TheChek News Flow

Lossmaking sales are the latest sign of weakness in the capital’s property market

A higher proportion of homes in London were sold at a loss than any other region in England and Wales last year, according to a study, in the latest sign of weakness in the capital’s property market.

Hamptons’ analysis of Land Registry data shows that 14.8 per cent of London sellers sold for less in 2025 than they originally paid, above the national average of 8.7 per cent.

This was the same share as in 2024, but higher than any other region in England and Wales — the first year in a decade that the North East of the country did not top the ranking.

The high proportion in London was driven by flats, with 22 per cent of them selling at a loss compared with 3.5 per cent of houses, making it “increasingly difficult for flat owners to bridge the step up to a house”, according to the report.

Sales at a loss were also more common in the most expensive boroughs of the capital, with the proportion in the City of London, Kensington and Chelsea, Westminster, and Hammersmith and Fulham all above 20 per cent. Instead, in Barking and Dagenham, where housing is cheaper, just 5.3 per cent of sellers sold below the purchase price, according to the research.

Aneisha Beveridge, head of research at Hamptons, said: “In London, upward house price growth is no longer the one-way bet it once seemed.”

“In some cases, even owners who bought a decade ago still face getting back less than they paid, something that would have been almost unthinkable in the heady days of 2015,” she added.  

The share of sales that were lossmaking in London is up from 9.2 per cent in 2019 and 5.9 per cent a decade ago.

In contrast, the share of lossmaking sales in the North East has more than halved since 2019, falling to 13.9 per cent in 2025.

“Nationally, rising gains in the north have helped offset shrinking returns in the south,” said Beveridge. “And with much of the recent price growth in the north and Midlands now baked in, it’s possible that seller gains there could outpace those in the south — in both cash and percentage terms — for the foreseeable future.”

FT analysis of official data published last month revealed that house prices are falling in around half of London’s boroughs, with flats underperforming the rest of the market.

Beveridge said that over the next few years, more sellers are likely to have missed out on London’s 2012-16 house price boom, having bought instead at what turned out to be the top of the market. 

It comes as separate research from the Institute for Fiscal Studies showed that the property price boom in the 1990s and 2000s reduced social mobility.

The analysis said that “enormous” wealth gains linked to the surge in house prices over that period led to children of homeowners in booming areas having relatively more housing wealth themselves in their late 20s to late 30s. They were also more likely to own homes in London and the wider south east than other children.

Peter Levell, a deputy research director at the Institute for Fiscal Studies, said: “The surge in house prices from the mid-1990s until the mid-2000s created significant and lasting inequalities — not just between people at the time, but among their children as well.”

Leica’s next shot: inside the camera pioneer’s strategy for the iPhone age

Chief executive of Blackstone-backed German luxury photography group says too much nostalgia is ‘dangerous’

A family-controlled German camera brand that revolutionised modern photography over a century ago with its mass-produced lightweight cameras is looking beyond its past as it charts a future in the smartphone age.

While a collector last year paid €7.2mn for a 102-year-old prototype, Leica Camera’s chief executive Matthias Harsch told the Financial Times that relying too much on nostalgia was “always dangerous”, as he seeks to build on the revival of a company that almost collapsed two decades ago.

Leica, which launched its revolutionary 35mm camera in 1925, almost went bust in 2005 as its high-price analogue cameras struggled to compete with cheaper and more versatile digital cameras made by Japanese rivals such as Canon, Nikon and Sony.

The company, which was saved by Austrian investor Andreas Kaufmann, is determined to learn from past mistakes when it was slow to embrace digital transformation. It is launching new products and seeking to take advantage of consumers’ enthusiasm for traditional photography, even as smartphone cameras become ever more advanced.

“The supposedly dead camera industry has actually returned to growth mode,” Harsch said at Leica’s headquarters in Wetzlar. “Never before have so many people been involved with photography.”

Under Kaufmann, now the company’s chair, Leica invested in new digital models and top-of-range optics including modern versions of the M rangefinder series that was first launched in 1954. In 2008, it brought out a 50mm lens that exceeds the human eye’s perception capabilities, and retails for as much as €12,350.

The former school teacher, who inherited a fortune from an aunt, oversaw projects that played on Leica’s legacy and defied some industry conventions, including introducing a digital camera with a black and white sensor, and another without a viewing screen.

Kaufmann’s changes inspired a roaring comeback for Leica, which had record revenues of €596mn in the year to March, 8 per cent higher than a year earlier. Sales were just €94mn in 2004-05. Harsch said profitability also reached an all-time high.

Leica, in which private equity group Blackstone holds about 45 per cent, does not disclose profitability numbers. It grew annual sales by an average 10 per cent in the two decades following its near collapse. The company was delisted in 2012.

Leica cameras and lenses blend Bauhaus design and high-quality engineering, and make up a quarter of global sales for cameras priced at more than €4,000, according to company data. The latest addition to its flagship M series has a list price of about €8,000 excluding a lens.

The first mass-produced 35mm still Leica I was launched at a trade show in Leipzig in 1925, after years of tinkering by Oskar Barnack, a technician at microscope maker Ernst Leitz Wetzlar, as he sought alternatives to the bulky and heavy glass plate cameras of the time.

Weighing less than 500 grammes, the Leica I started a new era of reportage photography and made the company a leader in the market for top-end cameras.

Its rangefinder series — the M system — was launched in 1954 and was until the early 1970s the gold standard among professional photographers such as street photography pioneer Henri Cartier-Bresson and enthusiasts including the UK’s Queen Elizabeth II.

But as consumers moved first to autofocus single-lens reflex cameras and later to new digital technology, revenues collapsed and Leica narrowly avoided bankruptcy in 2005, having been late in developing its own film-less efforts. Its new cameras also suffered from teething problems, with the first digital M requiring cumbersome external infrared filters.

The recovery initiated by Kaufmann, who started buying shares in 2004, has grown Leica into a 2,400-strong company, split between its Wetzlar factory, a production site in Portugal, and a global network of stores and distributors.

Leica has sought to maintain its premium image through collaborations with celebrity fans and in-house auctions that highlight the value of its cameras as collector items. Many of its stores double up as art galleries.

The cultivation of a community of photographers and collectors is a “major part of their strategy”, said Peter Coeln, founder of one of the first Leica shops in Vienna, whose business was bought by the German company in 2014.

Leica-owned branded shops, now at more than 120 worldwide, had also made a “difference” as it competed with brands that tend to market their products through high street retailers, said Harsch.

The company has also sought to combine its heritage with modern trends, meaning that the newest digital cameras are compatible with lenses dating back to the 1930s.

“What’s really, really unusual with the core Leica M cameras is that they are a very direct evolution from 1925,” said Sean Reid, an expert who writes about cameras and lenses at reidreviews.com.

Leica added Bartolomeo Rongone, the boss of Italian fashion house Bottega Veneta, to its supervisory board last year in a move to further position the brand in the luxury market, and has collaborated with Chinese manufacturers Huawei and Xiaomi on smartphones.

It has also developed an app that gives smartphone pictures its signature feel. After starting its range of luxury watches, Leica is now also moving into eyewear, although Harsch said the camera business, which generates 80 per cent of revenues, will remain the sales engine.

Harsch, chief executive since 2017, is betting that this time, instead of being a victim of disruption, Leica will benefit as consumers swap TV sets for projectors, boosting its projection kits that sells for €3,500 apiece.

The segment will capitalise on Leica’s expertise in lens making but flip the way the image is processed, he said. Instead of filtering light through to a camera sensor, the projectors beam it out on to a surface.

“You have to bring your own areas of expertise into new business areas,” Harsch said, adding that the new ventures will take time to deliver.

Sandisk, Western Digital, Seagate and Micron need to keep undershooting demand

The world needs a lot more memory chips and hard drives. The companies making those products have very good reasons not to rush the job.

The boom-and-bust memory business has been enjoying its biggest boom in years—perhaps ever. The rapid build-out of infrastructure for artificial intelligence is consuming a large portion of available supply of NAND flash memory, DRAM memory and hard drives. That has resulted in a shortage of memory for other markets such as PCs and smartphones. “Memory is in the midst of a generational supply and demand mismatch,” Morgan Stanley chip analyst Joe Moore wrote in a report last month.

Tight supply is driving up prices and sharply boosting revenue and earnings for memory producers. Micron MU 5.53%increase; green up pointing triangle posted record quarterly revenue and operating income last month, while Samsung 005930 0.14%increase; green up pointing triangle said Thursday that its fourth-quarter operating profit is expected to triple on a year-over-year basis.

A severe market shortage accompanied by sky-high prices would normally compel manufacturers to sharply boost their production. But memory companies have been burned by sharp price swings in the past and will therefore be cautious in their response this time.

They have a strong incentive to do so, as memory stocks have become a hot commodity on Wall Street. Micron, Seagate STX 6.87%increase; green up pointing triangle and Western Digital WDC 6.81%increase; green up pointing triangle saw their stock prices more than double in 2025 and were the biggest gainers on the S&P 500 for the year. Flash memory maker Sandisk SNDK 12.81%increase; green up pointing triangle has soared 10-fold since spinning off from Western Digital in February. SK Hynix 000660 -1.59%decrease; red down pointing triangle, the South Korean chip maker that is focused exclusively on memory, is up 88% in just the past three months.

Analysts expect prices on memory chips and hard drives to remain high this year, which will likely help sustain those elevated market values. But the industry has a long history of brutal cycles, where downturns in pricing can often take producers into the red and sink their stock prices. The last one happened in 2023, when Micron, Western, Seagate and Hynix all produced annual operating losses.

Will this time be different? It could be. The AI computing systems designed by companies like Nvidia NVDA -0.10%decrease; red down pointing triangle and Advanced Micro Devices AMD -0.74%decrease; red down pointing triangle require gobs of specialized DRAM to perform their functions. Those functions also create reams of new data that has to be stored on components like hard drives and flash-based solid-state drives.

This has created a “data explosion,” according to Bernstein analyst Mark Newman, who projects total data-storage shipments between NAND flash and hard drives will average 19% annual growth over the next four years, compared with a 14% average growth rate over the past 10.

Nvidia and AMD have also accelerated their own product cycles, introducing significant new systems every year now. Boosting the DRAM memory on those systems helps improve the overall performance over previous generations; Nvidia said its Rubin GPU chips unveiled this past week at the Consumer Electronics Show nearly triple the memory bandwidth compared to the Blackwell chips it started shipping last year.

Demand for such systems is ultimately powered by capital expenditures by the world’s largest tech companies. That has already reached nosebleed levels but isn’t yet showing any signs of slumping. Based on estimates for the December-ended quarter, total capital spending by Amazon.com, Google, Microsoft and Meta Platforms hit $407 billion in 2025.

Analysts expect that to jump to about $523 billion this year, according to consensus projections from Visible Alpha. “If demand stays this robust, the upcycle could continue for multiple years,” wrote Morgan Stanley’s Moore.

But memory executives are ever mindful of past downcycles. So despite dire projections of memory shortages for other types of electronics, producers like Micron, Sandisk, Seagate and Western will proceed cautiously in adding new production capacity. Only Seagate is planning a substantial increase in its own capital expenditures this year, and that is only to keep the company’s capital intensity around its historic level of about 4% of revenue.

Sandisk is expected to grow its own capex by 18% for the fiscal year ending in June despite a 44% surge in revenue for the same period, according to FactSet estimates. At a UBS conference last month, Sandisk Chief Executive David Goeckeler said the lack of long-term supply agreements in much of the NAND flash industry makes it challenging for companies like his to make long-term investment decisions. Like other types of semiconductors, NAND flash chips require facilities that can take years to build.

“Perhaps the demand side should think about making commitments that are longer than three months at a time,” Goeckeler said at the conference. He added that “we need to get the economics right to be able to continue to invest that money and not go through these huge episodic periods of losing money.” Some memories burn brighter than others.

Speaker of Iran’s parliament says country would also target Middle Eastern shipping lanes and Israel

Iran will attack American military bases in the Middle East if the U.S. hits first, the country’s parliamentary speaker said Sunday after U.S. officials said the Trump administration was looking at preliminary options for striking Iranian military sites.

Mohammad-Bagher Ghalibaf also threatened that Iran would hit Middle Eastern shipping lanes and Israel. The U.S. maintains air and naval bases in the United Arab Emirates, Bahrain and Qatar. Iran struck Al Udeid Air Base in Qatar last June after the U.S. dropped massive bombs on Iranian nuclear facilities.

President Trump has threatened repeatedly to intervene in the event of a bloody crackdown on Iranian protesters. That has prompted U.S. officials to examine possible strikes on Iranian military sites, The Wall Street Journal reported Saturday. No action is imminent, the officials said.

Protests that have turned into a call to topple the Islamic Republic became increasingly deadly as they continued over the weekend despite an internet blackout. The death toll has risen to 116, according to the rights group Human Rights Activists in Iran.

Ghalibaf also raised the possibility of a pre-emptive attack, following other senior officials who have mentioned this in recent days.

As parliamentary speaker, Ghalibaf is Iran’s third most senior official after the supreme leader, who has the final say on domestic and foreign policy, and the country’s president. He is also a former commander in the Islamic Revolutionary Guard Corps and retains the backing of the paramilitary force.

Wars, chatbots and bond vigilantism could rock markets this year

With some creative licence and input from experts, here’s my top eight, beginning with economics, then on to geopolitics and ending with some Black Mirror-esque tech scenarios:

I asked FT economics commentator Chris Giles for his worst-case scenario on the Fed.

“First, a Donald Trump-loyalist Fed chair is nominated and approved by Congress early in the year. Call him Kevin Hassett. Then comes a Supreme Court decision saying Lisa Cook cannot stay on the Fed board while her case against Trump’s dismissal is heard. This would enable the president to gain a majority of his nominees on the Fed board.”

“They could then loosen policy excessively. Further price pressure could come from fiscal measures while companies pass through higher import duty costs in earnest. Rising inflation becomes more obvious towards the end of the year, bond markets take fright and term premiums rise on the back of high inflation expectations and existing fiscal concerns. This would burst high equity valuations.”

Federal Open Market Committee meeting press conferences in which Hassett echoes Trump’s messaging on rates and central bank independence could also catalyse market ructions.

With fiscal discipline still a problem in many developed markets, bond vigilantism remains a risk. The UK, US, France and Japan are particularly vulnerable, given their debt loads.

A push by Trump to fix America’s affordability problem ahead of the US midterm elections, combined with a weakening of the Fed’s independence, could push up US Treasury premiums and, in turn, raise yields in countries with shaky budget arithmetic.

In Britain, there are a few scenarios to consider. Lingering low growth and confidence mean fears around further tax rises could resurface as fiscal events approach (particularly since chancellor Rachel Reeves has backloaded a lot of consolidation to the end of the parliament). Another risk is the resignation of Prime Minister Sir Keir Starmer or Reeves, potentially after a poor showing in local elections in May.

“If Starmer and Reeves are replaced by a new left-leaning top team that weakens the fiscal guardrails and promises big increases in public spending and borrowing, there could be a spike in yields perhaps to above 5 per cent on the 10-year yield,” notes Ruth Gregory, deputy chief UK economist at Capital Economics.

The odds of the US Supreme Court voting down the tariffs Trump implemented under the International Emergency Economic Powers Act are currently around 75 per cent, according to online prediction platforms. A ruling is expected imminently. If it happens, it will come as a relief for the global economy. But there are ripple effects to consider.

First, an angered Trump could double down on duties using other legislative tools — JPMorgan has a useful summary here. Some may take time to implement, but could still lead to punitive duties for certain nations and sectors. Even higher tariffs on China, which markets are most sensitive to, are possible. In any case, this could lead to worse trade and supply chain uncertainty than in 2025.

Second, the court could force the White House to refund revenues paid by US importers. This may eventually trigger panic in US fixed income markets particularly if other legal routes to raising duties are drawn-out. Indeed, bond investors and credit rating agencies highlight the important role existing tariff revenue streams are expected to play in taming America’s budget deficit.

Next, geopolitics. The capricious second Trump administration has already turned the definition of black swans on its head. The following three scenarios come from Marko Papic, chief strategist at BCA Research:

“Riding a high following the exfiltration of [President Nicolás] Maduro, Trump orders the US military to seize Greenland. Denmark pulls out of Nato. Its Nordic peers join it in a new military alliance. The backbone of the western alliance falls apart. Canada begins a rearmament initiative to deter the US.”

While this may trigger risk-off sentiment across markets, Papic reckons there is scope for European assets to boom too. “A break with the US would finally force Europeans to deepen integration in a dramatic manner. The question of whether Europe is a geopolitical entity would be resolved.”

‘Chuck Norris’ premium

“President Trump could start to apply the Maduro tactic to other countries, but ends up choosing a country with a way to retaliate: Iran. Tehran could respond using low-cost tools — drones or zodiac boats filled with TNT — to disrupt the shipping of oil through the Strait of Hormuz. Oil prices rise precipitously ahead of the midterm elections, ensnaring Trump in a downward popularity spiral, denting global economic growth and sparking bearishness.”

“Taking a page from Trump’s newfound respect for a world of spheres of influence, China decides to entrench its own. With Nato in disarray over the potential US war with Denmark and the Middle East again in chaos with Trump threatening regime change in Iran, Beijing decides to invade Taiwan. This would be the ultimate risk for 2026, with stock markets falling, defence stocks surging and commodities going parabolic.”

In order, Papic places a 10 per cent, 40 per cent and 10 per cent chance of these risks crystallising in 2026.

Now, tech.

This one is inspired by James Rickards’ 2024 book MoneyGPT. (Here’s my review.)

In one scenario AI-generated press releases or deepfakes could rapidly spread false information about companies, banks or governments, sparking panic selling.

Rumours about finances at the Magnificent Seven tech firms would cause a ruckus, given their high market concentration. This could be compounded by automated trading algorithms that react to the same false signals, amplifying volatility.

“The absence of subject matter expertise in the AI design stage results in everyone relying on the same trading strategy. There are no contrarians. There is no one to play the role of John Pierpont Morgan in the Panic of 1907. There is only panic and sell, sell, sell because that’s all AI knows,” says Rickards.

For measure, algorithmic trading accounts for an estimated 60-70 per cent of trading volume in major global markets. (The figure is even higher in certain segments, such as cryptocurrencies.)

Last year’s cyber attack on Jaguar Land Rover cost the UK economy around £1.9bn, and illustrated how a breach at one company could cascade across supply chains.

Now consider this on a different scale. À la Netflix thriller series Zero Day, attacks on power grids could cause prolonged blackouts, halting business and, crucially, financial services. (Berlin this month was hit by its longest power outage since the second world war, following an arson attack that damaged several high-voltage cables near a power plant.)

A disruption of payment systems or interbank networks could freeze transactions, while attacks on ports, logistics or GPS systems could paralyse global supply chains.

This may have raised your blood pressure. But tail risks are not forecasts, they are lenses. Exploring unlikely but high-impact scenarios helps identify weak links and challenge blind spots.

These scenarios are not base cases. But assessing them now at least keeps our minds open. In a year in which a lot of unexpected events have happened already, that’s no bad thing.

Elections, crises and reforms are fought with storytelling. This column tracks political narratives linked to heroes, villains or victims using a large language model and 1.15mn tweets.

US corporate bond sales hit $95bn in busiest week since Covid pandemic

Companies in new year borrowing rush ahead of expected glut of issuance to fund AI-related spending

Companies are borrowing in the US bond market at the fastest pace since the Covid-19 pandemic, as Wall Street kicks off what is expected to be a record year of debt sales thanks to AI spending and financing for a wave of mergers. 

Corporate borrowers raised more than $95bn from 55 investment-grade bond deals in the first full week of January, the highest weekly volume since May 2020 and the busiest start to a year on record, according to LSEG data.

Financial institutions and European groups were among the week’s largest issuers, as companies took advantage of strong investor demand for high-quality dollar debt that has pushed borrowing costs close to their lowest level relative to US Treasuries since the global financial crisis.

“Everyone is extremely motivated to get back to the market,” said Teddy Hodgson, global co-head of investment-grade debt capital markets at Morgan Stanley.

While January has typically been a busy month for new bond issuance, many companies are starting their funding programme even earlier than usual this year to get ahead of an expected issuance glut this year to finance M&A activity and big tech companies’ AI infrastructure, Hodgson said.

Morgan Stanley forecasts investment-grade bond sales this year of $2.25tn, eclipsing the 2020 record of $1.9tn.

Many bond offerings during the week were significantly oversubscribed. French telecoms company Orange raised $6bn after attracting an order book of more than $34bn across five tranches of debt, according to people familiar with the transaction. Japan’s Sumitomo Mitsui Financial and US chipmaker Broadcom also raised $5bn and $4.5bn, respectively.

The new year issuance boom came as markets largely shrugged off the dramatic US capture of Venezuelan President Nicolás Maduro. Investors continue to attach little risk premium to US corporate debt, with the cost of borrowing for investment-grade companies at just 0.79 percentage points above government debt, according to Ice BofA data. 

“The market just shrugged it off because there’s so much cash out there, and investment-grade fundamentals continue to be strong,” said Kyle Stegemeyer, head of investment-grade debt capital markets and syndicate at US Bancorp.

Europe’s market for investment-grade debt has also had a busy start to the year, with Italian energy company Enel SpA and French waste management firm Veolia both pricing deals worth at least €2bn this week, while cosmetics manufacturer L’Oréal issued a €1.75bn bond.

Earnings of US high-grade issuers are expected to have grown 11.2 per cent in the fourth quarter of 2025, according to Bank of America estimates.

Insurance companies and pension funds are also piling into high-grade bonds to lock in higher long-term yields ahead of further rate cuts by the Federal Reserve this year.

“As long as insurance and annuity policies continue to be written, you’re going to see capital that needs to be deployed in our market,” said John Sales, head of investment-grade debt syndicate at Goldman Sachs.

Still, the slim extra yields that corporate debt offers relative to ultra-safe Treasuries are keeping some investors on the sidelines. 

“The number of deals is overwhelming and there will eventually be investor fatigue,” said Neil Sun, a portfolio manager at RBC BlueBay Asset Management. “We are building up cash buffers to capture opportunities at wider [credit] spread levels.” 

“It’s like going to a buffet. People always get too excited for the first couple of bites,” Sun said. 

Venezuela: the Hizbollah connection

Across thousands of miles, the Lebanese militant group forged illicit business links with a Caracas regime frozen out by the US

As foreign minister of Venezuela, Nicolás Maduro travelled to Damascus in 2007 for a highly publicised meeting with then-president of Syria, Bashar al-Assad, en route to Tehran.

Maduro was ostensibly in the region to strengthen his country’s ties with others similarly hostile to Washington. But behind closed doors, his visit had another purpose: a secret meeting with a senior Hizbollah commander, integral to its overseas operations.

The previously unreported encounter took place at a hotel in central Damascus, said three people with knowledge of the meeting, and would mark the first known instance of Maduro meeting directly with a member of the Lebanese militant group.

Washington, particularly recent Republican administrations, has long accused Venezuelan officials of colluding with Hizbollah in drug trafficking operations and illicit finance, with several Maduro allies subject to criminal investigations by US authorities that cite such links.

Those relationships face renewed scrutiny following Maduro’s capture by US forces last week in a brazen pre-dawn raid on Caracas. 

Maduro faces sweeping drug trafficking charges. In court in New York on Monday, he pleaded not guilty to four charges of narco-terrorism, conspiracy to import cocaine and possession of weapons.

The indictment does not mention Hizbollah or Iran, but in an interview the day after Maduro’s capture, US secretary of state Marco Rubio said Venezuela has “cosied up to Hizbollah” and its patron Tehran.

“It’s very simple,” Rubio said. “In the 21st century, under the Trump administration, we are not going to have a country like Venezuela in our own hemisphere, in the sphere of control and at the crossroads for Hizbollah, for Iran and for every other malign influence in the world. That’s just not going to exist.”

Hizbollah’s Venezuelan connection sprang from a burgeoning relationship between Tehran and Caracas shaped by anti-US ideology and the impact of Washington’s sanctions on both countries.

Hizbollah, Iran’s biggest proxy, developed relationships with government officials in Caracas under the late leader Hugo Chávez, which grew closer under Maduro, said an intelligence official and another person familiar with the situation.

One of the people said: “You all of a sudden start seeing Hizbollah activities proliferate. We’re talking drug trafficking, money laundering, schemes to obtain passports, arms, intelligence — all orchestrated with diplomatic cover.” 

Hizbollah and Venezuelan authorities have always denied the claims.

But multiple investigations and overt clues illustrate the depth of the relationships, which developed as Hizbollah took an entrepreneurial approach to activities such as money laundering and arms trafficking across the world. 

Jack Kelly, a retired agent for the US Drug Enforcement Administration who helped lead its investigation into Hizbollah and organised crime — dubbed “Project Cassandra” — said the agency found evidence that Hizbollah operatives were provided with Venezuelan passports, while Conviasa, Venezuela’s state-owned airline, provided the group with logistical support.

Project Cassandra was initiated in 2008 to investigate activities including drug trafficking, weapons smuggling and money laundering. Kelly said that around 2010, the DEA learned of cocaine loads being sent on Conviasa flights to Damascus, as well as large bulk shipments of hard currency.

This, Kelly said, was to send on to Hizbollah-linked money exchanges in Lebanon. “That couldn’t have happened without the Chavistas being aware of it,” he said.

Roger Noriega, a former US assistant secretary of state for western hemisphere affairs, in 2012 testified that Conviasa operated regular flights from Caracas to Damascus and Tehran “providing Iran, Hizbollah, and associated narco-traffickers a surreptitious means to move personnel, weapons, contraband and other materiel”.

Much of the evidence of links between Hizbollah and Venezuela dates from Project Cassandra, one of the most comprehensive criminal investigations into the Lebanese group’s international ties. 

But Hizbollah’s relationships in Venezuela appear to have continued since that probe, which ended in 2016.

A complaint filed in a US federal court against the cryptocurrency exchange Binance in December alleged that Venezuela-based, Hizbollah-linked gold smugglers and money launderers had moved tens of millions of dollars in crypto through the exchange. 

Binance said in response to the case that it fully complied with “internationally recognised sanctions laws”.

In one of its most significant findings, Project Cassandra uncovered links between a high-ranking Hizbollah official and a Medellín-based Lebanese drug kingpin with ties to the militant group, Ayman Jomaa.

Jomaa was accused of running one of the largest and most sophisticated international drug smuggling and money laundering networks, involving Colombia and Venezuela, that the DEA had ever seen.

In his testimony, Noriega stated that “Venezuela has provided thousands of phone IDs, passports and visas to persons of Middle Eastern origin” — claims echoed to the FT by ex-US officials and the intelligence official.

Tareck El Aissami, a former Maduro confidant and vice-president sanctioned by the US, Canada and the EU, was key to the passports scheme, said the person familiar with the situation. El Aissami has been indicted on corruption and sanctions-dodging charges in the US.

At the same time, investigators saw striking images of Hizbollah fighters in Venezuela. Kelly said that the DEA around 2010 saw credible evidence that operatives from the militant group were present.

“We saw pictures of Hizbollah fighters on rooftops in Margarita Island with long guns training in urban warfare,” he said. Margarita Island, a duty-free zone off the coast, is a hub of Hizbollah financial activity, said the intelligence official, and is home to a large Lebanese diaspora community. 

Another former US official also said they had seen evidence of Hizbollah fighters wearing fatigues in Venezuela around the same time.

Some members of the Trump administration have described these as training camps, but Matthew Levitt, a former counterterrorism official with the FBI and US Treasury, now an expert on Hizbollah’s global reach, said that was an exaggeration. “Hizbollah has a very deep history in Venezuela . . . It doesn’t need to run training camps to maintain a presence there.”

At times Hizbollah, which was founded in the early 1980s, turned to the sizeable Lebanese diaspora community in Latin America for support, relying on clan-based networks for funding and help concealing illicit business activities, either voluntarily or through coercion. 

“Some of [Maduro’s] confidants and most trusted fixers were from those clans,” said the intelligence official.

As early as 2008, the US Treasury sanctioned Ghazi Nasr Al Din, a Venezuelan diplomat who worked at the embassies in Damascus and Beirut and “utilised his position […] to provide financial support to Hizbollah”.

A 2020 Atlantic Council report written by an analyst who has since joined Trump’s Department of Defense identified the Nasr Al Din clan as one of three “embedded into the Maduro regime bureaucracy […] who provided protection and resources to Hizbollah”.

Adel El Zabayar, a close Maduro ally, was indicted by the US DoJ in 2020 on narco-terrorism charges and was accused of links to Hizbollah, including appearing in propaganda videos for the group. 

Trump administration officials have also made claims with little evidence that Hizbollah planned to use Venezuela as a basis for what would be unprecedented direct attacks on the US.

The Republican chair of the House foreign affairs committee, Brian Mast, on Monday night claimed Maduro had allowed Hizbollah to use Venezuela “as a base for espionage and kinetic operations against the US”.

Legal cases have also alleged Venezuelan links with the Palestinian militant group Hamas, with little supporting evidence.

At the same time there are signs that Hizbollah’s Venezuela connections have endured.

The FT in December found that Venezuela-based crypto accounts had transacted with crypto wallets later linked to Tawfiq Al-Law — a US sanctioned Syrian accused of moving illicit money for Hizbollah, the Iran-backed Houthis in Yemen and a company tied to the Assad regime in Syria.

Binance said it denied the allegations and fully complied with “internationally recognised sanctions laws, consistent with other financial institutions”.

Rubio’s message was being read by Hizbollah, already weakened and under continuous attack by Israel, as a clear threat to their continued operations, according to the person familiar with the group’s thinking. 

“But [Maduro’s] regime is still in place. The system is still in place — the same one that seemingly collaborated with Hizbollah,” said Levitt, the former US counterterrorism official.

“Perhaps the secretary knows something that I don’t — but looking in from the outside, it’s completely unclear to me how what the US did is going to translate into a setback for Hizbollah and Iran in Venezuela.”

Nato silence on Donald Trump’s Greenland threats rattles European allies

Military alliance yet to issue public statement asserting territorial integrity of Arctic island and kingdom of Denmark

Nato’s silence in response to Donald Trump’s threats to seize Greenland has prompted alarm among European capitals fearful that the alliance is failing to defend the rights of Denmark.

It has not issued a public statement asserting Denmark and Greenland’s territorial integrity and sovereignty, or responded to the US president’s stated ambition for the vast Arctic island that is part of the kingdom of Denmark.

That has raised the ire of European members trying to present a united front and ease transatlantic tensions, and stands in stark contrast to the EU’s recent efforts to rally around Copenhagen.

Mark Rutte, the alliance’s secretary-general who enjoys a warm relationship with Trump, has been unusually absent on such a critical security issue affecting his membership. Suggestions from Paris and other capitals for enhanced Nato activity in Greenland have not yet been taken up.

While European officials accept that the US’s central role in the military alliance limits its options to respond, many told the FT that its absence from the crisis risks enhancing the sense of Trump’s impunity in dealing with allies and exploiting Europe’s security dependency on Washington.

“Since we’re clearly talking about nations that are all Nato allies, Nato should initiate a serious debate on this . . . in order to reduce or ease the pressure on the issue,” said Giorgia Meloni, Italy’s prime minister. “The debate is a debate that must involve Nato.”

Trump has accused Denmark of failing to adequately protect the island and invest in its security despite what he claims is rising Russian and Chinese naval activity around it. The White House has said military action was “an option” alongside purchase or other methods of taking control.

That has posed an excruciating challenge for Nato and Rutte. A US invasion or annexation attempt would mean direct conflict between two allies, calling into question its Article 5 mutual defence clause that many members see as its raison d’être.

“They’re conspicuously silent,” said one EU official. “Rutte was supposed to be the man Europe could rely on to be our Trump-whisperer. But he wasn’t supposed to be this quiet.”

“Of course, it is difficult to discuss these things inside Nato,” said an alliance diplomat. “But if you don’t, it implies that we are all OK with what is going on.”

The alliance has issued no public remarks, and Rutte, typically omnipresent in discussions about Euro-Atlantic security, has given only a 60-second response to a television interviewer’s question regarding the crisis.

“While we’re not going to disclose details of diplomatic discussions, the secretary-general is working closely with leaders and senior officials on both sides of the Atlantic, as he always does,” Nato spokesperson Allison Hart told the FT.

For much of last year, Copenhagen took a low-profile approach to the Greenland issue, eschewing public remarks in response to inflammatory statements from Trump or his administration, and urging EU and Nato allies to do the same.

But that tactic was abandoned this week. Mette Frederiksen, Denmark’s prime minister, said that Trump was “serious” about taking Greenland, and that “if the US chooses to attack another Nato country militarily, everything stops. Including our Nato.”

European officials involved in negotiations in Brussels said the statement was influenced by Copenhagen’s rising irritation at Nato’s silence, and reflected a desire to ensure the alliance realised what was at stake.

Danish lawmakers have called for Nato to play a stronger role in the dispute with the US. Carsten Bach, a Liberal Alliance MP, called for a discussion under Article 4 of Nato’s treaty, which refers to threats against member states.

“There is one country in Nato, the US, that sees a threat in the Arctic that may not be quite so clear to the rest of us, and therefore I believe that Nato should play a significant role in this conflict that has now arisen between two Nato countries,” he added.

European Commission President Ursula von der Leyen this week said that “law is stronger than force” in reference to Greenland, while Council President António Costa said: “Nothing can be decided about Denmark and about Greenland without Denmark, or without Greenland.”

The leaders of Nato allies France, Germany, Italy, Poland, Spain and the UK released a joint statement with Denmark noting that they “will not stop defending” the principles of “sovereignty, territorial integrity and the inviolability of borders”.

Nato officials and member state diplomats posted to the alliance say that there is private diplomacy ongoing and internal work to boost collective security in the Arctic region around Greenland. The past couple of years have seen a significant shift from Nato states in that region supporting more alliance leadership, the officials add.

“We have Baltic Sentry, why not have Greenland Sentry? That is what we can do,” said EU defence commissioner Andrius Kubilius, referring to a Nato mission launched a year ago to better protect critical infrastructure in the Baltic Sea.

“I don’t know about those discussions inside of Nato [about Greenland], and how they are happening. But just looking from the outside, Nato is in some kind of special situation,” Kubilius added, citing the fact that both Denmark and the US are members.

“Ukraine is easy for us. Russia has long been the enemy. Greenland is much more complicated. The US is meant to be our great ally. That just makes everything so much more difficult,” said a senior Nordic diplomat.

Asked directly about Trump’s threats this week, Rutte told CNN that he agreed with the US president’s assessment about increased Russian and Chinese activities in the region, and the need to boost security.

“Look at Denmark, they are investing heavily in their military,” he said. “And the Danes are totally fine if the US would have a bigger presence [in Greenland] than they have now. So I think this collectively shows that . . . we have to make sure that the Arctic stays safe.”