The transcript from this week’s MiB: Bob Moser, Prime Group Founder and CEO, 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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This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

Barry Ritholtz: This week on the podcast, what a fascinating conversation. Bob Moser is founder and CEO of Prime Group Holdings. Uh they’re the largest privately held self storage owner operator, investor in the country. Fascinating conversation. Started acquiring properties in college. Eventually, uh started doing RVs and uh mobile homes. Just really fascinating uh methodology of identifying undervalued properties. Uh I thought the conversation was fascinating and I think you will also. With no further ado, Bob Moser of Prime Group Holdings. 

Bob Moser: Thanks for having me.

 Barry Ritholtz: So, let’s start out with your your background, bachelor’s with honors in economics from Union College. What what was the original career plan?

Bob Moser: Tell you the truth, it was always real estate. So, I’ve always had an affinity for real estate.

Barry Ritholtz: Really?

Bob Moser: Yeah. My mom tells the story that when I was like 14 or 15, she’d drop me off at the local real estate broker’s office and I would drive them nuts for a couple hours and it was either that or just to get rid of me out of her hair probably. But I always had it. Got my real estate license before college. I got my brokerage license while at college and actually started the business basically my sophomore junior year while at Union.

Barry Ritholtz: Wow, that’s amazing. So, so your college thesis focused on how to value income producing real estate investments by comparing demand and value like so you really knew exactly what you wanted to do by your senior year. What was the outcome of that college thesis?

Bob Moser: It’s a good question. So, it was on the valuation of income producing properties using hydonic and non-hydonic regression analysis.

Barry Ritholtz: So, when we say hydonic you’re adjusting for quality…

Bob Moser: …location, attributes of the property, uh taking away basically the revenue stream, what else adds value to the asset. Uh and I was really hyperfocused on fragmented real estate assets. So basically every real estate asset when you look at it goes through the same life cycle when they’re originally owned, developed, managed by local regional developers. Then over time the larger groups come in and consolidate. So I was looking for that reflection point when that consolidation starts. And I was focused back then in college on the thesis for manufactured housing communities.

And when you’re a college student, you know, people pick up the phone when you call because they’re always trying to help somebody out. And I was very fortunate to speak to Sam Zell uh and some other obviously leaders in the real estate business. And they gave me some great insight. And one of the ones he said to me was that there’s a lot of buyers, but there’s not much product out there. You have to go out and find product for people.

So, I decided to start a company in college to facilitate that transaction. Obviously, I didn’t have any money. My dad was a retired New York City detective. Uh my mom was a teachers aid, so I didn’t grow up with any wealth. But I figured out that if I could find good product, there was a numerous amount of buyers to buy it. And I did this by using the Freedom Information Act of New York and then various other states where I figured out that I could track all real estate asset classes using the the same common denominator of water and sewer per So I went down to Albany and I made my request…

And one day, you know, UPS knocked at my door… and handed me a box. I’m like, “Oh, there’s my real estate information.” And he’s like, “Actually, that truck out there is.” I had boxes and boxes of the old DOSs printouts of every self storage facility, every mobile home park, every RV park, marina, multifamily. Just so some of the younger listeners can appreciate this, forget AI. This is really before there was any sort of usable internet… This is physical paper stored in physical um office buildings and file cabinets. I had to pay per page on the print out.

Barry Ritholtz: And what did that cost and how how long ago was this?

Bob Moser: So this was back in 97 96 97. Uh it probably cost me a couple hundred dollars which I really didn’t have as a college student. But I realized quickly that that information was the key to finding assets. And what I would do is I would systematically go through these lists basically county by county… identifying the institutional quality assets that were still owned by mom and pops or non-institutional investors. Then I would do a deep dive on those assets. I would call and get the rent. I would call the tax assessor to get the real estate taxes. My goal was to know more about the real estate than the owner did by the time I called them on the phone to see if they’d be interested in selling.

Barry Ritholtz: That’s unbelievable. So that’s what led you to unconventional and overlooked segments. You mentioned marinas and RV parks and um other things like that. Um uh manufactured homes. How long did it take you before you managed to acquire your first property?

Bob Moser: So, there was a I I acquired my first property shortly after college. And what happened was there was a mobile home park in Streetsboro, Ohio. Uh it was actually called Camelot Village. Again, a guy named Mike Duffy owned it. And I used to call Mr. Duffy probably every 30 days to see if he would sell his asset. And one day, I finally got him to sell. And I made a nice fee on the transaction. But I still needed a little bit more. And the year I graduated, my mom took a home equity loan against the family house.

Barry Ritholtz: Is that how you financed?

Bob Moser: That’s how I financed my first acquisition. So before that, I was facilitating transactions, making fees, almost like a broker, but not a listing broker. And then the first asset I bought was when my my parents took a home equity loan.

Barry Ritholtz: So if in you mentioned you got your real estate license in college, how are you finding buyers for these sort of unconventional properties. Are you going to the big institutions and saying, “Hey, I have a property that fits into your portfolio.”

Bob Moser: No, what I actually did was I had these lists obviously that I got from the foil request and I kept on seeing the same name show up in buyers or that were owners. Okay. So, if I knew they own five assets in that particular region, I thought, hey, if I develop one or I get a relationship with a seller that would sell, I would bring it to that.

Barry Ritholtz: You knew where to bring it.

Bob Moser: 100%.

Barry Ritholtz:  Really, really quite fascinating. And so, when did you found your own real real estate brokerage firm?

Bob Moser: So that was basically in college. So that was in college.

Barry Ritholtz: So how long did you do that as a um as a broker rather than an investor or they kind of ran parallel paths?

Bob Moser: No. So I was basically working exclusively for generating fees from like 97 to 2000ish 20 2001. I started buying my first asset around 99 going into 2000.

Barry Ritholtz: So, you ramp up various assets until 2013 when you start Prime Group. Was that the path?

Bob Moser: So, what I did was I so my mom took the home equity loan, my parents did against their home. Uh the first asset I bought actually I had sold to that gentleman 10 months prior and I called them up and I said, “Hey, uh you know, Wayne, I sold you this property. It was on Cape Cod. Uh would you be interested in selling it? And he I sold it to him for 3 million. He ended up selling it to me for 5 million.

Barry Ritholtz: Wow.

Bob Moser: Uh 10 months earlier. And then I moved up to Cape Cod and I actually ran the asset for the first two years to see how the business worked cuz I didn’t want to be that owner that would tell people what to do without actually being able to do it themselves. And then I bought my second property and then I bought my third. And then by 2005, August 12th, 2005, I had a large liquidity event. I sold the group of assets to Sam Zell.

Barry Ritholtz: So So I want to draw a line. So you’re a college kid randomly calling big real estate investors…

Bob Moser: 100%.

Barry Ritholtz: Including Sam Zell who took your phone call.

Bob Moser: Took my phone call.

Barry Ritholtz: And you had a long conversation with him.

Bob Moser: I did. I did.

Barry Ritholtz: And so how many years later is like, “Hey Sam, do your It’s me, Bob. Do you remember me? I have some assets for you.”

Bob Moser: It was funny when you say that because when I was dealing with the CEO, there’s a CEO at the time. Uh I always wonder because I never really spoke to him then after. So I wonder if he actually put two and two together. I’m sure he did.

Barry Ritholtz: So now you have a liquidity event. You’re tapping into Wall Street securitization or to fund this. How uh at what point do you say, “Oh, there’s a ready source of capital. I could just put a rollup strategy together and run all these properties more more efficiently than mom and pops can do…”

Bob Moser: 100%. The what I so basically from let’s say 2000 through 2005 2006 I was acquiring a lot of mobile home RV parks… And what really transitioned to me to become an asset specialist which we are now was how well self storage was doing during the first financial crisis… I decided at that point to become an asset specialist singularly focus on self storage.

Barry Ritholtz: So I’m curious why would self storage do well during the financial crisis. Was it literally people were losing their homes? They had to figure out where all their stuff had to go or what was happening in that period that made that such a a a standout performer.

Bob Moser: I would say it was more the defensive nature of it where these other assets were decreasing dramatically. Storage was holding its own. And it’s need-based real estate. I do not buy aspirational real estate.

Barry Ritholtz: It seems like you are in a variety of different regions everywhere from Saratoga to Springs to Chelsea here in New York City. Um, how do your uh underwriting assumptions differ relative to is this urban, is this suburban…

Bob Moser: So, we truly obviously real estate and that sound cliche, but it’s location, location, location. So, if you look at our portfolio, it basically you take the United States and it looks like a U. So, we’re up and down the coasts… and the reason why we’re along coastlines and then we’re up picking up in the mountain cities out in like Utah and Colorado is that there’s a barrier that’s natural barrier keeping the population tight to a nucleus.

Now, we have built very sophisticated software that helps us pre-identify these areas that we should be buying, not even the area, the exact asset we should be buying even though it’s not for sale. So, we built out this program where it pre basically I can put in our buy box and it populates out of the 60,000 self-storage facilities in the country the ones we should go after… And then what we have is our deal teams, which are group of roughly three dozen people internally that we allocate the deals that fit our criteria to and then they continue to call and visit those owners until we convert them to sellers.

Barry Ritholtz: Really, really fascinating. Coming up, we continue our conversation with Bob Moser, CEO of Prime Group Holdings, discussing the Prime Storage business. I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

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Barry Ritholtz: I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio. My extra special guest this week is Bob Moser… So, let’s talk a little bit about the business model of self storage. I see these areas popping up everywhere… How widely used are they? How profitable are they versus, you know, traditional commercial real estate?

Bob Moser: It’s a great question. So self storage has the lowest break even occupancy of any institutional real estate asset class I can think of. So at 40% occupied, you’re breaking even on expenses.

Barry Ritholtz: So, no lobby, no door man, no showers, none of the things that multi family correct makes so expensive.

Bob Moser: Well, you think about a multif family, if you’re going to turn a unit, it’s going to cost you anywhere from, let’s say, 1,500 to 5,000 depending on what you’re doing. Self storage is $5. We’re sweeping it and replacing a light bulb if there is one.

Barry Ritholtz:  Really really quite interesting. What about ancillary revenue streams? We’ve all seen those silly reality shows where they find these, you know, someone abandons a unit and they find some million-dollar painting in there. H how much nonsense is…

Bob Moser: Yeah, I haven’t had that luck. But the uh it’s funny that you bring that up. So, prior to those TV shows, we would have the auctions on site… What happened though, everybody also and started showing up to these had a personality. They thought they were on TV, right? So everything now is virtual. So when we have an auction, it’s all done online. But the and it’s not a revenue source for the business… One of them is a tenant protection program where uh the tenants are able to push the liability of a storm or something happening to their goods onto the landlord for paying a certain price.

Barry Ritholtz: I hadn’t even thought about the idea of a storm. So you live near a coast, there’s a big hurricane coming. Hey, I have a bunch of furniture and I want to get soaked. If we’re if we’re swamped, let’s move it inland to a storage area…

Bob Moser: 100% and and god forbid something happens to their home. You know, obviously a lot of stuff gets moved into the storage facility.

Barry Ritholtz: So, you you guys are the largest privately held self- storage um set of ownership. Uh what’s the competition like? I know I know Blackstone is in here. We see cubes everywhere. We see public storage. Who are your big competitors?

Bob Moser: Correct. So, there’s the group of public companies that you were just mentioning. You have Extra Space, you have public storage, you have CubeSmart, U-Haul, um, and

Barry Ritholtz: U-Haul. I didn’t even think of U-Haul. That’s right.

Bob Moser: Correct. You know, most people think of them just as the moving business, but obviously they own a substantial amount of self storage. Substantial amount. What we do differently is we operate differently… The REITs are highly focused on occupancy. They want to keep their occupancy above 99 92%. Where I’ll trade occupancy for topline revenue.

Barry Ritholtz: And then the related issue I see are the mobile pods people sometimes use is seems sort of adjacent to the space. What what are your thoughts on that?

Bob Moser: So we’re not in that business. Um it’s a lot more labor intensive.

Barry Ritholtz: You got to physically drop the pod off and then come collect it later.

Bob Moser: Correct. So in storage, one of the main benefits is there’s we take no availment risk. So we’re never taking possession of the person’s goods.

Barry Ritholtz: So this really went from kind of a niche to a mainstream investment class over the past couple of years. You were really early in this space. What did you see that others miss…

Bob Moser: It was the fragmentation… highly fragmented when I first entered the asset class uh even back in around 2015 2014 it was roughly 80% still owned by mom and pops.

Barry Ritholtz: Wow. So just the the REITs and the institutionals only own 20% of the the outstanding…

Bob Moser: It’s probably closer to 70 75% so there’s been a lot of validation.

Barry Ritholtz: So a couple of years ago you did a uh a raise, a couple of billion dollars from outside investors… So why go to outside investors rather than go this securitized route?

Bob Moser: It was basically it’s a it’s it’s scale play. So we I knew the asset class was going to consolidate quickly once the other the large institutions understood it better… and the best way to do it was through the co-mingled fund way.

Barry Ritholtz: So, so not hands off REIT like correct uh numbers. So, so let’s you mentioned your investment committee. Walk us through the typical acquisition. How do you source these things? Is it still just calling people up…?

Bob Moser: So, this this is where it takes the correct personality to be this part of the team… So what we use is our proprietary software we have developed inhouse that we load our entire buy box into this software and it projects it’s an AI system every self storage that fits that criteria in the country… then we allocate that deal to the deal team member that covers that area then he or she continues to call that owner every 30 to 45 days until we convert them to a seller.

Barry Ritholtz: What’s the conversation like with a seller? Hey, spoke to you back in uh October. Just checking in, seeing if anything changes. How receptive are people to this?

Bob Moser: So, it’s more than and I get those same email else and it drives me nuts… So when we call, you know, we’re referring to an exact asset… We’ve already been by the asset. We know what the numbers are. But then we visit them on the holiday. We find out when their their birthday is. We send them a card… and then we try to solve that problem. What they do with the money afterwards, how do they maximize their sale proceeds? And we hold their hand through the process.

Barry Ritholtz: That’s amazing. Maximizing returns afterwards. I’m going to assume that’s some combination of it’s it’s obviously capital gains… I would not have thought that a buyer is going to facilitate that process would hold their hand through it…

Bob Moser: Because we want to eliminate any kind of friction. We need to buy assets… If we weren’t buying it this way, we would be buying it like 99% of every other asset where it gets brokered… and at the end you overpaid for the asset.

Barry Ritholtz: The the winner’s curse in a in an auction situation.

Bob Moser: Exactly. The more buyers there are, the more likely it is the winner overpaid. 100%. So we bypass all that and we go directly to the seller…

Barry Ritholtz: That that’s really fascinating… I would not have guessed that degree of complexity, sophistication, and facilitation to the seller.

Bob Moser: Here’s the crazy thing. We’re closing six to seven deals a month.

Barry Ritholtz: So one or two a week.

Bob Moser: On average when you look at it that way.

Barry Ritholtz: So it sounds like just the prep before you make an offer. If it’s a few weeks, it sounds like you’re spending tens of thousands, maybe hundreds of thousands of dollars.

Bob Moser: Easily. But you think about it, if I don’t get that asset today, I might get it in a month… We’re into this for the long run.

Barry Ritholtz: And and when you guys raised fund three, that was the largest dedicated self- storage fund raise at the time. I think that was $2.5 billion or something like that. And and what’s the total um self- storage headcount?

Bob Moser: Uh we have over 300 close to 350 assets. We have around 7 or 800 employees around the country.

Barry Ritholtz: Really really quite fascinating. Coming up, we continue our conversation with Bob Moser… I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio.

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Barry Ritholtz: I’m Barry Ritholtz. You’re listening to Masters in Business on Bloomberg Radio and watching Masters in Business on YouTube. My extra special guest this week is Bob Moser… I want to talk a little bit about the state of commercial real estate today. But I still have a handful of of questions I have to ask you um uh about self storage. You mentioned uh small businesses are are a big customer… What percentage of your units are rented by small businesses and and what do they use this for?

Bob Moser: It’s a great question. It’s probably one of the most overlooked aspects of self- storage… The rest is a 30 to 40% are small businesses, contractors, landscapers, a lot of pharmaceutical reps. So, we are their warehouse. We’re the warehouse for that small business that employs the majority of the US population.

Barry Ritholtz:  Really, really interesting. And we were talking previously about uh self- storage isn’t covered by the traditional landlord tenant law… This is a lean law system. Is that true in all states?

Bob Moser: 100%. And actually it carries to Canada as well uh in parts of Europe that we’re looking at. But yeah, it it and it’s basically very similar to like a bank loaning money… But it provides a way to collect the rent that’s owed unlike a multifamily where it might take you a year if you’re lucky to evict somebody that’s not paying.

Barry Ritholtz: And you mentioned Europe. Uh I don’t think you have a lot of exposure currently in Europe. How big a push are you looking to make on the continent?

Bob Moser: So, we’ve been doing a lot of digging in figuring out what the different aspects and different cities. You know, it’s interesting because some of the owners in Europe, let’s say, let’s look at London, there will be two or three owners that own the majority of that inventory. Our play again is going out and buying from that oneoff owner… In Europe, they’ve been consolidated into groups. So, it really doesn’t provide us that ability to buy assets that we think are highly undermanaged.

Barry Ritholtz: So in the US this laws vary somewhat from state to state but it’s fairly uniform. Um how different is it country to country in in the EU or UK?

Bob Moser: Yeah but even in the states the when it comes to the actual implementation of the lean law it does there’s different timings… So we have a whole legal compliance team that works on this on a daily basis to make sure that each state law is being followed…

Barry Ritholtz: Really Interesting. So, commercial real estates have seeing higher uh rates of of costs, interest rates and inflation have been kind of stubborn and sticky. What sort of refinancing stresses that create or are you sidest stepping that whole interest rate chase these days?

Bob Moser: So, we’re very fortunate being in real estate for as long as we have. We have developed really deep relationships with the large institutional lenders uh from CitiBank, the Goldman, the JP the BMO to uh Northern Trust… But we spend a lot of time making sure that we’re hedging our interest rates.

Barry Ritholtz: We’ve certainly seen shifts in in demographics with everything from migration and remote work and aging populations. How does that affect uh demand for commercial real estate, both self storage and other related real estate?

Bob Moser: It’s a big demand driver for self- storage. So, when you think about it, people now are living in apartments more. I think I just heard the average the firsttime home buyers now until like they’re 40 now. It’s crazy when it used to be like 28 or 26. So obviously they live in smaller apartments, they need place to put their stuff.

Barry Ritholtz: Yeah. Speaking of office, we’ve seen a lot of underutilized um office properties… I just saw a piece in the Wall Street Journal uh this week that there has been a sudden surge of office to residential conversions in lower Manhattan… Do you track that sort of stuff?

Bob Moser: We’re actually working on one of those now, actually.

Barry Ritholtz: Oh, really? So, commercial office to residential real estate.

Bob Moser: So, what it was was we there was a uh a group of assets in West Chelsea… We’re converting one to a high-end storage of the future we’re calling it… And the other part of the project was a nine story building that’s on the Highline that we are going in to have it converted from office to residential.

Barry Ritholtz: On the Highline, all those properties have become incredibly valuable… When you say high tech self storage, I can imagine uh an app… What What is high-tech self- storage look like?

Bob Moser: So, we have actually harnessed the free energy of your cell phone to unlock the lock.

Barry Ritholtz: Mhm.

Bob Moser: So, it’s pretty interesting… So, basically, if you look at the lock is what controls this business, the actual lock that’s put on… So, we’ve devised and have built a lock that your cell phone gets an electronic key sent to it and then you can use that to open up the lock. There’s no batteries needed. There’s no Wi-Fi needed.

Barry Ritholtz: Some of the new EVs are the same way where you show up with a phone and it not only unlocks the car, it lets you start it.

Bob Moser: So, we’re bringing this to the self storage business and And we have our first 5,000 being deployed as we speak right now… The other thing is if they’re late and don’t pay, their electronic key is turned off…

Barry Ritholtz:  That that’s really fascinating. Um, if it’s not Wi-Fi, How does the key operate? Is that Bluetooth or something else?

Bob Moser: It’s purely off. So, your cell phone gives off energy just sitting there. And it was enough to harness to actually flip that solenoid. It’s pretty amazing. So, we’ve been working for a couple years to get this perfected.

Barry Ritholtz: I’m assuming there has to be a battery.

Bob Moser: No battery. Your phone.

Barry Ritholtz: No battery.

Bob Moser: No battery. That’s the key to this. So, and it’s good that you brought that up because everybody else has done it with a battery in the lock and eventually that battery dies.

Barry Ritholtz: This wasn’t supposed to happen.

Bob Moser: Now it is. So, you think about it. One of our facilities in Astoria is 3,300 units… First of the month comes, if people haven’t paid, that manager has to leave the front desk, go around and double lock those units. Right now, the electronic key just magically freezes the unit. So, it reduces our labor. It gives the consumer a better product.

Barry Ritholtz: Quite quite fascinating. So, given your perspective uh and experience in all sorts of commercial real estate, 2026, there’s a lot of questions… What are you seeing in the commercial real real estate space circa 2026.

Bob Moser: It’s a good question… You know, obviously I think SOFR is going to be coming down. You know, obviously rates are being lowered. I’m hoping to see that on the 5-year Treasury as well.

Barry Ritholtz: is that your benchmark for for fees as opposed to, you know, 10 year for mortgages?

Bob Moser: Yeah. So, I look at the five year quite a bit.

Barry Ritholtz: So, uh, we’ve been hearing from various manufacturers. There’s no sort of clarity as to policy. Everybody is kind of frozen… I get the sense that’s not really an issue with your business.

Bob Moser: Going back, it’s need based real estate. People need it to no matter what the life cycle is, whatever the macro economy is, they need space for their products, goods, inventory, their personal items.

Barry Ritholtz: Really, really fascinating. Last question before we get to our favorites. So, so what do you think commercial real estate investors aren’t thinking about or talking about um but perhaps should be…

Bob Moser: I really think it’s about how to really create value in real estate real estate is not a short term investment and a lot of people look and I’m not even talking 3 to 5 years is short in real estate I remember years ago this old-timer told me that you know real estate’s boring for the first 30 years.

Barry Ritholtz: It’s it’s funny the line, real estate is boring for the first 30 years. After Sam Zell passed away, I read a biography of him and one of the things that kind of that stunned me was he owned some of his properties for for half a century 50 years forever. That’s just that’s just a unbelievable number.

Bob Moser: It’s almost like the Warren Buffett way of buying real estate. Long-term is really long term when it comes to real estate.

Barry Ritholtz: So, so let’s jump to our favorite questions that we ask all of our guests. Starting with who who were your mentors who helped shape this obsession with real estate from the earliest days and helped shape your career?

Bob Moser: I’ve had I’ve been very fortunate to have some great partners along the way. Um, from some of my like Ken Langone, founder of Home Depot, was a really close friend and mentor… but I’ve been fortunate to have some of the largest investors in the world like the late Ira Harris who was absolutely amazing and taught me a lot.

Barry Ritholtz: So, let’s talk about books. What What are you reading and what are some of your favorites.

Bob Moser: I think probably one of my favorite was Remnants of a Stock Operator [sic]. It was a great book.

Barry Ritholtz: Uh what about streaming? What are you listening to or watching? Anything keeping you entertained these days?

Bob Moser: Podcast wise, obviously besides yourself, we were all in listening to some of that on the way down. I was just listening to actually your interview with Unlang’s uh CEO, Wilhelm Schmid of A. Lange.

Barry Ritholtz: Yeah. Fascinating guy. I didn’t realize how big into cars he was. So final two questions. What sort of advice would you give to a recent college grad uh interest in the career in commercial real estate investing?

Bob Moser: I think it’s in anything. Don’t count somebody else’s money. I see a lot of younger people wondering what the other person next to them is making and concerned about that. Always do more than what you’re paid for. And you have to be enthusiastic. Enthusiasm is probably the biggest driver of success. I can think of

Barry Ritholtz: enthusiasm. That’s that’s really fascinating. And our final question, what do you know about the world of commercial real estate investing today? Would have been helpful back in the 1990s when you were first starting out.

Bob Moser: I would say it was more about managing people. I It took me a long time to learn how to manage people… and the ability to empower people. It took you know obviously it took me probably a decade and a half before I really felt comfortable doing that. Uh but yeah I think that was probably if I had done that earlier I’d probably be bigger.

Barry Ritholtz: Really really quite fascinating. Thanks Bob for being so generous with your time. We have been speaking to Bob Moser. He is the founder and CEO of Prime Group Holdings. America’s largest privately held self- storage uh investment fund. If you enjoy this conversation, well, be sure and check out any of the 592 that we’ve done over the past 12 years. You can find those at iTunes, Spotify, Bloomberg, YouTube, or wherever you get your favorite podcasts. I would be remiss if I did not thank the Crack team that helps me put these conversations together each and every week. Alexis Noriega is my video producer. Shan Russo is my head of research. Anna Luke is my podcast producer. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio.

 

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Re-Set: Reversing The Debt-Debasement Death-Spiral

Authored by Charles Hugh Smith via OfTwoMinds blog,

The end-game of debt-debasement is already visible. The only thing that's still up in the air is our response.

The unspoken foundation of the US dollar debasement narrative is TINA: There Is No Alternative to debasing the USD to zero because reversing course by reversing the expansion of debt and the money supply (i.e. monetary inflation) are impossible in a debt-dependent economy.

Without a steady expansion of debt and a steady debasement of the dollar so debtors have an easier time paying existing debts, the economy would crash, and so doing more of what leads to collapse is the status quo "solution."

The second assumption of the US dollar debasement narrative is that those who own crypto, precious metals and other tangible assets will not just survive the eventual crisis but emerge wealthy, as the value of their assets is not dependent on fiat currencies.

This suggests the following thought experiment: since those holding the levers of power "know" the end-game of debasement is the collapse of the currency and the economy, and they "know" the economic devastation that this collapse will deliver not just to the majority but to the wealthy whose wealth ultimately depends on a functioning economy, wouldn't they consider pursuing a still-painful but less apocalyptic option that steers clear of the death-spiral?

Let's also consider that history hasn't been kind to governments that let their currency collapse. Those in power who "know" this would be wise to seek a way to escape the debasement death-spiral simply out of self-preservation, as their power would not survive the (entirely avoidable) destruction of the currency and economy.

Put another way: is there a way to escape the debasement death-spiral that actually re-sets the economy for legitimate advances in the quality of life after a painful excising of the fatal dependence on ever-soaring debt and debasement to prop up the illusion of "prosperity"?

There is a way to reverse the death-spiral, and the key for those in power is to distribute the unavoidable pain evenly enough that no one class reaches the point where they have nothing to lose in seeking to dismantle the entire status quo.

For the past 50 years, the status quo has slowly bled the bottom 80% while channeling all the gains to the top 10%. There were sufficient crumbs left by those feasting on capital gains to give the bottom 80% a reason to comply rather than revolt, but the pain of reversing debasement could make revolt more appealing than compliance.

Note that this redistribution was the result of policy decisions that benefited those reaping the gains of financialization and globalization. It was a choice, not fate.

Those in power must even out the distribution of pain so those who reaped the gains (the top 10%) bear the brunt of the financial damage while funneling enough of life's essentials to the bottom 80% to avoid revolt.

Recall that the top 10% own the vast majority of financial assets, with the bottom 50% owning a wafer-thin 2.5% of financial assets, a 28% decline from their 3.5% share in 1990. The share owned by the top 1%, meanwhile, rose by 42% to 35.6%.

The only way to reverse the debasement death spiral is to end the economy's dependence on ever-rising debt to fund consumption and an ever-expanding money supply to inflate the asset bubbles that fuel both soaring wealth inequality and the outsized spending of the top 10%--spending that generates a lopsided illusion of "growth."

The most effective way to defend the dollar and suppress debt expansion is to influence supply and demand by jacking up Treasury yields / interest rates. Global capital will flow into US Treasury bonds to reap the higher rates while demand for new loans declines as rates rise. The federal government's borrowing costs will jump, squeezing spending while debt-based consumption falls off a cliff.

This is the recession that's necessary to clear the dependence on debt, inflation and speculative excesses, the recession that's been put off for 45 years by excessive money / debt expansion.

At the same time, the Federal Reserve lets the resulting bankruptcies and defaults reduce private-sector debt by refusing to bail out Wall Street and the "too big to fail" banks. Overleveraged banks will fail as the necessary step to re-establish some semblance of market discipline rather than backstop the biggest gamblers (i.e. Moral Hazard).

As when the Savings and Loan debacle wiped out (often fraudulent) lenders, the appropriate public agencies will liquidate assets and spread the losses borne by the public over enough time to manage the pain.

Note that federal debt (i.e. the national debt) of $38 trillion is about a third of total debt, with 2/3 being private-sector.

Recall that private-sector lenders create most of the new currency: when a bank issues a new mortgage, that origination creates new currency. When the mortgage is paid off, that currency goes to Money Heaven--the money supply declines accordingly. Paying down debt or writedowns of debt both reduce the quantity of dollars.

Concurrently, the Federal Reserve tightens liquidity / ceases creating USD out of thin air, reducing the money supply, which induces a scarcity of dollars globally as investors seeking to lock in the higher yields of Treasuries (see above) are in effect bidding for dollars, as Treasury bonds / bills / notes are denominated in US dollars.

The dollar rises due to this shift in supply and demand, and while this punishes exporters, it increases the purchasing power of the dollar for workers and employers alike. Again, any reversal / re-set will generate extreme pain, and the only management strategy with any hope of success is to distribute the pain widely enough, and fairly enough, so that no one class absorbs all the pain.

The long-avoided rebalancing of federal obligations and revenues is finally undertaken, reversing the past 50 years of policies that benefited owners of capital (the top 10%) at the expense of wage earners (the bottom 90%).

Here's an example of such a policy change: apply the 15.3% social-welfare tax paid by self-employed workers to all unearned income: capital gains, stock option compensation, etc. As with self-employed workers, income tax is on top of this 15.3% social-welfare tax.

On the expense side, ending the perverse incentives built into SickCare and the no-limits funding of all the sacred cows (Big Ag, Big Processed Food, Big Pharma, Big Defense, Big Banks, SickCare, Higher Education, etc.) would spread the pain to those elites and sectors that have enjoyed unimpaired federal largesse for decades.

As recession cuts consumption and employment, mass defaults will wipe out trillions in debt. You can't get blood from a stone, and the owners of all this debt--auto loans, student loans, credit cards, mortgages, etc.--will eat the writedowns. All the currency created by the debt issuance disappears, and the quantity of dollars in circulation plummets, reversing the debt-debasement-inflation death-spiral.

This is a chart of M2 Money Supply, which shows the expansion of the money supply in relation to the GDP generated by the money. (Note that M2 and GDP are imperfect / misleading measures, but everyone uses them anyway.)

Yes, I get it, every one of these steps is "impossible" because some entrenched concentration of wealth / power would suffer. The point here is the suffering that will be inflicted on the elites and sacred cows by the collapse of the currency will be far greater than the pain they will suffer in a re-set that actually changes the nation's course from a debt-debasement death-spiral to an economy with market discipline and a dynamic balance of social and financial interests.

As I explain in my new book Investing In Revolution, the extreme imbalances generated by the current death-spiral policies will get rebalanced one way or the other, and those influencing policy have a stark choice: leave the status quo as-is and guarantee a non-linear (i.e. uncontrolled, chaotic) collapse, or reverse course now while some control of the re-set is still available.

The end-game of debt-debasement is already visible. The only thing that's still up in the air is our response. Don't think it won't happen just because it hasn't happened yet.

*  *  *

My new book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free)

Check out my updated Books and Films. Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free

Tyler Durden Mon, 02/09/2026 - 13:00

Re-Set: Reversing The Debt-Debasement Death-Spiral

Authored by Charles Hugh Smith via OfTwoMinds blog,

The end-game of debt-debasement is already visible. The only thing that's still up in the air is our response.

The unspoken foundation of the US dollar debasement narrative is TINA: There Is No Alternative to debasing the USD to zero because reversing course by reversing the expansion of debt and the money supply (i.e. monetary inflation) are impossible in a debt-dependent economy.

Without a steady expansion of debt and a steady debasement of the dollar so debtors have an easier time paying existing debts, the economy would crash, and so doing more of what leads to collapse is the status quo "solution."

The second assumption of the US dollar debasement narrative is that those who own crypto, precious metals and other tangible assets will not just survive the eventual crisis but emerge wealthy, as the value of their assets is not dependent on fiat currencies.

This suggests the following thought experiment: since those holding the levers of power "know" the end-game of debasement is the collapse of the currency and the economy, and they "know" the economic devastation that this collapse will deliver not just to the majority but to the wealthy whose wealth ultimately depends on a functioning economy, wouldn't they consider pursuing a still-painful but less apocalyptic option that steers clear of the death-spiral?

Let's also consider that history hasn't been kind to governments that let their currency collapse. Those in power who "know" this would be wise to seek a way to escape the debasement death-spiral simply out of self-preservation, as their power would not survive the (entirely avoidable) destruction of the currency and economy.

Put another way: is there a way to escape the debasement death-spiral that actually re-sets the economy for legitimate advances in the quality of life after a painful excising of the fatal dependence on ever-soaring debt and debasement to prop up the illusion of "prosperity"?

There is a way to reverse the death-spiral, and the key for those in power is to distribute the unavoidable pain evenly enough that no one class reaches the point where they have nothing to lose in seeking to dismantle the entire status quo.

For the past 50 years, the status quo has slowly bled the bottom 80% while channeling all the gains to the top 10%. There were sufficient crumbs left by those feasting on capital gains to give the bottom 80% a reason to comply rather than revolt, but the pain of reversing debasement could make revolt more appealing than compliance.

Note that this redistribution was the result of policy decisions that benefited those reaping the gains of financialization and globalization. It was a choice, not fate.

Those in power must even out the distribution of pain so those who reaped the gains (the top 10%) bear the brunt of the financial damage while funneling enough of life's essentials to the bottom 80% to avoid revolt.

Recall that the top 10% own the vast majority of financial assets, with the bottom 50% owning a wafer-thin 2.5% of financial assets, a 28% decline from their 3.5% share in 1990. The share owned by the top 1%, meanwhile, rose by 42% to 35.6%.

The only way to reverse the debasement death spiral is to end the economy's dependence on ever-rising debt to fund consumption and an ever-expanding money supply to inflate the asset bubbles that fuel both soaring wealth inequality and the outsized spending of the top 10%--spending that generates a lopsided illusion of "growth."

The most effective way to defend the dollar and suppress debt expansion is to influence supply and demand by jacking up Treasury yields / interest rates. Global capital will flow into US Treasury bonds to reap the higher rates while demand for new loans declines as rates rise. The federal government's borrowing costs will jump, squeezing spending while debt-based consumption falls off a cliff.

This is the recession that's necessary to clear the dependence on debt, inflation and speculative excesses, the recession that's been put off for 45 years by excessive money / debt expansion.

At the same time, the Federal Reserve lets the resulting bankruptcies and defaults reduce private-sector debt by refusing to bail out Wall Street and the "too big to fail" banks. Overleveraged banks will fail as the necessary step to re-establish some semblance of market discipline rather than backstop the biggest gamblers (i.e. Moral Hazard).

As when the Savings and Loan debacle wiped out (often fraudulent) lenders, the appropriate public agencies will liquidate assets and spread the losses borne by the public over enough time to manage the pain.

Note that federal debt (i.e. the national debt) of $38 trillion is about a third of total debt, with 2/3 being private-sector.

Recall that private-sector lenders create most of the new currency: when a bank issues a new mortgage, that origination creates new currency. When the mortgage is paid off, that currency goes to Money Heaven--the money supply declines accordingly. Paying down debt or writedowns of debt both reduce the quantity of dollars.

Concurrently, the Federal Reserve tightens liquidity / ceases creating USD out of thin air, reducing the money supply, which induces a scarcity of dollars globally as investors seeking to lock in the higher yields of Treasuries (see above) are in effect bidding for dollars, as Treasury bonds / bills / notes are denominated in US dollars.

The dollar rises due to this shift in supply and demand, and while this punishes exporters, it increases the purchasing power of the dollar for workers and employers alike. Again, any reversal / re-set will generate extreme pain, and the only management strategy with any hope of success is to distribute the pain widely enough, and fairly enough, so that no one class absorbs all the pain.

The long-avoided rebalancing of federal obligations and revenues is finally undertaken, reversing the past 50 years of policies that benefited owners of capital (the top 10%) at the expense of wage earners (the bottom 90%).

Here's an example of such a policy change: apply the 15.3% social-welfare tax paid by self-employed workers to all unearned income: capital gains, stock option compensation, etc. As with self-employed workers, income tax is on top of this 15.3% social-welfare tax.

On the expense side, ending the perverse incentives built into SickCare and the no-limits funding of all the sacred cows (Big Ag, Big Processed Food, Big Pharma, Big Defense, Big Banks, SickCare, Higher Education, etc.) would spread the pain to those elites and sectors that have enjoyed unimpaired federal largesse for decades.

As recession cuts consumption and employment, mass defaults will wipe out trillions in debt. You can't get blood from a stone, and the owners of all this debt--auto loans, student loans, credit cards, mortgages, etc.--will eat the writedowns. All the currency created by the debt issuance disappears, and the quantity of dollars in circulation plummets, reversing the debt-debasement-inflation death-spiral.

This is a chart of M2 Money Supply, which shows the expansion of the money supply in relation to the GDP generated by the money. (Note that M2 and GDP are imperfect / misleading measures, but everyone uses them anyway.)

Yes, I get it, every one of these steps is "impossible" because some entrenched concentration of wealth / power would suffer. The point here is the suffering that will be inflicted on the elites and sacred cows by the collapse of the currency will be far greater than the pain they will suffer in a re-set that actually changes the nation's course from a debt-debasement death-spiral to an economy with market discipline and a dynamic balance of social and financial interests.

As I explain in my new book Investing In Revolution, the extreme imbalances generated by the current death-spiral policies will get rebalanced one way or the other, and those influencing policy have a stark choice: leave the status quo as-is and guarantee a non-linear (i.e. uncontrolled, chaotic) collapse, or reverse course now while some control of the re-set is still available.

The end-game of debt-debasement is already visible. The only thing that's still up in the air is our response. Don't think it won't happen just because it hasn't happened yet.

*  *  *

My new book Investing In Revolution is available at a 10% discount ($18 for the paperback, $24 for the hardcover and $8.95 for the ebook edition). Introduction (free)

Check out my updated Books and Films. Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free

Tyler Durden Mon, 02/09/2026 - 13:00

NY Times Columnist Says Vance's Mother Should Have Sold Him To Feed Her Addiction

Authored by Jonathan Turley,

In an age of rage, it is often difficult to stand out in the mob as so many pander to the perpetually irate.

However, New York Times columnist Jamelle Bouie has found a way to win the race to the bottom.

In a posting on Bluesky, Bouie mocked the account of the addiction of the mother of Vice President J.D. Vance, saying that she should have sold her son for drugs.

Bouie used Bluesky (the digital safe zone for the viewpoint intolerant on the left) to post one of the most reprehensible attacks on Vance. Bouie wrote that “this is a wicked man who knows he is being wicked and does it anyway.”

That is hardly notable on today’s rage scale.

However, he then decided to use the painful addiction history of Beverly Aikins against her son: “No wonder his mom tried to sell him for Percocets. [I] can’t imagine a parent who wouldn’t sell little JD for percocet if they knew he would turn out like this.’

Vance wrote a celebrated bestseller, “Hillbilly Elegy,” about his difficult childhood with a mother who became addicted to pain medication and eventually found herself stealing drugs from her patients. It was a tragic account of how addiction tore their family apart, but also a tale of redemption: “I knew that a mother could love her son despite the grip of addiction. I knew that my family loved me, even when they struggled to take care of themselves.”

In April of last year, Vance celebrated his mother’s decade of sobriety.

As I discuss in my new book “Rage and the Republic,”  a common element to past radical movements has been the dehumanization of political opponents. In calling others “Gestapo,” “fascists,” and “Nazis,” you achieve a certain license to say and do things that you would ordinarily never say or do. By stripping them of any humanity or right to empathy, you are free to discard the limitations of decency and civility.

Rage is itself a type of drug. It is addictive and, while they never admit it, they like it.

Bouie shows the lack of self-awareness in his hateful posts. It is the ultimate example of transference; a self-description ascribed to those you hate.

On his New York Times bio, Bouie insists that “I come from a left-leaning, social democratic perspective, but I strive for honesty, fairness and good faith in my writing.” He adds that “I abide by the same rigorous ethical standards as all Times journalists.”

If using Vance’s tragic childhood and his mother’s addiction is an example of the “fairness and good faith” of the New York Times, it is a chilling prospect.

In his book, Vance observes that the children of broken and impoverished homes often give up hope, as he did: “Psychologists call it “learned helplessness” when a person believes, as I did during my youth, that the choices I made had no effect on the outcomes in my life.”

He found that choices do matter in shaping your life. We all make such choices, as did Bouie in becoming another voice of rage and the New York Times in giving him a platform to amplify his views.

It is the same choice that the Times makes in barring a U.S. senator and firing editors for exposing readers to alternative viewpoints while publishing those who advocate repression or rationalize political violence.  To the obvious appeal of its readers, the paper now peddles in hate to feed a national addiction.

In the end, Vance and his mother have overcome far greater challenges than this vicious columnist or the hatefest at Bluesky. From adversity, they found a strength and a bond that has inspired many who are struggling with such addictions and poverty.

It is clear who is “wicked” in these postings. Perhaps it is even strangely edifying and self-condemning. As Victor Hugo observed, “the wicked envy and hate; it is their way of admiring.”

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

Tyler Durden Mon, 02/09/2026 - 12:20

NY Times Columnist Says Vance's Mother Should Have Sold Him To Feed Her Addiction

Authored by Jonathan Turley,

In an age of rage, it is often difficult to stand out in the mob as so many pander to the perpetually irate.

However, New York Times columnist Jamelle Bouie has found a way to win the race to the bottom.

In a posting on Bluesky, Bouie mocked the account of the addiction of the mother of Vice President J.D. Vance, saying that she should have sold her son for drugs.

Bouie used Bluesky (the digital safe zone for the viewpoint intolerant on the left) to post one of the most reprehensible attacks on Vance. Bouie wrote that “this is a wicked man who knows he is being wicked and does it anyway.”

That is hardly notable on today’s rage scale.

However, he then decided to use the painful addiction history of Beverly Aikins against her son: “No wonder his mom tried to sell him for Percocets. [I] can’t imagine a parent who wouldn’t sell little JD for percocet if they knew he would turn out like this.’

Vance wrote a celebrated bestseller, “Hillbilly Elegy,” about his difficult childhood with a mother who became addicted to pain medication and eventually found herself stealing drugs from her patients. It was a tragic account of how addiction tore their family apart, but also a tale of redemption: “I knew that a mother could love her son despite the grip of addiction. I knew that my family loved me, even when they struggled to take care of themselves.”

In April of last year, Vance celebrated his mother’s decade of sobriety.

As I discuss in my new book “Rage and the Republic,”  a common element to past radical movements has been the dehumanization of political opponents. In calling others “Gestapo,” “fascists,” and “Nazis,” you achieve a certain license to say and do things that you would ordinarily never say or do. By stripping them of any humanity or right to empathy, you are free to discard the limitations of decency and civility.

Rage is itself a type of drug. It is addictive and, while they never admit it, they like it.

Bouie shows the lack of self-awareness in his hateful posts. It is the ultimate example of transference; a self-description ascribed to those you hate.

On his New York Times bio, Bouie insists that “I come from a left-leaning, social democratic perspective, but I strive for honesty, fairness and good faith in my writing.” He adds that “I abide by the same rigorous ethical standards as all Times journalists.”

If using Vance’s tragic childhood and his mother’s addiction is an example of the “fairness and good faith” of the New York Times, it is a chilling prospect.

In his book, Vance observes that the children of broken and impoverished homes often give up hope, as he did: “Psychologists call it “learned helplessness” when a person believes, as I did during my youth, that the choices I made had no effect on the outcomes in my life.”

He found that choices do matter in shaping your life. We all make such choices, as did Bouie in becoming another voice of rage and the New York Times in giving him a platform to amplify his views.

It is the same choice that the Times makes in barring a U.S. senator and firing editors for exposing readers to alternative viewpoints while publishing those who advocate repression or rationalize political violence.  To the obvious appeal of its readers, the paper now peddles in hate to feed a national addiction.

In the end, Vance and his mother have overcome far greater challenges than this vicious columnist or the hatefest at Bluesky. From adversity, they found a strength and a bond that has inspired many who are struggling with such addictions and poverty.

It is clear who is “wicked” in these postings. Perhaps it is even strangely edifying and self-condemning. As Victor Hugo observed, “the wicked envy and hate; it is their way of admiring.”

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

Tyler Durden Mon, 02/09/2026 - 12:20

Kyndryl Collapses On Accounting Review, CFO Exit As Analysts Brand IBM-Spinoff A "Disaster"

Shares in Kyndryl, an IBM spinoff and IT infrastructure services provider, crashed on Monday after the company warned investors that it is reviewing certain accounting practices amid an inquiry from the Securities and Exchange Commission. The company also posted third-quarter results that missed Bloomberg Consensus estimates and disclosed what JPMorgan analysts described as a "surprise" departure of its CFO.

Kyndryl stock crashed as much as 57%, its biggest one-day drop on record. Shares traded at their lowest level since November 2022 after the company disclosed an SEC inquiry into certain accounting practices.

In a filing, Kyndryl said it "anticipates reporting material weaknesses in the Company's internal control over financial reporting for the period covered in the Quarterly Report, as well as for the full fiscal year ended March 31, 2025, and the first two fiscal quarters of fiscal year 2026."

This is "expected to include, but may not be limited to, the effectiveness and strength of certain functions at the Company, including with respect to controls related to information and communication and tone at the top," the filing noted.

The information technology services provider that works with hyperscalers also announced that CFO David Wysher and general counsel Edward Sebold had left the company.

On top of that, third-quarter results missed Bloomberg consensus estimates, and the company lowered its full-year outlook for both adjusted EBITDA margin and adjusted pretax profit.

Here's a snapshot of the third-quarter (courtesy of Bloomberg):

Adjusted EPS 52c vs. 51c y/y, estimate 61c (Bloomberg Consensus)

Revenue $3.86 billion, +3.1% y/y, estimate $3.89 billion

• US revenue $958 million, estimate $982.3 million
• Japan revenue $568 million, estimate $588.8 million

Adjusted Ebitda $696 million, -1.1% y/y, estimate $701.2 million

Adjusted Ebitda margin 18%, estimate 18%

Adjusted pretax profit $168 million, estimate $192.4 million

Full-Year Forecast:

• Sees adjusted Ebitda margin 17.5%, saw about 18%

• Sees adjusted pretax profit $575 million to $600 million, saw at least $725 million

Kyndryl CEO Martin Schroeter declined to comment during the earnings call:

"The fact is we just can't comment until the examination is complete. The teams are working expeditiously so we can share a remediation plan."

Kyndryl said it needs additional time to finalize its fiscal third-quarter report and noted that it is preparing a remediation plan, which will be detailed in the upcoming filing.

Analysts at JPMorgan downgraded Kyndryl to Underweight from Overweight and slashed their price target to $16 from $40. They told clients the downgrade was due to cuts to sales and profit guidance, the CFO's surprise departure, and the delayed quarterly filing.

Bloomberg Intelligence analysts said, "Kyndryl faces secular pressure in infrastructure services and new guidance is for a revenue decline in fiscal 2026, raising doubts about the durability of its turnaround."

"KD was a disaster, with a miss-and-cut report, several mgmt. changes, and a delayed 10Q filing," Vital Knowledge analysts wrote in a note.

Tyler Durden Mon, 02/09/2026 - 11:45

Kyndryl Collapses On Accounting Review, CFO Exit As Analysts Brand IBM-Spinoff A "Disaster"

Shares in Kyndryl, an IBM spinoff and IT infrastructure services provider, crashed on Monday after the company warned investors that it is reviewing certain accounting practices amid an inquiry from the Securities and Exchange Commission. The company also posted third-quarter results that missed Bloomberg Consensus estimates and disclosed what JPMorgan analysts described as a "surprise" departure of its CFO.

Kyndryl stock crashed as much as 57%, its biggest one-day drop on record. Shares traded at their lowest level since November 2022 after the company disclosed an SEC inquiry into certain accounting practices.

In a filing, Kyndryl said it "anticipates reporting material weaknesses in the Company's internal control over financial reporting for the period covered in the Quarterly Report, as well as for the full fiscal year ended March 31, 2025, and the first two fiscal quarters of fiscal year 2026."

This is "expected to include, but may not be limited to, the effectiveness and strength of certain functions at the Company, including with respect to controls related to information and communication and tone at the top," the filing noted.

The information technology services provider that works with hyperscalers also announced that CFO David Wysher and general counsel Edward Sebold had left the company.

On top of that, third-quarter results missed Bloomberg consensus estimates, and the company lowered its full-year outlook for both adjusted EBITDA margin and adjusted pretax profit.

Here's a snapshot of the third-quarter (courtesy of Bloomberg):

Adjusted EPS 52c vs. 51c y/y, estimate 61c (Bloomberg Consensus)

Revenue $3.86 billion, +3.1% y/y, estimate $3.89 billion

• US revenue $958 million, estimate $982.3 million
• Japan revenue $568 million, estimate $588.8 million

Adjusted Ebitda $696 million, -1.1% y/y, estimate $701.2 million

Adjusted Ebitda margin 18%, estimate 18%

Adjusted pretax profit $168 million, estimate $192.4 million

Full-Year Forecast:

• Sees adjusted Ebitda margin 17.5%, saw about 18%

• Sees adjusted pretax profit $575 million to $600 million, saw at least $725 million

Kyndryl CEO Martin Schroeter declined to comment during the earnings call:

"The fact is we just can't comment until the examination is complete. The teams are working expeditiously so we can share a remediation plan."

Kyndryl said it needs additional time to finalize its fiscal third-quarter report and noted that it is preparing a remediation plan, which will be detailed in the upcoming filing.

Analysts at JPMorgan downgraded Kyndryl to Underweight from Overweight and slashed their price target to $16 from $40. They told clients the downgrade was due to cuts to sales and profit guidance, the CFO's surprise departure, and the delayed quarterly filing.

Bloomberg Intelligence analysts said, "Kyndryl faces secular pressure in infrastructure services and new guidance is for a revenue decline in fiscal 2026, raising doubts about the durability of its turnaround."

"KD was a disaster, with a miss-and-cut report, several mgmt. changes, and a delayed 10Q filing," Vital Knowledge analysts wrote in a note.

Tyler Durden Mon, 02/09/2026 - 11:45

Spot The Useful Idiot

Despite the ongoing partisan panic over 'Trump-driven inflation' or whatever narrative-du-jour the mainstream media chooses, inflation expectations tracked by the NY Fed survey of Consumer Expectations dropped to six-month lows. inflation expectations tracked by the NY Fed survey of Consumer Expectations

Median inflation expectations in January declined by 0.3 percentage point at the one-year-ahead horizon to 3.1% and remained steady at the three-year and five-year-ahead horizons at 3.0%.

Additionally, median inflation uncertainty - or the uncertainty expressed regarding future inflation outcomes - decreased at the one-year and three-year-ahead horizons and increased at the five-year-ahead horizon.

Over the next year consumers expect gasoline prices to rise 2.8%; food prices to rise 5.74%; medical costs to rise 9.8%; the price of a college education to rise 9.03%; rent prices to rise 6.82%

Optimism over the labor market improved modestly with median one-year-ahead earnings growth expectations increased by 0.2 percentage point to 2.7% in January, driven by those with household income under $50,000. Additionally, respondents saw a higher probabilioty of finding a job within 3 months...

However, perceptions about households’ current financial situations deteriorated with a larger share of respondents reporting that their households were worse off compared to a year ago.

The median expected growth in household income decreased by 0.1 percentage point to 2.9% in January, equaling its trailing 12-month average.

Year-ahead expectations about households’ financial situations also deteriorated with a smaller share of respondents reporting that their households expect to be better off a year from now and a larger share reporting they expect to be worse off.

Finally, spot the 'useful idiot'...

Going back to where we started above, why was it that for the entire term of President Biden, Democrats surveyed by UMich saw future inflation expectations dramatically below that of the NYFed's survey respondents...

...and yet the moment President Trump was elected, a sudden surge of hyperinflation angst smashed them in the head?

Net-net, the NYFed survey shows little to no anxiety over inflation, a rebound in job market optimism, but concerns remain over household financial conditions, particularly with regard to medical costs.

Tyler Durden Mon, 02/09/2026 - 11:35

Spot The Useful Idiot

Despite the ongoing partisan panic over 'Trump-driven inflation' or whatever narrative-du-jour the mainstream media chooses, inflation expectations tracked by the NY Fed survey of Consumer Expectations dropped to six-month lows. inflation expectations tracked by the NY Fed survey of Consumer Expectations

Median inflation expectations in January declined by 0.3 percentage point at the one-year-ahead horizon to 3.1% and remained steady at the three-year and five-year-ahead horizons at 3.0%.

Additionally, median inflation uncertainty - or the uncertainty expressed regarding future inflation outcomes - decreased at the one-year and three-year-ahead horizons and increased at the five-year-ahead horizon.

Over the next year consumers expect gasoline prices to rise 2.8%; food prices to rise 5.74%; medical costs to rise 9.8%; the price of a college education to rise 9.03%; rent prices to rise 6.82%

Optimism over the labor market improved modestly with median one-year-ahead earnings growth expectations increased by 0.2 percentage point to 2.7% in January, driven by those with household income under $50,000. Additionally, respondents saw a higher probabilioty of finding a job within 3 months...

However, perceptions about households’ current financial situations deteriorated with a larger share of respondents reporting that their households were worse off compared to a year ago.

The median expected growth in household income decreased by 0.1 percentage point to 2.9% in January, equaling its trailing 12-month average.

Year-ahead expectations about households’ financial situations also deteriorated with a smaller share of respondents reporting that their households expect to be better off a year from now and a larger share reporting they expect to be worse off.

Finally, spot the 'useful idiot'...

Going back to where we started above, why was it that for the entire term of President Biden, Democrats surveyed by UMich saw future inflation expectations dramatically below that of the NYFed's survey respondents...

...and yet the moment President Trump was elected, a sudden surge of hyperinflation angst smashed them in the head?

Net-net, the NYFed survey shows little to no anxiety over inflation, a rebound in job market optimism, but concerns remain over household financial conditions, particularly with regard to medical costs.

Tyler Durden Mon, 02/09/2026 - 11:35

"I Will Not Sit Idly As They Use Me As A Prop": Is Bill Clinton Moving Back Into Contempt?

Authored by Jonathan Turley,

The Clintons are again suggesting that they might not agree to a deposition after previously yielding to the threat of a contempt vote.

Hillary Clinton taunted House Oversight Chair James Comer “if you want this fight…let’s have it—in public.”

For his part, Bill Clinton seemed more conclusive on X in opposing a deposition: 

“I will not sit idly as they use me as a prop in a closed-door kangaroo court.”

The question is whether the Clintons are again gaming the system after avoiding a bipartisan vote to hold them in contempt.

As with the Hunter Biden deposition (which was also delayed by such tactics), there are various reasons for holding a closed deposition before public hearings.

• First, these depositions allow professional staff to conduct questioning in a methodical and professional manner.

  • In a public hearing, questioning is conducted by members who are often ill-equipped for substantive inquiries.

• Second, the Clintons must be asked about a range of documents and communications that contain names and privacy-protected information.

  • At a public hearing, the use of such documents would trigger redactions and interruptions.

• Third, these depositions allow for in-depth questioning on transactions and communications.

  • In a public hearing, members are confined to a five-minute rule that guarantees questioning cannot achieve much, if any, depth.

Those are all reasons the Clintons want a public hearing in which members, not staff, ask questions under tight time limits. It produces superficial examinations with little ability to pursue substantive conflicts or issues.

None of this really matters legally.

All citizens are compelled to appear at such hearings.

They may invoke the Fifth Amendment, but they must appear. Even the Clintons.

However, the Clintons have spent a lifetime gaming the system, avoiding accountability for alleged crimes, including (in the case of Bill Clinton) federal perjury.

This is vintage Clinton.

After a bipartisan vote in committee to hold them in contempt, they took a 180-degree turn and agreed to the depositions. The final vote was then cancelled.

Once cancelled, Bill Clinton is again suggesting that he will “not sit idly by” for such a deposition.

It is not clear what that means. He will sit for this deposition or be held in contempt like any other citizen.

The declaration could mean anything from laying the groundwork for invoking the Fifth Amendment to another act of defiance of the subpoena. He could be planning to refuse to answer certain questions in a combative approach to the deposition. However, that could still result in a contempt sanction.

Notably, the Clintons have long been able to control the conditions of their questioning. Even with the Independent Counsel, Clinton was able to secure concessions on time and questions. He still tripped the wire and committed perjury, according to a federal court.

This is a rare occasion where they will not dictate such conditions. That raises the intriguing possibility that Bill Clinton could set a precedent by invoking the Fifth Amendment. Otherwise, he may not be idle, but he will be present.

Tyler Durden Mon, 02/09/2026 - 11:25

China Tells Banks To Limit Exposure To US Treasuries, But To Some This Is "Hardly An Issue At All"

Treasury yields hit session highs shortly after midnight ET, when Bloomberg reported that Chinese regulators had advised financial institutions to rein in their holdings of US Treasuries, citing concerns over concentration risks and market volatility.

Citing anonymous "people familiar with the matter" Bloonberg added that officials urged banks to limit purchases of US government bonds and instructed those with high exposure to pare down their positions. The directive doesn’t apply to China’s state holdings of US Treasuries.

Communicated verbally to some of the nation’s biggest banks in recent weeks, the guidance reflects growing wariness among officials that large holdings of US government debt may expose banks to sharp swing . The worries echo those made by governments and fund managers elsewhere amid a brewing debate over the safe haven status of US debt and the appeal of the dollar.

The move, which otherwise would have been seen as a clear escalation in the US-China trade war, was framed around "diversifying market risk" rather than anything to do with geopolitical maneuvering or a fundamental loss of confidence in US creditworthiness, the sources said, adding that officials didn’t given any specific target on size or timing. While significant tensions remain between Beijing and Washington, relations have steadied in the wake of a trade truce last year.

Treasuries slipped on the news, with yields edging higher across maturities in Asian afternoon trading. The dollar weakened slightly against major peers.

According to data from the State Administration of Foreign Exchange, Chinese banks held about $298 billion worth of dollar-denominated bonds as of September, It’s unclear how much of those were Treasuries.

Largely dismissing the report, Westpac's Martin Whetton said that China’s holdings of US Treasuries peaked in 2017, and what’s left is small relative to the size of the overall market.Now at $682 billion, China’s holdings represent “hardly an issue at all,” says Martin Whetton, head of financial markets strategy.

“If you include Belgium and Luxembourg, which can be proxies for some of their holdings, you’d barely make it over $750 billion”, which actually is completely incorrect since Belgium alone holds $481 billion in TSYs, as shown below.

A lot of US debt will be held by China’s official institutions and is likely short-dated for liquidity reasons, Whetton said. “So what is left for the banks is small, and China doesn’t exactly set the Treasury market on fire at the monthly auctions”

Donald Trump, who held a phone call with Xi Jinping last week, plans to meet the Chinese leader at a presidential summit in Beijing as soon as April. The regulatory guidance to Chinese banks on Treasuries came before last week’s call, the people said.

China’s warning comes as global investors question Washington’s fiscal discipline. Concerns have mounted regarding Trump’s commitment to a strong dollar and the continued independence of the Federal Reserve. Last month, Deutsche Bank's FX analyst George Saravelos warned that money managers in Europe could choose to trim their holdings in response to Trump’s threats on tariffs and the proposed acquisition of Greenland, a call which sparked an international scandal with Deutsche Bank washing its hands off his comments. 

Still, Scott Bessent said last week that “despite the popular narrative,” the Treasuries market last year delivered its best performance since 2020 and saw record foreign demand at auctions.

For context, foreign holdings of US Treasuries rose to a record $9.4 trillion in November, more than $500 billion higher than a year earlier, according to the latest official data.

Tyler Durden Mon, 02/09/2026 - 10:55

The Arms Race In The Indo-Pacific Is Just Getting Started As Participants Pick Sides

By Benjamin Picton, senior market strategist at Rabobank

US stocks rallied hard on Friday and the VIX index had its biggest one-day fall since April of last year. The rally broke three-straight days of losses where crypto was dumped and two-year Treasury bonds had tightened 19bps. Yields on two-year US treasuries rose almost 5bps on Friday to 3.50% in the broader risk-on rally.

Prime Minister Takaichi has won a landslide victory in Japan’s general election over the weekend. Takaichi’s Liberal Democratic Party now has a two-thirds supermajority in the lower house of the Diet, granting it the power to override the upper house.

The Nikkei is up 4.7% today and 12.9% YTD, trailing only the KOSPI among major Asian indices. Asian equity markets are mostly outperforming counterparts in Europe and the United States this year. The so-called ‘Takaichi-trade’ has seen Japanese equities well bid in reaction to Takaichi’s predilection for looser fiscal settings, greater investments in technology and defence, and pressure on the Bank of Japan not to raise interest rates too quickly.

Despite this cocktail of accommodative policy, USDJPY is dealing a little softer as Finance Minister Katayama indicated that she had been in close contact with US Treasury Secretary Bessent regarding stabilisation of the exchange rate. Katayama also said that she is prepared to take measures to stabilize markets today if necessary. 10-year JGBs are underperforming, with yields up 4.9bps on the day and the 2s10s curve steepening ~3bps.

Beyond the immediate implications for JGBs, the Japanese Yen and – by extension – the Yen carry trade, this is a momentous development geopolitically. Takaichi is a China hawk who sparked something of a diplomatic crisis late last year when she suggested that a Chinese invasion of Taiwan could be considered existential for Japan. That would be sufficient to justify intervention by the Japanese self-defence force under the country’s pacifist constitution – a point that was not lost on Chinese diplomats, who reacted furiously to the implication that Japan could resist efforts to reunify Taiwan with the mainland.

According to the Financial Times, Takaichi has signaled that she is ready to test her mandate by pursuing changes to Japan’s constitution. If successful, that could see Japan re-arming more rapidly and moving to acquire offensive capabilities that have heretofore remained restricted. This would suit the strategic aims of the Trump administration – who were supportive of Takaichi in her re-election bid – but is certain to further inflame the diplomatic row with China and also runs the risk of stoking tensions with other countries who retain misgivings over the behavior of Imperial Japan during and prior to World War Two.

In short, the arms race in the Indo-Pacific may just be getting started as third parties begin to pick sides in the contest between the United States and China, and also take steps to hedge against each other.

To underline this point, Indonesia and Australia have just signed a common security pact. This might ordinarily be considered an unremarkable development, except it marks something of a shift in Indonesia’s traditional non-aligned policy toward a more integrated defence posture and comes in the context of friction between Indonesia and China over territorial claims in the South China Sea.

The new agreement is particularly interesting because it is made with a Western country with whom Indonesia has not always seen eye-to-eye. Though it falls short of a mutual-defence pact, the agreement will see a significant step-up in military cooperation that highlights the strategic re-evaluation that is underway across the Indo-Pacific.

For its part, Australia has been busily upgrading its diplomatic and security ties in the region for several years now. Major agreements have recently been signed with Papua New Guinea, Fiji, the Solomon Islands, Vanuatu and Timor-Leste, while the AUKUS pact with the United States and the UK will soon see the Henderson shipyard in Western Australia used for maintenance and sustainment of nuclear submarines. Australia has also recently signed a deal to purchase eleven upgraded Mogami-class general purpose frigates from Japan – marking Japan’s first major defence export contract and a deepening of military ties between the two nations.

Needless to say, these agreements are implicitly understood as an effort to hedge against a more assertive China. This thinking is clear in the economic sphere also, as the Financial Review today reports that Australia has been quietly increasing tariffs on Chinese steel imports to protect what remains of its own domestic industry even as hopes for the conclusion of a long-awaited trade deal with the EU are rising. The pattern of freer trade for friends and restricted trade elsewhere is a template that is now being repeated globally as the world coalesces into interest blocs with geopolitical hedgerows erected in between. Those hedgerows are not impermeable, but they are growing denser over time.

Finally, while Takaichi’s political star is rising in the east another appears to be setting in the west. British Prime Minister Starmer is scheduled to address the nation today as speculation increases that he will soon be forced out of Number 10 Downing Street. Starmer’s Chief of Staff recently resigned over his role in recommending the appointment of Lord Mandelson as ambassador to the United States, despite his known links to Jeffrey Epstein. 

The decision by his most senior advisor to fall on his sword may buy Starmer some time, but signs of widespread discontent on the backbench compounded by diabolically bad poll results are creating the impression that his days are numbered.

Tyler Durden Mon, 02/09/2026 - 10:40

The Arms Race In The Indo-Pacific Is Just Getting Started As Participants Pick Sides

By Benjamin Picton, senior market strategist at Rabobank

US stocks rallied hard on Friday and the VIX index had its biggest one-day fall since April of last year. The rally broke three-straight days of losses where crypto was dumped and two-year Treasury bonds had tightened 19bps. Yields on two-year US treasuries rose almost 5bps on Friday to 3.50% in the broader risk-on rally.

Prime Minister Takaichi has won a landslide victory in Japan’s general election over the weekend. Takaichi’s Liberal Democratic Party now has a two-thirds supermajority in the lower house of the Diet, granting it the power to override the upper house.

The Nikkei is up 4.7% today and 12.9% YTD, trailing only the KOSPI among major Asian indices. Asian equity markets are mostly outperforming counterparts in Europe and the United States this year. The so-called ‘Takaichi-trade’ has seen Japanese equities well bid in reaction to Takaichi’s predilection for looser fiscal settings, greater investments in technology and defence, and pressure on the Bank of Japan not to raise interest rates too quickly.

Despite this cocktail of accommodative policy, USDJPY is dealing a little softer as Finance Minister Katayama indicated that she had been in close contact with US Treasury Secretary Bessent regarding stabilisation of the exchange rate. Katayama also said that she is prepared to take measures to stabilize markets today if necessary. 10-year JGBs are underperforming, with yields up 4.9bps on the day and the 2s10s curve steepening ~3bps.

Beyond the immediate implications for JGBs, the Japanese Yen and – by extension – the Yen carry trade, this is a momentous development geopolitically. Takaichi is a China hawk who sparked something of a diplomatic crisis late last year when she suggested that a Chinese invasion of Taiwan could be considered existential for Japan. That would be sufficient to justify intervention by the Japanese self-defence force under the country’s pacifist constitution – a point that was not lost on Chinese diplomats, who reacted furiously to the implication that Japan could resist efforts to reunify Taiwan with the mainland.

According to the Financial Times, Takaichi has signaled that she is ready to test her mandate by pursuing changes to Japan’s constitution. If successful, that could see Japan re-arming more rapidly and moving to acquire offensive capabilities that have heretofore remained restricted. This would suit the strategic aims of the Trump administration – who were supportive of Takaichi in her re-election bid – but is certain to further inflame the diplomatic row with China and also runs the risk of stoking tensions with other countries who retain misgivings over the behavior of Imperial Japan during and prior to World War Two.

In short, the arms race in the Indo-Pacific may just be getting started as third parties begin to pick sides in the contest between the United States and China, and also take steps to hedge against each other.

To underline this point, Indonesia and Australia have just signed a common security pact. This might ordinarily be considered an unremarkable development, except it marks something of a shift in Indonesia’s traditional non-aligned policy toward a more integrated defence posture and comes in the context of friction between Indonesia and China over territorial claims in the South China Sea.

The new agreement is particularly interesting because it is made with a Western country with whom Indonesia has not always seen eye-to-eye. Though it falls short of a mutual-defence pact, the agreement will see a significant step-up in military cooperation that highlights the strategic re-evaluation that is underway across the Indo-Pacific.

For its part, Australia has been busily upgrading its diplomatic and security ties in the region for several years now. Major agreements have recently been signed with Papua New Guinea, Fiji, the Solomon Islands, Vanuatu and Timor-Leste, while the AUKUS pact with the United States and the UK will soon see the Henderson shipyard in Western Australia used for maintenance and sustainment of nuclear submarines. Australia has also recently signed a deal to purchase eleven upgraded Mogami-class general purpose frigates from Japan – marking Japan’s first major defence export contract and a deepening of military ties between the two nations.

Needless to say, these agreements are implicitly understood as an effort to hedge against a more assertive China. This thinking is clear in the economic sphere also, as the Financial Review today reports that Australia has been quietly increasing tariffs on Chinese steel imports to protect what remains of its own domestic industry even as hopes for the conclusion of a long-awaited trade deal with the EU are rising. The pattern of freer trade for friends and restricted trade elsewhere is a template that is now being repeated globally as the world coalesces into interest blocs with geopolitical hedgerows erected in between. Those hedgerows are not impermeable, but they are growing denser over time.

Finally, while Takaichi’s political star is rising in the east another appears to be setting in the west. British Prime Minister Starmer is scheduled to address the nation today as speculation increases that he will soon be forced out of Number 10 Downing Street. Starmer’s Chief of Staff recently resigned over his role in recommending the appointment of Lord Mandelson as ambassador to the United States, despite his known links to Jeffrey Epstein. 

The decision by his most senior advisor to fall on his sword may buy Starmer some time, but signs of widespread discontent on the backbench compounded by diabolically bad poll results are creating the impression that his days are numbered.

Tyler Durden Mon, 02/09/2026 - 10:40

Tracing The Crypto Market Selloff: Hong Kong Hedge Funds, Or TradFi Cross-Asset Whales?

Via Wu Blockchain,

Market Turmoil Sparks Rumors

In early February 2026, the crypto market saw a sharp correction, with Bitcoin briefly falling to around $60,000, its lowest level since November 2024. The selloff closely coincided with cross-asset deleveraging across traditional financial markets: equities declined markedly, while precious metals also suffered steep losses — silver posted one of its largest single-day declines on record, while gold saw its largest one-day drop since the early 1980s. Analysts broadly attributed the crypto downturn to rising macro uncertainty (such as reports of a more hawkish candidate for Federal Reserve chair) and large ETF outflows.

Against this backdrop, a narrative began circulating on crypto social media suggesting that the violent selloff was not driven purely by macro factors, but instead originated from the blow-up of a large fund forced to liquidate its Bitcoin positions. One line of speculation pointed to a Hong Kong hedge fund active in Bitcoin options trading. Multiple industry participants subsequently joined the discussion, offering both clues and strong skepticism.

Parker’s Hypothesis: Early Bitcoin Long-Term Holders, IBIT, and a Volatility Squeeze

Crypto commentator Parker (@TheOtherParker_) proposed an explanation linking the downturn to changes in how large, long-term Bitcoin holders manage their assets.

He noted that on July 29, 2025, U.S. regulators formally approved in-kind creation and redemption for Bitcoin ETFs, allowing investors to exchange real BTC directly for ETF shares and vice versa. This enabled large holders to move Bitcoin into ETFs (such as iShares Bitcoin Trust, commonly referred to as IBIT) under potentially tax-efficient, near-zero-slippage conditions, thereby gaining access to regulated options markets.

According to Parker, IBIT’s options market rapidly developed into one of the most liquid Bitcoin options venues globally, second only to SPY, QQQ, and SPX index options. This attracted substantial whale activity deploying covered call strategies and volatility-selling on ETF holdings. Throughout the summer of 2025, observers saw large-scale migration by early Bitcoin long-term holders, while realized volatility, implied volatility, and overall trading volume in Bitcoin compressed significantly. In Parker’s view, widespread options writing effectively suppressed market volatility.

This apparent calm was shattered during the October 10, 2025 selloff (“10/10”). Parker speculates that at least one, and possibly multiple, funds selling volatility on IBIT were severely hit when volatility suddenly spiked.

In his scenario, a fund backed by early Bitcoin holders may have been running income strategies on massive IBIT positions. This model had worked until October 10, when the short-volatility exposure was decisively breached, resulting in heavy losses. That initial blow-up may have triggered a chain reaction, especially if the affected funds then spent subsequent months quietly attempting to repair their balance sheets. Parker emphasizes that this remains a hypothesis based on fragmented clues, and that direct evidence is still lacking.

Dovey Wan: No Signs of Hong Kong Funds Blowing Up

Primitive Ventures founding partner Dovey Wan pushed back firmly against the “Hong Kong hedge fund quietly blew up” narrative, offering several key observations from her position inside the Hong Kong fund ecosystem.

First, Hong Kong imposes no capital gains tax, meaning any “tax-loss harvesting” logic driving ETF redemptions or selling is fundamentally U.S.-centric and does not apply locally. Hong Kong funds have no incentive to sell for tax reasons.

Second, she disclosed that her team is currently conducting due diligence on one of Hong Kong’s largest Bitcoin options funds, and based on both recent performance and direct conversations, “there has been nothing abnormal since October 11.” Hong Kong’s crypto investment circle is extremely small and information travels quickly; if a major fund had blown up, it would be nearly impossible to conceal for long. She cited the previous episode involving the Hong Kong market maker Taipingshan linked to 3AC, where the industry knew almost by the second day. As of early February, she had heard no credible information supporting the claim of a Hong Kong fund collapse.

She further noted that many Asian Bitcoin OGs had already moved BTC into structures like IBIT via Galaxy Digital and similar channels well before in-kind redemption was approved. Their motivations were primarily safer custody, lower operational and counterparty risk, easier collateral mobility within TradFi, and cleaner liquidity for rotation into other assets. As such, Asian whales’ use of IBIT is not a recent phenomenon and does not inherently imply financial stress.

Wan also observed that since the second half of 2025, Bitcoin liquidity has increasingly concentrated during U.S. trading hours, especially around the New York open. Recent spot selling has likewise clustered in those windows, which she views as more consistent with ETF redemption flows than a single fund collapse.

Finally, she argued that standard options writing alone is unlikely to cause catastrophic losses for a Bitcoin fund unless it involves naked options or highly leveraged basis trades. Conventional covered strategies are relatively conservative; true blow-ups typically imply excessive leverage or cross-asset margin structures. Therefore, if someone did fail via options, she leans toward it being a TradFi multi-strategy fund with cross-asset margining, rather than a purely crypto-native institution.

Franklin Bi: A Hidden Asian Macro Trader?

Pantera Capital partner Franklin Bi offered another perspective. He speculated that the real distressed party might not be crypto-native at all, but rather a large traditional trading firm based in Asia with some exposure to crypto.

Because such institutions often have few crypto-native counterparties, even severe losses might not immediately surface within crypto circles. He outlined a possible sequence of events: the institution had previously been market-making on platforms such as Binance while maintaining leverage funded by cheap capital (potentially via the JPY carry trade); the rapid appreciation of the yen combined with the October 10 Bitcoin liquidity shock materially damaged its balance sheet, triggering margin stress; the firm may then have received an approximate 90-day reprieve to stabilize; during that period it attempted to recover losses through gold and silver trades, but the recent ~20% single-day collapse in silver alongside gold’s decline worsened its position; ultimately, in early February 2026, it was forced to liquidate remaining crypto holdings, precipitating the concentrated Bitcoin selloff.

Franklin acknowledged this is speculative, but described it as “a reasonable sequence of events.” This framework also explains why the crypto community did not detect it early — the player would not belong to traditional crypto fund networks. Parker additionally pointed out that certain 13F filings show funds with nearly 100% allocation to IBIT, potentially designed to isolate single-trade risk. If one such single-asset fund collapsed, it would fit this profile.

Hard evidence remains absent. Parker noted that the decisive proof would be a Q1 2026 13F filing showing a large fund’s IBIT position dropping to zero, though such disclosures will not be available until mid-May.

Industry Skepticism: The View from Wintermute’s CEO

Wintermute CEO Evgeny Gaevoy expressed strong skepticism toward claims that “someone blew up.” He noted that when large institutions fail, informal industry channels usually surface warnings quickly — as happened with 3AC and FTX, where internal alerts emerged within days. This time, he sees no similar signals, and current rumors originate almost entirely from anonymous accounts.

He also emphasized that unlike the previous cycle, where hidden leverage accumulated via uncollateralized lenders such as Genesis and Celsius, today’s crypto leverage is largely concentrated in exchange perpetual markets, which are more transparent and orderly. Exchanges now employ automatic deleveraging and stricter margin controls, making large collapses harder to conceal.

Gaevoy likewise doubts the existence of FTX-style exchange-level issues, arguing that no institution would replicate that model post-FTX. Moreover, if an entity were in fact insolvent yet publicly denying it, it could face serious legal consequences in the U.S., U.K., EU, or Singapore — significantly reducing the feasibility of prolonged concealment.

In his view, the episode more likely reflects macro pressure combined with the liquidation of highly leveraged traders: “Maybe someone blew up, but there simply aren’t systemic spillover effects worth worrying about.”

Conclusion: The Truth Has Yet to Emerge

The true cause of Bitcoin’s early-February 2026 plunge remains unresolved. Macro factors clearly played a major role, but the persistence of the decline and certain anomalous trading volumes continue to prompt the market to search for more specific triggers.

Two main explanatory paths currently exist.

One centers on early Bitcoin long-term holders selling volatility via ETF structures, suffering outsized losses during the October 10 selloff and being forced into final deleveraging recently.

The other points to TradFi cross-asset strategies failing — spreading from yen carry trades into crypto and precious metals — triggering cascading margin pressure that ultimately manifested as concentrated Bitcoin selling.

As of now, no public filings, official disclosures, or confirmed loss figures substantiate either narrative. Multiple industry participants urge caution, noting that if structural issues truly exist, their impact will eventually surface through internal information channels or upcoming 13F disclosures.

Regardless of the ultimate answer, this episode once again highlights how deeply crypto markets are now intertwined with traditional finance. Shocks need not originate from crypto-native players; macro leverage and cross-asset risk can exert equally material impact on digital assets. Until facts are clarified, speculation remains highly susceptible to amplification.

As many industry voices have repeatedly emphasized, low liquidity combined with high leverage is often a powerful amplifier of market volatility.

That lesson is once again being reinforced by the markets of 2026.

Tyler Durden Mon, 02/09/2026 - 10:05

Key Events This Week: Payrolls, CPI And Retail Sales

The next five days will feature an unusual pairing of major US data releases: the January employment report on Wednesday and the January CPI report on Friday, two reports which usually never appear in the same week. Ahead of those, markets will digest December retail sales and the Q4 employment cost index tomorrow, alongside a heavy schedule of Fed speakers, many of them current voters. Global inflation updates from China (Wednesday) and several European economies will add to the momentum, while the UK’s Q4 GDP (Thursday) will also be released. Corporate earnings remain in full swing, even if six of the Mag-7 have now reported, thus reducing some potential volatility until Nvidia report on February 25th.

For the employment report (which we will preview fully tomorrow), DB economists expect headline and private payrolls to rise by 75k (consensus at +69k and +75k respectively), a modest improvement relative to recent trend rates. If this holds, they anticipate the unemployment rate staying at 4.4%. They also expect average hourly earnings to increase 0.3%, with hours worked unchanged at 34.2, leaving the year over year growth rate of our payroll based nominal compensation proxy drifting up to 4.5% from 4.3%.

This month’s release will include the usual benchmark revisions to the establishment survey, though the population control adjustment to the household survey has been postponed to next month. The preliminary benchmark revision of roughly 0.6% to March 2025 employment was already unusually large, and the BLS is also introducing more frequent updates to the birth death model. While it’s impossible to know exactly how these higher frequency adjustments will influence recent data, even small changes could matter given that January typically shows the largest non seasonally adjusted job losses of the year. The final benchmark revision may also shift again, as it often deviates from the preliminary estimate once updated QCEW data are incorporated. All of this raises the uncertainty around Wednesday’s figures.

Turning to inflation (which we will also preview fully later this week), DB economists expect headline CPI to increase 0.26%, held down by an expected 2.4% drop in motor fuel prices, while core CPI should rise 0.35%. On this basis, headline CPI would slow to 2.46% year over year (from 2.68%), and core to roughly 2.55% (still rounding to 2.6%). The January release will include updated relative importances and new seasonal factors, which could affect individual components and possibly lead to firmer readings when last year’s data are re-examined. This could prompt some Fed officials to reassess the near term path of inflation.

Elsewhere in the data flow, tomorrow’s retail sales report should mirror evidence of solid holiday demand. Economists expect headline sales to rise 0.4%, with ex autos and retail control up 0.4% and 0.5%, respectively. That would leave Q4 retail control growing at a 4.5% annualized pace for the seventh straight quarter above 4%, supporting a firm consumption contribution in the Q4 GDP report due later this month. They also expect a 0.8% rise in the Q4 ECI, bringing the year over year pace down to 3.5%, still above its pre-pandemic average. Thursday’s jobless claims should ease back toward 226k after last week’s weather related spike.

Fed communication will be constant throughout the week. Governor Waller, Governor Miran, and Atlanta’s Bostic speak today, followed by Cleveland’s Hammack and Dallas’s Logan tomorrow. Vice Chair of Supervision Bowman speaks Wednesday, where regulatory topics and the balance sheet outlook may surface. Discussions around balance sheet strategy are gaining attention amid the nomination of Kevin Warsh for Fed Chair, given his previously stated preference for a smaller balance sheet. Logan, Miran, and Kansas City’s Schmid will offer additional views later in the week, including first reactions to the jobs report.

In Europe, economic indicators due include Q4 GDP in the UK on Thursday as well as CPI prints in Denmark, Norway (both tomorrow) and Switzerland (Friday). In geopolitics there will be notable focus on the Munich Security conference to be held Friday through Sunday.  Remember that last year's summit was home to the extraordinary speech by JD Vance which was partly credited as responsible for the huge rearmament drive in Europe.

In Asia, we also have the January inflation reports in China due Wednesday. Our economists forecast producer prices to further rebound to -1.6% YoY from -1.9% in December 2025. In contrast, CPI inflation will likely slow to 0.4% YoY from 0.8% (see more here). Japanese PPI is out on Thursday.

Rounding out with earnings, this week’s lineup features tech names including Cisco, Applied Materials and Shopify as well as US consumer firms Coca-Cola and McDonald’s.

A busy week for European large caps includes results from AstraZeneca, Hermes, Siemens and L’Oreal. Other highlights feature energy firms TotalEnergies and BP as well as Unilever, AB InBev and Ferrari among consumer stocks.

Courtesy of DB, here is a day-by-day calendar of events

Monday February 9

• Data: US January NY Fed 1-yr inflation expectations, Japan January Economy Watchers survey, M2, M3, bank lending, December BoP trade balance and current account balance, labour cash earnings, Norway Q4 GDP
• Central banks: Fed's Waller and Bostic speak, ECB's Lagarde, Nagel and Lane speak, BoE's Mann speaks
• Earnings: UniCredit, DBS, Apollo, ON Semiconductor

Tuesday February 10

• Data: US January NFIB small business optimism, Q4 employment cost index, December retail sales, import price index, export price index, November business inventories, Japan January machine tool orders, Denmark January CPI, Norway January CPI
• Central banks: Fed's Hammack and Logan speak
• Earnings: Coca-Cola, AstraZeneca, Gilead Sciences, S&P Global, Welltower, Spotify, BP, CVS Health, Barclays, Marriott International, Williams, Robinhood, Cloudflare, Ferrari, Ford, Datadog, Kering, Fiserv
• Auctions: US 3-yr Notes ($58bn)

Wednesday February 11

• Data: US January jobs report, federal budget balance, China January CPI, PPI, Japan January PPI, Italy December industrial production, Canada December building permits
• Central banks: ECB's Cipollone and Schnabel speak, BoC Summary of Deliberations
• Earnings: Cisco, McDonald's, T-Mobile US, Shopify, AppLovin, TotalEnergies, Siemens Energy, EssilorLuxottica, NetEase, Equinix, Vertiv, Heineken, Deutsche Boerse, Commerzbank, Dassault Systemes, Kraft Heinz, Humana, Albemarle
• Auctions: US 10-yr Notes ($42bn)

Thursday February 12

• Data: US January existing home sales, initial jobless claims, UK Q4 GDP, January RICS house price balance, Germany December current account balance
• Central banks: ECB's Radev, Lane, Stournaras, Nagel and Cipollone speak, BoC’s Rogers speaks
• Earnings: Applied Materials, Hermes, Siemens, L'Oreal, Arista Networks, SoftBank, Unilever, Anheuser-Busch InBev, British American Tobacco, Vertex, Agnico Eagle Mines, Howmet Aerospace, Airbnb, Vale, Mercedes-Benz, RELX, Zoetis, Adyen, Legrand, Expedia, PG&E, DSM-Firmenich
• Auctions: US 30-yr Bonds ($25bn)

Friday February 13

• Data: US January CPI, China January home prices, Q4 BoP current account balance, Germany January wholesale price index, Eurozone December trade balance, Q4 employment, Switzerland January CPI
• Central banks: Fed's Miran and Logan speak, BoJ's Tamura speaks, BoE's Pill speaks
• Earnings: Safran, NatWest, Cameco, Capgemini, Norsk Hydro, Moderna
• Other: Munich Security Conference (through January 15)

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the retail sales report on Tuesday, the employment report on Wednesday, and the CPI report on Friday. There are several speaking engagements by Fed officials this week, including events with Fed Governors Waller and Miran on Monday and the Fed Vice Chair for Supervision Bowman on Wednesday. 

Monday, February 9 

• No major data releases are scheduled. 
• 01:30 PM Fed Governor Waller Speaks: Fed Governor Christopher Waller will speak on digital assets at an event organized by the Global Independence Center. Q&A is expected. On January 30, Waller said, “I dissented at the most recent meeting of the Federal Open Market Committee (FOMC) after concluding that cutting the policy rate by 25 basis points was the appropriate stance of policy.” He added that the reasons for his dissent are that “the labor market remains weak” and “though inflation is elevated from tariff effects, appropriate monetary policy is to look through these effects as long as inflation expectations are anchored, which they are.”
• 02:30 PM Fed Governor Miran Speaks: Fed Governor Stephen Miran will participate in a moderated conversation at Boston University. Q&A is expected. On January 5, Miran said, “I’m looking for about a point and a half of cuts [in 2026]” because “underlying inflation is running within noise of our target, and that’s a good indication of where overall inflation is going to be in the medium term.”
• 03:15 PM Atlanta Fed President Bostic (FOMC non-voter) Speaks: Atlanta Fed President Raphael Bostic will participate in a moderated conversation with Bill Watts, editor of Pro Farmer. Q&A is expected. On February 2, Bostic said, “We are still too high in inflation, so I think we need to be somewhat restrictive.” He added that “I do feel the downside risk—that a catastrophe is going to happen in employment—is much further away from us than it was even a month ago, and that gives me some confidence we can be patient.”
• 05:00 PM Fed Governor Miran Speaks: Fed Governor Stephen Miran will be interviewed on WBUR Podcast in Boston. Q&A is expected.

Tuesday, February 10 

• 08:30 AM Import price index, December (consensus +0.1%, last flat); Export price index, December (consensus +0.1%, last flat) 
• 08:30 AM Retail sales, December (GS +0.4%, consensus +0.4%, last flat); Retail sales ex-auto, December (GS +0.3%, consensus +0.4%, last +0.4%); Retail sales ex-auto & gas, December (GS +0.4%, consensus +0.4%, last +0.5%); Core retail sales, December (GS +0.3%, consensus +0.5%, last +0.8%): We estimate core retail sales increased 0.3% in December (ex-autos, gasoline, and building materials; month-over-month SA), reflecting solid alternative data but a headwind from potential residual seasonality. We estimate headline retail sales increased 0.4%, reflecting an increase in auto sales but lower gasoline prices.
• 12:00 PM Cleveland Fed President Hammack (FOMC voter) Speaks: Cleveland Fed President Beth Hammack will speak on the banking and economic outlook at the 2026 Ohio Bankers League Economic Summit. Speech text and Q&A are expected. On December 12, Hammack said, “I see rates as right around a neutral level, [and] I would prefer to be on a slightly more restrictive stance to help put more pressure on inflation that remains too high.”
• 01:00 PM Dallas Fed President Logan (FOMC voter) Speaks: Dallas Fed President Lorie Logan will deliver remarks and participate in moderated Q&A at the 2026 Asset Management Derivatives Forum in Austin, Texas. Speech text is expected.

Wednesday, February 11 

• 08:30 AM Nonfarm payroll employment, January (GS +45k, consensus +69k, last +50k); Private payroll employment, January (GS +45k, consensus +75k, last +37k); Average hourly earnings (MoM), January (GS +0.35%, consensus +0.3%, last +0.3%); Unemployment rate, January (GS 4.4%, consensus 4.4%, last 4.4%): We estimate nonfarm payrolls increased 45k in January. On the negative side, we estimate that the birth-death model—which will be updated with this report, more details below—could contribute 30-50k fewer jobs to payroll growth (on a seasonally adjusted basis) than in recent months and big data indicators suggested a modest pace of private sector job growth. Additionally, we expect unchanged government payrolls—reflecting a 10k decline in federal government payrolls that is offset by a 10k increase in state and local government payrolls. On the positive side, the pace of layoffs—a particularly important determinant of net job growth in January—remained subdued. However, the seasonal factors have evolved to expect smaller declines in employment in recent Januarys, limiting the potential boost from this channel. We do not expect a drag from winter Storm Fern, which formed about a week after the reference week. 
  • We estimate that the unemployment rate was unchanged at 4.4% in January, but we see the risks as skewed to a decline: the bar for rounding down to 4.3% is not high from an unrounded 4.38% in December and the January unemployment rate appears to suffer from modestly negative residual seasonality (the unrounded unemployment rate has declined in each of the last three Januarys). We estimate average hourly earnings rose 0.35% month-over-month in January, reflecting positive calendar effects.
  • This month’s report will be accompanied by the annual benchmark revision to the establishment survey and a methodological update to the birth-death model. The BLS's preliminary estimate of the benchmark payrolls revision indicated that cumulative payroll growth between April 2024 and March 2025 would be revised 911k lower. We estimate that the final downward revision will likely be somewhat smaller—in the range of 750-900k—as job growth in the QCEW, which informs the revision, has been revised up since the BLS issued the preliminary estimate. The BLS will also update the net birth-death forecasts in the post-benchmark period (April 2025-December 2025) to incorporate information from the QCEW and the monthly payrolls survey. A downward revision to the post-benchmark period appears likely, reflecting the continued slowdown in the QCEW and weak private payroll growth during the post-benchmark period. Starting with this month’s report, the birth-death model will incorporate current sample information each month. 
• 10:00 AM Kansas City Fed President Schmid (FOMC non-voter) Speaks: Kansas City Fed President Jeff Schmid will speak at the Economic Forum of Albuquerque in Albuquerque, New Mexico. Speech text and Q&A are expected. On January 15, Schmid said, “I believe that there is a risk that lowering rates could do more harm to the inflation side of our mandate than benefit on the employment side.” He added that “I see little reason at this point to further lower the policy rate, though of course, I will be watching the data closely for signs that growth is losing momentum or that the labor market is weakening more substantially.”
• 10:15 AM Fed Vice Chair for Supervision Bowman Speaks: Fed Vice Chair for Supervision Michelle Bowman will participate in a virtual moderated conversation at Keefe, Bruyette & Wood 33rd Annual Winter Financial Services Conference. Q&A is expected. On January 16, Bowman said, “Absent a clear and sustained improvement in labor market conditions, we should remain ready to adjust policy to bring it closer to neutral.” She added that while monetary policy is not on a preset course, "we should also avoid signaling that we will pause without identifying that conditions have changed."
• 04:00 PM Cleveland Fed President Hammack (FOMC voter) Speaks: Cleveland Fed President Beth Hammack will participate in a leadership dialogue at Ohio State University. Q&A is expected.

Thursday, February 12 

• 08:30 AM Initial jobless claims, week ended January 31 (GS 220k, consensus 224k, last 231k); Continuing jobless claims, week ended January 24 (consensus 1,850k, last 1,844k)
• 10:00 AM Existing home sales, January (GS -2.5%, consensus -3.2%, last +5.1%)
• 07:00 PM Dallas Fed President Logan (FOMC voter) Speaks: Dallas Fed President Lorie Logan will give opening and closing remarks at an event with Governor Stephen Miran. Speech text is expected.
• 07:05 PM Fed Governor Miran Speaks: Fed Governor Stephen Miran will participate in a moderated discussion at the Dallas Fed. Q&A is expected.

Friday, February 13 

• 08:30 AM CPI (MoM), January (GS +0.24%, consensus +0.3%, last +0.1%); Core CPI (MoM), January (GS +0.33%, consensus +0.3%, last +0.2%); CPI (YoY), January (GS +2.44%, consensus +2.5%, last +2.7%); Core CPI (YoY), January (GS +2.52%, consensus +2.5%, last +2.6%): We estimate a 0.33% increase in January core CPI (month-over-month SA), which would lower the year-over-year rate by 0.1pp to 2.5% on a rounded basis. Our forecast reflects upward pressure from seasonal distortions on the communications (GS forecast: +0.4%) and private transportation (+1.5%) categories. We expect a modest boost from start of the year price resets in categories like medical care commodities (GS forecast: +0.7%), and upward pressure from tariffs on categories that are particularly exposed (such as recreation) worth +0.07pp. We expect firm travel services inflation (airfares: +2%; hotels: +1%), reflecting signals from alternative price data. We expect softer autos inflation, reflecting a 1.5% decline in used car prices, unchanged new car prices, and a moderate increase in the car insurance category (+0.4%). We forecast a slight slowdown in the shelter categories (rent: +0.24%, OER: +0.25%), reflecting a continued slowdown in their underlying trend. We expect unchanged medical services prices, reflecting a continued decline in medical insurance prices (-0.7%) but increases in other medical care services categories. We estimate a 0.24% rise in headline CPI, reflecting higher food prices (+0.4%) but lower energy prices (-1.3%).
  • In this month’s report, the BLS will release recalculated seasonal factors that reflect the price movements of 2025—which could reduce the impact of seasonal distortions that explained some of the month-to-month variation in core inflation last year—as well as updated weights. The annual seasonal factor revisions tend to cause monthly inflation readings to be revised toward the annual average. In other words, higher inflation readings for the year tend to be revised lower and lower readings tend to be revised higher. On average over the last decade, about 20% of the relative strength of a month’s initial core inflation vintage has been revised away in its first annual revision. Last year, monthly core CPI inflation was particularly elevated in January (23bp above the 2024 average) and particularly low in March-May (8bp below).

Source: Goldman, DB

Tyler Durden Mon, 02/09/2026 - 09:55

Eye On Iran: Pentagon Held Live-Fire War Drills In Persian Gulf

US forces conducted live-fire military drills in the Persian Gulf at a moment of ongoing Washington threats to attack Iran over its nuclear program as well as ballistic missile arsenal. 

"Last week, Navy Sailors from USS Santa Barbara participated in the exercise Killer Tomato, a live-fire maritime gunnery exercise conducted in the Central Command’s area of responsibility and supported by an Air Force A-10 Thunderbolt II aircraft," US Central Command (CENTCOM) posted on X Sunday.

US CENTCOM/Navy's 5th Fleet

It continued, "The exercise provided realistic training to improve surface gunnery proficiency while reinforcing joint air-maritime integration, combat readiness, and deterrence across the region."

It's unclear why the US military only chose to reveal it Sunday, and not in real-time while the drills were actually being conducted. This was perhaps a security measure, to ensure no incidents or run-ins with Iranian forces, after previously an Iranian drone was shot down as it was said to be headed toward US warships.

As for use of the A-10 Thunderbolt, this long in service aircraft would assist in thwarting any small vessel threat or attack against American ships, as it is able to fly very low and take out craft with its powerful machine guns. It conducted low strafing runs as part of these latest Persian Gulf drills.

The futuristic-looking vessel featured in the US Navy's photos is the USS Santa Barbara, described by a defense journal as follows:

The vessel is one of the U.S. Navy’s high-speed, modular Independence-class littoral combat ships, designed for operations in contested coastal waters. USS Santa Barbara is capable of speeds exceeding 40 knots and has a range of around 4,300 nautical miles at cruising speed, allowing it to conduct extended patrols and rapid response missions across the region. It displaces more than 3,100 tonnes at full load and is powered by a combined diesel and gas turbine propulsion system driving four waterjets. It carries a core crew of around 40 personnel, with capacity for additional mission specialists depending on the role assigned.

Central Command's photo set from the war drills...

Last week, @USNavy Sailors from USS Santa Barbara (LCS 32) participated in the @USAFCENT-led exercise Killer Tomato, a live-fire maritime gunnery exercise conducted in the @CENTCOM area or responsibility and supported by @usairforce A-10 Thunderbolt II aircraft. The exercise… pic.twitter.com/esO5BtCMKT

— U.S. Naval Forces Central Command/U.S. 5th Fleet (@US5thFleet) February 8, 2026

Since late January, American and Iranian forces have been holding dueling drills and war games in the region, in an effort to signal military readiness amid a tense showdown.

Ultimately it is Israel that is most alarmed by Iran's missile program, given Tel Aviv was on the direct receiving end during the June war - also said to involve hypersonic missiles sent.

US bases within range of Iranian ballistic missiles.

AFP Infographic with a map showing the range of Iran's main intermediate-range ballistic missiles and the location of major US bases and infrastructure housing American personnel in the Middle East. Ranges are approximate as… pic.twitter.com/ilewg6e2lp

— AFP News Agency (@AFP) February 9, 2026

CENTCOM has recently said that while Iran's military has a "right" to operation professionally in international waters, it must avoid any provocative or harassing behavior involving American vessels or forces. The two enemy sides are one small 'live fire' incident away from potentially sparking major conflict.

Tyler Durden Mon, 02/09/2026 - 09:45

Democrats Flip-Flop On ICE Agents And Body Cameras

Last week, Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries sent a letter to Republican leadership calling for sweeping reforms at the Department of Homeland Security before funding expires on Feb. 13. The letter outlined ten "guardrails" for DHS, including the demand that ICE agents wear body cameras when interacting with the public. 

REUTERS/Shannon Stapleton

While most of the demands on Schumer’s and Jeffries’ list were never going to be agreed to, the use of body cameras by ICE agents has bipartisan support. Even President Donald has voiced support for body cameras, pointing out that they “generally tend to be good for law enforcement because people can't lie about what's happening.”

.@POTUS on body cams: "They generally tend to be good for law enforcement because people can't lie about what's happening." https://t.co/LbAeV4YXdL pic.twitter.com/Hy7wBg8dFp

— Rapid Response 47 (@RapidResponse47) February 2, 2026

Days later, Democrats reversed course after left-wing privacy advocates raised “concerns” about body cameras becoming a mass surveillance tool. Democrats now fear the technology could feed video of protesters into facial recognition systems, allowing ICE to identify and track demonstrators. 

“Obviously, we want them to be wearing body cameras, but we would want restrictions placed on what that information could be used for,” Sen. Ed Markey (D-Mass.) said. “We want to make sure that we have the accountability for how these officers conduct themselves on the streets of our country, but we don't want it in turn to be used as a way of coming back and suppressing free speech."

Lawmakers and activists have accused ICE of using various cameras to surveil protesters by running images through license plate readers and facial recognition systems, and Democrats are now claiming they believe body cameras could serve the same purpose. DHS said its body cameras are not equipped with facial recognition. Democrats fear the images could be downloaded and later run through facial recognition.

Republicans had already agreed to provide more funding for ICE body cameras before Democrats began pushing for limits on how the images are used. The homeland security bill that passed the House last week included $20 million for equipping immigration enforcement personnel with body cameras. Homeland Security Secretary Kristi Noem announced on Feb. 3 that all federal agents deployed to Minneapolis would immediately be equipped with body cameras. She said the program would expand nationwide as funding becomes available.

The reversal raises questions about whether Democrats are genuinely concerned about protester privacy or worried that body camera footage will protect ICE agents from false accusations. 

Lora Ries, director of the Border Security and Immigration Center at The Heritage Foundation, explained how wearing body cameras could shield agents from misconduct claims. "Defund ICE is the same movement and has the same funders and organizers as the 'defund the police' movement," Ries told The Daily Signal. "Just as bodycams have helped police defend against false claims made by rent-a-rioters, so too will bodycams help ICE defend against false claims made to obstruct ICE and prevent deportations to protect the Left's political power.”

Video recorded by an ICE agent on his phone when he fatally shot Renee Nicole Good in Minneapolis not only showed Good striking the agent with her car before she was shot, but also gave critical context of the events before the shooting that debunked several left-wing narratives about what happened. Democrats claimed that Good was just a scared mom who accidentally ended up in the middle of an ICE operation and was merely trying to leave the scene. The footage proved she was there to obstruct the operation. The agent’s phone footage also showed Good’s wife yelling at her to drive her car before striking the agent.

Democrats went from demanding body cameras for accountability and transparency to proposing legislation that would limit their use within days. The shift suggests Democrats may have realized that body camera footage could work in favor of ICE agents rather than against them. Video evidence from encounters like the Good shooting has already shown that footage can exonerate officers and contradict activist narratives. 

If body cameras protect agents from false claims, as Ries suggested, the technology undermines the broader effort to obstruct immigration enforcement operations. That possibility may explain why Democrats are suddenly claiming concern about surveillance and privacy, concerns that were notably absent when they first demanded the cameras.

Tyler Durden Mon, 02/09/2026 - 09:05

GLP-1 Feud: HIMS Fires Back At Novo Nordisk, Slams Lawsuit As "Blatant Attack" By Big Pharma

Update (0859ET):

Hims & Hers Health fired back at Novo Nordisk's lawsuit on X, calling it a "blatant attack by a Danish company on millions of Americans" who depend on compounded medications to access personalized care.

HIMS continued:

Once again, Big Pharma is weaponizing the US judicial system to limit consumer choice. This lawsuit attacks more than just one medication or company – it directly assaults a well-established, vital component of US pharmacy practice that has improved patient care for everything from obesity to infertility to cancer. Hims & Hers has a long history of providing safe access to personalized healthcare to millions of Americans, and we will continue to fight to provide choice, affordability, and access.

Novo Nordisk’s lawsuit is a blatant attack by a Danish company on millions of Americans who rely on compounded medications for access to personalized care. Once again, Big Pharma is weaponizing the US judicial system to limit consumer choice. This lawsuit attacks more than just…

— Hims & Hers Comms (@HimsHersComms) February 9, 2026

Shares of HIMS crashed in New York premarket trading, down about 20%, after the telehealth firm pulled its Wegovy copycat GLP-1 pill on Saturday. Novo hit the HIMS with a lawsuit earlier this morning.

*   *   * 

The GLP-1 feud between Hims & Hers Health and Novo Nordisk keeps accelerating by the day.

HIMS rejected again trying to make a criminal racket into a business model https://t.co/URBLu257l8

— zerohedge (@zerohedge) February 6, 2026

The latest is that Novo is now taking legal action against HIMS, alleging that the telehealth firm "unlawfully mass markets unapproved versions of Novo Nordisk's FDA-approved semaglutide medicines, deceiving patients and putting their health at risk."

In late January, Novo released a $149 per month Wegovy pill, with HIMS just days later releasing a GLP-1 copycat pill of Wegovy for $49 a month.

By late last week, FDA Commissioner Marty Makary warned against companies "mass-marketing illegal copycat drugs, claiming they are similar to FDA-approved products."

FDA will take swift action against companies mass-marketing illegal copycat drugs, claiming they are similar to FDA-approved products.

The FDA cannot verify the quality, safety, or effectiveness of non-approved drugs.

— Dr. Marty Makary (@DrMakaryFDA) February 5, 2026

Then, on Saturday, not even a day after Makary's comments, HIMS pulled the GLP-1 copycat pill ...

*HIMS & HERS TO STOP OFFERING WEIGHT LOSS PILL https://t.co/tiQoqBHf0K

— zerohedge (@zerohedge) February 7, 2026

Back to Novo's lawsuit.

Here are the three takeaways:

• Hims & Hers unlawfully mass markets unapproved versions of Novo Nordisk's FDA-approved semaglutide medicines, deceiving patients and putting their health at risk

• Novo Nordisk takes decisive legal action to stop Hims' illegal conduct, protect public health, and defend the scientific innovations that deliver better health outcomes to Americans living with serious chronic diseases like obesity and diabetes

• Novo Nordisk is asking the court to permanently ban Hims from selling unapproved, compounded drugs that infringe our patents, and is seeking to recover damages

"Hims & Hers is mass marketing unapproved knock-off versions of Wegovy and Ozempic that evade the FDA's gold standard review process – that's dangerous and deceptive to patients, and undermines the scientific innovation and regulatory rigor in place to ensure these treatments are safe and effective," John F. Kuckelman, senior vice president, Group General Counsel, Global Legal, IP and Security, wrote in a statement.

Kuckelman noted, "We've taken legal action to protect the American public and our intellectual property and will continue to work with regulators, law enforcement, and other key stakeholders to ensure patients have access to FDA-approved safe and effective medicines."

In markets, HIMS shares fell 20% in New York premarket trading after its GLP-1 copycat pill was pulled, with additional pressure from Novo's lawsuit.

On the other hand, Novo Shares in Denmark moved up 7%. Shares were beaten down last week amid a dismal full-year earnings outlook and HIMS' GLP-1 copycat pill.

Here's our coverage on the HIMS-Novo feud:

• "Much-Needed Win": Novo Shares Jump Most In Nearly Two Years After US Approval Of Wegovy Obesity Pill

• "Big Miss": Wall Street Disappointed After Dismal Novo Nordisk GLP-1 Sales Outlook, Shares Plunge

• $49 Wegovy Copycat Pill Sparks Selloff In Novo Shares

• HIMS Halts Copycat GLP-1 Pill After FDA Warns Of "Swift Action"

Citi analyst Daniel Grosslight told clients that the FDA's crackdown on HIMS' "aggressive compounding practices" suggests there could be further downside if the FDA "completely eliminates or severely curtails" HIMS' ability to compound GLP-1s. He rates the stock "Sell" and slashed his price target to $16.50 from $30.

Tyler Durden Mon, 02/09/2026 - 08:59

Futures Flat, Erase Overnight Losses As Nervous Traders Brace For Key Week

S&P futures are unchanged, erasing all overnight losses, extending last week’s choppy price action focused on AI repercussions; Nasdaq 100 futures underperform slightly ahead of an important week that has both the January jobs and CPI report on deck (at least the firehose of earnings is slowing down). As of 8:15am ET, S&P futures are unchanged, and Nasdaq futures dip 0.2% with tech the biggest laggard as Semis come back under pressure and Mag7 names are all weaker.  The yield on 10-year Treasuries rose three basis points to 4.24% after BBG reported that China tells state and local banks to limit/reduce Treasury exposure (does not affect Federal holdings) which according to JPM may raise risk of a "Sell America" trade esp with Japan / APAC poised to rip in the near-term. The dollar dipped 0.3%, supporting gold and silver. Bitcoin slipped below $69,000. Commodities are big with precious metals and gasoline the upside standouts. Today’s macro data focus is on the NY Fed’s inflation expectations release.

In premarket trading, Mag 7 stocks are mixed (Microsoft +0.6%, Amazon +0.03%, Meta -0.1%, Tesla -0.1%, Alphabet -0.3%, Apple -0.1%, Nvidia -0.9%)

• Cleveland-Cliffs (CLF) falls 3% after fourth-quarter adjusted Ebitda from the steel company missed the average analyst estimate.
• Eli Lilly (LLY) rises 1% after agreeing to buy US biotech Orna Therapeutics Inc. for up to $2.4 billion in cash.
• Hims & Hers Health (HIMS) tumbles 20% after the telehealth company said it will stop selling its recently launched copycat version of the new Wegovy weight-loss pill.
• Kroger Co. (KR) is up 5% as the supermarket chain named Greg Foran as its chief executive officer. Foran led Walmart US for six years
• Kyndryl Holdings (KD) sinks 40% after the information-technology services company spun off from IBM reported adjusted earnings per share for the third quarter that missed the average analyst estimate.
• Li Auto’s ADRs (LI) fall 3% after JPMorgan downgraded the stock to underweight on a view that new EV models from five other carmakers are likely to pressure the Chinese auto firm’s sales this year.
• Monday.com (MNDY) slumps 14% after the software company forecast revenue for the first quarter; the guidance missed the average analyst estimate.
• SoFi Technologies (SOFI) gains 3% as Citizens upgrades the online personal finance company to market outperform.
• Tegna Inc. (TGNA) rises 9% after President Donald Trump backed television broadcaster Nexstar Media Group’s proposed $3.5 billion acquisition of the company.

In corporate news, Nvidia-backed Firmus Technologies secured a $10-billion loan from a group including Blackstone-led funds to boost its data center rollout. 

Stock futures are jittery after last week's nosebleeding volatility while Treasuries fell after Chinese regulators urged banks to limit their holdings. It’s a big week for eco data, with delayed January releases for payrolls on Wednesday and CPI due Friday. Stocks will remain choppy, according to Goldman Sachs’ trading desk, with systematic strategies expected to be net sellers. A renewed decline could trigger about $33 billion of selling this week, they said, although that will likely be more than offset by a huge short squeeze after last week saw record short selling of single stocks.

“These moves also make people say, ‘Let me be a little bit more cautious than I had been” and wait for a better opportunity,” said Keith Lerner, chief investment officer at Truist Advisory Services.

The AI debate continues, with Deutsche Bank strategists noting significant rotation out of tech, while Morgan Stanley’s Mike Wilson sees opportunity in enablers and adopters.  Tech stocks had been caught up in a rout due to worries over the billions of dollars being spent on AI. The release of a new automation tool from Anthropic PBC added to the pressure, as investors ditched stocks seen as vulnerable to AI disruption. 

“Expect swings to continue until we have clearer visibility on the AI monetization, as well as the Fed’s rate path,” said Desmond Tjiang, chief investment officer for equities and multi-asset investment at BEA Union Investment. 

The employment report this week is predicted to show payrolls rose 69k in January, which would be the best in four months. The report will also include an annual revision to the jobs count, which is expected to reveal a notable markdown to payrolls growth in the year through March 2025. CPI may be lukewarm due to prices of cars and medical commodities offsetting a spike in other core goods.

While the US is winning the AI race, “its markets are footing the bill,” write Bloomberg Intelligence strategists Gillian Wolff and Michael Casper. After recent volatility, US tech valuation premiums have narrowed to around 23% versus China and Taiwan tech. After a challenging week for stocks, with rising performance dispersion and single-stock volatility, global equity markets look primed for short-term consolidation, according to strategists at Citi.

In geopolitics, Iran’s President described US nuclear talks as a “step forward.” Bessent cited Chinese traders as a reason behind last week’s wild swings in the gold market. Japanese equities surged to fresh record highs on Monday after PM Sanae Takaichi’s party achieved a landslide victory.

Apollo, Becton Dickinson and Waters are among companies scheduled to report before the market open. Apollo’s AUM are likely to expand 25%, the most since 1Q 2021, helped by continued inflows growth. Earnings from Arch Capital and ON Semi are due later in the day.

The Stoxx 600 is up 0.2% as European stocks rise on Monday, lifted by Novo Nordisk A/S shares after a US competitor scrapped a copycat Wegovy weight-loss pill. Travel and leisure as well as banking shares outperform, while the personal care and retail sectors lag. Here are some of the biggest movers on Monday: 

• InPost shares jump as much as 14% after Advent, FedEx, A&R and PPF announced plans for a €15.60 share buyout.
• Novo Nordisk shares surge as much as 8.6%, reversing some of last week’s plunge, after Hims & Hers Health Inc. pulled a copycat version of the new Wegovy weight-loss pill.
• STMicro shares rise as much as 7% after Amazon deepened its ties with the Franco-Italian chipmaker to secure semiconductor technologies for its data centers.
• Plus500 shares rise as much as 7.1% to a record high as the trading platform says its performance in FY26 is likely to be better than the market expects.
• UniCredit shares gain as much as 6.5% after the Italian lender reported fourth-quarter net income that beat estimates, and said it plans to return about €50b to investors in next five years.
• Coor Service Management shares rise as much as 14% in Stockholm, the steepest gain since December 2015, after newspaper Dagens Industri reports that six new owners have simultaneously built up almost identical holdings in the Swedish company.
• DSM-Firmenich shares fall as much as 5.7% after the firm agreed to sell its animal nutrition and health business to CVC Capital Partners at a lower valuation than some analysts expected.
• NatWest shares fall as much as 5.6% as the UK lender says no further buybacks are likely before 1H 2027 results after it agrees to buy wealth manager Evelyn Partners for an enterprise value of £2.7 billion.
• Greggs shares drop as much as 6% after Jefferies downgraded the bakery chain to hold, noting that the uptake of weight-loss drugs was a headwind to the earnings outlook.
• Ayvens shares fall as much as 3.7% after Oddo BHF cuts the French vehicle rental firm to neutral from outperform over a reset of used car sales results.
• Eramet shares fell as much as 6.3% after the Financial Times reported that the French company suspended CFO Abel Martins-Alexandre last week, days after the board announced it had terminated the mandate of CEO Paulo Castellari.

Earier in the session, Asian stocks gained, as Japanese stocks rallied to a record and South Korea led a wider surge in technology shares.
The MSCI Asia Pacific Index rose as much as 2.5% to a fresh high, with Japanese stocks leading gains after Prime Minister Sanae Takaichi’s ruling party achieved the biggest post-war victory for a single party in a general election. Korean stocks also surged by more than 4% following report that Samsung Electronics will start mass production of HBM4 chips after the Lunar New Year holiday. Stocks also traded higher in Taiwan, China and Hong Kong. The renewed optimism comes as a relief after Asia’s benchmark index posted its first weekly loss in seven. Meanwhile in Japan, Takaichi’s win is expected to benefit sectors including AI, semiconductors and defense on her expansionary fiscal policies. The yen strengthened away from levels seen as a danger zone for intervention. In Thailand, stocks surged as much as 4% to the highest levels since December 2024 after an election win by the ruling party paved the way for more policy clarity. Stocks also gained in India, Indonesia and Malaysia.

The ruling Liberal Democratic Party’s “historic victory gives Prime Minister Takaichi a stable majority, reducing coalition constraints and enabling decisive action on fiscal stimulus, AI, semiconductors, energy security, and strategic reforms,” said Marc Jocum, senior investment strategist at Global X Management. “Markets now have a clear fiscal policy runway through 2028 until the next election.”

In FX, the yen is gaining against the greenback in the wake of Japanese PM Sanae Takaichi’s election victory. Expect this kneejerk reversal, which may have had some help from local authorities to unwind soon. The Bloomberg Dollar Spot index is down 0.2%. While the pound has picked up, it remains near the bottom of the G-10 pile amid a UK political risk premium. This is also being seen in other UK assets with gilts down 35 ticks versus losses of 13 ticks for bunds.

In rates, treasuries are mixed, tracking a curve-steepening gilt selloff following the resignation of a second senior aide to Prime Minister Keir Starmer.US long-end yields are 2bp-3bp higher on the day with shorter maturities little changed, widening 2s10s and 5s30s spreads by about 2bp, triggered by a Bloomberg report noting that China directed banks to limit holdings of US Treasuries. The bond market is also trying to figure out what a Warsh-led Fed will mean, particularly his call for a new accord with the Treasury Department. UK long-end tenors are about 3bp cheaper on the day, steepening its 2s10s curve by 3bp. The delayed January jobs report is ahead on Wednesday and quarterly new-issue auctions start Tuesday.  Treasury coupon auctions resume Tuesday with 3-year notes, followed by 10- and 30-year new issues, totaling $125 billion.

“There is no credible alternative as a global reserve asset at present,” said Geoff Yu, senior macro strategist at BNY. “Our holdings data indicates 72% of global sovereign bond allocations are in US Treasuries, with the euro zone at 11%. There is no comparison.”

Meanwhile, the Treasury is due to offer a combined $125 billion in three-, five- and 10-year debt.
 

“At least two cuts this year, maybe three cuts. Given the easing that we’ve already seen, I think the US economy probably will accelerate this year,” Paul Jackson, global market strategist at Invesco, told Bloomberg TV.

In commodities, precious metals are higher but off best levels with gold and silver showing respective gains of 0.9% and 2.7%. WTI crude futures have picked up throughout the European session, gaining 0.3%. Bitcoin is down 2.5% with selling picking up after slipping below the $70,000 level.  

US economic calendar includes January New York Fed 1-year inflation expectations at 11am. Ahead this week are December retail sales and January employment and CPI.Fed speaker slate includes Waller (1:30pm), Miran (2:30pm, 5pm) and Bostic (3:15pm)

Market Snapshot 

• S&P 500 mini -0.1%,
• Nasdaq 100 mini -0.2%,
• Russell 2000 mini -0.1%
• Stoxx Europe 600 little changed,
• DAX little changed, CAC 40 -0.1%
• 10-year Treasury yield +3 basis points at 4.24%
• VIX +0.8 points at 18.52
• Bloomberg Dollar Index -0.1% at 1189.33
• euro +0.3% at $1.1856
• WTI crude little changed at $63.56/barrel

Top Overnight News

• Democrats won’t pass the remaining DHS funding unless their demands to reform ICE are met, House Minority Leader Hakeem Jeffries told CNN. BBG
• Kevin Warsh’s call for a new Fed-Treasury accord has stirred debate in the $30 trillion bond market, raising concerns over central bank independence and potential market volatility. BBG
• Chinese regulators have advised financial institutions to rein in their holdings of US Treasuries, citing concerns over concentration risks and market volatility. BBG
• Japanese stocks swept to all-time peaks while super-long bonds quickly reversed early weakness in an apparent vote of confidence in Prime Minister Sanae Takaichi's "responsible, proactive" fiscal policy. BBG
• Treasury Secretary Scott Bessent cited Chinese traders as a reason behind last week’s wild swings in the gold market. He said “They’re having to tighten margin requirements. So gold looks to me kind of like a classical, speculative blowoff.” Bessent expects the Federal Reserve to move cautiously in any effort to trim its balance sheet, and to take at least a year to decide what to do. RTRS
• Thailand’s ruling party clinched a surprise election win over the pro-democracy People’s Party. PM Anutin Charnvirakul’s victory marks the first this century for a party aligned with the royalist establishment. Thai stocks and currency rose. BBG
• UK PM Keir Starmer is battling to save his premiership after the dramatic resignation on Sunday of his most trusted aide Morgan McSweeney, as Labour MPs and officials warn that his job is still in grave peril. FT
• The ECB’s Gediminas Simkus said there’s an equal chance that policymakers’ next move will be to raise or lower borrowing costs. BBG
• Big Tech’s AI push and data center building being financed by some of the world’s biggest companies in the AI boom is becoming one of the most momentous capital efforts in US history (as a percentage of GDP). It’s bigger than the railroad expansion of the 1850s, the Apollo space program that put astronauts on the moon in the 1960s and the decadeslong build-out of the U.S. interstate highway system that ended in the 1970s. WSJ
• Trump posted "Record Stock Market, and National Security, driven by our Great TARIFFS. I am predicting 100,000 on the DOW by the end of my Term. REMEMBER, TRUMP WAS RIGHT ABOUT EVERYTHING! I hope the United States Supreme Court is watching".

Trade/Tariffs

• Indian imports of Russian oil could nearly halve following the White House order, Bloomberg reported citing sources. Within the order, it stated that India has committed to stop directly or indirectly importing Russian oil or import tariffs will be raised.
• South Korea’s legislature approves creation of special US investment committee.
• Australia has imposed 10% tariffs on China's steel ceiling frames, following an investigation by the nation’s Anti-Dumping Commission, according to Bloomberg.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks began the week higher after last Friday's rally on Wall St, where the DJIA topped the 50k level for the first time, while the Nikkei 225 also hit a fresh record high after PM Takaichi's landslide election victory and supermajority. ASX 200 rallied with all sectors in the green and the advances being led by broad strength in tech, real estate, miners, materials and resources. Nikkei 225 rose to fresh record highs above the 57,000 level after the Japanese PM Takaichi's LDP won a supermajority in the lower house election, which would allow it to override the upper house in legislation, while the decisive win paves the way for the government to proc eed with further stimulus and a sales tax cut. Hang Seng and Shanghai Comp conformed to the widespread upbeat mood across the region, while it was also reported late last week that China's Cabinet studied measures to promote effective investment and pledged to boost support for private investment.

Top Asian News

• Japan's PM Takaichi said that she has received strong mandate for her policies, following the election. Confirms a swift restart of of parliamentary session. Discussions on refundable tax credit will commence. Will not resort to debt to fund the suspension of food sales tax. Will summit bill to establish national information and committee on foreign investment in the next parliament. Want to pursue a coalition expansion with the DPP if they are keen to do so. Want to lay out interim finding at cross-party meeting on food sales tax suspension by around summer this year. Closely watching market moves, including FX.
• Japanese PM Takaichi said the potential of our alliance with the US is limitless and she is sincerely grateful to US President Trump for his warm words.
• US President Trump congratulates Japanese PM Takaichi and her coalition on a landslide election victory.
• Japanese Finance Minister Katayama said will not comment on FX levels, but noted that recent yen moves are somewhat rapid and one-sided.
• Hong Kong court sentences media tycoon Jimmy Lai to 20 years in jail.
• Japan's top currency diplomat Mimura said closely watching FX moves with a high urgency.

European bourses (STOXX 600 +0.2%) are firmer across the board, as strength across APAC equities filters through into Europe. European sectors hold a positive bias. Travel & Leisure leads, followed closely by Healthcare and Banks whilst Optimised Personal Care and Retail lags. Healthcare is buoyed by gains in Novo Nordisk (+8.3%), which benefits after Hims & Hers said it will stop selling a copycat version of Novo Nordisk’s Wegovy weight-loss pill two days after launch.

Top European News

• Norwegian GDP Growth Rate YoY (Q4) Y/Y 2.2% (Prev. 2.1%).
• Norwegian PPI YoY (Jan) Y/Y -7.8% (Prev. -11.4%).
• Norwegian GDP Growth Mainland QoQ (Q4) Q/Q 0.4% vs. Exp. 0.4% (Prev. 0.1%).
• Norwegian GDP Growth Rate QoQ (Q4) Q/Q -0.3% (Prev. 1.1%).

FX

• DXY is on the backfoot and trades at the bottom end of a 97.33-97.76 range; further pressure could see a test of last week’s trough at 97.00. Much of the pressure this morning can be associated with JPY strength (post-election, discussed below) and following a Bloomberg report which noted that China is urging banks to curb US Treasuries exposure amid market risk – whilst this piece pertains to USTs, it renews fears of a “sell America” theme. US data is lacking for the remainder of the day, so focus will be on Fed speak via Waller, Miran and Bostic. Note: Waller is to discuss “digital assets”, markets know what they expect from arch-dove Miran, and Bostic is set to retire. The docket picks up later in the week, where markets will await US NFP (Wed) and then CPI (Fri); as a reminder, recent jobs metrics have been pointing towards a weakening of the labour market.
• JPY is amongst the outperformers this morning. USD/JPY initially gapped higher at the open (157.47), edged lower a few moments later, before reversing back to highs of 157.65. Since, the JPY has been strengthening vs the USD, potentially on a) high expectations of an LDP victory, b) higher JGB yields, c) jaw-boning via Finance Minister Katayama, d) political stability, e) odds of a BoJ hike in April rising to circa. 60% (prev. 54%). For the latter, analysts at Barclays believe that LDP’s landslide victory may allow the BoJ to proceed with normalisation “somewhat” faster. As such, the bank brought forward its expectations of a 25bps hike to April (prev. saw July), and increased its terminal forecast to 1.5% (prev. 1.25%). This morning, PM Takaichi has provided commentary, has reiterated her vows of fiscal stability, noting that she “will not resort to debt to fund the suspension of food sales tax” – another factor which is likely helping the strength in the JPY this morning. [More details can be found on the Newsquawk headline feed at 07:40GMT/02:40ET]
• G10s are broadly stronger against the USD, with JPY, AUD, EUR, and CHF all firmer by around 0.5%. GBP is the laggard this morning, as domestic political woes remain for the PM. On Sunday, Chief of Staff McSweeney resigned from his role following the Mandelson scandal. Irrespective of this, risks remain, as members of the Cabinet are potentially set to call for the PM to resign, and if he doesn’t, they will possibly step down themselves.

Fixed Income

• JGBs gapped lower by 30 ticks from 131.42 to 131.12 at the open, and then continued to trundle lower to a 131.10 trough; there was then a brief bounce overnight, before gradually declining back to the APAC low. Action today can be characterised by concern around potential increased spending and fiscal instability fears, but overall, the response to Takaichi's LDP securing a super majority has been within recent levels - see the 07:40GMT post for more details and next steps.
• USTs are lower, given the above initially. More recently, pressure is a function of a Bloomberg report that China has urged banks to diversify exposure to US Treasuries amid heightened market risk, guidance that reportedly does not apply to state holdings. A report that pushed USTs to a 111-26 low. Fed speak ahead, though the individuals scheduled are, on face value, not particularly interesting. Reminder, the week ahead has NFP on Wednesday and CPI on Friday.
• Bunds followed the above. Interestingly, while they were initially hit by the Bloomberg report, the benchmark bounced off a 128.03 trough in short order. As the report is, potentially, a net-positive for EGBs long-term, as Chinese banks have to reposition their holdings.
• Gilts hit on the ongoing Mandelson/McSweeney fallout. In brief, while McSweeney has resigned, the pressure around Starmer hasn't abated. Action that saw Gilts gap lower by 42 ticks before slipping another two to a 90.21 base. Since, the benchmark has rebounded by around 30 ticks, but remains in the red by some 10 ticks. The Spectator highlights that some ministers are concerned that Starmer could stand down at any moment. More likely, we could see Cabinet Ministers, privately initially and then possibly publicly, call for the PM to resign, and then they themselves may resign from Starmer's cabinet if he does not comply.
• China is reportedly urging banks to curb US Treasuries exposure amid market risk, Bloomberg reported citing sources; guidance does not apply to China's state holdings of US Treasuries.

Commodities

• WTI and Brent gapped lower but then traded with an upward bias as the morning progressed, to currently trade flat; Brent now trading around USD 68.20/bbl, with a recent bid higher led reports that Qatar is pushing the start of its LNG expansion to the end of 2026. US-Iran meetings last week lacked a material outcome, with the pair agreeing to further talks. For the next meeting, the Trump administration has told Iran to arrive with meaningful substance, following the "good meeting" on Friday.
• Precious metals have continued Friday's rebound, with spot gold regaining the USD 5k/oz handle. Over the weekend, the PBoC announced its 15th straight month of gold buying, which reinforces the key structural driver of major central bank buying of the gold bullion. The dollar has also weakened at the start of the European session, weighed on by the Bloomberg report that China is urging banks to limit USTs exposure. Silver has gradually bid higher as European trade continues, returning back above USD 80/oz and briefly topping above USD 82/oz.
• 3M LME Copper gapped higher but trades muted in a USD 13.02k-13.14k/t band, heading into the Chinese New Year celebrations.
• US Energy Secretary Wright intends to visit Venezuela soon to discuss the future of PDVSA, Politico reported; focussed on improving the management of the Co. Expects Venezuela to hold elections in 18-24 months.
• Vitol Group forecasts peak oil demand to be pushed back to the mid-2030s, with peak demand reaching around 112mln bpd.
• New Zealand energy minister said has shortlisted proposals related to building a first LNG import plant and facility could be operational by 2027 or early 2028.
• Qatar reportedly pushes the start of its LNG expansion to the end of 2026.

Central Banks

• ECB's Kocher said that inflation expectations are fully anchored and FX movements are factored in; Europe must prepare for a greater financial safe haven role. Policy is appropriate and it would require a change in the environment to change current policy stance.
• ECB's Simkus said there's a 50/50 chance that their next move is a hike or cut; rates are at neutral level with growth near potential. Economic environment is fragile.

Geopolitics: Ukraine

• Indian imports of Russian oil could nearly halve following the White House order, Bloomberg reported citing sources. Within the order, it stated that India has committed to stop directly or indirectly importing Russian oil or import tariffs will be raised.
• Russia’s FSB said an attempted assassination of General Alexeyev was ordered by Ukraine with Poland’s participation, according to Interfax.
• US reportedly aims for a March peace deal in Ukraine, followed by quick elections, according to reported.

Geopolitics: Middle East

• Iran's advisor to Supreme Leader is to visit Oman on Tuesday, Tasnim reported.
• Iranian Parliament Speaker said they discussed defence and security in a secret session.

CRYPTO

• Bitcoin is on the backfoot and trades around USD 69k, whilst Ethereum remains just above the USD 2k mark.

US Event Calendar

 

DB's Jim Reid concludes the overnight wrap

 

 

 

 

 

Tyler Durden Mon, 02/09/2026 - 08:34

My back-to-work morning train WFH reads:

• You’ve Never Seen Super Bowl Betting Like This Before: Prediction markets are turbocharging America’s obsession with sports gambling. (The Atlantic)

• The Coming Crypto Apocalypse. The future of money and payments will feature gradual evolution, not the revolution that crypto-grifters promised. Bitcoin and other cryptocurrencies’ latest plunge further underscores the highly volatile nature of this pseudo-asset class; one only hopes that policymakers will wake up to the risks before it’s too late. (Nouriel Roubini)

• Who is America’s Largest Landowner? The Land Report 100 Research Team analyzes transactions and scours records to determine America’s leading landowners. That’s how we broke the news in 2020 that Microsoft co-founder Bill Gates was America’s largest farmland owner with more than 260,000 acres. That’s how we identified Shanda Investment Group founder Tianqiao Chen as the owner of almost 200,000 acres of Oregon timberland in 2024. It’s one of the many reasons why news organizations worldwide rely on the Magazine of the American Landowner to understand this asset class. (Land Report)

• Is It Really a Good Sign When Executives Buy Their Own Stock? We Ran the Numbers: We looked at 1,400 insider purchases over the past five years to find out whether they give share prices a boost. (Wall Street Journal)

• AI ‘slop’ is transforming social media – and a backlash is brewing. “I would say AI slop increases the brain rot effect, making people quickly consume content that they know is not only unlikely to be real, but probably not meaningful or interesting,” he says. (BBC) see also The AI Trade Is Entering a New Era of Skepticism: A selloff in software and data analytics stocks reveals growing fears AI tools could cannibalize established industries. Stock Market Survives AI Panic, Even as Tech Collapses. It’s a Monster of Our Own Making. (Barron’s)

• How the Capitalists Broke Capitalism: In a financialized economy, businesses become mere sources of cash, assets to be manipulated and then operated for maximum investor returns. Workers become just another cost, like lumber. Customers are just revenue streams to be tapped. (New York Times)

• The Economic Costs of Brexit on the UK. Ten years on, the economic cost of Brexit has been larger than analysts predicted and that prolonged policy uncertainty contributed importantly to the magnitude of the impact. Understanding the ways in which Brexit resulted in a drag on economic growth for the United Kingdom provides potential lessons about the costs of abruptly pulling back from the global economy for other countries. (Econofact)

• FBI Couldn’t Get into WaPo Reporter’s iPhone Because It Had Lockdown Mode Enabled: Lockdown Mode is a sometimes overlooked feature of Apple devices that broadly make them harder to hack. A court record indicates the feature might be effective at stopping third parties unlocking someone’s device. At least for now. (404 Media)

• People’s Choice: Wildlife Photographer of the Year 2026: Organizers of the Wildlife Photographer of the Year contest are inviting the public to vote for their favorite images from this year’s competition. (The Atlantic)

• Efforts to Ground Physics in Math Are Opening the Secrets of Time: By proving how individual molecules create the complex motion of fluids, three mathematicians have illuminated why time can’t flow in reverse. (Wired)

Be sure to check out our Masters in Business interview  this weekend with Bob Moser, CEO and founder of Prime Group Holdings, a private investor in unique real estate holdings. They created Prime Storage, one of the largest, privately-held self-storage brands in the world, with over 19 million rentable square feet of space and 255 locations across 28 states and the U.S. Virgin Islands. The firm has acquired over $10 billion in real estate assets.

 

Software relative to the S&P 500 is a particularly brutal chart … essentially 6 years of relative gains wiped out

Source: @KevRGordon

 

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