New Federal Guidelines for Booze Got It Right


Group of people drinking alcohol in a bar | Illustration: Eddie Marshall | Nano Banana

For well over a year and across two different presidential administrations, a behind-the-scenes battle played out in Washington, D.C., over the future of Americans’ drinking habits.

At least, that’s what the combatants believed were the stakes. On one side, anti-alcohol activists and public health busybodies tried to rig the newest edition of the federal government’s dietary guidelines by creating a new review panel specifically for the alcohol-centric recommendations, then stuffed that new panel with experts on addiction and mental health rather than, you know, dietitians. On the other side, members of Congress and various elements of the alcohol industry cried “foul” and demanded the government follow a process rooted in science and proper procedure. (If all of that sounds thrilling to you, I have a Reason cover story to recommend.)

In reality, the outcome of that fight probably matters less than anyone on the inside believes. There are many other factors influencing how much individual Americans drink (or whether they drink at all) that are probably more important than a set of guidelines drawn up by federal bureaucrats—and most well-known for being wrong.

Still, this week’s announcement of the new federal dietary guidelines offers a chance to call a truce in this conflict. It might also suggest a better way forward for the dietary guidelines as a whole.

The anti-alcohol activists pushed for a major change in the longstanding guideline that says men should consume no more than two drinks per day and women should stop at one. They wanted that recommendation reduced to one drink per day or to fall in line with the new World Health Organization guidelines that say even that much booze should be viewed as harmful.

Those on the other side favored no change to the existing guidelines, which reflect a scientific consensus that moderate drinking is an acceptable health risk (while heavier drinking is, of course, more hazardous).

In some ways, you can think of this as a debate over the purpose of the dietary guidelines themselves. Are they supposed to be a set of rules for avoiding all risk, or a set of, well, guidelines to avoid habits that cross into being dangerously unhealthy?

If you think it’s the latter—as I tend to, admittedly—then the federal government actually got this one right.

The new dietary guidelines released this week advise Americans to “consume less alcohol for better health,” and also point out that there are some people who “should not drink at all.”

You’ll notice that’s a pretty significant change from the longstanding “two drinks/one drink” rule, and one that seems like it should make the anti-booze crowd happy, as it acknowledges that even moderate drinkers could be healthier by cutting back.

For the record, they aren’t actually happy about it. Mike Marshall, CEO of the U.S. Alcohol Policy Alliance, calls this “a win for Big Alcohol” because the guidelines also did not point out that alcohol has a link to cancer.

Still, politics is about incremental victories, and this is literally a federal guideline that says people should incrementally reduce their drinking. I understand why that won’t satisfy people who believe the first sip of alcohol is an unacceptable risk, but it seems like pretty good guidance for the vast majority of us.

In fact, the new alcohol recommendation reflects a basic reality about life that should be embedded in all the federal dietary guidelines.

“In the best-case scenario, I don’t think you should drink alcohol,” said Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, during Wednesday’s press conference. But he also acknowledged that there are a lot of good reasons to tip back a glass once in a while. “Alcohol is a social lubricant that brings people together,” he added. “And there’s probably nothing healthier than having a good time with friends in a safe way.”

Life is full of trade-offs and nuance. Isn’t acknowledging that a lot more useful than trying to tell people that one or two drinks are fine, but the next one is dangerous?

The risks that come from drinking vary widely from person to person based on a lot of other factors. The federal dietary guidelines, if we must have such a thing, should reflect that reality.

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Justice Barrett, Trump v. Slaughter, and Presidential Removal Power from 1921 to 1933

In two previous blog posts, I argued that every President from 1881 to 1921 had successfully defended the President’s power to remove at will all officers exercising executive power and that no independent agencies in the modern sense of the term had been created between 1881 and 1921. In this blog post, I will argue that every President from 1921 to 1933 also successfully defended presidential removal power at will over all executive officers and that no independent agencies in the modern sense of the term were created between 1921 and 1933 prior to Humphrey’s Executor v. United States (1935). My argument grows out of my co-authored book with Professor Christopher Yoo, who deserves all the credit and none of the blame for anything in this blog post. Steven G. Calabresi & Christopher S. Yoo, The Unitary Executive: Presidential Power from Washington to Bush (Yale University Press 2008).

Warren G. Harding served as President of the United States from 1921 to 1923. As President, Harding vigorously asserted his power over the entities that became independent after the decision in Humphrey’s Executor v. United States (1935). As Christopher Yoo and I wrote, “Harding communicated his administration’s policy agenda to members of the Interstate Commerce Commission (ICC) and the Shipping Board requiring commissioners to submit their undated resignations before receiving their appointments, ignoring the statutory provisions [that might have been read as limiting presidential removal power], and threatening to remove Shipping Board members who disagreed with his policies. Even more important were his efforts to reconstitute … agencies with commissioners more in tune with his pro-business orientation. Harding made a number of transformative appointments to the ICC, the Federal Reserve Board, the U.S. Tariff Commission, and the Federal Trade Commission that effectively brought the regulatory policy of the Progressive Era to an end.” Calabresi & Yoo, at 262.

Harding endorsed an executive branch reorganization proposal that “recommended that the independent agencies be consolidated into the executive department.” Id. Although this plan failed, Harding succeeded in creating a Bureau of the Budget—a plan initiated by Taft and then supported by Woodrow Wilson. “Under the Budget and Accounting Act of 1921, ‘the Bureau of the Budget was part of the executive branch, reporting to the president. The budget director was not to take instruction from cabinet officers but only from the president, which gave the director the authority to plan a responsible budget without constant interference.’ The impact on the president’s ability to control his administration was palpable and immediate. Under the leadership of the very able Charles Dawes, the Bureau of the Budget was able to save more than one billion dollars during its first year of operation. Even more important, the bureau allowed the president to exert far more control over federal spending than ever before.” Id. at 262-263. The Bureau of the Budget, which began as a part of the Treasury Department under Harding was moved to the White House by President Franklin D. Roosevelt and was then renamed the Office of Management and Budget (OMB) under President Richard M. Nixon. It has been one of the principal tools by which modern presidents control the unitary executive branch.

Unfortunately, President Harding had to pay a steep price to get the Bureau of the Budget enacted into law by Congress. “Attached to the legislation creating the Bureau of the Budget was a provision creating the General Accounting Office (GAO), headed by a Comptroller General appointed to a fifteen-year term and removable by joint resolution …. Because a joint resolution necessarily requires the president’s signature to be effective, this provision guaranteed presidential participation in any removals.” Id. at 263. Congress was, however, unconstitutionally given a role in the removal process of the Comptroller General, which was precisely “the problem[] that had induced [Woodrow] Wilson to veto the previous version of the Budget and Accounting Act, notwithstanding his avid support for the” creation of the Bureau of the Budget. Id.

Ultimately, the creation of the Bureau of the Budget, its move by FDR to the White House staff, and its transformation into OMB—which became the President’s principal unitary executive tool for controlling the executive branch proved to be far more consequential than Congress’s reserving a role for itself in removing GAO Comptrollers General. Overall, this unsavory “deal” greatly advanced the unitary executive by enhancing enormously the President’s control over both the executive branch, the regulatory state, and the budget. On balance, the Harding presidency thus enhanced the unitary executive rather than setting it back.

The Harding Administration defended the constitutionality in the lower courts of President Wilson’s removal of Postmaster Frank Myers without Senate approval, which led to the great win for presidential removal power in Myers v. United States (1926) under Harding’s successor as President.

Calvin Coolidge served as President from 1923 to 1929. The great removal power victory of his presidency was the winning of Myers in the Supreme Court with a magnificent, scholarly majority opinion by Chief Justice William Howard Taft, which recognized an unlimited presidential removal power in a seventy-page opinion. The government’s brief in Myers claimed the Executive Power Vesting Clause of Article II granted the president unlimited removal power over officers exercising executive power, and the majority opinion wrote that conclusion into constitutional law in the U.S. Reports. Id. at 267-268. The Coolidge Administration’s brief also recounted the entire history of disputes over the removal power from 1789 to 1926. “The consistency of the refusal by previous presidents to accept congressionally imposed limits on presidential removals played a large role in Chief Justice Taft’s opinion. In light of the opposition offered by Presidents Jackson, Grant, Cleveland, Wilson, and Coolidge, [the Court said] any limits on ‘the independent power of the President to remove … can not be said really to have received the acquiescence of the executive branch,” just as Christopher Yoo and I claimed in our co-authored book. Id. at 268.

“Coolidge was more than willing to fight to assert the president’s sole right to control the execution of the federal laws. For instance, the degree of influence he exerted over the [supposedly] independent agencies indicates that he envisioned them as being subject to his will. Consistent with congressional statements that the Federal Trade Commission and other commissions ‘should subordinate their judgment to the opinions of the Executive’ and that ‘they properly were mere agencies to register the policies of the administration,’ Coolidge attempted to dominate the … agencies by influencing the rediscount policy of the Federal Reserve Board, dictating policy to the U.S. Shipping Board, requiring that commissioners submit undated letters of resignation before appointing them, and threatening to remove commissioners who disagreed with his policies. The fact that the threatened removal of these commissioners failed to evoke any congressional protests suggests that Congress also did not regard the statutory removal restrictions as vitiating any of the president’s constitutional powers.” Id. at 265-266.

“Coolidge further exerted control over the [supposedly] independent agencies by appointing commissioners who were sympathetic to his pro-business policies. These efforts culminated with the appointment of William E. Humphrey to the chairmanship of the FTC. Humphrey bragged about the impact of his appointment, noting that ‘if [the FTC] was going east before, it is going west now.’ He added, ‘Do you think I would have a body of men working here under me that did not share my ideas about these matters? Not on your life. I would not hesitate a minute to cut their heads off if they disagreed with me. What in the hell do you think I am here for?'” Id. at 266.

“It is clear that both Harding and Coolidge moved aggressively to turn the direction of the [supposedly] independent agencies around one hundred and eighty degrees. While the merits of the laissez-faire policy they pursued are open to dispute, there can be no question but that Harding and Coolidge ensured that these agencies acted in accordance with the vision determined by the president, notwithstanding the supposed statutory guarantees of independence. Humphrey’s aggressive statements about his own role in implementing Coolidge’s laissez-faire policies certainly help to explain why FDR was so eager to replace Humphrey in the litigation that ultimately became Humphrey’s Executor v. United States.” Id. at 266.

Coolidge also used his powers under the Bureau of the Budget to slash dramatically federal spending. In 1927, the Federal Radio Commission was created, which would become the Federal Communications Commission under President Franklin D. Roosevelt. “In the wake of the landmark decision in Myers, however, Congress did not even maintain the pretense of including any restrictions on the president’s power to remove commissioners.” Id. at 272.

Herbert Hoover served as President of the United States from 1929 to 1933. “While a member of the Coolidge administration, Hoover had questioned the constitutional propriety of conferring executive powers upon independent agencies, arguing that

“there should be single-headed responsibility in executive and administrative functions.” Hoover elaborated, “The necessarily divided minds of the best board in the world ha[ve] always resulted in failure in executive work. Every member must have a four-way independent responsibility. He is responsible for every act of the board to the country as a whole, to his particular constituency, to his political party and finally to Congress. There is only one responsibility that he does not have and that is to the President of the United States, who, at least under the spirit of the Constitution, should be vested with all administrative authority.

Hoover reiterated these views after assuming the presidency. Addressing the problem of departmental reorganization in his first annual message, Hoover urged that all executive administrative activities should be placed under single-headed responsibility.

“Indeed,” Hoover concluded, “these are the fundamental principles upon which our Government was founded, and they are the principles which have been adhered to in the whole development of our business structure, and they are the distillation of the common sense of generations.”

Hoover assumed full responsibility for all executive policies, issuing directives to the ICC regarding passenger rates and railroad consolidations.” Id. at 273-274.

The original Federal Power Commission (FPC), which today is the Federal Energy Regulatory Commission, was created after the decision in Myers v. United States with no removal restrictions as to the five-member commission. Hoover also fought off a Senate attempt to reconsider its confirmation of three nominees to the FPC arguing that it interfered with his presidential removal power, a fight that he won in court. Id. at 274.

The twelve years of Republican presidencies following the Progressive era ended with Myers having constitutionalized total presidential power to remove at will any officer exercising executive power. All three presidents during this period of time strongly supported this power.

The post Justice Barrett, <i>Trump v. Slaughter</i>, and Presidential Removal Power from 1921 to 1933 appeared first on Reason.com.

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DOJ Sues Arizona, Connecticut For Failing To Hand Over Voter Rolls

DOJ Sues Arizona, Connecticut For Failing To Hand Over Voter Rolls

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

The U.S. Department of Justice (DOJ) said on Jan. 6 that it is suing Arizona and Connecticut for allegedly failing to turn over their full voter registration rolls for federal inspection.

Attorney General Pam Bondi speaks at a press conference in Washington on Dec. 4, 2025. Madalina Kilroy/The Epoch Times

The two new federal lawsuits, which say the two states are hindering federal oversight that is intended to stop election fraud and ensure voter lists accuracy, bring the department’s nationwide total to 23 states plus the District of Columbia.

Before the most recent lawsuits were filed, the DOJ on Dec. 18, 2025, filed lawsuits against Georgia, Illinois, Wisconsin, and the District of Columbia, alleging they failed to produce voter registration lists upon request. Earlier the same month, the DOJ filed similar lawsuits against Delaware, Maryland, New Mexico, Rhode Island, Vermont, and Washington state, also for allegedly not producing the lists upon request.

U.S. Attorney General Pamela Bondi said on Jan. 6 that the DOJ will continue to file lawsuits “to protect American elections.”

“Accurate voter rolls are the foundation of election integrity, and any state that fails to meet this basic obligation of transparency can expect to see us in court,” Bondi said in a statement.

Assistant U.S. Attorney General Harmeet Dhillon of the DOJ’s Civil Rights Division added the department “is committed to safeguarding fair and free elections, and will hold states accountable when they refuse to respect our federal elections laws.”

The lawsuits state that the U.S. attorney general is responsible for enforcing the National Voter Registration Act and the Help America Vote Act, which Congress passed to make sure states have effective voter registration and voter list maintenance programs. The U.S. attorney general also enforces the Civil Rights Act of 1960, which allows her to demand that states produce statewide voter registration lists.

The Arizona lawsuit states that Bondi asked Arizona Secretary of State Adrian Fontes in July 2025 to produce a copy of his state’s voter registration list within 14 days.

Fontes responded, saying he could not comply with the 14-day deadline, and Bondi gave him an extension to September 2025. Two weeks before the new deadline, Fontes informed Bondi that he could not comply because doing so would violate state and federal privacy laws, according to the lawsuit.

The lawsuit alleges Fontes’s refusal to produce the requested records violates the information-production provisions of the Civil Rights Act. The lawsuit asks the court to order Fontes to produce the records.

Arizona Attorney General Kris Mayes told The Epoch Times that “Arizonans’ private voter registration information is not up for grabs.”

“Both state and federal law prohibit the unrestricted release of Arizona’s complete voter registration database to the DOJ,” she said. “My office will continue to work with the Secretary of State to defend the private data of Arizona voters and safeguard our independent election systems.”

Fontes said in a statement on Dec. 19, 2025, that he declined to hand over the voter rolls to the DOJ out of voter privacy concerns.

“Arizona voters also have important privacy rights that cannot be infringed because they choose to exercise their constitutionally protected voting rights,” he said.

The Connecticut lawsuit states that in August 2025 Bondi asked Secretary of State Stephanie Thomas to produce the state’s voter registration list. Thomas handed over some of the requested data and said more data would follow, but she did not send more information.

Bondi sent a letter in December 2025 demanding the list. Later that month, Thomas responded, saying that she could not comply because Connecticut law forbids her from releasing the information sought.

The lawsuit says that Thomas’s failure to hand over the list violates the information-production provisions of the Civil Rights Act, and asks the court to compel Thomas to do so.

Thomas said she was not surprised that Connecticut has been “added to the long list of states being sued on these grounds.”

She told The Epoch Times that as secretary of state, her “foremost responsibility” is to Connecticut voters “who entrust the state and their local election officials with sensitive data so they can participate in our representative democracy without fear that their information will be misused or exposed.”

Connecticut Attorney General William Tong said that Connecticut obeys federal laws and that he was disappointed that his state is being sued.

“We tried to work cooperatively with DOJ to understand the basis for their request for our voters’ sensitive personal information. Rather than communicating productively with us, they rushed to sue,” Tong told The Epoch Times.

Tyler Durden
Thu, 01/08/2026 – 10:45

via ZeroHedge News https://ift.tt/tKSfnjw Tyler Durden

2026 Forecast: ‘Tis The Season For Wild Guesses

2026 Forecast: ‘Tis The Season For Wild Guesses

Authored by Michael Lebowitz via RealInvestmentAdevice.com,

It’s that time of year when every Wall Street analyst posts their forecast for where the S&P 500 will close at the end of 2026. This year, as in every other, Wall Street expects the S&P 500 to post positive returns. As shown below, Bank of America is the most cautious, with a 3% gain, while Deutsche Bank and Capital Economics are the most bullish. On average, the analysts shown below forecast a 10.5% return in 2026, below last year’s 16% but slightly above the longer-term average.

Like Wall Street, we could spitball a 2026 price forecast for the S&P 500, but why? It’s a fruitless endeavor. No one has enough insight into the countless events that will unfold in 2026 and their potential economic, fiscal, and monetary consequences to make a meaningful forecast. Furthermore, even if we had a crystal ball that predicted how the year’s events would unfold, gauging their impact on investor sentiment and, ultimately, on markets would be nearly impossible. 

Instead of offering a forecast for 2026, let us consider the potential events and factors that could influence investor sentiment and move markets this year. Inevitably, no matter how many events we and others are considering today, there will be market-moving ones that are not on anyone’s radar currently.

Perspective Matters

Before we focus on potential events in 2026, let’s review historical returns since 1970 to gain perspective.

The graph below shows annual returns (gold diamonds) and the range between the minimum and maximum returns for each respective year. The average annual return since 1970 has been 9.43%, with an average yearly drawdown of 11.12%. Moreover, the average annual maximum gain was 16.35%, approximately 7% higher than the average closing price. Thus, the market, on average, closes at the 65th percentile of its range.

The second graph below is courtesy of one of our clients. His graph helps us assess whether we can expect a fourth consecutive year of positive returns. As shown, eight straight years is the record, with two four- and five-year winning streaks.

The odds are stacked against positive. Since 1928, there have only been five times that a four-year gains streak occurred.

Beware Of Valuations

Valuations are stretched! The first graphic below, courtesy of Goldman Sachs, shows that 12-month forward P/E ratios are significantly elevated globally. The second from Crestmont indicates that the average of four widely used valuation techniques is at a record high.

Current valuations should serve as a constant reminder throughout 2026 to avoid complacency. While caution may be rewarded this year, we must also bear in mind that valuations make poor short-term timing tools.

The first graph below shows the extent to which the CAPE10 valuation at 39 is stretched. Based on historical correlations between valuations and returns, we should expect negative real returns over the next 10 years. However, the second graph indicates that returns of +/- 25% are possible in 2026.

2026 may be the year that valuations normalize, thus resulting in a down year. Even if that is the case, we must recognize that market valuations and those of individual stocks and sectors can differ significantly.  Some sectors are less expensive than others and may perform better in a down market. For example, the graph below, courtesy of Dimensional, shows that large-cap price-to-book ratios are at record highs, whereas those for small-cap value companies are at the midpoint of their range over the last 25 years.

Might 2026 be the year where value comes back into vogue, or will valuations, especially for the largest of stocks, get even more extreme?

QE And Liquidity

Last December, the Fed reintroduced QE under the guise of Reserve Management Purchases (RMP). The action is intended to supply the market with liquidity. Per the Fed’s Statement Regarding RMP:

The Desk plans to release the first schedule on December 11, 2025, with a total amount of RMPs of approximately $40 billion in Treasury bills; purchases will start on December 12, 2025. The Desk anticipates that the pace of RMPs will remain elevated for a few months to offset expected large increases in non-reserve liabilities in April. After that, the pace of total purchases will likely be significantly reduced in line with expected seasonal patterns in Federal Reserve liabilities.

Simply put, liquidity in the banking system was becoming scarce as reserves declined. To avoid worsening liquidity conditions, the Federal Reserve is injecting reserves into the banking system.

The question for investors is whether the $40 billion in monthly reserves, intended to last “a few months,” is sufficient to offset the expected decline in liquidity over that period.

If it’s not, then the markets may come under pressure as liquidity wanes.  

Conversely, if you think the Federal Reserve’s actions will boost reserves meaningfully, our article “QE Is Back” may offer a practical trading blueprint for the first few months of 2026. The article identifies which stock market indexes, sectors, and factors are strongly correlated with bank reserves. The table below, from the article, indicates that transportation, materials, consumer-discretionary, financial, and technology stocks could benefit most from a reserve increase. Conversely, the utilities, energy, and staple sectors offer little correlation.

Will QE once again prove to be a driving force for the stock market?

Powell Exits

Jerome Powell’s term as Fed Chair ends in May 2026, and Trump’s appointment of a new Chair is being closely watched. The new Chair’s stance on the trade-offs between inflation and labor-market weakness could significantly alter investor sentiment.

The two front-runners for Powell’s chair are Kevin Warsh and Kevin Hassett. We compared the two potential nominees in our Daily Commentary on December 17th–

Warsh is viewed as more hawkish than Hassett. He has frequently mentioned the inflation risk associated with dovish monetary policy. Moreover, as we noted above, he has expressed skepticism about aggressive QE. Conversely, Hassett, viewed as dovish, actively advocates deeper rate cuts to stimulate growth.

Kevin Warsh adheres to a Milton Friedman-style logic: inflation is a function of excessive money-supply growth. Based on recent speeches, Hassett is focused on growth-oriented easing and is not overly concerned with inflation.

Hassett likely appeals more to President Trump because of his dovish views. However, Kevin Warsh lends greater credibility to the Federal Reserve’s promise to reduce inflation. Additionally, Warsh is more likely to improve sentiment in the bond market, thereby lowering long-term yields.

Initially, the bond market is likely to be more affected than the stock market by President Trump’s decision regarding the next Federal Reserve chair. However, said changes in interest rates could readily impact the stock market.

To assess potential market reaction, we should monitor changes in inflation expectations. As noted below, 1-year inflation expectations are falling rapidly, despite the more dovish Kevin Hassett expected to replace Powell. Thus, at the moment, the market is not expressing concerns about a dovish Fed Chair.

Will it be the dovish Kevin Hassett or the hawkish Kevin Warsh running the Federal Reserve in 2026?

Midterm Elections and Fiscal Policy

The November midterm elections will determine the balance of power in the U.S. Congress. As shown below, the Polymarket betting site assigns a 79% probability to the Democrats taking control of the House and a 66% chance that the Republicans will maintain Senate leadership.

If one or both houses of Congress change hands, the administration will find it much more challenging to pursue its domestic and foreign policy objectives. From a market perspective, this may limit the President’s ability to manage fiscal spending and further change the tax code. Accordingly, changes in Congressional power and budgetary implications could significantly affect growth and inflation, as well as individual stocks and sectors.

As the year progresses, investors will likely pay closer attention to the betting markets and traditional polls for insight into the midterm elections.

While investors wait for the elections, it is worth noting that Americans will get a “gigantic” tax refund next year. The tax provisions in the Big Beautiful Bill should, in practice, result in larger-than-normal refunds this year. Per Treasury Secretary Scott Bessent via FoxBusiness:

I can see that we’re gonna have a gigantic refund year in the first quarter because working Americans did not change their withholdings,” Bessent told the “All-In Podcast” hosts. “I think households could see, depending on the number of workers, $1,000- $2,000 refunds.”

The AI Infrastructure Boom and Productivity Gains

The massive capital expenditure (CapEx) cycle for AI infrastructure, including data centers, the power grid, and supercomputing, is expected to continue into 2026 and beyond. As we saw in 2025, the spending will boost GDP growth and profits for many companies involved. However, toward the end of 2025, investors began to question whether some companies were spending and borrowing more than they would ever recoup.

We pose a few questions to help you consider what 2026 may bring.

  • Will the AI-led bull market continue to charge ahead like last year on the belief and hope that massive CapEx spending will translate into enormous profits?

  • Will the rapidly growing debt requirements needed to fund CapEx be a drag on the market?

  • Given that technological change is occurring rapidly, might there be a new development to shake up the AI industry? Think about Deep Seek roiling the market last January.

  • Might investors start to question whether the productivity benefits of AI are worth the cost?

  • Is AI in a bubble like the dotcom bubble? If so, will 2026 be the year it surges, as in 1999, or the year it peaks, as in 2000?  

Tariffs and Trade

The Supreme Court has heard oral arguments in the tariff legality case and will announce its findings on January 9, 2026. According to Polymarket, the odds of a favorable ruling for Donald Trump are low at 29%.

If the Supreme Court strikes down the tariffs, the economic impact could be substantial. To begin with, the prices of some goods that are no longer subject to tariffs may fall, and trade flows will adjust accordingly.

However, it’s not wise to go down that road too far. The President reportedly has a Plan B ready. Tariffs or some other similar measure will most certainly be implemented if the Supreme Court rules against tariffs. But these measures may also be subject to judicial review. 

Whatever the final trade policy is, there will be supply chain realignments that could significantly affect import costs, profit margins, and global trade patterns.

The question is not the Supreme Court ruling itself, but the mechanism the administration will ultimately use to implement tariffs, taxes, or trade restrictions. Moreover, we should consider how investors will handle a period of uncertainty.

Miscellaneous

Geopolitical Hotspots: Ongoing conflicts and tensions in Ukraine, Venezuela, and the Middle East, along with increased provocations between the US, China, Iran, and Russia, pose persistent headline risks. Many of these tensions can cause sudden changes in energy prices and economic activity, and disrupt supply chains and consumer sentiment.

Debt Levels and Sovereign Risk: 2025 began with higher bond yields, driven by the “bond vigilantes” and their grave concerns about the U.S. fiscal situation.  With the U.S. government continuing to run massive fiscal deficits, the ability to finance these debts and manage interest costs will remain a concern. Renewed signs of bond market stress or investor concerns about a government’s ability to meet its debt obligations could trigger significant volatility, particularly in the U.S. Treasury market. Such volatility would quickly filter through to the stock markets. Will the bond vigilantes regain their voice?

Bear in mind, there is a risk of another government shutdown by the end of the month.

Monetary Policy: The ECB is considering raising interest rates. Might we find that the Fed reaches a similar conclusion later in 2026? Or might rates and inflation be heading much lower? As shown below, the Fed Funds futures market forecasts only one rate cut in 2026. The Fed has enough trouble predicting the next three to six months; what makes anyone think Wall Street is any better?

Yen Carry Trade: A depreciating yen strengthens the carry trade, supporting many US financial assets. At the same time, a depreciating yen heightens affordability issues and the popularity of its political leaders. This is primarily because Japan is heavily dependent on imports of energy and raw materials, whose prices rise when the yen depreciates.

Given domestic economic and political pressures, along with US persuasion, we expect the Japanese government to take steps to strengthen the yen. If any upward adjustment is done gradually, the impact on financial markets should be minimal. However, if it occurs suddenly, such as in August 2024, financial market volatility could spike.

Summary

There are 14 questions in this article, and we could easily have doubled or tripled that number. There are far more questions than answers about what the new year may hold. More importantly, there will be additional events that are not known today.  

Thus, instead of forecasting where the S&P will close in 2026 with zero confidence, we would rather take the market and news as they come. We suspect that QE will provide initial support to the market through the winter. Valuations should keep us on guard throughout the year. Many of the other items we discuss pose a constant risk and or the potential for better returns throughout the year.

As you consider your forecast for 2026, we leave you with a thought to ponder from Arthur Zeikel:

Most investors tend to cling to the course to which they are currently committed, especially at turning points.

Tyler Durden
Thu, 01/08/2026 – 10:05

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Sudden Change Of Heart By Colombia’s Petro: ‘Good Call’ With Trump Leads To Planned WH Meeting

Sudden Change Of Heart By Colombia’s Petro: ‘Good Call’ With Trump Leads To Planned WH Meeting

Another foreign leader and strident Trump critic has had a rapid about-face after coming under ‘threat’. And this in turn has caused President Trump to cool his own condemnations and rhetoric. Colombia’s president Gustavo Petro has long been among the fiercest opponents of the US President’s Venezuela policy, and especially his weekend military action which ousted Nicolás Maduro. They’ve frequently clashed over several months of the American military build-up in the southern Caribbean, with Petro being the butt plenty of colorful Truth Social posts by Trump, including labeling Petro “sick”.

Suddenly the Colombian leader has made nice after Trump went so far as to hint that his country could be among those facing potential anti-narco trafficking military action, with the NY Times now reporting, “The two leaders spoke for about an hour late Wednesday afternoon in a call facilitated by the US Embassy in Colombia, according to the Colombian presidency.” It noted that “A US official also said the call lasted about an hour, which is unusually long for a call between Mr. Trump and another leader.” The Colombian side had a similarly positive assessment, with the Foreign Ministry calling it a “good meeting”.

Via Reuters

And it hasn’t taken long, following Trump saying he appreciates Petro’s “call and tone” – for him to even get a White House invite. Trump said Petro had “called to explain the situation of drugs and other disagreements that we have had.”

Now a future meeting to further advance relations and cooperation is being arranged by Secretary of State Marco Rubio and Colombia’s foreign minister, Trump confirmed, which he said he is looking forward to. “I appreciated his call and tone, and look forward to meeting him in the near future,” Trump said in a fresh Truth Social post. The meeting will take place at the White House.

A mere days ago Trump had denounced Petro as heading up a “very sick” cartel infested country which he accused of “making cocaine and selling it to the United States” – and then this not very veiled threat and warning: “He’s not going to be doing it very long, let me tell you.” Trump even ominously responded to a reporter’s question about potential military intervention in Colombia with, “Sounds good to me.” He earlier said Petro must “watch his ass”.

Petro himself is a former member of a guerrilla group and Colombia’s first leftist leader in decades but he has sworn to “never to touch a weapon again” – but “for the homeland I would take up arms that I don’t want.”

Quick change of heart…

Now, Petro is pledging cooperation and blaming the cartels for causing the severely strained relations between Bogota and Washington. Singing a different tune amid the ratcheting Trump pressure he had said as follows:

“I talked about two things: Venezuela and the issue of drug trafficking,” he told the crowd in downtown Bogotá, where demonstrators had just minutes earlier chanted slogans against the United States at Petro’s behest. Petro explained to the audience that Colombian politicians allegedly linked to narco-trafficking misled the U.S. president about Petro’s record to turn Trump against him.

“Those (people) are responsible for this crisis — let’s call it diplomatic for now, verbal for now — that has erupted between the U.S. and Colombia,” he added. 

Trump had earlier this week issued veiled warnings of muscular action against Cuba and Mexico as well, with Mexico likely being the next to try and mend ties with this unpredictable White House.

Tyler Durden
Thu, 01/08/2026 – 09:45

via ZeroHedge News https://ift.tt/BFkHUZ9 Tyler Durden

Justice Barrett, Trump v. Slaughter, and Presidential Removal Power from 1921 to 1933

In two previous blog posts, I argued that every President from 1881 to 1921 had successfully defended the President’s power to remove at will all officers exercising executive power and that no independent agencies in the modern sense of the term had been created between 1881 and 1921. In this blog post, I will argue that every President from 1921 to 1933 also successfully defended presidential removal power at will over all executive officers and that no independent agencies in the modern sense of the term were created between 1921 and 1933 prior to Humphrey’s Executor v. United States (1935). My argument grows out of my co-authored book with Professor Christopher Yoo, who deserves all the credit and none of the blame for anything in this blog post. Steven G. Calabresi & Christopher S. Yoo, The Unitary Executive: Presidential Power from Washington to Bush (Yale University Press 2008).

Warren G. Harding served as President of the United States from 1921 to 1923. As President, Harding vigorously asserted his power over the entities that became independent after the decision in Humphrey’s Executor v. United States (1935). As Christopher Yoo and I wrote, “Harding communicated his administration’s policy agenda to members of the Interstate Commerce Commission (ICC) and the Shipping Board requiring commissioners to submit their undated resignations before receiving their appointments, ignoring the statutory provisions [that might have been read as limiting presidential removal power], and threatening to remove Shipping Board members who disagreed with his policies. Even more important were his efforts to reconstitute … agencies with commissioners more in tune with his pro-business orientation. Harding made a number of transformative appointments to the ICC, the Federal Reserve Board, the U.S. Tariff Commission, and the Federal Trade Commission that effectively brought the regulatory policy of the Progressive Era to an end.” Calabresi & Yoo, at 262.

Harding endorsed an executive branch reorganization proposal that “recommended that the independent agencies be consolidated into the executive department.” Id. Although this plan failed, Harding succeeded in creating a Bureau of the Budget—a plan initiated by Taft and then supported by Woodrow Wilson. “Under the Budget and Accounting Act of 1921, ‘the Bureau of the Budget was part of the executive branch, reporting to the president. The budget director was not to take instruction from cabinet officers but only from the president, which gave the director the authority to plan a responsible budget without constant interference.’ The impact on the president’s ability to control his administration was palpable and immediate. Under the leadership of the very able Charles Dawes, the Bureau of the Budget was able to save more than one billion dollars during its first year of operation. Even more important, the bureau allowed the president to exert far more control over federal spending than ever before.” Id. at 262-263. The Bureau of the Budget, which began as a part of the Treasury Department under Harding was moved to the White House by President Franklin D. Roosevelt and was then renamed the Office of Management and Budget (OMB) under President Richard M. Nixon. It has been one of the principal tools by which modern presidents control the unitary executive branch.

Unfortunately, President Harding had to pay a steep price to get the Bureau of the Budget enacted into law by Congress. “Attached to the legislation creating the Bureau of the Budget was a provision creating the General Accounting Office (GAO), headed by a Comptroller General appointed to a fifteen-year term and removable by joint resolution …. Because a joint resolution necessarily requires the president’s signature to be effective, this provision guaranteed presidential participation in any removals.” Id. at 263. Congress was, however, unconstitutionally given a role in the removal process of the Comptroller General, which was precisely “the problem[] that had induced [Woodrow] Wilson to veto the previous version of the Budget and Accounting Act, notwithstanding his avid support for the” creation of the Bureau of the Budget. Id.

Ultimately, the creation of the Bureau of the Budget, its move by FDR to the White House staff, and its transformation into OMB—which became the President’s principal unitary executive tool for controlling the executive branch proved to be far more consequential than Congress’s reserving a role for itself in removing GAO Comptrollers General. Overall, this unsavory “deal” greatly advanced the unitary executive by enhancing enormously the President’s control over both the executive branch, the regulatory state, and the budget. On balance, the Harding presidency thus enhanced the unitary executive rather than setting it back.

The Harding Administration defended the constitutionality in the lower courts of President Wilson’s removal of Postmaster Frank Myers without Senate approval, which led to the great win for presidential removal power in Myers v. United States (1926) under Harding’s successor as President.

Calvin Coolidge served as President from 1923 to 1929. The great removal power victory of his presidency was the winning of Myers in the Supreme Court with a magnificent, scholarly majority opinion by Chief Justice William Howard Taft, which recognized an unlimited presidential removal power in a seventy-page opinion. The government’s brief in Myers claimed the Executive Power Vesting Clause of Article II granted the president unlimited removal power over officers exercising executive power, and the majority opinion wrote that conclusion into constitutional law in the U.S. Reports. Id. at 267-268. The Coolidge Administration’s brief also recounted the entire history of disputes over the removal power from 1789 to 1926. “The consistency of the refusal by previous presidents to accept congressionally imposed limits on presidential removals played a large role in Chief Justice Taft’s opinion. In light of the opposition offered by Presidents Jackson, Grant, Cleveland, Wilson, and Coolidge, [the Court said] any limits on ‘the independent power of the President to remove … can not be said really to have received the acquiescence of the executive branch,” just as Christopher Yoo and I claimed in our co-authored book. Id. at 268.

“Coolidge was more than willing to fight to assert the president’s sole right to control the execution of the federal laws. For instance, the degree of influence he exerted over the [supposedly] independent agencies indicates that he envisioned them as being subject to his will. Consistent with congressional statements that the Federal Trade Commission and other commissions ‘should subordinate their judgment to the opinions of the Executive’ and that ‘they properly were mere agencies to register the policies of the administration,’ Coolidge attempted to dominate the … agencies by influencing the rediscount policy of the Federal Reserve Board, dictating policy to the U.S. Shipping Board, requiring that commissioners submit undated letters of resignation before appointing them, and threatening to remove commissioners who disagreed with his policies. The fact that the threatened removal of these commissioners failed to evoke any congressional protests suggests that Congress also did not regard the statutory removal restrictions as vitiating any of the president’s constitutional powers.” Id. at 265-266.

“Coolidge further exerted control over the [supposedly] independent agencies by appointing commissioners who were sympathetic to his pro-business policies. These efforts culminated with the appointment of William E. Humphrey to the chairmanship of the FTC. Humphrey bragged about the impact of his appointment, noting that ‘if [the FTC] was going east before, it is going west now.’ He added, ‘Do you think I would have a body of men working here under me that did not share my ideas about these matters? Not on your life. I would not hesitate a minute to cut their heads off if they disagreed with me. What in the hell do you think I am here for?'” Id. at 266.

“It is clear that both Harding and Coolidge moved aggressively to turn the direction of the [supposedly] independent agencies around one hundred and eighty degrees. While the merits of the laissez-faire policy they pursued are open to dispute, there can be no question but that Harding and Coolidge ensured that these agencies acted in accordance with the vision determined by the president, notwithstanding the supposed statutory guarantees of independence. Humphrey’s aggressive statements about his own role in implementing Coolidge’s laissez-faire policies certainly help to explain why FDR was so eager to replace Humphrey in the litigation that ultimately became Humphrey’s Executor v. United States.” Id. at 266.

Coolidge also used his powers under the Bureau of the Budget to slash dramatically federal spending. In 1927, the Federal Radio Commission was created, which would become the Federal Communications Commission under President Franklin D. Roosevelt. “In the wake of the landmark decision in Myers, however, Congress did not even maintain the pretense of including any restrictions on the president’s power to remove commissioners.” Id. at 272.

Herbert Hoover served as President of the United States from 1929 to 1933. “While a member of the Coolidge administration, Hoover had questioned the constitutional propriety of conferring executive powers upon independent agencies, arguing that

“there should be single-headed responsibility in executive and administrative functions.” Hoover elaborated, “The necessarily divided minds of the best board in the world ha[ve] always resulted in failure in executive work. Every member must have a four-way independent responsibility. He is responsible for every act of the board to the country as a whole, to his particular constituency, to his political party and finally to Congress. There is only one responsibility that he does not have and that is to the President of the United States, who, at least under the spirit of the Constitution, should be vested with all administrative authority.

Hoover reiterated these views after assuming the presidency. Addressing the problem of departmental reorganization in his first annual message, Hoover urged that all executive administrative activities should be placed under single-headed responsibility.

“Indeed,” Hoover concluded, “these are the fundamental principles upon which our Government was founded, and they are the principles which have been adhered to in the whole development of our business structure, and they are the distillation of the common sense of generations.”

Hoover assumed full responsibility for all executive policies, issuing directives to the ICC regarding passenger rates and railroad consolidations.” Id. at 273-274.

The original Federal Power Commission (FPC), which today is the Federal Energy Regulatory Commission, was created after the decision in Myers v. United States with no removal restrictions as to the five-member commission. Hoover also fought off a Senate attempt to reconsider its confirmation of three nominees to the FPC arguing that it interfered with his presidential removal power, a fight that he won in court. Id. at 274.

The twelve years of Republican presidencies following the Progressive era ended with Myers having constitutionalized total presidential power to remove at will any officer exercising executive power. All three presidents during this period of time strongly supported this power.

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Trump’s Plan for 30 Million Barrels of Venezuelan Oil Doesn’t Add Up


President Donald Trump stands in front of many rows of oil barrels. | Illustration: Eddie Marshall | Midjourney

Since deposing Nicolás Maduro and pledging to “run” his country, President Donald Trump has made it clear the U.S. will take a major role in Venezuela’s oil production. Many of the details remain murky, but much of what has been revealed so far doesn’t pass the smell test.

“I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America,” Trump posted on Truth Social. “It will be taken by storage ships, and brought directly to unloading docks in the United States.” The oil, he added, “will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States.”

Secretary of State Marco Rubio later told reporters the oil shipment was part of the “stabilization of the country.”

As recently as November, Venezuela produced fewer than 1 million barrels of oil per day. (By comparison, last year the U.S. produced more than 13 million barrels per day.) On Wednesday, U.S. Department of Energy (DOE) Secretary Chris Wright said the Venezuelan oil in question was “backed-up” and in storage.

“A senior administration official, speaking under condition of anonymity, told CNN that the oil has already been produced and put in barrels,” the outlet reported. “The majority of it is currently on boats and will now go to US facilities in the Gulf to be refined.”

But as Catherine Rampell of The Bulwark noted on X, “oil hasn’t been shipped in actual barrels in over a century.” Indeed, barrel is a unit of measurement—equal to 42 gallons—not an actual description of the means of transportation; oil is now transported on tanker ships that hold tens of millions of gallons.

It’s not clear what CNN’s anonymous “senior administration official” meant, but it’s certainly not true that 50 million individual barrels of oil are sitting in storage or on ships.

In fact, the whole plan is light on specifics. “Trump administration officials on Wednesday outlined a sweeping albeit bare-bones plan to effectively assume control of selling oil from Venezuela indefinitely,” Rebecca F. Elliott and Robert Jimison reported at The New York Times. “Venezuela’s state oil company released a statement Wednesday afternoon confirming that negotiations were underway with the U.S. government, but stopped short of saying there was a deal in place.”

“All proceeds from the sale of Venezuelan crude oil and oil products will first settle in U.S. controlled accounts at globally recognized banks to guarantee the legitimacy and integrity of the ultimate distribution of proceeds,” according to a DOE fact sheet. “These funds will be disbursed for the benefit of the American people and the Venezuelan people at the discretion of the U.S. government.”

“We’re going to sell that crude, we’re going to put it in accounts, and we’re going to distribute [those] funds to the interim authorities in Venezuela and align that with incentives to improve their behavior,” Wright told CNN’s Jake Tapper.

“The Trump administration plans to put money raised from seizure of Venezuelan oil into bank accounts outside the U.S. Treasury,” PBS’ Lisa Desjardins posted on X. “Sources said they understood these as similar or decidedly ‘off-shore’ accounts.” (Desjardins later added, citing “a helpful Republican Senator,” that by keeping the revenue in external bank accounts and not the Treasury, “the US is showing it does not own the proceeds from the oil it is seizing, but still wants to control it.”)

“It was unclear what legal authority the administration would rely on to commandeer the oil money to use as it sees fit, nor was it apparent what exactly had been agreed,” the Times‘ Elliott and Jimison added. “The Constitution gives Congress control over government expenditures, barring any money from being spent except as appropriated by legislation.”

Days ago, Trump sent troops into another country to oust its leader. Now, he’s claiming the authority to sell that country’s resources and distribute the proceeds however he pleases, and in the meantime, he may keep the funds offshore, away from the prying eyes of oversight.

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ICE in Minnesota


Mourners leave candles and cards after Minneapolis ICE shooting | Angel Colmenares/EFE/Newscom

Tragedy in Minnesota: Immigration and Customs Enforcement (ICE) officers in Minnesota shot and killed a 37-year-old woman, Renee Nicole Goode, in her car yesterday. Footage of the incident is rather unclear. President Donald Trump, Homeland Security Secretary Kristi Noem, and top officials at ICE say the officer had been acting in self-defense as Goode attempted to use her car as a lethal weapon, trying to run over law enforcement; Minneapolis Mayor Jacob Frey called this “bullshit.”

“We’ve dreaded this moment since the early stages of this ICE presence in Minneapolis,” added Frey. It’s true: Whenever a bunch of armed agents of the state enter your city, it’s not crazy to expect that at some point they abuse their power, that a vague situation ends in bloodshed, that they misread a threat, or that a threat is legitimately directed toward them and they react, resulting in a death. It’s very hard to tell what exactly happened here.

Here’s what we know: City leaders claim Goode was a legal observer, not a protester. Noem describes Goode’s driving—first backing up, after an agent tried to open the driver’s side door, then moving forward, at which point shots were fired—as an “act of domestic terrorism.” Noem also said that the officer (whose name has not been released) who shot the woman was involved in another incident with an “anti-ICE rioter” in June, details of which have not come out yet.

Other reports have emerged of Border Patrol agents roughing up people on school property at Minneapolis’ Roosevelt High School.

National values: The old Venezuelan regime is enjoying playing a P.R. game. Nicolás Maduro claimed in court Monday that he’s a “prisoner of war” (attempting the same strategy as Panama’s Manuel Noriega, who became an ur–Peloton Guy in prison and got the nicest digs, having shown up for trial in his military uniform).

This will be a stretch, as Maduro has never served in the military (though he claims the commander in chief title for himself). It will also present a tension in which the federal government will probably argue that, no, the United States is not at war with Venezuela, contra what the Trump administration says.

Meanwhile, down south, “the Venezuelan authorities asked radio broadcasters to change their programming to comply with seven days of national mourning in honor of those killed in the U.S. raid on Saturday,” reports Emma Bubola for The New York Times. “In a message to broadcasters, Oswaldo Sifontes, the president of the Venezuelan chamber of the broadcasting industry, asked radio stations to enforce the ‘promotion of national values’ by prioritizing Venezuelan music, and maintain a serious editorial line, with no games and announcers using ‘a sober, moderate, and respectful tone of voice.'”

Scenes from New York: “Mayor Zohran Mamdani’s newly instated radical-left tenant advocate, Cea Weaver, broke down Wednesday as she dodged questions from reporters about her gentrification hypocrisy,” reports The New York Post. “The 37-year-old, who has faced backlash for blasting homeownership as a ‘weapon of white supremacy’ in the past, teared up when she emerged briefly from her apartment building in Crown Heights, Brooklyn, at about 9 a.m.” (Of course, it’s Crown Heights. They always live in Crown Heights.) “Weaver, who was tapped by Mamdani to be his new director of the city Office to Protect Tenants, quickly ran back inside after she was asked about the $1.6 million home her mother owns in Nashville, Tennessee.” More Cea Weaver here, interviewed by Reason a few years ago:

QUICK HITS

  • On Wednesday, the Trump administration released a new food pyramid. Though it’s much more correct than the one that preceded it—Health Secretary Robert F. Kennedy Jr., for all his flaws, has decided to emphasize the importance of meat and dairy, prioritizing protein and reducing sugar intake—I’m fascinated by who, exactly, looks to the government to dictate what they eat and how much these changes will actually matter. (It is possible these guideline changes will affect school lunches for the better.)

I do think this is decent advice from Dr. Oz:

  • More on this as the situation develops:

  • Humanoid robots kinda suck so far, per Bloomberg.
  • On branding, tech-world hiring trends, and the future of public relations, from Lulu Cheng Meservey over at Pirate Wires.
  • “Instead of retreating from the limelight that had so wounded them, the Louds embraced it entirely,” writes Tiffany Jenkins for UnHerd. “They were among the first to become famous simply for being themselves, and the experience changed them forever. Pat Loud wrote an autobiography, prefiguring the ‘warts and all’ memoir boom of the Nineties; Bill modelled in his bathrobe for Esquire. Delilah appeared as a ‘bachelorette’ on The Dating Game, and all five children performed as a rock band on The Dick Cavett Show. Lance posed naked for Screw magazine.…Intimate confession and recognition of the ‘true’ self is now a mainstay of contemporary discourse. Being ‘false’, or worse a hypocrite, is a deadly modern sin. Social media platforms would later accelerate and monetise these trends, of course, but they surely didn’t invent them.”
  • “[Rep. Ro] Khanna [D–Calif.], an ambitious 49-year-old Democrat seen as a possible 2028 presidential candidate, has publicly defended a proposed one-time wealth tax in California that has angered some of the state’s richest executives and prompted threats that they will flee,” reports The New York Times. “Some of those wealthy Californians are now quietly mobilizing on WhatsApp chats and conference calls to try to put together a well-funded but long-shot bid to oust Mr. Khanna, according to half a dozen people close to the effort who spoke on the condition of anonymity to disclose private conversations.”
  • Property rights violation alert:

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Trump’s Plan for 30 Million Barrels of Venezuelan Oil Doesn’t Add Up


President Donald Trump stands in front of many rows of oil barrels. | Illustration: Eddie Marshall | Midjourney

Since deposing Nicolás Maduro and pledging to “run” his country, President Donald Trump has made it clear the U.S. will take a major role in Venezuela’s oil production. Many of the details remain murky, but much of what has been revealed so far doesn’t pass the smell test.

“I am pleased to announce that the Interim Authorities in Venezuela will be turning over between 30 and 50 MILLION Barrels of High Quality, Sanctioned Oil, to the United States of America,” Trump posted on Truth Social. “It will be taken by storage ships, and brought directly to unloading docks in the United States.” The oil, he added, “will be sold at its Market Price, and that money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States.”

Secretary of State Marco Rubio later told reporters the oil shipment was part of the “stabilization of the country.”

As recently as November, Venezuela produced fewer than 1 million barrels of oil per day. (By comparison, last year the U.S. produced more than 13 million barrels per day.) On Wednesday, U.S. Department of Energy (DOE) Secretary Chris Wright said the Venezuelan oil in question was “backed-up” and in storage.

“A senior administration official, speaking under condition of anonymity, told CNN that the oil has already been produced and put in barrels,” the outlet reported. “The majority of it is currently on boats and will now go to US facilities in the Gulf to be refined.”

But as Catherine Rampell of The Bulwark noted on X, “oil hasn’t been shipped in actual barrels in over a century.” Indeed, barrel is a unit of measurement—equal to 42 gallons—not an actual description of the means of transportation; oil is now transported on tanker ships that hold tens of millions of gallons.

It’s not clear what CNN’s anonymous “senior administration official” meant, but it’s certainly not true that 50 million individual barrels of oil are sitting in storage or on ships.

In fact, the whole plan is light on specifics. “Trump administration officials on Wednesday outlined a sweeping albeit bare-bones plan to effectively assume control of selling oil from Venezuela indefinitely,” Rebecca F. Elliott and Robert Jimison reported at The New York Times. “Venezuela’s state oil company released a statement Wednesday afternoon confirming that negotiations were underway with the U.S. government, but stopped short of saying there was a deal in place.”

“All proceeds from the sale of Venezuelan crude oil and oil products will first settle in U.S. controlled accounts at globally recognized banks to guarantee the legitimacy and integrity of the ultimate distribution of proceeds,” according to a DOE fact sheet. “These funds will be disbursed for the benefit of the American people and the Venezuelan people at the discretion of the U.S. government.”

“We’re going to sell that crude, we’re going to put it in accounts, and we’re going to distribute [those] funds to the interim authorities in Venezuela and align that with incentives to improve their behavior,” Wright told CNN’s Jake Tapper.

“The Trump administration plans to put money raised from seizure of Venezuelan oil into bank accounts outside the U.S. Treasury,” PBS’ Lisa Desjardins posted on X. “Sources said they understood these as similar or decidedly ‘off-shore’ accounts.” (Desjardins later added, citing “a helpful Republican Senator,” that by keeping the revenue in external bank accounts and not the Treasury, “the US is showing it does not own the proceeds from the oil it is seizing, but still wants to control it.”)

“It was unclear what legal authority the administration would rely on to commandeer the oil money to use as it sees fit, nor was it apparent what exactly had been agreed,” the Times‘ Elliott and Jimison added. “The Constitution gives Congress control over government expenditures, barring any money from being spent except as appropriated by legislation.”

Days ago, Trump sent troops into another country to oust its leader. Now, he’s claiming the authority to sell that country’s resources and distribute the proceeds however he pleases, and in the meantime, he may keep the funds offshore, away from the prying eyes of oversight.

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China Set To Approve Nvidia H200 AI Chip Purchases As Soon As This Quarter

China Set To Approve Nvidia H200 AI Chip Purchases As Soon As This Quarter

Top on our market radar this morning: a Bloomberg News report says China is preparing to approve limited imports of Nvidia’s H200 AI chips as soon as this quarter, restoring partial access to a massive market after years of restrictions.

If Bloomberg’s report proves accurate, you can imagine how Jensen Huang is feeling right now.

Sources told the outlet that H200 approval would be limited to select commercial uses. The chip, which is used to train large AI models, would remain barred from the military, sensitive government agencies, critical infrastructure, and state-owned enterprises, with some limited exceptions.

For context, the H200 is an older-generation Hopper chip that the Trump administration has permitted for export to China, unlike the newer Blackwell or future Rubin processors, which remain restricted on national security grounds.

Last week, Reuters reported that major Chinese tech firms, including Alibaba Group and ByteDance, have signaled interest in the H200 as they race to compete with Western tech companies.

Reuters added that Nvidia plans to deliver roughly 5,000 to 10,000 chip modules, equivalent to about 40,000 to 80,000 H200 AI chips, to China in the coming months.

Beijing’s move to reopen the Chinese market to limited H200 access would still represent a major win for Nvidia. Huang has recently estimated that China’s AI chip market could reach $50 billion within just a few years.

Bloomberg also cited comments from Nvidia executives at the Consumer Electronics Show earlier this week:

Nvidia executives said there is strong demand from Chinese customers for the H200, but noted that the company has not spoken directly with Beijing about approval and does not know when China may greenlight the sale. They added that license applications have been submitted to Washington and that final approval details from the US government are being finalized.

Related:

In New York, Nvidia shares in premarket trading are marginally higher on the news. 

Tyler Durden
Thu, 01/08/2026 – 09:05

via ZeroHedge News https://ift.tt/qQJ9Ku2 Tyler Durden