Nadia Tuck of European Pensions reports NBIM 'all-in on AI' as it publishes new strategy:

Norges Bank Investment Management (NBIM) has said it is “all-in on artificial intelligence (AI)” in its updated strategy for 2026-2028.

NBIM, which is responsible for the management of the Government Pension Fund Global (GPFG), outlines five key areas in its Strategy 2028 – performance, technology, operational robustness, people and communications.

Within its technology section, the investment manager said it will be “at the forefront of applying responsible AI in asset management”.

“Our target is to cut manual processes in half so our people can focus on what matters most – generating returns,” it stated.

As part of this, it plans to create digital colleagues for routine tasks while developing AI solutions that execute complex analytical tasks and provide insights to enhance decision-making.

“We will continue automation of our real asset investment processes and use AI tools to reduce manual burdens, speed up operations, and reduce the risk of potential errors. We will work with our real asset partners to modernise industry processes.

“Data is one of our core assets and we will make our data platform more user- and AI-friendly,” it said.

However, it stressed that it recognises that “success depends on teamwork not technology alone”.

“Technology will augment our judgment, not replace it,” NBIM stated.

The new strategy builds on the revised plan for 2023-2025 and uses the fund’s attributes, such as its long-term investment horizon, scale, people, technology and data, as its starting point.

NBIM CEO, Nicolai Tangen, said the strategy sets out “how we will work to become the best and most respected large investment fund in the world”.

Regarding investment, the fund’s goal is to maximise returns after costs.

Its strategy lists its three main investment strategies: market exposure, security selection, and fund allocation, which it pursues across equities, fixed income, and real asset management.

NBIM said it will be honest about “what works and what does not”.

“We will implement systematic debriefs to learn from our successes and failures. We will build a culture where people feel safe to go against the crowd and create mechanisms to challenge consensus thinking.

“Good investment decisions depend on good information. By further integrating risk and performance data into our investment processes, we aim to make better decisions,” it stated.

It will continue developing its Investment Simulator to enhance investment decisions and provide feedback to portfolio managers.

“This tool will make portfolio managers increasingly aware of their behavioural strengths and weaknesses so they better incorporate these in their decision-making,” it stated. 

Evilyn Lou of PERE also reports NBIM reveals three-pat plan to overhaul real estate strategy:

Norges Bank Investment Management – which manages the assets of the world’s largest sovereign wealth fund, Norway’s Government Pension Fund Global – is implementing a three-pronged approach to revamp its real estate strategy in a bid to improve returns generated by the asset class.

“Real estate has changed a lot in certainly the last five years in pretty foundational ways,” said global head of real estate Alex Knapp, speaking with PERE at the fund’s London office last week. “And so I think it was time to do a material update to the real estate strategy for the fund.”

Although the update is part of a broader 2026-2028 strategy shift for the overall fund, the real estate business will likely see more changes than other parts of the organization “just given the nature of the market,” noted Knapp, who joined NBIM from Houston-based manager Hines in June.

The first major component is integrating NBIM’s separate teams for listed and unlisted real estate, which together account for roughly equal proportions of the fund’s $75 billion of equity in the asset class.

The second change is broadening the fund’s private real estate strategy. Previously, NBIM’s unlisted real estate investments were geographically restricted to eight cities – London, Paris, Berlin, New York, Boston, Washington DC, San Francisco and Tokyo – along with a globally focused logistics strategy.

The geographic focus will now expand from the eight cities to the larger regions of Western Europe and North America. Meanwhile, the fund is “studying” future investments in the Asia-Pacific region. “That’s a whole separate project,” Knapp said.

While a “good location” will vary by sector, “we’re trying to still pick strong locations and believe that’s a key driver of value, but just in a much broader way, so a much broader geographic remit, and with that, a broader set of tools to invest, especially on the private side,” he said.

Whereas NBIM’s real estate investment staff previously was grouped by cities, the team will now be organized by the four main food groups of office, logistics, retail and living, as well as a “fifth plank” for niche sectors. The 43-person team, which is now concentrated in NBIM’s London and New York offices, will not be changing materially in size, Knapp added.

Additionally, NBIM will no longer be restricted from investing in private market residential, with the investor having already built large positions in the sector on the public side.

Although private residential “was historically redlined” because of reputational concerns, “we’ll be very careful who we partner with and the types of deals we get involved in, because it’s clearly a concern from some stakeholders,” Knapp said.

“But obviously it’s also worth noting that we already have lots of residential investment and that our peer set of comparable pension and sovereign funds have large residential investments as well.”

The third component is taking a more strategic view of real estate. “The fund has almost doubled in size in the last five years,” Knapp remarked. “We need to work at a higher altitude and look more at big-picture trends that are going to impact real estate over the next five to 10 years, rather than micromanaging individual buildings.”

That will call for more of an indirect approach, whereby NBIM will make platform and fund investments for the first time.

Picking both the right strategy and the right partners will be paramount, with partners needing to fill three key criteria: an operational skill set, strong alignment with NBIM and the ability to operate at a certain scale.

“We’ll be evaluating all of our partners on the same basis,” Knapp said. “We have some great existing partners. We expect to have some new relationships as well, but we’re not looking to radically expand our partner base,” given the small size of NBIM’s real estate team.

“I think what we’ve advocated is a more flexible strategy to reflect a rapidly changing world with a certain amount of volatility in it,” he said. “The starting point is, let’s enhance the pool of potential opportunities we can consider and then focus our teams on better stock selection within that broader opportunity set.”

Return enhancer

NBIM’s planned overhaul of its real estate strategy comes a month after Norges Bank submitted a letter to the Ministry of Finance underscoring how the bank’s investment focuses in the asset class – traditional sectors, a limited number of countries and cities, as well as direct investments – resulted in a portfolio negatively impacted by major changes in the market, including structural shifts in office and retail demand and traditional sectors requiring more operational management.

“This has contributed to the real estate portfolio delivering weaker returns than the equities and fixed income we have sold to finance the investments,” Norges Bank governor Ida Wolden Bache and NBIM deputy chief executive Trond Grande wrote in the letter. “Norges Bank is not satisfied with the results in real estate management, and is now making changes to the strategy for real estate.”

Over the past five years, equity management’s contribution to the fund’s relative return has been 0.31 percentage points, while fixed income management’s contribution has been 0.18 percentage points, according to the letter. In contrast, real estate management has contributed -0.13 percentage points over the same period.

“Generally, you could say that we’re transitioning from being a core investor that holds assets forever into being more of a core-plus investor, so to have a slightly shorter horizon on our investments and definitely a greater focus on whether the current portfolio will deliver return for us over the next phase or not,” explained Knapp, who had spent the last 16 years at Hines, most recently as its chief investment officer for Europe.

The investor is looking to generate excess return over the benchmark index of equities and fixed income plus a hurdle, with the goal of beating the hurdle over the medium term. “We’re trying to be a return enhancer versus the index that we’re selling to do the real estate,” he explained.

At $75 billion in assets today, NBIM’s real estate portfolio is at the low end of its 3-7 percent target range, Knapp noted. However, “we’re not pushed in any way to invest. We’re really pushed to generate return. That’s the number one focus.”

The investor therefore will look to be “more thoughtful about the return prospects” for its real estate holdings. “We’re now looking at everything, saying, ‘Well, would we buy it at today’s pricing?’ If the answer is no, we’re going to sell it,” he said.

“So there will be more cycling for sure, and what’s key to successfully exiting assets is to have realistic pricing. I think our performance will be driven by a combination of smart new investments and smart divestments as well. We’re not going to hold a building just because it’s a beautiful building in a great location. We’re going to hold it because it’s got return potential.”

Overall, Knapp expects NBIM to be a net buyer rather than seller. “What we observe is that the market has a lot of investors with capital tied up. There are probably more net sellers than net buyers in the market right now,” he said.

“We’re definitely seeing a number of parties that are looking to rebalance their own portfolio – maybe they’re downsizing a bit, maybe they’ve reached the end of a business plan. So there’s a fair amount of dealflow, for sure.”

That's a fantastic interview with Alex Knapp, former CIO of Hines in Europe. He definitely knows what he's talking about in real estate and he and his team will focus on return enhancement and acquiring great assets in a new expanded real estate portfolio.

As far as NBIM's strategy plan for 2028, CEO Nicolai Tangen didn't mince his words:

The new strategy builds on the revised plan for 2023-2025 and takes the fund’s unique attributes as its starting point: our long-term investment horizon, our scale, our people and culture, and our technology and data.

Everything we do at the fund – from how we invest to how we develop our people – is designed to support our core mandate of maximising long-term return after costs, within an acceptable level of risk.

"The strategy sets out how we will work to become the best and most respected large investment fund in the world. We look forward to putting it into action over the next three years,” says CEO Nicolai Tangen.

The strategy has five key areas: Performance, Technology, Operational robustness, People and Communications.

I would invite my readers to take the time to read Strategy 28 here.

NBIM manages Norway's Government Pension Fund Global, the largest sovereign wealth fund in the world.

The Fund consistently ranks at the top position among global pension funds and truly sets the bar in terms of transparency (Canadian pension funds also rank high).

In Real Estate which is a major focus of Strategy 28, I note the following:

We will take allocation positions to manage the fund's total risk profile. With delegated investment mandates, the fund’s total risk profile may require adjustment - even when individual portfolios are well-positioned.

We do not expect any material changes in our average risk utilisation, but our active risk-taking will vary as market conditions change. We will occasionally take allocation positions when abnormally large market dislocations create attractive opportunities. Such dislocations can occur when other investors are forced to act due to behavioural factors, regulatory requirements, or funding problems – exactly when our patient capital becomes most valuable.

The management mandate allows us to invest up to 7 percent of the fund in unlisted real estate and up to 2 percent in renewable energy infrastructure. In this strategy period, we raise the ambition level for our real asset investment strategies. We invest in real assets as part of our active management. The purpose of active management is to exploit the fund’s defining characteristics to achieve excess returns over time. We invest in real assets to maximise fund returns after costs. We believe that achieving this goal also improves the long-term trade-off between return and risk in the fund, and that the fund’s characteristics position us to achieve our goal.

As one of the world’s largest investors, we can access unlisted investment opportunities unavailable to smaller investors and negotiate favourable terms when investing indirectly. Our scale and reputation provide access to premier partners. Our long investment horizon and limited short-term liquidity needs mean that we can be patient through market cycles.

Real estate

Real estate is a large part of the overall investable market and an opportunity for us to enhance the fund’s returns. During this strategy period, we will shift from geographic concentration to sector diversification. We will to a larger extent delegate the operational management of the real estate portfolio and gradually invest more through indirect structures. We continue to view listed and unlisted real estate as complementary ways of achieving exposure to the real estate market, and our long investment horizon makes us well-suited to handle higher short-term volatility from the listed real estate portfolio.

• We will evolve from a combined strategy to a fully integrated strategy. For any desired real estate exposure, we will systematically evaluate whether listed or unlisted real estate provides the most attractive risk-adjusted return.
• In unlisted markets, we will continue to invest in large, traditional sectors such as office and logistics, but will gradually invest more in newer and higher growth sectors.
• We will invest more through indirect structures to get access to specialised strategies and operational capacity. However, most of the unlisted portfolio will continue to be directly invested with partners by the end of the strategy period. 

Anyway there is a lot more so please take the time to read Strategy 28 here.

Below, NBIM CEO Nicolai Tangen sits down with David Rubenstein, founder and chairman of the Carlyle Group and host of the David Rubenstein Show. They explore what makes truly great investors, why going against conventional wisdom matters, and the critical importance of humility in business and leadership. Great interview, take the time to watch it.

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

Friday:
• No major economic releases scheduled.

"Fraud On Epic Scale": Do Kown Gets 15 Year Prison Sentence For $40BN Terraform Fraud

Many will point to the collapse of the Terra ecosystem in May 2022 as the trigger for the last crypto crash/winter which eventually culminated with the collapse of FTX. And moments ago, a judge added a prison sentence for the mastermind behind it all. 

Terraform Labs co-founder and onetime fugitive Do Kwon, who in August pled guilty over one of the largest frauds in crypto history, was sentenced to 15 years in prison for the fraud that led to the company’s $40 billion collapse in 2022 and triggered a series of cascading crises in the cryptocurrency world, Bloomberg reported.

Kwon, 34, was sentenced at a hearing Thursday in New York by US District Judge Paul Engelmayer, capping US efforts to prosecute the crypto entrepreneur after a legal fight to extradite him from Montenegro, where he was imprisoned for using a fake passport.

He still faces fraud charges in his native South Korea.

“This was a fraud on an epic generational scale,” Engelmayer told Kwon. “In the history of federal prosecutions very few cases have caused more monetary harm than you did.”

Prosecutors had sought a 12-year sentence, saying Kwon’s lies to customers contributed to the “crypto winter” of 2022 and the failure of Sam Bankman-Fried’s FTX (who is also in prison for a similar massive fraud).

Kwon’s lawyers asked for no more than five years, arguing his crimes were motivated not by greed but a desire to prop up Terraform’s TerraUSD stablecoin. The judge called that request “wildly unreasonable.”

Kwon's prison term comes at a time when the Trump admin has weakened enforcement in crypto markets. On Oct. 23, Trump pardoned Binance founder Changpeng Zhao, who was convicted of failing to maintain an effective anti-money laundering program at the world’s largest cryptocurrency exchange.

Tyler Durden Thu, 12/11/2025 - 17:18

Pritzker Signs Law Limiting Federal Immigration Enforcement In Illinois

Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

Illinois Gov. JB Pritzker signed a bill into law on Dec. 9 that will limit federal immigration enforcement in the state, including in its courthouses and hospitals.

Illinois Gov. JB Pritzker speaks during a press conference with Texas Democrats at the International Union of Painters and Allied Trades union hall in Aurora, Ill., on Aug. 5, 2025. Scott Olson/Getty Images

“With my signature today, we are protecting people and institutions that belong here in Illinois,” Pritzker said in a statement. “Dropping your kid off at day care, going to the doctor, or attending your classes should not be a life-altering task.”

HB 1312, which went into effect immediately, allows people to take legal action against law enforcement officers they believe violated their constitutional rights during civil immigration operations in the state.

The legislation also bars civil arrests in and around courthouses for anyone attending certain state court proceedings and provides a pathway for affected individuals to seek damages for false imprisonment.

Hospitals are required under the new law to restrict the release of protected health information and implement policies governing interactions with law enforcement agents, according to the governor’s office.

The bill also prohibits schools and child care centers from disclosing the actual or perceived immigration status of students, employees, or anyone associated with them to third parties unless required by law.

The National Immigrant Justice Center (NIJC) welcomed the governor’s move to sign the bill, calling it a “necessary legislative step” to protect people’s constitutional rights.

“The fear of being abducted by federal immigration agents when attending a hearing in state court is disrupting people’s ability to engage with the justice system for critical matters, such as seeking a protection order in a domestic violence situation or addressing a traffic ticket,” Cecilia Mendoza, NIJC associate director of government relations, said in a statement.

Homeland Security Department (DHS) spokesperson Tricia McLaughlin said Pritzker violated the U.S. Constitution and his oath of office when he signed the bill into law.

The bill comes as the Trump administration has expanded immigration enforcement in Illinois, sparking protests near an Immigration and Customs Enforcement (ICE) facility in Chicago, which prompted President Donald Trump to deploy hundreds of National Guard troops to protect ICE personnel and facilities. A federal judge later issued an injunction to temporarily block the deployment.

According to a DHS statement on Dec. 8, Illinois released about 1,768 criminal illegal immigrants back into the community this year despite federal detainer requests. Those who were released were convicted of various crimes, including homicide, burglary, serious drug offenses, weapons offenses, and sexual predatory offenses.

This follows ICE Director Todd Lyons’s September letter to Illinois Attorney General Kwame Raoul asking him to honor ICE arrest detainers for criminal illegal immigrants in state custody.

The detainers require the state to notify ICE when a criminal illegal immigrant is due for release to ensure that the person can be safely transferred into federal custody.

In its Dec. 8 statement, the DHS said Raoul’s office did not respond.

Jill McLaughlin and Reuters contributed to this report.

Tyler Durden Thu, 12/11/2025 - 17:00

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

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

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

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

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

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

2.5 Million Illegal Immigrants Deported Under Trump Admin: DHS

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

More than 2.5 million illegal immigrants have left the United States under the Trump administration, a “record-breaking achievement” in a year, the Department of Homeland Security (DHS) said in a Dec. 10 statement.

U.S. Customs and Border Protection security agents guide illegal immigrants onboard a C-17 Globemaster III assigned to the 60th Air Mobility Wing for a removal flight at Fort Bliss, Texas, on Jan. 23, 2025. Dept. of Defense photo by U.S. Army Sgt. 1st Class Nicholas J. De La Pena

The 2.5 million figure includes more than 605,000 individuals deported as part of DHS enforcement operations and around 1.9 million illegal immigrants who have voluntarily self-deported since January.

“Since January 20, DHS has arrested more than 595,000 illegal aliens,” DHS Assistant Secretary for Public Affairs Tricia McLaughlin said. “Illegal aliens are hearing our message to leave now. They know if they don’t, we will find them, we will arrest them, and they will never return,” the department said.

DHS encouraged illegal immigrants to use the CBP Home app, which allows them to notify the federal government of their intent to depart the United States willingly. Those who self-deport via the app get $1,000 and a free flight home.

According to DHS, it has prioritized the removal of the “worst of the worst” criminal illegal immigrants as part of the administration’s push to ensure law and order in the country.

The rapid decline in the illegal immigrant population is showing effects nationwide, such as a “resurgence in local job markets,” DHS said. In October, 12,000 jobs were added to the U.S. economy, which followed 431,000 additions in September.

President Donald Trump recently commended DHS Secretary Kristi Noem for a closed, secure border.

“We have a border that is the best border in the history of our country,” he said.

In a Dec. 10 post on X, Noem said that DHS’s accomplishments this year under Trump have been “historic.”

“None of it would be possible without the Homeland Security Advisory Council,” she said. “The men and women of this council provide their experience and insights to help deliver seven consecutive months of zero illegal entries, a revitalized Coast Guard, and more than 2.4 million deportations.”

The council provides the DHS secretary with advice and recommendations on homeland security issues and comprises leaders from state and local governments, academia, the private sector, and first responder communities.

However, the Trump administration’s enforcement against illegal immigrants has faced pushback from lawmakers.

Earlier this month, a group of lawmakers introduced the Dream Act of 2025, seeking to allow noncitizens who do not have lawful status and were brought to the United States as children to potentially qualify for lawful permanent residence and citizenship provided they meet certain work, military, or education requirements, according to a Dec. 4 statement from the office of Sen. Alex Padilla (D-Calif.).

These individuals, referred to as Dreamers, must pass security and law enforcement background checks while proving proficiency in the English language and possessing knowledge of American history.

They must not have committed a felony or other serious crimes and should not pose a threat to the United States, the statement said.

“For decades, gridlock and partisan politics have forced Dreamers to live in limbo. And under the Trump Administration, they now have to fear being swept up in Trump’s cruel mass deportation campaign at any moment,” Padilla said.

Nearly 2 million “Dreamers” are estimated to live in the United States.

Meanwhile, the Trump administration’s policies are continuing to be a robust barrier against the uncontrolled influx of illegal immigrants.

In October and November, there were 60,940 total encounters with illegal immigrants by border patrol agents nationwide, which is the “lowest start to a fiscal year ever,” Customs and Border Protection (CBP) said in a Dec. 4 statement.

Since Trump took office, nationwide apprehensions have averaged less than 10,000 per month, which is a “level of deterrence unmatched in modern border history,” CBP said.

“For the seventh consecutive month, U.S. Border Patrol released zero illegal aliens into the United States. Every individual apprehended was processed according to law—a milestone unmatched in modern border history,” it said.

On Dec. 8, DHS announced the launch of a new “Worst of the Worst” webpage on its website that details information on criminal illegal immigrants arrested by the department under the Trump administration.

Americans can search through data of criminal illegal immigrants who have been arrested from all 50 states with criminal histories including homicide, rape, assault, child molestation, drug trafficking, armed robbery, and battery.

According to DHS, 70 percent of Immigration and Customs Enforcement (ICE) arrests are of criminal illegal immigrants who have been charged or convicted of a crime in the United States.

“As the media whitewashes the facts, day in and day out, our brave men and women of ICE risk their lives for the American people. Americans don’t have to rely on the press for this information—with this transparent tool, they can see for themselves what public safety threats were lurking in their neighborhoods and communities,” McLaughlin said.

Tyler Durden Thu, 12/11/2025 - 16:20

Asset Purchases Begin: Fed To Buy $8.2BN In Bills Friday; Full Monthly Schedule Released

It's only appropriate that one day after Powell unveiled QE, pardon NOT QE, pardon Reserve Management Purchases (as we said he would a month ago), that the New York Fed would do what it did for the entire duration of QE 1, QE 2, QE 3 and so forth, and publish the POMO, pardon NOT POMO schedule of daily asset purchases. But since it's Bills and not long-duration Notes or Bonds, it's not QE... or some banana logic. 

As shown in the schedule below and as was first announced yesterday, the Fed plans to buy $40 billion of T-bills, spanning two sectors, over the period beginning Dec. 12 and ending Jan. 14 for "reserve management purchases." This includes $8.2 billion on Friday (full schedule here).

The central bank also plans to buy another $14.4 billion of T-bills as part of its plan to reinvest all principal payments from its agency securities.

Earlier in the day, Barclays published a note estimating that the Fed could wind up buying close to $525 billion of T-bills in 2026 from a previous forecast of $345 billion, with net issuance to private investors estimated at just $220 billion from $400 billion previously. 

Separately, JPMorgan and TD Securities also now see the central bank absorbing a bigger amount of debt. Bank of America anticipates the Fed may have to keep an increased pace of purchases for longer to add enough reserves and stabilize money market rates. 

Echoing verbatim what we said one month ago, Wall Street strategists said the measures will help alleviate pressures that have been building up for months while the Fed was shrinking its holdings. They expect the purchases will act as a tailwind for swap spreads and SOFR-fed funds basis trades. And, judging by the market which will close at an all time high on Thursday, stocks and precious metals (the crypto algos may need a reboot to figure out what is going on).

A closer look at what Bank of America's Mark Cabana had to say:

• There is risk of maintaining higher pace of purchases for longer as RMPs will only add back $80 billion of cash above natural liability growth by mid-April while BofA expects the Fed will need to add back $150 billion to achieve ideal outcome (as a reminder, Cabana initially predicted $45BN in monthly Bill purchases).
• Fed will shift to UST coupons out to three years if they perceive bill investors are “being adversely affected” to limit their displacement. It will be very difficult for the pro-Fed commentariat to pretend this is NOT QE (again).
• Balance sheet actions reinforce core spread views: long January and 1y1y SOFR-fed funds, long 2-year asset swap spreads

On Wednesday, trading in short-term rate futures jumped and two-year swap spreads widened to their highest levels since April, a sign of less stress in the short-term market.

Tyler Durden Thu, 12/11/2025 - 16:02

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

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

IEA Trims Oil Glut Forecast as Supply Surge Halts

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

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

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

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

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

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

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

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

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

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

OPEC Holds Firm on Bullish Oil Demand Outlook for 2026

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

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

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

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

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

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

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

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

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

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

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

Zelensky Floats Holding Referendum On Giving Up Land For Peace

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

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

Via Reuters

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

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

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

Ceding territory by vote? WSJ continues...

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

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

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

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

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

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

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

White House on Russia-Ukraine:

Trump is extremely frustrated with both sides of this war.

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

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

— Clash Report (@clashreport) December 11, 2025

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

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

Authored by Tom Ozimek via The Epoch Times,

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

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

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

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

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

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

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

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

Fatal Crashes Prompt Wider Crackdown

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

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

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

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

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

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

States Face Pressure, Funding Loss

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

According to some more of the latest developments via Newsweek:

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

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

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

— Michael Tracey (@mtracey) December 7, 2025

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

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

Impeachment Articles Filed Against Robert F. Kennedy Jr.

Authored by Jonathan Turley,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A brief excerpt:

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

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

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

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

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

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

There is much more in the article.

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

Authored by Steve Watson via Modernity.news,

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

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

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

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

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

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

— Eric Daugherty (@EricLDaugh) December 9, 2025

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

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

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

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

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

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

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

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

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

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

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

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

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

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

— Eric Daugherty (@EricLDaugh) December 9, 2025

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

— Homeland Security (@DHSgov) April 15, 2025

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

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

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

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

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

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

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

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

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

Handout photo from Japan's Ministry of Defense 

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

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

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

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

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

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

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

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

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

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

— Arnaud Bertrand (@RnaudBertrand) December 11, 2025

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

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

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

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

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

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

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

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

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

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

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

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

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

Trump:

Zelensky has to be realistic.

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

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

— Clash Report (@clashreport) December 10, 2025

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

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

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

Affordability Crisis: Challenging The Poverty Line

Authored by Michael Lebowtiz via RealInvestmentAdvice.com,

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

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

The Poverty Line

Per Michael Green:

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

The poverty line.

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

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

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

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

I felt sick.

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

The 1963 Poverty Line Benchmark

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

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

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

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

Orshanky’s Poverty Line Is Outdated

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

• Housing costs as a percentage of income rose significantly.

• Cell phones didn’t exist.

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

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

• He also notes rising college and transportation costs.

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

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

Michael Green’s punchline:

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

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

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

It tells you we are measuring starvation.

Green’s Data Analysis

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

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

Using conservative, national-average data:

Childcare: $32,773

Housing: $23,267

Food: $14,717

Transportation: $14,828

Healthcare: $10,567

Other essentials: $21,857

Required net income: $118,009

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

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

Hedonics

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

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

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

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

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

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

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

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

Mathematical Valley

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

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

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

Green’s Summary

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

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

Arguing Against Green

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

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

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

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

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

Our Take- Summary

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

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

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

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

 

 

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

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

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

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

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

-Prof Jeremy Siegel, May 16, 2020

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

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

Why bring all of this up now?

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

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

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

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

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

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

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

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

-Prof Jeremy Siegel, May 16, 2020

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

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

 

 

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

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

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

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

The Least Bad Choice (September 28, 2023)

Revisiting Greedflation (November 16, 2023)

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

 

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

A new measure of poverty that accounts for health care needs and resources being developed by the U.S. Census Bureau—the Health Inclusive Poverty Measure (HIPM)—shows that poverty affects even more people in the U.S. than the typical statistics estimate. This is particularly true for people of color. This is primarily a function of the limited access to health insurance that Black and Hispanic communities endure. Black and Hispanic individuals, for example, are more likely than peers to be uninsured and to rely on Medicaid for coverage. This is why we warned about the uneven impact of cuts to the program early this year.

Policymakers are currently debating the merits surrounding the Affordable Care Act (ACA) marketplace subsidies that help more than 20 million people afford health insurance and kept nearly 2 million people out of poverty in 2024. These subsidies were introduced through the American Rescue Plan and extended through the Inflation Reduction Act; they increase the accessibility of health insurance by subsidizing the amount eligible individuals pay for the “benchmark”—i.e., the second-lowest tier plan on a sliding scale with income—such that most individuals making near-poverty wages can access these plans for free.

Allowing the ACA premium enhanced tax subsidies to expire will increase health inclusive poverty across groups, but the impact will be felt most heavily by those for whom accessing health insurance was already precarious. These households are disproportionately Black, brown, and working class because those households sit at the margin of health insurance affordability under normal circumstances and have seen the largest increases in insurance rates during the period when the enhanced tax credits have been available.

Communities of color trying to obtain health coverage now face attacks on two fronts. The more economically vulnerable among them face a more financially constrained Medicaid program with more stringent work requirements, purposefully meant to reduce access to health care. And those fortunate enough to afford care via the ACA marketplace now face the rising prospect of being priced out of coverage if the credits are allowed to expire this month. If the subsidies are allowed to expire, those who previously had free access to the benchmark ACA plans would lose it. The poorest eligible families would see the largest percentage increase in their annual health insurance premiums, while families with higher incomes would experience a higher dollar amount increase.

The end result of this two-pronged attack on public health, not to mention the dismantling of the country’s public health infrastructure that the Trump-Vance administration has carefully orchestrated since coming into office, will be an increase in the number of uninsured individuals, higher economic insecurity for families who need health care but can’t afford coverage, and increased poverty. These forces, as we illustrate below, will affect people of color unevenly.

Health inclusive poverty reveals deeper economic pain than monetary poverty—the attack on Medicaid and health subsidies will make things worse

More than 50 million people struggled with health inclusive poverty last year. This means more than one in seven (14.8%) individuals grappled with economic insecurity because they lack the resources to meet their health and broader needs (see Figure A). 

Figure A

The HIPM produced by the U.S. Census Bureau researchers broadens the basket of goods and services that families need to maintain an adequate standard of living beyond the two measures of poverty that the Bureau publishes annually. These two measures include the Official Poverty Measure (OPM) and the Supplemental Poverty Measure (SPM). While the SPM goes further than the OPM to account for geographic differences in housing costs, tax credits, and government benefits (like SNAP), it doesn’t incorporate health care benefits, subsidies, and expenses like the HIPM. The HIPM therefore enables us to examine the extent to which access to health insurance and key health care subsidies impact the standard of living of individuals and families.

As observed in Figure A, health inclusive poverty has exceeded monetary poverty in the U.S. for the greater part of the last decade. Last year, for example, the prevalence of health inclusive poverty was more than 4 percentage points higher than the incidence of poverty measured by the OPM, and about 2 percentage points higher than the SPM. Access to health insurance serves as a key driver of the differences we observe between estimates of monetary and health inclusive poverty. This is because uninsured individuals have zero health insurance resources to offset the health care needs that the health inclusive measure of poverty introduces to the original poverty thresholds under the SPM.

Recent policy choices under the Turmp-Vance administration are likely to further widen the gap between these measures. The Republican Budget Reconciliation bill is projected to increase the number of uninsured individuals by more than 10 million in the years ahead, and the expiration of health care subsidies under the Affordable Care Act marketplace will quadruple the average net premiums for the more economically vulnerable and increase the number of uninsured individuals by nearly 5 million in 2026.

In 2024 alone, Medicaid kept about 15 million people out of poverty and health care subsidies that made health insurance more affordable for people in the ACA marketplace kept nearly 2 million people out of poverty. Without these support systems, about 17 more million people would have fallen below the poverty line in 2024, pushing the poverty rate from 14.8% to around 19.8%.

Health inclusive poverty affects people of color disproportionately

Black, Hispanic, and American Indian and Alaska Native (AIAN) individuals are more than twice as likely as their white peers to face economic hardship due to insufficient resources to meet their health and material needs. Last year, more than one in five Black, Hispanic, and AIAN people fell below the health inclusive poverty line (see Figure B).

Figure B

While the prevalence of health inclusive poverty exceeds that of monetary poverty for all racial and ethnic groups, the divide is starkest for Black, Hispanic, and AIAN individuals (as shown in Figure B). Compared with their non-Hispanic white peers, the percentage point difference between health and monetary poverty is more than twice as large for Black individuals and more than five times as large for Hispanic and AIAN individuals. These disparities are driven by unequal access to health insurance, as the uninsured rate is highest for Hispanic, AIAN, and Black individuals. More than one in six Hispanic and AIAN people, for example, lack access to health insurance. These groups are more than three times as likely as their white peers to lack access to health insurance. Slightly narrower, but just as harmful, disparities affect Black individuals. In 2024, more than 3.5 million Black people struggled without access to health insurance.

Statistically meaningful differences between both poverty measures are largest in Southern states, where communities of color make up a relatively larger share of the population. States where social and economic policy have historically been rooted in racism are also less likely to have expanded access to Medicaid. Census researchers find that states with expanded access to Medicaid coverage have health inclusive poverty estimates that are more than 2 percentage points lower than states without expanded access.

Black and brown people, as well as the working class and uninsured, skip or postpone needed health care due to cost

The U.S. health care system is designed such that access to adequate and timely care is based on a person’s ability to pay and often based on whether they are employed. Access to health insurance mediates access to health care, and employment is a major mediating factor for access to both health insurance and the income necessary to pay any out-of-pocket costs associated with care. In greed-driven health care systems like ours, poorer workers and their families often forgo or delay treatment that could improve or extend their lives because they can’t afford it.

Black and brown households are more likely to be uninsured, to report difficulties with reporting health care costs, and to report skipping or postponing needed health care within the past year than their white and Asian counterparts. Lack of access to adequate and timely care has long-term economic and health implications for Black and brown families and communities. Policies that threaten the already tenuous connection that marginalized groups have to the health care system, e.g., allowing the ACA premium tax credits to expire and restricting access to Medicaid, will contribute to the persistence of economic and health inequities across race and class.

HIPM underscores the economic and public policy imperative of expanding health care access to prevent poverty

The HIPM captures the impact of overlapping economic and public health policies—or lack of effective policies—on households’ exposure to poverty. It shows how policies like Medicare, Medicaid, and expansions to the Affordable Care Act protect families from financial distress and uncertainty. Racial and geographic differences in the HIPM highlight the variation in adequacy different groups experience across our patchwork health care system. It also helps us identify the impact that recent and ongoing policy choices will have on public health and equity.

The federal cuts to Medicaid that President Trump signed into law this summer, as well as the potential expiration of ACA health insurance subsidies, will disproportionately impact communities of color. Cuts to Medicaid will hurt Black and Hispanic adults and children most, as they are more likely than their peers to rely on Medicaid and CHIP for health insurance. The potential expiration of ACA subsidies will undoubtedly compound health inequities, pushing more than 2 million people of color into ranks of the uninsured. With both private and public options for health insurance falling further out of reach for the most disadvantaged, the administration’s attack on the country’s public health infrastructure will worsen health outcomes, widen disparities, and deepen the growing economic vulnerability of families struggling under Trump’s affordability crisis.