What we’re reading (1/30)
“How Fed Pick Warsh Survived Trump’s Ultimate Reality Show” (Wall Street Journal). “Warsh had something Hassett didn’t: an extensive network of CEOs, finance bigwigs and creatures of the GOP establishment that he had cultivated over decades. He relied on that network to stay solidly in the conversation. It didn’t hurt that his father-in-law, Estée Lauder heir Ronald Lauder, is a major Republican donor and longtime Trump acquaintance. At a private conference in New York in December, JPMorgan Chase CEO Jamie Dimon said Warsh would make a great chair, according to people familiar with his remarks…Trump told associates over the holidays that he had been struck by Warsh’s acumen and good looks.”
“Silver Plunges 30% In Worst Day Since 1980, Gold Tumbles As Warsh Pick Eases Fed Independence Fear” (CNBC). “Gold and silver prices plunged Friday, as President Donald Trump’s nomination for the next chair of the Federal Reserve, Kevin Warsh, appeared to relieve concerns about the central bank’s independence and sent the dollar soaring.”
“The $100 Billion Megadeal Between OpenAI And Nvidia Is On Ice” (Wall Street Journal). “[T]he two sides are rethinking the future of their partnership, some of the people said. The latest discussions, they said, include an equity investment of tens of billions of dollars as part of OpenAI’s current funding round.”
“Saks To Close Most Of Its Off 5th And Last Call Discount Stores” (CNN Business). “By shutting down the discount stores, Saks Global’s attention has shifted to its luxury offerings at Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman. It’s a major shift for the company, which floundered under a heavy debt load following its purchase of rival Neiman Marcus in 2024. However, even before the purchase, the company was already in a precarious financial situation.”
“A Lot Of Population Numbers Are Fake” (David Oks). “[W]e simply have no idea how many people live in many of the world’s countries.”
What we’re reading (1/29)
“Fed Contender Kevin Warsh Meets With Trump Ahead Of Announcement” (Wall Street Journal). “Kevin Warsh, one of the finalists to be the next Federal Reserve chair, met with President Trump at the White House on Thursday, according to people familiar with the matter, one day before the president is set to announce his choice to lead the central bank.”
“Trump Says He’ll Announce Fed Chair Nominee On Friday Morning As Kevin Warsh’s Odds Soar” (Yahoo! Finance). “President Trump said Thursday that he will announce his nominee to be the next chair of the Federal Reserve on Friday morning. Trump told reporters Thursday night at the premier of First Lady Melania Trump's movie, "Melania," that he would announce the decision Friday morning. Asked whether he knew who he'd nominate to the role, Trump said: ‘I do.’”
“Apple Sales Surge 16% On ‘Staggering’ iPhone Demand” (CNBC). “Finance chief Kevan Parekh said that Apple expects revenue this quarter to rise between 13% and 16% on an annual basis, which would be equivalent to between $107.8 billion and $110.66 billion. Analysts polled by LSEG were expecting $104.84 billion. Apple said it expects constrained iPhone supply during the period.”
“School Is Way Worse For Kids Than Social Media” (Unpublishable Papers). “In short, school sucks so much that it reliably makes students want to hide at home, visit the ER, and take their own lives. The data has been completely clear on these points for years.”
“Iran Elite ‘Transfer $1.5bn To Dubai’ As They ‘Abandon Ship’ Amid US Strike Fears” (Daily Express). “US Treasury Secretary Scott Bessent revealed on Wednesday that Washington is monitoring what he characterized as a massive exodus of capital by Iran's ruling class, as anxieties mount over the potential downfall of the Islamic Republic amid widespread unrest and looming threats of American military action.”
What we’re reading (1/28)
“Fed Holds Interest Rates Steady In First Policy Meeting Of 2026 In Split Decision” (Yahoo! Finance). “The Federal Reserve held interest rates steady in a range of 3.5%-3.75% in its first meeting of the year, as widely expected. The decision was not unanimous, and two Federal Open Market Committee officials dissented. Federal Reserve governors Stephen Miran and Chris Waller voted to cut interest rates by 25 basis points.”
“What The Slide In The Dollar Means For Trade, Travel And Investment” (Wall Street Journal). “Wall Street is betting there will be more weakness to come, potentially ending a yearslong run in which the dollar has far outstripped many peers, enticing investors the world over to park more money in America.”
“Dow, S&P 500, Nasdaq Futures Slip As Tesla, Meta, Microsoft Diverge After Earnings” (Yahoo! Finance). “Meta (META) surged as much as 10% in extended trading after issuing a first-quarter revenue outlook that topped Wall Street estimates, even as it said its AI ambitions would fuel spending to as much as $135 billion this year. Tesla (TSLA) gained around 2% after reporting quarterly results that exceeded expectations. But Microsoft (MSFT) slid nearly 7% as investors reacted to slower cloud growth during its fiscal second quarter and higher-than-anticipated capital spending and finance lease costs. Amazon (AMZN) fell in tandem in after-hours action.”
“When All Bets Are Off, All Bets Are On” (Wall Street Journal). “A new study of speculative financial behavior over more than two centuries finds exactly what anyone with common sense would have predicted: People take more risk when stocks go up and the economy is booming, and it can last surprisingly long. ‘Epochs of high speculation coincide with higher stock market returns and higher economic growth,’ write economic historians William Quinn, John Turner and Clive Walker. They add that ‘a prolonged period of low interest rates can lead to the gradual development of a culture of more speculative investment.’”
“Behavioral Economics Of AI: LLM Biases And Corrections” (Pietro Bini, Lin William Cong, Xing Huang, and Lawrence J. Jin). “Do generative AI models, particularly large language models (LLMs), exhibit systematic behavioral biases in economic and financial decisions? If so, how can these biases be mitigated? Drawing on the cognitive psychology and experimental economics literatures, we conduct the most comprehensive set of experiments to date—originally designed to document human biases—on prominent LLM families across model versions and scales. We document systematic patterns in LLM behavior. In preference-based tasks, responses become more human-like as models become more advanced or larger, while in belief-based tasks, advanced large-scale models frequently generate rational responses. Prompting LLMs to make rational decisions reduces biases.”
What we’re reading (1/27)
“Trump Has Four Finalists To Run The Fed. None Of Them Are Exactly What He Wants.” (Wall Street Journal). “The difficulty: Trump wants something that may not exist—a new chair who will pursue his demands for lower interest rates while still commanding enough credibility on Wall Street and from his colleagues to deliver them.”
“Weekly Market Pulse: Maybe We Need Our Golden Fetters” (Alhambra Investments). “This is, in my opinion, the most interesting chart in all of finance. This shows the return from gold versus the total return of the S&P 500 since 1/1/2000. As you can see, gold’s return has exceeded that of stocks by almost 3 to 1; it isn’t even close. If you had bought gold at the turn of the century, at no point over the next 25 years would you have been better off having bought the S&P 500 instead. There were periods of outperformance by stocks so you could have done better if you were able to trade those inflection points, but for buy and hold investors, the 21st century has, so far, been the Golden Century. Is gold trying to tell us something or is it just the latest object of speculation in a society increasingly addicted to gambling?”
“Trading Robinhood On Robinhood And Other Circularities” (Owen Lamont). “There’s been much discussion about circular deals in AI; I myself am skeptical that these deals are cause for alarm. But there’s another circularity that’s flying under the radar: Robinhood (the stock) is one of the top holdings of the customers of Robinhood (the company). As of December 2025, Robinhood is the 26th most popular holding of Robinhood customers. Another example is Moomoo, a retail broker similar to Robinhood. On the list of U.S. stocks most popular with Moomoo customers, you’ll usually find the ADR of Moomoo’s parent company.”
“Why Nike Is Cutting Hundreds Of Jobs, Starting At Its Warehouses” (MarketWatch). “In a statement Monday, the sneaker maker said it was ‘taking steps to strengthen and streamline our operations so we can move faster, operate with greater discipline and better serve athletes and consumers.’”
“Inside The Savannah Bananas: $80M+ In Ticket Sales, $50M+ In Merch, And A $1B Valuation Debate” (Huddle Up). “The Bananas played 113 games last year across college, minor league, MLB, and NFL stadiums. At 2.2 million tickets sold, the Bananas would have ranked 20th in MLB ticket sales, ahead of the Cincinnati Reds, Cleveland Indians, Washington Nationals, Baltimore Orioles, Minnesota Twins, and 2x more than the Miami Marlins (1.1M).”
February picks available soon
I’ll be publishing the Prime and Select picks for the month of February before Monday, February 2 (the first trading day of the month). As always, SPC’s performance measurement for the month of January, as well as SPC’s cumulative performance, will assume the sale of the January picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Friday, January 30).
What we’re reading (1/24)
“Airlines Cancel More Than 13,000 Weekend Flights As Massive Winter Storm Sweeps Across The U.S.” (CNBC). “Airlines canceled more than 13,000 U.S. flights this weekend as a massive winter storm swept across the country, bringing heavy snow, ice and sleet, followed by bitter cold. More than 4,000 flights on Saturday were canceled, according to flight tracker FlightAware. Many of Saturday’s cancellations were in and out of Dallas Fort Worth International Airport, with nearly 1,500 scrubbed flights, and at Dallas Love Field, with 190 cancellations, the majority of the schedule at each airport.”
“The Wall Street Star Betting His Reputation On Robots And Flying Cars” (Wall Street Journal). “The job Jonas has is about as far away from the crustaceans as Earth is from Mars. Jonas, 51, is the bank’s chief robot strategist, a role it created for him in the fall. His actual title: global embodied AI strategist. The role is a first for Morgan Stanley as it dives deeper into the boom in private markets, an increasingly lucrative area across Wall Street. The ultrawealthy are able to buy and sell shares of the buzziest private companies via invite-only transactions long before the companies list their shares on public stock exchanges. The number of public companies in the U.S. is half of its peak in the late 1990s.”
“Streaming And Texting On The Moon: Nokia And NASA Are Taking 4G Into Space” (CNN Business). “Texting on the Moon? Streaming on Mars? It may not be as far away as you think. That’s the shared vision of NASA and Nokia, who have partnered to set up a cellular network on the Moon to help lay the building blocks for long-term human presence on other planets. A SpaceX rocket is due to launch this year — the exact date has yet to be confirmed — carrying a simple 4G network to the Moon. The lander will install the system at the Moon’s south pole and then it will be remotely controlled from Earth.”
“Schrödinger’s Cat Just Got Bigger: Quantum Physicists Create Largest Ever ‘Superposition’” (Nature). “Schrödinger’s cat just got a little bit fatter. Physicists have created the largest ever ‘superposition’ — a quantum state in which an object exists in a haze of possible locations at once. A team based at the University of Vienna put individual clusters of around 7,000 atoms of sodium metal some 8 nanometres wide into a superposition of different locations, each spaced 133 nanometres apart. Rather than shoot through the experimental set up like a billiard ball, each chunky cluster behaved like a wave, spreading out into a superposition of spatially distinct paths and then interfering to form a pattern researchers could detect.”
“Which One Doesn’t Belong?” (Scott Sumner). “Modern $20 bills and bitcoin are both examples of fiat money. They are not backed by any sort of real asset such as gold or silver, and their values are determined by a combination of “monetary policy” and private sector shocks to money demand.”
What we’re reading (1/22)
“The Deal To Secure TikTok’s Future In The US Has Finally Closed” (CNN Business). “The transaction’s close concludes a yearslong effort to secure TikTok’s long-term future in the United States and address concerns that it posed a national security risk.”
“Natural-Gas Prices Soar As U.S. Braces For Arctic Blast” (Wall Street Journal). “Natural-gas prices have jumped 63% this week in response to forecasts calling for some of the coldest, snowiest weather in years to freeze the country from the West Texas desert to the Great Lakes. The forecasts have stoked fears of a repeat of the deadly winter storm that froze Texas in 2021 and left millions of people without electricity for days. Energy producers and utilities are preparing for the worst. The Energy Department late Thursday ordered grid operators to be prepared to take extraordinary steps to tap in to backup power generation.”
“Intel Stock Plunges 13% On Soft Guidance, Concerns About Chip Production” (CNBC). “Intel said it expected first-quarter revenue between $11.7 billion and $12.7 billion, and breakeven adjusted earnings per share. That came in below LSEG expectations of 5 cents earnings per share on $12.51 billion in sales.”
“This Stock-Market Indicator Just Flashed One Of Its Most Bullish Signals Since 2000” (MarketWatch). “The average short-term timer that my firm tracks reduced recommended equity exposure on Tuesday by almost 20 percentage points, as judged by the Hulbert Stock Newsletter Sentiment Index. That’s one of the biggest one-day HSNSI drops since 2000, which is how far back data extend.”
“Teaching Economics To The Machines” (Hui Chen, Yuhan Cheng, Yanchu Liu & Ke Tang). “Structural economic models, while parsimonious and interpretable, often exhibit poor data fit and limited forecasting performance. Machine learning models, by contrast, offer substantial flexibility but are prone to overfitting and weak out-of-distribution generalization. We propose a theory-guided transfer learning framework that integrates structural restrictions from economic theory into machine learning models. The approach pre-trains a neural network on synthetic data generated by a structural model and then fine-tunes it using empirical data, allowing potentially misspecified economic restrictions to inform and regularize learning on empirical data. Applied to option pricing, our model substantially outperforms both structural and purely data-driven benchmarks, with especially large gains in small samples, under unstable market conditions, and when model misspecification is limited. Beyond performance, the framework provides diagnostics for improving structural models and introduces a new model-comparison metric based on data-model complementarity.”
What we’re reading (1/21)
“Trump’s Head-Spinning Greenland U-Turn” (Wall Street Journal). “The about-face started with an hourlong speech at the World Economic Forum, where the U.S. president said he wouldn’t deploy the military to take control of Greenland. Later, following a meeting with North Atlantic Treaty Organization Secretary-General Mark Rutte, Trump called off promised tariffs on European nations, contending that he had ‘formed the framework of a future deal’ with respect to the largest island in the world.”
“Stocks Rebound After Trump Backs Off European Tariffs” (New York Times). “Stocks stabilized on Wednesday, recouping much of Tuesday’s sell off after President Trump backed down from his previous threat of imposing more tariffs on any European ally that went against his plan to take over Greenland. Mr. Trump said that the tariffs, originally planned to start at the beginning of next month, were no longer necessary because he had reached ‘the framework of a deal’ related to Greenland with European counterparts.”
“Big Tech Earnings Put Spotlight On AI And Memory Shortage As Trump Tariff Threats Loom” (Yahoo! Finance). “AI will undoubtedly lead the conversation. As in prior quarters, questions remain about how companies are monetizing their vast investments in the red-hot technology and whether hyperscalers like Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) and social media giant Meta (META) will continue to increase spending.”
“Trump Warns Powell Won’t Be ‘Very Happy’ If He Stays On At Fed” (Bloomberg). “‘We’ll see how it all works out,’ Trump said in an interview from Davos, Switzerland with CNBC that aired Wednesday. But when pressed on Powell potentially staying on as a Fed governor until 2028, Trump who has been searching for a replacement chair, cautioned that ‘if that happens, his life won’t be very, very happy, I don’t think.’”
“Howard Lutnick Heckled At World Economic Forum Dinner” (Financial Times). “The gathering on Tuesday night descended into uproar after combative remarks from Lutnick, the people said, with widespread jeering, some guests walking out and appeals for calm from Fink, head of the world’s largest asset manager and interim co-chair of WEF.”
What we’re reading (1/20)
“The $100 Billion Of U.S. Goods At Risk Of Tariffs In Trump’s Greenland Push” (Wall Street Journal). “The European Union created a list of hundreds of categories of American products last year that it planned to target with import duties if trade talks with the U.S. unraveled. Those levies were put on hold after the two sides struck a deal last summer, but are set to kick in on Feb. 7 unless the bloc acts to extend the suspension.”
“US Oil Production Now 20% Of Global Oil Production” (Torsten Slok). “US oil production has increased dramatically over the past 15 years…and most of the rise is used for exports[.]”
“Is A Stock Market Rotation Underway? These Sectors Are Outpacing Tech In 2026” (Morningstar). “The market is showing hints of a rotation early this year as small-cap companies rise and the tech sector stumbles, reversing stock market trends from 2025. ‘We are most definitely seeing a rotation, and it has picked up some momentum from the end of last year,’ says Michael Arone, chief investment strategist at State Street. Large-cap companies ended 2025 on a high with gains of 19.78%, ahead of their small- and mid-cap counterparts. But early data points to a possible David-and-Goliath reversal. Small-cap companies’ gains have reached 5.57% in the year to date, while large caps have gained a mere 0.56%. Analysts are also seeing signs of a reversal in sector results. Tech is currently the worst-performing sector, losing 0.40% this year. That’s a major shift after 2025’s AI investment boom lifted tech to second best across all US market sectors.”
“Shifting Tides In Global Markets: The Reemergence Of International Investing” (Enterprising Investor). “After more than a decade of US market dominance, 2025 may have marked a turning point for global investors. International equities have surged ahead of their US counterparts, evidenced by strong earnings growth and supported by policy reform momentum and a reassessment of ‘American exceptionalism.’”
“NYSE To Launch New Venue For Tokenized Stocks” (Ledger Insights). “The New York Stock Exchange (NYSE) is developing a platform to trade and settle tokenized stocks 24/7, though the initiative requires regulatory approval before launching. Additionally, parent company Intercontinental Exchange (ICE) is working with BNY and Citi to support tokenized deposits at its clearing houses, marking new banking partnerships beyond its earlier collaboration with stablecoin issuer Circle.”
What we’re reading (1/19)
“Global Leaders Gather In Switzerland To Ponder The Future Of A Messy World” (New York Times). “Topics of discussion at Davos — according to U.S. and European analysts and former policymakers interviewed ahead of the event — are likely to include Russia’s war with Ukraine; prospects for global trade and markets; the probability of China invading Taiwan; and the risks of a Middle East flare-up caused by the recent uprising in Iran.”
“The Risk Of Higher U.S. Inflation In 2026” (Peter Orszag, Adam Posen). “The consensus view among forecasters is that inflation will continue its gradual descent toward the Federal Reserve's 2 percent target through 2026. Similarly, market pricing suggests investors believe the Fed has largely won its inflation battle. In our view, however, this optimism is premature. We think it is more likely that inflation will surprise to the upside — potentially exceeding 4 percent by the end of 2026. The core drivers are the lagged effects of tariffs, an expansion in the fiscal deficit (which could exceed 7 percent of GDP this year), a tighter labor market reflecting the effects of the shift in immigration policy, monetary policy that is looser than commonly appreciated, and inflationary expectations that are drifting upwards. We believe these factors outweigh the downward‑pressure trends that consensus has been fixated on—namely, the ongoing decline in housing inflation and gains in productivity.”
“Even MBAs From Top Business Schools Are Struggling To Get Hired” (Wall Street Journal). “At Duke University’s Fuqua School of Business, for instance, 21% of job seekers were still looking for work three months after graduation last summer. About 15% of those at the University of Michigan’s Ross School of Business remained on the hunt. Those rates are similar to 2024 but sharply higher than 2019, when many employers couldn’t hire enough white-collar professionals. Just 5% of job-seeking M.B.A.s graduating from Duke then were still looking for work three months postgraduation. At Michigan that year, it was 4%.”
“UK Productivity Surge Signals Economic Turnaround, Study Finds” (Bloomberg). “Britain is seeing early signs of a long-awaited turnaround of its productivity woes, according to an alternative measure that suggests output per hour worked has risen at a pace not seen since before the financial crisis. The Resolution Foundation said a ‘blistering’ productivity surge has been masked by problems with official statistics and pointed to encouraging indications of a clearout of ‘zombie’ firms that contribute little to the economy.”
“Why London’s Chimney Sweeps Are Enjoying A Resurgence” (New York Times). “The mass adoption of central heating in the second half of the 20th century, and the introduction of clean air regulations, meant open fires fell out of fashion and the industry shrank. But some firms survived. Now, many sweeps, including those in the Firkins family business, say the trade has been experiencing an improbable resurgence. According to the National Association of Chimney Sweeps, demand has been bolstered by high energy prices, the popularity of wood-burning stoves and an international climate that has prompted warnings that electricity supplies could be vulnerable to attack by hostile states like Russia.”
What we’re reading (1/18)
“The Magnificent Seven Drove Markets. Now They’re Pulling In Different Directions.” (Wall Street Journal). “The Magnificent Seven is now the Mag Five. Or is it the Fab Four? Investors are no longer grouping the market’s big tech stocks together in quite the same way. The fortunes of what was once Wall Street’s favorite band of megacap names have diverged in the past year, as professional and ordinary investors alike take a more cautious view of the artificial-intelligence spending boom. Only Alphabet and Nvidia outperformed the S&P 500 in 2025.”
“Financialization: How Deficits Inflate Profits And Equity Valuations” (Research Affiliates). “The mid-twentieth-century U.S. economy was built on a foundation of robust domestic saving and investment that created a virtuous cycle of broadly shared growth in prosperity. Seventy years later, that foundation has eroded. Corporate profits and equity valuations have soared even as the net investment that once propelled growth has fallen by more than half. What explains this paradox? The answer is the financialization of the economy.”
“Why The Tech World Thinks The American Dream Is Dying” (Wall Street Journal). “Sheridan Clayborne, a young man working in the AI-startup scene, seemed to embody the current zeitgeist when he was quoted this past fall in the San Francisco Standard. ‘This is the last chance to build generational wealth,’ the online news site quoted him saying. ‘You need to make money now, before you become a part of the permanent underclass.’ It was a sentiment that would have felt at home a few years earlier during the meme-stock craze and YOLO investing approach.”
“Where Meta’s Metaverse Vision Went Wrong” (Yahoo! Finance). “The idea was that users would eventually work and play in interconnected virtual worlds via 3D avatars using full headsets or high-tech glasses. Five years and billions of dollars later, that vision appears to have crumbled.On Wednesday, Meta laid off 1,500 workers from its Reality Labs division, which houses its metaverse business, and shuttered three VR game studios. In December, the company put planned third-party VR headsets from ASUS and Lenovo, which were to run on Meta's VR operating system, on hold, according to Engadget.”
“Investors Sell Dollar, Seek Safety As Trump Threatens Greenland Tariffs” (Reuters). “Investors headed for safe havens while Europe prepared to push back on Monday after U.S President Donald Trump threatened escalating tariffs on allies in the way of his ambition to buy the Danish arctic territory of Greenland.”
What we’re reading (1/17)
“Claude Is Taking The AI World By Storm, And Even Non-Nerds Are Blown Away” (Wall Street Journal). “They call it getting ‘Claude-pilled.’ It’s the moment software engineers, executives and investors turn their work over to Anthropic’s Claude AI—and then witness a thinking machine of shocking capability, even in an age awash in powerful artificial-intelligence tools. Many coders spent their holiday breaks on a “Claude bender,” testing out the capabilities of the latest Anthropic model, Claude Opus 4.5, which they used within a desktop coding tool called Claude Code…Some described a feeling of awe followed by sadness at the realization that the program could easily replicate expertise they had built up over an entire career.”
“Move Over, ChatGPT” (The Atlantic). “Part of what works so well about Claude Code is that it makes it easy to connect all sorts of apps. Sara Du, the founder of the AI start-up Ando, told me that she is using it to help with a variety of life tasks, like managing her texts with real-estate agents. Because the bot is hooked up to her iMessages, she can ask it to find all of the Zillow links she’s sent over the past month and compile a table of listings. ‘It gives me a lot of dopamine,’ Du said. Andrew Hall, a Stanford political scientist, had Claude Code analyze the raw data of an old paper of his studying mail-in voting. In roughly an hour, the bot replicated his findings and wrote a full research paper complete with charts and a lit review.”
“Is This Billionaire A Financial Genius Or A Fraudster?” (New York Times). “Bitcoin has attracted plenty of prophets, braggarts and flat-out baddies. Of late, though, no one in the industry is attracting more attention and scorn than Mr. Saylor, a would-be magnate and accused tax scofflaw who in six short years has transformed his also-ran technology company, Strategy, into a Bitcoin betting machine.”
“Stocks, Bubbles & Market Myths” (Barry Ritholtz). “Perhaps the Mag 7 dominance is fading; if five of these seven companies underperformed the S&P 500, that means the other 493 companies are catching up in both price appreciation and (eventually) earnings growth.”
“Growth Experiences And Trust In Government” (Timothy Besley, Christopher Dann, Sacha Dray, QJE). “Exploiting cohort-level variation, we find that individuals who experience higher GDP growth are more prone to trust their governments, with larger effects found in democracies. Higher growth experiences are also associated with improved perceptions of government performance and living standards. We find no similar channel between growth experience and interpersonal trust. Second, more recent growth experiences appear to matter most for trust in government, with no detectable effect of growth experienced during one’s formative years, closer to birth or before birth. Third, we find evidence of a “trust paradox” whereby average trust in government is lower in democracies than in autocracies.”
What we’re reading (1/16)
“The Global Memory-Chip Shortage Will Cost Us All” (Wall Street Journal). “Prices for memory shot up 50% in the last quarter of 2025 and are projected to increase another 40% to 50% by the end of the first quarter of 2026, according to Counterpoint Research, fueled mainly by builders of data centers, who are willing to pay huge premiums.”
“Stock Investors’ Strategy For 2026: ‘Don’t Fight The White House’” (New York Times). “The U.S. attack on Venezuela sent the value of some oil stocks surging. Mr. Trump’s social media post calling for a cap on credit card interest rates caused the stocks of credit card issuers to slump. And after the president proposed new requirements governing Nvidia’s computer chip sales to China, that tech giant’s stock also fell, weighing on the rest of the market.”
“Why This CEO Won’t Let Private Funds Near His Company’s 401(k)” (Wall Street Journal). “Because of unfamiliarity, concern about high fees and the threat of lawsuits, employers are wary of adding nontraded investments to their 401(k)s. Cerulli Associates, a consulting firm, projects that by 2030, only about 7% of sponsors of 401(k) and similar retirement plans will offer an investment option that includes some private assets. Sullivan thinks employers offering 401(k)s should be even more skeptical. Private and public assets are profoundly different. In a private fund, as Sullivan has learned, even small details can turn into big stumbling blocks.”
“When Housing Policy Becomes Monetary Policy” (Cato Institute). “Basically, the administration is asking Fannie and Freddie to engage in the kind of large-scale asset purchases (LSAPs) the Fed used in the wake of the 2008 financial crisis and the COVID-19 pandemic. LSAPs are controversial even when conducted by the central bank charged with managing monetary policy. Having the GSEs carry out a similar strategy represents a significant expansion of their role and a dangerous institutional precedent. Fannie and Freddie were never designed to function as alternative monetary authorities.”
“Gold Falls As Trump Hesitates On Hassett As Fed Chair Pick” (Bloomberg). “Gold slipped the most in more than two weeks after US President Donald Trump expressed reluctance about nominating Kevin Hassett as Federal Reserve chair, casting further doubt over his search for the next head of the central bank.”
What we’re reading (1/15)
“Powell Investigation Upends Final Stretch Of Fed Chair Contest” (Wall Street Journal). “The criminal investigation into Federal Reserve Chair Jerome Powell threatens to upend the contest over whom President Trump will choose to succeed him as it enters its final stretch. The episode is creating new obstacles on Capitol Hill and raising hard questions about whether any nominee can be seen as independent—tension that was always present but is now much harder to ignore. Trump has made clear he prizes loyalty in his pick, but the Justice Department probe—which Powell said was part of a pressure campaign to get the Fed to lower interest rates—threatens to make that quality a liability.”
“Understanding Long-Term Winners In Emerging Markets” (Larry’s Substack). “Emerging markets have long captivated investors with their promise of rapid economic growth and diversification benefits. However, despite this allure, the reality has been sobering: since the 2008 global financial crisis, emerging market equities have underperformed U.S. equities by almost 10% annually. MSCI’s Anil Rao and Rohit Gupta, authors of the study ‘Long-Term Investing in Emerging Markets: Identifying Drivers of Total Shareholder Return in Emerging Market Equities,’ published in the Winter 2025 issue of The Journal of Investment Beta Strategies, dug into this puzzle, uncovering why some companies thrived while the broader market struggled.”
“Investors Should Not Be Barred From Buying Homes” (Issues & Insights). “The true portion of single-family homes owned by these “plunderers,” those holding 1,000 or more properties, is in reality much lower than 4%. They ‘make up just 2% of all investor-owned homes,’ says CNBC. Ninety percent of the market is actually under the ownership of small investors who have ‘10 properties or less.’”
“Stagflation In 2025. Overheating In 2026.” (Torsten Slok). “In 2025, we worried that the trade war and immigration restrictions would lead to stagflation. With those headwinds fading, the list of tailwinds keeps growing, and we are starting to worry about overheating in 2026. The bottom line is that there are significant upside catalysts to growth and inflation over the coming quarters[.]”
“Did Iran’s Currency Collapse? Rial Plummets To ‘0.00’ Against Euro While Inflation & Protests Escalate Across The Country” (The Sunday Guardian). “In a major blow, the Iranian currency, the rial, has effectively lost its value in Europe, dropping to zero against the euro. As a result, the rial can no longer be exchanged across European countries, further isolating Iran from the global financial system. Inside the country, the situation has deteriorated sharply, with ordinary citizens struggling to afford even basic necessities.”
What we’re reading (1/14)
“Tech Selloff Weighs On Nasdaq; Precious Metals Scale New Peaks” (Wall Street Journal). “Stocks retreated Wednesday, with the Nasdaq composite leading declines as Nvidia and other chip stocks such as Broadcom traded lower. On Tuesday, the Trump administration said Nvidia must meet new security requirements before sending H200 artificial-intelligence chips to China.”
“The Confidence Paradox” (Larry’s Substack). “This divergence between sentiment and fundamentals signals an unease about the sustainability of current conditions. Beneath the surface of steady GDP growth and resilient employment figures, 11 significant risks are developing that warrant consideration.”
“Supply - Demand Imbalance And Commodities” (Disciplined Systematic Global Macro Views). “The current supply-demand imbalance is not just a gold problem, but a silver problem. In fact, there is a supply imbalance with nickel, cobalt, copper, palladium, rhodium, and aluminium, along with a rare earths supply change problem. Surprisingly, all of these imbalances have been documented yet are only now being recognized.”
“Gold, Silver, Copper Surge As Explosive Rally Sweeps Over Metals Market” (Yahoo! Finance). “Gold futures hit a high of $4,650 per troy ounce, marking a 5% year-to-date gain. Wall Street analysts upped their forecasts in recent days in light of the recent US intervention in Venezuela, geopolitical tensions with Iran, and growing questions about Federal Reserve independence.”
“Age Of Invention: Tudor Trade War” (Anton Howes). “The places that protested, in other words, were where the raising of the wage caps would have felt the most out of step with their rising costs; but also where their costs would have fallen furthest and fastest upon the resumption of trade, which would explain why there was no further complaint upon the wage caps being lowered again the following year. In any case, regardless of what really happened in 1495-7 to the wage caps, the effects were brief. But the labour laws were indisputably in force in again, and their enforcement had been significantly tightened. They were soon — as I’ll explain in the next instalment — to become more painful and restrictive than ever before. If the effects of Henry VII on England’s economy were severe, the son whose succession he readily sacrificed it for, Henry VIII, were to be downright devastating.”
What we’re reading (1/13)
“Here’s The Inflation Breakdown For December 2025 — In One Chart” (CNBC). “Progress in the fight to throttle back inflation appeared to stall in December amid price pressures from groceries, dining out, utility gas, clothing and other categories of consumer spending.”
“Fed’s Barkin Calls December Inflation Data Encouraging” (Reuters). “Richmond Federal Reserve President Tom Barkin on Tuesday called December's inflation data "encouraging," though he noted inflation often spikes at the start of the year and said he hopes it will come in at modest levels for the next couple of months.”
“The Copper Boom Is Just Getting Started” (Semafor). “The meteoric rise in the price of copper will likely continue thanks to a growing supply deficit that could reach 10 million metric tons — 25% of projected demand — by 2040, according to a new forecast from S&P Global.”
“Top Risks For 2026” (Eurasia Group). “It's a time of great geopolitical uncertainty. Not because there's imminent conflict between the two biggest powers, the United States and China—that isn't even a top risk, it's a red herring this year. There's not (yet, at least) a second Cold War, with a rising China remaking the global system to its own liking, the Americans and allies resisting. Nor do tensions between the United States and Russia threaten to spiral out of control despite a war raging in Europe, the result of Vladimir Putin's longstanding grievances against the US-led order.”
“More Americans Are Surviving Cancer — Even The Deadliest Ones” (The Washington Post). “More Americans diagnosed with cancer are now surviving the disease — marking a positive trend that experts say reflects the effectiveness of early prevention and detection strategies, and advancements in treatment and care. New findings from the American Cancer Society’s annual report released Tuesday show for the first time that the five-year survival rate for all cancers has reached 70 percent, with the most notable survival gains occurring among people diagnosed with more fatal cancers such as myeloma (a blood cancer), liver cancer and lung cancer.”
What we’re reading (1/12)
“Lawfare For Dummies, Monetary Edition” (Wall Street Journal). “This brings to mind the medieval episode of England’s King Henry II idly importuning some knights to rid him of Archbishop Thomas Becket, only to be surprised when they actually did it. That historical episode proved self-defeating for the king (Becket became a saint and Henry lost his fight for supremacy over the church), and this one may not work out better for Mr. Trump. His saner advisers are worried that Wall Street will view this as an attack on the Fed’s institutional independence, which it is.”
“Powell Investigation: Drumbeat Of Republican Opposition Grows On Capitol Hill” (CNBC). “The GOP resistance could derail Trump’s eventual pick to succeed Powell when the Fed chief’s term is up in May, as North Carolina Republican Sen. Thom Tillis, a member of the Senate Banking Committee, threatens to block any nominee to the central bank until the investigation is resolved. Tillis’ comments are now being echoed by other Republicans.”
“Former Officials Say DOJ Probe Threatens Fed Independence, Has ‘No Place In The United States’” (Yahoo! Finance). “‘The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine [the Fed's] independence,’ said the statement signed by former Fed Chairs Janet Yellen, Ben Bernanke, and Alan Greenspan, as well as four past Treasury secretaries who served under both Republican and Democratic presidents.”
“David Ellison Takes Warner Bros. To Court As Paramount Launches Proxy Battle Over Netflix Bid” (The Hollywood Reporter). “In a letter to WBD shareholders Monday, Paramount CEO David Ellison said his company has filed suit against WBD in Delaware seeking greater financial disclosure of the Netflix deal. Additionally, Ellison said his company plans to nominate its own slate of directors for WBD’s board who they believe would vote against the deal with Netflix.”
“Venezuela Stocks Soar 130% To Record Highs As Maduro’s Ouster Spurs Economic Turnaround Hopes” (CNBC). “Venezuela’s stock market has not only shrugged off the capture of former President Nicolás Maduro by U.S. forces, it has surged to a record high as investors bet that the battered economy could finally see a turnaround. The country’s benchmark Indice Bursatil de Capitalizacion, or IBC, has gained more than 130% since the U.S. operation on Jan. 3.”
What we’re reading (1/11)
“Fed Served With DOJ Subpoenas, Powell Vows To Stand Firm” (Bloomberg). “Federal Reserve Chair Jerome Powell said the US central bank had been served grand jury subpoenas from the Justice Department threatening a criminal indictment, a dramatic escalation of the Trump administration’s attacks on the Fed.”
“Wall Street Is Making Bullish Bets On The Economy” (Wall Street Journal). “Call it the glass half-full market. In recent weeks, government data has been mixed, showing both disappointing job gains and robust economic growth. But U.S. investors have been focusing on the positive side of things, piling into bets that suggest that they have strong confidence that the economy will keep powering forward.”
“‘Inflation Will Surprise To The Downside In 2026’: Why Wall Street Expects Juiced Economy, Stock Gains This Year” (Yahoo! Finance). “Investors may be "having a cake and eating it" in 2026, with Wall Street strategists predicting stock market gains driven by Fed rate cuts, tax incentives, and lower-than-expected inflation.”
“The Landlords Are Not The Problem” (New York Times). “Landlords are not the cause of the nation’s housing crisis, and any plan that reduces investment in housing is only going to make matters worse. The crisis is a simple problem with a complicated solution. The problem is that the United States does not have enough housing. The hard part is building more. It is certainly easier, and perhaps better politics, to talk about barring investors, or imposing rent controls, or kicking immigrants out of the country, but none of that is going to do the trick. The way to make housing more affordable is to build more housing.”
“Credit Growth Accelerating In The US And Europe” (Torsten Slok). “Data for bank lending points to a gradual recovery in the US and Europe[.]”
What we’re reading (1/10)
“Hedge Funds Get Ready For The ‘Donroe Doctrine’ Trade” (Wall Street Journal). “Call it the ‘Donroe trade.’ After the brazen capture of Venezuelan strongman Nicolás Maduro, investors are racing to capitalize on President Trump’s ambitions to dominate the Western Hemisphere. Hedge funds and other investment firms, already boosted by a sharp rally in Venezuelan debt, are mapping out trips to Caracas to scope out on-the-ground opportunities. Some are investigating niche instruments, like arbitration claims and unpaid state debts.”
“Wall Street’s Start To 2026 Is Going Exactly According To Plan. Are Investors Too Confident?” (CNBC). “Not only is the S&P 500 up 1.7% but the tape has broadened just as nearly every play caller has been demanding, with the equal-weighted S&P ahead by almost twice as much. The insistent consensus call heading into the year for a reacceleration in the real economy — propelled by tax-based stimulus and an administration desperate to ‘run it hot’ — has quickly been reflected in market leadership.”
“More Bonds Are Teetering On The Brink Of Junk: Credit Weekly” (Bloomberg). “Beneath the calm surface of the US corporate bond market, there are worrying signs about companies that could lose their investment-grade status. The first full week of the year has been one of the busiest for US corporate debt sales on record, and risk premiums stayed low even amid heavy issuance. But the amount of bonds teetering on the brink of junk surged last year, according to JPMorgan Chase & Co.”
“The Space War Will Be Won In Greenland” (UnHerd). “[O]ne factor remains underplayed. The United States is currently engaged in a fiercely contested space race with China, and, to a lesser extent, Russia. Space offers unlimited energy, unlimited resources, and unlimited internet connectivity — and the High North is crucial. This is because satellites that orbit from pole to pole must pass each pole with every orbit, which means that they fly over a given point in the High North far more often than a given point toward the Equator. As such, places like Svalbard are ideal locations for ground stations that keep in touch with constellations of satellites, be they commercial or military.”
“The Real Da Vinci Code” (Science). “Gonzalez-Juarbe’s swabs may have captured a biological clue. In a remarkable milestone in a decadelong odyssey, he and other members of the Leonardo da Vinci DNA Project (LDVP), a global scientific collective, report in a paper posted today on bioRxiv that they have recovered DNA from Holy Child and other objects—and some may be from Leonardo himself.”
What we’re reading (1/9)
“Gargantuan 'Big Tech' Investment Discredits 'Monopoly' Alarmism” (RealClear Markets). “There’s no such thing as monopoly in the technology sector, or for that matter any sector defined by intense dynamism. Precisely because the potential for outsize investment returns for disrupters in dynamic sectors is so enormous, stasis is tantamount to obsolescence.”
“Even Warren Buffett Couldn’t Keep Beating The Market Without Fail. Here’s Why.” (MarketWatch). “It’s important to focus on this investment lesson because hardly anyone else is doing so. Most of the articles memorializing Buffett’s phenomenal career have instead highlighted how much money you would have made if you had been lucky enough to invest in Berkshire Hathaway when Buffett started in the mid-1960s. While your cumulative (unannualized) return since then would be in the millions of percent, reporting that huge number does not help you become a better investor. Pointing this out isn’t a criticism of Buffett’s incredible abilities. But it’s important to stress that an investor as successful as Buffett will eventually attract so much money from others that even he will find it difficult to repeat his prior successes.”
“Wait, Tesla Is A Value Stock? Welcome To The Wacky World Of Factor ETFs” (Wall Street Journal). “When you crack open several funds that sound the same, you can find very different investments inside. That’s one of the most subtle, but important, lessons of 2025. As exchange-traded funds have become the default choice for millions of investors, it’s vital to understand that you can’t know what you’re going to get unless you take the time to look inside first. To see what I mean, consider factor ETFs, also called smart-beta funds. What’s a “factor”? It’s a set of characteristics, shared by large numbers of companies, that shape risk and return—for example, value or momentum. Academic research has shown that many factors have outperformed the overall market over the long run.”
“Trump Calls For One-Year Cap On Credit Card Rates At 10%” (Bloomberg). “President Donald Trump on Friday called for a one-year cap on credit card interest rates at 10%, effective Jan. 20, without specifying details. ‘Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY!’ he wrote on social media.”
“Trump Posted Unpublished Jobs Data Early On Social Media” (Bloomberg). “President Donald Trump posted a chart on social media Thursday evening that included figures in the yet-to-be released December employment report. The chart, which showed the private sector added 654,000 jobs ‘since January,’ matched figures that were not publicly published until 8:30 a.m. in Washington on Friday. It was posted on Truth Social about 12 hours before the data was set to be released.”