Hi All,

I know last week’s newsletter was about ICE and Iran, but more developments took place over the past week, so we gotta talk about it again. Let’s dive into things.

Word of the Week - Mid (adj, slang)

Definition: Mediocre, average, or unremarkable. Not necessarily bad, just nothing special. Often used as gentle criticism to describe something that's been overhyped or doesn't live up to expectations.

Example sentences:

Everyone said that new restaurant was amazing, but honestly? The food was pretty mid.

I don't know why people are obsessed with that show. The first season was decent but everything after that has been mid.

That movie had a $200 million budget and still managed to be mid.

New Article in Classes - The Market for a Good Night's Rest

Sleep has transformed from a basic daily function into a booming consumer category, with startups selling everything from simple apps to luxury systems like Eight Sleep's setup that monitors breathing, adjusts temperature, and requires a yearly subscription. While tech companies chase recurring revenue by promising optimized rest, a countertrend has emerged: human sleep coaches who originally worked with exhausted parents are now helping overwhelmed adults detective their way through bad habits, reframing sleep not as a moral failure but as a trainable skill. AI-powered coaching features are following close behind, though the entire sleep tech industry faces a credibility problem since consumer wearables rely on proxies like movement and heart rate rather than actual brain activity measurements, and the constant tracking can backfire by turning rest into another performance review that leaves people feeling "unready" before the day even starts. The irony is that the most effective sleep interventions remain low-tech: consistent timing, darker rooms, fewer screens, and simple routines that signal the day is over, advice that doesn't sound like innovation but may be the closest thing to a real upgrade for an exhausted society.

What’s Happening in the News

Minneapolis and the Death of Mass Deportations

Last weekend a 37-year-old nurse named Alex Pretti was shot and killed by federal agents in Minneapolis during confrontations with ICE. The story that immediately hit the media: an upstanding veteran and medic gunned down while protecting others. The media even doctored his image to make him look more handsome. Here's what the coverage left out.

ICE wasn't in Minneapolis on some random sweep. They were investigating what Biden's own DOJ called the largest pandemic relief fraud in the country. We're talking about upwards of $8 billion stolen from Minnesota taxpayers through fake Somali nonprofits claiming they needed money for autistic kids and daycare meals. When the state tried to investigate, these groups literally sued for racism and attempted to bribe jurors with bags containing $120,000. This isn't fringe conspiracy. It's in the New York Times, reported by Merrick Garland's DOJ.

The initial video looked bad: agents tackled Pretti, discovered he had a gun, disarmed him, then shot him roughly ten times. But then more footage surfaced showing Pretti had been confronting ICE agents for weeks, spitting on them, breaking taillights on their vehicles, openly carrying firearms during these confrontations. His own parents said his behavior had become erratic and told him not to go. This wasn't some random guy caught in crossfire. He was actively engaged in coordinated resistance to federal law enforcement.

Trump's response? Within 48 hours, he pulled the Border Patrol chief running the operation out of Minneapolis, went on Fox News and called him "a pretty out-there kind of guy," and said "maybe it's not good here". Then today, Tom Homan announced ICE would be winding down activity in Minneapolis, effectively backing down and retreating. The administration gave the left exactly what they wanted: proof that sustained protest pressure works.

This sends a clear message to ICE agents on the ground, those being chased, doxxed, and surrounded by protesters blowing whistles, that Trump won't support them if they make a mistake. It also tells the resistance that their tactics are effective.

The pattern is familiar. In 2018, Trump implemented child separation, "kids in cages," which generated wall-to-wall coverage. After enough pressure, he reversed the policy. By June 2019, the US had the highest border apprehensions in 20 years. Now, Border Patrol has reportedly been given new orders not to arrest non-criminal illegal aliens. The US has reverted to the Obama deportation doctrine: if you're just here illegally, authorities aren't going to bother you. Republicans are worried mass deportation coverage could cost them their House majority in the midterms.

Trump deported about 230,000 people in 2025. To hit even one million annually (the low end of what's needed), that number would have to quadruple. With Trump already announcing de-escalation in a midterm year, the trajectory is clear.

War with Iran (Again)

Trump announced today that if Iran doesn't come to the negotiating table and surrender everything (nuclear centrifuges, enriched uranium, long-range missiles, support for proxies), the US is going to war. The Pentagon is now discussing special operations raids on the ground inside Iran. Not just airstrikes this time. American soldiers physically dismantling Iranian infrastructure.

To understand how we got here, back up to October 7th. After Israel was attacked, American Jews shifted rightward. They saw the American left sympathize with Palestinians and became more militaristic. Being extremely powerful in America, this shift made America more right-wing too. They stood down and allowed Trump to win because they knew he was the vehicle for Israel's revenge. War with Iran under Trump isn't a bug, it's the feature. Trump was given hundreds of millions of dollars with the understanding that he would go to war with Iran. The deportations? Side projects. War with Iran is why he's there.

They poisoned the well years ago by pushing Trump to assassinate Soleimani, rip up the Iran nuclear deal, and fabricate the myth that Iran was trying to assassinate Trump. When Trump took office and attempted to negotiate, the damage was already done.

Last June, the US and Israel bombed Iran's nuclear facilities. A lot of Trump supporters thought that was it. Mission accomplished. But that fundamentally misunderstands the situation. From the US perspective, taking out Iran's nukes was the limited objective. From Israel's perspective, it was phase one. Israel's problem isn't that Iran has nukes. Israel's problem is that Iran is a large, powerful Islamist state that doesn't recognize Israel. Israel wants Iran destroyed. The nuclear program was just protecting Iran from being destroyed.

Iran's reaction was predictable. They kicked out weapons inspectors, cut off diplomacy, and started reconstituting their defenses. Israel can't allow that. If Israel's goal is to destroy Iran, it defeats the purpose if Iran just rebuilds. The US must assume Iran is building a nuke. There are exactly two options: negotiate or bomb them again. But by bombing Iran during negotiations last June, the US got its hands dirty. America can't credibly go back as a neutral party. Iran doesn't trust the US, won't negotiate, and America can't let them rearm. It's a trap with no off-ramp.

Netanyahu went to Mar-a-Lago on December 29th begging Trump to bomb Iran's missiles. A week later, massive protests erupted in Iran. Eyewitnesses reported men in black with automatic rifles storming government buildings. Color revolution. Trump tweeted "Help is on the way" and prepared to strike, but called it off because US forces were dealing with Venezuela. So he diverted the USS Abraham Lincoln to the Middle East, sent aircraft and THAAD systems, and deployed tens of thousands of personnel.

According to the New York Times, Trump has been presented with options including American commandos raiding sites inside Iran. Trump is demanding Iran permanently end uranium enrichment, give up nuclear stockpiles, and limit missiles so they can't strike Israel. Make themselves completely defenseless. Think about this from Iran's perspective: Israel wants you dead, and the US is telling you that if you don't make yourself vulnerable, they'll destroy you. Iran must realize they'll be destroyed regardless. Netanyahu is making his sixth visit to the White House in February.

What’s Happening in the Markets (NOT FINANCIAL ADVICE)

📊 S&P 500: All-Time Highs in Dollars, Multi-Year Lows in Gold

The S&P 500 continues making new all-time highs despite economic policy uncertainty sitting at 30-year highs. On the surface, it looks like investors have stopped caring about geopolitical threats and trade chaos. But here's what most people are missing: the US Treasury bond market has fallen 12% over the past year, wiping out $360 billion in value, while the US dollar has been declining and losing purchasing power relative to other currencies. Record $100 billion in outflows from US money market funds just in the past month. Capital is fleeing US assets, but here's the trick.

When measured in gold instead of dollars, the S&P 500 has fallen 45% since December 2021 and is now hitting the lowest levels since 2014. This decline accelerated in late 2024, exactly when economic policy uncertainty began to rise. What's happening is that investors are fleeing both the stock market and the currency at roughly the same pace. In currency terms, the S&P 500 looks stable or even rising slightly, but in real purchasing power (gold terms), it's contracting substantially.

The question now is whether these concerns eventually lead to a panic that causes the S&P 500 to collapse even in dollar terms. For now, corporate earnings have been rising despite predictions they would contract following tariff implementation, which is keeping the index elevated. The model many have been following suggests grinding sideways action into mid-February before a potential larger breakdown. Key support sits around 6,900 points.

₿ Bitcoin: Breaking Down Into Multi-Month Lows

Bitcoin has broken below $80,000 for the first time since November, now sitting around $83,000 and down nearly 37% from the October highs. The breakdown came after failing to hold the critical $86,000 level, which marked multiple prior lows. Next major support zones sit at $74,000 and the 50% retracement level at $71,000.

What's concerning for Bitcoin bulls is the divergence with other assets. While gold and silver were hitting new all-time highs (before today's crash), Bitcoin has continued to decline. The Bitcoin-to-gold ratio has collapsed and is now testing the prior cycle's bear market low, something that has never happened before. If Bitcoin breaks below that level relative to gold, it would be the first time in history Bitcoin sits below the prior cycle's low.

Three consecutive red months from the high, declining exchange volume, stablecoin dominance rising above 6.5%, and Google Trends showing crypto interest near five-year lows all point to continued weakness. The 3-day signal from the highs (down, down, down with lower highs and lower lows) confirmed seller control, a pattern that appeared at every major cycle top. Crypto-related stocks like MicroStrategy and Coinbase are also breaking down, with MicroStrategy approaching its 2021 all-time high and sitting just above $130.

🏦 Fed Holds Steady, Warsh Nomination Triggers Capitulation

The Federal Reserve held rates steady on January 28th, as expected. Fed Chair Jerome Powell stated that the economy is growing at a solid pace, the labor market shows signs of stabilization, and inflation remains somewhat elevated. When asked what would trigger rate cuts, Powell said a weakening labor market or softer inflation would be reasons to ease, but that currently the labor market is stable and rates are "in a good place". He also warned that the US federal budget deficit is "uncontroversially on an unsustainable path" and that running such a large deficit at essentially full employment will eventually lead to a difficult situation.

On January 30th, Trump officially nominated Kevin Warsh to succeed Powell as Fed Chair when his term expires in May 2026. Warsh is seen as a hawk who favors shrinking the Fed's balance sheet and has aligned with Trump's demands for aggressive rate cuts. The nomination triggered an immediate market repricing: the US Dollar Index strengthened sharply, bond yields pushed higher, and the precious metals markets experienced a violent capitulation event.

🥇 Gold and 🥈 Silver: Capitulation Event

Gold and silver crashed today, marking the steepest single-day decline for precious metals in over a decade, wiping out the entire month's gains in hours. Gold plummeted as much as 8% intraday, dropping from a record peak of nearly $5,600 yesterday to an intraday low of $4,941, now stabilizing around $5,080-$5,150 (down 4-6% for the day). Silver was hit even harder, collapsing 17% from its peak of $120 down to roughly $95 per ounce, briefly breaking the psychological $100 support level before a minor bounce-back. Platinum fell 14%, Palladium dropped 12%, and base metals like copper and zinc saw 9-10% declines.

The Warsh nomination was the primary trigger. His confirmation signals the end of the "dollar debasement" trade that had been driving investors into gold as a haven against currency erosion. Before today's crash, gold was up nearly 25% and silver over 60% in January alone, conditions described as "parabolic" and "frothy". Once selling started, it triggered automated stop-loss orders across the market. A sharp rout in US tech stocks (led by a 12% drop in Microsoft) forced many institutional investors to liquidate their winning precious metals positions to cover losses or meet margin calls in equities.

While the crash is dramatic, many analysts view it as a "healthy" technical correction after such an extreme move. Gold is still on track for its best monthly performance since the 1980s. However, $5,000 for gold and $100 for silver are now the critical "lines in the sand"—if prices stay below these markers, it could signal the end of the current bull run.

🛢️ Crude Oil: Holding Steady

Crude oil is showing support and hasn't been swept up in today's capitulation. Overhead resistance sits at $65-$67. A sustained break above this zone would signal continued strength on higher time frames.

That's all for this time, have a nice weekend!