Welcome back to The Deep Dive. It is Monday,
January 26th, 2026. And if you were feeling,
I don't know, a serious amount of cognitive dissonance
this morning, you are definitely not alone. It
feels like we're living in two totally different
timelines. It really does. It's one of those
weeks where, you know, if you only read the political
headlines, you'd think the country is completely
falling apart. Right. But then if you only looked
at your brokerage account. you'd think we were
in some kind of golden age. That is the exact
disconnect we have to figure out today. Our mission
is to connect these dots because they seem, I
mean, just wildly contradictory. You have a government
in Washington that's basically paralyzed, steering
down a shutdown this Saturday. And then you have
these geopolitical threats flying around on social
media. Oh, everything from trade wars with our
closest allies to buying Greenland again. Which
is, believe it or not, back on the table. We
will get to that. But then on the other side
of the coin, you have financial markets that
are just absolutely tearing it up. Gold, silver,
stocks, everything's hitting all -time highs.
So my question is, are we just distracted by
the drama while the money knows something we
don't? Or is the money just ignoring a cliff
edge that we're all about to drive off of? That's
the big question. And to answer it, we have to
look at the specific machinery of what's happening.
We need to look at this showdown over ICU, what
they're calling the besant factor at the Treasury,
and well, a peace plan for the Middle East that
honestly looks more like a real estate brochure.
Let's start with the immediate crisis then. If
you're a federal employee, or just anyone who
expects the government to function, this Saturday
is the deadline. We're looking at a government
shutdown. But this feels different than the usual
budget fights, doesn't it? Oh, completely. Usually
it's about spending caps or debt ceiling. Yeah,
numbers. This is entirely ideological. It's not
about decimal points in a budget. This is a fundamental
clash over the Department of Homeland Security
and specifically Immigration and Customs Enforcement,
or ICE. And the catalyst, of course, is the situation
in Minneapolis. Right. Reports confirmed over
the weekend that ICE agents killed a second American
citizen on camera there. And the public outrage
is just at a boiling point. And that anger. has
now officially moved from the streets to the
Senate floor. Exactly. Senate Democrats are using
this as their leverage point. They are blocking
the entire DHS funding bill. Now, you know, normally
you'd say, well, Republicans control the Senate,
they can just push it through. But they only
have 53 seats. Right. And you need 60 votes to
pass anything, thanks to the filibuster. So Mitch
McConnell needs to find seven Democrats to cross
the aisle. And right now he has... How many?
He has zero. Chuck Schumer has the caucus completely
united. You have everyone from Patty Murray to
Tim Kaine and especially the Minnesota senators,
you know, Amy Klobuchar, saying absolutely not.
They're demanding accountability measures be
written into the law itself. OK, let's get into
those demands because they're really specific.
It's not just, you know, better training or something
vague. No, no. They want to strip civil and criminal
immunity for agents who violate state laws. Wait,
explain what that means. That sounds huge. It
is the nuclear option for a federal agency. I
mean, think about it. Right now, a federal agent
has what's called qualified immunity. If they
make a mistake, they're generally protected from
being personally sued or charged by like a local
prosecutor. So the Democrats want to get rid
of that. They're trying to pierce that veil.
So if this passes, an ICE A C -E agent in Minneapolis
who breaks a Minnesota state law could be arrested
by local police. or sued personally. That changes
everything for the agents on the ground. It changes
the entire risk calculation. And on top of that,
they want to ban on masks and mandatory name
tags with unique personnel numbers. Which seems
so basic, but I guess it ends the anonymity of
these tactical units. It ends their ability to
operate as a faceless entity. It forces individual
accountability. And they're offering a three
month extension, but only if these reforms are
included. It's real hardball. So what's the Republican
response? I would expect them to be screaming
about defunding the police or open borders. But
it feels quiet. It is surprisingly muted. You
have Senator Bill Hagerty trying to blame the
Minnesota governor, Tim Walsh, for encouraging
violence, which is kind of the standard line.
But. The moderates are paralyzed. The Susan Collins
problem. Susan Collins is the perfect example.
She represents Maine. She's in a brutal re -election
fight. And recently, ICE conducted these big
raids in Portland and Lewiston, Maine. They arrested
over 100 people. And her voters are angry. Her
voters are furious. So she votes to fund ICE
with no changes. She alienates the very people
she needs to win. But if she sides with Schumer
and demands reforms... Then she crosses Trump.
And Trump sees that as a personal betrayal. She
is caught in a vice. And that's why the GOP can't
find a unified message here. Speaking of the
president, while the Senate is stuck, he is very
active on social media. And it seems like he's
just picking fights with, well, everyone. Let's
start with Canada. Ah, yes. The Governor Carney
incident. I have to ask, did he really forget
that Mark Carney is the prime minister of Canada?
He called him Governor Carney and called Canada
a state. Was that a slip up? With Trump, you
have to assume it's intentional. Mark Carney,
you know, he ran the Bank of England, the Bank
of Canada. He is the definition of a sophisticated
globalist elite. Right. Calling him governor
and Canada a state is a power move. It's meant
to belittle him. It's a bully tactic. It is.
But the actual threat is what's really scary.
A 100 % tariff on all Canadian goods, because
he says Canada is a drop -off port for China.
OK, but a 100 % tariff on everything from Canada.
Does he understand what that would do to our
own economy? It would be an economic suicide
pact, specifically for the Midwest, the very
voters he says he's protecting. How does that
work? Why does a tariff on Canada hurt, say,
Michigan? Because the supply chain isn't a straight
line, it's a circle. Take a Ford F -150. The
engine block might be cast in Windsor, Ontario.
It crosses the border to Michigan, then maybe
goes back to Canada for assembly, then back to
Ohio. A single part can cross that border seven
times. If you tax it 100 % each time. You don't
just make the truck expensive, you stop production.
Period. You would bankrupt Ford and GM in weeks.
And that's not even getting into lumber for housing.
So it's a bluff. It has to be. It's likely a
bluff to get Carney to crack down on China. But
it's a dangerous game, and it's not just Canada.
He's doing the same with Europe. Right. Which
brings us to Greenland. He's back on the buy
Greenland idea, threatening to leave NATO or
slap 15 percent tariffs on the EU. But the European
response to this is kind of brilliant. The soccer
twist. This is fascinating. It's asymmetric warfare.
There is serious talk among European nations
about boycotting the 2026 World Cup. The one
the US is hosting. The one the US is hosting.
Wait, really? They would actually pull out of
the biggest sporting event on the planet. It
sounds crazy, right? But listen to this German
MP, Roderich Kieswetter. He said he finds it
hard to imagine participation if Trump starts
a trade war or invades Greenland. But why? Why
would they do that? Because it's the one thing
Trump wants to show off. Hosting the World Cup
is a huge prestige moment for his administration.
A Make America Great Again spectacle for the
whole world. And Germany, France, Spain. Yeah.
If they don't show up. It turns a global triumph
into a global humiliation. It's a soft power
strike. They know they can't win a dollar for
dollar tariff war, but they can ruin his party.
It attacks his ego, which might be the only leverage
that actually works. That is just wild. OK, from
the soccer pitch to skyscrapers. Let's look at
the Middle East. Jared Kushner is back with a
plan to rebuild Gaza. But looking at the details,
it feels less like a postwar plan and more like
a pitch for a luxury resort. It really does.
It reads like a developer's fantasy. The plan
is to turn Gaza into, and this is a quote, Dubai
with better weather. We're talking 180 skyscrapers,
a new Rafa with 100 ,000 housing units, a huge
industrial center. The drawings are probably
beautiful. But what about the two million people
who live there now? Where do they go in this
plan? That is the massive hole in the middle
of it. The plan seems to treat the land like
it's a blank canvas. It just assumes Hamas will
disappear or disarm because someone promised
to build a nice hotel. Which seems, well... Naive.
Especially with reports that Hamas is hoarding
weapons for a long -term fight. It's incredibly
naive. And then you have the logistics. Who provides
security? Who polices the streets? And who pays
the hundreds of billions of dollars to build
it all? The assumption is always Saudi Arabia.
That's always the assumption. But the Saudis
are pragmatic. They're not going to pour... billions
into infrastructure that could just be blown
up again next year. It feels less like a diplomatic
plan and more like peace through gentrification.
It just ignores all the human and political realities.
OK, so let's just pause and take stock. We have
a potential government shutdown over police reform,
a potential trade war with Canada that could
wreck our auto industry, a World Cup boycott
threat, a sci fi plan for Gaza. Logically, the
stock market should be in a free fall. You would
think so. Panic selling, a flight to safety.
And yet we are seeing the exact opposite. The
complete opposite. Gold, silver, platinum, all
-time highs. Small cap stocks, the Russell 2000,
are beating the S &P 500 for the longest streak
since 1996. What is the market seeing that we
are missing? There are two things going on. The
first is the macro environment, what we call
Quad 1. OK, break that down for us. What is Quad
1? It's just a term for a scenario where economic
growth is accelerating and at the same time,
inflation is slowing down. It's the Goldilocks
zone for investing. So despite all the political
chaos, the underlying economic data is actually
pretty strong. But how can inflation be slowing
if the government is spending so much money?
That brings us to the second and probably more
important factor, the Besant factor, Treasury
Secretary Besant. While Trump is on social media,
Besant is quietly taking apart the entire regulatory
framework of the financial system. This is Dodd
-Frank, right? The rules they put in after the
2008 crash. Exactly. Besant is systematically
stripping those rules away. But here's the key
part that explains the market boom. He's allowing
banks to hold cryptocurrencies directly on their
balance sheets. OK, why does that matter so much?
Why does a bank holding Bitcoin make the S &P
500 go up? It's all about liquidity. Think of
crypto as this giant, isolated island of money.
By letting major banks buy and hold it, you're
building a bridge from that island to the mainland
financial system. You're flooding the system
with new cash. A sugar rush. It's a massive shot
of adrenaline. You have Senator Elizabeth Warren,
of course, screaming that this is unbelievably
dangerous. She says removing these financial
cops and letting banks gamble on crypto is setting
us up for a crash that will make 2008 look tiny.
Because if crypto tanks and the banks are holding
the bag, And there are no rules forcing them
to have cash reserves. Then the banks fail again.
It creates this high risk, high reward environment.
We actually saw a little flash of this with that
VIX event recently. Volatility just spiked from
15 to 20 in one day. I remember that. Normally
that triggers a panic. But because there's so
much cash sloshing around, the market just absorbed
it and kept climbing. So the car is going faster
because we took the brakes out. That's the perfect
analogy. We are hitting top speed and it feels
great. But if we hit a like a real trade war
or a prolonged shutdown, we have no safety systems
left. That's a sobering thought. Before we go,
let's hit some political quick hits. The D .C.
machine never really stops. First up, the Jeffrey
Epstein story just will not go away. And Democrats
are making sure it doesn't. The House Oversight
Committee just subpoenaed his inner circle. Leslie
Wexner, the billionaire benefactor, Darren Indyke,
his lawyer, and Richard Kahn, the accountant.
What are they looking for? Epstein is dead? What's
left to find? The money trail. Specifically,
more than 4 ,000 transactions at JP Morgan. Democrats
think there's a huge cover -up about how he moved
his money and who he was paying. They want this
out before the midterms. And speaking of midterms,
there's some new polling on young voters that
should be terrifying. for Republicans. It's a
complete collapse. They thought they'd made inroads
with Gen Z, but recent polls show voters aged
18 to 29 now disapprove of Trump by these huge
margins like negative 26 to negative 43 percent.
What's driving that shift? It's the civil liberties
issue. And interestingly, what you could call
the Joe Rogan effect. Rogan has turned on Trump
over these ICE tactics. He actually compared
them to the Gestapo. I heard that clip. He said
something like, are we really going to be the
Gestapo? Where's your papers? Exactly. when you
lose Joe Rogan on personal freedom, you're losing
a huge chunk of that demographic. They might
not vote Democrat, but they might just stay home.
And really quickly, Senator Amy Klobuchar is
leaving her Senate leadership role to run for
governor of Minnesota. It's a tell. She sees
the gridlock. She can't get this DHS bill passed.
And she wants out. She wants an executive job
where she can actually do something. Of course,
with the welfare fraud scandal in Minnesota,
she's kind of jumping from the frying pan into
the fire. And finally. The GOP is planning a
midterm convention. In Vegas or Dallas? Yeah.
It's never been done. It's basically a giant
pep rally to get the base fired up because the
polls are looking so grim. Don't expect any real
news, just a lot of fireworks and speeches. It's
a sign they're worried. So let's try to tie this
all together. We have a government paralyzed
by ideology. We have a president governing by
threat and insult. And underneath it all, a financial
system getting its safety regulations stripped
away to fuel a historic rally. It is a precarious
balance, to say the least. We're essentially
redlining the engine of the economy while we're
smashing the dashboard warning lights with a
hammer. Which leaves us with the big question
for today. Is this market rally a sign of real
American resilience? Or are we just enjoying
the view because we can't see the cliff we're
speeding towards? I think we might find out the
answer to that sooner than we'd like. Watch the
Fed decision this Wednesday and definitely keep
an eye on that shut down deadline Saturday. It's
going to be a very long week. Thanks for diving
in with us.