Global Oil Deficit Doubles On Hormuz: State Of Play

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

The world is now burning through oil faster than it produces it, and the gap is widening. The International Energy Agency doubled its estimate of the third-quarter supply deficit as the Strait of Hormuz stays shut.

The number. The IEA’s August report puts the third-quarter global oil deficit at 1.8 million barrels a day, more than double the roughly 800,000 barrels a day it estimated a month earlier.

The cause. The agency raised its estimate of shut-in Middle East production because of the severe constraints on Hormuz transits, which it assumes persist through August. Barrels that cannot move are barrels that do not count as supply.

What it does to price. A widening deficit is why crude has held near war-era highs. The EIA expects Brent near $85 a barrel this quarter, with US commercial crude inventories staying below their five-year low through the end of 2026.

The American angle. The pain is at the pump, but the cause is a chokepoint 7,000 miles away. This is the argument for energy the United States actually controls, because domestic production cannot refill a strait that a foreign navy has closed.

The relief valve. The IEA and EIA both expect the balance to loosen once the disruption eases and idled barrels return, with Brent forecast to fall toward $69 in 2027. That assumes Hormuz reopens, which is a policy question, not a market one.

The risk in the forecast. Every one of these projections rests on the war not getting worse. A wider deficit with thin inventories leaves no cushion, so a single further shock, another tanker hit, or a broadened conflict would move prices further and faster than a normal market would.

Worth watching. Whether the deficit keeps widening into the fourth quarter, whether US inventories can hold, and whether the assumed reopening of Hormuz arrives on the schedule the forecasts quietly depend on.

The headline is a number, but the lesson is structural. Global oil is hostage to a single waterway, and when that waterway closes, the shortfall shows up in weeks and lands on American drivers. The forecasts promising relief in 2027 are really forecasts of the war ending, which no spreadsheet can guarantee. The durable takeaway is the one this readership has made for years: the more energy a country can produce, refine, and ship without asking permission from a hostile regime, the less a strait on the far side of the world gets to set the price of a tank of gas.

-The Editors

Energy · Upstream of the Swamp · August 19, 2026

This piece does not constitute financial, investment, or legal advice. Investing involves risk; please consult with a qualified professional before making any financial decisions.

Sourced from PRICKLY PEAR

Pentagon Pours Billions Into Drones: USA Military Pivot?

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

The Pentagon’s next budget bets heavily on drones, with tens of billions aimed at building an autonomous force. The push is the right lesson from modern war, and the open question is whether the Pentagon can buy fast enough to matter.

The fiscal 2027 request devotes about $54 billion to drone development, a central piece of what Defense Secretary Pete Hegseth calls a drive for “UAS domain dominance” by 2027.

It sits inside a $1.15 trillion base defense request, among the largest in modern history, that the Senate Armed Services Committee backed when it marked up its version of the policy bill in June.

Why drones. Ukraine settled the argument. Cheap uncrewed systems have destroyed tanks, ships, and aircraft worth orders of magnitude more, and mass and attrition now beat exquisite platforms in the fights the US is most likely to face.

The procurement problem. Money is not the hard part. The Pentagon’s buying system is built for a handful of expensive systems bought slowly, not for thousands of cheap ones fielded fast, and Hegseth’s own reforms concede that the acquisition machine is the bottleneck, not the budget.

The counter-drone half. The same threat runs both ways. Every dollar spent fielding drones has to be matched by dollars to shoot down the enemy’s, and counter-drone defense is the less glamorous, equally urgent side of the same line item.

The industrial question. A drone force at scale needs a manufacturing base that can turn out uncrewed systems by the tens of thousands, much of it dependent on components and supply chains that run through China, the very adversary the buildup is meant to deter.

Worth watching. Whether Congress funds the drone lines in the final bill, whether the acquisition reforms actually speed fielding, and whether US industry can build the numbers the strategy assumes.

Betting on drones is the correct call, and it is encouraging to see a defense request that reflects how war is actually fought rather than how it was fought a generation ago.

The danger is mistaking appropriations for capability. A force of thousands of autonomous systems requires a buying process and an industrial base the United States does not yet have, and dollars committed in a budget document do not become weapons in the field without both. The right measure of this push will not be the $54 billion. It will be how many drones reach how many units how fast, and whether the machine that spends the money can move at the speed the threat demands.

-The Editors

National Security · Upstream of the Swamp · August 19, 2026

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A Saga of Politics and Public Ed in Tucson

By Craig J. Cantoni

Written by Craig J. Cantoni

Estimated Reading Time: 7 minutes

A new book details the struggle to establish one of the best high schools in the nation in the face of anti-intellectualism, racial politics, and resentment.

TUCSON – There are hundreds of books and thousands of both scholarly and polemical articles theorizing about the sorry state of American K-12 public education.  One book cuts through the clutter and conflicting theories, showing the hurdles that get in the way of excellence and what it takes to overcome them.

A National Treasure:  A Political History of University High School, by John Hosmer & Paul Karlowicz, 2026, Stillwater River Publications, West Warwick RI, 410 pages.

Unfortunately, the book is only available to alumni of University High School.  (An alumnus loaned his copy to me.)  As such, this review will serve as a substitute for the book and is thus longer than normal.

State and National Rankings

Tucson’s University High School (UHS) is the top public high school in Arizona and ranks in the top 15 or so nationally, judging by test scores, the percent of students taking advanced placement courses, and the percent of graduates going on to college, often to some of the top universities in the country and often with scholarships in hand.

Clarification:  Arizona is a leader in charter schools, and a case can be made that some charter schools—which are also public schools—rank high, too.  BASIS Charter Schools is one of them.  It was founded in Tucson 22 years after UHS was founded and has multiple campuses in multiple states.  There are conflicting opinions on whether BASIS or UHS is better.

The Vision and Early Years

UHS didn’t begin as a as a full-fledged, stand-alone school.  It began in 1976 as what was known as a “project school” in the Tucson Unified School District (TUSD) and was located on the campus of Tucson High School.  Later, it moved to the campus of Rincon High School, which is another TUSD high school.

The book details the vision of the founders and the trials and tribulations that they and the early faculty experienced in getting the school launched.  They had remarkable perseverance and dedication to students.

The vision was for UHS to be nationally recognized for academics and to be a school where gifted students would be challenged and could excel.

To realize the vision, the founders knew that it was necessary to have a faculty with advanced degrees in the subject matter they taught, that conveying knowledge was more important than following the latest pedagogical fad, and that the school had to have enough independence to be protected from the bureaucracy, politics and in-fighting of the TUSD school board and system.

A limiting factor that continues somewhat today is that middle schools, which are the source of incoming students for UHS, were not up to par in preparing students for rigorous academics.  This in turn made it difficult for UHS to meet diversity commitments.

Downsides of Sharing a Campus

Sharing a campus with a regular high school had few upsides and many downsides.  An upside was that students could participate in band and other extracurricular activities at the host school.  A downside was that UHS was treated as a stepchild and allotted the worst classrooms and facilities on campus.

A worse downside was that students, faculty and administrators at the host school—and at TUSD in general—resented the success of UHS and attributed it to elitism and privilege, in a manifestation of one of the deadly sins of human nature:  envy.  Equally damaging, the TUSD school board and administrators didn’t want to give up their power and hierarchical thinking.

It didn’t help that there was, and continues to be, an undercurrent of anti-intellectualism throughout TUSD and Tucson, as there is throughout much of America.  Excelling at sports seems more important than excelling at academics, resulting in jocks getting more recognition than the studious, or “eggheads” in the demeaning vernacular.  Sadly, this cultural norm is reinforced at the Tucson-based University of Arizona, where the football coach is paid more than the university president, and where star athletes are feted in the local media but cancer researchers are not.

Race and Ethnicity   

Of course, this being America, race and ethnicity came into play in repeated attempts to stymie the success of UHS.  Because much of the book discusses the huge amount of time, energy, and money that was expended on these issues instead of on classroom teaching, this review will follow suit.  As will be seen, if diversity is indeed a strength and a worthy goal, it comes with a cost, a cost that is not incurred in homogeneous countries with stellar test scores, such as Japan, S. Korea and Norway.

One of the saboteurs of UHS and its mission was TUSD school board member Raúl Grijalva.  He headed the Grijalva political machine and was a leading member of the local Democrat Party, which has held a political monopoly for decades in the city of Tucson and Pima County.  He would later be elected to the US House of Representatives.  After he died, his daughter Adelita Grijalva was appointed to succeed him in Congress.  Prior to that, she was on the Pima County Board of Supervisors and on the school board of TUSD, where she had the same bias against UHS as her father.

The two Grijalvas and others complained that UHS had become a school primarily for white students.  To that point, the student body was only 7% or so Mexican American, in a city where, today, roughly 43% of residents are Mexican American, with an additional small percentage of African Americans and Native Americans.

Was this due to conscious or subconscious racial discrimination at UHS, or white privilege, or a legacy of settler colonialism and oppression, or any of the other nostrums du jour made popular by today’s grievance industry?

I think not.  That’s an opinion formed from attending a university that had a large Mexican-American student body, and from living in the barrio of San Antonio and in Phoenix and Tucson for a combined total of over 40 years.

That gives me considerable awareness of the challenges facing Mexican Americans and other Latinos.  This awareness is heightened by the fact that their challenges are similar to those of my Italian forebears and other impoverished immigrants from Europe—immigrants who also had to struggle through an assimilation gauntlet and were seen by many in the WASP establishment as inferior.

There is no evidence that UHS leaders wanted to exclude Mexican-American students.  To the contrary, there is plenty of evidence that they wanted to include them. However, UHS faced the headwinds of being in a city with a high poverty rate and being part of the Tucson Unified School District (TUSD), a district with abysmal test scores.

It sounds counterintuitive, but it didn’t help that the city was under court-ordered desegregation for over 40 years.  Addendum B of the book has the transcript of an interview with TUSD Superintendent Gabriel Trujillo, who detailed how the desegregation order tied the district’s hands in making needed changes.

Race was also injected into the curriculum by interlopers with a racial agenda.  For example, the school was criticized for its AP course on American history beginning with the English landing in Boston (actually, Plymouth) in 1620 and not with the migration of humans across the land bridge in the Bering Sea 30,000 years ago.

On further reflection, it could be instructive to begin the history course at the land bridge.  Students could be asked an essay question:

What does world history suggest would have happened if present-day Alaska and the rest of North America had already been populated, and if the new arrivals from Siberia had better weaponry, organization, communication methods and transportation?  Support your answer with examples through the ages on different continents and by different peoples.

An Aside about Race

Editorial comment:  The prevailing racial nonsense of today claims that white people are monolithic and homogenous in values, history, wealth and privilege; and are equally guilty of racism and oppression.   A ridiculous corollary is that the diverse ethnocultural groups labeled as white where never disadvantaged minorities or victims of persecution and racism.  Equally ridiculous, the conventional nonsense holds that non-white ethnocultural groups have never been guilty of oppression, slavery, imperialism, settler colonialism or racism.

Sarcasm alert:  The last point means that Mexican Americans have nothing to feel guilty about, because neither the Spanish Empire nor the nation-state of Mexico ever committed such evils.

Educators who reinforce such nonsense should be fired for malpractice.

Accusations of Classism

Along with being accused of discrimination, UHS was accused of recruiting primarily from wealthy neighborhoods on the eastside of Tucson.  Truth be told, those neighborhoods are not very wealthy, at least not relative to truly wealthy enclaves on the East and West coasts, enclaves with top-notch private and public prep schools that compete with UHS for national prominence.

It’s astonishing that UHS can compete with schools like that.  This should be celebrated in Tucson and should be a major selling point for the Tucson Chamber of Commerce.

The Impact of School Choice

Through outreach, affirmative action, and tweaks to its admission criteria and tests, UHS did increase diversity, but at the margins.  Ironically, the biggest impetus for change would come from the Republican-controlled state legislature in Phoenix.

Legislation was passed to further school choice across the state.  One measure made it easier to establish charter schools; another allowed parents to claim educational tax credits on their tax returns; and still another mandated open-enrollment, meaning that students could enroll in public schools outside of their home district.

The impact on TUSD was dramatic and revealed how dissatisfied parents were with most of its schools.  So many students left the district for better schools in other districts that enrollment declined at TUSD’s traditional high schools by 50% between 1999 and 2019.

On a personal note, I knew an African American who worked and lived in the center city of Tucson.  To escape TUSD, he and his wife enrolled their son in the far southeastern suburb of Vail, in the unincorporated county, in a district known for having good public schools.  It meant that he and his wife had to take turns driving 45 minutes each way to take him to and from the school.

As enrollment was declining at TUSD’s traditional high schools, it was booming at UHS, where enrollment increased to 1,200 students from less than 700, driven in large part by students from other districts now being able to attend UHS, including so-called minority students.

TUSD, which was in a dire financial condition, suddenly became a fan of UHS.  That’s because the district got $6,000 in state funding for every student enrolled at the school.

Diversity also boomed at UHS.  The book claims that by 2020, the racial/ethnic make-up of the school closely matched the racial/ethnic makeup of Pima County:  47% Hispanic, 48% Anglo, and 5% African American.

According to the Census Bureau, the Hispanic population of Pima County is 37.3%.  This means that the percent of Hispanics at UHS is 10 percentage points higher than the percent of Hispanics in Pima County.

Hurrahs and Kudos

For all of its success, UHS was never able to have its own campus, and it failed at trying to become a charter school.  But those setbacks pale in comparison to the tremendous accomplishments of the founders and faculty, due to their perseverance, fortitude, hard work, and commitment to students.  By their example, they’ve shown that it’s possible for the US to excel in public education.

Hurrahs and kudos to them.

-Craig Cantoni

Mr. Cantoni is an author, activist, and retired business executive.

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Emergency Docket Surges At SCOTUS

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

The Supreme Court’s summer is anything but quiet. A crowded emergency docket has the justices weighing Trump’s White House ballroom, his mail-ballot restrictions, an Apple contempt fight, and an execution, all off the normal calendar.

The pileup. In the middle of the justices’ recess, the emergency docket has flared with major requests landing at once, forcing decisions on a compressed timeline and without full briefing or argument.

The ballroom. Trump is asking the Court to lift an injunction blocking construction of the White House ballroom before it takes effect August 21, arguing the project is vital to national security and already past the point of return.

The mail ballots. The administration wants the justices to revive its mail-ballot restrictions, built on a March directive to compile a verified-citizen list and have the Postal Service refuse ballots to voters not on it. A lower court blocked the policy, and time is short before November.

The Apple fight. Apple came to the emergency docket, asking the Court to pause proceedings after a judge held it in contempt for imposing a new 27% commission on purchases routed outside its App Store, in defiance of an order in its long-running clash with Epic Games.

Why the docket matters. These are consequential questions decided fast, with thin explanation and no oral argument, which is why critics across the spectrum worry the emergency track has become the main track for the biggest disputes. Speed is the point, and speed is the problem.

The stakes for November. The mail-ballot case is the one with a clock. If the justices act, the rules for how millions vote could shift weeks before the midterms, which is exactly the kind of late change that erodes confidence whichever way it breaks.

Worth watching. How fast the Court moves on the ballroom before the August 21 deadline, whether it touches the mail-ballot policy before the election, and whether it grants Apple a pause while the larger case proceeds.

The rise of the emergency docket is a quiet institutional story with loud consequences. Decisions that once came after months of briefing and argument now arrive in days, often unsigned and unexplained, on questions as weighty as who may vote by mail and what a president may build on public grounds. Conservatives have their own reasons to be wary of a Court that governs by stay order, because the tool that serves one administration serves the next, and a judiciary that makes its biggest calls in the dark of summer trades the transparency that gives its rulings authority for the speed that gives them reach.

-The Editors

Liberty · Upstream of the Swamp · August 19, 2026

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Trump Hits Second-Term Low On Economy

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

A new NBC News poll puts Trump’s standing on the economy at a second-term low, with disapproval reaching 60%. The number that should worry Republicans is not the topline; it is where independents have gone.

The headline figure. Disapproval of Trump’s handling of the economy climbed to 60% in the survey, a second-term low, driven by inflation and cost-of-living frustration.

The independents. Among independents, economic disapproval reached 65%, compared with 93% of Democrats and 22% of Republicans. The base is holding; the middle is not, and the middle decides midterms.

How people feel. Just 48% say the economy will improve over the next year, and 43% say they are worse off financially than they were under Biden, a direct reversal of the comparison Trump ran on.

The war overhang. The same poll found 80% expect the Iran war to drag on, tying the conflict and the gas prices it drives directly to the economic mood.

Why it is sticky. Inflation is the one issue a president cannot spin, because voters check it themselves every week at the store and the pump. You cannot argue someone out of a receipt. That is what makes cost-of-living numbers so hard to move before November.

The counterpoint. A single poll is a snapshot, not a verdict, and second-term midterms have historically been brutal for the party in power, regardless of the president. The base numbers show no collapse, and fourteen months of economic data still separate this survey from Election Day.

Worth watching. Whether independents drift further or settle, whether gas prices ease if Hormuz reopens, and whether Republicans on the ballot run with the president on the economy or quietly around him.

The base is intact. The independents are gone. That is the whole midterm in one poll.

The poll is a fair warning rather than a Democratic talking point. The economy was supposed to be his strongest ground, and losing independents on it, while voters say they are worse off than under a predecessor he spent years attacking, is a real problem three months out.

None of it is fixed, and a poll in August does not translate into a result in November. But the honest read is that the cost-of-living issue is doing to this administration what it does to every administration that cannot bring prices down, and no amount of messaging closes the gap between a promise and a receipt.

-The Editors

Politics · Upstream of the Swamp · August 19, 2026

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Memphis Task Force Became Immigration Crackdown

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

An anti-crime task force Trump launched in Memphis has become, in practice, an immigration operation. That doesn’t mean they are not doing essential work, but does it align with what the public expected? A July 27 report found that most of its arrests were of immigrants with no criminal convictions, which is not what the city was told to expect.

What it was sold as. When the task force was announced in the fall of 2025, federal and local officials framed it as a crackdown on violent crime and never named immigration enforcement as a goal.

What it became. An analysis by the Institute for Public Service Reporting found that a majority of the immigration arrests were of people with no criminal convictions, the opposite of the dangerous-career-criminal framing used to sell it.

Enforcing the law is defensible. Selling it as one thing and running it as another is how trust erodes. Midterms are quickly becoming a reckoning with the public.

For nearly a year, more than a dozen federal agencies and hundreds of Tennessee National Guard members have worked alongside local and state police, a standing federal presence that reshaped daily life in immigrant neighborhoods.

Trump has called the Memphis effort a “replica” of the anti-crime task force in Washington, which also carried a heavy immigration component. The model is being copied, which is why how it actually operates matters beyond one city.

The case for it. Immigration law is law, and removing people in the country illegally is a legitimate federal function that many voters, including this readership, support. An enforcement surge that also nets immigration violations is not a scandal; it’s a win.

The problem is the bait and switch. A program pitched as targeting violent criminals that mostly arrests people with no convictions invites the distrust conservatives rightly show when government sells a policy as one thing and runs it as another, especially with the National Guard involved.

A reader can support immigration enforcement and still want the government to be straight about what it is doing. The Memphis operation is a case study in the gap between the pitch and the practice: a violent-crime task force that, by the numbers, spent much of its effort arresting people whose only offense was immigration status. If you distrust federal overreach regardless of party, the lesson is not that enforcement is wrong. It is that a government which blurs its mission and leans on the Guard to do it should expect the scrutiny it earns, and that honesty about the goal is the price of keeping public consent for it.

-The Editors

Liberty · Upstream of the Swamp · August 19, 2026

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Trump Opens Navy To Foreign Shipyards: Concerning White House Memo

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

A new White House memo lets the Navy build warships in foreign shipyards and orders a return to steam catapults on future carriers. It is an admission that American shipbuilding cannot keep pace, and Congress is already moving to block half of it.

What the memo does. The August 13 national-security memorandum allows foreign shipbuilders to construct up to two ships in their home yards while training the US workforce, opening Navy construction to overseas builders for the first time in generations.

The carrier reversal. The same memo orders the Navy to rip out the electromagnetic catapult and return to steam on the fourth Ford-class carrier, the future USS Doris Miller, whose keel is due to be laid by the end of this year.

The fifth yard. Within 120 days, the Secretary of War is to deliver a plan for a fifth public shipyard, aimed at expanding the capacity to maintain nuclear submarines and carriers that the existing four cannot keep up with.

The problem it admits. Opening the door to foreign builders is a candid concession: US yards are too few, too slow, and too backlogged to deliver the fleet the Navy says it needs against China. The policy treats a shipbuilding crisis as real rather than rhetorical.

Congress pushes back. The Senate Armed Services Committee’s draft of the fiscal 2027 defense bill strips the waiver authority that lets a president invoke a national-security exception to buy foreign warships, setting up a direct clash over who controls where the fleet gets built.

The trade-off. Foreign construction could deliver hulls faster, but it sends work and skills abroad and raises hard questions about security and dependence. Reviving steam catapults trades a troubled new system for a proven old one, at the cost of walking back a technology the Navy spent billions to field.

Worth watching. Whether Congress keeps the waiver ban in the final bill, whether allied yards actually take Navy orders, and whether the fifth-shipyard plan is funded or filed and forgotten.

There is a real problem underneath the memo, and conservatives who want a bigger Navy have to reckon with it honestly. The United States cannot currently build ships fast enough to match China’s yards, and pretending otherwise does not float a single hull. Turning to allied shipbuilders may buy time, but it also concedes an industrial decline that a serious power would fix at home, and it hands leverage to yards outside American control.

-The Editors

National Security · Upstream of the Swamp · August 19, 2026

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Are African Troops Joining The Gaza Force?

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

Ugandan and Burundian military officers toured Rafah on Monday as both nations weigh sending troops to police postwar Gaza. The international force is the part of Trump’s plan that decides whether the ceasefire holds, and it is starting to take on names and faces.

What happened. Officers from Uganda and Burundi visited Rafah on a pre-deployment site survey, an early logistical step toward joining the international stabilization force envisioned under Trump’s 20-point plan to end the war.

Under the plan, Hamas hands its weapons to a Palestinian technocratic government, which passes them to an international stabilization force that destroys them. The force is meant to hold the ground so Israeli troops can withdraw in phases as disarmament proceeds.

Who is stepping forward? Uganda has signaled willingness to contribute, and Burundi is weighing it, part of a scramble to assemble a force from countries willing to send soldiers into a shattered strip governed by no one. The list of volunteers is short, and none of them are Arab states.

The obvious question. A stabilization force is only as credible as its ability to disarm fighters who do not want to be disarmed. Troops from Uganda and Burundi have peacekeeping experience in Africa, but Gaza is not a peacekeeping environment; it is a demilitarization mission against an armed movement that has not agreed to lay down its arms.

The missing partners. The Arab and Muslim states loudest in demanding a Palestinian outcome are not on the troop list. Egypt, Jordan, and the Gulf have the proximity and the stake, yet the soldiers being surveyed for Rafah are flying in from East Africa, which tells you who is willing to own the risk in Gaza and who is not.

Why it matters. This is the hinge of the whole plan. Israel will not withdraw until someone else can keep Hamas disarmed, and if the only takers are small contingents from distant states, the force may be too thin to do the job the plan assigns it.

Worth watching. Whether Uganda and Burundi actually commit troops and in what numbers, which other nations sign on, and whether any force materializes with the mandate and firepower to disarm rather than merely observe.

The stabilization force is where Trump’s plan meets reality. Announcing a demilitarization is easy; standing up an armed international contingent willing to take weapons from Hamas is the hard part, and the early roster of East African volunteers is a signal worth reading. It suggests the states with the most to say about Gaza’s future are the least willing to put their own soldiers on the line for it. If the force ends up small, distant, and lightly mandated, the plan’s central promise, that Israel can leave because someone else will hold the line, becomes a hope rather than a fact.

-The Editors

National Security · Upstream of the Swamp · August 19, 2026

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Danger Will Robinson: Rising Bond Yields Crush Semis and Force AI Valuation Reset

By Kenny Polcari

Written by Kenny Polcari

Estimated Reading Time: 7 minutes

Things you need to know.

  • The bond market is speaking – is anyone listening?
  • Semis get clocked….It’s the whole valuation ‘thing’ again.
  • Investment Theme vs. Investment Calculus – Understand the difference.
  • Oil up, gold down, bond yields holding steady.

Danger Will Robinson, Danger! (A throwback to ‘Lost in Space’ a 1965-1968 CBS TV series – something the baby boomers can really appreciate) – stocks continued to be sold yesterday as investors considered what rising bond yields will mean for risk assets. Hint: It is changing the price of money, and it’s creating an issue for valuations.

And that caused the indexes to close lower. The Dow was down 116 pts, the S&P lost 53 pts, the Nasdaq gave up 355 pts, the Russell lost 40 pts, the Transports gave up 350 pts, the Equal Weight S&P lost 40 pts while the Mag 7 lost 310 pts.

And while that doesn’t appear to be a disaster, when you pull back the sheets you’ll find something very different. The semis got crushed…. (again!)

The Philadelphia Semiconductor Index fell 5% – as sellers (mostly traders & algos’) – went into a frenzy – tripping over each other as they ran for the exits…. unloading some of the hottest names in a very crowded trade – MU lost 7%, SNDK fell 9%, WDC gave up more than 7%, STX lost 9%, AMD down 4%, AVGO lost 3%, MRVL gave up nearly 8% while NVDA lost more than 2%.

And as you might expect – The Direxion triple-levered Semi Long ETF lost 14.8%, but don’t despair- the Direxion triple-levered Semi SHORT ETF rose by 15.3%. You see – there is always a silver lining…..

The Technology sector was the worst-performing S&P sector, down 2.5% followed by Industrials – down 1.5%.

The money that came out of semis did find opportunity in Financials up 0.5%, Consumer Staples up 1.1%, Energy up 1.8%, and Healthcare up 1.6%. Further down the line – we also saw money move into Big Pharma, up 2%, and Biotech, +0.4%. & Aerospace & Defense up 0.4%.

So, what happened to the semis? Did someone post something negative on Reddit? Did Mikey Burry announce that he was doubling down on his short bet? Did NVDA pre-announce ahead of earnings next week? Did the AI story suddenly fall apart? Did hyperscalers stop spending? Did demand for chips disappear overnight?

No, No, No and No. None of that happened.

What DID happen is that one of the hottest, most crowded trades on the Street ran smack into a wall — known as the bond market — and that is changing the investment calculus. And this is important because there is a difference between the investment theme and the investment calculus.

The investment theme is the fundamental story — the reason you own something in the first place. In this case, the AI theme remains enormous: AI adoption means massive data-center construction, which means more chips, more memory, more power and more infrastructure. And that means opportunity across the entire ecosystem — energy, natural-gas infrastructure, HVAC and cooling, the electric grid, construction and engineering, concrete and cement, steel, copper, building materials and real estate.

That theme did NOT change on Tuesday.

What changed was the calculus — the math investors use to decide what they are willing to PAY for that theme. That calculation includes expected earnings, growth, valuation, interest rates, risk, the cost of capital and what investors can earn somewhere else.

And THAT is where the bond market comes in.

Remember — the semi’s have been on fire. Memory names in particular have exploded higher, expectations are enormous and investors have been willing to pay up for tomorrow’s earnings because the AI buildout appears almost limitless.

But that buildout requires enormous amounts of capital. The hyperscalers issued about $121 billion of bonds in all of 2025. This year they have already issued nearly $200 billion and Street estimates suggest that number could reach $250 billion by year-end. Broaden it out to data centers, power, infrastructure and the rest of the AI ecosystem and AI-related debt issuance could approach $550 billion this year.

At the very same time Scotty Bessent is flooding the market with Treasury debt to finance trillion-dollar government deficits, the AI revolution is showing up at the bond-market window looking for hundreds of billions of dollars of its own. In the end – everybody wants capital. And bond investors are saying: Fine. But you’re going to have to pay me for it.

It’s Econ 202 — more supply means more competition for capital, more competition for capital means lower bond prices and higher yields, and higher yields mean a higher cost of money.

And THAT brings us right back to Tuesday’s semiconductor rout.

Because when the risk-free rate is pushing toward 5%, investors start asking much harder questions about what all of that AI spending will ultimately earn — and, more importantly, what they are willing to pay TODAY for earnings that won’t come for months or even years.

That doesn’t mean the AI theme is broken. It means the bond market is forcing investors to reprice it. And that is exactly what we have been discussing — the FED doesn’t necessarily have to do anything right now because the bond market is doing some of the work for them.

Higher interest rates don’t matter — UNTIL they do. Yesterday, they mattered.

Next up is oil…. WTI gained another 44 cts to settle at $84.94, while Brent added 15 cts to settle at $91.02. No need to rehash why- you know the story and it hasn’t really changed. Unrest and uncertainty in the middle east. Remember – oil doesn’t need another missile attack to stay elevated. It simply needs the uncertainty to continue. And right now, that uncertainty isn’t going anywhere. This morning WTI is up another 55 cts at $85.50.

Gold took a breather losing 1.8% or $81/oz to end the day at $4,335 and you can also blame the bond market for that too. Why? Because gold doesn’t pay you anything to own it, no earnings, no dividends, no interest, investors buy gold for safety – think geopolitical unrest (check), they buy it as an inflation hedge (check) and foreign central banks will buy gold to diversify reserves, reduce dollar exposure and hedge risk.

And here’s the rub – when US govt bonds offer you 4.7%, 5% or more, the opportunity cost of owning gold changes. Why buy a non-interest-bearing asset when you can put that same money into risk free treasuries that pay 5%? Oh, and that whole ‘safety’ trade theme – that went out the window at least for yesterday. This morning gold is trading at $4,342 and remains in the $4,160/$4,500 trading range.

Onto the eco data – which shouldn’t really be a surprise…Housing starts plummeted – falling 12.4% – well below the expectations of down 6%. Think affordability – Mortgage rates are moving up – current rates are like 6.7% and likely going higher. Think about it – higher rates just make home builders more cautious, because it causes buyers to step back so the decline isn’t really a surprise.

Now on the contra side of the eco data – the really interesting data point was the Manufacturing Production number – it came in on target at +0.2%…. And THIS is where the semiconductor story gets tossed upside down…..Manufacturing output rose in July, business-equipment production increased and production of semiconductors remained strong. HELLO????

Think about this – Investors were dumping semiconductor stocks yesterday while the economic data continues to tell us that the AI infrastructure buildout remains alive and well. Which reinforces the point – Yesterday wasn’t about AI demand suddenly disappearing, it was about the price investors are willing to pay for that growth when the cost of money changes. Ta Daaaaa! See how it all comes back to the bond market? And that is the second lesson today.

Eco data today is about Mortgage Apps – I suspect they will fall and the FOMC mins…. We discussed this – the surprise will be if we find out that more than just the 3 dissenters were ‘leaning’ hawkish – leaning meaning – they were on the fence – should we or shouldn’t we? Either way – it is what it is and we have 3 weeks before the next meeting, but first we have to get thru the August Jackson Hole boondoggle – that brings central bankers and economists from around the world to Jackson Hole, Wyoming….The theme this year –

“Financial Innovation – Implications for Payment and Policy”

Oh boy – Can you imagine the excitement in the room? LOL. I would not expect to learn anything about US monetary policy at this symposium, and you shouldn’t either.

Earnings today – EL, TGT & LOW’s all before the bell. That’s all about Personal Care/Beauty, Discount Retail/Consumer and Home Improvement Retail.

Over in Asia – South Korea continues to get sold – it lost 5.8% overnight, Taiwan lost 1.3% – but again BOTH market centers are still up by 54% ytd….so put it in perspective.

European Markets are churning around the unchanged line. Again – most of Europe is on vacation – earnings season is over and there are no central bank announcements.

US futures are churning as well…. Dow futures are up 7, S&P’s – 1, Nasdaq down 50 while the Russell – 6.

The S&P closed at 7691 – down 53 pts. Yesterday I said we were going to test near term support at 7700 – we did and we closed just a hair below…the chart suggests we are now in kind of purgatory – trendline support is down at 7520 and if bond yields continue to push higher – then a test of that trendline is more likely.

Remember – volumes are subdued, participants are away on vacation and moves can be exaggerated. Just look at what some of the double and triple levered ETF’s can do – which is not a recommendation at all – those products are not for the retail investor – they are sophisticated, they react swiftly and can cut deep if you don’t pay attention. On the other hand, they can handsomely reward you if you do it right…. The KEY – understand the RISK – period.

Take good care,

Kp

Kenny Polcari is a partner and Chief Market Strategist at Slatestone Wealth – A boutique wealth advisory firm with $2 billion dollars of investor assets under management. In this role, his responsibilities range from market and economic analysis to investor education interpreting the ever changing economic and market landscape on behalf of Slatestone and how those impacts may affect future investment and planning strategies on behalf of their clients. With more than 40 years of industry experience as a member of the NYSE serving institutional investors both at home and abroad – he is a seasoned and well-known voice on the markets. You may recognize him from his many years serving as a market analyst on Fox Business and CNBC or his ‘Trader Talk’ Podcast on the Yahoo Finance Channel. For more, please visit his Substack HERE.

Disclaimer. Source: Bloomberg, CNBC, Reuters, Wall Street Journal

This media segment contains general market commentary based on publicly available information and is provided for informational and educational purposes only. Any discussion of companies, securities, or asset performance relates solely to those assets and does not represent the performance of any firm investment strategy, portfolio, or client account. It should not be interpreted as portfolio performance or as a reflection of client results.

This content does not constitute investment advice or a recommendation to buy or sell any security. Opinions expressed reflect views at the time of the interview and may change without notice. Forward-looking statements involve risks and uncertainties and are not guarantees of future outcomes. Investing involves risk, including possible loss of principal. The firm and its clients may hold positions in assets discussed, and holdings may change at any time.

The author’s views are their own and do not constitute financial, investment, or legal advice. Investing involves risk; please consult with a qualified professional before making any financial decisions.

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Key Business Headlines: August 19

By Jake Novak

Written by Jake Novak

Estimated Reading Time: 2 minutes

STOCKS/ECONOMY

  • Stock futures are mostly flat after Tuesday’s 116-point loss for the Dow, a 0.7 percent fall for the S&P 500, and a 1.3 percent selloff for the Nasdaq. Investors are focusing on some key retail chain earnings reports this morning, while remaining concerned over interest rates and oil.
  • The yield on the 10-year Treasury bond is at 4.70 percent.
  • The average 30-year mortgage rate remained unchanged last week at 6.77 percent. New mortgage applications fell by 2 percent, while refinance applications rose by 2 percent.
  • Gold is at the $4,423 per ounce level. Silver is down to the $63 per ounce level. Bitcoin is at the $64,300 level.
  • Asian markets closed mostly lower today. The Nikkei sold off by 3.2 percent, the Hang Seng eked out a 0.1 percent gain, the Kospi dropped 5.8 percent, and the Shenzhen fell 5 percent.

OIL/ENERGY

  • U.S. crude prices are up and at the $86 a barrel level.
  • Gasoline prices are up to $4.08 a gallon, national average.

IRAN WAR

  • President Trump says talks with Iran have once again broken down, and Tehran is now threatening to attack U.S. bases in Europe.

PHARMA

  • Merck (MRK) and Moderna (MRNA) say their jointly-produced vaccine has succeeded in keeping melanoma from coming back in trials conducted on high-risk patients. Merck shares are up 3 percent in the premarket, and Moderna shares are soaring 30 percent higher.

RETAIL EARNINGS

  • Target (TGT) reported a 5.3 percent gain in quarterly sales over last year, and is boosting its full-year earnings guidance. Its shares are still down slightly in the premarket, as investors may be somewhat unimpressed because much of Target’s profits came from one-time tariff refunds.
  • Lowe’s (LOW) is issuing forward guidance on the lower part of the estimated range. It also says its profits this past quarter got a boost from tariff refunds. Lowe’s shares are down 3 percent in the premarket.

TARIFF WARS

  • President Trump says he is issuing a three-day pause on planned 50 percent tariffs on a wide range of goods from Canada, ranging from hockey sticks and electronics to plastics and building materials, because he says a deal has been reached with Ottawa, but now needs to be finalized.

AMAZON’S AMERICA

  • Amazon (AMZN) says it plans on offering drone delivery services in almost 500 U.S. cities by the end of this year. Amazon shares are up 1 percent in the premarket.

-Jake Novak

Jake Novak is a 30-yr. veteran TV news producer, editorial columnist, & fmr. diplomat with expertise in politics, business news, culture, & media analysis. He is also the author of Jake’s Takes on Substack.

The author’s views are their own and do not constitute financial, investment, or legal advice. Investing involves risk; please consult with a qualified professional before making any financial decisions.

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Seventh Circuit Rejects Mandatory Detention: What Does This Decision Mean?

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

A federal appeals court ruled the administration cannot automatically jail without bond every immigrant it detains in the country’s interior. What does that mean? The August 2 decision reopens bond hearings for hundreds across three states and deepens a split the Supreme Court will likely have to settle.

What the court held. On August 2, the Seventh Circuit ruled 2 to 1 that immigrants who entered without inspection but were not caught at the border are held under Section 236(a) of the Immigration and Nationality Act, not the no-bond provision the administration invoked, and are therefore entitled to a bond hearing before an immigration judge.

The case. The ruling came in the case of Jaciel Cirrus Rojas, a Mexican national picked up in Racine, Wisconsin, as “collateral” while ICE agents were searching for someone else. The government wanted him held with no chance to argue for release.

What it changes. The decision covers Illinois, Indiana, and Wisconsin, the three states in the circuit, and could let hundreds of detainees request bond hearings. It unwinds a year-old policy that had kept thousands in federal custody with no path to ask for release.

The statutory fight. The whole case turns on which law applies. The administration classified interior detainees as “applicants for admission,” subject to mandatory detention; the court said that such a reading stretches the statute beyond its text. This is a dispute over which detention law applies, not an order to free anyone.

The circuit split. Other appeals courts have gone the other way, handing the administration wins on the same question. When circuits divide on a federal statute, the Supreme Court usually steps in. This ruling makes that more likely, not less.

Both sides of it. The enforcement case is that mandatory detention keeps people who entered illegally from vanishing before removal. The due-process case is that a bond hearing is not a release; it is a chance to argue before a judge, and jailing someone without a hearing at all is exactly the power conservatives distrust when a different administration holds it.

What it does not do. The ruling frees no one automatically. It restores the hearing, where a judge weighs flight risk and danger case by case. Detainees can still be held; they just get to make the argument.

The instinct on the right is to read any immigration loss as judicial obstruction, and sometimes it is. This one is narrower. The court did not say the border does not matter or that dangerous people must walk free. It said the government reached for the wrong statute to justify jailing people without a hearing, and that the text did not bend the way the policy needed it to. Conservatives who praise textualism when it fences in the administrative state cannot only praise it when it cuts their way. The Supreme Court will likely have the last word, and a ruling that forces the government to use the right law and grant a hearing is not the same as one that opens the jail.

-The Editors

Liberty · Upstream of the Swamp · August 18, 2026

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Opponents Of Nuclear Power Now Hauling In $400k Per Hour

By Ken Braun

Written by Ken Braun

Estimated Reading Time: 5 minutes

The total combined annual revenue of the NGOs known to oppose carbon-free nuclear energy is now more than $3.5 billion. Despite removing one of the biggest names from the list, this is still $200 million more than last year.

The combined annual revenue of American nonprofits known to oppose emissions-free nuclear power now exceeds $3.5 billion. The Environmental Defense Fund is at the top of the list, reporting a recent annual revenue haul of $443,267,772.

This cumulative total is a new record and a strong increase beyond the $3.3 billion reported last summer. The steep year-over-year jump is even more striking because one of the richest anti-energy NGOs listed last summer was (at least temporarily) removed this spring.

To put $3.5 billion into perspective, it is more than $9.5 million collected per day, or nearly $400,000 per hour, just for the admitted opponents of nuclear power.

At a minimum, all the richest names on this list are also opposed to the continued use of hydrocarbon fuels (petroleum, coal and natural gas). They promote instead replacing these reliable options with unreliable, weather dependent and landscape-clogging wind and solar energy. This policy mix puts the anti-nuclear opponents in opposition to 91 percent of all the energy consumed by Americans.

The civilization wrecking consequences of their posture was explained in Enemies of Energy, my recent report for the Capital Research Center:

If their world ever exists, then our world will not. Those without access to reliable hydrocarbon and nuclear fuels toil in primitive circumstances. Half of sub-Saharan Africans live without enough electricity to power basic lighting, a radio, or charge a cell phone for more than four hours per day.

It is likely that nearly all the less wealthy anti-nuclear nonprofits also oppose hydrocarbons, because opposing nuclear means opposing the safest, cleanest and most abundant form of reliable energy humans have ever exploited. The overview for the InfluenceWatch Opposition to Nuclear Energy page summarizes the advantages:

Nuclear power plants produce no carbon dioxide or other greenhouse gas emissions, and from 1990 until 2021 accounted for 20 percent of American electricity production—the largest source of zero carbon electricity in the United States. An October 2018 proposal from The Nature Conservancy noted that zero-carbon nuclear plants produced 7.8 percent of total world energy output and recommended reducing carbon emissions by increasing nuclear capacity to 33 percent of total world energy output. A 2020 analysis from Our World in Data reported that nuclear energy “results in 99.9% fewer deaths than brown coal; 99.8% fewer than coal; 99.7% fewer than oil; and 97.6% fewer than gas,” making it “just as safe” as wind and solar power production. The U.S. Department of Energy has concluded that “nuclear energy produces more electricity on less land than any other clean-air source” and that it would require “more than 3 million solar panels to produce the same amount of power as a typical commercial reactor or more than 430 wind turbines.”

How to join and leave the anti-nuke movement

This financial ranking of the anti-nuclear movement was first compiled in August 2023. So far only one group has been removed: the Natural Resources Defense Council (NRDC). The NRDC’s previous inclusion on the list was well earned. As just one example, in April 2021 an NRDC news release celebrated the enormously foolish retirement of New York’s Indian Point nuclear power station.

But in March of this year, the NRDC tepidly supported the early stages of a plan to restart Iowa’s Duane Arnold nuclear station. “This is unprecedented for us because it marks the first time in our history that we have taken action in support of an individual nuclear power plant,” said the NRDC president.

While hopeful, this was not a certain change of direction. In a letter to the U.S. Nuclear Regulatory Commission, the NRDC carved out room to change their mind: “While our preliminary view is that the restart of DAEC could have decarbonization and grid benefits, NRDC emphasizes again that its support for this ownership transfer does not constitute a final position on the merits of the proposed restart itself.”

But this was enough to justify temporarily removing the NRDC from the Influence Watch list of anti-nuclear groups. This was a significant deduction: the NRDC has reliably been one of the ten richest anti-energy NGOs and would have been one of the top five if included in this new ranking. The NRDC’s $248.9 million in recently reported revenue would have ballooned this year’s combined total to more than $3.7 billion.

But just as NRDC was making its way off the list, a new entrant was making its way on.

In March 2026, Make the Road New York (MRNY) cosigned a group letter sent to New York Gov. Kathy Hochul (D), demanding that she give up on a plan to increase the state’s nuclear energy capacity. Otherwise best known as a strident supporter of illegal immigration, MRNY’s most recently reported annual income was $29.7 million. That’s enough to vault the new entrant all the way up to 20th overall spot on the anti-nuclear list (see below).

Why does a left-wing immigration policy group decide to oppose reliable energy production? The Capital Research Center’s Mike Watson refers to this as “everything leftism.” This ideological affliction forces left-leaning groups to fall in lock step with each other’s agendas, even if there would seem to be no obvious logical connection between those agendas.

Some other prominent examples of “everything leftism” groups with known opposition to nuclear power include the California Teachers Association, the NAACP, Church World Service, the American Friends Service Committee (the Quakers), the Center for Popular Democracy, Oxfam America, CASA (another supporter of illegal immigration) and the League of Women Voters. And there are many other, less prominent examples, such as Hunger Action Los Angeles.

That said, the criteria used for the list is very conservative (and the methodology is explained here). For example, despite statements that could be broadly construed as opposed to nuclear power, the Union of Concerned Scientists has (so far) not been included. For these reasons, the total financial firepower of America’s opposition to nuclear energy is much higher than what is presented in this report.

The top twenty

The recently reported annual revenue for seven of the “everything leftism” groups is now enough to rank them within the top 20 richest anti-energy nonprofits. Here is the current, overall top 20, with the “everything leftism” opponents included:

  1. Environmental Defense Fund ($443.3 million)
  2. World Wildlife Fund ($366.7 million)
  3. Church World Service ($279.9 million)
  4. World Resources Institute ($267.4 million)
  5. California Teachers Association ($238.6 million)
  6. Rocky Mountain Institute ($174.9 million)
  7. Sierra Club ($169 million)[*]
  8. League of Conservation Voters ($159.3 million)
  9. Oxfam America ($75.3 million)
  10. National Association for the Advancement of Colored People ($60.6 million)
  11. American Friends Service Committee ($59.1 million)
  12. Southern Environmental Law Center ($58.2 million)
  13. National Parks Conservation Association ($51.6 million)
  14. GRID Alternatives ($46.9 million)
  15. Center for Biological Diversity ($45.7 million)
  16. Earth Island Institute ($41.6 million)
  17. Center for Popular Democracy ($40.9 million)
  18. Carbon Disclosure Project ($38.7 million)
  19. Greenpeace ($38.6 million)
  20. Make the Road New York ($29.7 million)

If the “everything leftism” fellow travelers are excluded and only the NGOs focused on energy, climate and/or broad environmental matters are ranked, then seven others creep into the top 20:

  1. Environmental Defense Fund ($443.3 million)
  2. World Wildlife Fund ($366.7 million)
  3. World Resources Institute ($267.4 million)
  4. Rocky Mountain Institute ($174.9 million)
  5. Sierra Club ($169 million)
  6. League of Conservation Voters ($159.3 million)
  7. Southern Environmental Law Center ($58.2 million)
  8. National Parks Conservation Association ($51.6 million)
  9. GRID Alternatives ($46.9 million)
  10. Center for Biological Diversity ($45.7 million)
  11. Earth Island Institute ($41.6 million)
  12. Carbon Disclosure Project ($38.7 million)
  13. Greenpeace ($38.6 million)
  14. Conservation Law Foundation ($24.1 million)
  15. Climate Reality Project ($23.8 million)
  16. Climate Policy Initiative ($22.5 million)
  17. Environmental Working Group ($21.8 million)
  18. Food and Water Watch ($20.7 million)
  19. Friends of the Earth ($20.4 million)
  20. 350.org ($19.5 million)

An alphabetical list of the largest known opponents of nuclear energy and a general profile of the movement is available at the InfluenceWatch profile: Opposition to Nuclear Energy.

***

[*] The Sierra Club’s most recent revenue filing with the IRS covers only the first six months of 2025, likely because the NGO is adjusting its annual filing date from December 31 to June 30. As such, the latest report did not cover a full year of revenue. The previous (full year) IRS filing for all of 2024 has been used for this tabulation. https://projects.propublica.org/nonprofits/organizations/941153307

-Ken Braun

As managing editor and director of content of CRC, Ken Braun edits Capital Research magazine. He also conducts investigative research and drafts profiles for InfluenceWatch.org. 

This piece was reproduced with the permission of CRC. Any opinions articulated herein are those of the author, not The Prickly Pear. To read the original piece, please visit HERE.

 

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Iran Deadline Expires, Trump Threatens Oman: State of Play

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

The 60-day window to reach a US-Iran deal ran out Monday with the Strait of Hormuz still closed. Trump answered the impasse by threatening to bomb Oman, the very country mediating the talks.

What lapsed. The 60-day negotiating period set under a memorandum of understanding expired Monday with no agreement and no reopening of the strait, leaving the war in stalemate.

Trump warned he would strike Oman if it “gets in the way” of US efforts to reopen Hormuz and end the war, aiming the threat at the Gulf state that has carried the messages between Washington and Tehran.

The half-step forward. Iran says it has agreed with Oman on a transit route map for commercial shipping through the strait, settling coordinates after weeks of technical talks, though no final joint statement has been signed and the passage remains blocked in practice.

What it costs. Oil climbed on the news, with US crude near $85 a barrel and Brent close to $91, as traders priced in a longer closure. Every week the strait stays shut feeds the gasoline price Americans are already feeling.

The strategic knot. Threatening the mediator is a strange way to reopen a strait. Oman is the channel, not the obstacle, and leaning on Muscat risks closing the one diplomatic door still open while doing nothing to move Tehran, which has shown it can absorb the blockade.

Tehran has signaled it is content to let the clock run, betting that a president facing midterms and $4 gasoline tires of the standoff first. An expired deadline with no consequence attached tends to confirm that bet rather than break it.

Worth watching. Whether the Oman threat was pressure or frustration, whether the route map becomes real passage, and whether Washington now escalates militarily or lets the deadline slide as it has before.

Deterring Iran is a worthy aim, and the frustration behind the threat is understandable after two months of talks that produced coordinates but no cargo. Yet strategy is measured by whether it moves the other side, and threatening Oman does not. It signals a policy reaching for leverage it lacks, aimed at the partner most willing to help. The strait reopens when Iran decides the cost of keeping it shut exceeds the cost of opening it, and nothing that happened Monday changed that arithmetic. Until it does, the expired deadline is the story, and the pump is where Americans will read it.

-The Editors

National Security · Upstream of the Swamp · August 18, 2026

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Democrats Officially Move To Pack The Court

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

Congressional Democrats are reintroducing bills to add four seats to the Supreme Court and cap the justices’ tenure at 18 years. Neither will pass a Republican Congress, which tells you the point is the November election, not the statute book.

The expansion bill. The Judiciary Act would add four seats to a 13-justice bench, allowing the current president to fill the new seats at once. It is led in the Senate by Edward Markey, Tina Smith, and Elizabeth Warren, and in the House by Jerrold Nadler, Hank Johnson, Cori Bush, and Adam Schiff.

The term-limit bill. A separate measure from Sheldon Whitehouse, Cory Booker, Richard Blumenthal, and Alex Padilla would cap active service at 18 years, with the president naming one justice every two years before the member shifts to senior status.

Two very different ideas. These do not belong in the same basket. Adding seats to flip the majority is court-packing, the move FDR tried and his own party killed. Term limits are a structural reform with support across the spectrum, including from some conservative scholars, though doing it by statute rather than amendment is itself contested.

Why now. The bills answer a conservative Court that overturned Roe and, this term, expanded presidential power over agencies once considered independent. Democrats trailing on the economy are reaching for the judiciary as a motivator for a base that is furious at the Court.

The math against them. Expansion requires a majority in both chambers and a president’s signature, and Republicans control the votes that matter. This legislation has no path in this Congress, which is why it arrives as a press release with sponsors rather than a markup with a schedule.

The precedent it courts. The danger of packing is symmetry. A Court expanded to 13 by one party invites expansion to 17 by the next, and a bench that grows with every change of power stops being a court and becomes a second legislature in robes.

Worth watching. Whether Democratic leadership embraces expansion or quietly keeps it at arm’s length, and whether the more defensible term-limit idea gets pulled down by its association with the packing plan.

A Court you enlarge whenever you lose it is not a Court. It is a scoreboard.

It is worth separating the two proposals, because lumping them together does the debate a disservice. A fixed 18-year term, staggered so every president gets appointments, is an idea serious people on the right have entertained, and the case against doing it by statute is real but arguable. Expanding the bench to secure a majority is of a different kind. It is the one move that would convert the Supreme Court into an instrument of whoever last won an election, and the reason it keeps failing is that enough people in both parties still understand that a judiciary worth having is one you cannot simply outvote.

-The Editors

Politics · Upstream of the Swamp · August 18, 2026

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US General To Oversee Hamas Disarmament

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

Jared Kushner and Benjamin Netanyahu agreed Monday that disarming Hamas should begin with a weapons handover supervised by an American military general. The framework is the most concrete step yet toward Trump’s Gaza plan, but it rests entirely on Hamas choosing to give up its guns.

What they agreed. After an hourslong meeting in Jerusalem, Kushner and Netanyahu agreed that Gaza’s demilitarization should start with a Hamas weapons handover overseen by an American military general, and that no reconstruction begins until the disarmament is done.

The structure. The two sides set up two working groups, one of them on disarmament, which Israel and Trump’s Board of Peace both say must be prompt and finished before any rebuilding. Kushner had met Hamas leaders in Cairo before flying to meet Netanyahu.

The load-bearing word. Kushner told Fox News that “if Hamas actually gives over the weapons in the tunnels willingly over the next 60 to 90 days”, it would remove a huge security threat to Israel. Willingly is the entire plan, and it is a thing Hamas has never once done.

Where Netanyahu drew the line. The prime minister doubled down that Israeli forces stay in Gaza until Hamas is disarmed, and the meeting preserved Israel’s freedom to keep striking targets in the meantime. Disarmament first, withdrawal second, is the Israeli position, and it did not move.

What did not happen. There was optimism but no firm commitment to the American plan. Hamas has said it accepts the road map; Israel has not adopted its language on a Palestinian state, and Monday’s session produced a mechanism, not a signed deal.

Every prior ceasefire foundered on the same rock: Hamas survives by keeping its weapons, so voluntary disarmament asks the group to dissolve itself. Putting an American general in charge of collecting those weapons also puts American credibility, and potentially American personnel, on the hook for whether Hamas complies.

Worth watching. Whether the 60-to-90-day window yields a single surrendered weapon, and whether the working groups result in a real handover or another round of talks about talks.

A plan to disarm Hamas that depends on Hamas volunteering to disarm is a plan with one enormous assumption.

The framework is a genuine diplomatic step, and it is built the right way, with disarmament as the precondition for reconstruction rather than a promise for later. The hard question is the one the mainstream media glosses over. Hamas has spent two years and tens of thousands of lives to keep its weapons, and no memo from Jerusalem changes that calculus. If the tunnels empty out in 90 days, this will be the breakthrough. If they do not, an American general will be left supervising a handover that never comes, and the plan will have discovered what every predecessor did: the obstacle was never the paperwork.

-The Editors

National Security · Upstream of the Swamp · August 18, 2026

Sourced from PRICKLY PEAR

Bonds in the Danger Zone: Global Yields Surge, Oil Climbs Above $90

By Kenny Polcari

Written by Kenny Polcari

Estimated Reading Time: 7 minutes

Things You Need to Know

  • Global bond markets are screaming.
  • Oil is adding fuel to the fire, and stocks are getting hit.
  • Iran has no incentive to end this conflict. (yet).
  • Trump tells Oman to stay neutral.

Well, good morning – brace yourself – the bond market is screaming and someone better start paying attention…..

‘Revvin up your engines – listen to her howlin’ roar, metal under tension, beggin you to touch and go – Highway to the Danger Zone, Ride into the Danger Zone….….” Kenny Loggins – Danger Zone

Yesterday saw the TLT and TLH both lose ground – falling 0.85% and 0.65% respectively – leaving those bonds down 6.7% and 5.5% ytd. The 10-yr Treasury yield surged up and thru 4.7% to end the day at 4.72%, the 30 yr rose 5 bps to end the day at 5.30% putting both right up against the ‘danger zone’.

And THAT matters because investors need to understand that the long end of the Treasury curve is tightening financial conditions independent of the Fed. Remember – we did not get a formal rate hike last month, so the move is completely market forces taking control. And that’s what makes this dangerous.

So why is this happening? Pick your poison: persistent inflation, nearly $2 trillion annual deficits, exploding government debt, a flood of Treasury issuance, massive corporate borrowing to fund the AI buildout, fiscal uncertainty heading into the midterm elections AND current demand from some of the traditional buyers of long-dated U.S. debt – think pension funds, life insurance companies, and foreign central banks is weakening.

Now – this is important – weakening doesn’t mean they don’t want our debt – it just means they don’t want it at these prices. Lower the price, and they will be happy to buy – because lower prices equal higher yields. Bingo!

In other words — this isn’t about Kevy Warsh, and the FOMC members anymore. Investors are looking into the future and saying If you want my money for 10, 20 or 30 years — you’re going to have to pay me more, and Kevy can’t do a damn thing about it…. the bond market will dictate what happens next – so
Washington better wake up…..

And here’s the problem for stocks: at 4.73%, the 10 yr has gone from 1st base to 3rd base and is about to enter the Danger Zone – if we break up and through 4.75% then suddenly 5% doesn’t sound so crazy — and THAT changes the conversation for equity investors.

Higher Treasury yields mean competition for investors’ money; it means higher mortgage rates, higher corporate borrowing costs, and higher discount rates. 30-yr mortgages were hovering around 6.6% last week – I suspect we will see them inch closer to 7% before the end of this week if this keeps up.

And because we don’t live in a vacuum — you have to consider what oil did.

It surged. WTI gained $2.09, or 2.5%, to settle at $84.50, while Brent jumped $2.36, or 2.7%, to settle at $90.87. Yes — Brent is back above $90. This morning, WTI is up another 0.6% while Brent is up 0.1%.

Why? Because hopes for some grand U.S./Iran peace deal took another hit on Monday. The 60-day agreement signed in June expired, and when Trump was asked whether he wanted to extend it, his answer was simple:

No.

Now, Iran didn’t recognize that MOU anyway — arguing that the U.S. had violated its terms weeks ago — so as far as Tehran was concerned, its expiration was largely a non-event.

Then add Oman to the mix. Oman has been working with Iran in an effort to resolve the crisis independently of the U.S., something Trump wasn’t happy with – so he threatened to bomb Oman if they got in the way – raising the temperature further. Remember — Oman is considered a U.S. partner in the region, so when Washington starts threatening them, the tone changes again.

Add continued unrest in Lebanon, increasingly aggressive rhetoric out of Tehran and overnight comments that Iran was going “on the offensive,” and suddenly nobody is pricing in a quick resolution.

Remember what I said yesterday: The risk hasn’t disappeared. Ships are still being attacked, crews have been killed and injured, insurers are taking on enormous risk, and these shipments can be disrupted at any moment.

And here’s the problem: Iran has very little incentive to rush into a deal with Trump right now.

Why would they? Oil is back above $90. The Strait remains constrained. Inflation concerns are building. Global bond yields are rising. And the U.S. midterms are now only about 10 weeks away.

From Tehran’s perspective, they may believe time is on their side. Keep pressure on oil, keep pressure on inflation, keep pressure on the bond market — and ultimately keep pressure on Trump.

Are they betting that American voters will punish Republicans in November, change the makeup of Congress and weaken Trump’s hand? Maybe. But if that is part of the calculation, then dragging this out makes perfect sense.

And here is what investors need to understand- The longer this goes on, the more the oil story becomes a bond story — and the more the bond story becomes a stock-market story. Because $90 Brent is one thing. A 4.75% 10-year is another. Put them together and now you’ve got higher inflation expectations, higher borrowing costs and tighter financial conditions – again, without the Fed doing a damn thing.

And THAT is why I keep coming back to the Danger Zone.

OK – so what did stocks do? They lost ground – and that should not surprise anyone…the Dow lost 272 pts, the S&P gave back 40 pts, the Nasdaq lost 84 pt, the Russell lost 10 pts, the Transports added 52 pts, the Equal Weight S&P ended the day flat, while the Mag 7 lost 460 pts.

Only energy rose…up 1.1% – tech was flat, but the other 9 sectors lost ground…. Communication – 1.9%, Consumer Staples down 1.6%, Consumer Discretionary down 1.2%, Financials lost 1%, Real Estate lost 1%, Basic Materials lost 0.6%, Utilities lost 0.3%, while Industrials and Healthcare lost 0.1%.

The contra trades all gained ground – the SH up 0.5%, PSQ up 0.25%, the DOG gained 0.6%, the VIXY +1% (the VIX index rose 6.6%), the triple-levered S&P short rose 1.5%.

And gold? Well, the goldbugs took it higher…– gaining $39 to end the day at $4,416 – despite the move higher in long-term yields. And that’s worth paying attention to because it suggests investors are using it as the ‘safety trade’. Investors are using it as protection against geopolitical uncertainty, fiscal deterioration, growing government debt and the possibility that inflation spins out of control.

Recall the $4,150/$4,500 trading range we discussed – well – we’re getting close to breaking out of that…and if we do – then look at $4,750 as the next target. This morning gold is down $26 at $4,390.

Eco data – at 8:30 am we’ll get housing starts and building permits. At 9:15 we’ll get Industrial Production and Capacity Utilization, and at 10 am we’ll get Pending Home Sales.

Before the opening – we’ll hear from Home Depot, and they beat and confirmed 2026 guidance. “Customers are focused on ‘smaller projects’ while remaining frozen on large renovations”. The stock is quoted up nearly 2% in the pre-mkt. Remember – it is also a Dow stock.

Overnight – we saw weakness in Japan – 2.5%, Taiwan -1.2% and South Korea – 1.5%. In Europe – markets across the zone are all weaker as well. Italy down 0.7%, Euro Stoxx down 0.6%, France down 0.6%, Germany down 0.4%, while the UK is essentially flat.

US futures are mixed – Dow futures are up 10 pts, (thanks to HD), S&P’s -38, Nasdaq down 356 pts or 1.3% while the Russell is down 10. There is pressure on stocks around the world – and Bloomberg says it clearly –

“Stocks fall as long-dated bond yields pushed further into multidecade highs and oil prices extended their climb, draining traders’ appetite for risky assets.”

And those long-dated bond yields are NOT uniquely American. Global bonds are repricing the cost of long-term money around the world. Sovereign bonds across Europe are getting hit this morning as investors price in higher inflation risk and the ongoing crisis in the Middle East. 30 yr yields in the UK are at 5.84%, (52 week high), France 4.8% (highest since 2008), Italy – 4.8%, Spain 4.4% (up 11 bps in the past month), Germany 3.8% (up 12 bps in the past month)

The S&P closed at 7745 – down 40 pts. Yesterday it was more consolidation, today it feels a bit more like ‘pressure’. Near-term support (not trendline support) at 7700 appears like it’s about to get tested on the opening…. After that – you have to look to the short-term trendline, which now stands at 7515, as the next level to be tested, and based on the chart – it should hold. But (there’s always a but), if the Middle East conflict heats up even more and WTI pushes into the 90s and Brent into the 100s – then even 7515 won’t hold.

I’m still in the camp that we could see another drawdown as we move into September. If we break the trendline at 7515 – then the June/July lows of 7300 become a reality…. If we went there – it would represent an almost 6% pullback from here…. something NOT out of the question at all and still within what is considered a ‘normal’ trading pattern.

Take good care,

Kp

Kenny Polcari is a partner and Chief Market Strategist at Slatestone Wealth – A boutique wealth advisory firm with $2 billion dollars of investor assets under management. In this role, his responsibilities range from market and economic analysis to investor education interpreting the ever changing economic and market landscape on behalf of Slatestone and how those impacts may affect future investment and planning strategies on behalf of their clients. With more than 40 years of industry experience as a member of the NYSE serving institutional investors both at home and abroad – he is a seasoned and well-known voice on the markets. You may recognize him from his many years serving as a market analyst on Fox Business and CNBC or his ‘Trader Talk’ Podcast on the Yahoo Finance Channel. For more, please visit his Substack HERE.

Disclaimer. Source: Bloomberg, CNBC, Reuters, Wall Street Journal

This media segment contains general market commentary based on publicly available information and is provided for informational and educational purposes only. Any discussion of companies, securities, or asset performance relates solely to those assets and does not represent the performance of any firm investment strategy, portfolio, or client account. It should not be interpreted as portfolio performance or as a reflection of client results.

This content does not constitute investment advice or a recommendation to buy or sell any security. Opinions expressed reflect views at the time of the interview and may change without notice. Forward-looking statements involve risks and uncertainties and are not guarantees of future outcomes. Investing involves risk, including possible loss of principal. The firm and its clients may hold positions in assets discussed, and holdings may change at any time.

The author’s views are their own and do not constitute financial, investment, or legal advice. Investing involves risk; please consult with a qualified professional before making any financial decisions.

Sourced from PRICKLY PEAR

Key Business Headlines: August 18

By Jake Novak

Written by Jake Novak

Estimated Reading Time: 2 minutes

STOCKS/ECONOMY

  • Stock futures are lower, with Nasdaq futures solidly lower, after Monday’s 273-point loss for the Dow, similar 0.5 percent drop for the S&P 500, and a 0.3 percent decline for the Nasdaq. Memory chip stocks are falling across the board this morning, accounting for most of the premarket losses.
  • The yield on the 10-year Treasury bond is up to 4.74 percent. The 30-year Treasury yield is at a 19-year high of 5.32 percent as inflation and government spending worries rise.
  • Gold is at the $4,450 per ounce level. Silver is at the $65 per ounce level. Bitcoin is at the $64,200 level.
  • Asian markets closed mostly lower today. The Nikkei sold off by 2.5 percent, the Hang Seng gained just 0.1 percent, the Kospi dropped 1.6 percent, and the Shenzhen fell 0.6 percent.

OIL/ENERGY

  • U.S. crude prices are up and at the $84 a barrel level.
  • Gasoline prices are holding at $4.06 a gallon, national average.

HARDWARE WARS

  • Home Depot (HD) reported better than expected quarterly profits and revenues and reaffirmed full-year earnings guidance. Its shares are up 2 percent in the premarket.

CHIP CHOP

  • Memory chip stocks are on the downside of their wild see-saw trade this morning. Micron Technology (MU) shares are down 5 percent in the premarket, Western Digital (WDC) shares are down 6 percent, SK Hynix (SKHY) shares are down 6 percent, and Sandisk (SNDK) shares are down 5 percent.

META CASE

  • Opening arguments begin today in California and 28 other states’ lawsuit against Meta Platforms (META) for allegedly putting child users in danger. Meta says damages in the case could exceed $1 trillion. Meta shares are down 1 percent in the premarket and are down 26 percent from a year ago today.

MOVING AMERICA

  • Tesla (TSLA) says it’s planning to launch its no-steering-wheel Cybercab autonomous vehicle this month. Its shares are down 2 percent in the premarket.

FCC vs. ABC

  • Disney (DIS) is suing the FCC over the agency’s probes into ABC TV’s DEI practices and equal time rules connected to the “Jimmy Kimmel Live” show. Disney shares are up slightly in the premarket.

-Jake Novak

Jake Novak is a 30-yr. veteran TV news producer, editorial columnist, & fmr. diplomat with expertise in politics, business news, culture, & media analysis. He is also the author of Jake’s Takes on Substack.

The author’s views are their own and do not constitute financial, investment, or legal advice. Investing involves risk; please consult with a qualified professional before making any financial decisions.

Sourced from PRICKLY PEAR

Space Force Buys Golden Dome Trackers

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

The Space Force has ordered 36 new satellites to spot incoming missiles for the Golden Dome shield. The contracts are moving even as the program’s broader funding faces an October cliff.

The award. The Space Development Agency committed $1.75 billion to L3Harris and Sierra Space for 36 missile-tracking satellites, 18 from each company, for the Tranche 3 Tracking Layer of the military’s proliferated space architecture.

Who got what. L3Harris will receive up to $955 million for its 18 spacecraft, and Sierra Space up to $798 million for the other 18. All 36 are expected to be ready for launch by the end of 2028.

What they do. The satellites use infrared sensors in low Earth orbit to detect and track missiles, then pass the data in real time over a low-latency network to forces on the ground. Tracking is the layer that makes intercept possible: you cannot hit what you cannot see.

The threat it addresses. Golden Dome is built for a world of hypersonic glide vehicles and cruise missiles, the exact weapons China and Russia are fielding to defeat older defenses. A tracking layer in orbit is the response to threats that fly too low or too fast for ground radar alone.

The price tag. The Pentagon projects Golden Dome at roughly $185 billion over its full life, which makes every tranche a down payment on a very large program and a target for budget hawks in both parties.

The collision. Contracts are being signed even as we reported the program could stall without October funding. Awarding satellites while the appropriation is in doubt is how the Pentagon builds momentum and risks stranding work if the money slips.

A missile-defense shield keyed to hypersonics is exactly the kind of hard-power investment warranted, and the tracking layer is the sensible place to spend early, because nothing else works without it. The tension is fiscal, not strategic. The Pentagon is committing billions to a $185 billion program whose full funding still has to clear an autumn fight, and a defense built in tranches is only as strong as the appropriation behind the next one. Build the shield, but fund it in full rather than in hope.

-The Editors

National Security · Upstream of the Swamp · August 17, 2026

Sourced from PRICKLY PEAR

FCC Returns $881 Million Unspent: First Time An Agency Returns Money?

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

A federal agency just did something rare enough to be news: it sent money back. The FCC returned $881 million in unused funds to the Treasury, closing out a program that finished under budget.

What happened. The Federal Communications Commission returned about $881 million in unspent funds from the TV Broadcaster Relocation Fund to the US Treasury, closing the account that reimbursed stations displaced by a spectrum auction.

The backstory. The Broadcast Incentive Auction began in 2017 and repurposed 84 megahertz of low-band TV spectrum for wireless use, generating $19.3 billion in net winning bids. Congress set aside $2.75 billion to move the affected broadcasters.

Why there was money left. The relocation came in under the reserve, leaving a pool sitting idle at the agency. Rather than let it languish or find a way to spend it, the commission closed the account and swept the balance back.

In their own words. Chairman Brendan Carr said the agency took “a hard look at money sitting in our agency” and decided the time was ripe to clean house so that funds do not languish when they can be returned to the Treasury.

Against a federal deficit measured in trillions, $881 million is a rounding error. The value is not the sum. It is the behavior: an agency that treated leftover appropriations as the taxpayers’ money rather than its own to redeploy.

Unspent balances sit in accounts across the government, quietly reprogrammed into new priorities when a program ends. A commission voluntarily returning its surplus is a model other agencies could follow, though most do not.

Worth watching. Whether this becomes a habit the administration extends to larger, stickier pools of unspent money, or stays a one-time gesture on a program that happened to end clean.

The reflex in Washington when a program ends with money left over is to find a new use for it, because the appropriation is treated as a floor rather than a ceiling. The FCC did the opposite, and the fact that this counts as remarkable tells you how the rest of the government behaves. If every agency swept its idle balances back to the Treasury the way this one did, the returned billions would stop being a headline and start being a habit worth having.

-The Editors

Politics · Upstream of the Swamp · August 17, 2026

Sourced from PRICKLY PEAR

Trump Budget Would Shrink Smithsonian: But That Is Not The Real Story

By The Editors

Written by The Editors

Estimated Reading Time: 2 minutes

The White House wants to cut the Smithsonian’s federal funding to below $1 billion for the first time in years, in response to a report accusing the institution of ideological bias. The fight is about money, but the real contest is over who tells the American story.

The proposal. Trump’s budget request would drop the Smithsonian’s federal funding below $1 billion for fiscal 2026 and 2027, to roughly $960 million, the first such request since fiscal 2020.

This is a request, not a done deal. Enacted appropriations for fiscal 2026 totaled about $1.08 billion, so the fight is over the administration’s proposed cut, which Congress has not adopted.

What is driving it. The push follows a July White House report, “Saving America’s Story,” accusing the institution of advancing DEI and left-wing framing across its museums and exhibits.

The other lever. Funding is not the only tool. The administration is also eyeing more direct control over how the Smithsonian’s budget is set, which would give the White House a say over the institution well beyond the topline number.

The case for it. The Smithsonian is taxpayer-funded and quasi-governmental, and conservatives have long argued its exhibits tilt in one direction on race, capitalism, and the founding. If the museums present a contested politics as settled fact, a debate over their funding and framing is legitimate oversight, not censorship.

The case against it. A president using the budget to discipline the content of national museums is a power that does not stay in friendly hands. The same leverage that trims what one administration calls bias can dictate what the next one calls patriotism, and independence lost is not easily won back.

Worth watching. Whether Congress adopts any of the proposed cuts, and whether the effort to reshape how the Smithsonian’s budget is governed advances alongside the dollar figure.

There is a real grievance under this. A national museum funded by every taxpayer owes the country something better than a single ideological lens, and the Smithsonian has earned scrutiny it long avoided. The caution is about method. Winning the argument through better history is durable; winning it through budget leverage and administrative control invites the other side to run the same playbook in reverse. The goal is a fair telling of America’s story, but that goal is not served by making the telling bend to whoever holds the checkbook.

-The Editors

Liberty · Upstream of the Swamp · August 17, 2026

Sourced from PRICKLY PEAR

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