NYT : European Airports Warn of Fuel Shortages if Gulf Supplies Remain Shut

European Airports Warn of Fuel Shortages if Gulf Supplies Remain Shut
An association of airports told European Union officials that fuel shipments through the Strait of Hormuz had to restart within three weeks to avoid a “systemic” shortage.

Europe could face shortages of jet fuel if ships are not allowed to pass through the Strait of Hormuz soon, an association of airports warned top European Union officials on Thursday.

The warning, from the Airports Council International Europe, came days after President Trump announced a cease-fire agreement with Iran that was supposed to unblock the strait. But ship traffic through the passageway, which lies between Iran and the Arabian Peninsula, remains far below prewar levels.

A significant share of global oil and jet fuel supply is exported from the Middle East through the strait. But that has been virtually cut off since the United States went to war with Iran. The shortage so far has mainly resulted in higher fuel costs for airlines, which have cut unprofitable flights, raised ticket prices, added fuel surcharges and increased bag fees.

“At this stage, we understand that if the passage through the Strait of Hormuz does not resume in any significant and stable way within the next three weeks, systemic jet fuel shortage is set to become a reality,” the group said in a letter to E.U. officials.

Fuel supply shortfalls could “severely disrupt airport operations and air connectivity,” risking “harsh” economic consequences, according to the group, which represents most airports on the continent.

Europe is particularly reliant on the Middle East for fuel. At least 40 percent of Europe’s jet fuel imports last year came from the Persian Gulf through the Strait of Hormuz, according to Amaar Khan, European head of jet fuel pricing for Argus Media, a company that tracks commodity prices. Kuwait is Europe’s largest jet fuel supplier.

Asia is also very reliant on the Persian Gulf for energy, and some airlines there have had to cancel flights because of low supplies of jet fuel.

NYT : No Doors, No Roof, No Worries: A Tiny Racecar Sets Its Sights on the U.S.

No Doors, No Roof, No Worries: A Tiny Racecar Sets Its Sights on the U.S.
The British company Caterham is making a push into the American market with the lone car in its catalog, the Seven, based on the original Lotus Seven.

Among modern automobiles, a model that remains in production unchanged for more than five years is a rarity. Much longer than that and the vehicle has entered serious outlier territory. What then to make of Caterham’s tiny Seven, the sole model in the British sports car maker’s current catalog, now in its 53rd consecutive year of production?

Based on the Lotus Seven, an ode to lightweight minimalism, Caterham’s Lilliputian Seven is fundamentally the same austere car first introduced in 1957. Updated for the better over time, but visually and conceptually identical to its forebear, the model is actually closing in on 70 years and counting, surpassing the original Volkswagen Beetle, which was retired in 2003 at age 65.

Founded by Colin Chapman in 1952, Lotus would become the most successful of the myriad small start-ups in postwar Britain aiming to build racing and sporting road cars. With engines and gearboxes from larger manufacturers, tubular steel space-frame chassis and stressed aluminum body panels, the Lotus Seven constituted an early hit for Mr. Chapman and his company. It has remained a modest but steady seller through the years.
Its bare-bones appeal was decidedly not for everyone, yet the Lotus Seven remained in production for 17 years. Though perceived as even more raw than its no-frills sports car competition, the model underscored Mr. Chapman’s defiant credo — “simplify, then add lightness.” It was as suited for attacking racetracks as it was for bombing down winding country lanes with a single companion and, in the tiny well behind its two occupants, a maximum of two small gym bags and a six-pack.

Weighing in at around 1,100 pounds (or almost one-quarter of a Tesla Model 3), it was the essential driver’s car: a highly effective dart out among the heavy artillery, quick despite scant horsepower, yet faster through corners than most cars this side of a Formula 1 machine.

By 1973, however, the Seven no longer fit with Mr. Chapman’s plan to make more money by moving Lotus upscale. But this petite, bug-eyed thing with no doors, a tiny windscreen and barely enough room for two slender Britons wasn’t killed off. Far from it. In a testament to both the Seven’s enduring appeal and Mr. Chapman’s constant need to refill Lotus’s coffers — drained regularly by the expense of running a Formula 1 racing team — all rights, design and tooling were sold in 1973 to an especially enthusiastic Lotus dealer in Surrey, England: Caterham Car Sales & Coachworks.

Like a latter-day cover of a hit song, a new chapter was born, with the reanimated model from Caterham going on to sell almost 10 times more than the original ever did. To date, some 22,000 Caterham Sevens have been delivered.
Now with offices and a new factory in Dartford, Kent, Caterham was bought in 2021 by a Japanese holding company, VT Holdings, a large automobile distributorship and dealer network, injecting much-needed capital into the carmaker. Capacity — always a constraining factor — rose, and Caterham, which historically sold 500 cars worldwide in a good year, now looks to sell up to 800 in a year. A major push into the American market is high on the company’s to-do list.

Reflecting Caterham’s new ambition, Trevor Steel, the senior vice president for operations and chief financial officer, recently visited Miami, where he spoke of the company’s American dream. “Our cars have trickled into the U.S. for many, many years,” Mr. Steel said. “But we’ve never really focused on the market, simply because we’ve never had the ability to service it properly. We didn’t want to let consumers and enthusiasts down by having extraordinarily long lead times on delivering the product, which would have been the case.”

The Seven is a scalpel for the road, perfect for those who might enjoy hurling themselves around a closed course.

The new factory, he said, will allow for more timely deliveries, and the plan is to double the company’s dealer count from the current six: in Buffalo, Miami and Nashville (opening this year), along with Golden, Colo.; Irvine, Calif.; and Redmond, Wash. “They’re a great fit for us,” Mr. Steel said. He added, “the new owners take a very long view on things. They came over and assessed the position we’re in, realized that we needed some investment, which the business quite frankly had needed for decades.”

Along with the factory, the cash infusion has allowed the company to hire its first-ever American press officer, and it’s planning a Caterham-only racing series in the United States, similar to the one it also puts on in Britain and several European countries. “It builds community and demand,” Mr. Steel said.

Meanwhile, proximity to affluent customers with track-day aspirations explains the company’s new partnership with the Precision Drive Club, housed at Miami’s Hard Rock Stadium in Miami, home of the Dolphins football team, the Formula 1 Crypto.com Miami Grand Prix and the Miami International Autodrome. Members of this exclusive (100 members tops) and expensive club — it reportedly calls for a $375,000 initiation fee, along with $35,000 in annual dues — will have access to the track and Caterham’s race-ready Seven R.

A test drive by this reporter did not disappoint. The Seven is a scalpel for the road, perfect for drivers who are well acquainted with the elements, and who might enjoy hurling themselves around a closed course in a potent racer that asks nothing of you other than that you pay close attention to what you are doing.

Happily, one needn’t possess Drive Club wealth to get behind the wheel of a Caterham. The company offers a radically basic sports car, too. With a choice of power plants, less potent models start at $70,000, depending on options, while used ones run in the range of $20,000 to $40,000. Unusually, but as always with Caterham, new cars are delivered without engines to the American dealers who place the orders. The machines are shipped either unassembled in flat packs or partly assembled to be completed by the dealer, an approved shop or, should one be so inclined, the new owner, a task made possible with dexterity and only moderate mechanical skill. Under a 2022 law, up to 325 such “replicas” may be exported annually to the United States by their maker, though the cars must employ engines that meet federal and California emissions standards.
Image
Caterham’s Seven is visually and conceptually identical to Lotus’s original model from nearly 70 years ago.
Depending on engine choice, Caterhams range from brisk to insanely fast. Two four-cylinder Ford engines, Sigma and Duratec, are available, with multiple states of tune ranging from 155 to 310 horsepower. The lusty 210-horsepower, two-liter Duratec we drove proved rapid indeed, hitting 60 miles an hour in 3.8 seconds.

Steering is endlessly communicative, direct and razor sharp. Every bit of road and surface information is telegraphed, just as a serious driver might hope, through the small, suede-covered wheel. The Seven R may be driven on the street with as much ease and vigilance as any Caterham (which is to say, enjoy yourself but watch out for bigger vehicles whose drivers might not see you).

Recalling an earlier era, Caterham expects that many enthusiastic owners will drive their cars to and from track and race days. The cars’ light weight, Mr. Steel emphasized, makes them much more economical propositions as weekend racers, with less punishment delivered on components like brakes and tires. But it’s more than that, he said.

The Information : Silicon Valley, Ready to Laugh Again?

Silicon Valley, Ready to Laugh Again?

Over a good many years, “Silicon Valley,” the HBO show, accomplished a very rare feat: It got the elite of Silicon Valley, the place, to laugh at themselves and take themselves a little less seriously, an achievement as difficult as explaining, say, quantum computing. It’s no easy task to win over the set you’re lampooning, making the series’s tech land popularity a real testament to showrunner Mike Judge, who, beneath the gags, often presented techies as bleakly as “Veep” portrayed our nation’s politicos.

As tech has gotten zanier lately, a pressure campaign among fans has mounted for Judge to reboot his show. He has flatly refused. On Sunday evening, a new AMC show, “The Audacity,” hopes to begin occupying the cultural space Judge has given up.

The show is dark, funny and detailed, much as you’d expect from its creator, Jonathan Glatzer, a former “Succession” writer, who enjoys skewering tech mogulness as much as “Succession” delighted in aping Murdochian antics.

Where “Silicon Valley” had Pied Piper and “Succession” had Waystar Royco, “The Audacity” has Hypergnosis, a startup run by CEO Duncan Park (Billy Magnussen). He has just fumbled a sale of his startup to a bigger competitor, Cupertino (yes, really), and faces any number of consequences for it.

Duncan is someone who has thrived through ample self-confidence and a nice smile, but bless him, he’s dim, managing tries at software-is-eating-the-world grand thoughts with the delicacy of Yogi Berra. (In one heated exchange, he confuses Nostradamus and Nosferatu.) Unsurprisingly, he’s in therapy, but by the end of the pilot, he has used an all-powerful, data-guzzling AI to blackmail his counselor (Sarah Goldberg) into becoming a co-conspirator. Duncan’s domestic life is a mess, too, as he and his wife, Lili (Lucy Punch), trade emotional barrages through their pursuit of an open marriage. As these adults scamper and scheme, their children are collateral damage, warped both by their parents’ poor parenting and, of course, the tech products that underpin the prosperity around them.

“I think there are attributes to the Valley that deserve interrogation,” Glatzer said, following a screening of the show I attended earlier this week. “You know that move-fast-and-break-things mentality—a bull-in-a-china-shop metaphor—has become something positive, when in fact it’s like, ‘No, there’s gonna be a lot of broken dishes.’”

Like “Succession,” “The Audacity” has a high-gloss verisimilitude, which is part of the satire. Many of the interiors resemble an OpenAI demo video; I noticed an expensive-looking revolving door that I swear I’ve seen before in a Hillsborough mansion. To burnish the authenticity, Glatzer took as many Bay Area meetings as he could get. Mostly, he met a warm reception—with a notable exception. “Nobody from Apple would talk with me,” he recalled. “It’s probably why Cupertino is mentioned [in the show] so many times.”

While Silicon Valley is littered with the detritus of failed startups, Hollywood back lots are piled up with the remains of shows about tech and startups that never quite took off. Netflix tried one with Rob Lowe in 2023, “Unstable,” for instance, and even though it was very funny, it flopped. Likewise, the more somber “Devs” from director Alex Garland went nowhere on FX. And AMC had only limited luck getting people interested in “Halt and Catch Fire,” a tale about the 1980s PC revolution.

Glatzer hopes he has made Duncan’s graspingness recognizable enough to win over a wide audience—from within Silicon Valley and outside it, too.

“He’s a wannabe titan, and I think that gives him a desperation—a desire to climb up the rungs of the ladder—that makes him relatable,” he said. “He’s not a billionaire. We discussed this, and we estimated that he’s worth just $500 million.”

Fortune : ‘This is the last warning.’ Iran threatens U.S. warships after they th

‘This is the last warning.’ Iran threatens U.S. warships after they throw down the gauntlet for winner-take-all Strait of Hormuz

U.S. Navy ships sent an unmistakable signal Saturday as they crossed the Strait of Hormuz, challenging Iran’s control over the narrow waterway that will likely determine the outcome of the Middle East war.

The USS Michael Murphy turned on its automatic identification system as it and another destroyer, the USS Frank E. Peterson, transited the strait, breaking the typical protocol of Navy ships sailing with their AIS turned off.

“You just don’t throw AIS on by accident on a Navy ship,” Campbell University professor Salvatore Mercogliano, who specializes in military and maritime history, said on his podcast. “This is purposeful. They wanted to turn this on on the far side of the Strait of Hormuz to demonstrate that they have sailed through.”

U.S. Central Command said the destroyers had begun setting conditions for clearing mines that had been placed by Iran’s Islamic Revolutionary Guard Corps.

It added that more U.S. forces, including underwater drones, will join the clearance effort in the coming days, pointing out that the strait is an international sea passage and an essential trade corridor.

In a statement, Admiral Brad Cooper said Central Command is “establishing a new passage” for the maritime industry for the free flow of commerce.

Iran’s grip on the strait, through which one-fifth of the world’s oil and liquid natural gas flowed before the war, has triggered a global energy crisis and represents the regime’s main form of leverage over the U.S.

The destroyers’ crossing of the strait comes as the U.S. and Iran began ceasefire talks in Pakistan this weekend. But if the Navy creates a safe avenue for tankers that doesn’t require getting Iran’s permission and paying a toll, then talks would shift in America’s favor.

As a result, the IRGC challenged the Navy destroyers as they transited, according to a radio conversation recorded by a civilian ship that was shared with the Wall Street Journal.

“This is the last warning. This is the last warning,” the IRGC said.

Fortune : Navy tests Hormuz blockade as expert says U.S. military prepares for r

Navy tests Hormuz blockade as expert says U.S. military prepares for round 2 and could degrade Iran’s hold over the strait to a ‘manageable level’

Ceasefire talks between the U.S. and Iran have begun in Pakistan, but a potential military clash between the two countries is already looming.

On Saturday, U.S. Navy ships navigated through the Strait of Hormuz in a maneuver that wasn’t coordinated with Iran, sources told Axios, marking the first such move since the war started six weeks ago.

The ships crossed the strait into the Persian Gulf, then returned to the Arabian Sea, the report said, with a U.S. official saying the focus was on freedom of navigation.

A statement from U.S. Central Command confirmed that two destroyers transited the strait to begin setting conditions for clearing mines, adding that underwater drones will join the effort.

“Today, we began the process of establishing a new passage and we will share this safe pathway with the maritime industry soon to encourage the free flow of commerce,” said Adm. Brad Cooper, commander of Central Command.

But Iran declared it a ceasefire violation, and a source told Bloomberg that the Navy destroyers were forced to turn back after Iran’s Islamic Revolutionary Guard Corps launched a drone in their direction.

Also on Saturday, President Donald Trump posted on Truth Social on that the U.S. is “starting the process of clearing out the Strait of Hormuz.” Meanwhile, three oil supertankers transited the narrow waterway, representing the biggest day of oil exits through Hormuz since Iran closed off the chokepoint through which one-fifth of the world’s oil passed before the war.

Trump halted his war against Iran for two weeks while talks are underway. But the ceasefire remains fragile as hostilities continued, and Iran maintains a tight grip on the strait.

At the same time, the U.S. military continues to send more combat power to the region. A third aircraft carrier as well as thousands of Marines and paratroopers are expected to arrive later this month. More long-large cruise missiles are also flowing to the Middle East.

“I think we’re kind of getting ready for round 2,” Rapidan Energy founder Bob McNally told CNBC on Thursday. “But as we work on Iran’s ability to disrupt Hormuz, which we unfortunately started way too late but we’re doing that now, Iran’s leverage starts to erode. And I think the conditions for a real ceasefire and a reopening of the Strait of Hormuz, a full reopening, will be stronger later this month than they are right now.”

He compared weakening Iran’s threats to a game of whack-a-mole, listing anti-ship missile launchers, small fast-attack boats, drones, submarines, and long-range artillery.

McNally, who previously served as White House energy advisor to President George W. Bush, also pointed out that the U.S. has reduced Iran’s stockpile of underwater mines that can be used to close the strait.

“It may not be widely reported, but I believe the U.S. military in the last week or so has been focusing on whacking those moles, degrading Iran’s ability,” he added. “You may not perfectly get rid of it, but degrading Iran’s ability to interdict shipping down to a manageable level—and that’s when insurance can come into play and escorts, and folks can start to move through.”

For now, Iran’s missiles and drones are enough to scare ships away, giving Tehran effect control. While a trickle of ships have been allowed to go through, it’s been very selective and a toll of about $2 million is required.

Iran is seeking to formalize this “toll booth” in ceasefire talks, and Trump has even mused that the U.S. could enter into a joint venture with the Islamic republic to extract the transit fees.

But the Gulf states that export their oil and gas through Hormuz have signaled they will not tolerate Iranian control of the strait. Meanwhile, Wall Street has warned it would also threaten U.S. dollar dominance in global trade.

In an interview with India’s Times Now on Wednesday, McNally said allowing Iran to rule over the strait would set a dangerous precedent that would encourage similar behavior in other parts of the world.

“It would be a breakdown in global order and trade and stability,” he said. “It’s hard for me to imagine that the United States would end this conflict leaving Iran strengthened and an ability to sort of extort tolls, not only tolls, but other concessions: diplomatic concessions, foreign policy concessions, military concessions.”

>>> Barron's Week End Summary

Cover:
- SpaceX is set to launch what could be the largest IPO in history, aiming to raise approximately $75B, significantly surpassing previous IPO records. Following its confidential filing on April 1, the company's valuation may approach $2T, making it the sixth-most valuable U.S. company. This IPO could be part of Elon Musk's broader vision of merging his companies, including Tesla, which could create a $3.5T industrial conglomerate. Analysts suggest that while the IPO is crucial for SpaceX, it could also revitalize Tesla's slipping stock. SpaceX has demonstrated impressive market success and innovation, notably becoming the first privately funded organization to successfully launch a liquid-fueled rocket and dramatically lowering launch costs through rocket reusability.

Interview:
- Bain Capital, led by managing partner David Gross, aims to outperform market benchmarks significantly, targeting returns in the top quartiles and seeking to achieve a 1,000 basis-point premium over relevant indices. Founded in 1984 as a separate entity from Bain & Company, Bain Capital preserves a similar analytical and collaborative ethos, focusing on leveraging insights for impactful investments. In a discussion about concerns regarding private credit and software investments, Gross pointed out that not all software businesses are equivalent, emphasizing the stability and cash generation capabilities of many, while cautioning against a generalized negative perception of over-leveraging in the sector.

Tech Trader:
-As Apple prepared to launch the MacBook Neo, targeted specifically at younger consumers, it recognized the need to shift from its traditional marketing strategies. Understanding that Gen Z is indifferent to conventional advertisements, Apple adopted a new, innovative approach. Historically, Apple's marketing included iconic campaigns such as the "1984" Super Bowl ad introducing Macintosh computers, and the renowned "Think Different" campaign featuring black-and-white portraits of notable figures. More recently, Apple TV ads resembled high-budget film productions. However, these methods were deemed ineffective for the Neo, which was introduced at a starting price of $599, or $499 for students, significantly lower than both the iPhone 17 and the MacBook Air. With basic specifications including 8GB of memory, 256GB of storage, and an A18 Pro chip, the Neo is positioned as an appealing option for students.

The Trader:
-The ongoing war continues to create uncertainty in financial markets; however, investor optimism suggests that the worst may be over, contributing to substantial stock gains. Keith Lerner, Truist's chief investment officer, notes that the market may be moving past peak uncertainty, with stocks anticipated to rise even before the conflict is resolved. A recent cease-fire prompted the stock market's best day in nearly a year, with the Nasdaq Composite rising 4.7% in the week, surpassing prewar levels, and both the S&P 500 and Dow Jones nearing significant milestones and all-time highs. Despite this positive market reaction, the situation in the Middle East remains volatile, particularly with blockages in the Strait of Hormuz impacting oil supply, leading to high oil prices and inflation. Upcoming negotiations will be vital in determining the cease-fire's longevity and the potential decline in oil prices. Nevertheless, investors seem to have shifted focus, with the S&P 500 recovering over 60% of the value lost during the conflict, indicating a potential bullish outlook, as noted by Michael Arone of State Street Investment Management.
-The Hormuz Strait serves as a critical transit route for 20% of the world's oil and significant volumes of liquefied natural gas and chemicals. President Trump's recent cease-fire aimed to restore access, but Iran's control over passage remains firm, offering less than a handful of vessels safe passage post-cease-fire. Experts suggest that Iran's dominance serves as a powerful deterrent, complicating operations for other Gulf nations. The potential "fee" for access, reported at $1 per barrel, is seen as unacceptable coercion by leaders in the region, prompting Gulf countries to explore alternative oil transport routes. Saudi Arabia has a pipeline to the Red Sea, while the UAE uses a route bypassing the strait to the Gulf of Oman. Analysts anticipate a push to enhance such bypass pipelines, benefiting construction firms like Saipem, which has previous projects within the region and plans to expand further through a merger with Subsea 7. Meanwhile, SLB, the largest international oil-services company, faces immediate fallout from the ongoing conflict, with expected earnings declines due to production curtailments among key clients. Despite current setbacks, analysts predict a recovery for SLB post-conflict, forecasting a rise in share prices driven by increased upstream spending.

Features:
- Canadian Pacific Kansas City (CP) is positioned to transition from stagnation to growth, presenting potential gains of 20% over the next few years due to several catalysts including merger synergies, increased rail traffic, and an improving industrial economy. CP, formed from the merger of Canadian Pacific and Kansas City Southern in 2023, operates a robust network across Canada, the Midwest, and Mexico, providing it unique access to key ports. This railway is pivotal in transporting a diverse range of goods, leveraging intermodal transport effectively. Over the past two decades, CP has achieved operating profit margins of 37%, among the highest in the industry, although recent freight volume declines have adversely affected its stock performance. Despite facing a freight recession, CP's fundamentals and strategic advantages position it favorably for future growth.
- United Parcel Service (UPS), a well-recognized entity in the logistics industry, has faced significant investment challenges over the years, especially with a 40% drop in shares compared to the S&P 500's 68% gain. Despite management's efforts, UPS is navigating through an array of difficulties, including a post-pandemic shipping market fluctuation and recent labor negotiations that led to substantial wage increases for employees. However, with anticipated operational improvements in 2026 as certain challenges turn favorable, there is potential for a 30% stock gain within a year, supported by the company's low valuation and appealing dividend yield.

Europe:
- USA Rare Earth (USAR) is taking steps to reduce China's dominance in rare earth materials through a new investment in Carester, a French company that specializes in rare-earth processing. This partnership will enable USAR to utilize Carester's oxide output in its metal-making facility, while Carester will receive rare earth feedstock from USAR's Round Top mine in Texas. This move is part of a broader strategy among Western companies to establish a rare-earth value chain independent of China, which controls approximately 85% of global processing capacity. USA Rare Earth’s CEO emphasized the importance of this transaction for developing a sustainable transatlantic rare earth supply chain. Although USAR's mine is not yet in commercial production, this strategic investment aims to enhance its integrated rare earth value chain and promote secure supply sources for the U.S. and its allies.

Emerging Markets:
-The IMF is likely to reduce its global economic growth forecasts, according to Managing Director Kristalina Georgieva. This shift comes despite the most optimistic scenario for the Iran war, contradicting earlier plans to enhance growth predictions driven by technology and AI investment. Georgieva emphasized that a return to prewar conditions is unlikely, citing uncertainties in trade routes and regional stability. The IMF previously projected 3.3% growth in 2026 and 3.2% in 2027, but now anticipates lower figures alongside increased short-term inflation due to war-related disruptions, including significant reductions in oil and natural gas supplies and rising food insecurity linked to fertilizer shortages. The effectiveness of the cease-fire remains uncertain, particularly as tensions mount with ongoing conflicts affecting negotiations.

Commodities:
- Gold and silver prices decreased on Thursday amid uncertainty over the durability of the U.S.-Iran cease-fire. Gold futures fell by 0.9% to approximately $4,736 per ounce, while silver futures dropped 2% to $73.87 per ounce. While the truce initially boosted precious metals due to hopes of renewed interest-rate cuts from central banks, concerns remain regarding Iran's control over the Strait of Hormuz, a critical route for global oil transport. Market analysts suggest that gold's performance around the $4,800 mark could influence buying interest, though there are worries about diminishing upward momentum, especially if the U.S. dollar strengthens.

Streetwise:
-Jack Hough discusses the surprising rise in value of the cheapest stock in America, which has increased by 520% in a year, juxtaposing this fact with the absurdity of a persistently smelly dog receiving four baths. This anomaly is attributed to trends in artificial intelligence impacting stock valuations, particularly among the 10 lowest forward price-to-earnings (P/E) ratios in the S&P 500 index. Hough notes that investing in the lowest P/E stocks over various time frames has led to significant outperformance compared to the S&P 500, with an average increase of 70% in the past year alone. However, Hough is skeptic towards the simplistic nature of relying solely on P/E ratios as indicators of stock value, suggesting that more sophisticated financial modeling is required for accurate valuation assessments.

FT : Will Google’s TurboQuant algorithm hurt AI demand for memory chips?

Will Google’s TurboQuant algorithm hurt AI demand for memory chips?
More efficient artificial intelligence could mean even greater need for semiconductors, say experts

Samsung Electronics’ blowout first quarter has eased investor concerns that a new Google algorithm might threaten the AI-driven boom in South Korea’s memory chip industry.

Citing an “unprecedented supercycle” in the memory chip market, Samsung this week estimated higher profits in a single quarter than in the whole of last year, with no sign that memory was becoming less of a bottleneck for AI companies.

The earnings guidance sent Samsung shares close to all-time highs and eased two weeks of anxiety sparked by TurboQuant, a technology outlined in a Google Research blog post in late March, which promises to drastically reduce the amount of memory required for AI.

The post ignited a fierce and ongoing debate about future demand for high-bandwidth memory, the advanced chips made by Samsung and its South Korean rival SK Hynix that power AI servers.

Some investors believe the memory boom will turn to bust, others think TurboQuant will have little impact, while optimists argue that if the technology does make AI cheaper, it will simply create demand for even more AI, and thus more chips.

TurboQuant “potentially slashes the cost of running large language models by a factor of four to eight”, said Kwon Seok-joon, a professor at Sungkyunkwan University in Seoul. “At first glance, this appears to threaten demand for high-bandwidth memory chips.”

However, “dramatically cheaper inference unlocks workloads previously too expensive to run”, such as real-time coding assistants and multiple AI agents running at the same time, added Kwon, “driving total compute demand higher, not lower”.

TurboQuant works by compressing the so-called key value cache — the short-term memory that allows AI models such as ChatGPT and Claude to retain conversational context — and reconstructing it when needed, with little apparent loss in accuracy.

As AI interactions lengthen and user numbers rise, demands on the KV cache are surging, putting strain on how much memory AI services can afford to use.

TurboQuant offers a way out, reducing the “cost per token”, the amount of computing and memory expense required to process each unit of data handled by an AI system. Google’s researchers claim the approach could cut memory usage by as much as sixfold.

The blog post caused shares of Samsung and SK Hynix to fall sharply last month. But analysts and researchers now suggest that if TurboQuant does work, it is more likely to expand overall memory demand than reduce it — an example of the Jevons paradox, in which greater efficiency increases overall usage of a resource.


Economist William Stanley Jevons noted in his 1865 book The Coal Question that James Watt’s more efficient steam engine had resulted in greater usage of the fuel because it made coal-powered technologies economically viable in far more contexts.

Han In-su, one of the researchers upon whose work TurboQuant is based, told the FT that the algorithm “can serve as a foundation for realising previously impossible high-difficulty tasks, such as processing much longer contexts within limited memory resources without sacrificing accuracy, or implementing high-performance AI on smaller devices”.

In a research note, Kim Young-gun of Mirae Asset Securities invoked “déjà vu” over Kubernetes, a Google-designed “containerisation” technology that made it possible to run multiple applications on a single server, greatly improving hardware efficiency.

Upon its widespread adoption in the late 2010s, there were concerns that demand for servers and memory would fall as companies would need fewer resources to produce the same results. In practice, the opposite occurred, with lower costs encouraging much greater usage.

“The market has largely misread TurboQuant,” said Ray Wang of research firm SemiAnalysis. “We continue to believe that increasing memory demand will be required for both training and inference as AI models evolve and innovation advances.”

Any potential blow to the South Korean chipmakers would be cushioned by the increasing use of long-term contracts from AI service providers seeking to lock in supply, said Wang.

“Memory is becoming a bit less cyclical, driven by accelerating and sustainable AI demand,” he said. “Contract pricing now matters more than spot pricing.”

At Samsung’s annual meeting last month, co-chief executive Jun Young-hyun said the company was pursuing “contracts of three or five years with major clients, shifting from the existing quarterly and annual terms”.

For now, TurboQuant remains a concept in a blog post. Its real-world impact will become clear after it is presented at the International Conference on Learning Representations in Brazil in late April and people outside Google are expected to be able to test it. Its ultimate success will depend on whether the largest tech groups are able to use it at scale.

“We never imagined that a technology that started from the academic question of ‘How can we compress data more perfectly?’ would cause such a huge social and economic ripple effect,” said Han.

FT : Switzerland’s Zug becomes bolt-hole for Gulf-based wealth

Switzerland’s Zug becomes bolt-hole for Gulf-based wealth
Small Swiss town is welcoming individuals and companies seeking refuge from war in the Middle East

In search of a safe haven from conflict in the Gulf, Dubai’s expatriates are homing in on Zug — a picturesque Swiss canton of just 135,000 people better known for commodity traders and cryptocurrency firms.

The influx includes wealthy individuals, family offices and companies, according to Heinz Tännler, Zug’s finance director, who said interest had picked up following the outbreak of the Israel-US war against Iran. “We are seeing increased inquiries,” he said. “Of course, we regret the circumstances — but the reality is Zug is benefiting.”

Wealth managers and bankers say clients based in Dubai, many of them working in commodities and finance, are looking for a stable European base.

“Everyone knows Zug, even if they haven’t been there,” said Pierre Gabris, the founder and chief executive of Swiss wealth manager Alpen Partners, which has helped a number of clients relocate from the Middle East. “The first request from clients is almost always Zug.” 

For many traders and entrepreneurs in particular, who are familiar with Switzerland’s role in global commodities markets, the canton’s reputation precedes it, said Gabris, adding that Alpen is looking at opening an office in Zug given the growth in the market.

One Swiss-based private banker whose bank has a Zug office said the number of CVs from relationship managers at US banks landing on his desk had “quadrupled” since the war began. Another described attending an open house for a two-bedroom rental apartment in Zug last weekend: “The queue was around the block — the person behind me had flown in from Dubai that morning.”

For many would-be arrivals, however, Switzerland’s appeal comes with practical constraints. While EU citizens can move relatively freely under bilateral agreements, securing accommodation — particularly in Zug, which is just south of Zurich — has become the main bottleneck. Rental supply is extremely limited, with properties often snapped up within days and competition intense.

Non-EU nationals face a higher bar. Residency is typically tied to employment, company formation or, for the very wealthy, negotiated lump-sum taxation agreements with cantonal authorities. These arrangements, available in several cantons, allow individuals to pay a flat annual tax based on living expenses rather than global income — but they require advance approval and do not guarantee access to the most in-demand locations.

“You can’t just simply show up, even if you have a European passport. It takes time and you need a work contract or to establish a company,” said Anja Beck, managing partner at an Engel & Völkers real estate office in Zug. 

With availability tightening, other cantons with flexible tax arrangements are beginning to benefit. Lugano, in southern Switzerland’s Italian-speaking Ticino region, is seeing a rise in enquiries from Dubai-based expatriates, according to local agents.

“Since the war started, we’ve noticed demand from foreigners living in Dubai — Italians, French, Swiss, British,” said Simon Incir of Engel & Völkers. “Now they are considering moving away [from Dubai].”

Unlike Zug, Lugano still has capacity. “We have much more availability — around 300 properties on the market,” Incir said, adding that foreign residents can negotiate lump-sum tax deals and obtain residency permits relatively quickly. 

“This is just the starting phase. People are asking, scheduling viewings — we expect more.”

FT : Fees for seas: a history of taxing waterways

Fees for seas: a history of taxing waterways
From Ottoman Sultans to Danish kings, Iran’s toll system for Strait of Hormuz revives an old maritime fight

In the late 18th century a vessel carrying about 50 tonnes of wheat passed through the Dardanelles to modern-day Ukraine. To transit the strait with that modest cargo, the merchant Apaştaş Parasara knew he would have to pay the Ottomans a fee for safe passage.

The duty, called İzn-i sefînei, was about 300 akçe, according to historical records, a measure of silver equivalent to about $15,000 today. It formed part of an elaborate series of tolls and permissions that the Ottomans levied on ships traversing to what they considered their private inland lake, the Black Sea.


Modern maritime law explicitly forbids states from charging ships to pass through territorial waters. But that has not stopped Iran, 230 years later, from saying that it will levy fees of up to $2mn for ships to pass through the Strait of Hormuz, a previously open waterway through which more than a fifth of the world’s seaborne oil and gas transit.

“The whole issue of a toll on an international waterway is complicated and possibly illegal,” said Andrew Rigden Green, a partner in maritime disputes at the law firm Watson, Farley & Williams.

Yörük Işik, a maritime shipping analyst who runs the Istanbul-based Bosphorus Observer consultancy, said: “No fees can be charged for transit on a natural waterway. It would open a Pandora’s box.” Such a scheme could “overturn centuries of maritime law”, he said.


The public announcement of a Hormuz toll system came after the agreement of a shaky ceasefire between the US and Iran. It followed weeks of fighting during which the strait has been shut to all but a handful of ships approved by Iran’s Islamic Revolutionary Guard Corps.

Transits made shortly before the ceasefire were charged on a piecemeal basis, said people with knowledge of the passages, with little clarity about how many vessels were involved in the shadowy transactions.

Iran’s Oil, Gas and Petrochemical Products Exporters’ Union has since said payments should be made in cryptocurrency in order to avoid US sanctions.

Since Iran has sought to exert control over the strait, parallels have been drawn with other narrow waterways that charge fees of various sorts such as the Bosphorus in Istanbul or the Suez and Panama canals.

But Andrew Serdy, professor of the public international law of the sea at the University of Southampton, said these have “their own individual bespoke treaty regimes”. “The Strait of Hormuz is, for the moment at least, under the general international law of the sea.”

Outside specific treaties, the only country to have exerted financial control over a strait for an extended period is Denmark, which from about 1429 applied tolls on the Øresund. Ships were required to stop at Elsinore, the backdrop for William Shakespeare’s Hamlet, and pay 1-5 per cent of their cargo value to the Danish crown.


The practice of charging “sound dues” was stopped after an increasingly powerful US pushed back against the scheme. A British House of Commons report at the time described the levies as “the most objectionable in taxes that fall upon trade” arguing they were “unequal in their operation, and they occasion great loss of time”.

A treaty ending the practice, with parties paying compensation to Denmark for the loss of revenues, was agreed in 1857.


Paying fees continues for the Suez and Panama canals, providing billions of dollars each year to their respective authorities. These are under agreed treaties which allow for fees to cover maintenance and infrastructure.

Serdy said: “The canals run through land territory where the states concerned — Panama, Egypt — have complete sovereignty subject only to the treaties in question and are therefore entitled to charge tolls.”

The Suez Canal is the most lucrative of the waterways, reaping a record $10.3bn in transit fees in 2023 before conflict in the Middle East choked traffic in the region and sent the majority of cargoes around the Cape of Good Hope.


By comparison, the analytics firm Kpler estimates that formalising the Strait of Hormuz into a fee-paying corridor could deliver $5bn-$8bn annually to Iran and Oman, whose territorial waters cover the southern half of the strait, if such an agreement were possible.

Experts suggest the Bosphorus, a Turkish territorial waterway, is the nearest comparison to Hormuz. It is governed by the Montreux Convention, which allows Ankara to charge ships not for transit but for lighthouse, health inspection and rescue services, calculated based on net tonnage. The revenues amount to about $250mn from ships that do not dock.

All that the Iranians would be offering in terms of services would be security from its own military and any potential mines in the main shipping lanes, experts noted.

George Macheras, global head of maritime sector at Watson, Farley & Williams, compared fees being charged and collected by the Revolutionary Guards to the British military charging for use of the English Channel.

However, he noted that neither Iran nor the US has ratified the UN Convention on the Law of the Sea, which governs international maritime passage. Donald Trump has both criticised the Islamic regime for demanding fees for safe passage and suggested Washington might someday join Tehran in a fee-paying venture in the strait.

Iran and the US also disagree with how international law should be applied to Hormuz, with Tehran long signalling that it would like to exercise more control over the critical strait.

When it signed the convention in 1982, Tehran issued a declaration stipulating that countries not party to the treaty, such as the US, would not be able to enjoy rights of free passage through the strait.


What makes the Strait of Hormuz unique compared to all of the other examples is that the Iranians “have only got one side”, whereas the other countries control both sides of the waterways, said Helen Doe, maritime historian at the University of Exeter.

“There have always been historical clashes because of these chokepoints,” she added.

Gulf and western governments, along with shipowners, have expressed frustration and resistance to restriction of the previously open route.

“We do not believe the payment of fees aligns with international law and we would oppose their imposition,” said Phillip Belcher, marine director at Intertanko, the association for independent tanker owners. “We’re amazed that a starting point for negotiations in Pakistan is that a toll and sovereignty of the strait could be discussed.”

FT : Aston Martin shares and bonds sink to record lows over cash crunch fears

Aston Martin shares and bonds sink to record lows over cash crunch fears
One credit investor says it is unclear who will be luxury-car maker’s latest ‘white knight’

Aston Martin’s shares and bonds have sunk to record lows as investors, spooked by the UK luxury-car maker’s cash burn, race to dump their exposure.

The sell-off of Aston Martin debt this year has accelerated in the past month, with the price of bonds worth more than £1.5bn falling below 80p on the pound this week from about 95p at the start of the year.

Meanwhile, the carmaker’s shares have also slumped this year and were trading at about 42p on Friday, giving the company a market value of about £430mn. It listed in 2018 at £19 a share and a £4.3bn valuation.

Its largest £1.05bn bond, paying a 10 per cent interest rate, reached a low of 75p on Tuesday. The price drop means that credit investors are now asking for a yield of more than 20 per cent to hold any of the company’s debt.

Aston Martin’s poor performance across equity and debt markets comes as it faces a cash crunch in the coming months without a financial lifeline.



“They’re very close to running out of cash and I’m not sure, in this environment, who will be their white knight this time,” said one high-yield credit investor. “We ultimately believe the company will run out of liquidity by the end of the second quarter and be required to raise.”

Aston Martin declined to comment.

The group, whose shareholders include Canadian billionaire Lawrence Stroll, China’s Geely and Saudi Arabia’s Public Investment Fund, has struggled for years to generate steady cash flow and profits, depending on support from shareholders to stay afloat.


Last year, Aston Martin blamed some of its financial woes on a slower than expected rollout of its hybrid Valhalla supercar model. It is also heavily exposed to US President Donald Trump’s tariffs on cars imported from the UK.

The company raised more than £125mn last year following the sale of its minority stake in the Formula 1 racing team and additional investment from Stroll, who is also the group’s chair, as it suffered from the impact of Trump’s tariffs on US sales.

Earlier this year, it announced plans to raise another £50mn in cash by selling the rights to use its name for the F1 racing team, as it warned of a bigger than expected annual loss. The sale of branding rights to the F1 team’s holding company, AMR GP Holdings, in effect marks another cash injection from Stroll, who indirectly controls AMR.

Alongside those plans, revealed in February, the company also announced its third profit warning in the past year, telling investors that its adjusted annual loss before tax and interest would be “slightly below” the lower end of analysts’ expectations of £184mn. 

“The shareholders have stepped up, either in the form of equity or with more creative solutions like the naming rights, and investors on the long side need to believe that this will continue to happen,” wrote Helen Rodriguez, head of European special situations at CreditSights, in February.

Aston Martin ended the 2025 financial year with £250mn of cash, before announcing the £50mn it would raise by selling its F1 naming rights, according to annual results signed off by its auditor.

It burned through £321mn of cash in the first half of 2025 and £313mn over the same period in the previous year.

In annual results published in February, Aston said it expected a “material improvement in financial performance driven by an enhanced product mix, benefits from the ongoing transformation programme and disciplined approach to operations” for 2026.