2026-08-08 ATS briefing¶

Dark Tanker Transits Dominate Hormuz Since 14 July¶

The numbers coming out of Hormuz describe a market that has stopped pretending. Sixty-two per cent of tanker transits since 14 July moved dark, with AIS switched off — and among crude carriers the figure jumps to 79 per cent. That is not evasion at the margins; it is the dominant mode of operation. The 56 per cent of transits under non-transparent ownership — sanctioned fleet, ghost vessels, opaque structures — tells you who is actually moving the oil and who is merely watching it move.

The freight data shows where the real money sits. Arabian Gulf export routes are earning $481k–502k per day while Atlantic basin routes collapse to a tenth of that. The blockade has not disrupted supply so much as it has concentrated the premium in the hands of those willing to operate outside the rules. The VLCC utilisation recovery to 48.4 per cent by 21 July, nine points above the three-year seasonal average, looks less like a market returning to health and more like a fleet being redeployed into a narrower, riskier corridor.

What is striking is the timing of asset appreciation. Nearly 80 per cent of this year's value gains were locked in by March, months before the July utilisation spike. Secondhand VLCC prices have held at $143 million for five-year-old tonnage even as the operating environment deteriorated. The market priced in the blockade before it happened — or rather, it priced in the permanence of the conditions that make such blockades profitable.

The ballast-to-laden ratio east of Suez jumping from 1.0 to 1.5 in three weeks is the clearest signal of overcapacity relative to employment. Vessels are repositioning, waiting, not working. The Iran–Oman corridor proposal, with its unconfirmed fees and hostile-vessel legislation still in committee, offers no resolution. The market has adapted to a world where the Strait is a toll booth run by no one and everyone at once — and the fleet is being valued accordingly.

AI trade boom offsets Middle East conflict¶

Source: Hellenic Shipping News

The WTO's first-quarter numbers describe a global economy that has apparently found a way to have its conflict and trade it too. A 40% year-on-year surge in the dollar value of AI-related trade, concentrated in Asian intra-regional circulation of electronic components, has more than compensated for the immediate shock of the Hormuz disruption. But the compensation is purely arithmetic, and the arithmetic is already unstable. The 45% collapse in Middle Eastern crude oil imports and the 52% fall in LNG are not costs that can be offset indefinitely by shipping more semiconductors; they are the material basis for the higher energy prices that will eventually eat into the profits of every AI data centre and every Asian export manufacturer.

The regional split is the real story. Asia's 12.9% export growth and the 44% surge in office and telecom equipment values describe a boom in the production of the means of computation. The Middle East's 9.7% export contraction describes the destruction of the means of energy supply. These are not two separate stories; they are the same system pulling in opposite directions. The WTO's own hedging — the conflict could shave 0.5 percentage points off growth, AI investment could add the same — is an admission that the organisation is modelling a tug-of-war it cannot predict the outcome of. The forecast of 1.9% growth for the full year, already surpassed in one quarter, was made before the full extent of the shipping disruption was clear.

What the report cannot capture is the temporal mismatch. The AI boom is a long-term investment cycle, driven by the need to build out infrastructure for a technology whose profitability remains speculative. The conflict is an immediate physical disruption to the flow of energy. When a war interrupts the supply of the commodity that powers the factories producing the components, the offsetting relationship in the first-quarter data becomes a sequential crisis in the second. The 32% rise in metal and mineral prices is the first sign of the input-cost squeeze working its way through. The question is not whether the AI boom or the conflict predominates, but how long the boom can continue to run on energy whose supply is being actively severed.

The Rising Price of a Cheap Renminbi¶

Source: Project Syndicate

The exchange-rate debate around China usually treats the renminbi as a mirror of the economy’s structural flaws. Frieda inverts this: the currency is not a symptom but a mechanism. By holding the renminbi down, Beijing suppresses household purchasing power over imports and shields the tradable sector from margin compression — which is precisely why the surplus persists. The undervaluation is not a passive reflection of imbalance; it is the active disablement of the price signal that would force adjustment.

The argument gains teeth from its political economy. A cheaper renminbi subsidises exporters and the state-linked industrial apparatus at the expense of domestic consumption. Frieda’s point is that appreciation would not rebalance the economy on its own — but it would raise the cost of avoiding reform. That is the crux: the policy is self-harm not because it is irrational, but because the pain is deliberately distributed. The export sector and its employment base are the political constituency that makes devaluation attractive; households absorbing higher import prices are diffuse and unorganised. The exchange rate is thus a site of class conflict disguised as macroeconomic management.

For the current conjuncture, the implication is sharp. As US-China rivalry intensifies, Washington’s pressure on the renminbi aligns oddly with the interests of Chinese workers — a rare instance where imperialist coercion and domestic class interest point in the same direction. Beijing’s resistance to appreciation is therefore not merely economic defensiveness; it is the defence of a specific accumulation model whose beneficiaries are concentrated and politically powerful. The price of a cheap renminbi is rising, but the bill is not being sent to those who set it.

Can shattering capitalist economic theory lead to revolution?¶

Source: Tempest

The book under review is a primer for the unconvinced, and Mattei’s critique of capitalism is largely a restatement of Marxist basics. Her specific thesis, however, is that neoclassical economic theory is not merely an apology for capital but a weapon wielded by economists to enforce austerity and discipline workers. She traces this to the League of Nations conferences after World War I, where the fear of revolutionary workers’ movements and inflation produced a deliberate consensus to slash welfare and force the working class to “work hard, live hard, save hard.” The link to fascism is concrete: Maffeo Pantaleoni and Alberto De Stefani, founders of neoclassical theory, became Mussolini’s brain trust, and the “objective” science of mathematical equations was deployed to justify the violent transfer of resources from the many to the few.

Where Mattei departs from a Marxist framework is in her treatment of “political” power. She applies the term to capitalists’ decisions over investment and production, collapsing the distinction between economic coercion and formal state power. This flattening leads her to the conclusion that mainstream economic theory is the primary mechanism maintaining the “capital order.” The theory is “depoliticized” because it ignores the power of capitalists to manage production and influence prices, and economics itself is “a political act.” The prescription that follows—presumably in the final ten pages—is to shatter this theory to end capitalism.

The weakness is evident. If the power of capital rests on the ideas of economists, then revolution becomes a matter of intellectual persuasion. But the austerity Mattei describes was not implemented because economists convinced anyone; it was implemented because the state, in the wake of factory occupations, needed to break the workers’ movement. The economists provided the language, but the violence was the point. The theory is a symptom of class power, not its source. Mattei’s book may serve as an introduction to anti-capitalist thought, but her conclusion mistakes the map for the territory.

America Must Let Go of the Middle East¶

Source: Foreign Affairs

The war with Iran has done what decades of strategic review could not: it has made the case for withdrawal in the only language Washington respects, which is failure. Eighteen American troops dead, the Strait of Hormuz closed, energy prices spiking worldwide — the campaign against Iran has generated the very dangers it was meant to prevent. That is the core of Fuchs's argument, and it is a strong one, though it rests on an assumption worth examining: that the United States ever had a coherent strategic interest in the region that its military presence was meant to serve.

The numbers tell a story of entrenchment rather than design. Thirteen thousand troops in Kuwait, 10,000 in Qatar, 8,000 in Bahrain — a footprint that has ebbed and flowed but never contracted in any meaningful way since the Gulf War. Fuchs is right that this presence creates its own logic of escalation: bases draw attacks, attacks justify more bases, and each new threat becomes an argument for enlargement. The 2011 withdrawal from Iraq lasted precisely three years before the United States had to return to fight ISIS, which emerged from the chaos of the 2003 invasion. The $8 trillion price tag and the 940,000 dead are the accounting of a policy that mistook military presence for strategic commitment.

But there is a tension in Fuchs's prescription that he does not fully confront. He wants Washington to "let go" of the Middle East in order to concentrate on deterring great-power war in Asia and Europe. That framing accepts the premise that the United States should remain the guarantor of order somewhere — just not there. The question is whether the same logic that produced the Iran war — the belief that American military power can manage regional contradictions — will simply reproduce itself in the Pacific. The Middle East was not a mistake born of geography; it was the expression of an imperial posture that will find new terrain.

US to shut five consulates as critics fear China could fill diplomatic vacuum¶

Source: The Guardian

The cost-cutting rationale for closing five consulates barely survives contact with the actual sums involved. As Senator Shaheen notes, these facilities consume a tiny fraction of the State Department's budget. The White House's Office of Management and Budget wants to go further, shuttering up to thirty missions. This is not austerity forced by fiscal constraint; it is a political project to shrink the diplomatic apparatus regardless of what it saves.

The administration's own defence gives the game away. A State Department spokesperson dismisses the idea that China might fill the vacuum as "inherently false" propaganda, pointing to Chinese help with earthquakes in Venezuela and the Ebola outbreak. That rebuttal inadvertently concedes the point: Beijing's presence in these regions is real enough to require a response, and Washington's answer is to withdraw and call the other side's engagement illegitimate.

There is a deeper incoherence here. The closures target places where China already has a foothold — St George's, Nagoya, Medan — while the US leaves ambassadorial posts vacant in Germany, Egypt, Saudi Arabia and Pakistan. A state that is simultaneously escalating tariffs on Canada, dismantling USAID, and hollowing out its own foreign service is not retrenching strategically. It is shedding instruments of influence without any coherent alternative, as the Winnipeg case shows: a consulate opened in 2001 to cover the prairie provinces, now closed to save dollars while the US imposes 50% tariffs on the same country.

For the rest of the world, the signal is unambiguous. The US is telling middle and smaller powers that its presence is contingent on domestic political whims, while China's diplomacy — whatever its motives — is at least consistent. The vacuum is not something Beijing needs to exploit; it is being handed over.

Spain to introduce temporary border checks on visitors from Italy¶

Source: The Guardian

The Schengen zone’s internal borders were always a fiction of administrative convenience, and this spat between Madrid and Rome has simply made that visible. Italy’s decision to impose checks on arrivals from Spain — a country it shares no land border with — is a pointed admission that the EU’s external frontier cannot hold. Meloni’s government is not responding to a security threat from Spanish citizens; it is using the Ceuta rush as cover to perform sovereignty for a domestic audience, and Spain’s reciprocal measures are the predictable result of that game.

The timing is instructive. Italy says it will reconsider only after 15 August, when Spanish authorities allegedly expect a new wave of migration. Yet Spanish police have not confirmed any such expectation. Meloni’s office is manufacturing a deadline to justify a policy that has no operational basis — the checks target third-country nationals arriving from Spain, not Spaniards themselves, which makes the "discriminatory" charge from Madrid somewhat hollow. Both governments are posturing for electoral advantage, with Spain warning against "sterile conflicts driven by internal electoral motives" while engaging in precisely that.

The real contradiction sits in Ceuta itself. Tens of thousands crossed, 70,000 returned, and the official death toll of 80 is disputed by Moroccan rights groups who count nearly double. The Spanish state can process the return of the living but cannot account for the dead. Meanwhile, hundreds of unaccompanied children remain in Ceuta with little food or shelter — the human residue of a crisis that both governments would rather weaponise than resolve. The border checks are theatre; the children are the material fact that the theatre obscures.

What securities do FDIC-insured banks hold?¶

Source: FRED Blog

The FDIC's own data shows that the balance sheet of the American banking system is, in essence, a bet on the continued solvency of the American homeowner and the American state. Mortgage-backed securities alone account for over sixty per cent of securities held, with US Treasuries taking another third. The state and municipal paper and equity shares are rounding errors. What is striking is not the composition itself but the direction of travel since 2008: the MBS share has shrunk while the Treasury share has grown, and the proportion of securities held to maturity has climbed from near nothing to nearly forty per cent of investment assets.

The Kansas City Fed's explanation — regulatory change and evolving risk preferences — is the polite way of putting it. The shift towards holding Treasuries to maturity is a strategy of capital preservation, a defensive crouch. Banks are not reaching for yield; they are reaching for the one asset that the Federal Reserve will always backstop. This is the behaviour of institutions that have internalised the lesson of 2008: when the music stops, the only thing that matters is whether your assets can be swapped for dollars at par. The "held to maturity" designation is particularly telling, because it allows banks to carry these securities at amortised cost rather than mark-to-market value, insulating their capital ratios from the interest rate swings that would otherwise expose paper losses.

The contradiction here is that the system's stability now rests on the fiction that Treasuries are risk-free, a fiction maintained only by the Fed's willingness to monetise government debt. Banks hold the state's debt to protect themselves from the market, and the state holds up the banks to protect itself from the market. Each side's safety net is the other's balance sheet. The regulatory framework that emerged after 2008 has not made the system safer; it has simply concentrated the risk in a single asset class that everyone pretends cannot fail. For those watching the crisis unfold, the relevant question is not whether this arrangement holds, but what happens when the market begins to price in the possibility that it might not.