Monthly Archives: January 2026

Dirt Poor but Mighty: Somaliland

By extending diplomatic recognition to the breakaway statelet of Somaliland, on December 26, 2025, Israel has cut a deal aimed at sharing intelligence and securing the strategic waterways of the Red Sea—making the country a player in the Horn of Africa, where Arab countries are jostling for influence…Somaliland, a semidesert territory inside internationally recognized Somali borders, lies just south of the vital Bab al-Mandab Strait that connects the Red Sea to the Indian Ocean…Somaliland, which declared independence from Somalia during a civil war in 1991, is a self-declared nation of 6.2 million people—which, if it were a nation state, would be one of the poorest in the world. Its territory is smaller than Missouri.

Somaliland has an underused port and a long runway at Berbera… Houthi leader Abdul-Malik al-Houthi, operating in Yemen, called the recognition a “hostile and illegitimate act” targeting Somalia, Yemen and the Red Sea and warned that any Israeli presence in Somaliland would be considered a military target. Somaliland has in recent years been monitoring a Houthi buildup of arms trade and training to a Somali al Qaeda affiliate called al-Shabaab.

Excerpt from Benoit Faucon, Israel Flexes New Diplomatic Muscle in Recognition of Somaliland, WSJ, Jan. 4, 2025

Vultures and Venezuela Debt after the 2026 US Invasion

After the brazen capture of Venezuelan strongman Nicolás Maduro on January 3, 2026, investors are racing to capitalize on President Trump’s ambitions to dominate the Western Hemisphere. Hedge funds and other investment firms, already boosted by a sharp rally in Venezuelan debt, are mapping out trips to Caracas to scope out on-the-ground opportunities. Some are investigating niche instruments, like arbitration claims and unpaid state debts. Others are eyeing debt in Colombia and Cuba, while shares of a tiny bank in Greenland—another territory in Trump’s sights—have surged recently as the U.S. president pursues his own spin on the Monroe Doctrine that saw 19th-century America claim half of the globe as its sphere of influence…

For years, most money managers deemed Venezuela off-limits, due to a thicket of U.S. sanctions, political repression and economic mismanagement. The country’s bonds, languishing at rock-bottom prices since a 2017 default, were mostly a playground for specialists in emerging markets or distressed-debt contrarians.

Now, investors reckon a combination of political change, U.S. intervention and American investment into Venezuela’s vast oil resources could put a debt restructuring within reach. Some hope investment opportunities could emerge in other industries that languished under Maduro…

Some hedge funds and investment firms are venturing into more-obscure assets, such as arbitration claims from corporations owed money by Venezuela. A range of Western companies whose assets were nationalized by Maduro’s predecessor Hugo Chávez have won settlements from the World Bank’s International Centre for Settlement of Investment Disputes.
With Trump in recent days signaling potential intervention in countries like Colombia, Cuba and Mexico, some investors are considering opportunities in those markets. In one sign of speculative fervor, shares of the tiny Bank of Greenland have surged as much as 42% this year, suggesting market participants anticipate an investment boom in Greenland.

Many emerging-market hedge funds “see the current backdrop less as a single trade and more as the start of a new opportunity set: more regime changes, more policy shocks, more forced sellers and more capital controls or realignments,” said Bruno Schneller, managing partner at the Swiss asset manager Erlen Capital Management.

Excerpt from Caitlin McCabe, Hedge Funds Get Ready for the ‘Donroe Doctrine’ Trade, WSH, Jan. 10, 2026

What Happens When a Waste Dump Collapses

Search-and-rescue operations at a collapsed landfill in the Philippines were ended on Monday January 19, 2026 after the last missing worker was recovered, pushing the death toll to 36. Cebu City officials said the last body was retrieved shortly after dawn on 18 January, 10 days after a large section of the Binaliw landfill gave way. The dumpsite, located in a mountainous area outside the city, had been the focus of a round-the-clock operation involving hundreds of responders.

Initial findings from the Mines and Geosciences Bureau, cited by local media, pointed to weeks of sustained rain that, combined with structural factors, could have weighed down the rubbish… The mound of waste acted likely “like a sponge” after heavy rainfall brought by a typhoon in November 2026, although other possible causes such as seismic activity were previously considered.

Excerpt from Philippine city ends recovery work after deadly landfill collapse kills 36, The Independent, Jan. 19, 2026

Crippling the Dark Fleet: the Helicopters

Two sanctioned oil tankers shut off their transponders early January 2026 and powered to a meetup point, drawing alongside each other in the Sea of Japan. The crew of one of the vessels, known as the Kapitan Kostichev, then emptied 700,000 barrels of Russian crude into the tanks of the other, the Jun Tong, according to ship-tracking service Kpler. The clandestine ship-to-ship transfer, visible via satellite and other shipping data, is a maneuver typical of the shadow fleet, an armada of aging tankers that crisscross the world, smuggling illicit oil for sanctioned nations including Venezuela, Russia and Iran. 

The fleet’s operations came into sharp focus in January 2026 when U.S. Special Forces dropped from helicopters onto the deck of the Russia-flagged Marinera in the Atlantic Ocean south of Iceland. The tanker, which days before was sailing under a false flag and going by the name Bella 1, was escaping Trump administration action against vessels carrying Venezuelan oil. It had a Russian naval escort and wasn’t carrying any oil when it was captured.

There are now more than 1,470 tankers classed as being part of the shadow or dark fleet, according to the ship monitoring website TankerTrackers.com. Their number has swelled since 2022 as Russia has looked for routes around Western sanctions for its war against Ukraine.  S&P Global puts their numbers at 940, which represent 17% of tankers currently transporting oil, oil products and chemicals around the world…A shadow tanker often uses a “flag of convenience” provided by smaller, non-Western nations such as Gabon, Comoros or Cameroon…Flag of convenience states been known to offer sweeteners to shipowners, such as cheaper registration fees, lower taxes and less stringent checks.

Excerpt from Rebecca Feng, A Shadow Fleet Smuggles Illicit Oil Across the High Seas. This Is How It Works, Jan. 8, 2025

Defossilization versus Decarbonization: the Chemical Industry

How to replace fossil fuel feedstocks used in making chemicals with alternative carbon sources? Chemicals are essential components required to produce pharmaceuticals, fertilizers, plastics, paints, adhesives, coatings, electronics, cleaning products, and toiletries. Chemicals are made using an initial raw material – known as a feedstock. The vast majority of chemicals are made using fossil feedstocks – oil, natural gas and coal. These feedstocks are then transformed into intermediate chemicals and ultimately downstream consumer products….

The chemical industry cannot fully ‘decarbonize’ – as most chemicals inherently contain carbon atoms that are essential to the material’s structure. Decarbonisation measures such electrification and improved energy efficiency would help to reduce the chemical industry’s emissions. Alongside decarbonization measures, the chemical industry will also have to ‘defossilize’ – by replacing fossil feedstocks with alternative carbon sources to make chemicals….The chemical industry could defossilize by using

–biomass,

–plastic waste and

–carbon dioxide captured from the air

as alternative carbon sources to make chemicals instead of using fossil fuels.

Excerpt from Defossilising the chemical industry

See also: A/HRC/59/42: The imperative of defossilizing our economies – Report of the Special Rapporteur on the promotion and protection of human rights in the context of climate change

China’s Polar Silk Road — A U.S. Nightmare

Chinese research submarines for the first time traveled thousands of feet beneath the Arctic ice the summer of 2025, a technical feat with chilling military and commercial implications for America and its allies. Beijing views future sea routes through the High North as a shortcut for global commerce, a so-called Polar Silk Road. China sent a cargo ship, in the summer of 2025, to the Polish port of Gdansk by skirting the North Pole, a route twice as fast as travel times using the Suez Canal..

Chinese and Russian military planes in 2025 flew patrols near Alaska for the first time, with Chinese long-range bombers operating from a Russian air base. Such cooperation not only gives China new abilities to strike North America but raises the prospect of a joint attack by America’s most powerful adversaries….In the Arctic, the U.S. and NATO worry most about subsea warfare. Submarine navigation relies on detailed knowledge of ocean-floor topography and undersea conditions. China is cataloging the world’s oceans to build computer models to guide submarines and help them evade detection, military experts say…U.S. analysts say data China gathered from its Arctic dives north of Alaska and Greenland isn’t just about studying climate change, but also to educate the Chinese navy, which operates relatively noisy submarines that are easily tracked by U.S. forces. ..

China’s ultimate aim, said Adm. Samuel Paparo, head of U.S. Indo-Pacific Command, is to end “American undersea dominance,” he told a conference in Canada in 2024.

Both Beijing and the U.S. are short of vessels capable of navigating thick Arctic ice compared with Russia, which has more than 40. China in 2025 commissioned its fifth icebreaker. The U.S. has only two such vessels in operation, and Trump is buying more. After years of development, China launched its first domestically built icebreaker in 2019 with Finnish help. In 2025, it built and deployed its first domestically designed icebreaker in 10 months, a swift accomplishment noted with worry in Arctic countries.

Excerpt from Daniel Michaels, China’s Push to Master the Arctic Opens an Alarming Shortcut to U.S., WSJ

Owning Nuclear Submarines: the Benefits

President Trump has given approval  in October 2025 for South Korea to build a nuclear-powered submarine in the U.S., granting Seoul a coveted piece of hardware that could rattle China and North Korea—and potentially spark a race by its Asian neighbors to acquire similar technology. The stealthy submarine—which is difficult to detect because it can stay underwater…

It often takes the U.S. more than five years, if not much longer, to make one…Trump said the submarine will be made at a shipyard in Philadelphia owned by a South Korean firm, Hanwha Ocean, which purchased the facility in 2024. Hanwha makes large naval submarines in South Korea, but this would be its first nuclear-powered sub….

The U.S. maintains considerable military dominance underwater across the Indo-Pacific due to its nuclear-powered subs. With roughly 70 of them, the U.S.’s nuclear-submarine fleet outnumbers China by more than five to one…. But China is rapidly catching up, aided by diesel-powered submarines that are quieter, travel faster and can carry advanced weapons.

Excerpt from Timothy W. Martin, As China Raises Pressure, U.S. to Support Seoul in Building Nuclear-Powered Sub, WSJ

How to Make Money No Matter What

Sales of U.S. weapons to Israel have surged since October 2023, with Washington approving more than $32 billion in armaments, ammunition and other equipment to the Israeli military…Israel responded to the Oct. 7, 2023, attack led by Hamas, which killed about 1,200 people and took 251 hostages, with a military invasion that has killed more than 68,000 people in Gaza—including more than 18,000 children—according to Gaza health authorities…The fighting throughout the region has presented a fresh opportunity for defense companies in the American heartland and, to a lesser extent, tech giants on the West Coast…

The American company that has brought in the most Israeli business since the Gaza war began is Boeing. The U.S. greenlighted an $18.8 billion sale of Boeing F-15 strike fighters in 2024 to Israel for delivery beginning in 2029. In 2025, various partnerships in which Boeing plays a leading role got approval for $7.9 billion of sales of guided bombs and associated kits…The biggest defense sales approved by Washington are for jet fighters and airborne-guided bombs, reflecting the crucial role of aerial bombings in the conflict…Israel’s Eitan armored fighting vehicles, which have been used widely across Gaza, are equipped with a hull from Wisconsin-based Oshkosh and an engine made by Rolls-Royce’s U.S. unit in Michigan. Caterpillar’s D9 armored bulldozers—used to clear rubble and destroy residences and other structures in Gaza—have been ubiquitous.

In some cases, companies have faced a backlash from investors and employees over their sales to the Israeli military. In 2024, three Norwegian investment funds have sold their stakes in Oshkosh, Palantir Technologies, Caterpillar and Thyssenkrupp over the use of their products for the war in Gaza. On Oct. 1 2025, Dutch pension fund ABP—the biggest in the Netherlands, with more than $400 billion under management—sold its €387 million, or $448 million, stake in Caterpillar, citing concerns over Gaza.

In September 2025, Microsoft disabled the Israeli Defense Ministry’s access to some cloud services in response to staff protests. Before the war began, Microsoft and a partnership between Alphabet-owned Google and Amazon.com had clinched deals with Israel to provide artificial-intelligence and cloud-computing services to the military. Meanwhile, AI giant Palantir, co-founded by Trump ally Peter Thiel, entered into a partnership with the Israeli Defense Ministry in January 2024. At a May 2025 conference, Palantir Chief Executive Alex Karp responded to accusations from a protester that Israel used Palantir’s technology to kill Palestinians, saying that those who were killed were “mostly terrorists.”

American companies have also found business opportunities in responding to the humanitarian crisis sparked by the war. The U.S. State Department said in June 2025 that it had allocated $30 million to the Gaza Humanitarian Foundation, led by former Trump adviser Johnnie Moore, to oversee aid handouts. The foundation hired American contractors Safe Reach Solutions and UG Solutions to provide security for the distribution efforts, which have been beset by dysfunction and violence.

In its 2025 annual report, Lockheed Martin said it had benefited from increased American defense funding related to Israel and Ukraine, notably munitions purchases. Revenue at its missiles division rose 13% last year to $12.7 billion…Armored-vehicles maker Oshkosh said an Israeli order of tactical vehicles had extended the lifespan of a production line that was due to shut in 2024.  In its latest 2025 report, Italian contractor Leonardo, whose U.S. unit is selling tanker trailers to Israel, said its international sales should remain stable in 2025 because of “the continuing conflicts in both Ukraine and Israel.”

Excerpt from Benoit Faucon, The Gaza War Has Been Big Business for U.S. Companies, WSJ, Nov. 12, 2025

The Essentials and the Expendables: the New Division of Humanity

For Lynn Lee, at 65, it was her fourth layoff in April 2025. Yet tears still rushed down her cheeks.“I remember thinking, ‘What are the odds this would happen again?’ ” Lee said. Lee has survived a rolling tide of economic forces that have transformed manufacturing in rural America. The textile plants that moved to Brazil in the mid-2000s. The glass-fiber plant that shut down several years later. The sign-making company that shed workers during the Covid-19 pandemic. After each layoff, Lee found something new. Now, she was at retirement age. But like many older Americans with little savings and heavy financial burdens, retirement was out of the question.

She had $7,000 in mostly out-of-pocket medical debt left over from breast-cancer treatment in 2020 and a heart procedure in 2024. Plus, there was the $42,000 she still owed from a second mortgage on her home.Lee was back to searching for work. This time, she would be competing against a legion of other job seekers in an unforgiving market. Nearly a quarter of unemployed people have been without a job for at least 27 weeks. …Excerpt from The Bruising Reality of Searching for a Job at 65, WSJ, Dec. 26, 2025

According to Jack Clark, co-founder of Anthropic: “By the summer of 2026, I expect that many people who work with frontier AI systems will feel as though they live in a parallel world to people who don’t. And I expect this will be more than just a feeling – similar to how the crypto economy moved oddly fast relative to the rest of the digital economy, I think we can expect the emerging “AI economy” to move very fast relative to everything else… But a crucial difference is that the AI economy already touches a lot more of our ‘regular’ economic reality than the crypto economy.” Excerpt from Import AI 438: Siren sirens, flashing for us all, by Jack Clark, Dec. 22, 2025

The Dirty Job of Cracking Rocks for Oil-Toxic Water

Producers in the Permian Basin of West Texas and New Mexico extract roughly half of the U.S.’s crude oil. They also produce copious amounts of toxic, salty water, which they pump back into the ground. Now, some of the reservoirs that collect the fluids are overflowing—and the producers keep injecting more. A buildup in pressure across the region is propelling wastewater up ancient wellbores, birthing geysers that can cost millions of dollars to clean up. …Swaths of the Permian appear to be on the verge of geological malfunction.

When pressure of the injected into the ground wastewater exceeds 0.5 pound per square inch per foot, the liquid…can flow to the surface and pose a risk to underground sources of drinking water.

The fracas above ground is raising questions about how the Permian can sustain red-hot production without causing widespread environmental damage that could leave taxpayers on the hook—and complicate the region’s economic plans. The basin is trying to lure data centers with cheap land and energy and has plans to become a hub for burying carbon dioxide captured at industrial plants and sucked out of the air.

“You need to have a stable, locked-down geology that’s going to behave as it’s supposed to,” said Adam Peltz, a director at the Environmental Defense Fund, a nonprofit advocacy group. “Otherwise, you’re going to cause a huge, expensive mess that Texans will pay for for generations.” The industry is working to clean up its act, but solutions to treat and ditch meaningful volumes of water far from the oil fields remain years away.

In the Delaware portion of the Permian, its most prolific region, drillers crank out between 5 and 6 barrels of water, on average, for every barrel of oil. For years, they pumped the toxic water deep into the ground—and triggered hundreds of earthquakes, some with a magnitude of over 5. They caused little damage in the sparsely populated Permian, but they were felt as far as Dallas, El Paso and San Antonio, where a historic building was damaged.

In 2021, the Railroad Commission of Texas, the agency that oversees the oil-and-gas industry in the state, began cracking down on deep disposal. Companies pivoted to shallow reservoirs, which now absorb roughly three-quarters of the billions of barrels of water that they inject in the Permian every year. The shift largely cured the tremors but has created unintended consequences. 

As more and more of toxic water is injected in shallow underground reservoirs pressure is built and the toxic water migrates up some of the decaying wells that litter the Permian erupting back on the surface. In 2022, a 100-foot column of toxic water erupted from an abandoned well in Texas’ Crane County near the unincorporated community of Tubbs Corner. Chevron, which owned the well, plugged it. But nearly two years later, water started to ooze from a different well in the same area, a sign that bottling up the geyser likely repressurized the subsurface and triggered the new outburst, scientists said. It took the Railroad Commission about 53 days and roughly $2.5 million to plug that leak. Eventually, the agency quietly shut in the injection wells that it said were likely causing the increase in pressure.

Researchers at the Bureau of Economic Geology painted a critical picture of the frenzied injection in the Permian basin. Operators were injecting wastewater with little concern over how it might travel underground or its impact on reservoir pressure, they said.

Excerpt from Benoît Morenne et al., America’s Biggest Oil Field Is Turning Into a Pressure Cooker, WSJ, Dec. 25, 2025