Why Trump is Putting Iran Before the Midterms
Stocks rallied in the final month before 9 of the past 11 U.S. midterm elections. Will 2026 follow the historical pattern or prove the exception. Lessons from 2018.
The Fight for MBS
The market has mistaken the surge in Saudi oil exports over the past two weeks for evidence of diplomatic progress. Iran may be only days away from withdrawing the carrot, and reaching for a much bigger stick. I remain bullish oil and bearish stocks.
How High Can rates GO?
The impact of AI capex on rates can be quantified through return on investment. Wall Street forecasts imply returns of up to 50%. Rates will keep going up until the AI bubble pops.
Trump’s AI Gamble
Two developments over the past week suggest Trump is moving closer to banning Chinese AI. He appears to have decided to live with the growing risk of massive cyberattacks rather than allowing China to reach AGI first. Much is at stake in the Trump-Xi summit if it goes ahead
A Tail-Risk September
Stocks are near record highs, even as bond yields and oil surge. September brings 5 potentially explosive tail risks. Something has to give. VIX looks cheap.
Everything You Need to Know About Oil Right Now
The negative correlation between oil and stocks is strengthening again. Malacca tanker counts do not support claims of easing in Hormuz. The divergence between Arabian Gulf–Asia shipping rates and Brent is unprecedented. Markets misunderstand the significance of the Oman deal. I remain bullish on oil.
Financial Repression or an AI Bust?
It is NOT a coincidence that the US moved to cap long-term rates in the same week that the Anthropic IPO gained momentum. As Xi ‘s visit approaches, Trump faces the biggest economic decision in 2026. I have turned bullish gold.
The Bond Mystery
Q2 earnings were strong, but outside AI, earnings growth is likely to slow in Q3 with the one-off tariff refunds behind us. Inside AI, token prices are falling faster than token volumes are growing. Fear may keep the AI capex boom going for now, but eventually the economics have to matter.
The Case for Selling the YEN
The weakness of the yen reflects increased term premium under Takaichi and loss of competitiveness. The intervention provides an opportunity to sell it until the next intervention becomes necessary.
The New Macro Regime
Forward guidance was appropriate when the Fed was constrained by the zero bound. However, it has encouraged excessive risk taking in recent years. By raising uncertainty, the new regime of no forward guidance may have burst the AI bubble.
