Some blog posts I write on a Sunday afternoon can wait until Monday morning, and then there are those that cannot. This post falls into the latter category.
I have, for a long time, been suggesting that the moment will arrive when the economy might tip into outright recession, and even potential depression, because of the failure of stock markets in reaction to what is happening in the real world all around us.
So far, the ability of those in stock markets to delude themselves that the consequences of financial engineering, which, through the process of financialisation, is continuing to give the impression of ongoing prosperity amongst major US tech companies, has prevented this. But illusions always shatter, and most serious commentators have agreed that this must be the case since late last year, and I got there somewhat earlier.
Why, then, post this now? That is because it is always an external shock that creates a crisis, and such a shock is developing now.
There is no one who can pretend that the actions that Israel and the USA are taking in attacking Iran can be legally justified.
The Iranians might be toxic, oppressive, and clearly abusive of human rights at many levels within that country, but this has never provided a legal justification for war, and it has not now. The reason for that is quite simple. There has never been an occasion when bombing from afar has created good outcomes in the country being bombed. The evidence from Afghanistan, Libya, Syria, Lebanon, and so many other countries provides proof of that.
Of equal importance, the economic shock from this war is going to be very real. If the Straits of Hormuz are closed, and if there is an impact as a consequence on shipping through the Suez Canal, which is entirely possible, then basic oil flows will be seriously disrupted. So, too, could other supply chains. And what we know is that this will have major consequences. Let us just look at some of those.
If China cannot get its oil from the Middle East, it will buy it from Russia. That might perpetuate war in Ukraine.
Like it or not, Russian oil is already leaking into European markets. This, then, will have an impact here, as will the direct effect.
In the Americas, Trump's efforts against Venezuela are bound to become more aggressive.
Whatever the effect on domestic economies, whether mitigated or exaggerated by central bankers (and who knows what they will do), the consequences will be enormous in the UK and many other countries.
On top of all that, Iran has shown that if the US and its allies attack it, it will defend itself, and the myths of supposed security in Dubai, Bahrain, and other countries collapsed in moments as a consequence.
There has, this weekend, been a massive and toxic shock to the world's rules-based order on which we have all been dependent, but for which neither Netanyahu nor Trump has shown any regard, in both cases because of their fear of being exposed as the people they really are, with all the consequences that might flow from that.
So why does this matter this Sunday afternoon, in particular? That is for a glaringly obvious reason: the fallout from this could well be the shock that sends stock markets tumoring in the morning.
If they do fall, or even crash, the response would be entirely logical.
What is more, precisely because of the massive uncertainties surrounding the events that have happened, and the massive range of uncertainties about what might happen yet, to maintain prices at their current levels would be absurd if anyone is to continue to believe that these markets have any relationship to reality. They will either crash then, or it will become ever more apparent that the prices within them are so absurd that anyone with sense should stay clear of them. The outcome is profoundly negative, and the risk of spillover into the real economy is incredibly high, whichever way this is looked at.
And what I think has to be said this time, which makes it different from previous attacks, is that the likelihood that this situation will resolve in days, with all parties walking away with excuses in place, is remote in the extreme. You cannot take out the Iranian president and expect there to be no continuing reaction. To think that might be possible is just naive, in the extreme.
My suggestion in that case is quite straightforward. Watch what happens tomorrow morning with extreme nervousness. This might be the tipping point. Corruption, corrupt Zionism, and deranged world leaders whose appeal is based on fascism might have serious consequences.
More than ever, we need a politics of care and an economics of hope.
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You are absolutely correct that this will not be over in days; it could be months, even years. Russia has been pounding Ukraine from the air for over four years without gaining any territory. Granted they are gaining ground in Donetsk, but very gradually. Iran have a lot of weapons and a huge army to deploy, not to mention satellite groups like Hezbollah, Hamas, Routes and Syrians. They also have sleeper groups all over the place. The result will be years of attrition against the West and their economies.
Iran is a despicable regime and Ayatollah Khamenei was clearly a despicable person. No both sidesism or balance is warranted about that.
However, “Don’t start something if you don’t know how it’s going to finish” has always been sound advice.
“It’s over to you now” seems to be the extent of the US plan, which I say deliberately, not a US/Israel plan, because the IDF couldn’t operate at the level it does without US money and weaponry.
One thing: the Supreme Leader, rather than the president, was killed. As far as I’m aware, the president is still alive.
Sorry…
And thanks
Though the former president Ahmadinejad was killed, which I didn’t realise until after my earlier message.
There are at least 30 people on social media who have more credentials than I to comment on war, foreign policy, Donald Trump, history, law, and forecasting. I have one small contribution. I was raised in a political house in D.C. I believe I read Donald Trump like a dirty book.
The war has indeed got purposes. The intents are to install Israel/USA and Gulf state allies as a military planetary hegemon, by controlling the Strait of Hormuz, thus controlling the shipping of oil and trade; to install another puppet government in Iran; to thereby surround all of inner Asia militarily; to marginalize and trivialize NATO; and to impose a Christo-Judean fascist state on the planet.
Iran is a big prize, with a lot of oil. Our Gulf allies are not nice people – recall the Khashoggi murder – and they have paid off the historically corrupt Trump family with lucrative contracts, an airplane we taxpayers have bought, and god knows what else. There is no goal of Iranian self-determination. Iranian democracy threatens the actual goal: regime replacement favorable to purchasers of U.S. policy. United Arab Emirates investments and Saudi and Qatari gifts bought this war, as did the mission to turn Israel, the US, and their allies into the Asian hegemon.
I really do not think they well get what they want.
I don’t think Trump and his co-conspirators will prevail either. These are not well laid plans, and the best-laid plans gang aft aglae. Our concern is the regional and global disasters being wrought, including stock market disasters, as you point out.
We agree…
Is it not the case that this war on Iran is actually an atteyto distract from all Trumps domestic problems, especially the Epstein scandal in which he is of course involved up to his neck?
I really hope you’re wrong about oil shocks. The main reason has to be the adverse effect on people without the financial means to weather the storm as well as the poor Ukrainians and Palestinians yes and Iranians who surely have suffered enough. There’s also another issue which it seems insensitive to mention against the background of so much potential human anguish. The Politics of Care narrative has not yet spread widely enough for it to vie with the failed and corrupting narrative of the politics of destruction. After yesterdays conference the attendees went away enthused and equipped to contribute to changing the story we as a nation tell ourselves of what sort of society is worth living in and how we can make it happen. But that change will take time. If a potentially disastrous economic event is needed to finally bring the Politics of Care to the forefront of the national consciousness (and I really hope against hope it does not) then the one potentially set in train by a pair of war criminals in recent days is too soon. As things are, the ruinous response will inevitably be more austerity.
Thanks, Greg.
A brilliant exemplar of a thought-through analysis from a well-informed and properly critical commentator, with a prospective remedy for the god-awful situation we are all in. (That`s you, Kier.) Sincere thanks also for all your other hard work.
Thanks, Paul.
Today, President Donald Trump warned Iran that if it continues to retaliate against recent US-Israeli strikes, it would be hit with “a force that has never been seen before”. To date, the use of atomic bombs on Hiroshima and Nagasaki in 1945 remains the greatest single-point application of destructive force in history. What is Trump threatening? Economic meltdown might not be our main concern. With Trump in the White House, nothing is unthinkable.
And because it is one of the unspoken reasons this war is being waged by Trump at this particular time, it must be mentioned here: EPSTEIN
This cynical and criminal enterprise also allows Netanyahu more time to avoid answering the criminal charges that await him when he loses power.
We must not let them get away with this. Say it again and again EPSTEIN EPSTEIN EPSTEIN.
Correct
Netanyahu may or may not escape justice. I don’t read the Israeli people, including relatives, well enough. But as to Donald Trump, let’s look logically at the theory that this or any war is intended to distract from Epstein files revelations of his pedophilia. The idea is that pedophilia is the one thing his MAGA voters won’t stand for. Then, his MAGA voters will demand of the MAGA Congressmen that they impeach the pedophile president.
Do you really think so?
Here is how impeachment works. Article 1 Section 2 of the Constitution provides that the House of Representatives has the sole authority to initiate an impeachment. If an impeachment motion is passed, the Senate then takes up the impeachment as a trial.
So, first the House must pass an impeachment measure, and then the Senate must hold a trial.
To pass an impeachment, 50% + 1 of the House must vote for it. Today, that is 218 votes. Right now, there are 214 Democrats, and 218 Republicans, and 3 vacancies. As a result, Johnson can only lose one Republican on any party-line vote — needing the near-unanimous support of his party to advance legislation.
On what basis would the Speaker of the House of Representatives, Mike Johnson, permit an impeachment petition to come to a vote on the floor of the House?
No matter what is in the Epstein files, Trump won’t be impeached.
Noted
109 likes – thats impressive
Just got back to Blighty from US (we’re expats, 10 years in UK). We went to my son’s US army 10th mountain division graduation. It was an experience. Hard to explain. It wasn’t like a regular uni graduation it was very “everyone cheer for your new soldiers”. I’m not doing it justice but to give an idea. My nephew had a army graduation which they ran onto the field to the music of a “good day to die”. Sorry what?
Thought I had convinced my son not to join up but I can’t say no since he’s 22. He’s is a trump supporter but I haven’t dug into why. I don’t bring that up though I’d really like to. He’s had conversations with IEA people at previous functions at Sussex. Kinda wondering what they might be pushing…
Sorry, a bit rambling but nervous what might be coming his way with this escalation.
I’ve seen this in the making for a while. It’s the same shit that pushed us into Iraq. Defections from real problems. Much more so this time around.
Just a reflection on the states. We were in Columbus, GA at fort Benning. So frustrating seeing how many people had various Trump stickers on the vehicles most exposing how he’s going to “save” the united states. From what?
These are deeply religious areas and very depressed areas. We saw as many churches as we saw signs for injury (work injury’s, accident….) lawyers.
Good luck.
Your worry must be a very real lived, every day experience.
As expected, Starmer has now granted the US access to 2 UK bases. So the UK is now fully implicated in whatever Trump does. Familiar territory, except this time it will be much worse.
Agreed
It is a bit worse than that.
In the eyes of Iran, the Uk and thus by extension British people are implicated & the Iranian gov might well look for retribution against them.
Starmer could have stood to one side, closed UK airspace to the US military & ditto the various airbases. Instead the imbecile has put british people at risk, thus showing his utter and total contempt for the lives of British people. He is certainly unfit to be a PM, an MP, a leader of a UK party and given his actions, I question his patriotism.
Agreed
Together with France and Germany, the UK has called Iran’s response “indiscriminate and disproportionate”. Hard to believe, isn’t it?
Yes.
I think it’s called defence.
I will never defend them Iranian regime, but speaking nonsense about it will not help.
“Special relationship”
“Shoulder to shoulder”
“Long term strategic ally”
“Shared values”
????
It’s even more obviously BS than it was in January 2024
What we have is unprovoked unilateral military aggression against a UN member state, without benefit of UN authority and without evidence of self-defence against any urgent threat of attack on US territory or assets.
So UK PM, Keir Starmer will, along with our allies, be calling,(?as they did with Russia?), for:
– a UN ceasefire resolution
– an agreedstatement frolm
– an escalating regime of sanctions
– freezing of US assets
– personal sanctions on Trump and his cabinet
– flight ban between UK and US airports
– impounding of US military hardware on UK sovereign military bases including grounding of US aircraft and US ships
– impounding of US merchant vessels
– moves in the international courts to prosecute the USA for breaches of international law
(adding these measures to the ones we never took or called for against Israel)
– Trump could be impeached by Congress.
and pigs will fly…
Perhaps our MPs could explain to us, our outrageously selective hypocrisy when it comes to breaches of international law and attacks on schoolchildren?
Just ranting, don’t mind me.
They won’t.
The UK insists that its bases, at Fairford and Diego Garcia, are for defensive strikes to protect regional allies (like the UAE and Israel) from Iranian missile volleys. The bases will be used by B-2 Spirit stealth bombers. The B-2 is an offensive deep-strike platform designed to penetrate advanced air defences. It is designed to carry conventional and nuclear bombs. Has Starmer told Trump that, if the UK bases are to be used, the US military policy that permits first use of nuclear weapons must be set aside? Somehow I doubt it.
[…] I did, of course, anticipate this yesterday afternoon. […]
With regard to the stock market, a lot of the value is predicated on profitability of AI services. However, an energy price spike will push that dream further away.
On the other side, a lot of money flows from oil producing countries into US tech stocks which is fine as long as the oil can keep flowing and the demand remains. But you can see how disrupting this flow could be a strategy that Iran is about to pursue hard, and how that could finally burst the bubble.