Iran War: An Unstable Equilibrium

The current limbo cannot last... but what is the stable equilibrium?

This is probably the most confusing situation in the recent military history. Wars are never easy to analyze, but this one is on track to become the most chaotic conflict in the modern history. Complexity arises due to economic, political and military issues influencing each other simultaneously.

Sparse signals we receive paint a rather stark picture for both sides of the conflict. At the same time, the respective points of view are misaligned, creating an environment in which all sides have clashing perceptions of their incentives and payouts. In this game of levers , pressure points and risks, there is no clear winner.

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Current Situation

Current developments, if anything, do confirm that the framework I presented is sound. However, complexity makes any long, or even medium, term forecast uncertain. Short-term outlook is clear, but makes for a difficult trading environment across TradFi and prediction markets.