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Iran’s Real War Is Against the Global Economy

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Iran’s Real War Is Against the Global Economy

Iran may be losing the military contest with the United States. But it is fighting a different war—one aimed at the global economy.

Over the past 12 days, the United States has demonstrated clear military superiority. Iran’s navy has been severely degraded, with more than 50 ships sunk or damaged; its retaliatory missile launches are down more than 90 percent; and its air force has been grounded. On the battlefield, the scorecard favors Washington, despite risks of escalation.

Strategically, the picture is far less certain. Even as the Trump administration struggles to define its objectives—be it decapitating Iranian leadership, destroying Iran’s nuclear capability, or pursuing regime change—it must confront a new reality.

The United States and Israel are fighting the Islamic Republic. Iran is fighting the global economy.

U.S. Leading Indicators Forecast Further Slowdown – WSJ

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U.S. Leading Indicators Forecast Further Slowdown – WSJ

The U.S. economy is expected to slow further amid continued headwinds, while conflict in the Middle East further clouds the growth outlook, according to a basket of monthly economic indicators.

The Leading Economic Index, or LEI, published Thursday by research group The Conference Board, inched down by 0.1% to 97.5, after a 0.2% decline in December.

“The U.S. LEI fell further in January, as consumer expectations retreated again and building permits softened,” said Justyna Zabinska-La Monica, senior manager at The Conference Board.

The reading signals continued headwinds to economic activity, though data showed improvement over the six-month period, she said.

The index fell 1.3% over the six months between July and January, compared with a 2.6% contraction over the previous six-month period, according to the report.

 

S&P 500 Over the Years

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I think as the year closed out I took the market decline too personally when we are all suffering from the declines in our portfolio. And it's not like these declines are permanent or even long lasting when you look at the history of the markets. It's a set back the year that was but things will get better eventually. 

S&P 500 Over the Years

Thematic Map: Piseco Road Swimming Holes

Employers Cut Jobs in Unexpectedly Weak Report – The New York Times

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Jobs Report Live Updates: Employers Cut Jobs in Unexpectedly Weak Report – The New York Times

Austan Goolsbee, the Chicago Fed president, also added in his interview that there were enough “question marks” around February’s data related to bad weather and strikes that could have had an impact on monthly jobs growth. He also stressed that the unemployment rate, at 4.4 percent, was basically unchanged from the same time last year. But any indication that the unemployment rate was continuing to rise would be a problem, he noted. “If you start to see that number rising the way it does traditionally at the beginning of recession, that would be a bad sign,” he said. Goolsbee added: “If the job market is getting worse and inflation is getting worse at the same time, it’s not obvious to me what the immediate response should be.”

The Oil Bottleneck Threatening the Global Economy – WSJ

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Strait of Hormuz: The Oil Bottleneck Threatening the Global Economy – WSJ

President Trump’s promise to protect the Strait of Hormuz with naval escorts and provide government-backed marine insurance underscores the urgent need to restore flows of energy from the Middle East before soaring prices rip through the world economy.

As of Wednesday, day five of the war on Iran, several thousand ships were stuck inside and outside the Persian Gulf, trapping roughly a fifth of the oil and liquefied natural gas the world consumes each day. The blockage is cascading through the region’s industry as storage tanks fill up with oil that can’t set sail, forcing producers to slash output.

The problem is most acute in Iraq, the world’s fifth-biggest producer. Output has more than halved, oil officials in the country said, with cutbacks at the southern Rumaila and West Qurna 2 fields.