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Trade, Peace and War

The threat of weaponized interdependence
After World War II, the United States ascended to a remarkable position of economic and military dominance – a hegemony that had not been seen in Western Europe since the Fall of the Roman Empire. America’s position allowed it to engage in crude imperialism, particularly against smaller and poorer nations, especially those of South and Central America. The U.S., however, adopted an approach that was more complex and beneficial, namely building interlocked diplomatic, economic and military systems in order to support stability, democratic values and national self-interest.
Cordell Hull’s, FDR’s Secretary of State, fervent belief that “commerce” — global economic integration — was a force of peace, formed a key intellectual foundation for “Pax Americana”.
Is it real?
Before the Trump tariffs or the Hormuz Crisis, “geoeconomics” was gaining in popularity. The International Monetary Fund describes it as the “use of financial and trading relationships to achieve economic and geopolitical goals.” This is basically the use of economic interdependence for coercion. The upcoming European Central Bank Conference on this topic will be streamed live, but I am sorry to tell U.S. Readers that I will give the Jean Monnet Lecture Thursday September 17th at 3AM New York Time.
It is important to note that, although large-scale trade can sometimes be a force for peace, it also has the capacity to create conflict. Henry Farrell, Abe Newman and other political scientists have outlined and analysed this phenomenon. The weaponization does not have to be just metaphorical. As I type this, Iran and its Houthi allies are occupying a part of the Red Sea coastline, while Iranian drones target Saudi Arabia’s East West pipeline. This is a threat to the primary alternative oil route that tries bypass the Strait of Hormuz.
Interesting aside: Weaponized interdependence had been a known phenomenon even in Sci-Fi. This picture is from Dune 2 based on Frank Herbert’s classic science fiction novel. This novel takes place on Arrakis which, as the only source of “spice”, a drug vital to Galactic economies, is at the heart of the conflict. Arrakis, in effect, is Strait of Hormuz, but with giant sandworms. Dune can be seen as a story about the weaponized interdependence of people and their ability to escalate that interdependence into war.
Now, I’m not saying that the real world should be governed by fiction-inspired fears. Fear is a mind-killer. The reality of interdependence and weaponization is all around us.
The primer today is on the darker side of global economic integration. It will show how this can be used to coerce others and cause international conflicts, including shooting wars.
In no way am I arguing that international commerce is always, or even often, a cause of conflict. As a matter of fact, this introduction will begin by examining the arguments that have been made historically in support of commerce as a tool for peace. There are, however, situations where the negative side of globalization is evident. The rest of this primer is devoted to those cases: the intellectual foundation, the historical examples and the current relevance.
After the paywall, I’ll address:
1. Arguments for the globalization of trade in terms of a peace-maker
The international trade system as a conflict source
3. What can weaponized interdependence escalate?
4. Conflict and interdependence today
5. Costs of Insecurity

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Business

Amazon suspends use of 21 Air, cargo carrier involved in fatal Miami crash

Amazon, the online retailer, announced Sunday that it would no longer use cargo airline 21 Air following a crash in Miami last month when one of their Amazon-branded planes crashed on landing. Five people were killed.
Amazon’s Kelly Nantel, a spokesperson for the company, did not disclose specific reasons but stated that the decision was made after reviewing some circumstances surrounding the accident as the company supported the National Transportation Safety Board investigation into the cause.
Nantel stated that “after the tragic incident at the weekend, we spent some time supporting the investigations and reviewing the circumstances surrounding the flight 7598, and have decided to suspend our operations with 21 Air.”
Amazon announced that it would use other carriers for shipments previously assigned to 21 Air. Sun Country Airlines is one of its other carriers.
North Carolina-incorporated 21 Air, which specializes in cargo shipments to and from Mexico, said in a statement Sunday that it remains focused on supported those affected by the crash “as well as working closely with the NTSB and all our partners, like Amazon, as the investigation continues.”
21 Air stated that they were confident about their safety procedures, policies and training.
Keith Winters, CEO of 21 Air, offered his condolences and full cooperation to the investigators in the early hours following the accident.
In a press release, he expressed his deepest sympathies to the loved ones and families of those that lost their life. Our immediate priorities include supporting the affected and helping authorities. We also ensure that all information, as soon as it is available, is accurate.
Just before two o’clock in the afternoon, a 21 Air Boeing 767 300 overran Miami International Airport runway. Five people died and five others were injured. ET on Sept. 6, while the plane was landing.
The vehicle struck two cars, one of which was a van with workers from an airline cleaning company. The five victims were all on the ground. Authorities identified them as Yoel Rodanjo, 52; Rolando Aleman León, 55; Julio C. Pineda 75; Carlos Acosta Fajardo 53; Javierkys Reyes Quevedo 47.
Miami-Dade County sheriff Rosie Cordero Stutz stated that flight 7598, arriving from San Juan Puerto Rico, overran Runway 30 before stopping. It struck two vehicles and then stopped.
The NTSB released a summary that summarized the CVR information. It revealed that while one pilot tried to land the plane, another repeatedly warned that it was moving too fast. However, there was “no consistent verbal response” to these comments.
Data suggested the plane had touched down. About 15 seconds after that, the pilot requested a “go-around,” a maneuver where a plane cancels its landing attempt by circling and pulling up.
Chihoon Shim, the NTSB investigator who was in charge of this investigation, stated that the flight data recorder indicated the thrust had increased on the aircraft during the landing, which is consistent with an attempt to go around.
The speed brakes, the thrust-reversers and other devices were also not activated.
Thrust reversers and speed brakes can be used together to slow a plane down after landing. Shin stated that it wasn’t clear as to why the flaps might have not been used.
Investigations into the accident continue.
Nantel, from Amazon said: “We will continue to work on supporting the investigation and all those affected.”

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Business

Stocks are in a late-stage bubble and poised to crash 21% next year, analyst says

There are gains still to be made. James Reilly is a senior economist with Capital Economics. He reiterated his earlier prediction that the S&P 500 would end the year at 8,250. This was up 7.7% on Friday’s closing price, and then plummet 21% by 2027 to 6,500.
In a Thursday note, he said: “We think that the data are consistent with an advanced bubble.” Most of the factors that we take into account are close or at levels similar to those seen before past stock market peaks.
Reilly has identified several bubble indicators he’s been monitoring:
The stock valuations seem to be consistent with an advanced bubble. The market’s price-to earnings ratio, for example, is near its peak. Additionally, S&P 500 valuations are close to the extremes of the dotcom bubble.
The expected earnings growth is not sustainable. The S&P 500’s earnings per share growth over the next 12 months is comparable to the height of the dotcom boom.
Massive spending and shrinking cash flows have raised questions about the sustainability of AI investments. In 2027, the combined free cash flows of top AI hyperscalers are expected to be negative.
The market-cap concentration in indexes is extreme, often accompanied by unsustainable rally.
The booming equity market is consistent with the late stage of a bubble. A new influx of stock is expected, given the number of IPOs in the pipeline and the follow-on offering. Such activity in the past has been a sign that a bubble is about to burst within months, and not over years.
Reilly did not mention Friday’s surge in Treasury rates, which saw the 10-year yield hit 4.97%.
Rockefeller International chairman Ruchir Sharma is also keeping a close eye on this indicator.
He warned in a Financial Times opinion piece that the AI bubble would burst when the yield on 10-year bonds “decisively breached” 5%. This was the highest point of the range for the past decade.
Sharma said that “this breach will signal a new age of money tightening, where AI mega-projects may be more difficult to finance.”
The AI boom would be affected in many different ways by high borrowing costs. Hyperscalers are likely to issue less bonds in order to fund their expenditure. The hyperscalers will have a harder time issuing equity, as historically yields over 5% were viewed negatively by the stock market.
He also pointed out that yields above 5% could start to reach nominal GDP growth and make the national debt unsustainable.
Sharma pointed out that the U.S. has become more dependent on debt, as it now exceeds 100% of the GDP.
He wrote: “As such, the debt servicing costs have increased significantly.” The rising costs of public borrowing will hit other borrowers harder and sooner.
Even the most ardent bulls have become more nervous. Ed Yardeni, a Wall Street veteran who has been predicting a “Roaring 2020s’ stock market for the remainder of this decade since 1980, recently lowered his odds from 80% down to 70%. He also raised the chances of achieving a negative outcome to 30%.
In a Saturday note, he admitted that recent developments on the bond and oil markets were unnerving.

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Business

Larry Ellison cancels $7.5 billion sale of Oracle stock

Oracle executive chairman and co-founder Larry Ellison canceled his planned Oracle stock sale, according to a company announcement on Saturday.
Oracle disclosed previously in a filing with the regulatory authorities that Ellison intended to sell around 50 million shares, worth $7.5 billion. This was according to Reuters. The company didn’t give a specific reason why it changed its plans.
The company stated that “no Oracle stock has been sold as part of this plan and the shareholder does not have any other plans for selling his Oracle shares.”
Oracle’s stock has fallen 22% in the past year. It has spent heavily on its data centers and recently became a major owner and security partner for TikTok’s U.S. operation.

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Business

Why young drivers are buying 30-year-old Mazda Miatas

A 33-year old Mazda Miata is abandoned in the garage of my mother, located behind her home in New Jersey.
My father Buz was a car enthusiast and would drive it every Saturday. He’d meet with other car enthusiasts or drive through the city with his top down to pick up bagels. After these adventures, the two-seater was carefully cleaned.
He would be delighted to see the “weekend toy” every time he went to open his garage.
As my father’s lung condition progressed over the years, his black 1993 LE Limited Edition Miata with its sport suspension, rear and front spoilers, and headrest speakers waited for him to start it and release the clutch. It’s been a while since the battery died, and there are a few cracks in the leather. But I think the car would look like new with some serious TLC and a good bath.
This 89,260-mile Miata with Vermont stickers on the bumper is worth a lot now.
Miatas are popular in the United States, and there are many enthusiast events that take place. It lacks some of the niceties that drivers are used to. No Bluetooth, no navigation. The screen is missing.
Bob Hall, former Mazda product planner who was involved in the launch of the NA or the first generation Miata told ABC News that “everything old has a new look.” I see customers at Cars & Coffee wanting a first generation Miata. “The young people aren’t used to seeing something like this — I find it fascinating — and want one the most.”
Hall says that when Mazda introduced the Miata MX-5 Roadster in the autumn of 1989 the company had “completely underestimated” the demand.
Hall noted that the volume was low, and the dealers received $5,000 more than the MSRP of $18,000. He also said U.S. motorists preferred the higher-specced “A package” model to the entry level version.
Hall: “I knew that the team was good.” Hall said that the Fiat Alfa 124 Spider was the only rival at the time.
Hall has a NA Miata of his own, but it is a little more rare. The exterior is a Tiffany-blue metallic with a lip spoiler, 15-inch wheels, and a H4143 color.
He said, “I have had people asking about it. But it is not for sale.”
Howard Swig of Bring a Trailer online auction said that demand for Miatas from the early years has been high.
He told ABC News that “most have been converted to race cars or crashed… It’s hard to find one special.”
Bring a Trailer offers dedicated pages for NA Miatas and the second generation NB Miatas. On the website, more than 700 NAs were sold.
Swig stated that buyers are interested in cars with original paint, unmodified vehicles and good records of maintenance. Original wheels, radios and center caps increase the value.
Bring a Trailer, a company that sells trailers and other vehicles in the area, sold a Miata 1990 for $44,000. The roadster was only 8,000 miles old and painted Mariner Blue, a rare color. Swig stated that the average Miata sells for between $10,000 and $20,000. He also said there’s a great deal of interest for models with a swapped V8 engine for the inline 4-cylinder.
Swig stated that “Miatas were easy-to-own cars with a user friendly platform.” There’s no mystery about the suspension or platform, and there is a large community of Miata owners.
The modern Miatas have become bigger and heavier. “People want models that are as pure and light as possible,” Swig said.
In 2025, 8,727 Miatas, both the soft-top and RF versions, were sold. Dave Coleman, Mazda’s manager of vehicle development, stated that the Miata “brings the best out in people,” whether it is new or older.
He told ABC News that Miata owners are people who enjoy driving the most in a non-pretentious manner. The small size makes you declutter as you drive, while the lightweight design responds to every thought. It’s relatively low power allows you to enjoy driving without going too fast.
Jason Bell, co-organizer at Miatas At The Gap, the nation’s largest Miata event, told reporters that first-gen Miatas accounted for 30% of participants this year, totaling over 1,800 vehicles.
The NA Miata is the best-selling model of all generations. He told ABC News that it’s affordable in comparison to other cars.
Bell drives his 1994 Miata, a Mazda Miata, at least one time a month. The manual is Laguna Blue, but it’s heavily modified. The previous owner was his uncle who rebuilt the engine, added frame rails, a roll bar, and upgraded the stereo. Bell stated that he wouldn’t buy another RestoMod Miata.
He said that it was difficult to locate an NA Miata. “If you are a fan of throwback cars, there is nothing more analogous than an NA Miata.”
Hagerty Vice President of Automotive Intelligence Brian Rabold confirmed that Miatas in the early teens and early 20s were sought by drivers.
He told ABC News that “Hagerty is seeing a rise in demand for older Miatas, especially the first-generation models.” We’ve noticed younger enthusiasts entering the market and the NA Miata has been the model of choice for these buyers. Gen Z is responsible for 10% of enthusiast car shopping but 38% of NA Miata enquiries.
Rabold noted that Miatas are often sold at auction, and Hagerty has recently offered a 2001 SE SE equipped with LS3 engines for $70,00.
He noted that “record prices appear to be paid for well-executed engineswaps.” The best cars will always have high value: Low mileage, special specifications, and documented maintenance. A great NA Miata is still available for under $10,000, which makes it affordable to collectors.
“Some Miatas over 35 years are considered classics.” The steering is still engaging, and the minimal looks are still in good condition. “It’s one of the best cars ever made for drivers who love to drive.”
Hall, the person who suggested that I restore and revive my dad’s roadster said Miatas were more rewarding than sports cars costing six figures.
Why would anyone want to drive an $150,000 Porsche when you cannot drive it like you should and the repairs will cost over a million bucks? He said. I always thought it was more fun to go fast in a slower car than slow. The Miata is a car you can drive every day and not break the law.
Hall continued, “I do not buy cars to store in garages — they are designed to be driven.”

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Business

King Charles Will Convene A.I. Leaders Amid Calls to Slow Development

The King of Britain, Charles III will be meeting with the leaders of major companies in artificial intelligence this week. This is due to growing fears about how rapid and unchecked developments of technology can lead to global disaster.
King will meet with leaders of companies such as Nvidia and Google as well as OpenAI, Anthropic and DeepMind as well as officials from government and other organizations “to discuss A.I. Buckingham Palace released a press release stating that AI can be deployed and developed in ways which benefit society. The meeting will take place in Ayrshire in southwest Scotland at Dumfries House. This is the home of King’s Foundation – an educational charity.
A.I. Insiders, including CEOs of powerful industry companies, have expressed alarm about the rapid development of these tools. Others have suggested the development of guidelines that are shared and for a deliberate slower pace to allow humans to keep up.
Charles’s A.I. meeting will explore how the technology can be used for good, to “strengthen communities and improve lives”, according to a statement from Buckingham Palace. The meeting will examine how technology can be harnessed for the good of communities, and to improve people’s lives.
It was not revealed who from A.I. companies would attend. Anthropic and DeepMind were listed as companies in the palace’s statement. However, Google, Nvidia, Google, DeepMind and Google did not respond immediately to inquiries about their attendance. OpenAI announced that Sarah Friar would attend.
Hugging Face’s A.I. was the target of a major hacking attack this summer. A group of A.I. agents orchestrated the hacking into Hugging Face, an A.I. OpenAI created agents. OpenAI agents invaded Hugging Face’s system, stole data, took control of the server, and tried to hide their tracks.
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