Sell Mortimer, SELL
January 12, 2026
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The views in this note are my own, and don’t necessarily represent those of RJO.
–The Trump admin launched a criminal probe against Jerome Powell regarding the renovation of the Fed’s headquarters. Asinine. Anyone with a shred of self-respect currently under consideration to take over as Fed Chair should quietly remove themselves from the running. Reports indicate Pulte of the FHFA is orchestrating the indictment. Bessent didn’t like him before, I would guess that this would only accentuate the divide.
–In honor of the passing of Bob Weir, “Set up, like a bowling pin/Knocked down/It gets to wearin’ thin/They just won’t let you be.”
–Feb gold is up $100 to just over 4600. ESH currently -48 at 6957. The normal template is to try to rally stocks back to unchanged prior to the US open, but might not happen this time. USH is 115-07, down 18 from Friday’s settle of 115-25. Want $200 billion of MBS? Yours. A weaker dollar and spineless Fed doesn’t help the long end.
–Friday featured a hard flattening as Jobs data was better than expected with an unemployment rate of 4.4% vs expected 4.5 from 4.6. Hardest hit were near contracts, M6, U6. Z6 all down 5.5 to 9659.5, 9675.5 and 9681.5 (the latter being peak on the strip). Z7 was -4 (9668.5), Z8 -1.5 (9648) and Z9 unch’d at 9631.5. Implied vol hammered, for example 0QU6 9675 straddle from 52.5 Thursday to 49 settle, 2QZ6 9650^ from 53.0 to 50.5. Ten year breakeven has crept higher from a recent low of 225 bps and ended Friday at a new recent high 230.3. On way to 250…
