Wages of war and market hegemony

plus: institutional stablecoins, markets and macro

“The trouble is you can shut your eyes but you can’t shut your mind.” – Terry Pratchett ||

Hi all! I was going to throw in a flippant warning about Friday 13th, but given the military action overnight, that feels small. I hope that you all get to touch grass this weekend.

Today’s is a long email, as were most of this week’s – but next week I will probably need to skip a day as I have back-to-back events, so I figure it all averages out, right?

IN THIS NEWSLETTER:

• Wages of war and market hegemony

• Institutional stablecoins everywhere

• Macro-Crypto Bits: markets and macro

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WHAT I’M WATCHING:

Wages of war and market hegemony

By now, you’ve no doubt heard that Israel unleashed a wave of attacks on Iran last night that not only did significant infrastructural damage to its nuclear processing capability, but also killed several nuclear scientists and senior leaders of the Iranian armed forces as well as the Islamic Revolutionary Guard Corps (IRGC), including the former’s Chief of Staff and the latter’s Commander-in-Chief.

This was a big military hit, to put it mildly, arguably more strategically damaging than last October’s assault, and the fiercest attack on Iran since the 1980-88 Iran-Iraq war.

We can all breathe a sigh of relief (literally) since the International Atomic Energy Agency (IAEA) has confirmed no notable increase in radiation levels around the successfully targeted enrichment site.

But this is far from over. Israeli Prime Minister Benjamin Netanyahu called it a successful “opening” strike. Iran has of course vowed retaliation, starting with the swift launch of a wave of drones, most of which are apparently being shot down as I type. The IRGC is accusing the US of supporting the attack, which Secretary of State Marco Rubio has vehemently denied, but the implication is that US targets are now fair game.

Saudi Arabia, Qatar and the UAE – which host the US military bases Iran has threatened – have issued official condemnations of Israel’s move. They have also on various occasions expressed concern about Iran’s nuclear ambitions, but are no doubt understandably concerned about getting caught in the crossfire.

The bigger impact

Aside from concern for the safety of citizens and foreign personnel around the Middle East, there are three big takeaways here that confirm trends we’ve been watching for some time now.