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Ukraine has deployed elite Azov units to stem the Russian infantry advance into the Donbas. The coming days will reveal how successful that is. The American economy is in strange territory, both contracting and booming in different areas. As we’ve said since 20 Jan, Trump’s economic policies are unique, and likely to produce unique results. Where this is going is unclear, but lots of cash is being poured into tech stocks, that’s for sure. Israel is still pushing for ‘emigration’ of Palestinians from Gaza, as it readies for a major battle in Gaza City. And the U.S. State Dept criticizes free speech in Britain, as the EU prepares to debate unprecedented measures to monitor internet communications.

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Center of Gravity

What you need to know

Ukraine send elite forces to plug gaps in Donbas

Ukrainian units on the ground say the breakthrough by small Russian infantry groups near Dobropillia is being contained, with some areas already retaken. There is so far no evidence of large Russian formations exploiting the breach. Information, however, is still limited; the situation should become clearer in the coming days.

The elite 1st Azov National Guard Corps has taken up defensive positions along the approaches to Dobropillia and the Dobropillia–Kramatorsk road, this is the sector where Russian forces have penetrated 10–25km (6–16 miles) into the rear of Ukrainian lines.

Ukrainian commander-in-chief Oleksandr Syrskyi is receiving much of the blame for the setback in the Donbas.

  • This also reflects on President Volodymyr Zelensky, who replaced General Valerii Zaluzhnyi with the 60-year-old Syrskyi in 2024.

Syrskyi remains unpopular with many Ukrainian soldiers, who see him as a Soviet-trained career officer trapped in an outmoded style of military thinking. Since Zelensky replaced Zaluzhnyi with Syrskyi last year, critics argue the war has become a contest between two Soviet-style armies, with Ukraine losing the advantage of its Western training.

In an unexpected move on Monday, Zelensky said Ukrainian men under the age of 22 would be allowed to travel abroad, instructing the government to implement the change. He has refused to lower the age of male conscription to 18; it stands at 25, having previously been 27. Ukraine’s continuing disadvantage is manpower, set against a Russian war machine willing to spend lives for limited territorial gains.

Zelensky has nevertheless sought to downplay manpower concerns by citing Russian losses. Although unverified, the figures he references suggest Russia suffers an average of 531 fatalities a day, compared with 18 for Ukraine.

  • NATO officials have broadly echoed this assessment.

Zelensky arrives in Berlin today for a bilateral meeting with German Chancellor Friedrich Merz. The leaders will join a video conference with European heads of state, NATO secretary-general Mark Rutte and U.S. President Donald Trump.

Friday’s meeting between Russian President Vladimir Putin and Trump is due to take place at Joint Base Elmendorf-Richardson in Anchorage, Alaska. Some concern has been voiced about allowing Russian military aircraft to land at a sensitive U.S. military facility, though the Pentagon has not publicly pushed back.

Known Unknowns: The impact of U.S. tariffs on international trade & especially the U.S. bond market. Whether the U.S. and Iran will restart nuke talks. Relations of new Syrian government with Israel, international community & ability to maintain stability inside Syria. China’s triggers for military action against Taiwan. U.S. responses to China’s ‘grey zone’ warfare in the South China Sea and north Asia. Ukraine’s ability to withstand Russia’s war of attrition. The potential for the jihadist insurgency in Africa’s Sahel region to consolidate and spread.

U.S. Foreign & Trade Policy

America First

Mexico extradites 26 prisoners to the U.S. amid cartel cases

Mexico on 12 August extradited 26 prisoners to the U.S., accused of links to major drug-trafficking organizations, the second such mass handover this year after a group of 29 in February.

Mexico’s attorney general’s office and security ministry said the transfer was carried out from multiple prisons following U.S. Department of Justice requests, with Washington assuring that the death penalty will not be sought.

  • The move reflects tighter cross-border coordination amid U.S. pressure to act against fentanyl smuggling and cartel violence.

U.S. officials said the group includes figures tied to the Jalisco New Generation Cartel and the Sinaloa Cartel.

Reported names among the 26 include Abigael González Valencia (“El Cuini”), Servando Gómez (“La Tuta”), Juan Carlos Félix Gastélum (“El Chavo Félix”) and Leobardo García Corrales, though Mexican authorities have said they will release the full list at a later briefing.

  • Critics in Mexico noted that the operation reprises February’s legally novel “transfer” mechanism, which sidestepped lengthy extradition battles, while supporters in both governments hailed it as a milestone in security cooperation.

Politically, the extradition comes as President Donald Trump has linked tariff threats and potential military action against cartels to Mexico’s cooperation. President Claudia Sheinbaum’s administration has emphasized collaboration while rejecting any unilateral U.S. operations on Mexican soil. Further bilateral security arrangements are reportedly under discussion.

Rubio says U.S. terror listing of the Muslim Brotherhood is in the works

U.S. Secretary of State Marco Rubio said his department is working on designating the Muslim Brotherhood as a foreign terrorist organization. He noted that any action would need to address the movement’s disparate international branches separately, and he anticipated legal challenges once listings are announced.

Under Section 219 of the Immigration and Nationality Act, the State Department may designate a foreign group: if it is foreign, engages in terrorism or has the capability and intent to do so, and threatens U.S. national security. Congress must be notified seven days before publication in the Federal Register, after which criminal prohibitions on providing “material support” apply and assets can be blocked. Judicial review lies in the D.C. Circuit.

Past attempts to apply an umbrella designation have stumbled over definitional and evidentiary hurdles. Some have argued that the Muslim Brotherhood is more of an ideology than an actual organization or movement.

  • Rubio’s framing, focused on specific national components rather than a single global entity, reflects those constraints.

In practice, any U.S. action would likely name particular organizations, such as national “societies” or offshoots, rather than a notional worldwide Brotherhood. Expect litigation testing whether the administrative record meets the statute’s findings for each listed entity, and whether due-process claims can succeed.

Some U.S. partners have already proscribed the Brotherhood or affiliates (Jordan most recently), while others have scrutinized the movement without banning it outright. Divergent approaches among allies suggest that any U.S. move will trigger diplomatic debate as well as domestic court review.

What to watch next

  • A Federal Register notice naming specific entities, following the seven-day congressional notification.

  • Any parallel legislative effort to mandate or broaden designations.

  • Immediate court challenges and compliance advisories once prohibitions under 18 U.S.C. §2339B are triggered.

Trump Administration

Move fast and break things

Tech rules as markets set records, U.S. deficit grows & BLS nominee stirs debate

Nvidia (ticker: NVDA) now accounts for more than 8% of the S&P 500, the highest weighting for a single stock in the index’s history.

  • Technology’s share of the S&P 500 has climbed to a record 35%, above the dot-com peak, while health care has fallen below 9% for the first time since the 1990s.

  • Investors continue to pile into tech.

While this clearly demonstrates the dominance of tech, particularly Artificial Intelligence, in the markets, the dominance of one firm is not unusual in the history of American stock trading.

  • For comparison, AT&T accounted for 13% of the U.S. stock market in 1932, General Motors 8% in 1928 and IBM 7% in 1970. Historically, the largest single stock has averaged nearly 6% of total market value since the late 1920s.

Despite surging tariff revenues, the U.S. budget deficit in July was 10% higher than a year earlier. In the month, the U.S. government collected $338 billion and spent $630 billion, leaving a $291 billion shortfall. More than one in four tax dollars last month went to interest payments.

The White House on Tuesday posted “Are you tired of winning?” alongside an Investopedia headline reading: “Dow Jones Today: S&P 500, Nasdaq Composite Close at Record Highs as Stocks Surge After CPI Report Boosts Rate-Cut Hopes.”

  • Meanwhile, Bank of America reports that U.S. spending on services (hotels, airfares and dining) has fallen for three straight months, the first such run since 2008.

  • Notably, however, recent price pressure is concentrated in categories largely outside the effects of tariffs, such as housing, medical services, electricity, restaurant meals, airfares and used cars.

The economy, overall, is in strange territory. Markets and macro indicators are flashing records across the board, despite the growing federal debt: stocks, home prices, Bitcoin and gold are all at all-time highs, as are the money supply and the national debt, while consumer prices have risen at roughly 4% a year since January 2020, about twice the Federal Reserve’s 2% target.

President Donald Trump said he would nominate Dr. E.J. Antoni as commissioner of the Bureau of Labor Statistics, praising him as an economist who will ensure “honest and accurate” data. The announcement follows the dismissal earlier this month of the previous incumbent after BLS revisions suggested labor-market weakness. Antoni has called Social Security a “Ponzi scheme” that should be “sunset,” remarks likely to draw scrutiny at his confirmation hearing.

The Middle East

Birth pangs in the birthplace of civilization

Israel encourages Gaza departures as resettlement and a new offensive loom

Israel will allow Palestinians to leave Gaza as it prepares a new military offensive. Officials say departures will be managed in stages, with priority given to humanitarian cases.

  • Jerusalem is in talks about possible resettlement options for Palestinians from Gaza in South Sudan. The discussions remain exploratory.

  • Rumors in Washington, D.C., suggest that Somaliland, the self-governing region of Somalia that seeks recognition as an independent state, might be willing to accept Palestinians from Gaza in exchange for U.S. recognition of its independence. No formal proposal has been announced.

Adding fuel to the fire for those accusing Israel of genocide, in an interview with the Israeli outlet i24NEWS, later reported by the Times of Israel, Israeli Prime Minister Benjamin Netanyahu voiced support for the idea of a “Greater Israel,” a concept associated with the far religious right that envisions expansion into neighboring countries, including Jordan and Egypt. Netanyahu did not outline specific steps.

Negotiating teams in Doha and Cairo are working to craft an arrangement that would avert a full Israeli assault on Gaza City, the largest urban center in the Gaza Strip.

Israeli units have been observed gathering outside the Gaza Strip, seemingly in preparation for an assault on Gaza City, which may come as late as October, or much earlier.

New Europe

Europe's center of gravity shifts east, politics moves right, hostility to migrants from the south rises, as ties with the U.S. fray

U.S. criticizes UK’s record on free speech as EU weighs message-scanning rules

The U.S. State Department has accused the UK of “significant human-rights issues,” including curbs on free speech.

The assessment appears in an updated edition of the department’s annual Country Reports on Human Rights Practices, released as U.S. Vice President J.D. Vance holidayed in the Cotswolds.

The report says conditions in the UK “worsened” in 2024, citing credible accounts of limits on freedom of expression and of crimes, violence or threats of violence motivated by antisemitism since the 7 October Hamas attack on Israel. While free speech is “generally provided for,” the document highlights areas of concern where political speech deemed hateful or offensive has been restricted.

Separately, Italy, Greece, Denmark, France and Spain are developing identity-based age-verification regimes, akin to provisions in Britain’s Online Safety Act.

The European Union’s so-called chat-control proposal is slated for a vote on 14 October 2025. The measure would require scanning content sent through messaging apps, including private messages and photos on users’ devices. Only three EU member states, Austria, Germany, and the Netherlands, have so far said they will vote against.

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What happened today:


1521 - Fall of Tenochtitlán to Hernán Cortés. 1898 - U.S. forces capture Manila in the Spanish–American War. 1905 - Norway votes to dissolve its union with Sweden. 1942 - Manhattan Engineer District (Manhattan Project) established. 1960 - Central African Republic declares independence from France. 1961 - Construction of the Berlin Wall begins. 2020 - Israel and the United Arab Emirates announce normalization (Abraham Accords).

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