Is the Ultimatum of Donald Trump horrible? On Feb 27 it was really horrible. After stopping the negotiation for 3 hours to get a final conclusion, Trump announced negotiations failed. That Ultimatum was just 3 hours. Israel started the decapitation with 48 keymen of the cabinet, for they believed the US normally would start a war in midnight, but neglected this time the main actor is Israel and not US.
Last Friday, Trump again issued an Ultimatum of 48 hours. Trump is Trump. I said numerous times that his policies need to up-date, up-hour, up-minute and up-second. On expiry he issued another Ulti-Ultimatum of 5 days. Some people said it is just his trick; it is just fake news that he was talking well with Iran, just trying to stabilize the financial market and make more money for himself. Before he released his post, large amounts of short selling in oil were seen.
Another saying is that he just wants to buy time, for the Marine Corps are on the way, even arriving in the Arabian Sea, still need some time to go inward into the Kharg Island which is located in the inner North of Persian Gulf. Trump just wanted to make a large attack on the weekend and announced victory on Monday.
Even though the above sayings are reasonable, they should not be the main reasons, just minor reasons for extension. Even Iran disclosed they had no talks with the US; those are just fake news. But from market response, they believe there should be some secret talks or at least indirect talks. The US uses Turkey and Egypt to transfer their message to Iran, and in turn Iran uses Pakistan to transfer their message. It is hard to prove the actual situation is really like this, but the market believed in this.
Now, there is a strange condition in Iran. The president is totally unhurt, even the secondary, tertiary, and quadruple officials were killed, but such an important position is totally unhurt. US chose him as the survivor; they must leave one keyman to control the scene and make a decision for negotiation. If Iran becomes totally uncontrolled, it will be more horrible.
US listed out basic terms including Iran must stop development of nuclear bombs, must give out the condensed uranium, not to develop long distance missiles, stop helping Hezbollah and Houthi. Iran listed out the terms that the US must give compensation for the Iranian damage and loss in war, promised not to attack them, and asked Israel and other Middle East countries not to appear in hostile state, lift all the sanctions. The US cannot ask them to change their regime. They are nothing but new wins in the old pot.
One thing surprised a lot of people. The US raised an issue that the Hormuz Strait should be commonly guarded both by US and Iran to make it free for passing. According to the High Sea Convention, the Strait actually belongs to public water. It does not belong to the US or Iran or any country, it belongs to the United Nations, and every country has the right to keep it free for passing in the highest safety. But regretfully UN cannot do anything. For they do not have a supernation to supersede the Five Powers of Security Council.
What happens in Iran? Of course, there should be some hawkish and some dovish power. But now it is said hawkish is in domain power even though the people is just 15% of total population, but they hold military power, while the rest 85% are general citizens with no weapons at all. So, what would happen? Investors can only wait. Now both sides are exhausted and really want to end the war, but they are gambling the opposite side will collapse first. They are fight for their face rather than for war. Will Trump be defeated by inflation or Iran defeated by a dovish party? Will there any extension on deadline? Will their be any Ulti-Ulti-Ultimatum after this?
Heaven knows!
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.