Tue, Jan 13, 2026

On Tuesday, the market was skeptical. Investors scrutinized the earnings of American titans and found them wanting. But the most damning audit of the day was not conducted on a balance sheet, but on the federal government itself.

A confluence of events – a legal assault on the Federal Reserve and an exposé on ICE recruitment practices – painted a picture of an administration bypassing the basic safeguards of governance. In finance, bypassing due diligence is called negligence. In the context of the siege of Minneapolis, where unvetted federal agents are now policing American streets, the market is beginning to price it as a liability.

In legal news, the bond market is pricing in a new variable: the incompetence premium.

While the 2.7% consumer price index (above the 2% target) was the headline, the real volatility is being driven by the White House's escalating legal war against the Federal Reserve. The administration’s lawsuit against the central bank is widely viewed by legal experts as frivolous, but the litigation introduces a political risk to the US dollar. By attacking the Fed's independence, the White House is signaling to global bondholders that it prefers a pliable central bank over a stable currency. The bond market does not like to be reminded that the reserve currency is managed by litigants.

Meme-stock traders rushed to Jerome Powell’s defense, calling him their daddy and using other language that a younger generation seems to understand.

The liability within the executive branch was laid bare today in a report by Slate, which confirmed that the surge of ICE agents currently occupying Minneapolis is being built on a foundation of gross negligence.

The report details a recruitment process so desperate for headcount that it bypassed mandatory background checks, drug tests, and domestic violence screenings. A journalist with a public history of anti-ICE activism was hired simply by clicking a digital button – entered on duty without a single human safeguard. The administration brought on 12,000 new ICE recruits in 2025, more than doubling the total number of agents and changing the culture of the organization. The aggressive recruitment continues in 2026, using wartime marketing and recruiting at gun shows and similar events.

This is not a theoretical HR issue. It is the systemic failure that contextualizes the death of Renee Good, the 37-year-old woman shot three times through her driver's side window and killed by an ICE agent in Minneapolis as she attempted to drive away from him.

The administration is deploying a paramilitary force into a major US city with less vetting than a fast-food franchise requires. For investors, this signals a government prioritizing optics and numbers over operational safety and the rule of law. It is a massive liability waiting to explode.

Faced with macro instability, investors demanded perfection from corporate earnings. They didn't get it. The S&P 500 fell 0.2%, and the Dow fell 0.8%.

Chipotle was down 2.3%: The stock fell as the surprise exit of its marketing chief compounded fears over a boycott linked to former investor Bill Ackman’s funding of the Renee Good shooter’s defense. Despite management clarifying that Ackman has fully divested, the sell-off suggests the market views the reputational damage as a lingering liability.

Capital fled to the healthcare sector, betting on companies that solve biological problems rather than political ones.

Moderna up 17.1%: Soared on raised revenue guidance.

Revvity up 6%: Beat expectations, signaling resilience in life sciences.

The message from the bond vigilantes and the equity bears is identical: If you want to run a siege economy, expect a siege discount.