Tired of Winning?

Chart of the Week #96

On February 24, President Trump stood before Congress and told Americans they were “winning so much” they might be getting tired of it.

Four days later, he launched strikes on Iran that would trigger the largest military crisis in the Middle East since the Iraq War.

So instead of winning, here’s what Americans got.

As I write this, gas prices are already up 33% from where they were a month ago—the sharpest spike in over two years. The national average has already hit $4 a gallon, with states like California already at $6. Diesel—the fuel that moves everything you buy—is even worse.

But Americans aren’t just “winning” at the pump—check your 401(k). Take a look at the sea of red below.

Nvidia down nearly 14%. Apple over 8%. Google and Tesla around 12%. Microsoft down 9%. Across the board—tech, finance, retail, consumer goods—it’s a bloodbath.

Now, if you’ve been following us since the war started, you’re probably not surprised. Iran’s response to the strikes was swift: ballistic missiles, drone swarms, and closure of the Strait of Hormuz—the single most important oil chokepoint on the planet. As I wrote last week, Hormuz normally carries about 20 million barrels of oil per day. Saudi Arabia and the UAE have pipelines that bypass the strait, and some shadow fleet tankers are still running the gauntlet. But there’s still a massive shortfall.

Aside from the fact that this situation is pushing the prices of everything higher in the interim—oil is what makes the modern world hum—there’s a bigger problem. Every major oil price spike in modern history has been followed by a recession. 1973—OPEC embargo, recession. 1979—Iranian Revolution, recession. 1990—Gulf War, recession. 2007—oil hits $147… and we get the worst recession since the Great Depression.

But it’s not just oil. Natural gas prices are surging—which means fertilizer costs are surging right behind them. Natural gas is the primary input for ammonia production, and ammonia is the building block for urea, the world’s most widely used nitrogen fertilizer. When natural gas gets expensive, fertilizer gets expensive. And when fertilizer gets expensive, food gets expensive.

So yes, Mr. President. Americans are tired. Just not in the way you meant.

Have a good rest of the weekend,

Lau Vegys

P.S. This war and its fallout are exactly why we sent out two Crisis Investing alerts over the past month positioning subscribers for what's unfolding. Details here and here.