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The world is mad and it moves fast.
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Shots last updated 26 March 2025
In Tuesday’s flight we mentioned about a possible minor incursion by Ukrainian forces into Russian Bolgorad as invading “Belgrade” which is in Serbia. My apologies. Even in writing this, autocorrect tried to correct the correction back to Belgrade. And if that isn’t a metaphor for the coming AI age, I don’t know what is. Regardless, this appears to be more special operations designed to monkey up Russian logistics and communications than a land grab.
Richard Murff
Knock off the theatrics, please...
The White House announced more tariffs on cars and General Motors fell 3%. The Mag 7 had started to look more like its old self, gaining 6.2% over the last three sessions before losing close to half of that on Wednesday. The NASDAQ fell by nearly 2%, and he S&P500 by more than 1%.
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The 4717 shot: This while the market’s big, invisible hand twiddles its thumb waiting for “Liberation Day” on 2 April when more tariffs are coming. This sense of the theatrical is unhelpful.
Demanding less supply...
The warning from Russia’s central bank that the US and OPEC have the capacity to flood the global oil markets came a few weeks ago. The fear is that a prolonged price collapse similar to that of the 80s, which contributed to the downfall of the Soviet Union, will do the same to the current regime. In talks with Moscow, Trump appears to be using oil prices as a cudgel while giving ground on grain and fertilizer. So far, Putin appears to be calling the bluff on the cease fire.
The 4717 Shot: Moscow’s central bankers are right, up to a point. OPEC’S spare capacity - about 5.3mm bpd - is at a record high and essentially equal to Russian’s current exports. Saudi Arabia’s current production is 9mm bpd, and can ramp up to $12mm bpd in a few months. What is limited is how much Trump can actually force US producers to overproduce to reach this goal. It almost doesn’t matter though. Most new production coming online from non-US, non-OPEC producers like Guyana, Brazil and Kazakhstan, where they are looking to cash in on fossil fuel's while that's still a thing.
The Next Super-Cycle...
Sweden’s wonderfully named prime minister, Ulf Kristersson, announced a jump in defense spending from 2.4% GDP to 3.5% by 2030 - funded mostly through borrowing. Not unrelated, The European Commission published, in its own adorable way, a 30-step preparedness plan for a looming conflict: like maintaining stockpiles of food and medicine. If widely adopted, this would make doomsday prepping one of America’s largest cultural exports, behind Elvis and heart disease.
They don't just make cars...
Europe isn’t the only bloc of nervous US allies looking to re-arm outside of America’s fickle orbit. Defense-industry bosses from South Korean and Australia have been in Ottawa selling Canadians all sorts of military kit; from South Korean submarines and howitzers and Australian cutting edge over-the-horizon radar (JORN) for $4bn. The pentagon was supposed to be the first in-line for JORN system, but that’s in doubt with DOGE cost-cutting.
The 4717 Shot: Between Japan and South Korea, arms-dealers revenues have jumped 25% since 2022 - to $63bn. While US arms-makers account for roughly $200bn, and still it dominate the market, East Asian manufacturing can fulfill orders faster than US counter-parts. At Japan’s Mitsubishi Heavy Industry sales are up 20% in Q4 2024. Hanwha Aerospace, South Korea’s largest defense contractor, sales rose 60% year on year selling kit to locals and Europe
Waltz's group chat about Greenland...
On Thursday US second lady, Usha Vance, will take the second son on a field trip to Greenland where they will learn about Greenland's history, culture and attend “a dogsled race.” The pair were set to be joined, inexplicably, by National Security Advisor Mike Waltz which offended the Greenlander's mightily. Yet his plans have become fluid after inviting the editor of The Atlantic into a top-secret group chat. Now it looks like the Vance's will be joined by the dad, J.D. Vance on Friday. If the Munich Security Conference is anything to go by, the Greenlanders will be even more offended.
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Mutually Assured Bankruptcy
WTF: Trade Deficit Insight
Tariffs are dominating the headlines. The 4717’s Richard Murff explains why they do little to address the underlying fear: the trade balance… and why a trade deficit isn’t necessarily a bad thing. The hell of it is that it automatically happens to the winner.
