By Michael Every of Rabobank
Sorry, Bank of Canada (rates held at 2.25%), Chinese CPI and PPI (1.2% and 3.9% y-o-y headline) US CPI (0.5% m-o-m and 4.2% y-o-y headline, 0.2% and 2.9% core), and the ECB today: you all matter but are just pieces of the global picture one now needs to finish: the war vs. Iran.
Changing the recent pattern, President Trump said he would strike Iran again today and did. At time of writing, nearly 50 Tomahawk missiles had been fired alongside airstrikes against radar and drone installations, with a disputed report that a petrochemicals plant was also hit. Even by the standards of the ‘peacefire’ --which, as I’d argued yesterday morning, Iran’s leadership then agreed no longer suits them-- this is a major escalation.
However, the US is still holding back compared to what it can do militarily, and Israel is sitting on its hands. Notably, Trump told Fox News he has been in direct contact with senior Iranian leadership, a new development, and they had asked him to stop bombing: to which he claims he told them to sign the deal on the table, or on Thursday evening he will “Bomb the s**t out of them.” In other words, hits against infrastructure, energy, and nuclear sites, can’t be ruled out.
The immediate Iranian response has been to declare Hormuz entirely closed to all ships. However, despite the fact that Iran was prepared for these US strikes there have, as yet, been no successful counterstrikes against US bases in the Middle East or against GCC energy and water infrastructure. Will this happen with a lag? If not is Iran unable to do so, or just unwilling to? Equally, will Iran act with the Houthis to close the Bab-el-Mandeb and Red Sea, making this energy crisis far worse?
These are staggeringly important geopolitical questions on which global markets, and the BoC and Chinese and US inflation, will ultimately pivot.
So far, the market reaction has been relatively mild – oil only up around $2. Perhaps part of that is down to another piece of the Iran puzzle that has befuddled energy experts and visitors from outside the field – what is happening in terms of oil flows from Hormuz.
Trump had yesterday announced the US is taking “millions of barrels of oil” from Iran, causing the usual consternation. A breakdown of what he meant comes from shipping maven @mercoglianos, who argues the US secretly resumed Project Freedom to escort ships through Hormuz using autonomous vehicles, aircraft, and drones to escort ships through the southern Strait near Oman. Very Large Crude Carriers are exiting the Gulf, conducting ship-to-ship transfers to smaller tankers near Oman, then returning to pick up more oil. In that regard, oil can flow even as the number of ships stuck in the Gulf appears unchanged. War risk insurance, potentially provided by the US Development Finance Corporation, could be covering these few ships making the transits. Yet Iran has been targeting them and the US responding with airstrikes: the Apache helicopter just shot down, triggering a new US attack, was likely part of this operation.
Of course, what may have been happening invisibly, despite 24/7 market coverage, can’t compensate for normal Gulf flows, which is why the plunge in the US and Japan’s SPR and a huge drop in China’s oil imports --none of which are sustainable-- are doing the heavy lifting to keep oil below $100. That dynamic always pointed to escalation: will it be military now, via the US; with others later as more energy panic kicks in; or via more backchannel diplomacy from China?
Regardless, it’s hard to make economic or central bank forecasts without one for the Iran War, as the FT says airlines are drawing up cuts for an 'ugly' winter’ due to stubbornly high jet fuel prices; Reuters notes global container shipping rates are soaring and “Fuel analysts and maritime experts warn it could take around a year for bunker fuel supplies to return to normal even if Trump is able to quickly clinch an Iran deal”; and the UK Telegraph argues farmers may have to stop planting crops without government support.
But geopolitics and geoeconomics are to the fore everywhere and it’s not only energy and petrochemicals being squeezed.
In the Middle East, Turkey’s President Erdogan claimed Israel’s strikes on Lebanon and Syria threaten it and “its aggression must be stopped”, after talking about the liberation of Jerusalem. Israel’s diplomatic response was equally undiplomatic; Saudi Arabia resumed imports from Lebanon after a five-year hiatus; and a Saudi-Turkey rail link may be completed within three years.
In the Americas, Trump suggested he may not renew the USMCA trade deal with Mexico and Canada; and US Secretary of War Hegseth warned Cuba that any arms procurement by it seen as threatening the US could invite a confrontation - we are talking about 1956 at the moment, so why not 1962 too?
In Europe, five capitals are reportedly calling to freeze voting rights for new EU members, radically changing the structure of the Union; Politico reports ‘French far-right firebrand’ Zemmour is embracing MAGA to try to pay political dividends at home ahead of the 2027 presidential election; and the South China Morning Post asks ‘As de-dollarisation trends persist, can the yuan take the euro’s place?’, meaning taking the #2 spot in global settlements from the single currency.
In Australia, the political scene continues to churn with talk of a ‘non-compete’ clause and voting preference deal between the centre-right Liberals and populist right One Nation that has suddenly soared in the polls.
In Asia, Taiwan fired US mobile missile launchers into the waters facing China for the first time as “a message of resolve”, according to the Wall Street Journal; the US has asked China to resume rare earth exports to Japan, which have been cut off, as Tokyo pivots to US tungsten scrap exports to fill that gap, and the Democratic Republic of Congo’s curbs on cobalt exports have sparked shortages for everyone, including China; Japan’s parliament passed a revised economic security law to support overseas projects (as Bloomberg asks ‘Who’s Afraid of ‘Japanese Neo-Militarism’? Nobody’ - that’s arguably not true; and BOJ Governor Ueda has been hospitalized and is expected to miss the June policy meeting. Get well soon and perhaps be can follow the Iran news from there.
Indeed, now back to whatever piece of the war you happen to be focusing on.
Tyler Durden Thu, 06/11/2026 - 09:40Summary:
Iran Threatens Musk's Starlink Ground Bases In Gulf Area Ahead Of IPO
Massive SpaceX IPO Demand Coming From Gulf Sovereign Wealth Funds
IranIntlbrk is the X handle for Iran International's breaking-news account and cites Tehran-aligned Fars News Agency, stating that the Islamic Revolutionary Guard Corps has placed the economic interests of Elon Musk in West Asia, including Arab countries and Israel, under consideration on a new target list.
IranIntlbrk continued:
1. Fars News Agency reported that this action is under consideration following claims by the IRGC-affiliated outlet that the U.S. and Israeli militaries' use of infrastructure managed by Elon Musk, including Starlink, has been proven.
2. A media outlet affiliated with the IRGC wrote that Starlink's ground stations in Israel, Qatar, Jordan, the United Arab Emirates, and Oman, alongside SpaceX shareholders including the infrastructure of the two companies "Al-Fazabi" and "Exchange," are among the new targets of the Islamic Republic.
The IRGC's threat against Musk's Starlink ground stations (Starlink Gateways) across the region should come as no surprise. IRGC forces have already demonstrated a willingness to strike Gulf data centers, including the reported Shahed drone attacks on two AWS data centers in the UAE.
The timing of the IRGC's threat against Musk is notable. It comes one day ahead of the SpaceX IPO, suggesting Tehran is trying to remain relevant in the news cycle with another round of big-bad warnings aimed at U.S. tech giants, Gulf allies, and critical communications infrastructure.
Starlink Service Map
On Wednesday, we reported that massive demand for the SpaceX IPO was coming from Gulf sovereign wealth funds.
Also today, Treasury Secretary Scott Bessent wrote on X, "The Iranian regime will lose the zero-sum game it is playing. Any damage it inflicts on our allies in the Gulf will be paid for with funds extracted from Iranian accounts."
Massive SpaceX IPO Demand Coming From Gulf Sovereign Wealth FundsOne week ago, SpaceX kicked off its institutional roadshow, headlined by JPMorgan CEO Jamie Dimon, who hosted a nationwide "live interactive discussion" with private wealth clients.
The latest signal of investor demand comes from the Gulf, where massive sovereign wealth funds are reportedly seeking allocations in the IPO ahead of its expected Friday debut, according to Bloomberg News.
The report says Saudi Arabia's Public Investment Fund and Kuwait Investment Authority have each placed orders for the IPO worth $1 billion to $5 billion, while the Qatar Investment Authority is also expected to make a significant commitment.
The report continued:
Entities based in the region are already prominent shareholders in Elon Musk's rocket, satellite and AI firm, and many are sitting on large paper gains based on the billionaire's targeted valuation of $1.8 trillion, the people said. It wasn't immediately clear how much of the planned outlay is intended to prevent dilution of existing stakes after SpaceX's listing.
The interest from the Gulf is part of a broader rush into the deal from global institutional investors, whose orders have exceeded the number of shares on offer. Some have bid for $10 billion or more of stock, Bloomberg News has reported, though the eventual allocations might be smaller.
In a separate report, Reuters says the IPO is three-and-a-half to four times oversubscribed, highlighting massive institutional demand for what is shaping up to be the largest listing on record and a defining moment for the space economy.
Elon Musk has joined several Zoom meetings with potential investors, while SpaceX President Gwynne Shotwell and CFO Bret Johnsen were expected to meet with roughly 300 institutional investors at a Morgan Stanley lunch in Manhattan.
Goldman Sachs was selected as the lead bank for the IPO, alongside Morgan Stanley. JPMorgan, Bank of America, and Citigroup are also among the 23 banks working on the deal, offering a staggering $75 billion by selling about 555.6 million shares. The planned IPO price is about $135 per share.
Why SpaceX's IPO Is drawing record investor demand...
We offered readers a complete deep dive into the mechanics of the SpaceX offering and how to trade the world's biggest IPO (read the report). SpaceX's underwriters have shut off investor access to the offering in China and Hong Kong, primarily due to regulatory and compliance concerns.
However, there is a concerted effort by unhinged leftist lawmakers (such as Elizabeth Warren) and left-wing pension funds to delay or deny the SpaceX IPO, mainly for political brownie points. They appear to view the sudden new wealth generated for Elon Musk (and his employees and investors) as absolutely horrifying...
NEW: Elizabeth Warren is calling for the SEC to delay the mega SpaceX IPO.
Warren cites concerns about "questionable valuation," governance structure & mandatory arbitration pic.twitter.com/4mQqzTtYRs
... given that Musk is pro-humanity and seeks to liberate the world's minds from toxic progressive causes.
Tyler Durden Thu, 06/11/2026 - 09:26Earlier today, in a report discussing how "AI bills are out of control", JPMorgan tech guru and TMT salesman, Mark Schilsky wrote that "most of my high level investor discussions focus on one major topic: when will the party end? Put another way, tech investors have made so much money in Semis so quickly that they are looking for potential warning signs that the music is about to stop. Predicting such an end is incredibly difficult. As such, investors are searching for forward-looking indicators that might suggest the AI party is nearing a peak."
Here, the JPM trader highlighted perhaps the clearest indicator that the music was about to stop: "A slowdown in the growth of the annualized run-rate revenues of the major AI labs. If there is any sort of second derivative ‘kink’ in their growth algorithms, that could portend a future problem for the AI trade."
In response to this, we pointed to just such a "slowdown in the run-rate revenues", when we showed that the Silicon Data token price index is down for 7 straight days to a level last seen in mid-January, or long before the current agentic craze started. Almost as if it knew something...
SourceTurns out it did: late on Wednesday, with futures surging and Korean stocks erasing a nearly 5% drop and turning green, and euphoria generally back front and center, the WSJ may have burst the AI bubble when it reported that - contrary to conventional wisdom that token prices will magically go to infinity - OpenAI, which has been badly lagging both the revenue and IPO race with Anthropic in recent months - was considering "drastically lowering the prices it charges users" in a panic scramble to regain market share and win back customers from archrival Anthropic.
And so, at a time when there is suddenly a mass realization that token prices had been soared in recent weeks, a wake-up call which JPM lovingly described as follows: "investors have been discussing the possibility that much of the token spend that corporate America is currently incurring is ‘wasted’. Anecdotes from companies like UBER aren’t helping this narrative", OpenAI is weighing significant cuts to what it charges for tokens. Hilariously, the move would be in anticipation of similar cuts the company expects at Anthropic, which is trying to double how much it charges for its latest model, Fable, which provides at best a very modest modest improvement in performance over Opus 4.8.
In short, we now have a classical deflationary race to the bottom, precisely the opposite of what the profit-strapped industry desperately needs to grow into its gargantuan balance sheets (and massive SPVs); Instead, the AI world is about to get hit with a collapse in both revenues and profit margins, while cash burn goes into full-on incinerator mode.
Warning that "business executives have begun to balk at the high prices for AI usage", the WSJ writes that OpenAI CEO Altman said at a recent event that costs had become “a huge issue.”
“I think we’ll have a lot of ways we can help people get more value for less spend,” he said.
In other words, LLMs tried to push up token prices to and beyond their breaking point... and succeeded.
And now it's time for the brutal drop: a drastic price war will erode the profit margins of both companies, which already lose billions of dollars because of the enormous cost for computing resources needed to run AI systems.
Altman's decision to start a price war was prompted by OpenAI's attempt to catch up with its younger rival in the race to win enterprise customers that are paying large amounts of money for AI tools that can improve workplace productivity. Anthropic’s revenue recently surged
"after its coding tool Claude Code went viral among software engineers, and the five-year-old startup surpassed OpenAI’s valuation for the first time."
Or at least that's the WSJ version of events. In reality what happened is that Anthropic quietly annualized the one-time bumper revenue from Feb-May during the agentic splurge when nobody had any idea what they were paying, to come up with the ludicrous $47BN ARR, which they then actively paraded ahead of their IPO. But let's see what Anthropic's ARR is next month will be after clients finally check their token bills.
Sure enough, as we have been writing repeatedly in recent weeks, "some corporations poured so much money into Anthropic’s products that their leaders are now seeking to rein in spending. Earlier this year, an Uber executive said the company had maxed out its 2026 budget for agentic, or autonomous, AI use, and another company leader said last month that it was difficult to link AI coding productivity improvements to new customer features."
In other words, yet again the age-old question of whether and when AI will have a positive ROI rears its ugly head, and the answer is not any time soon... if ever.
Such comments from many executives have triggered a broader debate within Silicon Valley about so-called “tokenmaxxing,” or the practice of using as many tokens as possible to boost productivity, including in ways that don’t generate returns on investment. That may have worked 6 months ago when LLMs were giving out compute for free to capture market share, but it doesn't work now that all the major AI companies are suddenly charging an arm and a kidney for an "agent" that responds to emails.
As the WSJ concludes, "a price war would be an early test of the strength of both companies’ business models ahead of hotly anticipated public listings." OpenAI and Anthropic have captured the majority of revenue from new AI products, powering their rise. But an underlying risk that investors have long identified is the interchangeability of their products, and the ease with which customers can abandon one for the other.
There is a bigger risk: as we noted one week ago, in the coming price war, neither OpenAI nor Anthropic will win. Instead it will be the country that has made reverse engineering Western technology and then selling it back to the west at 90% off, into an art form. Yes, China is about to enter the chatbot.
Tyler Durden Thu, 06/11/2026 - 09:15The number of Americans filing for unemployment benefits for the first time jumped to 229k last week (more than the 220k expected) and the highest in four months...
Source: Bloomberg
Pennsylvania, California, and Minnesota are the states seeing the largest rise in claims last week...
Continuing jobless claims also rose last week to 1.795mm Americans - highest in two months, but still relatively low in the context of the last two years...
Source: Bloomberg
The bottom line is that while initial jobless claims are rising, they remain low by historical standards and continue to run below year-ago levels.
Taken together with the May payrolls report, the data suggest that labor-market momentum remains firm.
Tyler Durden Thu, 06/11/2026 - 09:08Microsoft founder and mega-billionaire philanthropist Bill Gates told Congress that Jeffrey Epstein exploited knowledge of Gates' multiple marital infidelities. Gates insists, however, that he committed no crimes and that the women he had adulterous sexual relations with were not associated with Epstein. Nonetheless, Gates' highlighting of Epstein's leveraging of Gates' sexual secrets fans suspicions that he sought to exploit similar secrets of other powerful people.
"I never witnessed nor had any indication that Epstein was engaged in ongoing criminal conduct. I never went to his island, his ranch, or his Florida home. I have never victimized anyone. While he may have sought to foster a personal relationship, I was never interested in that and never reciprocated," Gates said in his opening remarks, which were published by the House Oversight committee. His testimony on Wednesday was given behind closed doors.
Bill Gates with an unidentified but manifestly well-proportioned brunette number, in a photo from the Epstein files (House Oversight Committee)Gates told legislators that Epstein became aware of Gates' serial philandering with three different women via a mutual acquaintance. “Based on what has been released in the files, Epstein was working to use information about my infidelities—in addition to many lies that he layered on top—to pressure me to re-engage with him,” Gates said. “He was unsuccessful in this effort, but it shows some of the ways he tried to leverage his interactions with me to further his agenda.”
The three women were two Russians and another woman who's been described as a doctor, according to a leak of Gates testimony leaked to the Wall Street Journal. Committee Democrats held a press conference in which they said Gates acknowledged having been in the company of women that were abused by Epstein or his colleagues. It's expected that the Oversight Committee will release a transcript of Gates' give-and-take with lawmakers, which reportedly became combative at times.
Documents from the Epstein files revealed that Epstein and Gates met on several occasions after Epstein's 2008 conviction. Gates told the House committee that he met Epstein through "people I trusted in my professional and philanthropic work," and that Epstein promoted his ability to give tax and estate guidance. Gates expressed regret for not vetting Epstein. "I recall being aware that Epstein had faced prior legal issues, but I did not fully understand the extent of the crimes he committed. I accepted the introduction without applying the scrutiny I should have," said Gates in his opening remarks. He said he stopped communicating or meeting with Epstein in December 2014, after concluding that Epstein "would never deliver on his promises" of reeling in donors for the Gates Foundation.
In an undated photo, Gates appears with Jeffrey Epstein's pilot, Lawrence Visoski (House Oversight Committee Democrats via USA Today)Tapping a tiny sliver of his net worth of more than $100 billion, Gates went to truly extraordinary lengths to prepare for his appearance on the Hill -- even assembling a mockup of the room in which he would testify. That replica was put together in Palm Desert, California, near his home, the Journal reported:
The replica included a podium on one side with wood paneled furniture flanked by gold curtains to display where lawmakers would traditionally sit. The other side featured a large wooden table for the person responding to questions, along with microphones and several cameras, to mimic the space in Washington.
Defying President Trump's wishes, the Epstein files were forced into public view by House representatives led by Republican Thomas Massie and Democrat Ro Khanna. Massie used a "discharge petition" to force a vote on legislation requiring the release of the documents. Last month, Massie lost a primary challenge funded by pro-Israel billionaires whose involvement in the contest made it the most expensive primary race in US history.
Thomas Massie says he will publicly read the names of Epstein clients before leaving Congress.
Massie also says there will be no high-level arrests while Todd Blanche and Kash Patel remain in power. pic.twitter.com/bICUDSvgPD
On a recent Meet the Press appearance, Massie said there are many files still hidden from the public, and he accused the acting US attorney general of violating the Epstein Files Transparency Act: "Todd Blanche is violating the law. There's still millions of files they haven't released." Massie promised to name more people whose identities are still redacted in the Epstein files. He also made an intriguing reference to Trump's First Lady:
"I don't think it's possible to get to convictions with Todd Blanche at the top and with the FBI director, Kash Patel, at the top, because they have effectively both perjured themselves by saying there's nobody else in the files. Even Melania doesn't believe that. The First Lady knows that Jeffrey Epstein didn't act alone."
Massie has another seven months to help us understand exactly what that means -- a time during which he's empowered to spill Epstein-file secrets on the House floor with impunity, thanks to the Constitution's Speech and Debate Clause.
Tyler Durden Thu, 06/11/2026 - 08:45