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Today's Summary

The bond market is (so far) unconvinced. Nearly half of investors plan to increase exposure to hedge funds, Goldman Sachs survey finds. The idea that ISIS was created by the CIA and “MI6” absolves. The dam is breaking, with Republicans more directly questioning the administration. Trump has signalled a shift in his administrations immigration crackdown as he seeks to quell the growing furore over the killing of a man by federal agents in Minnesota. Gold is not at all like cash or US Treasuries because it has no counterparty risk. Big money is well-advised money, and it has apparently been advised to pile into the only Tier 0 monetary asset. 30-year yield of Japanese Government Bonds exploded by 30 basis points today and by 42 basis points over the past two days, to 3.91%. Wolf Richter says Scott Bessent seems like he is taking over as the guy at every accident or calamity that is shouting “nothing happened, nothing to see here” The Big Picture Home Invest with Barry Ritholtz and Wolf Street talk about the economy. The top 1% of households now hold almost one-third of the nations wealth. Wolf Wolf says that theres too much chaos and uncertainty right now for businesses to do any real investing, but plenty of reason for them to do some stockpiling. Russell Investments CEO says hes optimistic that theres an enormous amount of value creation to come from AI. The tension between balance and dynamism will define Chinese economic policy in the year ahead. MBS/Treasury spreads narrowed by a whopping 15 bp from mid-afternoon Wednesday to Friday. Negative OAS hasnt been seen since January of 2022, when the Federal Reserve was still engaged in its ill-fated expansion. Housing inventory decreased to 1.18 million in December from 1.44 million the previous month. Katz suggests concrete policy changes that could encourage more high-growth startups. Katz also calls for government to rescue fewer failed companies. There are signs that Japan is already beginning its industrial revival. Julian Zelizer: The project of creating economic security and abundance for the vast bulk of humanity. Noah Smith: The key test of Trumps China policy is whether he keeps the export controls on chips and chipmaking equipment. Zelizer was raised a liberal, in late 20th century America. Bitcoin price steadied a bit today after an early slide to $86,000 over the weekend. BitMine Immersion Technologies acquired another 40,302 ETH, valued around $116 million, over the course of the last week. Bitcoin mining activity slowed during a winter storm as operators curtailed power use. American Bitcoin has increased its bitcoin reserves to roughly 5,843 BTC, placing it among the worlds largest corporate holders of the cryptocurrency. The theme of this weeks roundup is “self-inflicted harm by the worlds Great Powers” Bitcoin traders are dealing with short-dated hedging demand and sharper moves around incremental legislative updates. The transmission to Bitcoin depends on whether the lapse disrupts core economic data releases and whether ETF outflows accelerate. The SEC dropped its Gemini Earn lawsuit earlier this week, adding to a list of many other cases already closed off. Australia is progressing digital-asset licensing laws that would require crypto custody and trading platforms to hold an Australian Financial Services Licence. U.S. natural gas production has reportedly dropped to 9.9 billion cu ft daily since start of the month. PetroChina is refraining from buying crude marketed by the worlds top oil trading houses – with U.S. blessing – as it assesses the situation. Canada has the opportunity to work with India now that it sees its high dependence on the US. Canada Looks to Boost Energy Exports to India in Strategy Reset.