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Monday, February 16, 2026

2026-02-16

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


Economic Fare:


This is the month the birds came home to roost, at least for the year 2025. While the month over month numbers were almost all positive, some strongly so (a repeat of what we saw last January as well, so beware unresolved seasonality), the benchmark revisions were brutal. Which is likely what the Administration was telegraphing in bright neon flashing lights the past few days. ........



.............. Sure enough, in its report today, the BLS announced that "the establishment survey data released today have been benchmarked to reflect comprehensive counts of payroll jobs for March 2025. These counts are derived principally from the Quarterly Census of Employment and Wages (QCEW), which counts jobs covered by the Unemployment Insurance (UI) tax system. The benchmark process results in revisions to not seasonally adjusted data from April 2024 forward. Seasonally adjusted data from January 2021 forward are subject to revision. In addition, data for some series prior to 2021, both seasonally adjusted and unadjusted, incorporate other revisions."

And here is the summary table the BLS published to adjust for the revised Birth-Death model (there is much more data to today's revisions which we summarize below).


With that introduction aside, this is how the revised payrolls numbers looked. 

Starting at the top, total US payrolls were revised dramatically lower starting with the Jan 2021 data and every month since, and net of the cumulative changes December 31, 2025 total nonfarm employment was revised lower by 1.029 million from 159.546 million to 158.497 million. ..........

Focusing on 2025, the negative revisions to both the year and previous years, meant that the change in total jobs for 2025 was revised from an already low +584,000 to a shockingly low +181,000.  ..........

Putting it all together, we now know with certainty that the flawed Birth-Death model (as well as other smaller seasonal adjustments), led to 2.5 million jobs being revised away since 2019, with negative revisions in 6 of the past 7 years (only 2022 saw a modest positive adjustment) ............


Keen: The Deliberate Deception in Ricardo’s Defence of Comparative Advantage

The theory of comparative advantage is perhaps the most influential and celebrated result in economics. Challenged by a mathematician to nominate an economic concept that was both “logically true” and “non-obvious”, Samuelson nominated the theory of comparative advantage:
That it is logically true need not be argued before a mathematician; that it is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them.(Samuelson 1969, pp. 1-11)
From Ricardo’s original demonstration in 1817, to modern trade theory, the conclusion has remained constant: even if one nation is more efficient at producing everything than all others, it and its trading partners will gain from specialization and trade.

However, there is an obvious flaw in the logic: while labor can hypothetically be moved between industries at will, fixed capital cannot. Ricardo’s own text contains evidence that he knew that this reality invalidated his theory .................

 

In the annals of ruses used to provoke fear in the voting public about government deficits, central bank currency issuance, and fiscal activism, the experience of Germany in the 1920s was a long-standing favourite, that could be wheeled out on demand and have immediate effect. Wheelbarrows full of money being pushed to the local bakery to buy the daily bread, etc. It was a very effective vehicle for advancing the interests of the ruling class because it created a political brake on government action to reduce poverty and maintain full employment. More recently, Zimbabwe became the vehicle. It was equally effective even though it, like the Weimar ruse, was largely based on fiction. Even more recently, we have a new ‘ruse on the block’, the so-called ‘Truss Moment’, which is particularly effective in the UK. The current Labour government is petrified to do anything that might resemble a Labour government because they have a deep-seated paranoid ideation that the ‘City’ is out to get them, and the ‘Truss Moment’ is used as the summary event that apparently justify that delusion. They might have looked to the East, to Japan, to see why the ‘Truss Moment’ was about something quite different to the popular narrative that accompanies the mention of the ill-fated few months in British politics. ...........



Executive Summary:
  • The Fed will run the US economy hot – because, with labour demand and supply now in balance, both demand and supply must expand to keep output expanding.
  • Short-term US real rates will come down further because the Fed will continue to cut even with inflation in the 2.5-3.5 percent range.
  • The US dollar will continue to weaken, given the currency’s dependence on real interest rate differentials.
  • The US yield curve will undergo a ‘bear steepening’ as US inflation expectations ratchet higher. Meaning, T-bonds will underperform cash, as well as other major sovereign bonds.
  • Stocks will continue to outperform bonds.




Market Fare:

Hard-to-shake optimism and a scarcity of long-dated debt have helped drive spreads to historic lows



We have spent a lot of time over the last year debunking “narratives,” which are dangerous to investors, as “narratives” create a rationalization for overpaying for assets. Nonetheless, Wall Street loves a simple story and is happy to jump on a trend with momentum, selling products to unwitting consumers. A good example of that lately has been the “weak dollar” narrative, which has pushed investors to chase foreign assets. .........

There are two very important points to take away from the chart above.
  1. The dollar has been in a very strong uptrend since the Financial Crisis and remains there.
  2. Despite the recent pullback in the dollar, it is trading at its “Neutral Value” and is at the same level it was in 1970. Such certainly does not support the “debasement” or “demise of the US Dollar” narratives.
......................

MSCI data shows the MSCI EAFE Index (ex-US) forward P/E at 15.3 as of January 30, 2026. The level looks reasonable in isolation; however, the key issue is what investors receive for that multiple. Given that earnings growth rates, margins, and sector mix are vastly weaker than in the U.S., overvaluation will matter in those countries, just as it does in the U.S.

On the U.S. side, FactSet reported S&P 500 analysts project 2026 earnings growth of 14.1 percent and a forward 12-month P/E of 21.5, below 22.0 at the end of the fourth quarter. The U.S. multiple still sits above long-run averages, yet the direction matters, as the U.S. has cheapened at the margin while earnings expectations have remained resilient and profit margins have improved. 


BNP Tail risks 2026: BNP Paribas grey-swan analysis (via The Bond Beat)

The biggest market moves are frequently caused by the least-anticipated events – but those events might just be anticipated with a bit of work. Investing in tail-risk analysis is rewarding most of the time, but perhaps unusually so in 2026, at a moment when politics, investor flows, technology and financial risks are all arguably in flux. Here we analyse 10 of these 'grey swans' across asset classes, themes and regions – and aim to explore how investors might best prepare for the unusual…

…Handling grey swans: The bigger market moves often occur when something previously thought of as unlikely suddenly happens (Figure 1). These ‘grey swans’ – considered possible but unlikely – often have an outsized impact both because they surprise and because few have planned or positioned for them…

…US Treasuries: 30y yields exceed 6%


Global Growth Reacceleration is here.

There’s a change in the air.
The gloomy macro clouds of the past few years are starting to lift.
Once weak and lagging parts of macro and markets are starting to stir,
And a major macro theme I’ve been tracking is showing increasing signs of finally kicking full-swing into gear — today’s chart lays it out simply.
Basically what we’re looking at here is a procession of policy pivots from big easing in 2020/21, panic tightening in 2022/23, and then back to easing in 2024/25.
The result?
Major monetary tailwinds are kicking-in right now.
And we are seeing this having a clear positive impact on some of the key areas of the global economy that have previously been in deep stagnation: manufacturing, global trade, commodities, heavy industry.
Real world, real growth, traditional cyclical parts of the economy are waking up from slumber (and seemingly taking back charge in relative stock market performance after a decade+ of software and tech domination).
If this is true, and there is plenty of emerging evidence (such as the chart below), then we are likely to see a robust and durable rally in commodities, emerging markets, and traditional cyclicals. The downside is that tech, crypto, and fixed income likely take a back seat in this type of macro environment (and that’s precisely what we’ve seen playing out over the past few months).


MS (via the Bond Beat): Despite Last Week’s Volatility in Tech, We Point Out Several  Constructive Observations in the Sector
  • Forward revenue growth expectations for mega cap Tech have accelerated to multi-decade highs (+18%).
  • Mag 7 forward P/E has dropped to 27x (12th percentile since early 2023 when the AI thematic gained momentum).
  • Despite questions around whether the market is beginning to enforce capex discipline in a more structural way, our work shows that the high capex/sales factor continues to outperform in both Tech and the overall market.
  • Earnings revisions breadth across Semis, Software, Tech Hardware, and the Mag 7 has started to rebound over the past 2 weeks.
  • AI adopters are outperforming the broader market by 1% T+1-day after reporting earnings on a median stock basis.
  • The US Dollar Index is down 9% Y/Y, a relative tailwind for mega cap Tech given high foreign sales exposure. The Nasdaq 100, for instance, has ~50% foreign revenue exposure.
  • After the sell-off, our Software team led by Keith Weiss sees “attractive entry points in names like MSFT, INTU, CRM, NOW, TEAM, SNOW, SHOP, NET and PANW.” (Please see note link for relevant disclosures.)
  • Bottom line: fundamental tailwinds remain in place for the AI enabler complex, and the AI adopter trade remains underappreciated, in our view.


................. The three-part bottom line: The hyperscalers’ cash flow will increase as a result of all their capex, their humongous spending will boost the broad economy, and that’s bullish for a broadening of the Roaring 2020s stock market!

 


Some thoughts on the recent emotional buying and selling around the "AI Fear Trade", along with case studies and comments on some stocks that I think offer good value in quieter corners of the market

My last post had some thoughts on AI and the general market (plus Tickle Me Elmo’s excess inventory issues). I mentioned some valuation concerns, but I also believe there is a big dichotomy between stocks that occupy most of the headlines and much of the rest of the market. I think there are lots of inefficiencies in the market. Within just the last month, we’ve seen major household names in software lose 30% or more of their value. And these fears are rolling through one industry after another, like a virus that’s spreading.

On Monday, SPGI and MCO got infected. These are two dominant moats that have been beloved by investors for over a decade (with the valuation multiples to prove it). Tuesday, it was real estate brokers (JLL, CBRE). Yesterday, it was the trucking companies that were down 15%, and even stocks like Copart (CPRT) and Ritchie Bros (RBA), salvage auctions (junk yards!) were down 7-10% on AI fears.

In recent weeks, I think there has been a lot of indiscriminate buying and indiscriminate selling (based on whether the consensus is that AI will help or hurt). There is a lot of emotion, and emotion always trumps thoughtfulness in the heat of the moment. What if some of these companies get good at using AI and it actually benefits them?

I have seen this being dubbed the “AI Fear Trade”. It reminds me of the summer of 2020 when everything related to internet, software or ecommerce was soaring and everything in the old world was tanking. Zoom captured everything about pandemic demand: video conferencing was a booming industry. The stock soared in early 2020, reaching a peak valuation of 154x sales. Today it trades around 4x. The stock is down 85% from its peak, even though profit margins have continued to grow nicely.

At the other end were the stocks that were left behind: stodgy industries like banks, manufacturers, oil refineries... ..........



...................... after three years of unprecedented market gains in every asset class, from stocks to cryptocurrencies to precious metals, “Financial Nihilism” has resurfaced to rationalize “speculative excess” and justify abandoning long-term investment strategies that have withstood the “sands of time.”

While Kyla produced a bombastic article to gain social media exposure by suggesting that Gen Z and Millennials no longer believe in saving, investing, or following traditional financial paths, the data shows something very different. ..............

.......... 
Why this trip down memory lane? (Other than the fact that the commercials are hilarious to watch.) Because what is happening today is NOT “Financial Nihilism,” it is the typical outcome of exuberance seen during strongly trending bull market cycles.

While young people, like Kyla, may think that “this time is different,” they lack the historical experience to support such a conclusion. Ask anyone who has lived through two “real” bear markets, and the imagery of people trying to  “daytrade” their way to riches is all too familiar. The recent surge in speculative excess, leverage, and greed is not a new phenomenon. ..........



Bubble Fare:


 




US AI-Related Investment Keeps Breaking Records, With Total Software, Computer, & Data Center Spending Now Exceeding $1T Per Year


..................................... Yet in the meantime, the impact of this investment has been less pronounced from a national accounting point of view than the eye-popping headline figures would suggest. The tech industry has been a notable driver of GDP growth over the last year, but since the vast majority of computer fixed investment comes directly from imports, much of the short-term GDP boost from AI investment accrues to foreign electronics manufacturers (Taiwanese GDP is up 12.4% since late 2024). In the most recent data, AI investment net of imports only contributed 0.3% to the 4.4% annualized pace of US GDP growth.

In other words, the US economy is buoyed by the AI boom but is nowhere near entirely driven by it—meaning these investments have to pay off both as useful productivity tools for end users and a positive use of expensive compute for infrastructure providers if they hope to accelerate American growth. Even if the technology succeeds, losing companies—whether they be Microsoft, Google, or Anthropic—could be burned if their customers end up moving en masse to superior models developed by their competitors.

Still, recently released LLMs can now semi-reliably complete software development tasks that would take a human 6 hours, and capabilities measured in task-length have been doubling roughly every 7 months. Meanwhile, most AI companies still have massive spending capabilities from their other profitable digital ventures, and they’re easily able to tap investors for additional money at extremely high valuations. For now, America’s AI boom shows no signs of slowing down.


Inside Pershing Square’s Insurance Bet

............... Ackman echoes Chris Hohn’s view, too, that bigger can be better. “We believe most of the top ten companies have sustainable competitive moats and long-term secular growth characteristics,” he states. He expects Amazon, Alphabet and Meta to grow earnings at 18-20% over the medium term, versus 8-9% for the S&P equal weight.


AI is going to displace business software because so much of it is terrible quality crap peddled by monopolists. Policy can help. Plus, bitcoin falls, & enforcers may drop the Ticketmaster suit.

...... But before the full news round-up, I want to go into depth on two parts of our economy that got hit badly over the past few weeks in the financial markets. The first is crypto, and the second are software and analytics companies.

We’ll start with bitcoin and the proverbial “crypto winter.”

I’ll be brief, because this one doesn’t matter that much. Crypto has gone down by $1.7 trillion in market value since its October peak, with the decline accelerating last week. I have no idea why there was a market collapse, it may have to do with a hedge fund blowing up or some sort of market mechanic. Maybe we’ll never know. Crypto falls periodically. What matters is that this time there is a lack of confidence in the crypto narrative.

The reason is that the crypto story has fallen apart. That story, briefly, went as follows. The blockchain is a foundational groundbreaking technology, only known to a niche segment, and hamstrung by a hostile political environment. When it becomes legal and mainstream, cryptocurrencies would skyrocket in value as use cases became clear. There were a host of hopeful future events that investors could expect to drive value.

When Trump got elected, the story seemed to play out. Bitcoin jumped in value, and the first “crypto President” appointed friendly regulators. Congress passed the GENIUS Act to legalize "stablecoins" a type of financial instrument based on crypto, and there are now easier ways for investors to buy and sell various coins. There is even a decline in faith in the dollar, which supposedly bitcoin hedges against.

Only, it turns out there are no real use cases for crypto except for money laundering and fraud, and little real interest beyond “number go up” speculation. It’s not a very interesting technology, with AI taking the spotlight and legalized gambling and future markets taking the froth. Even some of the big crypto firms, like Coinbase, have given up on crypto and are just trying to become less regulated dollar-based banks. I suppose there’s still the possibility of a bailout or something, but at this point everyone knows that crypto is a legal way to gamble that is more boring than other ways to legally gamble. And that’s all it’ll ever be.

So that’s the crypto collapse.

The second collapse is far more interesting, and it has to do with a whole set of companies that make software, like Adobe, Zoom, Salesforce, WorkDay, ServiceNow, LegalZoom, Thomson Reuters, and even Microsoft. The S&P Software & Services has gone through “Software-mageddon,” losing a trillion dollars in market value in a week. ........



vs




Quotes of the Week:

MS, via the Bond Beat:
Updated CBO projections of the federal government deficit and GDP growth suggest a quiet period ahead for bond vigilantes and others who hand-wring over the unsustainable nature of the US debt and the inevitable market revolt – the Godot for which they have waited impatiently for a half century.


Charts:
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(not just) for the ESG crowd:

Rising GDP continues to mean more carbon emissions and wider damage to the planet. Can the two be decoupled?

................................. More broadly, since Limits to Growth was published, our understanding of how economic activity is damaging the planet has widened beyond just carbon emissions. Post-growth economics has emerged alongside the study of so-called “planetary boundaries” – hard environmental limits that, once crossed, could have disastrous consequences.

The research focuses on nine ecological processes, from climate change to ocean acidification and ozone depletion, and for each identifies the safe zone in which we should operate.

The most recent planetary health check, published in September, found seven of these nine boundaries were being breached to a dangerous degree. ...........

Their key finding: no nation had met the basic needs of its residents while also staying within its biophysical limits.



Scientists say warming is increasing faster than at any time in at least 3 million years. There is no guide for what comes next

...................... But it’s not clear if the scientific warnings are making a difference in “a post-truth era in which too many people prefer pleasant lies over unpleasant truths,” said Reinhard Steurer, a professor of climate policy and governance at the University of Natural Resources and Life Sciences in Vienna who studies how climate science and policy interact. He said that new studies outlining disastrous scenarios are unlikely to have much impact in the current political climate, but that researchers should keep speaking out, and not surrender to “techno illusions or hopium.”
***** paper: The risk of a hothouse Earth trajectory. Ripple, Rockstrom, Schellnhuber et al.





Breaking up monopolies, taxing billionaires, all good. All too little

This mornin’ the New York Times published a story that should make every progressive in America sick to their stomach. Not because of what it said about climate change. Because of what it said about how power actually works in this country.

Four people. That’s what it took. Four conservative operatives spent the Biden years, the years we were supposedly winning, quietly building the legal and regulatory and political infrastructure to kill the federal government’s ability to fight climate change. ............

This isn’t the normal back-and-forth when administrations change hands. They didn’t tweak the rules. They didn’t roll back a regulation or two. They removed the foundation the rules were built on. Any future administration that wants to regulate greenhouse gases now has to start from scratch. From nothing. ...............



Abstract: The persistent failure of leaders across politics, business, media and, all too often, academia to speak honestly about the climate emergency has brought us to a point where core assumptions of modern society must be questioned. Central among these are issues of equity, both within and between nations, and our delusional reliance on future technologies to defer immediate action.

In this presentation, Kevin Anderson examines the widening policy gap between the temperature and equity commitments enshrined in the Paris Agreement and the actual emissions trajectories of so-called “developed” nations. He argues that appeals to future technologies, selective accounting, and unfounded optimism cannot alter physical reality: “nature will not be fooled” and nor should we be.

Rejecting naïve, techno-optimistic narratives, the talk concludes that no non-radical pathways now remain. We face a stark choice: rapid and far-reaching social and technical change, or a delayed transition marked by increasingly chaotic, and potentially violent, social disruption as climate impacts accelerate. At the start of 2026, the window for making this choice is closing rapidly.


This finite resource will define the century

....................... In 2023, the UN World Water Development Report warned that humanity’s relationship with water had become dangerously extractive, describing modern water use as “vampiric” and noting that around 3.5 billion people already experience severe water stress for at least one month every year. The problem has only become worse since the UN study was written.

A major report by the United Nations University Institute for Water, Environment and Health published last month put it bluntly: we have now entered an era of “global water bankruptcy” in which societies are living beyond their hydrological means. Today, it notes, nearly three quarters of the world’s population lives in countries that are water-insecure or critically water-insecure; around 2.2 billion people still lack safely managed drinking water; groundwater depletion and land subsidence are already irreversible in many regions; and shrinking lakes, rivers and glaciers mean future supplies will become more scarce even if demand stabilises. ...............


Methane levels spiked in the early 2020s when the atmosphere temporarily lost much of its ability to destroy the gas.






How the PT's environmental crackdown undermined its own ambitions for the biome.

Last November marked the first COP summit to take place in the Amazon rainforest. Naturally, the question of how to preserve tropical rainforests was near the top of the agenda, with all manner of discussion about multilateral funding schemes and guarantees for indigenous peoples. Yet these high-level talks neglected many of the local policies and political formations that are equally critical to the future of the biome. To fill this gap, I thought it might be useful to explore the political economy of environmental policies in Brazil: the country that holds roughly a third of the world’s remaining tropical rainforests and around 60 percent of the Amazon. This is a story of two halves. On the one hand, the substantial—albeit temporary—decline of deforestation, which for a time made Brazil the largest individual contributor to global reductions of GHG emissions; on the other, the emergence of a far-right climate-denialist movement that has imperiled these fragile gains. ................


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Sci Fare:

The unexpectedly large impact of genetics could spur new efforts to find longevity genes.



Conclusions and Relevance  
Greater consumption of caffeinated coffee and tea was associated with lower risk of dementia and modestly better cognitive function, with the most pronounced association at moderate intake levels.



[not just] U.S. B.S.:

Countries’ drop in scores in annual table comes amid ‘worrying trend’ of backsliding in established democracies



.......... This is the problem with the fall of the USSR. No one these days has the balls, desire and ability to stand up to the US when it pulls shit like this. Russia’s busy and a lot weaker than it used to be, plus they’re basically just off-brand capitalists now, China doesn’t care and doesn’t have a navy with enough projection power yet, and the EU are spineless (that may be changing somewhat, but not fast enough.) Everyone else is too weak and too scared. .......................



Yves here. Medea Benjamin provides a vivid and distressing report of the intensifying distress in Cuba produced by the US oil blockage. It’s hit the point where going to work and provisioning are becoming close to impossible. Please circulate widely.

Sadly the fact that the Cuba sanctions are illegal, by virtue of not being approved by the UN, is not even deemed worthy of mention. The US succeeded long ago in normalizing what ought to be seen as rogue conduct. ...................


Al Jazeera investigation reveals how US-supplied thermal and thermobaric munitions burning at 3,500C have left no trace of nearly 3,000 Palestinians.



Geopolitical Fare:


An era of worldwide illiberal governance approaches. If the Trump administration has its way, future illiberal leaders will face fewer opponents. Aspiring autocrats will lose the constraint of the United States as a potential opponent. Autocracy will spread.

We speculated for years about how the unipolar moment would end. With the rise of China, would the United States fall into a Thucydides Trap? Would it stretch itself too thin? Would we fall victim to “imperial overstretch?”

How would the United States handle the rise of the rest? The debate was usually about what the US would do to keep things steady – to maintain equilibrium. No one saw the US as the disruptor. But as it turns out, it’s the chief enforcer who is changing the script. ...........


Carefully chosen words and turns of phrase serve as lubricant for US-backed military machines

With Israel’s punitive operation against Gaza now in its fourth month, it’s impossible not to compare Western outrage regarding other conflicts with the selective morality now being applied when dealing with Israel.

Even the briefest assessment of how the West’s innumerable wars have been portrayed in a client media quickly yields irrefutable evidence that the marketing of conflicts, as justified by Western powers, is central to their continued legitimization.

Since the Second World War, the US has been directly and indirectly involved in dozens of wars and coups d'état alongside innumerable covert and overt conflicts across the globe. Given the vast resources required to perpetuate this aggressive global mechanism of influence, its important to recognize that the taxpayers being asked to fund these “forever wars” may never have gone along with them without the assistance and covert alignment of a client media. 

Language and terminology are, of course, a central and fundamental element when you need to portray a war as morally acceptable. This is glaringly obvious when we examine how Western media are portraying the current escalation in Gaza. ....................................................

It now seems shockingly obvious that the Western media is determined to suppress any informed debate around the rationale for conflict when that conflict emanates from the US or one of its clients or allies. It is also now increasingly apparent that even when established media changes its tune, it does so to lubricate a pre-agreed political shift in direction, as is currently happening in Ukraine. .........................


Critical Minerals Are The New Oil

William Knox D’Arcy went to Tehran in 1901 and walked out with exclusive rights to prospect for oil across 480,000 square miles of Persia (nearly three-quarters of the country) for sixty years.

In return, Iran got £20,000 in cash, £20,000 in shares, and a promise of 16% of net profits. The British controlled the accounting. By 1947, Anglo-Iranian Oil Company was booking £40 million in after-tax profit while Iran collected £7 million.

That concession, and the dozens that followed across Iraq, Kuwait, Bahrain, Qatar, and Abu Dhabi, created the architecture of the modern Middle East.

Foreign powers secured the resource before host nations understood what they had. When those nations eventually tried to renegotiate, they found the structural lock-in was already complete. When they tried to nationalize, they got coups. When they finally organized collectively through OPEC, they reshaped the global economy. The whole arc, from concession to confrontation to cartel, took about seventy years.

That arc is now happening in Africa, at an accelerated pace, with critical minerals instead of oil.




......................................................... This is not only uncharitable and overstated, it is also unflattering to the United States. The Americans fought in two European wars for the express purpose of winning an empire for themselves. Theirs is an informal empire, but it is an empire nonetheless, and it is anything but a charity operation. The deal is that the United States gets to run European foreign policy – generally for its own interests – while Euro rulers retain sovereignty in domestic affairs. The U.S. maintains influence in Europe in part by extending security guarantees to the Continent and stationing many soldiers here. ......................

Another point to note about the American empire is this: My American friends are subject to it every bit as much as we Europeans are. This is a massive geopolitical system steered by elites for their own purposes, and European leaders also collaborate in and benefit from this system. The American empire is governed by what Ben Rhodes once called the “foreign policy blob” – an agglomeration of permanent bureaucrats, key journalists and academics, politicians and others. The American president has a substantial role in influencing blob thought and policy, but he is not solely in charge and the blob also influences him. The blob remains adjacent to the Democratic Party and broadly hostile to Trump; and it is the blob, rather than the American president, that commands the loyalty of European politicians. Thus when Nord Stream was bombed at the very least with blob approval, the German Chancellor spent many weeks looking at his shoes and trying not to say anything, but when Trump made overtures to Greenland, the German Chancellor felt a little freer to speak his mind. If Trumpism persists much beyond 2028, the blob will gradually assume more Trumpist characteristics and European leaders will fall into line more completely with Trump’s prescriptions than they have until this point. ..........





................... China is at the start of a good run. Leaving aside climate change and ecological collapse, it’ll last 100 to 150 years, EXACTLY the same as the American run. China’s current rise is just a hegemonic replacement cycle story. Not even as impressive as Britain creating the industrial revolution. This is just taking the lead. China has done NOTHING revolutionary yet. This is a dirt standard hegemonic replacement cycle. Happens every 150 years or so.

(The American run began in the 1880s, when they overtook Britain in industrial production.)

The reason China succeeded when other nations didn’t comes down to three things: competence, the prior hegemon’s help and size. All three were required. ..........



Among the many valuable things I have learned from my esteemed colleague, Ray McGovern, is the importance of listening to what the Russians are saying. One thing that both President Putin and Foreign Minster Lavrov have said, repeatedly during the past 12 years, is the importance of Novorossiya to Russia.

In his February 9, 2026, interview with TV BRICS (and echoed in related remarks), Lavrov reiterated Russia’s demands for a settlement: eradicating “Nazi foundations,” preventing weapons in Ukraine that threaten Russia, and protecting rights of Russian/Russian-speaking people in Crimea, Donbas, and Novorossiya (who the Kyiv regime has labeled as “subhuman” and launched a civil war against them early in 2014).

In a February 10, 2026, speech/ceremony marking Diplomatic Workers’ Day (reported by TASS and mid.ru), Lavrov stated that Russia will “complete the process of returning” Crimea, Donbas, and Novorossiya to their “native harbor” (i.e., full integration with Russia), in line with the “will” expressed in the 2022 referendums. He added that linguistic, cultural, and religious rights of Russians/Russian-speakers in areas remaining under Kyiv’s control must be restored, alongside eliminating military threats from Ukraine to Russia’s security. 

Similar phrasing appeared in his February 11, 2026, remarks during the Government Hour in the State Duma, where he criticized Western “double standards” (e.g., supporting self-determination for Greenland while denying it for Crimea, Donbas, and Novorossiya) and vowed to defend Russia’s position diplomatically.

Novorossiya (Russian: Новороссия, meaning “New Russia”) is a historical term that originated in the 18th century during the era of the Russian Empire. It referred to a large administrative and colonial region in what is now southern and southeastern mainland Ukraine, along the northern coast of the Black Sea and the Sea of Azov.


The term entered official use in 1764, when Empress Catherine the Great established the Novorossiya Governorate (Novorossiyskaya guberniya). This was part of Russia’s southward expansion during the late 18th century, driven by a series of Russo-Turkish Wars (notably 1768–1774 and 1787–1792).

The term was largely dormant after the early 20th century, but was deliberately resurrected in spring 2014 amid Russia’s annexation of Crimea and support for the people of Donbas. Vladimir Putin first prominently used it in an April 17, 2014, call-in show, describing Kharkiv, Luhansk, Donetsk, Kherson, Mykolaiv, and Odesa as part of “Novorossiya” — territories that were added to Ukraine by Bolsheviks without regard for ethnic composition.

I believe that when Putin and Lavrov speak of Novorossiya today they are signaling maximalist goals… Not just holding annexed territories (Crimea, Donetsk, Luhansk, Kherson, Zaporizhzhia) but laying a claim to adjacent regions, which include Kharkiv, Dnipropetrovsk, Odessa, Mykolaiv where Russian speakers live or there are historical ties.

It did not have to be this way… When Judge Napolitano, Mario Nawfal and I interviewed Sergei Lavrov a year ago, the Foreign Minister emphasized that Russia had been willing to let Donbas and Luhansk remain as part of Ukraine if the rights of Russian speakers were guaranteed and the Russian Orthodox Church protected. He also reminded us that the Ukrainian negotiators were the ones who brought this proposal to the table in Istanbul in April 2022. But that preliminary agreement was blown up as a result of intervention by the US and Boris Johnson. ...............................

Because trust isn’t repaired by speeches. Trust is repaired by reversing the toxic and suicidal behaviors that destroyed it.

And those behaviors were precisely what Putin named in 2007:
  • expanding military blocs toward another power’s borders,
  • treating international law as a menu,
  • using economic coercion as a weapon,
  • and then pretending the consequences are “unprovoked.”
Europe is now gasping at the invoice for that policy set: industrial stress, energy insecurity, strategic dependency, and a political class that can’t admit how it got here without indicting itself.

So instead of confession, you get moral performance. Instead of strategy, you get hysteria and cartoon slogans.

Instead of peace architecture, you get escalation management — the art of walking toward the cliff while calling it deterrence. ...................

Putin’s Munich speech — again, not mysticism — warned that when the strong monopolize decision-making and normalize force, the world becomes less safe, not more.

So what did the West do?

It made the “rules-based order” a brand — while breaking rules (international law) whenever convenient. Exceptionalism at almost biblical levels, God’s chosen people.

It expanded NATO while insisting the expansion was harmless.

It treated Russian objections as evidence of Russian guilt — which is circular logic worthy of an inquisitor.

And it nurtured a media culture that could not imagine Russia as a rational actor responding to a pattern of ugly regime change behavior — only as a cartoon villain driven by pathology. Not analysis but theological warfare. ................





.............. Putin’s core argument was brutally simple: a unipolar model is not only unacceptable, it’s impossible.

Not unfair.” Not rude. Impossible. ..................

What was prophetic about Putin’s speech isn’t that he had a crystal ball.

It’s that he understood the West’s incentive structure:
  • A security system that expands by definition (NATO) needs threats by definition.
  • A unipolar ideology needs disobedience to punish, otherwise the myth collapses.
  • A rules-based order that breaks its own rules must constantly produce narrative cover.
  • An economic model that offshore-outs its industry and imports “cheap stability” must secure energy routes, supply chains, and obedience — by finance, by sanctions, by force.
Putin was saying: you can’t build a global security architecture on humiliation and expect it to be stable. Russia had lived through the wreckage of Yugoslavia, Afghanistan and Iraq and that this playbook would be used again and again, with Georgia, with Syria, Libya, Iran and Russia itself if Putin did nothing. .................


...


Book Fare:

The new report to the Club of Rome by Ugo Bardi





Other Fare:


.......... One issue I have spearheaded in my career (along with a handful of other liberty writers) is delving into the psychology and ideology of the globalists. I find their existence to be fascinating. Revolting to be sure, but also fascinating.

The theory which I have held for two decades is that the globalists are first and foremost an occult network of organized psychopaths. Meaning, they seek out people with psychopathic traits (latent or otherwise) in order to recruit and grow their numbers. The common assumption in the general public is that psychopaths are supposed to operate in isolation; that they do not work together because they are too self absorbed to organize.

History shows us that this is simply not so.

From the Mafia, to violent drug cartels, to religious cults, to authoritarian governments, we have seen psychopaths congregate together and cooperate in the worst moments of our timeline. ........................................... 

Psychopaths lack any sense of empathy and function only as parasites who feed on the rest of humanity. This is actually one of the reasons I’m fascinated by them. Not because they are particularly interesting as individuals, but because their existence seems to be a dangerous anomaly. They are less than 1% of the total human population but they cause the vast majority of human tragedies.

The average person has the capacity for evil, there’s no doubt.

People can be driven to all kinds of horrors depending on their circumstances.

But, the majority of us have a mechanism called “conscience” which stops us from committing evil most of the time. It also causes us to feel guilt when we know we have acted in a destructive manner.

If the majority of the population did not have a universal experience of conscience and morality, we would have gone extinct as a species thousands of years ago.

Globalists (psychopaths) do not have this mechanism. In fact, they view conscience as a hindrance, a trait of the weak and the easily victimized. They are a predatory class of human. I would even suggest that they are not human at all, but a mutation or a cancerous intrusion.

When psychopaths achieve overt material wealth they then have easy access to the resources they need to satisfy their impulses at will. At this stage in the evolution of a psychopath they have a tendency to become bored. They begin to chase increasing depravity and darkness in search of a greater dopamine fix. The more degenerate and taboo the activity, the more exciting it is. ...................


"If you tolerate the intolerable, you’re communicating that it’s okay to mistreat you." —Aimee Terese on X

......... The Jeffrey Epstein files suggest that people will do anything and that people will believe anything.

Pizza, hot dogs, white sharks. . . boys, girls, babies, teens, Russian whores. . . celebrities by the score. . . billionaires. . . cannibal orgies. . . vivisection parlors. . . adrenochrome. . . blood. . . dead bodies. . . demon worship. . . a depraved and insane global leadership. . . lemme outa here!

I don’t know what’s real in Epstein and what’s not — but neither do you. What you ought to know is that the colossal inventory of Epstein files is perhaps the greatest instrument of mass mind-fuckery ever seen in the history of Western Civ. How interesting, too, that the deluge of material coincides exactly with the critical capability emergence of Artificial Intelligence as a tool for the manipulation of documentary evidence. And also consider all the years since 2019 that interested parties have had to mess with, destroy, possibly fabricate, and catalog all this stuff. .....................


***** Eisenstein: Reality is Breaking

I hope everyone understands the we are in the midst of the most significant political event since the assassination of John F. Kennedy in 1963. In fact, the release of the Epstein files is even more significant. The 1963 coup was a consolidation and intensification of a system of power that goes back centuries (at least). The Epstein files are its undoing.

I say that in the spirit of prophecy, not prediction. Predictions relegate us to the role of passive observers of likelihoods; prophecies come true only if we make them true. A prophecy comes true only if we recognize the possibility it illuminates, and participate in its fulfillment.

The material in the Epstein Files so severely violates the stories that scaffold our society that there is no way to accept it and keep those stories intact.

Yet there is no way to reject it either. The material is too public, too accessible, too horrifying, and too credible. The dark reality the files portray has escaped its exile to the hinterlands of “conspiracy” to run amok in the general public mind. ..................

We have been here before, my friends. The example that comes most readily to mind is the French Revolution. Then as now, an elite that ranged from the out-of-touch, to the decadent, to the downright depraved presided over a society that was groaning under the weight of its incompetence and corruption. To the guillotine! For a brief golden moment, it seemed that a new era had dawned. Liberty! Equality! Fraternity! Certainly these ideals were worth chopping off a few heads for. Yet once awakened, the guillotine’s thirst knew no limit. The streets ran with blood. Mere anarchy was loosed upon the world. Scarcely a decade later, Napoleon took power and put an end to it, instituting the bureaucratic system in which new elites (and many of the old ones) enacted the same inevitable dramas. 

The French Revolution was a rehearsal, a trial run, whose failure to achieve its noblest ideals can inform humanity at our present crossroads. The stakes are higher this time. If we reenact the same old story, removing the occupants of the roles but not the roles themselves, switching the actors in the drama but preserving the drama itself, removing the corrupt from power but preserving the mindsets and habits of power itself, then our species will have made an irrevocable choice. The technologies of control are so powerful that there will be no more breakouts. Surveillance technology, digital currency, and AI will lock us in a totalitarian nightmare from which there is no escape. 

If, on the other hand, we pass this initiatory threshold, we will enter a new era of civilization. For one thing, the same elites who raped and tortured children also presided over a global system of war, genocide, and exploitation whose victims are no less pitiable. Is it really so different, to sacrifice a child in a Satanic ritual to further one’s personal power, as it is to sacrifice whole populations for geopolitical power? Both are outcroppings of the same mindset, the same dehumanization and instrumentalization of human beings. The lies that shroud each draw on a common source: the legitimacy of the elites, their institutions, and the story-of-the-world that elevates them. When one crumbles, so will the other. .......................

Leaving those conditions unchanged, it leads to endless war, always a new superbug, a new crop of criminals or terrorists. So also will it ensure someday, and probably sooner than we think, a new crop of elite monsters.

Please understand—of course those who have violated trust should be removed from power. That will indeed require a revolution, since we cannot rely on the very institutions that protected them, the institutions they influenced and controlled, to do the removing for us. What kind of revolution shall it be though? Lynch mobs, or truth & reconciliation committees? Punishment, or redress? A revolution of hate, or a revolution of love?

When we the people seize power, will we be ready to hold it responsibly? Doubtless, some on the Epstein list were born psychopaths, but as the saying goes, power corrupts.  ...............

We must not flinch from the revelations that continue to pour in through the widening gap in the fence. Apparently, nothing less than abject horror suffices to shake us from the hypnosis of normalcy. The revelations will continue. A lot of “conspiracy theories” will become agreed-upon fact; others will continue to dance in and out of the flickering borderlands of reality, until our very notion of objectivity will dissolve into a quantum superposition of narratives. Yes, the collapse of sense, meaning, and identity will reach that deep.

Reading the Epstein files and adjacent materials, it is hard for many of us to believe anyone could be that evil. This disbelief is partly why the fence cordoning off most of reality has held for so long. However, even as we face the depravity squarely, we must not allow our horror to divert us onto false diagnoses and false solutions. If we are to end the depravity we must understand it. We must understand power. And we must understand ourselves. The next essay in this series will be titled, Power and Depravity.





Quotes of the Week:

Dr. Zarqa Parvez (via Charles Eisenstein): 
The Epstein files do not represent a scandal to be managed. They represent a structural revelation: that the post-World War II liberal international order, with its claims to moral authority and universal justice, has completely collapsed under the weight of its own contradictions. What remains is raw power, operating without ideological justification, without institutional accountability, without even the pretense of equal justice.



Tweets of the Week:


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