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Mason on finance and markets · June 14th
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Jun 14, 2026 · 2 min listen
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Mason on finance and markets · June 14th
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No signing today – Iran's foreign ministry confirmed the provisional memorandum won’t be inked as scheduled.
The ministry pushed back on earlier timelines, saying the deal’s schedule is still under negotiation and not set for tomorrow.
Claims that a pact would be sealed within 24 hours were dismissed as premature; Tehran says the details aren’t finalized yet.
So for now, nothing changes on the ground – markets and diplomats will wait for the next official word before moving forward.
Iran turned down the interim nuclear agreement today, leaving the deal stalled. Trump is now saying the signing will happen tomorrow, pushing the timeline forward by a day. He added that the Strait of Hormuz will open right after the agreement is sealed, implying immediate relief for shipping. Just a few days ago he claimed the Strait was already open, just not widely recognized. The contrast between yesterday’s rejection and tomorrow’s promised signature leaves the market watching for any concrete move, while the promised opening of the Strait remains a point of debate.
100× potential signal reopened. After we downgraded the thesis two months ago, the odds compressed because the underlying wound looked permanent.
This week the market delivered a catalyst that directly attacks that wound. The new data shifts the probability distribution back toward the original upside.
In practical terms, the signal that once looked like a dead‑end now looks viable again. The same structural concerns remain, but the external shock has opened a path we didn’t have before.
If you were waiting on a clear entry, the revised odds suggest it’s worth revisiting the trade. Keep an eye on the price action and the upcoming earnings window.
Considerable research has been devoted to the study of the VIX futures term structure, showing that the shape of the curve contains valuable information about the future direction of volatility. Trading strategies have been developed based on the informational content of the VIX futures curve. However, much less attention has been paid to the term structure of spot VIX indices. Reference [1] helps fill this gap by examining the spot VIX term structure, including the VIX, VIX9D, and VIX3M indices. The objective is to determine whether inversions in the spot VIX term structure contain predictive information about future realized volatility. The author pointed out, The VIX term structure contains forecasting information about future realised volatility beyond what the VIX level itself implies. I document this in four steps. First, inversion depth has substantial incremental explanatory power above the VIX level, adding between 2.4 and 6.9 percentage points of R-squared in sample. Second, the predictive content is concentrated at the front end of the curve. Measures using the VIX9D index dominate the conventional spot-minus-three-month measure across every robustness check. Third, the signal carries information about the volatility risk premium and is associated with the gap between realised volatility and the VIX at horizons of 5 and 10 days. Fourth, the result survives augmentation with Corsi-style HAR-RV controls and improves out-of-sample forecasts in a recursive 2019 to 2026 test. The Clark-West nested-model statistic rejects equal predictive accuracy at the 1 percent level in every measure-by-horizon cell tested. In short, the paper concludes, The spot VIX term structure contains predictive information about future realized volatility beyond the information embedded in the VIX level alone. The predictive power is strongest at the front end of the curve, with VIX9D-based measures consistently outperforming traditional spot-versus-VIX3M measures. The signal is related to the volatility risk premium and helps explain the gap between implied and subsequently realized volatility over 5- and 10-day horizons. The results remain robust after controlling for realized volatility dynamics and improve out-of-sample volatility forecasts during the 2019–2026 test period. The findings of this paper are insightful. Notably, the study shows that VIX9D contains the strongest predictive information among the term-structure measures examined. As a result, we will pay more attention to short-dated options and short-term volatility indicators going forward. Let us know what you think in the comments below. References [1] Lim Boon Chuan (2026), The Front End of the VIX Term Structure and Forward Realised Volatility, SSRN 6752518
Kevin Warsh has a long to-do list for the Federal Reserve. There’s the Federal Open Market Committee (FOMC)’s dual mandate of promoting maximum employment and stable prices, which requires a balancing act by Warsh and his fellow committee members. He also wants to narrow the Fed’s focus, rethink post-meeting press conferences and forward-looking guidance (Warsh has essentially said his colleagues talk too much) and potentially change how the central bank measures inflation. But one of the biggest challenges of Warsh’s chairmanship will be following up on his pre-confirmation goal to shrink the Bigfoot-sized footprint the Fed has on the financial markets. Reducing its $6.7 trillion balance sheet won’t be easy. Critics of the Fed’s market intervention like Warsh say that since the Global Financial Crisis, the central bank has manipulated specific pockets of the economy by buying Treasurys and mortgage-backed securities, controlling the yield curve, lending to banks, intervening in credit markets and more. “The reality is the tradeoff has been an unintended spillover with far-reaching implications,” said Jeff Klingelhofer, managing director and portfolio manager at Aristotle. Let’s rewind to 2008. Before the height of the financial crisis, the balance sheet was roughly $900 billion. But as the Fed purchased large amounts of US Treasurys and mortgage-backed securities to help stabilize the economy, it swelled to $4 trillion by 2014. (The securities purchases essentially injected liquidity into the market, attempting to encourage banks to lend and companies to grow when neither were doing so.) The central bank then kept the balance sheet somewhat steady until starting to shrink it in 2018 (as criticism from Congress grew) by letting maturing assets roll off without reinvesting the principal. Then, COVID-19 hit. In an effort to prevent an economic collapse, the Fed returned to buying and the balance sheet roughly doubled in size. It wasn’t until 2022 that the central bank, under former Fed Chair Jerome Powell, was able to resume trimming, bringing the balance sheet from nearly $9 trillion to the current $6.7 trillion. Warsh has suggested that the Fed’s massive portfolio of government bonds and mortgage-backed securities poses a threat to the central bank’s independence, since it gives the Fed more sway over more areas of the financial markets, heightening opportunities for political influence. Plus, Wall Street potentially expecting the Fed to be a knight in shining armor, riding to the rescue when the economy starts to sour, doesn’t exactly spell independent monetary policy. But the new Fed chair has also indicated that a smaller balance sheet would allow the Fed to cut interest rates — something the financial markets (and President Donald Trump) would like. David Wessel, senior fellow in Economic Studies at Brookings and director of the Hutchins Center on Fiscal and Monetary Policy, explains that if you increase the balance sheet, that’s believed to stimulate the economy. If you reduce the balance sheet, that would, using the same logic, restrain the economy. In that scenario, bringing down inflation would allow the Fed to lower interest rates. “What he’s really talking about would result in a steeper yield curve, lower short-term rates and higher longer-term rates,” Wessel said. The Fed buying fewer bonds typically pushes long-term rates up, while rate cuts bring short-term rates down; the difference between the two, illustrated on a graph, is known as the yield curve. The risk of that strategy is that higher long-term rates could make mortgage rates, already steep enough to keep some buyers out of the housing market, increase. “I find it hard to believe that Donald Trump and [Treasury Secretary] Scott Bessent are really in favor of Fed maneuvers that would lead to higher mortgage rates. I don’t know that they’ve thought this through.” Of course, what Warsh actually does is more important than what he said he would do when he was campaigning to lead the Fed. In the past, the Fed has shrunk its balance sheet by letting long-term bonds expire without purchasing more. During Warsh’s confirmation hearing, he assured lawmakers that working toward his balance sheet objectives would be a slow process: Wessel expects that would start with Warsh initiating a study, perhaps via a subcommittee of the FOMC. “The issue is if you’re going to shrink the Fed’s assets, you have to shrink their liabilities,” Wessel said. Some experts argue that one way to accomplish that is lowering the amount of reserves that banks hold at the Fed. There are four ways the Fed might do so, Darrell Duffie, an economist and professor at the Stanford Graduate School of Business, said in a research paper in March.
$4.6 billion—last year the U.S. youth‑camp market hit that total, rebounding from a pandemic dip that knocked $16 billion off the sector.
Day camps now run about $87 a day, while overnight programs average $173 daily, according to the latest ACA data.
A NerdWallet poll shows a quarter of parents expect to spend over $2,000 on camp this summer, and in places like New York City the price tag can easily top $10,000, with spots filling ten months ahead.
Higher fees are feeding a niche market for extras: laundry services to erase bug‑spray smells, $125‑an‑hour packing helpers, and personal shoppers arranging “new camper” wardrobes.
President Donald Trump announced on Truth Social on Saturday that the U.S. and Iran could be signing a peace deal as soon as Sunday, after 105 days since Washington and Tel Aviv carried out an illegal war of aggression against the Iranians, but snuck in his latest threat to use nuclear weapons. He insisted that the agreement was a far better deal than the one achieved by “Barack Hussein Obama,” and said while Obama’s deal provided Iran with a “smooth road to a Nuclear Weapon,” the one that is close to being agreed-upon is the exact opposite and is a “WALL TO NO NUCLEAR WEAPON.” “Hopefully, this process will all work out, quickly, easily, and smoothly,” he posted. “If it doesn’, we have the ultimate alternative, hopefully never to be used again!” Like this time, Trump has never outwardly threatened to use a nuclear weapon, but has insinuated that it could be used. LARRY JOHNSON QUESTIONS NARRATIVE ABOUT APACHE HELICOPTER CRASH HOH: IS PEACE DEAL CLOSE, OR IS THIS MORE TRUMP LIES? On 7 April, Trump posted Truth Social: “A whole civilization will die tonight, never to be brought back” unless Iran agreed to the U.S.’s demands. Sina Toossi, a senior fellow at the Center for International Policy, posted on X: “The ‘ultimate alternative’ sounds a lot like a nuclear threat. Not the first time Trump has hinted at it. Iran has been attacked twice by two nuclear-armed states & still hasn't weaponized. And what he's about to sign isn't a nuclear deal, no matter how he tries to market it.” Sam Husseini, the independent journalist, reposted Toossi’s response, and said: “And Iran is the one under UN sanction for its nuclear program.” Israel, which poses an existential threat to Iran, has about 90 nuclear weapons – but its diplomatic position is that of “nuclear ambiguity.” There is a chance Israel has hundreds of warheads. The UN General Assembly voted in 2022 on a resolution – introduced by Egypt – demanding that Israel destroy its nuclear weapons arsenal, even though Tel Aviv never officially confirmed that it has the weapons. The resolution was opposed by the U.S., Micronesia, Canada, and Palau, but sponsored by nations that signed on to the Abraham accords, including the United Arab Emirates, Morocco, Jordan, and Bahrain. The resolution called on Israel to accede to the Treaty without further delay and, in the meantime, not to “develop, produce, test, or otherwise acquire nuclear weapons, to renounce possession of nuclear weapons and to place all its unsafe guarded nuclear facilities under the full scope of Agency safeguards as an important confidence-building measure among all States of the region and as a step toward enhancing peace and security.” Trump has been erratic during the presidential campaign when he spoke about Iran. During one rally, he said he may have to blow the country to smithereens and in October, he said he would like Iran to be very successful. “The only thing is, they can’t have a nuclear weapon,” he said.
The die has been cast. Julius Caesar upon leading his army across the Rubicon River The latest data from the US Energy Information Agency show that crude oil storage tanks at Cushing Oklahoma, the primary physical delivery point for the CME COMEX oil futures and options market, have dropped to 21.6 million (M) barrels (bbl) as of June 5, 2026. Recall that Cushing crude oil storage below 20M bbl encounters ‘working tank bottoms’ effectively tapping-out the availability of further Cushing stored crude. The draw-down of Cushing crude oil storage tanks can be seen in the contrast of the photos below: Figure 1 - Aerial View Of Cushing, OK Crude Oil Storage Tanks At April 23, 2026 (Left) And June 9, 2026 (Right); source: CNN Figure 2 - Aerial View Of Cushing, OK Crude Oil Storage Tanks At June 9, 2026; source: CNN Large crude oil tankers move at 12 to 15 kts (22 to 28 kph) or roughly the speed of a bicycle. Even if the Persian Gulf was to immediately see peace, loading and transport of crude oil to markets globally would not see additional delivery to global market destinations for 30 to 60 days. Further, global logistics analysis firm Kpler notes that if Iran maintains effective control of the Strait of Hormuz, which it will, Persian Gulf crude shipments will only rebuild to 45% of their pre-war shipping volumes. Figure 3 - Phased Return Of Strait Of Hormuz Transits For Tankers; source: Kpler To date, the Western price of oil in the financial markets has been suppressed due to limitless availability of digital crude oil futures and other physical factors such as China having reduced oil imports by 5.5M bpd by drawing-down its own inventories as the Iran War has continued. However, when the Cushing tank bottoms event happens, the pricing of crude is going to become physical switching quickly from pricing with digital futures to a physical barrel delivery supply-demand balance. At that point we will see a rapid price reset for crude and petroleum products to far higher levels. No Tweet from President Trump will nor can change that. The usefulness of continual bait-and-switch Tweeting tactics used by Trump’s office to keep the oil market wrong-footed and the world’s bubble economy and financial markets, juiced to stratospheric levels by decades of intentionally loose money policy by the world’s central banks, inflated as they drifted toward a precipice over which lies chaos, will be terminated. The world’s energy markets will of necessity become physically balanced by supply/demand forces. Trump’s owners who dictate his actions have decided to terminate the global everything bubble created by central bankers over decades and the impact of the global oil and petroleum shortage will serve as the proximal cause of that collapse. Bubble blowing by central banks for decades is the ultimate cause - you will hear almost nothing about that. Attacking Iran, disrupting global energy and resource flows, spiking price inflation, and sending a shock interest rate spike through the bond and financial markets dictate that the attack on Iran was unthinkable. As central bankers and bankers scurry for cover, it is exactly what they needed. Best regards, David Jensen
Chart of the Week: LTL Monthly Cost per Hundred Weight, Van Contract Rate per Mile – USA SONAR: LTL.USA, VCRPM1.USA The headline numbers look impressive. LTL all-in revenue per hundredweight is up sharply on SONAR’s LTL.USA index, with the current reading at $46.13, well above the six-month average of $41.31 and at its highest level in the five-year window shown in the chart above. LTL carriers, by one reading, are having their best pricing moment since the post-COVID freight boom. The orange line complicates that story, but not in the way it might first appear. Van contract rates per mile, VCRPM1.USA, bottomed out near $2.25 per mile in mid-2025 after a multi-year freight recession that shed more than 20% from the 2022 peak. What has happened since is the part that matters: over the past eight months, VCRPM1 has staged one of its sharpest recoveries of the five-year period, climbing back to $2.51 per mile and still trending upward. That is not a number failing to confirm the LTL rally. That is a number setting up the next leg of it. The fuel surcharge is the whole story for now First, the honest accounting of where the LTL gains actually came from. When diesel averaged $3.50 per gallon in May 2025 — using a generalized fuel surcharge table that starts at 0.5% when the DOE’s weekly figure is at $1.20 and increases 0.5% for every $0.06 increment — fuel costs were estimated at roughly 19.5% of the base linehaul rate. By May 2026, diesel had surged to $5.60 per gallon, a 60% increase, pushing the surcharge to 37.0%. On a median LTL shipment, that swing alone added more than $5.80 per hundredweight to the invoice, more than accounting for the entire year-over-year all-in rate increase. Strip the fuel surcharge out and the picture inverts. SONAR’s LCWT1.USA index, which tracks initial contract base rates on paid invoices with fuel excluded, shows base rates flat to slightly negative year-over-year. Carriers have actually been cutting rates across nearly every freight class — Class 50 (dense, efficient freight) by as much as 21% — to compete for volume in what has been, beneath the fuel noise, a buyer’s market at the base rate level. This is the defining characteristic of the current LTL moment: the all-in rate is at a multi-year high, the underlying rate is not, and the gap between them is almost entirely diesel. The Yellow exit set the floor That divergence did not begin in a vacuum. The circled annotation on the chart marks the exit of Yellow Freight, the Yellow liquidation in mid-2023 that removed roughly 10% of U.S. LTL capacity overnight. The event was widely expected to produce an immediate repricing of the market. It produced a floor instead. The remaining carriers — Old Dominion, Saia, XPO, ArcBest, Estes and others — absorbed the displaced volume with unusual discipline, holding GRI cadence steady and preventing the kind of base rate collapse that hit the truckload market during the same period. Look at the white line on the chart in the months immediately following that annotation. LTL.USA held its level through late 2023 and into 2024 even as the freight recession continued — a notable divergence from the deep trough truckload rates were experiencing at the same time. The Yellow exit did not ignite an LTL pricing surge. What it did was ensure there was a base from which to launch one, once the broader freight cycle turned. That turn is now visible on both lines of the chart simultaneously. The truckload recovery is the signal The VCRPM1 move of the past eight months is not a rounding error. Van contract rates fell from a peak above $2.90 per mile in mid-2022 all the way to roughly $2.24 per mile at the trough, a decline of more than 20% over nearly three years. The recovery off that floor has now retraced approximately half of that decline in less than a year. The slope of the orange line since October 2025 is the steepest sustained upward move in the five-year window outside of the 2021-22 boom. This matters directly to LTL because every major LTL carrier is also a significant purchaser of truckload capacity. Full trailers or doubles running between breakbulk hubs and service centers are functionally indistinguishable from standard TL moves, and a meaningful share of that linehaul is outsourced to third-party carriers. When VCRPM1 rises, LTL purchased-transportation costs follow — typically with a lag of one to two quarters — and carriers eventually push those costs into base rates and GRI filings rather than absorb them. The forward market is flashing the same message even louder. SONAR’s Outbound Tender Rejection Index (STRI.USA) sits at 16.9% — more than double its six-month average of 8.28% and at a multi-year high — signaling that TL capacity is being absorbed faster than the market can replenish it. The National Truckload Index (NTI) hit a 13-quarter high in Q1 2026. Spot rates lead contract rates by several months, and that gap is already wide.
Authored by Owen Evans via The Epoch Times, President Donald Trump said on Thursday that he is considering support for U.S. farmers struggling with high fertilizer prices, as rising energy costs and market volatility continue to squeeze producers across the farm belt. "I am looking at doing a form of help," Trump told reporters at the White House, without giving details. Farmers face pressure from fertilizer and fuel costs, both of which have been affected by the conflict with Iran and disruption around the Strait of Hormuz, a key route for global energy and fertilizer trade. Fertilizer prices have eased from recent highs, with granular urea prices in New Orleans falling to $453.50 per short ton, their lowest level since Feb. 6, reported Bloomberg Green Markets on June 8. That was down 36 percent from a mid-April peak. The market remains vulnerable to disruption, particularly because urea is the most widely used nitrogen fertilizer and nearly half of global urea exports come from countries affected by the Middle East conflict. High fuel prices have also hit farmers. Diesel prices reached record highs in parts of the Midwest in May, including Indiana and Illinois, due to the Iran war. Grain and soybean farmers are especially exposed because diesel is needed for tractors, combines, irrigation, and crop transport. The pressure in farming has become a heated political issue in Washington. At a Senate Agriculture Committee hearing on June 10, Sen. Raphael Warnock (D-Ga.) challenged Agriculture Secretary Brooke Rollins over whether Trump administration policies had increased farmers' costs. "Georgia farmers are telling me that they continue to struggle with high costs, costs exacerbated by President Trump's war in Iran, and his tariffs - which is a tax on all of us on virtually everything," Warnock said. Warnock said that the administration had lowered tariffs on some farm equipment and asked whether that move was an acknowledgement that tariffs had raised the cost of farming. However, Rollins defended the administration's record, saying it was working to reduce the agricultural trade deficit. "We're cutting that $50 billion agricultural trade deficit in half that we inherited a year and a half ago," she said. Warnock pressed again, asking whether tariffs had increased costs for farmers, saying Rollins was "forecasting" future results rather than answering the question. Rollins said that the Trump administration is "reshoring fertilizer back to America." "In two or three weeks, we're going to break ground in Louisiana on what will be the largest fertilizer plant in the world," she said. In May, farmers called for emergency relief and adoption of key bills to stem soaring fertilizer costs. "American farmers are price-takers on both ends, paying monopoly prices for inputs they must buy, then accepting commodity prices they cannot control, with no pricing power on either side," Sen. Roger Marshall (R-Kan.) said during a May 12 Senate Agriculture, Nutrition, and Forestry Committee hearing. "That's not a market. It's a trap for the American farmers." "Simply put, farmers need more competition in this marketplace," South Dakota Corn Growers Association president Trent Kubik said. "Federal antitrust laws exist for precisely this reason - to promote and sustain competition, the lifeblood of our economy. "Increased competition for more participants in the fertilizer manufacturing space is the only thing that can deliver meaningful and durable price relief." The concern is not limited to the United States. European Agriculture Commissioner Christophe Hansen said this week that Europe needs long-term fertilizer solutions to avoid food shortages. "We need to do our homework as well and address the issues to make fertilizers not only available but also affordable, because, otherwise, there will be food shortages in the European Union," Hansen told Euronews on June 10. He said many European farmers were considering not planting because production had become too expensive and they could not easily pass on the costs. Reuters and John Haughey contributed to this report.
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