Dear Reader,
The US attack on Venezuela and the abduction of its president was, of course, the story of the week. The clinical efficiency with which the operation was conducted and its success are a great boost for US military confidence -- Trump said it has wiped out the humiliation in Afghanistan. Perhaps Bob Dylan’s classic ‘Masters of War’ would be the right musical accompaniment for the strike.
We examined what the toppling of Maduro means for global financial markets, and the impact, or lack of it, on oil markets and the heightened global uncertainty. Our columnist considered whether the strike was more about securing a far more valuable prize next door: Guyana’s light, sweet crude. But it was also about denying China a foothold in Latin America, as this FT story, free to read for Moneycontrol Pro subscribers, tells us. And, of course, sceptics say it’s just Trump’s way of diverting attention from his domestic problems.
It seems to be more than that. This article says the strike was the opening salvo of a stark new global strategy — one that treats alliances as transactions and sovereignty as conditional. That analysis seems borne out by Trump’s belligerent statements on Cuba, Colombia, Mexico and his surreal bullying of Greenland. This story tells us how Trump could take control of the Arctic nation.
The strike on Venezuela, the explicit threats of US intervention in Cuba and Colombia, the bid for Greenland, and the systematic withdrawal from UN institutions together mark a decisive shift towards a more openly predatory model. The post–Cold War project of integrating states into a US-led institutional framework — WTO discipline, UN mediation — is being actively dismantled. In its place is a return to blunt force: sanctions as siege warfare (Venezuela), explicit military threats (Cuba, Colombia), and territorial acquisition as naked realpolitik (Greenland).
Universal norms and multilateral constraints are liabilities for a hegemon that can no longer reliably secure outcomes through consent. Economic and military pressure is thus applied to discipline any model of development that resists subordination to US corporate and strategic interests. This shift to open force dramatically increases systemic volatility.
The rise of China is central to this shift. The threat China poses is that its state-led development model demonstrates that large-scale industrialisation and technological upgrading can occur outside Western financial and institutional discipline.
Sanctions, tech embargoes, and violence intensify precisely because market competition alone can no longer guarantee dominance. Debt leverage, sanctions regimes, asset seizures, and exclusion from payment systems constitute a new grammar of plunder. Accumulation is no longer organised through global commons and integrated supply chains, but through the enforcement of exclusive spheres of influence — Latin America as a “backyard”, the Arctic as a future resource frontier. The objective is to prevent competitors from consolidating alternative circuits of trade, finance, and development.
Defence spending, border security infrastructure, surveillance technologies, and private military contractors are new centres of accumulation, reflected in Trump’s proposal for a $1.5 trillion US defence budget and the rise of defence stocks.
This turn to predation abroad needs a narrative framework for domestic audiences. Nationalist populism, civilisational rhetoric, and threat inflation mobilise consent and construct the internal enemy (migrant, dissident, ‘woke’ liberals) needed to discipline domestic opposition. The garrison state needs an ideological operating system.
The old order, for all its iniquities, provided predictability. The new one has no rules. Sudden sanctions, trade ruptures, and regime-change operations will make long-term investment planning difficult, elevating risk premiums.
Financial markets have so far largely ignored these systemic risks, clinging to the belief that the old rules of liquidity and bailouts still apply. This complacency is partly because the initial tremors — Venezuela, Cuba, the Arctic — have targeted frontiers peripheral to global capital flows. However, the new political realities point towards stagflation shocks, fragmented markets, and a reallocation of capital towards perceived safe havens. In this nascent order, the goal is not merely growth, but security and geopolitical alignment. Markets like India, where we anticipate an earnings revival in 2026, may benefit from this flight to relative stability and domestic demand resilience, although fresh US tariff threats unnerved Indian equities this week.
The coming years will reward those who understand geopolitics not as background noise, but as the primary driver of capital allocation. The goal is no longer just to pick winners, but to avoid being on the wrong side of a new, enforced divide. Gita Gopinath wrote ‘Don’t be fooled — Everything has changed for the global economy’.
We are witnessing the death throes of the old world order and the violent birth of another.
The interwar period (1920s-40s) faced similar dynamics: a turn to autarchy and spheres of influence, fusion of state and capital, and catastrophic violence. Does this cycle inevitably end in major war, or are there off-ramps? Nuclear weapons change the calculus, but also make miscalculation apocalyptic.
This poem by Bertolt Brecht, written in 1937, could also be appropriate now.
‘My brother was a pilot
His papers came one day
He got his kit together
And took a southward way
My brother is a conqueror
Our people need more space
And winning territory by war
An old dream of our race
The space in the Spanish mountains
My brother got to keep
Measures just six feet in length
And is five foot deep.’
Cheers,
Manas Chakravarty
In case you missed them, here are some of the other stories and insights we published this week, apart from our technical picks in the equity, commodity, and forex markets
Stocks
Bharat Coking Coal IPO, GM Breweries, Weekly Tactical Pick: Should investors bet on the health of a weak healthcare stock? From slowdown to surge — the auto turnaround in 2025, Can Karur Vysya Bank maintain its consistent show in 2026? Jewellery companies, Landmark Cars, What’s in it for shareholders if CSB Bank merges with IDBI Bank? Is the FMCG sector poised for a recovery run? Shaily Engineering, Astra Microwave, Can banking stocks continue to outperform amid a sharp rate cut cycle? Shringar House of Mangalsutra
Markets
The RBI's tale of two equity markets
MC Markets Poll: Market divided on government’s ability to meet fiscal deficit target in the upcoming budget; majority see capex growth over 8%
Will sector rotation repeat this year, turning 2025’s losers into 2026’s winners?
India enters 2026 at market inflection point amid global slowdown concerns: Quant Mutual Fund
Crypto SIPs grow over 60% in India as retail investors bet on long-term gains
Budget Snapshot
The fiscal tightrope
Why Indian companies are winning under both income tax regimes
The Indian State vs The ASEAN model: A fiscal disconnect
RBI surplus could play a big role in fiscal prudence for FY27
Fertiliser subsidy to rise on firm prices, tight supplies
India’s banks look healthy, but the real risk lies beneath the balance sheet
Financial Times
China’s AI chip dragons’ firepower is mostly mythical
How to AI-proof your job
Ruchir Sharma: Top 10 trends for 2026
Companies & Sectors
State policy changes inducing growth headwinds for alcoholic beverage companies
REITs accelerate institutional money flows in India’s office realty market
In Q3, NBFCs to show more bang for buck but microfinance to bleed
Margins crack raising financial viability concerns for road construction firms
Post-festive sales surge drives earnings upgrade in auto sector
Tech Mahindra turns around ahead of target?
Banks may see robust loan growth in Q3, but margins may bite
Banks struggle to attract deposits as government keeps small savings rates high
Economy & Policy
Latest GDP estimates reaffirm that growth will recover on domestic demand resilience
A resilient 7.4 percent GDP growth masks a stark divide
The PMI's warning for the Budget: Animal spirits are fading
Why an ‘Aadhaar’ number for EV battery packs is a great idea
El Nino will raise electricity demand, but can hurt farm sector
The Indore warning: Why India must fix its urban waste crisis now
Pro Economic Tracker
Tech & Startups
Startup Street: Can politics derail gig economy platform start-ups?
IT moves beyond agentic AI as Wipro, others bet on autonomous, quantum-led systems for 2026
Budget 2026: Space startups flag tax hurdles, seek early government orders
Geopolitics & Geoeconomics
Jaishankar’s funeral diplomacy sets constructive tone for healthy ties with Bangladesh
Iran unrest injects volatility into global fault lines
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
