What Has Been Achieved Since The Iranian Conflict Started?
* The rally in equities seems unjustified…
The S&P Index is now more than +7% above the level the day before the start of the Iranian conflict in late February.
The advance doesn’t make sense to me. Iran remains in control of the Strait of Hormuz, no matter what the parties agree to. Iran can easily reimpose a block as soon as the American blockade ends.
The U.S. has spent over $30 billion — eroding our already burgeoning budget — and we have sharply reduced our inventory of critical weapons systems. Arguably our President looks weak with his endless Taco behavior and boasts followed by empty threats.
Our country has alienated our European allies and weakened NATO, who Pres. Trump blasts them with never ending tariffs. He continues to threaten our allies and he is then surprised they refuse to provide aid and support when requested.
Meanwhile, the Gulf allies realize that the American umbrella doesn’t protect them and will likely force them to reconcile in some way with Iran. The market structure is breaking and destabilized with extreme volatility forming the investment background of structural instability (see my earlier post Structural Instability. )
Structural Instability
Anyone who has observed the market’s spectacular intraday volatility over the last four trading sessions should realize that something is amiss. The market is not behaving normally — it seems destabilized.
* Is it simply an overvalued market that is in the process of correcting?
* Is it an overvalued and concentrated market led by large-cap technology that is rotating into new leadership?
* Is it a signal that the AI revolution might face growing fundamental headwinds?
* Is the proliferation of leveraged ETFs and the growing acceptance of the market as a casino (with the ubiquitous presence of 0DTE options) undermining market stability, acting like an infant splashing around in a bathtub (violently moving from side to side)?
* Is it the consequences of the evolution of market structure (the tail wagging the dog), in which passive products and strategies dominate the investment landscape?
* Or, have the machines and algos “gone wild” (in dealing with a potential inflection point or price momentum change)?
To me, its all of the above — some of each.
We are likely entering a slippery slope — great for opportunistic traders, lousy for the buy-and-hold crowd.
Position: None
BY Doug Kass · Jun 10, 2026, 9:45 AM EDT
The investing public has decided the best option available to them is stocks. A change in the bullish behavior (of buying every dip) might require a change in the perception of optimistic economic and profit growth (which I believe is closer than the consensus thinks).
As noted previously, I call on Warren Buffett’s famous “God’s Plan” thoughts and words delivered in November, 1999 near the end of the dot.com boom:
FortuneMagazine.pdf november 1999 interview
Positions: None.
