(h/t jordi visser)
“It’s a new world. It’s the same Constitution.” -Chief Justice Roberts
I have been sitting in front of the computer for a while now, trying to figure out where to start, so I’m just going to free associate and see where it goes.
I listened to some of the SCOTUS arguments about birthright citizenship, and from what I heard and, more importantly, what the actual legal commentators reported, it sounds like another embarrassing loss for Trump. Unlike Congress, the judicial branch continues to show its unwillingness to roll over and rubber-stamp a rewriting of this country’s ‘operating system’. Less important but still worth noting, the East Wing renovation was just temporarily halted by a judge.
I understand his Rasputin-like influence on Trump, but one wonders whether Miller’s status is diminishing as policy after policy he championed fails to become reality; perhaps more relevant, extremism has steadily eroded popular support for Trump. One can only hope.
Feels like we are entering the ‘Cabinet removal’ phase of the Administration; Noem has been re-assigned, followed by embarrassing leaks about her husband. Hacked videos from Patel’spaftfel’s phone and pc cannot play well, and his self-promotion and complete failure at the FBI are getting more comments from pro-Trump press. Today we have a NYT story about Trump discussing removing Bondi, and it didn't go unnoticed that the President is now repeatedly mentioning how others, notably Hegseth, were the ones who pushed/sold him on the Iran.. ‘excursion’… let’s see how this plays, but we know what happened in Season One.
OK, on to Iran. The speech last night was, given the context and the importance of the moment, one of the, if not
, worst speech I have ever heard. We’re talking Biden 2024 debate-level bad. Rather than ramble, I am going to bullet-point it:theCall it whatever you want, we have been at war for over 4 weeks, and this is the first address to the nation. No, I do not count videos or bleats on Truth Social. It should have been somber and focused, with a clear explanation, message, and statement of goals. Instead, it was a melange of self-aggrandizement, campaign trope, and meandering discussion of the state of play. You can cherry-pick good and bad lines, but the overall product was decidedly sub-par.
Venezuela is literally irrelevant to the discussion, as is Artemis launch. Both were impressive achievements, true, but their presence in the speech pure self-congratulatory drivel. Conduct unbecoming.
We do not yet have a clear explanation of timing or goals. It seems like previously stated cast-iron end goals are now being minimized as achievement becomes more complicated.
We have gone from removing the enriched uranium to ‘yeah, we buried it, and we’re going to very carefully watch the sites, which assumes that Iran left it all where we think they did. Similar to last June we are not sure where the uranium actually is.
Suddenly, the free passage of petroleum products through the Strait of Hormuz is a secondary goal, better left to others, which leaves Iran in a stronger regional and global economic position; control of the Strait means control of 20% of global energy, vs the 5% that Iran directly supplies. The Strait wont ‘just suddenly open’ nor is it and the oil just ‘there for the taking’. Does anyone believe that?
There were expectations of a timeline for withdrawal. Instead we got some confusing mix of ‘in the next 2-3 weeks’ which is a oft-used deflection by Trump ( I have lost count of how many new health care plans were coming in 2 weeks), a threat to ‘bomb them back to the stone age
where they belong’ (emphasis mine), and some nonsese about killing leadership equalling regime change. Sprinkled on this was the renewed threat to bomb energy and electrical facilities ‘at the same time’ which, if you are keeping score, is a war crime. This morning we read that a major bridge with no military importance was destroyed.Happily, there was no explicit threat to NATO. For now. But please don’t suggest the answer to the energy issues is to buy American energy. C’mon man. And can someone explain to him that, barring export bans, energy prices are
**global?**Domestically, saying that inflation and specifically gas prices. will go down very soon is remarkably tone-deaf. I understand he really has nothing better to say, but some empathy for the average American would have helped. And can someone explain to me how and why the speech compared the length of current operation to WW1, WW2, Vietnam, and Iraq? Was that basically ‘suck it up, buttercup?’
Lest we forget, this is a three-body problem, with the Iranians and the Israelis still having agency.
I thought it was quite the turn of tables that the Iranian President is now writing open letters to the American people; that was the kind of thing the US always did. Iran is continuing its policy of horizontal escalation, endeavoring to inflict as much pain on any regional states aiding the US; it appears they still have enough military assets to strike neighboring countries.
Whilst Bibi said yesterday that the existential threat is largely gone, the Israeli position is that Iran cannot be left with power and influence in the region, which seems to conflict with Trump’s new paradigm. Israel has already stated it will not cede captured land in Lebanon. And one wonders who ordered the assassination overnight of the former Iranian foreign minister, said to be spearheading back-channel talks with the U.S.
Energy prices are spiking this morning in response to the speech. Perhaps more importantly, and getting little attention here, multiple countries in Asia and Europe are starting to impose restrictions and/or rapidly running through reserves. A major planting window closes April 15, which, given the time constraints, even if the Strait were to be reopened today, obviously will slam shut; the spike in global food prices and increased likelihood of food shortages is almost a given at this point.
War premium dominates: Trump’s Iran address dashed ceasefire hopes, sending oil above $108/barrel and triggering a global equity selloff, with Asian markets bearing the brunt of losses. The Iran conflict continues to escalate into a full-scale supply shock as President Trump’s primetime address on Wednesday dashed hopes of imminent de-escalation, pledging to hit Iran “extremely hard” over the next two to three weeks.
Overnight, we had an NYT piece saying that the US intelligence assessment on Iran is that the regime is unwilling to negotiate seriously, believing it holds the upper hand militarily. Iran does not trust the US and does not believe Trump is serious about talks, pointing to his record of ordering attacks on Iran twice during previous nuclear negotiations.
(nyt)
Inflation shock accelerates: The ISM manufacturing prices paid index surged to 78.3, the highest since mid-2022, as the Strait of Hormuz closure removes 10% of global oil supply
Central banks face dilemma: Markets are pricing in Fed and ECB rate hikes, but policymakers signal caution, creating volatility in rate expectations and bond markets
AI infrastructure race intensifies: Major partnerships (IBM-Arm) and investments (Microsoft’s $5.5B Singapore commitment) signal structural shift toward Arm architecture and AI monetization
Geopolitical risk premium rising: JPMorgan’s Dimon warns of the most concurrent risks in 80 years, while Buffett highlights nuclear proliferation dangers. Oxford Economics warned that a sustained escalation could push global oil markets beyond a price shock into severe physical shortages, with rationing and supply chain disruption becoming increasingly likely
M&A momentum persists: Despite volatility, major deals continue (Intel-Apollo $14.2B, KKR’s record $23B fund raise), suggesting long-term strategic positioning
Energy security focus: Countries scramble to secure supplies, with the U.S. tapping strategic reserves and Canada positioning as a “reliable” energy partner. European natural gas jumped as much as 7.2% Thursday to €50.95/MWh following Trump’s remarks, while Brent crude surged past $107/barrel as concerns over prolonged Strait of Hormuz disruptions intensified.
The dollar strengthened 0.4% against all G-10 peers, resuming its advance as safe-haven flows accelerated and traders repriced terminal rates higher across global bond markets.
Cross-asset correlations are breaking down with Bitcoin tumbling as much as 2.9% to $66,500 alongside broader crypto weakness, directly contradicting any “digital gold” narrative as the asset behaves as a risk-off liquidation candidate rather than a haven.
Risk-off sentiment is deepening, with emerging market equities sliding as much as 2.3%. Nikkei fell 2.5%, Kospi dropped 5%.
The Indian rupee surged 2.1% after authorities extended currency controls to offshore derivatives, imposing a 20% volatility margin on dollar-rupee forwards
French President Macron called a military operation to “liberate” the Strait of Hormuz “unrealistic”, while the UAE asked the UN to authorize measures, including force, to reopen the waterway . Putin offered to help end crisis.
Global bond markets sold off sharply as traders now see greater than 50% odds of a 25bp ECB hike this month and fully price two quarter-point increases by July . BlackRock added to bearish positions on German bunds, betting on a “pretty large inflation uptick” across Europe , while JPMorgan Asset Management is buying shorter-dated Treasuries and gilts, seeing value in the two-to-five-year curve.
One of my pet peeves. Why has no U.S. President in the last 30 years made re-training a national priority??
Another day, another gate
