"Mad King" Trump, "Crazy War," and "Manic Markets"

April 23rd, the US-Iran war entered its eighth week.

Just a few days ago, there was a brief shift in the situation: the ceasefire between Lebanon and Israel took effect, Iran announced the reopening of the Strait of Hormuz, and negotiations in Islamabad seemed close at hand. But then, Trump announced that the US maritime blockade would not be lifted and ordered inspections of ships sailing to Iran—immediately after that, Iran announced that the strait would be closed again, and it strongly refused a second round of talks.

This kind of flip-flopping is not the first time.

From the outbreak of the war to the present, this conflict can always be summed up with the same word: madness. A “mad king” president who was pulled out of the war room by his staff, fought a war with solutions flipping hour by hour, creating an out-of-control market that even mainstream media can’t make sense of.

And the latest leaked details let us see, for real, where this “madness and loss of control” comes from—and where it may lead the situation.

“Mad King” Trump: That president locked out of the room

On April 22nd, according to the latest leaked inside information from local US media, what happened over this year’s Easter weekend revealed how this war is being managed.

At the time, a US Air Force F-15 was shot down over Iran’s airspace, and two pilots were reported missing. When the news reached the White House, Trump yelled at his staff for hours.

“Europeans didn’t provide any help at all,” he kept saying. At that moment, the average gas price across the United States had risen to $4.09 per gallon, and the images of the 1979 Iran hostage crisis kept flashing through his mind.

“Look at Carter (the 39th US president)… helicopters, hostages—this is what made him lose the election,” Trump complained then, “What a total mess.”

He demanded that the military go rescue them immediately. But the staff judged that his impatience at a time like this would accomplish nothing. So they kept the president outside the decision room, only going out at key points to brief him on progress.

Vice President Vance connected via video from Camp David, and White House Chief of Staff Susie Wiles dialed in from her home in Florida—while the entire team tracked the rescue progress almost minute by minute: the aircraft getting stuck in sand, executing feints against Iranian forces**…** while the president could only wait outside for the phone to ring.

One pilot was found quickly. The second pilot was not rescued until late Saturday night. After 2:00 a.m., Trump finally went to sleep.

Six hours later, on Easter morning, he posted that social media message that shocked the world: “Open the Fuckin’ Strait, you crazy bastards, or you’ll live in hell.” At the end of the post, he attached a line of an Islamic prayer.

This post was not from any national security plan. As senior White House officials revealed, it was Trump’s improvisation. He said he wanted to look “as unstable as possible, as insulting as possible,” because he believed it was “the language that Iranians would understand.”

After posting, he asked the staff: “What’s the reaction?”

From someone collapsing under fear, to playing the part of a crazy strategist—Trump made the switch in 12 hours. The question is: which one is the real him? Or are both?

International relations scholar John Mearsheimer used a single word in a recent interview: mad king.

“A Crazy War”: US-Iran basic trust destroyed

Under the dominance of this highly emotional mood, US diplomatic moves showed serious regression against common sense, directly leading to the breakdown of the talks today.

Iran has repeatedly emphasized that it was the United States’ repeated threats and flip-flopping that caused them to refuse a second round of negotiations.

In his recap, Mearsheimer pointed out sharply that last Friday, there was actually an extremely valuable window for a ceasefire: when Iran responded in good faith by initially opening the strait, the US should have taken the easy win and pushed forward the negotiations in Islamabad.

But the Trump administration tore up that understanding itself at this moment: it not only publicly announced that it would refuse to lift the maritime blockade on Iran, it even ordered the US military to intercept, fire upon, and board Iranian ships.

“The result was that the Iranians made a full 180-degree turn and closed the strait again.”

This tactic—lacking any strategic resolve, and “jumping back and forth” at critical moments—completely drained Washington’s strategic credibility. In the eyes of Iran’s hardliners, the US has become a ‘madman’ with no respect for commitments, and any negotiation is meaningless.

The complete collapse of trust directly pushed the talks toward death.

“Crazy Strategy”: How Israel “sells” war and “controls” Trump

The source of this loss of control lies in Washington’s extremely rare outsourcing of great-power strategy to external lobbying forces.

International relations scholar John Mearsheimer said that, besides a very small number of people such as Defense Secretary Pete Hegseth, most of the US’s senior military and intelligence leadership holds strong doubts about this war, and even opposes it. They clearly anticipated extremely high risks, including Iran’s countermeasures such as shutting down the strait.

But Trump completely ignored the warnings from experts at home. Mearsheimer said bluntly: “It was Israelis who sold him a bill of goods.”

Inside the White House war room, Israel’s Mossad chief David Barnea and Prime Minister Benjamin Netanyahu painted a fantasy for Trump:

The US military’s powerful force would bring a rapid and decisive victory, so there was no need to worry about Iran closing the Strait of Hormuz. Obsessed with Venezuela’s experience of “switching governments in a few hours without bloodshed,” Trump bought in without hesitation.

After the war began, Trump would see images of explosions inside Iran and edits of some “victory videos” every morning. According to staff descriptions, he was “shocked” by the scale of military force and repeatedly praised the performance of the US military.

But the “impressive” aspects on the battlefield did not translate into political victory. When the war truly entered deep waters, strategic loss of control began to show.

On one hand, facing the blockade of the strait that could strangle 20% of the world’s crude oil supply, Trump rejected the military’s suggestion to send ground troops to seize Khark Island (which accounts for 90% of Iran’s oil exports), because he was intensely afraid of causing unacceptable casualties for the US.

On the other hand, Israel even went beyond the United States and directly attacked Iran’s largest South Pars gas field, forcing Trump to urgently distance himself on social media. This situation—strategically constrained, tactically handcuffed—made it inevitable that the war would spiral completely out of control.

“The Mad Hormuz”: An unplanned problem with no plan

When top decision-makers are unpredictable and being pulled by external forces, execution at the bottom level will inevitably fall into chaos. The Strait of Hormuz is the best example.

Before the war, Trump told his team that Iran’s government would likely yield on the strait issue; even if it didn’t, the US military could handle it. But when oil tanker traffic quickly came to a standstill after the bombing started, some White House advisors felt caught off guard.

Later, Trump expressed his belated surprise: “Someone with a drone can shut it down.”

This is the most ironic scene in the whole story: the people who started the war never considered what would happen after the war.

Faced with this predicament at the top—no plans for the throat of the whole situation—Jim Bianco, founder of the market research firm Bianco Research, was even more direct when speaking at Hedgeye’s investment summit on April 23rd:

“My frustration is that they don’t have a plan for the Strait of Hormuz, or they have a plan but it doesn’t work at all. What the market actually cares about right now is the flow of oil. For the issue of nuclear weapons, the market can be patient; but for the flow of oil, the market has no patience.”

In this back-and-forth political game, Brent crude has already broken through $102, fully reversing last week’s drop, and it keeps climbing.

“A Frenzied Market”: The crude oil pricing mechanism has gone dysfunctional”

When political decisions lose their anchor, financial markets will lose their anchor too.

The first thing to collapse is the pricing mechanism for underlying commodities. Jim Bianco revealed an extremely dangerous signal: the pricing function of the global crude oil market has already become dysfunctional.

In normal years, whether it’s Canadian Western Select, Brent, WTI, or spot Oman crude, the price differentials between them usually stay within a very narrow range of $1 to $2—a sign that the global energy supply chain is healthy. But today, amid a persistent war with two-way blockades and “no timetable,” the price differentials among these spot crudes have surged to an astonishing $60.

“If you’re extremely bearish, you can find quotes at $70; if you’re extremely bullish, the market also has spot bids at $130.”

Bianco warned that this extreme dispersion proves that the physical network of the crude oil market has been severed by geopolitics. Brent crude breaking above $102 is just the surface—what’s truly fatal is that the underlying pricing anchor has vanished.

In other words: nobody knows how much oil is really worth. This is not market volatility; it’s market failure.

However, faced with the abyss of the real economy, the US financial market is showing a kind of “doomsday celebration” madness.

US stock markets are still hitting new highs. Money is trading at high frequency as if chasing “meme stocks,” following Trump’s emotional tweets. As soon as the White House releases even the slightest positive signal, the market mindlessly buys.

And even while the war remains tangled, Trump himself still spends a large amount of time bragging to his donors about the “Medal of Honor” he thinks he deserves, as well as researching renovation drawings for the White House ballroom.

But imaginary candlestick charts can’t hide the bleeding underneath. The most brutal verdict came from the University of Michigan’s Consumer Sentiment Index: this authoritative dataset with 74 years of history fell, for the first time ever in March this year, to 47.

The level of desperation the American public has toward the current economy is far beyond that seen during the 2008 subprime crisis, the 911 terrorist attacks, and the Great Inflation period of the 1970s.

This is an extremely torn and completely out-of-control K-shaped macro picture: stock market bulls are clinking glasses at the news feed being manipulated by the White House, while the gas price tag of $4.09 has already pierced the survival line of ordinary people.

Is Trump “managing” the market?

This is the most sensitive—and hardest for people to openly discuss—question among market participants.

At the summit, Keith McCullough said what many people have in their hearts: “Trump seems increasingly accustomed to manipulating market direction whenever he wants it and toward the direction he wants, because people are still too focused on a single factor.”

He further pointed out that the correlation coefficients among the current US dollar, oil prices, gold, and Bitcoin are approaching 95%. “It’s not complicated,” he said. “If you can know in advance which way oil prices and the dollar are heading, you can know which way almost all assets are heading.”

Even more striking is a detail he mentioned: Iran has started publishing meme-style “Lego” expression packs mocking Trump, with the idea that every time he declares the strait is “about to open,” someone is already shorting oil.

“This is already an open secret,” McCullough said, “and it seems like nobody cares, because everyone wants the same thing—stocks go up, and Trump is playing along by pulling it up, so keep going.”

The real risk of this game

In an interview, Mearsheimer said something worth revisiting over and over:

“The Trump administration should want to reach an agreement. There are two reasons: first, they have no way to win along the path of escalation; second, they have the risk of pushing the global economy off a cliff. So they should want an agreement.”

“But sometimes Trump acts like he wants an agreement, and sometimes he acts like he doesn’t want one.”

That is exactly the most dangerous part of the current situation—not anyone’s deliberate desire for destruction, but a system-level loss of control driven by decision-making chaos.

Trump neither dares to truly send ground troops to seize Khark Island, nor does he stop issuing the toughest threats on social media—he even releases contradictory signals when his staff tries to manage the situation.

In this “chicken-egg coward game,” both sides are waiting for the other to blink first. The problem is: when one side’s decision-maker is already in some kind of inherently unpredictable state, nobody can truly calculate where the Nash equilibrium of this game actually lies.

Once the gears of “loss of control” start turning, it is difficult to stop them in the short term.