***** denotes well-worth reading in full at source (even if excerpted extensively here)
given the evolving situation in the Middle East, updating periodically through the weekend with updates
Economic Fare:
In our 2006 outlook, the only scenario where 10s would fall below 4% was much weaker than expected growth, cyclical stocks look offsides and the Fed is behind the curve, again
- Markets flashing growth concerns: Despite strong year-to-date performance in non-tech cyclicals, earnings expectations for 1Q26 have been cut sharply, and the Treasury bull flattening (falling real rates, deeper curve inversion) signals markets are aggressively marking down the “run it hot” growth outlook.
- Earnings narrowing to AI beneficiaries: S&P 500 earnings growth remains near historical mid-cycle averages overall, but most strength is concentrated in tech and communication services tied to AI, while broader 4Q25 cyclical earnings growth was tepid and 1Q26 expectations were revised lower.
- Bond market signaling Fed easing: The drop in 10-year yields and deepening 3m–2y inversion suggest rising economic weakness and increasing policy restrictiveness, with markets implying the Fed needs to resume rate cuts.
- Credit stress emerging but not systemic: Weakness in BDCs, CLO equity tranches, and high-yield duration points to strain among lower-quality, floating-rate borrowers; however, overall credit growth remains subdued, making risks more idiosyncratic than systemic.
- Capex boom not yet broadening: Regional Fed manufacturing and services surveys show tentative stabilization in current orders, but capital expenditure plans have weakened. S&P 500 capex remains heavily concentrated in the technology and communication sectors, suggesting broad-based investment remains elusive despite the powerful tax incentives in the One Triple B Act.
- Payroll Payback: We preview next Friday’s employment report, in short, we see little evidence demand for labor has strengthened. A weak report should put rate cuts back in play despite resistance from Biden appointees and the regional repo rate resistance.
- Cautious but not bearish outlook: While equities are vulnerable to a cyclical “growth scare” correction—especially in midterm years—we are less bearish than a year ago but are maintaining elevated cash positions looking for a better entry point to capitalize on our expectation of broader capital investment beyond AI later in 2026.
Market Fare:
Bubble Fare:
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A.I. Fare:
Quotes of the Week:
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(not just) for the ESG crowd:
(not just) for the ESG crowd:
China's newest battery runs on salt, and powers vehicles in extreme cold climates
- China is in mass production of a sodium-ion battery, which opens vast new markets for electric vehicles.
- Lithium-ion batteries drive most electric vehicles, and lithium has a long and complex supply chain. The refining of lithium is expensive, and poses severe environmental challenges.
- Sodium is abundant, everywhere, and sodium batteries perform far better in cold climates.
Sci Fare:
U.S. B.S.:
War Fare:
***** Greenwald: Trump Starts a Major Regime-Change War with Iran, Serving Neoconservatism and Israel
This is the definitive war of choice. It is the exact type of war that Trump and his movement spent a decade vowing to end. And the potential for destruction is infinite.
.............. In lieu of outlining any clear mission statement for this new war, let alone a cogent exit strategy, Trump offered a laundry list of flamboyantly violent vows.
............... The false claims behind this new war with Iran are ones we have extensively documented. In Trump’s war announcement this morning, he claimed — as he did at Tuesday’s State of the Union address — that Iran refuses to promise that it will not obtain nuclear weapons. The exact opposite is true: Iran has stated this clearly, unequivocally and repeatedly, and did so as recently as this week.
........... It is hard to overstate what a massive fraud Donald Trump, his campaign and his political movement are. For more than a decade, Trump has ranted and raved against the evils of regime-change wars and neoconservative dogma, only to launch a new war that most perfectly encapsulates and aggressively advances both. He spent years falsely warning that former President Obama would start a war with Iran because of how weak and inept Obama supposedly was at negotiation and diplomacy, only to now do that himself
.......... In contrast to the lie-driven 18-month public campaign of Bush and Cheney to convince the American public to support an invasion of Iraq, there has been virtually no attempt made, as I documented this week, to even explain to the American public why a new war with Iran is necessary or desirable. There has been no Congressional approval sought let alone obtained, notwithstanding the U.S. Constitution’s exclusive assignment of war-making powers to the Congress.
In his novel 1984, George Orwell highlighted the dangerous insanity of war propaganda with this leading example: “WAR IR PEACE.” Yet that is precisely the rationale invoked by various Trump supporters to somehow depict this new war as aligned with Trump’s vows of peace
........... "In my view, if you’re going to do something there, you better well make it about getting new leadership and regime change," the leading Republican Senator said ......
A big problem with this viewpoint, which ensures Washington stays in the business of 'nation building' and democratizing foreign lands (akin to the Neocon Bush era), is that almost all regional analysts say regime change is next to impossible through a purely aerial mission. Instead, this would require US boots on the ground - something the American people surely would not stomach, and which the Trump administration has pledged not to do time and again.
........ In the meantime, House and Senate Democrats announced Thursday that they will force a vote next week on War Powers Resolutions to block President Trump from launching military action against Iran without congressional authorization, as required under the Constitution. .........
From Ethiopia to our times: The Eternal Folly of Demographic Expansion
........ It is still too early to understand what’s going on with the attack on Iran and how things will evolve. What I think can be said is that the Israeli leaders are locked in an obsolete overpopulation paradigm that leads them to dream of an impossible territorial expansion by military means.
There are two distinct uses of the term “Greater Israel,” one referring to Israel plus the West Bank and Gaza, and a second, much larger, stretching from the Nile to the Euphrates. Currently, these ideas seem to be gaining ground among Israeli far-right politicians. .................
.......... I don’t even know what to write about this one, honestly.
What am I supposed to say? “Hey everybody, they’re lying to us about this war”? Everyone already knows that. Even the people who support this war know all the justifications for it are lies.
They know Iran isn’t building nukes.
They know Iran poses no threat to the United States. ............
Everyone already knows this, and it’s happening anyway. They’re just doing whatever evil things they want to do, without the slightest regard for public opinion or consent.
They’re just going right ahead with a military operation to topple Tehran, after decades of inertia for fear of the horrific consequences it would unleash. ..............
There’s an old Frank Zappa quote that’s been popping into my head more and more lately:
“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”
We’re seeing a lot more bricks these days. .........
Geopolitical Fare:
Other Fare:
Archaeology, Identity, and the Politics of Origins in the Levant
................................. Let’s be blunt.
This debate is not purely academic.
The modern state of Israel invokes ancient Israelite continuity as part of its national narrative. Critics challenge that narrative by emphasizing Canaanite continuity and shared ancestry with Palestinians.
Both sides selectively emphasize parts of the historical record.
Ancient history does not grant modern moral legitimacy.
Political legitimacy emerges from contemporary ethical frameworks — international law, human rights, sovereignty, self-determination — not from Iron Age settlement patterns.
Weaponizing archaeology to justify present policy is ideological theater. ....................
If there is any honest conclusion, it is this:
No modern political project owns antiquity.
The past is not a deed to land. It is a record of human struggle, survival, and reinvention.
And if we’re serious about historical accuracy, we must resist the urge to turn archaeology into ammunition.
Pics of the Week:
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