The BEA reported that light vehicle sales were at 16.0 million in December on a seasonally adjusted annual basis (SAAR). This was up 1.9% from the sales rate in November, and down 4.9% from December 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through December.
Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".
Then sales were depressed in May and June. 
Sales were boosted in August and September due to the termination of the EV credit at the end of September.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in Decvember were slightly above the consensus forecast.
Light vehicle sales were up 2.4% in 2025 compared to 2024.

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the December 2025 seasonally adjusted annual sales rate (SAAR) of 311 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 311 thousand SAAR in December, down from 336 thousand in November, and down 32.5% from 461 thousand SAAR in December 2024.
Sales were down 15.3% in 2025 compared to annual sales in 2024.
Usually, heavy truck sales decline sharply prior to a recession, and sales have collapsed recently.

Today, in the Real Estate Newsletter: Asking Rents Decline Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.

More recently, immigration policy has become a negative for rentals.

Apartment List: Asking Rent Growth -1.3% Year-over-year ...

The national median rent fell 0.8% in December, and now stands at $1,356. This closes the book on 2025, with five consecutive months of rent declines. Based on recent years, we expect another 1-2 months of rent drops before the market turns a corner in early Spring.

Realtor.com: 28th Consecutive Month with Year-over-year Decline in Rents

Across the 50 largest metropolitan areas in the United States, median asking rent for 0-2 bedroom units fell for the 28th consecutive month on a year-over-year basis.

There is much more in the article.

China Slaps Export Controls On Japan For Dual-Use Items, Rare Earths, Could Impact Semiconductors 

More steady escalation between US-ally Japan and China has emerged, but things just got much more significant - moving from initial Chinese restrictions on things like seafood or cultural exchange events, to now Beijing announcing an immediate ban on all goods deemed dual use for Tokyo. Some rare earth elements are included in this, which impacts a range of technologies, goods, and services with both civilian and military applications.

Japanese Prime Minister Sanae Takaichi - still relatively early and fresh in her tenure - likely regrets her words from last November before her parliament, where she for the first time ever in Japan's history suggested the Japanese military could intervene to defend Taiwan from a future Chinese invasion of the self-ruled island. However, the Chinese demand for a full public retraction and apology hasn't come, which means Beijing is now engaged in more screw-tightening to demonstrate how serious it is.

In unveiling the new punitive measures Tuesday, a spokesperson for China's Commerce Ministry once again hammered on Takaichi’s "erroneous" comments and that China's national security and interests must be "safeguarded".

"These comments constitute a crude interference in China’s internal affairs, seriously violate the one-China principle and are extremely harmful in nature and impact," the statement said, followed by a warning that any entity or individual which violates the export ban will be held legally accountable. 

These new controls may affect shipments of semiconductors and rare earth materials to Japan's Self-Defense Forces and defense industry firms - which is without the intent, and signals that greater punishment and damage could be further implemented at any time.

However, the fresh announcement did not identify specific importers subject to the ban, with details not disclosed, and it remaining unknown just how these controls will be implemented or handled.

Beijing in addition to citing national security, described the move as vital to non-proliferation, especially in light of Tokyo's anti-China stance in the region.

China had already been steadily retaliating through measures related to curbing trade, cultural exchanges, and tourism - coupled with threats of more punitive action to come. There have lately been some serious military 'close calls' as well.

As DA Sails notes, "It’s a reminder that export controls are now a frontline geopolitical tool, not just a trade policy."

China's overnight announced 'dual use' export controls on Japan...

For example, early December saw an incident play out of Japan where Chinese PLA military aircraft locked radar on Japanese fighter jets, helping relations continue to spiral to their lowest point in many years.

All the while, Beijing has kept up its fiery denunciations, making clear there's "no space" for ambiguity on what China sees as its territory (Taiwan). Previously the foreign ministry has explained, "China has made its serious position clear several times on Japanese Prime Minister Sanae Takaichi’s wrongful remarks on Taiwan." And: "The remarks seriously violate the spirit of the four political documents between China and Japan, and cause fundamental damage to the political foundation of China-Japan relations."

Tyler Durden Tue, 01/06/2026 - 10:10

Florida Made Nearly 20,000 Immigration Arrests In 2025

Authored by T.J.Muscaro via The Epoch Times,

Nearly 20,000 immigration arrests were made in Florida in 2025, Gov. Ron DeSantis announced during a Jan. 5 press conference highlighting his state’s immigration enforcement standards.

Of that total number, 10,000 arrests were made as part of the Department of Homeland Security’s Operation Tidal Wave, and 7,674 were taken into custody by Florida’s highway patrol officers.

Those arrested included more than 6,300 people with criminal records, including violent and sexual offenses, as well as several hundred of the total 1,200 child predators arrested in the state that year.

It did not include any arrests made by federal agents or self-deportations, which authorities said reached about 1,000 people going through the state’s program alone.

DeSantis held the press conference at Deportation Depot outside Jacksonville, from which authorities said 93 deportation flights carried away 2,926 people in the few months the site was in operation last year.

Deportation Depot followed the establishment of the Alligator Alcatraz detention and deportation center deep in the Everglades.

DeSantis said that both facilities now had a federal immigration judge on site to expedite the deportation process.

He also announced that his administration was awaiting DHS approval to open a third detention and deportation center in North Florida that would be called the “Panhandle Pokey.”

The governor also suggested that a fourth site could open this year in South Florida, but he did not go into details.

DeSantis emphasized that the creation of every facility was meant as a temporary solution to support federal agents who have run out of space to keep illegal immigrants off the streets.

Although it is not clear how temporary they are, DeSantis expressed his hope that the federal government could expand its bed space and eliminate the need for any state intervention.

Dave Kerner (C), executive director of the Florida Department of Highway Safety and Motor Vehicles, describes the state's collaborative efforts with the federal government in immigration enforcement while speaking at a press conference at Deportation Depot in Sanderson, Fla., on Jan. 5, 2026. Natasha Holt for The Epoch Times

Florida Department of Law Enforcement Commissioner Mark Glass said his department and its partners in the Florida Department of Children and Families were continuing to work with the Trump administration to find the estimated hundreds of thousands of children who were brought into the country unaccompanied.

Florida Department of Agriculture and Consumer Services Commissioner Wilton Simpson announced the Department of Transportation was going to build another major highway checkpoint and close up what he called “a major hole” along the state’s northern border.

“We’re breaking up the fuel thefts,” he said. “We’re breaking up the stolen vehicles, the human trafficking, the illegals that we are catching, not only illegals, but the just bad folks ... making a big difference.”

Authorities pointed to Florida’s immigration legislation signed in February 2025, which required all state, county, and local agencies inside and outside of law enforcement to enter into 287(g) agreements and support the Department of Homeland Security’s nationwide crackdown on illegal immigration.

“Every state agency in Florida has made a 287 (g) Task Force arrest,” said Anthony Coker, State Board of Immigration Enforcement executive director.

“I think that it’s unprecedented, number one, but it also speaks to the leadership of our Cabinet and our governor really leading the way on immigration, and the state directors that are buying into it [have] been amazing.”

Coker said that state agency directors and county sheriffs have worked to build personal relationships with federal partners, and they continue to act on their own through self-initiated operations.

“The Florida blueprint of immigration enforcement has been widely recognized as being the gold standard of state-level immigration enforcement,” Coker said. “As we begin 2026, we’re excited for the opportunity to partner with other states and have them see as much success as we have.”

Many of these arrests came from engagements such as traffic stops by the Florida Highway Patrol.

“Is it easy? No,” said Dave Kerner, executive director of the Department of Highway Safety and Motor Vehicles.

“It’s not easy. Is it combative? It’s very combative. I can count at least 10 troopers who have been injured as a result of immigration enforcement operations, and seriously injured.

“But the point is, it can be done.”

The governor said that the enthusiasm for working with the federal government is not felt everywhere across the state, and he said that he is prepared to take action against anyone found “breaching duties.”

Tyler Durden Tue, 01/06/2026 - 10:00

Resilience Of US Economy Showing "Signs Of Cracking" As US Services PMI Disappoints

Following yesterday's US Manufacturing ISM survey disappointment, this morning we get yet more soft survey data - this time a look at the Services sector via S&P Global.

The final (December) US Services PMI data was a disappointment, printing 52.5 vs 52.9 expected...

Source: Bloomberg

While the print was a disappointment, it remains above 50 - expansion - but new business inflows rising to the weakest degree in over a year-and-a-half, growth of activity faltered and was the lowest since last April.

Confidence in the outlook also weakened, whilst employment volumes stagnated, failing to rise for the first time since last February.

The S&P Global US Composite PMI recorded 52.7 in December, down from 54.2 in the previous month.

Business activity continued to expand in December, rounding off another quarter of robust growth, but as Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, points out, "the resilience of the US economy is showing signs of cracking."

"New business placed at services providers showed the smallest rise in some 20 months which, accompanied by the first fall in orders placed at manufacturers for a year, points to a broad-based weakening of demand growth.

"Not only has service sector business activity slowed in response to concerns over order books, with the December surveys signaling the weakest economic expansion since last April, but the number of companies cutting headcounts has exceeded those reporting higher employment for the first time since February.

Optimism is fading...

"We also enter 2026 with future output expectations running much lower than seen at the start of 2025, fueling concerns that December’s slowdown and job market malaise could spill over into the new year.

"Confidence has been dampened principally by uncertainty over government policy and the broader economic outlook, with tariffs and affordability featuring as common threads throughout companies’ more cautious views on their prospects.

Affordability worries are underscored by companies reporting an "increased impact of tariffs on both input costs and selling prices in December," suggesting we could see the unwelcome combination of slower economic growth and stubbornly high inflation at the start of the new year.

However, Williamson notes that "there is an expectation among many companies that lower interest rates and government policy will start to boost demand again as the new year proceeds."

 

Tyler Durden Tue, 01/06/2026 - 09:55

Fairfax Financial Takes 22% Stake In Under Armour As UBS Sees "Turnaround Stock"

Struggling apparel brand Under Armour, founded and currently led by Kevin Plank, has seen its market capitalization collapse after years of missteps, brand erosion, and tough global competition. However, a newly disclosed filing shows that a Canadian financial holding company has taken a sizable stake, alongside a recent, more constructive turnaround call from UBS. This suggests the struggle phase may finally be nearing an inflection point.

Fairfax Financial Holdings disclosed a 22.2% ownership stake in UA Class A common stock in a new Schedule 13D filing, stating that the position was acquired for investment purposes and could be adjusted over time.

Fairfax has become the top shareholder. 

The revelation sent UA shares up 5.5% in pre-market trading in New York. Shares have imploded over the years, falling back to roughly 2010 levels, largely because the brand failed to remain relevant.

In September, UBS analyst Jay Sole wrote to clients, "We think sentiment will turn positive in FY27, driving stock outperformance."

Just days ago, Sole told clients, "We view UAA as a turnaround stock."

UAA is back. 

The analyst explained why:

We believe improving sales growth will cause the stock's valuation to increase: We view UAA as a turnaround stock. We believe UAA will achieve a 25% 5-yr. EPS CAGR and this growth will positively surprise the market. Importantly, we expect UAA to deliver considerable innovation and better leverage its brand name, which should help drive 2nd derivative improvement in the company's North America revenue growth rate. Our view is an improving North America sales growth rate will boost the stock’s valuation. Our $8 price target is 61% above the current stock price.

Investors materially undervalue the Under Armour brand name, in our view: Under Armour remains one of the world’s best known and liked athletic wear brands. UBS Evidence Lab's 11th annual global athletic wear survey reinforces our conviction in this view. Survey results indicate Under Armour’s brand name belongs in the same class of brands such as Lululemon, Jordan, Adidas, Puma, On, Hoka, Skechers, and New Balance. The average market cap for these brands which are publicly traded as standalone entities is $19B vs. just $2.1B for UAA. We’re not saying UAA is worth $19B, but rather the valuation differential between UAA and its competitors is far too wide in our view.

Two key survey takeaways:

• UAA's unaided brand awareness, purchase intentions, and attributes are strong. These stats are the main reasons we continue to believe the Under Armour brand name is powerful. Under Armour's unaided awareness is 4th globally for all athletic apparel brands, trailing only Nike, Adidas, and Puma (Fig. 4). With respect to athletic apparel purchase intentions, UAA ranks 4th among the global brands, behind just Nike, Adidas, and Puma (Fig. 12). Also, global consumers continue to associate Under Armour with phrases such as "high quality products" and "good for doing sports" more than they do for most other brands (Figs. 19-20).

• Product innovation will catalyze sales growth acceleration, in our view. Roughly 34% of global survey respondents associated the brand with innovation, but this is down ~500 bps y/y to a 8-yr. low (Fig. 29). This probably explains part of UAA's recent financial trend. However, we believe UAA's innovation will improve significantly (link) and this will drive better consumer perceptions as well as more loyalty (Fig. 39), conversion (Fig. 39), and full price selling (Fig. 45).

ZeroHedge Pro subscribers can read the full note in the usual place, where Sole lays out the detailed thesis supporting an $8 price target.

Tyler Durden Tue, 01/06/2026 - 09:40

Vistra Jumps After Buying 10 Nat Gas-Fired Power Plants For $4 Billion

It didn't take long for markets to get a reminder of the screaming shortage of energy assets needed to energize the AI revolution. 

Late on Monday, electricity supplier Vistra agreed to pay $4 billion for 10 natural gas-fired power plants in the US Northeast and Texas to expand the electricity supplier’s generation capacity in fast-growing energy markets.   

The acquisition, which was funded with $2.3 billion in cash, $900 million in Vistra stock and the assumption of $1.5 billion in debt (partly offset by expected tax benefits) includes assets with a total capacity of 5.5 gigawatts on three major US grids: New England, Texas and PJM, the system that spans New Jersey to Chicago. 

The acquisition includes three combined cycle gas turbine facilities, two combustion turbine facilities located across PJM, four combined cycle gas turbine facilities in ISO New England and one cogeneration facility in ERCOT. The generators were purchased from Cogentrix Energy, which is indirectly owned by funds managed by Quantum Capital Group. 

"The addition of this natural gas portfolio is a great way to start another year of growth for Vistra as we've completed, acquired, or developed projects in each of the competitive power regions where we operate," said Vistra CEO Jim Burke.

This acquisition follows Vistra's $1.9 billion deal in May 2025 for seven gas-fired plants with nearly 2,600 megawatts of combined capacity from Lotus Infrastructure Partners, and will diversify and expand Vistra's geographic footprint by adding 5,500 megawatts of net capacity across some of the major power regions in North America.

The US Energy Information Administration estimates electricity consumption in the country to reach record highs in 2026, driven by surging demand from data centers racing to support Big Tech's growing AI ambitions.

Power providers are increasing their portfolios of power assets, and gas-fired plants in particular, to meet surging demand from electricity-hungry data centers.

The artificial intelligence boom has triggered a dramatic reversal of fortunes for the historically volatile independent power sector by spurring unprecedented demand growth. In response, investors have been bidding up power stocks as if they were tech giants.

Vistra has been on a buying spree since the $6.8 billion acquisition of a nuclear fleet in 2024 and the $1.9 billion purchase of seven gas plants in May. Rivals like NRG Energy and Constellation Energy Group also have been snapping up gas-fueled units in multibillion-dollar deals in recent months.

Gas plants are seen as ideal sources for around-the-clock data center demand. But, as Bloomberg notes, a key challenge is that the cost of building big new gas plants has more than doubled and new turbine orders won’t get delivered until at least 2030.

Vistra said it paid about $730 per kilowatt for the 10 generators owned by Cognetrix, which is slightly less than the $743 paid for seven plants last year. That’s about one-third the average cost for a new gas power plant, according to November 2025 report by BloombergNEF, suggesting that the deal was an absolute steal for Vistra. 

Vistra expects to close its latest purchase this year, pending federal and certain state regulatory approvals. Goldman Sachs & Co served as financial advisor and agreed to provide up to $2 billion in bridge loans. Evercore served as financial adviser to Cogentrix.

Vistra’s shares climbed as much as 6.6% in late trading Monday.

Tyler Durden Tue, 01/06/2026 - 09:25

Colombia & Brazil Bolster Armed Forces At Borders, Bracing For Venezuelan Refugee Influx

After the weekend US military action in Venezuela, which triggered mixed reactions around the globe, Colombia and other nations in the region are preparing for a possible influx of refugees.

Sunday saw Colombian Defense Minister Pedro Sanchez order the deployment of 30,000 troops to the Venezuelan border to strengthen security, and this move coincided with putting emergency measures in place to assist displaced civilians.

Getty Images

There's been a much heavier military presence, for example, at the key Simon Bolivar International Bridge over the Tachira River linking Colombia and Venezuela near the border city of Cucuta. Colombian military armor has been observed there, according to regional reports.

However, these same reports say traffic has moved normally there, despite the extra security measures. Colombia had condemned the Trump-ordered action to capture Venezuela's Maduro, in part worried about a potentially destabilizing effect on the region.

Defense chief Sanchez has confirmed that security forces had been "activated" to deter any retaliatory actions by armed groups such as the National Liberation Army (ELN) and Segunda Marquetalia, both which have operated largely unchecked inside Venezuela for years.

But without doubt Colombia's own armed groups have long exploited the rugged 1,300+-mile long frontier with Venezuela for drug trafficking and as a sanctuary from Colombian military operations.

Brazil too is bracing, after for years regional countries had to deal with millions of Venezuelans leaving their country and spiraling economy. The Wall Street Journal describes, "Roraima, the Brazilian state that serves as the main crossing point into the country, closed its border with Venezuela early Saturday, while Colombian President Gustavo Petro said he had deployed security forces at the country’s border in case of a 'massive influx of refugees.'"

"Some eight million Venezuelans have already fled their country in recent years, equivalent to about a quarter of the country’s population, putting pressure on public services in border regions and sparking xenophobic attacks," the report notes.

There are fears that there could be some kind of new internal fighting erupt in Venezuela, after Maduro's now former Vice President Delcy Rodríguez was sworn in as president. A fresh insurgency, or also counter-revolution, could emerge - but so far Caracas has remained relatively stable, with Trump telling new President Rodríguez to "behave".

But there are already reports that the new leader is reverting to tactics of the old, with several Tuesday headlines stating Venezuela launches wave of repression after US seizure of Nicolás Maduro.

via Wiki Commons

And a further source describes, "As the government continued to churn inside the presidential palace Miraflores, Venezuela’s military counterintelligence officials have been patrolling the streets of Caracas, according to at least two witnesses.

"At least seven journalists and members of the press were detained on Monday morning and early afternoon, most of them at the National Assembly and its surroundings, according to the national press workers syndicate," the report adds, before detailing further: "Heavily armed security forces and pro-government motorcycle gangs known as colectivos were seen roaming the capital, at times stopping drivers and checking their phones. While they aren’t as influential as they were at the height of Maduro’s power, the State Department has said they have been responsible for killings during protests."

Tyler Durden Tue, 01/06/2026 - 08:45

Global Stock Rally Fizzles, Futures Flat As Market Rotations Accelerate

US equity futures are flat with small caps underperforming as geopolitics dominate headlines, including aftershocks from the Maduro seizure and a potential US/EU deal that provides a security guarantee for Ukraine potentially with American soldiers maintaining a presence in Ukraine. As of 8:00am ET, S&P futures are flat as a rotation into regional shares broadened and investors awaited fresh data to gauge the outlook for Federal Reserve interest rates; Nasdaq futures gain 0.2% even as Mag 7 names are weaker premarket ex-NVDA which is leading Semis higher after Jensen Huang's CES presentation. Futures took a brief spill overnight just around 3am ET when China announced it would launch export controls on Japan, which is negative for heavy machinery; futures then promptly recovered. Defensives are leading Cyclicals ex-Energy. Bond yields are higher by 1-2bp with USD also bid. Major European markets are mixed with UK leading and France lagging. Asian stocks are off to their best start since 2012 with the MXAP up 3% YTD. Today's US economic calendar includes December final S&P Global US services and composite PMIs at 9:45am. Scheduled Fed speakers include Barkin (8am) and Miran (8:30am)

In premarket trading Mag 7 names are mixed, with Nvidia gaining 0.6% as CEO Jensen Huang said the company’s much-anticipated Rubin data center processors are in production and customers will soon be able to try out the technology.(Alphabet +0.2%, Microsoft is flat, Amazon -0.08%, Meta +0.9%, Apple -0.3%, Tesla -0.6%).

• Aeva (AEVA) jumps 23% after the company announced that its 4D LiDAR technology has been selected for the Nvidia Drive Hyperion autonomous vehicle reference platform.
• Core Scientific (CORZ) climbs 4% as BTIG upgrades to buy as the dust settles following shareholder rejection in October of its acquisition by CoreWeave.
• Frontier Group (ULCC) falls 3% after BofA cut the recommendation on the airline to underperform, expecting cost challenges in 2026 as aircraft rental fees rise.
• Microchip (MCHP) rises 4% after the analog chipmaker’s net sales forecast for the third quarter beat the average analyst estimate. Analysts note that the strong sales numbers highlight broad-based recovery.
• Oculis (OCS) rises 8% after the drug developer said its experimental therapy, Privosegtor, was granted the FDA’s breakthrough therapy designation for the treatment of optic neuritis — inflammation of the eye nerve.
• OneStream Inc. (OS) soars 22% as buyout firm Hg is in advanced talks to acquire the financial software maker, according to people familiar with the matter.
• Vistra Corp. (VST) climbs 4% after agreeing to pay roughly $4 billion for 10 natural gas-fired power plants in the US Northeast and Texas to expand the electricity supplier’s generation capacity in fast-growing energy markets.
• Zeta Global (ZETA) rises 9% after the software company announced that it has entered a strategic collaboration with OpenAI to power conversational intelligence and agentic applications behind Athena by Zeta, its superintelligent agent built for enterprise marketing.

In other corporate news, AB InBev will reacquire a 49.9% stake in US metal plants from a consortium of investors for $3 billion. Electricity supplier Vistra agreed to pay roughly $4 billion for 10 natural gas-fired power plants in the US Northeast and Texas. Software company Zeta Global announced a strategic collaboration with OpenAI.

The New Year rally appears to be losing steam, despite renewed appetite for the AI trade and cyclicals over defensives. Some of the biggest action is in commodities, with an index of base metals surging to the highest since March 2022 and copper rising above $13,000 a ton for the first time, which needless to say, is and will be inflationary. At the same time, stocks in Asia surged, but as Bloomberg notes, are now getting dangerously overbought, along with markets in Europe and emerging markets. The S&P 500’s 14-day relative strength index also suggests that US stocks might have further room to run, in contrast with other regions that have surpassed levels typically seen as overbought. Macro and geopolitical risks are numerous, with Venezuela, Greenland and Taiwan all in the headlines today. 

Stock investors have so far been largely unfazed by tensions in Venezuela, extending a three-year bull run that’s been fueled by demand for AI–linked shares. The next leg of the rally will depend in part on how quickly the Fed moves to further ease monetary policy, with business activity and jobs market data due this week to help shape rate expectations.

“We are waiting for data,” said Emilie Tetard, a cross-asset strategist at Natixis. “Before this data, as macro uncertainty is probably stronger in the US vs. the rest of the world, it’s a good time to put in place the diversification.”

Meanwhile, US oil producers such as Chevron Corp. and ConocoPhillips extended gains on President Donald Trump’s plans for the reconstruction of Venezuela’s crude industry.

The AI narrative is getting a boost from announcements at CES. AMD unveiled a new chip for corporate data centers, with CEO Lisa Su noting on AI that “we don’t have nearly enough compute for what we could possibly do.” Nvidia CEO Jensen Huang said the company’s highly-anticipated Rubin processors are on track for deployment by customers in the second half. “Demand is really high,” he said. And Intel’s comeback bid is relying on laptops shown at CES that are based on processors with a new design. As Bear Traps report Larry McDonald puts it, "the Pumpmaster is on Stage Again": Nvidia CEO Huang keynote address confirmed that Vera Rubin is now in full production and is expected to propel Nvidia back into the position of undisputed technical leader. Jensen noted that Vera Rubin contains 6 separate, revolutionary chips, and in years past, each one would have been made by a separate company, but Nvidia does them all itself. 

In the geopolitical sphere, Venezuela’s new acting president Delcy Rodríguez is seen as a choice that could stabilize Venezuela’s oil-based economy and facilitate American business. Elsewhere, Trump’s rationale for intervening in Venezuela is fueling concerns among European officials that they could soon face an existential dilemma over Greenland.

Elsewhere, the data may be on the side of bulls. According to Bloomberg, there have been just four years when the S&P 500 fell at least 15% and and still managed to achieve an annual advance of 15% or more. It happened in 1982, 2009, 2020 — and in 2025. The previous cases have all been followed by strong gains during the next year. Still, Wall Street bulls need a lot to go right if 2026 is going to deliver a fourth straight year of double-digit returns. Read more in today’s Taking Stock.

European stocks are mixed regionally, with the broad Stoxx 600 higher by 0.2%; health care leads, tech lags while miners are lifted after copper surged to a fresh record amid a renewed rush to ship the base metal to the US. Consumer products and services shares lag, with Adidas tailing the sector. Here are some of the biggest movers on Tuesday:

• InPost shares rise as much as 20% after the Polish logistics firm announced it had received an indicative proposal regarding a potential acquisition.
• Next shares climb as much as 3.7%, the most since October, after the fashion retailer reported strong Christmas sales and boosted its profit guidance for the fifth time this financial year.
• Tesco shares climb as much as 3.4% after Worldpanel by Numerator said the British grocer had increased sales and market share in the run-up to Christmas, taking its greatest slice of shoppers’ spend in more than a decade.
• Daimler Truck shares rise as much as 5.6%, hitting the highest level in four months, after the release of positive data for a key measure of North American truck orders.
• SMG Swiss Marketplace Group shares surge as much as a record 17%, after it announced an “amicable” agreement with Switzerland’s Price Supervisor regarding investigations into the Ricardo platform and SMG Real Estate business.
• Infineon shares rise as much as 5.1% after US peer Microchip gave an upbeat forecast and Bank of America lifted its price target, partly due to AI server exposure.
• Adidas shares fall as much as 7.6% after Bank of America downgraded the stock to underperform, predicting a “material stepdown” in growth for the sportswear sector. Retailer JD Sports was cut to neutral, and its shares fall 7.2%.
• DSM-Firmenich shares drop as much as 1.3% after Morgan Stanley downgraded the stock to equal-weight, citing lingering uncertainty around the animal, nutrition and health exit structure and tough mid-term strategic targets for the core business.
• Liontrust Asset Management shares sink as much as 7.7%, the most in six months, as Deutsche Bank analysts cut their recommendation on the firm to sell from hold, and slash the target price by a third.

“It reflects a continuation of a theme that we are in the early innings of, which started last year, i.e. that US exceptionalism has peaked and has started to unwind,” Raymond Sagayam, managing partner at Banque Pictet & Cie SA, told Bloomberg TV.

Asian equities rose to a fresh record high, with a rally in Chinese shares helping fuel stronger risk appetite for the region. The MSCI Asia Pacific Index advanced 1.2%, poised for a fourth straight day of gains in what is poised to be its best-ever start to a year. Tech again remained a focus, with TSMC, SK Hynix and Hitachi among the biggest contributors to the benchmark’s advance. Key gauges in mainland China, Hong Kong as well as Japan rose more than 1%. China’s onshore CSI 300 Index climbed to the highest in four years on enthusiasm for the country’s AI industry and growing signs of an economic recovery. Investors hope for an extension of last year’s gains as Beijing backs key sectors and implements measures to curb excessive competition and revive the ailing property market. A subindex of financial shares also helped boost the Asian benchmark, after US peers climbed overnight. Japanese banks jumped after central bank Governor Ueda said he intends to keep raising rates in line with inflation. The rally in Asian stocks at the start of the year underscores their rising appeal for global investors wary of high tech valuations in the US and the prospect of a weakening dollar. It also points to the room left to run in the region’s tech shares, with Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. powering the gains over the past few days.

In FX, German inflation weighed on the euro, lifting the Bloomberg Dollar Index higher by 0.1%. G-10 FX moves are limited.

In rates, treasuries hold small losses in early US session, unwinding a portion of Monday’s gains with oil futures rising further and stock index futures stalled near record highs. European bonds outperform following soft German regional inflation prints. US yields are 1bp-2bp cheaper with curve spreads steeper; 2s10s topped 72bp, approaching 2025 wides; 10-year near 4.17% is about 1bp cheaper on the day, with bunds and gilts in the sector outperforming by about 3bp. German yields are lower by around 2bps across the curve following soft regional inflation metrics. In contrast, US yields are higher with the curve bear-steepening.

In commodities, WTI crude futures are building on yesterday’s gains, up 0.3%. There’s mixed fortunes for precious metals with spot silver higher by 2.2%. Gold faded initial gains and is now up just 0.2% while LME copper hit further all-time-highs, up 1.3%.Bitcoin has slipped throughout the session, trades lower by 0.4%. 

US economic calendar includes December final S&P Global US services and composite PMIs at 9:45am. Scheduled Fed speakers include Barkin (8am) and Miran (8:30am)

Market Snapshot

• S&P 500 mini little changed
• Nasdaq 100 mini +0.2%
• Russell 2000 mini -0.3%
• Stoxx Europe 600 little changed
• DAX little changed, CAC 40 -0.6%
• 10-year Treasury yield +1 basis point at 4.17%
• VIX +0.3 points at 15.15
• Bloomberg Dollar Index little changed at 1203.74
• euro little changed at $1.1715
• WTI crude +0.2% at $58.43/barrel

Top Overnight News

• China imposed controls on exports to Japan that could have military use, intensifying a dispute between Asia’s top economies over remarks Japanese PM Sanae Takaichi made last year on Taiwan. BBG
• Trump asked Marco Rubio to oversee an economic and political overhaul of Venezuela, leading a team that includes officials working on energy, finance and military police, White House adviser Stephen Miller said. BBG
• In late night Truth Social post, Trump announced that Danish territory is now an American “protectorate.” Denmark and the broader NATO alliance are extremely concerned the US could imminently seize Greenland and paralyze the NATO alliance. The Atlantic
• Trump said he believes the U.S. oil industry could get expanded operations in Venezuela "up and running" in fewer than 18 months. "A tremendous amount of money will have to be spent, and the oil companies will spend it, and then they’ll get reimbursed by us or through revenue," he said. NBC
• Nvidia’s Rubin data-center chips are now in production as strong AI demand drives the need for more powerful systems, CEO Jensen Huang said. Rival AMD unveiled a new AI chip for corporate data-center use. BBG
• Nvidia said it has seen strong demand from customers in China for the H200 chip that the Trump administration has said it will consider letting the chipmaker ship to that country. BBG
• The Trump admin is planning to meet with executives from U.S. oil companies later this week to discuss boosting Venezuelan oil production. The meetings are crucial to the administration's hopes of getting top U.S. oil companies back into the South American nation. RTRS
• MCHP +430 bps in premkt after issuing its second upside preannouncement of the quarter, indicating potential recovery in demand for industrial and automotive chips.
• Trump is scheduled to deliver remarks at a GOP member retreat at 10:00am ET on Tuesday and will participate in a policy meeting at 2:30pm ET. 
• Trump posted "Pregnant Women, DON’T USE TYLENOL UNLESS ABSOLUTELY NECESSARY, DON’T GIVE TYLENOL TO YOUR YOUNG CHILD FOR VIRTUALLY ANY REASON, BREAK UP THE MMR SHOT INTO THREE TOTALLY SEPARATE SHOTS". Full post "Pregnant Women, DON’T USE TYLENOL UNLESS ABSOLUTELY NECESSARY, DON’T GIVE TYLENOL TO YOUR YOUNG CHILD FOR VIRTUALLY ANY REASON, BREAK UP THE MMR SHOT INTO THREE TOTALLY SEPARATE SHOTS (NOT MIXED!), TAKE CHICKEN P SHOT SEPARATELY, TAKE HEPATITAS B SHOT AT 12 YEARS OLD, OR OLDER, AND, IMPORTANTLY, TAKE VACCINE IN 5 SEPARATE MEDICAL VISITS! President DJT".

Trade/Tariffs

• China Commerce Ministry imposes export controls on dual-use items to Japan, effective immediately

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher following the positive handover from Wall Street, where all major indices gained amid outperformance in energy and a softer yield environment. ASX 200 was the laggard with the index dragged lower by weakness in defensives and the top weighted financial sector, while metal and mining stocks were boosted after the recent climb in underlying commodity prices and reports of an AUD 8.8bln takeover offer for BlueScope Steel. Nikkei 225 rallied at the open to back above the 52,000 level with the advances led by mining and tech-related stocks. Hang Seng and Shanghai Comp conformed to the predominantly upbeat mood, with outperformance in Hong Kong helped by strength in some property names and miners, while aluminium producer China Hongqiao Group led the advances as aluminium prices printed fresh three-year highs.

Top Asian News

• Japan sold JPY 1.96tln 10yr JGB, b/c 3.30x (prev. 3.59x), average yield 2.095% (prev. 1.872%). Lowest accepted price 99.99 vs prev. 98.53. Average accepted price 100.04 vs prev. 98.57. Tail in price 0.05 vs prev. 0.04.
• Japan's nuclear regulator said no irregularities at Chugoku Electric's (9504 JT) Shimane nuclear power plant following the earthquake.
• Earthquake with a preliminary magnitude of 6.3 strikes at the Shimane Prefecture in Japan, according to NIED

European bourses (STOXX 600 U/C) opened with very modest gains, but have indices have since slipped a touch off best levels to show a bit more of a mixed picture in Europe. European sectors are mixed, with Health Care, Energy, and Basic Resource leading. Energy is advancing on higher crude prices, despite the absence of a clear catalyst. On a stock-specific basis, the sector is also being supported by gains in heavyweight names such as Shell (+1.6%) and BP (+1.9%). Meanwhile, sentiment in Basic Resources has been underpinned by strength in metal prices.

Top European News

• 'Coalition of the Willing' to discuss security guarantees for Ukraine

FX

• DXY resides in a narrow 98.161-98.425 range after recovering from worst levels on the back of some EUR softness (more below), although price action across FX thus far has been muted vs other markets (Equities, Fixed Income, Commodities). The US docket for today only consists of S&P Services and Composite Final PMIs alongside commentary from Fed's Barkin and Miran. Perhaps more importantly, US President Trump is due to give remarks later today.
• EUR is on a softer footing, with early weakness commencing shortly after the revisions lower to the French PMIs, whilst downward revisions in German Composite and EZ PMIs further weighed on the single currency. Moreover, German State CPIs were more dovish than the Nationwide figure (at 13:00 GMT) implies. EUR/USD resides towards the bottom end of a 1.1708-1.1743.
• GBP/USD trades flat towards the bottom of a 1.3528-1.3568 range with little immediate move seen on the slight revision higher in UK Services and Composite PMIs, with EUR/GBP flat intraday in a narrow 0.8644-0.8660. USD/JPY is also flat in a 156.17-156.80 range and largely trading at the whim of the USD.
• Antipodeans also see little price action but AUD continues to be supported by the recent rally in copper and gold.

Fixed Income

• Benchmarks began the morning on the backfoot, with downside of around five and 20 ticks for USTs and Bunds respectively. Action that came as the benchmarks trimmed into and through the APAC session, with further pressure emanating from weak demand at the Japanese 10yr tap; an auction that sent JGBs lower from 132.23 to a 131.93 session trough, trimming initial gains of around 15 ticks to losses of 16 at worst.
• Since, the complex generally benefited incrementally from a dip in the risk tone as China imposed export-controls on dual-use items to Japan.
• For EGBs, no real move to the French Prelim. HICP metrics, which came in as expected M/M and slightly cooler than expected Y/Y at 0.7% (prev. 0.8%). More pertinently, the German State CPIs ahead of the 13:00GMT nationwide figure, where consensus is for the headline Y/Y to moderate to 2.0% (prev. 2.3%) and the HICP Y/Y to 2.2% (prev. 2.6%); for the respective M/M, at 0.3% (prev. -0.2%) and 0.4% (prev. -0.5%). State CPIs lifted Bunds to a 127.67 high, firmer by 27 ticks at most. A move perhaps driven by the M/M for North Rhine-Westphalia coming in at 0.0% (prev. -0.3%), cooler than the nationwide expectations, as above, for a lift to 0.2% (prev. -0.2%).
• Ahead, USTs look to remarks from Fed's 2027 voter Barkin, text and Q&A expected, before the region's own Final PMIs.
• Germany sells EUR 4.4547bln vs exp. EUR 6bln 2.00% 2027 Schatz: b/c 1.93x (prev. 1.7x), average yield 2.11% (prev. 2.05%), retention 24.22% (prev. 20.82%).

Commodities

• Crude benchmarks started the APAC session on the backfoot, paring back some of Monday's gains before extending higher as the European session gets underway, despite a lack of crude-specific drivers.
• WTI and Brent pulled back to a low of USD 57.85/bbl and USD 61.31/bbl respectively after peaking at USD 58.51/bbl and USD 61.89/bbl in Monday's session. Benchmarks then bid higher pretty aggressively despite a clear explanation for the move, reaching a session high of USD 58.67/bbl and USD 62.14/bbl before pulling back slightly.
• Spot XAU trades choppy but managing to hold onto modest gains as the yellow metal sits above USD 4450/oz. After dipping to a trough of USD 4428/oz early in the APAC session, XAU extended on Monday's gains to peak at USD 4476/oz as European traders entered the market. Thus far, the yellow metal is trading in a tight USD 26/oz band above USD 4450/oz.
• 3M LME Copper continued its bid to new ATHs throughout the Asia-Pac session, following the risk-on tone in Asian equities. The red metal opened at USD 13.1k/t and immediately bid higher, peaking at USD 13.39k/t as the European session gets underway. As equities started to pull back, led by Nikkei 225 futures, following the imposition of export controls on dual-use items to Japan by China, 3M LME Copper has started to fall lower and is currently trading at USD 13.24k/t.
• China skips retail gasoline and diesel price adjustment.
• Goldman Sachs said Chinese steel mills face an extended period of depressed margins as efforts to cut capacity in the sector goes slower than expected, while exports remain high.
• ANZ said Venezuela oil output increase is unlikely until the end of the decade as aging infrastructure will require billions of dollars in spending, according to Bloomberg.
• Morgan Stanley expects another period of softness for crude ahead, Brent to fall into the mid-high USD 50/bbl region for the majority of 2026. Expect the market to be in a "significant" surplus before then returning to balance in H2-2027.

Geopolitics

• "Syria: Israeli forces infiltrate the southern countryside of Quneitra", according to Al Arabiya.
• Israeli Air Force struck multiple sites in Lebanon on Monday and early Tuesday, ahead of a key disarmament meeting, according to POLITICO.
• North Korea accuses Japan of reinvasion plotting over record-high defence budget, according to Yonhap.
• Shooting reported near presidential palace in Caracas, although Venezuelan government said situation is under control.
• US House Speaker Johnson said not expecting US troops on the ground in Venezuela, according to Bloomberg's Erik Wasson.
• Witnesses reportedly heard loud blasts near the Presidential Palace in Caracas, Venezuela, according to Bloomberg's Erik Wasson.
• Al Jazeera notes report of Israeli raid on vicinity of southern Lebanese town of Al-Ghaziyah.
• US President Trump has a list of demands for Venezuela's new leader including stopping oil sales to US rivals, according to POLITICO. "U.S. officials have told Delcy Rodriguez that they want to see at least three moves from her: cracking down on drug flows; kicking out Iranian, Cuban and other operatives of countries or networks hostile to Washington; and stopping the sale of oil to U.S. adversaries".
• US President Trump said Venezuela has to be fixed before elections and that acting President Rodriguez has been cooperating with the US, while Trump's advisor Miller said Venezuela is cooperating with the US and needs US permission to do any commerce. said:. US may subsidise an effort by oil companies to rebuild the country's energy infrastructure. Would not need lawmakers to act in order for him to send US troops back into Venezuela.
• CIA reportedly concluded that Venezuela's Maduro regime loyalists were best placed to lead Venezuela after Maduro, according to WSJ.

US Event Calendar

• 8:00 am: Fed’s Barkin Speaks on Economic Outlook
• 8:30 am: Fed’s Miran Speaks on Fox Business
• 9:45 am: Dec F S&P Global U.S. Services PMI, est. 52.9, prior 52.9
• 9:45 am: Dec F S&P Global U.S. Composite PMI, prior 53

DB's Jim Reid concludes the overnight wrap

Happy NY to you from me for my first EMR of the year after 10 days in the Alps where my back stopped me from skiing, but the family just about managed to find enough snow to do so. Just 29 years after its release I watched Titanic for the first time during the trip, and Shaun the Sheep. Shaun the Sheep is very funny, Titanic less so.

From nautical disasters to economic ones, yesterday I published a short chart pack (link here) which documents the remarkable long-term decline of the Venezuelan economy, with a particular focus on the sharp deterioration since the early 2010s. In terms of other pieces, our new Head of Geopolitcal Research Helen Belopolsky in my team published a

quick note here on what the story tells us about Trump 2.0 in 2026 and our LatAm economist Francisco Campos published a blog here on the implications for the region.
So, in a fascinating start to the year, developments in Venezuela continued to dominate the headlines yesterday, as investors were finally able to react to the removal of President Nicolás Maduro. But for global markets, the striking thing was how most assets were almost completely unfazed by the geopolitical risk. The S&P 500 (+0.64%) closed -0.43% beneath its record high, and Europe’s STOXX 600 (+0.94%) hit a fresh record. And despite an uptick in oil prices (reversing the small dip at the Asian open yesterday), there was even a bond rally on both sides of the Atlantic too, as a weak ISM manufacturing print pushed yields lower for 10yr Treasuries (-3.0bps) and bunds (-3.0bps). 

In terms of the latest, Maduro appeared in a New York court yesterday, pleading not guilty to drug trafficking and other charges and claiming “I am still president”. Meanwhile, in Venezuela Delcy Rodríguez was sworn in as interim president, calling for peace in the country. Overall, this left a sense that a smooth transition was playing out for now, though there were reports of some explosions in Caracas last night. 

Whilst global markets saw little reaction to the Venezuela developments, a few specific assets did see some outsized moves. Most obviously, there was a clear reaction among Venezuela’s bonds, with those maturing in 2027 surging by +29.28% on the day, moving up to 42.5 cents on the dollar. Another beneficiary were US oil stocks, and energy companies in the S&P 500 were up +2.67% yesterday. That included Chevron (the only major US oil company still operating in Venezuela), which posted a +5.10% increase, alongside big jumps for oil services majors SLB (+8.96%) and Halliburton (+7.84%). Last night, Trump suggested the administration might subsidise investment to rebuild Venezuela’s oil production and, according to Bloomberg, Energy Secretary Chris Wright plans to meet with oil executives this week. Meanwhile, precious metals also saw the usual uptick we normally get in times of geopolitical stress, with gold (+2.70%) and silver (+5.18%) prices experiencing strong gains as well. Silver continuing its stunning gains from recent weeks.  

Against this backdrop, oil prices had a topsy-turvy session, swinging between gains and losses through the day. Initially when markets opened, there had been optimism that Maduro’s removal would open the way for higher oil production, particularly if US companies went in to repair the infrastructure as Trump had indicated. So that meant Brent crude initially fell beneath $60/bbl, down -1.65% from its closing level on Friday. But as the session went on, those initial hopes were tempered by the realisation that it would be difficult to rebuild that infrastructure quickly, and without significant cost. In the near-term there may even be disruption to the current Venezuelan supply, forcing normal buyers to quickly purchase elsewhere. So oil prices clawed back those losses to close up +1.66% at $61.76/bbl. In Asia it's down around -0.3%. 

In the meantime, there’s also been renewed focus on Greenland, given Trump’s weekend comments that “We need Greenland from the standpoint of national security”. That led to a response from Danish PM Mette Frederiksen yesterday, who said she took Trump’s threats seriously, and that “if the US chooses to attack another NATO country militarily, then everything stops, including NATO”. 

Whilst there were plenty of geopolitical developments, global equity and bond markets took those in their stride yesterday, with a cross-asset advance on both sides of the Atlantic. In part, that was down to a softer-than-expected ISM manufacturing print in the US, which raised hopes that the Fed would keep cutting rates this year. The headline measure for that fell to a 14-month low of 47.9 in December, and both the new orders (47.7) and employment (44.9) components were also clearly in contractionary territory. Prices paid (58.5) were within a couple of tenths of expectations. Fed funds futures were pricing in 60bps of cuts by the December 2026 meeting at the close, up +2.2bps compared with Friday. And in turn, US Treasuries rallied across the curve, with the 2yr yield (-2.2bps) down to 3.45%, whilst the 10yr yield (-3.0bps) fell to 4.16%. Overnight, they are back up +1.2bps and +2.0bps respectively. 

The prospect of faster rate cuts and the absence of a negative shock from the Venezuela developments meant it was also a good day for equities. Indeed, the S&P 500 (+0.64%) moved back within half a percent of its record high on Christmas Eve. The Dow Jones (+1.23%) reached a new record high of its own, with the small cap Russell 2000 (+1.58%) also surging as cyclical stocks outperformed. And the Mag-7 (+0.88%) rebounded after a run of 5 consecutive losses. Meanwhile in Europe, there were a whole bunch of records, with the STOXX 600 (+0.94%) and the DAX (+1.34%) both closing at record highs, whilst Italy’s FTSE MIB (+1.04%) closed at its highest level since 2000.

Otherwise in Europe, Bloomberg reported yesterday that Italy planned to support the EU free-trade agreement with Mercosur. The article said that they’d back the deal when ambassadors vote on January 9, enabling the EU to sign on January 12. Meanwhile, sovereign bonds also rallied across the continent, with 10yr bund yields (-3.0bps) coming down to 2.87%, moving off their two-year high on Friday.

In Asia, equity markets are on course for their best start to a year since 2012. As I check my screens, the Hang Seng (+1.64%), Shanghai Comp (+1.19%), Nikkei (+1.09%) and the KOSPI (+0.93%) are all leading the way.  Japan's Topix is surging +1.46% to reach a record high, bolstered by widespread gains in technology, industrial, and export-oriented sectors. S&P 500 (+0.13%) and NASDAQ 100 (+0.24%) futures are both inching higher along with European futures.  

10-year JGBs are +1.4bps at 2.123%, marking its highest point since 1999, after an auction that went ok. The bid-to-cover ratio was recorded at 3.30, in contrast to 3.59 from the last auction and a 12-month average of 3.24. 30-year JGB yields are up +3.9bps.  

Looking at the day ahead now, the main data releases will be the German and French CPI prints for December, along with the final services and composite PMIs for December from the US and Europe. Otherwise, central bank speakers include the ECB’s Villeroy and Cipollone, along with the Fed’s Barkin.

Tyler Durden Tue, 01/06/2026 - 08:36

The ICE Home Price Index (HPI) is a repeat sales index. ICE reports the median price change of the repeat sales.

From ICE (Intercontinental Exchange):

Annual home price growth ended 2025 at just +0.7% — the smallest calendar-year increase since 2011, when prices fell by 2.9%.

With income growth outpacing home price gains and 30-year mortgage rates starting 2026 at 6.15%, housing affordability is at its best level in nearly four years.

At current prices and rates, purchasing an average-priced home with 20% down and a 30-year loan requires a monthly payment of $2,093 — 27.8% of median household income. That’s down from $2,256 (31.1%) at the start of 2025.

According to Andy Walden, Head of Mortgage and Housing Market Research for Intercontinental Exchange:

“Improved affordability and income growth have provided a much-needed boost to housing market dynamics, even as regional trends and property types show significant variation. The Northeast and Midwest have emerged as clear leaders, while condos continue to face headwinds in most markets.”

Drilling down into regional and property type specifics:

• Regional Standouts: New Haven, CT led all markets with an impressive 8.6% price growth, followed by Syracuse, NY (+6.8%) and Hartford, CT (+6.25%). Notably, 24 of the 25 fastest-appreciating markets were in the Northeast and Midwest.

• Price Declines: On the flip side, 35 of the 100 largest U.S. markets saw home prices decline in 2025 — up from just 10 in 2024 and marking the largest share of declines since 2011.

• Property Type Trends: Single-family homes outperformed condos, with prices rising 1.0% compared to a 1.7% decline for condos. Condos underperformed in 90% of markets nationwide.

As ICE mentioned, "regional trends ... show significant variation".  The Northeast and Midwest are saw solid house price gains in 2025, whereas cities in the South and West have been leading the way in inventory increases and price declines (especially Florida and Texas).

EU's Carbon Border Tax Goes Live And Trade Partners Are Not Amused

Authored by Irina Slav via OilPrice.com,

• The EU’s carbon border adjustment mechanism launched on January 1 aims to level the playing field for European steel, cement, and power producers by taxing the carbon content of imports from countries with weaker emissions rules.

• China has threatened retaliation, calling CBAM unfair and discriminatory.

• While CBAM may protect EU industry, it risks higher prices for consumers and escalating trade disputes with major exporters

On Thursday, January 1st, the EU carbon border adjustment mechanism entered into effect with the goal of improving the competitiveness of European goods manufacturers against non-EU companies operating in laxer emissions reduction frameworks.

China was the first to threaten retaliation.

It won’t be the last.

The carbon border adjustment mechanism, or CBAM for short, was devised to remedy the unintended effects of the world’s most stringent emission-reduction standards for the industrial sphere, namely, sky-high costs that make the end product uncompetitive. This became especially painful for European makers of things such as steel and cement, where the biggest competitor is China—which does not have anything resembling the emission reduction requirements of the EU, so its steel and cement are very cheap, and buyers prefer them.

In other words, in order to boost the competitiveness of European steel and cement manufacturers—and electricity generators, too—the European Union made sure that cheaper imported steel, cement, and electricity are not that cheap anymore. China and India are unhappy about—and there are things they can do that will not help the competitiveness of European businesses.

As soon as the CBAM entered into effect, China’s Ministry of Commerce issued a statement, in which it called the legislation “unfair” and “discriminatory”, Bloomberg reported.

“We will resolutely take all necessary measures to respond to any unfair trade restrictions,” the ministry said in its statement.

“CBAM is quite unpopular among major exporters to the EU, but it has already proven to be quite effective in pushing reticent countries towards building or expanding carbon pricing efforts,” one consultant specializing in carbon permit markets, told the Financial Times.

“So it’s a major policy shift for the EU to protect its own industry, while at the same time leveraging the carbon pricing idea to third countries.”

China, in fact, has its own carbon market, has had it since 2021, and it is the biggest carbon market in terms of the volumes of carbon emissions covered by it. With China, it’s not about selling the idea of carbon markets to third countries; it is about competitiveness. And China is not pleased that its competitiveness will be compromised.

In simple terms, the carbon border adjustment mechanism puts a price on the carbon dioxide emissions generated during the production of a good such as cement or steel. The price is based on calculations of the emissions from the respective industries in countries that export to the European Union. The mechanism puts a so-called default emission value for the production of a certain good, and also emission benchmarks, to be used in tandem in a way that is as of yet unclear, but some say it is, in fact, benefiting China.

Politico reported the concerns at the end of last year, citing industrial executives as saying the default values for emissions for certain countries that export to the EU were set too low to be real, including some steel production in China that, according to these estimates, turned out to be lower-emission than steel production in the EU.

“Inconsistencies in the figures of default values and benchmarks would dilute the incentive for cleaner production processes and allow high-emission imports to enter the EU market with insufficient carbon costs,” an industry representative told Politico.

“This could result in a CBAM that is not only significantly less effective but most likely counterproductive.”

Meanwhile, Indian steel imports are about to dry up because Indian steel producers appear not to have been included in the “inconsistencies”. India is the world’s second-largest steel producer after China and exports as much as 66% of its output to the European Union.

This is about to drop sharply next year because India’s steel manufacturing is done in blast furnaces fueled with coal, which is incompatible with the European Union’s emission reduction plans. The Reuters report notes steel mills could switch to electric arc furnaces, which have a lower emissions footprint, but such a switch would take time and money.

“Most of the companies are yet figuring out a way to deal with CBAM,” one analyst told Reuters. “In the near term, it is expected to slow down India's exports to EU,” Ravi Sodah, from Elara Capital, also said.

So, two of the world’s largest exporters of industrial goods, and major suppliers to the European Union specifically, are planning to respond to the CBAM by, at least in one case, curbing exports.

This would sure clear up the market for European producers, but it will not be welcome news to consumers of those goods, who would be footing the bill for what is essentially market intervention on the part of the European Union, and a protectionist market intervention, at that.

The United States is not going to be happy about it, either, and it will soon make its unhappiness known.

Tyler Durden Tue, 01/06/2026 - 08:05

Trump DOJ Admits Venezuela's 'Cartel De Los Soles' Isn't An Actual Organization

A major plank in the Trump administration's case for military intervention in Venezuela is looking thinner today, as the Department of Justice has retreated from the notion that captured President Nicolas Maduro was the head of an organized drug cartel called Cartel de los Soles. The DOJ now says the term "Cartel de los Soles" is merely descriptive of a "culture of corruption" fueled by the illegal drug trade.

This isn't semantics: Both the Treasury and State Departments had officially designated the non-existent group as a terrorist organization. The latest development seems to at least partially confirm doubts raised by outside observers and lend credence to denials by the Venezuelan government. In November, the country's foreign minister said he "absolutely rejects the new and ridiculous fabrication" by which Secretary of State Marco Rubio had "designated the non-existent Cartel de los Soles as a terrorist organization."

Secretary of State Marco Rubio designated the non-existent "Cartel de los Soles" a terror organization in the run-up to intervention in Venezuela (pool photo)

The retreat from the idea that Cartel de los Soles is an actual organization was apparent in the DOJ's filing of a superseding (updated) indictment. The previous indictment referred to the supposed cartel 32 times, naming Maduro as its chief. The new one only mentions the term twice, and says it's only descriptive of a "patronage system" and a "culture of corruption" propelled by drug money. That's consistent with the fact that the DEA's annual National Drug Threat Assessment has never mentioned any "Cartel de los Soles" in its cataloguing of major traffickers.  

In July, the Treasury sanctioned Cartel de los Soles as a "Specially Designated Global Terrorist," claiming it was a "criminal group headed by...Maduro." The "cartel" was accused of providing material support to two groups already on U.S. terrorist lists: Mexico’s Sinaloa cartel and Venezuela’s Tren de Aragua. Of course, those terrorist designations are themselves controversial, with critics saying the government is purposefully conflating criminality and terrorism. The latter term has long been understood to describe violence directed at civilians with the goal of achieving a political or ideological goal. Historically, exaggerated use of the term has largely been confined to the left.   

The DEA's annual National Drug Threat Assessment catalogues major drug cartels, but has never mentioned a "Cartel de los Soles" 

Elizabeth Dickinson, deputy director for Latin America at the International Crisis Group, said the new indictment properly uses "Cartel de los Soles" -- essentially a slang term. "But the [terrorist] designations are still far from reality. Designations don’t have to be proved in court, and that’s the difference. Clearly, they knew they could not prove it in court,” she told the New York Times. Despite the DOJ's retreat, Rubio was still using the same rhetoric on Sunday, referring to "Cartel do los Soles" as a "criminal organization," with Maduro the "leader of that cartel." 

There was something important missing altogether from the superseding indictment: While cocaine is mentioned 67 times, there isn't a single reference to fentanyl, a drug the administration and allied Venezuela hawks repeatedly referenced in justifying the demolition of alleged Venezuelan drug-boats, and the broader drive for regime change. All along, critics pointed out that Venezuela has never been a meaningful producer or conduit of fentanyl, which is something even the DEA will tell you. 

After the raid on Venezuela, Vice President JD Vance attempted to counter ridicule of the administration's claimed drug-related motives  -- much of which is coming from the growing, non-interventionist segment of the American right. "Cocaine, which is the main drug trafficked out of Venezuela, is a profit center for all of the Latin America cartels. If you cut out the money from cocaine (or even reduce it) you substantially weaken the cartels overall. Also, cocaine is bad too!" 

Then-Secretary of State Colin Powell makes a case to the UN that Saddam Hussein was developing weapons of mass destruction (Reuters)

Comparing Trump's rhetoric to that of George W. Bush in the run-up to the Iraq invasion, Maduro last year accused the administration of crafting "a bizarre narrative," since it couldn't accuse Venezuela of hiding weapons of mass destruction. In December, Maduro's comparison grew more apt when Trump creatively declared illicit fentanyl and its core precursor chemicals to be "weapons of mass destruction."  While many MAGA conservatives who repudiate the Iraq war and other neocon interventions have been cheering on Trump's Venezuela raid, some may be starting to find the parallels are stronger than they're comfortable with.

Tyler Durden Tue, 01/06/2026 - 06:55

My morning train WFH reads:

• Behind every influencer is an army of the influenced, many adrift in debt and mass-produced clutter. The platforms need influencers and influencers need audiences — but what the influenced need is not so simple. (The Verge)

• Was Venezuela an Inside Job? All the questions and conspiracy theories you have about America’s hottest new invasion. (The Bulwark) see also Months in planning, over in two and a half hours: how the US snatched Maduro: The operation to capture the Venezuelan president and his wife involved at least 150 aircraft, months of surveillance – and reportedly a spy in the government. (The Guardian)

• New Car Sales Are Rising Thanks to Purchases by the Well-Off: A larger proportion of new cars are being bought by affluent Americans as prices and interest rates for auto loans climb, analysts said. Families with a household income of $150,000 a year or more now buy 43 percent of the new cars sold in the country, up from one-third of all cars sold in 2019 before the Covid-19 pandemic. (New York Times)

• Why the ‘starter home’ feels so out of reach in today’s housing market: Concepts about starter homes seem inconsistent with today’s prices and expansive floor plans, leaving many first-time homebuyers with few options. (Washington Post)

• Everything Elon Musk promised in 2025, but didn’t deliver: Musk is now infamous for his false promises, but even this is excessive.
(Mashable)

• One Generic Cancer Drug Costs $35. Or $134. Or $13,000. Hundreds of hospitals across the US are marking up old cancer treatments — in some cases hundreds of times what Medicare pays. (Bloomberg)

• Supreme Court Increasingly Favors the Rich, Economists Say: A new study found that the court’s Republican appointees voted for the wealthier side in cases 70 percent of the time in 2022, up from 45 percent in 1953. (New York Times) see also Ruling for the Rich: the Supreme Court over Time (NBER)

• The Genius Whose Simple Invention Saved Us From Shame at the Gas Station: On a rainy day in Detroit, a Ford engineer got confused, then soaked—and inspired. It took decades before he got any credit. (Wall Street Journal)

• After Watergate, the Presidency Was Tamed. Trump Is Unleashing It. In the 1970s, Congress passed a raft of laws to hold the White House accountable. President Trump has decided they don’t apply to him. (New York Times)

• Finnish children learn media literacy at 3 years old. It’s protection against Russian propaganda. The battle against fake news in Finland starts in preschool classrooms. (AP News)

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.

 

Dollar’s steepest annual drop for almost a decade

Source: Financial Times

 

Sign up for our reads-only mailing list here.

 

The post 10 Tuesday AM Reads appeared first on The Big Picture.

Major Data Breaches Put Hundreds Of Thousands Of New Zealanders At Risk

Authored by Rex Widerstrom via The Epoch Times (emphasis ours),

Hundreds of thousands of New Zealanders could have their personal information exposed online after hackers breached two major websites and stole large amounts of data.

In this photo illustration, hacker types on a computer keyboard on May 13, 2025. Oleksii Pydsosonnii/The Epoch Times

In the first case, a group calling itself Kazu announced it had obtained records from the Manage My Health (MMH) website, an online portal that connects patients with doctors and healthcare providers and allows them to access health information, book appointments, and order repeat prescriptions.

The website collects and manages sensitive information about patients.

Some released samples by the hacker reportedly included information about patients’ conditions, medical test results, clinical notes, vaccination records, medical photographs and personal identification details.

Initially, the hackers demanded a $60,000 ransom to stop them from releasing the more than 400,000 files online by Jan. 15, 2026.

However, on Jan. 4, the group said on its Telegram channel that it had brought forward the payment deadline to Jan. 6, citing MMH’s quick response to the hack and an alleged lack of concern for patients’ data.

“Their ignorance of our emails and messages, along with their failure to acknowledge users or explain exactly what happened, is the main issue,” the group Kazu wrote on Telegram.

“Many MMH users have been asking the company for an explanation, but they’ve either ignored them or responded with vague statements.

“That’s why we decided to reduce the deadline and put pressure on the company.”

Hacker Group Wants A ‘Minimum’ Ransom

At the same time, Kazu explained that the group decided to settle for a “minimum” ransom of $60,000 instead of the initial amount of $300,000 “to protect the data and quickly close the deal.”

Kazu also threatened to leak the files if the ransom was not paid in the next 48 hours.

The most recent threat to release the confidential health data of hundreds of thousands of New Zealanders from the ransomware group Kazu's Telegram channel. Screenshot/The Epoch Times. MMH’s Response

In an update on Jan. 3, MHH announced that the company had fixed the security gap and strengthened data protection.

“We’ve identified and closed the specific gaps that allowed unauthorised access. This fix has been independently tested and verified by external cybersecurity experts,” it said.

“We’ve added extra checks when people log in and limited how many times someone can try to access the system in a short time.

“All health documents have been re-secured and their storage has been strengthened.”

The company also noted that the website’s system environment was now secure and operated as intended.

MHH expected 6-7 percent of its estimated 1.8 million users were affected by the incident amid an ongoing investigation.

“We expect to start notifying those affected following confirmation of forensics and liaison with PHOs and GPs to ensure that individuals are getting the right information, in line with Privacy Act requirements, and are properly supported,” it said.

“The forensic team is continuing work to confirm our analysis of the specific documents involved. Completion of this step will enable us to proceed with more targeted communications to affected parties and we will start informing people directly from early next week.”

Meanwhile, New Zealand Health Minister Simeon Brown said his ministry was reviewing the breach.

“I know this breach will be very concerning to the many New Zealanders who use Manage My Health, and we need assurances around the protection and security of people’s health data,” Brown said in a statement.

“Patient data is incredibly personal, and whether it is held by a public agency or a private company, it must be protected to the highest of standards.”

The minister also noted that the review would be conducted no later than Jan. 30, with a focus on an “immediate response to the incident.”

Neighbourly Data Breach

In an unrelated but similar incident, the personal details of users of a large “community noticeboard” type website called Neighbourly have also been offered for sale on the dark web.

People use the site to make announcements, contact other members, and buy and sell items.

The site is run by media company Stuff, which runs several newspapers and a news website, and provides a daily news bulletin for one of the country’s TV networks.

According to The Daily Dark Web, a website that monitors activity on the dark web, about 150GB of data was stolen from Neighbourly by an unnamed threat actor, including full names and physical addresses, email addresses, phone numbers, GPS coordinates, user biographies, and private messages.

Neighbourly was shut down on New Year’s Day and restored recently, with the site confirming the breach on Jan. 3.

In a message to its users, Neighbourly operating team apologised for the incident and informed them that the data breach had been contained.

“Following best practice, we will look to seek a court injunction against any use of the material,” the team said.

“We want to apologise to our members for this occurrence and any concerns it may have caused you over the past few days.

“We will work closely with all our staff to ensure we have the most robust processes in place to prevent it from happening again.”

Tyler Durden Tue, 01/06/2026 - 06:30

Visualizing The Decline Of Global Wine Production (And Consumption)

Wine production and consumption have entered a sustained decline over the last decade.

This chart, via Visual Capitalist's Niccolo Conte, tracks how global wine output, consumption, and trade have evolved since 2015.

The data for this visualization comes from the International Organisation of Vine and Wine (OIV). It tracks production, consumption, and imports from 2015 through 2024, measured in billions of liters.

Wine Production Hits a Decade Low

Global wine production peaked intermittently during the late 2010s, reaching nearly 30 billion liters in 2018.

Since then, output has steadily fallen, dropping to just 22.6 billion liters in 2024. That represents an almost 19% decline over the nine-year period.

Extreme weather events, including droughts, heatwaves, and late frosts, have disrupted harvests in major wine-producing regions. At the same time, rising costs and tighter environmental regulations are adding pressure to growers worldwide.

Consumption Declines More Gradually

While production has fallen sharply, global wine consumption has declined at a slower pace. Total consumption dropped from about 24.1 billion liters in 2015 to 21.4 billion liters in 2024, a decline of roughly 11%.

Health-conscious lifestyles, aging populations in traditional wine markets, and younger consumers drinking less alcohol overall are contributing factors.

Global Trade Shows Signs of Softening

Wine imports have also edged lower, falling about 6.5% over the same period.

After peaking above 11 billion liters in the early 2020s, global wine trade slipped below 10 billion liters by 2023 and 2024.

If you enjoyed today’s post, check out Ranked: Which Country Consumes the Most Coffee? on Voronoi, the new app from Visual Capitalist.

Tyler Durden Tue, 01/06/2026 - 05:45

Electric Cars Make Up Nearly 96% Of New Car Sales In Norway

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

In 2025, electric cars accounted for 95.9 percent of all new cars sold in Norway, the Norwegian Road Traffic Information Council (OFV) said in a statement on Jan. 2.

The Tesla logo on the hood of a car in Oslo, Norway, on Nov. 10, 2022. Victoria Klesty/Reuters

“This means that the goal set by politicians 10 years ago has been achieved: New car sales in Norway are now emission-free,” it said. A total of 179,550 new passenger cars were registered last year, breaking the previous annual record set in 2021.

“2025 was also the year when the number of electric cars surpassed the number of diesel cars and became the largest powertrain in the total passenger car population,” the statement said.

For December 2025 specifically, 35,188 new passenger cars were registered in the country, with electric cars accounting for 97.6 percent of these vehicles, a sign of how EVs “now dominate new car sales” in the country, OFV said.

Norway, with a population of around 5.53 million, is a high-income country, according to Harvard data. With a GDP per capita of $87,702, the nation is the third-richest ⁩per capita among 145 countries. Norway’s oil wealth helps sustain its welfare system.

Tesla consolidated its position as “Norway’s largest car brand” last year, with a record 34,285 new passenger cars registered—a 19.1 percent market share, roughly one in five new cars.

Tesla’s Model Y set an annual record last year, hitting 27,621 first-time registrations, which is the “highest number ever registered for a single car model in Norway in one year,” according to OFV.

Chinese companies also saw their share in Norway’s EV market rise last year. A total of 24,524 new passenger cars registered last year were of Chinese origin. This accounted for 13.7 percent of new car sales, up from 10.4 percent the previous year, according to the council. The biggest Chinese car brand was BYD.

“2025 has been a very special car year. We see the effect of long-term and targeted electric car policy, and how specific tax decisions have immediate effects on the market,” OFV Director Geir Inge Stokke said.

“The final sprint towards the end of the year has been historically strong, and there is no doubt that the VAT change from January 1, 2026, has contributed to a great many choosing to secure a new electric car before the year was over.”

As for the European Union overall, electric cars accounted for 16.9 percent of the EU new car registrations for the January–November 2025 period, according to a Dec. 23, 2025, statement from the European Automobile Manufacturers’ Association.

The biggest markets for new EV registrations in the EU were Germany, Belgium, the Netherlands, and France, with registrations in Germany jumping over 41 percent year-over-year.

However, hybrid-electric cars remained the “preferred choice among EU consumers,” accounting for 34.6 percent of new registrations, more than double the share of electric cars, the association said.

While EV sales in the EU remain robust, the picture is different in the United States.

New U.S. EV sales in November 2025 are estimated to total 70,255 units, down 41.2 percent from a year ago, industry expert Cox Automotive said in a Dec. 15 statement. Compared to October 2025, November sales were down 5.2 percent.

Cox attributed the slump to the expiration of a federal tax credit.

The New Clean Vehicle Tax Credit granted buyers of new EVs up to $7,500 in incentives. The measure was included in the Inflation Reduction Act, signed into law by President Joe Biden in 2022.

President Donald Trump signed the One Big Beautiful Bill Act into law in July 2025, ending the credits on Sept. 30 of that year.

“Market share reached multi-year lows as sales declined. Weak demand fueled a surge in inventory, with days’ supply reaching elevated levels. Pricing eased across the market, underscoring an industry struggling to find balance in the post-incentive era,” Cox said.

“As we head into 2026, the EV market will continue navigating post-incentive challenges, with inventory and pricing dynamics shaping near-term performance.”

As for the overall new-vehicle sales situation in the United States, Cox estimates the number will reach 16.3 million units in 2025, up by almost 2 percent from 2024 and the “best result since 2019,” the company said in a Dec. 17 statement.

For 2026, Cox predicts new-vehicle sales pace to decline by 2.4 percent to 15.8 million units, highlighting factors such as the lack of EV tax incentives.

While Tesla saw sales jump in Norway, its global performance has taken a hit. In 2025, the company delivered 1.64 million units, according to a Jan. 2 statement. This is down 8.3 percent from 1.79 million deliveries in 2024.

Tesla shares fell by 2.59 percent on Jan. 2.

Tyler Durden Tue, 01/06/2026 - 05:00

Russia Straps MANPADS Missile On Shahed Drone To Counter Attack Helicopters 

Low-cost drones have transformed modern warfare forever during the nearly four-year-long Russia-Ukraine war. These commercially available systems have been used to strike cities, power grids, ports, refineries, and military bases, delivering maximum impact at minimal cost.

The evolution of these drones is notable as well. One major issue that drones on both sides of the battlefield have faced is counter-drone operations involving electronic warfare, interceptor drones, fighter jets, and attack helicopters. However, none have yet proven consistently effective at scale.

In response, both sides have increasingly deployed attack helicopters to hunt drones, using machine guns and missiles to shoot them down at close range.

To deter enemy aircraft, the Russians apparently have mounted a shoulder-fired man-portable air defense missile on top of an Iranian-designed loitering munition known as a Shahed-136.

Military blog Army Recognition states Ukrainian forces have "intercepted for the first time a Shahed drone fitted with an Igla-S MANPADS missile."

Here’s more color on the first publicly documented case of a MANPADS missile mounted on a Shahed drone for air defense purposes:

On January 4, 2026, the Ukrainian Unmanned Systems Forces stated that fighters from the Darknode Battalion of the 412th Nemesis Brigade intercepted a Russian Shahed-type kamikaze drone fitted with an Igla-S man-portable air defense system. This variant, observed for the first time during the war, carried a camera and a radio modem, allowing the missile to be launched remotely by an operator located on Russian territory to threaten Ukrainian helicopters and low-flying aircraft involved in counter-drone interception.

Ukraine may now have to allocate more air defense assets and counter-UAS resources to deal with such a threat, as MANPADS-armed drones could potentially serve as a decentralized air defense layer for Russia's advancing forces. (Picture source: Ukrainian MoD)

According to Serhii “Flash” Beskrestnov, a Ukrainian military and technical expert, the missile launch was not automatically but manually triggered by the Shahed operator using the onboard camera feed and radio link. This new variant was assessed as being intended to engage Ukrainian helicopters and other low-flying aircraft that had previously intercepted Russian drones at close range using machine guns or cannons. Army aviation crews were warned to avoid approaching Shahed drones on a head-on course and to be particularly cautious when encountering drones flying in circular or loitering patterns, which were interpreted as potential attempts to draw aircraft into missile engagement zones. Ukrainian units also indicated that examination of the tactics associated with this configuration was ongoing in order to adapt interception procedures.

The rapid evolution of low-cost drones is a concerning development, and it is almost certainly only a matter of time before such drones appear in the Americas. Drug cartels in Mexico are already known to have deployed smaller ones for surveillance and attacks.

Tyler Durden Tue, 01/06/2026 - 04:15

Germany's Middle Class Under Siege In 2026

Submitted by Thomas Kolbe

Save in times of plenty, and you’ll have in times of need. An old German proverb, now proving tragically prophetic. The hardship caused by a completely derailed climate-socialist ideology is only just beginning. This socialist experiment is likely to continue ravaging the country until its economic substance is entirely consumed.

The new year begins as the old one ended: a fiscal raid on the wallets of the middle class. In Brussels and Berlin, there is satisfaction that citizens have been quietly, without spectacle, subjected to yet more tax increases—whose revenues, like a rising tide, lift all ships only slightly.

On January 1, the CO₂ price per ton of emitted gas rose from €55 to €65. This levy, applied to fossil fuels such as gasoline, diesel, natural gas, and heating oil, threads like a red line through the entire value chain—even reaching private households’ bills. The green extraction mechanism is now firmly entrenched, funding Brussels’ expanding activities increasingly, and is defended tooth and nail by the ruling politicians.

The Lie of Tax Relief 

When the federal government celebrates its minimal tax relief for lower- and middle-income groups, reality tells a different story. In truth, these relentless fiscal collectors are increasing the tax burden further. Only the distracting work of state-affiliated media prevents the growing hyperstate’s costs from becoming fully visible.

2026 is set to become an expensive year for Germany’s shrinking middle class, visible soon on the first paycheck of the year. That will reveal the true cost of an overextended welfare state and the one-of-a-kind experiment of transforming Germany’s social insurance system into a quasi-global insurance scheme.

Never since World War II has the German middle class faced such fiscal and economic pressure.

The Burden of State Subsidies on the Middle Class 

The countless subsidies and state interventions financing the complex “green arts” sector, the Ukraine war, and now the military buildup constitute a direct attack on the German middle class. Businesses and net taxpayers pay an ever-rising “blood price” each year to sustain Berlin’s and Brussels’ ideological and power ambitions.

The still-active renewable energy subsidy program, the EEG, alone consumes over €16 billion this year for an energy grid that, since the end of nuclear power, no longer provides a secure base for industrial production, sending both industrial and household electricity costs to dizzying heights. Trittin’s “ice ball” has become a cost Himalaya no one can climb.

Germany’s seven-year industrial decline, which is now accelerating, precisely chronicles the path of the deliberate destruction of its industrial base. Nearly 300,000 industrial jobs have been lost since 2018—tragic, yet apparently of little concern to Berlin’s policymakers.

Local city treasurers, however, are feeling the pain: as corporate tax revenues collapse under industrial destruction, citizens can expect cuts in public services and steep tax hikes. Schools, kindergartens, sports facilities—all face drastic savings. A big “thank you” goes to Berlin central planning.

Industry on the Edge: Loans Fizzle 

What Friedrich Merz, Ursula von der Leyen, and other central planners aim for is clear: using state loans to occupy freed-up industrial capacities. Yet no matter how much funding flows into the new social program under the banner of a special fund for green and military production—the effect has already fizzled. In December, the entire Eurozone industrial sector, measured by current Purchasing Managers’ Indices (PMI), slipped into recession. Germany has been continuously downsizing its industry for seven years.

A victory for Brussels’ central planners, whose goal appears to be the economic and geopolitical neutralization of the country. After years of deindustrialization and waves of bankruptcies, this strategy is hard to interpret otherwise. Germany’s PMI now sits at 47 points—clearly in contraction. Hundreds of thousands of jobs will be lost this year. Last year alone, 24,000 companies went bankrupt. Exact figures for job and net direct investment outflows are not yet available; in 2024, €64.5 billion flowed out of Germany. German industry is no longer competitive.

Quick Blame Game 

The culprits are quickly identified. U.S. tariffs, a favorite topic of sympathetic media, are often cited, though the crisis began long before Donald Trump. Dumping competition from China is also highlighted. While this is a factor, 99 percent of Germany’s economic problems are homegrown.

No one forced the country to keep its borders wide open for a decade, pushing its social insurance to the brink of collapse—all to create new voter bases for the united political left and to break resistance from the bourgeois right.

Shrinking Middle Class and Falling Investments 

This trend is reflected in the middle class. The DATEV SME Index shows falling real revenues across all sectors, particularly trade, construction, and consumer services. Investments are nearly frozen: only 20 percent of companies plan rising investments, according to LBBW’s SME radar for the coming year.

The ideological green agenda has left its mark. High electricity costs, falling incomes, and persistent inflation are bleeding the middle class dry. Retail felt this for the first time during Christmas: nominal sales rose 1.5 percent, yet real sales fell by 1 percent in the peak month.

Economic stress will be a constant companion for Germany’s middle class in 2026. High property prices, zero real interest on savings, and rapid erosion of economic substance collide with an ever-expanding state. Bureaucracy and the state apparatus are evolving into a parasitic leviathan, funded by a shrinking number of contributors.

Consequences for Industry, Trade, and City Centers 

Too much depends on Germany’s high industrial value creation: service businesses, high factor incomes, and secure municipal finances—all are now being lost, reflected in city centers.

Where once life flourished, roughly 5,000 retailers die every year, an irretrievable loss. The desolation mirrors what citizens feel in their wallets: the ebb has begun.

The middle class’s evaporating purchasing power is most visible in hospitality, where families cut costs first. Hotels lost 3.7 percent in real revenue in 2025, while restaurants and bars fell 4.1 percent year-on-year. Households are saving wherever possible. High energy costs, rising social charges, and a weakening job market leave a trail of economic decline.

Missed Lessons: The Population and the Crisis 

Structural economic crises take time to penetrate public consciousness. Most households first tighten belts without complaint.

The state exploits this calm before the storm to consume citizens’ wealth faster than the private sector can compensate. With net new debt over 5.5 percent this year—including accounting tricks—this is particularly evident. The devotion of a portion of the population to ideological doctrine becomes an expensive, destructive tragedy.

Germany faces a nation unprepared to draw necessary lessons: reversing migration policy, adapting the bloated state apparatus to new economic realities, and downsizing accordingly. A turn toward a meritocratic market economy remains absent.

Until these lessons are learned and acted upon, Germany will continue to fall.

* * * 

About the author: Thomas Kolbe, born in 1978 in Neuss/ Germany, is a graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Tue, 01/06/2026 - 03:30

English Remains The World's Most-Spoken Language

Language plays a central role in shaping global communication, culture, and economic exchange. While some languages dominate due to large native-speaking populations, others achieve global reach through widespread adoption as a second language.

This infographic, via Visual Capitalist's Niccolo Conte, compares the native and non-native usage of the world’s most spoken languages in 2025, using data from Ethnologue.

The World’s Most Spoken First and Second Languages

English is the most spoken language with approximately 1.53 billion speakers worldwide.

However, just 390 million people speak English as their first language, meaning nearly 75% of English speakers use it as a second language, making it the dominant global lingua franca across industries and professions.

The table below shows native and non-native speaker counts for the world’s most spoken languages in 2025:

In total, about 18.8% of the world’s population speaks English, but only a quarter of those are native speakers.

Mandarin Chinese ranks second with roughly 1.18 billion speakers.

In contrast to English, Mandarin is primarily spoken as a first language, with more than 83% of its speakers being native.

Hindi and Spanish follow as the next most spoken languages worldwide. Hindi has around 609 million speakers, split more evenly between native and non-native usage due to India’s multilingual population.

Spanish stands out as one of the most widely spoken native languages globally, with nearly 87% of its speakers using it as their first language. Spoken Spanish is concentrated across Spain, Latin America, and parts of the United States.

If you enjoyed today’s post, explore more language and culture insights on Voronoi, including The Most Used Languages on the Internet.

Tyler Durden Tue, 01/06/2026 - 02:45