The Yemeni government announced a major offensive to seize all areas controlled by Iran-backed Houthis. All areas. Every single one. This raises an immediate question: what exactly has the government been doing for the past decade?
The phrasing here deserves attention. "Launching a major military campaign" suggests they haven't tried this before. They have. Multiple times. Since 2014. But this time feels different because they used the word "major" in the press release.
Retail traders will see this headline and immediately check if there's a Yemen ETF. There isn't. They'll pivot to oil futures because surely this affects oil. It won't. They'll buy defense contractors because conflict equals profit. Raytheon won't move. None of this matters to your portfolio but that's never stopped anyone from panic-trading before.
The Iranian backing adds a nice geopolitical flavor. Makes it sound important. Gives cable news anchors something to gesture at on a map. Implies this is part of some larger proxy war narrative that will definitely impact your tech stocks. It won't impact your tech stocks.
Here's what happens next: the offensive begins, gains are announced, territory changes hands, international observers express concern, and your portfolio does exactly what it was going to do anyway. Some day trader in Michigan will lose $8,000 shorting crude because he saw "Yemen" and "Iran" in the same sentence and thought he'd figured out the game.
The most fascinating part is the confidence. "All areas" controlled by the Houthis. Not some areas. Not strategic areas. All of them. It's the kind of ambitious military goal that sounds great in a government statement and plays terribly in practice. But at least the press release was decisive.
The Yemeni government has been trying to recapture these territories longer than most retail traders have had brokerage accounts, and with roughly the same success rate.
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