The Oil Market Is Disconnected From The Physical 🔊 On Friday's edition of The Macro Show, Hedgeye Asset Management's R. Patrick Kent @Hedgeye_HELS and Ryan Ricci @HedgeyeAI explained why a down day in oil is not the all-clear the tape treats it as. As Ricci noted, the number one reason something falls is that it just rose 20% to 30% in a straight line, not a change in the geopolitics. Crude is still closer to the top end of its risk range than the low end, and prediction markets put the odds of Strait of Hormuz shipping traffic returning to normal by year-end at roughly 18%. RPK added two points: 1. The futures market is disconnected from the physical, where Brent priced across Dubai and Shanghai sits around $120 to $125 a barrel, a gap that closes when the contracts roll at month-end. 2. The disruption has spread well beyond the Strait. The East-West pipeline is running at half capacity at best for months, Red Sea traffic runs through Houthi-controlled waters, and moving barrels on small boats shepherded by US destroyers carries at least $20 a barrel in incremental cost. "I'll take the under on the 20% chance of it being normalized by the end of the year." That leaves the question of what normal even means now, and how far off it still is. Subscribe to The Macro Show for daily market analysis from Hedgeye:

US stocks have never been this disconnected from each other: The median 63-day correlation between individual S&P 500 stocks and the index itself is down to +0.10, the lowest on record. This measures how closely individual stocks move with the broader index, with a reading this low meaning the index is being driven by a small group of stocks while most move independently. This figure has dropped -71% over the last 5 months. By comparison, during the March 2025 selloff, the median 63-day correlation surged to as much as +0.76. To put this into perspective, the previous all-time low was +0.16 following the 2000 Dot-Com Bubble burst. The market is more concentrated than ever.

🚨STANI: ETHEREUM FOUNDATION’S IVORY TOWER ACADEMIC APPROACH IS DISCONNECTED FROM BUILDERS! Aave founder @StaniKulechov says almost everyone with common sense is against EIP-8361 and it may rank as one of Ethereum’s most resisted proposals ever, second only to ProgPoW. He argues the EF’s academic style won’t solve the real challenges. What people actually want is focus on problems that drive demand and make the network more competitive.

Sam Altman's new interview: AI should not be designed to pursue goals that are disconnected from human needs. People must remain at the center of AI development. “I have no interest in building a super-smart AI that accomplishes some non-human goals. People should react. People should say, ‘Hey, this is what I want, and this is what I do not want.’ I do not think the issue is that we have failed to explain the benefits. We say, ‘AI is going to cure a bunch of diseases,’ and people say, ‘Okay, that is great, but that is not really my question. My question is: What is my role in the future? What is my economic future? What is my agency? How do I know that my kids and my family will still be able to have fulfilling, creative expression, struggle, drive the world forward, grow, and do this thing together in a way that has worked for a long time?’ When people in AI say, ‘Sure, there are going to be no jobs,’ or ‘50% of jobs are going to go away,’ or ‘90% of jobs are going to go away,’ and ‘AI is going to be smarter than you at everything,’ and ‘We will give you some basic income, but you are not really going to have a role,’ that is horrible. And by the way, if an AI company says, ‘Maybe we are going to destroy all the jobs, and we will be the most valuable company in the world,’ people should look at you like, ‘Yeah, that is a terrible message.’ I do not think the problem is that we have not articulated the upsides. I think people actually believe us. They hear, ‘AI may cure your cancer,’ and they think, ‘That sounds great.’ I think we, as an industry, have failed to explain how people stay in control of determining the future at every step, and how people can still have a meaningful life in all the ways we care about.” ---- From "CNBC Television" YouTube channel, (link in comment)

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