ME- First the Bang. Now the Whimper!
Investment Conclusion
The time of maximum risk is over. The Mullahs will shift to survival mode. They will not seek to escalate militarily – though a few revenge suicide bombings could happen. Any significant escalation by Iran will yield a worse outcome for the Mullahs than lying pretty flat. President Trump is at the optimum point on the political yield curve. I doubt he’ll go for more as Iran’s nuclear threat is de facto destroyed The Israelis will bomb on for a week or two. But they will settle for decimation of the Iranian military machine and forego regime change.
Markets will return to business as usual. There’s plenty to worry about US tariffs and budget in July. But the war premium will vanish from safe haven assets.
I will sell oil and prune some gold.