US President Donald Trump’s recent state visit to China has done little to end the stalemate in the Strait of Hormuz. If anything, Iran appears to have been emboldened enough to escalate Gulf tensions through drone strikes near the Barakah Nuclear Energy Plant in Abu Dhabi and rocket attacks targeting sites in Saudi Arabia.

Brent crude trading at about $110 a barrel has coincided with a brutal sell-off in the US Treasury market, pushing the yield on the bellwether 10-year note towards 4.7 percent as Wall Street increasingly prices in prolonged disruption to shipping through the strait.

Markets are also beginning to confront the wider economic fallout. Any sustained interruption to GCC diesel and fertiliser exports risks wrecking both the summer driving season and the North American planting season – a combination likely to stoke inflationary pressures further.

Trump, meanwhile, has warned Tehran that “the clock is ticking”, and the threat of renewed confrontation means tanker traffic via Hormuz could plunge in the weeks ahead.

The geopolitical risk premium now embedded in oil markets is converging with broader inflation fears, driving bond yields higher and fuelling a vicious macroeconomic cycle that threatens fresh waves of domestic instability around the world.

Trump’s Republican Party risks losing control of Congress in the November midterm elections, as gasoline prices and mortgage rates continue to climb.

It is also evident that $110 Brent is no longer an accurate barometer of physical oil markets, with diesel and jet fuel mostly available only to downstream clients in Asia and Europe at closer to $200 a barrel.

Data from the International Energy Agency (IEA) suggests the world economy is facing the biggest energy security crisis in modern history, with more than a billion barrels of Gulf crude exports effectively removed from global markets since Iran disrupted shipping.

Saudi and Emirati bypass exports through the Yanbu and Fujairah overland pipeline networks do not come close to offsetting the crude volumes normally transported through the strait. About 20 million barrels a day – equivalent to one-fifth of global oil consumption – typically pass through the waterway by tanker.

As of mid-May global oil markets still face an effective supply shortfall of about 13 million barrels per day that no other producing region can fully replace.

The surge in crude oil and refined-product prices is already rippling across economies in the Middle East, South Asia, Europe and Africa. Petrol rationing, four-day work weeks, surging inflation, widening budget deficits and sharply higher bond yields threaten to push the global economy into recession.

We could also yet see the worst sovereign debt crisis in emerging markets since the Asian and Russian currency meltdowns of 1998.

The IEA estimates that more than 80 energy infrastructure assets across the six Gulf states and Iraq have been damaged since the start of Trump’s “Epic Fury” military campaign on February 28.

Even if Trump and Iran were to sign a peace agreement and immediately reopen Hormuz to tanker traffic, Saudi, Emirati, Qatari, Kuwaiti and Iraqi oil production would still struggle to recover to pre-war levels before the end of 2026.

Qatar estimates that extensive war damage to its Ras Laffan Industrial City complex – the world’s largest liquefied natural gas hub – will result in a 17 percent loss of productive capacity that could take up to five years to repair.

Logistical factors also preclude any immediate reopening of the strait to tanker traffic, even if Washington and Tehran agree to lift their rival naval blockades. The UN’s International Maritime Organization has identified about 800 vessels that could eventually participate in an evacuation framework once security guarantees are in place.

Tanker owners are reluctant to risk crews’ lives in what has effectively become an active war zone. Naval mines, drone strikes and attacks on neutral shipping have dramatically increased the dangers associated with transiting the chokepoint.

While Lloyd’s of London and other marine insurers continue to offer some cover, war-risk premiums have surged to prohibitive levels, rendering many voyages commercially unviable.

In practice, soaring insurance costs, crew safety concerns and mounting operational uncertainty have made large-scale commercial shipping through Hormuz impossible for the moment.

This is a far more serious energy crisis than the 1979 oil shock that followed the Iranian Revolution. Pahlavi Iran accounted for only 4 percent of global oil supply, yet the closure of Iranian oilfields still triggered panic buying by Japanese refiners in Rotterdam, pushing crude to an inflation-adjusted peak of roughly $178 a barrel.

The uncertainty surrounding any post-Hormuz reopening – combined with Trump’s lack of a diplomatic breakthrough capable of resolving the deadlock – means a year-end Brent price of $150 to $180 a barrel is no longer unthinkable.

The article Murkiness of Hormuz timetable threatens an oil price spiral appeared first on Arabian Post.

The last four years were a succession of black swans that could have easily derailed the bull market on Wall Street but did not though the short term corrections on Nasdaq were both savage in their intensity. These black swans include the Russian invasion of Ukraine, Powell’s U-turn from “inflation is transitory” to the swiftest, most brutal Fed interest rate tightening policy since Paul Volcker, the sudden collapse of Silicon Valley Bank on the asset liability maturity mismatch that has killed banks ever since Renaissance Florence of the Medici clan, the Japanese yen carry trade unwind in August 2024, the bond market temper tantrum on the Powell FOMC’s September 2024 rate cuts, the reemergence of Donald Trump on the world stage in the November election, Orange Man’s wild disruption on tariffs, Greenland, NATO, the annexation of Canada, Midnight Hammer and finally the US-Israeli airstrikes on Iran and the biggest energy supply shock in history after Ayatollah Khamenei ordered closure of the Strait of Hormuz.

I am surprised that the rise in the dollar was so muted in these multiple crises, US economic growth was so resilient, AI capex so spectacular even though non-tech capex no longer exists, bank stocks were such a beauty (rode the Citi roller coaster from 65 to 130 but still at only 1.3 price to book now. Thank you Jane!) and credit spreads are so easily narrow even as direct lending/private credit is subprime 2.0.

To butcher Tolstoy’s famous observation in Anna Karenina, all bull markets are not alike, happy or unhappy. The best bull markets are those not founded on off-plan speculation with looney tune leverage, guess who?, but a structural rise in demand that makes all my Champagne wishes and caviar dreams come true even while the world has gone mad. This is why I fell in love with Dr. Copper last summer and outlined my arguments ad infinitum several times in multiple posts.

Copper repaid my love and the red metal is up 35-37% in both COMEX and London. Yet I am still convinced that we are in the very early stages of a structural bull market that I believe will define my investment focus for the next five years.

The numbers are staggering. Almost a trillion dollars in AI capex spending by the US hyperscalers, Anthropic alone has raised its revenue to $45 billion, up 80X according to Dario. Now wonder the insatiable demand for compute will only rise and make copper the hottest strategic commodity on earth since crude oil in October 1973.

The twilight in the desert has taken a toll on OPEC but the sunrise has barely begun in Congo’s heart of darkness. The copper mountain glows red in the African bush as its math in the Age of AI is pure poetry for me.

A typical large AI campus is designed around a power blocks of 50 – 150 megawatts. Each megawatt equates to 33 tonnes of copper consumption in installed capacity. This is a game changer second derivative on AI where the risk/reward calculus is nowhere near as dangerous as skating on Planet Chipster on the eve of the biggest bubble blow up since GFC. So copper is my fave hard asset once $40 trillion dollars in national debt, $5 a gallon gasoline and the highest credit card/student loan delinquency since Lehman went to money haven in 2028. A glimpse of the future? Zohran and his Lenin lite Dems take control of the house and senate to banish MAGA into the garbage heap of American history and demand payback from the White House, Fortune 500 and Wall Street. State owned grocery stores and free bus rides with 80% income taxes is one black swan that will finally make this the unhappiest of all bull market families. That much, at least, is certain!

The article Black swans, the Wall Street bull market and why I love Dr. Copper in the Age of AI! appeared first on Arabian Post.

With SanDisk (SNDK) up 4000%, Western Digital Corp (WDC) up 900% and Micron Technology (MU) up 680% in the past year, I guess every investor who prostrated before the Chip Gods has every reason now to cash out now that memory Xanadu has been attained.

The Philly Chip Index 50 day moving average is now 35% below its current level, so this is where strategic support lies when the bubble du jour bursts as they always do after the mother of all parabolic moves. So the real miracle of the Han River was really South Korea KOSPI, up 186% in the past year, thanks to Samsung and Hynix. The Kospi is probably the cheapest backdoor into the hottest trade of the world now that an Iran ceasefire looks credible.

Yet Trump is Trump and abhi Delhi Durast since we must wait for Nvidia and Broadcom to speak to us from Mount Olympus even though it was wonderful to hear Lisa Su speak today and witness AMD leapfrog 17% into the inner sanctum of Planet Nirvana!

The article Chip Gods have gone gaga on Planet Nirvana! appeared first on Arabian Post.

It is significant that Abu Dhabi joined Opec from the moment the emirate exported its first barrel of oil in 1967, four years before the birth of the UAE itself. For 59 years the UAE was a member of Opec enduring an era of multiple shocks, wars, revolutions, recessions, banking crises, oil price wars, supply shocks, embargoes and the pandemic.

Saudi Arabia has been the ultimate power broker within the group and its swing producer, the de facto central bank of black gold. The kingdom has the world’s lowest drilling cost, highest long-life proven reserves versus export volumes and almost all of Opec’s excess capacity. This means that Saudi Arabia alone could move the price of oil by enforcing quota discipline on other members.

In fact, Saudi Arabia initiated three price wars which produced a ghastly plunge in oil prices in 2014, 2019 and 2020 because Riyadh misjudged the competitive threat from West Texan shale oil and was embroiled in a production dispute with Russia.

The economics of oil therefore meant that the UAE was at the mercy of Saudi-led price wars and quota discipline actions even though it was not a marginal producer of crude like other members who have exited such as Indonesia, Qatar, Angola and Ecuador.

After all, Abu Dhabi boasts the world’s seventh largest proven oil reserves, extraction costs below $10 a barrel, which is not much higher than Saudi Aramco, and a baseline Opec quota of 3.17 million barrels a day, making it the third largest producer in the group after Saudi Arabia and Iraq.

While a geopolitical rift between Riyadh and the UAE over Yemen is undeniable, the basic reason the UAE decided to leave Opec is that it has spent tens of billions in development costs to raise productive capacity to as high as 4.85 million barrels per day via Adnoc‘s epic exploration spree which has been ongoing since 2018.

Abu Dhabi has been dissatisfied with Opec since Saudi Arabia restricted its quota a full 30 percent below capacity at a time when Iraqi over-production has made a mockery out of the concept of quota discipline.

Meanwhile, Iran simply ignored Opec and put its fleet of ghost tankers to work to export every barrel it pumped to China.

Russia was also unwilling to make any sacrifices to maintain a price floor even when Brent fell to $60 earlier this year, as Vladimir Putin was determined to sell every barrel Rosneft and Lukoil produced in order to finance his war of attrition in Ukraine.

In this game of global energy brinkmanship, Abu Dhabi was forced to endure successive price crashes at the same time as one third of its productive capacity remained idle. It was on the receiving end of output, pricing and export decisions made in Riyadh, Moscow, Baghdad and Tehran over which it had no input, let alone influence.

Opec membership was costing the UAE at least $50 billion a year in lost petrodollar revenues.

The only thing surprising about the UAE’s decision to exit is that it did not happen much earlier. It took a horrific war and 3,000 missile or drone attacks from Iran finally to force Abu Dhabi to exit Opec.

The closure of the Strait of Hormuz has just created an optimal political moment whereby the UAE can leave without triggering another ruinous oil price crash.

The fate of the five founding members of Opec should temper those who believe that the UAE’s decision to exit undermines Gulf’s solidarity.

Iraq invaded and overran fellow founding member Kuwait in 1990. Venezuela is a de facto Trump satrapy and will be next to exit. Iran has just attacked every Gulf oil producer plus fellow Opec+ member Azerbaijan with its ballistic missile arsenal. Saudi and Russian interests in Iran are in deep conflict. Iraq is a de facto vassal state of the Islamic Revolutionary Guard Corps.

Opec’s five founders are definitely not Enid Blyton’s Famous Five happy family!

Opec is a cauldron of lethal geopolitical rivalries and Darwinian self interest. Abu Dhabi’s strategic autonomy doctrine means national interest is the sole lodestar of its energy policy.

In the game of nations, a petrostate must take the existential decisions of war and peace itself as well as pursuing an energy policy based on self interest.

This is not Machiavelli, simply the logic of survival in a Hobbesian world.

The energy transition made the Opec exit inevitable. Oil and gas is just one third of the UAE’s $540 billion economy and it is only a matter of time before peak demand leads to an inexorable decline in oil prices, Matt Simmons’s Twilight in the Desert predicts.

The 2 million barrels per day that is not currently exported could become a stranded asset if demand growth collapses.

Opec’s price floor is a cruel myth in a world where Brazil and Guyana alone produce 4 million barrels per day and West Texas has replaced Saudi Arabia as crude’s price setter.

The UAE’s Opec exit was thus both inevitable and rational.

The article The UAE’s Opec exit was both inevitable and rational appeared first on Arabian Post.

As the world’s leading trading power, China’s vast export engine fuelled a $1.2 trillion current account surplus in 2025. At the same time, it is the largest importer of crude oil globally, with around 40 percent sourced from the Middle East.

This exposure gives Beijing a clear stake in Gulf stability – prioritising secure maritime transit through energy chokepoints and uninterrupted access to the GCC’s trillion-dollar development pipeline.

Iran has therefore infringed core Chinese interests in the Gulf by weaponising tanker transit through the Strait of Hormuz and targeting the UAE and Saudi Arabia, Beijing’s two principal economic partners in the region.

In short, the Iran War and Hormuz blockade are an economic nightmare for China on multiple fronts.

China has invested more than $100 billion in GCC construction and development projects, where its state-owned companies have earned hundreds of billions of dollars in profits over the past decade.

In contrast, Chinese investments in Iran have been minuscule ever since US President Trump repudiated Obama’s Joint Comprehensive Plan of Action (JCPOA) nuclear deal in 2018 and imposed maximum pressure sanctions on the Islamic Republic.

It is no coincidence that China’s President Xi signed a pledge to invest $400 billion in Iran during the immediate post-JCPOA euphoria, when the world expected Iran to reopen to global business. Yet only $2 billion out of the $400 billion promised by Beijing to Tehran has materialised.

China’s reluctance to invest in Iran over the past decade is entirely rational.

Following the reimposition of Iranian sanctions, Beijing had little incentive to risk access to far larger and more lucrative export markets in the US and the GCC.

That caution was reinforced in 2019, when attacks on Saudi Aramco’s Abqaiq facility temporarily knocked out roughly half of the kingdom’s oil output – about 5 percent of global supply – exposing the vulnerability of regional energy infrastructure and, by extension, China’s own energy security.

Iran’s Houthi militia allies in Yemen also attacked Chinese shipping in the Red Sea enroute to the Suez Canal, representing a de facto assault on its Belt & Road investment zones in the Sinai.

China is Iran’s largest trading partner, but Iran does not even rank in China’s top 50 trading counterparties. The Middle Kingdom was virtually the only buyer of discounted Iranian crude from Kharg Island for its limited Shandong teapot refineries. Still, it can easily replace the 1.5 million barrels a day of Iranian imports lost to Russia, Brazil, or even Angola.

State sovereignty and non-intervention in the internal affairs of other countries are cardinal principles of Chinese foreign policy. Iran violated this principle with its proxy militias in Lebanon, Iraq, Syria and Yemen and its multiple acts of subversion against the GCC states.

There is simply no strategic interest between China and Iran, especially on the eve of a crucial summit in Beijing between Trump and Xi scheduled for mid-May.

Apart from energy, Chinese construction companies, banks, contractors and capital goods exporters have carved out strategic niches in the GCC’s myriad economic diversification ambitions.

Saudi Arabia and the UAE are the twin economic hubs for China Inc’s corporate champions in the Gulf, not Iran.

The UAE’s decision to leave Opec underscores a broader shift towards strategic autonomy in energy policy – one that aligns with China’s preference for stable, market-driven supply relationships and reinforces the Gulf’s centrality to Beijing’s economic interests.

An estimated 400,000 Chinese nationals are resident in the UAE, a huge proportion in a nation with a population of only 11 million. Dragon Mart in Dubai is the largest Chinese-owned wholesale trade emporium outside mainland China.

Saudi Arabia is China’s largest source of crude oil imports after Russia. The kingdom, as the only Arab world economy with a trillion-dollar GDP, is a natural magnet for China’s state-owned corporate colossi in the Gulf.

China has no interest in assuming a more prominent role in the Gulf’s military or security architecture, a role it has long ceded to Washington. Its interests are exclusively economic: energy, trade, FDI and project finance.

Beijing should rethink its relationship with Tehran.

The article China’s Gulf bet: Why Iran’s escalation hits Beijing where it hurts appeared first on Arabian Post.

The US-Israel war with Iran has now stretched beyond five weeks, inflicting extensive damage on energy infrastructure, airports, ports and commercial and technology hubs across the six GCC states.

The closure of the Strait of Hormuz to Gulf oil and gas exports is, in itself, an economic catastrophe. It forces the GCC to conclude that energy export security is not national security.

Drone and missile attacks triggered a sharp decline in visitor arrivals and an exodus of high-net-worth investors from financial centres such as Dubai and Abu Dhabi. Yet the UAE’s robust air defences and crisis management protocols have helped to restore confidence in public safety.

It is too early to calculate the full fiscal impact. But the components are clear: higher military spending, reconstruction costs and severe oil and gas revenue losses from a closed Hormuz.

Wall Street investment banks are now quantifying the impact of the war on GCC economies. Goldman Sachs estimates that if the conflict continues to the end of April, GDP in Qatar and Kuwait could decline by as much as 14 percent, as Doha and Kuwait City export all their oil and gas through the Strait of Hormuz.

Saudi Arabia and the UAE, the GCC’s two largest economies, could see GDP fall by 3 percent and 5 percent respectively, as they retain some export capacity through pipeline-linked tanker terminals at Yanbu and Fujairah.

The resulting economic losses are likely to exceed those seen during the Covid-19 pandemic, as energy exports and non-oil activity come under pressure across the six GCC states.

It is significant that no major credit ratings agency has downgraded GCC sovereign debt since the war began on February 28 (Bahrain’s debt was downgraded by Fitch a week before the war began due to public finance concerns, not geopolitics).

The GCC faces a secondary economic shock as borrowing costs rise sharply in the post-war environment. A roughly 0.5-percentage-point increase in the US 10-year Treasury yield – against which GCC debt is priced – combined with an expanding war risk premium on regional assets will push funding costs significantly higher.

Crucially, a ceasefire involving only the US would not eliminate Iran-related geopolitical risk, suggesting this premium is likely to persist.

The impact will be broad-based, raising the cost of capital across sovereign issuance, bank funding, corporate borrowing and project finance, and tightening financial conditions across the region.

The UN estimates that direct war damage to the GCC thus far exceeds $200 billion. However, this is a fraction of the losses sustained due to lost petrocurrency revenues and shifts in sentiment regarding the GCC’s tourism and business ecosystem.

The GCC’s dollar pegs constrain monetary easing by regional central banks. With the US dollar strengthening since the war began and inflation risks limiting the scope for aggressive Federal Reserve easing in 2026, policy flexibility remains tightly restricted.

Because GCC currencies cannot devalue, the burden of macroeconomic adjustment falls disproportionately on asset markets. This is already evident in equity performance, with Emaar Properties shares down more than 35 percent from their pre-war peak.

While Emirates airline is not publicly listed, the sharp rise in jet fuel costs and the hit to tourism will weigh heavily on Dubai’s aviation sector, which accounts for roughly 27 percent of the emirate’s GDP.

The war will reshape Dubai’s property market. Off-plan launches represented two-thirds of a record $187 billion in transaction volumes in 2025. However, transaction volumes could sink as low as $40 billion in 2026 without the off-plan ballast.

UAE property developers can no longer rely on presales financing from investors at the very moment they have raised $6 billion in global capital markets – a combination that creates a clear blueprint for a debt squeeze.

While GCC banks are well capitalised and liquid, they will face higher borrowing costs in the global interbank market and losses on their property loans as their exposure to the sector is still excessive at 15-25 percent.

Bahrain could face more sovereign debt downgrades since its energy infrastructure has been extensively attacked by Iran and it is not exporting any diesel, naphtha, jet fuel or aluminium via Hormuz. Iran war risk is also a geopolitical sword of Damocles on the growth of the GCC’s financial hubs.

Paradoxically, even the steep rise in Brent crude and liquefied natural gas is actually negative for the GCC as it increases the risk of a global recession. It also accelerates the diversification strategies of its Asian clients away from the Middle East.

A higher-for-longer risk premium on GCC assets is also now inevitable.

The article Gulf’s growth model faces its first true stress test appeared first on Arabian Post.

The past eight weeks have seen a multi-trillion-dollar market cap meltdown. Wall Street developed a sudden aversion to software companies, viewing them as victims of the AI revolution. At the same time, the war in the Gulf has led to a sharp rise in the Volatility Index, the US dollar and US Treasury bond yields.

These are macro headwinds for high-beta Nasdaq sectors, including software, and have cast financial storm clouds over even large, established businesses in the US, Europe and Asia.

While it is premature to conclude that enterprise software firms will share the fate of horse-drawn buggies and black-and-white TV, the fact remains that technological obsolescence is a recurrent, even traumatic, theme in the Digital Age.

The private credit industry’s perma-bull cheerleaders lambasted JP Morgan chairman Jamie Dimon when he warned about credit “cockroaches” in their opaque, illiquid, $1.7 trillion alternative funding market. His comments followed two spectacular US corporate failures last autumn – subprime auto lender Tricolor and car parts maker First Brands.

However, Dimon’s pessimism has been vindicated by clear evidence of a liquidity crisis. Institutional investors have not been able to redeem their investments even in some of Wall Street’s largest bellwether private credit funds, where credit exposure to the software/IT services sector can range from 45 to 60 percent.

The problems in the software sector are likely to get worse if $100 Brent forces the Federal Reserve to raise interest rates in order not to violate its inflation mandate at a time when the global economy is stressed by war and the greatest oil supply shock since October 1973.

If this happens, rising defaults in the software sector may trigger cross-asset contagion and pose a systemic headwind for the US central bank at a time when the capital markets will surely test Kevin Warsh, the incoming chairman.

Yet the sudden bankruptcies of Tricolor and First Brands were just the tip of the credit risk iceberg. Real systemic cockroaches have now emerged in the global software business, which Silicon Valley wunderkind Marc Andreessen once boasted would eat the world.

Instead, software is now in danger of being eaten alive by AI’s crown jewel disruptors. Anthropic proved this with a vengeance in early February, when its AI-powered legal research tool gutted the valuations of Thomson Reuters and LegalZoom by 25 percent in a single trading session.

The wolves are now also circling private equity amid a tsunami of investor redemptions and as failed buyouts devastate the shares of the bluest-chip Wall Street alt asset managers.

Blackstone, KKR, Carlyle, Apollo, TPG and Ares manage the largest private credit exposures from the Gulf – at least $100 billion in private credit allocations from the GCC’s biggest sovereign wealth funds, ultra-high-net-worth investors and family offices.

Their shares have fallen from 45-60 percent on the New York Stock Exchange as the macro storm clouds darken in both private and public capital markets.

Private credit was previously a niche $300 billion industry that emerged as a result of the restrictive Dodd-Frank banking regulations enacted in the immediate aftermath of Lehman Brothers’ failure in 2008. Then, money centre banks such as Citigroup, Merrill Lynch, Morgan Stanley, UBS and RBS barely survived the global financial crisis without explicit or implicit taxpayer-funded government bailouts.

In return for the bailouts, global banks were forced to abandon the high-yield, unregulated, middle-market direct-lending segment. This left the field open for a new breed of leveraged, unregulated asset managers who claimed to have discovered a secret sauce to generate 300-500 basis points higher annual returns than those available in equities or high-yield bonds.

Sadly, the senior executives of the Gulf’s sovereign wealth funds, pension funds and family offices bought the Yale endowment model ideology peddled by Wall Street’s private credit merchants of debt.

The executives ignored the fact that the endowment model seriously exposes a financial institution to credit risk in illiquid markets.

US private credit’s exposure to software and IT services now imply an unexpected debt shock at the pinnacle of GCC finance – at a time when the Iran war could mean unexpected demand for liquidity in even sovereign wealth funds. Once again, hubris on Wall Street could mean nemesis for GCC capital allocators to US private credit.

Swiss megabank UBS estimates that private credit defaults will rise to 13 percent due to AI disruption, against only 4 percent in the US high-yield debt market. Software services is another danger zone as the freefall in the shares of Accenture, IBM, Tata Consulting Services and Infosys suggests.

This is beyond just routine credit risk. It is existential and the Gulf must brace for an external debt crisis on the scale of Latin American sovereign debt in the 1990s, mortgage derivatives in the 2005-07 credit bubble and the systematic destruction of China’s property developers over the past decade.

I was aghast when I saw GCC-based commercial banks in even the Northern Emirates sell 10 times leveraged notes on high-risk products like Asian high-yield funds, which blew up when China’s ultra-prime property developers defaulted and the biggest real estate bubble in human history was destroyed by President Xi’s Politburo.

A 13 percent default rate in US private credit means hundreds of billions of dollars will have to be written off worldwide by lenders whose loan covenants simply cannot price the scale of value destruction we have seen.

If the shares of global software colossi such as Microsoft, Adobe and Salesforce can lose 30-50 percent since last summer, what hope is there for the thousands of private software/services firms backed by alternative asset managers who routinely market their funds to elite GCC investors?

The lack of regular reporting by private credit funds means it will take some time before the cockroaches trigger a bottom-line bloodbath – but it will happen.

This debt crisis has the potential to cause a global recession and end the asset market euphoria of the Roaring Twenties.

The article Private credit’s meltdown will hurt Gulf SWFs and family offices appeared first on Arabian Post.

The moment Qatar Energy declared force majeure and cut output at Ras Laffan, the largest LNG complex on the planet, once Iranian missiles and drones began raining down on America’s Gulf allies, I knew that the time had come to hedge Strait of Hormuz chokepoint risk with by buying the shares of US LNG colossus Cheniere Energy (LNG) at $220. Yet I was stunned to see its price rise to $245 as the US-Israel and Iran competed to escalate the geopolitical stakes in yet another tragic Middle East war now destined to go down in history as the Third Gulf War after the convulsions of Kuwait/Desert Storm in 1991 and the neocon invasion of Baathist Iraq in 2003.

Cheniere is now Europe’s LNG exporter of the last resort now that the Old World cannot rely on gas imports from Russia or Qatar. The global demand for reliable American LNG from Cheniere’s multiple giant re-gasification plants on the Texas and Louisiana Gulf Coasts is now insatiable. No wonder this puppy (actually a giant St. Bernard in the gas business) has risen from $220 when Trump first declared war on the Ayatollah on Truth Social to $250 now as the war enters its 11th day. It seems so remote now but Cheniere, which I profiled few times in my posts last year (https://matein.substack.com/p/modiji-asimji-and-lng-realpolitik) when it was trading at 188 in mid-December when I closed my trading book on Christmas Eve and flew to Alex/Cairo on an archaeological discovery trip.

Easy money has now been made on this stock but I still see upside to $270-$280 if the war continues in its current intensity. Khamenei’s Jr. is beholden to the IRGC thugs who have crowned him as the new Supreme Burrito and the IRGC has resolved to wage a war of attrition against the US, Israel and the GCC, using the global economy as their instrument of leverage. This means, the world’s LNG market will retain its post traumatic stress disorder (PTSD) even if Trump declares a victory tomorrow.

Even though Cheniere has 40% market share, I expect it will grow at its rivals expense as it has already spent untold billions in its capacity expansion while its competitors are still in the process of ramping up their capex to build capacity. US natural gas is a global growth area as I doubt if the Seven Sisters will scale up their existing LNG footprint in the Gulf as long as a terrorist theocratic regime continues to exist in Iran.

After Exxon and Chevron’s spectacular success in Guyana and Australia LNG, I believe Brazil and Argentina will be the next El Dorados of global energy – the epic quest for oil, money and power in Dan Yergin’s The Prize is the secret history of the world in the Age of Trump and Bibi, just as it was in the time of John D. Rockefeller, Nubar Gulbenkian and J. Paul Getty 125 years ago.

The article The Iran war makes Cheniere Energy (LNG) a must own stock to hedge Gulf geopolitical risk appeared first on Arabian Post.

The geopolitical convulsion in Iran has led to panic buying in Brent crude as Saudi Arabia’s largest refinery Ras Tanura and Qatar’s LNG mega complex at Ras Laffan shut production even as tanker traffic in the Straits of Hormuz comes to a halt amid soaring war risk, insurance premia, IRGC attacks on oil tankers and a 3X spike in VLCC/LNG freight costs. This is a disaster for India, the world’s third largest crude oil importer at 5-MBD, of which no less than 2.6-MBD originates from the Gulf states and Iran via the Straits of Hormuz maritime choke point.

A protracted war in the skies above Iran or a blockade of Hormuz would have a disastrous impact on India’s current account deficit and set the stage for the Indian rupee, the worst performing currency in Asia despite Modi’s (56 inch) chest beating propaganda to inexorably depreciate to 100 against King Dollar, the planet’s resurgent FX safe haven. Higher inflation in India amid a widening current account deficit at fiscal pressures would ignite capital outflows from Dalal Street in Asia’s most expensive stock market.

The GCC is the destination for 15% of Indian exports and its entrepôt Dubai is the transshipment hub for Indian exports to Europe and Asia. The 10 million Indian workers in the GCC also account for 40% of $135 billion in global remittances it attracted last year. The UAE is a favourite destination for India’s financial elite and the Iran crisis has exposed its vulnerability to drone and missile attack on its airport, seaports, five star hotels and luxury villa enclaves on man made islands in the Gulf.

There are 3.8 million Indians living, working in the UAE, which is also the second largest market after the US for Indian electronics exports. The end of the Dubai property bubble and the escalation of US-Israeli aerial attacks on Iran are thus a financial, trade, diplomatic and human disaster for the Indian diaspora.

India’s high-net worth elite will increasingly favour Singapore/Hong Kong, Switzerland and even Malta as safer hubs for their offshore nest eggs than the UAE, Bahrain or Qatar since geopolitical and logistics risk in the Gulf have just skyrocketed.

The Indian rupee has fallen 10% against the US dollar in the past 2-years. The Indian rupee was 58 when Modi was first elected prime minister in May 2014 and has now fallen to 92, a horrific 48% depreciation in a decade when the BJP supposedly delivered an economic miracle. This 48% fall in the Indian rupee since 2014 is one reason why so many Arab ultra high net worth family offices I know in the Gulf refuse to invest in Indian private equity apart from the usual complaints of dodgy sponsors, manipulated IPOs, high taxation, onerous bureaucracy and politicised securities regulator. All these trends will be magnified by the Iran crisis and inevitable fallout on the Indian rupee, inflation, current account deficit and a steeper INR yield curve.

The Iran crisis’s endgame could well be $100 Brent and a plunge in cross border trade and private investment flows that could presage a global recession even as inflation and interest rates surge in India. The volatile geopolitics of the Middle East will only amplify the traditional Indian investor penchant towards hard assets such as gold and silver over financial assets like equities, G-Secs, corporate bonds, mutual funds and private equity.

The anti-rupee phobia of long term Indian HNW investors in the Gulf will be reinforced by a steeper depreciation path for the INR in the next 3-years. Indian wealth will naturally gravitate to the offshore embrace of King Dollar. The parabolic rise in global gas prices after the closure of Qatar Energy’s LNG complex, the largest in the world, is also a disaster for the Indian fertilizer and crop nutrient market, which is also hostage to the war in the Gulf. Modi could thus face political unrest in the next wave of Indian state elections, particularly in the agricultural heartlands of the Punjab, Haryana and UP.

The loss of Iranian imports and a multi-billion dollar write off in India’s investment on the Chabahar Port in the Gulf means, India is at the mercy of Trump not to impose punitive tariffs on its cheap Russian oil and gas imports.

The sharp rise in the Indian VIX to a 9-month high reflects panic on Dalal Street amid a quest for protection from a Nifty whose downside risk could be a lot more than 25,000 as corporate earnings growth assumptions must now be reevaluated in a grimmer macro/INR zeitgeist.

Hopefully, the return of El Niño will not mean a weak monsoon that will aggravate the fuel price hit to margins and rural demand. The RBI cannot ease in this macro milieu and even a 6.7% G-Sec rate is insufficient to offset the higher inflation risk implicit in $85 Brent crude. My fave short remains the paint sector for obvious reasons, especially since Asian paints is losing market share to Grasim even as input costs soar to wreck margins.

The article Iran war is an economic disaster for India appeared first on Arabian Post.

Five days of continuous Israeli and US bombing of Iran, the killing of Ayatollah Khamenei and at least five dozen other senior military and political leaders of the Islamic Republic, the de facto closure of tanker traffic in the Strait of Hormuz, the shutdown of Saudi Arabia’s Ras Tanura refinery and the world’s biggest LNG complex in Qatar, as well as retaliatory drone and missile attacks by Iran on airports, seaports, hotels, military bases and embassies in all six GCC states.

These are unmistakable metrics of regional escalation with no immediate prospect for a ceasefire, let alone a viable diplomatic solution.

After a muted response in the first trading session since the start of Operation Epic Fury, global financial markets are now pricing in the seismic macroeconomic fallout of a full-scale, high-tech war that has not spared the Gulf’s energy infrastructure and maritime chokepoints, restricting the passage of almost 20 percent of the world’s oil and LNG supplies from the strait to the Arabian Sea.

The global economy now faces the simultaneous shock of a hit to industrial growth and higher inflation.

The nightmare stagflation scenario was instantly reflected in global commodities markets.

Brent crude has surged from $60 per barrel just before US President Donald Trump’s use of military force to capture and extradite Venezuelan leader Nicolas Maduro on January 3 to above $82 now, a 28 percent geopolitical risk premium that shows no signs of short-term compression.

Natural gas prices in Europe have risen by a catastrophic 65 percent and saddled the continent with its worst energy crisis since the Kremlin’s invasion of Ukraine and sanctions on Russian gas imports in 2022.

War-risk insurance premia have skyrocketed from 0.2 percent to 1 percent in Lloyds of London, while oil and LNG tanker freight rates have tripled since Epic Fury began five days ago.

No wonder industrial metal prices on the LME are down 4-5 percent, led by Dr Copper and nickel, even though crude, natural gas, heating oil, jet fuel and diesel prices exhibit all the signs of a supply shock.

The impact of a full-scale Middle East war on the $9 trillion-a-day global foreign-exchange market has been traumatic.

The US dollar and the Swiss franc have emerged as the classic safe-haven beneficiaries while the euro has fallen from 1.18 before the war to 1.16 now. Sterling is trading at a mere 1.3280 against the US dollar even as traders price out the prospect of any imminent Bank of England base rate cut this spring.

The EU and Britain are far more vulnerable to a cut-off of oil and LNG imports from the GCC than a US economy insulated by its vast shale oil resource endowment.

Risk-sensitive currencies such as the Australian dollar, the South African rand and the Indonesian rupiah have swooned in unison against a resurgent King Dollar as the war escalated in the past two days, with the most damage felt in the stock markets of energy importers such as Japan, South Korea, Taiwan and even China.

The KOSPI in Seoul, the best-performing major stock index in the world with a 150 percent rise since January 2025, is now limit-down with a 5 percent daily loss on Tuesday, March 3.

The winds of war have cast a big chill on the energy-intensive industrial constellations of the Pacific Rim, the planet’s preeminent economic centre of gravity.

The US dollar index has risen almost 2 percent to just below 100 on safe-haven flows into the greenback as fighting rages in the skies above Iran and the Gulf’s energy complex virtually shuts down.

This is the doomsday scenario for the energy-importing emerging markets of Asia, led by China and India.

China depends on the GCC, Iran and Iraq for 45 percent of its energy imports. While the PRC is the sole buyer for 90 percent of Iran’s sanctioned oil exports at cut-rate prices, loadings from Kharg Island constituted only 12 percent of Chinese oil imports.

The loss of Venezuelan and Iranian cut-rate crude is a macroeconomic headwind for China but the Politburo’s decision to replenish its strategic petroleum reserves to 110 days of demand will protect the Dragon Empire from a short-term energy crisis. However, it is doubtful whether Beijing will achieve President Xi Jinping’s 5 percent GDP growth target for 2026.

Inflation risk rightly obsesses the world’s bond markets since a protracted war in the Gulf, a global energy shock, a decline in Europe and the Pacific Rim, industrial production and deglobalisation are all inconsistent with a goldilocks scenario, let alone any Panglossian hopes for price stability.

No wonder the yield on the 10-year US treasury note, the planet’s cost of long-term capital, has risen from 3.94 percent to 4.10 percent in the first days of Operation Epic Fury.

A US stock market trading at a valuation multiple of 22 times earnings and consumed by worries about AI disruption, Trump’s new tariffs and Wall Street’s private-credit cockroaches, must now contend with a rise in inflation amid the exogenous shock of yet another war in the Gulf.

Prospects for a Federal Reserve rate cut at the March or even June FOMC meetings amid such geopolitical and energy market turmoil are utterly unrealistic.

Risk assets, led by high-beta technology stocks and speculative assets like crypto and silver are vulnerable to steep sell-offs as plunges in bitcoin, which has recovered a little following a 5 percent drop, ether and silver futures attest.

Even the yellow metal has lost its lustre as a safe haven above $5,300 an ounce as global markets exhibit a new spasm of risk aversion.

In this uncertain milieu, cash is king but it is prudent to be careful about the currency and bank in which you choose to squirrel your money.

The article Global markets price stagflation risk from a protracted war appeared first on Arabian Post.

Mr. Market is a metaphorical schizophrenic pendulum who swings between extremes of fear and greed, thus giving us a chance to make money at inflection points on both ends of the spectrum. So here we are in a surreal world of extreme fear on Nasdaq where the PEG ratios for Procter & Gamble is 5.4, for Coca Cola is 3.64, Johnny-Johnny is 2.4, Pepsi is 3.25, while the four horsemen of the Apocalypse, which I consider is the four best companies not just in the world but in the history of capitalism, all offer PEG ratios that make every value investing DNA in my nervous system go Radio Gaga.

As a portfolio manager, I am supposed to crave secular earnings growth/unassailable moats and turn cartwheels when Mr. Market’s irrational disexuberance gifts me the four best businesses ever built in the Milky Way at a PEG ratio just below 1. So I hit Microsoft for a sixer at 385, Amazon at 196 and Alphabet at 303 and am just waiting on another 5% down day on Meta to initiate a long somewhere 610-620.

In essence a portfolio manager has one great unknown and one great known variable. They are known as how much EPS growth the company will generate and how predictable is this future stream of earnings growth? The known variable is what am I willing to pay for this future stream of earning growth adjusted for an entire subjective predictability quotient. So when Mr. Softy, Google and Amazon offer me a PEG ratio just below 1, I do not hesitate. I act. This trade is a no-brainer in my risk-reward calculus but I concede that time, as usual, will have the last laugh since it is only when the tide goes out, do we discover who was skinny dipping beneath the tidal wave of Nasdaq’s twilight when the real money is to be made flipping off-plan launches as a prelude to flipping burgers beneath the golden arches of Mickey D!

The article Best PEG in history is now on sale on Wall Street! appeared first on Arabian Post.

I dedicate this post to my dear friend Abdulla Saeed Al Naboodah who has Ferrari in his spirit, bloodstream as well as in his garages. I went gaga on the Ferrari IPO in 2015 as I viewed the world’s preeminent luxury car maker as unique since it restricted supply to an elite global community rather than peddled product to any joe who could afford a Beamer and Benzi. The rich of Nairobi are even known as Wa-Benzi LOL!

Ferrari (RACE) is up 7X since its IPO a decade ago but has fallen 27% since its 519 high in July 2025. Now Q4 earnings, the 2026 output target, EBITDA guidance and the launch of the Jony Ive’s designed EV Luce have lifted RACE from 328 to 380.

AI will never disrupt the legacy of Dottore Enzo Ferrari and Maranello while Trump tariff risk will be gladly paid by the buyer just as long as he can get hold of the supercar of his choice. While the algorithmic cowboys of Wall Street crowbar the MAG-7, Ferrari remains my Magnifico numero uno, both in its share price and the next time the flying horse team races down the F1 circuits from Monte Carlo to Silverstone to Yas Marina in Abu Dhabi. True beauty is timeless and the history of La Bella Italia is also history of beauty. Ferrari shares in Milan and New York are now in my risk/reward calculus radar screen via the Chicago options exchange, as usual once gamma risk settles down.

A cheaper way to accumulate a stake in Ferrari is to buy the shares of the Agnelli family’s holding company, which is listed in Amsterdam, Frankfurt and pink sheet in the US. Exor was the brainchild of the legendary Turin industrialist Giovanni Agnelli, who was both the prince of post war Dolce Vita and the ultimate Renaissance man, financier, geopolitical powerbroker, art lover, skier, racing fanatic and playboy extraordinaire and the genius industrialist who rebuilt the FIAT empire after the disaster of the Mussolini regime and the Nazi occupation of the Italian peninsula.

L’avvocato’s grandson John Elkann is now chairman of Exor, which owns a 20% stake in Ferrari. Elkann also chairs the sad incarnation du jour of FIAT known as Stellantis. Exor now trades at a 52% family controlled discount, which would have been justified had John just been yet another 3rd generation family princeling catapulted to the boardroom because Nonno happened to be Giovanni Agnelli. Elkann has generated 18% annual return in the Exor NAV against MSCI World Index benchmark’s 11% since 2009 when he became capu di tutti capi/CEO at Exor. So the optimal backdoor into Ferrari is via Exor as the value of the stake rises and the NAV discount goes from Godawful to just plain awful, my ideal profit delta sweet spot.

Ferrari stock is the crown jewel of Exor and 80% of its $18 billion market value even though its assets are $40 billion. So as Ferrari revs up, I expect the Exor NAV discount will narrow to its 28% average since the GFC. Stellantis is a drag but it now trades at a rock bottom val to even its big auto peers in Europe, Japan and Detroit.

The best fund manager in the world for Ferrari is Exor since Elkann is also its chairman. He sold $3 billion of Ferrari shares near its all-time high in early 2025. So I just mimicked the trade and had my own little dolce vita in the prop book. His $9 billion PartnerRe reinsurance deal was brilliant too. I have no doubt that Exor will make Ferrari great again

The article The bullish case for the Ferrari ADR in New York! appeared first on Arabian Post.

Something is dangerously wrong in a world where the price of gold rises 30% and silver surges a surreal 65% in a single month, as we witnessed in January 2026. True, an American carrier strike force with a full complement of 80 F-18 Hornet war planes and missile destroyers laden with Tomahawk cruise missiles has sailed from the South China Sea into the Gulf. Once again, as in January 15 1991, October 07 2001 and March 20 2003, the United States is on the precipice of war in the Middle East and history is about to move fast forward towards an endgame none of us can predict. Only one thing is certain now, the US dollar is no longer a Pavlovian safe haven asset for the world’s macro hedge funds and Big Money financial gunslingers. Gold has replaced the greenback – for now.

In the 1990’s, my default FX trade whenever an American President opted to strike Baathist Iraq was to buy the Norwegian kroner and sell the Turkish lira as a classic Gulf oil geopolitics trade but I will not do this now since the geopolitical risk premium in Brent at 70 is still far too low and the Nokki is not the petrocurrency rock star it used to be while the Turkish lira is no longer the high inflation perma-sad sack it was before Grand Vizier Mehmet Şimşek replaced the AKP’s Damad Pasha (this office of the royal son-in-law did not end with the Ottoman Sultans but was resurrected by Sultan Recep Erdoğan of the AKP!).

Why bother playing money games with currencies in Oslo and Istanbul when the hottest action in the world is just to do a carry trade by borrowing dollars to accumulate Dr. Auric and the best gold mining stocks on the planet, notably Newmont, Agnico Eagle and Freeport McMoRan. A gold/copper play I flagged at 38 in a November post, which is now above 64. This is my idea of heaven but the price action in commodities shows that someone out there is expecting the worst when Uncle Sugar strikes the Persian Empire of the Ayatollahs and their despised Agha Zadeh offspring, who did not hesitate to massacre 5,000-8000 young protestors in 3-days to preserve their evil and corrupt dictatorship.

It is significant that protestors even in theocratic strongholds like Mashhad, Qom and Khoemin, a birth place of guess who?, shouted long live the Shah, the ultimate insult to the mullahcracy that has taken Iran to the Dark Ages since 1979 and caused the deaths of hundreds of thousands of innocent people across Iran, Syria, Lebanon, Iraq, Yemen, Kurdistan and the Gulf. Will Trump be their final nemesis? Who knows? Trump can go taco if the deal is sweet enough for him and the difference between mullah and moola is a thin line in Trumpworld as Bloomberg investigative report on Mojtaba Khamenei’s global property empire in London, Paris and Switzerland attests.

I doubt if the Supreme Leader will follow his protégé, the murderous Bashar Assad into exile in Moscow. The martyrdom narrative his regime has peddled to goad countless young teenage Iranian boys and young men to walk on minefields in the trenches of Khorramshahr, Fao and Basra during the war with Iraq in the 1980’s is not for the Big Daddy’s of the Revolution, who prefer to hide in a bunkers when the warplanes of the great satan drop into say hello. As a human being, I desperately hope diplomacy saves Iran and the Gulf from a catastrophic war.

Regime change can best come if the regime transforms itself, which may happen if the Americans somehow eliminate the top 1000 commanders of the IRGC and a kabal of secular nationalist generals in the regular army (Artesh) seize power from the Ayatollahs. That could be the best case scenario for a post-Khameini Iran. Imagine if a new Cyrus Accord brings peace to the Middle East in the name of the Achaemenid Shah who founded the Persian Empire 2500 years ago, released the Jews from slavery in Babylon and wrote the world’s first human rights protocol. Now that would be a world worth living for! Sleep Cyrus for we are awake – piroozi nazdik ast!

The article So it is once again war or peace in the Middle East? appeared first on Arabian Post.

Zohran Mamdani’s election as Mayor of New York City is the worst nightmare for the Big Apple’s commercial landlords, the reason why the shares of SL Green and Vornado have been sandbagged on the NYSE. The last thing a soft Manhattan office market with a plunge in inbound foreign tourism and spike in the 10-year US Treasury yield needed was a 35 year old self declared socialist Marxist who wants to freeze rents, which are admittedly exorbitant in the most exciting city I have ever lived in my life or visited anywhere on the planet. Even Mother Nature has turned against New York City REITs as Manhattan and the Boroughs are blanketed white by a severe winter snow storm that has paralyzed the city that never sleeps.

SL Green (SLG) shares on the NYSE were slammed from their $68 high a year ago to $46 now. SL Green is a ritzy midtown landlord that owns 32 million square feet of offices/condos in Manhattan alone. Mamdani’s election was a disaster for New York office REITs since it triggered an exodus of wealth from Wall Street and the yuppy wastelands of the Upper East Side to the balmy, low tax embrace of the sunshine state, which now even hosts a former Manhattan property developer turned Emperor of the World. So Mamdani was the best thing to happen to Florida since Miami Vice and the construction of Walt Disney’s theme parks in Orlando. Oscar Wilde taught us that price is what we pay, value is what we get and a man who knows the price of everything knows the value of nothing (obviously a real estate broker LOL!).

A bear raid in 2023 after the failure of Silicon Valley Bank evoked fears of vast CRE loan losses in US regional banks took down Vornado office REIT to $15, where its portfolio of Manhattan office towers traded at prices below those then prevailing at Business Bay and Karama. This was insane, so I knew Vornado was a no-brainer buy at $15 and the REIT repaid my faith by rising in price a year later to 45, a rare triple bagger in securitized New York property.

Lady luck, Mamdani Junior and the seven sigma meltdown in the Japanese bond market on Black Tuesday (Jan 20th) have once again given me another gift horse I dare not look in the mouth. SLG now trades below the value of the admittedly pricy land on which its Manhattan office empire is built. So Hallelujah! No free lunches in Dubai property but a free lunch in New York City for Matt.

Zohran is no Lenin. NYC will remain the financial, media, fashion, art and literary capital of the world, no matter what happens in the White House. I love the idea of buying one of the world’s great commercial empires for just the value of its land with the lolipop of a 6.8% dividend yield while I wait for Xanadu.

I concede the bubonic plague is not over in office since occupancy rates are still only 50-55% of pre-pandemic levels due to Zoom, Teams and digital nomads. Mamdani’s election has cured the new supply dilemma that is the Achilles heel of CRE landlords in midtown Manhattan. One Vanderbilt was a AAA megaproject. The vacancy rate in NYC is still a ghastly 22% but, like Audrey Hepburn, am singing in the rain at the prospect of another New York REIT triple bagger. Love ya New York and go Knicks

The article Zohran is no Lenin appeared first on Arabian Post.

Marriott (MAR) is the world’s preeminent hospitality business with 1.7 million hotel rooms located in 9800 properties in 140 countries. Sadly, its shares were a Cinderella last year, underperforming the S&P 500 index with only a 14% return due to the decline in inbound foreign travel to the US triggered by Trump’s tariff threats, immigration crackdown and restrictive visa rules. Hopefully, Marriott will prove a better investment in 2026 since the US, Canada and Mexico hosts the FIFA World Cup, a planetary sensation every four years for billions of soccer fans.

Since Marriott derives 75-80% of its revenues from hotels located in US and Canada alone, I believe it will be the ultimate beneficiary of the first World Cup to be held in Gringolandia since 1994, as well as celebrations to commemorate the 250th anniversary of the US Declaration of Independence from the British Crown in 1776. So why Marriott and why now?

One, this hotel chain owns 30 hospitality brands, most are global icons in their own right – Marriott, Sheraton, St. Regis, Westin, Ritz Carlton, Le Meridien, Bvlgari, W Hotel, MGM Collection on the Las Vegas Strip, Renaissance Hotels, Courtyard by Marriott airport hotels etc.

Two, Marriott has luxury, premium, business, budget and resort hotels that cater to every kind of traveller and every hotel owner located anywhere in the world. This global hospitality ecosystem is only matched by Hilton and to a much lesser extent, Hyatt, IHG, Accor and Four Seasons.

Three, Marriott boasts a premium valuation of 29X and 18X EV/EBITDA but Hilton is even more expensive at 33X and Hyatt is a nosebleed 46X earnings. Great for the Chicago’s Pritzker clan but I cannot justify this multiple.

Four, Marriott has the ultimate asset light model since 98% of its branded hotels are either owned or franchised by third party entrepreneurs. Its 30 carefully positioned brands and 270 million member loyalty program naturally attracts every wannabe hotel owner in the world who can afford its steep 4-6% management fees and high operating costs.

Five, Marriott’s asset light model where it does not take any hotel construction or development risk but passes it on to the owner, yet uses its global procurement technology talent and financial control to operate the hotel under its brands equates to recurrent annual revenue and high returns on invested capital (ROIC). In other words, a money machine.

Six, Marriott will earn 15-17% EPS this year at a time when US economic growth is accelerating and a record high in US household net worth due to Wall Street has stimulated consumer desire for travel and new experiences. This is the anchor for the 29X valuation, higher than Nvidia or Meta in Silicon Valley.

Seven, Marriott’s 30 brands enable it to gain market share in every segment of the hospitality business. Marriott also has 18% of the global hotel industry’s future supply in its development pipeline, a classic harbinger of future growth.

Eight, Marriott has shown great finesse in its acquisition/partnership track record. The post merger integration of Starwood’s luxury resorts was a beauty as was the decision to partner with MGM for its gaming hubs like Bellagio, MGM Grand, Luxor in Vegas.

As we say in Wall Street, Marriott provides different strokes for different folks and the world’s biggest loyalty program, the tissue that connects 30 iconic, global hospitality brands. This is a class act as it strives to get 100% of the travel as well as hotel development wallet from both guests and entrepreneurs without taking any risk on land prices, financing or construction process.

I would ideally love to buy Marriott at 270, which may be possible if Trump ignites another Greenland style geopolitical crisis or trade war. This may not be possible other than via extensive use of Marriott’s Chicago listed equity options to lock in my preferred price/value range.

Nine, I expect the FIFA World Cup will help raise Marriott’s occupancy rate and average daily room rate (ADR). This means a certain rise in RevPar, the primary metric for hotel valuations and growth curves. Net-net, MAR is a no-brainer buy for me at 270 and a Pavlovian sell at 350. After all, all good things come to an end as Axl Rose so rightly observed. “Nothing lasts forever. We both know hearts can change. It’s hard to hold a candle in the cold November Rain”. The FIFA World Cup will end but Tariff Man will go on-and-on for a third/fourth term as he reshapes world history.

The article Marriott is a credible FIFA World Cup hospitality play in 2026 appeared first on Arabian Post.

The tragic images of the bloodbath in Iran, caused by the regime’s crackdown on protests have horrified the world and amplified the price surge in both oil and precious metal markets, with silver at $95 an ounce and tin up almost 30% in the first two weeks of 2026.

Emerging markets will unquestionably be the dominant theme of 2026 now that the macro data suggests that the US economy is in goldilocks mode, not too hot on inflation as the latest CPI was well below 3% at 2.7% and not too cold on growth, which remains well above 2.5% GDP trend growth.

It is not a coincidence that the South Korean country ETF EWW, was up 90% last year and is up 10% in 2026, making money in nine consecutive trading sessions. Why is Seoul so hot as an investment destination even for a guy like me who cannot take endless inputs of kimchi and soju? One, I really call South Korea not just ROK but the Republic of Samsung since this chaebol (conglomerate) generates 23% of its $1.9 trillion GDP. Eat your heart out Mukesh bhai since even a colossus like Reliance is 8-10% of the Indian GDP, the reason the Bharatiya Janata Party has 110 million members, making it bigger than the Chinese Communist Party. Who knows what will happen when Mumbai is renamed Jio de Janeiro LOL?

Samsung Electronics and Hynix Semiconductor are 38% of the South Korean market cap. So the big money was made last year when things went from Godawful to just plain awful after President Yoon imposed martial law and then was arrested in a thankfully peaceful democratic counter-coup. The KOSPI rose from a rock bottom valuation of 5X earnings to 10X earnings due to the AI frenzy that lifted the Mag Two in Seoul. Yet I still think South Korea is cheap relative to Taiwan’s 17X val.

Despite the epic supply glut and surge in non-OPEC production from Texas shale, Canada, offshore Guyana, offshore Brazil and Argentina, Brent has finally risen from 59-64 as the Iran protests have escalated and Trump has publicly vowed to respond with military intervention. The safe haven bid in gold means Dr. Auric now trades at $4636 and silver is at $90.35 an ounce as I write, making the past two months one of the best money making opportunities in my lifetime for silver and copper bulls.

FCX, which I flagged as a must own to my friends in November under my nom de guerre Abu Nuhas closed last night at 59.34 even as Dr. Copper trades at all time highs above $13,000 a metric ton on the LME.

Trump’s threat to impose a 25% tariff on countries doing business with Iran is a double whammy for the Middle Kingdom, which buys 90% of its sanctioned exports at cut rate prices for its teapot refineries in Shandong Province.

Brent crude was a perma-short for me in 2025 as it fell 21% from $75 to $59 but the mass protests in Iran have forced me to flip to an energy bull – for now. Brent has risen almost 5% in the first two weeks of 2026 as events in Tehran have made history go forward in the oil market, exactly as it did in 1979, when the Shah lost his Peacock Throne. Iran never produced more than 4% of global oil supplies but the 1979 revolution caused a 150% rise in oil prices in the Panic of 79. I do not see how Brent forecasts of 90 or $100 are justified even if Israeli and US forces intervene militarily in Iran and bomb tanker loading terminals in Kharg island, China can just replace 1-MBD of Iranian crude with Saudi, Iraqi or UAE oil with two caveats. One, nothing must happen to close the Straits of Hormuz to tanker traffic. Two, China will have to pay full price for alternatives to the cut rate Iranian crude import windfalls it enjoys now. The Persian people now know that the Dragon Empire is no friend of theirs as once the flag of Iran changes to the lion and the sun.

China is the world’s top crude importer in 2026 and any punitive tariffs mean the trade war with the US restarts. Since Trump has not followed his Truth Social threat with a White House Executive Order on the 25% tariff, the stock market has not priced-in this as a credible scenario. 2025 was my year to buy gold and 2026 is my year to buy black gold!

The article 2025 was my year to buy gold and 2026 is my year to buy black gold! appeared first on Arabian Post.

2026 has started with a bullish bang for my Dr. Copper trade, even though a single trading session when half of Asia is still getting over its New Year’s Day hangover is hardly an optimal sample size. Yet as I see LME spot copper trade at $12500 a metric ton, I feel exhilarated as this is precisely the breakout I flagged for my friends and readers a month ago before riding a 30%+ return on FCX, the world’s largest NYSE listed copper and gold producer, as well as the red metal tracker COPX.

With the US Dollar index on the ropes at a tad above 98, an epic build out in AI infrastructure and EV assembly lines ensures that copper demand will be white hot as the world’s largest mines in Chile, Peru, Zambia, DR Congo and Indonesia are all supply constrained due to labour strikes, mine accidents, awful logistics, geopolitics and big mining’s aversion to exploration capex. So I view my copper trades as far safer than my occasional flutters in silver since their intrinsic volatility adjusted returns are both higher and more sustainable than the risk calculus available in silver mining shares.

Trump’s $150 billion “big beautiful bill”, Merz’s rearmament/infrastructure program and President Xi’s trillion yuan fiscal lollipops to revive consumer spending in the Dragon Empire all add to bullish omens in copper, though the red metal could be temporary collateral damage if the precious metal markets freak out when the 10-year US Treasury bond yield spikes to 4.50% as the imminent return of the bond vigilantes in Chicago’s futures pits tell me they will in Q1 2026. So remain long yen and short TLT as a macro hedge but eager to sell gold put spreads when the 14-day RSI is 56 or lower while the vol spreads on Auric align with the macro stars dear Brutus. A safe haven asset that is now also China’s reserve currency, a hedge against dollar debasement and other financial pathologies of Trump 2.0 as well as the ultimate dowry incentive for untold million Hindu brides waiting for Mr. Right has got to be something special and that is exactly what gold has been for me in the past 2-years, with Newmont mining and Agnico Eagle as easily the best managed miners on the planet.

The post Powell era at the Federal Reserve promises an inflation risk premium on asset markets, which makes me a perma bull on gold but I will only buy when the price/second derivative risk calculus is in my favour as diving head first into a whirlpool can boomerang badly when Dr. Auric has a temper tantrum as he did last October as UB40 crooned so aptly – wise men say, only fools rush in, but I can’t help falling in love with you Dr. Auric, as you set your glide path for $5200 an ounce in ‘26.

The outlook for Brent crude is looking bleaker than ever even as we trade at $61 a barrel. Venezuela’s output is only 900,000 barrels a day. So Trump’s CIA drone strikes on Maduro’s tankers and terminals will do squat to reduce the 3.8-MBD supply glut and billion barrel floating storage metrics of the global wet barrel market as long as OPEC does nothing to reduce the death spiral in prices.

The Iran mass protests echo the people’s uprising against the fuel tax in 2019 and Mahsa Amini’s murder by the religious police in 2022 but the sordid reality is that the Ayatullahs regime will not hesitate to massacre its own people in their determination to wield absolute power from Khamenei’s Mullahbunker in Tehran. May God protect the beautiful young men and women of Iran from the venom of their fanatic rulers. Zan, zindagi, azadi – Javid Shah – Raza Koroush Pahlavi.

The article What does 2026 hold for copper, gold, silver and crude oil? appeared first on Arabian Post.

My very best wishes to my friends and readers for a wonderful Christmas break and may the New Year bring the world the peace the human race so richly deserves. I will be in Alex/Cairo to revisit and pay my homage to the genius of Pharonic antiquity supplemented by the Ptolemaic, Roman, Byzantine, Umayyad, Fatimid, Seljuk, Mamluk, Ottoman, French, British and even Soviet brutalist influences on Umm Duniya’s inevitable skyline. I may even return to DXB with some fresh insights on the EGP Treasury bill carry trade for 2026 LOL!

The Q3 GDP data is yet another argument to load up on Dr. Copper, so that is exactly what I did since it is pure loco to buy silver at 3.4 sigma above its 50 day moving average or gold at a 14 day RSI of 81. I remember the shock and horror of my goldbug friends at a Wharton reunion meeting on October 20 and know that the next landmine explosion in Jan ‘26 will be ultra ugly. 3Q GDP growth was red hot at 4.3%, accelerating from 3.8% growth in Q2. The GDP deflator has accelerated to a horrific 2.8%, way above the usual zombie Street consensus at 2.7%. This scenario makes it 100% certain that the bond vigilantes will make mincemeat out of Sidi Matt if I dare to lock horns with the US Treasury 10-year bond, whose yield is now 4.19% and could easily grind higher above 4.50% in the next 3-months. So the obvious trade du jour to pay for the next Easter luxury trip to Holy Russia is to remain short TLT until after the Orthodox Christmas at Kochevelski. Spasiba bolshoi, tovarich Mr. Market.

Time to go shopping? Dr. Copper is up on his tracker from 72 to 74 in the two trading sessions since I last added to my position in COPX. The January FOMC rate cut odds will now move from a slam dunk to a merde show any you better be selling when the conclave begins yelling. I just hope the FOMC boardroom table dissentniks, does not emulate a Yemeni cabinet meeting when ministerial policy disagreements inevitably ended with a shootout and a President with a bullet hole in his forehead.

There is no longer any rational macro logic for a Jan FOMC rate cut in 2026 if the Fed was really data dependent and not MAGA dependent. In fact, Q3 GDP data screams for a rate hike and a Fed pivot to hard money even if Caligula has now anointed his horse as a senator and beaten his Mom to death in his imperial fury. The most brilliant utterance from POTUS 47 on monetary policy all year? “Quiet piggy”!

Pre-tariff emergency inventory accumulation contributed to the 4.3% GDP growth in Q3, but high end consumer spending, so heavily correlated with the AI trade on Nasdaq, has also gone gangbusters. This suggests a trillion dollar hot air balloon pops in early ‘26 and triggers a shock weight loss in the market of MAG-7. Please revisit the sequence of macro events that triggered Black Monday and you will discover that Mark Twain was dead right. History does not repeat but it definitely rhymes.

The Fed’s concern about a slowing economy is misplaced and the FOMC should be twirling their worry beads about inflation risk. The 2% price stability mandate is a farce as proven by the 71% rise in gold. The acolytes of Dr. Auric are laughing all the way to the bank or at least the goodies that keep popping out of their IBKR account. I had a wonderful 8% monthly return in December on my prop book with only minimal leverage and sporadic gold/silver trades.

Forget the geopolitics of Venezuela, Ukraine, Gaza and Syria for a moment. Focus on the internal politics of the Fed and the mood swings of POTUS 47 as he huffs and puffs and brings the house down in the post Uncle Jay Federal Reserve. Then and only then will we understand what gold at $4500 was desperately trying to message to us.

The article A shootout in the temple at the January FOMC conclave! appeared first on Arabian Post.

The Indian equity markets have experienced one of Asia’s most frenetic IPO bonanzas in 2024-25 even if no less than 50% of all new flotations are now trading below their offer price. Despite the decline of the Indian rupee’s new low against the dollar beyond 91 and Dalal Street’s underperformance relative to my fave emerging markets Argentina, Poland and Brazil in 2025, the macro omens suggest that the IPO hit parade will continue in 2026 especially since it will be dominated by two mega deals Jio and NSE.

Kotak and Goldman estimate that Indian IPOs will raise $25 billion in 2026 but from an investor perspective, it will be a Clint Eastwood market since the deals will include the good, the bad and the ugly. Unlike the GCC, India offers global investors sheer scale and sector diversification as a $4 trillion GDP economy that just delivered 8.2% growth rate and hugely benefits from a collapse in crude oil prices. The secondary market still trades at a sharp premium to the Morgan Stanley EM index but the Nifty’s 21X multiple is even higher than its 19X five year average multiple.

However, I have always viewed India as a domestic growth stock since its fate is not hostage to exports or the fickle global business cycle but derives momentum from the massive flows into Dalal Street from its domestic mutual funds, life insurers and asset managers. A monthly bid of $5 billion from domestic institutions makes India far less dependent on hot money from abroad, though I noticed the rupee crisis correlated strongly with an exodus of $1.5 billion of foreign funds from the local stock market in December.

Two factors make me bullish about the prospects for Indian IPOs in 2026: One, the skepticism about AI capex and circular debt Ponzi schemes on Wall Street has taken a toll on the MAG-7 and boosted the hunt for non-correlated emerging markets in Asia with no heavy AI/chip concentration like South Korea and Taiwan. This will definitely be a positive ballast for foreign bids in brand name Indian flotations like Jio, NSE, Manipal Hospitals backed by Tamasek, PhonePe, Zepto and ICICI Prudential’s asset management business. Two, Indian earnings growth were a disaster at only 2% in 2025 but can rise as high as 15-16% next year while GST 2.0 and the Monsoon RBI rate cut were powerful stimuli to invest in the Nifty, ideally at a 24000 val metric for me. India is expensive but it has always been expensive though the val premium relative to Asian EM is now at 4-year lows.

Despite the spectacular performance in Shanghai/Hong Kong Red Chips last year, many mega US institutional investors prefer paying up for India than bearing the geopolitical risk and overnight policy U-turns of China ruled by the CCP Politburo. India will be third or fourth in the global IPO market league table in 2026 and hopefully Babu Raj in the financial markets will be diluted to facilitate the interests of global investors in Dalal Street. The pipeline now includes almost 180 companies who could go public in 2026.

With a crowded IPO pipeline, it becomes essential to separate the chicken salad from the chicken merde since they are both white. So it would be a mistake to bid for anything other than a world-class deal, given that more than 150 IPOs are now trading underwater from their listing price. Yet brand name alone does not guarantee that a deal will make money as any investors in the mega IPOs of Lulu and Talabat will attest. These were both billion dollar plus deals backed by stellar corporate brands but both lost 35-40% from their IPO offer price. I chose not to bid for the Lulu IPO and did not even read the Talabat prospectus but I never thought I would see Lulu trade at a mere 1.16 AED a share since it is a colossal, extremely well managed business founded by a brilliant billionaire from Kerala in the late 1970’s.

In India, foreign fund managers know all too well that regulators can be arbitrary in their decisions, local oligarchs excert huge political pressure, promoters frequently manipulate their own shares to the disadvantage of minority shareholders and bankers misprice new issues to fleece investors. The iffy relations between Trump White House and Modi government are also a dark cloud in an otherwise positive sentiment scenario though the delay in the trade deal is a matter of concern to the capital markets. My call, net-net, look before you leap and brace for a roller coaster ride on the stock exchange.

The article Indian IPO hit parade will continue in 2026 but avoid underwater deals! appeared first on Arabian Post.

I was sure the Medline IPO would be a winner since I have tracked this business since it was acquired in a $30 billion leveraged buyout by Blackstone, Carlyle and the San Fran private equity house Hellman & Friedman after the bankers priced the deal at 29, I even wrote a post several hours before the New York open, reiterating that the largest private equity incubated IPO of 2025 was worth a pop.

I calculated that MDLN would be midwifed by its syndicate and start its life as a public company at 33-$34. I was dead wrong MDLN opened at a 20% premium or $35 and rose a stellar 21% for a total first day return of 41%, something which has become unthinkable in GCC IPOs now that Brent crashed to $58. In fact, I note the terrible post IPO performance of Lulu and Talabat, both billion dollar private sector jumbo IPOs that were supposed to be a blue chip play on the UAE’s fabulous non-oil growth rate and consumer expansion. This simply did not happen. No wonder Dubizzle pulled its IPO or it would have been forced to change its name to Dufizzle IPO as it would have been another candidate to lose money for its investors.

In Saudi Arabia, the IPO scene is a disaster, several deals have had negative first day openings and even PIF financed privatization deals are now getting pulled and merchant family deals are kryptonite as Brent falls to J.P. Morgan’s target price of $30 a barrel, the Tadawul could easily lose another 20% since its EPS estimate for 2026 is a mere 2%.

Global investors only scramble to buy GCC equities when the dollar is rising but not when the dollar is tanking as is happening now. This is the reason why Tadawul fell 12% amid a spectacular bull market in emerging market equities. Any reader of mine would have benefited from our 3X trade in Argentine equities (symbol ARGT), the 45% profit in the Polish country tracker (PLN) and 30% odd return in iShares Brazil which Manju and I trade multiple times every week against our portfolio of actively managed stocks in both Sao Paulo and Brazilian ADRs listed on the NYSE, where the digital bank Nu Holdings has been a license to print money since I discovered its charms in a conversation with a Rio VC when NU traded at $11.

The icing on the cake is that Nu offers very liquid listed options on Chicago’s CBOE, which has enabled me to hugely amplify my net profit on the position as it rose from 11-17. I cannot generate extra income via covered call strategies on any GCC IPO on a credible/liquid exchange like the NYSE, London or Singapore. This is routine in the world now and GCC equities cannot hope to attract hedge funds without offering first generation risk insurance and hedging products like exchange traded options.

Saudi Arabia equities are way too expensive at 15X and I no longer want to play Russian roulette on any exchange where the smart money funds I follow are exiting and not accumulating. So, my strategy is to focus on IPOs in Poland, Latin American, Southeast Asia and the occasional 8% high div privatization IPO in Oman. Since the Sultanate can be very generous to foreign investors in the right deal priced at the right moment.

Kuwait is an old-new love for me, like a girlfriend rediscovered in old age after a span of 35 years. After all, as a young Chase Manhattan banker from New York, I was staying in the SAS Hotel in Kuwait City, a month before Saddam’s tanks rolled down the seafront Corniche to Dasman Palace to murder a very great Arab prince HH Sheikh Fahad Al Ahmed Al Sabah (RIP), whom I had first seen on the soccer field in FIFA Barcelona so long ago.

Economic reforms could mean some hot deals in Kuwait. So vastanomics will be my strategy to invest in Kuwaiti IPOs when a EM becomes hot macro play, all I can see is: yum yum, gimme some LOL.

As for Medline, the first day flippers will be selling as the free float is quite narrow and I think it at $36 early next year as the AI trade unravels on Nasdaq. At 35-36, this IPO again becomes a no brainer for me.

The article What next for Gulf IPOs in 2026? appeared first on Arabian Post.

2025 was the year I was convinced that silver would outperform gold in a classic late cycle acceleration trade that is a recurrent theme in full throttle precious metal bull markets. This means, silver has a tendency to lag gold’s ascent until an inflection point at which prices breakout and then accelerate sharply on the upside. This inflection point was $36 an ounce in spot silver for me and I even wrote a post pointing out a new paradigm in silver. However, the catalyst to become a silver bull was the Trump White House, which ordered the US geological survey to classify silver (and copper) as a strategic mineral vital for US national security. So when Dr. Auric had a $400 sell off in late October while the LBMA squeeze led to 6.4% base rates in London.

Indian silver import data showed that physical demand in Mumbai had risen from 15 million to 30 million ounces, ETF inflows were on fire, the dollar had its worst six month fall since the early 1970’s and a chill in the labour market made Fed rate cuts essential. I knew that silver at 36 was a no brainer.

I wrote a post detailing a bull case for FCX, the world’s largest copper miner two weeks ago when its shares traded at $39 on the NYSE. FCX traded at 48 in the subsequent two weeks and I have now booked profits after a 23% run on the stock with an additional 9% kicker from CBOE options strategies in only 2-weeks. Merci beaucoup, red metal and FCX.

Silver and silver equities will be a core theme for me in 2026 though I will not post ideas as the white metal has psychotic volatility, 2X auric, but nothing like the suicidal 4X vols of Bitcoin, which is a path to a certain ruin for trusting lambs in Dubai who fall into the trap set by merciless crypto-sharks.

When silver surged to $65 an ounce, the futures exchange COMEX changed the rules of the game and raised margins by 10% to flush out overleveraged speculators who were already on maintenance margins. This was a historic move to preserve a fragile system built on high tech leverage and algorithmic models of volatility.

The clearing members of COMEX were forced to recalibrate net exposure to the metal in real time and hedge funds had to immediately lower risk buckets. A Dubai bullion trader whose sons I have known since my boyhood and consider some of my closest friends in life once told me about a silver options strategy that enabled him to make $200 million in COMEX. This strategy has now been perfected by some of the world’s most sophisticated macro hedge funds on Wall Street in a metal whose supply is price inelastic since 70% of silver is mined as a byproduct and whose demand curve is also inelastic as EV, robotics, 5G networks and AI data center components are all heavy users of silver. Silver is actually a faster conductor of electricity than Dr. Copper but silver cable wiring in home construction makes no sense as it is obscenely expensive.

Four factors make me an aggressive investor in silver ETFs, equities, futures, options and royalty trusts in 2026. Indian physical demand is still robust even as prices in rupees hit all time highs. The plunge in the Indian rupee to 90.75 makes the Bharati Nari housewife view silver as a safe haven metal akin to gold. Despite the three hard and three soft dissents in the last FOMC conclave, Trump will force two rate cuts on a Fed, whose $40 billion short T-bill purchase is soft QE even though it is the love that dare not speak its name.

Late cycle acceleration will be my trade posture du jour in silver in 2026 even though I warn that I have only lived through a handful of record highs in silver in 1979, 2011 and now 2025 for the simple reason that any parabolic move brings out grandma’s silver from the attic and triggers a brutal price corrections. The Nelson Hunt silver futures rally took prices upto $50 in 1979 before the bubble popped with a change of rules from the CFTC, COMEX and the Volcker Fed. Prices then bottomed at $5. This will happen next year if risk aversion or the unwinding of the yen carry trade by a Bank of Japan monetary tightening creates a global risk asset sell off, which will spare neither silver nor copper nor anything else. Fear is mission critical for survival in speculative markets!

The article Anatomy of a silver bull market! appeared first on Arabian Post.

Matein Khalid

Oracle’s Q2 earnings vindicated my call to stay short Microsoft and SoftBank as public market proxies for OpenAI, whose $500 billion valuation should realistically be marked down by 50% to reflect current ground realities which will get much worse. I was aghast to see Oracle slump by another 11% on Nasdaq but not at all surprised when Microsoft shed $18 in last night’s session/after market. It was a massacre for SoftBank shares in Tokyo as they plunged by almost 10%, exactly as I had predicted they would in my OpenAI post earlier in the week.

The lesson of Larry Ellison’s ill fated bromance with Sam Altman? Those who jump in the sea to save a drowning CEO often drown in the same hubris themselves. Code Red time for Samurai Larry now that he no longer even has my brilliant Wharton classmate Safra Catz by his side to navigate the sinking ship that is ORCL.

The Q2 metrics at Oracle were more Gofawful than even I had imagined. A $10 billion spike in the cash burn rate in only 3-months? A tsunami of capex spending and no parachute to hedge a fatal hard landing risk if OpenAI cannot meet its revenue commitments, which it definitely will not. Oracle has now vapourized $350 billion in shareholder value in its OpenAI fantasy deal since September, which only proves the truth of the old adage in the movie White Mischief about Lord Erroll’s cuckolded elderly nemesis in Happy Valley (Kenya) – there is no bigger fool than an old fool.

The scramble to build mega data centers have broken the bank at Oracle and could wreck havoc on Gulf countries who have made trillion dollar capex commitments at a bubble valuation peak. This will not be the first time that SoftBank will haemorrhage tens of billions in GCC petrodollar wealth on Masa-san’s absurd deal making sprees even though he does not chew paan himself. Remember the fate of the doomed $100 billion SoftBank Vision Fund, 60% of whose capital was raised in Riyadh and Abu Dhabi?

Oracle is taking a colossal risk on the 10-year property leases its mega data centers create if OpenAI cannot pony up the bacon. Its balance sheet is nowhere as big or as pristine as that of MSFT, AMZN, GOOGL or even META. Its net-debt is now $105 billion and its credit default swaps have spiked higher to give the world an SOS that something is truly rotten in the kingdom that Samurai Larry built on databases/enterprise software over the last 50 years. Another $50 billion in debt will trigger a short selling spasm that could take down ORCL to 150 and even force Larry to contact his buddy President Trump for a Intel type Uncle Sam bailout. Never say never in the Age of Trump 2.0.

It is only a matter of time now before Oracle loses its investment grade rating and its paper becomes literal junk in the corporate bond market. Sam Altman has lost his Merlin the Magician aura as the ultimate AI wizard and can no way generate the hundreds of billions in contracted revenue ORCL desperately needs to service its colossal debt/property leases. Brace for contagion in Big Tech credit markets. This vicious cycle has created fabulous long/short opportunities for fund managers sane enough to withstand the seductive kiss of the AI lady djinn. This means long GOOGL, short Satya, Masa-san and ORCL is the AI trade par excellence for now.

We are seeing a carnival of madness in the AI hunger games that will trigger the most brutal wealth destruction spree Silicon Valley and the world has ever seen. That much, at least, is certain!

The article Oracle’s OpenAI bromance with Sam Altman has now gutted its shares and CDS! appeared first on Arabian Post.

When the rats scramble to escape a sinking ship as hungry sharks circle the blood red water, the end is near. 100 insider Johnnies sold $6.5 billion in OpenAI shares in a recent employee tender. Why bailout now at $500 billion if OpenAI is a slam dunk for a trillion dollar IPO next year? Simp​le. The 100 newly minted decamillionaires know that OpenAI can no longer hope for a trillion doll​ar exit. Its business model is toast now that Gemini 3 and dirt cheap Chinese LLM models have dethroned it as the King of the global AI ecosystem. OpenAI will be lucky if it commands a valuation of $50 billion when the meltdown du jour peaks sometime in the fall of 2026.

OpenAI’s birth in November 2022 triggered the trillion dollar AI mania trade that took my beloved Nvidia from a pre-split price of 10 to 190 now. OpenAIs death rattle next year will eviscerate the AI mania and teach us once again that Spike Lee was dead right. Don’t believe the hype – even if she gotta have it.

A close friend waxed rhapsodic to me about his prediction for a $4 trillion OpenAI IPO in 2027. My response? This IPO will not happen, let alone ever command a $4 trillion val since humpty-dumpty has had a great fall and now not all of King Sam’s horses and all of King Sam’s men can put the Humpster dumpster together again.

The stock market verdict is crystal clear to me even if OpenAI bulls at a recent dinner party hissed bile at me for being the party poop​er to their AI Champagne wishes and Caviar dreams. Can this puppy support $1.3 trillion in spending with a mere revenues of $12 billion this year? If you believe this bull merde, contact me as I have a very special bridge to sell to you.

​This is Dutch tulip mania all over again four centuries after Rembrandt and is not exactly a compliment to humankind’s rationality calculus or Wall Street’s latest spasm of collective greed. The plunge in Microsoft shares from 558 to 480 and SoftBank’s latest kamikaze death dive in Tokyo just tell me that Satya and Masa-san have been thrown off the bus by Mr. Market as a proxy for shorting OpenAI.

Oracle’s free fall from a 310 hero in September to a 220-zero now even as its 5-year credit default swaps spike higher like a Third World banana republic facing a run on its central bank hard currency reserves.

OpenAI’s lack of profitability is so acute that Sam Altman has been reduced to exploring erotica as an avenue for revenue generation – T&A in the absence of M&A. Sad. Exponential growth models have degenerated from the sublime to farcical.

Alphabet has now toppled OpenAI as King Zeus, the god of gods on Mount Olympus in history’s greatest algorithmic coup d’état. Bad news Sirji!

There is at least another 30% downside juice in both Mr. Softy and SoftBank, who own 28% and 11% of Sam Altman’s haunted house. So, don’t worry, be happy, stay shorty. SoftBank not only wiped out $60 billion from the $100 billion petrodollar kitty GCC sovereign wealth funds gave to Masa-san for his Indian paanwalla team in London to invest in Silicon Valley startups but also whacked his own shareholder net worth by 99% in both the 2000 and 2007 Tokyo Tech wrecks. If not for his stake in Alibaba, Masa-san would be roaming with the spirits of the Samurai on the mist-shrouded peak of our sacred Mount Fuji. He is not about investing. He is about playing the Valley equivalent of Russian roulette.

History will once again ambush Wall Street and Silicon Valley. The trillion dollar Ponzi schemes and circular debt pyramids OpenAI inspired in its spider’s web of deceit and leverage has now come undone. You really cannot fool all the people all the time, even if your audience includes some of the richest fools in human history.

GPT-5’s birth in August was OpenAI’s Stalingrad, the beginning of the end that will be played out in a death dive in the next 12-18 months. Investors in the GCC with 90% drawdowns will count themselves lucky since Wall Street always leaves its heavy hitter sucker clients with enough chump change to be able to afford a Big Mac happy meal.

Alphabet, with Google Cloud, Android, Chrome Browser, YouTube, the Tesor Partnerships with Broadcom, $100 billion in the bank and above all with its Gemini 3 wonder weapon is OpenAI’s nemesis, it’s Darth ​Vader and deranged Godzilla. Sam Altman can huff and puff all he wants but his house of cards is as doomed as a do do bird.

As users gravitate from OpenAI to Gemini 3, the credit risk on Oracle’s fantasy deal will become unbearable and OpenAI’s valuation will be gutted in internet speed faster than its repu​tation. Why else have shares of Lumentum, maker of optical components for Sundar Pichai’s mega data center networks, more than tripled while OpenAI’s partner shares drown in their own capital markets doo doo. It is the same story with Celestica, another triple bagger on Nasdaq in the Class of 2025, thanks to Sundar.

Broadcom, which spins TPU code into gold like Rumplestiltskin, is up a stellar 70% at a time when the Comp is up 21%. The root of the English word credit is a Latin verb credere – to believe. Without belief, there is no credit and I no longer believe in OpenAI or the monstrous hype of the AI trade. The end game? A 90% valuation cancer as risk morphs into ruin and radioactive chickens come home to roost in the AI Black Death.

The article OpenAI is now toast and will kill AI Tulipmania trade! appeared first on Arabian Post.

want my Arabic friends to address me from now on as Abu Nuhas or Father of Copper. Why? The red metal that has been human kind’s best mineral friend for 30,000 years is also the best conductor of electricity known to man, woman or beast as the AI revolution necessitates a multi-trillion dollar demand shock in upgrading the power grid as the world electrifies, decarbonizes (gas turbines are also made from copper and we are limit up now) and digitizes at the speed of light.

Dr. Copper, which used to be the metal of choice for steel/auto production and cable/construction will be the real digital gold for the coming decade and not the psychotic volatility crypto excreta that every scamster in town seems to be peddling, other than Roman Novak, the crypto king from Leningrad who was just found butchered in the desert with his wife in a shallow grave since he scammed the wrong investors in the Rodina – and the Gulf out of $500 million.

The only problem is that copper now faces the biggest supply shock the global commodity markets have ever faced since Sadat ordered his troops to cross the Suez Canal and assault the Bar Lev Line in the Sinai on 6th October 1973 and the Shah of Iran used this moment to create a spot market panic for crude oil. Saudi King Faisal imposed an oil embargo on the US and Holland that triggered an instant global recession and gas lines in the US. This was the dawn of the petrodollar age, when my Dad moved from Karachi to Dubai to run the biggest state owned insurance company’s Gulf network – except the state he served in 1976 was Pahlavi Persia and his ultimate boss was my life long hero, His Imperial Majesty the Shahan Shah of Iran Aryamehr.

True, when the King of Kings and Light of the Aryans was booted out of his Peacock Throne three years later, crude oil soared from $18 to $45 or 150%, even though imperial Iran was only 4% of global oil supply in 1979. Something similar is about to happen to copper next year. Note that prices on the LME have moved up consistently from $5000 a metric ton in the post Lehman Ice Age to 11,790 a metric ton on the London Metal Exchange as I write.

The only problem is that the ESG Gestapo did not allow any major copper mine to be approved in the last two decades and the human race will now pay a bitter price as demand explodes and new mine supply is only feasible if prices move as high as $20,000 a metric ton. This intel was given to me by a man who was once one of the world’s biggest copper traders on Wall Street.

The only major copper mine that will give the world 700,000 metric ton, and is located in Joseph Conrad’s Heart of Darkness and owned by King Midas who quoted Arabic hadith to me (sayings of the Prophet Mohammad) when I met him in our majlis as the CIO of a royal family office. King Midas now lives in Singapore and one day I will ask him if he really loved to read Sir Walter Scott’s Magnum Opus Ivanhoe as much as I did, ideally over something cool and slingy at Raffles (the real one in Sing and not the ghastly wedding cake next to Wafi Mall).

If I am right and I passionately believe that Abu Nuhas knows something about the metal for which he wants to be renamed, investing in the right copper equities is like buying Nvidia when ChatGPT was unveiled to the world exactly 3-years ago at a pre split price of $10. Sadly, I did not as I was dumb and dumber in the arcane world of machine learning/CUDA. But I know the innards of the copper trade when the supply shock volcano explodes. There are 8-20X paper copper mines to be harvested from Chile/Peru to Kazakhstan (Borat Country!) and the One-Night-San.

The copper supply shock will create billion dollar fortunes out of thin air, just like the oil shocks of 1973 and 1979 did with black gold. So pour moi, ♫its now choo choo train, truckin down the track. Gotta travel on, ain’t never comin’ back. Ooh, Ooh, got a one way ticket to the moon…♫LOL!

The article Dr. Copper’s supply shock is my one way ticket to the moon! appeared first on Arabian Post.

India’s NSE Nifty scaled a milestone on Dalal Street this morning, rising 160 points as I write to 26205. This has little to do with Nvidia/Jensen Huang’s fabulous guidance last night and everything to do with global fund managers attracted Asia’s Cinderella EM of 2025 by the BJP’s supply side policy pivot to slash the GST, ramp up post-Bihar election capex, boost consumption even as corporate EPS growth accelerates, post Diwali seasonals are a tailwind for consumer spending (when Maruti Suzuki shares fly on the stock exchange, a games afoot!), the RBI injects liquidity and EM tourists like moi seek to diversify out of the AI proxy markets of Asia led by South Korea and Taiwan.

The Nifty Index is now higher than its level in September 2024 when the foreign exodus from Dalal Street amid a corporate earnings/capex slump made me skeptical of the markets on India’s relative performance in 2025. This was vindicated in a year where Poland and Brazil were the superstars du jour delivering with shares like Sao Paulo digital bank Nu Holdings, up 20% and Warsaw’s mBank SA, up a fairytale 92% in the Polish zloty. Samba and potato soup is a lethal cocktail in the quest to make money with the shining stars of EM.

Even though the Nifty’s forward val multiple of 21 is higher than its 5-year average of 19X, I believe the balance of macro risk now benefits India. One, FII equity inflows have surged in the past month. Two, the big chill in the job market and Trump’s heavy breathing dragon fire on the FOMC will mean rate cuts at either the December or January conclaves. Three, India offers a classic domestic growth story with minimal AI exposure to an EM investor constellation that knows that exports/AI will not be the winning formula to print gold in EM.

Four, underweight India portfolios will have to recalibrate and move out from the ugly step sisters in the Dragon Empire and the Hermit Kingdom into the waiting charms of Bharti Nari Cinderella. This alone promises a 20 to 25% total return on my fave Nifty golden puppies. Five, the latest all time Nifty high above the September 2024 peak constitutes a technical breakout on the charts I cannot ignore. Six, FII outflows this summer have now reversed and turned into inflows. This trend will accelerate in the next 6-months as Fed rate cuts begin while global growth and the AI capex cycle go wobbly. Seven, Trump’s punitive tariffs on Indian exports to the US will have to be rolled back and Tariff Man will be forced to share a (veggie) taco with PM Modi.

Eight, the BJP government’s measured response to the Delhi blast suggests Modi will not resume Operation Sindoor against Pakistan as long as the trade talks in Washington protect India’s economic interests. Nine, the multiplier on the consumption tax cut will quickly boost EPS growth and operating margins for the Nifty’s corporate crown jewels. The earnings Downgrade Raj is now over and EPS growth could be as high as 16-17% in 2026 against squat this year. Ten, the post rupee demonetisation zeitgeist has boosted the financialization trajectory of the Indian economy and six billion dollars a month in bids from mutual funds and life insurance companies justify the val metrics that spell “buy Indian equities” to me.

Eleven, the Monsoon rate cut and GST 2.0 mean the mid-cycle pause is over and Indian GDP growth will accelerate to 6.5% again in 2026. I bet my Indian friends celebrate 100,000 Sensex sometime before the next Diwali. Twelve, India’s inflation rate has plunged, making Bharat easily the best performing major EM economy of 2025 as China stalls once again. Thirteen, India’s is a major global winner from the oil glut and a potential fall in Brent crude to $50 as its energy intensity has plummeted in the past decade. Fourteen, India’s current account deficit is a mere 0.5% of GDP or $20 billion chump change. India’s interest rate and economic growth volatility is the lowest of any G-20 economy. This alone justifies Nifty’s premium valuation and underwrites my bullish view for 2026.

Time to book my passage to India via ADRs/GDRs of the companies I love and make tax free returns on the Dubai to Mumbai Rupee Express!

The article Will India’s Nifty be the emerging market’s Cinderella in 2026? appeared first on Arabian Post.

The bloodbath in Bitcoin is symbolic of the risk aversion spasm that has now hit risk assets as varied as Japan’s Nikkei Dow, Nasdaq’s Mag-7, gold and even the EM carry trade. The AI infrastructure trade that was the high octane fuel for the most frenzied bubble in Silicon Valley history has lost its luster (price momentum is the mandate of heaven on Wall Street), though the proof of the pudding will ultimately be hostage to what Nvidia says after Jensen Huang speaks at Wednesday’s earnings release.

The world’s first and only $5 trillion corporate colossus is now the harbinger of the stock market’s next big move. Bain Capital estimates that data centers need to generate $2 trillion in revenue to justify the sheer scale of current investments by 2030. The rational probability of this scenario playing out as per the hyperventilating projections of AI bulls is precisely zero since the current revenue run-rate of data centers is $20 billion. A 100X expansion in AI revenues in less than 4-years does not correlate at all with my view of objective reality, even under the most benign of macro assumptions.

For now, I am most worried about the cross coefficients of correlation that spell asset market contagion on a global scale in an era of hyper networked, hyper volatile asset markets where panic and fear spreads at the speed of light. So is it any coincidence that Bitcoin’s plunge to below 90,000 today coincided with a 3.5% free fall in the Japanese stock market amid a 6% hit on Nasdaq? Notice the creeping stealth bear market in global bonds? Little Red riding hood is getting mighty nervous!

Moore’s Law warned us that the rise of technological obsolescence rises exponentially even as the capacity of chips doubles on a transmitter and then doubles again. Could this cosmic truth about the nature of computing also spell doom for the best laid plans of mice, men and VCs (sorry Robbie Burns!) as a trillion dollar capex cycle du jour in the Valley goes suicidally astray?

How can we forget the fiber optic cable boom and bust of 1999 and its deflationary lost decades in telecom hardware? Where are Lucent, Alcatel, Global Crossing and the CLEC’s now when we so badly need to relearn the lessons of their passing? Whenever I go to a party and meet the ra ra chest beating AI bull, I remember Marcus Tullius Cicero’s immortal words – Not to know history is to forever remain a child but not to have bought Nvidia after ChatGPT was unveiled to the human race is to be forever branded and investment Dumbkopf.

The Nasdaq was $13 trillion when the brave new world of AI was born on Mount Sinai in early 2023. It is now valued at $33 trillion and AI nemesis can easily take away $10 trillion in the mother of all bear markets if the AI bears go on a rampage. So where is the obvious fallout shelter to survive the AI nuclear winter? This is the message of the 14% rise in the S&P healthcare sector tracker after doing squat for the last two years to me. My preferred refuge is natural resource stocks that offer me 10-12% free cash flow yields and inflation/geopolitical hedge to boot, not to mention critical metals, the new AI in my playbook as Beijing and Washington lock horns in a merciless geopolitical great game.

The tsunami of passive inflows that created the Mag-7 can also trigger Armageddon in the capital markets. After all, is it rational for 80 year old baby boomers to have 16% of their net worth locked in only two stocks trading at joke valuations – Nvidia at 31X revenues and Microsoft at 15X revenues. The Baby Boom generation in the US is the biggest, richest generation in human history. What happens when they begin to liquidate their $80 trillion in assets from the US stock market now that it is trading at 1929 and 1999 epic tops? The Baby Boom generation, with $80 trillion in assets has a net worth at least 5X greater than the Millennial generation’s net assets.

When the unemployment rate goes above 5% and the inflation rate is still 3.5%, Trump and the bond bulls will learn that even a 2% Fed funds rate can coexist with a 1970’s scale bond bear market that will vaporize nest eggs worldwide. Bonds are capital markets cancer when the US Treasury pivots to financial repression, as the Bank of Japan did in Dai Nippon’s two lost decades.

Two dark omens that tell me that I am not being a Cassandra in my macro outlook. One, the Powell Fed has cut the Funds rate from 5.25% to 3.75% and yet every Treasury coupon bond beyond the two year is trading at a higher yield now than when it first started its latest rate cut cycle in Sep 2024.

The bond market’s smart money sniffs the stench of rising inflation risk even though don’t worry, be happy private bankerjis in Dubai do not as they dish out cross currency leverage risk to their clients. Bitcoin was euphoric when Trump was elected as the first crypto POTUS in the White House. Now, Bitcoin is negative for 2025. The old cliche is still true. Risk is a four letter word. So is ruin.

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Amazon (AMZN) shares were a doggy of the Mag-7 for most of 2025, falling as low as 161 in late April during the post Liberation Day temper tantrum by Mr. Market and trading in a narrow 200-225 range since late summer on concerns that AWS was losing ground to Microsoft’s Azure and Google Cloud in the cloud computing league tables. Even now, at 244 it is up only 11% for 2025, 4 points lower than the S&P 500 index. Yuckyville.

Yet Q3 earnings showed that AWS delivered the fastest growth since 2022 and thus the golden goose is still laying its magic eggs at a 20% annual growth rate and the $38 billion cloud deal with OpenAI has done a Rip Van Winkle on the shares.

AMZN now trades at 32X forward earnings, a val discount to Walmart at 35X and Costco’s nosebleed 42X even though its revenue growth is a stellar 12% against Walmart’s pathetic 4% and Costco’s so-so 8%. Contrary to popular belief, the e-commerce revolution is still in its early stages with only 20% of US retail sales in e-commerce but 50% of all incremental sales will be executed via digital pipelines.

The OpenAI deal definitely means that the AWS infrastructure franchise was not the Cinderella in the AI Age as this epic deal will use state of the art Nvidia GPU accelerator chip in its network. Prime is a magnet for high margin e-commerce revenue that will enable Amazon to increase its global e-commerce market share, despite its existing astronomical scale.

AWS has been the colossus of the public cloud universe and advertising is its third but growing revenue growth pillar. I expect revenues to accelerate to 13-14% and margin expansion provide a steroid shot for EPS growth in the next two years. That should make AMZN anything but the sleeping doggy it was for most of 2025 until the AWS OpenAI deal.

The Chicago Board Options Exchange now offers me a multitude of strategies where I can design/execute AMZN strategies with an asymmetric risk/return payoff calibrated to my precise views on the name and skewed disproportionately to make the cash register ring.

I also see enormous growth potential in Amazon’s $14 billion acquisition of Whole Foods in 2017 and MGM in 2022 as both these domains are wide open for e-commerce and ad platforms. In both e-commerce and cloud computing, Amazon has been the dominant disrupter du jour and boasts a digital virtuous cycle in its myriad e-commerce marketplaces.

In Q3 AMZN reported ad revenue growth of 24% YoY to $17.7 billion. This reinforces my margin expansion argument since ad margins are far higher than those possible in e-commerce. The 3-point positive delta in the AWS growth rate from Q2 to Q3 proves that AWS is a classic beneficiary of the AI revolution and its valuation metrics will rise to reflect this reality.

Meta trades at 630 in the pre-market after giving us another superb buy opportunity on Friday night at 607. The healing process is never linear but it has very definitely begun though I would not expect a one-way ticket to the moon as the 1990’s syrupy pop hit went. Zuck once snookered the market with his metaverse fantasies and investors, once bitten twice shy have slammed his shares by a painful 24% after Q3 earnings. Sophocles warned us on an existential trust about human life. After hubris, there can only be nemesis.

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Jay Powell has put cold water on a December FOMC rate cut as inflation risk triggers dissent at the Fed. Yet Uncle Jay is now a lame duck and the world awaits his first MAGA Fed Chairman. My bet is on Kevin H as I doubt if even a supine Senate will confirm yes man – Stephen Miran. Why even bother to hold the FOMC conclave with 19 people pontificating their views on the future path of rates in the boardroom of the Federal Reserve’s white marble palazzo in DC’s Constitution Avenue? Why not make it simpler and make the FOMC a two man show with Trump barking orders in the Oval Office to the next Fed Chairman to slash rates to zero or even lower given that he has publicly admired the Japanese and Swiss central banks for engineering negative interest rates in their respective banking systems in the recent past?

Why bother with all the formalities of Beige Books, dot plots, votes, statements and pressers? The First and Last Commandments of US central banking now is – when the Big Guy barks “jump”, the only thing the Fed Chairman can do is scream “how high boss?” The St. Louis Fed estimates that Q3 GDP has slumped to 0.6%. Corporates have announced 200,000 jobs cuts since July and AI deployment is about to wreck havoc with white color employment all over the world. Brace for the next wave of Gen-Z led revolutions to break out from Bangalore to Manila, Queens to LA.

We are already in a job recession and the latest Fed Beige Book suggests that a mere 18% of the US economy is in growth mode. The political Big Chill begins in the Big Apple when the self styled Marxist-Socialist takes over as Mayor of New York City, the holy temple of peekaboo finance. 50% of consumer spending in the US is generated by the top 10% of taxpayers whose stock portfolios have zoomed higher because the Mag-7 have added trillions to their net worth in the last 5-years. A world in which Nvidia is worth $5.04 trillion but the 1.4 billion Indians share a GDP of $4 trillion is bonkers.

The government shutdown means no sanitized Uncle Sam statistical mumbo-jumbo but the University of Michigan consumer sentiment index has plunged to the bottom 1% of all time readings. Default risk in consumer credit is already causing a spasm of risk aversion and bankruptcies in Wall Street’s illiquid, unregulated, opaque $2 trillion credit casino, with teenage mutant ninja cockroaches threatening mass extinction events for go-go credit hedge fund and shlock buyout gunslingers. The smoke signals from the Philly St. Louis and Dallas Fed are crystal clear to me that the US economy is now in a manufacturing and jobs recession whose shock waves will be felt all over the world next year. The Atlanta Fed Flash GDP? Weirdo City Peachtreewallahs. Never made sense to me. So I conclude that the duration trend is my friend, until even this trend comes to end. Viva long T-bond futures!

My critics diss me as Dr. Doom but the fact remains that my long equity calls this summer have often been money gushers from PANW at 160 to LLY at 640, Airbus at 160 Euros to RTX at 145, ISRG at 430 to Uber at 60. These are only the tip of the iceberg and my friends know that we did score our fair share of home runs in the states, let alone in more exotic locales like Brazil (NU?), Japan and Argentina (ARGT).

Valuations in Nasdaq are now insane at two-sigma above the mean. Classic mania twilight zone. We have seen the Shiller Cape metric surge from 33-40 this year on the momentum of the AI mania, as in 1929 and 2000. This is Tulip Mania on steroids and it too will end in tears.

Commercial real estate is in the doo doo. The residential housing market is a $50 trillion asset class that straddles the literal summit of America’s $30 trillion Mount Olympus. So when I see resi REITs in Wall Street tank by 22%, I know the stock exchange is housed in a Roach Motel. Why are homebuilder shares slammed by 15% on the NYSE? Non-AI capex is flatlining. King Dollar has made a bid to regain his throne with a DXY a tad below 100 and Doctor Auric, a painful 8% below its $4380 recent high.

The ADP data tells that default risk is even more mispriced in the bank loan/credit markets than it was in the summer of 2007 when Chuck Prince was our pied piper and we all lived in CDO boogie wonderland. Real personal disposable income is now negative 1% so the US economic super tanker with 70% GDP generated by Joe/Jane Sixpacks is in real distress, as the grim housing and labour market data suggests. This Bud’s for you for all the work that you don’t do!

I know Mag-7 earnings were a beauty and I surfed Nasdaq myself to the siren songs of the Wall Street Lorelei but countless sailors found their heads bashed as they drowned in the Rhine for the crime of falling in love with the blonde tress nymphet on the rock. Jim Morrison said it best – “come on baby light my fire”.

The Bible says, man does not live by bread alone. Matt says, man does not live by data centers alone, especially since we do not have the power grid or the strategic metals to remotely realize zillion dollar AI Champagne wishes and caviar dreams.

If I was a savvy UAE investor, I would not wait for the National Bureau of Economic Research to call a US recession, as the talking head on CNBC tell us. The NBR called a US recession in December 2008, when the US banking dominoes, led by Lehman, Citi, Bear Stearns, Mother Merrill, Goldie and even Morgan Stanley had gone belly up or on the way to going belly up. No wonder more Goldman partners joined the Obama White House than any other in history. Barack Bin Hussein, aka POTUS-44 and not Dubya is the real messiah and savior of Wall Street.

The real recession started in the autumn of 2007, when all our private bankers told me I was nuts to expect a global financial crash and my Morgan Stanley broker (sorry, wealth advisor) wanted me to bid for the Blackstone IPO MS was underwriting at $32. All the big hammour funds in the GCC dutifully obeyed Morgan Stanley’s oracles and rode down Blackstone from $32 to its $4 bottom. History is so cruel, sad but true!

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Critical minerals have become a national security priority for GCC states as China has weaponised its dominance over supply chains, refining capacity and magnet production.

These materials, including lithium, nickel, cobalt, tin, tungsten, vanadium and germanium, are essential for defence systems such as Lockheed’s F-35 stealth fighters, Raytheon’s hypersonic missiles and General Dynamics’ Virginia-class submarines, as well as civilian applications in advanced semiconductors, electric vehicles, robotics and next-generation digital infrastructure.

The urgency of this challenge is illustrated by the landmark $1.8 billion deal between the US Development Finance Corporation, Abu Dhabi’s ADQ and the Orion Natural Resource private equity fund to take joint equity stakes in critical metal projects outside China’s zone of influence.

The pioneering agreement signals how the Gulf will cooperate with partners in the US, Europe and Asia to secure reliable strategic access to mines, recycling plants and reprocessing facilities worldwide.

China’s draconian restrictions on critical metal exports have made the GCC’s development and national defence programmes vulnerable to shifts in Chinese policy.

In response, the Gulf has committed to a multi-trillion-dollar AI infrastructure rollout, new age electrification and advanced manufacturing technologies to generate sunrise industries that reduce dependence on oil and gas exports.

All six states also maintain air force-centric, high-tech military doctrines that depend on uninterrupted access to these strategic materials.

The Abu Dhabi deal represents a watershed moment in Gulf economic security strategy. The capital emirate possesses the region’s most advanced defence technology infrastructure, making it the natural leader in securing critical metals access.

Abu Dhabi’s sovereign wealth funds are now well positioned to play a defining role in the strategic metals competition that has become central to great power economic relations in the 21st century. Demand for battery metals and rare earths will soar even as supply expansion remains constrained.

The world economy is accelerating toward what the International Energy Agency calls “the electrification of everything”, while the AI revolution that the GCC has embraced compounds future demand for these strategic materials.

Rare-earth magnet projects not under Chinese control remain a lodestar for GCC and European sovereign wealth fund capital.

It is no coincidence that even the UK Treasury has given the thumbs up to the privately owned Corniche Lithium, which mines hard-rock and lithium-brine deposits discovered by British geologists as far back as the mid-Victorian era in 1864.

Critical minerals will reshape the global industrial ecosystem, spanning industries as varied as automotive, computing, mining, chip fabrication, electronics and aviation.

For the GCC, the pandemic served as a real-world stress test when some Gulf states were forced to import ventilators from the Big Three automakers (Ford Motor Company, General Motors and Stellantis), the only manufacturers with the advanced production capabilities required for rapid, high-volume emergency orders.

It is no exaggeration to conclude that the economic destiny of the West depends on its success in winning the strategic metals arms race with Beijing at a time when geopolitical tensions over Taiwan, Hong Kong, Tibet and the South China Sea are at their most volatile.

This is why the US government has financed some of the world’s leading reprocessing, refining and recycling platforms. America can no longer afford the luxury of ceding ground in a competition it barely recognised for the past two decades, when Washington’s policy agenda was consumed by post-9/11 military engagements in Afghanistan and Iraq.

The US has thus accelerated its pivot to the Gulf to galvanise sovereign wealth funds and private capital to meet this multilateral challenge to international security and industrial competitiveness.

National security for the GCC and the West is defined by technology and access to critical metals as the world electrifies and decarbonises in the high noon of the Digital Age.

Economic statecraft has been central to national development and interstate relations ever since the petrodollar bonanza of the early 1970s made realpolitik a recurrent diplomatic theme in the chancelleries of the Western world.

The GCC has made clear that its strategic interests align with those of the West, even as China emerges as the region’s largest buyer of oil and gas.

From geologists to project financiers, government officials to economists, diplomats to media executives, the Gulf’s policy elite increasingly incorporate access to strategic metals into their frameworks for economic competitiveness, technology leadership and security planning.

This makes critical metals the new geopolitical currency of power in the GCC, gradually supplanting oil’s historical role as the singular measure of national strategic depth and international influence in the region.

The article Abu Dhabi’s critical metals deal reshapes Gulf security strategy appeared first on Arabian Post.

Matein Khalid

The supply glut in crude oil, the fragile geopolitics of the Levant, the Gaza wars, the thinnest sovereign credit spreads since the summer of 2006 have not ended the scramble to pick up MENA credit when the issuer is not a serial borrower/distressed credit and the bonds issue reflects improving political/economic fundamentals. The year ago, Oman and Bahrain provided some amazing opportunities for capital gains which I did my best to highlight in this post and my media columns in the Gulf.

The autumn of 2025’s highlight for me are the first Kuwaiti eurobond issue since 2017, after the cabinet finally approved the Public Debt Law last March. Algeria, a country that always fascinated me due to a boyhood literary crush on Albert Camus’s “L’Étranger” and Alistair Horne’s “A Savage War of Peace”, so vividly chronicled the existential tragedies of the 130 year old French Colonial project known as Algérie Française and its final spasm of blood letting in 1954-62. I have never had a chance to visit Algeria though have travelled extensively in Morocco, from Tangier to Essaouira and Rabat to Marrakesh. J’espère que ce sera bientôt!

Abu Dhabi engineered a spectacular milestone in the bond market with a 10-year Eurobond priced at a razor-thin 18 basis points over Uncle Sam IOUs/UST. Morocco’s status as the only investment grade sovereign bond issuer in Africa (S&P Global) was marred by the political turbulence in the ancient Maghrebi kingdom, which have thankfully died out.

Egypt’s dollar sukuks are no longer a no-brainer as they were to me in 2023 on the eve of a historic yield compression. I think the opportunity now lies not in Egypt’s dollar denominated offshore bonds/sukuk but in its lira Treasury bill as Umm Duniya is hot carry trade (aka Cairo/Fustat/Qahira Al Muizz, the fourth Fatimid Caliph of Islam and 14th Ismaili Imam Zaman. Abu Tamim lived and died a thousand years ago but his reign of tolerance, art and civilised values, the founding of Al-Azher University, the first bimaristan in North Africa still inspires me).

Egypt’s stature on the world stage soared after President Al Sisi hosted Trump and the Arab world’s heads of state at the recent Sharm El-Sheikh summit. President Trump was the chief guest and Prime Minister Shahbaz Sharif hailed the King Solomon of our time as a man of peace and renominated him for the Nobel Prize.

Egypt’s 1-year Treasury bills are a no-brainer for me as I believe financing has been secured for the next year from the IMF development banks, the EU and the major Gulf petrodollar hubs. Inflation peaked at 38% two year ago and has now fallen to a 40 year low of 12%, which current yields do not reflect. The EGP is finally no longer MENA’s post boy for FX hyper-volatility after a decade of currency crisis and Pharonic devaluations under IMF diktat. The smart money hedge funds have accumulated $40 billion in unhedged T-bills and are no longer afraid of policy risk even as two Fed rate cuts loom.

The Suez Canal toll revenues, LNG export volumes and FDI flows are inching higher. Global investor exposure to Egypt T-bills has surged 10 fold since 2023 when Abu Dhabi’s $38 billion Ras Al Hikma project was the ultimate sovereign imperatur. The central bank has embraced an FX free float as hard currency reserves build up. My strategy is to borrow the yen at low rates as the Takaichi-san will not allow the Bank of Japan to pivot to hard money even as CPI in the Empire of the Rising Sun exceeds the US CPI. My short yen-long Egypt pound T-bill idea promises 30%+ return potential if all the variables align with the stars, dear Brutus.

Field Marshal Sisi is the toast of the Trump White House and hailed as the Yield Marshal on Wall Street. My call? 2026 will be the year of the Two Field Marshals in the global bond market – Al Sisi in Cairo and Al Munir (the luminous one) in Islamabad. Yet while I am bullish on the Egyptian lira, I am bearish on the Pakistani rupee as long as the secessionist revolts in Baluchistan and NWFP do not end, which will just not happen as long as the two provinces get a RAW deal LOL!

The United States has given more than $50 billion in economic and military aid to Egypt since President Sadat visited the Knesset in Jerusalem and signed the Camp David Peace Accord on the White House lawn in 1979. Despite multiple wars, the peace treaty with Israel and Sisi’s campaign against extremist terrorism makes Egypt too big to fail for the US, Europe and the Gulf. After more than a decade of macroeconomic pain and FX Armageddon, the lira no longer has a black market rate and is deep-value for me at 48. I heed George Soros’s advice as I plot my Egypt strategy – the big money is made when things go from Godawful to just plain awful. Soros will be vindicated once again in the EGP T-bill souk even if my Egyptian friends do not bless this strategy. Maalish!

The article Egypt bonds will gush money in 2026! appeared first on Arabian Post.

Matein Khalid

Stock exchange folklore in pre-1929 Jazz Age New York has one priceless insight for me – “you be buying when they are crying, you be selling when they are yelling”. So as I scan the markets, I realized that the mother of all yelling is taking place in the AI arena and its decibel count is loudest where the ignorance about its nuances is the highest, as in the Gulf. I am certain that when the AI bubble pops, untold billions in investor wealth will be wiped out, just as the dinosaurs were wiped from the face of the earth by one cosmic asteroid hit 65 million years ago. So my real time strategy call now is – Matt be selling when they are yelling. In other words, load up on stocks and sectors with the least correlation to the AI theme and fundamental ballast to survive the AI asteroid hit my macro crystal ball and the Silicon Valley grapevine tells me is all too possible in 2026.

The smart money knows that data center investing is an accident waiting to happen while the dumb money intends to borrow from the UAE commercial banks to gift America $20 billion in AI equity it does not need just to earn brownie points from Trumpworld. Note that real estate datacenter investment trust REITS have been one of the worst sectors in the REIT constellation in 2025, clear evidence of a supply glut, which always precedes a Darwinian shakeout. Remember the global fiber optics scam in 2000? I do but hundreds of investors do not because their fave pre-IPO unicorns are now resting eternally and happily in money heaven, jannat al-faloos.

I can easily visualize the parabolic path the AI heat seeking missile will take as it zaps herds of gentle, trusting lambs once pinstriped scavengers have fleeced poor Bambi Al-Investor of all his wool enroute to the slaughterhouse. Tariff Man has ensured that consumer inflation will rise well above 3.5% by next summer, even if his handpicked accolades on the FOMC refuse to acknowledge the macro storm clouds. The exodus of several million migrants guarantees a spike in wage inflation risk. This means the post-Powell Fed will be exposed as the political paper tiger it really is even as the inflation data goes ballistic and the current slowdown morphs into full blown recession. The only reason the US economy did not slump into recession in 2022 despite the most draconian monetary tightening by the Powell Fed in 40-years was that the interest rate hike were offset by Papa Joe’s $2 trillion fiscal lollipop.

The Fed will be forced to raise and not cut interest rates at that point or US Treasury debt will have its own Liz Truss with the 10-year US Treasury yield at 5%. This is when the bloodiest cycle of wealth destruction Silicon Valley has ever seen since the death rattle of the dotcom bubble in 2000 will grip Wall Street and world finance.

So what do I want to own when the AI mutant ninja chickens come home to roost on Nasdaq? One, the Lords of War. Victor Bout was trapped by a DEA sting and destined to spend the rest of his life in the Club Fed until Putin’s FSB arranged for him to retire at a Dacha in Sochi in exchange for the exquisite redhead Anna Chapman, the Mata Hari of our times. Yet the fact remains that the Cold War 2.0 rages with both Moscow and Beijing while Lockheed and Northrop have a mere 0.2% correlations with AI. Hurrah!

Two, old is gold. The oldest Baby Boomers just turned 80 in America and even the Trumpster is a youthful 79. The adult diaper market in both Japan and China is bigger than the baby diaper market. The far right parties in Europe will throw out tens of millions migrant workers once the welfare states go kaput. The old, bold and beautiful theme is barely correlated with AI if you consider senior living REITs like Ventas and Welltower. My call? Ahlan wa sehlan!

Three, défense de fumer, mamnue altadkhin, no smoking, rauchen verboten! The Islamic world’s love affair with tobacco that began in the reign of Sultan Ahmet Khan Osmanlu, who built the lovely mosque of Galata bridge in Eminönü is in full swing from Rabat to Jakarta and Sarajevo to Khartoum. Altria and Philip Morris are thus money machines with a 0.1 correlation to AI. Altria trades at a mere 9X earnings. Its smokeless product menu is a winner and the shares actually rose when AI/high beta tech was bloodied by Trump last Friday. So this is what I will be buying when the AI lemmings are crying on the Day of Ruin!

The article Survival ideas for the coming AI bloodbath! appeared first on Arabian Post.

I have made no secret about my conviction that Brazil’s Nu Bank (NU) and China’s Alibaba (BABA) are my two fave emerging market’s fintechs of destiny since 2024. Alibaba has risen almost 100% since I accumulated its shares in the mid 80’s in its New York ADR once it was evident that the Politburo had pivoted to Big Bang fiscal/monetary stimulus to goose the dormant animal spirits of investors in Shanghai and Shenzhen, gutted by the traumatic collapse of the biggest property bubble in the history of global capitalism. This policy pivot meant that the CCP embraced Jack Ma as a true patriot of the Dragon Empire and BABA’s prowess in e-commerce, cloud computing and network software made it the regime’s natural AI champion. Think training and inference LLM models with “Chinese characteristics”!

Brazil’s Nu is also up more than 60% since I first wrote about it in this post to help my friends benefit from a fintech idea I had sourced in Latin America’s economic colossus, both these fintech ideas have been big time winners in 2025. Elementary Gorilla Game investing 101 my dear Watson! These will remain my only BRICS puppies since I missed India’s PayTm, Russia is a no-no and South Africa is too scary to visit without the right Boer jungle guide and my Afrikaner brother in law has now lives in the suburban veldt of Redmond, Wash.

Nu’s digital bank now counts half of Brazil’s adult population as clients and has now exported its hypergrowth, risk management obsessed business model to the vast underbanked prole consumers in Mexico and Colombia. São Paulo bankers and VCs I respect assure me that Nu is a 30% EPS growth story for both 2026 and 2027. They do not see any systemic credit risk on the horizon as long as resurgent inflation does not force the Fed to opt for tight money and a Lula win not trigger a military coup after next October’s election. I believe that 3.5% CPI could mean Fed rate hikes despite Trump’s power to control the waves ala King Canute and my call is that Brazil’s next president will be from the center-right and not from Lula’s corrupt loony-left PT. So I am a happy buyer/put seller on Nu at 17.8X forward earnings.

ARPU has now surged to $11.20 and the deposit base is growing at 40% a year for a bank whose next big EM markets could well be Indonesia, Nigeria, Yorkshirestan in the UK and Philippines. India is the final frontier but I doubt if the protectionist clowns in its deep state will give a Brazilian bank a license even though the Aadhaar card scams have shown that Indian banks are just not ready for prime time in the Digital Age. I can easily see Nu Bank attract 500 million clients across the world in three years, up from 120 million now. This makes Nu the Samba King of the Rio Carnival for me on the NYSE!

The article A tale of two emerging market fintech money gushers appeared first on Arabian Post.

Real estate occasionally provides prescient investors the ability to make serious capital gains with minimal or even zero risk. Take the Empire of the Rising Sun and the sinking yen, also known as Japan. The ruling LDP has shed its Komeito coalition partner and is all set to embrace Sanae Takaichi as Lady Shogun or Dai Nippon’s first elected woman Prime Minister. This means higher inflation and sharper rise in property prices in the seven celestial islands of Japan formed from the tears drops of the Sun Goddess in the morning of creation. Rising land prices and massive development mean that the top 300 companies in Japan are sitting on unrealized real estate profits of 30 trillion yen or $200 billion. All any investor in Dubai or wherever has to claim a piece of this property jackpot is to ask Manjusan for a guided tour with Sensei Matt in the netherworld of the Nikkei Dow. The idea is to find companies whose property holdings exceed their market cap, i.e. free money.

The strategy is to anticipate which company will be prodded by an activist shareholder or a hostile takeover bid to sell its real estate asset in order to bid up its share price and boost its market cap. Free money with zero risk or as they say in Japan “flee money” LOL! President Trump should really not talk to the new Lady Japanese PM about his election lest she misunderstand his intentions and order a Pearl Harbor scale kamikaze attack on Mar-a-Lago.

Enough silly jokes and back to the serious business of making money in Japanese real estate via drilling for paydirt in Marunouchi. Let me illustrate this strategy with a specific idea, not necessarily the one I would choose given my obsession with asymmetric risk calculus for at least a 20% gain with near zero risk other than the yen hedge. I am looking at Japanese railway companies, retailers, textile mills, property developers and warehouse owners for property golden geese just waiting to be plucked by the right activist shareholder or a corporate raider. Why on earth would the $75 billion AUM activist hedge fund Elliott waste its time accumulating the shares of a zombie utility like Kansai Electric Power Company (KEPCO)?

The new Japanese PM also promises faster inflation and rising property prices, a compelling prospect for me to buy the shares of Sumitomo Realty and Mitsui Fudosan. Anybody who bothers to analyze the balance sheet of 8801 Tokyo knows that Amaterasu’s sacred teardrops will bless the share price of this blue chip Japanese developer due to the sheer scale of its unrealized profits on its landbank.

The new PM/Lady Shogun has made it clear that she will pivot to Shinzo Abe’s fabled second arrow monetary stimulus. This is a license to print money in Japanese commercial real estate and thus the strategy I have outlined in this admittedly convoluted post.

Larry Ellison of Oracle believes that he is the reincarnation of a Samurai warrior from the Tokugawa shogunate but I would like to come back as a reincarnation of a Japanese asset stripper in 2026 because they are poised to unlock a tsunami of cash from their property rich but governance poor targets. It’s raining yen, hallelujah! I would caution Manju that asset strippers are not the fun kind to be found in the neon-lit watering holes of Shinjuku but very boring suited-booted sararimen who do not even wear Kimonos or wave around the dai katana, traditional samurai swords whose blade must draw human blood if they are ever unsheathed.

The Bank of Japan will not raise rates enough to compensate for rising inflation and negative yen interest rates are the high octane fuel for property speculation in Japan Inc. Mitsubishi Real Estate is another Nipponese sweetie pie (ok, wagashi!) since its price to book value is a mere 0.7 and not 1.7 once its hidden cash and unrealized property holdings are netted out. Where else in the world can an investor make free money from property developers rather than be mercilessly misled, price gouged and exploited by them, an experience investors in the Gulf know all too well? So arigato gozaimasu guys. Tenno heika Banzai!

The article Making big money in real estate with minimal risk appeared first on Arabian Post.

Matein Khalid

Private equity and money center banks on Wall Street are in free fall even as the private credit market is in classic contagion mode, without a lender of the last resort for overleveraged shadow banks/hedge funds whose illiquid assets now disappear into Wall Street’s structured vehicles blackholes. Peekaboo Finance 101!

When Citigroup and Brent crude both fall 8% in a synchronized bearish death dive, I know that I am witnessing the death rattle of one of history’s most speculative and overvalued credit cycles.

Blackstone (BX) is the world’s preeminent alternative investment manager with a trillion dollars in AUM across private equity, buyouts, real estate, infrastructure, hedge fund of funds and structured credit. Its shares are hypersensitive to the slightest nuance in credit spreads, deal valuations and the volatility of interest rates. Blackstone shares have plunged from 189 on 18th Sept and is now trading at 160 on the NYSE. It is the same story with KKR, TPG, Carlyle, and Apollo.

The malign credit Frankenstein who gutted the netherworld of Wall Street’s shadow banking system in 2008 has once again risen from the grave like a vengeful Count Dracula on a moonlit night eager to win vampire brownie points in a boodsuckers rave party. The tragedy is that the macro wolf is here and the decibel count of his death rattle will trigger credit and property meltdowns across the GCC because when currencies cannot devalue due to a dollar peg, the burden of adjustment must be borne disproportionately by the local property market and stock exchange.

This simple macro linkage explains the trumatic boom-bust cycles in Dubai property since 2004 and the fact that GCC equities exhibit exceptionally high volatility metrics and cannot offer any risk protection products like liquid/listed options to hedge when Mr. Market goes psycho, as he has done now. Risk is a four letter word but then, sadly, so is ruin. So I have zero interest in any illiquid asset class. Notably, obscenely priced pieces of paper known as off plan project IOUs that trade at a 25-30% premium over newly constructed villas/apartments. Rational? No. Insane.

When a credit crisis coincides with stagflation in the world’s biggest economy and a deflation big chill in both Europe and China, it is evident that credit risk will be repriced and contagion ignited on an intercontinental scale as we saw in September 2008 or even last August. Fear, like greed, travels at the speed of light even as the Scottish poet Robert Burns put it – time and tide wait for no man while the best laid plans of mice and men aft go astray. Yellah!

This is the reason banks, private equity/alt asset managers, homebuilders and go-go data crunchers like Palantir have all been bit by Ursa Maxima in the past month. Once again, widows and orphans in the Gulf will learn the hard way that it is as dangerous to run with the bulls in Pamplona/Wall Street or bet with borrowed money on projects that will never get built by developers who are paying 8.5% for dollar financing on the eve of the biggest capital markets neutron bomb explosion since the autumn of Lehman, Citi, AIG, UBS, Merrill, Bear Stearns and Countrywide. 2008 was the year I thought the world’s ATMs would not work and houses gushed leprosy and not cash when the default danse macabre caused entire banking systems to disappear into money haven, as in Spain, Ireland, Iceland and Club Med.

There is so much money to be made in the dance of the Valkyries as they enter Valhalla and finally meet the soul of my hero Oberst Claus Graf von Stoffenberg. I visited Bamberg with my wife in his memory on a July 20th fifty years after a firing squad ended his life against a wall in Berlin’s Bendlerstrasse.

Money making idea? I will wait till Blackstone falls to 120 from its current 160 or TPG falls to 45 from its current 56. Scott Fitzgerald was so right. In the capital markets, as in the Manhattan/Riviera soirées of the jazz age – life is lived forward but only understood backwards.

The article Global credit crisis will gut Dubai property like 2008 appeared first on Arabian Post.

Gold is in its most spectacular bull run since 1976-1980, when prices rocketed from $91 to over $800 an ounce.

The current cycle found its floor near $1,800 in late 2022, as the Powell Fed’s rate-hike campaign peaked and Washington froze $300 billion in Russian reserves in response to the invasion of Ukraine.

“Dr Auric” now trades at just over $4,000 an ounce – a perfect vindication of my previously published $4,000 year-end strategic target.

The weaponisation of the US dollar, the Swift banking system and access to New York’s money markets has unleashed one of the biggest reserve-asset shifts in central banking history.

Unsurprisingly, central bank buying – led by the People’s Bank of China – fuelled a 24 percent jump in gold in 2024, as well as an extraordinary 49 percent surge in 2025.

The yellow metal has once again claimed the gold medal in the metal-market Olympiad, while the dethroned King Dollar has stumbled, dropping 10 percent on the trade-weighted index (DXY) this year.

Currency debasement has sparked monetary earthquakes since Roman times, and the Age of Trump will be no exception.

Silver is for the steely

Spot prices for silver have surged to $48 an ounce – up a stellar 64 percent in 2025. But with roughly double gold’s volatility, the white metal remains a treacherous ride. It’s not suited to nervous nellies who lack abdominal fortitude.

History shows silver has traded at 2-3 percent of gold’s price in 21 of the past 50 years. Today, it sits at just 1.22 percent of gold’s price – clearly undervalued on a relative basis.

At the same time, global mine output remains in deficit. Fresh demand from missile systems, EVs and clean-energy technologies is set to tighten supplies further.

Silver lease rates in London and Shanghai, normally in the 1-2 percent range, have spiked to 6 percent – a clear sign of hoarding.

Meanwhile, the world’s largest institutional investors are boosting their exposure to paper silver through futures and options markets across the globe.

Like gold, silver is in a secular bull market, though its path will be more parabolic and volatile. The next target is the $54 highs set up by the Nelson Bunker Hunt corner attempt in 1980 and the Arab Spring/European debt-crisis spike in 2011.

Mixed fortunes for the red metal

Copper will be to the 2020s what crude oil was to the 1970s, as the human race transitions from the hydrocarbon age to the AI age.

The red metal opened 2025 at $8,700 per metric tonne on the London Metal Exchange (LME) and now trades at $10,608, a 16 percent year-to-date gain.

Unlike gold and silver, copper is not yet in a structural bull market. Known in trading circles as “Dr Copper” for its uncanny ability to diagnose the health of the global economy, half of its demand is tied to the industrial cycle in the US and China – both now in a synchronised slowdown.

In China, deflation haunts the property market, resulting in anaemic demand for copper cables.

President Xi Jinping has ordered China’s 138 EV makers to consolidate – an exercise in Maoist-capitalist restructuring that threatens to slash copper demand.

A deflationary big chill haunts the world commodity markets. It confirms my conviction that copper may fall to $7,000 a tonne on the LME within the next 12 months.

Still, the red metal may well triple to $30,000 in the next decade as the AI revolution reinvents the global power grid, thereby increasing demand for the world’s fastest conductor of electricity.

Meanwhile, Brent has plunged from $130 a barrel following Russia’s invasion of Ukraine to $65 now. The global supply glut suggests Brent will achieve Goldman Sachs’ early 50s target next year.

Natural gas has fallen from $10 to $3.40. Wheat, corn, nickel, tin and aluminium prices are all under pressure.

The only reason Dr Copper has shown resilience amid an emerging US consumer credit crunch and China’s trade war and shadow banking crisis is that metals typically spike on sudden supply shocks.

In the near term the outlook remains bearish, but from 2027 onward copper’s demand curve is set to soar as it displaces crude oil as the world’s most critical strategic commodity.

The article What’s next for the world’s ‘big three’ metals? appeared first on Arabian Post.

Will we still be dancing when the music stops as Citigroup and UBS were in the autumn of 2007. Even my friends dissed me when I predicted a global financial crash as early as January 2007, but I track credit cycles like a bloodhound and it flashed the mother of all distressed SOS’s as it does now. In 2007, the trillion dollar daisy chain of subprime mortgages blew up Wall Street, froze the offshore wholesale bank funding markets where UAE banks had increased their borrowing by 10X to finance the crazy 30% rise in spec development/construction loan books. So to me it was a matter of simple arithmetic that subprime would gut Wall Street and trigger the biggest bank failures in history.

The Citi never sleeps was the tagline of a 200 year old, aggressive, retail bank that sold loans as if they were McDonald Happy Meals all over the world as it does now. The American taxpayer paid the price when this $2 trillion go-go credit monster was nationalized by Uncle Sam and the shareholders including several top GCC royals and sovereign wealth funds lost 99% of their money. I know, I was the CIO of a royal investment office. I was there.

My old friend Dr. Pippa Malmgren, has a Yale doctorate and was President George W. Bush’s Special Assistant for international banking in the 2008 White House. She engineered the then secret $29 billion NY Fed swap line to the SNB in Basil, that enabled UBS to survive after its Chairman and 2500 “risk managers” had gambled $55 billion of bank capital in a failed bid to become an Alpine Goldman Sachs, which they will never be as the Swiss have Toblerone, Fondue, cuckoo clocks and kirschwasser in their genes.

I remember one pompous Geneva bankster telling me with a straight face, we are the world’s largest asset manager, we have 150 years of history, we are super conservative, nothing will happen to us, when I informed him I was short UBS. Yet hundreds of families in the Middle East were wiped out when they made the fatal mistake of trusting UBS to manage their wealth or accumulated the doomed bank shares, which lost 98% of their value in the GFC. Grutzi Marcel Ospel und Herr Wuffli. Nothing has changed, at least the Swiss bankers I dealt with in 2008 were Swiss. Ok Sergio was from Ticino, dove si parla italiano. Yet, go to UBS Dubai now and the DIFC platform is manned and womened by a hundred Indians, all private bankers, dialing for petrodollars in the Gulf jaldi jaldi. It is all, come on Barbie, let’s go party from the ancient land that gave us Yes Bank and Rakhi Sawant’s Silicon Valley Confessions.

Now, the dance of death in global finance began last week again, this time the music has stopped for Joe and Jane Sixpack as subprime Ohio auto lender and a dodgy Michigan leveraged buyout financier funded by Wall Street bank capital just went kaput, Peekaboo Finance 101. Note that mighty Citigroup shares have plunged from $104 to $97 in only three sessions. I know, I keep writing love letters (put rights) on Citi to Jane but she just dances around our fave tree and whispers “nahi, nahi, abhi nahi”. Jane no longer has time for this Tarzan because the music has stopped.

The billions that vapourised when First Brands and Tricolor went belly up last week are only the tip of a $2 trillion iceberg that Jamie Dimon, the Hellenic philosopher of our times calls a timebomb that just exploded. In banking, I learnt the hard way that only the king of kings on Mount Olympus has the luxury to tell the truth because when lies rule the world, then the act of telling the truth is ipso facto a subversive act. As the little boy said, uncle-uncle, Emperor Big Daddy wears no clothes.

Chuck Prince and Marcel Ospel were naked in 2008 when Zeus made sure that hubris turned to nemesis. Who remembers the Gorilla at Lehman, Gutfreund at Solly, Ace at the Bear and suntan Angelo at Countrywide? I do, they were the idols of my misspent youth. Who studies the lessons of the collapse of the Banco Medici in Renaissance Florence? I do, as I am obsessed with the life of Cosimo, Lorenzo, Peitro, the two Medici Popes and the two Medici Queens of France (both evil). Not even the Rothschilds and the Morgans managed one Pope and one Queen though the Parsis of Zanzibar gifted our world the ultimate Queen, apno King Freddie Mercury.

I have been warning for the past year that a $3 trillion daisy chain of consumer credit is on the precipice of a historic meltdown that will make 2008 seem like a cake walk. Bank funding markets will freeze. Stock market bubbles will go bust. Oil will collapse. In July 2008, Brent was $148, six months later it was $35 and would have been $15 if Saudi Arabia had not engineered the biggest output cut (4.2 MBD) in the history of OPEC. History never repeats but it always rhymes as Mark Twain, a Series Seven certified wealth manager at Mother Merrill warned us more than a century ago. So what do Dubai house prices and off plan tulips have to do with Ohio auto lenders and Michigan LBO con artists? Don’t ask me as I can barely differentiate between an LBO and BO, the Tricolor makes my heart skip a beat on Bastille Day and Republic Day (Jan 26th) at Shah Jahan’s Red Fort.

Mark my words, Wall Street’s dance of death will send global shock waves and trigger another property market free fall from current obscene vals. The laws of economics, let alone gravity, are not suspended beyond Business Bay!

The article In 2008, it was subprime mortgage; in 2026 it could be subprime auto loans appeared first on Arabian Post.

The old adage that stock markets swing between fear and greed has been borne out by the mixed performance of Saudi Arabia’s Tadawul All Share Index over the first nine months of 2025.

A turning point came on Wednesday September 24 when the Tadawul staged its biggest single-day rally since 2020, after a Capital Market Authority board member signalled that the 49 percent foreign ownership cap on Saudi equities would be lifted.

Dubbed “Green Wednesday”, the announcement triggered a 5.1 percent jump in the index, adding $124 billion in market value. Bank stocks surged a record 9.2 percent on expectations of majority foreign ownership by year-end.

JP Morgan estimates the move could attract $10 billion in passive inflows, given Saudi Arabia’s 3.3 percent weighting in the MSCI Emerging Markets Index, the benchmark for $1.4 trillion in global funds.

More broadly, the relaxation – or even end – of foreign limits on listed companies is a game-changer as it accelerates the globalisation of Saudi capital markets. It puts the region on the radar of global investors eager to tap into the non-oil growth potential of the Arab world’s only trillion-dollar economy.

Yet Green Wednesday’s euphoria followed months of market malaise.

By mid-September the Tadawul had slumped 11 percent, ranking among the world’s worst-performing major emerging markets – even as the MSCI Emerging Markets Index surged 25 percent. It also stood out as the GCC’s weakest stock market, dragged down by its twin energy colossi Saudi Aramco and Sabic.

A slide in Brent crude from $80 in January to as low as $65 a barrel by early September has left the kingdom nursing a significant budget deficit. To plug the gap, Riyadh turned to a record $22 billion in global bond and sukuk issuance, while imposing draconian spending cutbacks – even on flagship Vision 2030 giga-projects such as Neom.

Trading volumes fell to two-year lows, while domestic institutions and retail investors were steady sellers. Even valuations at five-year lows failed to trigger a sustainable rally. The end of an IPO boom underscored the gloom, as once-coveted listings slipped below offer prices and companies pulled planned flotations.

The geopolitical impasse in the Middle East only amplified the bearish sentiment in Saudi equities this summer, as Israeli and US strikes on Iran coincided with escalating violence in Yemen, Syria, Gaza and the Red Sea.

Yet even against this hostile macro backdrop, foreign investors added to their shareholdings in the Saudi National Bank and Saudi Telecom, reflecting global institutional investor interest in the Gulf’s largest banking and telecoms sector.

Still, despite the Green Wednesday momentum, Saudi equities remain underperformers in 2025. The boost still means that the Tadawul has lost 5.4 percent while the MSCI All Country World index has risen 17 percent in 2025.

A $124 billion one-day surge in the market cap of Saudi equities seems unsustainable, if it is based on the statement of a single CMA board member.

The Saudi government must now amend legislation to permit foreign majority ownership of listed companies, which could lead to significant changes in corporate governance, disclosure norms and even Saudi business culture.

The markets will want to see legislative change and amendments to the company bylaws. If this does not happen soon, Green Wednesday’s bullish frenzy could once again lapse into the bearish torpor that prevailed until mid-September.

After all, the global oil glut is a reality that is likely only to worsen this winter. Goldman Sachs’s oil economists estimate that Brent crude will fall to “the early 50s” in 2026.

The energy sector will remain a drag on the Tadawul index. However, the relative performance of Saudi banks is expected to increase – they are likely to be the largest beneficiaries of a relaxation in foreign ownership limits and an increase in Saudi Arabia’s country weight on the MSCI emerging market index from 3.3 to 4 percent.

For now, global investors remain underinvested in the Arabian Gulf’s largest and most populous sovereign state – but whether Riyadh can turn episodic rallies into lasting credibility is an open question.

The article A gamechanger in Saudi equities appeared first on Arabian Post.

Wall Street’s strong bid is skating on macro thin ice as a government shutdown that reflects the toxic polarization in Congress looms. The latest PCE data shows that Powell’s fear for a tariff related uptick in inflation was well founded and Fed funds futures have narrowed the odds of a December rate cut to only 60%, which is perfectly rational given that the US economy is in the clear twilight zone early stages of stagflation. The labour market would have been in dire straits had Trump’s immigration crackdown not sharply reduced the supply of workers.

Political risk, inflation risk, earnings growth risk, Fed risk, margin risk and tariff risk may all converge to create a nasty Halloween trade in October.

Events in Dalal Street, Jakarta, Buenos Aires, Riyadh and Beijing reinforced my conviction that fairytales and liquidity/geopolitical nightmares are recurrent themes in emerging markets. However, amid the macro trick & treat tempests in EM, I still find potential double baggers in carry trade boogie wonderland countries like Brazil, take the global digital bank Nu Holdings, whose New York ADR is up 45% since I profiled it on this platform. With implied vols in NU at 35%, writing puts spreads has been a consistent money maker on Nu.

I like the idea that Latin America’s preeminent Fintech boasts both Berkshire Hathaway and Ark Investments as strategic shareholders as it is an embryonic global champion of the billion plus underbanked human beings in the dark alleys of the planet, once known as the Third World and now referred to in polite PC company as the global South.

I once pulled an all-nighter at Penn reading Frantz Fanon’s “The Wretched of the Earth” but it took the Bangladeshi genius Dr. Yunus’s Grameen Bank and now Nu to teach me that there is big money to be made banking the underbanked souls of the planet.

Mexico and Columbia are just the tip of the iceberg for Nu’s growth template. Legacy banks that fleece retail customers in the Gulf with exorbitant fees are now in the crosshairs of Nu Holdings as tech related disruption sweeps the Middle East’s financial markets.

After all, Nu counts half the adult population of Brazil as clients without any useless, brick and mortar network of branches. A liquid global fintech with 30% rev growth and 60% EPS growth with the world’s highest carry against Ex-King and now Sad Sack US dollar with 35% option vols is my idea of a samba money machine.

The article An emerging market fintech that is my fave potential double bagger! appeared first on Arabian Post.

Mauritius, an island archipelago state in the Indian ocean, has long maintained extensive economic and cultural ties with the GCC.

Thanks to tax treaties with India, Mauritius is a favourite domicile for wealthy Indian expatriate residents of the UAE and Saudi Arabia.

GCC citizens and residents are prominent investors in some of Africa’s most expensive luxury beach resorts located in the island nation, where property contributes 70 percent of foreign direct investment.

Dubai and Abu Dhabi’s private banking and wealth management ecosystem has vastly expanded its footprint in Mauritius. Port Louis, the capital, has evolved from being an obscure tax haven a mere decade ago to a bonafide offshore banking, wealth management and fund administration centre for largely Indian, Chinese, South African and French millionaires. It is ideally situated to profit from the current financial economic transformation in Tanzania, Kenya and Uganda.

Emirates dominates tourist traffic from the Gulf to Mauritius with two daily A380 flights from DXB to Port Louis, and plans to add a third daily Boeing 777 flight during the peak winter season in December.

Mauritius, not coincidentally, was Emirates’ second most in-demand summer holiday route in 2025. Emirates also has a code-sharing agreement with Air Mauritius, the national carrier.

Since neither Etihad nor Qatar Airways fly to Mauritius, Emirates has gained dominant market share in a highly profitable long haul route from Dubai to the heart of the Indian Ocean’s fastest growing offshore banking, luxury real estate and high-end tourism hub.

A recent decision by the Mauritius government led by the prime minister Navin Ramgoolam to offer a 49 percent stake in the troubled flag carrier Air Mauritius will thus be a strategic milestone in the evolution of the country’s air transport and tourism.

Air Mauritius has had significant operational and maintenance issues with its fleet in the recent past and its long-haul routes are limited to Mumbai, Kuala Lumpur, Johannesburg, London and Paris.

Mauritius seeks a foreign buyer with an existing global route network and deep petrocurrency pockets to finance new aircraft purchases and improve its ground support, engineering, logistics and cargo handling infrastructure.

The grapevine in Port Louis banking circles suggest Qatar Airways is the frontrunner to acquire Air Mauritius, deploying its global network across North America, Europe and Asia to boost tourist flows into the island.

With deep financial resources, the Gulf carrier could also fund much-needed fleet expansion for Air Mauritius, which currently operates just a dozen wide-body jets and turboprops serving nearby islands.

The privatisation of a national air carrier in an African state is inherently a factional, even fractious, political process and Mauritius has proved no different. The chairman of Air Mauritius has publicly opposed the idea of Qatar Airways as the preferred white knight for the financially weak Port Louis airline.

If Qatar Airways wins control of Air Mauritius, it will automatically win significant landing rights in Port Louis that will threaten Emirates’ largely unchallenged dominance on its most profitable long-haul Indian Ocean route.

However the privatisation deal goes, the outcome does not necessarily have to be a zero-sum game for the incumbent Emirates. The exquisite island destination can attract far more than the 1.4 million visitors who arrived here last year.

The Mauritius government wants to emulate Dubai by sharply boosting tourism revenues and offering a liberal golden visa programme to lure wealthy families and their businesses into Port Louis’s growing asset management and private banking hub.

With a $50 billion economy, the island nation could be on the cusp of a sustained growth surge, positioning itself as the gateway for global capital into East Africa’s emerging tiger economies.

There is a natural synergy between property investment, wealth management, high-end tourism, and free trade zone-driven FDI that links Mauritius with the UAE. This ensures a prominent role for Emirates in the island’s economic trajectory, even if it does not ultimately secure Air Mauritius should the airline’s privatisation move ahead.

For its part, Qatar has frequently deployed its liquefied natural gas wealth to acquire minority stakes in foreign carriers, so making a bid for Air Mauritius is a logical entry point into a long-haul route it does not yet serve. The Gulf airline already holds 25 percent of South Africa’s AirLink and Virgin Australia, along with 10 percent stakes in Hong Kong’s Cathay Pacific and LatAm Airlines Group.

Air Mauritius is not the only African carrier on Doha’s radar: Qatar Airways is also nearing a deal to take a 49 percent stake in RwandAir, the national airline of East Africa’s most stable and prosperous entrepot state.

The article Air Mauritius privatisation has strategic implications for the Gulf appeared first on Arabian Post.

I go into purdah for Wednesday’s FOMC D-Day secure in the knowledge, based on CME futures probability that the most important central bank in the world will cut its overnight borrowing policy rate by at least 25 basis points on Wednesday. Yet there are also “known unknowns” with the Fed’s decision that will haunt and reshape the financial markets as well as America’s toxic politics for the next year.

Will Stephen Miran’s confirmation add a Trumpian poodle vote to the FOMC and thus risk an inflation risk premium in the 10 year US Treasury note yield at a time when the bull flattener trade has taken is yield down to 4.076% So every bond trader in the Milky Way will be scanning the nuances of the Fed statement for clues to the next twist in US monetary policy and Powell’s presser for the merest hints of anti-MAGA sedition if he expresses any hawkish linkage between Tariffmania and higher inflation. Shakespeare’s words alone predicted political life in the Age of Trump four centuries ago in the twilight of the 1st Elizabethan England – “life is a tale told by an idiot, full of sound and fury, signifying nothing”. Another Bard classic would be – “uneasy lies the head, that wears the FOMC crown, under King Donald. Where nobody dares tell the Big Guy that the emperor wears no clothes!

Whatever happens on Wednesday, the prospect of easy money from the Fed is a no brainer buy on the Chinese yuan as the smoke signals from the PBOC make it clear that Beijing wants its currency to trade upto 6.95 against the greenback. I am neurologically programmed to buy the Malaysian ringgit and the Singapore dollar when I sense the dawn of a new yuan appreciation cycle in the Dragon Empire.

I will not touch the Indonesian rupiah since General Prabowo fired Finance Minister Indrawati as I fear this could well be another year of living dangerously in the Jakarta dollar bond market.

I also have metals on my mind, not the gold and silver that have provided such a windfall since last autumn to me but the red metal, Dr. Copper. I could write poetry to the fabulous opportunity copper has given us and will continue to give us next year. The Rock Ballad’s lyrics resonate in my mind. There is a house in New Orleans/They call it the rising sun/And its been the ruin of many a poor boy/Dear God, I know I am one.

Past yuan cross correlations tell me that the Mexican peso is now a buy after its 10% hit against the dollar as President Sheinbaum is eager to play ball with the king of El Norte now. My views on copper and Santiago stocks tell me that the Chilean peso will also be a winner in the post-Powell brave new world of a see no evil Fed.

The most profitable Dr. Copper proxy trade has unquestionably been to go long Zambia via Lusaka born Arjun Mittal. Zambian Eurobonds are up almost 18% in USD terms now that the IMF has greenlighted one of the most complex debt restructuring plans in African sovereign bond default history.

No question that the kwacha is up 20% against the dollar and the AED, making it the second best performing currency in Africa after Ghana’s cedi. The good lord blessed Zambia with three unique assets, the majestic Victoria Falls, Xi’s Belt and Road Initiative (BRI) and copper mines that now generate 60% of export earnings. The drought and 2020 default gutted Zambia’s economy and asset market. Yet it is always darkest before dawn in EM investing and the rains plus 25% copper price rise plus now the Fed rate cut pivot makes Zambia’s 8-year maturity Eurobond a finger lickin good buy.

The floods in Pakistan are absolutely heartbreaking and only increase my conviction that the country is on the verge of yet another geopolitical and financial volcano that makes its Eurobonds uninvestable no matter what your friendly, neighborhood Swiss Gujju private banker tells you over kirschwasser at Zuma. If he intones the corporate propaganda (houseview), respond with the Gujarati classic put down when someone gives you lip, su che, saru che, danda leke maru che!

Honoured to be invited to dinner with two VIP gentlemen who know the pinnacles of power in Uganda and Zambia, which I predict will be two of the best performing economies in Africa in 2026.

The article The good, the bad, the ugly and the fugly in emerging markets now! appeared first on Arabian Post.

Klarna hits the IPO hit parade in New York on Wednesday and the grapevine suggests that the Swedish fintech IPO is oversubscribed by at least 10X. The investment bankers priced Klarna last night at $40, even above the 35-37 range where Sequoia capital, Silver Lake and lesser grandees on Sand Hill Road, Dai Nippon, Sing and Oz will now pocket a multi-billion dollar paydirt as they unload their VC shares to the public.

Klarna is valued at a tad below $15 billion. This is a compelling 50% discount to Affirm but Klarna deserves to trade as Cinderella’s val metrics will never be matched by her ugly stepsisters even in a IPO world living la vida loca.

I will not be surprised if KLAR breaks syndicate at $50-$60 tonight but do not buy the hype. I have known Klarna in the private market and still cannot pronounce CEO Sebastian’s last name LOL.

Unlike Stripe or Chime, I always thought some kind of an evil fairy Godmother haunted Sweden’s leading buy now/pay later digital neo-bank. Klarna was founded in 2005 and I did a deep dive on the BNPL model when Sebastian expanded in the US, sadly on the eve of the COVID virus, 9% inflation and the swiftest Fed monetary tightening since the Volcker era in the 1980’s. I remember how the val spiked from 10 to almost $60 billion in a matter of months amid a white hot frenzy that exceeded even the stampede to get an allocation in the doomed Ant IPO Xi had just torpedoed in China.

I will never forget the semi-insider who demanded a 75% carry for the privilege of selling us a $20 million block for which I had found a buyer in the GCC but I could not justify such extortion in the deal mania. Just as well. Bad luck hit the planned IPO again last April when Trump’s Liberation Day killed the global markets. I have seen Karna trade at a $50 billion val in the private market and flame out at $6 billion amid the draconian monetary squeeze of 2022.

True, we are on the verge of a Fed rate cut in September and October but I cannot forget that core inflation is above 3% now, so Wall Street’s Alice in Wonderland mania for hot IPOs will be vaporized by a bond market crash. Do I want to own a high growth consumer credit business with a footprint in 26 countries at the precise moment when the US economy slips into recession and Germany realizes all is not hunky dory (ok, wunderbar) in the Teutonic Fatherland as the post-Ukraine hangover now begins in the EU.

This could well be a pop now and poops later moment for the Klarna IPO as it was for CoreWeave, Figma and most relevant, Chime. So will I get another chance at a 2nd shot at Klarna at a $8 billion val this winter? I bet I will. As for any Dubai investor wanting to challenge market Gods on IPO D-Day tonight? Don’t do it, as you have better odds of tempting lady luck with a coin flip in Vegas.

We nailed Firefly Aerospace (FLY) at $9 a share in the private market as the only major then cap table investor from the GCC and were justifiably euphoric when it spiked to 80 on its IPO debut. Lock-ins are a sad fact of life in the VC/deal business and FLY then tanked to 44 as I write. This would still be a stellar 6X if the lock-in expired tonight but sadly Santa will only knock at our door next February.

Matt’s Four Commandments for white hot IPOs? Wait till the dumb money euphoria dies. Six month lock-ins expire. Only invest in deals that show profits after the first post-IPO earnings. Margins must rise even as network rev growth goes ballistic.

Even the Circle IPO is down 65% from its peak and Bullish IPO morphed into, pardon my French, Bull Merde now. Klarna revenue growth is a beauty at 812 million USD but it is in a competitive, even cut throat business. Klarna lost $52 million in Q2 2025 and I know from bitter experience that fintechs are mere boys in a world of big hairy/scary men like American Express and Paypal, let alone Big Banks in the 26 countries where Klarna now operates. When the music stops for Wall Street, how do you separate the men from the boys in the fintech universe? Answer, with a sledgehammer. In a world where even Amazon (AMZN) once lost 90% of its market value in a meltdown, why cannot I buy KLAR at $8-$10 this winter in a post-bubble clearance sale on Nasdaq?

Poor SoftBank will turn cartwheels tonight. I remember a Deal Bro/Bankerji who boasted that he could put in a good word for me with Masa-san for the privilege of joining him at a $45 billion val round in 2021 and I responded with classic Bollywood actress’s demure “nahi-nahi”.

Affirm is profitable, has a higher growth rate, a less risky and higher growth lending business than Klarna and it is as All American as Mom and Apple Pie. It is not rational to compare Affirm’s 33% growth rate, 8% network operating margins and $276 average order with Klarna’s 20% growth rate, 3% network margins and puny $101 average order. The sad truth is that Affirm is profitable and Klarna is not. If you buy Klarna tonight at max-hype, you will pay later.

The article Do not buy the Klarna IPO now at max hype or you will pay later! appeared first on Arabian Post.

My readers and friends know that I have been a boring perma-bull on gold since early 2024, when it became obvious that the People’s Bank of China was accumulating gold bullions as a hedge against an overvalued King Dollar and a capricious White House, which had just seized $300 billion in Russian central bank reserves to punish Putin’s invasion of Ukraine. The bullish gold trade became even more compelling after Trump returned to the White House last January and set his sights on gutting China’s $1.1 trillion export colossus with punitive tariffs as the Cold War between Washington and Beijing in the Pacific Basin intensified. Gold was $2600 an ounce and has now risen to $3600 an ounce, up an incredible 38% for 2025.

The latest gold buying frenzy has been amplified by Trump’s attacks on the Fed’s political independence, pressure on Powell to slash interest rates, an escalation in geopolitical tensions in the Middle East after the Israeli/US bombing attacks on Iran, fiscal angst in the US Treasury and British gilt bond market and the vote of no confidence against Macron’s hapless Prime Minister François Bayrou, his fourth PM in the past two years.

Silver is often dissed as the “devil’s metal” since its volatility is twice that of gold and silver markets can be notoriously illiquid. In fact, Texas billionaire Nelson Bunker Hunt lost his entire wildcatting fortune in a failed gamble to corner the silver market in 1980, when silver plunged from a high of $54 an ounce to as low as $5 a few years later. So I am neither surprised nor impressed that silver rose from 29 to 41.50 in 2025 as it hitchhiked on Dr. Auric’s Great Leap Forward. What now?

Historically, silver has traded as high as 2% the price of gold in 21 out of the last 50 years. Yet silver is now 41.15 while gold is 3610, this means optically silver seems dirt cheap as it is only 1.1% the price of gold. This “cheapness” is illusory due to the fact that 50% of silver mine demand is industrial and China’s deflation/Trump’s trade war have devastated industrial growth worldwide. My research on past relative value cycles between gold and silver tell me that the bull market in gold is secular and the silver gold ratios is in the early stages of a reval to 2% sometime in the next two years. Goldman Sachs believes that gold could trade as high as 5,000 an ounce sometime in 2026.

If there is no global recession, I see no reason why silver cannot trade as high as 1.50% of gold or $75 an ounce, even though it faces epic historic resistance from the 1980 Bunker Hunt high and the 2012 Euro sov debt crisis high at 50 to 54. Weekly Oscillators also tell me that silver miners are itching for a breakout against gold miners, I know GDX does best when earnings models imply a bullion price in the Stone Age (circa 2024 AD) while the price of energy has tanked by 12% in 2025. Net-net, silver has taken out its 35 high from both last October and March convincingly. This rally is no false breakout to be faded. A triple top breakout tells me it never rains in Planet Argentum, just like it never rains in Barry Manilow’s Southern California, but when it does, man, it pours.

Relative value and net price acceleration tell me that the autumn of 2026 could be the ultimate wet and wild party to own silver futures, this is an emotional trade for me as I once blew an entire year of Penn tuition money my Dad had wired to my Philly bank account in a failed bid to make a fortune in the silver futures market. In those days, when EF Hutton talked, the teenage Matt listened as if the oracle of Delphi had spoken. Strategy? Buy silver at 38 on the next gold profit taking to 3500 for a $50-52 target. The hunger games of capitalism can be super yummy when the stars, dear Brutus, are aligned just right with a triple top breakout.

The article Dr. Auric and the devil’s metal are both serious money makers. Now What? appeared first on Arabian Post.

Gold’s 38% surge in 2025 to as high as 3570 an ounce in the New York spot market is not just about central bank anti-dollar reserve accumulation, expectations of a Fed rate cut at the September FOMC or inflation/deficit angst but also a very rational response to President Trump’s repeated assaults on the political independence of the Federal Reserve, which raises the likelihood of deliberate currency debasement at a time when the US Dollar Index has tanked 13% in the past 8-months, its worst performance since Jimmy Carter lived in the White House almost 50 years ago.

The prospect of tariff passthrough inflation, Lisa Cook’s ouster from the Fed board by Trump and the weakest US jobs data in 10-months amid an unsettled, violent, geopolitical climate in Ukraine, Gaza and North Korea has also contributed to the incredible resilience of the yellow metals fabulous bull run.

As in the 1970’s, the core essence of the Auric bull market is the world’s visceral fear of stagflation, which makes long-term bonds leprosy. The political crisis in France now means that French OAT debt now trades at 80 basis points above German Bunds, the widest credit spreads since the Euro sovereign debt crisis even as fiscal skepticism and higher inflation, led to the highest UK gilt yields since Tony Blair’s “Cool Britannia” heyday in 1998.

Goldman Sachs has written that if global investors switch even 1% of their strategic allocation from long maturity US Treasury debt to gold, a $5,000 target in 2026 an ounce will not be implausible. Gold and silver now become far more logical safe haven reserve assets in the Trump world with its rising risk of a vassal Fed, politicized rate, trade protectionism, geopolitical brinkmanship and the Mar-a-Lago Accords. Even Trump has now conceded that a peace deal in Ukraine will not happen anytime soon and thus the carnage in Dr. Tim Snyder’s bloodlands will continue.

Trump’s tariffs have also dealt a sledgehammer blow to the US Treasury bond market since the volume of cross border trade has plunged, leaving fewer dollars earned from Asian exports to be recycled as investments in Uncle Sam’s IOUs. Foreign holdings of US Treasury debt have now fallen to 23%, their lowest levels since the failure of Lehman Brothers in 2008 while Dr. Auric now boasts the highest share of global central bank reserves in a generation at 27%. The message to Wall Street and every investor is unmistakable. The fault, dear Brutus, is not in the stars but in the White House.

I used to hear my grandfather and father lament the secular decline in the mighty British pound, the reserve currency of the world in their lifetimes. I never thought I would live to see the erosion of King Dollar’s status as the planet’s safe haven reserve currency in my lifetime but it is now happening in real time.

Brent crude has now fallen below $67 a barrel in Singapore trading and the auguries for the OPEC+ decision this weekend does not look good. With European retail sales at a 3-year low, a clear slowdown in the US, China and India apparent, a supply glut this winter is inevitable.

Afterall, crude inventories in the West Texas Intermediate futures contracts, storage hub in Cushing, Oklahoma surge 2.1 million barrels last week alone. Not even the prospect of new sanctions on Russian oil exports or Indian refineries have enabled Brent to rise above $68 a barrel, even as Putin and Baby Kim joined Xi Jinping to witness the PLA’s New Age military hardware in Beijing.

Goldman Sachs, once a chest beating oil bulls now believes Brent crude will fall to the low 50’s some time next year. This has to be a scary prospect for the Gulf’s asset market as Saudi Arabia has now borrowed more money than either China or Mexico in the global debt market in 2025 with its recent $5.5 billion new issues of 5 and 10 year sukuk notes, priced 75 basis above US Treasury bonds. The Saudi Tadawul Index declined 2% in August and is now down 12% while the Saudi IPO market is in a deeply bearish twilight zone.

The article Gold glitters, oil tanks and silver hits $41 an ounce! This trend is my friend appeared first on Arabian Post.

It is now all but certain that the Federal Reserve will cut the US overnight borrowing rate, currently 4.25 percent, by at least 25 basis points at its September 18 Federal Open Market Committee (FOMC) meeting. The labour market is losing momentum, while tariff-driven inflation has yet to show up in the Consumer Price Index.

The Trump White House has ramped up pressure on Fed Chair Jerome Powell to deliver a fresh round of rate cuts. Treasury secretary Scott Bessent has publicly urged a 150-175 basis-point reduction in the Fed funds rate to jumpstart US growth. If the FOMC yields, the policy rate could sink to 2.5 percent by next summer.

Such a move would sharply reduce the interest income earned by GCC family offices and corporates on three-month US dollar bank deposits, which now yield around 4 percent or less in the Gulf.

Savers and investors in the region will therefore need to consider reallocating from cash holdings into bond and sukuk strategies within the GCC market.

Credit risk, duration risk and interest rate risk are unavoidable when investing in the GCC bond market, which is predominantly denominated in US dollars.

The kingdom of Bahrain sovereign bond has a coupon of 6.75 percent and a maturity date of August 20, 2029. Bahrain may be well into non-investment grade territory but, based on guarantees or attachment of specific cash flows, Fitch assigns this issue of Bahrain debt a BBB credit rating, which is investment grade. The four-year bond offers a yield to maturity of 5.65 percent.

If the Fed funds rate drops to 2.5 percent in the next easing cycle, the yield to maturity on Bahrain’s bonds may also decline, allowing investors to book capital gains.

Investors in the UAE can also buy bonds and sukuk issued by prime Emirati banks which are majority-owned by the governments of Abu Dhabi and Dubai.

For instance, First Abu Dhabi Bank (FAB) has a subordinated debt issue which offers a 6.32 percent coupon and a maturity date of April 04, 2034.

This FAB bond is trading at 104 and provides a yield to maturity of 5 percent. FAB has the lowest funding cost in the UAE, with an S&P rating of AA-.

Investors seeking Dubai bank exposure may look to Emirates NBD, the city’s largest universal bank. Its perpetual bond carries a 6.25 percent coupon, is trading at 103, and has a next call date of August 25, 2030, translating into a yield to call of 5.65 percent.

Suppose the Federal Reserve cuts its benchmark interest rate at every FOMC meeting after September, as Wall Street and the US Treasury secretary now expect. In that case, bond market yields will also fall, and the price of GCC sovereign and bank debt will rise.

Regional investors should not wait for the Fed funds rate to bottom at 2.5 percent in the coming easing cycle. By then, GCC bond prices will likely have already risen sharply, as cash yields compress in response to the Fed’s dovish pivot.

While it is prudent for every investor to retain a cash cushion to cover unexpected emergencies, the Wall Street dictum that “cash is trash” is most relevant when the Fed slashes its policy rate.

Although bonds typically offer higher yields than bank deposits, investors remain exposed to risks. A downgrade in an issuer’s credit rating or a rise in interest rates, driven by inflation or shock events such as a sudden war or oil price spike, as seen after Saddam Hussein’s invasion of Kuwait or Russia’s invasion of Ukraine, can trigger losses.

The biggest risk to intermediate-term bonds issued by GCC banks and governments is the supply glut in the oil market and a plunge in Brent crude below its current $66 spot price

The article US rate cuts open window for GCC bond market gains appeared first on Arabian Post.

Two fallen angel megacaps in a rich market now that July CPI proved a non-event, I see a beautiful opportunity to scale up my long Palo Alto Networks (PANW) and Eli Lilly (ELY) to former darlings of Mr. Market who have been sandbagged by adverse events in the last two weeks. My rationale?

Palo Alto Networks (PANW) was slammed down to 165 after its $25 billion acquisition deal was dissed by Mr. Market. This is an insane overreaction. I just sold high delta PANW options up the wazoo since my math tells me that a $30 hit is only rational if an asteroid hits Santa Clara in the next month and prevents my one month puts from expiring worthless. Thank you Mr. Market for another no-brainer ahlan wa sahalan trade. I love you, you love me, we are a happy family as Barney loved to croon to my baby twins.

True, Nikesh Arora is financing the CyberArk deal with only 2.5% cash and thus a Himalayan stock dilution. EPS now takes a 13% hit on a 100 million new shares to finance the deal and hence the meltdown to 165. As usual, Mr. Market ignores the EPS growth steroid shot that CyberArk provides the moment the deal closes next year since woke central demons have been exorcised by Trump at the SEC/Justice.

Mr. Arora did not CyberArk on a whim. The cost and revenue synergies have been totally ignored by the stock market, not to mention product cross selling growth in the post merger platform. The oracles of Delphi in the Embarcadero Center in San Fran are sure that PANW operating margins will rise from 28%-32%, thanks to this deal.

My cyber security guru Arjun and I both believe that the House of Arora is now all set to roar above 200 as these factors seep into the playing fields of Old Greenwich and Mayfair. The twin hedge fund capitals of the universe. I concede this puppy is not cheap at 45 times forward earnings but Cybersecurity is one of the fastest growth niches of software and a natural beneficiary of the AI revolution.

Growth is not a problem with the val metrics as Nikesh has traded at 75X in the past and is now trading at the low end of his valuation range since he became CEO even though EPS growth now gets a Noah’s Ark. Of course, the proof of the pudding is on August 18th when the earnings thunderbolt descends from cybersecurity Mount Olympus in Santa Clara. My call, Zeus will not disappoint us and the val multiple will rerate back to my 200 target, which is well below fair value for one of global technologies true class acts.

Eli Lilly was also slammed by 15% because the oral Ozempic pill generated only 12% body weight loss and not the 15% Wall Street wanted. Get real guys. FDA approval is now certain and we just got a 15% discount on the only Big Pharma other than AbbVie worth owning in the age of RFK Junior. I do not know enough about the science and regulatory politics of anti-obesity drugs but there will be a robust global market for the LLY pill and thus I have no problem buying this puppy (actually, a mutated giant St. Bernard) at 625 as I know it can give me at least $30 in low risk option premium.

The article When Mr. Market goes psycho, low risk option premium must be pocketed! appeared first on Arabian Post.

There are two gems in global finance that I believe can make serious money if purchased at the right price this autumn. Their high beta means a 16% hit if the S&P has the 10% index correction that Morgan Stanley projects.

The best thing at TPG for me is CEO Jon Winkelried, who I first met in Goldman Sachs’ cathedral of money at Peterborough Court in 1990’s London. He ran FX and commodities then but was later elected partner and the crown prince to both Hank Paulson and Lloyd Blankfein, for whom he ran both merchant banking and the global I-Bank. He joined TPG in 2015 and was the mastermind in two game changer acquisitions – merger arbitrage, real estate and private credit fund manager Angelo Gordon with $78 billion in AUM and later Peppertree Capital, a digital growth specialist with $8 billion AUM.

TPG is now a diversified alt invest manager with $260 billion AUM and global franchises in private equity, VC/late stage tech (the firm nurtured the hyper growth of Airbnb, Spotify and Uber, three of the hottest deals in the annals of pre-IPO investing in Silicon Valley. TPG manages only one fourth of Blackstone’s $1 trillion plus AUM but it does not have BX’s outsized exposure to real estate and private credit at a time when razor slim credit spreads do not remotely price in the prospect of a global recession and the energy high yield debt market is an accident waiting to happen.

Will an economic slump mean busted deals, commercial real estate cash flow angst, credit spread widening and a fall in capital raising AUM and incentive fees. So I will only buy the shares when Mr. Market gives me a 20% discount and the shares tanked to 46, which I expect to happen before November.

All the public Wall Street alt asset managers will take a nosedive, led by Blackstone, KKR, Carlyle and Apollo. Yet Jon Winkelried is my fave crisis manager when the macro storm clouds darken and thus the ideal financier to be the great helmsman of TPG in the coming difficult year.

Winkelried’s strategic machine is to rev up LP commitments and raise AUM to $500 billion in the next three years. Will he achieve this admittedly ambitious target amid Trump’s capricious economic policy making. Yes but only if Tariff Man does not gut the US economy with a severe recession that then triggers credit contagion. After all, I remember when Blackstone fell from its IPO price of $32 in the summer of 2007 to as low as $5 in the post Lehman Black Death for private credit in the autumn of 2008.

A private equity firm only shows the true metal of its pasture as the Bard of Avon put it in his Henry V when it exits a strategic investment and that is why the judgement/intuition of the Big Guy is ultimately all important. Steve Schwartzman and Blackstone has a net worth of $52 billion, so I wonder what incentive does this master of the universe have at this stage of his career in his late 70’s but Jon still has two decades of showtime left in his meteoric banking career.

TPG will surf the digital infrastructure/wireless data tidal wave created by AI and 5G. As rates fall, TPG will deploy $60 billion in cash to digital transformation growth companies all over the world. My buy/sell target on its shares are 48-65 range.

Intercontinental Exchange Inc (ICE) is a world class derivatives and data analytics exchange, which I believe is now takeover bait. Its product spectrum spans energy/natgas futures and options, financials (MBS, FX, equity indices) and softs (cocoa, coffee, sugar, orange juice). Q2 was a beauty and I am convinced we are on the eve of a commodity super-cycle that will make ICE a must own for the great and the good of Wall Street and the City of London. My buy/sell range on ICE is 160-210. Return on patience (ROP) is as critical as ROE in the money game!

The article Two gems of Wall Street finance I want to buy after a 10% index correction! appeared first on Arabian Post.

While Marjan Island day trips with Amore mio Donna Farah hardly makes me nostalgic for my singleton era visits to Vegas and college boy trips to the odious Trump Plaza/Taj Mahal casinos in Atlantic City, I have no problem taking a flutter on Wynn when it traded at 12X earnings since the free cash flow yield is a more reliable proxy for a money making trade than the capricious whims of Lady Luck. This is why the casino action now moves to Las Vegas Sands (LVS). 2Q results were a blowout last week. Macau and Singapore are both on a roll and LVS capex in both its key Asian properties is now done.

The Londoner resort has helped goose Macau market share while Bob Goldstein has hit a sixer (us colonials chaps do cricket metaphors duckies!) in Marina Bay Sands down in the Lion City. No wonder LVS shares are up 8% in the last week and 20% in the last month. This seems almost as good as the insiders who hit multiple home runs when Marjan Island morphed from a busted SRK Bollywood theme park to the first wannabe casino in the Gulf. As for moi, if a hotel/casino is not listed on the NYSE, i will never buy into the story, though do let me know if the La Belle Époque beauty at the Place Casino in Monte Carlo that did not let Manju and I since we were wearing jeans ever floats on the stock exchange, I will gladly turn cartwheels and take a punt on this mother of all trophy assets. My current buy price on LVS is 45-56. Ce n’est pas le moment de jouer LVS.

US homebuilder shares have been mired in a painful bear market, down 17% on the sector tracker ITB in the past year. The Powell Fed’s refusal to slash rates means 7% mortgage rates deter new buyers while Trump’s tariff threats against Canada and deportation of untold million illegal immigrants suggests the cost of lumber and construction/wages moves higher.

Copper tariffs will also raise plumbing costs and the price of imported Carrara marble from Toscana in La Bella Italia is also spiking higher. I do not have any interest in zombie real estate sectors du jour and have zero exposure to US homebuilders for now. Demand smells just as sweet as a garbage dump. Builders will continue to cut prices and miss on margins/guidance, though DR Horton did not. Supply is rising and the job market just faces too many crevices.

Mortgage rates will not fall big time unless the US economy slips into recession when builder shares get sandbagged and only the shorts will make money in the debris. In private real estate, I believe the best risk/reward lies in buildings that rent to doctor owned outpatient clinics, where tailwinds are rich but aging Baby Boomer demographics and shifts from nosebleed hospitals will boost rental growth. Supply is at 40% of cycle peak while the occupancy rate is 95%. Yummykins! I hear the Hippocratic Oath has now been repealed in the Gulf as our private equity financiers insist that doctors should optimize revenues via uncessassary extra procedures/tests/surgeries in order to make the hospital’s cash register ring, yella-yella-kaching-kaching. I do not know whether to laugh or to cry after I had lunch with a friend who had lived through the horror show of the Abraaj healthcare fraud and Al Masah’s Dash It All and Drop Dead medical platform.

In the UK, student housing is no longer as grotty as it was in my time, the reason I fled to America. In fact, I was amazed at the uber luxury facilities I visited in the sceptred isle though only for students who happened to be Chinese, the offspring of CCP honchos and drive to uni in their Lambos and Ferraris, vroom vroom… Seriously, there is a chronic shortage of student flats in London and other UK cities, so Jon Gray at Blackstone is on the right track, as he was in the Hilton LBO.

Senior Housing and acute care will remain a profitable theme since the supply demand equation is so skewed in the landlord’s favour, the reason my fave US REIT apart from the data center guys is now Welltower (WELL). REITs provide me with income when long duration bonds stink as well as an ideal inflation hedge and low correlation to global equities at a time when US valuation metrics are at cycle peaks at 22 times forward earnings and a zero equity risk premium. I was born at night, only not last night.

The article I now hunt for winner ideas in global real estate! appeared first on Arabian Post.

Morgan Stanley has evolved into one of the world’s preeminent wealth management franchises and dramatically reduced its exposure to volatile securities trading in a major strategy shift under its former CEO James Gorman. His acquisitions of E-Trade, Eaton Vance and the Smith Barney brokerage platform from Citigroup have enabled its client assets to grow to a colossal $6.5 trillion and provide the anchor for secular EPS growth in the next decade. Despite the trade war and hyper volatile markets after Trump’s Liberation Day on April 2nd, wealth management enabled the bank to generate stellar EPS growth in Q2. Wealth management revenues rose to $7.8 billion, up 14% on an annualized basis.

It is ironic that a firm once known as a blueblood investment banking heir of the fabled House of Morgan saw its I-bank revenues fall 5% in Q2 to only $1.6 billion. While trading benefited from the volatile Q2 milieu, fixed income underwriting revenue fell due to a fall in high yield mandate wins and issuance. With a 15% ROE and a 16X forward multiple, I think Morgan Stanley is fairly priced but I would definitely use a profit taking correction in money center banks to accumulate the shares in the 120-125 range for a 150 strategic target using derivatives strategies on the Chicago Board Option Exchange. Morgan Stanley also increased its dividend by 7%, a bullish omen from management though the div yield alone is no reason to buy the stock at 2.65% when the yield on the 10-year Uncle Sam note is not 4.47%.

I have made no secret of my conviction that the restructuring turnaround of Citigroup under CEO Jane Fraser would unlock shareholder value on a massive scale and trigger a valuation rerating to at least tangible book value. I wrote about the money making opportunity in Citi in a half dozen posts since 2023. Citigroup has risen an amazing 32% in the past six months alone as Wall Street has finally regained its lost credere after the New York money center bank’s epic disasters and a near failure/FDIC nationalization during the GFC. Chuck Prince’s decision to go on dancing proved painfully expensive for Citi’s shareholders, who lost more than 90% in its 2009 meltdown.

However, I just cannot accept the idea that Citi will command anywhere near the 2.5 times premium book value at which JP Morgan currently trades on the NYSE. So I must conclude that the easy money on this trade has been made and heed the Street’s folklore that the “trend is only your friend until the trend comes to an end”. At 90, I believe Citi is fairly priced and would need it to come down to 76-78 before accumulating the shares again.

The article What next for Morgan Stanley and Citigroup shares? appeared first on Arabian Post.

I had flagged Nvidia in this platform as a must own chip stock on the eve of the AI revolution just before its historic Q2 earnings call in May 2023. Fast forward two years and Nvidia earnings are up 10X while its share price is up 8X since my post as it flirts with a $4 trillion market cap that awaits if the shares trade at 163 (they will, Sugar Daddy Jensen and Masa-san willing LOL).

Taco Tuesday actually boosted demand for the shares when it dipped to 157. NVDA was a no-brainer winner from the thaw in US-China trade relations in Geneva/London meetings in June and Trump’s wildly successful trip to the Gulf when Trumpster set up the ultimate sovereign AI bonanza for Jensen, aka Abu Chipster. Yet Nvidia is no longer the world’s top GPU vendor but an “AI algorithm colossus” as Jensen Huang prefers to call it.

Fundamentals are still massively aligned with NVDA whose full stack model will be goosed by the AI revolution’s impact in software, networking, cloud, digital infrastructure, AV and robotics. Never in the history of a Silicon Valley as a company this big exhibited revenue growth of 60% and EPS growth of 46% as NVDA does now.

On the charts, NVDA’s 65% surge since its post Liberation Day slump is the mother of all technical breakouts and I have seen nothing like this in any other mega cap I have ever traded on Nasdaq.

If the market breaks on another Trump induced temper tantrum on Powell, trade, Musk or geopolitics and the Volatility Index, just above 16 a mere two sessions after Taco Tuesday, so quiero salsa muy caliente por favor el Presidente Trump! If NVDA trades down to 145, its forward valuation will be 25.9X, an optimal entry point for me for a 200 target.

The adoption of AI reasoning model, AV/agents accelerates demand growth for next-gen Nvidia GPU product launch cadence and thus EPS growth. No wonder OpenAI, Google Gemini, Anthropic and xAI have all released reasoning capable, multi-noodle AI models that make me sure that my CBOE options based bullish strategy on NVDA is on the money.

At $4 trillion, Nvidia’s market cap is equal to India’s GDP, 4X Saudi Arabia’s GDP, 8X UAE GDP and more than the entire sector market cap of energy and consumer staples in the S&P 500. Yet in my risk/reward calculus, there is still money to be made in the ultimate gold rush this planet has ever seen since the adoption of electricity 125 years ago. As Britain’s SAS motto goes, “who dares, wins!”, so it was with NVDA.

The article Nvidia is the dream stock of our lifetime! appeared first on Arabian Post.

Sri Lanka is one of the most fascinating and drop-dead gorgeous countries I have ever visited, the island once known as Serendip by ancient Umayyad Arab sailors/ruby merchants and Ceylon by the colonial Dutch and British who once ruled the island, an emerald tear drop in the Indian Ocean. I have a special bond with Sri Lanka because my late mother, an artist, used to spend her summers painting in the exquisite resort of Nuwara Eliya when I was a teenager in the early 80’s before the ghastly 26-year civil war devastated this magic land. So I was thrilled when my friend Ruchir Desai, fund manager of Hong Kong’s Asian Frontier Capital (AFC) tripled his weight in Sri Lanka from 5% to 14%.

When I last met Ruchir for coffee at the Ritz DIFC terrace (oops, it should have been tea), he told me that he expected the Commercial Bank of Ceylon shares to rise 50% in the next 12-months. As an investor in bank stocks (note Citigroup, one of my fave New York money center banks in the past year, is now trading at 88.72, up 37% in the past year). I passed this invaluable financial intel Ruchir gifted me to the three Sri Lankan ladies I have adopted as my sisters. Thank you Sheila, Anola and Naufarah! It is so nice to hear good news from Sri Lanka as I was last there on the eve of its 2022 political crisis, rupee meltdown, petrol lines and IMF bailout.

Sri Lankan equities are priced inexpensively at 8X earnings, down from 14X three years ago. As Ruchi puts it, the combination of cheap valuations, accelerating earnings growth and political stability after the election of Anura Kumara Dissanayake as President is a fantastic combination and a compelling argument to allocate money now to this exciting Asian frontier market.

The IMF program is rock solid, the external debt restructuring is over and the central bank governor in Colombo, whom Ruchir regularly visits on his company calls to SL is one of the most respected monetary mandarins in Asia. After five difficult years, the growth cycle has finally begun in Sri Lanka with a stable GDP, rising EPS/margins, the proverbial sweet spot for equities outperformance.

Colombo is on the eve of a historic valuation rerating and I do not intend to miss this frontier market Xanadu in 2025, thanks to Ruchir, my Asian frontier market sherpa. I can attest from personal experience that tourism, banking and logistics are quintessential growth industries in Sri Lanka. Strangely enough, I was a student of Raj Rajaratnam when he was a finance TA at Wharton two decades before he became a star technology hedge fund manager at Galleon and Sri Lanka’s only billionaire in New York before his fall from grace in a sordid insider trading scandal.

While I preferred to stay at the historic Galle Face Hotel, I was stunned by the number of young Indian and Chinese tourists who crowded the casinos in the five star steel and concrete hotel monstrosities on the Colombo seafront. Hopefully, the government’s current focus on fiscal consolidation and reform momentum continues to deliver a multi-year bull market in Sri Lankan equities as the Field Marshal, Shaz Speed and Aurie have delivered in Pakistan since the exit of Imran Khan. Ruchir is also my jungle guide for Pakistan, Central Asia, Iraq and Vietnamese equities in addition to SL. I must rename my friend the bionic $6-Million Man LOL.

My 2-paisa suggestions to the Colombo stock exchange. One, you need to do everything in your power to boost liquidity before I can seriously help you attract Gulf family office money or institutional capital to SL. Two, the emerging debt market’s heavy hitters in New York do not take kindly to investing in the bonds of a country named the Democratic Socialist Republic of Sri Lanka as it sounds eerily similar to Zohranomics LOL.

The article Sri Lankan equities are an Asian frontier market money gusher! appeared first on Arabian Post.

Both Israel and the US were careful not to target Iran’s oil export terminal at Kharg Island, a major reason why Brent crude trades at 68 and not 100. It is ironic that Iran’s oil output is now 5.1-MBD (this figure includes condensates and gas to liquids), its exact amount in 1978, the last year the Shah ruled from his Peacock Throne. There is no danger of an oil price spiral triggering an inflation shock in the US as long as the “drill baby drill” mantra suffuses the Permian Basin and Saudi Arabia does its best to pressure OPEC+ quota violators Iraq and Kazakhstan with 400,000 barrels a day of monthly output releases. The United States has achieved energy independence and the manufacturing sector’s oil intensity has plummeted since the 1970’s oil embargo era.

The sources of potential inflation lie in Trump’s whimsical tariff policies and immigration crackdown, which will dramatically reduce labor supply at the precise moment that the Baby Boom generation reaches “peak retirement”. This means a wage price spiral risk that is not remotely priced-in to the current valuation metrics of the financial markets and the US dollar is imminent. This wage price spiral risk is also the reason why Fed chairman Jay Powell is so adamant about keeping the policy overnight borrowing rate (Fed funds) at its current midpoint rate 4.375% until credible inflation data emerges from the tariff spasms of Trump’s multiple trade war. Net-net, Wall Street obsesses over a softer labor market when the real battle is a structural shortage of workers to pick citrus in the orchards of the San Joaquin Valley in central California or code software in the Bay Area.

Economics 101 argues that even taco Trumponomics will mean higher US wages and higher cost of imports, taking inflation rate closer to 3%. In a world where the bond vigilantes can precipitate a mini gilt/sterling prices at the very sight of Chancellor Reeves in tears at the PMQ in Westminster, a 3% US inflation rate is certain to trigger the mother of all Treasury bond meltdowns.

Economic 101 argues that Trump’s tariffs, immigration crackdowns and even tax cuts mean debt securities will be gutted by the cancer of inflation even as economic growth slows, consumer credit risk goes ballistic and the $80 trillion housing market collapses under the weight of 8 or even 9% mortgage rates.

The post Lehman golden age of low inflation/low interest rates will end not with a whimper but with bang that will resonate all over the world sometime before Santa Claus fills up my Christmas stocking with a new list of shorts delivered by Rudolph the red nosed reindeer (camel?) direct from the North Pole. This is why I believe the current speculative mania is destined to end in tears as the macro stars are aligned for another 2008 scale endgame.

Wage push inflation has a seismic impact on inflation expectations and will usher a protracted period of Fed monetary tightening. This shift in inflation expectations will be the final nail in the coffin of easy money and go-go property speculation, as it was in the autumn of 2008. The laws of economics, let alone gravity, have not been repealed in Umm Suqeim.

The big beautiful bill’s tax cuts and the trillion dollar arms race with China mean a $2 trillion budget deficit and record Uncle Sam borrowing in the debt markets means a higher term premium in interest rates that is simply not priced into current Wall Street valuation models. The global economy is poised to enter the twilight zone of zero/minimal growth and structurally higher inflation. My call, fasten your seatbelts and brace for a painful hard landing.

The article Why higher inflation will sink the US economic supertanker? appeared first on Arabian Post.

My generation were teenagers in the late 1970’s and thus passionate fans of Sweden since Abba dominated the Top of the Pops (God, how I hated the ghastly Dancing Queen since every girl in high school thought this syrupy pop tune was written specifically for her!) and Björn Borg dominated Centre Court at Wimbledon as the Men’s Champion until the trophy was wrested from him in 1981 in a five set marathon by the awful but brilliant American John McEnroe. As I grew older, I learnt to love Sweden’s amazing social tolerance and cosmopolitan culture, its democratic values, welfare state, its beautiful lakes, ancient cities and effervescent young women whom I met in my fave Hellenic beach resorts like Ayia Napa in Cyprus and Mykonos in the Greek Aegean.

However, in 2025, I have a special reason to love Sweden and it is definitely not the ugly furniture of Ikea my Gen-Z twins adore. The Swedish kroner has been the best anti-dollar FX hedge of 2025 and is up an incredible 17% in the last 6-months. As I expect the Trump Buckeroo to fall 20% before the Big Guy leaves the White house, I hope my Swedish kroner stash rises another 20% and offsets the already exorbitant cost of a Scandi holiday. Since I prefer the Med to the Baltics at any time of the year, why not revert back to the 1980’s watering holes in the Cyclades and meet nice Swedish people in the Scandinavian love shack rather than actually flying to Stockholm Gothenburg or Malmö.

Sweden is also one of the world’s most successful case studies in innovation and entrepreneurial capitalism, the reason Nasdaq’s Old World hub is in Stockholm. This $900 billion economy is one of my favourite countries to invest for the next 5-years as long as Putin does not invade Estonia and try to usurp King Charles XII’s role as the supreme war lord of the North with a blockade of the Baltics. After all, Putin is from St. Petersburg, a port founded by Tsar Pyotr Alexievich to fight the Swedish empire, the superpower of the North in the first decade of the 18th century.

This IT/green tech/export colossus is a goldmine for investors who love corruption free economies dedicated to innovation and talent, a natural for any refugee from Planet Dollar like moi!

The article Salam Stockholm! appeared first on Arabian Post.

The past decade dramatically illustrates the peril of trusting paper money as a store of value in a political system designed to pivot recklessly towards deficit financing and deliberate debasement of the world’s reserve currency. The US national debt is now $37 trillion and the annual budget deficit is now $2 trillion or 125% of GDP. Add political gridlock in Washington, violent migrant riots in Los Angeles and even ghastly political assassinations in Minnesota and I see echoes of a classic emerging market crisis brewing in the heart of the US capital markets. So I have been a papa bear on the US dollar since late 2024 but I know that the Euro, British pound and gold are also flawed as stores of long term value in a world where war, inflation, currency crisis, trade conflicts and chronic sovereign debt accumulation is a given.

Bitcoin definitely has a place in the sun as the fiscal Frankenstein taints almost all versions of central bank Monopoly money. My biggest problem with Bitcoin is its psychotic volatility and its extreme correlation with the Nasdaq 100. Yet this is an opportunity also when spasms of risk aversion create buying opportunities, as happened in early April when Bitcoin plunged to a juicy $73000 when the stock market plunged 19% after Wall Street was unhinged by Trump’s Liberation Day tariff wars.

It is now difficult to swallow the gospel that US Treasury bonds are the world’s ultimate risk-free havens and that the omniscient, omnipotent Federal Reserve conducts its dual mandate without political interference from the White House. In a world where the President berates the Fed Chairman as “loco”/”dumb” and the Treasury Secretary meekly echoes his Dear Leader’s half literate outburst on trade and global economic relations, the North Korea dimension in US policy making has made global investors flee the greenback with good reason.

As the world loses faith in the Fed, Congress and the illusion of global monetary stability, it is obvious that a rise in interest rates will trigger a Black Death in asset valuation worldwide, another legacy of a decade where the world’s central banks printed trillions of dollars to monetize fiscal deficits from America to Japan, Europe to China. Crypto currencies thus become a safe refuge in such a world where wealth can be vaporized on a mega scale in an instant. Take the US dollar. Every investor, saver and business in the Gulf has lost 12% of their net worth in 6-months as the US dollar index plunged from 110 in January 2025 to 97 six months later. The US has now joined Israel in a war with Iran, whose outcome could well include inflation, fiscal ruin and a shattered world geopolitical and economic order. Doing nothing to protect assets in such a world is akin to being a lamb ready to be fleeced on the path to the slaughterhouse.

As Wall Street embraced digital assets and indexation amplifies the passive investing universe, I expect volatility on Bitcoin to fall. The halving cycle creates distinct market cycles that technology will only help us fathom and capture in our trading strategies. My guesstimate is that we see a $80,000 to $150,000 Bitcoin trading range in the next 12 to 15 months even as I am alert to the arrival of entire flocks of malign black swans on the investment horizon.

Digital gurus believe that Bitcoin will attain asset class status that would imply a peak price of $800,000 in the next decade even as secular volatility falls, as it did for Amazon, Nvidia, Google and Meta overtime. Gold is 10X Bitcoin as an asset class now but AI will converge with DeFi in the biggest megatrends of our lifetimes to midwife a financial future replete with limitless possibilities and risk. That much, at least, is certain!

The article What next for Bitcoin as it evolves into an asset class? appeared first on Arabian Post.

It is ironic that Brent crude collapsed from its $78 high on the New York Merc to as low as 66.80 in early Singapore trading even though Iran’s Revolutionary Guards launched a missile strike on America’s largest military base in the Gulf in Qatar. This retaliatory strike was polite, measured and apologetic with advance notice given to Centcom to avoid any US military casualties. Trump literally thanked Iran for the great degree of consideration shown for the sanctity of human life at Udeid Air Force base. The missile launch was symbolic and not retaliatory, the prelude to potential peace talks between Iran and the US on Trump’s preannounced terms.
The oil market finally agreed with my view that there was no real risk of mining, let alone closure of the world’s most critical energy chokepoint – the Straits of Hormuz. Yet the scale of long liquidation in the oil futures/swaps and wet barrel market stunned me as it presages a potential collapse of oil prices under the weight of a supply glut and falling demand. Who would have believed that energy would be the worst performing sector on the first trading day after the US bombed Iran’s three most important nuclear hubs at Fordo, Natanz and Ispahan. Welcome to the surreal Alice In Wonderland milieu of the global financial markets.
The macro heartbeats of finance now suggest that the optimum trade is to short gold for a $3200 target. Go long the AI colossus Nvidia as the risk fairies once again return to the money making Xanadu gifted to the cognoscenti by Jensen Huang. AI is the most revolutionary technology in human history because it improves as it is implemented across the digital ecosystem and is a productivity game changer that can mint fortunes for investors who grasp its cosmic potential. I have written at least a dozen posts on Nvidia since its May 2023 earnings triggered the latest parabolic rise in its revenues, earnings and share price. A 10X return on a free post is my idea of an intellectual black swan even though no one else has generated an idea as remotely profitable for me as I have done numerous times for both my close friends and followers.
Note that my conviction that 2025 would be the year to short the US dollar against the Euro, British pound and gold has proved consistently profitable. I have articulated the macro logic of the long Euro, sterling and gold trade ad infinitum since late 2024 in this post and in my media columns in the GCC and London. The Euro was at 1.0258 just after New Year Day 2025 and is now just above 1.16. Sterling/cable was at 1.2520 on New Year and is now 1.3615 as I write. Gold was at 2650 in early Jan 2025 and is now at 3325. I am temporarily out of love with Dr Auri and my cronies may express their thanks for this money making fiesta via liquid gifts next time we meet for dinner LOL!

The article Nvidia, Euro and the British pound were all money gusher trade ideas in 2025! appeared first on Arabian Post.

Operation Midnight Hammer was a spectacular military success though it will take 60 years more for the top secret CIA files on Trump’s rendezvous with history at Fordo to be declassified even though I hope Centcom and the Pentagon generals will release their BDA (Battle Damage Assessments) in the next two weeks to reinforce their claim that the Islamic Republic’s nuclear assets beneath the mountain in Fordo have been “totally obliterated”.

125 American military aircraft in the skies above the Persian desert near Qum, the citadel of the Ayatollahs, have now changed the destiny of Iran and the Middle East forever? These aircrafts included the B-2 stealth bombers, F-22/F-35 fighter jets and 30 air refueling tankers. Intelligence, surveillance and reconnaissance planes that roamed over Iran’s most sensitive airspace but the regime was unable to launch even a single ground to air missile at the USAF aerial armada.

In Texas slang that George W. Bush would have grasped, this was not a knife fight but a hightech duck shoot. We can only hope that a secular, democratic, liberal Iran that makes peace with all its neighbours emerges from the collapse of the mullah regime but after 46 long years since the fall of the Shah’s Peacock Throne, the unknown unknowns at this stage are far too great to make any definitive conclusions.

I doubt if the mullahs will mine the Straits of Hormuz since that would mean immediate devastating retaliation from Centcom’s assets in the Gulf. In any case, the embattled Iranian regime is desperate for cash, imports all its food via container shipping via the Straits and is in no position to alienate its only major client – China. The PRC lifts 1.7 million barrels a day (MBD) of Iranian crude exports from Kharg Island and Tehran has recently built up its floating inventory to above 8-MBD off Singapore in order to ensure that exports to the port refineries of the Shandong Peninsula are not interrupted.

The Iranian regime also needs the support of Gulf Arab oil exporters now that Putin has done squat to help it survive and Pakistan’s Field Marshal Asim Munir has nominated President Trump for a Nobel Peace prize after a White House lunch that included a halal goat cheese gateau and a Turkey burger (waddi-waddi chaati wala, Amriki murga Sirji), delicacies somewhat unknown in dhabas of Toba Tek Singh.

Brent is at 76 and gold is flat at 3355, so the financial markets have discounted Trump’s escalation, which even I had predicted in a post last week after I heard that squadrons of air refueling tankers were moving to the Gulf as were aircraft carriers like the USS Chester Nimitz, the USS Carl Vinson and USS Gerald Ford. That meant only one thing to me, Trump had already made the biggest strategic decision of his life. So how come the Iranian air defense was pathetic to non-existent when the open source intel data points all suggested that a massive US strike was imminent this weekend? The conclusion is obvious. The Israelis have gutted Iran’s air defenses and missile launch capabilities after literally months of bombing since last October.

The regime’s top generals in the Pasdaran, Basij or Missile Force can no longer command or control an armed response for the simple reason that they are all now dead, killed by the IDF. For the sake of the Middle East and its own people, let us all hope that the mullah regime now choses peace rather than the tragedy that Trump has promised if Tehran does not take the path of unconditional surrender. What a pity, what a world!

The article Thanks to Trump, a nuclear Iran no longer haunts Middle East appeared first on Arabian Post.