2026 Outlook…

 Eureka Perspectives  January 13, 2026  

2026, the year for Outside the Box Surprises. I see the Trump theme of economic and market manipulation running into a wall of his over-reach. In the larger sense, the Trump agenda will no doubt eventually lead to a market crash due to imbalances. With no free market allocating resources, the allocation adjustments to various market sectors will by definition be abrupt and without warning. These allocations will be much more complex than the two story 2025 markets, where just AI and Tech ruled. Sectors in the 2026 mix will be wide ranging, all the different stock types, Tech, AI, Retail, Oil, Climate, etc. as well as Commodities, Bonds, and even the long tail of Gold and Silver.

In taking a look back to our 2025 Outlooks posted on January 7th and July 7th, 2025, the themes of manipulation windup and subsequent crash remain the base case.

First, a look at factors leading to and the potential Outside the Box Surprises.

  1. First, I think one has to start with the base case, Trump Manipulation of the Economy and by extension, the Markets and now the World.
  2. Second, it would appear that Surprise triggers may be linked to Trump over-reach that are appearing on a very real basis.
  3. To list these over-reach issues, here are some that bump out to me:
    • A ) The ICE fiasco, which is basically hiring wanna-be thugs starting with Secretary Noem whose orders are to deport criminal immigrants
    • B ) The Trump anger with the FED over its continued application of solid economics.
    • C ) The whole affordability thing, especially in staples, it is sneaky, just look at your total bill when you leave the store.
    • D ) No doubt tariffs are a root cause, but probably more it is that with AI data analysis, staple retailers can easily spot where big price hikes will be tolerated. Walking out with 25 % hikes in one’s bill from a year ago, are not uncommon.
    • E ) Trumps desire to keep pressure on gas prices is kind of the Trojan Horse in this affordability thing. Of course this increases long-term climate risk factors, which he ignores.
    • Moving on to other issues;
    • F ) And then you tack on all the world issues that are being negatively impacted by Trump; Ukraine, Greenland, and Venezuela. It is one thing to get rid of bad people and criminal activities, it is quite a different thing to ignore sovereignty.
      • G ) The Gold and Silver markets are registering how they measure the Chaos with higher prices, probably a good quick way to watch as to when these markets see stability returning.
      • H ) In the end, Trump’s ratings keep dropping, people are being pushed against the wall and are tired of how their fellow Americans are being treated.
      • I ) Bottomline, even Trump is starting to realize how vulnerable he is in the 2026 election. A big Democratic 60 % take-back could easily ignite impeachment and removal actions for Trump.
      • J ) The one thing Trump has going for him is his Authoritarian approach. He doesn’t need to confer with anyone until the fire starts. Democracy and the Democrats have to wait for meetings to weigh a solid approach.

Having listed a number of factors that could be supportive of Surprises, I will take the opportunity to explore possibilities. First however, I think we need to take a look at what Trump will have to do to change the developing tidal wave. He will have to rethink his whole life, starting with the gold toilet seats, and moving upward from there. He will have to merge his actions with his rhetoric. That will be huge.

In the past two weeks we have seen the first indications that Trump is seeing his vulnerability increasing at a staggering rate. Even though Wall Street and CNBC think it is a big bluff, and it may be until the drama surrounding a new FED chair is completed this coming spring, the fact remains that Trump is eyeing some big stuff for the bottom 70 %. I know everyone talks a lot about the 1 % but they are just the icing on the cake of the very rich. It is the top 30 % where the MAGA rich reside. They want the party to continue. They own Private Equity, the large farms, etc.

Trumps move to enable some movement of money into housing by doing a form of quantitative easing through Fannie Mae and Gini-Mae is just a safe opening shot because it doesn’t really impact the rich very much. On the other hand, his exploration of Private Equity being forbidden to own private residences or Credit Card companies having a lid of a 10 % interest rate is mind blowing to the rich. One of the big ways that inequality is maintained is through interest on consumer debt. I just did a little question and answer thing with an AI app by asking the question of what percent of banking revenues come from consumer debt interest. Here are a couple of points it sent me.

Approximately 56% to 78% of big bank revenue comes from credit card interest. Specifically, Capital One reported that 78% of its income in 2021 was derived from credit card interest, while other sources indicate that interest income accounts for around 56% of total revenues. 

Also, small regional banks are not excluded.

Credit card interest is a significant revenue source for small regional banks, accounting for approximately 80 percent of their profits. This revenue is generated primarily through interest income on revolving balances, which is a key component of the banking industry’s profitability model.

So, I will be watching what starts evolving in this area if Trump’s numbers don’t start improving by July 4th.

There are other sources of surprises out there: Naturally the AI Buildout is keeping GDP numbers strong, but one must keep in mind that the money being invested is a long-term speculation that may or may not provide cash flow coverage in the end. I think when the Macro imbalances can no longer be supported we will find a big factor in an economic and market decline will simply be “AI Cannot really think”. This long-held contention of mine is based on real time work with early Machine Learning AI Technology in the 1980’s. Yes, it can manipulate inputs to death based on history and include analytical biases of the programmers, but a bunch of numbers and beliefs do not necessarily provide smart decisions when new never before seen situations occur.

As I keep mentioning, economic and market manipulation leading to increased inequality for the bottom 70 percent are the driving forces for what we are seeing. Free markets and supply/demand economics are so old school to the current President.

You may note that I have not spoken with a lot of numbers in this outlook. That is because the numbers are really only background drivers in the current environment. The two big drivers of the economy, government deficits and M-2 Money Supply are on a one-way stream upward, so what else does one need to know, just go with the flow until the party seems to be over. Then just be in a good place for the Macro adjustment.

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