Daily Commentary

MarketMinder’s View: The Strait of Hormuz, a key oil and gas shipping route in the Middle East, has been in the spotlight after the latest Middle East conflict led to disruptions and attacks on ships in the region. As this article highlights, reports suggest plenty of Iranian oil is making it through the strait at near the same volumes before the fighting commenced. “Energy analysts at trade data and analytics company Kpler estimated Thursday that Iran had been able to export 12 million barrels since the conflict began on February 28. Maritime intelligence company TankerTrackers has an even higher estimate: 13.7 million barrels as of the middle of last week.” As noted herein, this puts Iranian exports at around 1 million barrels per day (bpd), down from last year’s average of about 1.69 million and last month’s 2.04 million as exporters front-ran the highly anticipated attacks. This oil is reportedly finding its way to non-Western buyers (i.e., India and China), similar to how Russian oil found buyers despite Western sanctions in 2022—a reminder of how adaptive global markets are today. Now, shipments from other, bigger producers have been interrupted, which likely explains the rise in oil prices in recent weeks. That said, when you consider Iran’s exports, the 5 million barrels per day Saudi Arabia has shifted to export from Yanbu (outside the Strait on the Red Sea) and others like Oman shifting transport points, the “Closure” doesn’t really mean a fifth or world oil supply is off the market. All in all, that suggests to us that reality is likely to prove more benign than feared, a bullish factor. And we doubt strongly the Hormuz remains as interrupted as it is today for very long. For more on why, see our commentary, “February’s Growthy Data—and the Iran War’s Souring Sentiment.”

MarketMinder’s View: Ugh. This is our least favorite kind of news you can use. We wish it weren’t a thing. Nevertheless: This is the story of an 81-year-old gentleman who lost over $1 million in a romance scam … then got targeted by a scam lawyer who claimed he could help recover it. Thankfully, his son was overseeing his finances by that point, determined the lawyer was a fake and kept money from changing hands. But this is an increasingly common occurrence. “This type of fraud is known as a recovery scam, a common ruse used by cybercriminals who try to exploit the victims’ desire not only to get their money back but to reverse, or somehow rewrite, this often dark and devastating chapter in their lives. Given the enormous sums that victims are increasingly losing in individual scams — $16.6 billion in losses were reported in 2024, at minimum — they are more likely to shell out even more money in hopes of a recovery.” Sometimes it is the same criminal group. Sometimes, they sell the pertinent info to a different group, which executes the recovery fraud. They will impersonate lawyers, law enforcement and the government. So advertise fake “recovery firms” online; others pepper their contact info in social media comments. If you are contacted by someone offering assistance, take a page from the victim’s son: “He was fairly convincing, but Mr. Jonas asked for more proof. Could Mr. Solis send him photo identification with his legal credentials? That was when any distant hope was quickly shattered. ‘The credentials included an A.I.-generated image of a man meant to look like the guy on the video call,’ Mr. Jonas said, ‘and that’s when I immediately knew it was a scam.’” As for practical steps to head this off, changing all of your contact information if you have been scammed appears to be a big one. Beyond that, the usual tools apply: Don’t accept solicitations outside normal official channels, go directly to law enforcement as needed and don’t take someone’s word for it if they say the government sent them.

MarketMinder’s View: This long feature on an odd California real estate investment, where a few hundred individual investors are faced with potentially losing everything they put in, illustrates a classic principle: If it sounds too good to be true, it probably is. In 2021, rapper Kanye West bought a rare house designed by a celebrated architect … and gutted it, leaving its concrete interiors exposed to the elements. He later sold the crumbling husk to an investment company that had solicited individual investors to buy fractional shares in the home—marketed as a way for normal people to get in on the high-end real estate game. The plan was to restore the home to its former glory in luxurious Malibu and flip it, with a quick 20% return seemingly penciled in for the shareholders. But all has not gone according to plan. Construction stopped a year ago, and the developer is facing foreclosure on a complex loan he took out to assist with the financing. This piece delves into the main players’ backgrounds, including various criminal allegations that have been settled or are pending in court—we don’t comment on any of that and simply present the broader story, which contains numerous red flags the individual investors now see in retrospect. At one point, the developer “told investors that he planned to refinance and then restart construction, but investors were puzzled, since he’d raised millions from them. ‘Why was he overleveraged?’ [one of them] said. ‘It’s still unknown.’” (The developer claims that after pre-paying interest on the loan, which was about $10,000 a day, he needed extra for construction costs.) Now, as the house heads to the auction block, the developer is attempting another fundraising round and “saying that any additional investment would yield a 30% return. ‘Unfortunately, time is not on our side,’ he wrote. ‘The risk of losing this opportunity is very real.’” Meanwhile, the existing investor base is mentally writing off its losses and moving on, based on the interviews here. Now, it is entirely possible that everything here was above-board and it was just a bad investment decision. No allegations here—that isn’t the point. Rather: Real estate projects like this are complicated, undiversified and high risk, especially high-end properties that need a lot of work. Quick pie-in-the-sky return projections are often unrealistic, grounded more in hype and hope than reality. That simple reality check can save you from years of frustration and financial heartache.