Rabobank: "World War 3? The US Has Crossed A Red Line... But It’s Not The One They Think".
"As such, asymmetry is now for the US too – and they can do it very well too. This is not to debate the constitutionality or legality or morality of Trump’s move, merely the real politik – which is where market should nonetheless focus.
Crucially, economically-feeble and massively out-gunned Iran does not want a real war with the US even more than the US does not want one with Iran. As such Tehran can either respond to Suleimani’s death by escalating with further US deaths, which triggered this crisis, and in which case war looks more realistic; or it can accept Trump has upped the ante to a level where it will have to make only a token response (against US allies?) instead. In doing so it will lose face domestically, where the regime has already just faced an uprising that has seen hundreds shot and the internet closed down (to no real Western opprobrium), and internationally the limits of tweaking the US’s nose will be made clear to *all* globally. As I have written many times: Si vis pacem, para bellum: if you desire peace, prepare for war. That’s what the US just did."