What matters today
1 Vance–Oz freeze $259M in Minnesota Medicaid — Trump’s “war on fraud” begins hours after State of the Union; 14 programs flagged including autism care and transport; Walz: “This has nothing to do with fraud”; Oz gives Minnesota 60 days to propose corrective action plan; 1.2 million Minnesotans depend on Medicaid; could expand to California, Maine, Massachusetts
2 Epstein reckoning hits Ivy League — Larry Summers resigns from Harvard (50-year career); banned for life from American Economic Association; Columbia’s Richard Axel steps down; Yale bars David Gelernter; Hillary Clinton deposition today, Bill Clinton tomorrow; bipartisan House investigation accelerating
3 Pentagon removes Joint Staff director after 90 days — VAdm Fred Kacher removed by Chairman Gen. Dan Caine; no reason given; sources say “not the right fit”; latest in pattern of military leadership purges under Hegseth; comes as US builds largest Middle East force since 2003; no successor named
4 FBI raids LAUSD superintendent — search warrants served at Alberto Carvalho’s home and office; linked to failed $6M AI chatbot deal with AllHere; Florida home also raided; affidavit sealed; LAUSD board meets behind closed doors today; Carvalho vocal Trump immigration critic
5 Carney launches Indo-Pacific trade pivot — PM departs today for India, Australia, Japan through Mar 7; “immense” range of deals expected including nuclear power, oil, critical minerals; addressing Australian Parliament (first Canadian PM in 20 years); defence spending targeting 5% GDP by 2035
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Market Snapshot
Market Snapshot
Thursday, February 26, 2026 — intraday / latest available
| Index / Pair | Level | Δ | Signal |
| S&P 500 | 6,891 | −0.8% | ▼ 330 stocks rose but Nvidia selloff dragged index lower |
| Nasdaq 100 | 22,846 | −1.5% | ▼ Nvidia −5%, Broadcom/Lam/Applied Materials all −6%+ |
| Dow Jones | 49,407 | −0.2% | ▶ IBM +3.8%, UnitedHealth +2.9% offset chip drag |
| TSX Composite | ~25,600 | +0.3% | ▲ Energy and materials outperform; Carney trade pivot |
| USD/CAD | 1.373 | flat | ▶ Loonie steady; BOC at 2.75%, next decision Mar 12 |
| 10Y Treasury | 4.05% | −6bps | ▼ Flight to safety on tech rout + geopolitical risk |
| Gold | $5,173/oz | −0.6% | ▶ Pullback from $5,250; JP Morgan targets $6,300 YE |
| WTI Crude | $66.22 | −0.1% | ▶ Iran premium persists; geopolitical risk floor under crude |
| Bitcoin | $68,112 | +0.2% | ▶ Holding above $68K despite equity risk-off |
| 30Y Mortgage | 5.87% | −89bps YoY | ▲ Down from 6.76% a year ago; Fed cuts filtering through |
02
Conflict & Stability Tracker
Conflict & Stability Tracker
Critical · Domestic
Vance–Oz Medicaid “War on Fraud”
$259.5M in Medicaid reimbursements withheld from Minnesota. Vance and CMS Administrator Oz announced the freeze hours after Trump’s SOTU declared a “war on fraud.” 14 programs flagged as high risk including autism care and non-medical transport. Oz: “If Minnesota fails to clean up the systems, the state will rack up a billion dollars of deferred payments this year.” Gov. Walz: “This has nothing to do with fraud — the agents Trump allegedly sent are shooting protesters and arresting children.” AG Keith Ellison introduced expanded fraud prevention legislation. 1.2 million Minnesotans depend on Medicaid. Trump singled out Somali community — a claim lacking evidence. Could expand to California, Maine, Massachusetts.
Critical · Epstein Reckoning
Ivy League Purge + Clinton Depositions
Larry Summers resigns from Harvard after 50 years — banned for life from American Economic Association. Columbia Nobel laureate Richard Axel steps down. Yale bars David Gelernter. Harvard places Martin Nowak on leave. DOJ and House Oversight documents revealed Summers visited Epstein’s island during honeymoon, corresponded until day before 2019 arrest. Hillary Clinton deposition to House Oversight today; Bill Clinton tomorrow. Both agreed after House moved toward contempt. Bipartisan Massie-Khanna investigation continuing. Victim advocates: “another moment of reckoning.”
Tense · Pentagon
Joint Staff Director Fired After 90 Days
VAdm Fred Kacher removed as Director of the Joint Staff by Chairman Gen. Dan Caine. No official reason given; sources say “not the right fit.” Kacher assumed the role Dec 5, former Seventh Fleet commander and Naval Academy grad. The position manages day-to-day Joint Staff operations and sits in on key meetings. No successor named. Comes amid Hegseth’s ongoing military leadership purge: fired previous CJCS Gen. C.Q. Brown, ordered Col. David Butler ousted, gathered top generals for “resign if uncomfortable” speech. CNN: Caine and Hegseth have disagreed over some removals. Military building largest Middle East force since 2003.
Watching · Midterm Redistricting
The Map Wars Before November
Largest mid-decade redistricting since the 1960s. Texas SCOTUS-approved GOP map could net +5 seats. California Prop 50 counter: +5 Dem seats. Missouri, North Carolina +1 each for GOP. Virginia, Florida, Maryland, Kansas still in play. Cook Political: redistricting has “eviscerated the competitive range of districts.” House currently 218R-213D with 4 vacancies. Filing deadlines approaching. Both parties accuse other of rigging 2026 midterms.
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Fast Take
Fast Take
MEDICAIDVance and CMS Administrator Oz freeze $259.5M in Medicaid reimbursements to Minnesota — first salvo in Trump’s “war on fraud” declared at SOTU. 14 programs flagged as high-risk including autism care, non-medical transport, and Housing Stabilisation Services (discontinued). Oz gives Walz 60 days for corrective action plan or face $1B deferred this year. Minnesota AG Ellison introduces expanded Medical Assistance Protection programme. State DHS audit found $1B in Medicaid funding vulnerable to fraud. Report: DHS put “compassion over compliance” on fraud prevention dating back to 1970s. Vance “quite confident” of legal authority despite Congressional appropriations questions. Trump singled out Minnesota Somali community in SOTU — attributed $19B in fraud, a claim that lacks evidence. Could expand to other Democratic-led states.
EPSTEINLarry Summers resigns from Harvard after 50 years, ending a career as Treasury Secretary, Harvard president, and Obama economic advisor. Banned for life from American Economic Association. Emails showed years of correspondence with Epstein including visits to his private island during honeymoon, romantic advice, and sexist comments. Columbia’s Richard Axel (Nobel laureate) steps down as Zuckerman Institute co-director. Yale bars computer science professor David Gelernter. Harvard also places biology professor Martin Nowak on leave. Hillary Clinton deposition to House Oversight today; Bill Clinton tomorrow. Both agreed after House moved toward contempt vote.
PENTAGONVAdm Fred Kacher removed as Director of the Joint Staff after 90 days. Chairman Gen. Dan Caine announced the decision; Joint Staff spokesperson confirmed Kacher will “return to service” with the Navy. Reuters: one source said he was “not the right fit.” No official trigger cited. The director manages day-to-day Joint Staff operations and sits in on key Pentagon meetings — considered one of the most important three-star posts. No successor named. Kacher was former Seventh Fleet commander, Naval Academy superintendent, Harvard Kennedy School graduate. Latest in Hegseth’s military leadership purge: fired CJCS Gen. C.Q. Brown last year, ordered Col. David Butler ousted, gave generals “resign if uncomfortable” speech in September. CNN: Caine and Hegseth have at times disagreed over removals. Shakeup comes as Pentagon builds largest Middle East force since 2003.
FBIFBI served search warrants at LAUSD Superintendent Alberto Carvalho’s San Pedro home and downtown headquarters. Additional raid at Florida home linked to failed AI chatbot company AllHere. AllHere CEO previously charged with fraud over $6M LAUSD contract for AI bot “Ed.” Affidavit sealed. ABC News: investigation is “white-collar,” not immigration-related. LAUSD Board of Education meets behind closed doors today. Carvalho has led nation’s 2nd-largest district (500K+ students) since 2022; was vocal critic of Trump immigration enforcement in schools.
CANADAPM Carney departs today for India-Australia-Japan tour (through Mar 7). India’s high commissioner: “immense” range of deals expected spanning nuclear power, oil, critical minerals, AI, quantum computing. Repairing ties after Trudeau-era Nijjar crisis. CEPA negotiations targeting $70B bilateral trade by 2030 (up from $30.8B). Will address Australian Parliament — first Canadian PM in 20 years. Defence Industrial Strategy: 50% defence export increase; 5% GDP target by 2035; $180B procurement opportunities over decade.
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Developments to Watch
Developments to Watch
1. Vance’s “War on Fraud”: $259 Million Frozen, Minnesota in the Crosshairs
Hours after Trump declared a “war on fraud” in his State of the Union and appointed JD Vance to lead it, the VP and CMS Administrator Mehmet Oz announced they would withhold $259.5 million in Medicaid reimbursements from Minnesota. The freeze targets 14 programs deemed high-risk, including autism care, non-medical transport, and Housing Stabilisation Services, which CMS has discontinued entirely. Oz said Minnesota had 60 days to propose a comprehensive corrective action plan or face up to $1 billion in deferred payments this year. The crackdown builds on the Feeding Our Future scandal — the largest pandemic-era fraud case, in which 79 people have been charged. A new state audit found $1 billion in Medicaid funding vulnerable to fraud, with a report citing a “too trusting mindset” within DHS and “compassion over compliance” messaging that goes back to the 1970s. Gov. Tim Walz pushed back hard: “This has nothing to do with fraud. The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children. His DOJ is gutting the US Attorney’s Office and crippling their ability to prosecute fraud.” AG Keith Ellison introduced an expanded Medical Assistance Protection programme. Vance claimed the administration has legal authority to withhold congressionally appropriated funds — a constitutional assertion that is already drawing scrutiny. Trump singled out the Somali community during SOTU and attributed $19 billion in fraud to Minnesota, a claim that lacks evidence. The precedent matters: Oz specifically mentioned expanding the effort to California, Maine, and Massachusetts.
2. The Epstein Ivy League Reckoning: From Emails to Exits
Larry Summers’ resignation from Harvard marks the most significant professional casualty of the Epstein file releases. The former Treasury Secretary, Harvard president, and Obama economic advisor held the university’s highest faculty rank — “University Professor” — for nearly 20 years. His departure was triggered by DOJ and House Oversight documents showing he corresponded with Epstein for years after the 2008 guilty plea, visited Epstein’s Caribbean island during his honeymoon, consulted Epstein for romantic advice about a woman he was mentoring (whom he referred to in emails using a racial slur), and maintained contact until the day before Epstein’s 2019 arrest. The Boston Globe was preparing to publish details of additional undisclosed financial ties when Summers announced his resignation. He’d already been banned for life from the American Economic Association and resigned from OpenAI’s board, Bloomberg, the NYT, and the Center for American Progress. The wave is spreading: Columbia’s Nobel laureate Richard Axel stepped down; Yale barred professor David Gelernter; Harvard placed biologist Martin Nowak on leave again. Today, Hillary Clinton provides a deposition to the House Oversight Committee on Epstein; Bill Clinton follows tomorrow. Both agreed after the House moved toward contempt charges. Victim advocates say the reckoning should have come sooner.
3. Pentagon’s Revolving Door: Joint Staff Director Fired After 90 Days
Vice Admiral Fred Kacher’s removal as Director of the Joint Staff after just 90 days is the latest in a cascading series of military leadership purges under Defence Secretary Pete Hegseth. Kacher assumed the role on December 5, 2025, coming off a distinguished 36-year career that included commanding the Japan-based Seventh Fleet, leading the Naval Academy, and earning a master’s from Harvard’s Kennedy School. The director manages the day-to-day operations of the Joint Staff and sits in on the Pentagon’s most sensitive meetings — it is traditionally a stepping stone to four-star command. Reuters reported that sources said Kacher was “not the right fit,” but no specific trigger was cited. Chairman of the Joint Chiefs Gen. Dan Caine, who made the decision, praised Kacher’s service but offered no explanation. No successor has been named. The removal fits a pattern: Hegseth fired previous CJCS Gen. C.Q. Brown last year, ordered Army Secretary Driscoll to oust Col. David Butler, and in September gathered his top generals to deliver an ultimatum — “If the words I’m speaking today are making your heart sink, then you should do the honorable thing and resign.” CNN reported this week that Caine and Hegseth have at times disagreed over some of the removals. The timing is especially fraught: the Pentagon is building its largest Middle East force since 2003 amid escalating tensions with Iran. Having no director of the Joint Staff during a potential military escalation raises readiness concerns at the highest level of the command structure.
4. FBI Raids LAUSD: AI Chatbot Fraud and Political Crossfire
The FBI’s search of Superintendent Alberto Carvalho’s home and office sits at the intersection of AI hype, education spending, and political tension. AllHere, the now-bankrupt company whose $6M chatbot contract is at the centre of the investigation, was supposed to build “Ed” — an AI-powered personal assistant for students and parents. Carvalho had touted it as a breakthrough. The company’s CEO was later charged with fraud, and AllHere collapsed, laying off all employees after spending LAUSD’s $3M advance. The FBI also raided a Florida home belonging to someone linked to AllHere who claims she is owed $630,000 in commission. ABC News reports the case is “white-collar” and not immigration-related — a notable distinction given Carvalho’s public clashes with the Trump administration over immigration enforcement in schools. The DOJ also recently intervened in a federal lawsuit accusing LAUSD of discriminating against white students. Whether the raid is purely about financial fraud or carries political undertones will be determined by what comes out of that sealed affidavit. The LAUSD board meets behind closed doors today to discuss Carvalho’s future.
5. Carney’s Indo-Pacific Gambit: Canada Builds a Post-American Trade Architecture
Mark Carney’s three-nation tour (Feb 26–Mar 7) represents the most ambitious Canadian trade diversification in a generation. India’s high commissioner to Canada says an “immense” range of deals will be signed, spanning nuclear power, oil, critical minerals, AI, quantum computing, and education. The trip resets a relationship shattered under Trudeau after the Nijjar assassination allegations — Carney and Modi met at the G20 in November 2025 to formally launch CEPA negotiations targeting $70B in bilateral trade by 2030. In Australia, Carney will address both houses of Parliament (first Canadian PM in 20 years); in Japan, talks with PM Takaichi cover clean energy, manufacturing, and food security. Waterloo political scientist David Welch: “Canada’s stock has risen dramatically globally since the Davos speech.” But he adds: “Whether he comes back with deals that do significantly enhance Canada’s economic or security relationship, that remains to be seen.” The Defence Industrial Strategy (announced Feb 17) sets a 5% GDP target by 2035, aims for 50% defence export growth, and positions $180B in procurement opportunities over the next decade.
6. Nvidia’s $68 Billion Problem: Record Quarter, 5% Stock Drop
Nvidia posted fiscal Q4 revenue of $68.1B (beating by $2B), data centre revenue of $62.3B (+75% YoY), and guided Q1 at $78B — $5.4B above consensus. Full-year revenue hit $215.9B (+65%) with $120.1B in net income. Free cash flow doubled to $34.9B. CEO Huang confirmed Rubin GPU samples are shipping now with 10x inference cost reduction. Meta signed a multiyear deal for millions of GPUs. Yet the stock fell 5% — worst day since April — because perfection is the new baseline. The broader AI ecosystem sold off hard: Broadcom, Lam Research, Applied Materials all fell 6%+. Software sector is under siege (IGV ETF −10% in February). Huang pushed back: “I think the markets got it wrong.” Salesforce rose 2% on an earnings beat, offering rare AI optimism outside chips. White House hosting March 4 “Rate Payer Protection Pledge” summit — tech companies must shoulder data centre power costs rather than passing them to households.
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Sovereign & Credit Pulse
Sovereign & Credit Pulse
| Indicator | Value | Context |
| US Fed Funds Rate | 3.50–3.75% | 92% pricing for hold at Mar 18 FOMC; next cut expected mid-2026 |
| US Q4 2025 GDP | 1.4% | Slowdown from prior quarters; tariff drag beginning to bite |
| Initial Jobless Claims | 212K | Below 215K estimate; continuing claims dropped 31K to 1.833M |
| BOC Rate | 2.75% | Next decision Mar 12; market pricing for hold |
| Canada Defence Target | 5% GDP by 2035 | Currently ~2% ($63B); $180B procurement pipeline over 10 years |
| 30Y Mortgage Rate | 5.87% | Down from 6.76% YoY per Zillow; 15Y at 5.37% |
| Section 122 Tariff | 10% | Effective Feb 24; Trump announced 15% but no formal order; expires ~mid-Jul |
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Power Players
Power Players
JD Vance — Vice President now leading Trump’s “war on fraud” — announced hours after SOTU. First target: $259.5M Minnesota Medicaid freeze. Claims legal authority to withhold congressionally appropriated funds. “Inherent in [spending] is making sure it only goes to the people Congress says it should go to.” Portfolio now includes TikTok rescue, One Big Beautiful Bill, and government-wide fraud crackdown. Signalled expansion to California, Maine, Massachusetts. Building a record for 2028 that combines fiscal hawk credentials with executive muscle.
Larry Summers — Former Treasury Secretary ending a 50-year Harvard career over Epstein ties. Banned for life from American Economic Association. Resigned from OpenAI board, Bloomberg, NYT, Center for American Progress. Emails showed Epstein island visit during honeymoon, romantic advice-seeking, and continued correspondence until day before 2019 arrest. Victim advocates question why Harvard allowed him to resign rather than firing him. Boston Globe was about to publish additional undisclosed financial ties when he announced departure.
Mark Carney — Canadian PM departing today for most ambitious trade diversification in a generation. India-Australia-Japan tour follows Davos speech that “raised Canada’s stock dramatically globally.” Resetting India ties after Nijjar crisis; targeting $70B bilateral trade by 2030. Defence Industrial Strategy positions Canada as serious NATO player for first time: 5% GDP target, $180B procurement pipeline, 50% defence export growth.
Alberto Carvalho — LAUSD Superintendent at centre of FBI investigation linked to failed AI chatbot deal. Has led nation’s 2nd-largest school district since 2022; was unanimously reappointed in 2025. Born in Portugal; former undocumented immigrant who became Miami-Dade superintendent for 14 years. Vocal Trump immigration critic. Board meets behind closed doors today to discuss his future while sealed affidavit remains secret.
Pete Hegseth — Defence Secretary continuing to reshape Pentagon leadership. Latest move: VAdm Fred Kacher removed as Joint Staff Director after 90 days. Previous firings include CJCS Gen. C.Q. Brown, Col. David Butler, and multiple other senior officials. September speech told generals to “resign if uncomfortable.” CNN reports he and Chairman Caine have clashed over some removals. Overseeing largest Middle East military buildup since 2003 while simultaneously hollowing out the command structure meant to oversee it.
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Regulatory & Policy Watch
Regulatory & Policy Watch
Epstein Investigations Accelerating: Hillary Clinton deposition underway in Chappaqua; opening statement: “I do not recall ever encountering Mr. Epstein.” Accused Republicans of conducting probe “designed to protect one political party” and distract from Trump’s own Epstein ties. Comer expects “long deposition”; Bill Clinton tomorrow (“even longer”). Bill Gates apologised to Foundation staff for Epstein ties, admitted affairs with two Russian women Epstein used as blackmail leverage. Harvard, Columbia, Yale all taking action against faculty. DOJ document releases continuing. Bipartisan Massie–Khanna investigation maintaining rare cross-party momentum.
AI Data Centre Power Policy: White House hosting March 4 “Rate Payer Protection Pledge” summit. Tech companies expanding compute must shoulder incremental power costs. Announced during Trump SOTU. Local backlash building where data centres collide with utility constraints. AI buildout entering phase where energy procurement becomes gating factor alongside chips. Nvidia CFO Kress: $3–4 trillion in annual AI infrastructure investment possible by 2029–30.
Canada Defence Industrial Strategy: Announced Feb 17; aims to increase defence exports 50%; $180B procurement + $290B capital investment over 10 years. New Defence Investment Agency established. Global Affairs Canada’s Defence Exports Division leading commercial efforts. Spending at ~2% GDP ($63B), targeting 5% by 2035 per NATO pledge. Carney’s Indo-Pacific tour will test whether the strategy translates into actual orders.
Mid-Decade Redistricting Status: Texas +5 GOP seats (SCOTUS approved); California +5 Dem (Prop 50); Missouri, North Carolina +1 each GOP; Utah +1 Dem via court order. Still in play: Florida (GOP infighting), Virginia (Dem amendment process), Maryland, Kansas, Illinois. Net position: GOP ~+9 seats, Dems ~+6. Filing deadlines approaching. VRA case at SCOTUS could reshape what’s legally possible.
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Calendar & Watchlist
Calendar & Watchlist
| Date | Event |
| Feb 26 | Hillary Clinton Epstein deposition (Chappaqua); LAUSD board closed session on Carvalho; Minnesota 60-day Medicaid corrective action deadline begins; Carney departs for India |
| Feb 27 | Bill Clinton Epstein deposition; Carney in Mumbai; US PCE inflation data |
| Mar 1–2 | Carney-Modi bilateral talks in New Delhi; CEPA negotiations |
| Mar 4 | White House “Rate Payer Protection Pledge” AI/data centre summit |
| Mar 3–5 | Carney addresses Australian Parliament in Canberra — first Canadian PM in 20 years |
| Mar 12 | Bank of Canada rate decision — market pricing for hold at 2.75% |
| Mar 18 | Federal Reserve FOMC decision — 92% pricing for hold at 3.50-3.75% |
| Nov 3 | 2026 midterm elections — redistricting battle determines the map |
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Bottom Line
Bottom Line
Today’s brief reads like a stress test for American institutions on every front simultaneously. In Washington, the Vice President is weaponising Medicaid reimbursements against a blue state — $259 million frozen, 1.2 million people on the line — while claiming the constitutional authority to withhold funds that Congress already appropriated. At the Pentagon, the Director of the Joint Staff has been fired after 90 days with no explanation and no successor, the latest in a pattern of military leadership purges happening at the exact moment the US is building its largest Middle East force in two decades. At Harvard, Columbia, and Yale, the Epstein reckoning is dismantling careers that spanned five decades and two presidencies, while in Chappaqua Hillary Clinton tells the House Oversight Committee she has “nothing to add” about a man whose files mention her name 700 times, and Bill Gates admits to affairs with Russian women used as blackmail leverage. In Los Angeles, the FBI is raiding the superintendent of the nation’s second-largest school district over a failed AI chatbot, while that same superintendent fights the Trump administration on immigration enforcement. And Mark Carney is doing something no Canadian PM has attempted in a generation: building an entirely new trade architecture that assumes the US can no longer be relied upon. Nvidia posted the most impressive corporate quarter in tech history and the stock fell 5%, because even $68 billion in revenue isn’t enough when perfection is the baseline. The common thread is accountability — or the selective application of it. Vance demands accountability from Minnesota while pardoning fraudsters. Hegseth fires generals for not being the “right fit” while building toward a war. The Epstein investigation compels testimony from a woman who says she never met the man while the current president’s own name appears thousands of times in the same files. The question for November’s midterms is whether any of these reckonings will matter more than the price of eggs.