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

Thursday:
• The NYSE and the NASDAQ will be closed in observance of the New Year’s Day holiday

The Trump Administration's Fight To Fund Scientists

Authored by Paul D. Thacker via RealClearInvestigations,

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

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

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

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

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

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

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

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

Indirect Costs Hard To Define

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

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

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

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

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

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

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

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

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

Inexorable Rise in Charges

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

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

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

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

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

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

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

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

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

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

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

Stanford’s Taxpayer-Funded Yacht

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

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

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

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

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

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

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

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

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

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

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

Trump’s Play To Change the Game

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

.@AGPamBondi’s most egregious violation of the Epstein Files Transparency Act is not that she ignores the deadline…

it’s that she’s redacting names of accused sex offenders AND internal communications about decisions, wrongly citing old rules that are overridden by new law. pic.twitter.com/LDOmC2emho

— Thomas Massie (@RepThomasMassie) December 28, 2025

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Via Greg Hunter’s USAWatchdog.com 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The oil tanker Bella 1 is fleeing U.S. forces after the U.S. Coast Guard tried to intercept it in the Caribbean.

During the pursuit, the crew painted a Russian flag on the ship and now claim Russian status.

The tanker is under U.S. sanctions for carrying Iranian oil and was… pic.twitter.com/WOAMA35aRp

— Clash Report (@clashreport) December 30, 2025

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

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

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

The post Fraud, Drugs, and Hope for 2026 appeared first on CEPR.

High Electricity Prices Are A Choice Blue States Make Every Day

Authored by Isaac Orr & Tom Pyle via RealClearEnergy,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Ad Library and "Prevalence Perception"

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

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

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

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

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

From Local Response to Global Strategy

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

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

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

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

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

"To suggest otherwise is disingenuous," Stone said. 

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

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

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

Whack-a-Mole

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

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

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

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

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

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

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

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

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

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

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

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



 

At The Money: Tax Management for Investors with Bill Artzerounian, RWM (December 31, 2025)

There is still time to make some smart moves to reduce your 2025 taxes. You have to be proactive to take advantage of the latest changes in the One Big Beautiful Bill Act. But you better hurry – there is less than three weeks left in the year!

Full transcript below.

~~~

About this week’s guest:

Bill Artzerounian is Director of Tax Services at Ritholtz Wealth Management, where he focuses on the specific steps investors can take to better manage their taxes.

For more info, see:

Personal Bio

LinkedIn

~~~

 

Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

 

 

 

TRANSCRIPT:

 

Intro: Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman

Barry Ritholtz: It’s never too early to be thinking about taxes. April is only a few months away, but you have questions and we have answers. Let’s discuss how you can reduce or defer your taxes over the long haul.

I’m Barry Ritholtz, and on today’s edition of At The Money, we’re gonna discuss important issues for all investors about understanding how to lower their tax bill.

To help us unpack all of this and what it means for your money. Let’s bring in Bill Erian full disclosure. Bill is a director of tax services at Ritholtz Wealth Management, where I also happen to coincidentally work and have my name on the door.

Let’s start with the basics. Where does tax management sit in the hierarchy of priorities for, for investors. How does this look relative to things like asset allocation or security selection or even asset location and their own behavior?

Bill Artzerounian: Thanks for having me back, Barry. I’m biased. I’m a CPA, I run the tax practice here. I think about taxes all day.

But I’m a proponent of controlling what you can control. We can’t control the market. Asset allocation gives us. You know, we can run back tests, we can look at historical data. That’s very useful. Even security selection, that’s, you know, individual stocks are more volatile than say, uh, an index fund.

But taxes, we have a set of rules and we can, we can, we can define our behavior based on those rules, at least in the short term. We don’t know what tax law will look like 20 years from now. We have a set of rules for the foreseeable future. We have to act within those rules, but it gives us guidelines, and that’s where we can actually make a difference, because we don’t know what the market’s gonna do tomorrow, next week, next month, next year. but we do know what the tax code will look like, at least until probably 2028.

Barry Ritholtz: Let’s talk about tax aware portfolios. What are the core issues that investors can pull the right levers on? What moves the needle the most?

Bill Artzerounian: At it’s very basics. We have different buckets of tax assets. We have pre-tax money, like a traditional 401k. We have after-tax money, which is, say a brokerage account. And then we have tax-free money, which is your, which is your Roth account.

Asset location can be huge and we’re big fans of. Asset diversification and clients come to u  well versedin asset diversification, but not necessarily tax diversification.

Tax diversification to me means you have different levels of assets in each of these buckets, and that gives you a lot of flexibility when you need it. A lot of times this comes up in retirement. We have folks come to us and they stocked away money in a 401k their whole career. They have a couple million bucks. They feel great about it. And then we have to break the news like, “Hey, you’re gonna pay tax on every single dollar here, and there’s no flexibility in their plan.”

Every dollar that they distribute, every dollar that they need for the rest of their lives is going to be taxable. Whereas if you plan ahead and you can diversify those different buckets of tax money, that’s where that’s where you provide a lot of flexibility for yourself in the future.

Barry Ritholtz: Let’s talk about planning ahead and, and perhaps the thing that I find most fascinating, and I’ve been reading the most about, and I still feel like I don’t have a solid handle on it, is the Mega-Roth Backdoor conversion. Tell us what that is. What are the advantages of it? How do you make sure you’re doing that both correctly and legally according to the IRS?

Bill Artzerounian: Call it Super Roth. We can call it Mega Roth. It’s just a juiced up Roth option. In your employer retirement plan, let’s just use. Let’s just use 401Ks as an example. There are other employer retirement vehicles, but let’s use 401Ks.

The limit in 2025 for total 401k contributions is $70 grand. Now that can be employee, myself, contributing to a raw, uh, to contributing to a 401k, or that can come from the employer. Normally for a lot of plans, it’s a combination of the two.

Let’s say I’m 50 years old, I’m contributing $30K to my pre-tax, 401k in 2025. Next year, that’s gonna change slightly. We talked about that last time, but then my employer’s gonna kick in, let’s say 10 grand. That’s their match. So total we’re at 40 K, the remaining 30. If the, if the 401k plan allows it, that remaining 30 — 70k maximum minus 40k already contributed — that can be made on an after-tax basis. And then you have money that’s already been taxed in the 401k you convert that to Roth.

So now we have, we have 40K that went in pre-tax between employer and employee, and then we have 30 K that’s now in a tax free Roth bucket. So we started our discussion talking about tax diversification. This is a great way to do it. Now you have pre-tax money growing and you have tax free money growing.

And again, that’s gonna give you a ton of flexibility down the line. And even inside of those plans, you might want to structure the Roth money a little bit more aggressively because you know Roth money, imperfect financial theory is gonna be the last money you touch. So you might wanna be more aggressive in the Roth. If you have a bond allocation, you might want that in the, in the traditional or the pre-tax sleeve.

The mega backdoor Roth allows for these higher contributions. It’s a kind of an unlock for a lot of folks who are earning a lot of money. They want tax efficiency. A lot of plans are starting to pick this up.

So if you’re listening and you’re a high earner and you have some sway at your company, go ask your CFO, go ask HR. And see if you can implement the, the, the me, the mega backdoor Roth strategy.

Barry Ritholtz: And then what about the full-on Mega-Roth conversion? Do you take a traditional 401k? What does that look like when you convert that to a Roth?

Bill Artzerounian: The extra 30 K that I alluded to that goes in as in quote unquote after-tax contribution. When you convert after-tax money, you don’t pay tax on it. You don’t pay tax twice. That’s kind of a, a foundation of the US tax code. You don’t pay tax twice. Now, if you’re talking about taking money, you took a deduction on, that’s considered pre-tax money.

That 40 k of pre-tax money, if I wanted to convert that to Roth. That’s gonna be a Roth conversion and that one, that one’s gonna be taxable. That may make sense if you’re, uh, as an investor, you know, maybe you’re in your twenties and thirties and you have a long runway to retirement and you want full Roth money, that’s, that’s a great case to convert pre-tax money to Roth now and benefit from long term tax free growth in the Roth, uh, for, for decades to come.

Barry Ritholtz: What are some of the more common tax traps that you see around equity comp? Walk us through. RSUs, ISOs, NSOs, Employee Stock Purchase plans, et cetera.

Bill Artzerounian: We call that equity comp alphabet soup, Barry. It’s, it’s really confusing. A lot of folks out in the Bay Area or in other tech companies, they get employed by these companies, they’re like, here’s your package, and they have no idea what it means.

I think the first thing is just a, an understanding of. Of what you own and then an understanding of how it’s taxed.

RSUs are a little simple. These are restricted stock. Restricted stock is going to be paid on a stated vesting schedule, and it’s almost like a cash bonus. You’re just receiving stock instead of cash. Once you receive it, it’s yours to do what you want.

Options are a little bit more tricky. There’s two types of options. Non-qualified and incentive stock options, the tax treatment is different, but the way to think about it is: You don’t get anything for free. The IRS says, no, you don’t. You don’t get anything for free. So if there’s a difference in your option between what you pay for the share or your strike price and what the share is worth, there’s gonna be a tax component on that difference. We call it a spread or a bargain element, but that’s the big difference

At at the very basics, what folks that are paid in equity need to do is be proactive with a tax planner. I’ve seen far too often, uh, folks with RSUs or they exercise options and they have a big tax bill in April and they have no idea where it came from. Because in my experience, folks don’t feel stock. They feel cash. They know when they’re paid in cash. They don’t know when they’re paid in stock. So if you’re paid in stock and you recognize that as income, you’re not thinking about it. And then you’re left with a big tax bill down the road and you’re like, where I didn’t make a million dollars, I made 500 K. but then you realize, oh, that extra 500 K was stock, not cash. Therefore, I didn’t feel it.

Barry Ritholtz: What about some of the clients we have at some really high growth companies, Apple, Google, Palantir, Nvidia, they’re seeing their stock holdings go through the roof. What are best practices for those folks? How soon do they need to start thinking about managing capital gains?

Bill Artzerounian: Well, that depends. It depends how comfortable they are with the stock, both in the short term and long term. And there’s bias here, right? If you work for a company, in theory, you’re bought into what that company is doing, therefore you don’t really wanna sell the shares, but then you create some concentration risk.

When you’re, when you’re paid in equity, it accumulates. And if that accumulates to a point where. A small move in the stock is keeping you up at night because on paper you’re worth X and then the next day you’re worth X minus whatever, you might wanna diversify a little bit, and that’s where effective tax planning is gonna be crucial, because you don’t just wanna rip a bandaid off, you wanna strategically plan for capital gains based on certain limits.

It could be capital gain brackets, it could be salt limits last time on, on deductions. There’s a, there’s a very structured way to do this, but ultimately it’s gonna depend on. How comfortable you are with concentrated positions in your portfolio, and how much are you willing to pay tax to get rid of that concentration?

Barry Ritholtz: What happens with someone who not only is getting their income from a company, but they just have so much concentrated risk in that equity? What sort of advice do we give folks like that?

Bill Artzerounian: There’s a couple options. Number one, you could just pay tax on it. That’s a win. Especially at long-term gain rates, you know, our clients are are pushing 35, 37% on their ordinary income, but their long-term capital gain rate is gonna be 20%. They’ll probably pay 3.8%, which is net investment income tax. But that’s a reasonable rate to pay for all this growth.

You’ve won! Now create some tax sell, sell the capital gain, and help yourself sleep at night because again, if that stock moves 10%. It’s gonna be material to your overall net worth. There are some other mechanisms.

We’re heavy with direct indexing here, we’ve had a lot of success with the O’Shaughnessy team [now part of Franklin Templeton] on direct indexing and creating tax losses to use against concentrated positions, or maybe use tax losses against real estate holdings or other stuff.

There are some newer things. Bill Sweet calls this late stage capitalism where there’s this, there’s this slew of new products to either avoid or defer taxes. 351 exchanges come, come into mind where you take a, you take a concentrated position, you find a group of investors, you bundle it into an ETF. And you have a diversified basket now rather than a concentrated position.

It doesn’t necessarily solve the tax problem because your basis is your basis. You can’t change that. So if I have a million dollars of stock with a $5,000 basis, even if I exchange that for a, a diversified ETF, my basis is still five grand.  So whenever I, whenever I wanna sell some shares of that new ETF, I’m still gonna have a pretty big capital gains bill. But it does solve the diversification issue.

Barry Ritholtz: This traces back to real estate. If you sold an investment property and rolled into another one, you got to roll over the tax obligation. It sounds like the SEC is finally caught up with real estate investors. Tell us more about how that operates. If you’re sitting in highly appreciated stock, and let’s be blunt, this is late stage of the bull market. People are sitting on giant, low-cost basis positions. How does this exchange work? Is it work? Is it just ETFs? What else can you do this with?

Bill Artzerounian: There’s a slew of products on the market to solve these quote unquote problems. They’re not problems at all. They’re, they’re, they’re, these are, these are champagne problems.

But just like in real estate where a 1031 exchange looks like, you have a piece of property real estate, for example, you find a bigger piece of real estate. You have a capital gain in the existing property, and you roll it into the new property.

Again, this is tax deferral. It is not tax avoidance. Your basis stays low. And so what you end up with is you, you, you push the capital gain down the line. In real estate, and what you could do with liquid assets and securities is if you exchange and exchange and exchange your whole life. Then you pass, let’s say you die – my favorite thing to say is, “Nothing solves tax problems like death” but when you, you pass on the assets to your kids. And what you’ve effectively done is you’ve deferred capital gains until you die, and then your errors get step up in basis. So there are more mechanisms now.

To replicate what’s happened in real estate with liquid securities and other assets, and that’s, that’s allowed folks to defer, defer, defer. And then, you know, eventually we’ll, uh, uh, inevitably we’ll see a bear market and this will solve itself. But right now we’re seeing a lot of folks explore these options because we’ve had a hell of a run for 15 years now, and a lot of folks are sitting on big capital gains.

Barry Ritholtz: To say the very least. There’s been a whole new set of rules passed last year in 2025. Tell us what the most significant tax law changes were? What should investors be aware of?

Bill Artzerounian: The biggest change is what didn’t change at all, and that was actually tax rates. If the tax bill that was signed into law, we call it OB3 (one big, beautiful bill), if that was not signed into law by December 31st, or if there were no tax changes. Tax rates were set to increase by about 3 to 5% across the board, For folks earning the highest incomes, that would’ve gone from 37 to 39.6% and that 2.6% difference, that is unlimited. In theory, that could be up to six figures, seven figures, eight figures, nine figures, and that 2.6%. Is now kicked into every dollar that exceeds that that amount. So the biggest thing that changed is what didn’t change. And that’s tax rates.

The other changes that we’re seeing come into effect are a lot on the deduction side. There’s more strategy around tax deductions, charitable giving, state and local taxes, how to bump from 10K up to 40K for certain taxpayers.

For most taxpayers, we talk about charitable giving quite a bit. And those are, those are what we’re focused on is, is controlling the timing of deductions to time with income, right? Your deductions are worth more when your tax rate is at its highest than when your tax rate is lower. We’re trying to time charitable gifts. We’re trying to time salt deductions to coincide with our client’s highest income years.

Barry Ritholtz: You mentioned earlier, death solves a lot of tax problems. Turns out it solves a lot of problems. But, um, how do you integrate tax planning into estate planning? Are they really one and the same? Tell us what the thought process is there.

Bill Artzerounian: They are one and the same with totally different rules. Estate tax as a whole doesn’t come up outside of the most wealthy individuals, right? Right now the estate exemption is gonna be like 30 million bucks for a joint family.

But Income tax plays a role throughout life, right? And so if we can, if we can integrate income tax planning with estate planning, it’s a, it’s a win for these families because at those levels of wealth, those are gonna be the folks that are most sensitive to big tax bills.

One thing we like to do. That combines the two is strategic Roth conversions. A lot of folks that we meet with, they have enough assets to live on. They’re thinking about  generationally, how do we take care of our kids within the bounds of the tax code? Roth conversions will allow, let’s say, parents to pay tax now rather than leave pre-tax money to their kids. Under Biden’s Secure Act 2.0, there’s now a 10 year rule for. Inherited IRAs. These are both pre-tax IRAs and Roth IRAs.

If I have a kid, let’s pretend I’m 80 years old. I have a 50-year-old daughter who’s a doctor in New York, right? Her tax rate is gonna be very, very high when I pass away. She’s gonna have 10 years to deplete my retirement accounts.

If that’s in pre-tax money, she’s gonna pay tax at the highest possible rate on that money. Whereas if I convert my assets, my pre-tax assets to Roth, maybe I pay tax at 24% instead of her 37% rate. I do that on her behalf, and now she has a lot more tax efficiency when she inherits my money.

Barry Ritholtz: What should people be thinking about as they start to organize their taxes, not just for 2026, but looking ahead to 2027?

Bill Artzerounian: It’s about timing income, right? Again, think about this, over the course of your lifetime, or if you have kids over the course of their lifetime, when can we pay tax at a lower rate than we might pay in the future?

That’s, that’s a lot of our work is just timing, income, timing, deductions to take advantage of fluctuations in, in tax rates and in, um, in, in lifetime income. And that’s where, that’s where you have to look forward. Again, look forward rather than backwards, is if you can time these things. These are gonna be marginal differences over the course of your lifetime, but marginal differences that can then compound, they’re really gonna add up over decades.

So to wrap up, there are a lot of steps investors can take to minimize what they pay in taxes, not only on capital gains. What they’re doing with their qualified accounts, where they locate their assets and changes they can make to make sure their kids aren’t saddled with the tax burden. Speak to your financial planner.

Speak to your tax professional. Make sure they’re working together so that you check every box that’s available to you to legitimately reduce and defer your taxes by as much as possible.

I’m Barry Ritholtz. You are listening to Bloomberg’s at the Money.

 

 

~~~

Find our entire music playlist for At the Money on Spotify.

 

The post At the Money: Tax Management for Investors appeared first on The Big Picture.

Newsom's Massive Fraud Scandal No One Is Talking About

Authored by Matt Margolis via PJMedia.com,

Everybody's buzzing about that Minnesota Medicaid mess with Gov. Tim Walz. Some are even calling it the largest fraud scandal ever. If only.

Blue-state fraud is undoubtedly a problem, and Walz should be held accountable if he did indeed look the other way. But what happened in the land of 10,000 lakes is tiny compared to the fraud in California under Gavin Newsom.

Heck, it makes Minnesota look like pocket change.

A fresh 92-page bombshell from the California State Auditor lays it all out.

“This latest report was issued by the state auditor, and that's a nonpartisan position; that state auditor now puts eight state agencies on the high-risk list of agencies to watch out for, for things like fraud and mismanagement as well as waste,” Newsmax correspondent Heather Myers revealed last week.

“Here's a look at that 92-page report. Newly added to the high-risk list is California's food stamp program. If the state doesn't get the improper payments under control, it could cost an extra $2.5 billion. Also on there is the Department of Finance, which was tasked with giving out COVID relief funds. Critics say $32 billion of that was taken by fraudsters. Then there are infrastructure issues like California's deteriorating dams, and also the high-speed train that's already cost taxpayers 18 billion without a single section of track complete.”

But wait, there’s more!

“Other reports cite $24 billion spent on the homeless issue that critics claim the state lost track of. More recently, there's a report that says California cell phone users paid a surcharge for years to upgrade the state's 911 system,” she added.

Tallied all up, California taxpayers lost $70 billion to fraud.

But here’s where things get really interesting. While pressure is on in Minnesota to get to the bottom of the state’s fraud, California seems to be under the radar.

Now get this. Right in the middle of the fraud apocalypse, a new ballot initiative seeks to impose a one-time 10% wealth tax on billionaires' assets.

“Billionaires are threatening to leave California, and it's all because of a possible new ballot initiative in the state. It's a wealth tax. A healthcare labor group is behind this push, calling for a one-time tax on billionaires equal to 10 percent of their assets. And right now, it does not have enough signatures to get on the ballot,” CNN’s Abby Phillip reported Monday.

“These are big numbers, just to let people know what we're talking about here. Larry Page, for example, he's worth $258 billion. His estimated tax would be $12 billion. Peter Thiel, worth $27 billion. His estimated tax would be $1.2 billion. That's not $1.2 in your pocket. It's billions of dollars. So, I mean, should they or should they not?”

CNN's Scott Jennings torched the whole scheme; it’s about covering up the fraud.

“And it is not for the public benefit,” he pointed out.

“In California, the state auditor just found $70 billion in fraud going on in the state. The reason they need a wealth tax is to cover up the fraud. The hole in the budget in California is due to fraud. That's why they're trying to tax people." Boom. Panelists flipped out. Jennings doubled down. Why 5%? Why billionaires? Arbitrary envy tax to paper over Sacramento's black hole. Imagine handing more cash to the clowns who blew $24 billion on tent cities.”

Make no mistake about it, he’s right. Newsom is going to run for president in 2028. Something tells me that $70 billion in fraud on Gavin's watch is the kind of thing that won’t sit well in a primary, much less the general election.

Tyler Durden Wed, 12/31/2025 - 11:15

Oil Heads For Worst Annual Loss Since COVID As US Crude Production Hits Record High

Oil futures are gaining in early U.S. trade, but on track to end the year substantially lower.

As Dow Jones reports, the unwinding of OPEC+ output cuts, along with higher non-OPEC production, fueled oversupply concerns in 2025, while U.S. sanctions and geopolitical tensions in the Middle East, Russia-Ukraine and more recently Venezuela led to frequent price spikes.

"The crude supply surplus will acquire greater transparency than was the case through most of the fall period as floating storage gradually finds its way into onshore facilities," Ritterbusch and Associates says in a note.

But away from the geopolitical chaos, domestic supply and production remain key...

DOE

• Crude -1.934mm

• Cushing +543k

• Gasoline +5.845mm

• Distillates +4.977mm

Crude stocks fell for the 3rd week in the last 4 while product inventories saw their 8th straight weekly build in a row...

The US Crude Oil Total Inventory (excluding Strategic Petroleum Reserve) fell to 422,888 thousand barrels in the week ending Dec. 26, 2025, lowest since Oct. 31, 2025... decoupling from the crude price...

US crude production remains near record highs as the rig count has continued to slide all year...

Oil headed for its steepest annual loss since the start of the pandemic in 2020, in a year that has been dominated by geopolitical risks and steadily rising supplies across the globe.

OPEC+ roiled markets earlier this year by reversing its longstanding policy of defending prices and raised output, seeking to reclaim market share as countries including Brazil and Guyana boosted supply and the US pumped at record levels. The producer group is expected to hold off on output hikes during talks this weekend.

A punishing surplus is expected to weigh on prices in 2026 - Global oil markets have been been oversupplied this year.

“The oil market is set to remain oversupplied into 2026, with strong non-OPEC production from the US, Brazil, Guyana and Argentina outpacing uneven global demand,” said Kaynat Chainwala, an analyst at Kotak Securities Ltd. Prices should stay range-bound between $50 and $70, with risks over Venezuelan or Russian supply remaining supportive, she added.

Both the International Energy Agency and the US government see production exceeding consumption by just over 2 million barrels a day in 2025 and that surplus worsening in the coming year.

Tyler Durden Wed, 12/31/2025 - 11:00

Somali Americans Face Audits For Potential Immigration Fraud

Authored by Kimberley Hayek via The Epoch Times,

The Trump administration is auditing immigration cases involving U.S. citizens of Somali origin to uncover potential fraud that might be grounds for revoking their citizenship, known as denaturalization.

“Under U.S. law, if an individual procures citizenship on a fraudulent basis, that is grounds for denaturalization,” Homeland Security Assistant Secretary Tricia McLaughlin said in a statement reported by Fox News then shared by the White House on social media.

Such denaturalization actions are rare, and the process often lasts years. Data from the Immigrant Legal Resource Center show an average of about 11 cases pursued annually between 1990 and 2017.

Since taking office in January, President Donald Trump has made enforcing immigration laws a priority, including ramped-up deportations, and visa and green card revocations.

Federal authorities have in recent months turned their focus to Minnesota’s Somali population, alleging it is an epicenter for fraud involving millions in federal funds for social services. FBI Director Kash Patel announced Sunday that the bureau has “surged” investigators and resources to Minnesota.

Meanwhile, the U.S. Department of Health and Human Services (HHS) announced Tuesday that it has stopped all child care payments to Minnesota. Nationwide, payments from the department’s Administration for Children and Families “will require a justification and a receipt or photo evidence before we send money to a state.”

The Small Business Administration said it plans to pause funding to the state pending investigation of suspected $430 million in Paycheck Protection Program (PPP) fraud, Administrator Kelly Loeffler posted to X on Dec. 29.

The House Oversight Committee is investigating an alleged cover-up of welfare fraud schemes in the state. HHS Deputy Secretary Jim O'Neill stated the department has “turned off the money spigot.”

Minnesota Gov. Tim Walz responded that his administration has “spent years cracking down on fraudsters” and accused Trump of “politicizing the issue to defund programs that help Minnesotans.”

The Justice Department has charged nearly 100 individuals in Minnesota’s fraud scandal, with 85 percent of Somali descent. Attorney General Pam Bondi credited independent journalist Nick Shirley for assisting in the investigations.

The FBI began deploying resources to Minnesota early in the probe, Patel said, as the White House raised alarms about fraud in the Somali community. Officials made public on Thanksgiving their concerns over ubiquitous scams.

The Labor Department sent a “strike team” to the state to investigate fraud, waste, and abuse. At least seven federal agencies are also involved in the probe.

Trump has denounced Minnesota as “a hub of fraudulent money laundering activity,” and moved to end temporary deportation protections for Somalis, citing gang activities. Reports suggest progressive policies and “Minnesota Nice” culture allowed such fraud to happen.

State lawmakers in Ohio have requested an investigation in their state, warning that similar fraud schemes may exist there, and urging law enforcement to “arrest, prosecute, jail, denaturalize, and deport all Somali fraudsters” in a letter state Rep. Josh Williams (R-Sylvania Twp.) shared with the state Department of Children and Youth on Dec. 30. The letter was signed by at least 40 other lawmakers.

Tyler Durden Wed, 12/31/2025 - 10:45

Trump Media Shares Pop After Announcing Digital Token Distribution With Crypto.com

Trump Media shares are volatile this morning, popping before paring gains, after the company announced plans to distribute a new digital token to its shareholders through a partnership with Crypto.com, expanding the company’s push into blockchain-based shareholder engagement.

Under the proposal, each ultimate beneficial owner of DJT stock is expected to become eligible to receive one digital token for every whole share owned, with the distribution anticipated to begin in the near future.

Trump Media indicated that token holders may receive rewards periodically throughout the year, including potential benefits or discounts connected to the company’s products and services such as Truth Social, Truth+, and Truth Predict. Additional details about the distribution structure and timeline are expected to be released in the new year.

Trump Media CEO and Chairman Devin Nunes said the company views the initiative as a new model for shareholder engagement and transparency, citing the advantages of blockchain technology and improving regulatory clarity.

“We look forward to utilizing Crypto.com’s blockchain technology and improving regulatory clarity to implement this first-of-its kind token distribution, reward Trump Media shareholders, and promote fair and transparent markets.”

With this move, Trump Media joins a growing group of public companies that have explored digital tokens as tools for investor engagement. The announcement reflects a broader trend among corporations seeking new ways to ntegrate blockchain technology into mainstream financial markets.

The token initiative adds another layer to the investment narrative surrounding DJT stock, which has remained one of the most closely followed and actively traded names since Trump Media became publicly listed.

By introducing token-based rewards tied directly to equity ownership, the company is offering shareholders potential additional value beyond traditional stock appreciation.

Tyler Durden Wed, 12/31/2025 - 10:25

30 Numbers From 2025 That Are Almost Too Crazy To Believe

Authored by Michael Snyder via The Economic Collapse blog,

2025 has truly been a historic year. No matter which side of the fence that you are on, nobody can deny that we have witnessed seismic political changes over the last 12 months. Meanwhile, the AI revolution is transforming our lives in ways that we don’t even understand. But despite all of our advanced technology, we can’t stop the endless barrage of natural disasters that has been pummeling us in 2025, and hunger continues to spread all over the globe. Of course war has been a major theme from the very beginning of the year to the very end of the year. Humanity has been facing one major crisis after another, and people are steadily getting angrier and more frustrated.

Our world is changing at a pace that is absolutely breathtaking.  

If you always wanted to live in “interesting” times, you have certainly gotten your wish.  

The following are 30 numbers from 2025 that are almost too crazy to believe…

#1 As 1999 began, a Gallup survey found that 70 percent of Americans were satisfied with how things were going in the United States.  As 2025 ends, only 24 percent of Americans are satisfied with how things are going in the United States.

#2 In 1980, the fact that the U.S. national debt had reached a trillion dollars was a really big deal.  But now our national debt has surpassed the 38 trillion dollar mark and there is seemingly no end in sight.

#3 Globally, the total amount of debt in the world has reached an almost unbelievable total of 337 trillion dollars.

#4 In 2025, more than half of all of the nations on the entire planet were either directly involved in military conflict or were funding it.

#5 At the start of 2025, you could purchase an ounce of silver for about 30 dollars.  As 2025 ends, an ounce of silver will cost you more than 70 dollars.

#6 Crypto investors lost about $800,000,000,000 during the month of November alone.

#7 After all this time, the Department of Justice is claiming that they have just “discovered” a million more Epstein documents.

#8 In 2025, researchers in the United States and South Korea developed a version of the bird flu that has a 100 percent death rate in mammals.

#9 According to the latest National Customer Rage Survey, 77 percent of U.S. consumers say that they have had a product or service problem within the last 12 months.  That is a brand new all-time record high.

#10 Earlier this year, we witnessed 494 earthquakes of magnitude 5.0 or greater within a 30 day period.  That was about 4 times as many earthquakes of magnitude 5.0 or greater than we normally experience in a typical month.

#11 Globally, natural disasters caused a total of $120,000,000,000 in economic damage in 2025.

#12 The number of Americans that are dealing with food insecurity has almost doubled since 2021.

#13 The United Nations is warning that nearly 10 percent of the entire population of the globe is now going to bed hungry each night.

#14 Approximately 1.2 million foreign students are currently attending colleges and universities in the United States.  How many U.S. students have been denied admission in order to make room for those students at our best schools?

#15 In 2019, you could get a cheeseburger at McDonald’s for a dollar.  Today, the average price of a cheeseburger at McDonald’s is $3.15.

#16 Since 2019, the annual income needed to afford a median-priced home in rural U.S. counties has more than doubled.

#17 According to a survey that was conducted by PNC Bank, 67 percent of U.S. workers are now living paycheck to paycheck.

#18 Investopedia has determined that it now takes approximately 5 million dollars to live the American Dream over the course of a lifetime.

#19 One study discovered that approximately 42 percent of Americans that belong to Generation Z have been diagnosed with “anxiety, depression, ADHD, PTSD” or some other mental health condition.

#20 One recent survey found that 70 percent of U.S. adults are currently taking at least one pharmaceutical drug, and nearly a quarter of U.S. adults are currently taking at least four pharmaceutical drugs.

#21 According to the CDC, an American now dies by suicide every 11 minutes.

#22 Approximately 20 percent of high school students in the United States have had a relationship with an AI chatbot.

#23 One recent survey found that almost two-thirds of all church leaders that prepare sermons “use AI tools in their sermon writing process”.

#24 Well over 50 percent of the global population lives in a nation where Christians are being violently persecuted.

#25 U.S. farmers are facing the worst economic downturn that they have experienced in at least 50 years.

#26 The size of the U.S. cattle herd has dropped to the lowest level in about 75 years.

#27 According to Challenger, Gray & Christmas, U.S. employers have announced a grand total of almost 1.2 million job cuts in 2025.

#28 The McKinsey Global Institute is warning that approximately 40 percent of all U.S. workers could potentially be replaced by AI.

#29 In more than 50 percent of the nations on the entire planet, the total fertility rate is now below replacement level.

#30 A recent YouGov survey discovered that nearly half of the U.S. population believes that a nuclear war is likely within the next 10 years.

The pace of global events has accelerated significantly over the past year.

It really does feel like we are building up to some sort of a crescendo.

We are living at a time of a “perfect storm”, and we just keep getting hammered by one crisis after another.

As a result, much of the population has become numb to it all.

Never before in human history have we been subjected to such an emotional overload.

When you are being pulled in so many directions emotionally, it can be really easy to give in to the temptation to go numb.

But I would encourage my readers not to do that.

It is when times are the darkest that light is needed the most.

As things get even darker in 2026, choose to be a light to those around you.

All of human history has been building up to this time, and we get to be here for it.

There is nowhere else that I would rather be than right here, and there is no other time that I would have rather lived than right now.

Don’t let all of the chaos that is going on all around us get you down.

You were born for such a time as this, and now is the time to become everything that you were created to be.

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Tyler Durden Wed, 12/31/2025 - 09:45

Today, in the Calculated Risk Real Estate Newsletter: Freddie Mac House Price Index Up 1.0% Year-over-Year in November

A brief excerpt:

Freddie Mac reported that its “National” Home Price Index (FMHPI) increased 0.19% month-over-month (MoM) on a seasonally adjusted (SA) basis in November.

On a year-over-year (YoY) basis, the National FMHPI was up 1.0% in November, down from up 1.1% YoY in October. The YoY increase peaked at 19.2% in July 2021, and for this cycle, and previously bottomed at up 1.1% YoY in April 2023. The YoY change in November is a new cycle low. ...

As of November, 19 states and D.C. were below their previous peaks, Seasonally Adjusted. The largest seasonally adjusted declines from the recent peaks are in D.C. (-4.9%), Montana (-3.2%), and Florida (-2.8%).

For cities (Core-based Statistical Areas, CBSA), 140 of the 387 CBSAs are below their previous peaks.

Here are the 30 cities with the largest declines from the peak, seasonally adjusted. Punta Gorda has passed Austin as the worst performing city. Note that 5 of the 6 cities with the largest price declines are in Florida.

A third of the cities on the list are in Florida.

There is much more in the article!

Bondi Vows To Hold Former Officials Accountable For 'Government Weaponization'

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Attorney General Pam Bondi said in a recent interview that she will continue to investigate officials in the Obama and Biden administrations over “government weaponization” after courts tossed federal charges against two high-profile figures.

Attorney General Pam Bondi (C)speaks during a news conference at the Department of Justice in Washington on Dec. 4, 2025. Andrew Harnik/Getty Images

“At my direction, our U.S. Attorneys and federal agents are actively investigating instances of government weaponization nationwide,” Bondi told Just the News in writing in an interview released on Sunday. “This is a ten-year stain on the country committed by high-ranking officials against the American people.”

Bondi then credited President Donald Trump for allowing the Department of Justice (DOJ) to fix what she described as “damage” done to the agency as well as the FBI under previous administrations, saying they used “legal process and operations that were excessive.”

“They went so far as to serve search warrants that their own Department and law enforcement officials believed were excessive,” she said.

Her comments appeared to be in reference to evidence showing that some FBI agents did not believe the DOJ had enough evidence to establish probable cause in their search of Trump’s Mar-a-Lago residence in Florida in 2022. Trump was later charged with illegally retaining classified materials before the case was dropped.

Evidence from the DOJ “illustrates that the FBI shielded political figures” under the Biden and Obama administrations “while pursuing conservatives for their beliefs” instead of “protecting Americans from public safety threats,” she told the outlet.

Under Bondi, federal prosecutors have brought cases against former FBI Director James Comey, New York Attorney General Letitia James, and former White House adviser John Bolton. The cases against Comey and James have since been thrown out in court, although the DOJ has sought to revive them.

Democratic critics of the administration have said that the Trump administration is using arguments about the weaponization of the federal government as a means to target Trump’s political enemies.

As an example, House Minority Leader Hakeem Jeffries (D-N.Y.) said in September that the indictment against Comey, which was on charges of making a false statement related to testimony before the Senate Judiciary Committee in 2020, amounted to “malicious prosecution” that has no “basis in law or fact.”

Trump and conservatives have said the DOJ should be more aggressive in prosecuting former officials for various alleged crimes.

Bondi said her “Department of Justice takes government weaponization seriously.”

“That means protecting civil liberties, preventing election interference, and holding bad actors accountable. No one is above the law, even if they think they are,” she said.

Bondi also referred to a letter sent by attorneys of former CIA Director John Brennan, who currently works as an analyst for MSNBC, regarding subpoenas in a grand jury investigation.

“Public reports of a recent letter sent to Cecilia M. Altonaga, the chief judge of the Federal District of Florida, by John Brennan’s defense attorneys, seeking judicial intervention in any legitimate grand jury investigation by the executive branch, shows these bad actors are clearly concerned about their liability and want to preserve a two-tiered justice system: one for them and one for everyone else.

“No more,” she said. 

Tyler Durden Wed, 12/31/2025 - 09:10

Futures Flat On Last Trading Day Of 2025, Silver Slides

Stocks are ending a third straight year of double-digit gains in subdued fashion as an expected seasonal rally fails to gain traction. Silver’s volatile ride extended to another session, with the metal tumbling after the CME hiked margins for the second time in three days. As of 8:15am ET,  S&P 500 futures fell 0.1% and well off session lows, after a stretch of post-Christmas losses pared the benchmark’s advance for 2025 to 17%, just shy of the 20%+ gains 2021, 2023 and 2024. Nasdaq 100 contracts were down 0.3%.Both indexes have drifted lower for the past three days amid a rotation out of growth and momentum stocks and into value and quality names in seasonally. Silver plunged as a run of price moves of 5% or more entered a fourth day. The dollar is steady as it heads for an annual decline of about 8%, the steepest since 2017. Treasury yields are ticking lower after Tuesday’s FOMC minutes offered nothing to shake expectations rates will be left unchanged when policymakers meet again in January, with further cuts likely later in the year. The only economic data on today's calendar is the weekly initial claims which printed far below expectations at 199K (est.218K).

In premarket trading, Mag 7 stocks were mostly lower (Nvidia +0.4%, Tesla +0.3%, Microsoft -0.1%, Apple -0.2%, Amazon -0.1%, Meta -0.1%, Alphabet -0.3%). With a 66% year-to-date rally, Alphabet leads the group in 2025.

• Nike (NKE) is up 2.6% after CEO Elliott Hill reported the purchase of about $1 million in shares.
• Vanda Pharmaceuticals (VNDA) jumps 21% after the biopharmaceutical company said the US FDA has approved Nereus (tradipitant) for the prevention of vomiting induced by motion.

In corporate news, Warner Bros. Discovery Inc. plans to once again reject a takeover bid from Paramount Skydance Corp., according to people familiar with the company’s thinking. Among the board’s concerns, Paramount has yet to increase its offer, which Warner Bros. earlier rejected as inferior to Netflix’s offer. Michael Burry, the money manager made famous in The Big Short, denied betting against Tesla shares, despite calling the company “ridiculously overvalued” earlier this month. 

Investors have reaped strong returns this year in a market that has been powered by optimism about the vast economic potential of artificial intelligence. Of course, as Bloomberg notes, it hasn’t been a smooth ride, though, with traders weathering swings triggered by US trade policies, geopolitical tension and concern over lofty valuations. And while many expected a Santa rally, the year’s momentum faded in the final days of December, as traders delay big decisions until after the holiday period, having already banked strong returns. The post-Christmas losses pared the S&P's 2025 advance to 17%, just shy of the 20%+ gains 2021, 2023 and 2024. 

“After an excellent year in equity markets, and with positioning close to highs in late November, portfolio and fund managers may have been closing their bets and realigning them to benchmark,” said Roberto Scholtes, head of strategy at Singular Bank. “Our base case is for the bull run to continue, albeit with more volatility and resulting in mid-single digit returns.”

While things remain subdued in equities, silver’s gyrations continue. Wild price swings are prompting CME Group to raise margins on precious-metal futures for the second time in a week. After an almost unstoppable rise, the two metals have recorded a series of swings in December and erased some gains as investors booked profits. Both commodities remain on track for their best year since 1979.

Elsewhere, Xi Jinping said China is set to meet its economic targets for 2025, with growth expected to reach “about 5%” even though in reality it is a fraction of that. China also blasted Western criticism of its most intrusive military drills ever around Taiwan as its armed forces appeared to wrap up the maneuvers.

The end of 2025 also means that Warren Buffett’s famed tenure as CEO of Berkshire Hathaway is officially coming to a close, as the 95-year-old hands over the reins to successor Greg Abel into the new year.

In Europe, the CAC 40 is down 0.6% while the FTSE 100 drops 0.2%, with both indexes set to close early. Bourses in Germany and Italy are shut all day. Mining and technology stocks are leading declines on the Stoxx 600.

Asian equities wrapped up their best year since 2017 on a more hesitant note. Most regional indexes are under pressure, with Hang Seng Tech and ChiNext leading the retreat. Taiex is a bright spot following an almost 1% rally. Several markets are already shut for the year, including Japan and South Korea. 

In FX, the dollar is steady as it heads for an annual decline of about 8%, the steepest since 2017, rattled first by Trump’s tariffs then by Fed rate cuts. The recent advance did little to prevent the greenback from heading toward its worst annual retreat in eight years, with investors saying more declines are coming if the next chief of the Federal Reserve opts for deeper interest-rate cuts than currently expected. The kiwi is the weakest of the G-10 currencies, falling 0.4% against the greenback

In rates, treasuries weakened after of the final economic data release of 2025, with the 10-year yield rising 3 basis point to 4.15% after earlier falling 2bps. Applications for US unemployment unexpectedly tumbled to  just 199K in the week ended Dec. 27, far below estimates of 218K.

Meanwhile, Bitcoin traded near $88,800. The digital currency has settled into a range of roughly $85,000 to $95,000 following a crash in October that has put it on pace for a first annual loss in three years. After kicking off 2025 with a rally that was spurred by optimism about the crypto-friendly policies of the second Trump administration, Bitcoin was hit by the uncertainty surrounding US tariffs.

In commodities, silver drops 6% to around $72/oz after the CME Group said they will raise margins on precious-metal futures for the second time in the space of a week. Gold falls 0.7%. Oil headed for its steepest annual loss since the start of the pandemic in 2020, in a year that has been dominated by steadily rising supplies across the globe. Brent steadied close to $62 a barrel, with traders’ near-term focus on an OPEC+ meeting at the weekend, a bearish US industry report and American policies toward Russia, Iran and Venezuela.

Market Snapshot

• S&P 500 mini -0.3%
• Nasdaq 100 mini -0.4%
• Russell 2000 mini -0.3%
• Stoxx Europe 600 -0.2%
• CAC 40 -0.6%
• 10-year Treasury yield -1 basis point at 4.11%
• VIX +0.6 points at 14.88
• Bloomberg Dollar Index little changed at 1204.03
• euro -0.1% at $1.1733
• WTI crude +0.3% at $58.14/barrel

Top Overnight News

• OpenAI Is Paying Employees More Than Any Major Tech Startup in History: WSJ
• Drugmakers raise US prices on 350 medicines despite pressure from Trump: RTRS
• Xi Touts China’s AI, Chip Wins In Triumphant New Year’s Speech:  BBG
• Xi Declares China’s Economy Set to Hit 5% Growth Goal in 2025: BBG
• From battleships to buildings: Trump's name is everywhere: RTRS
• Bankers Are Gearing Up for Another Onslaught of Monster Deals in 2026: WSJ
• Meta created ‘playbook’ to fend off pressure to crack down on scammers, documents show: RTRS
• US Virgin Islands sues Meta over ads for scams, dangers to children: RTRS
• Meta tolerates rampant ad fraud from China to safeguard billions in revenue: RTRS
• World’s Richest Added a Record $2.2 Trillion in Wealth This Year: BBG
• Oil Tanker Pursued by U.S. Seems to Claim Russian Protection: WSJ
• Boston Went Big on Luxury Condos. The Buyers Didn't Show Up: WSJ
• Finland Takes Control of Ship Suspected of Undersea Cable Damage: BBG
• Trump’s Latest Venezuela Tactic: Revealing a Secret Strike to the World: WSJ
• Palestinian Authority Sparks Fury by Cutting Prisoner Payments: BBG

US Event Calendar

• 8:30 am: Dec 27 Initial Jobless Claims 199k, est. 218k, prior 214k
• 8:30 am: Dec 20 Continuing Claims 1866k, est. 1901.74k, prior 1923k

Tyler Durden Wed, 12/31/2025 - 08:58

Initial Jobless Claims End 2025 Near Record Lows

The number of Americans filing for jobless claims for the first time plummeted last week to 199k - the lowest since the Thanksgiving week plunge and pretty much the lowest since

Source: Bloomberg

Sub-200k levels are rare and go back to 1969 lows...

Source: Bloomberg

Continuing jobless claims also dipped last week and is below the 1.9 million Maginot Line...

Source: Bloomberg

The 'no hire, no fire, no quits' labor market continues.

 

Tyler Durden Wed, 12/31/2025 - 08:40

The DOL reported:

In the week ending December 27, the advance figure for seasonally adjusted initial claims was 199,000, a decrease of 16,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 214,000 to 215,000. The 4-week moving average was 218,750, an increase of 1,750 from the previous week's revised average. The previous week's average was revised up by 250 from 216,750 to 217,000.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 218,750.