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Via Middle East Eye

Earlier this month, Elbridge Colby, a senior official in the US Department of War, held a call with Saudi Arabian Defense Minister Khalid bin Salman, who is also the brother and top adviser to Crown Prince Mohammed bin Salman. Iran’s attacks on US bases in the Gulf were heating up, and the US needed expanded access and overflight permissions. Saudi Arabia agreed to open King Fahd Air Base in Taif, in Western Saudi Arabia, to the Americans, multiple US and western officials familiar with the matter told Middle East Eye.

The base is important because it is farther from Iranian Shahed drones than Prince Sultan Air Base, which has come under repeated Iranian attacks. Taif is also close to Jeddah, the Red Sea port that has become a critical logistics hub since Iran effectively took control of the Strait of Hormuz. Current and former US officials tell MEE that if the Trump administration is preparing for a longer war on Iran, Jeddah may be critical for sustaining US armed forces. Thousands of US ground troops are en route to the region from East Asia. 

Saudi Arabia’s decision to expand base access, current and former officials say, underscores a shift in how the kingdom and some other Gulf states are responding to the US-Israeli war on Iran. "The attitude in Riyadh has shifted towards supporting the US war as a way to punish Iran for strikes," a western official in the Gulf told MEE.

Trump and the Saudi crown prince have been holding regular phone calls for the last three weeks, the US and western officials told MEE. The UAE has also told the US that it is geared up for a long war, putting no pressure on Washington to wrap up the conflict soon.

In a phone call earlier this month, UAE Foreign Minister Sheikh Abdullah bin Zayed told his counterpart, US Secretary of State Marco Rubio, that the UAE is prepared for the war to last up to nine months, the US official told MEE. 

Differing Gulf perspectives 

Saudi Arabia, the UAE and Qatar lobbied US President Donald Trump against attacking Iran. While they host US military bases, the states insisted that they not be used as launchpads when the US joined Israel on 28 February to attack Iran. Despite this, the Gulf states have paid the heaviest price for the US’s decision to go to war. 

The UAE alone has intercepted 338 ballistic missiles and 1,740 drones since the start of the war. Qatar suffered the worst attack of any Gulf state despite being a critical mediator that has consistently focused on de-escalation. 

Iran responded to an Israeli attack on its South Pars gas field this week by launching missiles at Qatar’s Ras Laffan refinery. The damage will take three to five years to repair and affects 17 percent of Qatar’s gas production, according to Qatari energy minister Saad al-Kaabi.

Some states, like Oman, have said that Israel hoodwinked the US into launching an unlawful attack on Iran. There is also anger at the US over its value as a security guarantor. 

The US has been unable to replenish the Gulf states' Patriot and Terminal High Altitude Area Defence interceptors. The US bases in the Gulf, meant to protect the Arab monarchies, have been targeted. Meanwhile, oil and gas exports have ground to a halt.

Omani Foreign Minister Badr al-Busaidi wrote in The Economist this week that this is "not America's war" and that Washington’s allies needed to make clear to the US that it was dragged into a conflict with little to gain.

Busaidi’s remarks contrasted with those of Saudi Arabian Foreign Minister Prince Faisal bin Farhan. After Riyadh and the port of Yanbu were attacked by Iran, he delivered a blistering message to the Islamic Republic. One former US intelligence official described it as “fighting words”. Farhan said Iran had committed “heinous attacks” which “are an extension of [Iran’s] behavior that is based on extortion and sponsoring militias, threatening the security and stability of neighbouring countries”.

"Saudi Arabia has repeatedly tried to extend its hand to the Iranian brothers…but the Iranians did not reciprocate,” he said, adding that the kingdom reserved the right to take “military action”.

While no one in the Gulf wanted a war with Iran, the Gulf states are approaching the conflict from varied, evolving perspectives as it drags into its fourth week, experts say. Saudi Arabia is the largest country in the region, and like the UAE, it has ambitions to project hard power abroad. In fact, Saudi Arabia attacked the UAE’s allies in Yemen just before the war on Iran erupted.

Oman has carved out a niche for itself as a mediator. As one of the countries least hit by Iran in the region, the relative security of its capital, Muscat, is also being noticed by expatriates leaving Dubai. “There is a divide emerging in the Gulf,” Bernard Haykel, a professor of Near Eastern studies at Princeton University, who speaks with the Saudi Arabian crown prince, told MEE.

“Saudi Arabia and the UAE were neutral before this war. But as they have been attacked, they have come to the realization that they cannot live with this hardline Iranian regime next door, which can, at a moment’s notice, extort the region by closing the Strait of Hormuz,” he added.

The Saudi capital, Riyadh, and the kingdom’s energy infrastructure have been targeted by Iran. But the conflict is widely seen in the region, and increasingly inside the US, as an Israeli power grab. Crown Prince Mohammed bin Salman has said that Israel is guilty of committing genocide in Gaza. The Israeli war on the enclave has killed over 72,000 Palestinians since it started in October 2023. 

Prime Minister Benjamin Netanyahu gloated about the war in a press conference on Thursday. He said that the solution to the Strait of Hormuz’s closure was for Arab Gulf monarchs to build new pipelines through the desert to Israel, which would effectively give Israel veto power over their energy exports.

“What’s happened in the last 24 hours is taking us to a different phase in the war. It has been testing our patience and restraint for the last three weeks," Bader al-Saif, an expert at Kuwait University, told MEE. “With that said, we can’t lose sight of Israel’s role. They want to bring the Gulf into this war,” he added. “And let’s be clear, there is no clear exit strategy from the US.”

Ibrahim Jalal, an expert on the Gulf and Arabian Sea security, told MEE that Gulf monarchs face a torturous balance as they try to draw their red lines against Iranian attacks and respond to US demands while pushing for de-escalation. “The Gulf states do not want to be counted in the history books of siding in a US-Israeli war against a so-called Islamic neighbor,” he said.

Taboos broken

At the same time, Jalal said that Iran’s attacks are a flagrant violation of Gulf sovereignty and put the region into uncharted territory. “The Islamic Revolutionary Guard Corps has broken all taboos now,” he said. “The Gulf needs to act within defensive doctrine,” he said.

Iran has accused some Gulf states of allowing their territories to serve as launchpads for US strikes. That is why even providing additional logistical support to the US is sensitive for Saudi Arabia. However, the kingdom is being pressed by the US to join the war on Iran by launching offensive strikes, US and Arab officials tell MEE.

The New York Times has verified video that shows ballistic missiles being launched from Bahrain in the direction of Iran. It’s not clear who was firing the missiles. The small Gulf state is a close partner of Saudi Arabia’s.

Hesham Alghannam, a Saudi defence analyst, told MEE that Riyadh is working to “thread the needle” between getting sucked into the conflict and establishing deterrence. “Saudi Arabia asserts deterrence by warning Tehran of retaliation as we have seen…[by] reserving military options, while prioritising diplomacy [and] ongoing backchannel contacts with Iran,” he told MEE.

He added that Riyadh is “pushing de-escalation to restore pre-war rapprochement gains without full war entanglement”. Saudi Arabia reestablished diplomatic ties with Iran in March 2023, after years of adversarial relations, in a deal brokered by China.

Saudi Arabia has endured Iranian attacks, but has not suffered on the same scale as the UAE. The Houthis, Iran’s allies in Yemen, have also refrained from attacking the kingdom.

Abdulaziz Alghashian, a Saudi security expert and senior nonresident fellow at the Gulf International Forum, told MEE that the kingdom and other Gulf states faced “a dilemma”. “Ending the war is generally the preferred option,” he said, but even if the conflict stopped tomorrow, Iran’s escalation dominance over the Gulf would linger. “Not only do we really need to create deterrence, we need to create a precedent for post-war,” he said.

The Saudis appear to be allowing US and Israeli fighters and bombers to refuel in their airspace before striking Iran, despite Saudi Arabia repeatedly claiming their airspace is “closed.”pic.twitter.com/jU3Ml0ZgNo

— Stew Peters (@realstewpeters) March 16, 2026

“Iran has proved that it can create a lot of havoc. Gulf Cooperation Council [GCC] states don’t want to be seen to be too restrained, so there needs to be some kind of precedent,” he said. Alghasian said Saudi Arabia is aware that launching offensive operations against Iran could "open up a can of worms".

Despite US claims that Iran's military is severely degraded, the Islamic Republic has been able to conduct pinpoint strikes on US bases. It is far from isolated. Media reports say it is receiving targeting intelligence from Russia. MEE revealed that it has received air defence systems and offensive weapons from China.

Iran's speedy retaliation on Gulf energy assets after Israel's strike on South Pars this week showed its command and control is intact, the former US intelligence official told MEE. 

Gulf monarchs are also aware that their militaries are unable to inflict any more damage on Iran than the US and Israel are currently, and that a "symbolic" action in the name of deterrence would just invite more reprisals, Jalal said. "Action by Gulf states is not going to tip the military balance in favor of the US and its allies at this stage,” he added.

But better access to Saudi Arabian bases is key, Haykel, at Princeton University, told MEE. "It's true that Saudi Arabia's air force and missiles are unlikely to change the equation, but what can change the equation is if the US Air Force flies out of Dhahran instead of an aircraft carrier," he added. The coastal city is just 130 miles from Iran's coast. 

Watching the Strait of Hormuz

For starters, analysts say, the Gulf states can better arrange their defenses together. This is important, as the Gulf questions the value of US security guarantees. The Trump administration has issued a waiver for Gulf states to transfer Patriot interceptors among themselves without the normal US approval.

“What the GCC now needs is to act as one bloc on the defensive line, to mobilize procurement collectively,” Jalal said.

Beyond allowing the US greater access to bases, Saudi Arabia and the UAE could look to play a role in the Strait of Hormuz, experts say. "How do you define offensive and defensive? I think that has been the debate in the last twenty-four hours," al-Saif, at Kuwait University, said. "The Gulf could play the Iranian game and restrict them from moving oil out of Hormuz. But that is not part of our worldview," he said. "We are reliable."

The Trump administration has been rebuffed by Nato and Asian allies to participate in an operation to open the waterway, through which roughly 20 percent of global energy passes. Their involvement would allow Trump to demonstrate regional buy-in as US warplanes and attack helicopters bombard Iran’s coast.

Anwar Gargash, a diplomatic adviser to the Emirati president, told the US Council on Foreign Relations this week that the UAE could join a US operation to wrest control of the waterway back from Iran.

Alghashian, the Saudi analyst, told MEE that taking “lethal defensive measures” could be next. “For me, the precedent could be made in the Strait of Hormuz.”

Senate Minority Leader Chuck Schumer has had a fractured relationship with the Democratic Party base ever since he voted to fund the government last March. Unfortunately for him, time hasn’t healed that wound, and there’s a growing resistance to Schumer that hopes to oust him from his leadership position after the midterms.

The Wall Street Journal, drawing on more than four dozen interviews with Democratic senators, candidates, current and former congressional aides, activists, and advisers, found widespread unease about the New York senator's grip on the party's direction. The report makes it clear that Schumer’s own colleagues increasingly see him as an anchor, slowing their response to President Trump, steering primaries toward centrists they don't want, and draining the fundraising pipeline that Democrats desperately need heading into the midterm elections.

According to the report, last month, Sen. Chris Murphy of Connecticut met with progressive activists at a French restaurant in Georgetown. The conversation turned to what to do about Schumer. According to people familiar with the dinner, Murphy disclosed that some lawmakers had already been running informal vote counts to see whether enough support existed to remove Schumer from his leadership post. Murphy added that Schumer had enough backing to survive. But the fact that anyone was counting at all said something.

Murphy has since walked it back, carefully. "Could someone infer from that that someone was keeping a count? Maybe, but that's not what I meant," he told reporters. "I meant that he has the support of the caucus." 

But Murphy’s backpedaling doesn’t change the reality. Murphy is reportedly part of a group of senators who have been actively canvassing colleagues about their frustrations with Schumer. This group, nicknamed “Fight Club,” (hey...) is a Signal chat group where progressives coordinate strategy around opposing Schumer's preferred candidates in key 2026 races. The Fight Club's grievance, at its core, is that Schumer is tilting the playing field toward centrists while an insurgent energy on the left goes untapped. The group includes Sen. Elizabeth Warren (D-Mass) and Sen. Tina Smith (D-Minn.), and it appears that Warren has been initiating those conversations directly. Smith's advisers have gone further, holding discussions with other Senate staff about concrete scenarios to challenge Schumer's leadership. 

The concern isn't purely ideological. It's financial, and that's where things get uncomfortable. Schumer's aligned super PAC, Senate Majority PAC, got outpaced by its Republican counterpart last year. Entering 2026, the Democratic super PAC had $36 million in cash on hand and $12.4 million in debt. The GOP's equivalent had $100 million on hand and zero debt. 

In the money primary - the one that quietly decides Senate races before a single vote is cast - Schumer's side is getting lapped.

Making matters worse for Schumer, meetings among Democratic Senate chiefs of staff, which should be routine operational sessions, have reportedly become forums for airing discontent with Schumer's stewardship. The pressure building in those rooms is aimed at a specific outcome: Schumer commits to retiring from the Senate when his seat is up for re-election in 2028, clearing a path for whoever comes next.

That next person may already have a name attached. Sen. Brian Schatz of Hawaii has been identified as Schumer's own preferred successor. Apparently, Schumer has thought this through enough to have a pick. But Schatz isn't moving until Schumer moves first. His posture, per senators and aides familiar with the discussions, is to wait it out.

Schumer may have the votes to survive a mutiny for now. But his colleagues are doing the math, his fundraising is underperforming, his preferred candidates are generating internal blowback, and the party seems anxious to see him go. The caucus isn't in open revolt yet, but it’s not looking good for Chuck Schumer. 

The head of a left-wing nonprofit, reportedly linked to a Marxist propaganda network connected to a China-based billionaire, flew first class while her supporters traveled in coach to Cuba. This appears to be an effort aimed at disrupting U.S. foreign policy operations in the Caribbean.

"NOW we're on our way to Cuba!" Code Pink wrote on X on Friday.

NOW ???? We're on our way to Cuba!

Our CODEPINK delegation to the Nuestra América convoy is carrying thousands of pounds of urgently needed humanitarian aid.

We stand with Cuba! pic.twitter.com/ZxirbToPX6

— CODEPINK (@codepink) March 20, 2026

Code Pink's Medea Benjamin, of course, flies first class. 

???? ?? We're flying to Cuba with a plane full of medical aid & delegates to support the Cuban people in the face of the heinous US blockade. pic.twitter.com/CaVmRaTJ6Y

— CODEPINK (@codepink) March 20, 2026

Their mission is simple: to fly medical supplies to the financially collapsed island, which the left-wing nonprofit claims is being "suffocated by the U.S. blockade." Yet judging by the small volume of supplies, the mission appears to be little more than an information operations campaign against President Trump's foreign policy in the Caribbean that could very well end with Cuba ditching communism, which has been nothing but a disastrous experiment.

?????? We’re in Havana!

Our delegation is starting to land with medical donations for the Cuban people as they are suffocated by the U.S. blockade. pic.twitter.com/9wK4mLn3fS

— CODEPINK (@codepink) March 20, 2026

Champagne socialists... 

BREAKING - It’s now been revealed the Cuban regime was forced to deploy armed security to protect the five-star hotel where champagne socialists like Hasan were staying, fearing locals might attempt to storm it in protest of the country’s electricity being diverted to the hotel. pic.twitter.com/fzm96NiNyQ

— Right Angle News Network (@Rightanglenews) March 22, 2026

In late December, Code Pink's Medea Benjamin and Vijay Prashad of the Marxist-aligned Tricontinental Institute for Social Research tried to organize a "flotilla to Cuba" modeled on the Gaza flotillas. It appears Code Pink is furious that President Trump is set to play a major role in Cuban politics, as opposed to the current communist regime in Havana and the Chinese government.

Funding and infrastructure for these operations appear to come from the Neville Roy Singham Network, a web of organizations tied to Chinese Communist Party-aligned capital that provides money, logistics, and professionalized organizing capacity. Public narratives are amplified by legacy anti-war organizations such as Code Pink and the ANSWER Coalition, which are now also under the Singham umbrella.

Singham, who is married to activist Jodie Evans, co-founder of Code Pink, has been alleged by House Republicans to be a major financial backer of the Party for Socialism and Liberation, which has organized nationwide protests, including unrest in Los Angeles. According to recent reporting by The New York Times, Singham resides in China while maintaining a long record of supporting far-left nonprofits, including Code Pink, that oppose U.S. interests and align with U.S. adversaries.

These far-left nonprofits frame U.S. foreign policy as illegitimate while defending authoritarian regimes. The Democratic Socialists of America (DSA) function as the political activation channel, translating activist energy into electoral and legislative influence on behalf of the Cuban regime.

In fact, we recently penned the note "Is There A "Cuba Connection" Behind The Radicalization Of America's Nonprofit Left"...

Government Accountability Institute President Peter Schweizer told us earlier this year, "Singham's anti-American villainy became clear with his financing of the violent Black Lives Matter uprisings — to Communist China's delight. He is absolutely in bed with the CCP."

If you want to understand why the radical left appears to hate America and seeks to implode the nation from within, it is not difficult to see that these ideas are rarely developed organically. More often, they are shaped and reinforced by outside influences. This chart helps explain why the radical left has become so radical.

To understand Code Pink's actual mission in Cuba, it's important to recognize that it is an optics campaign. Trump's foreign policy crusade - from regime change operations in Venezuela to shifting the Americas from far-left control to right-wing, as well as pressuring China - has infuriated America's left, but more importantly, China. Soon, communism in Cuba may fall as a result.

Under the previous regime, China was able to tap into Venezuela's cheap oil reserves. Not anymore with Trump cleaning up the West.

"Venezuela has been a vassal of China and is endowed with the largest proven oil reserves in the world. Venezuela is now a U.S. vassal, and her oil is not going to China anymore since Trump’s coup. Bravo," ex-Credit Suisse star Zoltan Pozsar, now runs an advisory firm called Ex Uno Plures, wrote in a note. 

The broader issue is the extent to which foreign influence may have hijacked America’s nonprofit ecosystem (on the left and the right), underscoring the urgent need for reforms across the entire nonprofit universe. The pattern on the left is the most alarming...

...  seen in riots and the burning down of city blocks, which does not appear entirely organic; rather, it bears all the signs of asymmetric warfare.

*  *  * BEEF IS BACK! 

Submtted By Peter Tchir of Academy Securities

I expect that we will see a lot of “green dots” on the Bloomberg Terminal Sunday night, as there was almost no asset (other than energy) up on Friday. I do know that my Monday will start bright and early, at 5am on CNBC. Away from that everything is a bit up in the air.

There are headlines that can push us in either direction. Some developments that seem good, some that seem bad, some that seem weird, and some that are just downright confusing and/or contradictory.

Transiting the Strait

There seem to be three possibilities to transiting the Strait:

• Please see Thursday’s SITREP U.S. Expected to Conduct Strait Transit This Month. On Saturday morning Admiral Cooper, in a video on X, said “Iran’s ability to threaten freedom of navigation in and around the Strait of Hormuz is degraded.” The report went on to list other actions being taken to knock out the capability of Iran to target ships in the Strait. This fits Academy’s view that the U.S. is actively taking steps to prepare for safe transit.

• More countries have signed the Joint Statement expressing a “readiness to contribute to appropriate efforts to ensure safe passage through the Strait.” A bit “wishy-washy” at best, and went to great pains to reference the United Nations and International Energy Agency, and avoid referencing America. Not sure if this does much, but it is a step in the right direction. If we are going to stick to the “Manic Monday” theme, this reminds me of the line, “blame it on the train, but the boss is already there.”

• Mounting “chatter” that Iran is “selling safe passage” for about $2 million per ship. I did get some secondhand confirmation from a trusted source that these discussions are in fact occurring. Unclear how effective they will be.

All of these things are “encouraging” in terms of shipping. A U.S.-led (or even solely U.S.) effort to encourage ships to transit the Strait is the most promising in terms of being a “real” solution. The Iranian “insurance” plan seems dubious at best, and not great for the world.

Unfortunately, it is being widely reported that Iranian leadership is steadfast on trying to keep the Strait from being transited by global shipping and is unwilling to even negotiate on the topic.

Polymarket has several opportunities to “predict” things:

• Strait of Hormuz traffic returns to normal by the end of April. Only 27% down from 50% as recently as March 12th.

Lots of opportunity for stocks to do very well if that is really reflective of what is being priced into the market. I think it is too small of a market to be particularly useful, but lately it does seem that some “obscure” prediction markets get volume and pricing that indicates someone “knows” something – so worth at least keeping an eye on.

Boots on the Ground, or Mission Accomplished?

Marine expeditionary forces are on the way. There has been a lot of discussion about the potential to “seize” Kharg Island (now that Iran’s military facilities have been hit hard). Or to possibly clear Iranian forces close to the Strait. There is a lot of debate on what taking Kharg Island would mean. One school of thought is that controlling the ports would rapidly force Iran to the table as their primary source of income and leverage would be in U.S. hands. Others see a lot of risks to the plan, from hardening resolve, to still requiring the Strait to be open, to how much money/currency does Iran have and how long could they hold out, even if they were not able to sell another barrel of oil? I’m more in the latter camp, but we can debate this option later this week as the Marines arrive.

Also, why spend much time thinking about boots on the ground, when the President has been posting on Truth Social “We are getting very close to meeting our objectives as we consider winding down our great Military efforts in the Middle East with respect to the Terrorist Regime of Iran.”

This statement could be a negotiating tactic. Maybe it is just to lull Iran into a false sense of security (the initial attack on Iran occurred during ongoing negotiations). Maybe it is just a “trial balloon” to see how people (voters) and possibly markets respond?

Literally, both extremes - “boots on the ground” and “we won, time to go home” - are on the table. It really could be a Manic Monday.

Un-Sanctioning, De-Jonesing, and Releasing

In the past week or so, the administration has:

• Taken off sanctions on Russian oil. This certainly helps keep the price of oil lower than it would be otherwise, though I suspect most of the oil still winds up going to China and India, at less of a discount. At the same time, I would be very concerned about what this means for Russia if I’m either Ukraine or the EU. Secretary of War Hegseth has been pointing out how any lack of inventory in the U.S. military is a direct result of giving weapons to Ukraine. If Europe isn’t already thinking about the need to potentially “go it alone” against a wealthier Russia, they should be. It might not get to that point, but that is certainly one message that can be taken from this very “transactional” administration.

• Removed sanctions on Iranian Oil “on the sea.” The Treasury Secretary made this announcement and referenced 140 million barrels that will now be without sanctions. That is a big “release” of oil, but I’m told by oil experts that while the amount at sea is around that, as much of 100 million barrels is already spoken for (largely by China) and is in transit. So, it might be “only” 40 million barrels. If one goal of seizing Kharg Island is to apply maximum economic leverage, this move seems to give Iran more wiggle room. In the aftermath of this, it will be interesting to see how Iran has funded itself? Presumably not in dollars, so in yuan? Bitcoin? Barter?

• A 60-day suspension of the Jones Act. This basically allows any ship to transit goods between two U.S. ports. It is viewed by many, including me, as a potential first step towards export controls. The U.S. is not designed (currently) to use all of the oil, gas, LNG, diesel, etc. that it produces domestically. Pipelines aren’t developed for that. The Jones Act has made it unprofitable to do that. This allows some of that to occur, helping keep oil prices low. There is a limit to how effective it can be without export controls (and I’m not a big fan of export controls, but it is something we should watch).

  • The U.S. price for any energy product, with no export controls, is basically the Global Price minus Freight Costs minus some “Inertia” (where “Inertia” is existing relationships, agreements, etc.). So, as “global” prices rise, U.S. prices will rise, because the drillers, refiners, etc., will make more money selling it overseas if prices don’t rise domestically. It is economics 101, so we will see what else gets implemented to keep domestic prices lower if they continue to rise across the rest of the world.

• Strategic Petroleum Reserve releases. I have not done the work, but it sounds like the U.S. released almost 90 million barrels of oil. Since there is only excess capacity to load about 25 million barrels a month, the release gives us some breathing room, until June or so (3 to 4 months). There is more to be released, though there is some limit, as apparently some amount of oil needs to stay in the reserves to keep the facilities’ structural integrity intact. Europe has supposedly been slower on releasing their supplies, but that is possibly because they are worried it will get bought elsewhere, so they will bleed out their reserves more “judiciously.” Europe’s lack of energy independence is once again being highlighted! The President did admonish the leader of Scotland for buying North Sea oil from Norway, and wind turbines from China, while curtailing their own drilling in the North Sea. How long before Europe gets the ProSec™ message?

• No relief on tariffs. I would have put this in play, at least for some things (energy, fertilizer, etc.) but I was never a huge fan of the broad application of tariffs in any case.

Airbus for Drones

According to Wikipedia, Airbus was created in 1970 as a consortium of European aerospace companies to produce wide-body aircraft to compete with American built airliners. If I was in the EU, I’d be pounding the table for a drone equivalent of Airbus:

• It is quite clear that drones are effective. They have their limitations (both on the hardware and software sides), but they can certainly play a meaningful role in deterrence and defense (as well as provide offensive capabilities).

• They are cheap and relatively easy to make. Making a 5th generation jet is extremely difficult. Ditto for aircraft carriers and capital ships. Even modern missile systems are expensive and require highly specialized machinery. Take a bunch of factories that used to make cars (or other things) and ramp up drone production. A drone factory for the Ukrainian Army was recently opened in the U.K. I see great difficulty (and that is being kind) in the EU developing a fighting force with the equipment they have any time soon (like in the next 5 years). A fleet of drones and unmanned surface vessels that is enough to give Putin some pause seems far more plausible.

• The “consortium” construct is important as it would hopefully remove some of the national interests that already impair Europe’s efforts to rearm themselves quickly and with some degree of compatibility.

Possibly a non sequitur but I want to invest in companies that might fit this sort of model as it seems to be an obvious choice, and eventually, usually after a lot of whining and moaning, and a couple of near-catastrophic failures, Europe does the obvious thing. (The European Debt Crisis from the beginning to “whatever it takes” seems to fit this path well).

The U.S. is Neither an Oasis Nor a Mirage

As brent crude soared higher than WTI (and grades of crude most of us have rarely heard of skyrocketed even more), the U.S. equity markets seemed to treat the U.S. as an “oasis.” We already mentioned that even with energy independence, we will see higher prices along with the rest of the world (unless we go to some form of export control). So, we are not immune. But we do have advantages - hence we are neither an oasis (really good), nor a mirage (all fake).

The links to the U.S. are real and will hurt:

• Somewhere around 40% of the revenue generated by Fortune 500 companies comes from overseas. If Europe and Asia are struggling, it will impact companies here.

• While the products might be American, many are manufactured elsewhere and are subject to supply disruptions, which would further impact profits for U.S. companies.

• Those countries went out of their way not to mention the U.S. in their “letter,” which makes me wonder, again, do U.S. brands still have the same “cache” for non-American consumers?

• Interest rates have spiked across the globe. The cost of everything, everywhere has gone up with this pretty dramatic move in yields. The U.S. 2-year yield went from 3.38% to 3.9% in 3 weeks. U.K. yields are incredibly jealous of that “strong” performance – as they rose 100 bps in the same period!

Ironically, and somewhat par for the course in this “stop-loss” driven market, Private Credit outperformed even as markets probably should have started adding global recession risks to the reasons to be concerned about private credit. But it seems that everyone was so underweight that even a realistic issue didn’t cause much/any new pain.

Urea and Limp Mode

In the long list of “knock-on” effects from the slowdown in goods from the Middle East, we can add another “risk” – DEF. Diesel exhaust fluid is used in diesel engines to reduce harmful emissions. Since 2010 (or so), if a diesel engine doesn’t have enough DEF, the vehicle is restricted to going 5 to 15 mph (limp mode). Supposedly the vehicle can be reprogrammed, but this is yet another thing to highlight regarding the quirkiness and complexity of supply chains and products. Oh, I almost forget, urea is about 33% of DEF. Gulf urea costs have almost doubled since the start of the year.

Not trying to make a big deal about this (unlike helium for semiconductors), but thought it would provide a nice break, and I always enjoy learning something new.

NI CHEM Majeure

I need to find some better hobbies than checking out Bloomberg for stories containing “Force Majeure” but it is getting more worrisome by the day.

If you go to Google Trends it is pretty clear that others are starting to be fascinated with this as well.

Already Too Late?

It is already precarious for Asia (ex-China), the Middle East itself, and Europe. The costs, potential supply chain disruptions, AND higher rates (when many mortgages are floating rate) seem to be a recipe for recession.

A resolution this week, or maybe even next, and maybe we scrape by. Maybe the U.S. is still out of range for a recession, but a recession was barely a gleam in the eye of any “doomer” a month ago, and that risk now has to enter the conversation.

Risks to the global economy are rising. While the U.S. is in much better shape (we were in better shape before the conflict and have more robust protection against the new problems created by the conflict), that doesn’t mean we don’t have risk (we are not a mirage, but we are not an oasis either).

Yields scare me right now.

The moves don’t seem to make sense in the context of higher oil prices. Yes, higher oil prices should impact yields, but by this much?

We saw 2s vs 10s flatten (which makes some sense, if higher prices will slow demand over time), but on Friday, 10s underperformed.

I am not sure the consumer is in a position to do well in this rising rate environment. Again, private credit didn’t seem to care on Thursday and Friday (and I had recommended being long those sectors recently, because too much pessimism was being priced in). I think they should care as the risk of a slowing economy with potential supply chain hiccups is a real risk here.

Bottom Line

I wish it was Sunday, 'cause that’s my fun day.

Okay, it is Sunday, but it is certainly not my fun day. Nor has it been for the past few weekends (though to be honest, deep down, I enjoy these stressful times).

Manic can be good.

By the time this makes it to our website, and you see it distributed, we might have some clarity one way or the other. We are likely to continue to be affected by dueling headlines.

There are still plenty of paths to a really strong week for markets, especially if the “winding down” messaging comes to fruition with a resolution in the Strait.

There are other ways we can see progress that might not give us a “manic” rebound, but a rebound nonetheless.

Unfortunately, there are plenty of paths that lead to more problems and some that could lead to a manic week, and not in a good way.

I do believe that as we move down the road, in a week or two, markets won’t react to positive headlines, as the “fear” that it is already “too late” gets priced into markets.

I’d love to say “buy Treasuries” but we seem to have broken some resistance and it is difficult to justify the size of the move solely on the economics of what is occurring in the Middle East.

I guess my “bottom line” is cautious for now, but be prepared to be very bullish, though any thought of being bullish will diminish as the days go by if we don’t see progress in getting us off the current path. The current path, as it goes on, will make it “too late” for some economies, and even if the U.S. can avoid the worst of it, it won’t be great for earnings (and hence the stock market). Rates seem to be telling such a different story that bonds seem like a “screaming” buy here, but that too seems dangerous.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Most investors spend their time watching the S&P 500. That’s a mistake, because the credit market is the real “tell.” The bond market has been whispering a warning for weeks now, and credit spreads are now shouting it. As of this writing, the CDX Index, a benchmark measure of credit default swap spreads, has climbed to a nine-month high while the S&P 500 sits within 5% of its all-time peak. Over the past 20 years, every time that combination appeared, a bear market followed. Every single time.

That’s a track record worth taking seriously, and credit spreads are critical to understanding market sentiment and predicting potential stock market downturns. A credit spread refers to the difference in yield between two bonds of similar maturity but different credit quality. This comparison often involves Treasury bonds (considered risk-free) and corporate bonds (which carry default risk). By observing these spreads, investors can gauge risk appetite in financial markets. Such helps investors identify stress points that often precede stock market corrections.

The chart shows the annual rate of change in the S&P 500 market index versus the yield spread between Moody’s Baa corporate bond index (investment grade) and the 10-year US Treasury Bond yield. Rising yield spreads consistently coincide with lower annual returns in the financial markets.

The reason is that credit is the lifeblood of the economy. Businesses borrow to operate, and consumers borrow to spend. As such, when the cost of that borrowing rises, particularly the premium lenders demand to extend credit to riskier borrowers, it signals that the economy is under stress. That “stress” directly affects forward earnings estimates and increases the likelihood of a valuation repricing.

The “Junk to Treasury” spread is the clearest expression of this dynamic. Investors who buy high-yield bonds, the ones with a meaningful chance of default, should demand a premium above the risk-free rate offered by U.S. Treasury bonds. When that premium compresses, it signals that investors are comfortable speculating, willing to reach for yield without demanding adequate compensation for the risk they’re accepting. When the premium expands, the mood has shifted. Lenders are getting nervous. Credit conditions are tightening. And historically, tighter credit conditions have preceded more challenging environments for stocks.

This isn’t a theoretical relationship; it has repeatedly appeared in the data for decades. The bond market (CDX) prices risk continuously across thousands of issuers and maturities. It’s harder to talk up than equities, and it’s not susceptible to the same retail-driven momentum that can keep stock prices elevated long after the fundamental picture has deteriorated.

When credit spreads widen, investors should pay attention.

What The CDX Is Telling Us Now.

The chart from Sentiment Trader below tells the story as clearly as any amount of prose could. The top panel tracks the S&P 500 since 2007. The middle panel shows the CDX Index of credit default swaps. The bottom panel shows where those spreads stand relative to their 189-bar range, essentially a percentile reading of how elevated they are relative to recent history. (Red markers indicate instances where CDX spreads hit 9-month highs while the S&P 500 is within 5% of its high.)

Notice that each red arrow marks a moment when CDX spreads reached a nine-month high while stocks remained near their all-time highs. The 2007 signal preceded the worst financial crisis since the Great Depression. The 2015 signal preceded a sharp correction and an extended period of volatility. The 2022 signal arrived just before the Federal Reserve’s aggressive rate-hiking campaign drove the S&P 500 down 25%. And now, in early 2026, the signal has triggered again.

“This has been one of the more important divergences we’ve been tracking recently. CDS is pushing to a 9-month high even with equities near highs, effectively tightening financial conditions. Historically, this setup has been unstable: about half the time it led to sharp drawdowns, while the rest saw either mild pullbacks or continued gains.” – Sentiment Trader

The range-rank reading in the bottom panel is particularly instructive. It shows that current CDX spread levels are not a minor blip, but are registering near the upper end of their recent historical range. That’s not statistical noise, but a market pricing in genuine credit stress. The table below summarizes the four instances over the past two decades where CDX spreads hit nine-month highs while the S&P 500 traded within 5% of its peak. The subsequent market outcomes speak for themselves.

Does this mean the current situation will devolve into a bear market? Not necessarily, but history suggests the risk is elevated enough to warrant investors’ attention. It is also worth noting that the magnitude of the subsequent declines varied considerably, from the catastrophic 2008 to 2009 bear market to the more contained 2015 correction. That is due to the severity of the credit impact on the underlying economy. However, they all shared a period of elevated credit spreads that the equity market initially chose to ignore.

So far, this “time is not different.”

The Counterargument Is Not Convincing

The bulls will argue that CDX spreads are widening from historically tight levels and that the absolute level of stress remains modest by historical standards. That’s technically accurate, as shown, Treasury-to-Junk Bond spreads in early 2026 are not at the panic levels seen in 2008 or 2020. So why worry?

It isn’t the absolute level of the CDX that matters, but the direction of travel and the rate of change. If investors wait for the “spike,” it will likely be too late to act. Sentiment Trader’s nine-month high threshold isn’t about measuring the peak of a crisis; it is a warning of a potential turn. Credit stress doesn’t arrive fully formed. It builds. Each of the prior signals triggered before the real damage was done, precisely because spreads were starting to move, not because they had already maxed out.

There’s also the macro backdrop to consider. The S&P 500 enters this period with valuations near the upper end of its historical range, forward earnings estimates elevated, and sentiment still bullish. As investors, we monitor the high-yield spread closely because it is often one of the earliest signals of a fundamental shift in corporate and economic conditions. In other words, watching spreads provides insights into the health of the corporate sector, which is a major driver of equity performance. When CDX spreads widen, they often lead to lower corporate earnings, economic contraction, and stock market downturns. The reason is that a significant widening of the CDX spreads signal:

• Liquidity Drain: As investors become more risk-averse, they shift capital from corporate bonds to safer assets, such as Treasuries. The flight to safety reduces liquidity in the corporate bond market. Lower liquidity can lead to tighter credit conditions, affecting businesses’ ability to invest and grow and weighing on stock prices.

• Corporate Financial Health: Credit spreads reflect investor views on corporate solvency. A rising spread suggests a growing concern over companies’ ability to service their debt. Particularly if the economy slows or interest rates rise.

• Risk Sentiment Shift: Credit markets are more sensitive to economic shocks than equity markets. When CDX spreads widen, it typically indicates that the fixed-income market is pricing in higher risks. This is often a leading indicator of equity market stress.

• Corporate earnings may decline: Companies with lower credit ratings may struggle to refinance debt at favorable rates, thereby reducing profitability.

• Economic growth is slowing: A widening CDX spread often reflects concerns that the economy is heading for a slowdown, which can lead to reduced consumer spending, lower business investment, and weaker job growth.

• Stock market volatility may rise: As credit conditions tighten, investor risk appetite tends to decline, leading to higher volatility in equity markets.

Listening to credit spreads, particularly the high-yield spread versus Treasuries, is a critical indicator of stock market downturns. Historically, they have been a reliable early warning signal of recessions and bear markets.

Key Catalysts Next Week

The calendar downshifts after two consecutive weeks of high-impact data. No marquee releases are scheduled, but don’t mistake a thin calendar for a quiet tape. The dominant forces will be the market’s ongoing digestion of the March 18 FOMC decision, the updated dot plot, and Powell’s characterization of the stagflation dilemma—all compounded by quarter-end institutional flows that historically amplify moves in both directions.

By Monday, traders will have had a full weekend to digest whether the dots shifted to zero cuts (risk-off repricing in housing, small caps, and high-duration tech) or held at one with dovish language acknowledging labor deterioration (relief bid). A parade of Fed speakers throughout the week will provide color, walking back or reinforcing whatever Powell signaled. Those headlines will move markets more than any scheduled data.

Tuesday’s Q4 Productivity final revision matters more than usual. The prior quarter showed output rising 5.4% while hours worked grew just 0.5%. The unit labor cost component is the inflation signal: falling costs give the Fed room, rising costs tighten the stagflation case. Richmond Fed Manufacturing rounds out the regional factory picture alongside the Empire State and Philly Fed surveys.

Friday’s final UMich Consumer Sentiment is the week’s marquee event. The preliminary reading dropped to 55.5—near post-pandemic lows. The one-year and five-year inflation expectations are what the Fed watches most closely; a spike above 3% would validate the hawkish hold and kill remaining hopes for near-term easing.

Underneath the data, the real story is mechanical: Q1 ends March 31. Pension funds and institutional allocators begin quarter-end rebalancing and window dressing. After the sharp rotation out of tech and into value that defined the first quarter, the question is whether those flows reverse or accelerate. In a thin-catalyst week, flow-driven moves can be outsized.

Don’t mistake repositioning for conviction.

In a post on his TruthSocial feed, President Trump has confirmed that ICE agents will be joining forces with TSA agents as of tomorrow to aid in the safe-keeping of Americans:

On Monday, ICE will be going to airports to help our wonderful TSA Agents...

... who have stayed on the job despite the fact that the Radical Left Democrats, who are only focused on protecting hard line criminals who have entered our Country illegally, are endangering the USA by holding back the money that was long ago agreed to with signed and sealed contracts, and all.

But watch, no matter how great a job ICE does, the Lunatics leading the incompetent Dems will be highly critical of their work.

THEY WILL DO A FANTASTIC JOB.

The great Tom Homan is in charge!!! President DJT

Something's got to give...

??HOLY CRAP!!!

The Atlanta TSA line has now stretched to a stunning 153 minute-wait-time... AT 6AM IN THE MORNING!!!!

The line is WRAPPING AROUND BAGGAGE CLAIM!!!

THIS IS PURE INSANITY!!!!!! pic.twitter.com/2MluEMjitJ

— Matt Van Swol (@mattvanswol) March 22, 2026

This confirmation comes after President Trump initially announced plans yesterday to move Immigration and Customs Enforcement (ICE) agents to airports on Monday to help Transportation Security Administration (TSA) agents manage security checkpoints.

“If the Radical Left Democrats don’t immediately sign an agreement to let our Country, in particular, our Airports, be FREE and SAFE again, I will move our brilliant and patriotic ICE Agents to the Airports where they will do Security like no one has ever seen before,” Trump wrote in a Truth Social post on March 21.

BREAKING??: Chaos at LGA Terminal B this morning! The TSA PreCheck line is so backed up it's wrapping around every room and stretching all the way out to the parking garage. Plan extra time if you're flying out of here!
pic.twitter.com/JhFcz80Pes

— Officer Lew (@officer_Lew) March 22, 2026

As Jacki Thrapp reports for The Epoch Times, Trump revealed his plans to move ICE agents to airports one day after the Senate failed to advance a funding bill for the Department of Homeland Security (DHS), which has been in a partial shutdown since Feb. 13.

“I look forward to moving ICE in on Monday, and have already told them to, ‘GET READY.’ NO MORE WAITING, NO MORE GAMES!” Trump added in a second Truth Social post on Saturday.

Trump did not reveal which airports the ICE agents would be deployed to but added that he would order them to immediately arrest “all Illegal Immigrants who have come into our Country, with heavy emphasis on those from Somalia.”

As lawmakers on Capitol Hill remain at a stalemate, federal employees in the agencies under DHS have been working without pay due to the lapse in federal funding that started in mid-February.

Agencies under the DHS umbrella include TSA, Customs and Border Protection, ICE, the Federal Emergency Management Agency, and the Coast Guard.

NOW: Massive delays at JFK Airport in NYC, crowds report waiting for hours in TSA lines

Video by Diego Luzuriaga | Licensing @FreedomNTV Desk@freedomnews.tv pic.twitter.com/n4mAO6tp7b

— Oliya Scootercaster ?? (@ScooterCasterNY) March 22, 2026

Some TSA agents have had to sleep in their cars and go to food banks just to stay afloat, while others called in sick, which has caused hours-long security lines, according to Homeland Security.

There are growing concerns that some airports will have to temporarily close down due to TSA staffing shortages.

Billionaire Elon Musk offered on Saturday to help pay TSA workers.

“I would like to offer to pay the salaries of TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout the country,” Musk said in an X post.

Since the start of the partial shutdown, Democrats have refused to support funding bills because they want to change immigration enforcement policies, particularly those involving ICE.

Senate Minority leader Chuck Schumer (D-N.Y.) proposed a motion on Saturday to advance a bill that would fully fund TSA—but not the entire DHS. It failed in a party-line vote of 49 to 41.

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