I’m not going to comment much at this point on the GDP report that came out, except to note that, while “real” GDP growth came in lower than most economists expected, it came in higher than I expected and higher than I believe is likely true. However, what stands out—even if the still mediocre GDP growth rate is accurate—is the inflation rate that came screaming through! It’s hard to say this time the government didn’t subtract enough for inflation to get GDP real because, at last, what they subtracted for inflation almost looks like an honest number:

Red-hot inflation. The GDP deflator, which tracks inflation in the entire economy (consumers, businesses, and governments) soared by 6.3% in Q2 annualized. Not adjusted for this red-hot inflation, “current dollar GDP” jumped by 7.9%. But adjusted for inflation, “real GDP” rose by only 1.5%, according to the GDP data from the Bureau of Economic Analysis today.

“Real” GDP overall grew by only 1.5%, dragged down by this red-hot 6.3% inflation. (Wolf Street)

The “deflator” is the percentage rate the Bureau of Economic Analysis subtracts out of raw GDP growth to make up for what inflation falsely added to GDP because GDP measures production in dollars, not units of goods and services produced, and its goal it to only report on domestic production. Mathematically, the number you subtract out to get rid of a percentage increase that hit GDP simply due to rising prices is always smaller than the percentage increase it took to drive prices up because you are working from a larger number, so it takes a smaller percentage to subtract out the same number of dollars. So, backing out 6.3% looks real … at least, at first blush.

While I am leery, regardless, about believing in the 1.5% real GDP growth rate, it’s still shows weak growth, at best:

In the years between the Great Recession and the pandemic (so excluding recessions), average quarter-to-quarter GDP growth was 2.5% annual rate. The average 20-year quarter-to-quarter GDP growth, including recessions, was 2.2% annual rate.

So, 1.5% real GDP growth is certainly nothing to boast about, and we’ve often seen these initial GDP numbers revised down in the next report.

While GDP growth was weaker than economists had expected, the inflation rate is attention getting, considering it includes a good part of the period when fuel prices (and the crude prices behind them) dropped during another failed Trump schmeasefire.

The future of inflation

If you look at the news below on the major changes in the war today, you will see that the price situation for fuels and electricity is certainly going to get worse. I anticipate covering the changes in war and today’s significantly more dangerous headlines about the war in my weekend Deeper Dive for paying subscribers (barring some even more interesting news to come along on Friday).

Also, a fascinating change came through at the Fed that I hope to cover where it is clear from bond yields, following the Fed meeting, that the bond market does not believe inflation is going to remain at current levels and is doing the heavy lifting now to raise interest rates, regardless of what the Fed does … in anticipation of even worse inflation (like I have been assuring you IS coming).

The fascinating part is that Kevin Warsh said repeatedly, after Wednesday’s Fed FOMC meeting, that bonds taking over is exactly what he wants! I’ve never heard the Fed say that. Market analysts in the news today took the bond markets response as a huge fail for Warsh’s big meeting. However, Warsh said he wants to see the US economy go back to markets doing the actual heavy lifting of interest rates to curb inflation, rather than the Fed, and what he sees is markets reacting more strenuously to the threat of inflation now that the Fed is backing out of its constant manipulation. That will likely merit further exploration to see how serious he is about the Fed backing off on its DECADES of market manipulation and coming in only if markets fail to raise rates when higher rates are needed.

Some say, today, that the crash in bond prices (soaring yields) proves the market doesn’t believe Warsh can control inflation. He says, however, it means they’re waking up to the reality that the Fed intends to let markets do the kind of self-correction that capitalism is supposed to be capable of when the “experts” are not always trying to rig the markets and the economy. He says they’re getting the point and getting on with it because he is refusing to give them even a hint of forward guidance, so they’re forced to figure things out on their own, rather than just bet based on what the Fed hints it will do next, which has always turned stocks into a casino that largely bets on the Fed and has made bonds lazy. That’d be nice if it’s true, though the transition back to market-based reality may be a rough ride.

See you in the Deeper Dive where I’ll dig into the larger turns in the war that happened today and maybe find time to dig deeper into the Warsh Factor, which, of course market analysts/brokers already seem to hate because they have been able to play a lazy rigged game for a long time that has stuffed a lot of Fed funds into their pockets. (But, again, this is my superficial glance at Warsh’s words, and that needs some deeper digging.)

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Just a short one today as Trump stews and cusses his head off about his need to attack Iran viciously after it did something unthinkable in war. It tried to attack a US military base. The nerve!

So, stocks plunge, bond yields rise to their highest in more than a year, and this time oil rises, but not enough to get back to making sense with where the situation really stands as the US runs low on defensive weaponry and Trump appears to declare ceasefires in order to stretch out its overstretched weaponry, having expended a lot of it in sales and giveaways to Ukraine and NATO and then a lot more in defending Israel during the Gaza War and then the Hezbollah War and the Iran War 1.0 and now in Iran War 2.0. Even the US can stretch itself too thin.

One knucklehead has finally gotten sense—more sense than the oil market. That’s Alex Jones, who is now screaming we should impeach Trump for treason and send him to a war crimes trial in Nuremberg. Gee, wasn’t Jones the guy who constantly told us during the election that Trump was GREAT and that anyone who thought otherwise clearly had Trump Derangement Syndrome??? Well, he’s finally completely over his own Trump derangement and now sees clearly the exact truth about Trump that others were trying to tell him about when he claimed they were all deranged.

Of course, Jones doesn’t apologize for saying the rest of the world who didn’t support Trump was deranged, nor does he apologize for doing everything he could to get Trump elected because he couldn’t see the obvious truth. Instead, he claims TRUMP changed, which is utterly laughable. Trump was always obvious for what he was. However, at least, the new Alex has gotten new religion on the Trump front and has TOTALLY exited the cult now.

Alex Jones, the far-right conspiracy theorist who was once one of President Donald Trump’s earliest and most loyal backers, called on Tuesday for the president’s immediate impeachment.

In a lengthy rant shared to his over 4 million followers on X, Jones accused Trump of trying to bring back the national draft ahead of a full-scale ground invasion of Iran. He went so far as to claim Trump will use “total war” to “take our freedoms, nationalize everything, and push us aside with AI—total liability, immunity, and protection.”

What do you think we were telling you all along, Alex—back in your derangement days?

Jones, who no longer operates under the InfoWars branding following the Sandy Hook defamation lawsuits, joins other hard-right figures like Tucker Carlson and Candace Owens in breaking with Trump over the Iran war, but took things a step further this week in calling for the president’s impeachment and “Nuremberg-style trials” for officials in his administration.

Good to know it is not impossible for those who truly had TDS to the point where they couldn’t see anything straight about Trump can eventually see the light as Jones, Tuckered Carlson and Owens have done. It wasn’t just the Iran war that got their attention. It was also Trump’s gross coverups of the Epstain Files. What a tawdry mess.

And so I’m calling for it right now: 25th Amendment, impeachment, whatever needs to happen to get this front and center, to get control of our country.

You were a big force in putting him in power and giving him control of the country, Jones. So was Carlson. Don’t expect a free pass on that, given the destruction you helped bring upon the US and the world.

Need to be Nuremberg-style trials. I mean, this is unbelievable.

Actually, it is TOTALLY believable. Some of us tried endlessly to tell you this is exactly the kind of dictator and pathological liar you were electing. That said, hats off to anyone less influential in creating this mess who has had the scales ripped off their eyes and can see Trump clearly now for the megalomaniacal, narcissistic dictator that he truly is who would destroy the world before he’d ever diminish his own ambitions or admit his own failings.

And if you think it’s crazy now, imagine what’s coming with this. They want us in a total war so they can censor and take our freedoms, nationalize everything, and push us aside with AI—total liability, immunity, and protection. This is a disaster. We are facing tyranny, but the public’s awakening.

To the wakening public, we’re glad you are waking up. Welcome back!

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Oil prices have returned to settling calmly because of really bad news on the Iran war. Today’s news was especially bad because, not only did Iran return to firing on a US military base to show it could care less about disturbing President Trump’s “pause” in the war, but the Iranians or their proxies in Iraq took out the world’s largest oil production facility in Saudi Arabia, which feeds the east end of one of its east-west pipelines that bypass Hormuz, while, at the same time, the Houthis took an equally critical refinery on the west end of its other major east-west pipeline.

The largest facility, which has been totally taken offline now for repairs feeds, a pipeline route that carries 7% of the world’s oil supply. So, no big deal. Oil prices plunged, as any reasonably person would expect in today’s upside-down, Wonderland world of oil.

Market manipulation

I highlighted an article yesterday, which only four people out of my 3,700+ (almost all free) subscribers clicked on to read that gave a pretty reasonable explanation of why the oil market has devolved into something that appears to be run entirely by retards. (I use the word properly to mean things that are inexcusably dumb by their own doing, not people who were born with a mental challenge.)

I’ll summarize the article’s conclusion in one sentence for those who didn’t have time to read it: Bidding in the oil futures has been almost entirely taken over by AI-operated and and now AI-created algorithms that are betting on what the other AIs will do or how they can out-game their AI colleagues. It’s become more of casino than the stock market. The article does a thorough job of pointing out all the irrationality in today’s oil market.

Wether the explanation as to how the manipulation of the oil market is happening is right, as I am inclined to go along with, having said the same thing for the stock market to a lesser degree a couple of year ago, the bottom line is that completely manipulated markets don’t usually end well. The price that refineries are paying to actually get crude delivered has been hovering around $150/bbl during a good part of this war, while the price in the futures market for Brent crude has been half of that. Today, Brent dropped another $4+ after the bypass routes for crude across Saudi Arabia to avoid Hormuz lit up the skies.

Severity of the damage

It’s not completely clear in this morning’s news articles the extent to which the successful attacks on these two massive refineries have completely cut off those two major bypass routes or if the infrastructure is still intact enough that oil can be routed past the refining and tank facilities and straight into ships to be processed elsewhere. However, at the same time, the Houthies have effectively turned back a number of ships in the Red Sea, disrupting oil transport there like they formerly did all transport last year.

What we know is this:

A massive fire broke out at Saudi Aramco’s Abqaiq refinery after drones struck the facility and the East-West Pumping Station in Saudi Arabia. NASA FIRMS satellite imagery confirmed extensive fire activity at the site, indicating significant damage to one of the world’s most important oil processing facilities.

Abqaiq is the world’s largest crude oil stabilization plant and processes between 5 and 7 per cent of global oil supply, making it a vital hub for international energy markets.

We learned a little later that the damage was bad enough that the Saudis took the whole plant offline for repairs, but they did not say how long repairs would take. The worst knowledge is that how long repairs take almost doesn’t even matter because what is more important is that everyone now knows Iran and its proxies can and will destroy some of the world’s most important oil infrastructure.

Wouldn’t you suppose it might be hard to get workers to go in and make repairs now that everyone knows how easily Iran can do that again. It’s not a surprise of course; but it is a major escalation as they avoided wrecking that kind of massive damage to the global oil market in previous attacks. They were a little more incremental about it. Another 7% loss of global oil in one morning’s attacks should have a huge negative impact on the oil market, but it didn’t. Speculators fluttered right on over it.

It exposes a secondary risk to oil as well. The Saudis claim the missiles came from an Iranian sponsored group in Iraq. The Iraqis claim that isn’t true. The Saudis indicated they will retaliate on whomever did make the attack. Let’s hope they identify the right party, or they may bring another entire nation into the war if they wrongly attack it, and that is how wars like this escalate into world wars via all the ample opportunities for misunderstandings.

The drone strike has raised concerns over the security of key energy infrastructure in the region, with the Abqaiq facility playing a central role in Saudi Aramco’s oil processing operations.

Saudi Arabia’s foreign ministry has urged Iraq’s government to “take all necessary measures to prevent its territories from being used as grounds from which acts of aggression are launched….”

The facility processes a substantial share of Saudi Arabia’s crude oil before it is exported, making it essential for maintaining global energy stability.

No big deal according to the oil market as prices took a big sigh of relief as if the news was all good.

The damage has sparked concerns over possible disruptions to oil supplies, which could place additional pressure on international energy markets.

Yathink? So a rational person would think, but you couldn’t tell it by looking at the way prices plunged in the market today.

Further damage

This station pumps to Saudi Arabia’s Red Sea port at Yanbu, which was attacked today by the Houthis as well, though it was reported none of the missiles/drones hit targets. This port is a farther reach for the Houthis, giving more time for Saudi Arabia’s anti-missile artillery to take down missiles and drones, and possibly making accurate targeting harder, depending on what they’re firing.

Where the Houthis were very successful in the past twenty-four hours, however, was the much, much closer Red Sea port of Jazan, which is where they have been successful on other days in hitting Saudi tankers and taking them out of commission. Jazan is the terminus of the other major east-west pipeline that supplies an alternate route from Hormuz.

The one thing about a dimwitted futures market is that what the market thinks or prices doesn’t make a dime’s worth of difference on whether we actually run out of oil or to what degree. It can bet like a band of inebriated monkeys strung out on crack, and the oil will still run out in places in proportion to how badly the supply lines are damaged. So, today proved another fact that I’ve been stating: This is a war of attrition, and every single day the problem gets worse for Donald Trump as more and more supply lines of oil get damaged.

Here is a snapshot of history on the east-west line to Yanbu to help give perspective as to why a successful and highly destruction attack on the world’s largest oil processing plant in Saudi’s Abqaiq refinery at that line’s eastern terminus poses geopolitical risk:

Saudi Arabia built East-West pipeline connecting Abqaiq refinery and Yanbu port in the 1980s amid concerns about Tehran possibly disrupting shipping through Strait of Hormuz during the Iran-Iraq war.

The Abqaiq processing facility is a key component of Saudi Arabia’s East-West pipeline. The pipeline carries oil across the desert kingdom from the Abqaiq refinery to the Red Sea coastal city of Yanbu. Oil tankers from Yanbu head either south to the Arabian Sea or north to the Suez Canal.

So the major route created specifically to ease pressure if Iran ever blocked the Strait of Hormuz has likely been taken out. For a few days? A few weeks? No. For as long as Iran wants to keep sending occasional missiles or drones into attempted reconstruction to keep it from coming back. That’s the obvious answer. Iran gets to decide how long those routes are taken out. During the blockade of Hormuz, it was this pipeline that helped ease the impact on global oil.

So, no big deal for prices … if you’re a stark, raving lunatic.

Now, it’s possible the vagary in the reports, not uncommon in war when nations want to hide how much they’ve been damaged to minimize the enemy’s success, is partially why oil prices didn’t go up, but that sure shouldn’t have resulted in them going DOWN:

Iranian-backed Houthi strikes over the weekend on Saudi Arabia‘s Yanbu Red Sea terminal and the Jazan refinery matter less for the damage inflicted than for what they reveal: the vulnerability of the kingdom’s oil export safety valve, analysts told AGBI.

I’ve actually wondered for some time why Iran hadn’t taken those routes out. I guess they are measured in their war efforts in order to keep pressure up for longer. They’ll keep turning the screws on the West until they get everything they want.

While there is no evidence of shipment disruption, experts say the attacks have left exposed what has become Saudi Arabia’s most strategically important oil export corridor.

So, of course, the price of oil relaxed nicely!

The Yemeni militant group’s actions are the first reported attacks on Saudi oil infrastructure [by them anyway] since a UN-brokered truce in 2022.

“Both operations successfully achieved their objectives,” Houthi military spokesperson Yahya Saree said in a video statement on Saturday, adding that the attacks were in response to Saudi strikes on Houthi sites in Hodeidah and Kamaran Island on Yemen’s western coast.

State oil giant Saudi Aramco has yet to confirm any impact on refinery throughput or crude loadings.

I suspect “has yet” is the operative term there, and oil markets should be able to figure that out, too.

“It is safer to view this as a serious escalation in risk rather than a confirmed large-scale supply outage,” said Salih Yilmaz, senior energy analyst at Bloomberg Intelligence.

And yet, oil market’s didn’t even do that! There might be no “evidence” of shipment disruption because the Saudis have not chosen to publicly admit the extent of damage, but it seems a little naive to assume there was no shipment disruption, as interconnected as the world’s biggest refinery is with that pipeline route. It certainly wasn’t viewed as “a serious escalation of risk” because you do not drive prices down when risk shoots way up.

Clearly, Iran’s intention is to cut off the east-west alternate routes that had helped ease some of the pressure created by Iran’s effective blockade of Hormuz. There is zero reason to think they will stop doing that.

As shipping through the Gulf became increasingly constrained, exports were redirected via the kingdom’s East-West pipeline, transforming Yanbu into a cornerstone of global energy security.

Well, not anymore!

The pipeline can transport 7 million barrels per day from Saudi Arabia’s Eastern Province to the Red Sea. After supplying roughly 2 million bpd to domestic west coast refineries, about 5 million bpd of export capacity remains available through Yanbu.

If you’re a shipper, are you going to send one of your supertankers through the now treacherous waters of the Red Sea to the port of Yanbu, knowing that oil flowing to Yanbu is either cut off already or could be at any hour? That’s a lot to risk for oil that might not even be there by the time you arrive.

Even before these successful strikes …

Commodity vessel traffic through Bab al-Mandab, the southern gateway to the Red Sea, fell sharply on Sunday, according to shipping data company Kpler, with only 11 commodity vessels transiting the waterway – the lowest daily level in months….

This weekend’s attacks, therefore, are significant because of where they occurred and what the facilities now represent, rather than the scale of physical damage incurred….

“It seems the Houthis are now targeting infrastructure specifically being used to circumvent the Hormuz disruption,” said Cyril Widdershoven at advisory firm Blue Water Strategy.

Yes, that is what was instantaneously obvious, and one would be a fool to think the Houthis finally jumped into this war only to back off as soon as they were successful; so why would anyone not assume these two major east-wast pipelines either have been taken out or will be soon? Sometimes the estimates of a strike’s success are simply lost for awhile in the fog of war. Fools would assume nothing happened. Pragmatists would price in a lot more risk, in the very least.

The entrance of the Houthis is by any reasonable calculation a significant escalation of risk and actual damage in the war:

“At the same time, they are attacking Saudi-linked tankers and have threatened Saudi maritime activity more broadly.”

And we’ve already seen how readily and successfully they can do that.

The last big Houthi-linked strikes on Saudi oil infrastructure were the 2019 attacks on Abqaiq and Khurais. These temporarily knocked out 5.7 million bpd of Saudi production—roughly 5 percent of global oil supply—triggering the biggest single-day jump in oil prices on record.

Yet, this time, the same kind of action triggered a lovely drop in the price of Brent crude, certainly underlining what I published on Monday and in my weekend Deeper Dive about where the realities of this war are headed v. the inanity of the market, regardless of whether the market has been taken over by the pet algorithms created and deployed by AI traders or just full of really stupid human beings.

The AI menace

Speaking of which, one other interesting bit of news in the headlines is emphasized below today: Last year I wrote about how Sam Altman and Elon Musk and some other major AI developers were saying the second half of this year would be the time when we would reach the AI singularity, which means the time when we lose all control over AI’s development as it takes over on its own.

Altman said today, he’s created a genie; but more importantly, he said that, with that creation, we have now hit that benchmark. We are not entering it. We are IN it. He hopes AI can still be harnessed to grant our wishes for good, but jinn, as the Arabians called genies, are actually thought of in Arabian lore to be more demonic in character than they are to grant three wishes to whomever uncorks their bottle or polishes their lamp.

And, with AI now have just slipped past the singularity level, if Altman is right about his own AI (and that doesn’t seem like the kind of alarm any developer would ever want to sound), all the more reason to wonder what its involvement is in the completely unhinged oil markets. There is an interesting little intersection there between the arrival of the singularity and the singularly most stupid market in history:

Markets largely shrugged off the Houthi-Saudi attacks, with oil prices hovering near a one-week low on Monday as the US and Iran paused strikes over the weekend.

And they had just gone up in the days before, but suddenly they plunge on worse news.

Has the SPR hit its functional limit?

Also in the news that follows a good article about how Trump is playing chicken with the United State’s strategic petroleum reserves, explaining the mechanism by which any further drawdown from current levels could collapse the facilities so we cannot ever store oil in them in the future.

Yet another article explains how Trump’s pause has nothing to do with giving Iran a chance for negotiation and everything to do with the US running dangerously low on defensive weaponry, even as its losses in the Middle East have been increasing in size, which may even explain WHY they have been increasing in size.

The risk of damage to the salt caverns that store oil in the SPR may explain why the SPR remains frozen right where it was when Trump said we’d be out in another month. Even today, the numbers haven’t budged from a month ago. It may be simply the dangers of taking it any lower got through to him, or it may be the explanation about a sudden temporary oil supply that I gave in my Deeper Dive.

More likely, it is both: It’s too risky to take the SPR down any further, as you would only use that oil when you are ready to risk collapsing the caverns, and the unexpected temporary supply explained to my paying subscribers made it possible for a month to avoid too much of a hit from the SPR going “out of business,” but that temporary supply is over now. I explained why in the Deeper Dive. The article below will explain the significant risk in this game of chicken if Trump does decide to take the reserves down further. There is a solid reason for not doing that until you are extremely desperate.

Only Trump is desperate to make a deal

And all of this is why yet another article reports the Iranians as saying they are not dying to make a deal at all, contrary to Trump’s endless lie on that matter. They are more than happy to wait for attrition to exact ALL of its possible costs. Attrition is a game played with time. The article explains how a state of limbo in the war is actually the Goldilocks situation for Iran, giving them some reprieve from the pains of intense bombings via pauses for pretend negotiations, which buys them more time for their attrition to increase its pain on the West.

Iran claims the US has experienced “strategic defeat at every step.” That would apparently to be true, given that the only one constantly seeking a deal that we know of is Donald Trump. Iran keeps saying it is not interested in dealing with Trump at all, and Iran continues to hold out for 100% of everything it has ever demanded as conditions for ending the war, and Iran now claims the pain they are bringing upon the US with their closures of oil traffic will grow to where they get 100% of what they are demanding.

Since Iran is the party that keeps walking away from every attempted deal, showing they must have read Trump’s book, The Art of the Deal, so they know the one who wins the deal is the one who has the strength to walk away. Trump, on the other hand, keeps making threats and then walking away from delivering on his threats in order to try to seek a deal again and again. We’ve seen that happen as many times as there were years in ancient Israel’s wandering in the wilderness during the Exodus.

So, predictably, Trump says, once again, there’s “a good chance” diplomacy could yield a breakthrough. “We’re talking right now.” Of course, you are, you idiot, because Iran wants you to keep talking. That eases the bombing pressure on them while it keeps cutting off more and more oil for you with each day that passes.

Iran’s top negotiator, however, denied any negotiations are happening with the US. Since Trump never emerges with a deal, Iran would appear to be the one telling the truth while Trump just spouts off anything he wants to, making up “alternative facts” as he goes and believing, if you repeat the big lie often enough, you can sell it. I guess he sold it to the oil market today. Easily done because one point brought out in the article I carried yesterday was that the algos are intentionally trading off Trump’s words by banking that’s what all the algos will do because that is what they do every time. AI has no more concern, it would appear, for truth than our president does.

But what could be a better situation for Iran than one where you don’t even have to participate in negotiations to get the president to chicken out from his threats because he can be counted on to tell the world you are desperately negotiating when you are not even at the table just in hopes of jawboning oil prices back down. Iran believes time is on their side, and believes they can absorb the pain longer than Trump can. Since he’s the party that keeps flinching, that would appear to be true.

Trump may even think that, because oil prices can be manipulated down by his mere words, he’s not going to feel that much pain. That would be wrong because, as I said earlier, whatever happens in rigged/manipulated prices does not affect when oil runs out one iota. So, if Trump is looking at pricing as a gauge of how bad the future pain will be, we are assured of much future pain by the time he figures that equation doesn’t work when the price is rigged by his own words (whether by his intention or just AI playing along with whatever he speaks into the headlines).

In the end, I cannot tell you with assurance what the nuts are thinking. I can only tell you that they are clearly nuts in what they are pricing … if they are people at all.

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Collapse Life

There aren't many economic buffers left

Everywhere you look consumers are still spending and official statistics continue to describe an economy that is holding together…

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6 days ago · 23 likes · 6 comments · Collapse Life

Today’s title is a bastardization based on this golden oldie about the way life used to be, contrasted to the tough times we talk about in the video above. I share the song to bring a little light and levity back into your day:

A number of excellent videos and lots of headlines follow, which are free for everyone today, particularly about last week’s expansion of the Iran war as the quagmire we are now stuck in. We were stuck in war that had dragged on far longer back when these songs were written, too, but the human spirit rose above the Vietnam war and the social rebellion, and eventually better times did return.

While all the content of this article is free today, and it’s quite an extravaganza, I hope you will consider becoming a supporter of this site and its effort to bring you solid content and unvarnished truth, and thank-you to those who already are supporters. Though the times are getting tougher, I try to invoke a little humor along the way each day to help put the curl of a smile on your lips. There are still many good things left in life. Be sure to enjoy them and remind yourself of them daily. Take time out for them, especially the relationships you have with others, which can be the best part of life:

Economania (national & global economic collapse plus market news)

For the best point-by-point summary explaining the extremely retarded oil market, click this link to a one-hour audio track by Ron Unz. (This kind of market manipulation never ends well.)

And here’s another good rundown:

SNAFU Investing with Lau Vegys

Who Canceled the Oil Apocalypse?

Remember the oil shock…

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6 days ago · 81 likes · 19 comments · Lau Vegys

Money Matters (monetary policy, metals, cryptos, currency wars & going cashless)

Wars & Rumors of War (including cyberwar, civil unrest and revolts)

Iran rejects Trump’s ceasefire request

Trump weighs ‘massive attack’ as Iran rejects cease-fire proposal

Vance, Caine raised concerns about escalating war in Iran, sources say as US pauses consecutive nights of strikes

U.S.-Iran War Pauses for 2nd Straight Day

Trump pulls back after Iran crosses his red line as U.S. military breaks two-week streak of airstrikes amid talks for potential Hormuz deal

Iran’s IRGC says the U.S. is using calls for negotiations as a stall for re-arming after suffering battlefield setbacks (Iran is doing the same)

Donald Trump flew into an expletive-laden rant in the Oval Office as he increasingly loses patience over the war he started

UK Withdraws Embassy Staff from Iran Hours after Trump Threatens Intensified War

Rapid depletion of interceptor and precision-guided weapons worries Trump administration

‘This Country Is in Deep Trouble’: Leon Panetta Sounds Alarm on Iran War

Senate Rejected Measure to Halt Iran War Hours After House Approves Resolution

Iran Threatens the UK for Aiding US with Air Bases– UK Says it “Stands Ready 24/7”

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Trump Conditions Saudi Nuclear Deal on Kingdom Joining Abraham Accords

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Romania shoots down third Russian drone, as president calls breaches ‘intolerable’

Digital Dominance (AI threats, transhumanism, hacks & cyberattacks, etc.)

‘Half the internet’ goes down as cloud outage disrupts major websites (Cause unstated)

Trump Trade Wars & Turf Wars

Trump imposes double-digit tariffs on dozens of countries as his 10% levies are set to expire Friday

What to know about the 50% tariffs Trump is imposing on Canada

Political Pandemonium & Social Senescence (socio-political issues & events)

Why Trump Loves Cheats.. and is Losing in Iran

Mike Johnson Is ‘Sick of This Shit’ (But Sorry He Said So)

Americans — including many Republicans — are losing faith in capitalism

Knives are out for Vance in the GOP. His allies say it’s a coordinated ‘op.’

Honest widower, 76, alerted IRS after they accidentally sent him $20k refund he wasn’t owed... now its idiot staff are ruining his finances and threatening to seize his farm

Jameela Jamil’s Brit bashing is embarrassingly out of date

Calamity, Catastrophe & Climate Craziness

The planet’s strongest heat dome will soon tower over the Rockies and Plains

France and Spain battle wildfires as more than 250,000 people forced to flee homes

Off-the-Beat News & Just Plain Offbeat News

Thousands Ascend Temple Mount on Tisha B’Av as Jewish Prayer Fuels Growing Calls to Rebuild the Temple

Biohacker Bryan Johnson cloned himself as a baby so he can harvest its organs (ghoul)

Doomer Humor

Hold those relationships fast. Build memories that will last:

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Let us lead off with how the Fed is improving the inflation problem for you under the direction of Trump’s newly appointed Fedhead, Kevin Warsh. Warsh is going to ease the burden of inflation on you by dumbing down the inflation gauge the Fed uses for its target to an even lower state of dumbness than it already has attained. He has put together an advisory panel to find a way to get the gauge to show a lower level of inflation all the time than what it would show if it were just left as it is.

That will, at least, sound better for you, easing your mind; but it will also make it easier for the Fed to hit its target rate, since it has not been able to hit that benchmark since it blew itself far off course five years ago when Jerome Powell kept lowering interest rates and buying up all the Treasuries the government could issue to help create more money during a period of inflation that was, according to him, so transitory it would solve itself … so no reason the Fed shouldn’t keep feeding inflation to help the economy, which he kept saying was resilient and robust so it didn’t need feeding! (Ah well, what does sensibility matter?)

This is where we could easily solve the problem of the Fed’s destruction of US money value by stripping away its Johnny-come-lately mandate of fueling the economy for strong job growth, reducing it to a single mandate of governing the currency for “stability.” Along the way, we simply need to redefine “stability” as mandatory zero-percent price inflation on the Fed’s now favored symetrical basis that Powell introduced. In other words, if you run half a percent over zero for half a year, you need to run half a percent under zero for the next half year and keep “zeroing” in on absolutely zero inflation. Kept to that custodial role, the Fed would be harmless, and fiat currency would be stable, and the economy would have to survive by creating a solid economic/business foundation, rather than by endless monetary stimulus.

But Warsh has a better solution. Just change the gauge so that it is slightly weighted like a handy pair of dice to land with the right numbers up slightly more often—never mind that everyone reading here already knows the gauge under-reports inflation already, which is why no one can seem to understand why Americans are so angry about a declining economy when the government’s claim about “real” GDP growth says the economy is still plugging along barely positive and inflation is only somewhat terrible.

Government and Fed-approved economic data has shown that inflation is once again on the rise; but independent data reveals true inflation has been and is much higher than the government cares to admit. (The Winepress)

Trump already made a valiant stab at correcting the inflation problem about a year ago by firing the person whose department was reporting numbers he didn’t like:

Last September, Trump fired the head of the Bureau of Labor and Statistics because the numbers, according to Trump, were not favorable, and installed a new chief to provide more favorable data. Or during the government shutdown last year, when the administration said they were not going to post key monthly information.

I reported on both of those ways of dumbing down the inflation numbers a number of times back when that was happening. Unfortunately, for Trump, the numbers only got worse anyway. Then there was a more recent round of underreporting to report on:

Trump has also requested that corporations no longer be required quarterly earnings reports and instead only do so twice it year, as the economic woes continue to become harder and harder to paper over.

But now we have a completely new round of planned underreporting to report on as the government continues to play the entire populace (successfully it seems) for fools:

Warsh is now looking to manipulate the data some more in the administration’s favor.

These things are always best done incrementally, as has been the case throughout the history of dumbing down inflation data ALWAYS in a direction that looks conveniently better for the government and helps keep those Social Security COLAs lower:

A coming revamp of the Federal Reserve’s preferred inflation gauge could be just enough to tip the scales against interest-rate increases this year, even if it doesn’t dramatically alter the overall picture on prices.

It’s like boiling frogs. Do too much change at one time, and people might cry “foul” and hop out of the pot, but adjust the temperature slowly and bring them to a dead boil over time. (Of course, real frogs are not actually dumb enough to stay in the pot, but US citizens by vast majority clearly are because all of the mainstream media immediately steps into reporting the slightly more government-skewed numbers as being the new more accurate facts, and few there be who question them or their government.)

That’s the early assessment from economists running the numbers on an annual update of the personal consumption expenditures price index that is due in September from the Bureau of Economic Analysis. Several said the planned changes would have likely lowered core inflation anywhere from about one-tenth to nearly three-tenths of a percentage point if they’d already been applied to the latest data.

Just a tweak at a time, as I say … always gradually to the dumber side that makes the government look better. Now, you might think the fact that every tweak over the past forty+ years of tweaking has been to the government’s benefit would be the kind of thing that would eventually raise objections, but you would be wrong. You just have to allow enough times between tweaks for the vast majority to have forgotten all about the last tweak. Certainly, no one in the mainstream media is going to remind anyone, as I faithfully do here.

Fed officials were nearly unanimous at their last policy meeting in June that risks to the inflation outlook remained to the upside. But given how evenly split they were on the need for a rate hike in 2026, a downward revision to PCE at just the right time could help new Fed Chairman Kevin Warsh and the doves hold the line.

In other words, a tweak in time will not save nine, but it will save seven. It will save the seven members of the Fed’s board of governors from hostile ridicule by their presumptive orange boss. It will give them just enough leeway to not throw him into a tantrum over an immediate interest-rate increase. It’s a pacifier for the playpen, but it is, of course, more than that. It’s a way to help the government keep its interest on the debt down and push Social Security’s insolvency problem off by a few more months.

“The case for the Fed remaining on hold has strengthened substantially,” said Stephanie Roth, the chief economist at Wolfe Research. In addition to the planned PCE update, she also pointed to the recent slump in oil prices from the height of the Iran war in April and May and the latest jobs report, which showed momentum in the labor market over the last few months may have been overstated.

Well, she’s right about the overstated jobs reports, as always reported here. That’s where the government walks a fine line because if jobs are too strong, government loses the argument for lowering interest rates, which includes the hope of lowering them on government debt, though that hope is now mostly illusory as real market forces have started to dominate the bond market, which we refer to as the “bond vigilantes” taking control of interest rates away from the Fed to where the best the Fed can do is run to keep up with its own rate increases to maintain the illusion that it remains under control. Lose confidence in the Fed’s independent control of the monetary system via interest rates, and then the whole fiat system crumbles as trust in the Fed is the only real thing the Fed has to sell if it is going to maintain trust in its currency.

Of course, we already know she is dead wrong about inflation continuing to get any help from declining fuel prices. That misguided and highly opiated hope should have been thoroughly put back to bed by the huge heating up of the war, by Iran’s latest refusal to negotiate at all with Trump when it flatly turned down his end-of-the-week schmeasefire #40 (or is it #41?) proposal as not worth discussing because he is untrustworthy. That didn’t stop Trump, AGAIN, from telling the whole world that Iran was begging to make a deal (which they just flatly walked away from because they were never begging for a deal). Iran is happy with the pain their expanded oil embargo is certain to bring). None of that endless repetition apparently stops his supporters from believing he’s telling the truth and that Iran is simply unpredictable (even though it always does exactly what it says it is going to do).

The BEA in a recent article gave a preview of the tweaks, which will include changes to how prices are measured for certain categories — including legal services, computer software and investment advice — which have drawn scrutiny because of their outsize impact on the index. Economists at Citi, in a June 30 report, described the pending updates as “a big deal.”

When you are tweaking the system, you always want to make sure you are focusing your incremental changes on the numbers that have the strongest impact on the overall inflation rate.

In the past, [Warsh has] also signaled a preference for a “trimmed mean” measure of inflation that excludes the most volatile components at any given time.

The Fed already does that by using “core inflation” as the gauge by which it measures its 2% inflation goal. It doesn’t merely trim the mean. It completely excludes the most volatile components of food and energy. But I guess total exclusion of those two items is not good enough. They need to trim the extremes out of all the other numbers, too. Never mind that you cannot readily trim many of those items out of your budget.

The always willfully complicit mainstream financial media reports the whole thing this way:

Flaws in the PCE index are set to get a fix. (Morningstar)

They are not tweaking the system to get more favorable numbers. They are fixing flaws. Oh, the fix will be in all right, but we know the real meaning of that.

Up-and-down-and-up-again gas prices have a big effect on inflation in the short run.

Yes, they have a big effect on all of us. That’s why the Fed completely ignores them already, and has for years.

The upshot: The redo to the Fed’s favorite price gauge, the so-called core PCE index, is likely to show inflation rising a little more slowly this year than previously reported.

There is nothing quite as predictable as government corruption of its own data.

The estimated reduction could range from 0.2 to 0.3 percentage points. So the current 3.4% yearly increase in the core PCE index for the 12 months that ended in May could be reduced to 3.2% or even 3.1%.

See! You’ll be able to feel better right away because reported inflation will go down. Or, if the reported number actually goes up a little, it will, at least, hold the same in the government reports in order to ease your mind. This is a service the government provides for the inebriated masses that should make it easier to remain on your floating lounge chair as the populace does in the movie Wall-E. Sadly, you have to come to sites like The Daily Doom to get your head cleared and have it explained why things were starting to feel a little fuzzier again. (And, if I’m blessed, maybe you’ll consider supporting that effort if you don’t already, but I digress.)

Drilling deeper:

Fed officials and Wall Street investors especially focus on what’s known as the core rate, which omits food and energy costs and is viewed as a better predictor of long-term trends in U.S. inflation.

How come? Energy prices in particular can gyrate wildly in the short run, making the underlying inflation rate look higher or lower than it really is.

But now omitting food and energy costs from its target rate is not enough. You might see the oft’ reported overall inflation rate and that might be upsetting to you. So, they would like to soften that number a little, too, just to help keep you from thinking they are not doing their job well enough, even though they already ignore all food and energy inflation anyway, in spite of the fact that you don’t get to. They don’t even attempt to find a way to average in those volatile prices.

The main PCE price index leaped to a three-year high of 4.1% in the 12 months that ended in May, up from 2.9% in February.

See, that sounds nasty! We cannot have the overall number breaking the four handle! It alarms people. If you could even get it down by that mere 0.2 percentage points they are talking about, that would put that number back on a 3 handle, and anything that starts with a 3 doesn’t sound as upsetting as something that leads off with 4. The new price is no longer $1.01; it’s 99 cents.

Let’s be clear: The core PCE index also shows inflation rising - and rising too fast for the Fed’s taste. That’s true under the new method and the old one.

Yes, it does. So, even with the tweak, the news will not be good, but it will sound a touch better than the old number in the guise of greater accuracy!

Regardless of which PCE index is used, the Fed has fallen way short of its goal. The central bank is aiming to bring the annual rate of inflation down to 2%.

That brings us to the pending changes in the PCE index.

And, it turns out there is actually more here than just 0.2% decrease in the overall inflation rate. They are actually going to get the core rate down, which will really help them with getting back on target:

The Bureau of Economic Analysis, author of the report, plans to change how it measures prices in three categories that influence the core PCE rate:

-- Portfolio-management fees

-- Computer software

-- Legal services

Most of those things don’t affect many of us much, but reducing them means reporting a core rate that is just that much closer to being back on target.

The cost of these services go up and down depending on whether stocks go up or down, hardly a sensible way to measure price changes. When the S&P 500 surges, so does the estimated inflation arising from investor fees for financial advice.

The new formula to determine these investment prices will be less dependent on swings in stock markets.

I always say, “Why report the truth about what is actually happening in market prices when you can fix that with an adjustment in the math?” So much easier and more permanent. None of us want to be bothered by seeing prices that are constantly bouncing back and forth in the metrics just like they really do in our lives. We need to trim that mean reality!

Under the old formula, the government estimates that fees for financial advice have jumped 22% in the past year. But how many people are really paying investment advisors 22% more now than they paid last year?

The new approach will reduce the yearly rate of increase in portfolio-management fees to around 13%, Oxford Economics estimates.

Well, that’s a welcome change! Now, if only they could get it to happen in the actual fees.

The old computer-software index is due for a refresh, too. The new price measure will give more weight to gaming and information technology for businesses, two categories that have grown in importance.

OK. Fair enough if they’ve grown in importance, but …

Both of these categories show computer-related inflation running more slowly than previously reported.

Well, that’s convenient. Give more weight to the thing that has grown in consumer importance, but only if it also is a thing that has slowed down in inflation. That way, it’s already lower inflation will have more importance.

The old computer-software index showed prices rising at a record 17% yearly pace, dwarfing any prior increase. Historically software prices tend to decline.

The new way of measuring these prices would show an annual increase closer to 10% to 11%, but that’s also unusually high. Some analysts caution the new measure might still overestimate inflation tied to computer software.

How come?

Much of the spending is on artificial intelligence, a technology that improves the quality of software. Qualitative improvements in any product or service are deflationary - that is, they reduce inflation over time.

And there is where the mainstream media helps with a little white lying. Qualitative improvements don’t reduce prices over time. They reduce the reported inflation rate because the government always subtracts from inflation for any quality improvement on the basis that you are getting more for your money. So, they are going to further reduce a category that they are already adjusting downward for quality improvements because some analysts say they are not going far enough.

While there is some logic to adjusting prices for quality improvements, there is also a problem with that methodology. True, you are not buying the same product you were ten years ago, especially with cars and electronics. You are buying a lot more. With the car, things that were options are now standard. You’re getting built-in GPS and built-in phone connections. So, how can you compare to prices of old if you’re actually buying a lot more stuff with that purchase that is now just built into the purchase?

However, the problem with adjusting for all of that is that YOU CAN’T. You are locked into the better iPhone or the better car. You HAVE to buy all the upgrades. So, your real budget costs expand. So, you are getting better toys at what may be a barely higher price. Nevertheless, your budget takes a hit. It becomes harder to live on the same amount of money, even if the toys have more bells and whistles.

So, thank goodness for a government (or a central bank) that is going to make some of that look a little better for you. (Keep your tin-foil sarcasm hat buckled on around here.)

Considering Trump’s own words, we have plenty of reason to think overall inflation should start getting bad … right about now:

Back in June, at the closing press conference for the G7 summit in Évian-les-Bains, Donald Trump explained why he had called a halt to hostilities with Iran. Continued bombing would not reopen the Strait of Hormuz, and as long as the war went on, commercial ships would stay away while emergency oil supplies dwindled.

“We run out of reserves in about FOUR WEEKS,” he warned, conjuring up images of shortages, bedlam, surging prices, and a market collapse on the scale of 1929. Trump told the press that he had studied presidents, and “the one president I did not want to be was the late, great Herbert Hoover.” (The Atlantic)

With that, we move on to the part of this Deeper Dive that is for my paying subscribers where we’ll dig deeper into the real wartime forces of inflation that are going to be impacting you in the manner Trump warned should be arriving right now, and not just talk about the government’s meager attempts to appoint people in the Fed who will work with the government to find ways to adjust the gauges so they look a touch more respectable as the hot numbers start pouring in … and boy are they ever going to come pouring in.

Red-hot flags of inflation

In spite of the revisions coming to the Fed’s inflation tracker, we have a headline today saying the Fed’s inflation gauge is flying a surprising red flag today …

Read more

The NASDAQ plummeted like a missile, falling more than 2% today, and the Dow dropped 500 points. Even the point fall of the smaller NASDAQ was greater than the Dow. And the reason was the war, which has roared back into life and spread wider with the Houthis opening a second front by taking control of the Red Sea. As a result, oil prices soared upward to take Brent Crude over $101/bbl at one point of the day, finally settling at just over $100.

The funny part came in hearing mainstream financial media finally concede that the market has been “shortsighted” about the war. I guess they should read here to get a better sense of things.

Shortsighted stock market can no longer brush off war: ‘It’s too hard to ignore $100 oil’

You have to wonder how all of them failed to see that coming. Yet, they did, and they are now calling themselves shortsighted after the twelfth night of war finally blasted some reality into their heads.

While the U.S. has conducted strikes against Iran 12 nights in a row — sending both oil prices and Treasury yields higher — domestic equities had mostly brushed off the idea of the war between the two countries heating up again, staying flat while oil jumped.

Finally, they got enough doses of reality to wake up for … well, at least a day.

That changed on Thursday, though, when Brent Crude futures jumped above $100 per barrel and the 10-year Treasury yield broke through 4.7%, hitting its highest level since January 2025, after reports of attacks against tankers off the coast of Saudi Arabia.

Who knows what kind of poppy paradise these marketeers may be smoking in tomorrow as greed grasps for another reason to raise stock prices. However, even CNBC’s Crazy Cramer now says he’s finding it very hard to find a reason to buy stocks while he finds abundant reasons to sell them.

The people making the money today are the ones shorting stocks, and the ones who are making the most are the ones who are shorting the stocks that rose the most—the ones the “shortsighted stock market” once said couldn’t fall. Even the market’s priesthood at CNBC is calling the market “shortsighted” at this point.

Now, had they all been this kind of “short” sighted, they’d be making bank:

Short sellers notch $15.5 billion profit as SpaceX shares slide.

Yes, the world’s biggest IPO is flushing badly as people short the AI narrative. Elon Musk, of course, said today that the growing numbers who are betting against SpaceX are going to be sorry … someday. The funny part is they are not cashing in their huge profits. They are extending their shorts to take the ride even further.

“There is no sign of short sellers taking profits on SpaceX,” Ortex co-founder Peter Hillerberg said.

“If anything they are leaning in harder,” Hillerberg said.

So, one of the biggest of the big boys is falling harder as market vigilantes seize control like a bunch of Houthis, creating a sea of red on the market marquis. That’s made rougher by the fact that 56% of the stocks purchased from SpaceX during its IPO were bought with loans.

“These problems became too big to ignore,” said Steve Sosnick, chief strategist at Interactive Brokers, about the move in stocks on Thursday. “It’s too hard to ignore $100 oil. It’s too hard to ignore 10-year rates that are above 4.70%. It’s too hard for the stock market to ignore 30-year rates that are solidly above 5%.”

And who could have seen any of that coming?

“The survival probability of firms who maintain a significant short position in SpaceX over time is very low,” SpaceX CEO Elon Musk wrote in a post on X on Friday.

As Zero Hedge’s motto says, “On a long enough timeline, the survival rate for everyone drops to zero.”

So, yes, eventually those betting against SpaceX may not survive if they hold out too long, but it looks like they still have a good ways to run. So, take it away, Boys (and Girls)!

The weakness in SpaceX shares reflects in part investor concern over debt-funded AI spending. Tesla, another Musk company, reported negative free cash flow in the second quarter for the first time in more than two years as the EV maker accelerated spending on AI infrastructure, battery capacity, robotaxis and next-generation manufacturing.

Yeah, all these guys need to stop that. Their problem is that, when you quit feeding any Ponzi scheme, that’s when it falls. So, they can’t quit.

Meanwhile, it’s getting easy to walk the shores of the Red Sea at night without a flashlight, as the region is lit with the flames of oil tankers.

Of course, “Stupid is as stupid does,” and some sure does remain stupid:

“We have consistently argued since 2nd half of March to use the equity weakness brought on by the Iran conflict to buy into, as the off-ramp and the eventual deal were likely, in our view,” wrote JPMorgan equity strategists in a note earlier this month. “The risks of renewed flareups remain, but we believe one should keep using any dips on the back of adverse geopolitical headlines in order to add.”

Well, I say, “Tank up, JP. I never liked you anyway.”

You can never avoid stupid entirely. It’s not in short supply like oil is. Never short stupidity.

Back in March, many analysts were surprised that the stock market didn’t react more to the conflict initially, and concluded that the U.S. economy was in better shape than in the past to handle energy shocks. That’s a bet that Michael Tanney, CEO at investment advisory firm Pereon Wealth, is taking again.

See? There is always an abundance of stupid. Still, it’s nice to see that a good part of the priesthood now has turned to confessing that the market they were advocating was shortsighted.

Later Thursday, Axios reported that Trump said he’s “considering a massive attack” on Iran. He told the news outlet that it would be “bigger than ever before,” before adding, “I am close to making a decision. We are all set for it.” The president did not give a deadline for the decision, however.

I wouldn’t go long on anything Trump says either, because he flip flops and TACOs from one day to the next. Still, I think betting on the war running longer and oil troubles going deeper is the safer bet. While Trump badly wants out and hopes that his threats will press Iran to negotiate, they never have so far. Iran has stayed rock-solid on the terms it expects, and is willing to run the clock out with fake negotiations that are constantly frustrating Trump. With the Houthis now fully involved in creating a second warfront, Iran knows the pain factor is rising quickly for the US. So, no, they are not jumping to make a deal as President Chump repeated again today.

America pays heavy price

As a result, the cost of America’s national debt is skyrocketing, too, with the Treasury market now putting out red alerts on a weekly, if not daily, basis. The world’s biggest bond market sent out its second red alert this week. You can read all about that in the headlines below and what it means for the “economy [that] was in better shape than in the past to handle energy shocks,” as Tanney claimed above. How long will it be in supposed better shape when fuel prices are soaring again, and we haven’t even gotten to the part yet where we see fuel shortages at gas stations sending prices to the moon.

You can also get a sense via a thorough video posted below of how the Red Sea, as the new war front, is now living up to its name under the evening glow of oil tankers going down under multiple missile strikes per tanker. The video also explains why expanding the war to two fronts means some tough testing of the US military.

Another video describes the message Trump sent to Netanyahu to prepare for a huge planned expansion of attacks by the US as major evacuation orders have been put out to embassies in the Middle East.

Also, a major gold announcement.

Read more

There are a lot of powerful stories in the headlines today about things like Treasuries hitting a worrisome milestone, the huge migration of Americans out of the labor force, AI stocks with revenue beats sinking in a “bloodbath” because of expanded expenditures on AI, a rogue AI bot escaping its “sandbox” and attacking another AI on its own volition, a longterm bull market outlook for gold, and huge hits from the Iran War to inflame inflation.

I’m going to save the inflationary stuff for analysis in my weekend Deeper Dive, including how the Fed is dumbing down its PCE inflation tracker even below how dumb it already was in order to improve the inflation situation in the US by further under-reporting it, hoping we won’t know what is hitting us. For now, I’ll focus just on the headlines about the rapid re-expansion of the war because there was a huge blowout on that front over the past 24 hours.

You may recall my writing the following just yesterday:

Today, we got more proof of how silly yesterday’s brief heart flutter in oil prices was. The mini plunge came as a response to some vain word about Iran and the US possibly thinking about having a short ceasefire to get together to discuss having a longer ceasefire to negotiate on things neither side is close to agreeing on. Those who think that even matters, fail to understand what Iran is doing here.

Today, oil prices got more realistic and rose and held above $91/bbl for Brent crude,

Which was a reference to this comment the day before:

Oil prices gave a little flicker of phony hope over the last few hours. As smoke from the Iran War 2.0 darkened over the weekend, oil prices climbed to almost $91/bbl for Brent crude. Then a single individual in Iran teased the idea that maybe a deal could still be struck with the US, so lunatic oil investors stomped the price down to around $86….

That obviously stupid move lasted a heartbeat because, sometime around that brief atrial flutter in the price of oil, Iran struck some more oil tankers running through the part of the strait that the US likes to pretend it is protecting for commercial traffic, turning the tankers into raging infernos. In response to that and devastation of its military bases by other Iranian attacks that cost the lives of US servicemen, the US attacked an Iranian nuclear plant that is still under construction, something Iran had said was an absolute red line. So, Brent oil prices shot back up to over $89.50/bbl mid-day.

Well, today those oil prices climbed another 4% higher, taking Brent crude up to $94.42. While I will save discussions of that inflation for the Deeper Dive, I wanted to note it in passing as I move on to talking about how much the war that is driving those prices has, itself, inflated into a much hotter inferno over the past twenty-four hours, making those who believed that tiny trace of a claim, which said the US and Iran might be turning back to meaningful negotiations, all the more obviously purveyors of false hopes … and just plain stupid.

There has, in fact, been no move toward negotiations at all. Instead, what we have seen since that lame comment is a move to much more intense attacks all over Iran with Iran responding all over the Middle East and promising even greater and broader attacks against US allies in the region if the US continues to bomb its nuclear sites, which the US is continuing to do.

While Trump has not taken the step yet of using a tactical nuke to bust down into the heart of Pickaxe Mountain and seal off the bulk of Iran’s enriched uranium, which the White House has indicated is a strong possibility, he has punched big conventional holes in other nuclear facilities.

One video that presents some strong footage of the eleventh night of US attacks details damage to Iranian nuclear facilities.

Tonight the United States struck in the heart of Tehran. Also reports are out that US airstrikes targeted the Parchin nuclear site, which is east of Tehran. There’s heavy defense activity heard in the center of the Iranian capital right now.

The video shows footage of intense air-defense activity over Tehran, similar to the kind we saw during the shock-and-awe days of the US-Iraq War under George Bush—the kind of regime-change, oil war Trump was going to stop getting us into.

In all, about 21 strikes across the nation were made by the US in the eleventh round of attacks. After showing a number of strikes and playing audio of other heavy strikes, the video shows Donald Trump saying, “Iran hasn’t seen anything yet.”

“If we left today, it would take them decades to rebuild, and I don’t believe they can ever rebuild. Honestly, they haven’t seen anything yet. We’ve been nice!”

The effect of the intensified conflict is that zero ships crossed the strait of Hormuz, even though the US government keeps repeating the lie that the strait is still open to shipping. Sure, it is, if you don’t mind getting blown up.

The capper of the past 24 hours is that the Houthis have now established a successful blockade of all Arabian oil in and out of the southern strait into the Red Sea. There is still the Suez Canal to the north for smaller tankers, but estimates are that an additional 7% has been taken out of global oil shipments by the Houthi’s full closure to Saudi traffic through the Bab el-Mandab strait. At least, eight Saudi tankers, as of the time of the video, had to turn around and not exit the Red Sea.

Iran hit more oil infrastructure in the Middle East in response, and it threatens worse attacks to come. Iran has stated,

If Trump attacks Iran’s nuclear sites or other sensitive centers, the Islamic Republic of Iran will immediately destroy the assets and critical infrastructure of his regime and his proxies across the nation.

Iran gave no specifics about what that means.

Despite the U.S. president and military continuing to urge vessels to use a southern route through the strait, in defiance of Iran’s threats, few shippers seem willing to risk it.

The Joint Maritime Information Center in Bahrain, a military partnership that includes the U.S., said commercial traffic in the Strait of Hormuz fell to a three-week low on Tuesday amid ongoing Iranian attacks. CBS News tracked just three commercial ships — two cargo vessels and the Chinese-owned tanker Hsin Ocean — transiting the strait on Tuesday.

And today that number dropped supposedly to zero. So, strait closed is the strait truth.

Trump meanwhile has told Iran that he will now bomb one Iranian bridge or electrical power plant in an eye-for-an-eye response over each ship that Iran tries to attack; but, with about 21 major strikes in the past night’s warfare, that is more like a-head-for-an-eye retaliation by the US. Hal Turner reported the following list of strikes in Iran during the night:

• Behbahan

• Mahshahr (multiple explosions reported, including 6 additional blasts)

• Bandar Abbas

• Chabahar

• Bushehr

• West of Tabriz (8 explosions)

• Urmia

• Tehran seems to be under attack in Parchin, east of Tehran.

• Over 9 explosions reported in Parchin, Tehran, local says “our whole house is shaking”

The new war of peace

Now we have a new night that is just passing in Iran where we’ll get new reports of the Twelfth Night of attacks, but one can never have enough wars if they are an imperial president, so President Trump threatened to open up an entirely new war n the West African nation of Mali to rid it of al Qaeda. That should be fun as we know how these al Qaeda ambitions turn into long quagmires.

If approved, [the plan] would add an eighth nation to the list of countries where President Donald Trump has ordered strikes since the start of his second term - a chapter of his presidency that he initially said would be dedicated to ending global strife and redirecting U.S. resources to Americans.

If approved, that will mean Trump’s list of nations where he has started wars is equal to the size of the list he claimed a few months ago for wars he stopped, though I could never figure out what war he actually stopped. Fighting still continues in spurts in Gaza. Fighting still continues in spurts in Lebanon, and Iran is worse than ever. So, we also have a humor video in the headline section talking sarcastically about how “war is peace” as justification for Trump’s claim that he is “the peace president.”

The White House’s response to questions about the new war being contemplated in Mali was …

“We urge regional partners and NATO allies to support the Alliance of Sahel States in their war against JNIM and ISIS,” the official added, referring also to the Islamic State, which rose to prominence in the Middle East before establishing affiliates throughout Africa.

The Alliance of Sahel States consists of Mali, Burkina Faso and Niger - all West African nations where military leaders have in recent years ousted democratically elected governments in coups, largely cut ties with the West and turned to Russia for security help.

We have seen throughout the Trump-Israel-Iran War, which now Trump seems to be fighting on behalf of Israel without even getting Israel’s help, how NATO allies are ready and willing to pitch in to support Trump’s new wars as he excoriates them on a weekly basis for being useless balls of laundry fuzz. So, if the Mali war does begin, it will likely be one more war where the US goes it alone in order to help protect the shady, anti-democratic governments of minor African banana-repubic-style nations from the likes of al-Qaeda as a way of putting America first and starting no new unnecessary wars! As the humor video below says regarding the new motto that War is Peace, “That’s why Donald Trump is the peace president.”

Mali, a landlocked nation of nearly 25 million, has in recent years been plagued by violence by Islamist militant groups - and by Mali’s own junta government and the Russian mercenaries whom it hired to get the situation under control.

The militant groups, particularly JNIM, have grown increasingly powerful, turning Mali and its neighbors in the Sahel into the world’s center for terrorism.

Sounds like a delightful little quagmire for us to get ourselves involved in.

Last year, militants with the al-Qaeda affiliate mounted a fuel blockade that paralyzed much of the country.

Hey, a fuel blockade? That’s right up our alley. We definitely need to get a piece of that peace action. Plus there are Russians involved! Always a good situation for us to get in a tangle.

To combat the violence, Mali’s junta government hired Russian mercenaries, first with the Wagner Group [Love that group and its Putin-assassinated founder!] and now with Africa Corps, which is more closely linked with Russia’s defense ministry. The Russians have been accused of a string of atrocities, according to rights groups and The Washington Post’s previous reporting.

How are we not in there already, fighting shoulder to shoulder with the Russians?

Héni Nsaibia, West Africa senior analyst for the Armed Conflict Location & Event Data project, said that Mali’s military and its Russian backers were responsible for killing hundreds more civilians than JNIM and IS Sahel combined. Last year, the Malian military and its Russian partners were responsible for 925 civilian deaths, according to ACLED, compared with 232 by Islamist militants.

Perfect! We can use our AI targeting systems to target some girls’ schools and hospitals. We have knack for that sort of thing, which will fit right in with the apparent game plan there! That way we can be on the same side with the Russians this time and maybe patch things up with Pootey, as President Bush used to call him. We will, of course, need to pass testosterone tests first, to make sure the warriors we send their way are our best cannon fodder.

“It is extremely problematic that a government like the U.S. or any Western partner would provide support to these regimes whose legitimacy remains contested, and which are incredibly fragile and repressive,” he said, referring to Mali, Burkina Faso and Niger.

Nah! The repressive ones are just the kind we like! They are perfect fits to our new motto that “War is Peace.” Tolstoy had it all wrong. It’s not “War AND Peace.” It’s “War IS Peace.” And there is no place where it is easier for a guy like Trump to become top banana than in a banana republic! So, it’s perfect for his peace legacy, too. The US has always preferred everlasting wars in those tin-pot dictatorships. This time we are looking at fighting in support of the unelected dictator, so maybe that will go better than the times when it was the other way around. If they don’t have any girls’ schools we can hit, maybe they have some Epstain recruitment centers since trafficking of sex slaves is often one of the primary exports from such nations. Now that there is no island for the girls to go to, we can just erase them like we did in Iran! (OK, the humor is getting a little dark, albeit true to what we have done without apology in Iran, and Trump does seem to have an affinity for programs that attack girls, but I’ll stop there just like he stopped there with pursuing the truth in the Epstein Files.)

When asked if Secretary of State Marco Rubio supports military action in Mali, the State Department sidestepped the question, saying the U.S. “unequivocally condemns the terrorist activity in Mali.”

The department said the Trump administration is “committed to promoting regional ownership and cooperation against terrorist threats, and monitoring indicators and warnings of threats to our homeland.”

Sounds like they’ve already scheduled the flights to get the next US war started, and maybe promoting regional ownership, means regional ownership in some new hotels like one named “Mali Lago.”

U.S. military action against JNIM would add Mali to the list of countries where Trump has ordered strikes: Yemen, Somalia, Syria, Iran, Iraq, Nigeria and Venezuela. The administration also has waged a controversial military campaign against alleged drug runners in the Caribbean and eastern Pacific that has resulted in scores of deaths.

That’s us! Defender of the nations! Even if they are oppressive little dictatorships. War is Peace!

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Today, we got more proof of how silly yesterday’s brief heart flutter in oil prices was. The mini plunge came as a response to some vain word about Iran and the US possibly thinking about having a short ceasefire to get together to discuss having a longer ceasefire to negotiate on things neither side is close to agreeing on. Those who think that even matters, fail to understand what Iran is doing here.

Today, oil prices got more realistic and rose and held above $91/bbl for Brent crude, and Goldman Sachs said prices could easily go above $120 if the gulf chokepoint crisis worsens. It did worsen. Immediately. The Houthis announced they were closing down the Red Sea to all Saudi Arabian oil shipments. Tanker traffic that was headed out of the Red Sea via the Bab el-Mandeb Strait immediately turned around in order to avoid being attacked. That effectively knocks out another 7% of the world’s oil supply that had found a side route via pipes across the desert from the Persian Gulf to avoid Hormuz. Who could have seen that coming … since Iran told us it was?

Shipping through the Strait of Hormuz also ground to a standstill over the last 24 hours. So now both sides of the Saudi peninsula are cut off, just as Iran said would happen if the US crossed its red lines, which the US did, as I reported yesterday, when it bombed an unfinished nuclear reactor site that Iran has specifically redlined.

An article on Oilprice.com today says that oil prices will now go higher for longer. It was unintentionally humorous in a couple of things it said.

Oil prices have been on a climb for over a week now as hostilities in the Middle East continue, and despite recent talk of a glut, the physical market is flashing signs of tightness—and higher oil for longer.

I pointed out, when the “glut” talk first began, that it was utterly laughable—as in hard to believe people who are purported to be oil experts could be so deranged as to think there was any possibility of oversupply this year. Even more laughable was the attempted reasoning behind the predicted glut scenario.

Earlier this month, analysts were quick to start warning of an oil glut looming over the world as traffic via the Strait of Hormuz recovered in leaps and bounds amid the U.S.-Iran ceasefire. That was one shaky ceasefire, however, and it broke down soon enough to the apparent surprise of most oil forecasters. Traffic via Hormuz is once again paralyzed, tanker crossings are sporadic, and Iran and the United States are intensifying the exchange of fire. Meanwhile, global oil stocks are melting like snow.

I don’t even know how anyone with two brain cells to knock together to create a spark could possibly think that traffic in the strait was recovering by leaps and bounds. Iran didn’t let a single ship full of oil go out of the strait what was bound to any Western nation. It was shipping as much of its own oil as it could get through the one channel it had opened to its own allies, while not allowing any other tankers through. If you couldn’t see that, you were as blind as the Cyclops after Odysseus poked him in his one good eye. There is something seriously deficient about the coffee you are drinking in the morning if you thought tanker traffic was “recovering by leaps and bounds.”

Yet, that isn’t even the most laughable part. The fact that they were surprised that the latest Trump ceasefire didn’t hold after 39 previous Trump schmeasefires fell apart before the missiles even stopped flying, takes willful ignorance to new extremes. It’s tantamount to saying, “I was surprised that the piranhas attacked the bloody, red meat.” It’s a lot like the way some of these guys were surprised when things went wrong:

How could anything so prone to failing possibly fail? (Sometimes the only thing that is surprising is that more stupid people don’t kill themselves.)

Truth now going unreported

The United States, meanwhile, is approaching critically low levels in its oil storage facilities due to the extensive drawdowns since the start of the war with Iran. These drawdowns have pushed inventories at Cushing, Oklahoma, to minimum operational levels, the Wall Street Journal reported earlier in July, meaning further draws from that facility would be ill-advised as they would compromise the storage facility itself. In more worrying news, inventories in the Strategic Petroleum Reserve are also running low, the WSJ reported in the same news story, sitting at the lowest since 1983.

This is the same information that came out about the level of the SPR a month ago! The story in all of its many iterations hasn’t been updated since then. Has the US government placed a hidden moratorium on reporting the truth about the SPR? By Trump’s own accounting, it should be out of available oil by now, but we’re still hearing that it is sitting at the level last seen when it was in the process of being filled for the first time in 1983. With an additional month of drainage, I’m sure it is in worse condition than that by now, but there is only dead air on that issue.

“The worst fears of the oil market could still be realized later this year as we get to the minimum operating levels,” Andy Lipow, president of Lipow Oil Associates, told the Wall Street Journal. “The only way to get prices back in balance is to have prices go up, such that you would have demand destruction. Once the shelf is bare, there’s nowhere to turn,” Lipow added.

Are we not there yet? The shelves should be getting close to bare with the SPR likely to be at its minimum operational level. (I want to note while I’m on this subject that I may have been wrong in saying part of SPR is only available for the military use. That used to be true, but it appears that limit may have been removed.)

I went to three different government data sites on the SPR, and the reporting on all of them stops at the same point ten days ago, so the latest weekly update hasn’t been reported yet. However, if you look at the rate at which the SPR has been plunging, it should be pretty close to the 250-million barrels level by now.

One bit of news worth noting is that fuel reserves are worse off than oil reserves. There are none. That is why gasoline and diesel prices are not likely to fall even if crude prices did fall. The supply of fuels is tighter than the supply of oil, a problem made worse by Urkaine’s very successful bombing of Russian refineries to where Russia is now begging India to sell fuel to Russia, which it needs for its invasion of Ukraine and for its people. The flow had been the other way between Russians and India until this month.

In Russia, drone attacks have disabled an estimated 25% of refining capacity, which led to the diesel ban, which would have a ripple effect on global markets because Russia supplies an average 11% of the world’s diesel.

No reprieve in site

Even if Iran broke its own recent rule against negotiating with Trump and did agree to another schmeasefire, it wouldn’t make any difference in the rate at which the SPR is falling because Iran would not open the strait up to any oil transport that benefits the West. It never has since the embargo began. A few tankers have managed to sneak through now and then, but Iran blows holes in any it discovers sneaking through the United State’s maintained southern route near the coast of Oman and the UAE.

Trump just avowed that “Tehran will pay … many times over” for the deaths of two US service people. Does that sound like the two sides are moving closer to another ceasefire? The US has struck Iran every night of the past ten days, and Iran has struck back each time. In the latest round or retaliatory fire …

Iran’s Revolutionary Guard Corps said early Tuesday it had destroyed what it called Amazon’s central data infrastructure in Bahrain in a cruise missile strike, along with Patriot air defense batteries in Muharraq and Riffa. The Guard also claimed to have hit a hangar housing U.S. MQ-9 drones at Kuwait’s Ali Al Salem Air Base.

Also in the news today, US intelligence reports that further strikes by the US on Iran are unlikely to change any of Iran’s positions during negotiations, which have held to full control of the Strait of Hormuz, and full retention of its uranium enrichment program and all enriched stocks produced so far. Iran hasn’t shown a bit of flexibility on those sticking points, which was why those issues were left out of the last schmeasefire agreement, known as the Memorandum of Understanding, though it should have been called the Memorandum of Misunderstanding because misunderstandings were baked right in by design as the only way to get Iran to agree to negotiate was by leaving the key sticking points vaguely addressed to be worked out later.

According to US intel, Iran has the upper hand in a war of attrition, which was what I said was Iran’s plan from the day it closed the strait.

A new intelligence assessment suggests U.S. military strikes won’t significantly impact Iran’s negotiating stance. Analysts say Tehran and Washington are stuck in a limbo between peace and war….

Iran’s government is unlikely to feel significant impact or soften its negotiating position as a result of new rounds of U.S. military strikes like those now underway, according to a new intelligence assessment described by current and former U.S. officials.

The word to be used in describing that is “quagmire.” That is what I predicted this war would become from day one, and it clearly is now, as even US intel is calling it “limbo” and a “stalemate” while others are actually using the word “quagmire”:

Analysts at American spy agencies also have concluded that Tehran and Washington are, for now, stuck in an indefinite limbo between peace and war, the officials said — an uneasy dynamic given the increasingly deadly nature of the tit-for-tat hostilities between the two nations. The current and former officials spoke on the condition of anonymity to describe the assessments because of their sensitivity….

Trump’s current course of ever-expanding attacks appears to have led to a stalemate. But with the war deeply unpopular at home, continuing escalation by the United States, such as the possible introduction of ground troops, poses political risks for the president with no guarantee of military success….

Jonathan Panikoff, former deputy U.S. national intelligence officer for the Near East, said that the Trump administration appears to believe that if it keeps hitting Iran harder militarily, Tehran eventually will become more flexible. “That assessment is almost certainly incorrect,” said Panikoff, senior director at the Atlantic Council think tank….

“I’m struggling, because I don’t think there’s a lot of great options for the United States,” Panikoff said, adding that he is skeptical Trump would launch a ground invasion. “You’ll continue to see significant flare-ups in this conflict,” he said, followed by periods of calm and then renewed fighting.

“This is what a quagmire looks like,” said one person close to the White House, who was granted anonymity to discuss private conversations.

Yes, it is, and that likely plays out like this:

Iran may agree to more talks and a ceasefire but not to fully opening the strait as their reason for doing talks is to give the war more time for attrition to do its job. Every single passing day, with our without missiles flying through the air, intensifies the shortages in crude oil and all of its byproducts under which the US and all of the West will be reeling.

Anyone who fails to understand that, doesn’t understand what Iran is doing at all. All it needs is time. The chokehold at the neck of Hormuz will kill Western economies so long as it cuts off the air that they breathe long enough, and it doesn’t take much to keep the hold in place. An occasional missile or drone successfully taking a tanker out of operation does the trick of keeping other tankers from even trying. All you need to accomplish that is literal “decimation,” which originally meant taking out one in ten!

In previous rounds of talks, the Iranians have proven to be obstinate negotiators, particularly on key points such as its nuclear program. At the same time, the administration has repeatedly said Iran has capitulated to U.S. demands, only to see Tehran deny agreement was reached.

That’s because Trump lies even more than Iran. Iran has always said it is not caving in on negotiations in the slightest. Since they have not caved in in the slightest, they must be the ones telling the truth. It stands to reason for those who have some.

Whether this results in “boots on the ground” is debatable because the US populace is solidly against that, and it’s hard to see an upside, but boots on the ground are probably the only way to find and take out all missile and drone launching capability along the strait:

“Anyone talking about boots on the ground, I think, is disconnected from the administration and certainly disconnected from the president,” said Alex Gray, who served as National Security Council chief of staff during Trump’s first term. “They’re pushing an agenda that has certainly no buy-in from the president and his team, and certainly doesn’t reflect the Republican Party today.”

Iran has only said, “Bring that on!”

Meanwhile Team Trump keeps passing out what has become its all-to-familiar canard:

“As the U.S. military degrades the terrorist Iranian regime’s ability to attack commercial vessels and disrupt the free flow of energy through the Strait of Hormuz, oil and gas prices will plummet back to pre-conflict levels,” said White House spokesperson Taylor Rogers.

We’ve had a good four months, at least, of that promise now. Fool is anyone who believes it. Team Trump can say what they want, but I think most of America will be sniffing out the truth at the pump.

“My heuristic always is if the incumbent party has oil above $90 a barrel, they’re going to lose. And if they have it below $70 a barrel, they’re going to win. I think this is already the danger zone,” said Curt Mills, executive director of the American Conservative magazine.

Iran would appear to have Trump by parts of his anatomy that others have only joked about, and I’m probably not talking about his tiny little … hands.

“Trump really has no choice. He put a compromise on the table. He’s not going to surrender, even if he loses the elections” in November.

So, there we are: call it “limbo” a “stalemate” or a “quagmire,” but it all amounts to the same thing: oil stocks keep going down, prices rise. Anyone betting the other way is doing something that has proven many times over to be the wrong bet.

(The headlines that follow connect with stories that lay out the quagmire in full detail as well as the certain trajectory of fuel prices. They also talk more about the AI bubble that is busting as I’ve said all along it will do in leading the way down for all stocks.)

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Oil prices gave a little flicker of phony hope over the last few hours. As smoke from the Iran War 2.0 darkened over the weekend, oil prices climbed to almost $91/bbl for Brent crude. Then a single individual in Iran teased the idea that maybe a deal could still be struck with the US, so lunatic oil investors stomped the price down to around $86.

It came off the highest levels of the day as a spokesman for Iran’s foreign ministry was quoted as saying negotiations with the U.S. could be pursued “based on national interests.”

Uh huh.

That obviously stupid move lasted a heartbeat because, sometime around that brief atrial flutter in the price of oil, Iran struck some more oil tankers running through the part of the strait that the US likes to pretend it is protecting for commercial traffic, turning the tankers into raging infernos. In response to that and devastation of its military bases by other Iranian attacks that cost the lives of US servicemen, the US attacked an Iranian nuclear plant that is still under construction, something Iran had said was an absolute red line. So, Brent oil prices shot back up to over $89.50/bbl mid-day.

This would be the same Iran whose parliament just voted to make negotiations with Donald Trump Illegal. The same Iran that said attacking that particular nuclear plant would be crossing a major red line. So, why was anyone dumb enough to think the oil problem was suddenly better?

To underscore how delusional the thinking was, the price wobble of hope happened after the same weekend when the US has moved more refueling planes into the region and has been more openly talking about putting boots on the ground to take over Kharg Island, a move consistent with needing more refueling planes. Iran says, bring those boots in. We’ll be glad to close the net around them!

It means investors are still treating the conflict as something they recognize and believe they can compartmentalize.

Well, have fun with that! I’m sure the compartments will hold up as well as the burning compartments of those oil tankers held up between the bulkheads when struck with missiles.

The renewed hostilities are “being priced primarily as an oil, inflation and regional-risk event rather than the beginning of a systemic shock,” he said.

Well, it already is a systemic shock, so that kind of thinking is irrational, and the fuel shortages are already a baked-in certainty. Unsurprisingly, gasoline and diesel, which are quick to price in any reason for a rise and slower to price it back out are back up in price again to a US national average above $4/gal. for gasoline and above $5 for diesel. Diesel, of course, influences the inflation on groceries and all goods transported by truck or train as well as energy prices in some regions.

Why would the price of oil drop when the US has promised more …

“strikes will continue degrading Iranian military capabilities used to attack commercial vessels and civilian mariners transiting the Strait of Hormuz,” the U.S. Central Command said.

Iran’s Islamic Revolutionary Guard Corps (IRGC) claimed on Monday they had targeted U.S. aircraft at the Aqaba airport in Jordan with ballistic missiles, and U.S. military assets and equipment at Kuwait’s Al-Adiri camp and Ali Al Salem Air Base, and in Syria.

The IRGC said in a statement late Monday that, in retaliation, it attacked the U.S. military’s Fifth Fleet in Bahrain, setting its fuel-storage tanks “ablaze” and destroying a Patriot radar, the fleet’s air-control radar and a C-RAM early-warning radar system.

“The retaliatory operation is continuing,” it said.

So, yeah, plenty of reason for prices to have taken that sudden dip! I think oil traders must be drinking Texas Tea and hallucinating on the fumes of empty oil tanks.

Marco Rubio, the U.S. Secretary of State, said the United States would continue its strikes on Iran until Tehran continues to attack vessels in the Strait of Hormuz.

I’m thinking that is written incorrectly: The US will continue its strikes on Iran for as long as Tehran continues to attack vessels in the strait.

“As long as Iran insists on controlling an international waterway, we’re going to have to respond to that. The United States always remains open to a diplomatic solution,” the U.S. official said.

Except one report today says Trump is desperately considering ceding control of the entire strait to Iran as the US is running low on munitions—low enough that it cannot long sustain a return to full-scale war, having sold and given so many weapons to Ukraine and sold and given so many to defend Israel during the Gaza War, the Lebanon Hezbollah war and now its bombardment by Iran. The US has also used so many weapons up in its own attacks on Iran during last summer’s Iran War 1.0 and this year’s 2.0, necessary, apparently, to complete the “total” decimation and obliteration of Iran’s nuclear weapons program that was already completed last summer. And the US has lost so many weapons due to Iran’s bombing of US bases all over the Middle East as well with its destroyed air force.

Ponder the realty-based path

Forget smoking the petroleum-based hopium. Ponder reality. If you want to see what is likely to happen with oil prices, consider how the rising price in oil was buffered during the first part of this war and what has happened to those buffers since then:

• In the days before the war, there was oversupply of about two million barrels a day, providing a “head start”, the International Monetary Fund (IMF) said in a report on July 15.

• The world’s top crude oil importer, China, had an outsized role in swaying global oil prices. Since March, it has slashed oil purchases significantly, contributing to reduced global demand. Analysts have attributed this reduction to rising electric vehicle adoption, the use of massive stockpiles and the maturation of alternative fuel sources, such as the increased use of coal in chemical production.

• Production outside the Gulf, led by the US, also rose by nearly two million barrels a day above 2025 levels, the IMF said….

• Governments and international bodies drew heavily on emergency stockpiles. The International Energy Agency (IEA) coordinated the release of 400 million barrels of petroleum, and the US released millions of barrels from strategic reserves.

HOWEVER:

• Some analysts are sounding the alarm again. The IMF warned that while the factors above helped cushion the initial blow, “much of that room has now been used up”…. Spare capacity has been used up and global strategic and commercial stocks are lower now than when the war began.

• What has saved the world in the past four months might not be able to save the world going forward. “The IEA released 400 million barrels, hoping it was a short-term supply shock. But they are not designed or capable of countering a shock that goes on for six to eight months.”

• “The US strategic petroleum reserve (SPR) is closing in on 300 million barrels, which is the optional minimum for these stockpiles, at a 43-year low.”

• Markets are “too complacent” about a smooth restart of Gulf oil production and Hormuz flow normalisation.

• “Moreover, China is returning to the crude market to buy for its SPR and export refineries.”

• India was able to maximise Russian crude oil purchases in the second quarter of 2026, especially after the US issued a sanctions waiver, allowing countries to purchase Russian oil in March … but it might not be possible to do so on a sustained basis as … Russian refiners have also been severely hobbled by the Ukraine strikes….” Diesel supplies face a “double whammy” as Russia bans diesel exports after Ukrainian drone attacks on its refineries….

• Even when Iran declared the Strait of Hormuz closed, oil from the Gulf was “leaking” through alternative routes such as Saudi Arabia’s east-west pipeline…. A significant amount of Gulf oil had been sent to the Red Sea through a Saudi pipeline to the Red Sea port of Yanbu. This week, however, Iran has asked Yemen’s Houthi movement to stand ready to close the Red Sea oil route if the US strikes Iranian power infrastructure.

That has actually already happened today:

Houthi militants in Yemen on Monday declared a maritime embargo against Saudi Arabia effective immediately, threatening to exacerbate the oil supply disruption triggered by Iran’s attacks on tankers in the Strait of Hormuz.

The Houthis have repeatedly threatened to close the Bab el-Mandeb Strait during the U.S.-Iran war. The strait is a choke point for commercial ship traffic that connects the Red Sea to the Gulf of Aden and global markets.

However, that still didn’t stop the complacency in the oil markets:

But crude oil prices were little changed in response to the Houthis’ threat. Brent oil, the international benchmark, had jumped nearly 4% overnight to break $90 per barrel as at least three U.S. service members have died during recent fighting between the U.S. and Iran. Prices subsequently eased after Tehran indicated it was still open to talks with Washington.

Complacency isn’t smart. It’s wishful thinking. It’s denial of reality. The world might not know it is in a supply shock yet, because much of this reality is still working its ways down the pipelines, and it is the nature of shock to initially neutralize pain … though only for a short time.

“We’ve burned through all of the buffers we had. Everything,” said one trader. “All of that’s now gone….

“Now we have close to nothing … and market complacency around Hormuz flows is being severely tested,” Sen warned.

On thing in favor of the flicker of hope, though I’m sure it will not win the day, is that Trump is desperate for a deal:

U.S. precision-munitions stocks are reportedly thinning. Analyst assessments built on published inventory data suggest roughly 56 PRSMs have been built to date, fewer than 2,000 Tomahawks remain in the global stockpile, and perhaps as few as 700 are available to CENTCOM specifically. If accurate, that is not a force sized for an open-ended war of attrition.

Put together, the thesis is blunt: this isn’t the U.S. grinding Iran down. It may be Iran grinding the U.S. down — deliberately extending a campaign it believes it can outlast, using an accuracy advantage Washington didn’t anticipate against a munitions stockpile that isn’t built for a long fight….

Sources indicate Iran’s inner leadership circle is not, in fact, in a hurry for a ceasefire — believed to want additional time to finish current objectives before any deal is struck.

That’s been my claim all along. Iran is playing the long game, making this a war of attrition, by stretching things out with talks without letting any oil through the strait for West so that their oil stocks will run dry and their economies will start to heave.

On the other side of that whisper of hope, we have this:

Donald Trump is considering his options to launch a “wider war” against Tehran as more American warplanes are deployed to the Middle East.

However, a US official familiar with administration discussions said the operation would be limited by dwindling stockpiles of air defence and long-range munitions.

Then, when that is out, what do we do if some nation actually attacks the US? So, will the president get desperate enough to cede full control of the strait to Iran as Iran demands, or will he put boots on the ground to take Kharg Island, as he has been considering?

As the world’s emergency petroleum supplies dangerously dwindle and prices again rise, the Trump administration appears to have lost the upper hand and faces a stark choice: escalate the conflict in a prolonged morass resembling Ukraine, or capitulate and let Iran control the world’s leading energy artery—with the ability to charge service fees for passage and recoup costs, a toll in all but name— energy and geopolitical analysts told Fortune.

That would be a fairly longterm worsening for the entire world that came about because of Trump’s war. Eventually, alternative piped routes will be laid, but that will take time. The one thing I am certain of is that, no matter what Trump decides, the longterm price in oil is in for a hellish ride. If the president announces a new deal, the price will, of course, drop just as was reported above, because the markets seem relentlessly stupid enough to keep believing a ceasefire will avert the oil shock. It won’t. It may stop Trump from making it worse than what it is already set in concrete to be, but experience has taught us any new deal isn’t likely to last long either.

“I don’t think there’s any military option for reopening the Strait of Hormuz,” said Gregory Brew, senior analyst for Iran and energy with the Eurasia Group. “The Iranians have considerable leverage here. I don’t see them backing down and, honestly, time is probably on their side….”

“The options are to escalate or cut a deal. And I think the [Trump] administration is likely to do the first, see it fail, and end up with the second,” Brew said….

“All of the signs point to higher prices and a longer duration,” said oil forecaster Dan Pickering, founder of the Pickering Energy Partners consulting and research firm. “We’re in the fifth month of this. We have fewer strategic reserves. We have less flexibility, less optionality. It’s a more precarious starting point for round two….”

Iran has clearly demonstrated the heightened value of the Strait of Hormuz, and that’s why it’s so insistent on maintaining control at any cost militarily and economically to wait out the U.S, Pickering said. “We’ve seen how expensive it is to shut everything off. The irony is before all this started that value was there for free for all the participants.

“So, are you going to wind up worse off? Yes.”

And the U.S. has very limited options pressing forward, Brew said.“Trump can escalate and potentially widen the conflict to one that causes even more damage and pushes oil prices even higher.” Or he can try to outlast Iran, a middle path that seems unlikely to succeed. Or he cedes the strait to Iran to reopen it.

Because emergency oil stockpiles aren’t depleted—yet—and the price per barrel remains below $100, Brew expects Trump to attempt an escalation that’s now playing out before he feels he’s truly running out of options in a month or two.

“My sense is that things are going to get worse before they get better,” Brew said. The U.S. is intensifying its attacks, and Iran is targeting more energy infrastructure of its Gulf neighbors, including potentially the Saudi’s Red Sea traffic, he added.

Even another peace deal is unlikely to last, he said. “It’s not going to be fully resolved. We’re likely to see continued flareups, continued rounds of skirmishing and hostilities. I don’t expect anything more durable than an interim deal that allows traffic to resume somewhat.”

In the meantime, “We’re going to see more fireworks in the next two or three weeks before we see any kind of progress towards de-escalation or accommodation.”

As for that whispered ceasefire that brought a flutter of misguided hope in the morning …

This morning, Iran rejected a U.S.-backed 10-day Qatari ceasefire proposal, with senior Iranian analyst and close adviser to Iran’s negotiating team Mohammad Marandi dismissing the offer with a blunt message: “Don’t even think about it.”

The proposal reportedly called for a 10-day truce that would reopen two shipping lanes through the Strait of Hormuz. Marandi has previously said Iran has “no plans” to resume negotiations, citing a “fundamental lack of seriousness” from the Trump administration, while Iranian officials have repeatedly said talks will not resume until the threat against Iran has ended.

So the closure of the Strait of Hormuz will not likely be ending soon. That means the flow of oil will not be resuming soon. We (and the rest of the world) are going to go through a very significant shortage - and some outages - of fuel. Prudence dictates that responsible people make plans for that eventuality.

Oops. Hope gone.

Economania (national & global economic collapse plus market news)

Student loan defaults hit record highs now that Covid pause has ended

Real-Estate Rubble (housing, commercial & global real-estate bubble trouble)

Home Prices in 33 Big Expensive Cities in America: 25 Fell Year-over-Year in June, 2 Rose to New Highs

Money Matters (monetary policy, metals, cryptos, currency wars & going cashless)

Gold Stocks’ Autumn Rally ‘26

Inflation Factors (too much money chasing too few goods due to weather, sanctions, tariffs, quarantines, etc.)

Gas prices top $4 a gallon, diesel over $5, again as U.S. as Iran conflict escalates

Stupidity without end: Oil prices reverse lower after report of new Iran cease-fire proposal

Brent Briefly Breaks $90 After Fresh Iran War Escalation

Fuel prices didn’t skyrocket before. Here’s why they could shoot up this time

Wars & Rumors of War (including cyberwar, civil unrest and revolts)

U.S. forces struck Iran’s Darkhovin nuclear plant and Tehran answered with its heaviest retaliation of the war

Hormuz fighting intensifies as US attacks Iran, Iran strikes tankers

US doesn’t have enough missiles to return to all-out war with Iran

Iran’s Houthi allies in Yemen declare maritime embargo against Saudi Arabia

Trump may have to choose between an endless quagmire and ceding the Strait of Hormuz to Iran

We Are Being Warned That Global Oil Inventories Are “Close To Nothing” As We Plunge Into The Most Severe Oil Crisis In History

Bank of America: 43 Days Oil Remaining (That’s not remaining cushion. That’s TOTAL existing inventory across the nation if we didn’t pump or import any.)

Iran Threatens ‘Full-Scale Offensive … No Political Border Will Be Safe’ if U.S. Airstrikes Don’t Stop

Pentagon Has Not Disclosed Dozens of Injuries to U.S. Service Members in Iran War: Report

Iran’s hardliners warn of a ‘coup’

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Germany raises terror threat to ‘high’, warns attacks could happen at any time

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Dramatic vids show Moscow blitzed by biggest attack of war with 400 Ukraine drones sent to rain hell on Putin’s doorstep

Digital Dominance (AI threats, transhumanism, hacks & cyberattacks, etc.)

How data centers became a symbol of Americans’ rage

Political Pandemonium & Social Senescence (socio-political issues & events)

GOP midterm strategy: Make it a “hate election”

What’s wrong with Congress?

“I’m Not Living In Communist America”: Bill Maher Blasts Marxist DSA Democrats, Says He May Vote For JD Vance

Shrinking student populations cause spike in public school closures across US

Recess Is Disappearing. Parents Are Pushing to Bring It Back.

A Pox Upon Us (the plagues, pandemics & health police of the 2020s)

The Lockdown Disaster Must Not Be Forgiven

Calamity, Catastrophe & Climate Craziness

Europe weather maps show POSSIBLE 50C heatwave as tourists in Spain face hottest day ever recorded in Europe (if it happens)

Off-the-Beat News & Just Plain Offbeat News

Doomer Humor

Refer a friend

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The president front loaded more lies into his speech than I thought any politician could tell in a single speech, but I want to start with one statement that was true temporarily because it is critical for you to understand it is a deceptive fact of the moment which the headline evidence would appear to support as true. It is a will-o’-the-wisp that will quickly vanish. That was Trump’s claim that inflation is falling faster than anytime since the end of Covid. While that was true for the last month reported, it is also the basis for my digging deeper because, if the president actually proves right, I’ll need to hang up my accountant’s visor and stop writing on economics.

Trump was right that CPI inflation took a 0.4% drop in a single month, and that is a lot. Both the mainstream press and some in the alternative press said it indicated inflation has turned around. Of course, I’ll point out the obvious right up front, which is that a big part of that drop was due to energy prices plunging during the recent MoU shmeasefire. Since I said they would plunge before they did, that doesn’t trouble me, especially since they have now rebounded, as I also said they would (told in advance so that you would be able to know you can trust me on the rest of the story) because the schmeasefire got blown to bits, which means that contribution to disinflation will reverse in the next monthly report; but let’s dig into that.

The Consumer Price Index for gasoline prices plunged in June from the spike in the prior months, roughly as expected as prices at the pump started dropping in May.

But June was also one of those rare months when the month-to-month squiggles – represented by the blue lines in the charts below – in many major categories either were negative or nearly unchanged at the same time, reflected in the “core” CPI, which excludes energy and food, and thereby excludes the plunge in gasoline prices.

Core CPI (excludes energy and food) fell by 0.02% in June from May, or annualized -0.20% (blue line in the chart), according to data from the Bureau of Labor Statistics today. The last time it fell month-to-month was in 2020, before it bounced back violently. [Still, 0.2% annualized is only a tiny bit.]

As the blue line in the chart shows, big outlier month-to-month moves like this are followed in a month or two by big moves in the opposite direction. That’s how the month-to-month squiggles work. (Wolf Street)

So, we got some true generalized reduction in CPI inflation, but it was a move that tends to swing to the opposite direction the next month, like this:

The all-items CPI (which includes energy and food) dropped by 0.42% in June from May (-5.0% annualized, blue line), hammered down by the month-to-month plunge in energy prices.

This month-to-month drop of the all-items CPI caused the year-over-year reading to decelerate to a still very high +3.53% (red in the chart).

Here it is important to note that, while any drop in the inflation rate is good news, disinflation is not the same thing as deflation. It means your prices are still inflating—in this case way above the Fed’s 2% target—just not as quickly. It never means prices are falling. They are still rising way too quickly based on the Fed’s target. It’s just they the are not as way-too-quickly as they were the month before.

As you can see, overall inflation got a helpful downturn, but it is still way hotter than the Fed wants it, and way hotter than you want it:

That continued heat makes it a weak bragging point at best, unless the new direction of travel becomes a new trend. So, that’s what we need to look at next. Is it the start, at last, of a downturn in the heat of inflation, which would be the exact opposite of what I have been predicting for months? So, shame on me if that is what it proves to be.

I shall sleep comfortably on this one at nights, not because I like to see inflation, but because I won’t have to eat crow.

While the disinflation was broad-based, albeit with many things still inflating faster than they should be, the bulk of the action was in energy, and that part will certainly reverse now that the war has gone full hot and Iran has called off all negotiations with Trump: Notice how hugely bigger the energy numbers were than the overall numbers:

The CPI for energy plunged by 5.7% in June from May (-50.6% annualized), driven by the plunge in the CPI for gasoline and the drop in the CPI for electricity.

But year-over-year, the energy CPI was still up by 45%. The CPI for energy weighs 7.8% in the all-items CPI.

The CPI for gasoline plunged by 9.7% month-to-month, seasonally adjusted.

But year-over-year, it was still up by 26.7%. And since January 2020, it was up by 41%.

That plunge looks like this, but because fuel rises instantly when crude rises but falls more slowly than crude falls, those fuel prices looked like this:

You can see fuel prices are still way elevated over where they were before the war. If we had reason to hope they would repeat that decline, that would be great; but we have reason to believe the opposite. Now that crude is way back up, we can expect fuel prices to leap back up, not down further. More importantly, we have not even begun to see any spike in fuel prices due to shortages at the pump, though the timing for that is likely close now.

We know that if Trump’s own estimate when he explained why he had to do the MoU is accurate, then the SPR should be running effectively dry from anything that it can contribute right about now. With Cushing also effectively dry, shortages at gas stations are likely to start showing up before long. Trump, after all, said that if he didn’t do the MoU, the price of crude oil would cause “bedlam” for the entire global economy.

With that, I want to segue from the charts and data for a moment to make a clear argument about what Trump did or did not gain from the MoU/ceasefire and more importantly from the Trump-Israel-Iran War.

A reader lit my hair on fire this morning by presenting the most atrocious and desperate and utterly self-deceived article on Trump’s war I have ever read, justifying it as a huge victory, which I could never imagine. I won’t mention the author’s name because I’m going to rip him to shreds, and I don’t want it to be personal. The article was so blatantly self-deceptive that the writer had to start out by asking his readers to ignore everything in the headlines about the war objectives and focus, instead, on the war tactics—the mechanics of the war, whereby Trump is really shining in a game of 4D chess.

By saying we should ignore the mainstream press’s obsession with the objectives and focus on the tactical accomplishments, the author managed to spin a tale that turned the war into an business allegory of huge successes. My counter argument ran like this because who cares about the fantasy brilliance of the tactics if they are accomplishing no objectives at all:

I said the article made me feel sick to my stomach because it forced me to see how deep the delusional thinking of Trump Derangement Syndrome can run, which causes people to praise their assailant and justify his attacks on their lives. It’s kind of like Stockholm Syndrome. It should have been so easy for anyone, including the author, to assess how far off from reality the article was and, therefore, deranged.

Simply put, when you have to go to such creative lengths to create a fictional fantasy about the tactics of the war that avoids looking for any factual accomplished objectives and, instead, you spin the mechanics of the deal into some kind of clever business allegory, the really sad part is that there are people who will go to such extremes to keep justifying the guy who is swindling them just because their own ego cannot accept the obvious deep losses coming out of the swindle, and so the swindle gets to keep running. It really was unsettling to see derangement go that deep.

Simply put, if you want to assess the success of Trump’s war, you don’t do it by creating fantasies about the mechanics of what he is doing, such as how he is brilliantly bringing the Kurds in as allies. Who cares that the Kurds have joined the battle if we are losing the entire war every single day? The writer should have assessed the successes of Trump’s war just like he would assess the successes of the business world he was using as an allegory. You never asses the success of a business based on its clever shenanigans. That kind of accounting usually creates trouble for a business. You assess it far more easily than that. You simply look at what kind of actual profits it is showing or, in the very least, what profits (the objective of business) it is likely to show. By that measure, Trump’s latest war is total bankruptcy.

There has been zero profit of any kind from this war for the US, and there is no hope of future profits, as I went on to explain, by which I don’t just mean financial profit, but any kind of gain that puts America first.

One cannot name a SINGLE objective that Trump’s Iran War 2.0 has accomplished, unless one wants to call a lot of death and destruction on all sides an objective. However, calling the creation of destruction and chaos an objective is like calling bankruptcy an accomplishment of business.

First, look just at the MoU. It accomplished absolutely NOTHING for Trump or the USA or the West. However, it accomplished a LOT for Iran. Iran got huge monetary awards in released sanction money right off the top. Trump front-ran the monetary enticements to get Iran to sign on to the MoU. Iran also made huge profits off of all of its oil that it shipped through the strait right away when the US dropped its blockade while Iran maintained its blockade, and Iran got some instant sanctions relief. (Other sanctions relief was performance base, so that never happened.)

More importantly than all the financial gains for Iran with none for the US, the MoU bought Iran time that was relatively relieved from American bombing, and time is what you must have by definition to win a war of attrition. Iran knows in this hugely asymmetric war that the one weapon it has on its side is control of the strait and the damage that can do over time to the USA and to the entire West. It is counting on the effectiveness of that damage, and Trump winced so intensely when he admitted publicly he had to sign the MoU in order to avoid economic bedlam. He admitted he was strong-armed by Iran’s effective strait closure. But the only thing the MoU delivered was more time for the bedlam to develop. It actually made the situation worse for the US in every respect:

The strait remained entirely closed to oil traffic that would benefit either the US or anyone else in the West while on Iran’s side Iran’s own tankers shipped night and day, free of US attacks, delivering oil ONLY to Iran’s preferred customers. So, the MoU bought Iran and its allies reprieve and a chance to do some small restocking of oil, while delivering NONE of that to the US or its former Western allies.

The US didn’t a get one drop of oil through the strait that went to Cushing or the SPR or even strait to US refineries. Instead, the US continued to drain the salt caverns of the SPR at the same rate Trump was so concerned about when he signed the MoU, and it continued to drain US tank farms. By now we should have hit that point the president said would be coming in a month , since the MoU did not deliver any oil to the US. That would be the point where the SPR can no longer be used for commercial oil production because the remainder is legally designated for defense use only.

Cushing is effectively dry. The SPR is likely effectively dry by now. The MoU bought Iran some time relatively free of bombing to wait out its siege on the West. It delivered exactly what attrition demands—time to work. Iran has the whole world by the neck, which looks like a goose neck getting wrung through the Strait of Hormuz. The MoU allowed Iran to run out some time on the clock while restocking its weaponry and pocketing some big oil money during the time out.

Now, look at what the accomplishments are for Trump from the entire war effort:

• The Strait of Hormuz remains as locked up and blockaded by both sides now as it was during the worst part of the initial oil crisis.

• Oil has not moved and is still not moving for the US, so prices of oil are back up to nearly to where they were during the heat of the war.

• The heat of the war is nearly back up to where it was during the heat of the war.

• The US has exhausted a fortune in weaponry that you and I are going to be paying to replenish for years to come.

• Yes, the MIC has been made much richer if that is something anyone wants to list as one of Trump’s accomplishments.

• The US has lost dozens of American lives and seen hundreds more wounded in order to create that wealth for the billionaire industrialists who finance or build for war.

• The US has lost military bases that are now mostly nonfunctional all over the Middle East. It has said it may not even rebuild some of them because the cost is too great.

• The US has lost allies all over the world who now HATE us for bringing this economic ruin upon their nations, which is now a baked-in certainty, and they know it, even if some here are still denying it like the writer I’m talking about.

• The US has severely strained its alliances in the Middle East, and may have lost some of those relationships by fighting a war that benefits Israel but does not benefit any of them one iota.

• Iran’s regime is still fully in place.

• Iran’s regime actually appears to have been empowered by the Iranian populace that is clearly enraged at the US over the destruction it has brought to their towns and cities and ports and the huge suffering in their daily lives and loss of civilian lives.

• Iran has actually gone back to enriching uranium.

• And the US did not get any of Iran’s enriched uranium stock away from Iran. Iran still retains every speck of uranium dust that it had before the Iran War 2.0 began. It got no further than where it was last summer when Natanz and other uranium-enrichment sites were bombed.

• Iran now promises that it is going to go for a nuclear bomb, something it always denied it wanted until now. Maybe it was going for the bomb anyway, but now they are brazenly making sure we know they are going for the bomb.

• The Iran “board of directors,” as the writer of the fantasy framed the snakes who operate that sick core regime, has stopped negotiating with Trump.

• Worse still, the Iran parliament has now made it it illegal to negotiate with the Trump administration.

So, the MoU has been completely shredded by both sides, and all the accomplishments were to Iran’s benefit. The US got nothing at all out of the MoU or out of the overall war. Yet, the writer tries to spin that as a huge and brilliant accomplishment by Trump because it proves Trump knows the art of the deal. The writer admits you need to take your eyes off the prize and focus, instead, on the mechanics of what Trump is doing in order to see the gains; but those mechanics are clearly just spinning his wheels in the dessert sand because they have not moved the vehicle ahead one inch on its objectives.

Rather the US has dug down even deeper with less oil in US storage facilities, a return to high oil prices, much higher national debt with rising interest rates as Trump has funded all of this with deficit spending. So, the writer can go on and on with spinning his allegory about Trump’s business acumen, but I’ll stick with evaluation of objectives that were actually accomplished by the war, and by that measure this is total bankruptcy and you can find a much better story that Bill Bonner created today to explain Trump:

Bonner Private Research

A Pure Bar Room Brawl

Friday, July 17th, 2026…

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14 days ago · 72 likes · 55 comments · Bill Bonner

To me, it was sickening to see the extent to which some Trump supporters will still go to try to rationalize Trump’s latest war into some kind of success just to avoid damage to their own egos for having supported him in the past. It’s the same 44DDD garbage we had to stomach throughout Trump 1.0 by QAnon, etc, with no one ever admitting all of that proved wrong when the swamp overran Trump and as he failed on most of his campaign pledges—Obamacare, finishing the wall, making Mexico pay for it, reducing immigration, making America great again. While there has been NO success in terms of war objectives/benefits from this war for the US, the inflation you are going to pay over longterm energy prices now that the war rages on makes Trump’s claim last night that one of his great accomplishments was the huge reduction of inflation, laughable if the truth were not so painful.

Shortly, I’ll go back to the utter bankrupt failure of this war to deliver anything that has been in AMERICA’s best interest, which was a Trump MAGA PROMISE, to laying out the reasons you can still be sure inflation is raring onward; but, first, I want to get the president’s lies last night out of the way:

The lies the president told

I’ll briefly recap all the lies in the introduction to Trump’s speech since it is hardly fair to claim it was entirely lies without giving evidence for that claim: (The president’s statements from the video below are in boldface in the summary and my response.)

• Our country is safer, stronger and wealthier than we have ever been before. How are we safer when our people are dying and being wounded in a war that has gained NOTHING for the US and when countries all over the world increasingly hate us for bringing economic calamity down upon them? What is the actual measure of “safer.” Wealthier only if you were in the Trump family or are one of his billionaire buddies. The inflation we have already experienced under Trump, as I will graph out carefully below, has already made most of us less wealthy.

• After we inherited the worst inflation in years and wide open borders with millions and millions of people pouring in from all over the world, including criminals of all types. I addressed this yesterday in “THE LIAR-in-CHIEF.” Border arrests of criminals of all types have been WAY less than they were under Biden. Deportations in 2025 were lower under Trump than in Biden’s last year. Inflation has been hotter than it was at the end of Biden’s term in every single month of this year and most of most of 2025, except the last month reported. See all the graphs above for clear proof.

• The whole world was laughing at us as a nation, but not any more. Better laughing than all shaking their fists at us as they are now for the bedlam Trump is bringing their way.

• Now we are the hottest country anywhere in the world. America is respected like we have never been respected before. Actually, Europe and Canada have turned away from the US as a dependable ally but also as a trading partner. More to the point, I read an article this past week that said China is now more loved by most of the world than the US: “People in Many Countries Now View China More Positively Than the U.S.” More also have confidence in Xi than Trump, according to a survey in three dozen countries, the article claims That’s pretty bad when oppressive, communist China supplants you for world respect and a Chinese dictator supplants your own president who rules by decree.

• More Americans are working today than ever before. Total baldfaced lie on that one. I blew that to bits in my Deeper Dive at the start of this week: “Employment Data and Decline in Labor Force Shows the US Is in a Stealth Recession.” (Of course, you have to be a paying subscriber to see the hyuge details about how bad t he labor market really is with the data to back it all up; but I’m confident those who could see it will back me up.)

• This week it was announced that inflation saw the largest monthly decline in more than six years. True, but see all the caveats in this article below about why that won’t hold and about how it does not come close to offsetting the other five months of this year.

• No tax on Social Security. It was a lie when he promised it, but is a proven lie now that congress delivered something very far short of that. Instead, there was a partial write-off for Social Security income. Likewise with his blatant emphasized claim of NO tax on tips. There was an exemption for the first 25,000 on tips. That’s not nothing, but it is not “NO tax on tips.” (See: “Everything you need to know about “no tax on tips”)

• Our stock markets are at their highest point in many years, but we can actually say of all time. Blatant lie. The Dow has fallen a little for about a month now. The S&P has fallen a little more for about two months, but the real damage is in the NASDAQ which has put in a clear and dangerous triple top because that is where the bulk of the AI bust is showing up:

• Your 401(k) and retirement accounts are setting records EVERY SINGLE DAY. Not anymore. See above.

• Now we pay the lowest prices in drugs. (Maybe. I haven’t researched that one, so will leave it alone.)

• The cost of health care is coming way down because of what we have done with prescription drugs. CPI showed a small decrease in the rate of inflation for health care; but PCE shows a hyuge increase that was the second-largest category in the report.

• Unfortunately, we are forced to use the most powerful military in the world now. No one is forcing us. Trump already claimed he “completely decimated” and “totally obliterated” Iran’s nuclear capability last summer. He doesn’t get to claim the same victory twice or that he was forced to go back and do a job he already claimed he completely accomplished to such an extent that he deserved the Nobel Peace Prize for accomplishing what no president prior to him had the courage to do. It is an absurd set of self-contradictions.

• We won in Venezuela and are working with them to produce millions and millions of barrels of oil. Apparently true.

• We are likewise winning big in Iran. We’ve won ABSOLUTELY NOTHING in Iran; hence all the arguments above.

From there Trump went on to his long tirade about elections being corrupt, which would have to include his own since he stated repeatedly that the problem started in 2020 and hasn’t been resolved since then. Kind of a self-defeating argument. I think we can anticipate years of election turmoil if he loses. The problem will instantly go away and never be dealt with, however, as happened under Trump 1.0, if the Republicans win enough to keep both houses of congress, though that seems unlikely. So, Trump is preparing the way as he has done with every election he’s run in to say the election was rigged, but only if he loses. He did that in 2016, but then said almost nothing and did absolutely nothing to correct the “rigging” after he won and was inaugurated.

If this is the problem Trump has always claimed it is, he should have fixed it then when he won a sweep of the Executive branch and both houses of congress during 1.0. He’s doing a lot to undermine Americans’ confidence in their own democratic government, yet did absolutely nothing during Trump 1.0 nor during his first year and half in office under 2.0 to fix the problem he keeps harping about. He’s always just laying the ground for discrediting his opponents’ victory and to claim he was never actually a loser because he hates losers.

Sad, sad little narcissist.

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Why inflation will return with a vengeance in just one month

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The following is a little Friday freebie as I move on to writing my Deeper Dive, and hopefully you’re going to help finish the writing with your own ideas:

A paying subscriber asked me to write an article, if I could, about things you can do to prepare for the worst that is coming. Right after she asked, I came across a list of a couple of easy and totally practical suggestions by Hal Turner that will work for a few, so let me, at least, share that short list:

If your home uses home heating oil for the Winter, call your local heating oil supplier and tell them you want your oil tank at home FILLED, right now. As soon as they can get a truck to your house.

If your home uses BOTTLED NATURAL GAS or BOTTLED PROPANE GAS, call your gas supplier and tell them you want your tanks filled - right away.

It’s Summer now, but Summer is ticking away. When the weather starts to get cold, you don’t want to be among the people that have no heating oil or gas to heat your house. Or no gas to cook with. Get the furnace oil tank or the propane tanks refilled NOW. ASAP.

Planning and taking action NOW is important because right now, the general public has absolutely no idea at all what seems to be coming. The news media . . . . useless. They “report” only what their government masters tell them to report. By the time the news media starts covering this, the shortages and outages will already be here. They’ll only cover it because they can’t ignore it anymore.

Once this starts hitting the news, the “masses who are asses” will all be calling to get heating oil, to get propane, trying to get gasoline cans for storage. And it will be too late.

Please pass this article along to family and friends that you care about. We’ve got to get the word out now, while there’s still a short window of time for people to get prepped.

Those are things you might as well do if you have that kind of storage because prices are most likely going to rise considerably, even if shortages don’t hit you. You might even see, if you go through more than one tank in a winter, if you can pre-order a second shipment for future delivery and pay now at today’s prices to lock those prices in. This, of course, is if you have the cash flow or savings to handle it. I wouldn’t do it with debt.

For most people, there is not a lot you can do. Let me use myself as an example: Turner has told his readers to also stock up on gasoline. If my wife and I still had our farm, I would be buying some blue barrels of gasoline and diesel and treating them with fuel preservative to get me through the winter because I could store those safely outside and away from buildings. I already had a hand pump for the barrels because I bought my tractor fuel that way.

Now we live in a residential neighborhood with a normal-sized city lot. I don’t want to have that much fuel sitting that close to the house, especially not in my garage. If I bought a barrel of gasoline to store in the garage, my Jeep Grand Cherokee would literally go through all of that in two tankfuls. It gets pretty good fuel mileage at 25 miles per gallon (for the kind of go-anywhere vehicle that it is), but it takes 25 gallons to fill the tank. One barrel would be a short-term supply for any short fuel shortage, but I don’t want the risk of a barrel of volatile gasoline in my garage for the sake of just two refills. So, I will just have to tough out the shortages because it’s not worth the risk to me. I don’t even keep the lawnmower gasoline in the garage. At the farm, I also had a propane tank, so I’d be filling that up, as Turner suggests.

The one thing I have long recommended, I’ll repeat for those who are new: When you go shopping, do as my wife did today when she went to Costco. Buy extra amounts of everything you usually buy that has a long shelf life. Put your normal operational supply in the kitchen or wherever you usually put the weekly groceries. Put the rest in storage and keep your hands off of it when you run out in the kitchen, or if you use something to avoid a trip to the store until tomorrow, make sure you replace that and add one more when you go to the store tomorrow.

Each time you go to the store when your operational supply runs out, repeat the above until you have as much stored as you can go through during each item’s written shelf life. Then start rotating through that supply before the shelf lives expire. The nice thing about this approach is you don’t even have to think about what you need. You know you are only buying the things you ran out of in the kitchen, which is all stuff you usually use. So, you’re just automatically picking up an extra amount of that within the limit of what your cash flow and your vehicle can handle. It’s almost automatic, other than the extra lifting, and you have nothing that you don’t like to eat. Worst case scenario if shortages don’t materialize, you saved yourself on inflation because that is certainly coming.

Sorry that’s not much, but let me encourage all my readers to reply with their ideas because that is maybe the best thing I can recommend—build communities that can help each other. So, here is chance right here to turn this into a community of like-minded people for sharing your best and easiest ideas (the really practical ones that people can do without a lot of extra labor) to get ready for the possible shortages and inflation to come:

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Hopefully, if you check back here from time to time, you’ll find a growing exchange of ideas that you can share with others and benefit from yourself, and hopefully those you share with will add their own ideas here. Maybe, at some point, I’ll pull together the best of the best as an article:

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The news today has more headlines about Trump’s corruption and his lies than about the Trump-Israel-Iran War that is getting hotter every day. One of his latest lies is an often repeated lie about that war, which is partly what incited this article because he just keeps saying it, and it is so clearly a lie.

After writing the article below, which doesn’t even cover most of the lies and corruption exposed in today’s headline articles, I listened to the president’s speech, and almost every single opening statement was a total lie—several of them, lies that I had just written about in the article that follows. Most of them, lies that have been proven to be lies many times over.

Maybe I’ll go into specifically fact-checking each and every one of those opening statements in my weekend Deeper Dive. It was a broad swath of lies. For now, I’ll stay with the intentionally brief list I put together prior to the speech exactly as I wrote it with no edits other than my proofreading corrections:

The Liar-in-Chief

Trump keeps repeating the same tired and utterly failed lie that Iran badly wants to make a deal. He's said it again a few times since the latest schmeasefire fell all apart. Here, in the news today, is how badly Iran wants to make a deal: Iran Parliament Votes to HALT ALL Negotiations with USA. So much for that baloney, and, yet, 39% of America still believes in Trump. Why would you keep believing in someone who lies to you endlessly? Trump has now repeated this lie through FORTY failed ceasefires! What does it take for that 39% to wake up and realize that TRUMP LIES ALL THE TIME!

Take a quick glance at the record on some other lies:

• Tariffs will bring jobs back to America. (Jobs, when you dig beneath the surface, are looking terrible as frequently reported here. Even the surface isn’t looking good. It’s just mediocre.)

• Tarriffs are being paid by foreign corporations. (Several reports have come out saying that only about 6% of the total amount collected in tariffs was offset by price adjustments from the foreign corporations. American importers paid the entire remaining 94%!)

• Tariffs do not cause inflation. (The tariff inflation took two months longer than the lagged schedule I laid out for when you’d actually start to see it pricing through to products on the shelves, but it started coming in clearly in January and February before the war began, and big businesses told everyone they would start passing along the tariffs at the start of this year. Then the Supreme Court cancelled most of the tariffs, and Trump replaced some of them with smaller tariffs under a different law, so the inflation from tariffs will not be as bad as it was certainly going to be, had the Supreme Court not ruled his tariffs unconstitutional, but some tariff inflation is still happening as reported in Deeper Dives here.)

• Trump will be the peace president and keep us out of needless wars. (He got us into more wars in his first year of his second term than any other president has in an entire term, and the latest war started off as being 50% about regime change. When regime change failed, he actually lied and said he never said he was interested in regime change even though it is not hard to prove he did! He doesn’t even care that he lies about things he said that can easily be proven with videos.)

• The price of oil will go back down as low or lower than before the war. (He didn’t tell you it would go right back up again, but I did, and it did! It never went back down to as low as it was right before the war, though it got close for several days.)

• We won the war in Iran. (Still fighting it. Still looks like a quagmire that Trump cannot find his way out of, just like I said from the start it would be.)

• The US controls the Strait. (Really? Then why is no oil shipping through?)

• We completely destroyed Iran’s navy and Air Force. (Then how do they keep hitting us in various locations all over the gulf with drones, missiles and little boats?)

• The US will experience a “Golden Era.” (Really? We’re one-and-half years into his second term. Where is the golden era?)

• The Trump administration will release all the Epstein Files with minimal redactions, and the redactions that you do see will only protect the names of the victims. (Really, then where are the rest of the files, and why were a couple members of congress able to prove that the only people protected under several redactions that the members removed were the perps??? And why were multiple names of victims released at the same time?)

• Trump is only named seven times in the Epstain Files and not in any incriminating way. (Many of the redactions covered Trump’s name, including a filed claim that he raped an underage gal, who bit his you-know-what over the sexual slavery he was forcing upon her. Whether the allegation was true or not, the White House claim that he was not mentioned in any incriminating ways was an absolute lie. Since then we’ve heard claims by some who should know that he is named more than 20,000 times in the files.)

• A video proves Epstein was not killed in his cell. (I demonstrated thoroughly that the video did not even cover the several routes in and out of Epstein's cell that were available. Later reports corroborated completely my assessment of what the video was leaving out.)

• DOGE is cutting government and will save us money. (None of the DOGE cuts resulted in scaling down the US deficit, and many of the people fired had to be rehired because they proved to be necessary. DOGE didn’t make a dent in the deficit because the president added government war spending faster than DOGE, even with all its incredibly ham-fisted firings, could reduce spending.)

• We’ll arrest the criminal aliens that Biden keeps letting get away. (Here we have the one area where it almost looks like Trump is succeeding, given the huge increase in violent ICE actions, but just take a look at the results that in terms of those criminal aliens. The number of CRIMINAL aliens actually arrested—the ones Trump especially said he would be going after—has not even reached half of Biden’s levels:)

Biden must have caught and arrested most of those immigrant criminals after all, because this is Trump’s own data, and his administration appears to be having a hard time finding the ones who are criminals that got away, even though Team Trump managed to slam a number of pumpkin-picking mamas into Alligator Alcatraz, stripped of their children (who were stripped of their moms). On that particular immigration issue of catching the ones with criminal records, at least, Team Trump hasn’t done such a hot job.

OK, but what about the non-criminal aliens—the hard-working farm hands Trump has been deporting along with all those illegal bottle washers and sheet changers? Those numbers must surely be WAY up. You know, the ones he is actually SENDING BACK TO THEIR OWN COUNTRIES!

Meh! Trump’s first year, a little less than Biden’s final year. Not a high bar.

OK. Let’s stop with this short list and go back to my original question. We won’t even go into any of the many promises Trump failed to keep in his first term nor any of the many daily little lies he uses to feed his narcissism and justify his monuments to how great he is, which includes the lies about the scale of his accomplishments or sizes of his audiences. We won’t detail the multitude of corrupt-looking, Bidenesque deals during Trump’s 1.5 years of selling the presidency that have trumped all of Biden’s year by more than 100-to-1. This article just lists some of the BIG lies during the present term that really matter. However, the headlines that follow go into great detail about a lot of those things.

Even Trump’s “Freedom Fuel” from chosen gas-stations promoted by Trump that promised to deliver gasoline at $3.47 a gallon in honor of president #47 has proven to be a false promise already. With the war fully back on and Iran having voted not to negotiate at all, the prices couldn’t be maintained and have risen above that level, as was reported in today’s news.

Why do so many choose to believe someone who lies to them all the time?

What’s wrong with the 39% who keep believing this pathological liar? I personally think Trump has lied more often and in more blatantly obvious ways than any president who ever lived because the above list is just my own short list! The very short, off the top of my head, short list.

I bring this subject up, partly because of the poll I read earlier in the week about his popularity still in the upper 30s. I bring it partly up because Trump went right back to the lie about Iran desperately wanting to make a deal, which has been disproven more times than I can keep track, but, at least through 40 failed ceasefires, when each time Iran said it didn’t care much about making a deal with a serial liar. I bring it up especially because I overheard an old man at lunch today in my very, very Red farm town, saying, “They just HATE TRUMP. They HATE him, but they can never tell you why!” Really? I guess he doesn’t operate with his hearing aid most of the time because I’m certain they would have no problem coming up with their own list of betrayals and lies that explain why they hate Trump so much.

[I also brought it up because I knew he was about to give a big public speech tonight, and I was certain it would be filled with many lies, but it turned out worse than I thought.]

How about just one promise then—MAKING AMERICA GREAT AGAIN!

IS IT??? IS AMERICA GREAT AGAIN?

Thank you to all who have subscribed to The Daily Doom, bringing this site up to #40 among all news sites on Substack. While #40 at a single location like Substack is not a high bar, we are, at least, climbing up the charts together. I think two weeks ago it was something like #60. And, hey, The Economist’s Substack site is only #36, so maybe we can tag them next week with your help.

However, I promise I won’t ever chase the popularity contest at the cost of telling you the truth straight up ALL THE TIME, no matter how unpopular the actual truth may be. I have to think there is eventually an audience that just wants the truth—whether it finds the truth likable or not—and that maybe I can slowly find that audience. At least, things are moving in a more positive direction.

(The headlines that follow for paying subscribers go into great detail about Trump’s crooked deals, the shear volume at which he has sold the presidency or profiteered off of his own decisions with the timing of the announcements and his own heavy stock buys, and about his many, many lies:)

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More Wall Street experts have crossed to my side of the street and are speaking a truth that once could not be told. For a long time, nearly everyone said the very thing that is suddenly being widely predicted was impossible. It felt kind of lonely in the truth market a year ago, but now it’s getting crowded.

Today, two of the biggest of mainstream financial publications, The Wall Street Journal and CNBC, have started openly worrying that the AI bull could die and kill everything around it on its way out. They are even saying the AI bubble bust will likely start with one of the biggest of all high tech companies, Oracle, particularly because of its close association with one of the biggest of all AI companies:

A terrifying warning has sent shockwaves through Wall Street as financial experts warn that a stock market crash is looming on the horizon.

At the eye of the hurricane is tech giant Oracle, which veteran financial analyst David Desjardins fears will be the ‘first domino to fall’ in a brutal tech market collapse.

Oracle has now been downgraded to one mere step above junk-bond status, yet it is desperately hungry for more money to finance its continue AI rampage.

Oracle has effectively bet the farm on the AI revolution, building colossal data centers to power the technology, but experts warn this high-stakes gamble could backfire spectacularly.

‘OpenAI is entirely dependent on capital markets remaining wide open to meet its financial obligations,’ wrote Desjardins, who warned that if the company had trouble raising money, ‘Oracle would be in the eye of the storm.’

The collapse would not just destroy Oracle, it could take down the rest of the AI market and touch off a massive stock market meltdown.

A spectacular fall of the stock market’s kingpins is exactly what I’ve been saying you are going to see—a collapse so great it will pull nearly everything else down in its undertow like a sinking ship pulling down surrounding swimmers who are trying to flee the shipwreck.

The company has borrowed mountains of cash to fund the highly complex, energy-hungry data factories needed to fuel the artificial intelligence boom.

According to Desjardins, the credit ratings downgrade by S&P, which left Oracle at the lowest level of investment grade, just one stop before junk, could light the fuse that blows up the company.

When it is finally seen that Oracle can sink like a stone, delusional investors should finally flee like rats leaving the sinking ship as they suddenly realize that, if Oracle can implode, anything AI can implode. As I pointed out yesterday when I was flagging Oracle’s huge stock plunge and the fact that a large part of AI reported “earnings” are built largely on stock speculation inside of companies like Oracle, those internal, incestuous investments in their own customers are not only extremely leveraged, therefore fragile, the AI companies are also extremely dependent on energy at a time when the energy market has returned to soaring inflation.

The companies that have expanded way too rapidly in lunatic zeal are hollow on the inside, as often happens in this kind of manic company expansion. Their earnings off of AI are way too small to justify their investment, and they are hollow because most of their reported earnings are created by using margin debt in some cases to buy stocks in other AI companies. The whole thing reeks of being an incestuous circle, and now even major Wall Street experts are starting to wake up and forecast what many said could never happen: The behemoth bubble is getting ready to burst.

When a public company’s credit rating is downgraded to junk, its borrowing costs spike and its stock price typically drops. That’s because institutional investors don’t invest in junk bonds, which drastically reduces the company’s access to funding.

They are starving for cash to complete their buildouts, and lenders are pulling back, as are stock investors. They are energy starved, and local communities are mounting huge and successful campaigns against them because of how they drive up local energy rates and noise pollution, etc. Another successful protest hit the news today right in Trump’s Mar-a-Lago back yard, even as the president criticized New York for putting a legal moratorium on all data center construction, telling them they had better leave his billionaire buddies alone.

Desjardins warns that Oracle is balancing on a financial tightrope: If the company’s financial health slips even slightly further, it would become incredibly expensive for the company to borrow more money.

Oracle is another classic example of a company expanding far too quickly and developing a hollow core so that it can nova like a dying star and collapse into itself.

Building data centers requires an astonishing level of investment that is currently draining Oracle’s finances at an unprecedented speed.

To put the scale of the spending into perspective, Oracle spent a massive $55.7 billion on its data center base in fiscal year 2026, with spending expected to jump by around 70 percent to a staggering $90 billion in fiscal year 2027.

Yet, not long ago, you could hardly convince people of how foolish this euphoria was. When you reminded them that this was shaping up exactly like the dot-com bust, they insisted it was different this time because these are the leaders of the new business world, oblivious to the incredibly obvious fact that saying that is equivalent to actually saying, “This time is different because it IS EXACTLY THE SAME!” It was that exact core delusion that blinded the majority last time.

This delusional mess has become the perfect setup for reaching critical mass where one company’s collapse assures the next company’s cascade into collapse:

But for Desjardins, the biggest risk for Oracle isn’t just its own massive debt load, it’s the fact that the company has hitched its wagon almost entirely to a single, high-stakes customer.

That customer is OpenAI, the parent of the ChatGPT and the controversial leader of the AI revolution.

SEC filings show that Oracle has a staggering $638 billion in future contract volume on its books - and approximately half of that amount is from OpenAI alone….

OpenAI is trying to secure its future by actively planning a highly anticipated initial public offering on the stock market, helping it raise the massive mountains of capital it needs to stay afloat and keep paying Oracle, among others.

All it will take for everything to crash in a huge spectacle is for OpenAI’s IPO to fail.

If OpenAI fails to secure this funding … Oracle and its massive debt will be left completely exposed.

Desjardins warned that if OpenAI were unable to meet its payment obligations, Oracle would be left with long-term data center rental agreements that ‘could neither be easily terminated nor transferred to other customers on comparable terms.’

At the end of the day, Oracle’s wild spending is what keeps the entire semiconductor industry alive, as its cash flows directly into the pockets of chipmakers.

The capital expenditures of hyperscalers like Oracle are ultimately recorded as revenues by semiconductor manufacturers like Nvidia, Sandisk or Micron.

If Oracle crashes, it will drag down the chip giants with it, turning the AI boom into a historic bust.

But now Wall Street is getting it—so much so that even CNBCs normally rabid Jim Cramer jumped on the antagonist bandwagon and said stocks are dangerously close to crashing into the the hollow core of the AI bubble, and it is precisely the risk of an IPO failure tipping everything over that has Cramer worried:

CNBC’s Jim Cramer said Wednesday that while Wall Street was focused on re-escalating tensions between the U.S. and Iran, he is more concerned about a flood of new stock and bond issuance that could threaten the bull market.

“At least when it comes to the stock market, I’m a lot more worried about supply — specifically, the flood of new equity and bonds that have inundated this market, sopping up a lot of sidelined capital,” the “Mad Money” host said.

Companies have issued staggering amounts of equity and debt in the last month, Cramer noted, including Alphabet’s big stock sale, SpaceX’s $85 billion initial public offering and $25 billion bond sale, as well as large debt offerings from companies including Amazon.

While the market has absorbed that supply so far, Cramer warned demand may be approaching its limits.

With the market nearing its available cash constraints, and debt of some companies like Oracle being seriously downgraded, protests building successfully against AI data centers, the illusion of earnings starting to get exposed, energy prices again soaring for these energy gluttons, and the new Fed chair sounding more hawkish than Powell ever did, OpenAI could easily fail to launch at its initial public offering.

Oversupply of new stock offering, Cramer argues, as does another article today by The Wall Street Journal, could bust the bull wide open on the sidewalks of New York.

The manic bull is likely soon to die, and when it does, it’s death is certain to be spectacular—one for the record the books.

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This was the worst day ever for one major tech company. IBM just took a plunge for the record books, crashing 23% in one day, wiping $68-billion off its value, and the scariest part was the reason for the biggest one-day crash in IBM history. It wasn’t just that IBM’s earnings missed expectations; it was the reason they missed expectations. IBM warned that AI is eating its business alive.

“In the last few weeks of June, we saw clients shift their quarterly capex spend toward servers, storage, and memory purchases to secure supply-constrained infrastructure ahead of expected price increases,” [CEO] Krishna wrote in a letter to IBM investors.

But why is that a problem for IBM, which manufactures servers?

For years, the market has operated on one simple assumption: AI spending would lift everything around it. Every new data center, every chip order and every infrastructure buildout was supposed to create a ripple effect that benefited the entire technology ecosystem.

But what if the opposite is starting to happen? One unexpected event this morning may have revealed the first real crack in that narrative, raising uncomfortable questions about whether AI’s massive capital spending boom is beginning to cannibalize the very companies investors expected it to enrich.

The questions raised this morning could wind up being contagious and spreading to other AI names…at a time when the market is already arguably the most overvalued its ever been in history….

[IBMs] infrastructure miss was particularly striking….

That reprioritization left customers with less money, and apparently less management attention, available for IBM’s z17 mainframes and the transaction processing software attached to them. Krishna said IBM had anticipated some supply chain disruption but “did not anticipate the magnitude of the capex reprioritization.”

Wrong kind of servers, I guess. The focus other companies on computers that are data servers for AI or that serve AI to the public and to businesses cannibalized IBMs business of making computers that serve up internet sites, etc.

The question is whether a hiccup this big that comes from capital spending rushing into AI raises the kinds of questions that can pop something that increasingly looks like the most outrageous tech bubble in history. Adam Taggart has posted an interview today with a guy who has been covering tech stocks since the flash crash of 1987 to predicting the dot-com bust and all the way into the present with his high-tech publication. He’s had a front-row seat to the tech world for almost half a century, and he is certain AI armageddon is coming to the market soon at a level that will make the dot-com bust look like a warm-up act.

Fred Hickey says the economic model (“if one ever even existed for AI”) is disintegrating as people realize there has been a massive overbuild of AI data centers, relative to how much money you can actually make from AI or relative to how many competing AI wannabe deities one really even needs. He calls it “the greatest stock bubble in US history.”

The market, he points out using Schiller’s CAPE ratio that I covered last week, is more overvalued relative to forward earnings than it has ever been in its history—far more overvalued than it was even in 2000 at the top.

And here is the major fly in the ointment:

There’s a huge gap between what companies are reporting right now for revenues and earnings and what they really are expending.

Yet, it’s worse than that.

40% of the growth in AI earnings in the first quarter was actually from gains on stock investments made by one AI company into another company’s AI stock on a mark-to-market basis. Those aren’t real AI earnings from doing their own AI business. They’re just more speculation in what looks like an incestuous circle. It presents an extremely fragile situation when a company’s expenditures are already gapping far above their earnings but those “earnings” are also largely gains made off of stock speculations (buying the stocks of the AI companies or software companies that a corporation wants their AI or software company to be in bed with). These earnings are just circular deals on each other’s stocks, which means the earnings plummet when the stock speculation turns down.

Yet, it’s worse than that:

If this one-of-a-kind “earnings bubble,” as he calls it, collapses, that can be a 40% vortex down in earnings that are already way overstretched by historic comparisons. Since those capital gains on speculative AI stocks are being reported as “earnings,” it means, if the stocks go from one-time gains to losses, that CAPE ratio that I pointed out as being near its worst historic high will suddenly blow way past that EXTREME because the earnings denominator will collapse into its own nothingness.

Yet, it’s worse than that:

In Hickey’s final analysis, all of the massive spending (beyond any CAPEX spending ever seen) on AI data centers by numerous corporations was never based AT ALL on earning’s studies. It was all, to put it bluntly, based on proving the size of the CEO’s balls. It was all egos of corporate executives wanting to end up being the one who could say he had the biggest and best AI on the planet. It was a space race to the moon. And they overshot far beyond what any revenue model can possibly deliver.

The collapse has already started

Microsoft stock has fallen by a third from its high. Oracle is down 60%! So, the crash is already underway. The “Mag Seven” has now become known as the “Lag Seven.” While Hickey believes Microsoft is making the right changes now, such as offering low-priced AI to its customers to become a survivor like it proved to be in the dot-com bust, he also believes all of these companies will take an enormous dive beneath where they have already fallen. At that point, they will be buying opportunities, but it will take them years to recover to where they are now (even in their already falling state) just as it did after the dot-com bust. (Sound like a thesis you’ve heard here?)

He doesn’t know when the big crash will get fully underway as in when it will become an unstoppable avalanche. He just knows that it is a baked-in certainty because of the huge and unsupportable misallocations of capital on top of phantom earnings that are already hugely overstretched, even if they were real. Look at just the margin debt on all stock purchases right now. It’s higher than we’ve ever seen!

That means when that incestuous stock speculation that makes up 40% of the “earnings” reported by high-tech collapses into its own black hole, all of these stocks are in a precarious position and are likely to join the vortex down as margin calls force sales. They’re all just chasing the growth in each other’s stocks.

Yet it’s worse than that … because even those corporate “earnings” we just talked about that are fleshed out with speculative stock bets are often bets made with debt. So, it’s all a rickety scaffold standing over a cavern of debt, but we always allow this kind of stock trading because greed loves it, adores it, worships the ground it walks upon. Greed likes the rocket ride up, and the fear of missing out on that ride drives the ride into higher strata in the atmosphere.

Hickey cannot predict when the great collapse will be fully under way, but what a rush it will be!

The Iran war is becoming Trump’s nightmare

Meanwhile, touching back on the rapid re-escalation on the war front that I covered yesterday, the temperature rose a lot more in the past 24 hours. Trump reimposed his blockade of all ships inbound or outbound from Iran and imposed a 20% toll on the traffic of ALL other ships from other nations that the US is trying to escort through the southern Chanel of the strait.

That drove the price of Brent immediately up to $86/bbl. Ukraine, then, attacked two Russian oil tankers in the Black Sea, and that drove the price up even higher to $87/bbl. Trump took tons of heat from his own people for imposing the same kind of toll that he had ridiculed Iran for imposing. Seeing oil prices rise so high because, of course, those selling oil will add the cost of those fees to the price of the oil they are selling, just as merchants do with tariffs, Trump TACOed on the same day again and removed his tolls before they were 24 hours old. That dropped the price of Brent, as of this writing to $85/bbl.

Naturally, gasoline prices are back to rising for their first time since the latest, failed schmeasefire was established in May. That brings us fully back to the escalating fuel prices I have promised were coming. And that means, while inflation dropped in todays’ CPI report, it will be right back up in next month’s report because the drop was attributed entirely to the decline in energy prices that happened briefly during what did enventually turn out to be just one more schmeasefire, though I gave it a SMALL chance of enduring just because Trump loathes becoming known as the guy who brings genocide to a nation, becoming an international war criminal and, most of all, knows Iran is bringing certain economic destruction upon the world in response to his war. Trump’s whole dream of a “golden era” is evaporating right before his closed eyes.

In fact, that the certain resurgence of inflation now that the war is back on is so true that even his newly installed Fed chief, who was supposed to be a monetary dove, just promised today that fighting inflation will become the Fed’s job one, promising a “regime change” at the Fed that no longer tolerates the “symmetrical” formula for inflation that Powell introduced. His boss may not like that, but the certainty of inflation is forcing it. Warsh said no one at the Fed stands outside of that new regime now. He said there is full agreement that the Fed must fight inflation back down to its 2% target.

“The members of our Committee have no tolerance for persistently elevated inflation. And we share a resolute commitment to restoring price stability,” he said….

“It has been a tax on the American people and businesses. We plan on getting rid of that tax,” he said. “That means we need a regime change in policy, and we need new consideration of practices, some of which have been working, some of which haven’t.”

We’ll have to wait and see what he actually delivers, but he’s sounding a lot more hawkish than Powell ever did right now … like he just got religion. Like the whole Fed did because the resumption of full-on war around the Strait of Hormuz is likely to grind on for a long time, and the US will lose much during that war of attrition. Intense stagflation, beyond anything seen in the 70s or early 80s is almost certainly on the menu.

Unfortunately, for the Fed, there really isn’t much it can do to bring that kind of inflation down so long as fuel shortages are building. The higher price of fuel is being determined by Iran as the cost to be paid for Trump’s war. And Iran isn’t letting go. It’s not rushing to make a deal. Iran is using deals to stall in order to give attrition the time it needs. The oil shortages are building, and they will soon start to really eat away at our wealth.

The Fed cannot turn that off. It can only rush to look like it is trying to do something. For the most part, raising interest rate “targets” will be essential because interest rates will raise themselves in order to compensation for inflation eating the interest as it accrues. So, the Fed will have to rush with higher targets just to look like it is the one still in charge. Otherwise, it will be sitting way behind in a cloud of dust and a pool of its own blood as it becomes known that the Fed is no longer in control of rates or money.

Things are not going well for Donald Trump as his golden era disintegrates all around him into the smoke of black gold burning across the Middle Eastern landscape—a war he started that has destroyed his highest ambitions.

And, oh, the instant return to rising energy prices sure isn’t going to help those energy-starved AI data centers turn out any earnings from their revenue stream. Good luck with that pipe dream. So, there goes his favorite proof of a strong economy—his beloved stock market as a gauge of his success.

(If you want to see an impressive video of nature’s calamities, to top off today’s theme, I just posted one below that shows the global catastrophes that hit in the single month of June. The scenes are impressive for both the scale of the events and the sheer quantity of events. It’s a big world, of course, with huge natural events all the time; but, having watched the whole video, I couldn’t help but think all these huge earthquakes, volcanic eruptions, severe floods, and numerous fireballs streaming through the sky all around the earth night after night, certainly feel like far more than your typical June. Maybe if you assemble them all, this is how every month looks, but it is quite the recap.)

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Surprise, surprise, the Strait of Hormuz blockade is now fully back on by both sides, and oil has now followed the full path I said it would. First, it plummeted when the strait briefly reopened, as I said you could expect on the basis that foolish speculators would all heave a huge sigh of relief that the worst was behind us. Of course, the worst would prove to be nowhere near behind us; so, I also said oil prices would soon shoot right back up when reality set in. Ta da!

Reality has set in. Iran, as I’ve always said, is not desperate to make a deal with the Don, as he keeps lying and saying they are. (So, I keep calling out his lies and haven’t had to apologize for being wrong about that yet.) I’ve said from the beginning that Iran is making this a war of attrition. That means it knows time is on its side. That is how attrition works. So, any time Iran can buy itself some temporary freedom at no cost from bombs and missiles while keeping the strait almost fully closed for oil shipping out to the West, which is exactly what it did, it will be happy with that stall tactic because attrition takes time. And that such cost-free deals are offered by Trump shows who is really itching to make a deal. We even paid Iran to make that deal by freeing up some of their sanctioned money to help them rearm. The longer the strait is blocked for West-bound oil, the deeper the pain for the US and its former allies.

So, oil is back to Brent Crude running over $80/bbl and WTI over $75. Everything has returned to where it was before the failed and always ill-destined ceasefire, and the oil speculators have been proven stupid again—especially the analysts who started to predict oil at $60/bbl and even lower! They chose to bet on the least probable outcome, but the most probable outcome has now played out.

I’ve posted an excellent video below by Chris Martenson which explains why the oil crisis, for the very reasons I’ve been arguing all long, is far worse than most people seem to think. I recommend watching it to get a confirming point of view if you have any doubt because Monday’s full Daily Doom article, headlines and all, is available to everyone for free. So, soak that up while you can.

Stocks are falling because stock traders also lined up on the wrong side of reality. Indices still look like they have put in the triple top that I declared a couple of weeks ago. Nothing has undermined that prediction. Meanwhile, prices for electricity produced from natural gas have now hit a 17-year high. So, inflation is certainly headed where I have been warning that you will certainly see it go. There are no surprises here whatsoever, except to the fools who place their bets based on their wishes, versus clearly probable outcomes. For them, there are sad surprises, and there will be many more … for them. The wise reader chooses to educate him or herself and not just read what he or she wants to believe, based on political stripes, financial wishes, etc..

War reignites as promised

The Iran War has now “dramatically reignited” with Iran having attacked six US allies in the region over the course of the weekend. There is no sign that Iran is jumping to make a deal as Trump declared when he announced the ceasefire was over, though saying negotiations would continue, albeit under fire. So, the lies from the White House are endless for those who want to believe them. Or you can read here and even support truth-telling.

The flareups are getting worse each day since Trump and Iran both declared the ceasefire had failed with the latest flareup having started because Iran blew up a good part of a container ship that was using the US-approved shipping lane along the Oman coast, which Iran has strictly disapproved. It was a case of Iran asserting that it controls the strait and telling the US in both word and deed that it has to get out of where it doesn’t belong because the strait, as far as Iran is concerned, is fully under Iran’s control for good now.

That was one of the vague points in the Memorandum of Understanding that created the totally failed ceasefire. It was one of the lines along which I predicted the ceasefire was virtually guaranteed to fail because both sides had clearly drafted that line to allow it to mean whatever either side wanted it to mean. That tactic might get parties to sign on, but it doesn’t bode well for success because the truth will out about how each side interprets the deal. So, when you get to negotiating that line, that’s the fault line upon which the whole deal cracks up.

The Cyprus–flagged container ship sustained heavy damage after it was targeted on Saturday, US Central Command said on X.

A civilian crew member was still missing after the ‘blatant’ attack, which forced the ship to stop its journey, authorities said.

‘Iran was provided yet another opportunity to demonstrate adherence to the Memorandum of Understanding after being held accountable for earlier attacks on commercial vessels but has again failed,’ US Central Command added.

Iran was actually given another opportunity to show what its interpretation of the extremely vague MoU means. That interpretation was always obvious as the way Iran was looking at the MoU … for anyone grounded in reality, which is why you read The Daily Doom—to get your truth straight up. It’s the interpretation I have said all along you can be certain Iran is operating by but one that will never stand with the US, which assured the demise of the MoU over time … and not that much time.

The US retaliated by striking another 140 Iranian targets to supposedly curb Iran’s ability to make the kinds of attacks it just successfully made. The US has said that many times, but the curbing doesn’t seem to hold past the day on which it was asserted by the US.

Dramatic video posted by US Central Command showed the overnight strikes as US forces struck about 140 Iranian military targets with munitions launched by aircraft, drones and vessels.

It came after Secretary of War Pete Hegseth vowed revenge for the Iranian strike and said: ‘Iran made a poor choice. Now they pay.’

So, they paid, and so did the US with more if its sites all over the Persian Gulf bombed and stricken by missiles and with oil completing its initial trip back up to the higher prices that this war created, which hurts the US far more than Iran. Those prices will, of course, go higher still, as I have promised after the SPR runs dry and a few gas stations here or there in the US start running out of diesel.

Iran has targeted US naval supply lines in a wave of airstrikes that have brought the interim peace deal to the brink of collapse.

Iran’s Revolutionary Guard Corps claimed to have destroyed several key US facilities across the Gulf, including a refueling station for American aircraft carriers at the Port of Duqm, Oman….

The strikes were the most extensive wave of attacks since fighting restarted this week.

Stategic Petroleum Retreat

Speaking of the SPR, an article in The Daily Doom’s headline section today says that the US may have less time coming from the Strategic Petroleum Reserve than the government thought because the extensive pumping beyond any depths the SPR has ever been brought down to is resulting in mechanical failures that mean the SPR may not be able to yield up all of its stored treasure, or will have to do so at a diminished, therefore less effective, rate.

Frequent drawdowns, wear-and-tear and a lack of investments are straining the reserve, according to experts. The 60 Gulf Coast salt caverns that make up the stocks can’t be drawn from or refilled at the rate at which they were designed, federal researchers found. Equipment failures have bedeviled the reserve’s managers. At one point, a well broke and caused the loss of hundreds of thousands of barrels of crude.

The upshot: President Trump or a future administration might not be able to rely on the massive oil buffer like others have in the past—even as the prolonged U.S.-Iran war all but ensures continued volatility in energy markets.

The deeper you get into the reserve, the harder it is to pump the oil up all the way, so the more antiquated equipment finally fails.

Here is what this all comes down to: you can believe the news your government wants to tell you. You can believe the news that stock analysts and oil-market analysts want to tell you. You can believe everything the mainstream financial press tells you. Or you can believe the news as it is told to you before it actually happens right here on The Daily Doom, which has—for a simple, objective fact—scarcely missed a prediction yet, even though what is said here often runs opposite of what all those other sources are saying, which is why I bother to say it!

There is no sense in just telling you what everyone else is already telling you. So, I focus on the interpretations that are different from most of what you are hearing. (Where my interpretations are the same, there is just not as much reason to say them.) You have to decide if you want to be one of the people who is willing to pay just a little to get the truth before it hits you or one who wants to go along for the free ride that the mainstream media is willing to give. I’ll tell you what’s unpopular, but it will also prove to be what is true.

Of course, some people have already made that choice, and they are better off for it; and I am, too, because they chose to support truth-telling.

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Economania (national & global economic collapse plus market news)

Stocks fall after Trump reimposes Strait of Hormuz blockade

SpaceX stock sinks for a second-straight day, nearing $135 IPO price

Burnout, frustration and heartbreak: Amazon layoffs take their toll in saturated job market

Funds fret over $4.4 trillion AI trio’s grip on emerging markets

Real-Estate Rubble (housing, commercial & global real-estate bubble trouble)

Supply of Existing Single-Family Homes Jumps to 10-Year High, Condo Supply to 14-Year High. Sales Slip Deeper into Deep Freeze.

Money Matters (monetary policy, metals, cryptos, currency wars & going cashless)

Entering the strongest period of the year for silver and gold, Aben Gold Drilling for Tungsten and Gold in Yukon w Stocks Selling for Value of its Liquid Assets

Hercules Metals is BIG and Going to Get a Lot Bigger

Inflation Factors (too much money chasing too few goods due to weather, sanctions, tariffs, quarantines, etc.)

Brent crude jumps above $80 a barrel after Trump reinstates Strait of Hormuz blockade on Iranian ships

US Cost for Gas Power at 17-Year High and Climbing

Ship traffic through Strait of Hormuz falls steeply as U.S. and Iran fight for control

Frequent oil draws from US strategic reserve push old system to breaking point

The US, Largest Crude Oil Producer in the World, Produced 42% More than Saudi Arabia and 37% More than Russia in 2025

Millions of Americans take on debt and drain savings to afford food

Wars & Rumors of War (including cyberwar, civil unrest and revolts)

Iran war dramatically reignites as US launches strikes on key targets in response to attack on ship in Strait of Hormuz... before Tehran opens fire on SIX American allies

U.S. Military Launches New Round of Strikes Against Iran

Iran targets US navy supplies in most extensive wave of airstrikes

Trump says US is ‘reinstating’ blockade on Iran in Strait of Hormuz

Iranian Hard-Liners Escalate Threats Against U.S. and Trump

Inside Israel’s Secret Operation to Cultivate Ahmadinejad

Digital Dominance (AI threats, transhumanism, hacks & cyberattacks, etc.)

The WinePress News

Ireland Moves Into Pilot Phase For Digital ID Wallet

The Irish government recently announced that its national digital ID wallet is now officially entering its pilot phase and is slated to be live by 2027, in accordance with broader guidance from the European Union…

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20 days ago · 6 likes · 1 comment · The WinePress

Political Pandemonium & Social Senescence (socio-political issues & events)

Lindsey Graham, Republican Senator and Staunch Trump Ally, Dies at 71

Was Lindsey Graham poisoned? Why Iran and Russia are at the centre of conspiracy theories

Iran claims responsibility for the death of Senator Lindsey Graham, saying he was one of several targets

Cause of death for Lindsey Graham revealed as natural as FBI swarms his home

MAGA Figures Question Mitch McConnell Hospital Photo and Statement

$6 million a day: Trump’s disclosures show he is the swamp’s biggest monster

In a tiny Utah courtroom, Maga is more divided than ever

Knives out at US Supreme Court as justices’ squabbles go public

China Is Replacing Images Of Christ in Churches with Xi Jinping

‘There is no longer a safe place to be a Christian in China’

Doomer Humor

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A video I posted on Monday (and have reposted below), which I said we would get back to, provides a big piece of the truth about the stealth recession I’ve been saying the US is experiencing. It explains why the usual jobs reports and unemployment reports are not a fair representation of the true state of the labor market, proving the US economy is nowhere near as robust as analysts have been claiming. Here is a summary of the points in the video if you don’t have time to watch it:

• We have to go back about fifty years to find another time when the labor participation rate was this low. (The percentage of the population that is willing and able to work.)

• Mainstream financial media recently reported the silver lining on the employment report was that the unemployment rate had dropped from 4.3% to 4.2%.

• The intended impression of those articles was to present an image of the US labor market as showing a slightly improving economy, even though unemployment is higher than we had in better times.

• What really happened was 720,000 Americans disappeared from the US labor force in just a single month. So, the real story is about Americans giving up.

Simply put, 720,000 people actually stopped looking for work or even being available for work. Now when people stop applying for jobs or are no longer available for work, the government does not count them as unemployed. So, all those people can drop out of the labor force and not bump unemployment up even the tiniest bit. You have to be actively seeking a job to be considered unemployed. Worse still, on a year-on-year basis, the labor force has plummeted by over a million workers!

Clearly, if 720,000 people dropped out of the labor force in just one month, a 0.1% drop in the unemployment rate does not indicate the labor market is improving. The greater and more important number is the 720,000 people who evaporated. With nearly three-quarters of a million fewer people in the workforce in just one month’s time, its surprising the unemployment rate didn’t fall by a lot more since all of those people either left jobs without going on unemployment or were already unemployed and exited the unemployment rolls by leaving the available workforce altogether. So, of course, unemployment is down with that many people jettisoning the workforce altogether. If you’re not collecting unemployment because you are not available for work, you are not counted as unemployed, even though you are fully unemployed.

The biggest decline came from prime-age workers (25-54 years old), not people hitting retirement age. Likely the multitude of people disappearing completely from the labor force in the month reported includes some illegal immigrants. Obviously, if you are either deported on detained, you cannot apply for work in the US, so you just fall out of the labor force without going onto unemployment because you don't meet the minimum requirements of unemployment.

By another measure—the employment-to-population ratio—the percentage of working-age Americans who actually have jobs fell to 59%, the lowest level since the forced unemployment period of the Covidcrash back in October, 2021. Trump’s golden era is not showing up.

So, when you hear that the economy remains resilient because unemployment remains relatively low, you can now factor in how messed up the unemployment rate is by the huge loss of actually unemployed people who are simply not looking for work, so simply not counted as unemployed. That’s one of the big reasons I’ve been saying we are in “stealth recession.” The truth about the labor market is not “resilience;” it’s “retreat.” It’s either giving up, being deported, becoming too ill to work or dying. The labor force (all the people who are working or are unemployed but seeking jobs) has been declining all year, but now it is plunging.

Now let’s really dig down to reveal the ugly truth about our slacking economy that appears throughout multiple labor metrics … and then you’ll understand why this is the “most hated expansion in history,” as many have called it (because it is NOT an expansion). We’ll see that the labor market does not look robust. It looks decrepit. In fact, it looks like a rickety structure about to topple:

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Job numbers puke, but the reality is worse …

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Stocks rose and oil prices dropped today as markets and their analysts completely ignored the biggest outbreak of attacks in the Middle East in the last few weeks. Instead of sitting around the water cooler, they’re sitting around burning fuel tanks, betting that oil prices will be quickly dropping back to prewar levels as the flames of war light their backsides on fire.

Today, they ignored Trump and Iran both saying the ceasefire deal is off yesterday, almost as if they were dumb enough to listen to Trump’s latest words, claiming Iran just called and is dying to make a deal! Yes, he pulled that tired canard out again because I guess there are enough people who have been breathing his missile-exhaust, hot air long enough to keep believing it. You’d think the lies would get more creative; but I guess, if you have enough people who are willfully blinded by their own greed, the lies really don’t need to get creative at all.

I did find, at least, one astute article on this week’s oil market by Tsvetana Paraskova on Oilprice.com. While it was two days old and, so, commented on how oil prices were dropping prior to Trump and Iran both claiming the ceasefire was “dead” yesterday, its observations about what most analysts were thinking only two days ago reveal how stupid analysts have already proven to be:

Oil prices have dropped back to pre-war levels since the United States and Iran agreed to negotiate a deal under a framework that included the reopening of the Strait of Hormuz.

With oil flows out of the Middle East starting to return to the market, analysts, investment banks, and traders expect the global oil glut to return as early as in 2027 and sink oil prices further.

Prices are heading south to $60 per barrel, many analysts think. The futures market seems to think this way, too. Speculators are betting on where they think prices will go in the near term, and most have turned bearish over the past month.

The return of flows through the Strait of Hormuz is making traders confident that the scarcity and supply disruption are over….

Most market speculators bet on Hormuz volumes recovering in the third quarter and oil prices sinking by the end of the year.

Of course all of that proved the analysts are as dumb as this guy (and some of those that follow):

Their predictions were a big, fat face plant because the deal blew up less than two days later. The strait almost completely shut back down over the past night after I wrote about the war re-igniting into a hotter war yesterday. Though oil prices shot reflexively back up under yesterday warfire, stupidity has already settled back in today as thick as the sludge at the bottom of those empty Cushing tanks I’ve been writing about.

Paraskova was smarter than the analysts she was covering, pointing out what should have been obvious to all:

… most bets and oil price forecasts assume that the U.S.-Iran memorandum of understanding is a real, lasting peace deal. It’s far from it—it is just a framework to negotiate a potential agreement by the end of August. Progress on that front is nowhere to be seen, at least publicly, and the situation could deteriorate with renewed tensions at any time.

And, so it did.

There was nothing about this deal that looked like it would last, outside of Trump’s immediately obvious chickening out from the war he started at Israel’s behest, which he did because Iran was destroying the US economy (and the rest of the world’s with it). I’ve pointed out all along that Iran doesn’t want a deal. At least, nothing like what Trump is demanding. It wants to inflict as much pain on the US for what it’s done as it can. As an alternative, it will be happy only with unconditional surrender to its new terms of controlling the Strait of Hormuz for vast future revenue streams so long as that also includes the US and Israel guaranteeing they will permanently end all future hostility toward Iran while also allowing Iran to keep its uranium enrichment program, its current stockpiles of enriched uranium and its vast arsenal of potent missiles. That’s the deal on Iran’s side of the memorandum of intentional misunderstanding.

As Paraskova said with more insight than most of the analysts,

Iran hasn’t given up on asserting some kind of permanent control over the passage through the Strait of Hormuz, including by demanding ‘service fees’ in exchange for safe passage through the chokepoint in coordination with Iranian authorities

These things are fairly obvious to people who are willing to see the truth straight up. So, contrary to the analysts’ euphoric delusions about a return to an oil glut across the world by 2027, the following turnabout was reported by Zero Hedge right after Paraskova laid out the silliness of the analysts:

The US military has struck Iranian targets for a second straight day, while Tehran has responded with ballistic missile and drone attacks targeting Kuwait, Qatar, Bahrain and even faraway Jordan. While our overnight wrap focused on the latest war developments, the focus here is what energy traders are watching most closely: vessel traffic through the Strait of Hormuz.

Bloomberg cites new shipping data showing that the Hormuz chokepoint slowed to a near standstill on Thursday.

That looked like this with ships piling up in anchorage and at docks all along the sides of the strait but very little traffic going through the strait:

The slowdown marks a sharp reversal from the partial recovery that followed the mid-June interim US-Iran peace deal to reopen the Strait of Hormuz.

But who could have seen the likelihood of that coming? Right? The intentionally-vague-and-misconstrued-by-both-sides ceasefire agreement that put off all the most contentious matters for later discussion in order to get an immediate opening of the strait—all of that collapsing in a flurry of top-leader accusations that the other side is dumb, evil, sick, etc.?

Commodity-vessel transits averaged 34 a day over the past three weeks and peaked at 59 on June 24, according to Kpler data. That compares with just 14 crossings Wednesday, the lowest since the deal and near wartime levels.

And even less now! Overnight traffic through the strait looked like this:

It looked pretty black across those waters throughout the night. All told, overnight, there were four inbound attempts and only one outbound that could be detected, and the outbound ship made a U-turn. But, hey, oil prices have relaxed as the warfare continues to blaze hotter, I guess because Trump said Iran called and is desperate to make a deal … for what, the 40th time? I’ve lost count.

After pointing out the inanity of the analysts, Paraskova laid out the clear reasons why the oil crisis will go rapidly worse:

Traders point to how remarkably well the market handled the worst supply disruption in history.

But this was due to several factors that helped mitigate the shock to a great extent.

Governments, including the U.S. Administration, released stocks from strategic reserves, depleting the inventories to multi-decade lows.

Once those reserves are dry, as is, according to the US president, himself, within a couple weeks now of happening in the US (and in potentially shorter time by other calculations that I covered), that buffer against the truth will be gone. That is when I have been predicting fuel prices will inflate through the roof. To put a finer point on it, it is when the drying up of Cushing and the SPR start causing gas stations to run out of fuel, that the game of pretend is over. But spot situations of running out of fuel, especially diesel, which relies heavily on ME oil, shouldn’t take long to start occurring after the SPR is out. Even announcement of the SPR running out, might be a big enough wake up call to rattle these fume-addled brains back into some semblance of mental activity that is, at least, slightly higher than any seen lately in Senator Mitch McConnell (also in the headlines below).

Paraskova notes that the oil market had started in a soft and easy position when the war first broke out, making it easier to ignore the risks of war in the ME:

The oil market was already headed for a glut before the war began, with millions of barrels of oil sitting in tankers at sea.

But that situation is has gone well past its sell-by date and, with Ukraine having just taken out two Russian oil tankers and even more refinery capacity over the past 24 hours, Russia is now also OUT of the oil exporting market. Putin is not just desperate to retain fuel for his own people to avoid mass rebellion, which he has shown by banning all diesel exports, he’s increasingly concerned about having enough fuel to keep running his war machinery. There is nothing more embarrassing to an imperial leader than being hot at war and having everything suddenly run down to a standstill because you’re out of gas. So, he’s conserving, and that means much of the Middle East and Russia are now out of the oil export business.

The oil market remains dangerously exposed to the next shock, with inventories so low right now….

Now that war is re-igniting in a much more oil-depleted world, price volatility will increase substantially. However, speculators and their analysts (I think they need to switch to psychological analysts) may remain intentionally blind and ready for more face plants until they actually see the shortages show up. That’s the bet I’ve always cast, as it seemed wiser and safer to bet on the markets’ stupidity lasting until it can last no more, while assuring my readers that it won’t last for long because a hard slam into the reality of finite shortages isn’t far down the road and is already fully baked in, even if Iran actually were to call Trump begging for another deal.

I feel safer betting on the entertainment value of face plants than on Iran calling the president to strike a quick bargain.

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Besides saying the ceasefire is over as far as he is concerned, the president added, “They’re scum…. They’re sick people. They’re led by sick people, and they’re vicious, violent people….” The president did add a minor caveat that he might defer to others for the final decision, as though the decision might not be final.

I’ll let our wonderful negotiators keep talking if they want, but I don’t see it. I don’t like these people.

As far as I’m concerned, it’s a waste of time dealing with them. They’re liars.

Trump also said he would “probably hit them hard again tonight…. Let’s just finish the job,” and “if it happens again, it will get much worse.” The US vice president also warned, “We’re going to punch back harder than ever.”

Vance went on:

“The basic deal that we cut was: ‘We’ll lift our blockade if you stop shooting at ships, but if you shoot at ships, we are going to punch back, and we’re going to punch back harder than ever before.’ That was the deal. They said they would stop shooting at ships and what happened 24 hours ago, they started shooting at ships again…. We’re going to knock the hell out of them.”

Shortly after the president spoke, Secretary of War Pete Hegseth cancelled a trip he had planned to Israel. This could be an indicator that the administration thinks Iranian attacks on Israel are about to become severe again.

The Speaker of Iran’s Parliament, Ghalibaf, also said, at around the same time, he thinks the ceasefire is over:

And the Iranian Revolutionary Guard Corps said:

• Naval and Aerospace forces of the IRGC … struck 85 key sites of US military facilities in:

• Mina Salman Port & the 5th fleet Base of Bahrain

• Ali Al-Salem Air Base in Kuwait

• An MQ9 drone was also shot down.

Iran media began telling people,

If you live in Qatar, Kuwait, Bahrain, UAE, Oman, Saudi Arabia, book a one way, GET OUT IMMEDIATELY!

Indicating a return to full-on war was imminent. Other warnings quickly went out from the IRGC:

The US Treasury officially …

…revoked its authorization for Iranian oil sales, restoring sanctions that had been suspended under last month’s MOU….

“As President Trump and the administration have repeatedly affirmed, the MOU in effect with Iran is entirely performance-based. Iran will only reap benefits if they exhibit good behavior,” the official said….

Both sides accused each other of breaking the terms of the ceasefire because the terms were deliberately vague so that Trump could try to say a deal was coming together, back when he last claimed Iran really, badly wants to make a deal.

The waiver, originally scheduled to remain in force until August 21, had permitted limited Iranian crude exports and certain financial transactions as part of efforts to stabilize shipping through Hormuz.

Washington says Tehran violated its commitment by attacking vessels that used a US-protected shipping corridor near Oman rather than a northern route that Iran has insisted ships should use….

Tehran rejected Washington’s justification, accusing the United States of repeatedly violating the cease-fire framework….

In a strongly worded statement, the ministry said the United States had committed “both minor and major violations” of the agreement over the past three weeks.

It warned that Iran would “take whatever measures it deems necessary to safeguard its national interests and security” and held Washington responsible for “the consequences of this breach of commitment.”

Iran also continues to argue that the memorandum gave Tehran, in consultation with Oman, primary responsibility for reopening and managing shipping through the Strait of Hormuz.

As a result, Iran announced that the Memorandum of Understanding (MOU) is now officially “dead” and said it now now has “a clearer mandate to confront the Americans, the Israelis, and their proxies in the region and the world.”

Then, when nightfall came in the Middle East, the US began heavy bombardments in order to, as Trump had said earlier in the day, “just finish the job.”

The US is attacking Iran with more airstrikes on Donald Trump’s orders, according to the American military. Trump had threatened to “hit them hard again” at the NATO summit earlier. Iran has reportedly responded with a new Strait of Hormuz threat … and reportedly warns of massive attack on US army bases.

The following details on recent attacks have been reported:

• Explosions are being heard in the Bushehr area and further south along the coast in Konarak too;

• More blasts have also been heard in Bandar Abbas - which was targeted last night;

• Here, the western part of the city appears to be being hit, with air defences activated;

• There are power cuts in Chabahar where explosions were heard too;

• Israeli media have reported that the US warned its ally ahead of the attacks;

• A military source told Nour News that Iran’s armed forces would launch a “massive” attack on US army bases in the region shortly;

• And the outlet also said that the attack on Bushehr didn’t damage the nuclear plant there.

• Iran’s Mehr News Agency is reporting that explosions have been heard in the southeastern city of Iranshahr, although the nature of the sounds is not yet clear.

It comes after US Central Command announced it had begun a second wave of strikes on Wednesday after a series of attacks overnight on Tuesday.

The latest report by Hal Turner, which he notes is unconfirmed, was that Iran successfully hit a US destroyer:

The USS Michael Murphy … took a direct hit from an Iranian “Noor” ASCM, after their IADS system failed to intercept a swarm attack, last night.

The ship is on currently on fire and there are significant casualties. Multiple KIA [killed in action]. Early reports of … her sinking are premature.

All lubed up, but nowhere to go

Predictably oil prices shot up more than 7% as the stories built momentum throughout the day. Latest prices on Oilprice.com, as of the initial writing of this article, were WTI crude at $74.47/bbl and Brent crude at $78.02. At one point, Brent reached $79.76.

Central Command (CENTCOM) conducted massive offensive airstrikes hitting more than 80 military targets inside Iran. According to CENTCOM, the operation utilized precision-guided and 5,000-pound deep penetrator munitions against multiple coastal areas, including Qeshm Island, Sirik, as well as the major port city of Bandar Abbas.

The revoking of the sanctions reprieve suddenly leaves, at least, 63-million barrels of crude that Iran had rushed out of port stranded in the sea, though the numbers seem a little unclear:

Since the memorandum of understanding was signed in mid-June, Iran has rushed to load cargoes from its key export sites at Kharg Island, and move its tankers out of the Gulf as soon as possible, after weeks of virtually no exports because of the U.S. blockade that began in mid-April.

The surge in Iranian shipments out of the Gulf and into waters near the Malacca and Singapore Straits gave Iran a lifeline to boost its exports that had suffered from the U.S. blockade.

China has remained Iran’s key customer as other buyers are reluctant to commit to purchases. Rightly so, the U.S. has now ended the waiver, sanctions are in place again, and the buyers in India that were considering potential purchases have likely backed out.

Iran is thus left with millions of barrels of crude oil on tankers moving or idling in a large area from the Persian Gulf to the Strait of Malacca. Most of the laden tankers do not broadcast destination or broadcast they are for orders, according to vessel-tracking data compiled by Bloomberg.

Currently, as many as 63 million barrels of Iranian oil are either in transit or idling in tankers, per Bloomberg’s estimates based on data from Vortexa.

“Iran managed to ship out 60 million barrels of crude oil since the US Navy blockade paused in mid-June 2026,” TankerTrackers.com said late on Tuesday, after the U.S.-Idran tensions escalated again.

“If the blockade were to resume now due to escalating tensions, Iran would be stuck with ~50 million barrels of crude oil and refined products.”

None of the oil that has shipped was headed for the US. It was all destined for Asian ports.

Adding further strain to what will prove to be the worst energy crisis in world history, major oil exporter, Russia, due to the international shortages it is now suffering because of Ukrainian bombardment of its refineries and other oil infrastructure, banned all diesel exports.

The current Ukrainian campaign is reportedly one of the most aggressive, with longer-range strikes now confirming just how far Ukraine can reach into Russia’s energy infrastructure….

Ukrainian drones have now hit over 16 major Russian refineries and fuel terminals, knocking out over 30% of the country’s oil refining capacity.

Russia is currently facing a ~20% shortfall in domestic gasoline production, and plans to import up to 400,000 tonnes of fuel per month from neighboring countries to cover the deficit. Indeed, Russia has begun importing fuel from India with at least 60,000 metric tonnes of petrol having already been dispatched.

The world seems to be hellbent on making sure it suffers a massive oil crisis. As a result, another article below notes that the sour crude available from the US Strategic Petroleum Reserve, which is the kind used for making diesel and jet fuel—the kind where the US is dependent on ME oil—may be out in just nine more days. If true, that would be much sooner than the timeline given a while back by the US president.

It was only three weeks ago that Donald Trump sat in the mirrored splendour of the Palace of Versailles and signed a memorandum of understanding designed to end his war with Iran. Now he has declared the agreement to be “over” and denounced its Iranian signatories as “scum”, “liars” and “sick people” – and the hard reality is that no-one should be surprised.

The 14-point memorandum was a hollow shell of an agreement that settled nothing. For Trump, its sole purpose was to allow him to claim a swift victory. For Iran’s leaders, it was a survival plan intended to strengthen their grip on power. Not one of the central points of contention between America and Iran was finally resolved by the memorandum.

That is it in a nutshell. It captures the shortfalls of the agreement that I said from the beginning were very likely to be its undoing, even though President Trump clearly didn’t want to go back into war because the economic damage to the US and the world would, as he eventually admitted, create economic “bedlam.” The fault lines of the agreement have always been …

1. The vague wording throughout, designed to leave room for both sides to interpret things their own way in order to get Iran to sign on. The president hoped, in the least, to buy some time for the US to get some oil, and that failed.

2. All the stickiest issues over which Iran and the US have never been close on agreement were left to be ironed out over the summer months. That would be, in particular, its uranium enrichment program, its stockpile of already enriched uranium, and its missiles.

But does he mean it? During his war with Iran, Trump shredded anything that might have remained of his personal credibility. His rollercoaster ride of pronouncements ranged from threatening to end Iranian “civilisation”, to blowing up all of the country’s power stations and issuing expletive-strewn demands for its “crazy” leaders to reopen the Strait.

In among these fulminations, Trump would also declare that talks with Iran were “going well”, the Islamic Republic “wanted to make a deal” and even that his foes had supposedly “agreed to everything”.

Trump might have renounced the peace deal and heaped vitriol on Iran’s leaders today, but he is perfectly capable of declaring tomorrow that a wonderful settlement has suddenly been reached.

The re-ignition of full-on hot war over the course of the Middle-Eastern desert night would indicate that he does mean it this time. The question remaining is “Does Trump even have a plan for bringing this war to an end.” At the moment, all of his on-again/off-again actions and threats, ranging all the way up to likely mass genocide, make him look like he is rudderless in the middle of the endangered strait.

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The big news of the day is that Iran attacked three ships transiting the Gulf of Hormuz via a route along the Oman shore that is used and protected by the US Navy. In response, the US terminated the reprieve it had given Iran on oil sanctions and launched a counterattack on Iran.

The strait never has made it back to fully open. Iranian ships have, of course, been allowed free passage. Some others made it through, but today Iran started firing at them again. At best, the strait made it back to about a third the normal traffic going through for a few days. Now it is effectively closed again:

The Joint Maritime Information Center raised the threat level in the Strait of Hormuz to “severe” due to renewed Iranian attacks on ships this week….

The Joint Maritime Information Center cautioned mariners that “deliberate hostile action” by Iran is “likely under current conditions.” The center, headquartered in Bahrain, coordinates between allied navies and merchant ships in the Middle East.

Iran’s IRGC warned that any ship not using Iran’s approved route along its own shore will face an “immediate and powerful” response. While Iran agreed to safe passage through Hormuz under the MoU it signed with the U.S., it has subsequently launched sporadic attacks on ships going through the strait if they were not approved by Iran.

“There is obviously a battle for control, because obviously the only leverage Iran has is control of Hormuz,” said Michelle Wiese Bockmann, a London-based senior maritime intelligence analyst at Windward….

Iran’s military has warned it will target ships that do not use a northern route approved by Tehran. Vessels are avoiding the traditional route through the middle of Hormuz that Iran mined.

“This is part of this sporadic targeted campaign by Iran to destabilize that southern corridor and send a message to Gulf State producers that are not sending their oil via that northern corridor,” Bockmann said….

While Trump has said the US controls the strait and that it has ended Iran’s ability to stop traffic through the strait, that is clearly not so.

“The strait remains far from fully functioning,” Bockmann said.

In retaliation, the US delivered its own immediate and powerful response against Iran:

“U.S. Central Command forces have begun launching a series of powerful strikes against Iran to impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway,” CENTCOM said.

Oil traders had their own immediate response. Speculators—whom I’ve said have been ludicrously sanguine about the risks of the strait not opening ever since prices dropped—drove prices back up today:

At one point in the day, Brent crude spiked above $76/bbl, having touched a low of $70.19 on July 2nd.

So, we are back, for the day anyway, to eye-for-an-eye bombardments:

“Iran will only reap benefits if they exhibit good behavior,” a U.S. official told CNBC, speaking on condition of anonymity to talk about private discussions. “Iran’s actions in the Strait were wholly unacceptable to the United States and will be met with consequences.”

With ship traffic back to nil for now, the one thing that is steaming full speed ahead is the United States’ race to empty oil reserves.

All of this action came after Trump pulled out his old familiar strong-arming rhetoric on Monday:

“We’re either going to make a deal or we’re going to finish the job,” Trump told reporters in the Oval Office on July 6. “And it won’t be tough to finish the job. I’d rather make a deal, because I don’t want to affect 91 million people….”

“We can knock down their bridges in one hour, we can knock out their energy supply,” he said, adding that Iran “doesn’t have any money now” and that Washington had not provided Tehran with funds.

Iran responded defiantly. Mohammad Bagher Zolghadr, secretary of Iran’s Supreme National Security Council, warned that Tehran would respond “in another language” unless Trump spoke to the Iranian people “with respect.”

“I say to the delusional president of the United States, who today threatened 91 million Iranians: Speak to the Iranian people with respect, or we will respond to you in another language,” Zolghadr said in remarks carried by Iranian state media.

Maybe today’s action was Iran’s response in another language.

Thank you to the couple of free subscribers who transitioned to paid subscribers after my last plea. Every individual helps keep the lights on at this little publication.

For paying subscribers …

• A video in the headlines that follow describes how AI is doomed to sweeping deaths of corporate investments because none of the AI developers have come forward with a model for making revenue that can even offset their energy/operating costs, much less their development costs.

• Bank of America just issued a major warning that stocks are going to lose all their gains for this year in a sudden snap. That is particularly going to be seen in AI stocks, they say, due to the lack of profits.

• Blackstone is trying to sweep billions of dollars in bad private debt away by pulling an old trick out of the 2008 Great Financial Crisis handbook.

• And just look at the digital monetary reset Blackrock along with more than 140 other major corporations have teamed up on to put forward this week as well as a video about how the next monetary reset will actually play out.

Read more

Don’t let the stealth recession fool you. Just a quick look at the Atlanta Fed’s GDPNow indicator shows how false were the hopes that Trump’s “golden era” would start to dawn with its shimmering halo emerging above the morning horizon during the spring of 2026. The Fed’s own projections for second-quarter real GDP growth just took a suicide leap off a huge, bubble-busting cliff:

That looks more like the golden sun took an unexpected plunge toward the sunset horizon to me.

The Fed’s GDPNow forecast tends to become more accurate at the end of the quarter as more real data starts to come in. While the Fed was posting ludicrous estimates in the face of a massive oil crisis that inflation-adjusted GDP would arrive in a hot-to-scorching range by US standards of 3-4% growth, the number just got real. It is, of course, still not fully real, even at this low level, because the government never factors out all inflation (for reasons I’ve covered repeatedly so won’t go into). So, the real, real number is negative.

Watch the videos below, and you’ll see major caverns opening up under the US economy right now that are sucking that downward:

• A huge revelation of the true state of the US labor market, which is deeply in recession for reasons that don’t show on the surface, helping to keep the stealth recession fully cloaked. (I plan to lay that out in a Deeper Dive at the end of the week because there are a lot of complexities to unravel there.)

• The now absolutely certain impact this summer of the largest energy crisis in history. One video and an article lay out what I’ve been saying about how critical the level of US oil reserves have become.

Trump declares imminent food “emergency”

If you don’t believe the energy crisis is as bad as the video below reports or as I’ve been saying it is because it hasn’t happened yet (even though I’ve been saying it would not happen yet), then look at the national emergency that President Donald J. Trump just declared:

I, Donald J. Trump […] do hereby declare an emergency TO EXIST with respect to the threats to the availability of sufficient supplies of fertilizers to meet expected agricultural demand. [My emphasis.]

If you’ve been reading The Daily Doom, you’ve seen the fertilizer emergency coming from a long way off. You know why it is a true emergency because it forebodes a food crisis, and you know why it is happening. So, it’s no surprise and should have been dealt with months ago. The president now says a food crisis is coming if we don’t take emergency action right away.

Within the president’s sudden declaration of a state of emergency, which he says demands “immediate” action, we find admission to troubles created by his tariffs as well as a big clue to the size and imminence of the overall energy crisis. You see, the cause of the fertilizer crisis is two-fold: The unavailability of phosphates, which the declaration addresses directly, is an artificially created tariff trouble. The unavailability due to “conflicts” that the president brings up refers to natural gas for producing the nitrogen component of commercial fertilizers. This immediate emergency is a bellwether for the full-on energy crisis.

The fact that the shortages are serious enough to get Trump to drop his tariff on a key fertilizer component from a major supplying nation in order to open the market up more is testimony to the destructive effect of tariffs on the US economy. He prizes his tariffs, so he doesn’t drop them easily, and he surely knows any time he does have to drop them looks like an argument against the tariffs.

The fact that Trump is doing this to help get the cost of fertilizers down for farmers is also testimony to a fact that he has perpetually denied, which is that American businesses (and ultimately consumers) pay for the tariffs. American farmers have become so strapped by rising costs due to tariffs and the oil crisis that the president is having to back off a tariff on phosphates to help get the price of fertilizers back down to earth.

The US Farm Bureau has reported that 70% of farmers cannot afford the amount of fertilizer they normally go through during the summer.

The president’s declaration acknowledges the severity of the problem, but attempts to deflect the blame by putting it vaguely on “disruptions” from conflicts and “trade actions” of other countries:

[The acknowledgement] “Fertilizers are an essential component of agriculture and food production. Producers of corn, soybeans, wheat, and a variety of other crops need phosphate fertilizers to ensure strong crop yields to feed the population. Food production is critical to human health, farm security, and to the function of major sectors of the economy, and even isolated interruptions in food production can have serious health and economic consequences. Robust and reliable food production is therefore critical to the economic and national security of the United States….

[The deflection] “Global supply chains for phosphate fertilizer and fertilizer inputs, including imports of such products into the United States, have been disrupted in recent months by, among other things, conflicts in fertilizer-producing regions as well as trade actions taken by major fertilizer-producing countries.”

Yes, the conflict that Trump has created with Iran on top of the conflict Russia has created with Ukraine, both cutting off a lot of Natural Gas and the nitrogen made from NatGas are disrupting one major component of commercial fertilizer; but he cannot do anything to reduce that cost because it is already an established shortage due to the war. As for those “trade actions,” which affect phosphates extracted from mined rock, let me note that the “trade actions” Trump is removing are his own. Other countries do not charge our farmers tariffs on the fertilizer resources they have to sell and are normally more than happy to sell all they can. We charge our importers, and that cost gets placed on farmers.

Even if it were other countries taking action against the US, it would be their retaliatory response to the tariffs the US first imposed on US importers of the products those nations are shipping to the US. Adding tariffs to import prices reduces the extent to which American companies are willing or able to buy those resources. That is the whole point supposedly—to reduce imports from other nations to right the imbalances in trade. So goes the argument for tariffs. The result is shortages in the US, which I warned about a number of times last year as a trouble we’d see created by tariffs.

So, we’re getting a double-whammy from Trump’s tariff wars and his war in Iran, cutting off key ingredients—phosphates and nitrogen—that are essential major components in commercial fertilizers. His declaration continues:

For example, the United States’ largest foreign source of phosphate fertilizer has experienced supply chain disruption, placing additional pressure on the farm economy and the production of certain categories of domestic food. Persistent threats to the global fertilizer supply chain, which create rapid price increases and procurement challenges, require the United States to procure phosphate fertilizer from diversified foreign sources to mitigate the significant risk of harm to the agricultural food production of the United States.

“[…] Therefore, I, Donald J. Trump […] do hereby declare an emergency to exist with respect to the threats to the availability of sufficient supplies of fertilizers to meet expected agricultural demand.“

Yes, the supply-chain disruption, in the case of phosphates, is due to Trump’s own tariffs. In the case of nitrogen, the supply disruptions are primarily from the Trump-Israel Iran war. Trump doesn't have any control right now over the nitrogen shortages caused by his war because Iran is still throttling traffic through the Strait of Hormuz, and when it finally does fully open, it will take time to rebuild production—time we no longer have.

However, he can easily control the cost increases for phosphates because he caused them. By completely eliminating his tariffs on the mineral coming out of Morocco, as he has just done, he can reduce costs and eliminate the shortage issue in short order. So, one component of fertilizer will go down, reducing the price some. The other (nitrogen) will remain up, assuring the price stays a lot higher than it was before the war and the Trump tariffs.

Here is where this is a bellwether for the bursting of other bubbles I’ll talk about below: The President of the United States, by declaring an existing fertilizer crisis, is tacitly admitting to the genuine dangers of a full-on oil crisis. That is because the same thing is happening in crude oil as has been happening in natural gas. So, as I’ve been predicting, the same price increases and shortages will be coming for fuel that we have seen for fertilizer made from NatGas.

And, remember, just as the US produces more crude oil than it needs, it produces more natural gas than it needs. It does not, however, produce the kind of crude it needs for key distillates that go into some fuels, and, apparently, it does not have the full nitrogen extraction facilities it needs to meet all of its nitrogen requirements because we throw away a lot of natural gas. It has become used to buying some of those fertilizer products already refined and processed into granular fertilizer components in other nations.

This is the King of Chaos scrambling now to undo the damage his policies are creating without admitting directly that he is the cause, which is something we’ll never see; but he is admitting directly that trade-related shortages now do threaten an imminent food shortage for the United States if emergency actions are not immediately taken.

It is imperative to immediately facilitate importation of phosphate fertilizers from the Kingdom of Morocco to mitigate the significant risk to the agricultural food production of the United States, to safeguard the economic and national security of the United States, and to ensure a stable domestic food supply.

I warned of shortages to develop here at The Daily Doom due to tariffs throughout the past year. Now we see it is an imminent enough food crisis to merit an “immediate” presidential elimination of phosphate tariffs with the nation that can supply a lot of phosphates. Expect to see more and more of these kinds problems with shortages emerging over time as both tariffs and the energy crisis rip like claws into the flesh of the US economy, which means into your flesh if you live in the US. However, the rest of the world is suffering the oil & gas crisis along with us as well as taking their own major economic hits from Trump’s tariffs or their retaliatory tariffs. So, what I write applies to everyone.

The chaos just keeps coming.

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Don’t stock up on stocks

If the huge erosion of jobs I’ll be talking about in my weekend Deeper Dive doesn’t collapse the foundation of the economy, the crash of the stock bubble will certainly do so. Even MarketWatch, in a headline to an article you can only read with a MarketWatch subscription warns today, “If the stock market’s double bubble bursts, it could usher in the next crash.”

The double bubble they note is AI stocks and the seasonally adjusted Price/Earnings ratio. Everyone knows stock prices are outrageously elevated, so stocks are a bubble in their own right, but defensive claims against that risk are that forward earnings are strong, keeping the P/E ratio anchored somewhat to reality. (However, they are nowhere near that strong because forward doesn’t look as good as they are deceiving themselves into believing.)

One of those bubbles is now showing some suddenly serious bubble trouble. Rebellion is undermining the enormous AI buildout that has been driving the AI bubble in stocks. The biggest AI project in the world was struggling under the protests of locals who don’t want the center anywhere near them. As the troubles grew, the center’s largest investor just pulled out:

World’s Largest Data Center Project On Verge Of Collapse After Blackstone Unexpectedly Pulls Out

Up until now, when it comes to real estate, Blackstone was best known in recent years for dumping many of its trophy office properties - which in the aftermath of work from home never recovered their projected cash flow potential - at a huge discount. Now, it may be pulling a page from its old, pre-Lehman playbook by calling the top in yet another commercial real estate segment: data centers.

Two days ago we reported that Blackstone was selling its stakes in a trio of data centers across Northern Virginia for $3.5 billion, cashing out of part of a bet it made less than three years ago….

We said that “the question is why did Blackstone decide to pull the cord now, just as fresh doubts are creeping [as to] whether the Mag 7s will continue funding the AI expansion with virtually unlimited capex.”

Two days later we have an answer.

The digital ink is barely dry on its Virginia data center sales, and we learn that Blackstone’s QTS (QTS Realty Trust) is again quietly fading its AI exposure by walking away from plans to build its portion (which at this point is the only portion left after its partner already pulled out days ago) of a 2,100-acre data center campus in Virginia - also known as Prince William Digital Gateway which would house as many as 37 data-center buildings - handing a win to residents who fought for years to topple the project.

The data center developer [for Blackstone’s portion?] had planned to transform more than 800 acres in Northern Virginia’s Prince William County, a project that would have spanned 22 million square feet, making it the largest data center campus in the world. Located on the edge of an historic Civil War battlefield and on what used to be land protected from development, the project ignited strong pushback from homeowners and has been stalled by lawsuits.

So, the protests against these megawatt-sucking behemoths is not falling on deaf ears. It’s growing to be as loud as the background humming of all those generators, cooling fans and AC pumps.

As part of Wall Street’s broader push into data centers, investment has poured into Northern Virginia, which is considered the country’s largest data center market, and is better known as “Data Center Alley”

You can see here what an enormous portion of the AI buildout Virginia constitutes:

We already saw in an article I wrote a month ago how Kevin O’Leary decided to scale back one of the other largest data centers in the world that was going to be built in Utah because of protests. (See “Past the Point of No Return: The Economic Collapse Is Happening!”)

So, resistance is not futile because so many people of all political stripes are enraged about what the enormous data centers do to their communities with noise pollution, light pollution, their enormous ugly footprint on the rural landscape, their impact on real-estate prices, actual (and substantial) heating up of the surrounding climate or streams, especially if built in valleys, and, most of all, electrical rates, though some are now being required to generate all their own electricity, but that just increases all those other categories of complaint. AI data-center rebellion seems to be the one thing most people can agree on.

But in a strategic U-turn, in recent days QTS executives decided that it isn’t worth pressing forward in court [against the protests], the Bloomberg sources said. The firm’s attorneys plan to inform the court of their decision as soon as this week, the people said, asking not to be named discussing non-public information.

QTS’s rapid growth has made it a poster child of how private equity has fueled the data center industry’s breakneck expansion. Those ambitions are colliding with public anxiety over strains to electricity grids and home prices from AI data centers.

The retreat may be the final blow to Virginia’s “Digital Gateway” project, a mega site roughly twice the size of New York’s Central Park with city-sized power needs. The initiative was supposed to bring in some $100 billion in spending and create one of the world’s largest technology corridors. Not any more.

The project had sparked contentious, drawn-out public hearings. A clerical blunder related to a key zoning meeting created setbacks for developers. Already, Brookfield-backed Compass Datacenters, which was supposed to build on more than 800 acres at the site, had pulled out in May.

The U-turns by both firms, Bloomberg writes, amount to one of the most dramatic retreats by developers from a data center project.

You can get a lot more details in the article, but that is the gist of the growing troubles for AI.

Another article today says that the US Treasury has an internal report warning of the the dangers from an AI bubble. You can read that article below. The article notes in the lead that “Privately, some of its analysts are weighing AI against the dotcom bust,” which is how I’ve said all along the present bull market will finally end. It also notes that the Treasury report is “a significant departure from the Trump administration’s public tone.”

AI firms are more deeply entrenched in the U.S. economy than their dotcom predecessors and pose significant risk to the entire system if financial conditions change, productivity goals are missed or various choke points stymie growth.

Do you think that soaring cost for energy when the crisis breaks out full blown, as one of the videos below describes, could be one of those financial conditions that change … a lot … for an industry that is extremely energy hogging and already facing roadblocks because of that? Or how about that unexpected and large plunge that looks like it is forming in GDP now? (Not unexpected if you read here by any means, but unexpected by stock investors and the mainstream financial media and, until the latest report, the Fed, which thought we were homing in 4% GDP growth.)

A downturn in the AI market would send shockwaves throughout the entire economic ecosystem, the analysts wrote.

Well, then, hang on.

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Red light flashing

As for the other bubble with trouble, P/E ratios by one metric have just triggered a record alarm. It is not an alarm that is great for timing, but it is one where the size of the alarm is resoundingly indicative of the size of the crash to come whenever it does hit. And, like an earthquake, the longer this fault builds up pressure, the worse the rip.

One of the market’s most reliable long-term indicators is flashing red

The overvaluation of US stocks has now surpassed the level that brought the stock market crashing down in 1929. At a rating more than double that of their British and European counterparts, and the highest since the peak of the dotcom bubble, US equities are in for a hairy decade.

That is the finding of a major investment bank….

This new analysis notes that the US S&P 500 stock index trades on 41 times earnings, based on Robert Shiller’s cyclically adjusted price-earnings (Cape) calculation. This is the highest valuation for US equities, using this tool, since the peak of the technology, media and telecoms (TMT) bubble of 2000 and exceeds the valuations reached at the highs of 1929 and 1901, both of which preceded seismic crashes.

The 41-times rating is also more than double the UK and European equivalent multiple, the widest gap ever seen….

Earnings, the denominator in the ratio, can fall suddenly, leaving the ratio top-heavy, as we have seen in past major busts:

Sharp falls in earnings in 2001 and 2007-09 punctured any “new era” thinking, and instead of a golden era of prosperity, investors were treated to a pair of devastating bear markets, as earnings disappointments left lofty valuations looking exposed on the downside. And it is the Shiller Cape study which raises the red flag on valuation.

Cape takes the stock index level and divides it by the average of the past 10 years’ inflation-adjusted earnings.

Adherents like it because this analysis takes a long-term view, looks at a company’s or index’s trend earnings power and considers cyclical highs and lows. Sceptics hate it because it is backwards-looking. They will also argue the US, and the West, are no longer reliant on capital-intensive manufacturing industries but asset-light ones, such as social media networks, software and AI.

How on earth is AI “asset light” with its requirements of enormous power facilities and enormous data centers? It’s as capital-intensive as building automobile production plants!

While this CAPE ratio has, even going by Schiller’s own words about it, not been good at predicting the timing of huge crashes, it has been very good at predicting the scale of the earthquake to come when ever the fault finally does tear open.

You can see we have been above the ’29 crash level for a long time, but you can also see that crashes that has happened up in this stratosphere have been cataclysmic.

If jobs are falling as badly as I anticipate reporting once I digest the data and if AI data centers continue to fail to build out all that they have promised their investors, earnings could tank in a hurry. Now, let me just note that the latest plunge in the GDPNow forecast was calculated/reported a day before the latest torrential jobs data that I plan (barring even worse news to emerge this week) to lay out in my weekend Deeper Dive for paying subscribers only.

And all those inflation-causing shortages in natural gas, fertilizers, crude oil and fuels, and maybe food shortages hitting right when GDP growth is going to the floor, mean one thing: serious stagflation just like we had during the OPEC oil crisis—the very thing I’ve been warning about for months. Only this time may be worse because the oil crisis is historically the worst ever and it hits right when the stock market is primed, based on historic metrics, for a massive scale crash as soon as the right triggers fire.

Let me make a simple plea here: I have just retired (last week) and have less income on the road ahead, as has my wife, so seeing some income from The Daily Doom is more critical. If you are getting any help from my writing, please consider becoming a paying subscriber. As you can see, I put a lot of time into researching and writing every day, and I try to make economics and politics engaging along the way and to lighten up the dark passages with a little humor when I can.

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Economania (national & global economic collapse plus market news)

John Walter

7 Unexpected Consequences of an Economic Crisis Nobody Is Talking About

The most dangerous economic crises are not necessarily the ones that arrive with the loudest warnings. The collapse of confidence, which is often the foundation of every modern financial system, tends to happen gradually and almost invisibly. A society does not suddenly wake up one morning and discover that the structures supporting daily life have disa…

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a month ago · 17 likes · John Walter

Labor Market Tightens despite Tepid Job Growth as Labor Force Declines further amid Crackdown on Illegal Immigration

One of the market’s most reliable long-term indicators is flashing red

Fed’s GDP Now Falls off a Cliff because its Earlier Estimates Were a False Hope

World’s Largest Data Center Project On Verge Of Collapse After Blackstone Unexpectedly Pulls Out

Treasury Has an Internal Report Warning About the Dangers of an AI Bubble

Real-Estate Rubble (housing, commercial & global real-estate bubble trouble)

Homeowners Stopped Paying Off Below-3% Mortgages

Money Matters (monetary policy, metals, cryptos, currency wars & going cashless)

Gold prices set for first weekly rise in a month as investors scale back Fed rate hike bets

Six-Month Treasury Yield Rises to 4%: Bond Market Tells the Fed to Get on with the Rate Hikes

The US Government’s Ugly Fiscal Mess Forces Fed to High Inflation as Rescue

Bank of Japan Sheds 15.6% of its Massive Assets: Does QT instead of Rate Hikes to Put a Floor under Plunging Yen

White Gold Moves to Spin Out Critical Metals in Yukon

Inflation Factors (too much money chasing too few goods due to weather, sanctions, tariffs, quarantines, etc.)

Monica Andreasen

Iran, Oil, And The Cliff America Hits In August

The United States has 57 days of oil left before the Pentagon can’t fight a war…

Read more

a month ago · 702 likes · 103 comments · Uncomfortable Truth by Monica

“I, Donald J. Trump hereby declare an emergency … with respect to the threats to the availability of sufficient supplies of fertilizers to meet expected agricultural demand.”

The official White House emergency declaration

Americans are paying record prices for steak. Here’s why demand isn’t cracking

Wars & Rumors of War (including cyberwar, civil unrest and revolts)

World’s largest funeral ever for Ayantollah Ali Khamanei (But let’s not forget their terrorism, which is another side of the story that didn’t have to be.)

Oman walks a diplomatic tightrope over Strait of Hormuz fees

At Khamenei funeral, speaker calls to kill Trump; posters and grafitti urge death to Netanyahu, too

Iran’s new leadership is younger, savvier, ruthless and even more hard-line

British military says cargo ship reports attack by Houthis in the Red Sea off Yemen

—

Ukraine Plans To Hyper-Innovate Humanoid Robot Soldiers

Ukraine strikes St Petersburg oil terminal

Putin’s forces deliberately ‘mining’ Ukraine with rotting anthrax-infected cattle carcasses sparking bioweapon fears

War threatens Russian banking crisis, European intelligence report says

—

Russia planning attack on Poland to test Nato resolve, US warns

Digital Dominance (AI threats, transhumanism, hacks & cyberattacks, etc.)

The WinePress News

Google Introduces New reCAPTCHA Requiring You Provide 21 Points Of Your Hand To Your Camera To Prove You Are Not A Bot

Google is beginning to test a new reCAPTCHA that requires users to allow a camera to analyze their hands in intricate detail to prove one is not a robot…

Read more

a month ago · 37 likes · 34 comments · The WinePress

New “companionship” robots from China look like creepy pop star action figures – complete with slightly dodgy lip-synch

Political Pandemonium & Social Senescence (socio-political issues & events)

Inside the crumbling court of King Donald

What J. D. Vance Once Knew

Trump’s Tirades & Tablet-Throwing Oval Office Meltdown Revealed

Trump Made Hundreds of Stock Trades One Day Before Pausing Tariffs

Trump bought Apple, Nvidia and other tech giants before tariff reversal fueled rebound

Trump gifted a lavishly encrusted ring from Belgian diamond group that won tariff relief

America At 250: Minnesota Ranks First, Louisiana Last, And No State Is Getting Happier

“You Cannot Kill The Beast Until You Name It”: Democratic Politician Denounces Declaration Of Independence

Conservatives rage over re-funding of Planned Parenthood

College Students Are Testing at the Level of Fourth-Graders

Paul Pelosi in hit-and-run in Napa Valley, authorities say

Calamity, Catastrophe & Climate Craziness

Blazing Heat Forces DC to Cancel July 4 Parade — Messes with Other Celebrations

PJM Power Grid Mobilizes Against Heat Wave Stress

Energy Department Wants Data Centers to Stop Draining the Grid During Brutal Heat Wave

Europe’s Climate-First Policies Fuel Resistance To Air Conditioning As More Than 1,300 Die In Heat Waves

US considers proposal to cut Colorado River water use, Arizona says

Mount Etna LIVE: Eruption sparks panic in Sicily as Catania Airport cancels flights

Mount Etna dramatically erupts again with airport shut and all flights cancelled

Off-the-Beat News & Just Plain Offbeat News

New Theory Explains Why So Many People See the Same Thing During a Near-Death Experience

Scientists Built Cancer Kill Switch That Turns On With Flash of Light, Study Shows

What Could Go wrong? Scientists Build Fully Synthetic Life Form That Can Eat and Reproduce

FIFA lifts US star striker Balogun’s red card suspension at World Cup after Trump calls Infantino

Hope for Hard Times

Feel-good video.

Doomer Humor