I haven’t reviewed the tape at all in the last three months, so I think the end of July is a good time to look at how my 2026 predictions are doing and to share some lessons and experiences from the last few months.

Wrong 2026 Predictions

❌ Trump strikes Venezuela but Nicolás Maduro hangs in there

It took only two and a bit days for the first 2026 prediction to crash and burn.

I woke up in my Madrid hotel to absolute mayhem on the timeline after the US did strike Venezuela (✅) but Maduro did not “hang in there.” Truth be told, I was lucky on that one since I had a full book of Maduro to remain the leader of Venezuela in 2025, and the US delayed the operation for a few days into the new year.

There was a lot of reporting about the insiders that made money betting on military action, but I can’t remember anyone actually talking about how much money just missed a payday by betting on Maduro being ousted in the last days of 2025. I was on the other side of that bet and was wondering why the hell the odds are so generous. In retrospect I know!

Half-right on this one, but half-right is still wrong about the most important part.

❌ Christopher Waller or Rick Rieder becomes the new Fed Chair

This one occupied a lot of my mindshare early in the year, mostly because I mistraded my good analysis and got (emotionally) overinvested in Waller. A lot of the analysis aged well, I was just a bit too bullish on Waller and not bullish enough on the safe choice (Warsh). In retrospect, Waller was never close and reporting that his meeting with Trump went well turned out to be false — the opposite was apparently the case. Had I known that, my estimates would’ve looked different.

In terms of execution, I fumbled the bags on Rieder since I didn’t expect him to come quite as close to it as he eventually did. Still, selling 3c shares below 10c was probably too conservative in hindsight.

Turned a profit on this one, but my prediction was wrong.

Correct 2026 Predictions

Ayatollah Khamenei ceases to be the Supreme Leader of the Islamic Republic of Iran

Wow, banger much?

I put that one in there as a filler of sorts, but it overdelivered as a storyline.

We all know what happened to Khamenei, and I’ll have more to say about Iran in the trading recap section. This one hit the mark quite comfortably.

Viktor Orban loses the election in Hungary

I’m quite proud of this one, even if it was rather predictable and no surprise. In terms of analysis and execution one of my finest works this year. Another prediction that hit with room to spare — and I got paid quite well on this.

Elon Musk becomes the world’s first trillionaire

Another filler prediction that was rather unspectacular but hit easily. Elon has lost his trillionaire status for the moment, but his SPCX meme stock launch was always going to make this a safe play in my opinion. Didn’t bet on my beliefs though. Shame.

Spain wins the FIFA World Cup 2026

This one will probably be my magnum opus in 2026, both in terms of ROI and predictive value and odds I hit! They don’t age much better than this:

This was also a massive payday for me, which I’ll talk about below.

2026 Predictions still to be determined

The war in Ukraine continues (but will end in 2027)

This one looks on course, but the more difficult part is the 2027 addendum. I’m not too confident about it (not that I was before), but I think we’ll get a clearer picture in the winter months. My napkin analysis is a bit of a mixed bag here:

What I got right:

• Russia not gaining enough ground in the Donbas✅

• Zelensky’s weakening, or at least more contentious, grip on power✅

What I got wrong:

• An eventful year for Ukraine ❌: I’d say so far it’s been mostly more of the same, the more newsy events have been happening in Russia.

• The end in striking distance❌: the negotiation process is dead again and will probably only be revived by a frontline impulse or Europe getting involved.

I also got shaken down on this quite badly when the Victory Day ceasefire ended up being the first fake ceasefire to count on Polymarket, mostly thanks to the arbiter of truth (Donald Trump) announcing it. Didn’t agree with that one at all, but it is what it is.

The GOP gets clobbered in the Midterms but (barely) keeps the Senate

The jury is obviously still out on this one. So far I’d say it’s looking more or less on course, although I haven’t been following the election stuff much yet. I have some bets on it, mostly on the Democrats to take the House and (so far) a vague directional split control bet. I may or may not look at this in more depth since domestic US politics isn’t really my strong suit. I guess the prediction will hit, but I’m more comfortable betting on the first part of my beliefs.

The SPX outperforms BTC and gold

This looks quite good so far. I’m not sure how well the analysis holds up, but I’d say it’s not that bad. A lot can change over the next five months, but if I had to guess, I’d say it will make this age better, not worse. Have a small nominal bet on it too!

Jannik Sinner wins more Grand Slams than Carlos Alcaraz and ends the year as #1

This one is still favored to hit going into the year’s final Grand Slam. It didn’t take quite the route I expected, with Sinner only winning at Wimbledon and Alcaraz getting injured. I think I’m slightly up on tennis this season so far, but I bet on my beliefs for the US Open and have put some money down on Sinner.

Two wrong predictions, four correct ones, and four that look broadly on course. Not too bad I’d say.

3 lessons from recapping the last 3 months

At the end of 2025, I wrote an article with the 12 lessons I took away from that year:

• Lesson #1: Find your safe space.

• Lesson #2: Good judgement is helpful even if it’s not an edge.

• Lesson #3: You need to get lucky.

• Lesson #4: Enjoy the process.

• Lesson #5: Don’t be greedy.

• Lesson #6: Garbage in yields garbage out.

• Lesson #7: When you’re really confident, then go balls deep.

• Lesson #8: Don’t try to force it, be patient.

• Lesson #9: Double down on what works and eliminate what doesn’t.

• Lesson #10: Don’t get overinfluenced by what others do.

• Lesson #11: If you lose focus that’s fine — it’s about how quick you can recover.

• Lesson #12: Stay humble and you will be rewarded.

I should be reviewing these more often, but I think I can add three more to this list.

Lesson #13: Don’t get emotionally overinvested

I had quite a few trades this year where I was emotionally more so than financially overinvested.

For example, the Fed Chair bet was a fine piece of analysis. But I was “very confident” that Trump likes Waller’s personality more than Warsh’s and that just turned out to be dead wrong. Waller was never as close as I thought he was, and Trump not giving him the time of the day was part of the reason.

In itself, that’s not a problem. In the end, I managed to correct my mistake when the writing was on the wall, and Waller was all but out and for some reason Rieder became the massive favorite. The real problem was that I wanted this one for my ego. Nobody else called Waller as publicly as I did. Had I been less emotionally invested in this, I would’ve made (even) more money with better execution.

The same movie was screened in May, which was an absolutely devastating month mentally and financially:

I took Lesson #7 (When you’re really confident, then go balls deep) to heart and went against my 2025 vol-selling instincts by betting big money on a ‘deal’ between the US and Iran. Q2 was really rough for me — I barely escaped the surprise ceasefire with some last-ditch improvization but also got hammered by the Ukraine ‘ceasefire’ resolution, Powell not retiring from the FOMC board, and some other losses elsewhere.

Somewhere in the middle of all of this, I understood that 2026 does not operate like 2025 and it may be worth trying to buy low sell high. The Iran seemed perfect for this since a deal aligned with my analysis of the war. Long story short, it ended up being a case of ‘not wrong, just early’. I went in quite big, but then through a combination of bad luck and somewhat bad timing, I ended up in a hole at the end of April:

Here’s where my emotional overinvestment took over. Rather than allowing the trade to come to me I disregarded Lesson #8 (Don’t try to force it, be patient). I knew my analysis was correct, it simply had to hit and surely any day now. I’m not wrong, the market is and this is a generational opportunity to bet on peace at low odds.

This emotional overinvestment caused me (and probably not only me but all peace traders) to double and triple down on what ‘had to happen’. I went red six out of seven weeks between the end of April and the beginning of June, including the infamous peace fakeout at the end of May. This was a brutal spell, where I really lost all enthusiasm for prediction markets, forecasting, and anything remotely related to that. It didn’t help that I had quite a few private and family issues going on at the time, but those didn’t impact my trading, just my mood.

In the end, Trump delivered the fake peace deal, and I vowed to never get materially involved in the Middle East again. Which leads me right to my next lesson…

Lesson #14: Control the game from deep

My worst nominal in May was followed by my best nominal month in June:

I almost can’t describe the emotional (and financial) relief I felt after the ‘peace deal’ dropped. It was very taxing to follow all the nonsense and mental illness from this. I wrote about it before:

All I wanted to do in June was watch the World Cup, not follow any news (especially related to the Middle East) and keep politics as far away from my headspace as possible. And it worked!

The World Cup period was not only the financially most successful spell I’ve ever had on , it was also the most fun I’ve had. Even though I expected the World Cup to be kinda shit and didn’t plan on watching all of it, I barely missed a game after being so drained from the weeks before. And man, did it pay off!

I actually started rather small on the World Cup and didn’t plan to up stakes as much as I did. But after an early dip, it just started clicking and I went on an insane run of (mostly) positive variance and some good analysis. I felt like a deep-lying playmaker that was controlling the game and had total vision of the entire pitch ahead of him.

My plan was always that most of the value will be in the early stages and up until the quarter-finals. At that point, most of the pricing will be sharp. By the time the QF came around, I was already very well-positioned. I had a fantastic-looking outright book and felt like I didn’t need to take any crazy risks from that point on.

Unfortunately, I didn’t quite follow my own advice and pressed a bit too much in the QF and SF games. Proverbially speaking, there was no need to press high up the pitch when you have a big lead. Specifically in the France-Spain semifinal, I tried one too many ‘house money’ roll of the dice. As a result of it, I felt like I had to press in the final if an opportunity arises. The game went mostly as I envisioned, so I was right (and lucky) to go on full offense one more time. I ended the World Cup up about 378k on Polymarket, minus some 40k or so on bookies.

But the lesson I took away from it was the calm and control I felt from the combination of good trading and an incredible spell of positive variance. Only when I strayed from the initial plan and disregarded Lesson #5 (Don’t be greedy) did I put myself under pressure. Which brings me to the final lesson…

Lesson #15: Protect your sanity at all costs

Hindsight is 20/20. Would I be as cool, calm, and collected if Argentina had equalized off their only decent attack deep in extra time and won it on pens? Maybe, probably not.

But I did have fun in the six weeks during the World Cup. The same cannot be said of the time before. It coincided with a spell of calmer waters in my private life, so even if I had given away a lot of the profits, I’m confident I would’ve shaken it off after a few days. There’s money to be made during international football tournaments, but by and large, I know I can’t beat sports.

On my main account, I practically didn’t trade all month. There is nothing interesting going on anyway and the stuff that’s happening I have no good read on. Through a combination of positive uPNL, some sports bets I had left on that account, and a few decent smaller trades around Iran and the July Fed meeting, I still had quite a good month:

Most importantly, I feel like I’m in full control of my own headspace again. I refuse to be dragged into more nonsense markets—Middle East, financial, or otherwise—for the sake of protecting my sanity. I used the run of good fortune at the World Cup to take chips off the table into long-term investments or just cash, I haven’t fully decided yet.

After closing in on almost three years of continually being in the prediction markets, I’ve realized that no market and no opportunity is worth my sanity. I’ll rather pass up potential profit if I feel like the opportunity costs—both financially and emotionally—are too high.

The outlook for the rest of 2026

Prediction markets are maturing and they’re ubiquitous now. Luckily, in Europe they’re not as visibly present as in the US. I don’t think I’d enjoy having to explain to people what I do.

Prediction markets, deservedly for the most part, don’t have a good reputation and my enthusiasm has cooled a lot. I’ll still be in the markets and try to bet value where I think I can find some. But I have no longer aspirations to be meaningfully professionally involved in this space. To me, it’s too reminiscent of the early days of crypto, with way too many toxic characters and dubious things going on. I’d rather not attach myself too closely to that. Which means this blog will stay what it’s been so far: a mashup of analysis, dear diary entries, and other content I consider worth sharing and hopefully helpful.

What’s coming in terms of tradeable events?

I’m not sure. The big one are the Midterms. But as I mentioned a few times, I don’t feel like I have a great edge. I have a sizeable bet on the Democrats to win the House since I expect frustration with the administration to be expressed somehow. Other than that, I don’t think I can compete with sharper traders, though I may tail some.

The Fed interest rate decisions are changing under Chair Warsh, much as I expected they would. I think those will be interesting to trade, though I’ll keep the stakes small. There’s the Russian parliamentary ‘election’ in September, which could be worth a deep dive. I have a somewhat outsized bet for now and will decide in August. There’s also an election in Brazil, but I’m skeptical I’ll cover it.

In geopolitics, Iran will stay a topic until 2028 I believe. Trump can’t put the toothpaste back in the tube. But I will be very defensive with taking on new positions here. I don’t really see other theaters making a meaningful headline comeback this year, although Ukraine remains a bit of a wildcard.

The most interesting thing going on is probably the volatility in the markets around the AI trade and the possible fallout from that. But that’s not really prediction market territory, and at this point, I don’t feel qualified to comment on it. So I expect a rather uneventful back half of the year outside of US elections. Famous last words!

If you found this useful, let me know. Good chance we’ll make a trip out East for the next deep dive, but we’ll see what happens. Good luck!

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Writing these previews has cost me 10 subscribers or so, but that’s ok since I long abandoned plans to make this Substack anything else than an occasional diary. This will be the last sports post for a good while, so hang in there.

My semifinals preview was solid on analysis, not so great on predictive value. I took a sizable loss in the first match when I was too bullish on France being able to stage a comeback. The second was a minor loss, mostly on goals.

I’ll do a shorter preview for Saturda’s bronze match, aka ‘the loser’s final’. Scroll down for the preview of Sunday’s final, which I think will be better than many expect. We rarely see this fixture in international football and I think it’s preferable to another Spain-England repeat.

🇫🇷France vs 🏴󠁧󠁢󠁥󠁮󠁧󠁿England

Team impressions:

France thoroughly disappointed in their semi. I wouldn’t call them overrated, but they picked the wrong day to make mistakes and never recovered from going a goal behind. Hard to say how this would’ve gone if Digne hadn’t given away an amateurish pen. Either way, Spain outclassed them in midfield and this was never close once France went behind. Lucky for France, they get a mentally and physically beaten up opponent to say adieu to Deschamps with a win.

England did what England always do: take the lead and bottle it. My entire football timeline relitigated this match and Tuchel’s choices for two days afterwards. My humble short take: England weren’t as good as the press made them out to be in the first half. The match was a dead even foul festival with no chances at all. Argentina came out of the dressing room with more attacking intent, but England scored on the counter. Then they inexplicably dropped far too deep, even before Tuchel tried to do what worked against Mexico. His subs did maybe more damage mentally rather than tactically, given the players’ comments afterwards. But to me this looked mostly like a physical problem: England apparently had nothing left in the tank to defend higher and in a more proactive way. Like Klopp said, it’s easy to blame Tuchel with the benefit of hindsight. Anyway, I wonder whether the good chemistry between Tuchel and the players will survive this implosion.

Team news/Conditions:

I think neither side will be amped about the loser’s final, according to French sources and Tuchel himself. Still, the matchup is a good one for France. We can drop the stats for this one since both teams will probably rotate quite heavily. But France are the better side even with heavy rotation. This possible starting 11 would be a handful even for a fully rested, unrotated England:

France also come in with one more day’s rest and a lighter schedule over the previous seven matches. One player that will be motivated is Mbappé since he still plays for the Golden Boot and has a decent chance of overtaking Messi again.

I didn’t find reliable sources on England’s rotation, but I would still expect Kane to start, not so sure about Bellingham. Almost everyone else could be benched. I expect Rice to be dropped, we’ll see about the rest. England return to the Miami heat and humidity they played in against Norway, so I’d expect the starters that do not get rotated to be less than excited about it after their deflating defeat.

Odds & Bets:

The loser’s final is traditionally loose and one of the highest-scoring games, surprisingly only beaten by the final itself:

Taking 1998 as a totally arbitrary cut-off, we had the following results:

• 2022: Croatia 2–1 Morocco (two surprise semifinalists, even matchup)

• 2018: Belgium 2–0 England (one surprise semifinalist, one deflated tournament favorite)

• 2014: Netherlands 3–0 Brazil (two deflated tournament favorites, one giga-deflated host coming off a historic 1-7 embarassment)

• 2010: Germany 3–2 Uruguay (one in-form team coming off a loss against the tournament favorite, one soft surprise semifinalist)

• 2006: Germany 3–1 Portugal (tournament host vs expectedly beaten semifinal underdog)

• 2002: Turkey 3–2 South Korea (surprise semifinalst vs tournament host)

• 1998: Croatia 2–1 Netherlands (surprise semifinalist vs deflated co-favorite)

The 2026 edition imo most closely resembles 2014, when the Netherlands, who were co-favorites after their 5-1 win over Spain and the 2010 final, beat Brazil, who came off the legendary 1-7 massacre against Germany. Almost all other editions featured either surprise semifinalists or tournament hosts — sides that still had some motivation to play for a win. 2002 was maybe the only one with a truly surprising winner. Belgium were 2.25 favorite to win in 2018. The Netherlands 3.6 underdog, but again, not a surprising result considering the circumstances.

I think neither side will be overly motivated, at least until they’re a good bit into the match. The conditions won’t help. Particularly for England, who I expect to be on heavier legs (depending on the extent of the rotation). There was a good bit more of dirty laundry being aired from the English locker room about Tuchel’s choices in the semi. France at least play their last match under Deschamps, so I’d expect them to be more proactive in this match, more than they would already be anyway.

I don’t like the over for the aforementioned reasons (conditions, motivation). This could be a good bit less open than other loser’s finals, unless we get a quick opener. But I ultimately think France’s quality will prevail. The odds should get a good bit more volatile until kickoff, but I’d make France 1.85 to win it.

🇪🇸Spain vs 🇦🇷Argentina

Team impressions:

Spain were clinical in their precise dismantling of the French offense in the semifinal. The first 20 minutes were very much like those of the other semi: a non-event. But they took their first chance from a foolishly conceded penalty and never looked in trouble afterwards. My only question at this point remains whether Spain can come from a goal down when they really need to find a goal. They still weren’t incisive against France, but they didn’t need to be. I thought France could rally from a goal behind, but that was dead wrong. For what it’s worth, Spain should not even have to answer this question if they continue playing as they have been.

Argentina came through a rather exciting second half by staging yet another Messi-boosted comeback. The first half was mostly a dud with no shots and only fouls. They conceded a goal rather against the run of play, but then Messi quite literally took over and set up several chances even before assisting the two goals for the deserved comeback in regulation. The last 30 minutes or so were among the best Argentina has looked in attack in this tournament, much aided by how deep England defended. It was a bit reminiscent of Tuchel losing 1-2 after a 1-0 lead with Bayern in the Bernabeu in 2024. As much as I dislike the non-stop fawning over Messi, credit where it’s due. He’s been terrific the entire tournament. Without him, I doubt Argentina would even have made the quarterfinal.

When we look at the stats, there is actually not a whole lot between those two teams. Spain creates a bit more, but Argentina converts a lot better, mostly thanks to Messi’s ridiculous 25% conversion rate. Spain is also better at the back, where Argentina underperforms due to their weaker players I’d say. There’s not a whole lot between them when it comes to possession.

• Spain: 1.79 non-penalty xG/match, -0.08 non-penalty goal vs xG/match underperformance, 0.10 xG/shot, 10.08% conversion rate.

• Argentina: 1.72 non-penalty xG/match, 0.86 non-penalty goal vs xG/match overperformance, 0.11 xG/shot, 16.51% conversion rate.

• Spain: 63.9% possession, 89.8% pass completion rate, 83.5% final third passes completed, 4.0 through balls, 9.0 passes per defensive action (= pressing proficiency), 0.31 non-pen xG, -0.16 goals conceded vs xG overperformance, 0.05 xG/shot.

• Argentina: 60.7% possession, 90.5% pass completion rate, 81.8% final third passes completed, 5.71 through balls, 10.7 passes per defensive action, 0.57 non-pen xG, 0.43 goals conceded vs xG underperformance, 0.07 xG/shot.

My armchair analysis says this match will be won or lost on the wings, and specifically, Argentina’s right wing vs Spain’s left wing:

Both teams are rather narrow and get most of their creative play either from their right wing or a through ball in the middle. Spain won the penalty in the semi through a long ball out to the right and scored the second with a brilliant comination and a darting run from their RB. Argentina’s right side is also their stronger wing, with Messi dropping often to the right to make runs inside (but not always as England found out).

I think Argentina will try to do the same in the final: get the ball to Messi, try to draw Ruiz and Laporte out of position and beat them on a run or win a set piece or open up space in the middle for Fernandez or Alvarez. If Spain can effectively restrain Argentina’s right side, there are no real other creative outlets. What’s more, Spain can try to attack down their nominally weaker left wing themselves and open up space for their much more dangerous right side with Yamal and Porro. Messi naturally doesn’t do much defensive work these days and Spain should look to exploit that by winning the ball in the opponent half and creating space for Ruiz to make a run or shoot from distance. I don’t think either will find much success in the middle of the pitch. Both teams are too secure in possession for that.

Team news/Conditions:

Yamal and Porro didn’t train with the team as a precaution but they will start. No absences for Argentina.

Odds & Bets:

Spain are solid and deserved favorites, but I find it hard to make a case that odds should be higher than 60-40 to win it. I’d expect Argentina to run out of good luck and xG overperformance at this stage and Messi to face a defense that can choke off Argentina’s offense. But it’s still a final and as good as Spain are, I don’t quite think they’re 2008-2012 Spain great. Then again, even 2010s Spain won most of their matches 1-0 despite the legendary lineups:

Argentina look a bit like Djokovic making one deep, dramatic run to a slam final to pull off some GOAT feat, only to run into a younger and fitter opponent. They’ve had the much more difficult route to the final and have one day’s rest less — not significant but not nothing. Still, in terms of style there isn’t much between these two sides, so I’d expect both to struggle to find an opener from open play.

I’m a bit torn between whether this will be closer to the 2010 final against the Netherlands (1-0 a.e.t. when Spain were 2.1 favorite) or the 2012 EURO final against Italy (4-0 as 2.15 favorite after taking an early lead). Could we get an upset? Sure. If Argentina take a lead, preferably late rather than early, and Spain’s offense turns out to be as toothless when they’re desperate for a goal as the haters said after their first match. If Spain take the lead, I’d be supremely confident they win it in regulation.

One bet I like is Messi to win the Golden Ball at 1.12 on Rollbit (Polymarket lower now). This should be 1.05 at best. Messi has been the MVP of any side by a country mile and lifted Argentina almost single-handedly into the final. His impact is far greater than Modrić’s in 2018. Even if Rodri scored a brace to win it for Spain, I think Messi would and should get it. I also like Cubarsí to win the young player award. The Polymarket is quite illiquid, but I got some money down around 3. Rollbit has 2.5 on solid liquidity, which I think is decent but not a home-run. Yamal could win the final for Spain and would likely take the award in that case, but he’s been subdued thus far. This is maybe 55% Yamal for me at this point, with the caveat of the most important match to come.

On the match odds—I don’t consider the current odds insane value. Maybe a few ticks — Spain could come in to 2.2-2.25 for my liking. I’ll be riding out the most part of my Spain outright, but if I had to go adventurous, I’d go with Spain-1 at 3.8. If (and that’s unlikely) Spain take an early or first-half lead, this could turn into a repeat of 2012. I don’t think Argentina have the legs for another comeback. Their best bet is a goal in the second half or weathering the possession avalanche to win it on pens. But the most likely result imo is still a one-goal win for Spain.

What’s Next?

That’s the last of my football previews for at least two years until EURO 2028. Hope at least some of you enjoyed. The World Cup is special, no matter how much FIFA shakes it down for money. I didn’t plan on watching almost every damn match, but I don’t regret I did.

The final should be special. A Finalissima between the reigning European and South American champions is a first, and this fixture is rare. I think it will be exciting, even though it probably won’t be anywhere near as spectacular as the 2022 final. Enjoy, we luckily only get them every four years. Vamos!

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Dare I say my leans from the quarterfinals preview were pretty good:

• France to get tested and under was where I was most off. The only test was when they’d score eventually and this should have gone over.

• Spain to win 2-1/3-1 with some bumps along the way was spot on. I ended up selling the both teams to score, which did hit (but was rather lucky to do so).

• England to come through in a slow game was spot on as well. I got shaken out of the under in-play, but it was definitely the right read and bet.

• Argentina win to nil failed (yet again), but I was right about the match being similar to their R32.

Good analysis, my execution was so-so. But all four favorites came through, and that’s what mattered most. Let’s see how these semifinals shape up.

🇫🇷France vs 🇪🇸Spain

Team impressions:

France’s first test ended up being no test at all. They bossed their quarterfinal from start to finish, putting up a stunning 3.69 xG, which is close to 3 xG even without the missed penalty. Morocco did in fact have more of the possession as I suspected they might (52%), but almost none of it was when or where it mattered (8 touches in opposition box). This was as comprehensive a win as they come and on another day France could have scored four or five. I got very lucky here with the under that I managed to progressively offload in the first half, before switching to the handicap and over 1.5 in-play and over 2.5 after the second goal. They didn’t get the third but overall satisfied given I was quite off about Morocco being able to put up a fight.

Spain were rather unimpressive in another late win. They did put up 1.96 xG, but 1.14 xG came off the two goals which were both tap-ins around the 6yd box. Outside of that they created almost nothing, particularly in the second half. They admittedly also conceded almost nothing at the back and this probably should’ve been another clean sheet, but it had to happen eventually. Also very notable that Spain got off the hook here with Tielemans getting injured in the warm-up and Courtois injured in the second half, which eventually ended up losing the game for Belgium.

The difference in attacking prowess between these two is visible to the naked eye: France have three world-class players up front (Mbappé, Dembélé, Olise) and another three international class players for the remaining spot (Doué, Barcola, Cherki). Spain have one world-class player (Yamal) that’s not in best shape and another international class player in Olmo. That’s also visible in the numbers:

• France: 2.13 non-penalty xG/match, 0.37 non-penalty goal vs xG/match overperformance, 0.12 xG/shot, 13.89% conversion rate.

• Spain: 1.95 non-penalty xG/match, -0.12 non-penalty goal vs xG/match underperformance, 0.11 xG/shot, 10% conversion rate.

• Yamal: 0.34 xG/match, -0.11 goals vs xG underperformance, 0.07 xG/shot, 0.22 xA/match.

• Dembélé: 0.3 xG/match, 0.68 goals vs xG overperformance, 0.10 xG/shot, 0.29 xA/match.

Spain weren’t an attacking powerhouse at the Euro 2024 either, but they sure felt like a more threatening team with an in-form Williams as left winger vs the rather pedestrian Baena. In comparison, France have upgraded massively: 2026 Dembélé is better than 2024 Dembélé, Mbappé is maybe thereabouts, Olise is an insane update to Mouani and Kanté is replaced by another class attacking player in Doué or Barcola.

Where Spain do shine is possession football and, so far, defense. Numbers provided per match:

• Spain: 66% possession, 90.4% pass completion rate, 83.9% final third passes completed, 4.5 through balls, 8.8 passes per defensive action (= pressing proficiency), 0.31 non-pen xG, -0.14 goals conceded vs xG overperformance, 0.05 xG/shot.

• France: 58.4% possession, 88.4% pass completion rate, 81.6% final third passes completed, 5.33 through balls, 12.9 passes per defensive action, 0.51 non-pen xG, -0.17 goals conceded vs xG overperformance, 0.08 xG/shot.

Spain play a bit higher up the pitch, less direct, yet press higher and rather concede a foul to get back into defensive shape. France also play possession football but can switch it up to direct counterattacking football and are overall a bit less solid in possession.

I expect Spain to have the majority of the ball and try to impose themselves on the match. France will probably not press as high as they did against Morocco, but I don’t expect them to fall back to their own penalty box either as long as the match is drawn. I do think Spain thus far haven’t really had to play a team that is willing and able to counterattack. Portugal refused (by not starting Leao). Judging by the final five minutes after the goal, they could have done more damage. Belgium wasn’t really able except for a single useful attack that ended up being the goal.

France should be physically superior, even though I think both Spanish full-backs are excellent (and underrated) and will be up to the task. Spain should have the upper hand in midfield as well. I’m less bullish on Oyarzabal seeing any kind of daylight against the best CB pairing in the tournament. I think their best chance of getting a goal is to overload Yamal’s side with Porro, which should also be the less proficient side for France in attack. France on the other hand will probably try to dispossess Spain and hit them with direct attacks through any of their front four. Either way, it should be a fantastic contest.

Team news/Conditions:

No absences on either side and conditions will be no factor in the semifinal. Tchouaméni will be back for France.

Odds & Bets:

I watched the 2024 semi in Munich and remember thinking that France will get them back in the future (I bet France that day). I tend to think that will happen today.

I wouldn’t put too much emphasis on the 2025 Nations League match. France were without their current CB pairing and Spain still fielded an in-form Nico Williams. The 2024 semi is the better benchmark in my opinion. Back then, France took the lead but Spain were clinical in taking their chances and France were the harmless attacking side that had nothing to add in the second half. Neither team had to come from behind thus far at the tournament. But I can’t help but think that France would be much better equipped to come back from a deficit. Spain played the nominally stronger teams the last two rounds. And yet, I can’t help shake the feeling that the circumstances were favorable to them. Yes, they were in full control against Portugal and Belgium for all but maybe a combined 20 minutes. But they also benefited from injuries to oppoenent key players (Nuno Mendes, Tielemans, Courtois) and scored two late winners that were not really coming. France were supposed to get tested against Morocco, but they made it look easy. I don’t think tonight will be easy by any means. But if I had to guess, I’d say France have another gear and can play at a level Spain currently can not.

I’m still overweight on Spain on the outright though, which I’ll be looking to level out at some point before/during the match. I have this at 57:43 France but France at 34-35 on the outright and Spain at 24. There’s a big premium now on France on the outright, which I can understand but still think is wrong. No real value on the match odds, as you’d expect for a semi. I’d back France at 2.7+ prematch but will otherwise just look to get my book in order on the outright. No idea about goals—I’d expect an intense but not necessarily fast-paced match. If I had to take a bet, I’d take the under. But if I had to guess a result, I’d say 2-1 France or France in extra time.

🏴󠁧󠁢󠁥󠁮󠁧󠁿England vs 🇦🇷Argentina

Team impressions:

England came through the match I expected: a slow, tough grind in brutally humid conditions. They (again) didn’t play well or pretty but (again) got the job done. That’s what you hire Thomas Tuchel for. England’s best and one really good spell came in the first 15 minutes of extra time. Other than that, they looked either clueless in possession (first half) or got pushed back and defended (second half, second half of extra time). The team isn’t short on mental strength but outside of Bellingham and Kane, they look very ordinary in terms of quality.

Argentina fared no better against Switzerland. They took the lead from a set piece on their only venture forward in the first half. Instead of controlling possession in the second half to kill the game against a harmless Swiss offense, they went passive again and deservedly conceded the equalizer. Embolo’s silly double yellow let them off the hook, and they managed to deservedly win it before pens. But yet another match where Argentina seemingly wanted to take it easy or, worse, just couldn’t play better before their backs weren’t against the wall.

Both of these teams are kind of one-trick ponies that heavily depend on their star players. That’s not the worst thing in international football, but it doesn’t bode well for whoever goes through to the final.

• England: 1.56 non-penalty xG/match, 0.27 non-penalty goal vs xG/match overperformance, 0.10 xG/shot, 11.96% conversion rate.

• Argentina: 1.74 non-penalty xG/match, 0.93 non-penalty goal vs xG/match overperformance, 0.11 xG/shot, 17.02% conversion rate.

• Kane: 0.56 xG/match, 0.39 goals vs xG overrperformance, 0.16 xG/shot, 0.16 xA/match.

• Bellingham: 0.46 xG/match, 0.59 goals vs xG overperformance, 0.15 xG/shot, 0.17 xA/match.

• Messi: 0.89 xG/match, 0.46 goals vs xG overperformance, 0.16 xG/shot, 0.57 xA/match.

Kane and Bellingham are two thirds of England’s entire offense, Messi is about half of Argentina’s (and these numbers are leaving out pens, which both teams have taken a number of). England do have a threat down their flanks, at least in theory. Saka, Gordon, and Madueke are capable players, but none have shown much except for spells in individual games. Argentina have Alvarez and/or Martinez as goal-scoring threats, but almost all of their creativity from open play comes from Messi dribblings or Messi through balls.

On the defensive end, I think England are the slightly more solid side despite being more direct:

• England: 57.2% possession, 88.8% pass completion rate, 78.3% final third passes completed, 4.33 through balls, 11.4 passes per defensive action (= pressing proficiency), 0.68 non-pen xG, 0.15 goals conceded vs xG underperformance, 0.06 xG/shot.

• Argentina: 60.1% possession, 90.4% pass completion rate, 80.8% final third passes completed, 6.5 through balls, 10.9 passes per defensive action, 0.57 non-pen xG, 0.43 goals conceded vs xG underperformance, 0.07 xG/shot.

I really don’t think there is much between these two. Either of them will be a solid underdog in what I expect to be a more lopsided final than the semifinals. Neither has much of a leg up in terms of travel or accumulated fatigue either. England had to go through one extra humid extra time, fight through 100 minutes in Mexico City, and play the full 90 minutes against DR Congo. Argentina had their own humidity extra time against Cape Verde, their own stoppage time winner against Egypt, and another arid extra time in Kansas City. I’d expect both teams to be at a significant disadvantage in the final, even more so if this match goes 120 minutes as well.

Team news/Conditions:

No heat problems this time and England will have all players available except for the suspended Quansah. Argentina have no absences.

Odds & Bets:

I’m currently overweight on Argentina on the outright, even though I expect England to make the final. England are ever so slight favorite for me here, but I’d put this at 51:49 and not the 55:45 the market is currently offering. I’m not sure where this bullishness on England is suddenly coming from after they’ve been doubted all the way to the semis. Yes, Argentina looked pretty pedestrian again playing a nominally mediocre team, but that doesn’t mean they’ll suck as bad against England. There’s currently still a 4c spread between England and Argentina on the outright market on Polymarket (was even 5c)—I’d expect that to close by kickoff. My fair value is actually slightly positive on Argentina, because I’d rate them a tad higher in the final. Goal line looks fair, this should be a very tight contest that I expect to go to extra time. I might have a stab at the draw here. Best guess is 1-1 after 120 minutes and England win it on penalties (yes, really!).

What’s Next?

Just sit back and enjoy! I don’t think this is the round to force a bet if you have no good read. My intuition is that we’ll get a more obvious play in the final (and maybe in the third play playoff as well). Good luck!

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My plan before the tournament was to keep the active betting to a minimum from the quarterfinals onwards, because I expect the odds to be sharp and value to be more difficult to come by the deeper we go. I’ll be working with a lot of the outright positions that I built and will be looking mostly for hedges this round.

Let’s go!

🇫🇷France vs 🇲🇦Morocco

Team impressions:

France had the expected tough nut to crack in Paraguay in a match played in 35 degree heat. They generated only 0.65 xG from open play (and 0.8 xG from the converted pen). 0.35 of those came in the last minute when Mbappe was denied the second goal. In short, they looked every bit as clueless vs Paraguay as Germany did and you have to wonder how they would’ve looked against Germany (probably better). Now they get a much tougher opponent in similar conditions. This should be their first real test, and I’d be surprised if Morocco didn’t test them properly.

Morocco didn’t look great for a good 50mins or so against Canada. But they were clinical: 3 goals from 9 touches in the opposition box and 0.82 xG. Once they took the lead, they only conceded one more good chance from a free kick. Maybe they were surprised by Canada’s high press (allowed 33 touches in their own box vs 20.2 tournament avg). But Canada were, as expected, not clinical or precise enough (only 64% final third passes completed). If Morocco played like this against France, they’d probably get hammered. I don’t really think they will though.

There are a couple of interesting data points I dug up on Opta Sports:

• Morocco and France both have a tournament-high (tied with ARG) three goals from fast breaks (presumably counters?).

• Both have almost identical average possession per match (60.5% vs 60.4%).

• Morocco have conceded only one fast break but France scored two goals from high turnovers (only Belgium and Brazil had more).

Considering this match will also be played in +30 degree heat, I think both teams will look to maintain possession of the ball. But I wouldn’t be surprised if Morocco end up with almost as much or even more possession at the end. In the SF 2022, France took the lead after five minutes, which meant Morocco ended up with more possession (61%), more touches in the opposition box, and more final third passes than France. Even without an early lead, I wouldn’t be shocked if this is an equal contest. Morocco also dominated the ball vs the Netherlands (70%). While France don’t play as passive as they used to, their midfield isn’t as dominant as, say, Spain’s and they do have the players to go fast and direct. Supposedly Doué starts instead of Barcola, which would mean they go less direct and opt for keeping possession of the ball.

Team news/Conditions:

Tchouaméni is still questionable for France as far as I understand, but I expect he won’t play. Saibari is out for Morocco, which is a huge blow considering he’s their most dangerous player in terms of goals and xG. Rahimi has been a competent replacement off the bench, but let’s see how he does as a starter. The match will be played in Boston in 30 degree heat.

Odds & Bets:

I have built positions in all four favorites but am most underweight on France. My rough idea for this match is to add to my France outright if this is tight or if they go behind. I do like the under here as a directional hedge on Morocco. At the same time, I’ve seen some love for over/both teams to score from and another account I’m following. I see the argument, but we have a good precedent here in terms of weight of the match and conditions: Morocco’s R32 vs Holland. It was also played in hot conditions and the tempo of the game was pretty slow. Looking at other heat matches, France’s R16 was pretty slow as well. Argentina-Cabo Verde was very slow until the equalizer and even then didn’t become end to end in regular time. Portugal-Colombia had good tempo but went under because of poor finishing. Morocco-Brazil had good tempo in the first half, slowed down after that.

That’s why I like the under, which imo should be 1.75-1.8 rather than the 1.9+ I backed. I’m sympathetic to the BTTS argument and will take some Morocco to score to aim for the 1-1 middle but will stay overweight on under. I think France will be tested for real for the first time here, unlike in the previous one where Paraguay just played for a 0-0 and never threatened on the counter. I could see this going extra time and also bet some draw at half-time. France to come through, but not without breaking a sweat.

🇪🇸Spain vs 🇧🇪Belgium

Team impressions:

I continue to think that Spain are the most underrated team from a betting standpoint (which is why they’re my biggest outright position for now):

• They have racked up five clean sheets.

• They have the lowest xG conceded in the tournament (1.49 and 0.3 per match vs Argentina’s 0.6 per match).

• They concede one shot on target per match.

• Their non-penalty attacking output isn’t meaningfully worse than that of the other favorites: 2nd in shots on target and xG per match, more goals per match than England, most touches in the box per match, most final third passes per match at the highest completion rate (83.7%). What they’re missing is a finisher of Kane’s/Mbappé’s quality.

That was visible against Portugal, where I thought Spain controlled the match for all but 15 minutes just around half-time. De la Fuente made changes late, but not too late, to introduce some more directness and it paid off. I’d be surprised if there are changes in the starting lineup against Belgium, but I do hope that in-game management is more responsive if they’re not up after 60 minutes. Spain are a bit boring and I think a slightly worse team than 2024 but still tied-best for me in the tournament. France have the star power in attack, but the Spanish midfield is better and I think they defend better as a unit even if individually the French defense is better.

Belgium surprised with a clear and easy win against the US. Or maybe it wasn’t much of a surprise after Trump made the US team the main character and the Trump curse duly struck. I remain unconvinced by Belgium though. Their attack is prolific (as good as Spain’s stats-wise), but I’d rate their defense roughly on par with Portugal’s or worse. They haven’t played serious opposition yet and even with the changes to the starting lineup, I think that will show. They’ll also miss a rather important holding midfielder in Onana, which won’t help.

Team news/Conditions:

No absences for Spain, Onana out for Belgium. Match is played in climate-controlled conditions.

Odds & Bets:

Spain are the clearest favorite in this round for me, which doesn’t necessarily mean it will be easy. I think Belgium will put up some meaningful resistance after getting their confidence up last match. If De Bruyne starts again, Belgium should set up in a more attacking formation, which should bode well for goals. I like the over here since I expect Belgium to score but could also see Spain cover it alone. Both teams to score at 1.9 looks decent as well, which I’m bidding too. Imo Belgium’s best shot is to make this a bit chaotic and force Spain out of their comfort zone of possession football. Spain haven’t really played a good counterattacking team yet and if they don’t cope well with Belgium (let alone go out), they will have problems in the semifinal as well. I think Spain win this 2-1/3-1 but not without some bumps along the way.

🇳🇴Norway vs 🏴󠁧󠁢󠁥󠁮󠁧󠁿England

Team impressions:

Norway shocked everyone but those who bet on them (me) with their upset vs Brazil. That was quite a strange match. Brazil had several pristine chances to take the lead: the missed pen in the first half, the as-good-as-a-pen chance by Endrick and a couple other half-dangerous situations where Ryerson was outplayed by Vini. But the 2.61 xG conceded is a bit misleading still: 1.6 xG were pens (one came in garbage time) and the Endrick chance was 0.57 xG. So outside of that, Brazil created little and they played like it too: 66% possession for Norway, close to double the amount of passes in the final third (but 15-33 touches in the box). This wasn’t going over and both to score until Norway figured out to serve it directly to Haaland. That’s also the most concerning part about Norway: their defense just isn’t good enough. They’ve played elite opposition, but they’re leaking 1.6 xG and 4.2 shots on target per match (England: 0.68 xG and 2.8 SOT). Their pressing is good but not as good as England’s. Same for their possession game. They’re just not incisive enough and, as good as Haaland is, this can’t work for much longer.

England came through an epic match in the Azteca. They weren’t really better for most or any of it, but they were clinical (6-20 shots, 5-5 on target) and managed to complete the job: win ugly. I think England’s shortcomings weren’t really laid to rest there and they probably won’t be before a potential semi vs Argentina. This is a good team with one exceptional player (Kane) and a second if he turns up (Bellingham, turned up in the Azteca). Up front they don’t have much on Norway, but their defense is more solid. They gave up almost nothing from open play vs Mexico, even when down to 10 men. I can see them enjoy some success down the flanks, where Norway looked the most vulnerable. Gordon is no Vini, but I thought he was good against Mexico. I doubt the pace of play will be as high as in Mexico City though.

Team news/Conditions:

Norway should have all players available despite some illness rumors. England will miss Quansah (sent off) at RB but might get Reece James back as their original first choice. If not, I’d imagine Stones or Spence will fill in. Match is played in Miami in hot conditions, as were Argentina-Cape Verde and Portugal-Colombia.

Odds & Bets:

I’m set here with a significant position on England on the outright and to reach the final and some hedges on Norway to reach the semifinal that I took before the R16. Heavily overweight England, but if they go out it wouldn’t be a total disaster. The money line looks quite fair to me, but I’m bidding some under at 2.25+ for what I expect to be a fairly low-tempo match. England-Mexico was quite slow and England really scored a brace out of the blue to really open it up. Norway-Brazil was also not all that eventful outside of the missed pen in the first half. Considering how slow the Argentina R32 in Miami was, I would not necessarily expect this to be frantic. I wouldn’t go overboard with the under given that both teams are better in attack than in defense. But given the conditions, I’d put the under here at 2.05-2.1.

🇦🇷Argentina vs🇨🇭Switzerland

Team impressions:

Argentina got oh so lucky against Egypt in what really wasn’t that scandalous a match. How fair of Argentina to concede another goal after the maybe-a-bit-controversial 0-2 was disallowed by the VAR. Regardless, it was the second time Argentina were made to work hard by a rather mediocre team, but the market remains undeterred and they’re for some reason still second favorite (reason is probably the easy draw). Their numbers are pretty good—better than England’s in both attack (pen and non-pen xG and set pieces) and defense. They’ve scored more than expected but also conceded more than expected. Realistically, the last two matches should’ve ended 1-0 and maybe 1-0 or 2-1 given their output and style of play. But all that is against the caveat of pretty weak opposition and now they’re getting yet another rather average opponent.

Switzerland did well to come through the most boring tie of the round, even without their (imo) best player in Manzambi. Colombia were just much too passive and left themselves with too few chances given their terrible finishing. This is just a solid team with solid numbers, both in defense and attack. They play a slow methodical game and might not have enough spark but probably enough grit to make it difficult for Argentina.

Team news/Conditions:

No absences for Argentina, Manzambi, Aebischer, Jazquez are out for Switzerland. Conditions are not an issue this time, match is played in evening heat in Kansas City.

Odds & Bets:

This should look quite similar to Argentina’s match against Cape Verde and the 2014 1-0 extra time win. Outside of Messi, I remain unconvinced by Argentina. Do they take it easy and concede because they’re not focused enough or are they just not that good or was it just bad luck to go behind from a set piece against Egypt? I can’t really tell. I have an outright position on Argentina but if England come through, I wouldn’t mind an upset either. That said, I took just a bit of the Argentina win to nil at 2.68 with the same reasoning as in the previous round: Switzerland will probably mostly look to kill the game before it even starts, Argentina won’t make this end to end if it needn’t be. Another 1-0, extra time type of matchup.

What’s Next?

Wishing everyone good luck and let’s hope we get the final 4 we’re all waiting for!

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It’s been a terrific World Cup in terms of drama and quality. The new R32 produced several stoppage time winners (Brazil, Belgium, Portugal, Canada), two major penalty shootout dramas (Morocco, Paraguay), a couple of top class performances (France, Spain), and the most enthralling underdog fight I can remember (Cabo fucking Verde). I think the next World Cup will take the logical step to dilute further down to 64 teams to fix the group stage format.

Other than that, I hope this World Cup keeps on giving!

🇨🇦Canada vs 🇲🇦Morocco

Team impressions:

Canada almost had to go to extra time in their R32 against a stubborn but harmless South Africa. They solidified the impression I have: solid team that feeds on energy, enthusiasm, and forced errors by the opponent. They wasted a bunch of chances but got the stoppage time winner off a shot from distance, similar to their equalizer against Bosnia. I felt like Canada played more direct and with a bit more vigor in their home games in the group compared to the R32. It always felt to me as if the goal had to come off an error or from a set piece. But take nothing away from Canada. Their xG differential is one of the highest in the draw (8.87-2.44), albeit against poor opposition and a (mostly) dead rubber vs Switzerland. Outside of that match, I had to go quite far back to find an opponent on Morocco’s level: two friendlies in 2025 (0-0 vs CIV and 0-2 vs MEX). As good as Canada have been, they don’t play this kind of opposition much. Even against the teams I watched them, their finishing is wasteful and their passing isn’t clean (62% completion rate in the final third vs South Africa).

I was very impressed by Morocco and how they managed to overcome the Netherlands from a goal down. The xG in the match (1.38-0.24) tells the story well: Morocco were the team in control and created most chances, the Dutch scored pretty much out of nowhere. It took a stoppage time equalizer, but Morocco were well in control for the entire second half and all of extra time. My only grievance would be that they did not push for the winner enough. Verbruggen saved a clear cut Saibari chance at the start of it, then Morocco seemed content to play down the clock to take it to pens. That could’ve backfired, but it didn’t and they got the deserved win. Morocco play a fascinating combination of physical yet high-quality possession football (89.2% pass completion rate compared to Spain’s 90.9%). Their xG isn’t nominally as good as Canada’s (7.51-3.24), but when you factor in that Morocco played two top 10 sides in Brazil and Holland, it very much is. This is a cohesive side with a strong mentality that in my opinion can beat literally any team in the field.

Team news/Conditions:

Davies came off the bench vs South Africa and might start here. No absences for Morocco, but they may make some changes after 120 minutes in 30 degree heat in Guadalajara altitude. Played in a climate-controlled environment in Houston.

Odds & Bets:

Morocco beat Canada 2-1 in the 2022 World Cup group stage and that’s sort of the result I expect again. I maintain that this Morocco side is one of the most well-put together and dangerous ones in the tournament. If they progress, they will be the first real test for the French dream team offense. Canada don’t play this kind of opposition much and looked outmatched in the first half vs Switzerland against a comparable opponent. Granted, they could have easily drawn that match, but the facts remain that Canada played three of the weakest sides in the tournament to get here (Bosnia, Qatar, South Africa). I think they will put up a fight, but Morocco will ultimately have too much. Fair odds for me are about 1.75 Morocco. I’m also betting over 2.5 bookings at 1.7. Canada have picked up 7 bookings in 4 matches, Morocco two. Only England have fouled more than these two sides, and judging by how Morocco approached the match vs Holland, there should be plenty of openings for tactical fouls.

🇵🇾Paraguay vs 🇫🇷France

Team impressions:

Paraguay pulled off one of the biggest knockout upsets in recent memories by eliminating a piss poor Germany, on pens nonetheless! Sure, Germany got a bit unlucky with the soft foul on the Paraguay keeper being VAR’d off. But if you can barely muster one goal from a hopeful cross in 120 minutes against Paraguay, more went wrong that one questionable ref call. Paraguay did what was within their power: they came forward twice and scored once, then parked the bus and relied on Germany being so unimaginative that this goal carries them to pens, which, historical record or not, is always pretty 5050. But this is still the same Paraguay side that’s on 3 goals from 1.46 xG (conceded 5 from 5.71 xG). A force they are not, and I don’t think this plan will work twice.

France were nothing short of magnifique vs Sweden, but I expected as much in this favorable matchup. After some solid 20 minutes, the wheels came off the Swedish midfield and defense after the first corruption break. Olise was phenomenal and the real MVP, even though Mbappe got a brace. France are a truly frightening side in almost all parts of the team. Their +3.8 xG overperformance in attack is some variance but also a good part just player quality. I think they have some small weaknesses in midfield and in the full-back positions, but this will not be the match that will probe those weaknesses.

Team news/Conditions:

Alderete remains out for Paraguay, France have no absences. The match will be played in excessive 35 degree heat.

Odds & Bets:

Paraguay upsetting France here would probably be the biggest upset in World Cup history. That’s probably not going to happen since Paraguay are the worst side left in the tournament. That said, given the match will be played in adverse conditions and Paraguay’s park-the-bus approach, I think this will be much more of a grind for France. Sweden was a favorable matchup for them. Paraguay isn’t really unfavorable, but they will probably defend deep and hope for another slow French start like in the first half against Senegal or the first 20 minutes against Sweden. Even keeping it to 0-1 can be a success for Paraguay if they can enter the final 10 minutes+stoppage time being just a goal down. Under those conditions, the handicap doesn’t appeal much, even though I think France cover again. I like the clean sheet at 1.67 more. I’m also bidding some handicap at 1.8 and bet some under 3.5 at 1.57. I don’t think France will overexert themselves here and once they are two goals ahead, they’ll look to shut this down by keeping possession.

🇧🇷Brazil vs 🇳🇴Norway

Team impressions:

Brazil did well to get past a spirited challenge from Japan. I felt like Japan did well to put up a challenge, but always expected them to fall short and that’s what happened. In all fairness, they scored from their only real chance off a turnover in midfield and a long-range effort. Brazil dominated the second half start to finish and deserved to win in 90. To me, they still haven’t answered the question if this team is actually good or if the opposition has been poor. I still think they haven’t really been tested defensively outside of the first half against Morocco. In attack, they create mostly through Vini Jr, but he’s also been the stastically most dangerous player in the tournament, so against smaller sides that can keep working.

Norway faced the expected tough test against CIV and came through, even though both goals came somewhat against the run of play. I didn’t expect them to just sail through, but they were definitely a bit lucky to avoid extra time. The story remains the same: King Erling carries most of the attack, while the defensive plan is to concede one goal fewer than is scored. I’d be shocked if Norway manage to keep a clean sheet for the first time against Brazil out of all sides, but I’d be almost just as surprised if they didn’t score.

Team news/Conditions:

Raphinha’s tournament is over, as is Paqueta’s, who came off against Japan. I personally don’t think they will miss him a ton since I don’t rate Paqueta. But he’s on one assist from 0.90 xA and 0.37 xG and tied with Bruno Guimaraes for creating chances for Brazil. He was subbed off for Endrick against Japan, but Endrick was kind of useless and Ancelotti doesn’t seem to like him so TBD who replaces Paqueta. As I said, imo a notable but not crucial absence (missing Raphinha is imo worse). For Norway, Ryerson remains doubtful, a significant absence. This will be another match played in 30+ degree heat, which I think is Brazil’s second after playing Scotland in Miami.

Odds & Bets:

I bet the goals early in this one at 2.04 for over and 1.84 for both teams to score. Both have dropped a good 15-20 ticks since and I’ll just sit on these. I also bought a lot of Norway to reach the QF before their last match. I think Brazil are deserved favorites, but this is closer than the odds indicate. I make this about a 60-40 matchup and expect Norway to give Brazil at the very least a good run for their money. Brazil haven’t faced an attack like Norway’s and nowhere near a striker as prolific as Haaland. Even in the absence of Raphinha and Paqueta, I expect goals on both ends and a fairly open match. I could also see either team make mistakes in the second half as legs get heavier. This match will tell us a lot about Brazil, because if they progress, they should be solid favorite against the winner of the Mexico-England tie. Funny enough, Norway has won the only h2h between those two at the 1998 World Cup. Real ones know:

🇲🇽Mexico vs 🏴󠁧󠁢󠁥󠁮󠁧󠁿England

Team impressions:

I didn’t watch Mexico play Ecuador. Based on the 10mins of highlights, they looked in control from start to finish and played a good first half and controlled proceedings in the second half. That’s now 8-0 goals from 4.78-2.26 xG. Quality or variance? I think it’s more of the latter than the former, but we’ll know after this tie. Either way, Mexico haven’t faced high-quality opposition yet and nowhere near as good a team as England. Their attack imo is pedestrian: they played fewer passes in the final third than Korea and their completion rate is on par with New Zealand. The two goals against Ecuador came from Ecuador being caught playing a high line and a turnover in the opponent’s half. I don’t think England will do them the favor to do either of these. They’re a bottom third team in terms of xG from set pieces (0.63 xG). As you can probably tell, I think Mexico are solid but not more. I’m not sure that and the home advantage will be enough.

England had to labor yet again, barely beating DR Congo in 90 minutes. Their best spells came after the respective corruption breaks, where they played more direct and threatened by crossing it into the box. It wasn’t the finest work from England, but they also could’ve equalized a lot earlier had it not been for the DRC keeper and some bad luck. In a way, going behind was the best thing that could have happened to them. Too often, England are content to kick the ball around and wait for an error or a set piece like they did against Croatia. They have the players to play with more urgency but don’t do that. They’re still one of the better attacking sides in the tournament, on par with Spain in terms of attacking threat. They also have a distinct set piece advantage over Mexico, which could be crucial in this tie. Overall, I see the England win as the type of game you have to win if you go deep. Germany had to beat Algeria 2-1 in extra time in 2014. Argentina got dragged to pens in 2022 against the Netherlands from 2-0 up. These matches happen, but the clock is reset every time. I believe England will be ready for this matchup.

Team news/Conditions:

No absences for Mexico. England will miss James and Quansah remains a doubt at RB. Spence played against DRC but didn’t look great (also wasn’t helped by Madueke). This could be a key duel against Quiñones, Mexico’s biggest threat. I wouldn’t be surprised if Tuchel fields the defensively more solid Saka to help Spence with defensive duties. Match is played in Mexico City at altitude.

Odds & Bets:

Portugal vs Spain is the biggest tie in terms of quality, but this one seems to take it in terms of attention. Reading analysis of Mexico’s home advantage playing at altitude makes it sound like England will travel to outer space to play for a spot in the QF. Mexico’s advantage is real and significant, Tuchel has said as much. But I don’t see it as insurmountable by any means and remain convinced this Mexico team has overperformed and is due for some mean reversion. For one, Mexico’s fabled home record of losing twice in several decades in the Azteca in competitive matches was mostly tacked up vs CONCACAF sides that are about as good as Montenegro and Bulgaria. I think England have a significant advantage with Tuchel as one of the best managers in the game for such an elimination match. I would probably rate him a top 3 manager for such a match and have zero doubts England will be prepared in the best possible manner. Tactically, I expect this to be a slow match, where England keep possession and try to capitalize on an error or a set piece. Mexico will play their usual waiting game and hope they can score from a direct ball similar to how DRC did. I don’t think England would mind going to pens, even though it would definitely hurt their chances for the tournament a lot. I’d make this 1.9 England in 90mins on neutral ground and 2.25 England away. 2.5 is too high for my liking. For comparison, Mexico played Portugal in CdM in a friendly in March and drew 0-0 (0.27-1.24 xG) Predicted score: 1-0 England.

🇵🇹Portugal vs 🇪🇸Spain

Team impressions:

Portugal barely escaped in a dramatic finish against Croatia. The first half was probably their best of the tournament, where they wasted a couple of massive chances and should’ve taken the lead. The second was one of the worst and Croatia absolutely should have taken it to extra time on chances alone, even ignoring the VAR call at the end. Portugal were lucky to be gifted the (correct) pen and then scored the winner more or less out of nowhere. I thought they looked quite good in the first half and more direct with Leao on the right side. After the equalizer, the midfield was totally imbalanced and Croatia pretty much walked through it several times. I though Martinez got really lucky with his subs, even though there is absolutely a case to start Ramos over Ronaldo (won’t happen). Their defense isn’t top tier, particularly in terms of set pieces (1.04 xG conceded vs 0.24 for Spain). Croatia also created 1.34 xG and that’s not factoring in the one (or two?) goals disallowed for offside. Their finishing is good but not clinical enough. This feels like a team that can definitely cause one or several upsets, but I doubt they can win four more elimination matches.

Spain were a bit underrated before their R32. I wonder whether we actually have meaningful new information. They crushed Austria 3-0 (2.8-0.32 xG), but I never expected much different. My main problem with Spain (and they were very good!) is that Yamal is their main threat. Against Austria, they did a great job diversifying their threats (2 assists Cucurella, 1 Baena). When they suck, it’s because everything runs through Yamal and the opponent successfully shuts him down. I’d expect Portugal to be rather prepared for this since Nuno Mendes also shut down Michael Olise in the CL semi-final. How well Spain counter that could decide this tie because they have enough talent to do that.

Team news/Conditions:

No new absences, Spain still without Nico Williams and Pino. Played in climate-controlled conditions.

Odds & Bets:

This is a tricky one. Spain are favorites, but I don’t know whether they’re this much of a favorite. Their opposition has been pretty soft so far, while Portugal has already chewed on three tough nuts (DRC, Colombia, Croatia). This feels closer than the odds make it out to be, but I also concede that Spain are the better team. These two met in the Nations League final that Spain lost on penalties (2-2 AET). Their last full-time loss was in March 2024 (0-1 vs Colombia), their last non-penalty loss in a competitive match was in March 2023 (0-2 in Scotland). In the same timespan Portugal lost to Ireland, Denmark, Georgia, France on pens, Slovenia, and Croatia. I have both teams on the outright and would probably prefer Spain to win, but I’m wary. I’d be interested in both teams to score at 2.0+ but will stay away at current prices. Spain should be about 2.15 for me but I can’t quite pull the trigger on Portugal. Will leave this for in-play.

🇺🇸USA vs 🇧🇪Belgium

Team impressions:

I didn’t watch the R32 against Bosnia, but the stats don’t read too impressive. I maintain that this US team is vastly overrated and that may or may not become evident against Belgium. 10 goals from 5.51 xG is the biggest overperformance of any team remaining, even above France. This is a solid team and playing against mediocre opposition they may advance one more round, but that’s as far as they will go.

Belgium were incredibly lucky to escape against Senegal. They got outplayed from start to minute 85, where Senegal first conceded out of nowhere and then conceded another one from an amateurish goalkeeper mistake. To top it off, Belgium got a somewhat dubious pen in stoppage time of extra time to win it. They showed absolutely nothing for 85 minutes and I highly doubt they’d still be in the competition without the keeper’s mistake. The 1.74-3.58 xG (including one pen for Belgium) is an accurate description of how one-sided this match was. They’re on 7.74-5.52 non-penalty xG, which isn’t too great, considering they played only one semi-decent team in Senegal (and got totally outplayed). Doku is out of shape, Lukaku too, the only player making everything happen is Trossard, who’s top in expected assists in the tournament.

Team news/Conditions:

The US will miss their most impactful player in Balogun, who got sent off against Bosnia. Pepi will start but will not be able to adequately replace Balogun. No absences for Belgium. Match is played in Seattle, conditions are no factor.

Odds & Bets:

I have a small bet on the US to make the QF from before their R32. I also started betting x2 here since I feel that Belgium, bad as they may be, should be slight favorite against the US without their most valuable player. I’m not expecting a high-quality affair here by any means and either team will be a heavy underdog in the QF. Still, Belgium should be about 2.45 for me considering their individual quality and experience. On second look, I also like the under here, because I don’t think the US team will look to get into a high-scoring game without their main threat. Still haven’t decided whether I’ll actually bother watching it live though.

🇦🇷Argentina vs 🇪🇬Egypt

Team impressions:

Argentina were seriously on the ropes against Cape Verde, in what was the most spirited and captivating underdog performance I can remember. They tried to ride out the 1-0 in the Miami heat, then got pegged back once to go to extra time and another time in extra time itself and really barely hung on the final 15 minutes to avoid pens. That said, the same as with England applies here: these are the matches you have to come through. I remain somewhat unimpressed with their unimaginative attacking game that’s built on Messi magic only, but we also have to admit that Cape Verde yet again scored two goals from low-percentage attacks. Argentina still have the second-best defense in the tournament and getting tested in a match that you didn’t expect to get tested in needn’t be a bad thing. Their stats match Spain’s almost to a T (8-2.08 xG). I think it will take a good team to take out Argentina, and those really only come in the SF and final.

I spared myself watching Egypt, so I still can’t say much about them. The scoreline against Australia reads as you would expect (1.32-0.84 xG). They obviously have more quality than Cape Verde, the question is whether Argentina will be caught off guard one more time by the conditions and the opponent as they were in the previous round. It sure reads like the classic R16 matchup that the bigger side wins somewhat comfortably after surviving a scare.

Team news/Conditions:

Argentina should have a full-strength squad. Egypt I think are getting back one player from suspension. Match is played in climate-controlled environment in Atlanta.

Odds & Bets:

I’m not incredibly eager to get on Argentina after that lackluster performance in the R32. At the same time, I don’t see them being so sluggish two times in a row. It looked like they tried to conserve energy and that backfired badly. They could’ve easily tried to push for a second with more urgency and kill the game in 90 minutes. I’d expect Argentina to have learned their lesson. That said, Egypt are a better team and shouldn’t lie down easily. They lost 2-1 to Brazil in a pre-tournament friendly and drew 0-0 with Spain in March. At AFCON they were eliminated by Senegal (0-1). They’ll try to keep things tight at the back, but I don’t see them create much up front. Over 180 minutes against Brazil and Spain, they created less than 0.5 xG. This reads like another 2-0ish win for Argentina and I’ll look to get on clean sheet close to 1.9 and win to nil above evens.

🇨🇭Switzerland vs 🇨🇴Colombia

Team impressions:

I didn’t watch either of these sides in their R32, which is a shame because this is a quite promising and open tie in my opinion. The Switzerland stats read like they took the lead early and then won an unexciting game quite easily. The 2.45 xG is probably misleading: almost 1 xG came from the first goal and 0.65 from a chance at min 81. Algeria completed more passes but couldn’t do much with the possession. Overall, the Swiss are a solid side and this is the type of opponent they can realistically beat without getting lucky.

Colombia dominated from start to finish against Ghana. The 2.08 xG created looked a good representation of the match. Ghana’s keeper made several great saves, they scored another offside goal, and Ghana did not have a shot on target. Colombia already played well against Portugal, and they’ll fancy their chances here. Their tournament stats are worse than Switzerland’s (5-1 goals from 6.48-2.72 xG vs 9-3 goals from 8.82-3.28 xG), but my impression is they’re the slightly stronger team that’s played better opposition.

Team news/Conditions:

Swiss have absences, Colombia miss their first-choice striker Jhon Cordoba. He’s only played 100 minutes at the tournament though and didn’t score from 0.30 xG. Not a significant absence in my opinion. His backup Suarez assisted the goal against Ghana. Match is played in Vancouver, so no heat problems.

Odds & Bets:

I’d expect a fairly open game here with chances on both ends. Not necessarily the highest tempo, but this could go either way, so I’m looking at both teams to score above evens. Colombia won’t enjoy the soft home advantage in Canada the same way they do in the US, which is a nice little bonus for Switzerland. The money line looks just about right, but I’d consider backing Switzerland 1x at 1.8 or better. This is another match that reads draw-ish and could easily go extra time.

What’s Next?

Let’s hope this round is just as good as the last. Good luck!

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Let’s go!

Preface: I wrote the Canada preview yesterday before the match. Worked out quite nicely in the end, even if we needed to get lucky after Canada wasted a bunch of chances!

🇿🇦South Africa vs 🇨🇦Canada

Team impressions:

I watched South Africa in the first two matches and thought they’re one of the weakest sides in the tournament. Looked amateurish vs Mexico and outplayed vs Czechia for the first 30mins. Then Czechia inexplicably retreated and managed to concede a pen. No idea how they beat South Korea, didn’t watch. They created only 1.82 non-pen xG, meaning they’re one of the weakest attacking teams in R32 and worse than some eliminated teams (hello Scotland). Their defense is okay-ish, but mind you they played rather tame opposition.

Canada have been somewhat of a positive surprise imo. I watched all three matches and they’re kind of incompetent and not clinical, but also play with urgency and intensity. Against Qatar they weren’t wasting time at set pieces even at 5-0. Their stats are pretty decent, even if you exclude the 4.6 xG against Qatar (2.9 xG left). Canada play the classic Jesse Marsh RB high press, high intensity, win-the-ball-up-high-and-charge-at-goal type of football. I think that style will do well against South Africa, much less so in the next round.

Team news/Conditions:

No particular news. South Africa are still missing the defender that got sent off against Mexico (Zwane), Canada will miss Koné (broken leg) and I reckon Davies will not start but be available off the bench. The conditions should play no role here.

Odds & Bets:

I have a pre-tournament bet on Canada to reach R16 at odds of 3 courtesy of , which I’ll be sitting on. Current odds look fair to me. Canada are clear favorites and should win this in 90 minutes, but this is still Canada we’re talking about. They took 75mins to score against Bosnia, so I would not be shocked at all if something similar happened again. The win is somewhat shorter than Korea were, but mind you that Canada don’t play this one at home. I’d be more comfortable with this line if they played in Vancouver. I might bet Canada in-play around 2.0 or better, depending on how they’re looking.

🇧🇷Brazil vs 🇯🇵Japan

Team impressions:

This is a tricky one. Brazil played two Mickey Mouse teams and one dark horse and looked good against the former but pedestrian against the latter. I wasn’t impressed at all with the match against Morocco, where Brazil showed up with basically no midfield at all and equalized thanks to some class play by Vini. Didn’t watch them against Haiti and then Scotland basically gifted them three goals in a routine win. So I struggle to assess whether Brazil are trash or, in fact, wildly underrated and improving with each match. They have the second-highest xG in the tournament but again, their opposition was weak. Their conceded xG is solid but not spectacular at 2.64 and just slightly better than Germany (bad defense!) and a lot worse than Japan (1.48 xG conceded).

Japan are also a bit confusing to me. They were decent against the Netherlands but I felt also a bit lucky to come back twice in a match that was dull before the half and then surprisingly opened up. They beat up Tunisia in what looked a very fluid performance based on the 5mins of highlights I saw. Against Sweden I thought they struggled a bit and the positive xG difference doesn’t tell the full story. Sweden had more shots and had two good chances in stoppage time to win it. The odds on Sweden also dumped before that match, which in hindsight was correct. Japan have made a name for themselves as a technically strong side but at least thus far, their defense has been more impressive. The conceded xG is the second-lowest in the tournament and they played two good attacks in Sweden and the Netherlands. The roughly 2 xG created against those two teams is not spectacular but solid.

Team news/Conditions:

Raphinha is out for the tournament for Brazil. So far, they haven’t felt the loss because they only had to take on Scotland without him. But I think that will be a factor in this match and in possible subsequent ones. Japan are missing Kubo (started against NED). Conditions won’t be a factor because the stadium in Houston has aircon.

Odds & Bets:

Brazil lost this match last October 2-3 after a 2-0 lead, but I don’t ascribe too much value to friendlies. I expect this to look similar to the Netherlands-Japan match in the first half. A lot of possession for Brazil, Japan defending in a compact block, conceding very few chances and looking to break when possible. I have Japan +0,5 (2.27) and Japan to progress (3.6) at the moment, but I actually like the under 2.5 around even money the most for now. I don’t expect an early goal, but even if we got one I don’t think it would necessarily open a lot. I think Brazil should not get the benefit of the doubt here and should be a bit higher odds (1.85), considering they were the same price vs Morocco and struggled. The under should imo come in a bit (1.8). Gun to my head I’d say Brazil advance, but this could easily go to extra time.

🇩🇪Germany vs 🇵🇾Paraguay

Team impressions:

Germany have finally made a knockout round again, but it’s been pretty bumpy. The match against Curacao was the expected warm-up. They struggled against CIV but played what I thought was a strong second half against an underrated opponent. The last match against ECU was a predictable shitshow and all hell has broken loose again in Germany over the manager’s questionable choices for that match (deservedly so). I don’t think Germany are as bad as the vibes are now, but they also won’t be good enough to get past France next round. 2.5 xG against non-Curacao teams aren’t impressive but also not shocking. The 2.5 xG conceded are a bit more worrisome.

Lucky for Germany, Paraguay are the worst attacking side left in the tournament with 2 goals scored from 1.1 xG. Their xG per shot is as bad as Curacao’s and Panama’s, so you couldn’t ask for a better opponent if you wanted to keep a clean sheet for the first time in 12 years at a World Cup like Germany do. At the same time, they conceded 4 goals from 4.14 xG. If Türkiye hadn’t been so insanely wasteful (they created as many xG as Germany but are out!), we’d be probably looking at a legendary Germany vs little Germany goalfest. I haven’t seen a single Paraguay match in all fairness, but based on watching Australia and the stats, I have a pretty good impression of what they’re all about.

Team news/Conditions:

Germany should get back Brown as starting LB. Their best CB Schlotterbeck will miss the rest of the tournament. Nagelsmann hinted at changes in the starting 11, a case of better late than never? Paraguay will miss a starting midfield in Gómez through suspension and likely a starting defender in Alderete through injury but get back their suspended midfielder in Almirón. Conditions should be warm but manageable.

Odds & Bets:

I think Germany could not have wished for a better opponent here. They got a good taste in what’s awaiting them in the match against Ecuador, facing a stronger team with a similar approach. Paraguay strike me as a very limited side and even this subpar Germany should have no problem dispatching them. I generally treat Germany these days as flat-track bully: they beat the weaker teams but don’t have what it takes for the serious opponents. I bet Germany-1,5 at 2.11, which I expect to drop to 1.9 before kick-off. I’m also bidding for Germany to keep a clean sheet around even money for the old 12-year mean reversion play. And I have a Germany to be eliminated in R16 bet at 2.1, but we’ll hopefully get to that next round.

🇳🇱Netherlands vs 🇲🇦Morocco

Team impressions:

I still don’t know what to make of the Dutch. Are they this great and beating their metrics because they’re quality or are they just good and due for some mean reversion? They put 10 goals from 5.24 xG past their opponents for the highest xG beat and best conversion rate of the group stage. I thought they looked mediocre first half vs Japan but then could have easily won it. They absolutely bossed Sweden and made them look like a Mickey Mouse team. I didn’t bother with the last match because everybody got to beat up Tunisia. Ironically their defense is even better stats-wise with 4 goals from only 2.22 xG conceded. Making the change to start Brobbey up front has worked great, he’s scored 3 goals from 3 shots on target.

Holland would be heavy favorite against anyone if they weren’t facing one of the best second-placed teams in Morocco. They created only 1.2 xG less and scored one fewer goal against the same opponents compared to the mighty Brazil (but still 6 goals and 6.13 xG). I saw them play Brazil and Haiti and was impressed as most people. This is a good team that will be hard to beat for anyone, they’re good on the ball, they have an attacking threat in Saibari and they can play physical without being unfair (3rd-highest fouls but only one booking conceded.)

Team news/Conditions:

Both teams have no suspensions or injuries. But this seems to be a major heat match. Based on my research, the teams will play in 30 degree heat even in the evening hours, so that could become a factor during the match.

Odds & Bets:

This is maybe the best R32 matchup but a difficult one to bet on. Netherlands are a better team than Brazil but much higher odds at 2.3 (vs Brazil at 1.7 in the group stage). At the same time, I don’t think this is unwarranted given that Morocco are the best African team and overall a top 8 side. I have a position on x2 Morocco for now but will likely keep most exposure as a prematch trade. Goals look also a coinflip. Morocco weren’t in fact as solid as you’d expect (3 xG conceded), but I’d expect them to keep this tight and not go into a shootout. The heat could also become a factor in the match. A lot of question marks for me, I’ll probably start with a small x2 and under position and manage from there. Another match that could easily go extra time.

🇨🇮Côte d’Ivoire vs 🇳🇴Norway

Team impressions:

CIV are a solid team that can give almost any team at the tournament a scare. The match against Ecuador was surprisingly open, but they ended up being more clinical to get the goal. They played pretty well against Germany for 60mins but then Germany found the extra gear and deservedly won. I didn’t watch the last match. They’re good going forward through Diomande but at the same time not all that stable at the back with roughly 4 xG created and conceded. Strikes me as a team that can run up and down the pitch but is prone to losing such a match against a side with more quality like they did against Germany.

Norway are probably one of the most exciting teams at the tournament. Unfortunately, I only saw the last match where they fielded a B-team against France, but based on the stats, they’re an elite attacking team (top 3 in shot conversion and xG/shot). Their defense doesn’t seem that solid, they gave up >1 xG in all three matches and have conceded 7 from 4.02 xG. Makes me think they have the raw talent to challenge any team but are also prone to messing up on a bad day.

Team news/Conditions:

Both could be missing a starting defender here: Singo for CIV and Ryerson for Norway. Conditions will play no role since the stadium has aircon.

Odds & Bets:

I like the over here and will try to get exposure on that and both teams to score at evens or better. I think Norway are deserved favorites but this is the type of match and opponent they can lose to. I bought some exposure on Norway to make the QF at 3+, which I like more than the straight win or qualification here. If they get past this tricky opponent, they will be favorite at a similar price vs Japan or a better price than Japan are now vs Brazil. In other words, I can see them going deep once they win the first knockout stage match.

🇫🇷France vs 🇸🇪Sweden

Team impressions:

France are no doubt the best team and the one to beat at the tournament. They have 3 of the 5 best attacking players in the world starting and a couple more top class ones as replacement. They looked pretty pedestrian first half vs Senegal but then shifted gears and won comfortably. Iraq was kind of a training match as was the last one to be fair since Norway tanked. Their stats are good but not yet elite (5.96-2.86 xG). The issue is I don’t think they will face elite opposition before the QF.

Sweden did well to recover from that beatdown in the match against the Netherlands where they were thoroughly outclassed. I thought they played well against Japan, but I’m very skeptical about their defense and their ability to pressure France in midfield. They ended on 7-7 goals but 2.98-4.09 xG and some of their pressing stats are as bad as those of Scotland and Curacao. It also felt that way watching them play. I think if France take them seriously, it could get ugly.

Team news/Conditions:

Saliba should be available again based on my research. Sweden will miss a key defender in Isak Hien, which won’t help their cause. It seems like temperatures will be high on Tuesday, so that could be a factor for in-match game management.

Odds & Bets:

Unsurprisingly, I like France here and bet the -1,5 when it was available at 1.87. It has shortened since and I think it will drop further before kick-off. This is a bad matchup for Sweden, who have a paper-thin defense. They conceded 5 against Holland and were made to look silly. They also lost 3-1 in a prep match before the tournament to Norway. France should want to close this out quickly and decisively to conserve energy for more demanding opponents.

🇲🇽Mexico vs 🇪🇨Ecuador

Team impressions:

I watched Mexico’s opener and the first half against Korea and that was enough for me. A team that keeps you on the edge of your seat this is not. But they’re steady as they come: sit back, absorb pressure, build up slowly from the back. They overperformed their stats by quite a margin (6-0 goals vs 3.73-1.51 xG) but will still be difficult to beat for mediocre teams, especially considering the home advantage.

Ecuador are the similar but slightly more exciting version of Mexico: press higher, create more chances on the break, but also less solid at the back. They were wasteful against Curacao but got it done against an unfocused Germany. The match against CIV could have gone either way to be fair, but they conceded a few too many chances in that one for my liking. Their group was also much tougher than Mexico’s, who probably had the weakest overall. I’m just not sure they will be clinical enough to put Mexico away, because there probably won’t be many chances in the match.

Team news/Conditions:

No absences for either team and conditions will be the usual altitude play in CdM. Ecuador are used to this, so no advantage for Mexico here.

Odds & Bets:

I will pass on watching this middle-of-the-night match, which will probably be thoroughly unexciting with few chances. Odds look correct-ish to me, maybe slightly on the higher side for Ecuador. Under looks pretty accurate too, so this is just a no-bet for me and I’ll hope Mexico cash the R16 pre-tournament bet that I have running on them.

🏴󠁧󠁢󠁥󠁮󠁧󠁿England vs 🇨🇩DR Congo

Team impressions:

As much as I want to be impressed by England, I can’t say I see a massive difference between Tuchel England and Southgate England. England look a lot like Arsenal to me in the way they play. No wonder their set piece xG is the highest of any of the big nations. I thought they were good against Croatia but helped by Croatia’s amateurish defense. Against Ghana and Panama they were rather poor and not clinical in front of goal but then again, these will probably never be the types of matches England shines in. I think they will be fine in the knockout matches, considering Tuchel is a top tier manager for ko matches. But I also consider this match specifically to be a very similar matchup to the Ghana match that England struggled in.

Congo are a classic African team: solid at the back, hope for something to go their way through a set piece or a counterattack up front. They looked outclassed against Portugal for about 15mins, then recovered and somehow scored and didn’t look too troubled in the second half. Didn’t watch them against Colombia, but against Uzbekistan they deservedly got the job done in the second half when they had to score twice to win. So I’d consider this a team that has seen different types of matchups and situations and has come through, which will make them hard to beat. Their stats are obviously worse than England’s, but when you look at the xG/shot in attack and defense, they’re actually equal. I think one of their main problems will be conceding set pieces: Congo are in the top third for fouls and bookings conceded and with England’s set piece strength, that could cost them.

Team news/Conditions:

England will be missing two RB in James and Quansah, which means they will probably start a CB in that position. No absences for Congo. Match will be played in climate-controlled conditions.

Odds & Bets:

I don’t see a pre-match bet here. Gun to my head I think England win this 1-0/2-0 off a set piece and/or one successful attacking sequence, but that is what the market prices in. This could go like England-Senegal 2022 (3-0) or like England-Slovakia 2024 (1-1 after 90mins with a 95th minute equalizer, 2-1 in extra time). And this is pretty much what the market expects as well. The under looks a solid option but not a no-brainer. England did in fact concede quite a few chances against Panama and that match could have easily gone over. It’s also much shorter than the under against Ghana and even a bit shorter than the under in Portugal-Congo. I’m bidding at odds-against but not lower. Probably one best left for in-play betting.

🇧🇪Belgium vs 🇸🇳Senegal

Team impressions:

I didn’t see a great deal of either team here, so this is a match-up I will not get too involved in. Belgium looked like Belgium in the match against Iran that I saw: creating and wasting chances. Their tournament stats are pretty good (6.79-1.94 xG), but they still only got the job done in the final match against the weakest opponent. There’s nothing that leads me to believe this story doesn’t end as it always does for Belgium: elimination by a stronger opponent or an unlucky exit because they weren’t clinical enough.

I also only watched Senegal once, against France. They played a good first half and could have easily taken the lead, but then faded when France stepped it up and got exposed at the back. That weakness also showed against Norway, but they ran up the score impressively against Iraq, so this is no circus team. Their stats are understandably worse then Belgium’s (5.25-4.12 xG), but they also played the best team in the tournament and one of the most prolific attacking sides in Norway. For an African side they’re unusually strong in attack but have serious weaknesses in defense, with 2 goals conceded from errors and much weaker pressing stats than Belgium.

Team news/Conditions:

From what I could gather the only question mark on either side is Mendy in goal for Senegal. He missed the match against Iraq and might be available here but that’s still TBD. Conditions should not be an issue, the match will be played in Seattle.

Odds & Bets:

I like the goals here and bet both teams to score around 1.95. Both teams look better going forward than in defense and this should be a fairly open match with chances on either side. The money line looks roughly accurate, maybe a bit on the low side for Belgium but not crazy value. I’m bidding x2 Senegal at 1.8 or higher. This is the type of match Belgium should win but can easily lose: Senegal are a good team that can’t quite hang with the best but can definitely take down the teams one level below and I’d consider Belgium to be in that tier.

🇺🇸USA vs 🇧🇦Bosnia

Team impressions:

Team USA is getting a lot of love, which I think is partly deserved partly overblown. On the one hand, they played a good group stage against teams that are roughly their paygrade and that they could also lose to. I only watched the match against Australia in full, which was the most unimpressive but still a deserved win. The second half against Turkey was a bit of garbage time play and this match would have no doubt been more interesting if Turkey still had something to play for. On the other hand, they also heavily outperformed their stats (8-4 goals but 4.62-3.89 xG) and lost to the first decent side that was playing for pride only. The home advantage and the draw should carry them here and possibly even one more round, but I still don’t consider this a good team.

Lucky for Team USA, Bosnia are the worst side left in the draw. They laughably outperformed their stats (5-6 goals from 1.87-4.07 xG) in a weak group. Had they not played Qatar in the last match, they’d be out for sure and even that was a fairly close call. Qatar had a couple of chances and Bosnia scored from rather low-percentage situations. The best thing I can say about them is that they fight, but they also invite too much pressure and generally don’t look solid in defense at all. They should also be on heavy legs as the match progresses, having had the hardest travel schedule of all teams and two matches in daytime heat.

Team news/Conditions:

No new absences for either side and conditions will be no issue.

Odds & Bets:

Team USA is a deserved favorite here, but I can’t quite bet them at such short odds against a team that managed to eliminate Italy in a knockout match after all. I bet the US to reach the QF at evens, so I don’t mind if this is quick and easy but that would still surprise me. The best value imo is USA to win the second half, which I’m bidding around 1.8. I’ll pass on watching this match, but I expect Bosnia to fade in the second half the same way they did against Canada and Switzerland. Fatigue and travel should catch up with them, so unless the US team is up 3 goals at half-time, I’d expect them to keep going for it in the second half and win that on stamina alone.

🇪🇸Spain vs 🇦🇹Austria

Team impressions:

Spain aren’t getting a lot of love, which I can partly understand but find partly overblown. I only watched them against Uruguay and that was an unspectacular match with few chances that could have easily ended 0-0 if Muslera hadn’t gifted Spain the goal. Their group was easy and they still didn’t shine, so there are deservedly some question marks, particularly when it comes to scoring goals. Spain created 5.26 xG but only 0.10 xG/shot, which is much lower than the 0.18 Norway and Brazil created against similar or better opponents. Their defense has been elite: 0.54 xG and 0.04 xG/shot are tournament-best. Their passing game is also as good as ever (most passes in the final third and the highest completion rate at that). They just don’t create enough chances and they’re bad at converting the ones they have. I think this will become a problem very soon, but Austria shouldn’t be the team able to exploit it.

Austria were incredibly lucky to advance in that legendary 3-3 buzzer beater finish against Algeria. They looked super nervous in that match and conceded on pretty much every Algerian attack. I also saw the second half against Jordan, where they weren’t much better. Argentina outclassed them and they never really threatened in that one. Their xG is negative (3.71-4.49), which isn’t a good look in a group with two soft opponents. I don’t think this Austrian team is as good as the one in 2024. Their pressing is worse, their defense looks leaky, and they still don’t have a real threat in attack. They can beat teams at their level or worse, but they rarely play quality opposition and I expect this to show.

Team news/Conditions:

Williams and Pino are out for Spain, Austria will likely miss Alaba and Arnautovic. Those are bigger blows to Austria than to Spain, because they’d miss two key starters vs two substitutes. Conditions don’t seem to be an issue.

Odds & Bets:

I’m bidding some Spain -1,5 as a prematch trade, but I don’t think I’ll hold onto it going into the match. I’d expect that line to come in a bit when/if Alaba and Arnautovic are confirmed out. But I’m not confident this Spain team can actually cover it >50% given how pedestrian their attack looks. Austria should give them enough looks and I’d expect Spain to create something like the 1.5 non-penalty xG that Argentina created against Austria. They won’t give up much, so this could be another rather unspectacular match if there’s no early goal. Ultimately, Spain will have too much and if I had to guess I’d also say they cover the handicap, but 2026 Spain isn’t as good as the 2024 version so I’d be careful betting on that.

🇵🇹Portugal vs 🇭🇷Croatia

Team impressions:

Portugal have been thoroughly disappointing so far. I watched all three of their matches and they were shit against Colombia, shit for 75mins against Congo after taking the lead, good against Uzbekistan. The only good thing you can say about them is that the tournament only starts now and they already won a big tournament after a poor group stage (2016 Euro). Coincidentally, they eliminated Croatia in extra time back then. Their xG is pretty poor, considering Portugal got to juice the numbers against Uzbekistan (4.19-2.81). Ronaldo is basically useless against physical opponents and/or teams with a good defense. I don’t think Croatia are either, so that could work in their favor. The next potential match-up against Spain is also not the worst for Portugal since they’d face a team with a very similar profile and the same strengths and weaknesses. In the QF they’d play USA/Belgium/Senegal, which are also beatable. So it’s not all that bad, but they need to start showing up.

Croatia did what they do best in the group: don’t play too well, muddle through, outperform their stats. I think their xG is the biggest net outperformance of all (5-5 goals from 2.77-4.39 xG). Their defense looked amateurish against England, they got somewhat lucky in the first half against Panama, and scored from two low-percentage situations against Ghana. This is kind of Croatia’s thing—they never create much but manage to take their chances while being scrappy and difficult to eliminate. I don’t think this is a good team, but Portugal aren’t in form, so I’d be surprised if Croatia don’t put up a fight.

Team news/Conditions:

No absences I could find. Both managers will have a few players to pick from in terms of making changes to the line-up. Conditions should be fine.

Odds & Bets:

If Portugal were in shape, I’d happily bet them at this price. But they aren’t, and even considering this Croatia side looks rather average, I just can’t make a case for any value on Portugal. Unlike for other matches, we have a bit of useful recent history. These two met in 2024 in the Nations League. Portugal won 2-1 at home and drew 1-1 in Croatia but slightly lost both on expected goals. There was also a friendly before that in 2024 that Croatia won 2-1 away with more shots and more chances created. So by any means, this could be quite an even match if the subpar Portugal of the group stage turns up again. In 2016, Portugal won 1-0 in extra time after being outplayed. I wouldn’t be shocked by a similar scoreline. Odds look fair for now. If Portugal show up with urgency and intensity like they did against Uzbekistan, they can dispatch Croatia quite easily. But that’s too much of a question mark for me.

🇨🇭Switzerland vs 🇩🇿Algeria

Team impressions:

Switzerland had a pretty easy group and took the 7 points you could expect from them, even if the draw didn’t come in the match you’d think it did. I think starting Manzambi elevated this team, even if they could have easily coughed up the 2-0 lead they had against Canada. Switzerland generally tend to do well against teams of their calibre but come up just short against better sides. I don’t think it will be different this time, even if they win this round and make it past Colombia in the next to face Argentina in the QF.

I only saw Algeria in that legendary 3-3 against Austria, which is probably not a good measuring stick considering the result both teams needed. Their statistics look passable (3.88-3.38 xG vs 5-7 goals) and they got the points you’d expect them to get. They will probably sit back and ask Switzerland to break them down, so this could be another slow grindfest.

Team news/Conditions:

Algeria will miss Amoura, Switzerland potentially Widmer. No critical absences. Conditions won’t be a factor.

Odds & Bets:

I like the under here and am bidding 1.8 or higher in what I expect to be a slow and boring match. I also bought some Switzerland at 2+ because I expect the line to come in again before kick-off. This is the type of matchup Switzerland tends to win, though I don’t think it will be easy by any means. Fair odds for me should be around 1.85-1.9 and 1.7 for the under. I’ll give this a pass since it’s played at 5am CET.

🇦🇺Australia vs 🇪🇬Egypt

Team impressions:

Australia did well to get out of the group with their usual defensive style. They got lucky that Turkey wasted their chances, then couldn’t do much against the US and got the expected draw to qualify. They’re every bit as defensive and destructive as you’d expect (2.08-2.68 xG), and I wouldn’t be surprised if they can frustrate Egypt with that style.

I didn’t watch Egypt at all, so I can’t really say anything about them. 5 points in that group is solid, even if they were 10cm away from losing to Iran and coming third. Their stats are unimpressive (5-3 goals from 3.79-4.56 xG). Australia’s style should be vaguely familiar to them, but that won’t make things any easier.

Team news/Conditions:

Egypt are (potentially) missing quite a few players: Salah looks a game-time decision and would obviously be a huge blow. They’ll miss a starting midfielder in Lasheen through suspension. Another starting defender in Fathy is confirmed and yet another in Fatouh looks likely.

Odds & Bets:

I can’t say much about these sides, so I’ll keep stakes low. But I do like the draw and the Australia 1x here at 1.65+. Depending on Salah’s status, I’d even fancy Australia, but it looks a very draw-heavy match so anything above 3 is worth a play for me. No read on the goals, especially with all the missing defenders for Egypt. Should be a close one.

🇦🇷Argentina vs 🇨🇻Cape Verde

Team impressions:

Argentina, or specifically Messi, have been the standout performers so far. The group was easy, but they still made it look easy and played well at that. 8-1 goals from 5.75-1.61 xG is the type of outperformance I’d ascribe to quality, specifically Messi’s finishing quality. They couldn’t have asked for a better draw either. Cape Verde instead of the projected Uruguay R32, then potentially Switzerland and Colombia aren’t the type of teams you’d expect to run Argentina really close. I do think there are some unresolved issues: their final third passes are as low as Sweden’s (but also on par with Brazil and Norway). Their pressing isn’t that great either, on par with Mexico and, funny enough, France. They like to sit back and absorb pressure, but also don’t break quickly. Instead they build up slowly and look for that pass into the channel to Messi. I think that will work well the next two rounds, but it could run into trouble vs Colombia and definitely in a potential semifinal.

Cape Verde are the cinderella story of the tournament. 3 draws, two lucky ones and one undeserved they should have won against Saudi Arabia. They will obviously play to participate here and I expect them to be brutally outclassed, even if their stats aren’t terrible (2.48-4.81 xG). Argentina’s passing game is nowhere near as good as Spain’s, but their main threat is miles better than what Spain can currently throw in (as long as Yamal isn’t in top form).

Team news/Conditions:

No absences for either, but this match will be played in the Miami heat. Cape Verde drew 1-1 with Uruguay in this stadium.

Odds & Bets:

I’m a bit surprised the market is showing this much respect to Cape Verde. I’d rate them on par with Jordan and the stats look roughly similar too (CPV are a bit better). Argentina beat Jordan 3-1 in the garbage time match, playing Messi off the bench. They started the -2,5 at 2.25, which then fell off a cliff in-play when it looked like they weren’t too bothered. Jordan still conceded from a free kick and a penalty and the second half was a nothingburger. I’d expect a similar line movement in the run-up to this game, considering how CPV outperformed their stats against two stronger teams and Argentina being a public favorite now. The only problem is that it will be played in Miami, which is a soft home advantage to Argentina but could also mean they take it easy after a potential two-goal lead. Brazil beat Scotland 3-0 in Miami, but Scotland gifted them goals. Uruguay drew twice, once against Cape Verde. I’d fancy Argentina to cover still, but I’ll be wary of that and if it comes that far I’ll be covering my handicap with other bets in-play.

🇨🇴Colombia vs 🇬🇭Ghana

Team impressions:

I only watched Colombia against Portugal but that was apparently their best match and one they should have won. They created a lot of small chances with shots from distance and looked physically superior to Portugal in the Miami heat. Colombia play the classic South American type of football from what I saw: run up and down the pitch, scrap, shoot, try to score from a rebound or a set piece or a shot from distance. Their stats are solid but not wow (4.29-2.46 xG). The kind of team I’d expect a major favorite to run close but come up short.

Ghana are another classic African side. Physically strong, few chances, absorb pressure, direct attacks. They frustrated England, even if England created enough chances to notch a win. Also played fairly well against Croatia in what should have been a draw based on performance. Few chances created or conceded (2.06-2.51 xG). This isn’t a good team but also not one I’d expect Colombia just to waltz over.

Team news/Conditions:

No absences for Colombia. Semenyo seems questionable for Ghana, which would be a siginificant blow. Conditions should be sweltering, which Colombia will already be familiar with from their match against Portugal.

Odds & Bets:

I fancy Colombia to win but not at the current price. This could be another scrappy affair and the second straight heat match for Colombia, which I think will show at a latter stage in the tournament. If I had to guess, I’d say betting them in-play at 1.85 or better is solid, but it’s another middle-of-the-night match, so I’ll just sit it out.

What’s Next?

I’ll do another set of previews for the R16 since I write them for my own clarity and as a reminder not to get sidetracked. Let me know if you like a bit of sports talk. I don’t do much of that, but the World Cup is only once every four years.

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The war between the US and Israel and Iran is finally over.

And with it the most emotionally, professionally, and financially challenging six months of my ‘trading career’.

In 2025, I had a rule not to get involved in Middle East markets after the infamous Israel strike on Iran that prompted the 12-day war. I broke that rule when Trump negotiated the Gaza ceasefire. Bad financial decision.

Then unrest in Iran kicked off in January and I became interested again, mostly because I find Iran a fascinating civilization. I took another loss trying to trade and predict the prologue to the war in January.

I took an even bigger loss opposing the war itself, even though I intuitively knew better. The ceasefire announcement surprised me as well. But in terms of trading, I dodged a bullet and managed to turn a profit.

And then the infamous 3-month Schrödinger’s ceasefire negotiation period started. I converged on the thesis below pretty quickly and wrote the analysis in time for the first failed attempt that left JD Vance waiting on the tarmac. It was a classic case of ‘not wrong, just early.’

We got another fakeout in late May, when peace seemed all but agreed and Mr. Art of the Deal changed his mind again. When the deal doubters and naysayers felt like it will never happen, Trump times it to perfection to gift himself “#10 settled wars” for his 80th birthday.

Following the stream of ridiculous headlines, propaganda, gaslighting, and lies from both sides exhausted me over these last few months. I lost interest in writing about predictions or really anything and questioned whether this is all worth it. I could have made more money and spent the time in a more useful way researching stocks instead of engaging with constant mental illness on X. I also lost money on a questionable Ukraine ceasefire resolution, which didn’t help for sure. Neither did some private issues that contributed to some terrible trading decisions.

Anywho, I’m belatedly publishing my April peace thesis, unedited from the day I wanted to publish it. If you want to skim some of it to see what aged well and what didn’t, be my guest. I think a lot of my analysis is strong and aged well, but I was also way off on some parts.

February 28th, 2026 was one of the dates when ‘decades’ were set in motion.

The US and Israel launched war — or as President Trump calls it “a military operation” — against Iran. But how will this “military operation” end? In this deep dive, I will analyze:

• Actor profiles of the war parties — the USA, Iran & Israel: their objectives, constraints, biases, leverage & capabilities, red lines, off-ramps, and decision rules.

• Actor profiles of the bystanders and mediators: the GCC countries, Pakistan, and the Iran-aligned Houthis.

• The interaction effects between the different actors.

• The main scenarios of how the war will end.

• My forecast and trades.

TLDR: I believe the incentives and constraints align for the US and Iran to reach, even on short notice, a fragile high-level memorandum of understanding, which both will present as peace. The US, and specifically President Trump, want to end the war and declare victory. Iran wants the economic pain to stop and proclaim successful resistance. Israel doesn’t get to override an agreement but will try to influence the US to get its wish of a restart of the war. That would happen if the two main parties don’t look past their biases and cannot yield on maximalist demands.

The United States 🇺🇸

Objectives

The declared pre-war objectives

One of President Trump’s stated objectives on February 28th was to “defend[ing] the American people by eliminating imminent threats from the Iranian regime.” One month into the war, Secretary of State Marco Rubio felt compelled to publish a video clarifying the US’ war objectives:

Rubio explicitly linking Iran’s missile capabilities to its enrichment program was the most succinct and logical manner any US official made the case for the war. It probably should have happened before it started.

explained the math behind how China has been supplying Iran with necessary chemicals for missile production. Following this argument, the US had to act before Iran would have been able to overload its interceptor capacity:

The stated operational objectives have been, according to the administration, largely achieved:

• The Iranian navy is “gone.”

• Their ability to launch missiles and drones is “dramatically curtailed.”

• Iran no longer has the capacity to enrich uranium, according to Bibi Netanyahu.

But the objective of ensuring that Iran can never have a nuclear weapon has not yet been achieved. Iran remains in possession of over 440kg of enriched uranium, which is enough for around 10 nuclear bombs. The US tried (and failed) to get custody of it diplomatically. The war has not changed that fact. I see Iran retaining the uranium as a red line for the US: this was framed as one of the key demands in pre-war negotiations and cannot be easily discarded even with ‘narrative management.’

Finally, there’s regime change, an objective the US simultaneously did and did not have:

According to Trump’s ‘narrative management’ campaign (or gaslighting as some would call it), Iran’s president Masoud Pezeshkian, who assumed office in July 2024 when Joe Biden was in office, is the “much less Radicalized and far more intelligent New Regime President” of Iran.

In reality, the assassination of Ayatollah (Ali) Khamenei led to Ayatollah (Mojtaba) Khamenei assuming the office of Iran’s supreme leader. Trump called him an “unacceptable” choice, but this does not seem to be a red line anymore. The US has been looking for a Venezuela-style solution of having a pliable leader. For lack of a better option, it has settled on Mohammed Ghalibaf, a trolling, corrupt regime insider that is at least open to talking to the Americans:

Intelligence professionals from both the US and Israel assess that real regime change would almost certainly take significantly more time and effort. Therefore, even though some reports claim Mojtaba Khamenei is “alive and functioning” and others assess he has “effectively no role” due to the severity of his injuries, the result is the same: change away from the Islamic Revolutionary Guard Corps towards a less hostile regime is unlikely.

The emergent objective during the war

Even though “nobody” in the Trump administration expected Iran to weaponize its geography, re-establishing free flow of energy through the Strait of Hormuz (SoH) only became an objective after the start of the war.

There are several problems with this emergent objective:

• There is no clean military solution to ‘opening Hormuz’: at best, one vessel per day could be escorted.

• Thus, a political solution establishing a new status quo in the SoH is the only realistic option. This new post-war equilibrium needs to prevent Iran from having a unilateral veto over a key maritime chokepoint.

• Iran’s objective is to institutionalize leverage over traffic in the Strait. The Gulf Cooperation Council (GCC) countries are diametrically opposed to this. This makes finding a new equilibrium that does not grant Iran veto power over traffic through Hormuz challenging.

Trump has slammed European countries for being reluctant to contribute to a military solution. But apart from the fact that Asia is hit even harder, this misses the point. Any talk about mines in Hormuz (reportedly a dozen) or “humanitarian corridors” is distraction from the main problem: by making good on its threat to take the Hormuz chokepoint hostage, Iran discovered it holds considerable leverage. Now it has every reason to convert this leverage into permanent political and economic gains.

Constraints

Internal constraints

The main criticism levied against the administration has been that the US did not define a coherent strategic objective. According to Israeli intelligence veteran Dennis Citrinowicz, the US has been working with flawed assumptions, underestimating Iran’s capability and willingness to choke the SoH, and without a clear strategic objective or exit strategy. As long as operational objectives have not been fully achieved, this complicates finding a mutually acceptable off-ramp, and the risk of escalation remains.

Iran’s attritional hostage-taking strategy further implies:

• Unilateral US de-escalation, possibly in combination with retreating from previous maximalist demands, risks implicitly validating Iran’s strategy. The US would lose face by de-escalating without tangible evidence of obtaining the uranium and/or degrading Iran’s missile capabilities.

• Escalation risks exacerbating other key constraints that shape US decision-making: rising commodity prices, public disapproval of a wider and prolonged war, equity and bond market stress.

The biggest domestic constraint for the US have been rising commodity prices, which translate into higher gas prices. 74% of Americans said in mid-March that gas prices have increased in 2026. 48% said Trump and the administration are responsible. Surging gas prices have almost certainly significantly contributed to Trump’s plummeting approval ratings. Nate Silver’s Iran War Approval Tracker has public approval of the war at -15, up three percentage points from the lows just before the ceasefire. The New York Times found that even in the opening days of the war, it was the most unpopular war in modern history. Only 41% supported it, compared with 92% for the Afghanistan War and 76% for the Iraq War:

68% of Americans disapprove of Trump’s handling of inflation, according to an April NBC poll.

His 69% disapproval on the economy is a full 12 and 13 percentage points higher than that of Bush and Obama at this point in their second terms. Trump’s approval rating on the economy is almost identical to his approval rating on the war with Iran. 67% of Americans disapprove, with 54% strongly disapproving:

One survey I found says that 46% of Americans are very or extremely concerned about rising grocery costs. No wonder since the global supply chain shock for fertilizer will probably cause another bout of food price inflation over the next one to two years. That won’t help the GOP in the midterms or in the 2028 election if the conflict is not urgently resolved. And in the short term, it constrains the administration’s options for a significant escalation of the conflict.

But there is another constitutent Trump cares about just as much, if not more: the stock market.

Trump is famously sensitive to the stock market, touting gains even in his State of the Union speech. He’s done well to talk up the market and reverse the 10% drawdown on basically no fundamental changes. But one could also argue that even a mild drawdown was enough for Trump to put the war on pause. For a politician that prides himself on being unpredictable, he is remarkably predictable when it comes to market weakness.

These domestic concerns have already pressured Trump into pausing the war. He pretty much admitted to these constraint when he said that if it were up to him, he’d “take the oil. But unfortunately, the American people want to see us come home.” A longer-term negative externality is that by easing sanctions on hostile countries, the US undermines its reputation and its strategic position vis-à-vis its enemies and allies.

All of this was compounded by the self-imposed 6-week timeline to finish the war. 90% of MAGA Republicans support the war, but brittle support beyond the base risks elite fragmentation. Senators Graham, Cotton, and Trump-adjacent influencers like Laura Loomer have advocated for a resolute course to submit Iran. The more economy-focused advisers, such as Susie Wiles and JD Vance would prefer to see Trump move on.

There is no open conflict over this yet, but I see potential for a ‘knives out’ moment after the war or the Midterms. A preview of this is reportedly “paranoid” Pete Hegseth, who has pre-emptively sacked several high-ranking military officers. Trump has started his own series of firings

Either way, I believe fracturing cohesion reduces the probability of finding a sensible off-ramp, because the decision-maker has to integrate a cacophony of different opinions. The war will almost certainly not become a PR win. That means someone will be blamed when it’s over (and some say Pete Hegseth will have the honor.)

Finally, we have to take magazine depth into account. I’m no military analyst, so I can only cite more credible sources, such as Perun. He explains how the US has achieved sufficient air superiority to be able to sustain the war effort, even if that eats into its stocks of Tomahawks and air defense systems:

The anti-drone capabilities Ukraine offered in 2025 would sure come in handy now in the fight over Hormuz, but Trump says the US does not need any help with that. Regardless, this constrains how long the US can operate in the theater without diverting resources away from possibly more relevant future theaters, such as the Indo-Pacific.

External constraints

Restoring traffic in the SoH to pre-war levels will require a political solution. One way or another, the sides will find a compromise and a new, possibly worse status quo: either the US has to implicitly or explicitly accept Iranian leverage over Hormuz, or it has to manage GCC fallout in the form of canceled ‘deals’ and investments.

Diverging interests among the GCC states, Israel, and mediators like Türkiye and Pakistan complicate finding a mutually acceptable solution. The GCC states are neutral to hawkish on Iran and Israel as a belligerent to the war has an incentive to undermine diplomacy. The result: the aforementioned risk of a partial strategic defeat, where Iran’s capabilities are significantly degraded, but its leverage is converted into political and economic gains.

Biases

Trump has always been an Iran hawk. But the biases in his personal style, as well as an institutional misunderstanding of Iran by the US significantly complicates finding a diplomatic solution.

On the one hand, you have Trump’s tendency for self-imposed constraints, such as deadlines or red lines that narrow diplomatic room to maneuver. My personal opinion is that Trump’s “help is on the way” tweet in January is the original sin that ultimately led to the war. Had he not boxed himself in with a red line that he, unlike Obama, had to enforce, the war may have never happened.

This runs counter to Trump’s ‘strategic volatility’ with arbitrary deadlines that allow for market manipulation, but also debase your own negotiation leverage. Iranian leaders now match Trump in terms of social media gaslighting and market manipulation.

Then there’s Trump’s theatricality and his need for a climactic show of force. Take the “final blow” that was supposed to bring Iran to its knees or at least ensure the US leaves on a strong note. The same goes for his teaser tweets announcing different degrees of war crimes. It’s all one big movie and Donald Trump is the producer and main character all in one:

The administration is laser focused on framing the war’s outcome as a PR win, whether that aligns with reality or not. That’s a result of Trump’s zero-sum game mindset and his tendency to double down under pressure. This approach creates flexibility since there is no truth but only a narrative — it can sell eased sanctions on Russia as “short-term pain for long-term gain.” But it also drives up volatility and undermines trust by allies — see Europeans denying their airspace to US military operations.

Most importantly, it reinforces Iran’s distrust and undermines efforts of a negotiated de-escalation. Trump’s zero-sum game mindset acts against his own interests and his impatience and impulsiveness has aides keeping him away from real-time decisions to not fuck things up.

The administration also underestimated Iran’s willingness to retaliate and escalate even at the expense of its own economic and political interests. This speaks to a total lack of understanding of and willingness to engage with Iran’s position and red lines. The Hormuz quagmire is the logical consequence. In combination with the other biases, it leads to constrained negotiation space and boxes Trump in even more.

In my opinion, Trump only knows one negotiation strategy: leaning on the weaker party long enough until it accepts a rotten deal. This worked against Hamas but has failed in Ukraine. Whether this works in Iran will depend on Iran’s pain tolerance and their willingness and ability to raise the stakes under military and economic pressure.

Finally, the US does not understand the slow and technical Iranian diplomatic process. The US is currently led by marketers and businessmen. Iran is led by philosophers and engineers. Sending negotiators like Witkoff and Kushner that don’t grasp the intricalities of the Iranian approach discredits them in Iran’s eyes. The need for a ‘sloppy deal,’ where speed is of the essence to declare ten solved wars, means there may not be a deal at all.

Even though I don’t rate JD Vance as a negotiator, I think his presence as an opponent of the war is vital for showing Iran respect and presenting an acceptable counterparty for an offramp.

Capabilities & Leverage

The US has the capability to inflict fatal economic damage on Iran. But a kinetic escalation, such as destroying or seizing Kharg, risks retaliation and imposing more economic and political costs: the benefits of successful escalation, such as regime change or at least a more pliant Iranian regime are backloaded. They are also subject to enforcement and control. But the costs are immediate — see rising commodity prices and falling approval ratings.

The US also has political leverage over Iran: it can offer sanctions relief, though this is conditional on political will. It would also require monitoring Iran for compliance, something the Trump administration probably has no patience for.

Red lines

The lack of clearly defined strategic objectives complicates defining clear red lines. My best guesses are:

• The US wants custody of and/or strong, verifiable limits to the Iranian nuclear program. However, this directly contradicts Iran’s red line.

• The US wants limits to the Iranian missile program. However, the exact limits are probably up for negotiation.

• The US does not want a ‘forever war’, in other words a ground invasion with a sizeable number of forces staying after the war, similar to what happened in Iraq.

What I don’t think real red lines are:

• Institutionalization of Iran’s influence over the SoH — Trump has suggested he “and the next Ayatollah” could control it together.

• “Security guarantees” for Iran, as long as the US’ red lines are respected.

I believe the main problem is the uranium and Iran’s insistence on the right to enrichment. This also happens to be the most tangible objective and the very reason why the US, in theory, launched the war to begin with.

Off-ramps

There’s a similar problem in terms of off-ramps: ‘strategic volatility’ gives you flexibility but complicates finding clear off-ramps. My best guess was that another show of US military might (the “final blow”) would create leverage for the US before climbing down from maximalist positions in negotiations.

I guess that has played out. The diplomatic off-ramp could be a nominal vow to achieve the goals that could not be achieved militarily. The problem remains the same: will the US insist on denying Iran the right to enrichment and does the US want custody of Iran’s uranium?

Key uncertainties

I’m uncertain about the US’ willingness to escalate and pain tolerance. Trump has been setting and delaying deadlines for fun.

In theory, the US ‘holds the cards:’ economically choking a regional power under decades of sanctions should be easy and increase the chances of Iran coming to the table. The naval blockade is the latest attempt to do so, but I wonder what the US would do if Iran does not fold under this pressure as the reporting suggests. Neither Trump nor the American public want or seem to expect the war to resume at this point.

My propositions for the US

Below, I will outline several propositions with varying degrees of confidence for how the US will behave.

High confidence

• The US’ biggest constraint is domestic economic pain and disapproval: the president is mostly swayed by equity and bond market behavior and somewhat, but less so, by rising gas prices.

Medium confidence

• The US is ready to temporarily escalate further to increase leverage and create room for ‘narrative management.’

• The US is willing to dilute its red lines if the equity and/or bond market signals distress, similar to what happened after ‘Liberation Day.’

Low to medium confidence

• The US would sacrifice goodwill of allies at the expense of easing said market pain — think announcing an end to military operations even without a tangible solution to Hormuz in sight.

My US decision rule

The US is most likely to pursue a path that allows it to declare victory without incurring significant short-term economic or human costs.

The main constraints are the lack of a clear strategy guiding policy and its sensitivity to financial markets. The US’ decision-making is highly dependent on President Trump’s perception of strength and his preference for coercion, while simultaneously underestimating Iranian resilience. The US is able to inflict terminal damage on the Iranian regime, but is more likely to settle for a negotiated agreement when financial markets force Trump’s hand.

Iran 🇮🇷

The declared pre-war objectives

Before the war, I assessed Iran has three objectives it wants to achieve:

1. Regime survival and resistance: preserving the regime is the highest priority and anything can be sacrificed at its expense, provided it does not directly contribute to regime survival. Despite continued decapitation strikes, the regime remains, for now, firmly in control domestically.

2. Deterrence: Iran needs to re-establish deterrence to ensure a third — and potentially fatal — war does not follow. That is why Iran has transformed its traditional measured retaliation into “forward defense.” It escalated asymmetrically against US allies and is willing to fight a war of attrition. The Islamic Republic has been betting on the US growing tired of the war’s economic costs before Iran does, but the naval blockade may change Iran’s calculus.

3. Respecting Iran’s sovereignty: the right to enrichment, including keeping custody of its uranium and the implicit acceptance of its missile program are not only matters of national security for Iran. They are a symbol of Iran’s sovereignty and its achievements as a nation. Iran is willing to negotiate on technicalities but not on its fundamental rights to either.

The emergent objectives during the war

The Iranian regime believes it is improving its strategic position in the region. That is why Iran has also been steadfast about its emergent objectives:

1. Security guarantees: Iran wants a backstop against a new attack by the US and Israel. I interpret this as a guarantee by an allied country like Russia or China or an implicit or explicit acceptance of Iran’s right to enrichment and, by extension, the risk that Iran chooses to build a nuclear weapon.

2. War reparations: Iran demands financial compensation for the damages incurred by the American and Israeli airstrikes. This could come in the form of sanctions relief or, possibly in addition to that, as a tacit or explicit acceptance of Iran’s right to tax passage in the SoH.

3. Institutionalizing a new status quo in the Strait of Hormuz: Iran sees its chokehold of Hormuz as the strongest deterrence. It intends to translate this into the right to tax passage, possibly in cooperation with Oman or as part of a multilateral framework.

Constraints

Internal constraints

Iran’s biggest trump card is ‘mutually assured economic destruction’ by keeping Hormuz closed and escalating against regional energy infrastructure. Still, the US and Israel have steadily degraded its military capabilities. Israel assesses Iran’s operational missile launchers at 25% of its pre-war levels.

While Iran may be able to sustain this tempo for years, the regime’s bet that the nominally stronger enemy becomes exhausted first does not look all that sound anymore:

• The Wall Street Journal reported that the cost to rebuild damages may be as high as $270 billion — more than 60% of Iran’s 2024 GDP.

• At the same time, the naval blockade may cause Iranian oil to be shut in in the next two weeks to two months.

• The internet blackout is hurting the Iranian economy.

• Airstrikes targeting infrastructure hit outward facing parts of the economy, choking off foreign exchange revenue streams.

• Extorting tankers in the SoH has reportedly not been the cashcow the regime hoped for.

• Iran’s currency is in hyperinflation, collapsing under international sanctions, systemic corruption, and a banking crisis.

All of that compounds Iran’s already massive structural dysfunction. For instance, Iran faces perennial water crises due to mismanagement and incompetence. The economic weakness, in combination with international isolation and failures since 2023, means the Islamic Republic has lost its moral authority. It is a ghost state, where authorities can coerce the population through violence but are no longer seen as legitimate.

Another constraining factor is that continuing decapitation strikes are disrupting Iranian command and control. Iran’s “mosaic defense” strategy means every position has dedicated successors. But eliminated human capital cannot be replaced without churn, and the remaining leadership has difficulty communicating and coordinating. It also causes a loss of cohesion, be it militarily by striking the wrong countries, or diplomatically by not speaking in unison.

This internal power struggle empowers the hardliners and limits the options for a face-saving off-ramp. But under the pressure of increased US airstrikes or even ground troops, it could backfire: the regime may have to retreat from red lines if its survival is at stake. Thus, Iran is in a race against time and American endurance to cash in on the leverage it currently holds.

External constraints

The Hormuz hostage is an extractive strategy: it creates leverage for the Islamic Republic by denying other parties access. But Iran’s asymmetric warfare of disruption and attrition can be nullified with enough will to bear the short-term costs. It also isolates Iran vis-á-vis its neighbors, which are already neutral at best and hostile at worst.

Thus, a fresh bout of regional escalation risks drawing a GCC coalition into the war and potentially expanding allied regime change objectives. But Iran has no real allies willing to put ‘skin in the game.’ It also lacks capabilities that meaningfully backstop regime survival, such as nuclear weapons. In essence, Iran’s strategy relies on the US not daring to call and raise the stakes. Its uranium is the only valuable bargaining chip the regime has to trade for relief of structural problems. Yet trading it would mean giving up the only viable path to ironclad deterrence against future military action.

Bias

One Iranian bias is a culture of mistrust and the need for reassurances by third parties. Trump went back on the JCPOA nuclear deal negotiated by Obama and attacked Iran twice during negotiations. That’s why the Iranians no longer trust the US to be good for their word and sought third-party guarantees even before the war. And it explains why Iran now wants a major power like China to put skin in the game as security guarantor. Absent such an agreement, I would expect Iran ultimately to try to dash to a bomb and, at some point, withdraw from the non-proliferation treaty.

Decapitation strikes disrupt the state’s cohesion, but they also complicate an agreement for another reason: who makes the deal is as important as what deal is made.

Amwaj.media reported before the war how a deal with the Biden administration fell through, because the Trump admin’s current favorite Mohammad Bagher-Ghalibaf slid into then-president Rouhani’s attempt to revive JCPOA. More recently, a comprehensive peace proposal by former Foreign Minister Javid Zarif was denounced as a “fantasy.” One of the main obstacles to a deal on the Iranian side is empowering one set of actors to make an agreement.

Iran considers the US’ position unacceptable, because the Iranian nuclear program is seen a source of authority and legitimacy. And not only for the regime, but for the revolutionary movement as such. The right to enrichment is not only, or even mainly, a source of deterrence. It is a source of national pride. Renouncing it would be renouncing one of the feats that make the Islamic Republic a sovereign and independent state. Hence, compromising on this at proverbial gunpoint — one of Trump’s many deadlines — would be capitulation. Iran as a thick culture defines security not only in physical terms, but also how others see it. Former Iranian president Hassan Rouhani explained it over a decade ago:

That’s where the Iranian and American worldviews collide: the Trump administration is a strictly materialist and realist one, but Iran is asking for engagement based on equality and mutual respect. Under this framework, the Islamic Republic believes win-win outcomes are possible, but zero-sum pursuit leads to “disastrous consequences.” Once you understand this framework, you understand why the Islamic Republic can yield on its maximalist demands: flexibility becomes part of resistance and being able to resist the enemy creates security.

Hence why Iran for a long time chose flexibility by resisting via measured retaliation. But the regime learned its lessons from the 2025 war and determined that deterrence could only be established through rapid escalation. I believe Iran drew further lessons from history that shape its approach:

1. The Iran-Iraq war in the 1980s was the last existential war for Iran and nobody came to help.

2. Therefore, Iran can only rely on itself. It cannot win militarily, but it can drag the US down into a spiral of chaos.

3. The US’ pain threshold may not be high when American blood is drawn: the United States backed down after the 1983 Beirut barracks bombings.

But this can also cause Iran to overplay its hand. For one, Iran is already short on allies and risks alienating the few backers it has: while China continues to provide intelligence to the IRGC, it does not provide military support openly just as is the case with Russia. Iran’s axis of resistance has been disintegrating since 2023. The Arab countries have not entered the war on the side of the US and Israel, but they have also not pushed against it. argues that Iran risks confusing martyrdom for waning influence and hard power and may be underestimating the appetite of GCC states to push back against its plans for Hormuz.

Capabilities & Leverage

Iran’s leverage is tied to its military means of suppressing commerce through the SoH:

• Its cost-effective asymmetric warfare can be sustained for a long period of time.

• Iranian escalation against energy infrastructure targets in the region remains possible. The Houthis as Iran’s semi-independent partner also retain the right to enter the war on Iran’s side.

• Iran’s new defense strategy of attrition and regional cost distribution does not aim to minimize losses but bets on US war fatigue.

Whether that asymmetric military leverage can be converted into political leverage is unclear and a key challenge for the Iranian regime as it tries to find a viable exit strategy.

Red lines

I see Iran’s red lines as closely tied to its defense strategy and worldview:

• The nuclear program serves as the remaining source of legitimacy for the regime. I do not see Iran surrendering all of its enriched uranium under any circumstance or any of it to the United States. I could see a token gesture of sending some uranium to a friendly country like Pakistan.

• Deterrence must be established again at least nominally. This can either happen through security guarantees, a unilateral US withdrawal from the war, which would be framed as successful Iranian resistance, or accepting the ‘new status quo’ that Iran’s leverage created in the SoH.

• Any agreement must respect Iran’s frame of resistance and be able to be sold as a win. Iran will not agree to any deal that does not respect the previous red lines and is framed as an ultimatum.

Off-ramps

I believe Iran is flexible in terms of off-ramps as long as its red lines are respected:

• A tacit acceptance of Iran’s right to enrichment, albeit under IAEA supervision.

• Tacit or explicit acceptance of Iran’s influence over Hormuz.

• Verifiable sanctions relief in exchange for concessions.

Key uncertainties

I see a possible gap between Iran’s maximalist public stance and more pragmatic views behind the scenes as the major uncertainty. Authoritarian countries are per se difficult to read. Even more so if they suffer from major leadership churn and infighting between factions. I consider it entirely plausible, even likely that certain Iranian leaders are more open to an agreement with the US. But the size of this gap is difficult to estimate during the fog of war.

That makes the durability of the mosaic defense another uncertainty: how long can Iran’s chain of control sustain decapitation strikes, how deep are its reserves of missiles and drones really, and how long can Iran economically and militarily keep the SoH closed?

Finally, the status of Iran’s enriched uranium is anyone’s guess. If the IAEA doesn’t know about it, neither do I:

My propositions for Iran

High confidence

• Iran is building its asymmetric defense around the ‘Hormuz hostage’ for as long as possible. This is Iran’s strongest deterrence and Iran will rather overplay than underplay this card.

• Iran sees the nuclear program as a source of sovereignty and legitimacy and will not compromise on its existence but only on technicalities.

Medium confidence

• Iran signals high pain tolerance but real pain tolerance may be lower due to internal and external constraints. The gap between its public and real position is impossible to assess.

• Iran is psychologically scarred by consecutive attacks during negotiations and will be more rigid in negotiations with regards to its red lines.

Low to medium confidence

• Iran’s potential underestimation of US pain tolerance and past experiences of success by resistance and failure by negotiation could cause it to overestimate its capabilities and leverage.

My Iran decision rule

Iran is most likely to pursue a path that re-establishes deterrence by imposing economic costs on the US and its partners.

It prioritizes regime survival and sovereignty but is constrained by its lack of capabilities and allies, while suffering from churn in its leadership and military capabilities. Iran’s decision-making is influenced by lessons learned from past wars. It retains leverage through its cost-effective deterrence strategy but is vulnerable to a sustained economic war of attrition. Iran is unlikely to meaningfully compromise on its nuclear program or relinquish its newly-found leverage in the SoH.

Israel

The declared pre-war objectives

Israel’s war objectives have been consistent from the start:

• Prevent Iran from developing nuclear weapons and ballistic missiles that threaten Israel.

• Eliminate command and control structure of the Iranian regime.

• Eliminate the wider military of the Basij forces, one of the branches of the Islamic Revolutionary Guard Corps.

This should create the conditions for the Iranian people to bring down the Islamic Republic — a key difference in the objectives between Israel and the United States. Specifically Trump sees bringing down the Islamic Republic as a “bonus” and pushes back against Netanyahu’s attempts to foment a popular uprising that could spark another massacre against civilians.

These objectives have been achieved to varying degrees of success. Netanyahu said three weeks into the war that Iran has “no ability to produce ballistic missiles” and can no longer enrich uranium. At the same time, he is wary of halting the war with Iran in possession of its enriched uranium.

Netanyahu’s personal objectives

A popular talking point is Netanyahu’s long-standing personal objective of bringing down the Islamic Republic:

According to a survey by the Israel Democracy Institute, more than half of left-leaning Jews and 45% of centrists think personal-political considerations were Netanyahu’s primary motivation. I subscribe to the argument that this was Netanyahu’s last window of opportunity for decisive military action against Iran with America’s support.

In light of more Israel-critical younger generations, this may not be possible under future more isolationist or Israel-critical administrations. According to an April Pew Research poll, 60% of all Americans and 70% of those aged 18-49 have an unfavorable opinion of Israel. 59% of Americans have little or no confidence in Netanyahu to do the right thing regarding world affairs.

Domestic political considerations may also play a role for Netanyahu. He is seeking a presidential pardon over a corruption trial and has until October to call an election and schedule a vote within three months. “The road to the polling stations runs through Washington and Tehran,” according to Israeli government ministers. Even though a majority of first-time voters identify as right-wing, Netanyahu may find it difficult to form a coalition. This dynamic incentivizes Netanyahu to prolong the war for as long as it remains politically feasible before ending it on a high note ahead of elections.

Constraints

Internal constraints

Public support for the war in Israel is fairly high but falling. The Israel Democracy Institute found that the share of strong supporters among Jews dropped from 74% to 50% over the war’s first month.

But even though — or maybe because — only 31% of Israelis think the Islamic Republic has been significantly weakened, 61% oppose the ceasefire. I interpret Israeli public opinion as war fatigue but a desire to continue until a more pronounced victory.

While public opinion is not the primary driver of policy, the Israeli Defense Forces are stretched and potentially exhausted after fighting on several fronts since 2023. Its Chief of Staff has warned the military could “collapse in on itself” due to operational demands and manpower shortage. There also seems to be a rift between the IDF leadership and the political leadership on the wisdom and feasibility of a ground offensive to destroy Hezbollah in Lebanon.

Israel lacks the military means to accomplish certain objectives, which only the US military can — see the Fordow bombing in 2025. Though Israel has not set an explicit objective regarding the enriched uranium, a possible exfiltration could only be attempted by the US. Netanyahu’s approach to rely on military solutions alone is also not free from criticism in Israel: his attempt to trigger regime change via decapitation strikes has failed, similar to how Hezbollah and Hamas remain weakened but functional in Gaza and Lebanon.

Finally, Israel is taking a fair share of damage from Iranian retaliation. I’m not familiar with the Israeli interceptor depth, but repeated strikes on high-profile targets, such as the oil refinery complex in Haifa, mean that Israel also cannot indefinitely sustain the war without incurring significant costs.

External constraints

Israel is to a great degree at the mercy and goodwill of the US and specifically Donald Trump for the intensity and duration of the war. This makes Israel’s constraints a function of US constraints. Trump called Israel back for a strike against Iran’s South Pars gas field, even though it was reportedly coordinated with the US. While Netanyahu wields great influence in the White House, Trump has gone against his wishes when he sees an opening to take credit himself: see when he overruled Israeli objections to achieve the ceasefire in Gaza. The latest such episode was the announcement of a ceasefire in Lebanon to give the US a chance to strike a deal with Iran. 51% of Israelis oppose this ceasefire, but Trump sees it as another mosaic to “peace in the Middle East.“

The alignment between Israel and the GCC states is questionable. For one, Israel has strong ties to some, such as the UAE. But that relationship, too, could get strained if Israel were to ever fulfill Netanyahu’s dream of routing oil through Mediterranean ports in Israel rather than in the Arab peninsula. The GCC states want to see Iran weakened but they fear a power vacuum if a fall of the Islamic Republic were to remove a key pillar of the region. For Israel though, a disintegrating Iran is preferable over a weakened but resisting Iranian state.

Netanyahu’s plan to trigger an uprising through air strikes and assassinations alone is unlikely to work, according to intelligence assessments. Iran’s resilience to decapitation strikes has frustrated Netanyahu. That raises the question whether Israel can and wants to double down on the war effort, because the current government budget can not sustain operations for much longer. Without US military support, Israel would have to accept whatever ‘gains’ have been made thus far.

Bias

If you have 30 minutes to spare and want a solid overview of who Benjamin Netanyahu is, watch John Oliver’s recent segment on him:

Similar to the US and Trump, Israel’s current policy style is intertwined with Netanyahu’s beliefs. One of Bibi’s key tenets is to prioritize political survival over almost anything else. That is what he did masterfully after the October 7 attacks by “placating and manipulating allies within his coalition and benefactors in the United States government, often all at once,” as a New York Times feature put it. One of his guiding principles is “a strong Jewish state that refuses any compromises.” That is downstream of the zionist “Iron Wall” ideology, contending that Zionist colonization can only develop under a metaphorical iron wall the native Arab population cannot breach.

The extension of that is Israel’s tendency under Prime Minister Netanyahu to test boundaries and err of the side of going too far, such as striking oil infrastructure in Tehran:

It also implies less reluctance to act against diplomatic norms in decapitation strikes, such as potentially targeting Iran’s foreign minister Abbas Aragchi — a regular guest on US news broadcasts. Israel under Netanyahu favors military solutions over diplomatic ones. Hence his pitch for Israel to become “super-Sparta” in a world full of enemies. In practical terms, that means Israel strives to maximize the damage imposed on Iran instead of aiding with an off-ramp. It also does not attempt to resolve the American misunderstanding of the Iranian strategy and thinking since this works in Israel’s favor.

Capabilities & Leverage

Israel’s intelligence agency Mossad has significant capabilities within Iran. This allowed it to execute a successful assassination of Ayatollah Khamenei at the onset of the war, as well as a whole host of continuing decapitation strikes.

Israel leverages Iran’s dire economic state and the country’s ethnic composition — 40% of Iran’s population are ethnic minorities. This gives Israel military leverage over Iran and ensures the disruption of command structures for fear of compromised communication. I would assume it also allows Israel to monitor the state of the Iranian nuclear program.

Since Israel does not depend on hydrocarbon imports through the SoH, disruption costs do not exceed that of an average European country faced with rising global prices. Thus, Israel does not face a financial constraint in the same way as commodity exporters on the Arabian peninsula do, which gives it leverage to push for an extension of the war.

Red lines

Israeli red lines are a function of its military objectives:

• A nuclear-armed Iran is a threat for Israel’s existence, as is an Iran with the capabilities to develop nukes. Therefore, at the very least Iran’s enriched uranium must be inaccessible and its total stockpile entirely accounted for.

• Iran’s ballistic missile capabilities further endanger Israel as a state. Iranian capabilities must be degraded for as long as the window of opportunity allows.

Since Israel is to a degree ‘in the passenger’s seat’ in the war, its red lines influence but do not dictate US decision-making.

Off-ramps

Israel won’t continue the war on its own without US assistance since major military objectives have, by and largem been achieved and regime change remains elusive. Thus, Israel does not need an off-ramp but will push to extend the war, even at the expense of undermining American objectives at times.

Key uncertainties

How far Netanyahu can push Trump and how much influence he really wields is still up for discussion. The two have not always been aligned on policy, such as when Bibi violated the Gaza ceasefire, when Trump yelled at Bibi over the humanitarian crisis in Gaza and the ceasefire in Lebanon that “shocked” Netanyahu. Trump has privately fumed about Netanyahu at times, so I see their relationship as positive but complicated.

My propositions for Israel

Medium to high confidence

• Israel is the vizier of Trump’s West Asia policy: steering him into actions that align with Israeli interests, but always cautious of Trump perceiving it as aligned with his own.

• Israel’s independence is limited: it would not sustain a war against Iran on its own and depends on its interests being advanced in Congress and the White House to leverage US capabilities.

• Israel does not mind sowing regional chaos but lacks the means to do so without US assistance. This creates a divergence in goals, since the US is looking for stability and advancing cooperation with states not aligned with Israel, such as Qatar.

• Trump and Netanyahu are aligned, but there is a pattern of Bibi pushing Trump’s boundaries with actions that undermine his ‘deal-making’ initiatives.

My Israel decision rule

Israel is most likely to pursue a war of attrition that degrades Iranian military capabilities and creates conditions for the regime to fall.

Its main constraints are dependence on the United States’ appetite to prolong the war and domestic discontent about its success. Israel’s decision-making is dependent on political considerations by Prime Minister Netanyahu and his objective of political survival. Israel has significant intelligence capabilities within Iran. Israel will settle for an agreement as the US sees fit but work on undermining the process behind the scenes.

GCC Countries & Mediators

The hawks: UAE, Saudi Arabia & Bahrain/Kuwait

The hawks want to re-establish the free flow of traffic through the SoH and punish Iran for lashing out at energy and civilian targets.

For example, there were several reports that crown price Mohammed Bin Salman is pushing the US on this “historic opportunity” to remake the Middle East. But as most countries in the region, the Saudis want to increase their influence but not at the expense of increased uncertainty. As the Wall Street Journal reports, this could further weigh on foreign investments for its 2030 modernization vision, which has taken a hit over the recent years. All GCC countries are heavily dependent on hydrocarbon exports and care about the SoH above all else.

The pre-war mediators: Qatar & Oman

Despite significant investments in US, Qatar’s influence in the White House seems limited compared to the Saudis and Israel. Still, Qatar has refused to take the lead as mediator.

Oman has traditionally sought a mediating role in the region and was leading the negotiation process before the war. As Iran’s direct neighbor in the SoH, Oman has an additional interest in contributing to a successful agreement to end the war but has no direct influence.

The new mediator: Pakistan

Pakistan acts as the primary mediator at this stage. Even though nuclear-armed Pakistan is constantly on the brink of economic collapse and lives off bailouts, it has managed to get into Trump’s good graces.

On the one hand, Pakistan shares a border with Iran and wants to see a stable Iran for domestic reasons. The country has 40M Shias, the second-biggest Shia population in the world. On the other hand, it is in a defense pact with Saudi Arabia and likely not interested in being called up to make due on its promises.

Then there is Pakistan’s energy shortages and dependence on hydrocarbon imports through the Persian Gulf. It has seen one of the highest increases in gas prices since the start of the war:

But Pakistan has also rebranded itself as Bitcoin mining hub, a source of rare earths and has praised Trump for brokering a truce with India. In short, Pakistan knows how to do diplomacy with the Trump administration.

Iran’s standby partner: the Houthis

The Houthis are part of Iran’s axis of resistance and the only meaningful ally Iran has in the war. I see them as a somewhat independent actor that functions as additional leverage for disruption by Iran.

The Houthis have held off on entering the war on Iran’s side and closing the Bab-el Mandeb strait in the Red Sea, a chokepoint that could potentialy kneecap Saudi Arabia’s oil exports. That may be because entering the war would put a target on their own backs, just after a long campaign that has depleted their own arsenals and leadership. What’s interesting: Saudi Arabia partially bankrolls the Houthis in exchange for keeping still in the Bab-el-Mandeb strait.

I see the Houthi threat as most cost-effective as long as it stays a threat, rather than being activated. The Houthis may still enter the war on Iran’s side, but they have their own network and constituency to coerce. My best guess is that the alignment and coordination between Iran and the Houthis is weaker than that between the US and Israel.

Interaction effects

At the time of writing this deep dive, the main question is: will the war end with a negotiated settlement now or will we enter another escalation after the ceasefire?

I believe the US and Iran do, in principle, both desire a quick end to the war. Trump has had an end to the war on his mind since at least the end of March. Iran’s Deputy Foreign Minister said the regime is looking for an end to the war, not another temporary ceasefire. Even as the US has continued to build up forces in the region, I read this as ‘options on the table’ rather than ‘deceptive diplomacy.’ As far as “doing a number on Kharg” is concerned, Trump has so far resisted deploying troops for extensive offensive operations.

The problem: the US and Iran talk past each other when it comes to ‘ending’ the war. I believe Trump sees a possible memorandum of understanding as the end to the war, but Iran sees it as the start of serious negotiations. Similar to how the Greenland crisis was resolved (or at least shelved), Trump is satisfied, even eager for a win on optics. He does not have the temprament or knowledge to engage with policy details and neither is he interested in delegating it to someone else.

Unfortunately for Trump, even a militarily weakened and outgunned Iran has agency. And it values substance just as much as style, which is why Iran insists on policy details and is rather inclined to compromise on style, as long as the regime does not feel disrespected. Robert Malley, on the US negotiating team for the 2015 nuclear deal points out the problem:

The problem for Iran is that sanctions removal has to be approved by Congress. And hawkish as Trump may be on Iran, Congress will be no less hawkish if it comes to removing sanctions on a hostile regime.

Another problem are diverging objectives between Israel and the US: Israel would prefer the US to at least stay on standby for another round and ideally continue the war outright. Israel’s role on the US’ side is similar to the role IRGC hardliners play for Iran. The objective of both is to continue the war because they think the enemy has not gotten what they deserve. They both have an incentive to subvert and sabotage diplomacy and an eventual implementation of an agreement. The only unknown: Trump can and does override Israel’s preferences, while the same may not be the case for Iranian ‘doves’ with their hardliners. To seal any agreement, temporary or permanent, the US will need to take into account that the Iranian negotiators have their own hardline constituency that needs to be taken care of.

The final problem: the US’ communication and negotiation style violates Iran’s red lines. Don’t take my word for it, here’s the Iranian Deputy Foreign Minister explaining it:

While both sides excel at trash talking and posturing, it is Trump himself that gets in his own way. It would be too much to ask of him to be magnanimous with a, according to his own words, militarily defeated enemy. But at the very least, he should not be taking multiple phone calls a day to update random journalists on the latest US wishlist in the negotiations. His advisers agree.

The good news: the high-level framework that seems to be the basis of a deal is a workable solution. It reportedly includes:

• A 15-year enrichment moratorium.

• Downblending enriched uranium, but leikely keeping it in Iran.

• IAEA insepctions.

• An open SoH.

• Some form of security guarantee.

• Phased sanctions relief.

Here’s why I believe some form of this high-level framework will be agreed upon.

Scenarios

Scenario 1: high-level deal signed

Despite the posturing on social media and beyond, this is my base case:

Both sides are compelled by their incentives and constraints to sign a very fragile ‘peace agreement’ that is in practice a prolonged stand-off while attempting to de-escalate.

The US, and Trump in particular, seems in no mood to continue this war, which is already in ‘extra time.’ Even though hawks like Lindsey Graham would like a more stringent deal, or even better a continuation of the war, Trump knows he is on borrowed time. That’s why he is pre-selling the deal as a “FAR BETTER” deal than that of “Barack Hussein Obama:”

The stock market has rallied to record highs, so I do think Trump has room to maneuver. But a restart of the war accomplishes nothing, unless the US is willing to commit to a multi-month effort to oust the regime, which, as we have heard, has already changed anyway. Trump has not signaled any desire for that. So even though the uranium is a red line, I expect Trump to deploy his A-game ‘narrative management’ if Iran insists on keeping custody of the diluted enriched “nuclear dust.”

On the other hand, Iran desperately needs economic relief and a permanent end to the fighting. In my opinion, the time to make a stand was two weeks ago when Trump was considering war crimes, oil was above $115, and the S&P500 500 points lower. Iran passed on this opportunity, painful and expensive as it may have been in terms of damages. Then Iran wasted two weeks when Trump owned the news cycle and did little to counter his narrative or change the facts on the ground. What would being excessively obstinate accomplish at this point?

Even as Iran continues to complain about the naval blockade, Trump’s disrespect, and whatever else puts them off, I believe Iran is very interested in signing a deal with JD Vance in particular:

That is because JD Vance is:

• A well-known and outspoken critic of the war.

• Somebody that could be president in two and a half years and a good person to be able to hold accountable.

• An excellent off-ramp in itself since he is neither Jewish like Kushner, nor aligned with Israel like Witkoff. He has a reputation to guard and a legacy still to build.

Invalidation triggers

I believe the reasons why a deal could fall through are rather simple:

• JD Vance, for whatever reason, does not travel to Pakistan for negotiations. That in itself is the signal the US isn’t serious about the agreement. Iran will not sign a deal with Kushner and Witkoff only. My read is that in Iran’s perception, they were the decoy for the start of the war.

• Donald Trump can’t help himself and says or does something escalatory to set Iran off and negotiations never happen. I am completely serious when I say that Trump being offline for 48 hours would probably seal the deal. According to a person familiar with the talks: “The Iranians didn’t appreciate POTUS negotiating through social media and making it appear as if they had signed off on issues they hadn’t yet agreed to.”

• Both sides do not show the necessary bit of flexibility to close the gap. The deal will be a sloppy introduction to a fresh nuclear deal that will take months to negotiate and resemble the deal Trump has scrapped to a large degree. If Iran prioritizes dignity and enrichment and/or if the US insists on its maximalist demands that violate Iran’s red lines, it will fall through.

How a possible deal could look like

I believe it will be similar to the October 2025 Gaza ceasefire: some high-level points, an official ‘end’ to the war, Trump’s name on it, and a lot of lofty hopes and dreams for the future. In terms of ‘commitments’, my best guesses are the following:

• Iran and the United States both commit to an end to the war and a non-aggression pact, effective immediately.

• Iran will be granted the right to enrichment but accepts a 15-year moratorium.

• Iran will agree to dilute its enriched uranium and commit to enrich only in overground reactors for research and medical purposes. There may be some element of sending a part of it to Pakistan.

• Iran will commit to IAEA oversight and decommission all its underground facilities.

• The SoH will be ‘jointly controlled’ by Iran and Oman, with further negotiations on an exact mechanism to determine details to follow. There may also be an element of a GCC consortium in governing the Strait or the proceeds of a possible tax.

• Iran will receive phased sanctions relief, with a first tranche tied to unsanctioned Iranian oil being effective immediately.

• Iran and the United states will work on a reconstruction fund to compensate Iran for the damages of the war. It will be partly funded by unfrozen Iranian assets.

• Iran commits to ceasing to fund terrorist and extremist groups around the world.

• Iran and the US commit to negotiating details regarding all nuclear questions in the next 60 days.

• Iran and the US commit to negotiating limits to the Iranian ballistic missile program in the 60 days after that.

Scenario 2: escalation

I see a 60% chance for an agreement if the meeting happens and if JD Vance participates as planned. But if it falls through, I expect a fierce round of fighting. Trump will be furious that Iran did not take the deal when he, in his view, showed maximum flexibility and goodwill. Iranian hardliners will consider themselves vindicated as the US came to talk first only to shoot later (or did not talk at all). I think the gloves will come off in that case and the US may in fact align with Israel in that case.

Scenario 3: another short-term ceasefire

I could see a 10% chance for another short-term strategic ceasefire. Trump is “over it” and doesn’t want to fight anymore but will if he has to. That’s why I think he’d be livid if a deal falls through and why I think kicking the can down the road is not an option. This doesn’t include a tactical extension of 48 hours to give the negotiators more time. But I think another two weeks or even more is not on the table for Trump. In this scenario, we’d get an even more unstable version of the previous two weeks and I’d put the chance of a restart of the war before the end of the ceasefire at over 70%.

My trades

It took me a while to arrive at a good expression of my thesis on . The two main problems:

1. We don’t know if an agreement is framed as a peace agreement.

2. We don’t know how the leaked content measures up against the rules.

By far my highest conviction bet is that the US will not physically obtain any Iranian uranium. The US may have removed uranium from foreign countries under peacetime conditions but never under fire. This is one of Iran’s few non-negotiable red lines and I do not see them yielding on this in any shape or form. The fair value of this is maybe 5c:

Regarding the meeting itself, I continue to hold my shares come what may. As long as JD Vance appears, they will meet, social media bluster or not:

In terms of uranium-related bets that may be covered by a deal, my fair value estimates in case of a deal are:

• Iran to agree to a moratorium on enrichment: 80%. The only problem with this bet is that the specific framing of the moratorium could resolve it to No, but this has basically been leaked.

• The US to agree to Iran’s right to enrichment in principle: 80%. Again, both of these points were discussed at the previous meeting and the gap is tactical, not strategic.

• Iran to agree to send some of its uranium abroad: 40%. This is one of Iran’s red lines and they have been adamant about it. But it also happens to be one of the US’ core demands and a critical component to making the deal ‘better’ than the Obama deal. I could see middle ground by Iran agreeing to dilute some and send some to Pakistan, maybe also for dilution. I misplayed this market and initially held No, but executed poorly, then bought Yes but oversized.

The actual peace agreement market is the most interesting one. I really liked the Wednesday deadline and started buying on Saturday, but alas, smart money can only do so much when dumb leaders are involved. My idea was for talks to start on Monday as planned, be wrapped up on Tuesday, with maybe a day to spare. As things stand, even in the best of circumstances talks won’t start before Wednesday and are unlikely to yield a quick agreement. While I’d give it a 75% that the deal is framed as ‘peace deal,’ it would probably come on Thursday or maybe even Friday.

But even if it isn’t a peace deal but a (imo unlikely) ‘long ceasefire’, I see a decent chance that Trump will announce the military operation as being over:

Some final thoughts on the Strait of Hormuz market. Every smart trader and their mom seems to be on Yes. I realize and agree that it’s a good proxy for a deal. Some points of caution:

• The market will pump upon an agreement, but that is just the first euphoria pump. The two main lanes may not be used or it could be a phased opening.

• I’d expect the IRGC to adhere to an initial deal, at least for a day or two. But that is not a given. If it does happen, the odds would likely go to 90 quickly if the average clears the threshold.

• I see a lot of selling pressure from Yes with big bags. That could depress the price on the way up.

I also hold a bunch of JD Vance as Republican nominee and 2028 election winner shares. I think a successful deal will boost his standing and it’s in his own best interest to make it succeed.

Hedges

Before the first ceasefire I had the wrong read but the right hedges:

This time I like the following markets and am bidding there:

Trump to visit China has been a cursed market for me, but it trades as a peace proxy. If the war were to restart, this would likely dump. If it were to restart in the vicious way I expect, the meeting could easily get delayed again. In any case, China has not yet confirmed. In case of a deal, you would have to take the L.

Similar idea with the Mandeb Strait market — if the war restarts, the Houthis could well enter the conflict, and quickly. This is reasonably cheap and a clear bet on an immediate strong escalation. If an agreement is reached, this will got to zero in hours.

I don’t like the Invasion market in either direction. Yes goes against Trump’s fears to escalate with ground troops but will definitely pump to beyond 50% in case of war. In case of peace, No will deflate to maybe 15%. That’s not great expected value in my opinion.

The same goes for the Regime fall market. Only sustained pressure over months would give this market a real chance to go Yes. As a speculative hedge it’s ok though and has little downside.

The hedge I have deployed most capital to is simply short Ethereum. I don’t see a scenario where ETH does not take a serious hit if war restarts. Even in case of peace, the pump may fade fast, but crypto trading is not my strong suit.

What’s next?

If and when the next thesis will be published is still to be determined. I will probably be a bit more active over the next few weeks, but I’m questioning how much time and energy I want to spend on prediction markets. I feel there is ever less juice to be squeezed with more sharp people in the markets and fees. The industry also isn’t developing in the direction I was hoping for. Time will tell.

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Our friendship began in 2009 when you received me at the St. Petersburg Library.

But yesterday, our friendship rose to such a high level that I can help in any way. There is a story in our Hungarian picture books where a mouse helps a lion.

I am ready to help immediately.

Viktor Orbán to Vladimir Putin, date unknown.

Viktor Orbán has the who’s who of strongman leaders as friends: he is the “mouse” to Vladimir Putin’s “lion,” he has the “Complete and Total Endorsement” of Donald Trump, and Bibi Netanyahu says he stands for “safety, security, stability.”

So, why does only give him a 29% chance to win on election day?

In this deep dive, I will analyze:

• Viktor Orbán and the problems of Fidesz.

• The “good Fidesz:” who is Péter Magyar?

• Hungary’s polarization: the election campaign strategies of Tisza and Fidesz.

• The roles of Russia, Ukraine, and the European Union in Hungary’s election.

• Viktor Orbán’s systemic advantage: the Hungarian electoral system.

• What the polls are saying.

• My forecast and trades.

TLDR: After years of economic underperformance, Viktor Orbán’s Fidesz enters the 2026 election at a historically weak point. Péter Magyar is a unique challenger betting on grassroots support to overturn Fidesz’ systemic advantage. My research agrees with the polls showing that the opposition can overcome the structural disadvantage.

Viktor Orbán and the problems of Fidesz

If you’re really interested in learning about Hungary under Viktor Orbán, the non-profit investigative journalism center Direkt36 made a documentary about what has been going wrong in his 16 years as Prime Minister. The documentary comes with English subtitles:

I watched it so you don’t have to and can give you the ‘too long didn’t watch’ summary.

The documentary argues that Orbán did not use the favorable conditions he had over the past 16 years. For example, EU funds added on average 1.4 percentage points to annual growth between 2004 and 2023. But much of the money went to prestige projects and political patronage. From 2022 onward, inflation, weaker growth, and withheld EU funding combined for a perfect storm for Hungary’s growth model. A few data points illustrate that well:

• Hungary was last in the EU in actual individual consumption in 2024 at 72% of the EU average.

• Real GDP growth came in at 0.6% in 2024 and 0.4% in 2025.

• Between 2014 and 2024, Hungarians moving to other EU nations accounted for 37.8% of the country’s total population decline. The population of Hungarians living in the rest of the EU increased by over 60%.

As goes the economy, so go the chances of ruling parties anywhere around the world. Viktor Orbán’s Fidesz party has won four straight national elections since 2010. But another investigation by Direkt36 shows how Fidesz entered an internal crisis after underestimating Péter Magyar and has been struggling to recover ever since.

Initially, Fidesz underestimated Magyar for too long and treated him as an unserious figure who would eventually implode. Magyar was a member of Fidesz himself, so several Fidesz politicians reportedly saw him as “the good Fidesz” or “the non-corrupt Fidesz.” In other words, Magyar resembles the Fidesz of over 20 years ago when Orbán came into power.

After Péter Magyar’s Tisza party posted a stronger-than-expected result in the European Parliament elections in 2024, Orbán’s Fidesz launched a “good news” communications campaign. But the good news never came, because the government’s biggest structural problem — the economy — never delivered them. For instance, inflation rates in Hungary far exceeded those of comparable countries after the war in Ukraine started. Inflation topped out at 25% year-over-year in 2023!

The government’s promised four percent GDP growth has not materialized in recent years and was never realistic to begin with, considering how reliant on EU funds Hungary is. The gap between official optimism and people’s lived experience has been widening and polls have confirmed the deterioration. Reportedly, even internal government polling showed Tisza ahead by a wide margin in 2025.

Orbán did not help with solving the crisis. In fact, he contributed to it. In May 2025, he praised George Simion, the anti-Hungarian Romanian nationalist candidate in Romania’s presidential election. Orbán believed this was a strategic investment in a future ally against the EU, but Simion lost and the move backfired.

Another example of a self-inflicted defeat: the infamous Pride Parade ban in June 2025. Despite the ban, the parade went ahead with record participation. Direkt36 quoted a government source saying this had been “an own goal.” Fidesz also demonstrated poor judgement in the Szölö Street protection scandal. This instance of an official abusing a minor in state care was not the first such scandal. Péter Magyar’s rise in 2024 was spurred by a presidential pardon over a similar event. Former Justice Minister and Péter Magyar’s ex-wife Judit Varga had to resign over the scandal and Magyar’s anti-government campaign took off in the atmosphere it created.

In short, Fidesz seems to have overstayed its welcome as steward of Hungary. But that in itself would not be enough to threaten its rule, were it not for Péter Magyar, the challenger from its own ranks.

The “good Fidesz:” who is Péter Magyar?

People unfamiliar with Hungary’s political landscape tend to think that Orbán’s challenger must be a liberal or a social democrat. But nothing could be further from the truth.

Péter Magyar comes from a conservative, patriotic background and has been deeply anti-left from an early stage. In an extensive feature about his rise, Direkt36 portrays him as someone who long shared the core conservative beliefs of Fidesz but due to his confrontational personality never fit into Fidesz’ disciplined, hierarchical culture.

For example, as part of the Permanent Representation of Hungary to the European Union, he became known for challenging speakers and provoking disputes in Brussels. His divorce from former Justice Minister Judit Varga in 2023 triggered political isolation for Magyar. According to government sources cited by Direkt36, he had already lacked broad support within elite circles, but after the divorce his standing worsened dramatically. Magyar was viewed as self-driven and disloyal to team discipline. He had made critical comments about people in power and the pro-Fidesz economic elite. This made him an outsider in Fidesz’ system built on discipline and loyalty.

The pardon scandal in 2024 triggered the resignation of his ex-wife Varga and then-president Novak. It also gave Magyar an opening to resign from his positions in two state-owned enterprises and officially break with the Fidesz system. He went on to give a number of high-profile interviews that transformed him into a national political figure. Magyar took over Tisza as the platform for his political ambitions and the 29.6% the party gained in the 2024 European Parliament elections made it Hungary’s biggest opposition party. It was the strongest opposition performance in 14 years.

Magyar is not an outsider by background or ideology. He comes from conservative networks and spent years inside the ruling system. But Magyar has leveraged his insider status with outsider rhetoric and has benefited from proverbially being the right person in the right place at the right time under the right circumstances. That has allowed Péter Magyar and Tisza to completely transform the Hungarian political system.

Hungary’s polarization: the election campaign strategies of Tisza and Fidesz

One of my grand theories is that systems in the world are becoming more centralized and polarized at the same time. Hungary’s political system would be one data point in this theory’s favor.

Though not traditionally a two-party system, the 2026 parliamentary election in Hungary de facto comes down to two parties: Viktor Orbán’s Fidesz and Péter Magyar’s Tisza. Several micro-parties have voluntarily withdrawn to avoid splitting the opposition vote against Fidesz. Beyond the two main parties, only two others run a nationwide campaign: the far-right Mi Hazánk Movement and the Democratic Coalition (DK). Only Mi Hazánk is considered to have a realistic chance to meet the 5% threshold to enter the parliament.

Surveys show trends in Hungary that you can observe in many other Western countries:

• A plurality of voters no longer trust the democratic process: in December 2025, 41% of respondents expected Fidesz to prevent Magyar from running, including 16% of Fidesz supporters. This did not happen.

• Voters split across party lines: 81% of Fidesz supporters said they would definitely not vote for Tisza, 90% of Tisza voters said the same about Fidesz.

• People live in echo chambers: according to 89% of Fidesz supporters, things are going in a good direction in Hungary. 98% of Tisza supporters thought the opposite. 26% of all voters saw politics as a battle between good and evil, with this being most prevalent among Fidesz voters (37%).

Fidesz tries to leverage this polarized political atmosphere in combination with its institutionalized incumbent advantage to win a fifth straight election. But where previous opposition parties failed, Tisza seems to have found a way to counter that.

Tisza’s grassroots campaign strategy

Tisza has campaigned on a mix of restoring growth and liberating Hungary from the Fidesz strangehold, without taking away the tax breaks passed by the party. But true to his conservative core, Péter Magyar has also tried to attack Fidesz on its own conservative platform. For instance, during his New Year’s Eve speech, Magyar announced that a Tisza government would ban the import of non-EU guest workers starting June 1, 2026.

Magyar has also aggressively defended ethnic Hungarians abroad. When Viktor Orbán didn’t push back forcefully enough against a new Slovak law that infringes upon ethnic Hungarians in Slovakia, Magyar stated he would expel the Slovak ambassador if elected. He wrote an open letter to the Slovak Prime Minister to prove that Tisza is a stronger defender of cross-border Hungarians than Fidesz.

Yet I would argue that given the anti-incumbent climate in Hungary, how Tisza reaches voters is a lot more relevant than what exactly its campaign promises are.

Independent media outlet Telex wrote a detailed report on how Tisza built a volunteer-driven ground operation. To overcome Fidesz’s financial dominance, the party relies on massive door-knocking, voter data collection, and their social media game.

Tisza is betting on direct voter contact and data collection: according to the report, its objective is 15,000 handshakes per constituency. Local teams make strategic decisions based on settlement size, geography, turnout assumptions, and expected vote ratios. In some rural-heavy districts, the strategy is to dominate larger settlements and limit losses in villages.

Door-opening rates are reportedly strong: one source cites 30%, another a 20-25% range. In some small settlements, residents reportedly reacted with “deep astonishment” that a Tisza candidate had bothered to campaign there. Tisza campaigners believe Fidesz’s activist machine is weaker than before. The article cites several sources that Fidesz appears to have fewer active people in the field than in earlier elections.

One major constraint is campaign financing. Tisza candidates often work with only a fraction of what a normal campaign would require. One source estimates that a proper campaign in their district would cost 50 million forints but they must make do with around 10 million. In a western Hungarian seat, one source estimated that Fidesz may spend 100–150 million in the district while Tisza must try to do the same job from only a few million.

This disadvantage shows in campaign materials: Tisza candidates generally do not have billboards. Party headquarters provide only the basics like flags, ties, T-shirts, and some printed materials. Travel costs are often paid out of pocket, and extra counters or leaflets must be financed locally.

To level the playing field, Tisza relies on social media as force multiplier. The party believes it is outperforming Fidesz online and leads in engagement metrics despite lower post volumes. Despite Fidesz candidates having a significant follower advantage, Tisza candidates have seen higher average number of reactions per post and more organic reach. In short, Tisza is trying to make up for a lack of capital by putting in extra labor.

If that ends up working, it may be because Fidesz made the wrong bets.

Fidesz: “the sure choice”

In January, Fidesz introduced its “sure choice” campaign slogan and doubled down on the narrative that Viktor Orbán is the sole guarantor of peace and security in an uncertain world. Péter Magyar would only bring chaos and instability if he came to power, something that Orbán has not been shy to repeat: “We are now facing the danger of losing everything we have built together,” he said only three days before the election. Back in January, Magyar countered that Fidesz is only a “sure choice” for corrupt oligarchs like Lőrinc Mészáros.

Orbán has been campaigning first and foremost on security and Zelensky as the enemy that wants to pull Hungary into the war. He’s accused Zelensky of blocking the repair of the damaged Druzhba pipeline to Hungary and has plastered the country with anti-Zelensky and anti-EU campaign posters. Beyond that, Orbán has relied on said endorsements of international strongmen like Trump, Putin, and Netanyahu. He even had US Vice President JD Vance campaign for him on a last-minute stop en route to peace negotiations with Iran.

Polls show Fidesz way behind Tisza. But the ace up the party’s sleeve may be its ability to harvest ballots from rural, lower-educated, and ‘invisible voters.’

Fidesz’ ‘invisible voters’

Data analysis by Telex shows that Fidesz has voter reserves by systematically mobilizing “invisible” populations, such as slum residents and nursing home inhabitants. Fidesz utilizes local agents to directly ensure these targeted voters reach the polling stations and generates a massive turnout surge that secures its hegemony in specific regions. The analysis cites several indicators:

• Unlike the standard national rhythm of elections, these specific districts experience highly concentrated bursts of voting where crowds appear at the exact same time.

• In these flagged districts, the Fidesz candidate drastically outperforms the broader constituency average, often by at least 15 percentage points.

• Flagged districts regularly see outlier spoiled vote rates, which suggests the mobilized individuals either lack knowledge on how to cast a valid ballot or are participating in organized “chain voting” schemes, where they do not understand the process.

The research identified roughly 5% of all constituencies that simultaneously met all suspicious criteria. This translates into approximately 120,000 direct votes for Fidesz individual candidates, but the true scale of mobilization is likely much larger. When people talk about election irregularities or manipulation, this strikes me as the most plausible way it could happen.

Beyond these ballot-harvesting strategies, Fidesz can also draw on pools of rural and elderly voters open to its message of stability and security. Fidesz is entrenched in everyday life in many rural Hungarian communities and controls access to jobs and support. In the words of a 40-year old Tisza volunteer: “If you’re with them, you have jobs and money, but if you’re against them, you get nothing.” Yet the other side feels just as strongly: “Now there is Viktor Orbán and everything is shit. If the next one comes, it will be even worse.”

International observers don’t care much about the interests or fate of rural Hungarians. But they are very much interested in Hungary’s future relationship with Europe, so it’s time to look at the role of Russia and Ukraine in this election…

The roles of Russia, Ukraine, and the European Union in Hungary’s election

If you had to guess which countries Hungarians have a positive view of, what would you say?

You may be surprised to learn that its former aristocratic partner Austria is the most popular — 83% have a positive opinion. Croatia (77%), Sweden (75%) and the United Kingdom (73%) aren’t far behind.

Ukraine and Russia are the most unpopular countries in Hungary: 71% and 68% had a negative opinion of them in December 2025, according to a survey reported by Telex. But 76% of Fidesz voters have a negative view of Ukraine, compared to only 53% for Russia. Even 61% of Tisza supporters have a negative opinion of Ukraine, while Russia is viewed negatively by 77%.

50% of Hungarians consider Ukraine a threat to national security, compared to 47% for Russia. Among Fidesz voters, 63% fear Ukraine, compared to 36% who fear Russia. Among Tisza voters, the ratio is reversed: 54% fear Russia vs. only 36% who fear Ukraine.

The conclusion: Hungarians don’t like either Russia or Ukraine, even if their party preference matters at the margin.

A timely leak just before the election about phone calls between 2023 and 2025 revealed that Hungary’s Foreign Minister Péter Szijjártó acted as an informant for Russia during closed-door EU summits. Hungary’s status of a quasi-ally of Russia’s has been known for a while, but the extent and detail of the leaks leaves little room for interpretation. The double tap came by another leak of a very amicable phone call between Orbán and Putin, where Orbán told Putin that “size matters.” In reference to Hungary’s role in international relations, of course.

Hungary has been acting as a clamp on EU support for Ukraine for years now. According to the leaks, Hungary leveraged its EU veto power to block sanctions in exchange for special Russian energy deals: Szijjártó bragged to Lavrov about fighting the European Commission’s “stupid idiot proposal” to phase out Russian energy. So the EU may be excused for cheering on Péter Magyar, hoping that his cabinet will not be ‘at Lavrov’s disposal.‘

The reports of attempted election interference by Russia and accusations of EU and Ukrainian interference are reflected in the public sentiment: 48% of respondents in a recent poll thought Russian influence is likely, while about a quarter thought the same of Ukraine, the US, and the EU. Unsurprisingly, Fidesz voters were more concerned about the EU and Ukraine and Tisza voters about Russia.

But neither Ukraine nor the EU should get their hopes up too much about Péter Magyar. According to a Politico report, Magyar’s policies on Ukraine and the EU closely mirror Viktor Orbán’s:

• Magyar actively opposes European efforts to aid and integrate Ukraine.

• He rejects sending weapons to Kyiv, opposes fast-tracking Ukraine’s EU membership, and Tisza voted against the €90 billion EU loan (although winning the election may make Tisza more pliable in that regard).

• He has criticized the erosion of Hungarian minority rights in Ukraine, openly stating that “no one wants a pro-Ukrainian government,” and sided with Orbán when Zelensky publicly clashed with the Prime Minister.

Magyar’s primary goal with the EU is financial, in other words unlocking the billions in frozen EU funds. But a 2025 poll shows that 74% of Hungarians oppose financial aid to Kyiv, so any support for Ukraine will be transactional. The EU can and will live with that, if it means getting Hungary out of the fangs of the Kremlin. Magyar has advocated for “pragmatic” relations with Russia, which probably means staying on the Kremlin’s client list for oil imports but cancelling advocacy of its views in Europe. In other words, Hungary under Magyar would stay a tough cookie for the EU, but that would probably be a trade-off the EU is willing to make.

Before looking at what the polls are saying, there is one more important factor to discuss: the Hungarian electoral system.

Viktor Orbán’s systemic advantage: the Hungarian electoral system

Hungary has a “mixed-member majoritarian” system. People cast their vote on two ballot papers: one for the national list, the other for a candidate in the individual constituency of their place of residence. Anyone who does not have a Hungarian address can only vote for the national list. The election is a single-round election: the candidate who receives a relative majority of the votes in one of the 106 single-member constituencies wins the seat. Independent parties face a 5% threshold. The parliament is made up of 199 seats: 106 from constituencies and 93 from the national list. Thus, 53% of seats are distributed ‘winner takes all’ and 47% are proportional.

Here’s where it gets interesting: Hungary has a ‘winner compensation’ for votes in individual constituencies. Take the following example of a hypothetical constituency:

• 1st place candidate: 20,000 votes

• 2nd place candidate: 15,000 votes

• 3rd place candidate: 10,000 votes

• 4th place candidate: 5,000 votes

The votes of the losing candidates are added to the national list, so they ‘don’t go to waste.’ Therefore, the 2nd place receives 15,000 votes, the 3rd 10,000 and the 4th 5,000. But the winner is also compensated. Since 15,001 vote would have been enough to win, the 4,999 extra votes not needed to win are added to the national list. This is designed to tilt the playing field to the party winning more individual constituencies. Or put differently, the party with strong local networks, which thus far has been Fidesz. This is compounded by the fact that only a minority of seats are selected through proportional representation. However, this time around the ‘winner compensation’ could also backfire, because the opposition has mostly converged around Tisza.

Hungary could thus end up in a 2016 scenario, where despite winning the popular vote, Tisza does not win a majority of seats. Fidesz’ advantage is worth 3% or possibly even more, depending on whether Mi Hazánk clears the threshold and the exact distribution of seats. Thus, in combination with the gerrymandering and media capture, Tisza has to make it ‘too big to rig’ to win.

The polls say that will probably happen.

What the polls are saying

Hungary is a peculiar case, because depending on whether you look at an independent poll or a government-aligned one, the difference can be as big as 20 percentage points. An aggregate of polls has Tisza up by roughly 10 points:

Government-aligned polls see Fidesz leading by around 5 points:

Independent or opposition-aligned polls have Tisza up by over 15 points:

The Partizán election barometer, about whose accuracy I pass no judgement, projects a 78.5% chance for Tisza, compared to a 81.4% chance for Fidesz at the election in 2022. Looking at proxy questions shows further interesting data points. According to an independent poll at the end of March, 43% of respondents would bet on Péter Magyar if they had to bet 25 euros on the outcome of the election, compared to 33% on Orbán and 23% who didn’t know.

Another independent poll at the beginning of April showed that, regardless of sympathy, 43% thought Tisza would win, compared to 40% for Fidesz and 15% who didn’t know.

Atlas Intel, which has made a name for itself by being one of the most accurate pollsters in the US, has Magyar at a +8 net favorability rating, compared to Orbán’s -16. Tisza leads by 52.1% to 39.3% in the pollster’s final pre-election poll. Other interesting findings include:

• 41.7% think Hungary is headed in the right direction, but 56.6% think the opposite.

• 42.5% approve of Orbán’s performance as Prime Minister, 56.9% disapprove.

• 62.8% think the election will be free and fair, 37.1% think the opposite.

• 48.7% think Magyar is most suitable as Prime Minister of Hungary, 40.6% think the same of Orbán.

Turnout is forecasted to be a record 74%, which presumably would help Tisza. The youth vote is also projected to be at a record high, another potential plus for Tisza.

Therefore, whether Tisza wins a majority of seats seems to depend on:

• If its lead in the opposition polls is real and will be converted into votes.

• If it can overcome the systematic disadvantage.

• If no other party clears the 5% threshold.

• If Fidesz can find visible and ‘invisible’ votes from its rural reserves to overcome the greatest hole the party has been in in decades.

To answer these questions, I went out to collect some evidence myself.

My forecast and trades

The Hungarian weekly HVG had a district report series, where its reporters went out to different parts of the country to illustrate how ordinary Hungarians are feeling. Its conclusion: “the previously secure Fidesz advantage is evaporating.” Evidence of that are well-attended visits by Péter Magyar in former Fidesz strongholds and mayors dependent on government favors willing to speak out against the same. But HVG also reported that many rural strongholds remain firmly with Fidesz.

I went out myself to the swing districts of Monor and Cegléd just outside of Budapest to talk to a few people and try to check the temperature. My anecdotal evidence gave me roughly the same impression I had based on the detailed reporting and polls I’ve been reading.

Here are a few impressions:

• Collecting qualified information was difficult since only about half of the people I tried to talk to spoke English and the cities were pretty empty.

• I did not come across anyone that openly advocated for Fidesz, but that was probably due to the fact that its voters lean older and less English-speaking. The parents of two younger adults were Fidesz voters, but they did not elaborate on why.

• More than half of the people I talked to, all between 25 and 55, were in favor of Tisza. The main motivator seemed to be a desire for change.

• One woman did not want to share her preference, although I suspect she was pro-Tisza. Another man was a bit hesitant to reveal his preference for Tisza. I got a latent impression that people don’t feel like speaking about politics in public is common or welcome.

• The longest conversation I had was with one undecided man: he said he may opt to vote for a third party to balance both and does not expect much to change under Péter Magyar. He was unsatisfied with the economy but also seemed to appreciate the ‘strong’ image of Orbán and was hesitant about Magyar would be able to project the same. He said his wife would vote for Tisza.

• One group of four middle-aged Tisza voters that happened to be from Budapest said people around that area vote for Fidesz. They drove a Tesla, which made me think there is probably some urban bias at play.

• Practically all people expected a close race and thought the vote among others in the area splits 50-50.

I have bet on Péter Magyar to become Hungary’s new Prime Minister. The lead across the totality of polls and the proxy questions in the Atlas Intel polls, in combination with the reporting and the idiosyncratic strengths of Magyar leads me to believe that he will be able to overcome the tilted playing field. I have held the bet on Magyar for months, because I see Magyar as the right person with the right approach at the right time to overcome Orbán’s systemic advantage.

If Orbán ends up winning, it will likely be because the hidden rural Fidesz reserve, in combination with the electoral system, gets him over the top one more time.

What’s next?

The next deep dive will be my long-awaited super deep dive on Iran. It will be very extensive but recent developments overtook my predictions, which forced me to delay it for a week. It will come out by the end of next week, so subscribe:

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Good luck and I’ll see you in the next one!

This week, Donald Trump fired his last bullet at Jerome Powell. And the Top J stood there, unfazed.

Jerome Powell fired back at Trump’s DOJ, which opened a criminal investigation over the Fed’s headquarter renovation in DC. He openly stated he will not back down in the face of political pressure:

But Jerome Powell will not be the Chair of the Federal Reserve after May. In this piece, I will analyze who will become his successor and what will happen to Powell after his term is up:

• Why Trump wants Powell out

• Trump’s selection criteria for the new Fed Chair

• The candidates to succeed Powell

• The four factors influencing the timing of the announcement

• My conclusion and predictions what will happen

The TLDR: Based on fundamental analysis, there is one candidate that is the clear value and overlooked by the market. That candidate is Fed governor Christopher Waller.

Why Trump wants Powell out

What a difference eight years make. Donald Trump was full of praise for Jerome Powell when he nominated him in 2017. By 2025, he had entirely changed his tune:

Trump’s insults and attacks on Powell have become so frequent during his second term that the NYT built a full dashboard to track them:

He has (many times) called for Powell to resign, mused about firing him to deny having done so, called him a “total and complete moron,” “major loser,” “stubborn mule”, “one of the dumbest and most destructive people in government”, and, at times, even admitted he “like[s] him very much.”

The reason why Trump dislikes Jerome Powell is simple. In fact, he openly shares his thinking:

Donald Trump has a real estate background, and real estate people need low interest rates to refinance projects. Nevermind that the Federal Reserve only controls the short end of the yield curve — the two-year US treasuries — as opposed to the long end — the 10-year and 30-year US treasuries — that matter for the real estate industry.

Donald Trump also likes the stock market making record highs on his watch. He will not miss an opportunity to take credit for that and imply causality, where it may or may not exist. See his countless tweets and soundbites about all-time highs for stocks, or even crypto, back when crypto highs were still a thing:

An overlooked and underrated third aspect: Donald Trump loves high growth rates. Don’t take my word for it, he will tell you himself:

Op-eds warn about the US turning into an emerging market, but what if that is a feature, not a bug? The Wall Street Journal’s Nick Timiraos wrote in Trillion Dollar Triage, his book about how the Powell Fed battled the COVID crisis, that Trump was fond of Powell’s Democratic predecessor Janet Yellen and mused about reappointing her. But what’s even more intriguing: he talked about how emerging market economy growth rates fascinate him:

In conclusion, low rates, stock market highs, and high growth rates are the policies, or results of policies, which Trump expects from his next Fed Chair. But there are a few other criteria, so let’s take a look at how Trump has decided about other candidates…

Trump’s selection criteria for the new Fed Chair

It’s almost impossible to believe in 2026, but Trump was really fond of Janet Yellen back in 2017 and seriously entertained keeping her as Fed Chair. Trump ultimately chose Powell to “make his own mark,” but said Yellen is “very impressive” and that he “likes her a lot.”

Reportedly, Trump wanted to nominate her because he equated the stock market highs with Yellen’s stewardship of the economy. But then former Treasury Secretary Steve Mnuchin intercepted Trump’s endzone pass, which Trump bemoans to this day as a “bad recommendation”. This makes me think Trump is particularly wary of others’ advice this time round, even though he obviously seeks it. It would also explain why Bessent, whose role is crucial in the selection process, wants to not appear favoring any candidate. Even though I think he clearly has favorites.

Bloomberg wrote in 2017 that Powell got the nod for having the “best judgment and collective experience” of the finalists, by which Trump meant “private-sector experience and real-world perspective.” Trump pondered candidates other than Janet Yellen, too: his economic adviser Gary Cohn, an early favorite of Trump’s, did not get the nod over criticizing Trump for his Charlottesville “fine people on both sides” remarks and for fears of not being confirmed as a Democrat.

Trump apparently entertained Yellen despite her being a long-term Federal Reserve insider and despite VP Mike Pence favoring a candidate that would overhaul the Fed. This tells me that Trump is more concerned with his top priorities (low rates, surging markets, and growth rates) than that of his advisers. So while Scott Bessent may be calling for major Fed reform, I don’t think Donald Trump cares much about that or will, in fact, have openness to reform as one of his major selection criteria.

Trump apparently did not discuss rates with the 2017 candidates, which I’d attribute to the zero interest rate policy of the 2010s. As soon as rates started rising, Trump was livid about it and mentions lower rates in basically every comment about the Fed these days. I think low rates and a candidate that can achieve low rates are the no.1 selection criterion this time. Trump has said as much himself when he ranted on Truth Social about looking for a Chair that “doesn’t destroy the market for no reason whatsoever” by hiking rates:

The interviews in 2017 took over a month, with Powell as one of the earliest candidates to be interviewed but still getting the job in the end. Trump reportedly asked aides about candidates a few days before announcing his pick, but the reporting does not detail whether he had already made up his mind about Powell at that stage.

There’s also some interesting insight from the selection process for Treasury Secretary in the second term. Bessent was apparently chosen because Trump “liked his billionaire bona fides and the fact that he converted to the MAGA movement after working for Soros.” In other words, impressive achievements, particularly financial, and ideological loyalty also matter significantly to Trump. But, contrary to what Trump himself says, being loud about your own campaign matters less. Bessent won the role over the more aggressive Lutnick and Powell won over Warsh in 2017. So even if Trump complained about Warsh not having been forceful enough, his own track record indicates he doesn’t actually care about that.

Furthermore, Trump seeks adviser input but doesn’t depend on it. Trump will famously talk to anyone to ask for their opinion, but that doesn’t mean he will act on it. While he did implicitly listen to Mnuchin during his first term, he ignored Elon’s preference for Lutnick when picking his Treasury Secretary. The same goes for Jared Kushner backing Marc Rowan.

This also tells me that just being in Trump’s orbit can help but is not enough. Warsh has supposedly been a part of Trump’s orbit, yet he got snubbed (again) for the Treasury role. Another criterion I find overrated: Trump’s proven preference for good looks. Yes, he complimented Warsh (and many others). But Trump cares more about someone looking the part than looking good. Powell looked like a Fed Chair. Scott Bessent looked like “central casting.”

Being respected by others matters to Trump, because it indirectly falls back on him and confirms his choice. Trump can pick outsiders, but for the most consequential roles — those dealing with the economy like Treasury Secretary — he’s so far not picked anyone that would upset markets.

That yields the following Trump selection criteria:

• Very important ‘professional criteria:’ a preference for low interest rates, ability to set policy that keeps the stock market high and contributes to high growth rates.

• Very important ‘personal criteria:’ financial or other impressive professional achievements, ideological loyalty and alignment with MAGA, ‘looking the part’ of a Fed Chair, being respected by others (presumably for said achievements).

• Less important ‘professional criteria:’ having adviser backing, being a reformer or otherwise an ‘outsider’ to the system, specific policy history.

• Less important ‘personal criteria:’ being in Trump’s orbit, ‘just looking good’, campaign aggressively.

With that in mind, let’s assess the candidate fit.

The candidates to succeed Powell

We’re down from 11 candidates last summer to four finalists:

• National Economic Council Director Kevin Hassett

• Former Fed governor Kevin Warsh

• Current Fed governor Christopher Waller

• BlackRock Chief Investment Officer Rick Rieder

Kevin Hassett

Kevin Hassett was all but assured to become the Fed Chair nominee in early December:

Trump had more or less made up his mind at that point — and maintains that is still the case now in mid-January — but something kept him from officially announcing Hassett as the nominee.

Hassett wants the job and has benefited from being able to prove his loyalty to Trump as part of the first Trump administration. That means Hassett checks the ideological loyalty box. Markets also responded favorably, or at least did not freak out when Hassett was the clear front-runner. That would also tick the stock market highs box.

Reporting on Hassett’s standing in the administration is mixed. A Politico report cited sources that some see Hassett as ineffective as NEC Director other than being a messenger (and he appears on TV…a lot). Other sources point out that he may not have the respect needed by other Fed board members to be able to forge consensus to drive a low-interest rate policy agenda.

This could create a problem if individual FOMC member views start carrying more weight and potentially dissent more often. If the Chair is too overtly seen as a parrot of Trump’s views, as opposed to being able to construct an intellectual argument for lower interest rates, yields may rise. Because remember, the Fed only controls the short end of the curve, not the long end. Powell has a reputation for being a strong consensus-builder, which the next Chair would also benefit from in order to advance a low-interest rate policy.

To me, Hassett does not check the respected by others box. The frequency and detail of critique reported tells me there are significant doubts in the administration (and beyond) about Hassett. He is not seen as independent and may be a heavy, potentially but not necessarily even too heavy a lift to be confirmed by the Senate.

That’s why I also doubt Hassett’s ability to deliver lower rates. He may or may not be up against it right from the start if he were to be confirmed, depending on the path it would have taken to get him there. So far, the perception of Hassett predominantly seems to be that of ‘Trump’s interest rate hack’, similar to the role Stephen Miran currently plays as Fed governor. It would at least significantly undermine his ability to forge consensus on the board if the circumstances don’t align with Trump’s preferences.

Hassett has also no financial achievements to speak of as PhD economist. On the other hand, he is campaigning hard, appearing on TV almost every day to defend Trump’s agenda and openly stating that he would accept the job. Sure, nobody in contention would say the opposite, but Hassett radiates strong ‘pick me’ energy to me. I would not be surprised at all if that was one of the reasons that keeps Trump from actually picking him.

He also does not really look the part. I turned to our trusted friend GPT 5.2 and depending on the prompt, Hassett came third or fourth out of the four candidates:

In conclusion, we have on the pro side:

• Market should rally with a Trump interest rate hack as chair.

• Is fully aligned with and loyal to the president.

On the con side:

• Questionable ability to command respect by FOMC members.

• Therefore, doubts about actual ability to forge consensus and deliver low rates.

• ‘Lightweight’ look.

• Rather aggressive campaign.

Kevin Warsh

Kevin Warsh is the other “great” Kevin that has been in contention for numerous roles in different Trump administrations and beyond. Trump has explicitly named him as one of his favorites, which seems to be the case every time Trump is picking a Fed Chair or Treasury Secretary. He has also asked people for their opinion about Warsh, a strong indicator Warsh is being seriously considered.

Warsh is in favor of lower interest rates, be it because he is ideologically aligned with Trump or simply wants the job (which I find more likely). Be that as it may, it ticks the box and I believe Warsh would be a strong advocate for lower rates, particularly if he ‘owes’ Trump his role. Unlike Hassett, he would also have the intellectual and professional gravitas to make the case, thus checking the box for being respected by others.

Trump wants rates at “1% or lower,” which I have little doubt neither Warsh nor anybody else will be able to deliver. But that doesn’t really matter, because I expect Trump to fall out of love with his candidate within the first 12 months, no matter the pick. But Warsh would no doubt be able to deliver stock market highs thanks to commanding the respect of Wall Street.

That also checks a minor box: Warsh has the backing of a powerful lobby. Jamie Dimon has more or less openly stated his preference for Warsh, as has Stanley Druckenmiller. Druckenmiller happens to be a former boss of Scott Bessent, which leads me to believe that Warsh, whose background is awfully similar to Bessent’s, is also his preferred choice.

Oh but wait, there is more! Warsh also looks the part. Trump has complimented his looks in the past and did so recently again, being “struck by his acumen and good looks.” Pretty much all LLMs agree. Warsh is ‘central casting’:

But Warsh does not have the financial prowess of Bessent, for instance. While he looks rich, Warsh has actually worked in the public sector for a good part of his life, being a former Federal Reserve governor. Only in his early 30s was Warsh in fact a banking executive.

But checking all these boxes, why has Trump not yet picked him, now or for any previous role for that matter?

For some reason, Trump is not sold on Warsh, even though he ‘looks the part’ and gets praised by Trump consistently throughout the years. Maybe Trump questions his ideological loyalty. Warsh isn’t MAGA and was nominated by George W. Bush as Fed governor. He also has somewhat of a hawkish reputation from the late 2000s. I don’t think Trump specifically knows or looks back at Warsh’s previous interest rate views, but he seems to not trust Warsh’s judgement or alignment with his own agenda. I wouldn’t know any other reason why he’s snubbed Warsh twice before.

I guess Warsh isn’t helped by the aggressive campaigning on part of his allies, which is mostly directed at undermining Hassett. Warsh isn’t as obviously frequent a guest on TV as Hassett, but he also radiates light ‘pick me’ vibes. The fact that he’s close to people in Trump’s orbit, yet hasn’t been able to get a job in two tries makes me question why Trump would pick him the third time.

So, we have on the pro side:

• Wants lower rates and will be able to deliver.

• Stock market will appreciate and respect his nomination.

• Powerful set of allies and backers.

• Straight out of ‘central casting’, confirmed by Trump.

On the con side:

• Looks richer than he is, no significant private-sector laurels.

• Questionable ideological loyalty.

• Tendency to overcampaign.

• Snubbed twice before, implies doubts by Trump that have been confirmed by hesitation to announce.

Christopher Waller

Christopher Waller has moved from early favorite to dark horse as Trump started talking more about “the two Kevins.” But he may be overlooked.

First, Waller impressed in his first interview with his knowledge of the Fed system and intellectually consistent case for lower rates. He is a Trump apointee from 2020 and dissented against the July rate hold last summer. Waller followed it up with a supposedly “strong” interview with Trump himself. Trump was reportedly impressed with Waller’s 350 pound deadlift. Waller is also a Fed insider and at least some people in the administration understand he would have the chops to forge consensus for lower rates.

Waller thus checks several boxes:

• He is the most credible low-interest candidate, both intellectually and in terms of being able to deliver.

• He commands the respect of CEOs and the market would breathe a sigh of relief with his appointment.

• He doesn’t suck up to the Trump agenda as obviously as Hassett but is a Trump apointee and has pushed policies that align with Trump’s views.

Waller is admittedly not central casting, but he certainly does ‘look the part’ of a Fed Chair. Maybe not as exciting as Warsh, but Trump has snubbed Warsh for a similar candidate before (and Waller did impress Trump with his deadlift record).

Waller has also not nearly campaigned as hard as the two favorites, probably because of his blue-collar background and because he would be genuinely not grief-stricken if he didn’t get the job.

That is also his biggest downside and the argument why he won’t get the role: he is eerily similar to Jerome Powell before Jerome Powell got appointed. Besides Powell having significantly more private-sector experience than Waller, there are not that many differences between the two:

• Powell looks like a boring Fed Chair, so does Waller.

• Powell is the ‘slow and steady’ type, so is Waller.

• Powell had a dovish reputation before being appointed, so has Waller.

The only real difference is that Powell was an Obama governor appointee, Waller is Trump’s man. There is no factual argument against Waller. Nobody opposes Waller either. He has no enemies and few doubt that he’d lower the rate at least 50-100 basis points. It’s just a matter of whether Trump would take a similar course of action like 2017, although under somewhat different circumstances.

Therefore, we have the following pros:

• Will lower rates and build consensus for it, stock market rallies.

• Respected for his knowledge and intellect.

• Ideologically close, with just the right amount of separation.

• ‘Looks the part’…but in the wrong way.

For cons:

• No private-sector experience, nothing to brag about on Trump’s part.

• ‘Boring’

• Depends on whether Trump perceives him as the ‘second Jerome Powell.’

Rick Rieder

Rick Rieder is the outsider private market candidate. He is a high-ranking BlackRock executive, which immediately checks the box for private-sector experience and impressing Trump with his financial prowess.

He has called for rates to come down to about 3%, which also checks the most important box. As BlackRock CIO, markets would surely rally on his (somewhat unsual) appointment. Rieder has been a dark horse for a while and has been quietly pushed by Bessent since a strong interview back in summer. Bessent was “impressed with Rieder’s long career in markets running large groups and his deep understanding of micro- and macro-contributors to the economy.”

He supposedly gets up at 3.30 in the morning and has a very intense work ethic, something Trump is bound to be impressed by. Rieder would no doubt be respected by others, even if I imagine the FOMC board members would take some time to adjust to him. Fox Business reported that Rieder’s outsider status was seen as a “big positive” by people in the room for his interview with Trump, which included JD Vance and Scott Bessent. In my opinion, they are the most likely to fit this description.

I’m more unsure about the ideological alignment and whether Rieder would bow, or be able to be bent, in a way that appeases Trump. He’s already pointed out the Chair’s constituents are the American people, which is exactly what Powell says. Rieder also comes from years of working at the highest level at BlackRock and will not be bossed around by Trump, I’d imagine. That smells a lot like too many cooks in the kitchen to me.

I also question whether Rieder really wants the job. I was initially very bullish on his chances thanks to his unusual profile. But given the intensity Rieder is used to, Fed Chair feels like a step out of C-suite and into the Executive Board. It would no doubt come with a lighter workload since I doubt Powell gets up before sunrise. If Trump hadn’t as openly signaled that the next Chair will get bullied as relentlessly as Powell, I may be more open. But something tells me Rieder will be flattered but ultimately won’t want to join.

As far as ‘central casting’ is concerned, GPT agrees that Rieder is a killer but for another role:

Thus, we have as pros:

• Stock market would boom.

• Well-respected by everyone thanks to immense private-sector experience.

• Knows when to lower the rate and by how much.

And as cons:

• Unlikely to be ideologically aligned or willing to bow to Trump.

• Looks like hedge fund killer, not Fed Chair.

• Might actually undercampaign and not want it enough.

Could someone else still take it? Sure, I don’t exclude it. The fact that Trump hasn’t picked anyone after months of deliberation indicates he is not all-in on any candidate. But I find it highly unlikely, given the effort Bessent has put in. It would also be somewhat disrespectful towards him and Trump himself has consistently praised the “great” candidates (but then again, he always does that).

With that in mind, opportunity makes the thief as they say, so we have to look at the factors influencing the timing and selection of the candidate.

The four factors influencing the timing of the announcement

The DOJ investigation

The most impactful factor was introduced just at the start of this week: the DOJ investigation of Jerome Powell.

Trump has been trying to remove Powell for presumed cost overruns of the Fed’s headquarters for a while. The DOJ opened an investigation into this, which reportedly pissed off Scott Bessent. Who and for what reason started the investigation is secondary for the purposes of nominating the new Chair. What matters is that Powell has said no más and perceives it as a political maneuver and an attack on Fed independence.

As a result, the market is now wondering whether Powell will retire from the Fed board as is customary for a Chair. Powell could stay on the board, but only two Chairs have ever done that before. And that would matter because it would be open defiance of the norm and a clear signal to Trump that Powell worries about the institution’s independence. The market may or may not be confused and start pricing in a ‘shadow Chair Powell.’

I don’t believe Powell will stay on the board after the new Chair has been confirmed. Yes, the institution’s independence matters to him. But Powell is neither a career public servant, nor an economist that could not level up from a Fed position. He had different stints working in the private sector and is a lawyer by trade. He will have worked 14 years at the Fed in May and is 72 years old. Does he really need Donald Trump shouting at him some more on Truth Social?

Moreover, no matter which candidate gets confirmed, it will signal to Powell that his work is done. Either it’s an ‘institutionalist’ like Waller or Warsh — in that case Powell can reasonably hope for Fed independence and would not want to stand in the way of the new Chair anyway. Or it is the perceived ‘White House mole’ Hassett. In that case, if Hassett indeed gets confirmed by the Senate, it would signal to Powell that the Senate is comfortable with this candidate and entrusts him with Fed independence. Who is he to question that? There is no point in Jerome Powell cosplaying Don Quijote if the Senate confirms Kevin Hassett. One man cannot save Fed independence anyway. It’s a team effort.

That’s why the chances of Powell leaving are now significantly undervalued (and I am bidding for shares). But even more relevant: Trump may be unsure of this and the Senate will put pressure on him to nominate a ‘palatable’ candidate.

The Senate confirmation

Which gets us to the second point, the Senate confirmation. I did not really factor this in before the investigation. My base case was that the Senate is full of lapdogs, who confirmed all previous dubious Trump candidates as well. No reason to doubt Fed Chair would be different.

But with Powell potentially holding up his post as collateral — Powell has never actually commented on what he’ll do — Republican senator Tom Tillis has vowed to block any candidate before the investigation isn’t closed. Which means either the DOJ has to drop the investigation or the next candidate cannot pass the hearing in the Senate Banking Committee (sort of a vetting before the actual vote). Tillis’ vote would set up a stalemate and seriously complicate the confirmation, though it would still be possible. What’s more, Tillis is even on record saying that a candidate with an independent reputation “would address a lot of the concerns” over Fed independence. He specifically singled out governor Waller, though I am not sure whether this helps or hurts Waller’s chances.

Either way, the result is the same: Trump is incentivized to nominate a ‘normal’ candidate, or would at least have a much harder time getting a ‘lackey’ confirmed.

The Lisa Cook case

This is compounded by the third factor: the Lisa Cook investigation. In short, Lisa Cook is another person on the Fed board Trump tried to remove. But the case against her has been rejected by the courts and is now pending a Supreme Court hearing on January 21. There won’t be a ruling yet, but the arguments heard will indicate how the wind blows.

If SCOTUS rules against Trump, this is one fewer seat of the 12 on the Fed board seeded by the administration (since Cook is a dove but a Biden appointee). It would mean Trump is still stuck at three friendly board members, or four if Powell steps down. Consequently, winning the Cook case incentivizes more risk-taking with the nomination. Both because it ‘unlocks’ a seat and because it would unlock another potential court case against Powell, bringing the tally to five. Losing the case means picking a ‘normal’ nominee is the safer play to retire Powell.

The Midterm elections

My final minor, but not unimportant factor: the Midterms.

The big narrative will be affordability and how well the Trump economy works for Main Street. Sure, data center spending boosts GDP numbers, but you can’t eat graphics cards. The economy is working great for the top 10 percent. But income growth was weak in 2025 and consumer credit may become a problem. Trump knows this and has leaned into populist ideas like capping credit card interest rates and borrowing housing policies from Kamala Harris’ agenda.

How does this matter for Fed Chair?

Well, appointing yet another hedge fund manager may or may not send the wrong signal. But how about appointing someone that…gets it?

My conclusion and predictions what will happen

I see one crystal-clear value play: Fed governor Christopher Waller.

He checks enough candidate boxes to be close to favorite status. In fact, he was the favorite back in August before Trump started running his mouth about Kevin Hassett. But he also checks the circumstantial boxes:

• Will let Powell allow to ride off into the sunset? Check.

• Will get confirmed by all Republican senators? Check.

• Can be credibly presented as the blue-collar people’s Fed Chair? Check.

Christopher Waller is the “blue collar governor” Donald Trump needs to stand a chance in the midterms. It is quite telling what the interviews with Trump were focused on. He reportedly discussed the labor market with Waller, while talking about Fed profitability and monetary policy stability with Rieder. After the interview with Waller, Trump gave a speech on the economy, saying he would nominate “someone who believes in lower interest rates by a lot, and mortgage payments will be coming down even further.” Guess who talks to homebuilders: Christopher Waller.

Oh but wait, there is more! Just look at how Waller appointed:

I hear and read that Waller is boring and yea, he is not a prime time entertainer. But for an economist, he comes across as pretty likeable and a good talker. Waller is supposedly an MMA fan, as is Trump. Trump was “impressed” by his deadlift. To me these details scream that Trump gets along well with him. Waller’s problem is that he is not around Trump day in day out as is Hassett. But I’m very confident Trump likes Waller’s personality more than Warsh’s.

My fair value pricing:

• Hassett: 10-15%

• Warsh: 35-40%

• Waller: 30-35%

• Rieder: 8-12%

• Field: 0-1%

This makes Waller a clear value play and one that I have very high conviction in:

I don’t know if Waller will win. But he makes the most sense from every angle I look at and is trading at an insanely low price. I hedged a little bit with a few Warsh shares, but Waller is by far and my biggest bag. Even if I lose, I would take this shot in this situation every single time. When you’re really confident, go balls deep.

I predict the following: Trump was all but ready to announce Hassett against the better judgement of everyone else around the end of January. I can’t tell what Trump sees in him since Hassett does not fit his usual candidate profile a lot. But in my opinion, he is ‘traumatized’ by picking Powell on “bad advice.”

Then the DOJ intercepted his endzone pass and now Hassett is a serious doubt to be confirmed. Trump doesn’t trust Jamie Dimon’s favorite Kevin Warsh. For another piece of evidence, see what he had to say about Jamie Dimon’s Fed opinions:

Rieder doesn’t fit, even though Trump likes him and is impressed by him. Hassett is a heavy lift in the Senate and better used as a talking head on CNBC, something Trump himself seems to be realizing.

This only leaves the smallest common denominator. The guy nobody has a problem with. The Trump appointee. The guy Powell would definitely step down from the board for. The blue-collar governor: Christopher J. Waller.

The announcement will come in February.

What’s next?

The next deep dive will be probably on Iran. Or on Greenland. Those are the next two before we can hopefully move on to some mental models and frameworks. It’s been a crazy month, so subscribe:

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Good luck and I’ll see you in the next one!

To be more precise, Maduro was kidnapped to join Diddy, Luigi Mangione, Ghislaine Maxwell, El Chapo, and R.Kelly in the Brooklyn Metropolitan Correctional Center.

But what’s going to happen to Venezuela now that the US “runs” it?

That and a lot more is what I’ll analyze in this piece:

• How Trump ousted Maduro: a recap of the last two months

• Venezuela in January 2026: decoding acting president Delcy Rodríguez

• Donald Trump’s (lack of a) Venezuela strategy

• The role of oil: a pot of gold at the end of the rainbow?

• The risks to Trump’s grand ideas

• My conclusion and predictions what will happen

The TLDR: Trump’s daredevil strike has created a new equilibrium that’s structurally unstable but should hold for a while. It’s in everyone’s best interest to play nice for now, but long-term incentives point to this being a fragile peace.

How Trump ousted Maduro: a recap of the last three months

In my first Venezuela deep dive in November, I wrote:

This analysis was spot on and played out perfectly.

The Wall Street Journal reported that Trump decided in December in favor of military action. Did Maduro’s dancing videos really tip the scales as word on social media has it? They were at least annoying enough for Trump to “privately express frustration.”

According to Axios, Plan A was for a long time to get Maduro to step down voluntarily. Trump reportedly even spoke to Maduro one week before the attack and almost greenlit the strike before the new year, but bad weather prevented it.

I was wrong with regards to the timing or the nature of the escalation. In November, I expected a limited escalation in the near future, and one that would be approved only if it was virtually guaranteed to suceed in the eyes of the public:

Quite the opposite, Trump approved a high-risk high-reward mission that could have easily gone wrong, regardless of whether Maduro was betrayed by allies or not. The NY Times detailed how one of the helicopter pilots was struck in the leg three times but still managed to land.

One of the main motivators was, as I predicted, Trump’s “fixation on the country’s resources.” Another was “Rubio's longtime antagonism toward Venezuela and its ally Cuba.” This comes as no surprise to anyone that’s been following the administration and their Venezuela policy. Here’s what I wrote about the role of Rubio in November:

CNN reported that Rubio’s antipathy for Maduro stems from the “roots in his personal and political upbringing in South Florida.” No surprise there, unlike with the role of homeland security advisor Stephen Miller, who apparently was just as involved and “much more inclined to bomb” than Rubio. Well, maybe not all that surprising considering that Stephen Miller in 2003 advocated for torturing Saddam Hussein since that is a “celebration of human life and dignity.”

A prediction I got wrong was the role of Maria Corina Machado. In November, I had anticipated she’d become key to a transition:

But apparently neither Trump nor Rubio seem convinced by the support she claims to have within Venezuela and have sidelined her for the time being. Machado is coming to the US in a few days to give Trump her Nobel Peace Prize for the “eight and a quarter” wars he “stopped.”

Initially, I was expecting Machado to make a swift return to the country, but odds on that collapsed. Her Fox interview saying she would return “as quickly as possible” did not sound all that convincing. However, now that the regime announced it would free a number of rather high-level political prisoners, I think a return in the next few months could be on the table again. I’ll be eyeing Q1 strikes if price dips back below 50%.

A final prediction that I was both right and wrong on was Maduro’s source of power. I wrote the following:

I was right on Maduro depending on his cronies for power and Maduro ending up like Assad if there is uncovered dissent. But I was wrong about there seemingly being no dissent. Whether this dissent came in the form of betrayal, as Belarussian president Lukashenko implies, or was just opportunism, we may find out down the road.

For now, it’s worth examining the person at the core of this unexpected transition of power.

Venezuela in January 2026: decoding acting president Delcy Rodríguez

Who is Delcy Rodríguez?

Delcy Rodríguez is the daughter of Jorge Antonio Rodríguez, a leader of the Revolutionary Left Movement and kidnapper of a US executive in the 1970s. Her father died in captivity in connection to torture by security forces by the pro-U.S. Venezuelan government at the time. Delcy reportedly developed lifelong asthma after being teargassed while visiting her father in prison.

Nonetheless, she later learned English and French during her education in Europe and became a part of the Chávez regime. She got sidelined after a fallout with Chávez, but Maduro revived her career and she rose through the ranks to become Minister of Finance and Economy and eventually Maduro’s VP.

Across all the reporting I have read, she is described as a competent and pragmatic technocrat, albeit one with a staunch Marxist background that is almost certainly the result of childhood trauma:

• The FT writes how she “impressed executives with her pragmatism and grasp of detail when she led talks with international oil companies” during the Biden administration. One former senior US official reportedly got the impression that she considers herself “part of a revolutionary family that had made the ultimate sacrifice for the greater good,” judging by a story she told about her father’s death.

• The NYT writes how one of her advisers praised her “work ethic and openness to technical assistance”. Other businessmen were impressed by her “eloquence and wit” and noted how she was “always impeccably dressed” and a rather charming conversation partner.

• But she also awarded oil contracts to cronies that circumvented sanctions and enriched people with a close relationship to some of her advisors.

She has no kids and has never married, having dedicated her life to work. To me, this reads like the profile of a person that is willing to work across ideological fault lines — but not at the expense of sacrificing her core values and beliefs, which are the result of a deep-rooted childhood trauma.

The first part played no doubt no small role in her getting the nod by the US to take over after Maduro…

Delcy Rodríguez’ position and limitations

In a rather unsurprising reversal of fortunes, Donald Trump did not dismantle the deep state in his second term — he made it his own.

How else would you explain Trump listening to CIA intelligence that Delcy Rodríguez is the best person to lead a transition? It meant Trump’s own Director of National Intelligence Tulsi Gabbard became the latest winner of the coveted ‘fell for it again’ award.

Reportedly, (and correctly), Trump was still convinced that stability in Venezuela hinges on keeping the support of Venezuela’s elites and security forces. According to an investor cited by the FT, the transition has been being built around Delcy for a while. So even though the administration “doesn’t see her being a lapdog”, her pragmatic approach means she has tentative support.

On the other hand, the CIA came to the conclusion that the other two powerful figures, interior minister Diosdado Cabello and defense minister Vladimir Padrino López are hard-liners, both wanted by the US government, and probably not as cooperative and amenable to US proposals.

Delcy was the right person at the right time:

• Just pragmatic enough to be at least worth a shot.

• A Marxist, but one that’s a “boligarch” enriching herself and enjoying the finer things in life, which gives the US leverage over her private assets.

• Not wanted and as former oil minister knowledgeable about and familiar with the assets the US wants to control.

However, Delcy will have to try to square the circle and keep everyone happy and distracted if she wants to survive, both metaphorically and literally.

For Trump, democracy is “not a concern”, which facilitates things. But oil is very much a concern. In fact it is the concern and will require changes to regulations to the domestic oil industry, which was gutted under Hugo Chávez. According to Cesar Mata, an energy consultant that has advised Venezuela on oil policy:

I will talk about the “oil situation” in depth further below, but safe to say that shaking up a deeply corrupt and entrenched industry at virtual gunpoint is not a task I would want to take on.

And Delcy Rodríguez will have to do it without the assistance of the Cubans. According to a Western diplomat cited by The Economist, she is irritated by the Cubans and what she seemingly perceives to be ingratitude about Venezuelan oil keeping their economy (barely) alive. This may score her brownie points with Marco Rubio, the de-facto viceroy of Venezuela. But it might become problematic with regards to her internal opponents.

But what’s even more interesting is the fact that Cuban intelligence, whose 32 officers were literally the only ones standing between US special forces and Maduro, couldn’t prevent the US takeover of Venezuela. As Michael Weiss writes:

My impression is that Delcy will find herself dancing with several man pointing guns at her feet. How long can this work?

What to expect from Delcy Rodríguez

Delcy will need to keep a lid on the “unstable pit of vipers” at home. But at the same time, she will need to comply with the demands of the extortionist Donald Trump:

• Cracking down on drug flows.

• Kicking out Iranian, Cuban and other operatives of countries or networks hostile to Washington.

• Stopping the sale of oil to US adversaries.

And all of that for the grand prize of being granted amnesty and eventually facilitating a democratic transition. That doesn’t sound too appealing. But then again, “if she doesn’t do what’s right, she is going to pay a very big price, probably bigger than Maduro.”

The US vision seems to be a replay of the sanctions removal-for-compliance mechanism that was tried with Iran. Visualpolitik published an excellent video on this, of which I summarized the main points:

• Delcy needs oil revenue to survive.

• The US controls whether that revenue flows.

• Each reform earns partial sanctions relief.

• Non-compliance risks renewed pressure or worse.

But lest you forget, Delcy can’t — and more importantly most likely doesn’t want to — turn Venezuela into a US satellite or puppet government. In that sense, I agree with the assessment of a Caracas-based analyst cited by the NYT that the Americans may underestimate the remaining ideological motivation and resolve.

In conclusion, I expect it all goes well for a while — a while being anywhere between weeks and possibly up to a year or two. Based on publicly available sources, it doesn’t seem like the US is in a hurry with a democratic transition. And nobody in Caracas should have an incentive to poke the hornet’s nest right away, because it would embolden Trump to double down and strike again. The potential ensuing chaos might disincentivize US boots on the ground, but it would probably only harden the US sea blockade.

With all the US military assets in the region, I think manipulation and deceit is a superior strategy if you’re a Venezolan would-be autocrat, as opposed to confronting the US outright. But at the latest when it’s time to relinquish power, and most likely beforehand, the knives will come out. Given their ideological background, I would imagine not all of Maduro’s potential successors would just sail off into exile.

And I’m not so sure the Trump administration really has a plan for when that day comes…

Donald Trump’s (lack of a) Venezuela strategy

Those were the words of House majority leader Mike Johnson after being briefed about the administration's plans in Venezuela. How inconvenient that the President told NBC News that he initially anticipated having to put boots on the ground and is prepared to do it. Because that is obviously the only logical course of action to credibly back your threat of ‘give us the oil or else.’

Isolationists who fell for it again can’t be happy about Trump enthusiastically applying his new “strike and coerce strategy” to threaten and extract resources from other countries. In Trump’s mind, America First is what makes ‘America great again’. If that requires repackaging neocon-like foreign policy — no problem!

True, Trump has yet to put boots on the ground in any of the countries he’s hit. But, in the words of Stephen Wertheim of the Carnegie Endowment for International Peace, Trump is "taking an overtaxed military and finding new ways to spread it even thinner." Small wonder he wants to increase the military budget for 2027 by a cool 50% to $1.5 trillion. Paid for by tariffs, of course.

For the purposes of Venezuela this means that Trump considers the ‘difficult part’ of the job done. He told the NYT that the US will stay “much longer” than a year there. After all, the US will be “using oil and […] taking oil” as part of its “very profitable” rebuild of Venezuela. Any roadbumps can be proverbially flattened by the US military, so in Trump’s mind there is no way the interim government would not want to participate in this scheme.

The fact that there’s no day-to-day plan, as reported by The Telegraph’s sources is a feature not a bug. “Pull the trigger and then figure out how it works” has been Trump’s well-documented Modus Operandi for years, so I find it entirely plausible and highly likely Venezuela policy follows this approach.

Trump’s objectives are only in part ‘SMART’. We could call removing operatives from hostile countries and significantly raising Venezuela’s oil output — possibly but not necessarily to be sold mostly to the US — realistic and achievable. I wouldn’t call them specific and definitely not measurable or timely. But I also wouldn’t expect that from the guy who deployed the US military to kidnap a dictator that was mocking him with dances.

In any case, Trump will have mentally moved on from Venezuela after meeting Maria Corina Machado and Delcy Rodríguez in Washington. The actual work will fall to his project manager: Marco Rubio.

Deploying Marco Rubio as viceroy of Venezuela

Marco Rubio’s “moment” has arrived and he will be able and obligated to do what I predicted: successfully conduct regime change in Venezuela — and possibly Cuba — and position that as his flagship policy achievement in the run-up to the 2028 GOP nomination.

While Trump is fixated on Venezuela’s resources, Rubio in my opinion sees Venezuela as the key to freeing Cuba. And he is right about that since the political economy of the Cuba-Venezuela pact was a security and intelligence-for-oil trade. Trump announced a halt of Venezuelan oil deliveries to Cuba.

A quick Gemini search yielded that Cuba imports about a third of its oil from Venezuela and almost half from Mexico. You would expect both of these to fall drastically, de facto bringing Cuba’s already decrepit economy to a total standstill.

That’s why I think the Cuban regime is on borrowed time and will fall before the end of Trump’s turn. And that would also plausibly explain why Rubio chose Rodríguez as interim solution over Machado: forcing her at gunpoint to turn off the tap for Cuba is Rubio’s personal top priority and a lot simpler to achieve than ramping up oil production or cleaning Venezuela from foreign influence. And it’s a lot easier to do with a stable government in place, as opposed to one that is going through the machinations of an election, fighting armed militants and whatnot.

Thus, Rubio asking for “a little realism” over a transition is both correct and understandable but also politically opportune. I don’t know whether there really is “a process” in place as Rubio claims. But he does have his own ideas and motivation for as steady and stress-free a transition as possible.

Which, in turn, does not bode well for Maria Corina Machado.

How Maria Corina Machado fell for it

The beautiful thing about analyzing and interpreting Donald Trump is that he is unpredictable, yet has a simple worldview. If you’re not strong, you’re weak and if you’re not a winner, you’re a loser. Winners are strong and vice versa. The same goes for losers and the weak.

That explains everything you need to know about why he shut down Machado’s ambitions about succeeding Maduro. According to first-term Latin American policy advisor Juan Cruz:

Add to that the CIA report assessing that Machado would “struggle to gain legitimacy as leaders while facing resistance from pro-regime security services, drug-trafficking networks and political opponents”, and it’s easy to retroactively explain Trump’s actions.

Based on the reporting I read, Machado also has herself to blame. The NYT writes that she had been a source of friction. She opted to call rather than meet with Richard Grenell, Trump’s special envoy that was a dove on Venezuela and pushed a non-military solution. Her team ignored a request for a list of political prisoners and had no concrete ideas of how to put Edmundo González — the stand-in candidate that won the last election — into power. But she reportedly did disapprove of Grenell not denouncing Maduro as illegitimate president.

All of that and her decision to reject talks with the Chavista regime has prevented her from building relationships and influence in Venezuela’s elite. In short, the NYT reporting concluded that she was de facto detached from the realities of people in Venezuela and alienated the elites whose support she’d need to take power.

That means without a free and fair election she does not have any sources of power or levers to pull. According to Javier Corrales, it also means her best bet is returning home to drum up support and poke the proverbial hornet’s nest. She needs to shake up the situation and show Trump and Rubio she has the support of the people and can deliver the results they need (and maybe more).

This was also my intuition and thinking behind betting on Machado to return to Venezuela in January. But after she told Fox that she’d return “as soon as possible”, I cooled somewhat and took a loss. It didn’t sound as specific or enthusiastic as I would have liked and is just the type of cookie-cutter statement that could mean this month or next year. However, she is visiting Washington in a few days and could travel onwards to Venezuela from there.

My intuition says that Rubio will advise against doing that. At this point, Machado can only create trouble in Venezuela and that’s the last thing Rubio needs. He can’t prevent her from doing that, but she is already reliant on the administration’s approval as her borrowed source of power. Acting against their wishes won’t improve her prospects, so I think she’ll opt to stay in Florida and build relationships with the diaspora there. She is also a middle-aged woman and mother of three and does not have a track record of daredevil actions like Alexey Navalny did before returning to Russia to get himself arrested.

I can absolutely see her getting frustrated and eventually opting to return without the explicit approval of Rubio. This will largely be a function of two things: first, how many relationships she can build and how quickly. Second, how calm the politicial situation in Venezuela remains and whether political prisoners actually get released or that’s just another policy that’s announced and never enacted.

But before we can talk about the chances of success of this whole endeavor, we have to address the elephant in the room: is this another oil-driven regime change?

The role of oil: a pot of gold at the end of the rainbow?

Those of us who are old enough to remember the US invasion of Iraq in 2003 will be tempted to make an obvious comparison: it’s the oil, stupid!

Slovenia’s Objektiv magazine came to this conclusion when picking its latest cover, which depicts a Trump portrait with crude oil resembling a Hitler moustache.

But ironically, the US 2026 is an entirely different hydrocarbons beast than the US in 2003 at the time of the Iraq invasion, let alone oil-free Nazi Germany. Over the past 23 years, the US has upped its crude production from 5.7 million barrels per day to 13.5 million barrels per day, making it a net exporter rather than a net importer.

So, why is Trump so fixated on Venezuela’s oil reserves?

Because remember, Trump is volatile but operates according to simple mental models. One of those is there is no such thing as bad publicity. Donald Trump is eager to be appreciated, which explains his obsession with awards like the Nobel Peace Prize or putting his name on things, such as the “Trump-Kennedy Center.” It also includes daring actions, such as kidnapping dictators or bombing foreign nuclear facilities.

Bringing the world’s largest oil reserves under US control combines the best of both worlds: nobody’s done it before Trump, much less in such a daring manner. This gives Trump his very own “oil empire” and the US-controlled Western hemisphere about 40% of global crude production and 20% of global crude reserves:

The only issue with that: how do you increase Venezuelan crude production — and do you even want to?

Venezuela currently produces 1 million barrels per day, give or take 100,000 depending on which source you cite. 85% of exports go to China and most of the rest to the US, with a tiny sliver going to Cuba. Or at least that was the case thus far.

Bloomberg’s Javier Blas, a go-to source for energy and commodities, estimates that in the most optimistic scenario, 300,000-500,000 bpd can be brought online in the next 18 months. It would be way off the country’s peak production of 3.7 million bpd in the early 70s, but a three-fold increase from the bottom around the start of the decade.

To unlock all of Venezuela’s reserves would take about $120-$180 billion until 2040, according to consulting firm Rystad. This echoes the magical minimum threshold of $100 billion Trump has touted as required investment in Venezuela. The government would provide “protection” but no financing.

It also breaks down to about $8-$12 billion per year, roughly the same minimum amount needed to up production to Blas’ target of 1.5 million bpd by mid-2027, according to a Chevron executive. The only problem with that: oil executives are not falling over themselves to invest.

Trump, who’s never been shy to bankrupt a company a start anew, told the executives they could harvest tax losses with their seized assets, to which another CEO replied they’d already done so. Chevron, the only US company currently operating in Venezuela, is reportedly already seeking $2 billion. Other companies are understandably more cautious, considering they’re still owed money by Venezuela and Trump effectively is saying ‘those were Biden’s expropriations’.

Annual capex of $8-$12 billion would be feasible as part of a consortium or joint venture. ExxonMobil, Chevron, and Shell have a $15 to $25 billion annual capex. All that’s needed are…incentives.

According to Javier Blas, Venezuelan oil breaks into two categories: easy or hard to extract.

The easy-to-extract stuff is located around Lake Maracaibo in western Venezuela and the Monagas basin in the east. The hard-to-extract crude is in the Orinoco belt in the southeast. Current production splits almost 50:50, but output for the higher-quality oil has dropped by over 1 million barrels in a decade. The lower-quality oil is apparently “viscous […] like marmalade and needs to be diluted with petrochemicals.”

The low-hanging fruit would come from the easier-to-extract fields, but further boosting output will be more challenging. Based on his experience with previous cases of countries with big reserves and a history of plummeting crude production, Blas predicts that Venezuela will “surprise positively in the short term, and negatively in the long run.”

That sounds plausible to me, especially considering the incentives of US oil companies. In my last deep dive, I wondered whether US shale is all that interested in developing Venezuela’s oil industry. Judging the initial reaction, my intuition may prove right. While Trump wants to pump oil output, US shale has an average breakeven price of $41 for existing wells and $65 for new wells. Plus, in the words of Dan Pickering, chief investment officer at Pickering Energy Partners, “if you go into Venezuela you need protection from the Venezuelans and from a different US administration.”

That means there’s a misalignment of incentives between Trump and oil executives. Trump wants to flush the market with oil for his personal and geopolitical ambitions. Oil executives are wary of the financial risks, having been burned before, and don’t want to cannibalize existing business. In the middle of the two is the interim government, which will surely look to exploit this overlooked wedge.

This solidifies my assessment that things may go well at first but cannot work out under the current framework for structural reasons. And we haven’t even talked about the actual risks yet…

The risks to Trump’s grand ideas

Who would have thought it’s so easy to change people’s minds on what ‘America First’ means? All it takes is one successful daredevil regime decapitation strike and you have the staunchest isolationists on board.

I will break down the risks to Trump’s Venezuela adventure into three points: potential backlash from MAGA, US public opinion, and the threat of internal instability in Venezuela.

The potential MAGA backlash

MAGA hasn’t been impressed but has mostly kept its contenance over how Venezuela has been going so far. Steve Bannon was mildly critical, Candace Owens furious as usual, and Marjorie Taylor Greene pointed out how this only “serves the big corporations, the banks and the oil executives.” Which, as I made the case, may or may not be true.

But since the mission is yet to be derailed, the majority of MAGA has been doing the proverbial ‘NPC chip meme’ and found several explanations why Venezuela is, in fact, good and necessary:

• The operation was law enforcement and not a military strike or regime change. The regime hasn’t really changed anyways and justice was delivered.

• According to the ‘Donroe Doctrine’, the Western hemisphere is to be controlled by the US, making military interventions legitimate.

• Even if it was regime change — which, as we noted, is still to be determined — it was regime change done the right way. No boots on the ground, badass optics, a total success.

• Since ‘might makes right,’ the US can and should boss around smaller countries, all the more so if they’re dictatorships like Venezuela. After all, “international law is fake and gay.”

I have not much to add here beyond let’s see how this ages. People love a winner and history is written by the same. MAGA will not make or break the Venezuela mission but amplify how its outcome will be perceived.

The role of US public opinion

Public opinion in the US is another testament to ‘people love a winner.’ The net approval for the military intervention went from -26 before the mission to a virtual tie afterwards. The split across party lines is what you’d expect with strong approval by Republicans, the opposite by Democrats, and Independents leaning slightly towards disapproval (-8).

What’s more interesting though: Maduro being tried for drug trafficking enjoys strong approval (+36), but the US taking control of Venezuela and choosing a new government is the opposite (-21). 63% also think Trump should have sought congressional approval for the mission.

The most fascinating data point: the capture of Panama’s Manuel Noriega in 1989 was vastly more popular (+65).

Polymarket has Maduro to not serve any prison time at 23%, which I find too high. Considering there is a precedent with Noriega, whose head-of-state immunity defense failed, I find it hard to believe the outcome for Maduro will be different. I would put the chances of this at below 10% and would not expect the jury to be unbiased, regardless of the precedent.

In any case, public opinion will likely also be driven by the perceived success of this endeavor. If Venezuela fades from the headlines, the public will likely forget about it since this was largely a pet peeve of Trump and Rubio. If something goes wrong though, the public will come down hard on Trump.

And whether something goes wrong seems to depend to a good degree on one man…

Possible unrest in Venezuela: the role of Diosdado Cabello

Diosdado Cabello is Venezuela’s minister of the interior and a long-time friend and ally of Hugo Chávez. The two became friends during their time on a baseball team in their military academy days. Cabello has good reason to dislike the gringos. In 2002, the US quietly supported a (failed) putsch against Chávez, which briefly made him head of state. He missed out again in 2013, when Maduro won Chávez approval as successor. But he still wields a lot of power and instills fear as commander of the country’s colectivos, armed motorcycle gangs that patrol the city as quasi-militias.

In other words, Cabello commands the guys with guns and has the reputation of a thug, a brilliant combination for a troublemaker. He wields influence over people that Delcy does not and since these people happen to be armed and likely not law-abiding, he is considered the biggest threat to any sort of calm transition.

The colectivos are already enforcing repression and searching for supporters of the US coup. I agree with this take that this is probably not going to end well:

Cabello’s “red lines” are reportedly “any kind of political opening,” which directionally contradicts the approach Delcy will have to take. He is also wanted for $25 million by the US government but is reportedly not interested in making a deal. Blowing him up by a drone seems an appealing prospect but risks setting the colectivo powder keg on fire, unless their loyalty could somehow be transferred. The US has warned its citizens to leave now that international flights have resumed, which is testament to how stable the situation is.

I’m not sure how the situation will unfold, but I agree with this assessment that both the US and Delcy have an interest in making Cabello disappear. That makes it likely to happen sooner or later, the question is when and how and what consequences it will have…

My conclusion and predictions what will happen

James Bosworth’s brilliant and highly recommend Substack had this insightful matrix before Maduro’s ‘sudden departure’, breaking down the country’s options from ‘miracle democracy’ to ‘violent chaos’.

I paid for his Substack so you don’t have to in order to see the latest matrix. Venezuela’s scenarios now range from de facto occupation over becoming an ally to war or a consolidated dictatorship.

My personal opinion is that we’re in de facto occupation mode right now and will be for a while. A while could be anywhere between weeks and one to two years, which is how long I would expect the Cuban regime to last at best. For the moment, every player has an incentive to play nice:

• Trump wants to see oil flow and no boots on the ground.

• Rubio wants to see the Cuban regime out, which is simplest to achieve by coercing the existing government, who in turn keeps the internal situation stable.

• Delcy Rodríguez wants to stay in power and stay alive and ideally stay in possession of her presumed stash of wealth in Qatar.

• Maria Corina Machado wants to get into power but needs to stay on good terms with Rubio to help her with that.

• Diosdado Cabello wants Delcy out of power and get back at the gringos but needs to stay alive to achieve any of those.

This is obviously a massive simplification, and there are other factors and players I have not talked about. But by and large, in the very short run, everyone is best served with the status quo, which I’d expect to hold for a few weeks to months. Hence why I’m bullish on Delcy’s chances to remain in power until further notice:

What would have an impact on my thesis:

• Unrest in Venezuela, potentially fostered by Diosdado, would likely dip these odds. I would buy more in that case.

• Delcy showing she is not complying with US demands. Doesn’t look likely at the moment but will become a problem down the line since interests and motivations are not aligned.

• Machado returning to Venezuela in the near term would probably also dip her odds. I would probably decide on the fly based on how other players react to such a development.

I’m not sure Delcy actually sees the end of this year as president, but I do think the odds will first float higher before going lower. I would imagine Machado would make a swift return if Cabello gets taken out and no chaos ensues. It would put the administration in a seriously awkward position and give her leverage if she built good relationships beforehand.

US strikes or invasion markets look like good long-term hedges to me. The situation is structurally unstable and will remain so for as long as the regime is in power. Mafia tactics only work if you’re willing to behave like the mafia. Trump has shown he is, so I’d be surprised if we’ve seen the last of it for this year.

What’s next?

My next deep dives will be about the incoming Fed Chair and the uprising in Iran. Order is yet to be determined. Subscribe to not miss either:

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Good luck and I’ll see you in the next one!

After reviewing 2025, it’s time to look ahead to 2026. And I’m pretty sure it will not be boring at all!

I’ll make 10 predictions — most rather unspectacular and not too edgy — concerning markets that I’m either already involved in or will be tracking next year.

Each prediction has my ballpark fair value, and I ventured into markets I consider myself clueless about just as a challenge and to spice it up a bit. In some of these, I have already taken positions, in some others I amy still take some.

Let’s see what 2026 has in store…

Trump strikes Venezuela but Nicolás Maduro hangs in there

I’m on the record with a wrong prediction (so far) that the US will strike Venezuela:

They technically did strike, only it was carried out by the CIA, not the military. Trump has so far backed off open military conflict with Venezuela. He instead opted to try to smoke out Maduro by choking off oil export revenue and covert ops sabotage. That is clearly not going to be enough. Maduro has called Trump’s bluff.

I’m sticking with my original analysis, which is due an update soon. I still think the US will engage in kinetic strikes that ultimately resolve such a market to Yes on . I expect this to happen in Q1 or Q2. If it hasn’t happened by then, I don’t expect it to happen in the back half of the year, considering the upcoming Midterms. They should put a lid on any audacious foreign policy moves, which Trump anyway does not really engage in.

I don’t think these strikes will be enough to oust Maduro though. The current policy seems to at least be achieving the objective of squeezing Cuba — something Marco Rubio will be keen on. My impression from publicly available sources is that Maduro is keen to hang on to power. At the same time, I’m not sure his grip on power is that strong. A revenue squeeze and possible increase in Venezuela’s inflation rate won’t strengthen it. Maduro could easily do an Assad if only there was physical force testing his support among the military’s rank and file.

As long as that does not happen, I have a hard time seeing him quietly sailing off to foreign shores. Fair price is imo low 70s for Maduro to remain in power in 2026.

The war in Ukraine continues (but will end in 2027)

My favorite market will surely be the most popular geopolitical market of 2026.

To absolutely nobody’s surprise (at least nobody with an ounce of understanding of the war), Trump did not have it settled on day 1 or any other day. He did manage to bend Ukraine much more towards Russia’s position, but the gap remains sizeable, albeit much smaller than nine months ago.

Everything I wrote about in my last deep dive thus still stands:

There is a way how Trump can have the war settled in 2026 — if a dirty peace deal becomes more advantageous to Zelensky than continuing the war. I may write a note about this soon. But Zelensky domestically and Ukraine as a whole are battled and bruised yet still standing.

I do not expect Russia to gain enough ground in Donbas to force Zelensky into such a deal, though I absolutely don’t exclude it. Russia would have to come close enough to Sloviansk and Kramatorsk to make a military retreat (and the subsequent legal hoops to ratify such a move) from these cities look less like obvious high treason. I’m not sure this will be the case.

However, the opposite is equally possible — Russia making quicker-than-expected progress and upping demands when Zelensky is ready to agree. And security guarantees remain as elusive as ever.

Still, I do think it will be an eventful year for Zelensky and Ukraine, and the end of the war will come in real striking distance. Zelensky’s weakening domestic grip on power and increased exernal pressure by the Europeans will set the stage for an end in 2027. Just check the European election schedule.

Fair price here is in the 20s on Yes, but I think playing monthly strikes on No and stepping in on headline pumps is the way to go if you want to fade the end. Beware though: this is much less of a bond than in 2025.

Ayatollah Khamenei ceases to be the Supreme Leader of the Islamic Republic of Iran

I came up with this idea before the latest protests that broke out in Iran. The Middle East remains my nemesis, so my conviction here isn’t too high.

But there are several obvious risks for the Ayatollah:

• He is 86 and disappeared after Israel’s short-lived war in 2025, reminding everyone that old people die sooner or later.

• Bibi still wants regime change in Iran.

• Their economy is still a ‘total mess’.

It’s a bit of a lazy prediction, and I think the current odds reflect the accurate price (probably) quite well. Predicting when autocrats fall is like predicting earthquakes: nothing ever happens before eventually someone just does things. I added this mainly because I was looking for a tenth prediction and because it seems well within the realm of possibility, while still being an underdog.

Christopher Waller or Rick Rieder becomes the new Fed Chair

The new Fed Chair will be Donald Trump’s most consequential domestic policy decision. And looking at his cuisine track record of serving taco (tariffs) after taco (firing Powell) after taco (striking Venezuela), would you really want to bet against another taco?

I laid out some of my thinking in my Fed deep dive a couple of months ago:

I might do another update to this in January, but at least the ‘Trump will take his sweet time’ part of my prediction has aged well. I expect Trump to announce his pick between January 15 and February 15. Most likely the last week of January or the first week of February, around the time the rate hold becomes clear.

I also think whom he will pick will remain largely a function of whose judgement he trusts most (and talks to last before truthing it). The market has correctly soured quite a bit on Hassett. Betting against Hassett is the taco trade since Trump is the only person that wants him and would have to own the choice. However, I do think he really wants Hassett and is really pissed about having picked “numbskull” Jerome Powell last time. He may not want to repeat the same failure. As we saw with tariffs, Trump is open to hazardous moves in this term.

There’s no taco on a nomination though, so Hassett as first among equals looks kind of fairly priced at the moment. I am not sold on Warsh for different reasons, but I do think Christopher Waller and Rick Rieder are wildly underrated by the market. In my opinion, their combined chances should exceed Warsh’s odds, and I will probably write a deep dive on this the first week of January (if Trump doesn’t pick early).

One of the most exciting markets around right now.

The GOP gets clobbered in the Midterms but (barely) keeps the Senate

I’m not well-versed in US domestic politics and have actually never bet a Midterm election, so don’t expect too much here.

This is mostly a consensus call. The GOP and Trump are wildly unpopular (27:63 among independents in the latest poll I found), so I’d expect them to get smacked in the mouth at the next election. I don’t see the current “K-shaped economy” trend turning around anytime soon. More money for data centers, less money for plebs. That’s the trend and I’m not betting against it.

From what I know, the Senate map makes it unlikely for Democrats to take both chambers, hence a good old bet on the favorite. I might buy a bit of this in the next few days just to see how I feel about. Probably fair value at this price though.

Viktor Orban loses the election in Hungary

The election in Hungary could be the most exciting foreign election of 2026.

Viktor Orban is a good buddy of Trump, and I expect MAGA to do everything in its power to shill Orban as hard as possible and help him rig the election in his favor. Polling in Hungary is all over the place, with non-government pollsters showing Orban down by 15 points, while government pollsters show him up 15 points.

I would be shocked if Orban didn’t trade as favorite again at some point. But I do think he will lose the election and, importantly, step down. I already have some Peter Magyar shares and plan to be heavily involved in this one. Expect at least one very thorough deep dive before the election on April 30.

Fair value? Your guess is as good as mine, but for now I’d eyeball it in the high 30s for Orban to win. I plan to do extensive research in the next three months to be much more confident about my call.

The SPX outperforms BTC and gold

This is more of a wild guess in all fairness. Midterm years tend to be bad for markets, though second term midterm years are apparently better.

The SPX looks kind of toppy though and gold has had its best year in…decades? Bitcoin laughably underperformed in 2025, but I just don’t see how digital pet rock suddenly becomes appealing in 2026. The ‘debasement trade’ narrative was perfect for BTC but nobody bought. Unless 2026 is a risk-on year (which I don’t expect), BTC will struggle again. I don’t think ‘hurr durr mass adoption’ matters at all. If you want to bet on crypto, bet on stablecoin growth (which I may in fact do after some research).

Long story short: I have no clue, but I think markets will struggle in 2026. Thus, SPX should be the ‘cleanest dirty shirt’. I’m bidding a bit of this bet just to have some skin in the game.

Elon Musk becomes the world's first trillionaire

Another unexciting consensus call but hey, every little bit counts.

I have honestly no clue about this bet. I guess it’s fair value after the Space X IPO announcement? My only heuristic here is that there is no better way to bet on space than bidding the Space X IPO. And that should make Elon even richer than he already is. Maybe someone smarter and more knowledgeable than me can chime in, but I’d be surprised if it did not turn out to be a success.

Spain wins the FIFA World Cup 2026

Two more sports predictions to cap it off.

Predicting the favorite to win isn’t terribly exciting, but Spain has the best team in what will probably be a physically demanding and long tournament. The path isn’t all that easy:

• R16: Portugal

• QF: Netherlands

• SF: France

• Final: Argentina/England

But then again, I don’t see any other team with a significantly easier path (and I’m not picking England). If Spain gets past Portugal, who I think have a terrific squad at the moment, I see them going all the way. Otherwise, Portugal becomes my backup pick.

On the other side, I would pick England to make the final because hey, they have a lot of good players and a German manager! But I’m not that much of a contrarian to predict England to win the World Cup.

Should be a good one once we make it past the laughably diluted group stage and R32.

Jannik Sinner wins more Grand Slams than Carlos Alcaraz and ends the year as #1

One more tennis prediction to cap it off.

I’ll pat myself on the back one last time for correctly calling 4/4 big finals between Alcaraz and Sinner in 2025. But now it’s time to move on, and imo Sinner will become the man to beat in 2026.

Alcaraz recently split with his long-time coach Ferrero, which I expect to leave a mark on his game. Even if Alcaraz apparently wasn’t always a fan of Ferrero’s stoic approach, I think they were a great match and one that Alcaraz won’t easily replace. Splitting from a fruitful long-term relationship will have an impact on him, so one side prediction I make is Alcaraz to win at most one slam in 2026.

Sinner on the other hand had a terrific end to 2025 and enters the new year as the heavy favorite at the tournament that suits him most. No value in backing 50c imo, but I also don’t expect these odds to shorten at any point before the final to be honest. The fast hard courts in Melbourne are perfect for Sinner’s game. He was one point away from winning the French last year (which he will achieve in 2026) and come Wimbledon, he will firmly look like the man to beat. Plus, Jannik has a hot new girlfriend (just don’t ask how many other athletes she’s been with before him), so he will be well taken care of!

Sinner to dominate 2026 and win three slams. Bonus prediction: Joao Fonseca becomes the breakout star of the year.

That’s all for 2026 folks. It’s been a fun year. Let’s make the next one even better:

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Good luck and I’ll see you next year!

If you actively trade on or are at least interested in it, this ‘2025 review’ essay will hopefully be useful for you.

I will walk you through my monthly recaps, drawing conclusions and lessons that can help me — and hopefully you — in the next year.

Let’s ‘review the tape’ and reminisce about what this wild year had in store for us.

Lesson #1: Find your safe space

January set the tone for the rest of 2025: a frenzy of headlines and events that leaves you feeling drained and exhausted.

According to my highly scientific review method of checking the Polymarket leaderboard at the last day of the month, I made $145K profit in January. Almost all of that ($112K) came from high-stakes bets on what Trump would (not) say at his inauguration. To this day, it marks my biggest single-market profit.

It may seem a bit silly for a mentions market, but I’m convinced I profited mainly thanks to my fundamental analysis and the gap I (correctly) identified between the fundamentals and the market sentiment.

Back in January, crypto market sentiment was around peak euphoria. The day before the inauguration, the Trump team dropped the infamous TRUMP memecoin. This pumped the odds of Trump mentioning “crypto” at the inauguration to an insane 45% and a mention his own memecoin to around 10%.

In my opinion, this was one of the three biggest fundamentals-sentiment gaps in 2025 and a good indicator of how inefficient and biased Polymarket can be. Trump mentioning cryptocurrency has been overvalued in almost every such market because the crypto-affine Polymarket core audience. I took a big swing and hit it big.

The lesson to draw: find your safe space. For me that is fundamental analysis.

I’m convinced that news bettting aka prediction markets are one of the few markets where fundamental analysis still pays and can be a source of edge.

At least that’s why I think I am, for now, still profitable. Unlike in financial markets, the outcome of prediction markets is tethered to reality. What the president of the United States says at the inauguration or the outcome of a war is, for now, fairly manipulation-proof. Such markets can be traded profitably if your probability estimate turns out to be more accurate than the market’s.

I’ll continue to write deep dives on markets I take bigger and longer-term positions in, because they help structure my thoughts and give me a baseline I can return to check whether my fundamental analysis is still accurate.

Your safe space can and probably will be something else. But if your confidence takes a knock or you’re ever in doubt, it literally pays to return to it and focus on what you know your strengths are.

Lesson #2: Good judgement is helpful even if it’s not an edge

Back in February, I still thought could trade crypto profitably. It took another good 10 months and the crypto tide to go out for me to realize that I was swimming naked.

Nevertheless, my judgement of how Trump would manage and execute his tariff rollout was good. I anticipated crypto to dip as a result of the FUD it would create and I was right. As was the case for how the German election would turn out. That yielded another massively profitable month on Polymarket.

I would later discover that, unlike prediction markets, you cannot trade financial markets only on a rough narrative analysis. At least not low timeframes and not with the narrow targets I was trying to hit. But I was right in both my assessment of how important Trump considers tariffs, as well as the ‘right-wing ceiling’ in German politics.

The lesson to draw: good judgement in itself isn’t an edge, but it’s definitely helpful.

Good judgement is hard to pin down in this context. I think of it as wisdom accumulated over a series of events and the pattern recognition skill you build as a result. In other words, your intution and gut feeling. The zeal and frequency that Trump was talking about tariffs made me think he would at least try to roll out a maximalist version of them. In April, that turned out to be right, but the first signs were there in February.

If you find that your pattern recognition repeatedly yields the wrong results, it’s probably worth looking into why that is and how you can fix it.

Lesson #3: You need to get lucky

March was my best month on Polymarket this year. The profits came from fading Trump to mention crypto at his State of the Union address, a significant chunk of profit from fading the promised quick peace in Ukraine, and a really lucky payout from the infamous ‘mineral deal’ market.

If you not happen to know about the ‘mineral deal scam’ on Polymarket, here’s a piece to read up on it. I was one of the lucky beneficiaries of this scam and the reason for that month’s lesson.

Even though it remains my biggest one-month profit, it only came from two well-reasoned and well-executed trades based on fundamental analysis. But I also:

• Overtraded another strike on the Ukraine war

• Mismanaged the Bitcoin Reserve trade despite writing an analysis myself

• Badly misjudged a Trump ‘Crypto Summit’ appearance and took a thick $36K loss

• Got lucky on a Sunday scam announcement of altcoins being included in the crypto reserve, only to give it all back and some on Monday

• To top it all off, stopped my trading journal and never picked it up again with the same discipline

Despite all of this, I ended up with…a record profit month?

The lesson to draw: it’s sometimes better to be lucky than good. Realistically, I should have maybe ended up in slight profit. But being rather lucky than good, I (over)sized the positions I had the strongest conviction and they more than paid for the losers.

Don’t overestimate the amount of luck involved in all of this. This was a lesson I would have to go back to several more times this year and will keep reviewing regularly from here on out. Even if you think you correctly set up the pieces, there’s still a good amount of rolling the dice that you need to come out the right way.

Lesson #4: Enjoy the process

In April, being terminally online and the rapidly increasing numbers on the screen caught up with me for the first time. I was mentally and physically exhausted.

I don’t remember much of the rollercoaster, only that I got the Liberation Day fiasco right with oversized crypto trades and again gave it all back and some when the market bottomed and reversed. But I do remember how much the trading and the constant blizzard of headlines and events sapped my energy.

The lesson to draw: enjoy the process. And if you find yourself not enjoying the process any longer, stop what you’re doing and don’t return before you haven’t figured out why that it.

At my best, I find news trading exhilirating and deeply satisfying. Especially, when I hit a fundamental analysis that I planned well in advance, such as the war in Ukraine. At my worst, I overreact to each headline and overtrade as a result, which leaves me stressed and nervous. I’ve had days this year where my cortisol levels spiked hard and I made all of the mistakes mentioned.

If you don’t enjoy what you’re doing, you probably won’t be consistently successful. Not every day can be a proverbial Grand Slam final. In fact, most days will rather be hitting the ball against the wall on Monday afternoon. But you have to accept and be mentally and physically prepared for both situations. Performing well in the final won’t be possible if you can’t enjoy performing with only the wall as your opponent.

Lesson #5: Don’t be greedy

May was the first month where it dawned on me that I shouldn’t trade crypto. It only took a couple hundred thousand more lost in unrealized profit to get I shouldn’t bother with it at all.

The lesson to draw: don’t be greedy. No matter whether in a single market or in trading as a whole or in life for that matter.

I don’t have a scientific method for sizing my trades. I eyeball my max loss and what I think I could stomach. This mostly ends up still too far out on the risk curve, but even sticking to this laughably crude framework works surprisingly well for me…if only I stick to it.

When I find myself wanting to add endlessly to a trade because it looks so good, I try stop to remind myself to not be greedy. There’s always a next trade and a next entry. Of course, I still get it wrong constantly. It’s a never-ending learning process.

I hope but I don’t expect it to ever be as automatic as brushing your teeth. But if it becomes as automatic as the feeling that I have to go to the gym after a few days of break or otherwise I’ll go crazy, that’s probably pretty good. I’m very confident that my other skills can enable me to live a pretty comfortable life if I keep this demon in check. That’s what motivates me.

Lesson #6: Garbage in yields garbage out

June was an interesting month because I ended up profitable even with a couple of big losses and bad blunders on the way.

I racked up the top 3 losses all in this market: two in the French Open and the infamous Israeli strike on Iran on a Friday when financial markets were open.

But I also ended the French Open in profit thanks to the insane once-in-a-decade final that I called to a T, hit a big profit on the Polish election thanks to a great call by , and bounced back well from the Israel strike fiasco. Overall though, that month was clear proof that I was still oversizing and overconfident, no matter how good my fundamental analysis turned out to be.

The lesson to draw: garbage in yields garbage out. If you gamble, you will get gambling results. My gambling results in June ended up being positive. But it would literally have taken only a few bounces of the ball for that not to be the case. The confidence in my strengths got the better of me and blinded me to the fact that there are weaknesses to be adressed.

On the other hand, I also started getting a feel for how to execute according to my strengths. That would still pay off in the subsequent months.

Lesson #7: When you’re really confident, then go balls deep

July was the first and so far only time I went kinda viral. That was when Jerome Powell, better known as the Top J, said Nyet to Donnie’s musings that he should prematurely leave his post as Federal Reserve Chair.

If memory serves me right, backing Powell to stay the course as Fed Chair has been my biggest exposure on a single market. At least if we exclude virtually guaranteed events like the well-telegraphed FOMC decisions that people bet millions on at short odds.

I also had a flawless trading stint at Wimbledon, again calling the final to a T. That Q3 period was probably when my confidence peaked and my results followed. But for the first time, it felt like it wasn’t because of getting lucky breaks (although I obviously did!).

The lesson to draw: when you’re really confident, don’t be afraid to go balls deep.

I was really confident in my call that Trump wouldn’t dare to fire Powell and, moreover, Powell wouldn’t leave and/or cease to be Chair. Overconfident? Maybe. We’ll never know. But I do give myself credit for an accurate read of the situation.

Just as was the case with my correct calls of the three Alcaraz-Sinner Grand Slam finals, I did obviously need to catch a couple of breaks. It could have easily gone another way, a set this way or that. This is a game of inches.

But when you’re confident that you’re on the right track with whatever you’re doing, then absolutely do go balls deep. If you end up being wrong and can say you wouldn’t change a thing, then it was the right call all along. Remember and harness that feeling for the next time. The ball will end up bouncing in when you need it. Just back yourself.

Lesson #8: Don’t try to force it, be patient

In August, I first saw a bit of improvement in my actual skills. Instead of overtrading and itchy fingers, I managed to stay patient and traded around the only real event that month: another Trump peace push in Ukraine.

My read on the Alaska summit ended up being as good as my Grand Slam final predictions. Unfortunately, Trump ended up rugging me out of a lot more potential profit: he cancelled the press conference, which torpedoed my mention market bets. But I regret nothing and would play it exactly the same way again. If you’re confident, go balls deep.

The lesson to draw: don’t try to force it but be patient. In August, I did an excellent job at that and did not force it. There is always another opportunity, even if it doesn’t seem that way. It’s funny how it works, but whenever I follow this advice (and other advice I give hehe), good things happen. If I try to make things happen, it goes wrong. Some kind of cosmic karma I guess.

Lesson #9: Double down on what works and eliminate what doesn’t

In September, my confidence and my all-time PnL on BuckMySalls peaked. This was probably my best-ever month in terms of pure skill.

I trusted my instincts and went balls deep on yet another flawless Grand Slam final call. I went 4/4 on public Sinner-Alcaraz calls this year, and I’ll admit I’m pretty damn proud of it (because I made bank on all of them). Another Fed rate cut bond matured with no stress whatsoever. I realized the last bit of Ukraine profit from August. Good times.

The lesson to draw: double down on what works and eliminate what doesn’t. In September, I did that. I doubled down on what worked (bets on markets where I think I had an edge) and eliminated what did not work (trying to force other markets, overtrade, try to squeeze the last bit of profit out of a market).

I can’t stress enough how important it is to ‘look at the tape’ and review what works and what doesn’t. That’s the rationale for this post — to abstract the lessons learned this year and internalize them for the future. Success cannot be forced and it’s not inevitable. But you absolutely can increase your chances of being successful when you ‘review the tape’. That’s why I’ll double down on this review process in the future even more, but more about that soon.

Lesson #10: Don’t get overinfluenced by what others do

October was my first (and hopefully only) month this year I ended up in the red. It was also the month when everything changed.

October actually started kind of ok, and I was in five-figure profit after the first week. But it’s funny how things work. Whenever you get too confident, something brings you back down to earth. At least that’s how it’s always worked for me.

Things took a turn for the worse when I started betting on the Israel-Gaza ceasefire. Middle East markets have been the only markets that I have pretty consistently been losing in. It’s just something about the region. Maybe more fundamental analysis could mitigate it, but I’m not particularly interested in the Middle East, so I read and know a lot less about it compared to other regions.

Regardless, I ended up on the wrong side of the ceasefire, despite having multiple chances to abandon the losing side. It wasn’t a particularly difficult trade in my opinion, but I got overconfident after months of winning. The loss (-$50K) was unpleasant but far from catastrophic.

But then I relapsed to a bad habit (overconfidence and partially trying to make it back too quickly) and got a bad beat in a (imo) poorly qualified market. That tilted me for the remainder of the month. The fact that I had been trying to square the circle in crypto and got liquidated a couple of times within a few weeks in that period only added insult to injury.

The lesson to draw: don’t get overinfluenced by what others do.

But how does this lesson fit to what happened?

I got carried away by what others were doing or thinking several times in that period:

• ‘The crypto Q4 pump’: everyone and their mother was convinced that crypto would have a good Q4 and I outsourced my analysis to the crowd. Crypto did start well and then got nuked to hell on October 10 and never recovered (while metals are on a generational run on a crypto-friendly debasement narrative).

• The ceasefire trade: I got too carried away with who’s on which side during the ceasefire negotiations. The trade was in fact rather straightforward had I applied a sober and open-minded fundamental analysis. But also here, I outsourced my sense-making. This happened a couple more times, especially as supposed insider trades came up more and tools appeared. I didn’t focus on my strengths and tried to outsource my weaknesses.

• The clarification rug: ironically, the market resolved to Yes on another news a few weeks later. So had I held the bag, I would have gotten lucky. Regardless, I outsourced my analysis to LLMs when I knew better: don’t get involved in Polymarket’s totally broken disputed markets process.

The only thing I would not change that month I my ‘retirement’. I may go public again soon or I may not. But I do feel satisfied and vindicated about being the first ‘big trader’ to call Polymarket out for being utterly, laughably broken and unprofessional. Regrettably, it’s only gotten worse since October.

Lesson #11: If you lose focus that’s fine — it’s about how quick you can recover

November was a difficult month because I was mentally still reeling from October.

I did make a bit of profit ($15K) on my other account, but I found it difficult to get back to my best. That’s why I chose the lesson to draw to be based on this video by the tennis GOAT Novak Djokovic:

I love this video and lesson. Djokovic is without a doubt the greatest ever player to play in adverse conditions against an unfriendly crowd and/or struggling with injury. And yet he’s still open and humble enough to admit that perfection is impossible and emotions are an inevitable part of the game.

There’s another great clip where he talks about how his famous mental strength is the result of tireless work. These are great lessons because anyone can apply them. With any skill you want to practice and master, you will lose focus and experience negative emotions. The key is not to get lost in these negative emotions. Just as you shouldn’t get carried away by positive emotions. Experience them, accept them, and allow them to be dissolved. The better you become at this, the quicker you can return to a state of focus.

Lesson #12: stay humble and you will be rewarded

December isn’t over yet when this recap comes out, so I don’t have a monthly tally yet. Barring a huge headline event until New Year’s Day, it will be a solid but unspectacular month. I feel like I’ve slowly been finding my game again and have heeded some of the advice I gave myself in my last recap: less talk, more focus.

The lesson to draw: stay humble and you will be rewarded. One of the benefits from ‘starting over’ is that I can start small again and it humbles me to build from 0. It also frees me from being ‘millionaire trader BuckMySalls’. It’s gratifying for people to respect and follow my thinking, but I’m not looking for fame. I don’t need to go viral on social media, lest of all with slop content.

That’s why I’ll share more of my thought process and mental frameworks in the new year. But I won’t make too much noise about it. I will approach 2026 with the same humility as I did for 2025. I had way more success than I could have imagined at the start of 2025, and no one’s guaranteeing that will repeat in 2026. But I’m confident that if I stay humble, I will be generously rewarded in 2026.

If you want to follow along, I’ll have one more piece with 10 predictions for 2026 coming on New Year’s Eve. Subscribe to not miss it:

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Good luck and I’ll see you in the next one!

This week, we’re looking at:

• Volodymyr Zelensky is on the ropes

• Is Polymarket winning the prediction market wars?

• Trump teetering on the edge

And, of course, the winners of last week’s Heel and Face of the week.

Let’s get to it, kittens!

Volodymyr Zelensky is on the ropes

Who will be in office longer: Zelensky or Nicolás Maduro?

Similar to Maduro, I think Zelensky is reeling from a combination of external pressure from Trump and domestic weakness.

As I’m writing this, there is a Ukrainian delegation in Miami, negotiating a peace deal between Ukraine and the US a proposal Trump’s personal envoy to Putin, Steve Witkoff, can deliver to Moscow next week.

Last week saw quite the frenzy around the latest Trump peace push in Ukraine. Allow me to shill my own very comprehensive overview of how likely it is to succeed and what I’m watching to predict the end of the war:

If you don’t want to read the entire 6,500 words, I’m thinking about adding an audio track — let me know if you’d be interested in those.

If you’re even to lazy to listen, here’s the TLDR:

Trump is emboldened by has Gaza ceasefire success and is looking to repeat the same play: squeeze the weaker party into a deal. Zelensky is facing a perfect storm of crises: he’s lost his right-hand man, the army is under pressure at the frontline, Russia is pounding the energy grid, and now Trump wants to take advantage of all of that.

We’re bound to see fresh developments on this next week even if peace isn’t imminent as Trump makes it seem.

I’ll particularly be watching this market:

That was the only ‘real’ development in this short holiday week, but there also was some interesting gossip we need to talk about for a minute.

Is Polymarket winning the prediction market wars?

So last week this happened:

Oopsie!

According to my very limited research on this, Kalshi should be ok since the site is very much an exchange and not a bookmaker as the lawsuit (seemingly?) alleges. But in between that and Kalshi being subject to Nevada gaming regulation, it wasn’t a great week for the green gambling app.

The same can’t be said for the blue gambling app. had a great week in between Shayne appearing on the cover on Forbes…

…and Shayne appearing in tonight’s episode of 60 Minutes:

That’s given the Polymarket US Launch the confidence it needs to pump to prices not seen in…weeks.

As critical as I’ve been of Polymarket, they’re clearly winning the PR war against Kalshi right now. And, dare I say it, there hasn’t been a really bad rulescuck in a while? At least not that I’m aware of. On the contrary, the ‘Ukraine agrees to US ceasefire proposal’ market above has pretty good rules.

Maybe, just maybe, there is still hope for Polymarket. The main page is still slow as shit, but at least things are not getting worse. We’ll keep watching.

Speaking of getting worse, the same can not be said for POTUS…

Trump teetering on the edge

Donnie hasn’t had a great week.

For one, his approval rating is in the gutter:

The New York Times said he is old and getting tired faster:

And he ragetweeted about closing airspace above Venezuela, even though the Pentagon knew nothing about it and wasn’t ready for bombing Venezuela.

One of my long-standing theses is that Trump’s health is about as bad or even worse as Biden’s was at that point and that he won’t make it till the end of his term, one way or another. I guess we’ll just have to wait and see about that one.

In the short run, I would imagine Trump will get more unhinged as the bad news keeps coming in (no peace in Ukraine, SCOTUS rules against tariffs, the economy?). I would imagine he lashes out with something at some point. My money is on Venezuela, but so far it’s been all you can taco ever since August…

Heel of the week

Heel of the week in this shortened and quiet week goes to Steve Witkoff. He once again managed to unite every non-MAGA person against him with his (?) 28-point peace plan. The Wall Street Journal wrote an interesting story about how Team Trump is looking to personally benefit from a settlement with Russia. Trump and Putin uniting to embezzle and grift? Who could have thought!

Face of the week

Face of the week has to go to Shayne Coplan. You couldn’t have asked for a much better week if you’re the Polymarket CEO. If Polymarket US officially launches next week, the site should be riding on a high into the end of the year. Congratulations.

Market of the week

Market of the week is tough since not much happened, but how about this unusual mention market?

What I’m watching for next Smackdown Sunday

Pretty much the same as this week:

Venezuela…we’re still waiting!!!

Is Trump going to make a move here? It looks unlikely while he is busy smacking around Zelensky. But then again, he already talked to Maduro and Maduro doesn’t want to leave, so…

Mr. Witkoff goes to Moscow

What kind of proposal is Ukraine going to pack into Steve’s lunchbox to give to Putin? I would imagine even with Zelensky under pressure, Ukraine is not just going to lie down. But I’d be surprised if there was no progress at all. Ukraine looks eager to please Trump and Trump wants to please Putin to make money, so do the math…

Will the Santa Rally start?

Jerome Powell has a brief speech scheduled for Monday if memory serves correctly. Unlikely he will comment on the December decision, but if markets rally into Q1, now’s the time to start. Next week should be the storm after the calm.

Sorry for the abridged round-up, I’m sure next week will make more than up for it!

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Good luck and I’ll see you in the next one!

Could it be different this time?, I thought. It might be…the fundamentals are changing. Maybe, just maybe, they…pull it off?

No. Preposterous. Laughable. Trump helping to end war in Ukraine? C’mon man! Only a gullible fool would think so. And so I sold whatever speculative calls I had on the war to end, both soon and not-that-soon.

And would you know it, only a day later they run the same playbook as in August.

Just as the “Epstein hoax” gathers traction and makes Trump pivot (on Nov. 17) and sign the bill to release the files (on Nov. 20), mysteriously and totally by coincidence a fresh US (or Russian?) peace plan hits the headlines (on Nov. 19).

I planned to write this deep dive without expecting a fresh peace push so soon, but this makes it all the more interesting. Today, I’ll cover what the latest initiative means for the chances of peace in Ukraine:

• An assessment of the past three months, and the present and future outlook for the US, Russia, Ukraine, and, believe it or not, the EU.

• The key dynamic I’m watching to predict the end of the war.

• My bets.

The TLDR: the fundamentals are slowly but surely changing; and not in Ukraine’s favor. Under pressure on several fronts, Zelensky needs to develop a theory of victory to stand a chance of turning defense into offense. The current peace plan won’t succeed, but as they say: ‘with each test, the resistance weakens.’

Player #1 — The US

What happened in the past three months

In my pre-Alaska summit deep dive, I predicted the following:

Turns out Alaska undershot even my modestly bearish prediction, because Trump got none of these. He didn’t even get a press conference to gloat and yap, costing me a good bit of money. The reason: Putin chose to autist-max and couldn’t resist lecturing Trump on Yaroslav the Wise:

Wow. Absolutely nobody could have predicted this. I am completely dumbfounded by the fact that Putin is a history nerd. Let’s just check in real quick what I wrote about Putin in my last deep dive:

The famous trilateral, which I predicted would not happen, fell apart even quicker than I expected. To add insult to injury, Trump came up with a fresh summit idea in October after the initial disappointment had worn off. But the infamous Budapest summit also never happened, because a call between Sergey Lavrov and Marco Rubio showed, surprise surprise, no change to Russia’s position.

At that point, even Trump (briefly) gave up and decided to sanction Rosneft and Lukoil, Russia’s top oil companies. He has also semi-credibly announced he’d be willing to back a bill imposing secondary sanctions on countries trading with Russia (and Iran). I find this unlikely but not impossible, given his visible frustration with Putin’s intransigence.

But although Trump is frustrated by the difficulty of solving “one of the easy” wars, his default mode remains the same: he likes and admires Putin and dislikes and is annoyed by Zelensky. He doesn’t care about Putin’s historical grievances or occupied land. But he’s annoyed by Zelensky refusing to hand over land that, in Trump’s opinion (which is derived from Putin’s), Ukraine is going to lose anyway. All of these irritating details prevent the US from “a great relationship” with Russia.

Much cooperation. Very economic. Such common interests.

But there is one important difference between Trump now and Trump three months ago: today’s Trump has one real foreign policy success under his belt — the ceasefire in Gaza.

That one also cost me a ton of money. And yet, no matter how imperfect and fragile the ceasefire may be, Trump successfully pacified the conflict. That was impressive.

Just how did he do it?

In my opinion by squeezing Hamas (the weaker party), which in the end had no more allies backstopping its power and (was forced to) choose a (for Hamas) bad deal over a martyr’s death.

This has boosted Trump’s confidence even more and now he wants to apply the same principle to the war in Ukraine: squeeze the weaker party into a deal. The difference with this conflict: unlike in Gaza, Ukraine still has allies backstopping its power and unlike with Israel, Trump has little leverage and influence over Russia.

Which brings us to today.

The US’ present position

If you research even a little bit as I did, you’ll find that the US does have leverage over Russia. Marco Rubio says “there’s not a lot left to sanction”, but I’m not entirely sure that’s true. Mr. Rubio, have you ever considered sanctioning companies producing chemicals for mechanical lubricants and military-grade tyres?

Apparently, sanctions on little-known chemicals whose production is highly concentrated could at least disrupt and irritate the Russian military-industrial complex. Even existing sanctions probably have juice left to squeeze if the US was diligent about enforcement. Some Chinese buyers of Russian oil are staying on the sidelines — if the US was hell-bent on strict sanctions enforcement, and willing to risk a diplomatic conflict with China, it could increase pressure on Russia.

But the US chooses not to increase pressure on Russia, because the US wants to create a new paradigm: friendly relations with Russia. Why would you pressure someone that you want to befriend?

There are competing factions in the US, which complicate this push and cast doubt on whether it can be realized. JD Vance, supposedly one of the drivers of the current peace effort, is very much driving and aligned with this new paradigm. Traditional neocons like ‘lapdog’ Lindsey Graham push back against squeezing Ukraine too much.

Marco Rubio, Vance’s only real competitor as 2028 Republican candidate, is more aligned with the neocons. It was after his call with Russia’s foreign minister Lavrov that the Budapest rendezvous was cancelled. Rubio indirectly denies it and a new Axios report is trying to push back on it. But I find reports of a rivalry between Vance and Rubio entirely plausible and a good explanation of why US diplomacy is so disjointed.

And then there’s Steve Witkoff.

The role of Steve Witkoff

Steve Shitkoff Steve Witkoff the Wise, as I like to call him, goes by “Dim Philby” on X, named after Kim Philby, a UK double agent for the Soviets. Witkoff has racked up an impressive number of gaffes: he visited the Kremlin without his own translator (luckily, Putin provided a bilingual agent), he’s on record giving Russia advice on how to communicate to Trump, and he thinks Putin is straight up with him and not a bad guy.

Witkoff has the crucial role of being Trump’s man in Moscow (or Putin’s man in DC, depending on your perspective). He’s also had a key role in the Gaza negotiations, which elevates his authority vis-à-vis Trump. That’s why it comes in handy for the Kremlin that Witkoff has no subject matter expertise whatsoever.

He previously mischaracterized Russia’s willingness to make concessions, telling Trump Russia is ready for territorial concessions when this is not the case. He sort of does Rubio’s job, only that his and Rubio’s views are far apart and Rubio is vastly more competent and experienced. Time and again, Witkoff’s ‘diplomatic efforts’ have shown a pro-Russia tendency, so any ‘deal’ Witkoff adopts or comes up with will be a deal Russia likes and Ukraine doesn’t. No wonder Putin is full of praise for Witkoff the Wise:

But even though Witkoff is Russia’s useful idiot, Russia hawks in Congress like Lindsey Graham and Tom Cotton limit his influence and thus, Trump’s inclination for a deal that would force Ukraine to make painful concessions.

What to expect from the US

The initial 28-point plan has shrunk to a 19-point plan with only “a few remaining points of disagreement”. Unfortunately, the remaining disagreements are the actually important ones, such as territorial concessions in the Donbas, security guarantees, and Ukraine renouncing its pledge to enter NATO (or Russia receiving a veto over it).

Trump seems to be wary of how difficult (read: currently impossible) this may still be, so he’s meeting Zelensky and Putin only when the deal is “in its final stages.”

I don’t see this happening anytime soon. If anything, this peace push walks and talks just like the previous ones. Try to find which stage we’re at:

With Rubio back in charge of the negotiations and the actually important points left for Trump and Zelensky to hammer out, I think we’ll see more volatility coming from Trump but without any meaningful results, at least in the short term.

The administration will continue to lean on Ukraine for leverage and try to water down tangible commitments, such as security guarantees, where all three parties are far from having enough common ground for an agreement. Since POTUS finds Vladimir Vladimirovich’s arguments more compelling, Trump’s position is a function of Putin’s position. But media and political establishment backlash makes forcing Ukraine into a lopsided deal, for now, politically unfeasible: Trump has a -10 net approval rating on Ukraine (and -26 among independents).

This can change. Whether it changes will depend on the key dynamics we need to watch in Ukraine. But for now, let’s look at Russia.

Player #2 — Russia

What happened in the past three months

By and large, the past three months have been good for Russia. I already took a victory lap on my correct prediction of Putin’s behavior in Alaska, so we can skip that part. Sanctions were avoided at first but then, oopsie, they still caught up to Putin, even though he pretends to be totally surprised by why this happened. As I explained, their effectiveness will depend on enforcement. But even the latest sanctions and strong enforcement would, in my opinion, not be a quantum leap that crushes the Russian economy in the short term.

On the battlefield, things have also been going, comparatively, well. Yes, Russia is advancing at a snail’s pace and will take another 283 years to capture all of Ukraine at the current rate. Though even that may not be true anymore, because Russia’s gains have slowly but notably accelerated over the past weeks:

These losses are not catastrophic for Ukraine. I remember betting on Russia to seize Myrnohrad, a town neighbouring the embattled Pokrovsk, back in August and they’re still fighting over it three months later. The advance seems to slow to a crawl especially when hitting urban environments. But while the ISW projects Russia to seize the entirety of Donezk Oblast by August 2027 at the current pace, the fact that Ukraine has come under pressure in several directions (Zaporozhzhia Oblast, Siversk) is a notable and (for Russia) satisfying trend.

The real benefits from this are political more so than military: even a modest increase in battlefield gains yields a disproportionate political gain for Putin. Each square kilometer of progress is another square kilometer strengthening his argument of inevitable victory, at least in Trump’s mind. Putin would rather win diplomatically than militarily. But he doesn’t mind the latter and will wage war for however long it takes to achieve the minimum viable objectives.

That’s why Witkoff the Wise having Trump’s (and Vance’s) ear is so valuable — he can relay the word of Russia’s impressive gains and ‘inevitable victory’ directly to POTUS.

In the long run, we’re all dead as they say. So, just how long can Russia keep up the war effort?

Russia’s present position

Nobody talks about this, but the state of Russian society is actually as good as it’s been in years.

Here are the trust ratings for the Russian president (red), the government (black), regional governments, the parliament, the upper house, municipal governments, and political parties (in order). Pretty impressive I would say.

Here is the trust rating for the army (red), intelligence agencies (orange), police (blue), and the judiciary (grey, black).

How about Vladimir Putin’s approval rating? I’ll let you guess which color stands for approve and which for disapprove.

And how about the state of affairs in the country as a whole? On the right track or not?

As you can see, Putin and optimism in the country as a whole are around all-time high levels. There has been an ever so slight uptick of disapproval over the past few months, but so far, it’s not a worrying trend.

What’s the catalyst for this surge in optimism and trust? It’s the economy stupid!

Just look at this sexy data:

• The ruble is up ~40% vs USD since early 2025 (back near pre‑invasion levels).

• GDP growth >4% in both 2023 and 2024; cumulative ~7% over 3 years, outperforming most of Europe.

• Unemployment at ~2–2.2%, the lowest in decades.

All of this is driven by the economy having been reconfigured for war, with 8% of GDP, or 40% of the federal budget, spent on defense. For comparison, remember how Trump has to bully the Europeans to get to 5%!

But while this growth is real, it has helped transform Russia into a “disposable-goods economy” — an economy driven by production of items designed to be destroyed. This creates jobs and boosts output, but does not create lasting assets or raise long-term productivity. Here are are just a few factors showing how Russia’s war economy is “strong but brittle”:

• Oil revenue pressure: Urals crude prices (≈$55/bbl) fall short of earlier budget assumptions (~$70/bbl)

• National Wealth Fund drawdown: liquid assets in the NWF were ≈$120B pre‑war; as of 1 July 2025 they were ≈$53B.

• Tight labor market: around 70% of businesses cite staff shortages as a constraint, driven by emigration and war casualties.

• Patchwork defense-industrial configuration: large state conglomerates (Rostec) compete with private sector small-scale “people’s military‑industrial complex.”

• Limited defense-led modernization: the vision of using sustained defense demand and dual‑use R&D to catalyze broader technological and industrial upgrading (as US defense/NASA did for semiconductors and aerospace in the 1960s) hits supply constraints and is more likely to drive inflation rather than innovation.

This video by the ever-informative Hubert Walas presents a good argument for why Russia’s economy is running hot on a dwindling fuel tank.

Growth for 2026 is projected to be 1.3% (vs 1% in 2025) and defense spending will not grow nominally. That will be paid for by the Russian public through tax hikes (VAT 20% → 22%) on an increased tax base, squeezing small businesses. Even authoritarian governments rob their citizens, the dictators’ grass isn’t always greener.

That means switching the economy from war to peace mode would require a painful reconfiguration and would be only possible under four conditions:

• “Perceived external threats must truly have disappeared, with security guarantees that satisfy Putin”.

• Demobilisation and reintegration of contract soldiers.

• At least partial sanctions removal.

• Revolution in defense procurement away from favoring state conglomerates towards true free-market competition (the “people’s military-industrial complex”).

In other words, Russia would have to fundamentally and structurally change its way of doing business under different demand and supply side shocks. As I said in my first deep dive back in February, this strikes me as unlikely and any pause in the war can by definition only be temporary:

Thus, Putin has to choose between a potential economic crisis and continuing his legacy project — this isn’t a choice at all.

But there is one more thing beyond the economy we need to look at in Russia. What is up with this Kirill Dmitriev guy?

The role of Kirill Dmitriev

Similar to Witkoff the Wise in the US, Dmitriev has bootstrapped his diplomatic career in the Russian Federation thanks to having a personal connection to the czar president. If you (like me) really want to geek out on Russian domestic politics, here’s a video from the team of the late Alexey Navalny telling Dmitriev’s story: how he made it from little-known finance bro (working in Kiev btw) to Putin’s ‘shadow foreign minister’. It has an English audio track:

If you can’t be arsed, here’s a TLDR:

• Dmitriev’s wife is the best friend of one of Putin’s daughters.

• Dmitriev is the head of the Russian Direct Investment Fund (RDIF): on the box it says Russia’s version of Norway’s sovereign wealth fund but inside is a good ol’ state embezzlement scheme.

• Dmitriev has built contacts in the Middle East (but also in the US) and signs “exclusive” agreements with major sovereign funds that require dealing only via RDIF and bar contact with other Russian counterparts without his permission.

• These fancy but hollow deals have elevated his status in the eyes of Putin and has earned him over time a promotion from economic envoy to Putin’s man for everything and, in particular, connections to the American Right.

With all of this in mind, the Kremlin’s statement that they didn’t know of or haven’t received the latest peace plan until a few days after it was published is obviously a bit silly. But what I find particularly funny is how Dmitriev, similar to Witkoff vs Rubio in the US, encroaches on the territory of the actual foreign minister: Sergey Lavrov.

Isn’t it curious how Lavrov went missing for a while after the Budapest summit fell through?

Initially I thought it to be just a bit of trolling from anti-Russian sources. But Lavrov has been curiously absent and hands-off in this latest peace push. He’s resurfaced over the past week or so, yet the narrative even made it to the president’s press conference. Lavrov simply has “his own schedule” and is preparing for the next meeting with our American partners. Nothing to see here, please disperse!

Lavrov himself was not impressed by a reporter asking him about it. I don’t think there is a lot here, but it’s a curious piece of information and a pattern I would not entirely dismiss. Social media rumor has it that Putin wasn’t impressed with Lavrov’s brusque retort of Rubio’s feeler call and sidelined him for a bit, though that is just a rumor.

Lavrov has 50 years of diplomatic experience and think of him what you want, but he’s the most experienced and skilled diplomat I know. Dmitriev getting so much of the limelight and being utilized as much as he is means there are machinations ongoing in Russia that we do not know of.

What to expect from Russia

So, Putin has the full trust of the public and is in no rush to end the war, to put it mildly. What does that mean for the chances of the war ending soon?

Yuri Ushakov, another cook in Russia’s foreign policy kitchen, explains it to you.

Putin will continue to pursue maximalist demands, albeit probably not entirely unrealistic ones and may make only cosmetic concessions that allow Russia to achieve its full objectives later through diplomatic or military means.

He’s been adamant about his demand to annex the entirety of Donezk Oblast and no level of intransigence from Ukraine or Europe will deter him. The economic and military incentives and dynamics I laid out above make it clear that Putin is comfortable with and confident about achieving this objective one way or the other.

He also wants the de jure recognition of annexed Ukrainian territory as Russian by major international powers — something the US is reportedly willing to do. Ukraine will presumably not be required to do so — and the EU would almost certainly refuse and punish member states willing to break with that — but that isn’t necessary anyway.

For one, breaking the diplomatic taboo of changing borders by force would be a big win in itself. For another, Russia only cares about its negotiating party, the US, doing so. Because if the US recognizes Donbas as Russian, and any peace agreement conditions security guarantees on Ukraine not attacking sovereign Russian territory (as the current draft does in point 9), Ukraine risks losing its ‘ally’ if it does, locking in Russian gains forever.

Since Putin sees Zelensky as illegitimate leader and never fails to mention that territorial gains have to be confirmed by a referendum in Ukraine, this makes Ukraine’s red line of no recognition of Russian territory irrelevant. Therefore, the plan is to force Ukraine’s illegitimate leader to accept the ‘realities on the ground’ and seek formal recognition later after a new government has been elected. This government would presumably get some goodies for nudging the electorate towards the correct choice.

However, even if territories and security guarantees can be ironed out, there are other factors (like capping Ukraine’s military) that will need a lot more discussion from Russia’s POV. Good thing Witkoff the Wise has his next flight to Sheremetevo airport already booked.

In short, Russia cannot lose the war with the current US policy stance. This is a bitter truth Ukraine has to come to terms with asap and change its approach.

Speaking of Ukraine…

Player #3 — Ukraine

What happened in the past three months

Ahead of Alaska, I wrote the following:

Zelensky got the goldilocks scenario in Alaska: a nothingburger meeting and Trump being so disappointed he actually sanctioned Russia and put further action on the table. Unfortunately, that’s where the good news for Zelensky and Ukraine mostly end.

Over the past three months, Zelensky has come under serious pressure politically and Ukraine has come under pressure militarily, which have significantly weakened both Zelensky and Ukraine. This culminated in the resignation of Zelensky’s powerful chief of staff Andriy Yermak on the day I’m writing this deep dive. Let’s untangle those two.

Politically, Zelensky has not been able to get the domestic anti-corruption bureau NABU, established 2015 on Western recommendations, off the heels of people close to him. The preliminary peak came a few weeks ago when NABU uncovered a kickback scheme in the energy sector involving Timur Mindić, a businessman close to Zelensky.

As any corrupt Eastern European worth his salt, Mindić fled on a Mercedes S-Class, leaving behind his golden toilet in Kiev:

This already undermined trust in Zelensky and the authorities, but the investigation and eventual resignation of Yermak has taken it to a new level. This is the biggest fundamental change in Ukraine’s domestic politics since the start of the war. And it is to be determined what consequences it will have.

One plausible scenario is that Washington is leveraging (and driving) the investigations to soften up Zelensky. Yermak said that “while Zelensky is president,” Ukraine will not accept territorial concessions.

The other scenario, just as plausible, runs the opposite narrative: a domestic anti-Zelensky coalition wants to strip Zelensky of real power and turn him into a figurehead. This would come with more domestic repressions and a continued hardline stance against Moscow.

We should find out rather soon which one is true. I found one member of parliament saying the Rada (Ukrainian parliament) has to approve any peace agreement, and that there’s no majority for accepting the current US proposal.

What’s certain is that losing Yermak, who coordinated influence and power over the judiciary and the legislative, significantly weakens Zelensky’s grip on power. Yermak was a close confidant of his, someone who lived and trained with Zelensky since the start of the war. Even if he remains influential in the background, you cannot substitute continuous personal presence.

The result could be, at best, disrupted governance in terms of passing the budget and energy management. The worst case scenario for Zelensky is that this is the beginning of the end for him personally.

Oh but wait, there is more (bad news)!

I’ve talked about the slow but accelerating battlefield gains for Russia. Here’s a good summary why Russia has been gaining the initiative and started to grind out a military advantage:

The deteriorating political and military prospects are starting to show in the morale. The absent without official leave number for soldiers in October was the highest ever recorded:

The result are undermanned brigades and continued breakthroughs by Russia, which have to be patched up with redeployments, which again weakens another part of the frontline.

Russia also has (with the help of North Korea) a massive advantage in the production of artillery shells. And while Ukraine had some success with striking Russian oil refineries over the summer and fall, it hasn’t made a meaningful difference in the energy attrition war.

Russia’s strikes, on the other hand, might well make one.

Ukraine’s present position

Winter is coming and it might be a cold one in Ukraine.

This very insightful piece by explains how and why daily outage hours in major Ukrainian cities are surging. In short, Russia is striking the grid faster than Ukraine can repair it, leading to multi-hour outages across the country.

The problems still don’t end there. Ukraine is also facing a budget crisis, with a $65 billion hole in the next two years to be plugged. The country spends (or plans to spend) a whopping $120 billion on defense — far more than any other country in the world as a share of GDP.

This hole has to be plugged by Europe, which is why Europe is looking for ways to make use of the frozen Russian funds in Belgium. But we’ll get to that in a second.

To sum it up, Ukraine is facing:

• A political crisis weakening the president.

• A military crisis endangering its defensive position.

• An energy crisis threatening massive civilian disruption in the winter.

• A budget crisis undermining its capability to alleviate all of the other crises.

There was an op-ed in the Telegraph a few days ago accusing Zelensky of losing touch with reality. Instead of signing letters of intent to buy jets and gear, for which Ukraine has no money, Zelensky should be…well, what should he be doing? The op-ed, as any good op-ed written by somebody that’s paid to yap, provides no alternative.

But I’ll argue that Zelensky needs to develop a new theory of victory for Ukraine. And he must do so fast. As in, right fucking now if he wants to (politically, but maybe not only) survive.

Zelensky’s problem is that he’s too zoomed in on the war and doesn’t see the big picture anymore. You can’t really blame him for that, I guess it had to happen. But his narrow view of trying to achieve “a just peace” and continuing the same policy of leaning on Europe for money and arms and on the US for political backing has him constantly on the defensive. Let’s consult our wheel of ceasefire for a moment:

I see one party on offense (Trump admin), two on defense (Ukraine, Europe), and one that’s technically indifferent but practically on offense (Russia).

The current Ukrainian theory of victory goes something like this: we prolong the war in the hope that economic strain and battlefield losses will eventually constrain or destabilize Russia more than Ukraine. In the best case, protests and chaos force Russia to sue for peace or, even better, make it collapse. In the worst case, we lose the Donbas slowly and can still sue for peace at that point, having bled Russia dry. This, by the way, is also Europe’s theory of victory, by accident or design.

But as I outlined above, sufficient economic strain may be years away and Putin enjoys sky-high approval ratings. Sure, Russians would like to see the war end — on their terms. Sure, Russia has infantry supply constraints — but not as much as Ukraine. If one of the ongoing crises in Ukraine spirals out of control, this theory of victory may be toast very quickly. And in any case: how can you be sure Putin would stop at the Donbas if Russia gets that far? On the contrary, I’m certain the peace T&C would change if it got that far.

For better or worse, Ukraine and Zelensky need to put their spin on the current plan. Because in Trump’s terms, Zelensky indeed doesn’t have the cards now. But he can still create some.

What to expect from Ukraine

Back in August I wrote the following:

At this point, I think a bilateral agreement is very unlikely, though who knows what will happen in light of the recent Yermak shakeup.

But my other points are still valid. Why has Zelensky never turned to, for example, Kazakhstan as a mediator? While broadly aligned with Russia, the country is also trying to keep some distance and hasn’t supported the war. Kazakhstan is wary of Russia getting funny ideas and could imo be a credible intermediary if Ukraine wanted bilateral negotiations.

But that doesn’t solve Ukraine’s real problem: its sources of power are not diversified. Remember what I said about how Trump pacified Gaza:

“By squeezing Hamas (the weaker party), which in the end had no more allies backstopping its power and (was forced to) choose a (for Hamas) bad deal over a martyr’s death.”

He will try to do the same with Ukraine. And Ukraine’s backers are the Democrats (out of power, irrelevant), the Republican establishment (in power but limited influence), the US liberal media (relevant to shape US public opinion), and Europe (politically irrelevant, necessary and vital financially and militarily). Zelensky needs to create alternative sources of power and find new allies. Well, he should have done that years ago, but it’s still not too late (probably).

For example, did you know that bilateral trade between Russia and Türkiye has fallen by 20 percent over the past three years? These two countries aren’t partners or allies, they’re rivals. Why does Zelensky not turn to Erdogan more for military support and possible economic cooperation?

Or how about China? Sure, China is on the record saying it’s not in its interest for Russia to lose the war. But Zelensky should take a play out of Trump’s playbook and “talk to anyone”, including China. Ukraine’s drone industry already depends on Chinese components (as does anyone’s drone industry). So why not open a back channel with China to explore more cooperation?

On short notice, Ukraine needs to credibly deflect the parts of Trump’s peace plan it rejects. It needs to say ‘yes, but there are nuances’. For example:

• We accept a demilitarized zone in unoccupied Donezk Oblast, provided that it is manned by international non-NATO peacekeepers and becomes a UN protectorate. Example: the Free City of Danzig between 1920 and 1939.

• We accept a temporary ‘ban’ on NATO entry, which shall be unanimously renewed by all NATO members every ten years. In return we demand enforceable security guarantees by our allies and realistic caps on our military to ensure self-defense.

• We accept de facto occupation of our territories and their possible international de jure recognition. We are even ready to do the same, conditional on acceptance by a popular referendum and compensation by receiving X share of frozen Russian assets.

These would be tangible and imo realistic counterproposals that would address Russia’s demands, bend Ukraine’s red lines (territory, NATO, international treaties), and work within the constraints set by Putin. You could expand these and add tangible security guarantees, the size of the military etc. But these seem to be the most contentious points.

In conclusion, Ukraine needs to move from a theory of victory of hope to a theory of victory of negotiating a realistic peace treaty in light of constraints.

For what it’s worth, I don’t think this will happen. I’m saying it should. The more likely outcome is business as usual and inertia. Speaking of inertia, how’s Europe doing?

Player #4 — The EU

What happened in the past three months

Europe didn’t make the cut last time, because it was too irrelevant. So there’s nothing to review, but here’s a funny picture of daddy summoning his children after the Alaska summit:

Nothing really happened over the past three months, because nothing ever happens in Europe, especially not with regards to Ukraine.

But Europe is interesting and included this time since Europe needs this war more than anybody else. In fact, everyone has an interest in prolonging this war if you look at the incentives. Everyone except Trump, who wants a Nobel Peace Prize. But Europe more so than the others.

There’s a ton of cope on X about how Europe’s economy is going to zero. That’s an exaggeration, but the structural problems are real. And Europe has chosen the defense sector as one vertical to deflect its economic decline. This piece is cynical and somewhat exaggerated, but I still agree with most of its conclusions about why Europe is “all-in on Ukraine”:

• The EU is shifting from consumer manufacturing to politically protected arms production to make up for a shortfall in demand for cars & machinery.

• War is stimulatory and EU states take a play out of Russia’s playbook by boosting defense spending.

• Aid structures are set up in a way that EU defense firms benefit from cheap Ukrainian labor and backstops by taxpayers, while counting the expenditures towards NATO targets.

• The EU envisions Ukraine as a permanent, low‑cost manufacturing platform for European defense and possibly broader industry

I think there are security motives at play too (whether real or imagined), but you can’t deny the incentives. Show me the incentives and I’ll show you the outcome. The outcome: Ukraine’s current theory of victory → ‘forever war’

I also think the war is keeping simmering massive EU-internal strife at bay. Whenever peace comes, the EU will face the even more uncomfortable question of how to turn the Ukrainian shell state from a military outpost to a militarized civil society. Good luck with that!

The EU’s present position

But the EU also has some real urgent problems.

Remember Ukraine’s $65 billion budget deficit? Well, Europe could pay for that. Or even better, Russia could, in the form of loans against its frozen assets. The only issue with that is that you can’t just seize the money cause, y’know, Russia would seize a bunch of European assets in Russia. So you have to loan against the frozen assets.

But there are two teeny tiny problems with that. First, Europeans cannot agree on the mechanism for this loan since nobody wants to be on the hook in case it goes wrong. And second, the new peace plan floats using $100B of the frozen assets as a compensation for Ukraine, with 50% of the profits going to the US (because of course there’s a fucking scam involved in a Trump proposal!). That would mean the funds loaned against the frozen assets don’t go to EU defense companies selling to Ukraine and that is not in Europe’s interest at all. Show me the incentives…

So of course the EU came up with its own ‘peace proposal’. It was so delusional and removed from reality that the US straight up doesn’t disclose its own latest update anymore. I can’t blame them.

What to expect from the EU

Europeans still haven’t figured it out, but the US and the EU aren’t partners or allies anymore. At best they are competitors. Reality will eventually settle in, but it will happen when right-wing parties take power in major European countries and create a paradigm shift.

For now, don’t expect anything from the EU. Ukraine knows this too, which is why despite being mistreated and manhandled by the Trump administration, they continue to lean on the US for support. Alpha fucks, beta bucks. Look it up euros.

If any deal happens at any point, the EU will swallow the peace deal just as it did with tariffs. There is no unity or political will to resist Trump, no matter how much Europeans pretend this isn’t the case. Nothing has happened since Trump took office and nothing will happen with the current roster of political leaders. We simply continue on the slow and inevitable path of the ‘European century of humiliation’.

So, after all this loooong overview, let’s turn to the key unlocking peace in Ukraine.

The key dynamic I’m watching to predict the end of the war

After reading dozens of sources and writing thousands of words (anyone still reading at this point?), we can finally distill it down to my very simple mental model.

The war will end with either…

• A military defeat and capitulation of Ukraine

• A settlement with, most likely, unfavorable terms for Ukraine

How likely the latter is depends on the political and popular will in Ukraine to keep resisting and fighting.

That’s it. That’s all there is to it.

I could now cite differing quotes from Ukrainian soldiers, which show split opinions over the current proposal. Or a poll showing that there is still a majority rejecting territorial losses and their official recognition, even if a sizeable minority would accept. Or how accepting the deal could create Ukraine’s own ‘stab in the back’ narrative.

But I’m watching the following:

• How strong is Zelensky’s grip on power and how much do the various crises change his position?

• Is Ukraine ready to develop a new theory of victory, which would really be a theory of palatable loss?

• Can Trump repeat the same dynamic he successfully executed in Gaza?

Remember how he did it back then:

“By squeezing Hamas (the weaker party), which in the end had no more allies backstopping its power and (was forced to) choose a (for Hamas) bad deal over a martyr’s death.”

As long as the Ukrainian state has enough foreign and domestic sources backstopping its power, it will resist choosing a bad deal over a martyr’s death.

Or put simply, when Trump’s mental model of the conflict starts aligning with reality, he has a chance of making a deal.

When will that be? I wouldn’t know. Could be this year or next or in five years. It’s a moving target.

My bets

The part you probably scrolled down to right away. I mean you can just check my profile champ. BuckMySalls is not back from retirement but I had to activate him to take advantage of the very favorable odds on :

I know it’s a rather modest position for my standards. I have been more active from my other account and trading No on the same timeframe with bigger size and both sides on the Q1 2026 expiry. I have also traded Yes on the 2026 expiry and now wish I had held on to more. Polymarket seems to be adding monthly expiries and with my current assessment of the situation, I think holding short No and longer Yes is a good way to play it.

I realized some bigger positions after today’s development with Yermak’s resignation. I consider it so big and impactful for the future of the conflict that I’d like to see the initial repercussions first. In any case, it seems like this may help the topic stay relevant for longer than I thought over the past few days — one way or the other.

What’s next?

If you made it all the way to the end, thank you for reading! I spent a lot of time on this and hope you find it useful. Next deep dive will come in two weeks, but the topic is still TBD. Subscribe if you haven’t already done so and share the article if you liked it.

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Good luck and I’ll see you in the next one!

This week, we’re looking at:

• Mr Bin Salman goes to Washington

• Trump pivots on the Epstein files

• The Federal Reserve rate cut rollercoaster

• Marjorie Taylor Greene dies a hero

• An offer Ukraine can’t (or mustn’t) refuse

And, of course, the winners of last week’s Heel and Face of the week.

Let’s get to it, kittens!

Mr Bin Salman goes to Washington

The highlight of the week was, no doubt, MBS coming to Washington to shout out . Without a suit, no less:

I’m on the record for saying Polymarket’s brand is its strongest asset, so nice to see MBS validating my hypothesis.

That was the afterparty. Before that, MBS participated in one of the most entertaining Oval Office Trump press conferences I’ve seen. It lasted for a good hour or so — ticking off almost every mention in the process — and gave us:

• MBS upping the Saudi ‘investment’ in the US from $600 billion to $1 trillion (total revenues for the kingdom are projected at about $300 billion in 2025 *winkwink*).

• A Saudi-US security agreement, which “is a win for the America First agenda, making it easier for U.S. defense firms to operate in Saudi Arabia”.

• Trump rebuffing a question about the murder of the “extremely controversial” Jamal Khashoggi, which, according to the CIA, MBS ordered. We all had rough pasts!

And this very memorable clip of Trump having the time of his life with I-wish-he-was-my-son MBS:

Trump would not enjoy himself this much for a full three days until another Muslim man visited the Oval Office!

Trump, who is at heart an Ottoman ruler, tends to be at the top of his game when meeting Middle Eastern rulers (or in Zoran’s case simply Muslim men). There is a nice bit of alpha to farm based on that and I shared it in last week’s Fireside Chat with . Listen to the last few minutes of that if you want to find it :)

Trump pivots on the Epstein files

The other significant Trump story last week was his unexpectedly abrupt pivot on the Epstein files.

That led to Congress rapidly passing the Epstein disclosure bill, with the market on that training from 20% to 100% in a matter of days. I’m not quite sure what made Trump U-turn on the “Epstein hoax” so quickly, but I wouldn’t be surprised if he’s feeling the heat over his tanking approval ratings:

Whether something interesting ever comes out of these files is, of course, to be determined. Confidence in Trump actually releasing them is dipping, but I would expect this to happen at some point. Surely Trump has a plan for this, right? Right…?

.

The Federal Reserve rate cut rollercoaster

The financial markets had quite the week!

There’s crypto, which has been an absolute dumpster fire for the past six weeks. Don’t ask me how much money I lost (a lot) or where it’s headed next (I couldn’t care less, see previous point). Sentiment is as bad as I can remember since 2022. It’s probably due a bounce simply because losing 30% in six weeks is quite the feat, even for Bitcoin. But no idea how long it lasts or how high it bounces. I still expect lower prices in 2026.

Then there’s some funny stuff going on in traditional finance too. First, Nvidia announced record quarterly revenue at its Q3 earnings call and mooned in after-hours trading.

But then, Nvidia gave it all back and some the next day when the S&P500 lost 2% for no obvious reason.

And let’s not forget that Japanese bond yields are mooning, which is crushing the Yen. The remaining seven crypto traders with money left to travel to Japan can rejoice, with the Yen at 160.

I somewhat suspect the back and forth on the Fed’s December decision is at least somewhat to blame for the shakeout in trad markets. Remember that this was priced in only a few weeks ago at 90%. But then regional Fed presidents started worrying about inflation again, which in my opinion was caused by the affordability narrative in the media. This priced out the December cut. After an announcement last week that the Fed would not receive the latest inflation and labor market data in time for its next decision, all of a sudden a hold was favored. But then we had one more twist to the tale when a close ally of Chair Powell shilled a cut for the next meeting, flipping the market on its head one more time.

So, what’s it going to be: cut or no cut? Market up or market down?

I wish I knew. I think 25 bps chads look a little too confident again now. Currently, we have a 5-5 split on the board about the next decision, with Chair Powell and Vice Chair Jefferson still to signal their decision. Next week, the Fed enters its blackout period before the meeting, so we won’t hear from them directly either way.

I think the cut is rightly favored but overpriced right now. I’d price it at 60:40, with next week’s Beige Book release (the Beige Book is kind of a report of how the economy is going) to tip it decisively in either direction. If the Beige Book implies rising fears of a recession, the Fed will cut. If the economy is reported to be hanging in there, I expect them to do a 'dovish hold' and emphasize balance sheet reduction and likely cuts at the next meeting(s). Either way, an absolute nail biter and pretty much what I expected to happen ahead of Q4.

If you want a more detailed breakdown of the Nvidia and Japan meltdowns, check out Joseph Wang’s weekly recaps. They’re very informative:

Marjorie Taylor Greene dies a hero

Let’s return to domestic US politics for a quick but fascinating story.

One of the most unexpected spin-offs of the Epstein saga is the Trump vs Marjorie Taylor Greene feud it spawned.

MTG was once famous for being the conspiracy theorist-in-chief of the Republican Party. But she kicked off last week like this:

But it got only better from there. She finished the week by throwing in the towel and announcing her retirement from Congress in January!

Quite the pivot and dare I say it reminds me of myself getting pissed off at Polymarket’s incompetence and indifference and announcing my (public-facing) retirement.

Trump went from calling her a traitor last week to a “nice person” after she retired. What a surprise.

MTG will probably be one to keep an eye on. I doubt she can win the nomination and her current price looks overvalued to me. But (if she runs) she’ll probably command a significant and passionate minority that any other candidate would be smart to tap into. I can’t quite yet tell where her storyline is going, but I feel it will be worth watching.

An offer Ukraine can’t (or mustn’t) refuse

And then the big one last week. The one that nobody expected. The story that really you should have seen coming, though.

Every time Jeffrey Epstein is in the headlines, mysteriously a push for peace in Ukraine materializes. That was the case in August and it happened again last week:

The TLDR of the latest peace push: the US and Russia (or maybe just Russia with the help of the US, that part’s still unclear) have come up with a new plan for peace in our time™ in Ukraine. Ukraine doesn’t like it, Europe is alarmed by the wake-up call, and Trump is (maybe) threatening to pull support if Ukraine doesn’t sign on the dotted line by next Thursday:

As you would expect, there’s a lot to unpack in that story and that’s exactly what I’ll do in my next deep dive on the war in Ukraine. Here’s my last one and the next will be every bit as insightful (and maybe even more).

It’s coming by Thursday, so if you’re not yet subscribed, make sure you don’t miss it.

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Heel of the week

Heel of the week goes to Germany’s chancellor Friedrich Merz. He, inexplicably, managed to upset everyone even though nobody pays attention to him or to the Climate Conference in Brazil he visited. It’s pretty hard to upset Brazilians but Friedrich did it. A well-deserved and clear winner this week.

Face of the week

Face of the week has to go to Zohran Mamdani. You’d think nobody can make Trump happier than MBS after the early-week visit. But Mamdani said hold my burrito and one-upped this Middle Eastern nobody. Not only was the press conference I the Oval Office a total love fest, he even got Trump to post pictures of the two on his Truth Social. Well played Zohran, let’s see if you can follow it up.

Market of the week

Market of the week has to go to the insider-laden Gemini launch on November 18. It was quite the ride!

If you missed it, (supposed) insiders had loaded up on that day as Gemini launch day, but then a Cloudfare outage took down a good chunk of the internet and sparked some last-minute hypergambling. Lo and behold, the internet came online again, Gemini got launched as the insiders predicted and all’s well that ends well (if you bet the right side). I would imagine this wasn’t the last insider launch market rollercoaster. I’ll be keeping an eye out for the next.

What I’m watching for next Smackdown Sunday

What’s happening with peace in Ukraine?

This should be the story of the week. It’s Thanksgiving week, so markets will likely be quiet, but the ‘deadline’ on the peace proposal will keep things spicy. As I said, watch out for my deep dive…you might be surprised.

Which way, Federal Reserve?

I would expect to get consensus in the December market by the end of next week. But nothing is off the table with this one and I have a funny feeling that rate hold chads may have one more ace up their sleeve next week. One to watch.

Venezuela: so…we’re waiting!?

War or no war? Coup or no coup? The administration doesn’t seem to have decided, though the saber-rattling has been intensifying. A military strike by the end of the year is now at 59%, but I’m actually less confident than the market on this one. Does Trump really need another drone strike on his approval ratings right now?

Either way, I’ll keep you posted on how these go:

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Good luck and I’ll see you in the next one!

Well, if you’re Nicolás Maduro, the longest-serving head of state in Latin America at 13 years and counting, you tell the gringo bastards to bring it on!

The last few months have been rich with headlines: is Trump’s gunboat diplomacy an attempt to update the Monroe Doctrine to a 21st century America First model? Or a way to compliment Maduro out the door? Or an escalation of his War on Drugs?

Maybe it’s all of the above. But today, I want to take you on a fascinating ride through Venezuela to tell a story the story from a completely different angle. Here’s what I’ll look at:

• Venezuela’s fall from grace: how a former US ally went from rich country to economic basket case

• Trump’s battle plan: what does the US want and what is the end game?

• Venezuela’s assets and allies: can Maduro resist and who will back him?

• Regime change patterns: how Venezuela compares to Syria and Iran

• The latest developments and my forecast

The TLDR: I expect Nicolas Maduro to remain in power until the end of the year and resist the US’ kinetic strikes on his country, which will happen sooner rather than later. What happens beyond that is too complex for me to predict with sufficient confidence.

Venezuela’s fall from grace

The 1950s: Venezuela is a rich country

‘Tis the year 1950. Venezuela has the 4th-highest GDP per capita, even ahead of Australia and Canada. Thanks to high oil prices, the economy is booming under the rule of the military dictatorship that would stay in power until 1958. Caracas is bustling and an attractive spot for immigrants.

At the end of the 1950s, Venezuela’s real GDP/capita is almost on par with the recovering West Germany. A coup d’état replaces the military dictatorship with “Puntofijo”: a pact between the three democratic parties to respect and preserve the new political stability.

Venezuela is unbothered, in its lane, focused, flourishing.

Pre-1998 Venezuela: the tides turn

The good times continue to roll until 1978.

Oil production peaks in 1970. Per capita GDP in 1978. Venezuela is not as rich as OECD countries, but thanks to the oil embargo, it becomes the richest country in Latin America in 1973.

Still, the 1970s is also the time when the weeds start to unroot the Venezuelan tree of prosperity.

As oil prices plummet in the 1980s, so does Venezuela’s revenue. As any respectable petro state, Venezuela had spent beyond its budget and ran up its external debt from $2 billion in 1972 to $33 billion by 1982. It also nationalized the oil industry and established the state-owned company PDVSA in 1976. And even though the Puntofijo agreement established democracy, it encouraged patronage and normalized treating oil revenues as spoils to divide.

Instead of becoming Norway, Venezuela became a structurally corrupt state.

Different governments try to fix the Venezuelan economy through economic reforms like liberalization and privatization in the 1980s and 1990s. But Venezuela’s structural weaknesses — an overreliance on the oil sector and a fractured political system — catch up to it every time.

In 1999, the Republic of Venezuela ends and is replaced by the Bolivarian Republic of Venezuela. And with it, Venezuela turns from US ally to US adversary.

1999-2025: Socialist Venezuela under Chávez and Maduro

You may be too young to remember or know, but 1999 was the year the structural autocrat bull market started:

I don’t remember that much about Chávez’ rule or personality, but reading up on him reminds me of a well-known contemporary (autocratic?) leader. Here’s what the former vice president of Venezuela’s parliament in the early 2000s had to say about Chávez:

Might be me, but it sounds awfully familiar.

Anywho, Chávez launches a series of wide-ranging social programs (Bolivarian Missions) that provided adult literacy programs, free community health care to impoverished communities (run by Cuban doctors), low-income housing for the poor, and food subsidies.

These increased literacy levels and reduced poverty by 20 percent, bolstering his appeal among common folks. But as with any socialist worth his salt, these programs were paid for by extracting value from elsewhere — the oil industry.

Chávez slashed investment in the oil sector to fund the social programs. In 2002, PDVSA (the nationalized oil company) went on strike to protest Chávez’ rule and after two months, he gutted the company by purging the top management and almost half of the entire workforce.

Venezuela’s net petroleum exports never recovered from that — the country had to import light crude to blend with its heavy oil. Venezuela did benefit from the great 2000s oil bull market, but not as much as it could have.

Chávez also nationalized 1,000+ companies across virtually all sectors, with cronyism killing profitability and price controls sending inflation rates to the moon. In 2008, he expelled the US ambassador and in 2009, he signed an arms deal with Russia.

Under Chávez, Venezuela doubled down on structural vulnerabilities even as his charisma and rising oil prices created an illusion of success.

But the game was up in 2013, when Nicolás Maduro took the wheel after Chávez died of cancer. Maduro didn’t have either of his predecessor’s advantages: he’s not charismatic, and he hasn’t been polled as one of Venezuela’s sexiest men like Chávez in 2007. To Maduro’s dismay, oil prices had already plummeted by the time he took power.

This accelerated Venezuela’s vicious circle of falling investment and expropriation as the country became even more reliant on an ever less efficient oil sector. In a way, Chávez was lucky to take the easy way out, because “by 2017, PDVSA could not even afford to export oil through international water, which requires safety inspections and cleaning under maritime law.”

This contributed to Venezuela’s infamous goods shortages and hyperinflation.

Venezuela doubled down on its anti-US stance, getting itself sanctioned under Obama and Trump. Maduro survived two dubious elections in 2019 and 2024. Almost 8 million people have fled the country, over 20% of its total population. Most went to neighbouring countries like Colombia, but (in)famously, many also have trekked to the US via dangerous routes like the Darién Gap:

In this decade, Venezuela has, surprisingly, slightly recovered from its abysmal levels. Thanks to informal dollarization, inflation was down to single-digits in 2024, even though it has started picking up again this year. Oil exports have rebounded to 2020 levels. Venezuela is still a complete economic and political basket case, but it had at least stopped its terminal decline, or so it seemed.

So, why the fresh hell does the US seem compelled to rattle the cage right now?

Trump’s battle plan: what does the US want and what is the end game?

Trump I: Maduro survives the first one-two combo

Rewind the clock one more time. It is the year 2019 and President Trump is speaking in a multilateral meeting on the Bolivarian Republic of Venezuela:

That meeting came seven months after his rally in Florida speaking to Cuban-Americans and Venezuelan-Americans:

You may not know or remember it, but there is a fascinating “untold story” about Trump’s first try at regime change in Venezuela.

In 2018, Maduro had survived a dubious election but was under pressure internally and externally. His challenger, Juan Guaidó, was backed by the US. Trump reportedly even assured him he’d “pull off Maduro’s overthrow.” Maduro had the support of China, Cuba, Iran, Russia, and Türkiye.

Guaidó declared himself the acting president in January 2019 and subsequently tried to pull enough of the country’s political stakeholders, such as the military, to his side. But the coup failed in April 2019:

After a bunch of delays, Guaidó’s plan to overthrow Maduro was—finally—to come together on April 30, 2019. That day, Guaidó publicly announced “Operation Liberty,” exhorting military members to defect and calling for massive street protests. Trump administration officials believed that Maduro was close to abdicating the presidency, maybe even fleeing to Cuba. Then it all fell apart. There was a lot of miscommunication and mistrust between critical players in the opposition and Maduro’s equivocating supporters. At the last minute, major Venezuelan officials backed off the ledge. Mass military desertions failed to materialize. The Venezuelan high court chickened out. The protests were a flop. Maduro, bolstered by Cuban security forces at his side, rallied his supporters. The momentum had shifted against regime change.

But why did it fail?

Here’s how then-national security advisor John Bolton remembers it:

As the days went by, hawks like Bolton tried to keep Trump focused on ousting Maduro. The national security advisor wrote in his memoir that, in a late January 2019 phone call with the opposition leader, Trump had assured Guaidó he’d “pull off Maduro’s overthrow.” On that call Trump had also, Bolton writes, alluded to the US’s interest in Venezuela’s oil. But as various efforts plodded along, the president’s confidence in Guaidó’s team started to waver. Trump just wasn’t sure Guaidó was up for the job. In contrast to the “strong” Maduro, Trump thought Guaidó was “weak,” writes Bolton. The president began to refer to Guaidó as the “Beto O’Rourke of Venezuela.” In early March of that year, according to the memoir, Trump told Bolton, “He doesn’t have what it takes.”

[…]

“Trump never made it enough of a priority for the rest of the national security components of the government to step up” and help overthrow the Venezuelan leader, says a former senior administration official. “Haspel,” the source says, “was absolutely not inclined to lean forward unless someone brought her into the Oval Office and said, ‘You know, you have to do this.’ And it never reached that point.” What’s more, in September 2019, Trump pushed out Bolton, the most steadfast driver of the administration’s Venezuela-related efforts.

Oh but wait, there is one more amusing anecdote, according to Bolton:

Bolton attributed a change of Trump’s position to a comment made by President of Russia Vladimir Putin to Trump in a phone call that Guaidó’s claim to the presidency would be the equivalent of Hillary Clinton declaring herself president following the 2016 United States presidential election.

Of course, it’s all Putin’s fault! Stubborn history autist Evil KGB mastermind Putin strikes again.

I draw three conclusions from this reporting:

1. Trump thought about regime change in Venezuela in his first term. His main motivations were economic interests (oil) and plain old narcissism.

2. If someone else drives the effort, Trump is ready to do it if he can get away with an ‘easy’ win by backing someone that’s “strong”. He will back off if he considers the risks to his own reputation by backing a “weak” opposition become too great.

3. For Maduro to fall, the opposition needs to have a critical mass of defectors on its side. But whether that is the case will probably only be revealed when push comes to shove.

Trump returning to the Venezuela storyline follows a pattern I’ve observed this year: he is following through on projects he wanted to do in his first term but couldn’t quite execute on as he would have wanted to. It’s the same story with tariffs, clamping down on “fake news” and “the deep state”, dismantling renewable energy and pushing hydrocarbons, and improving relations with Russia.

I think the same might be true for Venezuela, even if it’s not a pet project of his. The question the becomes: to what extent are the conditions for regime change in place this time?

Trump II: war on drugs or another ‘operación libertad duradera’?

Trump is famously loathe to foreign US interventions. In 2000, he wrote “America has no vital interest in choosing between warring factions whose animosities go back centuries in Eastern Europe.” He also advocated for seizing Iraq’s oil, because “to the victor go the spoils.”

But he’s also not completely opposed to interventions if he considers the risk a calculated one and, in my opinion most importantly, sees the prospect of a PR win: see his assassination of Iran’s Soleimani in 2020, dropping bombs on Iran’s nuclear facilities, or lately launching strikes against presumed drug-cartel boats coming from Venezuela.

Venezuela has the largest oil reserves in the world. Even though it’s more difficult to refine than Saudi oil, it would fit Trump’s agenda of pushing hydrocarbons over “green new scam” renewables. There are all sorts of problems with unlocking those reserves, starting with decades of underinvestment and ending with whether an oil glut aligns with the interests of US shale. But I would opine that 'making Venezuela great again’ hits both Trump’s transactional and psychological inclinations.

Venezuela seems like a natural and useful ally to the US: a hydrocarbon-rich state in the immediate vicinity of its own hemisphere. It looks like a freak accident of history that it’s a hostile state, much like Cuba for that matter. Neighbouring Colombia has been a steadfast US ally for decades and those two countries are culturally and historically tied at the hip.

If a regime change were to be rather low-hanging fruit, I believe Trump’s track record indicates interest to engage in one.

But, who will be the project manager for this one and who would replace Nicolás Maduro?

The role of Marco Rubio and Maria Corina Machado

I believe Marco Rubio and Maria Corina Machado are to 2025 what John Bolton and Juan Guaidó were to 2019. Let me explain.

Marco Rubio, whose parents fled Cuba before Castro took power, is one of the most consistent and longest-standing critics of, among others, Venezuela’s socialist regime. As far back as 2012, he said Obama was “alarmingly naive” about Chávez and ascribed support for Iran and (narco-)terrorism to him.

If we are to believe reporting by The Atlantic, Rubio seems to be beating out Richard Grenell on how to manage Venezuela. Grenell was tasked with giving the US “access to Venezuela’s enormous oil and mineral wealth and forc[ing] tougher action on gangs and drugs.” But then Rubio got the president’s ear by portraying Maduro as the driving force behind the influx of Fentanyl and migrants into the US.

This seems to have resonated with Trump, famously abstinent from everything but hot women. So well, in fact, that Maduro has “offered everything” to the US and Trump does not seem interested in a negotiated settlement, at least not publicly.

For Rubio, toppling Chavismo is not only ideological. He admits Vance is the heavy favorite to win the 2028 nomination. But that doesn’t mean you just need to throw in the towel. What if the overthrow of socialism in Venezuela — and possibly at some point in his native Cuba — became Rubio’s signature achievement ahead of the next election? It would seal virtually the entire Republican Latino vote (and possibly not only the Republican). What signature achievement does JD Vance have to show for himself?

So, Rubio has a strong incentive to keep Trump’s focus on the ball. But, as I pointed out, he needs to set up the ground game to help Trump to an ‘easy’ win by backing a “strong” candidate.

Enter the 2025 Nobel Peace Prize winner: Maria Corina Machado.

She is a long-time activist and de-facto opposition leader. In 2024, she was elected as unity candidate to run against Maduro but was barred and subsequently supported the virtually unknown Edmundo González, who won a stolen election.

I think if the Trump administration were to compile their ideal candidate to lead Venezuela, someone with her views would be pretty damn close:

• Criticized Guaidó and disagrees with change through elections

• Called Maduro a “narco-dictator”

• Said “Being rich is, without a doubt, very good”

• Supports Javier Milei

• Praised Trump and dedicated her Nobel Peace Prize to him

While she reportedly doesn’t influence Rubio’s views, she sure seems to align a lot (maybe even too much) with the administration’s. Trump has called her a “very nice woman“, although it doesn’t sound like they had a lot of personal contact.

Machado has also beaten the drum for investment opportunities if the regime were to fall: how do a 300% increase in oil production and 2,800 kilometers of coastline sound to you? Needless to say that she’s been supportive of Trump’s approach thus far. But does she actually have enough defectors on her side to make this a rather easy lift?

Maduro’s grip on power: the known unknown

Machado claims that yes, she does:

She also says she is in touch with Rubio, though without any tangible commitments. Her and Rubio’s problem: Venezuela’s opposition always talks the talk, but never manages to walk the walk. As slippery as Maduro’s grip on power seems, nobody else has been able to control it either.

In fact, Machado’s rather aggressive position doesn’t seem to be the consensus:

And popular opinion in Venezuela is not on board with a foreign military intervention:

In the US, an invasion of Venezuela is underwater by -46 in a YouGov poll. This makes me think that the stars really need to align for Machado to seriously threaten Maduro’s rule. The underground network needs to be real and there needs to be enough dissatisfaction among the military’s rank-and-file for potential defectors to take the risk. A doubtful prospect.

Which brings us to an important question: is the juice worth squeezing the regime?

Venezuela’s assets and allies: can Maduro resist and who will back him?

Venezuela’s military: good enough to make it ugly?

Venezuela’s inhospitable terrain and the track record of failed attempts to overthrow Chavismo makes an invasion highly unlikely.

But kinetic strikes don’t equal an invasion. Similar to the one-time summer campaign in Iran, the extent of the strikes will likely be influenced by the potential resistance Venezuela’s military can put up.

On the one hand, Visualpolitik argues that Venezuela’s military is little more than a paper tiger:

• Under Chávez, Venezuela spent billions on Russian/Chinese weapons, but 20+ years of corruption, nepotism, economic collapse, and converting officers into narco-businessmen gutted operational capacity.

• Switching from Western to Russian/Chinese systems mid-stream meant abandoning decades of accumulated expertise, logistics, training, and maintenance infrastructure.

• Just as Chavismo destroyed PDVSA by empowering incompetent leadership, it gutted the military through nepotism and neglect.

• Officers prioritize business interests (=drug trade) over military preparation — training/maintenance gets neglected; professionalism evaporates.

• Much of Venezuela’s core arsenal is Russian, but the Ukraine war revealed the “logistical failures, technical deficiencies, and dubious maintenance” of Russian systems.

On the other hand, Maduro has thus far been able to rely on (enough) support by the military, militias, and guerrilla groups to hang in there. The regime is also backed by the Cuban intelligence network, which apparently helps to sniff out and clamp down on dissenters:

There is an opposition, but it’s unlikely to be unified enough and have enough assets within the established institutions.

There may be dissent and dissatisfaction among Maduro’s power sources, but it’s extremely difficult to say whether it is meaningful (as in Syria), or irrelevant (as in Iran).

There isn’t enough firepower to put up significant resistance against a serious American military intervention, but the lack of a clear follow-up to the first blow reduces its effectiveness.

And, last but not least, there is Venezuela’s network of allies and sponsors.

Venezuela’s allies: China, Russia, and…Colombia?

As is the case with many autocratic governments, Venezuela’s friend list is rather short and rather unreliable.

China received more than half of Venezuelan crude exports in February 2025. It has lent billions as part of its Belt and Road initiative and supported Maduro clinging to power in 2024. But China also doesn’t have the muscle or the appetite to meaningfully support Venezuela, much as was the case with Iran.

Russia is Venezuela’s primary arms dealer and “ready to help” in case of a US attack. Rosneft, recently sanctioned by the US Treasury, holds a 40% stake in PDVSA. And its influence in the Latin American country was big enough for Congress to pass the Russian-Venezuelan Threat Mitigation Act in 2022 to “to counter Russian influence in Venezuela.”

Colombia is not an ally as such, but an interesting an important local player. The country has been a reliable US ally for decades but has turned left with the election of “bad guy” Gustavo Petro, who condemned the American anti-drug strikes. He wants to end the war on drugs and has gotten himself sanctioned by the US. But he has also criticized Maduro and Colombia did not recognize the 2024 election results.

Much like Iran, Venezuela is pretty isolated internationally and could not count on a lot of substantial support in case of a US intervention. It would mostly end at the proverbial thoughts and prayers and strong expressions of disapproval. Not really that different from what the European Union does when the roles are reversed.

The main cost of a regime change operation thus boils down to how difficult it would be to pull off a coup in Venezuela.

For clues, let’s try to compare it to two other autocratic countries.

Regime change patterns: how Venezuela compares to Syria and Iran

One truly insightful features of prediction markets is the ability to go back in time and get a snapshot of live probabilities of events as they unfolded.

Syria and Iran strike me as the two most apt comparisons to Venezuela: autocratic governments presiding over economic basket case shithole countries. Their leaders have teetered on the edge of being ousted, but only in Syria’s case did it actually happen after several decades.

Here is the probability of Assad remaining president of Syria throughout 2024:

And the equivalent for Ayatollah Khamenei in Iran in 2025:

And here are Maduro’s chances to stay in power for another six weeks:

Assad was in power for 24 years before being deposed. The Ayatollah is at 36 years and counting. Maduro has clocked 13 years now — surely his odds of surviving another six weeks aren’t too bad?

Let’s do some back-of-the-envelope calculations for the three:

I think Venezuela is similar to Syria in the sense that Maduro depends on the military and cronies to keep him in power and is paying for that with oil revenue. Assad lost that backing when he ran out of money and the military didn’t put up any resistance when faced with a nominally weaker enemy. Maduro’s advantage: he doesn’t seem to have that problem.

Iran’s regime is similar to Venezuela’s in the sense that it has the benefit of oil revenue. But it also has an ideological/religious element Syria and Venezuela lack. And unlike in Venezuela, Iran (currently) lacks an opposition figurehead to concentrate any regime change efforts.

But Venezuela is also different than either because it faces only one, but the most powerful adversary, with a high potential payoff to replacing the regime.

If I had to sum it up, I’d say Maduro could end up like Assad if it turns out there is more dissatisfaction and dissent among his power base than meets the eye. But unlike Assad, this is probably not going to get stress-tested by combat, so the incentive to defect is small. That, and the previous failed efforts, make me think Maduro’s situation is more similar to Khameini’s, minus the theocracy part.

So, how is this one going to play out?

The latest developments and my forecast

Fresh from the unsecured phone of the “Secretary of War”:

According to the latest reporting by CBS and the Washington Post, Trump has been briefed about possible courses of action and the country’s leadership are deliberating the next steps. These include potential strikes on Venezuelan territory, which doesn’t mean they’re imminent. Trump has reportedly gone back and forth on this. In one presser, I remember him saying “the land will be next”, but he seems apprehensive of rattling the cage too much.

He said Maduro’s days are numbered, but there doesn’t seem to be a thorough scenario analysis or end game to an attempt to help with that. The administration has told Congress it doubts having the legal justification for a strike, but the Senate also voted against restricting Trump’s ability to attack

Meanwhile, Maduro is said to be entertaining a golden parachute if he was offered one:

Maduro would be open to a managed exit if the United States provides amnesty for him and his top lieutenants, lifts its bounties, and facilitates a comfortable exile, people who have dealings with the Caracas regime say. “If there is enough pressure, and if there is enough candy in the dish,” the person who speaks to officials in both countries said, “everything is on the table with Maduro.”

But then he’s also oscillated between defiant and nervous as hell:

Operationally, Visualpolitik argues this mirrors the pre-Iraq War 2003 buildup (intelligence gathering, positioning strike assets, establishing forward bases). It also reminds me of Russia’s build-up ahead of the Ukraine invasion. Many people called it a bluff back then, but do you really concentrate so many military assets just to send them back home with nothing? It doesn't make sense to me.

There was a false start at the end of October, which got denied. But the US hasn’t needed an aircraft carrier to strike drug boats, so why is it there now? It could all be an elaborate bluff, and I do believe Trump doesn’t know yet himself. Similar to how he didn’t know ahead of striking Iran (“I might do it, I might not”). The man’s brain works in mysterious ways.

Looming over all of that is, again, the Democrat Epstein Hoax™. We were here in August, when Epstein was overheating Trump’s presidential chair for the first time. Trump pulled a meeting with Putin in Alaska out of his hat back then and Epstein was forgotten.

But Putin’s busy in Pokrovsk and Huliapole right now, although he’s still ready to meet (to try again to convince Trump of his terms). So…would now be a good time for a Venezuela diversion?

Some interesting analysis from Metaculus here:

It seems to be that it would be an opportune time to do so, but there are also fundamental reasons at play. So here’s my best guess of what will happen:

Over the next three weekends, but possibly also in December, I expect a limited escalation that sees the US strike presumed narco infrastructure within Venezuela. This is firing the proverbial gun in the air after it was put on the table in previous weeks. I would also expect more narrative pressure on Maduro and some sort of effort to try to shore up domestic support in Venezuela to ‘test the waters’ for regime change.

Domestically, the objective would be to eliminate some (I’d assume real) narco infrastructure and test public opinion and Maduro’s reaction to this controlled escalation. Diverting from Epstein and any kind of positive reaction from within Venezuela would be a freeroll but not a must-have.

How this would look operationally is a bit harder to predict for me. I would imagine that similar to the Iran campaign, Trump would approve it only if the downside risk is close to zero. That was actually a flawless PR win for him. Engaging in Venezuela would be more complicated and costly, considering its Russian air defense systems that Bibi did not pre-emptively take out this time. But the build-up is so significant and rolled out over months that, again, I find it hard to believe nothing will happen (and remember “the land is next”).

That’s why I have taken some positions on the blue gambling app in favor of a military engagement this month and the next:

I have also taken a position on the green gambling app in favor of Maduro staying in power until the end of the year:

I expect this storyline to stick around for the next few weeks and possibly even months. I don’t know when it happens and I may be too optimistic on the short timelines, but I’d be shocked if nothing happened. It makes so much sense for so many reasons. One thing that does make me nervous is this big lone $200K No position. I don’t know if it’s an insider, but I can’t exclude it and it would not surprise me. So far, there has been no follow-up by others from what I can tell, but it’s something I am watching.

Y ahora?

Nada más!

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Each Sunday, I write a weekly round-up covering the madness of the previous week in prediction markets and current events. Often a lot of Trump and AI bubble involved. Here’s the last one — have a look, it’s good fun!

That’s all for now, catch you for Smackdown Sunday in a couple of days.

Good luck and I’ll see you in the next one!

This week, we’re looking at:

• Zohran Mamdani becomes the Mayor of New York

• Polymarket’s week: a truth machine or a wash trading bucket shop?

• Donald Trump’s falling approval ratings have the GOP sweating

• Marjorie Taylor Greene can’t stop producing bangers

• Is China going to win AI?

And, of course, the winners of last week’s Heel and Face of the week.

Let’s get to it, kittens!

Zohran Mamdani becomes Mayor of New York

Last week kicked off for real on Tuesday when Millennial Communist Democratic Socialist Zohran Mamdani defeated “Bad Democrat” Andrew Cuomo and cat savior Curtis Sliwa by 50.4% to 41.6% and 7.1%.

Congrats to Zohran Mumdumi, your billionaire supporters could not be more proud of you!

Mamdani, by proxy, also defeated much-better-looking President Trump thanks to his focus on what keeps the majority of NYC voters up at night: the cost of living crisis.

That capped a sweep of three Democratic election victories, which was expected (78% on election day), but still impressive: two of three beat their polling leads by large margins. Ironically, only Mamdani underperformed his polling lead (15% on ED).

The NYC election validated a trend we’ve seen in previous elections, such as in South Korea and Germany: young women vote (far) left.

This (conservative) millennial woman posited four reasons for why that is:

1. (Young) women get attacked by the right and vote left as an emotional response.

2. Women are tired of the divisiveness and, apparently, left candidates feel like the more uniting option.

3. Specifically Mamdani is a charismatic and strong (father) figure to (young) women — the type of strong man they identify with.

4. Left candidates present more appealing economic solutions, even if men disagree with how effective they are empirically. In other words, socialist policies feel safer.

To men, it may seem cynical or ludicrous that multi-millionaire Billie Eilish (before the election) called on billionaires to donate their wealth. But for this voter bloc in particular, it’s not about logic but about emotions more than anything else.

The election also validated a second trend we’ve observed: (urban) millennials are drifting further left. In New Jersey, the Democratic candidate won the 18-44 vote by roughly 70-30, according to CNN’s exit poll.

I have a still-unrefined thesis that over the next two decades, we’ll see the rise of Millennial Communism™. My three pillars of this thesis:

• Millennials have been scarred by the 2008 GFC and have traditionally leaned left — Occupy Wall Street and Woke were both shaped by and had influence on Millennials in their 20s.

• This contributed to Peter Thiel’s thesis of the rise of socialism. But there’s an important addition to this: Millennials will inherit the wealth of their Boomer parents and thus will soon have little incentive to destroy the system.

• Millennials have surpassed Boomers as the biggest demographic and will soon become the biggest voter bloc.

The result: Millennials feel like they were screwed, making them vote left. Once they control the levers of power, they will continue the policies of their Boomer parents — redistribution all the way, depending on whatever suits the Millennial voter bloc the most.

Tough luck, Zoomers!

Polymarket’s week: a truth machine or a wash trading bucket shop?

The election was also a big win for Polymarket, at least in Polymarket’s opinion.

Because the Truth Machine™ was right. Again™.

Polymarket seemed to have abandoned the “truth machine” marketing angle a while ago, but it ‘s back with a vengeance.

For some reason, the marketing team thinks this is a good narrative to push. I vehemently disagree: calibration of a forecast is not the same as its accuracy, as stats prof Harry Crane points out. In case you’re statistically illiterate, here’s an example:

Last week, Bayern extended their winning streak by beating PSG in their own stadium 2-1. But the Truth Machine™ had ‘predicted’ a PSG win, who were 40% favourites before kickoff. To my dismay, the Truth Machine™ glitched again yesterday, when Bayern’s winning streak came to an end — even though they were 80% to win away from home!

Does that mean Polymarket predicted ‘wrong’ or anything at all?

No. Over a large sample size, those two probabilities will average out to match the real probability of events. That is, PSG were indeed 40% favourites, give or take a few percentage points, as were Bayern a few days later. The market wasn’t right or wrong, it was simply well-calibrated. The same is true if you aggregate enough political markets — even if an individual one may be wrong.

But statistics is complicated and fools even billionaires like Bill Ackman, who thinks voters stay home because they see on Polymarket that their preferred candidate is a big underdog. No, they don’t.

Polymarket had a real win to celebrate, too, with its partnership with Google. Ironically, so did Kalshi, but Polymarket did a much better job at taking a victory lap.

My favourite slop betting app then capped off its week with a big childish fight with Kalshi over wash trading on Polymarket. A study amplified by Bloomberg found that, shocker, there’s a lot of it.

A bit of X drama ensued — it seems this study was commissioned by Kalshi (?) and, of course, each gambling app’s shills argued their business daddy has the less scammy more ethical marketing. Imo, a whole bunch of nothing, but another indicator that these apps have a long way to go in terms of professionalism.

Donald Trump’s falling approval ratings

The biggest fallout from last week’s election was the vibe shift against Trump: his approval ratings hit a record low.