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Sunday, August 30, 2026

2026-08-30

 ***** denotes well-worth reading in full at source (even if excerpted extensively here)


Economic Fare:



I’m not a big fan of Canada’s Prime Minister Carney, the guy who blew two housing bubbles: one in Canada then another in the UK. He’s a neoliberal’s neoliberal.

But unlike most he is neither stupid nor a coward.

It was looking like there would be a Canada/US trade deal, and honestly? I was worried what Canada had given away to get it.

But then according to Carney (the US denies, but the when the Trump administration’s lips are moving, they’re lying), they added a bunch of last minute additions. .........

It’s always hard to tell what is going on in the Trump administration, but these demands seem calculated to force Carney to refuse. He’d lose the next election if he agreed, the backlash would be immense.  ..........

Generally I don’t believe in making deals with Trump. No deals at all. He doesn’t keep his deals and if you make any concessions he always assumes that means there’s more to be had and comes back again with more threats.

The task for Canada is, indeed, to diversify away from the US. Trump is doing us a favor. If he’d offered a slightly shitty deal, we’d have accepted it. If he’d asked only for the moon, not the stars, he’d have gotten it. By making demands no Prime Minister could accept without losing the next election, demands which amount to “we control your trade relations with everyone else going foward” Trump made it possible for Carney to tell him no on the entire package.

And while that will suck for Canada; while Canada will be hurt by a trade war: it’s forcing us to do the right thing rather than put it off or do it slowly. ..........


Carney Reads the Clock Like a Pro Wrestler

.............. And one more detail, still hot from the oven: these are tariffs on goods flowing under CUSMA, the trade deal Trump personally negotiated, personally signed, and personally paraded around like a show pony through his entire first term. He is now tariffing his own trophy. The Art of the Deal has become the art of setting fire to your own paperwork, pissing on the ashes, and charging the neighbours for the smoke.

.............. There’s a hundred years of history pissing itself at this one. During Prohibition, hard men ran Canadian whisky south over this exact border in the boot wells of Studebakers, and now the President of the United States has appointed himself history’s first Reverse Rum-Runner, fighting a trade war to force American bourbon north at gunpoint. Al Capone at least had the decency to smuggle booze people wanted. 

................. Carney’s official statement deserves to be read in full, slowly, with a beer, because underneath the diplomatic wallpaper it’s the most quietly savage document a G7 leader has put a signature to in years. It reads like a bank manager foreclosing on a bloke’s entire self-image, and the bank manager is enjoying it.

.............. Canada spent 18 months building its walk-away power before it walked away: trade partners lined up across three oceans, $25 billion already backstopping affected workers and businesses with more rolling out in the coming days, and infrastructure moving at nation-building scale. When Carney wrote “we will not allow any nation to determine our future,” that wasn’t a speechwriter having a wank. He’d spent a year and a half laying the slab under every word, and you can’t bluff a bloke who’s actually poured the concrete.

Australia, meanwhile, keeps tucking itself in at night with the bedtime story that the alliance will spare us from ever facing that choice. Canada had a signed trade agreement with Trump’s America, mate, ink dry, his own scrawl on the bottom of it, and at midnight last night it bought them a 50 per cent tariff on hockey sticks and a demand to put his bourbon back on the shelf. That’s what a deal with this bloke is worth: the paper, the frame, and fuck-all else.

The old rule said you don’t pick fights with the biggest economy in the world. The Enforcer from Fort Smith just carved the new rule into the boards: you don’t sign contracts with a bloke whose own Supreme Court keeps tearing them up, whose own Chamber of Commerce is begging him to stop, and whose own voters are ten weeks away from taking the keys off him and locking them in the shed.



........ The data highlights how U.S. businesses are reaping the benefits of a windfall from the Supreme Court's February decision to strike down the majority of President Donald Trump's tariffs imposed in 2025. The money is going back to the pockets of companies that paid the import taxes, even though economists say most companies ultimately passed the cost along to consumers.


The idea of pushing US government bonds down the throats of investors is being taken increasingly seriously

................ Remember this the next time someone tells you America’s exorbitant privilege is dead or that its role as protector of the world’s premier safe asset and leading reserve currency is a burden. Just like its current president, it simply gets away with stuff in financial markets that no other country could.

But the idea of pushing US government bonds down the throats of otherwise unwilling investors, through coercion, regulation or other means, is being taken increasingly seriously. It is one way to wage a war with the bond market.





Market Fare:


......... Khandelwal said electrification, surging power demand, artificial-intelligence infrastructure spending, persistent supply constraints, and years of underinvestment are converging to create a perfect storm for a sustained upcycle in hard assets.

Commodities can generate returns while protecting portfolios against energy disruptions and renewed inflation, he said. That defensive role becomes valuable when the toxic mixture starts hitting stocks and bonds.  ..................






The setup: a 30-year coil, a historic El Niño, and a market that isn't pricing either."

Summary: Same story as last week. And the week before that. And the week before that. Path of least resistance for the SPX remains up.

But we’ve entered a period of weak seasonality that runs through mid-October. Short-term breadth deteriorated last week, and rotation is picking up under the surface. Trend continues. Chop and vol come with it.

Ags broke out from their tightest monthly compression in 30-plus years. We’re long and buying, for reasons outlined below. ...............




THE ARGUMENT IN BRIEF
  • → Copper is the tell. Gold was about trust. Energy was about discipline. Copper is about the plainest force in economics — the world needs far more of it than it can dig up, and that gap is not closing. The one metal with a medical degree just printed its highest price in recorded history.
  • → This is supply and demand before it is anything else. Demand marches from ~28 million tonnes today toward ~42 million by 2040 on grids, electrification and AI data centres. Supply cannot answer: only 5% of the last 35 years of discoveries came in the past decade — and the physical tape agrees, with London stockpiles falling for 42 straight days into the steepest backwardation since the 2021 squeeze.
  • → And it sits inside a bigger clock. Equities, bonds and commodities turn on a 30-to-40-year cycle, and the turns are linked. A commodity bull is inflationary — bearish bonds, and sooner or later the thing that ends every equity bull. We are moving from a commodity-consuming world to a commodity-producing one, and that changes what you want to own for a decade.
  • → The tape has spoken — across the board. Copper miners broke out relative to the S&P 500 for the first time in fifteen years. The mining ETFs cleared multi-year bases. This is no longer a chart you watch. It is a chart that has moved.
  • → Part 2 has the names. This piece makes the case. The companion piece — seven copper stocks to own, each with its ten-year weekly chart, the Good Story / Good Chart scores, the valuation trap, the tripwires, and the honest case for just buying the ETF — is where we put money on it
............... One rule governs everything we do, and it has a name: Good Story & Good Chart.

The Good Story is the business — the moat, the returns on invested capital, the balance sheet, whether management allocates capital like owners. The Good Chart is the market’s verdict on that business — the trend, the relative strength, whether large institutions are accumulating or distributing. We act only when the two agree. A great business with a broken chart is a watchlist item, not a position. A great chart on a mediocre business is somebody else’s trade.

For fifteen years, the copper miners were the first of those — a good story the tape refused to believe. Over the last months they started becoming the second. That transition is the entire reason this piece exists, and it is why we score both halves as numbers rather than argue about them in prose — more on that, and where you can look them up yourself, further down. ................

............................ You cannot un-invent this problem with a higher price.

A higher copper price does not make a new mine appear — it makes one appear in fifteen years, if the permit clears and the seismologists cooperate and the government stays bought. That lag, between the price signal and the supply response, is the engine of every commodity supercycle in history. It is why they overshoot on the way up. The cure for high prices is supply, and supply takes a decade to arrive.

Which means, for the rest of this decade, the arithmetic resolves only one way: through price. .................


Part 2 of 2 · Seven copper names from boring to spicy. What the tape is saying, the Good Story / Good Chart scores, the valuation trap, the tripwires — and why simply buying the ETF works as well.



Another week, another intervention.

Like with the co-ordinated intervention in the Yen which I wrote about last time. Small size means that any of these interventions have a dubious effect on the underlying market from the actual bazooka dollars spent.

There has been a ton of garbage produced about this. The actual buyback itself isn’t that noteworthy. What is, is the signal and what it means for risk assets. ..........

................ The “debasement trade” is one that is always narrative explaining price rather than the other way around. 



US financial hegemony is anchored not so much on the dollar as a currency as on the attraction of dollar-denominated financial assets.

As Robert Armstrong put it a few days ago:
When we talk about American financial hegemony, we almost always talk about the US dollar. The resilience of the dollar system is the subject of continuous speculation. But there is a better way to frame the issue: the US’s role as the world’s indispensable investment destination. The world’s savings are pulled to the US as if by economic gravity, crowding into American stocks and bonds and providing its economy with a key support. If the gravity should weaken, the consequences would be large.
As Armstrong goes on to point out, US equities (risky assets) and US Treasuries (supposedly safe assets) have hitherto formed a complimentary sandwich.

Huge deficits in the public sector shovel surpluses inot the private sectoral accounts. Equities ride high. In risk-on phases equities dominated. At times of stress, conversely, investors shifted not out of the dollar and dollar-assets but from equities to Treasuries.

This inverse correlation is not a natural feature of the world. It is the result of a series of deeply held expectations. As Wei Li global chief investment strategies for BlackRock has pointed out, in the current moment, the relationship has broken down.

Bond yields have risen sharply, with 30-year Treasury yields reaching a 19-year high above 5.30 per cent this month. Yet equity markets have kept marching higher, with the S&P 500 only just below record highs hit earlier this month. Traditionally, higher government bond yields should weigh on equities by increasing the cost of capital and raising the rates that are used to discount future earnings in valuations. Equally, when equity markets came under pressure, investors expected bond yields to fall as government bonds rallied. Recently, both relationships have become less reliable.

What is going on? .............



A.I. Fare:


Having laid out, in July, the structural diagnosis that most of the market still refuses to confront: the AI boom is not a technology cycle. It is a credit-driven real-estate-like cycle whose financing architecture depends on the second derivative; the appropriately-named 'Groundbreaker' website has just dropped his next insightful note on what may be the trigger for the market to wake up to the ugly reality beneath the surface of the AI dream.

Trillions in signed compute commitments come due in 2027–2028. The underlying mechanics reveal how the AI boom ends, and when ..........





Crypto Fare:

What happens to Bitcoin's rally when a rule starts selling it?

................. Four sessions ago Bitcoin was trading around $62,800. It opened Monday at $77,727 and touched $79,106 by mid-morning New York time, its highest since May. The question in every note this week is whether the move holds, and there are four ways the next quarter resolves that question.

Either the rally stalls into a range as the supply that is about to appear meets a bid that has already spent itself, or the discretionary money that just came back arrives faster than the supply can absorb it, or the whole move round-trips as the political catalyst fades, or somebody in a committee room chooses a bigger number. Those are very different quarters, and they are not equally likely.

Which one you back depends on being honest about who made this low, because it was not the buyer everyone has spent eight months watching.

The turn happened on Wednesday. President Trump convened a White House meeting with digital-asset executives and regulators and made an urgent case for passing the stalled CLARITY Act. The Treasury announced it would double its long-term debt buybacks, and long yields fell. A market positioned heavily short walked into both at once, and more than a billion dollars of Bitcoin shorts were liquidated in roughly an hour, part of $2.99 billion in liquidations across digital assets that day, the eighth largest such event on record. Bitcoin went from $64,920 to $72,496 without pausing.

The ETF money arrived afterwards. US spot Bitcoin funds took $517.19 million on 19 August, their largest day since 4 May, and $1.92 billion across the week, the best week of 2026 and the best since October 2025.




Quotes of the Week:

“This is set to be a pivotal week for asset markets, since there is still a chance the US Treasury selloff becomes a full-blown crisis,” wrote Kathleen Brooks, research director at XTB.


Hendry: "stan druckenmiller is wrong. there. i’ve been building to that sentence for three drafts and dancing around it with qualifications and affection, which is exactly the kind of behaviour this piece wants to mock. so, stan is wrong. not wrong about bessent fiddling with the signal, he’s probably right about that. not wrong that governments that fight fundamentals eventually lose, that’s as close to a law as this business produces. but he’s wrong about what the fundamentals actually are, he’s wrong about whose balance sheet he’s staring at, and he’s wrong in a way that matters because a man of his standing writing a piece like that in the wall street journal can make the wrong argument feel like the obvious one. and i’m not having that..."


«Remember that stocks are never too high for you to begin buying or too low to begin selling.»
Jesse Livermore, American investor and stock trader (1877–1940)

«It is one of the great paradoxes of the stock market that what seems expensive and too high usually continues to go higher and what seems cheap and too low usually continues to go lower.»
William O’Neil, Founder of Investor’s Business Daily & CAN SLIM (1933–2023)




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(not just) for the ESG crowd:

New research is showing that absolute temperature thresholds, like 1.5° or 2°C, are not as important as the warming rate itself. Systems need time to adapt and can fail early if pushed too fast.

...................... As seen in the geological and palaeontology records, biological and physical Earth systems have always adapted well to gradual change, but poorly to rapid change. A system can easily handle a +2.0°C world if it has centuries or millennia to adapt. But exposing that same system to a warming velocity of >0.3°C per decade strips away its structural adaptation capacity, triggering rate-dependent tipping points long before theoretical stable temperature limits are reached. The great extinction events of the deep past are all linked to sudden change. .............





Sci Fare:

The benefits of all three come down to a crucial piece of cellular kit

........ For generations we’ve treated them as separate prescriptions – sleep restores us, exercise strengthens us and food fuels us. Yet neuroscience is beginning to suggest something rather more elegant: they’re all essentially doing the same job.

What has changed is not the recommendations themselves, but our understanding of the biology beneath them. The more scientists study the brain, the clearer it becomes that cognition is astonishingly energy intensive. Although the brain makes up about 2% of body weight, it uses roughly a fifth of the body’s energy at rest. Every memory we retrieve, every decision we make and every creative insight carries a metabolic cost. Thought itself is an energy-hungry act.

That raises an obvious question: where does all that energy come from? The answer lies deep in evolutionary history.  ...............



.......... One of the biggest misconceptions about consciousness is that it works like a high-resolution camera, passively recording whatever is out there. In reality, your brain behaves much more like a screenwriter, turning a chaotic flood of signals into a coherent, fast-paced plot you can follow. There is simply too much information hitting your senses every second for your mind to process it all in detail, so evolution pushed the brain to prioritize meaning and action over literal accuracy. ..........................



War Fare:




Geopolitical Fare:

The point is not to restrain the American ethos but to change it.

The U.S. is not the whole of the West, but it has imparted to ‘the West’ its peculiar character and ethos. If what is called the West today is dominated by an almost all-pervasive irrationality, we can justifiably trace its source to an ethos that finds its archetypal expression, at least, in the United States.

Now, whatever arguments and counterarguments one may have about the sources of its irrationality, the fact of irrationality in the U.S.-led West is in any case self-evident.

How so? If current trends continue, the ongoing hot wars with Iran and Russia, and the ongoing Cold War with China, could at almost any point quite easily spiral out of control leading to the West’s own destruction – along with, to be sure, the destruction of everything else. At the same time, it was the West itself which created these enemies and precipitated these wars. The utterly irrational and fact-free Russiagate hysteria that reigned in the U.S. starting in 2016, and the resulting knee-jerk rejection and demonization of all things Russian, was itself a major contributing cause of the present war with Russia. And yet, despite the magnitude of the threat, which includes the threat of its own destruction, the West prefers the indefinite continuation of hostilities to any reasonable dialogue with the very ‘foes’ that it itself has created.

The sphere of warfare, moreover, describes only one of several spheres where unreason currently reigns. It can also be found in the spheres of A.I.; bio-technology; such environmental challenges as climate change; and, more broadly, in the imperative of open-ended technological development oriented to power and profit, come what may … To the extent that there is debate over any of these challenges – especially those that have a foreign policy component -- what we universally observe is the substitution of narrative for reality. Preferred narratives either advance the interests of this or that segment of the power elite, or advance the careers of this or that sector of the national security bureaucracy. That these narratives typically ignore what is true and what is in touch with reality turns out to be of little concern. When, in his La defaite de l’occident (The Defeat of the West) the French sociologist Emmanuel Todd refers to today’s U.S. as nihilistic he has in mind exactly this same American indifference to reality and truth (Todd also mentions, in this same regard, the shocking indifference of America’s power elites to the wellbeing of ordinary Americans). ..............



............. Yeah. It does tend to happen like that.

You start pulling on one thread and then the whole thing unravels. Maybe you start with the Iraq war lies. Maybe 9/11. These days for a lot of folks it’s Palestine.

You keep pulling on that thread, uncovering more and more uncomfortable truths, until eventually you discover that pretty much everything you’ve been taught about your world was a lie.

..................... And when you see how unpleasant the truth is and how hard you had to work to realize it, you understand why relatively few people have awakened to it. From the perspective of the ego, it’s a whole lot of effort and discomfort without much in the way of payoff. Forming a truth-based worldview is something you do for its own sake, and if you’re not the sort of person who views truth as its own reward, then you’re not the sort of person who’s likely to pursue it.

But more and more people are choosing truth. More and more people are spotting a loose thread labeled “Gaza” or “Epstein” or what have you, and giving it a curious tug. Despite the discomfort, despite the required effort, and despite the great cost of having to sacrifice the world they thought they knew, they’re pulling that thread, and they keep on pulling. We’re seeing it more and more every year.

And that gives me hope. I don’t know where this is headed or whether we win in the end, but I’m seeing enough movement in human consciousness at mass scale to continue holding out hope for a better world.



Other Fare:


....................................... That’s what living is really about. It’s about truly showing up for your one precious life. Not the story of your life. Not other people’s ideas about your life. Not your arguments with life or your assumptions about what it should look like. Your actual life, as it’s actually appearing, in the here and now, from moment to moment.

Don’t let the madness of our dystopian society trick you into missing out on this. Don’t take your guidance on how to live your life from a profoundly sick civilization.

Take your guidance instead from your own living cells. From your senses. From the felt experience of the living body. From the air in your lungs. From the colors and shades in your visual field. From the vibrations in your eardrums. From the wind on your skin and in your hair.

That’s the only place life is actually happening. Start there. Start there over and over again. Every instant is a brand new beginning.


Muscle Isn't Vanity. Gabrielle Lyon Says It's Preventive Medicine

.................. Lyon’s prescription: do resistance training at least twice a week, and eat enough protein. You’ll need more as you age, she says, and protein delivers essential amino acids your body can't make on its own. The payoff isn't reserved for the young. Lyon points to data showing that even 80- and 90-year-olds can build strength. "There's only one way to do it wrong," she says, "and that's to not do it." .......


Surviving Collapse Together (Even When You Disagree)

................ There are layers to this issue. You might not be as far apart as you believe. Two people can be fully aware of an issue and react differently. You might be surprised by what they know but don’t discuss. I believe more people in the general population recognize that civilization is in a downward spiral but don’t exactly talk about it. You might discover they’re equally concerned but process the information differently. People don’t know how to talk about it. Or they choose not to because what can you really say other than vent?



Fifty-four years ago, a team of researchers at MIT fed population data, resource consumption curves, and pollution metrics into a mainframe computer the size of a shipping container. The machine whirred through calculations and spat out a trajectory that ended in sharp decline. The 1972 Limits to Growth report predicted that without drastic course corrections, industrial civilization would hit terminal constraints by mid-century. At the time, critics dismissed the findings as Malthusian paranoia, pointing to the green revolution and technological optimism as proof that human ingenuity would always outpace scarcity. They were wrong. The variables aligned with terrifying precision. 

A reassessment published by KPMG in January 2026 confirmed what the original MIT model suggested: we are not merely on track for the 2040 collapse—we are eighteen months ahead of the worst-case scenario. The report analyzed thirty key indicators including arable land depletion, aquifer drawdown, atmospheric carbon concentrations, and debt-to-GDP ratios across OECD nations. Twenty-seven of those indicators exceeded the 1972 projections. The remaining three—global shipping volume, semiconductor production, and satellite launches—mask underlying fragility by measuring activity rather than resilience. The study concluded that the “business as usual” trajectory now points to systemic rupture between 2032 and 2038, with cascading failures likely to begin manifesting visibly by late 2027. 

The mathematics does not care about human optimism. Exponential curves have a way of appearing flat until they go vertical. The MIT model tracked five variables: population, food production, industrial output, pollution, and non-renewable resource depletion. In 2026, global population stands at 8.2 billion, having added the last billion in just twelve years. Food production plateaued in 2023 despite increased fertilizer application, indicating diminishing returns on agricultural intensification. Industrial output continues to rise, but energy return on investment—the amount of usable energy extracted versus the energy required to extract it—has fallen below the critical threshold of 15:1 for most fossil fuel sources. Pollution, measured in particulate matter, oceanic plastic density, and atmospheric methane, exceeds the model’s “pollution crisis” scenario by forty percent. The curves converge toward a singularity of scarcity and toxicity.

The Nine Fractures Already Spiderwebbing Through the Foundation
Economic architecture is not collapsing in a dramatic thunderclap. Instead, it is dissolving like limestone in acid rain—slowly, invisibly, until the cavern opens beneath your feet. Global debt reached $307 trillion in early 2026, representing 333% of global GDP. This is not a number that resolves through growth. It resolves through devaluation, default, or dissolution. Central banks in thirty-seven countries are currently piloting Central Bank Digital Currencies (CBDCs), programmable money that carries expiration dates and usage restrictions. The Bank for International Settlements openly discusses “financial repression” as a necessary tool for managing sovereign debt loads. Translation: your savings will be harvested to keep institutions solvent, and you will have no recourse because the money will be code, not cash. ................



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