NO WAY OUT

This marks the end of week four of the U.S./Israel war on Iran, with no end in sight. Clearly Trump totally underestimated Iran's will and ability to go toe-to-toe in an ever-escalating war, as Iran has shown no sign of capitulation. The U.S. troop build-up continues in the background as Trump attempts to intimidate Iran into surrender. Both sides are far apart in their negotiation demands, because Trump's standard negotiation tactic of "escalating to de-escalate" is backfiring. His increased demands are leading Iran to increase their demands. Both sides are moving apart in the "negotiation". Trump's assasination of Iran's Supreme Leader also backfired. The older leader was martyred and then replaced by his younger much more vital son who no doubt is bent on revenge. On the other hand, Trump's behaviour is becoming more and more bizarre and unhinged with each passing day. The U.S. now has somewhere in the range of 60,000 troops in the Middle East based upon current estimates. Whereas Iran has a standing army of 600,000 who have been waiting 47 years for the U.S. to finally go toe to toe. And now their Supreme Leader has been martyred by "The Great Satan". So, suffice to say these next few weeks should be interesting.

Meanwhile, protests against this latest U.S. "imperialist" aggression are ramping up globally because ironically the U.S. and Iran are two of the countries least economically affected by the war. The U.S. is less affected due to its domestic energy supplies, and Iran is less affected because they are able to increase oil exports during the war at a far higher price. Which means that with each escalation, Trump is further imploding the rest of the world and yet he is totally oblivious to the pain he is causing. The world sees this war for what it is - another resource grab similar to Venezuela. Just this week JD Vance openly admitted the U.S. is going to plunder all of Venezuela's natural resources. Nevertheless, the MAGA echo chamber is totally oblivious to the rising rage that is being directed at the U.S. In their Fox News echo chamber the U.S. is the "good guy" in this war. So suffice to say there is some amount of room for shock and surprise in these days to come when they are subjected to biblical rage on a scale never before witnessed in human history.

Which gets us to the financial markets:

As I wrote on Twitter, global stock markets have now entered into a pandemic level selloff deja vu of March 2020. The war induced fuel crisis has sparked a synchronized global RISK OFF in asset markets. And the accelerating risk asset selloff will soon catalyze the global Minsky Moment, sooner than later. Unfortunately, unlike the pandemic, global central banks are entering this crisis in a tightening mode. Therefore unlike March 2020, they will be slow to react to the incipient financial crisis. That will cause FORCED deleveraging in global financial markets on a scale not seen since 2008.

Asia is the locus of the collapse due to their high reliance on Middle East oil, however Europe is a close second. Both of those regions' stock markets are now totally bidless, which is a problem because they were the consensus Wall Street trades going into this war. India's stock market and currency are both in total free fall.

In the U.S., the massive AI bubble is now final imploding. This past week it was announced that Google had developed new technlogy that allows them to greatly reduce the storage and memory requirements of AI programs. That caused the most overbought AI Tech stocks to implode in the storage and memory sectors. Those were the last stocks to rollover from all time highs. And yet, Google also imploded along with the rest of the Mag7. Also this week, the software sector once again went bidless due to the returned fear that AI will replace all manner of software, internet, video game and IT security companies. And right on time Bitcoin and Crypto re-imploded having completed the retracement bounce of their February crash.

No one knows what will happen next in this war, but from a markets perspective the war is now a secondary factor. The global sell off is past the point of control which means that only investor capitulation can put in a bottom. Therefore we are likely to see massive volumes in the week ahead as overly complacent investors all panic at the same time. Unfortunately, there will be no buyers on the other side of that trade and so just like Trump in the war, investors will have NO WAY OUT.

Now to the top charts this week:

MAG 7

Global AI

Software

U.S. bond yields

Europe

India

In summary, my advice buckle up, because we are about to see a level of global financial dislocation, rage and fury that we've never seen before in our lives.

And just remember one thing "No one saw it coming".

Barron's: March 27th, 2026