What We Are Experiencing Is Not De-Dollarisation But De-Fiatization

By Benjamin Picton, Senior Market Strategist At Rabobank

J.P. Morgan once famously remarked that “gold is money, everything else is credit.” That dictum was apparently forgotten during the 1980s & 1990s as gold’s share of central bank reserves steadily declined and gold prices – for most of that period – did the same.

That period was the most recent era of high financialization, where Hollywood movies like Wall Street, Trading Places, Barbarians at the Gate and even Pretty Woman glorified the swashbuckling lifestyle of financiers. It was also the era of the leveraged buyout, the rise of the MBA, the retail day-trader speculating in the dotcom boom and the germination of the idea (in the Anglosphere, at least) that you too can get rich through landlording – effectively transforming housing from a consumption good to a financial asset. This was also the era of the imperialism of the US Treasury Bond.

With the benefit of hindsight, it is reasonably clear from the data that this period ended with the popping of the dotcom bubble, but the final eulogy was not read until the financial crisis of 2008 when the excesses of high financialization were truly laid bare. This imbued the arguments of non-market economies like China that American system was decadent and sclerotic – and that the their system was superior – with apparent credibility. Along with military misadventure in the Middle East this constituted a heavy blow for the soft power and prestige of the United States.

While it is typical to think of the financial crisis is an epochal ending, gold’s share of central bank reserves hit its nadir around the year 2000. That was also the approximate highwater mark for US Treasury bonds’ share of global reserve assets. Many Western central banks – the last sellers of scale – had recently offloaded their holdings at low, low prices in the late 1990s having been taken in by fashionable ideas that gold was a “barbarous relic” and that the creation of the fiat monetary system and floating exchange rates in 1971 made holding gold a quaint anachronism.

Fast forward to today and gold is now trading well above $5000/oz. Silver is trading well above $100/oz. The financial has given way to the material and the fashionable narrative is now ‘sell America’ and de-Dollarisation. Dollar assets’ share of total central bank reserves has been in slow decline for years, but some commentators are now pronouncing the death of the Dollar system as Donald Trump’s abrasive style of foreign policy offends traditional allies. In seeming support of the sell America narrative, the Bloomberg Dollar spot index is down 1.14% year to date.

However, on the other side of the ledger we continue to see strong demand at US Treasury auctions and SWIFT data shows that the use of the US Dollar in international payments is actually increasing, mostly at the expense of the Euro. The Chinese Renminbi has seen a modest rise in its use in payments, but small declines in its already low share of central bank reserves. Even the increased use in payments is exaggerated somewhat by transactions between mainland China and Hong Kong. At only 3-4% of total payments versus more than 50% for the Dollar, it would seem to us that the demise of the Dollar in favor of other currencies is much exaggerated.

Speaking to the media at Davos, hedge fund manager Ray Dalio argued that what we are experiencing is not de-Dollarisation, but de-fiatization. That is, flight from fiat currencies in favor of real assets or – as J.P. Morgan might have advised – real money in the form of gold and silver. Ray pointed out that “in a war-like environment” countries don’t want to hold each other’s debt for fear of sanctions (Russia presents a cautionary example), while other investors don’t want to hold financial claims for fear of debasement through deficit spending by national governments and debt monetization – quantitative easing – by central banks. Under this scenario, it is rational to hold neutral money with no counterparty risk, no risk of debasement and less scope for the imposition of capital controls. The last sellers of scale (central banks) became the first buyers of scale in 2024 and 2025, but the trade has broadened out to other buyers.

The debasement of fiat currencies is now easy to spot. Aside from gold and silver regularly re-setting all-time highs the Bloomberg commodity index has surged to sit at its highest level since mid-2022. Brent crude prices have risen for the last five weeks straight and Henry Hub natural gas prices have surged more than 65% year-to-date. These types of moves signal a scarcity of the material relative to the financial. Consequently, long yields have remained elevated (or surged, in the case of Japan) and the Reserve Bank of Australia – who took the ‘gently, gently’ approach on fighting inflation – may soon become the first G10 currency-issuing central bank (aside from Japan) forced to hike rates. The AUD has recently been surging in anticipation.

As Dalio explained to Bloomberg, the flipside of a trade imbalance is a capital imbalance. This is because the capital account is – by definition – the inverse of the current account (which includes the trade balance) in the balance of payments. With the USA running record current account deficits in early 2025, it’s a matter of mathematics that foreign investors have to buy US Treasuries for that deficit to be financed. For the US to make progress on reducing its trade deficit (as it has recently), it must also make progress on reducing its capital account surplus. That means fewer Dollars for the rest of the world who – as detailed above – rely on Dollars to conduct trade.

This is the Triffin Dilemma, which also describes why China – with its immense and growing trade surplus – cannot supplant the Dollar’s global role with the CNY. How are you going to get CNY into the hands of other countries unless China runs a trade deficit? Logically – though its appeal as a store of value may be diminishing – the Dollar must remain the global reserve currency because there is no viable alternative. Central governments will not return to a gold standard for the same reason the last vestiges of the gold standard were abandoned in the first place: it would constrain governments’ freedom to engage in deficit spending and create inflation.

Very clearly the world is erecting new barriers to the free movement of goods. With the US embracing a re-invigorated Monroe Doctrine under its new National Security Strategy, it now views the economic affairs of its neighbours in the Western Hemisphere as issues of interest for the United States. This is obvious in the case of Venezuela, and also in the case of the Panama Canal, and was again highlighted over the weekend when President Trump threatened to impose 100% tariffs on all Canadian goods if Canada were to do a trade deal with China.

Canadian PM Carney became the darling of Davos by delivering a speech articulating the changes in the world order and attempting to rally middle powers to band together and stand against great power coercion. Carney was delivering jabs at the United States, but the credibility of his message may have been diminished somewhat by his actions in signing an agreement with China to reduce Canada’s 100% tariff on Chinese EVs in exchange for a reduction in Chinese tariffs on Canadian canola and seafood products.

Speaking to ABC’s This Week, Treasury Secretary Scott Bessent explained the tariff threat by making it clear that Canada’s deal was not acceptable from the perspective of the USA. “We have a highly integrated market with Canada... Goods can cross the border six times during the manufacturing process. And we can’t let Canada become an opening that the Chinese pour their cheap goods into the U.S.”

For now, the geostrategic competition between China and the United States continues to be prosecuted as a trade war but investors may do well to heed Dalio’s warning that punishment in the form of a global capital war is on the horizon. For details on how one part of that might look, see our thoughts on US Dollar stablecoins here.

Tyler Durden Mon, 01/26/2026 - 12:10

Trump Hails "Very Good Call" With Walz As He Sends "Tough But Fair" Tom Homan To Minnesota

President Trump announced on Jan. 26 that he is sending border czar Tom Homan to Minnesota in the wake of the shooting of an anti-immigration enforcement protester by a federal agent.

The president said in a morning Truth Social post that Homan would be going to Minnesota on Monday evening, noting that though Homan hasn’t been involved in operations there, he knows many officials in the state.

“Tom is tough but fair, and will report directly to me,” Trump wrote.

White House press secretary Karoline Leavitt confirmed in a post on Monday that Homan would be investigating fraud in Minnesota, building on a multi-agency effort that was launched several weeks ago amid reports of fraudulent activity targeting federal and state entitlement programs.

The border czar, she added, would also be managing Immigration and Customs Enforcement (ICE) operations in Minnesota to target illegal immigrants.

“In addition, Tom will coordinate with those leading investigations into the massive, widespread fraud that has resulted in billions of taxpayer dollars being stolen from law-abiding citizens in Minnesota,” Leavitt wrote on X.

As Jack Phillips reports for The Epoch Times, the Trump administration has launched its most ambitious immigration operation to date in Minneapolis, sparking weeks of protests by residents and resulting in two shooting deaths.

A Border Patrol agent on Saturday fired in self-defense after a man, identified later as Alex Pretti, approached with a handgun and violently resisted attempts to disarm him, according to the Department of Homeland Security (DHS).

It followed the Jan. 7 fatal shooting of U.S citizen Renee Good during a separate immigration operation.

Democratic congressional lawmakers have warned that in the wake of the Pretti shooting, they could shut down the federal government at the end of January if Republicans do not pass a package without DHS funding.

“Senate Democrats will not allow the current DHS funding bill to move forward,” Senate Minority Leader Chuck Schumer (D-N.Y.) said in a statement on Sunday before he criticized the Trump administration.

“People should be safe from abuse by their own government. Senate Republicans must work with Democrats to advance the other five funding bills while we work to rewrite the DHS bill.”

In posts over the weekend and in his Truth Social comment Monday, Trump has shown no sign of backing down amid the protests. On Monday, he suggested that the operation was critical.

Trump wrote that “a major investigation is going on with respect to the massive 20 Billion Dollar. ... Welfare Fraud that has taken place in Minnesota, and is at least partially responsible for the violent organized protests going on in the streets.”

Trump said Sunday that the operation in Minnesota was a key part of why he won in 2024 and signaled that Democratic politicians were to blame.

“Tragically, two American Citizens have lost their lives as a result of this Democrat ensued chaos,” the president said.

This morning, 'diplomacy' appears to be taking place as President Trump said in a Truth Social post (in a dramatic shift in tone) that Governor Tim Walz called him with the request to work together with respect to Minnesota.

"It was a very good call, and we, actually, seemed to be on a similar wavelength," Trump said.

"I told Governor Walz that I would have Tom Homan call him, and that what we are looking for are any and all Criminals that they have in their possession. The Governor, very respectfully, understood that, and I will be speaking to him in the near future.

He was happy that Tom Homan was going to Minnesota, and so am I! We have had such tremendous SUCCESS in Washington, D.C., Memphis, Tennessee, and New Orleans, Louisiana, and virtually every other place that we have “touched” and, even in Minnesota, Crime is way down, but both Governor Walz and I want to make it better!"

We will just have to see if the manufacture crisis ebbs after this... and just how Walz will respond to Trump's statement.

Tyler Durden Mon, 01/26/2026 - 11:55

Booz Allen Shares Hammered After Treasury Cancels Consulting Contracts

Shares of Booz Allen Hamilton tumbled the most in months during late Monday morning trading after U.S. Treasury Secretary Scott Bessent canceled dozens of contracts tied to the consulting firm.

Secretary Bessent said 31 contracts with Booz Allen were terminated, representing $4.8 million in annual spending and $21 million in total obligations.

"President Trump has entrusted his cabinet to root out waste, fraud, and abuse, and canceling these contracts is an essential step to increasing Americans' trust in government," he said, adding, "Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service."

Treasury pointed to an incident with Booz Allen in recent years:

Most notably, between 2018 and 2020, Charles Edward Littlejohn — an employee of Booz Allen Hamilton — stole and leaked the confidential tax returns and return information of hundreds of thousands of taxpayers.

Last spring, Booz Allen said it was undergoing a major restructuring and planned to cut roughly 2,500 jobs, about 7% of its workforce, as President Trump's DOGE efforts reduced government spending by discontinuing federal contracts.

Later in the year, CEO Horacio Rozanski told investors the company was "making the difficult decision to reduce layers and numbers in our senior ranks" due to federal contract reductions and a broader slowdown in government funding.

Shares of Booz Allen are down 7.5% in the cash session this morning, marking the worst single-day decline since October 24, when the stock fell about 9%. Shares have been cut roughly in half since President Trump's November 2024 election victory, as Elon Musk's DOGE initiative began aggressively targeting waste, fraud, and abuse across the federal bureaucracy in early 2025.

In May 2025, Goldman analyst Noah Poponak downgraded Booz Allen from "Neutral" to "Sell," noting medium-term revenue growth is expected to be flat as federal civilian spending comes under pressure and priorities shift within many federal agencies.

Tyler Durden Mon, 01/26/2026 - 11:40

USAR's New CEO Executing On Strategy

Submitted by Tight Spreads

USA Rare Earth’s (USAR) strategy is characterized by its comprehensive “mine-to-magnet” vertical integration, a significant geographic footprint across North America and Europe. While competitors often focus on specific segments of the value chain, USAR is the only company outside of China positioned to offer a true end-to-end solution. In this note we’ll go over the business, key differentiators, and what the company has as remaining gaps in their operations to execute their strategy. A valuation note will follow soon.

Key notes include how on September 29, 2025, USAR announced the appointment of Barbara Humpton as the company's Chief Executive Officer, effective October 1, 2025. Barbara Humpton had a distinguished 14-year tenure at Siemens before joining USAR.

For those of you who saw the Bloomberg and Reuters headlines:

Today, January 26th, it was confirmed true.

Business Overview and Segments

The company operates as a single reportable operating segment focused on the vertically integrated production of rare earth element magnets. Its business model encompasses the entire value chain through the following core components:

• Upstream (Mining): Development of the Round Top deposit in Sierra Blanca, Texas, which is the richest known domestic source of heavy rare earth elements, gallium, beryllium, and yttrium.

  • Gallium: Round Top is one of the largest known deposits of gallium, a mineral where China currently accounts for approximately 98% of primary production. It is essential for semiconductors, compound semiconductors, and defense technologies, and was recently subject to export bans by China.

  • Beryllium: This element is used in specialized applications including military radar, nuclear power, X-rays, and MRIs. Its presence at Round Top was identified as early as the 1970s associated with fluorite deposits.

  • Yttrium: Classified as a heavy rare earth, yttrium is critical for radiation therapy for certain cancers and is a foundational material for chemical vapor deposition in semiconductor manufacturing.

• Midstream (Processing & Metal-Making): Ownership of Less Common Metals (LCM), a leading producer of rare earth metals and alloys based in the UK, and development of a processing lab in Wheat Ridge, Colorado.

  • LCM is the only proven scaled producer of rare earth metals, alloys, and strip casting outside of China.

  • Feedstock Security: The acquisition ensures a reliable supply of NdFeB strip cast alloy, which is a mandatory input for the Stillwater, Oklahoma magnet facility.

  • Specialized Materials: LCM provides leadership in Samarium and Samarium Cobalt metals, which are critical for defense and medical sectors and identified as high-risk for supply vulnerabilities.

  • Circular Manufacturing: LCM brings the ability to process recycled rare earth oxides from end-of-life magnets and production swarf, creating a more sustainable supply chain.

  • Hafnium Extraction: During piloting of its separation methods, the company successfully isolated hafnium, a material used in advanced semiconductors and nuclear reactors.

• Downstream (Magnet Manufacturing): A 310,000 sq. ft. manufacturing facility in Stillwater, Oklahoma, designed for large-scale production of sintered Neodymium Iron Boron (NdFeB) magnets.

• Circular Economy: Integration of recycling capabilities to recover materials from end-of-life magnets and production swarf, creating a sustainable closed-loop system.

Remaining Steps for Full Vertical Integration

While the LCM acquisition closes a major gap, several components are still required to fully realize the end-to-end domestic strategy.

1) Mining and Processing Development

• Technical Milestones: The company must still complete the Pre-Feasibility Study (PFS) and a Definitve Feasibility Study (DFS) for the Round Top project. Commercial production at the Texas mine is not expected to begin until late 2028.

• Separation Scaling: While separation has been proven at the Wheat Ridge lab, USAR needs to scale these technologies to handle 8,000 metric tons per annum of concentrates.

2) Manufacturing and Infrastructure

• Domestic Metal-Making: While LCM provides metal-making in the UK, USAR still needs to “return this capability home” by establishing rare earth metal-making facilities within the United States.

• Capacity Expansion: Full commissioning of the Stillwater magnet facility is scheduled for Q1 2026. The company plans to scale magnet production from an initial 1,200 tpa to a target of 5,000 tpa, which requires additional capital and equipment installation.

• European Expansion: Plans to build a 3,750 mtpa metal and alloy plant in France are underway but require further development and construction.

How the company is addressing the premier bottlenecks identified:

USAR is scaling its operations through a combination of proprietary technological development at its Wheat Ridge facility and a massive $1.6 billion government-backed investment to establish domestic metal-making capabilities.

Scaling Separation Processes to 8,000 Metric TPA

To transition from bench-scale testing to a commercial capacity of 8,000 metric tons per annum (tpa) of concentrates, the company is implementing the following steps and technologies:

Continuous Demonstration and Digital Twin Technology

• USAR is collaborating with the U.S. Department of Energy to leverage digital twin technology and process modeling to advance separation at the Wheat Ridge lab.

• The company plans to operate a Hydromet demonstration facility in Colorado for 2,000 to 4,000 continuous hours starting in early 2026.

• This demonstration plant will run five parallel solvent-extraction (SX) circuits to generate the operational data required for commercial plant design.

• The scaling strategy involves moving from batch testing to continuous testing by significantly increasing the volume of rock processed to create enough bulk leach solution.

Process Optimization and Engineering Partners

• The company has selected Fluor Corp. and WSP Global Inc. as EPCM partners to advance the Definitive Feasibility Study (DFS) and manage large-scale infrastructure delivery.

• Research at the Colorado Facility is specifically focused on refining separation processes that minimize the use of organic solvents, aiming for a lower waste profile than traditional methods.

• Engineering work is currently focused on “fine-tuning” the separation of bulk gallium, as well as heavy and light rare earths, into distinct concentrate streams.

Establishing Domestic Metal-Making

USAR is addressing the lack of domestic rare earth metal-making by integrating the expertise of its Less Common Metals (LCM) acquisition directly into its U.S. operations.

Integration at Stillwater, Oklahoma

• USAR intends to return metal making to the United States by integrating LCM’s capabilities into its Stillwater, Oklahoma facility.

• The Stillwater site is being developed to house the largest metal-and-alloy-making and strip-casting capability outside of China.

• The facility will produce essential feedstocks for magnets, including NdPr, dysprosium, terbium, and samarium cobalt metals.

• The company aims to reshore approximately 10,000 tonnes per year of heavy rare earth metal and alloy production capacity to the U.S.

Strategic Support and Workforce Development

• A $1.6 billion Letter of Intent with the U.S. government and $1.5 billion in private investment are earmarked to accelerate the build-out of these domestic capabilities.

• To address the shortage of skilled labor in the U.S., USAR is launching an apprenticeship program to train domestic metal makers and transfer expertise from the UK-based LCM team.

• The domestic metal-making operations will utilize a “circular” approach, incorporating both mined feedstock from Round Top and recycled materials (such as magnet swarf).

Important Notes on Management

New CEO: Barbara Humpton had a distinguished 14-year tenure at Siemens before joining USAR last October.

• She served as President and CEO of Siemens USA starting in 2018, overseeing the company’s largest market with more than $20 billion in annual revenues.

• Siemens Government Technologies: Prior to her role as U.S. CEO, she was the President and CEO of Siemens Government Technologies, where she focused on implementing products and services for federal government agencies.

• Previous Executive Roles: She served as a Vice President at Booz Allen Hamilton and held the position of Vice President and Director at Lockheed Martin Corporation.

• Board Memberships: She serves on the Board of Directors of the Federal Reserve Bank of Richmond and is the Chair of the Board for the Center for Strategic and Budgetary Assessments (CSBA).

• Industry Influence: She has held board seats at the National Association of Manufacturers (NAM) and the Economic Club of Washington, D.C.

Rob Steele (CFO): Appointed in March 2025, Steele brings over 30 years of experience in investment banking and has led over $28 billion in capital raises.

Dr. Alex Moyes (VP of Mining): Appointed in October 2025, Moyes holds a PhD in Mining and Minerals Engineering and previously led critical minerals planning at Ramaco Resources.

Board Composition: The board includes experienced figures such as Michael Blitzer (Chairman and SPAC veteran) and General Paul Kern (Ret.), who formerly served as Commanding General of the Army Materiel Command.

More in the Tight Spreads substack.

Tyler Durden Mon, 01/26/2026 - 11:25

Son Of US Govt Crypto Custodian Allegedly Steals $40 Million

Well known blockchain sleuth, ZachXBT, alleges a custody CEO's son stole tens of millions in crypto from US government‑linked wallets tied to Bitfinex funds, exposing systemic custody risks.

1/ Meet the threat actor John (Lick), who was caught flexing $23M in a wallet address directly tied to $90M+ in suspected thefts from the US Government in 2024 and multiple other unidentified victims from Nov 2025 to Dec 2025. pic.twitter.com/SBAFU5hTnE

— ZachXBT (@zachxbt) January 23, 2026

As Andrew Folkler reports for Crypto.news, the case revives scrutiny of contractor CMDSS and wider federal crypto‑custody controls, even as Bitcoin, Ethereum, and Solana prices trade mostly on macro drivers.

Core allegation

In a detailed thread “documenting [his] findings,” ZachXBT claimed that an online figure known as “Lick,” identified as John Daghita, “siphoned tens of millions of dollars in crypto from wallets linked to the US government.”​

He further alleged that Daghita is the son of Dean Daghita, president and chief executive of Command Services & Support (CMDSS), a Virginia‑based firm contracted by the U.S. Marshals Service to safeguard seized digital assets classified as “Class 2–4” tokens that require bespoke custody solutions.​

Trace from Bitfinex‑linked wallets

According to on‑chain traces cited by ZachXBT, the allegedly compromised funds were linked to assets seized in the 2016 Bitfinex hack, with one wallet receiving “$24.9 million from a US government‑controlled wallet in March 2024.”

The probe builds on an earlier investigation, published January 23, that tied the “Lick” persona to “more than $90 million in suspected illicit crypto activity” routed through a network of addresses associated with government‑linked wallets.​

As Hannah Collymore reports for Cryptopolitan.com, that up until two days ago, John Lick had avoided detection.

John 'Lick' Daghita’s flamboyant lifestyle outed him

He had over $20 million in crypto wallets.

However, things started to unravel when he got into a heated argument with another threat actor known as Dritan Kapplani Jr. in a group chat to see who had more funds in crypto wallets.

By the time the showoff session wrapped up, John had flaunted $23 million in total, moving the funds between wallets ZachXBT claims he clearly controls. 

2/ Earlier today John got into a heated argument with another threat actor known as Dritan Kapplani Jr. in a group chat to see who had more funds in crypto wallets.

In 'The Com' this is known as a band for band (b4b).

However the entire interaction was fully recorded.… pic.twitter.com/2XkdFCSNgz

— ZachXBT (@zachxbt) January 23, 2026

After that, Zach began tracing backwards to verify the source of funds and found that one of the wallets, the 0xc7a2 wallet, had previously received $24.9 million from a U.S. government wallet back in March 2024. 

That transaction was linked to funds the government seized in the Bitfinex hack, and Zach had already flagged that same address in a post from October 2024. Another wallet was linked, the 0xd8bc wallet, which goes back to $63 million obtained from sketchy wallets during Q4 2025. 

John just enjoys showing off

According to reports, it was only a matter of time before this happened, given how much John loves to show off. The Telegram account linked to him reportedly has a long history of bragging about his riches and brokeshaming people.

His username is tied to TG ID 8269661864. After he was outed by Zach, he allegedly wiped out his NFT usernames and quickly changed his screen name, but the damage was already done. 

Zach later revealed that there are rumors circulating in cybercrime Telegram circles indicating John could be John Daghitia, who had previously been arrested in September 2025. He did concede that more research was needed to fully confirm it. 

Since he made the link between John and his father, Zach claims the CMDSS company X account, website, & LinkedIn were all deactivated, and John Daghita (Lick) began trolling again on Telegram shortly after.

Update: The CMDSS company X account, website, & LinkedIn were all just deactivated pic.twitter.com/nvN6u5XMPq

— ZachXBT (@zachxbt) January 25, 2026

As Andrew Folkler reports for Crypto.news concludes, this is not the first issue faced by CMDSS.

Prior CMDSS scrutiny and systemic risk

CMDSS’s appointment already faced challenges when rival Wave Digital Assets filed a protest with the Government Accountability Office, arguing the firm lacked key registrations and warning of potential conflicts involving a former Marshals Service official, though the GAO later denied the protest.

Separately, a 2025 CoinDesk report found the Marshals Service struggled to reconcile its digital asset holdings, underscoring broader concerns around federal crypto custody as illicit addresses received a record “$154 billion in 2025,” up sharply year‑on‑year.

For now, there have been no public arrests or DOJ confirmations, but the onchain evidence has been making rounds across the Internet. Law enforcement could eventually intervene.

Tyler Durden Mon, 01/26/2026 - 11:10

Elon's X Overhaul: Muting Political Posts And Banishing 'Rage Bait'

Authored by Steve Watson via Modernity.news,

While Elon Musk is rightly credited for transforming X into a battleground for unfiltered truth, he dropped two bombshells this week that could significantly reshape the platform.

In a move that promises cleaner feeds but sparks fears of shadowy content policing, Musk revealed plans for topic-specific “For You” tabs free from “political rage bait” and an outright mute tool for all political posts. Critics are already sounding alarms over potential censorship creep.

Musk’s move comes as a direct response to some user gripes about X turning into a rage-fueled echo chamber. With immigration debates, election fallout, and globalist agendas dominating timelines, Musk’s tweaks aim to let users opt out of the frenzy. But in an era where Big Tech has a history of silencing conservative voices, the big question looms: who defines “rage bait,” and does this undermine the free speech haven Musk vowed to build?

The @xAI team is working on providing For You tabs that are specific to topics.

For example, a “For You AI” that is focused only on artificial intelligence with no political rage bait.

This would be like automatically generated follow lists with content ranked by quality.

— Elon Musk (@elonmusk) January 24, 2026

Musk first teased the changes in a post on Saturday, explaining that his xAI team is crafting specialized “For You” tabs. “The @xAI team is working on providing For You tabs that are specific to topics,” he wrote. As an example, he pointed to a “For You AI” tab “focused only on artificial intelligence with no political rage bait.” He likened it to “automatically generated follow lists with content ranked by quality.”

Then, on Sunday, Musk doubled down in response to a frustrated user complaining about the app’s political overload. The user lamented, “bro how do i mute all political posts on this app holy hell it has turned into reddit.”

Musk’s reply was straightforward: “I agree. Working on it.” This suggests a broader tool to blanket-mute political content across the platform, not just in curated tabs.

I agree. Working on it.

— Elon Musk (@elonmusk) January 25, 2026

Replies to Musk’s announcements highlight the divide.

Supporters cheered the move, with one user saying it would help “normal posts that never get seen” rise above the din.

Others, however, blasted it as a step toward echo chambers. “Yes let’s put people into echo chambers and make sure they can’t see what’s going on so it can continue….silence is complicity,” fired back one critic in the thread.

Skeptics point to Musk’s own feed, often laced with pointed commentary on issues like unchecked immigration and government overreach.

“You literally post political rage bait all day and night,” quipped another responder. If the boss sets the tone, how fair will the filtering be?

These updates may aim to “enhance content quality” by shifting from a one-size-fits-all algorithm to personalized, high-signal feeds. The move aligns with Musk’s push against legacy media’s stranglehold, but it echoes past Big Tech controversies where “quality” often meant suppressing dissenting views on topics like election integrity or vaccine mandates.

At its core, X under Musk has been a win for free speech and truth—exposing media hypocrisy, amplifying anti-globalist narratives, and giving a platform to those shut out by Silicon Valley elites. Yet this new direction raises red flags. If algorithms decide what’s “political” or “rage bait,” could conservative takes on border crises or woke indoctrination get flagged and blocked?

Musk has repeatedly championed free speech, vowing to make X a town square for all ideas. But tools like these could inadvertently—or intentionally—tilt the scales. Who programs the AI to spot “rage bait”?

True freedom means no gatekeepers, even well-intentioned ones. Muting and blocking posts of any nature risks creating just another filtered bubble, stifling the voices that need to be heard most.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Mon, 01/26/2026 - 10:55

Key Events This Week: Fed, Central Banks Galore, Earnings Avalanche

With the year still not yet four weeks old, it’s already been a constant firehose of news volatility, even as market volatility has remained relatively contained, DB's Jim Reid writes this morning. Consider: 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, 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". 

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, ZeroHedge broke news 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%, trading at ~154 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.

With all that in mind, let's take a look at the coming week. 

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.

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 this week totaling 32% of aggregate capitalization. Other tech highlights include ASML, Samsung, IBM and SAP. The focus will also be on defense 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.

Source: Earnings Whispers

Previewing Wednesday’s FOMC meeting, DB 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, emphasizing 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, 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 labor 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 labor market risks. Given the more balanced labor picture and the lack of discernible improvement on inflation, DB economists believe the Committee may drop its explicit reference to labor 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. 

Day-by-day calendar of events:

Monday January 26

• Data: US November and October Chicago Fed national activity index, November durable goods orders, January Dallas Fed manufacturing activity, Japan December PPI services, Germany January Ifo survey
• Central banks: ECB’s Nagel and Kocher speak
• Earnings: FANUC, Ryanair, Epiroc
• Auctions: US 2-yr Notes ($69bn)

Tuesday January 27

• Data: US January Conference Board consumer confidence index, Dallas Fed services activity, Richmond Fed manufacturing index, business conditions, November FHFA house price index, China December industrial profits, France January consumer confidence, EU27 December new car registrations
• Central banks: ECB’s Nagel speaks
• Earnings: LVMH, UnitedHealth, RTX, Boeing, Texas Instruments, NextEra Energy, Union Pacific, HCA Healthcare, Atlas Copco, Northrop Grumman, UPS, General Motors, Sandvik AB, Kimberly-Clark
• Auctions: US 5-yr Notes ($70bn)
• Other: the EU-India summit

Wednesday January 28

• Data: Germany February GfK consumer confidence, Italy January economic sentiment, Australia Q4 CPI
• Central banks: Fed’s decision, BoC’s decision, BoJ’s minutes of the December monetary policy meeting, ECB’s Elderson and Schnabel speak
• Earnings: Microsoft, Meta, Tesla, ASML, Lam Research, IBM, Amphenol, GE Vernova, Danaher, AT&T, ServiceNow, Starbucks, Advantest, General Dynamics, Corning, Volvo AB , Lonza, Kia, MSCI
• Auctions: US 2-yr FRN ($30bn)

Thursday January 29

• Data: US November trade balance, factory orders, wholesale trade sales, initial jobless claims, Japan January consumer confidence index, France Q4 total jobseekers, Italy November industrial sales, December hourly wages, Eurozone January economic confidence, December M3, Canada November international merchandise trade, Sweden Q4 GDP indicator
• Central banks: Riksbank decision, ECB’s Cipollone speaks
• Earnings: Apple, Visa, Samsung Electronics, Mastercard, SK hynix, Roche, Caterpillar, SAP, Thermo Fisher Scientific, KLA, Blackstone, Hitachi, Honeywell, ABB Ltd, Stryker, Lockheed Martin, Parker-Hannifin, Sanofi, Comcast, Altria, Keyence, ING, Lloyds Banking, Hyundai Motor, Sandisk, L3Harris Technologies, Norfolk Southern, Swedbank, Nokia, Givaudan
• Auctions: US 7-yr Notes ($44bn)

Friday January 30

• Data: Tokyo CPI, December jobless rate, job-to-applicant ratio, retail sales, industrial production, US December PPI, January MNI Chicago PMI, UK January Lloyds Business Barometer, December net consumer credit, M4, Japan December housing starts, Germany January CPI, unemployment claims rate, Q4 GDP, December import price index, France Q4 GDP, private sector payrolls, December consumer spending, PPI, Italy Q4 GDP, December unemployment rate, PPI, Eurozone Q4 GDP, December unemployment rate, Canada November GDP
• Central banks: Fed’s Musalem speaks, ECB December consumer expectations survey
• Earnings: Exxon Mobil, Chevron, American Express, Verizon, Sumitomo Mitsui, Regeneron, Colgate-Palmolive

Finally, looking at just the US, the key economic data releases this week are the durable goods report on Monday and the producer price index on Friday. The January FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM.

Monday, January 26 

• 08:30 AM Durable goods orders, November preliminary (GS +5.0%, consensus +4.0%, last -2.2%); Durable goods orders ex-transportation, November preliminary (GS +0.3%, consensus +0.3%, last +0.1%); Core capital goods orders, November preliminary (GS +0.3%, consensus +0.3%, last +0.5%); Core capital goods shipments, November preliminary (GS +0.4%, consensus +0.2%, last +0.8%): We estimate that durable goods orders rebounded 5% in the preliminary November report (month-over-month, seasonally adjusted), reflecting an increase in commercial aircraft orders. We forecast a 0.3% increase in core capital goods orders and a 0.4% increase in core capital goods shipments—the latter reflecting the increase in orders in the prior month.

Tuesday, January 27 

• 09:00 AM S&P Case-Shiller home price index, November (GS +0.2%, consensus +0.2%, last +0.3%) 
• 10:00 AM Conference Board consumer confidence, January (GS 90.5, consensus 90.0, last 89.1)

Wednesday, January 28 

• There are no major data releases scheduled. 
• 02:00 PM FOMC statement, January 27-28 meeting: As discussed in our FOMC preview, this January meeting is likely to be uneventful, with no change to the fed funds rate, only minor changes to the statement, and few hints about the future policy path. Chair Powell is likely to emphasize that the FOMC has just delivered three cuts that should help to stabilize the labor market and is well positioned for now while it assesses their impact.

Thursday, January 29 

• 08:30 AM Nonfarm productivity, Q3 final (GS +4.9%, consensus +4.9%, last +4.9%); Unit labor costs, Q3 final (GS -1.9%, consensus -1.9%, last -1.9%)
• 08:30 AM Initial jobless claims, week ended January 24 (GS 200k, consensus 205k, last 200k); Continuing jobless claims, week ended January 17 (consensus 1,850k, last 1,849k)
• 08:30 AM Trade balance, November (GS -$37.0bn, consensus -$44.2bn, last -$29.4bn); We forecast that the US trade deficit widened by $7.6bn to $37.0bn in November, reflecting a decline in gold exports and an increase in imports of computers and electronic products from Taiwan.
• 10:00 AM Factory orders, November (GS +2.4%, consensus +1.6%, last -1.3%)

Friday, January 30 

• 08:30 AM PPI final demand, December (GS +0.2%, consensus +0.2%, last +0.2%); PPI ex-food and energy, December (GS +0.2%, consensus +0.3%, last flat); PPI ex-food, energy, and trade, December (GS +0.3%, consensus +0.2%, last +0.2%)

Source: DB, Goldman

Tyler Durden Mon, 01/26/2026 - 10:45

BlackRock Credit Fund Hit With 19% Markdown As Loans Go Bad

BlackRock TCP Capital Corp., a publicly traded private-credit fund structured as a business development company, filed an 8-K with the SEC late Friday afternoon, disclosing a 19% markdown in net asset value as troubled loans weighed on performance. The move marks one of the first major private credit signal woes of the new year.

The credit fund told investors in the 8-K filing that NAV fell from $8.71 as of Sept. 30 to $7.05 to $7.09, or about a 19% markdown.

"This decline is primarily driven by issuer-specific developments during the quarter," the fund said.

For a simpler translation: borrower-level stress intensified, loans deteriorated, and expected recovery values collapsed.

According to Bloomberg, the credit fund "has struggled in part because of its exposure to e-commerce aggregators — companies that buy and manage Amazon.com Inc. sellers — as well as troubled home improvement company Renovo Home Partners, which has filed for bankruptcy with plans to liquidate."

A TCPC fact sheet published Sept. 30 shows the fund holds 83% first-lien exposure across software, internet software and services, financial services, and other professional services.

Analyst coverage of TCPC is overwhelmingly negative.

There are zero "buy" recommendations among analysts tracked by Bloomberg, with three "hold" ratings and one "sell." The average 12-month price target stands at $6.50.

Shares of TCPC dropped 8.2% in after-hours trading on Friday following the filing.

Over a longer timeframe, the stock has slid back to COVID-era lows and remains locked in a multi-year bear market.

We've been closely tracking private credit markets, observing bumps along the way, to determine whether the cycle is beginning to show early signs of systemic risk or simply reflecting a normal credit downturn. While credit conditions have remained benign for an extended period, several emerging warning signs have begun to surface, which we have highlighted:

• "There's No Emergency Here": Blue Owl CEO Says As Private Credit Provider Abandons Merger Plan

• We're "At The Beginning Of The Credit Destruction Cycle"; Ed Dowd Warns

• Regional Banks Crash As More Credit "Cockroaches" Emerge

As a reminder, last fall, JPMorgan's Jamie Dimon warned, "When you see one cockroach, there are probably more."

However, not everyone sees a crisis coming, despite the surge in supply.

We recently quoted Jeff Eason, Head of IG Credit at Citadel Securities, who says the market is in the early stages of a robust Capital Markets cycle, driven by Credit Expansion, fueling two themes:

1. M&A activity and broad corporate re-leveraging and

2. Growth in AI CapEx with debt usage becoming necessary/attractive to fund the mega cycle.

Jeffrey Gundlach has recently called out private lenders for making "garbage loans" and warned the next financial crisis will be in private credit.

Moody's Analytics chief economist Mark Zandi told CNBC that private credit is "lightly regulated, less transparent, opaque, and it's growing really fast, which doesn't necessarily mean there's a problem in the financial system, but it is a necessary condition for one."

The rumblings in private credit raise deeper questions about the soundness of the broader financial system and whether the Trump economy, with incoming tailwinds from data-center, power grid buildouts, and re-manufacturing trends, can withstand potential stress in credit markets.

Tyler Durden Mon, 01/26/2026 - 10:25

"The Discombobulator": Trump Admits Secret Weapon Used In US Operation To Capture Maduro

Authored by Aldgra Fredly via The Epoch Times,

President Donald Trump has revealed that U.S. forces used a secret weapon to disable Venezuelan military equipment in the Jan. 3 operation that resulted in the arrest of Venezuelan leader Nicolás Maduro.

“The Discombobulator. I’m not allowed to talk about it,” Trump said in an interview with the New York Post published on Jan. 24.

Trump said the weapon disabled Venezuelan equipment during the operation, enabling U.S. forces to capture Maduro and his wife, Cilia Flores, from their residence in Venezuela’s capital, Caracas.

“They never got their rockets off. They had Russian and Chinese rockets, and they never got one off. We came in, they pressed buttons, and nothing worked. They were all set for us,” he said.

The president did not explain how the weapon worked or how it was deployed.

This comment from the president fits with the alleged eye-witness account, as we previously posted:

Security Guard: At one point, they launched something—I don't know how to describe it... it was like a very intense sound wave. Suddenly I felt like my head was exploding from the inside. We all started bleeding from the nose. Some were vomiting blood. We fell to the ground, unable to move.

In a Fox News interview aired on Jan. 3, Trump said the special operations forces who conducted the raid “rehearsed and practiced like nobody’s ever seen,” and had built a model version of the location they operated in. He said Maduro “was in a house that was more like a fortress than a house.”

“It had steel doors. It had what they call the safety space, where it’s, you know, solid steel all around,” Trump told the news outlet.

“He didn’t get that space closed. He was trying to get into it, but he got bum rushed so fast that he didn’t get into that. We were prepared.”

At least 32 Cuban officers deployed to assist Maduro in Venezuela were killed in the U.S. attack, according to the Cuban government, which has denounced the operation.

U.S. Secretary of State Marco Rubio said on Jan. 4 that Maduro’s internal security apparatus was “entirely controlled by Cubans.”

“The ones who have sort of colonized, at least inside the regime, are Cubans. It was Cubans who guarded Maduro. He was not guarded by Venezuelan bodyguards,” Rubio said.

Following Maduro’s ouster, Venezuelan Vice President Delcy Rodríguez was appointed interim leader by Venezuela’s Supreme Court and was sworn in on Jan. 5.

Trump warned Rodríguez after the U.S. operation that her fate could be worse than Maduro’s—who is facing drug and arms-related charges in the United States—if she fails to “do what’s right.”

Venezuela’s interim government has freed hundreds of political detainees to demonstrate its “broad intention to seek peace,” with more than 100 political detainees released on Jan. 25, according to Alfredo Romero, director of Caracas-based advocacy group Foro Penal.

Maduro and his wife pleaded not guilty to all U.S. charges on Jan. 5.

Tyler Durden Mon, 01/26/2026 - 10:05

Carney Cracks: Canada Has 'No Intention' Of Pursuing Free Trade Deal With China After Trump Threatens 100% Tariffs

Canadian Prime Minister Mark Carney says Canada has "no intention" of pursuing a free trade deal with China, after Donald Trump threatened to slap a 100% tariff on Canadian exports if Ottawa "makes a deal" with Beijing. 

Prime Minister Mark Carney of Canada at a news conference in Quebec City last Thursday (Mathieu Belanger/Reuters)

To review: right before Davos, Canadian Prime Minister Mark Carney returned from a trip to Beijing and announced a new 5-point 'strategic partnership' to 'diversify our trade partnerships.' The agreements included slashing tariffs on Chinese EV imports from 100 percent to 6.1 percent for the first 49,000 units, in exchange for China cutting tariffs on Canadian canola from 85 percent to 15 percent until at least the end of the year. Other exports, including Canadian canola meal, lobsters, crabs, and peas will also not be subject to Chinese anti-discrimination tariffs until at least the end of 2026. 

(Denis Balibouse/Reuters)

A week later, Carney told the global elite at Davos resort that the "rules-based order" established by the United States and its allies following WW2 was fraying amid the current rivalry between China and America, so the "middle powers must act together because if we're not on the table, we're on the menu." 

Carney said that for their survival, nations should no longer “go along to get along” with Trump.

This flew up Donald Trump's ass sideways, who issued a response on Truth Social Saturday:

“If Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken. China will eat Canada alive, completely devour it, including the destruction of their businesses, social fabric, and general way of life,” Trump said in a post on Truth Social on the morning of Jan. 24.

“If Canada makes a deal with China, it will immediately be hit with a 100% Tariff against all Canadian goods and products coming into the U.S.A. Thank you for your attention to this matter!”

Trump’s reference to Canadian Prime Minister Mark Carney as “Governor” marks a return to the relations the U.S. president had with Carney’s predecessor, former Prime Minister Justin Trudeau, using the title to reflect his view that Canada should be part of the United States.

Meanwhile, on the sidelines of the WEF, Trump said that "Canada gets a lot of freebies from us. By the way, they should be grateful also, but they’re not,” adding, "Canada lives because of the United States. Remember that, Mark, the next time you make your statements."

Treasury Secretary Scott Bessent echoed Trump's comments on Sunday, telling ABC News that America could not "let Canada become an opening that the Chinese pour their cheap goods into the U.S."

Carney 'Clarifies'

So on Sunday, Carney told reporters that Canada respects its obligations under the Canada-US-Mexico trade agreement (CUSMA / USMCA), and will not pursue a free trade agreement without notifying the other two parties. 

"What we have done with China is to rectify some issues that have developed in the last couple of years,” adding that the deal was “entirely consistent with CUSMA," he said. 

Trump notably raised tariffs on Canadian goods from 25% to 35% in August 2025. 

Tyler Durden Mon, 01/26/2026 - 09:45

Minnesota Business Owner Claims ICE Will Start 'Putting People In Ovens'

Authored by Steve Watson via Modernity.news,

An unhinged leftist business owner from Minnesota told CNN’s Jake Tapper that there is no question ICE is running “concentration camps” and that federal officers could start “putting people in ovens” soon.

Tapper was platforming the deranged lunatic as a smattering of leftist-leaning shops in the city have shuttered their doors in “solidarity” against basic immigration enforcement, painting law-abiding agents as invaders while conveniently ignoring the chaos of open borders.

Jamie Schwesnedl, co-owner of Moon Palace Books in Minneapolis was there to explain why his business had closed for the day in protest against ICE operations, yet Tapper was provided a peak under that veneer and into the world of TDS radicalism.

“We can’t do business as usual right now, anyway, because our city has been invaded by masked gunmen kidnapping family members and friends and neighbors of ours to send them to concentration camps,” Schwesnedl proclaimed.

He added, “Additionally, there’s a lot of businesses in our area that have staff or customers or owners who are afraid to come to work, afraid to come in and shop. People are closing down today, and we felt like it wouldn’t be kind or fair for us to stay open, so we’re closing in solidarity to help send a message.”

This over-the-top rhetoric frames ICE agents – who are simply doing their job to enforce laws passed by Congress – as some kind of Nazi militia. It’s a classic leftist tactic: demonize border control to keep the floodgates open, even as communities suffer from the fallout of Biden-era lax policies that invited millions across unchecked.

Things escalated when Schwesnedl doubled down on his terminology, prompting Tapper to interject.

The CNN host, known for his establishment leanings, surprisingly pushed back, stating “Just one note, I’m not here to defend ICE, but I’m not a big fan of people using the term ‘concentration camp’ to describe detention camps. That has a very specific meaning.”

Schwesnedl wasn’t deterred. He fired back with historical references twisted to fit his narrative.

“I understand that, but they take people to Fort Snelling here, which literally was built as a concentration camp, and Alligator Alcatraz, which I think we can all agree is a concentration camp,” he replied.

Then came the kicker.

“I’m not saying they’re Dachau. I’m not saying they’re putting people in ovens — yet — but these are concentration camps. I don’t need to argue with you about that.”

That “— yet —” slips in like a Freudian admission, hinting at the wild conspiracy theories bubbling under the surface of anti-ICE activism. It’s not just exaggeration; it’s a deliberate smear against efforts to secure the nation, echoing the same hysteria that labeled Trump-era policies as “fascist” while ignoring the human trafficking and fentanyl crises fueled by porous borders.

For context, ICE detention facilities are civil holding centers for noncitizens caught illegally in the U.S., awaiting due process or deportation. They’re a far cry from the historical concentration camps Schwesnedl invokes, like those under Nazi Germany, which were instruments of genocide. Fort Snelling, a 19th-century military site in Minnesota, has a complex history including internment of Native Americans, but equating it to modern ICE ops is a stretch designed to inflame rather than inform.

The remarks underscore how these protests rely on emotional hyperbole over facts. In addition, the store closures involved only a “handful” of businesses, hardly a mass uprising, hardly worth even mentioning, yet CNN amplifies it as if it’s a national crisis.

Tapper’s stunned reaction highlights a rare crack in the media facade: even CNN hosts balk at rhetoric that veers into Holocaust trivialization. But Schwesnedl’s refusal to back down shows the depths of progressive entitlement, where enforcing borders is akin to invasion, and detaining lawbreakers is oppression.

It’s the perfect snapshot of leftist media propagandists and TDS activists spiraling as America First policies finally bite back against unchecked migration. Instead of addressing real community threats like crime waves tied to illegal entries, they’re equating detentions to historical atrocities – all to stir fear and undermine border security.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Mon, 01/26/2026 - 09:25

Nvidia Ramps Up CoreWeave Investment, Another $2 Billion To Accelerate AI Factories Buildout

Nvidia increased its investment in CoreWeave to accelerate the buildout of AI factories, adding more than 5 gigawatts of AI computing capacity by 2030. This builds on an existing agreement under which Nvidia has committed to buy more than $6 billion in services from the firm through 2032. 

"Demand for AI continues to grow exponentially and the need for compute has never been greater. To help meet this demand, NVIDIA and CoreWeave are deepening their infrastructure, software, and platform alignment," CoreWeave wrote in a press release.

The new deal involves Nvidia purchasing $2 billion of CoreWeave Class A common stock at $87.20 per share.

Here's what the expanded Nvidia-CoreWeave collaboration means:

• Build AI factories developed and operated by CoreWeave using NVIDIA's leading accelerated computing platform technology to meet customer demand.

• Leverage NVIDIA's financial strength to accelerate CoreWeave's procurement of land, power and shell to build AI factories.

• Test and validate CoreWeave's AI-native software and reference architecture, including SUNK and CoreWeave Mission Control, to unlock deeper interoperability and work towards including those offerings within NVIDIA's reference architectures for NVIDIA's cloud partners and enterprise customers.

• Deploy multiple generations of NVIDIA infrastructure across CoreWeave's platform through early adoption of NVIDIA computing architectures, including the Rubin platform, Vera CPUs and Bluefield storage systems

Nvidia CEO Jensen Huang commented, "AI is entering its next frontier and driving the largest infrastructure buildout in human history."

Jensen added, "CoreWeave's deep AI factory expertise, platform software, and unmatched execution velocity are recognized across the industry. Together, we're racing to meet extraordinary demand for NVIDIA AI factories - the foundation of the AI industrial revolution."

The collaboration builds on CoreWeave's purpose-built cloud, which enables customers to run AI workloads more efficiently and at scale.

CoreWeave CEO Mike Intrator said in a Bloomberg interview that Nvidia funding accounts for about 2% of what his company plans to spend on new infrastructure. "This year, we're going to deliver an enormous amount of infrastructure, and that's just going to accelerate over the next three years," he said.

CoreWeave shares in premarket trading were up nearly 10%, while Nvidia shares were marginally lower.

All of this echoes the circular AI "circle jerk" deals that we pointed out last fall and has only helped propel the AI bubble.

Tyler Durden Mon, 01/26/2026 - 09:10

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

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

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