[This Iran war post yet again launched before complete. Please return at 8:00 AM EDT or reload this page then for the final version]
We’ll presumably know by the end of the upcoming weekend whether Operation Freedom was merely yet another Trump stunt to keep Mr. Market on side and buy more time for a resumption of hostilities, or whether the US really believed a lame show of force would lead Iran to stand down. If the latter, the momentary inaction may mask big internal fights over what to do next. Recall that in simple terms, we have the armed services and other realists pitted against politically powerful and seriously deluded Zionists and hawks.
Recall also that the clock is moving very much against Trump. As Professor Marandi pointed out early on, May is when temperatures start rising to intolerable levels in the Gulf. Those who remember the Iraq War will recall that the massive buildup was seen as proof of a ground operation in March, that if the US did not go live then, it would have to wait until October for another hospitable period, and it would be too costly to keep forces idle in the theater for that long.
The economic clock is also not on Trump’s side, but most the ultimate effects of current actions are going to happen months and even years after the incremental impact of the additional duration of the closure of the Strait of Hormuz. Honestly, most of the investor class needs to be guillotined for its role in playing along with Trump’s antics for its own profit. We said early on that Mr. Market was the one force that could bring Trump quickly to heel. We now have mainstream financial outlets (as we will soon show below) describing how paper oil and stock prices are massively disconnected from fundamentals. Investors are actively enabling and increasing the severity of the coming depression
Nevertheless, as we will also describe, real economy distress is set to become acute by the end of May. The US is less insulated than it seems, since the rest of the world will buy up products where it can, including from the US, to alleviate shortages. That will lower supplies and increase prices in the US. And there are some key categories going into scarcity, like lubricants1 , where the US is no better situated than other counties.
First to an update on the latest Trump retreat. From the horse’s mouth:2
Operation Freedumb became an embarrassing failure on its second day. From Lloyd’s List in Shipping unconvinced by US ‘Project Freedom’ as Hormuz remains closed. The part outside the paywall is more than sufficient:
Commercial traffic remains at a standstill, with no traceable transits on Tuesday and owners still unsure whether the US would intervene if Iran targeted ships
US Defense Secretary Pete Hegseth’s claims of ‘hundreds’ of ships preparing to move and a protective military ‘dome’, is now in place
Operators with vessels trapped inside the Middle East Gulf insist nothing has changed, describing a disconnect between US statements and the on‑the‑ground security reality
So yes, sports fans, Trump for the moment is not engaging in an active operation but is still extending the considerable economic damage of Strait of Hormuz de facto closure by keeping the US blockade on Daniel Davies gave a fine overview on Twitter:
More alarming news from the White House: after not even 48 hours, President Trump has ended the so-called “project freedom” claiming success, where it is embarrassingly obvious there is none.
So far as we are aware, two individual ships left through the SOH and that’s it. Two other ships attempted and were fired on by Iran and prevented from leaving, and last I saw, no other ships exited the SOH today.
By keeping the blockade in place, he guarantees there will be no negotiations w the other side. Pretending that there are negotiations happening with Iran, is starkly refuted by Iranian statements.
This is just more evidence of an administration foundering, desperate for any kind of a solution, but with no northstar as to what they’re even looking for.
We remain in a very dangerous situation, as every day that passes with the strait closed, the economic damage to our country piles on.
But having said that, there is evidence of Trump trying to lay the groundwork for an actual retreat. This video contains extended comments from Marco Rubio starting at 4:20 that look like an Epic Climbdown:
Rubio: What was Iran’s plan? You have tounderstand what their plan was. Their plan was they were going to build this conventional shield where they would have so many thousands of missiles and drones and rockets that they couldn’t be attacked. And behind that conventional shield that they were trying to build, they would then break out and do whatever they wanted with their nuclear program. They no longer have that conventional shield. Okay, we told you guys from the very beginning and and and and we’re very consistent in this messaging. The operation that has concluded was going to destroy their navy. They have no navy left. They don’t not a navy. They have small boats and Boston whalers, but they don’t have a navy left. They don’t have an air force. I challenge you. When is the last time you read or heard about an Iranian jet flying anywhere? They don’t have an air force. Their missile launching capability has been substantially degraded and their industrial base, their defense industrial base has been severely severely damaged. So their ability to build a shield behind which they could hide their nuclear program was wiped out. That’s a very substantial achievement and that was the purpose of this operation from day one.
Reporter: [Muffled] Their nuclear material in order for this war to end.
Rubio: Well, that’s one of the topics that needs to be discussed. I don’t knowabout I think you’re linking it. The the the operation is over. Uh Epic Fury is, the president notified Congress. We’re done with that stage of it.
Okay, we’re now on to this Project of Freedom. As far as a negotiation is concerned, I think the president’s been clear that part of the negotiation process has to be not just the enrichment, but what happens to this material that’s buried deep somewhere that they have still have access to if they ever wanted to dig it out. That has to be addressed and that’s being addressed in the negotiation. I’m not going to go further on what progress has been made on that topic because I don’t want to endanger the negotiations.
While this would seem to be a big step in the right direction, if you listen to the rest of Rubio’s remarks, he bangs on about economic damage to Iran. At 7:12:
Rubio: …they are facing real catastrophic destruction to their economy, generational destruction to their economy, generational destruction to the wealth of their country, imposed on themselves by the by the actions that they’re taking.
So Iran imposed economic sanctions on itself? Seriously?
Recall that Trump has contradicted Rubio before. But Trump may confirm Rubio in deciding to stick with economic sanctions only, based on the bogus assumption that they will inflict unbearable pain on Iran when Iran has already shown it can take tons of pain and continuing the present course indefinitely will inflict severe and even irreversible damage on the US and the rest of the world long before Iran would submit.
Team Trump is building on happy messaging, as attested by the Bloomberg landing page:
From the lead story, which has an anonymous single source effectively confirming an Axios account:
Iran is evaluating a new proposal from the US to end their near 10-week war, according to a person familiar with the matter, as China added its voice to global diplomatic pressure to wrap up the conflict.
Washington’s one-page memorandum of understanding will, if Iran accepts it, lead to the gradual reopening of the Strait of Hormuz and lifting of the American blockade on Iranian ports, according to the person, who asked not to be identified discussing sensitive information. Nothing has yet been agreed upon, the person said, and detailed negotiations on Iran’s nuclear program will come later in the process.
And from Axios in Exclusive: U.S. and Iran closing in on one-page memo to end war, officials say:
The White House believes it’s getting close to an agreement with Iran on a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations, according to two U.S. officials and two other sources briefed on the issue.
The big picture: The U.S. expects Iranian responses on several key points in the next 48 hours. Nothing has been agreed yet, but the sources said this was the closest the parties had been to an agreement since the war began.
Among other provisions, the deal would involve Iran committing to a moratorium on nuclear enrichment, the U.S. agreeing to lift its sanctions and release billions in frozen Iranian funds, and both sides lifting restrictions around transit through the Strait of Hormuz.
Many of the terms laid out in the memo would be contingent on a final agreement being reached, leaving the possibility of renewed war or an extended limbo in which the hot war has stopped but nothing is truly resolved.
I do not see how Iran can accept a one-page napkin doodle from the US. This is unserious unless the US actually does set a timetable for releasing frozen asset. But this is politically untenable from the US end. So this looks like a big market (and China) appeasing headfake.
This also may mean the pause in US weapons deliveries was show for China, to show the US was a tad more serious about peace than it had been before.
And cynics will note that 48 hours allows for the US to still go live with kinetic action over the weekend.
This Aljazeera story went live after I first launched the post. It points out that Iran’s Foreign Minister Abbas Araghchi is now in China. No doubt Team Trump hopes China will muscle Araghchi in person.
A sanity check of sorts. The US needs to make a big climbdown. It is not clear whether this very thin document goes far enough or to use a Wall Street term I alway hated but is apt here, is doable:
As we recently reported, Iran submitted amendments to a 14-point proposal to agree to a framework to end the war. The U.S. has since responded and Iran is in the process of responding to that. Here is how this round of diplomacy began to move: pic.twitter.com/ULXCVSCFdN
— jeremy scahill (@jeremyscahill) May 6, 2026
Not surprisingly, official and officially-connected Iranian accounts have yet to opine, but this seems reasonable:
As what I understand, while the ball largely lies in Iranian court when it comes to US – Iran negotiations, i would not be surprised if there is an incoming Iranian proposal to Washington via Islamabad, soon.
— Anas Mallick (@AnasMallick) May 6, 2026
Keep in mind Israel is predictably demanding more escalation:
⚡️ Israeli Kan Channel: The Israeli message to Trump: Negotiations with Iran are a waste of time, and the current escalation should be exploited to return to fighting. The Israeli army informed the political leadership that without removing enriched uranium, the campaign’s…
— Middle East Observer (@ME_Observer_) May 5, 2026
But it may actually be the case that Trump is at least on his back foot about more escalation. Larry Johnson reports that the mass movement of military men and materiel to the Middle East suddenly stopped. From his latest post:
I honestly do not know what Trump is going to do. I can only tell you what I am being told. A friend of mine who happens to live in the UAE, reached out to me late last night with info he had received from an Emirati official who is plugged into the UAE defense establishment. That official told my friend that the US would attack Iran on 7 May… That is Thursday…
Following Trump’s Truth post, the US Air Force just went strangely quiet over Europe and West Asia. In the last 24 hours, American military aircraft airborne across the region have collapsed — from over 27 yesterday to just 7 right now. All logistics and tankers: C-17 Globemasters, a C-5M Super Galaxy, and KC-135 Stratotankers shuttling between Ramstein, Spangdahlem, Tel Aviv, Abu Dhabi, and Al Udeid. No combat birds. No surge.
I learned from another source — unverified — a possible explanation for Trump’s apparent reversal may have something to do with his upcoming trip to China… Beijing put an implicit ultimatum around the upcoming Trump / Xi trip, threatening to cancel or downgrade the visit if there is any further escalation by the US against Iran.
About the same time that Trump announced he was putting Operation Project Freedom on pause, the IRGC strongly denied that they had fired any missiles or drones at UAE.
It is remotely possible that more evidence of US vulnerability played into the buildup pause:
We now know that at least two Air Force tankers suddenly broadcast an emergency signal over the Gulf this morning.
Shortly after an Airforce Search and Rescue team was deployed and *ALL* 30 other tankers were grounded.
It seems *very* likely that Iran shot down two US tankers. https://t.co/ibmP98EaSz
— Adam Cochran (adamscochran.eth) (@adamscochran) May 5, 2026
On the IRCG’s late denial of any role in the UAE attacks, playing along with Trump climbdown messaging (and related actions) is consistent with “tit for tat,” in that players reward cooperation. Mind you, this does damage Iran’s credibility, since just about no one buys this story. For instance:
The Iranian military has now officially denied it launched missile and drone attacks against the UAE yesterday and today, and warns that any action taken by the UAE against Iranian territory will result in a “crushing” response by Iran. pic.twitter.com/a5h8iH6Og2
— Séamus Malekafzali (@Seamus_Malek) May 5, 2026
To be clear: I don’t buy this, everybody on the Iranian side seems to be denying it but also winking that it’s awesome. But if I was trying to further drive a wedge between Saudi Arabia and the UAE and ratchet up pressure on the GCC’s ineffectual nature, this is what I would do.
— Séamus Malekafzali (@Seamus_Malek) May 5, 2026
Similarly, a serious as opposed to showy (merely big-fire producing) attack on the Fujairah port seems a bit much for a false flag. The US should not want to reduce oil flows or scare Mr. Market.
On the economic front, the number and intensity of alarms on the financial and mainstream media are rising fast.
When an ex-IDF member, lobbyist and known Zionist is having to convey unpleasant truths about the oil market, to investors, you know the situation is serious. And look at the baby talk Hochstein has to use to talk to the reporters.
This segment describes that an average price of gas in the US of $5.00 is coming sooner than many think:
See the undue reporter surprise at idea that a lot of flights from the US to Europe in July and August will likely be cancelled:
This Aljazeera segment is unlikely to get the attention it warrants in the US, but it makes an essential point a7 17:55: “The US economy relies on air travel to function.”
While on the topic of jet fuel shortages:
Global airlines are cancelling flights at an unprecedented pace:
Airlines have cut 2 million seats and 12,000 flights worldwide from their May schedules over the last 2 weeks, reducing the total available seats to 130 million.
This comes as jet fuel costs have DOUBLED since the… pic.twitter.com/r5N8ErWs5Z
— The Kobeissi Letter (@KobeissiLetter) May 5, 2026
Notice the contrast with the tweet we featured yesterday on the countries most exposed to jet fuel shortages. Does that say the profile will change markedly by the end of May?
Top 20 countries at the heart of a jet fuel crisis pic.twitter.com/lJDGyJLTW8
— Lukas Ekwueme (@ekwufinance) April 26, 2026
We have been carrying on for some time about the even bigger looming crisis, that of food shortages and famines. Take the time to listen to the entire segment and circulate it widely:3
Turning to other noteworthy items:
This Janta Ka segment is particularly good. At the top, it shows official US messaging about the Project Freedom climbdown and the Rubio claim that Epic Fury is all over too. It then continues with IRCG presentations on the ineffectiveness of US naval action. The reporter does not call out that the first part, with an exchange between an IRCG operator and a US destroyer, was broadcast earlier, IIRC about a month ago. However, I find the next part intriguing, in that (as much as I do hate AI), it shows how AI is democratizing propaganda. The Iran mock-up of US vessels encountering Iranian threats is very well done and likely persuasive to a lay audience.
Next, the Janta Ka speaker takes apart the latest disgraceful UK messaging about arson at a synagogue. It turns out it was an ex synagogue recently bought by Muslims!
It ends with a new Lego music video, not by Explosive Media but of a similarly high standard.
Let us note Iran is moving forward with regularizing its control over the Strait of Hormuz (the fact of a logo strikes me as cute):
⚡️BREAKING
Iran has launched the Persian Gulf Strait Authority
Ships must contact this authority, fill out the necessary forms, and pay the toll
They will then receive an email and permission to pass through the Strait of Hormuz – Tasnim pic.twitter.com/rUPcmief0w
— Iran Observer (@IranObserver0) May 5, 2026
BREAKING: French vessel attacked and damaged in the Strait of Hormuz.
And a last item:
Evacuations underway.
— Douglas Macgregor (@DougAMacgregor) May 6, 2026
Done for today! See you tomorrow.
____
1 The big cause is serious damage to the Jubail petrochemical facility in Saudi Arabia.
2 More like “horse’s ass”.
:3 I quibble about some small points. Adams understates the loss of global natural gas due not just to the Strait of Hormuz stalemate but more important to the damage to Qatar’s Ras Laffan facility, which he does allude to. It’s ~30%, worse than the loss of oil supply. He also attribute the Covid inflation to “money printing” which is a red flag to anyone MMT literate. The Covid inflation was first and foremost due to a supply shock, and then due to net fiscal spending not directed to increasing productive capacity and well in excess of what was needed to mobilize slack resources.
