On The Deals Shaping Our Economy
Ika here. The ceasefire is fraying in real time. Brent ripped past $115 a barrel Monday after Iranian fast boats and cruise missiles met U.S. Apaches and Seahawks near the Strait of Hormuz. Donald Trump calls it "Project Freedom." Tehran calls American warships an "aggressor army." The New York Fed's John Williams is using the words every market dreads: "wide-ranging supply shock." Pump prices already touched $4.45 - Eurasia Group says $5 by June is "unavoidable." Meanwhile in Oakland federal court, Elon Musk allegedly texted OpenAI's president a threat that reads like a Bond villain's calling card. And in Kolkata, Narendra Modi just toppled a 15-year dynasty.
🚢 The Strait Reignites
Why it matters: The Iran ceasefire shattered Monday when U.S. and Iranian forces traded fire near the Strait of Hormuz, dragging the world's most important oil chokepoint back to the brink of war.
Driving the news: Trump's "Project Freedom" launched Monday to guide merchant ships through the strait. Iran answered with cruise missiles, drones and fast boats.
Two American-flagged commercial vessels transited safely.
U.S. Apache and Seahawk helicopters eliminated six Iranian small boats threatening commercial ships.
No U.S. Navy ships or American-flagged vessels were hit, CENTCOM commander Adm. Brad Cooper said.
The intrigue: Iran's warning was unambiguous.
"We warn foreign armed forces, particularly the US aggressor army, that if they attempt to approach or enter the Strait of Hormuz, they will be attacked."
By the numbers:
Brent crude: Spiked to $115.30, settled 5.8% higher at $114.44.
30-year Treasury yield: 5.03% - highest since last summer.
S&P 500: Down 0.5% off record highs.
U.S. footprint: 15,000 troops, 100+ aircraft, multiple destroyers.
Stranded: 1,000 commercial vessels and 20,000 seafarers since February.
Zoom in: The UAE took its first Iranian hits in nearly a month.
Air defenses intercepted three of four cruise missiles. The fourth fell into the sea.
An Iranian drone sparked a major fire at a Fujairah petrochemical site - home to the UAE's largest oil storage.
Three Indian nationals were killed.
A ship burned 14 nautical miles west of Mina Saqr.
"Iran's dangerous escalation and targeting of civilians is nothing but a sign of the moral bankruptcy of a regime that has chosen aggression as its approach to dealing with its neighbors."
What we're watching: Pump pain.
U.S. petrol hit $4.45 Monday, up from $2.98 before the war began Feb. 28.
Eurasia Group: $5 per gallon by June is "unavoidable" - even with a deal.
The Fed factor: John Williams warned the war could trigger "a larger and broader-based supply shock that has more severe adverse consequences for inflation and economic activity."
"We've shot down seven small Boats or, as they like to call them, 'fast' Boats. It's all they have left."
⚔️ Musk's Threat
Why it matters: The world's richest man allegedly sent OpenAI's president a text that reads like an extortion note - and a federal judge just blocked the company from using it at trial.
Driving the news: On April 25, the weekend before his blockbuster trial began, Musk reached out to Greg Brockman to "gauge interest in settlement," per OpenAI's filing in Oakland. Brockman suggested both sides drop claims.
Musk's reply, per the filing:
"By the end of this week, you and Sam will be the most hated men in America. If you insist, so it will be."
The backstory: Musk co-founded OpenAI with Sam Altman and Brockman in 2015, then walked away. He's now suing to unwind OpenAI's transition from nonprofit to for-profit and oust both men.
Between the lines: Judge Yvonne Gonzalez Rogers denied OpenAI's request to question Brockman about the message. She slammed the startup's lawyers for trying a "backdoor" approach - they should've asked Musk directly when he testified.
Zoom out: The stakes are severe.
OpenAI is valued at $852 billion.
A trillion-dollar IPO is teed up for this year.
Microsoft owns 27% - a $135 billion stake - and is accused of "aiding and abetting."
The intrigue: OpenAI's defense punched back with Musk's own paper trail.
2017 emails show Musk pushed for a for-profit structure where he'd own 55% equity.
When colleagues balked, he pulled donations and emailed:
"Guys I've had enough...Either go do something on your own or continue with OpenAI as a non-profit."
Musk later launched xAI to compete.
Brockman's personal journal, surfaced in discovery, reads like a confession:
"[I] can't see us turning this into a for-profit without a nasty fight. [Musk's] story will correctly be that we weren't honest with him in the end about still wanting to do for profit just without him."
And:
"This is the only chance we have to get out from Elon...Financially, what will take me to $1bn?"
What we're hearing: On the stand last week, Musk admitted xAI "distilled" ChatGPT to improve Grok - and conceded Anthropic was "number one" in AI right now.
The bottom line: Two former friends. One charity. A trillion-dollar fight over who owns the future.
🪷 Modi's Bengal Earthquake
"The Lotus blooms in West Bengal!" The election, he said, would "be remembered forever."
Why it matters: Narendra Modi's BJP just toppled one of India's most entrenched political dynasties - in a state where the party held zero seats a decade ago.
Driving the news: The BJP unseated Mamata Banerjee, the leftwing Trinamool Congress chief minister who ran West Bengal for 15 years.
The big picture: Modi is wrestling with Iran-war fallout just as voters hand him a political windfall.
The rupee has plunged to a record low.
Cooking gas shortages are rippling through Indian households.
The government is suppressing fuel prices and forcing refineries to ramp domestic LPG output.
The backstory: The Bengal campaign was bitter.
The election commission scrubbed 9 million names from voter rolls, citing duplicates and illegal migrants from Muslim-majority Bangladesh.
Home Affairs Minister Amit Shah called migrants "infiltrators."
Banerjee called the result "an immoral victory" and the process "totally illegal; it is loot, loot, loot."
What's next: Modi's comeback arc keeps lengthening. The BJP lost its parliamentary majority in June 2024 - and has won state after state since, including New Delhi for the first time in nearly three decades.
The bottom line: Congress MP Shashi Tharoor called the day "transformative." For Modi, it's permission to push harder.
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