If capitalism without bankruptcy is like Christianity without hell, as former astronaut and Eastern Airlines CEO Frank Borman famously put it, then the U.S. over the past decade or so has been a joyous church indeed.

Why it matters: We're now beginning to see signs that the days of very few bankruptcies might be coming to an end, thanks in large part to the Fed.

How we got here: The financial crisis of 2008 to 2009 saw a sharp rise in bankruptcies, as you'd expect.

• It also caused the Fed to cut interest rates to zero and to keep them there for many years.
• It led bank regulators to get stricter about the amount of risk they allowed banks to take on, even as borrowers also started to get worried about the consequences of having too much debt.
• The result was a years-long decline in bankruptcy filings, as smaller debts became easier to refinance in an easy-money era.

Where it stands: A recent uptick in the numbers suggests that era might have ended with the Fed rate hikes of 2022. As CEA chair Jared Bernstein tells Axios, "we know this variable is pretty highly elastic to rate rises."

The big picture: Bankruptcy — a process that wipes out debts and allows fresh starts — is a necessary part of any dynamic economy.

• Fewer bankruptcies isn't always a good thing. It can be a sign of excessive risk aversion on the part of both lenders and borrowers, a paucity of what John Maynard Keynes characterized as "animal spirits."
• As University of Illinois law professor Robert Lawless notes, bankruptcy filings are not a good measure of the health of the economy. "Note how bankruptcies declined as the economy went into recession in the early 2000s," he said of the chart above.

By the numbers: Bankruptcy filings by companies with assets or liabilities greater than $2 million if they're public (or $10 million if they're private) rose to 694 in 2024. That's up 9% from 2023 and up a whopping 87% from a record low of 372 in 2022, per S&P Global.

• Overall, business bankruptcies in U.S. courts rose to 22,762 in 2024, up 33% from 2023 and up 73% from 2022.
• Those numbers are less precise than they seem, since the default setting on most bankruptcy-filing software is "consumer" rather than "business" and many business filers don't check that box.
• Meanwhile, many large corporate bankruptcies involve simultaneous filings from hundreds of subsidiaries, which can result in the numbers being exaggerated.

Yes, but: The absolute number of bankruptcies is still low, even after the recent increases.

• In 1997, for instance, there were 54,252 business bankruptcy filings, and 6.1 million business establishments in the U.S., for a ratio of 0.9%.
• By 2024, that ratio had fallen to 0.3%.

The bottom line: When rates rise, they bite harder. But an economy with more bite isn't always a bad thing.

The world's CEOs are much more worried about global trade wars now that Donald Trump has been elected president than they were a year ago, according to a new survey from the Conference Board.

Why it matters: While no one knows exactly what tariffs the upcoming Trump administration is going to impose on which countries, the one certainty is that substantially all such tariffs will be met with retaliatory counter-tariffs. Or more simply: a trade war.

• As Axios noted on Monday, rapidly introduced tariffs could trigger speedy retaliation from major allies, including a broad-based 25% Canadian tariff on all U.S. imports.
• Such actions would make the 2018 trade war look minuscule.

Zoom out: The 2025 list of the top geopolitical worries also includes "foreign investment restrictions" and "greater risk of conflict in Asia-Pacific," both of which have risen sharply from their position last year.

The other side: Geopolitical worries don't seem to have dampened broader economic optimism.

• While 55% of U.S. CEOs said the risk of an economic downturn or recession was going to be a high-impact issue in 2024, that number has fallen to less than 40% in 2025.
• Similarly, the proportion of U.S. CEOs worried about high borrowing costs fell from 28% in 2024 to 16% in 2025.

Between the lines: As CEOs get more optimistic on the economy, a new Deloitte survey of North American CFOs shows a huge uptick in their risk appetite, too, since the election.

• 67% of CFOs say "now is a good time to take risks" — a six-year high.
• That figure is up from just 12% in the third quarter.

The bottom line: Global CEOs seem to have taken Baron Rothschild's admonition to heart: "The time to buy is when there's blood in the streets, even if the blood is your own."

Mark Zuckerberg moved further in the direction of MAGA on Monday, when he appointed three white men, including UFC chief executive and Trump friend Dana White, to the board of directors of Meta.

Why it matters: We're a long way from 2022, when Peter Thiel resigned from the same board in order to be able to support Trump-aligned candidates.

By the numbers: After Thiel's resignation, the Meta board was 44% female — five men and four women. Today, it's 23% female — 10 men and three women.

• In terms of corporate control, of course, only one vote matters. Thanks to his Class B shares, Zuckerberg will always have the final say.
• The company did not return a request for comment on the changes.

Between the lines: Seven of the 10 men — Marc Andreessen, John Arnold, John Elkann, Drew Houston, Hock Tan, Tony Xu, and Zuckerberg himself — are billionaires.

• White might not have reached the $1 billion mark quite yet, but he's well on his way.

Driving the news: The reinvention of Facebook can be seen in the departure of liberal Democrat Nick Clegg as the company's policy head, and his replacement by prominent Republican Joel Kaplan.

• It can also be seen in the $1 million that Meta donated to a Trump inauguration fund, a donation made by many other tech companies.

The bottom line: As Axios has reported, the fate of Big Tech over the next four years depends on who has Trump's ear at critical junctures.

• Zuckerberg seems to be doing everything he can to ensure that Meta is in exactly that position.

There is a broad-based desire to wrest Fannie Mae and Freddie Mac from federal control once Donald Trump takes office.

Why it matters: These two companies are the backbone of the U.S. housing market — together they support around 70% of U.S. mortgages.

• Messing with their structure poses risk to the economy, and at the very least could raise mortgage rates even further.

State of play: Last week, the Treasury Department and the Federal Housing Finance Agency, which oversees the two companies, released a roadmap for how privatization could work.

• In a sign that investors believe there's a real chance privatization could happen during Trump 2.0, stocks of government-sponsored enterprises (GSEs) jumped on the news.
• Mortgage Bankers Association chief lobbyist Bill Killmer told Axios it's highly likely that the issue will at least be examined during the new administration, following several other reports.
• Trump did not address the GSEs during the campaign or since his election. "No policy should be deemed official unless it comes directly from President Trump," Karoline Leavitt, spokeswoman for the transition, said in an email.

Reality check: This roadmap is a memo from a lame-duck administration, and the incoming Trump team could simply reverse it.

• But the idea was to put up some guardrails up so the incoming administration doesn't act too recklessly in getting rid of federal oversight, said Jim Parrott, who was a housing adviser in the Obama administration.
• He describes it as "a good governance move just to make sure that the new guys don't f--k things up too badly."

Zoom in: The roadmap lays out a process for privatization. It requires that the federal government gather public comment before making any moves and that Treasury be involved.

• But it doesn't go into the nitty-gritty details of how the process would work.

The big picture: Any such process would be pretty gnarly.

• Various policymakers and politicians have been trying to do it for years, without success. An effort during the first Trump administration fell short.

Flashback: Fannie Mae and Freddie Mac lost over $200 billion after the financial crisis hit in 2008 — vastly more than they had in cash.

• They were the epitome of "too big to fail," so the government bailed them out by lending them billions of dollars they found themselves unable to repay.
• Those debts were eventually restructured in a series of events that ended with the government owning 80% of the companies and having full rights to their profits, whether retained or paid out.
• Common shareholders are left with nothing.

Between the lines: Fannie and Freddie are now very profitable, which means they would be very valuable were they fully public companies where profits flowed to shareholders.

• However, such an action would involve Treasury giving up a valuable asset, while it's still owed an enormous amount of money.
• Its "liquidation preference" — money owed to Treasury after earnings were retained to beef up capital — is $212 billion from Fannie Mae alone.

What's next: Fannie and Freddie both exist to borrow money on the capital markets at a risk-free rate. They can do that at the moment because they are part of the government.

• As private companies, however, without a government guarantee, they would almost certainly lose their triple-A credit rating — and their debt would be considered risky for the purposes of calculating bank capital.
• Both things would make their borrowing costs rise substantially, cutting into their profits. Those higher borrowing costs would then flow through into higher mortgage rates for the general population.

Between the lines: Most housing experts, both liberals and conservatives, say the key to privatization is giving these entities an explicit guarantee of a federal backstop in case things go badly.

• In theory, a procedure called credit risk transfer can achieve this without leaving the government with a multitrillion-dollar contingent liability. In practice, that only increases the costs of GSEs even further.

The bottom line: No one has yet come up with a plan that extracts the GSEs from government control, repays Treasury what it's owed, makes sure the GSEs pose no systemic risk to the financial system, and prevents mortgage rates from rising.

• Probably because such a plan is all but impossible.

Read more: Bill Ackman gets back into activism

Filing a legal complaint is rapidly becoming the self-publishing option of choice for individuals looking to make explosive public allegations — regardless of whether they actually care about a judge finding in their favor.

Why it matters: In an era of steadily declining trust in media, the dry formalities of a legal template provide not only an imprimatur of institutional credibility, but also the freedom to go into extreme amounts of detail without seeming petty, tedious or self-indulgent.

Driving the news: Actress Blake Lively is in a war of legal filings with her co-star Justin Baldoni.

• Lively's complaint immediately changed her public reputation.
• As communications guru Lulu Cheng Meservey said on X: "What happens with the legal complaint from here? In my opinion, it doesn't even matter. She's won."
• Baldoni then filed his own lawsuit laying out his side of the story. It's framed as a defamation suit against the New York Times, but in practice fires back in the PR war with Lively. (The Times denied defaming Baldoni.)

Flashback: Similar tactics were employed by actress Sophie Turner, who fired off a legal complaint against her soon-to-be ex-husband that invoked international child abduction clauses through the Hague Convention.

• Legal filings have also been part of Drake's arsenal in his longstanding rivalry with Kendrick Lamar.
• Women have used lawsuits as a way to go public with accusations that powerful men — including Sean Combs and Leon Black — have committed sexual assault. (Both denied wrongdoing and neither were convicted of a crime, but the suits impacted both of their careers — and, in the case of Combs, helped land him in jail.)

When billionaire investor Bill Ackman wanted various Business Insider journalists and editors to be fired for publishing a story about his wife, he made public a 77-page letter from his lawyer, Elizbeth Locke.

• "The demand letter reads remarkably similarly to the pleadings of a lawsuit," Ackman noted on X. "If needed, we can convert the demand letter into a complaint and file a lawsuit."
• Ackman was clear that his end goal was to "end Business Insider's unethical and unprofessional practices" — which is not the kind of thing that can be forced by a judge in a court of law.
• Ackman demanded that then-Business Insider editor-in-chief Nicholas Carlson be fired — something that Mathias Döpfner, the CEO of BI's parent company, reportedly seriously considered.
• Carlson has since departed the company for other pursuits, taking BI founder Henry Blodget with him. John Cook, the editor of the contentious articles, also departed, for the Wall Street Journal.

Where it stands: The internet has given the power of the printing press to everyone — but for that very reason, self-published posts on X or Medium or a personal blog are often treated with a healthy degree of skepticism, and serious journalists often avoid reporting on them.

• By framing allegations in the form of a legal complaint, accusers give themselves an institutional imprimatur, much as Émile Zola did when he published "J'Accuse" on the front page of the newspaper L'Aurore.

The bottom line: Lawsuits are often used just as a way of inflicting expensive litigation on others. Now they're also being used to try to bring about outcomes no jurist can hand down in judgment.

If Donald Trump succeeds in significantly reducing the U.S. trade deficit with China, he'll do so against the force of history — and of market expectations.

Why it matters: By placing the trade deficit with China at the top of the list of things he wants to slash, Trump is facing off against trillions of dollars' worth of deeply entrenched global trade patterns.

By the numbers: The trade deficit with China — our imports minus our exports — has been larger than $200 billion since 2005. It reached a record high of $418 billion in 2018, Trump's second year in office.

The big picture: The U.S. imports an astonishing array of goods from China, and it exports very little in the other direction.

• The tariffs imposed on China during the first Trump administration, which were then kept in place by President Biden, did relatively little to change that dynamic.
• During Trump's first term, when imports fell, exports fell too, blunting the effect on the trade deficit.
• That pattern would likely be repeated if he follows through on his pledge to impose a 60% tariff on goods from China: Our exports would end up being similarly taxed in retaliation.

The bottom line: For the time being, the market seems to be reasonably sanguine when it comes to the threat of a trade war.

• Maybe that's because no such thing has happened in the lifetimes of today's traders, and maybe it's because the sheer force of money flowing between China and the U.S. seems impossible to significantly disrupt, whatever Trump might dream.

Inflation has driven the cost of goods and services upwards — but the highest inflation of all can be found in the rising price of a dream.

Why it matters: When the Mega Millions lottery was launched in May 2002, a ticket was one of America's real bargains. A mere $1 could buy days' worth of hopes and dreams of what you might do were you to become stupendously wealthy.

• As of April, however, the cost of such escapist contemplation will rise to a gulp-inducing $5.
• The next drawing, on Friday, is expected to be $1.22 billion, one of the 10 richest jackpots in U.S. lottery history.

By the numbers: Consumer prices have risen 75% since 2002 — which is to say, the $1 that a lottery ticket cost back then is worth the equivalent of $1.75 today.

• A $5 ticket therefore represents a 285% price hike in real, inflation-adjusted terms — for an item that has almost nothing in the way of supply-chain costs.

How it works: The Mega Millions revamp fiddles around a little bit with the odds of winning the jackpot, which will change from 1 in 302.6 million to either 1 in 290 million or 1 in 278.4 million, depending on which state lottery official you believe.

• Which is to say, the odds are basically staying the same, with bettors having less than a 0.000001% chance of winning.
• The idea is to make the jackpot probability so remote that even when there are millions of bettors per week, the chances are that no one will win, the jackpot will roll over, and the prize will continue to soar.
• The current configuration has had seven jackpots over $1 billion, six of them post-pandemic.

Between the lines: A $5 sticker price will put off many folks who feel like it's just too much to throw away. After all, the overwhelming likelihood is that you lose everything you bet.

• Even so, Mega Millions anticipates that jackpots will be larger and grow more quickly — which means that more money will be bet in total, often from people who can't afford it.
• One commenter on Reddit said that the move "seems like a scummy way to suck more money out of the addicted instead of pooling loose change from casuals."

The bottom line: Buying lottery tickets can be a rational thing to do — but only when the price is negligible. For most people, the Mega Millions game has now graduated out of that zone.

Editor's note: This story has been updated with the latest details about the Mega Millions drawing.

Americans under the age of 40 are richer than ever — but they still feel "an increasing sense of economic fragility," per detailed new research released by the Treasury Department this morning.

Why it matters: Disaffection and despair, especially among young men, are on the rise, and economic factors play an important role in that phenomenon.

What they're saying: Treasury Secretary Janet Yellen spoke in October about "a sense of alienation" and "very deep dysfunction in people's lives" — as evidenced by the "deaths of despair" documented by Anne Case and Angus Deaton.

The big picture: We've known for a while that average wealth for younger Americans has been hitting record highs. More importantly, median wealth has been showing the same thing.

• For Americans between 25 and 39, median wealth hit $80,500 in 2022, Treasury calculates — up from just $23,750 in 2010. And that's in 2023 dollars, after accounting for inflation.

The other side: While wealth was turbocharged by the stimulus checks and roaring bull market following the 2020 pandemic, careers were not.

• Mentorship and on-the-job learning are much harder when working remotely, while demographic changes mean that younger workers are increasingly competing with their more experienced elders for desirable jobs.
• Meanwhile costs have been rising faster than young Americans' incomes not only for education but also for child care, health care, and — most pressingly — shelter.

By the numbers: Treasury notes that 61% of men haven't graduated from college — and their earnings have been declining, in real terms, for 30 years.

• To add insult to injury, some 42% of Americans with student loans between ages 25 and 39 don't even have a bachelor's degree.
• It's not just college, either. The proportion of men between 25 and 39 with any job has been falling steadily for more than 30 years. It was almost 95% in 1990. It's now been below 90% for over a decade.

The bottom line: The report points to "expanded education, less discriminatory workplaces, cheaper goods, and more household wealth" as examples of how the lives of young Americans are improving.

• The other side of the ledger, however, seems to be dominating much of the generational psyche — as is evidenced by the enormous sums of money they say they need to be successful.

Three of the biggest investment firms in the world were sued by 11 states last week, in a case that not only could transform the way trillions of dollars is managed, but could also hobble global efforts to transition to a sustainable level of carbon emissions.

Why it matters: Texas attorney general Ken Paxton, along with 10 of his colleagues, is attempting to use the U.S. judicial system to forcibly derail the global consensus that investors can and must play an important role in the transition to a net-zero world.

The big picture: The case has been filed in the Eastern District of Texas, which in turn is overseen by the Fifth Circuit Court of Appeals — a court that has a reputation for politicized and idiosyncratic jurisprudence.

• Paxton might therefore be able to prevail despite the inherent issues with his case — especially since the conservative Supreme Court would be more ideologically inclined to let the Fifth Circuit's decision stand.
• From January, Paxton will also have the likely support of the Department of Justice and the Attorney General, whomever that might be.

Zoom in: The theory of the case is that the three investors — BlackRock, Vanguard and State Street — illegally colluded to force a group of public coal-mining companies to produce less coal.

• There's no evidence of collusion in the complaint, beyond the fact that all three of them had joined (and in some cases later left) one or both of a pair of climate-focused membership organizations, Climate Action 100+ and Net Zero Asset Managers.
• There's also no evidence that any of the asset managers pressured any companies to produce less coal, beyond the fact that those companies' coal production went down.

Zoom out: As BlackRock CEO Larry Fink has said, climate risk is investment risk. But for many Republicans, it's politically unacceptable for investors to want to be aware of — or agitate against — the degree to which the companies they own are contributing to and preparing for the climate crisis.

Fun fact: Among the remedies sought by Paxton is that the investors should divest from the carbon-heavy coal companies they own. That, ironically, is the same thing that climate activists have been demanding for years.

"The anticompetitive effects of Defendants' conduct has been pronounced and unmistakable," claims Paxton in his complaint, adding that "this dynamic is particularly clear" in the South Powder River Basin market.

Production of SPRB, a particular grade of coal mined principally in Wyoming, fell in 2020 when the pandemic hit electricity demand.

• Paxton's claim is that, the pandemic notwithstanding, public coal miners, pressured by their shareholders, reduced production even as private coal production went up.

Between the lines: What Paxton doesn't mention is that the reduction in coal production makes perfect sense given the decline in the number of coal-burning power plants. Without demand from those plants, there's no one for the miners to sell their coal to.

• In turn, the reduction in coal-fueled plants is mostly a function of the fact that natural gas is now a cheaper source of fuel than coal.

Paxton also claims that the decline in coal production ultimately affected "the price Americans pay for electricity."

• Coal-fueled plants, however, produce baseline electricity. They're not the marginal power producers that ultimately determine the market price.
• Readers can look at the chart above to judge for themselves whether it indeed shows "pronounced and unmistakable" evidence that public coal miners were cutting production while their private rivals were raising it.

The bottom line: As Aniket Shah, head of sustainability at Jefferies, says, "the future of climate and the future of energy will now be decided through the courts, not decided through legislation."

Editor's note: This story has been updated to clarify that BlackRock, Vanguard and State Street all joined either Climate Action 100+ or Net Zero Asset Managers, or both.