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Sunday, April 12, 2026

2026-04-12

 happy birthday, brother

***** denotes well-worth reading in full at source (even if excerpted extensively here)


Economic Fare:


The Iran war and the closure of the Strait of Hormuz are a painful reminder that for all the changes of the past decades, much of the world economy still runs on oil. With every additional day of war, the effects ripple out through the rest of the world. Might our fate be decided by the price of oil? On a daily basis, I’m asked about the economic implications of the war. Here’s the not-so-good, the bad, and the ugly.

Can an oil price spike cause a global recession?

Absolutely. In fact, a significant portion of recessions, at least since the advent of fossil fuels, have been caused by spikes in the price of energy. Maybe you are still smarting from the collapse of real-estate prices in 2008, but historically, problems with energy costs have been a bigger problem. Those days are back. ............


Smells like Liberation Day.

Editorial note:

Before we start, a quick note: War is not a joke and I understand that real mothers and fathers are out there mourning dead sons and daughters. Honestly, I would rather not write about war and its effects on markets because I think the whole thing is gross. But this is my job, so I carry on.

Same deal with politics. I hate it. I dislike almost every U.S. politician on both sides equally. But normally you can quietly ignore all the political idiocy and hypocrisy because it doesn’t leak into the world of markets. In a sane world, good government works like a good referee: present, enforcing the rules, but invisible.

Bad and self-centered showboat referees and umpires make themselves the center of the game. The current government is the biggest, most interventionist, and most publicity-seeking of my lifetime and is constantly intervening in markets via direct state intervention or random policy shocks. So as much as I would prefer not to write about politics or war, I don’t have much choice.

My only other option would be to move to Maine and write novels—but I’m not quite ready to do that yet. Soon, but not yet. So while it often sounds like I am anti-Trump… Really I am anti-big government, anti-war, and anti-politics. I hated Biden’s 2021 fiscal stimulus and I hate the relentless government interventions in 2025/2026. I am an equal opportunity hater.

End of intro. Let’s get started.

I do believe there is a world where oil prices can remain high, supply can remain an issue, and stock prices just ramble on back up to the highs. Much like the cacophony in 2018 with China and the Liberation Day on/off switch, this feels like another situation where the fire gets hot enough that the arsonist finds a firehose, and that eventually leads to calm as people see the random policy shocks are fundamentally mean reverting as some or all of the actors have a finite pain threshold.

The simplest question in a world where 40% of the stock market is tech or tech-adjacent is: Will this thing hurt tech earnings or valuations? If the answer is no: ramble on. In 2022, the market thought the answer was: Yes, Fed hikes will torch long-duration assets. But that was not the case. Same deal in 2025 with the tariffs. Manufacturing is a tiny part of the U.S. economy and American consumers were able to pay the new tax. Even as tariffs created a new wave of inflation, it came on the heels of a disinflationary period so it all kind of cancelled out.

............... People like to make fun of the ECB for hiking in 2008 and 2011 but ultimately in the face of an oil shock, you have to make a decision. It could be right or wrong in hindsight, but you don’t have a time machine. If you don’t hike, oil might keep running and inflationary expectations could spiral out of control. If you hike, you crush demand, and oil prices will eventually drop in response. Sure, they can’t print oil, smart ass, but they can sure as heck dampen demand for it. :]



As the geopolitical theatre surrounding the ‘fragile truce’ between the US and Iran unfolds, a far more severe material crisis is quietly metastasising within the global supply chain. The physical reality of a month-long closure of the Strait of Hormuz is only just now preparing to hit Western shores, as the temporal lag of global shipping finally runs its course.

Orthodox economists and market commentators, trapped within the mechanistic worldview of the Strong Enlightenment tradition, are reflexively dusting off their 1970s playbooks. They are universally bracing for a massive, stagflationary price shock.

They are fundamentally wrong.

When the biophysical disruption of Hormuz finally collides with the current macroeconomic regime, the result will not be traditional consumer inflation. It will be a catastrophic deflationary liquidity crisis ..............

The modern global economy is entirely dependent on heavy industrial middle distillates—diesel for freight, shipping, mining, and agriculture; jet fuel for aviation. But to maximise those specific yields, the massive deep-conversion mega-refineries on the US Gulf Coast are physically engineered to process heavy, sour crude—the exact type of sludge that flows out of the Middle East.

By cutting off the Strait of Hormuz, the US has inadvertently starved its own refineries of their required feedstock. When these refineries are forced to run their own domestic light sweet shale oil through hardware designed for heavy crude, the diesel yield collapses while producing an immense, unmanageable glut of petrol and naphtha.

We are structurally trapped in a 19th-century yield profile while trying to operate a 21st-century heavy industrial supply chain. We have plenty of the fuel required to run consumer saloons, but we are running out of the specific biophysical exergy required to run the tractors, the container ships, and the freight trains that keep civilisation alive. ...............


Market Fare:




................. The most crucial dynamic to understand is that this parabolic melt-up is a purely financial phenomenon. While the indices explode upwards, a fatal divergence is occurring on the ground: the real, physical economy is being systematically starved of capital.

This is the mechanical result of the Resource Entropy Singularity. Real economic activity is not made of money; it is made of work, and work requires physical exergy. When the Middle East is blockaded and diesel crack spreads hit $74, the physical friction of doing anything in the real world—mining iron, manufacturing goods, or transporting food—becomes thermodynamically prohibitive

........................... The Linguistic Thinkers in the financial media are pathologically incapable of observing a terminal margin call. When they see a green arrow on a screen, their operating system immediately forces them to map it to a positive, grammatical narrative.

They attribute the hyper-inflationary explosion of the Nikkei to ‘cautious optimism’ over a geopolitical ceasefire. They cannot comprehend that a ceasefire does not instantly manifest the physical molecules required to restart the Asian petrochemical industry, nor does it reverse the 15% US tariff vacuum that is actively destroying the Yen. The market is not rallying on the hope of peace; it is melting up on the raw panic of base collateral destruction.

The financial press is looking at the thermal signature of a dying fiat currency and reporting it as a triumphant victory for diplomatic statecraft. ..............


Investors questioning private credit’s numbers could do the same at private-equity funds

............ Private-equity funds, for example, have ample opportunities to book large gains with subjective valuations and hold them in place for years. Unlike a debt-focused fund, where the upside is capped, a private-equity manager can manufacture home-run performance on paper by marking up ownership stakes in closely held companies or other private-equity funds


Today’s Private Credit Isn’t the GFC
  • In 2008, banks were levered anywhere from 25 to 40 times, primarily funded by short-term deposits and heavily exposed to subprime housing. The underlying assets were 90%+ loan-to-value mortgages, layered with complex derivatives that obscured the risk.
  • Simply put, this in no way resembles what is happening today.
  • In private credit, Business Development Companies (BDCs) typically borrow less than 1x their own capital. They use structures that don’t rely on deposits or overnight capital. And they lend to companies, not subprime homeowners, usually only around 40% of what the business is worth.


A.I. Fare:

Why Claude Code changes everything



............... Ciriello is one of five skilled workers aged 50 and older who spoke to the Guardian about how, after struggling to find work in their fields, they have turned to an emerging and growing category of work: using their expertise to train artificial intelligence models.

Known as data annotation, the work involves labeling and evaluating the information used to train AI models like Open AI’s ChatGPT or Google’s Gemini. A doctor, for example, might review how an AI model answers medical questions to flag incorrect or unsafe responses and suggest better ones, helping the system learn how to generate more accurate and reliable responses. The ultimate goal of training is to level up AI models until they’re capable of doing a job as well as a human could – meaning they could someday replace some of these human workers.

The companies behind AI training, such as Mercor, GlobalLogic, TEKsystems, micro1 and Alignerr, operate large contractor networks staffed by people like Ciriello. Their clients include tech giants like OpenAI, Google and Meta, academic researchers and industries including healthcare and finance.

For experienced professionals, AI training contracts can be a side hustle – or a temporary fallback following a layoff – where top experts can, in some cases, earn over $180 an hour. But that’s on the high end. For some older workers like Ciriello, it represents another thing entirely: a last refuge in a brutal job market that is harder to stay in, or re-enter, the older they get.



Quotes of the Week:

ChatGPT: Punchline: The market got a ceasefire, not a cure—so bonds are dating peace, not marrying it.



Charts:
1: 
2: 
3:



(not just) for the ESG crowd:

Study shows thawing permafrost releases much more greenhouse gas than expected

............... Globally, permafrost is estimated to contain about 1,700 billion tons of carbon, roughly three times the amount currently in the atmosphere. 

If warming causes more of that carbon to be released as carbon dioxide and methane, it risks creating a feedback loop: warming causes thaw, thaw releases gases, gases cause more warming. ...........



U.S. B.S.:

Notes on American exceptionalism, militarism, and the much-needed force of antiwar politics.

............... The media scribes who feed Americans information evade both America’s habit of war crimes and the false pretenses on which war crimes are being committed; they channel your attention only to these sociopathic cost-benefit questions about whether despicable acts of evil are maybe good (or not so good) for Americans. 

................ If the language of opposition to one war is the language of much larger war preparations elsewhere, then we are lost. At minimum, it’s a sign of just how hegemonic militarism is in American life.



War Fare:


........... We are seriously concerned about strikes that have hit schools, health facilities, and homes. The Iranian Red Crescent reports that “67,414 civilian sites have been struck, of which 498 are schools and 236 health facilities.”





............ Then there’s the fact that two C-130s were used to extract a single downed pilot—a plane meant to carry nearly 100 passengers. Does that strike anyone else as a little suspicious?

........ This puts the failed US clandestine operation 35km southeast of one of Iran’s main uranium sites.

It is therefore only logical to speculate that the F-15E “rescue” operation was a fake meant to smokescreen and conceal something more nefarious.

........................ Iran’s actual airforce, ballistic missile force, etc., has hardly been touched. It’s all underground and bunkered up in the east of the country, with the IRGC dispersed all over and simply “waiting the US out” until key offensive munitions run out.

....... This is precisely why Trump has now shifted to hitting only civilian infrastructure, as per his deranged rant earlier. He has nothing left to hit that could possibly move the needle at all—he’s out of options.


The consequences of the war with Iran will break Western hegemony and place significant resources and power into the hands of the Global South much more quickly than would have been the case under peaceful scenarios. Trump is merely deciding how deeply the world will be drenched in blood along the way.

It is truly staggering to realize that the Western media still have not recognized that this war against Iran—which Israel and the United States are waging in a manner that defies every legal and moral standard—is already lost, and that the consequences are already written in bold letters on the wall: Western hegemony is a thing of the past; the fate of the EU and NATO hangs by a thread; West Asia will have new masters; and Iran, as one of the oldest civilizations on Earth, will once again assume its rightful role in the future. 

In this article, I will first examine the final outcome, which is already foreseeable, since the balance of power and the parties’ sustainability are obvious, and the fanatical aggressors’ capacity for escalation is far more limited than it appears at first glance. The war may come to an end in various ways, but the result will be the same in any scenario. The question is “only” how deep President Trump is willing to wade through blood. The death toll is directly proportional to the duration of the conflict.

So I’ll start with the end of the story, since the ending is easier to outline than the path leading up to it. ...........



................. Eleven: Iran is not going to sign a ceasefire deal, because they know that Israel and the US will keep assassinating their leaders and eventually launch another war. Well, I was WRONG. I suspect Iran’s making a mistake, but we’ll see. Iran is saying Trump accepted their 10 point proposal, if so Iran won the war and this ceasefire makes sense.

Twelve: There can be no peace deal which leaves the US any bases in the region, because the US is, to use the delightful Russian phrase “agreement incapable.” The US has never kept any agreement it didn’t feel like keeping and it certainly won’t do so with Iran. Any promises to never attack again and stop assassinations cannot and will not be trusted by Iran’s leadership. This means Iran must win the war decisively, in a way that makes it as difficult as possible for the US to attack again (no bases in region) and Israel too scared to do so because they know any attack or assassination will mean immediate and savage retaliation.

Thirteen: The Iranians have included Lebanon and Hezbollah in their demands: Israel will have to withdraw from Lebanon and stay out and not bomb it ever again. Again, this is a maximal goal and requires a complete victory.

Fourteen: Iran is never giving up control over the Strait of Hormuz. This is especially true now that their industry and civil networks have been hit hard. They will need a lot of money to rebuild. They have also said they want reparations. I don’t think that will happen, but I could be wrong. The more damage the US and Israel do, the more Iran is incentivized to use Hormuz as a lever to get money. ....................

Nineteen: Barring the use of nukes, Iran will win this war. The longer it takes and the more damage that is done to them, the more they will use their control of Hormuz and their ability to hit any Gulf State, to obtain the needed reconstruction funds and assistance.

........... Twenty-One: The economic impact of this war, even if it stopped today, would be bad enough to cause a major worldwide recession. If it continues, we will see economic devastation which will last for years. There will be famines. There will be brown outs and blackouts. Jet travel will only be for the wealthy. ............


How the United States lost control—and Iran gained it


(there are no good ones)




This will not last for long... 

...................... Whether the war lasts for a few weeks or months from here on, it will continue. Do not trust any ceasefire nonsense. It’s here just to provide a short breather and for markets.


The Netanyahu government wants different things than the US, so even if Trump wanted to pursue peace, his 'partner' is likely to make things difficult


Killing the Negotiators Doesn't Help

........ On Tuesday evening (April 7th) when the American press began reporting the alleged details of the cease fire agreement, it quickly became apparent that the Americans hadn’t read the Iranian proposal. The American press was reporting that the Iranians had agreed to the Trump administration’s ’15 Point’ plan while the Iranians were under the impression that the US had agreed to the Iranian ’10 Point’ plan. There is little overlap between the two plans. In other words, there is no conceptual basis for peace negotiations.

......... Recall that Donald Trump’s first announcement regarding the alleged cease fire deal was that the Strait would be immediately reopened and that ship traffic would transit the Strait smoothly. Had Iran capitulated on control of the Strait, its main source of economic leverage against the West would have been given away. That the Strait is still closed suggests that the Iranians finally understand who they are dealing with.

................................ With respect to Iran, Trump is calling on NATO to open the Strait of Hormuz for the US. Apparently, no one has explained to him that through both strategy and geography, Iran will control the Strait for the foreseeable future. Trying to enlist other nations in a fool’s errand is a fool’s errand. It indicates that Trump simply does not have the mental capacity to lead the US back out of the mess that he has gotten us into. The triumvirate of crazy, stupid and evil are coalescing. But again, Trump is but a symptom. Biden brought us to the same place in Ukraine.

..... With the Iranians knowing most of what is written here, their choice to move ahead with negotiations suggests either knowledge of facts that we aren’t privy to, a need to keep China on Iran’s side at whatever the cost, or a basic human willingness to talk in order to work through problems. Again, it appears that they know who they are dealing with now.

................

The complete statement from Iran regarding the alleged cease fire with the US can be found below my comments in bold. It the best explanation of recent Iranian actions that we are likely to get.

.................. The honourable nation of Iran must know that, by the grace of their children’s struggle and their historic presence on the scene, the enemy has been pleading for over a month for the cessation of the fierce fire of Iran and the Resistance. However, the country’s officials—because it had been decided from the very beginning that the war would continue until objectives were achieved, including the enemy’s regret and desperation and the removal of long-term threats from the country—gave a negative response to all these requests, and the war continued until today, which is the fortieth day.

Furthermore, Iran has so far rejected several deadlines presented by the President of the United States and continues to emphasise that it grants no importance to any type of deadline from the enemy.

We now give tidings to the great nation of Iran that almost all war objectives have been realized and your brave children have driven the enemy to a historic helplessness and a lasting defeat. Iran’s historic decision, backed by the unified support of the entire nation, is to continue this battle for as long as necessary until its massive achievements are consolidated and new security and political equations are created in the region based on the acceptance of the power and sovereignty of Iran and the Resistance.

.......... To this end, while rejecting all plans presented by the enemy, Iran drafted a 10-point plan and presented it to the American side via the country of Pakistan. It emphasized fundamental points such as controlled passage through the Strait of Hormuz in coordination with Iran’s armed forces (which grants Iran a unique economic and geopolitical position), the necessity of ending the war against all components of the Axis of Resistance (which signifies a historic defeat for the aggression of the child-killing Israeli regime), the withdrawal of U.S. combat forces from all bases and deployment points in the region, the establishment of a secure transit protocol in the Strait of Hormuz such that it guarantees Iranian dominance according to the agreed protocol, the full payment of Iran’s damages according to estimates, the removal of all primary and secondary sanctions and resolutions of the Board of Governors and the Security Council, the release of all blocked Iranian properties and assets abroad, and finally, the approval of all these items in a binding Security Council resolution. It is worth noting that the approval of this resolution will turn all these agreements into binding international law and will create an important diplomatic victory for the nation of Iran.

Now, the honourable Prime Minister of Pakistan has informed Iran that the American side, despite all outward threats, has accepted these principles as the basis for negotiations and has surrendered to the will of the Iranian nation. Accordingly, at the highest level, it has been decided that Iran will engage in negotiations in Islamabad with the American side for a period of two weeks, based solely on these principles. It is emphasised that this does not mean the end of the war; Iran will only accept the termination of the war once the details—given the acceptance of Iran’s preferred principles in the 10-point plan—are finalised in the negotiations. ...................

If the enemy’s surrender on the battlefield is transformed into a decisive political achievement in the negotiations, we will celebrate this massive historical victory together; otherwise, we will fight side-by-side on the battlefield until all the demands of the Iranian nation are met. Our hands are on the trigger, and the moment the slightest error is committed by the enemy, it will be responded to with full power.”

End of Iranian Statement


............... This is probably why Trump is considering blockading access to the Strait himself, but countries will start sending military escorts, especially China if he does, because many countries are going to have serious problem: no cars on the road, no fertilizer for farms, no diesel for tractors, no bunker fuel for ships crises if this goes on much longer. Plus, of course, Ansar Allah will then shut the other Strait.

However much they may be scared of the US, however much they may be trained to be vassals, East Asian countries NEED Gulf Oil.

And if the US fires on escorts, well, that’s how World War III starts



...



Geopolitical Fare:

Hormuz and the end of American hegemony

The closure of a strategic waterway by a besieged nation ranks among the rarest and most consequential events in the history of the global economy. It has happened only twice in the postwar era. In 1956, Egypt closed the Suez Canal for five months – an act that broke Britain’s imperial currency and inaugurated the petrodollar age. It demonstrated for the first time that a small country could inflict serious damage on the economic order that had subjugated it. Now Iran has effectively blockaded the Strait of Hormuz, through which a quarter of the world’s seaborne oil passes. The question is whether this crisis heralds the end of American hegemony – and marks the beginning of the struggle over who or what will replace it.

............................................. In retrospect, then, Suez did not quite mark the end of an era. Rather, it was the moment when the transition from sterling to dollar hegemony first became visible. Much the same is true of Hormuz. The question is: what is the next order going to look like? ....................





Other Fare:

Or: If you're so smart, why aren't you happier?

...................... Today you might hear self-help gurus talk about flow so constantly that the monosyllable has become a cliché without a clear definition. Csikszentmihalyi summed it up this way:
The best moments usually occur when a person’s body or mind is stretched to its limits in a voluntary effort to accomplish something difficult and worthwhile.
That’s pretty good. But of all the passages in his 1990 book Flow, I think this one comes closest to capturing the nearly spiritual quality that he was trying to convey:
The optimal state of inner experience is one in which there is order in consciousness. This happens when psychic energy—or attention—is invested in realistic goals, and when skills match the opportunities for action. The pursuit of a goal brings order in awareness because a person must concentrate attention on the task at hand and momentarily forget everything else. These periods of struggling to overcome challenges are what people find to be the most enjoyable times of their lives
Flow suggests a waterway—something liquidly effortless, an unimpeded stream. But the wisdom of Csikszentmihalyi was to recognize that well-being is no lazy river. It is neither ease nor effortlessness that leads to the highest happiness. It is something close to their opposite. It is immersion in an activity that is hard, but just hard enough; it is the discovery of comfort at the outer realm of difficulty. Life feels best, not when it is smoothed with frictionlessness, but when it is filled with achievable challenges. ..................

I’ve come to believe that something similar has happened in pop culture. Entertainment and tech companies have gotten smarter about putting consumers into bastardized flow states that leaves people feeling drained and sad rather than challenged and enlarged as selves. Modern leisure recapitulates the goal of flow while evacuating the purpose, which Csikszentmihalyi summarized as “to make life more rich, intense, and meaningful.” Algorithmic flow is flow without achievement, flow without challenge, flow without even volition. What Wu calls “passive flow” and Bloom calls “shitty flow” deserves a harsher and more specific label. To be lost in the lazy river of algorithmic media is to be lost the current of life without a mind. Zombie flow. .............


Wealth and asset concentration in the United States, by the numbers.


The real cost of building a home is measured in thousands—not hundreds of thousands. The rest is extraction.


Thus Spoke Zarathustra?
Zoroastrianism: Religion of Ancient Iran

Zoroastrianism is one of the world’s oldest religions. Otherwise known as Mazadayasna by those who follow it, the roots of Zoroastrianism date back as far as the Second Millennium BC and served as the state religion of Persia and other Iranian Empires for more than a millennium.


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Sunday, April 5, 2026

2026-04-05

 ***** denotes well-worth reading in full at source (even if excerpted extensively here)


Economic Fare:


…... Several major bond fund managers, including JPMorgan Chase & Co. and Columbia Threadneedle Investments, reckon that higher bond yields this month are misjudging the risks of a slow down, according to Bloomberg News. “What tends to begin as an inflation shock can quickly migrate into a growth shock, and we are on the cusp of seeing a significant weakening in the economy,”



In its latest review of the impact of the Middle East conflict on the world’s economies, the IMF summed it up: “Although the war could shape the global economy in different ways, all roads lead to higher prices and slower growth.” .......




Red Sea supplies are also at risk now the Houthis have joined the Gulf war

......... Trump says America “doesn’t need” the Strait of Hormuz.

Who put that idea in his head? The US imports eight million barrels a day (b/d), either refined products or heavy crude to balance its refineries. It has four times the petrol dependency per capita of the UK.

............ Trump says the bombing campaign has already achieved “regime change” in Iran. Indeed it has, consolidating the power of the most virulent bitter-enders. It has scotched the snake, not killed it.

“What we are seeing in Iran is a transformation within the regime itself, one that has made it more extreme,”

......... Vali Nasr, the author of Iran’s Grand Strategy, a political history of the country, says the White House has misunderstood the country on every level. The hated clerical regime was dying and would have collapsed internally if outsiders had left it well alone.

The US-Israeli attack – and Trump’s hideous delight in inflicting violence – has given it a new and more dangerous lease of life.

...... JP Morgan says the world is facing a “ticking time bomb” as physical shortages hit fresh regions one by one: first South Asia, then the Far East, then Europe and finally the Western Hemisphere, reflecting tanker travel days from Hormuz.

Every corner of the globe will be hit by Apr 20 or thereabouts. Regional prices will converge via arbitrage and there will then be a planetary oil crisis with very few places left to hide.


Albert Edwards: SocGEN: Global Strategy Weekly: “Crisis? What crisis?” (via The Bond Beat)

…I’ve been reading a lot of scenarios about what might happen in the Iran war with President Trump making many contradictory statements – even on the same day (the $64,000 question for me is what happens if Trump pulls the US out, but Israel continues to bomb Iran). Most commentators and investors appearto not expect this war to wreak the economic havoc some of us still remember from the 1970s. That smacks of complacency to me…........

.... as @PeterBerezinBCA points out on X, “The forward P/E ratio for the S&P 500 has fallen from a high of 23.1 in late October to 19.5 at present. About one-third of the decline in the P/E ratio has been due to the drop in stock prices, with the rest being explained by the rise in forward earnings estimates. The fact that earnings estimates have continued to increase in the face of growing macroeconomic uncertainty is less reassuring than it might appear. Historically, earnings estimates have lagged broader macroeconomic developments. Perhaps even more importantly from an investment perspective, earnings estimates have also lagged stock prices.”

…And that’s the problem. The equity market may be looking in the rear-view earnings mirror and taking comfort from such robust profits growth, especially in the Tech/AI-related sectors (see left hand chart below). Indeed, I see loads of commentary talking about buoyant US profits upgrades. By contrast I have seen only one comment (and believe you me I look at a lot of stuff) that concurs with my contention that profits momentum has begun to stall (right hand chart). It's the second derivative that matters here. And just like in 1974, the market will catch on eventually.


"The centre cannot hold; Mere anarchy is loosed upon the world..."

I’ll cut to the chase. The Trump-Epstein-Netanyahu War could cause more deaths than any war in history, including World War II. This will not be via its direct casualties, but via deaths caused by its economic and agricultural consequences across the planet. For someone who exalts in superlatives, Trump may be responsible for causing more deaths than any previous tyrant in human history.

This is because the world economic system resembles Trump himself: its self-image is one of robust power, but its inner nature is one of incredible fragility. One month ago, many people would not even have heard of the Strait of Hormuz—which Trump, in his bravado, has just referred to as “the Strait of Trump”. Now everyone knows where it is—if not precisely why it matters. We are about to learn the hard way, via the consequences of cutting off this vital artery in the global economy’s circulatory system. 

This should have been common knowledge. But, just like Trump himself, our understanding of the global economy is based on an elaborate set of delusions. ............


Andre Chelhot: What If?
What If America Loses the War

To understand what it would mean for America to “lose the war,” one must first understand the system it built after the collapse of Bretton Woods, because what is at stake is not a battlefield outcome but the architecture of global power itself, and that architecture was reconstructed in the early 1970s when the United States, having severed the dollar from gold under Richard Nixon, faced the urgent need to anchor its currency in something else, something that would preserve global demand for dollars in the absence of convertibility, and what emerged, quietly, strategically, and with extraordinary consequence, was the alignment of energy, security, and capital flows into what later came to be known as the petrodollar system.

This system was never simply about pricing oil in dollars, as is often repeated in simplified narratives, but rather about creating a closed loop in which every economy that sold energy needed dollars and every economy that needed energy needed dollars, and every economy that sold energy accumulated those dollars and needed a place to store them, and that place was the United States, whose financial markets provided depth, liquidity, and political protection, while in return the United States guaranteed something far more valuable than any monetary arrangement: it guaranteed security, of regimes, of infrastructure, and of the maritime routes through which energy flows, and this implicit contract, oil for dollars, dollars for Treasuries, Treasuries for security, became the foundation of the modern global system.


Sleight of hand

You’ve heard it. Trump says it. Energy secretaries say it on Fox News with straight faces. “America is energy independent. We produce more oil than we consume. We’re a net exporter”.

It sounds great. It’s also, at best, a half-truth dressed up in a tuxedo.  ..............

The US produces a lot of crude. Record amounts, actually - around 13.6 million barrels a day in 2025. Nobody produces more. And yes, the US does export some of that crude to other countries.

But the US also imports crude. A lot of it. 6.2 million barrels a day, to be exact.

Do the math: 6.2 million barrels coming in, 4.0 million barrels going out. The US is a net importer of crude oil by 2.2 million barrels every single day. .............

Now here’s where it gets structurally weird, because even the crude picture has a twist.

The US produces light, sweet crude. “Light” means it flows easily. “Sweet” means low sulphur. It’s actually the good stuff - easier and cheaper to refine. The shale boom that made the US the world’s largest producer? Almost entirely light, sweet crude coming out of places like Texas and North Dakota.

The problem is that American refineries weren’t built for it.

Back in the 1970s and 80s, when the US was deeply dependent on Middle Eastern and Venezuelan oil, it built refineries to handle heavy, sour crude - the thick, high-sulphur stuff that’s harder to process but was widely available cheaply from abroad. Nearly 70% of US refinery capacity is optimised for that heavier crude. Then the shale boom happened, producing an ocean of light crude that most of those same refineries can’t efficiently process.

So the US does something that looks insane on the surface: it exports the light crude it produces to European and Asian refineries that can use it, and simultaneously imports the heavy crude its own refineries need.

Upgrading a refinery to switch between crude types costs between $100 million and $1 billion per facility. No1’s rushing to do that.

The result is the US running both sides of a crude oil swap trade with the rest of the world. Every day.

It’s not irrational. But it’s not called energy independence either in my book. ..............

The US shale miracle is real.

The energy independence narrative built on top of it isn’t.

And when you hear a government official say “we produce more oil than we consume” - ask them what kind of oil, processed through what kind of refinery, and what happens to the 6.2 million barrels a day that still needs to be imported from abroad. .....



Market Fare:

While a near-term bounce is possible, investors should position for more weakness ahead as deterioration has been significant but not yet extreme

As indexes pull back from their peaks, we tend to label the drawdowns based on their intensity. When an index is 10% off its high, it is “officially” in a “correction.” Once it is 20% or more below a peak, the “bear market” label gets used. The problem is that these “correction” and “bear market” designations serve only to confirm what has been experienced. They become study-able periods for historians, but there is little utility in telling investors that they should have reduced risk exposure a few weeks or months ago. Investors don’t need confirmation, they need real-time indicators that provide evidence of bull market and bear market behavior. ...........


The limits to growth are starting to weigh more heavily that the risk of inflation.

Bonds’ Silver Lining
Assumptions were made to be broken. An oil price spike automatically raises prices, so it’s bad for inflation. That generally causes bond yields to rise, as the assumption is that central banks will have to raise rates to combat the higher prices. But it also acts like a tax hike, forcing consumers and companies to spend less on things other than oil. All else equal, that justifies a rate cut, and lower yields.

Further, the logic of bonds is that they act as a shelter in times of stress — which means investors buy them during extreme uncertainty and conflict, like the past month. Thus it’s always been strange that the bond market unambiguously reacted to the Iran war’s inflation risk, but not to the threat to growth, and sent yields higher. Until now. .........


The Reflexive Rally Was Not Surprising

........... The difference between a durable recovery and a dead-cat bounce is almost always visible in the underlying fundamentals, not the price action alone. Right now, the fundamentals argue for caution.

Goldman’s own scenario analysis puts a moderate slowdown path at 6,300 on the S&P 500 and a severe oil-shock path as low as 5,400. Neither of those scenarios is priced into current earnings estimates. S&P 500 companies are still being modeled at roughly $309 per share in earnings for 2026, figures built on assumptions about GDP growth and energy costs that the past eight weeks have materially challenged. When earnings revisions begin in earnest, they tend to hit in waves. We’re likely in the early innings of that process, and it will impact forward returns. The reason is that the market trades off forward earnings expectations; if those expectations fall, the market reprices for lower earnings growth.



In his televised address last night Trump said the US was going to keep bombing Iran for another two or three weeks, and if Iran didn’t make a deal, the US would bomb them “back to the Stone Age.”

More on that phrase later.

But first a bit on the economics.

Promising to keep doing the thing that has brought the world to the brink of a global economic catastrophe, and threatening maximum escalation, didn’t go down well with the people who make numbers go up or down. The oil price rocketed, and markets sank. It seems the people behind the screens might finally be waking up to the looming disaster. They might be realising, belatedly, that very soon the molecules are simply not going to be where they are wanted and needed in the quantities required.

You can’t decouple the numbers from the atoms forever and you can only deny physical reality for so long.

And the physical reality is stark and stunning.  ............



Private Credit Fare:




A.I. Fare:





Shady, shifty, unethical chatbot behavior is rising fast, and now we know why. Call it the ‘No Body Problem.’


Regurgitated texts produced by technology are 85pc to 90pc similar to the original, study finds



"AI psychosis" or "delusional spiraling" is an emerging phenomenon where AI chatbot users find themselves dangerously confident in outlandish beliefs after extended chatbot conversations. This phenomenon is typically attributed to AI chatbots' well-documented bias towards validating users' claims, a property often called "sycophancy." .........


Heavy users of artificial intelligence report being overwhelmed by trying to keep up with and on top of the technology designed to make their lives easier


Experiments show large majorities uncritically accepting “faulty” AI answers.



Yesterday Dana, the kids, and I went to the theater to watch The AI Doc: Or How I Became An Apocaloptimist, the well-reviewed new documentary about whether AGI will destroy the world. This was surely the weirdest family movie night we’ve ever done. Firstly, because I personally know probably half of the many people interviewed in the film, from Eliezer Yudkowsky to Ajeya Cotra to Liv Boeree to Daniel Kokotajlo to Ilya Sutskever to Jan Leike to Yoshua Bengio to Shane Legg to Sam Altman and Dario Amodei. But more importantly, because this is a documentary that repeatedly, explicitly, earnestly raises the question of whether children now alive will make it to adulthood, before unaligned AI kills them and everyone else. So pass the popcorn, kiddos!

(We did have popcorn. And if the kids were scared — well, I figured we can’t shield them forever from the great questions of the world they’re entering. But actually they didn’t seem especially scared.)

I thought that the filmmaker, Daniel Roher, did about as good a job as can be done, in fitting into a 100-minute film a question that honestly seems too gargantuan for any film — the question of the future of life on earth. He tries to hear out every faction: first the AI existential risk people, then the AI optimists and accelerationists like “Beff Jezos,” then the “stochastic parrot” / “current harms” people like Emily Bender and Timnit Gebru, and finally the AI company CEOs (Altman, Amodei, and Hassabis were the three who agreed to be interviewed), with Yuval Noah Harari showing up from time to time to insert deepities.

Roher plays the part of an anxious, curious, uninformed everyman, who finds each stance to be plausible enough while he’s listening to it ...........



Quotes of the Week:

anon: “The market’s consensus seems to be that 30-50% of Gulf energy infrastructure getting wiped out will have zero lasting consequences. No plastics shortages, no fertilizer crunch, no chip supply issues from helium depletion. The tail risk is so catastrophically bad it can’t really be priced — so the default is just buy the dip and pray everything goes back to normal.”



Charts:
1: 
2: 
3:



(not just) for the ESG crowd:



From the Pacific Northwest to Antarctica, it’s extraordinary warmth that’s punching through climate norms with the most force.


And is there still potential?



Sci Fare:






U.S. B.S.:


The New York Times has printed an article with the headline “A North American Treaty Organization Without America?”, apparently having spent the entire Ukraine war completely unaware that NATO stands for North ATLANTIC Treaty Organization.

At the same time, CNN ran a segment on an American bomber whose plane was shot down over Iran in which analyst Amy McGrath suggested that the Iranians might help the pilot because they’re “happy” he’s bombing their country, saying the pilot would be worried because they don’t know “if you’re gonna be picked by somebody who is going to turn you over to the Iranian forces that are gonna use you and capture you, or is the population happy that you’re there?”

Really illustrates how fucked western journalism is, doesn’t it?

I mean, this is some serious baby-brained thinking on display here. That New York Times headline made it through multiple checkpoints before publication without it ever even occurring to anyone to at least do a quick Google search to find out if the A in NATO really does stand for “American”, and, if so, why are there so many European countries in it? That CNN analyst really does have such an infantile, children’s cartoon worldview on American wars that she thinks the people being bombed by American pilots will want to hug them and kiss them and give them presents when they emergency eject into enemy territory. It’s kind of amazing that any of the people involved in either of these incidents are working in news media at all.

If you’ve ever wondered why so many Americans are so ignorant about what’s going on in their world, it’s because for generations these have been the kinds of people informing them about world events. These are the news outlets who’ve been responsible for creating an informed populace. And their reporting is shared with the entire western world.

I constantly criticize the western press for its role in propagandizing the public to manufacture consent for evil wars and normalize an abusive political status quo. You cannot despise these manipulators enough for their role in the world’s dysfunction today. But these two incidents highlight the fact that the people running the western press aren’t just evil — they’re also really, really stupid. ........



War Fare:


“If this scenario is right, Israel fails. She brings down the Philistine temple, but hers is the only death, a suicide.”
—Yours truly

This is a Unified Field Theory of the Israel-Iran War. I think I know where it’s going, where it will likely (but not certainly) end, and why. Let’s take a look.

Note: This doesn’t present what I think will happen. It presents what I think is most likely. Please read in that light.

Background: Players and Goals
The players involved have these goals.

Israel wants Iran’s permanent destruction. This means all of the following:
  • The war must run until Iran surrenders, and any ceasefire must work entirely to Israel’s advantage.
  • U.S. military must stay engaged to the end.
  • All other potential regional threats must be neutered.
Iran wants an enforceable end to Israeli and U.S. attack. This means all of the following:
  • Withdrawal of the U.S. military from the whole Middle East
  • Permanent Iranian control of the Strait of Hormuz (like Egypt or Panama’s control of their own canals)
  • A ceasefire with Israel that Israel cannot break
Iran’s additional goals, like reparations and sanctions relief, may be negotiable.

The U.S. is mixed in its wants:
  • Neocons want to break Iran to secure control of all Middle East oil.
  • Zionists like House Speaker Johnson want to bring on imagined “end times.”
  • Most people with ongoing state power — like military and intelligence pros — want to avoid a loss that will end the Empire.
President Trump wants all of following:
  • To enrich himself and his family
  • To not be exposed via release of Epstein files and tapes
  • To not be labeled a loser (one of his great fears)
  • To live to the end in “a state of insatiable self-worship”
Players and wants, some of which overlap. Keep this in mind as you read on.

What Would End the Fighting? Only Defeat
For the war to end, all players must stop fighting. What does that mean in practice?

Iran must meet all of its goals before it will stop. Otherwise, there’s no guarantee the attacks won’t restart. Yet for Israel to stop, Iran must be completely defeated.

This alone guarantees that the fighting will go on until one of these two collapses — either Iran loses the ability to fight and its government surrenders, or Israel collapses as a state and a secular Palestine rises from what remains.

This could be the last big Middle East war for years. Its outcome could remake the world. .......





.................... Now, Saddam’s revenge.

If you’re old enough you remember the first Gulf War. Iraq invaded Kuwait. Saddam had asked for permission from the US and the response was one Saddam believed was positive. And, after all, Saddam had fought an entire very destructive war against Iran for the US: he was an American proxy. Kuwait was created explicitly over a huge oil reserve as a way of keeping it from Iraq, which it really should be part of: it’s a colonial era legacy state.

Well, the US didn’t approve and the Iraqis got slaughtered, their power, sewage and water infrastructure was systematically destroyed, then Clinton subjected them to savage sanctions which killed million. Estimates of child casualties were over 500,000, based on population studies. Clinton’s secretary of state, Madeline Albright, when asked about this, infamously replied that the deaths were “worth it.”

Anyway, Kuwait’s military is a joke, it’s right next to Iraq and conquering it would be trivial, since there’s no easy way for the US to get troops there. So, switch to China and the Yuan, finish kicking the Americans out, and conquer Kuwait. (No one will cry, Kuwait’s rulers are absolute scum.)

This is a historic opportunity for Iraq, and they should take it.



Geopolitical Fare:


............... But by the 90s the last smart competent American elites were dead or retired, and the triumphalism over the fall of the USSR made them think, a la Fukuyama, that their system was superior, their shit didn’t stink, and they’d be on top forever. Everyone would have their system, and everyone would just keep buying and selling in dollars no matter what: it no longer mattered where things were made.

The key moment was when Clinton let China into the World Trade Organization (WTO) with developing world status. ...........

And that, folks, is the end of the Western order. No one needs to buy from us any more. They’d still like to sell to us, sure, but they don’t need to because they don’t need dollars. If it’s something they need they can get it from China or, to a lesser extent Russia, India and so on. We don’t have a monopoly on anything that matters any more: the last real one was chip manufacturing, but the Chinese are catching up fast and confident that in a few years they’ll be there. In the meantime, they can make all but the most advanced chips and those are the ones that go in almost all manufactured good: the most advanced stuff is only useful for things like AI, and China’s find its way around that.

Now we come to Iran. Iran is showing that a fairly modest kit: missiles and drones, is sufficient to keep the US navy and air force far away and make any attack prohibitively expensive in men and material. Plus everyone knows that expensive US military gear needs Chinese supplies: the West doesn’t have the full kit any more, the Chinese can and in some case have, cut the West off any time they want. All those expensive radars the Iranians blew up? Well it’s not the cost (that’s irrelevant) it’s that they require materials on the Chinese have. They get rebuilt if the Chinese let America and there’s basically nothing the US can do about that. ..........

Anyway, the structure of Western dominance is now dismantled, by Westerners. Perhaps the Chinese could have industrialized fully without us, but it would have taken a lot longer and as long as we had our own industry and tech stack, it would have just meant a cold war situation with two blocs and, absent de-industrialization, perhaps the West could have held its own, though China is innately stronger than the USSR ever was, especially with Russia as an ally.

We did this to ourselves, or our elites did, because of sheer stupidity and arrogance. Don’t underestimate how bad this will be. I’m in the “better China as hegemon than America” crowd. I think they’ll kill a lot less people. But be clear, they are going to be a hegemon, at least in industrial terms and this is going to mean a serious standard of living drop in much of the West. .........


As shown by the Iran crisis.

I have argued previously that the defeat the West has been suffering in Ukraine is above all an intellectual one: not being able to understand what we are seeing means it’s impossible to respond effectively to it. But the problem goes beyond the fighting on the battlefield, to the nature of that War itself, and in particular its economic and political dimensions. This is even more the case with Iran, where not only is there no overall US strategy (as opposed to half-formulated fantasies and wish-lists) but where in addition Washington appears to be incapable of understanding that the other side does have a strategy with economic and political components, and is implementing it. As a result, all the media concentration recently has been on the movement of US troops to the region and their possible uses, as though that in itself was going to decide something. Yet in fact, the real issue is the development and deployment by the Iranians of a new concept of warfare, based on missiles, drones and defensive preparations, and the inability of the West, with its platform-centric mentality, to understand and process these developments. ...............

I’ve referred several times in previous essays to theories about changes in human consciousness over the millennia, and what this might imply. Iain McGilchrist has famously written about the increasing role of the left side of the brain (the Emissary) at the expense of the right side (the Master.) In his conception the left brain, which is concerned with precision and detail, should be the servant of the right brain, which deals in the “big picture” and is capable of setting objectives. He argues that the left-brain with its technocratic orientation has become increasingly and dangerously powerful in recent times. I would add that this increase in power is not necessarily experienced in the same way in all cultures, and that in the West it is very far advanced indeed. Why is this? .........................


No Plan for Hormuz, No Off-Ramp -- a New Phase has Begun



Other Fare:

Strategies for Employment, Housing & Loneliness

As the first fully online generation, Gen Z rejects pretty lies. As I documented in my piece on the increasing unattainability of the middle class, economic life is much harder for the rising generation, and they’re angry about the WWII and subsequent generations’ pulling up the ladder to enrich themselves and shifting inequality to extremes. I’m still working on an upcoming piece on the “postwar consensus,” but a lot of the more extreme positions taken by this generation are, in my view, driven by frustrating economics. When they see a narrowed path to family formation, little opportunity beyond hustling to get rich or die trying, and of course, all exacerbated by the envy engine of social media, they will reject the myths of a society that has, it seems, rejected them.

Posted by at No comments:

Saturday, March 28, 2026

2026-03-28

***** denotes well-worth reading in full at source (even if excerpted extensively here)


Economic Fare:


Those Westerners who hate Donald Trump seem to be happy to fight him to the last Iranian. And those who push for renewable energy seem to be happy to see the Middle East destroyed, since they believe that it will force the energy transition on us. Few people realize how dire the situation is. Antonio Turiel is one of the sharpest minds on this planet, and he is not shy about telling how things stand. He correctly says, “Given the current situation, suggesting that the answer is a renewable energy transition is like a house fire breaking out and thinking it’s a good time to call a builder to install fire doors.” To say nothing about having handed power to a band of criminal psychopats devoid of even a shred of moral restraint. Unless some kind of miracle occurs that stops the war now, we are facing the Seneca Abyss.


Dead man walking
From Antonio Turiel’s Blog - 23 March 2026

The Iran conflict enters its fourth week. Once again, to avoid panic and a widespread stock market crash at the opening of Monday’s session, a fabricated story has been concocted to calm the market. In this case, Donald Trump has declared a five-day truce (only on the American side; Israel is proceeding independently), supposedly thanks to fruitful talks with Iran over the weekend (talks already denied by Iranian authorities).

We’re in extra time. In the coming weeks, the last ships that left the Strait of Hormuz before the closure will arrive, and when they do, the shortages will become painfully obvious. In fact, things are already going terribly wrong. The list of countries experiencing fuel supply problems or even imposing rationing measures ( Japan , Australia , New Zealand , India , Thailand , etc.) is growing by the day. China has restricted fertilizer exports , and in the US, it’s estimated that this season will be short between 25 and 35 percent of the fertilizers typically used . The helium shortage will cause a sharp drop in chip production within weeks , not to mention the disastrous situation with aluminum and copper, to name just a couple of raw materials. But really, everything is affected. Unsurprisingly for regular readers of this blog, diesel is currently one of the most scarce things, and that affects absolutely everything, including the supply chain of all kinds of raw materials.

There doesn’t appear to be an easy solution. Iran won’t back down without a credible non-aggression pact from the US and Israel, guaranteed by major powers like Russia and China, and war reparations commensurate with the damage inflicted. It can’t settle for less, because it knows that if it gives in now, they’ll attack again in a few months, having rearmed. But these conditions are completely unacceptable to the US and Israel. There really is no easy way out of this impasse. Everything suggests that immense structural damage will be inflicted on the global economy.

Putting myself in the context of Spain and Europe, let’s be honest, unless something unimaginable happens right now (literally a miracle), we’re going to crash. No other outcome is conceivable. We’re going to suffer a very long-lasting, perhaps even permanent, loss of 25% or more of our energy consumption, and it’s going to happen over the next few months. We’re going to see a good portion of our industries collapse, never to recover. We’re going to see unemployment skyrocket. And in the advanced stages of this debacle, we’re going to see shortages of fuel and even food.

Perhaps the powers that be have mechanisms we can’t even imagine, perhaps they have ways to stop this war in its tracks and, with it, this disaster. I don’t know. I neither know nor can I know these things. What I do know is that, without a radical change of course, we are going to sink, and sink very deep. And even if that miracle were to happen, the damage already done would have severe consequences in the coming years. Although, of course, nothing compared to the current collapse.

Right now, we’re losing around 20 million barrels of oil and petroleum products per day, which is about 20% of global consumption and, more importantly for us, represents 40% of the oil available for export. There’s also a shortage of about 20% of liquefied natural gas, 30% of nitrogen fertilizers, 30% of helium, 30% of aluminum, and 30% of sulfur (which is needed to make sulfuric acid for industrial processes, including copper extraction). There’s an incredible backlog of containers in the area. The shortage of medium crude oil in the Persian Gulf region is particularly affecting diesel production, as well as kerosene. In fact, some airlines are starting to cancel flights. What will happen to tourism next, only time will tell.

This is not going to be just another crisis. This is going to be an economic catastrophe. Combined with the bursting of the enormous financial bubbles that have inflated over the last few years, it’s difficult to grasp the magnitude of what’s about to happen. .....................


Truck drivers in the U.S. are feeling some of the first economic effects of the rapid surge in the cost of diesel. Broader economic impact could hit soon






 
Oil is likely to surge to extreme highs in 2026, but that does not mark the beginning of a long-term structural bull market. It’s a wartime spike inside a debt-saturated global economy. The higher prices go, the more they tighten credit, weaken growth and destroy demand. Oil is more likely to peak with the crisis and then follow a weakened global economy into a longer period of softness.



Market Fare:








A.I. Fare:


.......... Take a look at the numbers here. The Nvidia Blackwell Ultra delivers 35 times lower cost per token than the previous generation, the Hopper platform. The Hopper platform is what most of the data centers are currently using. After the Hopper, we’re going to get the Blackwell chips, which will drive the cost per token down by 35 times.

After Blackwell, we get Rubin. Rubin brings the cost per token down another tenfold, compared to Blackwell. What this means is we’re looking at Jevon’s paradox: AI is now going to get so cheap, that its use will increase massively. We saw this with coal. With every efficiency improvement in the steam turbine, coal use merely went up. Because you could do the same amount of work with less coal, we started using steam turbines for more jobs, so overall coal use went up.

There may be an AI bubble currently, just like there was an Internet bubble that popped in the year 2000. But you know what happened after the Internet bubble popped? The infrastructure that was built became integrated into our everyday lives. The popping of the Internet bubble didn’t stop the use of the Internet, it just meant that the companies that built the Internet lost a lot of money.



In a matter of only a few years, AI chatbots have become a common part of many of our daily lives, even though they remain deeply flawed systems.

The reality is that chatbots like OpenAI’s ChatGPT, Google’s Gemini, or Anthropic’s Claude still make regular mistakes. According to an October study by the BBC, even the most advanced AI chatbots gave wrong answers a whopping 45 percent of the time.

But many users don’t understand that reality.



Quotes of the Week:

Blind Squirrel: I think we are now at the stage that every single day that the Strait of Hormuz is closed you should sell some more long positions. That’s what we will be doing.

Delwiche: In times of strength, optimism can stay elevated for extended periods, oscillating between excessive levels and healthy resets in sentiment. In bull markets, optimism bends but doesn’t break. Price weakness accelerates when sentiment breaks down and bulls head for the exits. That is the negative feedback loop we are seeing emerge in the data right now.



Charts:
1: 
2: .
3: 
5: 
6: 




(not just) for the ESG crowd:

Despite being a renewables superpower, China continues to permit and build new coal-fired power plants at a rapid pace. Analysts say the nation’s new five-year plan will ensure further coal plant expansion and jeopardize China’s ability to deliver on its climate promises.



U.S. B.S.:


.... Trump is like the mobster Vincent Gigante who walked around Greenwich Village in slippers, pajamas, and a bathrobe in an effort to convince federal prosecutors that he was crazy. Trump’s babble is a similar act. Only a very stupid person would be fooled by it. The Iranians are not stupid, nor should we be. ..............

This war is moving inexorably toward a most dangerous phase, and as Americans and growing numbers of U.S. soldiers oppose it, the chance of a false flag attack in the U.S. to generate outrage toward Iran from Americans grows with it. Former CIA analyst Ray McGovern has just warned of that possibility. 

For years, the general consensus among the mainstream and the independent media has been that Trump’s rise twice to the presidency has been a break with tradition because he is so bizarre a character with no political experience, etc. This assessment has come from those who love or hate him. I have argued the opposite for years: that he is an establishment figure from the start, dressed in costume, so to speak. Few have agreed. I recently wrote:
Some say that is because he is a complete anomaly and was able to twice become president by some strange twist of fate. If that is so, it would be the first and second time in modern history that it happened. A man with no political experience, a comical reality-tv joke, a bombastic fat party boy with weird dyed hair who talks like a version of an East Coast Valley Girl, a womanizer, a very wealthy New York real estate wheeler and dealer, etc. gets the votes of middle Americans who are losing their farms and factory jobs and are angry at the government. All sorts of explanations have been given for this “anomaly,” except that it was not one, except in appearance.
Now it seems that others may be coming around to the same opinion. In a recent article, Seeing Trump Clearly, Craig Murray, the former British diplomat, author, and Scottish human rights activist, who attended and reported on Julian Assange’s extradition trial, wrote:
It is comforting to see Trump as a buffoon, to accept the facade he presents of a blustering and ill-educated ignoramus, who swings wildly between policy options, and who does not understand the world of geopolitics.

But that is nonsense.
Although Trump seems to be a clown, Murray says, it would be a terrible mistake to take seeming for being, for Trump is vicious and very dangerous and wholly intent on destroying the Palestinians in Gaza and the West Bank, Iran and the Iranians, while supporting Israel’s takeover of Lebanon and Syria for Greater Israel and the United States. Yes, it is true that Trump and his venal family are also making a financial killing swinging deals throughout the Middle East, but his policies are part of a long-term U.S. strategy. Most importantly, Murray writes:

It is essential not to lose sight of the bipartisan nature of the United States’ long term plan. In a very real sense Trump is continuing – if greatly accelerating – the policy under Biden ................



........... Donald Trump is a US president who is doing US president things. US presidents consistently murder people with unforgivable acts of mass military violence, mistreat immigrants and marginalized communities, and promote tyranny for the benefit of corrupting special interests in defense of the US empire and the capitalist status quo. That’s what their job is. If they weren’t willing to do these things, they wouldn’t get the job.

Trump is not some freakish aberration; he is the product of the same American political status quo as his predecessors. He became president the same way they did, and the powers he now wields were given to his office via mundane executive, legislative and judicial decisions and precedents before he was ever elected.

But because the “No Kings” protests are organized by liberal defenders of that same political status quo, the demonstrations cannot address any of this. The whole thing is designed to be as large and inclusive as possible while also ensuring that it doesn’t disrupt the established order in any meaningful way. ......

They are not protesting against the US empire. They just want a more polite, photogenic empire.

They are not protesting the corrupt oligarchic political system which gave rise to Donald Trump. They just want the corrupt oligarchic political system to give rise to presidents who make them feel less uncomfortable.

The problem is US presidents, not kings. The problem is the US empire, not Trump. The United States needs drastic, revolutionary change, not daytime protests designed to be as inoffensive as possible. As long as Americans are protesting against fictional monarchies and easily replaceable oligarchic puppets instead of resisting the actual imperial machine, the abuses are going to continue.

The war in Iran is the most obviously evil American war in generations. People should be flooding the streets in every major US city. Washington DC should be on fire. Soldiers should be deserting en masse. Instead we’re seeing these stupid fluffy lib theater conventions where people get together to do nothing.

Americans of conscience should be feeling deeply embarrassed right now.



War Fare:

The longer-term meaning of the Iran war.

Now that the Weekend War That Wasn’t is in its fourth week, it’s becoming clear that just about everything to do with its progress, as well as its origins and its potential consequences, is covered in hopeless confusion. Confusion about exactly how the conflict started and why, confusion about what kind of conflict it is, confusion about what its originators were trying to achieve, confusion about what those who claimed to be, or have been identified as, the originators thought they were trying to achieve, confusion about what has actually happened, confusion about the meaning of what has apparently happened, insofar as it is known, confusion over what “victory” means for various actors, confusion over whether some of the parties even have a concept of victory, let alone if it’s a feasible one and how it can be evaluated, confusion about how the fighting can be stopped, if it can be, and confusion about all of the manifold interacting political, economic and military consequences. Not bad for something that was supposed to be finished before the markets opened on the Monday.

Some of this confusion is inevitable in any major politico-military crisis, and I’ll explain why in a minute, and what the consequences of that might be. More of the confusion is the result of pundits competing with each other to protect their business models by trying to convince you that they alone know What This is All About, and that the explanation for all of the above confusion just happens to be based on one of their pet obsessions. I’ll start by trying to dissipate some of this confusion, and look at what this implies for an “end” to the conflict. I then want to talk about the difference between Aspirations, Consensus and Plans, and how that helps us understand what appears to be happening and may follow. I finally want to talk about some of the more likely practical results of the conflict, which is important in the sense that I don’t think we have been in a more dangerous moment since 1914, and the consequences of this conflict could be equally far-reaching. ...............................................

......... And of course as I suggested a couple of weeks ago, crises like this acquire a momentum of their own beyond a certain point, and it is easier to go forward, no matter how dangerous, than it is to go back.

This interpretation clearly has major implications for a resolution of the crisis, because it means that it will be very difficult—indeed it may actually be impossible—to arrive at a consensus in Washington that the fight is over, the US has lost and must act accordingly. .........................

For this reason, as for others I’ll touch on, it seems highly unlikely that there will be a “deal,” with Iran, let alone a detailed agreement. If you can’t even decide what you want, it’s hard to persuade someone to give it to you.

So a United States which was not prepared for this war and had no agreed objectives for it, finds itself with its fingers caught in the wringer. What could it do? Well, for the first time perhaps in its modern history, Washington cannot just “declare victory” or silently acknowledge defeat, and go home. The VietCong could not pursue the Americans back to Washington, the Taliban were happy for the US to leave Afghanistan. But the regime in Tehran has a vote here, and they also have a policy. (Recall that the Persian Empire stretched from India to Libya at one point.) As a minimum objective, Tehran will want to evict all foreign forces from the Gulf, and become the undisputed regional superpower. In the past, Israel was the main threat to these ambitions, but it’s not clear how far that that country will be in any shape to resist them in a few months time. If that is indeed one of Iran’s ambitions, then there are two reasons why the US, and the West in general, is not going to be able to frustrate it. The first is to do with the developments of new technologies. .................

.............. In other words, the platform-centric West may be about to hit a hard limit of capability. Even in principle, it isn’t possible to build platforms that can counter the sheer numbers, simplicity of manufacture and relatively low cost of projectile-based defences, or to resist such projectile technologies being used aggressively. In the short term this is going to benefit Iran, both in defeating the US and Israel and in its regional ambitions. In the longer term, it is going to have a massive effect on the strategic balance in the world and, as usual, nobody is thinking seriously about it.


As of March 23, 2026, the major developments in Iran over the past 24 hours center on a fragile pause in U.S. strikes against critical infrastructure and escalating retaliatory missile exchanges with regional adversaries. President Trump announced a five-day delay for planned strikes on Iranian power plants and energy infrastructure, citing “productive talks” aimed at a resolution. The common consensus on intelligent sites is that this is absurd. The Iranian Foreign Ministry has officially denied any direct dialogue with Washington, labeling reports of talks as “fake news” intended to stabilize energy markets. This is surely the more believable statement.

Only lunatics would trust in the value of any kind of negotiation with Trump or his bloodied henchmen Witless and Kushion, and the Iranians are not lunatics (although investors probably are). .........

............ The five day delay follows a 48-hour ultimatum for Iran to reopen the Strait of Hormuz. There are very few indications at this time that Iran will reopen the Strait today, in five days, or in five weeks. If he was sane, and there are no indications that he is, Trump would be extremely concerned about the increasing chatter in responsibile places of the inevitability of a global recession

........... A sane response to this crisis, which will surely get much worse the longer the Strait is closed, would be to do anything to stop it, given the highly negative consequences for energy prices, fertilizer, helium and other commodities essential for the global economy, the inevitable inflationary pressures such high prices will cause ....................


yeah, this is not great

.................... At this point, it’s an economic suicide pact. Let’s take away the question of whether we take Kharg Island or decapitate the Iranian leadership. It’s very clear that it’s who can withstand the most economic pain. And this is dangerous because it’s quite clear that we probably can’t.



The illegal war launched by the United States and Israel against Iran has triggered the mother of all commodity-supply shocks. In response to the unprovoked onslaught, Iran’s closure of the Strait of Hormuz, the narrow waterway between Iran and Oman’s Musandam peninsula, has brought to a standstill the delivery of huge amounts of the world economy’s critical inputs. 

Iran is the seventh country to undergo US military intervention in the first fifteen months of Trump’s presidency; five of these seven are rich in oil. Oil wars might make sense if American companies actually wanted to drill more. But they are hesitant to do so when oil is oversupplied and under-demanded. The raid on Caracas in January earned little interest among international oil majors, who were unenthused about the prospect of resuscitating Venezuela’s decrepit infrastructure and bitumen-like oil reserves, despite White House exhortations. 

The world has never seen an interruption on this scale to the supply of stuff. It easily surpasses the 1979 oil crisis, sparked by the Iranian revolution, in which crude oil production declined by 4 percent. ........... 

........... For now, global commodities markets are in Road Runner mode, and afraid to look down at the abyss. Prices of crude oil futures, LNG, fertilizers and other commodities have not even reached their nominal record levels. ..............




........... Iran has some simple needs to be willing to declare peace, the most important of which is “this is the last war”, the second of which is “no more assassinations and no more attacks” and the third of which is “since we can’t trust you to keep any agreement we have to make you incapable of attacking us again or too terrified to do it.”

Manjier has a lot of contacts in the Resistance, here’s the list he published:

............ Notice that it includes stopping the war/genocide on Libya/Hezbollah and Gaza. There’s no way the Israelis will agree to that unless they have no choice.

I don’t see any way this war ends before Israel is a smoking ruin, and the Gulf States are so terrified of Iran they declare they’ll never allow US bases in their countries again.

Can Iran enforce this? I think so. The US and Israel seem to be running out of interceptors a lot faster than Iran’s running out of missiles and drones. China’s in their corner, quietly supplying them with all the “non military” equipment they need. And Iran’s pain tolerance is extremely high: the decision makers know that if they don’t win decisively again Israel will just assassinate them later ..........

The problem, as has been stated many times, is that no “deal” is possible. America will not keep them. Israel will not keep them. So they must be defeated for Iran and its leaders to be safe. The victory must be crushing. If I were in Iran, I would be making the exact same calculation. ....



Of all the wars I’ve covered in my writing career, this one has been the hardest in the sense that figuring out what’s true and what isn’t is difficult. The baseline assumption is that nothing the US says about the war can be trusted. Most of what Iran says in concrete terms about what they fired and hit can be trusted. AI images and video have proliferated, so the old “show me picture” routine doesn’t work unless y0u’re a good image analyst and willing to spend hours. Trump, of course, lies about everything. Iranian official media exists, but it’s often censored by the West so reading their official statements is often difficult.

All that said, I think it’s time for something different: a collection of propaganda videos that are Pro-Iranian. Because of all the above, it’s unclear to me if these are official, but they’re interesting nonetheless.

The first appears to be official, was published by Russian “news” outfit RT, and makes the ethical case: .........



...



Geopolitical Fare:



"Iran was a chew toy the Russians and British tussled over"



Other Fare:

The hero nation, the mirror principle, and why war is becoming obsolete despite current appearances

How can I speak of an age of peace? My nation has been almost continuously at war my entire life. One of my earliest memories is of sitting in front of the television with my father watching images of guns and tanks from the Vietnam War. He was so infuriated he leapt from his chair to shout at the television screen.

The few years of peace that followed the Vietnam War ended with the mini-wars, covert wars, and proxy wars of the Reagan-Bush era: Grenada, Nicaragua, El Salvador, Panama, Angola, Libya, Lebanon, Honduras, the Philippines, Kuwait. Then came Clinton’s wars: Bosnia, Serbia, Kosovo, Somalia, Haiti, Afghanistan, Sudan (Operation Infinite Reach), and Iraq (Operation Desert Fox). This low-level simmer of post-Vietnam conflict finally erupted after 9/11 into the War on Terror under George W. Bush, starting in Afghanistan and Iraq (and neighboring countries), plus Somalia and the Philippines, launching the era of borderless global war. Next came Obama, who added major military operations in Libya and Syria and expanded Bush’s incessant low-level drone wars in Yemen, Somalia, Pakistan, and elsewhere. Trump continued most of these operations, as did Joe Biden, who contributed the proxy war against Russia via Ukraine and supported Israel’s genocidal campaign in Gaza.

Finally we have Donald Trump, who in defiance of his numerous anti-war campaign pledges has continued his predecessors’ globalized omniwar and added a catastrophic new one in Iran. Let us also mention his campaign across Latin America, ostensibly against the drug trade: “Operation Total Extermination.”

......... Pragmatic critics of America’s imperial wars are fond of observing that the United States has not waged a truly successful war since World War Two. Korea, Vietnam, Iraq, Afghanistan, Syria, Libya… each was left in worse shape than when the war began; in none of them were the stated objectives achieved.1 Of course, to the extent that the real goals like enriching defense contractors, sowing chaos, or justifying domestic surveillance and control, then these wars succeeded admirably. Nonetheless, the aggressor would have at least liked to achieve the appearance of victory. Why was it unable to? Why can’t the world’s most powerful nation not actually win a war against far weaker adversaries? If it were just Vietnam, or just Iraq, we could dismiss it as an aberration. But every war? There must be a deeper reason why war isn’t working the way it used to. ....................



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