GDP, released last week, showed that the economy grew by a larger-than-expected 4.3%.

Powering the strong economic growth was personal consumption, which rose by 3.5%.

Consumers are spending!… What’s unusual about that statement is that consumer sentiment remains historically weak.

Typically, there is a strong correlation between personal consumption and consumer sentiment.

As RealInvestmentAdvice.com shares below, the University of Michigan and the Conference Board consumer sentiment indexes are at or near 10-year lows.

Moreover, they are generally worsening, yet personal consumption continues to grow strongly.

Can such a divergence continue?

To help answer that, consider the five bullet points below, which explain why personal consumption has been strong.

• Wealth Effect: U.S. stock markets will post their third 20%+ increase in a row.

• Non-discretionary Spending: The mix of spending is leaning towards non-discretionary items. For instance, spending on housing, healthcare, insurance, and travel is increasing as a share of total spending. Many of these expenditures are unavoidable, not confidence-driven impulse purchases. For example, healthcare spending accounted for nearly 20% of consumption.

• Credit: Rising use of credit cards, buy-now-pay-later, and home equity loans boosts spending in the short term.

• Savings: Real personal income was flat, thus consumers are using savings, which fell to a historically low 4.7% rate, or credit to meet their needs. Neither is sustainable over the longer run.

• Inflation: Even if the inflation rate is normalizing, the higher prices of goods and services weigh on consumers’ psyche, in turn making sentiment worse. However, its impact on consumption is not as significant.

But here’s the real deciding factor…

Russian President Vladimir Putin has made clear to both his citizens and to the world that the ‘special military operation’ in Ukraine will continue on until all goals are achieved, and that his forces are advancing ‘confidently’.

He chaired a televised meeting with the country’s top military officials, focused on a status update regarding Ukraine, and crucially coming the day after Presidents Trump and Zelensky met in Florida in a failed effort to reach breakthrough on the proposed peace deal. Moscow is pressing ahead with its goal of fully capturing and pacifying the four Ukrainian regions it declared part of the Russian Federation in fall of 2022 via a ‘popular referendum’.

“The goal of liberating the Donbas, Zaporizhia and Kherson regions is being carried out in stages, in accordance with the plan of the special military operation,” Putin described before underscoring, “The troops are confidently advancing.“

At the meeting it was also announced that Russian troops have made more gains in the last 24 hours, especially the capture of Dibrova village in Donetsk region.

According to an update of the meeting via RT translation, battlefield gains of the past month are significant:

In December, Russian forces liberated over 700 square kilometers of territory, taking some 32 settlements under control, Gerasimov said at the meeting. This month, the military has shown the highest rate of progress in the entire outgoing year, he noted, adding that troops are advancing “along virtually the entire frontline.”

“The adversary is not undertaking any active offensive actions. They have concentrated their main efforts on strengthening their defenses and are attempting to slow the pace of our advance by conducting counterattacks in isolated areas and using drones en masse,” Gerasimov said.

The Kremlin has at the same time reiterated that it is not interested in a ‘Plan B or Plan C’ in terms of a peace deal, but that it only seeks lasting political settlement. This will of course include international recognition of its territories in the Donbass.

According to highlights the Russian president’s speech after his meeting with top defense officials, via a TASS and Al Jazeera compilation:

• Attempts by Ukraine to interfere with the Russian army in Kupiansk must be decisively suppressed.
• The capture of Siversk allows for the development of offensives towards the cities of Sloviansk and Kramatorsk.
• Prospects for the complete capture of the Donbas territory have been discussed.
• Expansion of the security zone along the Russian-Ukrainian border is on the table.
• Troops have broken through the Ukrainian defences and are advancing towards the city of Zaporizhzhia.

Putin tells Russian generals:

It’s necessary to continue the operation to gain control of the city of Zaporizhzhia. pic.twitter.com/AT0XkCbkV5

— Clash Report (@clashreport) December 29, 2025

Putin, surrounded by his generals, is making clear to the world that he remains in the driver’s seat – with all the leverage on the field of battle – and that Zelensky has no cards to play.

Authored by Lance Roberts via RealInvestmentAdvice.com,

There is a rising market risk in 2026 that is largely overlooked as we wrap up this year. As discussed in the “Fed’s Soft Landing Narrative,” optimism about 2026 is running high.

Currently, investors are pricing in strong economic growth, robust earnings, and a smooth path of disinflation. Notably, Wall Street estimates suggest a significant acceleration in corporate profits, particularly among cyclical stocks and small- to mid-cap sectors. To wit:

“Wall Street currently expects the bottom 493 stocks to contribute more to earnings in 2026 than they have in the past 3 years. This is notable in that, over the past three years, the average growth rate for the bottom 493 stocks was less than 3%. Yet over the next 2 years, that earnings growth is expected to average above 11%.”

“Furthermore, the outlook is even more exuberant for the most economically sensitive stocks. Small and mid-cap companies struggled to produce earnings growth during the previous three years of robust economic growth, driven by monetary and fiscal stimulus. However, next year, even if the Fed’s soft landing narrative is valid, they are expected to see a surge in earnings growth rates of nearly 60%.”

There is nothing wrong with having an optimistic outlook when it comes to investing; however, “outlooks can change rapidly,” which is a significant market risk, particularly when expectations and valuations are elevated.

Notably, these forecasts rest on an assumption that the economy will not only avoid recession but reaccelerate in the face of waning inflation. As noted, equity markets have responded by pushing valuations higher across major indexes, with price-to-earnings ratios well above historical medians. Simultaneously, investors have rewarded narratives built on the idea of a soft landing and a return to pre-pandemic trends.

However, this narrative appears to overlook the trends in recent economic data. Inflation expectations have moderated, not because of increased demand, but due to weaker consumption and cooling labor dynamics. As recent economic data indicate, disinflation has accompanied slower GDP growth and a decline in personal consumption momentum. If the economy were indeed set to reaccelerate, these trends should be increasing rather than returning to historical averages.

The soft landing thesis posits a benign cycle in which inflation declines, growth remains stable, and earnings increase. Yet, that outcome would be historically rare. When inflation falls this quickly, it typically reflects a slowdown in demand rather than policy success. Additionally, the strong relationship between economic growth and earnings should not be dismissed. That disconnect exposes investors to market risk if growth does not materialize as expected and valuations are reconsidered.

With analysts expecting strong revenue growth and margin expansion despite rising input costs, global uncertainty, and declining employment, a market priced for perfection leaves little room for earnings misses or growth shocks. If those optimistic assumptions fail, market risk could rise abruptly.

Let’s dig in.

Structural Headwinds

As noted above, earnings growth is fundamentally tied to economic growth. When demand exceeds supply, companies expand output, raise prices, and increase profits. As discussed recently, this is why, without inflation, there can not be economic growth, increasing wages, and an improving standard of living. In other words, for there to be stronger economic growth and rising prosperity, prices must increase over time. Such is why the Fed targets a 2% inflation rate, thereby supporting 2% economic growth and stable employment levels.

However, the employment data over the last year doesn’t tell a story of substantial employment, rising wages, or a trend suggesting a more robust economic outlook. Instead, the latest data confirmed a deceleration in economic activity, as full-time employment (as a percentage of the population) declined.

The importance of full-time employment should not be readily dismissed. Full-time employment pays higher wages, provides family benefits, and allows for an expansion of consumption. The decline in full-time employment currently is normally associated with recessions rather than expansions. Economic growth, inflation, and personal consumption are trending lower, given that employment, particularly full-time employment, supports economic supply and demand.

Furthermore, economic growth relies heavily on consumer spending, which accounts for nearly 70% of U.S. GDP. For that consumption to persist or grow, consumers must have rising incomes, which come from employment and wage growth. Without job creation or real wage increases, consumption growth stagnates, and the earnings narrative breaks down. As shown, when economic growth declines, so do earnings growth rates.

Recent employment data show cracks in this cycle. While headline job numbers suggest continued hiring, the quality and composition of those jobs are weakening. Today we see part-time workers filling full-time positions, often with lower pay and fewer benefits. Labor force participation remains below pre-pandemic levels, and many prime-age workers are not returning. Most notably, the negative revision of every monthly employment report in 2025 further undermines the “strong economy” narrative.

Even where wages are rising nominally, inflation-adjusted wages tell a different story. Real wage growth has been flat or negative in several key sectors. As housing, energy, and service prices remain high, the squeeze of disposable income increases. As such, consumers compensate by drawing down savings or using credit, both of which are unsustainable long-term strategies.

The market risk in 2026, is that for corporate earnings to accelerate and meet Wall Street’s expecations, the consumer must be healthy. That means rising real wages and broad-based job creation. Without those pillars, top-line revenue growth slows, and margin pressures increase. Analysts projecting double-digit earnings growth into 2026 are assuming a demand-driven economy without the income growth needed to support it. That assumption is increasingly fragile. Without real economic growth, earnings become a product of financial engineering or cost-cutting, not organic expansion. Markets are pricing in a demand surge that the employment data do not confirm.

If this disconnect persists, Wall Street will revise earnings expectations lower.

Valuation Fragility

That last sentence is the most crucial. With valuations near cycle highs, (the S&P 500 trades at over 22x times forward earnings, which is well above its long-term average), such assume strong earnings growth and low discount rates. Yet both assumptions are vulnerable. If economic growth undershoots, earnings revisions will follow. Historically, earnings have tended to lag behind the economic cycle. As consumption softens, revenue growth stalls. Margins then compress, especially for companies with high labor or financing costs, and with narrow market breadth and concentration in mega-cap names, the market risk is a sudden repricing of those expectations.

Credit risk premiums remain compressed across all asset classes, from high-yield to investment-grade, which reflects a belief in Fed control and continued monetary easing. If those beliefs are shaken, volatility will return. Market participants are not expecting a scenario where all risk assets decline simultaneously, including stocks, crypto, precious metals, and international markets.

Implications for Investors

The market risk for investors is not a 2008-style collapse. However, a far more likely scenario is a long period of underperformance. That underperformance will likely be a function of earnings disappointment, weak growth, and multiple compression. Market analysts are currently pricing the market for acceleration. But those views may struggle is stagnation, and the “path of least resistance,” shifts from upward momentum to sideways drift or correction.

As such investors should continually monitor and assess the risk they are taking in portfolios.

• Reassess exposure to high-multiple equities and overconcentrated sectors. While technologty drives index performance, valuations are high and if growth expectations are too high, tech earnings will likely fail to meet them. The same applies to consumer discretionary stocks tied to fragile spending.

• Consider a more defensive position, focusing on free cash flow, balance sheet strength, dividends, and pricing power.

• Add bonds to your portfolio to protect prinicpal and create income. Furthermore, in the event of a risk-off rotation, investors will seek the safety of bonds to reduce portfolio risk. Being there before the correction occurs can be beneficial to outcomes.

• Liquidity should always be a priority. If risk aversion returns, liquidity conditions can tighten quickly. Investors consider a scenario where risk assets (stocks, commodities, metals, and cryptocurrencies) decline sharply as risk resets

A prudent approach is to reduce exposure to narrative-driven assets and increase allocations to quality. Investors should favor sectors with consistent earnings, low leverage, and stable dividends. Cash remains underappreciated as a strategic tool, and with real yields positive and volatility likely to rise, liquidity is a source of optionality.

The next two years will test the soft landing thesis. If growth falls short, earnings disappoint, or inflation returns, markets will face a reset. That reset may not be dramatic, but it will be painful for those overexposed to the current consensus.

The best defense is valuation discipline, risk awareness, and a willingness to question the prevailing narrative.

Trump’s military strikes against Islamic terror groups in Nigeria have been met with overall applause by Nigerian citizens and migrants residing in the US.  Authorities say the groups have links to jihadist networks in Mali and Niger and their members have settled in border communities, recruiting young people and imposing brutal controls.

Associated Muslim militants were responsible for numerous attacks on Christian communities and schools in the country in early 2025, including the coordinated massacre of 280 Christian farmers in the village of Yelwata; many victims burned alive or hacked to death. It was one of the worst single incidents of Christian slaughter in the past decade.

In a national statement, Nigeria’s information ministry said “precision strike operations” had been carried with the “explicit approval” of President Bola Tinubu and with “the full involvement of the armed forces of Nigeria”.  Trump brought global exposure to the attacks on Christians in the region, accusing the Nigerian government of apathy in the face of genocide. 

The event is being framed as a “joint operation” between Nigeria and the US, however, it is likely that international attention forced the hand of the current regime to cooperate with US military operations.  Nothing would have been done about the militants had Trump not stepped in.

Many Christian Nigerians abroad and migrants in the US are optimistic about the country’s prospects for peace and have applauded the strikes.  Nigeria is 56% Muslim and 43% Christian.  The northern provinces, controlled by Muslims, have instituted Sharia Law despite the country having a “secular constitution.”  This has created religious tensions across the nation and helped to enable escalating Islamic militant attacks. 

It’s good to see at least one group of third world migrants showing appreciation for US efforts.  

The establishment media in the west, however, is not happy about Trump’s efforts in Africa, and has been working diligently to deny that the conflict is driven by religious motives.  Though they are forced to admit that the strikes have had a positive effect on Nigeria’s Christian population, they continue to frame the killings of villagers as “land disputes” (take note of the seemingly scripted propaganda planted in the AP report below).

The motives of the media are obvious; third world immigration is an integral part of the multicultural agenda to destabilize the west and admitting that Islamic migrants might be a security hazard hurts that agenda.  They could not be more transparent, given the fact that journalists immediately tried to make the issue about immigration once news of the strikes hit the new feeds.

Western journalists have accused Trump of hypocrisy because of his block on immigration from a number of African nations including Nigeria.  They argue that Trump does not really want to help Christians because he won’t allow Nigerians to come to the US to escape the sectarian violence.

However, simply claiming to be Christian is not enough to gain US citizenship.  Trump’s position is clear – Third world populations need to fix their own countries rather than running to the US.  Despite the socialist “melting pot” narrative, America has never been obligated to take on the refugees of the world.  The Trump Administration’s intervention in Nigeria only shows that the President is serious about those people staying where they are so they can repair or replace their broken government.   

In July as Trump ramped up criticism of the Nigerian government’s handling of the situation, NPR attempted to paint the attacks as a “land dispute” over access to cattle grazing areas. They repeated the Nigerian Foreign Ministry’s claims that the events had “nothing to do with religion.”  In almost every case of Christians being hunted by Muslim militants, the media is on the side of the governments that allow the attacks to happen.   

A number of western media platforms dismiss or marginalize the attacks on Christian villages in Nigeria, claiming that “most victims are Muslims.”  What they don’t mention is that most Muslim “victims” are largely rival militants fighting for a superior position.  Christians have not involved themselves in the power struggle, yet, they are specifically targeted for extermination.  

Reports from the International Society for Civil Liberties and Rule of Law (Intersociety) state that over 7,000 Christians were killed in Nigeria in the first 220 days of 2025.  The bottom line is, Christians are disproportionately targeted by Islamic violence in Africa and African governments are content to let it happen.  

Update(1115ET): The Trump-backed effort to forge ahead on achieving peace in Ukraine may have just been completely derailed by a major development. Just as Trump described Monday morning that he had a ‘positive’ phone call with President Putin about Ukraine, the Kremlin is alleging that Ukraine launched a major drone attack on President Putin’s “official residence” in the Novgorod region from Sunday night into Monday. It is presumably one of many of his residences, and there’s no indication he was there when the alleged attack wave occurred.

Fresh words of Russian Foreign Minister Sergei Lavrov indicate that Ukraine fired 91 drones targeting Putin’s residence in what’s being described as a sustained attack spanning hours, but that all of them were destroyed by the significant anti-air defenses.

PUTIN TOLD TRUMP ABOUT ATTACK ON ONE OF HIS RESIDENCES: IFX

Moscow now says it will “revise” its negotiating position on ending the war in Ukraine, after what it dubbed the overnight “terrorist attack.” The Ukrainian government immediately rejected the allegation, calling it a “fabrication”:

Lavrov said there was no damage or casualties resulting from the incident but that Russian armed forces had selected targets for “retaliatory strikes.” Ukrainian President Volodymyr Zelensky immediately rejected the claim as “a complete fabrication” from Russia.

Russian Foreign Minister Sergey Lavrov blames Ukraine for an attempted drone attack on Putin’s “Dolgiye Borody” residence in Valday, Novgorod Oblast of Russia on the night of December 29.

Lavrov:

🗣️ “Russia’s negotiating position will be revised taking into account the Kyiv… pic.twitter.com/GurqsmcYgp

— Status-6 (Military & Conflict News) (@Archer83Able) December 29, 2025

There’s a likelihood that the capital of Kiev is going to have a bad night, as this means more missiles and drones could rain down on the city once again, possibly even targeting key government headquarters buildings – as happened at least once before.

* * *

European defense stocks moved lower on Monday after President Trump and Ukrainian President Volodymyr Zelensky made progress in talks aimed at ending the Russia-Ukraine conflict.

On Sunday evening, after the talks, Trump told reporters, “I do think we’re getting a lot closer, maybe very close.”

Zelensky told reporters the peace talks were a “really great discussion” in which U.S.-Ukraine security guarantees were “100% agreed” upon. He added, “We agree that security guarantees are a key milestone in achieving lasting peace.”

Zelensky said Trump will host another meeting next month with Ukrainian and European officials to advance a peace deal that is nearing completion. Trump confirmed that he spoke with Russian President Vladimir Putin ahead of the Zelensky talks and plans to hold another call with Putin.

The full summary of the Trump-Zelensky “great meeting” is available here.

The Goldman Sachs European Defense Index fell by roughly 2% on Monday following overnight developments.

Larger timeframe. 

Since Russia invaded Ukraine in early 2022, the GS European Defense Index has delivered outsized annual returns.

UBS analyst Tricia Wright commented on the moves:

“Defense stocks were among the top fallers in Europe after the Trump-Zelensky meeting. The Italian defense group Leonardo declined by 4.4%, topping the STOXX Europe 600 fallers list, while Germany’s Rheinmetall and Hensoldt were both down by about 3%. Talks to end the Ukraine war on Sunday spurred fresh optimism from U.S. President Trump, yet there are no clear signs that the two sides have reached a breakthrough, as Russia continues to push for land gains and reject a ceasefire,” The Wall Street Journal reported.

Even as a potential peace deal in Eastern Europe nears, we expect defense stocks to remain elevated given record defense spending.

UN Secretary-General António Guterres recently wrote in a report on the rise in military expenditure: “The world is spending far more on waging war than on building peace.”

Authored by Jeremy Portnoy via RealClearInvestigations,

Topline: A then-employee at the City of Austin’s energy utility allegedly paid $980,000 in taxpayer funds to fictional companies with bank accounts belonging to his family members, according to a new report from the city auditor.

Key facts: Mark Ybarra was given a city credit card from 2018 to 2023 to hire repair companies for city buildings. He used it to pay 30 different vendors, but the city auditor could only verify that eight of them were real companies, according to the report. 

Ten of the companies reportedly had the same address, which the city auditor said is the home of one of Ybarra’s relatives. The businesses received $400,000 from the city. One of them had Ybarra’s email address listed as its contact information, according to the report.

The remaining $580,000 went to businesses that “appeared to be fake,” many of which were missing basic information like an address and phone number, according to the report. 

Ybarra resigned in October 2023 after Austin Energy officials asked questions about the invoices, according to the report. He was indicted for felony theft this September. 

Records obtained by Open the Books show Ybarra earned $534,797 in taxpayer-funded salary during the six years he was allegedly defrauding the city.

The city auditor claimed the alleged fraud went undetected because of Austin Energy’s “inefficient purchasing controls.” Most of his purchases were approved by former Facility Service Supervisor Sammy Ramirez, who never raised questions about the missing addresses and phone numbers on Ybarra’s invoices, according to the report.

Mark Ybarra’s wife, Ambrosia Ybarra, worked at the city’s Watershed Protection Department. She was questioned by the city auditor about her husband’s invoices but allegedly left the interview before it was over, according to the report. She resigned this November.

Ambrosia Ybarra made $70,174 in 2024. Ramirez made $87,262 in 2022, his last year of employment, but made as much as $104,698 in 2021.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com. 

Summary: Austin’s scandal is yet another reminder that the government agencies spending huge amounts of money relative to the population of the areas they serve are often the ones most vulnerable to mistakes and fraud. 

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

President Trump on Friday in a radio interview disclosed something which missed the attention of the US and global media. He let slip that a large land site had been knocked out by a strike from US forces in the Caribbean – however without specifying which country was hit (whether Venezuela or perhaps Colombia).

Trump may have actually assumed the attack which he disclosed publicly for the first time was already being reported on, but it had not. He was being interviewed by John Catsimatidis, the Republican billionaire who owns the WABC radio station in New York on his The Cats & Cosby Show, and the two were talking about the Venezuela campaign. 

The United States had knocked out “a big facility” last week, Trump described somewhat vaguely, in apparent reference to a drug facility on the Latin American coast. 

“They have a big plant or a big facility where the ships come from,” Trump said, though he did not explicitly identify the exact location or even country attacked. “Two nights ago we knocked that out.”

According to the full remarks in context, the president said:

“But every time I knock out a boat, we save 25,000 American lives. It’s very simple. And what’s happening is they’re having a hard time employment-wise, they can’t get anybody.

And we just talked out, I don’t know if you read or you saw, they [Venezuela] have a big plant or a big facility where the ships come from. Two nights ago, we knocked that out. So we hit them very hard. But drugs are down over 97 percent. Can you believe it?”

Some unnamed American officials suggested to the New York Times that the Commander-in-Chief was referring to a drug facility in Venezuela: 

Trump did not name the location of the facility, though American officials told the New York Times that the president was referring to a drug facility in Venezuela that was eliminated. The president’s comment is the only report of such an attack. No other Latin American government, including Venezuela, has disclosed a strike of this sort.

But information or confirmation other than that disclosure remains a mystery, as neither the CIA nor Pentagon have commented, as the NY Times notes:

If Mr. Trump’s suggestion that the United States had struck a site in the region proves accurate, it would be the first known attack on land since he began his military campaign against Venezuela. U.S. officials declined to specify anything about the site the president said was hit, where it was located, how the attack was carried out or what role the facility played in drug trafficking. There has been no public report of an attack from the Venezuelan government or any other authorities in the region.

Listen to the audio below:

Trump speaking on Venezuela appear to suggest the U.S. has already carried out land strikes. Listen for yourself.

“But every time I knock out a boat, we save 25,000 American lives. It’s very simple. And what’s happening is they’re having a hard time employment-wise, they can’t… pic.twitter.com/uySMAu23Bi

— Faytuks Network (@FaytuksNetwork) December 28, 2025

Speculation has quickly begun in an effort to identify which facility was hit and what damage was done. Some analysts have highlighted the below explosion reported by local Venezuelans, given the timing fits (Wednesday, Dec. 24).

The local reporter’s commentary reads according to (machine) translation, A new large explosion was reported from the Industrial Zone of the San Francisco municipality, Zulia state, in the early morning of this December 24.

#24Dic📹#Sucesos Una nueva gran explosión se reportó desde la Zona Industrial del municipio San Francisco, estado Zulia, la madrugada de este 24 de diciembre.

Vía: @Jhormancruz1#SanFrancisco pic.twitter.com/KM74H69lRH

— El Martillo Venezuela (@ElMartilloVen) December 24, 2025

This is in Venezuela’s second largest city, in the northwest corner of the country, and near the coast.

If the Pentagon did indeed take out a “large facility” on land, as Trump’s words indicate, it suggests the US may not initiate a major war in quick ‘shock and awe’ style, but will opt for sporadic strikes which limit military action to specified targets. So the ‘war’ might be a slow burn after all – which also means the Pentagon force build-up in the Caribbean is there to stay for a while.

Authored by Bryan Jung via PJMedia.com,

A venture capital firm run by Rep. Ilhan Omar’s (D-Minn.) husband quietly scrubbed important names from its website, as the Minnesota congresswoman faces mounting questions on her sudden wealth amid a multi-billion Somali welfare fraud scheme in her district.

Rose Lake Capital, the $60 million dollar firm managed by Omar’s husband, political consultant Tim Mynett, deleted key officers from its website, including former Obama Administration officials, reported the New York Post in an exclusive.

The news comes as Somali communities across multiple states are currently facing scrutiny over dozens of similarly fraudulent schemes that have seen billions of taxpayer dollars flowing overseas, with some even going to jihadist terrorist groups in Somalia.

Nine billion dollars from Minnesota’s social services programs were illegally pocketed via scams mostly perpetrated by local members of the Somali community in Omar’s congressional district, according to an investigation by the U.S. Department of Justice.

The Minnesota congresswoman, a member of the “the Squad” who was born in Somalia, is an outspoken figure on the far-left wing of the House Democratic caucus

Omar suspiciously went from holding tens of thousands in debt to earning tens of millions in a single year, not long after taking office in 2019 on a congressperson’s annual salary of $174,000, the Washington Free Beacon reported in September. 

Her critics have recently pointed to the fact that she was the prime mover in introducing the federal legislation that enabled what the DOJ has called the largest fraud committed in the United States during the pandemic.

Minnesota’s Democrat governor and failed vice-presidential candidate Tim Walz is continuing to face criticism for his part in the mismanagement and alleged complicity in the debacle, as calls for federal charges against him grow louder.

The Somalia-born Omar introduced in 2020 the MEALS Act, which severely weakened oversight of government-sponsored children’s meals programs during the pandemic.

This allowed criminals to fraudulently claim that they served millions of meals without verification, while pocketing millions of dollars in government subsidies, say critics.

The $9 billion stolen is nearly equivalent to the entire economy of Somalia, whose GDP was under $12 billion last year, according to the World Bank.

The total losses accounts for roughly half of the $18 billion in total federal funds provided to the Minnesota-run services since 2018, say federal prosecutors.

Meanwhile, while one of the largest government subsidies frauds in American history was underway, Mynett launched Rose Lake Capital, his venture capital management firm, in 2022.

Mynett’s firm saw its reported value skyrocket from less than $1,000 in 2023, to between $5 million and $25 million by the end of the year, despite its address remaining a WeWork office in Washington, D.C., according to its LinkedIn page.

Rose Lake Capital apparently was able to amass significant assets under management through its “deep global networks built from on-the-ground work in more than 80 countries,” an amount which is normally unheard of in the industry.

Her husband’s other business, eStCru, was a failed California winery venture that has also faced fraud allegations and, strangely enough, was also listed as operating out of a WeWork office.

Mynett’s winery, which was worth between $1 million and $5 million in 2024, agreed to an out-of-court settlement with a former investor in November who accused Omar’s husband of swindling him out of $900,000, as he “fraudulently misrepresented … that estCru, LLC was a legitimate company.”

The winery was only worth between $15,000 and $50,000 in Omar’s financial disclosure report in 2022, making its 9,900%  earnings windfall the following year suspect, say critics.

About 90 Minnesotan Somalis have been arrested so far, including at least three suspects with direct ties to Omar, though she has not been charged.

“The magnitude cannot be overstated,” First Assistant U.S. Attorney Joe Thompson told reporters last week.

 “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud,” continued Thompson.

One of those charged was Salim Ahmed Said, the co-owner of Safari Restaurant in Minneapolis where Omar held her 2018 congressional victory party. He was convicted in federal court in August of stealing more than $12 million, the DOJ stated on its website.

Said received $12 million in federal payouts to serve 3.9 million meals to hungry children during the 2020 pandemic, but instead spent it on a $2 million mansion in Minneapolis and a $9,000 shopping spree at Nordstrom, said the feds.

President Donald Trump asked on his Truth Social account when the news of the allegations first broke: “Does Ilhan Omar know these people? Are they from her wonderfully managed Home Country of Somalia?”

“Somali gangs are terrorizing the people of that great state, and billions of dollars are missing. Send them back to where they came from,” the president added.

There is even a video on X of Omar praising Said at his restaurant, during the height of his scam, in front of reporters .

“Every day Safari provides 2,300 meals to children and their families,” Omar said in Somali while handing out food in front of the news cameras.

Another friend, Guhaad Hashi Said, who worked on the congresswoman’s campaign in 2018 and 2020, also pleaded guilty in August for running a fake food site called Advance Youth Athletic Development, which was supposed to serve 5,000 meals a day to kids, but led to $3.2 million being diverted from the food program and into his pockets.

Omar’s campaign received $7,400 in direct donations from the three convicted fraudsters, but the congresswoman who has publicly claimed to represent the interests of the people of Somalia now claims that she returned those donations since the scandal broke.

After federal prosecutors charged eight more suspects, mostly of Somali descent, between September and October for their participation in the subsidies fraud schemes, several names and bios of Rose Lake Capitals’s nine officers and advisors were removed from the firm’s website. 

They included lobbyist and former Obama ambassador to Bahrain Adam Ereli; former Sen. Max Baucus, who served as Obama’s ambassador to China; DNC finance chair associate Alex Hoffman; former DNC treasurer William Derrough; and former Amalgamated Bank CEO Keith Mestrich.

Mestrich once boasted that Amalgamated was “the institutional bank of the Democratic Party.”  

None of these officers were charged in the fraud, according to the New York Post, which also noted that the Treasury and Justice Departments were already investigating alleged money laundering by Omar and Mynett.

Upon taking office in 2019, Omar declared a net worth of between negative $25,000 and negative $65,000, with no assets and only carrying student and car debt.

Her personal assets are now between $6 million to $30 million, according to her latest financial disclosure, despite dismissing claims that she is a millionaire as “ridiculous” and “categorically false.” 

“There’s a lot of strange things going on,” Paul Kamenar, counsel to the National Legal and Policy Center, told the New York Post. 

“She was basically broke when she came into office and now she’s worth perhaps up to $30 million.…She needs to come clean on these assets,” said Kamenar.

Stocks are extending their modest losses from their pre-Christmas record as another shortened trading week starts. As late last week, much of the market action is in precious metals, with silver first smashing through $80 for the first time before sliding while gold also retreated from Friday’s all-time high and platinum pulling back sharply after surging nearly 10%, and hitting limit down in China along with Platinum.As of 8:15am, S&P 500 futures were 0.3% lower while Nasdaq 100 contracts were down 0.4% as Tesla and Nvidia slid more than 1% to lead premarket losses among Mag 7. Europe’s Stoxx 600 was little changed following talks about a peace deal for Ukraine that yielded no breakthrough. Treasuries gained with 10Y yields down 0.2bps from Friday’s close to 4.11% while the BBG dollar index rose. Bitcoin briefly surged back over $90,000 before getting summarily slammed right back down. Trading is likely to be light again, accompanied by a threadbare economic calendar and the absence of major planned corporate events. 

In premarket trading, Tesla and Nvidia underperform Mag 7, putting pressure on US stock futures (Tesla -1%, Nvidia -1%, Alphabet -0.5%, Meta -0.4%, Apple -0.2%, Microsoft -0.1%, Amazon +0.1%)

• Silver stocks including Coeur (CDE) and Hecla (HL) fall as the precious metal retreated sharply after smashing through $80 an ounce for the first time. Coeur -4.5%, Hecla -4%
• Coupang (CPNG) gains 2% after offering compensation worth more than $1 billion to all customers affected by South Korea’s biggest-ever data breach.
• DigitalBridge Group (DBRG) soars 33% as SoftBank Group is said to be in advanced talks to acquire the private equity firm that invests in assets such as data centers.
• Energy Fuels (UUUU) gains 3% after saying it exceeded 2025 uranium production and sales guidance.
• Lululemon Athletica Inc. (LULU) rises 0.9% after the WSJ reported that founder Chip Wilson is launching a proxy fight at the retailer.

In corporate news, Japan’s SoftBank is in advanced talks to acquire DigitalBridge Group, a private equity firm that invests in assets such as data centers, according to people with knowledge of the matter.

With stock trading rather subdued, precious-metal price swings remained the overnight highlight, with silver spiking as much as 6% on Monday, before profit takers stepped in to send it back below Friday’s close. As a result, silver retreated sharply after smashing through $80 an ounce for the first time, halting a record-breaking rally powered by Chinese speculative demand.

The white metal fell by more than 6% as it took a roller-coaster ride Monday after earlier hitting $84 an ounce. Surging Chinese investment demand has pulled the metal higher, with premiums for spot silver in Shanghai rising above $8 an ounce over London prices, the biggest spread on record. Elon Musk fed the early momentum with his reply to a tweet about Chinese export restrictions due to start on Thursday, saying on X over the weekend: “This is not good. Silver is needed in many industrial processes.”

Silver, which had risen more than 40% since the start of the month through Friday, has been spurred like other precious metals this year by elevated central-bank purchases, inflows to exchange-traded funds and three rate cuts by the Fed. Lower borrowing costs burnish the attraction of commodities and traders are betting on more rate cuts in 2026. Frictions in Venezuela and strikes by Washington on Islamic State targets in Nigeria have also added to the haven appeal of metals. With silver inventories near their lowest on record, there’s a risk of supply shortages that could impact multiple sectors.

Bank of America CEO Brian Moynihan said he expects the Trump administration to de-escalate trade tensions next year after tariffs sent shockwaves through the US economy in 2025. He said in an interview aired Sunday on CBS News that BofA now sees “de-escalation, not escalation,” with an average of 15% tariffs and higher rates for countries that won’t commit to US purchases or lowering non-tariff barriers.

Despite the market closing out 2025 at an all time high, tariffs and other curve balls made it a brutal year for stock pickers. About $1 trillion was pulled from active equity mutual funds over the year, according to estimates from Bloomberg Intelligence using ICI data, marking an 11th year of net outflows and, by some measures, the steepest of the cycle. By contrast, passive equity exchange-traded funds got more than $600 billion.

“The question of ‘is AI a bubble’ will remain front and center for investors in 2026,” wrote Richard Flax, chief investment officer at Moneyfarm. “The scale of current investment and the pace of innovation mean that even the sceptics cannot ignore its influence on both markets and the real economy.

In geopolitical news, President Donald Trump said he made “a lot of progress” in talks with Ukrainian President Volodymyr Zelenskiy over a possible peace deal, but that it might take a few weeks to get it done.

Europe’s Stoxx 600 was little changed following talks about a peace deal for Ukraine that yielded no breakthrough. Miners outperform, driven by surging metals prices, while industrial goods and services stocks are among the biggest laggards. Here are some of the biggest movers on Monday:

• Fresnillo shares climb as much as 5.3% on Monday to the highest level on record, leading a rally in mining stocks driven by surging metals prices.
• International Personal Finance rises as much as 6.8% in London trading after Basepoint agreed to buy the consumer finance company in a deal valuing IPF at about £543 million.
• BioGaia shares gain as much as 4.2% as DNB Carnegie lifts its price target on the Swedish probiotics firm and says the stock may break out on the upside from its five-year trading range in 2026 as margins improve.
• Bonesupport shares advance as much as 4.5% on Monday as DNB Carnegie repeats its positive stance on the Swedish medical equipment firm and says valuation seems attractive given potential for growth.
• Leonardo shares fall as much as 4.7% after US President Donald Trump said he made “a lot of progress” in talks with Ukrainian President Volodymyr Zelenskiy over a possible peace deal.

Earlier in the session, Asian equities extended gains for a seventh day, the longest winning streak in three months, buoyed by advances in tech firms. The MSCI Asia Pacific Index climbed as much as 0.6%, boosted by TSMC, SK Hynix and Samsung Electronics. South Korea led gains in the region, while benchmarks in Taiwan and Tokyo also rose. China’s markets reversed earlier gains despite Beijing’s pledge to broaden its fiscal spending base in 2026. Meanwhile, mining shares across Asia climbed after silver rallied to a new peak, before sliding. 

Elsewhere in commodities, copper, fueled by concerns over tighter supply, pushed hard toward $13,000 a ton, setting a fresh record on the London Metal Exchange.  Oil also rose as the US-led talks failed to yield a breakthrough and as China vowed to support economic growth next year. Brent crude is still on track for a fifth monthly drop in December, which would be the longest losing streak in more than two years.

Bitcoin topped $90,000 before erasing the gain. A gauge of the dollar was steady. US Treasuries strengthened across the curve, with the 10-year yield falling one basis point to 4.12%.

In rates, treasuries hold small gains on lower-than-average futures volumes to begin the year’s final week, amid similar price action in most European bond markets where trading resumed after Friday’s holiday. Yields are lower by about 1bp-2bp across tenors with the curve slightly flatter; 10-year declined as much as 2.5bp to 4.10%, lowest level since Dec. 18. Treasuries remain headed for a small monthly loss amid signs of US economic resilience, yet still on pace for their best annual performance since 2020 following three Fed interest-rate cuts in response to weakening labor-market conditions

The US economic data calendar includes November pending home sales (10am) and December Dallas Fed manufacturing activity (10:30am); no Fed speakers are scheduled until Jan. 3

Market Snapshot

• S&P 500 mini -0.3%,
• Nasdaq 100 mini -0.4%,
• Russell 2000 mini little changed
• Stoxx Europe 600 little changed,
• DAX -0.2%,
• CAC 40 little changed
• 10-year Treasury yield -2 basis points at 4.11%
• VIX +1.2 points at 14.82
• Bloomberg Dollar Index little changed at 1200.67,
• euro little changed at $1.1777
• WTI crude +2% at $57.89/barrel

Top Overnight News

• Ukraine Seeks 50-Year U.S. Security Guarantee, Trump Offers 15: WSJ
• China stages record drills designed to encircle Taiwan: RTRS
• Chinese Military Drills Send ‘Stern Warning’ After U.S. Arms Sales to Taiwan: WSJ
• Why a Chinese Attack on Taiwan Would Be Japan’s Problem: WSJ
• China Swipes at Trump in Move to Be Thai-Cambodia Peacemaker: BBG
• Netanyahu Meets Trump as Gaza Ceasefire Approaches Crossroad: BBG
• US pledges $2 billion in humanitarian support to UN, State Department says : RTRS
• Justice Department Using Fraud Law to Target Companies on DEI: WSJ
• Every Wall Street Analyst Now Predicts a Stock Rally in 2026: BBG
• Xi’s Triumphant Year Staring Down Trump Belies Woes in China: BBG
• Lululemon Founder Launches Proxy Fight to Change Board: WSJ
• Copper Rallies to Record Near $13,000 in London on Supply Fears: BBG
• Ph.D.s Can’t Find Work as Boston’s Biotech Engine Sputters: WSJ
• Publicly Traded Private-Credit Funds Set for Worst Year Since 2020: BBG
• Canada Pensions Overseeing $1.2 Trillion Revamp Private Equity Model: BBG
• SoftBank Nears Deal for Data Center Investment Firm DigitalBridge: BBG
• How a Reclusive Ex-Glencore Trader Became Indonesia’s Nickel King: BBG

US Event Calendar

• 10:00 am: Nov Pending Home Sales MoM, est. 0.96%, prior 1.9%
• 10:30 am: Dec Dallas Fed Manf. Activity, est. -6, prior -10.4

European defense stocks moved lower on Monday after President Trump and Ukrainian President Volodymyr Zelensky made progress in talks aimed at ending the Russia-Ukraine conflict.

On Sunday evening, after the talks, Trump told reporters, “I do think we’re getting a lot closer, maybe very close.”

Zelensky told reporters the peace talks were a “really great discussion” in which U.S.-Ukraine security guarantees were “100% agreed” upon. He added, “We agree that security guarantees are a key milestone in achieving lasting peace.”

Zelensky said Trump will host another meeting next month with Ukrainian and European officials to advance a peace deal that is nearing completion. Trump confirmed that he spoke with Russian President Vladimir Putin ahead of the Zelensky talks and plans to hold another call with Putin.

The full summary of the Trump-Zelensky “great meeting” is available here.

The Goldman Sachs European Defense Index fell by roughly 2% on Monday following overnight developments.

Larger timeframe. 

Since Russia invaded Ukraine in early 2022, the GS European Defense Index has delivered outsized annual returns.

UBS analyst Tricia Wright commented on the moves:

“Defense stocks were among the top fallers in Europe after the Trump-Zelensky meeting. The Italian defense group Leonardo declined by 4.4%, topping the STOXX Europe 600 fallers list, while Germany’s Rheinmetall and Hensoldt were both down by about 3%. Talks to end the Ukraine war on Sunday spurred fresh optimism from U.S. President Trump, yet there are no clear signs that the two sides have reached a breakthrough, as Russia continues to push for land gains and reject a ceasefire,” The Wall Street Journal reported.

Even as a potential peace deal in Eastern Europe nears, we expect defense stocks to remain elevated given record defense spending.

UN Secretary-General António Guterres recently wrote in a report on the rise in military expenditure: “The world is spending far more on waging war than on building peace.”