Iran war's damage to economy could worsen yet markets remain complacent
15 comments · 90% upvoted · source · other discussions
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staghornworrior
MarketCrache
Normative bias. Last week was OK, This week is OK. Next week must be... blam!
Saw this in Japan during the large earthquake and tsunami. Lots of people died because they couldn't believe any tidal wave would hit them.
Herds of 2.4 ton Prado's still swarm the highways in a jam to get to the CBD office.
niknah
Trump doesn't want to be seen as the one that wrecked the world economy. The markets think that he will stop soon and does not price in a long term shutdown of the Hormuz straight. So it doesn't look like he's wrecked the economy and he doesn't feel pressured to stop.
artsrc [OP]
Trump is not always the most effective leader.
https://www.theguardian.com/us-news/2020/sep/24/donald-trump-coal-miners-us-election
natemanos
I don't necessarily think the market is being complacent. I guess it depends on what you quantify as economic damage. It's possible that the most common extreme inflation version of financial media is wrong, and that this could lead to real demand destruction and, in turn, lower overall oil demand.
This is about relative balance, and Iran's focus on "allies" to the US, who aren't much of an ally at the moment, shows the relative balance the US has; this disproportionately benefits them over others as oil rises due to their independence from oil.
Part of the issue is that many people dislike Trump so much that it's hard to parse out neutrality from the situation. I don't think the US can back out claiming victory; there needs to be some concrete understanding, otherwise this will continue. This is a common Trump tactic, so taking his posts literally is the wrong take. There are not just financial implications, but many across different specialisations as well, some of which the public may never find out.
Markets have been trained to expect government bailouts and stimulus. They aren’t pricing the rick of this event properly. Even getting Australians to understand the scale of the problem and how interdependent the Asia fuel refining supply chain is on Middle Eastern oil is frustrating.
artsrc [OP] 4 points · Mar 2026
I don’t think Australians have great difficulty understanding any of this.
What I see is that prices and markets are a vail that economists use to obscure reality.
Reality is there is less oil. We should reduce use of oil for purposes we value the least now.
staghornworrior 8 points · Mar 2026
Agree, but here is an example. About 1 week after the war kicked off I could see the scale of the problem because I watch oil markets. I tried to convince my family that we should cancel our Easter camping trip because of fuel shortages. They basically called me chicken little and repeated all of the government talking points from the media blaming panic buyers. On Saturday after diesel hit $3 everyone decided to cancel the trip.
Total_Conflict_6508 2 points · Mar 2026
Veil
[deleted] 1 points · Mar 2026
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staghornworrior 3 points · Mar 2026
Should I have grabbed a 1000 liter IBC and filled up?
[deleted] 4 points · Mar 2026
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artsrc [OP] 1 points · Mar 2026
A maritime occupation against land based drone and missile attacks on commercial shipping?
staghornworrior 0 points · Mar 2026
I’m not a trader, I run a couple of companies and I watch financial markets and keep an eye on macro trends that might affect my businesses.
I a couple of years ago brought an engineering company that operates in the energy sector. High oil prices are going to be a boom for business assuming they don’t cause broad structural disruption to our economy.
artsrc [OP] 1 points · Mar 2026
Isn't the superior knowledge that nominal share prices will remain high because the government will use their fiscal and monetary power to keep the economy strong?