The Decline of Rational Debate and The Return of the Shepherd Boy

Good Morning Ladies and Gentlemen

“When disruptions are constant, labelling each one as unique starts to lose credibility and conceptual usefulness.”

Tracy Alloway, Bloomberg

I am consistently taken aback by the lack of respect for science in certain circles, where some voices subtly undermine it by dismissing expert judgment as cold and unfeeling, while simultaneously elevating wishful thinking to a status of moral certainty. This pattern undermines the fundamental foundation of rational debate. I cannot think much of it.

The Shepherd Boy and the Wolf

„The Shepherd Boy and the Wolf,“ also known as „The Shepherd and the Wolf,“ is a fable traditionally attributed to Aesop. It was later adapted into verse by Jean de la Fontaine in Volume 2 of his collection, “Fables Choisies” (1764). The story revolves around a shepherd boy who, feeling bored while watching over his sheep, shouts „Wolf!“ at the top of his lungs. When nearby villagers rush to his rescue, they realise it was a false alarm and have wasted their time. Eventually, when the boy genuinely encounters a pack of wolves, the villagers no longer heed his cries for help and ignore him as they continue with their daily routines. Consequently, the wolves end up devouring the entire flock and, in some versions of the fable, the boy as well.

Liberation Day

Endless nonsense. The much-anticipated American industrial renaissance associated with “Liberation Day” has effectively been abandoned and is unlikely to materialise. There is no discernible evidence indicating that a meaningful number of manufacturing jobs have returned to the United States.

Mixed Messages

U.S. President Donald Trump is once again conveying mixed messages regarding the peace talks with Iran. On a positive note, he has cancelled an attack on Iran that was initially planned for Tuesday, suggesting that the ceasefire is currently holding. At the same time, he has expressed optimism about the potential for an agreement that would protect the interests of neighbouring countries while encouraging Iran to abandon its nuclear program. Conversely, he has also indicated the possibility of renewed military action if no agreement is reached. Thus, it remains to be seen what the outcome of the talks will be.

Crude Oil

Nevertheless, in light of the ongoing tensions in the Strait of Hormuz, the projected oil price range of USD 150 – 200 per barrel seems unrealistic to me. A significant 80% surge was observed in early March, followed by a period of consolidation. While the futures markets indicate potential for prolonged disruption, there doesn’t appear to be an expectation of extreme price spikes. Because President Trump has said that negotiations with Iran are progressing, which increases the likelihood that the Strait of Hormuz will reopen, I take that as a positive bias. This could facilitate an increase in oil production from the Gulf region, albeit with a possible two-month timeframe for production and distribution to return to normal levels. Financial markets would nevertheless likely respond positively to this, potentially exerting downward pressure on oil prices. Additionally, it’s essential to monitor the El Niño effect, which I discussed in a recent edition of „Stefan’s Weekly,“ as it could also help reduce tensions in crude oil markets.

Conclusion

Financial markets are likely to remain challenging, yet optimism continues to provide underlying support.

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li. Many thanks, indeed!

I wish you an excellent start to the day and weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
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Mail: smk@incrementum.li