00:01The Dow Jones average of American blue chips fell 2.6% at the opening and managed to recover
00:07during the day to finish less than 1% lower, as did the S&P 500.
00:11But look what's going on in Korea today.
00:13The share market there has crashed more than 10%.
00:16And shares in Japan, France and Germany are down more than 3%.
00:20In Australia, the market shrank about $50 billion with falls across the board.
00:25Miners, banks and retailers.
00:27Gold and silver fell sharply because a lot of traders had to sell them to cover their
00:32share trading margin calls.
00:33But the oil price kept rising, even as Donald Trump put out a post on Truth Social saying
00:39he'd ordered the US Development Finance Corporation to provide political risk insurance to ships
00:44going through the Persian Gulf, at a very reasonable price.
00:48And if necessary, would ask the Navy to escort them through the Straits of Hormuz.
00:53And the Australian dollar is down against all other currencies.
00:56Now, here's a graph comparing the oil price rise this time with the median of all geopolitical
01:01shocks since 1980, obviously not including the two oil shocks of the 1970s.
01:06It does include the Iran-Iraq War, the Arab Spring, two Gulf Wars and Russia's invasion
01:12of Ukraine.
01:13Now, as you can see, this time is about par for the course.
01:16Also, it usually takes about four to five months for the oil price to get back to where it
01:22was.
01:23Finally, some stuff from this morning's national accounts.
01:26Real GDP increased 0.8% in the quarter, as did total hours worked.
01:30So, the growth in GDP per hour worked, otherwise known as productivity, was zero.
01:36So, no sign of AI improving productivity yet.
01:40Which might have something to do with this graph of domestic demand, which is the dotted
01:44line.
01:44It's two main components, government, that is all governments, including local and household.
01:50And it's pretty clear, isn't it?
01:52Here are the components of government or public demand.
01:54And, well, it's not defence or investment, it's spending, and that's finance.
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