Here we go again: US-Iran talks postponed as Israel launches deadly strikes in Lebanon.
I have long said there cannot be a “deal”, as the impossibility of either side acceding to the other’s demands precludes agreement. The odds of a compromise that finds a middle ground between the interests of Iran, Israel, and the US are about zero. Israel will do what it wants and defy Trump. Iran does not want to relinquish control of the strait or honor Israel’s legitimacy. Israel will continue to attack Lebanon and Iran.
Even if something is eventually finalized, in a few months, maybe only weeks, it’s a virtual certainty both sides will soon be accusing each other of violating parts of the agreement. It won’t be long before Trump is again threatening additional strikes.
I’m profiting by shorting Bitcoin, buying tech stocks, and trading on Polymarket. These trades have profited greatly. If the Iran situation gets worse, which if history is any guide it will, I make money from Polymarket and shorting Bitcoin. If the stock market drops a lot, I will buy the dip. The market will recover a lot faster than Bitcoin, and I come out ahead from the Bitcoin short and from Polymarket. Shown below, Bitcoin has lagged QQQ considerably the past month:
There are many ways to trade the Iran news on Polymarket. What I’m doing is betting that Strait of Hormuz transit traffic will not return to normal. The two relevant contracts are here and here. Here you can see after a brief recovery, the odds are plunging again due to the situation getting worse:
I think this is a better trade than betting on a deal or ceasefire, because there’s far less ambiguity. Even if a deal is reached, traffic is unlikely to return to normal as long as Iran retains control of the strait. A lot of people seem to be greatly overestimating the odds of traffic normalizing, or they’ve mistakenly conflated a “deal” with a “reopening” of the strait.
I’m not sure what Trump’s motive or endgame is, but it has been very profitable to trade. Starting in 2026, Trump has ramped up intervention enormously, starting with Greenland and Venezuela. Presidents, on either side of the aisle, have long used foreign conflict to run down the clock and distract media attention from domestic policy and to boost falling public support.
Trump’s domestic agenda has pretty much stalled out since being inaugurated. His approval ratings are low, at around 38%, the same as his his first term and similar to Biden during his only term. Maye he hopes that he will get a similar polling bump as George W. Bush in 2003 for attacking Iraq. But at least 9/11 was a believable pretext. None exists here.
This is what is expected and predicted. As the public loses confidence in America’s leadership, the private sector–whether it’s Space-X, AI, or the stock market–pulls way ahead. America remains dominant compared to the rest of the world even if its leadership leaves much to be desired. The White House UFC fight captures perfectly the dichotomy or juxtaposition of “boomer led” institutions trying to stay relevant with younger demographics.
America has been held hostage by the gerontocracy, from Trump-Biden-Trump or an increasingly aged Congress. In AI, it’s the opposite. Invoking the concept of “optimality,” maybe this is the optimal arrangement. You want young, sharp people to be running exciting companies and creating economic growth; putting them in government squanders this potential.
Underwhelming leadership is the default mode. The best minds go into academia, where brains are valued more, or the private sector, where competence is valued more. The success of America’s strong private sector makes leadership less important. If anything, having weak or ineffectual leadership is better if it means more autonomy for the much stronger private sector.