evening wrap, january 12
market vibes
It’s been a while since I did a check-in on Trump’s policies and there has been a stack of them recently, so let’s catch up.
Today… the Department of Justice opened a criminal investigation into Federal Reserve Chair Powell; specifically, allegations he might have lied to Congress in his June testimony about the $2.5 billion renovation of the Eccles building. No charges have been filed. Powell said Trump wants to make FOMC policy and Fed independence is threatened. Note to Powell: that’s the point. Five FOMC members have been investigated on his watch, including him.
Last week, Trump tweeted he’s “immediately taking steps” to ban large institutional investors from purchasing additional single-family homes. No laws or executive orders so far, but Blackstone’s stock took a hit. If he can do it, Blackstone and their ilk will take a bath, imo, although people in the know say it will only affect 4% of inventory. I suppose it depends. The BCOM rebal is selling 7% of available inventory and silver is up 9%.
Bill Pulte, Director of the FHFA, is overseeing a program for Fannie and Freddie to buy $200 billion MBS to get mortgage rates down. This is happening now.
The Treasury Department is actively implementing a tax policy that lets taxpayers deduct $10,000 per year for new U.S.-made vehicles bought between 2025 and 2028..
Credit card companies will be in violation of the law if they charge over 10% interest after January 20 (his “innauguration day aniversary”).
Trump is aggressively pushing a plan to “cut out the middleman” in healthcare, sending subsidies directly to “the people,” allowing them to shop for coverage. And finally, he’s planning to stop military contractors from buying back their stock with money from the Pentagon.
On the foreign stage. Trump just levied a 25% non negotiable tariff on anyone doing any type of business with Iran.
Denmark classified the US as a security risk and Greenland wants to negotiate directly with Trump. The EU (Starmer, Merz, etc) is proposing sending NATO troops to Greenland to protect it (Denmark) a member of NATO from America a member of NATO.
Gunther Fehlinger, an Austrian advocate and chairman of the Austria NATO Enlargement Committee, said Europe should seize or confiscate all US military bases in Europe if the U.S. attempts to annex Greenland: “If you take Greenland, you have to leave. It’s very simple. We can defend ourselves very well and we will do that without the U.S. nuclear shield... we will simply run these bases ourselves. Run your boys home into Chicago and Ohio. And goodbye.” Article 5 is starting to look like a paper tiger.
Bessent announced an IRS task force to investigate pandemic fraud and major fraud cases like Minnesota. Tax season begins on January 26. Big rebates of 100 to 150 billion will be going out, no taxes on tips, Social Security, and overtime.
If you put it all together, the Fed’s independence is going to be renovated. The plutocrats are going to take a hit. Greenland wants to come over. Iran is going to be the next Venezuela and if he can get away with it, CPI shelter is going down.
Who is going to stop him? Read this and tell me what you think.
In the markets
Silver rallied 7% to new all-time highs today. Volume was moderate. The curve remains in contango and there has been no significant warehouse activity. Open interest fell again and I expect it to be down tomorrow as the BCOM selling proceeds at about 2800 lots per day. Social media is flooded with AI nonsense calling for the complete collapse of the western financial system. Apart from the rolercoaster ranges, everything else about silver is normal.
Gold made a modest new all-time high, ostensibly on the news Powell was being investigated. That may have something to do with it but it’s a pretty thin reason to buy gold. I didn’t see any leggy narratives, just the power of the trends taking metals higher.
Gold looks like a typical run above the all-time highs with rising prices, open interest, and volume. Since OI is already correlated with prices, whatever increase in OI tomorrow morning should be close to the size of new long positions that came in today.
…In other metals, everything copper is technically flat; open interest, volume, and prices. PGMs were quiet and featureless.
S&Ps shook off the Powell news and slowly ground higher to settle roughly unchanged. Volume was low. Abercrombie fell 17% on bad sales over Christmas. Nvidia is petrified at 180-ish. Netflix was down again. GS is still the darling of the stock market.
Oil is back to $60 on Iran… The Q2 curve is tightening. No other movement worthy of note.
The Yen withers daily by basis points.
In other markets, USD FX was mixed and dead. Bitcoin was utterly motionless. Fixed income has been range-bound since June and shows zero sign of moving.
my vibe
Trump is awfully busy but the markets numb. I have no doubt, his meddling in Iran is part of a global plan to dismember oil flows to China. His other feints and ops are prepping the WEF for the annual meeting in Davos. No date has been set for his speech but he’s attending in person between January 19 and January 23 and last year it was a throw down.
If it weren’t for gold and silver, the NY markets would be entirely arthritic. I am flat except for a comfy position in physical, and I know a lot of readers are still in so I will zip it and have an early night. CPI tomorrow… looks like another lowball. Best get some sleep just in case.
shit just got real (no pun)
If you’re a fan of Vivaldi (I am)… you’ll love these
night all… good luck in Asia!
JJ
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You include Starmer in the EU, fair point, we’re effectively part of the EU with that blackmailed nonce pretending to run the country. The cabal never did let us out of the clutches of the Eurocrats.
With all due respect to our Austrian friends, Österreich is not a NATO member so I'm not quite sure what to do with Herr Fehlinger's dramatic declaration.