What Happened Today? Ugh.
Tuesday March 24, 2026
Macro (because that is all that matters):
There have been no new attacks in the shipping lane and yesterday showed the first sign of some traffic returning.
Iran is just now collecting tolls.
The net effect of Trump bombing Iran is Europe needs nuclear more than ever as it won’t be getting natural gas from the middle east for a few years. They can get Russian natural gas in the meantime but that is not a good option.
Iran and Russia, with sanctions removed, are now getting full price for its oil and is collecting payments from companies to pass through the Strait. Before the war the black market rate was around $50. Now they are getting $103. Doubling your revenue can buy a whole lot of cheap drones.
The war is going to drive up inflation for the foreseeable future - especially for hyper-scalers. Clean rooms need helium. Lithographic process need helium. You can produce sub 5nm generation without massive amounts of helium. Since nVidia has front-run itself here there are going to be supply chain cost over-runs as well.
But, what this war has really done is stress investors out.
The private credit panic of 2026 is partially just investors tired of constant uncertainty. College educated individuals were already stressed out before the war. The number of respondents who felt comfortable with their job and job market is approaching pre-Obama levels. Remember, the stock market was DOWN for an entire decade the last time people were this pessimistic.
Consumer confidence is also down. Is this foreshadowing? Don’t know yet. But, when people are nervous it usually follows through to the market eventually just look back.
This whole war is the Battle of Hoth from Empire Strikes Back. It doesn’t matter how impressive your military is if the combatant can take you down with some duct tape and a spoon.
A $7M rocket being used to shoot down a $25k drone is not a judicious use of capital especially if the war has doubled the combatants income.
And then… you have the extended uncertainty over interest rates. No free money. No cheap money. Means Wall Street has no idea how to make money. For the last 40 years all investment banks have done is pick up the loose change. If it actually has to create value somehow, well that isn’t going to happen. Traditional banking is boring.
Boring means broke.
This past week the treasury waved a red flag. It was a little red flag that no one but me seemed to notice.
The flag had writing on it. It read:
For fucks sake Congress!
Total liabilities now exceed assets by a factor of 8. And that is just for what is on the feds balance sheet.
What is not on the balance sheet is even worse. I am sure you read the $39T debt headline this past week but if you add in the off balance sheet items like social security the real number is closer to $140T which is 5 times the GDP.
I do not think the US can start an Only Fans account. But it probably should. We really need that Only Fans income right now.
Maybe the US can sell Florida to the Netherlands?
This situation is far worse than people realize. Most of the world’s wealth is imaginary. It only becomes substantive IF and only IF the next generation produces more than the last in terms of economic value. The US (and nearly every country) borrows from wealthy people today at ~4% and then your children pay the wealthy people of today back in the future. This system works as long as your children’s income is far higher than your income + 4%. Do you think your child is going to make 4% more than you after factoring inflation?
And that isn’t happening.
And it hasn’t happened for 25 years. So life gets squeezed.
Universal income isn’t happening either. Nor is there going to be a robotic work force.
What has happened to the middle class in the US since the 1980s is now going to squeeze the upper middle and high net worth group down and spread out the gap to the 1% unless the entire system implodes and resets the system. BDCs limiting withdrawals is an example of this squeeze starting. The people who invest in BDCs are not quite wealthy. But, most people would call this group “rich people.”
Doctors, dentists, people who can afford a Ferrari and can sort of afford to fix a Ferrari when it breaks.
This squeeze is also why SpaceX and OpenAI are rushing to IPO. They can’t get money from the Saudi Arabia anymore and the next tiers of wealth are panicked and over leveraged.
These companies have to dump onto the market or disappear which would be bad for Saudi Arabia.
One of the traits of the escalator to nowhere model, the Angel-VC-IPO model, is you can’t unload a billion dollars unless there are one million people ready to risk $1000. You can’t unload a trillion dollars unless there are 1 billion people willing to risk $1000 or one million people willing to risk $1M.
Do you think there is one billion people on Earth that can afford $1000 dollars right now? Do you think there are 1M people who can afford $1M right now?
When you sum up the evaluations these are the sorts of numbers you get to.
If the base of the economy isn’t willing buy what the higher levels of the pyramid are selling everything becomes flat. Really quickly. And when you realize that the top most of the wealth pyramid (like the Elon Musk or the entire US) are just really massively in debt you will begin to understand the reason the system can’t be let to fail!
If the system blows up now it will take out the very top which will take out everyone. It will take out States. This isn’t hyperbolic. The GFC took out Iceland, Greece and Spain.
And the very top are the people who Wall Street collects the most commission from so it will take out Wall Street.
And Wall Street knows this.
The only groups making money right now are cheating the system.
If that continues (for example 500 million in oil futures selling 5 minutes before Trump posts a tweet) then trust in the market itself will fall.
Which is what happened in 2001 and continued until 2014.
ODTE options trading is down. Retail volume is down. People are already losing faith that the market is choo-choo to a comfortable retirement.
I stopped rolling PUTS today.
Trump much like Wall Street can’t let this collapse. Trump has to do something here. It’s a total failure on his part unless he can get Iran to give him a McDonald’s toy and claim victory!
As always, if you think there are spelling errors update your dictionary to the latest version. Happy speculation!
— AJ