February 2025

[ducati916]

So just the slightest twitch in credit spreads:



Nothing to get your knickers in a twist about yet, but....


jog on
duc

 

[ducati916]

It's all about Trump and NVDA today.

The stock market no longer appears to be President Trump's go-toyardstick for success. Bond yields, not the Dow, are the administration's new North Star. Why it matters: The administration now sees bond yields — which determine long-term interest rates across the economy — as a real-time gauge of investors' confidence in its fiscal agenda. The White House says its policies should help engineer lower rates for consumers and businesses, regardless of what the Federal Reserve does in setting short-term interest rates. What they're saying: "We are paying particular attention to the 10-year Treasury rate, which I believe should naturally come down because of President Trump's policies," Treasury Secretary Scott Bessent said at an investor summit yesterday. Bessent added that he believes interest rates would also fall as the administration solved the "affordability crisis." "One way to tell whether markets think 'are we getting inflation under control' is to look at longer-term interest rates," Kevin Hassett, the director of Trump's National Economic Council, told CBS last week. Where it stands: Bond yields have plunged in recent weeks, reversing a run-up after the election. The yield on the 10-year Treasury bond is 4.3% this morning, about half a percentage point below its recent peak in early January. This is a huge move in a short period of time. The bond market is historically more slow-moving and steady than volatile stocks. Yes, but: The problem with using the stock market as a gauge of success is how quickly gains can vanish. In the bond market, the administration is seeing yields move in the desired direction, though the reason behind the drop is potentially worrying. The bond rally — higher bond prices mean lower yields — appears to be the result of economic growth jitters, driven at least in part by the Trump trade agenda. Closely watched survey data suggests softer sentiment, with consumers and businesses calling out tariffs as a reason for caution. The fear is that tariffs might not be as inflationary so much as they will weigh on economic growth. The intrigue: When Trump references lower rates online or in press conferences, he is not necessarily trying to pressure the Fed to lower rates. One day after taking office, Trump told reporters that cheaper energy would "knock out a lot of the inflation. That's going to automatically bring the interest rates down."

1 big thing: Trump's media-control strategy

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President Trump tosses a hat reading "Trump was right about everything" toward the press pool after signing an executive order in the Oval Office yesterday. Photo: Jim Watson/AFP via Getty Images

President Trump is setting a new precedent for tight, punitive government control over a free press, Jim VandeHei and Mike Allen write in a "Behind the Curtain" column.

• Why it matters: Trump and his administration are doing this systematically, gleefully and unmistakably. But as we've written before, this unprecedented shift could set the precedent for future Democratic presidents, too.

The big picture: Trump frames this as payback for what he calls incompetent, left-wing coverage, and the White House says it's expanding access to new voices and outlets. The White House Correspondents' Association says he's tearing "at the independence of a free press in the United States."

• The end result is twofold: much tighter control over media, and new tools and tactics to punish critics.

Here is what's different today than 38 days ago:

1. Lawsuits. Before taking office, Trump sued ABC News, CBS Newsand a former Des Moines Register pollster over coverage. This is a new technique for a president or former president — and one getting results. ABC agreed to pay $15 million to Trump's future presidential library instead of fighting in court. CBS also appears to be heading toward settling. Hard to see how this doesn't encourage more lawsuits and entice future presidents pissed off about coverage to do the same.
2. 
   
3. Blacklists. Trump barred AP from the Oval Office and Air Force One for refusing to use "Gulf of America" instead of "Gulf of Mexico" after he made the change by decree. AP, a global newswire that writes the stylebook most U.S. media outlets follow, has been a pillar of White House coverage for more than a century. Denying access, and mandating word choices, are new tactics for a president. Imagine a Democratic president renaming it the Gulf of Obama — and targeting Fox News for refusing to call it that. Fox and the conservative Newsmax were among the outlets protesting AP retribution. Jacqui Heinrich — Fox News senior White House correspondent, and a White House Correspondents' Association (WHCA) board member — wrote on X: "This is a short-sighted decision, and it will feel a lot different when a future Democratic administration kicks out conservative-leaning outlets and other critical voices."
4. 
   
5. Stacking the deck. For decades, until yesterday, the White House had little say in the choice of media organizations responsible for covering official actions and trips via what's known as the press pool. In response to AP's suit over access, the White House seized control of this process, formerly run by WHCA. Trump has promised to keep traditional media companies part of the mix. But if the new system holds, he and future presidents could surround themselves with friendly reporters asking friendly questions — and punish those who don't.
6. 
   
7. Shielding Cabinet officials. At the Pentagon, where reporters both work onsite and serve in a rotating pool that travels with the SecDef, a similar purge has unfolded. First, the Pentagon booted NBC News, the N.Y. Times, Politico and NPR from their physical workspace as part of a new "annual media rotation program" — substituting friendly outlets + HuffPost, which had no Pentagon reporter. A week later, CNN was ousted from its workspace. Good riddance, MAGA supporters say. But will a future Democratic president do unto conservative news sources as the Trump administration has done to the legacy media?

Behind the scenes: Taylor Budowich, a White House deputy chief of staff intimately involved in this process, told us there's more at play here, and insisted the moves aren't motivated by suppressing dissent. The White House feels access to limited areas like the Oval Office and Air Force One shouldn't be guaranteed to a select few legacy outlets — but instead should be opened up to include both MAGA voices, and other new or niche nonpartisan publications with more domain expertise.

• Budowich said the goal is to drive a "ratings bonanza" by leveraging the reach of traditional outlets with the fresh approach of some newer media players. "The established process doesn't serve people well," he said. "We want to provide more opportunities ... for those who want to do things differently."
• A New York Times statement last evening called the White House's move "an effort to undermine the public's access to independent, trustworthy information about the most powerful person in America."

The Axios approach: As we wrote a week ago, Axios takes a clinical approach, like a doctor. We simply want to give you the facts and insights to make better decisions and live better lives.

• But these changes curtail the free press, both now and if Trump or future presidents take it further.

Trump allies on X played up efforts by former President Biden to ensure friendly press interactions, including extremely limited press contact and prescreening of reporters' questions, in contrast to Trump's freewheeling sessions.

• The Biden administration culled the list of "hard pass" holders with permanent credentials — access the Trump team says it's restoring.

The bottom line: Tough questions, serious scrutiny, free thought, transparent access to key historical moments. These are decades-long precedents that keep the public informed.

Wednesday is the big day. The news comes out right around 4:20. This is a very big deal. In case you're not keeping up with the index weightings, here's the cheat sheet: Nvidia = 17.9% of the Semiconductors Index Fund $SMH Nvidia = 7.4% of the Nasdaq100 Index Fund $QQQ Nvidia = 12% of the S&P Technology Index Fund $XLK Nvidia = 9.3% of the Russell1000 Growth Index Fund $IWF And a lot more... This is a very big deal. I would be the first to tell you if it wasn't. But I think Wednesday's earnings release is going to be that much more impactful this time around because of the current state of the market. Look at the Semiconductors Index relative to the S&P500 potentially completing a massive top. If we lose Semi's, then bull market cancelled. It's that simple:

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The big question is: Will this report spark a fresh rally or signal the end of the easy gains in AI?

Whatever happened to the Trump 2.0 American Exceptionalism Trade? With a pro-growth president devoted to deregulation, and bent on asserting US dominance over everyone else, the conventional wisdom was to pile into US assets and crypto, and brace for bond yields and the dollar to surge higher. All that happened in the weeks after the election. But since Donald Trump actually took office on Jan. 20, and particularly in the last week, all the Trump trades have reversed:


In large part, this is a renewed growth scare. Angst that the DOGE job cuts could slow the economy in the near term is part of it. Business surveys have been downbeat, while the latest Conference Board survey of consumer sentiment, published Tuesday and the first since Trump took office, dropped sharply. In his first term, expectations rose immediately; this time, even though his arrival in office has been accompanied by far more excitement and action than he generated in the first, it seems consumers are more dubious:


The growth scare has also shown up in a sharp move in rate-cut expectations from the Federal Reserve. The ratio of stocks to bonds (proxied by the popular ETFs SPY and TLT) has moved perfectly in alignment with the futures contracts trying to predict the fed funds rate at the end of this year. Stocks don’t appear reliant on rate cuts, as they surged in the last few months of 2024 even as projected December 2025 rates rose by more than a percentage point. What’s happening now is plainly a dose of nerves about growth:


And yet, inflation expectations are also going up — a move that all else equal would imply that fed funds would have to rise, not fall. This is what just happened to the Conference Board’s measure of expected inflation for the next 12 months, on both a mean and median basis:


The Conference Board doesn’t break down its respondents by political identification — we can assume that Democrats are far more bearish about increasing inflation than Republicans. However, the median could not have risen so much without a significant cohort of Independents and Republicans adjusting their views higher, presumably because of fears of what tariffs will do to prices.

There’s a name for a growth scare combined with rising inflation expectations. “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck,” comments Vincent Deluard of Stonex Financial. “Similarly, if growth slows, inflation accelerates, gold soars, and the dollar rolls over, then it is probably stagflation.”

Efforts by the Trump administration and Elon Musk's Department of Government Efficiency to cut vast numbers of federal jobs will surely show up in national economic data — but don't expect the impact to be massive, or immediate. Why it matters: In a $30 trillion economy with 159 million jobs, it takes a lot to meaningfully move the dial. The types of cuts to federal employment and government contracts that have been enacted thus far by the DOGE crew are comparatively small scale. That could change if President Trump and congressional Republicans enact a bigger agenda of austerity. State of play: The administration is seeking to lay off probationary federal employees (those who've been on the job for less than a year), of which there are about 220,000, assuming they overcome pending legal challenges. Another 77,000 federal workers have accepted DOGE's buyout, which keeps them on the payroll through September. An open question is how many of those workers find new jobs, how many experience prolonged unemployment, and how many exit the workforce entirely. By the numbers: SGH Macro Advisors estimates that a third of laid-off workers find a new job within three weeks, 50%-55% remain unemployed for a longer period of time and around 15% leave the workforce. That's based on the Labor Department's Displaced Worker Survey, which tracks what happens to laid-off workers. Using that arithmetic, it implies 220,000 federal layoffs would only raise the national unemployment rate by 0.07%, not the kind of move that makes economists — or central bankers — panic. Yes, but: With so many federal workers entering the job market at once, it could prove a more challenging job market for displaced federal workers than the historical experience would suggest. Of note: February jobs data due out Friday is unlikely to show much impact. The "reference week" for that payrolls report is the week that included Feb. 12, when the cutbacks were just getting started. If you squint, you can start to see evidence of cutbacks in the weekly initial jobless claims data. Over the last two weeks, there have been an average of 1,654 new claims for unemployment benefits in the District of Columbia, which is about three times the 2024 average. There were 613 claims to the unemployment insurance program for federal workers in the week ended Feb. 8, up from 382 a year ago. That number is released with a two-week delay and will presumably rise further. Reality check: The potential labor market effects are larger if the Trump administration and Congress enact major reductions to federal spending — in the hundreds of billions, not the comparatively small programs DOGE has targeted so far. House leadership is planning a vote on a path forward for a tax bill that includes $2 trillion in spending cuts over the next decade, concentrated in Medicaid, food assistance and clean energy subsidies. The bottom line: "The Federal Reserve is unlikely to react to a 0.1% rise in unemployment, particularly one that is easily identifiable and more of a one-off change in policy," wrote Tim Duy and Josh Lehner, of SGH Macro, in a note. "However, any broader impact hinges on federal spending," they added.

Oil News:

President Trump’s recent push for a deal between Russia and Ukraine, his foot-dragging over Canadian and Mexican tariffs, and expectations of OPEC+ supply increases from April onwards have seen interest in crude oil futures plunge to multi-month lows.

- Open interest in WTI futures is now the lowest in nine months, falling to 2.12 million lots in the week ending February 18 according to CFTC data, with investors switching en masse to gold.

- The net length held by hedge funds and other money managers has posted four straight week-over-week declines and now stands at the equivalent of 103 million barrels, its lowest since October 2024.

- After hedge funds were incessantly shorting diesel futures in the US between June 2024 and January 2025, positioning in the ULSD futures contract finally turned long and net length ticked in at 11,872 lots in CFTC’s most recent data, suggesting tight distillate stocks could be a moderately bullish factor over the upcoming weeks.

Market Movers

- US oil major ConocoPhillips (NYSE:COP) agreed to sell its interests in the US Gulf offshore fields Ursa and Europa to Shell (LON:SHEL) for $735 million, as part of its divestment program after the $22 billion Marathon Oil takeover.

- Norway’s national oil firm Equinor (NYSE:EQNR) is reported to be looking to sell its onshore assets across Argentina’s Vaca Muerta shale play, believed to be worth some $1.3 billion with YPF potentially using its right of first refusal.

- Canada’s Equinox Gold (TSX:EQX) has agreed to acquire Calibre Mining (TSX:CXB)in a $1.8 billion all-stock deal, creating the second-largest gold producer in Canada with an implied market cap of $5.4 billion.

- Portugal’s national oil company Galp Energia (ELI:GALP) reported a significant discovery of light oil and gas condensate in its Mopane-3X well, confirming huge reserves in its 2024 multi-billion-barrel find.

Tuesday, February 25, 2025

At the same time that US-Russia talks on a final Ukraine settlement are underway, the Trump administration has been tightening the screws on Iranian oil supply. The White House announced yet another round of sanctions on anyone believed to facilitate Tehran’s exports to China. Despite that move, ICE Brent futures currently trading around $74 per barrel, beneath the $74.29-77.00 per barrel range that has so far contained every single settlement this month.

Trump Mulls Revival of Keystone XL. US President Donald Trump called for the immediate relaunch of TC Energy’s (TSE:TRP) 800,000 b/d Keystone XL pipeline, supposed to bring heavy Canadian barrels to US refineries, saying the project was ‘viciously jettisoned’ by the Biden administration.

US Slaps New Sanctions on Iran’s Fleet. The US Treasury Department imposed new sanctions on Iran’s oil industry this Monday, blacklisting more than 30 brokers and shipping companies for their alleged participation in trades, in line with President Trump’s maximum pressure pledge on Tehran.

Europe Lifts Sanctions Against Syria. European Union countries lifted most of sanctions against Syria, including restrictions on energy, banking and transport, a month after former al-Qaeda commander Mohammad al-Julani seized power from Bashar al-Assad, also lifting asset freezes for banks.

BP Continues to Review Corporate Strategy. UK oil major BP will scrap its target of increasing renewable generation 20-fold by 2030, to be announced this week by chief executive Murray Auchincloss, as its current 8.2 GW renewable generation capacity is a mere fraction of the 50 GW required.

M&A Megadeals Shift to Service Companies. Italy’s Saipem (BIT:SPM), one of the world’s largest oilfield services companies, has agreed to merge with Norway’s Subsea 7, creating a global services giant with revenues of $21 billion per year and an order backlog of some $45 billion.

Guyana’s Surge Triggers South American FOMO. The political class of French Guiana is lobbying the French government to revoke its 2017 moratorium on oil and gas prospecting and allow oil companies to appraise the region’s offshore resources, prompted by neighboring Guyana’s success.

Defying Damage, CPC Flows Continue. Flows through the CPC pipeline that brings Kazakh oil to global markets continue uninterrupted despite last week’s Ukrainian drone attack on a pumping station in Russia, casting doubts on whether damage repair could be done quicker than two months.

EU Carbon Border Idea Runs Aground. Brussels is set to water down its carbon border adjustment mechanism (CBAM) by exempting some 99% of European businesses from paying levies on CO2 emissions in imported goods, setting a new mass-based threshold of 50 metric tonnes per year.

India Eyes Tightening of Paper Trade Rules. India’s market regulator SEBI has proposed lowering position limits for equity stock derivatives, either at 15% of free-float market capitalization or 60 times the average daily delivery value, wary of potential fallout from an overheated stock market.

Congo Bans Cobalt Exports Until Summer. The Democratic Republic of Congo has temporarily halted cobalt exports, citing an oversupplied global market that saw China’s CMOC double production in the African country to 114,000 tonnes last year, keeping the export ban until at least June 2025.

Alaska LNG Gets Asia Interested. Joining the ranks of Japan and Taiwan, the government of the Philippines has expressed interest in the planned 20 mtpa Alaska LNG project thanks to its geographic proximity, currently relying on Australia for almost 40% of its LNG imports.

Qatar Struggles to Find New Buyers. Potential buyers of Qatari LNG demand that Doha offers lower prices with its long-term supply deals, pushing for a low- to mid-12% Brent oil slope instead of the 13% offered by QatarEnergy, still leaving some 55% of 2ndphase expansion volumes unsold.

Taiwan Detains Chinese Cargo Ship. The Coast Guard of Taiwan detained the Chinese-crewed cargo ship Hong Tai 58, registered in Togo, over suspicions that it damaged a subsea communication cable to the Penghu Islands in Taiwan Strait, the fifth such incident in 2025 alone.





President Trump, Elon Musk, and their band of DOGE budget-cutters celebrate daily, even hourly targets to cut U.S. spending on everything from foreign aid to FAA personnel, Jim VandeHei and Mike Allen writing in a "Behind the Curtain" column.

• Trump himself has teased a balanced budget — an impossibility without historic cuts to America's most popular programs, such as Social Security.

Why it matters: Their proposed cuts are but drips of water in America's overflowing bucket of debt — $36 trillion and counting. In fact, most days, America racks up more interest on its debt — $3 billion per day! — than DOGE can find in savings. That leaky bucket is the reality of your nation's finances.

This column is our attempt to clinically outline the facts about deficits — and efforts to reduce or eliminate them.

The big picture: Trump and Musk are correct that America is drowning in deficits. Some of it flows from silly spending on stale or even stupid programs. Those make for terrific X dunking: Agencies with more software licenses than employees! A $324,671 USDA grant for "Increasing DEIA Programming for Integrated Pest Management"! A $3 million Education Department contract "to write a report that showed that prior reports were not utilized by schools"!

• But trimming fat is harder than it looks: 37% of the contract terminations on an initial list on DOGE's "Wall of Receipts" (417 out of 1,125) weren't expected to save any money, usually because it had already been spent.
• And the only way to truly reduce the deficit is to target the very programs Trump refuses to touch — defense, Medicare, Medicaid and Social Security. They account for 86% of the budget.
• That's reality for a country that, across Democratic and Republican administrations, has spent taxpayer money without restraint or care about debt. This is one area where everyone is guilty.

Musk and DOGE suck up a lot of attention for doing what former Sen. Alan Simpson (R-Wyo.) did by needling "the boneheads of both parties," and the late Sen. William Proxmire (D-Wis.) did with his Golden Fleece Award: highlighting the need for radical change, and the absurdity of many U.S. programs. Even Musk critics should applaud him for getting the public to pay attention to massive bugs in the federal system.

• But the Trump team is also using the guise of budget-cutting to eliminate jobs or areas they disagree with — or that undermine their ambitions.
• In doing so, they're also usurping the power of Congress — which, under the Constitution, sets U.S. spending priorities and budgets. That's producing court fights.

State of play: The idea of DOGE is popular. A poll released yesterday by Harvard's Center for American Political Studies and The Harris Poll found 72% of U.S. registered voters polled online support the existence of a federal agency focused on efficiency.

• Jamie Dimon, JPMorgan Chase CEO, told CNBC in Miami on Monday that while any "bureaucracy pushes back on everything," DOGE "needs to be done," and should be "not just about the deficit. It's about building the right policies, procedures and the government we deserve."
• So Trump and his aides correctly calculate that both the cuts and the tales of government insanity are popular with the vast majority of Americans.

Reality check: Of the roughly $7 trillion the U.S. spent in 2024 (as calculated by Axios chief economic correspondent Neil Irwin)...

• 60% went to mandatory programs — including Social Security, Medicare, Medicaid, veterans' benefits, unemployment insurance and SNAP (Supplemental Nutrition Assistance Program).
• 13% went to defense.
• 13% to interest payments.
• 14% for discretionary spending — leaving Trump not quite $1 trillion.

When you consider where federal money really goes, most DOGE oddities and outrages amount to rounding errors in a sea of government obligations


NVDA reports after the Bell.

The last couple of earnings have been pretty boring. I'm not really expecting too much here.

Today just looks like an oversold bounce. If NVDA earnings disappoint, then I think we see a down day tomorrow. Good earnings, possibly the bounce continues.

So NVDA earnings more important for the overall market than NVDA specifically.

jog on
duc

 

[ducati916]

From Bespoke:

​ Well, we made it through Nvidia (NVDA). The hype surrounding last night’s earnings report was as high as we can remember for any stock reporting earnings in the past and reminiscent of Cisco (CSCO), Intel (INTC), or Microsoft (MSFT) reports in the late 1990s, or Apple (AAPL) reports in more recent years. NVDA’s report wasn’t great, but it wasn’t bad either. The company managed to report better-than-expected EPS and sales, while slightly raising sales guidance. That was good enough (so far) for investors who had set the bar low in recent weeks. The stock is currently trading just about 2.5% higher in the pre-market, and Nasdaq and S&P 500 futures are riding its coattails trading higher by more than 0.5%. Bulls will take it, but as the last few days have shown us, we’re in a market environment where what the market is doing right now is hardly indicative, no less a guarantee, of where we’ll be an hour from now let alone by the end of the day. Add to that a ton of economic data and several Fed speakers on the calendar, and it’s sure to be an eventful day! What happened to sentiment? Everywhere you look, fear has set into the collective mood. Indices that measure economic uncertainty have shot up to record highs, even taking out their prior extremes from the early days of Covid. The latest measures of consumer sentiment from the University of Michigan and the Conference Board also showed much larger than expected declines in their latest readings. But nowhere has the negative turn in sentiment been more pronounced than in the equity market. The CNN Fear & Greed Index gauges stock market behavior by looking at momentum, breadth, options activity, strength in the junk bond market, and demand for safe havens. As of this morning, the index was at 21, putting it in the “Extreme Fear” range.

​ ​

​ Over the last year, the current level of the CNN Fear & Green Index is among the lowest. The only time it was lower was in early August when markets briefly sold off as the Japanese equity market crashed over 10% in a single day.

​ ​

​ The Fear & Greed Index isn’t just an outlier either. The weekly results of the American Association of Individual Investors (AAII) survey just came out, and the bears are out in full force. Starting with bullish sentiment, it dropped from 29.2% last week to 19.4%, the lowest reading since March 2023 when Silicon Valley Bank and other smaller regional banks collapsed. Back then regulators had to take extraordinary measures to ensure the soundness of the banking system, and the S&P 500 was down close to 8% from its recent highs. Today, there’s no crisis to speak of (at least that we know of), and the S&P 500 is down just over 3% from an all-time high.

​ ​

​ The surge in bearish sentiment has been even more dramatic than the collapse in bullish sentiment. After dropping to 40.5% last week, negative sentiment shot up to over 60% for its largest weekly increase since August 2019. As shown in the chart below, current levels are now higher than any point in the current bull market (since October 2022). In the entire history of the AAII sentiment survey, there have only been six other weeks when bearish sentiment was higher, and these occurred during the 1990 recession and Iraq’s invasion of Kuwait, late in the Financial Crisis, and most recently, back in September 2022 right before the market lows. A key difference between now and those periods is that in each one, the S&P 500 was down at least 10% from a 52-week high when bearish sentiment exceeded 60%. Today, the S&P 500 is down just over 3%. It takes a lot less to strike some fear into investors than it has in the past. If there is one word to describe the state of investor sentiment right now, complacent it is not.

​ ​

From JC;

We've never seen anything like this. The S&P500 hit new all-time highs just last week. The All Country World Index is set to close the month at the highest levels of all time. But this week we just saw the 7th highest bearish reading among individual investors EVER. Yes that's right. Ever. The numbers just came in, and over 60% of individuals are bearish over the next 6 months. Less than 20% of them are bullish. How is that even possible? What are they all so scared about?

​

I understands this sort of thing happens. Investors get bearish. That makes sense. But with the S&P500 just 2.4% from a new all-time high? And more and more countries around the world joining the bull market? Yes. Despite all of that, we just had the 7th highest reading among bears ever.

​

It's wild. To me, this is just more of a reason to be spending our time looking for stocks to buy, not looking for stocks to sell. Yesterday, meanwhile, was the most important earnings release of the season. I would be the first one to tell you that it wasn't. Here's the quick cheat sheet as to why $NVDA matters so much: Nvidia = 17.9% of the Semiconductors Index Fund $SMH Nvidia = 7.4% of the Nasdaq100 Index Fund $QQQ Nvidia = 12% of the S&P Technology Index Fund $XLK Nvidia = 9.3% of the Russell1000 Growth Index Fund $IWF NVIDIA just dropped its Q4 earnings last night, and the market didn’t waste any time making its move. Was it just a nothing burger or are we setting up a much bigger move?

Yet more Trump:

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Breaking: Gene Hackman, 95 — the prolific Oscar-winning actor whose studied portraits ranged from reluctant heroes to conniving villains, and made him one of the industry's most respected and honored performers — was found dead along with his wife, Betsy Arakawa, and their dog at their home in Santa Fe, N.M. His life story.

1 big thing: The hard truths about Trump tax cuts
Illustration: Aïda Amer/Axios


Most politicians agree on three truths: We have a spending problem(too much), a tax problem (too high or too low), and a debt problem (way too much).

• Yet the typical response is: Make all three worse, Jim VandeHei and Mike Allen write in a "Behind the Curtain" column.

Why it matters: This truism sits at the very heart of Republicans' fight over a grand budget deal.

• They're trying to convince their members, and the American public, that you can take in less money (taxes), spend more on defense — and somehow reduce deficits without touching the programs that cost the most.

Washington is a city of magical thinking — both parties practice it. Hence, insane deficits under Presidents Biden, Trump, Obama and Bush. We'll grow our way of it! Even if we never do.

• Washington is not a city of math thinking. It's too inconvenient to apply common-sense arithmetic. Instead, you get wonky "dynamic scoring," "budget windows" and "future growth."
• Our favorite new D.C. math: Republicans are backing word and math fog called "current-policy baseline," which allows them to "score" lower taxes as costing nothing. Why? Because they're just extending expiring tax cuts. Make sense? That's the magic of D.C. math.
• A true tell: The solution is always in a future that never comes.

The Trump/Republican budget plan is no different. It's basically a bet that lowering taxes further will juice so much growth that our math problems will ease or even disappear.

• We walked you through the spending reality in our last column. This is our attempt to explain clinically the reality of the current tax system and how Republicans want to attack it with up to $5 trillion in tax cuts.

Let's start with the indisputable facts:

The tax fight could consume Congress for all of 2025. It's truly epic in scale and complexity, Jim and Mike write.

• As TD Cowen policy expert Chris Krueger puts it: A behemoth tax bill is impossible — yet inevitable.

Zoom in: If Republicans fail to move a bill, taxes on American families will rise back to their 2017 levels next year — something every elected Republican views as unacceptable.

• Figuring out the details, and passing them through narrow congressional majorities, is the hard part.
• Democrats are likely to vote in lockstep against the legislation, seeing it as primarily benefiting the very wealthy. If the legislation is paired with Medicaid cuts, as House Republicans envision, that would further energize Democratic opposition.

How taxes work: The IRS collects around $5 trillion in annual taxes from over 200 million taxpayers. Filers who make less than $50,000 pay little to nothing in income taxes after credits and exemptions.

• The difference between what we spend and what we take in = our annual deficit. Total annual deficits rolled together over time = total debt ($36.2 trillion today).

Republicans have long argued tax cuts juice the economy with growth, creating more taxable income and wealth. Some do; some don't.

• But keep in mind: Since Trump signed his 2017 taxes into law, deficits are up 248%! So any growth they helped achieve has been swamped by spending. Hence, America's financial jam.
• The deficit is now running about 7% of GDP — roughly triple the economy's growth rate. Every year that continues, the government will be in a deeper financial hole.

The bottom line: Senate Republicans privately predict they'll punt on taxes for a bit and instead ... spend more. They want $340 billion in increased spending for defense border security and deportation efforts, TD Cowen's Krueger writes in his Washington Research Group newsletter.

• How will they pay for that? Tax cuts and spending cuts. When? later!

• Fact 1: Republicans want to cut taxes by a minimum of $4.5 trillion over 10 years (and by a maximum topping $5 trillion). That's mainly extending President Trump's first-term Tax Cuts and Jobs Act of 2017 — which cut income taxes for most American families and reduced the corporate income tax rate from 35% to 21%.
• Fact 2: Some tax cuts — like encouraging businesses to invest more in equipment and infrastructure — can juice the economy. That's the beating heart of supply-side tax thought.
• Fact 3: Other tax cuts don't spur growth. Trump wants to exempt tip income and overtime pay from taxation, and loosen a cap on the deductibility of state and local taxes. Those provisions, Axios chief economic correspondent Neil Irwin writes, would shift the tax burden away from specific classes of people (servers, people who put in a lot of overtime, and residents of high-tax states) and leave less room for pro-growth tax cuts.
• Fact 4: Trump has tossed tariffs into the mix. In his mind, big tariffs mean other nations will pay the cost of running the U.S. government. Business leaders, mainstream economists and many Republican lawmakers view them as destructive to growth, and ultimately borne by U.S. businesses and consumers. The reason: Higher tariffs typically result in higher costs. If foreign aluminum costs 20% more, someone has to eat the costs — either the company, or you.
• Fact 5: Trump offers conflicting guidance on what he wants in terms of taxes — and any cuts to pay for all of this. He talks of returning more savings to people with tax rebates ... balancing the budget (a mathematical impossibility absent gutting social programs) ... and never touching those actual social programs.
• Fact 6: You could solve the deficit problem by raising taxes enough to erase it. Republicans hate the idea. But Democrats have long held that higher taxes on rich people and corporations could help wipe out deficits without touching social programs. No shot of that in this Congress. But it's an option!

Bitcoin treasury company Strategy (formerly MicroStrategy) acquired an additional 20,356



for approximately $1.99 billion at an average price of $97,514 per bitcoin between Feb. 18 and Feb. 23, according to an 8-K filing with the Securities and Exchange Commission on Monday.


The company now holds 499,096 BTC, worth over $47 billion. Strategy’s total holdings were bought at an average price of $66,357 per bitcoin, a total cost of around $33.1 billion, including fees and expenses, according to the company's co-founder and executive chairman, Michael Saylor. To put that in perspective, Strategy holds more than 2.3% of bitcoin’s total 21 million supply.

The bitcoin acquisitions follow the completion of Strategy's latest $2 billion zero-coupon convertible note offering, announced earlier on Monday, which also granted initial purchasers the option to buy up to $300 million in additional notes. The company did not sell any additional shares of class A common stock under its at-the-market equity offering program during the period.

Saylor again hinted at the acquisition announcement on Sunday, posting on X, "I don't think this reflects what I got done last week," referring to a tracker of Strategy's bitcoin purchases. This latest set of acquisitions is Strategy's fifth-largest, according to the tracker.

Strategy did not purchase any bitcoin the week prior. However, it did flag profitability risks in its annual report on Tuesday, particularly if there is a significant decrease in the market value of its bitcoin holdings as its enterprise analytics software business did not generate positive cash flow in 2024. The firm also warned it may be exposed to greater tax liabilities than anticipated, confirming unrealized fair value gains on its bitcoin could be subject to taxation.





I think we trade lower. SPY 575 is on the cards. The Mag 7 which dragged the market higher are overbought by a long way and as they correct, so SPY will correct.


jog on
duc

 

[qldfrog]

Well kind of freefall now, NVIDIA delayed effect: USD and oil up;
Stock and PM down, surprisingly BTC smallish fall compensated by USD
Could be carnage on the ASX today and we are friday

 

[ducati916]

I think we see it tomorrow.




Mr Saylor must be sweating just a tad.

So who will buy?

Running for safety



If SPY 575 breaks, look out below, there will be a serious move lower, enough to trigger the trading halt.

jog on
duc