Energy Secretary Wright announced that Iran might not sign a nuclear deal. Stunning insight. A country threatening heavier retaliation against U.S. attacks probably won't agree to diplomacy overseen by the country attacking it. This required a cabinet-level press statement.
Iran's economy is collapsing under the weight of sanctions and conflict. Their response involves promising faster, heavier retaliation. Classic negotiating posture from a nation with leverage evaporating by the quarter. Wright looked at this situation and concluded the deal may never happen. The Nobel committee is drafting his citation as we speak.
Retail traders parsed this headline for oil plays. They opened their brokerages. They scrolled through energy ETFs. They convinced themselves Wright's statement contained actionable intelligence about crude futures. It did not. It contained the diplomatic equivalent of saying the sky may remain blue.
The deal may never happen. It also may happen. Wright covered both outcomes with one word. Genius hedging. Every technical indicator on my screen confirms that cabinet officials stating obvious geopolitical uncertainties has zero predictive value for your portfolio. The 200-day moving average of pointless diplomatic announcements remains elevated.
Iran warned of retaliation while admitting economic pain. Wright said a deal may not occur. The market priced in nothing because there was nothing to price. Somewhere a day trader bought calls on an inverse leveraged oil volatility product because a cabinet secretary acknowledged that hostile nations sometimes stay hostile.
Wright gets a paycheck for observing that countries bombing each other rarely sign cooperation agreements. You get a margin call for believing his observation mattered.
Photo by Saifee Art on Unsplash
Leave a Comment