The Purim War- Part 8: Trump Capitulates

 As we noted in a prior post, Trump is completely transactional and has no loyalty to his ally Israel. (See: https://shulmaven.blogspot.com/2026/06/the-purim-war-part-7-israel-learns.html ) Little did we realize at the time how craven Trump would be with his capitulation to Iran. Trump has gone from “unconditional surrender” to practically whatever Iran wants. The 14-point Memorandum of Understanding (MOU) leaves open Iran’s nuclear program and enables them to continue their ballistic missile program. Indeed, the MOU calls the termination of the war in Lebanon without mentioning Hezbollah and without Israel being a signatory to the deal. Recall Israel entered the war cheek by jowl with the U.S. in the most coordinated inter-allied cooperation since World War II.

 

Perhaps more troubling is that Iran is now given sanctions relief to sell its oil on the market thereby funding the regime that is now desperate for cash. Although the deal keeps the Strait of Hormuz to be free from tolls for 60 days, it leaves open the very real possibility of tolls going forward. This is in complete contradiction to international law and America’s long held position on freedom of the seas. (See: Shulmaven: The Purim War- Part 5, Deadlock in the Strait of Hormuz* )

 

Put bluntly, in exchange for temporarily opening the Strait of Hormuz, which was wide open prior to the war, Iran has conceded nothing. To be sure, if Iran fails to move forward on eliminating its nuclear capacity, the U.S. reserves the right to resume the war.  Trump has threatened this, but his threat has zero credibility with the midterm elections just around the corner. What we have ended up with is something worse than Sherman-Malley-Obama-Biden deal of 2015.

 

In 1938, just after the Munich summit with Hitler, Winston Churchill called out Neville Chamberlain with the following:

 

   “You were given the choice between war and dishonour. You chose dishonour, and you will have war.”

 

I fear that instead of peace, Trump has set the stage for the next Iran War in the not-too-distant future.

The Purim War- Part 5, Deadlock in the Strait of Hormuz*

With the Iranians continuing to prevent shipping from leaving the Persian Gulf and the American Navy blockading the entrance to the Strait of Hormuz, it looks like fighting will resume after the ceasefire ends on Wednesday. To be sure the U.S. delegation is now enroute to Islamabad to negotiate; it remains to be seen if the Iranians will show up. Further it is not clear whether or not the Iranian team can bind the Revolutionary Guard (IRGC) to accept any terms they agree to. From the outside it looks like there is a division between the political and military factions of the government.

 

As we noted last week it is untenable for the U.S to accept Iranian control of the Persian Gulf and for Iran to maintain its uranium enrichment program. ( See: Shulmaven: "Millions for defense, but not one cent for tribute" ) Thus unless there is a change of heart on the part of the IRGC, a resumption in the fighting seems inevitable. A harbinger of that occurred today with the U.S. seizing an Iranian flagged ship in the Indian Ocean. Indeed, should the fighting resume, it will be taken to a more destructive level than we have seen thus far.

 

Thus, the party goers in Friday’s financial markets are likely to suffer a hangover when trading resumes on Monday.

 

*-See: Shulmaven: The Purim War - Part 4, The Ceasefire Fog*

Purim War- Part 3, The End Game*

The end game in the Iran War has begun. By attacking Israel’s Dimona nuclear facility and the Temple Mount, the home of Islam’s Dome of the Rock holy site, Iran has demonstrated it has become desperate. To add an exclamation point to it, Iran fired off an intermediate range ballistics missile (IRBM) at the Diego Garcia airbase 4,000 kilometers away to prove it had a missile capable of reaching western Europe. Instead of scaring off Europe, it will bring NATO around to giving full support to our efforts to reopen the Persian Gulf to navigation.

 

The existence of the Iranian intermediate range missile represents a proof text of the existence of the imminence of the Iranian threat.  Simply put, Iran’s strategy is now to take down everything around it as the price of its regime collapsing. Make no mistake, Iran is being run by a death cult thereby making it less likely that the Mullahs would seek an offramp.

 

In response President Trump has threatened to destroy Iran’s electricity infrastructure if it fails to reopen the Strait of Hormuz by early tomorrow evening. The first round would likely be done with an electro-magnetic pulse weapon used in Venezuela that would not permanently destroy the facility. That along with the Saudi move to kick out the Iranian embassy indicates that by early next week the entire gulf will be ablaze with tit -for- tat Saudi/Iran attacks on each other. In this environment the Persian Gulf will be closed to all.

 

Needless to say, the oil and stock markets will reflect this turn of events with oil prices moving sharply higher and stocks sharply lower.  

 

·       See: Shulmaven: The Purim War and Shulmaven: The Purim War: Part 2 )