Berenson: Just How Insane Did Democrats Become On Immigration?

Authored by Alex Berenson via Unreported Truths,

Almost six years ago, Democrats published the world’s longest political suicide note — their 2020 election platform on immigration.

CREATING A 21ST CENTURY IMMIGRATION SYSTEM has now vanished from the Democratic Party Website. But the Internet is forever, and the archived document remains easily findable. It makes a fascinating read.

In almost 2,000 words, the platform does not mention “border security” once. It does use the word “illegal” — referring to “President Trump’s illegal, chaotic, and reckless changes” to immigration. “Undocumented” comes up once too, in a promise to offer citizenship to “millions of undocumented workers, caregivers, students, and children.”

Among the platform’s other high notes:

We will protect and expand the existing asylum system and other humanitarian protections… Democrats will end Trump Administration policies that deny protected entry to asylum seekers… we will end prosecution of asylum seekers at the border and policies that force them to apply from “safe third countries,” which are far from safe.

We will also eliminate unfair barriers to naturalization…

Democrats believe family unity should be a guiding principle for our immigration policy. We will prioritize family reunification for children still separated from their families…

[W]e will end workplace and community raids. We will protect sensitive locations like our schools, houses of worship, health care facilities, benefits offices, and DMVs [Note: this may be the first time anyone has ever called a DMV office a “sensitive” place] from immigration enforcement actions…

We believe detention should be a last resort, not the default. Democrats will prioritize investments in more effective and cost-efficient community-based alternatives…

—

(You want reckless? We’ll give you reckless!)

(SOURCE)

—

In other words: Come on in. The water’s fine.

The platform promises an interlocking series of guarantees and policy changes that would not merely reduce but as a practical matter end any restrictions against immigration, legal or otherwise.

Basically, the Democratic Party vowed that if it ran the federal government, it would open American borders to anyone and everyone in the world who could reach them.

The asylum promises were especially important.

As even the “American Immigration Council” — which despite its anodyne name is funded by immigration lawyers and relentlessly pushes open borders — has explained:

Since the second term of the Obama administration, however, U.S. asylum policy has become hopelessly entangled with border management. As part of global displacement challenges, many more people than ever before started coming to the United States to request asylum; at the same time, those people came from places beyond Mexico and had more complex needs than the working-age adults who had made up most migration in the past.

“More complex needs” is a polite way to say “people uninterested in working.”

The Democratic platform explicitly encouraged those arrivals. All they had to do was make an asylum claim, with or without credible evidence. How could border officials possibly check their stories? At that point they would be allowed in — and would not face any meaningful enforcement, ever.

—

Given these incentives, it is no surprise immigrant caravans started moving north only weeks after Election Day in 2020 — even before Joe Biden was officially sworn in.

And the flood continued, as migrants very quickly realized the Democrats had meant every word. They understood they would be greeted with open arms — and checkbooks. An increasingly professionalized industry of smugglers emerged to organize and transport them.

Supply creates its own demand, whatever the product.

In January 2023, the Biden Administration took the inevitable final step, a creating what it called a “Humanitarian Parole Program.” The plan allowed in another 360,000 migrants a year from Cuba, Haiti, Nicaragua, and Venezuela without even requiring them to reach the southern border or have any legal basis for admission. If they could afford a plane ticket and find someone — anyone — in the United States to sponsor them, they could fly in.

The goal of the Bidenites was nakedly political. They hoped to make the border look better. But as a practical matter the program eliminated the last barrier to entry — that would-be migrants physically arrive at the border. Even the 2020 Democratic platform hadn’t (explicitly) gone that far.

—

(Sometimes the truth, like the devil, is in the details. Help me explain them.)

How the Democrats got to this point is its own story, and worth exploring. So is the question of what happens next.

But for now it is simply worth understanding that the collapse of any immigration restrictions was a feature, not a bug. Nearly 10 million people came to the United States under the Biden Administration — the largest surge either in raw numbers or as a percentage of the population at least since the Civil War.

The only surprise is that the total wasn’t even higher.

Tyler Durden Mon, 01/05/2026 - 08:55

Meet Mamdani's Biden Expats

Authored by David Dayen via prospect.org,

Last week, Zohran Mamdani was sworn in as the 111th mayor of New York City. This would have been scarcely thought possible just one year ago. The spirit with which Mamdani organized and beat an avatar of the state political establishment—twice—sustained progressives during the long winter of 2025 and provided some hope that charisma, expert use of modern communications, and a laser focus on the cost of living could produce a winning formula.

Sam Levine speaks to the press after being appointed by New York City Mayor-elect Zohran Mamdani as the incoming commissioner of the NYC Department of Consumer and Worker Protection. Credit: Derek French/SOPA Images/Sipa USA via AP Images

But as campaigning shifts to governing, those skills in isolation are unlikely to enable Mamdani to solidify public goodwill. The experience of the past several years, with presidents of both parties, has reinforced that delivering tangible results that people can feel is the only thing that earns chief executives lasting support. Taking on fights and naming villains and demonstrating who you care about can get you far, but that must be accompanied by follow-through.

That reality makes Mamdani’s choices of people implementing his agenda quite interesting. Increasingly, he has turned to refugees from the Biden administration who (too quietly) carried out some of the more effective pieces of the former president’s agenda. New York City will have a Biden cabinet member in a deputy mayor role, and a top consumer protection official leading a local agency. Lina Khan, the former Federal Trade Commission chair, co-chaired Mamdani’s transition team and may have a role in his government; that is to be determined, sources tell the Prospect.

The more conventional trajectory for these kinds of public officials after a presidential term is congressional or statewide elected office, or in the worst-case scenario, a high-paying position at one of the entities they used to regulate. That these individuals would step down from the U.S. executive branch to municipal management speaks to how much left-wing populists want to help Mamdani succeed and are thrilled by a government that leads with concern for its working-class constituents.

“It’s something I really felt like I had to do,” said Julie Su, the acting labor secretary for nearly two years under Biden, who will serve in the new position of deputy mayor for economic justice, something she relished. “Not economic development, not economic growth. Justice! The idea that you can care about just outcomes is huge, and that it’s the responsibility of government to make that happen.”

The Biden expats have an important role in the Mamdani administration. Much of his first-term agenda, from universal child care to faster fare-free bus service, hinges on getting the necessary funding through higher taxes on the wealthy. Functionally speaking, that battle will be fought in Albany, against a skeptical governor and the bureaucracy of the legislature. But existing laws on the books give Mamdani the opportunity to make immediate progress through rigorous enforcement, buying time and building momentum for the bigger fights to come.

Take Sam Levine’s new role as head of the Department of Consumer and Worker Protection (DCWP). Levine was the lead consumer protection official at Khan’s FTC, and since that ended he has engaged in research about the increasing sophistication of technology-fueled pricing, including an excellent report about how companies use loyalty cards to entice customers and scrape their data to use in maximizing profits.

Tyler Durden Mon, 01/05/2026 - 08:45

Stocks, Gold, Bitcoin All Jump As Venezuela Concerns Outweighted By AI Optimism

Global stocks, US futures, gold, the dollar and bitcoin all rose after the purge of Venezuela’s President Nicolas Maduro fanned geopolitical risk, while renewed momentum in the AI trade powered tech heavyweights in Asian hours. As of 8:15am ET, S&P futures were up 0.3% while Nasdaq futures gained 0.6%, with chip stocks such as AMD, Micron Technology and Intel gaining more than 3% in premarket trading. . In Europe, the Stoxx 600 rose 0.4% and was on course for a record close with most of the upside coming from a handful of sectors. Tech stocks are leading, as they did in Asia overnight. Spot gold advanced nearly 2% to climb above $4,410 an ounce, while silver jumped more than 3%. A gauge of the dollar headed for its biggest gain in two weeks. The US economic calendar includes December ISM manufacturing at 10am; ahead this week are S&P Global US services PMI, ADP employment change, ISM services index, JOLTS job openings, factory orders and December employment. No Fed speakers are scheduled for Monday; Richmond Fed’s Barkin is set to speak on the economic outlook on Tuesday.

In premarket trading, Mag 7 stocks are mostly green (Tesla +1.5%, Nvidia +1.5%, Amazon +0.4%, Alphabet +0.2%, Microsoft +0.1%, Apple -0.2%, Meta -0.1%).

• Energy names including Chevron (CVX +6%) and Baker Hughes (BKR +6%) are rallying after President Donald Trump said a team of US officials will “run” Venezuela and that Washington requires “total access” to the country, including its oil reserves.
• Gold stocks, including Newmont (NEM +1.7%) and Barrick Mining (B +1.8%) are higher as precious metals advance while investors weigh elevated geopolitical risks.
• Memory and semiconductor equipment stocks rise amid continued optimism over the rollout of AI. Micron (MU) +3%, and Sandisk (SNDK) +4%
• Centene (CNC) rises 1.8% and Oscar Health (OSCR) gains 3% after Barclays upgraded both health insurance names. Barclays writes that Centene has “attractive” margin upside from the Affordable Care Act exchange, while Oscar is “priced attractively and the market is currently over-discounting the negative outcomes from expiring subsidies.”
• Estee Lauder (EL) gains 4% after Raymond James analyst Olivia Tong raised her recommendation on the beauty company to strong buy. Her price target of $130 is the highest of all analysts tracked by Bloomberg.
• Fortive Corp. (FTV) falls 1.5% premarket after Mizuho Securities analyst Brett Linzey cut the recommendation on the industrial technology company to underperform, expecting “a slow start to ‘26 across more than half of its portfolio (government, medical, retail/consumer) as funding delays and uncertainty persists.”
• GH Research (GHRS) soars 36% after saying that the FDA has lifted the clinical hold on its investigational new drug application for GH001, allowing US subject enrollment and advancing the company toward initiating its global Phase 3 program in 2026.
• Mobileye (MBLY) rises 7% after saying an unnamed US-based automaker has chosen its EyeQ6H chip powered solution as standard across mass-market to premium vehicles.
• QXO (QXO) climbs 4% after the company confirmed that funds managed by Apollo Global and other investors agreed to invest $1.2 billion through a new series of convertible perpetual preferred stock to strengthen the company’s financial flexibility for acquisitions.
• Zenas Biopharma (ZBIO) slumps 49% after detailing results from a Phase 3 trial of obexelimab in immunoglobulin G4-related disease.

In corporate news, Musk’s Grok is facing mounting criticism and threats of government action around the world. The AI chatbot created sexualized images, including of minors, on the social media platform X in response to user prompts. Saks is said to be in talks for a $1 billion bankruptcy loan to keep the business running. 

Trump’s assertion that the US will run Venezuela, at least temporarily, means the country has a shot at restoring democracy and prosperity, according to Latin America Geo-economics analyst Jimena Zuniga. Hedge Fund Tribeca eyes a “massive gold rush” of investment opportunities in the country. On the geopoltical front, Secretary of State Rubio said the US will use leverage over oil to force further change in Venezuela and demanded it sever ties with Iran, Hezbollah and Cuba. Social media users in China are pointing to the US attack as providing a template for a possible move against Taiwan. 

Brent crude swung between gains and losses as oil traders weighed the fallout from the developments in Caracas. Chevron Corp. rose more than 6% in early trading, alongside sharp gains across US oil majors, after President Donald Trump floated plans for a US-led revival of Venezuela’s industry.

“The economic impact of what happened in Venezuela is too small to weigh on equity markets,” said Christopher Dembik, senior investment adviser at Pictet Asset Management. “That’s also true when it comes to oil: people have had the time to take a look at the data and in the most optimistic scenario, it will take two or three years to have a significant impact.”

Meanwhile, AI remains the hot topic for equity traders this Monday. Nvidia partner Hon Hai’s quarterly sales beat estimates after global tech firms accelerated their build-out of data centers, TSMC jumped after Goldman analysts lifted their price target by 35% and a Chinese national investment fund raised its stake in SMIC. And while some investors are asking if the AI boom is a bubble waiting to pop, history suggests the answer isn’t easy to gauge as the following table from Bloomberg shows.

The buoyant mood in big tech stocks was most prevalent in Asia, where a regional gauge hit an all-time high. Technology and mining equities led gains in Europe. 

AI “absolutely stays the most dominant factor in the markets right now,” Charu Chanana, chief investment strategist at Saxo Markets, told Bloomberg TV. “Tech optimism continues to overpower any of the other narratives.”

Elsewhere, the Fed’s Paulson said modest additional rate cuts could be appropriate later this year, but conditioned that outcome on a benign outlook for the economy. Former Treasury Secretary and Fed Chair Yellen warned of a growing “fiscal dominance” threat to the US economy when she spoke at the AEA’s weekend meeting.

• In Europe, the Stoxx 600 is up 0.4% and on course for a record close with most of the upside coming from a handful of sectors. Tech stocks are leading, as they did in Asia overnight. And defense stocks have benefited from the US capture of Venezuela’s President Nicolás Maduro. Oil prices erased an earlier fall to trade slightly higher. Sentiment around artificial intelligence got another boost after a broker upgrade for ASML. Miners also outperform, tracking gains across the metals complex. Here are some of the biggest movers on Monday:
• Ashmore shares surge as much as 14%, the steepest gain in more than three years, as analysts expect the emerging-market fund manager’s Venezuelan assets to benefit following the capture by US forces of President Nicolas Maduro.
• Saab shares climb as much as 7.1% to a record high as US military strikes on Venezuela lift European defense stocks.
• Syensqo shares climb as much as 4.7% after the chemical manufacturer announced a new CEO, and Morgan Stanley seperately said the stock was a top chemicals pick.
• Johnson Matthey shares rise as much as 8.1%, hitting their highest level since early 2023, after the chemicals company was upgraded at Berenberg on potential for earnings consensus to rise this year.
• ASML shares rally as much as 4.5% to a record high after Bernstein upgraded its rating to outperform from market perform, saying the AI-driven memory-chip super cycle will benefit the chip-equipment firm.
• Eurofins shares rise as much as 6.8%, the most since April, after the laboratory-testing company was double upgraded to outperform at BNP Paribas on receding governance concerns.
• Next shares drop as much 2.4%, the most since November, as Barclays analysts warn updated guidance due to be issued in Tuesday’s Christmas trading update may be cautious, weighing on sentiment for the stock.

Earlier in the session, Asian equities rose to a record high, supported by gains in tech-heavy markets such as Taiwan and Japan, as investors look past geopolitical risks surrounding Venezuela. The MSCI Asia Pacific Index advanced for a third session, rising as much as 1.7%. TSMC was the major contributor to the index’s gains, after Goldman Sachs raised its price target by 35% on AI opportunities. Samsung Electronics and Alibaba also led gains. Japan’s Nikkei 225 stock gauge jumped nearly 3%, while benchmarks in South Korea and Taiwan notched new record highs. China’s onshore benchmark CSI 300 Index rose 1.9% on its first trading day of 2026, marking its strongest start to a year in over a decade, as technology shares gain. Asian traders brushed off geopolitical risks sparked by US’ capture of Venezuelan President Nicolas Maduro due to the perception of their limited impact to global supply chains. Attention is shifting back to fundamentals, including earnings, while interest in the artificial intelligence theme remains strong. 

Emerging-market stocks are on track to hit a record, buoyed by persistent strength in Asian technology shares and a broad rally globally. The MSCI Emerging Markets Index rose as much as 1.5% Monday, poised to surpass a peak notched five years ago.

In FX, the Bloomberg Dollar Spot Index is up 0.1%, having pared gains, with the yen now top of the G-10 FX leaderboard. The pound has also turned positive against the greenback.

In rates, treasury futures hold small gains accumulated during London morning as gilts advanced, with yields near session lows as US day begins. US yields are 2bp-3bp richer across tenors with belly-led gains steepening 5s30s spread by about 1bp. 10-year near 4.165% is 2.6bp richer on the day with UK counterpart outperforming marginally.  Coupon auctions resume next week. IG dollar bond issuance slate contains several offerings to begin a week anticipated to be among the year’s busiest; Treasury coupon supply resumes next week with 3-, 10- and 30-year auctions.

“There are too many uncertainties to contend with,” wrote Mohit Kumar, chief economist and strategist for Europe at Jefferies. “Near-term drivers are likely to shift back to macro - the AI debate, unemployment and inflation picture and the large supply in government and corporate bonds in January.”

In commodities, spot silver climbs 3%, having briefly topped $76/oz. Gold and most base metals are also in the green. Oil prices are up slightly after paring losses, showing muted impact from weekend US capture of Venezuela’s president. US session includes December ISM manufacturing gauge. Bitcoin climbs 1.8% to about % $93,000.

Today's US economic calendar includes December ISM manufacturing at 10am; ahead this week are S&P Global US services PMI, ADP employment change, ISM services index, JOLTS job openings, factory orders and December employment. No Fed speakers are scheduled for Monday; Richmond Fed’s Barkin is set to speak on the economic outlook on Tuesday

Market Snapshot

• S&P 500 mini +0.3%
• Nasdaq 100 mini +0.7%
• Russell 2000 mini little changed
• Stoxx Europe 600 +0.4%
• DAX +0.8%
• CAC 40 little changed
• 10-year Treasury yield -2 basis points at 4.17%
• VIX +0.6 points at 15.13
• Bloomberg Dollar Index +0.2% at 1206.8
• euro -0.3% at $1.1687
• WTI crude little changed at $57.33/barrel

Top Overnight News

• Venezuela's deposed leader Nicolas Maduro was due in a New York court on Monday to face drug charges while the U.N. was to scrutinize the legality of U.S. President Donald Trump's extraordinary operation to capture him. After first denouncing Maduro's capture as a colonial oil-grab and "kidnapping", Venezuela's acting president Delcy Rodriguez changed her tune on Sunday, saying it was a priority to have respectful relations with Washington. RTRS
• Trump on Sunday predicted Cuba’s government could soon collapse and threatened Colombia’s president, a stark warning that underscored his administration’s increasingly aggressive posture toward leftist governments across Latin America. Trump reiterated his desire to annex Greenland, as well. Politico
• White House is considering giving Homeland Security Adviser Stephen Miller a greater role in overseeing operations in post-Maduro Venezuela, according to Washington Post.
• China asked its policy banks and other major lenders to report their lending exposure to Venezuela, people familiar said. BBG
• Moscow accused Kyiv on Monday of trying to strike a residence of Putin in Russia's northern Novgorod region with 91 long-range attack drones, and said Russia would review its negotiating position in ongoing talks with the U.S. on ending the Ukraine war. Trump said he did not believe that an alleged Ukrainian strike on President Vladimir Putin's residence took place as claimed by Russia. RTRS
• Volodymyr Zelenskiy said the US will join the EU for talks in Paris tomorrow on security guarantees for Ukraine. Meanwhile, Trump said he’s “not thrilled” with Russian leader Vladimir Putin because he’s “killing too many people.” BBG
  Chinese social media users suggest Maduro’s capture as a potential template for Beijing to handle Taiwan. But Taiwanese officials expect the US action will act as a deterrent against China attacking the island, a person familiar said. BBG
• Bank of Japan Governor Kazuo Ueda said on Monday the central bank will continue to raise interest rates if economic and price developments move in line with its forecasts. BBG
• The Fed’s Anna Paulson said modest rate cuts may be appropriate later in 2026. She expects inflation to continue easing, the labor market to stabilize and growth to run near 2%. BBG
• OPEC+ agreed to pause supply increases through the first quarter amid a looming surplus. Delegates said Venezuela was not discussed at the brief meeting yesterday. BBG
• Fed’s Paulson (2026 voter) said she sees inflation moderating, the labour market stabilising and growth coming around 2% this year, while she added that if all of that happens, then some further adjustments to the Fed Funds Rate would likely be appropriate later in the year. Paulson said she views the current level of rates as still restrictive and sees a decent chance that they will end the year with inflation that is close to 2% on a run-rate basis, as tariff-related price adjustments will likely be completed. Furthermore, she stated that while the labour market is bending, it is not breaking and that the baseline outlook for the economy is pretty benign.
• Nomura CEO sees the Fed cutting rates twice this year.

Trade/Tariffs

• US President Trump said could raise tariffs on India if they don't help on Russian oil issue.
• US President Trump blocked HieFo Corp's USD 3mln acquisition of assets in New Jersey-based aerospace and defence specialist Emcore on Friday and ordered HieFo to divest all interests and rights in Emcore assets due to national security and China-related concerns, according to Reuters.
• Irish PM Martin arrived in Beijing as part of a five-day visit aimed at boosting trade between the two countries, according to Chinese state media. There were later reports that Chinese President Xi said in a meeting with Ireland's PM that China and the EU should take a long-term view and adhere to the positioning of partnership, while Xi also commented that unilateral bullying is undermining the international order.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher as the region shrugged off the US strike on Venezuela and resumed last year's semiconductor-led rally which lifted the KOSPI to a record high, while TSMC shares also notched firm gains after Goldman Sachs raised its price target by 35% and its ADR's jumped late last week to become the sixth-largest company in the world by market cap. ASX 200 was flat as gains in mining and material stocks were counterbalanced by losses in the tech and consumer sectors.
    Nikkei 225 rallied on its first trading session of 2026 with notable strength in the heavy industries and semiconductor stocks. Hang Seng and Shanghai Comp traded mixed as the Hong Kong benchmark lagged and with the mainland buoyed on return from the New Year holiday closure, which saw the Shanghai Comp reclaim the 4,000 status, while participants digested the latest RatingDog Services PMI, which matched estimates at 52.0 (prev. 52.1) and the Composite figure slightly accelerated to 51.3 (prev. 51.2).

Top Asian News

• Japanese PM Takaichi said will pursue economic growth relentlessly.
• Japanese PM Takaichi said 2026 can be a major turning point for Japan, adds Rapidus holds key to Japan's chip revival.
• Chinese President Xi said unilateral bullying is undermining international order, according to Bloomberg.

European bourses (STOXX 600 +0.4%) are broadly on a stronger footing this morning (ex-SMI), with sentiment seemingly boosted by the US strike on Venezuela. A move which has pressured energy prices, and perhaps boosts optimism surrounding cheaper oil for global firms. European sectors are mixed, with Tech, Industrials and Basic Resources forming the top three; Tech lifted by ASML, Industrials by defence names and Basic Resources benefits from stronger copper prices. Food Beverage & Tobacco lags, hampered by Nestle. ASML (+3%) has been boosted after Bernstein named the Co. as its top pick for 2026, citing a combination of accelerating memory investment and a more attractive valuation backdrop; its updated PT of EUR 1300/shr (prev. EUR 800/shr), implies a circa 30% gain from current levels.

Top European News

• UK PM Starmer said the UK should move to closer alignment with the European single market on an "issue-by-issue" basis if it is in the national interest, according to Reuters.
• Chinese President Xi said in a meeting with Ireland's PM that China and the EU should take a long-term view and adhere to the positioning of partnership and view, according to Xinhua.

FX

• Dollar benefitted overnight from the mild losses in its major peers and with some haven appeal following the US intervention in Venezuela, with President Trump stating that the US will 'run' Venezuela and 'fix oil infrastructure', while he also signalled potentially widening their focus in the region to Cuba and Colombia.
• "Given the uncertainty about how the next few days will pan out, investors will probably prefer the liquidity of the dollar", suggests the analysts at ING, whilst adding that "Away from Venezuela, the dollar could also be enjoying some delayed buying interest after the blow-out 4.3% quarter-on-quarter annualised US third quarter GDP figure released on 23 December."
• Aside from that, little to mention on FX during the European session thus far. JPY sees shallower losses than other peers on haven appeal, although the CHF has plumbed the depths, although no obvious catalysts to explain the downside. GBP narrowly outperforms the as the cross fell under 0.8700 for the first time since Oct 2025. AUD and NZD are both subdued by the Buck, although the AUD/NZD cross remains above 1.1600 amid firmer copper prices.

Fixed Income

• A slightly firmer start for Bunds and USTs. All focus on the geopolitical situation re. Venezuela, with newsflow otherwise a little light.
• Bunds up to a 127.31 peak with gains of 20 ticks at best. However, the benchmark has since trimmed to unchanged but remains clear of the overnight 126.98 low. Within Europe, focus on Dutch pension reform as while the switch in the pension system has been long flagged, the full scale of the impact is not yet known.
• USTs similar, hit a 112-12 peak with strength of six ticks at best before fading to just above unchanged but above the 112-05 base.
• JGBs sold overnight as the 10yr yield hit another multi-year high amid outperformance in domestic stocks.
• Ahead, US ISM Manufacturing is the main scheduled event. However, any fresh updates on the geopolitical situation will undoubtedly take centre stage.

Commodities

• Crude benchmarks was choppy in APAC trade, but then moved lower in the early portion of this morning, as traders digest the US strike on Venezuela and the capturing of President Maduro. US President Trump commented that they are going to run Venezuela and “get oil flowing like it should be”. This hints of further addition of oil into an already-oversupplied market, causing Brent to fall below USD 60/bbl. Since, the complex has trimmed earlier losses to now trade around unchanged; Brent Mar in a USD 59.75-61.24/bbl parameter.
• Spot XAU gapped higher, opening at USD 4357/oz, and continued to trend higher to an APAC session high of USD 4420/oz. Currently, XAU is trading at session highs of USD 4432/oz, with demand for safe havens rising, following the Venezuela strike, but also potential further rate cuts by the Fed and continued concerns over US fiscal debt
• 3M LME Copper gapped above the range formed in the past 2 trading sessions, opening at USD 12.68k/t and driving to a high of USD 12.88k/t as the APAC session got underway. The red metal consolidated before briefly extending to a new session high of USD 12.91k/t. However, price pulled back but 3M LME Copper remains above USD 12.8k/t and just shy of ATHs at USD 12.97k/t.
• OPEC+ agreed to keep the group’s output unchanged as expected following a brief meeting on Sunday.
• Venezuela's oil exports, which had dropped to a minimum amid the US blockade of sanctioned tankers, are said to now be paralysed as port captains have not received requests to authorise loaded ships to set sail, according to four sources close to operations cited by Reuters.
• Former top Chevron executive is raising USD 2bln for Venezuelan oil projects as investors race to heed Trump’s call to pour “billions of dollars” into the country, according to FT.
• Goldman Sachs said Venezuela's oil production could increase in the long term and that scope for higher Venezuelan oil output could eventually pressure prices, according to Bloomberg.

Geopolitics

• US President Trump announced on Saturday that the US successfully carried out a large-scale strike against Venezuela, while he added that President Maduro and his wife were captured and flown out of Venezuela. Trump also commented that they are going to run Venezuela until such a time that they can do a safe, proper and judicious transition, while he added they are going to run Venezuela with a group and will get oil flowing like it should be, with Trump anticipating US oil producers spending billions in Venezuela.
• US President Trump said they are ready to stage a second strike if necessary and had assumed a second wave was needed, but now probably not. Furthermore, he said the US is not afraid of boots on the ground in Venezuela, and commented that they will be ‘reimbursed’ and will be selling large amounts of oil to other countries. It was separately reported that President Trump signalled the US could widen its focus in the region to Cuba, and he will be meeting with House Republicans in a closed-door meeting on Tuesday, following mixed reactions to the Venezuela attack including praise from top Republicans regarding the operation and questions by some lawmakers regarding the legal authority.
• US President Trump said it sounds good to him regarding whether there will be an operation in Colombia, while he added that Colombia is very sick as the country is being run by a sick man, but he won't be doing it very long. Trump also commented that Cuba looks like it is ready to fall and looks like 'its going down for the count'. Furthermore, Trump said if Venezuela doesn't behave, the US will do a second strike on Venezuela and noted that troops on the ground in Venezuela depend on how they act, while it was separately reported that Trump warned of dire consequences if Venezuela fails to meet US demands.
• Venezuela’s VP Rodriguez was granted temporary presidential powers, while she called for the return of Maduro and said the capture of Maduro has a ‘Zionist tint’. Furthermore, she said that they will not be anyone’s colony and that what is being done to Venezuela is barbaric.
• US Secretary of State Rubio and Defense Secretary Hegseth are among the Trump administration officials to brief some lawmakers regarding Venezuela on Monday, according to Punchbowl and The Hill.
• US Transportation Secretary Duffy said original restrictions around the Caribbean airspace were expiring and flights could resume.
• World leaders responded to the situation in Venezuela and largely called for restraint and an orderly transition to a legitimate government. Furthermore, German Chancellor Merz said the legal assessment of US strikes in Venezuela was complex, while Spanish PM Sanchez said they will not recognise a US intervention in Venezuela that violates international law, and UK PM Starmer said the UK sheds no tears about the end of Maduro's regime.
• China said the US should immediately release Venezuela’s Maduro and his wife and resolve the situation in Venezuela through dialogue and negotiation, according to Reuters. It was separately reported by Bloomberg that China was deeply shocked and strongly condemned the hegemonic acts by the US and that threaten peace and security in Latin America and the Caribbean region, while other allies of Venezuela’s allies including Brazil denounced the US attack, and Russia also criticised it as an 'unacceptable violation of the sovereignty of an independent state'.
• UN Security Council is to convene an emergency meeting on Monday to discuss the US operation in Venezuela.
• US President Trump said he is not thrilled with Russian President Putin regarding the war in Ukraine and said that too many people are dying, according to Bloomberg. Trump separately commented that there is no deadline on a Russia-Ukraine deal, while he thinks they will have a deal on Russia and Ukraine in the not-too-distant future.
• Moscow claims Ukraine is escalating drone attacks on Russia and has targeted Moscow with drones every day of 2026 so far, according to The Guardian.
• US President Trump said could raise tariffs on India if they don't help on Russian oil issue.
• US President Trump said it sounds good to him regarding whether there will be an operation on Colombia, adds Colombia is very sick as the country is being run by a sick man... but he won't be doing it very long. said:. If they don't behave, we will do a second strike on Venezuela, also noted that troops on the ground in Venezuela depend on how they act. No deadline on Russia-Ukraine deal. Think we'll have a deal on Russia and Ukraine in the not-too-distant future. Cuba looks like it is ready to fall and looks like 'its going down for the count'.
• Large-scale fire broke in the area of the "Energiya" plant in Russia's Lipetsk region following a drone attack.
• Iran’s Supreme Leader Khamenei labelled protestors ‘enemy mercenaries’, while he approved a crackdown and said that rioters must be put in their place, according to Iran International. It was separately reported by Reuters that US President Trump warned Iran on Friday that the US would come to the aid of protesters in Iran if security forces fired on them and said that the US is ‘locked and loaded and ready to go’. In relevant news, Iran’s Revolutionary Guards began a military exercise including missile launches and testing of air defence systems, according to correspondent Amichai Stein on X.

US Event Calendar

• Dec Wards Total Vehicle Sales, est. 15.75m, prior 15.6m
• 10:00 am: Dec ISM Manufacturing, est. 48.44, prior 48.2
• 10:00 am: Dec ISM Prices Paid, est. 58.7, prior 58.5

DB's Jim Reid concludes the overnight wrap

As we return for the first full week of 2026, the main story this morning remains the weekend developments in Venezuela, whose President Nicolás Maduro was captured by US forces and taken to New York. To bring you quickly up to speed, events moved rapidly from Saturday morning when reports came through of explosions in the Venezuelan capital Caracas. Then shortly after, President Trump posted that Maduro had been “captured and flown out of the country”. And later on, at a Saturday news conference, Trump said that the US would “run Venezuela” until there was a transition.

This morning there’s still a lot of uncertainty, and for markets, there’s a debate about the extent to which any short-term oil supply disruption from the upheaval will end up being outweighed by a longer-term supply boost from higher Venezuelan production. After all, the US Energy Information Administration have said that Venezuela has the world’s largest proven crude oil reserves, at 17% of the global total. But despite those reserves, production has declined significantly over recent years, with crude oil production in 2023 down 70% from its 2013 levels. So the prospect of a long-term supply recovery would serve to lower oil prices, and Trump himself said over the weekend that US oil companies would “go in, spend billions of dollars, fix the badly broken infrastructure, the oil infrastructure, and start making money for the country”. Indeed, those expectations have already brought down oil prices this morning, with Brent crude falling -0.43% to $60.49/bbl, whilst WTI is down -0.54% to $57.01/bbl. Meanwhile, US equity futures have risen slightly, with those on the S&P 500 up +0.12%.

In terms of Venezuela itself, it’s also not entirely clear what’s happening next in terms of potential US involvement in the country’s administration. Venezuela’s Supreme Court have granted the VP Delcy Rodríguez presidential powers on an acting basis, and Trump said that Secretary of State Marco Rubio had spoken with her. But although there hasn’t been direct US administration over Venezuela thus far, Rubio said on CBS that there was “an oil quarantine that allows us to exert tremendous leverage over what happens next”. And Trump said he was “not afraid” for there to be US boots on the ground in the future. Overnight, acting President Rodríguez said in a statement that they “extend an invitation to the US government to work together on a cooperation agenda, aimed at shared development, within the framework of international law, and to strengthen lasting community coexistence”.

From the perspective of global markets, it’s worth noting that geopolitical shocks historically don’t tend to have much of a lasting impact. That might seem surprising, but that’s because markets generally trade on macro variables like growth and inflation, rather than geopolitical shocks per se. We’ve seen this pattern again this morning, with US and European equity futures both higher, whilst US Treasuries have rallied slightly across the curve. Another recent example of this pattern have been events in the Middle East in the last few years, where markets outside the Middle East have seen a consistent pattern of quick recoveries from initial selloffs. For instance, at each point when tensions between Israel and Iran escalated, in April 2024, October 2024, and most recently in June 2025, the wider impact was limited outside of commodities and Middle Eastern equities.

This isn’t to say that geopolitics can’t have a lasting market impact, but when it’s done so, it’s been those events which affected key macro variables. Examples of that include the stagflation shocks after the 1970s oil crises, the Gulf War in 1990, and Russia’s invasion of Ukraine in 2022. In each case, they had a big impact because they caused a sufficiently big oil price shock that led to a sustained rise in inflation, whilst also having a meaningfully negative impact on growth outside the areas directly affected. By contrast today, we haven’t seen those kind of effects yet.

Otherwise this morning, Asian equity markets have risen sharply across the board. For instance, the KOSPI (+3.17%) is up to another record high, alongside gains for the Nikkei (+3.09%), the CSI 300 (+1.53%), the Shanghai Comp (+1.11%) and the Hang Seng (+0.09%). Tech stocks have done particularly well, with Samsung Electronics (+6.03%) as one of the top performers in the KOSPI this morning. But Japanese government bonds have continued to struggle, with the 10yr yield (+6.4bps) up to 2.12%, its highest level since 1999. Separately in China, the RatingDog Services PMI fell to a 6-month low in December at 52.0, although the composite PMI ticked up slightly to 51.3, a tenth higher than November.

In terms of the week ahead, clearly geopolitical developments will be top of mind. But otherwise, one of the main highlights will be the US jobs report for December on Friday. That’s an important one because there’s been more weakness in the labour market over recent months, with the unemployment rate rising to a 4-year high of 4.6% in November. So that’s seen the Fed deliver 3 consecutive rate cuts since their September meeting, and futures are still pricing in a 53% chance of another cut by the March meeting. So investors still think a Q1 rate cut is in the balance, and Friday’s report will go some way to determining if that happens. In terms of what to expect, our US economists think that nonfarm payrolls will rise by +50k in December, with the unemployment rate declining a tenth to 4.5%.

Over in Europe, the main highlight will be the flash CPI prints for December, with Germany and France reporting on Tuesday, ahead of the Euro Area-wide print on Wednesday. This isn’t a print expected to have too many implications for near-term ECB policy, with markets expecting them to keep rates on hold for the rest of the year. However, headline inflation is expected to fall below the 2% target early this year, largely driven by energy base effects. And our economists think that if the decline for headline inflation is large enough, that could spill over to weaken core and inflation expectations too, which would lower the bar for further policy easing. So that’ll be a key theme for H1. In terms of this print for December though, our economists expect Euro Area headline inflation to fall back to +2.0% thanks to those falling energy prices, down from +2.1% in November. And for core CPI, they expect that to remain at +2.4%.

Finally, before the weekend developments in Venezuela, markets had got the year off to a steady start last Friday, with a risk-on move on both sides of the Atlantic. Indeed, the S&P 500 (+0.19%) had its first positive start to a year since 2022, whilst Europe’s STOXX 600 (+0.67%) closed at an all-time high. Admittedly, there were some points of weakness, and the Mag 7 (-0.95%) posted a further decline after Tesla (-2.59%) reported Q4 deliveries that missed analyst estimates. But as we mentioned on Friday, we really shouldn’t extrapolate the day one moves, as the first trading day has often been a reverse indicator for the rest of the year. Indeed, 2023-25 all saw a negative start for the S&P before it then recorded a double-digit annual gain. By contrast, the last time we had a positive start in 2022, that year then saw a bear market and the index’s worst performance since 2008.

Meanwhile, the selloff among long-end bonds also continued last Friday, with yields hitting new milestones across several countries. That was particularly notable in Europe, where the 10yr bund yield (+4.5bps) closed at 2.90%, its highest level since October 2023, whilst the 30yr German yield (+6.4bps) moved up to its highest since 2011, at 3.54%. Similarly in the US, the 10yr Treasury yield (+2.4bps) moved up to 4.19%, and the 30yr yield (+2.7bps) rose to 4.87%, which in both cases was their highest since early September. And it also that meant the US 2s10s yield curve closed above 70bps on Friday for the first time since January 2022.

Those moves capped off a mixed week for financial markets, with lots of key assets struggling to gain much traction. For instance, the S&P 500 was still down -1.03% for the week, despite Friday’s recovery. In large part, that was driven by weakness among the Mag 7, which fell -2.46%, with other cyclical sectors also struggling. Sovereign bonds also struggled, with the 10yr Treasury yield up +6.3bps last week, whilst the 10yr bund yield was up +3.9bps. European equities were a key outperformer however, with the STOXX 600 up +1.26% over the week to a new high, whilst the FTSE 100 was up +0.82% and even crossed the 10,000 mark on an intraday basis for the first time. Finally in credit, US HY spreads (-3bps) and Euro HY spreads (-2bps) both tightened last week. But US IG spreads (+2bps) moved wider, whilst Euro IG spreads were unchanged.

Tyler Durden Mon, 01/05/2026 - 08:38

Production For Security 2026

Submitted by Peter Tchir of Academy Securities

ProSec 2026

We will do a “traditional” outlook for 2026, covering all major markets, but we really wanted to highlight ProSec and define more carefully what we think it means for you as corporations, policy makers, and asset managers.

Production for Security:

• RESILIENCY. We haven’t used the word “resiliency” as much as we could have and will use it more going forward. Being resilient, whether at the nation, state, or corporate level, will become a fixture in decision making.

• ProSec is already in the process of supplanting “traditional” ESG as an overarching theme in decision-making and planning.

• As much as we’ve tried to instill our view on how big, broad, and important the scope of ProSec is, we have failed to do that – so far.

• While not critical to ProSec we do believe that as the world adopts a “Pre-War” mentality, it helps accelerate ProSec as it imbues a degree of “sacrifice for the greater good” while also imparting a sense of “urgency.”

• ProSec is already going global and getting left behind on this initiative will be problematic for countries, companies, and investors.

Resiliency as a Driving Force Behind ProSec

To some degree we can describe ProSec as being the answer to “What If?”

• What if global shipping is disrupted?

  • It has happened for reasons “out of our control.” COVID was not on anyone’s radar screen. Even the Evergreen blocking the Suez Canal was an “unforeseen” accident. Will markets react the same the next time around to companies exposed to that risk? What if some companies have “planned” for this and have more robust supply chains – less use of shipping, using a variety of shipping lanes, only shipping with countries they are very close to – physically or politically? If a “competitor” has prepared and you haven’t, and it occurs again, it is difficult to see markets being as “understanding” as they were when it was deemed farfetched.

    • Legend has it that the disaster recovery plan for one incredibly large hedge fund was to use other offices as disaster recovery sites. It had the advantage of being global, so if something happened in a region that took out the main office, and the disaster recovery site, it would still be covered. It had the advantage of all sites being up to date. Nothing worse than getting to the disaster recovery site and realizing that the internet is too slow and you were running obsolete versions of software. The plan made a lot of sense. It did not cover the contingency of grounding all U.S. flights for days. To the extent the story is true (and I have no reason to doubt it), I can assure you that this fund revamped their plans to cover even more contingencies as well as other highly unlikely, but still possible scenarios. They increased their RESILIENCY as they absorbed new information.

• It happened because a “bad actor” behaved badly. Prior to the invasion of Ukraine by Russia, we could explain being “asleep at the switch” in terms of this type of risk. Iran and its proxies attacking more aggressively in the Middle East has not caused major disruptions, but it has caused some level of disruption, and seemed like a more foreseeable event than Russia’s invasion. The U.S. has just “blockaded” Venezuela. Actually, we did not “blockade” Venezuela as that is an act of war according to international law, but we have changed the nature of doing business with Venezuela.  

  • The People’s Armed Forces Maritime Militia (PAFMM). We used GROK for some of this information, but it is all very consistent with topics we’ve discussed in the past. Let’s start with this map from GROK attributed to npr.org to explain some potential risks.
    
    
    It (PAFMM) often operates in coordination with the PLA Navy (PLAN) and China’s Coast Guard (CCG) as part of a "joint defense" approach involving military, law enforcement, and civilian elements. In peacetime, it contributes to gray-zone tactics—coercive actions short of open warfare—such as swarming disputed features, harassing foreign vessels,  or establishing a de facto presence to bolster territorial claims in the South China Sea and East China Sea. Western analyses describe it as enabling China to advance its interests while maintaining plausible deniability, as vessels appear to be civilian. Chinese sources emphasize its role in leading fishing activities, collecting oceanic information, supporting island/reef construction, and participating in drills for national defense and disaster relief.  
    
    They have had as many as 400 ships active at any one time. According to GROK the “professional” component consists of 100-200 purpose-built boats (presumably larger and more sophisticated ones). There have been estimates that the total number of ships available is in the thousands. While not set up to attack, in the traditional sense, they can make sea travel perilous, not only by getting in the way, but also by dumping things like nets and logs overboard to foul propellors, etc. 
    
    The main focus today is Taiwan, because of our dependance on Taiwan for chips (a recurring theme of our 2026 Outlook), but it seems almost naïve to believe that there isn’t a bigger risk to shipping than just the concern around Taiwan’s chips (which in and of itself is a risk unless we become more “resilient” or diverse in our chip businesses). 
    
    We didn’t even touch on China’s control, ownership, and equipment in many ports across the globe as a potential future risk, but it certainly is.

• While we might not lose sleep every night worrying about shipping lanes, it seems prudent to plan for the worst if the cost to diversifying shipping lanes is small. 
  
  Considering the latest National Security Strategy, the potential safety of shipping should be a consideration when building new facilities. That gives the nod to North, South, and Central America, especially if you are not already overly exposed to the region.
   
• What if the flow of processed or refined rare earths and critical minerals is cut off?
   
  • Clearly this would be a risk if shipping with China is disrupted. But given what we’ve seen with the trade negotiations, it seems easy to play out scenarios where China decides to curtail shipments of their own volition. 
    
    These scenarios are by no means the base case, but do you really believe they have a zero probability of occurring? That there is no set of circumstances in the next few years under which China decides it is in their best interest to reduce shipments of these materials? Antimony is used in every munition and we remain highly dependent on China for this. 
    
    I am more focused on the refined and processed versions. China controls about 60% of the extraction/mining of what is broadly categorized as rare earths and critical minerals. They control about 90% of the processing and refining. 
    
    They can shut us off from the raw resources, but we could, in most cases, source them elsewhere. However, what good does it do if we have to ship them to China to be refined and processed? 
    
    I know I don’t always do a good job of highlighting the importance of these “things.” It is almost easy to dismiss some as they are “only a small part” of a bigger item. When we think “big picture,” it is easy to forget the importance that these little parts play in the grand scheme of things. Often, they are not just a little portion, but a large portion – when you are talking about batteries for instance. 
    
    With the help of OpenAI I have tried to bring the CEO of Whirlpool’s comments (made during COVID) to life. 
    
    This is maybe too “casual” or even too “obvious” as of course a washing machine needs a door, but that doesn’t make the point irrelevant (just my choice of graphics). 
    
    So much of our industrial production could grind to a halt, just because some small amount of processed/refined rare earths or critical minerals (that we depend on China for) doesn’t make it to our factories. It doesn’t only have to be to our “domestic” factories; this applies to factories anywhere around the globe, maybe even within China, if they decide to go down this path. 
    
    Again, it isn’t our base case, but becoming more RESILIENT, aka ProSec, goes a long way towards mitigating this risk. 
    
    While we don’t need to be completely “self-sufficient,” the more we can produce on our own, the more likely China won’t try to cut us off.

• Energy and electricity production.  

  • Germany and Russian Natural Gas. Enough said.

We need to think about resiliency. We need realistic and cost effective contingency plans. The “irony” of this is the more independent one becomes, the less chance one becomes the target of an adversary or competitor. It is effectively Economic Deterrence.

Maslow’s Hierarchy of Economic Needs

Of all the things I learned in college, being able to open a bottle of beer with another beer and Maslow’s Hierarchy of Needs might be the two most useful things I learned (though to be honest, growing up in Canada, I think we learned the beer bottle thing in high school, but I digress).

I don’t know what “self-actualization” really is, but Universal Basic Income seems right up there. I previously thought we were in the “Esteem” stage. That let us think about things differently. The concern I have is that we were being overly “altruistic” in our vision because we thought we had the levels below us covered. The crumbling foundation is what has become apparent, first gradually, and then suddenly.

We have published on many of these themes going back to 2018. They aren’t completely new.

COVID did change a little of how we think and behave, especially towards China.

The Biden administration saw the need for the CHIPS ACT.

But all of these things seemed more like an attempt to patch a crack, rather than determining that the entire foundation might be crumbling and needs to be completely redone!

ProSec and ESG are Compatible

Despite how the previous section might come across, much of what “we” were trying to achieve with ESG will remain in place. But the lens through which we look at ESG will be changing with “true” Sustainability (Resiliency, Independence, Security, etc.) taking center stage.

The ProSec Industries.

Let’s take a “quick” look at how we see the ProSec economy developing around specific industries.

This chart is intended to do a few things:

• Make you wish that I’d figured out how to use AI to make this chart more professional.

• Highlight the industries with some sense of relative importance (column width).

• Highlight how much can be done easily (green), with some effort (yellow), facing some real hurdles (orange), and some that might not be achievable (red).

Biotech and Pharma.

• As a “talking point,” reducing healthcare costs is easy. The complexity of the system makes it difficult. Same for “manufacturing at home.” On the surface it is “easy,” but there are a lot of difficulties. Hundreds, and even thousands of drugs are produced. We can kind of get away with saying “steel” and it covers the topic reasonably well (though purists would argue about the type of steel, etc.). But “drugs” is just too vague. There are the components, the base, and precursor drugs. There are the complex drugs we actually ingest or take. There are drugs with multiple delivery methods. The delivery methods themselves are sometimes separated from the drug itself. Patents. There is a focus here, but it is so complex that I think only slow progress will be made.

• For the “green” section of this industry, look no further than the GLP-1 drugs. They have the benefit of being topical and potentially have incredibly widespread application. Certainly, interest in them is widespread. The combination of “big and public” makes them an ideal candidate for an administration to focus on. Lots of headlines and manageable. Away from that, it seems like it will be a slog to get a lot of manufacturing done here. It will happen over time (we had immense success getting the COVID vaccines produced here – regardless of your view on the vaccines themselves).

• My best guess is that the admin will focus on the pharmacies next, rather than the manufacturers, as that industry is concentrated, and well known to the public, so easier to get a lot of “bang for the buck” on the political front. While I think this is an incredibly important ProSec industry, I think it will not be front and center in 2026 for opportunities.

Chips, Data Centers, and AI.

• These industries are doing incredibly well in their own right. Demand is there. In terms of ProSec™ the goal of the administration will be to bring more and more production home. There are a lot of opportunities in this space. The industry leaders should continue to do well and get government support. That support might come in many forms. Some of it may be through increased government use of the services. The government (in all facets, including state, local, defense, and healthcare) will spend in this sector.

• Regulatory help is another avenue the government will pursue. Whether paving the way for data centers, the power generation required, or even allowing products to be exported, to earn money, and to fund domestic growth, there will be support from the administration.

• INTC continues to stand out in this sector. While I would like rules in place to regulate state investments, those are not really in place (and would likely be pushed to the limit by this admin, even if they were in place). I find it difficult to see a world where the government doesn’t try to support the taxpayers’ investment in this company. For full disclosure, INTC was my biggest single stock holding in 2025 and will be again in 2026. It was up 86% in 2025. Can it repeat that? Who knows, but while I think any stock in this space has potential, with those focused on manufacturing in the U.S. getting the most government support, the direct investment leads me to suspect that extra support will be given here.

• Much of this chart is “green” and even “yellow” as a lot remains in our control. Look for a “shift” in the industry as it moves to where the energy (electricity) and fresh water are located. Tasks that require low latency will remain in locations that can offer that speed, but applications that allow for more latency will move to where the electricity is.

• The administration is likely going to take a closer look at quantum computing. I briefly pulled up WQTM (a quantum ETF) and some of their holdings jumped out at me – QBTS, IONQ, RGTI, and ARQQ to name a few. I have not spent much time on this, but some of these stocks seem to fit the “lottery ticket” theme in ProSec™ (companies with a small enough market cap, that a direct investment by the U.S. taxpayers could help the stock “pop,” similar to the investment in MP – though that stock is well off of its highs).

Electron Production.

• There will be a focus on not only producing the electricity needed for AI, Data Centers, EVs, and industry, but also getting it to where it needs to go (transmission).

• All forms of electricity generation will be used. Okay, maybe all forms other than wind, which this administration seems to really dislike.

  • Fusion. This is more the “future” and I haven’t poked around for tickers, but makes sense.

  • Fission. This is an area we have focused on a lot. The government is clearly promoting the growth of the nuclear power business. From allowing nuclear to be built on Army bases, to chatter about using Navy reactors more broadly, the government is working hard to jumpstart the nuclear industry. It has the longest lead time to build. There remains a “fear” factor associated with nuclear (I wonder what the world would look like had the nuclear industry hired the Bitcoin marketing team ). Despite those risks (too long and too much negative public opinion) I think the opportunities remain very good in this space.

    • URA is an ETF that focuses on Uranium. One way to bet on the rise of nuclear, here and abroad (Canada for example is ramping up efforts in this area), is through Uranium. The commodity itself, the miners, and the refiners could all do well if the nuclear industry really takes off. Worth looking through the holding of ETFs like this to assess what stocks might make sense.

    • Personally, I’m fascinated with the Small Nuclear Reactor space. It has been a roller coaster ride, and we need to see projects completed, in scale, but this fits our theme extremely well.

  • Coal and Natural Gas. While nuclear might become the backbone years from now, we are going to need rapid expansion of coal and natural gas burning facilities. Maybe not as clean as “we would like” but it is necessary (ProSec™ is trumping ESG – pun intended). Companies like GEV will continue to do well as will other companies that can step in and produce turbines and other equipment that these facilities will need. That industry compressed, as it was out of favor with “traditional” ESG, but will do well again as we try to harness all sources of electricity production.

    • One of the issues with coal and nat gas is getting it to where the electricity generation is. It is often one of the more difficult logistical issues that companies face when developing new facilities (less so when increasing size of existing facilities). It is right up there with regulatory approval, which remains an issue. So, maybe we will build the facilities where the resources are? We mentioned this earlier and will mention it again. When generating power for a city, you cannot really move the city. When generating power for something like a data center, maybe building the data center close to the power source is best?

  • Solar. From all the discussions I’ve had, it seems difficult to see the admin suddenly agreeing that wind is necessary. On solar, there is that real possibility. It seems impossible to believe that the electricity production industry isn’t telling the President and his team that solar needs to be part of his overall plan. Elon Musk literally tweets about the need for solar almost every day. While the solar plays may not have the upside of say nuclear, they should have less downside. Since they are “under-owned” as the government cuts back on subsidies, they could actually surprise to the upside. I like some of the more solar-focused companies.

  • Transmission and the Grid. We will need to make improvements to our transmission lines and the grid. Not just in terms of capacity but also “hardening” it – better cyber- threat security and possibly even better physical-threat security. Companies involved in transmission and the grid should do well.

  • Batteries. The use of batteries is only going to increase (especially if the admin reverses course on solar, where battery power is more of a necessity, due to the potential timing mismatches of power production versus use).

  • Utilities. Unregulated utilities probably have the edge here as more “traditional” utility users (individuals like you and me) are becoming concerned, perturbed, or even angry about the use of electricity by the AI/Data Center business.

  • Much of this sector is green and yellow as so much is in our control. Regulations might be the biggest hurdle to achieve the power needs, but I expect that hurdle will be lowered in an effort to ensure that the U.S. wins the AI and Data Center race.

• Rare Earths and Critical Minerals. I need to connect with Michael Rodriguez, Academy’s Head of Sustainable Finance (where he has always focused on resiliency), to do a more thorough dive into this sector – plus this report is already getting long for you to read, and my fingers are starting to hurt from typing so much. We are trying to analyze the importance of the material, alongside potential commercial application/profitability. Some are crucial to the U.S. but not viable domestically. The reason this sector has some orange and red coloring has less to do with the “willingness” and more to do with the “ability.”

  • Focus on REFINING over Extraction.

    • Extraction is important. We will see more mining. We will see more facilities to do things like pumping out fracking water with high concentrations of lithium, and then evaporating the water to “extract” the lithium. But there are also markets where we can purchase the commodities themselves. South America and Africa come to mind, along with the “stans.” The latest National Security Strategy and the “transactional” nature of the admin fit this view well. Please see last weekend’s Africa T-Report for more thoughts.

    • Make no mistake, processing and refining is more important. The real bottleneck we face is that China controls so much of the processing and refining of these rare earths and critical minerals. Just like oil itself is relatively useless (gasoline and diesel are much more useful), the rare earths and critical minerals themselves are relatively useless. China did a good job of securing supplies of the raw resources. What China did a better job of (in my opinion) is convincing the world that “letting China do the dirty work” was somehow “greener” than doing the dirty work ourselves. Cynical? Yes, but out of sight, out of mind seems to have helped this industry flourish in China (also, China adopted their own version of Production for Security a long time ago).

    • Look for patents and unused mining rights. When we lived in an age where only price mattered and regulatory approval would have been the equivalent of a minor miracle, projects were not pursued. But that is so 2024. Whether you are private equity or a corporation, now is the time to revisit some ideas or proposals you saw or heard about that made no sense in a Pre-ProSec™ world.

• Commodities. Similar to the above section, but with a lower priority. First, we need to “fix” our rare earths and critical minerals problem, then we can focus on commodities more generally. Some will get done, but that won’t be the highest priority. Again, focus on refining and processing over extraction. Commodities have less green and more yellow and orange than rare earths – precisely because the will and urgency aren’t there.

  • I like the “servicers” better than the producers. The producers should do well, but if ProSec works properly, other areas should too.

• Heavy Industry. Steel. Aluminum. Chemicals. Nice to have, but gets complicated quickly. Also, project lead time is typically at the long-end of the spectrum. This seems more like a Phase 2 ProSec™ idea rather than something that will create immediate opportunities.

• Defense. I will defer to our GIG members to opine on this more fully, but there will be a lot of opportunities with small/private companies developing “cutting edge” technology. There will remain a place for the “platforms” (aircraft carriers, state of the art fighter planes, etc.), but there are indications that drones, space, and anything autonomous are going to be the big beneficiaries of a Department of War that is to some extent repositioning itself (if not reinventing itself). 

• Ship Building. We need to make more ships. The U.S. Navy (as per my latest understanding) has plans to grow its fleet, albeit by small numbers. But despite that “plan,” the size of the Navy has been decreasing as ships are being retired faster than the replacements are being built. That is just the “traditional” Navy. Surface and underwater drones are going to play a major role going forward in shore defense (and attack). The Jones Act prevents non-U.S. built and flagged ships from shipping goods and commodities between two U.S. ports (one reason the Northeast imports a lot of gasoline while the South exports a lot of gasoline). I’ve been told the President doesn’t like the cruise ships in and around Florida (where he regularly sees them) flying foreign flags (on non U.S.-made ships). This industry is poised for government support.

  • Despite that rousing endorsement of this industry, very little is in green or even yellow. This will be a HEAVY LIFT. The skills, the materials, and the facilities are not readily available. This is more complex than ramping up electricity or getting a mine up and running. There are a lot of problems, not just hurdles, and shortages of skill and expertise will make this one more difficult to achieve. That could slow the admin down, as there isn’t quite the “easy” win we can see in some other areas. Yet it is critical and the “photo op” of breaking a bottle of champagne across the bow of the first ship built in a new yard would be impressive (though I suspect it will be the next President who would get to do that, given the time it is likely to take).

  • There are ways to invest in this sector, some of which would include defense stocks. I will also toss out BC (which I own) as a potential fit – especially if I’m correct on surface drones and other small watercraft being part of the defense plan going forward.

  • Maybe Ship Building should have just been a subset of Defense? Probably, but it probably deserves its own special section (and I don’t feel like re-organizing everything).

• The Big Industrial, Transportation, and Infrastructure Companies. If we are even remotely correct on the importance of ProSec™ the build out will allow many companies to prosper.

  • While it might take time to get many projects on line, the build out will create jobs and wealth immediately. From railways, to massive vehicles, to pipelines, to equipment makers of all types, the opportunities will be there. The jobs and wealth will start with those building the facilities, as much as with the final projects. Accelerated Depreciation works great with this concept.

The X, Y, and Z of America First

I’m losing steam quickly (and I assume you the reader are too). So, we won’t belabor the point.

X is what can be done domestically and “reasonably” efficiently.

• X will be a different percentage for each and every resource. Maybe in the U.S. potash can grow from the 10% range to the 25% range? But how much beyond this? There are limitations on how much can be produced domestically. While bananas are not part of ProSec™ we learned from tariff policy that it was kind of pointless tariffing them since we couldn’t supply significant quantities ourselves. While the goal might be 100% - that is highly unlikely. X also kind of represents the green and yellow in the charts above.

• X will vary by country. Yes, today’s T-Report has been very focused on the U.S., but each country is headed in this direction and how much of a given thing you can produce yourself will vary greatly.

Y is what likely needs to be done in conjunction with partners.

• Some things are just not available domestically.

• Some things, while available, may be prohibitively expensive.

• Economies of scale exist for a reason.

• America First is NOT the same as Only America

  • Australia is striking deals with the U.S.

  • As USMCA negotiations begin, there are many clear and easy paths to see the U.S. working with Canada and Mexico (independently or collectively) to achieve ProSec™ related goals.

  • America First is the X. America not alone, is the Y.

Z is whatever is expedient.

• Some things will be purchased as they fit the need. For some things, that may need to be very small. The size of Z will depend on the importance of the item and the relationship with the country producing the item.

• It also allows me to revert from zee to zed depending on the audience.

There still will be plenty of global trade, but for ProSec related items, that trading relationship will be anything but transactional. It will be part of an overall plan to achieve true sustainability and resiliency.

Sovereign Wealth Fund

D.C. has gone quiet on the potential for a sovereign wealth fund. Can the idea of selling gold at spot prices to create “income” that can be invested in American companies get traction again? I certainly think so. I’d rather have that than a Bitcoin reserve.

Bottom Line

ProSec or Production for Security will:

• Drive U.S. government policy.

• Shape investor’s allocations and return profile.

  • Change how corporations (and banks) allocate their resources.

  • Change how governments across the globe think about their policy.

The one “sad” truth is to some extent all we need to do is look at how China has shaped their economy, and we have a pretty decent roadmap for what we need to do. It will vary by country, by company, and asset manager, but ProSec™ will be a dominant factor in 2026.

The exciting part is that it incorporates AI and Data Centers (because you cannot ignore those industries) and it also sets us up for a pivot or rotation into new sectors and companies and should spur a wave of not just M&A activity, but also a lot of private equity activity as well!

Tyler Durden Mon, 01/05/2026 - 04:15

Germany's Fiscal Illusion: Bond Markets Rebuke Merz's Debt Spiral

Submitted by Thomas Kolbe

Germany was long seen as a bastion of fiscal stability in the Eurozone. But the erratic fiscal policy of the Merz government is now creating tensions in the bond market. Risk premiums on traditional periphery sovereigns like Italy, Portugal and Spain relative to German Bunds are shrinking.

For months, something remarkable has been happening in European debt markets. Risk spreads on the key ten year sovereign bonds of countries such as Italy, Portugal and Spain versus the economic anchor Germany have been steadily falling. Spanish yields now sit only about 0.4 percentage points above German Bunds; Italian paper — from a country with around 125% debt to GDP — trades just about 0.7 points wider.

Capital is clearly shifting out of Germany into other European bond segments. Is the market pricing in catastrophic German fiscal policy?

Repricing German Policy 

Germany’s debt strategy is unmistakably being reassessed by markets. With the so called special fund, Berlin has effectively thrust the country into a debt spiral virtually overnight. Over the next decade, more than €850 billion in new debt is to be issued — on top of a core budget already running a 2.5 – 3% deficit.

By decade’s end, Germany’s debt burden will likely hover near 85 – 90% of GDP — and nothing suggests an economic miracle will pull the nation out of this spiral. Miracles happen in fairy tales and children’s books — but even children’s book co author Robert Habeck didn’t achieve such an economic feat as Economics Minister.

Implicit obligations from pension and social systems aren’t even factored in — in Germany or elsewhere. What matters in the move in bond yields isn’t the absolute level, but the relative jump in German indebtedness, and markets are pricing exactly that. All this meets an economic reality with no meaningful extra value creation. German policy is pumping state credit — which will later surface as higher taxes and inflation — into an economic vacuum, just like centrally planned systems do.

Looking Ahead 

Investors are watching German policy with hawkish scrutiny: the nuclear exit, sky high energy prices crushing industry, a migration policy that drains the welfare state like a vampire — all feed into German bund pricing. Bond markets are always a bet on the future — a judgment on national stability.

The consequence is clear: yields are rising. And they’ll keep rising. A mounting debt pile becomes ever more expensive — that’s how markets must respond.

These hard facts cannot be spun away by Kanzleramt spin doctors or orchestrated party media. German productivity has flatlined since 2018 — and is now declining. Industrial output has collapsed by about a fifth. Hundreds of thousands of manufacturing jobs have vanished while only the public sector expands, with the state’s share of the economy above 50%.

Germany is gearing toward a wartime economy that yields near zero benefits for real economic output. Alongside an already failed “eco economy,” this parasitic sector consumes resources, fosters make work, and feeds a nexus of extraction firms. It’s funded by ever rising levies that increasingly burden productive workers. Prosperity and economic substance are being systematically — purposefully — undermined by central planners in Berlin and Brussels.

This downward spiral is knowingly and ideologically accelerated by Chancellor Friedrich Merz’s government. The crisis is engineered as the solution — to bend the populace toward the climate socialist agenda and secure political power even as social stress rises. An ideological crash course — without doubt.

What seems lost on climate socialist planners like Merz is this: economic action and potential prosperity fundamentally depend on cheap, reliable energy. Germany’s current crisis — productivity collapse and industrial decay — speaks for itself. It happened without necessity and stands in economic history as a unique act of self inflicted vandalism.

That Merz and fellow climate socialists, using media plays, escalating censorship, and constant business bashing at events like employer forums, are trying to steer their political core through crisis shows only one thing: they fail to see this is a one way street. Climate socialism is the problem, not the solution — and markets along with German output are proving it.

Yet this mindset is typical for career politicians trapped in ideological echo chambers. We saw this with Economics Minister Robert Habeck — a party functionary mythologized by state affirming green media, utterly unversed in economics, and intellectually overwhelmed. He failed to understand how the crisis of subsidized sectors he inflated with bailouts came about.

Socialism is a recurring phenomenon in new guises. Climate socialism, like its predecessors, will fail through mass impoverishment. Harsh years lie ahead for Germany, and nothing seems able to prevent green vulgar socialism from metastasizing here. EU capitals have become adjunct outposts of Brussels’ cancerous core.

Some shifts are already visible. Italy, for example, has begun transferring gold reserves from its central bank to state vaults and is pursuing independent energy security via North African gas. At the bond market, this is rewarded: yields and risk premiums there are falling. Investors apparently see Italy as a “First Survivor” in a severe Euro crisis. Germany has no similar narrative.

Compounding this is Berlin’s almost unfathomable commitment to the Ukraine conflict without democratic mandate, accelerating fiscal decay. Merz plans to funnel around €11.5 billion from the 2026 federal budget directly into the Kiev black hole — a stance shared by Paris, London and Brussels — utterly detached from reality and dismissing even the possibility of a full U.S. pullback from the European theater.

This geopolitical folly echoes in bond markets. Germany’s leaders are playing Vabanque — without historical sense, responsibility, or foresight.

Those who hope that rising French and Belgian debt ratios (soon above 120% of GDP) can defuse hyper state growth via bond markets may be disappointed. Japan shows that even heavily domestically financed debt — at historically extreme ratios around 235% of GDP — can float for a while, though future obligations aren’t counted. Markets price in that the ECB will protect Eurozone debt by buying excess bonds — delaying collapse. But how exactly it intervenes now — since the “bazooka” of 2020 — is opaque and hidden. Risk premiums tell the tale.

That U.S. Treasuries trade at around a 1.3% premium over German bonds — and 60bp above Greek and Italian paper — is grotesque given Europe’s structural weaknesses. This stark mismatch between economic reality and bond pricing screams manipulation by Frankfurt central bankers.

Predicting when markets will finally downgrade a Eurozone pillar — likely France first — and bring the whole debt house of cards down is impossible. As Hemingway wrote in The Sun Also Rises:

“How did you go bankrupt?” “Two ways,” Mike said. “Gradually, then suddenly.”

* * * 

About the author: Thomas Kolbe is a graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Mon, 01/05/2026 - 03:30

Which US Foods Are Banned In Europe?

From growth hormones in meat to controversial chemicals and artificial dyes, Europe's precautionary approach to food safety stands in strong contrast to America's more permissive stance.

This divide isn't just about science and risk management; it's become a flashpoint in the broader trade tensions between the U.S. and EU, where food standards often clash with economic interests.

As Statista's Tristan Gaudiat details below, for years, Europe has blocked imports of American foods containing substances like artificial growth hormones, brominated vegetable oil (BVO), titanium dioxide and potassium bromate, citing potential human health risks and animal welfare concerns.

The EU's stricter regulations on food safety, rooted in the "precautionary principle", prioritize consumer safety over industrial convenience - a philosophy that has repeatedly put Brussels at odds with Washington.

Yet, the tide may be (slowly) turning.

You will find more infographics at Statista

In 2024, the U.S. finally banned BVO, a synthetic emulsifier linked to neurological issues, after decades of use in soda and sports drinks.

And by 2027, Red Dye No. 3, a colorant long suspected of causing cancer, will also be phased out.

These moves mark rare moments of alignment with EU standards, even if several decades behind European legislators.

Critics argue that America's regulatory system, often influenced by powerful food and chemical lobbies, lags behind Europe's proactive bans.

Meanwhile, others point out that the EU's strict rules have become a trade barrier, with U.S. farmers and food producers pushing back against what they see as protectionism disguised as public health.

Tyler Durden Mon, 01/05/2026 - 02:45

First Venezuela, Next Iran?

Top US officials have been eager to capitalize on the Trump-ordered military raid on Caracas, which saw the Venezuelan capital bombed and its longtime socialist leader Nicolás Maduro captured without major incident and transferred to US soil where's facing federal drug charges related to narco-trafficking and gun-running.

Hawkish pundits are already clamoring for more muscular action targeting Tehran (and other supposed 'rogue' actors) at a moment of ongoing economic protests in Iran pressuring Islamic Republic leaders. Trump is issuing veiled threats to the governments of Cuba, Colombia, and Mexico - but many are asking: is Iran next? Various open source intelligence channels (OSINT) on Sunday have highlighted some unusual American military activity in the UK and Europe, for example...

Something unusual appears to be going on today at RAF Fairford near Gloucestershire in the United Kingdom, with at least 10 C-17A Globemaster IIIs with the U.S. Air Force arriving at the base or currently crossing the Atlantic from the United States. Almost all of the C-17s… https://t.co/LfyTSdEsQr

— OSINTdefender (@sentdefender) January 3, 2026

It's hard to know if this constitutes the usual Pentagon logistical operations in Europe, but it does indeed raise questions regarding Washington's force posture vis-a-vis Iran. 

One theme of the last several months of Trump's military build-up in the southern Caribbean has been that in sending so many warships to Venezuelan waters, including at least one nuclear-powered submarine and the USS Gerald R. Ford carrier group, is that this level of military asset concentration in Latin America means less deadly or long-range assets in the Middle East (CENTCOM) area of operation.

But could we be witnessing a quick pivot, now with Maduro awaiting trial in New York?

There are various things to consider when it comes to potential White House discussions on the matter. First, it must be recalled that Trump wisely declared mission accomplished when US bombers 'obliterated' (in the US estimation) Iran's three most important nuclear development sites at the tail-end of the June Israel-Iran war, which lasted just 12 days. There was no sustained American bombing campaign against Iran, also as Trump knows that "doing another Iraq" would be hugely unpopular at home.

There's another difficult reality when it comes to US actions targeting Iran, which behind Venezuela also possesses among the world's biggest proven reserves of crude oil. Iran is a country of over 90 million people, has a large military overseen by the elite IRGC, has long been 'military tested' (the 1980's Iran-Iraq war comes to mind), and has one of the world's premier arsenals of mid and long-range ballistic missiles. It even posses hypersonic capabilities (which the Israelis also learned). Because of this, last June Israeli warplanes were careful to operate largely outside Iranian airspace, and even though many anti-air missile sites were allegedly destroyed, this threat remains strong.

Reports of more IRGC missile tests over Iran Sunday night into Monday...

First images have already appeared, in Iranian and Israeli media. https://t.co/6BbvbNo9m7

— Conflict Radar (@Conflict_Radar) January 4, 2026

Trump will of course leave people guessing in his 'shoot from the hip' fashion. After all, the operation to topple Maduro was held as a tightly guarded secret even from many top Pentagon officials (in terms of the timing and "need to know" details just before it was launched). Here's what one Conservative, anti-Iran pundit has to say:

First Venezuela, next Iran. These military flights signify a barrel of whoop-ass, not just a can. Likely, these show deployments of the 101st Airborne AND the 1st Battalion, 75th Ranger Regiment.

The US Navy Fleet Tracker is oddly dark as well. We have 11 Aircraft Carriers, look at the 12/29/25 update compared to the 03/17/25 update. We are no longer posturing, we are in OPSEC mode. In Kuwait, the USA maintains roughly 13,500 troops at any given time. These troops serve as a Middle East response force (among other missions).

So why are the 1/75 Rangers and 101st Airborne deployments significant? The 75th Ranger Regiment's primary mission is airfield seizures. The 101st is an Air Assault unit. The USA just moved a huge strategic asset designed to open the gates of hell into whatever country we choose.

And as for keeping people guessing, there was this remark from Trump just days ahead of the operation to kidnap Maduro. "If Iran shots [sic] and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue. We are locked and loaded and ready to go," Trump posted on Truth Social last Monday.

Would Russia comes to Iran's defense if it is threatened with large-scale military action? Certainly the vehement condemnations would fly from Moscow, but Russia's military is obviously busy doing other things...

Team Trump is tough and cynical in advancing its country’s interests. Removing Maduro had nothing to do with drugs – only oil, and they openly admit this. Lex fortissimum is clearly stronger than ordinary justice, but whether they can run Venezuela remotely is a big question.

— Dmitry Medvedev (@MedvedevRussiaE) January 4, 2026

Regardless of if the US deescalates ongoing tensions with Tehran, or if Trump chooses to soon escalate, the Ayatollah and Islamic Republic leaders just got a lot more nervous and uncomfortable as they helplessly watch their longtime ally Maduro being hauled before a US federal court on American soil.

For now the most likely scenario is that Trump will be content to see where the now weeklong protests inside Iran go, as they threaten societal stability, and as the US-led sanctions regimen continues to wreak devastation. It is also likely that he would unleash Israel first, and not send US troops for direct action - akin to what happened in the last June bombing raids.

* * *

"It's time"... another Israeli direct threat aimed at Iran:

הגיע הזמן. pic.twitter.com/yejc37zmr8

— Naftali Bennett נפתלי בנט (@naftalibennett) January 4, 2026

Tyler Durden Sun, 01/04/2026 - 18:40

CIA & Palace Insiders: How The Surprise Raid On Maduro Went Down

Since Trump's Venezuela operation went down just over 24 hours ago, there's been an avalanche of reporting detailing the high risk gambit of American forces entering the capital of Caracas to kidnap Nicolás Maduro and his wife.

Admin officials appear eager to spike the proverbial football and divulge the details, akin to what happened after the complex SEAL raid which took out Osama bin Laden, or the later special forces killing of Islamic State leader Abu Bakr al-Baghdadi in Syria.

First, it has been divulged that President Trump a mere week earlier gave Maduro once last chance to relinquish power willingly in a phone call. "You got to surrender," Trump told the press Saturday in reference to Maduro. Trump referenced that he actually "came close" to stepping down - whereafter he possibly would have headed to safer climes in Dubai, Qatar, or even Moscow (where he could join Assad).

via FOX

But at the very moment the Venezuelan leader was on the phone with Trump, a CIA team was already in country monitoring his every move. According to a variety of fresh reporting in NBC and others, the CIA closely watched where he stayed, what he ate, and how he moved.

Likely the CIA would have been developing local assets over a period of years. An 'asset' can be anyone from local citizens or military officers - or even high ranking Colonels in Generals in the national army. One thing is clear at this point - the Pentagon had 'insider help' within the socialist regime.

Details of what was dubbed "Operation Absolute Resolve" have at this point been revealed by more than a dozen officials across the White House, administration, and Congress. There have also been very clear public remarks, and the obvious fact of the months-long Pentagon build-up in the southern Caribbean.

For example, the Joint Chiefs of Staff Chairman Dan "Raizin" Caine said Saturday that US intelligence even knew the names of Maduro’s pets.

Elite forces had trained for months, which even involved rehearsals at a mock-up of Maduro's compound built from intelligence reports, and troops practiced utilizing "massive blowtorches" in the event they would have to breach steel barriers protecting Maduro’s safe room.

One theme of the new reporting on the secretive operations was just how few in the US administration knew about it. The operation was strictly held to only the highest officials. Even Pentagon officials were unaware of the exact timing until Friday night, two US officials told NBC News.

The mission might have been ordered days before if not for unclear skies, but it finally proceeded Friday night when the weather cleared and it was a full moon. "Good luck and Godspeed," Trump told military commanders upon giving the final order.

The New York Times reports that this is what finally pushed Trump to send Delta Force to storm Caracas and abduct Maduro: https://t.co/e4bmnTgaDy pic.twitter.com/cf1cd03ZCr

— Josh Billinson (@jbillinson) January 4, 2026

Those most directly involved in the planning will also reportedly play roles in governing Venezuela until there is some kind of agreed-upon political transition - including Secretary of State Marco Rubio, Defense Secretary Pete Hegseth, CIA Director John Ratcliffe, and White House deputy chief of staff Stephen Miller.

Below are highlights of different aspects of how the unprecedented successful raid went down in the heart of Latin America, compiled from various sources [emphasis ZH]:

* * *

Brief mission with 'significant resistance'

The mission took about two hours and 20 minutes and continued into early Saturday, when Mr. Maduro and Ms. Flores “gave up,” General Caine said.

U.S. forces encountered significant resistance, Mr. Trump said. At least 40 people were killed, including military personnel and civilians, according to a senior Venezuelan official who spoke on condition of anonymity to describe preliminary reports. —NY Times

Helicopters flying low after power cut

At least 150 aircraft flew toward Caracas from 20 different bases on land and sea. The fleet included bombers, fighters and craft that specialized in intelligence, reconnaissance and surveillance, Caine said. The crews ranged in age from 20 to 49.

Darkness cloaked the Venezuelan capital. Trump suggested that the U.S. had cut the electricity in Caracas to gain an edge in the battle. Flying at 100 feet above the water, helicopters carried the special forces and law enforcement officials who plucked Maduro from his residence, Caine said. Other aircraft fired weapons to disable Venezuela’s air defense systems and clear a path for the helicopters, he added.

Flames were seen billowing from explosions at Fort Tiuna, a large military complex in Caracas. —NBC

The Delta Force breach of Maduro's presidential complex

By 1 a.m. ET Saturday, U.S. soldiers had reached the compound in Caracas where Maduro was staying. “A heavily fortified military fortress,” Trump called it.

When Delta Force breached Maduro’s residence, he and his wife were taken “completely by surprise,” Caine said. Maduro tried to escape into what Trump described as a steel safe room but didn’t make it in time. The forces took Maduro and his wife, Cilia Flores, into custody.

A firefight broke out after Maduro was captured, Caine said, and a U.S. helicopter was hit. No Americans were killed, though there were several injuries to U.S. troops, all of whom are stable, according to a U.S. official and a White House official.

By 3:30 a.m. ET, U.S. forces were safely out of the country, Caine said. At that time, the air in Caracas smelled of gunpowder and smoke. The U.S. Embassy in Venezuela cautioned American citizens there to shelter in place. —NBC

High placed CIA assets in govt. coordinated the raid

The assets included a CIA source operating within the Venezuelan government who assisted the United States with tracking Maduro’s location and movements ahead of his capture, one source briefed on the operation told CNN.

The detailed timeline and the revelation that a CIA team has been operating inside Venezuela for so long sheds new light on the administration’s pressure campaign on Maduro for the past several months, even as senior officials publicly stated their goal was not regime change. —CNN

The extraction of a sitting head of state

The helicopters with the extraction team reached Maduro’s compound at 2 a.m. local time in Caracas, the general said. Upon arrival, the helicopters came under fire and one was hit but remained flyable. The US returned fire in defense, Caine added.

“As the operation unfolded at the compound, our air and ground intelligence teams provided real-time updates to the ground force, ensuring those forces could safely navigate the complex environment without unnecessary risk,” he said.

Caine said Maduro and his wife “gave up” to the US military personnel before being flown out of the country. Maduro and Flores were placed aboard the USS Iwo Jima... —CNN

* * *

More information on the highly secretive op is likely to come out in the next days and weeks, as the history books are already being written.

Tyler Durden Sun, 01/04/2026 - 18:05

Diaper Report

Authored by Eric Peters,

It is six years now since the advent – and normalization of – sickness psychosis (also known as weaponized hypochondria) and it shows a remarkable persistence.

Because of course it has been normalized.

More than that, actually. It continues to be affirmed as a reasonable rather than aberrant behavior.

This business, that is, of seeing but pretending not to notice people walking around with a surgical mask over their porthole.

More finely, of normal (in the head) people seeing such people – interacting with them, even – and pretending they’re not seeing something indicative of serious mental illness.

Seeing a person wearing a “mask” and pretending not to see it is not unlike seeing a person who is in the process of wetting their pants while talking to you and pretending not to see it.

We saw three such “maskers” the other day at the supermarket. One was working behind the counter, where food is handled.

They are becoming a more common sight – probably because they’ve been told about the Super Flu that’s flitting about.

It’s no longer just the flu, of course. Just as it’s no longer just raining – or snowing. Or winter now – and then summer. It’s a bomb cyclone or some other fearful-sounding term, engineered to arouse panic.

Keeping the masses in a state of perpetual panic being the ideal state – from the point of those engineering these now-endless panics.

One follows the next like the night follows the day such that the masses never get a breather from the panic; such a breather might result in them calming down and using their heads again.

H.L. Mencken wrote about this a century ago. Unfortunately, probably not one in a hundred Americans knows who H.L. Mencken was.

Hospitals – those dens of science – are re-imposing “mask” requirements on visitors. It is a metric of the metastasization of the engineered sickness psychosis that has afflicted this country for six years now. Medical professionals (sic) who presumably have some understanding of how viruses are transmitted and who by now have no excuse for continuing to believe that people who aren’t sick can make others sick (the “asymptomatic spreader” idiocy) when it comes to viral bugs because people who aren’t contagious don’t cough spittle or sniffle.

They therefore don’t emit viral particles.

And even if they did, a “mask” doesn’t (for Christ’s sake) “stop the spread” of particles so small they sneeze right through the porous to viral-sized-particles “mask.”

Besides which, it is insane to spend your life in morbid dread of catching a cold. It is part of normal life to get sick occasionally.

One does not need to spend several years at medical school to understand these facts. Yet there are still apparently lots of people who did spend years at medical school who either do not understand the facts or play along with the lies. This latter is almost certainly the thing going on. It is understandable why it is going on.

Most doctors are just employees – like most of the rest of us – and they must do what their employer says, if they wish to remain employed.

In the case of most doctors, it is mostly the big hospital/health care chains and the insurance cartels that are the employer and when they say “jump” (or “mask” up) the doctors say how high?

And that wearing is caring.

Doesn’t this instill in you great confidence in the independent judgment of your doctor? What else are they telling people they need to do that they (the doctors) have been told they’d better tell people they need to do?

It brings to mind a rhetorical question voters were asked once about Richard Nixon: Would you buy a used car from this man? Well, would you buy into the pills (or surgery) your doctor is trying to sell you? The same guy who says you’ve got to wear a “mask” to be allowed to sit in his waiting room?

Integrity, once sold, is not easily re-purchased.

Just as sanity, once lost, is not easily regained.

We may soon see just how many people have not yet recovered. Not just their sanity. Their balls.

The symptoms are passivity and compliance when they are told they must – once again – “mask up” to be allowed within.

How many won’t believe the lies but will go along with them – again – to avoid a confrontation or some inconvenience? I need to see the doctor. Then maybe it will be I need to go to the store.

How many will defy the social pressure to be compliant and refuse to play along, no matter the inconvenience?

Everything depends on such people.

Tyler Durden Sun, 01/04/2026 - 17:30

Who Is Delcy Rodríguez, Maduro's Deputy?

Venezuela’s former Vice President Delcy Rodríguez is now president of the country, U.S. President Donald Trump said, hours after a U.S. military operation captured former leader Nicolás Maduro and his wife, Cilia Flores, on Jan. 3.

“She was just sworn in, but she was, as you know, picked by Maduro,” Trump said.

He said U.S. Secretary of State Marco Rubio “is working on that directly. Just had a conversation with her, and she’s essentially willing to do what we think is necessary to make Venezuela great again. Very simple.”

The overnight surprise attack resulted in Maduro and Flores being shipped to New York to face charges of narco-terrorism conspiracy, cocaine importation conspiracy, possession of machine guns and destructive devices, and conspiracy to possess machine guns and destructive devices.

Courtesy of Jacki Thrapp via The Epoch Times, here is what we know about Rodríguez.

Who Is Rodríguez?

Rodríguez was born and raised in Caracas, the capital of Venezuela, on May 18, 1969.

​The 56-year-old leader graduated from Universidad Central de Venezuela, became a lawyer, and quickly rose through the political system in the past decade.

Rodríguez served as the Communication and Information Minister in 2013 before she pivoted to a Foreign Ministry position from 2014 to 2017 and eventually served as the head of the Constituent Assembly, which expanded Maduro’s powers.

Vice Presidency

Maduro selected Rodríguez as his vice president in June 2018, describing her as “a young woman, brave, seasoned, daughter of a martyr, revolutionary, and tested in a thousand battles.”

In August 2024, Maduro assigned Rodríguez to manage sanctions on oil between the United States and Venezuela.

Acting Leader

Trump announced from Mar-a-Lago on Jan. 3 that the United States will “run” Venezuela until a peaceful transition can be made, while saying that Rodríguez has agreed to work with the United States after being “sworn in” as Venezuela’s new president.

Trump said Rodríguez had spoken with Rubio but didn’t provide details on how the United States would work with Rodríguez to run the country.

“She really doesn’t have a choice,” Trump said.

“We’re going to have this done right. We’re not going to just do this with Maduro, then leave like everybody else, leave and say, ‘Let it go to hell.’ If we just left, it has zero chance of ever coming back.

“We‘ll run it properly. We’ll run it professionally. We'll have the greatest oil companies in the world go in and invest billions and billions of dollars and take out money, use that money in Venezuela. And the biggest beneficiary going to be the people of Venezuela.”

In an address broadcast on state television shortly after Trump’s briefing, Rodríguez - who was identified as vice president by a ticker at the bottom of the screen - did not address Trump’s claims that she was now acting president. Instead, she demanded that the United States free Maduro, who she called the country’s rightful leader.

“Here, we have a government with clarity, and I repeat and repeat again … we are willing to have respectful relations,” Rodríguez said.

“It is the only thing we will accept for a type of relationship after having [been] attacked.”

Maduro’s Exit Plan

Before Maduro was captured, he floated the idea of staying in office for three more years before having Rodríguez take over and finish his term through January 2031.

The proposal was rejected by the White House, which openly questioned the legitimacy of Venezuela’s 2024 election and accused Maduro of overseeing a narco-terrorist state.

Tyler Durden Sun, 01/04/2026 - 16:55

Chinese Social Media Explodes: US Invasion Of Venezuela A 'Template' For Move On Taiwan

A fascinating new report by Bloomberg on Sunday has observed a huge uptick in Chinese social media users weighing in on the decades-long Taiwan independence crisis, in relation to President Trump's weekend overthrow of Venezuelan President Nicolas Maduro.

"Trump's operation against the Venezuelan strongman shot to the top of China’s Weibo late Saturday, with the topic gaining some 440 million views on the X-like platform," Bloomberg reports. "Many commentators were quick to make comparisons between the fate of the South American nation and that of the self-ruled democracy Beijing has vowed to claim."

Like the long building military showdown between the United States and Venezuela, Taiwan has been a flashpoint in mainland China's shadow. It is 'small' in comparison with China's population and military might. But the situation is an inversion, with Washington having long armed Taiwan to the teeth.

This fact is obvious enough to spark an avalanche of commentary, with Bloomberg citing one Weibo post and thread (among many) which said "I suggest using the same method to reclaim Taiwan in the future" - in reference to Beijing's designs on 'reuniting' the self-ruled island with the mainland.

Another user said, "The US imperialists’ lightning raid on Venezuela to capture Maduro and his wife provides a perfect blueprint for our military to launch a surprise attack on Frog Island and seize [Taiwanese President] Lai Ching-te" - which utilized a popular derogatory term for Taiwan.

Nikkei/Google Earth

China has joined Russia in demanding the immediate release of Maduro, with the foreign ministry staying it was "deeply shocked" by the "blatant use of force against a sovereign state."

The same report features the perspective of former diplomat Ryan Hass:

"I don’t expect today’s events in Venezuela will dramatically shift Beijing’s calculus on Taiwan," Ryan Hass, a former US diplomat and senior fellow at the Brookings Institution, wrote on X. "Beijing hasn’t refrained from kinetic or other actions on Taiwan out of deference to international law and norms."

"Privately, I expect Beijing will emphasize to Washington that it expects to be given the same latitude for great power exemptions to international law that the US takes for itself," he added, citing China’s operations in the South China Sea, where it has territorial disputes with US allies and other regional neighbors.

Indeed under Trump it is a new day. Not only does he "speak the truth out loud" - no longer merely hiding behind platitudes like "spreading democracy" in the name of the "rules-based order", he unapologetically just invades countries he doesn't like (as the foray into Caracas makes clear).

The US has long condemned Moscow of doing just this (in Ukraine, or in Georgia over a decade ago). The Kremlin has reacted this weekend to the Venezuela intervention by saying "just watch the double standards in motion."

Beijing without doubt is signaling the same thing. It is asking essentially: if the US can do this in its own backyard (invade a small 'nuisance' country), then why can't China do the same?

Time to watch the double standards in real time.

— Kirill Dmitriev (@kadmitriev) January 3, 2026

Tyler Durden Sun, 01/04/2026 - 16:20

Detroit Tries To Balance Gas-Powered Profits While Staying Competitive With China's EV Surge

U.S. automakers are quietly pivoting back toward what they know makes money: large gasoline vehicles. Selling trucks and SUVs is now the fastest path to higher profits, especially as government pressure to push electric vehicles has weakened. Trying to maximize profits from gas cars while keeping pace in EV technology is proving extremely difficult, according to a new writeup from the Wall Street Journal.

Recent policy changes strongly favor gasoline models. Fuel-economy rules have been softened, penalties for missing targets have disappeared, EV tax credits have expired, and California can no longer impose its own emissions standards. EV momentum has cooled worldwide as well, with Europe, the U.K., and Canada also retreating from aggressive mandates. BloombergNEF projects U.S. EV sales will drop 24% in Q4 2025 from the year before.

Automakers are responding quickly. GM, Ford, and Stellantis have announced plans to emphasize gasoline vehicles, which deliver far better margins. Thousands of EV-factory jobs have been cut and several plants paused. As RBC’s Tom Narayan explains, “Even one quarter of mismatched production can result in billions of dollars of losses.”

Their caution is understandable. EV programs have been deeply unprofitable. Ford alone lost nearly $13 billion on EVs between 2021 and 2024, and now expects $19.5 billion in new charges, largely EV-related. Meanwhile, easing regulations are creating what Ford CEO Jim Farley calls a “multibillion-dollar opportunity over the next two years.” TD Cowen estimates profit gains of $4B for Ford, $3B for GM, and €1.4B for Stellantis from these regulatory shifts.

Publicly, the companies still claim commitment to EVs. GM CEO Mary Barra says “profitable electric-vehicle production” remains the firm’s goal, and Farley warns that Chinese rivals like BYD and Geely are the real competition. But reality is sobering: the Detroit Three together control less than 5% of global EV sales, while BYD, Geely, and Tesla hold nearly 40%.

WSJ writes that part of the problem is demand. Consumers have resisted expensive electric versions of large vehicles that don’t suit long-distance or commercial use. Ford now plans a smaller, cheaper electric pickup around $30,000 for 2027. GM is redesigning EVs to be lighter and more aerodynamic. Both companies are also trying to keep flexibility by producing EVs and gasoline cars in the same plants. As Barra put it, “we have the ability to flex back and forth between ICE and EVs.”

That flexibility, however, undermines efficiency. BloombergNEF’s Colin McKerracher argues that scale is essential for lowering battery costs, and John Murphy of Haig Partners notes that mixed production lines inevitably sacrifice efficiency.

Believing Detroit can dominate EVs now requires faith: that low-cost EVs can be built without massive scale, that U.S. firms can match the speed of Chinese rivals who release new models every 1.8 years versus 5.2 years for Western firms, and that Chinese automakers will stay out of the U.S. market indefinitely.

There is another path. Like U.S. oil companies that ignored renewables and doubled down on their most profitable business—with strong results—the Detroit automakers could lean into gasoline and hybrids. Hybrid demand is still growing and uses nearly the same supply chain as traditional vehicles. S&P Global Mobility expects global gasoline and hybrid sales to rise through at least 2032.

The danger is timing. The world could transition to EVs faster than expected, leaving U.S. automakers stuck behind. For now, though, profits from gas vehicles are simply too attractive to resist.

Tyler Durden Sun, 01/04/2026 - 15:45

Operation Absolute Resolve: Why Trump Went Off Script And Why It Will Not Matter

Authored by Jonathan Turley,

It can fairly be said that the most precarious jobs in the world are those of a golf ball collector at a driving range, a mascot at a Chuck E. Cheese, and a Trump Administration lawyer.

That was evident at the press conference yesterday as President Donald Trump blew apart the carefully constructed narrative presented earlier for the seizure of Venezuelan President Nicolás Maduro and his wife, Cilia Flores. 

Some of us had written that Trump had a winning legal argument by focusing on the operation as the seizure of two indicted individuals in reliance on past judicial rulings, including the decisions in the case of former Panamanian dictator Manuel Noriega.

Secretary of State Marco Rubio and General Dan Caine stayed on script and reinforced this narrative. Both repeatedly noted that this was an operation intended to bring two individuals to justice and that law enforcement personnel were part of the extraction team to place them into legal custody. Rubio was, again, particularly effective in emphasizing that Maduro was not the head of state but a criminal dictator who took control after losing democratic elections.

However, while noting the purpose of the capture, President Trump proceeded to declare that the United States would engage in nation-building to achieve lasting regime change. He stated that they would be running Venezuela to ensure a friendly government and the repayment of seized U.S. property dating back to the government of Hugo Chávez.

This city is full of self-proclaimed Trump whisperers who rarely score above random selection in their predictions. However, there are certain pronounced elements in Trump’s approach to such matters. First, he is the most transparent president in my lifetime with prolonged (at times excruciatingly long) press conferences and a brutal frankness about his motivations. Second, he is unabashedly and undeniably transactional in most of his dealings. He is not ashamed to state what he wants the country to get out of the deal.

In Venezuela, he wants a stable partner, and he wants oil.

Chávez and Maduro had implemented moronic socialist policies that reduced one of the most prosperous nations to an economic basket case. They brought in Cuban security thugs to help keep the population under repressive conditions, as a third fled to the United States and other countries.

After an extraordinary operation to capture Maduro, Trump was faced with socialist Maduro allies on every level of the government. He is not willing to allow those same regressive elements to reassert themselves.

The problem is that, if the purpose was regime change, this attack was an act of war, which is why Rubio struggled to bring the presser back to the law enforcement purpose. I have long criticized the erosion of the war declaration powers of Congress, including my representation of members of Congress in opposition to Obama’s Libyan war effort.

The fact, however, is that we lost that case. Trump knows that. Courts have routinely dismissed challenges to undeclared military offensives against other nations. In fairness to Trump, most Democrats were as quiet as church mice when Obama and Hillary Clinton attacked Libya’s capital and military sites to achieve regime change without any authorization from Congress. They were also silent when Obama vaporized an American under this “kill list” policy without even a criminal charge. So please spare me the outrage now.

My strong preferences for congressional authorization and consultation are immaterial. The question I am asked as a legal analyst is whether this operation would be viewed as lawful. The answer remains yes.

The courts have previously upheld the authority of presidents to seize individuals abroad, including the purported heads of state. This case is actually stronger in many respects than the one involving Noriega. Maduro will now make the same failed arguments that Noriega raised. He should lose those challenges under existing precedent. If courts apply the same standards to Trump (which is often an uncertain proposition), Trump will win on the right to seize Maduro and bring him to justice.

But then, how about the other rationales rattled off at Mar-A-Lago? In my view, it will not matter. Here is why.

The immediate purpose and result of the operation was to capture Maduro and to bring him to face his indictment in New York. That is Noriega 2.0.

The Administration put him into custody at the time of extraction with law enforcement personnel and handed him over to the Justice Department for prosecution.

The Trump Administration can then argue that it had to deal with the aftermath of that operation and would not simply leave the country without a leader or stable government.

Trump emphasized that “We’re going to run the country until such time as we can do a safe, proper and judicious transition.”

I still do not like the import of those statements. Venezuelans must be in charge of their own country and our role, if any, must be to help them establish a democratic and stable government. Trump added that “We can’t take a chance that somebody else takes over Venezuela that doesn’t have the good of the Venezuelan people in mind.”

The devil is in the details. Venezuelans must decide who has their best interests in mind, not the United States.

However, returning to the legal elements, I do not see how a court could free Maduro simply because it disapproves of nation-building. Presidents have engaged in such policies for years. The aftermath of the operation is distinct from its immediate purpose.

Trump can argue that, absent countervailing action from Congress, he has the authority under Article II of the Constitution to lay the foundation for a constitutional and economic revival in Venezuela.

He will leave it to his lawyers to make that case. It is not the case that some of us preferred, but it is the case that he wants to be made. He is not someone who can be scripted. It is his script and he is still likely to prevail in holding Maduro and his wife for trial.

Tyler Durden Sun, 01/04/2026 - 15:10

Bongino Makes Resignation From FBI Official

FBI Deputy Director Dan Bongino officially resigned from the bureau on Saturday, hours after President Donald Trump confirmed that Venezuelan leader Nicolás Maduro had been taken into US custody. 

FBI Deputy Director Dan Bongino (C), accompanied by U.S. Attorney for the District of Columbia Jeanine Pirro (L) and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Washington Field Office Special Agent in Charge Anthony Spotswood (R), speaks during a news conference on an arrest of a suspect in the January 6th pipe bombing case at the Department of Justice in Washington, on Dec. 4, 2025. Andrew Harnik /Getty Images

Responding to a post on X, Bongino praised Maduro's capture, saying it was "a busy last day on the job."

"Tomorrow I return to civilian life. It’s been an incredible year thanks to the leadership and decisiveness of President Trump."

Bongino said that it was "an honor of a lifetime" to work beside FBI Director Kash Patel, adding "See you on the other side."

It was a busy last day on the job. This will be my last post on this account.
Tomorrow I return to civilian life. It’s been an incredible year thanks to the leadership and decisiveness of President Trump.
It was the honor of a lifetime to work with Director Patel, and to serve… https://t.co/ETUqiYXvLH

— Dan Bongino (@FBIDDBongino) January 4, 2026

Bongino announced in mid-December that he would be leaving the FBI in January. 

In response President Trump told reporters at Joint Base Andrews in Maryland on Dec. 17 that Bongino had done a "great job," but "I think he wants to go back to his show," referring to Bongino's podcast. 

Patel also confirmed Bongino's retirement announcement on X Saturday night - after having previously calling him "the best partner I could’ve asked for in helping restore this FBI."

"He not only completed his mission—he far exceeded it. We will miss him but I’m thankful he accepted the call to serve."

Dan is the best partner I could’ve asked for in helping restore this FBI. He brought critical reforms to make the organization more efficient, led the successful Summer Heat op, served as the people’s voice for transparency, and delivered major breakthroughs in long unsolved… https://t.co/o8wZOUnojP

— FBI Director Kash Patel (@FBIDirectorKash) December 17, 2025

 As the Epoch Times notes further, Bongino highlighted some statistics of the FBI’s operations over the past year in a post on Dec. 30, 2025, noting the bureau had made more than 50,000 arrests—including more than 30,000 that were for violent crimes—had seized more than 2,000 kilograms (4,400 pounds) of fentanyl, and increased arrests for “Nihilistic Violent Extremism” by 490 percent.

The United States also saw a significant drop in the national murder rate over the past year, and the FBI located more than 6,000 child victims, an increase of 22 percent, Bongino added.

Bongino’s tenure at the FBI also saw some infighting with the Department of Justice, the bureau’s parent agency, over its handling of the Jeffrey Epstein files after Bongino had spent considerable time on his podcast demanding answers about the now-deceased sex offender and his 2019 death, which was officially ruled a suicide.

Bongino wrote a post on X in late July 2025 that said the FBI was “committed to stamping out public corruption and the political weaponization of both law enforcement and intelligence operations,” but that what he learned conducting investigations “into these aforementioned matters, has shocked me down to my core.”

“We cannot run a Republic like this. I’ll never be the same after learning what I’ve learned,” Bongino said at the time, but did not elaborate.

Earlier that month, Trump had dismissed reports of friction between Bongino and others at the FBI and Justice Department over the release of the Epstein files, telling reporters on Air Force One that Bongino’s a “very good guy” and that “he’s in good shape.”

Tyler Durden Sun, 01/04/2026 - 14:35

Why MSCI's Upcoming Decision On Bitcoin Treasury Companies Matters

Authored by Juan Galt via BitcoinMagazine.com,

In a move that could shape corporate Bitcoin adoption, index provider MSCI is set to decide whether to exclude companies holding significant Bitcoin reserves from its global benchmarks. The outcome, due January 15, may influence billions in forced selling and set precedents for how Wall Street views Bitcoin as a treasury asset.

MSCI Inc., a New York-based publicly traded company listed on the NYSE with a market capitalization of $43.76 billion and a stock price of $565.68 as of January 2, is a key player in the investment world. It curates over 246,000 equity indexes daily, with more than $18.3 trillion in assets under management benchmarked to them. These indices serve as blueprints for funds and portfolios, helping investors gain exposure to specific market segments.

Unlike the NASDAQ, which operates as both a stock exchange where companies list and trade and a composite index tracking those listings, MSCI focuses solely on index creation. The S&P 500, managed by S&P Dow Jones Indices, is similarly an index but targets the 500 largest U.S. companies by market cap. MSCI’s offerings, such as the MSCI World Index covering developed markets, provide broader global and thematic coverage, influencing trillions in investment decisions.

The issue began on October 10, 2025, when MSCI issued a consultation proposal to exclude companies with 50% or more of their assets in digital assets like Bitcoin or other cryptocurrencies from its Global Investable Market Indexes.

The rationale: such firms operate more like funds than traditional businesses.

The proposal named 39 companies, including Bitcoin holders like Strategy and Metaplanet. The announcement triggered an immediate market reaction, with Bitcoin experiencing a sharp intraday plunge of roughly $12,000 on the same day, marking the start of a broader price correction.

Broader awareness grew in late November 2025, when JPMorgan analysts highlighted the risks in a report, estimating $2.8 billion in outflows from Strategy alone and up to $8.8 billion if other index providers followed suit.

This may have amplified selling pressure on affected stocks and contributed to Bitcoin’s ongoing pullback amid a broader market downturn. 

Estimates of total forced selling, if implemented, range from $10 billion to $15 billion over a year, per Bitcoin for Corporations (BFC) analysis.

The consultation period, open for stakeholder feedback, closed on December 31, 2025. BFC, a coalition accelerating corporate Bitcoin adoption, mobilized quickly. They launched a website detailing the proposal’s flaws, including a technical appendix outlining potential market impacts. BFC drafted a letter opposing the change, gathering over 1,500 signatures in two weeks and delivering it to MSCI on December 30. Eight of the 39 affected companies are BFC members.

After initial outreach, BFC held a call with MSCI’s head of research and leadership.

“We had a very constructive conversation,” said George Mekhail, BFC’s executive director.

“I think they were very much still in a listening and learning posture. I think a lot of this just really has to do with a lack of education and understanding of Bitcoin itself, as well as these Bitcoin treasury companies and the significance of their operating businesses.”

Mekhail noted the proposal appeared driven by genuine analytical concerns rather than malice, triggered by Metaplanet’s recent preferred share issuance, not Strategy’s larger holdings. A key gap: MSCI made no distinction between Bitcoin and other cryptocurrencies, treating all digital assets alike. This has fostered temporary alignment between Bitcoin advocates and the broader crypto sector in opposition, highlighting an ongoing education gap between the Bitcoin industry and Wall Street institutions.

Next, MSCI announces its decision on January 15, 2026. If approved, exclusions take effect February 1.

Mekhail outlined three scenarios:

1. implementation (worst case, forcing sales),

2. a delay for further review (most likely, per his assessment),

3. or full withdrawal (best case).

Polymarket bettors currently give a 77% chance of Strategy’s delisting from MSCI by March 31.

Source: Polymarket

Most financial fallout would hit Strategy, which holds the vast majority of affected Bitcoin treasuries. Founder Michael Saylor’s firm has engaged MSCI directly, issuing its own letter and working behind the scenes. Other opposition includes letters from Strive Asset Management and investor Bill Miller.

Industry pushback has been robust and visible, with no major groups publicly supporting the proposal. This asymmetry underscores Bitcoin’s organized, motivated constituency versus dispersed critics, echoing dynamics in recent political shifts like the 2024 U.S. election.

A withdrawal would boost corporate Bitcoin strategies; implementation could deter treasuries. As Mekhail put it, “The most bullish outcome is that they take it to heart and they withdraw the proposal.”

The decision tests Wall Street’s adaptation to Bitcoin’s role in balance sheets.

Tyler Durden Sun, 01/04/2026 - 14:00

Democrats Claim Maduro Capture Is A 'Distraction'

Democrats immediately denounced President Trump's operation that resulted in the capture of Venezuelan socialist dictator Nicolás Maduro, calling it an illegal war despite broad precedent supporting the commander-in-chief's authority to conduct such missions without congressional approval.

Even former Vice President Kamala Harris has chimed in.

"Donald Trump’s actions in Venezuela do not make America safer, stronger, or more affordable," Harris claimed in a post on X. “That Maduro is a brutal, illegitimate dictator does not change the fact that this action was both unlawful and unwise. We’ve seen this movie before. Wars for regime change or oil that are sold as strength but turn into chaos, and American families pay the price.”

Other Democrats claimed that the operation to capture Maduro was a “distraction.”

During an appearance on MSNOW on Saturday, Rep. Marilyn Strickland (D-Wash.) suggested the timing of Maduro's capture served primarily as a distraction from issues Democrats plan to spotlight when Congress reconvenes, namely the upcoming anniversary of the Capitol riot on January 6, and the Epstein files.

"I think it was mentioned by one of your earlier speakers that Donald Trump is transactional, what he wants is access to those oil reserves," Strickland said.

"At the same time, this is also a big distraction. Look at the timing of this. We go back in session on Tuesday. We are going to talk about the Affordable Care Act premiums. We're going to talk about January 6, the Epstein files, the economy, all those things that are so important to the American people, and, what a coincidence, this happens."

She also drew a comparison between Maduro and Trump regarding election integrity.

"It also is not a surprise of the timing. We're going back to Congress next week... and we'll be talking about January 6, which is kind of ironic here, because...Maduro, he actually did steal two elections. And Donald Trump tried to do that on January 6, but he failed," Strickland said.

Strickland wasn’t the only one pushing the “distraction” angle.

 "It's not about drugs. If it was, Trump wouldn't have pardoned one of the largest narco traffickers in the world last month. It's about oil and regime change,” Rep. Alexandria Ocasio-Cortez (D-N.Y.) claimed.

And they need a trial now to pretend that it isn't. Especially to distract from Epstein + skyrocketing healthcare costs," she wrote.

However, these accusations ignored a glaring contradiction.

The Trump administration carried out an operation targeting a leader the Biden-Harris administration actively sought to apprehend. 

Secretary of State Antony Blinken announced on January 10, 2025, mere days before Joe Biden and Kamala Harris left office, that the State Department would increase the reward to $25 million for Maduro.

“In solidarity with the Venezuelan people, the U.S. Government and our partners around the world are taking action today,” Blinken announced in a statement on January 10, 2025.

“The Department of State is increasing the reward offers to up to $25 million each for information leading to the arrests and/or convictions of Nicolás Maduro and Maduro’s Minister of Interior Diosdado Cabello. The Department of State is also adding a new reward offer of up to $15 million for Maduro’s Defense Minister Vladimir Padrino López. These three reward offers stem from criminal narcotrafficking indictments announced in March 2020.”

Biden's outgoing administration framed the increased reward as part of coordinated international pressure on the illegitimate Maduro regime.

It appears that the only distraction going on here is from the Democrats, who don’t want the public to realize that Trump succeeded where Biden-Harris failed.

Tyler Durden Sun, 01/04/2026 - 13:25

OPEC+ Reaffirms Output Pause As Eight Producers Cite Market Stability

Authored by Tom Kool via OilPrice.com,

OPEC+ confirmed on Sunday that it will keep oil production steady through the first quarter of 2026, as eight key producers reaffirmed their commitment to market stability amid a steady global economic outlook and what they described as healthy oil market fundamentals.

Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman met virtually on January 4 to review global market conditions and outlook.

The group reiterated its decision, first announced on November 2, 2025, to pause planned production increases in February and March 2026, citing seasonal demand patterns.

Following the meeting, OPEC+ produced the following production table for February 2026:

In a joint statement, the eight producers said current market conditions remain supportive, pointing to relatively low global inventories as a sign that the oil market is well balanced despite last year’s sharp decline in crude prices.

Oil prices fell more than 18% in 2025, the steepest annual drop since the pandemic, as supply growth outpaced demand and concerns over a growing glut mounted.

The group also emphasized that the previously announced 1.65 million barrels per day of voluntary production cuts could be returned to the market either in part or in full, depending on evolving market conditions, and only in a gradual manner.

The producers stressed that flexibility remains central to their strategy, including the option to extend or reverse additional voluntary adjustments, such as the 2.2 million barrels per day of cuts announced in November 2023.

OPEC+ further reiterated its collective commitment to full conformity with the Declaration of Cooperation. The producers confirmed that any overproduction since January 2024 will be fully compensated, with compliance and compensation to be monitored by the Joint Ministerial Monitoring Committee (JMMC).

Despite heightened geopolitical tensions - including strains between Saudi Arabia and the UAE over Yemen and uncertainty surrounding Venezuela following the U.S. capture of President Nicolas Maduro - delegates said these developments did not alter the group’s near-term policy stance.

“In an environment this fragile, OPEC+ is choosing caution, preserving flexibility rather than introducing new uncertainty into an already volatile market,” said Jorge Leon, an analyst at consultant Rystad Energy AS.

“The political transition in Venezuela adds another major layer of uncertainty.”

Caracas may hold the world’s biggest oil reserves, but years of under - investment, mismanagement and international isolation have diminished the country to a fraction of its former standing.

But, bear in mind that...

When you hear that Venezuela has the world's largest proven oil reserves, remember that ~2/3 of that comes from the Chavez and Maduro governments using generous assumptions to reclassify large volumes of lower utility, heavy crude as recoverable. https://t.co/SSA7u8Ovjy pic.twitter.com/JG1VrIUqTo

— Dr. Robert Rohde (@RARohde) January 4, 2026

Venezuela currently pumps about one million barrels of oil a day, roughly a third of what it produced a decade ago and under 1% of global supplies.

Washington’s recent seizure and pursuit of tankers while it pressured Maduro’s regime helped curb output in the country’s critical Orinoco Belt by 25%.

Production could rise by about 150,000 barrels a day within a few months if sanctions are lifted, but getting back to 2 million barrels a day or higher would require “massive reforms” and large investments from international oil companies, according to consultants at Kpler.

The eight OPEC+ countries agreed to continue holding monthly meetings to assess market conditions, compliance levels, and compensation progress. Their next meeting is scheduled for February 1, 2026.

Tyler Durden Sun, 01/04/2026 - 12:50

Judge Convicted Of Helping Illegal Escape ICE Resigns, Faces 5 Years In Prison

A Milwaukee judge who was found guilty last month of obstructing federal agents by letting an illegal immigrant slip through a side door at her courthouse has resigned. 

Judge Hannah Dugan, who was convicted last month on a federal felony charge, was charged by federal prosecutors after she distracted federal agents who were trying to arrest Eduardo Flores-Ruiz, a Mexican citizen who had entered the United States illegally and was scheduled to appear before Dugan for a hearing in a state-level battery case. 

The indictment, dated May 13, 2025, accused her of obstructing the law by assisting Floriz-Ruiz to evade arrest, and falsely advising ICE agents that they required a judicial warrant to arrest him.

Dugan was found guilty by a federal grand jury on Dec. 18, 2025 on one count of violating Section 1505 of Title 18 of the US code. Her resignation comes as GOP members of the Wisconsin State Legislature were preparing to impeach her and remove her from office following her conviction. 

Democrat Gov. Tony Evers said his office had received her resignation letter and would move forward with filling the judicial vacancy. In her resignation letter addressed to Evers, Dugan said that during her years on the bench, she oversaw thousands of cases with "a commitment to treat all persons with dignity and respect, to act justly, deliberately and consistently, and to maintain a courtroom with the decorum and safety the public deserves." (as opposed to following the law, of course). 

"As you know, I am the subject of unprecedented federal legal proceedings, which are far from concluded but which present immense and complex challenges that threaten the independence of our judiciary," the letter continues.

"I am pursuing this fight for myself and for our independent judiciary," she added. 

Dugan, who has not been sentenced, faces up to five years in prison.

Her attorneys filed a motion with the trial judge, U.S. District Judge Lynn Adelman of the Eastern District of Wisconsin, on Dec. 23, 2025, asking to set aside the conviction. 

Hannah Dugan broke the law, was found guilty by a jury, and is resigning.

A word to the wise: Don’t obstruct federal law enforcement when they are arresting a criminal illegal alien. https://t.co/fNkNdvMRn5

— Rep. Tom Tiffany (@RepTiffany) January 3, 2026

Tyler Durden Sun, 01/04/2026 - 12:15

The Bearish Counterpoint: What Could Go Wrong For Markets In 2026?

Authored by Lance Roberts via RealInvestmentAdvice.com,

Wall Street’s market outlook enters 2026 in a bullish mood, albeit with nuance. After three consecutive years of substantial gains in major indexes, many strategists expect the U.S. stock market to extend its rally into another year, with the central Wall Street banks highlighting several drivers supporting continued upside, from increases in productivity due to AI to the tax cuts and deregulation from the OBBBA.

Goldman Sachs, for example, forecasts that S&P 500 earnings per share will accelerate in 2026, rising approximately 12 percent from 2025 levels. This earnings momentum underpins the constructive view on equities, and they see opportunities not just in prominent technology names, but also across cyclical sectors such as small caps, non-residential construction, and consumer stocks exposed to the middle-income consumer.

Furthermore, global growth is expected to stay sturdy in 2026. Goldman Sachs projects 2.8 percent global GDP growth, up from consensus expectations, with the U.S. economy outpacing most major peers. China’s growth is also forecast to improve, broadening the backdrop for global stock demand.

Morgan Stanley echoes a positive but tempered outlook, suggesting that U.S. equities will outperform global peers, a reversal from last year, with the S&P 500 projected to rise to about 7,800.

Regardless of the firm, several key structural factors universally support their bullish outlook:

• Monetary policy is expected to remain supportive. The Federal Reserve has already enacted rate cuts in 2025, and further moderation in borrowing costs could preserve liquidity and investment demand. Historical data indicate that positive equity returns occur when rate cuts coincide with established bull markets.

• Earnings growth is forecast to remain robust. Beyond headline numbers, broad sectors could benefit from technological adoption and operational leverage as companies expand margins.

• Sector breadth may improve. After several years of narrow leadership dominated by mega‑cap tech, strategists see room for cyclicals, financials, and industrials to play a larger role in 2026 performance.

This combination drives the bullish premise: 2026 will not just be about extending the past year’s returns, but consolidating gains across more parts of the market. That view is supported by the earnings expectations for this year, with the Magnificent 7 growth rates slowing but the bottom 493 surging.

So, with such a bullish market outlook, what is there to worry about?

The Bearish Counterpoint: What Could Go Wrong?

Despite the bullish narrative, a thoughtful case against unbridled optimism exists. Unlike the simple bull versus bear dichotomy, credible risks could significantly dampen or reverse the more bullish market outlooks.

First, we would be remiss not to mention valuations. Forward valuations are elevated, and while they are terrible market timing devices, they do represent investor sentiment, which is universally bullish. This means the market’s upside is more sensitive to disappointments in earnings or macro trends. If earnings growth does not materialize as expected, stocks may struggle, even in a benign macro setting. We discussed this recently, in “Risks To Market Outlooks.“

“Notably, these forecasts rest on an assumption that the economy will not only avoid recession but reaccelerate in the face of waning inflation. As noted, equity markets have responded by pushing valuations higher across major indexes, with price-to-earnings ratios well above historical medians. Simultaneously, investors have rewarded narratives built on the idea of a soft landing and a return to pre-pandemic trends.”

“However, this narrative appears to overlook the trends in recent economic data. Inflation expectations have moderated, not because of increased demand, but due to weaker consumption and cooling labor dynamics. As recent economic data indicate, disinflation has accompanied slower GDP growth and a decline in personal consumption momentum. If the economy were indeed set to reaccelerate, these trends should be increasing rather than returning to historical averages.”

Secondly, the market is pricing a “soft landing” where inflation cools, growth persists, and rate cuts continue. Yet, that outcome would be historically rare. When inflation falls this quickly, it typically reflects a slowdown in demand rather than policy success. Additionally, the strong relationship between economic growth and earnings should not be dismissed. That disconnect exposes investors to market risk if growth does not materialize as expected and valuations are reconsidered.

Furthermore, if inflation stubbornly remains above targets or the labor market shows uneven data, the Federal Reserve might delay or reduce the magnitude of rate cuts. A less accommodative stance could tighten financial conditions and pressure asset prices as market outlooks reverse.

Third, earnings growth estimates are very optimistic. As we head into 2026, strategists are hopeful that the bottom 493 stocks will begin to grow earnings aggressively. As noted previously:

“Wall Street currently expects the bottom 493 stocks to contribute more to earnings in 2026 than they have in the past 3 years. This is notable in that, over the past three years, the average growth rate for the bottom 493 stocks was less than 3%. Yet over the next 2 years, that earnings growth is expected to average above 11%. 

“Furthermore, the outlook is even more exuberant for the most economically sensitive stocks. Small and mid-cap companies struggled to produce earnings growth during the previous three years of robust economic growth, driven by monetary and fiscal stimulus. However, next year, even if the Fed’s soft landing narrative is valid, they are expected to see a surge in earnings growth rates of nearly 60%.”

There is nothing wrong with having an optimistic market outlook when it comes to investing; however, “outlooks can change rapidly,” which is a significant market risk, particularly when expectations and valuations are elevated.

Third, geopolitical and global trade pressures persist as a threat to more bullish market outlooks. Trade friction, geopolitical tension, or currency instability all contribute to sudden shifts in risk tolerance. Recent fund manager surveys identify AI valuation bubbles, bond market turbulence, inflation resurgence, credit stresses, and trade escalations as top concerns.

Which one will it be that “derails the apple cart?”

The most likely answer is that it will be none of them. This is because when investors are monitoring some risk, they make portfolio changes to hedge against that risk. Therefore, that “risk” becomes priced into the market. Most likely, the risk that eventually manifests itself will be something that no one is expecting. That “surprise” is what causes markets to buckle. Consider Trump’s tariff announcement last March; investors had to materially reprice the markets for a rapid change in forward expectations of earnings.

Finally, investors have become extremely complacent about above-average returns. Take a look at the total annual returns of the market since 2019.

• 2019 +31.2%

• 2020 +18.0%

• 2021 +28.5%

• 2022 -18.0%

• 2023 +26.1%

• 2024 +24.9%

• 2025 +17.8%

While those returns have been very healthy, they are detached from the underlying drivers of economic growth, which is why valuations have risen so much in recent years.

With analysts’ market outlooks based on strong revenue growth and margin expansion, several factors could derail the markets. As is always the case, a market priced for perfection leaves little room for earnings misses or growth shocks. If reality falls short of those optimistic assumptions, market risk could rise abruptly.

Tyler Durden Sun, 01/04/2026 - 11:40

Europe's AI Ambitions Threatened By Soaring Memory Chip Prices

Submitted by Thomas Kolbe

The ongoing boom in artificial intelligence is sending memory chip prices skyrocketing, putting pressure on data center operators. Europe currently lacks a strategy to break free from this price spiral.

The persistent surge in digitalization, particularly in AI, requires immense data storage capacity and is driving global demand for memory chips. These so-called RAM modules (Random Access Memory) have transformed from classic commodity products into highly specialized, strategic key resources of the new economy.

This strategic battle over memory chips is also reflected these weeks in the struggle for pole position between the United States and China. Just a few weeks ago, the administration of U.S. President Donald Trump granted American chipmaker NVIDIA limited permission to export its chips to China—while simultaneously collecting a 25 percent export levy from the Chinese side. 

It is clear that the U.S. will increasingly use chip exports as a geopolitical lever, much like it has already done with LNG deliveries to Europe.

Memory Chips as the Foundation of the Digital Economy 

These chips are used in smartphones, data centers, AI applications, cloud solutions, servers, and nearly every industrial production process. Demand for memory chips such as DRAM and NAND Flash has surged massively over the past five years. Combined global revenue for these chips was around $120 billion in 2020—about 25 percent of the overall semiconductor market—and has increased to roughly $176 billion this year.

Worldwide lockdowns in 2020 further accelerated this trend. At the same time, they posed enormous challenges for the global economy in both energy production and memory chip manufacturing.

Europe, in particular, now faces a severe shortage problem as skyrocketing demand pushes chip prices ever higher. A few highly specialized manufacturers, such as Samsung and SK Hynix, are increasingly in the political spotlight. Their enormous pricing power directly affects European data center operators. With such market concentration, prices are rising not linearly, but exponentially, systematically stalling the expansion of European data center capacity.

Exponential Price Pressure 

To provide some relief, Samsung announced it would continue producing the soon-to-be-phased-out DDR4 standard chip beyond 2026, before factories fully switch to the new DDR5 generation. The crisis has become so acute that even this outdated technology is being artificially kept alive. The price sensitivity is stark: a 16GB DDR4 chip that previously cost around $20 now exceeds $60—and can be even higher in urgent data center upgrades.

This is not classic monetary inflation, but scarcity-driven price pressure. The crisis could last for years, with no relief in sight—particularly impacting AI and high-performance computing.

European cloud providers and mid-sized data centers face the dilemma of massive price hikes alongside slim margins. High electricity costs and shrinking financial buffers in Europe, especially Germany, exacerbate the issue. Smaller European data center operators are likely to be forced out of business under these conditions.

Europe’s Dilemma 

Apple represents an exception. The company relies on highly optimized specialty RAM modules (LPDDR5X) and has strategically secured long-term supply contracts, meaning the current chip supply crisis will hit Apple much later than other providers.

From a European perspective, the situation could hardly be more dramatic. Intel’s planned chip production facility in Germany highlights the dilemma: while it would have little immediate impact on the shortage of specialized memory chips, it exposes the core problem—billion-euro subsidies are insufficient to sustainably build competitive chip manufacturing in Europe. High energy costs and excessive bureaucracy cannot be subsidized away.

Big Goals, Limited Impact 

In response, the European Commission launched the European Chips Act in September 2023, a strategic framework aimed at strengthening Europe’s position in the global semiconductor market and reducing dependence on imports from Taiwan, South Korea, the U.S., and China. Europe currently accounts for well under 15 percent of the global chip market. Brussels is following a familiar political pattern: funding programs for startups, SMEs, research institutions, and competence centers to build knowledge, infrastructure, and retain talent.

The EU aims to locate around 20 percent of global chip production within Europe by 2030. For example, €920 million in funding has been mobilized for Infineon in Dresden—the largest semiconductor investment in the company’s history. The goal is to bring not only low-end production but large parts of the value chain to Europe. Public and private investments totaling €43 billion are targeted by 2030.

Intel’s example highlights structural challenges: European policy supports chip production, but creating a dynamic environment for startups, venture capital, and entrepreneurial innovation is left out. Greater reliance on free capital markets, less state intervention, and reduced regulation could make Europe’s technological independence more realistic. Yet, neither Brussels nor Berlin appears ready for such a paradigm shift.

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About the author: Thomas Kolbe is a German graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Sun, 01/04/2026 - 10:30