TACO, TACO, TACO – Is It Stock Market Gains that You Are After?

Trump’s Backdown
I am in Melbourne and was anxiously waiting for the outcome of the psychopath’s 48-hour ultimatum on Iran.

At 10pm yesterday (7pm Kuala Lumpur time), news came through that Donald Trump had backed down from his ultimatum, claiming that Iran had agreed to negotiate. However, Iran stated that no such agreement existed.

The contradiction is entirely understandable. You can never trust Trump’s words, and therefore the true reason behind his decision remains unclear.

I would strongly suggest that it is the U.S.’s ultimate strategic realisation, combined with domestic political pressure, that has caused the TACO to “chicken out” again—albeit for five days, as I understand it.

Trump issued the ultimatum on March 21, demanding that Iran open the Strait of Hormuz or face strikes on its power plants. Yet, two hours before the deadline, he de-escalated, claiming that the U.S. had “very good and productive conversations” with Iran. In his dreams? (Just a day earlier, Scott Bessent said the U.S. would escalate in order to de-escalate. You really do not know what Auntie Bessent meant!)

What Likely Really Happened

While public accounts differ, the underlying reality is likely a combination of factors:

·       Iran’s credible military threat: Iranian officials and media consistently stated that Trump “retreated” after Iran warned it would target “all power plants in West Asia” in retaliation. Iran understands that disruption of the global oil market is its “last remaining super-weapon.” The Strait of Hormuz blockade had already caused one of the largest oil supply disruptions in history, with Brent crude reaching approximately $112 per barrel.

The threat to Gulf states’ desalination plants is also real and would have severe consequences for countries that host U.S. bases.

U.S. strategic calculation: Despite his public claims, Trump appears to have been seeking an “exit” from what he calls an “excursion” into Iran. The war has not produced the quick capitulation he expected. The Revolutionary Guard remains in power, the new Supreme Leader (Mojtaba Khamenei) is still in place, and no uprising has materialised.

Domestic political pressure: The oil price spike from the Strait closure has been fuelling inflation and hurting American consumers, with gasoline prices approaching $4 per gallon. This poses a serious political threat to Republicans ahead of the midterm elections.

Military logistics: This pause may allow the U.S. military to resupply ammunition after heavy use of expensive precision-guided missiles in the early weeks of the conflict.

The conflicting narratives reveal several important strategic realities:

·       Iran is not collapsing: Despite significant strikes, Iran’s leadership structure remains intact, and its military capabilities remain dangerous.

It also dispels the mistaken belief that Iranians would come out en masse to celebrate the death of Ayatollah Ali Khamenei. On the contrary, it has likely deepened hostility toward the U.S. and Israel.

Energy markets are the key leverage point: Iran’s ability to disrupt global oil flows gives it bargaining power that military strikes alone cannot eliminate.

The TACO phenomenon is real: Trump has shifted from demanding “unconditional surrender” to suggesting that the U.S. will not be responsible for permanently policing the Strait. (Notably, most allies are not sending warships to the area.)

The five-day postponement does not mean the crisis is over. The coming days will reveal whether this is a genuine diplomatic opening or merely a temporary pause before further escalation. We need to see:

• Whether talks begin between U.S. and Iranian representatives
• Oil price movements and shipping activity in the Strait
• Any resumption of U.S. or Israeli strikes after the five-day period
• Reports of U.S. military repositioning or resupply

Iran’s Vulnerability
We have often seen that Iran’s retaliatory threats are not always carried out decisively. Its actions tend to be reactive rather than proactive. Nonetheless, it has endured.

Based on recent assessments from U.S. intelligence and independent analysts, Iran is highly unlikely to capitulate anytime soon. Despite significant military losses and the killing of its long-time Supreme Leader, it has adopted a strategy of attrition designed to outlast the U.S. and Israel.

A Resilient, Hardline Government

As mentioned earlier, rather than creating cracks in the power structure, the conflict has made the regime more hardline. The system has become more entrenched under the control of the Islamic Revolutionary Guard Corps (IRGC).

The transition of power to Mojtaba Khamenei has been relatively orderly and has not led to the expected paralysis.

Shift to “Asymmetric” Warfare

Iran’s conventional military capabilities—its air force, navy, and air defence systems—have been significantly degraded. However, Iran has never relied primarily on conventional warfare.

Instead, it has shifted to asymmetric tactics, for which it has prepared for years. This includes the use of low-cost drones and missiles, as well as leveraging control over critical chokepoints. With U.S. interception capabilities in Gulf bases degraded, Iran can increasingly deploy more advanced missiles against Israel.

Iran’s goal is not to win a conventional war, but to make the conflict so costly that the U.S. and Israel are forced to seek a ceasefire on Iran’s terms.

By effectively closing the Strait of Hormuz—through which about 20% of the world’s oil passes—Iran has driven up global oil prices, fuelling inflation and increasing political pressure on the Trump administration.

By deploying low-cost weapons such as the Shahed-136 drone (around $2,000), Iran forces the U.S. and Israel to expend extremely expensive interceptors, such as Patriot missiles (around $4 million each), creating a significant economic burden.

By utilising its vast mountainous terrain (1.6 million sq km) and a network of underground “missile cities,” Iran presents a dilemma: air power can inflict damage but cannot permanently eliminate a dispersed, hidden, and resilient force.

Are They Negotiating?

I believe it is all in TACO's dreams the night before.

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Contradictory signals: While Trump claimed “very good and productive conversations,” Iranian officials have firmly denied that any direct or indirect contact took place. Iranian media suggest Trump delayed strikes because Iran’s military threats had become more credible.

·       Iran’s conditions: President Masoud Pezeshkian has stated that Iran is open to ending the war—but only if its conditions are met. These include recognition of Iran’s rights, payment of war reparations, and firm international guarantees against future aggression. The U.S. has already rejected the idea of reparations, making a quick breakthrough unlikely.

In summary, while Iran is weakened and under strain, its leadership remains stable, its core retaliatory capabilities intact, and its strategy focused on fighting a long war of attrition rather than surrendering quickly.

The Fibre Optic Factor

Some have speculated that Iran’s ability to cut fibre optic cables in the Strait of Hormuz could be “the straw that breaks the camel’s back,” potentially crippling IT and data infrastructure across the Gulf.

While the threat is real, the situation is not quite so dire. The Strait is indeed a major digital artery, with several key undersea cable systems—such as AAE-1, FALCON, Gulf Bridge International, and Tata TGN-Gulf—connecting Asia, the Middle East, and Europe.

However, the greatest danger may not be deliberate sabotage, but the chaos of war itself.

·       Collateral damage: The most likely cause of disruption is accidental damage from naval activity, mines, or ships dragging anchors across the seabed.

·       Iran’s constraints: While Iran has the capability to damage cables, doing so would also harm its own connectivity, which is already heavily restricted.

The real danger lies in the inability to repair damaged cables during active conflict.

·       Repair ships cannot operate safely in a war zone, meaning outages could last weeks or months.

·       This creates a global digital bottleneck, especially with both the Strait of Hormuz and the Red Sea under disruption.

·       India is particularly vulnerable, as a significant portion of its westbound internet traffic passes through these routes, affecting finance, banking systems like SWIFT, and cloud services.

Or Is This About the Stock Market?
The U.S. stock market has reportedly climbed following these developments. Does this mean Trump or his insiders are profiting?

There is currently no public evidence that Trump or his associates have directly profited from this specific market movement. However, the sequence of events has drawn scrutiny and accusations of potential market manipulation.

A Pattern

The market reaction follows a suspicious pattern: Markets fell after Trump’s ultimatum; Markets surged after the postponement; and markets dipped again after Iran’s defiance.

The “Who Profited?” Question
There are two areas of concern: traditional stock trading and “war betting” markets.

Earlier in March, calls were made for an insider trading investigation after Trump posted “IT’S TIME TO BUY” shortly before announcing a tariff suspension that triggered a market rebound.

While there is no conclusive proof of his wrongdoing, the market did create opportunities for insiders like Trump, and by some accounts he did profit in suspicious ways.

(However, a rumour that Barron Trump bought $30 million in oil before the war was investigated and found to be baseless.)

I hate to think that a president can stoop so low to make money out of situations like this. However, one can never be sure what this chaotic psychopath might do.

Regardless of the speculations, this psychopath is putting the entire global economy at risk through his whims and fancies.

Let’s tune in again in five days’ time.

End