Earlier this month, when much of the attention was largely focused on private credit, we warned that one of the old, familiar credit market time-bombs, commercial real estate which for many years had been penned as the “Next Big Short”, was deteriorating rapidly: according to the latest TREPP CMBS monthly report, March saw a surge in the CMBS delinquency rate, which jumped by 41bps to 7.55%, the highest in years, led by a surge in the lodging rate, a category which until now was not a source of concern. 

It now appears that this particular time bomb is about to go off, as the huge redemptions wave that rocked private credit in recent months is making a move into commercial real estate. 

According to Bloomberg, Barry Sternlicht’s high-profile Starwood Capital Group Management is halting redemptions from a $22 billion real estate fund aimed at retail investors as it seeks to prevent a flight of assets amid mounting pressure on its bet that the commercial real estate markets would quickly recover from interest rate rises in 2022 and 2023

The asset manager is “temporarily suspending” share repurchases from its Starwood Real Estate Income Trust with a few exceptions following a strategic review, according to a letter to shareholders. It will also cut its annualized distribution to 4.7% for Class I shares, down from 6.3% as of March.

Sternlicht’s fund, one of the first retail private markets funds, pinned its decision to temporarily suspend most redemptions on interest rates that have “remained high”. The move comes after Sreit had restricted investors’ liquidity rights by more than 80% two years ago

“We recognize this decision may be frustrating for some shareholders,” Starwood CEO Barry Sternlicht said in the letter. “However, taking this step now allows us to preserve the opportunity to realize better outcomes as market conditions improve.”

The issue was “not the real estate,” said Sternlicht in the letter, but rather “the pressure created by elevated redemption requests, which rose quite suddenly when interest rates spiked and remained high”. 

As the FT notes, SREIT has struggled to recover from a real estate market that has remained weak since interest rates began to creep up four years ago. The fund owns 598 properties across the US. Sternlicht said Sreit would “reintroduce liquidity when it can be done in a consistent and sustainable way” Until then, the firm will only allow investors to redeem their shares due to death, disability or if their balance is below $5,000.

The CEO said Starwood expected “the war with Iran to conclude, oil prices to subside, inflation to stabilize, and for Kevin Warsh to be seated as Fed Chair, supporting a lower interest rate environment”. 

“The temporary actions announced today reflect our commitment to making the right long-term decisions for all SREIT shareholders, including the nearly 70% who have never made a redemption request,” Sternlicht said in an emailed statement. “Our interests are fully aligned with our investors as the largest owner of SREIT, with over a $500 million ownership stake.”Sternlicht said in a statement.

Last month, hedge fund Saba Capital last month offered to buy 5% of the outstanding shares in Sreit, at a discount of more than 20% of the fund’s most recent stated value. In the end, Saba acquired only $7.7 million of the approximately $400mn in SREIT shares they had offered to buy, the FT reported. 

Two years ago, Starwood limited investors’ ability to redeem their investments after the FT reported that SREIT had tapped its credit facility to support redemptions, rather than selling real estate assets.

SREIT launched in 2018 amid a wave of similar offerings from Blackstone and KKR  to give retail investors exposure to commercial real estate. In the early years, low interest rates helped the funds plow capital into apartment buildings, warehouses and other properties. But the real estate cycle flipped in the middle of 2022, when a sharp increase in interest rates cratered property values and pushed investors to withdraw capital. Those withdrawals have been eating into SREIT’s liquidity, leading to Wednesday’s decision to halt redemptions.

As readers are well aware, SREIT is not the only retail-oriented fund that has come under pressure in recent months. Similarly structured vehicles that invest in private credit have suffered a wave of withdrawals amid concerns over underwriting standards and potential disruption to software businesses from AI, forcing managers to enforce caps on withdrawals.

SREIT is among the largest owners of multifamily apartments in the US, with more than 63,000 apartment units concentrated in the Sunbelt, including Texas and Florida, according to the letter.

Sternlicht made a reputation buying distressed real estate in the aftermath of the savings and loan crisis of the 1980s and 1990s. He went on to found Starwood Hotels & Resorts, which was later acquired by Marriott International Inc., and the real estate lender Starwood Property Trust.

In recent years, he has criticized the Federal Reserve for being late to increase interest rates in the aftermath of Covid. In the letter he said that he expects the war in Iran to end, leading to lower oil prices and stabilizing inflation. He now expects the Fed to cut rates.  

Well that was anticlimactic… On Thursday, the House of Representatives approved by voice vote a Senate-passed bill to fund most of the Department of Homeland Security, clearing the way to end the longest partial government shutdown in U.S. history after 76 days.

The measure now heads to President Trump’s desk. The shutdown, which began February 14, will officially conclude once the president signs the legislation into law.

Democrats had long objected to funding Immigration and Customs Enforcement (ICE) and Border Patrol – the two DHS agencies at the center of the administration’s immigration crackdown – prompting the impasse. The Senate unanimously passed legislation last month to fund the remainder of DHS, but House Republicans initially rejected the plan, arguing it would amount to caving to Democratic demands to defund the president’s immigration agenda.

After weeks of negotiations, House Speaker Johnson, Senate Majority Leader John Thune, and President Trump settled on a two-track solution. The first track – immediate House passage of the Senate bill – will reopen the broader department. The second track will fund ICE and Border Patrol through the budget reconciliation process, allowing Republicans to advance the measure without Senate Democratic support.

Both chambers took the first formal step toward reconciliation this week by adopting a budget plan that directs the relevant committees to draft legislation funding the immigration enforcement agencies. President Trump has said he wants the full reconciliation package on his desk by June 1.

The president ordered DHS to redirect funds to cover employee payroll in March, but Homeland Security Secretary Markwayne Mullin warned that money for payroll would run out by the beginning of May, intensifying pressure on lawmakers to act.

ICE and Border Patrol have been largely insulated from the shutdown’s effects. Both agencies received tens of billions of dollars in last year’s One Big Beautiful Bill Act, allowing their operations to continue mostly unimpeded.

The heaviest burden has fallen on other DHS components, including the U.S. Coast Guard, Transportation Security Administration, and Federal Emergency Management Agency.

In an exclusive interview with CBS News, Coast Guard Commandant Adm. Kevin Lunday said his workforce was “furious” that the impasse had dragged on so long, calling the situation “incredibly frustrating.”

The House action marks the beginning of the end for a shutdown that has left thousands of federal workers and critical agencies in limbo for more than two and a half months. Once signed by the president, the legislation will restore funding and stability to the vast majority of DHS operations while Republicans move forward separately on their immigration enforcement priorities through reconciliation.

Submitted by The Bureau’s Sam Cooper,

Federal prosecutors in New York have charged ten current and former senior Mexican government officials — among them the sitting governor of Sinaloa, a sitting federal senator, the mayor of the state capital, and the state’s former secretary of public security — with conspiring to protect the Sinaloa Cartel’s most powerful faction in exchange for millions of dollars in drug money, in what may be the most sweeping corruption indictment ever brought against a sitting government in the Western Hemisphere.

The superseding indictment, filed in the Southern District of New York and unsealed Wednesday, charges all ten defendants with narcotics importation conspiracy — specifically, conspiracy to flood the United States with fentanyl, heroin, cocaine, and methamphetamine — as well as conspiracy to possess machineguns and destructive devices in furtherance of drug trafficking.

One defendant, a municipal police commander, faces additional charges of kidnapping resulting in death: the alleged abduction and murder of a Drug Enforcement Administration confidential source, his relative, and a 13-year-old boy, carried out using a police patrol car.

The document does not describe a cartel that corrupted a government. It describes a government that became the cartel’s operating infrastructure.

In what appears to be the first instance in American legal history of the Justice Department indicting a sitting Mexican governor, prosecutors allege that Ruben Rocha Moya, 76, who has served as governor of Sinaloa since November 2021, did not simply accept cartel money. He allegedly made his deal with the Chapitos — the sons of Joaquin “El Chapo” Guzman — before he was ever elected, in a meeting guarded by Cartel sicarios armed with machineguns, and delivered on every term thereafter.

Rubén Rocha Moya, the governor of Sinaloa state… 

What makes the filing extraordinary even by the standards of major cartel prosecutions is the physical evidence prosecutors say they recovered: handwritten monthly bribe lists, seized in Mexico during the investigation, that record by name, alias, and official position which Sinaloa officials were being paid by the Cartel, and exactly how much. The lists name defendants in this case. They are reproduced in the indictment as photographs. They are, in effect, the Chapitos’ payroll — and they show a government bought line by line.

“The Sinaloa Cartel is a ruthless criminal organization that has flooded this community with dangerous drugs for decades,” said U.S. Attorney Jay Clayton. “No matter your title or position, we are committed to bringing you to justice.”

The indictment sets off what observers described as a political earthquake in Mexico — and poses a crisis of a different kind for President Claudia Sheinbaum, whose own party, Morena, counts at least three of the defendants among its members. The charges land on the eve of formal renegotiations of the United States-Mexico-Canada Agreement, the trade pact central to Mexico’s export economy, a timing that reads less like coincidence than calculated maximum pressure.

Ioan Grillo, a veteran journalist and author who has spent decades covering Mexico’s cartels, noted Wednesday that Mexico’s foreign relations department received the extradition requests for Rocha Moya and the other Sinaloa officials the previous evening at 6 p.m. — meaning Sheinbaum had roughly 18 hours to prepare a response before the indictment became public. “She is in a very tough position,” Grillo wrote.

At the center of the indictment is Rocha Moya.

As governor, he oversees Sinaloa’s entire administrative apparatus, including all state and local police forces. Prosecutors allege his relationship with the Chapitos predates his election and was foundational to it. In early 2021, while still campaigning, Rocha Moya allegedly attended a meeting with Ivan and Ovidio Guzman at which he promised that if elected, he would install officials friendly to the Chapitos’ drug trafficking operations throughout the Sinaloa government. The Chapitos delivered on their side.

On election day in June 2021, sicarios acting on Ivan’s orders stole ballots and ballot boxes for the opposing party. They used a list of Rocha Moya’s opponents and their home addresses — provided to the Chapitos by co-defendant Enrique Diaz Vega — to kidnap and intimidate those opponents into abandoning the race. Officers of the Sinaloa State Police, whose commanders had been ordered to stand down, received emergency calls reporting armed men at polling stations, voters being directed at gunpoint toward favored candidates, and ballot boxes being stolen across Culiacan, Mazatlan, Navolato, and Elota.

After winning, Rocha Moya and his secretary general, Enrique Inzunza Cazarez — now a sitting federal senator — met again with the Chapitos under machineguns and confirmed their arrangement: in exchange for the Chapitos’ support, Rocha Moya would deliver effective control of the Sinaloa State Police to the Cartel. As governor, prosecutors allege, he has delivered on every term.

Inzunza Cazarez, now representing Sinaloa in Mexico’s federal senate, allegedly served as a direct physical courier between the Chapitos and Rocha Moya, conveying communications confirming the terms of their arrangement. Enrique Diaz Vega, who served as Sinaloa’s secretary of administration and finance from November 2021 to September 2024, allegedly handed the Chapitos the names and home addresses of Rocha Moya’s political opponents so the Cartel could threaten them out of the race before a ballot was cast.

The corruption ran deep into the state’s law enforcement apparatus.

Damaso Castro Zaavedra, Sinaloa’s deputy attorney general, allegedly received approximately $200,000 pesos — roughly $10,893 in U.S. dollars — every month. In exchange, he gave the Chapitos advance warning of planned operations, including identifying which drug labs were being targeted by the Drug Enforcement Administration so evidence could be destroyed or moved before raids began.

Two successive chiefs of Sinaloa’s Investigative Police — Marco Antonio Almanza Aviles and Alberto Jorge Contreras Nunez, known as “Cholo” — were both allegedly on the Chapitos’ monthly payroll throughout their tenures. Aviles allegedly accepted roughly $16,670 per month from a meeting at one of Ivan’s ranches in 2017 or 2018; in exchange, he issued arrest warrants for the Chapitos’ enemies on demand and ordered the release of cartel members arrested for drug trafficking.

Contreras Nunez, selected by Rocha Moya with explicit Chapitos approval and holding the position until approximately February 2026, accepted approximately $16,000 per month in cash and helped the Chapitos track down and kill their enemies. Gerardo Merida Sanchez, Sinaloa’s secretary of public security — overseeing the entire state police — allegedly accepted more than $100,000 in U.S. dollars in monthly cash bribes and in 2023 alone warned the Cartel in advance of at least ten raids on drug labs, allowing them to evacuate personnel, drugs, and equipment before police arrived.

Jose Antonio Dionisio Hipolito, known as “Tornado,” a deputy director and later commander of the Sinaloa State Police, allegedly accepted approximately $6,000 per month from at least 2012 through 2024, sold ammunition and assault rifle magazines to Chapitos members, had arrest paperwork altered to conceal that detained cartel members had been armed, and met personally with Ivan and Ovidio to receive a radio with instructions to stay in contact.

The most grave allegation in the indictment concerns October 2023, and it falls on Juan Valenzuela Millan, known as “Juanito,” a high-level commander in the Culiacan Municipal Police from approximately 2018 to 2024.

Millan allegedly accepted approximately $41,000 per month in cash — funds distributed among himself, his commanders, and more than forty other corrupt municipal officers — and gave the Chapitos unrestricted access to the intelligence, operations, and physical resources of the municipal police, including patrol cars and radios.

When Ivan Guzman and a senior Chapitos associate ordered the kidnapping and murder of Alexander Meza Leon, a confidential source providing information to the Drug Enforcement Administration about Chapitos drug trafficking operations, Millan’s officers carried out the abduction. In a marked patrol car, municipal police stopped Meza Leon and another victim on the street, detained them, and handed them directly to Cartel sicarios, who tortured and killed them. Among the victims killed was a 13-year-old boy. Additional civilians were subsequently kidnapped and murdered as the Chapitos sought to eliminate anyone associated with the source. Count Four of the indictment charges Millan alone with kidnapping resulting in death. Juan de Dios Gamez Mendivil, the current mayor of Culiacan, rounds out the list of defendants. He allegedly accepted more than $10,000 in U.S. dollars per month and shielded Chapitos operations across the city he governs.

Among the most remarkable pieces of evidence described in the indictment are physical documents prosecutors say they recovered from Mexico: handwritten monthly bribe lists maintained by the Chapitos’ plaza boss in Culiacan. Each month, prosecutors allege, the plaza boss received from the Chapitos a box of cash alongside a list specifying the name, alias, or official position of each official to be paid and the precise peso amount. Three such lists are reproduced as photographs in the indictment — each headed with a variation of “Gobierno” and a total figure, each with the names of defendants circled in red. They are, prosecutors say, the Cartel’s own records — a paper ledger of a purchased government, recovered in Mexico, showing the systematic monthly acquisition of Sinaloa’s law enforcement apparatus, position by position, peso by peso.

The indictment situates the corruption within a supply chain that begins in China and ends in American communities.

The Sinaloa Cartel, prosecutors allege, has for years worked directly with precursor chemical manufacturers in China and elsewhere to obtain the raw materials needed to produce fentanyl and methamphetamine at industrial scale. Sinaloa’s position on Mexico’s Pacific coast has given Chinese suppliers both maritime and air access to deliver those chemicals to the state and its surrounding regions — access that was only possible, prosecutors allege, because corrupt officials like those charged Wednesday ensured no one would interfere with the shipments.

Once manufactured, the narcotics moved north through Sonora and Baja California across the United States border concealed in car compartments, tractor-trailers, luggage on commercial flights, shipping containers with falsified paperwork, and the bodies of drug mules, as well as through tunnels beneath the border and on so-called black flights, where planes flew with their transponders disabled. Stash houses in Southern California, El Paso, and Phoenix fed a wholesale distribution network reaching New York and the East Coast. Fentanyl has become one of the leading causes of death for Americans between the ages of 18 and 49.

The political fallout for Sheinbaum is severe.

At least three of the defendants — Rocha Moya, the mayor of Culiacan, and Senator Inzunza Cazarez — are members of her party, Morena. Rocha Moya was a staunch ally of Sheinbaum’s political mentor, former president Andres Manuel Lopez Obrador, and enthusiastically embraced Lopez Obrador’s signature “Hugs, Not Bullets” cartel policy — a deliberate strategy of avoiding direct confrontation with Mexico’s most powerful criminal organizations. Critics have long argued that both Lopez Obrador and Sheinbaum carried out few high-level corruption prosecutions and weakened the institutions responsible for rooting it out. His long personal friendship with Lopez Obrador, Mexican observers have noted, appeared to shield Rocha Moya from scrutiny despite long-rumored cartel ties.

Sheinbaum, just days before the unsealing, told reporters her government had seen no evidence supporting the corruption allegations and insisted any American investigation of Mexican nationals must be reviewed by the Mexican attorney general’s office. Mexico’s foreign ministry, after receiving the extradition requests, said the documents provided by Washington did not contain sufficient evidence to establish the defendants’ responsibility, adding that the attorney general’s office would determine whether arrests and extraditions were warranted.

Rocha Moya denied everything. “This attack isn’t just against me,” he wrote on X Wednesday afternoon. “It is part of a perverse strategy to violate the constitutional order” of Mexico and an assault on national sovereignty. “We will show them that this slander doesn’t have any sort of foundation.” Senator Inzunza Cazarez issued a similar denial.

U.S. Ambassador to Mexico Ron Johnson last week signaled the campaign was coming, warning publicly that Washington would be targeting Mexican officials linked to organized crime. Two of El Chapo’s sons — Ovidio Guzman Lopez and Joaquin Guzman Lopez — are currently in U.S. custody facing drug-smuggling charges and are widely reported to be cooperating with prosecutors in exchange for leniency.

The granular detail in Wednesday’s indictment — the meeting dates, the ranch locations, the radio handoffs, the bribe list totals — is consistent with, among other possible sources, testimony from individuals who were present at those meetings. Ovidio and Joaquin Guzman Lopez, both in U.S. custody and widely reported to be cooperating with prosecutors, would be among those with direct knowledge of the arrangements described.

As of Wednesday, none of the ten defendants were in custody. The charges carry maximum penalties including life imprisonment on the narcotics conspiracy count. Eight of the ten face mandatory minimum sentences of 40 years.

Iran’s parliament speaker Mohammad Bagher Ghalibaf, who has since the war’s start and prior assassinations of top leaders including Ayatollah Ali Khamenei become the most visible figurehead representing the Islamic Republic to the world, has continued trolling the United States even as President Trump is renewing fresh military strikes amid an uneasy extended ceasefire and ongoing US naval blockade of Iranian ports.

He stated Wednesday that the United States’ naval blockade of the country has a goal to create division and “make us collapse from within.” His message was delivered through state TV and he is warning citizens about “maintaining unity” in the face of this unprecedented economic and military pressure.

Ghalibaf went on to explain that Trump falsely “divides the country into two groups: hardliners and moderates, and then immediately talks about a naval blockade to force Iran into submission through economic pressure and internal discord,” according to more from state media sources.

via state media

“The enemy has entered a new phase and wants to activate economic pressure and internal division through naval blockade and media hype to weaken or even make us collapse from within,” he continued, urging Iranians that the only solution is to keep national unity amid the assault.

This hearkens back to Trump having said earlier this month that the Iranian government was “seriously fractured, not unexpectedly so.”

This was quickly followed by reports that Ghalibaf himself was being sidelined by the IRGC when it comes to the next potential US-Iranian talks. But Tehran quickly rejected reports that the influential parliament speaker had been removed from the negotiating team.

As for definitions of ‘hardline vs. moderate’ – these are somewhat superficial and manufactured by the West (akin to prior Middle East wars and regime change operations, with one recent example being so-called “moderate rebels” in Syria).

With the MSM and Iran, this is based fundamentally on speculation from afar and circular logic. Any Iranian official who is against pursuing more negotiations – while understandably coming to the conclusion that Washington can’t be trusted (after it bombed Iran twice during talks) – gets automatically labelled ‘hardliner’ by the MSM, and this also carries all kinds of implications overlapping with radical Islam. The idea is to make anyone not amenable to Washington and Israeli plans for the region look irrational and fanatical – even if their decisions might be rational and understandable based on Iranian national self-interest and survival.

Meanwhile Ghalibaf has continued trolling the US on X over rising oil and gas prices, which again suggests that Tehran is settling in for a long war, and is willing to endure and survive politically…

3 days in, no well exploded.We could extend to 30 and livestream the well here.
That was the kind of junk advice the US admin gets from people like Bessent who also push the blockade theory and cranked oil up to $120+. Next stop:140. The issue isn’t the theory, it’s the mindset.

— محمدباقر قالیباف | MB Ghalibaf (@mb_ghalibaf) April 29, 2026

The longer the Hormuz standoff goes, and the more the anti-Tehran rhetoric flows out of the White House and from Trump on Truth Social, the more likely the Iranian so-called hardliners are to influence broader numbers of Iranian leaders and sectors of the public. This is especially if Tehran gets bombed again, which is looking likely.

Yet Washington is hoping that it actually produces the opposite: admin officials have expressed hope that common Iranians would take to the streets in large numbers, with regime collapse being the end goal.

On the surface, today’s Q1 GDP print was unremarkable: Real GDP grew 2.0% annualized in the first quarter, somewhat below consensus expectations of 2.3% and reflecting a surprisingly small rebound in government spending after the shutdown drag in Q4. Federal government spending contributed only half as much to real GDP growth in Q1 (+0.6%) as it subtracted in Q4 (-1.2%), implying that the level of real federal government spending in Q1 is 2.2% below its level in 2025Q3. Inventory accumulation also contributed less to Q1 growth than we had anticipated (+0.4pp vs. our expectation of +1.2pp). Net exports subtracted 1.3% from GDP after boosting it dramatically in early 2025 as imports surpassed exports. Consumer spending rose 1.6%, somewhat above consensus expectations, but as we noted earlier, much of this has been due to “stimulus” refunds which are now over, and which pushed spending growth far higher than income growth.

Even with the stimmies, personal savings dropped to a 3 year low.

Yet when we get to fixed investment, something remarkable emerges: Housing investment declined 8%, and subtracted 0.31% from the bottom line GDP print, which is to be expected with mortgage rates remaining very high, maintaining a depressed housing market.

But Nonresidential fixed investment was the outlier, soaring by 10.4%, largely reflecting a boost from higher electronics imports and a 12% annualized decline in software prices.

Let’s take a closer look at the breakdown.

The chart below shows quarterly annualized GDP growth broken down by components. It shows that Q1 GDP grew at exactly 2.0% in Q1. Also notable is that traditionally strong consumption, which contributed 1.0% of GDP growth, was offset by net trade (1.3%) with, inventories (0.4%) and government (0.73%) providing a modest offset. 

The highlighted block is Fixed Investment, which contributed 1.1%. However, keep in mind that residential fixed investment subtracted 0.31% from the total number, which means that Nonresidential fixed investment was responsible for 1.38% of the 2.0% GDP print.

Focusing on the fixed investment component, we find the following: as noted above, it was all about non-residential fixed investment.

Zooming into this segment, we find that Nonresidential equipment grew by 6.3%, or contributing 0.9% to the 2.0% GDP, while Intellectual Property products grew just over 5%, and added 0.7% to the bottom line GDP. 

While IP is clear – it consists primarily of Software, the kind that one uses to create and develop AI tools, as well as R&D – the components behind Nonresidential equipment need a closer look again, and here we find that Information Processing equipment, i.e., data centers, grew at a stunning 13%, comprising virtually all of the 0.88% contribution to 2% GDP growth.

And there you have it: between Software (0.7% of the GDP growth) and Nonresidential Equipment (0.88%), AI – which was the primary driver behind growth in both – contributed just over 1.5% to GDP growth of 2.0%; in other words about 75% of all US growth in Q1 was due to AI.

Another way to visualize the remarkable impact of spending on “computers” is the chart below: it clearly shows just how reliant the US has become on spending on computer products.

And that’s why AI is now not only a market bubble, but it has become a core anchor propping up the entire US economy; it’s also why the US government will have no choice but to backstop it once the inevitable AI bubble pops. 

Florida Gov. Ron DeSantis rolled out a proposed redistricting map for the state this week, but the way he did it could give ammunition to lawyers mounting inevitable legal challenges that will follow the map’s expected approval by the legislature, both Democratic and Republican observers say. Some Republican legislators are uneasy with DeSantis’ rollout of the plan — which he shared with Fox News before he shared it with them. 

Today, Republicans hold 20 of Florida’s US House seats, compared to 8 held by Democrats. Under the DeSantis plan, the GOP could have a 24-4 advantage. DeSantis gave Fox News a map of his proposed new districts, depicting anticipated party control after the midterms.

The format of that map could prove legally fatal to the scheme. The Florida constitution contains anti-gerrymandering “Fair District” provisions that seek to prevent partisan “intent.” A Florida Republican consultant who’s participated in previous redistricting efforts expressed surprise at the  DeSantis team’s use of a color-coded map, telling NBC News, “This is wild. I don’t know how you can argue a red and blue map released from the governor’s office doesn’t show some form of partisan intent.” DeSantis told Fox News that new districts are needed after Florida was “shortchanged” in the 2020 census that determines each state’s number of House seats. 

In a memo to lawmakers, DeSantis also signaled his new map will be an attempt to force reconsideration of the Fair Districts provisions in the state Constitution. The language requires the consideration of race when drawing new political lines, which DeSantis says is unconstitutional. – NBC

Some Republicans are uneasy about the proposed districts. To create new GOP opportunities, some Republican-rich neighborhoods have been removed from current Republican districts, amping up the pressure on the incumbents who hold them, at a time when President Trump’s low approval ratings and significant Republican disenchantment with the administration present significant headwinds for the party. While many Republicans are still enthusiastic about Trump, some are put off by his initiation of a war of choice on Iran, his opposition to the release of the Epstein files, and his disinterest in imposing fiscal discipline. 

In what may or may not prove to be an omen for November, a March special election brought Republicans and Trump a bruising loss in Florida, as the GOP lost its grip on a reliably red state House seat that includes President Donald Trump’s Mar-a-Lago estate. The Democrat challenger won the race by just over 2 points — an approximate 11-point swing toward Democrats from the 2024 outcome in the Palm Beach County district.

An appropriate response to Virginia – but what this reveals is both sides have given up on persuasion, recognizing the country is so divided that it’s basically impossible. So it’s a race to rig the system in your favor, all while speaking in grand terms about “our democracy.” https://t.co/96f8Dsfs4O

— FischerKing (@FischerKing64) April 27, 2026

The Florida plan is the latest development in a year-long, nationwide set of electoral-map skirmishes ahead of the 2026 midterm elections. In the opening salvo of a war started at the urging of President Trump, last August Texas undertook a rare, mid-decade redistricting effort that aspires to flip five current Democrat-held seats into the Republican column this November. California responded with a new map meant to fully negate the Texas impact, flipping five GOP seats. Other states have made tweaks, and in the latest move, Virginians narrowly approved a referendum that would likely see the GOP lose four seats to the Democrats.

The various plans have been subjected to legal challenges. The last few days brought big news on that front. On Monday, the US Supreme Court issued a summary reversal allowing Texas to proceed with its new congressional map for the November 2026 elections. The justices overturned a federal district court’s earlier injunction against the new boundaries. Sunday held good news for Democrats, as a Virginia court rejected a Republican-led challenge to the state’s new map.

As the legal battles continue, some see the redistricting war as a clear signal that America is steadily plowing deeper into discord: 

We have reached phase six of Ray Dalio’s Big Cycle — when irreconcilable differences lead to political fracture, war, and then collapse. Arguably, we are already in a soft civil war.

— Kenneth Rapoza (@BRICbreaker) April 27, 2026

Fidelity and Vanguard have stopped processing donations to the Southern Poverty Law Center through their donor-advised fund platforms, citing the organization’s recent federal indictment on fraud charges.

The moves came April 29, eight days after a federal grand jury in Alabama indicted the SPLC on 11 counts of wire fraud, false statements to a bank, and conspiracy to commit money laundering. Prosecutors allege that between 2014 and 2023 the group secretly funneled more than $3 million in donor funds to individuals affiliated with extremist organizations, including the Ku Klux Klan, Aryan Nations, and the National Socialist Party of America, while misleading donors about the use of the money.

Fidelity Charitable, which oversees more than 350,000 donor-advised accounts, notified customers that the SPLC is no longer an eligible grant recipient, the NY Times reports. “Fidelity Charitable is aware of an ongoing governmental investigation into Southern Poverty Law Center,” the company wrote in an email to a donor. “Consistent with our grant-making standards and practices, the organization is not an eligible grant recipient during the ongoing investigation.”

Vanguard Charitable issued a similar denial when a donor requested a grant. “The organization has had allegations and/or charges brought against them for activities that may call into question their ability to carry out their tax-exempt charitable purpose,” the company stated.

Both sponsors have long-standing rules that allow them to reject grant recommendations when legal issues arise. Fidelity Charitable’s guidelines state that recommendations “might” be declined if an organization “is being investigated for alleged illegal activities or noncharitable activities, such as terrorism, money laundering, hate crimes or fraud,” or if other federal or state agencies are investigating the group.

Vanguard Charitable’s policy is triggered by any criminal indictment from state or federal authorities. A Vanguard spokeswoman said the sponsor makes grants “only to organizations that meet I.R.S. eligibility requirements” and pauses funding “while the matter is pending” when charges are filed. The company does not evaluate the substance of the allegations, she added.

Fidelity Charitable distributed $18.3 billion in grants last year. The SPLC now joins a list of organizations the sponsor has paused under its due-diligence rules.

Context of the Indictment

The Department of Justice announced the indictment April 21. Acting Attorney General Todd Blanche and other officials described the case as involving deception of donors. The SPLC has denied the allegations, called them politically motivated, and said its payments were part of a legitimate informant program that provided intelligence to law enforcement. The group has filed court motions seeking grand jury transcripts and restrictions on public statements by prosecutors.

The SPLC has not lost its tax-exempt status. Legal experts note that donor-advised fund sponsors can still act on investigations or indictments even without a final conviction or IRS revocation.

Turnabout is Fair Play, Bitch

The move carries extra bite because of what happened three years ago. Back in 2023, the SPLC released a report blasting donor-advised fund sponsors – naming Fidelity and Vanguard among them – for supposedly bankrolling “hateful and extremist beliefs.” The same organization that once criticized these platforms for lax standards now finds itself on the receiving end of their risk controls.(Fidelity notably stopped advertising on ZeroHedge during this period, so we assume they bent the knee). 

Not all donor-advised fund providers have followed the same path. Daffy, a newer platform, continues to allow donations to the SPLC, stating that it generally relies on the IRS’s determination of tax-exempt status. The SPLC remains in good standing with the IRS, the company said. Charles Schwab’s affiliated DAF platform had not issued a public statement as of Wednesday.

Authored by Wolf Richter via Wolf Street,

In 27 of the 33 big and expensive cities we track here, mid-tier home prices in March were down from their respective peaks in prior years, led by Austin (-26%), Oakland (-25%), and New Orleans (-19%).

Now also filtering into these mid-tier home prices is the “mansion shortage” in San Francisco, the epicenter of the AI investment bubble. Total employment in the city dropped and the unemployment rate ticked up. But a relatively small number of super-highly paid people get hired by AI companies, and they’re chasing down expensive homes, and there aren’t enough expensive homes for sale, and so they throw easy-come-easy-go money around in the realm of mid-tier homes and drive up their prices. Despite the recent spike in mid-tier home prices, they’re still 11% below the all-time high of 2022. By contrast, prices dipped in San Jose, where mid-tier homes are even more expensive than in San Francisco.

For one of the 33 cities, Boston, the jury was still out for March. April 2025 was the all-time high, and in March 2026, prices were down year-over-year by just a hair, and down by 1% from the high in April, but this is too close to call.

And in five of the 33 cities, prices rose to new highs in March, seasonally adjusted: New York City, Chicago, Philadelphia, Minneapolis, and Omaha. But price increases have been much slower than in the crazed free-money days of 2021 and 2022.

In the two years between mid-2020 and mid-2022, all of these cities had seen huge price spikes, some of which qualify for “price explosions”: Austin +62%, Phoenix +60%, Fort Worth +50%, Raleigh +49%, and Sacramento +39%.

Those price explosions were fueled by the Fed’s reckless free-money policies, which included trillions of dollars of purchases of Treasury securities and mortgage-backed securities, which led to the below-3% mortgage rates, even as inflation was raging at the time toward 9%, which led to crazed FOMO buying behavior at the time. Those price gains came on top of the already outsized price gains in the prior years.

The price measurement here is the seasonally adjusted three-month-average mid-tier Zillow Home Value Index (ZHVI) for single-family homes, condos, and co-ops, released today. Mid-tier means the middle-third by price in each market. The ZHVI is based on millions of data points in Zillow’s “Database of All Homes,” including from public records (tax data), MLS, brokerages, local Realtor Associations, real-estate agents, and households across the US. It includes pricing data for off-market deals and for-sale-by-owner deals.

To qualify for the list of the 33 most splendid housing bubbles, the city must be one of the largest by population and be among the expensive cities where the ZHVI for all mid-tier homes must have been at least $300,000 at some point.

Some cities that are large enough don’t qualify for this list because the ZHVI for all homes never reached $300,000, despite the surge in recent years, such as the cities of New Orleans, Houston, Philadelphia, Memphis, Oklahoma City, Tulsa, Kansas City, Cincinnati, Pittsburgh, etc.

But Houston, Philadelphia, New Orleans, and Omaha are included anyway: Houston and Philadelphia because they’re the fourth-largest and sixth-largest cities in the US; New Orleans because it got within a hair of $300,000 in 2022; and Omaha, because it’s within a hair of $300,000 now, and is thereby the most expensive big city in the center of the US.

The 33 Most Splendid Housing Bubbles.

In the little tables, MoM = month over month; YoY = year-over-year. The column furthest to the right shows the percentage increase “since 2000.” All seasonally adjusted.

See the rest here…

Hyperscalers are deploying as much as $725 billion in capital expenditures this year, primarily on AI data center buildouts, and it comes as no surprise that Caterpillar posted solid first-quarter earnings, as surging on-site power demand has created a boom for the company’s power-generation business.

CAT is one of the world’s biggest makers of machines used to build, mine, dig, haul, and power industrial sites. But what has investors focused on in recent quarters is its energy and power unit, which makes diesel and natural-gas engines, generators, turbines, and backup power systems.

CAT reported first-quarter per-share profit excluding one-time items of $5.54, compared with $4.25 a year earlier, beating the average analyst estimate tracked by Bloomberg of $4.63.

The heavy-equipment maker reported that sales at its power and energy unit grew by 23% year over year, largely driven by strong demand for on-site power generation at data centers.

Here’s a snapshot of first-quarter earnings (courtesy of Bloomberg):

Adjusted EPS $5.54 vs. $4.25 y/y, estimate $4.63 (Bloomberg Consensus)

EPS $5.47 vs. $4.20 y/y

Revenue $17.42 billion, +22% y/y, estimate $16.24 billion

Financial segment revenue $942 million, +8.2% y/y, estimate $895.8 million 

Machinery, Power & Energy revenue $16.47 billion, +23% y/y, estimate $15.41 billion

Adjusted operating income $3.13 billion, estimate $2.74 billion

Machinery, Power & Energy operating income $3.00 billion, +19% y/y, estimate $2.63 billion

Financial Products operating income $237 million, +18% y/y, estimate $225.3 million 

R&D expenses $537 million, +12% y/y, estimate $530.2 million

Backlog $62.7 billion

CAT shares are up 5% in premarket trading in New York. 

CAT shares have gone parabolic as news stories for data center power have erupted in recent years. 

Dec Mullarkey, managing director at SLC Management, was quoted by Bloomberg as saying, “Caterpillar is certainly benefiting from the AI buildout,” adding, “And given there is no letup in related capex, which has been confirmed in this earnings season, Caterpillar will continue to be an essential player in all that.”

On Wednesday, Alphabet and Meta Platforms both raised their full-year capex guidance, while Microsoft reported its first estimate of spending through the end of December, matching Alphabet’s $190 billion. Amazon reported $200 billion in spending this year, as the 2026 capex spending forecast by hyperscalers exceeds $700 billion, according to Bloomberg.

Soaring capex spending by hyperscalers this year only suggests increased demand for CAT’s power-generation systems.