Nic

If the US goes back to war with Iran, oil is heading to $150.

In a recent research note from BofA:

- Supply disruptions are the largest since records began in 1965

- Reserves absorbed the initial shock, but the cushion is draining fast

- Refinery disruptions are compounding the crude shortage

- A renewed kinetic conflict, combined with lower inventories and inelastic demand drives it to $150+

My view:

If there is a large scale return to conflict, it will be much larger than previous - particularly if energy infra is targeted.

We are heading into winter with depleted inventories and reduced refining capacity.

Let's hope sense prevails and an offramp is taken.

2 Months ago, Bessent announced operation "Economic fury" which he said would bring Iran to its knees in 2 weeks.

Well, it didn't.

And now the latest strategy is this harebrained scheme to police 4,770 miles of Iranian land / sea borders with a team of 20 people sitting remotely in Florida.

Inquiring minds would love to know how they plan to police the border with Afghanistan and the Caspian sea.

This was one of the biggest factors behind the tech crash.

Leveraged ETFs faced a record $56B in selling - an all-time record.

The real problem is that these ETFs are FORCED to sell.

These products must reset their exposure daily. When markets decline, they need to reduce their positions to maintain their target leverage.

This creates a vicious feedback loop.

Falling stock prices lead to mechanical selling on rebalancing which pushes prices down even further.

South Koreans got wiped out by these products earlier this year and it's wild to see it happening again in the US.

I wonder if they will still make Trump a headline speaker at next year's Bitcoin conference.

It's wild.

Datacentre construction spending is up 63% this year.

Spending on office space has completely flatlined.

Where do we go from here?