Weekly KAOS — Hormuz, Hawks, and Hyperscalers
Welcome to UrbanKaoboy's Weekly KAOS — my new end-of-week roundup covering Macro and Geopolitics, where I try and tease out the most impactful bits of the week.
Themes of the Week
A fraying Iran ceasefire, a hawkish Waller pivot, and a SpaceX-shaped question mark over the entire AI capex trade
Han Solo’s asteroid field is still the right mental model — and this week the asteroids got bigger, faster, and started shooting back. CENTCOM lit up Iranian missile sites and small boats while the White House simultaneously briefed that a 60-day ceasefire, a Hormuz reopening, and a frozen-asset release were “in draft.” Tehran’s answer was to target a US base and let Trump publicly accuse them of stalling. Markets, doing their best C-3PO impression of “Sir, the possibility of successfully navigating an asteroid field is approximately 3,720 to 1,” instead pulled a Han and bid risk into a historic weekly run. Never tell me the odds, indeed.
Underneath the geopolitical fireworks, three slower-moving plates are spinning. Waller went on tape supporting the removal of the FOMC’s easing bias and refused to rule out hikes — at the same moment UMich sentiment printed the lowest reading in the survey’s history and 1-yr inflation expectations jumped to 4.8%. That is a genuinely ugly setup for a Fed that’s already drifting hawkish, and the dollar/rates tape is starting to price it. UBS, for its part, named the $38T federal debt — 122% of GDP heading to 175% — as *the* dominant tail risk. Their bull case? An AI-productivity burst on the 1990s analog. Which brings us to the third plate: Tilson calling OpenAI “the greatest cash-burning furnace of all time” and Stratechery admitting no model justifies SpaceX’s IPO unless you underwrite data centers in orbit.
The honest read: this is a market levitating on a peace deal that hasn’t closed, a Fed that may not cut, and a capex cycle whose terminal value lives on a slide deck. The throughline isn’t fear — it’s that the asteroid field rewards pilots who know which rocks are real and which are CGI. Welcome to the KAOS.
