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Jean-Étienne Liotard Self-portrait (1746) in pastel, his favourite medium. The full beard he wore after visiting Turkey was an eccentricity in 18th century Europe.
This tweet about China and coal is clearly intended as a polemic, but it isn’t wrong.
Surveying the Middle East’s energy infrastructure damage (from FT Alphaville Robin Wigglesworth)
As JPMorgan’s energy analysts said in a note yesterday evening (Alphaville’s emphasis in bold below):
In conflicts, headlines tend to focus on the fact of damage, not the scale. Facilities are ‘hit,’ infrastructure is ‘targeted,’ operations are ‘disrupted,’ but rarely do we get the quantifiers and qualifiers that matter for markets. The result is an estimate. What we do know is that in the nearly six weeks since the conflict began, more than 60 energy infrastructure assets in the Gulf have been affected by drone and missile strikes, with roughly 50 sustaining different degrees of damage. We expect most attacks will not cause long-lasting disruptions. Some facilities, however, will face lengthy repair timelines, with at least eight assets appearing severely impacted. Qatar’s Ras Laffan oil and gas complex, for example, may require years of repairs to restore 17% of its damaged capacity, while Bahrain’s Sitra refinery was struck twice. Oil refining has been a particular focus, with an estimated 2.4 mbd of capacity shut-in across 20 impacted plants. Most facilities have either restarted or were taken offline as a precaution.
Around 900 kbd could potentially return within weeks, another 800 kbd may take about a month, while the remaining 700 kbd of Bahrain’s Sitra refinery and Iran’s Tehran refinery is likely to require significantly longer repairs. . . . The Saudi Press Agency reported on Wednesday that multiple energy facilities across the kingdom have come under attack, hitting upstream, midstream, and downstream infrastructure, including the East-West pipeline, Manifa and Khurais facilities, key refineries, and LPG/NGL export sites.
The loss of 700 kbd of throughput on the East-West pipeline after a pumping station was attacked just hours after a two-week ceasefire was announced is particularly consequential, as the pipeline remains a critical bypass for roughly 5 mbd of oil flows. JPMorgan’s analysts Natasha Kaneva, Lyuba Savinova and Artem Fakhretdinov included a handy schematic of all the reported damage and its severity, and Alphaville thought it might be helpful to share. Here’s the toll on oil and gas infrastructure, ie pipelines, terminals, depots and fields etc. We’ve put the damage assessed to be serious in italics, and severe in italics and bold.
Source: FT
The revenge of the old economy – Jeff Currie Carlyle Feb 2026
Since October of last year, technology or new economy shares are down 5-10%, while old economy shares like energy, metals, and mining are up 30-50%. We called this rotation out of the ‘new’ and into the ‘old’ the ‘revenge of the old economy’ when we first observed it in 2001/02 during the dotcom collapse. It is easy to draw similar parallels to the dotcom era where AI is Web 1.0 (Microsoft), hyperscalers building datacenters are telecoms (WorldCom) laying broadband and gas and power (Enron) were expected bottlenecks. In fact, today’s mantra “own the AI compute, own the value”, sounds eerily similar to “own the network, own the value,” as the common wisdom in 2001 was to own the telecoms.
This simple comparison, however, stops there and misses a very deep difference between 2001 and 2026. This time the winners of Web 1.0 – Microsoft, Google, and Amazon – are vertically integrating and going upstream by morphing into old economy, big capex companies to own datacenters. This suggests, as we have argued in the past (2025 and 2023), a better description of this rotation is not old versus new economy but rather asset-heavy versus asset-light. We don’t want to downplay the structural productivity shock that AI represents and the impact it has had on sectors such as SaaS.
Our key point here is asset-heavy sectors of which the hyperscalers are now joining with current levels of physical capex are creating a new twist to an old story. In fact, if we strip out the technology companies that are directly tied to AI, what we find is that this rotation started in late 2022 when interest rates first started to rise in response to rising commodity prices which historically was the normal catalyst for the ‘revenge of the old economy’ rotation (see Figure 1). ChatGPT’s introduction in November 2022 simply masked and delayed a process that was already underway. Now that the AI hype is fading, the rotation is just becoming more visible once again.
Source: Carlyle
The Big Thing: We Are In A World War That Isn’t Going To End Anytime Soon Ray Dalio Founder of Bridgewater Associates
As a global macro investor for over 50 years who has needed to study all things that affected markets over the last 500 years to know how to deal with what’s coming at me, it appears to me that most people tend to focus on and react to the attention-grabbing things that are going on at the time—like what is going on with Iran now—and miss the much bigger, more important, and longer-term-evolving things that are driving what is going on and what is likely to happen. For today, that is most importantly that the US-Israel-Iran war is just part of a world war that we are in and that isn’t going to end anytime soon. While this sounds like hyperbole, it is indisputable that we are now in an interconnected world that has a number of shooting wars going on (e.g., the Russia-Ukraine-Europe-US war; the Israel-Gaza-Lebanon-Syria war; the Yemen-Sudan-Saudi Arabia-UAE war that also involves Kuwait, Egypt, Jordan, and other related countries; and the US-Israel-GCC-Iran war). Most of these wars involve major nuclear powers, and there are also significant non-shooting wars (i.e., trade, economic, capital, technology, and geopolitical influence wars) that most countries are in.
Together, these conflicts make up a very classic world war that is analogous to past “world wars.” For example, past “world wars” consisted of interrelated wars that were generally slipped into without any clear start dates or declarations of war. Those past wars combined into a classic world war dynamic that affected them all, as is happening with the current wars. I described that war dynamic in detail in Chapter 6, “The Big Cycle of External Order and Disorder,” of my book Principles for Dealing with the Changing World Order, which I published about five years ago, so it’s there if you want a more comprehensive description. That chapter covers the arc of what we are seeing happen and what is likely to happen.
Source: Ray Dalio on LinkedIn
Turkey appears to be living off its gold reserves
The Central Bank of the Republic of Turkey sold 52 tonnes of gold between Feb 27 and March 27, according to analysis by consultancy Metals Focus based on official data, bringing Turkey’s net central bank holdings to 440 tonnes, their lowest level in more than two years. The central bank also arranged about 79 tonnes of gold swaps — which involve leasing out gold bars to generate income and add to downward pressure on bullion prices by increasing the supply available to markets — during the period, as it battled to support the value of the lira.
Source: FT
Portrait of Liotard’s wife Marie Fargues in Turkish costume, c. 1757
In the current war on Iran not only are there thousands of strikes, but millions of people are within the immediate field of the destruction.
Roughly 18.5m of Iran’s 93m people live within a kilometre of a reported strike, as do 8.4m people in other countries.
Source: The Economist
Killing Cities
After Nazi armies won a string of victories across Europe in 1940, overrunning Denmark, Norway, the Netherlands, Belgium and France, air power was the only option left to an isolated Britain. Strategic thinking at Bomber Command evolved rapidly from plans for attacks on Germany’s military assets to targeting her industrial capacity, which in practice meant industrial workers. Winning the war by sapping the morale of the German population through bombing became the new idée fixe, a crude attempt at social engineering on a vast scale. As Mike Davis recalls, initial discussions of singling out the mansions of the Nazi political and industrial elite were vetoed by Lord Cherwell, Churchill’s chief scientific advisor, who worried that this might prompt the Luftwaffe to hit back at the country houses of the British ruling class.
‘The bombing must be directed essentially against working-class houses,’ he urged, reaching for the justification that the houses of the wealthy ‘have too much space around them, and so are bound to waste bombs.’ (3) The stated aim was ‘to dehouse the German industrial worker.’ Less explicit was the belief that, when the Germans retaliated against British cities, it would cause resentment and build resolve on the Home Front for the long struggle ahead. (No-one, it seems, spotted the contradiction.) British bombers attacked Munich; in return, the Germans bombed Coventry. And so on. By 1942, Directive 22 to Bomber Command emphasized that ‘the aiming points [were] to be built-up areas, not, for instance, the dockyards or aircraft factories.’ Arthur Harris was appointed Commander in Chief of Bomber Command. In the House of Commons, Richard Stokes, an independent-minded Labour MP, asked whether the air force was being instructed to participate in ‘area bombing’ rather than precision bombing of military and essential industrial targets. He was given the brush-off. (4) Harris was later to complain about being diverted from his task by pettifogging strategic considerations, like requests to bomb vital bridges or even the rail lines to Auschwitz; in his memoirs he claimed that he would have won the war on his own if only he had been allowed to focus on bombing residential areas.
Thousand-bomber raids were launched against Cologne and Hamburg. But Harris was fixated on destroying Berlin’s working-class neighbourhoods – ironically, the Red districts that had been most hostile to the Nazis. Frustrated by their continuing inability to create a satisfactory firestorm in Berlin, the British eventually sought a breakthrough solution in the inventive power of American industry. Under the supervision of German-Jewish architect Eric Mendelsohn, and using the combined resources of Standard Oil and the set designers of Hollywood, a replica of the slum districts of Berlin was built in the Utah desert, reproducing details right down to the typical furniture and linens favoured by the German proletariat.
To ensure that the complex was completed on time, conscript labour was brought in from the Utah state prisons. Between May and September 1943, German Village (as it was known) was firebombed and reconstructed at least three times, demonstrating clearly the superiority of the new munition called napalm. It was, for Mike Davis, ‘like bombing Brecht.’ (5) Churchill pledged to FDR that RAF raids on Germany could deliver 900,000 dead, a million injured, and 25 million homeless. The Americans were initially leery of their British cousins’ exterminism, but Roosevelt eventually came around
Source: Joe Guinan in Open Democracy riffing on Mike Davis, ‘Berlin’s Skeleton in Utah’s Closet,’ in Dead Cities and Other Tales (New York: New Press, 2002), pp. 64-83. in Open Democracy
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“The stance upon the ruined abode” (Sparked by a comment by Omar Offendum)
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It is not good earth
it is not good earth; but with hands it is made good … This earth needs hands which are not paid for. One has to keep fighting the weeds, the thistles, the rocks which appear who knows where. And these hands that punish and dominate and make seeds germinate must be the owner’s. One needs many sons.
Federico García Lorca, Bodas de Sangre (1932)[1]
[1]Translators note (DE): In the original text: ‘… no es buena tierra; pero con brazos se la hace buena …. Esta tierra necesita brazos que no sean pagados. Hay que sostener una batalla con las malas hierbas, con los cardos, con los pedruscos que salen no se sabe dónde. Y estos brazos tienen que ser de los dueños, que castiguen y que dominen, que hagan brotar las simientes. Se necesitan muchos hijos.’ Translation is mine. I have translated brazos (arms) as hands, as in farmhand. But in Spanish and Italian arm is used instead, giving us bracero and bracciante.
Breakfast of the Lavergne family, 1752, pastel on vellum, National Gallery of Art, London
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Source: adamtooze.substack.com