Strikingly Emergent.

In exchange for nothing.

“Most mornings I learn more from New Items than I do from all of the traditional papers I read combined.” — Michael Blair, former presiding partner, Debevoise & Plimpton.

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1. The new Trump plan to end the war in Ukraine would grant Russia parts of eastern Ukraine it does not currently control, in exchange for a U.S. security guarantee for Ukraine and Europe against future Russian aggression, a U.S. official with direct knowledge told Axios. Ukraine and its backers would see that as an enormous concession to Russia. The White House view, according to the U.S. official, is that Ukraine is likely to lose the territory anyways if the war continues and “therefore it is in Ukraine’s interest to reach a deal now.” The two thorniest issues in the Ukraine talks up to now have been who will control what territory once the war is over, and how Ukraine can be assured that Russia won’t simply resume the war at a later date. The 28-point Trump plan calls for Russia to gain full de facto control of Luhansk and Donetsk (together referred to as the Donbas), despite Ukraine still controlling around 14.5% of the territory there. (Source: axios.com)

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2. Institute for the Study of War (ISW):

The reported proposed peace plan would deprive Ukraine of critical defensive positions and capabilities necessary to defend against future Russian aggression, apparently in exchange for nothing. ISW continues to assess that ceding the remainder of Donetsk Oblast to Russia and freezing the frontline in southern Ukraine would disproportionately favor Russia. (Source: understandingwar.org)

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3. Eurointelligence:

Perhaps the most telling part of the story is that none of the Europeans have been involved. The German foreign minister, Johann Wadephul, said he has not even been briefed about a peace plan for Ukraine. NBC News said that JD Vance, Marco Rubio, Steve Witcoff and Jared Kushner had negotiated the plan with a team of Russian negotiators directly. (Source: eurointelligence.com. Italics mine.)

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4. The Wall Street Journal:

Mao Zedong once said that China must wield both the pen and the gun against its adversaries. It is a strategy China is now intensifying for Taiwan.

With its so-called pen, China’s state television is preparing the domestic Chinese population for a new phase of pressure against Taiwan.

Its prime-time slot is filled with a new historical drama, “The Silent Honor,” which lionizes Communist Party agents operating in Taiwan after the Nationalists fled to the island in 1949 following their loss of the civil war to Mao’s forces.

In a parallel move suggesting a top-down mandate to reorient cultural output toward national struggle, state-owned drama troupes are receiving approval only for war-themed plays, said people briefed on the matter, while other genres are being rejected…

Simultaneously, China’s military signaled its readiness to escalate last weekend, sending four armed China Coast Guard vessels close to an island chain that both Beijing and Tokyo claim as their own. Japanese fighters rushed to intercept a Chinese military drone hovering near Yonaguni, Japan’s westernmost island and the closest point to Taiwan. (Source: wsj.com)

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5. Concerns are growing that a diplomatic spat between Japan and China over Taiwan could descend into a drawn-out crisis, similar to the breakdown in relations over the disputed Senkaku Islands in the East China Sea more than a decade ago. Fears have been increasing since a meeting between senior officials from the two countries in Beijing on Tuesday failed to produce a breakthrough. Instead, China reimposed an import ban on Japanese seafood products on Wednesday, reversing a goodwill gesture that had led to a partial lifting of such imports earlier this year. (Source: asia.nikkei.com)

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6. Japanese Prime Minister Sanae Takaichi is set to unveil an economic package funded by an extra budget about 27% bigger than what was pledged in her predecessor’s spending plan a year ago, underscoring her commitment to an expansive fiscal policy. The package will incorporate ¥17.7 trillion ($112 billion) of spending from the general account, according to documents seen by Bloomberg Thursday. That tops the ¥13.9 trillion former Primer Minister Shigeru Ishiba unveiled last year, and is set to effectively be the size of the upcoming extra budget. Given the larger size, additional bond issuance will also be bigger than last year, according to people with knowledge of the matter. (Source: bloomberg.com)

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7. China is considering new measures to turn around its struggling property market, as concerns mount that a further weakening of the sector will threaten to destabilize its financial system, according to people familiar with the matter. Policymakers including the housing ministry are considering a slew of options, such as providing new homebuyers mortgage subsidies for the first time nationwide, said the people, asking not to be identified discussing a private matter. Other measures being floated include raising income tax rebates for mortgage borrowers and lowering home transaction costs, one of the people said…China has been trying to put a floor under its four-year real estate downturn, which has weighed on everything from household wealth to consumption and employment. While the housing sector picked up modestly after the government stepped up support about a year ago, the momentum quickly fizzled. Home sales have been falling since the second quarter and fixed-asset investment collapsed last month. (Source: bloomberg.com)

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8. The Economist:

America’s huge mortgage market is slowly dying. In America’s foundation myths, the humble mortgage rarely features. There are no stirring ballads about the heroism of 30-year rates or credit-scoring. Yet mortgages have fueled the American dream, which centers on home ownership, ever since the federal government began subsidizing property loans a century ago. Now that fuel is running low. At $13.5 trillion, America’s current stock of mortgage debt is equivalent to 44% of the country’s GDP. That marks a drop of almost 30 percentage points since the global financial crisis of 2007-09, which was sparked by a binge on dicey housing debt, and the lowest level since 1999, before that property bubble got started. More striking still, mortgage debt has shrunk to just 27% of the value of American household property—a 65-year low. A great de-mortgaging is under way, with worrying consequences for the property market.

With Wall Street fretting about other corners of American finance, such as booming private lending to shaky mid-size firms, the tranquility of the mortgage market might seem like a sign of healthy restraint. In fact, it masks an insidious crisis. The median monthly principal-and-interest payment on an American home has surged from just above $1,000 to $2,100 in five years. (Source: economist.com).

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9. No one worries about the insurance industry quite like Tom Gober. From his home office outside of Pittsburgh, the forensic accountant has been tracking, documenting and highlighting the weaknesses of the $9.3 trillion sector responsible for the financial well-being of millions of Americans. “I’ve been seeing warning signs for years, and I’ve been very vocal about it,” Gober, 66, said in a recent interview in his living room. More recently, he’s been paying attention to what he says is the most troubling development yet: The influx of private equity’s billions. (Sources: bloomberg.com, acli.com. Mary Williams Walsh, who spoke at length with Mr. Gober, wrote about this in last Saturday’s edition of News Items.)

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10. Asia’s foreign-exchange reserves have surged to almost $8 trillion, providing the authorities from Tokyo to Mumbai with ample ammunition if they need to step up defending their currencies. The major central banks in the region have added more than $400 billion to their reserves this year, with 11 of the largest monetary authorities now having a stockpile of close to $8 trillion, according to data compiled by Bloomberg. The increase has been helped by this year’s decline in the dollar and rally in gold prices. (Source: bloomberg.com)

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11. A team of researchers at the Broad Institute, led by gene-editing pioneer David Liu, has developed a new genome-editing strategy that could potentially lead to a one-time treatment for multiple unrelated genetic diseases. Gene-editing medicines are often made one at a time to treat a specific mutation, an approach that’s difficult to scale up to address the thousands of rare diseases affecting patients around the world. The new technology, called PERT (prime editing-mediated readthrough of premature termination codons), is designed to maximize the potential of gene editing by using just one editing agent to serve as many patients as possible. Research paper is here. (Sources: broadinstitute.org, nature.com)

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12. The days when Silicon Valley and leading American universities led the way in shaping the future of science may be ending, as China overtakes the United States not only in research output but in some cutting-edge fields, according to one of the world’s leading academic publishers. “When I looked into data from Digital Science’s Dimensions database, I can see a widening gap between China and the United States in research output. “By 2024, Chinese researchers had published 1.1 million articles, compared to 880,000 from their US counterparts,” Fred Fenter, chief executive editor of the Switzerland-based publisher Frontiers, said in an interview. While the US has traditionally been seen as leading in medical research, recent publishing trends tell a different story. “In 2023, China accounted for 40 per cent of papers in the medical field, a share that actually rose to just over 50 per cent in 2024,” Fenter said. “In energy research, China is already the clear global leader, producing around 35 per cent of all papers in the field – and with significant impact. “There is no doubt that China is now the leader in scientific publishing and output. Other indicators, such as patents, further reinforce that China has surpassed the US not only in volume but also in high-quality scientific production.” (Source: scmp.com)

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13. In 2020, a study from the Paulson Institute, which promotes constructive ties between the United States and China, estimated that Chinese A.I. researchers accounted for nearly one-third of the world’s top A.I. talent. Most of those Chinese researchers worked for American companies and universities. A new study from the Carnegie Endowment for International Peace shows that a vast majority of these Chinese researchers have continued to work for U.S. institutions. Of the 100 top-tier Chinese researchers in the original study who were at U.S. universities or companies in 2019 — three years before the arrival of ChatGPT set off the global A.I. boom — 87 are still doing research at U.S. universities or companies. “The U.S. A.I. industry is the biggest beneficiary of Chinese talent,” said Matt Sheehan, an analyst who helped write both studies. “It gets so many top-tier researchers from China who come to work in the U.S., study in the U.S. and, as this study shows, stay in the U.S., despite all the tensions and obstacles that have been thrown at them in recent years.” (Source: nytimes.com)

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14. A group of quantum physicists claims to have created a version of the powerful reasoning AI model DeepSeek R1 that strips out the censorship built into the original by its Chinese creators. The scientists at Multiverse Computing, a Spanish firm specializing in quantum-inspired AI techniques, created DeepSeek R1 Slim, a model that is 55% smaller but performs almost as well as the original model. Crucially, they also claim to have eliminated official Chinese censorship from the model. (Source: technologyreview.com)

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15. The New York Times:

Something is changing in an otherwise quiet corner of Christianity in the United States, one that prides itself on how little it has changed over time. Priests are swapping stories about record attendance numbers. Older members are adjusting — or not — to the influx of new attendees. Parishes are strategizing about how to accommodate more prospective converts than existing clergy can reasonably handle on their own.

Across the country, the ancient tradition of Orthodox Christianity is attracting energetic new adherents, especially among conservative young men. They are drawn to what they describe as a more demanding, even difficult, practice of Christianity. Echoing some of the rhetoric of the so-called manosphere, new waves of young converts say Orthodoxy offers them hard truths and affirms their masculinity.

In the United States, Orthodox Christianity is by far the smallest and least-known of the three major branches of Christianity, representing about 1 percent of the population, compared with about 40 percent who are Protestant and 20 percent who are Catholic. Orthodox pews here have historically been occupied by immigrants from Ukraine, Greece and other countries with large Orthodox populations. Their American-born children often drift to other churches.

But a homegrown Orthodox Christianity is strikingly emergent. (Source: nytimes.com)

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Quick Links: Shale oil’s next revolution should worry OPEC. US and Saudi Arabia reach deal for rare earths facility in Gulf kingdom. Europe’s carmakers risk losing plug-in hybrid war to China on their own turf. What happens when even college students can’t do math anymore? Warner settles lawsuit and agrees licensing deal with AI music platform. New Mexico launched universal child care, becoming the first state to guarantee free care regardless of income. A record 13 people in Japan have been killed by bears so far this year. Morning songs: Ry Cooder & V.M.Bhatt.

Financialization Links: Nvidia shrugs off ‘AI bubble’ anxiety with bumper chip demand. Google web searches worldwide for “AI bubble”. Federal Reserve officials ‘strongly’ divided on December interest rate cut. Trump says he’d ‘love to fire’ Fed Chairman Jay Powell. How’s liquidity in the US life insurance sector? Deteriorating, Bob!

Political Links: Is it unbelievable incompetence or “prosecutorial misconduct”? It was 427–1, so give Rep. Clay Higgins credit for a serious no vote. President Trump will be very unhappy with the results of the latest Fox News poll. “Among all voters, 41% approve of the job Trump is doing, while 58% disapprove. Democratic Party prospects for the 2026 mid-term elections appear to have improved, dramatically. Democratic megadonor Tom Steyer announces run for California governor. YouTube’s right-wing stars fuel boom in politically charged ads. Across the democratic world, the postwar era’s dominant parties face a populist insurgency. The end of China’s old guard. Trump’s sanctions undermine Putin’s sway in the Balkans. FT’s Janan Ganesh: The Labour government is exactly as bad as it was always going to be. Melania’s dress sent a message.

Science/Technology Links: Mind-reading devices can now predict preconscious thoughts. Scientists reawaken exhausted T cells to supercharge cancer immunity. Simple molecule shows remarkable Alzheimer’s reversal in rats. Quantum computing needs its own industrial revolution. Google DeepMind introduced Gemini 3: “our most intelligent model that helps you bring any idea to life.” Google DeepMind has hired the former chief technology officer of Boston Dynamics as the company pushes deeper into robotics. More on Yann LeCun’s departure from Meta. New AI agent learns to use CAD to create 3D objects from sketches. U.S. approves deal to sell AI chips to Middle East. Dimming the sun is a terrifying new industry. Ultrasonic device dramatically speeds harvesting of water from the air. The planet is now a neural network. A single asteroid can erase a city. Here’s how Earth plans to stop the next one. One of America’s most dangerous volcanoes will soon power homes. The depths of the Arctic Ocean have warmed more than scientists expected. Question of the Day: Who is OpenAI’s auditor?

War: AI is supercharging disinformation warfare and America’s defenses aren’t ready. Amazon warns of global rise in specialized cyber-enabled kinetic targeting. Russian spy ship targeted RAF pilots with lasers, says UK defense secretary. China appears to have taken a significant step in military aviation. Oslo’s public-transport authority found a Chinese electric bus could be remotely disabled via its battery-control system. The growing prevalence of Chinese technology in Europe’s infrastructure is stoking security concerns across the region. Israeli figures warn state has ‘lost control’ as West Bank settlers attack. Israel launched a series of strikes on Gaza on Wednesday, killing at least 25 people. Infighting and paranoia among Islamic Revolutionary Guards Corps (IRGC) and other Iranian regime officials have reportedly increased since the Israel-Iran War. Hezbollah is likely smuggling weapons from Syria to southern Lebanon.

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Podcasts: Richard Haass and I engage in a “wide-ranging discussion” on Venezuela, Ukraine, a right-wing media roll-up and more. Tomorrow: a new podcast about focused ultrasound: a noninvasive therapeutic technology with the potential to transform the treatment of many medical disorders. We’ll post that at noon (tomorrow).