We know what’s coming and we are prepared.
Consumer Sentiment & the C.P.Lie
The latest Michigan survey saw 1Y-inflation expectations increase to 3.5% (versus 3.2% expected) and consumer sentiment plunge from 69.1 to 65.6 (versus 72 expected).
We don't need to tell you that this is a bad outright terrible result, but meanwhile the Fed as usual has its blinders on, desperate to explain it away because, after all, "why, at a time of falling inflation, low unemployment, and strong economic growth, do voters appear so unsatisfied with the state of the economy, and in how Biden is handling the economy? Why in particular do voters complain so much about inflation?" (That's a quote)
The first comes from the Richmond Fed, which finds that "consumers whose political party is in office tend to have higher sentiment than those affiliated with the party not in office," noting that "the partisan sentiment gap has widened over time."
The second, much more convincing result, is some research from the Chicago School of Business, which used the pre-1983 CPI that took home prices and mortgage interest payments into account.
"If it still did, inflation would have peaked at nearly 18 percent in late 2022, about double the current CPI measure."
In fact, as the study itself claims, "If we measured inflation as the BLS did in the 1970s, the recent bout of inflation would have been even higher than the worst of the 1970s! It really is as bad now as it was then."
If the CPI were to include interest paid on personal debt (such as auto loans and credit-card debt), that would also produce a much higher inflation rate than suggested by the current official measure (chart above). In fact, using this CPI, the year-over-year change in inflation has only just returned back down to its 2022 highs.
Maybe this would better explain for the economists like John Cochrane why "voters complain so much about inflation?"
🇺🇸 #Oklahoma high school principal (Kirk Moore) seen charging at and disarming a school shooter.
The suspect, identified as 20-year-old Victor Hawkins, was a former student who said he wanted to shoot up the school “like the Columbine shooters did.” While taking down the shooter, Moore was shot in the leg. He is expected to recover.
When the Principal woke up that day, he never thought he would be tackling a gunman.
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🇨🇳🛢 How much strategic oil does the world actually have in reserve?
Global strategic crude oil inventories stood at ~2.5 BILLION barrels as of December 2025, according to the US Energy Information Administration.
China holds by far the largest stockpile at 1,397 million barrels, more than 3 times the US Strategic Petroleum Reserve of 413 million barrels, which itself sits at only 58% of its full storage capacity of 714 million barrels.
China added an average of 1.1 million barrels per day to its strategic inventories throughout 2025, with preliminary data suggesting it continued building stockpiles in early 2026 ahead of the Iran War.
Japan holds the 3rd-largest reserve at 263 million barrels, followed by OECD European countries at 179 million barrels.
Meanwhile, the US is releasing 172 million barrels from its Strategic Petroleum Reserve to suppress oil prices, part of a broader 400 million barrel coordinated release agreed by 32 IEA member nations in March.
🔗 ...
🛢 JP Morgan Warns Oil Market Out of Balance, Prices Must Rise
🔸The closure of the Strait of Hormuz, through which roughly 20% of the world’s oil flows, has removed 13.7 million barrels per day from global supply in April alone. A JP Morgan research note warns the market has no good way to replace it.
🔸Normally, spare production capacity in Saudi Arabia and the UAE acts as the market’s shock absorber. But that buffer has effectively been removed, eliminating the system’s first line of defense.
🔸With spare capacity unavailable, markets turned to inventories
➤ Global stockpiles are now being drained at ~7.1 mbd in April, an extraordinary pace, according to the note.
🔸Meanwhile, demand is collapsing because supply simply isn’t reaching users — “forced demand destruction.”The hardest hit sectors include:
▪️ Petrochemical plants across Asia are shutting down or slashing output as LPG, ethane, and naphtha flows from the Gulf collapse
▪️ Airline jet fuel ...
🛢⛽️ Global oil inventories are heading toward RECORD LOWS:
Global visible oil inventories have fallen -255 million barrels since the start of the conflict on February 27, to 7,864 million barrels.
Total estimated oil draws, including non-OECD refined products storage, have accelerated to 10.9 million barrels per day in April, the largest monthly draws on record since 2017.
Cumulative estimated draws since the start of the war now stand at 474 million barrels, with Hormuz flows holding at ~10% of normal, or 2.0 million barrels per day.
Meanwhile, even in an optimistic scenario where Strait of Hormuz flows begin recovering by late April, it is unlikely to prevent global visible inventories from reaching all-time lows, according to Goldman Sachs.
As inventories keep falling, physical oil markets are likely to require sharply higher prices for immediate delivery, since buyers cannot wait months for cheaper futures delivery when stocks are running critically low.
Goldman also warns...
