Here’s a preview of what we’ll cover this week: 

Macro: Physical Oil Is Pricier Than Paper Oil; German Inflation Tells Something; The Housing Trap; UAE Wants To Force Hormuz Open; The Guns & Butter Moment

Markets: What’s Up With Markets?; Nvidia Cheaper Than Exxon; The AI Build-Out's Dirty Secret; Google's Quantum Bomb; RealPolitik: OPENAI BUYS TBPN; The Bubble In Venture Capital

Lumida Curations: Is This the 1970s Oil Shock All Over Again?; War Ends When the Endgame Is Defined; Panic, Private Credit, and the Slow Return of Trust

Happy Easter and Passover weekend.

I did a FSD livestream this week, titled OpenAI, Claude, Iran, talking about the latest developments in Iran war, OpenAI’s acquisition of TBPN, and where we are headed in markets. Watch here.

The most interesting thing about the IRGC's strategy right now isn't their missiles. It's their messaging.

Trump today called for the IRGC to open up the Strait of Hormuz.

They don't need to contest the Strait with force. They just need to say it's closed. And the tankers stop moving.

It’s as if the IRGC has Kaiser Soze. He is everywhere and nowhere.

The IRGC has achieved a blockade not through kinetic dominance — but through perception management.

Proving the negative is one of the hardest things you can do in warfare.

Proving that Kaiser Soze is not there, hiding in one of many seasside tunnels is difficult. 

The U.S. command has to demonstrate the Strait is open, when the IRGC only has to assert it's closed. 

That asymmetry is brutal. You have an asymmetry in warfare, and perception to contend with.

How do you break it? 

Someone has to transit the Strait in defiance of the IRGC protocol. 

Escorted by a destroyer. No shots fired. Then do an escort again with no shots fired. Then again. Then do that for two weeks.

This is the required process to create confidence in shipping. Ask yourself how easy it will be to accomplish that?

My view? Not easy at all.

Because once a drone takes out one tanker, and you're back to square one. And, it seems as if Iran is getting more advanced radar from Russia or China.

That's the treadmill the market hasn't priced.

And now Hegseth has fired the head of the Army. Why? 

You only relieve your senior uniformed commander on the eve of an operation if there's a disagreement about the operation. 

Something isn’t going well, and Hegseth who stopped doing Pentagon briefings for 9 days, it’s levelling to the reality.

My view is that Hegseth is way out of his depth and his dismissal of standards in war was not wise. You can read why here.

The IRGC continues to deny negotiations of any sort are taking place. Strangely, as an American, I tend to believe their view over the U.S. Secretary of War.

On Trump’s Wednesday speech — this ‘two to three weeks more’ is what you say when you need a lot more time.

One week is unrealistic. Four weeks would cause a market crash. So you move the goal posts within a standard of pain tolerance ‘two to three weeks’

My read: Trump's Wednesday speech was preparation. Not a declaration of victory — a preparatory message for the American public before a significant escalation. 

Also, although not explicit, I do believe Trump’s speech was preparing the American public for the usage of ground troops. Highlighting the importance of the conflict creates the intellectual foundation for further force.

(Of course we did see a successful rescure this weekend and we pray for the pilot’s safety.)

The objective looks like Kharg Island — 90% of Iranian oil exports touch that single facility. It can be the bargaining chip against the IRGC, a message to Beijing.

It’s still just another gambit though, isn’t it? The IRGC can continue to wait out longer.

The Deep State and resilencry of the IRGC appears are severely under-estimated.

And it’s hard to imagine a public uprising when people are glued to their devices in Iran.

Tom Lee talked to CNBC this week, saying stocks bottom when you're 10% into the timeline of a war. 

He says his team looked at all wars since 1900s, and has reached conclusion of buying as soon as the war’s first time-decile arrives.

Here's the fallacy.

Putin's 'special military operation' was a three-day weekend mission to Kyiv. 

By Tom's logic, you should have been buying Russian-linked assets by afternoon on the second day. 

That was three years ago. Russia has a wartime economy now. They can't un-extract themselves without a double-digit recession. The political, economic, and reputational commitment is total.

Ukraine. Korea. Vietnam. The conflicts on Tom’s table all went longer than anyone expected at week one. 

If your entire framework for timing a market bottom depends on correctly predicting war duration — you don't have a framework. You have a hope.

The more honest question is the one I've been asking for three weeks: what is the price of oil, and where are the tankers?

That is the only variable that matters. 

The other question you can ask: will the conflict take longer or shorter than markets expect?

Longer.

What we saw last week was a short covering rally, not real long only buying.

Garbage quantum stock IONQ was up 6 points. IWM small caps outpacing the S&P.

Quantum computing stocks and garbage small caps don't lead the charge in a genuine risk-on environment.

That said, we did buy Microsoft, Meta, and Berkshire the Friday before and added to our stake in Berkshire this week.

These kinds of names have more economic resilience, inflation pass thru ability, and are not as sensitive to rates and inflation.

When Meta was trading at 17.5x earnings, we think you’re supposed to buy that. I doubt we’ll get cheaper valuations on that name then that and if we re-test we’ll add.

So, there are pockets of value - especially in some quality names - which is a beautiful thing to see.

Your theoretically correct move as an investor is to own quality stocks and upgrade your portfolio when quality is on sale.

We don’t have a clear view on Financials yet. Do they have signficiant exposure to private credit via back leverage? Are they economically exposed due to the prospect of higher rates and a weakening economic backdrop? Will capital markets open and stay open?

Their valuations have come down a bit.

Since the war began, we haven’t had one uneventful day. Markets are unwinding multiple issues simultaneously.

If you are an individual investor, it's fairly difficult to keep track of everything happening in the world.

But, if you don’t, the opportunity cost is massive. 

How do we make it easier?

The Lumida Invest App. It’s on the Testflight app in the Apple store and on playstore.

Here’s the snapshot from our news page.

See how it tells you everything going on in the world from geopolitics to mortgage, private credit, and Fed. 

How long will it take to skim this? Less than a minute. 

If you’d like details on any news, simply ask our integrated-AI to explain it for you. 

We also have other cool features to help you with your investment decisions.

From how I see it, this app has the potential to disrupt every other app that investors use. 

You can download the app here.

Be A Part of Lumida

Also, if you enjoy the app as a user, how would you feel about being the owner? 

Lumida is preparing for an equity crowdfunding raise in the coming weeks. 

Everything we have built has come from the strength of this community, and we want you to own a piece of what comes next.

View the following video to see the underwrite. (You’ll see how Lumida Invest disrupts Robinhood)

We will be sharing the audited financials, valuation, and other important documents with the waitlisted users. 

I expect we’ll formally kick off the crowdfunding imminently on social media soon. We’re already at 180 on the list, and my goal is to get to a couple thousand Lumida investors.

We want brand ambassadors that help us build community and extend reach in person-to-person conversations.

No one has done this before to our knowledge, and we think it makes a lot of sense.

Investing is social.

If you want to join the waitlist for the crowdfunding and learn more about the strategy, check out www.lumidatribe.com.

We’re here to disrupt wealth management as we know it.

Jeff Currie of Carlyle went on live television this week and his analysis tells us why Oil numbers at $110 underestimate the possible inflation impact to follow.

Currie describes the futures market prices crude at around $100 a barrel. Physical oil delivered to Asian refiners is costing between $130 and $170. 

At one point this month, Oman crude — the benchmark for oil on the free side of the Strait — spiked to $173 a barrel.

The paper market and the physical world have split completely.

Currie called what's happening next is molecular contagion. 

Jet fuel spiked to $230 a barrel in Singapore. Then the same spike hit Rotterdam at $220. Then Thailand. Then the Philippines. Then New Zealand. Then Australia. A physical shortage virus is spreading across global supply hubs one by one.

Before the war, roughly 20 million barrels per day moved through the Strait of Hormuz — a single 100-mile waterway. The IEA now says flows have dropped to what they describe as a trickle. 

Barclays estimates the effective supply loss at 13 to 14 million barrels per day in a prolonged closure scenario.

Currie's most important line: there are no spare barrels left in the system.

The price spread between Singapore and Rotterdam — which normally tells traders where surplus oil is sitting — has gone to zero. When that spread disappears, there is no buffer left anywhere on earth. The system has no release valve.

He compared the magnitude of this supply shock to the COVID demand crash. 

COVID wiped out approximately 20 million barrels per day of demand and fractured global supply chains for two full years. 

This war has now wiped out a comparable volume on the supply side. The difference is that supply chains cannot work from home.

The data behind his warning is already visible. 

Chevron's CEO and Shell's CEO both confirmed the same thing at CERAWeek in Houston: physical disruptions are spreading from South Asia into Southeast Asia, into Northeast Asia, and are beginning to reach Europe.

The reason WTI and Brent paper prices stayed suppressed for so long is that Russian Urals crude rallied 65 to 70 dollars a barrel after sanctions were lifted. 

That narrowed the gap between cheap Russian oil and expensive Western benchmarks.

Now look at the Goldman Sachs chart above. 

Their 2026 global growth forecast has declined further below consensus — and that revision came after last week's commodity price forecast upgrades. 

Goldman has already revised from 3% global growth to 2.4% now, and they're still revising down.

The sequence is straightforward and it isn't priced.

Physical oil is at $130 to $170. That higher price oil feeds into every input cost stack in the global economy. 

Meanwhile, forward earnings estimates for the S&P 500 have barely moved. Analysts are still modeling a relatively benign 2026.

They modeled the same benign world in early 2022 when oil spiked. Then estimates came down. Then GDP turned negative. Then stocks entered a bear market.

Germany's inflation came in hot this week. 

The Wall Street Journal ran the headline: "German Inflation Rebounds on Soaring Energy Prices." 

The subhead is the part worth reading: "The Iran war hasn't noticeably hit prices outside energy so far, but that is likely to change."

That last clause is doing a lot of work.

Energy is always the first domino. It's the input into every other input. Freight, manufacturing, food production, heating — they all run on energy. 

Germany is telling you what's coming. 

BlackRock's Ric Reider says the Fed may cut rates. 

That only adds to inflationary pressures.

Forget oil for a moment — take a look at wheat, corn, soybeans. 

If you want to see why inflation cycles happen, you're seeing it in real time. Our centralized authorities are political first and have no discipline.

Look at the jobless claims chart. 

US Initial Jobless Claims are sitting at 211,000 — historically low, tracing along the same baseline as the "Guns & Butter" period of the 1960s. 

That was the era when LBJ tried to finance the Vietnam War and the Great Society simultaneously without raising taxes. 

The Fed accommodated, but then Inflation followed, which lasted a decade.

The parallel isn't perfect. 

But the structure rhymes: a government running hot fiscal policy, a central bank reluctant to tighten, an external supply shock from an oil-sensitive conflict, and a labor market that looks fine on the surface. 

Jobless claims are a leading indicator.

Right now they're telling you the economy is still adding jobs — which means the Fed has no political cover to cut, and if the Trump appointee comes in and cuts anyway, they're pouring fuel on a fire.

We flagged the economy running hot on Jan 11th. The insights are playing out today. Read here. No one was talking about inflation then.

The baton handed off from Goldilocks to Inflation. Now maybe we get a Stagflation narrative as higher oil prices create a greater risk of consumer demand destruction and enterprise margin compression.

Feels like a mini-repeat of the 70s where you also had populist policies and ‘can do no wrong’ Nifty Fifty type stocks. (Those are called SaaS today.)

However, we have to remind ourselves that the world is more energy efficient now than than so it’s more of a mini-echo.

Mortgage rates hit 6.46% this week — the highest since last fall.

For a $400,000 home with 20% down, that puts the monthly payment back above $2,000. 

Before COVID, that same payment was around $1,500. 

The last five weeks alone have seen that monthly payment rise 5.2% — directly coinciding with the outbreak of the Iran conflict and the oil-driven inflation spike that followed.

The war is now showing up in American mortgage payments.

But the mortgage rate story is downstream of a deeper problem that didn't start with Iran.

Home prices are up 57% since February 2020. 

They are up 204% since 2000. 

The median American home has more than tripled in price over 25 years — well above the long-run average appreciation rate of roughly 4.5% per year. 

Thank you, QE infinity.

Overall, we are seeing increasing pressure on the consumer. We saw it in Walmart and Costco’s earnings.

Luxury stocks’ earnings also have the same read-through. 

This week, NIKE and RH reported earnings – NIKE was down 11%, while RH was down 22%.

NIKE’s revenues were down 3%, and margins down 300bps. They are spending aggressively on marketing, but the sales results aren’t showing up. 

Customers are cutting their discretionary spend. 

Matt Friend, CFO NIKE, suggests they might see further pressure emerge, as war impact transmits to the consumer. 

"We're not seeing a consumer reaction to what's going on in the Middle East at this point in time, in North America.”  "We expect revenues to be down low single digits versus the prior year."

Luxury stocks are in a bear-market, and more pressure on consumers is the last thing they’d want. 

UAE joins the fight. 

We now have a regional conflict and open contest for the SoH. 

I was in the UAE in early Feb.

They are capitalists. They like security, too. 

They also have F-16s and a stockpile of munitions. 

It’s starting to look like the US alliance is shifting from Europe to the Middle East players. 

and, this looks like a plan that may have been baking for quite a while. 

Did Saudi, Qatar, and UAE get a heads up? 

Were they prepared?

The consensus story is that the missile strikes caused them to increase their aggression towards Iran. 

I don’t think that’s it. 

These countries are prosperous, have ambitious visions, are linked to US technology and defense, they have armed forces, and want to control the SoH - a lifeline to their economy.

Let me put this in perspective for you. 

1) You have an inflation shock

2) Energy costs going from $2 Tn to [ $5 Tn to $8 tn ]

Consumer spending will take a hit, and it was weak before the Iran conflict

3) That hurts marginal businesses especially small caps

4) Bloomberg reports that datacenter projects are getting cancelled due to tariff and component constraints

5) The market does not believe Oracle’s RPOs are credit worthy

6) Valuations remain at high levels. 

This is a major point… show me a category that is a bargain. 

7) Interest rate costs are going up

8) Analysts have not yet reduced forward earnings estimates… your forward PE is not credible. 

9) IRGC has had 2 decapitations and they aren’t bending. 

Risk Off. 

Sorry guys that’s just the facts…

For a brief moment this week, Exxon's forward P/E crossed above Nvidia's. 

Compare the return profiles of Exxon to Nvidia.

Exxon’s revenue is growing at 6% with EPS growth in mid single digits. Their margins compress and expand with the price of a barrel of crude — a variable nobody controls. 

Nvidia has earnings growing north of 60% (10x Exxon). GPU availability across cloud providers is at multi-year lows, and they are projecting $1T in revenues by 2027. Nvidia offers a product that every major hyperscaler on earth is rationing and hoarding. 

But despite all this, Exxon got more expensive than Nvidia.

What happened to Nvidia is straightforward. 

The de-grossing hit it indiscriminately. Then the AI balance sheet concerns bled into everything AI-adjacent. 

The market stopped distinguishing between AI model counterparty risk and Nvidia's order book. Those are not the same thing. One is a capital markets problem. The other is a chip shortage.

The Microsoft, Google, and Meta compute budgets are not OpenAI. They have the cash flows to back their commitments. And they are still buying every chip they can get.

We are back to a benchmark weight in Nvidia. 

We sized carefully — this is not a market to be aggressive in. 

But when a company with 60% earnings growth trades at a discount to an oil major with 6% revenue growth, it’s worth adding exposure.

That said, Nvidia is subject to quite a bit of narrative pressure.

Great businesses can trade down if AI capex spending comes down.

This isn’t a lay up. But, we believe that since it’s gone nowhere for months and the positioning is getting cleaner it’s worth getting back into.

A cleaner setup would be a complete flush. Be on the lookout for that possibility.

Bloomberg published a piece this week that most people in the AI trade won't want to read. 

The headline: America's AI Build-Out Hinges on Chinese Electrical Parts. 

Tech giants — Alphabet, Amazon, Meta, Microsoft — have committed to spending more than $650 billion on data centers this year alone.

The capital and ambition is there. 

What isn't there are the transformers, switchgear, and lithium-ion batteries needed to actually power these facilities.

Almost half of US data centers planned for 2026 are expected to be delayed or canceled. Not because of a chip shortage. Because of an electrical equipment shortage.

Benjamin Boucher, senior analyst at Wood Mackenzie: "There's not enough domestic capacity to go around, so people are pretty much forced to go to the export market."

That export market is China.

Before 2020, high-power transformers typically arrived 24 to 30 months after an order was placed.

Those timelines were manageable in the old world when data centers were smaller. 

AI companies now want something typically in less than 18 months. The spike in demand has pushed delivery times to as much as five years. 

Some developers are now refurbishing old transformers from shuttered power plants as a stopgap.

US utilities imported more than 8,000 high-power transformers from China in 2025 through October — up from fewer than 1,500 in all of 2022. 

The Chinese share of battery import volumes remains stubbornly above 40%, making China critical for the data center supply chain.

Now layer in the geopolitical dimension.

Trump wants the US to win the AI race. His America First doctrine calls for cutting imports. 

However, the AI buildout structurally requires Chinese electrical imports to proceed on schedule. 

Those two things cannot both be true simultaneously. 

As University of Texas professor Joshua Busby noted: "If we're too indiscriminate in our effort to diminish our reliance on China to zero, that could come at excessive cost to American companies."

This is THE contradiction sitting inside every industrial and datacenter stock that has been bid up on the AI capex theme.

The narrative was that the US would build its way to AI dominance. 

The reality is that the physical infrastructure layer — the transformers, the switchgear, the batteries — runs through Chinese supply chains that tariffs are actively threatening to disrupt.

We've been short industrials. This is one of the reasons. 

GE Vernova, Caterpillar, Corning are priced for a frictionless buildout. 

The buildout is not frictionless. It is dependent on Chinese imports in a trade war, running on transformer lead times measured in years, and increasingly constrained by capital markets pulling back from the OpenAI obligations that were supposed to anchor demand.

The market hasn't put those two things together yet.

Google Quantum AI published a paper this week that shows Google’s quantum capacity.

Their researchers demonstrated a roughly 20x more efficient implementation of Shor's algorithm — the quantum method capable of breaking the elliptic curve cryptography that secures Bitcoin, Ethereum, and most of the digital infrastructure on earth. 

The previous consensus was that breaking this encryption would require around 10 million physical qubits. 

Google's new estimate: fewer than 500,000. And on a fast-clock architecture, the attack runs in minutes.

What makes this paper unusual isn't just the result. It's how Google chose to disclose it. 

They did not publish the actual circuits. Instead they released a zero-knowledge proof — a cryptographic technique that lets independent researchers verify the result is mathematically sound without Google revealing how it works. 

To understand why this matters beyond crypto, consider what elliptic curve cryptography actually protects. 

It's not just Bitcoin wallets. It's banking authentication, email signatures, government systems, and most of the digital signature infrastructure that the internet runs on. 

They estimate that a primed quantum computer could derive a Bitcoin private key in roughly nine minutes — while Bitcoin's average block time is ten minutes. 

This adds to pressure on digital assets, which haven’t really picked up since Nov. 

Moreover, Google’s success in quantum computing also highlights how it has multiple reliable growth levers to grow consistently. 

Google’s Product Suite, Waymo, Youtube, Gemini, and now Quantum computers are all leading their respective industries, and they are continuously evolving to get ahead of their competitors. 

However, from a stock perspective, Google’s still pricier compared to Meta, Nvidia and Microsoft. 

The latter three are also market leaders in their niches, with a dominant moat, and growing business lines.

And, they are also around 15% cheaper to Google at P/E NTM valuations. 

We own the last three. 

What happens when an AI company controls the conversation about AI?

It’s Narrative Infrastructure Control

The most valuable asset in the world is your attention. 

1) Sam is buying attention in a specific market: 

techno optimists, mostly males, that tend to be Founders & VCs in coastal cities. 

2) TBPN provided advertising for stocks that are about to go public or are pre-IPO. 

This is pre-marketing. 

3) Sam wants to influence the discourse and shape the narrative around AI. 

Can TBPN have guests that highlight OpenAI competitors going forward?

I doubt it. 

4) Dario is probably texting Dwarkesh: ‘Dinner?’

5) Sam wants to sit at the cool kids table. 

See Jony Ive deal for example. 

6) Does this acquisition change the enterprise value of OpenAI?

No. 

It does put OpenAI back in the Zeitgeist, wresting attention from Claude winning on the battlefield. 

7) Is it a good use of currency?

If you have expensive private market equity you should spend it aggressively.

Now you too can become Tiger Global. 

SpaceX :

- 80x forward sales

- 500x forward earnings

- 125x forward EV/EBITDA multiple

Take a look at the timing of the post below 12/31/21. 

We are seeing similar nonsense in private and public markets.

A sharp move higher in oil would hurt growth and consumers, but without strong demand, broad pricing power, and a much bigger fiscal impulse, this still does not look like a true 1970s-style inflation replay.

View Curation 

Military action can create leverage, but the real test of success is whether it delivers enforceable nuclear limits and restores normal shipping through Hormuz.

View Curation

Buffett’s point about panic and slow recovery helps explain the real risk in private credit and shadow banking: trust breaks fast, but it does not come back all at once.

View Curation

April Fools’ Joke

Not Subscribed Yet? Don’t miss out on future insights—subscribe to the newsletter now!

For real-time updates, follow us on: 

X | Telegram | Youtube | TikTok | News | Ram’s X | Lumida Health | Lumida Tax

As Featured In

Disclaimer: Lumida Wealth Management LLC (‘Lumida”) is located in New York, NY, and is an SEC registered investment adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Lumida only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. Any direct communication by Lumida with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.

The information in this material has been obtained from sources believed to be reliable. While all reasonable care has been taken to ensure that the facts stated in this material are accurate and that the forecasts, opinions and expectations contained herein are fair and reasonable, Lumida, Inc. and Lumida Wealth Management LLC (collectively Lumida) make no representations or warranties whatsoever the completeness or accuracy of the material provided, except with respect to any disclosures relative to Lumida. Accordingly, no reliance should be placed on the accuracy, fairness or completeness of the information contained in this material. Any data discrepancies in this material could be the result of different calculations and/or adjustments. Lumida accepts no liability whatsoever for any loss arising from any use of this material or its contents, and neither Lumida nor any of its respective directors, officers or employees, shall be in any way responsible for the contents hereof, apart from the liabilities and responsibilities that may be imposed on them by the relevant regulatory authority in the jurisdiction in question, or the regulatory regime thereunder. Opinions,forecasts or projections contained in this material represent Lumida’s current opinions or judgment as of the day of the material only and are therefore subject to change without notice. Periodic updates may be provided on companies/industries based on company-specific developments or announcements, market conditions or any other publicly available information. There can be no assurance that future results or events will be consistent with any such opinions, forecasts or projections, which represent only one possible outcome. Furthermore, such opinions, forecasts or projections are subject to certain risks, uncertainties and assumptions that have not been verified, and future actual results or events could differ materially. The value of, or income from, any investments referred to in this material may fluctuate and/or be affected by changes in exchange rates. All pricing is indicative as of the close of market for the securities discussed, unless otherwise stated. Past performance is not indicative of future results. Accordingly, investors may receive back less than originally invested. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipients of this material must make their own independent decisions regarding any securities or financial instruments mentioned herein and should seek advice from such independent financial, legal, tax or other adviser as they deem necessary. Lumida may trade as a principal on the basis of its views and research, and it may also engage in transactions for its own account or for its clients’ accounts in a manner inconsistent with the views taken in this material, and Lumida is under no obligation to ensure that such other communication is brought to the attention of any recipient of this material. Others within Lumida may take views that are inconsistent with those taken in this material. Employees of Lumida not involved in the preparation of this material may have investments in the financial instruments or securities (or derivatives of such financial instruments or securities) mentioned in this material and may trade them in ways different from those discussed in this material. This material is not an advertisement for or marketing of any issuer, its products or services, or its securities in any jurisdiction.