Japanese Yields Soar To All Time High After PM Takaichi Calls Snap Election Seeking More Spending, Less Taxes

In the rapidly approaching endgame for Japan's monetary experiment, overnight Japanese bond yields hit new record highs, with the long end surging as much as 10bps...

... which in turn helped send gold to fresh record highs above $4,600 (as we discussed previously)...

... after Prime Minister Sanae Takaichi said she will call a national election on February 8 to seek voter backing for everything that guarantees a bond market collapse, namely increased spending, tax cuts and a new security strategy that is expected to accelerate a defence build-up. 

According to Reuters, Takaichi plans to dissolve parliament on Friday ahead of the snap vote for all 465 seats in the lower house of parliament, in her first electoral test since becoming Japan's first female premier in October.

"I am staking my own political future as prime minister on this election," Takaichi told a press conference on Monday. "I want the public to judge directly whether they will entrust me with the management of the nation."

Of course, that's not the story at all: she is promising more spending and less taxes, so of course she will get what she wants from the free shit army. The question is what happens when Japanese bond yields rise so high the country can no longer pretend it isn't facing the biggest bond crisis in history.

Takaichi has promised a two-year halt to a consumption tax of 8% on food, adding that her spending plans would create jobs, boost household spending and increase other tax revenues. And all for the low, low price of another 10-20% in debt/GDP.

Sure enough, the prospect of such a tax cut, which the government estimates would reduce its revenue by 5 trillion yen ($32 billion) a year, sent the yield on Japan's 10-year government bonds to a 27-year high earlier on Monday.

Calling an early election allows Takaichi to cement her political role and capitalize on strong public support to tighten her grip on the ruling Liberal Democratic Party and shore up her coalition’s fragile majority. The election will test voter appetite for higher spending - i.e., more handouts - at a time when the rising cost of living is the public's top concern. Then again, Takaichi can just blame the BOJ for not raising rates enough. 

Having dealt with deflation for nearly 40 years, runaway prices are a new concept for Japan, yet that's precisely where the country is right now: prices are the main worry of 45% of the respondents in a poll released by public broadcaster NHK last week, followed by diplomacy and national security at 16%.

Making sure inflation rises even more, Takaichi's administration plans a new national security strategy this year after deciding to hasten a military build-up that will lift defence spending to 2% of GDP, a sharp break from decades in which Japan capped such outlays at around 1%. Translation: even more spending and even more debt monetization by the BOJ.

Takaichi has not set a new spending target beyond that level, but rising tension with China over Taiwan and disputed islands in the East China Sea, coupled with U.S. pressure for allies to spend more, are likely to push defence outlays higher. Last week, China banned exports of items destined for Japan's military that have civilian and military uses, including some critical minerals.

"China has conducted military exercises around Taiwan, and economic coercion is increasingly being used through control of key supply-chain materials," she said. "The international security environment is becoming more severe."

The LDP and Ishin go into the Feb 8 election, which coincides with a planned national election in Thailand, with a combined 233 seats. Takaichi said her target was for the coalition to retain its majority in the lower chamber.

Her main challenger will be the Centrist Reform Alliance, a new political party combining the largest opposition group, the Constitutional Democratic Party of Japan and Komeito, which ended its 26-year coalition with the LDP after Takaichi, a right-wing lawmaker, took over at the LDP. Together the parties hold 172 seats.

That new political group could propose to permanently abolish the 8% sales tax on food, a party official said earlier in the day. 

"Now may be the best chance she has at taking advantage of this extraordinary popularity," said Jeffrey Hall, a lecturer in Japanese studies at Kanda University of International Studies. But with opposition parties joining forces to oppose her, victory might not be straightforward, he added.

In any case, don't expect any major changes in Japan's political facade. Meanwhile the yen is trading near an all time low against the USD, and against that other export-focused currency, China's yuan...

... which in turn is keeping Japan's economy afloat, by pushing the price of its exports artificially lower. Still, at some point the BOJ will have to make a choice: contain inflation (and send the yen surging), or watch the world's second largest bond market (of which 60% of is held by the BOJ), disintegrate. 

Tyler Durden Mon, 01/19/2026 - 12:35

Mr. Trump Goes To Davos...

Authored by James Howard Kunstler,

Monsters Of The Deep

"Timing, not haste, drives what will happen next."

- Thomas Sowell

Minneapolis, the sucking chest wound on America’s body politic, gets a break this week from Gawda’mighty, who is turning the heat down to subzero so that ICE-Watch nose-rings can hole-up in their Soros-paid motels, play League of Legends with their DoorDashed Chick-fil-A nuggets, and rest up for the next inning of their motley revolution. ICE itself might even have to lay off its daily round-up of rapists, cut-throats, and child-molesters, to wait out the cold-snap.

Meanwhile, things elsewhere roughen up a little.

For instance: Davos, Switzerland, where the World Economic Forum (WEF) holds its annual jamboree of vampire squids. Klaus Schwab is out, by the way. He skulked off in a malodorous cloud of embezzlement and sexual irregularities, to be replaced by Larry Fink, CEO of BlackRock, the hedge fund that owns everything in the USA and wants more.

Larry Fink is living proof of the banality of evil, an early pioneer of mortgage-backed securities, which nearly blew up the global banking system in 2008-09, after which he pioneered the wholesale purchasing of foreclosed houses by hedge funds. Neat trick. Cornered the market on all the inventory, so, now, nobody under age-fifty in America can afford to buy a house — but you can rent one from BlackRock!

Larry Fink of BlackRock and the World Economic Forum

Larry Fink landed as interim head of the WEF largely because BlackRock has been espousing Klaus Schwab’s ideas about “Stakeholder Capitalism,” which allows global corporations to pretend that they have beneficent “societal purpose” while they go about ass-raping the common folk of Western Civ. Climate change and green new deals top that agenda, along with diversity, equity, and inclusion and additional bullshit about “environment, social, and governance factors” (ESG) in its global strategies portfolio — meaning, mandates for exactly the kind of policies that are destroying Europe’s economies, de-industrialization foremost.

Among the invited speakers at Davos this year: one US President Donald Trump. He is going to kill them with kindness, a tongue-bath of Trumpian compliments — you are the greatest. . . beautiful leaders like the world has never seen before — while he artfully inserts a stiletto in the WEF’s liver. You might not even know that the org is a walking corpse until a few weeks after the Davos meeting shuts down. But Mr. Trump is going to terminate its influence and send a message that the era of globalist shenanigans is over.

The president can point to two demonstration projects.

First, the USA’s acquisition of Greenland one way or another, either ownership or some leasing agreement or revised treaty arrangement. You can be sure that the EU does not like that — big bully America picking on cuddly little Denmark, “the world’s happiest country.” But since they are happily oblivious to Greenland’s strategic importance (vis-a-vis China’s nefarious ambitions there) it is up to America to prepare the game-board. The art of the deal, of course, is making it fait accompli before the targeted property-owner has even entered the discussion. How that works will be a painful discovery for the walking dead Davosanistas.

The second demo will be how the recent arrest of Nicolás Maduro leads to revelations of the globalist conspiracy to interfere in elections here, there, and everywhere. Señor Maduro sold his Smartmatic system to all comers, and you can bet that the plea bargain talks are already underway in Brooklyn (if not already concluded). Yes, it is our old friend, the Kraken, which is a related species of giant squid to the vampire variety convened in Davos.

The Kraken breeches...

This election fraud business is really consequential. It redounds to the criminality of the Democratic Party that had the impudence to jam an enfeebled marionette, “Joe Biden,” into the Oval Office, allowing a treasonous cabal of nihilists to nearly wreck the country. The massive evidence of that crime was clumsily suppressed by the cabal and its allies in the news business.

But it is surfacing again, now with Señor Maduro’s imprimatur, and it will turn into a force five storm off the coast of Florida as grand juries in Fort Pierce and Fort Lauderdale were empaneled a week ago to consider the myriad lawless operations mounted against Mr. Trump since 2015, including election fraud. The lawless are going to be rounded up, from Raffensperger in Georgia, to Katie Hobbs in Arizona, to Jocelyn Benson in Michigan, to Jena Griswold in Colorado, to dozens of other officials who were in on the big vote switcheroo of Nov. 3, 2020.

And when the revelations finally come, it will be too much for the foot-dragging villains in the US Senate to continue resisting — they will have to pass the SAVE Act or some legislation like it that requires voter ID, one election day, and paper ballots counted by humans, not machines.

It remains to be seen whether the Democratic Party goes extinct because of its exposed, widespread criminality, or because it simply can’t win an election without massive ballot fraud.

Tyler Durden Mon, 01/19/2026 - 12:10

 

 

I really enjoyed sitting down with Paula Pant to discuss HNTI:

“Why do smart, well intentioned investors still make costly mistakes?

In this episode, I sit down with Barry Ritholtz to explore why investing success has less to do with intelligence and more to do with behavior. Barry explains how bad ideas, bad numbers, and bad habits quietly derail portfolios, even for people who know better.

We talk about how to think probabilistically instead of emotionally, why markets do not crash on a schedule, and what actually brings bull markets to an end. We also dig into the limits of forecasting, how to evaluate market commentary without getting swept up in hype, and where artificial intelligence truly fits into modern investing.

This conversation is not about predicting the next crash or chasing the next trend. It’s about building a decision-making process that works across uncertainty, volatility, and long time horizons.”

 

You can find the conversation on YouTube, Spotify, Apple Podcasts.

 

 

Source:
How NOT to Invest, with Barry Ritholtz
By Paula Pant
Afford Anything, January 16, 2026

 

 

 

The post Why Smart Investors Still Lose Money appeared first on The Big Picture.

Where The Department of Energy Is Investing

Submitted by Tight Spreads

The DOE has been flooding their sites with white-papers and latest Fusion Science and Technology Roadmap (FS&T Roadmap) are not just a scientific plan, but an industrial policy designed to transition fusion from the laboratory to the commercial market by the mid-2030s. The DOE has prioritized its actions to align with the aggressive “fast-track” development cycles of nuclear fission and fusion companies:

Near-Term (Next 2-3 Years): Digitalization & Infrastructure Prep

• AI-Fusion Convergence: Launch the AI-Fusion Digital Convergence Platform to use machine learning to speed up materials discovery and predict plasma behavior.

• Infrastructure Start: Build small-to-medium test facilities and complete the design for large-scale “First-of-a-Kind” (FOAK) facilities.

• Regulatory Frameworks: Finalize licensing and safety standards to give investors, consumers, and citizens alike certainty on how these plants will be regulated.

Mid-Term (3-5 Years): Prototype Integration

• Pilot Plant Construction: Support the private sector in constructing the first fusion pilot plants (FPPs).

• Fuel & Materials Testing: Delivery of integration platforms for testing tritium fuel cycles and materials under intense radiation.

• Supply Chain Seeding: Support domestic manufacturing for high-heat components and superconducting magnets.

Long-Term (5-10 Years): Grid Delivery & Scale-Up

• Commercial Operation: The first fleet of pilot plants begins delivering power to the grid.

• Commercial Maturity: Expand public infrastructure to support a global market, focusing on lowering the levelized cost of energy to make fusion competitive with other generation technologies today.

The Six Core Technical Challenge Areas

These are the gaps the DOE is prioritizing through its public research budget to ensure relevant companies succeed.

1. Structural Materials: Developing metals that won’t become brittle or weak after years of intense neutron bombardment. Metals such as Reduced Activation Ferritic Martensitic (RAFM) steels can withstand intense neutron damage without swelling or becoming brittle.

2. Plasma-Facing Components (PFCs): Creating “first walls” that can survive heat fluxes equivalent to the surface of the sun.

3. Confinement Systems: Optimizing magnets and lasers to hold the superheated fuel stable for long periods. Relevant companies: BRKR, COHR

4. Fuel Cycle & Tritium Processing: Establishing a closed loop fuel system to breed, recover, and recycle tritium fuel, as it is extremely scarce in nature. Relevant companies: OKLO, ASPI, BWXT

5. Blankets: Engineering the wrapper around the reactor that captures heat for electricity and breeds the fuel.

6. Plant Engineering & Integration: Linking a fusion reactor to standard turbines and maintenance via robotics. Relevant companies: NVDA, IBM

The Future of Energy: Understanding the Mechanics of Fusion

To grasp the next frontier of the energy transition, we need to distinguish between the nuclear power we use today and the “holy grail” of energy: Nuclear Fusion. Nuclear fusion is the process of combining two light atomic nuclei to form a single, heavier nucleus. This process releases a massive amount of energy as it typically uses two hydrogen isotopes for fuel: Deuterium and Tritium (D-T fuel). Nuclear Fission is the splitting of heavy atoms, such as the current method of commercial nuclear power plants with Uranium.

What is Plasma?

We are typically taught that there are three states of matter: solid, liquid, and gas. Plasma is the fourth state, and it is the most common form of matter in the visible universe. Plasma is created when a gas is heated to such extreme temperatures that the electrons are stripped away from their parent atoms. This results in an “ionized” gas—a hot, soup-like mixture of free-moving positively charged nuclei (ions) and negatively charged electrons. It is highly conductive and can be manipulated and shaped by magnetic fields. This characteristic is the lynchpin of modern fusion reactor design.

Plasma in a fusion fusion reactor:

Plasma’s Significance in a Fusion Reactor

In a fusion reactor, plasma is not just a byproduct; it is the reaction medium itself. It plays three critical roles toward enabling fusion energy:

• The Coulomb Barrier: Atomic nuclei are positively charged and naturally repel one another. To overcome this “Coulomb Barrier,” the fuel is heated into a plasma state, providing the extreme kinetic energy necessary for the nuclei to collide and fuse.

• Magnetic Confinement: Because no physical material can withstand fusion temperatures (upwards of 150 million degrees Celsius), the plasma must be suspended in mid-air. Scientists use the plasma’s electromagnetic properties to hold it in place using powerful superconducting magnets.

• Self-Sufficiency: The ultimate goal is to achieve a burning plasma. This is a self-sufficient state where the heat generated by the fusion reactions themselves maintains the required temperature, eliminating the need for external heating.

Plasma as a medium in a Tokamak Fusion Reactor:

The Role of Materials in Fusion Architectures

Structural materials form the physical vessel and internal supports of a fusion plant. Materials must withstand unprecedented neutron flux, high thermal loads, and corrosive environments while maintaining the precise vacuum required for plasma stability.

Materials that are prioritized include Reduced Activation Ferritic Martensitic (RAFM) steels and vanadium alloys. These are engineered to minimize long-lived radioactive waste, ensuring that the structural “backbone” of either machine doesn’t remain hazardous for centuries after the plant is decommissioned. Easily produced RAFM steels and vanadium alloys strategically provide supply chain independence, dual-use applications in defense and aerospace, and enable closed fuel cycles to enhance commercial viability.

Plasma-Facing Components (PFCs) & Interactions

PFCs are the “first wall” materials that directly interact with the 100-million-degree plasma. They must exhaust extreme heat without contaminating the reaction. Tungsten, a critical material for PFCs, is a key focus of domestic mineral security.

Layers of a fusion reactor:

Magnetic and Inertial Confinement Fusion

The DOE’s FS&T Roadmap follows a dual-track approach pursuing two distinct methods to contain fusion: Magnetic Confinement Fusion & Inertial Confinement Fusion.

Magnetic Confinement Fusion: This method utilizes High-Temperature Superconducting (HTS) magnets to create powerful magnetic “bottles.” These magnets suspend and stabilize the superheated plasma, preventing it from touching the reactor walls. There are two primary magnetic confinement architectures: Tokamaks and Stellarators:

• Tokamaks: These are doughnut-shaped devices that use a combination of external magnets and an internal electrical current flowing through the plasma to maintain stability.

• Stellarators: These use a complex, twisted ring of external coils to confine the plasma without needing an internal current. While more stable than Tokamaks, the geometry of a Stellarator is very intricate.

Companies that produce HTS magnets that make compact fusion possible:

• Bruker Corporation (NASDAQ: BRKR): Known for scientific instruments, BRKR additionally serves as a critical industrial partner to the DOE through its subsidiary Bruker Energy & Supercon Technologies (BEST). BEST is known for its the stewardship of HTS magnet technology engineering. In the pursuit of next-generation energy solutions, BRKR has been a critical supplier of advanced Niobium-Tin and High-Temperature Superconductor (HTS) conductors for several high-stakes DOE initiatives: fusion energy, accelerator upgrades, and NMR proving grounds (relevant for testing the accuracy of isotope purities).

Inertial Confinement Fusion: This approach takes a “pulsed” path, using high-energy lasers to rapidly compress tiny fuel pellets. This intense compression triggers a series of micro-explosions that ignite the plasma, creating a steady stream of energy production similar to the internal combustion of an engine.

Inertial fusion requires pulsed lasers of incredible power and precision. The companies that build the optical components and high-power diodes are the primary enablers:

• Coherent Corp. (NYSE: COHR): A critical business in this sector. Their LEAP excimer laser platform is actually used by REBCO manufacturers to deposit the superconducting layers onto the tape. Furthermore, they provide high-power diode lasers essential for pumping the large-scale lasers used in fusion experiments.
• Syntec Optics (NASDAQ: OPTX): A U.S.-based manufacturer of precision optics. They provide the specialized lenses and mirrors required for high-energy laser systems.

Inertial Confinement Fusion:

The race for fusion is one of the key drivers for the U.S. massive push to securitize a domestic rare earth and advanced materials supply chain. A primary driver is the production of HTS magnets, which rely on Rare-Earth Barium Copper Oxide (REBCO). These specialized materials allow for more compact and efficient fusion reactors, but their utility extends far beyond energy; REBCO technology is also essential for next-generation MRI machines and high-speed maglev rail systems.

The Fuel Cycle & Tritium Breeding

The DOE is pursuing a “closed-loop” fuel cycle where fusion and fast reactors breed their own tritium fuel using lithium-containing blankets. Because tritium is rare and radioactive, the FS&T Roadmap emphasizes advanced accountancy and Direct Internal Recycling to minimize inventory. The DOE is prioritizing Tritium as a vital material for the U.S. nuclear stockpile, critical for national defense and nonproliferation. Establishing a domestic supply of light isotopes—specifically Lithium-6, Tritium, and Deuterium for fusion breeding and fuel—ensures that the U.S. does not depend on international sources for its most critical nuclear assets.

Companies that are produce light isotopes and/or have breeder reactor capabilities include:

ASP Isotopes (ASPI): ASPI hopes to contribute to Li-6 supply in 2026/2027, as mentioned in their shareholder letter from September of 2025:

“There is a considerable amount of customer demand for HALEU, as well as Lithium-6 and Lithium-7. We expect to have the first Lithium-6 plant operational during 2026, subject to the timely receipt of all required permits and licenses.”

BWXT & The Tennessee Valley Authority (TVA): As of late 2025, TVA has emerged as the primary “Tritium Hub.” Leveraging their experience producing Tritium for the nuclear stockpile at Watts Bar, TVA is exploring the use of the BWRX-300 SMR to host Tritium-Producing Burnable Absorber Rods. By replacing standard neutron absorbers with lithium-based rods, these SMRs can “harvest” Tritium as a byproduct of normal electricity generation.

Oklo (Aurora Powerhouse and Atomic Alchemy): While Oklo’s primary Aurora powerhouse is a fast fission reactor capable of breeding tritium, its radioisotope pilot facility and VIPR technology have capabilities inclusive of producing specialized the “light isotopes” used in the breeder blanket and fuel. As of early 2026, Oklo’s subsidiary, Atomic Alchemy, has transitioned into active execution under a DOE Other Transaction Agreement (OTA) to fast track their radioisotope business and production.

TerraPower (Natrium): As a similar reactor design to the Aurora Powerhouse, the Natrium reactor is an ideal candidate for isotope production. Fast reactors can irradiate lithium targets, potentially producing Tritium at a much higher rate than traditional light-water reactors.

Holtec (SMR-300): Holtec has positioned its SMR as a multipurpose tool. Their recent filings suggest that their reactors at the Palisades site could be configured with specialized “target” assemblies to produce various isotopes, including Tritium, for both commercial fusion and medical use.

Blanket Science and Technology

The blanket of a reactor in the latest FS&T Roadmap has been reimagined as the “Energy Engine” of the fusion power plant. While the plasma provides the environment for the reaction, the blanket is the critical interface where that reaction is converted into tangible products: usable heat for the electrical grid and essential fuel for the reactor’s continued operation. This massive component surrounds the fusion core and serves three non-negotiable functions:

1. It facilitates energy conversion by capturing high-energy neutrons—which carry approximately 80% of the fusion energy—and converting their kinetic energy into thermal heat.

2. It enables tritium breeding by using those same neutrons to strike lithium-6 atoms, transmuting them into Tritium.

3. It acts as a radiation shield, protecting delicate superconducting magnets and exterior plant components from intense neutron flux to ensure structural longevity.

One of the most significant strategic shifts in the 2025 Roadmap is the explicit move to leverage advanced fission R&D to accelerate these fusion milestones. The molten salts used in fusion blankets are nearly identical to the coolants required for Generation-IV Fission Molten Salt Reactors. By aligning these technologies, the DOE is creating a unified domestic supply chain where purification systems, high-temperature pumps, and specialized alloys developed for advanced fission can be utilized directly in the fusion sector.

Plant Engineering & Systems Integration

This challenge focuses on the Balance of Plant (BOP)—the turbines, heat exchangers, and robotic maintenance systems that turn a “fusion engine” into a grid-ready power plant. The priority is reliability, availability, maintainability, and inspectability. Here, the AI-fusion digital convergence becomes the primary tool. AI-enabled “Digital Twins” will manage the plant’s complex systems in real-time, just as they optimize hyperscale data centers today. This creates a massive opportunity for the AI ecosystem; companies like NVIDIA and IBM are already leading efforts (such as Stellar-AI) to provide the supercomputing clusters needed for these simulations.

Many often focus on the “Fusion Core,” but the Balance of Plant is where 50% of the capital cost lives. This is the traditional engineering—turbines, heat exchangers, and cooling systems—that turns heat into electricity. Standard steam turbines may not be efficient enough. This requires innovations such as Supercritical CO2 turbines which are developed by only a handful of agencies and almost exclusively by Oklo commercially. These turbines are smaller and more efficient than steam, and are being prioritized to keep the plant footprint small.

* * *

Read more at the TightSpreads substack

Tyler Durden Mon, 01/19/2026 - 11:20

NatGas Futs Erupt As Arctic Air Invasion Penetrates Deep Into US South

US natural gas futures erupted Monday morning as some of the coldest Arctic air of the Northern Hemisphere winter season poured into the eastern half of the Lower 48. Snow threats across the region are increasing through the end of the month.

Average temperatures across Washington, DC, are plunging and could average around 10°F by the weekend. This cold blast is far more extreme than the one in the first half of December. Notably, this period typically coincides with the most intense part of winter.

"DANGEROUS COLD is likely on Saturday across much of the United States, with wind chills forecasted to fall below zero for over 100 million people," weather observer Max Velocity wrote on X. "Additionally, wind chills could be as low as 60 DEGREES below zero in the far Northern Plains at this same time. This dangerous cold will likely set up a rare Southern USA Winter Storm on Friday and Saturday."

DANGEROUS COLD is likely on Saturday across much of the United States, with wind chills forecasted to fall below zero for over 100 million people.

Additionally, wind chills could be as low as 60 DEGREES below zero in the far Northern Plains at this same time. This dangerous cold… pic.twitter.com/xbtm2nsQdv

— Max Velocity (@MaxVelocityWX) January 19, 2026

 

Private weather forecaster BAM Weather warns of increasing risks of winter activity across the eastern half of the US this week:

A storm will develep Friday night into Saturday across the deep south and track northeast with a tap to the Gulf of America allowing plentiful moisture to produce a large area of a high impact winter storm. Strong high pressure will come south from Canada and bring Arctic air with it allowing there to be plenty of cold air available to produce snow and ice across several thousands of miles in the central and eastern US.

Winter Storm Scenario #1 

Winter Storm Scenario #2

The cold blast has sent heating demand through the roof.

NatGas futures in the US are up 18% as of early Monday, the largest intra-day jump since October 2024.

NatGas prices surging again.

Cold air is in place. The weather pattern is set.

Map showing the chances for at least three inches of snow through Monday.

That's a lot of real estate ❄️

High chances for accumulating snow in the Southern Plains, Mid-South, Appalachians and Mid-Atlantic this weekend. Lots of ice possible in the South. pic.twitter.com/yrtTYn4h8F

— Ben Noll (@BenNollWeather) January 19, 2026

All eyes are on the next possible major snowstorm targeting the Southern Plains, Mid-South, Appalachians, and Mid-Atlantic by next week.

Tyler Durden Mon, 01/19/2026 - 10:55

Greenland Is Very Nice...

By Benjamin Picton, senior markets strategist at Rabobank

If Mighty Ducks 2 taught me anything it’s that “Greenland is covered with ice, and Iceland is very nice.” While that might be a handy geographic mnemonic, for the purposes of US national security policy it is, in fact, Greenland that is very nice..

Over the weekend President Trump announced additional tariffs of 10% from February 1st – rising to 25% from the 1st of June – for eight European countries resisting US efforts to acquire Greenland. The affected countries are Denmark, France, Germany, the UK, the Netherlands, Sweden, Norway and Finland. Trump said via Truth social that the tariffs would remain in place until a deal for the sale of Greenland to the United States is concluded. Consequently, gold is hitting fresh record highs, long yields are rising, equity futures point negative and both Cable and EURUSD have opened the Asian session well bid. Japanese long yields are surging for idiosyncratic reasons, but should be getting high enough to worry even the most sedate money managers.

One can probably imagine the reaction in European capitals. The Financial Times is reporting that the EU is preparing €93bn in retaliatory tariffs to give European leaders “leverage” in negotiations with Trump at the World Economic Forum in Davos this week. Emmanuel Macron was quick out of the gates with a representative of his office saying that the French President will be arguing for the EU to deploy its much-vaunted ‘trade bazooka’ (known less sensationally as the anti-coercion instrument) while Politico quotes former French diplomat Jeremie Gallon as saying “I am convinced that we must not give in... Resisting a new attempt at humiliation and vassalization is the only way Europe can finally assert itself as a geopolitical actor.”

Resistance is all well and good, but effective resistance requires the means to resist – and Europe does not have it. An ECB report released in February of last year noted that 61% of all card payments in Europe are processed by international (read: US) card schemes while thirteen EU countries are solely reliant on international schemes like Visa, Mastercard and ApplePay for electronic payment processing.

Likewise, since the start of the war in Ukraine Europe has become dependent on American energy as it attempts wean itself off Russian supplies. Before the war it was already dependent on the Eurodollar market for capital and on the American consumer for export earnings as deflation and state mercantilism in China diminished that alternative.

Over the weekend German Chancellor Merz conceded that Germany’s shutdown of its nuclear energy industry was a “serious strategic mistake” that has left the country with insufficient energy generation capacity. As a consequence of cumulative strategic mistakes, European industry is now being squeezed between the pincers of loss of input sovereignty and loss export markets. Loss of domestic industry is another way of saying loss of industrial sovereignty (for more on that, see Sky News’s excellent exposé on the parlous state of UK industry) – and industrial sovereignty is requisite for dreams of strategic autonomy.

Furthermore – and though it hardly bears saying – the EU under NATO remains a US garrison state with major US bases in the Netherlands, Germany, Spain, Italy, Poland, Belgium, Portugal, Greece and Norway. Without the US security umbrella, the EU nuclear deterrent collapses into internecine politicking over France’s willingness to play guarantor for other member states who – once upon a time – France was sceptical about admitting to the EU in the first place. This is important in a context where – as ECB’s Kazaks pointed out overnight – Europe is already at war with Russia.

Herein lies the Achilles Heel for Europe in seeking genuine strategic autonomy: the lack of political union makes it all too easy for great powers like the United States or China play member states off against each other to get what they want. Already we can see Italy’s Georgia Meloni taking the opposite approach to Macron by striking a much more conciliatory tone towards the Americans, framing recent deployments of European troops to the territory as a ‘misunderstanding’ and seeking to de-escalate. In this respect, Europe is the new Balkans that risks becoming the plaything of empires.

Perhaps Canada offers an example of an alternative approach? Mark Carney just made the first visit to China by a Canadian Prime Minister in almost a decade. Canada’s name has been mud in Beijing for years after the former Trudeau government complied with a US warrant for the arrest of Huawei executive Meng Wanzhou in 2019. Trudeau then placed substantial tariffs on imports of Chinese steel, aluminium and electric vehicles – where duties were set at 100% for the latter.

Carney has now signed a deal with China to lower EV tariffs to 6.1% up to an annual quota of 49,000 vehicles. In return China will drop tariffs on Canadian canola to 15%. Having previously described China as the greatest threat to Canada’s national security, Carney is now saying that the relations with the Middle Kingdom are more predictable than relations with the United States, and is making a show of cozying up to Beijing.

As one observer puts it on X, Carney’s pivot is a “vintage Gaullist move.” Carney is attempting to leverage Trump by signing deals with Beijing and even flirting with the idea of sending Canadian troops to Greenland. With Chinese influence having been ejected unceremoniously from Venezuela, and under pressure in the Panama Canal, the last thing the Trump administration would want is for Canada to offer China another geopolitical toehold in the Western hemisphere. Carney offering that toehold in the Arctic, directly adjacent to Greenland, must be particularly ‘de-Gaulling’ for Trump, who is so far calling the bluff by shrugging his shoulders.

However, this strategy is incredibly high risk. Not only does Carney’s backdown on Chinese EVs threaten Canada’s own auto industry (see criticism from Ontario Premier Doug Ford here), but there is always the chance that poking the (US) bear might actually elicit a response from the bear.

Canada sends ~75% of its goods exports to the United States while the United States is by far the largest supplier of armaments to Canada. Consequently, Carney will be hoping that Trump’s response is to offer him a better deal than Xi Jinping is willing to give. However, with the USMCA trade agreement up for renegotiation and the US back in a Great Power frame of mind, Carney runs the risk that Donald Trump might instead decide that Canada is also very nice...

Tyler Durden Mon, 01/19/2026 - 10:30

Putin Offered Seat On Trump's Gaza Peace Board, Kremlin Says

Russia has been invited to take part in the new US-backed 'Peace Board' put forward by President Donald Trump to oversee post-conflict governance and reconstruction in Gaza, Kremlin spokesman Dmitry Peskov has announced, in a somewhat surprising and hugely symbolic diplomatic move and overture.

Peskov told reporters Monday that President Vladimir Putin had received an invitation through diplomatic channels. "We are studying the details of the proposal. We hope to hold contacts with the US side to clarify all the nuances," he said, but did not disclose any additional details.

Source: Expresso

The Putin invitation has yet to be publicly acknowledged by Washington, and Western mainstream media is likely to go into a frenzy over it. Press reports have highlighted that Putin was invited to oversee 'peace' but is still active in directing the Ukraine invasion.

For example, The Guardian frames the peace board as but a Trump vanity project, writing "The invitation to Putin, which has yet to be confirmed by Washington, raises more questions about the intended agenda for the board. It was originally part of Trump’s ceasefire proposals for the Gaza war, and was supposed to oversee the transition to a lasting peace in the territory and supervise the work of a committee of Palestinian experts, also announced last week, who would take care of the day-to-day running of Gaza."

The report adds, "The vaguely described scheme was endorsed in a UN security council resolution in November" - and draws parallels to the desire to takeover Greenland, which is intent to "cement Trump’s place in the history books."

Invitations have been sent to a broad group of countries in Europe, the Middle East, and Asia, including US allies and key regional players. Already, countries and leaders as different and geographically distant as Hungary under Prime Minister Viktor Orban and Vietnamese Communist Party chief To Lam have accepted their invitations.

It is shaping up to be a 'mini UN' of sorts, as the peace board plan calls for an international council to manage reconstruction financing, security coordination, and political cooperation in Gaza - all while working in cooperation with a Palestinian technocratic administration.

Yet there are other peculiar aspects. For example Bloomberg reported over the weekend that the Trump administration is asking nations interested in holding a permanent seat on a proposed Gaza Strip "Board of Peace" to pledge at least $1 billion in funding. Otherwise they will just hold a three-year seat, according to some initial details.

❗️Trump invited Putin to join Gaza 'Peace Board' — Kremlin spokesman

'At the moment, we are studying all the details of this proposal. We hope for contact with the American side to clarify all the nuances' pic.twitter.com/ZghZSU8gU0

— RT (@RT_com) January 19, 2026

The intent of the funding threshold is reportedly to ensure that participating countries have substantial financial involvement in stabilizing the territory and supporting long-term redevelopment. It is unclear whether Russia will accept its invitation, or whether it is willing to pony up $1 billion.

Washington seems to be arguing that spreading the financial burden internationally is critical to preventing American taxpayers from shouldering most of the reconstruction costs. Sadly, this was of no concern when the same taxpayers were footing the bill for billions in weaponry and foreign aid for Israel over prior years - even as Palestinian neighborhoods got flattened by US bombs.

Tyler Durden Mon, 01/19/2026 - 10:05

The post Time for Europe to Use the Nuclear Option: Attack U.S. Patent and Copyright Monopolies appeared first on CEPR.

The post Trump Wants to Hit Us with a Huge Tax Hike for His Demented Greenland Dreams appeared first on CEPR.

FBI Announces $100,000 Reward After Government Vehicles Broken Into In Minneapolis

Authored by Jack Phillips via The Epoch Times (emphasis ours),

The FBI said it is offering a reward of up to $100,000 for information leading to the arrest and capture of individuals who allegedly stole government property out of an FBI vehicle in Minneapolis, as it announced the arrest of one suspect.

Federal immigration officers at the scene of a reported shooting in Minneapolis on Jan. 14, 2026. AP Photo/John Locher

FBI Director Kash Patel on Thursday announced the arrest in a post on social media, saying the bureau is “continuing to pursue other subjects involved” in the incident.

The suspect was identified as a member of the Latin Kings street gang who has a violent criminal history, Patel said, adding that “there will be more arrests” in the case.

U.S. Attorney General Pam Bondi said the arrest was carried out by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). The suspect allegedly stole FBI weapons and body armor, she said.

Hours before, on Thursday evening, the FBI said on social media that it would provide the reward “for information leading to the recovery of stolen government property and/or the arrest of individuals responsible for the destruction and theft of government property,” as it included photos of the aftermath of the incident.

Multiple government vehicles were “vandalized and broken into, and government property was stolen from inside the vehicles,” the statement said, adding that it came in response to an assault on a federal officer in North Minneapolis.

The suspect’s name and immigration status were not provided in either social media post. It’s also not clear how many other suspects are being pursued.

Meanwhile, protests have persisted in the Minneapolis area in the wake of a shooting of a woman by an Immigration and Customs Enforcement (ICE) agent during a traffic stop. Video footage of the incident appears to show the woman, identified as Renee Good, driving a vehicle and moving it toward an agent, who opens fire.

During the incident, the ICE agent involved in the shooting was injured and hospitalized, Department of Homeland Security Secretary Kristi Noem said on Jan. 7.

“The officer was hit by the vehicle,” Noem told reporters on Jan. 7. “She hit him. He went to the hospital. A doctor did treat him. He has been released.”

The reward offer comes as President Donald Trump said that Minnesota officials and citizens are impeding U.S. law enforcement operations in Minnesota, warning he would send in the military under the Insurrection Act.

“If the corrupt politicians of Minnesota don’t obey the law and stop the professional agitators and insurrectionists from attacking the Patriots of I.C.E., who are only trying to do their job, I will institute the INSURRECTION ACT, which many Presidents have done before me, and quickly put an end to the travesty that is taking place in that once great State,” Trump said in a Truth Social post this week.

Presidents have invoked the law more than two dozen times, most recently in 1992 by President George H.W. Bush to end unrest in Los Angeles. In that instance, local authorities asked for the assistance.

Democrats in the state, including Gov. Tim Walz, have been critical of the Trump administration’s immigration operation in the state and have accused the government of violating residents’ rights.

“I’m making a direct appeal to the President: Let’s turn the temperature down. Stop this campaign of retribution. This is not who we are,” Walz wrote on X.

The Associated Press contributed to this report.

Tyler Durden Mon, 01/19/2026 - 09:45

Bayer Shares Surge After Supreme Court To Hear Roundup Appeal; Is The Decade-Long Bear Market Over?

Bayer AG shares moved higher in European trading after the U.S. Supreme Court agreed to hear its appeal of a Roundup verdict, raising new hopes the ruling could undermine thousands of related lawsuits over cancer risks.

Last Friday, the Supreme Court said it would hear an appeal from Bayer, which petitioned the court last year. Bayer argues that users of the weedkiller shouldn't be able to sue the company for failure to warn about cancer risks because federal regulators have determined that Roundup's main chemical, glyphosate, does not require a cancer warning.

The case challenges a $1.25 million Missouri jury award over claims Bayer failed to warn that Roundup causes cancer. Bayer argues the claims are preempted by federal law and maintains the product is safe.

The Wall Street Journal noted, "The Supreme Court will likely hear arguments in the case this spring, with a ruling expected by early July. If Bayer prevails, it could help lead to the dismissal of thousands of cases against the company."

The lawsuit stems from Bayer's $63 billion acquisition of Monsanto, the developer of Roundup, in 2018. Glyphosate remains the most heavily used herbicide on American farms, with 300 million pounds applied annually.

The Roundup litigation sent Bayer shares in Europe into a decade-long bear market. In 2025, what appears to be a bottoming year, the stock troughed near 2004 levels around 20 euros and has since more than doubled to roughly 44 euros. Shares are up more than 7% on Monday.

"The Supreme Court decision to take the case is good news for U.S. farmers, who need regulatory clarity," Bayer CEO Bill Anderson told WSJ in a statement. "It's also an important step in our multi-pronged strategy to significantly contain this litigation."

Last month, the Trump administration urged the Supreme Court to take up the Roundup case.

The EPA has "repeatedly determined that glyphosate is not likely to be carcinogenic in humans, and the agency has repeatedly approved Roundup labels that did not contain cancer warnings," Solicitor General John Sauer wrote in a December legal brief.

"A manufacturer should not be left subject to 50 different labeling regimes prescribing different requirements," Sauer said.

Bayer said it expects a Supreme Court decision by summer. Watch shares of the company likely squeeze higher.

Tyler Durden Mon, 01/19/2026 - 09:25

Futures, Global Markets Sink, Gold Soars On Trump Tariff Threat

Stocks sold off and gold hit a new record as trade tensions between the US and Europe erupted over Trump’s push to take control of Greenland (which we learn today is due to Norway's snub of Trump for the Nobel peace prize). While US cash markets are closed for the MLK holiday, S&P futures dropped 1.1% and Nasdaq futures tumbled 1.4%, while Europe's Stoxx 600 was on track for its worst day in two months led by luxury stocks and German automakers as BMW dropped 3%. The dollar retreated 0.2%, while the Swiss franc outperformed. Gold topped $4,670 an ounce. US markets are shut today for a public holiday.

In corporate news Nvidia supplier Micron Technology said an ongoing memory chip shortage has accelerated over the past quarter and reiterated that the crunch will last beyond this year due to a surge in demand for high-end semiconductors required for AI infrastructure.

• Apple Inc. retook the top spot in China after iPhone shipments jumped 28% during the holiday quarter despite a worsening shortage of vital memory chips, according to Counterpoint Research.
• Tesla Chief Executive Officer Elon Musk said the electric carmaker will resume work on the Dojo3 project after making progress on the design of its AI5 chip.
• Bayer AG’s shares surged after the US Supreme Court said it would hear the company’s appeal in a Roundup case that could undercut thousands of lawsuits tied to the weedkiller.

Stocks around the world were knocked lower by Trump’s threat to impose levies on countries opposing his bid to assert authority over Greenland, which risks reigniting the tariff-fueled volatility that rattled markets in the early months of his second term. The selloff deepened as Monday’s session wore on after European officials signaled they were unlikely to back down and were considering retaliation. 

“Markets are sensitive to the dynamic developments regarding new tariffs as a basis for negotiating security issues,” said Guillermo Hernandez Sampere, head of trading at MPPM. “Rising uncertainty, as seen last year, will weigh on all markets.”

The standoff is coming at a time when risk appetite has been supported by resilient corporate earnings and sustained investment in artificial intelligence. The outlook will hinge in part on the European Union’s response, with the bloc in talks to impose tariffs on €93 billion of US goods. 

“The key element to watch in the coming days is whether the message translates into formal measures or remains purely rhetorical, which would make a clear difference in the market reaction,” said Francisco Simón, European head of strategy at Santander Asset Management.

The tensions are also adding to the significance of a pending US Supreme Court ruling on some of Trump’s earlier tariffs, with a decision possible as soon as Tuesday.

“It is not about whether the US can roughly maintain its tariff levels,” wrote Krishna Guha, head of central bank strategy at Evercore ISI. It is “rather about whether Trump has to use regular order to impose tariffs, reducing uncertainty and his ability to weaponize tariffs for geopolitical purposes.”

Trump’s threats raise the possibility of European governments trimming their holdings of US assets, supporting the euro, according to George Saravelos, Deutsche Bank’s global head of FX research. As we reported last night, Europe is the US’s largest lender with its countries owning $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined. 

“The key thing to watch will be whether the EU decides to activate its anti-coercion instrument,” Saravelos said. “It is a weaponization of capital, rather than trade flows, that would by far be the most disruptive to markets.”

While Trump’s threats have reignited the ‘Sell America’ trade, some traders expect the swings to be short-lived.

“My working assumption is that an ‘off-ramp’ from these threats will soon be found,” said Michael Brown, senior research strategist at Pepperstone. “With the fundamental bull case for risk still a resilient one, and providing that any European retaliation remains largely rhetorical, I would view equity dips as buying opportunities.” 

In Europe, the Stoxx 600 is down 1.3%, on track for its worst day in two months. Autos & parts, luxury and tech are seeing a brunt of the selling pressure. There is no US cash trading today, however, futures are notably weaker with the S&P 500 and Nasdaq contracts down 1.1% and 1.5%, respectively.  Here are the biggest movers Monday:

• D’Ieteren shares gain as much as 9.2% after the auto distributor announced that its Belron unit had successfully repriced a loan, while the Financial Times reported that Belron was in talks on a stock market listing
• Bayer shares rise as much as 8.4% after the US Supreme Court agreed to hear the German company’s appeal taking aim at thousands of lawsuits targeting Roundup weedkiller for causing cancer
• Ageas shares rise as much as 3.3%, the most since June, after the Belgian health insurance firm boosted its net operating profit guidance for the full year, beating the average analyst estimate
• ASM International shares rise as much as 2.5%, bucking a decline in Europe’s tech sector, after the chip equipment firm reported preliminary orders well ahead of consensus estimates, while seeing a “healthy increase” in 1Q revenue versus 4Q
• Europe’s tariff-exposed sectors — including autos, drinks and shipping — are trading lower on Monday, after President Donald Trump announced on Saturday a new 10% levy on eight countries opposed to his plans to seize Greenland
• LVMH drops as much as 4.8%, and is among the weakest members of the Stoxx 600 consumer products and services index on Monday, as Morgan Stanley downgrades to equal-weight
• Adidas shares fall as much as 4.8% to the lowest level since November, after Bank of America forecast the sportwear retailer’s fourth-quarter sales to undershoot market expectations
• Banca Generali shares declined as much as 5.2% in Milan trading, the most since Aug. 21, after Kepler Cheuvreux analysts cut the recommendation on the stock to hold from buy, ahead of the 2025 results

Asian stocks erased an early decline, as gains in South Korea and Taiwan defied broader market concerns over the latest tariff threats from Trump’s administration. The MSCI Asia Pacific Index fluctuated in a narrow range, after capping its best week since early October. Benchmarks declined in Japan, Hong Kong, Singapore and India, amid global risk-off trading after Trump announced new levies on goods from European countries that have rallied to support Greenland. The tech-heavy markets of South Korea and Taiwan shrugged off the regional selloff, extending rallies driven in large part by investor optimism over artificial intelligence demand. TSMC and SK Hynix rose, even after US Commerce Secretary Howard Lutnick said Friday that Korean and Taiwanese companies that aren’t investing in the US may face up to 100% tariffs.

In rates, bunds are a touch higher, coinciding with a decline in European natural gas futures, which are trimming last week’s rally. UST and gilt futures are slightly weaker. The yield on 30-year Japanese debt climbed 11 basis points to 3.58%, while rates on 10- and 20-year notes rose to their highest levels since 1999.

In FX, the dollar is softer versus most peers with the Bloomberg Dollar Index down 0.1%. The euro has been resilient in the face of the trade conflict, but the Swedish krona and Norwegian krone are both weaker. The Swiss franc tops G-10 currencies while the yen has seen little follow-through from Japanese PM Takaichi’s widely-expected decision to call an election for Feb. 8.

In commodities, the latest tariff flight-to-quality triggered further record highs for spot gold and silver, up 1.5% and 3.5% respectively. Bitcoin is down by 2.5%.

Top Overnight News

• US President Trump hit 8 European countries with a 10% tariff, effective February 1st, over Greenland. The 8 countries include Denmark, Norway, Sweden, France, Germany, Finland, the Netherlands and the UK. The tariff will be increased to 25% on June 1st, unless a deal is reached for the purchase of Greenland.
• Pentagon readies 1,500 troops for potential Minnesota deployment: RTRS
• Trump Invited Putin to Join Gaza ‘Board of Peace,’ Kremlin Says: BBG
• The EU is preparing €93bln of tariffs on the US or restrict American companies' from the European market, in retaliation to the latest threat by US President Trump as European leaders meet for an emergency meeting on Thursday: FT
• French President Macron plans to urge the EU to use the Anti Coercion Instrument to retaliate against US President Trump's new 10% tariff on European countries: FT 
• Germany Says Trump Reached Red Line With Greenland Threat: BBG
• Denmark Officials Skip WEF Over Trump’s Greenland Threats: BBG
• Trump's Greenland threat puts Europe Inc back in tariff crosshairs: RTRS
• Canada Weighs Sending Troops to Greenland Despite Tariff Threat: BBG
• At least 39 dead in Spain after two high speed trains collide: RTRS
• The EU is proposing to phase out Chinese-made equipment from critical infrastructure in a move to revamp its security and tech policy: FT
• Cook case could lead to 'cause' protections for Fed, or a roadmap for dismissals: RTRS
• Qatar Wealth Fund CEO Signals Nuanced Approach to AI Investments: BBG
• Hohn Breaks Citadel’s Record With $18.9 Billion Trading Profit: BBG
• Jane Street India’s Trading Gains Soared 494% Before Curbs: BBG
• Japan PM Takaichi to call Feb 8 snap election on spending, tax cuts and defence: RTRS
• Jeremy Grantham Says AI Is Indeed a Classic Market Bubble: BBG
• Guatemalan prison hostages freed, president declares state of siege: RTRS
• Trump Says Mamdani Facing ‘Big Test’ From NYSE’s Texas Trading Outpost: BBG

Trade/Tariffs

• Trump links Greenland threat to Nobel Peace Prize snub, EU eyes trade retaliation: Reuters
• The US is seeking a rare-earth deal with Brazil as Washington is looking for alternative sources away from China, the FT reports citing sources.
• The EU is proposing to phase out Chinese-made equipment from critical infrastructure in a move to revamp its security and tech policy, the FT reports.
• South Korea's Trade Ministry said South Korea and China are to hold a new round of free-trade negotiations on services and investment.
• US President Trump, on Carney in China, said it's OK for him to get a deal with China and if he can get a deal with China, he should do that.
• Brazilian President Lula said he wants to build new partnerships with Mexico, Canada, Vietnam, Japan, and China.

Tyler Durden Mon, 01/19/2026 - 09:11

Chaos By Design

Authored by Jerry Rogers via American Greatness,

Over and over again, we’re told to be outraged.

An individual is detained by Immigration and Customs Enforcement (ICE). He is later released. And before the facts can catch their breath, Democratic politicians and activist megaphones are already screaming ‘abduction’, ‘fascism’, and ‘state violence’.

Cue the mob. Cue the cameras. Cue the chaos.

It plays out over and over again.

Remember the viral video of a woman screaming ‘I’m a U.S. citizen’ as ICE agents pulled her from a car in the Florida Keys? The media and politicians pounced – ICE ‘arrested an American citizen’. Turns out this person was detained by ICE because she refused to identify herself and was driving her boyfriend’s vehicle. Afterwards, reports disclosed that the boyfriend was in the country illegally. She chose not to comply. Perhaps she wanted the situation to escalate? Much of the debate about ICE has become political theater.

Let’s slow this down and apply something increasingly rare in modern politics: the facts.

ICE detains individuals pursuant to its lawful authority. That happens every day. Sometimes people are held. Sometimes they’re released. Detention and release are not evidence of wrongdoing by law enforcement—they are the process. But in today’s political climate, process doesn’t matter. Optics do. Rage does. And outrage is politicized and monetized.

What does make these encounters dangerous is not ICE. It’s the reckless rhetoric that surrounds them.

When Democratic elected officials tell people that law enforcement officers are ‘kidnappers’ or ‘stormtroopers’, when they suggest citizens have a moral duty to interfere with federal agents, they are not encouraging peaceful protest—they are inciting confrontation. And when mobs take that cue and physically obstruct officers doing their jobs, the risk to everyone involved skyrockets.

This is not complicated.

What happens?

Lawful orders are given. They’re ignored. Resistance follows. A crowd interferes.

Officers are forced to manage a volatile situation that never needed to exist in the first place.

If individuals simply comply with lawful commands—no dramatics, no resistance, no posturing—these could be routine encounters. No drama; no chaos, no violence. If the mob allows officers to do their work instead of inserting themselves into a federal enforcement action, there would be no spectacle, no video clips, no political fundraising emails.

But compliance doesn’t trend on social media.

What we’re witnessing is a dangerous feedback loop. Politicians inflame tensions with extreme language. Activists show up looking for confrontation. Law enforcement is placed in an impossible position. Then, when things escalate—as they predictably do—the very people who lit the fuse rush to the microphones to condemn the explosion.

That’s not leadership. That’s negligence.

No one is above the law, but justice isn’t served when the law is deliberately obstructed either. ICE officers are not free agents; they operate under rules, supervision, and due process constraints. Pretending otherwise may be politically useful, but it is factually false—and dangerously so.

If Democrats truly cared about safety, about de-escalation, about justice, they would stop encouraging resistance and obstruction.

They would tell their supporters the truth: you don’t get to decide, in the moment, which laws you’ll obey and which officers you’ll recognize as legitimate.

These incidents don’t have to happen. They are not inevitable. They are manufactured—by irresponsible rhetoric, by mob interference, and by a political class more interested in chaos than consequences.

And the next time it happens—and it will—remember who made it dangerous.

Tyler Durden Mon, 01/19/2026 - 08:15

Market Risk Returns As Tariff Shock Jolts Stocks; Goldman Maps Three Retaliation Paths Against Trump Over Greenland

The Euro Stoxx 50 is down 1.5% on elevated volumes, while Nasdaq 100 futures are also lower amid overnight risk-off across Western markets. The selloff follows the latest trade escalation after President Trump said he would impose a 10% tariff on imports from eight European countries in retaliation for their opposition to U.S. control over Greenland.

On Sunday, Trump wrote on Truth Social that beginning on February 1, Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland will be charged with a 10% tariff on all goods sent to the US. That tariff rate would be increased to 25% by June 1.

"This Tariff will be due and payable until such time as a Deal is reached for the Complete and Total purchase of Greenland. The United States has been trying to do this transaction for over 150 years. Many Presidents have tried, and for good reason, but Denmark has always refused. Now, because of The Golden Dome, and Modern Day Weapons Systems, both Offensive and Defensive, the need to ACQUIRE is especially important," Trump said.

European countries released a joint statement opposing US control of Greenland, blasting Trump's move, saying the president's threats "undermine transatlantic relations and risk a dangerous downward spiral."

The statement from the European countries said that troops deployed to Greenland for the operation "Arctic Endurance" pose "no threat to anyone."

Late Sunday, Trump posted on Truth Social that "NATO has been telling Denmark for 20 years that you have to get the Russian threat away from Greenland. Unfortunately, Denmark has been unable to do anything about it. Now it is time, and it will be done!!! — President Donald J. Trump."

It's important to note that Europeans cannot compete militarily, but Brussels can wield reciprocal tariffs and other economic weapons. This tariff threat prompted Goldman analyst Adam Crook to tell clients Monday that a 10% tariff rate on EU goods would "lower real GDP in the affected European countries by 0.1-0.2% via lower exports. The inflation effects would likely be very small and a Taylor rule would point to modestly lower policy rates, all else equal."

Crook outlined three potential levels of EU trade retaliation:

1. stalling the implementation of last year's EU-US trade deal,

2. imposing counter-tariffs on US goods, and

3. launching the Anti-Coercion Instrument, which would allow for a broader range of non-tariff retaliation options

Also on Sunday, Treasury Secretary Scott Bessent defended Trump's proposal to impose tariffs on the European countries. He told NBC News' "Meet the Press" that the move to acquire Greenland is to avert a future national emergency.

"It is a strategic decision by the president," Bessent said. "This is a geopolitical decision, and he is able to use the economic might of the U.S. to avoid a hot war."

In response to Trump's tariff threat, European Council President António Costa told EU members that he would convene "an extraordinary meeting of the European Council in the coming days" (more details here).

Commentary from Deutsche Bank's chief FX strategist George is key (view note here):

Europe owns Greenland, it also owns a lot of Treasuries. Saravelos spent most of last year arguing that for all its military and economic strength, the US has one key weakness: it relies on others to pay its bills via large external deficits. Europe, on the other hand, is America's largest lender: European countries own $8 trillion of US bonds and equities, almost twice as much as the rest of the world combined.

. . .

Remember the Munich Security Conference. It was the US Vice President's Munich speech last year that proved the proxy catalyst for an acceleration in European defence spending. Could it be Greenland this year that catalyses an acceleration in European political cohesion?

UBS analyst Joe Dickinson told clients earlier, "The renewed trade conflict also feeds broader geopolitical concerns, including NATO cohesion and the durability of US defence guarantees, with probabilities of a Russia‑Ukraine ceasefire continuing to drift."

Major European stock indexes were hit by overnight tariff headlines, as were US main equity index futures (US holiday)...

The US-EU spat over Greenland underscores how rapidly escalating geopolitical tensions are reshaping the Western hemisphere in the era of the 'Donroe Doctrine.'

Tyler Durden Mon, 01/19/2026 - 07:45

My (somewhat relevant?) Martin Luther King Day reads:

• New High of 45% in U.S. Identify as Political Independents: More independents lean Democratic than Republican, giving Democrats edge in party affiliation for first time since 2021. (Gallup)

• Why are federal agents gunning down Americans in the streets? The shooting of Renee Good, like all of the ICE abuses, is symptomatic of a deeper mental illness. (Noahpinion) see also The Consequences of Rejecting “Defund the Police” Political cowardice is paid for in blood. (How Things Work)

• The Plot to Redraw America: How Donald Trump launched a redistricting caper he couldn’t pull off. (Politico)

• Why Are Credit Card Rates So High? Capping rates would cause banks to pull back their lending in this space. Only those with solid credit scores would be able to borrow. Those who rely on credit cards to finance their lifestyle would be forced into payday loans or other more onerous borrowing schemes. (A Wealth of Common Sense)

• Behind the Curtain: AI rush creates rarified class of “Have-Lots” For the bottom 50%, the economy, by historical standards, is fine. Wages are growing, unemployment is low, and inflation is moderate. But the mood is sour, as shown by sky-high pessimism about their personal future and AI. (Axios)

• The wild card group that could scramble America’s political alliances: Why Catholics could be the key to Trump’s opposition. (Vox)

• ICE Prosecutor in Dallas Runs White Supremacist X Account: The Observer has identified the operator of “GlomarResponder,” an overtly racist social media account, as ICE Assistant Chief Counsel James Rodden, based on an overwhelming number of biographical details matched through publicly available documents, other social media activity, and courtroom observation. (Texas Observer)

• You’ve Heard About Who ICE Is Recruiting. The Truth Is Far Worse. I’m the Proof. What happens when you do minimal screening before hiring agents, arming them, and sending them into the streets? We’re all finding out. (Slate) see also What to Do if ICE Invades Your Neighborhood: With federal agents storming the streets of American communities, there’s no single right way to approach this dangerous moment. But there are steps you can take to stay safe—and have an impact. (Wired) see also How Donald Trump Has Transformed ICE: A former D.H.S. oversight official on what, legally, the agency can and can’t do—and the accountability mechanisms that have been “gutted beyond recognition.” (The New Yorker)

• The Oceans Just Keep Getting Hotter: For the eighth year in a row, the world’s oceans absorbed a record-breaking amount of heat in 2025. It was equivalent to the energy it would take to boil 2 billion Olympic swimming pools. (Wired)

• Renfrew Christie, Who Sabotaged Racist Regime’s Nuclear Program, Dies at 76: He played a key role in ending apartheid South Africa’s secret weapons program in the 1980s by helping the African National Congress bomb critical facilities. (I imagine MLK would have approved his civil disobedience). (New York Times)

Be sure to check out our Masters in Business interview this weekend with Nobel laureate Richard Thaler and his University of Chicago Booth School colleague Alex Imas on the update and reissue of his classic book The Winner’s Curse.

 

The United States Spends More on Defense than the Next 9 Countries Combined

Source: Peter G. Peterson Foundation

 

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The post 10 MLK Day Reads appeared first on The Big Picture.

Trump's Planned Mediation Between Egypt & Ethiopia Might Worsen Regional Tensions

Authored by Andrew Korybko,

Trump declared in a letter to Egyptian President Abdel Fattah al-Sisi that he shared on social media that “I am ready to restart U.S. mediation between Egypt and Ethiopia to responsibly resolve the question of ‘The Nile Water Sharing’ once and for all’, adding in tacit support of Egypt’s position that “no state in this region should unilaterally control the precious resources of the Nile”.

He concluded that “Resolving the tensions around the Grand Ethiopian Renaissance Dam (GERD) is at the very top of my agenda”.

The fact is that “GERD Is Just A False Pretext For Egypt To Pressure Ethiopia” and “Ethiopia’s Final Filling Of Its Grand Renaissance Dam Debunked Years Of Egyptian Disinformation” in 2023. It was also assessed last summer that “Trump’s Latest Remarks About GERD Raise Questions About His Understanding Of This Dispute”, which weren’t corrected as proven by the substance of the abovementioned letter. Egypt might therefore be manipulating him into supporting its regional containment campaign against Ethiopia.

To explain, GERD is a pretext for Egypt to justify meddling inside of and around Ethiopia by resuming its Old Cold War-era policy of backing armed anti-government groups and allying with Eritrea, whose independence was achieved with the help of Egyptian military aid during the decades-long civil war. The Ethiopian Foreign Minister suggested late last year that Eritrea is becoming an anti-Ethiopian state at its Egyptian patron’s behest just like Ukraine became an anti-Russian one at its NATO patrons’ behest.

Egypt also exploited Ethiopia’s MoU with Somaliland in early 2024 for recognizing its 1991 redeclaration of independence in exchange for access to the sea to assemble a containment coalition with Somalia and Eritrea. Last week, Bloomberg reported that Saudi Arabia is finalizing an alliance with Egypt and Somalia for removing Emirati influence from Somaliland, which follows the Somali Defense Minister requesting that the Saudis replicate their successful South Yemeni campaign there sometime soon.

Circling back to Trump’s letter to Sisi, his tacit support of Egypt’s position on GERD – which is a faux dispute since this megaproject is purely about powering Ethiopia’s economic rise and not cutting off water to Egypt – might embolden Cairo to more aggressively contain Ethiopia.

After all, Trump’s implicit backing of Egypt could predispose him to believing that any Ethiopian response to its potentially intensified regional containment is “unprovoked aggression”, which could lead to US pressure upon it.

For example, Ethiopia might use force to expel the Eritrean troops that still occupy parts of its restive Tigray Region and/or deter a Saudi-led coalition campaign against Somaliland by recognizing it and deploying troops there (possibly in coordination with Israel).

Given the influence that Sisi now clearly wields over Trump due to how pleased Trump is with Sisi mediating the Israeli-Hamas ceasefire, which Trump considers to be an historic achievement, Trump might lash out at Ethiopia in those scenarios.

Ethiopia might therefore soon find itself in a difficult position where it’s coerced by the US through various means, from tariff threats to support for Egypt’s regional containment campaign, into strategic concessions at the expense of its sovereignty.

If Ethiopia can’t incentivize Trump via a minerals deal into pivoting to its side or being neutral, then maybe its close Israeli partner can help due to their convergent interests in Somaliland, Israel’s own tensions with Egypt, and its much greater influence with Trump.

Tyler Durden Mon, 01/19/2026 - 04:00

China Tech Boom Leaves Economic Malaise Behind

By Jeanny Yu, Bloomberg Markets Live strategist and reporter

Nearly a year after DeepSeek’s AI breakthrough rattled global markets, China is entering 2026 with a fresh wave of technological advances that are powering a stock rally, even as its economy remains fragile.

Thanks to fresh progress in sectors from commercial rockets to robotics and flying cars, Chinese tech shares have begun the new year with a bang. An onshore Nasdaq-like tech gauge has shot up almost 13% so far this month, while a measure of Hong Kong-listed Chinese tech firms has climbed nearly 6%. Both have outperformed the Nasdaq 100.

Enthusiasm about homegrown technologies has been the single biggest driver of China’s equities bull run since April, even as the world’s second-largest economy remained mired in a housing slump and anemic consumption. The momentum may gain further support in the coming months as DeepSeek rolls out a new AI model and China unveils a five-year economic blueprint prioritizing technological self-reliance.

“The stock market is telling us that what China is doing in technology sector is going to be very exciting going forward,” Mark Mobius, managing director of Mobius Emerging Opportunities Fund, told Bloomberg TV on Friday. “You must remember China’s goal now is to overtake the US in technology, in high-level chips, in all kinds of AI. So the money is going in that direction.”

Since DeepSeek shocked global markets with its cheap and equally well-performing AI models on Jan. 27 last year, fellow Chinese firms have accelerated efforts to develop their own versions. Adoption of generative AI has also surged among the country’s Internet giants from Alibaba Group Holding Ltd. to Tencent Holdings Ltd.

Elsewhere, Chinese robots have competed in marathons, sparred in boxing matches and performed folk dance routines. In manufacturing, large language models are being embedded into advanced equipment, such as flying taxis and precision machine tools. The developments are recasting China in investors’ eyes from a low-cost manufacturing base into a credible challenger to US tech leadership, just as global capital hunts for the next growth engine.

In a basket of 33 Chinese AI stocks tracked by Jefferies Financial Group Inc., the rally in the past year expanded their combined market value by about $732 billion, the brokerage said in a Jan. 13 report. Jefferies said it sees further upside because China’s AI’s market capitalization represents only 6.5% of the US’s.

The exuberance is spilling beyond the secondary market. A flurry of recent listing debuts of Chinese AI-related companies posted blockbuster gains, emboldening their peers to tap public markets. Among those in the pipeline are Xpeng’s flying-car unit, rocket maker LandSpace Technology and BrainCo, a potential rival to Neuralink Corp.

“Looking ahead, we anticipate that the next major breakthrough in AI will occur at the application layer,” said Joanna Shen, JPMorgan Asset Management’s emerging market and Asia Pacific equities investment specialist. “China, in particular, is well-positioned to lead this evolution, given its vast array of user cases across wearables, edge devices, and internet platforms.”

To be sure, the stellar rally has triggered concerns about stretched valuations. Cambricon Technologies Corp., an AI chipmaker that competes with Nvidia Corp., is trading about 120 times to forward earnings. A gauge tracking Chinese robots is trading at more than 40 times forward earnings, higher than the Nasdaq 100’s 25 times.

Beijing’s latest decision to tighten margin financing was also a sign of authorities’ growing unease with speculative excess, especially in pockets of the technology sector.

That said, some investors remain optimistic about the industry’s prospects due to advantages such as a low-cost base and strong state backing and planning. 

“China’s low-cost model for AI may well pay off faster” than its US peers, Gavekal Research’s technology analyst Tilly Zhang wrote in a note dated Jan. 16. “The ‘DeepSeek moment’ encouraged China to focus on a strategy of cheap, good-enough models.”

Expected within this quarter, the release of DeepSeek’s R2 model may provide the next catalyst. The new model, which will likely boast leading-edge performance at an ultra-low cost, “has the potential to disrupt the sector again, underscoring China’s position as the main rival to US AI supremacy,” Bloomberg Intelligence wrote in a recent note.

Details of China’s new five-year plan due for release in March, which places great emphasis on technological self-sufficiency, may offer stock bulls another reason to buy. 

Chinese stocks may further outperform their US counterparts if earnings growth continues to accelerate, especially in sectors with advanced technologies and strong exports, said Vivian Lin Thurston, portfolio manager at William Blair Investment. “I expect to see attractive investment opportunities in these industries as we have seen in 2025, including internet, AI, semiconductor-related hardware tech, robotics, automation and biotech.”

Tyler Durden Sun, 01/18/2026 - 23:55

Massive High-Velocity Coronal Mass Ejection Blasts From Sun, Earth Impact Possible In Days

The Space Weather Prediction Center issued an alert Sunday afternoon after a powerful X1.9 solar flare erupted on the Sun, with the space weather event expected to produce an Earth-directed coronal mass ejection (CME).

Stefan Burns, a geophysicist and space weather forecaster, wrote on X that the X1.9 flare is "insane" and will produce a "huge coronal mass ejection."

Major X1.9 solar flare detected at 18:08 UTC (Jan 18) around AR 4341. Earth directed CME likely. More to follow. https://t.co/aqK4Q6XdAY pic.twitter.com/CJUq1SAsQt

— SolarHam (@SolarHam) January 18, 2026

"A huge coronal mass ejection has been launched toward Earth at high velocity. We will have a BIG solar storm impact in 2 to 3 days. Expect at least G3 geomagnetic storming. Early forecasts are liable to revision as more data comes in," Burns said.

This 1.9 X-flare that just exploded on the Sun IS INSANE. A huge coronal mass ejection has been launched out towards Earth at high-velocity, we'll have a BIG solar storm impact in 2-3 days, expect G3 geomagnetic storming minimum (early forecast liable to revision with more data). pic.twitter.com/v7uDX1JdIW

— Stefan Burns (@StefanBurnsGeo) January 18, 2026

Space Weather News' Ben Davidson streamed a live analysis on YouTube earlier about the X-class solar flare and what to expect...

The X-class flare can disrupt radio and navigation immediately. The larger risk comes from the expected CME in the coming days, which can trigger geomagnetic storms that affect power grids, satellites, aviation, and the modern economy built on chips and data centers.

Tyler Durden Sun, 01/18/2026 - 22:45

Venezuela, Silver And Greenland: How The U.S.-China Power Split Is Reshaping the World

Submitted by Thomas Kolbe

America’s intervention in Venezuela is just days old, and the world seems unable to settle. The heated debate over Greenland’s future overshadows the main thread of a new world order emerging—one that is being decided between the U.S. and China. Europe, for now, is relegated to the role of a progressively anxious bystander.

In recent weeks, much speculation has surrounded the background and consequences of the U.S. intervention in Venezuela on January 3. On the surface, political commentators and mainstream media focus largely on Venezuelan heavy oil’s role and future. And they are right: if the U.S. manages to revive the mostly idle capacities via its domestic production industry—especially through firms like Chevron, ConocoPhillips, and Exxon—a significant geopolitical lever emerges.

This lever primarily reshapes the negotiation matrix and dynamics between Washington and Beijing. China requires this oil for its maritime expansion; the U.S., in turn, for refining capacity in the southern states, particularly Texas. Controlling exports to China could strengthen America’s negotiating position on rare earths—a pressure point China has repeatedly wielded, even against European companies. Potentially, the U.S. could also pressure Beijing and curb the subsidized Chinese export machine. These are substantial arguments on the path to U.S. reindustrialization.

Simultaneously, discussions suggest the U.S. government’s core aim is to push back Chinese influence in South American key resource markets—echoing the Monroe Doctrine. China’s response to Nicolás Maduro’s detention was surprisingly restrained. Beyond the expected diplomatic protest, Canadian Prime Minister Mark Carney’s visit to Beijing drew attention. Canada, as a resource giant, increasingly plays the counterweight to Donald Trump’s administration.

Alberta, Greenland, and the Subtle Shifts

Carney spoke over the weekend of discussions with China’s leadership on a new world order—a multipolar global order no longer centered on the United States. For China, the point was clear: Canada is effectively being pushed out of the U.S. refining business due to the planned reopening of Venezuelan oil fields. Canadian heavy oil is of high interest to China, which must now find alternative markets to counter growing U.S. pressure.

A minor footnote deserves attention: alongside the media frenzy over Greenland—a debate in Europe elevated to a NATO survival question due to the island’s resource wealth and strategic waterways—another discussion is emerging in the U.S. and Canada: the future of Alberta. President Trump has repeatedly referenced this, opening the door to secession speculation. Could a referendum—still speculative—result in Canada losing access to a significant portion of its resources if Albertans vote for independence? This debate merits close monitoring, as it could offer deep insights into future resource markets and geopolitical control.

Strategic Metal: Silver

Maduro’s detention opens the U.S. potential insight into South American trade relations with China, particularly in resources. Key questions remain: which quantities were transferred outside official trade balances, which resources specifically, and to what extent were U.S. sanctions circumvented? These factors will likely play a decisive role in the coming years as the global economy decouples.

If it turns out that Venezuela exported strategically important resources like silver to China in significant amounts, the U.S. could now fundamentally alter the dynamics of the global resource order. The core question arises: was the American intervention really only about Venezuelan heavy oil?

Last summer, the U.S. officially declared silver a strategic metal. Since then, silver prices have surged, confirming suspicions that both China and the U.S. are stockpiling heavily. Silver is indispensable for building AI data center infrastructure and electric motors.

There is also a monetary dimension: growing U.S. and Chinese concentration of strategic metals increases pressure on Europe’s currency system. The world increasingly moves toward metal-backed monetary systems, with central banks hoarding for balance-sheet stability. Metals are gaining global weight as a stabilizing economic and financial foundation.

China now enforces a comparatively strict silver export regime. Industrial demand is expected to rise sharply in coming years, making questions about Venezuela’s actual resource flows crucial—far beyond oil.

Control of key sea routes, systematic displacement of Chinese presence in the Panama Canal and U.S. West Coast ports, and securing access to strategic resources—including Greenland—regardless of Europe’s stance, are elements of a broader strategy. The U.S. is forcing a bifurcation: a geopolitical division into two spheres of influence—U.S. and Chinese.

This split has been decades in the making, accelerated by China’s rise. Historically, it is hard to halt without risking major military conflict. Coordination between the U.S. and China in this economic decoupling is key to minimizing conflict.

Bifurcation of World Order

The U.S. is determined to consolidate its role in the Western Hemisphere and—likely in coordination with Beijing and Moscow—gradually retreat into its self-defined power zone. This is not weakness but strategic calculation in a fragmented world order.

Regarding the so-called Greenland crisis: the EU plays no real role in the global resource scramble. European states import roughly 60% of their energy. The failed attempt to secure resources from Russia via regime change and a defeat in Ukraine highlights the EU’s geopolitical impotence.

Deploying a small European force to Greenland to limit U.S. influence underscores Europe-U.S. tensions. Trump responded by raising tariffs by 10%, threatening 25% if Europe’s stance did not change—revealing the stark asymmetry of power. Brussels appears as a paper giant.

Given this imbalance, Europe’s failure to forge a political alliance to adopt a cooperative U.S. approach is puzzling. Brussels and London opt for confrontation, a path likely leading to further economic losses. Europe’s strength lies in aligning with U.S. market regimes, abandoning hidden climate protectionism, and activating its robust domestic market. Geopolitically, the fight is lost, only recoverable via sensible economic policy.

Attempts via Mercosur to secure trade leeway in South America have been underwhelming. The agreement largely enforces Brussels’ climate regulations, already straining European business, leaving true free trade as distant as ever.

Tyler Durden Sun, 01/18/2026 - 22:10

One Chart Says Time To Reload On This Commodity

The precious metals landscape in recent times has been nothing short of record-breaking. New highs in gold and silver, but some of that momentum has been blown off on Thursday after a softer tone from President Trump on Iran eased safe-haven demand. Platinum, palladium, and other metals, such as copper, also cooled today, but one strategic commodity has yet to move higher in the metals bull run.

That one strategic commodity that has yet to break out from multi-year lows is ammunition.

It's a consumable input to military power, law enforcement capability, and civilian deterrence, and remains deeply depressed relative to the broader hard-asset complex.

The ammunition industry remains stuck in a multi-year glut because of overproduction runs from the Covid period, when firearm and ammo demand went through the roof because the Democratic Party's dark-money NGOs unleashed protest and riots nationwide, and in some cases, burned entire city blocks down.

Los Angeles Riots 2025, Marxists Burn Waymos

Now, with renewed left-wing chaos emerging in Minneapolis and a clearer understanding of how violence is used as a political pressure against the Trump administration by unhinged left-wing activists, the setup becomes even clearer. Elevated social unrest risk is returning - all other metals are much higher, but ammunition prices for the most common round in America, 9mm, remain depressed around 20 cents per round.

Ammunition checks every box for why it's a strategic commodity: it only becomes valuable when chaos erupts or supplies are threatened.

It's probably time to reload.

Tyler Durden Sun, 01/18/2026 - 21:35