The Strait Truth Can’t be Found Anywhere around the Crooked Neck of Hormuz
There are so many contradictions now between Trump’s magical claims and blatantly obvious facts on the ground that it is hard to keep up with the administrative lies issued in just a single day.
The decline of all three major stock indices today was blamed on the wildness in global bond markets and on the return to rising oil prices. We may want to look at all the wild rides in global bond markets in this weekend’s Deeper Dive to see if we can figure out what is really happening there and how much is likely at stake. Are we looking at the start of a global bond crash or something less horrendous?
In summary of today’s related stock action,
The S&P 500 fell on Tuesday, pressured by a run in sovereign bond yields to multidecade highs amid concerns of persistent inflation and elevated oil prices. A pullback in semiconductor stocks also weighed on the broader market….
Hopes for an end to the Middle East conflict continued to fade Tuesday after President Donald Trump said in a Truth Social post Tuesday that the U.S. is not currently engaging in any “talks or conversations” with Iran, nor are there any scheduled. He also said that the naval blockade “remains in full force and effect.”
Yes, because Iran controls the strait and still has its blockade fully enforced. So, the US must maintain its blockade of Iranian ships, or Iran would have a huge advantage over the rest of the world in the oil crisis it is creating because it is not retarded enough to block its own ships. If Trump had control of the strait as he continues to claim, he’d get all of that oil moving. What a moron to think that lie is believable. Believing he controls the strait requires believing he wants to hold the whole world hostage to an oil crisis that is still raging; otherwise, the guy in control of the strait would simply end the crisis!
Bond market fears are rising in the US to where some are predicting we could see 6% Treasury yields this year, which they claim would rip the stock market wide open and gut it from the competition with bonds. What will really scare the stock market they claim is if bond yields quickly rise to that level.
The move isn’t just in the US; it’s global. So, we’ll likely dig down this weekend into what is going wrong all over the world right now. (Depends on a family wedding we are having where my wife is officiating and family members from Arizona are staying with us for the wedding. So, there might not be time enough.)
TRUTH BE TOLD, the president would do this
JPMorgan has jumped on the food crisis bandwagon for 2027 that I brought up a few days ago as a prediction that many are making and I am, too, saying that it will arrive due to severe shortages of fertilizer AND that it won’t end quickly. If Trump controlling the strait is the straight truth, he could end the fertilizer crisis and curtail food shortages by getting liquid natural gas, which fertilizer is made from, and refined fertilizer shipping right away. What’s he waiting for?
Because liquid natural gas is such a tight market due to Trump’s War and Putin’s War right now, Pakistan just saw its power rates rise by 38%. Pakistan was an ally of the US during the Afghanistan war. You’d think Trump would want to help Pakistan get its soaring electrical prices down now that he fully controls the strait by getting some of the LNG they desperately need for their energy production headed their way.
The EIA (US Energy Information Administration) just forecast a continuing deficit in oil supply of 600,000 bbl per day in 2027. I feel that is far too conservative of an estimate of how short we’ll be, but that is the figure Trump’s Energy Information Agency is putting out. Still, it’s high enough that you would think the man who now controls the strait would be on that—especially since he also announced that all mines have now been cleared. Now the continuing deficit may be only due to damage infrastructure, but let’s get on the rest of it NOW. (“Thank you for your attention to this matter” as Trump would say in a Truth Social decree.)
Instead, we read the following in the report, which I am also sure is entirely wrong:
Most of the crude oil production in the Middle East is expected to return to near pre-conflict averages in early 2027. However, some output of about 600,000 barrels per day (bpd) will continue to be offline through the end of 2026, the EIA reckons.
Iran said it is going to sustain the war through the end of Trump’s term. Since they have done everything exactly as they said they would and were never lying when they said they were not negotiating with Trump nor itching to make a deal with him, I’m inclined to take their word over his.
After all, our own president has done nothing in this war the way he has said he would, including the primary fact that the war exists at all. As he was with tariffs, so he has been with war announcements and ceasefire announcements, TACOing every week.
Iran’s assurances that they will not let the conflict end for as long as Trump remains president, means oil cannot return to pre-conflict averages in early 2027. Iran has now promised a more offensive model of warfare, not reduced war.
Here’s the kicker:
This forecast is based on the assumption that oil shipments through the Strait of Hormuz will remain severely constrained through August, with flows slowly increasing in September.
A ridiculous assumption that requires the EIA to believe their boss, Donald Trump, really does control this strait and really has cleared all mines, and simply believes that it will take until August to convince ships there is now safe passage through the new US territory of Hormuz—something he also just declared into being as he was spouting off words that had no grounding in reality or truth whatsoever. Well, let me clarify. The EIA folk are either MAGA ideologues who believe their boss’s obvious contradictions with logic (as laid out above) or they know what they have to say to keep their jobs.
The EIA, however, does not expect that the Houthi threats to ships transporting Saudi crude oil through the Bab el-Mandeb Strait have resulted in any additional shut-ins of crude oil production.
How dumb are these guys, and where do they have their heads shoved? It must be darker than crude and cruder than oil inside of wherever their heads are. But then, this is a US government administration, so it probably is just using Trump’s magical thinking to declare facts into being. We’ve read repeatedly of ships turned around near Bab el-Mandeb and we read again of non-Iranian ships making a U-turn in Hormuz today (because that is what ships do in American waters when America is in full control).
Tanker traffic at the Strait of Hormuz has become even more erratic than before, with vessels meandering and U-turning, unsure how to proceed amid escalating security threats and Iran’s insistence of control over the chokepoint….
The security situation in the region has further worsened in recent hours after a cargo vessel was struck by an unknown projectile in the Strait of Hormuz early on Tuesday local time.
Then we have this interesting set of self-contradictions:
Today, the US leader claimed all talks to end the war with Iran were over.
He said on Truth Social: “There are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran.
“The Naval Blockade remains in full force and effect. The Hormuz Strait is open and operating.
“All water mines have been removed or detonated.”
The Naval Blockades is in full force and effect, so the Strait of Hormuz is open and operating. Is it blocked or open?
In spite of the president’s full control of the Strait of Hormuz of America, Brent crude managed to defy the president’s endless jawboning all day by holding solidly above the $91 mark that it easily benchmarked yesterday while WTI is hovering still at $85.50.
It seems to me there are many problems President Trump should be solving via his usual decrees today if he truly “fully controls the strait” that the US now owns as a US territory.
Ah, but what do facts matter when the all the king’s men issue fake news multiple times a day, as does the king; and people believe them just because they believe the king, obvious reality notwithstanding? Obvious self-contradictions like a fully blockaded, fully open strait notwithstanding. In their view the president and his people are not lying; they are merely decreeing a reality that does not currently exist into being. Now it does.
