BN Daybreak Mon 19 Jan - Trump’s 'Madman' Strategy; Iran’s brutal crackdown; is a 1929-style crash coming?

Iran admits brutality; Niall Ferguson on Trump’s “Madman Theory”; Andrew Ross Sorkin on the next Great Depression; China’s play for Iron Ore pricing power.In this edition of BizNews Daybreak, Alec Hogg unpacks a volatile start to the week:Iran on the Brink: Supreme Leader Ali Khamenei (86), in power for 37 years, breaks silence, admitting to the brutal repression of recent anti-government protests.The Method to the Madness: Historian Niall Ferguson explains why Donald Trump’s chaotic geopolitical moves—like the bid for Greenland—might be a calculated application of Nixon’s “Madman Theory” to deter adversaries.Market Crash Fears: With anxiety rising, New York Times columnist and Too Big to Fail author Andrew Ross Sorkin weighs in on whether a 1929-style collapse is possible today, or if government debt is the real ticking time bomb.Commodities Shift: Beijing makes a major move to centralise iron ore purchases, threatening the pricing power of global mining giants.Check the bond market, watch the tariffs, and win the day..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Edited transcript of the interview:.Good morning. The markets are moving and so are you from the business studios. This is Business Daybreak for Monday the 19th of January 2026. I'm Alec Hogg. Here is the context you need to win the day.Iran remains front and centre in the headlines this morning, both locally, where there's a furious row inside the Government of National Unity, and internationally, where the world waits to see whether the strong words from the White House will be followed by action, or if it just turns out to be another talker. Trump always chickens out. Meanwhile, Iran's 86-year-old Supreme Leader, who has ruled the country for 37 years in that post and eight years prior to that as the president, has admitted that recent protests were brutally repressed.Here's the latest news from our partners at Bloomberg. Iran's Supreme Leader Ayatollah Ali Khamenei on Saturday said several thousand people died in this month's anti-government demonstrations. This was his first acknowledgement of the deadly scale of the unrest. Some of those were killed, quote, "brutally and inhumanely". Khamenei said this without offering details in a public meeting broadcast on state TV. He accused the US and Israel of aiding the killings and said the Islamic Republic has evidence to support the claim. Khamenei said Iran does not intend to push the country toward war, but won't allow either domestic or international criminals to go unpunished.Members of the European Union are discussing options for how to respond to President Trump's use of tariffs as punishment for EU support of Greenland. Greenland is a semi-autonomous territory of Denmark, itself a founding member of NATO. Now Trump is threatening to seize control of Greenland, potentially with military force. Over the weekend, the president slapped 10% tariffs on goods from eight European countries supporting Denmark. And now we are told the EU is considering the use of retaliatory levies on $108 billion worth of US goods.Today, US Treasury Secretary Scott Bessent said the U.S. will not back down on taking over Greenland. Here is Bessent speaking to NBC's Meet the Press : "Greenland is essential to the US national security. We're building the Golden Dome there—the missile system. And look, President Trump is being strategic. He's looking beyond this year. He's looking beyond next year to what could happen for a battle in the Arctic. We are not going to outsource our national security. We are not going to outsource our hemispheric security to other countries".Thousands of people took to the streets across Denmark to protest President Trump's ambitions to take control of Greenland. Underscoring the deep unease over the future of the Arctic island, the demonstrations unfolded across the Nordic nation's largest cities on Saturday, with crowds gathering in central Copenhagen and outside the US embassy in tandem with rallies in several other cities. Protester Elise Rich in Copenhagen on Trump seeking control of Greenland: "This is important for the whole world. There are many small countries; none of them are for sale".A down Friday and a losing week for the US equity market. We get a wrap-up from Bloomberg's Charlie Pellet. Stocks move lower on concern that President Trump is cooling on his dovish frontrunner, Kevin Hassett, to head the Federal Reserve. The S&P 500 struggled to gain traction and finished lower for the week, down 0.4%, while the Russell 2000 index of small-cap shares kept rising and beat the S&P 500 for an 11th straight session for January. The Russell 2000 is up 7.9% for the week. Dow Industrials are down 0.3%. Nasdaq on the week is down 0.7 per cent. In New York, Charlie Pellet, Bloomberg Radio.Like me, you often wake up, I'm sure, shaking your head thinking, "Surely Donald Trump can't be serious with what he's busy doing now, especially this caper to acquire Greenland". And that is surely like an international incident on steroids. Well, here's a reason, perhaps, why he's doing what he's doing. It's a fascinating take on the method behind Donald Trump's madness.Historian Niall Ferguson suggests what the media is portraying as chaos is actually a calculated geopolitical strategy, one that Richard Nixon tried but Trump appears to have perfected. Ferguson, who is probably the most highly acknowledged historian alive today, argues that by convincing adversaries like Iran that he has a limitless appetite for risk, Trump achieves a level of deterrence that standard diplomacy simply cannot match. Ferguson calls it the Madman Theory. Here's a clip from an interview that he held with Coleman Hughes of The Free Press:"The signal Trump has sent to the world is: 'There is nothing so crazy that I won't maybe do it'. The Iranian regime has to take his word seriously when he says, 'If you start shooting protesters, you know it's going to be very bad for you'. This is one of the ways in which President Trump is rather Nixonian, because Richard Nixon liked to tell Henry Kissinger to tell the Soviets and the North Vietnamese that Nixon was so crazy that he was capable of doing anything, even going nuclear. It was Madman Theory; that was how they talked about it. The problem was that the Soviets didn't think Richard Nixon was really mad. They thought he was a ruthless political calculator. And so it didn't work. But Mike Pompeo said, I remember a year or two ago with Trump, he didn't have to tell anybody that Trump was crazy and might be a madman. He had CNN doing that for him every night. So Trump's a successful version of Madman Theory. The Russians, the Iranians, everybody now understands that he's capable of taking great risks".Scott Bessent said a couple of months ago, "The president has a higher risk appetite than I do". Scott Bessent used to run George Soros's hedge fund, so his risk appetite is, let's put it this way, in the tail of the distribution. Trump is even more ready to take risk than one of the top hedge fund managers of Wall Street, and that's a superpower. It's only really the Chinese who so far have successfully stood up to that.With all the nervous energy being generated by Trump and geopolitics generally, many investors are fretting about another massive stock market crash hitting the world. New York Times columnist Andrew Ross Sorkin is the author of the bestseller about the biggest crash of them all, the recently released 1929. Our partners at Bloomberg Businessweek got hold of him and asked him whether another disaster would or even could happen."So many people on your book tours... everybody's like, 'Is 1929 going to happen again?'". "And I do wonder, is there a better, smarter question that we should be asking you, having done all this research and taken us back there, making us feel like we were in the room when it happened?"."Well, look, it didn't happen in 1921, but I'll tell you actually how you could get to 1932 today. So one of the lessons that came out of 1929—it was actually the lesson that Ben Bernanke learned when he was doing his thesis on the Great Depression at Princeton—is when there's a crash or a crisis or a panic, the playbook is to throw money at the problem. It may be politically unpopular, but that is the lesson. And he did it in 2008. And by the way, we did it again during the pandemic. And I think we now think that there is a playbook. And by the way, there's also, therefore, a 'put' on the market because we have the playbook.""The one thing that's different this time is if you genuinely believe every financial crisis to some degree is a function of debt—too much debt in the system. So far, we're all talking about corporate debt, really. Back then, in 1929, there was a budget surplus in America. Now we have $38 trillion. The question is, let's say we have a crash and the government says, 'You know, we're going to write a cheque for $5 trillion'. That's the 'put'. And whether you believe that there is some kind of invisible line that turns into a red line for the bond market, where they say, 'You know what, we like you guys in America; we'll happily lend you money at 3 or 4 times the rate that we do today'. And that's the interest rate you can pay.""And then all of a sudden, you actually do get into some kind of austerity spiral, and then you're living at a 25% unemployment rate in the country. That's when you really start to try to get through the permutations. How do you get there in this day and age? That's one way. The one other thing that's interesting today is the technology. As bad as it was then, in some cases it could even be too 'good' today. And I think we learned that with the Silicon Valley Bank failure, where someone goes on Twitter and says, 'I'm pulling my account now'. That information is accurate; everybody does it over the weekend. I used to think this device is so great because if there was a bad piece of information, it could be corrected very quickly. But if there's an accurate piece of information that's not good, right, people act on it quickly.""So at best, we keep our eye on the bond market—long-term interest rates—and whether perhaps even the rest of the world will tire of American expansionism and pull the plug on funding 'Trumpland'. Don't forget, America today relies hugely on funds coming in from other parts of the world to keep its budget deficit and keep funding the massive debt pile that it has".Now let's move over to the commodities markets, which is an area that's terribly important to South Africa, and there's a significant shift underway there. The Financial Times reports that China is aggressively stepping up its bulk buying of iron ore. As the world's largest consumer of the steelmaking ingredient, Beijing's move to centralise purchases is a clear play to wrestle pricing power away from global mining giants. It's an important issue for South Africa. Not only are we a seller of iron ore through Kumba to China, but we have many other minerals that the Chinese buy from this country, and a centralised buying office that is discussed in this piece is not just intended for iron ore.Here's the detail: Iron ore is the world's most traded commodity after oil. It's the essential ingredient for producing steel, and China is a huge buyer. Now the heart of the country's import operations is a Beijing-backed company called China Mineral Resources Group (CMRG). It's the central buyer for the country's state-owned steelmakers, and it's starting to put pressure on the foreign mining companies selling iron ore. I'm joined by the FT's Edward White in Shanghai."What role does this Chinese company, CMRG, play in the global market for iron?""CMRG is a relatively new entity. It was basically started by the government in Beijing as a way to combat what China sees as an unfair market. China has been making purchases via a lot of different state-owned steelmakers. It's a disparate group, and that has given groups like Australia's BHP, Fortescue, and Rio a lot of advantage in selling at a price that they feel is good and that the Chinese feel is too high. So CMRG coming in and consolidating that buying position, acting as an aggregated buyer, basically gives China a huge amount more leverage than it ever has had previously in this trade of iron ore.""And why is this a problem? Having a state-controlled Chinese group dictating the terms obviously gives China more power in pricing negotiations, but it also helps China direct and control global supply chains of these key resources that China needs for its economy. Another key worry that both the industry and government officials have is that iron ore is just the starting point, and that over time, CMRG will move across to other things like lithium and copper. Other areas where China is a big importer and has a massive amount of leverage when it comes to purchasing"."And how are Australia's miners responding to this threat?""I think from the point of view of miners, it's a tight balance because they do ultimately have a commodity that is crucial to the Chinese economy. China needs it; they have to buy this stuff from Australia. It's the right chemical balance that the Chinese currently need for their steel mills. But over time, that may change. You have very large iron deposits coming online from other parts of the world. And so I think in the long term, you can see the Australian miners' position, which has been a very, very strong position in these price negotiations, slowly starting to weaken. And obviously, China getting its buying power stronger in the meantime is also adding to that weakening from the Australian point of view".Before we go, I need to remind you that the BizNews conference is coming our way rapidly—less than two months now. We'll be together in Harmony with 600 members of the tribe. Why not join them?. You can go onto BizNews.com and you'll find all the details for the event, which is from March 10th to the 12th: 28 keynote speakers, a special half-day investment masterclass, and a heck of a lot more.Well, now you have the edge. For the full interviews and details behind these stories, head over to BizNews.com. I'm Alec Hogg. Thanks for starting your morning with us. Now go and seize the day.

BN Daybreak Mon 19 Jan - Trump’s 'Madman' Strategy; Iran’s brutal crackdown; is a 1929-style crash coming?

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