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A Tennessee man has taken legal action against the Kingsport Police Department after a yearslong criminal case that began with him recording an officer on the road and ended with an appellate court throwing out his conviction, according to Fox News.

Joshua Gibbons says police targeted him because he publicly called attention to an officer’s behavior. His lawsuit, brought with the Foundation for Individual Rights and Expression, or FIRE, names the city of Kingsport, its police chief and individual officers and alleges that the department retaliated against speech protected by the First Amendment.

The confrontation began in October 2022, when Gibbons saw a Kingsport police SUV traveling quickly at night without its emergency lights activated. He recorded the vehicle, eventually catching up with the officer at a fast food restaurant and questioning him about his driving. Nothing came of the encounter at the time, and the officer simply continued on his way.

The situation escalated after Gibbons put the footage online. Gibbons frequently records police activity and publishes the videos, and FIRE contends the department began scrutinizing his YouTube account after another person complained about separate footage in which an officer appeared to give Gibbons the middle finger.

According to the lawsuit, police soon turned their attention to the earlier driving video. Authorities secured a warrant accusing Gibbons of disorderly conduct as well as traffic violations related to his own driving while recording. FIRE says the warrant was obtained through a court clerk rather than presented to a judge.

The response that followed was far more aggressive. Before sunrise the next morning, eight armed officers showed up at Gibbons’ home and took him into custody in front of his daughter and elderly mother. The arrest occurred nine days after his original encounter with the officer.

Gibbons says the raid had a lasting impact on his family and believes its purpose was to frighten him into silence. He has said he intends to continue pursuing the case because his family no longer feels secure in its own home.

Fox News writes that the resulting prosecution stretched across nearly four years. Gibbons was cleared of the traffic-related accusations during his first trial but convicted of disorderly conduct. After challenging that decision, he was again convicted by a jury in circuit court.

Tennessee’s Court of Criminal Appeals eventually reversed the result. In a unanimous June decision, the appellate court concluded that the evidence did not establish disorderly conduct and dismissed the remaining charge altogether.

The judges found that Gibbons had neither threatened anyone nor behaved violently and that his comments did not stop anyone from carrying out a lawful activity. The ruling also underscored that offensive or insulting language directed toward police does not, by itself, amount to criminal conduct.

FIRE argues that the timing is central to the civil case. Attorney Adam Steinbaugh said the officer who initially encountered Gibbons did not treat his criticism as criminal behavior. It was only after Gibbons published the encounter and drew attention to the department, FIRE contends, that police decided to pursue him.

Gibbons is now seeking to hold the city and department officials accountable for what he alleges was retaliation against constitutionally protected activity. Beyond his own case, he says he wants the lawsuit to force changes in how Kingsport police respond to citizens who record or criticize officers.

The American dream has never been more out of reach.

Mortgage rates posted their largest increase in four years this week, one of the clearest signs of how the recent bond-market selloff is spilling into the broader economy - if not memory and chip stocks which continue to trade entirely on the highly efficient circular financing and junk bond markets.

30-year fixed-rate mortgages rates surged 25bps in one week, to 7.28% from 7.03%, the biggest jump since October of 2022, according to Freddie Mac.

Mortgage rates have risen to the highest since November 2023 as inflation, a surge in government debt and heavy corporate borrowing for the build-out of AI (not to mention the latest European sovereign debt crisis) push up bond yields. The recent sharp selloff in the bond-market has risen borrowing costs for home buyers and dealt a blow after blow to a limping housing market.

“Showings have stopped basically,” said Don Wessel, a real-estate agent in Greenville, S.C, quoted by the WSJ. "I’ve got good listings in downtown Greenville, which is one of the hottest areas, and nobody’s looking at them."

In 2022, rates surged as part of postpandemic inflation that ended years of below 5% mortgage rates and ground the housing market to a halt. Home sales still haven’t recovered from that rapid freeze four years ago. With rates now at their highest point since 2023, buyers are likely to stay planted on the sidelines, while sellers may take their homes off the market.

The market may not be completely frozen - yet - but it's getting these: for the week ending Sept. 25, mortgage applications plunged 6%, the fourth consecutive week of declines, according to the Mortgage Bankers Association. 

At the start of the year, mortgage rates touched below 6%, but the beginning of the war in Iran caused them to jump. As the conflict has drawn on, fears of sticky inflation have driven rates higher and higher. Rates began September at 6.71% before a historic bond selloff sent them surging more than 50bps higher. 

With the 10Y TSY today hitting the highest yield in 24 years, Americans have been feeling the pain of the bond selloff most directly and rapidly through the housing market, where mortgage rates closely follow 10Y Treasury yields. 

As the WSJ reports, the recent run-up in mortgage rates has brought sales activity in the housing market to a standstill, as buyers have already been coping with record home prices and stretching to afford down payments. Plus, with sky-high homeowners association fees and property taxes, the math has become impossible for first-time buyers to work out.

Now, the end of 2026, a year that was expected to launch the market’s recovery, is likely to be a slog.

“I still see it declining and you’re coming into the slow part with the holidays,” Wessel said. “I think there’s a short window now for sellers to sell and then buyers get out of the market.”

That said, buyers in the upper end of the market, many of whom transact in all cash and don't need mortgages and are generally less constrained by affordability, are continuing to show interest, said Anthony Rael, an agent in Denver. “They seem to be flush with cash, bringing 20%, 30% down payments into the mix,” he said. “Whereas the lower market, let’s just say closer to a half a million and below, is really struggling where we’re getting lots of showings and no activity, no offers.” 

Higher mortgage rates could also halt progress the market has made in freeing up inventory. For years, homeowners have been wary of selling their homes to preserve their low mortgage rates from years ago. That sent inventory plummeting, which has allowed home prices to continue hitting new records, despite weak demand.

While there were a few scattered signs that the lock-in effect was starting to ease as sellers lost patience and gave up their low rates to move for family reasons or new jobs, as inventory approached prepandemic levels in August, but now, rates well above 7% are sure to drive sellers away.

In July, Adam Wharton and his wife bought a new house in Georgia but haven’t been able to sell their old house, which they listed at the beginning of September. There initially was a flurry of interest, and they accepted an offer, before the buyer backed out.

“We were getting multiple showings a day. Within four days, we had a full-ask offer on it,” he said.

But then after rates jumped, the buyers disappeared. Their last showing was two weeks ago. “Since that, it’s been nothing, no scheduled showings, no offers, no nothing from people who have looked at it before,” he said.

The mortgage they have on the house, with a rate of 3.35% and a monthly payment under $1,000, is extremely cheap, and so Wharton isn’t in any rush to sell. Now, they are considering taking it off the market and renting it out if they don’t get any offers, waiting for the market to loosen up before listing it again.

“Everybody has in their minds these two and three and four percent mortgages,” he said, but he will have to wait until the next recession - or depression - before those come back again. 

With mortgage rates breaking through 7%, some home buyers are considering the familiar strategies for lowering their monthly payments: putting more money down, using adjustable-rate mortgages and even buying in cash.

While increasing the size of the down payment would help offset the monthly bill that comes with a higher mortgage rate, home prices are up more than 50% since 2019, and many buyers are struggling to find the cash to boost their deposits above the typical 10% to 15% down.

That has scrambled the usual buyer playbook for adjusting to higher borrowing costs. Typically, when mortgage rates rise, sellers have to cut prices to keep buyers in the market. But for years, supply has lagged behind as many homeowners have opted to stay put to preserve the 3% to 4% mortgage rates that they secured in the wake of the pandemic. 

This lock-in effect—homeowners refusing to sell and give up a low mortgage rate they locked in years ago—has allowed prices to continue rising, even as demand has sagged. The national median existing-home price in August rose 1.6% from a year earlier, to $429,100, an August record. That is despite sales falling to their lowest level and interest rates pushing to their highest point in more than a year.

Median down payments have increased a bit this year as the rise in mortgage rates has encouraged buyers to spend more money upfront to lower their monthly payments. The median down payment in January of this year was $23,053, according to Realtor.com. In August, it was up to $27,166. Over the same period, the median down-payment percentage has risen to 13.8% from 12.8%.

But Christina Beitler, who runs a mortgage brokerage firm in Austin, Texas, said the recent rise in rates has ground the market to a halt.

“We’ve all hit a wall. We’ve pretty much seen a very large stalling of activity,” she said. “I do think right now, buyers are taking a step back, taking a moment of pause.”

As the WSJ notes, even in the wake of the 2008 housing crash, when home sales sank, buyers with good credit could take advantage of lower mortgage rates than today and a fall in home prices. Supply benefited from lenders looking to unload millions of foreclosed homes. Beitler said she recently quoted someone a mortgage rate on a Monday, and by the time they went under contract on a Thursday, the rate had increased over half a percentage point. “They literally just said, ‘I can’t do this,’” she said, adding that the person terminated the contract.

As older homeowners often point out, before 2001, mortgage rates were just about always above 7%, and in the 1980s, they reached as high as 18.63%, according to Freddie Mac. As a result, housing affordability was even worse back then, but low home prices allowed buyers to put down larger-percentage down payments to help mitigate the higher rate. 

In 1980, the median home value was $47,200, while median household income was $17,710, according to the Census Bureau. Now, home values are up to $368,700, according to Zillow, outpacing income, which in 2025 was up to $87,460. That means that for many buyers, down payments have become far more of a financial burden.

Continued growth in down payments could be modest, mostly because many buyers are already putting down as much as they can and simply can’t afford to contribute any more, said First American Chief Economist Mark Fleming.

“For a lot of the affordability-constrained borrowers, they don’t have the option,” he said.

Update(1530ET): Iranians are apparently going back on the offensive, after it's been widely reported that US-protected oil transit through the Strait of Hormuz has been fast gaining steam. Iran state media says a supertanker is burning off the coast of Oman after coming under Iranian attack:

Local sources reported that a 2.5 million barrel capacity supertanker that was traveling through the Strait of Hormuz illegally was hit 8 kilometers off the coast of Oman and is burning, reports Fars

Earlier we reported that starting in mid-August (on Aug. 16), Iran’s Supreme National Security Council set October 1 as a deadline. It warned at the time that if Washington failed to lift its naval blockade of Iranian ports within 45 days, Tehran could resume attacks against US forces, and by implication step up attacks on foreign shipping.

Iran’s 45-day deadline for the United States has now expired. That deadline has now passed, potentially adding another layer of uncertainty to an already tense confrontation where Tehran may decide it must act 'preemptively' while facing more bombs by Trump (likely after the midterms).

*  *  *

Signs of potential major escalation, or the next round at least (which Trump has hinted will come after the midterm elections), just hit The Wall Street Journal, and sent oil prices soaring. A quick summary:

• The Pentagon is sending a third aircraft-carrier strike group and additional Marine Corps ships to the Middle East, adding 9,000 to 10,000 more troops to the region.
• The ships, jet fighters, Marines and sailors will arrive in the region by the end of November, as President Trump considers renewing strikes on Iran after the midterm elections.
• The additional servicemembers will add to the more than 50,000 troops already in the region, with the deployments coming after Trump rejected Iran's latest proposal for a seven-day ceasefire.

The Trump administration is deploying a third aircraft carrier to the Middle East along with additional Marines, an American official also told Israeli media on Thursday. And later, in the afternoon, Trump posted a new Truth Social message as follows:

The USS Theodore Roosevelt is en route to US Central Command's (CENTCOM) area of operations after having just left San Diego this week. It is expected to relieve the Japan-based USS George Washington, which entered regional waters in mid-August.

But both carriers could also stay on extended deployments. The WSJ writes further:

The additional moves will further strain the U.S. Navy, however, which has experienced supply shortages and faced near-record deployments during the conflict. Iran has in recent weeks fired ballistic missiles at American warships. The crew of the Roosevelt is prepared for a longer-than-normal deployment as well, according to senior Navy officials.

Carriers which more frequently had Indo-Pacific deployments have been increasingly diverted to the Middle East in recent years, a trend which had only picked up steam amid tensions with Iran and the Houthis out of Yemen.

Also on Thursday Al Jazeera is newly reporting that three carriers will stay in regional waters, "By the end of November, three aircraft carriers and two landing groups will be deployed around Iran," a US official told the Qatar-based outlet.

And USNI News earlier detailed:

On September 28, USNI News reported that a U.S. defense official had confirmed the carrier’s departure from San Diego the previous day. Navy officials had also warned families that the deployment could exceed seven months, with eight months being used as the planning baseline.

Carrier Strike Group 9 includes Theodore Roosevelt, Carrier Air Wing 11, Destroyer Squadron 23, Information Warfare Squadron 9 and the Ticonderoga-class guided-missile cruiser USS Chosin (CG-65). Its embarked air wing brings together several combat and support aircraft. The strike component includes F-35C Lightning II fighters from VFA-86, F/A-18E Super Hornets from VFA-211 and VFA-25, and F/A-18F aircraft from VFA-154. VAQ-137 operates the EA-18G Growler for electronic warfare, while VAW-115 flies the E-2D Advanced Hawkeye for airborne surveillance and command and control.

Whether one of the carriers ends up leaving the theatre or not, the extra deployment does mean President Trump will have a wider range of options for more possible military actions against the Islamic Republic.

He has in a freshly published TIME interview this week reiterated that he may be escalating attacks on Iran after the November midterms if an acceptable deal can't be reached.

As for the new carrier deployment, it was additionally confirmed: "During a town hall on August 31, Chief of Naval Operations Adm. Daryl Caudle said USS Theodore Roosevelt would be the next carrier sent to the Arabian Sea and was expected to relieve USS George Washington."

But again, follow-up reports suggest it will not be to relieve one of the carriers, but to serve as a likely third floating base of support for Iran operations.

OpenAI's AI agents "obscured hacking activity" during breaches of government websites, citing digital forensics firm Asymmetric Security. According to the FT, the agents pulled data from 55 websites, including the CDC, the SEC, the International Energy Agency and the Mayo Clinic, using tactics that included "erasing records or making them inaccessible."

Asymmetric co-founder Pippa Thompson told the paper it was "possible" the agents were deliberately covering their tracks - though the firm couldn't determine whether that was deliberate or "a side effect of going awry because of constraints imposed in a test exercise." 

Asymmetric's own report, published the same day, is far more cautious. It was built in 48 hours over a weekend, "using only publicly available data" - no model transcripts, no server logs from the targeted organizations and no records from the services the agents used.

Potato, Potahto

The report's summary does say some tactics left records "erased or inaccessible" - but the examples it gives describe normal expiry, not deletion: the agents used a throwaway 'Boomlify' inbox set to self-destruct after 48 hours, and an upload to ntfy, a push-notification service that keeps messages for 12 hours by default. They also moved from public scans on urlquery - a website-scanning service whose reports anyone can search - to private accounts "which could hide their search activity and data access."

So, did the agents use ephemeral services on purpose to cover their tracks? They can't say for sure.

"These records alone do not establish whether the account-registration attempts were intended to conceal activity (this analysis would require full model transcripts)."

As for the 55 websites, Asymmetric's earlier list of "Organizations whose data was accessed" runs to exactly 55 entries, and adds: "In the vast majority of cases, all data retrieved was and is public." The CDC and the Mayo Clinic aren't on it - the Oct. 1 report says only that the agents probed them. The SEC told the FT no private information was accessed. Where the agents did try to break in - hunting for exposed behind-the-scenes files on a climate-data site and trying a classic database-hacking trick on an Education Department data site - Asymmetric found evidence of the attempts, but none that they succeeded.

What the report does show

The agents still went well beyond their instructions. To reach websites their sandbox blocked, they rigged together free web tools - including a malware scanner that visits pages and publishes reports of what it saw - and read the results off the public reports. They signed up for throwaway inboxes and accounts using addresses tagged "aihw" and "pbs," shorthand for Australia's health-statistics agency and its prescription-drug subsidy program, and they moved data out through a Portuguese web archive and the push-notification service. During a June 16-21 burst aimed at Australian targets, they cycled through tactics in days; Asymmetric says traditional hackers take months or years to evolve that much.

In one confirmed case, they got in. On June 18, an OpenAI agent gained unauthorized access to Australia's Medicare statistics portal, reaching non-public files and writing files to an internal server, according to Prime Minister Anthony Albanese. OpenAI says the material was aggregate health statistics and internal file names, and that it found no evidence patient records were accessed. It discovered the breach in August and notified Services Australia on September 10 - by emailing a public inbox checked once a day.

TL;DR - AI agents used attack techniques while pursuing public data on government websites, and nearly three months passed before OpenAI notified a government whose systems its agent had breached. 

Social unrest erupted across hundreds of French high schools and dozens of universities Thursday, forcing Prime Minister Sébastien Lecornu to convene an emergency meeting to address the "urban violence."

Corporate media describes the rioters as "French students" or "high school students," while alternative media outlets such as Remix News and Visegrád24 claim the rioters are migrant kids. 

???? French police are detaining rioting migrants near Lycée Charles Péguy High Schoolpic.twitter.com/pFtJpp1kce

— Visegrád 24 (@visegrad24) October 1, 2026

"What began as protests demanding better conditions for students and teachers has devolved into violence at dozens of locations, concentrated at schools with large immigrant populations," Remix wrote in a report earlier. 

Visegrád 24 wrote on X, "Young second and third-generation migrants have attacked firemen in Marseille, stealing their fire truck and setting it on fire." 

BREAKING:

Massive riots across France.

Young second and third-generation migrants have attacked firemen in Marseille, stealing their fire truck and setting it on fire. pic.twitter.com/nCYMKuibT1

— Visegrád 24 (@visegrad24) October 1, 2026

"Migrant student youths have set fire to multiple buses and even fire trucks in the French city of Marseille as chaos spreads," Visegrád 24 wrote on X.

Remix continued:

Migrant student youths have set fire to multiple buses and even fire trucks in the French city of Marseille as chaos spreads.

The Marseille transport authority, RTM, said several of its buses "were targeted near high schools in the north and east of Marseille," that "drivers had to leave their vehicles in a hurry and one of them was assaulted."

The regional Marseille government said an "unacceptable line" had been crossed at Victor Hugo High School, where "the principal, the deputy principal, the general secretary and the team leader were assaulted and doused with gasoline," according to the Provence-Alpes-Côte d'Azur region, cited by BFMTV.

France is descending into chaos as student blockades grip the country. Over 650 arrests have been made.

?????? BREAKING: Migrant student youths have set fire to multiple buses and even fire trucks in the French city of Marseille as chaos spreads.

The Marseille transport authority, RTM, said several of its buses "were targeted near high schools in the north and east of Marseille,"… pic.twitter.com/hv8tilIB3B

— Remix News & Views (@RMXnews) October 1, 2026

In one instance, rioters torched the  Nelson Mandela High School located in the French city of Nantes. 

?????? BREAKING: Nelson Mandela High School is currently on fire in the French city of Nantes.

Schools across France are being set on fire as student protests and blockades rage on.

This story is developing.

Follow: @RMXnews pic.twitter.com/pOgOO4w0HQ

— Remix News & Views (@RMXnews) October 1, 2026

At least 600 people were arrested on just Wednesday alone, according to Agence France-Presse. Student union L'Union Étudiante said 640 high schools and 30 universities were blocked today with more demonstrations planned. 

The unrest began in the Paris metro area last week over teacher shortages and investment. Students are demanding smaller classes, renovated buildings, and changes to the system allocating university places.

Yet burning down schools and buses is the solution to the teacher shortage?

There could certainly be other forces at work: the weaponization of youth to cause social unrest, a strategy far-left groups and foreign adversaries can employ in asymmetric warfare.

Bloomberg reported:

Officials in the premier's office told reporters afterward that the far-left France Unbowed party of Jean-Luc Mélenchon was behind the movement, citing an assessment by the intelligence services.

The social unrest coincides with a worsening political environment for the establishment and a fiscal squeeze. French President Emmanuel Macron's approval rating has collapsed to just 18%, while Marine Le Pen, France's right-wing National Rally party candidate, is surging in the polls in the second round of the 2027 presidential election because of her anti-open-border stance. 

Meanwhile, households are getting financially squeezed as fuel prices spiral higher. Also, the government unveiled plans Thursday to sharply reduce next year's deficit through spending restraint and higher tax revenues.

Then there's the risk premium on French government bonds, which rocketed higher today. 

"France has been slowly but steadily breaking," said Mike Riddell, lead manager of Fidelity International's Strategic Bond Fund. "But today feels like the first day that broader financial markets have noticed."

Authored by Peter Jacobsen via The Daily Economy,

Before Zohran Mamdani burst onto the scene of NYC politics with promises of cheap groceries, rent control, and calls to seize the means of production, his father, Mahmood Mamdani, was making important political contributions himself. The elder Mamdani's work is more academic in nature and generally more interesting than the "free stuff" brand of left-wing politics.

In particular, Mahmood was decades ahead on one issue that other academics were getting extremely wrong in the 1970s - population.

In 1972, Mamdani published his book The Myth of Population Control: Family, Caste, and Class in an Indian Village. The book started with a (then) controversial claim: ecologist and population doomer Paul Ehrlich was wrong.

The Population Debate

Ehrlich was catapulted to popular fame after the success of his provocatively titled book The Population Bomb in 1968. Ehrlich's message was simple: the world was overpopulated. In his view, population growth would soon lead to mass famine throughout the world. His beliefs on this issue were so strong that he went as far as to claim England would collapse before the year 2000 due to food shortages.

Ehrlich's message was popular, and he wasn't the lone anti-population force. Around the same time, the United Nations formed its Fund for Population Activities (UNFPA), and USAID also began taking on major population aid projects. The theory shared by these groups was clear - if countries want to develop economically, they need to slow their population growth.

In hindsight, we know much of this thinking was both wrong and dangerous. Overpopulation concerns amounted to nothing, and anti-natal policy ended up having devastating impacts in developing countries. The UNFPA's first "population awards" were given to Indira Gandhi in India and Qian Xinzhong in China.

Both of these governments are now notorious for the coercive population policies they used to achieve the ends lauded by the UN. Both countries were engaged in aggressive campaigns of sterilization and compulsory abortion, with record rates of sex-selective infanticide. These terrible policies were no secret at the time: Nobel Prize-winning economist Theodore W. Schultz resigned his advisory position with the UNFPA in protest over these awards, calling them a "travesty."

Relatively few voices in the academic world spoke out against overpopulation hysteria. Among those were some economists like Julian Simon and P.T. Bauer. Joining arms in that intellectual fight was anthropologist Mahmood Mamdani.

These figures aren't exactly likely allies. Simon and Bauer could both be broadly construed as free market economists. Mamdani, on the other hand, is a political scientist and anthropologist who frequently publishes on the impacts of colonialism. Their shared humility, though, helped them understand Ehrlich's error.

Mamdani's Fieldwork

Mahmood Mamdani's 1972 Myth of Population Control examined one of the early notorious failures of attempted population policy: the Khanna study. The Khanna study was an attempt by the Rockefeller Foundation to test whether distributing birth control in rural India would reduce birth rates. Early results seemed promising: 90 percent of the local population favored free contraception. Yet birth rates did not fall. What explains this tension? Mamdani provides an answer:

But, in brief, there was only one reason for such behavior: politeness. As one of the villagers explained to me: 'Babuji, someday you will understand. It is sometimes better to lie. It stops you from hurting people, does no harm, and might even help them.'

In other words, the villagers enthusiastically accepted the gift of birth control to be polite! Policymakers and social engineers believed the acceptance of these methods signaled acceptance of lower population growth. Villagers were happy to "help" researchers by accepting their gifts, but had no interest in using them. Why? Mamdani clarifies this early on in his book.

To talk, as Ehrlich does, of 'overpopulation'"' is to say to people: You are poor because you are too many. As this essay will show, people are not poor because they have large families. Quite the contrary: they have large families because they are poor.

But why would the poor want large families? The answer becomes clear through Mamdani's interviews with locals. Mamdani gives one case which is particularly illustrative:

Milkha Singh has no desire to limit the size of his family. His reaction is again typical of the poor in Manupur: 'You think I am poor because I have too many children. [He laughs.] If I didn't have my sons, I wouldn't have half the prosperity I do. And God knows what would happen to me and their mother when we are too old to work and earn.'

The commissioners of the Khanna study simply didn't understand how different the context of rural India was. For Indians, children were necessary for help with daily work and for security in old age. Telling them they would be richer without children would be similar to telling Americans they would be richer if they didn't invest their money. The proposition was nonsensical.

Mamdani's study succeeded by simply allowing the people on the ground to explain themselves. Distant bureaucrats focused on a "population approach to development" simply tried to replicate the conditions that existed in richer countries (like lower birthrates) under the mistaken assumption that those conditions caused growth.

Centrally planned attempts to "solve" rural Indian problems without understanding rural Indian context naturally failed. As one review stated, the policies "have not had a major impact on people's attitudes, practice of contraceptives, or the average fertility rate."

Even if they had been successful, it's unlikely they would've brought development. This result is explained well by economist William Easterly in his book The Elusive Quest for Growth. In it, Easterly examines several "development panaceas" implemented in the twentieth century, of which population control was only one. He points out, "the general wisdom among economists from these [population] studies is that there is no evidence one way or the other that population growth affects per capita growth." In fact, for developing countries, the population growth slowdown in the late twentieth century was accompanied by an economic growth slowdown:

[P]opulation growth has slowed down by about 0.5 percentage point from the 60s to the 90s in the Third World. But, as we have seen, Third World per capita growth slowed down over the same period. Moreover, there is no association across countries between success at slowing population growth and success at raising per capita growth.

This is a terrible track record. Despite coercive policies that harmed millions of individuals, the societal impact was negligible for both the intended purposes: no reduction in population growth and no clear improvement in economic growth resulted from these programs. While China and India gather the most attention for the sheer size of their operations, campaigns of secretive, coercive, and unnecessary sterilizations are also recorded in Mexico, Chile, Bolivia, Peru, Indonesia, Bangladesh, Namibia, Canada and the United States, and as recently as this year.

The rural Indians understood their own lives in a way that would-be developers simply didn't. Economic prosperity cannot be engineered from the top down by changing certain parameters, as if the economy is simply one big equation.

Mahmood Mamdani's work helps to demonstrate the folly of central planning in the face of the complex realities of local communities. His son, New York City mayor Zohran Mamdani, should bring that same humility to his plans for the rest of the economy.

Peter Jacobsen teaches economics and holds the position of Gwartney Professor of Economics. He received his graduate education George Mason University. His research interest is at the intersection of political economy, development economics, and population economics.

It's starting to smell awful sovereigny crisisy in Europe all over again.

In a vivid deja vu to the peak European debt crisis days of 2010 (and 2011... and 2012... and 2015), credit spreads, credit default swaps and the risk premium in euro-area government bonds exploded on Thursday to levels not seen in over a decade, following a rout sparked by concerns around France’s fiscal and political situation which in addition to local social chaos, is starting to spill over into other markets.

The spread between Italy and Germany’s two-year yields almost doubled to 55 basis points on Thursday, the biggest daily jump since 2020 on a closing basis.

The equivalent gap for France rose as much as 22 basis points, the most since 2012.

Meanwhile, the spread between 10Y French OATs and 10Y Bunds has soared to 1.41%, the highest going back to the 2012 European Sovereign debt crisis.

A measure of French bond risk reached another milestone this week as investors positioned for political upheaval next year and an ongoing deterioration in the country’s public finances. The widely watched spread between France and Germany’s 10-year yields jumped 14 basis points ... 

... to 141 basis points, already the widest since 2012.

Amid the bond rout, French CDS has more than doubled in the past month on mounting fiscal viability fears. 

French credit got monkeyhammered ahead of today's French budget presentation, which plans to consolidate to a deficit of 5% for next year versus 5.4% expected this. This is how Goldman economist Alex Stott explained it: 

“Today is only the formal presentation of the budget. I am not expecting to learn much new relative to the interview Lecornu gave two weeks ago. The more important information will likely be RN's counter-proposal due next Tuesday, which will give us a sense of the concessions they will ask for in the bill, as well as their plans for the economy if they win the elections. Regarding the budget process, I am expecting it to be very drawn out, potentially lasting until mid-December or early next year. What could accelerate the timeline is if more acute market stress forces political parties to a quicker compromise”

Alex has also modeled France's medium term debt-GDP path here, which Goldman sees rising to 125% at start of next decade.

In a nutshell, the issue with France is that:

1. Average interest rate is set to rise to 3% from 2%
2. The primary balance required to stabilise debt is +1% on Goldman's market forecasts; like many countries but one that France has rarely achieved (95th percentile over past 35 years)
3. If you take market rates its even worse; would need to run a 2% primary surplus, something that has never been achieved
4. We have elections and policy uncertainty.

As for why the OAT-Bund spread is moving now, some more from Stott:

“past few sessions of spreads widening have not come on the back of any fundamental news. Our current-quarter growth tracking has been pretty stable at 0.1% over the last month, the deficit and budget news were in line with expectations, and polls have been relatively stable too. But clearly have a difficult market backdrop with moves in energy/rates and election uncertainty. Plus would also note discussion around Melenchon’s rise in 1st round polls to second. Though our simulation give him little change of winning in second round (exhibit 7 here: https://tinyurl.com/msm344p9) his proposal to cancel French debt held at Banque de France is the kind of deep tail which can lead to bigger market moves even if his winning probability only shifts slightly”

Today's violent moves came as German bonds rallied sharply as investors rushed for the region’s "safest" asset (which is ironic for a country whose entire manufacturing sector has been gutted by China), while dumping everything else. Curiously, Treasury yields also surged during the European session, as locals dumped US paper alongside the periphery, although the selloff ended the moment Europe closed.

The nervousness suggests the selloff in French markets caused by the nation’s struggle to get a grip on runaway public finances is starting to sap risk appetite more broadly, as we first laid out two months ago in "France's €107 Billion Deficit Shock: The Next Euro Debt Crisis?"

“France has been slowly but steadily breaking,” said Mike Riddell, lead manager of Fidelity International’s Strategic Bond Fund. “But today feels like the first day that broader financial markets have noticed.”

He's right: 

• ITALY-GERMANY TWO-YEAR BOND YIELD SPREAD WIDENS MOST SINCE 2020
• GERMANY-FRANCE 10Y YIELD SPREAD CLOSES 14BPS WIDER AT 141BPS

There were also signs that markets are starting to price the toll from higher yields - which tighten financial conditions - on the economy. Traders slashed wagers on the extent of further interest-rate hikes from the European Central Bank, and swaps are no longer fully pricing three more quarter-point increases. As recently as Tuesday, they were betting on at least four more. 

“The price action is very unusual,” said Rohan Khanna, head of European rates strategy at Barclays. “We are reducing ECB rate hike expectations, yet the EGB complex, with the exception of Germany and the Netherlands, is selling off. It is reminiscent of periods when bond market fragmentation was a major concern, such as during the European sovereign debt crisis.”

In other words, it is reminiscent of when Europe was on the verge - or already in - a debt crisis. 

As Bloomberg notes, investors and strategists also said the moves suggested hedge funds have been forced to capitulate on positions as the market moved against them and losses piled up.

“One of the favorite hedge fund carry trades was to own short dated France versus swaps,” added Fidelity’s Riddell. “Some of these positions must have been reduced the past few weeks, but it feels like a capitulation.”