Futures Fall On Friday The 13th As CPI Looms

US equity futures are lower in a scary start this Friday the 13th, having given up modest overnight gains, as Investors - already on high alert for any further signs of the "AI scare trade" - braced for Friday’s inflation reading and any clues it holds on what happens next for interest rates.  As of 8:00am ET, S&P and Nasdaq futures are down by 0.2%, having flipped between gains and losses after a three-day S&P 500 losing streak and especially Thursday's brutal 1.6% cash-market slump, which DB's Jim Reid described as "Friday 13th coming a day early for risk assets yesterday." In pre-market trading, Mag-7 all names are weaker ahead of the long weekend, but there are some bright spots within Energy / Mats / Fins but, so far, pre-mkt trading does not point to another significant de-risking. Bond yields climb 1-2bps across the curve with the belly underperforming and USD rallying. Commodities are retracing some of yesterday’s losses led by precious metals. Crude oil futures fell on a report that some OPEC+ nations see scope for output hikes. Today’s macro focus is on CPI and if any new AI "Obsolescence" trades emerge. 

In premarket trading, Mag 7 stocks are all lower (Alphabet -0.7%, Amazon -1.0%, Apple -0.4%, Nvidia -0.3%, Meta -0.8%, Microsoft -0.6%, Tesla -0.8%).

• Airbnb (ABNB) is up around 4.8% after the travel-booking platform’s first-quarter revenue forecast exceeded the average analyst estimate.
• Applied Materials (AMAT) is up 11% after the semiconductor capital equipment company reported first-quarter results that beat expectations and gave an outlook for adjusted earnings that is above the analyst consensus.
• DraftKings (DKNG) slides 15% after the sports betting company’s revenue forecast for 2026 missed the average analyst estimate.
• Dutch Bros (BROS) jumps 13% after the coffee chain reported adjusted earnings per share for the fourth quarter that surpassed Wall Street estimates.
• Pinterest (PINS) is down around 20% after the social media company’s first-quarter forecast was weaker than expected.
• Tri Pointe Homes (TPH) rose 27% after Sumitomo Forestry says it will acquire the company for around $4.28 billion.

In corporate news, Goldman Sachs’ top lawyer, Kathy Ruemmler, is leaving the firm following a cache of Department of Justice documents showing her links with sex offender Jeffrey Epstein.

The sharp swings this week have highlighted how quickly shifts in sentiment around AI can reverberate far beyond the technology sector. The so-called AI scare trade has seen knee-jerk selloffs in sectors from logistics to software providers amid fear the technology will hurt their businesses.  Meanwhile, investors are watching Friday’s January inflation print to see if it reinforces strong jobs numbers earlier in the week, which prompted traders to curb bets on interest-rate cuts by the Federal Reserve. The median forecast predicts a year-over-year increase of 2.5% for the core consumer price index.

“What could help the market is if inflation comes in softer than expected,” said Joachim Klement, head of strategy at Panmure Liberum. “The strong labor market data earlier this week has reduced hopes for rate cuts by the Fed, yet if inflation continues to cool off, we think the Fed might be willing to add more rate cuts in the mix.”

Punishment has turned “brutal” for any stocks perceived to be at risk from AI disruption, according to Joel Kulina, managing director for TMT trading at Wedbush Securities.The worries over AI-fueled disruption underscore a sea change in market sentiment. Enthusiasm for the technology drove the lion’s share of stock market gains over the last few years.  That’s been replaced by concerns that the newest tools released by Google, closely held AI developer Anthropic and a slew of lesser-known startups are already good enough to threaten a wide array of companies, many far outside the umbrella of technology.

“The number one issue for the market: AI has now become a net negative, pressuring equities,” Kulina says. “‘Sell first, ask questions later’ has been the mentality on a day-to-day basis this month. Megacaps remain capital intense, likely leading to less free cash flow and buybacks on one hand, while decimating legacy industries due to fears of severe disruption on the other.” In the latest such episode, Algorhythm Holdings, a former karaoke company turned AI developer with a stock-market value of only $6 million, announced a logistics platform that triggered a 6.6% slide in the Russell 3000 Trucking Index on Thursday.

Volatility, already stirring, may flare up further as traders square off positions to cut risk before the Presidents’ Day holiday on Monday and Lunar New Year holidays in China and several other Asian markets next week. After Wednesday’s surprisingly strong jobs report prompted traders to pare bets on rate cuts by the Fed, inflation data numbers due at 8:30 a.m. ET have added significance. “The CPI tends to run hot in January as businesses often hike prices in the beginning of the year, a phenomenon that statistical adjustments can’t completely strip out,” according to Bloomberg Economics chief economist Anna Wong. She expects headline consumer prices to rise 0.20% month-on-month, slower than the 0.31% increase in December. Remove volatile food and energy prices, and core consumer prices are predicted to rise 0.31% in January, up from 0.24% the previous month.

European stocks extend declines from the prior session. Stoxx 600 down 0.5% technology stocks outperform as a selloff in sectors deemed at risk from artificial intelligence eases, while basic resources lag on reports the Trump administration is planning to scale back some tariffs on steel and aluminum goods. FTSE 100 and the DAX slightly outperforming.Here are some of the biggest movers on Friday: 

• Safran shares rise as much as 8% to a record high, after the French engine manufacturer improved its guidance for 2026 and lifted its outlook for 2028, expecting a strong civil engines aftermarket and momentum on defense.
• RELX shares rise as much as 5.9%, the most since April, after BofA Securities said the information and analytics provider is one of its top stocks for this year and that this week’s results shows the recent de-rating is overdone.
• DataWalk shares surge as much as 7.2%, bucking a broader selloff on the Warsaw Stock Exchange, after the Polish data processing company’s accelerated book-building saw shares priced above Thursday’s closing level.
• Kalmar shares gain as much as 8.2%, hitting a record high, after releasing its fourth-quarter results and announcing a “major order” from Maher Terminals for 30 hybrid straddle carriers.
• NatWest shares swing between gains and losses on Friday after the UK lender posted a strong profit beat, currently trading 1.5% down as Shore Capital analysts flag its outlook is yet to take the recently announced deal to buy Evelyn into account.
• L’Oréal shares drop as much as 7%, the most since October, after the beauty company reported like-for-like sales for the fourth quarter that missed the average analyst estimate.
• Tomra shares drop as much as 9.3%, the most since October, after the recycler reported fourth quarter revenues below consensus and DNB Carnegie said it sees “muted” collections.
• SSAB shares slide as much as 8.9%, leading a drop in European miners after the Financial Times reported the Trump administration is planning to scale back some tariffs on steel and aluminum goods, which would ease market disruptions.
• Norsk Hydro shares fall as much 6.6%, the most since 2023, as analysts called the company’s guidance weak, due to soft pricing and pressure in the aluminum extrusions business.
• Elkem shares fall as much as 13% in Oslo, the most since July, after the company agreed to sell the majority of its silicones division to Bluestar — a deal in which “many investors might have thought there would be a sale for cash,” Morgan Stanley analysts write.
• Huhtamaki shares decline as much as 5.5% following the Finnish consumer packaging firm’s fourth-quarter results, which DNB Carnegie noted showed organic sales continuing to decline.

Earlier in the session, Asian stocks fell, as the region’s AI-driven rally took a breather after US tech shares tumbled overnight. Shares in Hong Kong led losses ahead of the Lunar New Year holiday. The MSCI Asia Pacific Index fell as much as 1.5%, snapping five days of gains. Still, the gauge is on track for its best week since September 2024, after hitting fresh records every day this week through Thursday. Equity benchmarks in Japan, South Korea and mainland China also fell. Despite the near-term pullback, Asian stocks have demonstrated resilience against the broad selloff driven by Wall Street’s fears of business disruption caused by artificial intelligence. The region is seeing more foreign demand as investors rotate away from crowded US trades and seek exposure in Asia’s AI supply chain. Equity markets in mainland China and Taiwan will remain shut all of next week, while Hong Kong is closed for three of the days. 

Citigroup is raising the pay of CEO Jane Fraser to $42 million for 2025, making her among the best compensated US banking heads. Clear Street, a Wall Street broker built on cloud computing technology, postponed its IPO after cutting the target by nearly two thirds. And Coinbase Global showed how quickly a cooling crypto market can pressure even one of the industry’s most diversified exchanges. Revenue in the fourth quarter tumbled a more-than-estimated 20% to $1.8 billion as falling token prices drained trading activity across digital assets.

“Today’s pullback looks like a healthy pause within a broader upward trend,” said Tareck Horchani, head of sales trading, prime brokerage at Maybank Securities in Singapore. “Near term, I expect choppier price action driven by global tech sentiment and positioning flows, but the underlying earnings trajectory, especially in semiconductors, and sustained foreign inflows should continue to provide support once liquidity normalizes.”

In FX, the Bloomberg Dollar Spot Index up 0.2%, with yen and the Aussie dollar underperforming. Russia’s central bank cut rates by 50bps versus expectation for a hold.

In rates, treasuries are little changed in early US session, holding most of Thursday’s curve-flattening gains as focus shifts to January US CPI report at 8:30am New York time. Yields remain within 1bp of Thursday’s closing levels, the 10-year near 4.11%, lagging bunds and gilts in the sector by 2bp-3bp. 2s10s spread is near 65bp, about 6bp flatter on the week.

In commodities, WTI crude oil futures fell on a report that some OPEC+ nations see scope for output hikes. Gold is steadying short of $5,000/oz.

Friday's US economic calendar slate includes January CPI at 8:30am. No Fed speakers are scheduled

Market Snapshot

• S&P 500 mini -0.2%
• Nasdaq 100 mini -0.2%
• Russell 2000 mini -0.2%
• Stoxx Europe 600 little changed
• DAX +0.1%
• CAC 40 -0.2%
• 10-year Treasury yield +2 basis points at 4.12%
• VIX -0.4 points at 20.47
• Bloomberg Dollar Index +0.1% at 1183.57
• euro -0.1% at $1.1857
• WTI crude +0.2% at $62.99/barrel

Top Overnight News

• The US and Taiwan signed a trade deal to cut tariffs and boost access for American products in Asia, including a pledge by Taipei to buy more than $44 billion worth of LNG and crude. BBG
• Ukraine and Russia peace talks process remain stuck, primarily over territorial concessions and security guarantees. Politico
• OpenAI told US lawmakers that DeepSeek used unfair methods to extract results from leading rival models to train its next-gen chatbot. BBG
• The Central Intelligence Agency released a new video on Thursday seeking to capitalize on upheaval at the top of China’s armed forces to recruit potential spies. WSJ
• Trump is planning to scale back some tariffs on steel and aluminum goods as he battles an affordability crisis that has sapped his approval ratings ahead of November’s midterm elections. FT
• Bank of Japan policy board member Naoki Tamura floated the possibility that the bank could soon declare that its price target has been achieved, as the nation’s inflation is becoming stickier. WSJ
• The Pentagon is sending the Navy’s largest and most advanced aircraft carrier to the Middle East, as the U.S. steps up plans for a potential attack on Iran, two U.S. officials said. WSJ
• Tech and banking trade groups are among others that are urging the Trump administration to not change the federal framework they have been using to safely deploy AI: Axios 

Trade/Tariffs 

• China and the US held an anti-drug intelligence exchange meeting on February 10th-12th, Xinhua reported; both sides agreed to promote healthy and practical anti-drug cooperation.
• China's Ministry of Commerce holds a roundtable with German firms; hopes that German companies can increase investment in China.
• US President Trump plans to roll back tariffs on metal and aluminium goods, according to FT.
• Japan's Trade Minister Akazawa engaged with US Commerce Secretary Lutnick on US-bound investment initiatives and confirmed progress on talks to launch the USD 550bln investment.
• Taiwan President Lai said trade deal with US marks a pivotal moment for Taiwan's economy and industries, adds we secured significant benefits for Taiwan's industries and overall economy, and we solidified the Taiwan-US high-tech strategic partnership.
• US Department of Commerce increases duties on Chinese battery-grade graphite to 160% related to Novonix (NVX).
• US and Taiwan sign a reciprocal trade agreement with Taiwan to eliminate or reduce 99% of tariff barriers on US goods, while US confirms 15% tariff rate on Taiwanese goods.
• US and North Macedonia agreed to a trade framework with the US to impose 15% tariff on North Macedonian goods, while North Macedonia is to eliminate all tariffs on US goods.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly lower as the region took its cue from the losses stateside, where tech underperformed as AI-disruption concerns re-emerged, and logistics/industrials stocks were also pressured after Algorhythm Holdings (RIME) released its AI freight scaling tool. ASX 200 was dragged lower by losses in tech stocks, and as participants also digested earnings releases. Nikkei 225 retreated at the open after recent currency strength and with focus also on earnings reports, including from SoftBank, which returned to profit in Q3 but missed expectations, while its shares were also not helped by its AI exposure. Hang Seng and Shanghai Comp suffered alongside the broad downbeat mood in the region, and despite reports that President Trump paused some China tech bans ahead of his summit with Xi in April, while it is also the last trading day in the mainland before the Lunar New Year and Spring Festival holiday closures.

Top Asian News

• Chinese New Yuan Loans (Jan) 4710B vs. Exp. 5000B (Prev. 910B).
• Chinese M2 Money Supply YoY (Jan) Y/Y 9% vs. Exp. 8.4% (Prev. 8.5%).
• Chinese Total Social Financing (Jan) 7220B vs. Exp. 7050B (Prev. 2210B).
• Chinese Outstanding Loan Growth YoY (Jan) Y/Y 6.1% vs. Exp. 6.2% (Prev. 6.4%).
• Chinese House Price Index MM (Jan) Y/Y -0.4% (Prev. -0.4%).
• Chinese House Price Index YoY (Jan) Y/Y -3.1% (Prev. -2.7%).

European bourses (STOXX 600 -0.1%) are trading mixed as the end of the week nears. SMI (+0.6%) leads its European peers, closely followed by the AEX (+0.5%). On the other hand, the CAC 40 (-0.2%) is the slight laggard following a mixed bag of earnings coming out of France. European sectors are mixed. Technology (+1.3%) sits comfortably at the top of the pile, followed by Insurance (+0.6%) and Industrial Goods  and Services (+0.5%). Upside in Tech follows on from the earnings by Applied Materials, which posted positive earnings and Q2 forecasts. Sitting at the bottom lies Basic Resources (-1.3%), as miners react to the selloff in metals prices. Consumer Products and Services (-0.7%) is weighed on by L'Oreal (-3.5%) post-earnings.

Top European News

• UK PM Starmer is set to call for multinational defence initiative to cut costs of rearmament, according to FT

FX

• DXY is currently trading with very mild gains and trades at the midpoint of a 96.89-97.15 range. Really not much driving things for the index this morning, with traders awaiting the US CPI report later. On that, the headline is expected to rise +0.3% M/M (prev. 0.3%), and core rising at a rate of 0.3% M/M (prev. 0.2%). UBS said easing inflation should keep the Fed on track for rate cuts despite strong jobs data, forecasting two 25bps reductions in June and September, while FOMC projections indicate one additional cut this year. In terms of recent price action, ING notes that there has been a strong inclination to sell USD rallies this week, as such, analysts “struggle to see the dollar recover substantially from here”.
• G10s are mixed against the USD, with the NZD and CAD holding around the unchanged mark, whilst the CHF, AUD and JPY hold towards the foot of the pile, with the latter the clear underperformer. EUR was little moved by the EZ GDP 2nd estimates and Employment change, which printed more-or-less in-line with expectations.
• Really not much driving things for the JPY this morning, with the weakness potentially a slight paring of a four-day winning streak seen following PM Takaichi’s landslide victory. Focus has been on Takaichi’s remarks that she will adhere to fiscal responsibility, with attention also on comments via FinMin Katayama, who noted that the foodstuff tax cut could be funded by foreign reserves. On the monetary policy side of things, markets now see the chance of faster BoJ normalisation; on that, BoJ’s Tamura (Hawk) suggested inflation is becoming “sticky”, and flagged the chance of a rate hike “this spring”. On the neutral rate, he suggested that the policy rate is “very distant” from the neutral rate. USD/JPY was little moved by his comments, and currently trades at the upper end of a 152.63-153.66 range.
• CHF is slightly lower this morning, in the aftermath of the region’s inflation data; the Y/Y metric printed in-line with the consensus, whilst the M/M metric was a touch below the prior and surprisingly fell into negative territory. The CHF initially weakened on the report, before scaling back much of the pressure thereafter. It is worth reminding that SNB’s Schlegel suggested that the Bank is willing “look through negative months of inflation”, adding that the bar to negative rates is high.

Central Banks

• Fed's Miran (voter) said some of the concern he has on labour markets is a little less than he had before, adds a range of policies are pushing out the supply of the economy and will increase economic growth in a non-inflationary way. said:. Fed is one of the biggest risks to growth. Monetary policy has passively tightened. We may be underestimating how restrictive monetary policy actually is.
• BoJ's Tamura said he feels Japan's recent inflation is becoming sticky and reiterates will keep raising rates if outlook is met, adds we may be able to judge that BoJ's price goal has been achieved as early as this spring. Added that even if the BoJ raises the policy rate further, monetary conditions will remain accommodative.
• Japan's PM Takaichi is to meet with BoJ Governor Ueda on February 16th at 17:00JST / 08:00GMT.
• Japanese PM Takaichi's advisor Honda suggests the BoJ may consider raising interest rates later this year, but noted the unlikelihood of a hike in March.
• ECB's Kazaks said the ECB has yet to see full impact of EUR appreciation; he worries strong EUR reflects dollar weakness; said now is not the time for ECB to move interest rates; said ECB officials are on monitoring mode on EUR strength.
• PBoC's new emphasis on overnight money market rate has reportedly sparked speculation it could become the main policy target.
• Riksbank's Jansson said January inflation confirmed the picture of downside risks to inflation. Figures for GDP and consumption have been a little weaker recently.
• Russian Federation Interest Rate Decision 15.50% vs. Exp. 16% (Prev. 16.00%).

Fixed Income

• Another contained start for fixed income into US CPI and before Monday's US holiday, which coincides with the Chinese New Year holiday period.
• USTs on the backfoot, but only marginally, going into US CPI to round off a packed week of data. Currently, at the low-end of a 112-21 to 112-28 band, and while in the red as it stands, the upper-end of that band is a new marginal WTD peak.
• Bunds are also contained, though the benchmark finds itself firmer by a handful of ticks, but off best in 128.93 to 129.12 confines. The firmer APAC bias came from gains towards the end of the European day after German Chancellor Merz said he is not in favour of joint eurobonds, in addition to the read-across from a strong US 30yr auction.
• Gilts opened higher by nine ticks, catching up to the strength seen on that US auction. Since, the benchmark has retreated into the red with losses of c. five ticks in 91.34 to 91.51 parameters. Ahead of US CPI today but, more pertinently for the UK, next week's packed data docket that will likely determine if the BoE cuts in April as markets currently forecast, or if March comes into consideration.
• JGBs came under pressure to a 131.52 low after BoJ's Tamura said even if they tighten, monetary conditions will remain accommodative.
• Japan sold JPY 649.5bln in 10yr, 20yr and 30yr JGBs in enhanced liquidity auction; b/c 2.95 vs. Prev. 2.58. Highest accepted spread -0.014% vs. Prev. +0.018%. Allotment of bids at highest spread 2.5490% vs. Prev. 86.2119%.
• PBoC is to issue CNY 30bln in 3-month and 1-year bills in Hong Kong.
• Australia sold AUD 1bln 2.50% May 2034 bonds, b/c 3.44, avg. yield 4.2898%.

Commodities

• Crude benchmarks are trading relatively flat following yesterday’s slump after dollar strength and weak risk sentiment, sparked by AI disruption woes. Adding to further downside pressure were comments from US President Trump yesterday evening that the US must make a deal with Iran and that they could reach a deal over the next month. Not much in terms of fresh catalysts thus far in the European session, as traders await US CPI. WTI and Brent are trading at the lower end range of USD 62.54-63.17/bbl and USD 67.22-67.89/bbl, respectively.
• Precious metals are rebounding after yesterday’s decline, which was driven by a stronger US dollar following strong jobs data surpassing market expectation. There is no fresh catalyst behind today’s recovery, though some analysts attribute the move to dip-buying after the recent sell-off. Spot gold is currently trading near the upper end of USD 4,885.89–4,997.53/oz range, while silver is holding at the upper range of USD 73.745–79.085/oz.
• Copper trades slightly lower triggered by downbeat sentiment in Wall Street and APAC, although Europe fares somewhat better. The red metal trades at the lower end range of 12,800-13,021/t. Other relevant news in the metal space includes the Shanghai Weekly updating their Warehouse changes before the Chinese holiday: Copper +9.47%, Nickel +2.29%, Aluminium +21.3%.
• Indonesia's Mining Minister said we are studying a plan to ban exports on a number of raw materials next year, which includes tin.
• India's Reliance has reportedly been awarded general authorisation from the US to buy Venezuelan Oil.
• Three people reportedly burnt at Exxon's (XOM) Beaumont facility.
• Shanghai Weekly Warehouse Changes: Copper +9.47%, Nickel +2.29%, Aluminium +21.3%.
• ANZ revises gold price forecast, now sees gold hitting USD 5,800/oz in Q2 vs. previous forecast of USD 5,400/oz.
• Qatar hikes April term price for Al Shaheen oil to USD 0.87/bbl over Dubai quotes, according sources.
• Shenzhen financial regulator issues public notice to further standardise gold market operations.

Trade/Tariffs

• China and the US held an anti-drug intelligence exchange meeting on February 10th-12th, Xinhua reported; both sides agreed to promote healthy and practical anti-drug cooperation.
• China's Ministry of Commerce holds a roundtable with German firms; hopes that German companies can increase investment in China.
• US President Trump plans to roll back tariffs on metal and aluminium goods, according to FT.
• Japan's Trade Minister Akazawa engaged with US Commerce Secretary Lutnick on US-bound investment initiatives and confirmed progress on talks to launch the USD 550bln investment.
• Taiwan President Lai said trade deal with US marks a pivotal moment for Taiwan's economy and industries, adds we secured significant benefits for Taiwan's industries and overall economy, and we solidified the Taiwan-US high-tech strategic partnership.
• US Department of Commerce increases duties on Chinese battery-grade graphite to 160% related to Novonix (NVX).
• US and Taiwan sign a reciprocal trade agreement with Taiwan to eliminate or reduce 99% of tariff barriers on US goods, while US confirms 15% tariff rate on Taiwanese goods.
• US and North Macedonia agreed to a trade framework with the US to impose 15% tariff on North Macedonian goods, while North Macedonia is to eliminate all tariffs on US goods.

Geopolitics: Ukraine

• Russia's Kremlin said that new round of peace talks with Ukraine will take place next week; adds that its unlikely that discussions will move beyond talks before the conflict in Ukraine is settled.
• US, Russia and Ukraine are planning to meet again next week, possibly in Miami or Abu Dhabi, POLITICO reported.

Geopolitics: Middle East

• US aircraft carrier U.S.S Gerald R. Ford will be sent to the Middle East from Venezuela, according to officials cited by NYT.

Geopolitics: Other

• Russia's Deputy Foreign Minister Ryabkov said Russia will provide Cuba with material assistance, TASS reported.
• Russia's Kremlin said they did not decide to stop using the dollar but that the US imposed restrictions, dollar will have to compete with other currencies if the US lifts restrictions.
• Japan seizes a Chinese fishing boat off the Nagasaki coast, according to Japanese press.

US Event Calendar

• 8:30 am: United States Jan CPI MoM, est. 0.3%, prior 0.3%
• 8:30 am: United States Jan Core CPI MoM, est. 0.3%, prior 0.2%
• 8:30 am: United States Jan CPI YoY, est. 2.5%, prior 2.7%
• 8:30 am: United States Jan Core CPI YoY, est. 2.5%, prior 2.6%

DB's Jim Reid concludes the overnight wrap

Friday 13th came a day early for risk assets yesterday and although the sell-off is continuing this morning in Asia, US futures are more stable as I type. It’s perhaps indicative of the state of markets at the moment that a $6 million market cap company that until recently specialised in Karaoke helped wipe tens of billions off logistics stocks to add to the weakness. I've seen some shocking Karaoke performances in my time but this perhaps tops them all. Overall the S&P 500 (-1.57%) slid to a third consecutive decline. Once again, software stocks in the index were one of the worst hit, falling -1.49%, but it was a rough day for tech in general, with the Magnificent 7 (-2.24%) and the NASDAQ (-2.03%) both losing significant ground. Matters weren’t helped by some weaker US data, which added to the risk-off tone, leading to clear signs of financial stress across several asset classes. Indeed, Bitcoin (-2.92%) fell for a 4th consecutive session, credit spreads widened on both sides of the Atlantic, and silver (-10.67%) posted another sharp decline.

Tech stocks were in the driving seat of yesterday’s selloff, although unlike some sessions recently, the move was a broad-based one as investors reckoned with the AI-led disruption of various industries. In terms of the movers, Cisco Systems (-12.32%) was one of the worst performers, posting its worst daily performance since 2022 as investors reacted to its latest earnings. On some days, that would make the worst performer in the entire S&P, but there were 7 companies that saw a double-digit decline yesterday, which just shows the adjustment taking place. One of those double-digit declines was CH Robinson Worldwide (-14.54%), as global logistic companies were the latest industry to see artificial intelligence concerns as a very small AI logistics company called Algorhythm Holdings (formerly a Karaoke company) said its SemiCab platform helped customers scale freight volumes by 300% to 400% without a corresponding increase in headcount. The Russell 3000 trucking index fell -6.64% as companies of all size reacted to the news.

Old fears were rekindled within commercial real estate as well as CBRE (-8.84%), a commercial real estate company, saw large losses for a second day following comments from their CEO saying “If there are less office workers in the long run as a result of AI, there will be less demand for office space. That would be a long-term trend to unfold.” So, the market continues to price in further AI disruption across industries, sometimes in the most abstract way.

S&P Financials (-1.99%) also saw a sharp decline, as the KBW Bank Index (-3.21%) posted its worst performance since October. And there were signs of the selloff broadening out, with the equal-weighted S&P 500 (-1.31%) falling back from its record high the previous day, whilst Europe’s STOXX 600 (-0.49%) also fell back from Wednesday’s record. European credit markets were relatively steady as EUR IG was unchanged at 75bps, while EUR HY spreads were just 1bp wider to 264bps. USD IG spreads were 2bps wider to 77bps and USD HY spreads moved 12bps wider to 275bps.

Looking forward, attention will today turn to the US CPI print for January, which is a couple of days later than expected because of the partial government shutdown. This is an important one, because markets are still expecting further rate cuts under a new Fed Chair, but stronger data like the jobs report on Wednesday has led to a bit more doubt as to whether that’s still possible. So another hawkish print today would further push in that direction, particularly given this quarter is already seeing a decent fiscal impulse from the Trump tax cuts.
In terms of what to expect, our US economists forecast that monthly headline CPI would be at +0.26% in January, down from +0.31% in December. And if realised, that would take the year-on-year CPI rate down to +2.5%. However, they think that headline inflation would be weighed down by a -2.4% decline in motor fuel prices, meaning that core CPI should be relatively strong at +0.35% on the month.

Otherwise, they’re keeping an eye on tariff-related strength in core goods, as they expect a continued impact in categories like household furnishings and supplies, as well as apparel. For more details, click here for their preview and to register for their subsequent webinar.  
Ahead of that release, Treasury yields fell across the curve, driven by the wider risk-off move as well as some weaker US data. For instance, the weekly initial jobless claims were a bit higher than expected, coming in at 227k in the week ending February 7 (vs. 223k expected). Meanwhile, existing home sales were down to an annualised rate of 3.91m in January (vs. 4.15m expected). So that further dampened sentiment, and expectations for Fed rate cuts this year moved back up again. For instance, the amount of cuts priced in by the December meeting was up +5.3bps on the day to 53bps. And in turn, yields on 2yr Treasuries (-5.4bps) fell back to 3.456%, whilst the 10yr Treasury yield (-7.4bps) fell to 4.098%. Yields have moved back up +1 to +1.5bps across the curve this morning.

Oil prices had already been moving lower along with other risk assets, but the selloff gained momentum amid a bevy of headlines that pointed to greater supply. Brent crude futures closed -2.71% lower on the day, finishing at $67.52/bbl. First, there were comments from US Energy Secretary Wright that China had bought crude from the US that was previously purchased from Venezuela. This was followed by comments later in the day from Interior Secretary Burgum, who said during an event in Washington that the US would be selling Venezuelan oil to China at global market price levels. Bloomberg reported that Venezuelan officials are set to grant more oil permits to Chevron and Repsol, adding credence to the potential for further supply in the medium term. Staying with the US, President Trump reiterated his preference to “reach a deal” with Iran and said that it could come together “over the next month, something like that.” Additionally, there was reporting from Bloomberg that showed Russia had included returning to the dollar settlement system as part of a greater re-framing of the US-Russia economic relationship.

Staying in commodities, gold saw a sharp sell-off of their own despite its traditional haven status. The story of Russia returning to the dollar payment system probably contributed. Gold prices fell -3.19% to $4922/oz, while silver (-10.67%) and copper (-3.02%) also saw outsized moves. As noted above there was more crypto weakness as bitcoin fell -2.92% and is under 5% away from last week’s lows, which was the lowest level since October 2024.

Earlier in Europe, the main highlight yesterday was the EU leaders summit in Belgium. At the summit, EU leaders sought to move forward with reforms to bolster Europe’s economy and improve regional coordination. There were many proposals with various champions. French President Macron pushed a “Buy European” agenda, which remains on the table as European Council president Costa said, “ I feel that there is a broad agreement on the need to use (European preference) in the selected strategic sectors, in the proportional and targeted way.” German Chancellor Merz and Italian PM Meloni called for greater deregulation, with PM Meloni saying that the EU “ cannot continue to hyperregulate…there's no time to lose.” On the matter of greater joint debt,  most leaders were calling for greater stimulus, however Merz seemed unmoved saying, “We have taken on European debt in exceptional situations -- but those were exceptional situations…We have to make do with the money we have."

Across the Channel, UK gilts outperformed after the latest UK GDP print came in softer than expected. It showed Q4 GDP up by +0.1% (vs. +0.2% expected), which left annual GDP growth for 2025 at +1.3%. So with the downside surprise in the Q4 number, investors priced in more rate cuts from the Bank of England this year, and the 2yr gilt yield (-2.1bps) fell to just 3.60%, its lowest level since August 2024, whilst the 10yr gilt yield (-2.4bps) fell to 4.45%. And elsewhere in Europe, there was a smaller decline that left yields on 10yr bunds (-1.3bps), OATs (-1.5bps) and BTPs (-1.3bps) lower as well.

In Asia, the AI related sell-off continues, albeit after a strong week in the region. The Hang Seng (-2.10%) stands out as the largest underperformer, with the CSI (-0.92%) and the Shanghai Composite (-0.85%) also lower. The Nikkei (-1.22%) is also weak but its gains so far this week are close to +5.5% post the election results. Elsewhere the S&P/ASX 200 (-1.37%) is also lower after a firmer week with the KOSPI (-0.23%) outperforming.  S&P 500 and Nasdaq futures are down jus over a tenth of a percent with European ones back up a similar amount. As we go to print the FT is reporting that the US is planning to roll back some steel and aluminium tariffs that nods to our view that the tariffs headlines this year, whilst very noisy, will likely lean in a dovish direction ahead of mid-terms where the cost of living issue is likely to be decisive.

Early morning data revealed that China’s new home prices continued their decline in January, reflecting weak demand that is likely to further burden the country’s financially constrained developers. Prices decreased by -0.4% month-on-month, matching the decline observed in the previous month.

Looking at the day ahead, data releases include the US CPI print for January, and the second estimate of Euro Area GDP for Q4. Otherwise, central bank speakers include ECB Vice President de Guindos, and the BoE’s Pill.

Tyler Durden Fri, 02/13/2026 - 08:29

Aluminum Futs Slide As Trump Weighs Metal Tariff Rollback In Affordability Push

Aluminum futures in London slipped on Friday after a Financial Times report stated that the Trump administration is considering a partial rollback of steel and aluminum tariffs as it battles an affordability crisis (left over from the Biden-Harris regime years) ahead of November's midterm elections.

The FT cited three people familiar with internal discussions who said White House officials are reviewing steel and aluminum import tariffs of up to 50%, which affect a wide range of downstream consumer products such as appliances to soda cans. The plan would exempt some products, pause further expansions, and shift toward narrower, product-specific national security investigations.

Trade officials at the U.S. Department of Commerce and the Office of the U.S. Trade Representative believe these tariffs are already denting consumer sentiment by pushing up prices for goods such as drink cans and pie tins.

The administration is mulling carve-outs for popular food products to tame grocery-store inflation amid affordability concerns this year. Last year, Trump called for a trade war with Beijing ahead of the U.S. midterm elections.

News of the planned tariff rollback on aluminum and steel goods sent metal futures in London falling on Friday morning.

Aluminum slid 1.3% to $3,059 a ton on the LME. Zinc dropped 1.4%, while copper fell by about half a percent after available LME inventories posted their largest increase since July.

The Bloomberg Industrial Metals Subindex (core contracts: aluminum, copper, nickel, lead, and zinc futures) appears to have formed yet another peak since 2022 and is still trading well below its Covid-era high.

What is clear for companies operating in this space is that navigating the U.S. tariff regime has become arduous, with tariffs appearing to change monthly.

Tyler Durden Fri, 02/13/2026 - 08:20

Bitcoin Advances Toward Quantum Resistance With Proposed Update

Authored by Micah Zimmerman via Bitcoin Magazine,

BIP 360, a proposal aimed at preparing Bitcoin for future computing threats, has been updated and merged into the official Bitcoin Improvement Proposal (BIP) GitHub repository, marking a new step in efforts to strengthen the network against emerging cryptographic and quantum computing risks. 

The proposal introduces a new Bitcoin output type called Pay-to-Merkle-Root (P2MR), designed to support quantum-resistant script tree functionality while maintaining compatibility with existing Tapscript infrastructure, according to a note seen by Bitcoin Magazine.

Supporters of BIP 360 describe the proposal as an early move toward quantum-hardening Bitcoin at the protocol level.

A merge into the BIP repository does not signal endorsement or future activation. BIPs are merged as part of the open process for documenting or discussing potential upgrades.

BIP 360: Pay to Merkle Root

was published pic.twitter.com/GXkmTHnDoL

— Murch (@murchandamus) February 11, 2026

Bitcoin at risk from Quantum computing in theory

Quantum computing has raised concerns across the cryptography and cybersecurity fields because sufficiently advanced machines may be able to break widely used cryptographic systems.

In Bitcoin’s case, the threat centers on the possibility that computers could derive private keys from exposed public keys, which could lead to stolen funds.

While all Bitcoin addresses become vulnerable when spending reveals a public key, some output types carry greater exposure. 

Taproot addresses, along with Pay-to-Public-Key (P2PK) outputs and reused addresses, are considered more at risk because public keys are visible on-chain.

P2MR is conceptually similar to Taproot but removes a key weakness. Taproot includes a key-path spending method that can expose public keys. The proposed P2MR output type disables that key-path spend and commits only to the script path, reducing the surface area for potential attacks.

The BIP’s authors say the proposal is meant to serve as a foundation for later upgrades that could introduce post-quantum signature schemes into Bitcoin through follow-on soft forks. The note points to algorithms such as ML-DSA (Dilithium) and SLH-DSA (SPHINCS+) as possible candidates.

“Ultimately, the introduction of BIP 360 and P2MR is a first step in a larger set of quantum-resistance proposals that will be necessary to quantum-harden Bitcoin,” said co-author Hunter Beast, a Bitcoin developer and senior protocol engineer at MARA. 

Beast added that the team is also exploring proposals to address vulnerable coins that are unlikely to move, including long-dormant holdings.

The latest update adds Isabel Foxen Duke as a co-author alongside Beast and cryptographic researcher Ethan Heilman.

Duke, a technical communications specialist, said the goal was to make the proposal understandable beyond the developer community.

“Given the sensitivity of the subject matter, we aimed to ensure the BIP was written in a manner that was clear and understandable to the general public,” Duke said.

The proposal arrives as governments and major technology firms increase investment in post-quantum cryptography. 

The U.S. National Security Agency’s CNSA 2.0 framework calls for quantum-safe systems by 2030, while the National Institute of Standards and Technology plans to phase out elliptic curve cryptography in federal systems in the mid-2030s.

Supporters argue that BIP 360 aligns Bitcoin with a broader shift toward quantum-safe security standards, positioning the network to adapt as computing capabilities advance.

Tyler Durden Fri, 02/13/2026 - 08:05

Goldman Sacks Ruemmler As Epstein Scandal Claims Obama's Former Lawyer

What do Bill Clinton, Barack Obama, Susan Rice, Jeffrey Epstein, the Rothschilds, and Goldman Sachs all have in common?

Kathy Ruemmler... Goldman's (soon to be former) top lawyer, after a batch of documents released by Congress and the DOJ revealed she was thick as thieves with Epstein.

Ruemmler rose to the top ranks of Wall Street, becoming a key advisor to Goldman CEO David Solomon after serving as White House counsel to former President Barack Obama. 

While she allegedly told the bank that her relationship with Epstein was limited and "purely professional," turns out she lied (or they knew, which makes it worse). It would later become public that she not only met with Epstein dozens of times and exchanged friendly emails for years, she was listed as an executor of Epstein's will as recently as Jan. 18, 2019 - which had been removed before he died in prison on Aug. 10 of that year. 

What's more, the Washington Free Beacon reported late last month that Epstein showered her with luxury gifts - including a $9,400 Hermes handbag, a Hermes-branded Apple watch, and a spa treatment package at the Four Seasons Hotel in Washington DC. 

She also denied having ever helped Epstein with PR, telling the outlet "I did not advocate on his behalf to any third party—not to a court, not to the press, not to the government."

Turns out that was a total lie. 

On Friday, the DOJ released over 3 million pages of Epstein documents, including one in which Ruemmler was helping draft statements to help Epstein counter claims that he got a "sweetheart deal" when he was allowed to plead guilty to minor charges in a 2007-2008 sex trafficking case involving dozens of underage girls. 

Just over three weeks ago, Goldman vehemently denied that that plans were afoot to fire Ruemmler. Turns out, not so much. 

Kathy's Out

On Thursday, the Financial Times reported that Ruemmler will resign on June 30 - (aka they fired her and let her resign), saying in a statement to the outlet "I made the determination that the media attention on me, relating to my prior work as a defence attorney, was becoming a distraction."

Her decision comes after documents showed she held extensive discussions with Epstein between 2014 and 2019, long after he pleaded guilty in 2008 to state charges of soliciting prostitution from a minor. Ruemmler joined Goldman in 2020.

Goldman chief executive David Solomon has stood by Ruemmler since her close association with Epstein first emerged in 2023. He said in a statement on Thursday that she “will be missed”. -FT

Ruemmler has said she regrets ever knowing Epstein and that she didn't know about his criminal activities, which we're sure isn't just because she got caught. 

Interestingly, Ruemmler once arranged an advantageous settlement for the Rothschild family with the Obama DOJ, for which she was reportedly paid $10 million and Epstein was paid $25 million. 

Obama's lawyer Kathy Ruemmler and her buddy Epstein helped to arrange an extremely advantageous settlement for the Rothschilds with the Obama DoJ. For this, Kathy was allegedly paid USD 10 million and Epstein was paid USD 25 million.

The Rothschilds business was introduced to… https://t.co/P66nd9lplS pic.twitter.com/pwRABR3sVV

— Svetlana Lokhova (@RealSLokhova) February 12, 2026

Developing...

Tyler Durden Fri, 02/13/2026 - 08:00

Warsh Likes It Hot, And Will Move The Fed's Inflation Target To 2.5-3.5%

By Dhaval Joshi of BCA Research

Executive Summary:

• The Fed will run the US economy hot – because, with labour demand and supply now in balance, both demand and supply must expand to keep output expanding.

• Short-term US real rates will come down further because the Fed will continue to cut even with inflation in the 2.5-3.5 percent range.

• The US dollar will continue to weaken, given the currency’s dependence on real interest rate differentials.

• The US yield curve will undergo a ‘bear steepening’ as US inflation expectations ratchet higher. Meaning, T-bonds will underperform cash, as well as other major sovereign bonds.

• Stocks will continue to outperform bonds.

• New tactical trade: Overweight MSCI ACW Consumer Discretionary versus Industrials.

Some Like It Hot

The US economy has reached a watershed. For the first time since the pandemic, labor demand and labor supply are in perfect balance, with both now standing at 172 million workers.

Labor supply equals the number of available workers: those with jobs plus those without jobs. Labor demand equals the number of people in work plus job vacancies plus workers on temporary layoff. Many people miss this last component of labor demand. Labor demand must include workers on temporary layoff because there is demand for these workers, albeit they are on temporary layoff for idiosyncratic reasons (such as a government shutdown).

Put a different but equivalent way, the labor market is balanced when the number of ‘jobs looking for workers’ (job vacancies) equals the number of ‘workers looking for jobs.’ The latter means the unemployed. But given that those on temporary layoff are not looking for jobs, it more correctly means the unemployed that are not on temporary layoff.

The number of job vacancies and the number of unemployed not on temporary layoff both now stand at 6.6 million workers

So, correctly measured either way, the US labor market is now in balance.

A Labor Market In Balance Means Double Jeopardy

The US labor market is in balance, but such a balance is extremely rare. In the normal state, that prevailed for decades prior to the pandemic, labor demand runs short of labor supply. Meaning the economy is demand-constrained. 

Since the pandemic though, in a highly unusual state, the relationship flipped. Labor supply has been running short of labor demand. Meaning the economy has been supply-constrained.

The distinction between demand-constrained and supply-constrained is crucial because it is the constraint on the economy – the lower of demand and supply – that drives economic output.

In a normal demand-constrained economy therefore, a demand recession causes a GDP recession. In a supply-constrained economy however, it takes a supply recession to cause a GDP recession. This explains why the abnormally supply-constrained US economy cheated a GDP recession when demand went into recession through 2023-24. The growth in the constraint – labor supply – kept output growing.

Now though, the US economy is at a watershed that puts it in ‘double jeopardy’. Given that labor demand and labor supply are in perfect balance, a drop in either would cause output to contract.

Put another way, both demand and supply must expand. To counter this double jeopardy, the Fed must run the economy hot.

Stimulate demand. But also stimulate supply by creating conditions for labor participation to rise – to offset the Immigration and Customs Enforcement (ICE) expulsions of (illegal) migrant workers.

Don’t Bet On An AI-Driven Productivity Surge

If the US labor market is back in the balance it was pre-pandemic, then why is US wage inflation still running hotter than pre-pandemic?

You might counter that the just-released Employment Cost Index (ECI) showed quarter-on-quarter wage inflation slowing to just 3 percent (annualized rate). Yet quarter-on-quarter wage inflation is highly volatile. More meaningful is the smoother 4-quarter wage inflation rate, running at 3.4 percent.

You might further counter that even 3.4 percent achieves the target of 3.5 percent wage inflation that several Fed governors have claimed is consistent with 2 percent price inflation.

Yet 3.5 percent ECI inflation is not consistent with 2 percent price inflation.

The very well-established relationship between ECI inflation and core PCE inflation tells us that, to be consistent with core PCE inflation at 2 percent, ECI inflation must be at 3 percent

Again, you might counter that such a 1 percent gap between ECI inflation and core PCE inflation implies that productivity growth is 1 percent, which is implausibly low. Yet while other more comprehensive measures of productivity growth may show a higher number, 1 percent is the well-established gap between these two specific datasets.

Finally, you might counter that even this specific 1 percent gap should widen if AI boosts productivity growth, allowing wage inflation to run hotter. Yet, despite much wishful thinking, the fact that the gap has not widened warns us that we should not bet on an AI-driven productivity surge as our base case.

The Warsh Fed Will Let The US Economy Run Hot

The reason that wage inflation has gapped structurally higher versus the jobs-workers gap is that the composition of the US labor market has structurally changed. As I highlighted in Why The World’s Fate Hangs On 2.5 Million Older American,  there are almost 3 million fewer older workers in the US labor supply now than before the pandemic.

The loss of millions of older workers is significant because many jobs are non-fungible by age. Just as older workers cannot do younger-aged jobs that require physical strength or athleticism, younger workers cannot do older-aged jobs that require decades of acquired skills or experience.

Therefore, the shortfall of older workers has created an additional tightness in the US labor market which is not captured in the aggregate jobs-workers gap. Once we account for this additional tightness, we get a near-perfect explanation for the evolution of US wage inflation. 

To repeat, faced with the double jeopardy of declining labor demand or declining labor supply, the Fed will turn a blind eye to this structural uplift in wage inflation. It will do this by de facto moving its inflation target to 2.5-3.5 percent. In effect, a Warsh-led Fed will let the US economy run hot.

There are several investment conclusions:

• Short-term US real rates will come down further because the Fed will continue to cut even with inflation in the 2.5-3.5 percent range.
• The US dollar will continue to weaken, given the currency’s dependence on real interest rate differentials.
• The US yield curve will undergo a ‘bear steepening’ as US inflation expectations ratchet higher. Meaning, T-bonds will underperform cash, as well as other major sovereign bonds.
• Stocks will continue to outperform bonds, as the Fed runs the US economy hot.

New Tactical Trade: Overweight Consumer Discretionary Versus Industrials

Consumer Discretionary has underperformed Industrials by almost 20 percent through the last 65 trading days. But the collapsed complexity  of this near-vertical underperformance suggests that the magnitude and pace is overdone.

The potential pivot could be the market warming to the US consumer, given the combined effect of ultra-low US real interest rates, fiscal stimulus, and a still-robust labour market.

Hence, in line with our thesis that the Fed will run the US economy hot, and given the stark underperformance of Consumer Discretionary, a new tactical trade is to go overweight MSCI ACW Consumer Discretionary versus Industrials.

Set the profit target/stop-loss at +/-10 percent, and trade expiry on March 25th.

Tyler Durden Fri, 02/13/2026 - 07:20

Mercedes Warns Of Fresh Margin Squeeze As China Struggles Persist

Mercedes-Benz warned that profitability in its car division could come under renewed strain this year, underscoring a difficult outlook as the luxury group contends with elevated costs, weak demand in China and global trade tariffs, according to Reuters.

Shares fell as much as 5.7% after the announcement and were down 3.1% by mid-morning trade on Thursday.

Presenting 2025 results that fell short of expectations, CEO Ola Kaellenius told investors, "The rules are changing," adding, "We are fundamentally reinventing the company."

The automaker projected a 2026 adjusted return on sales of 3% to 5% in its core cars unit, compared with 5% last year — below the 5.4% analysts had forecast. Group operating profit dropped 57% to 5.8 billion euros, missing the expected 6.6 billion euros, hit by roughly 1 billion euros in tariff costs, adverse currency effects and sliding sales in China.

Reuters writes that while management expects a marked rebound in operating profit this year following 1.6 billion euros in redundancy charges in 2025, challenges in China persist. Finance chief Harald Wilhelm said car sales there are likely to decline again in 2026 after a 19% fall last year, as competition intensifies against domestic rivals and peers such as Volkswagen and BMW.

Mercedes is banking on an aggressive rollout of 40 new models over the next three years — beginning with its updated flagship S-Class — to regain momentum in the world’s largest auto market.

Over the longer term, the company aims to lift margins in its autos division back to 8%–10%, supported by what it called "relentless cost discipline." Measures include job reductions launched in 2025 and expanded production in lower-cost locations such as Kecskemet, Hungary. Analysts at Jefferies said the medium-term target "looks confident but may be questioned."

Tyler Durden Fri, 02/13/2026 - 06:55

My end-of-week morning paraskevidekatriaphobia WFH reads:

• The Big Money in Today’s Economy Is Going to Capital, Not Labor: Soaring profits and stocks funnel more of GDP toward companies, their top employees and shareholders. AI will intensify this trend. (Wall Street Journal)

• A Stanford Experiment to Pair 5,000 Singles Has Taken Over Campus: A student built a matchmaking algorithm called Date Drop that has consumed the school—and highlighted the challenges of finding love for high achievers. It has become an all-consuming force on campus, pairing thousands of students every Tuesday night at 9pm. Turns out the best and brightest can crack quantum physics but not “hey, wanna get coffee?” (Wall Street Journal) see also How a Math Genius Hacked OkCupid to Find True: Love Mathematician Chris McKinlay hacked OKCupid to find the woman of his dreams. (Wired)

• Who Is Paying for the 2025 U.S. Tariffs? First, 94 percent of the tariff incidence was borne by the U.S. in the first eight months of 2025 (Liberty Street Economics)

• How the Merrill Lynch deal made Bloomberg: Lessons from The origin story of how a single trade terminal contract with Merrill Lynch transformed Michael Bloomberg’s startup into a financial data empire. Bloomberg-Merrill Lynch in an Anthropic era. (Substack)

• The shadowy world of abandoned oil tankers: Over the past year there has been a big rise in the number of oil tankers and other commercial ships being abandoned around the world by their owners. What is causing the spike? And what is the human impact on the affected merchant sailors? (BBC)

• The secret to happiness? These experts say it’s feeling loved by others. A happiness researcher and a relationship expert teamed up to write about how we can all feel more loved. They argue it’s the key to happiness. (Washington Post)

• The Incompetent Confidence Complex: An Epidemic of Unchecked Incompetence: The intellectual foe of unchecked storytelling is the existence of objective reality. I believe in eternal truths. There are fundamental realities of the cosmology of the universe that are unchanging and fixed realities. But there are very, very few eternal truths. Everything else is pretty darn subject to opinion. (Investing 101 / Substack)

• The Hidden Bias in Language That Turned Left-Handedness Into a Bad Thing: While the days of forcing left-handed children to use their right hands are mostly over, the bias against lefties continues in most languages around the world. The word “sinister” literally means “left.” From Latin roots to modern idioms, language has been quietly slandering lefties for centuries. (Mental Floss)

• Your friends are still acting like everything is normal in America. What do you do? All Americans live in a “dual state.” Here’s what that means — and how to help others see it. (Vox) see also Faced With Trump, Libertarianism Shrugged: The libertarian movement should have been one of the first lines of defense against this aspiring autocrat. It folded instead. (The Bulwark)

• Olympians Can Eat All the Pasta in Italy. So Why Are They Drinking Broccoli? Cross-country skiers are slurping up a potentially performance-enhancing drink of the concentrated vegetable in the hope of speeding up their recovery. https://www.wsj.com/sports/olympics/cross-country-skiing-broccoli-8c706442?st=hSksN9&reflink=desktopwebshare_permalink

Be sure to check out our Masters in Business this week with Heather & Doug Bonaparthe, a married couple who work together and wrote a book on the financial challenges couples face: “Money Together: How to find fairness in your relationship and become an unstoppable financial team.” Our discussion sits somewhere in between financial planning and couples therapy, built around real stories that try to help couples find a healthier approach to money.

 

AI is 3 years old. A majority of Americans say they use it every week

Source: @DKThomp

Sign up for our reads-only mailing list here.

 

 

The post 10 Friday the 13th Reads appeared first on The Big Picture.

Peter Schiff: Printing Money Is Not the Cure for Cononavirus



In his most recent podcast, Peter Schiff talked about coronavirus and the impact that it is having on the markets. Earlier this month, Peter said he thought the virus was just an excuse for stock market woes. At the time he believed the market was poised to fall anyway. But as it turns out, coronavirus has actually helped the US stock market because it has led central banks to pump even more liquidity into the world financial system. All this means more liquidity — central banks easing. In fact, that is exactly what has already happened, except the new easing is taking place, for now, outside the United States, particularly in China.” Although the new money is primarily being created in China, it is flowing into dollars — the dollar index is up — and into US stocks. Last week, US stock markets once again made all-time record highs. In fact, I think but for the coronavirus, the US stock market would still be selling off. But because of the central bank stimulus that has been the result of fears over the coronavirus, that actually benefitted not only the US dollar, but the US stock market.” In the midst of all this, Peter raises a really good question. The primary economic concern is that coronavirus will slow down output and ultimately stunt economic growth. Practically speaking, the world would produce less stuff. If the virus continues to spread, there would be fewer goods and services produced in a market that is hunkered down. Why would the Federal Reserve respond, or why would any central bank respond to that by printing money? How does printing more money solve that problem? It doesn’t. In fact, it actually exacerbates it. But you know, everybody looks at central bankers as if they’ve got the solution to every problem. They don’t. They don’t have the magic wand. They just have a printing press. And all that creates is inflation.” Sometimes the illusion inflation creates can look like a magic wand. Printing money can paper over problems. But none of this is going to fundamentally fix the economy. In fact, if central bankers were really going to do the right thing, the appropriate response would be to drain liquidity from the markets, not supply even more.” Peter explained how the Fed was originally intended to create an “elastic” money supply that would expand or contract along with economic output. Today, the money supply only goes in one direction — that’s up. The economy is strong, print money. The economy is weak, print even more money.” Of course, the asset that’s doing the best right now is gold. The yellow metal pushed above $1,600 yesterday. Gold is up 5.5% on the year in dollar terms and has set record highs in other currencies. Because gold is rising even in an environment where the dollar is strengthening against other fiat currencies, that shows you that there is an underlying weakness in the dollar that is right now not being reflected in the Forex markets, but is being reflected in the gold markets. Because after all, why are people buying gold more aggressively than they’re buying dollars or more aggressively than they’re buying US Treasuries? Because they know that things are not as good for the dollar or the US economy as everybody likes to believe. So, more people are seeking out refuge in a better safe-haven and that is gold.” Peter also talked about the debate between Trump and Obama over who gets credit for the booming economy – which of course, is not booming.

We are living in crazy times. I have a hard time believing that most of the general public is not awake, but in reality, they are. We've never seen anything like this; I mean not even under Obama during the worst part of the Great Recession." Now the Fed is desperately trying to keep interest rates from rising. The problem is that it's a much bigger debt bubble this time around , and the Fed is going to have to blow a lot more air into it to keep it inflated. The difference is this time it's not going to work." It looks like the Fed did another $104.15 billion of Not Q.E. in a single day. The Fed claims it's only temporary. But that is precisely what Bernanke claimed when the Fed started QE1. Milton Freedman once said, "Nothing is so permanent as a temporary government program." The same applies to Q.E., or whatever the Fed wants to pretend it's doing. Except this is not QE4, according to Powell. Right. Pumping so much money out, and they are accusing China of currency manipulation ? Wow! Seriously! Amazing! Dump the U.S. dollar while you still have a chance. Welcome to The Atlantis Report. And it is even worse than that, In addition to the $104.15 billion of "Not Q.E." this past Thursday; the FED added another $56.65 billion in liquidity to financial markets the next day on Friday. That's $160.8 billion in two days!!!! in just 48 hours. That is more than 2 TIMES the highest amount the FED has ever injected on a monthly basis under a Q.E. program (which was $80 billion per month) Since this isn't QE....it will be really scary on what they are going to call Q.E. Will it twice, three times, four times, five times what this injection per month ! It is going to be explosive since it takes about 60 to 90 days for prices to react to this, January should see significant inflation as prices soak up the excess liquidity. The question is, where will the inflation occur first . The spike in the repo rate might have a technical explanation: a misjudgment was made in the Fed's money market operations. Even so, two conclusions can be drawn: managing the money markets is becoming harder, and from now on, banks will be studying each other's creditworthiness to a greater degree than before. Those people, who struggle with the minutiae of money markets, and that includes most professionals, should focus on the causes and not the symptoms. Financial markets have recovered from each downturn since 1980 because interest rates have been cut to new lows. Post-2008, they were cut to near zero or below zero in all major economies. In response to a new financial crisis, they cannot go any lower. Central banks will look for new ways to replicate or broaden Q.E. (At some point, governments will simply see repression as an easier option). Then there is the problem of 'risk-free' assets becoming risky assets. Financial markets assume that the probability of major governments such as the U.S. or U.K. defaulting is zero. These governments are entering the next downturn with debt roughly twice the levels proportionate to GDP that was seen in 2008. The belief that the policy worked was completely predicated on the fact that it was temporary and that it was reversible, that the Fed was going to be able to normalize interest rates and shrink its balance sheet back down to pre-crisis levels. Well, when the balance sheet is five-trillion, six-trillion, seven-trillion when we're back at zero, when we're back in a recession, nobody is going to believe it is temporary. Nobody is going to believe that the Fed has this under control, that they can reverse this policy. And the dollar is going to crash. And when the dollar crashes, it's going to take the bond market with it, and we're going to have stagflation. We're going to have a deep recession with rising interest rates, and this whole thing is going to come imploding down. everything is temporary with the fed including remaining off the gold standard temporary in the Fed's eyes could mean at least 50 years This liquidity problem is a signal that trading desks are loaded up on inventory and can't get rid of it. Repo is done out of a need for cash. If you own all of your securities (i.e., a long-only, no leverage mutual fund) you have no need to "repo" your securities - you're earning interest every night so why would you want to 'repo' your securities where you are paying interest for that overnight loan (securities lending is another animal). So, it is those that 'lever-up' and need the cash for settlement purposes on securities they've bought with borrowed money that needs to utilize the repo desk. With this in mind, as we continue to see this need to obtain cash (again, needed to settle other securities purchases), it shows these firms don't have the capital to add more inventory to, what appears to be, a bloated inventory. Now comes the fun part: the Treasury is about to auction 3's, 10's, and 30-year bonds. If I am correct (again, I could be wrong), the Fed realizes securities firms don't have the shelf space to take down a good portion of these auctions. If there isn't enough retail/institutional demand, it will lead to not only a crappy sale but major concerns to the street that there is now no backstop, at all, to any sell-off. At which point, everyone will want to be the first one through the door and sell immediately, but to whom? If there isn't enough liquidity in the repo market to finance their positions, the firms would be unable to increase their inventory. We all saw repo shut down on the 2008 crisis. Wall St runs on money. . OVERNIGHT money. They lever up to inventory securities for trading. If they can't get overnight money, they can't purchase securities. And if they can't unload what they have, it means the buy-side isn't taking on more either. Accounts settle overnight. This includes things like payrolls and bill pay settlements. If a bank doesn't have enough cash to payout what its customers need to pay out, it borrows. At least one and probably more than one banks are insolvent. That's what's going on. First, it can't be one or two banks that are short. They'd simply call around until they found someone to lend. But they did that, and even at markedly elevated rates, still, NO ONE would lend them the money. That tells me that it's not a problem of a couple of borrowers, it's a problem of no lenders. And that means that there's no bank in the world left with any real liquidity. They are ALL maxed out. But as bad as that is, and that alone could be catastrophic, what it really signals is even worse. The lending rates are just the flip side of the coin of the value of the assets lent against. If the rates go up, the value goes down. And with rates spiking to 10%, how far does the value fall? Enormously! And if banks had to actually mark down the value of the assets to reflect 10% interest rates, then my god, every bank in the world is insolvent overnight. Everyone's capital ratios are in the toilet, and they'd have to liquidate. We're talking about the simultaneous insolvency of every bank on the planet. Bank runs. No money in ATMs, Branches closed. Safe deposit boxes confiscated. The whole nine yards, It's actually here. The scenario has tended to guide toward for years and years is actually happening RIGHT NOW! And people are still trying to say it's under control. Every bank in the world is currently insolvent. The only thing keeping it going is printing billions of dollars every day. Financial Armageddon isn't some far off future risk. It's here. Prepare accordingly. This fiat system has reached the end of the line, and it's not correct that fiat currencies fail by design. The problem is corruption and manipulation. It is corruption and cheating that erodes trust and faith until the entire system becomes a gigantic fraud. Banks and governments everywhere ARE the problem and simply have to be removed. They have lost all trust and respect, and all they have left is war and mayhem. As long as we continue to have a majority of braindead asleep imbeciles following orders from these psychopaths, nothing will change. Fiat currency is not just thievery. Fiat currency is SLAVERY. Ultimately the most harmful effect of using debt of undefined value as money (i.e., fiat currencies) is the de facto legalization of a caste system based on voluntary slavery. The bankers have a charter, or the legal *right*, to create money out of nothing. You, you don't. Therefore you and the bankers do not have the same standing before the law. The law of the land says that you will go to jail if you do the same thing (creating money out of thin air) that the banker does in full legality. You and the banker are not equal before the law. ALL the countries of the world; Islamic or secular, Jewish or Arab, democracy or dictatorship; all of them place the bankers ABOVE you. And all of you accept that only whining about fiat money going down in exchange value over time (price inflation which is not the same as monetary inflation). Actually, price inflation itself is mainly due to the greed and stupidity of the bankers who could keep fiat money's exchange value reasonably stable, only if they wanted to. Witness the crash of silver and gold prices which the bankers of the world; Russian, American, Chinese, Jewish, Indian, Arab, all of them collaborated to engineer through the suppression and stagnation of precious metals' prices to levels around the metals' production costs, or what it costs to dig gold and silver out of the ground. The bankers of the world could also collaborate to keep nominal prices steady (as they do in the case of the suppression of precious metals prices). After all, the ability to create fiat money and force its usage is a far more excellent source of power and wealth than that which is afforded simply by stealing it through inflation. The bankers' greed and stupidity blind them to this fact. They want it all, and they want it now. In conclusion, The bankers can create money out of nothing and buy your goods and services with this worthless fiat money, effectively for free. You, you can't. You, you have to lead miserable existences for the most of you and WORK in order to obtain that effectively nonexistent, worthless credit money (whose purchasing/exchange value is not even DEFINED thus rendering all contracts based on the null and void!) that the banker effortlessly creates out of thin air with a few strokes of the computer keyboard, and which he doesn't even bother to print on paper anymore, electing to keep it in its pure quantum uncertain form instead, as electrons whizzing about inside computer chips which will become mute and turn silent refusing to tell you how many fiat dollars or euros there are in which account, in the absence of electricity. No electricity, no fiat, nor crypto money. It would appear that trust is deteriorating as it did when Lehman blew up . Something really big happened that set off this chain reaction in the repo markets. Whatever that something is, we aren't be informed. They're trying to cover it up, paper it over with conjured cash injections, play it cool in front of the cameras while sweating profusely under the 5 thousands dollar suits. I'm guessing that the final high-speed plunge into global economic collapse has begun. All we see here is the ripples and whitewater churning the surface, but beneath the surface, there is an enormous beast thrashing desperately in its death throws. Now is probably the time to start tying up loose ends with the long-running prep projects, just saying. In other words, prepare accordingly, and Get your money out of the banks. I don't care if you don't believe me about Bitcoin. Get your money out of the banks. Don't keep any more money in a bank than you need to pay your bills and can afford to lose.











The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more













The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more

The FBI released a summary of its file from the Hillary Clinton email investigation on Friday, showing details of Clinton's explanation of her use of a private email server to handle classified communications. The release comes nearly two months after FBI Director James Comey announced that although Clinton's handling of classified information was "extremely careless," it did not rise to the level of a prosecutable offense. Attorney General Loretta Lynch announced the next day that she would not pursue charges in the matter. "We are making these materials available to the public in the interest of transparency and in response to numerous Freedom of Information Act (FOIA) requests," the FBI noted in a statement sent to reporters with links to the documents. The documents include notes from Clinton's July 2 interview with agents, as well as a "factual summary of the FBI's investigation into this matter," according to the FBI release. Throughout her interview with agents, Clinton repeatedly said she relied on the career professionals she worked with to handle classified information correctly. The agents asked about a series of specific emails, and in each case Clinton said she wasn't worried about the particular material being discussed on a nonclassified channel.