For the week 3/9-3/13

[Posted 4:30 PM ET, Friday]

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Edition 1,403

Tale of the Tape….

Oil / West Texas Intermediate (WTI)

Friday, Feb. 27…$67.30
Friday, Mar. 13…$98.10

Nationwide average prices at the Gas Pump [Source: AAA]

Friday, Feb. 27…regular gas $2.98…diesel $3.75
Friday, Mar. 13…regular gas $3.63…diesel $4.89

Amid the endless mixed messaging and strategic incoherence, this morning at a press briefing, Defense Secretary Pete Hegseth brushed aside concerns that the effective closure of the Strait of Hormuz would continue being a problem for the U.S. and the world much longer.

Iran has been “exercising sheer desperation in the Strait of Hormuz,” Hegseth said.  “We have been dealing with it. Don’t need to worry about it.” [Emphasis mine.]

Hegseth criticized media reports that claimed that before attacking Iran, the U.S. military lacked a plan to reopen the Strait.

“Of course, for decades, Iran has threatened shipping in the Strait of Hormuz. This is always what they do, hold the Strait hostage,” he said.

“We planned for it. We recognize it,” Hegseth told reporters.

Hours later the Wall Street Journal reported that the Pentagon is moving a Marine expeditionary unit and more warships to the Middle East.  The secretary approved a request from Centcom for an element of an amphibious ready group and attached Marine expeditionary unit, typically consisting of several warships and 5,000 Marines*.

*Literally, minutes before posting, the AP is reporting 2,500 Marines will be sent.

Ah, Mr. Secretary?  Was this the plan all along…realize after two weeks (and months of planning beforehand), that you needed thousands of Marines, no doubt to be used to help secure the Strait?

Meanwhile, President Trump, in an interview today, said it is unlikely Iranians will rise up soon against the regime and that he would “feel it in my bones” when the Iran war should end.

Recall, on Feb. 28, in announcing the start of military action, the president told the Iranian people to seize power, “it will be yours to take.”

As it all went down this week, day by day….

President Trump on Truth Social, Sat. Mar. 7, 6:11 AM ET:

“Iran, which is being beat to HELL, has apologized and surrendered to its Middle East neighbors, and promised that it will not shoot at them anymore. This promise was only made because of the relentless U.S. and Israeli attack. They were looking to take over and rule the Middle East.  It is the first time that Iran has ever lost, in thousands of years, to surrounding Middle Eastern Countries. They have said, ‘Thank you President Trump.’ I have said, ‘You’re welcome!’  Iran is no longer the ‘Bully of the Middle East,’ they are, instead, ‘THE LOSER OF THE MIDDLE EAST,’ and will be for many decades until they surrender or, more likely, completely collapse!  Today Iran will be hit very hard! Under serious consideration for complete destruction and certain death, because of Iran’s bad behavior, are areas and groups of people that were not considered for targeting up until this moment in time.  Thank you for your attention to this matter! President DONALD J. TRUMP”

Iranian President Masoud Pezeshkian rejected a demand by the U.S. for an unconditional surrender while apologizing for the attacks on regional countries even as its missiles and drones flew toward Gulf Arab states, suggesting Tehran’s political leadership could not exercise full command over the Islamic Republic’s armed forces.

Pezeshkian, a member of the leadership council, dismissed Trump’s call for Tehran to surrender unconditionally, saying: “That’s a dream that they should take to their grave.”  But he also said he instructed the military not to attack any nation that isn’t striking the Islamic Republic.

Saturday afternoon, Trump posted on Truth Social:

“The United Kingdom, our once Great Ally, maybe the Greatest of them all, is finally giving serious thought to sending two aircraft carriers to the Middle East. That’s OK, Prime Minster Starmer, we don’t need them any longer – But we will remember. We don’t need people that join Wars after we’ve already won! President DONALD J. TRUMP.”

Trump told reporters on Air Force One on Saturday there would have to be a “very good reason” for the U.S. to deploy ground troops to Iran, adding that Iranian forces would likely have to be so decimated they wouldn’t be able to resist.  Trump also said he had ruled out the idea of armed Kurdish forces entering Iran to join the fight.

Israeli warplanes pounded Beirut and Tehran last Friday as Iran launched another wave of retaliatory strikes against Israel and Gulf countries that host U.S. forces.

Israel renewed its assault on southern Lebanon early on Sunday, targeting commanders of the Lebanese branch of Iran’s Revolutionary Guards’ Quds Force, after Israeli prime minister Netanyahu promised “many surprises” for the next phase of the conflict.

At least 60 were killed Saturday and Sunday in Israeli strikes, the Lebanese health ministry said.

The Israeli military said it would “not allow Iranian terrorist elements to establish themselves in Lebanese territory.”

Lebanon’s health ministry said that almost 400 people had been killed by Monday, including 83 children and 42 women.

On Sunday, Israel confirmed two of its soldiers were killed in combat in southern Lebanon – the country’s first fatalities since hostilities resumed.  Seven soldiers were also wounded over the weekend.

The latest strikes in Lebanon followed an Israeli attack on Saturday on an oil storage facility in Tehran.

It appeared to be the first time a civil industrial facility has been targeted in the war.

Elsewhere, Kuwait authorities said two border guards were killed when a swarm of missiles and drones hit the Gulf country.

An Iranian drone attack caused “material damage” to a desalination plant, Bahrain said on Sunday morning.

Hundreds of desalination plants sit along the Gulf coast, and the Arab countries in the region rely heavily on the facilities for drinking water.  Bahrain’s water authority said the attack had no impact on water supplies.

On Sunday, President Pezeshkian said Iran’s adversaries had drawn “naïve conclusions” from his earlier remarks, adding Tehran is “compelled” to respond to aggression carried out from other countries.

The UAE and Kuwait started cutting oil production.  It is not an easy process to restart production.

China, which is a significant buyer of Iranian oil, called for a ceasefire.  But Foreign Minister Wang Yi on Sunday signaled that Beijing won’t allow the conflict to affect its relationship with Washington ahead of a planned summit in Beijing.

Iran’s Assembly of Experts elected the country’s next supreme leader, the semi-official Mehr news agency said citing council member Ahmad Alamolhoda, without providing a name.

Evidence suggested the deadly blast at an Iranian elementary school that Iranian officials say killed 175 people was likely a U.S. airstrike.

President Trump blamed Iran when questioned about the strike while aboard Air Force One on Saturday.

“In my opinion, based on what I’ve seen, that was done by Iran,” Trump said, adding that Iran was “very inaccurate” with their munitions targeting.

“They have no accuracy whatsoever,” he said. “It was done by Iran.”

Defense Secretary Hegseth added that “The only side that targets civilians is Iran.”  He said that an investigation into the bombing is ongoing.

Multiple reports from the New York Times, Wall Street Journal, Reuters and others, citing unnamed U.S. sources, then reported that U.S. military investigators believe it is “likely” that U.S. forces hit the girls’ school.

Later, according to U.S. officials and others familiar with the preliminary findings, the United States was responsible for the strike, the result of a targeting mistake by the U.S. military, which was conducting strikes on an adjacent Iranian base of which the school building was formerly a part, the preliminary investigation found.  The target coordinates for the strike used outdated data provided by the Defense Intelligence Agency, according to multiple reports.

But these are preliminary findings, and don’t answer the question, why wasn’t the outdated information double checked.

Iran projected defiance in the face of expanding U.S.-Israeli attacks on Monday by naming a son of its slain supreme leader as his successor, disregarding warnings from the Trump administration, while a surge in oil prices signaled growing alarm over the war’s effect on the global economy.

The new supreme leader, Mojtaba Khamenei, was appointed by a committee of senior clerics after President Trump declared that he was an “unacceptable choice” and amid Israeli threats to kill Ayatollah Ali Khamenei’s successor.

Iran’s military and hard-line political forces trumpeted the selection and pledged allegiance to the new supreme leader. But in Tehran, opponents of the government could be heard chanting “Death to Mojtaba” from their windows – reflecting widespread albeit muted dissent.

But he was not been seen in public nor issued any written statements for days after the announcement.  We learned he was possibly injured in day one of the strikes, with injuries to his legs and possible facial wounds, per U.S. and Israeli reports.

Oil prices Sunday night briefly surged to almost $120 per barrel, their highest level since the Covid pandemic, but then backed off below $100 during trading on Monday.

As the conflict entered its 10th day, Iran continued to retaliate with attacks on Israel and U.S. allies across the Persian Gulf.

At least one person was killed in Israel during an Iranian missile attack on Monday morning, raising the death toll in the country to at least 11.  Saudi Arabia’s defense ministry said Monday it had intercepted attacks headed toward the kingdom’s massive Shaybah oil field, as well as thwarted drones over northern Riyadh, the capital, and three ballistic missiles targeting a Saudi air base.

The State Department said on Sunday that it had ordered nonemergency American personnel and family members to leave the U.S. embassy in Saudi Arabia – the latest diplomatic evacuation.

In Bahrain, the state-owned energy company declared that it could no longer fulfill its contracts, citing the ongoing conflict and a recent attack on its refinery complex.

Iran warned the United States and Israel against attacking Kharg Island, a land mass in the northern Persian Gulf that is the key energy hub for Iranian oil.  Esmail Baghaei, a spokesman for the Iranian foreign ministry, said at a news conference that Iran was a “graveyard for foreigners” when he was asked to respond to reports that the United States could target the island.  Kharg has not been hit in the conflict but over the weekend, the U.S. and Israel expanded their targets to include Iran’s oil infrastructure.

Anger grew in Persian Gulf nations over the civilian toll of Iranian retaliatory strikes.  Bahrain’s health ministry said that 32 people had been injured, including children, in an Iranian drone strike on Monday in the island of Sitra, near Manama, the capital.  In Qatar, the foreign ministry blamed Iran for the deaths of two civilians on Sunday in Saudi Arabia, saying that an attack had targeted a residential facility.

Monday afternoon, President Trump asserted the U.S. would not allow Iran to continue to restrict global oil supply through its virtual closure of the Strait of Hormuz.  Tehran said following the initial U.S.-Israeli strikes that it would attack any ship attempting to pass through, effectively closing it to traffic.

“I will not allow a terrorist regime to hold the world hostage and attempt to stop the globe’s oil supply.  And if Iran does anything to do that, they’ll get hit at a much, much harder level,” Trump said at a press conference.

“We’re looking to keep the oil prices down,” Trump added.  “They went artificially up because of this excursion.”

At the same time, he argued the bottleneck isn’t as much a concern for the U.S. as it is for other countries, especially China.

The president initially gave a timeline of four to five weeks soon after the initial strikes began on Feb. 28.  But he’s faced pressure on the exit strategy amid mixed messaging from his administration, to say the least, and the deaths of 7 U.S. service members.

Trump said the “excursion” would end “very soon.”  But he said it wouldn’t end in the coming days or by the end of the week.

He said the U.S. is “achieving major strides toward completing our military objective, and some people could say they’re pretty well complete.”  His remarks came after an account on X for the Pentagon posted earlier in the day that read, “We have Only Just Begun to Fight.”

Trump said he supports the idea of “internal” regime change within Iran, walking back comments calling for the overthrow of the regime.  He said his vision is similar to how the U.S. handled Venezuela, removing former President Nicolas Maduro but leaving the regime intact after the new leaders agreed to U.S. economic demands.

He said he was “disappointed” to see Iran choose Mojtaba Khamenei as the next leader.

Also Monday, Trump said he held a phone call with Russian President Putin to discuss the war and prospects for peace in Ukraine, hours after the Kremlin chief warned that a global energy crisis threatened the world economy.

“I had a very good call with President Putin,” Trump said at the press conference, adding that Putin wanted to be helpful on Iran.

“I said, ‘You could be more helpful by getting the Ukraine-Russia war over with. That will be more helpful.’”

The administration is considering reducing oil sanctions on Russia, three sources familiar with the planning said.

Talks could cover broad sanctions relief as well as more targeted options for certain countries, such as India, to buy Russian oil without fear of U.S. penalties, including tariffs.

The move would be intended to boost world supplies of oil, but could also complicate U.S. efforts to deprive Russia of revenue for its war in Ukraine.

“We’re also waiving certain oil-related sanctions to reduce prices. So we have sanctions on some countries. We’re going to take those sanctions off until this straightens out,” Trump told reporters, without identifying the countries.

“Then who knows, maybe we won’t have to put them on; there’ll be so much peace.  But when the time comes, the U.S. Navy and its partners will escort tankers through the Strait if needed.”

The Wall Street Journal (and others) reported late last Friday (after I had posted) that Russia is sharing with Iran information about the locations of U.S. military forces in the Middle East that Tehran could be using to help guide its missile attacks in the region, “according to U.S. officials and a former Russian intelligence office, in the strongest indication yet of cooperation between the two nations” during the conflict.

War Secretary Pete Hegseth insisted that U.S. forces are not in danger amid reports that Russia is sharing intelligence with Iran, telling “60 Minutes” that the U.S. is “tracking everything” and feeding it straight into battle plans.

“We’re aware of who’s talking to who, why they’re talking to them, how accurate that information might be, how we factor that into our battle plans…so we know what’s going on,” Hegseth continued.

Addressing Republican lawmakers earlier Monday, Trump, talking about the conduct of the war, said: “Together with our Israeli partners, we’re crushing the enemy in an overwhelming display of technical skill and military force.”  At the press conference, the president claimed the U.S. had hit 5,000 targets in the country, said Iran’s missile capability was down to 10%, and that drone launches from the country had decreased 83%.  The U.S. military objectives could be described as “pretty well complete,” Trump said.

The president said that while the U.S. had sunk more than 50 Iranian ships, a prolonged conflict could see the U.S. bomb additional “important targets” including electricity production facilities.

Trump on Truth Social, Monday, 8:30 PM:

“If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far.  Additionally, we will take out easily destroyable targets that will make it virtually impossible for Iran to ever be built back, as a Nation, again – Death, Fire, and Fury will reign upon them – But I hope, and pray, that it does not happen! This is a gift from the United States of America to China, and all of those Nations that heavily use the Hormuz Strait.  Hopefully, it is a gesture that will be greatly appreciated. Thank you for your attention to this matter! President DONALD J. TRUMP”

Tuesday, Iran launched new attacks at Gulf Arab countries as it kept up the pressure.  Incoming missile sirens sounded early in the morning in Dubai, the United Arab Emirates, and in Bahrain, while Saudi Arabia said it had destroyed two drones over its oil-rich eastern region and Kuwait’s National Guard said it had shot down six drones.

The Pentagon reported “approximately 140 U.S. service members have been wounded over 10 days of sustained attacks” as of Tuesday.  Eight were severely wounded.  There have been seven deaths

Reuters reported Wednesday that at least 14 ships have been attacked in the Strait of Hormuz, including three overnight Tuesday/Wednesday.  The most recent vessels included a container ship, a dry bulk vessel and a bulk carrier.

“While there have been some voyages through the waterway in recent days, the majority of shipping traffic remains on hold with hundreds of ships anchored,” the wire service reported.

The U.S. Navy says it won’t escort ships through the Strait just yet because the waterway is still too dangerous.  That update came shortly after Energy Secretary Chris Wright issued his erroneous claim that the Navy had “successfully escorted an oil tanker” through the Strait – but it wasn’t true, Wright later deleting his tweet.

CBS News and CNN reported Tuesday that Iranian forces had begun mining the Strait.

President Trump responded by ordering a new boat-strike campaign for the U.S. military, this time taking out a reported 16 boats the administration said were capable of laying mines.

Iran’s military says it is now targeting banks across the Middle East that do business with the U.S. or Israel, and advised people in the region to stay at least 1,000 meters away from such buildings, al-Jazeera reports.  Dubai could be at increased risks as it is “home to many international financial institutions,” France24 reports, noting separately Tuesday, “Two Iranian drones hit near Dubai International Airport, wounding four people though flights continued.”

Iran also claimed it will now target offices across the region associated with Google, Microsoft, Palantir, IBM, Nvidia, and Oracle for those firms’ alleged assistance with the U.S.-Israeli war effort.

After around 10,000 U.S. and Israeli strikes, Iranian officials still refuse to surrender.  “Get ready for the oil barrel to be at $200 because the oil price depends on the regional security, which you have destabilized,” an Iranian spokesman declared Wednesday.

At a campaign-style rally in Hebron, Kentucky, Wednesday evening, President Trump said that “we won” the war but that the U.S. will stay in the fight to finish the job. “You never like to say too early you won.  We won.  In the first hour it was over.”

Oil surged anew overnight Wednesday after reports that two oil tankers were hit in Iraqi waters, with terrifying video, in the latest in a string of attacks on ships in the Persian Gulf.  Brent crude (the international benchmark) hitting $100 and then doing so again during the day Thursday, with West Texas Intermediate at $96/$97 early on.

Iran’s new Supreme Leader Ayatollah Mojtaba Khamenei issued his first statement on the war, saying that the leverage of closing the Strait of Hormuz should be used, and that attacks on Iran’s Gulf Arab neighbors will continue.  Khamenei also called on Gulf Arabs to “shut down” U.S. bases, saying promised U.S. protection was “nothing more than a lie.”

Khamenei did not appear on camera, a statement read by a news anchor with no explanation given on state television.  Israeli intelligence assessed that Mojtaba was likely wounded in the war’s opening salvo.  Today, Defense Secretary Hegseth said he may have been “disfigured.”

“The lever of closing the Strait of Hormuz must certainly continue to be used as well. Studies have also been conducted on opening other fronts in which the enemy has little experience and would be highly vulnerable. Their activation will take place, if the wartime situation continues and in accordance with considerations of expediency,” Khamenei said.

“Our sincere thanks go to our brave fighters who, at a time when our nation and beloved homeland have been unjustly attacked by the leaders of the front of arrogance, have blocked the enemy’s path with their powerful blows and dispelled their illusion of being able to dominate our beloved country or possibly divide it.”

“I assure everyone that we will not refrain from avenging the blood of your martyrs. The retaliation we have in mind is not limited only to the martyrdom of the great leader of the Revolution; rather, every member of the nation who is martyred by the enemy constitutes a separate case in the file of revenge,” he said.

“A limited portion of this retaliation has already taken tangible form, but until it is fully achieved, this file will remain open above other cases.  We will be especially sensitive regarding the blood of our children. Therefore, the crime the enemy deliberately committed against the Shajareh-Tayyebeh school in Minab, and some similar cases, holds a special status in this process of accountability.”

The new ayatollah, 56, signaled a continuation of his slain father’s strategy in confronting the United States and Israel. He signaled a willingness to continue the war that has disrupted global energy supplies, international travel and the relative safety enjoyed by the Gulf Arab states that have lived in the shadow of Iran’s theocracy for decades.

“These countries must clarify their position regarding those who have attacked our beloved homeland and killed members of our people. I recommend that they shut down those bases as soon as possible, because by now they must have realized that the United States’ claims of providing security and peace have been nothing more than a lie,” Khamanei said.

His statement aired as an Iranian attack targeted Israel. Khamenei said only a limited part of Iran’s retaliation had been realized so far in the war.

President Trump on Truth Social, 9:14 AM:

“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money.  BUT, of far greater interest and importance to me, as President, is stoping (sic) an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World.  I won’t ever let that happen!  Thank you for your attention to this matter.”

As of Thursday, fighting had displaced up to 3.2 million people inside Iran, the UN refugee agency said, as the human toll of the conflict exceeded 2,000, including at least 680 in Lebanon, where over 800,000 have been displaced.  Dozens have died in Iranian drone and missile attacks in Gulf Countries and Israel.

The number of Israeli that have died as of Friday was at 15, with another 19 in nations across the Gulf region.  According to the Iranian Health Ministry, 1,400 Iranians had died.

A U.S. Air Force refueling aircraft crashed in Iraq on Thursday after an apparent accident involving two KC-135 tankers supporting operations in Iran, military officials said.  Central Command then announced four of six crew members had been found dead and that recovery efforts were ongoing to find the other two.  We then learned all six had died.

Separately, a French soldier who was stationed in the north of the country was killed in an attack, President Macron said Friday.

Aerial refueling is one of the most complex military missions – but also one of the most critical due to the limited amount of fuel that fighter jets can carry and how quickly they run through their tanks.

It is inherently dangerous, and there have been multiple mishaps over the years in which an incorrect approach resulted in damage or death, including a U.S. Marine Corps mishap in Japan in 2018 where an F/A-18 aircraft collided with a C-130 tanker during a refueling mission, killing six.

According to U.S. officials, Iran has begun laying mines in the Strait, which complicates efforts to restart shipping there.

While the U.S. military said it had destroyed larger Iranian naval vessels that could be used to quickly lay mines in the Strait, Iran began using smaller boats for the operation on Thursday, according to a U.S. official briefed on the intelligence.

The IRGC can deploy hundreds, even thousands, of the small boats, which the Iranian force has long used to harass larger ships, including the U.S. Navy’s.

The United States issued a 30-day waiver for countries to buy sanctioned Russian oil and petroleum products currently stranded at sea.

Treasury Secretary Scott Bessent said the move, announced on Thursday, was a step to stabilize global energy markets.

Bessent said it was “unfortunate” the move could benefit Russia but maintained it was only for the short term, until April 11, and applied only to “permit countries.”

“The temporary increase in oil prices is a short-term and temporary disruption that will result in a massive benefit to our nation and economy in the long-term,” Bessent said.

Moscow claimed on Friday it was “increasingly inevitable” that Washington would lift sanctions.  The U.S. is “effectively acknowledging the obvious: without Russian oil, the global energy market cannot remain stable,” Russia’s economic envoy Kirill Dmitriev wrote on Telegram.

European Commission President Ursula von der Leyen, after participating in a call with G7 leaders on Wednesday to discuss the impact of the Iran war on oil and gas markets, said now was not the time to relax sanctions against Russia.

The paralysis of the Strait of Hormuz “in no way” justifies lifting sanctions on Russia, French President Emmanuel Macron said after the call with other G7 leaders.

Russia has faced punishing sanctions from the United States and the rest of the Group of 7 advanced economies since Moscow’s invasion of Ukraine in 2022.  Those sanctions have included a price cap on Russian oil and a crackdown on Russia’s “shadow fleet” of unmarked vessels that oil exporters have used to evade sanctions.

Top Senate Democrats assailed the Trump administration for easing sanctions, saying that it was done to mitigate a war of Trump’s own making.

“Instead of squeezing Russia’s faltering economy, the president’s ill-planned war is giving Putin a windfall while American families face higher prices,” Sen. Jeanne Shaheen (D-N.H.), ranking member on the Foreign Relations Committee, said in a statement.

Ukrainian President Zelensky said during a visit to Paris, “This certainly does not help peace.”

“This easing alone by the United States could provide Russia with about $10 billion for the war,” he predicted.  “Lifting sanctions only so that more drones will later be flying at you is, in my opinion, not the right decision,” he added.

Friday, Iran launched multiple attacks on Gulf Arab states, including dozens of drones at Saudi Arabia, following warnings from its new supreme leader about hosting American bases, and President Trump’s threatened major new retaliation.

Trump on Truth Social, Friday, 12:33 AM:

“We are totally destroying the terrorist regime of Iran, militarily, economically, and otherwise, yet, if you read the Failing New York Times, you would incorrectly think that we are not winning.  Iran’s Navy is gone, their Air Force is no longer, missiles, drones and everything else are being decimated, and their leaders have been wiped from the face of the earth.  We have unparalleled firepower, unlimited ammunition, and plenty of time – Watch what happens to these deranged scumbags today. They’ve been killing innocent people all over the world for 47 years, and now I, as the 47^th President of the United States of America, am killing them. What a great honor it is to do so!  Thank you for your attention to this matter. President DONALD J. TRUMP”

A large midday explosion rocked a Tehran square filled with demonstrators who were there for the annual Quds Day event in support of Palestinians, Iranian state television reported.

The cause of the blast wasn’t immediately known, but came shortly after Israel had warned people to clear the area because it planned a strike.  There were no immediate reports of casualties or damage.

In Oman, two people were killed when two drones crashed in an industrial area.  An industrial area in Dubai was sparked by debris from an interception.

Nearly 60 people were wounded in northern Israel after Hezbollah said that it had fired several rocket salvoes toward the area and at Israeli troops in southern Lebanon.  Almost all the injuries were described as very minor.

—The U.S. military spent more than $11 billion in just the first week of Trump’s war against Iran, Pentagon officials told lawmakers in a classified briefing Tuesday on Capitol Hill.  The New York Times reported the tally “did not include many of the costs associated with the operation, such as the buildup of military hardware and personnel ahead of the first strikes.”

Fareed Zakaria / Washington Post

“ ‘Regime change by jazz improvisation.’ That is how the respected scholar of Iran Karim Sadjadpouor described the Trump administration’s strategy in the war it has initiated with Iran.  Sadly, it is the most accurate description of the scattered, shifting and uncertain approach that emanates from Washington these days.

“The president launched this war exhorting the Iranian people to overthrow their government.  Perhaps he had assumed that the regime would collapse instantly. But when it didn’t, in a day or two, he changed course.  He began musing about dealing with potential leaders within the regime and praising the U.S. intervention in Venezuela as the model to be followed (‘perfect’) precisely because, far from regime change, it only involved the arrest of two people.

“Defense Secretary Pete Hegseth specifically denied that this was a ‘regime change war,’ as did his senior aide, Elbridge Colby.  Both said the goal was merely to degrade Iran’s military forces (many of which had been ‘obliterated’ last June in a 12-day bombing attack that included the use of stealth bombers).  But then, in a new twist, President Donald Trump reached out to Kurdish leaders in Iran and Iraq, promising them support if they would join in the fight – not to degrade Iran’s military power, but to help topple the government in Tehran and maybe even change Iran’s borders.  Trump has now proclaimed there won’t be a deal without ‘UNCONDITIONAL SURRENDER’ from Iran.

“So the goal isn’t regime change – except when it is.

“The most dangerous element of this war, however, is not that the lead actor is improvising like a saxophone player.  It is that the two countries waging the war have separate and perhaps incompatible agendas.  For Israel’s prime minister, Benjamin Netanyahu, the war is clearly about destroying the Islamic Republic. He acknowledged that this war was the culmination of a 40-year-old dream.  He is also using the opportunity to take out Hezbollah, root and branch.

“Israel’s military strategy has been focused, brilliantly implemented and aligned with its goal. The Israeli strikes are decapitating Iran’s leadership, destroying its military forces, striking its leadership compounds, even hitting police facilities. It is, as the Wall Street Journal reported, methodically destroying Iran’s repressive state – leaving the regime ripe for a collapse.  And on the current trajectory, Israel might well succeed in its objective.  That will likely result in a power vacuum in the country, which could invite revolt but will almost certainly result in a civil war.  Keep in mind that, whoever may seek power, this regime will fight back.  The appropriate analogy here is Syria, a country that was mired in civil war for more than a decade, with hundreds of thousands dead and millions of refugees.

“Iran is a country that could easily explode. It is filled with ethnic groups – Kurds, Armenians, Azerbaijanis – with ties to neighboring countries.  They have lived peaceably together, but as history demonstrates – from the Balkans to Iraq – when order collapses and a power vacuum develops, people retreat to their tribal groups and lose trust in others. And that’s how a civil war begins.

“What would fuel this war is the fact that Iran’s government has a vast cadre of dedicated soldiers, armed to the teeth, who will fight against any new government or group.  Its Revolutionary Guard is estimated to be almost 200,000 strong, with an additional paramilitary force, the Basij, of several hundred thousand.  And then there are the regular armed forces, which number around 400,000.  Just as Saddam Hussein’s army melted away after the American invasion and much of it reappeared as an insurgency, so too one could imagine the Revolutionary Guard fighting in different garb to deny any new government the ability to control the country.  In Libya, more than 14 years after Moammar Gaddafi fell, there is still no one group that controls the entire country. It is much easier to destroy a state than to rebuild one.

“For Israel, this is likely an acceptable outcome. It rids the country of its greatest foe, and if that produces chaos in Iran (and Lebanon), so be it.  The Syrian civil war actually improved Israel’s security because it did not face a major Arab state dedicated to fighting it anymore.  But an Iranian civil war is not in America’s interest, and it is not in the interests of America’s closest Arab allies, who depend on the region being stable and predictable so that oil, goods, money and people can flow freely and easily through it.

“Washington needs to find a way to ensure that it secures the gains it has made in this war – a disarmed and defanged Iran – without pushing the country into civil war.

“There are still ways to bolster the achievements and close out this war.  As usual, Qatar could play a useful role as an intermediary.  But time is running out. At some point, this war will reach a tipping point and no one will be able to control the spillover.”

Thomas L. Friedman / New York Times

“Yes, nothing would improve the prospects of the people of Iran, Lebanon, Iraq, Syria, Gaza, Yemen and Israel more than removing the Islamic regime in Tehran.

“But what if that regime is also so embedded – in mayoralties, schools, police stations, government jobs, the banking system, the military, neighborhood paramilitaries – that, despite its unpopularity with a majority of Iranians, it can’t be removed without plunging the entire Iranian landmass, about a sixth the size of the United States and home to 90 million people, into chaos?  What if the only quick alternative to Iran’s Islamic autocracy is not democracy but disorder on an epic scale?….

“(It) is obvious that Trump and Netanyahu started this war without any clear endgame in mind….

“As the Haaretz military analyst Amos Harel put it:

“ ‘A few months ago, Netanyahu described Israel as modern Sparta.  But to preserve its militarist identity, a Sparta requires permanent military friction – of a kind that would also enable its ruler to remain in power – regardless of the price it exacts from the country.’

“Keeping Israel at war with Iran, Hamas and Hezbollah enables Netanyahu to drag out his corruption trial and avoid a commission of inquiry for his failure to prevent Hamas’ Oct. 7, 2023, invasion.  (If you think that is too cynical, you don’t know Netanyahu.)

“For his part, Trump has been all over the map when talking about the morning after in Iran – and saying truly ridiculous and often contradictory things that reveal a commander in chief who is just making it up as he goes along.  One days it’s regime change, one day not; one day he doesn’t care about Iran’s future, the next day he will have a say in choosing the country’s next leader; one day he’s open to negotiations, the next day he is demanding ‘unconditional surrender.’….

“Would you invest in a company whose leader, without warning, embarked on a radically new business strategy and then, in the next week, described its goals in five different ways?  That is a flashing red light….

“The best that the Trump-Netanyahu bombs-away strategy can do is start that process; just tilting Iran onto a better track where it is less of a threat to its own people and neighbors would be a significant achievement. The worst the strategy can do is so devastate Iran with endless aerial bombardments that it becomes ungovernable for anyone. That would be a disaster of incalculable proportions.”

—

Wall Street and the Economy

On the economic data front, we had largely irrelevant inflation numbers because it’s now all about the March and April reports, which will begin to reflect the effects of the oil price shock.

February consumer prices came in exactly as expected; 0.3% on headline, 2.4% year-over-year, and on core, ex-food and energy, 0.2% and 2.5%.

A January report on the personal consumption expenditures index, PCE (data folks still catching up after last fall’s government shutdown), saw a rise of 0.3%, and 2.8% Y/Y, with the key core readings at 0.4% and 3.1%…the last figure the Fed’s preferred inflation benchmark.

As part of this report, personal income rose 0.4%, ditto, January consumption.

The Federal Reserve’s Open Market Committee is convening this coming week and they will leave interest rates unchanged, with the accompanying commentary cautious in light of the situation in the Middle East and the impact on energy prices.

We did have encouraging housing data. February existing-home sales rose at a better than expected annualized rate, 4.09 million, up 1.7% month-on-month.  The national median existing-home price rose to $398,000, a 0.3% increase from a year earlier, according to the National Association of Realtors.

January housing starts surged at a 1.49 million annualized pace, far better than forecast.

We had a second look at fourth-quarter GDP and it was revised down to just 0.7% from 1.4%, and 4.4% in the third quarter.

The Atlanta Fed’s GDPNow barometer for first-quarter growth is at 2.7%.

Freddie Mac’s 30-year fixed-rate mortgage is 6.11%, up 11 basis points from the week prior.

Next week it’s about the Fed and Chair Jerome Powell’s press conference.

Two other, related items…the U.S. government plans an electronic process for importers to request $166 billion in tariff refunds within 45 days, though in a court filing, the government said Customs and Border Protection is “not able to comply” with a judge’s earlier order to process refunds automatically.

Last month’s Supreme Court decision struck down the use of the International Emergency Economic Powers Act to impose tariffs, leaving the question of how to process the refunds to lower courts.

President Trump has vowed to largely replicate the IEEPA tariffs using other laws.

Importers are to individually file declarations with the agency’s electronic portal specifying the IEEPA duties they paid, CBP validates them, and the U.S. Treasury Department issues the refunds, including interest, electronically.

Separately, the U.S. budget deficit for February was $307.5 billion, $1.004 trillion for the first five months of the fiscal year, about 12% lower than the comparable period in 2025.

Net interest payments on the national debt in February totaled $79 billion, more than any other category except Social Security, income security and health care.

But customs duties, which have totaled $151 billion through the first five months, at least for a while could be much less in the coming months.

Europe and Asia

Just one data point for the eurozone…January industrial production fell 1.5% from December, and was down 1.2% year-over-year.

China’s February inflation rate was 1.3%, the highest print since January 2023 (which is good here), while producer prices in the month fell 0.9% vs. -1.4% prior.

China’s exports jumped nearly 22% in the first two months of the year from a year earlier (China combining much of its data for January and February as a result of changing dates for the Lunar New Year holiday).  This was much better than economists forecast, and far exceeded the 6.6% annual pace of growth recorded in December.

Shipments to the U.S. fell 11% for the two months. Exports to the European Union increased almost 28%, while those to Latin America climbed 16%. Sales to Asia also increased significantly.

President Trump’s renewed 2025 tariffs barely slowed China’s industrial momentum, as manufacturers redirected exports to Southeast Asia, Africa, and Latin America to offset weaker U.S. demand.

The 22% surge was the highest since October 2021.

Lastly, the fertilizer crisis impacts China in a big way.  The world’s largest grain producer consumes vast quantities of fertilizer and other agrichemicals each year.  Sulphur is a key ingredient used in phosphate fertilizers and pesticides, as well as other chemical products, and much of it is now stuck in the Middle East.

Japan’s final look at fourth-quarter GDP came in at 1.3% vs. -2.6% in Q3.

February producer prices rose 2.0% from a year earlier.

Street Bytes

—Stocks fell, the Nasdaq for an eighth time in nine weeks, with the Dow Jones down 2.0% to 46559, the S&P 500 1.6%, and Nasdaq 1.3%.  I’m surprised it wasn’t down further.

It’s all about oil and we’ll see what next week brings….

—U.S. Treasury Yields

6-mo. 3.66%  2-yr. 3.73%  10-yr. 4.28%  30-yr. 4.90%

Bonds fell, yields rose, on rising oil and inflation prospects.  The yield on the 10-year rose 14 basis points on the week, the 2-year, the most inflation sensitive, 17.

Kevin Warsh’s Fed nomination has landed in the Senate, but what happens next isn’t clear.

Warsh is expected to face a tough confirmation process even with Republicans controlling the chamber.  The immediate obstacle isn’t opposition to Warsh himself, but instead, it’s the investigation into current Fed Chair Jerome Powell, which has created a standoff inside the Senate Banking Committee.

Sen. Thom Tillis (R-N.C.) has said he wouldn’t support moving any Fed nominations forward until the Justice Department drops its probe into Powell.

Without Tillis, Republicans don’t have the votes to move the nomination forward.

But then…late this afternoon, U.S. District Judge James Boasberg threw out a pair of subpoenas the Justice Department issued to the Federal Reserve, handing a victory to the Fed and dealing a heavy blow to U.S. Attorney Jeanine Pirro’s criminal investigation into Chair Powell.

At 3:30 p.m., Pirro said they are appealing, as she ranted [like a true fill in the blank] against the judge’s ruling.

The market moved further down on her response to Boasberg.

—We headed into last weekend with Kuwait and Iraq essentially having cut oil production in half, while producers in Saudi Arabia and the UAE were running out of storage, according to oil intelligence firm Kpler.

Sunday night we then saw extraordinary action in the futures market, West Texas Intermediate rising to nearly $120, only to see a historic collapse in prices, crude finishing Monday at about $86 on WTI.

And then around 1:00 p.m. ET Tuesday, Energy Secretary Chris Wright posted on social media that the “The U.S. Navy successfully escorted an oil tanker through the Strait of Hormuz to ensure oil remains flowing to global markets.”

This is one tanker.  I mean, that’s great.  But 60 to 80 tankers a day transit through the Strait, and production is basically shut down in some spots, and you don’t just turn production back on. It’s a lengthy process.

Oil fell to about $77, but at 1:40 p.m., the secretary’s post was taken off his web site.

And around 2:00 p.m., Reuters reported a U.S. official said the U.S. Navy had not escorted any ships through the Strait. [The White House then confirmed it.]

After 3:00 p.m., there were reports Iran was laying mines in the Strait…not confirmed as yet.

Earlier in the day, Saudi Arabia’s Aramco, the world’s top oil exporter, said that there would be “catastrophic consequences” for the world’s oil markets if the Iran war continues to disrupt shipping in the Strait.

The disruption has not only upended the shipping and insurance sectors but also promises to have drastic domino effects on aviation, agriculture, automotive and other industries, Aramco CEO Amin Nasser told reporters on an earnings call.

Nasser noted global inventories of oil were at a five-year low and said the crisis will lead to drawdowns at a faster rate, adding that it was critical that shipping in the Strait resumed.

“There would be catastrophic consequences for the world’s oil markets and the longer the disruption goes on, the more drastic the consequences for the global economy,” he said.

But Nasser, when asked how quickly Aramco could restore output to around 10 million barrels a day once the Strait reopens, said production could be ramped up “in days, not weeks.”

Iran’s Revolutionary Guards said on Tuesday they would not let any oil out of the Middle East until U.S. and Israeli attacks cease, prompting President Trump to threaten to hit Iran “twenty times harder” if it blocked exports.

Wednesday, the International Energy Agency proposed the largest release of oil reserves in its history to bring down crude prices, 400 million barrels of oil from their emergency stocks.  The release would exceed the 182 million barrels of oil that IEA member countries put onto the market in two releases in 2022 in response to Russia launching its full-scale invasion of Ukraine.

The IEA proposal is intended to counter the massive disruption caused by the near-total closure of the Strait of Hormuz.

IEA members hold 1.2 billion barrels in public stocks, plus another 600 million in mandatory commercial inventories.

The Trump administration announced it would be releasing 172 million barrels of oil from its strategic petroleum reserve on Wednesday.

The market was unimpressed and oil rose on the day, though unlike Monday and Tuesday, the action was orderly.

By week’s end, the IEA slashed its forecast for oil supply growth to 1.1 million barrels a day this year – a dramatic cut from the 2.4 million barrels a day expected previously. All supply growth is expected to come from outside the OPEC+ alliance.

In March, supply is projected to plunge by 8 million barrels a day to 98.8 million barrels a day, the lowest levels since the first quarter of 2022.

“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” the IEA said in its closely watched monthly report on Thursday.

The administration plans to waive a century-old maritime law, the Jones Act, that requires American ships be used to transport goods between U.S. ports as it seeks to blunt surging oil and gasoline prices, according to people familiar with the matter.

The 30-day exemption, which is still being developed, is set to apply broadly to vessels moving oil, gasoline, diesel, liquefied natural gas and fertilizer among U.S. ports.  That would enable generally cheaper foreign tankers to move those goods – including Gulf Coast oil to refineries on the U.S. East Coast and fuel from the region to more populous areas.

Well, after all the draining action, on the week WTI finished at about $98.

—Cargo war risk premium rates have been surging, with quotes being reviewed on a voyage-by-voyage basis, particularly for energy and bulk commodity trades.  Analysts at Jefferies estimated on Thursday that potential industry losses from at least seven vessels reported damaged, at the time its note was published on March 5, could reach up to $1.75 billion.

With most tankers valued between $200 million and $300 million, the new insurance rate of 3% would imply a hull war risk premium of about $7.5 billion, up from 0.25%, or $625,000, before the conflict began, the brokerage added.

Angus Blayney, marine divisional director at Gallagher, a major insurance broker, told Reuters that rates have increased and are changing daily depending on vessel type and individual circumstances, though he added cover remains available.

—Oracle shares soared 10% following the company’s earnings release after the close on Tuesday, the company reporting strong third-quarter results.

Adjusted earnings per share came in at 1.79, above the Street’s $1.70 estimate, and up from $1.47 last year. Revenue reached $17.2 billion, also ahead of consensus for $16.9bn, and up 22% on the year.

Oracle’s cloud segment, which now represents over half of the company’s sales, grew 44% from a year ago, to $8.9 billion. The growth was led by Oracle Cloud Infrastructure – renting out servers over the internet – which saw revenue grow 84%. Oracle’s cloud software had a 13% rise in sales.

Oracle’s backlog grew by $29 billion to $553 billion.  About $300 billion of that is a single multiyear contract with OpenAI.

Oracle’s legacy software, hardware, and services businesses grew by a combined 4% to $8.3 billion.  They are quickly being eclipsed by cloud.

Oracle, like its enterprise software brethren, has suffered from the negative narrative of the past month.  CEO Mike Sicilia addressed the elephant in the room during his scripted remarks.

After rattling off a long list of AI integrations with Oracle software, he said, “these are not systems that can be replaced by a small collection of niche features cobbled together and bolted on in the name of AI. So yes, some smaller or single focused Saas players may well be disrupted, but Oracle will not be among them.”

Guidance for the current quarter was in line with expectations, and Oracle didn’t change its guidance for the full fiscal year.

To pay for it massive capital expenditures, Oracle added another $27 billion in debt in the quarter, and is now carrying $135 billion on its balance sheet.

Oracle began transitioning into a cloud company several years ago.  Oracle now offers cloud-based versions of its software after years of resisting the shift.

But the larger part of the shift has been offering servers for rent in the cloud, a business pioneered by Amazon Web Services, and now includes Microsoft, Alphabet, and a host of smaller “neoclouds” like CoreWeave.

While investors were initially wowed by cloud revenue and backlog growth, that enthusiasm has faded.  Oracle’s stock at $160 is down from a $345 all-time high last Sept. 7.

—Anthropic filed a lawsuit Monday against the Trump administration for designating the artificial-intelligence company a security threat and trying to cancel its federal contracts, bringing the battle between the two sides to the court system.

Shortly after Anthropic filed its lawsuit, 37 AI researchers at competitors OpenAI and Google filed a brief urging the court to side with Anthropic, highlighting how the fight has rippled through Silicon Valley.

In designating Anthropic a supply-chain risk for the Pentagon and directing agencies to cut ties with the company, the administration went beyond its statutory authority with harsh retaliation because Anthropic didn’t agree on how AI should be used by the Defense Department, the company argued.

“Defendants are seeking to destroy the economic value created by one of the world’s fastest-growing private companies, which is a leader in responsibly developing an emergent technology of vital significance to our nation,” Anthropic said in its complaint filed in the Northern District of California.  The company asked the court to declare the moves unlawful and said that the case is critical for other businesses that may disagree with the government.

The group of 37 researchers from ChatGPT maker OpenAI and Google supporting Anthropic includes Jeff Dean, chief scientist at Google’s DeepMind AI lab.

“If allowed to proceed, this effort to punish one of the leading U.S.  AI companies will undoubtedly have consequences for the United States’ industrial and scientific competitiveness in the field of artificial intelligence and beyond,” the researchers said in their brief.

Defense Secretary Hegseth (listed by Anthropic as a defendant) and administration officials have argued that Anthropic’s refusal to let the Pentagon use its AI tools in all lawful use cases presents a security risk because the company is trying to exert control over how the military uses technology.  Such moves can put operations at risk if a company decides to turn off its tools or change settings, they have said.

—The number of canceled flights to Middle East hubs surpassed 46,000 as of midweek since fighting began, though Emirates airlines said it was aiming for a return to full network operations in the coming days.

The crisis wiped out as much as 10% of global airline capacity earlier this month, in the biggest aviation shock since the Covid-19 pandemic.

Airline stocks were hammered on Monday on soaring jet fuel costs.  There’s been a big jump in ticket prices.  I saw an example in a Reuters piece. The cost of a ticket on Korean Airlines for the Seoul to London route leapt to $4,359, up from $564 seven days earlier.

The impact of high airfares could limit travel demand for much of 2026, analysts say.

Fuel is the second-largest expense for air carriers after labor, typically accounting for a fifth to a quarter of operating expenses.

“If crude is rising 20%, jet fuel is rising several times more as it is even more scarce, adding significant cost to operations together with crew resources which are stretched due to longer flying times when airspace is closed,” said Subhas Menon, head of the Association of Asia Pacific Airlines.

Analysts note that a sharp spike in jet fuel costs in 2005 in the aftermath of hurricanes Katrina and Rita, which resulted in widespread and significant damage to the refineries in the Houston area, led to major airlines Delta and Northwest filing for Chapter 11 bankruptcy that year.

Prices on domestic flights in the U.S. booked in advance have increased between 15% and 57%.

Airlines face a sense of urgency to raise fares.

“When it (oil) goes up this rapidly, airfares go up. They also come down, by the way, when fuel goes back down,” United Airlines CEO Scott Kirby said.  “That’s always what happens.”

–Meanwhile, in the U.S., airports have warned travelers to prepare to spend hours in security checkpoint lines, with the partial government shutdown stretching federal security workers.

It comes down to strong travel demand and fewer screening lanes open at checkpoints. Each airport is different, however.

The Department of Homeland Security, which oversees the Transportation Security Administration, has been largely shut down since Feb. 14, when federal funding lapsed without a new appropriation from Congress.  The agency’s approximately 50,000 TSA officers received a partial paycheck on Feb. 28 and are set to miss their first full paycheck this week.

Starting annual pay for a TSA officer is in the low $40,000 range, with the majority of the workforce living paycheck to paycheck.

A union representative said some airport security officers are now taking side jobs to cover bills.

—TSA checkpoint numbers vs. 2025

3/12…121 percent of 2025 level
3/11…117
3/10…83
3/9…96
3/8…122
3/7…88
3/6…105
3/5…122

—Geely Auto has gained the upper hand in mainland China’s intensifying automotive sector, as its diverse product line-up pays off after electric vehicle (EV) king BYD suffered a setback following partial withdrawal of a tax break.

Controlled by Chinese billionaire Li Shufu, Geely overtook BYD in sales during the first two months of the year because of its vehicles’ quality and reliability, even as Beijing intensified efforts to curb price competition among carmakers, according to analysts.

Geely, which builds petrol and electric cars under brands including Zeekr, Lynk and Galaxy, delivered 476,327 units in January and February to domestic and overseas buyers, an increase of 1 percent from a year earlier.

Geely’s sales of electric vehicles jumped 10.1% year-on-year to 241,740 units in the same period.

BYD’s sales plunged 35.8% from a year earlier to 400,241 units, as the Chinese government eliminated some past incentives for car buyers.

—Honda Motor expects to book up to $15.7 billion in expenses and losses related to the reassessment of its electric-vehicle strategy, and expects to swing to its first annual loss in decades as a result.

Expenses and losses related to the re-evaluation could total as much as 2.500 trillion yen for the fiscal year ending March 31 and in the coming years, the Japanese automaker said Thursday, after its global rivals gave gloomy outlooks in recent months.

Honda said it has decided to cancel the launches and development of certain models in response to a slowdown in the North American EV market. The company also expects to record impairment losses on investments in China due to intensified competition (see above).

Honda did say it aimed to strengthen its hybrid electric vehicle models to improve its car business’s profitability.  It also plans to capitalize on solid earnings from its motorcycle and financial-services businesses to maintain stable returns to shareholders.

Last month, Honda reported a loss in its car business for the latest quarter ended December due to U.S. tariffs and EV-related impairments, despite profit growth in its motorcycle business.

—A cyberattack on a U.S.-based manufacturer of medical equipment, Stryker, has heightened concerns that Iran or hacking groups linked to it might target civilian companies and infrastructure as the war continues.

Stryker, a Michigan-based company that makes a wide range of medical equipment, said on Thursday that it was still trying to restore its communications and ordering systems.  It said the hack seemed to be contained to its Microsoft programs, adding that there was “no indication of malware or ransomware.”

“It is safe to communicate with Stryker employees and sales representatives by email and phone, and within your facility,” the company said. Stryker has customers in 61 countries.

An organization of hackers calling itself Handala claimed responsibility for the attack in a statement posted on social media on Wednesday.  The statement said the hack was retaliation for a Feb. 28 missile strike on the above-noted elementary school in southern Iran that killed a reported 175 people.

Handala, which seemed to emerge a few weeks after the Israel-Hamas war in Gaza began in 2023, has targeted businesses and individuals linked to Israel, according to cybersecurity firms and intelligence groups, including U.S.- and Israeli-based Cyberprint and IBM’s X-Force Exchange.

—AT&T announced it was going to spend $250 billion building out its network over the next five years.  The company laid out details about its investment plan during a time when the market is already grappling with Big Tech’s aggressive capital expenditures.

On Tuesday, the telecom said it would accelerate its deployment of fiber, 5G, and wireless nationwide, and a collaboration with satellite manufacturer AST SpaceMobile would extend its coverage into remote areas.

AT&T, Verizon, and T-Mobile US are plowing money into fiber and 5G in a bid to stave off fierce competition from cable providers, which have lured away customers with mobile phone bundles.

But Wall Street has punished big spenders lately.

AT&T plans to hire more technicians and invest in artificial-intelligence fluency training as part of the spending plan it described on Tuesday.  The commitment covers the remainder of the expected period ahead of the transition to 6G, the next generation of wireless technology.  The current standard is 5G.

Previous cycles of telecom upgrades have led to sharp increases in capital expenditure.  AT&T, however, is aiming to avoid costly “rip and replace” equipment changes, the company recently said.

—Hewlett Packard Enterprise Co. gave an outlook for revenue in the current quarter that exceeded analysts’ estimates, a sign the company is benefiting from solid demand for hardware that helps customers run AI workloads.

Sales will be $9.6 billion to $10 billion in the period ending in April, the company said Monday in a statement, compared with the Street’s forecast of $9.57bn. Adjusted earnings of 51 to 55 cents per share are in line with the average estimate of 53 cents.

HPE is seeing strong demand for its networking products, driven by a boom in AI tasks that need faster ways to route data.  The Texas-based company purchased Juniper Networks for about $13 billion last year and sees networking as a major part of its future expansion.

—Peter Goodman of the New York Times had a detailed piece on the importance of the Persian Gulf as a major source of fertilizers, which I noted in last week’s WIR.

“Though the region is best known as a prodigious source of oil and natural gas, its abundance of energy has spurred the development of factories that make the raw materials for many types of fertilizer, especially those that deliver nitrogen.

“Nitrogen fertilizers are essentially natural gas reconfigured as plant nutrients.  They nourish crops that yield roughly half the world’s food supply.

“For now, most factories in the Gulf that make nitrogen fertilizers are continuing to produce them. But delivering their wares to farmers is suddenly impossible, given the effective shutdown of the Strait of Hormuz….

“Five primary fertilizer exporters – Iran, Saudi Arabia, Qatar, the United Arab Emirates and Bahrain – rely heavily on the Strait of Hormuz to export their wares.

“Collectively, these countries supply more than one-third of the world’s trade in urea, the dominant form of nitrogen fertilizer, as well as nearly one-fourth of another type, ammonia, according to data compiled by the International Fertilizer Association, a trade group based in London.  The same five countries produce nearly one-fifth of phosphate fertilizers.”

All of this is needed by farmers around the world.  It’s about the food supply.

U.S. farmers, however, are taking advantage of surging prices for corn, soybeans and wheat owing to the war; selling last year’s inventory that had been squirreled away due to weak prices.  They are selling it largely to ethanol producers and major traders including Archer-Daniels-Midland.

Growers also raced to sign contracts to pre-sell crops they have not yet planted and expect to harvest this year.

As you see above, the rally in prices was a welcome surprise for farmers who could lock in modest profits to cover their soaring fertilizer, chemical and seed bills.

—Campbell’s Co. warned of increasing pressure in the second half of the year from the revised U.S. tariffs, after cutting its annual sales and profit forecasts citing rising macroeconomic risks.  The shares hit a 23-year low.

Consumer companies, among the worst hit from President Trump’s tariffs, are navigating the latest uncertainty after the U.S. Supreme Court struck down the earlier levies.

Campbell’s has also been struggling with weak demand as lower-income consumers increasingly prefer cheaper brands and store-label products. The company’s price hikes in recent years – meant to protect margins from the rising cost of beef, and metals like aluminum and steel – have also weighed on sales.

The company now expects fiscal 2026 organic net sales to fall between 1% and 2%, lower than its previous forecast of up 1% to down 1%.

For the quarter ended February 1, net sales fell 5% to $2.56 billion, compared with the average analyst estimate of $2.61 billion. Snacks net sales fell 6%, driven partially by declines in chips and pretzels. Meals and beverages net sales fell 4%, a decline that included lower soup sales in the U.S.

Campbell’s said it would rely more on promotions and consider price cuts to bring consumers back to its snack brands in an increasingly competitive market.

“In snacks, the recovery is taking longer than anticipated,” said CEO Mick Beekhuizen.  “We are going to lean in a little bit more heavily into price.”

Last month, Campbell’s snacks competitor PepsiCo said it would cut prices by as much as 15% on some of its salty snacks, including Lay’s and Cheetos.

Beekhuizen said Campbell’s would give priority to careful promotions rather than price cuts.

The company also said it was introducing initiatives to reduce costs by $100 million.

—Dick’s Sporting Goods reported higher fourth-quarter comparable sales and said that it was seeing progress in turning around its recently acquired Foot Locker brand.

The company reported net income of $128 million, down from $300 million the year prior, though adjusted earnings were $3.45 vs. the Street’s $2.99.

Net sales rose to $6.23 billion, compared with analysts’ estimates of $6.07 billion for the latest period.

Comp sales, which don’t yet include the Foot Locker business, rose 3.1%, beating the Street’s forecast of 2%.

The company guided for 2026 net sales of $22.1bn to $22.4bn and adjusted earnings of $13.50 to $14.50 a share.  Analysts see 2026 net sales of $22.03 billion and adjusted earnings of $14.82 a share.

Executive Chairman Ed Stack said that the company is making progress in its “clean out the garage” efforts on Foot Locker, which have prepared the brand to reach an inflection point by the back-to-school season.

—The Justice Department reached a tentative settlement of its antitrust litigation against Live Nation, the concert giant that includes Ticketmaster, after a week of testimony in a high-profile trial that examined competition in the music industry.

Under the terms, Live Nation would agree to change how it makes ticketing deals with venues, allowing those businesses to use multiple vendors to sell tickets to fans, rather than work with Ticketmaster exclusively.  In addition, the company would allow touring artists to use other promoters when performing in its amphitheaters.

Live Nation would also pay financial damages to the states that join the settlement, according to people familiar with the agreement.

But some of the 39 states involved in the trial said they will keep fighting.

The news of a possible settlement came after a week of testimony in which witnesses from three venues across the country said that Live Nation employees – among them its longtime chief executive, Michael Rapino – had threatened to retaliate against the venues if they did not use Ticketmaster as their exclusive ticketing vendor.

—In the Burger wars, as you’re aware, about two weeks ago, McDonald’s CEO Chris Kempczinski was skewered on social media for taking a paltry nibble in a video promoting the chain’s new Big Arch burger, or “product,” as the CEO called it, stupidly.

So I’m reading a piece in the Journal on Burger King CEO Tom Curtis, and it turns out the company’s media folks had for months been working with Curtis on talking in front of a camera and cooking up stunts to make him an online sensation.

“A few weeks ago, they even posted his phone number online – then met over iced teas on the back porch of his home near company headquarters in Miami as he proceeded to answer 1,400 calls and messages, including one from his son, who asked how to fix the garbage disposal.”

So Curtis was ready to go viral, only he didn’t think it would be at McDonald’s expense.  And when Kempczinski screwed up, Burger King pounced.  The video team clipped 13 seconds of him tearing into a Whopper, sauce and grin splayed across his face, and posted it.

“To people across the internet, this was a guy who knew his way around a fast-food restaurant. Videos split-screening the executives’ bites created an online sensation.  Soon Wendy’s, A&W and other burger chains were posting their own taste-test clips.

“ ‘The combination of doing the right thing and luck can be a magical thing,’ Curtis said in an interview.” [Jacob Bunge and Christopher Kuo / WSJ]

I had a maple/bourbon Whopper sandwich the other day.  It was delicious.

—Global art market sales reached $59.6 billion last year as high-quality works drew people back to the market after two years of declines. Although the 4% gain is encouraging, the total is still nearly $9 billion below the 2022 peak, said the Art Basel and UBS Global Art Market report.

Foreign Affairs

Russia/Ukraine: Last Saturday, at least seven people were killed and 10 others, including three children, were wounded by a Russian missile that hit a five-story residential building in Ukraine’s second-largest city, Kharkiv, officials said.

President Volodymyr Zelensky condemned the attack and called for an international response. He said that Russia struck Ukraine overnight with 29 missiles and 480 drones, targeting energy facilities in Kyiv and other central regions and with damage reported in at least seven other locations across the country.

Officials in Kharkiv said the residential building was hit by a new Russian cruise missile known as Izdeliye-30.  Ukrainian reports said that the new subsonic air-launched weapon that Russia has recently started to use against Ukraine has a range of 1,500 kilometers (930 miles) and is equipped with a new satellite navigation system more resistant to jamming.

“There must be a response from partners to these savage strikes against life,” Zelensky said in a post on X.  “Russia has not abandoned its attempts to destroy Ukraine’s residential and critical infrastructure, and therefore support must continue.  We count on active work with the European Union to guarantee greater protection for our people. I am grateful to everyone who helps strengthen our protection.”

Russia has fired tens of thousands of Iranian-designed drones at Ukraine since it invaded its neighbor just over four years ago. It has launched large-scale domestic production of them and battered Ukraine with hundreds of drones in a single night – more than were used during some entire months in 2024.

Iran has responded to joint U.S.-Israeli strikes by launching the same type of Shahed drones at countries in the Middle East.

Zelensky is now providing support to defend against the Iranian drones in the Middle East, providing equipment along with Ukrainian experts.

But the war in the Middle East has drawn international attention away from Europe’s biggest conflict since World War II, and forced the postponement of a new round of U.S.-brokered talks between Russia and Ukraine planned for this week.

Russia’s Foreign Ministry on Wednesday condemned a deadly Ukrainian strike on the Western Russian city of Bryansk as a “terrorist attack” and accused Britain, whose missiles it said were used, of overstepping international legal norms.

In a statement, the ministry said the strike was intended to derail efforts toward a peace process and fuel an escalation of the conflict.

Bryansk regional governor Alexander Bogomaz said on Wednesday the death toll had risen to seven, with another 42 injured in Tuesday’s strike, without saying what was it.

Ukraine said it had struck a key plant producing missile components.  Moscow accused it of deliberately targeting civilians.

—Ukrainian special forces have halted a Russian advance in the southeastern Ukrainian region of Zaporizhzhia, Kyiv officials said Saturday – the latest military success in recent weeks amid Moscow’s ongoing aerial bombardment of Ukrainian cities.

Ukraine’s weapons systems are notching wins, such as anti-drone interceptors, now actively sought in the Middle East.

President Zelensky said Ukrainian forces are clawing back territory on other parts of the front.

Zelensky said in an interview with an Italian newspaper that Kyiv’s troops have recaptured close to 200 square miles since the beginning of the year, while Moscow is losing up to 35,000 soldiers a month to deaths and injuries.

–Meanwhile, the Kremlin is enjoying a sudden resurgence of its importance as a global supplier of oil and gas, as the conflict in Iran disrupts energy production and shipment across the Middle East and sends global energy prices soaring.

President Putin is reveling in Russia’s sudden reversal of fortune.

“Now other markets are opening up, and perhaps it’s more advantageous for us to stop supplying the European market right now,” he said last week on state television.

“We are seeing an increase in demand, a substantive increase in demand for Russian energy providers in connection with the war in Iran,” Kremlin spokesman Dmitri Peskov told journalists last Friday.

“The crisis in the Middle East in some quarters leads to questions about Russia – whether to go back to Russia or not,” Fatih Birol, the executive director of the International Energy Agency, said at a recent news conference.

“One of Europe’s historical mistakes was the overreliance of its energy sources on one single country, which is Russia,” he added. Looking to Russia as an alternative option for gas, he said, would be “economically and, in my view, politically wrong.”

Then there is China.

“Iran plus Venezuela is about 17 percent of China’s oil imports,” said Alexander Gabuev, the director of the Carnegie Russia Eurasia Center in Berlin.  “This has to come from somewhere, and that somewhere is Russia.”

Cuba: The Trump administration is preparing an economic deal with Cuba that could be announced soon, according to an exclusive report from USA TODAY.  The details of the prospective deal and exact timing are not known, but an agreement could include a relaxation on Americans’ ability to travel to Havana, which would require Congressional approval.

Discussions have included an offramp for President Miguel Diaz-Canel, the Castro family on the island and deals on ports, energy and tourism.  The U.S. government has floated dropping some sanctions.

President Obama had lifted some of the rules during the final years of his presidency only to see Trump put some of them back in place during his first term.

The president has said publicly that Secretary of State Marco Rubio is having discussions with the Cuban government and the regime wants to make a deal.

At his recent Latin American leaders’ summit, Trump said: “Our focus right now is on Iran, and we’ll do that.  I would say, ‘what will you do, take about two days off, Marco?’  Maybe an hour. He’ll take one hour off, and then he’ll finish up a deal on Cuba.”

Friday, President Diaz-Canel confirmed his government is holding talks with the Trump administration.

He made the announcement in a video broadcast on national television and he also spoke in a subsequent press conference, where he addressed Cuba’s energy needs amid a U.S. oil blockade, saying no fuel has entered Cuba in three months.  But he said the talks with the U.S. have reached initial phases only.

“These conversations have been aimed at seeking solutions through dialogue to the bilateral differences that exist between our two nations,” Diaz-Canel said.

Random Musings

—Presidential approval ratings….

Rasmussen: 44% approve of President Trump’s job performance, 54% disapprove (Mar. 13).

A New NBC News poll had Trump’s approval rating at 44%, 54% disapproval.  The generic congressional ballot has Democrats leading Republicans 50-44, which really is no margin at all given this question and the history of the polling surrounding it.

On the issue of Trump’s handling of inflation and the cost of living, 36% approve, 62% disapprove.

Otherwise, President Trump’s approval ratings were on the rise following the State of the Union address, but have taken a hit following the attack on Iran.

In a Fox News national survey, 61% of those polled believe Iran poses “a real national security threat” to the United States, but this didn’t translate into support for the war, which polled 50/50 for and against, or Trump’s job rating on foreign policy, which polled a 60% disapproval rate.

The president’s overall job performance rating was at 43% approval.

Trump’s presidential approval rating was 43.3% over the weekend versus 54.8% disapproval, according to RealClearPolling (which looks at 14 major polls).  This was down from an initial high of 50.5% approval and 44.3% disapproval rating when he took office in January 2025.  Feb. 17, 2026, the split was 42% approval, 55.5% disapproval.

The Economist/YouGov poll ending March 2 found a 42% job approval rating vs. 56% disapproval.

–The race to fill former Rep. Marjorie Taylor Greene’s (R-Ga.) vacant House seat will go to a runoff after no candidate secured a majority of the vote Tuesday.

Republican Clay Fuller, who received Trump’s endorsement, and Democrat Shawn Harris will face each other in a runoff scheduled for next month.

Harris was the Democratic nominee for the seat in 2024, losing to Greene by nearly 30 points in the solidly Republican district.

—California Rep. Kevin Kiley announced that he is formally leaving the Republican Party to become an independent.

Kiley decided to run for reelection as an independent in the aftermath of California’s redistricting measure, which made his district more Democratic-friendly.

But he went further Monday, saying he will ask the House clerk to drop his identification as a Republican for the rest of the current Congress.

“I will be the sole independent member of the House of Representatives,” Kiley told reporters during a virtual press conference.

Kiley’s departure from the GOP will technically lower the Republican majority further to 217-214.  But Kiley said he will continue to caucus with the Republicans since he was elected as a member of the party.

The congressman said the ongoing gerrymandering battle from both parties led to his switch, expressing disgust with partisanship.

—President Trump has said he would refuse to sign any legislation until Congress passes a key bill that would add new voting requirements, which is putting new pressure on GOP leaders ahead of the midterm elections.

“It must be done immediately. It supersedes everything else,” Trump said in a post on Truth Social.

“MUST GO TO THE FRONT OF THE LINE. I, as President, will not sign other Bills until this is passed.  AND NOT THE WATERED DOWN VERSION – GO FOR THE GOLD: MUST SHOW VOTER I.D. & PROOF OF CITIZENSHIP: NO MAIL-IN BALLOTS EXCEPT FOR MILITARY – ILLNESS, DISABILITY, TRAVEL…”

Trump’s ultimatum is sure to be welcome news to House Republicans, whom he spoke to Monday at their three-day issues retreat in Miami. The party is set to map out its legislative agenda and sharpen its messaging for the midterms.

The president’s post follows weeks of debate over the Safeguard American Voter Eligibility (SAVE) America Act, which passed the House last month but is awaiting a vote in the Senate. The legislation would require individuals to provide proof of citizenship when registering to vote and a form of ID before casting a ballot.

The bill has almost universal support among Republicans in Congress, but Democrats are staunchly opposed and can use a filibuster to prevent it from advancing in the upper chamber. That has led the president and some conservatives in Congress to push Senate Majority Leader John Thune (R-S.D.) to return the Senate to a “talking filibuster” that could allow them to move the bill forward.

Under current interpretations of the filibuster rule, a member can object to a bill passing and hold it up until 60 senators vote to overcome the filibuster.  But a talking filibuster would force Democrats to speak on the floor continuously to prevent a vote from happening.

Once they give up the floor, Republicans could pass the legislation with 51 votes.

But Thune has so far rebuffed those calls, having run for Senate GOP leader on a commitment to keep current filibuster rules in place. Thune has warned of Democrats potentially using new rules to their advantage if they retake control of the upper chamber.

“You have to show me how in the end it [the talking filibuster] prevails and succeeds,” Thune told reporters at the Capitol.  “We can’t find a piece of legislation in history that’s been passed that way.”

Thune said he’s studied the prospects for a talking filibuster thoroughly, and noted Democratic leaders contemplated it multiple times but opted against it.

“What people don’t realize, I think, is it’s all unlimited debate, but it’s also unlimited amendments,” Thune said. Republicans would need to stay unified on amendment after amendment, he said.

Trump, though, is now threatening to paralyze other critical pieces of legislation, like reopening the Department of Homeland Security.

Democrats continue to dig in on their position against DHS without significant reforms to immigration enforcement policy.

But the ouster of Kristi Noem has added to some hopes that the parties can reach a deal.

Addressing House Republicans at a retreat on Monday at his resort in Doral, Florida, Trump was unbowed.

“Let’s go for the gold and let’s just not accept anything else,” Trump said, arguing his re-branded ‘SAVE America Act’ would be a boon for Republicans’ midterm prospects.

Thune said he hopes Trump will lift his blockade.

—Two men who brought explosives to a far-right protest outside New York City’s mayoral mansion said they were inspired by ISIS, according to a court complaint.

Emir Ballat, 18, and Ibrahim Kayumi, 19, were held without bail after a court appearance Monday on charges that include attempting to provide material support to a foreign terrorist organization and using a weapon of mass destruction.

The homemade devices, which did not explode, were hurled Saturday during raucous counterprotests against an anti-Islam demonstration led by Jake Lang, a far-right activist and critic of New York Mayor Zohran Mamdani, a Democrat and the first Muslim to hold the office.

—Since the war started, we have also had terrorism-related incidents in Austin, Texas, and two on Thursday.

An attack on a synagogue/school in West Bloomfield, MI, where security took out the driver of a van who drove into the school, the vehicle became engulfed in flames and was found to have a large amount of explosives in it.  Thankfully, the explosives didn’t go off, or it would have truly been a catastrophes with reportedly well over 100 children in the school at the time.

And at Old Dominion University in Norfolk, VA, an ROTC instructor, Lt. Col. Brandon Shah, was killed by a convicted ISIS-supporter, before Shah’s students took out the shooter, in an act of true heroism.

Shah served several tours in the Middle East and was an ODU graduate.

There have been a number of attacks on synagogues across Europe as well.

–A federal judge has ruled that Kari Lake was unlawfully appointed as the acting head of the U.S. agency that oversees Voice of America (VOA), voiding the layoffs conducted at the outset during her tenure.

U.S. District Judge for the District of Columbia Royce Lamberth ruled Saturday that Lake’s appointment as acting CEO of the U.S. Agency for Global Media violated the Constitution’s Appointments Clause and the Federal Vacancies Reform Act.  Trump initially made Lake the senior adviser to acting CEO Victor Morales last March before making her the acting head in July.

Lake served entirely without Senate confirmation and left the CEO role in November, but Lamberth declared all of her actions while she was the leader are void. That includes wide staff layoffs in August.

If upheld by higher courts, Judge Lamberth’s ruling would allow more than 1,000 journalists and support staff members at the news group to return to their jobs.

Kari Lake’s dismantling of VOA at the behest of Donald Trump and Stephen Miller was an incredible act of stupidity, at a time when we want Western news and entertainment getting into the likes of Iran, Russia and China, where there are no press freedoms.

–A judge dismissed most of a lawsuit against the Trump administration for freezing money earmarked for the Gateway tunnel under the Hudson River, after the U.S. government made the disputed payments and work resumed on the $16 billion project.

I knew a court ordered payments to be made, some $205 million, but didn’t realize the administration then complied.  So all good.

—Last March saw a record number of tornadoes in the United States, 299, shattering the record for the month of 234, when April and May are normally the worst months.

And this March is starting badly…eight tornado-related deaths last weekend…more tornadoes Tues. and Wed. killing at least another two people.

We’ve had record warmth, such as on Tuesday (and Wed.), Newark, N.J. hit a record 82 degrees, while New York’s Central Park hit a record 80…the earliest 80-degree day of the year in over half a century…and then snow Thursday.

Downtown Los Angeles was expected to hit 98 Friday.  March 13.

—

Pray for the men and women of our armed forces…and all the fallen.

The Pentagon announced the death of Sgt. Benjamin N. Pennington, 26, of Glendale, Ky, as a result of the Iran War.  U.S. Central Command then announced that all six crew members on the above-noted KC-135 refueling aircraft accident had died.  We mourn their passing and praise their courage. God love ‘em.

And God bless America.

Slava Ukraini.

—

Gold $5020…Silver $80.20….
Oil $98.10

Bitcoin $71,150 [4:00 PM ET, Friday]

Regular Gas: $3.63; Diesel: $4.89 [$3.07 – $3.61 yr. ago]

Returns for the week 3/9-3/13

Dow Jones  -2.0%  [46558]
S&P 500  -1.6%  [6632]
S&P MidCap  -2.0%
Russell 2000  -1.8%
Nasdaq  -1.3%  [22105]

Returns for the period 1/1/26-3/13/26

Dow Jones  -3.1%
S&P 500  -3.1%
S&P MidCap  +1.1%
Russell 2000  -0.1%
Nasdaq  -4.9%

Hang in there.

Brian Trumbore