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What Is Risk? | Seeking Alpha

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What Is Risk? | Seeking Alpha

Modern Trading Technology Background. Trading Chart Symbol Showcasing Running Codes and Technological Processes of Trading Bot

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The risk that matters most is the risk of permanent loss [of capital]. – Howard Marks


The many varieties of risk

“Risk” is a funny word. In the context of investing, it is used constantly; however, if you ask somebody to define what he or she really means, you are likely to be met with plenty of hesitation. “Risk” is one of those words we all use every day without giving too much thought to what it actually means.

When I think about risk, though, one definition towers over and above all the other ones. To me, when investing, “risk” is mostly, but not exclusively, about the risk of permanently losing your capital. Whichever of those silos above you think offer the best description of risk, in almost all cases, the risk of a permanent loss of capital hovers above it. In the following, I will talk about how the risk of that can be minimised.

How to measure risk

When professional investors manage risk, two measures of risk tend to dominate:

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  • (equity) beta; and
  • value at risk (VaR).

Allow me to spend a minute on how to define the two terms. Equity beta is a measure of the sensitivity of a stock (or portfolio) relative to movements in the equity market. If you assume the equity market is represented by S&P 500, an equity beta of 1 suggests the stock in question will move in line with S&P 500, whereas an equity beta suggests the stock in question is more (less) volatile than S&P 500.

The beta can be measured against other benchmarks as well – doesn’t have to be against the equity market. If, for example, you wish to measure the sensitivity to commodity prices, you calculate the commodity beta, etc, etc.

VaR is a bit more complicated. It is a measure of the maximum expected loss over a given time horizon and at a pre-defined confidence level (typically 97.5% or 99%) assuming normal market conditions . The latter is a very important assumption.

The primary problem with both of those measures is that they are akin to rear-mirror viewing. One cannot be sure that history will repeat itself, and both measures depend, to a significant degree, on historical patterns being repeated. That said, there isn’t much you can do to improve the analytical outcome. One option is to introduce a Month Carlo model when calculating the VaR, which will eliminate the dependence on history, but that won’t protect you against every possible outcome.

Every day, we calculate the equity beta on every single holding in our fund, and we calculate the portfolio VaR. In terms of the latter, we work with a self-imposed limit of 3%; i.e. we aim to keep the portfolio’s 97.5% 1-day VaR below 3%.

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How you should manage risk

Most private investors don’t have the tools, nor the time, to spend hours every day on risk management, so a more pragmatic approach is warranted. I suggest the following approach: identify a handful or two of indicators which, historically, have led to the party coming to an abrupt end. To me, the ten most important ‘end of secular bull market’ indicators are listed in Exhibit 1 below.

Exhibit 1: End of secular bull market indicators

Exhibit 1: End of secular bull market indicators

Sources: The Felder Report, Absolute Return Partners LLP

I work with these indicators in a rather simple way. Essentially, the more boxes I can tick, the more likely, I believe, it is for the secular bull market to come to an end rather soon. Now to the serious part: All ten boxes are currently ticked off! That tells me that the end might not be that far away. Three caveats:

1. Secular bull markets rarely end ‘just’ because equities are expensive. Some sort of catalyst shall be required.

2. When going through this exercise, you may end up with a different set of indicators than me but that matters less. Choose those that you are comfortable with and that have worked for you over the years.

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3. Timing is the most difficult part of an exercise like this, and it is easy to be (too) early – in fact so early that it poses real career risk to professional investors, and that is probably why many prefer to stay on the train until it is too late to get off without an injury or two.

Re the last point, I learnt in 1990 when Tokyo Stock Exchange crashed, and again in 2000 when the same happened in New York, that most investors prefer to participate in the party to the very end, knowing very well that they may end up with plenty of (rotten) egg on their face.

Nothing has convinced me that investors have changed even the slightest. Momentum continues to drive markets forward, whatever asset class you look at, and the crowd mentality is stronger than ever. That is sort of a “if my neighbour got rich on gold, why shouldn’t I do the same?” mentality, which is very dangerous.

Allow me to finish this month’s Absolute Return Letter by sharing a chart from Goldman Sachs (GS) which shows how abundant speculative fever currently is (#5 on the list above). The chart was produced last October, i.e. it only provides 2025 data through September, but there is no reason to believe that anything happened in 4Q25 which would change the picture.

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Exhibit 2: Price return on various US equities (Note: 2025 to 30 September)

Bar chart showing Price return on various US equities from 2025 to 30 September.

Source: Goldman Sachs Global Investment Research

Now to my point: If Nasdaq stocks with no revenues delivered the highest return to US investors in Q1-Q3 last year, and if unprofitable Nasdaq stocks came joint second, isn’t that about as strong a signal you can get that speculative fever is ample?

I could indeed provide plenty of other charts to support the issues I listed in Exhibit 1 but will only do one more – leverage is high (#8). Exhibit 3 below is testament to the fact that it is not only retail investors who get carried away from time to time. As you can see, in recent years when equity returns have been particularly strong, what have hedge funds done? Piling on ever more leverage, is the answer. This can only end in tears.

Line chart showing Hedge fund borrowings by source from 2013 to 2025.

Line chart showing Hedge fund borrowings by source from 2013 to 2025.

Source: Apollo Global Management

Final few words

In the fund we manage, we are, at least to a degree, caught in the same dilemma. It is easy to see (many) equities are overvalued, but by going too conservative you risk missing out on returns. Consequently, we remain nearly fully invested but with a defensive twist. We hold large positions in low beta equities and in certain commodities which tend to do much better than equities when stocks decline. Most importantly, we hold plenty of gold.

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Rather surprisingly, our ‘defensive’ approach still led to extraordinary returns in 2025. We finished the year delivering +29.24% net to USD investors. That is obviously very pleasing; however, at the same time, I find it uncharacteristically worrying. If you deliver almost 30% to your investors, do you in fact take more risk than you think you do? Finding the answer to that question has kept us very busy in January.

Niels


© Absolute Return Partners LLP 2026. Registered in England No. OC303480. Authorised and Regulated by the Financial Conduct Authority. Registered Office: 3 rd Floor, 45 Albemarle Street, Mayfair, London W1S 4JL, UK

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Important Notice

This material has been prepared by Absolute Return Partners LLP (ARP). ARP is authorised and regulated by the Financial Conduct Authority in the United Kingdom. It is provided for information purposes, is intended for your use only and does not constitute an invitation or offer to subscribe for or purchase any of the products or services mentioned. The information provided is not intended to provide a sufficient basis on which to make an investment decision. Information and opinions presented in this material have been obtained or derived from sources believed by ARP to be reliable, but ARP makes no representation as to their accuracy or completeness. ARP accepts no liability for any loss arising from the use of this material. The results referred to in this document are not a guide to the future performance of ARP. The value of investments can go down as well as up and the implementation of the approach described does not guarantee positive performance. Any reference to potential asset allocation and potential returns do not represent and should not be interpreted as projections.

Absolute Return Partners

Absolute Return Partners LLP is a London based thematic investment manager committed to megatrend investing. We aim to benefit from long term thematic trends including Climate Change, the Era of Disruption, Last Stages of the Debt Supercycle among others. You can find more information about the megatrend we invest in accordance with on our website.

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We are authorised and regulated by the Financial Conduct Authority in the UK.

Visit Home | Absolute Return Partners to learn more about us.


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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

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U.S. housing markets where million-dollar listings are standard

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U.S. housing markets where million-dollar listings are standard

Kite aerial of Brant Point and harbor and Coatue, Nantucket, MA.

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The tiny island of Nantucket, Massachusetts, is home to some 14,000 year-round residents. Joining their ranks will cost you at least $1 million, according to a new list of luxury housing markets by Realtor.com.

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Nearly all of Nantucket’s active listings are priced at $1 million or higher with a median listing price of $4.08 million, the real estate platform found. The island averages 138 million-dollar listings a year, according to the report.

Vineyard Haven, a community within neighboring Martha’s Vineyard, Massachusetts, has the second-highest concentration of million-dollar listings at 90% of the active listings with a median listing price of $2.4 million. Jackson, the principal town of the Jackson Hole valley in Wyoming, boasts the third-highest median price at $1.75 million.

Realtor.com identified 13 U.S. housing markets where at least half of active listings were priced above $1 million but with fewer than 500 such listings. Anthony Smith, senior economist at Realtor.com, said the list was designed to highlight “pure luxury” markets rather than areas that happen to reflect high regional housing costs.

Most of these housing markets are defined by scarcity, according to Smith. The front-runners, Nantucket and Vineyard Haven, are prime examples as they’re both located on islands.

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“You have finite land, strict building and preservation codes, and that combination sets a real premium on what’s available,” he said.

This scarcity applies to noncoastal hubs such as Jackson, too, he said, where land is abundant but much of it is earmarked for conservation. Only 3% of land in Jackson Hole is privately owned.

While five of the luxury hubs identified by Realtor.com are in California, the rest are scattered across the country, from Kapaa, Hawaii, to Hailey, Idaho. A notable inclusion on the list is Petoskey, Michigan, where 53% of active listings are priced over $1 million. While it doesn’t carry the same name recognition as Nantucket or Napa, the Lake Michigan town checks a lot of boxes for deep-pocketed buyers, Smith said.

“When you look at what defines a luxury market, it’s all there: waterfront views on Little Traverse Bay, ski access in the winter, resort-style living,” he said.

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He added that Petoskey is one of the more affordable markets on the list with a median listing price of $1.1 million.

The top 1% of Petoskey homes — representing the ultra-luxury market — start at just under $8 million, while the same threshold starts at nearly $59.2 million in Rifle, Colorado (also on Realtor.com’s list), about 70 miles away from Aspen.

While high-income consumers are propping up spending in travel and other categories, the luxury housing market is showing signs of softness like the overall housing market, according to Smith.

The luxury threshold, or 90th percentile of homes, stood at $1.25 million nationally in March, down 2.9% year over year, while the overall median price is down 2.2% annually, according to Realtor.com.

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Prices are firming up into the spring across the housing spectrum, however, with the luxury threshold up 3.7% and the overall market rising 3% from February.

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Is Gmail Down Now? No Major Outages Reported as of April 9, 2026, Despite Routine User Complaints

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Google Gmail

Gmail, Google’s ubiquitous email service used by billions worldwide, showed no signs of a widespread outage Thursday as independent monitoring sites and Google’s official status dashboard confirmed all systems operational.

Google Gmail

Real-time trackers like Downdetector and IsItDownRightNow reported only normal, low-level user complaints typical for a service handling enormous daily traffic volumes. Google Workspace Status Dashboard listed Gmail as fully available with no active incidents as of April 9, 2026. Any reported difficulties appeared isolated or related to individual user connections rather than a platform-wide failure.

The surge in “is Gmail down” searches on Thursday echoed a common pattern: users experiencing brief sync delays, login hiccups or delivery lags often assume the worst, especially during peak morning hours when professionals check inboxes globally. However, checks across multiple platforms confirmed Gmail’s core functions — sending, receiving, logging in and accessing via web or mobile apps — remained intact.

Google’s official dashboard, which provides real-time visibility into Workspace services including Gmail, showed green status across all regions. No service disruptions or advisories were posted for April 8 or 9. The last notable Gmail-related incident occurred on Jan. 24, 2026, when spam filters temporarily failed, causing misclassification of emails and extra warnings in inboxes. Google resolved that issue within hours, and no similar events have surfaced since.

Gmail powers personal accounts for consumers and serves as the backbone of Google Workspace for businesses, schools and governments. With more than 1.8 billion active users estimated in recent years, even minor perceived issues can trigger widespread online speculation. Yet Thursday’s chatter did not reach levels associated with true outages, such as the brief disruptions seen in early 2026 or previous years.

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Common troubleshooting steps recommended by Google often resolve most user-reported problems: checking internet connectivity, updating the Gmail app, clearing browser cache, or trying the web version at mail.google.com. Many complaints stem from local network congestion, device settings, VPN conflicts or temporary delays in email delivery rather than server-side failures.

Google has invested heavily in infrastructure resilience, with data centers worldwide and sophisticated redundancy systems. The company’s global network helps minimize downtime, though the sheer scale of operations means occasional localized glitches occur. In 2026, Gmail has maintained high uptime, with only isolated incidents like the January spam filter anomaly and minor regional throttling discussions earlier in the year.

Earlier in 2026, some users experienced challenges related to authentication changes. Google fully retired Basic Authentication for Gmail in 2025, requiring OAuth 2.0 for third-party email clients. Microsoft’s staggered timeline for similar changes created temporary confusion for users managing multiple accounts, but those transitions concluded without major service interruptions.

Regional email issues surfaced briefly in late 2025 and early 2026, affecting Gmail alongside Outlook and Yahoo in some areas due to infrastructure strain or throttling. Those events resolved quickly, and no recurrence appeared on April 9.

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For businesses relying on Google Workspace, admins can check the detailed Service Health dashboard in the admin console for tenant-specific insights. Consumer users benefit from the public status page and community forums for real-time feedback.

Gmail’s evolution continues with AI-powered features like Smart Compose, spam protection enhancements and integration with Gemini. These additions increase system complexity but have not led to significant reliability issues in recent months. Google routinely rolls out updates, sometimes causing brief compatibility hiccups that users mistake for outages.

In Seoul and other international locations, access depends on local networks and any regional restrictions. Thursday checks showed normal performance across major regions, including Asia-Pacific.

Industry experts note that true Gmail outages trigger rapid spikes on Downdetector — often tens of thousands of reports within minutes — accompanied by official acknowledgments from Google. In contrast, April 9’s reports remained in the low hundreds, consistent with baseline noise for a service of Gmail’s magnitude.

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Users facing persistent problems should:

  • Verify internet connection stability.
  • Update the Gmail app or browser.
  • Try incognito mode or a different device.
  • Check Google Workspace Status Dashboard.
  • Contact support through the app or help center for account-specific issues.

Google encourages reporting ongoing difficulties so engineering teams can investigate. Most cases resolve without intervention as transient network conditions improve.

The episode underscores the high expectations placed on always-available digital services. In an era of remote work and instant communication, even short delays in email access can disrupt productivity and spark frustration. Gmail’s reliability record remains strong overall, with uptime consistently exceeding 99.9% in recent analyses.

Google Workspace, which includes Gmail, Drive, Meet and other tools, serves millions of organizations. Any perceived downtime in one component can cascade into broader concerns, but Thursday’s data pointed to business as usual.

Looking ahead, Gmail will likely see continued enhancements, including stronger AI filtering and security features. Users should keep apps updated and enable two-factor authentication to minimize personal disruptions.

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As of late Thursday in Seoul time, Gmail operated normally according to all major monitoring sources. Scattered user reports did not indicate a systemic problem, and Google had issued no alerts.

For the most accurate status:

  • Visit the Google Workspace Status Dashboard at workspace.google.com/status.
  • Check Downdetector.com/status/gmail for crowd-sourced reports.
  • Use the Gmail app or mail.google.com directly.
  • Follow official channels for any announcements.

In summary, Gmail was not down on April 9, 2026. Any individual issues likely stemmed from local factors rather than a service outage. Google’s infrastructure continues to support billions of emails daily with minimal interruption, reinforcing its position as one of the world’s most reliable communication platforms.

This situation highlights the interconnected nature of modern digital life. When email falters for even a moment, the ripple effects highlight our dependence on cloud services. Yet Gmail’s track record demonstrates robust engineering that keeps most users connected without incident.

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Barclays reiterates Overweight on BridgeBio stock, cites Attruby strength

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14-Year Singleton to Heartbreaking Split

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Rachel Gilmore

SYDNEY — Rachel Gilmore emerged as one of the most relatable and emotionally resonant brides on the 13th season of “Married at First Sight Australia,” captivating viewers with her warmth, vulnerability and journey from a self-described long-time singleton to a participant willing to marry a stranger on national television.

Rachel Gilmore
Rachel Gilmore

The 35-year-old recruitment team leader from Victoria brought heart and honesty to the Channel 9 experiment, which filmed in 2025 and aired into April 2026. While her on-screen romance with groom Steven Danyluk offered moments of hope and growth, post-experiment realities proved more complicated. Here are 10 essential things to know about Rachel Gilmore’s MAFS 2026 experience, drawn from the show, her own words and latest updates.

  1. Rachel was single for 14 years before MAFS. Entering the experiment, Gilmore openly shared that she had not been in a committed relationship for over a decade, relying instead on occasional “situationships” that left her emotionally drained. In her audition tape, she revealed a dating “game plan” born from repeated rejection and heartbreak. “It is extreme,” she told interviewers, explaining how one or two bad dates could leave her devastated for months. Her decision to join MAFS marked a bold step to break the cycle.
  2. She nearly didn’t apply due to crippling insecurities. Gilmore has spoken candidly about years of feeling unworthy after repeated romantic disappointments. In pre-show interviews, she admitted the idea of marrying a stranger felt overwhelming, yet she pushed through, hoping experts could help her find genuine connection. Her vulnerability resonated with many viewers who saw their own struggles reflected in her story.
  3. Matched with Steven Danyluk in the first wedding. Rachel was paired with Steven, another long-time singleton, in one of the season’s earliest ceremonies aboard a Sydney Harbour superyacht. The wedding had awkward moments — Steven initially struggled with compliments and a kiss — but Rachel’s bubbly personality and “maternal energy” helped ease tensions. She described him as bringing laughter and light into her life despite early hurdles.
  4. Intimacy Week delivered one of her toughest moments. The couple faced significant challenges during intimacy-focused tasks. Steven’s reluctance to be physically affectionate, including pulling away from a kiss, left Rachel feeling rejected and exposed. She later recounted becoming “emotionally raw” and needing space. Viewers reacted strongly, with many criticizing Steven’s handling of the situation while praising Rachel’s openness.
  5. A crude joke scandal tested their bond. Unseen footage from a dinner party showed Steven joking explicitly with fellow bride Bec Zacharia about his intimacy with Rachel. The clip surfaced during “After the Dinner Party,” leaving Rachel mortified and questioning whether Steven had her back. She articulated feeling unsupported, highlighting communication gaps that plagued the pair throughout the experiment.
  6. They reached Final Vows and committed to trying. Despite setbacks, Rachel and Steven attended Final Vows in early April 2026 episodes. Both delivered emotional speeches affirming growth and commitment. Rachel expressed finding something “rare” in Steven, while he spoke of diving in “headfirst, fearless.” They left the experiment intending to date in the real world, with Rachel discussing moving in together and Steven considering relocation.
  7. The relationship did not survive post-filming. Although they departed Final Vows as a couple, multiple insiders report the romance ended shortly afterward. Sources told outlets that Steven got “cold feet” about plans to visit Rachel in Melbourne or relocate from Sydney. Long-distance issues proved insurmountable, and Steven reportedly failed to follow through on commitments. No joint social media tributes appeared, adding to speculation.
  8. Rachel has been spotted moving on with a Big Brother star. In late March 2026, photos emerged of Gilmore looking cosy with “Big Brother” contestant Bruce Dunne. The sighting fueled rumors she was exploring new connections after the split. While details remain limited, the outing suggested Rachel was focusing on her own happiness following the MAFS whirlwind.
  9. She works as a recruitment team leader and values personality over looks. Outside the spotlight, Gilmore holds a professional role as a team leader in recruitment. On the show, she emphasized seeking deep emotional compatibility rather than superficial attraction. Her “heart of gold” and vibrant personality earned praise from experts John Aiken and Mel Schilling, who highlighted her maternal warmth and willingness to grow.
  10. Rachel’s Instagram and post-MAFS life reflect resilience. With the handle @rachlea_x, Gilmore shares glimpses of her journey, including MAFS highlights and personal reflections. Following the reunion special airing April 13, she is expected to address the split and any new developments. Fans continue to root for her, viewing her as a standout for authenticity in a drama-filled season. She has expressed gratitude for the experience while acknowledging its emotional toll.

Rachel Gilmore’s arc on MAFS Australia 2026 encapsulated the experiment’s core promise and pitfalls: the hope of expert-matched connection colliding with real-world complexities like distance, differing commitment levels and unresolved insecurities. Her openness about past dating struggles and on-screen emotional honesty made her a fan favorite, even as the relationship with Steven ultimately faltered.

Filmed months before airing, the season allowed post-experiment developments to leak gradually, heightening viewer engagement. While only a few couples, such as Stella and Filip, appear positioned for lasting success, Rachel’s story stood out for its relatability. Many viewers saw echoes of their own romantic challenges in her 14-year single streak and determination to try something radical.

The upcoming reunion promises further insight into Rachel’s perspective on the breakup and any lingering feelings toward Steven. Past reunions have featured raw confrontations and reflections; this year’s is anticipated to address long-distance failures and personal growth among participants.

Gilmore’s participation also sparked broader conversations about modern dating, body image, self-worth and the pressures of reality television. She addressed size and body image discussions on the show, pushing back against superficial judgments and advocating for personality-driven connections.

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As the season concludes, Rachel joins a long list of MAFS alumni who gained public profiles while navigating intense scrutiny. Her resilience — choosing vulnerability on camera despite deep fears of rejection — has inspired messages of support across social media.

Experts note that MAFS success rates remain low overall, with most couples parting ways after the cameras stop. Rachel’s experience underscores the gap between the controlled experiment environment and everyday realities, particularly when geography and differing readiness levels come into play.

For fans, Rachel represented hope that even after years alone, openness to love could yield meaningful growth. Though her MAFS romance did not endure, her journey highlighted courage, self-reflection and the importance of clear communication — lessons that extend far beyond the show.

As the April 13 reunion approaches, attention will turn to how Rachel processes the outcome and what comes next in her personal life. Whether through new relationships, career focus or continued advocacy for authentic connections, her story remains one of the season’s most compelling.

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In the competitive reality television landscape, participants like Rachel bring humanity to high-drama formats. Her willingness to share insecurities and celebrate small victories provided balance amid the season’s more explosive moments.

Rachel Gilmore may not have found her forever match on MAFS Australia 2026, but she gained national attention, personal insights and a platform to inspire others facing similar romantic hurdles. As she steps forward post-reunion, many will watch to see the next chapter in her journey toward the lasting connection she sought.

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Ex-Rio Tinto CEO’s deep-sea mining firm to merge with Odyssey in $1 billion deal

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How Iran plans to tax oil tankers passing through Strait of Hormuz

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How Iran plans to tax oil tankers passing through Strait of Hormuz
Iran is reportedly planning to increase its oversight of the Strait of Hormuz during the current two-week ceasefire. The proposal includes a system where oil tankers would pay transit fees in cryptocurrency and undergo detailed checks.

Hamid Hosseini, spokesperson for Iran’s Oil, Gas and Petrochemical Products Exporters’ Union, stated that authorities intend to monitor all vessels passing through the waterway. “Iran needs to monitor what enters and exits the strait to ensure the ceasefire period is not used to move weapons,” Hosseini said. He added that while passage will remain open, inspections may slow transit times.

Under the proposed plan, ships would email their cargo information to receive a transit fee assessment, reportedly set at $1 per barrel. Payments would then be made using digital currencies. Hosseini noted that after the review, vessels would have a limited time to pay in bitcoin, a method designed to prevent tracing or seizure under sanctions.

This proposal indicates Tehran’s effort to maintain influence over a critical oil route while ceasefire talks continue. Reports also suggest Iran is encouraging vessels to sail closer to its coast, causing concern among Western and Gulf-linked operators.

Access through the Strait of Hormuz has become a central issue in efforts to extend the temporary ceasefire. Iran is pushing for tighter control, while Gulf nations and Western allies are opposing the move. U.S. President Donald Trump has stated that the ceasefire depends on Iran ensuring the “complete, immediate, and safe” reopening of the strait. Iran, however, has indicated that any reopening would follow a new security protocol coordinated with its military.

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The uncertainty has led to hundreds of ships being stranded in the region. Estimates suggest between 300 and 400 vessels are waiting to leave the Gulf, with one industry executive comparing the buildup to a “traffic jam at sea.” Major shipping companies remain cautious. Maersk stated it is urgently assessing the evolving situation but warned that the ceasefire has not yet guaranteed safe passage. Experts believe that even under regulated conditions, only 10 to 15 ships may pass through daily, a significant reduction from the usual average of around 135, meaning delays could continue.
Any move granting Iran greater control over the strait is considered unacceptable by Gulf countries like Saudi Arabia, Qatar, and the UAE, given the route’s importance to global oil supplies. Ali Shihabi, a commentator with close ties to Saudi leadership, said uninterrupted access to the waterway must remain the priority. With negotiations ongoing and tensions persisting, the Strait of Hormuz remains at the center of a complex standoff involving security, diplomacy, and global energy flows.

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Energy Transfer: 7.1% Yield And Potential Export Tailwinds Support Buy Case

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Cleveland Fed president warns rate hike possible if inflation stays high

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Cleveland Fed president warns rate hike possible if inflation stays high

A Federal Reserve policymaker is warning that it could make sense to raise interest rates if inflation remains elevated above the Fed’s 2% target amid uncertainty over the duration of the oil and gas price shock.

Federal Reserve Bank of Cleveland President Beth Hammack said in an interview with The Associated Press that she sees the central bank leaving the benchmark federal funds rate at its current level of 3.5% to 3.75% “for quite some time.”

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Hammack also cautioned that while the Fed’s next rate move could be a cut due to labor market concerns, there is a possibility that it could be to hike rates to curb stubborn inflation.

Cleveland Fed President Beth Hammack speaks

Cleveland Fed President Beth Hammack said that the Fed may need to hike rates to tame inflation, or may be compelled to cut rates to support the labor market. (Victor J. Blue/Bloomberg via Getty Images)

“I can foresee scenarios where we would need to reduce rates… if the labor market deteriorates significantly,” Hammack told the AP. “Or I could see where we might need to raise rates if inflation stays persistently above our target.”

NY FED PRESIDENT JOHN WILLIAMS WARNS IRAN-DRIVEN OIL SPIKE COULD RIPPLE THROUGH ECONOMY

Hammack noted that the Cleveland Fed’s estimates of inflation show that it could increase to 3.5% in April. That would amount to the highest inflation reading since 2024 and a significant increase from the consumer price index’s most recent reading of 2.4% in February.

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“Inflation has been running above our target for more than five years now,” Hammack said in the interview, adding that a further increase would mean inflation is “moving in the wrong direction, away from our 2% objective.”

Hammack said that the surge in gas prices caused by the Iran war is “the No. 1 thing” she hears about when talking to people within her district, adding that she and other policymakers “know that causes a lot of pain personally, as it eats up a bigger and bigger share of people’s paychecks. So it’s important for us to stay focused on it.”

POWELL WARNS OF NEW ENERGY SUPPLY SHOCK AS GAS PRICES SURGE: ‘NO ONE KNOWS HOW BIG IT WILL BE’

The Cleveland Fed president – who is also a voting member of the central bank’s Federal Open Market Committee (FOMC) that makes interest rate decisions – said that the Iran war’s economic impact will depend on how long it lasts.

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If higher energy costs prompt consumers to pull back on their spending, it could slow economic growth and cause businesses to conduct layoffs, prompting the Fed to cut interest rates to support the labor market.

IRAN WAR COULD PUSH INFLATION HIGHER THIS YEAR, GOLDMAN SACHS SAYS

Jerome Powell speaks at an event in Washington, DC.

Federal Reserve Chair Jerome Powell said last month that it was uncertain how the Iran war would impact the economy. (Amanda Andrade-Rhoades/Reuters)

Fed policymakers will get two sets of fresh inflation data this week, starting with the Commerce Department’s personal consumption expenditures (PCE) index for February which will be released on Thursday. The PCE index is the Fed’s preferred inflation gauge and the February edition of the report was delayed by the government shutdown.

Additionally, the Labor Department will release the consumer price index (CPI) inflation report for March on Friday.

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The FOMC will hold its next monetary policy meeting on April 28–29, when it will announce whether the benchmark interest rate will be held steady, increased or reduced.

Policymakers left interest rates unchanged at their most recent meeting in March, after doing the same at the previous FOMC meeting in January.

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Morgan Stanley predicts bull market for Indian stocks

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Indian migrant workers hit by cooking gas cylinder shortages leave cities

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Indian migrant workers hit by cooking gas cylinder shortages leave cities

“But if this [reverse migration] continues, it will have [a] significant impact, especially on micro, small and medium enterprises, particularly in labour-intensive sectors such as construction, textiles and manufacturing,” says Arvind Goel, co-chairman of the industrial relations committee of the Confederation of Indian Industry.

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