This week’s world-famous-news-haiku-competition™ is all about how gambling companies have had to make record payouts because World Cup players have been scoring so many pesky goals. Send me your entry—to haiku at cheddar dot com—by noon ET Thursday, for consideration by your Cheddar peers. (Don’t worry if you get a bounceback email. The mailbox is working, it’s just been inundated with haikus lately, thank Goodness!)

Matt Davis — Need2Know Chedditor

Table of Contents

What’s the stock market up to, eh?

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Companies mentioned in today’s newsletter

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Big Banks Explore Ways To Up Card Transaction Fees

Some of the largest financial institutions in the country are quietly exploring a major deal to bypass one of their most-disliked (by the banks…) federal regulations: Limits on debit-card transaction fees. Heavyweights including JPMorgan Chase $JPM ( ▲ 0.44% )  , Bank of America $BAC ( ▼ 0.07% )  , Wells Fargo $WFC ( ▼ 0.31% )  , and PNC Financial Services Group $PNC ( ▲ 0.33% ) have held preliminary, tentative discussions about acquiring STAR and Accel, two payment networks owned by the fintech firm Fiserv, the Wall Street Journal reports.

The motivation behind these talks is simple: Circumventing the 2010 Dodd-Frank Act’s Durbin amendment. It caps the interchange fees that banks with $10 billion or more in assets can collect from merchants on transactions routed through outside networks. However, banks are legally exempt from these caps if they own the underlying network infrastructure. The industry recently watched with envy when Capital One Financial $COF ( ▼ 1.75% )  acquired Discover Financial in a $50.6 billion deal, securing its own direct network to merchants and cutting out the middleman.

While a deal could reclaim billions in “lost revenue,” aka charge you a bunch more in card fees…bank executives are highly cautious. Several participating banks have already decided against moving forward, citing significant anxieties over political, merchant, and regulatory backlash if they attempt to upend the rules.

Proponents of the caps, alongside merchants, argue that lower fees keep prices down for consumers. Conversely, banks have long maintained that fee caps limit their ability to fund free checking accounts and debit-card rewards programs. Perhaps they could do that using the combined $100billion in net income the big four banks all made last year? Greedy piggies…

Poll: Voters Say Iran War Not Worth the Cost

A new Financial Times poll reveals that a majority of American voters are deeply skeptical of Donald Trump's military campaign in Iran. Conducted online by Focaldata among 1,795 registered voters, the survey shows that 58 percent of respondents believe the war has not been worth the cost. This widespread disapproval comes as the White House requests that Congress sign off on $67 billion in new federal spending to cover the expenses of the conflict to date.

The ongoing conflict is taking a significant toll on the president’s political standing just four months before the crucial November midterm elections. Only 36 percent of voters approve of Trump’s job performance overall, a figure that drops to 21 percent among political independents. This decline is heavily driven by domestic economic pain, as the war has pushed petrol and other consumer prices sharply higher. Furthermore, 44 percent of respondents believe the war has left the U.S. in a weaker position with Iran, compared to just 31 percent who feel it placed Washington on a stronger footing.

Voters are equally disillusioned with recent diplomatic efforts. While Washington and Tehran agreed to pause hostilities after a series of tit-for-tat strikes, two-thirds of voters believe the temporary memorandum of understanding will either make no difference or actually increase regional instability. Only one in five believe the deal will lead to peace.

The friction also extends to traditional alliances. Although Trump has attacked NATO as a "paper tiger" because European allies refused to join the campaign, 53 percent of voters believe the U.S. should remain in the alliance.

Still, he got that red card overturned in the World Cup, though, eh?

More Bubble Talk, Even in The Treasury

While the public face of the Trump administration remains bullish on AI, a draft report circulating inside the Treasury Department paints a far more cautious picture. Obtained by website NOTUS, the internal document reportedly warns of systemic risks in the AI market, drawing uneasy parallels to the dotcom bust of the early 2000s.

According to the report, career Treasury analysts fear that AI firms are so deeply embedded in the U.S. economy that missed productivity goals, financial shifts, or supply chain bottlenecks could trigger widespread economic shockwaves. If the AI sector falters, the draft warns that stock markets, private credit, chip manufacturers, and utilities would all feel the impact. The caution contrasts sharply with the public rhetoric of Treasury Secretary Scott Bessent, who praised tech firms for investing $750 billion in AI buildouts. Bessent enthusiastically asked, "Could we do at least that? Can we do maybe more?" while emphasizing that "the biggest risk to AI is China getting ahead of us."

The Treasury has tried to distance itself from the draft. A spokesperson dismissed the findings as unvetted, stating, "The official position of the Secretary and the U.S. Treasury is that Artificial intelligence will be a key driver of America’s new Golden Age." The spokesperson insisted AI has the potential to "deliver unprecedented productivity gains, expand economic opportunity, and empower American workers and businesses."

However, warnings of an artificial bubble are gaining traction on Capitol Hill. Senator Elizabeth Warren, pushing for stricter financial disclosures, cautioned that "AI and Big Tech companies are increasingly reliant on shadowy forms of debt and balance sheet magic to fund their multi-trillion dollar AI buildouts." Warren emphasized that her bill aims to "protect our economy from another preventable financial crisis."

Meanwhile Wall Street’s expectations for corporate profits are surging at their fastest rate since the post-pandemic rebound, fueling intense fears of an “earnings bubble,” the Financial Times reports. Driven by a resilient economy and the AI boom, analysts forecast a massive 25% increase in S&P 500 earnings.

However, investment experts caution that these soaring estimates are unsustainable. GMO's Ben Inker warned reporters that forecasts are rising at an "exceedingly high rate", while Michel Lerner of UBS HOLT said the likelihood of maintaining such profits is "incredibly low." These elevated expectations leave a "very narrow margin of safety" if earnings fall short, he said.

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