Know Your Risk Podcast What Are Markets Missing Right Now?
Mar 12, 2026
A sharp look at market dynamics, yields, commodities and cross-asset moves. Detailed discussion of the Strait of Hormuz closure, supply chain effects and how few weapons can disrupt shipping. Exploration of oil-politics feedback loops, asymmetric naval threats and operational uncertainty. Notes on muted market reactions, options flows and scenarios that could trigger major repricing.
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Markets Are Muted Despite Major Supply Shock
- Markets are underreacting to a major geopolitical shock despite clear supply disruptions like the closed Strait of Hormuz.
- S&P down ~1.5% and oil up ~10% with two-year yields repricing rate-cut odds, showing a muted equity response to big real-economy risks.
Use A Bayesian Mindset During Geopolitical Shocks
- The situation is best viewed with a Bayesian framework: update models with each new data point rather than assume static outcomes.
- Zach Abraham emphasizes reassessing positions continuously because geopolitical events evolve and initial assumptions can be wrong.
Zach Admits He Underestimated The Crisis
- Zach admits he underestimated the situation early, thinking the U.S. wouldn't 'walk into this trap' despite carriers being deployed.
- He says he didn't take the move seriously until events proved the initial assumptions wrong.