Month: May 2026

Fresh Sunday reports say that Israel’s military has made its deepest plunge into Lebanon in nearly three decades, having captured a strategic crusader castle site and UNESCO World Heritage Landmark, Beaufort castle.

It was last captured in 1982, when the IDF later pushed all the way north to occupy portions of Beirut. The army posted photographic proof via its Arabic spokesperson, Avichay Adraee, who issued an image on X showing Israeli troops walking outside the castle. An Israeli flag has also been raised over the stone fortress complex.

The castile overlooks the Litani River, which Israeli forces have been pushing north of, and has stood for nearly 1,000 years – and was at various times used by Crusader knights, Saladin’s Jerusalem army, the Mamlukes, and Ottomans. In the 1980s, fighters from the Palestine Liberation Organization (PLO) even occupied it for a time. The name Beaufort is Old French for “beautiful fortress.”

Soon the heels of the historic site’s capture, the IDF repeated a warning to everyone south of the Zahrani, saying they must evacuate or else face the possibility of coming under attack and thus death or injury.

“Anyone present near Hezbollah elements, facilities or means of combat endangers their life,” an IDF spokesman said. The castle appears to have been shelled by the IDF before the final ground assault.

According to more details via The Times of Israel:

Troops took over territory in the Beaufort Ridge and Wadi Saluki stream area and expanded strikes north of the Litani River after the Hezbollah terror group fired multiple rockets and drones at Israel on Saturday afternoon and evening, forcing schools near the border with Lebanon to close on Sunday.

Footage from Sunday morning showed Israeli and IDF flags flying over the citadel, a strategic medieval Crusader-built fortress with symbolic importance in the history of Israel’s military entanglements in Lebanon. Shelling was audible and smoke rose from the surrounding area.

The fortress, also known as Qalaat al-Shakif, commands sweeping views of the Galilee Panhandle in northern Israel, as well as the Nabatieh area in southern Lebanon, making it a position of considerable strategic value.

Footage of IDF forces taking Beaufort Castle in southern Lebanon. pic.twitter.com/D8Vr0qVfQH

— Amit Segal (@AmitSegal) May 31, 2026

The day prior to the takeover, northern Israel had come under heavy Hezbollah rocket and drone attack. These rocket waves have been stepped up as it’s become clear the Lebanon ceasefire has effectively collapsed.

The past week has seen hundreds of projectiles fired on southern Lebanon. Gong back to early March, over 3,180 Lebanese have been killed, with more than 9,000 wounded – according to Lebanese health officials. The figures do not distinguish between armed combatants or civilians.

Critics of Israel have warned that Netanyahu is trying to sabotage Trump’s efforts to find a final peace deal with Iran. The Israelis have long worried that Washington could in the end settle for a ‘bad deal’ – or one that doesn’t ensure the complete destruction of Iran’s nuclear program and highly enriched uranium.

Lebanon’s LBCI airs footage of the flags of Israel and Sayeret Golani flying over Beaufort Castle in southern Lebanon, north of the Litani River. pic.twitter.com/wCsqvQ6Ue1

— Ariel Oseran أريئل أوسيران (@ariel_oseran) May 31, 2026

The US-mediated truce was really only something that was meant to prevent Israel from bombing Beirut and other government centers once again.

Washington has been trying to put the pressure on the Lebanese government and national army to finally disarm Hezbollah – but this has remained unrealistic as the army is weak and underfunded (ironically in part due to limitations imposed by the US).

Authored by Julio Rivera via American Greatness,

The scariest technology threats are usually the boring ones. Not the giant killer robots. Not the science fiction stuff. Not the dramatic movie scenes where somebody in sunglasses launches cyberattacks from a glowing underground bunker while alarms blare in the background. The truly dangerous threats arrive quietly. Q-Day falls squarely into that category.

To most people, the phrase sounds like something Netflix would slap on a conspiracy thriller thumbnail. In reality, it refers to the moment quantum computers become powerful enough to break the encryption systems that protect modern digital life. And when cybersecurity experts talk about this possibility, they don’t sound excited. No, they sound exhausted—because they know how unprepared much of the world still is.

Encryption is the invisible architecture underneath almost everything people interact with daily. Online banking. Cloud storage. Corporate systems. Government communications. Military operations. Healthcare records. Financial transactions. Satellites. Power infrastructure. Nearly every digital system that matters relies on cryptographic protections developed for a pre-quantum world.

That world is running out of time. Experts increasingly warn that quantum computing breakthroughs are advancing faster than expected, while organizations remain painfully slow to adapt. And corporate leadership still doesn’t fully grasp the seriousness of what’s coming.

A lot of companies approach cybersecurity the way people approach oil changes. They know they’re supposed to deal with it eventually, but they’d rather postpone the expense until smoke starts coming out of something important. Meanwhile, cybercriminals and hostile governments are operating several moves ahead.

The phrase “harvest now, decrypt later” has become one of the most alarming concepts in modern cybersecurity. Adversaries are already stealing encrypted information today with the expectation that future quantum systems will eventually crack the protections surrounding it.

That means the threat isn’t waiting for some future technological milestone. The threat has already started. And the scope of what’s potentially vulnerable is staggering. Intellectual property. Trade secrets. Proprietary AI systems. Pharmaceutical research. Defense communications. Infrastructure schematics. Diplomatic cables. Financial data. Internal corporate strategy. Decades of archived encrypted communications that organizations assumed would remain secure indefinitely.

A lot of executives still imagine cyberattacks as noisy smash-and-grab operations. Ransom notes. Locked systems. Flashing warnings. But some of the most effective compromises are almost embarrassingly subtle.

“Stealer” malware remains devastatingly efficient in the current cyber landscape, quietly extracting passwords, session cookies, authentication credentials, browser data, crypto wallets, and sensitive company access without triggering major alarms. Fake file deletion warnings and fraudulent system compromise messages still trick countless ordinary users into handing over access voluntarily. Some of the oldest scams in the book continue working because panic overrides common sense faster than any firewall can react.

Quantum computing doesn’t replace those existing threats; it magnifies them. And the implications extend far beyond corporate cybersecurity budgets.

If hostile governments achieve practical quantum decryption capabilities before widespread migration to post-quantum cryptography occurs, global security dynamics could shift dramatically overnight. Military communications, intelligence systems, satellite infrastructure, weapons logistics, and secure diplomatic channels all potentially become vulnerable in ways modern governments have never fully experienced before.

That kind of uncertainty changes how nations behave. Secure communications aren’t just a convenience for modern governments; they are foundational to deterrence, alliances, military coordination, intelligence operations, and geopolitical stability itself. Once nations begin doubting the integrity of those systems, mistrust escalates rapidly.

Which is why the recent diplomatic summit between China and the United States should have produced far more discussion about continuing to modernize the increasingly outdated 1979 science and technology agreement between the two countries. That framework belongs to an era before cyber warfare, before AI competition, before semiconductor dependency battles, and certainly before the looming quantum race currently shaping long-term national security strategy.

The technological relationship between global superpowers is no longer some side issue tucked away in academic policy circles. It is the policy circle.

And while governments maneuver strategically, private industry continues lagging dangerously behind. Many companies still rely on fragmented security practices, aging infrastructure, weak endpoint protection, and reactive cyber strategies designed for a threat environment that no longer exists. The time to improve cyber resilience started long ago.

The timeline problem makes everything worse. Migrating critical systems toward quantum-resistant cryptography takes years. Large enterprises often don’t even have complete inventories of where vulnerable encryption exists across their networks.

So, while the public still treats quantum computing like futuristic science fiction, cybersecurity professionals are staring at calendars.

Because unlike Y2K, there may not be one dramatic moment where everybody suddenly realizes the danger has arrived.

Instead, the erosion could happen gradually.

Silent infiltration. Invisible interception.

Archived communications quietly unlocked years later. Competitive advantages disappearing without obvious explanation. State actors obtaining access to sensitive information nobody ever imagined could be exposed.

That’s the nightmare scenario. Not chaos. Not collapse. Simply the slow realization that the digital locks humanity built around its most sensitive information no longer work the way everyone assumed they did.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Less than a month after we mused at Berkshire’s most recent cash hoard which as of March 31 stood just shy of $400 billion, and wondered who Warren Buffett’s replacement Greg Abel will acquire first…

… we got the answer on Sunday afternoon, when Berkshire announced it will acquire homebuilder Taylor Morrison Home Corp. in an all-cash deal worth about $6.8 billion. Which means that after the deal, Berkshire still has $390 billion in T-bills collecting about 3.5%. 

The offer of $72.50 per common share represents a 24% premium to the home builder’s latest closing price on Friday. The deal is expected to close in the second half of this year.

Taylor Morrison is one of the largest community developers and homebuilders in the US and also offers financial services like home loans, titles, escrow and insurance to consumers, according to the statement. The firm has more than 350 communities across 12 states. The existing Taylor Morrison management team, including Chief Executive Officer Sheryl Palmer, will continue to lead the firm, according to the statement.

“We are excited to welcome Taylor Morrison into Berkshire’s portfolio,” Greg Abel, chief executive officer of Berkshire Hathaway, said in a statement Sunday. “Over time, we expect to unify our site-built homebuilding operations into a combined platform enabling us to deliver the dream of homeownership to more Americans.”

This is the first multibillion-dollar acquisition under Abel, who took over Berkshire Hathaway earlier this year after Warren Buffett retired last year.  While investors have been satisfied with Abel’s command over the sprawling conglomerate, some have been hoping that a deal could support Berkshire’s shares, which fell 5.6% so far this year, largely due to Berkshire’s lack of exposure to the AI bubble. The S&P 500 index gained 10.7% in the same period.

It is unclear if the deal signals that Abel believes the bottom for the US housing market is coming, or if Berkshire is buying a homebuilder during a brutal housing labor shortage, giving companies like Taylor Morrison operating leverage despite sky high mortgage rates. In any case, while millions of Americans have been hoping and praying that 8% mortgage will crash the housing market – which has never been more unaffordable – and allow them to enter at lower price, the investor with the biggest cash pile in history just bought a builder outright with cash from under the rug, as a three million home supply deficit clearly overrides the soaring cost of capital. 

Authored by Stephen Innes via The Dark Side Of The Boom,

• Markets can remove geopolitical risk premium far faster than physical energy systems can recover.

• The real post-war story may be strategic reserve rebuilding rather than simply falling oil prices.

• Canada’s emerging Pacific LNG corridor highlights how Asia is increasingly seeking supply routes that bypass Hormuz altogether.

• The shift from efficiency to resilience could become one of the most important structural drivers of oil and LNG demand over the coming decade.

• The U.S.-Iran war may eventually end, but the infrastructure and energy-security investments it triggers could shape global markets for years to come.

Normalization Is Not A Light Switch

The market is increasingly behaving as though the U.S.-Iran war is ending and the oil market is about to return to normal. I suspect that view is only half right. The war may indeed be moving toward its final chapters, but the physical energy system does not heal as quickly as financial markets.

Traders can reprice risk in minutes, while tankers, inventories, insurance markets, refinery supply chains, LNG terminals, pipelines, export infrastructure, and strategic reserves move on an entirely different clock. That distinction may ultimately become one of the defining energy trades of the next 12 months because while markets are already beginning to price the end of the conflict, they are nowhere close to pricing what comes next.

Financial markets are discounting machines. They do not wait for events to occur; they attempt to price conditions months into the future. Once traders become convinced that the probability of a prolonged disruption to the Hormuz disruption is fading, the risk premium embedded in crude prices begins to evaporate immediately. Long positions accumulated during the height of the conflict are reduced. Hedges are unwound. Volatility sellers return. Systematic funds reverse positioning.

The market begins trading the world it expects to exist rather than the one that exists today. That process is already underway, which is why crude can fall sharply long before the physical market has actually recovered. But reopening Hormuz and normalizing the oil market are two entirely different events, and I think investors are increasingly at risk of conflating them.

Think of the global energy system as a giant circulatory network. Hormuz is one of its major arteries. Reopening the artery is critical, but it does not instantly restore the patient’s health. During the conflict, the world did not simply lose supply. It consumed inventories as a substitute for supply. According to the IEA, global oil inventories suffered extraordinary drawdowns as the crisis unfolded.

March alone saw roughly 129 million barrels disappear from storage, followed by another 117 million barrel draw in April. Combined, nearly a quarter billion barrels were removed from global stockpiles in just two months. At the same time, global supply losses reached an estimated 12.8 million barrels per day, while Gulf production remained roughly 14.4 million barrels per day below pre-war levels. Those are not the statistics of a market that can simply flip a switch and return to equilibrium.

They are the statistics of a market that has been living off its emergency reserves.

That is why I believe many investors are focusing on the wrong milestone. The real question is not when Hormuz reopens. The real question is what happens after it reopens. Even if shipping resumes tomorrow, producers still need time to restore output. Tankers must be repositioned. Export schedules need rebuilding. Insurance markets require confidence that transit routes are secure. Refiners must recalibrate supply chains after months of operating under emergency conditions.

The entire logistical ecosystem needs time to regain rhythm. History consistently shows that restoring physical flows takes far longer than restoring access.

The tanker market itself offers an important clue. Many investors assume vessel traffic will immediately return to pre-war levels, but shipowners, insurers, cargo traders, and refiners are unlikely to behave with complete confidence simply because a ceasefire is announced. Months of elevated risk have changed behaviour. Insurance premiums remain elevated. Security assessments remain cautious. Commercial decisions tend to lag political headlines.

In fact, the first weeks following a reopening may actually produce temporary bottlenecks as vessels rush to move cargoes simultaneously. Freight rates could remain elevated even as crude prices fall, creating a market dynamic that appears contradictory on the surface but is entirely consistent with a system transitioning from crisis toward recovery. Markets may celebrate peace while the physical supply chain is still untangling months of disruption.

Yet even that may prove to be only the first chapter of the post-war story. The consensus view assumes that Asia will simply return to business as usual once the Hormuz reopens. I think that assumption misses the deeper lesson of this conflict. If there is one thing policymakers across Asia have learned over the past several months, it is that energy security can no longer be treated as a background issue.

Just as Europe never looked at Russian gas the same way after Ukraine, Asia may never look at its dependence on Middle Eastern energy the same way after Hormuz.

This is where I think the market is missing the next major theme entirely. Most investors are focused on falling oil prices, but the more important development may be what governments do after prices fall. The first phase of normalization is the removal of the geopolitical risk premium. The second phase is rebuilding commercial inventories. The third phase is strategic stockpiling.

The fourth phase is a multi-year energy-security buildout that could reshape energy demand and infrastructure investment across Asia for years to come. In other words, the market is pricing peace while potentially overlooking the structural consequences of the war itself.

For decades, governments optimized their energy systems for efficiency. Inventories were minimized. Storage costs were reduced. Supply chains were streamlined. The assumption was that global markets would always provide sufficient supply when needed. Hormuz shattered that assumption. Policymakers have now witnessed firsthand what happens when a single geopolitical chokepoint threatens the flow of energy to billions of people.

When governments experience a shock of that magnitude, they rarely conclude they need fewer reserves. They almost always conclude they need more.

China is perhaps the clearest example. Beijing was already expanding strategic petroleum reserves before the conflict, but the war has likely reinforced the urgency of that effort. Japan is expanding LNG storage capacity while reassessing its broader energy-security framework. South Korea is reviewing reserve policies and pursuing deeper regional energy cooperation. India continues expanding both crude storage and LNG import capacity.

Across Southeast Asia, governments are increasingly asking how many days of import protection they truly need in a world where energy security can disappear overnight.

But the story does not stop at inventories.

What makes this cycle different from previous oil shocks is that governments are increasingly responding not only by storing more energy but by redesigning how energy reaches them in the first place. The lesson many Asian policymakers appear to have taken from the U.S.-Iran war is that diversification is no longer simply an economic choice. It is becoming a national security requirement.

That realization is already beginning to reshape global energy infrastructure. For years, Canada possessed some of the world’s largest natural gas reserves but lacked the infrastructure to export it efficiently to Asia. Western Canadian gas was largely trapped by geography, forced to flow south into North America rather than west across the Pacific. Today, that is changing.

The completion of Coastal GasLink and the launch of LNG Canada on British Columbia’s Pacific Coast have created a direct energy corridor linking the Montney shale basin to Asian consumers. Additional projects such as Cedar LNG, Woodfibre LNG, and Ksi Lisims LNG could substantially expand Canada’s export capacity over the coming decade.

The significance extends well beyond supply growth. A cargo leaving Kitimat reaches North Asia faster than many competing export routes and, more importantly, bypasses Hormuz entirely. For buyers in Japan, South Korea, Taiwan, India, Thailand, and Southeast Asia, that is becoming a strategic advantage rather than merely a logistical one. The market keeps asking when Middle Eastern supply returns. Policymakers are increasingly asking how to reduce dependence on Middle Eastern supply altogether.

Viewed through that lens, the post-war story is no longer simply about rebuilding inventories. It is about building redundancy. China is expanding storage. Japan is expanding LNG infrastructure. South Korea is strengthening energy-security partnerships. India is increasing import flexibility. Canada is building export capacity. Utilities across Asia are locking in longer-term supply agreements. The common thread is resilience.

In many respects, this resembles what happened after the 1973 oil embargo. The crisis itself eventually faded, but the infrastructure decisions it triggered lasted for decades. Strategic petroleum reserves were created. Pipelines were built. Storage facilities expanded. Import routes diversified. Energy policy changed permanently. The same process may now be unfolding across Asia.

The U.S.-Iran war may eventually fade from the headlines, but the infrastructure investments it has triggered could shape global energy flows for the next generation.

The result is that the next source of oil and gas demand may not come from consumers driving more or factories producing more. It may come from governments buying more. Every barrel that enters a strategic reserve is a barrel removed from the spot market. Every LNG cargo redirected to storage is unavailable for immediate consumption.

Viewed through that lens, reopening Hormuz may not immediately trigger the inventory rebuild many traders expect because governments themselves could become among the largest buyers in the market. The same countries that spent the war drawing down inventories may now spend years rebuilding and expanding them.

The LNG side of the equation may be even more significant. Unlike crude oil, LNG inventories are generally smaller and less flexible. Many Asian economies maintain relatively limited emergency gas reserves. The experience of both the European gas crisis and the disruption in Hormuz has accelerated discussions around strategic LNG storage, additional regasification terminals, expanded reserve facilities, diversified import infrastructure, and longer-term supply agreements.

The conversation is no longer simply about securing the cheapest molecule. It is increasingly about securing the most reliable one.

There is another layer that markets may be overlooking. The coming decade is expected to see enormous growth in electricity demand driven by AI infrastructure, data centres, semiconductor manufacturing, and digital industrialization. Across much of Asia, LNG is expected to remain a critical bridge fuel supporting that expansion. Governments are not merely trying to secure energy for today’s economy. They are increasingly trying to secure energy for tomorrow’s AI economy.

Strategic stockpiling, infrastructure expansion, and structural demand growth may soon be pointing in the same direction.

This is why I remain cautious about the simplistic view that oil will simply collapse back to pre-war levels and stay there. Yes, the geopolitical risk premium can disappear quickly. Yes, tanker traffic can improve. Yes, physical flows can recover.

But simultaneously, inventories must be rebuilt, strategic reserves expanded, LNG security frameworks strengthened, storage facilities constructed, pipelines developed, export routes diversified, and governments across Asia will seek redundancy where previously they sought efficiency. The irony is that the market is currently celebrating the potential end of the war while largely ignoring the structural demand it may have created.

Ultimately, I think the market is still looking at this through a trader’s lens, when it should increasingly look at it through a policymaker’s lens. Traders see peace and immediately calculate how much risk premium can be extracted from the barrel. Governments see the same peace and begin calculating how many additional barrels and LNG cargoes they need to secure before the next crisis arrives. Those are not the same calculations, and they point toward very different futures.

That is why I believe the oil market is entering a far more complicated phase than many investors appreciate. The peace dividend may arrive quickly. The normalization dividend may take months. But the energy-security dividend, driven by reserve rebuilding, strategic stockpiling, LNG infrastructure expansion, pipeline development, and a region-wide reassessment of supply vulnerability, may take years to fully unfold.

By the time markets recognize that distinction, the next great source of energy demand may already be underway. The U.S.-Iran war may be ending, but the race to secure energy for the next one may just be beginning.

Statista’s Consumer Insights survey has been tracking which issues adults in the United States consider to be the most important in the country right now, and how they have shifted over time.

The following chart, via Statista’s Anna Fleck, provides just a snapshot of these, listing the eight most cited concerns out of a possible 20 options, in the most recent survey wave as well as in the survey wave at the start of the pandemic.

You will find more infographics at Statista

Where health and social security came first in the earlier iteration, likely in reference to Covid-19, it had dropped by eight percentage points by 2025/26.

In the meantime, inflation and the cost of living has risen from third position to first position (+9 p.p).

Other notable changes include a drop in the share of people citing immigration in the latest wave and an increase in the share of people picking housing (previously in rank 14 at 22 percent).

Six of the eight most recent most pressing issues are social, with the sole environmental topic of climate change having dropped off the list, coming in 14th position with 23 percent of respondents picking it, following issues such as education (rank nine), corruption (rank 10) and food and water security (rank 11).

As this chart shows, poverty is now on the minds of more U.S. adults, at least more imminently, than before.

Where it had previously tied in 9th position with education in 2019/20 with a 32 percent share of respondents picking it as one the most important issues facing the country at that time, the share had risen to 33 percent in the latest survey wave.

By Peter Tchir of Academy Securities

Fighting While Talking, Horses, and Security

Some quick updates on recent themes. The latest on Iran is front and center, and if you missed this week’s Around the World, it is worth a look. Not just an Iran update, but we also cover Cuba, Russia/Ukraine, the China Summit, and Nigeria (I certainly need to get more up to speed on Africa). We will examine Universal Basic Income and the Job Market in the section we have decided to label Horses. While it feels like we’ve been talking about ProSec in one shape or form for well over a year (because we have), rather than getting “long in the tooth” it is just starting to get traction.

Fighting While Talking

The definition of “ceasefire” is what both sides make of it. It is easy to think of a “ceasefire” as being as simple as both sides “cease firing” at each other, but that is not how it works in the real world.

The concept of continuing attacks (typically but not always limited in scope) while discussing agreements has gone on since people first started picking up rocks and throwing them at each other. From a U.S. perspective, it was an explicit policy of Nixon and Kissinger when dealing with North Vietnam. Negotiate in Paris. Bomb away in Vietnam.

As the much anticipated announcement after Friday’s “situation room” meeting failed to materialize, we are reading of reports of Iran attacking U.S. bases in Kuwait. This, of course, from an Iranian perspective, is in response to some U.S. attacks last week in Bandar Abbas and in the Strait of Hormuz.

We can only assume negotiations are ongoing, as neither side seems prepared to go back to a higher level of military activity, so this is merely both sides reminding the other that they could go that way, if they wanted to.

Also, from our GIG, it has become very clear that the U.S. blockade of the Strait surprised Iran and created leverage that the initial military attacks had not.

The only thing I can say about the negotiations is that I think most people have become, at best, tired of the endless stream of “we are close” announcements. We’ve lost track of how many times markets have rallied on such announcements (often, but not always in the form of social media posts). At worst, there is a cynicism growing that the announcements are merely political attention-seeking moments, coupled with an “opportunity” to trade. The number of people who immediately search the prediction market sites, or look for large trades in oil or stock futures to see if there is some sort of “confirmation” that the headline is new and real, is almost staggering.

While the front end of the crude oil futures market (which is not the same contract as when this war started) responds very well to peace deal announcements, the longer end of the curve is not as responsive. I’ve been picking the January 2027 WTI contract because it is WTI (so it benefits from U.S. energy independence and it is 2027). It is still $77. Below its high of $83, but not much below. It didn’t get above $77 for the first time until late March. This was below $60 prior to the war. I guess this is a long-winded way of saying Higher For Longer On Energy Prices.

The consensus is that we will not see serious re-escalation, but both the U.S. and Iran seem to be having difficulty in framing a deal as a victory (Iran, because it has been hit hard, and the U.S. because we seem to have moved a long way from “unconditional surrender”).

The one thing that I think is starting to sink in is that higher for longer on energy is real, even with a deal, and that is problematic for a world struggling with affordability.

Horses

What the heck are we talking about horses for? What do horses have to do with anything, let alone AI? We have seen commencement speeches where college graduates have booed the mention of AI. We had the rather unfortunate (in my opinion) term “lower value human capital” enter the lexicon. My editors cringe at some of the things I write and say, but wow!

Not surprisingly, we have seen many in the industry downplay the risks to jobs. Even some leaders who until recently had predicted job losses, especially for white-collar employees, reversed course and are now predicting hiring based on increased efficiencies.

I think the jury is still out on this. There are some examples that I’ve seen that seem to indicate the potential for employment growth.

• One story I’ve seen, but didn’t track down for the report is “AI’s ability to analyze X-rays has led to more radiologists.” Seems plausible and certainly fits the efficiency story (though there may be other reasons we have more radiologists).
• Another report that was circulated, and that I found on social media, discussed how the number of tellers in the U.S. rose even with the introduction of ATMs. You can find the post on Twitter by searching for AI ATM Tellers. This was passed around as an example of how people (tellers in this case) adapt to new technology and become more efficient. The reason I did not include a link to this idea is because I think it is quite flawed and did not feel like starting a fight. It did not normalize for a large growth in the number of people working in the U.S. during the phase that ATMs were rolled out, presumably creating greater need for banking. It didn’t discuss that during the first 20 years of the ATM, the GDP of the U.S. quintupled. It was also a period where suburbia grew. I would argue that if you controlled for the number of people who needed accounts, the increasing complexity of personal finances, and the shift in population, this probably more than accounts for why tellers didn’t fare as badly as initially feared with the introduction of ATMs. Anyway, I’ve ranted too much on this subject, but I think it is important that we think critically about what various technologies have or have not done for employment.

Buggy whip manufacturers. If you take an introductory business school class you will likely hear about the “plight” of buggy whip manufacturers.

A great business until the advent of the automobile. The automobile, over a relatively short period of time, destroyed this business. But the automobile was great! The automobile companies did spectacularly well! (Though many of the early, even well-known ones failed, but that is a concept for another day). The country did well as the automobile (and trucking) reshaped the economy for the better! Isn’t this the perfect example of how a new, efficient technology drives growth and jobs as a whole, even if some sectors lose?

• But what about the horses? According to Grok, there were over 25 million horses and mules in the U.S. around 1920. The “horses” were “employed” on farms and for urban transport. Recent estimates put the horse population at under 7 million today. Now, the horses that are alive today are mostly for recreation, sport, and breeding, rather than working. Far fewer horses today, but those horses that are around live the life of Riley compared to what their ancestors lived.
  • If AI is like what automobiles were to humans, we are in for a great ride!
  • If AI is like what automobiles were to horses, we could be in some trouble, though those left working should be in great shape!
    • I’m probably more in the first camp, but this technology seems very different (or maybe it just seems very different as it is applied directly in areas I know and deal with?). I don’t want to think that we might be the first population that is “creating our own extinction event,” but I have read too much sci-fi to keep that thought completely at bay.

In any case, if anyone reading this can even entertain these thoughts, you know that politicians will try to find ways to capture that animosity. My assumption is that the “control group” of people reading the T-Report are all exploring AI. All trying to figure out how to use it. Many, including myself and Academy Securities, are benefiting from the growth of AI. Data centers, AI, and chips are a core part of ProSec but I can see the rising angst playing out in real time.

Politicians interfering with the industry may become a risk to growth and profitability. It isn’t there yet (this admin is extremely supportive of not just the AI growth, but also the electricity generation and transmission to power the industry). Which might be the perfect time to bring up this little section, that doesn’t quite fit into this theme directly, but seems relevant.

• Keep an eye on South Korea. We are seeing a wave of “AI bonuses” being paid. This is being paid to employees of companies who are doing well because of the boom in AI and data centers (chips, memory etc.). That is the “norm” in the U.S. but sounds like it is unusual in South Korea. The stories probably wouldn’t have attracted my attention at all, since it is so logical from a U.S. perspective, but this is a country that just a couple of weeks ago had started to see political figures discuss paying the citizens from the profits/tax revenues generated by the AI success story – which seems like a potential “slippery slope” way of introducing Universal Basic Income (UBI). Or I guess if you are an advocate of UBI, the potential launching point for a much-needed wealth redistribution.

I recently spoke at a conference for risk management (primarily for large financial institutions). I discussed with the conference organizer the number of AI, cyber, and agentic AI presentations. It seemed like about half the conference was focused on those subjects. The organizer confirmed that was correct and was about the same as the prior year, when they really made a big effort to steer the conference in that direction. What was interesting though was that in 2025, the audience was enthusiastic to learn so much. That it was a relatively new area and the topic resonated. While they have yet to receive final feedback from this year’s conference, the initial feedback was that people wanted case studies and examples, not just high-level perspectives. Everyone knows and is trying to use these technologies (at work and at home). No one needs to be told how important they are. How rapidly they are growing. Just take one look at the stock market and you know that. What people wanted to know this year is how the heck are people using them and what is their experience! I found that interesting and it resonates with me, as I’m probably in that same camp. Some successes mixed with sometimes wondering why I bothered trying AI in the first place. I don’t know what this shift means, but it is interesting (and may explain why AI trainers are getting paid boatloads of money ).

If this seems a little more like thinking out loud than having a strong opinion, that’s because it probably is. But thinking out loud seems like a good way to get our hands around this amazing evolution.

Going Production for Security

We finished a great week of meetings in London this past week. I heard a little bit too much about “defense” bonds and a little too little about ProSec bonds for my tastes (Mike Rodriguez, Academy’s Head of Sustainable Finance, has a great deck on the concept). I’m just kidding about that (not the deck, which is great, but that I heard too much about defense bonds).

Europe is shifting towards security and resiliency rapidly

We could drone on and on about how much things have changed in Europe’s positioning on ESG and how quickly they are moving to something that aligns itself with ProSec but it is the end of a short, but tricky week in markets, so we won’t belabor you with details.
What we will do, instead, is present what Treasury Secretary Bessent (@SecScottBessent) put out in a tweet on Friday (the bold is my handiwork):

• For too long, our political class treated efficiency as a substitute for resilience, and consumption as a measure of prosperity.
• Trade policy, industrial capacity, and national security are inseparable. And to allow foreign dependencies to degrade any one of those domains is to allow them to define America’s future. Under @POTUS’ leadership, we are rebuilding domestic production to restore American sovereignty.

I admit there is a lot of politics in his statement, more than I would like, but it does highlight and encapsulate more of what we have been saying and writing about on ProSec.

I do think there is a LOT MORE ROOM to work with close allies and neighbors than this statement hints at, but that will evolve over time, even with the current administration.

In a fireside chat with the CEO of a player in the energy industry, I latched on to the concept that Canada of all places, might be given one of the rare opportunities for a “do over.” Say 15 years ago, both the U.S. and Canada were well positioned to grow their LNG business. The U.S. did so and is reaping the dividends from that! Canada got mired in regulation and has been pretty much left in the starting blocks. But now, with the world looking for alternatives to the Middle East, Canada has been given another chance to get out of the gate and try to take advantage of the shifting needs.

While I already chafe, a little, at the U.S. admin’s rhetoric that comes across as America Only, that is not how Europe sees it. In part Europe doesn’t have an abundance of all the natural resources they might need, so they will be forced to work with trusted partners. The U.S. can and will be a part of that, but semantics and talking points do matter over time. New alliances will be formed or solidified and there is a great opportunity, across the globe, to join in the ProSec theme (I almost said movement, because that is a bit political, but…)

• Here is a link to ProSec 2026 if you haven’t seen it or want a refresh.
• If you have interest in seeing our thoughts on the framework for a ProSec Bond, feel free to reach out to your coverage officer at Academy.

We are in the early stages of shifting from one stable order (rules-based with China flaunting the rules, to another, with more (but not total) independence). See Molotov Cocktails.

Bottom Line

This coming week we should:

• Learn more about the status between the U.S. and Iran. In either case, I think the higher for longer theme for energy prices will sink in and start to price itself into markets even more than it already has.
• Get some more clarity on the job market (within the kind of insanely large margins for error that we just somehow learn to deal with).

I’m sticking with the view that we have a tale of two economies: the AI, data center, and chip economy vs the Affordability economy. They are intertwined, with some degree of overlap.

• The AI/Data Center/Chip economy is okay for jobs for now (the building of data centers and the infrastructure to support them creates a lot of jobs). It has been GREAT for stock market indices.
• The affordability economy is a drag on some consumption and confidence. This part of the economy is sucking more households into it, here and abroad, and that is not good.

Bond yields have dropped in the past week, which has been good and in no small part has been helped by the ongoing barrage of “open the Strait” headlines.

I expect that to reverse course as we are near the bottom end of the range on 10s and I am now fully in the camp that 10s hit 5% before they hit 4%. Any effort to cut rates by the Fed, given the current state of economic data, would likely end up in higher long-end bond yields, because it is increasingly difficult to come up with a narrative to support a cut. That is a very different view than I had before the war started (and some big headline NFP job numbers were released).

It would be nice to get some resolution with Iran so we can move back to all the usual uncertainties like spending, jobs, AI, inflation, the Fed, etc.

In a meandering essay name dropping every dress-to-impress academic figure from Voltaire to Alexis de Tocqueville to Howard Zinn, The New Yorker has set out on a quest to explain how the progressive left can essentially despise the country they live in the name of social justice, while also adopting the perks of “patriotism” so they can own the Chuds.

The publication throws around some curious stats and asserts that patriotism is on the decline because, as they argue, patriotism today requires people to be blind to the injustices of the past.  They note:

“…We seem to be in a down moment. A Gallup poll found that, in the past dozen years, the percentage of people in the U.S. who say that they’re “extremely proud to be American” has plunged by sixteen points. A recent Harris poll noted that roughly four in ten Americans have considered relocating outside the country, with younger Americans even more inclined…”

“Last May, Newsweek published an article with the melancholy headline “Why Dual Citizenship Is the New American Dream.” Some commentators ascribe this to financial prudence, but the trend dates back at least to 2016 and the election of Donald Trump…”

Trump, the ever present and useful bogeyman, is obviously to blame.  The New Yorker, of course, glosses over the fact that the majority of the people who feel “less patriotic” in that Gallup poll are Democrats who are highly indoctrinated by establishment media to obsess over “historical injustices.”  The outlet applauds the decline, in a way.  It’s rooted in the same old DEI and 1619 Project talking points that the woke media has been peddling for over a decade. 

“Patriotism just isn’t cool anymore. Wokeness, having rightly called attention to racial and gender injustices long endemic to American life, helped chill the left’s admiration for the nation…”    

“Ours is a complicated history, made more tortuous by race. Some five hundred Indigenous nations lived here before the first enslaved Africans arrived, in 1619 – a year before the first Pilgrims. That, too, is American history, along with Reconstruction, Jim Crow, segregation, the Great Migration, Black anger, Black humor, and Black culture. This isn’t wokeness; it’s fact. 

Trump’s America has the virtue of simplicity: no initial divisions; no loyalists and patriots, or Native peoples and settlers, or Federalists and Anti-Federalists. He’s not bothered by labor unrest, unfair imprisonment, white-nationalist undercurrents…”

Yes, it is wokeness, and The New Yorker cites some “facts” but as usual they don’t tell the whole truth.  It’s an approximation of history (using cherry-picked facts) based on the political left’s own convenient narratives.  For example, they make no mention of the fact that some of the very first slave owners in US history were black.  Nor do they mention that there were at least 3775 black slave owners in the American South in 1830 and up to 6000 black slave owners by the time the Civil War kicked off. 

They don’t mention that the vast majority of the African slaves present in the American colonies were captured and sold by other Africans.  No, leftists can’t handle that kind of truth, or they deny it, which is why they can never be patriots.

And why not talk about the uglier side of the indigenous tribes, many of which brutalized and enslaved each other long before the first white man ever set foot on the continent?  Why not mention the rape, genocide and cannibalism common among these groups?  Why not mention that when white settlers arrived, many American Indian tribes sought the protection of Europeans from other indians?

Well, The New Yorker doesn’t talk about that because these facts undermine the entire foundation of far-left propaganda:  That the white man is the cause of all the world’s problems. 

In reality, every group of people and every race around the globe has committed brutal acts of conquest and slavery.  No one is innocent.  Everyone is guilty.  White people were just the first group to put and end to it all.      

But what is patriotism?  That is the question The New Yorker seems to ponder, though what they are really asking is:  “Who gets to define patriotism?”  This is the only thing leftists care about, because the power to define is the power to control.  And they want to control everything.  

For example, the publication harps on once again about the “horrors” of January 6th, and labels it a criminal attack masquerading as an act of patriotism.  Again, no mention of the numerous federal agents planted in the crowd to lead protesters into the building, and no mention of the Capitol Police using tear gas and rubber bullets to anger the crowd into violence. 

“What to my mind isn’t patriotism, though it was sometimes couched as such, was the behavior of the assembled throng that, on January 6, 2021, stormed the U.S. Capitol to prevent Congress from certifying the 2020 election. Awful as it was, it felt less like an insurrection than like an ugly mob bent on destruction and self-display…”

It’s interesting that The New Yorker has such a distaste for the J6 “mob” while lavishing BLM with praise and defending the riots as a a proud display of righteous rebellion.  Those mobs were far more destructive and killed numerous people.  All the J6 crowd did was break some windows, walk into the Capitol Building and leave an hour later.      

The New Yorker’s examination is not nuanced or complex at all.  It pretends to be, but it is incredibly simplistic:  If you are a hardcore conservative, a traditionalist, a nationalist, an advocate for controlled immigration, an opponent of DEI, or a MAGA voter, you are “not a patriot.”  Why?  Because the left says so.  Because they want to dictate the terms of patriotism and if they can’t, then patriotism has to go.        

Traditionally in America it has always been the real patriots that get to define what patriotism is.  It’s about the people who want to preserve America’s founding principles, not rewrite them or erase them in the name of “modernity.”  The people who understand that some values are eternal and remain relevant regardless of technological progress or the tides of political correctness. 

It’s about loving one’s country, not merely tolerating it until you can tear it down in the name of building something you think is better.     

Compared to America’s overall accomplishments, the perceived historical “missteps” are meaningless.  They do not matter.  Slavery is irrelevant.  The wars against the native tribes and the “stolen land” are irrelevant.  Jim Crow is irrelevant. Leftists can stew in these past events all they like, but that’s not going to win them any points in determining America’s future path.    

And this is a reality that woke adherents will never accept, because they are not patriots, they are deconstructionists.  Their goal is the dismantle the western world, and America by extension.  Which means, they conveniently turn a microscope on the portions of US history that are considered oppressive by today’s standards and harness those examples as a weapon to attack and dismantle the country as it exists now.  The US is a country increasingly looking to pull back from the brink of progressive revisionism, and they don’t like that.

So, activist entities like The New Yorker turn to gaslighting.  For them, history is nothing more than a Molotov Cocktail.  They burn down the past in order to dictate the present.  They clamor to co-opt the American ideal, but they don’t actually care about it.  They want to wear it as a skin suit while they dismantle it.  True patriotism is beyond their comprehension.  

Summary

• NYT on Sunday: President Trump has toughened the terms of a potential framework for a deal to end the war in Iran.
• Washington seeks to ratchet pressure, but Tehran still not budging on issue of remaining nuclear material.
• Bessent describes the “big mistake” Iran made to Fox – attacking its neighbors & losing friends; also says of the Iranians “they’re going to have to start taking down the wells.“
• Israeli PM Netanyahu says he has “instructed the Israeli military to expand the maneuver in Lebanon” after the occupation of the strategic Beaufort Castle, which he says marks “a dramatic change” in Israel’s operations.

*  *  *

Trump Toughens the Terms of Potential Deal

Fresh Sunday reporting in the NY Times says President Trump has responded to Iran’s refusal to budge on giving up its nuclear material by tightening US conditions as part of a Memorandum of Understanding to get back to the peace negotiating table.

“President Donald Trump has toughened the terms of a potential framework for a deal to end the war in Iran, and has sent those proposed changes back to Iran for consideration, according to three officials,” NY Times writes, but didn’t disclose what the precise changes are.

The report then speculates on where these changes likely focus: “Trump has been concerned about parts of the potential deal that would include unfreezing funds for the Iranians, two officials said.”

Iran’s Tasnim:

If Trump proposes changes to the draft agreement, Iran will make its own revisions as well.

Nothing is finalized. Iran says it will only accept terms it agrees with and is also prepared for the possibility of no deal. pic.twitter.com/KzWnxlWG8G

— Clash Report (@clashreport) May 31, 2026

Citing frustration at the slow pace of Iran’s response to the proposals, it adds, “He has been harshly critical of President Barack Obama for doing the same in the more than decade-old agreement that was signed to curtail Iran’s nuclear program.”

Tightening the proposals is meant to ratchet up the pressure and ‘force’ the Islamic Republic to respond quicker and agree to a deal. However, the Iranians have time and again rejected being ‘dictated to’ by Washington, as its top negotiator Ghalibaf spelled out days ago.

Meanwhile there’s been a recent change in tone when talking about Iran’s military, from Trump himself:

“We’ve actually left their military alone — people would be surprised to hear that.”

President Trump says Iran’s military hasn’t been hit as aggressively because it’s “somewhat moderate” compared to other elements of the regime.

He argues that wiping out “everybody” could cause… pic.twitter.com/gG84lDSrlD

— Fox News (@FoxNews) May 31, 2026

Iran Still Not Budging on Nuclear File

This also comes after a two-hour Friday Situation Room meeting Friday wherein it became clear there was no deal yet to be finalized. According to more from the Times:

The official added that Trump’s changes — a new, tougher proposal — were potentially intended to speed up the process by putting pressure on Iran to accept the framework already sent to Iran’s supreme leader, Mojtaba Khamenei, for approval.

Reaching the supreme leader has been difficult, so any changes to the document, known as the memorandum of understanding, could mean additional delays.

But for pressure to work, there has to be signs Iranian leaders are getting nervous or desperate – and so far they’ve not urged Washington or Pakistani mediators for some kind of grand compromise. Instead they’ve repeatedly sworn that Iran’s highly enriched uranium will never be transferred to the possession of the United States.

Iran Decries Constant False ‘Speculation’

The Sunday latest from Iran’s Foreign Ministry:

Iran’s Foreign Minister, Abbas Araghchi, says “dialogue and an exchange of messages are ongoing” with the United States amid stalled negotiations.

He told Iranian news agency IRNA that “it is not possible to judge until a clear conclusion is reached; everything that is being said now is speculation and should not be taken seriously until it is certain”.

Bessent: Iran’s ‘Big Mistake’

Still, US Treasury Secretary Scott Bessent is busy on the Sunday news shows talking tough. He told Fox in a new interview that Iran made a “big mistake” by attacking its neighbors in the Persian Gulf, within the past week. A US base in Kuwait was also reportedly just attacked by a ballistic missile, which was reportedly intercepted – but falling debris injured five US personnel.

“We had many very good allies who maybe weren’t completely transparent with us on the money — Iranian money that was in their banking systems — all of a sudden became very compliant in terms of being willing to turn over accounts or help us freeze block accounts,” Bessent told Fox News.

“And then the third part was the incredible blockade. I really think it’s the economic blockade of funds and the physical blockade of the ships not going in or out of the Iranian ports,” he added. “Kharg Island is shut down. That’s their big oil loading facilities, and that means that they’re going to have to start taking down the wells,” Bessent said. And yet, there’s nothing officially disclosed to show this is actually happening – though the Iranians have no incentive to publicize it. But time will tell.

Bessent:

A big mistake that the Iranians made was attacking their GCC neighbors, their neighbors in the Gulf, because we had many very good allies who maybe weren’t completely transparent with us on the money, Iranian money that was in their banking systems, all of a sudden… pic.twitter.com/trfonLETXI

— Clash Report (@clashreport) May 31, 2026

IDF Plunges Deep into Lebanon, Captures Crusader Castle

Some Lebanon war latest, via Al Jazeera, as ceasefire unravels:

• Israeli Prime Minister Benjamin Netanyahu says he has “instructed the Israeli military to expand the maneuver in Lebanon” after the occupation of the strategic Beaufort Castle, which he says marks “a dramatic change” in Israel’s operations.

• The Israeli military claims to have killed 900 Hezbollah “terrorists” since the start of the “ceasefire” on April 16. It added that the army had struck dozens of Hezbollah sites since this morning.

• Lebanese Prime Minister Nawaf Salam has accused Israel of pursuing a “scorched-earth policy” as Israeli forces expand their ground invasion.