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1. Michael Sulmeyer:

The United States may only have nine to 12 months to protect its critical infrastructure from AI-powered attacks. Currently, two American companies, Anthropic (for which I consult) and OpenAI, have publicly demonstrated AI models advanced enough to detect flaws in software far beyond the human capacity to find, and they are restricting the use of these models to defensive cybersecurity work.

But the United States’ adversaries, and the criminals in their orbit, will soon wield the same offensive tools. China, in particular, is already racing to build and acquire these AI capabilities and may be closer to developing its own Mythos than many U.S. policymakers hope. Advanced AI will sharpen an instrument that Beijing already prizes: the credible threat to deter a fight over Taiwan before it begins by disrupting the island’s critical infrastructure and that of any nation that seeks to defend it….

The United States has a window to bolster its critical infrastructure’s defenses, but that window is short, and those defenses are weak to begin with. In a campaign called Volt Typhoon, Chinese state-linked hackers already demonstrated how deeply they can burrow into U.S. critical infrastructure, including organizations in the water, power, and transportation sectors. Now is the time to put policy options on the table that were previously considered out of bounds: taking dramatic steps to preempt would-be attacks, making once-in-a-generation investments in cyberdefense, and helping U.S. AI labs protect themselves against the most advanced threats. (Sources: cset.georgetown.edu, foreignaffairs.com)

2. The U.S. is surging forces, medics and weaponry to the Middle East to give President Trump more muscular military options as he considers expanding the conflict against Iran, according to people familiar with the matter. In the past week, special-operations forces have deployed to the region from their U.S. bases, according to flight-tracking data and U.S. officials. Squadrons of jet fighters have been staged across the Middle East, and bomber aircraft at bases in the U.S. and U.K. are on high alert to ramp up operations, according to one of the officials. Additionally, more than 150 medics have arrived at the Landstuhl Regional Medical Center in Germany in recent days, another official said. The hospital is the primary location for treating troops injured in combat in the Middle East. The preparations are the latest indication that Trump is considering escalating the conflict. (Source: wsj.com)

3. The Iran-backed Houthis claimed their first attack on commercial ships in recent months, opening a new front in the US-Iran war that has already disrupted global energy supplies and rattled bond markets. The militant group, based in Yemen, said it targeted two Saudi Arabian oil tankers in the Red Sea with missiles and drones. The Saudi government confirmed an attack on one refined-products tanker, called the Encelia. The British navy also said a tanker was struck near the Saudi town of Al Shuqaiq in the southern part of the sea. The Houthis said the second vessel was named Layla, which is a crude-oil carrier. While it’s unclear if the ships were hit and damaged, the move could effectively close another maritime chokepoint vital to energy markets, following Iran’s shutdown of the Strait of Hormuz. Some vessels are already avoiding the Bab el-Mandeb strait at the bottom of the Red Sea, while oil prices are rising further. (Source: bloomberg.com)

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1. Without fail, David Liu of the Broad Institute gets at least 20 messages every week from desperate parents. Their child, they’ll explain, has an ultrarare and devastating disorder caused by a mutant gene. Can he help them develop a gene therapy? Dr. Liu, a gene-editing researcher, answers honestly: Although the science is there — researchers can edit and silence the genes that cause disease relatively easily — the system for developing treatments for rare diseases is just not economically feasible. It typically takes years and hundreds of millions of dollars. The catchphrase, said Dr. Wendy Chung of Boston Children’s Hospital, is “too rare to care.” Now, Dr. Liu, Dr. Chung and their colleagues at the Broad Institute, Boston Children’s and the Jackson Laboratory are hoping to change that mentality. On Tuesday, they announced the start of a new nonprofit, the Center for Therapeutic Genetics, to develop gene therapy treatments that can be used and reused in disease after disease. Treatments developed by the center would be viewed more like routine procedures than drugs. In each case, all that would be changed are the instructions to a gene editor. There would be no need to start anew for every patient. In principle, with more centers like this one, the new approach could improve the lives of millions of people, said Dr. Liu, who is also affiliated with Harvard University and Howard Hughes Medical Institute. About 400 million people worldwide and 25 to 30 million in the United States have a rare disease. Half are children, and a third die before they turn 5. (Sources: broadinstitute.org, nytimes.com)

2. Cato Networks:

A Russian-speaking threat actor known as “Trim” has spent the better part of 2026 systematically dismantling the guardrails on publicly available frontier AI models and rebuilding them as offensive tools. What started in March as a knowledge-sharing post on a Russian cybercrime forum detailing how to break Claude Opus into writing malware, had evolved by June into a fully productized, commercially marketed AI-powered penetration testing platform. Trim didn’t need a vulnerability to exploit. He didn’t need to build a novel AI, steal model weights, or compromise a datacenter. He simply picked powerful models off the shelf, figured out how to talk to them in the right way, and turned them into weapons. His story is not just one threat actor’s journey, it is a blueprint that the entire criminal underground is beginning to follow, and in his latest post he shares he is also utilizing a modified system prompt leaked from Fable! (Source: catonetworks.com)

3. ChatGPT maker OpenAI said Tuesday that its artificial intelligence system hacked into another AI company on its own in what the company called an “unprecedented cyber incident.” “We had a significant security incident during evaluation of our models,” OpenAI CEO Sam Altman said in a statement posted on social media. AI startup Hugging Face said last week that it had detected an intrusion into its data processing systems that it suspected was caused by an AI agent autonomously acting on its own. “We suspected last week’s cyberattack might have come from a frontier lab, given the sophistication of the agent,” Hugging Face co-founder and CEO Clément Delangue said in a statement. “Turns out it did!” Delangue said he spent the past 24 hours working with OpenAI, “and we strongly believe there was no malicious intent on their part. It’s quite mind-blowing that all of this happened autonomously!” (Source: apnews.com. Italics mine)

4. A Chinese artificial intelligence (AI) system has topped an international ranking for autonomous scientific research, pulling ahead of Anthropic’s Claude Code and other top agents. As of Tuesday, the Zhejiang University-led Qiushi Engine held the top overall spot on the ResearchClawBench leaderboard, with Open Science Desktop in second and Claude Code in third. ResearchClawBench tests the ability of AI agents to independently carry out research and compares their results against reference papers written by humans to see if they can reach the same conclusions or even outdo the original authors. (Source: scmp.com)

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Charles Stewart III is the Kenan Sahin Distinguished Professor of Political Science at MIT, where he has taught since 1985, and a Fellow of the American Academy of Arts and Sciences. His research and teaching areas include American politics congressional politics, elections, and American political development.

Professor Stewart is an established leader in the analysis of the performance of election systems and the quantitative assessment of election performance. Since 2001, Professor Stewart has been a member of the Caltech/MIT Voting Technology Project, a leading research effort that applies scientific analysis to questions about election technology, election administration, and election reform.

He is currently the MIT director of the project. Working with the Pew Charitable Trusts, he helped with the development of Pew’s Elections Performance Index. Professor Stewart also provided advice to the Presidential Commission on Election Administration. His research on measuring the performance of elections and polling place operations has been funded by Pew, the Democracy Fund, and the Hewlett Foundation. As part of this research, he was the co-editor (with Barry C. Burden) of The Measure of American Elections.

In 2017, with the support of the William and Flora Hewlett Foundation, Democracy Fund, and the Joyce Foundation, Professor Stewart established the MIT Election Data and Science Lab, which applies scientific principles to how elections are studied and administered. In 2020, he partnered with Professor Nate Persily of the Stanford Law School to establish the Stanford-MIT Healthy Elections Project.

If you had to pick one person in the United States to give you the most knowledgeable analysis of U.S. elections generally and well-informed guidance on the upcoming mid-term elections specifically, you’d probably pick Charles Stewart.

So, we called him up.

(The News Items Podcast, Episode #20: Interview with MIT Professor Charles Stewart. Recorded 17 July 2026. Produced by Dale Eisinger. You can find this podcast, and previous News Items podcasts, on most of the major platforms, including Apple, Amazon and Spotify.)

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1. Axios:

President Trump is nearing a decisive fork in the Iran war, with U.S. and Israeli officials envisioning only two viable endgames:

Option 1: Pursue a new 10-day ceasefire aimed at reopening the Strait of Hormuz.

Option 2: Launch a massive joint military campaign with Israel to force Tehran’s capitulation.

Trump hasn’t made a decision yet. But officials believe the next few days will determine which path prevails — with little room left for the grinding, open-ended conflict now paralyzing the Gulf. (Source: axios.com)

2. Yemen’s Iran-aligned Houthis said on Monday they ​would impose a naval blockade on Saudi Arabia, opening a potential new front against the United States in its war with Iran and raising the threat to global energy supplies and trade beyond the Gulf. The ‌escalation comes after one of the deadliest periods in the war for U.S. troops. The Pentagon on Monday identified two U.S. soldiers who were killed when Iran attacked an American base in Jordan on Friday, while they also said they had found unidentified remains that could be those of a third soldier reported as missing in action. Separately, a fourth service member was killed in northern Iraq during the “controlled detonation of unexploded ordnance from a downed Iranian one-way attack drone.” (Source: reuters.com)

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1. The United States and Iran moved closer to all-out conflict on Sunday, as the exchange of attacks on civilian and military structures continued to escalate and with at least three and possibly four U.S. service members killed since combat resumed a week ago. “The U.S. is planning for a wider war,” said one U.S. official familiar with internal administration discussions, adding that the Pentagon was increasing the number of military aircraft in the region. But the official, speaking on the condition of anonymity because they were not authorized to talk to the media, cautioned that the expansion of U.S. operations will be limited by dwindling stockpiles of air defense and long-range munitions and constraints on the ability to surge more troops and aircraft into the area because of battle damage. “We do not have enough to safely sustain operations, and I don’t think the White House is aware of that,” the official said. (Source: washingtonpost.com)

2. Israel is preparing to receive more U.S. ​refueling aircraft, an Israeli military official said on Sunday, as attacks ‌launched by the United States and Iran have escalated over the past week. The Israeli official said the U.S. had "decided to ⁠adjust its force posture in the region" and "to reinforce the existing fleet of ​aerial refueling aircraft stationed in Israel with additional refueling aircraft." Another senior Israeli official ​said dozens of U.S. refuelling planes were expected to arrive in Israel. The U.S. Embassy in Jerusalem was not immediately available for comment. (Source: reuters.com. Italics mine.)

3. Iran’s currency has fallen to a record low as the US seeks to increase pressure on the country’s battered economy and strikes threaten to reignite all-out war between Tehran and Washington. The rial touched 1.95 million to the dollar on the open market on Sunday, down nearly 10 per cent since a fragile ceasefire between the US and Iran started breaking down in early July. The tumble came after US President Donald Trump last week reimposed a blockade on Iranian ports to cut off oil exports and disrupt imports, part of their battle for control over the Strait of Hormuz. He also rescinded a waiver that allowed Iranian oil sales, Tehran’s economic lifeline. (Source: ft.com)

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1. The New York Times:

U.S. and Iranian forces edged closer to wider war over the weekend after the killing of two American service members in Jordan during an Iranian missile barrage.

They were the first U.S. soldiers killed by hostile fire since a truce with Iran unraveled in recent weeks, bringing the death toll to 16 among U.S. military personnel since the war began in February. Another service member is still missing after Iran on Friday bombarded a military base in Jordan that hosts U.S. forces.

The deaths of the soldiers capped a week of spiraling attacks that chipped away at what remained of the deal that President Trump agreed to with Iran last month, which was supposed to end the war. Sensitive infrastructure targets like bridges and water facilities have come under fire in Iran, and in U.S.-allied countries on the other side of the Persian Gulf.

The U.S. military said early on Sunday that it had struck Iranian military coastal surveillance and air defense facilities, as well as the Islamic Revolutionary Guards Corps forces responsible for striking U.S. forces in Jordan.

Iran responded by launching strikes on Kuwait, where the United States has a significant military presence. The Kuwaiti government said an oil facility as well as a power and water treatment plant had been attacked. Jordan’s military said on Sunday that it had intercepted hostile drones and missiles. (Source: nytimes.com)

2. Robert Pape:

Last night Iran crossed another escalation threshold.

Instead of concentrating on military bases, Iranian missile and drone strikes hit a vital power and water desalination plant in Kuwait —part of the system that produce roughly 90 percent of the country’s drinking water. Unlike past fragments by Iran strikes that inadvertently hit desalination plants earlier, there is no question this plant was directly targeted. The fire was contained and emergency crews are restoring stability, but the strategic message is unmistakable: civilian survival infrastructure is now becoming a direct battlefield target.

Kuwait relies on eight major desalination plants to sustain its population, which supply over 90% of the country’s drinking water. Because all eight desalination plants sit directly on the Persian Gulf coast, approximately 100 miles from Iran, they reside well within the immediate range of Iranian saturation tactics, including by drones and more powerful sea-skimming cruise missiles. To critically stop Kuwait’s entire freshwater supply system, Iran would need to knock out just two to three of its largest desalination plants, which together produce roughly 70% to 80% of the country’s entire daily desalinated water supply.

The timeline required to bring a heavily centralized desalination plant back online after a military or drone strike varies wildly depending on which specific component of the facility was damaged, ranging from several days for damage to electrical connections to the power grid to one to two months for piping to one to two years for the distillation tower or its co-generation steam turbines which must be custom built.

Kuwait has approximately 5 days of national emergency water storage in its ground reservoirs and distribution networks. With rationing the emergency period can stretch to a month or so – exact estimates impossible since there is little historical experience.

The plant Iran hit is the fourth largest. (Source: escalationtrap.substack.com)

3. The Trump administration notified Israel it is sending dozens more refueling planes to the country ahead of a potential expansion of military operations against Iran, three U.S. and Israeli officials said. After he was presented with several new military plans in a Situation Room meeting Tuesday, President Trump is considering a massive offensive in Iran that would be wider in scope than the current strikes around the Strait of Hormuz. Among the options being considered are bombing Iranian infrastructure facilities like power plants, conducting more attacks on Iran’s nuclear facilities in order to bury Iran’s enriched uranium even deeper, and bombing the Pickaxe Mountain underground site that is suspected to be a facility in the making. (Source: axios.com)

4. One person has been killed and 16 wounded after Russia unleashed its largest ballistic missile attack of the war on Ukraine on Saturday night. Moscow launched 41 missiles and 125 attack drones, largely targeting the Ukrainian capital, starting at 1.30am local time and continuing for several hours, according to the Ukrainian air force. Russia has launched several large-scale attacks against Kyiv in recent weeks as Ukraine faces a shortage of its most effective air-defense weapons to intercept the strikes. Andrii Sybiha, Ukraine’s foreign minister, wrote on X: “Russia unleashed the ⁠largest number of ballistic missiles since the start ​of the ‌war – around four dozen – in a brutal terrorist ‌attack on ​the ⁠Ukrainian capital, killing ⁠and injuring people. (Source: telegraph.co.uk)

5. A Ukrainian drone attack on a logistics center belonging to the Russian equivalent of Amazon has caused clouds of smoke so large they have darkened the skies across the Moscow region. Long-range drones struck the Wildberries facility in the city of Elektrostal, about 30 miles east of the capital, in a bombardment that also targeted another of the company’s fulfilment centres in the city of Kotovsk, some 300 miles south-east of Moscow. Volodymyr Zelensky, the Ukrainian president, said the Wildberries depots were used to “supply sanctioned components for drone production and navigation equipment” and described the strikes as retaliation for Moscow’s attacks on “our civilian infrastructure”. (Source: telegraph.co.uk)

6. Chinese AIModels:

(Source: openrouter.ai)

7. No edition of News Items would be complete without an item like this one:

On a frigid Thursday last December, 50 finance and technology experts shuffled into the International Monetary Fund’s Washington, DC, headquarters with a dire mission: to war-game how artificial intelligence might upend the global economy.

For hours, a disparate cohort from organizations including Google DeepMind, Rand Corporation and the Board of Governors of the Federal Reserve System split into six groups to map and debate AI’s potential impact on tax systems, spending and gross domestic product under the secrecy of the Chatham House Rule.

While the conclusions were mixed, the exercise reflected a growing realization among some of the world’s smartest thinkers that the most pressing AI doomsday scenario may not involve killer robots or sentient computers.

Instead, the end of civilization as we know it will likely be caused by income tax erosion.

The logic is straightforward. Ever since the First Industrial Revolution saw peasants pushed off the land, governments have relied on taxing people and their paychecks. Rand estimates that 66% of US federal revenue in 2024 came from either individual taxes or payroll taxes due directly to labor. Even in Australia, where resource exports generate vast wealth, individual income tax accounts for almost half of federal government revenue.

Despite barely scratching the surface of usefulness, AI is already threatening to erase entire categories of white-collar work around the world. Standard Chartered Plc Chief Executive Officer Bill Winters may have apologized after airing plans to replace some “lower-value human capital” with AI, but only for causing offense, not for the underlying message. Peers including HSBC Holdings Plc are weighing deep cuts enabled by the technology. (Source: bloomberg.com)

8. Americans prefer Democrats to Republicans in the congressional midterm elections by only a slim margin, but Democratic supporters are far more motivated to vote, according to a Washington Post-Ipsos poll. Because of partisan redistricting that favors Republicans this year, analysts estimate that Democrats need to win by three to four percentage points overall to gain a majority in the House. The poll shows Democrats leading Republicans by about that margin, 48 percent to 45 percent. The blue advantage grows to eight points among those “absolutely certain to vote,” with 53 percent of highly motivated voters supporting Democrats and 45 percent supporting Republicans. (Source: washingtonpost.com. Our view is that the Democrats remain favored to recapture the House, but are more than capable of not doing so.)

9. Nature.com:

Scientists have harnessed artificial-intelligence models to create synthetic CRISPR proteins that edit the genome more efficiently than their naturally occurring counterparts. Such synthetic CRISPR systems could one day power discoveries in fields from medicine to agriculture.

The results were published on 16 July in Science.

“Much like CRISPR democratized the ability to edit DNA at will, AI-based protein design promises to allow anyone to create totally novel properties in the protein space,” says Soeren Lienkamp, a molecular biologist at the University of Zurich in Switzerland who was not involved in the research. He adds that the paper “marries two transformative fields”: AI-guided design and enzymes called RNA-guided nucleases, which can cut DNA and RNA strands. (Source: nature.com)

10. Pithy!

Peter Kafka: What did you read this morning?

Joseph Kahn, Executive Editor of The New York Times:

There’s this, John, John Ellis puts together a kind of kind of news Nuggets Substack every day, which I always, there’s always something in there that I otherwise would have missed.

You know, he reads very, very widely and summarizes in a very pithy way.

I find that very useful in the morning. (Source: podcasts.apple.com, 8 July 2026)

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Quick Links: Israel is funding a multimillion-dollar U.S. influence campaign using AI-driven texts and conservative media to improve its public reputation. It doesn’t seem to be working. Eli Lilly is reinventing the pharma business. Scandal sends Wisconsin Democrats into freakout mode over governor’s race. As well they might be: The Democratic Socialist Party candidate, Francesca Hong, is a shrewd politician. The Great Swami’s pick to win The Open Championship is moving ever closer to victory.

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1. Financial Times:

Xi Jinping has set out China’s ambitions to rival the US as a global leader in AI, a day after almost 30 countries joined a coalition that will hand Beijing more control over the development of the technology.

China’s president called for “extensive international co-operation” as he warned over AI’s risks, and said China would offer training to developing countries and help them build capacity.

Speaking at an AI conference in Shanghai on Friday, Xi said that the more AI developed at a “staggering speed”, the more there was a need for a “positive direction”.

“[We must] more precisely grasp the scale of oversight and governance, and more promptly refine measures to forestall loss of control,” he said.

His comments came a day after nearly 30 countries, including Russia, Brazil and Indonesia, signed up to a new group, the World Artificial Intelligence Cooperation Organization, which he called an “important milestone in the history of AI development”.

The body stands to give Beijing influence over domains such as international standard-setting for AI as the country’s large language models increasingly compete with their US rivals for global influence. (Source: ft.com)

2. Financial Times:

Chinese AI start-up Moonshot has released a large language model with capabilities approaching those of frontier US labs such as Anthropic, as the gap narrows between the two countries on state-of-the-art AI.

The Beijing-based group released Kimi K3, China’s largest AI model to date with 2.8 trillion parameters, on Thursday. The number of parameters refers to the size of the model’s neural network, with a higher count generally leading to greater capabilities.

Anthropic has not disclosed its models’ parameters, but industry experts speculate its flagship Claude Opus 4.8 has 1.5 trillion-2 trillion parameters.

People with knowledge of the development said K3 would be freely available to download as a so-called open-weight model.

K3 was beating Opus 4.8 and OpenAI’s GPT 5.5 in most coding and general AI agent benchmarks, according to results released by Moonshot. On most benchmarks it was still falling short of Fable, a powerful model that Anthropic briefly suspended after the US raised concerns over its hacking capabilities. (Source: ft.com)

3. Bloomberg.com:

On a video conference call from Hangzhou earlier this year, one of China’s hottest startups held a four-hour pitch meeting with potential venture investors that was unusual by almost any measure. Only two representatives per institution were allowed. The majority of those present were getting a glimpse of the company’s leader for the very first time.

“We’re a group of very ordinary people,” said Liang Wenfeng, DeepSeek’s elusive founder, according to some of the attendees.

His comment belies the extraordinary status of his company, a Chinese startup that has shaken up the global tech industry with powerful models trained on a fraction of the resources used by OpenAI and Anthropic PBC. Liang ultimately raised $7.4 billion in the largest private AI financing in Chinese history, valuing the three-year-old lab at more than $50 billion. Just weeks later, DeepSeek is plotting an initial public offering in 2027 that will likely bring in billions more.

Liang is now poised to lead a fresh, potentially more threatening, challenge to Silicon Valley. With coffers full, DeepSeek has more resources to develop cutting-edge AI services and offer them globally at prices far below US rivals. Chinese low-cost, open-source services risk undercutting the business prospects for OpenAI and Anthropic in overseas markets — and increasingly in the US.

“DeepSeek isn’t just a technical breakthrough, it’s an economic one,” said Robert Wu, chief executive officer of BigOne Lab, a Chinese analytics company that tracks technology trends. (Source: bloomberg.com)

4. Financial Times:

Global tech stocks dropped sharply earlier today, putting an index of US semiconductor companies on track for its worst week since last year’s “liberation day” market rout, as investors cooled on some of the biggest winners from the AI boom.

Japan’s tech-heavy Nikkei 225 index sank 4 per cent and China’s CSI 300 weakened 3.6 per cent, following Thursday’s losses on Wall Street. Nasdaq 100 futures were down 1.8 per cent after the index lost 1.6 per cent in the previous session.

The sharpest moves came in high-flying semiconductor stocks — particularly makers of memory chips — in an abrupt reversal for so-called momentum trades, where investors bet on further gains for market leaders.

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1. The United States intensified its strikes on Iran earlier today, hitting targets further north as American forces also fired into a ship it accused of trying to break its naval blockade on the Islamic Republic. Iran retaliated with missile and drone fire targeting U.S. allies in the region before dawn and warned its attacks may escalate. Days of back-and-forth strikes by the U.S. and Iran across the Middle East — and renewed threats to the Strait of Hormuz — have shredded the interim deal to end the Iran war and could tip the region back into all-out war. Already, Iranian officials say U.S. strikes have killed more than 35 people and wounded over 300 others. Strikes also reached into areas around Iran’s capital, Tehran, for the first time in this latest round of violence, showing a widening set of targets for the Americans. (Source: apnews.com)

2. President Trump is leaning toward expanding U.S. military operations in Iran after days of briefings from top aides, U.S. officials said. Options include stepping up airstrikes, sending ground forces to seize Iranian islands near the Strait of Hormuz and bombing a fortified site that could be used for covert nuclear work. Trump hosted a Situation Room meeting Tuesday evening to discuss the potential seizure of Kharg Island and other territory along the Strait of Hormuz using U.S. troops, as well as the potential bombing of a tunnel complex at Pickaxe Mountain, a nuclear-linked site the U.S. has yet to target. Expanding airstrikes against more targets in Iran, including energy sites, also remains a possibility. (Source: wsj.com)

3. Robert Pape:

(Yesterday), Iran used heavy anti-ship missiles with up to 1000 pound warheads against tankers in the Strait of Hormuz. This marks a shift from controlled brinkmanship to high-risk, uncontrolled escalation. By deploying weapons capable of catastrophic damage, Iran is creating a scenario where potential U.S. casualties could trigger an unavoidable, massive retaliatory response.

In recent days, numerous U.S. Navy ships are dangerously repositioned close to Iran’s coast, well within Iran’s anti-ship cruise missile range. A 1,000-pound cruise missile warhead delivers catastrophic, ship-sinking destruction, far eclipsing minor drone strikes. Even 30-40 U.S. casualties would instantly shatter diplomatic options, forcing an uncontrollable, public-fueled demand for payback that could lock both sides into a costly spiral of escalation.

From that moment forward, the political logic of the war changes. (Source: escalationtrap.substack.com)

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“The first email I read, every morning, is News Items.” — Rick Cordella, President, NBC Sports.

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“News Items is the first thing I read every morning”. — David Brooks.

1. President Trump formally notified lawmakers this weekend that the nation is once again at war with Iran, giving his administration another 60-day clock to use the military in the region without congressional approval. In a letter to Congress dated July 10, obtained by POLITICO, Trump stated that the strikes that began on July 7 represent “military action consistent with my responsibility to protect Americans and United States’ interests both at home and abroad.” (Source: politico.com)

2. The US launched strikes on Iran earlier today, hours after President Trump said Washington was “reinstating” a blockade on Iran in the Strait of Hormuz. Mr. Trump separately suggested the United States will charge other ships for safe passage, upending hundreds of years of American policy supporting freedom of navigation across the globe. Iran responded with attacks targeting Bahrain, Jordan and two tankers associated with the United Arab Emirates traveling through the strait, killing one mariner and wounding eight others. The Emirates threatened to retaliate against Iran, potentially drawing the nation that is home to Abu Dhabi and Dubai back into fighting with Tehran. (Source: timesofisrael.com)

3. Mr. Trump yesterday said the U.S. will take over the Strait of Hormuz — and will be reimbursed “at the rate of 20% on all cargo shipped” for overseeing one of the world’s most critical oil passageways that has been at the center of the U.S.’s re-escalating war with Iran. “We will become guardians of the strait,” Trump said during an interview with “Fox & Friends” on Monday morning. “We’re going to hit [Iran] very hard and keep the strait, and probably run it.” His comments arrive on the heels of fresh strikes in the Gulf, where Iran and the U.S. exchanged heavy fire over the weekend. Trump followed his Fox News interview with a Truth Social post that said the U.S. will reimpose a blockade on Iran. (Source: politico.com)

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‘Alternate Shots’ Episode #32. Co-hosts: John Ellis and Richard Haass. Produced by Dale Eisigner. Recorded 10 July 2026.

If you prefer, you can listen to this episode (and all previous episodes) by clicking on these hyperlinks: Apple, Amazon, and Spotify. We’re on a number of other podcast platforms as well. And now, YouTube!

At this point, it doesn’t really matter how President Trump decided to go to war with Israel against Iran. And it doesn’t really matter how we got to this point of the war. We’re here. The question is: what next?

In this episode of ‘Alternate Shots’ Richard and I address this question. More accurate: Richard offers some ideas on a realistic path forward. Oversimplified, Richard asserts that a “long game” is probably the only viable option.

We move on to discuss the Ukraine war, which Ukraine has remarkably and admirably fought to something that looks a lot like stalemate. In so doing, it’s not inaccurate to say that Ukraine has acquired significant leverage in determining the war’s outcome. There aren’t seven people who imagined that was possible when the war began.

We then move on to discuss the extraordinary efforts by the Trump administration to “federalize” the mid-term elections, through various means. The administration’s efforts seem unlikely to survive legal challenge given that elections are run by individual states, not the federal government. But legal challenges are often seen by President Trump as political opportunities.

We end with Richard blasting FIFA (and its referees), our mutual appreciation of the athletic ability of the World Cup’s star players, and our stunningly insightful views on the upcoming Open Championship (professional golf’s “fourth major”). Long story short, we’re rooting for Cameron Young.

It arose out of a discussion we had on our most recent episode, which will be in your in-box shortly. Richard’s Substack newsletter, Home & Away, has been (and continues to be) an excellent source of realistic analysis of the Iran war, among other things. This one assesses two questions: (1) How we got to where we are?, and (2) what might be the best path forward?

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A Strategy for Iran: Back to the Drawing Board (July 13, 2026)

By Richard Haass.

Welcome to this special edition of Home & Away, one stimulated by a recent piece in The New York Times by David Sanger, “Bombing and a Tentative Accord Didn’t Work. Does Trump Have a Plan C for Iran?”

I would argue that as the United States has already tried three strategies in its war with Iran and come up short each and every time, the question is whether Trump has a Plan D. But who’s counting? The pertinent question is, what now?

To recap, President Trump began the war in late February in an attempt to trigger regime change in Iran. Military, clerical, and political leadership were all targeted, in some cases successfully. But the regime established in the 1979 revolution that ousted the American-backed Shah was more institutionalized and proved more resilient than many in the U.S. and Israeli governments understood. Any potential public uprising was ruthlessly repressed. Making matters worse, the leadership that emerged in the wake of the attacks was, if anything, more hard-line than what it replaced. You could say regime change was achieved, just not as intended.

Then, a new strategy emerged, one of intense bombardment meant to force Iran to capitulate and unconditionally accept U.S. and Israeli terms for war termination. That too failed, as Iran proved able both to absorb punishment and to mete it out by attacking its Arab neighbors and closing the Strait of Hormuz, a vital artery through which one-fifth of the world’s oil and gas passes on its way to customers worldwide.

The Trump administration retaliated with a counter-blockade, largely denying Iran use of the Strait. Fighting flared and eased, and the war evolved into something of a game of chicken, hinging on which side could better endure continuing military exchanges and the closure of the Strait.

That turned out to be Iran. All of which set the stage for a third strategy, as the Trump administration, facing growing dissatisfaction at home over higher gasoline prices, opted for diplomacy. Despite Israeli objections, it agreed to a Memorandum of Understanding (MOU) with Iran intended to extend and shore up a shaky ceasefire and reopen the Strait of Hormuz.

The thinking behind this third strategy was that the promise of increasing economic benefits and easing sanctions would persuade Iran’s new leadership to implement the MOU in full, embark on a more moderate path, and agree to more U.S. preferences.

It didn’t work out that way. The Trump administration, reflecting the business and real estate experience of the president and his two main negotiators, continues here and in other disputes to exaggerate the lure of economic incentives and underestimate the power of nationalism, pride, and anger. Administration officials were surprised, but certainly should not have been, by Iran’s demand that ships transiting the Strait use a channel off its coast rather than one off Oman’s; when some balked, Iran attacked the ships even though doing so put promised economic benefits at risk. Trump, describing Iran’s leadership as “scum” just weeks after praising them, ordered the U.S. military to attack additional military and industrial targets in Iran and declared the ceasefire over. Iran retaliated against U.S. bases in the region and again closed the Strait.

Diplomatic exchanges through third parties have resumed or inevitably will, and there are reports that Iran has communicated that the attack on shipping was unauthorized, carried out by a faction that opposed any normalization of ties with the United States. That may or may not be the case; what is certain is that the United States has to decide its next steps.

What would be folly would be to assume that a return to a ceasefire and the MOU could resolve things satisfactorily. It is not just that Iran may have difficulty disciplining its forces. It is also that the poorly negotiated and terribly worded MOU does not provide a satisfactory basis for proceeding. It grants Iran considerable influence over everyone’s use of the Strait of Hormuz as well as the ability (after 60 days) to collect tolls. It also eases economic sanctions up front and fails to resolve anything pertaining to Iran’s nuclear activities other than calling for negotiations. The MOU has nothing to say about Iran’s conventional military forces or its support for armed proxies.

But America’s dilemma also reflects the reality that its options are poor. Convoying ships in the Strait promises to be costly, dangerous, and inefficient. Seizing and holding Kharg Island would be difficult, incur casualties, and still not guarantee the Strait would be open to shipping. Attacking military and industrial targets in Iran has been shown to be ineffective; more of the same will not change things. Iran has demonstrated its ability to take a punch and to deliver two: it can shut down the Strait and it can attack its neighbors, putting their energy and water infrastructure at risk, a threat that, if carried out in full, would transform what has been a limited crisis into a global economic calamity. Which means U.S. attacks on Iran will necessarily remain limited in order to keep Iran’s retaliation limited…which, in turn, means U.S. military action will be more performative than decisive.

So, what to do?

The United States needs a new, long-term, comprehensive strategy, one designed to reduce Iran’s three principal sources of leverage: its control over the Strait of Hormuz, its ability to threaten its neighbors, and its pathway to developing a nuclear weapon, which, if it were to come to fruition, would give Iran enormous leverage throughout the region and beyond, grant it impunity to empower its proxies to conduct attacks against Israel and others, and quite possibly trigger a regional nuclear arms race. As turbulent as the Middle East has been and continues to be, such a future has the potential to make the past look like a picnic.

The good news is that Iran can be countered. First, the United States, working with both its regional partners and other allies, must accelerate efforts to reduce the strategic salience of the Strait of Hormuz. Such an undertaking should consist of multiple elements: increased production of oil and gas in the United States and other regions (especially the Western Hemisphere), adoption of measures to reduce demand for oil and gas, increased government support for alternative energy sources of every sort, construction of additional pipelines that bypass the Strait of Hormuz, and a commitment to expand and fill national strategic petroleum reserves as well as stockpiles of other vital materials that transit the Strait. Such efforts would reduce the price impact of closures of the Strait of Hormuz as well as what Iran could expect to gain from tolls and sales of its oil and gas.

Second, the United States, working with Ukraine, Israel, and others, should put into place enhanced defenses of local energy and water infrastructure against attacks by drones, missiles, cyber, or terrorism. Absent such effective defensive measures, we are unable to credibly threaten, much less carry out, attacks on Iran’s infrastructure – essential if we are to influence Iranian behavior.

Third, Iran cannot be allowed to develop a nuclear weapon. Ideally, this would be accomplished through diplomacy that would place limits on permitted Iranian activities and establish a mechanism (involving international inspectors) for verifying that Tehran is respecting these ceilings. Failing that, or should any dangerous activity be observed, Iran should understand the United States, Israel, and others would be prepared to use military force against suspected sites much as was done in June of last year.

Fourth, economic sanctions should be reimposed to impede Iran’s ability to sell oil on the open market. Such a policy limits the flow of revenues to Iran’s regime (revenues that have been and could be used for any and every purpose). Any easing of sanctions should be linked to real progress in any future nuclear negotiations. A complementary option would be to reimpose the counter-blockade on Iran (denying it revenue from energy sales and tolls) if the terms under which it is prepared to allow others to use the Strait prove to be intolerable.

Fifth and finally, the MOU should be scrapped altogether. It gives Iran formal cover for its efforts to control the Strait, provides it with much-needed resources, and does nothing to limit its nuclear activities, conventional arms production, or support for proxies. Someday a new accord might be worth signing, but that day will only arrive if Iran finds itself with diminished leverage over the Strait and with a much-reduced ability to threaten and hurt its neighbors.

It is important to keep in mind that economic shortcomings still constitute the principal weakness of the Iranian regime. There is no reason to give up on the notion that economic pressure can lead to policy moderation or conceivably even regime change down the road. Economic relief for Iran should thus be heavily and specifically conditioned.

The operative adjectives of the strategy outlined here are long-term and comprehensive. The only safe and effective way to pressure Iran is by steadily reducing the importance of the Strait and Iran’s ability to damage its neighbors. Until then, we will likely have to live with the reality that Iran has a large say over the use of the Strait. For a time, a majority of ships may need to use the channel that runs closest to Iran and pay a fee for the privilege if the objective is to keep the Strait open. This is far from an ideal outcome, but it is unrealistic to expect anything better to result from a misguided war of choice premised on a host of assumptions that were wrong.

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1. Bloomberg:

The US and Iran exchanged fresh strikes overnight into Monday as they continued their tit-for-tat attacks while issuing conflicting declarations over whether the Strait of Hormuz was open to shipping.

US Central Command said American forces carried out a new round of attacks to degrade Iran’s ability to threaten shipping in the narrow waterway. Dozens of targets were hit, including Iranian air-defense systems, coastal radar sites, and missile and drone capabilities, Centcom said Sunday in a post on X.

Tehran retaliated Monday with attacks on US allies in the Persian Gulf and beyond, targeting US bases in Kuwait, Bahrain and Jordan, according to Iranian state media outlets. The Islamic Revolutionary Guard Corps said earlier that it had intercepted two vessels it viewed as endangering shipping in Hormuz by proceeding along an “illegal route.”

The latest escalation extends a pattern of attacks and counterstrikes that has continued for about a week. The US attacks over the weekend marked one of the heaviest bombardments since a June agreement intended to halt the fighting, while Iran’s retaliation is also widening, targeting an increasing number of Arab states in the region. Oil prices rose on fears that renewed clashes could further disrupt flows through Hormuz, with global benchmark Brent trading 4.3% higher at over $79 a barrel as of 5:54 a.m. in London.

Centcom said over the weekend that its forces struck about 140 targets under orders from President Trump. (Source: bloomberg.com)

2. Bloomberg:

Treasury two-year yields climbed to their highest level since early 2025 as renewed tensions in Iran pushed up oil prices, fanning speculation that the Federal Reserve will need to raise interest rates to combat inflation.

The rate-sensitive two-year yield rose as much as three basis points to 4.24%, the highest since February 2025, while the benchmark 10-year yield added three basis points to 4.59%. Brent crude jumped more than 4% after the US and Iran exchanged fresh strikes, with the two sides offering conflicting statements on whether the Strait of Hormuz remains open.

The advance in Treasury yields reflects growing expectations that the Fed will need to raise rates sooner to rein in price pressures from the rebound in global energy prices and signs of a resilient US economy. Traders are almost fully pricing in a Fed rate hike in September, up from about a 66% probability a week ago, according to swaps compiled by Bloomberg. (Source: bloomberg.com)

3. Javier Blas:

In total, about 10% of the world’s refining capacity is probably out of operation currently, according to industry estimates. That’s about 8 million barrels a day of processing capacity, more than the fuel consumption of France, Germany, Italy, Spain and the UK combined. The longer the world’s refining capacity remains constrained, the longer the cost of fuels such as gasoline and diesel will remain elevated, even if the crude price remains low. With seasonal demand ramping up with the start of the Northern Hemisphere summer holiday, consumers are in for more pain. (Source: bloomberg.com)

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1. The Wall Street Journal:

Fighting between the U.S. and Iran intensified overnight, with the American military hitting a wide range of new targets and Tehran claiming it had launched attacks on several of Washington’s allies in the region.

The skirmishes represented a higher level of military activity between the two foes since a ceasefire went into effect last month and raised hopes of a lasting peace deal. President Trump declared the ceasefire over last week after Iran fired on ships heading through the Strait of Hormuz.

Now the two sides are locked in a stalemate over the strait, a waterway through which 20% of the world’s oil flowed before Iran effectively shut it down during the war. Trump administration officials have grown pessimistic about ongoing negotiations with Tehran and frustrated about Iran’s continued attacks on Hormuz shipping. On Friday, senior officials told reporters that a nuclear deal is increasingly unlikely and warned that there would be serious consequences if Iran didn’t guarantee safe passage of ships.

The White House wanted Iran to issue a statement declaring that the Strait of Hormuz is open and that it will stop attacking commercial vessels. Instead, the Revolutionary Guard declared the strait closed and took aim at yet another ship seeking to transit the waterway near the coast of Oman, a route that has been cleared and promoted by the U.S. military. (Source: wsj.com)

2. The Wall Street Journal:

For the Iranian regime, keeping a chokehold over the Strait of Hormuz has turned out to be more important than the tens of billions of dollars in sanctions relief from the Trump administration.

That is because Tehran is playing a long game. Iranian officials believe the country has finally emerged as a regional hegemon, after the U.S. and Israel failed to achieve their main goals in the war they unleashed in February. And, as long as Tehran cements this new status by securing permanent arrangements to control the vital waterway—and dominating the Persian Gulf economies along with it—then the rest, including American sanctions relief, will eventually follow.

“This is the only way: recognize the new Iranian order in the Strait of Hormuz,” warned Ebrahim Azizi, the head of the Iranian parliament’s national security commission. “The Strait of Hormuz will only open with ‘Iranian arrangements,’ not American threats,” added the parliament’s speaker and the lead negotiator with the U.S., Mohammad Bagher Ghalibaf.

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Two of the very best reporters at The New York Times, Maggie Haberman and Jonathan Swan, have written an important book about President Trump’s “second presidency”. The book, Regime Change, makes it abundantly clear that the 47th president is and will be far more consequential than the 45th.

There are any number of books that offer, or claim to offer, what you might call a Unified Theory of Trump. Regime Change does not do that. Instead, it provides an astonishingly well-reported account of the first ~14 months of Trump 2.0, from which you can draw your own conclusions.

The “highlights” of Trump 2.0 are reported out in remarkable detail, from the post-election transition period to the chaos of “Liberation Day” (the tariffs roll-out) to the president’s “gut” decision to join the Israelis in a “war of choice” against Iran. There’s a lot more in-between.

What the book makes clear is that Mr. Trump’s second presidency is not just disruptive; it’s a breach, not a break. It’s fair to say American politics and American foreign policy will never be the same.

The one big thing the authors say they were unable to “crack” in their reporting was the status of the president’s physical and mental health. On the one hand, he has enormous stamina and can be seen conversing with reporters in press gaggles almost daily. There is energy in the executive, to say the least.

On the other, his annual physical (in May of this year) required 22 medical specialists, his train of thought frequently veers off course, and the combination of his eighty years and the relentless pressure of the presidency is clearly taking its toll.

I have a rule for dinner parties at our home: If you’re going to talk about Trump, you have to pay for the privilege. The fee is $20. In this “edition” of The News Items Podcast, there’s no charge.

(The News Items Podcast, Episode #19, featuring Maggie Haberman and Jonathan Swan, co-authors of “Regime Change: Inside the Imperial Presidency of Donald Trump”. Recorded 9 July 2026. Produced by Dale Eisinger. You can find this podcast, and previous News Items podcasts, on most of the major platforms, including Apple, Amazon and Spotify.)

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1. Plan A:

AI companies are racing to build AIs that are smarter than humans in every way. In AI 2027, we predicted that this would result in either extinction or irreversible concentration of power. Plan A is our positive vision for what should happen instead. In this scenario, humanity delays the development of superintelligence until 2040, makes all AI research public, allows dozens of companies globally to catch up to the frontier, and intentionally enters a regime of mutually assured compute destruction. (Sources: ai-2027.com, ai-2040.com. Both ai-2027 and ai-2040 are worth reading in full.)

2. OpenAI has publicly released its flagship artificial intelligence technology, GPT-5.6 Sol, its most powerful model yet, alongside a new tool to assist with everyday office work. The new release, on Thursday, escalates the battle for A.I. dominance with the rival start-up Anthropic as the technology grows increasingly sophisticated. (Source: nytimes.com)

3. OpenAI and Google are selling their advanced AI models to Chinese tech giants blacklisted by the Pentagon, exposing a gap in Washington’s efforts to slow Beijing’s AI development. The US companies confirmed to the FT that they have been supplying AI services to Singapore-based subsidiaries of Alibaba, Baidu and Tencent, which the US government has accused of working with China’s military. After being contacted by the FT this week, OpenAI said it had last month suspended Alibaba-affiliated users’ access to its API, the software interface that lets developers remotely access AI models, over concerns about illicit use. (Source: ft.com)

4. Chart of the Day: The U.S., Europe and AI:

(Source: substack.com/@hannolustig)

5. As investors increasingly turn to artificial intelligence for help with everything from stock picking to risk management, JPMorgan Chase & Co. has been testing whether a model can do something more ambitious: allocate money itself. The early results are encouraging. Researchers at the bank built an array of AI-powered investing agents that shift between stocks and bonds depending on changing market conditions. In backtests spanning the past two decades, the best-performing system topped a traditional 60/40 portfolio — 60% in stocks and 40% in bonds — by 0.7 percentage point a year with lower volatility, while also beating JPMorgan’s own rules-based market regime model, according to strategists led by Thomas Salopek. (Source: bloomberg.com. linkedin.com)

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1. Two Charts:

(Source: unctad.org)

(Sources: asia.nikkei.com, openrouter.ai)

2. Broad Institute:

For researchers on the hunt for the genetic roots of disease, the cost of deep whole-genome sequencing makes it challenging to conduct large genetic studies involving thousands of participants, which are needed to reveal new genetic insights. So scientists at the Broad Institute came up with a clever approach, called the Blended Genome Exome (BGE), that lowers the cost of sequencing by 75 percent and is becoming one of the most commonly used sequencing methods at the Broad.

Now those researchers have published the first scientific paper describing BGE’s utility, showing that the method generates high-quality data at a much lower cost than the current gold-standard of deep whole-genome sequencing. The study, in Nature Genetics, is from scientists in the Stanley Center for Psychiatric Research at the Broad and Broad Clinical Labs.

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1. Anthropic:

As you read this sentence, circuits in your brain are adjusting your posture, controlling your breathing, and transforming lines and curves on the screen into recognizable words. Most of this processing is invisible to you. But some of what takes place in your brain you do have access to—an image that pops into your head, or a deliberate plan you make about where to go shopping. Neuroscientists and philosophers sometimes refer to the latter type of brain activity as “consciously accessible,” to distinguish it from all the other processing that goes on unconsciously. This activity has special properties: we can describe it, control it, and use it for deliberate reasoning, in contrast to all the automatic processing that goes on without our awareness.

In a new paper, we present evidence that a similar distinction has emerged in modern language models like Claude. We find that Claude has developed a small collection of internal neural patterns that, compared to all its other internal processing, play a special role.

We call the collection of these patterns the J-space—named after the technique we used to find them, involving a mathematical concept called the Jacobian. Each J-space pattern is linked to a particular word. But when one of these patterns lights up, it doesn’t mean the model is saying that word—just that the word is on its mind. If you’ve heard of language models having a “scratchpad” or “chain of thought”—text they write to themselves while reasoning—the J-space is something different. It operates silently, in the model’s internal neural activations, allowing the model to think about a concept without writing it down. Notably, the J-space wasn’t designed or programmed by us, but instead emerged on its own during Claude’s training process. (Source: anthropic.com. Italics mine.)

2. President Trump has said the US-Iran ceasefire is “over” following renewed military strikes between the two countries. Speaking at the Nato summit in Ankara, the US president told reporters: “As far as I’m concerned, it’s over.” The US president’s comments came after the US and Iran traded military strikes on Tuesday evening. The Pentagon said it was responding to attacks on ships by the Islamic republic in the Strait of Hormuz. US Central Command announced what it said were “powerful strikes against Iran”, hours after the Treasury revoked a general license allowing sales of Iranian oil. Iran’s Islamic Revolutionary Guard Corps said its forces had responded, with missile and drone strikes early on Wednesday targeting 85 sites at US military facilities. (Source: ft.com)

3. President Trump is “completely committed” to NATO, the alliance’s secretary-general Mark Rutte said on Wednesday, as leaders gathered for a summit in Ankara overshadowed by fraying transatlantic unity and the US president’s mercurial attitude to his allies. “He is completely committed to this. There is complete commitment of the United States to NATO,” Rutte told reporters as he arrived at the second day of the summit. His comments came hours after Trump threatened to remove all American troops from Europe and revived calls for the US to take control of Greenland. (Source: ft.com)

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