Mike Baker

And we can pinpoint these economic fractures to the energy shock from the war.

As we've been tracking, it's no secret that oil and natural gas prices have skyrocketed, and that is feeding directly into the cost of plastics, one of the most important inputs in global manufacturing.

A lot of that pressure traces back to the Strait of Hormuz.

For China, that hits at the core of its economic model, because Beijing is a manufacturing-driven economy.

When input costs rise, especially for something as foundational as plastic, it squeezes margins across entire industries.

That squeeze is hitting a sector that most people overlook, and that would be the toy industry, and it's hitting it hard.

In Yulin City, a low-wage manufacturing hub about 260 miles west of Hong Kong, thousands of workers took to the streets in a rare public protest after toy factories abruptly shut down last week.

Workers demanded back pay and compensation, draping banners across factory gates with slogans like, quote, give me back my blood and sweat money, end quote.

And some 400 miles away in Shantou, which produces roughly a third of the world's toys, industry groups were warning of, quote, courting and panic days after the war began, as plastic prices surged.

Accordingly, China's manufacturing base is being squeezed from both sides, rising input costs and weakening global demand.

To be fair, Beijing has some insulation.

Strategic oil reserves, refining capacity, and state-controlled fuel pricing can soften the blow.

But that is not a sustainable long-term solution.

All right, I want to turn to Gaza, where Hamas will soon choose its first true leader since the killings of Yahya Sinwar and Ismail Haniyeh.

It's a long-delayed vote to determine whether the terror group keeps fighting Israel or pulls back to survive.

On the surface, this might sound like internal politics, just another leadership reshuffle inside one of Iran's proxies.

But that is not what this is.

What we're really looking at here is a decision point for the terror group's future after the war.

Because this vote is coming after Israel's campaign in Gaza wiped out much of Hamas's senior leadership and left large parts of the strip in rubble.

And yet, despite all that, Hamas is still standing and trying to decide what comes next.