Welcome to another week! After a short break related to Iran war we are back to regular programing.
On top, I’m back to making videos this week with, you guessed it, Iran commentary. And lastly, this week’s paid piece will go over the Strait of Hormuz: the issues, the second and third-order effects and the actual possibility of opening it.
That’s it when it comes to personal updates, now straight to the global outlook.
Weekly Outlook
US Inc.
Iran war has put every other headline out of the top of the news pages, but it doesn’t mean we didn’t have any worthy developments.
Kristi Noem is no longer the head of the Department of Homeland Security. She was replaced by Markwayne Mullin after Trump was supposedly not impressed with her testimony in front of Congress after the Minnesota killings.
Comment: after the shitshow in Minnesota someone needed to be sacrificed and there was no better candidate than the head of the DHS. Now we are wondering who will be next, with Pam Bondi, Pete Hegseth and Lori Chavez-DeRemer (Secretary of Labor) in the most danger:
We had early primaries in Texas, where we had at least a few surprises. In Senate, GOP’s Cornyn and Paxton are headed to a May runoff while Democrats nominated Talarico over Crockett. In House races, Gonzales advanced to a runoff amid an affair scandal and Crenshaw lost to a more conservative challenger.
Comment: we are seeing early surprises in the primaries, however it looks like wrong foreign policy decision and focus on international affairs over domestic problems will have bigger impact on the overall race.
DOJ released another batch of Epstein files in which Donald Trump is accused of sexually abusing a minor.
Comment: I’m hearing that the Trump accuser is not exactly trustworthy, but the situation is surely far from good for Trump.
The Americas
In The America, my eyes are turned towards Venezuela as any issues there would send Trump and GOP on the downward spiral.
Maria Corina Machado pledged to return to Venezuela, however Delcy Rodriguez is far from welcoming. Additionally Machado seems to have no support from the White House or the Congress.
Comment: I believe that the Venezuela “opposition” is dead. They had years to prepare for the moment and when it finally came, Machado was out of country and her whole movement failed to produce even a single event, let alone victory. No strength, no influence:
Mark Carney called for Andrew Mountbatten-Windsor to be removed from Britain’s line of succession for his actions revealed as part of Epstein files disclosure. King Charles removed his titles, but Andrew is still eight in line to the throne and Britain’s monarch are also Canada’s head of state.
Comment: Andrew is going down as the sacrificial lamb and Carney is kicking him on top.
American special forces are supporting troops in Ecuador in a military operation against drug trafficking sites. They are there in an advisory role, not participating in raids.
Comment: the western hemisphere is still a priority.
Asia
Asia is the primary region affected by the closure of the Strait of Hormuz. This week was not that eventful, but the next few weeks ahead will surely prove different.
China set a GDP growth target for 2026 at 4.5-5% at the National People’s Congress.
Comment: It’s the first time in decades the growth target is set below 5%. Despite the numbers being fake anyway, China is feeling the heat from the global power rivalry.
Dozens of people were killed in Pakistan amid protests against the US attack on Iran. Notably, people were tryin to storm the American consulate in Karachi, the biggest city in the country and de facto economic center. American marines stationed there opened fire, although it is not clear how many of the casualties can be attributed to them.
Comment: Pakistan has large Shia minorities that are aligned with the Iranian regime. It is a divided country, considering it officially has a defense treaty with Saudi Arabia, a Sunni monarchy.
Speaking of Pakistan, they have an ongoing conflict with Afghanistan. Pakistani and Afghan forces clashed on the border and Pakistan targeted Taliban infrastructure.
Comment: it started just before the Iran war and there is non-zero chance it can spill over and combine. Just another volatile part in the highly volatile region. And Pakistan has nukes + a treaty with the Saudis…
Balendra Shah is looking to win the Nepal election after preliminary results showed his Rastriya Swatantra Party victorious. Ex-rapper is set to be the first PM of Nepal after Gen Z protests toppled the previous government.
Comment: it will be interesting to see the direction Nepal takes after the revolution.
Middle East & Africa
Iran… there is a lot to unpack here.
I don’t want to spend too much time here as I also write daily briefs on the war now (look at Adjacent News if you want to get them to your inbox), but some things need to be said.
First of all, the regime still stands. Second of all, the Strait of Hormuz remains effectively closed. Third, the new Supreme Leader of Iran is Khamenei’s son, even more radical now and endorsed by IRGC. Fourth, Gulf countries are hurting a lot; from reputation to oil infrastructure to desalination plants. Fifth, Israel is getting hit as well, showing that after a week of intensive air campaign, they still have plenty of missiles and launchers left at play.
On the other hand, Iran is getting hit hard. Tehran is literally burning. Oil and water infrastructure was also hit. Whole senior leadership was killed. Artesh navy was obliterated. Forced into decentralized Mosaic Doctrine, their attacks are disorganized, diminishing their effectiveness.
Iran is definitely losing the war. But ironically, they might be winning the negotiations. They are imposing high costs and the fight is, in a sense, more even than expected.
Volatile weeks are ahead of us, and if you want to read more about the Iran war and its prospects, here’s my latest piece on it.
There is also high chance Eritrea and Ethiopia will go at it since their whole neighborhood is engaged in fighting.
Comment: Ethiopia is landlocked and potentially stronger and can use the fact that everyone is busy to carve out something for itself.
Europe
We heard very surprising news from Europe this week.
Talks on Ukraine peace have been suspended amid the Iran war situation.
Comment: Putin is not interested in ending the war at the moment as global conditions currently favor him and his energy exports.
Macron made a dramatic speech in which he announced the expansion of France’s nuclear arsenal and proposed to offer some European countries a nuclear umbrella. He also announced a new nuclear-armed submarine by 2036.
Comment: France is looking to take the military leadership of Europe. While Britain is trapped outside of Europe and the US and Germany is economically weak with an even weaker military, it is France that is looking to fill the vacuum the US is leaving.
British police arrested 3 men on suspicion of spying for China. One of them is the spouse of Joani Reid, a Labour MP.
Comment: imagine how worse it will get with the new embassy.
Iceland announced its referendum on resuming discussions to join the European Union will be held on August 29th. Polling is split; the country began negotiations in 2009, but suspended them in 2015 in a worry for its fishing industry.
Comment: Iceland can be an important country thanks to its access to the Arctic Ocean, it may benefit from an EU membership in these uncertain times.
Business, Finance & Economics
And some more bad news from the world of finance to wrap things up.
Unemployment in the US rose to 4.4% in February as employers cut 92,000 jobs.
Comment: the economy is hurting and now we are looking to add a supply shock to the mix. If you ever had advanced macroeconomics then you know how bad it is. And if you didn’t then let me tell you that it could get really ugly and there will be no economic tool or policy to prevent it or fix it quickly. I wish good luck to Kevin Warsh.
BlackRock capped withdrawals from its $26 billion HPS Corporate Lending Fund, a private credit fund.Shareholders requested to withdraw $1.2 billion (9.3%), but the firm capped it at $620 million (5%).
Comment: from my exposure to private credit funds in my previous life these are some really risky deals; there is a reason someone turns to private credit. The reason is no bank is willing to finance whatever they want to do.
Wrap up
That’s all for today. Stay strong and see you soon!