In a year in which they endured chronic understaffing, 60-hour weeks, uneven shifts and even having to work without a paycheck for a stretch, many US air traffic controllers are re-evaluating their careers, with a growing number chasing happiness on the other side of the world — in Australia. 

According to a Wall Street Journal report on the phenomenon, these controllers aren’t chasing more money. Indeed, some of the controllers who’ve taken the leap were happy to take a lower salary in exchange for less on-the-job stress and a better work-life balance. One of them is Austin Brewis, a 29-year-old who gave up a $145,000 salary at an air traffic facility in Illinois for a $137,000 one in Sydney.

Brewis told the Journal that 60-hour workweeks had worn him down. More than 41% of US controllers work 10 hours a day for six days straight, according to the National Air Traffic Controllers Association. It’s not just the high number of hours — Brewis worked them in staggered schedules that have start and finish times changing from day to day. Chasing three-day breaks to enjoy meaningful relief from the heavy hour-load, many controllers take a “2-2-1” schedule. As the Journal explained in an earlier article: 

Controllers work two swing shifts, two day shifts, and one midnight shift. The second day shifts ends at 2 p.m. and the subsequent midnight shift begins at 10 p.m., just eight hours later. Such a schedule disrupts circadian rhythms, creating fatigue on the midnight shift…. 2-2-1 has long been called “the rattler,” since it can come back and bite the controller, degrading his performance. 

“That grinds you down after years of doing it,” Brewis said. The contrast Down Under is stark — with the average Australian controller’s work-week spanning just 36 hours. Heightening the attraction for younger controllers is a guarantee of having some weekends off each year. Brewis said he’d have had to put at least 10 years under his belt before he’d routinely have weekends off in America, where that pleasure is driven by seniority. 

“It’s absolutely disgusting how much better their lifestyles are than ours,” air traffic controller Chris Dickinson told the Journal. After 13 years controlling US airspace, he’s now working in Sydney. He said concerns he had about anxiety or depression have evaporated, and he’s shed 20 extra pounds too. 

In an ominous indication that Australia could become a chronic driver of controller attrition in America, when Brewis stepped into an Australian classroom for his entry training earlier this year, he found that 8 of his 10 classmates were Americans. Government-owned Airservices Australia says it isn’t setting out to poach Americans from the FAA. However, of 100 controllers it expects to bring on board this year, 36 are Americans. “Qualified controllers are welcome to apply from any country,” a spokesman said. 

While those kind of numbers aren’t striking in the context of a US controller force that exceeds 13,750, the chronically-undermanned FAA doesn’t need any more head-count headwinds. By the National Air Traffic Controllers Association’s math, the FAA is operating with a 3,800-controller shortage. 

That’s not just a burden for air traffic controllers and FAA bureaucrats, it’s a worrisome state of affairs for the flying public, which has seen too many scary headlines about disasters, near-disasters and mishaps in recent months: 

• Reagan Tower Reportedly Understaffed When Army Helicopter Collided With Passenger Jet
• Another Near-Disaster At DC Airport: Delta Jet Narrowly Misses USAF T-38
• Mapping Every Understaffed Air Traffic Control Tower In The US

Authored by Emel Akan via The Epoch Times (emphasis ours),

WASHINGTON—Two more members of conservative think tank The Heritage Foundation’s Board of Trustees, Shane McCullar and Abby Spencer Moffat, resigned Dec. 16, citing concerns over the organization’s direction and approach to combating anti-Semitism.

In a statement, Moffat said that leaving the board was a difficult but necessary decision.

“Heritage’s handling of recent challenges reveals a drift from the principles that once defined its leadership,” she said.

“When an institution hesitates to confront harmful ideas and allows lapses in judgment to stand, it forfeits the moral authority on which its influence depends.”

Moffat is recognized as one of the most powerful women in philanthropy and has been a major donor to the think tank through the Diana Davis Spencer Foundation.

In 2023, the foundation announced a $25 million commitment, one of the largest gifts in the think tank’s 50-year history.

McCullar raised similar concerns in his statement.

“No institution that hesitates to condemn anti-Semitism and hatred—or that gives a platform to those who spread them—can credibly claim to uphold the vision that once made the Heritage Foundation the world’s most respected conservative think-tank,” McCullar said.

“I leave with respect for the Heritage Foundation’s past, but I cannot support the course it has chosen for its future.”

Another board member, Robert P. George, a Princeton University professor, resigned last month, citing the same reason.

The controversy erupted after Heritage President Kevin Roberts defended Tucker Carlson’s interview with controversial live streamer Nick Fuentes, known for his anti-Israel and anti-Semitic views.

In his Oct. 30 video commenting on Carlson’s interview, Roberts said that “Christians can critique the state of Israel without being anti-Semitic.”

Roberts also said that the think-tank would not bow to the “venomous coalition” that is attacking and trying to “cancel” Carlson over the Fuentes interview.

Roberts later offered an apology, expressing his regret for the video he posted.

“I made a mistake, and I let you down, and I let down this institution. And I am sorry for that. Period. Full Stop,” Roberts said in a video from the foundation’s staff meeting, which The Washington Beacon first published.

“I didn’t know much about this Fuentes guy—still don’t, which underscores the mistake,” Roberts said.

Roberts told staff that he was willing to resign but felt a “moral obligation” to address the situation.

During an interview on ABC’s This Week with ABC’s Jonathan Karl on Sunday, Sen. Rand Paul of Kentucky delivered a blunt warning about the administration’s handling of the Epstein records, echoing concerns raised by Rep. Thomas Massie (R-Ky.), who has been relentless on the issue.

Massie forced the release vote and has accused Attorney General Pam Bondi of violating the law by slow-walking and limiting disclosure. 

Paul did not dispute the core of that argument.

Instead, he went further, laying out exactly why half-measures on Epstein are political poison.

“I’ve supported transparency on the Epstein files from the beginning,” Paul said. “I’ve voted repeatedly to release them. I think it’s a good idea.”

Paul explained why that approach is doomed to fail.

“I think that trust in government is at a low ebb, and that people need to trust that justice is the same whether you’re rich or poor,” he said.

“And people tend to believe that some rich people got off scot-free in this — in the Epstein case, the Epstein files.”

 Despite the Democrats’ attempts to weaponize the release of the files against Trump, the fact remains that the Biden administration sat on the files for four years—a decision that former Vice President Kamala Harris defends—despite endless rhetoric about transparency. Trump returned to office promising real transparency, and even Trump’s allies believe the administration has failed to live up to its promise fully.

Paul made clear that the administration’s fundamental mistake came when officials hyped the release and then appeared to back away once the spotlight intensified.

“I think it’s a big mistake,” Paul said.

“Look, the administration has struggled for months and months with something they initially ginned up and then sort of tried to tamp down.”

 Paul warned that partial disclosure guarantees prolonged political fallout.

“So, any evidence or any kind of indication that there’s not a full reveal on this, this will just plague them for months and months more,” he said.

He’s right. Democrats have been insinuating for months that the Epstein files would somehow incriminate Trump, despite zero evidence. 

Paul offered simple advice that should not require a Senate seat to understand.

“So, my suggestion would be — give up all the information, release it,” he said.

“What’s going to happen to people if they don’t? That will play out over time. But my suggestion to them is be transparent and release everything the law requires of you.”

When Trump signed the Epstein Files Transparency Act, and the documents failed to deliver the left’s long-promised bombshell, Democrats pivoted to conspiracy theories and bureaucratic excuses. For example, Democrats pounced when a photo from the Epstein files was briefly removed from the online cache of Epstein-related material. This led to conspiracy theories that the Department of Justice was trying to protect Trump. 

In an appearance on NBC’s Meet the Press, Deputy Attorney General Todd Blanche discussed the photo and the reason for the redactions in the files.

Blanche explained the removal had “nothing to do with President Trump” and was instead prompted by concerns over victim privacy after officials realized the images contained identifiable women. He stressed that DOJ policy allows victims, their lawyers, or advocacy groups to request that any document or photo identifying them be taken down and reviewed, a process he said explained the temporary disappearance of the materials. 

“Well, you can see in that photo, there’s photographs of women,” Blanche said. “And so we learned after releasing that photograph that there were concerns about those, about those women, and the fact that we had put that photo up. So we pulled that photo down.”

Blanche also noted that numerous photos of Trump with Jeffrey Epstein have long been public, and that Trump himself has acknowledged socializing with Epstein in the 1990s and early 2000s before cutting ties with him years before Epstein’s 2006 arrest. Given that history, Blanche dismissed as “laughable” the notion that the department would selectively hide a single image to protect the president when “dozens” of similar photos are already in circulation. 

.@DAGToddBlanche: “The absurdity of us pulling down a photo — a single photo — because President Trump was in it is laughable, and the fact that everybody is trying to act like that’s the case is a reflection of their true motivation.” pic.twitter.com/9u7ZjgL4m7

— Rapid Response 47 (@RapidResponse47) December 21, 2025

Democrats have failed to produce a promised “smoking gun” linking Trump to Epstein’s crimes despite years of access to the files under the Biden administration, and are now seizing on procedural moves in the document release to sustain conspiracy theories. Nevertheless, if Republicans want to prove they mean what they say, the path forward is obvious. Release everything required by law. Let the facts land where they may. The longer Washington drags its feet, the louder the suspicion grows, and the harder it becomes to argue that this time is different.

Authored by Troy Myers via The Epoch Times (emphasis ours),

The U.S. Department of Justice (DOJ) is appealing the dismissal of a pair of criminal cases against New York Attorney General Letitia James and former FBI Director James Comey, according to new court documents filed on Friday.

James was indicted in October by a grand jury with charges of bank fraud and making false statements to a financial institution. Comey was charged in September with lying to and obstructing Congress during his testimony in 2020 about the FBI’s investigation into false claims of ties between President Donald Trump’s 2016 campaign and Russia.

Both had pleaded not guilty, and their cases were thrown out in late November.

The newest appeals by the DOJ mark the latest move in what’s been a series of unsuccessful legal actions taken against the New York attorney general specifically.

James’s original case was dismissed in late November after U.S. District Judge Cameron Currie ruled that former Trump lawyer Lindsey Halligan’s appointment by the president as interim U.S. attorney for the Eastern District of Virginia was unlawful.

The judge tossed Comey’s case for the same reason that Halligan’s appointment violated laws restricting the DOJ from naming top prosecutors without a Senate confirmation. Halligan had presented Comey’s case to a federal grand jury by herself five days before the statute of limitations would expire on the former FBI director’s testimony he gave to Congress.

In Currie’s Nov. 24 decision, she wrote both James and Comey’s cases were a “unique, if not unprecedented, situation where an unconstitutionally appointed prosecutor” used powers that she “did not lawfully possess.”

The DOJ vowed to continue pursuing charges.

Since the case was dismissed, DOJ prosecutors attempted twice this month to secure a new indictment against James, but a grand jury refused to bring charges both times. The New York official has repeatedly claimed the prosecution against her is “baseless.”

In the latest legal filings, the DOJ is appealing James and Comey’s case dismissals, along with several other actions, including the judge’s decision that found Halligan’s appointment and her signing of the indictments unlawful.

James’s indictment alleged that she lied about her plans for a Virginia home, for which she obtained loan terms that would have saved her approximately $19,000 over the life of the loan. Her lawyer said the indictments against James were a “mockery of our justice system” and accused the president of “political vendetta.”

The Justice Department did not immediately respond to a request for comment on the appeals.

The attorneys for both Comey and James also did not respond to a request for comment on the latest development in their cases.

This visualization, via Visual Capitalist’s Bruno Venditti, shows the share of people across 25 countries who believe that “most people can be trusted,” offering a snapshot of how trust varies around the world.

The data for this visualization comes from the Pew Research Center. It is based on nationally representative surveys of more than 37,000 adults conducted in early 2025.

High Trust in Northern Europe

Northern European countries dominate the top of the ranking. Sweden leads the list, with 83% of respondents saying most people can be trusted. The Netherlands follows closely at 79%, while Canada and Germany both exceed 70%.

These countries tend to have strong institutions, low corruption, and robust social safety nets. High levels of trust make cooperation easier, reducing friction in economic and civic life.

Divided Views in Major Economies

Several large, high-income economies fall closer to the middle of the distribution. In the United States, 55% of people say most people can be trusted, while 44% say they cannot. The UK, Japan, and South Korea show similar splits, with trust still outweighing distrust, but by narrower margins.

Low Trust in Many Middle-Income Countries

Trust levels are substantially lower across most middle-income countries in the survey. Turkey ranks last overall, with just 14% saying most people can be trusted. Mexico, Kenya, and Brazil also report trust levels below 25%.

In these countries, respondents are far more likely to say that most people cannot be trusted. Pew notes that lower income levels and less access to education are closely linked to reduced trust. Economic insecurity and weaker institutions may make people more guarded in their interactions.

If you enjoyed today’s post, check out How Quality of Life Has Changed in 30 Countries, According to Citizens on Voronoi, the new app from Visual Capitalist.

If you thought the alleged Medicaid fraud in Minnesota by Somalis, which federal prosecutors say could reach $9 billion, was insane, wait until you read the latest report from The Maine Wire: the head of a local nonprofit is accused of lashing out at a local journalist over an investigation, while members of his family allegedly put a bounty on the head of a journalist in Somalia for sharing the reporting.

Related note: this picture has never appeared in one of the major newspapers in Maine. I’m not sure if any other outlet has published it. pic.twitter.com/dVQ2j1cAgc

— Steve Robinson (@SteveRob) December 21, 2025

Earlier this month, Abdullahi Ali, the Executive Director of Health Services contractor Gateway Community Services, was accused of ripping off taxpayers.

Public forensic investigation into Gateway Community Services has revealed this… 

NewsNation spoke with a whistleblower who spilled the beans: false records were filed for services that were never provided…

A former Gateway employee, Christopher Bernardini, said the nonprofit was reimbursed with tax dollars from Maine’s Medicaid program and later with federal tax dollars from the Paycheck Protection Program.

While heading up the nonprofit in Maine, Ali was also running for President of Jubbaland in Africa. He boasted to a Kenyan media outlet about how he helped raise funds for the Jubaland Somali army to buy guns and bullets.

Here’s another video of Medicaid mogul Abdullahi Ali, a top ally of Gov. Janet Mills and Shenna Bellows, talking about how he plans to use the militia he bankrolled in southern Somalia.

Gateway Community Services said it was racist to describe him as a “wannabe warlord.” pic.twitter.com/dkhbGgzROl

— Steve Robinson (@SteveRob) December 20, 2025

Main Wire’s Steve Robinson pointed out that Ali “threatened to murder a journalist in Somalia who shared our reporting.”

Robinson continued:

Gateway Community Services CEO Abdullahi Ali yesterday attacked me personally, and now his fellow clan members — his son and cousin — are threatening to murder a journalist in Somalia who shared our reporting. Why does Gov. Janet Mills continue to fund this organization with MaineCare dollars and no-bid contracts? And why are Democrats cravenly smearing the character of anyone who exposes fraud or calls out corruption?

Abdullahi Ali’s son and cousin are openly placing bounties on a Somali journalist’s head and calling for his killing. All because they’ve helped shine light on Ali’s migrant agency over-billing MaineCare (~$800k per DHHS) and the fraud allegations made against his company. Ali’s former employee has made credible and detailed allegations of systematic fraud. This employee has shown great courage by revealing how Ali allegedly directed his company to invent fake MaineCare claims and defraud the taxpayers of Maine.

Ali has never denied these allegations. Instead he has attacked me. Now his allies in Jubaland are calling for violence against journalists for exposing the truth, while his allies in Maine turn a blind eye or smear the reporters and politicians exposing fraud and corruption.

Attorney General Aaron Frey refuses to investigate credible allegations of fraud against Gateway. Instead, the thugs in the Mills Administration had the whistleblower audited. Imagine that! Exposing corruption, at great personal risk, only to have the Mills Team pull a mafia tactic and sic Maine Revenue Services on you.

Democrats are not only defending this behavior from the migrant NGO complex, many of them are part of it. Rep. Deqa Dhalac worked at Gateway as Assistant Executive Director while the alleged fraud was happening. So did Rep. Yusuf Yusuf. Shenna Bellows fundraised this summer with Safiya Khalid, former special assistant to Abdullahi Ali. Ekhlas Ahmed, a former Gateway employee, runs the “Office of New Americans” for Janet Mills.

Gov. Janet Mills has the authority to stop payments to Gateway, but instead she has issued them no-bid contracts. Hundreds of thousands of dollars that could have gone to Maine schools or to low-income Mainers are instead funneled into Gateway Community Services and other migrant NGOs.

Why?

Because Gateway’s offices in Lewiston and Portland are basically arms of the Maine Democratic Party. Those offices host vote harvesting operations that recruit migrants into welfare programs and supply Democrat votes — all paid for with tax dollars.

For those who care to pay attention, all the receipts, the contracts, the documents, and the evidence is contained within the Substack post below and the linked posts.

“Is this the type of diversity we wanted here in Maine. Are you f*cking liberals happy?” one perturbed resident said on TikTok.

BREAKING:

A Somali politician in Maine has placed a BOUNTY on the head of a journalist for reporting fraud in Maine’s Mainecare (medical).

WTF is happening in America?!

Time to KICK these LOWLIFE’S OUT. pic.twitter.com/JyAlR8LO1N

— Mila Joy (@Milajoy) December 7, 2025

In a recent interview with The National News Desk, Maine State Sen. Matt Harrington said, “It’s disgusting to me that they would do this.”

“You can’t rob a bank for millions of dollars. You shouldn’t be able to rob taxpayers of millions of dollars and get away with it. There absolutely needs to be a criminal investigation into this immediately,” Harrington said.

From Minnesota to Maine … What Democratic-run state will be next where investigations uncover appalling allegations of public resources being looted by migrants?

The parallels between Minnesota and Maine are so eerie.

In both states, there can be zero trust that DHHS and the Gov aren’t an extension of criminal orgs siphoning money from welfare.

Only federal intervention can end this culture of fear and retribution. https://t.co/Odm22ycavC

— Steve Robinson (@SteveRob) December 20, 2025

Maryland? California?

Authored by Peter Tchir via Academy Securities,

AI largely drove the show last week on the risk front. We started poorly, as Blue Owl pulling out of a future Oracle deal triggered some fears. But we finished the week strong as Micron had a solid beat, alleviating many concerns (a nice, soft CPI print helped matters too).

This flip-flopping back and forth on the AI story fits well with last week’s themes – AI Debt Diet vs AI Spend Diet.

Bitcoin seemed to be a decent leading indicator for stocks, but the past few days watching Bitcoin’s intraday moves was about as painful as watching Elaine dance on Seinfeld.

Equity markets are hovering near important levels. I know we’ve been talking a lot more than usual about technical levels, but they often seem to play a more important role during slow, less liquid periods than normal. The Nasdaq 100 bounced, just above the 100-day moving average (like it did in November when the Fed turned dovish). It closed just above the 50-DMA on Friday, which if it holds, should let the Santa rally loose. If it fails, we could be testing the 100-DMA for the 3rd time, and that tends to not work well.

With a holiday shortened week, let’s have some fun with AI.

What If CEOs Were Being Replaced by AI?

With markets being powered by AI, it is one of the main topics of conversation. Literally, every conversation.

In general, I’m on board with the importance of AI. I use it. It is improving rapidly. Having said that, using it “hampers” learning (not searching, reading, and digesting info on my own) and creates “work” around looking for hallucinations. I’d rather do some of the original, interesting work, including going down the wrong path, than searching for ticker symbols that don’t exist, etc. I do worry about the spend versus the results, at today’s costs and usefulness.

What I’ve been wondering lately is how much demand there would be for AI if CEOs thought they were going to be replaced by AI?

First, let’s make it abundantly clear, the CEOs can be guilty of “herd mentality.” Remember when every company had to have a China strategy? When any announcement of investment in China by U.S. companies triggered stock price gains! See Free Money. The rationale was there:

• The potential to sell into a market of 1 billion people, whose incomes and net worths were growing.

• Even cheaper supply chains.

Yeah, yeah, there were people who questioned whether a 51% stake for China made sense. Questioned whether China would ever truly open their markets and whether Chinese consumers would ever spend much on “American” goods? Heck, some even questioned the ability to protect IP.

• At the time, naysayers were drowned out and CEOs were rewarded for their skills in driving business to China. It didn’t always work out quite as planned.

I’m not arguing that the investment in AI is anything like the “need” to have a China plan, but I’m not sure that it is completely irrelevant.

But anyways, why not replace CEOs with AI?

At the moment the trend is to try to reduce jobs and hiring at lower levels in the organization.

Virtually everyone in “our industry” is talking about the ability to have fewer analysts, or do more with existing analysts (code for hiring fewer people). While I’m more familiar with what is going on in our industry, I think it is safe to say that most of the AI spend is centered around reducing labor costs at the lower end of the corporate ladder.

But why?

• At today’s cost, is it really cheaper to spend on AI than to have a few more junior people?

  • Sure, if you can spend $100k and replace 3 junior people, it’s a huge win. But are those the numbers we are currently seeing? If it is $1 million to save 3 jobs, maybe it isn’t the correct trade off?

• Why not empower junior employees? The cynical side of me (which is by far the bigger side) sometimes thinks the management consultant industry exists because CEOs prefer to pay a lot of money to be told by recent grads at the consulting firms what their own recent grads could tell them as part of their daily duties.

  • I will admit that perspective on the consulting industry is a bit over the top, but all too often it seems that it is difficult for people doing a job every single day, to get their own voice heard on what would make their job more effective. Maybe it is easier for AI to cancel the 10am Monday meeting, than to listen to some junior person argue that it is pointless? Maybe management is scared to empower the people who might know best what would make their jobs easier? Certainly, before embarking on AI spend, it would make some sense to see what can be done internally? I highly expect the conclusions wouldn’t be that dissimilar, but you’d have people who will grow with the organization, and the organization will be better for it in the long run.

  • The U.S. military, and my colleagues at Academy who have served (and in some cases are still serving in the reserves) relies heavily on NCOs. The Non-Commissioned Officer class (typically sergeants) is one of the unique features of the U.S. military relative to other militaries. Not that other militaries don’t have that rank, they just don’t empower them. General after General, Admiral after Admiral, all tell me that empowering the NCOs is one of the big advantages the U.S. military has. They carry on the culture. They mold those who serve with them (including sometimes, junior officers at the start of their career). They can take action in the field, of their own volition, in pursuit of goals and targets. Those actions often are the difference between winning and losing, which in the military, really is a matter of life or death.

  • Maybe I’m rambling, but I suspect we could all listen to juniors more, even as part of any AI implementation, and be pleasantly surprised how many good ideas for efficiency and growth are there, just waiting to be tapped?

• The CEO’s job is extremely difficult.

  • No other job requires so much input. In my role at Academy, I have relatively few inputs to take into account while delivering what I deliver. As you move up the management chain, you have to deal with more and more inputs. Almost a mind boggling amount of information for a CEO of a large company. And the consequences of their decisions matter! If you hate this T-Report, you may not open the next one. That is probably the biggest downside from my decision today. Decisions to open or close business lines have far bigger impacts, ones that cannot be changed quickly.

  • So why isn’t AI groomed to be CEO?

    • The job is more difficult and requires more information to be processed, so isn’t AI better suited for that? Aren’t the “real” benefits of AI more relevant to the CEO than to the average employee? If you “fix” junior jobs, you are talking about dollars and cents. If you fix the CEO jobs you are talking about millions, and maybe billions?

    • I did use AI to find that in 2024 the average CEO to worker pay ratio for S&P 500 companies was 285:1. The same AI, also told me that CEOs on average made $21.45 million while employees earn on average about $51,394 – which is 400 times.

    • Yes, there is only 1 CEO and leadership is also a crucial role the CEO plays. Not just the decision making part, but also getting the team focused and working together. AI cannot replace leadership, and it really can’t replace leadership at junior levels, where that leadership is also critical.

Just like China strategies evolved, I expect that we could see AI strategies evolve, hopefully in a way that we maximize the Human Intelligence (HI?) while trying to be cost effective in our AI deployment.

I do think this section, as offbeat as it might seem, is something people are thinking about and may slow the AI spend, as costs continue to rise.

It will also drive the AI (and data centers) to new solutions and products to feed the evolution of the industry and the use cases.

Back to Yields

If the “scary” chart of the past couple of weeks has been Oracle CDS, it was Japanese bond yields by the end of this week. For the record, Oracle CDS finished a couple bps tighter on the week – making the end of my interview last Friday seem better than it did early in the week when it was still widening.

The Japanese 10-year bond yield broke 2% for this week. It spent most of the past decade below 0.5%.

So far this rise in Japanese bond yields has been accompanied by a weakening yen. Not exactly what the “textbook” would predict, but markets often follow narratives of their own (in theory as the yield differential decreases, the currency should appreciate, or so I read).

The yen carry trade is either some huge overriding trade that drives global markets, or it is a niche trade, where many overstate the importance of it. I’m in the latter camp, but since it is gaining a lot of attention lately, it is worth revisiting.

In theory many funds borrow in yen to fund positions in other assets. The interest rate on borrowing in yen was so low that you could “outperform” your borrowing costs (even taking FX risk). The corollary or flipside of this, is that many Japanese bond investors would buy U.S. Treasuries and attempt some currency hedges to outperform direct investments in Japanese government bonds.

That trade is less appealing on the interest rate differential. The difference between Japanese and U.S. central bank rates was 5.4% as recently as February 2024. It is down to 3.1%. Still a large differential, but it could impact the so-called “carry” trade.

A return to a strengthening of the yen would put far more pressure on the trade as many don’t hedge the FX risk. Again, this is a bit of a murky trade where some argue it is a huge driver of risk premium across the globe, while I suspect its importance is overstated. But not so overstated that we can completely ignore it.

This may go a long way to explaining why U.S. 10-year yields are still stuck between 4.1% and 4.2%.

The EU Had “One Job”

Periodically, I search the “you had one job” meme on social media. It never fails to deliver a smile.

Today, I’m not smiling.

Our assessment of what the EU can do to support Ukraine, maybe even as part of their commitment to NATO, was to seize Russia’s frozen assets and use them to purchase military equipment.

The EU does not have the military equipment or personnel to contribute, so aside from fully enforcing sanctions (which they have also been loathe to do), they could fund more equipment purchases for Ukraine.

Seizing Russia’s frozen reserves seemed to be the “easiest” way for Europe to do this:

• It would not only fund the war effort, but it would also hurt Putin.

• It would avoid Europe dithering for weeks or months, on issuing debt to fund some sort of purchases. Not exactly the sort of business arrangement the President likes (and I cannot blame him – we’ve argued that many of Trump’s comments seem to have laid down the gauntlet around Europe and Russia’s reserves). In any case, this time, despite the sound of it, I’m not being cynical. Sometimes what sounds like cynicism is just reality.

Without this seizure, we are seeing European bond yields rise. The “mitigating” factor is that it is probably safe to bet that Europe won’t really act. That there won’t be a deluge of European debt offerings to fund weapons purchases for Ukraine because weapons purchases won’t happen at scale.

What a “Peaceful” Ukraine/Russia Will Look Like

The consensus of the GIG is that we aren’t headed towards peace any time soon, but that Putin has the capability to outlast Ukraine, and Ukraine will ultimately come to the table.

Without the seizure of Russia’s reserves, I think Ukraine has to come to the table faster than they would otherwise.

They may not like what the U.S. is proposing, but it is “reasonably” concrete. If you were Ukraine, you could try and keep some of the U.S. proposals at bay, while waiting for Europe to come through. Whatever machinations Europe goes through, if I’m Ukraine, I’m more skeptical about any sort of game changing help from Europe. When headlines read Belgium and Putin win, you have to be nervous (the Weakest Link was almost more popular in the U.K. than in the U.S., maybe because it is the politics of the EU – the UK was part of the EU when that show was at peak popularity). Unanimous decisions within the EU are hard to reach, so appeasing every country makes it difficult to do much. And that is ignoring the hard truth that many European nations have their own economic concerns to deal with.

So, time to think a little bit more about what “peace” might look like:

• Stronger security guarantees by the U.S. for Ukraine.

  • These will be given because Ukraine will give the U.S. (and its corporations) extremely favorable deals for years. The admin will not provide security guarantees so much to protect Ukraine, but to protect the business interests that will be generated.

• The business deals with Russia will be even better for U.S. corporations.

  • Whatever Ukraine may have to give up, as they realize they cannot get enough support from Europe to continue, will be big for the U.S. Russia will give up even more since Europe clearly had no interest in giving them anything and they are being pushed to the brink by the U.S. It will be interesting to see what China and maybe even India have to say about any favorable treatment given to the U.S. and U.S. businesses.

• Look for Poland and even Romania to thrive.

  • Whatever the prognosis is for lasting peace, many companies will want to stage their operations outside of Russia, and even outside of Ukraine. When deciding where to launch your expansion into Russia and/or Ukraine, both Poland and increasingly, Romania make sense. Poland has proven itself to be resilient and extremely competent during the war. Romania, in my understanding, and I’m learning more, has also played a key role and has some advantages in terms of its borders.

Much of what the admin is looking for in the region fits our ProSec™ narrative, and I think we are one step further towards seeing the admin achieve those goals.

Bottom Line

Despite signs that inflation is abating, bond yields will be a bit stubborn, because of what is happening across the globe, rather than due to our domestic policy/data. I want to buy the long end, and own flatteners, but it is still a touch early.

Credit was a little weaker than stocks this week. Fear of the calendar seems to be keeping spreads from tightening even when other risk assets do well. That will likely persist, but I think the start of the new issue season will be a sign to load up on credit. A lot of “room” has been made to absorb the supply, and if we are correct on the AI Debt Diet thesis, some fears, currently priced into the market, will dissipate.

Something looks seriously “off” in the crypto market (I cannot unsee Elaine dancing). Even with the support this admin and the regulators have for the business, it seems prudent to remain cautious. It continues to be erratic and stuck at levels that seem to make little sense given the ongoing drumbeat of positive news.

If stocks can open decently on Monday, look for strength into year-end, and then some more choppiness. If stocks cannot hold onto the gains from Friday, we will all have a far more anxious holiday season than we were hoping for, as support and “blindly” buying the dip don’t seem to be there.

The AI Debt Diet and AI Spend Diet will be key factors for the markets early next year.

Any peace with Russia and Ukraine is likely to lower commodity prices (as access is granted), but look for U.S. companies to dominate any rebuilding and look for the admin to focus on refining and processing even more than extraction.

And no, CEOs should not be replaced by AI, but we should all be figuring out the right balance and what the real cost/benefits are. I think that could drive down spend a little bit, and actually drive up productivity.

Hopefully, markets cooperate and let us enjoy the holiday season as we ramp up for what should be a busy 2026!

The Democrat crusade to divert blame for the stagflation crisis triggered during the Biden Administration led them down a path of economic lies.  The central theme of their narrative was that corporations were “price gouging” consumers and inflation was actually a product of “corporate greed.”  In reality, helicopter money and dollar devaluation during the pandemic triggered a massive consumer demand rush as well as shortages in a variety of goods and raw materials.

The profit margins in many of these industries were paper thin as their manufacturing and labor costs skyrocketed, yet Democrats tried to scapegoat them anyway.  The word “accountability” is not in the leftist vocabulary.

We are only now starting to witness the aftermath of the legislation and policies put in place by blue states as a means to control prices.  California under Governor Gavin Newsom may have staged its own economic demise (the final nail in the coffin) after laws were passed requiring even greater state interference into oil refineries and gas stations.

Gavin Newsom ‘s major refinery law, ABX2-1 (signed Oct 2024), gives the state power to mandate minimum fuel storage levels and control refinery maintenance to prevent price spikes, empowering the California Energy Commission (CEC) to stabilize supply. This builds on earlier efforts (like SB X1-2) creating an oil market watchdog (DPMO) to increase oversight, aiming to stop refiners from manipulating supply for profit, while also adding data reporting requirements for companies.

In response, companies are shutting down refinery operations in the state.

Lawmakers in California at both the state and federal levels are warning that refinery closures could push prices higher while leaving the state more dependent on foreign oil.  At the center of the warning is the planned shutdown of two major refineries: Valero’s Benicia facility and Phillips 66’s Los Angeles plant. Together, the closures would eliminate nearly 20% of California’s in-state refining capacity.

Experts suggest prices could go as high as $10-$12 per gallon as a result of the supply squeeze, spreading outside of CA to Arizona and Nevada. Republican lawmakers say that the loss of in-state production threatens not only consumer prices at the pump but also the state’s military readiness; a matter of national security. 

The refineries make jet fuel and diesel and gasoline for military bases across California.  California is home to more than 30 military bases, many of which rely on fuel refined in-state.  Gavin Newsom has mostly dismissed concerns as exaggeration, asserting that foreign shipments of fuel will fill the supply gap.  He argued in a recent statement:

“The claim that California policies pose a national security risk isn’t grounded in fact. The state has proactively engaged defense fuel customers throughout this energy transition, and no credible concerns have been raised about future fuel supply for the military. California is leading this transition responsibly while ensuring families have access to a safe, reliable, and affordable supply of transportation fuels…” 

California law, primarily through Senate Bill 445, also mandates that all single-walled Underground Storage Tanks (USTs) and piping must be permanently closed or replaced with compliant double-walled systems by December 31st, 2025.  The claims is that this will prevent leaks and environmental contamination, with significant fines for non-compliance.

The state created a program called “RUST” to supposedly help small businesses meet the deadline by providing subsidies to pay for new tanks.  However, many mom-and-pop gas stations are reporting that they never received any aid from the RUST program, even though they applied far in advance.  Hundreds of small business CA gas stations are set to shut down in 2026.  A large number of them are rural and operate as the only gas stations for long stretches of highway.  

In October, the newly created Division of Petroleum Market Oversight released its first annual report meant to discover why CA gas prices are so high.  The report merely confirmed what was already known – CA prices are much higher than other states because of the differential in taxes and regulatory costs.  No concrete evidence of price gouging on the part of energy companies was found.

Blue states like CA have been increasingly subjecting their citizens to an experiment in artificial energy scarcity; reducing access to “fossil fuels” while raising taxes to force consumers into the electric car market.  All of this is being down in the name of stopping “man-made global warming”, a problem which does not exist.  Newsom claims that he is trying to help CA citizens by lowering gas prices, but all of his actions are leading to a price explosion.

Authored by Ryan Morgan via The Epoch Times,

The Pentagon has failed to pass a full financial audit for the eighth year in a row.

Congress initially mandated annual independent audits across the Department of Defense in 2018. In that time, the department has failed to pass a single full audit.

The Department of Defense—also known as the Department of War—lists $4.65 trillion in assets and $4.72 trillion in liabilities through fiscal year 2025, which ended on Sept. 30. The Pentagon cannot account for its full balance sheet.

An audit report, finalized on Dec. 18 by the Department of Defense Office of Inspector General, identified 26 material weaknesses and two significant deficiencies in the Pentagon’s financial reporting practices for the year.

Auditors rendered adverse opinions in 10 of 28 subaudits contained within the overall Pentagon audit for the year. Adverse opinions are issued when audits find financial reporting to be inaccurate.

The audit also listed further disclaimers of opinion, meaning auditors could not be certain one way or another whether the balance sheets of certain funds or programs were accurately recorded.

Auditors applied the disclaimers of opinion to the Department of the Army General Fund, the Department of the Army Working Capital Fund, the U.S. Navy General Fund, the Department of the Air Force General Fund, the Department of the Air Force Working Capital Fund, the U.S. Transportation Command Transportation Working Capital Fund, the Defense Intelligence Agency, the National Geospatial-Intelligence Agency, the Defense Health Program General Fund, the Defense Information Systems Agency General Fund, and the Defense Logistics Agency Working Capital Fund.

The audit report said the disclaimers of opinion cover programs and funds that comprise a combined 43 percent of the U.S. military’s total assets and at least 64 percent of the military’s total budgetary resources.

Auditors found material misstatements within the Joint Strike Fighter program, which oversees the F-35 Lightning II stealth fighter used by the various U.S. military branches and numerous partner nations.

The report found the program did not properly account for its global pool of spare parts.

The audit also found misstatements in the various programs the U.S. military uses to build up the military strength of various global allies and partners. Auditors determined there were $18.9 billion worth of material misstatements across partnership programs.

Despite eight attempts and eight failures, the Pentagon still has a way to go before it passes a full audit. The Pentagon is currently set on a goal to pass its first audit in 2028.

“We have reviewed the audit report and acknowledge the findings and results. The Department of War is committed to resolving its critical issues and achieving an unmodified audit opinion by 2028,” Jules Hurst, who is performing the duties of the Pentagon comptroller, said in a Dec. 18 statement attached to the audit report.

Despite the setbacks, the Secretary of War Pete Hegseth said the latest report showed continuing improvements across the Pentagon’s accounting efforts.

“This year’s audit revealed remediations in key areas, reflecting significant progress in financial management,” Hegseth said in a statement attached to the audit report.

Authored by Luis Cornelio via Headline USA,

Minnesota Attorney General Keith Ellison came under fire for blaming two car manufacturers for a surge in vehicle thefts across the state, with critics arguing the problem stemmed from lenient, soft-on-crime policies instead. 

The backlash followed Ellison’s framing of a multi-state settlement, in which he claimed Minnesota faced a “crisis,” describing it as a “public safety epidemic of vehicle thefts, financial harm to consumers, injury and tragically, even deaths.” 

On X, critics mocked Ellison’s remarks, particularly given his reputation as a soft-on-crime prosecutor and his alleged failure to crack down on one of the largest COVID-19 relief fraud schemes to date. 

“Minnesota AG Ellison blames car theft in his state on Kia and Hyundai being too easy to steal…” the X account End Wokeness wrote while sharing a clip of Ellison’s comments, which garnered nearly half a million views. 

National Review senior writer Dan McLaughlin responded, “My favorite anti-theft device is jail.” 

Rep. Mike Collins, R-Ga., added bluntly, “I’d blame the criminals.” 

National syndicated radio host Anthony Cumia echoed these sentiments, writing, “They will never take responsibility for their shit behavior.” 

I’d blame the criminals. https://t.co/ukwFTXZuJv

— Rep. Mike Collins (@RepMikeCollins) December 20, 2025

Ellison’s comments followed a settlement between Hyundai and Kia and a coalition of 35 states plus the District of Columbia, after Minnesota launched an investigation into the automakers’ weak anti-theft technology. 

The settlement includes up to $4.5 million in restitution for eligible consumers and an additional $4.5 million for states that investigated the thefts. 

The car theft trend went viral on social media after the so-called “Kia Boys” began posting videos purportedly showing how easily they stole certain Kia and Hyundai models. 

According to the Minnesota Attorney General’s Office, thefts involving Kia and Hyundai were linked to at least five homicides, 13 shootings and 36 robberies. 

“These are not just numbers; they represent a public safety crisis that has caused substantial and serious harm to the people of Minnesota,” the office said in a statement. 

Ellison claimed the thefts were the product of automakers failing to implement anti-theft technology that was made available in vehicles sold in Mexico and Canada. 

Several Republican attorneys general joined the lawsuit, including those of New Hampshire, Florida, Georgia, Iowa, Kansas, Kentucky, Louisiana, Mississippi, North Dakota, Ohio, Oklahoma and South Dakota.