The S&P 500 closed at another record high yesterday, riding high on the fumes of Magnificent Seven earnings optimism.
The Dow, however, lagged, dragged down by a 20% plunge in UnitedHealth after the Trump administration proposed freezing Medicare Advantage rates.
Health care investors lost a lot more than lunch money.
UnitedHealth, you may be aware, ranked high on our list of stocks to avoid in The MAGA Blacklist report we published early in 2025 – before its big hit last year.
Meanwhile, the dollar is melting like a Greenlandic glacier in July. It’s down 11% since January of last year, and President Trump says he’s not concerned. We’ll explain “why” below…
Since that same January, gold has risen 96%, now trading at an eye-watering $5,329 an ounce. (Source: Global Markets Investor)
To borrow a phrase from our book, Financial Reckoning Day, both price signals are screaming.
AI backlash, Pink Slips, and Big Tech’s Day of Reckoning
Amazon just showed 16,000 more workers the door. They’ve already axed 14,000 since October and are now closing their Amazon-branded grocery stores and automated grab-and-go markets.
Pinterest — remember them? — 15% of the staff are getting cut, too. The convenient reason given?AI.
If you’re old enough to have been paying attention to the mainstream economy during the tech wreck, “productivity gains” were a well-worn excuse for dumping salaried employees during that phase of the innovation cycle, too.
Here’s the thing: It’s not just headcount. Investors want numbers. ASML’s AI-fueled order surge wasn’t enough to keep the Dutch giant from cutting 1,700 jobs.
Tesla reports tonight, and shareholders are hoping Elon’s robots can justify the stock’s lunar trajectory. Microsoft is expected to post 15% growth. Meta might hit the top end of guidance.
But behind the numbers, a question looms: how long before the backlash against AI starts heating shareholder meetings? Our resident futurist, Zoltan Istvan, tackles that very question in the upcoming issue of the Grey Swan Monthly Bulletin. (Presently past due in hitting your inbox!)
The Fed’s Quiet and Boring Power Games
A new paper from the National Bureau of Economic Research pulled back the curtain on how the Fed really works. Turns out, dissenting votes on the FOMC don’t just get ignored — they get punished. Members who buck the consensus are one-third less likely to see their preferred policy enacted down the road.
Think of it as institutionalized peer pressure. And lately, the committee has been racking up dissents like a college debate club.
Why the tension?
Because the Fed’s caught between a stubborn job market slowdown and inflation that refuses to die. Some want more cuts. Others want to hold the line.
Either way, Chair Powell’s grip is loosening. Rick Rieder at BlackRock is emerging as the frontrunner to replace him. Rieder is a balance sheet romantic: lower rates, more spending, creative ways to juice the system.
Two Economies, One Tattered Flag
According to the Atlanta Fed, GDP is growing at 5.3%. But consumer sentiment just hit its lowest level since 2014. The Conference Board’s index fell to 84.5, with Americans citing gas, groceries, and health insurance as top concerns.
What gives?
The University of Michigan Consumer Sentiment Index is plummeting. Oddly, durable goods orders are ticking back up quickly. A natural supply-side price deflation is on the horizon. (Source: TradingView)
On his Substack page, Shanaka Anslem Perera digs a little deeper than the description of a “K-Shaped” economy in the United States. Similar to our social-media-charged political echo changers, Perera suggests we now have two economies under one flag as well.
The first is the AI Core: tech giants, hyperscalers, and financial firms riding the algorithmic wave. Unlimited capital. Massive hiring. $600 billion in projected capex this year alone.
The second is the Physical Periphery: manufacturing, real estate, and regional banks. Credit is freezing. CRE loans are maturing into a wall of refinancing failures.
Regional banks with three times their equity exposed to commercial property are cutting lending entirely. The PMI index is contracting for a tenth straight month. And credit card debt? A record $1.233 trillion.
The averages — GDP, unemployment, inflation — blend the two. But averages lie. The future belongs to those who understand the “great bifurcation,” as our Mark Jeftovic calls it…
Debt, Division, and the Big Cycle
And try to answer this question: What happens when governments accumulate large debts alongside exploding wealth gaps?
Private-sector stress hits first. Public-sector strain follows. When buyers disappear, central banks step in. Money gets printed. Debt gets monetized. Social cohesion splinters.
That’s the short story.
After studying dozens of revolutions for his book How Countries Go Broke, Ray Dalio found that the most reliable leading indicator of internal conflict is a bankrupt government paired with large and growing wealth gaps.
These are now visible across the U.S. — especially in high-income, high-debt cities like New York, Chicago, and San Francisco.
Against this backdrop, President Trump kicked off his “affordability” midterm campaign in Iowa yesterday.
The President’s “Affordability” Tour Begins In Iowa
Trump is trying to force two converging economic events that haven’t aligned like this in over 40 years.
The first is the cost of borrowing. After the fastest rate-hiking cycle in decades, rates are rolling over. Trump wants them at 1%. Jerome Powell’s term ends at the Fed on May 15. The path is being cleared for a true believer in lower interest rates to take his spot.
The second is the cost of living. Oil has fallen from $95 to just over $60 in a year. Gas is averaging $2.88 nationally. And because oil feeds into everything — shipping, food, plastics — falling prices cascade across the economy. The capture of Venezuela’s Nicolas Maduro is not a coincidence. Venezuela is one of the leading exporters in the OPEC block of oil producers.
Back on November 18, 2025, in a fairly routine appearance on the front porch of the White House, President Trump and the Saudi Prince Mohammed bin Salman (MbS) shook hands over a deal to continue exporting oil at levels acceptable to the U.S. consumption… and cementing the petrodollar for another 50 years.
Part of Trump’s midterm “affordability” strategy is coming into full view. In 2026, the U.S. consumer will be treated to below-market interest rates and declining energy prices… at the same time.
The last time this happened? 1982. What followed was the greatest wealth-building boom in modern U.S. history. GDP grew 78%. The Dow rose 1,000%.
This time, the difference is intent. In the ‘80s, America stumbled into cheap oil. Trump is trying to engineer it. And yesterday, he set out on a road tour to sell it.
Call it what you will. But it looks a lot like a second chance for American families to build wealth the way Boomers did under Reagan. Much more on this story to come…
ICE at the Olympics, and the Optics of Authority
Here’s an announcement that is sure to make the organizers of the Minnesota resistance bristle: The Department of Homeland Security confirmed ICE agents will accompany the U.S. delegation to the Winter Olympics in Milan next month.
Heh. Going to be a bit more expensive to fly the professional agitators over there, eh? The Italian government is not pleased either. They’re going to have to deal with the internal squabbles of American politics themselves.
ICE also plans to run visible enforcement operations at Super Bowl LX. If the Olympics are for sport, and the Super Bowl is for spectacle, this year they both double as tests of domestic political optics.
Endgame Forecasts And Reality
Something about the human psyche — we always perceive that “the end is nigh.”
CBS News didn’t break out the sandwich board, exactly, but reports that AI “supercharging misinformation” has finally nudged the minute hand of the “doomsday clock” one notch closer to midnight:
The Doomsday Clock, that metaphorical gauge of apocalypse, is now at 85 seconds to midnight. (Source: VICTOR de SCHWANBERG)
Nuclear risk, AI, and climate upheaval are the drivers.
Today also marks 40 years since the Challenger disaster.
Christa McAuliffe, the first ordinary civilian set to fly into space, perished 73 seconds after liftoff. (Source: The History Channel)
It was a tragedy millions watched live, a shockwave of grief that still reverberates. We remember it clearly, sitting in a friend’s dorm room, while visiting the University of New Hampshire.
Moments like these remind us that human systems fail — sometimes in dramatic, public fashion. But they also endure, adapt, and evolve.
~ Addison
P.S. Appropriate to “earnings week” this week: During this innovation cycle in tech… in just the last year…. the “Mag 7” stocks have created over $1.8 trillion in new wealth.
It’s astounding, really. And historic.
The surging stocks of these 7 companies — Google, Amazon, Apple, Tesla, Netflix, Microsoft and Nvidia — have helped mint over 560,000 new American millionaires – enough new millionaires to fill 10 NFL stadiums!
But stats like that don’t matter much if you didn’t buy in on the cheap, before they became the Mag 7, correct?
Honorary Grey Swan member and contributor Mat Milner has identified 7 private companies he has researched that will become the next group of high-flying tech stocks… regardless of what the indexes do in 2026.
If you want a sneak peek at Matt’s research and ideas, add your e-mail address to the list right here.
P.P.S. This week on Grey Swan Live! – Thursday, January 29, 2026, at 2 p.m. ET – we’ll be joined by Ronan McMahon of Real Estate Trend Alert. Real estate – particularly bought in foreign locales – can avoid much of the volatility of traditional assets in the U.S., even while appreciating in dollar terms.
Ronan’s going to treat us to real estate deals he’s got cooking in Mexico, Panama and Paraguay… it’s going to be a welcome tropical topic after this week’s bout with winter weather in North America.
Ronan’s also been scouting property in Venezuela – yes, Venezuela – following Trump’s abrupt capture of Nicolas Maduro to kick off the new year. We haven’t spoken to him yet about this property, but we’ve heard he found beachfront condos for $15,000. Not everyone’s cup of tea, for sure. But if you’re into crisis investing… well, we’ll find out what deals Ronan has found.
And on Friday, for paid-up annual Fraternity members, we’ll have a special session reviewing our model portfolio with Andrew Packer. As always, we’ll go over the charts on all our model portfolio positions and what we expect amid the unfolding chaos of 2026.
If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.
