Month: January 2025

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

The U.S. Supreme Court voted 8–1 on Jan. 23 to allow the federal government to enforce an anti-money laundering law that a lower court blocked late last year.

Justice Ketanji Brown Jackson dissented from the new ruling.

The statute at issue, the federal Corporate Transparency Act (CTA), required millions of business entities to file information returns about their owners by Jan. 1, 2025.

An estimated 33 million small businesses face fines of as much as $591 per day should they fail to comply with the new rule, according to.a Treasury website.

Businesses with upwards of 20 employees, $5 million in annual sales, and a U.S. office qualify for exemptions from CTA reporting requirements.

The law provides that affected corporate entities must file reports with the federal government about their beneficial owners, which means individuals with substantial control over the entity or who own or control 25 percent of the entity.

Entities are required to provide the government with the names of their beneficial owners, along with their birthdates, addresses, and identifying information such as passport or driver’s license numbers.

The CTA’s reporting requirement was put on hold on Dec. 5, 2024, when the U.S. District Court for the Eastern District of Texas sided with challengers, granting a nationwide preliminary injunction—also known as a universal injunction—against the CTA.

The court found that the challengers would likely succeed with their claim that the act was unconstitutional.

On Dec. 13, 2024, the U.S. Department of Justice, acting on behalf of the Financial Crimes Enforcement Network (FinCEN), a federal agency, asked the U.S. Court of Appeals for the Fifth Circuit to stay the injunction.

The agency argued the law was constitutional and that the challenge to it would probably fail in the end.

The circuit court’s motions panel granted the government’s request on Dec. 23, 2024, and suspended the injunction pending appeal. FinCEN then extended the filing deadline for corporate entities to Jan. 13, 2025.

On Dec. 26, 2024, the circuit court performed an about-face and sent the case to its merits panel, which restored the injunction to “preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.”

The new Supreme Court order states that the Fifth Circuit’s ruling upholding the injunction is “stayed pending the disposition of the appeal” in the circuit court.

The Fifth Circuit has scheduled oral argument in the case for March 25.

Jackson wrote in her dissenting opinion that there was “no need” for the nation’s highest court to lift the Fifth Circuit’s stay of the reporting requirement.

“However likely the government’s success on the merits may be, in my view, emergency relief is not appropriate because the applicant has failed to demonstrate sufficient exigency to justify our intervention,” the justice wrote.

She wrote that the circuit court agreed to expedite the government’s appeal, even though the government only moved to enforce the law almost four years after its passage by Congress.

The government’s argument that the law needs to be enforced immediately is undermined by “the fact that the harms it now says warrant our involvement were likely to occur during that period.”

The government has not shown if will suffer “injury of a more serious or significant nature … if the Act’s implementation is further delayed while the litigation proceeds in the lower courts.”

Supreme Court Justice Neil Gorsuch, a critic of universal injunctions, concurred with the court’s decision, but wrote that the Supreme Court should “go a step further and … take this case now to resolve definitively the question whether a district court may issue universal injunctive relief.”

In January 2020, Gorsuch criticized the growing practice of federal judges ruling beyond the scope of a particular case.

The Supreme Court should “confront” the “real problem” of nationwide injunctions, which raise “serious questions about the scope of courts’ equitable powers under Article III” of the Constitution, he wrote in a ruling.

That decision stayed a universal injunction that prevented the first Trump administration from enforcing its so-called public charge rule that blocked prospective immigrants from receiving permanent resident status if they were deemed likely to become dependent on government assistance.

The case is McHenry v. Texas Top Cop Shop.

The applicant, James R. McHenry, is a longtime U.S. Department of Justice employee who is serving as acting U.S. attorney general.

McHenry took over temporarily after then-Attorney General Merrick Garland resigned on Jan. 20, the day of President Donald Trump’s inauguration.

Trump has nominated Pam Bondi, former Florida attorney general, as the next U.S. attorney general. The Senate Judiciary Committee is scheduled to vote on her nomination on Jan. 29.

The lead respondent, Texas Top Cop Shop, is a police supply store in Conroe, Texas.

Janita Kan contributed to this report.

Authored by Samantha Flom via The Epoch Times (emphasis ours),

A bill to establish standards of care for babies born alive after failed abortions passed along party lines in the House on Jan. 23.

The 217–204 vote followed a heated debate in the chamber, during which Republicans stressed that the bill was not about abortion but the babies who survive the procedure.

“As a physician, it is beyond my comprehension that anyone would not intervene to save an innocent and defenseless human life,” Rep. Gregory Murphy (R-N.C.) said, defending the bill on the House floor.

“Neglect is harm. Neglect is immoral. Abortion is not the issue.”

The Born-Alive Abortion Survivors Protection Act requires medical professionals present at a newborn abortion survivor’s birth to provide the same level of life-saving care to that baby as would be offered to any other premature infant of the same gestational age.

The bill mandates the transfer of such infants to a hospital for additional treatment and also establishes reporting requirements for violations. Penalties for violating the law could include fines and up to five years in prison, though the child’s mother would be protected from prosecution.

Democrats, however, argued that infanticide is already illegal and that the bill is therefore unnecessary.

“This bill does not solve a problem,” Rep. Kelly Morrison (D-Minn.), an obstetrician, said before voting against the measure in the House.

“Doctors are already both honored and obligated to provide appropriate care for their patients. It is illegal to kill a newborn infant in all 50 states.”

From 2019 to 2021 in Morrison’s home state of Minnesota, there were at least eight reported cases in which newborn abortion survivors died post-birth, according to the Minnesota Department of Health. In five of those cases, no measures were reported to have been taken to save the babies’ lives. In the other three cases, “comfort care” was provided.

Other Democrats argued that the bill would allow for government interference in women’s reproductive health decisions and deprive parents of the opportunity to comfort their dying babies.

“Only 1 percent of all abortions happen at 21 weeks or later, and if they do, it is because of a serious fetal abnormality or the health of the mother,” Rep. Sara Jacobs (D-Calif.) said. “And if you are the one getting that news, it is heartbreaking, it is earth-shattering. And the last thing families need is government to interfere with their access to care.”

The bill’s passage in the House comes a day after Democrats unanimously opposed its advance in the Senate. With a 60-vote majority needed to invoke cloture, or limit debate, on a bill, the procedural vote failed 52-47.

That result was no surprise to Senate Majority Leader John Thune (R-S.D.).

Thune had noted hours before that he fully expected Democrats to reject what he felt should be a noncontroversial bill.

“We should all be able to agree that a baby born alive after an attempted abortion must be protected,” the majority leader said on the Senate floor.

“But I think it is safe to say that what it all boils down to is this: Democrats will oppose legislation to provide appropriate medical care to newborn children who survive abortions because they are afraid.”

If Democrats recognized the humanity of a living baby, born in an abortion clinic after a botched abortion, they might be forced to acknowledge the humanity of the unborn baby in that same clinic, Thune said.

Republicans have tried numerous times in recent years to pass legislation protecting the lives of newborn abortion survivors. Those efforts have been blocked by Democrats.

Tens of thousands, or perhaps hundreds of thousands, of pro-life advocates are expected to flood Washington on Jan. 24 for the 52nd annual National March for Life.

Vice President JD Vance is scheduled to speak at the event on behalf of the Trump administration. President Donald Trump will address the March in a video message, a White House official confirmed on Thursday.

Two former Politico reporters revealed how “cowardly editors” at their former publication carried water for Joe Biden in the 2020 election by actively working to suppress stories that were unflattering to Biden.

“Politico did that terrible, ill-fated headline: 51 intelligence agents, or former intelligence agents, say that the Hunter Biden laptop was disinformation, or bore the hallmarks of disinformation,” said Marc Caputo, now the senior politics editor at Axios. “Turns out that story was closer to disinformation because the Hunter Biden laptop appeared to be true.”

The other ex-Politico reporter, Tara Palmeri – who interviewed Caputo on her “Somebody’s Gotta Win” podcast, recalled how social media giants colluded to censor the Hunter Biden laptop story, while Caputo noted that (pre-Musk) Twitter “punished” the New York Post for its accurate reporting – locking the outlet out of its account following a pressure campaign from the Biden DOJ.

“I was covering Biden at the time,” Caputo told Palmeri, adding: “And I was told this came from on high at Politico: Don’t write about the laptop, don’t talk about the laptop, don’t tweet about the laptop.”

Caputo added that he was working on a story about Hunter Biden’s shady dealings with Ukrainian natural gas company Burisma, which Politico editors “killed” during the 2020 Democrat primaries.

“I wrote what would have been a classic story saying, you know, ‘The former vice president’s son was slapped with a big tax lien for the period of time that he worked for this controversial Ukrainian oil concern, or natural gas concern, which is haunting his father on the campaign trail,’” said Caputo, adding that the story was spiked without any explanation.

According to Caputo, readers “don’t understand the dumb decisions of cowardly editors that are made above us.”

As Headline USA notes further, Palmeri told Caputo that she worked for three months on a report she co-wrote in March 2021 about the Secret Service trying to obtain a copy of Hunter Biden’s gun-purchase form that he lied on, and eventually resulted in a criminal conviction.

“I spent three months on it, I went to the laptop shop, and I did all of the reporting in Delaware,” she remembered. “But I do wonder if it could have, if it would have been published a little quicker if it was a different type of story.”

“It was the beginning of his administration, it was a honeymoon period — you know what I mean?”

h/t Julianna Frieman via Headline USA

Authored by Ken Silva via Headline USA,

Apparently the second-deadliest foreign-inspired terrorist attack in the U.S. since 9/11 wasn’t enough for the boss of the New Orleans FBI field office to end his vacation early.

Early on New Year’s Day, 42-year-old Army veteran Shamsud-Din Bahar Jabbar rammed a pickup truck into a crowd in New Orleans’s famed French Quarter—killing 14 people who were celebrating the New Year. Police fatally shot Jabbar in a following firefight, and authorities later determined that the incident was inspired by the foreign terrorist organization ISIS.

Despite that, New Orleans FBI Special Agent in Charge Lyonel Myrthil took several more days to return to the office, according to a whistleblower working with the office of Sen. Chuck Grassley, R-Iowa.

“Myrthil vacationed in Europe from late December to early January, which included New Year’s Eve, New Year’s Day, and the Sugar Bowl and took multiple days to return to New Orleans after the terrorist attack on January 1,” Grassley said in a Tuesday letter to FBI Acting Director Brian Driscol and Acting Attorney General James McHenry.

“The FBI failed to note this in any of the joint briefings it provided to Congress and must provide more information.”

A lazy SAC of …..
According to a whistleblower working with Sen. Grassley’s office, the New Orleans FBI Special Agent in Charge did not leave his vacation early after the New Year’s Day terrorist attack in his city — one of the deadliest terrorist attacks since 9/11 pic.twitter.com/fCD8vpbWWF

— Ken Silva (@JD_Cashless) January 24, 2025

Along with questions about the vacationing SAC, Grassley’s office seeks more information about the New Orleans attack, as well as info about the Tesla Cybertruck that exploded in front of the Trump International Hotel in Las Vegas on the same day. Grassley also wants to make sure whether those two attacks were connected—especially given that the driver of the Cybertruck, Matthew Alan Livelsberger, served at Fort Bragg and in Afghanistan at the same time as Jabbar.

“Similarities do reportedly exist between Jabbar and Livelsberger. For example, both individuals had experience in the U.S. Army and the vehicles in both incidents were rented from the same company, Turo. Further, according to reports, authorities claimed Livelsberger and Jabbar “likely overlapped at Fort Bragg and again in Afghanistan,’” Grassley noted. “It remains unclear whether there are additional similarities or connections between Jabbar and Livelsberger.”

Grassley and Sen. Ron Johnson seek updates on the New Year’s Day attacks by Feb. 5.

Grassley and Johnson also wrote a separate letter to Meta CEO Mark Zuckerberg, asking about Jabbar’s terroristic Facebook posts in the leadup to his attack.

Ken Silva is a staff writer at Headline USA. Follow him at x.com/jd_cashless.

After years of “unprecedented man-made global boiling” propaganda pushed by woke scientists, far-left corporate media outlets, grifting ‘green’ billionaires, and climate change warrior non-profits, Al Gore and Greta Thunberg have a lot of explaining to do after this January across the Lower 48 could shape up to be one of the coldest in years if not decades. 

“With an average temperature running 3.6 degrees below normal, this is currently the coldest January nationally (lower 48) since 1994,” meteorologist Kevin Williams and founder of private weather forecasting firm Weather-Track, wrote on X. 

With an average temperature running 3.6 degrees below normal, this is currently the coldest January nationally (lower 48) since 1994. pic.twitter.com/fjigNqIDmk

— Kevin Williams (@wxbywilliams) January 24, 2025

Meteorologist Joe Bastardi wrote on X, “The nation for Jan is now the coldest max temps since 1988 at – 4.2.  Still lagging 94 for average).” 

The nation for Jan is now the coldest max temps since 1988 at – 4.2. Still lagging 94 for average)
94 was colder in the east,but the western warmth took it out max temp wise 2011 now a full degree higher. This in the face of the US climate model which on Dec 21 forecasted a top… pic.twitter.com/lQ7NIIlvi9

— The American Storm (@BigJoeBastardi) January 24, 2025

“This month will end up finishing in the top 5 coldest JANs since 1990. Currently should finish 3rd right behind 1994 and 1991. Historically cold top 5 coldest JANs roll into this look for FEB on the right. Still some winter left in the tank we believe,” private weather forecaster BAMWX said on X. 

This month will end up finishing in the top 5 coldest JANs since 1990.

Currently should finish 3rd right behind 1994 and 1991.

Historically cold top 5 coldest JANs roll into this look for FEB on the right.

Still some winter left in the tank we believe. pic.twitter.com/HSuhXQa5HY

— BAM Weather (@bamwxcom) January 23, 2025

We’ve also been closely following the polar vortex blast and its impact on the economy and energy markets this winter season: 

• Ski Weather At Vail Resorts “Solid” With Above-Average Snowfall At Northeast Slopes

• Goldman: “Cold January” & “Record LNG Demand” Drive Upside Risk In Natty Prices

• Incoming: “Big Dumps Of Cold Air. Reminiscent Of 2013/14 Winter”

• Doesn’t Fit MSM Narrative: Parts Of US Could Rival Coldest January Since 1977

• Polar Vortex, Back-To-Back-To-Back Winter Storms Target Eastern Half Of US

• Extreme Cold, Snow Places Texas Power Grid & Permian On Alert

• PJM Grid Declares “Max Generation Alert” As Polar Vortex Unleashes Mini Ice Age

Despite billions of tons of emissions released by fossil fuel energy plants, factories, jumbo jets, cow farts, gas stoves, and vehicles over the years, and Greta’s claim about the world ending in a firey death by 2023…

… somehow, January is shaping up to be one of the coldest in years. 

Ahead of the Northern Hemisphere winter, climate crisis warriors were out spreading propaganda with the intent of causing climate anxieties amongst the population by warning about the “hottest ever” conditions while completely ignoring the warming effects of the Hunga Tonga undersea volcano. Instead, Taylor Swift’s private jet and cow farts were blamed on warming conditions. 

At the start of last week, President Trump officially ended America’s involvement in the Paris Climate Agreement, citing its de-growth and inflationary policies that have strangled the US economy.

It’s communism. pic.twitter.com/luTqwOEan6

— Fight With Memes (@fightwithmemes) January 25, 2025

Climate grifters were put on notice by the president.

Al Gore

Michael Bloomberg

Al Gore will just blame the cold weather on global warming. No accountability. That must change in the era of Trump 2.0. 

Authored by Darlene McCormick Sanchez via The Epoch Times (emphasis ours),

Secretary of State Marco Rubio is set to make his first trip abroad next week, which will include a stop in Panama amid rising tensions over President Donald Trump’s vow to take back the Panama Canal.

“China is operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back,” Trump said during his inaugural speech.

Panamanian President José Raúl Mulino has denied that China is running the canal and stated it won’t be returned to the United States.

Tammy Bruce, department spokeswoman, said Rubio—a Florida Senator with Cuban roots—also planned to visit El Salvador, Guatemala, Costa Rica, and the Dominican Republic.

Bruce said the visit stemmed from Rubio’s interest in the region and his desire to strengthen ties with Central American countries, in particular to battle illegal immigration.

Rubio may have his work cut out during his visit to Panama as tensions over Trump’s comments have escalated.

During his confirmation hearing, Rubio characterized the Panamanian government as “very friendly to the United States and very cooperative.”

“We want that to continue,” he said.

One bright spot during the visit could include working with Panama to curtail mass migration.

Mulino campaigned on shutting down illegal immigration through Panama’s Darien Gap.

However, the focus on the Panama Canal could overshadow immigration talks.

Rubio noted during his hearing that Chinese companies controlling port facilities on both ends of the canal have been a concern for a decade.

During a 2017 trip to Panama, Rubio said he discussed China’s influence along the waterway, which is a choke point with military value. It’s a critical pathway for U.S. warships in both the Atlantic and Pacific.

Rubio said military and security officials in Panama said during his visit that Beijing could potentially use its commercial ports during a military conflict.

There are “no independent Chinese companies,” Rubio said. “They all exist because they’ve been identified as national champions. They’re supported by the Chinese government.”

The Chinese Communist Party (CCP) mandates that Chinese companies cooperate with state intelligence agencies.

China began to invest in Panama around 2016 and 2017, and the money had strings attached, Rubio said.

The China-based Landbridge struck a $900 million deal in 2016 to control Margarita Island, Panama’s largest port on the Atlantic side, to build a deepwater port.

In 2017, Panama signed on to China’s ambitious Belt and Road Initiative (BRI), dubbed a modern Silk Road, after publicly recognizing Taiwan as part of China, much to the surprise and concern of the United States.

In 2018, during Trump’s first term in office, U.S. and domestic Panamanian pressure was credited with ending China’s plan to construct a large embassy at the mouth of the canal, according to the Center for Strategic and International Studies.

That same year, a Chinese consortium headed by China Harbor Engineering Company (CHEC) and state-owned China Communications Construction Company (CCCC) was awarded a $1.4 billion contract for the canal’s fourth bridge.

The CCCC was involved in constructing China’s man-made islands in the disputed South China Sea.

On the Pacific side of the canal, in the spring of 2024, Chinese companies completed work on the enormous Amador Pacific Coast cruise terminal built by the CHEC.

Who Has De Facto Control?

This month, in an interview with The Associated Press, canal administrator Ricaurte Vásquez rejected claims that the canal was controlled by China while noting that American and Taiwanese businesses also operate ports along the canal.

The Panama Canal Authority manages the administration and maintenance of the waterway’s resources and security. It operates independently of the Panamanian government.

“I mean, that’s one of those things that is factual but not truthful,” said Joshua Trevino, a former vice president of policy at the Pacific Research Institute and current policy analyst for the Texas Public Policy Foundation.

The canal authority may technically control the waterway, but Chinese companies also have functional control over the ports and pay the bills, he told The Epoch Times.

“If you have the financial and operational control—which they do—the titular government is a lot less important than those two things,” he said.

Eva Fu, Ryan Morgan, and The Associated Press contributed to this report.

Israel, Palestinians, and the United States are all celebrating after on Saturday the second big hostage exchange went off successfully. Four female Israeli soldiers were released and have been reunited with their families in Israel.

On the other side, 200 Palestinian prisoners were freed from Israeli jails under the terms of the ceasefire. The International Committee of the Red Cross (ICRC) oversaw the transfer of the prisoners, which was done with much ceremony and propaganda optics on the Hamas side.

The Trump White House spiked the football, following its campaign promises to negotiate peace in conflict hot spots around the world. The White House statement upon the release of the four Israelis said “Today the world celebrates as President Trump secured the release of four more Israeli hostages who were, for far too long, held against their will by Hamas in horrific conditions.”

“The United States will continue with its great partner Israel to push for the release of all remaining hostages and the pursuit of peace throughout the region,” it added.

The hostages spent 475 days in captivity as war ensued all around them. The newly released have been identified as Karina Ariev, Daniella Gilboa, Naama Levy and Liri Albag.

There have been some severe disagreements concerning some of the details about the release of the Israelis. First, the four women were dressed in Israeli military uniforms in order for Hamas to underscore that they were combatants. The Israeli negotiators had insisted they be dressed in civilian clothing.

Celebrations ensue in Gaza as 200 Palestinians released from Israeli jails…

Second, the hostages just before they were handed over to the Red Cross were paraded in front of banners denouncing the ‘terrorist Zionists’ and other propaganda displays.

Still, it proceeded without major incident, and there have been large celebrations in Gaza as the ceasefire continues to hold, and as the 200 Palestinian prisoners were returned.

Huge numbers of well-armed, uniformed Hamas militants filled up a town square, displaying continued existence of significant Hamas forces despite about a year-and-half of the major IDF ground and air offensive in the Strip…

Israeli media is shocked:

Gaza is filled with Hamas members again; this time an entire military battalion of resistance fighters appeared during the exchange deal in Palestine Square in the Gaza Strip pic.twitter.com/M7IoXunsbd

— Sprinter Observer (@SprinterObserve) January 25, 2025

“While the exchange of another four hostages under the deal is a positive step forward in the continued ceasefire, it also could be in direct violation of the agreement as female civilians were supposed to be released ahead of all female soldiers, followed by the elderly and wounded men,” Fox News observes.

Authored by Aaron Brown via RealClearMarkets,

A report released by LCH Research got widespread coverage with the Wall Street Journal making its headline, “Hedge-Fund Fees Eat Up Half of Clients’ Profits,” and Bloomberg chimed in with, “Hedge Funds Kept $1.8 Trillion as Fees, or Half Their Gains.” The coverage used words like “staggering” and “exploitation,” but I think this is an innumerate reaction.

Before getting to the right way to think about these numbers, I want to address the idea of forming estimates to the nearest hundred million dollars of the total return and total fees of all hedge funds since Alfred Winslow Jones invented them in 1949. It’s difficult even to define all hedge funds, and few of them disclose results to the public. The disclosures some make to databases are not complete enough to make accurate calculations. But LCH has access to a lot of non-public information and a solid reputation for accurate research. I don’t think they know the numbers to the nearest hundred million dollars, but there’s no reason to think their numbers are wildly wrong. Moreover the ratio of fees to investor returns is easier to estimate than the absolute dollar totals of either one.

Let’s start with the numbers for 20 large hedge funds, which I think are more reliable than the totals for all hedge funds. Here we have a defined universe of funds, all very well known, and few enough that each can be examined in detail. According to LCH these 20 funds have generated $1,301.1 billion in total gains since inception, and taken $446.6 billion of that, 34.3%, in fees.

If you think about it, this is not meaningful information. What matters is whether the net investor returns beat the market. If the money invested in the 20 hedge funds had instead been in index funds, the fees would likely have been around $15 billion, one-thirtieth of what the hedge funds charged. But the index funds would not have beaten the market for their investors, only matched it before fees were subtracted. Traditional asset managers might have charged $100 billion, then lost to index funds on average.

Unfortunately, the 20 hedge funds represent a wide range of strategies with different benchmarks and fee structures, so we have no way of estimating the amount of excess return or alpha they delivered to investors. But we can still make sense of the numbers by assuming they were from a single fund that charged a 2% management fee and 20% of profits beyond a 3% hurdle rate (3% is about the weighted average one-month treasury bill rate over the period of operation). This is a reasonable guess for either a low-risk or market-neutral hedge fund.

In that case, the hedge funds’ gross return of $1,301.1 billion represented about 13% per year, and delivered $994.1 billion above the hurdle rate. The hypothetical fund took a performance fee of $241.9 billion, or 24% of the profit above hurdle. 24% is higher than the stated 20% performance fee because investors do not all redeem at high-water mark—both because investors cannot time peaks perfectly and also because they tend to redeem after losses.

But what if we treat this like a high-risk hedge fund run to a Beta of 0.5 to the S&P500. Based on weighted average stock returns over the period, that would suggest a hurdle rate of 6% rather than 3%. In turn, that would reduce the hypothetical excess return to $687.0 billion, and the performance fee would represent 35% of excess profits.

Since the actual funds are mix of high and low risk funds, with different correlations to major financial markets and different fee arrangements, all we can say is it seems these 20 hedge funds are taking something like 30% of excess profits as performance fees.

But this is a biased number because none of the 20 successful funds blew up, and in fact they all posted above-average returns which is why they grew to be successful. If we perform the same calculations for the remaining hedge funds we find they seem to have averaged about a 6% annual return, and taken between 44% and 100% of excess returns as performance fees, say 75% as a ballpark guess for the average.

I understand these are highly oversimplified calculations. If we had fund-by-fund and investor-by-investor numbers we might have very different values. I only maintain that if we’re guessing from the numbers we do have, a 30% effective performance fee for top hedge funds and 75% for other hedge funds are not unreasonable.

Now comes the question of what effective performance fees should be. If a manager has unique and certain alpha, then he or she is in a position to charge any amount that leaves investors better off than not taking the deal. Even with a 99.9% performance fee, it would make sense for someone to invest.

However, there is a behavioral economics literature called “ultimatum games” that suggest empirically investors would reject wildly unbalanced splits, even though turning them down results in lower overall returns. The literature suggests even the unique and certain alpha manager could not take more than, say, 75% of excess performance to gain traction with investors.

Of course, no real manager has unique and certain alpha. At the other extreme is a “hedge fund Beta” manager who offers well-known, inexpensive-to-run strategies that beat index funds over the medium-term, but which are essentially identical to competitors’ funds. These funds do not have certain outperformance, they have periods of doing better and worse than the benchmark. Economics argues that fees for these funds should be competed down to cost. Since cost is unrelated to performance, this means a zero performance fee, and a management fee only large enough to cover expenses—including the manager’s time and effort.

I think the numbers reinforce two things I think most investors already know. If you can get into good hedge funds, like the top 20 in the study but also lots of other funds, they offer great advantages for investors both in diversification and excess return. Institutions that carefully select from good funds have better long-term investment returns with large allocations to alternatives than small allocations to alternatives. But if you pick hedge funds at random, or if you can only get your money into the less desirable funds, you will probably do more good for the managers than yourself, and could easily do worse than you would have from index funds.

Aaron Brown is the author of many books, including The Poker Face of Wall Street.  He’s a long-time risk manager in the hedge fund space.  

The Senate on Saturday confirmed Kristi Noem as President Donald Trump’s Secretary of Homeland Security, meaning that the South Dakota governor will be in charge of a massive agency established after the September 11, 2001 attacks, and has since had a long record of civil liberties and civil rights abuses.

Noem was confirmed by a final vote of 59-34. Of note, the Trump ally who is in her second term as governor received support from several Democrats on the Senate Homeland Security and Governmental Affairs Committee when it voted 13-2 to advance her nomination earlier in the week. Republicans have also expressed confidence in Noem’s ability to lead border security and immigration enforcement, AP reports.

Meanwhile back at the swamp:

“Fixing this crisis and restoring respect for the rule of law is one of President Trump and Republicans’ top priorities,” sid Senate Majority Leader John Thune (R-SD) on Friday. “And it’s going to require a decisive and committed leader at the Department of Homeland Security. I believe Kristi has everything it takes to undertake this task.”

Democrats’ primary opposition to Noem revolved around how to handle border enforcement and immigration under Trump – with figures like Senate Democratic Leader Chuck Schumer (NY) vowing to vote against Noem, suggesting instead “bipartisan solutions to fix the mess at our border” vs Noem, who he said “seems headed in the wrong direction.”

The homeland security secretary oversees U.S. Customs and Border Protection, Immigration and Customs Enforcement and Citizenship and Immigration Services. Beyond those agencies, the department is also responsible for securing airline transportation, protecting dignitaries, responding to natural disasters and more.

Trump is planning major changes to how the department functions, including involving the military in immigration enforcement and reshaping the Federal Emergency Management Agency. Those plans could immediately put Noem in the spotlight after the new president visited recent disaster sites in North Carolina and California on Friday. -AP

Noem was repeatedly asked by Senators during her confirmation hearing whether she would administer disaster aid to states even if Trump asked her not to, to which she replied that she would “deliver the programs according to the law and that it will be done with no political bias.”

Noem was notably a state House Rep. for eight years before becoming governor in 2019.

President Donald Trump slammed Los Angeles Mayor Karen Bass (D) and other Democrat public officials during a Friday press conference in Pacific Palisades to discuss the damage from the recent fires.

While discussing how long it would take to clean up the Palisades and other affected areas, Bass said “The number one thing that we are going to do immediately, and you will see this happen, is to clear out the debris…we are going to move as fast as we can. But we want you to be safe. We want you to be back in your homes immediately.”

Trump immediately cut in – saying “But the people are willing to clean out their own debris. It doesn’t cost a lot.“

“You should let them do it. Because by the time you hire contractors, it’s going to be two years. People are willing to get a dumpster and do it themselves and clean it out. There’s not that much left. It’s all incinerated, and you know, it’s just going to take a long time if you do [it].”

According to Trump, homeowners don’t want to “wait around for seven months till the city hires some demolition contract that’s going to charge $25,000.”

JUST IN: President Trump and LA mayor Karen Bass spar on live TV, Trump tells her to stop taking so long.

The spat we’ve all been waiting for.

Trump: “I’m exercising my emergency powers. You have to exercise them also. You can do everything within 24 hours.”

Bass: “And if… pic.twitter.com/PCdcjS431S

— Collin Rugg (@CollinRugg) January 25, 2025

As modernity.news notes further, Trump pointed out that people are saying they’ve been told they will have to wait up to 18 months for permits to clean up, and if he is willing to waive federal restrictions then the Mayor should do the same.

“Let them start the process tonight,” Trump said, with Bass responding “And we will. You can come back and check.”

Trump then eviscerated California Rep. Brad Sherman (D) who attempted to defend FEMA’s actions in the aftermath of the fires.

“The problem with FEMA is they come from all over the country,” Trump said. “They end up in arguments with your people from California because they want to do it a totally different way. I can live either way, but you haven’t gotten very much done with FEMA. All you have to do is look at North Carolina. It’s one of the great disasters of all time.”

“You know who came in and fixed North Carolina or the process? Other states. People from all over the country came. You have the same thing. You have a lot of people from all over the country,” Trump continued. “Getting the people is not a problem. Getting the organization is a big problem. FEMA is incompetently run, and it costs about three times more than it should cost.”

When Rep. Brad Sherman (D) defends FEMA and tells President Trump small states can’t have thousands of people come to help like FEMA, Trump says the issue isn’t people, “getting the organization is the problem. FEMA is incompetently run and it costs about three times more than it… pic.twitter.com/TnHd90zZ5t

— Julio Rosas (@Julio_Rosas11) January 25, 2025

“EMA has a standard that’s so slow. They want permit on permit on permit, and then they want permits on top of that. If you use FEMA, you’ll be here for a long time,” Trump said. “What I’m saying is get the city, get the state to give you immediate 24-hour permits. These people are going to build their own homes. They’re going to get them built fast.”

Trump then roasted Sherman and “people that think like you,” over insurance companies leaving California over state policies, stating that “every insurance company in the country left California.”

“That’s why you have no insurance, because you made it so impossible. People that think like you made it so impossible,” Trump continued.

“I’ll tell you this. I’ve never seen a state where almost nobody has insurance. I said, ‘What happened?’ They said, like, six months ago, they all left. Two years ago, they had different quadrants, but they left. You have very little insurance here. I’ve never seen anything like it,” Trump said.

President Trump goes on to roast Rep. Sherman and “people that think like you” for running the fire insurance companies out of California due to state policies. pic.twitter.com/GVQcEae31C

— Julio Rosas (@Julio_Rosas11) January 25, 2025