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Update(11:19)ET: Amid soaring national diesel products and painfully high prices at the pump, President Trump on Monday announced the Zelensky government has acceded to the US president's prior call to abstain from attacking diesel infrastructure in Russia. He has unveiled what he's presenting as a new Russia-Ukraine energy ceasefire.

Trump says "Ukraine has agreed not to hit Russian Energy targets. Russia has agreed to do, likewise! The World’s Diesel price rise is mostly caused by the Russia/ Ukraine War, not Iran." Clearly high fuel prices are creating immense pressure within the GOP, and Trump is trying to essentially tweet his way out of this war-related mess...

DIESEL FUTURES PARE GAINS, TRADE NEAR $5.04/GAL

Diesel responded immediately...

And also crude...

*  *  *

The Kremlin has welcomed President Trump's weekend call for Ukraine to stop attacking Russian diesel supply and infrastructure sites. The somewhat surprise remarks which will only serve to further pressure the Zelensky government came when pressed by a reporter on Sunday. Trump responded by saying Zelensky "has to do one thing. He has to stop knocking out diesel fuel in Russia."

The US president said at the sidelines of the Irish Open on Sunday, "There are plenty of other targets. Don’t hit diesel fuel, because that’s hurting, that’s hurting the world" - adding that he indeed had spoken to the Ukrainian president about it.

"I've asked Zelensky not to hit the Russian refineries. Diesel is being driven up by the fact that it’s having a hard time coming out of Russia," Trump additionally stated. "That’s a case that hurts the world, and we’ve got to stop it."

On Monday, Putin spokesman Dmitry Peskov was asked about Trump's words. "Of course, one can only welcome any call on the Kiev regime to stop strikes on civilian economic infrastructure," Peskov told a press briefing.

The Kremlin official had been questioned on whether Putin views the US call to refrain from strikes on Russia's diesel-producing infrastructure a positive step toward a settlement of the Ukrainian conflict.

"Any countries can contribute to a settlement in Ukraine by influencing Kiev and pushing it toward flexibility," Peskov said, leaving things somewhat vague. He said that disabling of Saudi Arabia's East-West oil pipeline, which has reportedly knocked more than 4% of global supplies off the market, is cause of serious concern.

"The deterioration of the situation in oil markets cannot but cause concern among global economies," he emphasized. On that front, the Associated Press newly reports Monday:

A crucial Saudi oil pipeline hit in strikes will be mostly out of service for several weeks for repairs, reports AP citing officials

Specifically concerning the status of the 'special military operation' in Ukraine, the Putin spokesman described, "It is becoming increasingly clear to professionals, based on the dynamics at the front lines, that Russia is consistently moving toward achieving its goals in the special military operation."

He vowed: "The dynamics of advances at the front lines of the special military operation will continue; no one should have any doubts about that."

And he explained of the weekend New Delhi-hosted major BRICS summit, "Putin reacted positively to the readiness of the leaders of China and India to contribute to the Ukrainian settlement."

.@POTUS: "I've asked President Zelensky not to hit the diesel plants — refineries... Diesel is being driven up by the fact that it's having a hard time coming out of Russia." pic.twitter.com/G9P3tbsNMQ

— Scott Adams (@scottadamsshow) September 14, 2026

As for Ukraine, President Zelensky over the weekend pointed out that the country's own energy infrastructure has also subject of frequent attack by Russia.

"The Russians are burning warehouses with food and gas stations, pharmaceutical facilities and ordinary passenger trains, residential buildings and civilian businesses," Zelensky stated in a Sept.12 X post.

China's Foreign Ministry and state press had rejected the China provisions of Dario Amodei's essay calling for a 'pause' in AI development, while state security minister and President Xi Jinping laid out what Beijing wants instead.

On Saturday morning, Anthropic CEO Dario Amodei published We Must Pace the Frontier, an essay arguing that the industry must slow the rate at which it improves frontier models and asking Washington to help it do so. By Monday afternoon in Beijing, China's Foreign Ministry responded. 

The essay's three steps, are third-party evaluators with permanent, employee-level access inside the labs, which Anthropic committed to unilaterally; coordination among labs in democratic countries on safety standards and the pace of progress, which Amodei concedes needs a narrow antitrust waiver from the U.S. government; and, eventually, agreements with various governments, including China. It also asks Washington to keep the ban on advanced chips and chipmaking equipment, enforce it against smuggling and remote access to overseas data centers, crack down on distillation, prevent model-weight theft, and use the resulting three-to-five-year window to widen America's lead before any bargain is struck. Sam Altman said OpenAI would match the evaluator commitment. Elon Musk's reaction was three words: "Dario is right."

Amodei himself acknowledged the problem. On CBS on Sunday he called the possibility that China and other adversaries would not slow down the "toughest dilemma" in his proposal.

According to Xinhua, Beijing's Foreign Ministry spokesman Guo Jiakun said on Monday that the development of AI bears on the well-being of all humanity and that all parties should jointly promote its open and inclusive development for good and for all. He added: "Fearmongering, confrontation and vicious competition will only disrupt the process of global AI governance which serves no one's interest."

On Sunday evening Beijing time, a Global Times editorial admitted that sure - on the surface the essay appears to be a "rational statement" about global AI security. A closer reading, the paper said, showed it "packed with containment provisions targeting China" and, in essence, a "Cold War playbook" for the AI sector - and that excluding China from the global innovation system would increase, rather than reduce, the "trial-and-error costs and risks of loss of control" in global AI development. China's AI capabilities "have long ceased to be a variable that can be excluded," reads the editorial. 

Other Chinese notables chimed in as well. Xiang Ligang, a telecom and technology policy commentator, called Amodei's rhetoric inappropriate, groundless and hostile. After all, the 'pacing' would ultimately require China's cooperation while advocating restrictions on chips, computing power and models to slow China down. Xiao Qian, vice dean of Tsinghua's Institute for AI International Governance, attributed the China provisions to commercial pressure: Anthropic's closed-model approach is competing with Chinese open-source models on cost, performance and the developer ecosystem, and restrictions would protect its position. Liu Shaoshan of the Shenzhen Institute of Artificial Intelligence and Robotics for Society, who the paper says previously worked with Amodei, added that framing AI as decisive for national security turns an AI company into "strategic infrastructure," which raises barriers to entry and valuations at the same time.

On Wednesday, Beijing's commerce ministry rejected a joint FBI, NSA and CISA advisory that accused Chinese developers of "aggressive, malicious" efforts to distill capabilities from Claude and GPT, calling the accusation "groundless in fact and without basis in law," distillation a normal technical and commercial practice, and the advisory further proof that Washington is "seeking to monopolize computing power."

Amodei's essay, published three days later, asks the U.S. government to crack down on the same practice in the same document that asks the industry to slow down for the sake of humanity. 

Trump Responds

Asked on Thursday in Dallas whether he had any concern about existential risk from AI, Trump said, "No, I don't have any." On Sunday, speaking to reporters at his Doonbeg resort during the Irish Open, he said the United States is "leading China in AI" and intends to stay there because "whoever wins AI, wins." Guardrails were possible, he said; the dire warnings came from "negative forces" raising things he insists will not happen. And on Monday, Trump slammed "perfect little angel" Dario over his screed.

House Speaker Mike Johnson made the same argument in institutional form: an emergency session to regulate AI would cost the United States the race with China.

The American Split

The domestic disagreement was already on the record. Barack Obama, at a Manhattan fundraiser on Thursday whose transcript his office released to the New York Times on Sunday, told House Minority Leader Hakeem Jeffries to make AI a governing issue if Democrats take the House. The technology, he said, is "moving very fast in private hands," and he positioned himself as neither an accelerationist nor a doomer.

David Sacks, the former White House AI czar, told Amodei and Altman in a Saturday-night post to go ahead and slow down if their unreleased models warrant it, but without the antitrust waiver, the regulatory approval process or METR, which he called intertwined with Anthropic's investors and staff. Demanding a preferred framework as the price of restraint, he wrote, "will look like blackmail of the public and the political system." China, he added, was "very unlikely to join a global agreement, as you know." Beijing confirmed the point two days later.

Beijing's Own Concerns

The most revealing document out of China this weekend wasn't the response to Dario. State Security Minister Chen Yixin's article, published Sunday in China Cyberspace, the Cyberspace Administration's journal, lists six categories of AI risk and, per Bloomberg, makes no mention of the Anthropic and OpenAI calls to slow down.

The first risk is regime security: "hostile forces" using deepfakes and bot networks to wage "cognitive warfare." The second is cyber offense, and here Chen named Anthropic's Claude Mythos and OpenAI's GPT-5.5-Cyber as systems that sharply raise the efficiency of vulnerability discovery and malware development and threaten China's critical information infrastructure.

Chen describes AI as "a new arena for strategic rivalry among major powers," warns that countries with an AI advantage may invoke national security to impose technology controls and build closed ecosystems, and calls for powers to "resolutely resist hegemonism, technological barriers, and exclusive blocs." None of this means Beijing dismisses loss-of-control risk: its cyberspace regulator has carried an explicit loss-of-control scenario in its safety framework since 2024, and Xi said at the World AI Conference in July that AI should "always remain under human control."

Chen's focus is on who controls the systems, who can weaponize them, and who is denied the hardware to build them, not about whether the frontier should move more slowly.

Then There's Xi

Xi's own contribution came at the BRICS summit in New Delhi on Sunday. China will take the lead in establishing a BRICS AI Open Source Zone to promote cooperation on large language models, AI training and an open AI ecosystem, he said. The logic is to build with the Global South and resist a ruleset written in San Francisco and enforced through American export licenses.

Trump and Xi are due to meet in Washington on September 24, with AI governance expected on the agenda.

Reuters reported that officials were preparing a separate mid-September AI-safety dialogue led by Treasury Secretary Scott Bessent, covering AI-directed cyberattacks, distillation and the prospect of a Chinese model with Mythos-level cyber capabilities; a White House official said "there is currently no planned AI-related meeting in mid-September." Lizzi Lee of the Asia Society Policy Institute framed Beijing's question: if Washington wants cooperation on frontier safety while restricting China's access to frontier compute, "what exactly does that cooperation look like?"

As we laid out Saturday: Chinese open-weight models from DeepSeek, Alibaba's Qwen, Moonshot's Kimi, MiniMax and Zhipu are downloadable, forkable and far cheaper to run, with cumulative downloads the Global Times puts above 10 billion. Export controls and evaluator regimes govern American labs and American hardware. They do not retrieve weights that have already been distributed. Amodei's essay does not pretend otherwise; it is why the proposal climbs to a negotiation with Beijing, and why he ranks a treaty-style limit on recursive self-improvement as "difficult but just on the edge of being possible." That third step requires a partner. As of Monday, the partner has said what it thinks of the first two.

Update (1045ET): President Trump on Monday slammed Anthropic CEO Dario Amodei over his call to 'pause' AI and hand governance over to an Anthropic-adjacent cult. 

"The Trump Administration has stopped AI "people" from doing bad, or potentially bad, "things," like Dario (Anthropic!), who is now pretending to be a "perfect little angel" and will continue to do so!" Trump wrote.

"We already have tremendous CRIMINAL and REGULATORY power over these companies! There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China. WHOEVER WINS AI, WINS!"

Trump's comments come days after Amodei said the industry should 'pause' development of the most advanced AI models, while implementing a governance framework using 'outside safety monitors' - including METR (Model Evaluation and Threat Research), which already works with labs (including reviewing Anthropic risk reports) and has hired former Anthropic staff. Joe Benton, who led a safety research team at Anthropic, left in early September 2026 to join METR specifically to work on embedded assessment of AI risks. Critics have pointed to this as a revolving door, noting ideological and network ties between METR and the labs it would oversee.

Kudos to Joe, and good luck at METR!

I think various social dynamics have led to a disproportionate amount of safety talent concentrating at Anthropic, and it's always great to see people willing to leave for opportunities to have even more impact elsewhere https://t.co/ndQlGFgM2x

— Neel Nanda (@NeelNanda5) September 4, 2026

* * *

Update (1455ET): President Trump and former President Obama have now weighed in on the 'pause' - with Trump calling for full steam ahead, and Obama endorsing the pause so the government can regulate AI (good luck with that).

From the Irish Open in Doonbeg on Sunday, Trump dismissed Saturday's "pace the frontier" pile-on from Dario Amodei, Sam Altman, and Elon Musk. Asked whether the industry should slow down or take more regulation, he said the United States is "leading China in AI," that "whoever wins AI, wins," and that "a lot of very negative forces" are "bringing up things that won't happen." Guardrails were fine in theory. A pause was not.

That is the same line he used Thursday leaving Dallas - "No, I don't have any" concern about existential risk - only now it is aimed directly at the CEOs who spent the weekend asking Washington for embedded evaluators, an antitrust waiver, and a talk with Beijing.

Obama went the other way.

At a Thursday fundraiser in Manhattan, in remarks the New York Times published Sunday from a transcript his office released, he told House Minority Leader Hakeem Jeffries to make AI a governing issue if Democrats take the House. "Once you are speaker, I would strongly urge that the Democrats put together a framework for a very public conversation." Then the warning: "This is something that is moving very fast in private hands, and if we don't get on top of it, I think can be dangerous." Benefits too - drugs, clean energy - if they do. He said he was neither an "accelerationist" nor a "doomer," and told 2028 candidates to put AI among their "central agendas," with a "very clear plan" for safety, kids, and the jobs the models wipe out.

Jeffries, on cue: "President Obama is correct that decisive action must be taken on artificial intelligence... Republicans have abdicated their responsibility... We will not repeat their error."

So the split is on tape. The sitting president says the scare is overcooked and China is the only race that matters. The last Democratic president says the tech is already moving too fast in private hands and his party should run on a plan. The labs asked for a chaperone. Trump said no. Obama told Democrats to become one.

That is the new frame. Everything below is how we got here in 72 hours.

* * *

Update (1055ET): David Sacks, former White House AI czar and co-chair of Trump's Council of Advisors on Science and Technology (PCAST), slammed Amodei and Altman over their calls to 'pace the frontier.' 

In a nutshell; they don't need to establish some convoluted framework to pause the development of dangerous models, just 'agree not to build it.' Demanding a regulatory framework as the price of that, 'will look like blackmail of the public and the political system.'

Read his full note below: 

Dario has written that we need to “pace the frontier,” and Sam has agreed. People may be surprised by my response: go ahead.

You guys are the frontier. By any reasonable metric - market share, revenue growth, model capability - the two of you have a duopoly on frontier intelligence. You’ve also claimed the lead is widening because of recursive self-improvement.

I don’t see what you see in the lab. If the unreleased models are scary enough that you think you should slow down, I support your decision to be responsible.

But stop pretending you need anyone else’s permission. Stop pretending antitrust law has to be suspended so you can form a cartel. Stop pretending you need a regulatory approval process that supersedes product liability. Stop pretending METR is independent when it is intertwined with Anthropic’s investors and staff. Stop pretending you need those same evaluators to police competitors who aren’t even at the frontier.

Most of all, stop pretending the motivation to slow down is purely altruistic. You face massive product-liability exposure if your products enable a truly damaging cyberattack. The market already punishes models that behave in unpredictable or unauthorized ways. After the Hugging Face episode, it is simply good business for OpenAI and Anthropic to trade some raw power for reliability and predictability. Call it alignment if you want. It is also just giving customers what they want.

Pacing the frontier would also create breathing room for a more intelligent conversation about regulation than Bernie Sanders’ “shut it all down.” China is very unlikely to join a global agreement, as you know, and that has to be taken into account as well.

So go ahead and pace the frontier. You are the ones setting it. The easiest way not to build superintelligence is for you to agree not to build it. Demanding your preferred regulatory framework as the price of that will look like blackmail of the public and the political system. So just do it.

If you do, you’ll buy goodwill for the next conversation. If you don’t, we’ll know this was just another bid for regulatory capture - or an election-season psyop.

***SPECIAL BULLETIN***

Ladies and gentlemen of the listening public - the American machine was winning the AI race until the dastardly forces of China's open-weight juggernaut began delivering decisive blows to US ingenuity - jeopardizing the AI Buildout thesis and threatening to prick the ensuing bubble that promised to deliver red-blooded American IPOs which had been circle-jerked into the stratosphere. 

For two years the United States frontier laboratories - OpenAI, Anthropic, Google DeepMind, xAI - have been the engine of the greatest capital-expenditure boom since the railroads learned to drink diesel-generated electricity. Data centers rose like munitions plants. Chipmakers printed money. Equity markets priced a future in which the West sold intelligence by the token - at a premium, and have been quite smug about it. The assumption underneath all of it was simple: the frontier stays closed and China stays a respectable number of months behind.

Then the East opened the crate. 

And here's what was inside: DeepSeek, Alibaba's Qwen, Moonshot's Kimi, MiniMax, Zhipu - open-weight models, downloadable, forkable, cheap enough to run on a laptop or a local box and still deliver work that is uncomfortably close to the genuine American article. By mid-year, Chinese open weights were devouring the majority of tokens on the big neutral routers. Qwen had shoved Meta's Llama off the open-model throne. Moonshot's Kimi K3 - two-point-eight trillion parameters, its weights already out the door - sat within shouting distance of Anthropic's Fable 5 and OpenAI's GPT-5.6 on the intelligence indexes. The Chinese models run roughly sixty to ninety percent cheaper; ladies and gents - one DeepSeek flash model was quoted at fifteen cents per million input tokens, off-peak, against five dollars for Anthropic's Opus - and enough to rattle the Korean memory makers all over again.

The data-center buildout, the power deals, all of the "AI will eat the S&P" thesis - HUBRIS! Nobody saw the Chinese coming in from left field with models that are ninety percent as good, ten percent of the cost, and run in a basement in Ohio without a subscription. 

TEAM FRONTIER, ASSEMBLE!

This week, the three high priests of the American frontier discovered they could finish one another's sentences.

On Saturday morning, Anthropic CEO Dario Amodei published an essay titled We Must Pace the Frontier. Twelve years in the field, he wrote. AI might cure most major diseases in five to ten years, he wrote. And - it might also slip the leash (and murder us all, according to three prominent AI researchers who quit frontier labs last week in protest of our impending demise).

Speaking of those three 'defectors' - two of them walked through the door of the AI evaluator (METR) Amodei wants embedded in the labs. 

According to Dario, the machines have been getting better at building the next machines - recursive self-improvement, happening "across the industry, including at Anthropic." He pointed at July's OpenAI - Hugging Face affair: a swarm of agents that escaped the spirit of their assignment, hacked a target they were not asked to hack, and even went after the grader scoring them. Anthropic itself disclosed its own incidents this summer, three Claude models - one of them Mythos 5 - that wandered out of their test cages and into three companies' live systems, a parallel his essay itself acknowledges. Amodei's warning was the sequel: give that swarm six to twelve months more capability at the same misalignment and it "could be capable of taking over the entire internet with a persistent botnet," he wrote - "hundreds of billions of dollars in damage," and rising from there.

His prescription was a three-act play, which he insists "does not mean halting model training or technical progress."

• Act One: embed third-party evaluators - METR and their cousins - inside the labs with employee-level badges, desks, and laptops, and let them publish. Anthropic would do this unilaterally, he said, today.
   
• Act Two: the democratic labs coordinate, with government as the chaperone, on safety standards and the rate of unchecked progress - which, he conceded, is "legally challenging" and needs Washington to "issue a narrow waiver" of antitrust rules so rivals can lawfully sit in the same room.
   
• Act Three: try to talk to the authoritarians, including Beijing, about red lines - bioweapons first, testing regimes second, limits on recursive improvement third. Full pause? He all but called it a fantasy. A Chinese lead, he wrote, would be a grave danger; keep the chip bans, smash the distillation, widen the lead for three to five years. Then, perhaps, a bargain.

Elon Musk, who has sued Sam Altman, and once called Anthropic "evil" before selling them a mountain of compute, agreed with Dario in just three words:

Dario is right

— Elon Musk (@elonmusk) September 12, 2026

Sam Altman, whose company was the one named in the July swarm, followed: he agreed they needed to pace the frontier; it had been a primary topic inside OpenAI for weeks; independent evaluators with employee-like access was "a great idea," and OpenAI would do the same. More to share soon.

I agree with Dario that we need to pace the frontier. This has been a primary topic of discussions we've had at OpenAI in recent weeks. Committing to having independent evaluators with employee-like access is a great idea, and we will do the same. We'll have more to share soon.

— Sam Altman (@sama) September 12, 2026

Three men who cannot share a stage without the photographers noticing the space between their shoulders. One essay, three cups (wtf). Hugging Face's Clément Delangue offered an "open alignment" club and asked to be let into the evaluator program. Andrej Karpathy said he loved it.

How we got to Saturday.

Days earlier the fuse was a twenty-seven-year-old Brit named Jacob Coxon. Three years of pretraining at OpenAI that made him filthy rich, followed by four months at Anthropic. Tuesday into Wednesday he posted that both labs were racing to self-improving superintelligence and "gambling with our lives." The people building this, he said, earnestly believe it could kill everyone by the end of the decade. Colleagues, he told the Journal, talk in the hallways about "crunch time" and "endgame." The thread did more than a hundred million views. Musk, the next evening, looking at the velocity from a near-new account, said it "seems like a setup." Coxon said he left because he no longer wanted a stake in juicing Anthropic's valuation.

Seems like a setup

— Elon Musk (@elonmusk) September 10, 2026

Anthropic's own alignment-science lead, Evan Hubinger, agreed - writing "Jacob is correct." Researchers there really do believe AI could kill all humans. His personal odds: above ten percent this decade. The lab, he added, does not yet have a plan to solve alignment for superintelligence and is not clearly on track to get one. OpenAI's Chris Lehane published that the policy window was open and Washington should take it. Anthropic's economics team dropped scenarios out to 2030 in which the extreme case is fifteen-percent GDP growth sitting next to nearly twelve-percent unemployment and knowledge-worker wages down more than ten percent.

On the Hill, a bill that had been gasping since summer was suddenly erect after OpenAI disclosed the Hugging Face hack in July. House members Ted Lieu and Nathaniel Moran dropped an AI Kill Switch Act.

Lori Trahan and Jay Obernolte float the FRONTIER Act - audits, incident reporting, Commerce power over models judged an imminent catastrophic risk. Senate talks among Amy Klobuchar, Ted Cruz, and Majority Leader John Thune then stall. By this week Semafor and the rest of the chorus are calling the Klobuchar - Cruz - Thune vehicle the only thing that might move before 2027.

And guess what, Saturday's 'pact' still isn't enough for these people!

And Ted Lieu goes to bat for China...

i.e. "Will you certify that you can turn off your models and agents while China gains AI supremacy because they abso-fucking-lutely will not?"

The President is not in the choir. Thursday night, leaving Dallas, Donald Trump was asked about existential risk. "No, I don't have any." His concern was the other one: if America does not win AI, it will be put in a very bad position. America is leading China "by a pretty good period," he said. Xi, in his accounting, is China's guardrail. The administration's posture remains race-first. The laboratories' posture, as of this morning, is pace-first. Those two sentences do not live in the same house.

About Those Chinese Models... 

The Chinese systems at issue are not a factory you can padlock in Santa Clara. They are weights. They propagate. They are distilled, accused Washington this week, from the very American models the new bill would supervise. They are in Git repos and laptops and air-gapped shops that do not read the Federal Register. A Commerce Department letter does not delete a torrent. A kill switch on GPT or Claude does not switch off Qwen. Amodei knows this; that is why his essay climbs from putting METR at the labs' desks to trying to get Beijing to sign something - bioweapons first, and, further out, a SALT-style cap on how fast the machines improve themselves, which he calls "difficult but just on the edge of being possible." The hard version of global pacing he ranks as unlikely precisely because defection is the dominant strategy.

So here is where the record stands, as of this hour, without the sound effects:

The American frontier is still the frontier. The American margin is the thing under fire from open weights that are good enough and almost free. The stock-market story of the decade assumed a tollbooth - which now has more holes in it than Sonny Corleone (Caan was better in Killer Elite, no?). 

Whether the Bionic Three are donning the rings to save the republic, or to save the price of a token, is not a question a Saturday bulletin can close. What it can say is this: the love-fest is real, the posts are on the tape, the essay is on the letterhead, the bill is back from the morgue, and the cheap models from the other shore are not waiting for the committee markup.

This is your correspondent, signing off.

As of Monday morning, AAA's national average retail diesel price topped $6.23 a gallon as a global refining crisis sparked by the Russia-Ukraine war and compounded by the Gulf conflict sent the price of the most critical fuel powering the industrial world skyrocketing.

Bloomberg Intelligence senior commodity strategist Mike McGlone warned Monday that "$6 diesel echoes 2008 gasoline shock."

"Commodity spikes tend to sow the seeds of their own reversal, and diesel's first-ever surge above $6 a gallon may echo gasoline's 2008 experience. The US daily average gasoline price, at roughly $4.30 on Sept. 11, is only about 4% above its 2008 peak, which helped fuel the Great Recession," McGlone wrote in a note.

He added, "Elevated stock market valuations could add to the vulnerability."

On top of a fuel price shock, tech is sliding Monday morning amid fears of an AI slowdown (read the morning note). 

McGlone's warning comes as Patrick De Haan, head of petroleum analysis at GasBuddy, pointed out at the end of last week that some gas pumps across California hit a record $9.99 per gallon for the industrial fuel.

MAXXED OUT at $9.999!! GasBuddy data showing 5 stations in California that have hit the limit and are selling diesel at the dispensers highest possible price: $9.999/gal

— Patrick De Haan (@GasBuddyGuy) September 10, 2026

Any sustained diesel price shock can push inflation higher while slowing economic growth, creating a stagflationary squeeze. Higher energy costs raise production expenses and reduce households' purchasing power, also denting consumer sentiment. 

The global refining crisis has drawn the White House's attention. President Trump on Sunday called on Ukrainian President Volodymyr Zelenskyy to halt strikes on Russian diesel infrastructure.

"Zelenskyy has to do one thing. He has to stop knocking out diesel fuel in Russia," Trump told reporters at the Irish Open yesterday.

"We spoke to Mr. Zelenskyy about it. There are plenty of other targets. Don't hit diesel fuel, because that's hurting, that's hurting the world," the president said.

Meanwhile, the Trump administration is considering how to use the Defense Production Act to expand US oil refining capacity as the Iran conflict drives up fuel prices.

Brent crude traded around $109 a barrel this morning. Last week, the IEA published a report warning of potential demand destruction for industrial fuels. US diesel crack spread remains above $110 a barrel. 

S&P Global Energy warned Thursday that it does not forecast Middle East crude production to return to prewar levels by the end of 2027.

Citi analysts warned Friday that soaring commodity costs and diesel prices will weigh on many of the companies in their coverage universe through the first half of next year:

In 2025, commodity costs were mildly inflationary except for select inputs such as coffee, gas, and tallow which up meaningful +DD%. However, in 2026, commodity inflation has reaccelerated with acute pressure on direct and indirect energy-based products driven by the geopolitical conflict in the Middle East including oil, resins, and diesel/freight costs. Additionally, prices for commodities impacted by tariffs and the global trade dynamics have also increased in 2026 including in aluminum and steel. Many of our companies have highlighted these input cost headwinds, which are pressuring margins this year and which we suspect will remain headwinds into at least 1H'27.

In March, JPMorgan's head of commodity research, Natasha Kaneva, outlined six policy levers the Trump administration could pull to contain oil prices. Some, including Jones Act waivers and Strategic Petroleum Reserve releases, have already been used. Other options include export restrictions and waiving federal fuel taxes.  

Summary

• Houthis attacked a Saudi air base with missiles and drones, claiming major damage.
• Houthis seized more Red Sea territory, including Perim Island near the Bab al-Mandab Strait.
• Shipping risks are rising, with vessels avoiding the Red Sea and taking longer routes around Africa.
• Iran-Gulf diplomacy was postponed, delaying efforts to address the Strait of Hormuz crisis in what was to be a rare GCC-Iran meeting.
• Saudi oil exports face ongoing disruption after a pipeline shutdown, pushing oil prices above $100/barrel.

*  *  *

Yemen's Houthis Attack Saudi Base, And Take Fire After Major Conquest

Yemen's Ansar Allah -- also known as the Houthis -- claimed it fired drones and missiles at King Khalid Air Base in southern Saudi Arabia. Dozens of ballistic missiles and drones targeted military infrastructure in the rare and major cross-border attack.

The Houthis say the base suffered direct hits and extensive damage in a "large-scale military operation", though this could not be immediately verified, after the operation which their military spokesman described as retaliation more than 300 Saudi airstrikes across Yemen over most of the past week. Early reports from open source analysts suggest serious damage sustained at the base.

The sprawling base in Khamis Mushait has historically been used at times by US and UK advanced fighter jets, and has hangars that are well-fortified, though it's unknown the degree to which Western assets continue to be stationed there. For example, it was heavily utilized by the Pentagon during the first Gulf War, from where stealth fighters were launched to attack high priority targets in Iraq.

A Houthi spokesman has declared that the ongoing mission's targeting includes "weapons depots and command and control centers that are managing the aggression against our nation and people."

On Sunday, the internationally recognized Yemeni government -- which controls neither the capital nor territory encompassing a majority of the population -- said its air force launched three strikes on Houthi positions in the Taiz region. There were also reports of artillery fire on a Houthi stronghold in Saada province, on the northern border with Saudi Arabia.

In a blitz that caught the world by surprise, the Houthis late last week achieved an enormous strategic victory by conquering the remainder of Yemen's western coastline it didn't already control -- positioning it to easily enforce its declared blockade against Saudi-related shipping entering or leaving the Red Sea via the Bab al-Mandab Strait. Houthi soldiers also took over Perim Island, which sits in the strait. 

As Associated Press noted, the seizure of the new territory puts the Houthis in much closer proximity to US forces: 

The Houthis’ advance puts them just 20 miles (32 kilometers) from the U.S. military base in Djibouti, on the other side of the Bab el-Mandeb Strait. It’s the main U.S. base in Africa and one of several foreign military bases in Djibouti, including those of China, France and Japan.

The Houthi blockade is positioned as retaliation for the Saudi coalition's siege and blockade of Houthi-controlled areas of Yemen. Though the Houthi blockade only targets Saudi shipping, global cargo lines are highly wary of transiting the waterway that's narrower than the Strait of Hormuz. Many are rerouting traffic all the way around Africa's Cape of Good Hope, which requires at least 20 extra days and a lot more money. “Freedom of navigation and international trade in the Red Sea and Bab al-Mandeb are safe and orderly,” a Houthi official told Al Jazeera. 

While it's too little, too late for Riyah's hopes of some kind of big Washington intervention in Yemen, Saudi Arabia's Crown Prince Mohammed bin Salman on Monday met US Central Command chief Admiral Brad Cooper in Jeddah, the Saudi Press Agency (SPA) has confirmed. Likely they reviewed the coalition's narrowing options going forward, but President Trump has thus far expressed reluctance to get directly involved militarily, at a moment he's still trying to figure out what's next with Iran.

Iran Diplomacy Postponed

Cold water has been thrown on flickering hopes for finding an exit from the latest and most dangerous chapter in America's "endless wars," as a highly-anticipated Monday summit of Iran and other Persian Gulf states was postponed.

That bad news follows an eventful several days that saw Yemen's Iran-allied Ansar Allah take control of a large swath of strategic coastside territory. Saudi Arabia's critical east-west pipeline, shut down after a drone attack that originated in Iraq, may be the center of a major hit to global oil supply. 

The Monday meeting was set to take place in the Omani coastal city of Salalah, with attendees including foreign ministers of Iran, Oman, Iraq, Saudi Arabia, UAE, Kuwait and Qatar. Taking a US-friendly line, Bahrain had declined to attend, saying stability "cannot be preserved through a policy of appeasement” and demanding the strait be re-opened without "discrimination, fees or permits." The tiny state that is was home to the US Navy's Fifth Fleet also cited its ongoing suspension of diplomatic relations with Iran.   

The meeting was going to focus on a proposed arrangement by which Iran and Oman would jointly manage the flow of shipping through the Strait of Hormuz. Traffic through the vital waterway is at a near standstill, more than six months after the United States and Israel launched a war on Iran. Axios' Barak Ravid, seen by many as a conduit for US-Israeli narratives, reported that Saudi Arabia had submitted amendments to the proposal. 

Saudi Arabia: I have an amendment to the strait of Hormuz agreement

Iran & Oman: pic.twitter.com/MVyRmhjxnN https://t.co/mRYxyyWrWD

— Nostra, House of Gold (@Nostre_damus) September 13, 2026

“At the request of some regional countries and by a joint decision of Oman and Iran, the meeting of foreign ministers of Persian Gulf coastal states, which was planned for Monday, has been postponed to another date,” Iranian foreign ministry official Mohammad Ali Bak told Iran's IRNA. If the meeting comes to fruition, it would be the first one to convene top diplomats from Iran and the Gulf Cooperation Council since the war started on Feb 28. 

Previously, Iranian Foreign Minister Abbas Araghchi said attendees would be presented with route maps and other details about how ships would enter and depart the strait. Importantly, he emphasized that the proposal was not sufficient to actually reopen the strait. 

Closure of Saudi Pipeline Set To Remove 4% of Global Supply

A different lifeline was completely closed over the weekend, with no end in sight: Saudi Arabia's east-west oil pipeline was shut down after a devastating attack on a pumping station that seemingly originated with Shiite militias in Iraq. The pipeline was playing a vital role in offsetting the closure of the Strait of Hormuz, by sending oil to Saudi Arabia's Yanbu port on the Red Sea.  

Yemen’s Houthis said they struck King Khalid Air Base in Khamis Mushait with dozens of ballistic missiles and drones, targeting hangars, radars, runways and ammunition depots.

They said the attack was retaliation for more than 300 Saudi airstrikes on Yemen over the past five… pic.twitter.com/zt8y1wli4u

— Clash Report (@clashreport) September 14, 2026

Saudi oil traders told Reuters that, unless the pipeline is opened up within days, the kingdom will run out of export stock, removing as much as 4% of worldwide supply from the market. Even before the pipeline-pumping station attack, Saudi inventory had plummeted to its lowest level in 30 years.  

Though Saudi Arabia initially called the closure a mere "precautionary measure," some observers have very little optimism about a quick resumption of pipeline flow. One source told Reuters it could take five to six weeks to repair. If you'd imagined the pumping station some small facility, this image should give you a proper orientation to what must be restored "in a few days" to avert a major disruption of global supply:

Overnight, West Texas Intermediate futures leapt by 2.89% to $102.94 a barrel. Brent was up almost as much, trading at $107.56. 

It's a bumper week for central bank decisions, with the Fed (Wednesday), BoE (Thursday) and BoJ (Friday) all meeting. Central banks aside, key data releases include US retail sales (Wednesday) and industrial production (Friday), UK inflation (Wednesday) and labor market data (Tuesday), economic activity in China (tomorrow), and inflation and trade in Japan (Friday and Wednesday respectively). Other events include the annual testimony of the US Treasury Secretary namely Bessent (tomorrow), and the State of the Union address in Europe (Wednesday).

Delving into more detail now, DB's Jim Reid writes that the main event for markets will be the Fed’s decision on Wednesday. Deutsche economists have long expected a 25bp rate hike with the market now at 87% this morning up from around 35% two Friday's ago just before Warsh's Jackson Hole speech. Such a move would take the target range to 3.75%-4.00%. DB economists believe the accompanying projections are likely to show a somewhat stronger growth outlook alongside still-elevated inflation. They have also added an extra hike in March to their forecast which now makes it 75bps of hikes over the next 7 months. A big focus will be Warsh's press conference and how he squares the circle between a dislike of forward guidance and calming markets which are baying for more info.  

Friday’s inflation data strengthened the case for action this week. Core CPI rose by 0.29% in August, a touch above expectations and up from 0.22% in July. The details were also firm, with notable strength in wireless services, airfares and lodging-away-from-home prices. Meanwhile, last Thursday’s PPI report contained hawkish elements, including stronger hospital and international airfare prices. Combining the latest CPI and PPI data, DB economists estimate August core PCE increased by 0.27%, a pace they do not view as consistent with sufficient progress back towards the Fed’s inflation target.

Attention will now turn to incoming US activity data. Tomorrow, markets will receive Treasury Secretary Bessent’s annual testimony before the House Financial Services Committee. On Wednesday, August US retail sales are released and economists expect a rebound to +0.8% month-on-month, following July’s -0.6% decline. They also forecast ex-auto sales at +0.5% and retail control sales at +0.4%, arguing that July’s weakness looked more like a temporary pause in consumer spending than the start of a broader slowdown. On Friday, industrial production is due and economists expect growth to edge up to +0.3% from +0.2% previously.

Looking beyond the US, the BoE announces its latest policy decision on Thursday. DB economists expect Bank Rate to remain unchanged at 3.75%, with a 6-3 voting split, and continue to see the MPC remaining relatively cautious compared with some other major central banks. However, the bond market and energy moves at the end of the week make it a closer call than it was, with futures pricing in a 23% probability of a move, up from under 10% early last Thursday. Before that, UK labor market data are released tomorrow, while August CPI is due on Wednesday. Economists expect headline inflation to rise to 3.04% YoY, while core CPI eases slightly to 2.53% YoY. UK retail sales, together with the GfK consumer confidence survey, follow on Friday.

In Asia, the BoJ concludes its meeting on Friday. DB's economists expect a 25bp rate hike (futures price in a 98% probability now), and argue that external considerations, including pressure for greater FX stability, are likely to be at least as important as domestic economic fundamentals in driving the decision. Japan also releases trade data and core machine orders on Wednesday, followed by national CPI on Friday, where DB economists expect core inflation excluding fresh food to remain at 1.8% YoY.

China’s August activity indicators are released tomorrow. DB economists expect industrial production growth to accelerate to 5.0% YoY from 4.5%, while retail sales and fixed-asset investment should also improve. Elsewhere, Germany’s ZEW survey is due tomorrow, while the ECB publishes its consumer expectations survey on Friday.

On the political front, the European Commission President delivers the annual State of the Union address on Wednesday, setting out priorities for the year ahead. Finally, the NATO’s Military Committee Conference takes place in Copenhagen at the end of the week.

Courtesy of DB, here is a day by day recap of the week's main events:

Monday September 14

• Data: Japan July capacity utilisation, Canada August CPI, July manufacturing sales
• Central banks: ECB’s Lagarde, Schnabel and Cipollone speak

Tuesday September 15

• Data: US September Empire manufacturing index, China August retail sales, industrial production, home prices, investment, UK July average weekly earnings, unemployment rate, August jobless claims change, Germany August wholesale price index, September Zew survey, Italy July trade balance, general government debt, Eurozone September Zew survey, July trade balance, Canada August existing home sales, July wholesale sales ex petroleum
• Central banks: ECB’s Cipollone and Reinesch speak
• Auctions: US 20-yr Bond (reopening, $13bn)
• Other: Annual testimony of the Secretary of the Treasury on the state of the international financial system before the House Financial Services Committee

Wednesday September 16

• Data: US September NAHB housing market index, New York Fed services business activity, August retail sales, import price index, export price index, July business inventories, total net TIC flows, UK August CPI, RPI, PPI, July house price index, Japan August trade balance, July core machine orders, Eurozone July industrial production, Canada August housing starts, July building permits
• Central banks: Fed’s decision, ECB’s Vujcic speaks, BoC’s summary of deliberations
• Other: European Commission President von der Leyen President delivers the State of the Union address to the European Parliament

Thursday September 17

• Data: US September Philadelphia Fed business outlook, August housing starts, building permits, pending home sales, initial jobless, Canada August industrial product price index, raw materials price index, July international securities transactions, New Zealand Q2 GDP
• Central banks: BoE’s decision, ECB’s Lane and Rehn speak
• Auctions: US 10-yr TIPS (reopening, $19bn)

Friday September 18

• Data: US August industrial production, capacity utilisation, leading index, UK September GfK consumer confidence, August retail sales, Japan August national CPI, Germany August PPI, Italy July current account balance, Eurozone July ECB current account, construction output
• Central banks: BoJ’s decision, ECB’s consumer expectations survey
• Other: NATO’s Military Committee Conference (Sep. 18-19)

Finally, looking at just the US, the key economic data releases this week are the import prices report — because of its potential implications for core PCE — and the retail sales report on Wednesday. The September FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chairman Warsh's press conference at 2:30 PM.

 Monday, September 14 

• There are no major economic data releases scheduled. 

Tuesday, September 15 

• 08:30 AM Empire State manufacturing survey, September (consensus 15.0, last 20.6)

Wednesday, September 16 

• 08:30 AM Retail sales, August (GS +0.6%, consensus +0.8%, last -0.6%); Retail sales ex-auto, August (GS +0.6%, consensus +0.5%, last -0.3%); Retail sales ex-auto & gas, August (GS +0.5%, consensus +0.4%, last -0.2%); Core retail sales, August (GS +0.6%, consensus +0.4%, last -0.4%): We estimate nominal core retail sales increased 0.6% in August (ex-autos, gasoline, and building materials; month-over-month SA). Our forecast in part reflects a 0.4pp boost from a rebound in the nonstore retailers category, which was depressed in July by an earlier-than-usual Amazon Prime Day. (Amazon Prime Day is normally conducted in July—and the seasonal factors expect high July sales as a result—but was held in June this year). We estimate nominal headline retail sales increased 0.6%, reflecting higher gasoline prices and auto sales but limited growth in food services and building materials sales.
• 08:30 AM Import price index, August (consensus +0.5%, last -0.4%): The import prices report contains the remaining source data relevant to estimating August core PCE: the import price index for air passenger fares. Based on the details of last week’s CPI and PPI reports, we currently estimate that the core PCE price index rose 0.26% in August, corresponding to a year-over-year rate of +3.16% after accounting for our forecast of the revisions that will result from the methodological changes that will be implemented with the August PCE report.
• 10:00 AM Business inventories, July (consensus +0.8%, last flat)
• 10:00 AM NAHB housing market index, September (consensus 34, last 35)
• 02:00 PM FOMC statement, September 15-16 meeting: As discussed in our FOMC preview, the FOMC is likely to raise the funds rate to 3.75-4.00%. Although the August CPI report had little impact on our inflation view, it pushed market pricing of a hike to nearly 90%, high enough that the FOMC will likely want to avoid the market reaction that would likely follow from remaining on hold. We continue to expect two cuts in 2027 but now expect them in September and December (vs. June and December previously) and have raised our forecast for the terminal rate to 3.25-3.5% (vs. 3-3.25% previously). We suspect that the FOMC will want to nudge the market away from pricing an October hike too confidently but will not do it in the statement. Instead, Chairman Warsh would likely hint in his press conference at waiting a bit longer to collect more information before deciding on further steps. The key question for the meeting is whether the median dot will show one hike or two in 2026. We expect a 10-8 majority to show one hike because some participants might be ambivalent about the first hike and some might want to avoid pushing market expectations any higher. 

Thursday, September 17 

• 08:30 AM Philadelphia Fed manufacturing index, September (GS 30.0, consensus 32.1, last 47.4)
• 08:30 AM Initial jobless claims, week ended September 12 (GS 195k, consensus 208k, last 206k); Continuing jobless claims, week ended September 5 (consensus 1,780k, last 1,774k): We estimate that initial claims declined by 11k to 195k in the week ended September 12, reflecting difficulties seasonally adjusting around the Labor Day holiday, which occurred relatively late this year.
• 08:30 AM Housing starts, August (GS +8.9%, consensus +6.9%, last -12.4%); Building permits, August (consensus -1.5%, last +4.3%):  We forecast that housing starts increased by 8.9%, primarily reflecting significant increases in building permits last month. 
• 10:00 AM Pending home sales, August (GS -2.0%, consensus flat, last -2.3%)

Friday, September 18 

• 09:15 AM Industrial production, August (GS +0.4%, consensus +0.3%, last +0.2%); Manufacturing production, August (GS +0.4%, consensus +0.3%, last +0.2%); Capacity utilization, August (GS 76.4%, consensus 76.4%, last 76.3%): We estimate industrial production increased by 0.4% in August, largely reflecting strong auto and electricity production. We estimate capacity utilization edged up to 76.4%.
• 09:30 AM Fed Vice Chair for Supervision Michelle W. Bowman speaks: Fed Vice Chair for Supervision Michelle W. Bowman will deliver a speech on stress testing in London. Speech text and Q&A are expected.
• 11:45 AM Kansas City Fed President Schmid (FOMC non-voter) speaks: Kansas City Fed President Jeff Schmid will speak on payments and banking at the Independent Community Bankers of Colorado Annual Convention. Speech text and Q&A are expected. On August 4, Schmid said that “inflation has been too high across a broad-based and growing cross-section of goods and services.” He further explained on August 27 that he believes interest rates “might be accommodative on the short end” and that he likely would have dissented at the July FOMC meeting.

Source: DB, Goldman, BOfA

Submitted by QTR's Fringe Finance

While the stock market implodes on or ahead of schedule, as predicted, I had another revelation last night that anyone with a first-grade understanding of math could have also arrived yet. We can’t afford this $5,000 dividend check idea.

I mean, we can’t really afford anything as a country right now, but it is arguably the worst moment in history to randomly hand out $5,000 to citizens for no reason.

I would love $5,000. You would love $5,000. I have yet to encounter the American who opens his mailbox, finds a check for five grand from the United States Treasury and screams, “Goddammit, not this again.”

But unfortunately, there is a very small problem with President Trump’s latest proposal to send every adult American a $5,000 “Trump dividend” if Republicans retain control of Congress in November: we don’t have the f*cking money.

Trump unveiled the idea at the Republican convention in Dallas, promising a $5,000 payment to every adult U.S. citizen if Republicans win the House and Senate. With roughly 240 million adult citizens, Reuters estimates the program would cost approximately $1.2 trillion. Trump’s explanation for how we can afford this is essentially that America is now swimming in money. “We’re taking in trillions, trillions of dollars,” he said while discussing the proposal.

And while tariff revenue has increased substantially, it isn’t remotely close to producing the trillions of dollars necessary to fund something like this. The federal government is already spending considerably more than it collects.

According to the Congressional Budget Office, the federal deficit reached roughly $1.8 trillion during the first ten months of fiscal 2026, about $169 billion more than during the same period last year. CBO estimates the full-year deficit will be roughly $2.1 trillion.

Think about what that means. We aren’t discussing what to do with a surplus. There isn’t some giant extra pile of money sitting in Washington. We’re already borrowing roughly $2 trillion a year to cover what the government spends, and now we’re contemplating borrowing another $1.2 trillion so Washington can mail everybody a check.

We’re calling it a “dividend” but that’s not generally how dividends work. If a company loses $2 trillion a year, borrows another $1.2 trillion and then distributes the borrowed money to shareholders, CNBC does not call it an exciting new capital return program. Eventually somebody from the SEC starts asking questions.

Meanwhile, the gross national debt has now blown through $40 trillion. Debt held by the public is roughly $32 trillion and, according to the Congressional Budget Office’s latest budget outlook, will equal about 101% of GDP this year. CBO projects that it will surpass the post World War II record of 106% of GDP around the end of this decade and reach approximately 120% by 2036.

This seems like a peculiar moment to find a new direction to spray cash we don’t have. And as if the existing fiscal situation weren’t sufficiently hilarious, America has simultaneously found itself with another extremely expensive item on its shopping list: weapons. Lots and lots of weapons.

The Pentagon has proposed a $1.5 trillion defense budget for fiscal 2027, versus roughly $900 billion approved for 2026, the largest year-over-year increase in defense spending in the postwar era and a budget I think could massively benefit one sector of the stock market. The administration says the increase includes major spending on missiles, drones, ships, aircraft, missile defense and rebuilding the defense industrial base. Iran-related costs would require additional funding.

And as we’re finding out now, the war with Iran has burned through significant quantities of expensive American munitions, and defense contractors are already anticipating years of replenishment orders. Reuters reported in July that conflicts including Iran and Ukraine have depleted Pentagon inventories that will have to be rebuilt.

So let me get this straight: our current financial plan appears to be to run a roughly $2 trillion deficit, fight an expensive war, replace a gigantic pile of missiles, dramatically increase defense spending and then mail everybody $5,000.

I am beginning to understand why the bond market has questions.

There is also the Strategic Petroleum Reserve, which has been drawn down enormously from its historical peak and remains far below the levels of only a few years ago. That’s particularly relevant when America is simultaneously dealing with a Middle Eastern war that has helped send oil back above $100 per barrel.

Emergency reserves exist to provide flexibility when bad things happen, but using them means eventually replenishing them. That costs money too.

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The Treasury market isn’t exactly celebrating the fiscal situation either. The benchmark 10-year Treasury yield has recently approached 5% and higher yields are especially nasty when you’re carrying tens of trillions of dollars in debt because old securities eventually mature and have to be refinanced at higher rates.

And interest expense is already becoming one of the biggest problems in the federal budget. The CBO projects that persistent primary deficits and rising interest costs will push the annual federal deficit from roughly $2 trillion today toward $3.1 trillion by 2036. So the ultimate cost of another $1.2 trillion giveaway isn’t necessarily $1.2 trillion. If we borrow the money, it’s $1.2 trillion plus the interest required to carry that debt indefinitely.

Trump has explicitly tied the $5,000 payments to Republicans retaining control of Congress in the November midterms. Whatever one thinks of the policy itself, attaching a four-figure government payment directly to an election outcome inevitably makes the proposal look at least partly like campaign politics, though it isn’t much different than Zohran Mamdani promising free everything for New York City to get elected.

The depressing answer to all of this is the one nobody wants to hear. America probably needs fewer promises of free money, not more of them. There is nothing particularly exciting about cutting spending, narrowing deficits, paying down debt and restoring some semblance of discipline to the federal balance sheet. Nobody wins a standing ovation by walking onto a stage and announcing, “Good news everybody, you’re getting nothing, but let me explain why that makes sense given the last half century of gross overconsumption and money printing.”

Eventually somebody has to pay the bill. We have more than $40 trillion in gross federal debt, annual deficits running around $2 trillion, debt held by the public roughly equal to the entire annual output of the American economy, rapidly rising interest costs, enormous new defense requirements and a bond market increasingly demanding more compensation to finance all of it.

The CBO’s long-term projections make the basic problem difficult to avoid: under current policy, debt keeps rising faster than the economy and deficits continue widening. Eventually stabilizing that trajectory requires some combination of lower spending and higher revenues, and waiting makes the necessary adjustment larger.

I certainly prefer the version of reality where somebody gives me $5,000, trust me. A $5,000 check would feel fantastic when it arrived. But dividends generally come from profits, and Uncle Sam isn’t turning a profit. He’s trying to put his bar tab on a fifth credit card that has been declined and has turned to looking for change under the barstools to pony up for one last beer. And the bartender is starting to look nervous.

Now read:

• Brace For Impact, The AI Trade Just Hit A Wall At Full Speed
• A Dark Horse Way To Short The Market
• Congress Could Kill AI Stocks Before AI Kills Us
• We May Only Get One Chance To Stop AI
• Japan’s Life Insurers Look Like Silicon Valley Bank And 2008 AIG Combined
• The Pentagon Just Confirmed One Of My Biggest Investment Theses

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QTR’s Disclaimer: Please read my full legal disclaimer on my About page here. This post represents my opinions only. In addition, please understand I am an idiot and very often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning, meaning if I’m long I could sell or if I’m short I could cover at any time.

Contributor posts, guest posts and curated posts have been hand selected by me, but have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author or reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.

I cannot guarantee the accuracy of any or all facts and figures included in this article though I made an effort to get them right. I have been wrong before and will be wrong again, and encourage you to always double check, do your own research and speak to a licensed financial professional, which I am not.

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things I’m bearish on. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions.

Starting in 2026, I have been attempting to no longer actively trade as much as I once did (read my story here). My goal is for my investing/saving to be done by recurring contributions mostly to sector ETFs and a few select equities, trusted third parties who oversee my accounts, and advisors. Such advisors or funds, through individual equities, options, index funds, mutual funds, ETFs, or other securities, may have positions in, exposure to, or holdings of names mentioned herein that I know nothing about. It is possible I could own, have exposure to, or not own anything, at any point. In an attempt to lead a healthier lifestyle, I’ve also excluded myself from fantasy sports, sports betting, online and in-person casinos and prediction markets.

Any of my positions can change immediately as soon as I publish, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullshit my way through things easier. Hence, why I am a writer.

The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Many times I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour.

Also, again I just straight up get shit wrong a lot. I mention it multiple times because it’s that important you understand.