Scott Bessent announced that economic sanctions will replace military action against Iran. He said this on CNBC. He said it with confidence. The kind of confidence you have when you've never had to explain to your wife why you bought leveraged ETFs on margin.
Iran called the sanctions "extraterritorial sovereignty." That's what happens when a country hires a lawyer to write their complaints. They could've just said "f*ck off" but instead they went with the kind of phrase that gets workshopped in a conference room with bad coffee and worse lighting.
Bessent believes spreadsheets are weapons now. He thinks freezing bank accounts is the same as strategic deterrence. This is the financial equivalent of telling a burglar you're going to ruin his credit score. The burglar is still in your house. He's still taking your TV. But his FICO just dropped forty points so you technically won.
Retail traders heard "sanctions" and immediately started googling which defense contractors to buy calls on. They don't know what extraterritorial means. They don't care. They saw Treasury Secretary on TV and assumed it's bullish for something. Probably Palantir. It's always Palantir with these people.
The proposed measures will "likely negate the need for major U.S. military operations." Likely. That word is doing more work than a compliance department during an SEC audit. It's the same word your doctor uses before prescribing you something that might cause liver failure. Probably won't. But maybe will. Good luck.
Iran gets threatened with economic policy and the S&P doesn't move. Oil futures barely flinch. The market looked at geopolitical tension and decided it cared more about Nvidia's next earnings call. That's how irrelevant this entire headline is. A Treasury Secretary just said we're going to sanction a country instead of bombing it and the algos didn't even blink.
Bessent went on television to announce his plan is to financially strangle a foreign government and somehow that's the boring option now.
Photo by Saifee Art on Unsplash
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