Sayed Mohammad Marandi, professor of English Literature and Orientalism at University of Tehran made an interesting observation about the timing of Trump’s announcement and a 5-day pause in bombing of Iran’s energy infrastructure. In an x-post yesterday, he stated that,
Every week, when markets open, Trump makes these kinds of statements to drive down oil prices. Even his five-day deadline aligns with the closure of the energy market. But in reality, there are no negotiations underway, nor does Trump have the capability to reopen the Strait of Hormuz. Iran's firm threat has once again forced Trump to back down.
It’s one of those statements, once you read it, there’s no unreading it. In a way, it shouldn’t be a surprise: the greatest and most important battle Trump faces today is the political battle at home, and if the markets punish him for the current Iran misadventure, the voters will likely punish him during mid-term elections this fall. A prolonged conflict in the Middle East would be all but certain to raise the price of oil to new all-time-highs, along with interest rates, and probably also crash the stock markets.
From that point of view, it would be understandable that he’d rethink escalating the war into an oil market rally, and crashing equity valuations and bond prices. That’s easy to see, but it’s a lousy way to run his foreign policy strategy, especially one that’s hyperactive and aggressive as Trump has been pursuing of late. Wars are unpredictable enough. Making decisions around market outcomes only complicates things further, probably setting the U.S. at an additional disadvantage against Iran which doesn’t have to worry about their stock markets or oil prices.
To be sure, none of this excuses President Trump; he now owns the Iran war and he and his advisors should have foreseen all these complications, before pulling the trigger. They probably did, but for some reason were dismissed. But another, much more troubling view emerged yesterday.
An X account called Bark @barkmeta (they have nearly 300k followers") posted an extremely serious allegation, pointing out the following:
“5 minutes before the President announced a halt to attacks on Iran… someone placed a $1.5 BILLION bet on stocks going up and dumped $192 million in oil. These trades were 4 to 6 times larger than anything else in the entire market. Whoever did this wasn’t guessing. You don’t risk $1.5 billion on a hunch.
There was zero public indication this announcement was coming. No leaks. No press. Nothing. The only people who knew were in the room when the decision was made. … And within minutes they made more money than most Americans will earn in a thousand lifetimes. In a single trade. On a war that cost you $4+ a gallon gas and $16 billion in tax dollars.
… This is not the first time. Every major announcement from this administration has had massive suspicious trades right before it dropped. Tariff reversals. Policy shifts. War decisions. This is the most blatant insider trading operation in the history of American politics. It’s not even close. And it’s happening over and over in broad daylight. …”
Another few market-focused accounts made similar allegations suggesting that there may be real fire where that smoke comes from. The facts should be easy enough for a serious investigation to establish beyond any doubt. If they turn out to be true, their implications would be extremely troubling. I don’t expect that the President is cynically making trades, then announcing news to enrich himself and/or his family members.
More likely, some members of his administration who are part of the circle of deciders could be passing the information to their friends in the markets, or the administration’s deliberations and communications are completely compromised, or both. Absent a thorough investigation of these claims (I’d start by asking Howard Lutnick some questions), any explanation about the way members of the administration, their family members, or friends might be profiting from this war could be as plausible as the next one, including those implicating the President himself.
Even if these allegations turn out to be unfounded, their seriousness and their impact should not be dismissed. They may not be discussed by Bloomberg or MSNBC, but they’ve triggered viral discussions in social media. In less than 24 hours, Bark @barkmeta’s X-post has been reposted over 50,000 times, received 123,000 likes, and was viewed 8.2 million times.
Another market-focused account, “unusual_whales” has posted similar allegations. They have 3.1 million followers - probaby more than Bloomberg’s and MSNBC’s viewership combined. The impact of these allegations could be impossible to judge, but they will almost certainly seep into what we call “market fundamentals.” It may not even be openly declared, but if a large segment of the public comes to suspect the Trump administration as unscrupulous war profiteers, this could undermine the markets’ confidence in the “faith and credit” of the United States.
It could also undermine the people’s confidence in their government and in President Trump. Any policy decision on the part of the administration could be interpreted as more of the same: more war profiteering on an industrial scale. In all this, Trump’s promiscuous relationship with truth and facts doesn’t help things. How might the markets treat these burgeoning doubts? I’m afraid that would be impossible to predict, but it might become an increasingly significant factor affecting the markets.
Trump’s international partners are already disbelieving the administration. Israeli Prime Minister Netanyahu has already distanced himself from Trump’s “pause,” stating that it doesn’t affect Israel’s war plans. The Iranians have denied that any talks are going on (all discussions about this or that Iranian official being the negotiating partner and future leader of Iran are almost certainly psyops, contrived to preserve the administration’s credibility).
This suggests that we might not get a significant “relief” correction in energy markets and that a wholesale destruction of energy assets and infrastructure in the Middle East is still a possibility. The risk, in energy markets, but also in interest rates remains on the upside.
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By Independent News Roundup