2026-08-21 ATS briefing¶

Why US Bond Markets Are Trembling¶

Jim O'Neill, the former Goldman Sachs chief economist, is asking the right question and then fumbling the answer. The US bond market's fragility this summer is real enough, but his reassurance that the US is not losing its anchor role because other markets fall too misses what the correlation actually signifies. When the supposed safe haven falls alongside everything else, that is not evidence of continued centrality; it is evidence that the centrality itself has become the problem.

The mechanism is straightforward. US Treasuries have functioned as the global risk-free asset, the collateral for the entire edifice of dollar-denominated credit. That role requires the US to issue ever more debt, which requires ever more buyers, which requires the Federal Reserve to guarantee the market's liquidity when private demand falters. Each cycle of crisis response has expanded the Fed's balance sheet and the Treasury's issuance simultaneously, so that the "anchor" now consists of a self-referential loop: US debt is safe because the Fed will buy it, and the Fed buys it because the debt must remain safe. The recent softening in inflation and high-frequency indicators that O'Neill mentions is precisely what threatens this loop, because it raises the prospect of the Fed stepping back while the fiscal arithmetic deteriorates.

The global correlation he cites as comfort is actually the tell. If US bonds were still functioning as a genuine anchor, a sell-off in them would push capital into other havens, not drag everything down together. The synchronous weakness suggests the market is pricing a single systemic variable: the sustainability of the dollar-based system itself. That is a different order of problem from a cyclical repricing, and it will not be resolved by pointing out that everyone is in the same boat. The boat is the issue.

Global grain shipments fall 8% as attacks in the Black Sea escalate¶

Source: Hellenic Shipping News

Ukraine's Operation MoLoChKa, launched on 6 July, has succeeded in doing what months of diplomatic pressure could not: it has made the Black Sea grain trade uninsurable in practice, if not in name. The 26% year-on-year collapse in Black Sea grain exports is the direct result of both sides now treating merchant shipping as a legitimate military target, with Russia's intensified strikes on Ukrainian ports and vessels following Ukraine's initial expansion of attacks from the Sea of Azov into the Black Sea proper.

The numbers are stark enough. Global grain shipments down 8% year-on-year, with the Black Sea's 14% share of seaborne grain volumes making the region's disruption disproportionately painful for importers in Africa, the Middle East and Asia. But the more interesting material is in the attempted workarounds. Russia's redirecting of cargoes toward overland routes, the Caspian, the Baltic and the Far East runs straight into the railway bottlenecks that already constrain coal exports to the Pacific. Ukraine's alternatives, the Danube ports and Romanian facilities, face capacity constraints that cannot absorb the volumes normally shipped through Odesa and Mykolaiv.

The storage deficit of 11 million tonnes by November, equivalent to 13% of Ukraine's expected harvest, is where the crisis becomes concrete. Grain that cannot be shipped and cannot be stored will rot, and the difference between a harvest and a loss is a matter of transport infrastructure. This is the material basis for the coming food price spike, and it will hit hardest in the import-dependent states of the Global South that have no strategic reserves to cushion the blow.

Russia's rejection of Ukraine's proposal to halt attacks on shipping suggests Moscow calculates that the disruption costs its adversary more than it costs itself, given Ukraine's greater dependence on seaborne exports. That may be true in the narrow accounting of the war economy, but it ignores how the resulting price inflation will feed social instability across the regions that depend on Black Sea wheat. The grain trade has become a weapon, and the collateral damage is measured in hunger.

Is AI reducing employment for software coders?¶

Source: FRED Blog

Crane and Soto's counterfactual modelling at the Fed pins the sharp deceleration in US coder employment since November 2022 on the public launch of ChatGPT, distinguishing an occupational shock from a broader industry downturn. The timing is clean: the dot-com bust and 2001 recession produced a similar dip in the computer systems design industry, but that was a cyclical correction across the whole sector. This time, the industry itself kept growing while the coders inside it stopped being hired.

The distinction matters because it isolates the mechanism. Capital did not stop investing in software; it stopped paying for the specific labour that used to write it. That is a qualitative shift in the composition of the workforce, not a cyclical pause. When 40% of the industry's employees are coders and over 30% of national coder employment sits in that one industry, the concentration makes the shock legible in the aggregate data.

What the Fed researchers cannot model is where the displaced labour goes. The counterfactual tells us the shock is real, but it says nothing about whether those workers are being retrained, downgraded into adjacent roles, or simply exiting the labour force. For a Marxist reading, the interesting question is not whether AI displaces workers, that is the normal operation of capital raising the organic composition. The question is whether this displacement is being absorbed through the usual channels of devaluation and reabsorption, or whether it marks a rupture where the pace of technological substitution outstrips capital's capacity to create compensating employment. The Fed's own data suggests the former, but the modelling horizon is too short to tell.

Why Criminals Love the Chinese Economy¶

Source: Foreign Affairs

Beijing's own capital controls built the machine that now launders cartel money and moves North Korean crypto. The $50,000 annual quota for foreign currency purchases, combined with low domestic deposit returns, created a class of wealthy Chinese desperate for offshore assets. Underground bankers answered that demand from the 1990s onward, building shell companies in Hong Kong that settled renminbi against dollars held abroad. Macau junket operators extended credit in Hong Kong dollars and collected in mainland renminbi, moving capital across borders under the casino's cover.

That infrastructure was never designed for drug money or scam proceeds. It simply turned out to be perfectly suited to them. The same intermediaries who help a Chinese businessman buy a Lisbon apartment can match a Mexican cartel's excess dollars with a Chinese client who wants dollars abroad. The anticorruption campaign then pushed these financiers out of Macau and Hong Kong into Cambodia and the Philippines, where they landed alongside the scam compounds and their captive labour force. A Singaporean anti-money-laundering operation in 2023 seized $2.2 billion in assets from ten Chinese-born operatives, most holding Cambodian passports, showing how thoroughly the legal wealth-export channel and the fraud economy have fused.

Beijing's enforcement is real but structurally incapable of going further. The scam compounds along the Myanmar border were shut down and 57,000 suspects arrested, yet the industry keeps growing. The reason is that cracking down on the financial plumbing would mean dismantling the very mechanism that lets Chinese capital escape the country's own restrictions. And the illicit economy serves strategic purposes: those same networks move nitrocellulose to Russia and sodium perchlorate to Iran while Beijing maintains plausible deniability. Washington's Scam Center Strike Force targets the fraud centres themselves, but the money channels are the load-bearing wall, and neither government can touch them without bringing down the structure they stand on.

US deports 20 people to Liberia, the first of 1,200 migrants under Trump deal¶

Source: The Guardian

Twenty Liberians stepped off a plane in Monrovia on Thursday, the first instalment of a deal that could see 1,200 people deposited in a country many of them have never set foot in. The Liberian information minister confirmed the cohort will include African nationals alongside people from the Americas and Caribbean, which is the tell. This is not repatriation. It is a logistics exercise in dumping unwanted bodies, with the receiving state paid to take them.

The price is explicit: $124m in assistance and extended visitor visas for Liberians, from 12 to 36 months. The US is buying disposal capacity with the same instruments it uses to buy everything else. The Senate report from February puts a finer point on the economics, noting $7.5m went to Equatorial Guinea for 29 people, more than all US aid to that country in the previous eight years. When the per-head price exceeds the annual aid budget, the transaction has stopped being about migration policy and become a straightforward market in human cargo, with the US as the only buyer.

The lawyers' description of a "legal loophole" undersells the mechanism. Deporting someone to a third country they have never visited, where they face safety risks, and then watching 80% of them make their own way back to the countries they fled, is not a loophole. It is a deliberately circuitous route that shifts the cost and the cruelty of return onto the deportee while the US government keeps its hands clean of direct removal to danger zones. The state department disputes the characterisation, which is what state departments do when the arithmetic is published.

The scale matters less than the precedent. Twenty-three thousand people sent to 26 countries under deals with at least 35 governments, many of them secret, many of them with poor human rights records. The infrastructure for mass third-country deportation is being built quietly, country by country, and once built it will not be dismantled by a change of administration. The next crisis will find the machinery already in place.

Brazil launches AI supercomputer push while balancing US and Chinese tech¶

Source: Al Jazeera

The 2.3bn reais splits almost perfectly down the middle: 1.3bn for a Huawei and iFlytek partnership building large language models in Rio, 1bn for a tender in Rio Grande do Norte that unnamed officials expect Nvidia to win. Lula's government calls this balance, a strategy of not depending on any single country. What it actually describes is the Brazilian state paying both imperial camps for the same commodity, AI infrastructure, and calling the invoice a foreign policy.

The sequencing matters more than the symmetry. The Chinese project starts in July 2027. The Nvidia machine is expected to begin operating by the end of next year. Brazil's most advanced computing capacity arrives first, built by the US supplier, while the sovereignty-touting Chinese partnership comes later and is framed around language models rather than raw processing power. The government's own statement, that the aim is strengthening national sovereignty over data, sits awkwardly against the fact that sovereignty over the hardware itself is being tendered out to the two firms best positioned to deny it.

Rio Grande do Norte was chosen for its energy potential, which is the polite way of saying the supercomputer will be parked where electricity is cheap and political resistance is weak. The FNDCT disbursements are phased, so the real test of this balancing act will come when one partner objects to the other's presence. China is Brazil's largest trading partner; the US is its largest source of foreign direct investment and has just slapped tariffs on Brazilian goods. Those are not parallel pressures. Trade can be redirected, capital flight cannot. When the squeeze comes, the 1bn reais tender will look less like a choice and more like the only option available.