House of Cards
Week of July 3-9, 2026
Published in conjunction with The Nation magazine, TRACKING THE CRISIS is a weekly round-up from The Democracy Collaborative tracking the administrative, legislative, and other actions of the Trump Administration as well as the many forms of legal and movement response from across a broad range of social, political, and economic actors. TDC is providing this service for collective informational purposes, as a tool for understanding the times during a period of disorientingly rapid flux and change in the U.S. political economy. This round-up is produced by humans, not by Artificial Intelligence. TDC should not be understood as endorsing or otherwise any of the specific content of the information round-up.
TRUMP TRACKER: Administration actions
ICE killing of Lorenzo Salgado Araujo sparks renewed outrage, scrutiny as arrest surge spreads across the country. Six months to the day after CBP agent Jonathan Ross shot and killed Renee Good in Minneapolis, ICE agents shot and killed Lorenzo Salgado Araujo in Houston Tuesday morning. This was the first known fatality of the latest surge in ICE enforcement operations and at least the eighth person killed by ICE during enforcement operations since the beginning of Trump’s second term.
Araujo, 52, was a Mexican citizen who had been living in Texas for 35 years with no criminal history. Lorenzo’s son reports that the father of three was actively in the process of obtaining legal status through a work permit. Araujo was shot in his vehicle during a traffic stop in the early morning hours while driving to work at his construction business. An official statement from the Department of Homeland Security stated that Araujo was shot during a “targeted enforcement operation” in the historically Mexican-American Magnolia Park neighborhood, just five minutes away from the site of Houston’s FIFA fan festival.
“He did not deserve to die,” said his son, Ronaldo Salgado, at a press conference Wednesday morning. “He did not deserve to be reduced to a headline of a Mexican man shot and killed by ICE. He deserved to live a quiet life as Lorenzo Salgado Araujo, a husband, a father and a job creator for dozens of men who also wanted the American dream.” Salgado, along with the rest of his family, is demanding an independent investigation into Araujo’s killing. The Texas shooting came less than a week after a federal agent fired at a vehicle in Harrisburg, Pennsylvania after trying to arrest the driver, identified as Mexican national Clemente Lara-Hernandez.
Also on Wednesday, Mexican President Claudia Sheinbaum condemned Araujo’s killing and said Mexico will pursue legal action against the United States for the killing of Araujo and other Mexican nationals who have been mistreated at the hands of ICE. On Thursday, four Congressional Democrats - Reps. Sylvia Garcia, Lizzie Fletcher, Al Green and Christian Menefee - joined the family’s demand for an independent investigation and release of bodycam videos related to the shooting in a letter directed to DHS Secretary Markwayne Mullin and acting ICE director David Venturella.ICE was quick to respond to the killing of Araujo with a familiar narrative: the slain man purportedly ignored verbal commands, rammed an ICE vehicle with his own, and caused agents to feel their lives were in danger. He was characterized by Homeland Security officials as an “illegal alien” who “evaded arrest” and “weaponized” his vehicle. However, as was the case with other incidents of ICE agents firing into vehicles, the agency did not immediately provide any video footage or evidence of damage to vehicles to corroborate their narrative. In previous incidents, video evidence and witness testimony have directly contradicted agency narratives, leading to assault charges against several shooting victims being dropped. So far, no ICE agents have been charged in any of the shootings.
At least three people were first-hand witnesses to the shooting: Salgado Araujo’s brother, Victor Hugo Salgado Araujo, and two employees, Daniel Tirado Pantoja and Jose Trinidad Rojas Pliego, who were in the vehicle with him when he was killed. All three were detained by ICE and have not been reached for public statement since. Juan Proaño, a representative for the families and CEO of the League of United Latin American Citizens, told The New Republic in an interview that the three are currently being pressured to self-deport.
Bombing exchanges between the U.S. and Iran intensify as Trump declares ceasefire over, unleashes verbal broadside at NATO Summit. Reciprocal strikes between the U.S. and Iran resumed on Tuesday after a relative period of calm during the official state funeral of Iran’s late Supreme Leader Ali Khamenei over the weekend. Millions of people defied an intense heatwave to attend the funeral, which took place at various sites across Iran and Iraq over six days. Among the throngs of mourners were thousands carrying red flags, the symbol for revenge, and others carrying signs saying “Kill Trump.” During the procession, chants and calls for revenge emanated from officials as well as the crowd in a show of strength and defiance as the fragile ceasefire still hung in the balance.
On Monday, Trump made a series of threatening statements as he spoke with reporters at the White House Rose Garden, saying the U.S. will win the war “one way or another.” He also returned to traditional themes, saying that Iran “had no money” and that “we’ll either make a deal or finish the job,” as well as claiming that the U.S. could “knock down” Iran’s civilian infrastructure, such as bridges and power plants, in “a small part of an afternoon.”
Members of Iran’s negotiating team responded in varying ways to Trump’s remarks; Ghalibaf scoffed at the idea that Iranians were so starving that they would use their frozen assets to buy food from the U.S. “Imagine having forty-something million of your own citizens on food stamps and calling another nation hungry. This is not a proclamation. This is a projection. Keep your SNAP advice,” he said.
On Tuesday, the situation deteriorated further as three tanker ships were struck by “unknown projectiles” as they attempted to navigate the southern route off the coast of Oman. No casualties were reported, but a fire broke out on board a Qatari ship, which some analysts speculated may have strayed into an area where Iranian teams were clearing mines. U.S. officials claimed Iranian missiles struck two more commercial ships that were reportedly attempting to cross the Strait having received guarantees from the U.S. Navy. Qatari officials summoned its Iranian ambassador as it condemned the attacks. The IRGC neither claimed nor denied responsibility, though Iranian media said the ship was “attacked after ignoring repeated warnings” against “unauthorized” passage.
Over the next two days, the U.S. responded by launching attacks on at least 140 targets across southern Iran. Officials said they targeted communications sites, surveillance infrastructure, and missile launch sites in a bid “to further degrade Iran’s ability to threaten freedom of navigation in the Strait of Hormuz”. Explosions were seen over Sirik, Qeshm and Kharg islands as well as the port cities of Bandar Abbas and Chabahar, as the Iranian Health Ministry claimed the attacks killed 14 people and injured 78 others.
In response, Iran launched missiles and drones at U.S. military sites in Kuwait, Bahrain Jordan and Qatar, hitting the Fifth Fleet headquarters once again as well as U.S. fuel storage tanks and communications sites. Iranian top negotiator Ghalibaf issued a warning on social media, saying: “America still hasn’t learned that bullying and breaking promises are no longer cost-free. Let me put it plainly: if you strike, you’ll get hit. Don’t flail around pointlessly, or you’ll sink even deeper: the strait of Hormuz will only open with ‘Iranian arrangements,’ not American threats.”On Wednesday, Trump assailed Iran during his address at the NATO summit. Speaking in Ankara, Trump declared the ceasefire “over” as he called the Iranian leadership “scum” and “sick people,” saying “I don’t want to deal with them anymore.” He also unleashed directed anger toward the NATO alliance itself, renewing threats against Greenland and calling to cut all ties with Spain, which has staunchly opposed the war, calling the nation a “wasted cause” led by “bad people.”
Foreign Minister Araghchi responded on X, saying “Iranians are known for their civility, culture, and strong moral values. We do not answer vulgarity with vulgarity, but with action: fearlessly and with great valor.” “Neither them nor our Brave Armed Forces are moved by any threats,” he said as he added, “Honour your signature.” Iran also lodged a formal complaint against the U.S., accusing them of violating Articles 1, 5, 10 and 13 of the MoU. Pakistani mediators, trying to salvage any chance to return to the negotiating table, called for renewed restraint from both sides, as the Pakistani Foreign Ministry issued a statement that “a renewed conflict is in no one’s interest.”
On Thursday, the final day of Khamenei’s funeral, explosions once again rocked southern Iran, striking a military zone in the city of Konarak. Earlier in the day, a projectile was reported as having struck in close proximity to Iran’s nuclear facility in Bushehr, and according to Iranian media, the U.S. struck a critically important railway bridge in northern Iran that links the region to Russia and China. This time, the U.S. denied responsibility for the attacks, with military officials saying it had not struck Iran recently; as of this writing, it is still a mystery as to who initiated the attacks, although analysts believe it is “certainly possible” Israel could be behind the attacks, or at least an actor that had been given a “green light” from the United States.Leaked Treasury report warns AI bubble, private credit crisis pose systemic risks to the economy, as Blackstone sheds data center deals and HSBC pulls back on lending. A draft U.S. Treasury report, leaked this week to NOTUS, appears to acknowledge for the first time that an AI bubble exists and outlines the grave risks it poses to the economy. The report, prepared by career Treasury analysts for the Trump Administration’s top economic policymakers, highlights key similarities to the 1999 dot-com crash while also noting that AI firms are more “deeply entrenched” in the U.S. economy than its dot-com predecessors due to the massive capital expenditures invested into infrastructure development. Thus, the bubble poses a “significant risk” of “sending shockwaves throughout the entire economic ecosystem” if “financial conditions change, productivity goals are missed or various choke points stymie growth.”
The report’s findings come in stark contrast to public statements from Trump as well as Treasury Secretary Scott Bessent, who in recent appearances compared the AI industry favorably to the dot-com boom and insisted that competition from China and government regulation are the greatest barriers to the booming industry which, according to official Trump Administration statements, is poised to become a “key driver of America’s Golden Age.” A Treasury spokesperson downplayed the report’s conclusions and warnings, saying that its findings are “unvetted” and “not representative of the department’s policies and views.”
Nevertheless, the report echoes similar findings published in recent weeks from international banking institutions and financial watchdogs, who have sounded warnings about the risks the AI industry’s debt load and possible overvaluations pose to global financial stability. Specifically, they highlight the risks posed by the AI boom’s increasing reliance on highly leveraged debt tied to the faltering private credit sector, which increased by nearly 20% to $40 billion in 2025.
Last month, the Financial Stability Board, which monitors financial authorities (including central banks in 24 countries), warned that the AI industry’s increasing reliance on “risky” loans from private credit firms have increased systemic vulnerability to “industry-specific shocks” that could lead to significant losses globally. Last week, the Bank of International Settlements, known as the “bank for central banks,” released its annual statement highlighting the “growing peril” of the AI industry’s deep integration with private credit’s subprime “shadow banks” to finance its data center buildout. It also identified and the risk of a global financial meltdown triggered by a decline in “AI exuberance” among investors, likening it not only to the dot-com crash but also to the British “railway mania” of the 1840s and the speculative boom of the 1920s immediately preceding the Great Depression.
This week, IMF Money and Capital Markets Director Tobias Adrian told the European Central Bank’s annual symposium that the institution’s real concern was the “mountain” of leveraged debt behind the AI industry’s growth, saying that “what is quite worrisome from a financial stability perspective is that the major tech firms are starting to leverage up themselves,” noting the “potential maturity mismatch in between the duration of the physical assets and the duration of the debt.” The concern around “maturity mismatch” refers to the industry’s spending on long-term assets such as chips and data centers that could lose value before firms’ debts are repaid due to unexpected circumstances affecting the tech sector, such as a war-driven energy shock or a downturn in speculative investment.
PIMCO, a leading U.S.-based investment management firm, also released a report to investors this week warning that AI’s massive reshaping of the tech industry could undermine the software stock-backed models underpinning billions of dollars in private credit and leveraged loan deals, eating away at the financial structures the AI industry itself has increasingly leaned on to support its growth. The Bank of England also released its financial stability report on Tuesday highlighting the risk of a major recession in the event of a price correction in AI-based stocks and other financial assets, to the tune of a 2.2% fall in the UK’s GDP growth.
This week, the long-stewing “shadow bank run” on the private credit sector rang alarms on Wall Street as second-quarter reporting from private credit firms revealed nearly $16 billion in investor withdrawal requests, of which only $5.6 billion was actually honored by private credit firms, which have throttled their payouts to investors in order to retain solvency and avoid the forced selling of fixed assets. New fundraising inflows to the industry also sunk to an 18-month low as billions in investor funds have become unwillingly trapped in private credit funds’ illiquid assets, locking up approximately $1.70 for every $1 that investors have gotten back from their investments.
While retail investors continue to run for the exits, the private credit industry has shifted to courting long-term institutional investors such as life insurance companies, 401(k)s, and public pension funds to prop up their flagging inflows, and are now openly touting the AI industry as the next frontier of growth for their direct lending services. Blue Owl, the private credit firm which has become a mascot for the crisis after being hit with withdrawal requests totaling nearly 40% of its technology-focused private credit profile and whose stock bottomed out this week at a 52-week low of just over $10.50 per share, launched a new venture this week aimed at supporting the AI data center building frenzy with large-scale network fiber connections.
Jean Boivin, head of BlackRock’s research department, told Bloomberg on Tuesday that private credit was poised to take on an even bigger role in financing the AI industry’s estimated $820 billion in infrastructure spending set for this year, saying that “there is no real alternative” to funding the “global transformation” promised by the industry, and that the world will just have to “leverage up.” AI hyperscalers hungry for capital to finance the $3 trillion AI data center buildout are turning debt markets inside out to find funding, including the century-old private bond market, where corporate debt issuance has hit a 10-year high of $81 billion this year to date due to an AI-fueled surge in borrowing.
Meanwhile, the actualization of returns on AI’s ambitious plans (and associated capital costs) appears to be on increasingly shaky ground. Blackstone’s QTS fund abandoned plans this week to build its portion of a massive 2,100-acre data center campus in Virginia, declaring the world’s largest data-center project officially dead amid protests from local residents and withdrawals from other stakeholders. Dean Baker notes that in the BLS’s latest jobs report, productivity growth related to AI appears to be “almost invisible,” while Alibaba’s Qwen, one of the world’s most widely used AI models, reported just $1.3 billion in AI-related revenue in the first quarter of 2026, less than 4% of Alibaba’s total income and a drop in the bucket compared with the company’s plans to spend $55 billion on AI infrastructure this year.
Oracle, which partnered with OpenAI last September to join the AI hyperscaling race, saw its stock plunge nearly 40% in June over concerns with its $160 billion debt overhang related to its AI infrastructure pivot; and the company itself expressed doubt as to its ability to turn enough of a profit to fulfill its debt obligations. Oracle’s debt-to-equity ratio currently stands at 415%, far higher than the current average of 80% for AI hyperscalers; though analysts are beginning to see Oracle’s troubles as a kind of canary in the coal mine for the industry as a whole. Also this week, Meta announced it would be de-emphasizing AI development and renting out its excess AI compute capacity after Mark Zuckerberg admitted last week that its AI agents are not progressing as quickly as he had hoped.
Underwriting has also become a thorny issue with private credit, as traditional banks, which provide private credit funds with “back-leverage” lines of credit to support their subprime business lending activities, have begun tightening their lending standards and pulling back their commitments to private credit in order to reduce potential exposure to a meltdown in the troubled sector and avoid a 2008-style spillover of financial contagion into the consumer bank space. This week, HSBC announced it would not be renewing certain lending facilities tied to private credit, as it copes with the $400 million fallout from the private credit fund MFS, which collapsed earlier this year amid mismanagement and fraud allegations.
Similar constraints have been implemented at Barclays, Deutsche Bank, and JP Morgan Chase over recent months. Chase’s markdown of private credit collateral in March also triggered a broad repricing wave in private credit due to investor fears of overvaluation and uncertainty around the often opaque methods private equity firms use to value their debt-based assets and securities.AI’s collision course with the climate crisis: Heatwaves and data center consumption put power grids under extreme strain. Massive heatwaves have affected Europe and the US in recent weeks. June’s heatwave led to more than 2,000 excess deaths across Spain and France. In the US, at least 40 people died of heat-related illness over the holiday weekend; 29 of these were in New Jersey, where health officials say most were found outdoors, in vehicles, or in homes without air conditioning. A Washington D.C. record July 4th high of 104°F impacted Trump’s “Salute to America” event, where emergency service personnel reported 96 patient contacts and 40 patient transports from the National Mall. Although the heat dome over the eastern US is now contracting, forecasts indicate that higher temperatures will persist across much of the southeast, and a new heat dome is expected to settle over the west coast in coming days.
The watchword for severe heat waves is the “wet bulb event,” a deadly weather occurrence where severe heat and humidity create conditions in which the human body can no longer cool itself through sweating. In such events, anyone without access to air conditioning is at risk of heat-related illness and death, even when resting in shaded areas. These extreme patterns are a direct result of global climate change caused by burning fossil fuels; a recent analysis from World Weather Attribution found that wet-bulb temperatures seen across eastern North America in recent weeks would have been functionally impossible prior to the Industrial Revolution. During a wet bulb event, access to air conditioning is necessary for survival; yet, despite warnings from climate scientists that these extreme heat waves are the “new normal,” Americans find themselves facing climbing utility prices and grids strained by data center demands.
The US’s largest power grid operator, PJM Interconnection LLC (which covers much of the eastern US, including New Jersey), was struggling due to growing data center energy use well before the heatwave began. PJM’s grid supplies power to an area that includes one-fifth of the country’s population; it also powers northern Virginia’s “Data Center Alley,” three counties which together are home to more than 300 data centers, with another 200 expected to go up in coming years. For over a decade, demand on electrical grids across the country had been stagnant, growing less than 1% per year. However, data center energy demand has tripled in the last decade, and overall energy demand in the US is now projected to grow five times faster over the next decade than the previous, with PJM projecting a net energy demand growth rate of 5.3% over the next ten years.
The strain of growing demand came to a head at the beginning of the month as Energy Secretary Chris Wright instructed grid operators in an emergency order to require data centers to use backup power supplies to ease grid load. PJM is exceptionally vulnerable to grid strain, as it has been slower to add energy storage batteries to accommodate usage surges than comparable grids in California and Texas. This emergency order represents a direct acknowledgement by federal officials and grid operators that there is a link between heat-wave reliability measures and data center demand, an acknowledgement tech companies themselves have effectively skirted.
MOVEMENT TRACKER
ICE killing of Lorenzo Salgado Araujo sparks renewed wave of protests as activists in Texas and around the country gear up to protect immigrant communities against new surge of ICE raids. Communities across the country are mobilizing to call attention to, and counter, the new, “quieter” wave of intensified ICE raids that have been sweeping the country over the last two weeks.
Last week in Texas, a group of Japanese internment camp survivors and their descendants, faith leaders, and immigration advocates completed a four-day, 45-mile pilgrimage on foot from the site of a Japanese internment camp to the Dilley ICE facility, the country’s largest immigrant family detention center. Joined by multiple human rights and immigrant advocacy groups, they demanded the closure of the facility, described by a Japanese internment survivor as an “inhumane and tragic repetition of American history.”
In the immediate wake of Tuesday’s fatal shooting of 52-year-old father and construction worker Lorenzo Salgado Araujo, hundreds of protestors took the streets of downtown Houston as others gathered on Canal Street at the site of the shooting to protest ICE and voice their outrage. On Wednesday evening, more than 1,500 people packed Canal Street for a mile-long procession to the spot where Araujo was killed, where they held a candlelight vigil, offered comfort to his family, and called for accountability and justice. A statement from the family, read aloud at the vigil, included “three wishes” that they asked from the community: a full independent investigation into their loved one’s killing; reform for “ambush-style” ICE tactics; and that the neighborhood take care of Maria, his widow and their children’s mother.
The Texas Civil Rights Project (TCRP) issued a statement echoing the family’s demand for an independent investigation and accountability for the use of force, noting that a March incident in South Padre Island, Texas where ICE had killed a U.S. citizen, Ruben Ray Martinez, during enforcement operations had gone practically unnoticed until TCRP discovered information about the incident from a public information request it had filed with the Department of Homeland Security. “Our neighborhoods are not battlegrounds,” said TCRP President Rochelle Garza. “TCRP will continue seeking justice and standing alongside all of our neighbors across Texas.”
In Chicago, community defense groups who mobilized almost daily to resist ICE raids last fall have re-activated their networks to resist the fresh wave of raids that they are beginning to see once again in their neighborhoods. “The infrastructure that was built, especially around mutual aid and rapid response networks, continues,” said Ellen Zhou, a community organizer with the Illinois Coalition for Immigrant and Refugee Rights, noting that “even though we don’t have national attention in the same way we had before, the volunteers and neighbors who stepped up in the fall continue to step up today.” On Thursday, community leaders gathered in Chicago’s Back of the Yards neighborhood to call for justice for those affected by last year’s Operation Midway Blitz and speak out about the renewed surge of raids being seen and felt today, emphasizing that the abductions and incursions in their neighborhoods “has never ended.”
The Conversationalist this week profiled the Whistle Crew, a new-international network of organizers and makerspaces originating in Chicago that have utilized 3D printing technology to produce over 1.5 million whistles to distribute to community defense groups throughout the country. The fast-growing network now reaches across the country and has partnered with Vancouver-based Protoplant, Inc., which is producing 3D filaments at scale to distribute to makerspaces and 3D printer owners to produce the whistles that have become an iconic weapon of the immigrant defense movement.
Activist groups have also utilized more high-profile events to keep attention on the ongoing issues with ICE and demand accountability and action. In the Old City district of Philadelphia, faith leaders and community groups held a vigil at the historic Christ Church on July 4th weekend to condemn the Trump Administration’s immigration crackdown as “one of the most heinous grievances of liberty [currently] in our nation.” Truthout’s Sonali Kolhatkar reports on Our Copa, a community-based soccer fan group that has organized around the World Cup to highlight the contradictions and atrocities of the Trump Administration. Our Copa encourages fans at their watch parties to support immigrant defense organizing in their own neighborhoods.
In Minnesota, activists are gearing up to defend the fifteen protestors currently being prosecuted with federal conspiracy charges for participating in the massive resistance movement against ICE that proliferated throughout the state in January. Two of the accused are telling their stories in an effort to humanize the resistance and counter Trump Administration accusation that “Antifa” is somehow pulling the strings behind grassroots resistance. “I've been a resident of Minnesota my whole life,” said Callum Robinet, one of the accused. “I know what the values of Minnesotans are. I know how much we care about one another and how much we want to stand up and love our neighbors. And I think people need to hear this story."Anti-Trump, anti-genocide demonstrations rock NATO summit in Turkiye despite protest ban. In the weeks leading up to the NATO summit in Ankara this week, Turkish president Recep Tayyip Erdoğan launched a massive crackdown on protest and dissent, arresting hundreds of people, blocking social media accounts, and denying accreditation to media outlets critical of the administration. Analysts say the crackdown was intended not only to tighten security for the summit itself, but also display a “show of strength” for Trump and European leaders as they met to discuss rearmament, military spending, and security matters amid the wars in Iran and Ukraine.
More than 200 people of varying political tendencies, including human rights advocates, academics, lawyers, leftists, LGBTQIA+ and environmental activists, journalists, and Islamic State supporters, were rounded up in overnight police raids more than a week before the summit began as Ankara imposed a 13-day ban on all public gatherings, press conferences, and hanging posters; and a cruise ship carrying LGBTQIA+ passengers, as well as Broadway star and gay icon Patti LuPone, was denied anchor in Turkiye on account of “national security.” Reporters without Borders, as well as journalists within Turkiye, decried the exclusion of opposition media outlets and journalists critical of the regime from covering the summit.
Standup comedian Deniz Göktaş was arrested and placed in pretrial detention last week after a video of his latest act, in which he referred to Erdoğan as a dictator and made jokes about suicide bombers, was released on YouTube. The video has now been viewed 9 million times and hundreds of people gathered last Friday outside the courthouse to demand his release despite the protest ban. Göktaş explained his jokes to the court, saying: “The word ‘dictator’ is a political term, a topic frequently discussed in public, and I have no intention of insulting or belittling anyone with this statement.”Despite the crackdown, regular demonstrations continued in the days leading up to the summit, including an anti-NATO protest march last Sunday during which over 100 members of the Communist Party of Turkey were arrested in clashes with police. Socialist and anti-war groups also gathered over the weekend for the Istanbul Anti-Imperialist Peace Summit, an alternative conference organized by the Workers’ Party, which denounced the ongoing genocide in Gaza as well as the commitments to increased defense spending by NATO member countries, compelled in part by Trump’s demands that Europe take on a greater share of military defense. Activists argued that “working people of Nato member states are left more vulnerable to exploitation and war” despite the increased focus on security, and that Europe’s “commitments” to greater rearmament spending "represents the channelling of workers’ wealth into the wars instigated by the US and Israel across the globe, and into the arms industry monopolies that arm them."
