Global Outlook: War
Weekly PROPHET NOTES 6/16/25
What a wild week. From Polish confidence vote, through LA riots to Iran-Israel war. I don’t think there was a single slow day and chances are we won’t see one for the time being.
Recently I wrote that there is no slow season during this summer. But I didn’t imagine we will have an all out war that soon. At least now I know why my intuition pushed me to sell my nuclear deal Yes position a few weeks ago.
The sudden strikes surely derailed my article on the deal. Now it’s more proper that I write an article on the war so be on the lookout for it this week.
In the meantime subscribe below and stay up to date in this wild world.
Weekly Outlook
I have an unprecedented amount of material to cover this week so without further ado.
US Inc.
The LA protests / riots against mass deportations continued despite presence of National Guard, marines and the imposed curfew. Despite hundreds of arrests, Gavin Newsom sued the Trump administration for sending the National Guard without his consent.
The LA situation sparked protests across the whole country that happened on Saturday, coinciding with the military parade marking Army’s 250th anniversary. It was also Trump’s birthday.
The “No Kings” protests, as they were dubbed, attracted a 5 million crowd across 2,000 locations. The country is definitely divided and it was symbolic on Saturday, when people split between protest and admiration. Expect tensions to continue for the time being.
Especially since political assassinations are on the rise. Two Minnesota state lawmakers were shot on Saturday.Melissa Hortman, the Democratic speaker of the state House of Representatives, was killed, along with her husband. And John Hoffman, a Democratic state senator, was wounded in a separate attack.
After a fairly long manhunt, the police arrested Vance Boelter, a 57-year old suspect in the case. The killer was disguised as policeman during the attack. He is also suspected of wounding John Hoffman. Truly terrifying.
Staying in the domestic, it didn’t take long for Elon Musk to backtrack on his X posts about Trump. He wrote a post that he regretted some of his attacks. As I said on X, in this battle Elon has more to lose and no leverage.
In the foreign policy, the US imposed sanctions on Los Chapitos which is a faction of the Sinaloa Cartel. The treasury accused the group of fentanyl trafficking. This comes as part of the move against fentanyl, although the whole initiative is a lot slower than initially anticipated. The initially suspected military move against cartels now seems like a very remote possibility.
The Americas
Moving south, in Argentina the Supreme Court upheld a corruption conviction against its former president Cristina Fernández de Kirchner. She was sentenced to six years in jail and barred for life from politics. There were some protests around the situation, but nothing substantial.
Asia
A tragic week in Asia as we saw the first crash of Boeing 787 Dreamliner. The Air India flight to London crashed shortly after takeoff in Ahmedabad. All but one passenger on board died in addition to many more on the ground as the plane hit a building. Causes are still investigated, but whatever they are, it’s another blow to Boeing.
In the meantime, the Indian arch enemy, Pakistan, announced plans to increase its defense spending by 20% to $9 billion. The move is propped by the recent clash between the two countries as well as rising global tensions.
Lastly from the region, South Korea said they would turn off loudspeakers that project propaganda across the border into North Korea. The move comes as the new president seeks more engagement with the neighbors.
Middle East & Africa
The news of the week. In a surprising move, Israel has struck Iran, days before another round of nuclear talks with US. Despite some saying that it went against US wishes, the move came 61 days after Trump’s 60 day ultimatum to Iran on negotiations.
In the still ongoing clash, Israel has managed to struck multiple targets across Iran, including mostly nuclear, military and energy infrastructure, including several nuclear enrichment sites as well as refinery at South Pars gas field, one of the world’s largest. They managed to secure full air superiority and Israeli planes were seen flying unobstructed over Tehran. Additionally during the course of actions multiple top military and nuclear figures were assassinated in precision strikes, including general Salami. Other casualties are in the hundreds.
The operation was dubbed Operation Rising Lion and Netanyahu said it will take weeks to complete.
While Iran was totally surprised on the first day, pretty soon after it started its own strikes. Contrary to last year’s exchanges, this time each attack yielded several missiles that struck its target, including a refinery in Haifa. While Israel tries to actively block videos of damages, it is safe to say that Iranian attacks, while partly successful, are still significantly short of damages done to it. Looking at the few videos that surfaced, casualties there might be in the hundreds as well.
That being said, the situation is now at an impasse of sorts. Israel is mostly interested in neutralizing the nuclear threat. However, the main enrichment facility, Fordow, is located somewhere 90 meters deep. This makes it indestructible to anything but American bunker busters or a nuclear weapon.
And there is a problem with nuclear - Israel could nuke it, but Pakistan threatened to nuke it back then, essentially giving Iran a nuclear umbrella of sorts. At the same time China is aiding Iran by sending some kinds of equipment and Iran still has several options to escalate.
From exiting the non-proliferation treaty, through striking Arabian oil fields and trying to assassinate key Israeli military and political figures to closing the Strait of Hormuz. Especially since Iran officially withdrew from the nuclear talks with the US.
Of course each comes with its own set of dangers and at the time of the writing, it is unclear if Iran is ready to go either way. The harsh truth is that in the fog of war, no one knows nothing. Markets are mostly reactive and headlines are mostly propaganda. Where we can seek signal is either insiders (good luck finding them) or a massive aggregate that could show us the overall sentiment, averaging out part of the noise:
Results here are interesting as you could interpret the average in two ways:
Markets know nothing as it averages out to 50%.
Current situation is sort of stable - while some things are expected to escalate / continue to happen, there is no expectations of major escalation at the moment. With this understanding, further movement in the index will indicate the direction of the conflict.
For now, other countries stopped at condemning either Israeli or Iranian attacks, depending on the geopolitical motives. Despite an isolated rumor that Iran might be seeking ceasefire and resign from enrichment completely, the war is expected to continue.
While my article on the deal is now no more, there is a more spicy one coming on the whole conflict, where I will share a lot more insight into the situation and possible developments. Stay tuned!
Europe
With the Middle East booming (pun not intended), the Ukraine war has lost the limelight. However, there were still some developments there. Mainly that Russia continues its heavy strikes, constantly besting their records.
There are also reports that the peace talks may start again after Putin called Trump on his birthday. While the bros mostly talked about Iran-Israel situation and, as usual, agreed that the killing must stop, we can now be pretty certain that these are mostly empty words. Markets agree as average is flat:
On the war adjacent topic, the EU proposed to lower its $60 price cap on Russian oil and to ban transactions with Nord Stream pipelines in the new sanctions package. Not that it will matter, but optics are optics.
Lastly, Italy had a referendum on easing citizenship rules for non-EU citizens. Only 30% of people voted vs 50% for the referendum to be binding. Meloni must be happy as she opposed the measure.
Business, Finance & Economics
In business, we have seen WWDC from Apple. An unimpressive event as many had hoped to see more news around AI. In the meantime Apple’s healdiner was the new operating system and design changes like Liquid Glass which gathered a lot of supporters and opponents on social media. Wall Street was clear though in its assessment as shares in Apple fell after the event.
Moving to economy, the British one went a bit back shrinking 0.3% in April, which was the biggest monthly drop since October 2023. In the meantime, the chancellor revealed government’s spending plans for the next four years. Day-to-day budgets will increase by 2.3% in real terms across the period, but some big departments, like the Home Office, face real-term spending cuts.
Tariffs
In tariffs there was only news on the China deal. For now a deal was reached to remove China’s export controls on rare earths. Let’s see how this one will play out.
On another note here, Trump will send letters to partners within the next two weeks setting new unilateral tariff rates. Expect news by July 9th.
Wrap up
And that’s all for today. I am now busy trying to forecast the Iran-Israel conflict so expect some spicy tweets and article later on. Remember that odds on Polymarket are now guesswork combined with reactive mode on headlines.
Stay strong and see you soon!
This is not official investment or life advice. Do your own research. This are only my opinions and I encourage anyone to do their own research before putting any money anywhere.