Welcome back to the Deep Dive. It's Tuesday,
February 10th, 2026. And, you know, if you've
been refreshing your newsfeed lately, and then
maybe you glance over at your investment portfolio
and you just feel like you're living in two completely
separate realities, you're not alone. Not at
all. It's a definite split screen world right
now. It really feels like everything's operating
on two totally different frequencies. Right.
On one channel, the political one, you have this
I mean, there's absolutely deafening noise. We're
talking about really bizarre social media posts
about Canadian ice hockey. We've got looming
government shutdowns that could literally ground
flights, and then this plan to, well, basically
dismantle the civil services. We know it. It
just feels chaotic. I mean, you flip the channel
over to the economy, and it's almost eerily quiet.
It is quiet. Yeah, calm might even be under selling
it. I mean, the economic engine is actually humming
along. We're seeing what everyone talked about
that, you know, fabled soft landing. It seems
to be happening in real time. Inflation's stable.
Gold is on a tear and the markets are. Well,
they seem to be ignoring Washington completely.
And that's exactly what we're going to try and
do in this deep dive. We have to reconcile these
two worlds. How can the political machine be
grinding its gears so loudly while the economic
engine is just, you know, running so smoothly.
To do that, we've got a really fascinating stack
of sources. We're looking at political analysis
from electoral vote news, and we're putting that
right up against the hard data from the Mark
of You monthly report for January 2026. We're
going to try and separate the noise from the
signal. Start with the noise. Yeah. Or maybe
it's more of an omen, as one of our sources called
it, because the landscape for the 2026 midterms
is starting to look very specific and frankly
pretty scary for the Republican Party. It is.
Usually when we talk about political momentum,
it's all a bit squishy. It's vibes. It's polling.
But here we have some really hard data from a
special election that just happened down in Louisiana.
And normally I'd be the first one to say, look,
it's a special election. Don't read too much
into it. Turnouts low. Local issues can take
over. But the numbers here are just so strange
that you have to stop and look. They're a statistical
outlier. So this was a race for a state legislature
seat. And the context is everything here. This
district, it's deep red. Donald Trump won this
exact district by 13 points back in 2024. So
on paper, this should be a slam dunk. A safe
seat. Exactly. The Republican candidate, Brad
Daigle, should have walked into this thing. The
demographics were all on his side. But instead,
the Democrat, Chasity Verrett Martinez, she didn't
just win. She crushed him. The final vote was
62 percent to 38 percent. Wait, hold on. Let
me just process that math. So Trump wins by 13
points and not even two years later, the Democrat
wins the same district by 24. Yeah, it represents
a 37 point swing. That feels. I mean, in today's
polarized world, people usually just stick to
their political tribes. Was there some huge local
factor? Did a Republican candidate have a massive
scandal or something? That's the thing. No. From
everything we can see, it was a pretty standard
race. And that's why, according to the source,
GOP strategists are, and I'm quoting, Panic stricken.
I can imagine. Because if this was just one weird
result, you could write it off. Bad candidate,
local issue, whatever. But when you look at the
broader data, since Trump retook office, Democrats
have flipped 27 state legislature seats across
the country. OK, 27. And how many have the Republicans
flipped in that same time? Zero. Zero. Not a
single one. The score is literally 27 to zero.
Wow. OK, so that's not a slug. That's a pattern.
That's a structural shift. So the question becomes,
why? The economy, like we said, is doing pretty
well. And the old rule is, it's the economy,
stupid. A good economy should protect the party
in power. That link seems to be broken. The analysis
in our source suggests the electorate just isn't
rewarding the president for the stock market,
probably because the political chaos is just...
It's exhausting. There's no rally around the
flag effect happening. Right. The source argues
there's really no obvious lever the administration
can pull to stop the bleeding before the midterms.
I mean, they can't fix the economy because the
economy is already, you know, fixed. So voters
are rejecting the chaos. Yeah. But looking at
our next source, it seems like the administration's
reaction isn't to change the term, but to change
the entire government from the inside out. We
have to talk about Schedule F. or as they've
rebranded it, a scheduled policy career. This
is a heavy one, but it's so important to understand.
This isn't just about changing some staff. This
is like rewiring the entire operating system
of the U .S. government. Okay, so give us the
simple version. What does this schedule change
actually do to, say, a normal government worker?
Okay, so... Since the 1880s, the U .S. has had
a merit -based civil service. The whole idea
was to stop the spoil system where a new president
comes in and just fires everyone and hires his
friends. Right. The Pendleton Act. Exactly. It
said, you know, you keep your job because you're
a good scientist or a good accountant, not because
you're loyal to the guy in the White House. It
created stability. The experts stay no matter
who wins the election. Right. It stops the government
from being filled with people who are just loyal
but have no idea what they're doing. Schedule
F, which is what this new rule is bringing back,
basically flips that on its head for a huge part
of the workforce. It would let the administration
reclassify tens of thousands of career employees
into to political appointees. The numbers in
the report are just staggering. A president normally
gets to a point, what, about 4 ,000 people? This
could push that number up to 50 ,000. Potentially,
yeah. And the logic from the administration,
from people like Russell Vaughn, is that the
deep state, the career staff, is deliberately
slowing down the president's agenda. So they
want the power to fire anyone who they think
is dragging their feet. But just practically
speaking, let's say you do it. You fire 50 ,000
people. I mean, these are EPA scientists, nuclear
safety inspectors, patent lawyers. How on earth
do you replace them? You probably don't, or at
least not with anyone competent. The source flat
out warns this is a recipe for a train wreck
in how the government functions. Just think about
the logistics. It's hard enough to find one highly
qualified nuclear engineer who's willing to move
to D .C. Now imagine trying to find 50 ,000 experts
who are also fiercely loyal to one specific political
agenda. So you're trading expertise for loyalty.
You might get your orders followed faster, but
the people following them might not know what
they're doing. That's it in a nutshell. You are
stripping the institutional memory, the actual
how -to knowledge, right out of the federal government.
Which sort of brings us to the communication
style coming out of that government. If the internal
goal is loyalty over competence, the external
messaging feels like confusion over clarity.
We have to talk about the hockey tweet. I honestly
had to read that one three times to make sure
it wasn't a parody. So set the scene. President
Trump is upset about a new bridge being built
between Michigan and Ontario. It's a trade thing.
But then he brings up the Stanley Cup. It's just
so bizarre. He posted on social media that if
Canada makes a trade deal with China, then China
will, and this is a direct quote, terminate all
ice hockey being played in Canada and permanently
eliminate the Stanley Cup. OK, but how? How does
Beijing cancel a sport in another country? I'm
trying to picture the mechanism there. There
isn't one. It's a complete non sequitur. And
the source points out this isn't just, you know,
a funny tweet. It's alarming. It creates this
atmosphere of total instability. If your diplomat
trying to negotiate and the president is threatening
to cancel hockey via China, how can you take
anything seriously? It just adds to all that
noise we were talking about. And it feels like
there's this deliberate effort to create a separate
reality. We saw the same thing with that Steel
Is Back graph the White House put out. Oh, the
bar chart, yeah. This is a master class in how
to mislead with statistics. So if you're listening,
just picture a simple bar chart. Two bars, one
for 2024, one for 2025. I've seen it. And the
bar for 2025 looks like it's twice as tall as
the 2024 bar. It makes it look like steel production
doubled. A huge boom. Visually. Yes. But then
you look at the y -axis, at the numbers on the
side, the scale doesn't start at zero. It starts
at 80 .2 million tons. So that massive jump is
really just from about 80 .8 million tons to
81 .8 million tons. So it's a 1 .3 % increase.
It's a rounding error. It's statistically meaningless.
But if you're just scrolling on social media,
your brain sees that big green bar and thinks,
wow, boom. It's a kind of gaslighting. The government
says one thing, the data says another. And it's
all a distraction. Look at the shiny bar. Don't
look at the fact that we're staring down another
government shutdown. Because while we're all
talking about hockey and charts, the Department
of Homeland Security could be closing its doors.
And this is where the political chaos really
could hit the real world. We're looking at a
partial shutdown because of a fight over judicial
warrants. Let's break that down. What's the fight
actually about? So Democrats are drawing a line
in the sand. They're demanding that ICE immigration
and customs enforcement stop using what are called
administrative warrants. OK, what's that? It's
basically a permission slip that an ICE agent
gets from their own boss at DHS. It doesn't go
through a judge. Democrats are saying they have
to use judicial warrants signed by an actual
judge before they can conduct raids. That seems
like a pretty significant check on their power.
It is. It's about due process. The White House
is calling it a non -starter. So we're at a stalemate.
And if the funding runs out, ICE actually keeps
operating because they have other funds, but
the TSA, FEMA, the Coast Guard, they all shut
down. So the people who screened your luggage
at the airport go home, but the immigration enforcement
raids continue. That's a dark irony. It gets
darker. We have a report in the source from someone
in St. Paul, Minnesota describing what's happening
now. They claim ICE is already ramping up aggression,
smashing car windows, dragging people out. For
the Democratic base, this isn't a budget debate
anymore. It's a human rights issue. So their
politicians cannot back down. OK. So you have
a motivated opposition, a dug -in executive,
a deadline. That is usually the perfect recipe
for a market crash. Uncertainty is supposed to
be kryptonite for investors. And yet? Here we
are back on Channel 2. The Market View Monthly
Report, which calls this a controlled cooling
phase. Soft landing. It's really happening. So
let's run through the vital signs. OK. Third
quarter GDP was revised up to 4 .4 percent. That's
really strong. Inflation is holding steady at
2 .7 percent and the Federal Reserve has paused
its rate cuts. They're holding at about 3 .5
percent because they don't need to stimulate
the economy. It's chugging along just fine on
its own. But it's not fine everywhere, right?
The report points to a divergence. That's right,
a split economy. Manufacturing is actually shrinking
a little. The ISM index is below 50. But the
services sector, which is most of the modern
U .S. economy, is expanding nicely. We're making
a bit less stuff, but we're doing a lot more
things. And then there's this gold rush. This
really jumped out at me. Gold at $5 ,500 an ounce.
A 27 % return year to date. And silver went even
crazier. It rallied over 60%. OK, help me understand
that. A gold rush is usually a panic buy, right?
But the S &P 500 is hitting all -time highs.
So why are people hoarding gold if they're not
scared of stocks? That's the key insight here.
Central banks around the world are buying tons
of gold to diversify away from the dollar. But
also, I think investors are looking at everything
we just talked about. The shutdowns, Schedule
F, the hockey tweets, and they're just hedging
their bets. They're not selling their stocks,
but they are buying a little bit of insurance.
So the market is basically saying, we like the
corporate earnings, but we see the political
craziness over there. Precisely. They've essentially
priced in the dysfunction. They're assuming Washington
gridlock means no terrible new laws get passed
so businesses can just keep doing their thing.
It's a cynical view, but a profitable one, I
guess. Before we wrap this all up, there's one
last little wild card in the sources. The Epstein
scandal is back. You slain Maxwell. She testified
before Congress. Well, she showed up and took
the fifth. To every single question. But then
her lawyer dropped a bomb. He floated this idea
that Maxwell would publicly clear both Donald
Trump and Bill Clinton of any wrongdoing in exchange
for clemency. Wow. That's an incredible quid
pro quo. Let me out of prison and I'll say you're
innocent. It feels desperate. But the political
fallout is what's interesting. You look at someone
like Senator Cynthia Loomis. A Republican from
Wyoming. Exactly. And she has completely flipped
her position. She used to dismiss all this, but
now that she's seen the details, victims as young
as nine, she's joining Democrats and demanding
total transparency. The source argues this is
becoming a new wedge issue for the left. It's
a complete role reversal. Democrats are now using
a morality argument to go after the elite circles
around the president. Yeah, and it just adds
one more layer of chaos to those midterms we
started with. So let's try and pull this all
together. On one hand, you have a political system
that is just flashing bright red warning lights
everywhere. Patronage, shutdowns, polarization,
bizarre messaging. On the other hand, an economy
that is flashing green growth, stability, It's
a paradox. And the big question is, which one
of those realities wins out? Can they just exist
in parallel forever? For a while, maybe. But
not forever. At some point, the political noise
becomes a real signal. If the TSA actually shuts
down and planes stop flying, that hits the markets.
If 50 ,000 career experts get fired and a key
agency fails to stop a disaster, that will definitely
hit the markets. We might just find out that
all that boring competence in the civil service
was the only thing keeping this soft landing
from turning into a very hard crash. I think
that's it. The markets are betting that somewhere
the adults are still in the room. If schedule
F actually clears that room out, then all bets
are off. And honestly, if the Stanley Cup really
gets canceled, I think the stock market will
be the least of the administration's worries.
Never, ever mess with the hockey vote. That's
a line you just don't cross. That is our deep
dive. As always, the goal is to see the whole
picture, not just the noise, not just the numbers,
but how they collide. Thanks for listening.