The Market Crash of 2025

From Black Monday to COVID Crash

Mason Sexton is a financial analyst with a reputation for astonishingly accurate market predictions. His track record is nothing short of remarkable.

In the 1980s, he accurately predicted a massive rally in stocks, bonds and gold when few believed such a thing was possible.

He foresaw the 1987 Black Monday crash, warning investors 11 days in advance. And during the 2008 financial crisis, he called the bottom with precision, helping his clients navigate treacherous waters.

• But one of Mason’s most impressive calls came during the COVID-19 pandemic. As markets plummeted in early 2020, Mason accurately predicted both the top and bottom of the crash

• Furthermore, he identified 13 stocks poised for recovery just as markets began to rebound, providing investors a rare opportunity for significant gains.

This ability to navigate unprecedented economic turbulence solidified his reputation as someone who could turn chaos into opportunity.

His ability to anticipate market movements has made him a sought-after figure, with some of the most successful hedge funds paying handsomely for his advice.

But after years of working privately with elite hedge funds and corporations, Sexton returned to public forecasting in recent years, offering insights that have proven invaluable to investors.

Now Sexton has emerged with a new “prophecy.” He warns of a surprise shock that could begin unfolding within the next eight weeks, potentially derailing President Trump’s second term.

Despite current optimism surrounding Trump’s return to office, Sexton believes the administration faces numerous challenges, including unsustainable national debt, record-low savings rates, high credit card debt, persistent inflation and a potentially unstable housing market.

As the financial world holds its breath, many are eager to learn more about Sexton’s methods and what his latest prediction could mean for the future of the American economy.

Sexton’s methods remain a closely guarded secret, but his track record speaks volumes. While his latest prediction warns of a looming economic “shock” that could unfold within weeks, it’s his uncanny ability to consistently read market patterns that leaves many intrigued.

For those curious about how he achieves such accuracy, Sexton’s approach offers a compelling mystery worth exploring.

[Encore presentation: Mason Sexton has kept all his predictions private, reserved for his hedge fund clients who’ve paid him up to $10,000 per month for his uncanny market insights.

But, now, that’s all changed…

On Jan. 29, Mason finally released a new forecast to the public: He sees a significant event on the horizon unlike anything we’ve seen in decades. And it could hit America — in the next eight weeks!

To view the limited-time replay of this exclusive interview, The Prophecy, click here.]

Powell’s Hawkish Pause

“As we predicted, the Fed voted to leave its target rate for fed funds unchanged. This leaves the target rate at 4.50% as set at the December 2024 meeting,” Jim Rickards summarizes.

“Most of Powell’s press conference focused on the [Fed’s] ‘dual mandate’ to maintain price stability and create jobs at the same time. This is practically impossible to do on a consistent basis,” Jim continues.

“Therefore, the Fed is forced to choose which part of the mandate it wants to address. The Fed’s action on Wednesday clearly shows it is more concerned about inflation for now.

“The increase in inflation over the past four months” — from 2.4% in September to 2.9% in December — “may indeed prove transitory, but there can be no assurance of that.”

According to Jim, Powell’s remarks yesterday can best be described as a “hawkish pause” which “refers to the fact that Powell and the Fed will probably not raise rates at the March 2025 meeting either.

“The pause may last longer than many expect,” he concludes.

Microsoft, Meta and Tesla released their latest quarterly earnings reports yesterday, revealing mixed results for these tech giants.

Microsoft reported strong performance, with revenue increasing 12% year-over-year to $69.6 billion, surpassing analyst expectations. The company's AI business showed significant growth, reaching an annual revenue run rate of $13 billion, up 175% from the previous year.

Meta also exceeded expectations, with Q4 2024 revenue reaching $48.39 billion, a 21% increase year-over-year. The company’s EPS for the quarter was $8.02, significantly higher than projected.

Tesla’s results were more mixed, beating production goals but falling short on revenue and EPS estimates.

In their earnings calls, all three companies emphasized their ongoing investments in AI and cloud technologies, highlighting the importance of these sectors.

At present, TSLA shares are up 1.5% while META is up about 1.35%. MSFT shares, on the other hand, are down 6.20%.

Checking on the rest of the market, the tech-heavy Nasdaq index is down 0.30% to 19,575. Meanwhile, the S&P 500 and the Dow are both in the green: each up about 0.15% to 6,045 and 44,795 respectively.

As for commodities, the price of oil is up 0.85% to $73.19 for a barrel of WTI. As for precious metals, gold and silver are both catching a bid. The yellow metal is up almost 2% to $2,843.70 per ounce, and silver is up almost 4% to $32.60.

Crypto is rallying, too. Bitcoin is up 1.5% to $105,700, and Ethereum is up 4.30% to $3,275.

DeepSeek: FALSE?

“I bet that you probably never heard of the Chinese AI venture DeepSeek before this week,” says Paradigm’s trading expert Enrique Abeyta. Here’s a quick summary…

“On Jan. 20, the same day as President Trump's inauguration, a Chinese AI startup (founded by a Chinese hedge fund manager) released a new AI model called ‘R1’ that seems to line up competitively against AI models like ChatGPT,” Enrique says.

“They claim they developed the model with an investment of only $6 million and that it uses 80% less compute resources (including power) than existing models.

“If you believe that they have achieved models just as good at a fraction of the cost, it means that massive investments made in AI by technology companies have been way overdone [by] hyperscalers like Alphabet, Meta and Microsoft,” he says.

“Stocks that benefited from these investments — led by Nvidia — [saw] an astounding loss of over $1 TRILLION in market capitalization of these leading technology companies on Jan. 27.

“These are the most widely held stocks by regular investors as well as institutions,” Enrique adds. And if the DeepSeek story is true, it could spell “absolute disaster for the stock market and investors.

“So the big question is this: Is it all true?

“You can certainly figure out relative probability,” says Enrique. “Here are the questions I would ask in this particular situation…

“First question: Do we think that this relatively small Chinese startup figured out something that the most sophisticated technology companies (spending hundreds of billions of dollars) haven’t figured out?

“Answer: Absolutely NOT.

“I think Big Tech was aware,” says Enrique. “And with their vast resources, they will take what DeepSeek has done and do it even better. This work will likely accelerate now.

“Next question: Do we think that DeepSeek was really able to build this model with $6 million?

“Answer: Again, NO.

“Here’s what Elon Musk, the most successful technology entrepreneur of all time, had to say on the subject…

This was Musk’s response to an interview, claiming DeepSeek “had access to much more technology than they let on,” Enrique notes.

“To put this in context, 50,000 Nvidia H100 chips at the list price of $25K each would cost $1.25 billion — not $6 million.”

Then there’s “distillation”: President Trump’s crypto czar David Sacks says there’s “substantial evidence” that DeepSeek was trained on the data of other AI models.

“Final question:Do we think it was a coincidence that [DeepSeek] was launched on the day of Trump’s inauguration?

“Answer: Absolutely NOT.

“Like every company in China, DeepSeek is ultimately controlled by the Chinese government,” says Enrique. “Don’t ever believe otherwise.

“I think they wanted to make a splash on Trump’s big day,” he says. “It didn’t catch fire on Inauguration Day, but it did a week later.

“Also, remember that a Chinese hedge fund manager started this company,” Enrique says. “Shorting billions of dollars worth of technology stocks and THEN releasing this ‘news’ would have been one of the greatest trades of ALL TIME.”

Enrique’s takeaway? “It’s impossible for ordinary folks — or even the most sophisticated investors — to gain absolute certainty in situations like these.

“But I think the probability is that DeepSeek is a DEEP FAKE.

“As a result, I think we are seeing one of the best buying opportunities in the last five years,” Enrique says.

“I will show you how to do just that on Monday.”

Stay tuned…

DeepSeek: TRUE?

“Let’s imagine, for a moment, DeepSeek is real… and everything they’re telling us is true,” says Paradigm’s AI expert Chris Campbell, taking the other side of the true or false conundrum. 

“Consider Jevons Paradox,” he says. “In the 1800s, people thought better coal efficiency would lead to less coal use. BUT the opposite happened.

“Coal got cheaper, and demand skyrocketed.

“Point? AI efficiency gains won’t reduce AI’s role — they will make AI even more ubiquitous,” he says.

“While some hardware companies may struggle, the broader AI economy will accelerate — and, in our view, become more targeted,” Chris says.

“Lower costs for AI inference and training would widen AI usage, fueling mass adoption across industries, making AI cheaper, more accessible and ultimately more embedded in everyday life.

“Rather than, say, relying on the more speculative artificial general intelligence (AGI) ambitions — which we tend to doubt will work.”

Whether the DeepSeek narrative is accurate or not, Chris concludes: “By and large, the AI story hasn’t changed.”

This Heist Has It All

Last weekend, the Drents Museum in Assen, Netherlands, became a crime scene after thieves used explosives to break in, targeting a Romanian archaeological exhibit.

Their prize? The Helmet of Cotofenesti, a 2,500-year-old masterpiece, plus three ancient bracelets that represent centuries of cultural heritage.

Crafted from electrum — a natural alloy of gold, silver and copper — the helmet weighs 2.2 pounds. Its intricate design features seven rows of conical buttons, dotted spirals and a pair of eyes, perhaps to ward off evil spirits or intimidate enemies.

Courtesy: Wikipedia

Unearthed by a farmer’s son in 1926 in the village of Cotofenesti, the child initially used the helmet as a toy. Later, the ancient artifact was used as a watering trough for chickens. Eventually, the helmet made its way to what would become the National History Museum of Romania in 1929.

Almost 100 years later, thieves knew exactly what they wanted, passing up modern pieces at the Drents Museum and focusing solely on historic treasures that represent Romania’s ancient Dacian civilization.

After the theft, museum director Harry Tupan says he’s “intensely shocked” by the burglary, calling it the most significant event in the institution’s 170-year history — which is an understatement, considering such a cinematic heist.

Dutch authorities today are leaving no stone unturned, collaborating with Interpol and conducting extensive forensic investigations. Meanwhile, a burned-out vehicle discovered near the crime scene suggests this was no ordinary smash-and-grab; thieves had a carefully orchestrated plan.

“Romania's ministry of culture has promised to take all possible steps to recover the stolen items,” the BBC says, “which had been loaned to the Dutch museum from Bucharest.”

We can only assume all parties have insurance. But still…

Take care, reader! We’ll be back tomorrow with another 5 Bullets.

Best regards,

Emily Clancy
Associate editor, Paradigm Pressroom's 5 Bullets