Spooky

Roughly 20% of the world's oil & gas went through the straight of Hormuz which has now ground down to a halt and energy infrastructure in the gulf has been damaged and could take 3-5 years to repair. The war is considered the largest oil shock in history. Pretty simple to see that unless they can get the straight open again quickly, which is unlikely, energy prices will remain elevated for a long time which will feed into inflation. It is also having an impact on other products like helium and fertilizer. US is in a better position than most but that is a big blow. Fed should probably look through the shock when setting rates but Powell came out lately and said they can't ignore elevated inflation for long. I'm not a macro forecaster and I'm not betting accordingly but the above seems logical to me as one scenario to consider. I don't know why anyone would want to be Fed chair TBH.

I would hate to be Warsh right now coming in to lead the Fed when the economy is facing down stagflation due to the Iran war. Going to be some hard decisions ahead.

Best poutine for me is just the classic fries, cheese curds + gravy, forget the other toppings. Quebec does it the best for sure. https://www.youtube.com/watch?v=xVmPjYEus2g&list=RDxVmPjYEus2g&start_radio=1

I'm in the camp of not trying to make macro predictions. It is just not possible to do so with any kind of edge. Even people like Bridgewater / Ray Dalio only have a 50/50 track record. Essentially flipping a coin. The global economy is such a complex adaptive system it is impossible to predict what will happen in the short term. However, it is important to stress test your stocks / portfolio for different economic environments. I like this framework from Bridgewater which sets out four different mutually exclusive scenarios: I am running a more concentrated portfolio so like to own companies with excellent balance sheets that can weather any economic conditions coming their way.

I think owning gold going into this on the bet that this looks like the 1970s is also a mistake. Gold has already run up so much the last while and you are actually seeing people dump gold, including, potentially some of these central banks that have been accumulating it.

This is a good take. Looking at straight GDP per capita between US and Canada without digging into it further is naive. Sure, Canada's productivity has not been great, we have always had a 20% productivity gap with the US but so has the rest of the G7. The US GDP per capita figures don't include all the illegal immigrants which were the backbone of many industries providing cheap labour. In terms of legal migration, Canada, a country 10% the size of the US, was letting in 4x the amount of immigrants as the US in terms of percentage of population. These migrants need time to integrate into the economy, there will be a lag until they can reach full productivity. The good news is most of these migrants are high skilled workers. We have also always had a problem with brain drain in Canada where some of our best and brightest people are attracted to the US. I'm guessing this has and will not be as big of an issue, the US now starting to run into a brain drain issue of its own where scientists etc. are leaving. If you are the most talented people in the world who wants to go the the US anymore? I like the direction that Canada is on much more than the US. Taking the opposite approach of trying to build more international relationships and free trade agreements. It will be a bumpy road ahead but we will be better off in the long run compared to the US nuking its international relationships.

I am. I'm downtown near Trinity Bellwoods.

reporting for duty. Are there any Canadian grown AI companies out there?

I like it. Berkshire + Insurance + Japan? Sign me up.

We are so lucky to have had role models of such high integrity to look up to in Buffett and Munger. I am worried for future generations.

Looks like it is a stake in Tokio Marine.

Totally agree! That’s why I don’t understand those gold bugs. It pays to be an optimist.

They also have the ability to threaten oil & gas infrastructure in the region with drones etc. I'm not really sure how this will play out, odds of regime change through bombing alone are low. If the regime survives in some capacity they can continue to cause some havoc on the global economy given how important the region is.

Yes, let's hope this doesn't lead to the end! Good luck!

QatarEnergy, the operator of the Ras Laffan facility, said it will take three to five years to repair and force it to cancel long term contracts with Italy, Belgium, Korea and China. The volume lost is about 17% of Qatar's total capacity. Gas prices in Europe and Asia going to be higher for a while.

The International Energy Agency has noted: “The war in the Middle East is creating the largest supply disruption in the history of the global oil market.” https://www.iea.org/reports/oil-market-report-march-2026 FT: ‘Armageddon scenario’ for gas markets as Qatar hit by missiles https://www.ft.com/content/5b66d91f-f94a-4ea1-b90f-ce62ccb15d50?syn-25a6b1a6=1

Feels strange trying to profit off of the end of the world... but hey, what else are we gonna do?

Iran just struck a facility in Qatar which 20% of the world's LNG flows through. I doubt this will be a nothing burger...

Cash could become king again… we will see.

I probably bought an even smaller slug… two shares of BRK.B haha. Glad I’m on the same wavelength as Greg, Parsad and GFP. Great minds… Very happy with Abel buying more stock as well as Berkshire buying back more as well.

This is what I have been thinking as well.

Ya I find Torsten Slok and Apollo to be interesting to listen to but not the best... even the chart they posted is hard to gather signal from it. Guess it is hard to come up with meaningful insights each day. Thought it was worth flagging that bond markets may be starting to move more towards the AI recession / deflationary scenario... something to watch.

Latest daily spark for Apollo claims markets are starting to believe the techno-optimists’ view of the world, rather than the more measured Fed and economist view and rates investors are now pricing in rapid AI adoption that will push the unemployment rate higher and warrant many more Fed cuts by December 2026. Torsten doesn't agree with this view and thinks AI adoption will take much longer than 12-18 months though. https://www.apolloacademy.com/fed-pricing-reveals-market-expectations-about-the-ai-adoption-pace/

Nice call gfp. Where do things go from here? There is so much noise out there these days.

Thanks for sharing. Loved this paragraph haha: Despite the macroeconomic community struggling to forecast 2-month-forward payroll growth with any reliable accuracy, the forward path of labor destruction can apparently be inferred with significant certainty from a hypothetical scenario posted on Substack: The 2028 Global Intelligence Crisis.