarter. The massive AI investment push continued to play a critical role as did demand for industrial and transportation equipment. After the Fed decided to keep interest rates unchanged on Wednesday, Chairman Kevin Warsh described the economy’s resilience as “impressive” but noted its “most striking” feature is the strength of business investment. 

  • The GDP report showed nonresidential fixed investment rose at an 8.4% pace. Investment in industrial equipment surged by the most since 2011, and outlays for transportation equipment jumped by the most in two years. Information processing equipment and software outlays rose at a strong, albeit slower rate. 

• Net exports subtracted a percentage point from the calculation of GDP in the second quarter. That likely reflected a mix of factors, including efforts to get goods into the country before a new wave of tariffs and the rapid pace of capital investment. 
• Inventories stripped an additional 0.67% from GDP, suggesting many businesses drew down their inventories during the war.
• Federal government outlays declined, reflecting sales of crude oil from the Strategic Petroleum Reserve, according to the report. But because sales of the oil are reflected in other components of GDP, there is “no direct effect” on GDP. Even so, spending on national defense increased amid the war with Iran. 

Meanwhile, the strength in household outlays was fueled by spending on durable goods like furnishings and motor vehicles. Within services, consumers ramped up outlays on discretionary categories like recreation and food services and accommodation. 

Because swings in trade can distort GDP, economists pay close attention to a narrower metric of underlying demand known as final sales to private domestic purchasers that excludes net exports, changes in inventories and government spending. This measure climbed 3.9% in the second quarter, more than double the first quarter pace and the strongest since early 2023.

As Bloomberg notes, the latest data highlight an economy that’s so far powering through the fallout of the Iran war, while getting the benefit of a historic credit-fueled spending spree behind AI spending. While the conflict has pushed prices higher and weighed on sentiment, a slide in gasoline costs at the end of the quarter alongside higher-than-usual tax refunds and sales promotions helped support household spending.

As reported earlier, more up to date data released on Thursday showed inflation-adjusted consumer spending climbed a robust 0.4% in June, matching the strongest since July 2025. The Federal Reserve’s preferred measure of inflation - the personal consumption expenditures price index - fell 0.1% last month. Excluding food and energy, the index rose less than forecast. 

Looking ahead, Bloomberg notes that the recent flare-up in the Middle East and President Donald Trump’s new tariffs underscore the uncertainty around the outlook. Though the US central bank opted to keep rates unchanged on Wednesday, three policymakers voted to raise borrowing costs amid above-target inflation.

But with layoffs limited, economists generally expect consumer spending to stabilize in the second half of the year. Executives at companies like JPMorgan Chase & Co. and Levi Strauss & Co. have underscored shoppers’ resilience, even as some like PepsiCo Inc. and General Mills Inc. have noted that Americans are growing more discerning in their spending.

Shipping traffic through the Strait of Hormuz slightly increased as US-Iran negotiations remained ongoing in an effort to restore peace after the memorandum of understanding collapsed amid two weeks of tit-for-tat strikes, according to Pakistan's Foreign Ministry spokesperson Tahir Andrabi, who provided no further details.

Still, the security situation in the Gulf deteriorated overnight after the US launched a new wave of strikes on Iran following attacks on US forces in Jordan. Additionally, reports emerged that a US-owned LNG vessel was struck at an Egyptian port.

Bloomberg cited Kpler data showing that fourteen commodity vessels transited the Hormuz chokepoint in both directions on Wednesday, up from single digits the previous week.

Kpler wrote on X:

Hormuz shipping bottleneck endures

A four-day pause in US strikes on Iran has done little to restore Middle East Gulf crude exports. Confirmed clearance remained close to recent lows, while Gulf loading activity fell by more than half for the first time in six weeks. The crude backlog has shifted between the Gulf and the Gulf of Oman rather than disappeared. Persistent maritime security risks, war risk insurance costs and Iranian interdiction now appear to be the main barriers. Offshore ship to ship transfers are helping manage inventories, but not expanding export capacity. For energy markets, physical shipping data remain a clearer measure of supply conditions than geopolitical headlines.

Hormuz shipping bottleneck endures

A four day pause in US strikes on Iran has done little to restore Middle East Gulf crude exports. Confirmed clearance remained close to recent lows, while Gulf loading activity fell by more than half for the first time in six weeks. The crude… pic.twitter.com/e9aZ5cfGCP

— Kpler (@Kpler) July 30, 2026

Qatar's Al Areesh exited the Persian Gulf carrying the country's first LNG shipment in three weeks, while a supertanker was provisionally booked at nearly $500,000 a day to load Gulf crude for China.

US Energy Secretary Chris Wright said about 6.5 million barrels of oil a day moved through the strait over the past week with US support.

"We are using the United States military to escort out oil and gas out of the Strait of Hormuz,” Wright told Bloomberg Radio, saying about 6.5 million barrels of oil a day exited the Gulf via the strait over the past week. "We are restoring supplies of global oil and refined products to the world out of that region."

Maritime Chokepoint Developments:

Strait of Hormuz

• A Norwegian-flagged products tanker appears to be preparing to exit
• Two Iran-linked Suezmaxes, Chloe and Kariz, sailed into the strait and are now idling off Iran's Bandar Abbas
• Very large crude carrier Jamaica Prosperity was provisionally fixed by the shipping unit of a Chinese charterer to pick up a Persian Gulf cargo on Aug. 3 at 465 Worldscale points, or nearly $500,000 per day

Southern Red Sea

• Twenty-one commodity vessels crossed the Bab el-Mandeb strait in either direction on Wednesday, compared to 38 a day earlier: Kpler
• Only Russian crude left via the chokepoint, totaling about 3.5 million barrels, although some vessels may have transited with transponders off
• South Korean-controlled VLCC V Glory seen approaching Gulf of Aden recently before going dark; Saudi-flagged Samha seen doing so on Thursday
• On Wednesday, some ships were provisionally booked to load from Yanbu in August, with the option of exiting via Bab el- Mandeb to reach South Korea

Northern Red Sea

• Two LNG carriers were struck late Wednesday at Egypt's Damietta port near the mouth of the Suez Canal; no one has claimed responsibility yet
• Japanese-flagged VLCC Takamatsu Maru is the latest to divert to Egypt's Sidi Kerir on the Mediterranean coast as a destination from US previously; ship is currently southeast of Africa
• Bidbid and VL Prosperity have arrived at and loading from Sidi Kerir, with previously reported destinations in Asia
• Three VLCCs — Olympic Luck, DHT Gazelle and DHT Mustang — that departed Yanbu are currently idling off Sidi Kerir with no clear destination