[We have, continuing with our new Iran war normal, have launched this post when well along but not complete. Please come back at 8:00 AM EDT for a final version or refresh your browsers then]
Even though the Administration has scored a temporary win via messaging that has sufficiently calmed Mr. Market so as to lower oil prices below $100, the fundamental condition of the US and Israel in the Iran war continues to deteriorate. Those of you who watched the financial crisis carefully saw a similar dynamic: the crisis went through three acute phases, spaced about six month apart, before the Lehman collapse. Each time, the authorities pulled together some emergency facilities and did enough of a job of convincing investors that they were on top of things that the panic receded. But as we and quite a few others described at the time, they had not addressed the fundamental decay among subprime borrowers or even gotten on top of where related credit default swap exposure sat, hence conditions would continue to erode.
We sincerely doubt that it will take anywhere near as long as six months for investors to recognize that this situation is not like financial upheaval, where a Greenspan-Bernanke-Yellen-presumed Powell put to bail them out. This is an accelerating real economy crisis, with downsides far more vast and comprehensive than even in the 2008 global crisis. That merely threatened the critical payment system but would have left productive capacity intact. As we have explained previously, the exposure here is not merely an energy price shock, as bad as that is. Nor is the risk even just that of energy shortages. The closure of the Strait of Hormuz also risks food supplies, chemicals, apparel, chips, and other key sectors which depend not simply on affordable but also on petrochemicals as a key production input or the Strait for transit.
Keep in mind that new tipping points are about to start kicking in. Kuwait has said will need to halt oil production in the next few days since it will have filled up its storage by then. We have pointed out repeatedly that not only can oil and gas production not be restarted quickly, but the “back to normal” time increases disproportionately based on how long the facility has been shuttered.
Even though Trump has projected enough confidence to apply balm to rattled markets,1 the content of his statements and his actions confirm that he is seeking an exit when Iran is not going to open one for him. Oil at a mere $90, charitably assuming that the Administration can keep feeding the delusions that go along with that pricing, will produce enough sticker shock at the pump and to other costs so as to fatally sink the already very poor prospects for the Republicans at the midterms. The Hill broke the story yesterday, Trump job approval sinks in new poll, showing a further 3 point fall to a net negative of ten points. The sample period was February 27 to March 3 and so would not capture the impact of energy price increase on voter views.
As we’ll detail below, Trump is trying to declare victory and exit, when the Iranians will have none of that, and neither will the hawks and apocalypse-seekers in his inner circle. His call to Putin on Monday to discuss Iran was an admission that Trump is scrambling for a way out.
If you doubt that Iran retains the upper hand, this video from Richard Medhurst, documenting the damage Iran has inflicted on US bases, should convince you otherwise. At 8:30, he remarks,”The Iranians have been pounding every single one of these bases over and over and over…They have spent the last few days pulverizing and grinding them into dust.”
Note that the Iranian strikes have also forced the US to abandon its embassy in Saudi Arabia.
Mind you, we had thought a way the US could be substantially removed from the region would be if the bases were both damaged and US forces were driven out, so that looting would help do the job. The Gulf States would then be faced with the considerable risk of allowing the Americans to rebuild (Scott Ritter opined on a very good talk with Joe Lauria of ConsortiumNews that the shambolic troop call-up was to secure bases and embassies). Iran seems determined to establish facts on the ground to make that even harder.
Moreover:
Hezbollah just cut straight into the zionist entity’s orbital spine. The SES satellite station in Beit Shemesh, sitting in the middle of Emek HaEla, is one of the oldest and most sensitive teleport hubs in the region, a 1970s-era backbone site built to push and pull international… pic.twitter.com/zORwC6nRwb
— Thomas Keith (@iwasnevrhere_) March 9, 2026
The Hindustan Times gives a fresh update on the punishment Iran continues to visit on Israel. I bothered by the way the headline and opening section personalizes the escalation but you can listen past that:
As DropSite News reported, Iran is both intensifying its efforts and shifting its targeting, since it regards part of its campaign as adequately completed for now:
Iran is considering reducing its strikes in most Arab nations that house U.S. military bases while expanding attacks against Israel, a senior Iranian official told Drop Site. Iran’s political and military leaders believe their ballistic missile and drone operations targeting U.S. bases and infrastructure have largely achieved their intended aim of degrading major radar systems and depleting stockpiles of interceptors, said the official, who requested anonymity because he is not authorized to discuss internal deliberations.
“This is a trend we are likely to observe over the course of the coming week in the ongoing conflict,” the senior Iranian official said. “There has been no change to the overall strategy—this continues the previous defensive approach. In the coming days, it is likely that operations will place greater emphasis on targets associated with Israel, while attacks on U.S. bases in the region may decrease to some extent. However, this reduction may not apply to U.S. bases in two particular countries, where such actions could continue.”
The Iranian official declined to name the countries, but over the past two days, Iran has escalated its attacks in Bahrain, which houses the U.S. Navy’s 5th Fleet and plays a central role in the military onslaught against Iran. Tehran has repeatedly said it will continue to target U.S. military infrastructure in countries whose territory is used in attacks against Iran.
“Their territories were used to initiate attacks. We have the right to defend ourselves and this act cannot be interpreted as aggression against other countries,” said Esmail Baghaei, Iran’s Foreign Ministry spokesman, at a press briefing in Tehran Monday. “I hope those countries have learned the lesson. We urge them not to allow their territories to be used by the U.S. or the Zionist entity to stage attacks against Iran.”
Janta Ka Reporter adds a key detail from the Iranian tactical shift. At 3:05, it quotes the IRGC aerospace commander as stating that from now on, IRGC will launch missiles only with warheads exceeding one ton, and that the frequency, scale and scope of missiles will also increase.
The Hill reports that on top of Trump’s wee Iran not-playing-ball problem, that he also faces a lot of deluded domestic players who want to keep up the fight, including, astonishingly, the Pentagon, which normally acts as a moderating force on war-happy presidents. From Trump, Pentagon give conflicting signals on end to Iran war:
Asked how long the U.S. military “excursion” into Iran will last, Trump says it will end “soon,” but not this week.
The Pentagon, however, was sounding a different tune earlier Monday.
“We have Only Just Begun to Fight,” a Pentagon-run social media account posted Monday alongside a picture of a launched missile with the words “No Mercy” superimposed over it.
“This is just the beginning—we will not be deterred until the mission is over,” an earlier post from the same account read, this time alongside a video of various strikes on what appeared to be Iranian targets. The U.S. military so far has struck more than 5,000 Iranian sites.
Iran’s Foreign Minister Abbas Araghchi said Tuesday that his country was prepared to continue attacks for as long as necessary, and that negotiations with the US were no longer on the agenda.
Foreign Minister Araghch trolled the Trump Administration with his awareness of the power of the energy price whip hand, and that Iran has not only the Strait of Hormuz choke point but also the ability to hit Gulf ports and production facilities:
9 days into Operation Epic Mistake, oil prices have doubled while all commodities are skyrocketing. We know the U.S. is plotting against our oil and nuclear sites in hopes of containing huge inflationary shock. Iran is fully prepared.
And we, too, have many surprises in store. pic.twitter.com/UNQu0fVZE2
— Seyed Abbas Araghchi (@araghchi) March 9, 2026
And since the Trump team seems to have trouble with understanding diplo-speak, it has had to communicate more tersely. Bloomberg is getting the message even if the Administration keeps refusing to. Its big banner headline at 7:30 AM EDT:
Yet there is remotely adequate media challenges to deranged Trump messaging, such as show in the (admittedly captive) CBS headline: Trump says “the war is very complete,” and he’s considering taking over Strait of Hormuz. Daniel Davis showed a longer-form version with a long-form version of Trump’s remarks:
Larry Johnson recaps an important Wall Street Journal report on Trump’s scramble to find an exit ramp and adds important information in Growing Doubts by US and Israel About the War with Iran (emphasis his):
Trump’s advisers have urged him privately to look for an exit plan from the Iran war amid spiking oil prices and concerns that a prolonged conflict could spark political backlash, according to WSJ. Officials close to the president are urging him to start outlining an exit strategy from the conflict while portraying the military campaign as having largely achieved its goals. Discussions in Washington are increasingly focused on declaring success and shifting toward a controlled withdrawal before the economic and political costs rise further.
I think this explains why President Trump called Vladimir Putin. The Kremlin has provided a readout of a recent phone call between U.S. President Donald Trump and Russian President Vladimir Putin that occurred on March 9, 2026 (Monday)….The conversation was initiated by Trump. The primary focus of the call was the US and Israeli war with Iran, with Putin sharing proposals for a “quick political and diplomatic settlement.”….
This does not mean that President Putin is going to pull the rug out from under Iran. I believe that Putin has two goals: 1) Keep the war from spreading, and 2) Secure an agreement that will remove economic sanctions from Iran and guarantee it will not face future attacks from the US and Israel.
Trump and his national security advisors are laboring under the false belief that Iran is running out of missiles.
Some key further details from the Journal story proper: Trump Advisers Urge Him to Find Iran Exit Ramp, Fearing Political Backlash. Note this was a banner headline when the story went live:
Some Trump administration officials said as long as Tehran continued to attack regional countries and Israel still wanted to strike Iranian targets, it was unlikely the U.S. could easily withdraw from the war. Trump, in his Monday remarks, said he was prepared to continue targeting Iran if the country continued blocking the flow of oil through the Strait of Hormuz.
Trump won’t stop fighting until he can claim a satisfactory victory, a senior administration official said, especially when the U.S. has a military advantage. Trump has at times been surprised that Tehran won’t cave despite the unrelenting joint U.S.-Israeli military campaign, according to people familiar with his thinking.
In the meantime, European governments are sweating bullets over their energy fix. From Politico’s morning European newsletter:
EUROPE FACES ENERGY PRICE SHOCK: EU leaders are drilling down on a range of options to lower energy prices that have skyrocketed due to Iranian attacks on oil-exporting Gulf states and ships — including price caps or the release of emergency oil stocks.
Ready to unleash: G7 ministers raised the prospect of using the emergency stocks on Monday, although French Finance Minister Roland Lescure said “we are not there yet.”
Special leaders’ VTC: Energy prices will also be discussed today in a video-conference of EU leaders ahead of a European Council gathering on March 19,..
No emergency powers: The European Commission has so far ruled out the use of emergency powers that would allow EU governments to spend public money to offset the higher energy prices…
Blowback: Leaders are concerned about political consequences. In Hungary, where voters go to the polls early next month, Prime Minister Viktor Orbán has called for Brussels to lift its sanctions on Russian energy exports to offset high prices — a call the EU hasn’t heeded.
A final speculation: I am less worried about Israel resorting to tactical nukes than I was earlier. Even though reports that Netanyahu had decamped to Berlin early in the war were debunked, I see no evidence that he has physical courage, much the less is willing to accelerate his demise. The fact that he has almost certainly enabled his son Yair to hide out disgracefully in Miami rather than serve in the IDF is indirect proof. Even if he were manage to be out of Israel when a tactical nuke was launched (would the minders of the Israeli version of the nuclear football tolerate that), he has to recognize by now that either a full blown nuclear holocaust or at least the conventional-weapon-flattening of Israel by Iran would result. Even if he managed to survive, unhappy surviving Mossad operatives would be sure to be out for his head, on top of pretty much all of the rest of the world. I cannot imagine he would live as long as a year.
Last but not least: if you look at the Janta Ka or Daniel Davis Deep dive segments, which include decent-length clips of Trump’s latest public appearance, even though his vocal timbre sounded pretty normal, he looks absolutely terrible. And his white matter disease seems to be progressing. You can see body twitches at some points in these videos, such as his arm jerking. This is a symptom of end-state dementia too.
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1 Even though Trump said, and one of the Bloomberg banner headlines (which do change often these day) that Trump might undo the oil sanctions on Russia, I don’t take that seriously. First, as the Politico European update shows, EU leaders are not considering that step and they are the ones on the front lines of messing with Russia-oil-carrying tankers. Second, and readers can opine, it does not appear that these sanctions reduced Russian exports much if at all, but instead forced Russia to resort to complex travel arrangements and offer a hefty discount. So I sincerely doubt that any such move would add to global supply meaningfully. But Russia would make a lot more on these energy sales, improving its budgetary condition.
