Stocks are up this morning apparently trading on hope, rather than certainty, as claims are the cease fire is holding up … even as the occasional bombs make noise in the distance.  Yes, there is still a war going on … but the weapon used most often is words … as both sides seem quite willing to use the media to plead their cases and point fingers at the other side.

So, the question remains as to when (not if) the Strait will reopen … and betting markets are of little help. The Polymarket betting site listed the probability of its being open by the end of June at 80% in April, 30% two weeks ago, around 70% over the weekend and now at around 40%.  In other words, no one knows … but we do look towards betting markets for indications as somehow major spikes in odds (and profits) have been able to foretell pending events … even before they are announced.

One item that is interesting is witnessing the “mood” of people as Daily Shot reports the University of Michigan Consumer Sentiment Index has been revised downward to its lowest level on record (via a chart that goes back to the early 60s).  Meanwhile the views on both current conditions and expectations are deteriorating … possibly giving further incentive for the government to speed up their negotiations with Iran … as the population appears to be losing confidence.

As if this wasn’t enough of a headache, the Pope professed warnings over AI and implied something many experts claimed of late … that putting your faith in the output of a machine is rife with problems especially as we become increasingly trusting of machines to make decisions for us … machines without empathy or true human logic.  In this regard, the Pope does have a point as there have been instances where machines claimed attacks were underway … for which action and retaliation could have followed … but humans, not machines, correctly determined these to be false alarms.  This might no longer be the case.

On a final note, let’s look at something concerning the future which is referenced in the last article below.  Population.

Researchers from the University of Milan feel possibility that the global population could be dramatically reduced over the next 35 years and while their comments are based on climate, pandemic or war … it is declining replenishment rates that should add to this concern.

As investors … especially young, long-term investors … it might be wise to think through the ramifications of a greatly reduced population.

What would this effect?  Housing (less need), energy (less demand) and consumer goods. Sure, we would have greater need for adult-care items leading up until that time … but what then?  And with a much larger older population, how will social security … depending on worker fees supporting non-workers … survive in its present form?

I don’t feel the government is considering this enough … and a few $1,000 baby bonds appear to be little more than soundbites and akin to putting a small band aid on a gaping wound.

Ok. I’m done for today as I’ve worked myself into a tizzy.

I think it’s just that I don’t want to accept becoming part of the problematic elder population and realized this when I visited my hometown a few weeks ago

… as I haven’t gotten used to the shock felt when I saw an old person

… and realized we went to high school together.

Have a great day,

Joseph G. Witthohn, CFA

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