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Good Faith Vs Bad Faith

Authored by James Howard Kunstler via Clusterfuck Nation,

"In conditions of mass democracy, the soft and the infantilising will be preferred over the hard and the necessary again and again."

- Eugyppius on X

Clusterfuck Nation never sleeps, even while everybody else lays aside their labors. Later today we'll light up the ceremonial grill, but for now it's onto the tribulations of this dolorous moment in history.

It was just such a sparkling September morning twenty-five years ago when those hijacked airliners knifed into the World Trade Center towers (plus the Pentagon + a field outside Shanksville, PA). Despite all the forensic debate since then, I go with the original explanation that four teams of jihadi maniacs did the 9/11 deed. And also, yet, despite all the official defenses mounted since then - the Patriot Act, etc. - here we are allowing a massive Islamic infiltration and even takeover of many places in America, proving, at least, that history is trickster.

After the trauma of 9/11, you can't deny our country went off the rails psychologically, along with the rest of Western Civ, as if its immune system broke down and the body politic admitted all kinds of malevolent parasites into itself. They have induced disease in most of society's organs - our institutions - the main political parties, the news media, the government agencies, the foundations, the schools, the arts & letters. The West's collective brain got badly damaged in the process.

The disease is identifiable, though some of its mechanisms remain mysterious. The disease is called bad faith: acting or speaking falsely, and knowingly so. Pretending one thing as a cover for meaning something else, such as hollering about "justice" when you really mean vengeance; "inclusion" when you mean to cancel others out of careers and livelihoods; "diversity" when you won't tolerate disagreement; "democracy" when you just want to push everybody else around.

The forces behind all this give off an odor of the occult. You can perhaps name and locate some of the engines driving it - the "Globalists," the Marxists, the London banks, the EU, the WEF, the São Paulo Forum, the CCP - but their motives remain obscure. Angela Merkel has stated plainly why she allowed the mass immigration of the Third World into Germany (and thereby into all Europe due to the Schengen agreement that erased the EU nations' borders): "to counter right-wing extremism," she said. That sounds pretty clear, but it also seems quite crazy. And why on earth does Ursula von der Leyen do everything possible to keep that going? Have the migrants not sufficiently demonstrated their antipathy to Western society? How many rapes, knifings, beheadings, café massacres, and Christmas Village drive-throughs does it take?

It's also hard to fathom how the London bankers (whoever they are?) have any sympathy with the Marxist revolutionaries who want to end the concept of private property and the instrumentalities of money that go with it. Or how the Rockefeller and Ford Foundations became so enamored of socialism. Or why the CIA seems bent on betraying the American common good. Or how come the League of Women Voters stridently opposes common sense election reform.

The race hustle is more comprehensible. It operates within a permission-structure built on the agonizing differential between success and failure.

It's just plain extortion: our failure is your fault, so pay up. And meanwhile, thanks for no-bail-and-no-jail, and for permission to shoplift, rape, murder, loot, and riot when we feel like it. (And cry harder about it.) It's an obvious sado-masochistic setup.

The gender game gets more complicated, but it also comes out of a permission-structure based on success / failure, aggravated by a mutual shortage of marriageable males and females forced to compensate for any combination of bad luck and bad choices that lead to failure in life.

But that dynamic has been neatly hijacked by groups seeking to create as much social chaos as possible. Why else would the Democratic Party get so avid for drag queen story hours in the early school grades? Is it not obvious that this isn't really comedy, as claimed? Rather, it's the presentation of women as monsters. Have you ever stopped to wonder how many of the kids watching these exhibitions are actually terrified by the disturbed adult males acting-out in their faces?

And now, the gender lunacy has climaxed - in Massachusetts, arguably the craziest US state - where mobs of deranged women chant and blubber in sympathy outside the courthouse where a mother who strangled her three kids just got off the hook.

The kids were unfairly cluttering up Lindsey's life, you understand. . . .If anything is an apt tipping point for a society to go one way or another, there it is.

Twenty-five years of being insane is enough.

It's not making life easier for anybody. This is the meaning of Trump. He is aiming to fix as much of this as possible. That it's his fate to play this role is further evidence that history is a trickster. It's easy to make fun of him and his mannerisms; harder to weigh who and what he is fighting against - and what the stakes are. You might just boil it down to a battle between good faith and bad faith, of meaning business and playing games. The time for meaning business is at hand, and the time for playing dishonest games is over. Happy Labor Day and get ready for the action that's about to come at you as we turn this corner into fall, for real.

Tyler Durden Tue, 09/08/2026 - 16:20
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Canada's Tariff Strategy Designed To Interfere With U.S. Midterm Elections

Late last month, Canadian Prime Minister Mark Carney walked away from a trade deal with the United States. According to Treasury Secretary Scott Bessent, Canada was "offered the best trade deal of any country on the globe," but Carney abandoned the deal "at the last minute."

According to the White House, "the U.S. offered Canada the most preferential market access of any country on Earth, with deep cuts on steel, aluminum, autos, lumber, and more. Instead of partnership, Canada chose unreasonable demands, walk-backs, and flat-out rejection." Canada responded with retaliation rather than negotiation, becoming the only other country besides China to do so.

And the reason is that Canada is trying to influence the 2026 midterm elections in the United States.

After the trade negotiations failed, Canadian officials announced that tariffs of up to 50% will hit roughly 700 American products starting September 8, covering close to $20 billion in goods, about 7% of everything Canada imports from the United States. The rates range from 15% to 50%, and tariffs on American steel and aluminum will double from 25% to 50%. This was a targeted economic strike meant to hit key states before the midterm elections.

Ottawa has barely bothered to deny it. Canadian Industry Minister Mélanie Joly said the tariffs were built to apply political pressure on specific states, telling reporters: "We are also targeting products that can target specific states in the United States. We are being smart and strategic in order to apply political pressure, and I think it's the right thing to do right now."

Asked directly about the political intent by the Canadian Broadcasting Corp., Joly did not walk it back: "We are putting pressure clearly on different states and different people. We don't want to do that. We don't want this trade war. We didn't start it."

The target list reads like a midterm map. Cheese products from Wisconsin. Washers and dryers from Kentucky, where GE Appliances is a major employer. Steel, aluminum and auto parts from Michigan. The Wall Street Journal reported that Canadian officials designed the package to protect domestic industry and to "sting President Trump and his Republican Party" heading into November.

"The states that are most reliant on Canada as an export market are often the northern-tier states - Maine, Michigan, Minnesota, Wisconsin, New Hampshire," Ed Gresser told the Wall Street Journal. He argued that Canada is "trying to show the Republican party that there's a systemic cost to doing this sort of thing."

Trade consultant Eric Miller, who heads the Washington-based Rideau Potomac Strategy Group, said Canada picked targets with available substitutes, either domestic production or imports from Mexico and China, items like air conditioners and appliances, while simultaneously hitting producers in swing states and reliably Republican territory.

Nowhere was the targeting clearer than Maine, and nowhere did it collapse faster. Ottawa's original list carried a 25% tariff on American lobster, set to bite during the fall season when roughly half of Maine's catch goes to Canadian processors. Sen. Susan Collins (R-ME), facing re-election in November, had already warned that the trade war would hurt her state. The Maine Lobstermen's Association warned on Aug. 26 that the duty would land at the worst possible moment for an industry running on thin margins.

One day later, Canada removed seafood and fish products from the list entirely, citing "select adjustments" made "based on feedback" while insisting it was maintaining a dollar-for-dollar response. Collins applauded the reversal. Ottawa aimed at a vulnerable Republican senator's most iconic industry, took one day of political heat from that state, and backed off - which tells you the aim was never really about lobster.

The rest of the list is still standing.

Desjardins Capital Markets economist Royce Mendes estimates that the tariffs could add about 0.2 percentage points to Canadian inflation, already near 3%. The central bank is already managing higher energy costs and the risk of a slowdown, which makes this move extremely complicated for Canada, and, according to Corpay chief market strategist Karl Schamotta, Canada's strategy may backfire.

"An intensified trade war will hurt the country more than the U.S.," Schamotta explained. "Countertariffs will not help. In Canada, just as in the U.S., they are effectively taxes on domestic consumption. They raise the cost of living while doing little to shift trade balances or improve overall economic welfare."

Tyler Durden Mon, 09/07/2026 - 16:30
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Alleged White-Hat Hackers Withdraw 4,000 Bitcoin From Blockstream's Liquid Network Federation Reserves

Authored by Juan Galt via BitcoinMagazine.com,

The Liquid Network said Sunday that purported white-hat hackers withdrew about 4,000 bitcoin, worth about $320 million, from the federation wallet that backs L-BTC.

Bridge nodes were disabled, and the sidechain was paused. Other issued assets, including USDT, DePix and RWAs, were unaffected, the official account said on X.

The Liquid Network is a federated sidechain of Bitcoin, founded by Adam Back’s Blockstream. The Liquid chain issues a variety of assets such as LBTC, which it backs with BTC on the Bitcoin main chain, held in a large multisig of 15 corporate and known members. 11 of the 15 members need to sign a valid multi-signature transaction to move coins from the treasury. Before the hack, the treasury held over 4200 BTC; after the hack, Blockstream’s proof of reserves page reports a little over 207 BTC left. 

The hackers withdrew 4,019.4 BTC from the reserve address in a peg-out transaction using the SideSwap Peg-out Authorization Key. SideWap is a bridge exchange and a member of the Liquid Federation. While details on the mechanism of the hack are not confirmed yet, it appears an inflation bug on the LBTC side chain was exploited by the hackers to create over 4,000 LBTC that did not exist before, and cash them out for on-chain bitcoin from the federation. Because the transaction appeared as valid, given the consensus bug, the federation members’ HSM security servers signed the BTC withdrawal transaction, worth roughly 320 million at the time. 

The hacker moved the funds to an address ending in 6gyqjlte, from which they quickly signed a new transaction with a message on the OP_RETURN arbitrary data field saying “we are whitehats. contact us on chain.” Those coins were still at that address at the time of writing.

A small mainnet transaction to the hacker address followed by an OP_RETURN saying “Please contact security@blockstream.com”, presumably from a Blockstream public address, though that remains unconfirmed. A later OP_RETURN spend from the hacker address carried “Please contact us on Signal @m671aw.70”, however, this may be spam and does not share a link to the address with the stolen funds.

In response to the breach, exchanges were told to pause L-BTC deposits and withdrawals. Bridge nodes on the Liquid Network have been paused, limiting access to the side chain, which continues to produce blocks. 

JAN3 CEO Samson Mow said Aqua’s Liquid features were affected and that on-chain bitcoin still worked. Other wallets in the industry that use the Liquid Network are expected to be affected. Users holding LBTC now effectively have their savings at risk, since the underlying BTC is currently not redeemable. Given the private nature of the Liquid chain, user onchain analytics are scarce and not much public information is known about how much LBTC is held by retail users versus corporations of Blockstream itself. Nevertheless, should the funds not be returned, it would be a heavy blow to the Liquid Network’s user base.

Users of LBTC don’t have many options but to wait for conversations with the hackers to resolve. Given the size of the hack, it would be difficult for the hackers to get away with stealing all that bitcoin, though perhaps not impossible.

What may happen is that the hackers ask for a finder’s fee and return the majority of the funds. 

Tyler Durden Mon, 09/07/2026 - 16:00
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From Par To Pennies

Submitted by QTR's Fringe Finance

Private credit’s reckoning is not arriving with one grand, spectacular crash. It is arriving slowly and steadily, one loan at a time.

For years, one of private credit’s great attractions was the remarkable stability (or perceived stability) of its valuations. Public bonds could fall ten points in a week. Leveraged loans could gap lower after a bad earnings report. But private loans somehow possessed the soothing ability to remain at 98, 99 or 100 cents on the dollar through almost anything, all while paying investors a healthy yield.

Incredible, right? Another financial fairy tale…a proverbial unicorn sh*tting rainbows.

Until reality eventually reared it’s head, and now, to the surprise of no one, we are finding out unicorns don’t exist. Imagine that. We are learning that the absence of volatility in a reported mark does not mean the absence of deterioration in the underlying loan. And that is increasingly where the private credit story gets heinous…and why I’ve been writing about it for 2 years now.

The opacity is unlike any other corner of markets. Some borrowers can weaken for months, even years, while their loans remain marked at levels suggesting that most or all of the money is still coming back.

Eventually, though, something happens that makes the deterioration impossible to finesse away. A borrower stops paying interest. A hoped for refinancing disappears. The sponsor declines to put in more equity. A rescue transaction collapses. Or, most decisively, like we are seeing more and more, the underlying company files for bankruptcy.

That is when the soothing stability of private credit can suddenly disappear. A loan that sat near par through months of worsening fundamentals can plunge to 50, 20, five cents or even zero in remarkably short order. The economic deterioration may have been happening all along. The mark simply waited until reality became too difficult to ignore. You then get headlines like this one from Bloomberg yesterday.

And increasingly, the pattern looks familiar. A company struggles, leverage stays high, liquidity deteriorates and interest becomes harder to pay. Yet there is always a reason not to mark the loan too aggressively. Maybe EBITDA recovers. Maybe rates fall. Maybe the sponsor writes another check. Maybe there is a refinancing, an asset sale or a transformational M&A deal just around the corner. Maybe the guy responsible for marking down the loan has set his “out of office” email response to inform people he is taking 2 month vacation on his yacht in Malta.


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Hope, conveniently, has a fair value. It’s always 100 cents on the dollar or damn close to it. But then…painstakingly and eventually…reality catches up and 100 cents quickly becomes 20 cents. Or zero cents.

The latest example is Loparex, a borrower held by Blue Owl Capital Corp., or OBDC. According to Bloomberg, at the end of 2025, its first lien debt was still carried around par and its second lien debt at roughly 88 cents on the dollar. By June, OBDC was carrying portions of the second lien at about five cents and one first lien position at roughly 22 cents. Loparex was also put on nonaccrual. Moody’s has since deemed the company in default and said a Chapter 11 filing is a possibility.

Perhaps recoveries ultimately exceed those marks. That happens in restructurings. But the interesting number is not five cents. It is 88 cents.

The loan did not suddenly become troubled on the day somebody changed the valuation. Loparex had been struggling with its debt load for years, including a 2024 distressed exchange that S&P considered tantamount to default. Yet the second lien still ended 2025 marked at roughly 88.

This gets to the central problem with private credit valuations that I have been harping on non-stop for years. These loans generally do not trade in liquid markets, so managers rely on models, comparable companies, third party valuation firms and their own judgment. That is unavoidable. But it also means that valuation becomes most subjective precisely when the underlying credit becomes most uncertain. If an executive were so inclined, he could figure out a way to model a bankrupt hot dog cart at a $1 trillion valuation. Like the Fed, printing cash, it’s all just made up bullsh*t out of thin air manipulated in seconds on a spreadsheet.

And that’s all good and well. But bankruptcy has a nasty habit of pissing in the proforma punchbowl. Once a company actually files bankruptcy, the comfortable range of hypothetical outcomes (hereinafter referred to as “bulls*it”) gets much narrower. Creditors, restructuring advisers and courts start converting theoretical enterprise values into actual recoveries. At that point, extending and pretending gets considerably harder. 

Bankruptcy does not necessarily create the loss. It can simply make the loss impossible to avoid recognizing.

Here are some recent examples that make the point and what to watch out for.

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QTR’s Disclaimer: Please read my full legal disclaimer on my About page hereThis post represents my opinions only. In addition, please understand I am an idiot and very often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning, meaning if I’m long I could sell or if I’m short I could cover at any time.

Contributor posts, guest posts and curated posts have been hand selected by me, but have not been fact checked and are the opinions of their authors. They are either submitted to QTR by their author or reprinted under a Creative Commons license with my best effort to uphold what the license asks, or with the permission of the author.

I cannot guarantee the accuracy of any or all facts and figures included in this article though I made an effort to get them right. I have been wrong before and will be wrong again, and encourage you to always double check, do your own research and speak to a licensed financial professional, which I am not.

This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. I may or may not own names I write about and are watching. Sometimes I’m bullish without owning things, sometimes I’m bearish and do own things I’m bearish on. Just assume my positions could be exactly the opposite of what you think they are just in case. If I’m long I could quickly be short and vice versa. I won’t update my positions.

Starting in 2026, I have been attempting to no longer actively trade as much as I once did (read my story here). My goal is for my investing/saving to be done by recurring contributions mostly to sector ETFs and a few select equities, trusted third parties who oversee my accounts, and advisors. Such advisors or funds, through individual equities, options, index funds, mutual funds, ETFs, or other securities, may have positions in, exposure to, or holdings of names mentioned herein that I know nothing about. It is possible I could own, have exposure to, or not own anything, at any point. In an attempt to lead a healthier lifestyle, I’ve also excluded myself from fantasy sports, sports betting, online and in-person casinos and prediction markets.

Any of my positions can change immediately as soon as I publish, with or without notice and at any point I can be long, short or neutral on any position. You are on your own. Do not make decisions based on my blog. I exist on the fringe. If you see numbers and calculations of any sort, assume they are wrong and double check them. I failed Algebra in 8th grade and topped off my high school math accolades by getting a D- in remedial Calculus my senior year, before becoming an English major in college so I could bullsh*t my way through things easier. Hence, why I am a writer.

The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Many times I edit after my posts are published because I’m impatient and lazy, so if you see a typo, check back in a half hour.

Also, again I just straight up get sh*t wrong a lot. I mention it multiple times because it’s that important you understand.

Tyler Durden Sun, 09/06/2026 - 14:00
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With Its War On Prediction Markets, The Gaming Lobby Plays A Bad Hand

Authored by Dean Heller via RealClearMarkets,

There's a saying in Vegas, the house always wins. I represented Nevada in Congress for more than a decade and I can attest to the truth behind that phrase. But what I learned is that it's rarely a fair fight. The gaming industry works to stack the odds against competition, whether it's at the tables, in courtrooms, or in the halls of Congress.

It was never a fair fight, which is why the gaming industry is so worried about prediction markets. Prediction markets are far from perfect, but they're fair. There is no house. It's no wonder the gambling industry is working overtime to stop them. Recently, the American Gaming Association tried to join a lawsuit in Wisconsin against the CFTC, and its lobbyists went to Congress this week asking for an outright ban on sports event contracts.

While representing Nevada, I sat on the Senate Finance and Banking committees, and whipped votes to protect our gaming industry from anything that smelled like competition. When Sheldon Adelson wanted a federal ban on online gambling, I backed the Restoration of America's Wire Act and warned that internet gaming would be "a final nail" for brick-and-mortar casinos. Looking back, I was probably being a little dramatic. The bill failed anyway, in large part because opponents argued it would cost states an economic boost and push bettors toward unregulated offshore sites.

So when I watch the gaming lobby go to war against prediction markets today, I recognize the play. I ran it.

The industry has launched a multi-state litigation campaign, fired off cease-and-desist letters to stop sports event contracts, and cheered as 41 state attorneys general urged the CFTC to cede jurisdiction over these markets to the states. In certain states, lottery and gaming agencies are colluding with the American Gaming Association. When your state gaming agency and the casino lobby are copying each other's homework, it's fair to ask who's actually regulating whom.

Here's what makes the crusade hard to take seriously. While the casinos lecture Washington about consumer protection, a lawsuit in Philadelphia is showing the country how the sportsbook business actually works. A gambler named Terry Thompson wagered roughly $18.5 million on FanDuel and lost more than $1.5 million. He was a "VIP." His reward for all that losing? His FanDuel host arranged a personalized Cameo video from Phillies star Bryce Harper, who says he never consented and thought he was recording a holiday greeting. Thompson is now suing FanDuel for feeding his addiction, and the Pennsylvania Gaming Control Board is reviewing sportsbooks' use of celebrity messages to keep high rollers betting.

Think about the business model that produces that story. Sportsbooks make money when customers lose. So the customers losing the most get the white-glove treatment, and the ones who win too much get shown the door.

There's a reason prediction markets can be straight with their customers in a way sportsbooks can't. An exchange collects a small fee on every trade, win or lose, so no revenue rides on anyone's losing streak. When a platform's paycheck doesn't depend on a customer going broke, it can step in at the signs of trouble, the repeat losses and the chasing, without touching its own bottom line. And instead of fighting oversight, this industry keeps asking for more of it.

Some of these markets, like Kalshi and NADEX, are federally regulated, based in the United States, and volunteering to pay state taxes. North Carolina just passed a law recognizing federal oversight and taxing prediction market revenue, which was smarter than burning taxpayer money in court and inconvenient for the claim that these platforms cost states money. New Jersey came close to taxing prediction markets this year, and the loudest opposition came from the union representing Atlantic City's own casino workers, who argued that taxing prediction markets would "legitimize" a competitor to their industry. They'd rather forgo the tax revenue than admit prediction markets are here to stay.

My advice to my old friends in gaming is the advice I wish someone had given me during the Wire Act fight: innovate, don't litigate. The knee-jerk lawsuits didn't stop sports betting, tribal gaming, or the internet, and they won't stop this. I love Las Vegas. It's one of my favorite places on earth, and there's plenty of room for everyone. Let consumers decide.

After all, this is the town that will take a bet on anything. Funny that the one wager it won't touch is a fair fight.

Tyler Durden Sat, 09/05/2026 - 16:20
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