***** denotes well-worth reading in full at source (even if excerpted extensively here)
Economic Fare:
Global oil demand is set to exceed supply in the current year amid the ongoing conflict in the Middle East, reversing previous projections of a surplus, OilPrice reports citing the latest IEA data.
"With Hormuz tanker traffic still restricted, cumulative supply losses from Middle East Gulf producers already exceed 1 billion barrels with more than 14 million (barrels per day) of oil now shut in, an unprecedented supply shock," said the agency, which advises industrialized countries. .........
................... In other words, futures markets are not ignoring the risks associated with the Iran War. They have already embedded about a $30 geopolitical premium into current pricing. Inventories imply a price closer to $70, while markets are pricing oil near $99. That is a substantial overvaluation relative to inventory fundamentals.
This is how markets translate uncertainty into price. Oil cannot trade at theoretical values unless counterparties are willing underwrite that transaction.
.......... One may believe that current physical scarcity justifies $150 oil, but markets do not move to theoretical scarcity values automatically. Price only rises to levels at which counterparties are willing to make a trade. Like it or not, that is how the process works.
......... The main takeaway from these charts is that markets are pricing an intense near-term squeeze while still expecting some form of resolution to the Iran War and related supply disruptions within a relatively short time frame. Markets are adaptive. If comparative inventories continue falling deeper into deficit, prices will rise further—but only when counterparties are willing to make trades at higher prices based on evidence of worsening physical constraints rather than fear alone.
Robin J Brooks: Is US inflation picking up?
There’s NO sign underlying inflation is picking up despite yesterday’s “hot” CPI
…I should clarify upfront that I’m an inflation “dove.” It feels to me like we’re on the cusp of a major automation wave in white-collar jobs that are heavily administrative and repetitive. There’ll be lots of people chasing far fewer jobs in coming years, which will put downward pressure on wages. I just can’t see how - with that as a backdrop - underlying inflation has room to pick up, even with everything that’s going on now…
Morgan Stanley Insight: Global Economics Mid-Year Outlook: A Fluid Outlook (via The Bond Beat)
Coming into this year, we were constructive on growth and remain so, but with increased caution amid the energy supply shock. Energy volatility generates a wide range of outcomes, particularly on the inflation front. The AI boom remains a critical driver of demand, but its effects on productivity are a wild card. We rely on scenarios to illustrate potential paths for the global economy depending on oil and AI outcomes.
- Global growth is fundamentally supported by continued US momentum in AI-driven capex and high-end consumer spending, which over time should allow for a broadening in macro drivers. China is more insulated than Europe, although in each case the energy shock will damp but not derail the expansion.
- The duration of the energy disruption is consequential – our base case assumes crude back to $90/bbl at the end of the year and further declines in 2027. A more-protracted oil price dislocation would exacerbate growth and inflation risks, and a permanent risk premium for oil would stall the return to target inflation globally. An “escalation” scenario – where oil prices surge through $150/bbl – would mean physical shortages, supply chain disruption, and recessionary outcomes. .......
............ Energy and commodity markets, policy choices, and the speed of AI adoption all combine to define growth through 2027. In the baseline, the energy shock slows the global economy modestly through mid-2026 before growth stabilizes and recovers into 2027. We see growth near potential across most major economies. AI-driven capex and fiscal spending on energy security and defense provide a firm floor to prolong late-cycle growth. But we are assuming that the conflict in Iran is resolved in the next month, limiting the effects to one quarter, and that volatility from energy prices subsides over the balance of the year…
Market Fare:
A rally fueled by improving expectations lacks broad support
The indexes are hitting new highs. The S&P 500 is up 6 weeks in a row and finished last week just shy of 7400. The NASDAQ composite, which is also up 6 weeks in a row, pushed 4.5% further into record territory last week.
Beneath the surface, however, the picture is not as rosy. The index is hitting record levels and yet only slightly more than half of the constituents in the index are even above the long-term moving average - for the median stock in the index, a new 52-week high would require a rally of more than 15%. The percentage of stocks above their 200-day average is falling and by the end of last week it dropped below 55%. ..........
Commodity Supercycle: The Enemy Of The Bull Thesis (Part 1)
The commodity supercycle thesis is everywhere right now. Bank of America’s Michael Hartnett, one of the most widely read strategists on Wall Street, recently declared “commodities the biggest trade of the next five years,” anchoring the call on deglobalization, chronic capital underinvestment, and a world drifting away from dollar dominance. As is often the case, the narrative is extremely compelling. However, it’s also internally contradictory in ways that most investors aren’t stopping to examine.
DB: Asset Allocation - Q1 2026 Global Earnings: Tech Drives Robust Growth (via The Bond Beat)
Biggest groups have gained $5.4tn in value since conflict began — but semiconductor sector accounts for most of the gains
A.I. Fare:
US tech giants including Alphabet and Amazon are tapping foreign debt market at an unprecedented rate
This isn’t a joke, and it’s becoming a big problem
......... There’s a specific kind of brain rot spreading through executive suites and VC circles right now. It looks like productivity. It sounds like innovation. It burns through tokens at a rate that would make your CFO cry. And it produces almost nothing of measurable value.
AI writing is impossible to avoid, is making everything sound the same, and is driving us crazy.
(not just) for the ESG crowd:
Daegan Miller on the Often Misunderstood Work of Roy Scranton
............................. It’s useful to think about the difference between the words “world,” “planet,” “Earth,” and “globe,” and Scranton, drawing on the work of historian Dipesh Chakrabarty, writes, “we might say somewhat reductively that…the globe is political, the planet scientific, the Earth phenomenological, and the world ontological.” Or to put it another way, the nation states, treaties, and climate summits make up the globe, while climate modeling and evolution and the periodic table of elements and carbon cycle are what define the planet. The Earth is the ground we feel under our feet, the wind we hear in the trees, the sun we feel on our faces. And the world: that’s a capacious Old English word that means “the state or realm of human existence on earth.” Each of these is deeply entangled with the others—a change to one ripples its way through each—but the point remains that the end of the world means the end of the realm of human existence, and for those of us living today the realm of our existence is a fossil-fueled, capital crazy, trigger-happy world of exploitation, extraction, and extravagance for the few at the cost of immiseration for the vast majority of life. ........
Sci Fare:
Consciousness is not separate from the physical world — our “soul” is of the same nature as our body and any other phenomenon of the world.
A fierce debate is raging around the slippery notion of consciousness. It retraces a trotted pattern of cultural resistance: We humans are often scared by anything that may disturb our image of ourselves.
Famously, Darwin’s realization that we have common ancestors with all living organisms on our planet met ferocious resistance. Many felt confounded or degraded by the idea of sharing a family tree with donkeys. The cultural history of modernity is dotted by similar ideological rearguard battles, wherein old worldviews fight in retreat against novel knowledge to save some concept held dear. Amid the current cultural backlash against progressive ideas, today’s debate on consciousness reflects our human fears of belonging to the same family as inanimate matter and losing our dear, transcendent souls. .....................
U.S. B.S.:
Husseini: Yes, Death to America
Usonia: More than 250 Years in the Making
War Fare:
from an evil neocon M-F'er
Kagan: Checkmate in Iran
Washington can’t reverse or control the consequences of losing this war.
......... Iran remains in control of the Strait of Hormuz. The common assumption that, one way or another, the strait will reopen when the crisis ends is unfounded. Iran has no interest in returning to the status quo ante. People talk of a split between hard-liners and moderates in Tehran, but even moderates must understand that Iran cannot afford to let the strait go, no matter how good a deal it thought it could get. For one thing, how reliable is any deal ..?
Geopolitical Fare:
A deeply disturbing and meticulously documented report by historians Liat Kozma and Lee Mordechai of The Hebrew University of Jerusalem traces the starvation of Gaza over the past three years through data, testimony, official statements, food prices, aid access, and powerful… pic.twitter.com/c8x7RLrbQk
— TheMuslimLawyer (@faisalkutty) May 11, 2026
Other Fare:
The transition from small hunter-gatherer societies into complex civilizations gave rise to the first Axial Age. Today, the planetary polycrisis of climate chaos, mass migration, increasing warfare and transformative AI represents a rupture of comparable magnitude.
Vid Fare:
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