The New York Times Gift Article: “The stock market has been trying to ignore the war in Iran. That’s been true over weeks of escalation and de-escalation, cease-fires, a blockade, and a blockade of a blockade (now just a U.S. blockade). Markets have barely flinched, even as crude oil prices swing wildly each day and the world’s supply chains begin to shake. The word to describe what is happening is “shrug.” The problem is not a lack of information. There is too much information, arriving in late-night social media posts and endless push notifications. These days when I see “Breaking News,” it feels like there’s an emphasis on “breaking,” in the sense of “Things are broken.” The stock market has decided this available information is not relevant. That is a problem for all of us. President Trump deeply cares about the stock market, and if the stock market had been selling off, there is a good chance that this war would have been over a while ago. More broadly, the markets are showing the single lesson that the past 40 years have taught them. It will always be saved. Markets are not properly pricing risk, because they really don’t have to. They have assumed that the U.S. government will not allow them to implode, and that assumption is putting the world economy at stake. What’s more, the new rescuer investors are counting on — artificial intelligence — is vulnerable to the exact risks markets are ignoring. This has huge consequences. When Paul Volcker took the reins of the Federal Reserve in 1979, he showed that the central bank was willing to use rates as a blunt instrument. He hiked the federal funds rate above 20 percent to crush inflation, deliberately inducing a recession. It was brutal and effective, with unemployment rising and inflation cratering. His efforts saved the economy by destroying it, while establishing the precedent that the Fed could and would move the economy. Alan Greenspan imparted the same lesson, but in an inverted way. Where Mr. Volcker disciplined markets, Mr. Greenspan rescued them. When the stock market crashed in October 1987, on a day known as Black Monday, Mr. Greenspan flooded the system with liquidity and cut rates…”

See also – Traders placed over $1bn in perfectly timed bets on the Iran war. What is going on? And, the insider trading suspicions looming over Trump’s presidency.