Is Wall Street's optimism about the war more like delusion?

On Friday, the president pretended the war is over. (He said "hostilities" are "terminated.") On Sunday, he pretended he's winning the war. (He said the US Navy will guide tankers through the Strait of Hormuz.) Indeed, these two expressions of make-believe contradict each other, but neither the contradiction nor the make-believe matters to Donald Trump.

For a least a month, this has been the pattern. Fridays are when the financial markets are getting panicky about the effect of the war on the global supply of oil. So Trump says things to suggest the end is near. Sundays are when markets for oil futures are trading. So he says things to suggest the big, tough American president has everything under control. In the beginning, traders bought into things he said, because they wanted them to be true. They are not true, and increasingly, investors are putting more faith in Iran than in Donald Trump.

"The Strait of Hormuz is not opening," John Pickering of Pickering Energy Partners told Marketplace last week. "Our inventories continue to draw down literally every single day. And I think where we're headed is that physical tightness in one part of the world is going to meld into physical tightness across the world." (Iran responded to Trump's "guidance" post, threatening retaliation against "any foreign force approaching the strait," per the Post.) Some investors are using the acronym "NACHO" – "Not a Chance Hormuz Opens."

But market "optimism" still appears to be dominant. The head of international economics at Moody’s Analytics told CNBC this morning that a recession in the US is coming if the price of Brent crude reaches $125 a barrel and stays there for long enough. Even then, however, a recession would be "shallow," Gaurav Ganguly said. Why? Because, like everyone else on Wall Street, he still assumes optimistically that the war is going to end soon. Meanwhile, the strait is still closed and the price of the existing supply of Brent crude, not the future supply, which does not exist yet, shot up to $144 a barrel last week, according to Marketplace. That's probably why gas spiked by as much as a dollar in Indiana, reaching $4.85 by week's end.

About a month ago, JP Morgan released "The Illusion of Plenty," a report that estimated that the last shipment of oil through the strait was around April 20. While some oil still flows through pipelines, global demand has largely been met through emergency reserves. For example, the Trump administration released 172 million barrels in March. That might seem like a lot but, according to another report by Goldman Sachs, stockpiles are being decreased by 11-12 million barrels daily. JP Morgan said about 580 million are readily accessible.

According to a military historian who shared the contents of the JP Morgan report, "these stockpiles are being depleted rapidly, which traders warn is leading to a 'tipping point' by the end of May," he said. "From the start of June, JP Morgan says, oil stockpiles will be under 'operational stress' and will reach an 'operational floor' by the end of June." Bottom-line, he said: "Traders are warning of oil prices of $200 to $250 per barrel, but say 'you can pick a number ... We will just not have any buffers.' Some estimates, based on a worst case scenario (such as the Arabian pipelines being disabled by new Iranian attacks) go as high as $372."

Iranian strikes hit an oil facility in the UAE today, an escalation of the war. So, for me, the question is: when is optimism something more like delusion? An attorney from the first Trump White House told a British news outlet that he's "a madman." Ty Cobb said that Trump has "long-running malignant narcissism" that's become dangerous with the onset of dementia (not his word). "The narcissism has always been an issue for him," Cobb said, "but in an absence of the impulse control the frontal lobe provides, it has unleashed furiously, which is why we see revenge, corruption, delusions of grandeur and [alleged] abuses of power."

Let's add burning up the global economy to that list.

More propaganda, less justice

Former Fox anchor Jeanine Pirro is prosecuting Cole Allen's case. The US attorney for the District of Columbia released a video that she says shows him shooting at a Secret Service officer as Allen runs through a security check at the White House Correspondents Dinner.

Just one problem: the video doesn't show him shooting.

The video shows the Secret Service officer shooting. His muzzle flare can clearly be seen four times. But no muzzle flare can be seen coming from Allen's shotgun. (Pirro's office put a circle around each muzzle flare from the Secret Service officer's gun, but did not do that for Allen's gun, apparently because there is no muzzle flare.) Her office says a Secret Service officer saw Allen fire. It says officers hear a loud gunshot. It says a spent cartridge was retrieved from his gun. It says a single buckshot pellet was recovered from the scene.

But evidence so far presented in court does not show what Pirro says it shows.

Cole Allen isn't innocent. It's a crime to threaten to assassinate government officials, not only the president. It's a crime to run through Secret Service security, especially with a gun. It's a crime to scare the hell out of everyone the way he did. I don't know the exact federal statutes Allen has broken. That's for Pirro's office to figure out. But I do know that should be enough.

It's not, though, because the president and his allies want the facts of Cole Allen's case to fit into a story that they want to tell about their enemies. "Political violence is coming largely from one side of the aisle," Vice President JD Vance said. He added that "the president has now faced three serious attempts on his life," as if the Democrats had anything to do with his would-be assassins, as if the Democrats themselves have not seen their own gunned down.

This propaganda is why Jeanine Pirro is getting ahead of her prosecution. It's why she is alleging the existence of evidence before her office presented that evidence to a court. The most important thing is not the careful gathering of facts, in accordance with proper police procedure, for the advancement of justice. It's having a reason to smear the Democrats.

Propaganda is also why Pirro's prosecution is a mess. If Allen assaulted a Secret Service officer, why hasn't he been charged with assault? Why did follow-up court documents omit the allegation that an officer was shot? If a pellet was found "intertwined with the fiber" of his bullet-proof vest, where are the other pellets? (Buckshot cartridges can have around nine balls.) And why did she refer to a pellet as a bullet? “It’s definitely his bullet," she told CNN.

Welcome back, stagflation!

Mark Zandi, of Moody's, reported today:

"We have a year’s worth of economic data since Liberation Day when President Trump announced much higher tariffs on most imported goods and countries, and the data are definitive; the tariffs have done significant damage to the economy. Since that day, job growth has come to a standstill, with only the non-traded healthcare industry adding meaningfully to payrolls. Also, since that day, inflation has accelerated, with the consumer expenditure deflator increasing at a 3% year-over-year pace, up from 2.5% before the tariffs and well above the Federal Reserve’s target of 2%. And the trend lines don’t look good, especially as the economic fallout from the Iran War hits with full force. The higher energy and other commodity prices caused by the war threaten to do even more economic damage than the tariffs, further undermining growth and pushing inflation higher. The US economy is resilient, but just how resilient is set to be tested."

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