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Tesla’s $1.29 Trillion Valuation Is Getting Strange

Tim Gocklin, MBA, MSF
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Tesla’s $1.29 Trillion Valuation Is Getting Strange

Tesla Has a Market Value of $1.29 Trillion and Its Most Recent Operating Profit Was Only $400 Million

Tesla is currently one of the most unusual stocks on Wall Street. The company has a value of about $1.29 trillion, although its most recent quarter brought in only around $400 million in GAAP operating income. Despite revenue reaching $28.24 billion, Tesla recorded a negative free cash flow of $1.1 billion in the second quarter. Currently, Tesla is trading at approximately 337 times its trailing earnings.

It would be difficult to square those figures if Tesla were valued merely as a manufacturer of electric vehicles. Increasingly, it is not. The huge valuation seems to be based on something even more significant: investors are currently assigning value to a future Tesla that will be centred on autonomous taxis, artificial intelligence, energy storage and humanoid robots. The issue is that the cash-generating automotive business will still have to finance a great deal of that transformation.

This is one of the most unusual financial arrangements found among America’s largest companies since Tesla’s current business produces hundreds of thousands of vehicles each quarter but its market capitalization is increasingly based on businesses which are only just beginning to scale. The financial information that Tesla has made public makes it hard to overlook that tension.

Tesla and Rising Gas Prices: EV Demand Rebounds While Oil Stocks Cash In →

There is a significant reason why investors have not given up on Tesla’s story: the automobile industry is still huge, and the most recent delivery figures were surprisingly good. In the second quarter of 2026 Tesla delivered 480,126 vehicles, an amount greater than the 451,758 it had produced. The number of vehicles delivered for the Model 3 and Model Y together was 467,762. Prior to the release of those figures, Tesla’s own compilation of the Wall Street consensus had projected only around 406,024 deliveries.

Tesla thus exceeded the consensus by about 74,000 vehicles, which is over 18%. That is no small failure in forecasting. It indicates that the underlying demand for Tesla vehicles was much higher in that quarter than many analysts had expected, and that Tesla installed 13.5 gigawatt-hours of energy-storage products during the period, according to Tesla’s second-quarter production, delivery and deployment figures.

Revenue then amounted to $28.24 billion, an increase from $22.50 billion in the same quarter the previous year. However, the income statement presents a more complex account. Tesla reported a GAAP operating income of only about $400 million and achieved a GAAP net income of $1.1 billion. At the same time, the company produced an operating cash flow of $4.7 billion, but having spent so much on capital expenditures, its free cash flow dropped to negative $1.1 billion.

That is to say, Tesla is selling a large number of vehicles at the same time as it making substantial cash outlays for its next generation of businesses, the cash used being greater than what the operations generate after taking into account capital expenditures. That makes it all the more difficult to view Tesla as a typical automaker.

Wall Street Is Watching AI Capex. The Real Bill Is Still Coming →

In effect, Tesla is advising investors not to judge the company just on the basis of vehicle profits anymore. Production of the Cybercab has now started at the Gigafactory in Texas. Tesla has expanded its Robotaxi service to seven major metropolitan areas, and work has also started at Fremont on the production of Optimus after the Model S and Model X lines had been discontinued there. That final point is the most clear indication of where Tesla thinks its future will be.

The factory space which was previously used for the two vehicles that helped establish Tesla as an electric-car company is now being redirected to humanoid robots. Tesla also stated that its revenue for the trailing twelve-month period first surpassed $100 billion in the second quarter. The company is therefore by no means giving up its small legacy operation; rather, it is trying to use a business which generates more than $100 billion a year as a financial bridge into the field of robotics and autonomous transportation.

If Cybercab and Optimus later on become huge businesses, then the way they are valued today wouldn’t seem all that strange when looking back on it. However, Wall Street is paying for a large part of that future before the economic prospects of those businesses have become fully apparent. There is at present a further complication.

AI Is Quietly Moving Wall Street’s Buyback Machine Downstream →

On September 4 the National Highway Traffic Safety Administration started an investigation into Tesla’s self-certification of the Cybercab. The agency stated that its Audit Query will look into whether the Cybercab meets the applicable Federal Motor Vehicle Safety Standards, including the way in which Tesla dealt with the requirements that have normally been formulated in relation to vehicles having human controls.

Administrator Jonathan Morrison of the NHTSA said that the agency supports the development of autonomous vehicles but stressed that it is necessary for the regulators to make sure “that all of our laws are followed”. This has a financial implication since autonomy is no longer just an interesting side project for Tesla. It is now increasingly used as a reason for the company’s huge market value.

This gives rise to a different kind of regulatory risk. If the delay relates to one vehicle model it will generally have an effect on future sales; but if the delay involves the Cybercab it could affect the narrative that investors are using to value Tesla itself. There is an important counterargument.

Tesla has already shown that skepticism about its ability to scale new technologies can be wrong. The company has set up a global network for manufacturing electric vehicles, produced hundreds of thousands of cars in one quarter and has developed an energy-storage business that deployed more than 13 gigawatt-hours over a three-month period.

In May, the NHTSA also declared that the 2026 Tesla Model Y was the first vehicle to have passed its new advanced driver-assistance-system tests, fulfilling the requirements relating to pedestrian automatic emergency braking, lane keeping, blind-spot warning and blind-spot intervention. The situation with regard to regulation is therefore not merely a case of Tesla versus Washington. The agency which is looking into Cybercab certification has also publicly acknowledged Tesla’s achievements in advanced safety tests. That distinction matters.

Tesla Stock Is Becoming a Bet on a Company That Does Not Fully Exist Yet

What is most surprising about Tesla might now be something other than its cars. The gap is between the level that company investors can measure at the present time and the level that the company’s stock price seems to indicate for tomorrow.

Tesla now has trailing revenue of more than $100 billion, set a record in second-quarter vehicle deliveries and is expanding its energy business. At the same time, the company reported a quarterly GAAP operating income of just $400 million and a free cash flow of negative $1.1 billion, using the funds for one of the most ambitious technology expansions in corporate America.

The equity market has valued Tesla at about $1.29 trillion, which is more than 300 times its trailing earnings. It makes little sense to value the company in that way if Tesla is mainly engaged in the manufacture of cars. One can only begin to understand this if Cybercab, autonomous driving, artificial intelligence, energy storage and Optimus eventually manage to transform Tesla into something that is fundamentally much bigger.

Which is why the stock is so fascinating at the present time. Tesla’s investors are not merely purchasing the company’s current profits; they are assigning a huge financial value to a future business model which is still being developed. As Cybercab progresses from presentation slides and prototypes towards use on public roads, Wall Street will be coming to a stage at which that future will have to begin providing evidence.

U.S. Diesel Inventories Just Fell to Their Lowest Seasonal Level Since at Least 1982

Tom Langsford
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U.S. Diesel Inventories Just Fell to Their Lowest Seasonal Level Since at Least 1982

The United States still possesses crude oil, but the system used to convert crude oil into diesel is now under tremendous pressure since damage to refineries in Russia and the Middle East has cut off a major source of the world’s fuel supply at a time when U.S. inventories have dropped to a level not witnessed at this time of year in over four decades.

The most alarming figure in America’s most recent energy shock might not be $6 petrol, $100 crude oil, or even the record price of diesel. It could be 1982. A Reuters analysis of energy-market data shows that U.S. stockpiles of diesel and other distillate fuels have reached their lowest level for this time of year since at least 1982. The most recent figures from the U.S. Energy Information Administration indicate that total U.S. distillate stocks were approximately 107.9 million barrels for the week ending September 11. This is rather unusual since, at this time of year, stocks usually rise in anticipation of winter heating demand.

On September 14 the national average retail price for diesel had reached $6.285 per gallon according to the EIA, Reuters stating that this figure was approximately 68% higher than the previous year. However, crude oil was in fact declining on Friday, Brent dropping to about $103.94 per barrel and moving towards its first weekly fall in three weeks. The fact that they diverge is important; the issue is no longer merely whether the world can produce sufficient crude oil, but whether it has enough operational refinery capacity to turn that crude oil into the diesel which is used to fuel trucks, farm machinery, construction equipment and a large part of the global supply chain.

Russia’s 17-Year Oil Production Low Hides a Bigger Budget Trap →

The issue with the refinery has now become a global one. Before the present disruptions, the Middle East was exporting about 1.5 million barrels of diesel each day and Russia was supplying an additional 800,000 barrels per day, as Reuters has cited Kpler data. Since then, airstrikes and disruptions of the supply chains have damaged or limited the refineries throughout the Gulf, causing regional diesel exports to have fallen by more than 50% between March and August. At the same time, Ukrainian attacks have damaged Russia’s refining system, while Moscow has imposed restrictions on the export of diesel.

The outcome is extraordinary; Reuters states that combined diesel exports from Russia and the Gulf have dropped by about two-thirds on what they were in 2025. The International Energy Agency also gives an indication of the extent of the decline, noting that the total net exports of diesel and gasoil from the Gulf and Russia were approximately 1.6 million barrels per day less in August than in February. The IEA anticipates that global refinery throughput will average only 81.5 million barrels per day in 2026, which is a reduction of 2.6 million barrels per day compared with last year.

This week an analysis by the IEA showed that combined exports of diesel from the Middle East and Russia in August were 75 per cent lower than they had been in the corresponding month of the previous year. Although other refiners, such as those in the United States and in Asia, have increased their production in order to take advantage of the exceptionally high margins, they have so far only partly replaced the barrels which are missing. This also shows why the comparison of the 1982 inventory figures is worth looking at. The fact that stocks are low does not mean that the United States is about to run out of diesel; it does mean that the system has a smaller buffer should another refinery close down, another export route be disrupted, or winter demand turn out to be stronger than expected.

A case in point is currently happening in Illinois. The 275,000-barrel-per-day Joliet refinery operated by Exxon Mobil stayed closed on Thursday due to a power failure and issues with flooding. This facility is a major supplier to the Midwest and has a daily output of about 11 million gallons of gasoline and diesel, according to Reuters.

The Oil Market’s Worst Nightmare Is the Strait of Hormuz →

The economic risks associated with diesel are different from those of gasoline since most households do not buy diesel themselves. Instead, they pay for it indirectly. The machinery used in harvesting crops is powered by diesel, as are the trucks that transport the crops and the refrigerated trailers that carry food, not to mention much of the equipment employed in construction and manufacturing. Therefore, rises in diesel prices can filter slowly through the economy and show up later in the form of higher freight charges, greater food prices and increased business costs.

That process is already apparent. Reuters stated on Friday that South Dakota farmer Drew Peterson anticipates spending as much as $1,500 each day on fuel for one combine, which is about twice what it cost last year. David Ortega, an agricultural economist from Michigan State University, put the transmission mechanism simply like this: “The majority of our food moves on trucks and those trucks use diesel.” The figures relating to transportation are now becoming more difficult to ignore as well. As Reuters has cited freight-market data, the cost of getting produce out of California has risen by between 40% and 120% compared with the previous year. This could be the case with produce, dairy and meat since these products place a heavy reliance on refrigerated transport.

This presents the Federal Reserve with an uncomfortable dilemma. On September 16 the central bank increased its target interest rate range by 0.25 percentage point to 3.75 percent to 4.00 percent, stating that inflation had still been high and that the action would help bring about a return to its 2% goal. Higher interest rates have the effect of reducing borrowing, investment and consumer demand. They are unable to directly repair a damaged Russian refinery, restore refining capacity in the Gulf or produce the millions of barrels of diesel that are missing.

It doesn’t follow that monetary policy has no influence. The Fed is still able to curb overall demand and attempt to stop a temporary disturbance in the energy sector from turning into ongoing inflation. However, in this case the pressure is coming from the physical supply chain, which makes it much more difficult to deal with the problem simply by adjusting interest rates.

Why Everything Feels Expensive Again: Inflation, Gas Prices and the Fed’s Next Move →

There is another significant reason why the comparison with 1982 should not be taken as evidence that the United States is once again facing an energy crisis typical of the 1980s. The American economy is now considerably less reliant on oil than it was four decades earlier. A study carried out by the Federal Reserve Bank of Dallas showed that spending on oil and petroleum products dropped from just under 8% of U.S. GDP in 1980 to around 3% by 2024, alongside the United States having changed its position from that of a major net importer of oil to one that is a net exporter.

The researchers at the Dallas Fed estimated that a major geopolitical oil shock similar to the one currently taking place would reduce annualised U.S. real GDP growth by approximately 0.3 percentage points nowadays, whereas the same kind of shock would have reduced it by 5.6 percentage points back in 1980. This provides a strong counterpoint to the idea that low diesel stocks will automatically lead to an economic crisis comparable to the energy shocks that Americans experienced decades ago.

There are other good reasons to be cautious. On Friday crude prices for Brent fell since Saudi Arabia sent more oil via Oman, Chinese exports of refined products went up, and some of the inventories in areas of the diesel market which are not the most stressed showed improvement. Moreover, Reuters pointed out that the current diesel prices are still below those reached in 2008 and 2022 when inflation is taken into account. There is, however, a crucial difference between the availability of crude oil and that of refineries.

Crude oil can be sent from one producer to another, drawn from stockpiles and moved via different routes. A refinery that has been damaged is a complicated industrial plant which will need specialized machinery, skilled workers and may take months or years to repair. Because of the sanctions imposed on Russia, the replacement parts needed may become even more difficult to get, and damaged refineries in the Middle East might also be competing for the same equipment and engineering skills.

Which is why the level of U.S. distillate inventory of 107.9 million barrels might ultimately inform investors and consumers more than the day-to-day changes in crude oil. Oil prices may go down while diesel is still terribly expensive. The figures you should keep an eye on are the weekly EIA distillate inventories, refinery operating rates, Russian and Gulf diesel exports, and whether or not stocks start to rebuild before winter heating demand increases. Should those inventories recover, the record prices of today could later ease without causing a significant wider inflation shock.

If they don’t, the United States will find itself in winter with its diesel reserves at their lowest level during the season according to records going back at least to 1982. The issue is not merely whether or not the world has enough oil. The question is whether the existing number of refineries will be sufficient to convert that oil into the kind of fuel the economy really needs.

Apparently, Milo Yiannopoulos Converted to Islam. Here’s Why I Think He Did It

Blue Colllar Catholic
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Apparently, Milo Yiannopoulos Converted to Islam. Here’s Why I Think He Did It

So apparently Milo Yiannopoulos converted to Islam. I’m going to show you, in his own words, and I’m going to give you my opinion why he did it.

So, if you’re not familiar with Milo, he was an openly gay influencer who evolved, you know, when Catholicism became real popular. He said he’s always been a Catholic, but, well, not a practicing Catholic. But now he wants to try and be a practicing Catholic and abstain from homosexual acts.

Then he got deported. I guess he overstayed his visa, and now he’s living in England, apparently as a Muslim.

So, if you’re not familiar with him, we’re going to show you the radical transformation.

Rachel Maddow’s Return to Catholicism Raises Bigger Questions About Conversion →

And you’ve seen a lot of guys lately. A lot of people email me about certain influencers. One guy was actually on his channel and was like, “Dude, this guy’s a Muslim now.”

And I’m like, I’ll explain my opinion on all this in a second. I just want to show you Milo in his own words.

So, after 9/11, he spoke out against Islam. Very popular.

Now he’s speaking in favor of Islam. Very popular these days.

But here we go. Milo then and Milo now.

“You’re wearing a hijab in the United States of America. What is wrong with you?”

“Like any set of ideas, Islam, it’s like a religion. Any set of ideas deserves to be scrutinized.”

“Well, I have scrutinized it, and I have found it wanting. I found it lacking.”

“Everywhere there is Islam, you will find women oppressed. Care about female genital mutilation? Don’t care about forced marriages. Don’t care about acid thrown in the faces of your Islamic sisters. You don’t care about any of those things. Fine.”

“Let’s talk about gays instead. In 12 Islamic countries, I could be killed for my sexuality. Is that okay? One hundred million people live in countries where it is illegal to be homosexual. All of those countries are Islamic. This is not an ISIS thing.”

“You know, you will see gays being thrown off the roof in ISIS-controlled territories. But this has nothing to do with terrorism. This is mainstream Muslim culture. Your religion does it everywhere your religion exists. It is a threat, an existential threat.”

“Muslims and Jews, both people of the book, if we have a relationship as Christians with any other faith, we have it as much with Muslims as we do with Jews. And, you know, frankly, some of their morality and some of their prescriptions about daily life have a lot more in common with a traditional Catholic than any Jewish teaching I’ve ever heard.”

“Yeah. The growth of Islam should be one of the most disturbing things for everybody in this room. Here is a religion that forces women into submission, that executes homosexuals, that tries to kill non-believers.”

“They’re actually here. They mean business, and they’re spreading. Islam preys on the most vulnerable people in society.”

“Everywhere there is Islam, you will find…”

So, the last clip was him in a mosque, actually, in a Muslim worship service, I guess you call it, over in England.

And everything he said about Islam is factual. They throw acid in their daughters’ faces if they dishonor them in some way. Women live as subservient slaves. Homosexuals are killed.

What he did, well, I guess he did say you could be killed for changing your faith in 12 countries. If you convert to Christianity, the punishment is murder. That’s including Tucker Carlson’s favorite country of Qatar. Yes, capital punishment if a Muslim converts to Christianity in Qatar.

Pastor Arrested for Criticizing Islam While Mosque Prayers Blast Freely →

So why did he convert?

My honest opinion, I don’t know the man’s heart, but just watching these influencers throughout the years, it’s very popular now, and he’s an influencer. He wants popularity.

You know, after 9/11, it was popular to point out the evils of Islam, which he pointed out very well, better than anyone I’ve heard.

But today, you see online there’s a different zeitgeist, as they call it, like what’s popular.

So, before I get to Islam here in a second. Well, first let me get to Islam.

You’ll see it. People made a drastic change. People’s heads spun when Tucker Carlson changed and is pro-Islamic. Michael Lofton on Reason & Theology changed on a dime, and they’re all saying the same thing.

Two of their arguments are, right now, it’s popular to be anti-Zionist. So we go from anti-Zionist to pro-Islamist. It’s a very easy bridge to cross.

And they bring their followers, like mindless sheeple, to follow them and believe their false beliefs.

So I’m going to hit their two biggest lies right now.

Israel is an apartheid state.

So, an apartheid state means everybody but Jews is treated differently. They’re second-class citizens, like South Africa was for many years with blacks and whites.

But here are the facts.

Here are the facts. These people never give you the facts. They give you conspiracy theories. I’m just going to give you the facts.

You Cannot Be Catholic and Anti-Semitic: Antisemitism in America, Zionism and the Catholic Church →

Milo Yanapolis Converts To Islam !

In Israel, 180,000 Christians live there. One hundred percent of them are citizens.

In Qatar, this is, you know, one of the moderate Muslim nations in the world. There’s about the same 180,000 Christians. Zero percent of them are citizens. They’re not treated like citizens. They’re not treated well.

In Israel, you have Christians. Okay, I’m sorry. In Israel, you have 1.8 million Muslims.

Yes. 1.8 million Muslims live inside of Israel. How many of them are citizens?

One hundred percent.

You have Muslims and Christians in the Knesset serving. This is why you’ll get a lot of Israelis. You often will say, “This Israeli is criticizing Netanyahu.”

Yeah, because he’s a Muslim. Because they do have free speech in Israel. Unlike Qatar, Gaza, and Iran, they have free speech.

In Israel, these are facts. The Knesset has Christians and Muslims serving. And the Knesset, again, it’s like our parliament, our Congress, or England’s parliament. They’re in the government.

Christians and Muslims also serve on the courts.

And Qatar, again, I’m using Qatar because it’s Tucker Carlson’s favorite source of income these days and his favorite country. He thinks they’re wonderful, and supposedly they’re moderate compared to Iran and everybody else.

In Qatar, there’s zero serving in any government position. It’s zero percent.

So that’s apartheid. So that’s a lie from the pit of hell.

And then this genocide. Lofton, Tucker Carlson, and all these guys love to call Israel a genocidal nation.

Here’s a fact. This is from the Gaza Health Ministry, which is run by Hamas. Well, most experts and scholars say it’s greatly exaggerated, but they say from the war 3% of Gazans were killed.

This is a war initiated by Hamas. That’s a fact. They attacked on October 7th.

But from 2005, when Israel gave Gaza to the Palestinians and America gave tons of money to the Palestinians to vote for their own people and they’ll run it, from 2005, where they had total control, they voted for Hamas to be their government.

Go figure.

From 2005 to right before the war, or actually to today, the population has grown from 1.3 million in 2005 to 2.3 million today.

And that’s with Hamas bombing schools, daycares, for 20 years, 10,000 rockets at a time that they’ve got from Iran, you know, because they had the money from us to buy them.

And still, their population grew because when Israel hit back, you know, they would hit back, but they didn’t invade like they did after October 7th.

But a genocide means you’re wiping out the population.

So, when Israel gave control of Gaza to the Palestinians in 2005, then they voted for Hamas, I believe in 2006, by the time they got their elections ready, their population grew by over a million people.

That’s not a genocide.

And then after, like I said, according to Hamas, after October 7th, from 2023 to today, 3% of their population was killed.

Now, you never hear Lofton, Carlson, or Milo talking about Armenia in 2022. The Muslims said they wanted a genocide. Went in and killed 150,000 Christians.

Yeah.

And you know the percent that were wiped out? You know what the percent of Armenian Christians in Azerbaijan? Ninety-nine percent.

That’s a genocide.

And you hear nobody talking about it.

Why? Because Muslims killed Christians.

Iran Accused of Killing 33 Christian Pastors While Courting U.S. Influencers →

And nobody’s paying YouTubers to tell you that. They’re paying YouTubers to tell you Israel is an apartheid, Zionist, genocidal state.

Follow the money.

St. Paul says it clearly: “For the love of money is the root of all kinds of evil.”

Trump Could Soon Gain a 100% Tariff Lever Over Russian Oil Buyers

Tom Langsford
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Trump Could Soon Gain a 100% Tariff Lever Over Russian Oil Buyers

Congress has sent President Donald Trump legislation which would enable additional tariffs of up to 100 per cent on goods coming from the major buyers of Russian energy. The aim of this policy is to apply pressure on Moscow, but its greatest challenge will be determining whether Washington can influence India and China without disrupting global trade or causing energy costs to rise.

The United States is advancing towards employing one of its most aggressive economic measures so far against countries that still engage in energy dealings with Russia. On September 16 the House of Representatives voted by 262 to 159 in favour of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 and forwarded the bill to Trump after the Senate had approved it 86 to 11 in August. The bill focuses on Russia’s energy and defence industries, its financial networks and also on its so-called shadow fleet of tankers which are used to transport oil despite the existing restrictions.

However, the most important aspect of the legislation might not be a sanction actually imposed on Russia. The influence that Washington could obtain from countries which keep buying Russian energy is considerable. According to an analysis by the Congressional Research Service of the legislation, the president might levy extra tariffs ranging from more than zero per cent up to 100 per cent on goods imported from certain countries that are identified as the major buyers of Russian crude oil or natural gas and also as the major facilitators of evasion of Russian oil sanctions. These tariffs would be imposed in addition to any other applicable tariffs.

What this means is that the legislation is not simply aimed at making it more difficult for Russian oil to be sold; it might force some of the world’s biggest economies to decide if it is worth risking much higher costs when selling their goods into the United States in order to gain access to discounted Russian energy.

Russia’s 17-Year Oil Production Low Hides a Bigger Budget Trap →

The strategy is important since oil is still one of the basic elements of Russia’s capacity to generate revenue abroad. The legislation is trying to deal with that system from two sides: it is applying extra pressure directly on the Russian energy and related financial networks and it is also setting up a possible economic penalty for other countries which still assist Russian oil in getting access to the world markets. According to a study by Congress, the secondary-tariff provisions apply to the five largest importers of Russian-origin crude oil or natural gas and the five countries deemed to be most involved in helping to evade the sanctions on Russian oil.

The exact tariff would not, however, be set at 100% automatically. The legislation would allow the executive branch a great deal of discretion in determining the rate. According to the Congressional Research Service, the administration could adjust the tariffs between a rate above zero and 100% depending in part on whether a country takes “significant steps” to either increase or decrease its purchases of Russian energy. The legislation does not give an exact definition of what is meant by “significant steps”. That point is important: while a 100 per cent tariff represents the highest possible rate, it does not mean that every country affected will have to face that rate.

It could therefore serve just as well as a means of negotiation as a trade restriction, Washington being in a position to increase or decrease the economic cost according to how governments change their purchases of Russian energy. Moscow is already objecting. Dmitry Peskov, a spokesperson for the Kremlin, stated on September 17 that further U.S. sanctions would make it more difficult to arrive at a peace settlement in Ukraine and described the legislation as an “unfriendly” action. Those remarks came at a time when the U.S.-mediated efforts to move forward with the negotiations had come to a standstill.

The military conflict was also continuing at a high intensity. Russia carried out an overnight attack on Ukraine by launching missiles and nearly 160 drones, Ukraine’s air force said. Over 20 people were reported to have been injured and, in response to a separate Russian attack in western Ukraine close to the Polish border, Poland got its military aircraft airborne. Polish authorities stated that no infringement of Polish airspace had been recorded. The fact that the attacks took place does not prove that they were a reaction to the congressional vote; it does, on the other hand, indicate the circumstances under which Washington is considering another major increase in economic pressure.

Trump Tariffs Explained: A No-Nonsense Breakdown of How They Affect You →

The expression “100 per cent tariff” can make it appear as though Washington is imposing a tax directly on Russian oil. The mechanism is broader. Under the secondary-tariff provisions the United States had the possibility of imposing duties on goods coming from countries that are the subject of the legislation. This gives it leverage since an economy which purchases Russian energy may also place heavy reliance on access to American consumers.

India makes the dilemma obvious. According to official data quoted by Reuters, the United States was India’s biggest destination for exports, the value of Indian exports to the U.S. amounting to $42.79 billion from April to August as compared with $40.39 billion in the corresponding period the previous year. India is also the third-largest importer of oil in the world and is still one of the major buyers of Russian crude. New Delhi reacted promptly to the congressional action.

The foreign ministry of India stated that the country is still “firmly committed” to ensuring energy security and will keep on purchasing from a range of suppliers depending on market conditions. It added that India had previously warned U.S. officials of the possible effects on the bilateral relationship and the international energy markets and that it would take the necessary steps to safeguard its trade and economic interests. China has likewise raised an objection. According to a spokesperson of the Chinese foreign ministry, Beijing opposes what it sees as long-arm jurisdiction since it does not have the approval of the United Nations Security Council.

That presents the main political issue for Washington. Secondary tariffs are intended to make it more expensive to buy Russian energy indirectly, but if the major economies instead resist than change their suppliers, the conflict could shift from a dispute over sanctions to a much wider trade confrontation.

Why U.S. Ethanol Is Being Excluded from India’s E20 Fuel →

The fact that energy prices are involved makes the calculation even more complicated. Oil is currently trading above $100 per barrel due to the conflict and the disruptions to infrastructure in the Middle East. On September 17 at 12.03 p.m. Eastern Time, the price of Brent crude was about $103.13 per barrel and that of West Texas Intermediate was $100.82, even though both reference prices had dropped during the session.

The additional crude oil shipments from Saudi Arabia via Oman have meant that concerns about shortages have been allayed in the short term. However, according to analysts interviewed by Reuters, the physical oil markets are still tight and problems relating to Saudi infrastructure, the Strait of Hormuz, shipping in the Red Sea and Russian refining capacity continue to impact the market.

That forms the most powerful counterargument against quickly restricting Russian barrels. Global crude oil prices could go up if India, China and other large buyers greatly cut back on their purchases at a time when other sources of supply are already strained, and Russian oil might also be channeled via different intermediaries rather than vanish completely from the market.

People who support the legislation say that this is exactly the reason why secondary pressure is needed. The aim is to reduce Moscow’s capacity to finance the war by getting countries and companies outside Russia to decide between going on with their energy transactions with Russia and keeping favourable access to the U.S. market. The legislation was approved by both chambers with the backing of lawmakers from both parties, even though some House Democrats opposed it on the grounds that it gives too much tariff power to the president and includes wide presidential discretion regarding implementation.

The true economic effect therefore will depend on the situation that arises after the legislation gets to Trump’s desk. Although the maximum tariff rate is dramatic, the more significant issues are the countries that the administration decides to include, the tariff rates it selects, the exemptions or reductions it allows, and whether countries like India and China alter their energy buying behaviour. If Trump approves the legislation and makes heavy use of that authority, Washington will be taking on a task greater than simply imposing another round of sanctions on Moscow.

The test will be to see if access to the American consumer market can be used as a means of altering the energy policy of some of the world’s largest economies. Since oil has already reached above $100, and since India has warned that its economic interests are in danger, China has rejected the policy’s extraterritorial application and Russia has said that further sanctions could hinder the peace efforts, the next phase of the Ukraine conflict might increasingly be fought through the use of tariffs, tankers and trade flows as well as on the battlefield.

The Fed Hiked in Washington. Mumbai Reprices by Morning

Tim Gocklin, MBA, MSF
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The Fed Hiked in Washington. Mumbai Reprices by Morning

The Federal Reserve’s interest rate rise took place in Washington, and Mumbai adjusted its prices by morning.

The Federal Reserve’s decisions don’t end with Wall Street either; higher U.S. interest rates can influence where global investors place their money, strengthen the dollar, put pressure on the rupee, and affect how much investors are willing to pay for Indian stocks before the Nifty and Sensex even reopen.

The Indian stock market had closed on September 16 when the Federal Reserve made a decision capable of affecting the following trading day in Mumbai. The Federal Reserve increased its benchmark interest rate range by 25 basis points to 3.75% to 4.00%, its first increase since 2023. The decision was unanimous, 12-0. U.S. stocks had some difficulty in understanding the announcement at first before ending the day lower, the Dow dropping by 1.21 per cent, the S&P 500 falling 0.45 per cent and the Nasdaq Composite finishing almost unchanged, as reported by Reuters in its coverage of the global market reaction.

In India, the session had been completed thousands of miles away several hours before. The Nifty 50 increased by 0.43 per cent to 23,217.60 and the BSE Sensex rose by 0.45 per cent to 74,336.45, but according to Reuters the rally had already been held back by concerns regarding the upcoming Fed decision and the high oil prices. It is for this reason that Indian financial television dedicates so much time to discussing Washington. The Federal Reserve announces its major decisions at 2 p.m. Eastern Time, which was 11:30 p.m. in India during this meeting. When American investors have reacted, it is time for Mumbai to go to sleep. When India’s market resumes trading, it will need to make up for the lost ground.

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The very first link between Wall Street and Mumbai is money. If interest rates in the United States go up, Treasury securities become an attractive option for investors since they provide a higher return together with a low level of credit risk. This in turn affects the way global funds decide whether to hold a U.S. bond, an S&P 500 stock or an Indian equity.

It is not necessary for all foreign investors to sell in order for the effect to be significant. A small change in behaviour can reduce demand for Indian shares, especially since global investors are already concerned about oil, inflation or currency risk. The Reserve Bank of India has identified volatility in portfolio capital flows caused by global spillovers as a major source of exchange-rate volatility in India; the RBI’s research in particular shows that periods of synchronized global monetary tightening are times when pressure on Indian financial conditions increases.

This sets off a chain reaction. Higher interest rates in the United States make American assets comparatively more attractive. Foreign capital may then become more selective when it comes to India. A stronger dollar can put pressure on the rupee. If the rupee weakens, imported goods will become more expensive. Indian bond yields can go up as investors require greater compensation. And higher yields can in turn lead to lower valuations being assigned by investors to stocks. A decision by the Fed in Washington can thus have an effect on an Indian company which has never sold any of its products in the United States.

Indian Rupee Whiplash Shows How Fragile Currency Confidence Has Become →

At this moment the currency channel is particularly important. Before the Fed made its decision, the Indian rupee was around a six-week low at about 95.96 to the dollar. According to Reuters, the state-owned banks were selling dollars in transactions which the traders thought showed that the Reserve Bank of India had intervened. The Fed was not the only source of pressure; oil prices exceeding $100 per barrel were contributing as well.

It is important because India purchases large quantities of energy from other countries. The government’s Petroleum Planning and Analysis Cell monitors the major ongoing imports of crude oil, which means that the dollar price of energy is a key macroeconomic factor for the country. Consider it to be a case of two exchange rates. If the price of oil rises when measured in dollars and at the same time the dollar grows stronger relative to the rupee, India may see a greater increase in its effective energy bill, this in turn impacting transportation and manufacturing costs, corporate profit margins and inflation expectations.

Indian shares could eventually be affected by those pressures. Companies such as airlines, car manufacturers, consumer goods firms and other businesses which are sensitive to fuel costs or rely on imported inputs may end up with higher expenses. Banks can be affected if high domestic interest rates continue for a longer period. Companies that are currently highly valued might come under pressure since investors will discount the firms’ future earnings at higher interest rates.

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There is also a direct connection to Wall Street valuation. Following the Fed’s announcement, the U.S. two-year Treasury yield increased and the benchmark 10-year yield reached about 5%. The dollar also appreciated, as reported by Reuters’ global market coverage. The importance of those figures is felt by both markets since stocks and bonds are competing for capital.

Since investors can obtain about 5% from a U.S. Treasury security, an expensive stock in New York must offer a sufficient amount of expected growth in order to make it worthwhile to take on extra risk. The same reasoning applies to capital around the world; an Indian stock too must provide an attractive enough expected return in order to compensate a foreign investor for the risks of equity, currency and exposure to emerging markets. That is why increasing American bond yields can have an effect on both the S&P 500 and the Nifty 50 even though the two indexes consist of completely different companies.

The fact that there is a connection does not imply that the indexes always change by the same percentage or even in the same direction; it only means that the price of global capital has changed for both of them.

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There is a significant reason why one should not exaggerate the control that Wall Street has over India. India now has a considerably bigger domestic investor base which is able to absorb at least some of the foreign selling. The Association of Mutual Funds in India recorded a record ₹32,297 crore in systematic investment plan contributions during August, and Reuters stated that total equity mutual-fund inflows rose by 18.8% compared with July.

The fact that domestic money is important. It was possible twenty years ago for fluctuations in foreign institutional capital to have an even more significant impact on Indian equities. Nowadays, millions of Indian households make regular investments via mutual funds and SIPs. This means there is a demand source which will not vanish even if the Federal Reserve increases its rates by 25 basis points.

India has also recently seen a revival of foreign interest. As international capital has returned to a number of Asian markets, foreign investors bought approximately $3.1 billion worth of Indian equities, Reuters says in its analysis of Asian portfolio flows. The right conclusion therefore is that the Fed does not control India’s stock market. The fact is that the Fed alters the terms on which Indian stocks are priced. That distinction matters.

India Rupee Record Low Shakes Markets →

The example of the connection is unusually clear in the trading sessions of September 16. Before the Fed made its announcement, Mumbai ended the day with only small gains. Hours later, Washington increased interest rates, which caused U.S. Treasury yields to go up, the dollar to strengthen, and Wall Street to close down. India was not able to respond since its exchanges were already closed.

The following Indian session is therefore included in the same global trade. Investors will keep an eye on whether foreign funds move out of Indian equities, whether the rupee faces further pressure, whether yields on Indian bonds go up and which sectors are affected the most. They will also monitor Wall Street since another fall in U.S. stocks can strengthen global risk aversion, while a recovery can lessen it.

Although the Federal Reserve is America’s central bank, the dollar is still the central currency in global finance. Which is why a decision announced in Washington in the late hours of the night will be one of the most important stories on Dalal Street the next morning.

Follow TerreneGlobe as we keep an eye on what happens next to the Nifty, Sensex, S&P 500, Treasury yields and the rupee. The Fed carried out its action in Washington. The key question now is how Mumbai will price it.

Deion Sanders Prayed in Tongues. Paul Said Don’t Forbid It

Emma Whitfield
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Deion Sanders Prayed in Tongues. Paul Said Don’t Forbid It

Deion Sanders prayed in tongues. The Bible does not say that you should forbid it

The viral prayer of Deion Sanders has once again sparked an old debate within Christianity. However, anyone who argues that speaking in tongues is simply “not biblical” must face the fact that Acts, the letters of Paul, Pentecostal Christianity, and the present-day charismatic movement all contradict that view.

When Deion Sanders had just seen Colorado beat Weber State 52 to 21, he sat down before the reporters and carried out an action which very quickly took centre stage instead of the football match. Before responding to the questions, the head coach of Colorado uttered some words which the reporters could not understand. When it was shared online, Christians began to debate whether Sanders had actually prayed in tongues or had instead taken part in something not based on the Bible. The University of Colorado’s official game report verifies Colorado’s 52-21 win, together with Sanders’s subsequent explanation of what had taken place.

According to reporting on Sanders’ September 15 press conference, Sanders stated that he had given his team a strong briefing and needed to calm down before making a public speech. “The only way I know how to calm down is to pray in the spirit,” Sanders said, and he dismissed the notion that it was a gimmick, adding that he loved the Lord with all his heart. That makes the main question change. Sanders states that he was praying. The more significant point is whether Christianity has a biblical basis for what he described. When it comes to that question, Scripture should receive more attention than social media.

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The practice of speaking in tongues did not originate with modern televangelists or Pentecostal churches; it is already mentioned in the New Testament. The best-known instance was at Pentecost. As stated in the U.S. Conference of Catholic Bishops’ text and commentary on Acts 2, the disciples were filled with the Holy Spirit and “began to speak in different tongues” thanks to the Spirit. Then people coming from various nations heard the disciples declaring God’s mighty deeds. The phenomenon is clearly linked with the Holy Spirit; Luke does not regard it as merely meaningless noise or spiritual confusion, but sees it as an action carried out by God.

Tongues do not vanish after Pentecost. In Acts 10, the household of Cornelius receives the Holy Spirit and begins to speak in tongues while glorifying God; in Acts 19, another group receives the Holy Spirit after Paul has laid his hands on them and then speaks in tongues and prophesies. It leads to a difficulty in maintaining the usual response to Sanders. Although Christians may discuss whether Sanders’ particular experience was genuine, the Bible itself encourages discernment. Yet the general assertion that speaking in tongues is against the Bible goes against several accounts in the New Testament. Paul thus strengthens his argument.

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The book of First Corinthians is important since Paul does not just give an account of tongues as a matter which took place in the past; he shows Christians how the gift should function. In 1 Corinthians 14, Paul states that a person who speaks in tongues is not speaking to other people but to God and that such a person “utters mysteries in spirit”; he also says that the person who speaks in tongues is edified. The passage is particularly relevant to Sanders’ explanation. Sanders never stated that he was giving the reporters a prophetic message; instead, he said that he was praying. Paul speaks about praying “in a tongue” and then adds that he will pray with the spirit as well as with the mind.

It doesn’t follow that each unexplained utterance should be automatically regarded as supernatural. Christianity doesn’t demand gullibility; what it does require is recognition that prayer in tongues has a clear basis in the New Testament. Paul also sets limits on the practice. The Bible states in verses 26 to 28 of 1 Corinthians 14 that there should be interpretation and order when speaking in tongues in a church meeting; and if there is no interpreter, Paul advises that the speaker should be quiet in the church and speak only to himself and to God. That is no prohibition. It is regulation.

Paul ends the chapter with an unusually direct command: “do not forbid speaking in tongues.” He then stresses that all things must be carried out in an appropriate and orderly manner. A biblical view therefore involves both of these ideas: Christians must not fabricate spiritual gifts, cause chaos, or use tongues in order to draw attention to themselves, but they should also not automatically condemn a gift about which Paul explicitly instructs believers not to forbid.

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Sanders’ experience seems no more to have been made up for one press conference that went viral. In 2022 Sanders stated that he had spoken in tongues while going through a terrifying hospital experience caused by serious blood clots. According to The Christian Post’s report on Sanders’ testimony, Sanders recalled praying and praising Jesus and also speaking in tongues at a time when he was suffering from serious health problems. The history is important because it does not demonstrate that each of the spiritual experiences Sanders describes is supernatural; no outsider could establish that on the basis of a video clip. Yet it does indicate that the practice was already an element of his Christian life well before the most recent press conference.

Tongues are also far more extensive than Sanders’. The official Statement of Fundamental Truths of the Assemblies of God refers to speaking in tongues as being connected with the work of the Holy Spirit and gives Acts and First Corinthians as support for this. Charismatic prayer is also found within Catholic Christianity. In his 2014 address to the Catholic Charismatic Renewal, Pope Francis remembered celebrating Mass with charismatic Catholics in Buenos Aires and spoke about instances of “adoration in tongues.” He called the charismatic renewal a current of grace within the Church. It doesn’t mean that all Christian traditions interpret tongues in the same way; in fact, they don’t.

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The most forceful objection ought still to be taken seriously. A number of Christians think that miraculous gifts like glossolalia were mainly meant for the apostolic era, while others hold the view that glossolalia could still continue, though they argue that contemporary practices generally do not resemble the situation in Acts 2, where people were able to understand real human languages. Paul also cautions against disorder; and if a person delivers a message in tongues to a congregation, as First Corinthians 14 states, it must be interpreted and it must be insisted that Christian worship should remain understandable and orderly.

Those concerns matter. However, they do not remove the rest of Paul’s teaching. In Acts 2 languages which are recognizable are described, while in 1 Corinthians 14 Paul speaks about prayer in a tongue, personal spiritual edification, interpretation, public worship and private speech to God. Even though there are disagreements among Christians about how those passages apply in today’s world, the discussion in the New Testament goes beyond the idea that every valid case of speaking in tongues must be exactly like what happened at Pentecost. Which is why Sanders’ explanation should be subject to serious theological consideration rather than being ridiculed immediately.

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It is also interesting to note how quickly Sanders’ prayer became controversial. A coach playing football might scream from the sidelines, argue with the officials, or give an emotional speech to his team without triggering a nationwide theological discussion. But a few seconds of clear Christian spiritual expression can instead produce a completely different response. The discomfort in question is nothing new. At the time of Pentecost some people ridiculed the disciples and said that they were drunk. Instead of apologising for the supernatural character of Christianity, Peter explained what he thought God was doing through Jesus Christ and the Holy Spirit.

That does not establish that Sanders actually underwent the same experience as the apostles at Pentecost. It is wrong for Christians to base their theology on a celebrity. Christians have no reason to believe that tongues are possible merely on the basis of Sanders. Scripture is the basis. The book of Acts frequently gives accounts of believers speaking in tongues. Paul regards the gift of tongues as one of the spiritual gifts. He also talks about praying in a tongue and he sets out rules concerning the practice so that order is maintained in Christian worship.

Then, after all his warnings and instructions, Paul leaves Christians with a remarkably clear command: “do not forbid speaking in tongues.” Deion Sanders might be the reason the internet is once again sparking a debate about an ancient Christian practice; if that controversy leads Christians to turn back to Scripture, the situation could ultimately be significant for reasons that go well beyond football.

Kraft, Macklemore and the $10.6 Billion Power of NFL Stadiums

Tom Langsford
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Kraft, Macklemore and the $10.6 Billion Power of NFL Stadiums

A Lesson Worth $10.6 Billion About NFL Stadium Power Involving Kraft and Macklemore

At first sight the controversy involving Robert Kraft and Macklemore appears to be about music and politics, but when you look at the financial aspects it becomes clear that the modern NFL involves team owners exercising control over assets which go well beyond football.

Robert Kraft, owner of the New England Patriots, has stated that Gillette Stadium will not permit Macklemore to serve as an opening act at Ed Sheeran’s concerts on September 25 and 26. This decision comes after Macklemore made pro-Palestinian comments during Ed Sheeran’s performance at MetLife Stadium on September 4. Kraft explained that the stadium felt that Macklemore’s recent performances, along with what he referred to as a wider history of antisemitic rhetoric, went beyond the venue’s policy regarding hate speech. Macklemore disagrees with the description of his advocacy as antisemitic.

The political aspect of the dispute has attracted the most attention. As for the financial situation, Kraft owns an NFL team for which Forbes now gives a value of $10.6 billion, and Gillette Stadium also functions as a major concert venue and thus has the ability to affect decisions concerning some of the biggest entertainers. Forbes has estimated that the Patriots earned $784 million in revenue and $186 million in operating income during the most recent season. The combination of owning football teams, controlling the stadiums, having media exposure and offering live entertainment has turned NFL owners into something resembling operators of diversified entertainment platforms.

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Macklemore was due to take part in eight of the remaining ten U.S. dates of Sheeran’s Loop Tour. The tour’s promoter, the Messina Touring Group, stated that several of the upcoming venues had informed them that they would not have concerts featuring Macklemore, which could lead to the cancellation of the shows and “impact hundreds of thousands of fans.” Forbes reported on Macklemore’s allegations and the dispute surrounding the remaining tour dates.

Macklemore stated that Sheeran had told him that Kraft had gotten in touch with other stadium owners and had helped to organize opposition to Macklemore’s continued participation on the tour. While Kraft did confirm his decision about Gillette Stadium, he did not publicly deal with Macklemore’s wider assertion that he had mobilized the other venue owners. In addition, the promoter independently confirmed that several venues had objected to Macklemore staying on the tour.

Sheeran has likewise denied that he was the one who made the final decision. He stated, “Macklemore coming off tour was the promoter’s decision; it was not mine.” He also said that the venues had warned that their forthcoming shows could be cancelled if Macklemore stayed, and that he had tried to act as a mediator between the two sides before the promoter reached its decision. Reuters reported Sheeran’s account of how the decision was made.

From a business point of view, the episode takes on unusually great importance. A stadium is more than just the building in which an NFL team plays eight or nine of its regular-season home games; modern stadium finances take into account concerts, sponsorships, premium seating, hospitality, naming rights and other events. When Forbes calculates franchise economics, it includes the revenue from non-NFL events at the stadium which goes to the team owners. It follows that if one has control of a stadium then one also has control of an extremely valuable part of the live-entertainment supply chain.

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The figures associated with the NFL make that power easier to understand. Forbes has estimated that the average NFL franchise is now worth $9.5 billion, which represents a 34% increase on the figure of $7.1 billion from 2025; ten teams have values exceeding $10 billion, and the Dallas Cowboys alone are estimated at $17 billion having generated nearly $1.28 billion in annual revenue. Those figures show how quickly NFL franchises have moved into a class of assets once associated mainly with major corporations and financial institutions.

Although S&P Global Market Intelligence had arrived at slightly different individual valuation figures based on its own method, it still came to the same general conclusion that the value of the NFL has increased significantly as a result of growth in media rights, private capital, ticket revenue and investors paying ever-larger multiples for the scarce franchises. The company stated that the NFL’s shared revenue has exceeded $14 billion.

The Patriots show how greatly that wealth has increased. In 1994 Kraft purchased the team for $172 million; Forbes currently values it at $10.6 billion, which is more than 60 times the original purchase price even without taking into account the cash the team has generated over the decades. It doesn’t indicate that Kraft’s decision about Macklemore was mainly based on financial considerations. While Kraft has stated the reason for his decision was concerns regarding venue standards and antisemitism, Macklemore sees his performances as constituting advocacy for the Palestinians. These positions are strongly contested, and the evidence currently available does not show that economic factors were the motive behind Kraft’s decision.

What the episode shows is the great amount of commercial authority that stadium ownership now has.

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The financial consequences did not stop when Macklemore had left the tour. Finneas, Lukas Graham, Aaron Rowe and Beoga then pulled out of their forthcoming performances after Macklemore was removed. The reasons they gave were based on their objection to the decision and their support for Macklemore’s ability to express his views. The Associated Press reported on the withdrawals and the growing fallout surrounding the tour.

Fans have also asked for their money to be refunded, though there is still no reliable public information available regarding the number of tickets that have actually been refunded or the total financial impact the controversy will have on the tour. This difference is important because online anger can create a great deal of attention without necessarily resulting in an equivalent financial loss. Business Insider reported on the fan reaction and refund requests surrounding the controversy.

On September 16 Macklemore included a further financial aspect by announcing that he would donate $1 million, money which he said came from his earnings on the tour, to six organisations offering aid to the Palestinians. He also made a public request for Kraft to match this donation. Although the donation does not settle the dispute, it changes what had originally been an argument about a concert appearance into a highly visible exchange involving money, philanthropy and reputation. People reported on Macklemore’s announcement.

The most forceful objection to the view that this shows the NFL having new financial power is the fact that venue owners have always had the right to choose which performers they will host. Since stadiums are private commercial properties governed by contracts, security regulations and concerns about their reputation, it is not itself a new business model for owners to refuse to host performers. The difference lies in the size of the assets in question.

An NFL owner is now in a position to control a franchise valued at over $10 billion, to manage one of the biggest entertainment venues in a major metropolitan area, and to take part in an industry in which the loss of a number of stadium dates could have an impact on hundreds of thousands of ticket holders. The football team and the concert venue are becoming more and more part of the same financial ecosystem. The issue involving Macklemore therefore shows something more extensive than who was correct in a political debate.

NFL stadiums now act as economic bottlenecks in the field of American entertainment. The franchises in the league are moving towards institutional-asset valuations, the stadiums stage global artists outside of the football season, and the people in control of those stadiums are able to make decisions that can almost immediately reshape multimillion-dollar touring operations.

In 1994 Kraft purchased a football team for $172 million. Now, thirty years on, the business associated with the team has become so significant that a dispute about a single opening act can have effects that spread across a national stadium tour. That is probably the aspect of the whole controversy that has the greatest financial interest.

The Iran War Is Redistributing Global Wealth, and Few Countries Are Winning

Daniel Whitaker
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The Iran War Is Redistributing Global Wealth, and Few Countries Are Winning

The war which involves Iran, the United States and Israel is not merely a matter of economic concern in the Middle East any longer; it has now become a global distribution of costs. Nations that import large amounts of oil have to pay higher prices for fuel, freight and industrial inputs, while certain energy exporters are getting more money for each barrel they are able to get to market. The surprising thing is that even in the face of higher oil prices there have been few clean winners.

On September 16 Brent crude reached $105.83 per barrel and West Texas Intermediate $102.43, and shipping via the Strait of Hormuz continued to be very heavily restricted. On September 15 only four ships were spotted going through the Strait, as compared with an average of 18 over the previous 10 days. According to the International Energy Agency’s September Oil Market Report, global oil stocks have dropped by 507 million barrels since February, and the world’s oil supply is now anticipated to decrease by 5.7 million barrels per day in 2026. Reuters also reported the latest crude prices and restrictions affecting regional energy flows.

The Iran war is therefore more than just a spike in oil prices; it is altering the way purchasing power is distributed among countries, affecting trade balances, putting pressure on currencies, and forcing central banks to deal with inflation which they themselves have not caused.

Country snapshot so far:

  • Iran: Negative. The effect of the war, the sanctions and the restrictions placed on oil exports has been to cause the domestic economy to contract.
  • United States: Negative for consumers and a large number of businesses since gasoline, diesel, and inflation rise, though domestic refiners and producers may benefit from the higher margins.
  • China: Negative energy shock, but this effect has been greatly reduced due to its inventories, domestic production, lower oil consumption and the use of alternative energy sources.
  • India: Negative due to the high cost of imported crude oil, inflationary pressures and a weaker rupee, even though economic growth remains relatively strong.
  • Japan: Negative through its import bill, with a trade deficit of ¥1.106 trillion in August due to the rise in oil prices.
  • Germany: Negative due to higher energy costs, weaker household purchasing power, and a slower recovery.
  • Saudi Arabia: Mixed. Although higher oil prices have brought in a substantial amount of revenue, lower export volumes and the attacks on energy infrastructure are increasingly posing a threat to that benefit.

The Oil Market’s Worst Nightmare Is the Strait of Hormuz →

The economic system starts with a single narrow water route; prior to the outbreak of war on February 28, approximately 20 million barrels per day of crude oil and petroleum products usually passed through the Strait of Hormuz, which amounted to about one-fifth of global oil consumption. The International Energy Agency refers to the present disruption as the greatest oil supply interruption in the history of the world market.

At first, the shock was taken in part by emergency stockpiles, lower demand, the use of alternative shipping routes and increased production outside the Gulf area. However, these buffers are now growing thinner. The IEA says that more than 10 million barrels per day of production from the Gulf had still been halted in August, and diesel and other refined products have become considerably more scarce than crude oil. According to the agency, U.S. diesel prices in early September were almost twice what they had been before the war.

The global economy has still managed to avoid a wide-scale collapse. In its July update of the World Economic Outlook, the International Monetary Fund forecast global growth at 3.0% in 2026 and 3.4% in 2027, although it emphasized that the effects are very uneven. Those countries which import energy are taking the greatest direct blow from the terms-of-trade shock while the economies taking part in the technology boom have been able to offset part of the damage.

The United States shows what happens when a nation manages to produce huge amounts of oil yet still experiences the effects of a price shock. According to the most recent fuel figures from the U.S. Energy Information Administration, regular gasoline averaged $4.319 per gallon on September 14, and on-highway diesel reached $6.285 per gallon. Diesel is particularly significant since it is used to operate trucks, agricultural equipment and industrial machinery, which means that the impact of the shock extends well beyond the gas station.

The Federal Reserve had previously stated that PCE inflation reached 4.1% over the 12 months ending in May, an increase from 2.5% the previous year, partly due to the Middle East energy shock. This situation presents a difficult dilemma since households see their purchasing power decline while at the same time policymakers are under pressure to maintain tight monetary conditions.

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Asia has to shoulder a large share of the financial burden since a great deal of oil from the Gulf in the past has been directed towards the east. The International Energy Agency states that, in 2025, China and India together accounted for about 44% of the crude oil exports going through Hormuz. Although China has coped with the situation better than a simple assessment based on its import dependence would indicate, crude imports in China dropped by 14.6% during the first eight months of 2026 and the shortfall was lessened by the level of its inventories, its domestic energy production and the increasing renewable capacity. Yet, the National Bureau of Statistics of China noted that higher international crude and commodity prices were being passed directly on to Chinese producer prices in August.

The International Monetary Fund is currently expecting Chinese growth to be 4.6% in 2026, higher oil prices being one of the obstacles. Although this represents a financial loss in comparison to a world in which imported energy had remained cheaper, it has not led to a full-blown economic crisis since China has been able to cut down demand and diversify its sources of supply.

India is facing a more immediate currency problem. In the early part of this year the Indian Ministry of Finance stated that the country imported approximately 88.6% of the crude oil it needed, which means that higher global oil prices have a significant impact on inflation and the value of the rupee. On September 16 the rupee was trading at nearly 95.96 against the U.S. dollar, which was about a six-week low, high oil prices being given as one reason for the pressure. Nevertheless the IMF cut its 2026 growth forecast for India by just 0.1 percentage point to 6.4%, indicating that the wider economy has stayed resilient in the face of the energy shock.

Japan is probably the best example of a war showing up in the trade figures of a major economy. Reuters reported that Japanese imports rose by 28% on an annual basis in August, representing their biggest increase in almost four years, because the value of crude oil imports went up by 58.7%. Despite its strong exports, Japan had a trade deficit of ¥1.106 trillion.

Europe is facing the same issue with regard to oil and natural gas. The German Bundesbank has stated that the Middle East energy shock is slowing down the country’s recovery, decreasing household purchasing power and increasing costs for companies which are already encountering supply bottlenecks. Although fiscal spending has managed to alleviate some of this pressure, it is unable to get rid of the basic cost of imported energy.

How Saudia Arabia is Doing Financially with the War →

Saudi Arabia illustrates the reason it is misleading to describe oil-exporting countries as simple winners. In July the International Monetary Fund stated that the higher crude prices were more than offsetting the effect of Saudi Arabia’s reduced export volumes and thus resulted in an oil-revenue windfall. The country has also been able to make use of infrastructure which allows it to go around Hormuz, such as its pipeline running from east to west towards the Red Sea. Nevertheless, the IMF had projected growth of just 1.7% for 2026, the reason being weaker trade, lower oil shipments and pressure on non-oil activities.

The cushion has been less secure in September since attacks on Saudi energy infrastructure disrupted the East-West route and as a result crude oil from Saudi Arabia had to be sent via alternative arrangements through the Sohar port in Oman. Although higher prices still benefit each barrel that gets to the buyers, the inability to reliably move the barrels can quickly nullify part of that benefit. Reuters reported on the disruption and the resulting pressure on Saudi supply routes.

Iran is at the other end of the equation. According to the IMF’s July forecast, the Iranian economy would shrink by 5.4% in 2026, although the estimate had been improved from that in April since some oil exports had done better than expected at the beginning of the conflict. Since then, ongoing fighting, sanctions and restrictions on energy trade have still continued to put pressure on Iran’s access to foreign currency and imported goods.

That is the reason why the financial picture of the Iran conflict is more complex than the idea that ‘oil exporting countries win and oil importing ones lose’. It is true that the importing countries are clearly having to pay a higher energy bill, but producers located within the conflict area are suffering losses in terms of production, infrastructure or shipping capacity. At the same time, countries outside the region which have reliable oil and gas exports are able to benefit from higher prices without themselves experiencing the same level of physical damage.

The most significant figure at the moment might not be the daily price of Brent crude; it could be the 507 million barrels which have already been taken out of global inventories since February. The existing stocks enabled the world to delay some of the economic impact. However, as these buffers shrink, each new disturbance has the possibility of spreading more rapidly from Hormuz through to currencies, inflation, interest rates, corporate margins and household budgets. The IEA’s September Oil Market Report provides the underlying inventory and supply data.

The war in Iran has therefore resulted in the establishment of a form of global energy tax, although this tax is distributed in a highly uneven manner. The United States experiences it at the diesel pump, India feels it in its currency, Japan in its trade deficit, Germany in its industrial and domestic energy costs, China through the imported inputs it uses, Saudi Arabia as a result of a combination of higher prices and damage to its export capacity, and Iran bears the direct economic cost of the conflict.

The more long the Strait of Hormuz stays restricted, the less it appears to be just a temporary oil shock and the more it tends to involve a reorganisation of who pays, who earns and who can bear the cost.

Thailand’s Small Businesses May Have an AI Advantage Big Firms Cannot Buy

Sebastian Wolfe
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Thailand’s Small Businesses May Have an AI Advantage Big Firms Cannot Buy

There is a technological problem facing the small businesses in Thailand which might unexpectedly turn into a technological advantage. The small and medium-sized enterprises in the country are still mostly regarded as “Digital Followers”. The 2025 Digital Maturity Index for Thai SMEs had a score of only 2.45 on a scale of 4.00 according to Thailand’s Electronic Transactions Development Agency. While this represented an improvement of 3.81 percent on the previous year’s figure, the agency noted that a great many businesses were still using technology mainly for things like social media and point-of-sale systems rather than incorporating it thoroughly into data analysis, internal processes and business strategy.

That usually appears to be a disadvantage in a competitive situation, although artificial intelligence might alter the situation. In a recent interview during DEEP TALK in Thailand, Parith Rangsimanond, who is one of the co-founders of Looloo Technology and an expert in AI, stated that small businesses are at times able to change more quickly since they do not have so many outdated systems blocking their way. Instead of taking years to force AI into existing corporate infrastructure that is decades old, a small business might have the opportunity to redesign the whole process based on AI from the start. That would therefore represent a significant change in the economics of technology. For many years the company possessing the largest IT budget had enjoyed a advantage in terms of scale. The AI era, however, might instead reward something else: the company that was able to reorganize most quickly.

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Rangsimanond’s argument goes much further than simply advising employees to use ChatGPT. He says that companies are progressing from individual AI “use cases” to full AI workflows. It may boost the productivity of a single worker if employees are given a chatbot which drafts emails more quickly, but this does not mean that the company as a whole becomes faster. The greater opportunity arises when the departments responsible for purchasing, finance, production, sales and management start exchanging information and responding to one another.

His analogy is very useful; it’s as if you gave every employee a Ferrari yet kept forcing them to drive through the same old intersections. Although the cars become faster, the road system remains unchanged. Genuine transformation is achieved only by rebuilding the highway. A example that is mentioned in the interview relates to procurement. Let’s say that a supplier suddenly informs a company that an important delivery will arrive one month late. In a conventional business, an employee would have to inform finance, production, purchasing and sales individually. Even though each of the departments may already have its own AI software, the links between those systems are still manual. Rangsimanond refers to this human transfer as the “Human API.”

Instead, an integrated AI workflow could detect the delay, rework the production plans, revise the expected cash requirements, warn the sales department and make changes to the purchasing decisions across the company. The fact that there is such a distinction is due to the huge size of Thailand’s SME sector. According to the data on the Thailand’s Office of Small and Medium Enterprises Promotion SME Big Data platform, Thailand had around 3.28 million SMEs in 2025, employing approximately 13.6 million people. Productivity improvements that were even fairly small could become of considerable economic importance when they were spread across that group of employees.

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There is one other reason why the Thai SME story is interesting. The intense international competition in the field of artificial intelligence is generally portrayed in terms of huge sums of money. Microsoft, Amazon, Meta and Alphabet are each investing hundreds of billions of dollars in the infrastructure needed to train and run artificial intelligence systems. According to a recent report by TerreneGlobe, these four companies had announced about $830.5 billion in future payments relating to leases which had not yet started as of June 30, before another roughly $68 billion from Meta’s data centre lease agreements signed in July was taken into account.

The small and medium-sized enterprises in Thailand are engaged in a completely different kind of game. There is no need for them to construct the infrastructure; they can just rent access to it. It therefore means that the substantial AI investments made by the biggest technology companies will eventually make affordable computing power and intelligence available to businesses which themselves could never afford to build such equivalent systems. He uses his family’s fertilizer business as an example. AI can assist in deciding what inventory to buy and when by combining data on purchases, expected payments from customers, warehouse capacity, past sales, and supplier delivery times. What is important here is not merely coming up with a clever AI answer but rather linking together the information which had previously been held in separate sections of the company.

The Thai government’s agencies are at present trying to get small and medium-sized enterprises (SMEs) to adopt digital technologies more thoroughly. In September, ETDA published the results of its SMEs GROWTH 2026 programme, which covered 1,697 SMEs in 16 provinces and included 138 digital service providers. This initiative led to 108 business matches and is estimated to have generated 689.5 million baht in economic and social benefits, of which 530.6 million baht is attributable to the SMEs that took part. The figures do not prove that every small company could suddenly beat a large corporation; they do indicate that Thailand is making an effort to get its small and medium enterprises from just having digital tools to actually reorganising their business processes around those tools.

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It is here that the advantage of being small becomes clear. Large companies usually have much bigger budgets for technology, larger engineering teams and much greater datasets. Yet they also have years’ worth of software integrations, custom enterprise platforms and organizational procedures which cannot easily be replaced. A smaller company could have the other problem. Although its technology might not be as advanced, it could also have less infrastructure to take down.

Rangsimanond makes this point clear in the interview, stating that his fertilizer business could undergo rapid transformation since it was not constrained by extensive legacy systems. Instead, smaller companies might well set up their new reporting, sales and management procedures around AI rather than attempting to get AI to fit in with all the existing practices. Just because of that doesn’t mean that the AI transformation takes place automatically. A serious counterargument can be made to the SME advantage thesis: although having fewer legacy systems may imply having less structured data, it also means possessing weaker cybersecurity, less technical expertise, and a smaller number of employees who are capable of overseeing automated systems.

ETDA’s analysis of the digital transformation of Thai SMEs specifically points out limitations relating to capital, personnel, knowledge, and the ability to choose the right technology; its research shows that whilst SMEs are moving towards digital adoption many have not yet connected their various technologies across the business in a systematic manner. Rangsimanond has also admitted to the gap between discussion and implementation. At an AI seminar held in Bangkok in March 2025, he told The Nation Thailand, “We often discuss the need to embrace AI, but actual implementation is scarce.” That could be the actual point of division.

The rivalry between businesses in the field of artificial intelligence is nowadays probably not going to be decided simply by which ones have access to ChatGPT, Gemini, Claude or some other model, since those tools are now widely available; what will likely provide a more lasting advantage is proprietary information concerning customers, suppliers, prices, inventory and operations, together with a workflow that can act on this information swiftly. In the latter part of the interview, Rangsimanond gives an account similar to this regarding the increasing importance of “small data”. A fertilizer company which slowly learns the preferences and purchasing habits of hundreds of thousands of individual farmers has information that a competitor cannot merely download from the internet, even though AI makes it easier to analyse that information the company still has to gather it.

It presents an unusual opportunity for Thailand. Although their SMEs are lagging behind in terms of traditional digital transformation, some of them may also be less constrained by the systems developed in the earlier technology era. Since powerful AI software keeps becoming cheaper whereas the cost of replacing old corporate infrastructure stays high, smaller businesses might at times be able to leapfrog companies which have considerably larger technology budgets. The following stage in the race involving AI may therefore be less about who owns the most technology and more about who is able to reorganise their business in the quickest way. For the millions of small and medium-sized enterprises in Thailand, being small might end up becoming an aspect of their technology strategy.

September’s Top Stock-Market Sector Is Communication Services, Not Big Tech

Isabella Cortez
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September’s Top Stock-Market Sector Is Communication Services, Not Big Tech

Up to and including September 14, the communication services sector gained about 3.2 per cent while the wider S&P 500 suffered a loss of roughly 0.8 per cent. The 16 per cent increase in Meta’s share price and Alphabet’s rise indicate that investors are starting to distinguish between companies that can take advantage of artificial intelligence and those that bear the greatest costs of building it.

In the first half of September the strongest S&P 500 sector was not information technology but communication services, a sector which now includes some of the largest digital advertising, social media, streaming, search, and internet companies in the world.

The Communication Services Select Sector SPDR Fund, known as XLC, increased in value from $111.46 on August 31 to $115.07 on September 14, which is a gain of approximately 3.24%. During that time the SPDR S&P 500 ETF Trust dropped from $767.05 to $760.88, a decrease of about 0.80%.

The fact is significant since September has not been a straightforward month for growth shares. Information technology as a whole fell by about 1.2% during that time, and semiconductor stocks in particular suffered on September 14. The recent rise in the communication services sector shows that Wall Street is drawing a more detailed distinction within the AI sector. It seems that investors are becoming more ready to reward firms that already have huge audiences, advertising businesses and distribution networks, even as they remain doubtful about how much money should still be invested in the infrastructure supporting AI.

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Meta Platforms is the best example of this. On September 14 it made up 18.94% of the XLC, so it was the fund’s single largest position. The price of its stock was $572.34 on August 31 and rose to $665.60 by September 14, which is an increase of about 16.3% over just nine trading sessions. Meta also went up by 2.71% on September 14 alone.

The strength stemmed from a renewed excitement about Meta’s new personal AI agent, Muse. Muse was officially launched by Meta on September 8 as an agent able to carry out actions for users, not just respond to prompts. On September 9, Meta’s share price rose by 6.55%, and later reports showed that early interest in the product had greatly outstripped the company’s expectations. Muse also provides Meta with another means of generating AI revenue via more sophisticated paid features rather than depending solely on advertising.

The business in question is large enough for that possibility to be significant. Meta announced that its second-quarter revenue was $60.8 billion, a rise of 28% compared with the previous year. Ad impressions went up by 14% and the average price per advertisement rose by 12%. Average daily usage of Meta’s family of apps reached 3.60 billion. Mark Zuckerberg stated that AI was “accelerating our core business today” as well as bringing about new product and enterprise opportunities.

There’s an important exception: Meta’s costs and expenses rose by 55% to $42.0 billion during the quarter, its operating income dropped by 8%, the operating margin decreased from 43% to 31%, and capital expenditures, including payments on finance leases, amounted to $31.08 billion. Meta expects its capital expenditures to be in the range of $130 billion to $145 billion in 2026. The reason for the stock’s rally in September is therefore not merely a wager on AI; it is becoming more and more a bet that Meta will be able to generate sufficient revenue and efficiency so as to justify the huge investment.

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Alphabet is the second company whose impact on the sector’s performance cannot be overlooked. On September 14, Alphabet’s Class A and Class C shares together made up about 18.5% of the XLC. When you add Meta into the mix, the three securities together accounted for around 37.5% of the whole fund.

On August 31, Alphabet Class A shares closed at $339.35 and by September 14 had reached $349.39, representing an increase of just under 3%. While that rise is much smaller than that of Meta, Alphabet’s most recent operating figures offer a solid fundamental reason for why the market is still providing the company with a large amount of AI exposure.

Alphabet announced that its second-quarter revenue reached $119.8 billion, a 24% increase compared to the previous year. Google Services revenue rose by 15% to $94.5 billion, Google Search and other revenue increased by 17%, and advertising revenue from YouTube went up by 13%. The most notable figure was Google Cloud, with its revenue jumping 82% to $24.8 billion. Cloud operating income amounted to $8.8 billion, up from $2.8 billion the year before. The company’s consolidated operating income rose by 30%, and its operating margin climbed to 34%.

The figures show an important fact regarding the present market situation. Alphabet is not merely purchasing chips and building data centres; it already operates businesses that can provide AI infrastructure, AI services, advertising and cloud computing to hundreds of millions of customers and companies. Yet these opportunities come at a high cost since Alphabet raised $49.6 billion by issuing equity and preferred stock in the second quarter, some of the funds being used to expand its AI infrastructure and global computing capacity.

The odd thing happened on September 14 when semiconductor shares dropped because people were calling for AI development to be slowed down and this caused worries regarding future demand for chips; yet Meta increased by 2.7 per cent and Alphabet Class A went up by 3.2 per cent. It seemed that investors had worked out slower AI development might cut down some of the enormous amount of infrastructure spending needed by the big technology companies. To put it plainly, negative news for firms that sell the tools of AI could possibly reduce their largest customers’ future expenses.

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There is, on the other hand, a strong counter-argument against stating that there is a general boom in the communication services sector. Since XLC includes only 24 holdings and Meta and Alphabet together make up over one-third of the fund, a 16% change in Meta can have an unusually big impact on the performance of the sector. The first half of September might be giving investors more information about those two huge digital platforms than about all the individual media, telecommunications or entertainment companies.

It also involves a certain level of risk. While Meta’s revenue is increasing quickly, the most recent quarter revealed a falling operating income and a marked rise in expenses. Although Alphabet’s main operations are expanding rapidly, the company is at the same time raising capital and allocating huge amounts of money to AI infrastructure. Neither company has avoided the key issue facing the AI boom, that is, whether the cash flows in the future will eventually yield adequate returns on the huge investments made today.

The early winner in the September sector therefore sends out a more interesting message than merely indicating that technology shares are rising again. The market seems to be shifting from rewarding AI investment per se to rewarding evidence that AI can in fact be monetized. Meta has advertising, billions of users and is now also involved with Muse. Alphabet has Search, YouTube, Cloud and Gemini. The existing businesses of each company provide it with a number of ways of turning its AI capabilities into revenue.

The situation in the second half of September will show whether this represents a true sector rotation or merely a rally by Meta and Alphabet that is concealed within a sector ETF. If the gains start to spread more widely among the communication-services companies, then the leadership will appear more solid. But if the gains still remain confined to two companies, XLC’s lead could vanish quickly.

Yet at the moment the first part of September has yielded an unusual outcome: the sector performing best in the market is not the one that manufactures the AI chips, but rather the one which includes some of the companies attempting to demonstrate that all of those chips will eventually be able to make a profit.

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