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. 

“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.

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.

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.”

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.

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.

Authored by Lawrence Wilson & Nathan Worcester via The Epoch Times (emphasis ours),

The Senate is poised for a Dec. 11 vote on competing measures to resolve the standoff over extending the expiring subsidies for Obamacare.

Both are likely to fall along party lines, and to fail to reach the 60-vote threshold required to advance legislation in the Senate.

The subsidies, officially known as enhanced premium tax credits, were created as a temporary measure in 2021 to blunt the economic impact of the COVID-19 national health emergency.

Originally offered for two years, the enhanced subsidies were further extended for three years and will expire at the end of this month.

Democrats, fearing that allowing the subsidies to expire now would cause financial hardship and cause millions of Americans to drop their health coverage, have proposed another three-year extension.

“Democrats have put forward the cleanest, fastest, most realistic solution, a three-year extension of the current tax credits,” Senate Minority Leader Chuck Schumer (D-N.Y.) said on Dec. 9.

Republicans, saying that the billions spent on these additional subsidies have contributed to rapidly rising insurance premiums and have given rise to opportunities for fraud, oppose an extension that does not address those issues.

“The bill [Democrats] are going to put on the floor will fail,” Senate Majority Leader John Thune (R-S.D.) told reporters on Dec. 9.

Republicans have proposed an alternative plan. It would replace the enhanced subsidies with a cash payment to eligible enrollees, to be placed in a Health Savings Account. The original Obamacare subsidies, distinct from the enhanced subsides, would remain in place.

Schumer on Dec. 9 criticized the proposal as “dead on arrival.”

Enhanced Subsidies

The enhanced subsidies enacted in 2021 expanded eligibility for Obamacare, offering subsidies for wage earners well into the middle class.

The original Obamacare subsidies are open to people making between 100 percent and 400 percent of the federal poverty level. That equates to a household income of between $32,150 and $128,600 for a family of four.

The enhanced subsidies increased the amount of the subsidies, removed the income limit, and capped out-of-pocket premium payments at 8.5 percent of household income. Some low-income enrollees are eligible for plans with no premium payment under the coverage expansion.

Obamacare enrollment more than doubled after the enhanced subsidies were introduced.

Standoff

Democrats pushed for a permanent extension of the enhanced subsidies early in the fall, refusing to authorize continued spending to fund the government until Republicans agreed to negotiate over this and other health-care-related proposals.

Republicans refused to consider the extension during the shutdown.

The government shutdown, which lasted for 43 days, ended when eight Democratic Senators voted with Republicans to approve stopgap funding to reopen the government, but on the condition that their party be given a vote this month on extending the subsidies.

Schumer revealed the Democrats’ proposal for a three-year extension on Dec. 4.

Sens. Mike Crapo (R-Idaho) and Bill Cassidy (R-La.) released their plan on Dec. 8, and Republicans elected to present it for a vote alongside the Schumer plan on Dec. 11.

Other plans have been proposed by Senate Republicans, by bipartisan groups of House members, and by the House New Democrat Alliance.

Compromise Seekers

The latest compromise proposal has been put forward by Rep. Brian Fitzpatrick (R-Pa.), joined by a bipartisan group of House members.

Fitzpatrick introduced a discharge petition that, if successful, could force the House to vote on his proposal. A discharge petition requires support from 218 House members.

The Fitzpatrick plan would extend the enhanced premium tax credits through 2027 to insulate consumers from sudden rate increases. It includes some measures to check fraud by unscrupulous insurance brokers and rein in some practices of pharmacy benefit managers, the middlemen in the prescription drug supply chain.

The measure has the support of several moderate House members, including Reps. Jared Golden (D-Maine), Michael Lawler (R-N.Y.), Don Bacon (R-Neb.), Thomas Suozzi (D-N.Y.), and Robert Bresnahan (R-Pa.).

The subsidies have taken on a sense of urgency as the Jan. 1 premium increases draw nearer. “This is personal to a lot of us because these are our friends and our neighbors that are losing sleep over this,” Fitzpatrick said.

Sen. Thom Tillis (R-N.C.) applauded the effort, saying it seemed similar to a three-year ramp-down of the subsidies that he suggested.

Tillis told The Epoch Times on Dec. 10 that any measure would need roughly equal support from both parties because hardliners on both sides would be likely to reject a compromise.

Sen. Richard Blumenthal (D-Conn.) said, “Compromise should never be a dirty word.”

Sen. Angus King (I-Maine) said: “This should be a bipartisan. Let’s get together and figure this out.”

Sen. Josh Hawley, who has proposed no tax on health care premiums, deductibles, or copays, said lawmakers should explore every option for bringing down the cost of health care.

“I think it should be hard to go home and say to people whose premiums are doubling, ‘You know, we just couldn’t quite get it done,’” he said.

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.

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.

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.

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.

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.

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.