Blain’s Morning Porridge April 8th, 2026: The Big Risk is No Longer Oil – Its Political Credibility.
“If you attack Persia a mighty empire will fall.”
Trump took the Off-Ramp. Markets are soaring, off to the races as the threats of global slowdown, recession and stagflation recede. But, for all the military power and competency on display – it’s a strategic defeat for the USA. That has massive implications for US Assets – Treasuries, Stocks, Investment, Market Confidence and Politics.
It’s a double Porridge Morning – I will be out with a second Morning Porridge later this morning announcing a new Book!
But first… A rant about Politics.
President Trump took the Ceasefire Off-Ramp last night. Joy unconfined across markets. In the next few days oil, gas and the rest will likely flow out the Strait of Hormuz. Trump will claim the credit, but will anyone pay much attention to him? There will still be oil dislocations and there will still be uncertainty as to what follows, but this morning Markets believe it’s all over.
It probably is.
Trump is a creature of limited patience – as evidenced by the recent tone of his Truth Socials. He was very aware Iran had become a difficult to win war, impossible in the timeframe before the US Midterm elections. He has therefore taken the easy option. He will say he’s won – but he’s walking away from an unfinished fight. The Americans will leave some assets in the region, tell everyone loudly they are ready… We’ve seen this before.
A humiliated and wounded Trump is not a positive for the US political economy – for bonds, stocks, the inward investment Trump thinks has been promised to him, or market confidence. Brand America has been tarnished. Trump punched the hornet’s nest but it’s still there. Iran may be pockmarked by piles of rubble, but the real damage is the cumulative effect on American credibility.
Some think Trump is accelerating into angry irrelevancy – the real question to ask is who and what replaces him on the 2028 Ballot? That’s a worrying picture – a black hole of political polarisation as the Democrats continue to amble around in leaderless shock, while the Republicans still don’t get their party was captured from underneath them by the Right. MAGA strategists know it makes sense to retain Trump in place to keep the political instability pot boiling over, trying to persuade American voters it’s best to stay the course with him, and only the US Right has a plan. Watch for divergence as the Rubio and Vance camps seek to present themselves as the voice of sweet reason.
Iran looks a strategic defeat for America. Militarily, the Yanks literally smashed it. In terms of global influence and power projection – not so much, and that’s what counts.
China was closely involved in last night’s deal – advising Iran to give Trump the offramp. That suits China well – they’ve watched the US military expend munitions at a prodigious rate, collected plenty of data on how they fight, and know there are limited US resources elsewhere. Economically, they emerge stronger as the threat of global recession or stagflation recedes. They have Iran oil back online, and they now have options to strike new deals across the Gulf with States that understand China has leverage in Tehran. “Never interrupt your enemy as they make mistakes.”
The critical issue is the Strait of Hormuz. Iran has the keys. Ceasefire or not, Iran has thousands of sea-mines it can close off the strait with at any time of its choosing – a card China will hold close.
What really happened in DC last night? I guess we will have to wait for the post Trump memoirs to come out before a full picture emerges. It will not enhance the credibility of the Trump regime.
One of my connected DC chums called me y’day to tell me Trump would find an off-ramp. “Don’t call it TACO” (Trump Always Chickens Out)” he told me but then described Trump as a “cornered rat”. His threats to bomb the Crazy Bastardsback into the Stone Age misfired badly with the otherwise somnambulant Republicans in Congress. The Military – which had delicately advised him against war – is beginning to find a voice and was unhappy at the legality of orders to bomb civilian infrastructure. There is rising dissent in the Pentagon – Sec of Defence Hegseth looks to be on borrowed time. The financial markets are asking tough questions. Meanwhile the MAGA faithful are turning against him.
Internationally? Is anyone fooled? Does anyone believe this was Great Man diplomacy? No. This was reality games. The Gulf States find themselves with a still intact but wounded Iran on their borders. Israel is determined to fight a war in Lebanon.
It looks like the beneficiaries are China and Pakistan. Pakistan’s last-hour intervention to broker a ceasefire was brokered through World Liberty Financial founder Zac Witkoff, son of Trump’s special envoy Steve Witkoff, working with his crypto Bros in Islamabad. The Trump brothers are on the board of World Liberty.
Pakistan is now American’s regional sounding board. Premier Shehbaz Shariff and Field Marshal Asim Munir are Trump’s closest friends in Asia – ever since Trump insulted Indian Premier Narendra Modi over the deal he claimed to have personally sorted-out during the last outbreak of fisticuffs between the two states. Trump believes he has a relationship with Pakistan. You see how this works: not state diplomacy, but crony capitalism.
That’s not a good look when trying to sell US Treasury Bonds… The surest way to bankrupt a nation is through debasement, corruption and the breakdown of the rule of law.
The reality is Pakistan is very close to China – it was Chinese stand off Anti-Air missiles that administered a slapping to the Indian Airforce last year. Yet again Trump is aligning the USA with the China/Russia axis.
Meanwhile… what will Europe do? Trust is finite thing.
Out of time, off to launch a book and do the day job!
Bill Blain
Author of the Morning Porridge
CEO Windshift Capital
Advisor – Spitfire Strategic Capital
