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What you need to know

Iran’s protests persist as security posture hardens

Over the past day, Iran’s protest wave, now about to enter its second week, has continued at scale as the security posture tightens and elite messaging sharpens.

Reporting suggests the authorities are increasingly portraying the unrest as foreign-influenced and signaling tougher reprisals. 

The regime’s narrative has intensified, with military rhetoric emphasizing preemptive action against perceived external threats, an effort to deter foreign involvement and to reframe unrest as a national-security problem. An espionage-related execution reported by state media seems intended to signal the government’s determination to continue the crackdown, while tarnishing protestors as agents of foreign powers.

Iran’s judiciary chief, Gholamhossein Mohseni Ejei, warned publicly of “no leniency” for those deemed to be aiding “enemies” as demonstrations spread well beyond Tehran into multiple provinces.

The operational center of gravity remains the Tehran Grand Bazaar, where the protests began with the powerful merchants in the Bazaar complaining about dramatic price increases on imports as the local currency plunged in recent weeks.

In parallel, western provinces and Kurdish-majority districts are seeing continuing disruption, with a number of towns now said to have ejected government officials. In at least one major town the police have apparently sided with the protestors. There are also accounts of more forceful crowd-control tactics and higher levels of violence outside Tehran. 

On casualties and arrests, the most widely repeated figures over the past day appear to come from rights-monitoring networks, with reporting often citing roughly the mid-30s killed and more than 2,000 detained so far; these estimates are plausible but remain difficult to confirm in real time. 

While these protests do not yet threaten regime survival, the authorities appear unable to control the streets, which gives the initiative to the protestors.

There’s still no organized leadership, except in Kurdish areas where there is a level of coordination among different resistance and civil society groups, but that does not mean leadership will not emerge if the protests continue at this level of intensity or gain further momentum. Power vacuums always get filled by someone.

A collapsing regime in Tehran, should it occur (and we are not there yet) would have massive consequences for the geopolitics of the Middle East, especially the oil exporters of the Persian Gulf.

It’s now the U.S. vs China, everyone else needs to pick a side

Two tanker seizures demonstrates U.S. intent towards shadow fleet

Yesterday, about an hour after we briefed our readers that this was about to occur, the U.S., with operational support from the U.K., boarded and seized a Russian-linked oil tanker in the North Atlantic as it transited waters between Iceland and Scotland. The vessel has been reported under more than one name (originally Bella 1 before a subsequent rebranding as Marinera when it took the Russian flag), which fits a familiar sanctions-evasion playbook: rename, reflag, and reshuffle paperwork to hide origins.

The interception also appears to have been timed to avoid a dangerous maritime standoff. Russian naval assets were moving to provide cover for the tanker, including a submarine that had been despatched to protect the vessel.

The episode matters for what it indicates about resolve, not only the target. A seizure in far northern waters is operationally demanding and sends a strong political message. It suggests the U.S. is prepared to enforce sanctions and related legal orders beyond narrow choke points, and to do so with allied enabling support, including surveillance, deconfliction, and logistics. It also reinforces a deterrent message to shipping networks that depend on ambiguity: if the ownership chain is opaque and the operational profile is evasive, distance from shore is not necessarily safety.

In parallel, the U.S. also seized another oil tanker off Venezuela. Taken together, the two actions look less like isolated cases and more like a campaign against the logistics of sanctioned oil, not merely the barrels themselves. The focus is on the connective tissue of the trade: ship management firms, reflagging jurisdictions, insurers, payment channels, and the floating infrastructure that allows sanctioned crude to keep moving. The immediate effect will be caution in the market for high-risk cargoes, higher compliance costs, and more frantic attempts to launder provenance through paperwork and ship-to-ship transfers.

The practical consequence is a growing contest over rules at sea, and a reminder that the shadow fleet problem is now a potential military flashpoint. It is becoming a hands-on business, with boarding teams, allied coordination, and the rising risk of miscalculation.

Move fast and break things

Trump takes on the Military-Industrial Complex

President Donald Trump warned that prime defense contractors that, in his view, have been too generous to shareholders and too slow to expand industrial capacity will face penalties.

He said executive compensation would be capped at $5 million and that dividends, and in some versions of the threat buybacks as well, would be constrained until companies reinvest in plants, tooling, and delivery performance.

The message was framed as a question of readiness: Washington will not, Trump argued, tolerate shareholder payouts and “exorbitant” pay packages while production schedules slip and maintenance backlogs grow.

Trump reserved particular criticism for Raytheon, or RTX, portraying it as emblematic of the problem: lucrative contracts paired with sluggish responsiveness to military requirements. The implied leverage point is procurement. Even if some of the measures would be hard to implement cleanly across the industry, the administration can tighten contract terms, lean on cost-accounting rules, and steer awards toward firms that demonstrate tangible capacity expansion.

Investors treated the comments as more than rhetorical. At the close on 7 January, shares in major contractors fell sharply:

Lockheed Martin: down 4.82%
Northrop Grumman: down 5.5%
General Dynamics: down 4.18%
RTX: down 2.45% (and lower again in after-hours trading)
Huntington Ingalls Industries: down 3.03%
L3Harris Technologies: down 1.50%
Boeing: down 0.75%

The sell-off reflects two fears. First, limits on dividends and buybacks would remove a pillar of these firms’ equity appeal, especially for investors who treat defense primes as steady cash-return machines. Second, a pay cap and reinvestment mandate would move capital allocation from boardrooms to the White House, with all the uncertainty that implies.

The industry’s deeper worry is precedent: once “performance” becomes the condition for ordinary financial policies, the line between contractor oversight and industrial policy starts to blur.

Trump proposes a bigger Pentagon budget

President Donald Trump has called for a sharp increase in U.S. defense spending, proposing a $1.5trn military budget for fiscal year 2027.

If Congress approves it, the rise would be without precedent, up from the roughly $901bn defense budget enacted for 2026, and it would place the Pentagon even more firmly at the heart of the administration’s economic and industrial agenda.

Trump cast the increase as insurance for what he called “troubled and dangerous times”, and argued that tariff revenue could help pay for it. But tariffs are unlikely to cover the full cost of such an expansion and lawmakers would still have to find the money through the appropriations process.

Trump targets Wall Street’s role in housing

President Donald Trump yesterday said his administration will move to bar large institutional investors from buying single-family homes, arguing that “people live in homes, not corporations” and portraying Wall Street as a contributor to the affordability squeeze.

The target is the scaled buyer: private-equity funds, major asset managers, and large single-family rental platforms that can bid quickly and in bulk.

Markets treated the threat as credible, with Blackstone down about 5% on the day, reflecting fears that tighter rules could weaken the acquisition-driven growth model for single-family rentals and raise regulatory risk across the sector.

The policy’s effect will depend on definitions and enforcement. “Institutional investor” can be drafted narrowly to capture a handful of mega-buyers or broadly enough to include a wide range of pooled-capital vehicles.

A “ban” could mean a direct prohibition, tax penalties above certain thresholds, or limits linked to federal financing. Even if institutional ownership remains a modest share of the national housing stock, concentrated buying in specific metros and price bands can still shift prices at the margin. Without parallel measures to expand supply, the move may alter who competes for homes more than it changes the underlying scarcity that keeps prices high.

House vote tries to keep ACA health insurance subsidies alive

On 7 January 2026, the House voted 221–205 to advance legislation extending the Affordable Care Act’s enhanced premium tax credits, a move that would avert an abrupt increase in health-insurance costs for millions of Americans who buy coverage on the marketplaces. The credits were designed to keep monthly premiums down by increasing the share of coverage the federal government subsidizes, particularly for lower- and middle-income households.

The vote was notable less for its margin than for how it happened. House Republican leaders had resisted bringing the measure forward, and supporters forced it into motion through an unusual procedural route. That matters because it signals that a bloc of lawmakers, especially those from politically competitive districts, sees the politics of premium spikes as more dangerous than the politics of extending an ACA-era benefit.

Nine Republicans crossed party lines, defying pressure from President Donald Trump and their leadership:

Brian Fitzpatrick (PA)
Rob Bresnahan (PA)
Tom Kean (NJ)
Nick LaLota (NY)
Mike Lawler (NY)
Ryan Mackenzie (PA)
Max Miller (OH)
María Elvira Salazar (FL)
David Valadao (CA)

Their incentives are easy to read. Several represent swing districts or states where marketplace enrollment is high, and where health-insurance prices are the kind of pocketbook issue that voters punish quickly. A vote to “advance” the bill is also a lower-risk form of dissent than final passage: it signals concern about affordability and process without committing fully to the final shape of the policy.

Substantively, the fight is over a feature of the ACA that has quietly made the law more durable. The enhanced credits lowered net premiums for many enrollees and broadened eligibility so that some households who previously received little or no help began to qualify. If the enhanced support is not extended, the direction of travel is clear: many people will face higher monthly premiums, and some will respond by downgrading coverage or leaving the market altogether. The biggest shocks tend to fall on older enrollees and middle-income households who do not qualify for Medicaid but still feel premium increases sharply.

Politically, both parties are positioning for blame. Democrats want a clean extension and will argue that Republicans are flirting with a self-inflicted affordability crisis. Republicans are split: some want to avoid being tagged with a premium spike, while others want to limit federal spending, tighten eligibility, or attach conditions framed as anti-waste and anti-fraud. That internal tension is why a small group of Republicans is now willing to break ranks: for them, the cost of inaction is visible, immediate, and personal.

The House vote does not settle the matter. The Senate remains the choke point, and any final deal is likely to involve trade-offs, such as a shorter extension, stricter eligibility checks, or offsets elsewhere in the budget.

Still, the vote changes the near-term landscape. It makes clear that, at least for a handful of Republicans, the politics of health-insurance premiums are becoming more urgent than the politics of relitigating the ACA.

Birthplace of civilization

Lebanon declares progress in the south as Israel signals impatience

The Lebanese Armed Forces have informed the Lebanese cabinet today that they have completed what they describe as the disarmament of Hezbollah south of the Litani River, down to the Israeli border. In practical terms, the army is likely to argue that it has removed heavy weapons and launch sites, dismantled militant infrastructure, and established a security presence strong enough to prevent organized armed activity in that strip.

International skepticism is unsurprising. “Disarmament” is difficult to verify, easy to overstate, and often reversible. Weapons can be concealed rather than surrendered, command networks can go quiet rather than disappear, and calm can be mistaken for the absence of capability. Even if the Lebanese army has made genuine progress in areas where the state’s authority has long been contested, outside actors will ask whether this amounts to a full, verifiable removal of Hezbollah’s military footprint or a partial containment that leaves meaningful capacity intact.

At the same time, Israeli media reporting is portraying Beirut’s effort as insufficient and suggesting that only Israel can enforce it. According to that reporting, Prime Minister Benjamin Netanyahu told ministers that President Donald Trump had given him latitude to act in Lebanon. Kan media, citing government sources, said the two leaders believe the Lebanese government’s performance in disarming Hezbollah is inadequate, and that the Israeli army is the only entity capable of doing the job. It also suggested that the menu of options could include expanded operations, potentially including a ground operation.

Taken together, the narratives collide. Beirut is preparing to declare success; Jerusalem is laying rhetorical groundwork for escalation. The most likely near-term effect is to increase pressure on the Lebanese government and the army to demonstrate visible, measurable steps in the south, while raising the risk that Israel tests those claims through intensified strikes or limited incursions.

America First

America narrows its multilateral footprint

Late yesterday, the White House said the U.S. will withdraw from 66 international organizations and bodies it considers misaligned with U.S. national interests.

The decision was announced in a presidential memorandum directing executive departments to begin ending U.S. participation and support. Secretary of State Marco Rubio said the review is continuing, leaving open the possibility of further departures.

The targets are a particular kind of multilateral machinery. They tend to sit one rung below treaty alliances and core security institutions, and many are technocratic rather than theatrical. Some set standards, publish assessments, compile data, coordinate donor funding, and run training and capacity-building programs. Others are “normative” bodies, designed to shape behavior through reporting, monitoring, and best-practice guidance on issues such as governance, human rights, gender equality, children in armed conflict, and rule-of-law programming. A third cluster sits in the climate, environment, and energy space, where the work is often advisory and scientific, but politically contested because it influences regulation, finance, and industrial policy.

There is a clear trade-off. Exits can save money and reduce exposure to forums Washington believes have become hostile or performative. They can also strengthen negotiating leverage by making continued participation conditional on reform. But withdrawing also means fewer seats at tables where norms and technical standards are written, and less ability to block initiatives that cut against U.S. preferences. Vacuums rarely stay empty. If the U.S. steps back from the less glamorous committees and agencies that do the day-to-day work of multilateralism, other powers and coalitions, including China, are likely to press forward to shape the rulebook.

Rubio’s comment about a continuing review suggests this is intended as the start of a broader reordering rather than a one-off purge. The administration continues moving toward a narrower, more transactional approach to international institutions: participate where the return is concrete, and exit where the perceived costs are ideological, financial, or strategic.

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