Escalation or De-escalation? 🇮🇷

Some loose thoughts:

Trump is trying to gaslight markets into believing de-escalation is coming via quotes and ‘Barakcle’ Barak Ravid stories. At the same time, his unfiltered thoughts are on TS threatening war crimes (hitting energy infrastructure).

I believe that’s an empty threat because it’s a game he can’t win and he actually understands that. But I wouldn’t bet against it, he’s excelled at stupid. But widening the war to may be the point. They’ve been cheering from the sidelines when it’s their backyard, their enemy, their leader allegedly egging on Trump. How’s this different than EU proxy war in Ukraine? Would be only consistent for Trump to try to drag them into it and offload the war onto the Arabs. Generates demand for MIC too.

My base case is neither happens since the US will avoid steps that could prompt Iran to play the Houthi card. If Trump escalates, I expect a short and sharp spike followed by a taco.

They will try to negotiate but it will be a pointless exercise. They fundamentally talk past and do not understand each other (the Americans somewhat more so vis-a-vis the Iranians than vice versa). Read x.com/citrinowiczimpeccable analysis on this. That makes the situation a grotesque inversion of the Ukraine war, where the stronger party wants peace but the weaker party has collateral and global escalation dominance. I’m positioned accordingly on Polymarket.

No ceasefire by the end of Trump’s deadline but yes by June/July. Ultimately, Iran will also want and need a halt to engagement.