Futures Rebound From Session Low Amid FX Mayhem As Earning Avalanche, Govt Shutdown Loom

US equity futures are weaker but have retraced much of their overnight lows as geopolitics and USD/JPY roil markets ahead of a significant earnings week, as Mag7 earnings reports kick off this week.As of 8:15am, S&P futures are down 0.1% while Nasdaq futures are 0.2% lower; Mag 7 stocks are mostly lower in premarket trading while both Cyclicals and Defensives are weaker.  The dollar extended its selloff on Monday as speculation, first reported here, swirled that the US could coordinate intervention with Japanese authorities to support the yen.USDJPY sees another significant decline on mounting intervention risk following Friday's NY Fed rate check at the request of the BOJ. Bond yields are lower by 1-2bp as the yield curve bull steepens with JGB crash risk out of the picture for the time being. The FX moves are triggering a surge in gold and silver, which are up 2% and 6% to $5100 and $110 respectively, even as PGMs outperform gold. Ags are higher and natgas remains the story within Energy. In Eqy pre-mkt, Mag7 names are mixed, Semis are weaker, but Energy / Materials are higher with their underlying commodities. Today’s macro data focus is on Cap Goods / Durables and regional Fed activity indicators.

In premarket trading, Mag 7 stocks are mostly lower (Meta +0.4%, Microsoft +0.1%, Apple +1%, Amazon -0.2%, Alphabet -0.3%, Nvidia (NVDA) -0.7%, Tesla (TSLA) -0.6%

• USA Rare Earth (USAR) soared as much as 50% after the Trump administration invested $1.6 billion into the mining company.
• Precious metals stocks rise after gold surged past $5,000 an ounce for the first time.
• Allied Gold (AAUC) rises 4% after Zijin Gold International agreed to acquire the miner for C$44 per share.
• BlackRock TCP Capital Corp. (TCPC), a publicly traded middle-market lending fund, falls 12% as it expects to mark down the net value of its assets 19% after a string of troubled loans weighed on results.
• Mannkind (MNKD) rises 2% after the FDA approved an update to the company’s inhaled insulin, revising recommendations for the starting mealtime dosage.
• Revolution Medicines (RVMD) slides 21% after the Wall Street Journal reported that Merck ended talks to acquire the biotech firm, citing people familiar with the matter.
• Sarepta Therapeutics (SRPT) rises 6% after the firm said it will report three-year topline data from its study of its gene therapy to treat patients with Duchenne muscular dystrophy on Monday.
• SkyWater Technology (SKYT) rises 7% after IonQ Inc. agreed to buy the company in a cash-and-stock deal that values the chipmaker at about $1.8 billion.

In corporate news, SoftBank is said to have halted talks about an acquisition of US data center operator Switch, while the WSJ reported that Merck is no longer in talks to buy biotech firm Revolution Medicines after the pair failed to agree on a price. Samsung is getting close to securing certification from Nvidia for the latest version of its AI memory chip, narrowing the gap with rival SK Hynix.

Futures dropped but then rebounded, tracking moves in the Nikkei which slumped as the yen surged on signs that Tokyo and Washington coordinated on rate checks. This fueled volatility in foreign-exchange markets, as traders viewed the steps as preparation for direct intervention. Joint US-Japan action would give authorities greater power to deter speculators after the yen fell to an 18-month low earlier this month.

“The bigger signal is policy coordination,” said Daniel Baeza, senior vice president at Frontclear. “If markets interpret coordination as a willingness to tolerate easier global dollar conditions, especially alongside a dovish Fed reaction function, that could reinforce short-term dollar downside.”

Traders are also monitoring the possibility of a partial government shutdown. Senate Democrats have insisted that funding for the Department of Homeland Security be split off until Congress can agree on new guardrails for immigration enforcement, after agents killed two US citizens this year in Minnesota. Senate Republican leaders plan to reject the demands. 

“A potential shutdown would clearly represent some downside risks for the market mood as we just recover form the last one,” said BNP’s Kemper.

Besides a govt shutdown, earnings will be in the spotlight as the busiest week of the season gets underway, with four of the Magnificent Seven tech giants due to report. The group has driven market gains for much of the past three years, but that leadership faltered in late 2025 as Wall Street grew skeptical of whether massive AI spending will deliver returns. Results from Meta, Apple, Tesla and Microsoft will be dissected to see how their massive spending on AI is translating into profits. Earnings from RTX, Lockheed Martin and Northrop Grumman will likely reflect increased demand for weapons amid geopolitical tensions.

“The main focus from investors will likely be comments around AI-capex,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management. “Any sign of a slowdown could be seen as hyperscalers losing trust in the possibility to monetize those investments in a timely manner.”

Some of Wall Street’s top strategists are beginning to see early evidence that US profit growth is spreading beyond tech megacaps. An analysis by JPMorgan shows that forward guidance has topped expectations at roughly half of the S&P 500 companies that have provided an outlook for 2026. Goldman Sachs Group Inc. also expects earnings to support an expansion.  “Since most of the companies that have reported are outside the tech sector, this trend suggests a broadening of growth across other industries this year,” JPMorgan strategist Dubravko Lakos-Bujas wrote in a note.

In Europe, the Stoxx 600 is down 0.1%, opened on either side of the unchanged mark, before moving a little lower to now display a mixed/mostly negative picture. European sectors have opened mixed to slightly negative. Leading sectors are Basic Resources (+1.0%), Banks (+0.8%) and Energy (+0.6%). Basic Resources continues to be underpinned by strength in metal prices as gold and silver continue to gain strength as havens, whilst the energy sector has gained on the back of firmer crude prices. At the bottom of sectors reside, Travel & Leisure (-1.0%), Food Beverage & Tobacco (-0.9%) and Technology (-0.6%).

Asian stocks advanced amid choppy trading as gains in technology and material shares offset a slump in Japanese equities. The MSCI Asia Pacific Index rose as much as 1.1% early on Monday before halving its advance. MediaTek and Tencent provided the biggest boost. The Asian benchmark — which rose in each of the past five weeks — was also buoyed on Monday by gains in mining shares. The cohort climbed alongside metal prices as investors rotated into hard assets such as gold. Investors are awaiting earnings from some of the world’s top technology firms this week for further cues after the sector’s relentless rally. Stocks in Japan underperformed the region as exporters tumbled amid a yen rally sparked by increased speculation that authorities may intervene to support the currency’s slide. Gains in Asian stocks Monday also came amid broad weakness in the dollar as investors debated how potential US involvement in foreign-exchange intervention in Japan might worsen sentiment toward the world’s reserve currency.

In rates, treasuries hold small gains led by long-end tenors, with 20- and 30-year yields down 1bp-2bp from Friday’s closing levels as traders added to bets for 2026 interest-rate cuts after BlackRock Inc. executive Rick Rieder’s candidacy to helm the Federal Reserve gained momentum. With an announcement on the next Fed chair possible as soon as this week, rate expectations will be in focus as current Chair Jerome Powell delivers the latest decision on Wednesday. US front-end yields are little changed, leaving 2s10s and 5s30s spreads about 1bp flatter; 10-year near 4.21% is about 1bp lower vs 3bp decline for German counterpart, 5bp for French 10-year. European bonds outperform led by France following continued progress on budget plans. Dollar extends slide amid speculation the US could coordinate intervention with Japanese authorities to support the yen. This week’s Treasury coupon auctions begin a day early with 2-year notes; Treasury coupon auctions this week include 2-, 5- and 7-year notes on Monday, Tuesday and Thursday respectively, with FOMC rate decision Wednesday. WI 2-year yield near 3.59% is about 9bp cheaper than last month’s, which tailed by 0.3bp.

In FX, the yen surges on speculation of intervention, with the dollar sinking against most major currencies on deteriorating sentiment toward the greenback. However, Bank of Japan data offered no clear signal on whether the country intervened on Friday. Bloomberg Dollar Spot Index falls to lowest since September, while USDJPY dropped as low as 154 before rebounding.  

In commodities, gold rallies to a new record well above $5,100/ounce, and silver surges to around $109/ounce as investors seek out havens. Treasuries are higher and European bonds are rising. Oil prices wavering, with Brent hovering around $66/barrel.

US economic calendar includes November Chicago Fed national activity index and durable goods orders (8:30am) and January Dallas Fed manufacturing activity (10:30am)

Market snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.4%
• Russell 2000 mini -0.2%
• Stoxx Europe 600 little changed
• DAX -0.2%
• CAC 40 -0.3%
• 10-year Treasury yield -2 basis points at 4.21%
• VIX +1.1 points at 17.14
• Bloomberg Dollar Index -0.5% at 1187.53
• euro +0.3% at $1.1862
• WTI crude +0.2% at $61.17/barrel

Top Overnight News

• US President Trump said administration is reviewing everything about the Minneapolis shooting and that immigration enforcement officers will at some point leave the area, according to WSJ.
• The dollar extended its selloff and hit a four-month low on speculation the US may help Japan support the yen after a warning from PM Sanae Takaichi and comments from other top Japanese officials. BBG
• Gold stormed beyond $5,000 for the first time and silver hit a record as traders revived the debasement trade. BBG
• China launched a corruption investigation into top general Zhang Youxia. The surprising probe has implications for Taiwan, succession, and further turmoil in the Communist Party ranks, and raises questions about who Xi Jinping can trust within his inner ranks. BBG
• US power grids face unprecedented demand as a massive storm left brutal cold in its wake. More than 800,000 homes and businesses are without electricity, and around 3,500 flights have been cancelled today. US natural gas soared almost 20%. BBG
• Europe formally adopted a proposal that would ban Russian LNG imports starting in 2027, with pipeline gas imports halted by the fall of 2027. EU
• The US is in talks with crude producers and oilfield service providers about a plan to quickly revive output in Venezuela at a fraction of the estimated $100 billion cost for a complete rebuild. BBG
• Canada has “no intention” of pursuing a free trade deal with China, Prime Minister Mark Carney said, after U.S. President Donald Trump threatened to slap punitive tariffs on Ottawa. CNBC
• Senate Democrats angered by the deadly shooting in Minneapolis said they wouldn’t vote for a government funding package without major changes to its homeland security provisions, raising the possibility of a partial government shutdown this coming weekend. WSJ
• The American Academy of Pediatrics recommends children be vaccinated against 18 diseases, more than the U.S. government directs after it overhauled its schedule. The doctors group kept its guidance largely unchanged from its previous version from last year and said it doesn’t endorse the Centers for Disease Control and Prevention’s childhood-vaccine schedule. WSJ

Trade/Tariffs

• India is to reduce tariffs on cars to 40% in a trade deal with EU, according to sources cited by Reuters.
• EU and India are reportedly to explore possibilities for India's participation in European defence initiatives.

Central Banks

• BoJ accounts provided no clear signal of intervention in the JPY on Friday.
• PBoC Deputy Governor Zou affirms will continue efforts to enhance market connectivity between mainland and Hong Kong. Pledges continued backing and steady development of Hong Kong’s offshore RMB market. To coordinate with authorities to increase yearly offshore RMB government bond issuance.
• SNB has lowered the threshold factor for the remuneration of sight deposits of account holders subject to minimum reserve requirements from 16.5 to 15, as of 1st March.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued amid Japanese intervention concerns and US President Trump's latest tariff threat against Canada, in which he threatened to impose 100% tariffs if it makes a deal with China. Risk sentiment was also not helped by the Democrats threatening a partial government shutdown in revolt against the fatal shooting of an ICE protester in Minneapolis, while market conditions were somewhat quieter owing to the holiday closures in Australia and India. Nikkei 225 underperformed with the index pressured by a firmer currency amid US-Japan joint intervention concerns after Japanese PM Takaichi said the government is ready to take action against speculative moves, and with reports last Friday that the New York Fed conducted rate checks on USD/JPY. Hang Seng and Shanghai Comp were indecisive with demand contained amid reports that China is likely to target growth of 4.5% to 5% in 2026, while stocks also failed to benefit from news late last week that China told the biggest tech firms they can prep NVIDIA H200 orders.

Top Asian News

• Japanese PM Takaichi rules out combining BoJ ETF holdings, pension funds, and reserves to form a sovereign wealth fund.
• Japanese Chief Cabinet Secretary Kihara said the government will prepare a tentative budget if the FY26 Budget is unlikely to pass the Diet by the end of March.
• Japan's PM Takaichi said would like to achieve two-year suspension of 8% tax on food at the earliest date possible and submit relevant legislation in the fiscal 2026 Diet.
• China's Guangdong province targets 2026 GDP growth of 4.5%-5.0%.

European bourses (STOXX 600 -0.1%) opened on either side of the unchanged mark, before moving a little lower to now display a mixed/mostly negative picture. European sectors have opened mixed to slightly negative. Leading sectors are Basic Resources (+1.0%), Banks (+0.8%) and Energy (+0.6%). Basic Resources continues to be underpinned by strength in metal prices as gold and silver continue to gain strength as havens, whilst the energy sector has gained on the back of firmer crude prices. At the bottom of sectors reside, Travel & Leisure (-1.0%), Food Beverage & Tobacco (-0.9%) and Technology (-0.6%).

Top European News

• French Finance Ministry announces that France will hold a G-7 finance call on Tuesday.
• EU Commission to open proceedings against X's AI chatbot grok on Monday under the Digital Services Act, via Handelsblatt report, citing EU officials.

FX

• DXY gapped lower at the open from Friday's 97.456 close, with the index off its worst and best levels at the time of writing, towards the middle of a 96.949-97.333 band. The index remains suppressed by the aforementioned JPY strength, alongside risks of a US government shutdown also increasing after Democrats said they will not support a funding package without changes to homeland security provisions.
• JPY is the standout gainer, bolstered by double intervention risk after Japanese PM Takaichi warned that the government is ready to take action against speculative moves amid a weakening currency and surge in bond yields, while it was reported on Friday that the New York Fed had conducted rate checks on USD/JPY. Analysts at ING succinctly highlight two reasons for Washington's involvement: "a) the weak yen was adding to last week's JGB sell-off and indirectly driving US Treasury yields higher. If there is any financial instrument more important than the stock market to the White House right now, it is US Treasuries. And b) the strong USD/JPY was potentially unwinding the work of US tariffs on Japan and giving Japanese manufacturers a competitive advantage." USD/JPY slumped from Friday's 155.74 close to a Monday trough at 153.40, slightly under the 100 DMA (153.54).
• EUR benefits from the USD weakness but trades off best levels after hitting resistance at 1.1898 (vs 1.1837 low) shortly after the resumption of trade. Little action was seen on the sub-par German Ifo report, and with the EZ docket also light ahead.
• CHF mildly gains due to its haven status amid the looming US government shutdown, alongside President Trump's 100% tariff threat on Canada if it makes a trade deal with China. On that note, USD/CAD trades on a softer footing amidst the aforementioned USD weakness, with the pair also dipping under the psychological 1.3700 mark to a 1.3675 low at the time of writing.
• Antipodeans trade on a firmer footing with AUD underpinned as spot gold briefly topped USD 5,100/oz earlier in the session. AUD reached a high of 0.6934 from a 0.6896 close on Friday.

Fixed Income

• Fixed income benchmarks are in the green. USTs firmer by a handful of ticks, at the top-end of a 111-25 to 111-29+ band. The US session is relatively quiet, aside from 2yr supply ahead. Strength for fixed is perhaps a function of the slight equity pressure, which in turn can be explained at least in part by ongoing/renewed trade tensions relating to the US, Canada and China, after Trump's rhetoric. One other point of support might be the US conducting a rate check in the JPY on Friday, as this could be interpreted as a precursor to joint intervention; given the moves in long-end Japanese yields seen last week, and the global influence that had, any such action could target JGBs in addition to the Yen.
• Bunds are firmer, with gains of just over 20 ticks at best. Specifics for the bloc are a little light, with no move seen to German Ifo, which came in softer-than-expected for the climate figure, while the other components were mixed vs prev. For the EZ, the week is mainly waiting to see how the trade situation develops, with the EU meeting today to discuss unfreezing EU-US talks.
• Gilts outperform, gains of c. 30 ticks at a 91.56 high. Upside that is, primarily, being driven by the news that Greater Manchester Mayor Burnham will not be able to run for the vacant Labour MP seat. This blocks Burnham from launching a leadership challenge against PM Starmer, as some have speculated he might, despite Burnham himself suggesting Starmer is the best person to be PM currently. While welcomed by Gilts, the block has prompted significant backlash against PM Starmer from within the Labour Party, and as such, this narrative may return.
• Gulf Cooperation Council nations have issued c. USD 32.3bln of international bonds YTD, +25% Y/Y, Bloomberg reported.
• Japan sold JPY 299.9bln in 5yr Climate Transition Bonds b/c 3.49 (prev. 3.98), price at highest accepted yield 99.61 (prev. 99.53), highest accepted yield 1.684% (prev. 1.098%). Allotment for Bids at the Highest Accepted Yield 24.2857% (prev. 35.6363%).

Commodities

• WTI Mar'26 continues to oscillate beyond USD 61/bbl while Brent Apr'26 rotates around USD 65/bbl, seemingly unaffected by the day's rise in Nat Gas prices, despite the gradual rise in crude prices in recent sessions due to concerns of supply disruptions.
• Henry Hub futures gapped beyond USD 6/MMBtu, its highest level since the start of the Ukraine war, while the Dutch TTF future nears EUR 42/MWh, following the Arctic storm in the US that has shut around 10% of production in the US. Prices of natural gas have been rising in recent days due to poor weather across Europe, Asia and now the US, freezing oil and natural gas wells, in addition to geopolitical concerns and accompanying supply concerns.
• Precious metals continue their historic bid higher, with spot gold trading beyond USD 5,000/oz and briefly extended above USD 5,100/oz, while spot silver trades just shy of USD 110/oz.
• 3M LME Copper is currently trading in the middle of the USD 12.52k-13.41k/t band that has been forming since the start of 2026 as supply/demand dynamics support the red metal. Supply disruptions were the main driver throughout 2025 but as the worries wane, demand has continued to grow due to AI demand.
• Ukraine's military said it struck a Russian oil refinery in Krasnodar region.
• China's Shanghai Futures Exchange to adjust price limits, margin ratios for copper and aluminium futures contracts from the 28th January closing settlement.
• Kazakhstan's Energy Ministry said that production is to be relaunched for the Tengiz oil field in the near future.
• EU has given final approval to the Russian gas ban; will entirely ban Russian LNG imports by 1st January 2027, and pipeline gas by 30th September 2027.
• Kazakhstan's Tengizchevroil is reportedly gradually restarting its Tengiz production.
• OPEC+ is likely to maintain its supply pause in March, Bloomberg reported citing delegates; adds that there is no need to respond to the events in Venezuela and Iran but a significant supply disruption would warrant a boost in output.
• PBoC Deputy Governor supports the development of Hong Kong's gold market, strengthening its offshore RMB market functions.

Geopolitics: Ukraine

• Ukraine's military said it struck a Russian oil refinery in Krasnodar region.
• EU has given final approval to the Russian gas ban. Will entirely ban Russian LNG imports by 1st January 2027, and pipeline gas by 30th September 2027.
• Russian Presidential Envoy said Ukrainian President Zelensky is hindering peace by postponing the issue of land settlement, Al Arabiya reported.
• Russia's Kremlin said that constructive talks with Ukraine are underway, according to RIA.

Geopolitics: Middle East

• "Commander of Iran's Naval Forces: Armed Forces Fully Prepared to Protect the Country", Sky News Arabia reported.
• OPEC+ is likely to maintain its supply pause in March, Bloomberg reported citing delegates; adds that there is no need to respond to the events in Venezuela and Iran but a significant supply disruption would warrant a boost in output.
• Iranian Foreign Ministry Spokesperson said that Iran is stronger and more capable than ever before, and will certainly respond to any aggression with a broad and deterrent response.

Geopolitics: Other

• Chinese Commerce Ministry Official said China and the US maintained communication at various levels following the leaders' summit in South Korea. China and the US are to manage differences and promote stable trade ties.

US Event Calendar

• 8:30 am: United States Nov Chicago Fed Nat Activity Index, est. -0.2, prior -0.21
• 8:30 am: United States Nov P Durable Goods Orders, est. 3.75%, prior -2.2%
• 8:30 am: United States Nov P Durables Ex Transportation, est. 0.3%, prior 0.1%
• 10:30 am: United States Jan Dallas Fed Manf. Activity, est. -8.6, prior -10.9

DB's Jim Reid concludes the overnight wrap

With the year still not yet four weeks old, it’s already been a tour de force of news volatility, even as market volatility has remained relatively contained. We’ve moved from Venezuela to Japan, via Iran and Greenland, with a range of other themes running in the background. These now include President Trump on Saturday threatening 100% tariffs on Canada if China strikes a trade deal with them, and the odds of another US government shutdown after January 30th (Friday) jumping on Polymarket from 8% on Friday to 78% this morning. This followed Senate Democratic leader Schumer warning that they will block the spending package unless Republicans defund Homeland Security after a Border Patrol shooting at a protest in Minnesota on Saturday linked to the immigration crackdown.

If that weren’t enough to be getting on with, Rick Rieder’s odds of becoming the next Fed Chair surged from around 33% as Europe closed on Friday to over 60% at one point over the weekend, before settling at 47% this morning. The perception in markets is that he would be more market friendly than the previous front runner, Kevin Warsh, who is now trading at 29% on Polymarket. He was at 65% last Monday.

Finally in the UK, Andy Burnham was yesterday blocked by the ruling Labour Party from contesting an imminent by-election. Burnham is seen as a potential challenger to PM Starmer with lots of party support. Gilts may see some relative relief this morning as Burnham had said last September that the UK needs to "get beyond being in hock to the bond markets".  However this story is unlikely to completely go away. With all this going on it's perhaps no wonder that Gold (+8.52%) was within two-tenths of a percent of its best week since 2008, marginally behind one week in 2020. It's up another +1.7% this morning and has flown past $5000 for the first time. However the Dollar has just had its worst week for 8 months, falling against all its peers, and has continued to weaken this morning.

So there are plenty of balls in the air right now, but the one perhaps most urgently needing careful handling is Japan. On Friday afternoon in Europe, news broke that the New York Fed had conducted a “rate check” on USD/JPY on behalf of the US Treasury. 

This morning, the Japanese yen is around +1.1%, trading at 154.05 against the dollar, marking its strongest position since November. Various official have refused to confirm or deny overnight any intervention so far. 2yr JGBs are around +3bps higher with 10yr and 30yr yields -1bps and flat respectively while the Nikkei is -1.90% due to the strong Yen since Friday.

Elsewhere in Asia, the KOSPI (-0.90%) is lower with some looking at the weak KRW as a potential for intervention risk. The Korean Wong is up +1.7% this morning. Chinese equities are up a little with S&P 500 (-0.28%) and NASDAQ 100 (-0.41%) futures both lower.

The main event this week will be the Fed’s decision on Wednesday with the main focus not on the likely unchanged Fed Funds rate but on what Powell says about a variety of things in the presser (more below). The Bank of Canada meet the same day with Sweden’s Riksbank meeting on Thursday, with both also expected to be on hold. Finally, the ECB will publish its monthly consumer expectations survey on Friday. In terms of data, the US sees durable goods (today), consumer confidence (tomorrow) and PPI (Friday). In Europe preliminary January CPI for countries including German and Spain are released, alongside Q4 GDP for the main economies all on Friday. The German Ifo is out today.

Over in Asia, a likely busy week of news flow for Japan is bookended with a big data dump on Friday featuring the Tokyo CPI, consumer confidence, retail sales and industrial production. The Lower House election campaign begins tomorrow ahead of the 8 February vote. Other notable indicators due in the region include December industrial profits in China tomorrow and Q4 CPI in Australia on Wednesday (our economists expect the quarterly trimmed mean print at 0.9% QoQ / 3.3% YoY).

Rounding out with corporate earnings, an important week is ahead featuring results from four Magnificent 7 stocks – Microsoft, Meta and Tesla on Wednesday and Apple on Thursday. The four make up 16% of the S&P 500 by market cap, with the overall list of firms reporting next week totalling 32% of aggregate capitalisation. Other tech highlights include ASML, Samsung, IBM and SAP. The focus will also be on defence firms RTX, Northrop Grumman and Lockheed Martin. On Friday, big oil firms Exxon and Chevron will also report. In Europe, highlights also include LVMH, Roche and Sanofi.

Previewing Wednesday’s FOMC meeting, our economists expect the Federal Reserve to leave policy unchanged while striking a slightly firmer tone on the underlying economic backdrop. Although the usual focus would be on the policy outlook, circumstances this time mean that Chair Powell’s press conference is likely to dwell heavily on non-economic matters. Questions will inevitably surface around the recent DoJ subpoena, the situation involving Governor Cook, and the broader issue of future Fed leadership. Powell will probably lean on the themes of his recorded statement from 11 January, emphasising the importance of institutional independence and resisting political pressure — a message he is unlikely to dilute given the current environment.

On the policy statement itself, our economists expect the Fed to upgrade its description of growth from the previous “moderate pace” to something closer to a “solid pace,” consistent with Vice Chair Jefferson’s comments on 16 January. They also expect the Committee to acknowledge a somewhat steadier labour market, reflecting the more recent data flow available since the November meeting. Inflation is trickier: with core PCE still running at 2.8% year on year into November, progress has been limited, and the Committee may simply reiterate that inflation remains “somewhat elevated,” echoing Jefferson’s framing of recent developments.

Where the statement may shift most meaningfully is the second paragraph. Over the past several meetings, the Fed has justified its easing bias by pointing to rising labour market risks. Given the more balanced labour picture and the lack of discernible improvement on inflation, our economists believe the Committee may drop its explicit reference to labour market deterioration and revert to the more neutral line that it remains attentive to risks on both sides of the mandate — while stopping short of last year’s language that risks were “roughly balanced.”
Taken together, Wednesday’s decision and press conference should reinforce the idea that policy is now within the Fed’s estimated range of neutral and that the Committee is well placed to respond in either direction if incoming data justify a move. Nearly all voters are likely to endorse that message, though Governor Miran will likely dissent in favour of additional easing. 

Recapping last week, markets endured another round of whipsaw action amid lingering questions over Greenland. As a reminder, over the previous weekend Trump announced 10% tariffs on several European countries by February 1 and until the US obtained control of Greenland. That sent the STOXX 600 (-1.19%) to its worst performance in two months on Monday, while the S&P 500 (-2.06%) posted its worst day in three months when US markets returned on Tuesday. Sentiment improved on Wednesday after Trump said the US would not use force to acquire Greenland and dropped the tariff threat after agreeing to “a framework of a future deal” with NATO’s Mark Rutte. Equities recovered somewhat, but the STOXX 600 (-0.98%, -0.09% on Friday) and the S&P 500 (-0.35%, +0.03% on Friday) still ended the week lower. This was the first time since June that the S&P had seen two consecutive weekly declines.

It wasn’t all negative: a tech rebound pushed the Mag 7 +1.10% higher (+1.04% Friday). And although the VIX closed above the 20 level for the first time since November on Tuesday, it finished the week little changed at 16.09 (+0.23 bps). Meanwhile, geopolitical concerns helped gold rise to within sight of the $5,000 level, with its best week since the early months of Covid in 2020 (+8.52% to $4,987/oz). Silver also surged +14.50% to $103.19/oz (+7.22% Friday), extending its YTD gain to +44%.

Bond markets saw similarly turbulent moves. The most dramatic shifts came in JGBs, where the 30yr yield spiked +26.6bps on Tuesday to 3.84%, its biggest daily increase since 1999. The moves later moderated, with 30yr JGB yields ending the week +14.6bps higher and 10yr yields +6.7bps higher. In Europe, 10yr bunds (+7.1bps) and gilts (+11.2bps) also sold off as geopolitical volatility heightened concerns about increased European defence spending and the resulting fiscal pressure.

US Treasuries initially slumped on geopolitical noise and firm data, but ended the week little changed. The 2yr yield rose +0.7bps to 3.95% (-1.2bps Friday), while the 10yr yield edged up +0.2bps to 4.23% (-2.0bps Friday). The stronger US data included initial jobless claims falling to 200k (vs 209k expected), which pushed the 4 week moving average to a 2 year low of 201.5k, and Friday’s stronger than expected University of Michigan final consumer sentiment reading (56.4 vs 54.0 expected). Despite that, yields rallied late on Friday, supported by rising expectations that Rick Rieder would be chosen as the next Fed Chair.

The dollar index fell -1.80%, its worst week in eight months (-0.77% on Friday). By contrast, the Japanese yen — which had been drifting toward its weakest levels since 2024 — sharply rebounded on Friday (+1.74% to 155.70 against the dollar) amid renewed speculation about FX intervention. That followed a relatively uneventful BoJ decision earlier on Friday, which left rates unchanged at 0.75%, with one dissent (8–1) in favour of another 25bp hike.

Let's see what this week brings as an eventful January draws to a close!!

 

Tyler Durden Mon, 01/26/2026 - 08:53

Core Durable Goods Orders Rise For 8th Straight Month

US Durable Goods Orders soared 5.3% MoM in (admittedly very lagged due to the shutdown) preliminary November data (significantly exceeding the 4.0% MoM expected and a major rebound from October's 2.1% MoM decline), boosted by bookings for commercial aircraft and other capital equipment.

Source: Bloomberg

That big jump (the biggest in six months) pushed durable goods orders up 10.5% YoY - the 3rd biggest increase since June 2022.

Under the hood, non-defense aircraft spend soared, defense spending dipped and motor vehicle orders were flatish...

Source: Bloomberg

Meanwhile, Core Orders (ex Transportation) rose 0.5% MoM (also better than expected)...

Source: Bloomberg

This was the 8th straight month of increases, leading to a 4.4% YoY rise in orders - the best since October 2022.

The data out Monday also showed the value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, increased a larger-than-forecast 0.7%.

 

 

Tyler Durden Mon, 01/26/2026 - 08:42

Pentagon Releases New Defense Strategy: 4 Things To Know

Authored by Ryan Morgan via The Epoch Times (emphasis ours),

The Pentagon released its new National Defense Strategy late on Jan. 23, placing the homeland and a surrounding sphere of influence as the top priority for the U.S. military.

Defense Secretary Pete Hegseth speaks during the POW/MIA National Recognition Day Ceremony at the Pentagon, Friday, Sept. 19, 2025, in Washington. AP Photo/Julia Demaree Nikhinson

Nearly two months after the White House released President Donald Trump’s National Security Strategy, the new 34-page Pentagon document provides specifics regarding how the U.S. military will support the president’s strategy. In particular, it describes four specific lines of effort for military planners going forward.

“No longer will the Department be distracted by interventionism, endless wars, regime change, and nation building. Instead, we will put our people’s practical, concrete interests first,” Secretary of War Pete Hegseth wrote in a memorandum accompanying the new strategy document.

Here are the four key lines of effort outlined in the new National Defense Strategy and how they fit into Trump’s security and foreign policy framework.

1. Sphere of Influence

The Pentagon describes defending the U.S. homeland as the “foremost priority” Trump has given the military.

“The Department will therefore prioritize doing just that, including by defending America’s interests throughout the Western Hemisphere,” the document states.

As part of this first priority, the Pentagon noted U.S. military efforts to secure the United States’ borders and to combat drug trafficking throughout the Western Hemisphere.

U.S. forces began amassing near Latin America in August 2025 and carried out strikes on drug boats in the Caribbean Sea and eastern Pacific for months. They also seized sanctioned oil tankers sailing to and from Venezuela.

Those moves preceded an operation into Venezuela, during which U.S. forces apprehended the country’s wanted leader, Nicolás Maduro, to face federal charges for an alleged drug trafficking conspiracy.

President James Monroe articulated a U.S. pledge to oppose European colonial efforts in the Western Hemisphere in an address to Congress in December 1823 that later came to be known as the Monroe Doctrine.

In the weeks leading up to Maduro’s capture, the Trump administration began increasingly referring to a “Trump Corollary” to the Monroe Doctrine.

In a press conference following Maduro’s capture, Trump explicitly referenced Monroe’s 1823 doctrine and said, “Under our new national security strategy, American dominance in the Western Hemisphere will never be questioned again.”

Since ordering Maduro’s capture, Trump has also ramped up talk of a U.S. acquisition of Greenland, which is currently a semiautonomous territory of Denmark. Trump has said the island territory is key to U.S. national security.

Nicolás Maduro and his wife, Cilia Flores (rear), are escorted by federal agents after landing at a Manhattan helipad, as they make their way into an armored car en route to a federal courthouse in New York City on Jan. 5, 2026. XNY/Star Max/GC Images

The new strategy document states that the Pentagon will “provide the President with credible options to guarantee U.S. military and commercial access to key terrain from the Arctic to South America, especially Greenland, the Gulf of America, and the Panama Canal.”

The document further declared the Pentagon’s intent to support Trump’s Golden Dome missile defense initiative.

U.S. nuclear force modernization and cybersecurity are also listed under the first line of effort, as is countering Islamic terrorism.

“The Department will maintain a resource-sustainable approach to countering Islamic terrorists, focused on organizations that possess the capability and intent to strike the U.S. Homeland,” the document states.

2. China and Indo-Pacific Deterrence

As the U.S. military adjusts its global strategy, the Pentagon is charged with finding ways to deter China while seeking to avoid confrontation with the nuclear-armed power.

The Pentagon said it will follow Trump’s lead in engaging with Chinese counterparts and supporting deconfliction efforts.

The strategy document does not mention any intent to be in direct conflict with China, but it states that the responsibility of the military is “to ensure that President Trump is always able to negotiate from a position of strength in order to sustain peace in the Indo-Pacific.”

Under this priority, the U.S. military “will build, posture, and sustain a strong denial defense” along what’s known as the first island chain.

The first island chain includes mainland Japan, the Ryukyu Islands, Taiwan, the Philippines, and Borneo.

“We will also work closely with our allies and partners in the region to incentivize and enable them to do more for our collective defense, especially in ways that are relevant to an effective denial defense,” the new National Defense Strategy states.

A U.S. Air Force F-35A Lightning II conducts aerial refueling with a KC-135 Stratotanker assigned to the 909th Air Refueling Squadron during a local exercise over the Pacific Ocean on Nov. 17, 2025. Airman 1st Class Arnet Tamayo/U.S. Air Force via DVIDS

One effort to bolster regional allies involves a trilateral security partnership among Australia, the UK, and the United States, known as AUKUS. The partnership began in 2021 during President Joe Biden’s administration.

In June 2025, the Pentagon placed the AUKUS partnership under review. In October, Trump suggested the partnership might be unnecessary.

The Trump administration has since expressed support for the group, and in December 2025, Hegseth said, “We are strengthening AUKUS so that it works for America, for Australia, and for the UK.”

3. Burden-Sharing

As with the alliance-building in the Indo-Pacific, the new National Defense Strategy emphasizes a need for allies and partners across the globe.

The strategy document describes a “simultaneity problem” wherein multiple adversaries of the United States might act in concert to stretch U.S. military resources.

“Such a scenario would be less of a concern if our allies and partners had spent recent decades investing adequately in their defenses. But they did not,” the document states.

“Instead, with rare exceptions, they were too often content to allow the United States to defend them, while they cut defense spending and invested instead in things like public welfare and other domestic programs.”

The document states that the United States will push for partners in Europe, the Middle East, and the Korean Peninsula to take primary responsibility for their defenses, “with critical but limited support from U.S. forces.”

According to the strategy document, Mexico and Canada will have a role to play in the Western Hemisphere, helping prevent drug trafficking and illegal immigration into the United States.

Members of the National Guard march during the announcement of the new measures by the Mexican government to deter illegal crossings at the southern border with Guatemala, in Tuxtla Gutierrez, Mexico, on March 19, 2021. Jacob Garcia/Reuters

“Canada also has a vital role to play in helping to defend North America against other threats, including by strengthening defenses against air, missile, and undersea threats,” the document adds.

In Europe, North Atlantic Treaty Organization (NATO) members are expected to “take primary responsibility for Europe’s conventional defense.”

Trump has already championed a pledge for the NATO members to each commit 5 percent of their annual gross domestic product to defense and national security spending, up from a goal of 2 percent in 2014.

4. Arms Manufacturing

The fourth area of focus detailed in the Pentagon’s new strategy document is to bolster the United States’ arms industry.

The document states that this reindustrialization effort “is vital to ensuring that U.S. forces have the weapons, equipment, and transportation and distribution capability needed” to implement the strategy.

“It is also critical to ensuring that the United States can help arm allies and partners as they take on a greater share of the burden of our collective defense, including by leading efforts to deter or defend against other, lesser threats,” it reads.

This month, Hegseth began touring U.S. arms manufacturing facilities in what he’s dubbed the “Arsenal of Freedom” tour.

Andrew Nuss (R), head of growth and strategy for Anduril Industry's maritime division, speaks with Defense Secretary Pete Hegseth about the Dive-XL underwater autonomous vehicle program, during a tour of Anduril Industry's corporate campus in Costa Mesa, Calif., on Dec. 5, 2025. Ryan Morgan/The Epoch Times

Hegseth and Trump have taken other recent steps to reform the military’s arms acquisition process.

“We’re leaving the old failed process behind, and we’ll instead embrace a new agile and results-oriented approach,” Hegseth said in a speech to industry leaders at the National War College in Washington on Nov. 7, 2025.

In a series of social media posts on Jan. 7, Trump criticized Raytheon and other arms manufacturers for the compensation packages they are giving to corporate executives and for offering stock buybacks and paying out dividends to shareholders.

Along with working with established traditional vendors, the National Defense Strategy states that the Pentagon will also seek to bolster organic manufacturing capabilities and grow nontraditional vendors to grow the U.S. arms industry.

Tyler Durden Mon, 01/26/2026 - 08:25

The post Doing Well by Doing Good: Dump Your American Stocks appeared first on CEPR.

EU Launches New Probe Into Musk's AI Chatbot Grok

The European Commission has opened a new formal investigation into Elon Musk's X under the Digital Services Act (DSA) and expanded a separate probe launched in December 2023.

"The new investigation will assess whether the company properly assessed and mitigated risks associated with the deployment of Grok's functionalities into X in the EU," the European Commission wrote in a press release, adding, "This includes risks related to the dissemination of illegal content in the EU, such as manipulated sexually explicit images, including content that may amount to child sexual abuse material."

The Commission is examining whether X:

• Diligently assess and mitigate systemic risks, including of the dissemination of illegal content, negative effects in relation to gender-based violence, and serious negative consequences to physical and mental well-being stemming from deployments of Grok's functionalities into its platform.

• Conduct and transmit to the Commission an ad hoc risk assessment report for Grok's functionalities in the X service with a critical impact on X's risk profile prior to their deployment.

"Non-consensual sexual deepfakes of women and children are a violent, unacceptable form of degradation," EU tech commissioner Henna Virkkunen said, who was quoted by Bloomberg. This case falls under the DSA, which places strict guardrails on harmful and illegal material on the web. And it's up to Brussels to define what is illegal material...

X, a subsidiary of xAI, pointed Bloomberg to a previous statement that it actively removes illegal content where necessary: "We remain committed to making X a safe platform for everyone and continue to have zero tolerance for any forms of child sexual exploitation, non-consensual nudity, and unwanted sexual content."

The EU's Grok investigation comes shortly after a separate 120 million euro fine imposed on X under the DSA.

In that earlier case, EU regulators found that X's paid blue check system misled users, the company obstructed researchers' access to platform data, and it failed to properly establish an advertising transparency repository.

Vice President JD Vance criticized Brussels in an X post last month, saying, "The EU should be supporting free speech, not attacking American companies over garbage."

Our assessment is that the EU's move against Grok has little to do with safety. If it did, regulators would be scrutinizing every major social media platform and chatbot operating on the continent. Instead, Brussels appears unwilling to tolerate free speech or anything associated with Elon Musk.

Forcing xAI out of the EU would only confirm that the DSA functions less as a safety framework and more as a censorship weapon designed to crush free speech. If Europe chooses stagnation over freedom, the outcome here is very clear: the US becomes an even more attractive space for innovation and freedom.

We must note that the EU's Grok investigation comes shortly after Europe plans to launch its own X-like social media platform called "W," a subsidiary of Swedish climate media firm We Don't Have Time.

Tyler Durden Mon, 01/26/2026 - 07:45

Erosion Of Freedom In The EU: From Censorship To Centralized Power

Submitted by Thomas Kolbe

The European Union has increasingly fallen on the defensive in foreign policy. Domestically, the Green Deal has significantly damaged the economic foundation. Together with its main pillars Berlin and Paris, the Brussels-based EU Commission is pushing forward the systematic construction of a censorship apparatus to suppress its own failures from public debate.

The heated discussion in recent days over the censorship of unpopular platforms like Nius is far more than just a warning sign. Schleswig-Holstein’s Minister-President Daniel Günther offered a deep insight into the strategic toolbox of current politics during Markus Lanz’s ZDF show. The politician’s subsequent, at times desperate, attempts—alongside the host and state-affiliated media—to retract his openly stated censorship demands toward critical platforms and media such as Nius illustrate the seriousness of the situation: Germany is slowly but steadily sliding toward a surveillance state.

The Vulgar Side of Censorship

The debate over controlling public opinion, particularly in the digital space, also has a vulgar, unrestrained side—as Apollo News experienced a few months ago. At that time, the local branch of the Left Party openly called for, if necessary, violent action against the newsroom to drive it out of its neighborhood. The statement was phrased as: one should “kick the journalists on their keys.” This is far more than a verbal lapse by radicalized ideologues. It marks a rupture in the political culture of the Federal Republic, in which repressive elements, faced with a simmering economic crisis and growing criticism of the political course, emerge plainly and unapologetically.

We are witnessing an attempt to delegitimize what is visible: the democratic right to freedom of speech and open discourse. The very nature of new digital media—their ability to create fragmented opinion clusters—makes them dangerous for a political system increasingly focused on control. Media like Apollo News contribute to genuine public discourse and thereby evade the interpretive authority of established apparatuses, making them a threat to the censor.

A Pattern at the EU Level

On the EU level, a media-tactical pattern emerges. Representatives in Brussels and their national proponents pursue a clear goal: when externally pressured—such as in the Greenland conflict with the United States—they present themselves in public discourse as victims. Domestically, however, they adopt precisely the position they accuse U.S. President Donald Trump of: acting with elbows, showing no regard for fair negotiation.

The narrative created in this mode is largely carried by a media apparatus closely aligned with Brussels’ political lines. We have seen this in climate policy (Apollo News reported): first, the narrative of existential emergency is established, the story of a burning planet woven into public discourse over years. This is followed by the construction of a centrally planned, strictly regulated transformation economy. Criticism of this strategy has so far been marginalized through a form of soft censorship, placing critics near conspiracy theories in public media. The critic is ridiculed, publicly humiliated.

A similar pattern is evident in the EU’s treatment of countries like Hungary. Because Budapest has resisted open borders and mass migration for years, it is sanctioned in the style of a known bully: sometimes through funding cuts, sometimes via openly threatened penalties. It is always about money. The EU sanctions rather than negotiates. In essence, the EU applies Trump’s “dealmaker” strategy with precision domestically, against its own citizens.

Romania experienced similar treatment last year. During the presidential election, significant pressure was applied to the judicial apparatus to annul the unwanted election of a right-wing conservative president. The aim was not political competition over the country’s future, but institutional and legal intervention to control the outcome.

The explicit goal of EU policy is to centralize power within the Brussels Commission apparatus permanently. This can only succeed if dissenting forces—such as the strengthening right-wing opposition in Eastern Europe—are kept in check and growing criticism of the disastrous economic course of the Green Deal is systematically excluded from public debate.

The Decline of Germany

Since 2018, Germans have witnessed the gradual decline of their industry—and with it the erosion of the foundation of their prosperity. The idea of “Net Zero,” the forced restructuring of the economy toward a fully CO₂-free order, has so far led to a roughly 14% decline in industrial production in Germany, according to the Kiel Institute for the World Economy. The German Chamber of Commerce and Industry (DIHK) reports that over 400,000 industrial jobs were lost in this period.

While industrial value creation and productivity shrink, the state apparatus expands. Bureaucracy and administration boom, creating hundreds of thousands of new positions where no market value is generated. At the same time, a stagnating or shrinking GDP—exacerbated by ongoing mass migration—is spread across a growing population. The result is a large-scale poverty program, which the government prefers not to discuss openly.

The Digital Services Act as a Censorship Tool

The debate over this process increasingly shifts to digital platforms. Leading the way are Elon Musk’s company X, as well as secondary arenas like Telegram or Reddit, offering forums for exchange, research, and counter-speech—places where information circulates that Brussels or Berlin will not accept unchallenged. This is exactly where the problem lies from the policymakers’ perspective: they want to buy time, convinced of the success of their social and economic transformation strategy, while reversal would mean a loss of power.

With the Digital Services Act (DSA), a comprehensive regulatory framework has come into force EU-wide. In simple terms, it obliges large online platforms to remove, restrict, or flag content classified under EU law as illegal, hateful, or socially harmful, including disinformation. Companies must also report on these actions in detail.

In practice, the DSA forces corporations like Meta, X, or TikTok—under threat of heavy fines—to systematically act against content deemed problematic, for example on climate policy, pandemic consequences, migration, or the Ukraine war. Measures include deletions, shadowbanning, warning labels, and deep interventions in recommendation algorithms.

Critics argue that the underlying criteria are often vague, placing political speech under preventive moderation pressure—even before open societal debate can occur.

The Perfidy of the DSA

The DSA’s perfidy lies in creating deliberately vague pseudo-legal grounds under terms like hate, incitement, and disinformation. Platform operators are pushed by economic incentives into preemptive censorship. Legal clarity is not the controlling factor; economic pressure via threat of fines is.

Combined with a growing network of so-called “trusted flaggers”—NGOs and private actors reporting potentially critical content to national authorities—a more constrained public discourse emerges. Brussels’ compliance rules are thus effectively enforced without formally naming a censorship regime.

In this context, it is understandable why a politician like Daniel Günther casually offers a glimpse behind the scenes in the safe space of public broadcasting. Where one believes oneself unobserved, one speaks what elsewhere is carefully concealed: unable or unwilling to make substantive course corrections in economic, climate, or migration policy—or in dealings with Moscow—critics are removed via the censorship stick.

The deliberately provoked dispute with the United States over the future of freedom of speech in Europe, and the threats toward American tech companies, are accepted. Political costs are externalized. Ultimately, the citizen pays the price—both as taxpayer, user, and censored participant in an increasingly narrow public discourse.

* * * 

About the author: Thomas Kolbe, born in 1978 in Neuss/ Germany, is a graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

Tyler Durden Mon, 01/26/2026 - 07:20

My back-to-work morning train WFH reads:

• Meme Stocks Turn 5. Will There Ever Be Another GameStop? Five years after GameStop shareholders launched a revolt, Wall Street has adapted and may have won the war. (Barron’s)

• UK Telegraph: Trump has crossed all lines: it is time to cut off his global credit card: America has lost its credibility. The only thing that can stop the president is the bond market. (Telegraph) see also The Greenland Fiasco Shows the Stock Market Is the Ultimate Check on Trump: Economic globalization and financial markets encourage the “Trump always chickens out” (TACO) cycle. If you like peace, that’s a good thing. (Reason)

• The Wall Street Star Betting His Reputation on Robots and Flying Cars: Morgan Stanley’s former autos analyst has big ideas in his new gig covering the robot economy. (Wall Street Journal)

• 2026 will be the year Cybertruck dies: Tesla CEO Elon Musk overpromised sales of 250,000 Cybertrucks annually by 2025. The company has reached barely 8% of that target. (Fast Company)

• Used Watch Prices Post Broad Gains For First Time In Years: As Secondary Market Strengthens: Morgan Stanley And WatchCharts. (Hodinkee) see also These Are the 100 Most Important Watches in the World Right Now: Nearly 1,000 pages long and weighing in at close to 25 pounds, Taschen’s new Ultimate Collector Watches is the final boss of horological coffee table books. (GQ)

• Who Owns TikTok in the U.S. Now? Several big companies and investment firms are part of the new American TikTok. Many have ties to one another and President Trump. (New York Times)

• Apple to Revamp Siri as a Built-In iPhone, Mac Chatbot to Fend Off OpenAI: The chatbot will be embedded deeply into the iPhone, iPad and Mac operating systems and replace the current Siri interface, allowing users to summon the new service by speaking the “Siri” command or holding down the side button. The new approach will go well beyond the abilities of the current Siri, with features such as searching the web, creating content, generating images, and analyzing uploaded files, and will be integrated into all of the company’s core apps. (Bloomberg)

• New York City’s Worst Highways Can Lead Somewhere Better: The expressways that Robert Moses carved into the city helped inspire the entire American highway system. Now they can be models for community-led reform. (CityLab)

• On Greenland, Europe stood up, Trump blinked, and the E.U. learned a lesson: For some in the often fractured E.U., Trump’s retreat on the Arctic territory proves that retaliation — not conciliation — is the answer to his hardball tactics. (Washington Post) see also ‘We Are Learning to Bully Back’ How Europe got Trump to cave on Greenland. (The Atlantic)

• Trump Declared a Space Race With China. The US Is Losing If you want to put people back on the moon, don’t gut the agency in charge of getting them there. (Wired)

Be sure to check out our Masters in Business with Zach Buchwald, Chairman and Chief Executive Officer of Russell Investments. The global investment firm was founded in 1936, and today has ~$370 billion in AUM. Previously, he had a 15-year tenure at BlackRock, where he served as the head of its $2 trillion Institutional Business, leading the company’s Financial Institutions Group and helped establish its Retirement Solutions and Financial Markets Advisory platforms.

 

Over 75% of U.S. homes on the market are unaffordable to the typical household

Source: Axios

 

Sign up for our reads-only mailing list here.

 

 

The post 10 Monday AM Reads appeared first on The Big Picture.

Three Lessons From Venezuela's Economic Collapse

Authored by Matthew Mitchell via TheDailyEconomy.org,

President Trump has accepted the Nobel Peace Prize that was awarded to Venezuela’s opposition leader, María Corina Machado.

Unlike Machado, however, he does not accept the central lessons that can be gleaned from five decades of Venezuelan misrule.

There are three. 

Lesson 1: Past prosperity is no guarantee of future prosperity. 

In 1970, Venezuela was the wealthiest country in Latin America. Sitting atop the world’s largest proven oil reserve, it churned out more than 3.5 million barrels of oil a day. Using GDP per person as a metric, its citizens earned 2.7 times as much as the rest of Latin America — about the same as the average Finnish, Japanese, and Italian citizen. 

This prosperity bought Venezuelans better health, longer life, and more creature comforts — especially fancy foreign cars that poured into the country as oil poured out. And it wasn’t just the wealthy that benefited. Venezuela’s poverty rate was about a third of what it was in the rest of Latin America. 

The zenith was around 1977. Thanks to the global oil crisis of a few years earlier, crude prices had quadrupled. Amidst the boom, President Carlos Andrés Pérez made the fateful decision to nationalize the country’s oil industry, hoping to use its wealth to fund economic development and poverty relief. Instead, by combining public and private interests, the decision proved a boon for corruption, eventually turning the country into a petrostate. 

Almost immediately, incomes began to fall. By 1999, average Venezuelans were earning less than 90 percent of what they had three decades earlier. But the worst was yet to come. 

Which brings us to the second lesson. 

Lesson 2: Policy matters. 

Oil was not the only explanation for Venezuela’s 1970s prosperity. The government spent and taxed modestly. It left most industry in private hands. Inflation was low. And international trade was almost entirely free of tariffs and regulatory barriers to trade. 

In 1970, Venezuela scored a little less than 7 on the Fraser Institute’s 10-point Economic Freedom of the World index, making it the 13th most economically free country in the world, just ahead of Japan. 

But as the rest of the world liberalized in the 1980s and 1990s, Venezuela went in the opposite direction. The government ramped up transfers and subsidies and began to acquire more assets. Property rights grew less secure. Inflation reached 26 percent in 1980 and over 50 percent in 1995. By 2000, Venezuela had slipped to 116th in economic freedom. 

In 1999, as the economy faltered, a frustrated electorate turned to an outsider, Hugo Chávez. Chávez had risen to fame seven years earlier when he led an unsuccessful coup d’état against the democratically elected government (ironically led by Andrés Pérez, who had returned as president in 1989). 

Though left-of-center, he did not begin as a radical. Instead, he positioned himself as a populist reformer who could steer a “Third Way” between socialism and capitalism. But he grew more radical after a failed coup attempt against him in 2002. By 2005 he had fully embraced the socialist label, recasting his movement as “Socialism of the 21st Century.” 

It wasn’t just branding. He nearly doubled transfers and subsidies and more than doubled government investment. He tightened control over the government-owned oil company and nationalized other industries, including steel, iron, mining, cement, farming, food distribution, grocery chains, hotels, telecommunications, and banking. The government stopped respecting and protecting private property. Annual inflation bounced around from 20 to 60 per cent. At the time of his death in 2013, Venezuela’s overall economic freedom was close to 3 on the 10-point scale, making it the least economically free country in the world. 

But as the government took, nature gave. The country’s massive Orinoco Oil Belt continued to churn out about 2.5 million barrels of oil every day. As a result, GDP per person recovered. 

Many Western observers, from Senator Bernie Sanders to director Oliver Stone, saw this as a sign that socialism works. But the reality is that Venezuela’s oil-fueled boom had only managed to bring incomes back to 1970s levels. Moreover, careful econometric analyses comparing Venezuela’s performance to that of other similarly situated countries, found that Venezuela consistently under-performed. 

Chávez died in 2013, leaving the country in the hands of his Vice President, Nicolás Maduro. Maduro clung fast to Chávez’s policies, but as global oil prices plummeted, Socialism of the 21st Century began to look a lot like socialism in the 20th century: incomes collapsed, poverty exploded, and inflation became hyper (reaching over one million percent in 2018). 

Maduro responded predictably, imposing price controls that produced massive shortages of household necessities. About a quarter of the population fled the country. 

But the cost was not merely economic. Which brings us to the final lesson. 

Lesson 3: Economic and Personal Freedom are Deeply Intertwined. 

Socialism is typically imposed at the point of a gun. But notwithstanding his attempted 1992 coup, Chávez had come to power through free and mostly fair elections. This seems to have been one reason why Western observers were so taken in by the regime. Writing in her 2007 book, The Shock Doctrine, Naomi Klein claimed that Venezuelan “citizens had renewed their faith in the power of democracy to improve their lives.”   

But if she had looked closer, she would have seen the early signs of Venezuela’s anti-democratic turn. The Human Freedom Index, co-published by the Fraser Institute and the Cato Institute, builds on the Economic Freedom of the World index by adding 7 additional areas of personal freedom. As the figure below shows, the regime cracked down on personal freedoms just as it limited economic freedoms. By the time Klein wrote her book, Venezuela had already severely restricted freedom of expression, freedom of religion, freedom of association, freedom of movement, and the rule of law. 

This, unfortunately, is common. As we see in the final figure, most regimes that restrict economic freedom also tend to restrict personal freedom. It is easy to imagine why. People value their economic liberties, so regimes that seek to severely repress these liberties often cling to power by suppressing dissent. And because socialist regimes own the means of production — including media production like radio, print, and TV outlets — they have a handy tool at their disposal for suppression. 

What now? 

As the Cato Institute’s Marcos Falcone recently explained, one Venezuelan who seems to have internalized these lessons is María Corina Machado. As a decades-long leader of the opposition, she has consistently championed both personal and economic liberty. She traces much of the country’s corruption, mismanagement, and stagnation to its 1976 nationalization of the oil industry. 

And she is wildly popular. In the unified opposition primary of 2024, she ran on a platform of complete oil privatization and won 90 percent of the vote. Maduro refused to let her run in the general election, so she backed Edmundo González Urrutia and he is estimated to have won 70 percent of the vote. But Maduro refused to recognize the result and clung to power. 

Now, apparently, President Trump is in charge. But like Maduro before him, Trump refuses to recognize the results of the last election. He claims that Machado lacks the “respect” and “support” to lead. Polls, meanwhile, indicate that she is favored by more than 70 percent of the country. While accepting her re-gifted Nobel Prize, Mr. Trump has decided to give the reins to Maduro’s Vice President, the socialist Delcy Rodriguez, calling her a “terrific person” and predicting a great Venezuelan renaissance. 

As for privatization, Trump instead says “we’re going to keep the oil.” He claims that Rodriquez will be “turning over” up to 50 million barrels to the US, the proceeds of which will be “controlled by me, as President of the United States of America.” 

Meanwhile, he is strong-arming US oil companies to invest in the country, telling them that if they want to recover their property that was seized by President Andrés Pérez in 1976, they’d better cooperate in rebuilding Venezuela’s infrastructure. For their part, the companies have been reluctant to do so, citing the country’s poor track record of protecting private property. 

Like Andrés Pérez, Chávez, and Maduro, Trump seems to imagine that the right central plan will unlock the country’s vast oil wealth. But history teaches a different lesson.

Tyler Durden Mon, 01/26/2026 - 06:30

Global Energy Transition Threatened By Critical Transformer Shortages

By Haley Zaremba of Oilprice.com

The global clean energy transition has passed a tipping point as renewable energies have simply become too cheap to fail. Worldwide, nations both rich and poor are rushing to install more and more wind and solar capacity to keep up with rising energy demand rates driven by global economic development and the age of AI. But while countries have been investing heavily into increased production capacity, investments in critical grid infrastructure have not kept pace, leading to a major energy transition bottleneck and a potential threat to energy security for an increasing number of countries.

The United States and Europe are both facing critical transformer shortages and aging and inadequate grid infrastructure, and the threat that this shortage poses to energy security is already being felt through historic blackouts such as last year’s cascading grid failure in Spain and Portugal. While these setbacks have raised the profile of infrastructure investing in European policy spheres, “ambition is not yet being matched by action from governments, policy-makers, investors and businesses,” according to a recent report from the World Economic Forum. 

In the United States, specialists foresee a yearslong transformer crunch, with little to no relief forthcoming. While companies have rushed to ramp up production of power transformers and distribution transformers, keeping up with skyrocketing demand is an impossibly tall order. Wood Mackenzie estimates that, since 2019, U.S. demand for power transformers has jumped by 116 percent, while demand for distribution transformers has shot up 41 percent. 

"This surging transformer demand has created a significant supply deficit, with domestic manufacturing capacity unable to keep pace," Wood Mackenzie Senior Analyst Ben Boucher. "Utilities are routinely turning to the import market to meet project timelines. In 2025, imports will account for an estimated 80% of US power transformer supply and 50% of the distribution transformer supply. This market imbalance is escalating costs and lead times and is delaying our ability to bring generating plants online in pace with the surging energy demand."

However, some experts disagree with this takeaway, arguing that the transformer “shortage” is overblown if not fabricated, and the issue lies in self-inflicted procurement problems. There’s room for debate because the issue is a complex one stretching over many different economic sectors and supply chains. Whether the problem is one of supply or one of procurement, however, the impact is the same – major bottlenecks for new electricity with potential pitfalls for national energy security. 

“Over the past few years, what started as a squeeze has gradually morphed into a crisis,” Power Magazine recently reported. The Power article contends that this growing crisis has been “furnished by years of underinvestment in domestic manufacturing, a sudden surge in post-pandemic construction and electrification, and volatility in grain-oriented electrical steel (GOES) and copper markets, which steadily pushed lead times for large power and generator step-up (GSU) transformers beyond historical norms.”

And those driving factors are showing little signs of changing, indicating that delay times for transformer delivery are going to continue to stretch on. Even though demand for these products is now growing exponentially, this spike is coming in the wake of years of lackluster demand, and would-be investors are still warming up to the idea that they’ll get a return on their investment in the sector. 

Hitachi, one major producer of such transformers, for example, has strategically only invested in transformer development when the purchase of those components is already guaranteed and buyer-backed.  “Nobody wants to overinvest” in new production facilities, according to Hitachi Energy CEO Andreas Schierenbeck.

Through these kinds of up-front deals, Hitachi has planned $1 billion in new manufacturing capacity across the United States. However, Schierenbeck told news outlet Semafor this week that these deals are “probably not enough to close the gap between supply and demand… There are still customers who are just in the old world with transactional behavior, and they’ll have to be lucky to get a slot.”

Tyler Durden Mon, 01/26/2026 - 06:30

Ethereum Prepares For Quantum Era With New Security Team And Funding

Authored by Amin Haqshanas via CoinTelegraph.com,

The Ethereum Foundation has made post-quantum security a central focus of the network’s long-term roadmap, announcing the formation of a dedicated Post Quantum (PQ) team.

The new team will be led by Thomas Coratger, a cryptographic engineer at the Ethereum Foundation, with support from Emile, a cryptographer closely associated with leanVM, according to crypto researcher Justin Drake.

“After years of quiet R&D, EF management has officially declared PQ security a top strategic priority,” Drake said in a Saturday post on X. “It's now 2026, timelines are accelerating. Time to go full PQ.”

The researcher described leanVM, a specialized, minimalist zero-knowledge proof virtual machine (zkVM), as a potential building block of Ethereum’s post-quantum strategy.

EF backs post-quantum push with developer sessions, funding

Drake outlined several near-term steps aimed at preparing the ecosystem. A biweekly developer session focused on post-quantum transactions is set to begin next month, led by Ethereum researcher Antonio Sanso. The sessions will concentrate on user-facing protections, including protocol-level cryptographic tools, account abstraction pathways and longer-term work on aggregating transaction signatures using leanVM.

The Ethereum Foundation is also backing its push with new funding. Drake announced a $1 million Poseidon Prize to strengthen the Poseidon hash function, alongside another $1 million initiative known as the Proximity Prize, both aimed at advancing post-quantum cryptography.

Ethereum prepares for quantum era. Source: Justin Drake

On the engineering front, Drake said multi-client post-quantum consensus development networks are already live, with multiple teams participating and coordinating through weekly interoperability calls.

Furthermore, the foundation will host a dedicated post-quantum event in October, followed by a post-quantum day in late March ahead of EthCC. Educational efforts, including video content and materials aimed at enterprises, are also underway.

Coinbase forms board to assess quantum risks

The announcement comes amid growing sensitivity in crypto markets to quantum risk. On Wednesday, Coinbase revealed that it has established an independent advisory board to evaluate how advances in quantum computing could impact the cryptography securing major blockchain networks, including Bitcoin and Ethereum.

The board brings together experts from academia and industry in quantum computing, cryptography, and blockchain security, and will publish public research and guidance for developers, organizations, and users. Its first position paper is expected in early 2027.

Tyler Durden Mon, 01/26/2026 - 03:30

JD Vance Notes Something Very Important About Minneapolis Chaos

Authored by 'sundance' via The Last Refuge,

Last week CPB commander Greg Bovino was asked what makes Minneapolis different from other cities where ICE enforcement operations have taken place. Bovino noted in the Minneapolis region there is no separation between the extremists on the ground and the people in local government.

Today, Vice President JD Vance concurs and expands on that sentiment:

[Source]

What Vice-President Vance says here is very important. 

The regional government is a stakeholder in maintaining the chaos on the streets. 

Why? 

Because for two decades a cancer of rampant financial fraud has been permitted to spread throughout the Minneapolis region and has now reached the stage of visible metastasis.

Shortly after the George Floyd shooting, some of us started looking into a background issue where it seemed like local police and Floyd had a knowledgeable relationship with each other prior to the encounter on the street.  The initial contact between Floyd and police was about Floyd passing off a counterfeit $20 bill to a business that was not part of the approved money laundering operation.

When you follow that trail, you end up in a really weird place where it seemed like millions of counterfeit dollars were entering the country through Mexico, going by rail into the U.S. mainland and then transitioning through the Minneapolis region. I stopped researching it {SEE HERE} when I discovered that Floyd and police officer Chauvin were friends, and worked together at one of the laundry businesses; a nightclub.

ICYMI: CBP officers discovered $900,000 in counterfeit US currency in a commercial rail shipment in International Falls, MN. The counterfeit currency was seized and will be turned over to @SecretService. Details: https://t.co/2xX7nd34Xx pic.twitter.com/eCi8WjN1so

— CBP (@CBP) January 28, 2020

The corrupt activity in the Minneapolis area has been going on for around two decades.  There are two basic components, local financial fraud and govt financial fraud. 

• The local fraud represented millions and involved counterfeit goods/money and laundering operations. 

• The government assisted financial fraud represents billions and involves abuses of federal tax monies.

After 20 years of this activity almost all elements of the economic and social structure are now compromised.  As we have seen in the last several weeks, the HHS/CMS fraud is extensive and that illegal activity is impossible to exist without the knowledge, aid and assistance of the regional and municipal government officials.

Fraudulent day cares, fraudulent healthcare services, fraudulent transport companies, fraudulent “Health Outreach Workers” and various governmental offices all involved in bilking taxpayers for billions upon billions.  At the same time there is a massive money laundering operation in the underground economy.

After two decades of this unchecked corruption, there’s no way to guess how much of the regional economic activity is actually dependent on the financial fraud.  My best estimate is that over fifty percent of all economic activity -in the entire region- is based on fraud.

The Immigration and Customs Enforcement actions are the surface level issue for the regional and state government.  However, it is the widespread financial fraud that turns the activity of the leftist agitators on the street into a useful tool for the regional officials to manipulate in order to hide the true financial fraud that surrounds the area.

The “local authorities” are working with the “far left agitators” because the Minneapolis region is a network of codependent fraud.

The police are compromised. The judges and courts are compromised. The local municipal officials are compromised. The mayor’s office is compromised, and the corruption issue spreads out to the state level when Governor Tim Walz previously shut down audits of the financial crimes and then state officials ignored whistleblowers.

All of the private and public institutions -within the system of regional and state government- are connected to a statewide network of financial fraud, from counterfeit money laundering to exploitation of federal government benefits; it is all connected to the same network of fraud.

It was the ease and ability to conduct fraud that attracted the Somali migrants and the criminal aliens.  These people came for the money. ICE coming to arrest the aliens has put a spotlight on the reason why they aggregated in the Minneapolis region.

How this can be corrected is anyone’s guess.

Follow the money trail and you will discover this real reason for the state and local officials to support the anarchy in the streets.  They all want the federal government to leave.

Arrest Records Here...

Tyler Durden Sun, 01/25/2026 - 22:10

Centrus To Invest $560 Million for High-Rate Manufacturing Plan

Centrus Energy, which has long been one of our favorite stocks throughout 2025 and into 2026, is redirecting over 60% of the $900 million Department of Energy (DOE) funding award back into the economy to secure the US domestic nuclear fuel chain.

Centrus will invest $560 million into their Oak Ridge, Tennessee, centrifuge production facility to convert it to a high-rate manufacturing plant with the goal of quickly addressing the lack of domestic enrichment and get new centrifuge cascades online before 2029. The investment is expected to create over 400 jobs in Oak Ridge, and is likely only the first of many announcements.

Centrus centrifuges

Centrus has long differentiated itself from its competition in the uranium enrichment business by highlighting their all-American supply chain and production facility, which also enables them to produce the high-demand unobligated enriched uranium. This is often compared to the commercial-scale competition from Urenco, which has been operating for years out of New Mexico. Urenco uses European centrifuge technology developed by a consortium of the UK and Dutch governments, along with German utility companies.

The US still remains incapable of supporting even its current domestic commercial nuclear fleet, requiring imports of over 99% of raw uranium ore (U3O8) and about 75% of enrichment services.

Relying heavily on countries like Canada and Kazakhstan for U3O8, and a combination of Russia and Europe for enrichment services, this has led to the current table-pounding by Secretary Wright and President Trump to reinvigorate the nuclear fuel chain at every stage. The recent $2.7 billion enrichment award from the DOE is a major part of this effort.

As also noted by Goldman Sachs, the tightening of supply from Russia for U3O8 and conversion/enrichment services has sent prices almost straight up over the past few years since the start of the Ukraine-Russia war. 

The other two awardees of the recent enrichment contract, General Matter and Orano, have yet to provide explicit details as to where the $900 million will be spent.

Like USAR, which we learned had received a massive $1+ billion investment from the US government, Centrus (ticker LEU) is one of the most shorted names in the market, with 25% of its float shorted...

... and we expect to see a major squeeze when it opens for trading tomorrow, especially since it is one of the most popular retail-held stocks according to JPMorgan; in fact just on Friday we listed it as one of the 20 most likely stocks according to JPM to rip in a major short squeeze.

Tyler Durden Sun, 01/25/2026 - 21:35

From Vibrancy To Vacancy: America's Going, Going Gone!

Authored by Jim Quinn via The Burning Platform blog,

I hate shopping. I hate crowds. I hate malls. I don’t believe I had entered a mall in over a decade, until Monday. My visit to the once vibrant Montgomery Mall in Montgomeryville, PA was a shocking confirmation of what I had been predicting about retail stores since 2008.

Next to the term Dead Mall in the dictionary should be a picture of the current version of the Montgomery Mall. If you need visual proof, here is brief video showing how it is deader than ever.

We didn’t go to the mall to shop. My wife bought me a watch from Macy’s (online purchase) for Christmas. I haven’t worn a watch in over a decade and now that I’m retired, have no need for a watch. So we were going to get a refund and then walk around the mall for some exercise, because the weather outside is bitterly cold. The Mall had three anchor stores: Macy’s, JC Penney, and Sears. The Sears closed in 2020. JC Penney declared Chapter 11 bankruptcy in 2021, but still operates as a zombie like entity on the opposite end of the mall from Macy’s. Macy’s hasn’t declared bankruptcy yet, but their business plan appears to be closing 50 to 100 stores per year, until there are none left.

We arrived at the Macy’s at about 11:00 am on MLK day. Ghost town USA. The few employees we saw outnumbered the customers. A store filled with jewelry, clothes, shoes, and other useless crap had no customers.

It took us ten minutes to find someone who could process a return.

Both Macy’s and JC Penney are clearly in an extend and pretend phase. The entire pitiful mall is pretending to be viable, when it is clearly deceased. What a far cry from its heyday – 1977 until approximately 2007. With three rambunctious boys, my wife spent many days at this mall trying to wear them out. When they were teenagers, I would drop them off on Friday nights so they could cruise around the mall with their friends. Those days are long gone.

The two story Montgomery Mall, with 1.1 million square feet of retail space, was built in 1977 by Kravco. Before smart phones, social media and online ordering, malls were the place to go for shopping mothers and teenagers escaping from their parents clutches. Malls were swarming with people, because they were convenient and accessible. They were the mecca of consumerism, enabled by the all powerful credit card. I have lived in Montgomery County since 1990, with three malls encircling me: The Plymouth Meeting Mall, where my employer’s first store in the U.S. (IKEA) and their headquarters were located; The Montgomery Mall; and the king of all malls in King of Prussia.

At its peak, the Montgomery Mall had over 90 stores/eateries. Major tenants, excluding their anchors, included: H&M, Disney Store, Uniqlo, Boscovs, Tweeter, Dick’s Sporting Goods, Strawbridge’s, and dozens of the usual smaller mall outlets. The bustling food court consisting of Chick-fil-a, McDonalds, Sbarro, Subway, and a Chinese place met all the healthy eating requirements. Yesterday, the number of occupied outlets totaled less than 15. It was a pitiful mixture of dynamite retail juggernauts like Cell Phone Care, Dilshal Halal Cuisine, Montgomery Dental, a pop-up Spirit Halloween store, and a mixture of wireless and jewelry repair stores. I think a store selling Vacancy signs would best suit this nearly dead mall.

The death of this now obsolete mecca of consumerism can be blamed on clueless corporate executives, devious developers, feckless bankers, and technology. The beginning of the downfall can be traced to the acquisition of the mall by Simon Property Group in 2003. These corporate raiders use the legal system to organize their holdings in such a way that they can take on massive leverage, pillage the asset, not repay the debt, and walk away virtually unscathed, like they did in 2021 when the mall was foreclosed upon with a $119 judgment against Simon. Simon Property Group is still a thriving entity, with their stock near an all-time high of $184 per share, because they gate off each of their mall entities so they can go bankrupt and not affect the parent company. Ain’t America great?

The bank sold the stinking, rotting carcass of this beached 1.1 million square foot retail whale to Kohan Retail Investment Group for $55 million in 2021. When you buy a mall for $50 per square foot and still can’t make a profit, you got yourself a dead mall. Kohan has been referred to as “the last owner a mall sees”, investing little in the malls it purchases and allowing mall facilities to deteriorate while trying to sell off out parcels to restaurants and grocery stores. Dead and deteriorating is the correct description of the Montgomery Mall. As we walked around this dank, depressing hulk of cement and glass, my “glass half full” wife suggested they only needed to get a few good tenants to start reviving the mall. I reacted like the clown in Seinfeld when George couldn’t believe he had never heard of Bozo. Malls are either dead or dying. There is no coming back.

I guess I should feel vindicated as I had written dozens of articles about the downfall of retailers and malls since I began writing in 2008, including: Ghost Malls: Coming to Your Town (2008), Extend and Pretend Coming to an End (2012), Available (2013),  Retail Death Rattle Grows Louder (2014), Will Sears Survive Until Christmas (2016). The Covid scamdemic put the final nail in the coffin of the Montgomery Mall, and the rise of Amazon and all online retailing put the coffin in the ground.

By purposely killing malls, they forced more retail online, with only electronic payment as an option. Wait until they institute their CBDCs and then can control your ability to purchase based upon your social credit score. Just observe what is happening in Davos to see your dystopian future. AI will tell you what to buy. Hell, it will buy it for you without asking whether you wanted it at all. No need to think, freedom to choose, or ability to say no.

I see the death of the Montgomery Mall and hundreds of other malls across this land of plenty (of debt) as a metaphor for the imminent death of this American Empire of Debt. The bigger things get, the worse they get. With or without physical malls, credit card debt has risen from $600 billion in 2000 to almost $1.3 trillion today. Meanwhile, the national debt grew from $5.6 trillion in 2000 to $38.5 trillion today. The average American goes deeper into debt each day, as the American empire adds $5 billion of debt each day.

Our cities and infrastructure deteriorate and decay (just like these dead malls), while financial wizards think up new ways to rape and pillage what remains of the national treasury. It’s all a Potemkin facade, propped up by never ending issuance of debt, ceaseless propaganda, increasing surveillance state authoritarianism, and no way out. Mall owners (with their bank partners) have been extending and pretending for over two decades. Our country has been doing the same since 2008. But, eventually the jig is up. The current faux foreign conflicts are designed by the powers that be to distract from the intractable domestic financial disaster coming down the track.

When Dick’s closed up shop in the Montgomery Mall last year, they replaced themselves with a perfectly named outlet which describes the mall and our country.

Tyler Durden Sun, 01/25/2026 - 21:00

President Trump To Skip Super Bowl, Slams Halftime Show With Bad Bunny, Green Day

Trump made history last year as the first sitting president to attend a Super Bowl when he showed up at the game in New Orleans, but on Saturday, he announced he won’t be attending this year. 

Speaking from the Oval Office, Trump blasted the NFL for choosing Bad Bunny and Green Day as halftime performers. Trump told the New York Post that the halftime act represents "a terrible choice" that only serves to "sow hatred." He confirmed his absence from the game at Levi's Stadium in Santa Clara, California, though he insisted the artists are not the reason. "It's just too far away," Trump said, adding that he would attend "if it was a little bit shorter." 

The president made his feelings about the performers clear. “I’m anti-them. I think it’s a terrible choice. All it does is sow hatred. Terrible,” Trump declared. 

Trump blasted the NFL back in October when Bad Bunny was selected to headline the halftime show.

"The NFL just chose the Bad Bunny rabbit or whatever his name is," Greg Kelly of NewsmaxTV told him. "This guy, who hates ICE, he doesn’t like you, he accuses everything he doesn’t like of racism."

Kelly added, "This guy does not seem like a unifying entertainer, and a lot of folks don’t even know who he is."

"I've never heard of him," Trump said. "I don't know who he is."

He nevertheless criticized the selection. "I don't know why they're doing it. It's crazy. And then they blame it on some promoter they hired to pick up entertainment— I think it's absolutely ridiculous.”

According to Entertainment Weekly, Bad Bunny was “the most streamed artist on Spotify in 2025, but he said he avoided bringing his Debi Tirar Mas Fotos World Tour to the continental United States due to concerns that ICE would target his concerts.”

"There were many reasons why I didn't show up in the U.S., and none of them were out of hate — I've performed there many times," the musician said last year "All of [the shows] have been successful. All of them have been magnificent. I've enjoyed connecting with Latinos who have been living in the U.S. But there was the issue of, like, f---ing ICE could be outside [my concert]. And it's something that we were talking about and very concerned about."

Last year, a Cygnal poll showed support for Trump’s deportation of illegal immigrants surged with Hispanic voters.

“Among Hispanic voters, 50 percent supported deportations and 48 percent opposed,” Newsweek reported in July. “There was a seven percent increase in overall support since May among this demographic, with an 11 percent rise among those who said they ‘strongly support’ the policy.”

Department of Homeland Security Secretary Kristi Noem announced last year that ICE would blanket the Super Bowl. "We're going to be all over that place," Noem told Benny Johnson in October, declaring that only "law-abiding Americans who cherish this country" should attend. She added that agents would "enforce the law.” 

Green Day has made attacking Donald Trump a recurring feature of its performances for nearly a decade. Frontman Billie Joe Armstrong has altered lyrics in “American Idiot” to target “MAGA,” displayed a Trump mask labeled “IDIOT” at a 2024 Washington, D.C., concert, and led anti-Trump chants during televised award shows. Armstrong has also compared Trump to Adolf Hitler in interviews. 

Turning Point USA, the conservative group founded by Charlie Kirk, who was shot and killed in September 2025 during an event at Utah Valley University in September, announced it would stage an alternative "All-American Halftime Show" to counter Bad Bunny's performance. Spokesperson Andrew Kolvet said in October that the counter-show would be "a real production" held in an arena.

The organization has not revealed any performers or details about its halftime show, despite the game taking place in less than three weeks. Public relations manager Aubrey Laitsch told TMZ in January that the show is confirmed, but fans must tune in during the Super Bowl to learn the lineup.  

Tyler Durden Sun, 01/25/2026 - 20:25

Supreme Court Orders CA Dems To Justify 'Prop 50' Maps

Authored by Susan Crabtree via RealClearPolitics,

The Supreme Court on Thursday gave California Democrats a week to respond to the California Republican Party’s request to block the new Democrat-drawn congressional district maps from being used in November.

The request for a response, issued by Justice Elena Kagan, who is handling the emergency-injunction request for the court, surprised many court watchers.

Given that the justices allowed Texas Republicans’ gerrymandered map to stand, most thought the Supreme Court would allow the Los Angeles district court’s ruling earlier this month, validating California’s new map to stand as well. California Republicans, however, argue that the new maps violate the Voting Rights Act because at least one of the districts was written to favor Latino voters.

The California Republican Party, joined by the Justice Department, Tuesday filed an emergency application at the Supreme Court in hopes of blocking the state from using the newly approved district maps, which target four to six Republican members of Congress, in the 2026 elections.

The request for a response is just that, however. The Supreme Court could still decline to take up the case. The high court is already deliberating over a voting rights case in Louisiana, the decision in which could impact its decision on the California map. In October, arguments concluded in a landmark voting rights case, Louisiana v. Callais, that will determine whether Louisiana’s 2024 congressional map, which includes a second majority black district, is an unconstitutional racial gerrymander. A high court decision is expected any day.

On Thursday, Mark Meuser, the election law attorney with the Dhillon Law Group who filed the challenge to the maps on behalf of the California Republican Party, celebrated Kagan’s order for California Democrats to respond by 4 p.m. Jan. 29.

“Supreme Court just ordered California to respond to our Emergency Application for an Injunction,” Meuser said in an X.com post. “California must respond by Jan. 29.”

In his brief supporting California Republicans, Solicitor General John Sauer underscored their argument, writing that “California’s recent redistricting is tainted by an unconstitutional racial gerrymander.”

The Supreme Court has allowed gerrymandering, and in the Texas case, approved mid-decade redistricting undertaken specifically to win more seats for Republicans purely for partisan gain. It has not, however, looked favorably on redistricting efforts undertaken to consolidate racial minorities’ power.

“But unlike Texas’s map, the [California] map suffers from a fatal constitutional flaw: one of the districts (District 13) was clearly drawn ‘on the basis of race,’” Sauer wrote in his amicus brief.

The California GOP asked the Supreme Court to rule on its injunction request by Feb. 9, when congressional candidate filing in California begins. The party also asked the justices to schedule oral arguments in the underlying case.

The Supreme Court approved Texas’s map, drawn with an eye toward winning Republicans five more seats in the Lone Star state, last month. California Democrats, led by California Gov. Newsom, aim to offset that with a map that could net Democrats five additional seats.

The national Democratic Congressional Campaign Committee and House Minority Leader Hakeem Jeffries’ political action committees then paid consultant Paul Mitchell to redraw the state’s 52 congressional districts. Newsom, arguing that Democrats must fight President Trump’s efforts to rewrite congressional maps in Republicans’ favor, then called a special election last November, asking voters to approve it.

Proposition 50, as the ballot initiative was called, overwhelmingly passed with 64% of the vote.

Newsom on Thursday didn’t address Kagan’s move but commented on the larger issue in a tweet posted Thursday.

“Donald Trump called up [Texas Gov.] Greg Abbott and demanded more MAGA seats in Congress,” Newsom posted on X.com from Davos, Switzerland. “He thought we’d be good little Democrats and respond with an op-ed. Not this time, buddy.”

“I’m not naïve. These guys are going to try to take me down – not just my state,” Newsom added during an interview at the glitzy international economic gathering of world leaders.

A three-judge panel from the U.S. District Court for the Central District of California rejected Republicans’ racial claims in their Jan. 14 order denying the state GOP’s petition.

“Challengers now seek to enjoin California’s use of the Proposition 50 Map, arguing that the predominant reason for its adoption was not politics but rather unconstitutional and unlawful racial gerrymandering,” the judges wrote.

“We have reviewed briefing from all parties, held a 3-day evidentiary hearing with 9 witnesses (including 6 experts), and reviewed a record that includes over 500 exhibits totaling thousands of pages … We find that [the] challengers have failed to show that racial gerrymandering occurred, and we conclude that there is no basis for issuing a preliminary injunction.”

Tyler Durden Sun, 01/25/2026 - 19:50

Maybe Truflation Is On To Something

By Peter Tchir of Academy Securities

The Fed

On the betting apps, it looks like Rick Rieder has become the odds on favorite to win. I like the idea of mixing things up at the Fed and think that having a market practitioner in charge would be an interesting change. If he gets the nomination, expect more of a focus across the yield curve (our view all along of how the Fed will operate in 2026). The balance sheet is less likely to be used as a blunt, lumbering tool (prescribed amounts for well-telegraphed time periods), but rather something to shape the curve to fit policy more frequently.

The Fed – Coordination Should Be Encouraged, Not Feared

I think coordination and cooperation between the Fed, Treasury, and the admin is good. It doesn’t defeat “independence” and has happened in the past – typically, in times of stress, with COVID being the most recent example. I continue to believe the announcement that the Fed would buy fixed income ETFs changed the trajectory of the corporate bond market overnight. For those of you following the T-Report, you know I strongly believe in the ETF Spiral™, where ETFs trading at a discount to NAV help create more selling pressure. It might seem counterintuitive, but that is a hill I will stand on and fight to the end (and have a few times). At the time, even VCSH (a short-dated corporate bond ETF) was trading at a large discount to NAV (more than 3% if I remember correctly). That ETF Spiral™ was adding to the problems at the front-end of the corporate bond market. When the announcement came that the Fed would buy these ETFs, the problem corrected itself quite literally overnight, and the corporate bond market began to heal, rapidly.

I bring this up because:

• The Federal Reserve did not have the mandate to buy corporate bond ETFs. They just didn’t.
• The Federal Reserve did not have the “plumbing,” in any case, to buy ETFs. They weren’t set up to do it at all.

But…

• The Treasury could take that risk, but didn’t have the funds to buy a lot.
• The solution was a “CLO” type of structure, where Treasury provided the “equity” capital. They would take the losses. The Fed could leverage that money, something within their repertoire.
• Voila – the ability to buy corporate bond ETFs was created through a clever interaction of the Treasury and the Fed, both using tools in their toolkit. (I am sure I have overly simplified this, but the gist of the story remains the same).
  • They still didn’t have the “plumbing” and I think it took a month before any corporate bond ETFs were purchased, but that didn’t matter, as the problem resolved itself overnight. That shows the power of the balance sheet on markets (which we witnessed recently again, when the agencies announced greater purchases of mortgage-backed bonds and spreads collapsed even before the first additional bond was purchased).

The morals of the story are:

• Coordination should be welcomed and does not eliminate the independence of the Fed.
• The balance sheet is an incredibly powerful tool, and taking a new approach to its usage, could unlock some interesting new ways to shape the curve.

The Fed Won’t Cut, But They Should

The bond market is pricing in a 0.03% chance of a cut in January (which is also, sadly, the realistic probability of the Bills ever winning a Super Bowl). So, we will not get a cut this week. We are also unlikely to see a cut slated for the meeting in March.

I think the case that the “Neutral Rate” is lower than where the Fed seems to think it is, is a strong one. Miran surprised me with that argument, but I actually like it and agree.

January jobs could be strong. We continue to believe the data overstates jobs in Jan/Feb and understates jobs in the summer, as the seasonal adjustments no longer reflect seasonal reality. Construction has shifted from Northeast-centric to Southern-centric. The “gig” economy has shifted how “seasonal” workers are hired, which along with the earlier start of shopping (especially on-line, where “Black Friday” sales start before Thanksgiving) means the BLS adds too many jobs back in January. In any case, I will admit, I expect a strong jobs report for January, but it will be “adjustment” driven more than reality driven, and my case for cutting depends on other arguments.

The ”crowd-sourced” data doesn’t paint a pretty picture.

The QUITS rate in the JOLTS data remains weak. It has improved a smidge and has been affected by the government shutdown (in terms of preparation of the data), but is still below the average of the past decade. This just tells me that people with the sorts of jobs that can say “take this job and shove it” aren’t saying that. They are keeping their head down and keeping their job because they know how difficult it is to find another job.

While I think the jobs data warrants attention and gives the Fed the ammunition they need to at least look for cuts, I think they are stuck in some mythical world of higher inflation.

Again, many of these committee members were in camp “transitory” which turned out not to be transitory. Many of the people on this Fed were still doing QE when they were already talking about hiking rates. QE does not need to be well telegraphed. For the life of me, I cannot understand why we would be doing QE when hikes are on the table.

Finally, for those who manage risk, you often have “stop losses” because when something goes wrong on a view, it is difficult to change your mind. You don’t necessarily think well. So, stop losses force change. Corporations tend to see “heads roll” if a major strategic blunder occurs. I still do not think anyone from “team transitory” lost their job.

So, we are stuck, I believe, with a Fed that is fighting their own past mistakes. They are too worried about being wrong to act.

Why does OER still exist?

Had the Fed just looked at Zillow Rent, we would have cut off QE much sooner and probably started hiking sooner. Maybe, with the shutdown, and being forced to look at alternative data, the Fed will be more wholistic in their choice of data to be dependent on? OER is fraught with issues. (Only a portion of the market is evaluated each month, and the premise that most rentals are single family homes, is now ludicrous). Even the Cleveland Fed has developed a real-time rent estimate. Why not rely more heavily on that? Housing in CPI is currently overstated and will certainly come down in the next few quarters (just math). So cut now, rather than waiting for this particularly bad data set to conform to reality.

Maybe Truflation is on to something?

Truflation only attempts to capture part of the inflation story. But wow, it is telling a very different story than core PCE (the Fed’s preferred measure). I wouldn’t pay attention, except Truflation showed more inflation, sooner than CPI did back during time “transitory.” Again, had the Fed given this data set some serious consideration, we would have stopped QE earlier and hiked sooner.

The Fed should cut, but they won’t.

Electricity Inflation

If you want to get a room with a hundred or more people engaged and focused on one topic, this is the chart to use (as I learned in Baltimore on Friday).

It has slowed of late (kind of, I guess), but is and will be one of the biggest issues politicians face in coming elections. Enough on that for now, but that is why our ProSec™ theme focuses on power generation, from solar, to coal, to gas, to fission, to fusion (I don’t see wind getting traction under this admin).

Does the EU Need Change?

The German Chancellor said that the EU was the “world champion of overregulation.” If you haven’t seen the Venn diagrams of who leads what between China, the U.S., and the EU, they are funny. There is overlap between the U.S. and China while the EU stands alone on “regulation.”

Hungary blocked the EU from sending a “joint statement” to the U.S. in response to Greenland. Sure, sticks and stones may break my bones, but joint statements will never hurt me, so it was likely to be an ineffective tactic to begin with. But sometimes ineffective is better than nothing. Hungary, at $220 billon of GDP, got to determine EU policy? I get inclusion, but this is going to be difficult if the “weakest” link has control, thereby elevating it to the “strongest” link.

You know that I felt Europe had “one job” in regards to Russia. Their job was to seize the frozen assets and come to the U.S. with “oodles” of money to spend on weapons for Ukraine (with no need to fund the purchases, etc.) Belgium said no. Maybe Hungary and Slovakia did too (can’t tell from AI or from memory).

Not saying that “might is right,” but if Germany and France and others are aligned, doesn’t that mean something?

No idea how Europe will react to so much of what is going on, though I think Europe is going to adopt ProSec™ far sooner than I had expected.

ProSec For Housing Affordability

We could do a whole section on housing affordability and we will. But today it is too cold and the report is already getting too long (though I somehow find myself in Palm Beach this weekend, so guess I should stop writing about the cold). So far, the evidence is largely anecdotal, but I’ve had several really encouraging discussion on this subject.

Production for Security has the potential to create jobs in areas that currently are not overly crowded and very expensive.

Some areas have a high cost of land. That makes it difficult to create affordable housing. While construction costs (especially the materials) don’t vary as much region to region, they do vary (especially labor).

If we can create pockets of new jobs in new areas, it could reduce the average cost of home prices in the U.S. without causing existing home prices to drop much.

That is the key – building new homes in areas that are less expensive to build in makes the average go down, without hurting existing home prices too much (there will be some drag as people move out of some expensive areas).

Just starting to explore this idea, but look at the housing boom that occurred in conjunction with the shale boom. 1Could we be at the early stages of a self-correcting housing affordability solution? New jobs in new areas?

Something to ponder (in a positive way).

ProSec Is Going Global After Davos

During the President’s speech/lecture/admonishment/address/whatever you want to call it, he did specifically say something to the effect of:

• The earths and minerals are NOT rare, it is the processed earths and minerals that are rare.
• This is the point we have been trying to make, and it seems like it is finally being addressed properly. The real bottleneck is in the processed and refined versions. See last weekend’s Production, Security, and Resilience for more on that.

For what it is worth, I think there is more to the Greenland and Venezuela story on rare earths and critical minerals. I think the “surprise” will be not just extracting more from these two countries, but also processing and refining more there. It fits the theme of keeping production of “things” we need in the Western Hemisphere where the U.S. has a renewed focus.

Bottom Line

Stay warm. The Fed won’t cut, but they should

January has been a long month already, only 11 more months to go until 2027.

Tyler Durden Sun, 01/25/2026 - 17:30

Heavily Shorted USA Rare Earth To Soar After US Govt Takes 10% Stake

It was last July 9, when we told readers all about "The Coming Rare Earth Revolution And How To Profit: All You Need To Know About The "Ex-China Supply Chain." It was here that we said MP Materials (and to a lesser extent USA Rare Earth Corp) was best positioned to capitalize as global rare earth trade flows and pricing adjust over the coming years (also, as a reference, that's when USA Rare Earth was trading below $10/share).

One day later, anyone who listened to our advice made their year, when MP Materials soared 50% after the US shocked markets by announcing the Pentagon had become the largest shareholder in the rare earths company. 

MP Materials Shares Surge 50% As Pentagon To Become Largest Shareholder https://t.co/qltUY1sHL3

— zerohedge (@zerohedge) July 10, 2025

Since then we had repeatedly pounded the table on USAR as the "other" major domestic REE company, pointing out repeatedly...

USA Rare Earth Shares Jump After Accelerating Timeline For Commercial Production By Two Years https://t.co/ufJ9i27s6e

— zerohedge (@zerohedge) December 10, 2025

... both that USAR is next on the Trump Capital, LP investment list, and warning the record number of shorts in the name to take cover while they have the chance, culminating with our note from Friday in which we pointed out abnormal buying activity in USAR calls. 

USA Rare Earth (USAR) gamma squeeze (or just takeover bet): more than 8k of June $43 calls were bought for up to ~$3

— zerohedge (@zerohedge) January 22, 2026

Less than 48 hours later we hit jackpot, after the FT reported that in its second major rare earth investment, the Trump administration would inject $1.6BN  into USA Rare Earths, just as we had said all along - surpassing the "mere" $400 million preferred stock investment by the Pentagon in MP Materials - the largest US investment in the sector to date, as it scrambles to shore up supplies of key minerals.

In exchange for the investment, the US government will receive a 10% stake in the Oklahoma-based USA Rare Earth, which controls significant US deposits of heavy rare earths. 

The government investment and a separate $1bn private financing deal are expected to be announced on Monday.

According to FT sources, the government would get 16.1 million shares in USA Rare Earth and warrants for another 17.6 million, both at a price of $17.17. The government agreed to pay $277mn for the equity, giving it an implied gain of $490mn for the equity and warrants based on the current share price of $24.77.

The deal marks the latest example of the Trump administration’s efforts to intervene in parts of the private sector viewed as critical to US national security, including taking a 10% stake in Intel, which we also called ahead of time. 

The Pentagon took a stake in US rare earth miner MP Materials... when will it do the same with Intel

— zerohedge (@zerohedge) August 7, 2025

USA Rare Earth will also receive $1.3bn in senior secured debt financing at market rates from the government. The money will come from a finance facility created for the commerce department as part of the CHIPS and Science Act passed in 2022. A commerce official said the department completed the transaction directly with the company.

While the commerce department declined to discuss the deal, an official in the Chips office - a part of the commerce department housed at the National Institute of Standards and Technology that led the negotiations - said it was "focused on onshoring critical and strategic mineral essential to the semiconductor supply chain and US national security". 

Or precisely what we said in July before the first MP Materials investment was disclosed

USA Rare Earth has separately tapped Cantor Fitzgerald, the Wall Street firm previously owned by commerce secretary Howard Lutnick and now run by his sons, to raise more than $1bn in fresh equity financing, the people said. It is not directly related to the deal with the government.

As the FT notes, a condition of the government investment in USA Rare Earth was that the company raise at least an additional $500mn from investors. It is on track to raise more than $1bn because of high demand for the financing deal, which uses a mechanism known as a private investment into a public equity, often called a “Pipe”.

Cantor’s involvement comes as the investment bank once led by Lutnick, one of Trump’s most prominent cabinet members, has expanded its investment banking capabilities to benefit from the president’s “America first” agenda. Cantor did not play a role in advising on the US government investment in USA Rare Earth.

USA Rare Earth, which has a market value of $3.7bn, is developing a huge mine in Sierra Blanca, Texas that it says contains 15 of the 17 rare earth elements underpinning production of cell phones, missiles and fighter jets. It also plans to open a magnet production facility in Stillwater, Oklahoma. 

Last year, the Trump administration invested in at least six minerals companies, including MP Materials, Trilogy Metals and Lithium Americas. But its investment in USAR Is by far the biggest. 

Shares in USA Rare Earth have more than doubled this year, helped by a 40% jump this week, and are up 150% since we first recommended the stock last July.

And now that the company has the explicit backing of the US government, if the Intel deal is any indication of what is coming, expect USAR stock to more than double from here, although when adding the record short interest in the equation...

... we just may see a historic surge in the stock when it opens for trading on Monday.

Tyler Durden Sun, 01/25/2026 - 16:55

California's Billionaire Tax: A Mirror Of EU Green Socialism

Submitted by Thomas Kolbe

The mid-19th century Gold Rush earned California the nickname “Golden State.” Over generations, the region became a place of aspiration— a projection screen for ambition and prosperity. Here, the American Dream coalesced into tangible stories of social mobility. Today, the state has become the stage for a political experiment that mirrors Europe’s globalist ideology.

This year’s World Economic Forum in Davos was entirely overshadowed by Donald Trump’s speech. The U.S. President declared the centrally planned EU-style climate socialism a failure, sending a chill through those who had benefited economically from the past years’ policies and fully embraced the green transformation agenda.

A politician who seems particularly devoted to this European-style centralist approach is California Governor Gavin Newsom. The day after Trump’s grand Davos performance, Newsom had the chance to present his perspective—a performance that quickly struck observers as bizarre. He labeled the Western leaders’ response to Trump’s policies as pathetic, accusing them of cowardice and bowing to the Trump administration. Symbolically, he carried a pair of bright red Trump Signature Knee Pads as a political prop, claiming he should have brought a full set for every world leader.

This hardly reflects the conduct of a serious statesman, particularly as his policies at home have generated genuine economic problems and deep social upheavals.

California on a Green Course

Newsom, a prospective Democratic presidential hopeful, governs the world’s fourth-largest economy—if California were its own nation.

He stages himself as a champion of the supposedly progressive, preferring the role of climate activist over that of a sober governor. The 2024 California wildfire disaster was apodictically attributed by him, in a blunt “Basta-style,” to climate change—opportunistic, eager to push through his climate agenda in the immediate shock of catastrophe.

Repeatedly, the state-induced water shortages in California are stylized as consequences of extreme drought linked to CO₂ emissions. California finds itself trapped in a familiar argumentative loop: every storm, every hail event is reinterpreted as a climate catastrophe, while normal conditions recede behind a veil of media-induced panic.

Newsom would prefer to exclude skeptics of the CO₂ debate from political discourse—a faint echo of Daniel Günther, but in woke-American design. Under his governance, California has become North America’s LGBTQ mecca: gender politics over academic excellence, paternalistic state control replacing the principle of autonomous individual action. The American spirit of the minimal state, which respects private life, is disappearing piece by piece in Newsom’s California.

Since taking office in 2019, California has mirrored the European Union in textbook fashion. The state has become the U.S. model for the most radical implementation of the Green Deal. Regulatory codes for industry, agriculture, and transportation read like translations of Brussels’ bureaucratic playbook.

As in the EU, California’s green transformation and debt-financed subsidy machinery have rapidly driven up public debt: over the past three years, the budget deficit reached roughly $110 billion, and the total debt now stands at $1.8 trillion—including unfunded social obligations.

Debt King Newsom governs his ideal state on clay feet.

One wonders at the audacity of his Davos performance as a supposed savior of the American Dream. Of course, it was home turf. In the WEF halls, at the heart of globalist think tanks, there is still faith in a centrally planned Net-Zero economy—without crashing the existing economic model or provoking a severe societal crisis.

In California, CO₂ emissions are to end by 2045. The cult lives, beneath the state’s radiant sun, which has simultaneously spawned a veritable homeless industry alongside its green art economy.

During Newsom’s tenure, a hybrid system of state-funded private homelessness care emerged. The number of beneficiaries managed by California’s social complex has multiplied tenfold to 180,000. Much like in Minnesota, where a network of Somali immigrant-run daycares created a tax-extraction model, California has a comparable system: poverty is managed and monetized, with major beneficiaries being Democratic Party members—a vast political donation machine ensuring campaign financing for future elections.

Ever-Increasing Taxes

California’s increasingly centralist regulatory policies are matched by aggressive fiscal measures aimed at delaying the inevitable economic collapse. Alongside heavy burdens on the middle class, businesses, and rising social contributions, a so-called billionaire tax is nearing enactment—a populist instrument, mirroring Germany’s current policy moves. In the 2026 super-election year, Germany’s ruling coalition seeks moral credibility by blaming the wealthy for social and economic decay. Similarly, future inheritance taxes on mid-sized corporate assets are planned. It sells well, a sound of social justice, distracting from the true culprits of the crisis.

This is Newsom in full form. California — a slice of Europe on the American West Coast.

Of course, Newsom’s billionaire tax is a Trojan horse. Once codified, the initially one-time plunder of the private wealth of roughly 200 California billionaires will soon be recast as a recurring “public welfare” levy: five percent of total net worth, payable once, or stretched over five years.

As usual, politics disregards that this capital is often tied up in corporate investments, funding the future of the state and securing jobs. Newsom needs liquidity. The green transformation must be funded—especially as the Trump administration in Washington deregulates the energy sector, prompting businesses to flee California in droves. The Red States are in demand now more than ever.

California billionaires voice unified disapproval. Larry Page, former CEO of Alphabet/Google, spins off parts of his companies to Delaware. Elon Musk had long since relocated Tesla. Peter Thiel, co-founder of Palantir, moves capital to Miami, Florida. David Sachs of Craft Ventures also leaves California for Austin, Texas.

The green transformation chaos has become a boost for U.S. business locations that value private property and market freedom.

We know this industrial exodus from Germany—a near-identical outcome under the same policies. And, like the German government under Friedrich Merz, which layers media spectacles over economic decline alongside the EU Commission, Newsom stages his media skirmishes with Donald Trump. The NGO-prince Newsom rhetorically flees into moralism. His tax-funded social state shields him from economic reality, capital flight, and growing criticism over misplaced priorities.

In Europe, this sound is all too familiar. It preempts criticism that grows louder as Net-Zero policies produce severe collateral damage and social upheaval. The solutions preferred by Newsom and the EU complex follow the same controlled green socialism principle: social scoring models based on individual carbon footprints, a maximalist censorship apparatus in social media, and digital central bank currencies granting the state total power over the private sector. Society is forcibly molded to fit the political ideology—regardless of the cost. Woke softening rhetoric attempts to paint this new socialism in gentle tones, masking its brutal reality.

Tyler Durden Sun, 01/25/2026 - 16:20

"Befuddled By The Insanity Swirling Around Me..."

Authored by Jim Quinn via The Burning Platform blog,

Fake It Until You Make It

“My first rule: I don’t believe anything the government tells me.” — George Carlin

The government reported CPI of “only” 2.7% and the financial pundits and Trump toadies celebrated the “lowest inflation in 5 years”. This is after “surprisingly good” unemployment report where the country added 50,000 jobs and the unemployment rate fell to 4.4%. Of course, they also revealed every month in 2025 had been revised downward. EVERY freaking month was a lie when originally reported. December will eventually be revised to a negative number, when no one is paying attention.  The lie did its job of sending the stock market to new all-time highs, because they need to fake it until they make it.

It’s embarrassing living under the rule of a quasi-fascist corporate governmental bureaucracy built on a funeral pyre of lies, growing ever larger by the minute, anticipating a spark igniting a conflagration never before seen in history. The average “forgotten man” knows their cost of living increases are nowhere near 2.7%, as they pay 30% more for utilities, 20% more for a steak, 10% more for chicken, 20% more for car insurance, 10% more for homeowners insurance, 10% more for property taxes, 10% more for rent, 35% more for new and used cars  since 2020, and the list goes on. The CPI is a LIE.

They massage the employment numbers so hard, the BLS bureaucrats must achieve a happy ending every month. It’s laughable when common folk give up looking for a job because there are none to be had, they are no longer counted as unemployed. If you believe there are only 7.5 million Americans unemployed out of the 275 million adult population, while 103 million are Not in the Labor Force, then you are a clueless non-critical thinking dupe who deserves to get it good and hard. The American empire has devolved into a dying lying replica of the degenerate Soviet empire described so well by Solzhenitsyn.

“We know that they are lying, they know that they are lying, they even know that we know they are lying, we also know that they know we know they are lying too, they of course know that we certainly know they know we know they are lying too as well, but they are still lying. In our country, the lie has become not just moral category, but the pillar industry of this country.” ― Aleksandr Solzhenitsyn 

If GDP is growing at 5%, unemployment is low, inflation is low, and stocks are hitting all-time highs, why would the Fed need to cut interest rates and begin another massive round of quantitative easing? It sure smells like the desperation exhibited in September 2019 when the repo market revealed major problems under the hood. This was followed by the plandemic, unleashing trillions into the grubby little hands of the banking cabal to enrich themselves while throwing a few crumbs to the plebs as they were locked in solitary confinement for 18 months.

The global financial system is choking on debt and the only solution central bankers, politicians, and their billionaire puppet masters have is to print trillions more fiat, while trying to create a Potemkin facade of normalcy and stability for the ignorant masses. Making up fake statistics, using the newly printed fiat to prop up financial markets, and having their legacy media propaganda outlets spew comforting lies has been their plan. But, it appears gold and silver are calling their bluff. They have lost control of their paper derivative price suppression mechanisms. Gold and silver do not go up 5% per day when all is well. The system is broken and the shit is going to hit the fan, soon.

There were a couple charts posted by the Kobeissi Report which I think explain why the average working stiff is mad as hell and getting close to not taking it anymore. The percentage of GDP which goes to workers in the form of compensation just reached an all-time low of 53.8%. It is clear from the chart, this has not been the century of the worker, but the century of bankers and corporations. From 1947 through 2000, workers received approximately 64% of GDP in compensation. It seems that giant sucking sound described by Ross Perot in 1992 was accurate, as millions of good paying jobs were outsourced to 3rd world shitholes, and now robots and AI are completing the task of gutting the middle class to benefit billionaires, bankers and politicians.

With current U.S. GDP of $31 trillion, workers would be receiving over $3 trillion more in annual compensation if our overlords had not financialized the world and treated workers as nothing more than replaceable cogs in their finance machine. Corporate profit margins reached 10.9% in the 3rd quarter, the 2nd highest in history. Basically, the American worker has been screwed over for the sake of corporate profits. Now you know why the stock market is at record highs, while senior citizens living on a fixed income have to choose between paying the electric bill or filling their prescriptions. Show me Ross Perot was not wrong after analyzing this chart.

“We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor, … have no health care—that’s the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don’t care about anything but making money, there will be a giant sucking sound going south. When [Mexico’s] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it’s leveled again. But in the meantime, you’ve wrecked the country with these kinds of deals.” – Ross Perot – 1992 Presidential Debate

If the economy is doing so well, as I’m scolded to acknowledge by a multitude of Trump lackeys in the government and his social media influencer acolytes, why are all consumer related measures showing extreme stress? Auto loan delinquencies have soared to Great Recession levels, with over 2 million autos repossessed in 2025. Student loan delinquencies at over 30% have reached a 21 year high. Mortgage delinquencies have been ticking up as home prices have flattened and the boom is turning into a bust. Why would consumer confidence be near covid lows and 35% lower than 2019 if the economy was really booming?

And, the most important debt to everyday Americans, credit card debt, is seeing delinquency rates surge to levels last seen in 2011. Household debt rocketed by $197 billion in the 3rd quarter, reaching an astronomical $18.6 trillion. Nothing like a record amount of debt, a weakening frozen jobs market, and now Trump’s 10% interest rate cap PR stunt to  create a consumer debt crisis. It has already begun. US consumers now see a 15.3% chance of missing a minimum debt payment over the next 3 months, the highest since April 2020. This is also the 2nd-highest reading since the 2013 peak.

When you give workers a smaller and smaller slice of the pie for a quarter of a century, while doubling the cost of everything they need to live, and propagandizing these victims into a mass consumption mania, you’ve manipulated millions of Americans into inescapable debt servitude. And that is exactly what the ruling class wanted – hamsters running on a never ending wheel of debt. Of course, the highest delinquency risk, at 22.5%, was reported by households earning below $50,000, those doing all the hard work that keeps this country running. The sharpest increases were among respondents over the age of 60, seniors living on fixed incomes (declining due to lowering of interest rates) who can no longer make ends meet.

Things are falling apart. The country adds $5 billion to the national debt every day. The $200 trillion of unfunded welfare/pension liabilities are mathematically impossible to honor. Our “peace president” has kidnapped another world leader, about to bomb Iran for a second time, about to conquer Greenland, hijacks Russian oil tankers, appears to have been aware of the attempt to assassinate Putin with drones, threatens to bomb Mexico, Columbia,and any other country that irritates him, and saber rattles towards China regarding Taiwan.

Personally, I’m befuddled by the insanity swirling around me. I want no part in this shitshow, as what passes for leaders plunge the world towards WW3 and nuclear Armageddon. I can’t tell whether this international strife is being used to distract from the intractable imminent financial disaster awaiting the western world, or whether these psychopaths in suits are just following the orders of the globalist billionaires who are running the show and need chaos, strife, fear, and mass casualties to implement their New World Order.

“Things fall apart; the centre cannot hold
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere the ceremony of innocence is lost
The best lack all conviction, while the worst are filled with passionate intensity.”
― W.B. Yeats

The center cannot hold. We are ruled by the worst, and they passionately want to blow up the world. Welcome to 2026.

Tyler Durden Sun, 01/25/2026 - 14:00

Schumer: Democrats 'Will Not Allow' DHS Funding Bill To Move Forward

Update (1603ET): Chuck Schumer is out with a new statement explicitly refusing to move forward with DHS funding as part of the six-part spending package to avert a government shutdown. 

"Senate Democrats will not allow the current DHS funding bill to move forward," he said, adding "Senate Republicans must work with Democrats to advance the other five funding bills while we work to rewrite the DHS bill." 

*  *  *

With Congress already veering towards a shutdown this Friday after Senate Democrats vowed to oppose funding DHS in a six-bill spending package, yesterday's killing of a 37-year-old Minneapolis man by federal agents all but cemented it - unless Republicans are willing to cave. 

In a Saturday night statement, Senate Minority Leader Chuck Schumer (D-NY) said Democrats won't advance the bill as long as it includes DHS funding. The package requires Democratic support to clear a 60-vote hurdle. 

"Senate Democrats will not provide the votes to proceed to the appropriations bill if the DHS funding bill is included," said Schumer, adding that he's personally a 'no.'

Following Saturday's shooting, several Democratic senators who previously voted to advance government funding measures flipped, and now oppose the package unless DHS - and therefore funding for ICE and Border Patrol - is stripped.

Please note: @DHSgov org chart dated 2023 (link below) includes @uscoastguard @fema @TSA @CISAgov @SecretService etc.https://t.co/NooJ0vXutz pic.twitter.com/8s1iKTZjlO

— One American (@1silveramerican) January 25, 2026

"I am voting against any funding for DHS until and unless more controls are put in place to hold ICE accountable," said Sen. Brian Schatz (D-HI) in a Saturday statement on X. "I am voting against any funding for DHS until and unless more controls are put in place to hold ICE accountable."

Sens. Catherine Cortez Masto (D-NV) and Jacky Rosen (D-NV) - who voted to end the shutdown in November - also announced on Saturday that they will oppose the DHS funding bill, Politico reports.

"I have the responsibility to hold the Trump Administration accountable when I see abuses of power — like we are seeing from ICE right now," Rosen said on X. "That is why I’ll be voting against any government funding package that contains the bill that funds this agency, until we have guardrails in place to curtail these abuses of power and ensure more accountability and transparency."

The DHS bill passed the House Thursday 220-207, with only seven Democrats voting for it. But Republican House leaders merged it with five other bills funding the departments of Defense, Health and Human Services and State, among others, sending it to the Senate as one package.

More than half of the 47-member Democratic caucus has already vowed to oppose the package, many before Saturday’s shooting. And that number is growing as Democrats’ re-evaluate the legislation in the wake of the shooting and as they face pressure from House Democrats and their Senate colleagues, not to mention outside voices close to the party base. -Politico

Following the shooting, government shutdown odds surged on Polymarket, and are now at 76%.

Meanwhile, there's this...

You can't announce you are abolishing the Department of Education and then pressure conservatives to vote to fund it at the FULL Biden level WITH a Dem rider PREVENTING transfer of those funds. This is a game. https://t.co/lglQZjGwrB pic.twitter.com/8SofrNZdvq

— Daniel Horowitz (@RMConservative) January 23, 2026

Tyler Durden Sun, 01/25/2026 - 13:25