The next big question: What is happening in the Bab al-Mandab Strait?
Since the Iran war began, the Strait of Hormuz has been the focal point, as it accounts for ~20 million barrels of daily oil supply. On Thursday, Iran's Fars News Agency said Houthis in Yemen and other “resistance groups” may soon join the war against the US and Israel, per WSJ. Not too long ago, Yemen's Houthis, who are backed by Iran, were striking ships in the Red Sea, resulting in a major drop in shipping activity. Currently, ~12% of global seaborne oil passes through Bab al-Mandab, making it the world’s 4th-largest shipping chokepoint. If this passage is closed, another ~6 million barrels of daily oil supply would be halted. Total offline capacity between the two Straits would near 25 million barrels per day, or ~25% of global supply. We have another pivotal week ahead. Source: The Kobeissi Letter, EIA
Why stocks outperform bonds and cash
The only reason why stocks have a higher long-term return than bonds and cash is to compensate investors for taking on the greater risk of uncertainty, volatility and drawdowns along the way. Without this risk there would be no higher reward. Source: Charlie Bilello @charliebilello
Top 25 Countries That Consume the Most Oil
Note: Figures Rounded. Source: Energy Institute, IEA via VG Global Statistics @Globalstats11
Citadel’s Global Fixed Income fund and Taula are among the hedge funds worst hit by last week’s market turmoil, while D.E. Shaw & Co.’s two main vehicles were a rare bright spot in the industry.
Here's all the latest numbers collected by Nishant Kumar @nishantkumar07 / Bloomberg
A toxic cocktail for financial markets?
1) Iran war put downward pressure on global economic growth and upward pressure on global inflation: 2) US labor market continues to weaken 3) The Fed has less leeway to cut rates because of rising inflationary pressure (and despite weakening labor market and weakening growth) 4) Some investors start to lose confidence in some Private Credit Funds as banks are forced to mark down their bad credit exposure. All of them are manageable separately. But the mix is not easy to deal with...
U.S. Presidents on Fiscal Responsibility
“The Federal Government cannot continue to spend more money than it takes in.” – Jimmy Carter (1978) “For decades we have piled deficit upon deficit, mortgaging our future and our children's future.” – Ronald Reagan (1981) “We must bring the Federal budget deficit under control.” – George H.W. Bush (1989) “We must put our fiscal house in order.” – Bill Clinton (1993) “We can pay down a large portion of the national debt.” – George W. Bush (2001) “Families across the country are tightening their belts … the federal government should do the same.” – Barack Obama (2010) “We will start to balance our budget and pay down our debt.” – Donald Trump (2016) “My plan will reduce the deficit.” – Joe Biden (2022) “We will balance the federal budget.” – Donald Trump (2024) Charlie Bilello
The history of WTI Crude oil geopolitical spikes
Source: Evan @StockMKTNewz Leverage Shares
What part of the credit cycle is this ?
Source: Citrini
