Iran fired more than 300 missiles and drones at Israel on Saturday, and while nearly all of them were thwarted, markets including crypto and oil are already reeling as fears of a much wider war spread.

Casualties of War

The war in Gaza has taken its toll on a variety of businesses — both in the Middle East and abroad. Pizza Hut, Burger King, Coca-Cola, McDonald’s, and Starbucks have seen their bottom lines take hits because of boycotts and, in some cases, conflict-related vandalism. And with hostilities continuing to rise, those problems could get worse.

President Biden and other world leaders have called for a diplomatic response to Iran’s attack, which may or may not come to fruition with both Israel and Iran saying they are preparing for escalation. That uncertainty was quickly reflected in financial markets:

• Before Iran’s attack, oil prices had climbed since February to six-month highs and may not be done. “Oil prices might spike at the opening as this is the first time Iran has struck Israel from its territory,” UBS analyst Giovanni Staunovo told Reuters. “How long any bounce will last will … depends on the Israeli response.”
• Bitcoin, the most popular of all the cryptocurrencies, also has seen historic highs lately, reaching nearly $74,000 in mid-March. But after the missile attacks on Israel, bitcoin suffered its steepest selloff in more than a year and a half. Then it recovered, rising nearly 7% and trading at around $64,600 as of Sunday morning, before dropping again just a few hours later, showing just how volatile the crypto market is amid a possibly escalating conflict.

The Halving is Happening: And that’s not the half of it for bitcoin, whose “halving” is fast approaching. Expected to happen on Saturday, the once-every-four-years software update will cut the amount of bitcoin that miners can earn each day for validating transactions, possibly leading to revenue losses of around $10 billion a year for the industry as a whole, Bloomberg reported. 

Halvings usually meant monumental price gains for bitcoin, but the returns have diminished upon each successive halving. But with bitcoin more popular than ever, thanks in large part to the debut of bitcoin exchange-traded funds in the US, maybe halvings will return to form. 

Apartment rents and car insurance are complicating Jerome Powell’s life. To stop inflation, he must tame them both. 

Last week’s Consumer Price Index report bore frustrating, headache-inducing news: Prices rose 3.5% compared to a year ago in March, marking the third month straight of higher-than-expected data. While a couple of key categories experienced some much-welcome price relief — namely, new cars and oil — inflation remained stubborn in the shelter and services categories. Shelter costs, the government’s term for home and apartment rental prices, rose 5.7% in March compared to a year ago, or nearly double the average annual increase seen from 2015 to 2019. 

Premiums at a Premium

Transportation services, meanwhile, were up a staggering 10% in March, powered in large part by the rapid rise in car insurance prices. The cost of auto insurance has now increased 22% in the past year, and nearly 50% since January 2020. There are plenty of accelerants at play:

• Modern, high-tech cars are expensive to repair. Fixing a new Toyota Camry following a head-on collision, for example, costs 43% more than a pre-2018 model, according to data provider Mitchell International; A standard internal-combustion engine car saw average repair bills of $5,564 in 2023, according to auto insurance processing company CCC Intelligent Solutions.
• Crashes have also increased; Almost 41,000 people died on US roadways last year, up 13% from 2019, according to the National Highway Traffic Safety Administration. Meanwhile, the industry may be short around 800,000 mechanics to meet demand in the next half-decade, a study from industry group TechForce Foundation found.

Worse, Hertz recently said that it found EV repairs are twice as pricey as regular cars, and there’s an even bigger shortage of EV mechanics. The insurance industry simply can’t keep up.

Get Rent: Rent market forces are a little cleaner to understand — and solve. Growth has already cooled from the rapid double-digit increases seen during the pandemic, and a building boom of new apartment buildings in many cities has effectively flatlined inflation on the “asking rent” on available or new units. “Renewal rents,” however, have been far stickier, rising as much as 7% in some markets last month, according to Yardi Matrix. Jerome Powell’s sanity may just rely on empty-nester Boomers finally selling their big homes.

This is the stuff of friendly rivalries — except for the “friendly” part.

Late last week, the Oakland Board of Port Commissioners voted to change the name of Oakland International Airport to San Francisco Bay Oakland International Airport, with a final vote expected next month. From Oakland’s perspective, it’s a move to let more travelers know that Oakland — and its airport — are in the Bay Area, while also hopefully spurring more nonstop airline routes. From San Francisco’s point of view, it’s time to sue.

Name NIMBYs

Bay Area residents on both sides of the bay (the San Francisco Bay, officially) are a little sensitive these days. While Oakland has a vibrant multicultural history, it’s always been regarded as the proverbial little brother to San Francisco. That identity has only been reinforced with the likelihood that the city will lose its third and remaining pro sports franchise in five years, with the Athletics likely following the Raiders and Warriors for other locales. The Warriors left for a shiny new arena in… San Francisco.

San Francisco’s angst is different: Whether you agree with its recent portrayal as an urban hellscape rife with homelessness and shoplifting, there is the reality that the San Francisco metro area has lost 54,000 jobs since 2020, the largest drop of any major US city, and vacant office buildings in downtown San Francisco continue to be a problem. But the name itself is apparently worth defending:

• San Francisco officials say the name change infringes on the trademark of San Francisco International Airport, with city attorney David Chiu saying his office plans to pursue litigation to stop the move.
• Meanwhile, Oakland Port attorney Mary Richardson told The Wall Street Journal that there are no exclusive rights to a geographic term like “San Francisco Bay.”

As the Crow Flies: As a completely neutral 20-year Bay Area resident, I’ll point out that the region has, like anywhere else, a patchwork symbiosis, one that involves an Oakland airport that sits on San Francisco Bay, much closer to many parts of San Francisco than the “San Francisco” airport that’s in an unincorporated part of adjacent San Mateo County. Ultimately, any boost in tourists or business travelers to the entire region can only be a plus. If it rejuvenates the region’s fortunes, call it whatever you want.