Individual Economists

Question #2 for 2026: How much will job growth slow in 2026? Or will the economy lose jobs?

Calculated Risk -

Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2026. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I posted thoughts on those in the newsletter (others like GDP and employment will be on this blog).

I'm adding some thoughts and predictions for each question.

Here is a review of the Ten Economic Questions for 2025.

2) Employment: Through November 2025, the economy added 610 thousand jobs in 2025.   How many jobs will be added in 2026?  Or will the economy lose jobs?
Last year, I wrote about 2025:
"So, my forecast is for gains of around 1.0 million jobs in 2025.  This will probably be the slowest job growth since 2010 (excluding the 2020 pandemic job losses)."
That was a little optimistic - excluding the pandemic and the great recession - 2025 saw the fewest jobs added since 2003.  Ouch.
For review, here is a table of the annual change in total nonfarm, private and public sector payrolls jobs since 1997.  

Change in Payroll Jobs per Year (000s) Total, NonfarmPrivatePublic 19973,4063,211195 19983,0462,733313 19993,1882,727461 20001,9331,669264 2001-1,733-2,284551 2002-518-751233 2003124166-42 20042,0401,893147 20052,5292,343186 20062,0911,882209 20071,146858288 2008-3,548-3,728180 2009-5,039-4,965-74 20101,0221,238-216 20112,0582,370-312 20122,1862,253-67 20132,2992,366-67 20142,9912,864127 20152,71732,563150 20162,3312,124207 20172,1152,03580 20182,2862,159127 20191,9861,771215 2020-9,274-8,199-1,048 20217,2336,837396 20224,5554,256299 20232,5941,860734 20242,0121,559453 202561017661-1561 111 Months through November.
The bad news is the job market has stalled.  The BLS noted in December:
"Total nonfarm payroll employment ... has shown little net change since April."
Fed Chair Powell noted at the recent FOMC press conference that the economy might have lost an average of 20,000 jobs per month over that period.

Employment per monthClick on graph for larger image.

And more bad news - for job growth - is that the labor force will grow slowly in 2026!
This graph shows the jobs added per month since January 2021.  
It appears that population growth will be slow in 2026 (births minus deaths plus net immigration) and the overall participation rate will decline due to demographics.  That suggests that labor force will grow slowly.  My sense is the economy will not lose jobs in 2026, but it is possible.
So, my forecast is for gains of around 0.6 to 1.0 million jobs in 2026.  This might be an even slower year for job growth than 2025!   
Here are the Ten Economic Questions for 2026 and a few predictions:

Question #3 for 2026: What will the unemployment rate be in December 2026?

Question #4 for 2026: What will the participation rate be in December 2026?

Question #5 for 2026: What will the YoY core inflation rate be in December 2026?

Question #6 for 2026: What will the Fed Funds rate be in December 2026?

Question #7 for 2026: How much will wages increase in 2026?

Question #8 for 2026: How much will Residential investment change in 2026? How about housing starts and new home sales in 2026?

Question #9 for 2026: What will happen with house prices in 2026?

Question #10 for 2026: Will inventory increase further in 2026?

10 Weekend Reads / 10 Sunday Reads

The Big Picture -

The weekend is here! Pour yourself a mug of Danish Blend coffee, grab a seat outside, and get ready for our longer-form weekend reads:

Be sure to check out our Masters in Business interview this weekend with

 

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To learn how these reads are assembled each day, please see this.

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Avert your eyes! My Sunday morning look at incompetency, corruption and policy failures:

Be sure to check out our Masters in Business interview this weekend with

 

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To learn how these reads are assembled each day, please see this.

 

The post 10 Weekend Reads / 10 Sunday Reads appeared first on The Big Picture.

10 Friday Monday AM Reads

The Big Picture -

52 things I learned in 2025: This year I stopped being a consultant, started a tiny company, sold hundreds of little modular synths…   https://medium.com/@tomwhitwell/52-things-i-learned-in-2025-edeca7e3fdd8 See also 52 things I learned in 2025 The news (to me) this year. https://fritinancy.substack.com/p/52-things-i-learned-in-2025 But see also 52 Things I Learned in 2025 Here are some of the most interesting things I learned this year. https://probablyinteresting.substack.com/p/52-things-i-learned-in-2025 Really? OK 52 things I learned in 2025 presented under the comment that ‘no explanation or context of what it is about the article I learned, just a title and link of something important to me personally or professionally in [year]’. https://www.dontwasteyourtime.co.uk/blogging/52-things-i-learned-in-2025/ Last Damned One 52 Good Things from 2025 The 19th year of my annual gratitude practice, now spanning 990 good things. https://medium.com/the-coach-life/52-good-things-from-2025-9e71083e87b5

 

Warren Buffett: A Question of Character: Warren Buffett, who will retire this week at age 95, has compiled perhaps the most astounding investment and management record in financial history. Anyone who invested $10,000 when he started out in 1956 and remained in the fund — c0nverted in in 1969 to Berkshire Hathaway — today would have an investment worth $2.9 billion. No misprint.  https://rogerlowenstein.substack.com/p/warren-buffett-a-question-of-character

All That Cheap Chinese Stuff Is Now Europe’s Problem: Trump’s tariffs have redirected the flow of low-value packages away from the U.S. into backyard warehouses on the Continent; the ‘new Silk Road’ (Wall Street Journal)

The Vanity Fair photographer who disrupted Trumpworld’s polished image: Every line, spot, blemish and blood vessel was captured by Christopher Anderson’s lens. What was he thinking?   https://www.washingtonpost.com/style/power/2025/12/17/vanity-fair-susie-wiles-photos/

The year Trump broke the federal government: How DOGE and the White House carried out a once-unthinkable transformation of the nation’s sprawling bureaucracy. https://www.washingtonpost.com/politics/interactive/2025/trump-federal-government-workers-doge/

The 50-Year Republican Plan for Total Victory: aaaa https://brucebartlett.substack.com/p/the-50-year-republican-plan-for-total

Jan 2

ChatGPT is overrated. Here’s what to use instead. (Washington Post)

America’s Biggest Oil Field Is Turning Into a Pressure Cooker: Drillers’ injection of wastewater is creating mayhem across the Permian Basin, raising concern about the future of fossil-fuel production there. (Wall Street Journal)

 

Be sure to check out our Masters in Business interview this weekend with Stephanie Drescher, Apollo’s Chief Client and Product Development Officer. She oversees everything from the global wealth business to portfolio management, product development, and client marketing. She is a member of the firm’s leadership team. Since 2020, Barron’s has named her annually to its list of the 100 Most Influential Women in U.S. Finance.

 

My end-of-week morning train WFH reads:

Be sure to check out our Masters in Business interview  this weekend with

 

Sign up for our reads-only mailing list here.

 

 

~~~

My morning train WFH reads:

Be sure to check out our Masters in Business interview this weekend with

 

Sign up for our reads-only mailing list here.

 

~~~

My mid-week morning train WFH reads:

Be sure to check out our Masters in Business interview this weekend with

 

Sign up for our reads-only mailing list here.

 

My Two-for-Tuesday morning train WFH reads:

•2

•1

•2

•1

•2

•1

•2

•1

•2

•1

Be sure to check out our Masters in Business interview this weekend with

 

Sign up for our reads-only mailing list here.

 

~~~

 

My back-to-work morning train WFH reads:

Be sure to check out our Masters in Business interview this weekend with

 

Sign up for our reads-only mailing list here.

 

 

The post 10 Friday Monday AM Reads appeared first on The Big Picture.

Question #3 for 2026: What will the unemployment rate be in December 2026?

Calculated Risk -

Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2026. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I posted thoughts on those in the newsletter (others like GDP and employment will be on this blog).

I'm adding some thoughts and predictions for each question.

Here is a review of the Ten Economic Questions for 2025.

3) Unemployment Rate: The unemployment rate was at 4.6% in November, up from 4.2% in November 2024.   Currently the FOMC is projecting the unemployment rate will decrease to the 4.3% to 4.4% range in Q4 2026.  What will the unemployment rate be in December 2026?
unemployment rateClick on graph for larger image.

The unemployment rate is from the household survey (CPS), and the rate increased in November to 4.6%, up from 4.2% in November 2024.  An unemployment rate of 4.6% over the next few months might suggest an employment recession according to the Sahm rule.

Forecasting the unemployment rate includes forecasts for economic and payroll growth, and also for changes in the participation rate (previous question).
"Uncertainty" was the key economic word for 2025, and probably for 2026 too.  There is significant uncertainty in the labor market with signs of weak hiring and concerns that AI will impact job growth.  Sometimes an employment recession continues as some employed individuals become cautious.  At the same time, we should see some economic boost from fiscal policy in 2026.
It appears that the participation rate will decline in 2026 based on demographics and that population growth will be slow due to less net migration.  That suggests that the labor force will grow slowly in 2026. So even if job growth stays slow in 2026 (next question), the unemployment rate might stabilize or even decline.
However, my guess is the unemployment rate will be in the mid-to-high 4% range in December 2026.  
Here are the Ten Economic Questions for 2026 and a few predictions:

Question #3 for 2026: What will the unemployment rate be in December 2026?

Question #4 for 2026: What will the participation rate be in December 2026?

Question #5 for 2026: What will the YoY core inflation rate be in December 2026?

Question #6 for 2026: What will the Fed Funds rate be in December 2026?

Question #7 for 2026: How much will wages increase in 2026?

Question #8 for 2026: How much will Residential investment change in 2026? How about housing starts and new home sales in 2026?

Question #9 for 2026: What will happen with house prices in 2026?

Question #10 for 2026: Will inventory increase further in 2026?

10 New Years Day Reads

The Big Picture -

My New Years Day reads:

Financial Discipline Is an Easy Resolution to Make, but a Hard One to Keep: We all say we want to save more and spend less. The key is to think more broadly. (Wall Street Journal)

Trump’s First Year Back, in 10 Charts: President Trump indisputably dominated 2025. Only the second president to be elected to nonconsecutive terms, the reinvigorated Mr. Trump plunged back into office with a muscularity unmatched by any other president in my lifetime. (New York Times) see also Charts of the year: Trump’s attempt to reshape world trade: The US president’s ‘liberation day’ tariffs spooked markets but the global trading system has proved to be resilient (Financial Times)

Did “Sell America” Win After All? There’s been a “Sell America” media shtick since the first tariffs were announced. ETF Investors didn’t bite. Maybe they should have? (ETF.com)

How Roomba invented the home robot — and lost the future: iRobot’s collapse marks the end of an era. Co-founder Colin Angle calls it a blow for robotics. (The Verge)

‘You Had to Be Brave’: Wall Street Remembers a Wild 2025: The stock market was rattled by AI bubble fears, trade war and actual war, only to rally back, paying off to anyone who was willing to risk buying the dips. (Bloomberg) see also In a Wild Year for Markets, Investors Who Did Nothing Did Just Fine: The year was dominated by tariffs, questions about the U.S. and artificial intelligence. (Wall Street Journal)

The US Must Stop Underestimating Drone Warfare: The future of conflict is cheap, rapidly manufactured, and tough to defend against. (Wired)

The Lost Art of Research as Leisure: Where have the amateur researchers gone, and how do we bring them back? (Kasurian)

10 scientific truths that somehow became unpopular in 2025: Scientific truths remain true regardless of belief. These 10, despite contrary claims, remain vitally important as 2025 draws to a close. (Starts With A Bang) see also The 10 Most Mind-Blowing Discoveries About the Brain in 2025: From glowing neurons to newborn memories, here are the most fascinating brain discoveries of 2025. (Scientific American)

Inside RFK Jr.’s reshaping of public health in Trump’s first year: Interviews with almost 100 people reveal how Kennedy, as health secretary, has reshaped the vaccine and broader public health infrastructure in less than a year. (Washington Post)

Five Things That Changed the Media in 2025: A.I., of course—but there were also other, less obvious stories and trends that are going to shape how we understand the news. (New Yorker) see also Top 25 News Photos of 2025: Powerful images from the past 12 months. (The Atlantic)

Be sure to check out our Masters in Business interview this weekend with Stephanie Drescher, Apollo’s Chief Client and Product Development Officer. She oversees everything from the global wealth business to portfolio management, product development, and client marketing. She is a member of the firm’s leadership team. Since 2020, Barron’s has named her annually to its list of the 100 Most Influential Women in U.S. Finance.

States where the minimum wage is going up in 2026

Source: Axios

 

Sign up for our reads-only mailing list here.

 

 

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Trump Pulls National Guard Out Of Chicago, Los Angeles & Portland

Zero Hedge -

Trump Pulls National Guard Out Of Chicago, Los Angeles & Portland

President Donald Trump on Wednesday announced that he's pulling National Guard troops from Chicago, Los Angeles and Portland

"We are removing the National Guard from Chicago, Los Angeles, and Portland, despite the fact that CRIME has been greatly reduced by having these great Patriots in those cities, and ONLY by that fact," he wrote on Truth Social, adding that federal forces will "come back" if crime spikes again. 

Earlier this month a federal judge in California blocked the Trump administration from deploying members of the California National Guard in Los Angeles, and also directed the administration to return control of the Guard to Gov. Gavin Newsom - until an appeals court paused the latter. 

In a Tuesday court filing, the Trump administration said it was no longer seeking a pause in that part of the order. That paves the way for the California National Guard troops to fully return to state control after Trump federalized the Guard in June.

California Attorney General Rob Bonta called the development a “major litigation victory” in a press release Wednesday. -AP

In October, however, a federal appeals court allowed Trump to deploy the Oregon National Guard to Portland as a legal challenge progresses - however in November, a judge permanently blocked the deployment of National Guard troops there following a three-day trial.

The decision to pull troops also comes a week after the Supreme Court refused to allow the admin to deploy National Guard troops in the Chicago area to aid in ICE efforts to remove illegals. The order was not a final ruling, but marked a rare setback by the SCOTUS in regards to Trump's efforts. 

"Portland, Los Angeles, and Chicago were GONE if it weren’t for the Federal Government stepping in," Trump's post continues. "We will come back, perhaps in a much different and stronger form, when crime begins to soar again - Only a question of time!"

In November, US Northern Command said it was "shifting and/or rightsizing" operations in Portland, Chicago and Los Angeles, but that there would be a "constant, enduring and long-term presence in each city." 

Trump has made a crackdown on crime a centerpiece of his second term, and has teased the use of the Insurrection Act to stop Democrats from using the courts to block his plans. 

Tyler Durden Wed, 12/31/2025 - 19:00

New Trump-Xi Showdown Approaches As Chinese Tankers Press Ahead To Venezuela Despite Blockade

Zero Hedge -

New Trump-Xi Showdown Approaches As Chinese Tankers Press Ahead To Venezuela Despite Blockade

Two Chinese-flagged very large crude carriers are proceeding toward Venezuelan waters despite a U.S.-imposed blockade on sanctioned oil tankers, raising the prospect of heightened tensions between Washington and Beijing over Venezuela's crude exports.

Thousand Sunny oil tanker (photo: Tommy Chia)

Shipping data published by Lloyd's List on Tuesday shows the Thousand Sunny is expected to arrive at Venezuela's Jose Terminal in mid-January after rounding the Cape of Good Hope empty in the southern Atlantic, Newsweek reports. The vessel, which is not subject to U.S. sanctions, has historically transported Venezuelan Merey heavy crude to China. A second unsanctioned Chinese-flagged VLCC, the Xing Ye, is currently positioned off French Guiana, awaiting loading at the same terminal, Newsweek said.

Via Newsweek

Both the State Department and China's Foreign Ministry have remained mum on the vessels' movements.

The high-stakes voyages come as President Donald Trump escalates pressure on Venezuelan dictator Nicolás Maduro, including a mid-December order for a "total and complete blockade" of sanctioned oil tankers entering or leaving the country. U.S. forces have seized at least two tankers carrying Venezuelan crude in international waters this month, with a third evading boarding. The Pentagon has described the measures as a "quarantine" aimed at curbing revenue to the Maduro government, which Washington accuses of links to drug trafficking and terrorism.

Separately, the Central Intelligence Agency carried out a drone strike on a remote coastal dock in Venezuela earlier this month, marking the first acknowledged U.S. operation on Venezuelan territory, according to people familiar with the matter briefed to CNN.The target, believed by U.S. officials to be used for storing and loading narcotics onto boats - potentially by the Venezuelan gang Tren de Aragua - was unoccupied at the time, and no casualties were reported. The strike followed a series of U.S. attacks on suspected drug-trafficking vessels in international waters.

Trump first referenced the operation in a Friday radio interview with WABC's John Catsimatidis, saying U.S. forces had "knocked out" a "big facility where the ships come from" two nights earlier.

On Monday, Trump elaborated on the mission during a gaggle with reporters, saying, "There was a major explosion in the dock area where they load the boats up with drugs... That is no longer around."

The White House and Pentagon have declined to provide further details on the operation or its execution. Venezuelan officials have not publicly responded to the reports.

Tyler Durden Wed, 12/31/2025 - 18:20

In Texas, A 400-Acre Muslim Development Sparks Controversy

Zero Hedge -

In Texas, A 400-Acre Muslim Development Sparks Controversy

Authored by Darlene McCormick Sanchez via The Epoch Times,

JOSEPHINE, Texas - This rural town with farmland stretching to the horizon might as well be a million miles away from New York City with its skyscrapers and big-city worries.

But the residents of the Big Apple and Josephine have something in common—controversy over the construction of a mosque.

Perhaps not since the “Ground Zero Mosque” was proposed two blocks from the World Trade Center site of the Sept. 11 terrorist attacks has a mosque drawn so much attention.

The proposed 2009 Manhattan mosque and Islamic cultural center was known as Park 51. It faced sharp public criticism for plans to place a symbol of Islam so close to where thousands died from an attack by radical jihadists. Groups such as Stop Islamization of America led protests against “radical Islam” before the project was eventually abandoned.

More than a decade later, as Muslim migration to Texas has increased, a similar uproar has risen over a proposed Muslim-focused neighborhood anchored by a mosque in rural Texas, some 40 miles from Dallas.

Promotional materials first described EPIC City, named after the East Plano Islamic Center, as the “epicenter of Islam in America.”

Following backlash at the local, state, and federal levels, it changed its name to The Meadow.

The development would encompass 402 acres of farmland outside Josephine, a town of 8,800 residents founded in 1888 by a railroad company back when cotton was king in Texas.

It would include 1,000 homes, a mosque, a K-12 faith-based school, sports facilities, a community college, senior housing, an outreach center, and businesses.

Since the idea was proposed, numerous public officials and community members have worked to halt the development, citing concerns about whether the new community would integrate with the local population and asking questions over sharia—Islamic law—and potential ties to foreign Islamic groups.

The development has prompted legal battles, state and federal investigations, and new state laws addressing neighborhood composition and foreign ownership. The ongoing battle included Texas Gov. Greg Abbott classifying some Islamic groups as foreign terrorist organizations; and the White House is considering similar action.

A new mosque is the centerpiece of the proposed EPIC City, described as the “epicenter of Islam in America.” The city was renamed The Meadow after backlash at the local, state, and federal levels. Republican leaders, including Texas Gov. Greg Abbott, and residents have opposed the proposed 402-acre Muslim development outside the rural town of Josephine, Texas. Rendering from Texas legal documents

Grassroots Backlash

The Muslim-led community would be located in an area largely populated by white and Hispanic residents whose religion is predominantly Christian.

Locally, residents have voiced concerns about Islamic radicalization and sharia law in communities they believe may not integrate into U.S. culture, despite the developer’s denials.

Sharia law is an Islamic code of conduct and law derived from the Quran, often at odds with laws and rights in Western countries.

One woman who spoke at a Collin County Commissioners Court meeting in November raised concerns that sharia would replace U.S. law within the development.

“This remains an Islamic-focused community, and Islam is fundamentally incompatible with our Constitution,” she said.

At the Josephine City Council meeting, a resident of Armenian descent said people should be aware that, in his view, Islam is only peaceful when it is not in control.

“Islam is not truly a religion of peace,“ he added. ”Once they get to a certain point in a culture, they start to ravage it from within.”

Most Muslims are good people, he said, but when their religious ideology demands it, they feel compelled to obey. “They don’t speak up against it.”

He referenced historical events, saying the West should consider the Armenian genocide over a century ago under the Ottoman Empire, which imposed sharia.

“We were walked into the Syrian desert until we died of hunger, of starvation. They hung Christian females to posts and lit them on fire as candles,” he said.

As public concerns intensified, state officials stepped up their efforts to address them.

Earlier this month, Texas Attorney General Ken Paxton announced a lawsuit against the East Plano Islamic Center (EPIC), which contracted for the land, and developer Community Capital Partners, and others, alleging violations of Texas securities laws.

Texas Attorney General Ken Paxton at a press conference in Anzalduas Park near McAllen, Texas, on April 28, 2021. Charlotte Cuthbertson/The Epoch Times

​The lawsuit claims the housing development would be illegally reserved for Muslim residents. It also asserts that the project’s leaders “lined their own pockets” with funds during development.

Abbott took to social media on Dec. 3, stating the development’s name change does not alter its intent and that at least four state agencies continue to investigate “this misguided mission.”

“‘The Meadow’ will remain just that—an empty meadow,” Abbott said. “EPIC can change its name, but can’t change the legality of the flawed structure they seek to impose. They delete social media posts & rewrite contracts. But it’s just a disguise to impose sharia on a community they create.”

Developers Say No Wrongdoing

​Meanwhile, the Texas enclave’s developers and Muslim groups have denounced the legal action as Islamophobic and a violation of their rights.

The Islamophobia Network, a project of the Council on American-Islamic Relations (CAIR), produced a report about the development condemning Abbott’s actions as politically motivated.

​“Anti-Islam organizing targeting the Muslim-led EPIC City development project saw bias mobilizing the power of Texas government to deny Muslims their equal opportunities to pursue their dreams and potential,” the report said.

​It denounced what it called “anti-Islam” legislation and what it called “advanced conspiracy theories” involving “no-go zones.”

​The report compared tactics used to stop the EPIC development to those used in the controversy over the “Ground Zero Mosque” at Park 51.

​“We also note that Governor Abbott and Texas Attorney General Ken Paxton’s attack on EPIC City has not resulted in any evidence of wrongdoing to date and may violate Constitutional prohibitions against arbitrary government action,” the group stated.

People watch construction at the World Trade Center site in New York City on Aug. 16, 2010. The proposed Manhattan mosque and Islamic cultural center, known as Park51, drew sharp criticism in 2009 over plans to locate it near the site of the Sept. 11 terrorist attacks. Spencer Platt/Getty Images

​High-profile Texas attorney Dan Cogdell, who represents developer Community Capital Partners, held a press conference in the spring as the pressure campaign against the development ramped up.

​​“My clients are law-abiding Texans, law-abiding Americans, and law-abiding Muslims,” he said.

​​He added that no one associated with the community follows or implements sharia and that Abbott was attempting to “demonize” Muslims.

​Neither EPIC nor Cogdell responded to requests for comment.

State Legislation

Republicans campaigning in the Lone Star state are tapping into public unease over mass immigration and the increase in terrorist incidents, such as the Nov. 26 shooting of two Washington D.C. guardsmen by an Afghan immigrant.

​Abbott is currently seeking his fourth term as governor, while Paxton is running in the Senate Republican primary against incumbent Sen. John Cornyn (R-Texas).

In a flurry of activity this fall, Abbott took steps to block foreign threats and developments in Texas.

In September, he signed House Bill 4211 into law, banning residential property developers from creating exclusionary compounds, specifically citing the EPIC project.

Abbott stated that the law bans residential property developments such as EPIC City “from creating sharia compounds and defrauding and discriminating against Texans.”

“The fact is, religious freedom is a central part of the Texas Constitution. But bad actors like EPIC and EPIC City tried to use religion as a form of segregation. We will ensure that we have the laws and law enforcement in place to prevent attempts to build such discriminatory compounds in the state of Texas.”

​Likewise, in June, the governor signed Senate Bill 17 into law, banning transnational criminal organizations and foreign adversaries—including Iran—from purchasing land.

Texas Gov. Greg Abbott signs a bill at the state Capitol in Austin on April 23, 2025. Earlier this year, Abbott signed measures that would curb exclusionary residential compounds—citing the EPIC project—and restrict land purchases by foreign adversaries and transnational criminal groups. Brandon Bell/Getty Images

On Nov. 18, Abbott cited these laws in a proclamation designating the Muslim Brotherhood, which has ties to Hamas, and the Council on American-Islamic Relations (CAIR) as foreign terrorist organizations (FTOs) and transnational criminal organizations.

The designation authorizes “heightened enforcement against both organizations and their affiliates and prohibits them from purchasing or acquiring land in Texas,” according to the governor’s office.

Abbott took the additional step in December of asking Treasury Secretary Scott Bessent to suspend CAIR’s tax-exempt status, citing longstanding ties to the Muslim Brotherhood and Hamas.

CAIR filed its own lawsuit against Abbott and Paxton in November, calling Abbott’s proclamation “unconstitutional and defamatory.” The group said the proclamation falsely declared the Texas chapter of CAIR as a terrorist group.

A few days later, the White House announced it would investigate whether certain chapters of the Muslim Brotherhood should be designated as FTOs. Secretary of State Marco Rubio suggested during a radio interview with “Sid and Friends in the Morning” in August, that designating CAIR as a terrorist group was also “in the works.”

Other leading Republicans, opponents of Islamic extremism and sharia, have weighed in on the EPIC development.

In May, Cornyn said that the Department of Justice (DOJ) launched a civil rights investigation into the development at his request. The investigation was ultimately dropped with no violations cited.

Cruz, who reintroduced a bill in July to designate the Muslim Brotherhood as a terrorist group, said during a Heritage Foundation appearance that sharia law was a concern at the EPIC development in North Texas.

​Last month, Rep. Chip Roy (R-Texas), who is running for Texas Attorney General, introduced legislation to counter mass migration. The bill would deny legal status to followers of sharia, known or suspected terrorists, and other groups.

​“Many Americans strive to live their life practicing their faith, while our immigration system is actively importing radical Islamic sharia adherents and communists,” Roy said in a press release.

Demonstrators attend a rally with the Coalition to Honor Ground Zero in New York City on Aug. 22, 2010. The rally was held to oppose the construction of an Islamic Center and mosque near Ground Zero. Don Emmert/AFP via Getty Images

‘A Different Population’

​Simon Hankinson, a senior research fellow at the Border Security and Immigration Center at The Heritage Foundation, said public fears over Muslim enclaves and mass migration are symptoms of a brewing national identity crisis.

Americans fear they are losing their culture and way of life to foreign influences, including those from the Middle East, he told The Epoch Times.

​The foreign-born population of the United States currently sits at about 16 percent—the highest in history, according to the U.S. Census Bureau’s January 2025 Current Population Survey.  The last time it was close to being that high was in 1890, when immigrants mainly from Eastern Europe pushed the foreign-born population to 14.8 percent, according to the Census Bureau.

​“But obviously, now the Muslim population is growing rapidly with immigrants from the Middle East and North Africa—and it’s a cultural change,” Hankinson said.

​“So it’s a new phenomenon. I think people, maybe in parts of rural Texas, were kind of used to the certain makeup that they had.”

More Americans are paying attention to immigration policy because it’s impacting their communities, he said.

Social media is awash in posts highlighting the effect of mass migration in Europe, warning that it’s a harbinger of things to come in America.

On Dec. 20, Tulsi Gabbard, director of National Intelligence, warned against “Islamist ideology” and sharia taking over the West during a speech at Turning Point USA’s AmericaFest

“This Islamist ideology is a direct threat to our freedom because at its core it is a political ideology that seeks to create a global caliphate that governs us here in America,” she said.

“If we don’t take action to identify this threat, to define it, to call it out for what it is, and take action to defeat it, then we will find ourselves in a place where many European countries and countries like Australia have found themselves.”

Director of National Intelligence Tulsi Gabbard speaks at Turning Point USA’s AmericaFest in Phoenix on Dec. 20, 2025. Gabbard warned against “Islamist ideology” and sharia taking over the West. John Fredricks/The Epoch Times

Hankinson, a British immigrant, said that native-born English citizens are now the minority in London.

​“If you replace a population with a different population, then everything’s going to change,” he said.

​But immigration is not accidental; it is a policy choice that voters make, he said.

Small groups of immigrants with cultures similar to those of the areas they move to tend to assimilate, such as Ukrainians settling in Poland, he said.

​Enclaves of culturally diverse immigrants have been accepted when they are localized and relatively small, he said. ​But large groups of people coming into a country will change that society.

​“I think Americans are noticing, and some of them probably don’t like it,” he said.

Ammon Blair, a security consultant and senior fellow for the Texas Public Policy Foundation’s Secure & Sovereign Nation Initiative, said the mass migration that occurred during the Biden administration was different from past migrations.

​“This is a completely engineered, fabricated form of immigration where it’s done for the sole purpose of eradicating the sovereignty of a nation and state,” he told The Epoch Times.

​Blair pointed to large immigrant settlements that sometimes remain under the control of the countries they left, making assimilation difficult.

Muslims pray at a mosque during Friday prayers in Plano, Texas, on April 11, 2025. Ronaldo Schemidt/AFP via Getty Images

This March, President Trump asserted in a proclamation that the Venezuelan transnational gang Tren de Aragua was part of the Cártel de los Soles, sponsored by President Nicolás Maduro’s regime. Tren de Aragua is known to target Venezuelan nationals in the United States.

Another example would be recent fraud rooted in Minnesota’s Somali settlement, which allegedly funds Al-Shabaab, a terrorist organization, he noted. Since then, President Donald Trump announced a crackdown on temporary legal status for Somalis.

“It all comes down to not just assimilation, but allegiance,” Blair said.

Hankinson said after experiencing immigration himself and watching countries change, he no longer believes multiculturalism works, saying it has probably “failed as an experiment.”

The ongoing debate over the proposed Muslim-centric development in Texas encapsulates larger questions about immigration, assimilation, and national identity across the United States, he said.

“The idea is that we can all live in one country, but we can have completely different values, beliefs, religions, cultural traditions, etc. I don’t think there’s enough to hold a country together without those things.”

Tyler Durden Wed, 12/31/2025 - 17:45

Swalwell Pledges To Arrest ICE Agents And Take Away Their Driver's Licenses

Zero Hedge -

Swalwell Pledges To Arrest ICE Agents And Take Away Their Driver's Licenses

Authored by Jonathan Turley,

Rep. Eric Swalwell (D., Cal.) will not be outdone again.

Recently, Swalwell was outvoted in Congress by a colleague who had died months earlier. 

Now, he is ensuring that, when it comes to violating the Constitution, no one is even close. This week, Swalwell pledged that, if elected California governor, he will arrest ICE officers and take away their driver’s licences.

On MS NOW’s “All In,” Swalwell was asked by host Jason Johnson:

 “What would you do if you are able to be elected as governor of California? … What would you bring to the table as a governor of California?”

Swalwell responded:

“Well, you have immense powers as governor of California and your responsibility to protect the most vulnerable in the state. So if the president is going to send ICE agents to chase immigrants through the fields where they work, what I’m going to do is make sure that they take off their masks and show their faces, that they show their identification. And if they commit crimes that they’re going to be charged with crimes, if it’s falsely imprisoning people, if it’s kidnapping, if it’s assault battery, they’re going to be held accountable. I also think if the governor has the ability to issue driver’s licenses to people in California, if you’re going to wear a mask and not identify yourself, you’re not going to be eligible to drive a vehicle in California. There’s a lot you can do, but most importantly, you have to go on offense. Otherwise, the most vulnerable in our community will always be on defense.

Democrats appear to be morphing into predecessors like Gov. George Wallace (D., Ala.), pledging to defy federal authority and bar federal agents from their states. Wallace also reportedly threatened to arrest federal officers (and then later backed down when he was threatened with court action).

In an “age of rage,” the most irate and irrational reigns supreme.

From demanding that any Democratic nominee pledge to demolish the new Trump ballroom to opposing parental rights in schools, Swalwell has struggled to find traction with far-left California voters.

However, he is now promising to violate the Constitution. That did not take long. We do not even have a clear idea of who will be the frontrunners in the election. It is like a game of chicken where Swalwell immediately drives off the cliff before anyone gets into their cars.

Ironically, it is precisely what he has accused Donald Trump of doing: disregarding the Constitution when it suits his political agenda.

In case it matters to anyone left in California, he cannot do this. Seizing federal agents sort of went out of constitutional style after the Civil War. The “immense powers as governor of California” do not include dictating what federal officers can wear on their faces or bodies.

The first tiny barrier to Swalwell’s antebellum policies is the Supremacy Clause, which prevents states from “interfering with or controlling the operations of the Federal Government.” United States v. Washington (2022). Since McCulloch v. Maryland in 1819, the Supreme Court has consistently struck down state laws that impede federal enforcement.

Moreover, immunity under the Supremacy Clause (Article VI, Clause 2) bars criminally charging officials who are properly carrying out their lawful federal duties. For example, in 1890, the Supreme Court ruled In re Neagle that a U.S. Marshal had immunity when a state tried to charge him with murder after he shot and killed an individual attacking a justice.

While the Supreme Court has also stressed that federal immunity does not afford federal employees carte blanche to violate any and all state laws, it has made clear that such state limits must be incidental and nonintrusive. In Johnson v. Maryland (1920), Justice Oliver Wendell Holmes explained:

“It very well may be that, when the United States has not spoken, the subjection to local law would extend to general rules that might affect incidentally the mode of carrying out the employment — as, for instance, a statute or ordinance regulating the mode of turning at the corners of streets. Commonwealth v. Closson, 229 Mass. 329. This might stand on much the same footing as liability under the common law of a state to a person injured by the driver’s negligence. But even the most unquestionable and most universally applicable of state laws, such as those concerning murder, will not be allowed to control the conduct of a marshal of the United States acting under and in pursuance of the laws of the United States. Ex parte Neagle, 135 U. S. 1.”

None of this really matters to Swalwell. He is moving from democrat to demagogue in pledging unconstitutional acts to be sure that no one is farther to the left in the California race. It is the same “politics of contempt” that he has displayed as a member of Congress. Swalwell has always distinguished himself by doing things that few others could stomach, such as mocking a female senator over the death threats that she was receiving from irate liberals.

He also may be right about California voters. While others are struggling to come up with ideas for a state that is facing a crushing debt crisis and top taxpayers fleeing the state, Swalwell is promising chest-pounding theatrics…more jester than governor. He will entertain and distract with measures that will be struck down in courts.

It is the modern equivalent of the Roman games, promising combat with federal officers to thrill the crowd. From California and New York, there is an insatiable appetite for lawfare and disruption. Swalwell will promise chaos and confrontation … and many California voters will love him for it.

Tyler Durden Wed, 12/31/2025 - 14:40

Russia Presents Its Evidence Of Ukrainian Drone Attack On Putin's Residence

Zero Hedge -

Russia Presents Its Evidence Of Ukrainian Drone Attack On Putin's Residence

"We're going to see some escalation now," Retired Air Force Brig. Gen. Blaine Holt has said amid allegations Ukraine targeted Putin's residence. "The Russians have made up their minds and made declarations about who they believe tried to strike the Valdai mansion that's owned by President Putin, and they're going to change their negotiable posture."

For starters, the Kremlin has already indeed made clear Moscow would toughen its stance in US-backed peace talks which seek to end nearly four-year-old war. The fear is also that Russia will use this as an 'excuse' to expand the war.

The Kremlin has presented images of downed drones related to the attack. Russian Defense Ministry via Reuters

The allegation is that Ukraine's military launched 91 long-range strike drones at the presidential compound in Novgorod Region on Sunday night into early Monday, but that anti-air defenses intercepted all of them, and there was no damage or casualties.

The Zelensky government has rejected this account, calling it a "fabrication" and says there was no effort to target Putin's home. This denial was followed by demands for evidence

On Wednesday the Russian government and state media have publicized various items of evidence said to prove the attack took place, also accompanied with interviews of various Russian citizen eyewitnesses from the area that night.

Moscow’s Defense Ministry newly released a map showing the flightpath of the Ukrainian long-range drones that targeted the presidential residence in Novgorod Region.

Additionally, Russia's Defense Ministry has published footage purporting to show the debris of one of the UAVs which had apparently been downed in the attack.

The ministry stated that it has "presented irrefutable evidence of a terrorist attack planned by the Kiev regime on the Russian President’s residence." 

The images feature "fragments of drones shot down in Novgorod region, including those with warheads equipped with special striking elements designed to kill people," the statement continued. But Kiev isn't buying it.

Ukraine's Foreign ministry has responded to the video footage by saying it's "laughable" that this constitutes proof the Ukrainians tried to attack Putin's residence.

Interestingly, Moscow is still trying to keep a sympathetic ear from the White House, after President Trump issued condemnation of the alleged attack on Putin's home. The Kremlin has asserted the failed attack was also "against President Trump's efforts to facilitate a peaceful resolution of the Ukraine conflict."

Tyler Durden Wed, 12/31/2025 - 14:20

Moore: Economists Got 2025 All Wrong

Zero Hedge -

Moore: Economists Got 2025 All Wrong

Authored by Stephen Moore via DailyCaller.com,

Well, Donald Trump has done it again!

He stumped the chumps.

The “chumps” in this case were the “blue chip” academic and financial economists whose consensus forecast this time last year was for high inflation and low economic growth. Wrong on both counts.

As you’ve probably heard, the GDP growth for Q3 came in at a red hot 4.3% following 3.5% for the second quarter. Some 90% of the professional economists got it wrong — all underestimating the strength of the Trump economy. QED: these weren’t random errors. These were “hate Trump” errors.

They also predicted inflation of above 3% for 2025. It’s going to come in at closer to 2.7% with the last two months trending down to the Fed inflation target of 2%.

Starting in the second quarter, GDP has been nearly twice as high as predicted.

To quote the inimitable special agent Maxwell Smart: “Missed it by that much.”

This isn’t the first time the whiz kids whiffed on the Trump economy.

These are the same Keynesian economists who warned at the start of Trump’s first term that we would see a stock market crash. (The stock market is today at record highs on all three indices. Paul Krugman, who won a Nobel prize in economics, and wrote regularly for the New York Times for years, famously feared a second Great Depression if Trump policies took hold).

Krugman and others all thought Trump’s tariffs would ignite runaway inflation.

There’s no doubt tariffs did cause a rise in aluminum, coffee and beef prices – commodities that got hit by tariffs as high as 50%. But the economic pundits failed to take account of the disinflationary effect of pro-growth policies like deregulation, Trump tax rate cuts, and pro-America energy policies. These counteracted the impact of tariffs on prices overall.

One would have thought that the academics and media would have learned from their mistakes of always underestimating Trump on the economy. But they seem incapable of self-correcting. They keep doubling-down on dire predictions about Trumponomics.

The latest blue chip forecast for economic growth for 2026 is a measly 1.9% even though the economy has been growing 50% faster than that of late.

This raises the question: why are they persistently wrong? It could be that they are so afflicted with Trump Derangement Syndrome that they can’t see or shoot straight. Or perhaps they WANT Trump to fail so their judgment is impaired. No one likes their theories, orthodoxies, and core beliefs to be proven wrong.

The forecasts of the “hate Trump” sages are about as accurate as a blind man tossing darts at a dartboard in a crowded bar.

If these blue chippers had any integrity, they’d admit that they don’t know what they are talking about.

Fat chance that will ever happen. Instead these prophets of doom will continue to give the entire economics profession a black eye. No wonder it is known as “the dismal science.”

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation or ZeroHedge.

Tyler Durden Wed, 12/31/2025 - 14:00

The Trump Administration's Fight To Fund Scientists

Zero Hedge -

The Trump Administration's Fight To Fund Scientists

Authored by Paul D. Thacker via RealClearInvestigations,

The panic and outrage were palpable last February when President Trump announced plans to trim reimbursement rates for government-funded scientific research.

This is going to decimate U.S. scientific biomedical research,” Northwestern University biologist Carole Labonne told Bloomberg. “The lights will go out, people will be let go, and these [medical] advances will not occur,” David Skorton, CEO of the Association of American Medical Colleges, told PBS. “The goal,” University of Washington biologist Carl Bergstrom warned on BlueSky, “is to destroy U.S. universities.”

The sky has not fallen on American research in the 10 months since. The National Institutes of Health (NIH) is still paying the same 50% to 70% in indirect costs – the premium added on top of grants meant to reimburse universities for providing labs and other research infrastructure – because lawsuits have frozen the president’s proposed policy. One Trump official admits this is unlikely to change because the administration will almost certainly lose in court. The current system, which provides the lion’s share of billions of dollars each year for often-unspecified overhead costs to universities, has the backing of Congress. As it stands, there appears to be no momentum, even among Republicans, to reform the practice.

It’s basically a slush fund,” one NIH official told RealClearInvestigations. “We just don’t like to call it that.”

A RealClearInvestigations analysis of these indirect payments reveals a long, largely forgotten history of concern about taxpayer-sponsored research. Although many researchers have cast Trump’s proposal as an attack on science, this issue isn’t the need to fund research activities that sometimes lead to beneficial discoveries, but whether some of the billions that support the necessary infrastructure and equipment are actually being shifted to purposes such as staffing and buildings that have little or no direct connection to the actual research. 

In the late ’80s, Stanford faculty revolted against the university’s high overhead charges for diverting research dollars to a bloated administration and a campus building frenzy. Those concerns are still voiced by some.

If the universities truly believe that it takes 60-70% of a research grant to provide facilities, utilities, and other basic support, then that is easy to prove by opening the books,” said Sanjay Dhall, a research physician at the University of California, Los Angeles. “I suspect however, that opening the books would reveal that a significant chunk of these funds, or even the majority, are paying an army of unnecessary administrators.”

At a time when the value of college is being challenged because of exorbitant tuition and fees, and the federal government is struggling to rein in debt, the story of indirect funding offers a window into the history of runaway costs and the growing power of college officials. RCI has also learned that NIH Director Jay Bhattacharya has been selling a new plan that makes the grant process more competitive for institutions that were overlooked in the past. 

Indirect Costs Hard To Define

Distributing over $37 billion in grants every year, NIH is the largest funder of biomedical research on the planet, far exceeding the European Commission, which spends around $12 billion, and dwarfing the Gates Foundation’s $1 billion. 

Every NIH grant a university researcher receives provides two categories of funding: direct and indirect costs. The direct costs include all items the researcher submitted as part of the project’s budget, from laboratory equipment to a percentage of salaries.

Indirect costs are harder to define. The funding goes to administrators, and how they use it is shrouded in mystery. What’s more, indirect rates vary from university to university for reasons that few understand and can explain. 

While institutions charge private foundations like Gates a mere 10% and Rockefeller 15% for indirect costs, they charge the NIH much higher rates – 69% for Harvard, 67.5% for Yale, and 63.7% for Johns Hopkins. 

“How do you think Harvard built all those buildings?” one NIH official, a graduate of Harvard Medical School who insisted on anonymity, told RCI. “NIH indirect costs paid for that.”

When Trump first proposed the 15% cap in 2016, Harvard president Drew G. Faust told the student newspaper in late 2017 that she flew to Washington, D.C., to lobby Republicans in both the House and the Senate to stop it. “We’re bringing in quite a bit of money through federal contracts which provide money for a lot of buildings and other infrastructure that makes possible what we do going forward,” a Harvard dean told the student newspaper. “So if that was to all go away, we’d have to sit down and look at that.”

The Trump administration’s proposal to cap overhead at 15% would cost university administrators billions of dollars that they control. Among the many critics was Holden Thorp, editor-in-chief of the flagship journal Science and a former university administrator. He wrote an editorial last February titled “A Direct Hit” that described the cap as a “ruthless takedown of academia.”

The scientific community must unite in speaking out against this betrayal of a partnership that has enabled American innovation and progress,” he wrote.

In response to questions from RCI, Thorp said any change to NIH overhead funding should be done in partnership with the scientific community. “Indirect costs are used to secure debt on research facilities and were treated as very secure by banks and the rating agencies,” Thorp said. “Pulling all of that abruptly – without following processes with decades of precedent – is certainly betraying a partnership by putting the universities in difficulty with their lenders and bond ratings.” 

Inexorable Rise in Charges

It turns out that concerns over universities possibly misusing federal grant money date back more than half a century, according to Thorp’s own publication. In 1955, the federal government almost doubled the 8% premium paid for university overhead. A decade later, Science reported that Congress lifted the overhead ceiling to 20%, maintaining a flat rate to assure more taxpayer dollars were targeted at scientific research, and less spent on constructing new buildings. Some members of Congress believed that “the universities need not accept the grants if they can’t afford them.” Elected officials also worried that indirect costs would not go to research but to support other university efforts.

You might be surprised if you read the list of money being spent for research in various universities,” one senator said in a 1963 Science news story. “Not only to pay the teachers, but also to construct buildings and facilities around the school.” 

Despite these concerns, lobbyists convinced the government in 1966 to remove all caps, empowering universities to negotiate directly with federal agencies to set their own overhead rates. In 1966, overhead consumed 14% of NIH grant expenditures. By the late 1970s, it consumed 36.4%. When the federal government attempted to backpedal in 1976 to bring “spiraling indirect cost rates under control,” it failed. 

Both Republicans and Democrats have long championed increasing NIH budgets, partly because grants for research land in congressional districts scattered across the nation. Republicans have often been the NIH’s biggest supporters. Fifteen years ago, Congress launched investigations into the NIH’s poor monitoring of grants that were awarded to research physicians with undisclosed ties to the pharmaceutical industry. Despite the unfolding scandal, Republican Sen. Arlen Specter pushed through a 34% increase in the NIH’s budget in 2009. During the 2013 government shutdown, the NIH was one of the few agencies that Republicans pushed President Obama to keep open. Two years later, Republicans cut many parts of Obama’s proposed 2015 budget, yet gave the president even more money than the increase he requested for the NIH.

Like some elected officials, academics have also long complained that high overhead harms academic scientists by diverting NIH funding to administrators. In 1981, a University of California researcher published a study in Science, which showed how “Funding has thus been markedly reduced, and this has become a critical factor limiting research support in the United States.”

By 1983, indirect costs accounted for 43% of the NIH grant budget. In response, then-NIH Director James B. Wyngaarden pushed to make more money available for scientists by paying administrators only 90% of what they claimed in overhead. 

“[L]egislators tend to sympathize with the investigators who are more interested in seeing federal money spent for equipment and researchers’ salaries in their labs than for light and heat and the services of typists and bookkeepers,” reported Science at the time. 

However, Science reported that Wyngaarden was met with stiff opposition from university officials and their allies in Congress.

When Wyngaarden tried to deal with the matter by sending a report to Congress, Science reported, officials from several university lobby groups shut the report down, calling it not “acceptable.”

One of Wyngaarden’s biggest critics was Stanford President Donald Kennedy, whose school was then charging one of the highest rates for indirect costs. Kennedy convened a group to attack cost-saving proposals, stating in a letter, “The NIH proposals to reduce reimbursement of those costs … will directly damage the research effort as a whole.” 

This effort appeared to succeed until Kennedy himself became ensnared in a scandal that showed Stanford’s indirect costs charged to the NIH paid for a bevy of personal goods and upkeep on a yacht. 

Stanford’s Taxpayer-Funded Yacht

Stanford’s yacht, the Victoria, was valued at $1.2 million and became a symbol of excess, with walnut and cherry paneling, brass lamps, marble counters, and lavish woodwork. Administrators used the yacht as a fundraising venue to wine and dine campus bigwigs. NIH money had paid for overhead to maintain it. 

As Congress and federal investigators dug into Stanford’s accounting, they discovered that administrators had also redirected NIH research overhead to pay $2,000 a month for flowers at President Kennedy’s home, $7,000 for his bed linens, and $6,000 to provide him with cedar-lined closets. Another college official had hosted Stanford football parties and charged the NIH $1,500 for booze.

Humiliated in the media, Stanford was forced to lower the indirect rate it charged the NIH from 78% to 55.5%, and federal agencies launched audits of overhead charges at dozens of other universities, resulting in millions of dollars returned to the NIH. 

With the politics and the media on his side, Michigan Congressman John Dingell launched reforms to indirect charges. Stanford and other institutions were forced to halt expensive building campaigns. President Clinton proposed a cap on indirect costs in a “concerted effort to shift national spending from overhead to funding research.” As in the past, universities opposed the change, and the White House buckled.

“One way or another, I’ve been involved in controversy about indirect cost rates for about 30 years,” a chancellor at the University of Maryland told The Baltimore Sun in 1994. 

Kennedy resigned from the Stanford presidency, as did several of his administrators. Kennedy later joined Science as editor-in-chief – a predecessor to Thorp – while universities’ charges for indirect costs to the NIH eventually snapped back to their former pricing, which continues to this day.

RCI spoke with several academic researchers at institutions scattered across the U.S., working at both private and public-funded universities. None wished to be named about their concerns about how their administrators spend NIH indirect funding, with one professor noting that administrators determine your career, so it makes no sense to criticize their spending habits.

While university presidents say administrators strictly account for NIH indirect funds, the reality appears to be different. Professors who bring in large sums of NIH money, sometimes referred to as heavy hitters, can complain and get some of the indirect costs back from the administrators for their own research and even personal use. At some institutions, department heads can get a cut of the indirect costs to set up slush funds, monies they can dole out to favored professors, or even divert to their own labs.

Professor Dhall said that after he published a March letter in the Wall Street Journal that supported Trump’s cap on indirect rates, he was contacted by colleagues across the country. “They congratulated me on going public and vehemently agreed, in private,” he said. 

A congressional staffer who has spent decades investigating problems at the NIH said that nobody truly understands how universities negotiate their NIH overhead rates. And once that money gets to the university, it disappears into a byzantine accounting system that seems designed to confuse government auditors, who rarely inspect university books.

“It’s a complete black box,” he said. “I wish someone could explain it to me.”

Trump’s Play To Change the Game

The Trump administration will lose the fight to cap indirect costs at 15%, a senior HHS official told RCI, because of the universities’ outsize influence. During the first Trump administration, universities caught wind that Trump planned to cap overhead rates. As they had done for over half a century, university lobbyists ran to Congress to complain, only now they sought an alliance with the pharmaceutical industry.

Responding to lobbying pressure, Republicans in the House and Senate inserted a provision into the appropriations bill in 2018 to block Trump’s attempt to change universities’ indirect cost rates. That provision has been included in every succeeding appropriations bill.

While it does not seem likely that Congress will strip the schools in their states and districts of billions of dollars in funding, NIH Director Bhattacharya has been floating his own proposal to revamp indirect payments to make them more equitable in private talks with members of Congress and university leaders. Shortly before Thanksgiving, Bhattacharya gave a dinner talk to the Republican Main Street Caucus, a group of 85 GOP members of Congress who are critical behind-the-scenes players among Republicans now running the House. 

A dinner participant recounted to RCI that Bhattacharya noted that more than half of the NIH’s money goes to 20 universities located on both coasts. These elite universities win a lion’s share of the grant money, including indirect costs, because they have the money to attract excellent scientists, in part because NIH money helped them build great infrastructure. 

This creates a vicious cycle that guarantees NIH will continue to fund institutions that have already won past NIH money – and which charge high indirect costs. To end this cycle, Bhattacharya wants to break off indirect costs into a separate category of infrastructure grants that universities can compete to win.

During the talk, Bhattacharya said that all the universities in the entire state of Florida now get as much money as Stanford. Yet, there’s no reason Florida could not become a hub for scientific research if the federal government invested in its scientific infrastructure. 

If Florida can provide lab space at a lower cost than Stanford, he said, they should get the money. Bhattacharya also wants to make it easier for academics to take their grant to different universities. If a Harvard researcher is offered more space or better facilities at a university in Kansas, because building costs there are cheaper, that professor should be able to transfer his grant. 

The NIH already provides specific grants for infrastructure, and the hope is that spreading the billions in indirect costs across the country will gain political support. 

“He wants to get this money out to the middle of the country, not just the coasts,” said Congresswoman Mariannette Miller-Meeks, Republican from Iowa. Dr. Miller-Meeks is one of the few physicians in Congress and said she was impressed with Bhattacharya’s talk at the Main Street Caucus dinner. However, she is uncertain whether Democrats would embrace the new proposal in today’s polarized environment.

I would think there are members from the center of the country that would like to see more money in their district,” she said.

A spokesperson told RCI that NIH remains focused on ensuring that funding is used efficiently and that direct and indirect costs contribute to scientific productivity. “Bhattacharya’s proposal represents one of several ideas being discussed publicly about how to structure federal support for research infrastructure,” the spokesperson said. “NIH looks forward to continuing to work constructively with Congress on this issue.”

Tyler Durden Wed, 12/31/2025 - 13:20

DOJ's Inventory Of Unreleased Epstein Files Soars To 5.2 Million Pages

Zero Hedge -

DOJ's Inventory Of Unreleased Epstein Files Soars To 5.2 Million Pages

Already in violation of a statutory deadline and accused of engaging in rampant, unlawful redactions, it's been revealed that the US Department of Justice has about 5.2 million pages of documents related to convicted sex offender Jeffrey Epstein that still need to be reviewed, according to a document reviewed by Reuters and inside sources cited by the New York Times

The Epstein Files Transparency Act, which was enacted in November, gave the DOJ a Dec. 19 deadline for releasing "all unclassified records, documents, communications, and investigative materials" relating to Epstein and his convicted co-conspirator Ghislaine Maxwell. It released some 100,000 pages on the due date, but now we learn that first batch represented a tiny 1.9% of the total inventory -- before accounting for duplicates. 

The initial release of Epstein documents included this photo of former President Bill Clinton being embraced by an unidentified woman

With Republican Rep. Thomas Massie and Democratic Rep. Ro Khanna in discussions with other members of Congress about potentially holding Attorney General Pam Bondi in contempt, the DOJ is scrambling to amass a legion of 400 lawyers to work on the enormous task. Those lawyers will come from the DOJ's Criminal Division, the National Security Division, the FBI and the US Attorney's office in Manhattan, according to Reuters, with a goal of hammering out the mass-review between January 5 and 23. Until now, the DOJ has had almost 200 lawyers from the National Security Division reviewing the files. 

Of course, these extra lawyers being recruited into the project have other responsibilities, so the expectation is that they'll allocate three to five hours a day to the Epstein files. Volunteers will be enticed with time-off awards along with the option to work the Epstein project remotely. 

Last week, DOJ said it had discovered more than a million more documents with potential links to the Epstein cases. Seeking to fend off criticism, the DOJ said:   

“We have lawyers working around the clock to review and make the legally required redactions to protect victims, and we will release the documents as soon as possible. Due to the mass volume of material, this process may take a few more weeks."  

The threat of contempt isn't the only form of heat Bondi and the Trump administration are facing. On Christmas Eve, a group of 12 senators sent a letter to DOJ Acting Inspector General Don Berthiaume demanding an audit of the DOJ's handling of the Epstein files.

Beyond pointing to the failure to meet the Dec. 19 deadline, the senators said the huge number of redactions in the released documents have raised "serious questions as to whether the Department is properly applying the limited exceptions for redaction that are permitted under the Act. Any withholding or redaction beyond those specified circumstances is against the law."

Does anyone really believe that Epstein and Maxwell were the only wrongdoers in this vast, sordid saga? 

Tyler Durden Wed, 12/31/2025 - 13:00

Question #4 for 2026: What will the participation rate be in December 2026?

Calculated Risk -

Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2026. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I posted thoughts on those in the newsletter (others like GDP and employment will be on this blog).

I'm adding some thoughts and predictions for each question.

Here is a review of the Ten Economic Questions for 2025.

4) Participation Rate: In November 2025, the overall participation rate was at 62.5%, unchanged year-over-year from 62.5% in November 2024, and below the pre-pandemic level of 63.3% in February 2020. Long term, the BLS is projecting the overall participation rate will decline to 61.1% by 2034 due to demographics. What will the participation rate be in December 2026?

The overall labor force participation rate is the percentage of the working age population (16 + years old) in the labor force.   A large portion of the decline in the participation rate since 2000 was due to demographics and long-term trends.

Employment Pop Ratio and participation rateThe Labor Force Participation Rate in November 2025 was at 62.5% (red), down from the pre-pandemic level of 63.3% in February 2020, and up from the pandemic low of 60.2% in April 2020. (Blue is the employment population ratio).
From February 2020 to April 2020, 12 million people had left the labor force due to the pandemic.   By November 2025, the labor force was about 4 million higher than the pre-pandemic high.  
Population growth had been weak in the 2010s, but picked up over the last few years, primarily due to more immigration.   However, net immigration slowed in late 2024 and slowed sharply in 2025.
Employment Population Ratio, 25 to 54The second graph shows the participation rate for "prime age" workers (25 to 54 years old). The 25 to 54 participation rate was at 83.8% in November 2025 Red), above the pre-pandemic level of 83.0% - and near the all time high of 84.6% in 1999.  This suggests there are very few prime age workers that will return to the labor force.
This means demographics will be the key driver of the participation rate in 2026 (barring some unseen event).  Demographics will be pushing the participation rate down over the next decade, so, my guess is the participation rate will decline by 0.2 to 0.3 percentage points over the next year to around 62.3% in December 2026.
Here are the Ten Economic Questions for 2026 and a few predictions:

Question #4 for 2026: What will the participation rate be in December 2026?

Question #5 for 2026: What will the YoY core inflation rate be in December 2026?

Question #6 for 2026: What will the Fed Funds rate be in December 2026?

Question #7 for 2026: How much will wages increase in 2026?

Question #8 for 2026: How much will Residential investment change in 2026? How about housing starts and new home sales in 2026?

Question #9 for 2026: What will happen with house prices in 2026?

Question #10 for 2026: Will inventory increase further in 2026?

"This Is A Perfect Storm": Martin Armstrong Warns 'War Is Coming'

Zero Hedge -

"This Is A Perfect Storm": Martin Armstrong Warns 'War Is Coming'

Via Greg Hunter’s USAWatchdog.com 

Legendary financial and geopolitical cycle analyst Martin Armstrong says everywhere you look there is big trouble bubbling out of control.  

Armstrong sees the perfect storm closing in from all sides.  Let’s start with the war in Ukraine.  It looks like peace was possible until Russia claimed Ukraine attacked Putin’s residence.  Also, just today, a fresh headline reads “More than 600,000 Russians plunged into darkness as Ukrainian drones strike Moscow.”  Armstrong says,

“I don’t see this turning into a real sustainable peace. 

What they are trying to do is get a ceasefire so NATO can send in their troops pretending to defend Ukraine, and what’s going to happen is a false flag. 

They are going to say, oh, they shot one of our guys in the foot, therefore, that’s World War III.”

The extreme unpayable debt situation is worst in Europe.  Armstrong points out,

“Europe is so concerned with this idea of social justice. 

You can go on the Fed website and look at Europe’s miniscule quarterly growth rate and compare it to the United States. 

It’s a tiny fraction compared to the US.  Europe is committing economic suicide.  That’s what this war is about. 

If they don’t get war with Russia, the people are going to rise up with their pitchforks and go after parliament. . .. 

The EU is not going to survive.  It’s going to collapse. 

The computer says we are going into a stark global recession between 2024 and 2028.  The US will be the least affected, where Europe will probably be the worst.”

When it comes to metal, Armstrong says, “People who know war and crisis are coming are buying metals..."

"We have creative destruction.  You have AI coming in and you have unemployment rising and you have GDP rising. . .. You have shortages in commodities on top of this. . ..  Then you have geopolitical nonsense. 

Anthony Blinken (Secretary of State in the Biden Administration) put sanctions on Russia.  Look at the metals.  What did it do?  It cut off the supply of gold, silver and platinum coming out of Russia.  Now, you have China putting in a ban on exporting silver as of January 1, 2026.  

This is rather important.  China controls about 60% of the supply of silver. . .. This is one of the reasons why silver jumped up dramatically. 

This is a perfect storm.  On top of all this, NATO is there only for war.  That is it. . ..

Socrates is still saying Europe will lose badly in a war with Russia.”

Armstrong sees a bull market for gold, silver and other metals for years ahead.  One big reason is shortages in the metals.  Armstrong says, “I don’t see these shortages going away.  The bull market is more likely to go into 2032.  It will be volatile, and then you’ve got war coming.  Once you get into war, prices are going to go up even more.  It’s all a mess.  This is a perfect storm.”
There is much more in the 55-minute interview.

Join Greg Hunter of USAWatchdog as he goes One-on-One with Martin Armstrong to talk about the perfect horrible storm coming for the world in 2026 for 12.30.25

Tyler Durden Wed, 12/31/2025 - 12:35

Crew Paints Russian Flag On Iran-Linked Tanker To Avoid US Seizure

Zero Hedge -

Crew Paints Russian Flag On Iran-Linked Tanker To Avoid US Seizure

The weird saga of the US-sought third tanker off Venezuela which was nearly boarded by US forces before fleeing into the Atlantic continues, after US officials have newly revealed more information.

US attempts to intercept the oil tanker Bella 1 in the Atlantic have been complicated after the ship’s crew painted a Russian flag on its hull. It has avoided and evaded the US Coast Guard for more than ten days after refusing to comply with an interception near Venezuela on December 21.

Reports based on US officials describe that the crew got creative in their evasion efforts, as they've added a Russian tricolor to the side of the vessel and so are now claiming it is operating under Russian jurisdiction.

This has created new complications, given Washington had secured a court order authorizing the ship's seizure due to its alleged involvement in transporting Iranian crude. But now with the newly displayed flag Russian flag, this has made enforcement more difficult under international maritime law.

The tanker was traveling toward Venezuela without any cargo at the time that US Coast Guard forces tried to board it - and then it fled into open sea, after which US assets continued shadowing the ship.

Under the UN Convention on the Law of the Sea, authorities are allowed to board vessels that are flying false flags or lack proper registration - but in the scenario that Russia has officially registered the Bella 1, a forced boarding could risk diplomatic fallout and an international incident.

The tanker in question has been under US Treasury sanctions since 2024, as it has long been accused of transporting Iranian oil on behalf of Hezbollah, the Houthis, and Iran's elite Islamic Revolutionary Guard Corps (IRGC).

The vessel is owned by Louis Marine Shipholding Enterprises, which is based in Turkey, and most of the crew are believed to be Russian, Indian, and Ukrainian.

The now apparently stymied attempt to apprehend the vessel comes soon on the heels of President Trump having ordered the US military to enforce a two-month "quarantine" of Venezuelan oil, signaling an intensification of gunboat diplomacy aimed at fostering regime instability in Caracas, with potential spillover effects that could ripple across the Caribbean into Cuba.

"While military options still exist, the focus is to first use economic pressure by enforcing sanctions to reach the outcome the White House is looking (for)," a US official told Reuters earlier this month.

"The efforts so far have put tremendous pressure on Maduro, and the belief is that by late January, Venezuela will be facing an economic calamity unless it agrees to make significant concessions to the U.S," the U.S. official told Reuters.

According to analytics firm Kpler, Caracas has shipped nearly 900,000 barrels per day this year and relies on 400 dark-fleet tankers to transport the crude, much of which is bound for China. 

Tyler Durden Wed, 12/31/2025 - 12:15

High Electricity Prices Are A Choice Blue States Make Every Day

Zero Hedge -

High Electricity Prices Are A Choice Blue States Make Every Day

Authored by Isaac Orr & Tom Pyle via RealClearEnergy,

Americans are anxious about their utility bills – and with good reason. Three quarters of U.S. residents are concerned about their electricity and gas bills rising this year, and 80% feel powerless over how much they are charged for utilities. For nearly two-thirds of U.S. billpayers, simply keeping the lights on has become a growing source of financial stress.

(don't say her name three times in front of a mirror)

Those concerns are grounded in reality. U.S. electricity prices rose 27% during the Biden administration and another 11% between January and September 2025. Yet despite a national narrative eager to blame President Trump’s One Big Beautiful Bill Act (OBBBA), the real drivers of high electricity prices are far closer to home.

Electricity affordability is shaped primarily by state policy choices, and states choosing the most expensive path are overwhelmingly blue. So, blue-state residents are experiencing the pain much more than those in red states.

A new report from Always On Energy Research and the Institute for Energy Research finds that 86% of states with electricity prices above the national average voted for Democratic presidential candidates in 2020 and 2024. In contrast, 80% of the 10 states with the lowest electricity prices are reliably red. That’s not a coincidence. Those high prices reflect a consistent pattern of state-level energy policies that dictate emissions reduction targets at the expense of affordability, reliability, and physics. 

States have the exclusive power to decide which resources supply their grids under the Federal Power Act. Governors, legislatures, and public utility commissions – not the White House – decide whether to impose renewable portfolio standards (RPS), enforce Net-Zero mandates, or prematurely retire reliable power plants. Those decisions directly determine how much families and businesses pay for electricity.

Today, 28 states enforce an RPS, requiring a certain percentage of retail electricity sales to come from renewable sources, and 16 states have 100% clean energy standards (CES) or carbon-free mandates. Many of these policies compel utilities to overbuild intermittent generation, such as wind and solar, thereby requiring significant investments in transmission, grid-scale storage, and backup generation to maintain reliability. The result is a higher total system cost, which is passed onto ratepayers in the form of higher electricity rates.

Consider that the U.S. average electricity price between January 2025 and August 2025 was 13.54 cents per kilowatt-hour. Each of the five most expensive states mandates 100% of their electricity come from renewable or carbon-free sources in the coming decades. Eight of the 10 states with the lowest electricity prices voted for the Republican presidential candidate in 2020 and 2024, and seven of the 10 don’t have renewable or carbon-free mandates.  

New York is a prime blue state example, where electricity prices were 58% higher than the national average during the same period. The Progressive Policy Institute (PPI) found that New York experienced the second-fastest increase in electricity prices nationwide, with residential customers suffering a 36% increase between 2019 and 2024. PPI points to “the immense capital investment required to transform the grid and specific policy choices that increase the cost of energy production,” as well as the closure of the Indian Point nuclear plant. 

It’s clear that Governor Kathy Hochul knows exactly which policy choices are driving up electricity costs — because she’s scrambling to roll them back. Ms. Hochul has delayed implementation of the state’s cap-and-tax mandates under the 2019 Climate Leadership and Community Protection Act (CLCPA), which includes a substantial renewable energy mandate requiring 70% renewable energy by 2030 and 100% carbon-free energy by 2040.

The state’s Department of Environmental Conservation defended the delay, arguing in court that the regulations would impose “extraordinary and damaging costs upon New Yorkers.” Ms. Hochul has approved two major natural gas pipelines and delayed implementation of the state’s ban on gas stoves in new buildings – a tacit admission that reliability and affordability still matter in New York.

California, however, remains committed to the most expensive path in the country with the fastest rate increase, now double the national average. For years, Governor Gavin Newsom and the California legislature have imposed on ratepayers a carbon-emissions reduction mandate, renewable mandates, solar cost-shifting through net metering, nuclear reactor closures, and EV charging subsidies.

For all of his climate-friendly posturing, Mr. Newsom signed a bill to ramp up oil drilling in Kern County, and his Energy Commission has delayed its plan to penalize refinery profits for five years. These reversals underscore a central truth: ideology will take a back seat to cost and reliability.

There’s a silver lining, however. While states can choose to raise electricity costs for their residents through bad policies, they can also choose to lower costs through good policies. For instance, Florida is the second-largest electricity producer in the country, behind only Texas. Residents require air conditioning for its hot, humid summers and heating in its mild winters. However, Florida delivers electricity at prices 2% below the U.S. average—mainly because it generates 75% of its power from imported natural gas. It has avoided aggressive climate mandates and delivers below-average electricity prices despite frequent hurricanes that require ongoing investment in the grid. 

Louisiana and Kentucky have also invested in wise policies. Louisiana posted the third-lowest electricity rates in the U.S. in 2025, and Kentucky had the lowest rates east of the Mississippi River. Nearly three-quarters of Louisiana’s electricity is generated from natural gas, leveraging its abundant natural gas production and robust pipeline network. Kentucky, similarly, leverages its coal resources to generate 67% of the state’s electricity, with another 26% by natural gas. Neither has pursued aggressive carbon emissions reduction or renewable energy mandates.

Pinning the blame on the federal government and President Trump, as Democrats have been eager to do, ignores the vital role that states play in delivering affordable, reliable electricity. Secretary of Energy Chris Wright recognizes the same, stating on Fox News that “Electricity prices have risen very fast in blue states with restrictive renewable portfolio standards.” 

The Department of Energy and President Trump can set the tone, but they don’t dictate the composition of state grids or the bills consumers receive each month. Those decisions rest squarely with governors, legislators, and regulators. Ultimately, it’s up to the states to prioritize reliable, affordable, dispatchable generation and drive down electricity prices.

High electricity rates aren’t an unavoidable consequence of modern life or federal policy. They are the predictable outcome of state-level choices that ignore reliability, undervalue dispatchable generation, and impose rigid mandates regardless of cost. Americans deserve leaders who recognize that keeping the lights on at a modest price isn’t optional. The states keeping electricity affordable today offer a roadmap for those willing to learn.

Isaac Orr is vice president of research at Always On Energy Research, a nonprofit energy modeling firm.

Tom Pyle is President of the Institute for Energy Research, a nonprofit energy research organization.

Tyler Durden Wed, 12/31/2025 - 11:55

"Regulatory Theater": Meta Created 'Playbook' To Obscure Scam Ads From Regulators, Avoid Forced Verification

Zero Hedge -

"Regulatory Theater": Meta Created 'Playbook' To Obscure Scam Ads From Regulators, Avoid Forced Verification

Last month Reuters revealed that roughly 10% of Meta's annual revenue, or $16 billion, comes from advertising scams and banned goods - as the company only bans advertisers when its systems detect a 95% probability of fraud, while charging higher ad fees to suspicious buyers - a system critics describe as “pay to play.”

Data from fraud-reporting firm SafelyHQ shows Facebook is cited in 85% of scam reports that identify a platform, with more than 50,000 verified complaints collected so far, which CEO Patrick Quade suggests an implied victim count in the "tens of millions."

Now, internal documents reviewed by Reuters indicate that Meta developed tools to both reduce scam advertising, and to limit regulators’ visibility into said ads after governments threatened measures that could severely cripple advertising revenue by forcing the company to reveal the identity of advertisers.

The efforts began last year after Japanese regulators highlighted a surge of scam advertising on Facebook and Instagram. The fraudulent ads included fake investment opportunities and artificial-intelligence-generated celebrity endorsements. Fearing that Japanese authorities might impose strict verification and transparency requirements that would materially affect its advertising business, the company launched an enforcement push aimed at reducing the number of fraudulent ads. At the same time, the documents show, the company focused on how those ads appeared to regulators.

The Ad Library and "Prevalence Perception"

Meta's remedy centered on its 'Ad Library,' a public database designed to allow users to search for ads running on Facebook and Instagram. Meta employees realized Japanese regulators were using keyword searches in the library as a simple measure of the company’s effectiveness at tackling scams.

To improve performance on that measure, Meta staff identified the keywords and celebrity names most frequently used by Japanese Ad Library users. They then repeatedly ran those searches themselves, deleting ads that appeared fraudulent from both the Ad Library and Meta’s platforms.

Internally, the documents describe this work as managing the "prevalence perception" of scams. The stated objective was to make problematic content "not findable" for “regulators, investigators and journalists.”

Internal documents reviewed by Reuters show Meta studying Ad Library searches and adjusting enforcement to reduce the discoverability of problematic advertising. (Reuters)

The tactic produced rapid results. Within weeks, Meta staff reported finding fewer than 100 scam ads in a week, followed by several consecutive days in which searches returned none. A Japanese legislator publicly praised the apparent improvement, and Japan ultimately did not impose the advertiser-verification rules Meta had feared.

From Local Response to Global Strategy

Given their success in dealing with Japan, Meta incorporated the approach into what internal documents describe as a "general global playbook" for responding to regulatory scrutiny worldwide. The same techniques - scrubbing Ad Library search results and reducing the discoverability of scams - were later deployed in markets including the United States, Europe, India, Australia, Brazil and Thailand.

This was all part of a broader strategy for delaying or weakening regulatory action, according to the report - with the playbook guiding Meta officials to offer voluntary measures, requesting time to assess their impact, and resisting universal advertiser verification unless laws leave no alternative.

Former Meta fraud investigator Sandeep Abraham, who left the company in 2023, said the approach distorts the transparency the Ad Library was meant to provide. Rather than offering an accurate view of advertising on Meta’s platforms, he said, it presents a curated picture optimized for regulatory review. Abraham described the tactic as "regulatory theater."

Internal documents reviewed by Reuters describe a “global playbook” aimed at delaying advertiser-verification mandates, even as company analyses show verification reduces scam ads but would cut revenue. (Reuters)

Meta disputes that characterization. Company spokesman Andy Stone told Reuters that removing scam ads from the Ad Library is not misleading because the ads are removed from Meta’s systems overall. Fewer scams appearing in the library, he said, indicate fewer scams on the platform.

"To suggest otherwise is disingenuous," Stone said. 

Yet, the best solution would be costly - as Meta has long recognized that universal advertiser verification would significantly reduce scam activity. Internal analyses indicate the company could implement such a system globally in less than six weeks - yet the company has repeatedly balked at the cost. Executives estimated that universal verification would require roughly $2 billion to implement and could eliminate up to 4.8% of total revenue by blocking unverified advertisers. Despite generating $164.5 billion in revenue last year, nearly all from advertising, the company chose not to proceed.

Internal data show that unverified advertisers account for a disproportionate share of harm. One 2022 analysis found that 70% of newly active advertisers were promoting scams, illicit goods or low-quality products.

Instead of adopting verification, Meta chose what documents describe as a "reactive only" stance, accepting universal verification only where mandated by law.

Whack-a-Mole

Despite Meta's playbook, Taiwanese regulators dropped the hammer - threatening steep fines for unverified financial scam ads. Meta rushed to comply with new rules requiring advertiser verification, which authorities said coincided with dramatic reductions in investment and impersonation scams.

Meta’s own analyses, however, showed that much of the blocked fraudulent advertising was rerouted to users in other countries, displacing both revenue and consumer harm rather than eliminating it. Unless verification was enforced globally, staff warned, Meta would be relocating scams rather than eradicating them.

Meta’s internal analyses, reviewed by Reuters, found that ads blocked in one market were often rerouted to others, preserving revenue while shifting consumer harm. (Reuters)

Even then, the documents show, the financial costs to Meta have remained small. Meta’s own tests showed verification immediately reduced scam ads in those countries by as much as 29%. But much of the lost revenue was recouped because the same blocked ads continued to run in other markets.

If an unverified advertiser is blocked from showing ads in Taiwan, for example, Meta will show those ads more frequently to users elsewhere, creating a whack-a-mole dynamic in which scam ads prohibited in one jurisdiction pop up in another. In the case of blocked ads in Taiwan, “revenue was redistributed/rerouted to the remaining target countries,” one March 2025 document said, adding that consumer injury gets displaced, too. “This would go for harm as well,” the document noted. -Reuters

Hong Kong is another example - where Meta lobbyists moved quickly in 2024 to blunt a proposal by financial regulators that would have required verification of advertisers promoting investment products. To preempt stricter rules, Meta staff helped regulators draft a voluntary “anti-scam charter” and coordinated with Google to present what one lobbyist described internally as a “united front.” The final language, the documents note, imposed no new verification requirements or product changes. In an internal message celebrating the outcome, a Meta lobbyist wrote that regulators had relaxed measures that would have forced identity checks for financial advertisers, adding that officials expressed “huge appreciation” for Meta’s participation. Hong Kong regulators later said advertiser verification was only one of several tools available to platforms and emphasized that they lacked authority to mandate such requirements, while urging social media companies to do more to detect and remove fraudulent content.

Internal documents reviewed by Reuters show Meta staff celebrating the success of lobbying efforts in Hong Kong that avoided new advertiser-verification requirements. (Reuters)

In a statement, Hong Kong financial regulators said that "advertiser verification is one of many ways social media platforms can protect the investment public."

In light of these findings, Meta has assigned scam handling its highest internal risk rating for 2025, citing regulatory, legal, reputational and financial exposure. One internal estimate warned that potential liability in Europe and Britain alone could cost as much as $9.3 billion.

Meanwhile, regulatory scrutiny has intensified - with European authorities having formally requested information about Meta’s handling of scam ads, and two U.S. senators urging federal agencies to investigate the company. The attorney general of the U.S. Virgin Islands has sued Meta, alleging it knowingly profited from fraud. Meta has said it strongly disagrees with the allegations.

For now, the documents suggest Meta believes its approach is working.

Tyler Durden Wed, 12/31/2025 - 11:35

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