The transcript from this week’s, MiB: Ben Hunt, co-founder Perscient, is below.

You can stream and download our full conversation, including any podcast extras, on Apple Podcasts, Spotify, YouTube, and Bloomberg. All of our earlier podcasts on your favorite pod hosts can be found here.

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Bloomberg Audio Studios, podcasts, radio News. This is Masters in business with Barry Riol on Bloomberg Radio

Barry Ritholtz: On the latest Masters in Business podcast. What a fascinating conversation. I sit down with Ben Hunt, he writes Epsilon Theory, but he is also the president and co-founder of Persuent. What a fascinating analytic story they’ve put together. They essentially take feeds of everything that’s published around the world, whether it’s in English or Chinese or Russian. They create these large language models and use artificial intelligence to identify rising narratives. In other words, they’re looking for the things that will become storylines, but haven’t quite hit that yet. I I found this conversation to be absolutely fascinating, and I think you will also, with no further ado, my conversation with Persuent Ben Hunt. Ben Hunt, welcome to Bloomberg.

Ben Hunt: Thanks for having me.

Barry Ritholtz: This is long. time coming

Ben Hunt: I love the intro. I gotta have you at all my events. It’s fantastic.

Barry Ritholtz: That’s right. I’m available for hire. I can introduce you at, at weddings bar Mitzvahs. Wherever you’re giving a toast, I’ll be happy to tee you up. This is long overdue. I’ve followed your work for so long. I’m fascinated by both what you put out in your blog, Epsilon Theory, thank you, and which is now a blog and a newsletter and, and the work you do at persuent. We’re going to get to that stuff, but before we do, I gotta ask PhD from Harvard. You were a tenured political science professor. Was academia the original career plan?

Ben Hunt: You know, it’s interesting, Barry. So I, academia was always a, I’ll call it a, a way station for me. It ended up being

Barry Ritholtz: A 10 year way station?

Ben Hunt: 10 years plus grad school.

Barry Ritholtz: That’s a little more than a way station. I

Ben Hunt: A little more than a waste station. But I bet this will be familiar for a lot of your listeners. I always had an entrepreneurial bug. You know, I started my first company when I was in grad school, started another one when I was, when I was a professor. And as I know, you know, a lot of your listeners, viewers know, it is, it is a bug. It’s not a feature.

Barry Ritholtz: Yes, for sure.

Ben Hunt: You can’t help yourself. And academia is not the place to be an aca,

Barry Ritholtz: So let me ask you a question about that.

Ben Hunt: An academia for sure. So I know why I’ve started a series of companies. I can’t work for other people. Why, why did you have that bug? What, what motivated you to say, I gotta get this out into the world?

Barry Ritholtz: I love playing games and solving problems.  I have a similar issue about working for other people, which fortunately, academia solves that to a large degree. I mean, you, you are working on your own stuff. You follow your own intellectual bliss in a way that I’ve really never rediscovered. The the problem with academia, of course, is, you know, it’s very, very low stakes. That’s why the academic fights are so vicious, because

Ben Hunt: There’s nothing at stake. Right, right. And, and that that is actually true. That’s actually true. And, and so you learn survival techniques and that kind of jungle where nothing is really at stake, at least monetarily, because the, the goal of any sort of academia conference or presentation, like, is to appear smart. Right? It’s not to actually be smart. You’re not actually listening to a presentation to listen to it. What you learn to do is you’re listening to the presentation the whole time. You’re trying to calculate your head. What’s the most devastating question I can ask?

00:04:07 [Speaker Changed] So you’re gonna rock this guy back on his heels with a devastating, a

00:04:11 [Speaker Changed] Devastating question. And boy, that gets old after a while, Barry, I gotta tell you. Yeah. It, it really does. I, I loved the teaching. I loved the, the research. ’cause like I say, nobody tells you what to work on, but the, the church of academia, the, the actual institution of academia, a it’s for the birds, even back when I was doing it. Right. And I think it’s gotten significantly worse.

00:04:40 [Speaker Changed] I can imagine. I can imagine what’s happening with that. So, but the question that this leads me to is, yeah, you’ve had all these jobs within the world of finance. How did your background in academia shape how you view investing? Risk management allocation?

00:04:57 [Speaker Changed] Barry, starting from academia and then getting into our business of investing, I think it was the best thing that could have happened for me for when I got into it, which was kind of later in life, right? Same, same. You know, after I left academia finally to start a software company. And it, after we sold that software company Yeah. A, a a buddy of mine that I think this happens a lot. A buddy of, you know, you have a buddy who’s in the

00:05:29 [Speaker Changed] Business, Hey, you seem to be pretty smart. How would you like to apply this to

00:05:32 [Speaker Changed] This? We’re always, we’re always talking about company X or technology Y why don’t, you know, why don’t you come in? Let’s, let’s give this a try. So that was my path, if you want to call it a path. And what really sold me on it was that markets, it’s the biggest game in the world

00:05:52 [Speaker Changed] For sure.

00:05:54 [Speaker Changed] And like I say, I’m a game player. I love games

00:05:57 [Speaker Changed] And a game theorist. Let’s, let’s, let’s work down that.

00:06:00 [Speaker Changed] Well, I, I don’t like to talk about that because, you know, because the,

00:06:03 [Speaker Changed] The real game theorists get angry.

00:06:05 [Speaker Changed] Yeah. Well, yes. And, and, and I, I understand I am a real one because that was, that was my field for a while. And it’s a real field and it’s a real thing. But it’s been so trivialized when some talking head will come on. Well, let’s look at the game theory of this. Right? And you just want to just, you know, right. Shoot yourself when somebody does this.

00:06:25 [Speaker Changed] So, so the other part of your research, the other part of your academic focus was on narrative theory. And so let’s talk about how did that focus develop? And, and we will talk a little later about what you do today at Persuent with the narrative machine. But what, and

00:06:46 [Speaker Changed] Believe it or not, believe it or not, it all ties together. I,

00:06:48 [Speaker Changed] I doesn’t don’t doubt that for a second. And,

00:06:50 [Speaker Changed] And it’s

00:06:51 [Speaker Changed] What initially led you down that rabbit hole.

00:06:54 [Speaker Changed] When we think about kind of who’s been an influence on you in your, in your life, had a very influential undergrad professor in political science. And then I had a very influential graduate advisor. Again, they don’t call it political science in, up at, up at Harvard. They call it government or something. Right? Something like that. But, but it’s political science. And, and the reason I say they were influential is that they really got me focused on the science side of political science

00:07:30 And that science side. Yes. It’s kind of some of the typical terrible stuff you see in all social sciences, like economics, where, you know, you’ve gotta learn how to deal with structured data. Right. And, and there was, there was a lot to learn. And I, it’s, it’s worth talking about because I see the same mistakes being made over and over again by people in our business who want to try to, well, you know, apply math to data and, and there are some real pitfalls and some, some real intellectual capital I think that you can achieve within academia that you can then bring in and apply to the, the, the investment world. What,

00:08:20 [Speaker Changed] What we’ve certainly seen amongst the quants, a very successful application of math theory to data. The, in fact, some of the best performing hedge funds are quantitatively driven. That’s not where you’re going.

00:08:37 [Speaker Changed] Well, it’s, it’s part of where I’m going. Right? So, so there, there, there’s a transition in all of all of the sciences, honestly, but certainly the, the social sciences where, where, yes, you start with numbers, structured numbers, right. Price over time, you know, things you can calculate and measure as those numbers. But what was clear immediately in politics, and I think has become increasingly clear in the world of investing, is that it’s not just the numbers that you get on your Bloomberg terminal, it’s also the words and the stories and the narratives that are told to us. Politicians have known this forever, right? So the story of politics is the story of people suggesting laws or policies and then having to present it in a way that gets them elected or keeps them in power or whatever that is. So there’s always been a focus, I’ll say more of a focus in political science than in economics with words. Economics is almost seen as a, as a sideline. Right? It, it’s somehow lesser than the numbers. Right. So what, what I was kind of early on was applying the same techniques that we have for understanding, you know, matrices and structured data, but applying it to unstructured data, which, you know, full circle, this is at the heart of all of the generative AI and the, the AI that we have today.

00:10:28 [Speaker Changed] Well, you’re, you’re getting way ahead of me now with generative ai. We’ll circle back to that. Yeah. But, but

00:10:32 [Speaker Changed] It’s all the, the math has not changed. Right. In 35 years since I started working with network math around unstructured data. I mean, we, we didn’t call it natural language processing back then, and we didn’t call it, you know, large language modeling, but that’s exactly what we were doing.

00:10:53 [Speaker Changed] So what was, what was the moment or the catalyst for you to say, Hey, I’m working in all these other areas, but the narratives continue to pop up over and over again on all sorts of different data sets. And I think in the financial markets, I can use a, a novel approach to identifying narratives and anticipate where the market’s going. What, what led to that sort of in insight,

00:11:25 [Speaker Changed] Not the, not the Great Recession, right? But the aftermath,

00:11:30 [Speaker Changed] Meaning the 2010s following the great financial crisis,

00:11:34 [Speaker Changed] Starting in, in, in 2009, and the recovery that we had out of 2009, and in particular when Win Ben Berke and the Federal Reserve move towards a very explicit effort to use their words to impact markets.

00:11:53 [Speaker Changed] So let’s talk a little bit about that. ’cause I have some really specific memories of the low, of the, the runup afterwards, all the noise Yeah. That was going on. Some of the phrases that have come out of that era, like financial repression and other such things are, are just the tip of the narrative iceberg. So, so walk us through your insight. It’s 2009. Yep. The market bottoms really kind of a v bottom and took off from that. What was that, March 9th, March 7th, something like that. Yep. Oh nine. And there was no turning back. What were you seeing? How were you integrating that into a concept of let’s identify narratives in order to anticipate market moves? Well,

00:12:47 [Speaker Changed] So I was co-founded a, a long short fund inside of a, a larger asset manager going back in oh five and oh 5, 0 6, 0 7. We did well, like everyone else did. Well. And then in oh eight we did great.

00:13:08 [Speaker Changed] Really? In oh eight, we did great. Oh eight, I think I wanna say s and p down 37% something. Yeah. We

00:13:12 [Speaker Changed] Were up 20 something net.

00:13:14 [Speaker Changed] Anything in the green, not in the red is

00:13:16 [Speaker Changed] Smith. Yeah. Amazing. And, and now I’ll tell you, and we can come back to this, like, the real question you should ask is that given what we believed, why wasn’t, why weren’t we up 40%? That, that’s actually, that, that’s actually a question you can ask. But

00:13:33 [Speaker Changed] I I’m, I’m gonna say a 47% relative price swing. I, I, I’ll take,

00:13:39 [Speaker Changed] Had a, had a, had a great year in oh eight and, and

00:13:42 [Speaker Changed] Did that continue in oh nine

00:13:45 [Speaker Changed] Flatlined.

00:13:46 [Speaker Changed] Alright.

00:13:47 [Speaker Changed] From oh nine, so from March of oh nine. So we did well in January 1st quarter, February and the first quarter, right. The rest from, from March of oh nine, our returns flatlined. So we never, we never lost money for our clients in our fund. But

00:14:01 [Speaker Changed] You didn’t catch that recovery. That

00:14:03 [Speaker Changed] V did not catch the recovery. Absolutely did not. And the, the recovery was interesting, right? You’re, you’re right. There was a v but there were, there were starts and stops to it. So the, the big move up from the bottom in late March going into April, it’s like, all right, that actually we caught a little bit of that and that that made sense, right? There was a second leg to the rally. Oh, for sure. April, may. And then in June, in June, June to October was a ferocious rally.

00:14:39 [Speaker Changed] Ferocious is the right word, but,

00:14:40 [Speaker Changed] But June in particular was a classic crap rally.

00:14:45 [Speaker Changed] Right. Meaning it was a low

00:14:46 [Speaker Changed] Quality, right. Low quality stuff. Right. The, the end of March going into April rally, it was Right. This makes sense, right? We bottomed fed the June rally. No, no, it was, we didn’t, we didn’t touch any Oh,

00:15:03 [Speaker Changed] That’s a, that’s fascinating. Go back,

00:15:05 [Speaker Changed] Go back and look at it. Right? I, and, and let me tell

00:15:07 [Speaker Changed] You, oh, I don’t, just so you know. Yeah. I, I have a vivid recollection of chatting with Jim Bianco about this, and we were both bullish, but for completely different reasons. To me, anytime US equity markets are cut in half, I’m a buyer and people say 1929, I’m like, great, you gotta go back a century to find the exception that proves the rule. But Jim was early on in the Tina trade, Hey, the Fed has made everything cash, trash bonds are, they’re forcing you into equities, which is what led my post, which everybody stole the line. This is the most hated bull market in history. Yeah, yeah. And I, I wrote that up. I send that out and I heard everybody borrow that. But I’m curious as to where the June rally took you. Well,

00:15:55 [Speaker Changed] This, and this is where I’m going about the role of forward guidance in Jim Bianco’s point about, because what the Fed did wasn’t just it’s policies around interest rates, you know, they took them to zero. And that’s where we stayed,

00:16:16 [Speaker Changed] Started buying mortgage backs and they did

00:16:19 [Speaker Changed] Qe, balance, balance sheet operations. Right, right.

00:16:22 [Speaker Changed] Quantitative easing,

00:16:23 [Speaker Changed] Actual, you know, actually, and I look, I, I think QE one, I think it saved the world. This

00:16:28 [Speaker Changed] Is what, right. And what was that? A trillion dollars something crazy.

00:16:31 [Speaker Changed] Something. Yeah, something something.

00:16:32 [Speaker Changed] 800 billion, something

00:16:33 [Speaker Changed] Something like 800 billion

00:16:34 [Speaker Changed] Unthinkable number.

00:16:35 [Speaker Changed] So I, I think that, so those were specific actions took, but, but even if you, people often say things when they’re leaving office. So, so Bernanke’s last speech is valedictory address.

00:16:48 [Speaker Changed] Right. More honest than intended.

00:16:51 [Speaker Changed] Much more so, and you see this all the time, right? George Washington leaving office.

00:16:55 [Speaker Changed] I was gonna say, I,

00:16:55 [Speaker Changed] I, I, Eisenhower Yeah.

00:16:57 [Speaker Changed] That’s a big,

00:16:57 [Speaker Changed] I mean, when, when, when, when freaking Eisenhower warns you against the defense industrial complex. You know, you might, you might. I’m just saying. No, I won’t listen.

00:17:06 [Speaker Changed] It’s general like to you. That’s

00:17:08 [Speaker Changed] Right. General, like to me, what Bernanke said when he is leaving his terms of office, he said, look, we had, we had two toolkits. One was traditional stuff, interest rates down to zero. At the time we didn’t know we could have negative interest rates. So, you know, that’s where we were. Right. Second were the balance sheet operations, large scale asset purchases, qe, quantitative easing. It said, you know, QE one was great. Did what we hoped it would do. QE two, eh, operation Twist, QE three, this is Bernanke saying, mind you. Yep. He says, I actually think that might have been a little counterproductive,

00:17:47 [Speaker Changed] Huh?

00:17:49 [Speaker Changed] They said, but we had another toolkit, and that was our communication policy. That was forward guidance, that we started using our words not to communicate to the market what we actually felt. We started using our words and coordinating our words to change the market, to change market behavior. This is what I mean about making a conscious effort to tell a story. And it, it’s not that it was necessarily lying, but they, they were using their words and choosing their words for effect

00:18:28 [Speaker Changed] To shape perception of their underlying

00:18:31 [Speaker Changed] Behavior to market, to, to shape market behavior. And he said, that worked better than we had any hope that it could. And that’s where we are now.

00:18:42 [Speaker Changed] So, so for the youngins listening, I have to point out, and you and I are old enough to remember back in the days where there were no minutes released there, there wasn’t an announcement, forget a press conference. You had to be watching the bond market to figure out what the Fed just did. Like today, there’s, we’re holding the, having this conversation. There was a fed the October meeting, a quarter point rate, cut a conversation about all sorts of stuff. I really didn’t pay a lot of attention to it. Yeah. Lack of clarity, no data, blah, blah, blah.

00:19:20 [Speaker Changed] Worse than that, Greenspan would be intentionally vague and obtuse.

00:19:25 [Speaker Changed] If you understood with you’re saying what I said then, then you misunders you misinterpreted it. Right? Exactly.

00:19:30 [Speaker Changed] Right.

00:19:30 [Speaker Changed] If you think you understand what I’m saying,

00:19:33 [Speaker Changed] You know, who led the committee to make all that change? Janet Yellen, she was vice chair. Yep.

00:19:39 [Speaker Changed] Back, back in, during the financial crisis. Yeah.

00:19:41 [Speaker Changed] So this was, it was a concerted effort. Bernanke Yellen to this is when they also started going, putting all the Fed Governors on a common calendar.

00:19:52 [Speaker Changed] Right?

00:19:53 [Speaker Changed] Follow all the, and assigning the fact, okay, you’re gonna speak this day, you’re gonna speak that day. That’s when all this started. It was an intentional effort. And again, this is something that politicians have known forever, right? Politicians craft the message and use their words. So I, I knew the, the tools to try to understand this, but what I wasn’t prepared for was how, and neither was Bernanke, was how powerful this would become to the point where today it’s not just central bankers using their words as their main policy toolkit, but it’s every CEO it’s every CEO Now, I mean, you go on this network or one of the other networks, and what makes for a good CEO is can you tell the story? Can you tell the narrative of your company to get a multiple, right? Because, because a multiple is a narrative. A multiple is a story.

00:20:52 [Speaker Changed] They’re

00:20:52 [Speaker Changed] All stories. Well look at,

00:20:53 [Speaker Changed] Look at some of the most successful CEOs throughout history. I would throw Jack Welch into that pile. ’cause he was a fabulous, fabulous. Yeah, he was a fabulous, fabulous. ’cause the stories he told were great, right? Up until the point where we found out that he was running a, a, a hedge fund with GE Capital, and they magically always beat by a penny.

00:21:17 [Speaker Changed] So I remember vividly when GE was coming to our shop, what they wanted was a fin a financial multiple, right? So they were making, they, they wanted,

00:21:33 [Speaker Changed] Even though they’re an old world industrial,

00:21:35 [Speaker Changed] Even though they’re an industrial, this, that this was, they wanted to tell a story that they should be seen as and get the multiple of a financial, that’s what GE was all about in those years leading up to the, the, the GFC. So a, my, my poster child for this is, is Mark Benioff Salesforce, because he’s pri you often see this with people who come out of sales like, like Mark did, right? But

00:22:08 [Speaker Changed] The way it’s all about storytelling.

00:22:10 [Speaker Changed] It’s all about storytelling. And

00:22:13 [Speaker Changed] What isn’t that true for go through the great, see, look, Steve Jobs, Reed Hastings, Larry Ellison at Oracle to some degree, Steve Ballmer at Microsoft, who wasn’t a great CEO, but he was a great cheerleader story, and a great storyteller, great

00:22:32 [Speaker Changed] Storyteller. What all of those companies have in common is that they’re great storytellers, and those are trillion dollar companies today. Right. What I would say to you is that you don’t remember or hear about the companies that did not have CEOs who are great storytellers.

00:22:51 [Speaker Changed] Well, Ken Lay was a great storyteller until you found out that it was all nonsense. And you could say the same thing about folks like Bernie Madoff.

00:23:00 [Speaker Changed] There are a lot of stories that get told that are not true. Right? What, and and I think even today, people think of this word narrative. They have a pejorative sense to it. It’s like,

00:23:15 [Speaker Changed] Oh, really? Really? That’s interesting. I didn’t think of it that

00:23:17 [Speaker Changed] Way. Oh, for, for, for, for for sure. That’s just your narrative, man. You know, the Big Lebowski, you know, that’s, that’s the, and it’s not that a story is a lie. It’s that the story is constructed for effect. It’s, it’s not, and it’s presented to you as if this is my true and inner thoughts, but the construction of the, the intentionality behind these stories, phenomenal. Benioff, for example, you know, created the metrics by which he wanted Salesforce to be judged. Not metrics of profitability, but metrics of what he called proforma, net revenue growth, whatever the hell that means. Right? Right. And because if you can construct the story, you can construct it in a way that, yes, I can beat and raise pretty much every quarter. So there was, there were three, I think, big changes that happened to make the role of narrative overwhelming as it is today. Whereas before, it’s always been there. To your point, it’s always been there today, it’s overwhelming. And, and I think it’s, it’s not just the success that first central bankers and then CEOs. I mean, wall Street’s the greatest copying machine. We Wall Street copies what works. Sure. So when you see that something’s working, oh, they’re, they’re getting a multiple by telling the story and going on Kramer, you know, four times a

00:24:50 [Speaker Changed] Year. It’s endless. It’s endless iteration. You’re just constantly tweaking it, doing works. And if it works, do more of it. And if it doesn’t, toss it out. So

00:24:58 [Speaker Changed] It was the, the fact that it works to tell a story and people got good at telling stories. It’s the growth of 24 7. I’m gonna use air quotes here and I’m glad we’re taping this news. Well,

00:25:11 [Speaker Changed] It’s media, social media news right

00:25:13 [Speaker Changed] Now.

00:25:14 [Speaker Changed] News, like news light.

00:25:16 [Speaker Changed] That wasn’t the case.

00:25:18 [Speaker Changed] So I wanna I wanna annotate what you said slightly. Okay. Because I think CEOs have always been storytellers, but they were storytellers to their boards, to their employees, to their shareholders. Correct. They always, the, you’re hitting now on the modern world of 24 7. Media telling a story in a boardroom is very different than sitting in a TV studio and talking about, Hey, here’s why our new chip is gonna catch up to Nvidia. Yep. And it’s the greatest thing ever. Yep. That’s a different skillset. It

00:25:52 [Speaker Changed] It changes the time horizon. It is a very different skillset because you’re not telling the story of, oh, I’m getting another, you know, turn of leverage in our operations, or, you know, our capacity utilization in this factory went up by 5%. Which are the kind of stories you would tell even on earnings call or certainly to a board. Now, this is the story where got a

00:26:16 [Speaker Changed] Gotta gotta

00:26:17 [Speaker Changed] A little bit. You, you’re, you’ve got a segment, you’re going on, Kramer, you got four you minutes and say bye bye bye. You got at most four minutes. Right? Right. How are you gonna tell that story that sings to that audience? Enormous change, change, structural change in our media, both quote unquote news media, but also financial news media. The Wall Street Journal today is a 24 7 news, financial news organization. Right.

00:26:47 [Speaker Changed] What, what isn’t It’s printed New York Times, Bloomberg, the Washington Post. Exactly. They all have websites that get updated around the clock.

00:26:54 [Speaker Changed] And here’s the thing, there’s not enough hard news to fill the time or to fill the space. So what takes the space opinion

00:27:04 [Speaker Changed] Story you were channeling

00:27:05 [Speaker Changed] Story takes the place of

00:27:06 [Speaker Changed] The hard, you were channeling Michael Creon from 25 years ago. Most of what you see in the media is speculation, opinion, and theory, not news. I,

00:27:18 [Speaker Changed] I’ve written so much about Creighton and his

00:27:21 [Speaker Changed] I know. That’s why I threw that back to

00:27:22 [Speaker Changed] You. He says he, he was, he was so far ahead

00:27:25 [Speaker Changed] This quarter century ahead of what, of what took place.

00:27:28 [Speaker Changed] And there’s a third piece though,

00:27:31 [Speaker Changed] Give us the third piece before we go to our next segment. Third

00:27:34 [Speaker Changed] Piece has changed. Everything is our smartphones

00:27:37 [Speaker Changed] That you walking around with. Right? Not only a studio, but a, a a a, a dopamine device that you’re constantly playing.

00:27:46 [Speaker Changed] It’s my dopamine machine, right. And I, we do it to ourselves. It’s not that someone forces us to hear these stories over and over again. We do it to ourselves. I mean, I get a little nervous if I, you know, pat, where’s my phone? Where’s my phone? That’s right. That’s right. I, I get a little nervous. And it’s a, it’s, it is absolutely a neurotransmitter addiction. I think it’s so important to keep that from our kids. That’s a whole nother thing.

00:28:17 [Speaker Changed] There’s a whole depression situation with teenagers today, and it all traces back to the phone and social media.

00:28:22 [Speaker Changed] These are three, I think, real secular changes we’ve had. Markets become this political utility, the success of constructing a story, structural changes in social media, and the devices that we insist on caring with our ourselves all the time,

00:28:46 [Speaker Changed] Huh. Absolutely Fascinating. Coming up, we continue our conversation with Ben Hunt, president and co-founder of Perent, explaining how he’s using AI to identify narratives in real time. I’m Barry Ltz. You’re listening to Masters in Business on Bloomberg Radio. I am Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My special guest this week is Ben Hunt. He is a academic fund manager, risk manager, entrepreneur, tech startup person. He is currently co-founder and president at persent, which applies AI tools to map and measure market narratives in real time. It’s really more than market mar narratives. It’s politics, it’s economics, it’s markets. You cover a whole lot of stuff. A

00:29:51 [Speaker Changed] Hundred percent. So what we’re able to do today, and this is the crazy change in the world back from when I was doing this on microfiche back in

00:30:02 [Speaker Changed] The

00:30:02 [Speaker Changed] 1980s. Yeah, exactly. We get, we have access to everything that’s published publicly in the world. And there are a couple of big data aggregators, Dow Jones, one LexiNexis another, everything that gets published in the world, all these languages, it’s available to you. And it’s, it’s not cheap, but it’s not crazy expensive like it used to be. And it’s always getting cheaper. So we’re able to take everything in the world that gets published, all the newspapers, all the websites, all the transcripts, everything that’s published publicly, we can pull in and then we can process it, process it with really, it’s the same math that I was using 30 years ago. Nobody’s invented cold fusion here,

00:30:55 [Speaker Changed] But the software tools are faster, stronger, better,

00:30:59 [Speaker Changed] And infinite. So the, the, the calculations here are not particularly complicated, but you have to do them at enormous scale.

00:31:08 [Speaker Changed] It’s, it’s a ton of volume. So,

00:31:10 [Speaker Changed] I mean, it’s crazy. The, the, just the, the scale of

00:31:15 [Speaker Changed] The numbers. Petabytes, terabytes just crazy.

00:31:17 [Speaker Changed] I mean, yeah. In the last couple of months we’ve processed over 200 billion tokens. Billion,

00:31:25 [Speaker Changed] Right. And a token is how much

00:31:26 [Speaker Changed] A, a token is like a word or a phrase. Okay. And so that’s the kind of the unit that you talk about when you’re putting through, when you’re putting something through a linguistic calculator. So 200, which is, which is what all of the, the

00:31:41 [Speaker Changed] LLMs,

00:31:41 [Speaker Changed] All the LLMs are, they’re linguistic calculators. And so, you know, we’ve processed, you know, several hundred billion tokens. Again, it’s not complex, but it is at scale. And what, what we’re doing with that is we’re reading the world’s news to understand the world’s stories and narratives. And you’re right, it’s, it’s much bigger than, or it’s much more focused that we have much higher resolution than just saying, oh, I’m bullish on financials. I mean, that’s a, that’s a narrative. Sure. Right.

00:32:20 [Speaker Changed] But

00:32:21 [Speaker Changed] There are 20 different variations of that. You’re, you’re bullish on financials. Why?

00:32:27 [Speaker Changed] So wait, let me, let me, you,

00:32:28 [Speaker Changed] And we can track all those, we can track all those stories and how they wax and wane over time. That’s really cool. So

00:32:32 [Speaker Changed] Let, really cool me roll back to, I want you to explain what Perent is. Who are the clients? I don’t mean names, but No, sorry. What type of of clients do you have and, and what do they do with Persian’s output?

00:32:47 [Speaker Changed] So we started Persent in 2018. My partner from, we were at a, a asset manager spun out there to take the, the technology that I’ve been working on for years and, and really been writing about with Epsilon theory. So we started that in 2018 to do the, the basic research into processing enormous amounts of financial news data and to track the stories and how they rise and fall and wax and wane over time. Is that, that was, that was the story. That was the

00:33:25 [Speaker Changed] Goal. So I, I love that description because there are a lot of trades going on where the storyline changes on a regular basis. Probably the Mac daddy of that is crypto first. It’s, Hey, you know, there’s fiat currency, this is outside of the system, it’s defi, then it’s a hedge for deflation, then it’s a hedge for inflation. Now it’s scarcity and,

00:33:51 [Speaker Changed] And digital gold. Right? Digital

00:33:53 [Speaker Changed] Gold.

00:33:53 [Speaker Changed] It’s, it’s, there are no fundamentals, right? With, with, with crypto. And I people will say there are, but there aren’t. Right? It’s, it’s driven by the waxing and waning of stories. And do, do they find purchase? Do they or do they kind of, people get tired of them?

00:34:11 [Speaker Changed] Well, they got tired of the defi story. And then once JP Morgan and BlackRock started creating, like, the Ibit is the fastest ETF to a hundred billion dollars. And so the old story of Defi is gone. And the new story is, oh no, this is an asset class at Wall Street’s embracing. That’s why you have to own it.

00:34:32 [Speaker Changed] That story, that story was, and very, that was a very similar story by the way, or a transition story from physical gold to GLD when that ETF came out. Right. Which was a very similar pattern because once it became a Wall Street, a, a table at the Wall Street Casino, right? Then it takes on a different meaning specifically around gold. Gold changed from being, okay, something that you bury in your backyard or you’re having your vault, you know, along with ammo and seeds for when the, the, the hard times come

00:35:11 [Speaker Changed] Bottled water, right? Bottled meals ready to eat, right, gold and lead. It

00:35:15 [Speaker Changed] Becomes a security. And its meaning changes from that, you know, apocalyptic bottled water. Right? And the meaning of gold today is as an insurance policy, a security against central bank error or government error. That’s the meaning of gold today.

00:35:35 [Speaker Changed] And is that the dominant narrative that you’re identifying as gold rallied over through 4,000? Ab

00:35:41 [Speaker Changed] Ab Absolutely. So, I mean, we’ve really been able to track that one in

00:35:46 [Speaker Changed] Specifically. So, so here’s the really big, here’s the million dollar or trillion dollar question. How do you identify a narrative and say, oh, gold is gonna double from here based on this narrative? Or, or are we not there yet?

00:36:00 [Speaker Changed] No, you, you identify the narratives. ’cause the narrative, the stories don’t ever change, right? So the, the story that leave gold aside for a while, think about you we’re talking about your bullish on company X, Y, Z because there are about, I don’t know, depending on how, again, how finely you want to resolve that. There are only about a dozen stories for why you’re bullish on something, right? They can be management change, top line growth, opportunity consolidation in the industry,

00:36:35 [Speaker Changed] Upcoming catalyst,

00:36:36 [Speaker Changed] Catalyst. So, so every catalyst story, new

00:36:38 [Speaker Changed] Products, new product, FDA’s gonna prove the new mo, new drug, new molecule.

00:36:43 [Speaker Changed] So that story, you just change the name. That’s the same story that’s repeated over and over again about any pharma or, or, or biotech company. The stories, we think that they’re amorphous and variable. The fact is that the, the core of the story, what we call the semantic signature, the meaning of a story, they’re amazingly constant over time. So what we’re looking for is for, and it’s, it could be dormant for a long time, but what you want to know is when that story starts picking up again, when someone starts playing that story, when it appears on Kramer and starts happening in the financial press, that’s the stuff we can pick up with real precision. So it’s both the stories that are starting to fade,

00:37:41 [Speaker Changed] But,

00:37:42 [Speaker Changed] But the, I think the really interesting stories are the stories that have been dormant for a long time and they start picking up again,

00:37:48 [Speaker Changed] You, you are reminding me of Campbell’s hero’s journey, that there’s only so many

00:37:54 [Speaker Changed] My hero, right? There are only so many stories Right. In the, in, in the world. And that, that’s a now I like to talk about in Hollywood, famously there are only like five scripts.

00:38:08 [Speaker Changed] That’s right. Right?

00:38:10 [Speaker Changed] Tolstoy is supposedly Tolstoy. He said there were only two stories that a man goes on a journey or a stranger comes to town. Those are the only two stories in the world. And

00:38:20 [Speaker Changed] Not quite, but he’s, he’s

00:38:21 [Speaker Changed] Not quite but you on, he’s pretty close. You’re on the right track.

00:38:23 [Speaker Changed] Right? Right. The

00:38:24 [Speaker Changed] The point is, there’s a finite number of stories, right? You can drill down. So you can get a couple of dozen about any sector you want to talk about or like, but it’s, it’s a finite number. And so what we do, and what I think is really interesting is to track that finite number of stories. And you’re right, it’s not just around markets. We track several thousand of these stories today.

00:38:50 [Speaker Changed] How so? Let’s, let’s delve into that. Yeah. So, so how do you, you have this massive database you’re sucking in every news feed. Yep. Everything magazine, newspaper, everything. Anything that you could quantify and, and run into a linguistics model. What’s the process for analyzing this? How to use artificial intelligence to, to go through this, and how do you make sense out of that heap of how do you find signal amidst all that noise?

00:39:23 [Speaker Changed] The crucial thing is you can’t just ask AI an open-ended question. Say, what are the narratives in Right? This comp for this company or for this sector? Don’t do that. Right? And this is a mistake that people make all the time. They ask open-ended questions of chat, GPT or or or whoever. The problem is chat, GPT will give you an answer.

00:39:45 [Speaker Changed] Just not a good one.

00:39:47 [Speaker Changed] Not a good one. It’ll hallucinate a lot. Yeah. Right. It’ll go out, it’ll find its own data. The, the secret to to using AI successfully is to take this magic genie because it’s a magic genie and you stuff it into that bottle, right? You do not let it out. You constrain it dramatically. You don’t let it go out and find data. You give it the data crucial thing. You don’t allow it to think. You tell it how to think. So the, the most important step that we do is we don’t ask ai what are the narratives that you look at? We tell it this is human direction. You have to have human control.

00:40:31 [Speaker Changed] So I’m hearing dataset is controlled by you as well as the thinking prompts. The seman.

00:40:39 [Speaker Changed] Yes. And it’s more than prompt, right? So the, it it, it includes prompt. But the, the phrase that’s used in this world is called not prompt engineering, but context engineering.

00:40:53 [Speaker Changed] Okay. That makes sense.

00:40:54 [Speaker Changed] So you want to, you want to control everything around the ai because you want to limit it to being that linguistic calculator. You want it to be your operating system. That’s really the way, the thing. And, and if you do that, then it will give you the same answer twice for the same inputs and the same question. That’s the crucial thing. So it’s

00:41:18 [Speaker Changed] Consistent

00:41:18 [Speaker Changed] For this to be true for, for it to be consistent, for it to be real signal. So this is a human directed process. You can’t ask AI an open-ended question. You have to control all the inputs. You have to control the output, meaning you judge it, you run it back through a different AI system to say, how’d they do? Did they go off the rails here? But the most important thing is you have to give it the scaffolding. You have to give it the, the skeleton. You have to tell it. These are the thoughts you are allowed to think about. You know what, and those are the, those are the, the signatures.

00:41:53 [Speaker Changed] I, I’ve kind of learned, I have to avoid asking questions that have a, a, a human emotional subtext. Like, tell me what was most surprising about this? Doesn’t know what a surprise is. Tell me what was most interesting about this. It does, it’s not able to do that. You really have to treat it like it’s a dumb machine.

00:42:18 [Speaker Changed] Well, that’s right. This is why, I mean, you treat it, you, you need to treat it as an operating system. You need to constrain every bit about it, particularly in how you allow it to think because it wants to please you so badly, right? It does. So if you ask it, what’s interesting, it will look back at its history of communication with you, and it’ll think, what will Barry find interesting? And it will give that answer to you. And if it can’t find it easily, it’ll make it up. It’ll make up an answer that you will find interesting.

00:42:48 [Speaker Changed] I, I find when I, I, I try and prompt, Hey, tell me about Ben Hunt’s background and gimme the timeline of his career that it’s good at. Hey, what was Ben Hunt really good at? It has, has got no idea.

00:43:04 [Speaker Changed] So what, what you’re able to do, if you’re able to, again, put the genie in the bottle, tell it how to think about a problem, is you’re able to identify, and this does go back to the work from 35 years ago, the type of stories we tell that we humans tell the, the about stocks or politics. We tell two types of stories. We tell descriptive stories. Oh, the, you know, the fed cut rates by 25 basis points today. A descriptive story. But, and we can also tell the description of the, you know,

00:43:45 [Speaker Changed] It’s the because clause, because we’re seeing slowing increasing layoffs and slowing consumer terms.

00:43:53 [Speaker Changed] And, and that’s high resolution and dec and, and very descriptive, right? The, the Powell was surprisingly hawkish today. And he was, that’s a description. There’s another type of story we tell Barry. And that’s prescriptive,

00:44:13 [Speaker Changed] Meaning,

00:44:13 [Speaker Changed] Meaning the Fed should be hawkish. The Fed should cut by 25 basis points. Those are the stories that are indicative of an effort being made to move public opinion in a certain direction.

00:44:33 That’s like the forward guidance that the Fed still does, right? Using their words for effect. They’re using words to nudge you and how you should think about the world, how to think about the world. So the crucial thing when we’re doing these, when we’re asking the AI to here’s, here’s all the text in the world, here are the stories that we want you to identify. We can also boil that down into identify the stories that are trying to tell the reader how they should think or how policy should go that we find has a lot of predictive capability to it.

00:45:18 [Speaker Changed] So you are in the business of analyzing the world’s narratives every day. How is that even possible? It seems like that is an impossible

00:45:29 [Speaker Changed] Test. That’s seem crazy.

00:45:30 [Speaker Changed] Crazy, right?

00:45:31 [Speaker Changed] And, and, and it used to be, it used to be crazy. I, I mean, Barry, I I really do remember my, in the academic days, I would literally hire grad students and give them a cup of dimes. So they go down to the microfiche machine.

00:45:46 [Speaker Changed] I remember those machines in the library. You

00:45:47 [Speaker Changed] Remember those

00:45:48 [Speaker Changed] Machines? Yes.

00:45:48 [Speaker Changed] Yes. You remember those machines? I would code, hand code the, or hand record the coded data. I would type it into remote access for a digital equipment mini frame. And the next day, you know, something would churn out for me. Right? Today it’s, I say we are, we’re processing hundreds of billions of tokens. We get millions of documents overnight like that.

00:46:16 [Speaker Changed] Is there there

00:46:17 [Speaker Changed] Any, is there infinite computing resources available to us? I,

00:46:20 [Speaker Changed] Is there anything you can’t access that you wish you had access to any data source?

00:46:28 [Speaker Changed] So one of the things that’s happened on Wall Street is that the banks and the sell side have become very jealous of their publications because they tend to think in their wrong that they’re good at it. Right? They’re that they’re good at analysis. I personally don’t think they are. Well,

00:46:49 [Speaker Changed] Let, let’s just say some are better than others. Some

00:46:52 [Speaker Changed] Are better than others, but, but none of ’em are really, if if they were, if there was, I’ll call it kind of significant alpha there, they wouldn’t be a bank.

00:47:04 [Speaker Changed] They’d be a hedge fund.

00:47:05 [Speaker Changed] Yeah. They wouldn’t be a ba on the, on the sell side. Now, so I’m interested in reading the sell side research, not because I think there’s some nugget of truth in there, but because I wanna see what they’re all talking about,

00:47:17 [Speaker Changed] Right? It’s reflective of, if not a consensus. Yeah. Certainly a a popular set of ideas.

00:47:24 [Speaker Changed] And, and this is a crucial thing to talk about what we do. I I don’t know what the truth is, right? I have

00:47:31 [Speaker Changed] No idea. Does it matter?

00:47:32 [Speaker Changed] And I don’t think it matters. I I want to provide this information to people who do have a view on the truth. Let’s say you’re a, you’re a value investor, right? You’re running a fund, you’ve got your views, you’ve done a, your homework, you’ve done your research,

00:47:47 [Speaker Changed] You’ve got a good back test. Yeah.

00:47:49 [Speaker Changed] You, yeah, yeah. You’ve got, so I’d say I’ve got, here are the companies where I think I’ve identified something special, something that’s valuable that the market does not recognize. And so I wanna buy it, and then I’m just gonna wait. I gotta wait until one day the market realizes the market comes to their senses and says, oh, wow, that should trade at a higher multiple or a higher price. Because that special thing that you saw, that source of value, the rest of the world comes to see that. Well, what I can think I can show you is when the rest of the world starts to wake up to whatever it is you’re looking for.

00:48:31 [Speaker Changed] So you’re catching the early lift off the bottom. That’s the

00:48:35 [Speaker Changed] Goal. I see. When the, when, when a value investment only works, when the market recognizes it. And we are tracking when something like that gets discovered by the market.

00:48:46 [Speaker Changed] So before Nvidia is 5 trillion, when it, when it starts ramping up to 500 billion, hey, something’s going on here.

00:48:57 [Speaker Changed] What I have found in my experience as an investor is that you make the most money on a trade during what I call the discovery phase of a trade. When the rest of the world wakes up to something that you had noticed and identified before, that’s when the money is made. Once it gets out there,

00:49:19 [Speaker Changed] Then it’s reflect then the, the market be ev is eventually efficient.

00:49:23 [Speaker Changed] It’s a different, it is a different risk and reward profile. Let me, let me put it that way. Fair. You, you, you get, you get a lot more ups and downs post that discovery phase than you do when you’re enjoying the discovery phase. It’s a lot harder. Once you have the, now you may say, oh, but there’s gonna be this other catalyst. And then say, well,

00:49:45 [Speaker Changed] But that, that discovery phase is, I’m gonna quote Doug, Cass, that’s the, there’s a phrase he uses it, it’s like a, a contrarian perspective. A variant perspective where a perspective, you have some insight that is not widely held. Right. And the market being mostly kind of sorta of eventually efficient if there’s a truth or at least a good story in your variant perspective, all

00:50:15 [Speaker Changed] It is a story, right? All it takes is a story. It’s

00:50:17 [Speaker Changed] Gotta be a good story though. Yeah.

00:50:19 [Speaker Changed] It’s gotta be a, well, I’ll call it, it’s gotta be a compelling story, right? Right. And that’s, that’s why you are looking for a CEO who can tell that compelling story. You’re looking for the ability to tell a compelling story, because that is what gives you a multiple. So let me multiple is story.

00:50:37 [Speaker Changed] So let me ask you a few more questions on, on Perent before we go into a few other areas. Sure. So first, you, you’ve been doing this for seven years. What are you doing today? That was unimaginable 4, 5, 6, 7 years ago.

00:50:54 [Speaker Changed] I, I tell you something that was unimaginable really two years ago. That’s amazing. And that is the ai. So what we were doing in our early days, we were basically doing small language models. We were making the language models essentially by hand. And, you know, we did our first models and our first versions of this, and we licensed it to some big banks. And here’s the problem, Barry. We, we had constructed a net and it was a pretty good net. I mean, when we would dip it into a data stream, we’d catch a fish meaning a signal. And the signal, oh, that, that signal works. You know, good, good. Hit on the, the signal that we put up. The problem was we were missing too many damn fish, right? Our, our net was too small. And we’d say, oh, we got this one. And then we’d look back at whatever it was.

00:51:46 We were designing the model. So we say, well, how did we miss all these other fish? And the answer was the small language model we were constructing. It’s incredibly complex if you are building these models without the probabilistic approach that modern LLMs allow you to take, right? So this is the whole notion of embedding. So that there are a million ways to say I’m bullish about the management change at company X, Y, Z. There are a million ways you can say that. And if you’re in the business as we were of kind of handcrafting, let’s write down all the ways you can say that. Oh, really? You miss a lot. Yeah. You’ve made a small net and what you’re trying to, to, to,

00:52:33 [Speaker Changed] And a and a small data set, and it’s

00:52:35 [Speaker Changed] A pretty small data set. So we, we rebuilt all of our software, again, using AI as an operating system context, engineering control, how you dole out the text data, how you test it, how you allow it to think. And we thought, all right, you know what? We’re building a bigger net. I bet we see five, maybe even six x improvement in our signal

00:53:05 [Speaker Changed] Catching. And what did you end up with over

00:53:06 [Speaker Changed] A hundred x?

00:53:07 [Speaker Changed] That’s unbelievable.

00:53:08 [Speaker Changed] Over a hundred x, it’s over. And now it’s, we’ve had a multiple of that. Again, it’s, it’s, it is hard to describe in, in the, in the, the expansion of the net is in so many different directions. Everything we were doing before was just English language,

00:53:23 [Speaker Changed] Right? So now you’re global and how many languages are you pulling into the,

00:53:29 [Speaker Changed] Anything, anything that an AI has been trained on, we read it and we can say we can,

00:53:35 [Speaker Changed] Is that 40 languages? Is that like how many languages? Well, there

00:53:38 [Speaker Changed] Are only a, you know, there are about a dozen languages that are useful in markets. So

00:53:43 [Speaker Changed] It’ll be Japanese, Chinese, a variety of European languages. So

00:53:47 [Speaker Changed] We can, we can

00:53:48 [Speaker Changed] Tell Indian,

00:53:49 [Speaker Changed] Here’s the, here’s a story here. The story about Chinese domestic markets. There’s a western story, western narrative,

00:53:57 [Speaker Changed] And there’s a domestic Chinese story. And the domestic

00:53:59 [Speaker Changed] Chinese story,

00:54:00 [Speaker Changed] Which is very different.

00:54:01 [Speaker Changed] Often it’s very different. So we were able, for example, picking up, we were able to pick up way before it, it, it got picked up in Western press. The demand for luxury goods in China went off a cliff.

00:54:19 [Speaker Changed] Cliff, yeah.

00:54:21 [Speaker Changed] In last November.

00:54:23 [Speaker Changed] Listen, you can’t go from a double digit GDP to like, low to mid single digits and not have it affect, especially in a country like that. Well,

00:54:31 [Speaker Changed] And, and, but, but it’s interesting, right? Because, because they’ve had, you know, ups and downs on business cycle before, but this is the first time where you saw consumer behavior that really was kind of similar to what you might find in a Western consumer behavior point being you didn’t hear that from LVMH or the Macau gaming guys until February. And we were picking that up in, in, in November from the domestic Chinese media.

00:54:58 [Speaker Changed] So, so that raises a, a really interesting question. You know, at the end of the day, clients want to be able to make money on your research. How are people putting this to work? How, how does what you are building help your clients generate alpha?

00:55:15 [Speaker Changed] What we think we’ve discovered is an entirely new source of data. And what we’re confident is that we’ve built the systems that are very different from what you see with this sort of analytics that are out there from anyone else. Right? So this is not sentiment, right? We’re not tracking or using mean words or nice words. By

00:55:37 [Speaker Changed] The way, that was a big thing, I dunno, was that 10 years ago we’re s we’re scanning Twitter to identify investor sentiment. Oh

00:55:44 [Speaker Changed] My god. I mean I, but I was just looking today and not to pick on Bloomberg, but you know, it was their live coverage of the Fed statement, right? Were at those meeting, they were analyzing the sentences and the fed statement for hawkish and dovish sentiment,

00:56:02 [Speaker Changed] How it changed from the last meeting. And,

00:56:05 [Speaker Changed] And

00:56:05 [Speaker Changed] So, so so you’re saying there’s not a whole lot of signal there.

00:56:08 [Speaker Changed] Hmm. I wanna be careful with what I say, right? Which is that there are a number of, I’ll call ’em high frequency stat arb guys, where if it’s important for you to note the difference in word choice on a millisecond level, I think there, I think you can get something outta that. I do. And so there are firms that can do that very well. That’s not our game, right? This is not the, what we’re trying to, to identify is not just sentiment, not just word choice. This is not Google trends and how many times did they mention AI in the earnings report, right? There’s, we’re able to track the actual stories that drive behavior.

00:56:54 [Speaker Changed] So that, that’s the next question. And, and I’m gonna give Dave not a credit for asking this. Does every narrative turn into a decision? How do you know when something is merely noisy versus where there’s a, a significant tradable signal?

00:57:14 [Speaker Changed] I don’t. Right. So this is, my goal is not to, oh, you know, do the trades. My goal is Mr. Hedge fund guy, Mr. Asset, allocator, you’ve got a, you know China, right? You know your companies, you know your commodities. Here is data that I think you’ll find useful. The efficacy of it though is up to you. I don’t know what you would, what, what you wanna do with it. I want to sell the picks and shovels honestly for this vast new data set that we all know is important. But we haven’t been able to measure it in a very predictive way before.

00:57:59 [Speaker Changed] So let’s talk about a few things related to that. Can I say one more

00:58:02 [Speaker Changed] Thing? Sure. And it’s not just about using this for investment. So we have a product for financial advisors, right? Which is your clients coming in, you’ve got a portfolio. You need to be able to say, what, what is, what is my client? What, what are they worried about? What are they nervous about? What are they hopeful for? What are the stories they’re reading?

00:58:26 [Speaker Changed] And you are pulling this out of the flow of media and

00:58:29 [Speaker Changed] We can tell you exactly for of, for the portfolio you’ve got for that client, here’s what they’re gonna be asking about, worried about. And here are the answers you can give them to show this is when has happened before, when this story has come up. Stay the course, it’s gonna be fine. This is the sort of stuff we can do for financial advisors. Huh.

00:58:46 [Speaker Changed] That’s really interesting. I would, I would love to see some of that. It’s not just

00:58:49 [Speaker Changed] In markets. Barry, I gotta tell you, the

00:58:53 [Speaker Changed] Policy makers, corporate executives, bankers,

00:58:56 [Speaker Changed] Policy. So we did a, you know, we did before in the run up to the Russian invasion of Ukraine and we published this on Epsilon Theory. And this is my old academic work, right? The book Getting to War before a country starts a war, they mobilize public opinion, right? And so we were looking at domestic Russian media looking at and saying, friends, this isn’t gonna li be a limited thing.

00:59:22 [Speaker Changed] This is happening.

00:59:23 [Speaker Changed] This is happening. It’s gonna be a full scale invasion. Because that was the messaging in domestic Russian media to the Russian people.

00:59:31 [Speaker Changed] Wow.

00:59:32 [Speaker Changed] So brands, right? So you are, you know, we’re working with some, some it sounds, but pro sports teams, you want to tell a story to

00:59:44 [Speaker Changed] Your fan

00:59:45 [Speaker Changed] Base, build a stadium,

00:59:46 [Speaker Changed] Sell some tickets to sell some

00:59:47 [Speaker Changed] Stadium. Yeah. Sell tickets, build a stadium, gimme some examples of people who have told good stories and how did that work for them? How can we do the same thing? So let’s,

00:59:56 [Speaker Changed] Let’s just start looking

00:59:57 [Speaker Changed] At storytelling.

00:59:58 [Speaker Changed] If Jeff Bezos was a subscriber to this back when he was trying to build a tax funded HQ on the Hudson, had he had your data and you were crunching all the New York City news stories about this, might you have been able to give him advice that he

01:00:19 [Speaker Changed] Suffered? A percent

01:00:20 [Speaker Changed] Suffered such a backlash. Because you

01:00:22 [Speaker Changed] Know what we have today? We have polls. Right? Right. Because,

01:00:24 [Speaker Changed] Which are terrible,

01:00:26 [Speaker Changed] Terrible, terrible. Right. Which are mostly terrible now, you know, and, and I love the poly market stuff and other things where you try to get as many people as possible to put money on something. Right?

01:00:34 [Speaker Changed] So, you know, when you ask a person a question, you’re asking them, Hey, what do you think you think? And what do you think you’re gonna do in the future when we know people are terrible at both of those things?

01:00:45 [Speaker Changed] Terrible at both of those things.

01:00:45 [Speaker Changed] But if you put a little money on it, alright, maybe they might be a little more circumspect that,

01:00:50 [Speaker Changed] That, that helped. That helps a ton. So, so in places where you can have a make a bet, I think that improves the kind of information you can get. It still lends itself to a lot of manipulation. Sure. And a lot of,

01:01:02 [Speaker Changed] They’re not issues around it, poly markets and cashie and all those things. It’s not the bond market. It’s not a hundred and something trillion dollars. It’s a couple of bucks on each of these. And sometimes that’s right, a million dollars moves a half a million dollars can move a market.

01:01:17 [Speaker Changed] But for a lot of things, let’s say you’re polling for a political candidate, right? You can’t ask them to put money down on something. Right? Right. You, but, but you really wanna know the, these, these policies that my candidate is thinking about taking on, is that popular? Does it resonate? Is it a compelling story? We can absolutely see if that is true by looking at local media, local social media, all of that. So it’s, it’s pretty wild there. I mean, once you start looking at how important stories are and once you’ve got a tool where you can actually measure them and visualize them, it’s like, it’s like, I feel like it was like when they invented whoever was Lovin Hook or whoever invented the microscope when you’re actually to see something that we all know is there,

01:02:05 [Speaker Changed] Well now we do back then. Right? Like remember germ theory took what a century to catch on it.

01:02:10 [Speaker Changed] It took a century. Yeah. And it takes, it takes seeing it, right? It takes the instrument to actually measure it before you actually believe in it. And so I, I, I feel like that’s kind of where we are right now. It’s these early days. But to actually see and measure the storytelling at this level of resolution, this magnification is pretty freaking cool.

01:02:29 [Speaker Changed] So, so we’re having this conversation with market at all time highs, and you’ve written about the ravine. Yep. Tell us a little bit about what is the ravine, how does, does your data identify that? Tell us what this means.

01:02:46 [Speaker Changed] Well there’s, there’s, there’s clearly been a change in policy regime out of, of Washington and

01:02:53 [Speaker Changed] New administration, and a radically different,

01:02:56 [Speaker Changed] Radically different

01:02:57 [Speaker Changed] Approach, even from the first Trump presidency,

01:02:59 [Speaker Changed] Even from the, the, the first presidency. And so what we’re able to, to measure, really measure is how does that, I’ll say play, but also what comes, narratives never happen in a vacuum. There’s always a counter story. For every bull story, there’s a bear story. And they, they, they, you can almost kind of see the battlefield of ideas, the battlefield of stories and how it emerges. So my strong sense, Barry, is that we are going towards politically in this country towards trench warfare, greater and greater, I’ll call it narrative violence. And it, if you look historically how that plays out in countries, it doesn’t, it doesn’t play out well.

01:03:56 [Speaker Changed] Civil war, domestic political violence, things like that.

01:04:01 [Speaker Changed] Sadly. Yes. Exactly like that. Exactly like that. So there’s that element. And so that’s a, that’s a sad one, you know, or a, a very troubling one and trying to, well, how do we navigate that? But even when in, in markets, and I alluded to this earlier, how capital markets have become a political utility and the, the role of markets in our society, you can really see how that changes in the stories we tell ourselves about the role of markets, what it’s there for. And I

01:04:38 [Speaker Changed] End of day options and speculation, what else is it supposed to be there for?

01:04:43 [Speaker Changed] But that, but that’s kind of what I’m getting at, Gary, right? You, you can see an enormous change in the meaning of markets. And it connects with a, yes, they’ll call it the speculation layer, but it also connects with financial nihilism, yolo, it, it, it leads to a very, I think, less attractive future for how we think about money and the role of markets and the role of capitalism

01:05:20 [Speaker Changed] Coming up. We continue our conversation with Ben Hunts, president and co-founder of persuent, discussing how money managers use their output to generate alpha. I’m Barry Ritholtz, you, you’re listening to Masters in Business on Bloomberg Radio. I am Barry Ritholtz. You are listening to Masters in Business on Bloomberg Radio. My extra special guest today is Ben Hunt. He is president and co-founder of Persuent, a data analytics narrative, storytelling, large language model, using artificial intelligence to find some signal amongst the noise firm. Their clients range everything from large money managers to hedge funds to academics and corporate America. So you write Epsilon Theory and some of it is for subscribers. Some of it is public. A lot of

01:06:35 [Speaker Changed] It’s public. Yeah.

01:06:36 [Speaker Changed] One of the things you wrote is absolutely my favorite item from the first few months of the Trump presidency because I like to talk in probabilities. ’cause I don’t know what’s gonna happen. Yep. But here’s the best case scenario. Here’s the worst case. Here’s all the middle scenarios. You wrote a piece, the end of Pax Americana that I thought was the most cogent, imaginative, well thought out. Hey, here’s the worst case scenario, and we are becoming dangerously flirting with this possible outcome. And I use that as all right, so here’s what I think is high probability. Yep. Here’s the best case. But if you really want to think about how this can go off the rails, check out what Ben wrote. And so tell us a little bit about how did Perent inform the end of Pax Americana? Because I, I get the sense that domestically that wasn’t really where a lot, what, how a lot of people were thinking. But I got the sense from overseas that was a much more common thought. Tell, tell us a little bit about both the piece and, and how the data informed it.

01:07:55 [Speaker Changed] I’ll start with the, I’ll call it the, the international dimension. I wanna come back to the domestic dimension because I, I think we’ve got some really interesting data recently to, to, to share. It goes back to this, yeah. Again, I, I cringe what I was talking about, but, but, but it is, it is game theory, right? And all game theory is, is strategic interaction. It’s that the, the United States, yes. Is the most powerful player on the world stage, but every country has some degrees of freedom and some autonomy in their, in the policies that they, that, that they implement this. There is not a dominant strategy, meaning an outcome. An equilibrium outcome. Again, I hate using these words, but I’ll use them anyway. All an equilibrium means is, it’s a balancing point where both parties, let’s call ’em the United States and a European country, where do they end up? Where they all say, okay, I can live with this, where I can live with this and the America first set of policies, and it’s all these set of policies. What you end up with is less potential economic growth, trade, all all of these things,

01:09:12 [Speaker Changed] All the things that we enjoyed post World War ii, that realignment, that imbued to our benefits so greatly,

01:09:20 [Speaker Changed] Enormously to our, to our, to our, to our advantage. Our advantage, yeah. Enormously to our advantage. It, it goes by the name of a soft power and you know, the dollar system, the bread, Bretton wood system, all of this

01:09:30 [Speaker Changed] Reserve currency on and off

01:09:32 [Speaker Changed] The reserve currency to finance our deficit. All of this is enormously to our advantage. And yes, there are free riders on that system. Yes, there are cost to that, particularly on defense and some other, some other areas. Tariffs are in other area where there’s absolutely free riders on that. So there’s improvement that can be made in that system, for sure. Right. But this is not, this is a different system. This is a different set of rules of the road. And it leads to a different strategic interaction between, between countries. So that’s what the note was about. And it’s, it’s, I’m not trying to predict, I’m just, I’m just trying to observe that. And which is a great line actually by George Soros, which is, you know, I’m, I’m not predicting, I’m observing, which I love that as a line I’m not. And our technology is not there to try to predict the future is trying to tell you what is true in the present today.

01:10:30 [Speaker Changed] I, I’m amazed how many people think they can forecast the future when they have no idea what’s happening. Right. I

01:10:36 [Speaker Changed] Wanna, I want to now cast what I want do. That’s exactly, yeah. Not, not forecast. I want to now cast. And that gets the, I wanted to talk about kind of domestic. So we started tracking the different narratives around immigration policy early last year and what you saw in some of the kind of simp

01:10:59 [Speaker Changed] This is during the run up to the election.

01:11:01 [Speaker Changed] Yes, exactly. And what you saw, and really going back, ’cause we can take, we take this stuff back for a decade or more. And what you absolutely saw up to last October, there’s a, there was an event from last October, not the election, but an event from last October. You see a steady increase in, regardless of your political affiliation. You know what immigration isn’t working for us isn’t as, as Americans saw a steady increase starting with the, they’re eating the, the cats.

01:11:37 [Speaker Changed] They’re eating the cats, they’re eating their dogs. They’re

01:11:40 [Speaker Changed] Eating the dogs. When you saw one, the, the Columbus mo when you, that, that moment,

01:11:45 [Speaker Changed] One of the most, that’s where things, the real moments in debate history.

01:11:49 [Speaker Changed] And we see very clearly in our media data, and this is, this is not mainstream media. This is everything that we’re pulling up. We’ve seen an, a really significant decline in the volume and density of, oh my God, immigration is a problem. We need mass deportations. On the contrary, we’ve seen an enormous increase, again, regardless of political affiliation, including Republicans. No, immigration is a good thing for this country. Huh? This is the stories of America that are pro-immigrant and immigration. Now, you would not believe that if you were looking at the policies that the White House has implemented during these first, you know, 10 months of the administration.

01:12:38 [Speaker Changed] So, wait, when did you first notice that? Regardless of policy, we think immigration is a net benefit to America. When did that first start showing up?

01:12:49 [Speaker Changed] It started changing right? In October because it, following

01:12:52 [Speaker Changed] The dogs,

01:12:53 [Speaker Changed] Cats, it was too far. It was, it was like, this is just silly stupid. This is silly and stupid. And it’s been a steady increase. You know? And you wouldn’t, you wouldn’t believe that if you were I immersed in Twitter stuff. But, but,

01:13:06 [Speaker Changed] So this

01:13:07 [Speaker Changed] Is, our country is actually quite pro-immigrant. I know that sounds cr

01:13:13 [Speaker Changed] But we are a nation of immigrants here. Here’s another data point that’s kind of mind blowing. We were talking about a different data point in, in the entirety of the US history, 2025 looks like the first year where the US population will decrease. Yeah, yeah, yeah. So it’s a decrease in legal immigrants. Not, not only illegal immigrants, but legal immigrants. Add that with the deportations and just people staying away.

01:13:41 [Speaker Changed] Well, this, this gets back to the, the, the economic picture and from other, so what, what you’ve had is a clear, and again, we, we, we see this in our data from other countries. There’s a clear effort to repatriate assets and funds away from the us. There’s been a clear effort outside the us You see this with central banks, but also with

01:14:03 [Speaker Changed] Cor hence gold. The big and gold. Gold. Correct.

01:14:07 [Speaker Changed] Treasuries used to be a safe haven asset. Right?

01:14:11 [Speaker Changed] No

01:14:11 [Speaker Changed] More. That’s, that’s, it’s, it’s,

01:14:13 [Speaker Changed] Do you understand how significant that charge is? That you’re making, you’re basic, enormous, basically accusing the president, well, of submarining one of the single greatest assets America halts. Well,

01:14:26 [Speaker Changed] That it’s a, it is built up to such a, an extent, right? That the way I think of this is an iceberg that is melting, but it is melting. What we do not see, we do not see capital flight.

01:14:40 [Speaker Changed] Right? We, we saw it for like a week in April, and then that was quickly

01:14:44 [Speaker Changed] Reversed. That was it. So there’s, there, there is, there’s no capital flight there, there are no,

01:14:47 [Speaker Changed] But there was some fear US

01:14:48 [Speaker Changed] Investors that leaving the country that there were fears, and we can track it. If that starts to happen, we’ll see it immediately. That’s not happening. Repatriation continues to happen.

01:15:00 [Speaker Changed] Slowly measured, balanced,

01:15:01 [Speaker Changed] Melting iceberg. Right? Because there are limits to, if you’re a Bermuda reinsurer, I mean, you’re kind of, you’re, you’re stuck with treasuries, right? Right. I mean that, that

01:15:11 [Speaker Changed] You’re, you could buy some gold to offset it, but you can’t sell a hundred billion dollars worth of treasuries. No, you

01:15:16 [Speaker Changed] Can’t. You can’t. So it’s a melting iceberg. But we can clearly see that the dog is not barking yet and maybe never will is capital flight. What we see in politically domestically is that actually, and this was validated by a Gallup poll they’ve been doing 20 years, which also showed what we had saw, started seeing a lot earlier where immigration as a thing is actually pretty darn popular in the United States.

01:15:47 [Speaker Changed] Yeah. But so are, so is restricting assault rifles and we can’t get any change on that. I that’s 75, 80% or the actual

01:15:57 [Speaker Changed] Large. I, I gotta tell you, I gotta tell you that depends very much in how that question is asked.

01:16:01 [Speaker Changed] Well, that’s true for all polling. Well,

01:16:04 [Speaker Changed] This is the benefit of what I’m trying. So, so when, when we’re doing these seman, we call the semantic signatures, it has nothing to do with how you’re phrasing the question. We’re not doing polling. We’re seeing what people are actually the meaning of what they’re talking about in, in media.

01:16:20 [Speaker Changed] So how does that play out if people are legitimately saying no immigration is a good thing for America. Is there an impact on population and the economy? Is there an impact on markets? Is there an impact on policy and politics?

01:16:35 [Speaker Changed] I think there’s an impact on the election, the midterms next year.

01:16:40 [Speaker Changed] So we’re talking, we’re talking literally 12 months from now.

01:16:45 [Speaker Changed] Yeah. ’cause that’s how this, the stuff gets ca on the political front narratives and opinions. They get cashed out in elections. Right. Mark are different. You, you cash stuff out every day. The right, the market’s

01:16:59 [Speaker Changed] Open every day. The feedback loop is so rapid with markets.

01:17:02 [Speaker Changed] Ex Exactly. Politics is a different story. So Right. It gets cashed out in the elections.

01:17:08 [Speaker Changed] If you were to ask me before this conversation, what’s the most significant impact on the midterm elections? There was just a Gallup poll yesterday, GOP questions on the economy. They were plus 14% two years ago. They’re minus 4% this year. Yeah, I,

01:17:26 [Speaker Changed] I saw that.

01:17:27 [Speaker Changed] And, and that’s an amazing swing. And I’m, I’m saying to myself, you know, listen, the out of power party usually picks up, you know, 10, 15 seats. Yeah. You have the redistricting question, which may blunt that. But if, if the most important question during the election was on the economy, and that’s an 18% swing, this is looking like a pretty substantial shift. What I’m hearing from you is, hey, this isn’t just about the economy.

01:17:55 [Speaker Changed] It’s not,

01:17:56 [Speaker Changed] It’s not what, so it’s the economy, it’s immigration. What else? What else are you seeing? That’s interesting. That’s

01:18:01 [Speaker Changed] It. That’s, that’s pretty. Now there are other aspects though, where the, the stories, it, this is, this is people talking about immigration as a thing. Now, whether, now whether that gets translated into a political party position. ’cause I gotta tell you, the Democratic party I is enormous enough. But there, there are no, there are no narratives that are being put forward by the Democrats that are powerful. Or, or, or, or popular. So I

01:18:31 [Speaker Changed] I I don’t, other than the mayoral contest in New York. Yeah,

01:18:34 [Speaker Changed] Yeah.

01:18:35 [Speaker Changed] Right. That what I, that’s this

01:18:36 [Speaker Changed] One. What I’m saying is that the, is that the many of the policies that are being presented by this administration are unpopular, not just with the Democrats, but with Republicans. And increasingly so immigration being one of them. I think economy being another one,

01:18:58 [Speaker Changed] Tariffs aren’t really popular amongst, but people perceive that as a tax increase or, or a pressure on small business

01:19:07 [Speaker Changed] Government shut down. Right? So both also not popular. And also in this, it, it’s, it’s that ’cause the, the question, oh, well, the Democrats will get blamed. Well, that’s not really true. That’s not what’s happening now. How that all

01:19:19 [Speaker Changed] Pay, pay and by the out and listeners should know. It is a long way off. You are not a hard, you’re not a Democrat. Oh my

01:19:25 [Speaker Changed] God. No.

01:19:26 [Speaker Changed] Like, like I know you and your politics and the stuff you’re saying, I, I could hear people shrugging and saying, oh, that Ben Hunt is just a liberal Democrat. I’m like, no, no, no. That’s not who Ben is.

01:19:37 [Speaker Changed] No, no, it’s not.

01:19:39 [Speaker Changed] You are just talking about here’s what I see in the data.

01:19:42 [Speaker Changed] I’m saying I’m observing. I don’t, I’m observing. And I think that a lot of times, if we are like me very online and on Twitter too much, right? You,

01:19:53 You don’t see the broader picture of what is happening on blog posts and local newspapers and, and, and everything else. So I think having the ability to read everything and track these stories that, you know, they don’t, they, they, like I say, they wax and wane, but they don’t, they don’t ever go away. The, it’s, it’s, it’s something we’re very excited about to track the stories of America. I’ll, I’ll give you another one. And this one actually, I don’t know what to do with this. One of the stories of America is that America has raised the world’s wealth, right? That, that that

01:20:48 [Speaker Changed] Global standard of living,

01:20:49 [Speaker Changed] Global standard of living, that, that America has been this powerful force to, and, and capitalism and America have been this powerful force to raise people outta poverty. That’s a story that in other periods of time has been out, has been prominently talked

01:21:08 [Speaker Changed] About. Very resonant.

01:21:09 [Speaker Changed] That story is non-existent today.

01:21:11 [Speaker Changed] Well, you cut things like HIVA few million dollars to inoculate all of Africa from HIV. That’s gonna have repercussions.

01:21:21 [Speaker Changed] Well, it, it’s, it’s not just that, that that has the con those those repercussions that you’re describing. Right. What I’m saying is that the story that would support that, it’s gone.

01:21:37 [Speaker Changed] Is it gone forever? Has no, has

01:21:39 [Speaker Changed] No, that’s, these things are never gone. These stories, stories have, they never die. Right? They’re, they’re, they’re waiting for a new force to give them life.

01:21:49 [Speaker Changed] The next version of it, if us is not seen as a force for raising people out of poverty around the world, do people see China as that force?

01:22:00 [Speaker Changed] Haven’t looked at that. We’ve been looking at the, the US store. But I, but I I, my my personal sense is, is that we’ve essentially seeded the field

01:22:09 [Speaker Changed] CEDD with a C not

01:22:10 [Speaker Changed] An S Yeah. With a C. Not in s particularly in South Asia and Africa to, to, to China. I, I mean, that, that seems, that seems pretty,

01:22:20 [Speaker Changed] You know, pretty clear. This is, I’m glad I asked the question about the end of Pax Americana. ’cause I, I, I’ve just found that piece so insightful and so useful, and I could keep you here talking about this stuff for hours. But out of deference and respect for our listeners’ time, I’m gonna jump to our favorite questions that I ask. Oh, sure, sure. All of our cl all of our guests. But before I do, there’s a question that I, I have to pose to you, which is, so you get to see things before they sort of bubble up into the mainstream before they become a well understood narrative. What’s a narrative that you are just starting to sniff out? That most of the world, or most of the country, or most of Wall Street and finance hasn’t seen yet?

01:23:15 [Speaker Changed] It’s a story that people are talking about since tricolor and first brands went out,

01:23:23 [Speaker Changed] Right? The, the,

01:23:24 [Speaker Changed] So it’s the story on, on credit, story of credit, and

01:23:29 [Speaker Changed] I mean, first brands is legitimate. It sounds like felonies were happening there. So we’ll have to see what, how that plays out. I

01:23:37 [Speaker Changed] Probably try color as, as as well. But my point is that every day you have a new bank, CEO come out and say, no, no, everything’s fine. Right? So yesterday it was David Solomon at Goldman Sachs saying, no, no, it’s fine. Today I was hearing the Brookfield guy saying, no, no, it’s fine. For every story, every interview, the guy says it’s fine. You’re getting two articles in the ft or the journal saying ain’t fine. So

01:24:09 [Speaker Changed] The, you think thou death protested too much. Is it that

01:24:12 [Speaker Changed] Well, I’m, I am I, all I’m saying is I am observing. I’m not predicting, I am observing the level of volume for Hmm. Alternative asset managers, their exposure to private credit. This is problematic. Oh, I’m wondering what’s gonna happen when the music stops. Oh, I think that these, this blows back into the commercial banking system. Those stories, those narratives are higher by an order of magnitude than they’ve been at any point in the last 10 years. Hmm. At any point, including during COVID during when you had similar concerns over, oh my god, private credits.

01:24:51 [Speaker Changed] I was easy to rationalize everything. Hey, listen, we’re all frozen. Just ignore it.

01:24:55 [Speaker Changed] But I, this is a story that has legs. It is growing in a way that I rarely see. And once a story like this grows, it doesn’t just go away. And it’s not fixed by Bernanke saying, oh, subprime is contained. Right.

01:25:13 [Speaker Changed] It’s immediately what I thought of as soon as you

01:25:15 [Speaker Changed] Mentioned it. Absolutely. It does not get fixed by people saying, don’t worry, there’s no problem.

01:25:21 [Speaker Changed] Jim Grant said he was right. It was contained to Earth. Yes. Yes. The rest of the solar system was fine. Which turned out to be a very witty and clever observation. This

01:25:31 [Speaker Changed] Story, this worry, this concern absolutely has legs. And we’re seeing no signs of it easing off in financial media and press. So

01:25:43 [Speaker Changed] The, the big question is, is it systemic? Or I don’t, is it the specific, like

01:25:49 [Speaker Changed] I say, I, I don’t know the truth, right? I don’t know reality. All I can tell you is

01:25:55 [Speaker Changed] We’re seeing more of this.

01:25:56 [Speaker Changed] Well, we’re seeing this is, this is the story.

01:25:59 [Speaker Changed] Huh. Really, really interesting. Let, let’s jump to our favorite questions, starting with who are your mentors who helped shape your career?

01:26:09 [Speaker Changed] Hmm. That’s good. Well, I, you know, I mentioned that the people both in undergrad and graduate school, who turned to me on to the science part of political science. And in particular in graduate school, Gary King, who runs the whole social science research center up there at Harvard and has for a long time now. He wrote the original, really the book on inference. You hear about inference all the time now.

01:26:34 [Speaker Changed] Well, Cialdini, of course.

01:26:36 [Speaker Changed] So the, the notion of inference taking large data sets and pulling out,

01:26:41 [Speaker Changed] Oh, inference. I thought you said influence. No, no, no, no. Inference. Inference.

01:26:46 [Speaker Changed] So the science of inference, the, I learned that from Gary, you know, 30 years ago. And it’s so interesting to see that come full circle because that’s at the core of, you know, Jensen Wong’s always talking about it and the whole notion of AI to that inference spend. They talk about, I was there at the beginning for how you, what inference is and why it is so powerful. That was a huge influence on me.

01:27:14 [Speaker Changed] Let’s talk about books. What are you reading now? What are some of your favorites?

01:27:19 [Speaker Changed] I’m a science fiction guy.

01:27:21 [Speaker Changed] Okay. I really am. You’re talking to another sci-fi guy. So let’s, so I I I give us something new and something classic. Well,

01:27:27 [Speaker Changed] Something classic would be Lu Hin and the Three Body Problem. Right.

01:27:32 [Speaker Changed] By the way, the Netflix show on that was surprisingly watchable.

01:27:36 [Speaker Changed] I thought it was excellent before that. And you know, I named the company after him was the Foundation Trilogy

01:27:44 [Speaker Changed] Asimov with

01:27:44 [Speaker Changed] Asimov. Those books hold up Less well, honestly. And I thought the, the series was, it had its moments. I

01:27:50 [Speaker Changed] Didn’t love the series. Yeah.

01:27:51 [Speaker Changed] It was, it was so pretty soso to me. Current science fiction. Rebecca goes, she goes by RF kwong and she wrote a book called Babel, and she’s got a new one out two B or

01:28:07 [Speaker Changed] One BBAB.

01:28:08 [Speaker Changed] Like Tower of Babel. Right. B-A-B-E-L. And she’s got a new one out Caba I think it is, but science fiction dealing with language and linguistics. I love that stuff.

01:28:19 [Speaker Changed] That, that, I love that stuff. That sounds like that’s right in your, your sweet spot. Let’s talk about streaming. What are you watching or listening today? Podcasts or Netflix or whatever? So,

01:28:29 [Speaker Changed] Honestly, I don’t listen to any podcasts. Isn’t that terrible to admit?

01:28:31 [Speaker Changed] Well, if you host, I will say this. If you host a podcast, you’re either preparing for a podcast Yeah. Doing a podcast or ordering a podcast. Alright. Right. So it’s like, all right. That’s three or four.

01:28:43 [Speaker Changed] That’s all it is. Yeah.

01:28:44 [Speaker Changed] Right. Every now and then I’ll, I’ll catch something. ’cause I wanna either listen to this, a specific guest, like IWI will not listen to any podcasts that you are on before we do our podcast. Right. ’cause I don’t wanna steal anybody else’s Yeah. Or narrative or questions or line of thinking. So I, that’s purposeful. But every now and then, so I listen to, the things I listen to are like John Pirelli’s Radio Deluxe. Yeah, yeah. Which is sort of like a podcast slash music series. Something

01:29:17 [Speaker Changed] A little different. Yeah, exactly Right. What,

01:29:20 [Speaker Changed] What about streaming? What are you watching? Well,

01:29:22 [Speaker Changed] You, you and I are both Big Godfather fans. So we love all the, the mobster. I Have you seen Mob Land yet? With, with No. Alright. Worth your time. Okay. Pierce Brosnan eats up every scene. Tom Hardy is awfully good. I just love him in anything. If you, I don’t know if you ever saw Peaky Blinders, right. Started as a modern

01:29:40 [Speaker Changed] Version of Pinky Blinders. I started, I kind of fall, so couldn’t get into it. So my issue is I have to watch something that my wife tolerates. Like I have, I have friends

01:29:49 [Speaker Changed] That’s a struggle

01:29:50 [Speaker Changed] Who, like, he goes into this room, she goes into that room, they don’t watch anything together. Like, I don’t know how that works. Like it’s, she’ll watch some stuff without me. I will watch some stuff without her. Right.

01:30:02 [Speaker Changed] You gotta have your own space.

01:30:02 [Speaker Changed] But 80% of what we watch, so I have fallen that’s hard down the British upstairs. Downstairs Gilded Age. Yeah. So we watched The Crown, we watched the Gilded Age. We finally, let

01:30:15 [Speaker Changed] Me give you one, lemme lemme

01:30:16 [Speaker Changed] Give you one. We went back to Downton Abbey, which I missed when I first rolled out.

01:30:20 [Speaker Changed] Check out. So my guilty pleasure, and I do watch this with my wife, is a diplomat.

01:30:25 [Speaker Changed] Ju the new series, just the new season just dropped new season. Yeah. And that’s teed up for this weekend. I’m looking forward to that. Excellent. That the first, was this season two or season three? The first season was great.

01:30:36 [Speaker Changed] Yeah.

01:30:37 [Speaker Changed] Yeah. And I’m gonna give you, if you like that. So my wife finds these really interest. She got me into Killing Eve, which was a little more spy fair than diplomacy. And if you get a chance to watch Slow Horses, oh,

01:30:52 [Speaker Changed] That’s the one I’ve gotta see. Yeah.

01:30:54 [Speaker Changed] It’s really, that’s the one. So the first season is great and people have told me the most recent season, it, it, some people will say, I don’t like the second kinds in the middle. I, I know people who loved it all the way through. But it’s, it’s really, it, it’s really an interesting well told beautiful cast. Just fantastic. Yeah. You’ll, you’ll love that. Our final two questions. Yeah. What sort of advice would you give a recent college grad interested in either investing or working with large language models, working with narrative analysis and artificial intelligence? Hmm.

01:31:35 [Speaker Changed] Don’t, and I, I say that tongue in cheek. I I,

01:31:41 [Speaker Changed] You had a lot of fits and starts going back seven, eight years

01:31:44 [Speaker Changed] For, for sure. And I, I tell you what I, I think’s I important you have to, what, what you, what I think you can accomplish in academia, either in grad school or whatever it is, is you build your intellectual capital. And so I think a lot of times when you get out of college, you say, okay, I’m just ready to kind of live my life and start something. And you haven’t built that intellectual capital yet. The the issue is though, is that once you enter, particularly the investment world where particularly if you’re responsible for managing other people’s money, brother, that’s it. Right? I mean, you’re, you’re, there’s, there’s not, you’ve, that’s got to be your, your total focus. You are spending your intellectual capital, you’re not gaining intellectual capital once you take on a role like that. So I, my first advice is find a a path where, and that’s often in, in, in academia where you’re building intellectual capital. Because once you leave that environment,

01:33:02 [Speaker Changed] Then you’re spending it down.

01:33:03 [Speaker Changed] You’re spending it down.

01:33:05 [Speaker Changed] Makes sense. You’re spending it down. Our, our final question. What do you know about the world of, fill in the blank in investing data analytics? Narrative storytelling today would’ve been helpful 25, 30 years ago

01:33:22 [Speaker Changed] In investing. I wish, I wish I had understood the role of, lemme step back a second. I, I think that whether you’re talking about data or whether you’re talking about investing, and I’ll speak for myself, but I think there are a lot of people like me. We think there’s an answer with a capital A right there in the, in the numbers. And if you just look hard enough, and if you work hard enough, you’ll find that answer. Right? You’ll find the secret, the secret formula.

01:34:00 [Speaker Changed] And you have learned since then,

01:34:03 [Speaker Changed] Ain’t no such thing. Right now, there is magic and there are patterns, but it’s, it’s, it’s not in the structured data, it’s not in the numbers, it’s actually in the error. It’s in the probabilities, it’s in, we’re calling, you know, the stochastic element, right? The, the, the role of chance and understanding that there are patterns and there’s real magic in understanding that I didn’t get that when I was either starting with data analysis or with investing. I was looking for the answer with a capital A as opposed to a process with a capital

01:34:43 [Speaker Changed] PII love that answer because, so my exercise in confirmation bias is I love the fact that you looking back, we all have the benefit of hindsight. Yeah. And unfortunately, that can be a bias to certain people. But when you’re looking back at it, you know how it happens at the moment when you don’t know what the outcome is, thinking about it, probabilistically is a much healthier approach than saying, here’s a binary up or down, yes or no. And I’m either right or wrong, and I see people struggle with that constantly,

01:35:21 [Speaker Changed] Constantly. When I first started in the investing world, again late, I got two pieces of good advice, right? One was never go all in. Right?

01:35:31 Which is, which is really interesting because it’s this, this business of investing. It’s a wonderful life. You were solving puzzles, we meet interesting people. We get to have these sort of conversations. It’s a, it’s a career for a lifetime. And the two pieces of advice are really, it never go all in. And also, reputation is absolutely the most important thing. And again, especially when you’re young, you think, oh, well that’s not the most important thing. You know, being right’s the most important thing. It ain’t, it’s playing the long game here, which you want to, it’s never go all in. And the reput reputation

01:36:16 [Speaker Changed] Is never go all in by never go in. You mean never put everything at risk so that if it doesn’t work out, you’re, you’re outta the game. You’re done, you’re out.

01:36:25 [Speaker Changed] Stay in the

01:36:25 [Speaker Changed] Game was the Gerald Loeb’s book, the Battle for Investment Survival? Stay

01:36:29 [Speaker Changed] In the Game, avoid that risk of ruin You, you, you just, or don’t ever risk ruin.

01:36:36 [Speaker Changed] That makes sense, right?

01:36:37 [Speaker Changed] Because once

01:36:37 [Speaker Changed] You, people don’t think in those terms, but that’s really, they don’t, they don’t all in means risk of ruin.

01:36:42 [Speaker Changed] It’s the risk of ruin. And it also connects with reputation because once you,

01:36:50 [Speaker Changed] Once you blow up, it’s tough to go back

01:36:53 [Speaker Changed] And you start saying, oh, I can fix it by taking this shortcut or doing this other thing. Right? And once you do that never ends Well, it never ends well. Right? And you tell yourself, oh, just this one time. It’s never this one time,

01:37:07 [Speaker Changed] Ben, this has been absolutely delightful. I’m so glad we’ve finally me too gone around to doing this. I, I I’m just entranced by your thought process. Some of the things like, I love reading stuff of yours that I totally disagree with. And then ’cause it forces me to say, well, he’s not just making this up. I know how you, your brain works. And it’s like, all right, if Ben is saying this, then I’m gonna make this my worst case than I’m, ’cause it’s easy to dismiss it. Everybody gets out seeking, confirming information and rather than being dismissive of it, alright, you claim to think probabilistically, where does this fit into the range of probabilities? And once you start thinking in those terms, it’s like, oh. So the worst case scenario is worse than my worst case scenario. I gotta move the bottom of my range down further. ’cause if this goes off the rails, this is really bad. That’s what your Pax Americana piece did with me. Well, thank you. And it really, it really helped me figure out how to think about, especially in that week between April 2nd and ninth, where everyone was losing their mind. It’s like, oh no. So they’re losing their mind. ’cause hey, this could happen. But maybe something good comes out of it. Trying

01:38:26 [Speaker Changed] To avoid tunnel vision. I think it’s so important in our business or any business, but especially our

01:38:31 [Speaker Changed] Business. In our business in particular. Well, thank you for being so generous with your time. We have been speaking with Ben Hunts. He is the co-founder and president of Prescient. And you can find his writing at Epsilon Theory. If you enjoy this conversation, well check out any of the 593 we’ve done over the past 11 and a half years. You can find those at Bloomberg, iTunes, Spotify, YouTube, wherever you find your favorite podcasts. Be sure and check out my new book, how Not to Invest the ideas, numbers, and behaviors that destroy wealth and how to avoid them at your favorite bookseller. I would be remiss if I did thank the Crack staff that helps put these conversations together each week. Alexis Noriega is my video producer. Sean Russo is my researcher. Anna Luke is my podcast producer. Short Sage Bauman is the head of podcasts here at Bloomberg. I’m Barry Riol. You’ve been listening to Masters in Business on Bloomberg Radio.

~~~

 

 

 

The post Transcript: Ben Hunt, co-founder Perscient appeared first on The Big Picture.

My morning train reads:

• Bill Pulte: Agent of Chaos: In an administration hardly known for competence, coherence and subtlety, Pulte stands out. When Treasury Secretary Scott Bessent reportedly threatened to punch Pulte “in your fucking face” and to “fucking beat your ass”, it was mostly notable for how many people both inside and outside the administration were seemingly #TeamBessent. (Financial Times)

• Is the Iranian Regime About to Collapse? Five conditions determine whether revolutions succeed. For the first time since 1979, Iran meets nearly all of them. (The Atlantic) see also Weakened by War, Iran’s Regime Faces Its Toughest Challenge Yet: Iranian leaders’ last claim to legitimacy was shattered in the war with Israel (Wall Street Journal) see also Death Toll in Iran May Already Be in the Thousands: To account for what it called a “significant” death toll, the Islamic Revolutionary Guard Corps on Sunday raised the specter of ISIS, claiming in a statement that slain protesters were terrorists hired by Israel and the U.S. (Time)

• How Google Got Its Groove Back and Edged Ahead of OpenAI: After ChatGPT dominated early chatbot market, Google staged comeback with powerful AI model; biggest search-engine overhaul in years. (Wall Street Journal)

• GE’s CEO Has Saved the House That Jack Welch Built: Shares of General Electric Co. have jumped out of the gate this year faster than the gains of the S&P 500 Index. That doesn’t sound like a stellar achievement unless you consider that the stock has already surged sixfold in the last three years. The fact that GE’s turnaround still has legs is testament to the talent of Chief Executive Officer Larry Culp, who took over a legendary company that was in deep trouble in 2018 and rescued it. (Bloomberg)

• Big Oil Knows That Trump’s Venezuela Plans Are Delusional: The president’s thinking is stuck in the 1980s. (The Atlantic)

• Americans Predict Challenging 2026 Across 13 Dimensions: Only the stock market evokes optimism from a majority in the U.S. (Gallup)

• Why Trump wants Greenland and what’s standing in his way: Denmark’s leader warned that any use of force by Washington to seize Greenland, as Trump officials have suggested, would render the postwar NATO alliance defunct. (Washington Post)

• My Playdate With the Watch Nerds: 48 Hours at the Watch Convention: A Casio man in a Rolex world crashes the convention where guys trade six-figure grails for fun. (The Cut)

• Grok Is Generating Sexual Content Far More Graphic Than What’s on X: A review of outputs hosted on Grok’s official website shows it’s being used to create violent sexual images and videos, as well as content that includes apparent minors. (Wired)

• How Amy Poehler’s ‘Good Hang’ broke through celebrity podcast fatigue: The market was saturated with stars chatting with other stars. But the ‘SNL’ veteran channeled the old magic of late-night TV talk shows. Now she’s a favorite in a new Golden Globe category. (Washington Post)

Be sure to check out our Masters in Business interview this weekend with Ben Hunt, founder of Perscient, a firm that studies how narratives and stories shape markets, investing, and social behavior through the lens of information theory, game theory, and unstructured data analysis. His work analyzes the language, story arcs, and viral spread of explanations in media.

 

Sign up for our reads-only mailing list here.

 

 

The post 10 Tuesday AM Reads appeared first on The Big Picture.

"The Globalist Deep State Is In Panic Mode" After Trump's Cash Cut-Off

Via Greg Hunter’s USAWatchdog.com,

Journalist Alex Newman, author of the popular book “Deep State” (which is soon to be massively updated and re-released), thinks evil powers trying to overthrow America are distraught because their money and plans are drying up. 

Newman says, “I think the globalist Deep State is in panic mode, and I think the Left is as well..."

"The operation against Maduro sent a massive shock wave through the global Left.  

I see the global Left as a tentacle of the global Deep State.  It runs right through Venezuela, and it runs right through Minneapolis. 

Let’s not forget what happened in 2020. . .. The so-called uprising was organized by Rockefeller front groups, and these are paid professional revolutionaries.  

Yes, they are useful idiots . . . but they have huge money at their disposal.”

In late November, Newman warned “Leftist Marxists Preparing Now to Take Over America.”  Then, Venezuela President Nicholus Maduro was arrested, and that threw a cold bucket of water on those plans.  Newman points out,

“Venezuela was the cash cow that was funding this entire subversive movement through drugs and oil. 

Donald Trump, in one fell swoop, took out that massive piece of their architecture, and they are pooping bricks. 

They are absolutely terrified about what may come next.”

We already know the payments in the so-called Somali welfare fraud have been cut off by the federal government.  Treasury Secretary Scott Bessent is also cutting off billions of dollars of more fraud by changing money transfer rules.  On top of that, Newman says Trump has given a huge blow to the globalist UN climate treaty that also is cutting off big money.  Newman says, 

“The UN Framework Convention on Climate Change (UNFCCC), this is the foundation of the UN climate regime and Donald Trump just utterly obliterated it.  This is some of the best news we have heard in a very long time.  The UN is very mad, and their chief spokesman is saying the US has a legal obligation to keep paying them.” 

That is not going to happen, which means more cash cut from evil people trying to destroy America.  Newman adds,

“This is just the beginning, and they have done a yearlong review of UN agencies that are useless, anti-American and wasteful.  The first 66 just dropped, and we expect more.  This is Earth shattering news.  This is huge news and really significant.”

The other really significant thing about Venezuela is the voter fraud that has rigged elections in the Western hemisphere for many years.  Newman says, “In Caracas, with Cuban help, they created lots of tools to steal elections..."

" It was not just in Latin America but here in the United States.  There are a lot of people in the Trump Administration who know about this.  I think this was one of the big things on Trump’s mind when he started thinking about what do we do with Venezuela?  We have had multiple whistleblowers come out and confirm almost all of this involvement in voter fraud. 

The big take away here is . . . they created software to rig and steal elections in Latin America and here in the United States, and the Trump Administration knows about it.”

There is much more in the 60-minute interview.

Join Greg Hunter of USAWatchdog as he goes One-on-One with hard-hitting journalist Alex Newman, founder of LibertySentinel.org, where he talks about the increasing violence by the globalist Deep State to take down America and why they are prepping for civil war now.  Newman is also the author of the newly released book “Woke and Weaponized.”  This is a stark warning for all parents about the communist plan to control and brainwash the next generation in our public schools for 1.10.26.

Tyler Durden Mon, 01/12/2026 - 19:45

DoJ Charges Venezuelan Illegal Over Border Patrol Vehicle Ramming Attack

Fox News reporter Bill Melugin reports that the Department of Justice has charged a Venezuelan national, who was shot by Border Patrol in the Portland metro area last Thursday, with aggravated assault on a federal officer with a deadly weapon after allegedly using his red pickup truck to ram a federal vehicle. This follows the recent ICE shooting in Minneapolis that left one far-left activist dead. Additionally, attacks on federal agents are on the rise.

Melugin further explained how the DoJ arrived at the charges and provided additional color about the ramming attack carried out by the illegal, who is allegedly tied to the Tren de Aragua (FTO designation):

DOJ has just charged the Venezuelan illegal alien shot by Border Patrol in Portland on Thursday with 18 USC 111 (aggravated assault of a federal officer w/ a deadly weapon), and they've provided photos of the badly damaged BP vehicle they say he rammed several times during the targeted arrest. According to DOJ, LUIS NINO-MONCADA, allegedly affiliated with Tren de Aragua, admitted to intentionally using a red pickup truck to ram the federal vehicle, said he knew they were immigration agents, and said "fuck ICE" while having a tourniquet applied to his gunshot wound by medics. DOJ says MONCADA was ordered deported by an immigration judge in Denver, CO in November 2024.

According to the criminal complaint, the actual target of Border Patrol's operation was MONCADA's female associate, Yorlenys Betzabeth Zambrano-Contreras, a Venezuelan illegal alien and suspected TdA associate who was caught and released at the Texas border by the Biden administration in September 2023. She was ordered to check in at an ICE officer after release, but never did, making her subject to immigration arrest. DOJ says she is also believed to be involved with a Tren de Aragua prostitution ring, and was connected to a July 2025 shooting in Washington County during a prostitution deal that went bad.

FOX is told that Zambrano-Contreras is also now in federal custody, and is being charged by DOJ in the Western District of Texas with 8 USC 1325, illegal entry by an alien (yes, crossing the border illegally is a federal crime).

BREAKING: DOJ has just charged the Venezuelan illegal alien shot by Border Patrol in Portland on Thursday with 18 USC 111 (aggravated assault of a federal officer w/ a deadly weapon), and they've provided photos of the badly damaged BP vehicle they say he rammed several times… pic.twitter.com/3Ciy1EZd35

— Bill Melugin (@BillMelugin_) January 12, 2026

Melugin posted a snippet of the DoJ federal complaint:

From the DOJ federal complaint as to what happened when Border Patrol initiated a traffic stop to make the arrest. pic.twitter.com/BkIc7LIEoD

— Bill Melugin (@BillMelugin_) January 12, 2026

"He should NEVER have been in our country to begin with, and we will ensure he NEVER walks free in America again," Attorney General Pamela Bondi wrote on X.

Anyone who crosses the red line of assaulting law enforcement will be met with the full force of this Justice Department.

According to a newly unsealed complaint, Luis Nino-Moncada — an illegal alien in Portland, Oregon with ties to Tren de Aragua — is alleged to have repeatedly… pic.twitter.com/uC6rk4Uode

— Attorney General Pamela Bondi (@AGPamBondi) January 12, 2026

Related:

• Minneapolis ICE Shooting Shows Left Wing's Protest Industrial Complex Wants Another 'George Floyd'-Type Riot

The Venezuelan illegal alien with ties to TdA is exactly the type of person the Democratic Party is protecting. The party’s left wing has made it clear it puts everyone except American citizens first.

Tyler Durden Mon, 01/12/2026 - 19:20

The post Donald Trump, Mineral Man, vs. Sodium Batteries appeared first on CEPR.

The post Three Bad Items and Three Good Items in the December Jobs Report appeared first on CEPR.

South Korea To Lift Ban On Corporate Crypto Investment: Report

Authored by Martin Young via CoinTelegraph.com,

South Korea’s Financial Services Commission (FSC) is reportedly updating its guidelines to allow corporations to invest in digital assets after a nine-year ban. 

Listed companies and professional investors will be able to invest up to 5% of their equity capital in crypto assets, reported local news outlet Seoul Economic Daily on Sunday. 

According to the report, a senior FSC official familiar with the matter said the authorities will “release the final guidelines in January [or] February and allow virtual currency transactions for investment and financial purposes by legal entities.”

The move overturns a nine-year ban on corporate crypto investment dating back to 2017, when financial authorities banned institutional participation amid concerns over money laundering.

However, investments will be limited to the top 20 crypto assets by market capitalization and can only be made on Korea’s five largest regulated exchanges. 

The inclusion of dollar-pegged stablecoins such as Tether’s USDT is still being discussed, the report noted. 

The FSC shared the latest guidelines with its crypto working group on Jan. 6 and first announced plans for a phased approach to easing rules for corporate crypto investments in February 2025.  

Potential bullish impact on Korean markets 

The move could bring tens of trillions of won into crypto markets. South Korean internet giant Naver, which has 27 trillion won ($18.4 billion) in equity capital, could theoretically buy 10,000 BTC, according to the report. 

It added that the launch of a national stablecoin and spot Bitcoin exchange-traded funds is also expected to be accelerated once the corporate investment capacity is secured. Support for crypto ETFs has been building across the country, but regulatory approval remains stalled. 

The move could also result in an expansion of local crypto companies, blockchain startups, and digital asset treasuries (DATs) while boosting domestic investment in digital assets. 

Large South Korean companies have been forced to invest overseas to avoid local restrictions, it added. 

CBDC and stablecoins focus of the economic strategy

The outlet reported on Friday that the South Korean government announced an ambitious digital currency strategy with a primary goal of executing 25% of all national treasury funds through a central bank digital currency (CBDC) by 2030.

The initiative, which is part of the 2026 Economic Growth Strategy, also involves introducing a licensing system for stablecoin issuers, such as Tether, requiring 100% reserve asset backing and legally guaranteeing users’ redemption rights. 

Tyler Durden Mon, 01/12/2026 - 18:55

Mexico Reports Positive Conversation With Trump On Security, Drug Trafficking

Mexican President Claudia Sheinbaum said on Jan. 12 that she had a productive dialogue with President Donald Trump on efforts to combat drug trafficking and other issues of mutual concern.

“We had a very good conversation with the President of the United States, Donald Trump,” Sheinbaum wrote in a post on X on Monday.

“We discussed various topics, including security, with respect for our sovereignty, reducing drug trafficking, trade, and investment. Collaboration and cooperation within a framework of mutual respect always yield results.”

As The Epoch Times' Ryan Morgan reports, the conversation between the two heads of state comes as Trump has raised pressure on Mexico and other Latin American states to increase cooperation with the United States, particularly in efforts to curb drug trafficking.

After U.S. forces captured Venezuelan leader Nicolás Maduro in a pre-dawn raid on Jan. 3, Trump said Mexico needs to “get its act together” when dealing with drug cartels and reiterated offers to send U.S. forces to assist in such efforts.

On Jan. 8, Trump raised the stakes further, suggesting U.S. military strikes could focus on land-based cartel targets in Mexico in the future.

Thus far, Sheinbaum has been opposed to U.S. military action in Mexico.

Speaking with reporters at a Monday press conference, Sheinbaum said she and Trump again discussed a U.S. force deployment to Mexico and said Trump was understanding as she reiterated her opposition to such a move.

“He didn’t insist either; rather, it was in the tone of, ‘If you want us to help you more with our forces in Mexico,’ I told him, ‘Well, no, I’ve already told you several times that that’s not on the table,’ but we continue to collaborate within the framework of our sovereignties,” Sheinbaum recounted of the conversation.

The Epoch Times reached out to the White House for comment on the call between Trump and Sheinbaum but did not receive a response by the time of publication.

U.S. Secretary of State Marco Rubio held a separate call with Mexican Foreign Secretary Juan Ramón de la Fuente on Jan. 11.

State Department spokesman Tommy Pigott said the two discussed “the need for stronger cooperation to dismantle Mexico’s violent narcoterrorist networks and stop the trafficking of fentanyl and weapons.”

“Secretary Rubio reaffirmed the United States’ commitment to stopping narcoterrorism and stressed the need for tangible results to protect our homeland and hemisphere.”

Colombia and Cuba also face increased pressure from a Trump administration emboldened by the Maduro raid.

Trump and Colombian President Gustavo Petro have traded barbs in recent weeks, with the U.S. president faulting his Colombian counterpart for not cooperating closely enough on efforts to stamp out Colombia’s cocaine production.

Last week, Trump reported a productive phone conversation with Petro and indicated plans to host him at the White House in the near future.

U.S. pressure on Cuba remains high.

Trump, in a post on Truth Social on Sunday, said he had cut Cuba off from Venezuela’s oil supply.

“There will be no more oil or money going to Cuba—zero! I strongly suggest they make a deal, before it is too late,” Trump wrote in mostly all caps.

The United States has limited its engagement with the Cuban leadership for decades, after the Caribbean island nation came under communist control following Fidel Castro’s 1959 revolution.

In a press statement following Trump’s latest comments, Cuban leader Miguel Díaz-Canel Bermúdez said U.S.-Cuba relations “must be based on International Law rather than on hostility, threats, and economic coercion.”

Tyler Durden Mon, 01/12/2026 - 18:30

Trump Imposes 25% Tariff On Any Country Doing Business With Iran "Effective Immediately"

After it quietly faded away in late summer, that trade war with China is about to make a triumphal reappearance.

In a day that was already flooded by a relentless firehose of newsflow, Trump added to the leaning tower of chaos when said on Truth Social that he was imposing a 25% tariff on goods from countries “doing business” with Iran (most notably China which is its largest oil client), ratcheting up pressure on the government in Tehran that has been rocked by widespread protests.

Trump said that the new duty would be “effective immediately,” without providing any details about the scope or implementation of the charges, leaving traders to act first and ask questions later if at all (a big reason why there is zero liquidity in the market is because people are trading with zero conviction and unwind trades just as fast as they put them on).

The action has the potential to disrupt major US trading relationships across the globe: as Bloomberg notes, Iran’s partners include not only neighboring states, but large economies including India, Turkey and especially China.

“Any Country doing business with the Islamic Republic of Iran will pay a Tariff of 25% on any and all business being done with the United States of America. This Order is final and conclusive,” he said.

Previously, Trump had imposed tariffs as high as 50% on Indian goods tied to their purchase of Russian oil, and while India initially reduced its purchases of Russian crude it has since ramped them back up; China on the other hand, never even noticed the Trumpian edict.

Needless to say, the additional 25% tariff - assuming it sticks - hitting Beijing exports risks upsetting the trade truce Trump negotiated with Chinese President Xi Jinping late last year. China is the world’s top buyer of Iranian crude and the nation’s independent refiners were increasing their intake of the oil as of last month.

While the lack of details in the Trump declaration was confusing, adding to the sheer chaos is an impending decision by the US Supreme Court on the legality of Trump’s global tariffs. If the justices rule against him, it could hamper his ability to quickly impose duties on Iran’s partners. The court’s next opinion day is Wednesday.

As for Iran, it has been experiencing weeks of mass unrest, which was initially sparked by a currency crisis and worsening economic conditions but has increasingly been aimed at the regime. It’s amounted to the biggest challenge to the Islamic Republic’s ruling system since 1979. While Supreme Leader Ayatollah Ali Khamenei’s regime has weathered protests before, the demonstrations are spreading and drew hundreds of thousands of people, by some accounts, across the country over the weekend. Iranian authorities have sought to stamp out the protests with more than 500 people killed so far and more than 10,000 arrests, according to the Human Rights Activists News Agency.

Trump has openly backed the protesters and warned Tehran against violently repressing the demonstrations. In an interview on Fox News last week, he said the US would hit Iran “very hard” if it continued to shoot at protesters.

As reported earlier, Trump president told reporters on Sunday that the Iranian leadership has reached out to seek talks and that a meeting is being set up, without offering details on timing. Still, he said that his administration is considering potential options and indicated he was coordinating with allies in response to Iran.

“We’re looking at it very seriously. The military is looking at it, and we’re looking at some very strong options,” Trump told reporters. “I’m getting an hourly report and we’re going to make a determination.”

Also over the weekend, a White House official said that Trump has been briefed on a range of options for military strikes in Iran, including nonmilitary sites. The president is seriously considering authorizing an attack, according to the official who requested anonymity to detail internal discussions.

Still, there is hope for a peaceful resolution: Iranian Foreign Minister Abbas Araghchi has opened channels of communication with Trump’s Middle East envoy, Steve Witkoff, a spokesman from the ministry said Monday.

Meanwhile, Iran has warned the US and Israel - which coordinated to carry out strikes on nuclear facilities in the country last year - against any attempt to intervene. Tehran and Washington have not had formal diplomatic ties for decades.

Trump’s threats to Iran have the region on edge, coming on the heels of a US strike earlier this month in Venezuela - another oil-rich country - which led to the capture of strongman Nicolas Maduro. Should the US or its ally, Israel, intervene, that threatens to draw neighboring countries into the crisis and risk access to the Strait of Hormuz, a key waterway for energy exporters.

Tyler Durden Mon, 01/12/2026 - 18:23

The ICE Elephant: Why The Law Requires All The Facts

Authored by Jonathan Turley,

In a famous Indian parable, five blind men are brought to an elephant. Each feels a different part of the animal, and they come to radically different views of what an elephant is. It depended on which parts they touched, from tusk to tail.

The controversy over the shooting of Renee Nicole Good, 37, is a type of political elephant parable.

People focus on only certain parts of the story to support what they want the case to mean.

Critics and supporters of the responsible officer have slowed down videotapes that last, in critical part, for only a few seconds.

The only difference is that, in this modern parable, many are just willfully blind, choosing not to see beyond their own rage.

This week, Minneapolis Mayor Jacob Frey (D) became the personification of rage, spewing profanities about ICE while declaring, shortly after the shooting, that the ICE officer was a murderer.

After immediately declaring the officer’s guilt, Frey spent day two lambasting the federal government for rushing to conclusions and demanding that his people play a role in the investigation.

As for his unhinged, profane diatribe, Frey mocked critics if he “offended their Disney princess ears.”

Frey fulfilled the parable most clearly in his use of statistics. He declared that fifty percent of shootings in the city this year were committed by ICE. He then later admitted that, since it was only Jan. 9, there had been only two shootings. Indeed, he could have argued that ICE was responsible for 100 percent of the shootings in the city on Jan. 7.

Again, the trick is to examine the smallest part of the animal and extrapolate to draw sweeping conclusions.

The recently released videotape from the responsible officer also shows how people will focus on insular elements rather than the “totality of the circumstances,” the standard for such cases established by the Supreme Court.

For example, many supporters of the officer are citing the obstruction and taunting by Good and her wife, who were reportedly working with an anti-ICE group. At one point, Becca Good dares the officer to do something as they blocked the road, telling the officer “Do you want to come at us? I say go and get yourself some lunch, big boy.”

For critics, they have focused on Renee Good’s last words: “That’s fine dude, I’m not mad at you, I’m not mad at any of you.” Whether Good was being peaceful or passive-aggressive, others are clearly very, very mad. They are using her statement to push protesters to the brink of violence.

Democratic leaders declared ICE to be “terrorists” and called for mass protests in the very same city that burned in 2020 after the George Floyd riots. Right on cue, one Black Lives Matter leader suggested that the prosecution of officers in the George Floyd case only occurred because protesters burned down the city. She told protesters to ignore pleas not to do it again. “Let me tell you this. We need justice and we need it now.”

Protesters in other cities chanted “Kristi Noem will hang” and “Save a Life, Kill an ICE.”

In the same presser where he condemned federal officials for jumping to conclusions, Frey not only reaffirmed that Good had been murdered but added that the officer was not actually injured as claimed. “The ICE agent walked away with a hip injury that he might as well have gotten from closing a refrigerator door with his hips,” he said. “He was not injured. Give me a break. No, he was not ran over. He walked out of there with a hop in his step.”

Few of us have been in Frey’s kitchen, but the latest videotape seems to show something more intense than an encounter with his fridge. The video shows the agent being hit by the vehicle as Good ignores orders to get out of the car, as Becca Good is screaming, “drive, drive, drive.”

Reasonable people can disagree on whether the officer should have discharged his weapon. Flight alone is not grounds for the use of lethal force. However, Good’s actions could also be interpreted as an intentional endangerment of the officer.

At a minimum, it was clearly reckless, as another officer was trying to reach into the vehicle and Good refused to yield to the effort to place her into custody. The Goods forced the confrontation, and Renee Good then escalated the level of danger by speeding toward an officer.

This is why the legal standard requires you to take in the entire elephant, not just insular parts.

While there may still be countervailing facts emerging from the investigation, the governing legal standard clearly favors the officer. It is Good’s actions, not her motivations, that are critical to determining whether excessive force was used. The officer’s cellphone video shows he had a fraction of a second to decide and fired after being struck by the car. (The same officer had been seriously hurt previously after being dragged by a car.)

The Justice Department’s guidances incorporate the standards outlined in past Supreme Court decisions, such as Graham v. Connor (1989). Again, individual elements can be viewed in isolation as favoring or disfavoring the use of force, including the severity of the crime at issue (in this case likely a misdemeanor) and whether the suspect was “attempting to evade arrest by flight.” The guidelines stress that “[t]he ‘reasonableness’ of a particular use of force must be judged from the perspective of a reasonable officer on the scene, rather than with the 20/20 vision of hindsight.”

This tragedy shows that people watching the same videotapes can come to diametrically opposed conclusions. Take the speed of the vehicle. Some have noted that the car was traveling less than 10 miles per hour before it collided with another vehicle. However, the speed after the shooting of Good is immaterial. The relevant question is the distance and speed with reference to the officer. It was clearly speeding up and immediately struck the officer before Good was shot.

The same is true of those who note how the wheels appear to be turning toward or away from the officer. The fact is, Good struck the officer. That does not mean she intended to do so, but that does not matter. From the officer’s perspective, Good was ignoring orders while speeding toward him from just feet away.

There will likely be civil litigation. Democrats have also called for criminal charges. The arguments on both sides of this controversy show, at most, that the issue is debatable. The officer could be viewed as wrong and still be found to have acted within the scope of his discretion in responding to a threat. Any state effort to charge the officer will be removed to federal court, where he will likely have immunity based on this evidence.

The public would be wise to ignore conclusions reached blindly by either side. In an “Age of Rage,” we live in the land of the blind, where the one-eyed man is king. The public must remain clear-eyed and calm as the investigation proceeds in Minneapolis.

Jonathan Turley is a law professor and the author of the forthcoming “Rage and the Republic: The Unfinished Story of the American Revolution.”

Tyler Durden Mon, 01/12/2026 - 18:05

Australia Joins The Rare Earth Reserve Rush

Australia will begin purchasing and storing key minerals for defense and high-tech industries from local miners as part of a A$1.2 billion ($802 million) national reserve aimed at strengthening global supply chains, according to a new report from Bloomberg.

Bloomberg reports that the initial stockpile will target rare earths, antimony and gallium, according to Treasurer Jim Chalmers, Resources Minister Madeleine King and Trade Minister Don Farrell. As one of the largest rare-earth producers outside China, Australia hopes the move will reduce Beijing’s leverage over critical resources.

Critical minerals have become a flashpoint in global trade disputes, particularly after China used its market dominance during trade tensions with the US. That has driven other nations to see local production and reserves as strategic priorities.

“Developing the Strategic Reserve is another important step in Australia leading on critical minerals globally,” Chalmers said. The stockpile will ensure “Australia is at the center of efforts to build stable and reliable supply chains for our international partners.”

Mining stocks rose on the news, with Lynas Rare Earths climbing up to 6.5% and Larvotto Resources jumping 8.8%. Larvotto, which is developing one of the world’s largest antimony projects, welcomed the move.

“The federal government is leading from the front on this, and we’re extremely happy antimony is one of the focuses,” said CEO Ron Meeks. “We will produce 7% of the world’s antimony, so we will be one of the largest suppliers. We’ll start production in August.”

The strategy follows China’s recent rare-earth export restrictions on Japan and builds on last year’s US-Australia agreement to expand American access to critical minerals, a deal covering roughly A$13 billion in projects. Officials also say the reserve could help stabilize prices and shield producers from future market downturns driven by cheap Chinese supply.

Rare earths are vital for permanent magnets used in defense and medical systems, while antimony supports electronics and flame retardants, and gallium is essential for advanced semiconductors in radar and communications.

Of course, we have been documenting the "rare earth revolution" since summer of last year, when we wrote that China’s export controls on key rare earth elements—especially the “heavy” ones used in high-performance permanent magnets—were creating shortages and price distortions outside China, exposing how dependent the world is on China for mined, refined, and magnet-ready material.

We noted that this mattered because rare earth magnets are foundational to today’s EVs, electronics, wind power, and defense systems, and they’re expected to be even more important for future robotics/humanoids.

With supply security viewed as a national-security issue, we correctly noted that governments and customers were prioritizing “ex-China” supply chains even if costs rise, and that shift is likely to support higher rare earth pricing and premium economics for the limited number of existing non-China players.

Tyler Durden Mon, 01/12/2026 - 17:40

States Poised To Win Supreme Court Battle Over Men In Women's Sports, Legal Experts Predict

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

The U.S. Supreme Court will uphold two state laws that ban male athletes who don’t identify with their sex from competing on school sports teams intended for females, legal experts say.

The U.S. Supreme Court in Washington on Jan. 5, 2026. Madalina Kilroy/The Epoch Times

Their comments come as the nation’s highest court prepares to hear back-to-back oral arguments on Jan. 13 in Little v. Hecox and West Virginia v. B.P.J.

Idaho and West Virginia argue their respective laws comply with the 14th Amendment to the Constitution. Its equal protection clause says no state “shall … deny to any person within its jurisdiction the equal protection of the laws.”

The states also say their laws do not violate Title IX, a federal civil rights law that forbids sex-based discrimination at any school that receives federal funding.

Currently, 27 states have bans preventing males who identify as transgender from participating in girls’ and women’s sports, according to a report by the Williams Institute at the UCLA School of Law.

Advocates for transgender participation on female sports teams say these state bans are discriminatory and divisive.

The American Civil Liberties Union (ACLU), which is representing the transgender-identifying athletes in both cases, said in September 2025 that such athletes have been “the focus of a relentless media campaign designed to make their participation seem like a threat to girls who are not transgender.”

The group said those on the other side want “a sweeping legal precedent that endangers transgender people (and other people, including gay, lesbian, and bisexual people, and all women) across our lives, not just in sports.”

Idaho Case

Little v. Hecox is about Idaho’s Fairness in Women’s Sports Act, “which ensures that women and girls do not have to compete against men and boys, no matter how those men and boys identify,” according to the petition filed in the case.

Lindsay Hecox [seriously?], a male who identifies as female, wanted to compete on a university’s women’s track and cross-country teams. Hecox sued, arguing the law violates the equal protection clause and Title IX.

A federal district court issued a preliminary injunction blocking the act so Hecox could try out for the teams. The court ruled the act discriminates against transgender-identifying athletes.

“The physiological differences,” between females and males, “do not overcome the inescapable conclusion that the Act discriminates on the basis of transgender status,” the petition said.

The U.S. Court of Appeals for the Ninth Circuit affirmed the injunction, holding that laws making sex-based distinctions in schools serve as “proxy discrimination” against transgender-identifying athletes.

West Virginia Case

West Virginia v. B.P.J. is about that state’s Save Women’s Sports Act, which stipulates that female teams based on “competitive skill” or involving “a contact sport” must exclude males.

State lawmakers voted to keep the sexes separate in sports because of the “inherent physical differences between biological males and biological females,” according to the petition filed in the case.

B.P.J., a young male high school student who identifies as female, sued, arguing the law’s “biology-based distinction” violates Title IX and the equal protection clause. A district court initially blocked the law, then reversed itself, finding there was “no genuine dispute that biological males have physiological advantages over biological females.”

The U.S. Court of Appeals for the Fourth Circuit reinstated the block, finding the district court was wrong to rule for the state because “there is a genuine dispute of material fact” over whether those born male “enjoy a meaningful competitive athletic advantage over” young women born female.

The circuit court also held that the district court should have granted summary judgment to B.P.J. on his Title IX claim because the state law unlawfully excluded him from participating in sports.

What the Lawyers Say

Jim Burling, senior counsel at Pacific Legal Foundation, a public interest law firm, said he is predicting the Supreme Court “is going to find that men are men and women are women.”

The court won’t find that gender identity is protected under Title IX, enacted in 1972, or the 14th Amendment, ratified in 1868, because the concept was unknown when they took effect, Burling told The Epoch Times.

Title IX was adopted to make sure that girls and women could participate in school sports on an equal basis with boys and men, he said. No one believes that transgender identity was part of what was being protected under the law, he added.

The text of the equal protection clause “doesn’t talk about transgenderism—it doesn’t even anticipate it being an issue,” he noted.

“You cannot graft a modern-day concern onto the language of a constitutional provision that’s over a century old,” he said.

Burling said the Supreme Court’s landmark decision last year in United States v. Skrmetti offers a clue as to how the court will rule.

The Tennessee law in Skrmetti forbids all medical treatments intended to allow “a minor to identify with, or live as, a purported identity inconsistent with the minor’s sex” or to treat “purported discomfort or distress from a [disagreement] between the minor’s sex and asserted identity.”

The high court rejected the argument that Tennessee’s ban on transgender procedures for children, such as the use of puberty blockers and cross-sex hormones on minors, was an example of discrimination, he said.

The ban was “an exercise of the state’s police power and power to regulate medical practice,” he added.

The conservative-leaning Supreme Court, which embraces “a text-based, originalist understanding of the Constitution,” will not find that state laws prohibiting males from competing in women’s sports are unconstitutional, he said.

“I think the statutes are going to be upheld at least by 5–4 or maybe 6–3,” Burling said.

Steven J. Allen, a senior fellow at the National Legal and Policy Center, said he expects the Supreme Court will uphold the state laws by a 6–3 or 8–1 vote.

The Supreme Court is not going to say you can’t segregate sports teams by sex because that would eliminate most women’s sports, Allen said.

Then there is the privacy issue, he said. In our society, people in public facilities shower with others of the same sex and use dressing rooms that are sex-segregated, “and there’s no way that could be unconstitutional,” he added.

Supreme Court ‘Can’t Invent New Constitutional Rights’ 

Carrie Severino, president of JCN (formerly the Judicial Crisis Network), predicted the Supreme Court “will clarify that transgender status is not a suspect or quasi-suspect class, as it doesn’t fit into the types of classes that have been recognized historically as suspect or quasi-suspect classes.”

“The court cannot simply invent categories of constitutional protection,” she told The Epoch Times.

In constitutional law, a suspect classification is a class or group of individuals meeting criteria that suggest they are likely the subject of discrimination.

A quasi-suspect classification refers to groups such as those based on gender or legitimacy of birth. When a law involves a suspect or quasi-suspect classification, courts apply strict scrutiny, meaning they look at whether the law at issue serves a compelling government interest and uses the least restrictive means to achieve that interest.

“For the Supreme Court to step in and invent new constitutional rights that would have been absolutely shocking to those people who ratified the 14th Amendment, for them to jump in and cut off the right of citizens to pass the laws that they feel are appropriate to protect women in their states, that would be inappropriate,” she added.

Kristen Waggoner, president of the Alliance Defending Freedom, a public interest law firm that is part of Idaho’s legal team in the Supreme Court case, said the statutes in Idaho and West Virginia serve the interests of women.

“Women deserve equal opportunity, fairness, and privacy, and states have the right to recognize biological distinctions when those distinctions matter, and they matter greatly on the athletic field,” she said at a Jan. 8 press conference.

When state laws protecting women’s sports aren’t allowed to be enforced, women and girls are “losing the opportunity to be on the field in terms of fairness,” but their safety and privacy in private spaces are placed in jeopardy, Waggoner said.

Tyler Durden Mon, 01/12/2026 - 17:15

House Republicans Coalesce Around Stock-Trading Ban For Lawmakers

House Republicans are lining up behind a long-sought effort to curb stock trading by members of Congress, signaling what party leaders say may be their strongest opportunity yet to address concerns that lawmakers can profit from insider information.

(Image credit: Illustrated | Getty Images)

The proposal, drafted by Rep. Bryan Steil (R-WI), chairman of the Committee on House Administration, would prohibit House and Senate members from purchasing individual stocks while in office. The measure, titled the Stop Insider Trading Act, has secured backing from House GOP leadership and support from Republicans across ideological factions. Steil plans to formally introduce the bill Monday.

Lawmakers first attempted to rein in congressional trading with the 2012 Stock Act, which expanded disclosure requirements and explicitly banned trading on nonpublic information. But repeated efforts to go further - by restricting trading outright - have stalled despite broad public support and bipartisan interest.

“I think we have an opportunity to improve upon the Stock Act, in particular to remove a lot of concerns Americans have that members of Congress are profiting off of insider information by engaging in stock trading,” Steil said in an interview ahead of the bill’s release. “Not only do I think this is the best chance, I think we will ultimately prove ourselves to be successful.”

Under the proposal, lawmakers would be barred from making new purchases of individual stocks but could continue to buy and sell diversified investment funds. Members would not be required to divest existing stock holdings. Instead, the bill would create a mandatory presale disclosure system requiring lawmakers to file a public notice between seven and 14 days before selling an individual stock, with the option to withdraw the notice if they decide not to proceed.

The legislation would also increase penalties for violations. Lawmakers who fail to comply would face fines equal to $2,000 or 10% of the value of the covered investment - whichever is greater - and could be required to forfeit any profits from the transaction. The bill does not address other asset classes such as bonds or commodities.

House Speaker Mike Johnson (R-LA) and his leadership team are backing the effort, along with several Republicans who previously advanced separate proposals to restrict trading.

“No member of Congress should be allowed to profit from insider information, and this legislation represents an important step in our efforts to restore the people’s faith and trust in Congress,” Johnson said. “Both Republicans and Democrats will have an opportunity to make their voices heard and affirm their support.”

Steil said he intends to move quickly, with committee debate and amendments expected as soon as this week. GOP leaders have pledged to bring the bill to the House floor once it clears committee.

“I’ve worked closely with Chairman Steil, who has been tirelessly putting together a bill that bans stock trading by Members of Congress, and would like to move this bill for a full House vote soon after it gets out of committee,” said House Majority Leader Steve Scalise (R-LA).

The push follows a series of earlier efforts to force action on the issue. Rep. Anna Paulina Luna (R-FL) recently advanced a stock-trading ban through a discharge petition, a procedural move that allows lawmakers to bypass leadership if sufficient support exists.

Republicans from across the party’s ideological spectrum have signed on as original co-sponsors of Steil’s bill, including Luna; Rep. Chip Roy (R-TX), a member of the House Freedom Caucus; and Rep. Mike Lawler (R-NY), a centrist member of the Problem Solvers Caucus.

“The people should be able to trust the motives of their representatives in Congress - yet active stock trading that enriches certain members has broken that trust,” Roy said. “This bill is a collaborative product that takes a giant step forward to restore trust by ending stock purchases and forging presale disclosure.”

Lawler argued that the proposal could help rebuild public confidence in Congress. “If you’re getting rich in Congress, you should get the hell out or be thrown out,” he said.

The restrictions would also apply to spouses and dependent children of lawmakers, barring them from purchasing securities of publicly traded companies. The bill includes exceptions for certain circumstances, such as ownership in small businesses, some trust-held investments, employment-related compensation, and cases in which a spouse or child’s primary occupation involves managing investments for others.

Tyler Durden Mon, 01/12/2026 - 16:50

On The Lefty-Left's Largely Female Hysteria

Authored by James Howard Kunstler,

Permission Granted: Go Kill Yourself

“A mascrosocial cluster B crisis is ripping this nation apart because Leftism has hijacked the minds of progressive females who then LARP out dangerous Gnostic heroic delusions.”

- JD Haltigan

Historians of the future, grilling beaver-tail paninis over their campfires, will look back in wonder and nausea at the madness of America — and other regions of Western Civ — in the raging 2020s. It will be clear by then that it was largely a female hysteria, like other departures from social sanity in the annals of the Homo sapiens, such as the outbreak of witchery in the Massachusetts Colony, 1692, the Dancing Plague of Strasbourg, 1518, and the lunacy of Meowing and Biting Nuns that spread through the convents of Europe in the 1400s.

Renee Nicole Good moments before she was shot to death

The Lefty-left has devised what’s called a “permission structure” for women to take the lead in acting-out the concocted grievances of their show-runners in the Democratic Party who, in times gone by, once had a coherent political program, but are now chiefly concerned with staying out of jail. I speak of those two orbiting moons, Hillary Clinton and Barack Obama, and their many subalterns, such as John Podesta, Lisa Monaco, Norm Eisen, Adam Schiff. . . you know the huge cast of characters.

In 2020, they put their African-American clients in the vanguard, hoping to provoke Mr. Trump into a bloody suppression of the George Floyd riots. Didn’t really work, though the riots were a grand distraction from Marc Elias’s behind-the-scenes nefarious setup to queer the balloting process in that year’s election — a thumping success! All that mischief propelled brain-dead “Joe Biden” into the Oval Office, the perfect stooge to front for Hillary and Obama in their campaign to disorder the US body politic.

None of that worked for them in 2024, though, and only, apparently, because Elon Musk got wind of some election-hacking signals from a bunker in Serbia, and somehow managed to put the kibosh on its functionality. . . but that’s another story not quite yet spun for the public. Anyway, Mr. Trump got back into the Oval Office and now there is — forgive the cliché – hell to pay. Folks looking at jail time, famous folks, folks previously inoculated against such a fate. And it’s driving them batshit crazy. What on earth to do?

As it happens, enough Americans are sick and tired of the race hustle that its antics no longer avail the Democratic Party in stirring up animus against order, so now the party sends its women out onto the front lines to bang on police car windows, scream at the officers to perform sex acts on themselves, and impede their duties. In the course of all that action, one of them, Renee Nicole Good, got shot last week gunning her Honda Pilot at officer Jonathan Ross.

Ms. Good’s female wife, Becca Good, wailed in the aftermath, “I made her come down here, it’s my fault.” Come down to do what? To play a part in the show. To use Renee’s Honda Pilot to block the street so that ICE agents couldn’t do their job (which is removing illegal immigrants for processing and deportation). Who told Becca that was a good idea? The Lefty-left’s permission structure told her. So, Becca played her part in the show, ostentatiously recording a video of the scene, yelling taunts at the officers, telling her wife, Renee, to disobey the officer’s command to “get out of the car” and instead to drive away. Becca will have that on her conscience forever, alas. Bet you wouldn’t want to be her.

What is it in American women these days that makes them susceptible to such a demonic permission structure that the Lefty-left uses to make them pawns in this game? Most obviously, American women are less and less inclined to enter healthy relations with men. Why is that? Probably several reasons. American men are less and less good husband material — except at society’s tippy-top where they make obscene amounts of money in activities that are, frankly, pretty antisocial when you look hard — like, running monopolies, inducing the entire population into ill health, and selling out their country. The great wad of men in the classes below the tippy-top face ever-reduced opportunities to make a living, let alone support a wife and children.

Both American men and women are working pretty hard to make themselves sexually unappealing. Obesity is epidemic now that the national diet consists almost entirely of pizza and soda pop. You have to wonder how the idea of facial piercings, nose-rings, and massive tattoos caught on. Half the women in this country look like they could be harpooneers on the whaler Pequod. Meanwhile, the tubby men with no prospects can occupy themselves with free porn on their phones — which, you might admit, kind of cuts down on their motivation to even try to meet real women, let alone protect and care for them.

The result of all this dysfunction is a society with deeply disrupted relations between men and women, people who can’t produce children — or, by happenstance, as in the case of Renee Nicole Good, two children who did not live with her — people of both sexes who can’t enact the basic roles of human adulthood, people of both sexes who can hardly find gainful employment, and you end up with a land of broken people, broken families, and behavior that verges into madness.

And these broken people are egged on to self-destruction by the cynical managers of a criminal political party desperate to hide its crimes and avoid prosecution. When the arraignments begin, the derangements will ebb. Just watch and see.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of ZeroHedge.

Tyler Durden Mon, 01/12/2026 - 16:25

Socialism, Not Sanctions, Is Responsible For The Destruction Of Venezuela

Authored by Daniel Lacalle,

Venezuela is not poor due to sanctions. It is poor because the Chavez-Maduro regime stole hundreds of billions of dollars and demolished the productive fabric of the economy.

Venezuela had 12,700 private companies when Chávez came to power, according to Conindustria. Only about 3,800 manufacturing industries are still operating, of which around 3,200 are privately owned and 600 are state‑owned.

The assault on private property culminated with the expropriation of more than 690 companies in twelve years. Government-run businesses failed, and large state-owned companies in Venezuela are technically insolvent or heavily loss-making.

Socialism of the XXI century, they called it: government expropriations, price controls, capital controls, and complete absence of legal and investor security.

The socialist regime arrived in a period of rising oil prices and squandered one of the largest oil bonanzas in history while destroying the national oil company, which was one of the most efficient when Chavez arrived in power and is now riddled with debt of more than $41.6 billion, and production has plummeted to less than a third of what it was.

The extraordinary oil revenues of more than 960 billion dollars under Hugo Chávez and Nicolás Maduro were stolen, squandered, and wasted.

Government spending was out of control, and the state ran double-digit fiscal deficits in the period of oil price-linked economic boom. 

A deep structural crisis years before U.S. oil sanctions

You may have read the lie that the reason behind Venezuela’s suffering is US sanctions. This is false.

Sanctions did not start until 2019, and the economy was already in deep recession and hyperinflation. Venezuela’s economy had already entered a deep structural crisis years before the U.S. oil sanctions were imposed.

Furthermore, those sanctions were targeted against leaders of the dictatorship, not the broad economy.

Real GDP started to slump in 2013, and by 2017 the economy had already lost a large share of its output

The collapse in output, triple‑digit and then hyperinflation, and widespread shortages all began when the country had full access to global markets and international finance.​

Real GDP started to slump in 2013, and by 2017 the economy had already lost a large share of its output. Hyperinflation roared into 2017, when monthly price rises exceeded 50%, well before the 2019 sanctions.

The human rights violations, institutionalised murder, and lack of legal and personal rights highlighted by Amnesty International were there years before any sanction.

Trade with major powers, collapse at home

Venezuela has trade agreements with the world’s major powers. The United States is one of its main trading partners, along with the European Union, China, Russia, Turkey, India, and Brazil, among others, according to the Venezuelan government’s own data.

Moreover, Venezuela has been one of the largest beneficiaries of soft loans and debt restructurings in the entire region since 2013.

In fact, the first person to acknowledge that there is no embargo whatsoever is dictator Maduro, who boasts of the large exports and trade deals and proudly announced $18 billion dollars from exports in 2024.

By 2023–2024 Venezuela was producing barely one-fifth to one-quarter of what it did around 2012–2013

Despite receiving more than 78 billion in financial support and investment from China and Russia, according to CRS figures, Venezuela’s economy has been demolished, its oil industry has almost collapsed, and the economy has lost most of its GDP, with one of the worst hyperinflation and migration crises in modern peacetime history.

The IMF estimates that real GDP contracted by about 75% between 2013 and 2021, while other studies show an 80% fall in GDP in less than a decade, which implies that by 2023–2024 Venezuela was producing barely one-fifth to one-quarter of what it did around 2012–2013 and not much more than half of its 1998–1999 level in real terms.

The assault on the private sector

At the start of the Chávez era, Venezuela produced around 3.3–3.5 million barrels per day, an efficient and professional oil company respected worldwide.

In 2003, the Socialist government fired about 20,000 PDVSA workers, including most of the technical and managerial professionals, and replaced them with political appointments, destroying the company in one strike.

The company was converted into a political machine used to finance the government’s “missions” to spread its political influence. PDVSA became a direct funder of obscure off-budget projects and political spending.

Underinvestment, corruption, and politicised management caused a continuous collapse in production, which fell from 3.5 million barrels per day to less than a million by 2025, even though the country has the world’s largest proven oil reserves. This is not a story of scarcity but of deliberate decapitalisation of the productive asset.

Price controls, exchange controls, and import licensing completed the destruction of the economy

The assault on the private sector extended far beyond energy. The Chávez and Maduro governments expropriated or nationalised firms in steel, cement, electricity, telecommunications, agriculture, banking, retail, and food distribution.

Constant threats of seizure, legal uncertainty, and discretionary punishment pushed many local and foreign firms to exit operations.

Meanwhile, politicisation made the state-owned companies and the expropriated businesses collapse under inept management and direct political theft of resources.

Price controls, exchange controls, and import licensing completed the destruction of the economy. When inflation soared, the government’s answer was to impose more controls and forced sales, which emptied shelves, cut production, and accelerated capital flight, deepening the economic collapse.

From oil wealth to a prison

From 1998 to 2025, government spending tied to political “missions” multiplied, financed directly from PDVSA and special funds controlled by the presidency.

The social consequences have been catastrophic. Poverty in Venezuela has risen to 80–90%; millions have fled the country, creating one of the largest displacement crises in the world, while the domestic banking system and credit intermediation have been dismantled.

The Maduro regime is usurping power, has rigged all elections and keeps hundreds of political prisoners. Maduro’s forces killed 9,465 people in 10 years, according to Provea. “They institutionalised state killings,” reads a 2024 report.

Venezuela’s collapse is not the inevitable fate of an oil‑rich country or the result of external sanctions; it is the product of deliberate policies, theft, and squandering.

A historic oil windfall was wasted, PDVSA was systematically decapitalised from within, and the institutionalised robbery was completed through expropriations and capital controls, leaving an economy unable to grow even when the global peers thrive.

The lesson from Venezuela is that socialism has made a rich and prosperous nation one of the poorest in the world and converted the country into a prison.

Tyler Durden Mon, 01/12/2026 - 15:45

UBS Explains Why Trump's 10% Credit Card Rate Cap Is "Unlikely" To Happen

Update (1520ET):

Analysts Erika Najarian and Tim Chiodo told clients that President Trump's proposed 10% one-year cap on credit card interest rates is "unlikely."

The analysts explain their reasoning:

With the midterms ahead and affordability remaining top of mind for voters, President Trump posted on social media that he is calling for a 10% rate cap on credit card APRs beginning on January 20, 2026, effective for one year.

We note that:

1. It would take an Act of Congress for such rate caps to be put in place, given the overwhelming legal challenges an executive order would likely face;

2. The legal challenges faced by the CFPB's late fee rule (dead in the water) are a precedent for non-Congressional action;

3. and media reports indicate that credit card rate caps were discussed but failed to be included in the 2025 Genius Act, suggesting that the industry lobby made an impact.

Additionally, the analysts said the 10% cap on credit card APRs would reduce credit availability for working-class Americans. They warned that 26% of credit card spending would be at severe risk, implying that a softening in the consumer economy would likely materialize.

Analysts say a 10% credit card rate cap would hit Bread Financial and Synchrony Financial the hardest, with Capital One also likely to underperform. JPMorgan, Citi, Bank of America, Visa, and Mastercard would see milder negative impacts, while American Express is viewed as the most resilient, thanks to its high-end customer base and heavy reliance on fee income rather than interest income.

*  *  * 

European and US credit card companies are sliding in premarket trading after President Trump said on Truth Social late Friday (read report) that a 10% cap on credit card interest rates is very much on the table as part of his push to improve affordability.

In a Truth Social post, Trump said Americans are being "ripped off" by credit card companies that charge interest rates of 20 to 30% and vowed that his administration will put an end to it.

"AFFORDABILITY! Effective January 20, 2026, I, as President of the United States, am calling for a one-year cap on Credit Card Interest Rates of 10%," the president stated. 

The cap's proposed start date coincides with the anniversary of Trump's second-term inauguration and, if implemented, would fulfill his 2024 election campaign pledge.

Two months later... https://t.co/POf3Y4jlrq pic.twitter.com/D4BlY4PD1i

— zerohedge (@zerohedge) January 10, 2026

American Express, Capital One, Visa, Mastercard, JPMorgan, Citi, and Wells Fargo all declined in New York premarket trading, with Capital One and Citi among the hardest hit due to their heavy exposure to credit card lending.

Premarket movers:

• American Express -4.4%,

• Capital One Financial -8.7%,

• Mastercard -2% and Visa -1.6%

Also track:

• Wells Fargo -2.1%,

• JPMorgan Chase -3%,

• Citi -4%

European lenders that offer US credit cards were also declining late in the session:

• Barclays -3.2%,

• Santander -1.6%

• and HSBC -.2%

Goldman analyst Gaelle Jarrousse commented on credit card firms and bank stocks tumbling in the European cash session, as well as the downward pressure on the same types of companies in the U.S. premarket:

Let's start with BARCLAYS down 4-5% at the open on the US CREDIT CARD CAP. Negative headlines post Friday US close from Trump who suggested a cap on credit cards to 10%. However, for this to work, the congress needs to pass a law and we have seen in the past, senators such as Sanders introducing bills proposing a 10% cap but none of them advanced into law. On top of that, banks and credit cards companies have started to lobby and highlighted the contraction of credit card availability that will result from such a measure.

. . .

The US credit cards headline is adding to the pressure we have seen on banks over past few sessions given valuation level (sector on 9.5x 27e) and positioning.

In a separate note, JPMorgan analyst Vivek Juneja warned there will be a "material hit" if this is enacted and "could push consumers into more expensive debt."

Juneja said that while the news will be negative for bank stocks, "this rate cap would not address the root of the problem," which is the rising Fed fund rate.

He said that among the banks in the JPM universe: "Citi has the highest share of credit card loans at 23% of total, followed by JP Morgan (16%), Bank of America (9%), US Bancorp (8%), and Wells Fargo (6%)."

Bloomberg Intelligence analyst Philip Richards pointed out that Trump's demand for lower credit card rates "might not be enforced in full given the strength of US bank lobby groups."

Cowen analyst Moshe Orenbuch said, "This is a resurgence of Trump's campaign promise, and an escalation of the headline risk for credit card issuers."

Tyler Durden Mon, 01/12/2026 - 15:20

Most US Debanking Cases Stem From Government Pressure, Report Says

Authored by Stephen Katte via CoinTelegraph.com,

The majority of debanking cases in the US are a result of government pressure, rather than individual banks’ policies, according to a new report from the American think tank the Cato Institute.

Cato Institute analyst Nicholas Anthony explained in a report on Thursday that debanking could take several forms: religious or political, the idea that a financial institution closes accounts solely due to political or religious belief or affiliation; operational, when a bank chooses to close a customer’s account as it’s no longer in the bank’s interest; or government, when a government pressures a financial institution to close a customer’s account. 

“While media and political narratives often attribute these closures to political or religious discrimination, this study finds that the majority of debanking cases stem from governmental pressure,” he said.

Cato Institute analyst Nicholas Anthony said there are generally four types of debanking. Source: Cato Institute

“Based on public evidence, governmental debanking appears to be the most significant issue majority of cases over time can be found where government officials have intervened in the market by either directly or indirectly telling banks how to run their business.”

Crypto firms have been facing account closures and denials of banking services for years, and many in the industry have speculated these actions are part of a policy-driven effort to suppress the digital assets sector, particularly by the Biden administration.

Two forms of government debanking

Anthony said government debanking can take two forms: direct, when it uses a letter or court order to order an account closure, or indirect, when lawmakers use regulations and legislation to force an account closure.

He cites the Federal Deposit Insurance Corporation sending letters to financial institutions ordering them to halt crypto-related activity as an example of direct action.

Source: Cato Institute

“Furthermore, the agency failed to provide a timeline or follow up with those financial institutions. So, in practice, these letters were effectively termination orders,” Anthony added.

In December, JPMorgan CEO Jamie Dimon denied debanking customers based on their religious or political affiliation during an interview with Fox News. He also claimed both sides of politics in the US, Democrats and Republicans, were equal offenders when it came to leaning on banks to debank people.

In November, Jack Mallers, the CEO of the Bitcoin Lightning Network payments company Strike, accused JPMorgan of closing his personal accounts without explanation, and Houston Morgan, the head of marketing at non-custodial crypto trading platform ShapeShift, shared a similar story the same month. 

Congress has the power to end debanking

US President Donald Trump’s administration has addressed this alleged debanking through executive orders on debanking, while appointing agencies like the Securities and Exchange Commission with more pro-crypto leaders. 

However, Anthony argues that Congress needs to take more action by reforming the Bank Secrecy Act, repealing confidentiality laws, and permanently ending reputational risk regulation.

“Doing so would reduce the incentives to debank, expose how widespread debanking has become, and cut out the tools that the government has used to pressure banks and other financial institutions,” he said.

“If Congress wants to bring relief and reduce the debanking phenomenon, it’s time to eliminate the confidentiality that has shrouded the system. It’s time to take the practice of reputational risk regulation off the table. And it’s time to reform the Bank Secrecy Act regime that has deputized financial institutions as law enforcement investigators.”

Tyler Durden Mon, 01/12/2026 - 15:05

Small Modular Reactor Developers Push New Partnerships And Use Cases

Hot on the heels of the biggest nuclear energy deal by a tech company to date, one which saw Meta validate Oklo's "proof of concept" by committing to purchase 1.2 GW of new energy ...

... peer Small Module Reactor (SMR) developers, Nano Nuclear and NuScale Power, released their own updates on new engineering partnerships and potential use cases.

Nano Nuclear, which in recent months had focused on its project at the University of Illinois (UI), had put its various other business segments - including an exciting project with its laser uranium enrichment partner LIS Technnologies - on the backburner. The UI project is a full-scale deployment of Nano’s Kronos reactor design, a 15 MW high-temperature, gas-cooled reactor (HTGR).

While the project may include a power purchase agreement eventually, its primary purpose is R&D of the reactor design. Nano investors are hoping that it will soon become a source of revenue as well, while shorts are pressing their skepticism, which explains why more than a third of the company's float - a record - is now shorted. 

Nano had previously announced the potential for deploying a fleet of reactors, but the study itself could take months, with a Final Investment Decision likely years away. But in the company's latest news, Nano unveiled some real traction with the announcement that it has selected EPC firm Ameresco to develop and deploy all three of their reactor designs: Kronos, Zeus, and Loki. As the initial assessment advances, the companies plan to coordinate on government funding and other available incentives.

$NNE Breaking News: "NANO Nuclear Signs Memorandum of Understanding with Ameresco (NYSE: $AMRC) to Explore the Deployment of Advanced Microreactor Technologies on Federal and Commercial Sites - $AMRC is a leading energy infrastructure solutions provider https://t.co/67BhVSKDqy

— NANO Nuclear Energy (NASDAQ: NNE) (@nano_nuclear) January 12, 2026

Ameresco announced partnerships in 2025 with the two other junior public reactor developers, Terrestrial Energy and Terra Innovatum. With Terra also working on an HTGR design, and Terrestrial working on a molten salt reactor (MSR), Ameresco holds a relatively full docket for a firm that has yet to deploy any nuclear plants, big or small. Adding to the likelihood that deployment timelines are likely not going to move rapidly, executives at Ameresco said they were looking years past 2027 for reactor deployments on the recent earnings call:

“I would not say 2026 or 2027 though. That is a little early, even for a traditional power plant … I think the opportunity is very real, especially with the Army announcements that just came out a couple of weeks ago and more from the Department of Energy that we believe that it is certainly in the future. Probably a few more years than 2027.”

Meanwhile, light water SMR developer NuScale published the results of a study performed with Oak Ridge National Laboratory. The study evaluated the economics of utilizing the heat and electricity produced by NuScale’s 77 MWe Nuclear Power Module (NPM) for use by a chemical processing facility. Results indicate the arrangement would lead to profitable operations for the reactor developer famous for their licensing Odyssey with the Nuclear Regulatory Commission — only they’re less famous for gaining a Design Certification for their administrative efforts and more famous for failing miserably to ever capitalize on the achievement.

NuScale has made multiple announcements regarding potential use cases, including training facilities, desalination plants, and now industrial process heat. They currently hold a loose agreement with the Tennessee Valley Authority to construct dozens of NPMs for up to 6 GW of new generation capacity, coupled with $25 billion of support from the Japan-US trade agreement.

Expect to see more "steel in the ground" news from Nano and NuScale as they seek to convince investors they are 

Tyler Durden Mon, 01/12/2026 - 14:45

Going Full Spartacus: Democrats Hold Chest-Thumping Press Conferences To Fuel Anti-ICE Rage

Authored by Jonathan Turley,

“Say her name.” From Portland to Philadelphia, the mantra is being used by politicians to fuel the anger over the shooting of Renee Good in Minneapolis. While many of us have noted that the shooting appears to fall within the guidelines set by the Supreme Court for the justified use of lethal force, there is an effort to make Good the personification of a “resistance movement.”

Across the country, Democrats are holding “I am Spartacus” moments like a low-budget casting call for B-grade actors, chest-thumping demands for everything from the defunding of ICE to the arrest of law enforcement officers. Sen Cory Booker (D., N.J.) was widely ridiculed for his own such moment years ago. However, he found that while most people found his self-aggrandizement cringeworthy, many longed for such demonstrations.

From Portland to Philadelphia, Democratic leaders are engaging in performative press conferences to try to outdo each other in declaring the shooting of Renee Good “murder” or declaring a “war” with the federal government over the enforcement of immigration policies.

The tone was set almost immediately after the shooting by Minneapolis Mayor Jacob Frey, who not only declared the officer a murderer but called claims of self-defense “bllsh*t” and told ICE, “get the f–k out” of the city.

When many of us denounced his conduct, he mocked his critics by apologizing if his profanity “offended their Disney princess ears.”

Frey seemed to trigger a race to the bottom. Minnesota Gov. Tim Walz and others rushed to the nearest camera to condemn the officer and fuel the rage.  Democratic politicians seemed to struggle to find ways to up the ante with new levels of profanity or escalated threats. Rep. Dan Goldman (D., NY) is facing a serious challenge from a Mamdani-endorsed socialist in the primary and has fought to out-rage the competition.

Goldman not only called for the arrest of the officer but also moved to strip all ICE officers of immunity. Goldman is, of course, protected by immunity as a member of Congress and, as an heir to the Levi-Strauss fortune, can afford any litigation. However, he wants to strip protections for law enforcement officers who put their lives on the line every day. It seems that no price is too great to secure Goldman a third term.

In Portland, Mayor Keith Wilson and Oregon Gov. Tina Kotek, expressed outrage over ICE being in the city after a shooting. It did not seem to matter that the wounded were two suspected Tren de Aragua gang associates who were shot after allegedly trying to run over ICE officers.

Portland Police Chief Bob Day finally confirmed that Luis David Nico Moncada and Yorlenys Betzabeth Zambrano-Contreras are Venezuelan criminal illegal aliens with ties to TdA. He admitted that the Portland Police Department hesitated to disclose the suspected gang connection because it did not want to be accused of “historic injustice of victim blaming” by law enforcement.

He then began to cry, saying, “It saddens me that we even have to qualify these remarks because I understand or at least have attempted to understand your voices, your concern, your fear, your anger.”

In Philadelphia, District Attorney Larry Krasner and Sheriff Rochelle Bilal took the performative press conference to a new and absurd level.

Krasner, who has been known to make sensational and unfulfilled pledges in the past, told ICE to stay out of the city, and portrayed their conduct as criminal, adding, “You will be arrested. You will stand trial. You will be convicted.”

Philadelphia Sheriff Rochelle Bilal then went full Spartacus in an embarrassing demonstration more befitting an Antifa activist than a law enforcement official.

She called ICE officers “fake, wannabe” law enforcement and claimed that they were violating both “legal law” and “moral law.”

Bilal pandered to the mob, warning the federal government that  “You don’t want this smoke. Cuz we will bring it to you.” She added that “the criminal in the White House would not be able to keep” ICE agents from heading to jail.

These are leaders who are openly playing to the mob. In my forthcoming book, Rage and the Republic: The Unfinished Story of the American Revolution, I discuss how elected officials often try to enlist mobs to advance their political agendas — only to be consumed by the unrest they helped fuel. This yielding to a “mobocracy” was one of the critical dangers that the Framers sought to deter through protections against majoritarian tyranny.

The problem with these “I am Spartacus” moments is that you need an actual Spartacus. Instead, we have the violence without the cause.

We have the same figures who have trafficked in rage for centuries, including recently in this very city.

In Minneapolis, a Black Lives Matter leader seemed to advocate violence as a vehicle for change, suggesting that the prosecution of officers in the George Floyd case only occurred because protesters burned down part of the city in 2020.  She told protesters to ignore “don’t set [the city] on fire” pleas.

In the movie, Caesar is asked if he, too, had “left us for…the mob.” Caesar responds, “I’ve left no one, least of all Rome. This much I’ve learned … Rome is the mob.”

These politicians are attempting to harness the power of the mob to direct it against their political opponents.  One Antifa activist called for people to “show up with guns and end this,” adding that “this is what the Founding Fathers gave us the Second Amendment for.”

In reality, what we are watching are calls and performative rage that led not to the American Revolution but the French Revolution. If history is any measure, these “new Jacobins” will find that they are no more protected from the rage than their opponents, as today’s revolutionaries become tomorrow’s reactionaries.

Jonathan Turley is a law professor and the author of the forthcoming “Rage and the Republic: The Unfinished Story of the American Revolution,” which will be released on Feb. 3 as part of the celebration of the 250th anniversary of the Declaration of Independence.

Tyler Durden Mon, 01/12/2026 - 14:25

Trump May Freeze Exxon Out Of Venezuela After CEO Darren Woods Called It "Uninvestable"

Tensions flared between Exxon Mobil and the White House after CEO Darren Woods cast doubt on Venezuela’s appeal as an investment destination during a closed-door meeting with U.S. President Donald Trump and other oil executives last week, according to Reuters.

Woods argued that without sweeping legal and regulatory changes, the country could not support major foreign investment, describing its current system as “uninvestable.”

Trump had convened the meeting only days after U.S. forces removed Venezuelan President Nicolas Maduro in an overnight operation and urged the industry to commit as much as $100 billion to rebuilding Venezuela’s energy sector. Instead of gaining momentum, the talks were quickly overshadowed by Woods’ skepticism.

Reuters writes that Trump publicly voiced his frustration on Sunday while returning to Washington aboard Air Force One. “I didn’t like Exxon’s response,” he said. “I’ll probably be inclined to keep Exxon out. I didn’t like their response. They’re playing too cute.”

Exxon has long been entangled in Venezuela’s oil history. Along with ConocoPhillips and Chevron, it was once a leading foreign partner of the state firm PDVSA before nationalizations under Hugo Chavez forced Exxon and ConocoPhillips to exit the country and pursue arbitration. Court rulings later ordered Venezuela to pay more than $13 billion collectively to the two companies for seized assets.

Woods reminded Trump of that history, saying, “We’ve had our assets seized there twice, and so you can imagine to re-enter a third time would require some pretty significant changes from what we’ve historically seen here.” He also stressed that investment protections and reform of the hydrocarbons law were essential, adding, “If we look at the legal and commercial constructs and frameworks in place today in Venezuela today, it’s uninvestable.”

ConocoPhillips CEO Ryan Lance echoed the caution, telling Trump his company was the largest non-sovereign creditor in Venezuela and calling for a broad overhaul of the country’s energy system and debt structure. Trump replied that ConocoPhillips would recover much of what it was owed but insisted the future would begin anew. “We’re not going to look at what people lost in the past because that was their fault,” he said.

The president also made clear that Washington would control which companies are allowed to operate in Venezuela. “You’re dealing with us directly. You’re not dealing with Venezuela at all. We don’t want you to deal with Venezuela,” he said.

Recall, last week Trump met with leaders from Chevron, Exxon, ConocoPhillips, Continental, Halliburton, HKN, Valero, Marathon, Shell, Trafigura, Vitol Americas, Repsol, Eni, Aspect Holdings, Tallgrass, Raisa Energy and Hilcorp. 

Trump has argued that Venezuela’s vast oil reserves could help revive its economy while also benefiting U.S. consumers and energy companies. In a recent interview, he said he wants companies to commit at least $100 billion to “rebuild the whole oil infrastructure” in the country.

The administration has tightened pressure on Venezuela through a new oil “quarantine,” including the seizure of another tanker Friday, the fifth such action in recent weeks. Rubio said the strategy gives the U.S. “tremendous leverage” and that Washington plans to sell up to 50 million barrels of sanctioned crude on the open market, with the proceeds under U.S. control.

Tyler Durden Mon, 01/12/2026 - 14:05