Paul Krugman writes:

Over the weekend Donald Trump threatened dire vengeance on Iran unless its government opened the Strait of Hormuz within 48 hours, a deadline that would expire Monday evening in Washington. Specifically, he announced that the U.S. would begin bombing power plants — plants that supply electricity to Iran’s civilian population — unless the Strait was cleared.

But at 7:05 AM Monday Trump called the whole thing off — for five days, he said, but many people are assuming that the threatened action, which would have been a massive war crime, is now off the table.

The reason for the about-face, he claimed, was that the U.S. was engaged in productive negotiations with Iranian officials — although this seems to have come as news to the Iranians, who denied that any such negotiations are taking place. Sad to say, in this case, as I tried to explain yesterday, the fanatical, brutal Iranian regime is more credible than the president of the United States. Is he lying or living in a fantasy world? Neither possibility is comforting.

But in any case, Trump’s sudden climb-down was startling. Who could have seen this coming?

The answer is, the person or people who bought large quantities of stock market futures and sold large quantities of oil futures around 15 minutes before Trump’s announcement. [Continue reading…]