“I just cancelled the trip of my representatives going to Islamabad, Pakistan, to meet with the Iranians,” posted President Trump on Saturday afternoon. “Too much time wasted on traveling, too much work! Besides which, there is tremendous infighting and confusion within their “leadership.” Nobody knows who is in charge, including them. Also, we have all the cards, they have none! If they want to talk, all they have to do is call!!!” he continued. Bitcoin, the only liquid market trading on the weekend, barely budged.

Overall: “As the President has instructed, Indonesia is not a peripheral country. We sit on a strategic global trade and energy route, yet ships pass through the Malacca Strait without being charged – I’m not sure whether that’s right or wrong,” the Indonesian Finance Minister wondered aloud. 25% of all global maritime trade and over 80% of the oil bound for Northeast Asia (Japan, South Korea, China) passes through the Strait of Malacca. “Iran is now planning to charge ships passing through the Strait of Hormuz,” he continued. What is now abundantly clear is that even the world’s least affluent nations hold outsized power over trade chokepoints due to the asymmetry of relatively simple drone technology. “If we split tolls three ways between Indonesia, Malaysia and Singapore, that could be quite something, right?” he asked, rhetorically, nudging open Overton’s Window. And why not? Ever since America’s President started saying whatever comes to mind, probing for pushback in search of what may be politically possible, it would seem foolish for other leaders to refrain from doing the same. And given that the world is transitioning from Rule of Law to the Law of the Jungle, it makes perfect sense for every nation to take stock of its inherent strengths while racing to shore up its vulnerabilities. All countries have both, which is what makes the world so interesting. China has enormous strengths. But it is unable to both feed its people and produce sufficient energy to power its economy without massive imports, which will no longer reliably come from South America. And it would take next to nothing to sever China’s energy supply lines from the Middle East even after Hormuz reopens. This, combined with the fact that the US has the capacity to feed China is what will hopefully keep us all from fighting a kinetic war well past the rule of its supreme leader. “If only it could be like that, but that’s not the case,” said Indonesia’s Finance Minister, his point very clearly made, walking back the threat.

For Week-in-Review and Weekly & Year-to-Date market data, scroll to the bottom.

Liquidity: “And swap lines, whether it’s from the Federal Reserve or the Treasury, are to maintain order in the dollar funding markets and to prevent the sale of the US assets in a disorderly way,” said Treasury Secretary Bessent to a US Senate Appropriations subcommittee. The arrangement is similar to the $20 billion swap line that Bessent provided Argentina’s Milei heading into last October’s election. “So, the swap line would benefit both the UAE and the US, and numerous other countries, including some of our Asian allies, have also requested them.”

Liquidity II: “Discussions with countries, including our Gulf and Asian allies, about US dollar swap lines are part of ongoing, routine conversations that US Treasury has been having with our partners over a number of years,” wrote Secretary Bessent on X. “They are a testament to the US dollar’s primacy and the strength of America’s economic shield. Additional swap lines can benefit our nation by reinforcing dollar usage and liquidity internationally, maintaining smooth functioning in dollar funding markets, promoting trade and investment with the US, and, in hypothetical stress scenarios, preventing disorderly sales of US assets as well as disruptions to US markets, businesses, and households.”

Liquidity III: “Many of these countries have pristine sovereign balance sheets and large dollar holdings – larger than many major economies with whom we maintain permanent swap facilities,” continued Bessent on X, wielding the awesome power to extend unlimited dollar liquidity to America’s friends. “I applaud our allies’ foresight and watchful risk management by exploring additional financial buffers during periods of market quiescence. Extending permanent swap lines can be a major first step in creating new US dollar funding centers in the Gulf and Asia. Dollar dominance and reserve currency status are strengthened by constant long-term initiatives, including countering the growth of problematic, alternative payment systems.”

Liquidity IV: “As President Trump has made clear, the United States Navy will continue the blockade of Iranian ports,” continued Bessent, strangling our adversaries. “In a matter of days, Kharg Island storage will be full and the fragile Iranian oil wells will be shut in. Constraining Iran’s maritime trade directly targets the regime’s primary revenue lifelines. The US Treasury will continue to apply maximum pressure through Economic Fury to systematically degrade Tehran’s ability to generate, move, and repatriate funds. Any person or vessel facilitating these flows - through covert trade and finance - risks exposure to US sanctions. We continue to freeze the funds stolen by the corrupt leadership on behalf of the people of Iran.”

Liquidity V: “Under Economic Fury, the US Treasury will continue to systematically degrade Tehran’s ability to generate, move, and repatriate funds,” added Bessent, methodical, relentless. “Treasury’s Office of Foreign Assets Control is sanctioning multiple wallets tied to Iran - resulting in the freeze of $344 million in cryptocurrency,” he wrote, as the US government’s ability to tighten the noose around the necks of our adversaries is far more advanced in crypto than it is in physical cash. “We will follow the money that Tehran is desperately attempting to move outside of the country and target all financial lifelines tied to the regime.”

Anecdote: Voyager 1 is now over 15 billion miles away, its cameras cold and inactive for over 35 years. We are still in contact, and it takes nearly 1 full day for a signal, travelling at the speed of light to travel from Voyager 1 to earth. The space probe was launched on September 5, 1977. After fulfilling its primary mission, and as it ventured beyond our solar system, Carl Sagan advocated for Voyager 1 to turn its camera around to take one last photograph of earth. That was on February 14, 1990, from 3.7 billion miles away. The Pale Blue Dot remains the most distant photograph ever taken of our planet [here]. It is humanity’s most remarkable image - our self-portrait, self-reflection, a testament to our curiosity, ingenuity, ambition. I saved it onto my laptop ages ago, an awe-inspiring reminder of our infinitesimal place in the cosmos, a photograph to put our troubles and triumphs into proper perspective. I’d never shown it to my children, but when my daughter Liv framed it as a work of art for her first apartment, the mysterious workings of our species, parent to child, somehow made sense. “Look again at that dot. That’s here. That’s home. That’s us,” wrote Carl Sagan of the Pale Blue Dot photograph. “On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives,” continued the famed astronomer, philosopher, author. “The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every “superstar,” every “supreme leader,” every saint and sinner in the history of our species lived there - on a mote of dust suspended in a sunbeam.”

Good luck out there,

Eric Peters

Chief Investment Officer

One River Asset Management

Week-in-Review: Mon: Canada CPI 2.4% (2.6%e). New Zealand CPI 3.1% (2.9%e). Trump aims to seal Iran deal, but says truce extension is unlikely. VP Vance set to resume negotiations in Pakistan. Amazon to invest an additional $5bn in Anthropic. S&P -0.2%. Tue: US ret sales advance MoM 1.7% (1.4%e), pending home sales MoM 1.5% (0.5%e). Taiwan export orders 65.9% (44.1%e). Trump extends Iran ceasefire, keeps blockade as talks falter. SpaceX has an agreement to acquire Cursor for $60bn later this year, or to pay $10bn for the companies’ work together. S&P -0.6%. Wed: UK CPI 3.3% as exp, Core 3.1% (3.2%e), RPI 4.1% (3.9%e). South Africa CPI 3.1% as exp. Turkey one-week repo rate unch 37.00% as exp. South Korea GDP 3.6% (2.6%e). Bessent says many Persian Gulf allies and numerous Asian nations have requested foreign exchange swap lines with the US. Tesla boosts spending plan to $25bn for AI and robotics push. S&P +1.1%. Thu: US init jobless claims 214k (210k e). Mexico bi-weekly CPI 0.11% (0.08%e). Singapore CPI 1.8% as exp. Trump says Israel and Lebanon to extend their ceasefire by three works to work on deal. Trump considers having the US purchase Spirit Aviation Holdings Inc, with a financial package of up to $500mm. S&P -0.4%. Fri: US UMich sent 49.8 (48.5e). Mexico unemp rate NSA 2.42% (2.31%e). Russia key rate 14.50% as exp. Venezuela, US discuss opposition seats on the country’s central bank board. Taiwan’s Deputy Foreign Minister Francois Wu expressed concern that Trump may make concessions on Taiwan in his meeting with Xi in May. Brazil’s government blocked access to Polymarket and Kalshi as part of a crackdown on prediction market platforms. S&P +0.8%. Sat: Trump pulls US negotiation team back from Pakistan.

Weekly Close: S&P 500 +0.5% and VIX +1.23 at +18.71. Nikkei +2.1%, Shanghai +0.7%, Euro Stoxx -2.5%, Bovespa -2.5%, MSCI World -0.8%, MSCI Emerging +0.1%, Bitcoin +0.4%, and Ethereum -4.4%. USD rose +2.1% vs Chile, +1.4% vs India, +1.3% vs South Africa, +0.6% vs Sweden, +0.5% vs Yen, +0.4% vs Mexico, +0.4% vs Euro, +0.3% vs Turkey, +0.3% vs Australia, +0.2% vs China, +0.1% vs Indonesia, and +0.1% vs Brazil. USD fell -0.9% vs Russia, -0.2% vs Canada, and -0.1% vs Sterling. Gold -2.8%, Silver -6.7%, Oil (WTI) +14.3%, Oil (Brent) +17.3%, NatGas (US) -5.6%, NatGas (EU) +15.7%, Power (EU) -3.6%, Copper -1.4%, Iron Ore +0.9%, Corn +1.3%. 10yr Inflation Breakevens (EU +7bps at 2.23%, US +6bps at 2.43%, JP +4bps at 1.93%, and UK +10bps at 3.48%). 2yr Notes +7bps at 3.78% and 10yr Notes +5bps at 4.30%.

YTD Equity Index Returns: Korea +50% priced in US dollars (+53.7% priced in won), Taiwan +34% priced in US dollars (+34.4% priced in Taiwan dollars), Norway +31.2% priced in dollars (+21.4% priced in krone), Brazil +29.6% in dollars (+18.4% in reais), Hungary +27.3% (+20.6%), Israel +24.7% (+16.7%), Turkey +22.1% (+27.9%), Japan +16.4% (+18.6%), Colombia +14.7% (+8%), Russell 2000 +12.3%, Thailand +12.3% (+15.6%), Mexico +11.4% (+7.7%), Poland +10.6% (+11.4%), Portugal +10.5% (+10.7%), Australia +8.1% (+0.8%), Austria +7.7% (+8%), Finland +7.7% (+8%), Chile +7.3% (+6.6%), Canada +7.3% (+6.9%), Sweden +7.2% (+7.6%), Netherlands +7.1% (+7.3%), NASDAQ +6.9%, Singapore +6.8% (+6%), Saudi Arabia +5.9% (+5.9%), Italy +5.7% (+6%), China +5.2% (+2.8%), Belgium +5.1% (+5.2%), UK +5% (+4.5%), Malaysia +4.8% (+2.4%), S&P 500 +4.7%, Greece +4.5% (+4.7%), MSCI World +4.1% priced in US dollars, Vietnam +3.7% (+3.9%), Spain +2.1% (+2.2%), Euro Stoxx 50 +1.4% (+1.6%), South Africa +1% (+0.8%), HK +0.7% (+1.4%), Switzerland +0.1% (-0.7%), France 0% (+0.1%), Germany -1.8% (-1.5%), UAE -2% (-2%), New Zealand -2.9% (-5%), Argentina -3.2% (-6.9%), Czech Republic -4.1% (-3.2%), Philippines -4.8% (-1.8%), Ireland -6.5% (-6.3%), Denmark -9.2% (-8.9%), India -12.6% (-8.5%), Indonesia -20% (-17.5%).

Disclaimer: All characters and events contained herein are entirely fictional. Even those things that appear based on real people and actual events are products of the author’s imagination. Any similarity is merely coincidental. The numbers are unreliable. The statistics too. Consequently, this message does not contain any investment recommendation, advice, or solicitation of any sort for any product, fund or service. The views expressed are strictly those of the author, even if often times they are not actually views held by the author, or directly contradict those views genuinely held by the author. And the views may certainly differ from those of any firm or person that the author may advise, converse with, or otherwise be associated with. Lastly, any inappropriate language, innuendo or dark humor contained herein is not specifically intended to offend the reader. And besides, nothing could possibly be more offensive than the real-life actions of the inept policy makers, corrupt elected leaders and short, paranoid dictators who infest our little planet. Yet we suffer their indignities every day. Oh yeah, past performance is not indicative of future returns.