The two-week ceasefire with Iran announced last night was followed by the biggest relief rally since the war started.

European stocks were up big (+4-5%). Oil crashed from $108 to as low as $91.  U.S. stocks followed with a huge day. 

The market read "ceasefire" and bought everything in sight.

Is this another April 7th moment? 

It was April 7th of last year that we entered the week trading at the lows of a six-week 20% decline in stocks (S&P 500), and then a report hit the wires that Trump's economic advisor said Trump was considering a 90-day pause on tariffs, the recovery in markets was explosive. 

The S&P 500 spiked 8.7% in about half an hour.  Everything turned.

Even after the report was debunked, markets held up.

Two days later a 90-day pause was confirmed.

This market reaction confirmed something very important: Trump does indeed "hold the cards" (as he likes to say). The economy was strong, and he could turn dials on geopolitical uncertainty, at will, to unleash it.

Here we are again, on April 7th (last night). And the dials were turned. Markets responded. 

But just as there was no clear resolution on the tariff strategy at this time last year, there is no clear resolution on the Iran strategy today.

But markets liked it. 

But with Iran, we have a very clear, measurable compliance report on the ceasefire — every day. It's the transit traffic in the Strait of Hormuz. 

And thus far, the conditions of the ceasefire ("COMPLETE, IMMEDIATE, and SAFE OPENING" of the Strait) are already failing.

Maritime intelligence (from Windward AI) reports that transit conditions are unchanged since the ceasefire announcement. No blue-chip operators have passed, no major oil company cargoes. The same permission-based system that has been in place since March 14.

In fact, from today's Windward report, Iran is now demanding tolls — $1 per barrel of oil, paid in cryptocurrency, with mandatory ship inspection and prior approval. Radio broadcasts to tankers warned that vessels transiting without approval would be struck.

Worse, the day of the ceasefire itself, the IRGC struck a container vessel with a cruise missile — while the deal was being finalized.

The vessels remain stacked up west of Hormuz. The insurance market has not reopened. And the assessment from maritime intelligence on the timeline: "even under a best-case scenario, weeks are required to move stranded gas and oil cargoes, and months for global trade to approach pre-crisis levels."

The reality of this timeline feeds the doom loop we've been talking about in Europe. European natural gas still trades 5-6x the American price, ceasefire or not.

And this economic pain, is leverage the Trump administration is clearly using against the political class in Europe — the Brussels elite. From last November's U.S. National Security Strategy report calling the EU out as "undermining political liberty" — to JD Vance standing in Hungary today and telling the voters to reject Brussels, stand with Orban and vote for sovereignty.

So, the doom loop continues in Europe, with the energy shock exposing the fragility of Europe's economic system.  

Meanwhile, we've talked about the boom loop in America.

It just shifted into another gear yesterday.

Anthropic, the developer of the leading AI model, Claude, announced a new model called Mythos.

But they refused to release it to the public.

Why? Mythos outperformed Anthropic's previous best model in autonomously finding and exploiting software security flaws by 91 times — 91 times better. It could hack systems faster than they could be defended.

It's a huge leap in capabilities. But the threat that comes with those capabilities is why Anthropic has taken it to the U.S. government and went into an immediate collaboration with major tech and security companies to build defense against it.

This is very good news. As we've discussed here in my daily notes, 

the AI race is a two-horse race (the U.S. and China) and it's "winner takes all."

The winner will set standards, attract talent, and determine what technology gets embedded into governments and critical infrastructure. And that will mean the difference between AI that serves humanity, or AI that controls humanity (serving the interest of the Chinese Communist Party).

So, the AI boom now goes into another gear, because the infrastructure to train and deploy these models (and everything that powers them) just became a matter of national security.

The capex cycle that is already projected to be about $700 billion this year, is not slowing down. This only accelerates it, which reinforces the boom loop (more compute, more revenue, more compute …).