• Predictions market stance: Polymarket will only settle the “Will the US invade Venezuela” contract if an overt US military offensive establishes control over Venezuelan territory.
• Contract dispute: Users investing large sums on a US invasion deadline have protested after Polymarket declined to classify the Maduro capture operation as an invasion.
• Resolution criteria: The platform relies on consensus among credible sources to determine contract outcomes, while matching long and short positions and collecting fees.
• Maduro capture wager: An anonymous account, banking over $32,000 at low odds, profited $400,000 when Maduro was removed by January 3 and the market paid out fully.
• Additional trades: The same account executed smaller trades on US forces presence, a War Powers Act declaration, and the “invade” market, locking in sizable returns.
• Political fallout: President Trump framed US policy control in Venezuela after the operation, and Representative Ritchie Torres proposed banning insiders from prediction market trades.
• Industry scrutiny: The timing of wagers and the sector’s limited regulation fuel concerns about information asymmetry and fairness in prediction markets.

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Polymarket is disputing the mission to capture Nicolás Maduro constituted an invasion and said it will only settle a prediction contract if the US military takes control of Venezuelan territory.

The decision by the prediction market has angered gamblers and added to the controversy surrounding a successful wager on the timing of Maduro’s capture that netted more than $400,000 in winnings for a mystery trader. The dispute over the definition of “invade” highlights just one of the controversies faced by the mostly unregulated industry.

Polymarket — which only recently gained regulatory approval to operate legally in the US — says on its website that it will resolve the “Will the US invade Venezuela by . . .?” contract if the US “commences a military offensive intended to establish control over any portion of Venezuela” by one of three dates. 

“The resolution source for this market will be a consensus of credible sources,” it adds.

Prediction platforms such as Polymarket do not typically make directional wagers in their own markets. Rather, they act as an intermediary matching long and short positions and adjudicating the outcome of events, collecting a fee in the process.

After Maduro’s capture and extraction from his Caracas compound by US special forces early on Saturday, President Donald Trump said the US would dictate the Latin American nation’s policies to be carried out by leaders of the remaining regime.

Prices on the question spiked shortly after the raid but fell below 5 per cent when the platform chose not to settle the contract. The platform resolved a similar contract — “US forces in Venezuela by . . .?” — in favour of the “yes” position a few hours after the raid on Saturday.

There is currently more than $10.5mn wagered on the contract — the majority on a January 31 deadline, with the remainder on contracts ending in March and December. Users who had in some cases bet tens of thousands of dollars on a US invasion have taken to Polymarket’s comment section to vent their frustration.

“Polymarket has descended into sheer arbitrariness,” said a user called Skinner. “Words are redefined at will, detached from any recognised meaning, and facts are simply ignored. That a military incursion, the kidnapping of a head of state, and the takeover of a country are not classified as an invasion is plainly absurd.”

Polymarket did not immediately respond to a request for comment.

The bet on Maduro’s capture has revived concern about traders unfairly capitalising on their information edge, after another incident last year in which a trader successfully wagered on the winner of the Nobel Peace Prize. The timing of the bets on the Venezuela contracts appeared to indicate the trader had advance knowledge of the military action.

The anonymous account, created on December 26, placed a series of wagers on four questions related to US actions in Venezuela in the days ahead of Trump’s operation.

The user bet more than $32,000 that Maduro would be removed from power by the end of January, when the “yes” position was trading at an average of 7 cents — implying a 7 per cent likelihood of his ousting. This market paid out at 100 cents when Maduro was flown out of the country on January 3, netting the trader a $400,000 profit. 

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The account made smaller bets on the presence of US forces in Venezuela — buying at 12 cents and redeeming at 100 — and the submission of a War Powers act declaration to Congress — buying at about 5 and selling at 51 cents. 

The account also made a well-timed trade on the controversial “invade” market, betting $1,000 on January 1 when it was priced at 6 cents. The account sold at 18 cents while bettors were confused whether its terms were satisfied — locking in a 200 per cent return before the price fell back to 5 cents.

Congress member Ritchie Torres this week proposed legislation that would prohibit insiders “from engaging in covered transactions involving prediction market contracts”.

• Tariff escalation: US raised tariffs to near 100-year highs with China retaliating, yet 2025 growth stayed at 3.2% partly due to exemptions, AI spending, and expansionary fiscal policy masking the impact.
• Hidden damage: Past lessons show structural harm from policy shocks emerges slowly, so the absence of immediate GDP effects does not mean tariffs are harmless.
• AI sector fragility: Investors question lucrative valuations versus actual returns, leading to punished stocks like Meta and raising concerns about sustainability and potential dotcom-style corrections.
• Tariff burden: About 95% of tariff costs absorbed by US firms, adding 0.7 percentage points to inflation and leaving households roughly $600 poorer, with greater pain expected in 2026.
• China’s imbalance: Continued export dependence and a five-year plan focused on tech over safety nets risk deepening structural problems.
• Europe’s role: EU defends rules-based order but needs deeper single market integration, productivity gains, and capital-attraction strategies.
• US-EU drift: US moves away from its largest economic partner; Europe is quietly diversifying from US financial infrastructure, making new alliances more likely.
• Missed opportunity: With the US as G20 president and France leading the G7, coordinated leadership could restore global stability before inward-looking policies erode living standards.

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The writer is the Gregory and Ania Coffey Professor of Economics at Harvard University and formerly First Deputy Managing Director and Chief Economist of the IMF

Twenty twenty-five was a year when everything changed — yet, somehow, nothing did. The US raised tariffs to their highest level in almost a century, China retaliated and global policy uncertainty intensified. And still, global growth is projected at 3.2 per cent, exactly what forecasters expected a year earlier when none of this turbulence was on the horizon. It would be a mistake, however, to think the global economy is unaffected by tariff fights and policy chaos.

We have seen this movie before. When the Brexit referendum passed, despite the sharp increase in uncertainty, the economic impact was initially minimal. But a decade later, the UK is estimated to have lost between 6 to 8 per cent of GDP relative to its pre-Brexit trajectory. The lesson is simple: structural damage reveals itself slowly, and always too late to be reversed.

So why hasn’t the world felt the sting of tariffs yet? The answer lies partly in actual tariffs being around half of what the US announced thanks to numerous exemptions. Yet at 14 per cent this remains a sharp escalation, the consequences of which had two offsets. First, AI spending and the stock market surge powered by AI optimism have propped up US growth and buoyed economies like Taiwan and South Korea that export AI-related goods. Second, fiscal policy has been more expansionary, not only in the US, but even more so in Germany and China. These forces masked the drag from American tariffs and Chinese retaliation. They also made 2025 look far more stable than it actually was. 

The global economy is more fragile than headline numbers suggest, starting with the fragility in the AI sector. Investors have finally begun to question the gap between sky-high AI valuations and actual AI returns. Companies like Meta, which have signalled massive increases in AI spending without corresponding revenue streams, have been punished. And they are not alone. AI companies will soon have to confront a harsh challenge: prompts cost money, which means subscriptions will need to rise. $20 a month won’t cover the prompt-costs or sustain the infrastructure arms race against new challengers.

This is not a statement about AI’s potential, which is in all likelihood transformative. It is a statement about profitability. With competitive pressure both seen and unseen, the risk of a dotcom-style correction is real.

Meanwhile, the celebrated “resilience” to tariffs is deeply misleading. Tariffs have been costly, and especially so for Americans. Roughly 95 per cent of tariff costs have been absorbed by US firms, with only some passed on to consumers. That “some” matters: tariffs alone have added 0.7 percentage points to inflation. Without them, inflation could have been 2 per cent this year — exactly the Federal Reserve’s target. Instead, tariffs have made the typical US household $600 poorer.

The damage from tariffs will grow more visible in 2026 as the resilience afforded by frontloaded imports fades and companies pass through a higher share of costs to consumers.

China also needs to face up to some uncomfortable truths. Continued reliance on export-led growth is untenable, and Beijing’s new five-year plan, which prioritises allocating resources to technology sectors over shoring up social safety nets and boosting consumption, risks deepening structural imbalances.

Europe, for its part, has played the adult in the room by defending a rules-based global system, but it still needs to pursue internal reforms on its own account. The EU must deepen its single market, raise productivity and position itself as an attractive destination for global capital seeking diversification. 

And the US is not helping. Unfriending the EU — its largest economic partner — is poor economic strategy. While nothing catastrophic happens overnight, Europeans are trying quietly and gradually to decouple from US financial infrastructure, as they question their reliance on Visa and Mastercard. Just a year ago this would have been unthinkable.

The reality is that 2025 was a year when everything changed. The question now is whether 2026 will be the year we correct course. There is an opportunity: the US holds the G20 presidency and France the G7 presidency. Together they can spur action to restore stability to an uncertain and increasingly fragmented global system.

If we fail to act, living standards everywhere will decline and the inward-looking policies that command popular support today will become unpopular. But by then it may be too late.

• Evolving Traditions: Spain's tradition of blackface for the Three Kings Day parade, particularly for the character of Balthazar, is facing renewed scrutiny in the modern era.
• Political Involvement: The regional president of Andalusia, Juanma Moreno Bonilla, participated in a blackface portrayal of Balthazar, drawing criticism from left-wing politicians who labeled the act as racist and colonial.
• Repeated Incidents: This is not an isolated event, with similar blackface controversies occurring in Ceuta, Madrid, and Alcoy in recent years, sparking public debate.
• Criticism vs. Tradition: Critics argue that blackface perpetuates racism and disrespect, while many Spaniards defend it as an harmless tradition with no malicious intent, with some on the right dismissing concerns as overzealous political correctness.
• Calls for Change: Over 60,000 people signed a petition in 2014 demanding a black actor for Balthazar in Madrid, leading to a stated policy change in 2015 to use black actors.
• Ongoing Discrepancy: Despite efforts and the presence of a significant Afro-descendant population in Spain, the practice of blackface in cultural events persists in various regions.
• International Comparisons: The issue of blackface in Spain mirrors similar controversies in other European countries, such as the "Black Pete" character in the Netherlands.

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• Economic cascade: Cuba teeters toward collapse as real wages fall, hunger rises, infant mortality doubles, and over 1 million people fled since 2021, while electricity cuts of 18 hours a day outside Havana have become common.
• Oil lifeline severed: Venezuela’s previous supply of up to 100,000 barrels a day has dropped below 30,000 bpd, and Maduro’s capture threatens the remaining transfers that kept Cuban energy and social programs afloat.
• US pressure intensifies: The Trump administration, backed by Marco Rubio, seized a tanker bound for Cuba, openly predicts regime collapse, and aims to force Venezuela to abandon Cuba even without a clear transition plan.
• Social divide widens: A tiny elite enjoys luxury while most Cubans survive on $10 a month, and an oil cutoff would deepen those inequalities, despite resilience expressed by citizens who fear repression.
• Regime cohesion remains strong: Analysts see no obvious split inside the leadership, recalling purges and life sentences for dissenters, while recent postponements of the Communist Party congress underscore consolidation.
• Uncertain futures: Cubans see possibilities ranging from enforced stability to a Venezuelan-style decapitation or Haitian-like collapse, even as the streets stay calm and citizens monitor developments on public WiFi.

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Soon after US special forces kidnapped Nicolás Maduro from Caracas, Cuban president Miguel Díaz-Canel said his people were prepared to “give their blood, even their lives” to defend Venezuela and Cuba’s revolution.

At the Bleco lounge bar in central Havana — where the servers have sculpted physiques, wear risqué outfits and conspicuous consumption is the norm for the few Cubans who can afford to spend a month’s state salary on a pizza — that kind of revolutionary sacrifice seemed unlikely.

“Hard times are coming,” said Roberto Hernandez, a 34-year-old Cuban who now lives in Spain and was visiting family. “But look at what is here already: it’s a complete negation of socialism, everyone is enjoying themselves, while outside people scrape for a living by snorkelling through piles of garbage.”

People play dominoes on the street during a blackout in Havana in September. Outside of the capital, daily electricity cuts of 18 hours are already common © Yamil Lage/AFP/Getty Images

Beyond the hedonistic bubbles of central Havana, Cuba’s economy is close to collapse. Since 2021, well over 1mn Cubans — a tenth of the population — have fled, according to official figures, and it is hard to find anyone under 40 years old who want to stay. Real wages have collapsed. Hunger — previously rare — has grown, and infant mortality has more than doubled, according to official data.

Yet with Maduro now facing trial in the US, Cuba is confronting even worse prospects, with the end of support from its closest ally Venezuela plunging the island deeper into the void. And Washington, which has over the course of six decades sought to topple Cuba’s communist regime, has indicated it senses the end is near.

“Cuba looks like it is ready to fall,” Donald Trump said on Sunday while on Air Force One. “Cuba now has no income, they got all their income from Venezuela.” “You just wait for Cuba,” added Senator Lindsey Graham, who was standing by the US president. “Their days are numbered . . . I hope in 2026.”

For over two decades, Venezuela has provided Cuba with fuel and financing in exchange for doctors, teachers and security personnel — 32 of whom were killed during the US raid in Caracas on Saturday, according to the Cuban government, which declared two days of national mourning.

Without such programs — which former Venezuelan president Hugo Chávez once described as part of Cuba’s “ocean of happiness” — its devastating shortages of energy and basic goods will only worsen. Outside of Havana, daily electricity cuts of 18 hours are already common.

“Of course, I am worried,” said Havana resident Mario Jesus Reyes Cabrera, 54. “Look at the situation with the power outages . . . and the only help we [were getting] was from Venezuela with Maduro.”

US attempts to overturn the Cuban government have ranged from a plot to assassinate former leader Fidel Castro with an exploding cigar to the Bay of Pigs invasion in 1961, which failed in part after Washington denied air support to the exile invasion force.

While some presidents such as Barack Obama tried to encourage change by relaxing the US’s long-standing embargo, Trump — led by secretary of state Marco Rubio, who is of Cuban parentage — has steadily ratcheted up pressure. In mid-December, US forces seized a tanker, called Skipper, bound to Cuba from Venezuela with almost 2mn barrels of oil.

“If I lived in Havana and I was in the government, I’d be concerned,” Rubio told NBC on Sunday.

Yet exactly how the process of squeezing Havana will lead to political change remains as unclear as ever, given that its government has already survived decades of isolation.

“The Trump administration’s view for months has been that taking down Maduro is the best and easiest way to overthrow the Cuban government,” said Fulton Armstrong, a former US national intelligence officer for Latin America. “But they have never explained how they’d get from the present to their imaginary future. The pieces of the puzzle to make that picture just aren’t on the table”.

The current route, analysts and former government officials said, could involve forcing Venezuela to stop its energy supplies to Cuba, while discouraging other countries in the hemisphere like Mexico — which overtook Venezuela to become the island’s top oil supplier last year — from filling the gap.

At its peak around a decade ago, Venezuela provided 100,000 barrels per day of oil to Cuba. This has dropped to less than 30,000 bpd — compared with Cuba’s estimated daily needs of 70,000 bpd. Another 25,000 bpd comes from domestic production.

“The Trump administration is bound to demand abandonment of Cuba by Venezuela as a side hustle of Maduro’s decapitation,” said one European official, who has dealt regularly with Havana. “Even if they don’t get all of that from the new government in Caracas, they’ll get what they can.”

The end of such programmes will worsen an economy that Díaz-Canel admitted in December was already suffering from “an accumulation of distortions, adversities, difficulties and mistakes of our own”.

In Havana, there was widespread indignation at Maduro’s capture, especially among poorer Cubans. “We’re going to get through this,” said Mercedes Carbonero, 65. “Cubans are tough.”

Even so, an oil cut off would increase the social divide between Cuba’s many “have nots”, who struggle to make ends meet on average salaries worth just $10 a month, and the island’s few “haves” — such as relatives of the political and new business elites — who drive BMWs and can afford $70 tomahawk steaks at Havana’s “The Garden of Miracles” restaurant.

People drink cocktails in a bar in Havana. Cuba is divided between ‘haves’ who can afford to dine out and ‘have nots’ who struggle to make ends meet on less than $10 a month © Adalberto Roque/AFP/Getty Images

But that disquiet is unlikely to translate into mass protests, which Cuban security can quash easily — as in July 2021, when lockdown and a Covid surge prompted tens of thousands to take to the streets in a shortlived outbreak of demonstrations marked by the protest song “Patria y Vida”.

“What good is it to protest, even if all 11mn of us come out, or just 1,000?” said Pedro, a 41-year-old labourer in Havana. “If we protest, they’ll beat us, they’ll imprison us, and things will stay the same.

A second possibility, analysts said, is a Venezuelan-style solution, where the US executes a military-led decapitation of the government and then seeks to work with more pragmatic elements of the regime. But that is even more unlikely given the high degree of internal cohesion at the top of Cuba’s government, and regular purges of ministers who step out of line.

In December, former economy minister Alejandro Gil Fernández, once a senior aide to Díaz-Canel, was sentenced to life imprisonment on espionage charges. Another sign the leadership is hunkering down, analysts said, was the postponement of the Communist Party’s ninth congress, which was scheduled for April and usually takes place every five years.

Cuban president Miguel Díaz-Canel said his people were prepared to ‘give their blood, even their lives’ to defend Venezuela and Cuba’s revolution © Adalberto Roque/AFP/Getty Images

“I don’t see anyone in Cuba like [Venezuela’s acting president] Delcy Rodriguez,” said Frank Mora, a former US deputy assistant secretary of defence for the western hemisphere during Obama’s presidency.

“For change you’d need to see regime splits and competing factions, and I just don’t see that in Cuba — unlike in Venezuela, where there have always been tensions between the various groups.”

In the days following Maduro’s capture, the crumbling streets of Havana and secondary cities such as Cienfuegos remained calm, with little in the way of unusual activity — except for the many Cubans avidly following the news on their phones by public WiFi hotspots.

That sense of decay and stasis, said one Cuban intellectual who has a modus vivendi with the regime, suggested a third possible future for the island, similar to that of the western hemisphere’s poorest country: Haiti.

“It’s going to be a total collapse,” said Hernandez, the patron at Havana’s Bleco bar. As he spoke, the power suddenly flicked off, the bar went dark and the air conditioners fell silent. “There you go,” Hernandez added, gesturing that his point had been made.

Additional reporting by Daniel Montero; cartography by Andrew Francisco