In the dealing room in Singapore, there are a few quiet minutes before the European session begins.
Broker headlines scroll across the screens: escalating tensions in the Middle East, Israel and Hezbollah, uncertainty surrounding Iran’s regime.
Prices have not yet broken.
The VIX is not at panic levels.
Oil has not spiraled into an uncontrollable surge.
Credit spreads remain orderly.
And yet, we are lightening our positions.
Not out of fear.
But because order can only be used while it still exists.
The Problem Is Not “Direction,” but “Distribution”
Markets always move on probabilities.
This time, however, the difficulty lies in estimating those probabilities themselves.
☞A potential regime transition
☞The erosion of religious legitimacy
☞The Revolutionary Guard as a military–economic pillar of governance
☞The Strait of Hormuz as a physical bottleneck
This is not a standard geopolitical event.
Historical data offers little guidance.
What we fear is not whether markets fall.
It is that tail risk cannot be properly defined.
