Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• No major economic releases scheduled.

From Cotality U.S. home equity dips further this fall

Cotality ... today released the Homeowner Equity Report (HER) for the third quarter of 2025. The report reveals a mixed picture of homeowner equity gains across the United States.

Borrower equity decreased year over year, declining by $373.8 billion or 2.1%. That decline translates to an overall net equity to $17.1 trillion for homes with a mortgage. Homeowner equity peaked at close to $17.7 trillion in the second quarter of 2024 and has since oscillated between $17 trillion and $17.6 trillion.

"As the pace of home price growth slows and markets recalibrate from pandemic peaks, we’re seeing a clear shift in equity trends,” said Cotality Chief Economist Dr. Selma Hepp. “Negative equity is on the rise, driven in part by affordability challenges that have led many first-time and lower-income buyers to over-leverage through piggyback loans or minimal down payments. While overall home equity remains elevated, recent purchasers with smaller down payments may now face negative equity.”
...
While the share of homeowners in negative equity reduced in the second quarter of this year, it ticked up again in the third quarter. In the current quarter, 2.2% of homeowners have negative equity or 1.2 million properties. Another way to think about it is that there’s been a 21% year-over-year rise in the number of homeowners in negative equity with 216,000 more homes falling into the category in the third quarter, a trend that has been gaining steam and signals possible market difficulties ahead.

Compared to the second quarter, there has been a 6.7% increase in the number of mortgaged residential properties sitting in negative equity. This slide in equity tracks with market cycles as the spring homebuying season faded into the slower fall market, during which period there’s a more consistent weakness in home price gains across markets.

This graph compares the distribution of equity (and negative equity) in Q3 vs. Q2. 
About 1.2 million properties are in negative equity (owe more than the property is worth), but this is a fairly small percentage historically.
Most homeowners have substantial equity in their homes.

OPEC Maintains Bullish Oil Demand Outlook, IEA Trims Oil Glut Forecast

Oil prices are lower this morning despite a less-hawkish-than-feared Fed cut and a double-whammy of relative optimism from OPEC and the IEA...

IEA Trims Oil Glut Forecast as Supply Surge Halts

OilPrice.com's Tsvetana Paraskova reports that the oil market still faces record oversupply next year, according to the monthly report by the International Energy Agency (IEA), but the glut estimate is now trimmed by about 230,000 barrels per day compared to the November forecast. 

The market is headed to as much as 3.84 million barrels per day (bpd) of supply exceeding demand in 2026, the IEA said on Thursday in its closely-watched report for December.  

While this still is a considerable glut, it’s lower than the 4.09 million bpd implied oversupply expected in the November report. 

In today’s report, the IEA said that the projected global oil surplus in the fourth quarter of 2025 has narrowed since last month’s report, “as the relentless surge in global oil supply came to an abrupt halt.” 

Total global oil supply dipped by 610,000 bpd in November compared to October and by a whopping 1.5 million bpd from September’s all-time high, the IEA noted. 

OPEC+ accounted for 80% of the decline over October and November, reflecting significant unplanned outages in Kuwait and Kazakhstan, while oil output from sanctions-hit Russia and Venezuela plunged. 

Russia’s total oil exports are estimated to have plummeted by about 400,000 bpd in November to 6.9 million bpd, as buyers assessed the implications and risks associated with more stringent sanctions. 

Buyers, especially in Russia’s second-biggest crude oil customer, India, are steering clear of any Rosneft and Lukoil-related cargoes, for fear of running afoul of the U.S. Administration while India and the United States are still locked in difficult trade negotiations. 

The IEA noted in its report the apparent disconnect between the current global oil surplus and inventories near decade lows at key pricing hubs. 

Despite record volumes of oil piling up on water, benchmark crude oil prices eased only marginally in November, because “in stark contrast to the broader picture, crude and refined product stocks in key pricing hubs have seen only marginal builds,” the agency said. 

OPEC Holds Firm on Bullish Oil Demand Outlook for 2026

As Charles Kennedy reports at OilPrice.com, global oil demand will rise by about 1.4 million barrels per day (bpd) next year, supported by solid economic growth, OPEC said in its monthly report ton Thursday, keeping its demand forecasts unchanged from last month. 

Unlike other forecasters, investment banks, and analysts, OPEC continues to expect robust demand growth in 2026 that will be higher than the estimated increase for 2025 of about 1.3 million bpd, forecasts in the cartel’s Monthly Oil Market Report (MOMR) showed on Thursday. 

Figures about the balance of supply and demand in OPEC’s report also suggest that the cartel expects a balanced market next year.

Demand for crude from the OPEC+ producers is expected at 43.0 million bpd in 2026, up by 60,000 bpd compared to the projection for 2025, OPEC said.  

At the same time, crude oil production by the countries in the OPEC+ pact averaged 43.06 million bpd in November, a rise by 43,000 bpd from October, compared to the available secondary sources in OPEC’s report. 

After December, OPEC+ producers will be pausing their targeted monthly production increases during the first quarter of 2026. 

OPEC expects rival non-OPEC+ oil supply to grow by about 600,000 bpd next year, versus growth of some 1 million bpd expected for 2025. 

The rise in non-OPEC+ output is expected to be driven by offshore start-ups across Latin America and the Gulf of Mexico, increased NGLs production in the U.S., Argentina’s tight oil production, and the scaling of oil sands projects in Canada. Latin America is projected to lead non-OPEC+ growth, accounting for about two-thirds of the total, followed by Canada and the U.S.

This projection, while not new for OPEC, reiterates the cartel’s view that U.S. oil production growth will slow down next year.   

Signals have started to emerge in the shale patch and from industry executives that WTI crude prices below the $60 per barrel mark will put the brakes on America’s shale growth. 

Tyler Durden Thu, 12/11/2025 - 15:20

Zelensky Floats Holding Referendum On Giving Up Land For Peace

"I am definitely in favor of elections," Ukraine's President Zelensky said Thursday. "The most important thing is that they are held legitimately." He's presenting a position of willingness to compromise amid the increasing pressure from Trump. Is this but a ruse to buy time? 

President Trump is meanwhile pressing European leaders to force Zelensky to accept the US peace plan which hinges on major territorial concessions and a cap on Ukraine's armed forces. The Wall Street Journal is reporting that the US president held a tense call with his German, French and British counterparts, where he conveyed his frustrations with Zelensky for not seriously engaging with the US proposal.

Via Reuters

The Ukrainian government has submitted a response to Washington, but "big gaps" remain, WSJ says. This back-and-forth over what Europe-Ukraine vs. Washington finds an acceptable compromise is nothing new.

But the truly new proposal from the Ukrainian side is that it is now floating the possibility of a popular referendum on the matter.

"Territory and security guarantees remain the primary sticking points for Ukraine. Zelensky maintains that Ukraine has no legal or moral rights to cede land to Russia," WSJ lays out by way of context. "Moscow has demanded Ukrainian withdrawal from the eastern province of Donetsk, which Russia hasn’t been able to take fully by force."

Ceding territory by vote? WSJ continues...

Zelensky has long said that as president he can’t unilaterally decide the fate of Ukrainian territories, which must be approved by the Ukrainian people.

In early fall, 54% Ukrainians opposed ceding land, even if it meant continuing the war and risked the country’s independence, compared with 38% who were open to some territorial concessions, in a poll conducted by Kyiv International Institute of Sociology.

But at this point there may actually be more willingness to take such a step on the part of the Ukrainian masses. After all, there's greater awareness at this point of how poorly the army is faring along the front lines. 

There's also a power crisis ahead of what promises to be a harsh winter. Ukraine simply can't get the parts to repair its energy grid fast enough, amid unrelenting Russian drone and missile strikes.

Zelensky has emphasized a big caveat to the possibility of elections - whether a vote for the presidency or on the issue of giving up land: his international backers must help guarantee a safe and fair vote.

This means Russia might have to agree to a temporary ceasefire while any potential election proceeds, according to Kiev's thinking. Such could prove a tall order - and maybe for Zelensky this exactly the point.

Trump is meanwhile fed up, his patience wearing thin...

White House on Russia-Ukraine:

Trump is extremely frustrated with both sides of this war.

He is sick of meetings just for the sake of meeting.

He does not want anymore talk, he wants action. pic.twitter.com/6tOmFkrM1W

— Clash Report (@clashreport) December 11, 2025

Tyler Durden Thu, 12/11/2025 - 15:00

Trump Admin Pulls 9,500 Truck Drivers Off The Road For Failing English Tests

Authored by Tom Ozimek via The Epoch Times,

Transportation Secretary Sean Duffy said more than 9,500 commercial truckers have been taken out of service for failing English-language proficiency checks, a cumulative enforcement tally he said highlights an ongoing effort to keep unqualified operators from posing dangers on the nation’s roads.

“We’ve now knocked 9,500 truck drivers out of service for failing to speak our national language — ENGLISH!” Duffy wrote in a Dec. 10 post on X. “This administration will always put you and your family’s safety first.”

The tally reflects cumulative enforcement actions taken since May, when the Department of Transportation reinstated out-of-service penalties for drivers who cannot read or speak English well enough to operate a commercial motor vehicle.

President Donald Trump and Duffy have both said the renewed enforcement is necessary to ensure truckers can understand road signs, communicate with police and inspectors, and follow instructions at checkpoints and weigh stations.

“America First means safety first,” Duffy said in May. “Americans are a lot safer on roads alongside truckers who can understand and interpret our traffic signs. This common-sense change ensures the penalty for failure to comply is more than a slap on the wrist.”

The crackdown comes after Trump signed an executive order in March designating English as the country’s official language. In April, he signed another order directing Duffy to ensure that commercial truck drivers who fail to meet English-language proficiency standards are taken out of service.

“My Administration will enforce the law to protect the safety of American truckers, drivers, passengers, and others, including by upholding the safety enforcement regulations that ensure that anyone behind the wheel of a commercial vehicle is properly qualified and proficient in our national language, English,” Trump wrote in the April order. “This is common sense.”

Trump’s April order scrapped an Obama-era rule under which inspectors could cite truckers for failing English requirements but were not allowed to remove them from service, the Federal Motor Carrier Safety Administration said in a May memo.

Fatal Crashes Prompt Wider Crackdown

The English-proficiency push is part of a broader campaign to tighten oversight of commercial licensing after a series of fatal crashes involving foreign or nondomiciled drivers. Several of those drivers were later found to have failed English tests or held licenses issued in error by states.

In one Florida case, Indian national Harjinder Singh was accused of killing three people after making an illegal U-turn in a semi-truck.

Harjinder Singh is escorted onto an airplane by Florida Lt. Gov. Jay Collins and law enforcement in Stockton, Calif., on Aug. 21, 2025. Benjamin Fanjoy/AP Photo

Officials said Singh—who was in the United States illegally—failed an English exam, answered only two of 12 questions correctly, and could identify just one of four road signs. Despite that, Washington state issued him a full-term commercial driver’s license (CDL) in 2023, and California issued a second CDL in 2024.

Singh pleaded not guilty in September. The Epoch Times reached out to Singh’s attorney for comment at the time but did not receive a response.

Federal reviews have identified similar cases in California, New York, Pennsylvania, and other states, prompting widespread scrutiny of state licensing practices.

States Face Pressure, Funding Loss

The mass disqualifications follow the Transportation Department’s ongoing audit of how states issue nondomiciled CDLs to foreign drivers. In September, Duffy issued emergency restrictions after auditors found a “catastrophic pattern” of noncompliance in multiple jurisdictions, with California singled out as the most severe case.

The audit found that more than 25 percent of California’s no-domiciled CDLs were issued improperly, many to drivers whose lawful presence in the United States had expired months or years earlier. One Brazilian national received endorsements to operate school buses after his immigration documents had lapsed, in a case the Transportation Department described as shocking.

A sign at a press conference held by U.S. Secretary of Transportation Sean Duffy at the Department of Transportation's headquarters in Washington on Oct. 30, 2025. Arjun Singh/The Epoch Times

“What our team has discovered should disturb and anger every American,” Duffy said in September. “Licenses to operate a massive, 80,000-pound truck are being issued to dangerous foreign drivers–often times illegally. This is a direct threat to the safety of every family on the road, and I won’t stand for it.”

The Transportation Department has since threatened to withhold tens of millions of dollars in federal highway safety funds from California, Washington, and New Mexico unless they fully enforce English-language rules and revoke improperly issued licenses. California alone risks losing more than $40 million, though state officials have said they already require English testing during commercial road exams.

The language crackdown coincides with heightened immigration enforcement targeting commercial drivers who are in the country illegally.

Homeland Security Secretary Kristi Noem said in October that 146 illegal immigrants operating semi-trucks were arrested during a joint ICE–Indiana State Police operation near the Illinois border. More than 40 drivers held CDLs issued by states including California, Illinois, and New York.

“Far too many innocent Americans have been killed by illegal aliens driving semi-trucks and big rigs,” Noem said in an Oct. 30 statement. “And yet, sanctuary states around the country have been issuing illegal aliens commercial driver’s licenses. The Trump Administration is ending the chaos.”

Tyler Durden Thu, 12/11/2025 - 14:40

Putin Doubles Down On Backing Maduro As US Prepares To Seize More Oil Tankers

The Kremlin confirmed that Russian President Vladimir Putin spoke by phone with Venezuelan President Nicolás Maduro on Thursday and reassured him of Moscow's support, at a moment he's facing likely regime change action at the hands of US military might.

Putin expressed support for Maduro's rule "in the face of growing external pressure," but they also discussed their advancing a strategic partnership and the areas of ongoing economic and energy projects. Moscow has long stood by Caracas' side throughout years of growing isolation and sanctions.

The Kremlin statement added that "Putin expressed solidarity with the Venezuelan people and reaffirmed his support for the Maduro government's policy of safeguarding national interests and sovereignty amid mounting external pressure."

Wednesday saw elite American special forces operators board and seize a Venezuelan oil tanker. They were filmed rappelling onto the ship's deck from a helicopter, with rifles at the ready.

This has serious repercussions for Russia too, given Moscow has been a longtime trading partner with Caracas, and it raises the potential that Russian tankers in the Caribbean could be intercepted.

Perhaps even more notably, Reuters reports that Washington is preparing to intercept more ships transporting Venezuelan oil following the seizure of a tanker this week, as it increases pressure on Venezuelan President Nicolas Maduro, six sources familiar with the matter said on Thursday.

Further direct interventions by the U.S. are expected in the coming weeks targeting ships carrying Venezuelan oil that may also have transported oil from other countries targeted by U.S. sanctions, such as Iran, according to the sources familiar with the matter who declined to be named due to the sensitivity of the issue.

Last weekend Russian Deputy Foreign Minister Sergei Ryabkov said that his country would stand "shoulder to shoulder" with Venezuela in this time of crisis, but didn't offer anything concrete.

"This is primarily due to the desire to assert the unquestioning dominance of the United States in the region, this is a trademark of the Trump administration," Ryabkov explained.

According to some more of the latest developments via Newsweek:

• Initial reports on Wednesday cited U.S. officials saying the Coast Guard carried out the tanker seizure under international maritime law, targeting vessels tied to alleged illicit PDVSA-linked crude shipments.
• U.S President Donald Trump later confirmed the seizure, hinting that “other things are happening,” but offered no further details.
• A senior Trump administration official described the move as a “judicial enforcement action on a stateless vessel” last docked in Venezuela.
• Oil prices jumped on the news: Brent crude rose 0.8 percent to $62.35 a barrel, and West Texas Intermediate climbed to $58.46.
• Analysts warn the seizure may further strain U.S.–Venezuela relations and deter shippers already wary of handling sanctioned Venezuelan crude.
• Maduro has long accused Washington of seeking to overthrow him and seize Venezuela’s vast oil reserves; the nation’s production has fallen from over 2 million barrels a day to roughly 1 million.
• The seizure comes after Trump renewed threats of intervention by land, air, or sea, including a recent U.S. fighter jet flyover near Venezuelan airspace.
• Caracas condemned the action as “international piracy” and “brazen theft,” accusing the U.S. of trying to control its natural resources.
• Trump called the tanker the “largest ever” seized by the U.S.

Some hawks have long viewed Venezuela as a Latin American satellite state of Russian influence...

According to this column, "In Venezuela, the Department of War is indeed playing offense, as Trump promised, but the opponent isn’t really Maduro, it's Putin" pic.twitter.com/1W0ros2WvM

— Michael Tracey (@mtracey) December 7, 2025

While Russia has been a longtime ally of President Maduro, it is unlikely to come to his defense in any direct way, also given the delicate and sensitive efforts to improve bilateral ties with Washington amid talks to de-escalate the Ukraine war. This despite Caracas having formally pleaded for more help from Moscow of late, including arms deliveries.

Tyler Durden Thu, 12/11/2025 - 14:00

Impeachment Articles Filed Against Robert F. Kennedy Jr.

Authored by Jonathan Turley,

I recently wrote about the absurdity of the Democratic effort to impeach Defense Secretary Pete Hegseth. I have also opposed Republican calls to impeach judges. Impeachment mania has returned for the midterm elections. However, on the scale of utter lunacy, the call to impeach Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. takes the cake.

This effort is being led by Rep. Haley Stevens (D-MI), who is running for Senate and has decided that the best way to achieve that distinction is to turn the constitutional process into a mockery.In academic writings, testimony (including at the impeachment hearings of Clinton, Trump, and Biden), and litigation (as the lead counsel in the last judicial impeachment trial), I have long argued against such ill-defined articles for impeachment.Stevens is seeking to impeach Kennedy for turning “his back on science”:

“Today, I formally introduced articles of impeachment against Robert F. Kennedy, Jr. RFK Jr. has turned his back on science and the safety of the American people. Michiganders cannot take another day of his chaos.”

Many Americans welcome Kennedy’s efforts to make food healthier and to challenge the status quo at HHS. Others, like Stevens, have strong objections to those policies. This is a good-faith and worthy debate for us to have. For years, there was little debate on such questions.

Indeed, in the prior Administration, to challenge prevailing expert opinion was to risk being labeled a wingnut or conspiracist. The very same people who are calling for Kennedy’s head were part of the mob denouncing dissenters in the scientific community, or those who remained silent as scientists were fired, censored, and cancelled.

The most anti-science position was to demand compliance with the orthodoxy of the pandemic years. Take Jay Bhattacharya, who co-authored the Great Barrington Declaration and was a vocal critic of COVID-19 policies.

Bhattacharya is now the 18th director of the National Institutes of Health and is working with Kennedy to change the culture of groupthink among health researchers and regulators in the government.

Bhattacharya was censored, blacklisted, and vilified due to his opposing views on health policy, including opposing wholesale shutdowns of schools and businesses. He was recently honored with the prestigious “Intellectual Freedom” award from the American Academy of Sciences and Letters.

He was one of many who were blacklisted for challenging pandemic policies. It did not matter that positions once denounced as “conspiracy theories” have been recognized or embraced by many.

Some argued that there was no need to shut down schools, which has led to a crisis in mental illness among the young and the loss of critical years of education. Other nations heeded such advice with more limited shutdowns (including keeping schools open) and did not experience our losses.

Others argued that the virus’s origin was likely the Chinese research lab in Wuhan. That position was denounced by the Washington Post as a “debunked” coronavirus “conspiracy theory.” The New York Times Science and Health reporter Apoorva Mandavilli called any mention of the lab theory “racist.”

Federal agencies now support the lab theory as the most likely based on the scientific evidence.

Likewise, many questioned the efficacy of those blue surgical masks and supported natural immunity to the virus — both positions were later recognized by the government.

Others questioned the six-foot rule, which shut down many businesses, as unsupported by science. In congressional testimony, Dr. Anthony Fauci recently admitted that the rule “sort of just appeared” and “wasn’t based on data.” Yet not only did it result in heavily enforced rules (and meltdowns) in public areas, but the media further ostracized dissenting critics.

Again, Fauci and other scientists did little to stand up for these scientists or call for free speech to be protected. As I discuss in my new book, “The Indispensable Right,” the result is that we never really had a national debate on many of these issues and the result was massive social and economic costs.

The point is that these attacks were “turning your back on science” by crushing dissent and stopping any meaningful debate on these issues. These same figures were wrong on the science, but now seek to lead another mob to impeach those seeking to change policies and practices at HHS and NIH.

Democrats clearly oppose Kennedy’s initiatives. Fine. Use legislation and the power of the purse to push back on those efforts if you have a majority in Congress. What you should not do is use impeachment to achieve what you could not achieve during the confirmation process.

Many on the left appear to have a particular hatred for Kennedy as a type of fallen angel, a progressive from an iconic Democratic family who rejected the party’s intolerance and direction. Hell hath no fury like a party scorned.

The pledges of new impeachments are ominous going into the midterm elections, where Democrats appear to be promising more of the same dysfunctional efforts to use this constitutional process for raw partisan advantage. Even with those who oppose Trump Administration policies, it is hard to believe that a majority of Americans want to return to the same chaos of the first term.

Tyler Durden Thu, 12/11/2025 - 13:45

Today, in the Calculated Risk Real Estate Newsletter: Mortgage Rates: The New Normal

A brief excerpt:

In June 2023, I wrote: Could 6% to 7% 30-Year Mortgage Rates be the "New Normal"?

At that time, the Fed Funds rate was set at 5 to 5-1/4 percent and the Ten Year Treasury was yielding 3-3/4%. I noted in 2023: “the 10-year yield would likely increase even as the Fed lowers the Fed Funds rate.”

And that is what happened. The 10-year is yielding 4-1/4% this morning. This is a key point. Just because the FOMC is cutting rates, doesn’t necessarily mean long rates will follow.

Note: For a discussion of the R* and the neutral rate, see housing economist Tom Lawler's post on Tuesday.

[I]f, as expected, the FOMC decides to cut its federal funds rate target by 25 bp tomorrow, then the resulting level of the federal funds rate will be very close to the neutral nominal policy rate.

The following graph is from Mortgage News Daily and shows the 30-year mortgage rate since 2000. Rates were in the 5.5% to 6.5% range prior to the housing bust and financial crisis. Then rates were in the 3.5% to 5% range for over a decade prior to the pandemic. Currently rates are at 6.30% for 30-year mortgage rates.

There is much more in the article.

Dems Are "Greatest Con Artists" When It Comes To Inflation Disaster

Authored by Steve Watson via Modernity.news,

In a fresh interview, White House Press Secretary Karoline Leavitt exposed the left’s blatant hypocrisy on economic issues that have hammered everyday Americans for years.

Leavitt hammered Democrats for posing as saviors on affordability while ignoring their own role in fueling runaway inflation during the Biden era.

Appearing on Fox News, Leavitt labeled Democrats “the greatest CON ARTISTS in American politics!” She zeroed in on their empty rhetoric, stating, “They are pretending to champion the issue of affordability when they themselves created the worst inflation crisis in a generation.”

? BREAKING: Karoline Leavitt NUKES Democrats as "the greatest CON ARTISTS in American politics!"

"They are pretending to champion the issue of affordability when they themselves created the worst inflation crisis in a generation."

"You can't create a problem and then turn… pic.twitter.com/qBjEr1jQoV

— Eric Daugherty (@EricLDaugh) December 9, 2025

She drove the point home, noting “You can’t create a problem and then turn around and say, I’m the best person to fix it!”

Leavitt emphasized that voters see through the charade, adding, “that’s why President Trump was reelected to fix it. And that’s exactly what he’s doing.”

The press secretary urged Republicans to step up their game, noting, “So as President Trump has been screaming from the rooftops, Republicans need to remain tough and smart, and they need to be more vocal about touting the accomplishments of this administration.”

She wrapped up by dismantling the Democrats’ claims to represent ordinary folks: “You can’t say you’re for the working man and woman when you vote to raise their taxes. Republicans and President Trump have a proven economic formula and agenda that’s working. It’s focused on bigger paychecks and lower prices, and that’s what President Trump will talk about tonight.”

Leavitt’s comments come against the backdrop of the Biden administration’s dismal economic track record, where inflation soared to levels not seen in decades. Under Biden, the average year-over-year inflation rate hit nearly 5%, with a peak of 9.1% in mid-2022 – a far cry from the stable, low-inflation environment of Trump’s first term. 

Cumulative price increases reached a staggering 21.5% over Biden’s four years, squeezing family budgets on everything from groceries to housing.

This wasn’t some unavoidable global hiccup; it stemmed from reckless spending sprees and anti-energy policies that crippled domestic production.

Democrats flooded the economy with trillions in unchecked stimulus, igniting price hikes that disproportionately burdened working-class Americans. Meanwhile, their war on fossil fuels drove up energy costs, amplifying the pain at every turn.

Contrast that with Trump’s approach, which prioritizes unleashing U.S. energy independence and cutting red tape to boost growth. The results are already showing, proving Leavitt’s point that Republicans hold the winning formula for prosperity.

Nowhere is the Trump turnaround more evident than at the gas pump, where prices have tumbled to levels unseen in decades. Americans are stunned by the rapid drop, crediting President Trump’s pro-drilling policies and focus on energy dominance.

In Colorado, one driver captured the widespread disbelief: “I ain’t seen the gas $1.83 since the F-ing early 2000s! What the F goin’ on? What the hell goin’ on?!”

? WOW! Americans can't BELIEVE how cheap President Trump got gas

Colorado: "I ain't seen the gas $1.83 since the F-ing early 2000s!"

"What the F goin' on? What the hell goin' on?!" ??pic.twitter.com/rZfhFt9HxX

— Eric Daugherty (@EricLDaugh) December 9, 2025

This sentiment echoes across the nation as Trump’s agenda slashes costs that skyrocketed under Biden. During Biden’s tenure, average gas prices hovered around $3.50 per gallon nationally, with spikes above $5 in some states – a direct hit from policies that hampered drilling and pipelines.

 Under Trump, Americans are seeing multi-year lows, with Colorado’s current averages dipping below $2.50 and trending even lower in spots.

These plummeting prices aren’t magic – they’re the fruit of Trump’s drill-baby-drill strategy, reopening federal lands for exploration and fast-tracking infrastructure projects. 

It’s a stark rebuke to the green zealots who prioritized climate virtue-signaling over affordable energy for families.

The facts are clear: When America produces its own energy, prices fall, and independence grows. Trump’s policies are restoring that edge, putting more money back in pockets and easing the affordability crunch Democrats exacerbated.

Leavitt’s call for Republicans to get louder about these successes couldn’t be timelier. With Democrats scrambling to rewrite history and claim credit for fixes they obstructed, the GOP needs to own the narrative. Trump’s playbook – tax cuts, deregulation, and energy freedom – is delivering bigger paychecks and lower costs, just as promised.

As inflation cools and gas flows cheaply, Americans are experiencing the tangible benefits of ditching globalist agendas for pro-worker priorities. The contrast exposes the left’s con game: They broke it, but Trump is fixing it.

Democrats’ affordability charade crumbles under scrutiny, while Trump’s results speak for themselves. 

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Thu, 12/11/2025 - 13:05

Left-Wing Judge Orders "Maryland Father" Migrant Released From ICE Custody

A left-wing federal judge in Maryland has ordered the immediate release of Kilmar Armando Abrego Garcia, a Salvadoran migrant, directing Immigration and Customs Enforcement to free him by 5 p.m. EST today.

U.S. District Judge Paula Xinis ruled that the federal government lacked lawful authority to continue detaining Garcia, accused of smuggling migrants within the U.S. 

He has also been accused of being a member of the foreign terrorist organization MS-13. 

Kilmar Abrego Garcia is not a “Maryland Man”—he is an MS-13 gang member involved in human trafficking who entered the United States illegally. His deportation to El Salvador was always going to be the end result.@TriciaOhio pic.twitter.com/bd3s8wHM2T

— Homeland Security (@DHSgov) April 15, 2025

Xinis noted that his confinement appeared "constitutionally infirm" because there was no final deportation order on record and officials had failed to take reasonable steps to secure a lawful destination for removal.

The Trump administration previously admitted it mistakenly deported Garcia to El Salvador earlier this year, where he was jailed in the CECOT maximum-security prison before being flown back to the U.S. to face human smuggling charges in Tennessee.

Left-wing corporate media and Democrats routinely identified the accused migrant smuggler as a "Maryland Father" ...

Notice how the "Maryland Father" corporate media stories suddenly erupted earlier this year - there is an information war underway by the Democratic Party and their MSM cheerleaders. Time for this term to surge once again... 

The Justice Department could still appeal the ruling, and Trump officials may attempt to initiate new immigration proceedings against the migrant. Separately, Garcia still faces federal smuggling charges in Nashville.

Tyler Durden Thu, 12/11/2025 - 12:10

US 'Answers' China By Sending Pair Of Nuclear-Capable Bombers Over Sea Of Japan

On Wednesday we detailed that Japanese and South Korean fighter jets quickly answered a joint Russian-Chinese long-range bomber flight over the Western Pacific. Chinese J-16 fighter jets, two Russian Su-30 fighters and an A-50 early-warning aircraft were part of the provocative flight, which also passed close to South Korea. Russia's Defense Ministry (MoD) had confirmed its Tu-95MS strategic bombers and China’s H-9 strategic bombers conducted the eight hour flight over the Sea of Japan, the East China Sea and the Western Pacific - but that at no time was any country's airspace violated.

Washington has quickly injected itself into the ratcheting situation, coming amid a diplomatic and economic standoff between Japan and China, by sending US nuclear capable bombers on patrol over the Sea of Japan.

Handout photo from Japan's Ministry of Defense 

Japan's government confirmed its fighter planes joined the US bomber patrol, which was clearly a show of force signaling China and Russia.

"We confirmed the strong resolve of Japan and the United States not to allow any unilateral change of the status quo by force, as well as the readiness of the Self-Defense Forces and the US military," Japan's Defense Ministry said in a statement.

The fresh exercise with the US Air Force was conducted in "an increasingly severe security environment surrounding our country" - it said.

The flight included a pair of US B-52 bombers, escorted by Japanese F-35 stealth fighters and three F-15 jets. Beijing had presented the prior, longer flight as routine and in accord with international law.

"We consider it a grave concern from the standpoint of Japan's security," Japan's Chief of Staff, Joint Staff General Hiroaki Uchikura, commented of the prior Chinese-Russian aerial patrol.

Chinese Foreign Ministry spokesperson Guo Jiakun responded dismissively, saying "The Japanese side has no need to make a fuss about nothing or to take this personally."

All of this is taking place as a carrier strike group is sailing close to Japan, and after weekend PLA drills saw monitoring Japanese planes come under radar lock. The US State Department has condemned this, saying "China's actions are not conducive to regional peace and stability."

Much of these tensions hearken back to Prime Minister Sanae Takaichi's words to parliament last month wherein she left open the possibility of Japan sending its military to defend Taiwan in the event of a Chinese invasion.

This refers to this NYT story (https://t.co/rdFRYttqF9) in which they reveal there now exists an "overmatch brief" at the Pentagon that details China vs US military power. The name says it all...

Apparently when a senior US official read the brief he “turned pale” as he realized… https://t.co/fJBKMKzR08

— Arnaud Bertrand (@RnaudBertrand) December 11, 2025

Amid economic and diplomatic retaliation, including on the tourism sector, Japan was hoping for more vocal help from the Trump administration while feeling Beijing's wrath, but alas it hasn't come in a political form. However, the US sending bombers for an 'exercise' does seem fairly muscular.

Tyler Durden Thu, 12/11/2025 - 12:00

Over 30 Kamikaze Drones Sent On Moscow Overnight, Shutting Down Airports

An overnight drone assault on Russia by Ukraine was particularly large, including dozens of drones sent on Moscow. The Russian defense ministry said it down 287 drones across the country, one of the highest single-night totals ever recorded in the war.

Among these were 32 Ukrainian long-range kamikaze drone inbound on Moscow, reportedly intercepted. The disruption of airspace around Moscow was enough to briefly shut down area hubs and cause the delay of some 200 flights, impacting at least four airports.

Prior drone attacks have hit buildings in the heart of Moscow, via AFP

In addition to the 32 drones "intercepted and shot down" which were directly targeting the capital city, at least 40 more were headed toward the broader Moscow region, the defense ministry noted.

Two fertilizer plants were also targeted in the western Novgorod and Smolensk regions. Fire resulted at one of these, the Acron mineral fertilizer plant, among Russia's largest chemical producers.

The drone assault was quite extended in time too, with authorities saying it lasted over a period of some eight hours. Large drone waves were reported in other regions as well:

• Bryansk region: 118 drones
• Moscow region: 40
• Kaluga region: 40

Russian media has presented the overnight operation as an act of desperation at a moment Zelensky is feeling the pressure from Washington, and as Ukraine forces are in retreat on the battlefield:

A senior Russian diplomat linked the surge in Ukrainian attacks to growing US pressure on Vladimir Zelensky to accept a peace deal with Russia that would require concessions that Kiev has so far refused to make. Several European NATO states, meanwhile, back Zelensky’s uncompromising stance. US President Donald Trump said this week that the Ukrainian leader “has to be realistic” about the situation and “start accepting things” his administration is offering.

Indeed Trump as a of a late Wednesday presser has not backed off his calls for Zelensky to quickly accept reality and sign a peace deal and prepare for elections.

Trump:

Zelensky has to be realistic.

I do wonder about how long is it gonna be until they have an election?

82% of the Ukrainian people demand a settlement be made. pic.twitter.com/spV5k2JZJY

— Clash Report (@clashreport) December 10, 2025

Zelensky has said that while he's "ready" to organize and hold elections, it has to be done under safety, and that the international community must step up and help ensure this happens. He said he's ready to within 60 days if his government and external backers can offer a viable plan. But is he just buying time and pacifying Trump?

There's a possibility his own parliament could, under pressure, come back and say that elections are not a practical reality at this point. Likely Kiev will demand that Russia observe a ceasefire in order for the elections to take place.

Tyler Durden Thu, 12/11/2025 - 11:25

Affordability Crisis: Challenging The Poverty Line

Authored by Michael Lebowtiz via RealInvestmentAdvice.com,

Michael Green, Chief Strategist and Portfolio Manager at Simplify Asset Management, wrote a provocative Substack essay, Part 1: My Life Is A Lie, that is sparking a debate among economists and raising awareness of the affordability crisis. It’s not just the wonky economists debating the merits of his article; The Washington Post, CNN (News Central), FOX Business (Charles Payne), and social media are also critiquing it.

Michael uses the official poverty line calculation and what he deems the “Mathematical Valley” to help his readers better appreciate why affordability is becoming a hot topic. 

The Poverty Line

Per Michael Green:

But there was one number I had somehow never interrogated. One number that I simply accepted, the way a child accepts gravity.

The poverty line.

I don’t know why. It seemed apolitical, an actuarial fact calculated by serious people in government offices. A line someone else drew decades ago that we use to define who is “poor,” who is “middle class,” and who deserves help. It was infrastructure—invisible, unquestioned, foundational.

This week, while trying to understand why the American middle class feels poorer each year despite healthy GDP growth and low unemployment, I came across a sentence buried in a research paper:

“The U.S. poverty line is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.”

I read it again. Three times the minimum food budget.

I felt sick.

This article summarizes Michael Green’s perspective and opposing arguments regarding the poverty line. Bear in mind, as you read on, that there is no “right” poverty line. However, what Michael Green has successfully done is ignite a conversation about the large number of Americans who feel left behind economically and repeatedly raise affordability as a key political issue.

The 1963 Poverty Line Benchmark

Green’s analysis centers on the poverty line, which was established in the early 1960s by Mollie Orshansky. The original formula she developed was simple: take the cost of a basic basket of food for a family, multiply it by three (on the assumption that food accounted for about one-third of a household’s budget), and use that as the poverty threshold.

Her benchmark was then adjusted for inflation each year, but the underlying assumptions about household spending and needs haven’t been updated since. Per Green:

Orshansky’s food-times-three formula was crude, but as a crisis threshold—a measure of “too little”—it roughly corresponded to reality. A family spending one-third of its income on food would spend the other two-thirds on everything else, and those proportions more or less worked. Below that line, you were in genuine crisis. Above it, you had a fighting chance.

Notably, Green emphasizes that Orshansky’s poverty line served as a threshold. Those with incomes beneath this threshold were in crisis.

Orshanky’s Poverty Line Is Outdated

Green emphasizes the items we spend money on, and their costs compared to food prices have changed significantly since then. For example, he points out:

• Housing costs as a percentage of income rose significantly.

• Cell phones didn’t exist.

• Healthcare costs have become the most significant expense for most families.

• A second income became a necessity for many families after the formula was devised, leading to increased childcare expenses.

• He also notes rising college and transportation costs.

Simply, feeding a family no longer constitutes a third of total family budgets.  To wit, he states:

Housing now consumes 35 to 45 percent. Healthcare takes 15 to 25 percent. Childcare, for families with young children, can eat 20 to 40 percent.

Michael Green’s punchline:

Which means if you measured income inadequacy today the way Orshansky measured it in 1963, the threshold for a family of four wouldn’t be $31,200.

It would be somewhere between $130,000 and $150,000.

What does that tell you about the $31,200 line we still use?

It tells you we are measuring starvation.

Green’s Data Analysis

Green supports his theory with a basic family budget based on national averages. He applies it to a family earning the median household income of $80,000. The results, as we share below, cast significant doubt on the value of the current $31,200 poverty line. Furthermore, they argue that at least half of the nation is “living in deep poverty.” Per Green:

I wanted to see what would happen if I ignored the official stats and simply calculated the cost of existing. I built a Basic Needs budget for a family of four (two earners, two kids). No vacations, no Netflix, no luxury. Just the “Participation Tickets” required to hold a job and raise kids in 2024.

Using conservative, national-average data:

Childcare: $32,773

Housing: $23,267

Food: $14,717

Transportation: $14,828

Healthcare: $10,567

Other essentials: $21,857

Required net income: $118,009

Add federal, state, and FICA taxes of roughly $18,500, and you arrive at a required gross income of $136,500.

The graph below shows the cumulative price growth for $1,000 across many of the spending items Michael Green identifies above. As shown, except for transportation prices, all the others have significantly outpaced food prices. Thus, to Green’s point, a poverty line based on a steady price-consumption relationship for these goods and others in relation to food prices has become grossly ineffective.

Hedonics

Hedonics is a statistical method used by the BLS in the CPI report to distinguish pure price changes from changes in product quality and how those changes impact value.

For example, if a new laptop offers twice the performance at the same sticker price as an old one, hedonics treats that as a quality improvement and will record an effective price decline. Supporters say it prevents overstating inflation as products improve. In contrast, critics argue that it can understate inflation and relies on modeling choices that are impossible to validate.

Green is a critic. As we share below, he uses landline telephones and smartphones to make his point:

To function in 1955 society—to have a job, call a doctor, and be a citizen—you needed a telephone line. That “Participation Ticket” cost $5 a month.

Adjusted for standard inflation, that $5 should be $58 today.

But you cannot run a household in 2024 on a $58 landline. To function today—to factor authenticate your bank account, to answer work emails, to check your child’s school portal (which is now digital-only)—you need a smartphone plan and home broadband.

The cost of that “Participation Ticket” for a family of four is not $58. It’s $200 a month.

Green states that food prices, not hedonics, are the only primary factors used to compute the CPI for food. In his calculations, the rate of inflation across many other CPI items greatly exceeded the CPI’s reported rate, in part due to faulty hedonics.

Mathematical Valley

Michael Green introduces what he calls a “mathematical valley.” This idea illustrates a trap within the American economic system. The valley symbolizes the area where working families earn enough to lose government benefits but not enough to cover the actual cost of middle-class economic stability.

As families move from poverty into the lower middle class—usually earning between about $40,000 and $100,000—they lose access to safety net programs like food stamps, housing subsidies, or Medicaid. Still, their wages don’t keep up with the rising costs of housing, healthcare, childcare, and transportation. As a result, climbing the economic ladder can actually make families worse off financially because the loss of benefits outweighs the income gains.

This Valley creates a perverse incentive to stay poor or near-poor, traps millions in financial insecurity, and fuels widespread cynicism among the working poor who feel punished for trying to get ahead.

Green’s Summary

The Orshansky poverty line is based on the amount required to cover a minimum food budget times three. Since she developed her formula in 1963, the price of food has tracked below the broad CPI inflation rate. At the same time, many essential items have grown faster than food prices. To wit, food-at-home expenditures currently account for only 5 to 7 percent of spending, not the 33% assumed by Orshansky.

Therefore, because food prices are used as the basis for calculating the poverty line instead of a broader range of essential expenses, which have increased much more than food prices, the $31,200 poverty line is significantly understated. Additionally, the Mathematical Valley diminishes some incentives to earn more, thus resulting in affordability issues.

Arguing Against Green

While Michael Green makes a strong case that the poverty rate in this country is much higher than we think, and that affordability is becoming a hot topic, other opinions on Green’s article are worth considering. We summarize a few of them below.

• Child Care Costs Exaggerated: While childcare is costly, it isn’t part of most budgets once their children are past the age of four or five.

• Stuff is also cheaper: Green harps on things we buy that are more expensive, but some necessities, like clothing and electronics, are more affordable.

• Real incomes are rising. While a good argument, it raises questions about whether CPI is a good indicator of actual costs.

• What is the poverty line? To quote Alex Tabarrok of George Mason via the Washington Post: “He takes the poverty measure — and then turns it around and turns it into a middle-class measure,” Tabarrok said. “What do you need to be comfortable or thriving or middle class? Then, of course, you get a much bigger number. But to think that we today are living in some hellish landscape compared to our parents and even our grandparents is just a complete distortion of reality.”

Our Take- Summary

There isn’t a single inflation rate or poverty line. We live in a diverse country with many different regional economies. Also, families have unique needs and desires that can’t be summarized in one number. That said, no matter the poverty line, many American households are struggling.

Remember when Obama ran on “Change”? He was followed by Trump, who ran twice on a similar message. The economic system remains broken for many Americans, and they are voicing concerns about affordability in election polls and sentiment surveys. Look at the graph below. According to the University of Michigan, consumer sentiment is at its lowest point since at least 1960!

Of course, diagnosing the affordability problem and fixing it are two different things. But it’s hard to fix the problem without being aware of it. Hopefully, Michael Green’s article is raising enough debate and awareness on affordability to inspire action.

Tyler Durden Thu, 12/11/2025 - 11:05

 

 

Perhaps the most overlooked element in the “affordability hoax” is the president’s own role in it.

Before we get into the details, a few preliminary caveats. First, as COVID-19 ran wild, lockdowns were beginning, and a vaccine was still off in the future, there was genuine panic spreading through the government. A Hobson’s choice was presented: do nothing and watch the unemployment rate jump to 10-15%. Or, get cash into people’s hands, keep them at home, and watch an inflation spike the same amount.

It was a choice of the lesser of two evils, and I believe the president made the right choice in March of 2020. At least, as far as the first CARES Act was concerned. This was a nearly $2 trillion stimulus, the largest fiscal stimulus as a percentage of GDP since World War II.

Before you accuse me of hindsight bias, this was the conversation I had with Wharton Professor Jeremy Siegel in May 16, 2020 (transcript). Siegel was the first person to raise the inflation issue in real time, prior to the surges occurring.

“I think we’re going to have a huge spending boom next year and I think for the first time, and I know this is a sharp minority view here, for the first time in over two decades, we’re going to see inflation.”

-Prof Jeremy Siegel, May 16, 2020

At the time, no one was extrapolating the inflationary impact of the Covid fiscal stimulus – except Siegel. Note that May 2020 was three months into the pandemic, and still a full six months before the 2020 Presidential elections.

Like all complex issues, the inflationary surge was caused by numerous factors, starting with Covid-19 itself. Add Congress to both Presidents Trump (CARES Acts 1+2) and Biden (CARES Act 3) as key factors; Consumers who overspent without regard to cost and Corporate Greedflation; Some elements had been in place for decades: Just in Time Delivery (supply chains) and the shortage of new homes are good examples. The Russian Invasion of Ukraine didn’t help, nor did the wanton spending of Crypto wealth. But I stopped listing factors at 15, and I am sure there are more.

Why bring all of this up now?

Because “affordability” today is not a hoax; and to hear POTUS say such things while nobody mentions his responsibility in creating the worst inflationary surge in modern history is disingenuous.

And I will repeat my caveats here again (but I expect the worst kinds of partisan analysts to  ignore them):

There were no good choices, only less bad ones 10+% Unemployment versus 10+% Inflation were our options Most of us would prefer Inflation over Unemployment.

I asked people during the surge which they would have preferred, and it was no contest.

Note this academic paper (“Economic Discomfort and Consumer Sentiment“) found people disliked unemployment twice as much as they disliked inflation; this paper (“The Happiness Trade-Off between Unemployment and Inflation“) found unemployment was disliked five times as much as inflation in Europe.

Which brings us back to Siegel, who saw all of this coming in real time:

“But with this liquidity in the economy, I expect moderate inflation, not — I’m not talking about hyperinflation. And so, I’m nowhere near that. I expect inflation to move up next year to two, three, four percent, five percent and maybe run again in 2022 the same way.

So, cumulatively, I expect inflation may be to go up — the price level, consumer price level go up 10, 12 percent over the next few years, maybe 15.”

-Prof Jeremy Siegel, May 16, 2020

The Inflation surge was visible to anyone looking at the impact of the single largest fiscal stimulus since World War 2. The point of all this is simply that we should be honest about what happened then, and transparent about the impact of the pandemic on higher prices today.

Higher prices are not a hoax; there is lots of blame to go around — including President Trump during his first term. He made the right choice of the lesser of two evils.

 

 

Previously:
MiB: Jeremy Siegel on the Covid Stock Market (June 20, 2020)

Who Is to Blame for Inflation, 1-15 (June 28, 2022)

Which is Worse: Inflation or Unemployment? (November 21, 2022)

A Dozen Contrarian Thoughts About Inflation (July 13, 2023)

The Least Bad Choice (September 28, 2023)

Revisiting Greedflation (November 16, 2023)

Inflation is Obvious But Wage Gains Seem Invisible (June 27, 2024)

 

The post Whose Inflation Is This? appeared first on The Big Picture.

An "Existential Crisis" To Close 2025

By Michael Every of Rabobank

The Fed delivered what was expected – a 25bps rate cut to 3.75% and a deep public split over whether it should cut further because the labor market is weakening or keep policy tight because inflation is too high. The Fed will also buy $40bn of T-Bills just after stopping QT, but this is not to be seen as QE, nor as having any impact on monetary policy - and QE was a neutral “asset swap”, not a balance sheet expansion that juiced asset prices. See here for the take of our US Strategist Philip Marey, who concludes that as Trump takes a firmer grip of the Fed ahead, rates are likely to fall more than some expect.

The ECB’s Lagarde spoke of “Europe's existential crisis” and didn’t think the level of ECB rates could do anything about it. She underlined estimates that internal trade barriers due to national regulations on top of the EU’s own amount to an effective tariff of 110% on services and 60% on goods traded between member states. “Everybody wants to sugarcoat, gold-plate and do just a bit more,” yet on reforms, “There will be pushback from multiple corners… from people who say: ‘We’re very happy in our corner of Europe, leave us alone.’” (As ‘Teresa Ribera is ‘not interested in competition,’ complains jilted Brussels bubble’ – but that didn’t stop the EU from just raiding China’s Temu over a foreign subsidy allegation.) Lagarde underlined the need for a transformative capital markets union and joint Eurobonds for defence funding, seeing this as opportunity.

The BoC left rates on hold at 2.25% and seems to think it’s done, yet admitted it‘s difficult to “assess the underlying momentum of the economy,” given US tariffs’ impact over time. See here for more from Molly Schwartz.

The RBA, hawkish on Tuesday, prompting market chatter of rate hikes in 2026, will look at the jobs numbers today (-21.3K vs +20K expected) and perhaps rethink. But what of asset prices as the AFR notes, ‘Why this mum bought her 11-year-old son a townhouse.’ Only one? Tsk!

Today, BoE Governor Bailey will testify to Parliament’s Covid Inquiry. Will we see questions about the Bank’s response, e.g., why didn’t it use macroprudential measures on mortgage lending at the same time as deep rate cuts and massive QE? There are key lessons to be learned for when the next, inevitable ‘nobody saw it coming’ crisis hits - will central banks have a clearer idea of what they are *for* by then?

Meanwhile, as so often reiterated here, the backdrop against which all central banks pretend to know what they’re doing is getting increasingly unpredictable.

In geoeconomics, Mexico imposed 50% tariffs on China and other Asian economies –exactly the Trump Plan we predicted: next, Canada(?) Against that backdrop, the USTR said he seeks a “constructive” reset on trade with China, which launched a satellite super factory to rival Starlink and added domestic AI chips to its official procurement list for the first time. However, Ford suppliers received China's new streamlined rare-earth licenses - but German automakers were notably excluded so far. Indonesia is resisting US trade demands on critical minerals and energy it sees risking its relations with China and Russia. On the other hand, India reportedly offered the US its ‘best-ever’ deal, as D.C. pushes farm access in trade negotiations, as the US Soybean association president meanwhile stated that Trump’s farm aid plan for them is “A band-aid on an open wound.” The UK’s PM also told Parliament that a return to the EU customs union would “unravel” new UK trade deals: yes, some things are zero sum. Trade can be one of them.

In geopolitics, US Representative Massie has introduced a bill to pull America out of NATO, which speaks to the times if not its likelihood of passage. It’s nonetheless noted that Trump’s recent verbal attacks on Europe will force it to speed up post-America defence plans, with belated recognition that the era of America’s “security guarantee” for Europe is over. It seems Europe will have to pay much more than it has budgeted for the military by 2035, and a lot sooner. That’s as a report suggested a parallel US National Security Strategy to split up the EU and establish a new global “C5” of the US, China, Russia, India, and Japan, leaving Europe out of the power loop.

Germany’s Chancellor Merz nonetheless underlined he still wants the US as partner, and if Trump "can't make sense of this institution or the structure of the EU," the US can still cooperate with member states, and “Germany is, of course, first and foremost one of them.” Divide et impera.

Regardless, the EU is pressing harder for the passage of its €210bn Ukraine loan scheme, which Lagarde says is now the “closest” to being legal so far - is that something compliance officers like hearing? She added the new version should reassure investors it “does not amount to confiscation” - but as this money is clearly not going to be given back to Russia, it’s unclear how. Indeed, Belgium is demanding an extra cash buffer as wergild against expected Russian retaliation against it and Euroclear. And that’s presuming retaliation stays in that dimension – the FT reports on fears of a wider Russian campaign of sabotage to infrastructure and businesses ahead, which potentially comes with its own cost in terms of lower growth and higher inflation.

Muddying the waters for the EU in terms of its desire to adhere to global institutions, the International Court of Justice granted Russia’s counterclaim in a genocide case vs Kyiv. The potential implication, according to some, is that any warfare can be genocide if civilians are involved. Elsewhere, the US threatened to sanction the International Criminal Court unless it promises not to prosecute President Trump.

In Latin America, the US seized an Iranian oil tanker off the coast of Venezuela after smuggling Nobel peace prize laureate Machado out of the country: she called for democracies to “fight for freedom,” which may not be metaphorical. In Brazil, a bill that could reduce ex-President Bolsonaro’s prison time has advanced in Congress. In Bolivia, leftist ex-president Arce was just arrested for corruption a month after leaving office. And China pledged foreign aid to the region with no “political conditions” – it seems the Western Hemisphere may be ideologically, if not physically, contested.

In the Indo-Pacific, China says it seeks a “fair and just maritime order” in the South China Sea, which it claims; the ongoing Japan-China spat is seen as having no off-ramp; a Telegraph report claims China’s hypersonic missiles would destroy the US Navy in a fight over Taiwan - as the US Navy Secretary called for a “wartime footing” in US weapons production; and Thailand-Cambodia border fighting rages on as Trump signals he might try to intervene.

In the Middle East, there are reports of a build-up of US military jets heading towards the Middle East, as others say Iran has started mass production of ballistic missiles again. Trump will also delay unveiling his Gaza Board of Peace members until 2026, and it’s reported that the US is weighing hitting the UN Palestinian refugee agency UNWRA with terrorism-related sanctions.

If you think that’s too much information to fit into a Global Daily, try writing it(!) Moreover, consider this is just one day, in one week, in one month, in what has been a non-stop year for wild news headlines. 2026 doesn’t look like it’s going to get any easier. Quite the opposite, in fact.

You might not see it all as an existential crisis, just a ‘volatile trading backdrop’, but trying to keep up with just that part for readers can certainly prompt one for those who try!

Tyler Durden Thu, 12/11/2025 - 10:25

TIME Person Of The Year Are The Architects Of AI

TIME magazine has picked the 'Architects of AI' as their person of the year for 2025, when the potential for AI "roared into view" with no turning back.

"For delivering the age of thinking machines, for wowing and worrying humanity, for transforming the present and transcending the possible, the Architects of AI are TIME’s 2025 Person of the Year," the magazine announced. 

2025 was the year when artificial intelligence’s full potential roared into view, and when it became clear that there will be no turning back.

For delivering the age of thinking machines, for wowing and worrying humanity, for transforming the present and transcending the… pic.twitter.com/mEIKRiZfLo

— TIME (@TIME) December 11, 2025

Whether you use it or not, AI has dominated headlines all year. On one hand, AI has proven useful in an increasing number of applications. On the other, it's potentially rotting our brains. What's hilarious is that less than 6 months ago, TIME published a piece titled "ChatGPT May Be Eroding Critical Thinking Skills, According to a New MIT Study." 

In it, MIT researchers found that "the usage of LLMs could actually harm learning, especially for younger users."

"What really motivated me to put it out now before waiting for a full peer review is that I am afraid in 6-8 months, there will be some policymaker who decides, ‘let’s do GPT kindergarten.’ I think that would be absolutely bad and detrimental," said the paper’s main author Nataliya Kosmyna. 

Then there's 'vibe coding' - where 'programmers' simply ask an AI to write code for them instead of programming it manually, and of course, you can't scroll Facebook now (why would you?) without running into mountains of 'AI slop' - which spans everything from fake scientific journals to brain-rotting videos seemingly designed to pull western society's average IQ into double-digits. 

McDonald's has unveiled its own AI-generated Christmas ad that somehow looks even worse than Coca-Cola's.

Terrible AI visuals? Check. Horrible messaging? Check. A like-to-dislike ratio that says it all? Oh, you better believe that's a check:https://t.co/XQHnVLoG5T pic.twitter.com/Vestu3uNJS

— 80 LEVEL (@80Level) December 8, 2025

In 2023, Elon Musk called AI one of humanity's "biggest threats," which is why he says he set off to create a "politically neutral" and "maximally truth-seeking" chatbot (Grok) with the aim of minimal bias. 

Maximally truth-seeking is absolutely essential to ensuring a good AI future for humanity https://t.co/6QnWy3v1AB

— Elon Musk (@elonmusk) July 25, 2025

"AI is more dangerous than, say, mismanaged aircraft design or production maintenance or bad car production, in the sense that it is, it has the potential — however small one may regard that probability, but it is non-trivial - it has the potential of civilization destruction," Musk told Tucker Carlson. "A regulatory agency needs to start with a group that initially seeks insight into AI, then solicits opinion from industry, and then has proposed rule-making." 

According to TIME, "It was hard to read or watch anything without being confronted with news about the rapid advancement of a technology and the people driving it. Those stories unleashed a million debates about how disruptive AI would be for our lives. No business leader could talk about the future without invoking the impact of this technological revolution. No parent or teacher could ignore how their teenager or student was using it." 

"Every industry needs it, every company uses it, and every nation needs to build it," Nvidia CEO Jensen Huang told the outlet. "This is the single most impactful technology of our time."

Indeed.

Tyler Durden Thu, 12/11/2025 - 10:05

The Census Bureau released the Residential Vacancies and Homeownership report for Q3 2025 today.

The results of this survey were significantly distorted by the pandemic in 2020.
This report is frequently mentioned by analysts and the media to track household formation, the homeownership rate, and the homeowner and rental vacancy rates.  However, there are serious questions about the accuracy of this survey.

This survey might show the trend, but I wouldn't rely on the absolute numbers. Analysts probably shouldn't use the HVS to estimate the excess vacant supply or household formation, or rely on the homeownership rate, except as a guide to the trend.

National vacancy rates in the third quarter 2025 were 7.1 percent for rental housing and 1.2 percent for homeowner housing. The rental vacancy rate was not statistically different from the rate in the third quarter 2024 (6.9 percent) and not statistically different from the rate in the second quarter 2025 (7.0 percent).

The homeowner vacancy rate of 1.2 percent was higher than the rate in the third quarter 2024 (1.0 percent) and higher than the rate in the second quarter 2025 (1.1 percent).

The homeownership rate of 65.3 percent was not statistically different from the rate in the third quarter 2024 (65.6 percent) and not statistically different than the rate in the second quarter 2025 (65.0 percent).
emphasis added

Click on graph for larger image.

The Red dots are the decennial Census homeownership rates for April 1st, 1990, 2000, 2010, and 2020. 

The HVS homeownership rate was increased to 65.3% in Q3, from 65.0% in Q2.  
The results in Q2 and Q3 2020 were distorted by the pandemic and should be ignored.

The HVS homeowner vacancy increased to 1.2% in Q3 from 1.1% in Q2.

The homeowner vacancy rate declined sharply during the pandemic and includes homes that are vacant and for sale (so this mirrors the increasing levels of existing home inventory).
Once again - this probably shows the general trend, but I wouldn't rely on the absolute numbers.


The rental vacancy rate increased to 7.1% in Q3 from 7.0% in Q2.  This is up from the low of 5.6% in 2021 and 2022.

The quarterly HVS is the timeliest survey on households, but there are many questions about the accuracy of this survey.

Disney Invests $1 Billion In OpenAI, Strikes Landmark Deal To Bring Beloved Characters To Sora

Disney and OpenAI have resolved their prior video-generation rights dispute by entering into a three-year licensing and technology partnership that makes Disney the first major content partner for Sora, OpenAI's generative video platform.

"As part of this new, three-year licensing agreement, Sora will be able to generate short, user-prompted social videos that can be viewed and shared by fans, drawing from a set of more than 200 animated, masked and creature characters from Disney, Marvel, Pixar and Star Wars, including costumes, props, vehicles, and iconic environments," Disney wrote in a press release.

As part of the agreement, Disney will invest $1 billion in OpenAI and receive warrants for additional equity.

Disney will feature a curated selection of fan-generated Sora videos on Disney+, and both companies will collaborate to develop innovative AI products and enhance experiences across Disney's platforms.

In addition to enhancing the user experience with AI, Disney will adopt OpenAI tools for employees and use OpenAI APIs to build new internal and consumer-facing applications. So does that mean a restructuring of coders at the studio is just ahead?

"Technological innovation has continually shaped the evolution of entertainment, bringing with it new ways to create and share great stories with the world," Disney CEO Robert Iger wrote in a press release.

Iger continued, "The rapid advancement of artificial intelligence marks an important moment for our industry, and through this collaboration with OpenAI we will thoughtfully and responsibly extend the reach of our storytelling through generative AI, while respecting and protecting creators and their works."

He noted, "Bringing together Disney's iconic stories and characters with OpenAI's groundbreaking technology puts imagination and creativity directly into the hands of Disney fans in ways we've never seen before, giving them richer and more personal ways to connect with the Disney characters and stories they love."

So the OpenAI / $dis deal is a licensing deal where $dis invests $1bn?

I imagine they are going to collect more than $1bn in licensing fees

The game continues pic.twitter.com/a2zbKX6pu4

— Sterling Capital (@jay_21_) December 11, 2025

Disney shares are up 2% in early trading. Year-to-date, the stock is down 2% and has been trading sideways since its peak in early 2021.

The resolution follows Disney and other major studios raising serious concerns about the unlicensed use of their characters in early Sora-generated videos. Disney has found a solution. Will other studios follow?

Tyler Durden Thu, 12/11/2025 - 09:50

Australia's Social Media Ban For Under-16s Comes Into Effect

Authored by Victoria Friedman via The Epoch Times (emphasis ours),

A social media ban for those younger than 16 in Australia came into effect on Dec. 10, with Australian Prime Minister Anthony Albanese hailing the world’s first restriction of its kind as giving children back their childhoods.

Three 11-year-old boys use their phones while sitting outside a school in Sydney on Dec. 8, 2025. Rick RycroftAP Photo

As of Dec. 10, according to the Online Safety Amendment (Social Media Minimum Age) Act, social media platforms must stop under-16s in Australia from signing up for accounts and must begin phasing out existing accounts for underage children.

Facebook, Instagram, Kick, Reddit, Snapchat, Threads, TikTok, Twitch, X, and YouTube are now age-restricted platforms in Australia. These platforms are expected to take “reasonable steps” to prevent those younger than age 16 in the country from having or signing up for accounts, according to the Australian eSafety Commissioner website.

Companies failing in this regard face fines of up to AU$49.5 million (US$32.9 million).

The restrictions were brought in amid concerns over mental health, online harms, and screen addiction affecting Australian children.

“Enforcing a minimum account age of 16 will create normative change and give young people a reprieve from powerful and persuasive design features built to keep them hooked, often enabling harmful content and conduct online,” Australian eSafety Commissioner Julie Inman Grant said in a statement on Dec. 10.

She said that although no single measure is a “silver bullet,” the restrictions are part of a holistic approach that includes education and outreach.

The eSafety Commissioner website states that platforms must use measures for age verification that respect privacy laws and digital rights, suggesting that platforms use “age-related signals” to work out whether someone is underage, such as how long an account has been active, analysis of the user’s language level, and behavioral and interaction signals.

The website states that people who do have to prove their identity will not be forced to use a government ID, saying that the Social Media Minimum Age legislation “specifically prohibits platforms from compelling Australians to provide a government-issued ID or use an Australian Government accredited digital ID service to prove their age.” Platforms may offer it as an option but must also offer a reasonable alternative.

Global Issue

“This is the day when Australian families are taking back power from these big tech companies, and they’re asserting the right of kids to be kids and for parents to have greater peace of mind,” Albanese told ABC News Australia on Dec. 10.

When asked what advice he can give to parents and children concerned about the impact of the loss of social media profiles, the prime minister said families need to have that discussion and talk these issues through.

“We understand that this is going to be difficult,” Albanese said. “But it is so important that young people are given the opportunity to actually grow as young humans and to differentiate, as well, between what is real in human interactions and what they can often be exposed to online.”

Australian Prime Minister Anthony Albanese speaks to reporters during a news conference at Parliament House in Canberra, Australia, on Aug. 26, 2025. Lukas Coch/AAP Image via AP

The prime minister said that although his country is the first to have enacted such legislation, the impact of social media on children is a global problem. Other countries, including Malaysia and Denmark, as well as various states across the United States, are either bringing in similar controls or attempting to.

“New technology can do wonderful things, but we need to make sure that humans are in control of our own destiny, and that is what this is about, particularly focused on our youngest Australians,” Albanese said.

US, Australian Parents Back Bans

A recent survey found that most parents in Australia and the United States are in favor of social media bans for those younger than 16.

The Family Online Safety Institute found that 65 percent of Australian parents and 58 percent of U.S. parents supported such measures. Support among children aged 10 to 17 was much lower; 38 percent of young Australians and 36 percent of young Americans were in favor.

In its report, published on Dec. 9, the institute found that 52 percent of U.S. parents and 42 percent of Australian parents are confident that social media bans will protect children’s mental health. Lower percentages of American (43 percent) and Australian (33 percent) youth hold the same view.

However, both age groups shared the same beliefs about whether such bans would reduce young people’s overall screen use.

“Many children, 64 percent in the U.S. and 59 percent in Australia, say that with a social media ban in place, they would spend more time on other digital platforms, including video games or text messaging,” the report states.

“This could indicate that total screen time could remain the same, just with a shift to different digital platforms.”

Tyler Durden Thu, 12/11/2025 - 09:35

The Census Bureau and the Bureau of Economic Analysis reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $52.8 billion in September, down $6.4 billion from $59.3 billion in August, revised.

September exports were $289.3 billion, $8.4 billion more than August exports. September imports were $342.1 billion, $1.9 billion more than August imports.
emphasis added

Click on graph for larger image.

Exports and imports increased in September. 

Exports were up 6% year-over-year; imports were down 4% year-over-year.
Imports increased sharply earlier this year as importers rushed to beat tariffs.  

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Note that net, exports of petroleum products are positive and have been increasing.

The trade deficit with China decreased to $15.0 billion from $31.8 billion a year ago.