The Pyrrhic War

pyr·rhic

/ˈpirik/

adjective

(of a victory) won at too great a cost to have been worthwhile for the victor.

There is tremendous disinformation taking place in this war right now, but a few salient facts remain irrefutable:

1) The goal of this war remains shifting and unclear. Trump has stated many times that the U.S. never "needed" this war in the first place. For NeoCons who demanded this war their goal was to destroy Iran TOTALLY as a nation, because anything short of that will NEVER prevent Iran from pursuing nuclear weapons. However, destroying Iran would destroy the entire Middle East including Israel.

2) The U.S. can't permanently secure the Strait of Hormuz, therefore this is a waiting game now.

3) Iran can hold out longer than expected in a blockade scenario because this is now a proxy war between China and the U.S. and China can supply Iran with money and arms indefinitely. In the Vietnam war China backed North Vietnam against the U.S. for 10 YEARS straight and WON. Of course that's the only war that NeoCons AND Trump were avoiding at all cost.

4) No one knows when this war will actually end.

What we DO know is that markets believe this war is already over:

This is the chart of the S&P 500 I showed on Twitter. What it shows is that the market was following a path very similar to last year up until this latest (U.S. blockade) escalation. Last year when Trump escalated the trade war the market tanked. This year when he escalated, the market went vertical. Why? Because no one wants to miss the big rally. Not only that but new highs (lower pane) are the second lowest in 20 years at an all time high. Which means that the broader market is still weak deja vu of last year. And this pattern of course that we see currently is called a "broadening top" and hence it's not typically "bullish".

S&P Tech is deja vu of 2022 even though this counter-trend rally is now bigger.

For some reason this war has led to melt-up in the RISKIEST stocks.

Which means the AI bubble is now TERMINAL.

Global markets are already rolling over from the second lower high.

In summary, there are several irrefutable but largely ignored facts regarding this war. But by far the worst of all ignored facts regarding this war - this week the IMF said that this war has now placed 45 MILLION people globally at risk of starvation.

That is a staggering number that grows in magnitude every single day. And that's with global markets near all time highs. Imagine what's going to happen when global markets implode and global depression takes hold? This will be by far the most expensive war in human history in resulting human death toll and financial destruction.

And that's for a war that Trump repeatedly claims the U.S. never needed in the first place.

Which is how you get a Pyrrhic War.

From DAY ONE.