Markets Flash Back to the Past || May 1, 2026

Yes, markets have been completely bonkers. Completely disconnected from reality! The fact that they move at all from the crazy rantings of a madman on Truth Social shows how ignorant most traders are.

Another wonderful video from Mr. Chicken Little. All u rubes, better run for the hills & get in your T-p's.

I think part of the financial market height is also attributable to the whole AI/data center/chip market bubble that has overly optimistic investors pouring investment funds into certain companies. Intel, as an example, had much better then expected Q1 returns resulting in a positive move in their stock price. Other AI related companies are scewing the markets. But, as suggested in the video, as soon as the lack of oil feed stock really hits companies then I'd imagine even the AI sector won't be able to maintain its growth. Luckily for the US, our crude comes from Canada. Doesn't that suggest a maintained supply for the US, though at ever increasing prices?

I don't find this particular video on Peter's YouTube site. Can it be downloaded to YouTube? This is the #1 video of his I would like to share with a few folks.

If America tries to decouple from the oul market, we will be isolated (which we are already thanks to Cheeto) but with a different reason. Our dear president may get his wish for trillions for defense because we will get attacked for being the big pig in the barn.

Oh my. Back to Gloom and Doom. Buy shares of Giant (Taiwan).

Mike Green has talked extensively of how passive investing, which represents close to 60% of the market now, has distorted valuations and lead to a loss of price discovery. Reason being is when people sign up for their 401k plans they are defaulted into buying the major indexes with their paychecks no matter the price. So there is this constant wall of money buying say the S&P 500 with most of the money going towards the largest companies. We see this with the death of the active manager and the biggest companies commanding an ever growing share of the market.

This whole situation reminds me of Looney Tunes cartoons where the character falls down only once he looks down after he walks off a cliff.

I've been successfully trading geopolitics since covid, and run a small hedge fund that was long crude going into this war. I'll offer my perspective as to why markets are doing what they're doing: 1) You are correct that markets are awful at predicting in paradigm shifts. The start of AI, covid, Europe's military waking up, etc. Finance bros are ironically not good forecasters. 2) Lots of things have made this shortage "better than feared": The Saudi bypass (~4 Mb/d), rationing (mostly in China ~3 Mb/d), work-from-home optionality (lowers the price before demand destruction), no real evidence the strait was mined, etc. 3) Lots of people don't appreciate the difference between commodity futures and equities. Crude can go to $200 / bbl and equities can still (very unlikely) go up if AI makes a big enough leap forward (it recently has improved a lot). One is the price of consumption, the other is a prediction of the present value of future cash flows. Equities *should* be very long-term focused. 4) The MAD scenario of mutual (oil) infrastructure destruction looks to be off the table. If this changes, expect both equities and futures to react. This is obviously a much bigger long-term threat than dueling blockades. 5) The economic incentives are what they are. The IRGC probably can't survive without oil exports, so absent a string of very bad decisions, the blockades will go away eventually. Maybe the IRGC keeps their Ayatoll Booth, maybe they don't. We don't need 100% freedom of navigation for things to go back to normal-ish. 6) The world has a lot of workable reserves, although the maximum discharge rate of SPRs is unknown (the U.S.'s appears to be about 1.4 Mb/d). 7) Prediction markets are currently pricing in this to last through June. Equities and especially oil futures look more optimistic to me. 8) In markets, pessimists usually get clicks and optimists usually make money. Meaning the latter group usually moves prices. 9) On fertilizer I could be way off (no position), but as a percentage of total nitrogen fertilizer produced by elemental mass, I think the Gulf is around 7%? It's a much larger percentage of total fertilizer exports. It seems to me there are a lot of substitution options here, and probably inventory that can be drawn down. This said, we're long crude. Even if the strait opens tomorrow it'll be a while before production restarts. Then there will be a lot of inventory to refill, and probably a greater demand for SPRs down the line. This is not financial advice.

I always find your posts informative and thought provoking. This one in particular. John Cochrane talked about the market reaction today and fears about potential government ham handed responses. Aside from a reopening of the Strait and a gradual pursuit of increased supply do you see positive actions nations could undertake to mitigate the negatives of our supply problems?

Traders are like philosophers they think about their own thinking.. also Michael Howell has a great quote "money that is anywhere must be somewhere" do you think the market is taking chips of the table to invest in the real economy when its in flux? Picture any booming economy and lets do an exercise, Vietnam is now the fasting growing in sea yet the VNM ETF that tracks its largest equities doesn't budge.. why? You could argue foremost that as a transitioning frontier economy financial markets are immature and unvetted.. but the more obvious answer is that money in the real economy is much more effective at compounding than it resting in equity. Also if SK cant get fuel out of the Persian gulf, memory demand from samsung and sk hynix will have to move to micron; whatever way you square it you really don't get the kind of geopolitical and economic reform that peter wants without a crisis that acts a forcing function.

You guys are making me so optimistic for the future. Can’t wait for 2027😳

Sorry, “in the wake of supplied dislocations

Peter: Can you do a session on whether Biofuels, including Renewable Diesel, ethanol, and sustainable marine, fuels and sustainable aviation fuels can play a significant role in meeting energy demands in the week of the supply dislocation with the Iran war for petroleum based fuels.

Seriously though: the markets are being propped up by the AI hopium, a house of cards that is either going to be an enormous gravy train or a catastrophic failure. My money is on failure due to many issues (chip availability, the ponzi scheme of debt financing within the AI development circle, the fact that the current tech is auto-correct on a shit ton of steroids). With the sunk cost fallacy, however, neither the AI universe for Wall Street can afford to have this go bust so the investors are looking for any signal at all to keep the party going. Maybe this impending energy / supply crisis will be the trigger for the AI apocalypse.

But AI!!! (*sarcasm*)

I’m wondering when Donald will pull the plug on crude exports.

It is unfathomable that “the market,” or that the “smart money,” doesn’t assess the downside from the coming oil shortage or the AI implosion. Of course, some do, and some don’t. What are the real risks and downsides? I respect Peter, but perhaps he’s not always the smartest person in the room, or in the market? The markets will crash. They always do. Perhaps smart money diversifies? Perhaps crisis spurs innovation and the adoption of new technologies? Perhaps the sky will not fall? If it does, perhaps we’ll sweep up the mess? I support the interruption of Iran’s quest for a nuclear weapon. Strangling them economically seems to be the smart move. If they had the bomb, that would likely precede a mess too big to easily clean up, and the end of Israel. And with a little time, the US would be within their reach. That is unfathomable.

I know Peter doesn't discuss Climate Change, but a 20 % Plus Plus drop in Fossil Fuel green house gas emissions is going to have some interesting impacts.

I'm afraid the day when we can quote Epictetus and say, "I told you so", is at hand. And we won't get any more joy in saying it then Epictetus did.

" I can guarantee you it's going to involve rationing." Where? By whom? In what manner?

If the US in particular is viewed as a safe haven, then that rationalizes a resilient stock market. The opposite is true for vulnerable economies. The expectation that globalism breaks down here is tested because these are the elements of new bilateral trade and negotiation as more vulnerable states go into demand destruction. At the same time I expect a significant immunity from any drone strikes as the cease fire has given oppty to put anti drone and forward plans in place to thwart a mass attack. And eventually I expect Iran to get properly invaded, this time for real, and by everybody at once even if, for the allies, those are relatively small forces integrated into a total attack plan that means taking over most of Iran's territory outside tehran. Insane? In the membrane.

Some years ago I read The Big Short. I recall one theme being that people didn't want to believe that the good times in the mortgage market would end. By the time people realized what was happening, we had already fallen off the cliff. Some of those big companies selling credit default swaps went under because they didn't understand the state of risk they were insuring. Sounds like we're there again in that we don't want to "believe" we've already fallen off the cliff.

Mass Retardation in the markets

Who said “War is good for business” ?

Good keep wearing sunglasses

May 30, 2026. So it was a typo, or it wasn't? 🤔

So the future is finally here. And it is not pleasant. Yeah, this is going to be a frantic year.

So will a lack of oil cause World War One hundred and eleven (III) or avert it because there will be no oil available to fight it?

Really interesting. Markets are pretty diverse, more so now than in the past. Bond and oil markets are really scary, as any informed retiree will tell you. Metals, finance, and tech just keep plugging away. Does the whole system collapse? Hopefully not. Avoiding debt, holding onto real estate, and having reserve liquidity are necessary for financial survival. Emerging markets will present opportunities. Help out your communities, stay sober, and keep your powder dry.

I start my morning by taking my vitamins, drinking my coffee and listening to horrors beyond comprehension

Peter didn’t specify what country the rationing would be in, but I don’t think it’s gonna be the United States. Tariffs on Canadian and Mexican oil are more likely to create regional spikes or shortages but at least in the US there won’t be cause for rationing

Everything must be repriced starting with the risk premium.

Two words: inflation

May 30, 2026?

Great video - thanks for covering this topic.

I struggle with the explanation of why markets haven't reacted basically coming down to ignorance. Not that I have a better explanation. And having worked in finance for 30 years, I know that world is not lacking in terms of self-confidence, which when you couple that with ignorance, well it's not a good combo.

Facsimile of our world reality overall…please stand by.

Thinking AI would help solve this is like inviting a vampire into a blood bank.

Turns out the Nile isn't just a river in Egypt.

I believe the correct term is “cognitive dissonance”.

Oh, and are we in a time warp too? MAY 30? GFC2 AND DEPRESSION 2.0 ON THE WAY!

It seems to me that too many folks never had History Class and have NO UNDERSTAND of who IRAN WAS: PERSIA; P E R S I A; ever READ ABOUT THEM? THEY ARE NOT ROLL-OVER PUSSIES and NEVER HAVE BEEN! heeeeelellloooo WTF?

Well, that was a cheery note to start the day. Thanks! While I agree with Ziehan's analysis of the oil paradigm shift, there is an alternative explanation of why the stock market seems to be gloriously rising above the din of Apoplectic disaster to newer highs: AI. Clearly, we are in an AI boom very similar to the PC boom of the '90s. AI trumps everything! (Sorry about the Trump thing.) I've read there are seven companies in the world driving the US AI stock market boom, the Magnificent 7: Apple, MS, Amazon, Tesla, Google, Facebook, NVIDIA. They drive at least 40% of the S&P. When the chickens come home to roost there is going to be a really big crash as the oil shock becomes reality, the AI boom flops, and the bank loan crisis domino falls (yes, there is one). As with all crashes, timing is everything. When it will happen, no one really knows. But when it does, it will be deep, hard and fast. In the meantime, maybe, there are fortunes to be made riding AI to the top. BUY! BUY! BUY!

You would think the markets would go down but at this point I think investors would rather hold any assets at this point rather than hold USD due to the fact the inflation is about to go ballistic. Thoughts?

A buddy of mine works for, well let's say it's a bank that isn't international. It is a bank of America. In their securities. And he has been to Peter's presentation more than once. And he has said a few things that confirm a lack of understanding of American security.

Well, lucky for everyone, we have the hero we need right now for everyone: #Coalie2026!

I read that when things become more scarce they appreciate in value This is why things are becoming more precious (company assets!) as oil is gone not the opposite It is not the zombie apocalypse yet

May 30th? Did we jump forward into the future?