Markets refuse to price in an Iranian disaster
The Iranian oil crisis risk is the one scenario markets refuse to seriously price in. As tensions escalate around the Strait of Hormuz, the gap between reality and market optimism is becoming dangerously wide.
The Strait is open declares Trump.
It is closed say the Iranians.
No it’s open says Trump!
No no, it’s closed says the Iranians!
Markets are betting on a best-case fantasy
The optimism of the Markets that war with Iran will end and everyone can go back to making money is deeply flawed.
The market is making the assumption that Trump is rational, when all evidence points to him not being rational!
This entire misadventure is an obscene geopolitical blunder that will permanently set inflation higher globally and will drive the entire economy into recession.
A needless, stupid, counter-productive recession.
Hoping that Trump becomes rational is like thoughts and prayers at another school mass shooting.
No one wants to price in the worst-case scenario
There is a deeper issue behind the vacant optimism, the reality is no one wants to actually price in an Iranian disaster.
The ramifications of what Trump and Israel have foolishly embarked upon is not just a canary in a mine, it’s a flock of Black Swans in a minefield!
The destabilisation from fuel shutdowns is disastrous and can’t just bounce back!
The market doesn’t want to consider those real costs and cling to the hope that rational actors will prevail when that is the most optimistic take because Trump is not rational and Netanyahu is manipulating that.
To paraphrase 90’s megaband, Destiny’s Child, “I do not believe you are ready for this Jelly”.
Seems it’s more:
No its closed says Iran
No I say it’s closed says Trump.
….”Because Trump is not rational and Netanyahu is maniplating that!” Trump is a narcissistic megalomaniac, totally obsessed with his own power! FGS someone snap that damned pointed finger of his. We all must know by now he is ‘clinically insane’ so needs to be removed ASAP. Iran is NOT blackmailing the USA; it’s completely the opposite. Meanwhile smarter countries are doing fuel deals where they can. RNZ has reported – Aus is overseas now; Indonesia announced a deal with Russia; Malaysia has negotiated with Iran, while China is looking like becoming the world’s largest oil refiner. All this while spineless, low thinking, Luxon sits on his hands and pretends it’s all under control! And don’t forget how this horrible war began – with the USA and Israel’s surprise attacks on Iran despite being in negotiations at the time. Woe betide.