War Update

Note to self: Substack spellcheck does not extend to headlines. Also, Israel is not spelled “Isreal”.

Iran has had no response to the sweeping Israeli attacks that started last night and continue today. The Israelis appear to be operating with impunity within Iranian airspace. If that’s the case: game over.

Every minute these conditions hold true is just more proof that the Iranians have no weapons with which to respond. I’ve seen a number of press releases from Iran about how they are going to attack, but I’ve only read about a few drone launches that have all been intercepted.

In short, I think the Israelis have significantly weakened the Iranian defenses since October 7th, 2023 and this is just taking advantage of that.

If this is true, this war is over, and wasn’t even a war.

Investment Implications

I’ve been slowly buying back into crypos this morning as Bitcoin has put in a strong hammer candle and most of the larger altcoins have held at support. I’m about 64 percent long again.

Chart 1: Bitcoin Candlestick

Source: Bloomberg

If Bitcoin can go green today (it’s only down 84 basis points as I write) that would be a major turning point in crypto history. Bitcoin would have taken on at least some safe haven status. (I know, it’s a 50 vol “safe haven” but it’s down less than the S&P 500 Index is in the premarket.)

Separately, The Wall Street Journal reported (paywalled) that Walmart and Amazon are exploring issuing their own stablecoins. But of course. Visa and Mastercard are two of the biggest monopolies in the world. Stablecoins solve that. Walmart and Amazon margins are razon thin, if they could increase them by two percent or more due to cutting out credit card intermediaries, it would translate into $100+ billion in increased market cap.

Remember, stablecoins are the gateway drug into crypto. If all of a sudden 100 million people are holding some Bezos Bucks, why wouldn’t they exchange them for some pretend internet money?

Oil spiked up to +14 percent last night and is back down to +8.4 percent. I’m going to sell half the XLE position at the open. (It looks to open up a little over three percent today.)

U.S. Treasury bond yields are up across the curve. This is another risk-on signal. I’m old enough to remember when people bought bonds when wars broke out.