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On Wednesday, the U.S. will publish its unemployment report. The market Consensus expects a 4.4% unemployment rate, which continues to be structurally low, despite being on the rise recently. The participation rate is expected to be around 62%, which means that the U.S. still 38% of the active population that is not looking for a job. But perhaps the most interesting factor helping the employment numbers is that the pool of people that are eligible to work is shrinking. You c

Bitcoin seems to be preparing for another crypto winter. 16% nose dive this week, below $70,000, and more than 45% from its peak in October. This is Bitcoin Achilles heel: out of the three qualities needed to be considered money, the storehold of wealth is a key one, and the historical high volatility episodes that Bitcoin has experienced, brings a lot of doubt about its ability to be considered money. There are a lot of speculators in crypto, and even though the U.S. govern

The economic machine continues to move away from equilibrium. Silver is experiencing manipulation and wild swings, falling 40% in 5 days, while Bitcoin took a nose dive to $61k yesterday and is trying to find a floor, even when it seems to be trading below the cost of mining. And then the correlation between the yen and the rate differential between the 10 year U.S. treasury bond and the 10 year JGB, has broken. You can see how both diverge in the chart below. This is very im

The AI world is starting to look a lot like the real estate market in ghost cities in China. An incredible push in data center infrastructure, to the tune of $600Bn (see chart below), built for an expectation of demand that may not be there, at least in the short term. The usage for model trainings could be there, but the revenues associated with the use of those models, may not be present yet. And there lies the problem, the mismatch between the debt used to build those data

The month of January was positive for the S&P500. The January barometer tells us that the year should be positive as well, with a probability of 70-80%. It has been particularly strong for small caps which went up between 6-8%. There may be a rotation in size going on in 2026. What has started as a laggard, continuing a trend from 2025, is the software sector. As you can see see in the chart below, the drawdown that’s started at the beggining of the 4th quarter last year, con

We’re waking up this morning with renewed concerns about the well being of our AI industry, in this case from the point of view of credit. Open AI is the epicenter of the worries, and Oracle, NVDA, and the BDCs are starting to revive the shock waves. Oracle is trying to raise capital, through equity and debt, to continue funding its AI bet, which has cost them dearly in terms of their CDS and their stock price. It already has a negative outlook on its rating by S&P and if thi

The week is starting trying to recover from the 7 standar deviation movement in the price of silver on Friday. The probability of that event happening is lower than 1 divided by the age of the universe (by far). Let that sink in. Of course we know the real world does not follow a perfect normal distribution of returns. This is what’s called a fat tailed event. Why is that important? Because it implies that something more complex is going on in the market. This morning we saw

We are starting to see wild movements in the market, which unfortunately seem adequate in periods of high uncertainty, high leverage, high valuations and high concentration. The poster child these days is silver, but we can see movementa like these in other assets. On Friday, silver price in the U.S. fell 30% in a day. It was options expiration day, banks were massively short the metal, and they moved the market as if they were the masters of the Universe. And perhaps they ar

Kevin Warsh will be the new Fed chairman starting in May, pending confirmation from the Senate. He has both private and public experience and brings strong ideas for the Fed, which he has criticized for years on balance sheet policy and interest rates views. But who is Kevin Warsh? He’s from Albany, NY, Stanford graduate on public policy and JD by Harvard as well as HBS and MIT Sloan school of management. At age 35, Warsh became the youngest-ever member of the Federal Reserve

President a Trump announced yesterday the he was going to nominate the Fed chairman today. Although we don’t have any insights to who that person will be, Polymarket (see chart below) odds for Kevin Warsh jumped onmmeditely to 80% after a reported mentions that the news leaked out. Since Trump is unpredictable, we might see a last minute change, but this will not be a surprise. To welcome the new Fed chairman, the precious metals market woke up this early morning with a big

The Fed left rates unchanged, on the basis that the economy is growing at a solid pace. According to the oficial statement, inflation remains elevated and unemployment is weak, but not weak enough to justify a cut. Stephen Miran, the latest governor appointed by Trump, voted in favor of another cut, signaling once again lack of consensus on the decision. But this is no news, as it was expected, the same way that rates were not expected to be lowered. The post rate decision ro

The Fed will conclude the first FOMC meeting of 2026 today. No rate cuts are expected, but the press conference at 2pm EST will provide more infoamtion on the current thinking of the Central Bank. One of the topics that is gaining momentum is the dollar. Comments made by President Trump yesterday, taking importance off the recent weakness of the grenback sent the currency to new lows. It remains within the recent normal range but is approaching the lowest part of it, which s

The macroeconomic tectonic plates continue to move under the surface, indicating a potential change in the fiat currency system might be brewing underneath what appears to be a normal functioning world. The head of the IMF, Kristalina Georgieva, has publicly stated the world needs to build an alternative to U.S. dollar assets in case the greenback loses its status as a safe haven. She calls for European bonds, to act as an alternative to U.S. treasuries, in the latest attempt

Gold has crossed the $5,000 mark. Silver has surpassed $100 comfortably. Both precious metals continue to be bid fearlessly. What’s going on? It does look like we’re going through a confidence crisis in our current monetary system. The Yen is being intervened, and the dollar is getting weaker. And it looks like in terms of investor profile, institutional investors are piling up on the metals. Interestingly, they are not choosing bitcoin, or any other cryptocurrency, for that

The amount of issues the current administration is dealing with potential escalation is growing very fast. It’s Greenland, Iran potential regime change, the board of peace, China trading negotiation, the Japanese debt and currency crisis, Ukraine, Venezuela, Minnesota’s ICE raids and opposition from activists, and Somali allegedly illegal funding from the state, among others. Most of these issues cost money, and some of them, a lot of money. That money comes from the governme

With just three trading days until the first FOMC meeting of the year, the U.S. dollar had a pretty bad week. It’s not clear, and it’s definitely not discounted, that the Fed will lower rates on Wednesday, but the Greenland episode, paired with the fiscal problems in Japan, where the BoJ and the Minister of Finace may have intervened in the markets to sell dollars to defend the Yen, have had an impact on the green buck. The flip side, has been the incredible week precious met

The BoJ concluded its two-day monetary policy meeting today, deciding to keep the short-term policy rate unchanged at 0.75%  (as widely expected), while raising growth and inflation forecasts in a somewhat hawkish tone. Governor Kazuo Ueda held a press conference afterward, where he reiterated monitoring of markets and mentioned the possibility of conducting bond operations flexibly under extraordinary circumstances to promote stable yield formation, but he did not announce o

While we continue to watch our leaders debate in Davos, the global financial system is moving rapidly, particularly the debt. The long end of the Japanese curve has been in a price discovery mission that has pushed yields up rapidly, to the point where the government has either intervened or threatened to intervene. For the 30 year JGB, yields touched 3.85% and then were pushed down to the current 3.67%. The move does not look like much, but these bonds have a duration of 20

Politicians and global business leaders continue to debate and brainstorm about the world’s destiny in Davos at WEF. Among other big topics, the change of world order, the impact of America first policies, including the potential impact of a conflict on Greenland and AI have filled headlines. It’s also been a year since President Trump took power for his second mandate. Since then, the S&P500 has risen 12.36%, currently at an all time highs. That implies a $7.7tn increase in

Japanese Government Bonds (JGBs) are becoming a real headache for everyone. In the chart below, you can see the yield of the 30 year bond reaching 3.863%. The 40 year bond yield just touched 4%. But the concern is not the level, it’s the speed at which it is increasing. 6 months ago, it was 100 bps below today. Reportedly, Japanese insurers are selling these bonds unable to cope with the loses. The yen is trading too close to 160 vs the dollar, which will likely trigger an in