Quagmire
Week of July 31-August 6, 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
Trump TACOs on major Iran strike as Pentagon warns ‘virtually all’ of U.S. long-range precision missiles have been used up; Hormuz deal between Iran and Oman nears completion; Sunni nations form defensive alliance. Trump’s threats last week of a major strike on Iran’s energy infrastructure once again came up empty as Trump backed down by Monday amid warnings from multiple U.S. military officials that munitions stockpiles are at critically low levels. As Trump and Rubio claimed a return to negotiations, Tehran is claiming that no talks with the United States are ongoing at the moment, though as of this writing Iran is on the ‘verge’ of reaching a deal with Oman to open the Strait of Hormuz under their joint administration for at least 60 days in accordance with Article 5 of the Islamabad Memorandum of Understanding.
Oil prices rose sharply on Friday, July 31 as Trump spoke to reporters at a cabinet meeting in Camp David, saying that the United States planned to hit Iran ‘very hard’ over the next several weeks. Reiterating earlier claims that Iran’s military capabilities were ‘decimated,’ Trump qualified his remarks in the face of recent Iranian attacks on U.S. bases in Kuwait and Bahrain, saying that he “doesn’t mean they don’t have any capabilities – they have some, but very little,” and that “at some point, they’re going to say we just can’t take it anymore.” When asked about chances of reviving the ceasefire given the recent escalation in attacks between the belligerent parties, Trump answered, “We just want to win.” Trump said that the attack could begin as soon as the weekend and last for a few days; U.S. media reported that the Pentagon had presented Trump with a plan for a major strike that could last as long as two weeks. News outlets reported that Washington and Israel were preparing to strike Iran’s energy infrastructure.
Meanwhile, the IRGC reported that they had stopped two tankers from transiting the Strait of Hormuz without permission on Friday while four others changed course, sending oil prices surging to over $92 per barrel. A senior Iranian official told Tasnim, Iran’s official news agency, that Iran had a ‘comprehensive’ plan to respond to potential U.S./Israeli strikes on infrastructure, saying Trump’s remarks on planned strikes were a form of ‘madness’ and that Iran was fully prepared to retaliate, including striking the “vital infrastructure of the Zionist regime and the energy infrastructure of the U.S. in the region.”
Iran later released a list of potential targets that would be struck in response to any new U.S. and Israeli strikes, including some of the world’s most important energy facilities such as: Saudi Arabia’s Ghawar oil field, which alone is responsible for 5% of the world’s oil supply, as well as the world’s largest stabilization plants that process 7 million plus barrels per day; UAE’s largest offshore oil field; Qatar’s largest gas fields, responsible for 20% of the global LNG trade; oil fields and refineries in Kuwait and Bahrain that process more than 2 million barrels per day; and Israel’s two largest gas fields, Leviathan and Tamar. Iran also struck two Amazon data centers in Bahrain and released a list of the Trump family’s golf courses and luxury hotels in the Gulf as potential targets.
On Saturday, Foreign Minister Araghchi held calls with Pakistan, Turkey, Saudi Arabia, and other Gulf countries, warning them of Iran’s resolve to carry out a ‘decisive response’ if the United States or Israel decided to follow through with Trump’s threat. The U.S. State Department issued travel warnings for the entire Middle East region, stating that “Americans in the region should consider departing or be prepared to depart” in the event of an escalation of the war. Trump maintained his belligerent posture on Truth Social, claiming that he was “destroying Iran’s currency” and posting a chart that showed ‘massive inflation’ inside Iran.
As the threat of a major escalation loomed, the Washington Post reported on Saturday that the head of the U.S. European Command (EUROCOM), General Alexus Grynkewich, had informed the Pentagon that his division lacked sufficient naval forces to continue protecting Israel from any potential attacks from Iran. Officials who spoke to the Post on condition of anonymity said that Grynkewich had sent written notification to the Pentagon of the severe constraints on EUROCOM’s military capabilities, and that without sufficient resources, he would be forced to choose defense of the U.S. homeland over Israel.
Also on Saturday, the New York Times reported that federal officials increasingly believed that Iran was likely behind a wave of cyberattacks on U.S. water systems in Minnesota, Michigan and at least five other states, targeting computer systems that monitor and adjust water quality and pressure at water treatment plants. Trump downplayed the speculations, instead accusing Minnesota’s Democratic governor, Tim Walz, of sabotaging his own state’s water systems. While no known public health impacts were reported, and officials lacked ‘definitive’ forensic proof that Iran was involved, it was enough for the U.S. Cybersecurity and Infrastructure Security Agency to issue advisories over the week prior and raised serious concerns that Iran’s retaliatory capabilities could reach far beyond the Persian Gulf region and deep into the United States should Trump carry through with his threat.
Late on Saturday, Trump climbed down from previous threats as his tone took a 180-degree turn. He announced on Truth Social that he had cancelled a planned large-scale attack on Iran, claiming that the “perimeters of a deal” have been agreed upon. Axios reported that Saudi Arabian Crown Prince Mohammed bin Salman had called Trump urging the president to cancel the strikes and return to the negotiating table. Trump said that negotiations were set to begin on Monday, August 3 on opening the Strait of Hormuz and Iran’s nuclear program.
Iran issued no statements confirming Trump’s claim, although Foreign Minister Araghchi said that negotiations between Oman and Iran on the future management of the Strait of Hormuz were in their “final stages.” Araghchi reportedly was having calls throughout the weekend with Pakistan, Egypt, Qatar, and Iraq, while the UK, Bulgaria, and Ukraine phoned Iranian officials to tell them they will not join the war, given Iran’s threats to target countries who actively assisted the United States and Israel in military aggressions.
On Monday, Trump said talks with Iran were ongoing, as this was the “last chance for them to sign a good document.” This time, his claims were directly contradicted by Foreign Ministry spokesman Esmail Baghaei, who said that no negotiations were currently ongoing with the United States, and that Iran was not planning to send or host delegations. He also said Iran was engaging directly with Oman and making progress to secure a temporary passage through the Strait of Hormuz, although such an agreement would not be sufficient to reopen the strait if U.S. ‘aggression’ continues. According to analyst Trita Parsi, Iran allowed only Oman to have an official role in negotiations, in accordance with their respective rights of sovereignty over territorial waters in the Strait of Hormuz.
Trump reportedly voiced his anger over Iran’s denial of talks with the United States and his frustration over the lack of options, setting a ‘deadline’ for the opening of the Strait as well as again threatening Iran to make a deal or surrender. At the same time, faced with mounting calls to end the war, he demanded that U.S. oil companies lower fuel prices in an attempt to curb the impact on Americans. Meanwhile, media reported that CENTCOM had sent an email to officers in the region in an attempt to ‘crowdsource’ strategic options on how to “pressure and punish” Iran. While Hegseth made a public statement saying the military remained ‘locked and loaded’ for a renewed offensive, analysts, including a former hostage from the 1980 Iran crisis, voiced their doubts as to the efficacy of any new military action to change Iran’s position in any way.
On Tuesday, Reuters broke the story that the U.S. Army had used up “virtually all” of its long-range surface-to-surface missiles in the war on Iran, specifically the latest generation of Precision Strike missiles as well as the shorter-range ATACM missiles, which were also needed by Ukraine to conduct ‘deep’ strikes within Russia. The sources warned that military officials were voicing deep concern that without these munitions – which cost over $1 million each – the United States would be left vulnerable in the event of military confrontations in other potential conflict zones, including Russia and potentially against China in the South China Sea.
The officials also confirmed reports that the U.S. military was running dangerously low on air defense interceptors, especially THAAD interceptors, which the Pentagon confirmed on Thursday had been depleted by as much as 80 percent. The Washington Post reported later in the week on a ‘showdown’ between Trump and Hegseth on the sidelines of the cabinet meeting at Camp David over the weekend, in which Trump complained to Hegseth that he had been told the “munitions issue was fixed,” with Hegseth subsequently passing the blame on to a deputy. Trump denied the media reports, saying the United States had “massive” amounts of munitions; at the same time, he said the “leakers” behind the “treasonous statements” made to the press were being “hunted down.”
On Wednesday, Iranian Deputy Foreign Minister Kazem Gharibabadi announced that an understanding with Oman on a shipping route through the Strait of Hormuz was “on the verge” of being finalized, with only “one or two” major issues remaining. The two countries were reportedly debating between two possible temporary options for a jointly administered route, with Oman bringing a GCC-backed proposal that would give Iran control over inbound traffic through its territorial waters, while Oman would oversee outbound traffic through the southern route in coordination with Iran. Iran’s proposal was reportedly for a single corridor that would pass through Iranian waters twice, with a stretch in the middle that would traverse Omani territorial waters.
There was also some dialogue over potential future fees for passage through the route, with Iran reportedly proposing a fee of up to 7% of declared cargo value, while Oman favored a lower rate of 3%. Gharibabadi said that while an understanding with Oman was being reached, such an agreement would not “immediately” reopen the Strait, at least until the U.S. ‘breach of promises’ in regards to the MoU were resolved. Reports also surfaced that Iran was considering banning U.S. and Israeli ships from the Strait of Hormuz completely.
Trump reiterated his claims that Washington was having “good discussions” with Iran, while again threatening to hit Tehran “very hard” if talks fail. Iranian chief negotiator Ghalibaf mocked him on social media, saying on X that Trump’s threats were “theater diplomacy on a loop” and that “using bullying + broken promises + fake news as leverage” was a “failed strategy,” calling on Trump to “acknowledge the facts and fulfill your commitments.” Iranian MP Esmail Kowsari commented to Iranian broadcaster IRIB that Trump’s approach to negotiations was “contradictory and unreliable,” citing that Trump had spoken of “Iran’s defeat” 106 times and claimed that a deal with Iran was “imminent” 88 times. Another official was quoted by Iranian state media in saying that “as long as U.S. interference and threats of military attack against Iran exist, the agreement will be delayed” and “Iran will not make any agreement under the shadow of threats.”
Meanwhile, Yemen’s Houthis escalated their blockade of the Bab el-Mandeb Strait, targeting at least eight Saudi tankers and pushing oil prices up, while allowing two Pakistan-flagged tankers to cross without incident. Traffic across both straits slowed to a trickle as shipping groups voiced concerns to the UN over the potential imposition of fees in the Strait, as it became increasingly clear that Iran would retain control over the waterway into the foreseeable future even after the Strait was reopened.
On Friday, August 7, as negotiations between Iran and Oman continued, Saudi Arabia, Turkiye and Pakistan announced that the Sunni-dominant nations had signed the Mecca Joint Defense Agreement, a mutual defense pact that MBS likened to a Middle Eastern version of NATO’s Article 5, which committed each country to treat an attack on one as an attack on all.
The immediate impetus for the agreement was said to be attacks by Iran on U.S. military targets within Gulf states’ territories, including inside Saudi Arabia; although a number of analysts observed that the newly forged alliance may also be intended as insurance against further aggression from Israel, which had already begun directing its gaze and belligerent rhetoric towards Turkiye, signaling its intentions for a future theater of war. The three countries, along with a host of other Muslim nations, had condemned Israel earlier in the week for its intensified assault on Gaza, as well as for a wave of settler mob violence against Palestinians in a number of villages in the West Bank over the last several weeks.
Turkish Foreign Minister Hakan Fidan said Saturday that Iran was not the target of the defense pact, and that no one was a target “as long as they don’t attack one of the pact members.” Other Gulf countries welcomed the creation of the strategic partnership, which analysts said was an indication that traditional U.S. allies were ‘looking elsewhere’ toward regional partnerships given that the United States is “losing credibility” as a security partner. Iran and Palestine also hailed the pact as a step toward collective regional security; Araghchi made a post on X calling on Muslim nations to band together against “every challenge by malicious outsiders,” saying that it was “time to rely only on ourselves and embrace true brotherhood.” Aliakbar Velayti, spokesman for Mojtaba Khamenei, opined that “increased cooperation” among the countries of the region can “ensure the region’s security,” and that the “defeat of America” had reinforced the belief that “foreign forces – the main cause of insecurity – must leave the region.”
On Saturday, August 8, Iran’s Supreme National Security Council secretary, Mohammad Bagher Zolghadr, issued a statement on behalf of the Iranian government, saying that the United States must “correct its behaviour” and that the Strait of Hormuz would remain closed until the U.S. met a number of demands, including some that went beyond those in the Islamabad Memorandum of Understanding. The six conditions he outlined included: lifting the U.S. naval blockade as well as all sanctions on Iran; paying war reparations and releasing frozen Iranian assets; withdrawing the U.S. military from all positions surrounding Iran, including abandoning its 19 bases in the Gulf region, many of which have been destroyed by Iranian strikes; and ending attacks on Iran’s allies as well as ceasing to make any more threats against Iran and the ‘axis of resistance.’
IRGC spokesman Hossein Mohebbi told the Tasnim news agency that the reopening of the Strait would depend “on the United States fully accepting Iran’s conditions.” Araghchi echoed the other officials’ statements, also telling Tasnim that although Iran and Oman were “very close” to an agreement, the reopening would be contingent on other conditions, including the U.S. “compensating for its violations of the Islamabad Memorandum.” Iranian army spokesman Amir Akraminia said Iran’s new order in the Strait of Hormuz is “irreversible,” and the United States has “no choice but to accept the existing situation; otherwise, it will incur costs far greater than those it has faced in the past.”
JD Vance also spoke to the U.S. media Saturday, saying that Iran had told the United States that it had “no plans” to impose tolls on the Strait, and that the U.S. was “seeking a commitment from the Iranians that they’re not going to fire at commercial vessels.” While Vance hinted that the U.S. would “keep applying pressure” on Iran to make concessions, analysts noted that even Joint Chiefs chairman Gen. Dan Caine has warned Trump that without adequate missiles, the U.S. lacked the capacity to back up his threats, and that Iran could be expected to hold firm on its demands until Trump has “internalized” the fact that he has no military options left. The Omani foreign ministry said that negotiations with Iran were “proceeding in a positive and constructive atmosphere” and urged everyone to avoid “any actions that could affect these negotiations and the progress that has been achieved, which is to the benefit of all parties.”
U.S. Treasury undertakes ‘unprecedented’ bailout of Japanese yen in an attempt to rescue collapsing bond markets, exposing extreme fragility in the U.S. economy and the dollar’s reserve currency status amid historically high debt levels. Last Friday, July 31 at a Trump Administration press conference at Camp David, a Reuters photographer happened to capture a handwritten note that U.S. Treasury Secretary Scott Bessent left on the table. The note, placed prominently under Bessent’s nameplate, appeared to show a ‘to-do’ list with only one item: “Buy Japanese Yen (JPY), $5-10 billion.” Hours later, Bessent announced a historic joint intervention to bail out the collapsing Japanese currency, which has been sliding for months and last week fell to a 40-year low of ¥167 against the dollar, its lowest point since 1986 and surpassing even the nadir of the Asian financial crisis of 1997-1998. It was the first time the U.S. Treasury had directly intervened in the Japanese currency market since the Fukushima disaster of 2011.
Finance analysts noted that with the apparent intentional leak, Bessent – a former hedge fund manager for George Soros who had gained notoriety for shorting the yen to make $1 billion in windfall profits during the Asian financial crisis – was resorting to his trader’s playbook to make the unprecedented move. Ironically, as Bessent was now in a position to save the yen rather than make a profit from its collapse, the signal he intended to send to markets regarding stabilizing the yen to potentially stave off a global financial crisis had the opposite effect: undermining investors’ confidence in the ability of markets not only to keep the yen afloat, but also in the safety of the U.S. dollar amid soaring debt and the increasingly volatile U.S. bond market.
The critical significance of the yen in global markets, and its unique potential to trigger a global crisis, has its roots in the yen carry trade, which underpins nearly all forms of investor leverage in global stock and bond markets. With the Bank of Japan keeping interest rates at or near zero for nearly three decades, investors were able to borrow yen at very little cost and convert the currency into U.S. Treasuries or other currency bonds with higher yields, pocketing the difference as profit to reinvest in private stocks. As long as the yield gap between the yen and the dollar remained competitively wide, and growth in the Japanese real economy justified its debt issuance, investors could borrow yen at highly profitable margins. In recent months, however, underlying weaknesses in the Japanese real economy, exacerbated by the oil shock precipitated by the Iran war, has forced the Bank of Japan to steadily raise rates over the last few years, causing a feedback loop where reduced demand for yen has sent yields surging, closing the gap between the yen and the dollar and further reducing demand for yen, threatening to ‘unwind’ the carry trade and trigger margin calls on leveraged investor debt.
With the yen at historic lows, the Bank of Japan has been making strong interventions to shore up the value of the currency by selling their foreign exchange reserves, such as U.S. Treasuries, to buy back yen at unprecedented rates. As the largest holder of U.S. Treasuries in the world, the Bank of Japan’s forced selling of its Treasury reserves has had the effect of flooding the open market with U.S. bonds, where inflation concerns and weak foreign exchange demand has been pushing long-term yields higher and higher, making the cost of borrowing everything in the United States – from mortgages and auto loans for everyday Americans to AI data centers and the ballooning U.S. wartime military budget – more and more expensive.
The military spending demands of the Iran quagmire has sent U.S. debt skyrocketing at record rates; the CBO reports that the national debt has grown by $155 billion per month in fiscal year 2026 to date, and financial analysts estimate that government debt will top a record $40 trillion as early as October, with interest payments set to run even higher than military spending by the end of the year.
So while Bessent and Trump framed the yen rescue as an altruistic act, with Trump calling the bailout a “token of friendship” and saying “we’ll always be there for Japan,” analysts asserted that the real story behind the yen bailout was to save the crumbling U.S. bond market. Since the start of the Iran war, central banks have been liquidating Treasury reserves to buy oil at elevated prices or defend their own dollar-denominated currencies, and are replacing it with gold instead of buying more U.S. debt amid skepticism that the sputtering U.S. real economy will ever achieve enough growth to pay back its ballooning debt at elevated long-term interest rates. This thesis was further borne out as more details of the yen bailout emerged, which reinforced financial markets’ impression that Bessent’s maverick intervention was more of a desperate ‘Hail Mary’ than an act of central bank charity.
The two most telling details were the unprecedented move by Bessent to sell the Treasury’s Euro reserves instead of spending dollars to raise the required funds, and the subsequent pressure he put on Federal Reserve chair Kevin Warsh to expand borrowing limits on an obscure lending program called the Foreign and International Monetary Authorities (FIMA) Repo Facility, created as a stimulus mechanism during the COVID pandemic, that basically prints dollars that central banks can borrow using their current Treasury holdings as collateral, giving the Bank of Japan an alternative to selling Treasuries and pushing long-term yields even higher.
On the other hand, if the FIMA facility is expanded as Bessent wants and the Fed issues more liquidity to bail out the Bank of Japan, it will have the effect of weakening the dollar against Japanese imports, accelerating inflation inside the United States as the cost of imported goods goes even higher for everyday U.S. consumers who have been struggling to afford the skyrocketing costs of living. This would further weaken the real economy and make U.S. Treasuries appear even less attractive as an investment, causing the U.S. government to spend more on debt service and impose further austerity on working people through cuts to social services and ever-increasing interest rates for household borrowing.
Bessent’s intervention only stabilized the Japanese currency for about 12 hours, boosting the yen to about ¥157 to the dollar before falling back to above ¥160 after trading closed; but the effect of the signals Bessent sent to international markets, and the European Central Bank in particular, may prove more lasting at a time when the Iran war has called the hegemony of the U.S. dollar as the world’s reserve currency into question. Bessent’s decision to dump over $10 billion in Euro reserves in a single overnight trade without notifying the ECB broke with international norms of central bank coordination that had been in place since Bretton Woods; HSBC called it a “highly unusual and unprecedented move,” while Fortune was more blunt in calling it “weird and unwise.”
It also comes one week after the ECB announced that its own €57 billion Eurosystem Repo Facility (EUREP), backed by five European central banks (Germany, France, Spain, Italy and the Netherlands), will go live in Q4 2026, signaling the ECB’s intention to position the Euro as an alternate reserve currency as sustained volatility in the U.S. bond market threatens the long-held status of U.S. Treasury bonds as a safe haven for investment.
In the Financial Times, economist Barry Eichengreen notes that Bessent’s use of the euro as a means of preventing the BOJ’s forced selling of dollar reserves has exposed the dollar’s weakening status as the global reserve currency, especially as other central banks have begun to build the infrastructure for their local currencies to serve certain reserve-type functions, such as China’s recent gold buying spree as a means to back the internationalization of the yuan. Euro-denominated bond issuance has increased 30% since 2024, its highest rate since the currency’s inception, and foreign inflows into the Euro outpaced those into the U.S. dollar in 2025 and 2026, having made the Euro a de facto safe haven for global capital even before the ECB debuts its new facility, which will most likely grease the wheels of de-dollarization and capital flight from the United States.
U.S. labor market goes negative as hiring stalls, interest rates pressure business balance sheets and housing costs; personal bankruptcies on the rise as inflation and debt crush working-class households. The Bureau of Labor Statistics released its July jobs report on Friday, August 7, indicating a net loss of 23,000 jobs in July, missing by far economists’ optimistic expectations that jobs would grow by up to 90,000. In addition, data for the previous two months were revised downward by a net 103,000 jobs, raising concerns that the labor market has long been weaker than was previously thought. The labor force participation rate fell to 61.4%, which excluding the pandemic was the lowest since the 1970s. Although unemployment fell to 4.1% from 4.2% in June, the labor force data suggests that the drop was due to more than 260,000 people giving up on looking for work entirely.
Analysts surmise that renewed tariff costs, as well as higher materials and energy costs driven by the Iran war were at least partly responsible for the drop in hiring. Others cited the seasonal loss from education, and the Trump Administration attributed some of the drop, especially in hospitality, to the conclusion of the World Cup in July. Some noted that the manufacturing sector was barely ‘treading water’, slowing to just 5,000 jobs per month on average, while mining and local government also saw large job losses. Healthcare and social assistance grew slower than average and, more concerning, made up more than 90% of the total jobs added, adding to the overall picture of a struggling domestic economy.
The National Women’s Law Center noted that women accounted for 100 percent of the decline in the labor force in July, as a total of 165,000 women aged 20 and over left the labor force last month, bringing the total net number of women dropping out of the labor force to a staggering 845,000 since January, compared to 406,000 fewer men in the labor force over the same time period. The job search website Glassdoor noted that its worker confidence index slumped in July to record lows, as workers are increasingly “anxious about their job security,” while unemployed workers “feel frozen out of the job market.”
Wage growth continued to slow month-over month, growing by 3.2% in July, its slowest pace since May 2021 and well below the June inflation rate. Although consumer spending and consumer confidence ticked up slightly, household savings dipped to a four-year low of just 2.7%, suggesting that families were drawing down savings to cover purchases or pay down debt. Some economists noted that the decline in the immigrant workforce, due to Trump’s mass deportation push, also contributed to the weak job market, as since the pandemic immigrants had been largely compensating for the decline in the labor force as Boomers aged out of the workforce.
The Trump Administration attempted to put a positive spin on what even Fox Business pundits called “disappointing” numbers; National Economic Council director Kevin Hassett blamed the poor performance on winter weather, which he claimed pushed seasonal teacher layoffs into July, as he argued on Fox News that the economy actually ‘added’ jobs “if you throw out the World Cup and government workers” (i.e. the sectors that lost hundreds of thousands of jobs in the last two months). Some investors spun the weakening jobs numbers as a boon for the AI industry, as they claimed it enabled employers to increase productivity without adding workers.
Ironically, stock markets rallied at the news, on investor expectations that the Federal Reserve would hold off on interest rate hikes in September; although analysts have noted that surging bond yields have raised interest and mortgage rates independently of any Fed action. The housing market, like the larger economy, has gone “K-shaped,” with luxury home sales rising while starter home sales have stalled. Higher mortgage rates contributed to a significant slowdown in the housing market, especially for struggling first-time homebuyers, even as prices fell in 38 of the 50 largest U.S. cities due to falling effective demand. A recent report from Redfin notes that American households now need to earn nearly $110,000 per year to afford the average home, well above the median household income of $83,730.
This week, shares of the country’s largest mortgage lender, United Wholesale Mortgage (UWM), plummeted 35% on Thursday after the company suspended its dividend and was bailed out by a $2 billion equity investment from the Ishbia family, which also owns the Phoenix Suns. While UWM claimed the emergency stopgap was due to a failed hedge acquisition resulting in a $451 million loss in the second quarter, UWM’s position has been steadily weakening over the last three months, losing a total of 82% of its share value over the first eight months of 2026 due to “one of the toughest operating environments in years,” as mortgage lenders grapple with elevated interest rates, a slowdown in home purchasing and reduced refinancing activity as prospective homebuyers balk at the lack of affordable options. New homes are now sitting on the market for an average of more than nine months, hitting overheated markets in the Sunbelt especially hard as climate concerns are also making younger families and homebuyers bail on places like Florida and Texas. The ‘flat housing market’ has forced Zillow to lay off 500 employees this quarter, the second round of layoffs undertaken by the company this year.
Personal bankruptcies have also risen sharply, according to a report from the Administrative Office of the U.S. Courts; non-business bankruptcies rose 12% over a 12-month period ending on June 30, 2026, and almost a 50% jump compared with three years ago. Higher prices and debt pressures have left more people than ever in the United States “at a point where their debt pressures have surpassed any potential stigma associated with bankruptcy.” A record number of consumers also entered debt-counseling programs this year, with an average balance of about $40,000, according to a report from debt-management nonprofit Money Management International. Data from the Federal Reserve Bank of New York also indicates that household debt nationwide has reached a total of $18.8 trillion, the highest level on record.
The deterioration of conditions for working Americans is also flashing warning signs for Trump and the GOP ahead of the midterm elections. An AP-NORC poll conducted at the end of July found that only 32% of adults approved of Trump’s handling of the economy, and for the first time in a decade, voters preferred Democrats over Republicans on stewardship of the U.S. economy by a slim margin, 37 to 36 percent.
Voting rights: After 22 court losses in push for voter rolls, Trump asks Supreme Court to weigh in on mail-in voting; Senate skips out on SAVE Act; Dems game election disruption scenarios. As Republicans brace for an expected thrashing at the polls this November, Trump continued to sow doubt on the integrity of the nation’s election systems as he pursued several avenues to undermine states’ authority and curb voting rights ahead of the midterm elections.
On Monday, August 3, Trump’s Justice Department filed an emergency request with the Supreme Court to lift an injunction upheld by an appellate court on July 25 blocking Trump’s executive order issued in March requiring states to share their voter rolls with the federal government and directing the USPS to issue a rule to refuse mail-in ballots to people who do not meet the Administration’s narrow requirements. The DOJ requested that the high court make a decision by mid-August in order for the rules to be implemented in time for the midterm elections, which are less than 90 days away.
The appeal was made regarding an injunction on the order imposed by U.S. District Judge Indira Talwani in June in response to a challenge filed in Massachusetts by 23 Democratic states and the District of Columbia. Several GOP-controlled states joined the DOJ’s appeal to the Supreme Court. Later on Monday, Supreme Court Justice Ketanji Jackson Brown declined the Administration’s request without issuing a formal ruling, ordering the plaintiffs instead to submit a response to the Administration’s emergency appeal within seven days.
On Tuesday, Attorneys General from the 22 Democratic-led states and the District of Columbia were joined by dozens of election officials and more than 50 former state and federal judges in urging the Supreme Court to reject Trump’s appeal and block the Administration’s threats to curb mail-in voting, arguing that it could illegally interfere with the nation’s elections and create “chaos” for voters in the midterm elections. The inclusion of the word “chaos” was a deliberate appeal to a particular judicial doctrine often cited in election law cases called the “Purcell principle.” The doctrine was adopted after a 2006 case in which the Supreme Court vacated a lower-court order that would have changed Arizona’s voter-ID requirements just weeks before that state’s election, on the grounds that last-minute changes to election procedures less than 90 days before an election is scheduled to take place risk “voter confusion and administrative chaos.”
On July 17, a three-judge panel ruling on a separate case filed in the D.C. Court of Appeals allowed the Trump Administration to move forward with the USPS rulemaking part of the order, on the grounds that the Democratic challenge to the order was premature given that the rule had not yet been drafted or implemented. The contradictory set of rulings, as it currently stands, means that the Trump Administration cannot implement its order in the 22 states represented by the plaintiffs and the District of Columbia, while non-plaintiff states may comply with the order.
Democratic-led states have been fighting the Trump Administration’s demands to hand over state voter rolls to the federal government, which aims to create a national voter database against which federal agencies like the USPS may check and possibly disqualify voters. As of this writing, the Trump Administration has been handed 22 straight losses in its bid to force states to hand over their voter rolls, as suit after suit has been rejected by federal judges.
Trump also suffered a setback this week in his legislative push to pass the SAVE America Act, a bill that aims to impose strict ID requirements in order to vote. The bill has come under heavy criticism due to several issues, including wording that could disqualify voters whose name differs from that which appears on their birth certificate, opening the possibility of disenfranchising millions of married women and trans people. After a grueling overnight session, Republican lawmakers conceded that they did not have the votes to pass the bill, opting instead to undertake a performative procedural vote that they knew would not pass before breaking for summer recess at 4:36 AM on Saturday, August 8.
Trump has been trying to bully the legislation through even though Majority Leader John Thune has been warning for months that “math” and “reality” was not aligning with Trump’s increasingly aggressive demands that the Senate find a way to pass the legislation. On Friday, Trump declined to back Thune’s bid for a second term as Republican leader in the Senate, citing his failure to push through the SAVE America Act. Thune has also drawn Trump’s ire for pushing back on Trump’s repeated claims of fraud in the 2020 election.
Despite the legal and legislative setbacks, Trump has continued to poison the well of voter confidence in elections by spreading several rumors, from suggesting that China hacked the 2020 election to saying without evidence that more than 250,000 noncitizens voted in various states in 2024, a claim refuted by election officials in all of those states. He even suggested this week that Republican Senate nominee Mike Rogers was “rigged” out of being elected to the Senate in 2024, on the exact same ballot by which Trump won the state in the presidential election.
He also questioned the validity of Tuesday’s primary election in Michigan that saw progressive candidate Abdul El-Sayed win the Democratic nomination for Senate, writing on Truth Social that Wayne County, which El-Sayed won, was “one of the most corrupt voting areas in the country.” On Tuesday, the DOJ announced it would be sending “poll watchers” to monitor voting sites in Detroit, Lansing, East Lansing, and Hamtramck, four heavily Democratic districts, to “ensure transparency, ballot security, and compliance with federal law,” sparking fears of federal government interference in the administration of the midterm elections.
Also this week, news outlets reported on a gathering of senior Senate Democrats and election law experts that took place last month to ‘wargame’ possible scenarios in which the Trump Administration could disrupt November’s elections. Republicans are expected to suffer heavy losses in November due to widespread voter dissatisfaction with the Trump Administration’s handling of the economy as well as the war on Iran.
MOVEMENT TRACKER
Progressive insurgency within the Democratic Party gains steam as El-Sayed, DSA members win primaries in Michigan; James Carville crashes out. The progressive/democratic socialist insurgency within the Democratic party added to their winning streak this week, notching several victories in primary races in Michigan and Tennessee. The most watched of these races was the hotly contested primary between progressive Abdul El-Sayed and AIPAC-backed candidate Haley Stevens. The race remained too close to call late into the night Tuesday, with El-Sayed declared the winner early Wednesday morning, nosing past Stevens by a razor-thin 1% margin. Progressives hailed El-Sayed’s nomination as a victory for grassroots democracy, having overcome over $70 million of AIPAC-backed dark money that had been poured into Stevens’ campaign in the weeks before the election.
Unlike the other progressive Democratic victors in Michigan, Dr. Abdul El-Sayed is adamant that he is not a socialist. A former public health official, Colombia- and Oxford-educated epidemiologist, Michigan native, practicing Muslim, and child of Egyptian immigrants, 41-year-old El-Sayed has said on many occasions that he sees himself as a “capitalist who understands how capitalism works.” His first foray into electoral politics came in the 2018 Michigan gubernatorial race, where he garnered endorsements from Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez but eventually lost the Democratic primary to now-Governor Gretchen Whitmer by a more than 20 point margin.
El-Sayed’s return to politics, challenging and narrowly defeating the party establishment’s favored candidate Rep. Haley Stevens in Michigan’s 2026 Senate Democratic primary, has come on an unabashedly progressive anti-establishment platform, albeit maintaining a friendly distance from the “democratic socialist” label. His campaign website advertises three “common sense” priorities: “get money out of politics, put money in your pocket, and pass Medicare for All.” On the campaign trail he remained cozy with socialists, making appearances with controversial leftist Twitch streamer Hasan Piker.
Much of his campaign messaging focused on opponent Haley Stevens’s campaign’s reported $70 million in funding from AIPAC, with a rallying cry of “the power of our many is greater than the power of their money,” repeated in El-Sayed’s victory speech. The influential Israeli-backed lobbying organization is increasingly being seen by the Democratic voting base as toxic to candidates they see as prioritizing the foreign government’s genocidal agenda in Gaza over the needs of domestic constituencies. Almost immediately after El-Sayed’s win, AIPAC announced that they would be backing his Republican opponent, Mike Rogers, in the general election, leading many Democratic voters to question AIPAC’s political integrity in their eagerness to embrace a Trump-backed candidate over the Democratic challenger. El-Sayed, if elected in November, would be the first Muslim to serve in the United States Senate.
Also in Michigan, the state’s seventh congressional district saw a pitched battle between three Democratic primary candidates, with 36-year-old Working Families Party member and Sunrise Movement co-founder William Lawrence winning out over two more moderate opponents, former U.S. Ambassador to Ukraine Bridget Brink and former U.S. Navy SEAL Matt Maasdam. Lawrence’s campaign focused on data center moratoria, taxes on billionaires, universal health care, and an end to arms sales to Israel.
Lawrence was a member of the Democratic Socialists of America (DSA) until July of 2026, but allowed his membership to lapse in the month prior to his August 4th victory to “clarify” to the party and voters that his campaign platform was based on local constituent concerns rather than the directives of the national organization. The centrist Democratic Party establishment has been increasingly vocal in weaponizing Red Scare tactics against democratic socialist challengers, repeating old refrains that leftist candidates are “unelectable” or hold “deeply unpopular” policy positions, despite progressive causes like Medicare for All and taxing the rich being consistently backed by vast majorities of voters across all parties in opinion polls.
In Michigan’s 13th Congressional District, state representative and active DSA member Donavan McKinney also won his primary, edging past incumbent Shri Thanedar to secure the nomination for the U.S. House of Representatives seat. McKinney’s progressive platform included pushes for Medicare for All, investment in clean energy and housing, and restricting military aid to Israel. Thanedar initially ran on a similar progressive platform but broke with DSA as he rebranded his platform more around supporting Israel; McKinney’s narrow victory could also be seen as a reflection of the broad rejection of Israeli interests that has grown amongst the Democratic rank and file, especially among young voters, since the October 7 war on Gaza began.
In the wake of these victories, moderate Democrats, including Kamala Harris, have rallied around candidates like El-Sayed in the interests of party unity against MAGA in the midterms; however, certain establishment figures, including 81-year-old former Clinton strategist James Carville, have decried the incursion of progressives that he sees as pushing the party too far left. In a media rant given shortly after El-Sayed’s win, Carville railed against the influence of young leftists such as Hasan Piker, and pledged to leave the party if people like Piker gained more influence, calling progressives unelectable before saying, “I have one simple philosophy about politics: Winning is everything, stupid.”
Piker responded to Carville’s comments by pointing out his backing of “winning” neoliberal Democratic candidates like Hillary Clinton and Kamala Harris, both of whom lost to Trump; and said Carville’s exit from the party would just “sweeten the deal.” Sen. Elizabeth Warren says she only pays attention to “almost one out of ten” opinions from Carville anyway, and Sen. Bernie Sanders responded by telling Carville to start his own party if he didn’t like the rising influence of socialist ideas. The “far left” platform demonized by figures like Carville is backed by a majority of younger voters who have grown tired of the Democratic establishment’s inaction on issues such as the Gaza genocide, climate change, jobs, healthcare, and affordability.
U.S. Navy servicemembers, families revolt against Hegseth’s DOD over living conditions on USS Abraham Lincoln. Secretary of War Pete Hegseth and Acting Secretary of the Navy Hung Cao faced a revolt this week as angry families of U.S. servicemembers aboard the USS Abraham Lincoln confronted the leaders at a ‘fiery’ meeting at San Diego’s Naval Station North Island over conditions onboard the ship and the lack of a clear date for its crew to return home. Last month, the USS Abraham Lincoln broke the record for longest deployment at sea, as deteriorating conditions onboard have sapped the morale and mental health of Navy officers and crew.
In April, servicemembers’ families shared photos of the scant rations being distributed to the crew at mealtimes as reports of food shortages emerged. Ships deployed to the Gulf region are generally resupplied through the Fifth Fleet headquarters in Bahrain, which was destroyed by Iranian strikes last month.
Recently, more photos emerged from inside the carrier as servicemembers reported dealing with issues such as moldy toilets, broken showers, and the lack of basic necessities like soap, deodorant, and toothpaste. Grueling shifts and the constant threat of attacks from Iran have left sailors exhausted and in despair. The destruction of U.S. bases in the Gulf has also disrupted mail service to the ships, with many care packages sent to servicemembers by their families having either been lost or rerouted/delayed for months.
At times during the contentious meeting between Hegseth, Cao and military families, spouses of servicemembers broke down in tears as they asked leaders what was being done to relieve sailors’ mental health and exhaustion. One parent said her daughter feels like she is never going to come home and believes she is going to die on the ship. Another family member said she had heard the ship’s doctor say that the ship needs to hit port soon or people are going to “start… losing their minds.” Another Navy parent, Brett Snow, a Navy veteran himself, warned that the relentless pace of military service onboard the carrier would create an environment that would be “ripe for accidents” as exhaustion and poor morale set in.
Other family members reported a deep sense of guilt among servicemembers as reports of civilian casualties in Iran trickled in, with one spouse of a servicemember saying at the meeting that she found it difficult to be proud of her husband when she believed the military was “killing innocent civilians.” She reported her husband felt the same way, expressing guilt about what he was doing out there, as her comments were met with applause from other military family members in the audience.
Another parent of a sailor blamed Trump for the bad situation her son was experiencing on board the Lincoln, saying “He [Trump] put our nose in a war that we shouldn’t be in.” Other military family members agreed, saying military families were “sacrificing for something that none of us want to be a part of.”
The Navy announced this week that the USS Teddy Roosevelt was on its way to the Persian Gulf to relieve the USS Abraham Lincoln, while saying the Lincoln “remains fully capable of meeting all mission tasking.”
Creative acts of Flock camera vandalism spread across the United States as communities defend, celebrate anti-surveillance “heroes.” Resistance to the nationwide network of Flock surveillance cameras has not only brought people together across the political spectrum, it has quietly grown into a full-scale revolt as a wave of vigilante vandalism has spread across the country. Reports are pouring in of the license plate reader cameras mysteriously going missing, being broken or even run over with trucks as these “heroes without capes” are being cheered on by their local communities.
Taking down Flock cameras has become a viral trend as anti-surveillance vigilantes have taken the act of disabling Flock cameras to surprisingly creative extremes. Some have left calling cards, like one Franklin County man who cut down cameras and replaced them with American flags. In Oakland, “paint-bombing” Flock cameras has become a highly popular trend, while in San Francisco, a masked person climbed a streetlight pole in broad daylight in the middle of Market Street to cut one down as passing bystanders cheered. Elsewhere in California, one man drove over 150 miles just to back his truck over a Flock camera.
“Cheese-slapping” Flock cameras has also gone viral as activists have adopted the simple method of throwing cheese slices onto the cameras’ solar panels to prevent the devices from charging. One TikTok influencer named Plonk has been warning viewers that they should absolutely not acquire green lasers of a certain wattage that appears capable of damaging the AI-enabled cameras’ sensor array. One Florida man, 77-year-old Carl Gunn, simply set up a lawn chair with a 10-foot pole and cardboard panel with a protest sign attached to block the camera’s line of sight, and sits all day in a silent protest vigil.
In the Reddit community r/FlockSurveillance, online activists have made memes encouraging copper thieves in their local community to harvest from Flock cameras in their neighborhoods. They also celebrate the most creative acts of resistance, from cameras being covered with fake cease-and-desist letters from Flock, or vandals leaving colorful notes like: “hahaha get wrecked you surveilling f**ks!”
Police departments tasked with investigating the incidents have appealed to the local community to help identify suspects, only to be flooded with comments giving hundreds of creative alibis to exonerate any future possible defendant: “Whoever it was, he was fishing with me,” “the wind did it,” “the camera cut itself down,” or one popular explanation, “it was the Hamburglar.”
In Winona, Minnesota, police reported all eight Flock cameras in the city had been taken down in a single night; the department had to shut down comments on its Facebook post featuring its press release on the incident after an outpouring of comments mocking the police for having to physically do their jobs again, and questions asking if it counted as aiding and abetting if they bought the culprit a drink. In North Carolina, police asked for tips on identifying two men caught on camera cutting down a Flock device, only to have their tip line overwhelmed with gleeful phone calls attributing the crime to “Batman and Robin.” Other comments on police reports have identified vandalism suspects as Bibi Netanyahu and FIFA president Gianni Infantino, among other notorious figures.
Backlash to the surveillance system has surged after hundreds of reports have emerged of police officers using the cameras to stalk women. Activists have used that fact to strike back at those who have contracted with the company. 404 Media reports that in Arizona, one man told his city council that he would be deploying AI-enabled satellites to monitor “where government officials go, where they stop, who they meet with, and when they return home,” inviting local businesses to join the network to “protect” officials wherever they shop, eat at restaurants, or move around the city.
As Flock faces dozens of cancelled contracts with cities and police departments across the United States, one YouTube personality, Tyler Oliveira, who has over 9 million subscribers, has struck back at the company itself, hiring a private investigator to tail Flock CEO Garrett Langley for over three days just to “make sure he wasn’t committing a crime or cheating on his wife.” In mid-July, Flock posted its damaged camera policy showing that the company paid $800 per damaged camera, which has only encouraged the vandalism trend.
