Polymarket traders seem to be pricing a startling scenario: that the Russia-Ukraine war—Europe’s deadliest since World War II—could spiral into an even wider conflagration before year’s end.

Traders currently put the prospects for a “military clash” between NATO and Russian forces at about 17 percent. A die roll.

But what are traders actually pricing? And which events could be the most geopolitically consequential? I scanned the historical record and found some telling insights.

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Base Rate

In a rough screening of the record since 1950, I found some 21 likely qualifying incidents involving the U.S. and Russia/Soviet Union, for a base rate of roughly 17 percent–very close to where the market today is pricing for a wider NATO-Russia clash.

But the bulk of these incidents occurred during the early years of the Cold War before satellites reduced the demand for risky overflight recon missions. Strip those out and the post-1965 rate drops to single digits, roughly consistent with the adjacent U.S.-Russia market today.

The fact that the broader NATO-Russia market prices nearly three times higher likely reflects the alliance’s vast membership, its proximity to a major land war, as well as incidents like Turkey’s 2015 shoot down of a Russian jet near the Syrian border.

More recent U.S.-Russia encounters involving Reaper drones (2022 over Syria; 2023 over the Black Sea) may hold the biggest clues to how these markets might trigger in the months ahead. If the targeting of larger, unmanned surveillance drones lowers the threshold for a qualifying incident while lowering the stakes of one, the satellite-era base rate may be too optimistic, and the “early Cold War” pricing may not be as crazy as it looks.

Close Calls

Both markets define a “military encounter” narrowly: a fairly unambiguous use of force/weapons by the Russian or U.S/NATO militaries against the other.

This has not happened near the Ukraine war since it began. But the rules exclude several provocative incidents that have, highlighting how much escalation risk sits outside the market. For example:

• Intercepts of munitions targeting a third party*–During a massive Russian barrage against Ukraine last September, more than a dozen Russian Gerbera-type drones crossed into eastern Poland where several were destroyed by Dutch and Polish fighters. The episode was reportedly the first time that NATO aircraft destroyed hostile targets inside the alliance, and it prompted NATO Article 4 consultations (only the eighth in history).

• Dangerous interference short of weapons use–A Russian fighter jet collided with a U.S. MQ-9 Reaper drone over the Black Sea in 2023, damaging its propeller and forcing it down. The incident brought Russian and U.S. military assets into direct physical contact for the first time during the Ukraine war.

• Non mil-to-mil spillover–A Russian drone struck an apartment building in Romania in May, injuring two civilians. Again, an extraordinarily provocative event but clearly outside the markets’s rules.

• Gray-zone attacks–All of the above is just one band of conventional military escalation risk in a much wider spectrum that includes unconventional Russian military, paramilitary, and intelligence operations (e.g. cyberattacks, sabotage, assassinations). Western analysts have documented a steep uptick in these types of Russian operations–often called gray-zone activities since the 2022 invasion.

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Big Risks Below the Threshold

The record is somewhat reassuring about the risk for a catastrophic escalation: when qualifying mil-to-mil incidents do happen, they tend to be managed diplomatically.

But the increase in Russia’s gray-zone operations against NATO hints at a more insidious problem. One of Russian President Vladimir Putin’s strategic goals is to drive a wedge into NATO–particularly between the United States and European members–in order to undermine confidence in the alliance’s collective security guarantees.

Why would Moscow want an open military clash with NATO when it can keep probing the alliance through gray-zone activities, which are relatively low-cost, low-risk, and potentially more strategically valuable?

The danger is that more frequent and transgressive gray-zone actions by Russia repeatedly test and strain NATO’s collective response. A particularly egregious Russian operation, which some defense experts say could culminate in a limited ground incursion, might compel a NATO member to seek an Article 5 declaration.

What to Watch

There are a few things traders might want to track that would shift the risk environment around these markets and move the odds of a mil-to-mil encounter:

• Rules of Engagement. NATO members have discussed altering the alliance’s classified rules for when and how allied forces engage Russian drones or aircraft, potentially allowing for a more forceful response. European states also have their own ROEs, and some, such as Lithuania, have already altered them. Any shift could matter for prediction markets.

• Force posture. Watch whether NATO reinforces or reorganizes–as with Eastern Sentry– its eastern flank. More military assets on the alliance’s frontier could improve deterrence but also put more allied systems into the airspace most likely to see a qualifying incident. Meanwhile, the Trump administration’s recent cancellation of some planned military deployments to Europe underscores how quickly the American posture can shift.

• Drone War. The scale and pace of the drone war in Ukraine, already extraordinary, continues to expand. The more drones both sides put into the air, especially near NATO borders, the greater the chance of military-to-military spillover. A qualifying clash in these markets may be most likely to begin with a UAV incident at the edge of alliance airspace.

* only applicable to the NATO-Russia market

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

TheMaineWonk is a Democratic strategist based in northern Maine’s conservative second congressional district.

He’s watched Republican Susan Collins skate to victory over and over by bringing home the pork, but thinks this cycle is different.

The Oracle spoke with him the day before the primary about who’s behind the Graham Platner oppo dump, possible game-changers in the campaign, and what to watch on election night.

This interview has been edited for length. All answers are his own.

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🚨 Just In: Before hitting publish on this piece, we received this audio update from MaineWonk breaking down yesterday’s primary results. Listen here 👇

Maine is one of the key Senate seats Dems are hoping to flip. Give us the state of play.

Maine’s politics are incredibly unique, and Maine is infamously difficult to poll accurately. The one thing that makes Maine more unique is the tariff aspect of being a border state. We do a lot of business with our northern neighbors, and relations have been a little tense between the Canadians and the US over the last 18 months or so. And Mainers do not take well to having outside forces, whether it’s establishment politicians or establishment media, trying to influence them.

Susan Collins has been written off in every cycle and keeps winning. What is it about her?

The number one currency in Maine is personal relationships. It’s not campaign ads, it’s not literature, it’s not Twitter posts or Facebook posts. In Maine, it’s two degrees of separation: either you know your representative or senator directly, or somebody close to you knows them and knows their story, knows their family, knows their background. Collins is from a big family in Caribou, Maine, and these folks have networks.

The second point is that Susan Collins is one of the most powerful Republicans in the Senate. She’s chair of the Senate Appropriations Committee, the most powerful committee, because it deals with all of the money. In this presidency there’s been $460 million allocated to Maine through pork barrel projects. $400 million of it has come from Susan Collins. That is how she does it. She hasn’t had a town hall in 30 years. She campaigns through press releases, going to VFW halls, going to fairs, going to parades. She stays away from answering tough questions. Her avenue to win is: “I bring home the bacon.” If I stay in the Senate, I’m still going to be a chairperson or ranking member. Graham’s a new guy, he’s going to go to the back of the line.

The question is, is it going to be enough? And my answer to that is, I don’t think so. Not in this cycle. She has high net negatives. Last polling averages have her at a net negative of minus 13, minus 14. You’re in an anti-incumbent cycle. People are fed up with the status quo politician, and there’s nobody more status quo than somebody who’s been there for 30 years. And the president, who is the head of her party, has a negative 25 or 26 net approval rating in Maine.

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Let’s talk about the Democratic candidate, Graham Platner. Where did he come from and what is his story?

Graham grew up in Sullivan, Maine, about 35 to 40 minutes from where I’m sitting right now. He went to John Bapst, a semi-parochial private school in Bangor, went to the Marines, went to George Washington University, went back into the military after that, came back to Maine after his deployments and started his oyster company around 2018. As a disabled veteran, he lives off his benefits and the small money that comes in from his oyster farm.

Graham and I met about seven, eight, nine years ago through mutual friends. Everybody outside of Maine doesn’t understand how small Maine really is. There’s only 1.4 million people here. I was just in Bar Harbor the other night with Ro Khanna and Graham and his wife Amy and Troy Jackson, who’s running for governor, Matt Dunlap, who’s running for Congress, and some others, and we were all just marveling at how we’ve met and how we’re connected. That’s just how Maine is. Everybody somehow, some way, knows everybody.

As far as how they found him, this is not a secret in political circles, there are people out there in activist circles that go and recruit candidates. Some of the mainstream Democrats in Maine were not interested in jumping in this race, many were running for governor. When Graham got in and shot up like a rocket, his fundraising was through the roof. That’s when the establishment Democrats started to get nervous, your neoliberal corporatist Democrats, the Chuck Schumers of the world, and they had to dragoon Mills to get into this race. She didn’t want to run. The people behind Graham are the same people that ran Mamdani’s campaign, the Fight Agency. The same people that ran Fetterman’s campaign.

I actually like that he is not polished, he hasn’t been groomed to run for office his entire life. His story of going through the military, coming out of it with PTSD, going to seek therapy, still working through that, I think that is commendable.

A series of oppo stories has come out just a few days before the June 8 Primaries. How much has it moved the needle?

The movement in the polling has been nominal at best. Both sides have put out internal polls, and the one that really stuck out to me was the internal poll released by Collins from Fabrizio Ward, a Trump pollster, showing it a dead heat, even after all of this. And that was before the Bar Harbor event, when the amount of media on our tiny island…you would have thought the Pope was here.

This was Graham’s first big event in front of cameras since the oppo dump, and all the news reports after fascinated me. Even Fox News, you go back and watch the field reporters they had here, they were talking to voters up and down the coast, and they were all telling you what I’ve been saying: nobody cares. Mainers don’t care about the personal character stuff.

I saw this with Trump in 2016, you could throw every scandal you want at him, it may stay in the 24-hour news cycle for a couple of days, and then it fades.

The severity of the attacks is going down. First it was the tattoo. Then it was the Reddit comments. Then it was the Kik app. Now the last attack from the Maine Wire this week is that Graham’s oyster company and his campaign website were set up at the same time, meaning the oyster company isn’t real, which is not true, and already been debunked. I think they realize they can’t figure out how to take him down, and his support is actually growing.

Polymarket odds for Platner went from around 75-80% before the oppo dump, down to 50, and are now recovering to around 62%.

As I’ve said, this race was always going to be close. The early odds of him being 80-20 — okay, this is Susan Collins, and we’re talking about Maine, which is incredibly difficult to poll accurately. I think what you’re seeing right now is pretty damn close — 60-40, 55-45, 50-50, somewhere in that range makes sense to me.

Now, who are the swing voters in Maine? The people that are going to decide this election are the people who were either independent, or Republicans that voted for Kamala Harris in 2024. That’s key. When you see polling come out, look at the cross tabs instead of looking at the top line. Look at people that are registered independent in that boomer age group. Look at people that are identified Republican in that age group. Start to see if you see any movement there. Both sides are going to have their base, that swing voter is going to decide the election in Maine.

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What is Graham’s actual platform? If you go to a Graham Platner speech, what does he hit?

Health care is one of his top issues. He’s a Medicare for All person. He talks about rural hospital closureS, the One Big Beautiful Bill that passed in the Trump administration basically decimated rural health care. We’ve had hospitals already close in Maine because of that. He’s your classic populist going after the elite class that he believes isn’t paying their fair share in taxes, that they’re getting all these tax breaks while working Americans are seeing higher inflation, lower services, and higher tax bills.

He’s the same cut of cloth as AOC or Bernie Sanders or Ro Khanna. And by the way, this has been a long time coming in Democratic politics. The frustration with the National Democratic Party has been that they focused on identity politics when the one thing that is still essentially identity politics, but is not race or sexual orientation or religion-based, is class-based. It’s middle and working-class America versus the elite class. You’re starting to see those changes in the Democratic Party, and it’s resonating.

What about the Israel question? He’s been described as an Israel-skeptic. Is that fair, and does it help or hurt him?

You’re spot on. Any cross tabs in the polls show a pretty good sample of Democrats that share the same view Graham does; about Gaza, about deterring and stopping funding of Israel. That is a key component of that Democratic coalition. And at the national level, a lot has been made about the autopsy report from 2024, where Democrats lost Michigan because a lot of Arab Americans voted for Donald Trump. I’m willing to bet those folks do not support the president now.

To the normies, the people that aren’t in the weeds of this every single day, they want to know simply: how are you going to make my life better? How are you improving the economy? Why do I have to drive 100 miles to go to a hospital? The national stuff plays in, but it all really comes together.

Will the Democratic establishment try to sabotage him?

He has said Schumer shouldn’t be the majority leader, and I believe the majority of Democrats will tell you the same thing. Schumer has already endorsed Graham. There was a well-covered meeting after these stories came out last week, Graham went to Washington and met with senators including Schumer, Gillibrand, Warren, and Sanders. The one way you’ll know if Graham is in trouble is if any of those folks withdraw support. You’ve seen the opposite, they’ve doubled down.

The one person I thought was really interesting is the godfather of establishment Democratic politics: James Carville. Carville endorsed Platner this week in a funny way, where he essentially said, maybe this is what we need…For an establishment Democrat from Louisiana, who is most certainly not a leftist or a progressive, to realize what Maine’s politics are about and why he’s a good fit for this cycle tells you something’s happening.

If you were a Platner YES holder on Polymarket, what would make you panic and dump your shares?

Number one, of course, is people who have endorsed him withdrawing their endorsement. Bernie’s obviously the big one. Ro Khanna would be another. Elizabeth Warren would be another. Tim Walz was the first person out of the gate to endorse Graham, had an event here in Portland at the very beginning of the campaign, so I remind hardcore Kamala Harris supporters who are anti-Graham that Kamala Harris’s own VP candidate was one of the first people to rally for him. If one of the most popular Democrats in the country says something negative about Graham, AOC being one, Barack Obama being another, that’s important.

On the flip side, what would make me want to buy more of Graham: post-primary, the rallying that’s going to occur. I guarantee the press stories on Wednesday will be: despite all the scandals, despite all the red flags, the people of Maine have decided it’s Graham Platner. That’s when you’re going to see the rest of the Democratic Party, who’ve been a little wishy-washy, come in, both inside the Beltway and with donors.

Unless there’s what I call the Hindenburg, the nuclear bomb, the one thing that could possibly do it, they’re not going to be able to sustain this. And at some point people are going to say, are we going to talk about the economy at any point? Are we going to talk about the rural hospitals that are closing? The lobster catch in Maine last year was the lowest in 17 years, prices are dropping, diesel prices are higher, fishermen are getting out of the business. That’s what this election is ultimately about.

Will Collins debate him?

If I’m a Susan Collins advisor, I’m avoiding debates. Just the optics alone of a 73-year-old woman who has visible health issues against a young 42-year-old who has an aura and a presence when he speaks with that deep baritone — you put them on television, that’s quite the comparison. I would compare that to the Biden debate that basically derailed a presidency. Where you went out there and look like a damn zombie against a vigorous Donald Trump. That’s an optic you want to escape. She’s going to have to debate eventually, especially if this race stays tight.

One thing I’ll tell you: it’s been a rumor all cycle that Susan Collins didn’t want to run for reelection. This was the latest in her 30-year career that she made an announcement she was running, and it came after the National Republican Senatorial Committee promised $40 million in ad spending. That’s when she jumped in…This is the first time Collins is going to have to campaign hard. I’m not sure she’s up for it.

On election night, where are you watching to get an early read of how the day went?

We only have two congressional districts. Any Democrat is going to win Congressional District One, that’s Portland, no Republican will ever win it. Congressional District Two is where everything happens. Trump won that district by nine points in 2024, but a Democrat has won the congressional seat the last three cycles. That’s what I’m looking for.

Susan Collins in 2020 won Maine’s second congressional district by 24 points. The last polling has her winning it by only five — that’s major. If Platner makes Maine CD2 competitive, if she only wins that district by 10 or 12 and he runs up the score in the Portland district, he wins. That’s the key.

On the coast, Hancock County up to Washington County, right up to Canada, those will come in first. Those are the population centers here. You have Bangor two hours inside. That’s where he’s going to try to run up the score. And then the coastal communities, which are less populated but more liberal. Much like the Trump model of winning by running up the score in sparsely populated counties, Graham’s going to follow the same playbook, going to his liberal strongholds in Bangor but also driving turnout in those coastal communities with registered voters who aren’t necessarily likely voters yet.

Big picture, Democrats need Maine to take back the Senate. How do you see the path?

The Democratic path to the Senate majority hasn’t changed. They need to win Maine, North Carolina, and Alaska. North Carolina is basically settled. Cooper’s going to win by seven or eight points. Alaska, Murkowski challenger Sola is ahead of Sullivan. Then Maine, which we’ve already talked about. That’s three. Then they only need to win one more. Texas, Ohio, Nebraska, Montana, Florida is competitive, South Carolina is going to be interesting because of Lindsey Graham’s unpopularity. All they’ve got to do is win one.

And if Graham doesn’t win, you still have Ohio, where Sherrod Brown is leading. You still have Talarico in Texas, who I think has the best chance Democrats have had to win Texas since Lloyd Bentsen– I think the Senate ends up 51-49 Democrat or 50-50. That’s where we’re headed.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

Chris DeMuth Jr. is the founder of Rangeley Capital, an event-driven hedge fund, and writes Sifting the World on Seeking Alpha and Substack.

In his first Oracle conversation, he named Paramount as the likely buyer of Warner Bros. Discovery while Netflix was still the heavy favorite.

Now he is back to chat about the rightward shift in Latin America, and the latest M&A chatter around eBay, SpaceX-Cursor, and more.

This interview has been edited for length. All answers are his own.

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You’ve been looking closely at the upcoming elections in Latin America. What stands out to you?

The rest of Latin America is going the way of Argentina. I had big equity positions around a Javier Milei victory. I will disclose I was a supporter of his. As an investor I was actually unduly tepid in the short term, because I thought a man that principled would take a lot of short-term pain to get things right long term. It went extremely well almost immediately. Even the things I flagged as caveats turned out fine. Argentina has been a triumph, and I think everybody else is going to follow. I have the same view now in Chile, Colombia and Peru, a little less edgy than a few months ago, because they have gotten more priced in.

Colombia is your big one. What did you see there?

Espriella was super, super undervalued in April, under 25%, when he should have been at least 50/50. The right is united in Colombia, with the moderates and the conservatives consolidated around somebody offering a combination of El Salvador tough-guy with Milei libertarianism, which is going to be very popular there. That unity is exactly what was needed.

The dynamic was a jungle race with two brands of conservative against one candidate on the left. There is a shyness among the conservatives, an effort to look a bit more moderate, and then they consolidate. It looks similar to early Trump, where a lot of Chamber of Commerce Republicans would not have gravitated toward him stylistically but were almost unanimous in collapsing their support around him once it became binary. I watched the same thing happen in the Colombian business community, including a prominent ex-president. I built the call on polls, second-choice data, and connections to people in the country with real money on the line. It is hard to get excited about a market already sitting at 85% in Latin American politics, but the read I really care about is that this is going to be extremely good for Colombian equities.

And Peru?

I feel less sure about Peru, but I think Fujimori wins. It is a smaller market, less connected to the US, though there is interesting mining exposure, including lithium and electric vehicle minerals. She is the more business-friendly, more conservative option. Our right-left terminology grafts onto Peru less cleanly, and the recent left there has not been terrible to deal with, so it is a softer version of the Argentina story. But it fits the same theme, the Mileification of Latin America. She is going to win an election that is good for equities and good for mining interests.

You have professional interests in Venezuela too. What is the angle?

I am very interested in Venezuela, though it is more an investing interest than a market call. My exposure there is largely on the gold side, several claims pending resolution, and some of it monetizes through the Citgo auction. The current political situation opens up a lot of different ways to win.

Venezuela is also the perfect lesson in reading the footnotes. There is a Maduro market where it matters enormously that he is officially still president even after everything that has happened. People trade on a casual understanding of who is in charge. The actual resolution depends on the precise terms. It is the same discipline as reading a definitive merger agreement instead of the press release some PR person wrote. The filing is what is legally binding, not the verbiage.

You mentioned your equity book is aligned with these political views. Could a prediction market work as a hedge?

In principle, yes, and it is something I am watching, especially where you can get leverage and an option-like payoff. Right now my equity exposure already points the same way as the politics, so it is really a Texas hedge, which is to say not much of a hedge at all. Where it gets interesting is an isolated political blind spot. Say you have a big position in Fannie and Freddie and you are worried Republicans get hammered in the midterms, Democrats launch investigations and impeachment, the administration gets distracted for two years and then gets replaced. That would be doomy for those names. A big bet on Democrats sweeping would be the offset. That is the kind of structure these markets are built for.

It is also where the space is going. The hedges that are barely worth the effort at small size today are exactly what I would want at tens of millions once the liquidity is there. As the institutional desks show up, there will be real depth on these markets to hedge corporate events at scale. I want to get smart on that now.

Let’s turn to your day job, merger arbitrage. Which deal looks most mispriced right now?

GameStop’s bid to buy eBay. I think the correct odds are zero. If you had ten or twelve things to check on whether this gets consummated, all ten or twelve give you a clear answer. It is a much smaller company making a bid for a much bigger company, with no credibility on any aspect of it and no financing in place. The oddness of it is that they never even approached the target. In the most hostile situations I have ever looked at, you at least walk up to the potential target. This was just something they said.

I could launch a bid for eBay too, in the sense that I can tell you right now I will buy eBay if somebody gives me financing on terms I want and the other side agrees to it. That is completely unserious. The NO side at 85 cents on the dollar pays better than a savings account, and it lets you express the view without ever shorting the stock.

Why does not having to short the stock matter here?

Because I actually like eBay. I think it is undervalued, I would not want to short it in size, and in the days after the bid it was trading well, so you could lose money shorting it even if you are completely right about the deal. The appeal of a prediction market is that the deal failing becomes its own instrument. You can take that view directly, with no opinion on where the equity trades. You do not need a theory for why GameStop did this. You just need to be right that it will not happen.

One caveat I give everyone: triple check the rules, always. I read a market description the way I would read a press release, then I go read what is actually binding. There was an aliens market where the description was not about a three-eyed man landing, it included any senior official making the claim, which made it much wider than the headline suggested. You are allowed to be wrong. You are an idiot if you are not even looking at the thing you think you are looking at.

You have been watching the SpaceX and Cursor market, which is unusual because Cursor is private.

That is what makes it interesting. There is now a way to do pre-merger arbitrage on a private target with no publicly traded stock. The market was a little better than 50/50 when it first appeared. It is now in the 80s. I believe SpaceX is not just going to acquire Cursor, I think they have already determined that they want to. Elon wants it, and Elon is good at getting what he wants.

There was an entertaining public back and forth. He wanted to buy them while SpaceX was in the quiet period before its S-1, and the lawyers would have torn their hair out, because you cannot do major M&A then without redoing all your filings. So it is a poorly concealed, already negotiated deal that I expect to go forward in the weeks following the IPO.

Last time we spoke you were on the Warner Bros. Discovery deal. How is that playing out?

Really well. That was something like one in three when I first mentioned it. We then got a definitive deal announced with Paramount as the buyer, which is the side I had favored and the side I was long in the equity. They have very good antitrust counsel and are farther along in the approval process than I would have guessed. They have German approval and a handful of other foreign approvals, and they have aggressive, bordering on audacious, plans to slam this shut.

The market now puts a successful close around 83%, and I think even that is a little low. On a roughly 31 dollar cash deal with about a 4 dollar spread, the math is a 46% IRR assuming an October close, which is my timing assumption. The scuttlebutt is that they want to slam it shut in July, so the real number is better than 46% if it pays out that fast. I discount the timing even beneath what they think they can do, and there is still upside.

It reminds me of Tegna, where they closed and did some of the litigating after. As a shareholder that is fun, because you get cashed out before you have to worry about whether they win. Caesars was similar. I was a shareholder, the deal was not rich, so the stock popped only a percent or two on announcement, while the market on the deal itself roughly doubled that day. Practically nothing in the equity, everything in the deal.

Final words of wisdom?

My compliance officer would kill me if I said riskless, or free money, or a lock, so I will not say any of those things about GameStop and eBay. But if somebody else said it, I would not disagree.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

Hedge fund manager by day, Substacker by night, Anusar Farooqui has a background in military history and holds a PhD in black hole geometry.

Just one week into the start of the Iran war, Farooqui published “Why the US is facing strategic defeat“ on his popular Substack, Policy Tensor. The piece argued what was clear to him at the time: that the United States could not win the war by any definition of success.

As Trump alternates between teasing a deal and resuming strikes, according to Farooqi, the realities of geography and drone warfare have already determined the outcome.

The Oracle spoke with him about how he developed his call, the destruction of American bases in the Gulf, and why Iran now controls the most powerful strategic weapon in the world.

This interview has been edited for length. All answers are his own.

Your "US Strategic Defeat" piece went viral on March 6, one week into the war. What did you see that others didn't?

Courtesy of Policy Tensor

By the end of the first 72 hours, the decapitation path to a US win had closed. If you could take out Iran’s leadership and shatter its ability to coordinate, you’d have a path to victory. But Iran isn’t a power structure like Saddam’s or Assad’s. It’s not one junta. It’s a deeply institutionalized regime with many centers, and they had spent years hardening it against exactly this kind of strike. So that was gone.

That left two ways to win. One was coercion: bomb the enemy into submission, destroy his will to fight. That’s the original fantasy of air power, and it has never worked, not once. Robert Pape documented at length that no coercion campaign has ever succeeded this way. The defense establishment knew the history perfectly well. What they were claiming was that precision strike is now so good, we can see and track everything, that maybe it works this time. That’s protecting a failed hypothesis. In reality, there was no possibility of air coercion yielding capitulation.

So the only serious theory left was interdiction, the official Air Force theory. You destroy the enemy’s ability to field and supply its forces. In this case, that meant destroying Iran’s capacity to make and launch drones and missiles faster than Iran could rebuild it. So I built a model. Very simple, attrition-style. You look at the rates each side needs. How fast can the US destroy these sites? And how fast can the Iranians rebuild them? When I ran the numbers, the rates required for the US to prevail were not plausible. Not even close. I was able to make a high-confidence call very early, and I may have been the only analyst who flipped to “we lose” who hadn’t already believed it going in.

So this wasn’t your prior view going in?

No. Like the rest of the defense community, I believed the United States was certainly powerful enough to defeat Iran. I was wrong. I corrected my thinking because that’s what the math told me.

So why did interdiction fail?

Two reasons. First, people assume cost is the problem. It isn’t. The United States is so bloody rich that cost-exchange ratios can’t defeat us. We can spend two hundred dollars for every cent Iran spends and still win. Money was never the issue.

The issue is physical. Iran’s drones are technically loitering munitions, not reusable drones. The Shahed-136 is a poor man’s cruise missile — an air-breathing weapon, slow, extremely cheap, and extremely effective. They can be made in a basement. And it’s nearly impossible to find from satellite reconnaissance. You cannot identify where these things are being made. You cannot interdict the process by which Iran generates strike capability. If it had been drones alone, you might pour everything into defense and manage it.

But it wasn’t just drones. The missiles were the bigger story. According to JINSA, a reliable Israeli source, Iran fired roughly 2,200 medium- and short-range ballistic missiles. That’s as many as the Pentagon told Congress were in China’s arsenal last year. . And Iran still has 70% of its missiles left. We had catastrophically underestimated Iranian power. Iran is a great missile power, a technological and quantitative leader in precision mass, and we simply hadn’t priced that in.

You’ve said the most telling early signal was the radars. Why?

Because of what they are. They hit more than a dozen radars, including four AN/TPY-2 radars that power the THAAD system, the most exquisite missile-defense system in the world. These are not soft targets. An AN/TPY-2 is one of the most sophisticated objects on earth; the radar engineers who build them are rarer than rocket engineers. And it isn’t defended by itself alone; it’s ringed by Patriot batteries firing dozens of interceptors at anything that comes near it. It is the most well-defended fixed object on the planet.

If Iran can get a hard kill on that radar, what can it not get a hard kill on? Once you see that, the rest of the counter-force picture falls into place.

There were reports of US bases being destroyed across the Gulf. How bad was it?

Iran destroyed all US bases on the Gulf littoral. Kuwait, UAE, Bahrain, Qatar, Oman, even as far away as central Saudi Arabia. The biggest losses were at Prince Sultan Airbase, which is where we lost the E-3 Sentry airborne command post. Once you understand that Iran is a great missile power conducting a deliberate counter-base war against American assets, and then you look at how that played out, it was catastrophic for the United States.

There was also a report about an aircraft carrier leaving the area due to a laundry room fire. Do you buy that?

Absolutely not. And I think the Ford was likely hit and it’s being covered up. Aircraft carriers are specifically designed and tested for fire risk. Fire is the single biggest threat to a ship; there’s an entire regime of regulations and inspections built around it. These vessels are supposed to function in the middle of a war with a great power. A laundry room fire forcing a carrier out of the theater is a six-sigma event. When was the last time a laundry room fire emptied a building in New York City? It does not add up.

The downed-pilot story is the same. There was an enormous amount of talk about a heroically rescued airman, and then he simply vanished. Where is he? Look at the scale of that episode: never fewer than 150 aircraft involved. You don’t surge 150 aircraft to recover one pilot. That was an operation, almost certainly near the buried enriched uranium, which would have been a major prize for the United States. It failed, and we took heavy losses. The down-pilot story was the front; the laundry fire, the down pilot, the Kuwaiti ace supposedly downing three F-15Es in a single sortie: these are all information operations. The details in each one collapse the moment you ask basic questions. And the reporters carrying these stories aren’t asking them.

What about the threats to bomb the infrastructure? Is that what is bringing Iran to the table?

That’s the counter-value theory: destroy the power plants, the water treatment plants, the running water, push them back to the Stone Age, make Iran look like Gaza. It assumed a one-sided war of punishment. It was not one-sided. It was a two-sided war of punishment, and the exposure was, if anything, rigged against the Gulf.

Iran had escalation dominance from day one. You attack Iranian oil facilities, Iran destroys Gulf oil facilities. You attack water desalination plants in Iran, Iran destroys the Gulf desalination systems that supply 70% of the region’s water. The proof came when Israel hit Iran’s South Pars gas field, the largest in Iran, and Iran immediately struck the largest gas field in Qatar, plus fields in Saudi and the UAE. That’s a huge chunk of the world’s energy infrastructure. It spooked Trump, and within hours he went on Twitter and said he had forbidden Israel from attacking any more Iranian energy facilities. That was direct proof that Iran had established escalation dominance.

You model the US and Israel as separate actors. Where do they diverge?

The high-agency actor here was Netanyahu — in many ways the Americans were the NPC, at least at the start. But on the goals, this White House and the Israelis completely agreed: first-best is topple Iran and install a client regime; second-best is disarm it so it can’t threaten anyone and Israel rules it from the air; third is just push it back and reduce its capacity to threaten Israel and the Gulf protectorates.

The disagreement was never about objectives. It was about risk appetite and pain tolerance. The Israelis have gone completely mad — they’re willing to run down the American magazine and disarm the United States in the attempt to disarm Iran. The US is obviously not interested in blowing up its own position in an extended effort to gut Iran. So the divergence was predictable and predicted: the US would move to sue for peace, and that would be opposed by Israel and the lobby. Which is exactly what’s happened.

Is there any military path to reopening Hormuz??

No. This has now been conceded by essentially all serious military people. The clever stratagems they reached for, naval escorts, convoys, seizing Kharg island — were never workable, because the convoys are themselves at risk and the marines holding territory that close to Iran would be very vulnerable. The best the US can do is the double blockade it’s running now. There is no path to taking the Hormuz weapon back from Iran.

And this isn’t just a tactical or operational fact — it’s a strategic one, with implications not for weeks or months but for years and decades. Even if Iran never imposes a permanent toll, even if traffic returns to normal, everyone now knows Iran retains this weapon and that the United States cannot take it away. Gideon Rachman at the FT was one of the first in the mainstream press to grasp the full implications back in mid-March.

What does that mean in practice?

It makes Iran a world power, as Robert Pape has been saying. Without the Hormuz weapon, it’s hard to see how Iranian influence extends much beyond the Gulf. With it, the reach is global.

Iran can coerce any state, inside the Gulf or far outside it. Germany can no longer sanction Iran — Iran would shut off German energy access through the Gulf. India just told its shippers to obey IRGC instructions categorically; Reuters interviewed them and the line was, “we’ve been told to just obey, and that’s what we’re doing.” Think about what that means: India is vastly larger than Iran, the country you’d expect to be the great power — but the balance of leverage is such that the Indians can’t push the Iranians around, and neither can the Koreans, the French, or the British. The West will have to abandon the idea that it can put Iran back in a box the way it did Saddam. The use cases of the Hormuz weapon are still being discovered.

The Hormuz normalization market is pricing this low — around 35% and falling when we looked, resolving off the IMF PortWatch data, which shows only a few ships a day. But there are reports of dozens of ships transiting under Iranian escort. Is more getting through than meets the eye?

Both things are true. The IRGC is in effective control, and we’ve seen Western press reports of dozens of ships passing after paying the tolls. The American blockade is very porous — they’re intercepting a few vessels based on flag, whether they think it’s an Iranian ship, but they’re not stopping everyone. Ships are getting through.

The open question is whether that amounts to the end of the blockade. I wouldn’t call it that yet — the flux of vessels through Hormuz is still low enough that we can’t say effective post-war Iranian control of the Gulf has arrived. We’re not at that stage. But what’s striking is that the Iranians have already built the architecture for it.

Where does this end?

The Iranians have put in place the architecture for post-war control of the Gulf. There’s a new transit authority, it’s already on Twitter, and they’ve passed legislation governing Hormuz. They’re in negotiations for joint custody with Oman, and that’s probably going forward because the Saudis have given the green light. The Americans and Israelis are opposed, and that’s part of what’s being haggled over in the negotiations. But the leverage has shifted in a way that is now very difficult to reverse.

I wrote a little paperlet that used game theory to analyze armed bargaining in Islamabad. I found that a deal obtains in equilibrium. It looks very much like this is where this is headed. The only question is whether it will be a thin deal that merely reopens Hormuz, or a thick deal that ties the hands of both sides, with the Iranians cooperating on enrichment and the Americans offering sanctions relief. The risk of a thin deal is that Iran is likely to get the bomb. The US really does not want that. The problem is that the power of the lobby in Washington makes sanctions relief very challenging. But that’s the price if you want to prevent Iran from getting the bomb. We’ll see how it plays out.

Disclaimer:

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

The World Cup is the biggest sporting event in the world, reaching more than 5 billion people during the 2022 tournament. And 2026 promises to be the biggest yet, at least in terms of scope. After a quarter-century of World Cups containing 32 teams in eight groups and a 16-team knockout round, this year’s tournament field has expanded to a whopping 48 teams spread across 12 groups, leading into a new 32-team knockout structure, with the whole thing playing out across Canada, Mexico and the U.S. for more than a month.

Looking at the Polymarket futures, we see some familiar World Cup themes mixed in with some new twists: Europe is still the sport’s center of gravity. The top expected goalscorers are the usual suspects. The co-hosts are getting some attention — though maybe less than we’d expect. And because the expanded group-stage format makes survival easier and bracket seeding more complicated, the most interesting market questions may not be who gets through, but who earns a comparatively clear path once the knockout rounds begin. So as we approach opening kickoff on June 11, here’s what traders know — or think they know — about the biggest World Cup ever.

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The favorites are priced a tier above the rest — should they be?

Although there isn’t any single overwhelming favorite to win the most coveted prize in world soccer — no team is above 20%, unlike some recent World Cup cycles — there are two teams that the market places above all the rest: France (18%) and Spain (17%). Winners of two of the past four World Cups, Les Bleus and La Roja have combined 35% odds to win the championship, and they each carry roughly double the odds of any other team in the field aside from third-ranked England (11%).

Does that check out? Certainly, Spain and France look like the strongest national teams in the world on paper if we plot out all of the 2026 contenders along two axes — their World Football Elo Rating (which measures how well they’ve been playing in recent matches) and the total estimated transfer value of all the players on their roster — as compared with their market odds:

But the numbers are not without some interesting wrinkles as well. England, for instance, has a higher roster value than any other team in the field, though its Elo lags behind the market favorites. On the other side of things, Argentina — the defending champ, by the way — is actually No. 2 in the world Elo ratings, but their roster quality lags behind those of France and Spain. Still, La Selección might be getting undervalued — they’re at least as close to the favorites in our chart as Portugal and Brazil, who have slightly higher title odds.

Further down the chart, a few teams are positioned better than their odds suggest. Colombia, Ecuador and Croatia all rate well by Elo — higher than several teams with similar or better market odds — while Turkey, Senegal, Uruguay and Switzerland sit in a dangerous tier where the raw title probability is low but the résumé is as good as teams with higher odds. None of them is being priced as a true championship threat, which, fair enough: winning seven matches in a 48-team World Cup is a tall order. But if we’re looking for teams whose market odds may be underselling their ability to bust the bracket, the middle cluster of the chart is a good place to start.

Related: The market LOVES Europe.

As mentioned above, the defending champion is Argentina. But when Lionel Messi and company won in 2022, it broke a streak of titles for European nations that spanned four World Cups and two decades, dating back to Brazil’s most recent title in 2002.

After South American teams won seven times in 12 cycles from 1950-1994, Europe has now won five of the past seven World Cups. And traders don’t see that changing anytime soon. In our chart of likely champions above, each of the Top 3 entries (France, Spain, England) hailed from Europe, as did eight of the Top 10 — Brazil and Argentina being the only exceptions. (This makes sense, as Uruguay is the only other South American squad to ever win the Cup, and it last happened in 1950.)

In the winning team continent polymarket, traders think there’s a 71% chance a European team will win this year, followed by South America all the way down at 23%:

Maybe the more interesting part involves non-European or South American winners. Famously, the tournament has never been won by a continent aside from those two, but it is being held in North America this year for the first time since 1994.

Typically, host nations get a sizable boost — almost always reaching the knockout stage — and that effect wasn’t even diluted the last time multiple hosts shared the World Cup (with Japan and South Korea in 2002). So what does that mean for America, Mexico and Canada?

Each has at least an 83% chance to advance from the groups, which would be a pretty good result for each by their usual standards. The U.S. also ranks much higher in the odds (14th) than their Elo (41st) would seem to warrant, though they also have more valuable talent than we’d expect. Home-cooking aside, North America sits at just 2% to win the World Cup anyway — lower than either Africa (led by Senegal and Morocco) or Asia (Japan).

The group stage is less deadly now…

One of the consequences — and we can’t say it was “unintended” — of expanding both the number of total World Cup entries, and the number of groups, is that it makes life a lot easier for the favorites early in the tournament.

With 48 teams split into 12 groups of four apiece, the Top 2 teams from every group will advance — as well as the eight best third-place finishers across all the different groups. (Under the previous format, only the top two teams from each group moved on.) While you’d still prefer not to sweat out being in third place, the pressure to be in the top half of your group, so vital in creating tension during earlier formats, is no longer as much of a factor anymore.

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And for the juggernaut teams, the danger is now less about going home early and more about what kind of path through the bracket your seeding sets up. The dilution of groups has contributed to a 77% chance the eventual champion goes unbeaten in the tournament. And in the market odds to advance, we can see that nine teams are all but assured to make the knockouts already (with 91-100% odds), 10 more teams are solidly in the next bucket (81-90%), and overall there are 32 teams — two-thirds of the field — with at least a 61% chance to make the knockouts.

Based on the odds to win the group and/or advance, we can sort each group favorite into “safety net” tiers. The x-axis in the chart below shows how likely the favorite is to simply win its group; the y-axis shows how likely that same team is to advance anyway if it doesn’t win the group. So the farther right a team is, the more control it has over the group; the higher it is, the more room for error it has if something goes wrong.

France is the best example of the 2026 format’s new safety-net dynamic: It is not the single most likely group winner, but if it slips up, the market still gives it a very strong chance (90%) to survive anyway. Spain, Argentina and England are more straightforward cases — heavy favorites to win their groups outright. Brazil, Germany, Belgium and Portugal are a little less secure at the top, though still insulated from too much danger by the expanded format if they wind up needing the back-door. The U.S., meanwhile, sits in the true danger zone: It is only a modest favorite to win Group D, and it also has the weakest conditional safety net of any group favorite on the board. (Mexico isn’t too far from that predicament, either… so much for home advantage!)

Long story short, the new format gives favorites more ways to reach the knockouts. No longer will an off-day potentially derail a promising tournament, even if your odds still depend some on the group you were drawn into.

…But bracket paths matter more.

The other massive side-effect from the expanded field (and expanded knockouts) is that your placement within the bracket suddenly takes on greater importance. If the groups are easier to survive than before, then instead of the old “Groups of Death”, teams might instead have paths of death.

Take, for instance, Argentina. Theoretically, winning Group J should be a good thing — the bracket structure keeps the Group J winner away from another group-winner until at least the quarterfinals. But based on the market odds, their reward could still be drawing dangerous Uruguay — an 88% advancement team despite being in the same group with Spain — in the Round of 32. Or consider Brazil, whose 76% favorite status to win Group C might merely mean a first-round knockout date with Group F projected runner-up Japan, who made the Round of 16 in three of the previous four World Cups.

Including those, here are the group favorites who have the most certain-to-advance opponents potentially waiting in the wings as runners-up in the Round of 32 to face at the start of their knockout journey:

The opposite of that involves the eight group winners who are slotted to face third-place teams in the first round of the knockouts. If things go chalk and the favorites win, that group includes: Germany (Group E), France (Group I), Mexico (Group A), England (Group L), the USA (Group D), Belgium (Group G), Switzerland (Group B) and Portugal (Group K). This isn’t to say those teams are automatically in great shape — the third-place slots could unexpectedly offer a difficult opponent, and the bracket is designed to have them face another team in the same situation the following round (should they win).

But they do represent a softer immediate landing in the knockout rounds than other teams have to face, and in a tournament where every little edge helps and the group-stage incentives have shifted under the new format, where you land in the bracket might matter as much as who you were in a group with.

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In the market for a Golden Boot

So far, we’ve been focusing on the team markets, which help tell us who’s situated best to make their way through the chaos and lift the World Cup trophy in July. But another set of interesting markets involves players — including who’ll win the Golden Boot for most goals scored, who’ll have the most assists and who’ll have the most combined goal contributions (goals + assists). Those markets are partly about individual ability, obviously. But they’re also not-so-secretly about your country’s path — it’s a lot easier to win the scoring race if your team is playing six or seven matches instead of just three or four.

England’s Harry Kane and France’s Kylian Mbappé sit in a tier of their own because their teams have the second- and third-best chances to make the final, which should give them plenty of chances. Spain has the highest odds to make the final of all, but the market is banking on their scoring being more diluted. Meanwhile, Messi and especially Norway’s Erling Haaland don’t have as much of a Golden Boot chance because their team’s run might be more limited than Kane’s or Mbappé’s. (Although, if Argentina is actually underrated per our Elo chart earlier, Messi could be a big value play.) But at the same time, Haaland’s odds are much higher than we would expect from Norway’s advancement probability.

We can also see these effects at play in the “nation of top goal-scorer” market. The multiplier between Norway’s Golden Boot odds (16%) and finals odds (6%), 2.67x, is the highest of any realistic contender in the field. Other teams with premiums include France (1.32x for Mbappé plus roster depth), England (1.25x for Kane), Portugal (1.22x for Ronaldo and Rafael Leão) and Argentina (1.09x slight premium for Messi and Julian Álvarez). Meanwhile, Germany only has a 0.73x multiplier because they lack as many obvious go-to scorers.

All told, these player markets really scratch the itch of trying to balance multiple, semi-correlated probabilities at once. The Golden Boot winner (and his team) need a combination of several ingredients — elite finishing talent, team potential and a clear enough path to let the goals pile up. And that brings us back to the broader lesson of the 2026 World Cup markets: The expanded tournament is bigger, but it’s also more path-dependent. The favorites have more chances to survive longer, but more things can also happen, for more teams, in more weird ways than ever before. So with the probabilities set, all that’s left is to kick things off and see where the chaos takes us.

2026 FIFA World Cup Polymarkets

is the proprietor of Neil’s Substack, a newsletter that looks at all sports through the lenses of both analytics and storytelling. He is also a freelance writer for a variety of outlets — and before that, he was the sports editor at FiveThirtyEight and an analytics consultant for the NBA’s Atlanta Hawks.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

John McDermott has spent 11 years in Los Angeles covering celebrity and culture for Esquire, GQ and Rolling Stone. In 2022, he was one of the first journalists to profile Spencer Pratt’s second act as a content creator, a piece that traced how The Hills bad boy had reinvented himself for the influencer era. He had no idea he was documenting the origin story of a mayoral candidate.

When the Palisades fires tore through Pratt’s neighborhood in January 2025 and the promised rebuilding never came, Pratt turned his grief and frustration into an insurgent run against LA’s Democratic incumbent mayor, Karen Bass.

The Oracle spoke with McDermott about the May 6 debate that reshuffled the race, why the media keeps getting the AI fan videos wrong, and what 40% undecided voters in a deep-blue city actually means for Pratt’s chances.

This interview has been edited for length. All answers are his own.

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You profiled Spencer Pratt back in 2022 as a washed-up reality star trying to reinvent himself. Did you have any idea you were documenting the origin story of a political candidate?

Zero idea. I wrote about him because I thought he encapsulated something real about how celebrity works now. What fascinated me about Spencer was that you could trace the history of contemporary media through him. He was at the forefront of reality TV, the birth of this entirely new genre of television, and as TV’s relevance faded, he became an internet influencer.

So what turned him political?

The Palisades fires in January 2025. They burned down his home. And the promised rebuilding — Karen Bass herself promised she would expedite the permitting process and get the Palisades back in record time — never materialized. A year and a half later, there hasn’t been much rebuilt. He’s been a very vocal critic of the fire readiness, or lack thereof, leading up to and during the fires, and the slow rebuilding process. And that culminated with him running for mayor.

Walk me through Bass and the fire. How bad was it for her?

She was not in LA at the time. She was in Ghana, doing a photo op with President Biden, despite myriad warnings that LA was at an incredibly high fire risk. And then afterward, there was an after-action report on the fire response that Bass’s office had edited after it was written to lessen her culpability. The author of the report came out publicly and said: “This is not what I wrote. They changed this after I submitted it.”

Let’s talk about the May 6 debate. Raman, the leftist, got cut nearly in half overnight in the odds. What happened?

The overwhelming consensus is that she was the worst in the debate. She hesitated, didn’t have clear answers. And Pratt — who everyone expected to stumble on policy questions — spoke very fluently and very to the point. Two moments went viral, and both favored Pratt.

Raman also accused Bass and Pratt of working together to keep each other in the race at her expense. Explain that.

The structure of this race is unusual. It’s not a partisan primary — it’s an open election. If somebody gets more than 50%, they win outright. If not, there’s a runoff between the top two candidates. Raman’s accusation is that Bass and Pratt were deliberately friendlier with each other in the debate and ganging up on her, trying to knock her out of the top two so they can face each other in the runoff.

Pratt is at 27% as a registered Republican in one of the most Democratic cities in America. Is there any real structural support for him?

People thought Rick Caruso had a genuine chance in the last election against Bass, and he lost. What Pratt has going for him that Caruso didn’t is a massive undecided voter pool. One poll has 26% undecided, a UCLA poll has 40%. Those undecided voters are not closet Republicans. They are typical Democratic voters who are questioning the status quo. If those people are in play, they could swing to Pratt.

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What is actually driving his support, underneath the memes and the charisma?

He is channeling real impatience with the homelessness issue — billions of dollars spent on a soft-handed approach, to little effect.

You’ve written a lot about viral media and celebrity culture. The AI fan videos have gotten a ton of attention — Pratt as Luke Skywalker, Pratt as Batman. What’s actually going on there?

The media has completely botched this story. The LA Times and Vanity Fair both reported Pratt’s campaign is making these videos. That is outright false. He made none of them. They are made by random people on Twitter who are good at AI video production. Many are pretty provocative, borderline violent in some cases. Karen Bass went on CNN and said Pratt is putting out violent videos that could have dangerous consequences. He did not make them. They’re pretty much all coming from one guy — someone called Charles Curran.

It’s wildly misleading coverage. And it matters because it lets Bass frame him as a threat while the actual story is that he has organic, fan-driven momentum she cannot manufacture.

If it ends up as a Bass-Pratt runoff, who wins?

The analogy I keep coming back to is Trump-Hillary. Bass is the old-school Democratic Party machine politician. He’s the anti-that. He is charismatic in a way that Bass and Raman simply are not, and that was on full display in the debate.

The trading on Polymarket is telling. The volume on Pratt is six times greater than anyone else in this race. That national interest is real. He’s already a national figure whether or not he wins. The question is whether he can convert attention into votes in a city that, when it comes down to it, is still a Democratic stronghold. That is the challenge. But with 40% undecided and a broken record of Democratic governance on the issues people actually care about, I wouldn’t write him off.

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Are we seeing any evidence of a rightward shift in the California governor’s race?

The California gubernatorial race is even more wide open than the LA mayoral race. Xavier Becerra has pulled ahead as the leading Democratic Party candidate, but Steve Hilton, a Republican, is polling just behind him. Tom Steyer (D), Chad Bianco (R) and Katie Porter (D) all have an outside chance. The fact there are two viable Republican candidates for governor of California again speaks to how disillusioned California voters are with the Democratic leadership that’s held the office since 2011.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

is the CEO and founder of Oath, a platform that uses algorithmic forecasting to help liberal donors maximize the impact of their contributions. A former campaign manager and Democratic political operative, Brian has been moneyballing every competitive House and Senate race in the country since the Supreme Court’s Callais decision dropped.

The Oracle spoke with him to unpack how the ruling will reshape the congressional math in 2026 and beyond.

This interview has been edited for length. All answers are his own.

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What did the Supreme Court’s Callais ruling yesterday do?

The case was about the Voting Rights Act of 1965, specifically section two, which deals with how race is considered in redistricting decisions. The decision essentially says that as long as you claim the motivation for redistricting is partisanship and not outright racial discrimination, it’s fine. It created an avenue to eliminate majority minority districts, but also to gerrymander more aggressively generally.

What this decision changes is it severely, severely narrowed the Voting Rights Act. In the dissent they talk about it now just being a meaningless piece of paper. It’s also created a supercharged arms race from both parties around redistricting. For Republicans, it means they can go into states in the South like Tennessee, South Carolina, Alabama, and Mississippi, where there are currently majority Black districts that have been there for many decades, and break those up and dilute those voters across many other suburban and rural districts to eliminate a Democratic seat. For blue states, which also have majority minority districts, they also can break up those districts and dilute Republican voters in other places. So this is also an unlock in blue states.

The loser here is voters, because it means more and more politicians are choosing their voters instead of voters choosing politicians.

I know the decision threw out one district, the Louisiana 6th, but what does redistricting mean for the whole state map?

Courts do sometimes order a third party to draw a map, but oftentimes they just say “not this one” and send it back to the legislature. That’s what’s happening here. In Louisiana, they’re going to have to propose a new map. The governor has already said they’re going to delay their primary in order to redistrict. They could just break up Louisiana Six as ordered by the court, or they could actually come after Louisiana’s Second Congressional District as well, which is the New Orleans-based seat, and go for a maximal gerrymander that would eliminate two Democratic seats. So it’s unclear right now which path they’re going to pursue. Their original primary date was just two weeks away, so they’re going to have to rush through a decision.

Louisiana 06 jumped heavily towards Republicans after the decision dropped. Is that an appropriate reaction?

I would actually probably push it a little bit further. I would be favoring the Republican side right now in this seat, because I think Trump is going to get personally involved in trying to juice this as much as possible.

What are the odds Republicans redraw Louisiana 02 as well?

Maybe 50-50 chance they do it. They want to maximize here, and Trump is going to be pushing for it.

How many seats total could this mean for the midterms?

In our base case, up to four seats could be now in play for 2026, including the Louisiana district the court struck down directly. For 2028 it could be up to 12.

The other states that could redistrict for the 2026 midterms are South Carolina and Tennessee, because they have late primaries. The districts impacted would be South Carolina Six, which is Jim Clyburn’s seat, and Tennessee Nine, which is Memphis-based.

What odds would you put on Tennessee and South Carolina redistricting?

Tennessee is more likely than South Carolina, although Lindsey Graham has been getting involved and getting very vocal about redistricting South Carolina, they want Jim Clyburn out. I’d say 50-50 on both at this point.

Our House seats forecast barely moved after the ruling. But you’re saying Republicans could pick up four. Why is the market not reacting?

My guess is that gas prices just went up almost 10 cents overnight to a four-year high, particularly in battleground states, and we just got a weak GDP report this morning. Those are probably playing a bigger role than the Callais decision right now. Republicans can only net benefit from Callais in 2026, there’s no path for them to lose seats as a result, but with cases like this they tend to be too esoteric for voters to respond to directly, so the economic headwinds are swamping the redistricting tailwind in the market right now.

What is your overall forecast for Democratic House control?

Based on current data, I would put it higher than the current 85% market odds. I would feel more confident at around 90 to 93%. The 7% is sort of pricing in some major global or national event in the next four or five months. If the election were today, I’d put it at 99%.

We see the absolute maximum upper limit as 242 Democrats to 193 Republicans. We think that’s basically the upper limit of what Dems will achieve in 2026, which means the current market is pricing in roughly the best case scenario for Democrats. A base case would be more like 200 to 202 Republican seats. The battleground has narrowed a lot from gerrymandering over the last 20 years, which has shrunk the number of seats decided by a narrow margin.

Is there an even worse scenario for Democrats if Republicans go really aggressive?

The more extreme, unlikely scenarios involve states like Georgia, Alabama, and Mississippi. In Georgia, they would come after Georgia’s Second Congressional District, that’s the easier one. There are four Democratic districts packed in and around Atlanta that would be much harder to break up because Georgia is a 50/50 state, and those voters have to go somewhere. The more of one party you have to work with, the easier it is to gerrymander, but a 50/50 state is harder. And Brian Kemp, who’s the current governor through November, is no fan of that kind of play.

But the bigger issue is that people are already voting in Georgia. Ballots are already sent out. They would be canceling a currently ongoing election. Even if they wanted to and had everyone on board, I don’t know that it would even be possible. That’s why I feel maximally bearish on Georgia moving this cycle.

Florida is already a lock, they just passed their map and it’s about to be signed.

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Let’s go to the Senate. Do you see a path for Democrats?

Republicans currently control the Senate by a three-seat margin. In order for Dems to take control, they need to hold all of their seats, including competitive races in Georgia, Minnesota, New Hampshire, and Michigan. And they need to flip four of five Republican seats: Alaska, Ohio, North Carolina, Maine, and Texas. That’s a very difficult task. We are bearish on control, but confident in Dems picking up seats, which is not a given. Back in 2022 Dems won the popular vote for House seats by around seven points and still lost seats, so they can move in opposite directions. But that won’t be the case this year.

How do you feel about Jon Ossoff in Georgia?

Democrats have been massively overperforming in Georgia. We flipped some Public Service Commission races last November by over 20 points, statewide races in an off cycle. And we had the Georgia special to replace Marjorie Taylor Greene where Democrats overperformed by more than 20 points, our largest overperformance of the Trump era. Ossoff is a star, he’s doing incredible on fundraising, and the Republican primary is a disaster. If he wins by four or five points, his 2028 presidential odds go much higher. He could actually be a front runner.

Alaska, Peltola at 63%.

That’s a little surprising on the high side to me. She’s proven she can win statewide in Alaska, she very narrowly lost her seat last cycle, and this is a much more favorable environment. But polling has been dropping in a bunch of these races recently and I think there’s a trend nationally giving people confidence. I’d want to watch more closely before going that high.

What about Maine and Susan Collins? Platner just became the de facto nominee after Mills dropped out. Polymarket has Platner at 71%.

Susan Collins is a cockroach. You literally cannot beat her. I have several members of my team who have worked in Maine politics, for Gideon and others, and they pretty universally believe Collins will pull it out. I would not put money on Platner at 71%.

Texas, any chance of a flip?

We have it rated as the eighth or ninth most competitive race of the cycle. It’s shocking, but not shocking because nothing Trump does is shocking, that he’s refusing to weigh in for Cornyn. That could change the dynamic. But we are not ranking this highly, certainly not in the top five most competitive.

Putting it all together, Dems pick up seats but probably fall one short of Senate control due to Maine and Texas?

That’s exactly right.

What Supreme Court wildcards could still shake things up?

There’s a case that could make it possible for parties to spend unlimited sums on behalf of candidates, which would just unlock a lot of money and be a significant factor.

And I expect one of the justices to step down at the end of the term in June.

Alito or Thomas?

I think it’s probably one of them. They’re motivated to have Trump pick their successors, and I think that lesson, the Ruth Bader Ginsburg lesson, has been learned. Any vacancy would be a significant mobilizing event for Democrats.

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Are there any markets you’d like to see on Polymarket that don’t exist?

State trifectas would be fascinating and are probably the most consequential outcome of this cycle. Will Wisconsin turn entirely blue? Will Michigan secure a trifecta? It’s wonky, but those outcomes determine redistricting in 2030, election certification in 2028, and the entire downstream political landscape.

And that’s why the timing of Callais mattered so much. My team celebrated every week that went by without the decision coming down. The ruling seemed pretty much predetermined, so delaying was even more important than the ruling itself. What’s coming in 2028, that is going to be nuclear warfare.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

Polymarket’s defi exchange makes it possible to track the trades of every wallet on the platform.

This has created an evolving game of cat and mouse as sharp traders try to hide their tracks from the coattail-riders, assisted by a growing number of apps that help users find signal in the noise.

In February, the prediction market trading terminal Stand (and on Substack) launched a Polymarket copy (& counter) trading feature, allowing users to automate custom copy strategies, and it has since tracked over 1,500 Polymarket wallets and 5,000 strategies in two months.

The Oracle spoke with Ridgely, co-founder of Stand, to get an update on how the copy-trading meta is evolving. And we managed to get him to cough up some of Stand’s internal data on the 10 most copied wallets on Polymarket.

This interview has been edited for length. All answers are his own.

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Copy trading is controversial. Many are saying it’s an easy way for traders to get rekt. Presumably you disagree, but what are some of the pitfalls of copy trading?

The most obvious problem is that a lot of the sharpest traders know they’re being watched. We’ve interviewed several of them, and they’ve told us directly that they run secondary or tertiary accounts. So the public account you’re following might not be their full book. You can become exit liquidity for them if you are not getting a full picture of their activity across wallets. Then there are also things we notice, like iceberging, merging, and bots.

Iceberging?

Take Domer. He knows people are watching him closely. So rather than placing one large buy that triggers copy-trading alerts, he could accumulate in small piecemeal orders over time, like the tip of the iceberg. If you’ve set a minimum volume threshold before your copy triggers, you may never catch him entering. He can afford to be patient because his portfolio is large enough that he can take his time filling a position.

What about merging? How does this frustrate copy traders exactly?

Merging is when a trader holds both YES and NO shares in a market and converts them into USDC instead of selling. It’s a way to quietly exit a position without it looking like a sale in the activity feed. Some copy-trading apps don’t flag this as a distinct action, so you can miss the exit signal entirely. We’re working on capturing it.

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And why are bots hard to deal with?

Bots are the trickiest to copy trade because of the speed and frequency. They’re placing orders in the mempool and getting fills at specific price points faster than any human could react. If you’re copy-trading a bot, you’re almost always going to get a worse price, and in high-frequency markets like the five-minute crypto contracts, a few cents of slippage kills the strategy. 55% of traders on the five-minute markets are bots, according to a recent Dune Analytics report. It’s going to be difficult to out-speed them.

Okay, let’s get to the wallets. Did anything surprise you in the data?

We pulled every wallet address being followed on Stand. Of the top ten most-copied wallets, all but two were in the top 200 lifetime P&L on Polymarket. I was surprised by the category breakdown: six crypto, two sports, one weather, and only one politics.

I did not expect crypto to be number one. I genuinely thought it would be politics and elections at the top. But these are retail traders who see an account going straight up with no drawdowns and think, I need to be in that.

Several of the crypto ones are either bots that have gone quiet or just not that interesting to dig into. Several went dark in March right around when Polymarket changed the fee structure on crypto markets. So rather than go through all ten, let’s focus on the ones that are actually worth talking about.

#1 0xdxD: Crypto Bot (Inactive since March)

Our most followed wallet ran an automated strategy on the up/down crypto dailies before moving to five-minute markets. You see that the wallet ran a super clean upward profit from December through late March.

The likely explanation is the new Polymarket fee structure on crypto markets decayed the edge, or they simply changed wallets after getting too big. Still, for retail traders looking to understand how crypto bots operate, this is the one. It’s a lesson that copy-trading is far from passive. By the time you’re copy-trading someone, the edge may already be closing.

#2 RN1: The Sports Quant

This is a crazy one. Number seven all-time in P&L on Polymarket, over $7 million lifetime, close to a million in the account right now. The equity curve is just absurd. There was no meaningful dip over the entire period. For a sports trader, that’s almost unheard of.

It’s almost exclusively soccer. I’ve never met this person, never had any contact. But when you look at how they trade, you just assume there’s a model running somewhere - it’s too consistent to be vibes.

The thing that really stood out is that over 53% of their trades are priced under 50 cents. This is not someone hammering favorites. They’re finding value on the other side consistently, across EPL, Liga, and Copa del Rey. I’ll be watching this wallet very closely when the World Cup comes around.

#3 Sharky6999: The Crypto Bonder

Still active, crypto only. Sharky6999 has almost a million in lifetime P&L, a couple of notable dips along the way, and a trading pattern that is almost certainly automated because 95% of their trades are priced above 80 cents. They are doing a pure bonding strategy, buying high-probability outcomes and holding to completion.

The dips suggest there are some triggers stopping them from taking too much loss at once, so it’s not completely brainless, but the core approach is simple.

#4: Crypto Price Bot (Inactive)

This likely bot went dark in March when Polymarket changed the fee structure on crypto markets. Probably did the math and moved on. Nothing actionable here.

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#5 Domer: The Geopolitics Goat

The only politics account in the top ten. Domer’s record on politics and geopolitical markets needs no introduction. He’s probably one of the most visible traders on Polymarket after his 60 Minutes appearance.

I have often wondered why he continues to trade so heavily in his public wallet, and he actually addressed this in a conference recently, saying something like: while there’s probably less alpha available as the markets get more efficient, the opportunities that do exist are bigger. More money in the ecosystem means that when you do find edge, you can make more dollars from it.

If you’re copy-trading Domer, know that you are very likely not seeing his full book. Follow him in geopolitics and elections only. His worst categories on Polymarket are Ethereum and crypto, which are nowhere near his top half.

#6 ColdMath: The Weather Trader

ColdMath is a genuinely weird one. A weather trader, barely in the top 1,000 by P&L overall, made it into the top ten most-followed wallets. Their strategy is daily temperature markets in Buenos Aires, Cape Town, Dallas, Atlanta, and a handful of other cities. Worst categories are politics, Venezuela, and crypto, which makes sense. This is a pure niche play.

The volume of copy-traders following this wallet suggests people are correctly identifying that domain specificity equals edge. This trader isn’t trying to be good at everything. They have, presumably, some information or model advantage on temperatures in a small number of cities, and they grind that edge every day.

#7, 8, 10: Assorted Crypto Bots

0x1979, 0x1d003, and 0xd1eb are an assortment of bot crypto wallets. One had 1.29 share buys in a consistent pattern across many markets, almost certainly bot-driven. Nothing actionable for non-crypto traders.

#9 Swiss Tony: The Soccer Whale

Swiss Tony is the most active trader in this list by raw volume. He is on the whale feed constantly, placing large positions across EPL, Liga, Serie A, UCL, EFL Championship, you name it. His worst categories are very specific: Copa del Rey, UCL knockout stages, EFL Championship. So even within soccer he has sub-domains where the edge degrades.

Like RN1, over 60% of Swiss Tony’s entries are priced below 50 cents. Two of the top most-followed sports wallets in prediction markets are both underdog pickers. That is probably not a coincidence.

Any final words of wisdom for someone dipping into the copy trading game?

Start with a small percentage of the position rather than a fixed dollar amount. A percentage tracks the trader’s conviction level: if they’re putting 20% of their portfolio on something, that tells you more than if they’re putting in $100.

Set category filters so you’re only following someone into their area of expertise. Domer in geopolitics and elections, yes. Domer in Ethereum price markets, probably not. And set tight budget controls. Don’t blind copy anyone across the board.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

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The NBA playoffs, AKA the part of the season that fans and players actually care about, start Saturday.

Sure, the last six months mattered too, on some level. The playoff seedings were determined by the regular season, and major awards (like MVP) that shape our perception of player legacies will be based solely on regular-season stats and performances.

But it’s undeniable that there is a real gap in meaning between the NBA’s regular season and postseason — perhaps never wider than right now — and that has some pretty big implications for these 2026 playoffs.

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This is a lesson I’ve learned the hard way over the years, since my entire career as a sportswriter and analyst has been spent trying to bridge the gap between regular-season data and postseason reality. During my tenure with FiveThirtyEight (RIP), we came up with a number of different ways to tackle this — more on those later — and I currently maintain a simple “two-track” model, which keeps separate regular-season and playoff ratings for each team, adjusting the latter more slowly than the former until the playoffs begin. But no matter your approach, it’s a difficult problem to address, because the data going into any NBA forecast is increasingly polluted by the regular season’s decreasing relevance in the playoffs.

It didn’t used to be this way. On a very basic level, we can see this effect in how the regular season has changed its ability to predict the playoffs over time — and not for the better. From 2000-2009, the correlations for regular-season winning percentage and net efficiency rating (i.e., point differential per 100 possessions) versus team playoff wins1 were solid. From 2010-19, regular-season wins actually improved their predictive capacity, even as net rating fell off a bit. But in the 2020s thus far, both figures have suffered a pronounced collapse:

Granted, there will always be some amount of disconnect between regular-season stats and playoff performance, because the playoffs are a different brand of basketball. While broader trends in the game persist across both phases of the season — offenses have consistently gotten faster-paced and more efficient since the early 2010s — some leaguewide stats either show persistent differences versus the regular season and playoffs over multiple decades, or they didn’t used to… but have begun splitting off recently:

The pace of play, for instance — as measured by possessions per 48 minutes — is always lower in the playoffs than in regular season, and the difference between the two has begun to grow in recent years. Free throws are more common in the playoffs as well. Meanwhile, 3-point attempts (as a share of all shots) used to be more common in the playoffs, but that gap has been erased recently. And offensive efficiency generally tracks very closely between the two segments of the season, though recent postseasons have seen a dip relative to the regular season.

Why these trends and differences? The stakes in the playoffs are much higher, and thus so is the intensity. Teams play harder and with more physicality in the postseason, and they play more deliberately as well.

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It would be impossible to sustain this for an entire regular season — particularly considering the league’s worsening problem with star injuries — and there would be no point to it, anyway. The season is plenty long enough for the best teams to at least ensure they make the playoffs. The NBA infamously has a regular-season schedule length, 82 games per team, that is far out of proportion with other leagues in terms of how long it “needs” to be to separate good teams from bad ones. (If the MLB season was as long as the NBA’s, relative to the information each individual game provides in each sport, each team would play around 400 games apiece!)

As a result, NBA teams do not always consistently show us their true talent levels from October through mid-April, a truth that shows up in the form of load management and other phenomena that dilute the signal of the regular season’s sample. Going back to our first chart above, this is only getting worse over time: the regular season is containing less and less relevant information about each team’s potential in the playoffs.

And that’s a problem if you are trying to forecast the postseason, whether you’re doing it for the purposes of journalistic storytelling or finding an edge in your Polymarket trades.

I can remember a time when regular-season metrics actually did a pretty good job of predicting the playoffs. In fact, that was more or less the state of play when I started out at FiveThirtyEight in 2014. But it wasn’t long before we’d find ourselves needing to add more and more bells and whistles to our NBA model to help it keep up, whether it was adjusting for offseason star movement, adding a playoff-experience factor for postseason games, or tossing out team results almost entirely and using player talent ratings (with special playoff boosts for proven performers) instead.

I have no doubt that fellow predictors — whether in front offices or the markets — have followed this same path, and even branched into novel directions from there. It’s a bit of an intractable problem that runs counter to many of the traditional lessons of sports analytics, which emphasized the primacy of big regular-season data samples.

(It’s even spreading to other sports recently, with the L.A. Dodgers looking an awful lot like an NBA champ last baseball season.)

Since I don’t have the bandwidth to keep updated depth chart projections anymore, I switched to the idea of keeping team ratings on multiple tracks — one that leans into regular-season data for the purposes of predicting regular-season games, but another separate rating that doesn’t move much off of regular-season results and focuses on the playoffs. Backtesting shows that this improves upon keeping a single rating for teams — though the drawback is that it may be too slow to catch up on certain teams as a result (witness the San Antonio Spurs’ comparatively low title odds in their first playoff season since 2019).

Looking at this year’s Polymarket title odds versus the two-track Elo model — and taking the log-odds for each figure to make them more visible in a chart — we can see that there are some areas of disagreement, even if the two systems match up pretty closely overall:

If you’re looking for value in the market, the biggest delta that jumps out is around the Boston Celtics, who are 23% to win it all in the Elo model versus just 12% on the prediction market. What accounts for the difference? Because the Elo model is slow to adapt to data from the current regular season, it puts more stock into a team’s long-term playoff record — and these Celtics have a long history of deep playoff runs.

The Minnesota Timberwolves, Cleveland Cavaliers and New York Knicks may also be getting undervalued in this regard, even though they have less playoff experience than the Celtics. By contrast, this is where Victor Wembanyama and the Spurs get less credit than the market is giving them, since they lack that record of experience.

The important — and counterintuitive — thing to remember is that what we’ve seen of these teams over the past handful of months may not actually matter very much. So if you’re going to make smart trades from here, you must recognize that the NBA playoffs have become less a continuation of the regular season than they used to be — and more of a separate ecosystem entirely, where certain teams are built for what comes next more than others. It’s your job now to identify who those teams are before the market catches up.

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* is the proprietor of Neil’s Substack, a newsletter that looks at all sports through the lenses of both analytics and storytelling. He is also a freelance writer for a variety of outlets — and before that, he was the sports editor at FiveThirtyEight and an analytics consultant for the NBA’s Atlanta Hawks.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

The anonymous energy trader @CRUDEOIL231 on X manages a pod at a hedge fund owned by one of the world’s largest commodity trading firms.

He took a break from longing his oil longs to survey the damage to production capacity, and explain why leaving Iran in control of Hormuz is fundamentally untenable.

This interview has been edited for length. All answers are his own.

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What do you make of the ceasefire deal announced yesterday? What will this do to oil prices in April / May / June?

Oil prices will likely show weakness for a few trading days. However, it is highly doubtful that this will lead to a permanent peace agreement.

Conditions such as Iran’s continued control over the Strait of Hormuz, acceptance of uranium enrichment, lifting of all major sanctions, payment of reparations to Iran, and a cessation of hostilities on all fronts including Hezbollah in Lebanon seem nearly impossible to reach a consensus on.

Iran’s control over the Strait of Hormuz directly conflicts with the vital interests of GCC countries, and the uranium enrichment issue remains difficult to resolve given the justifications for this war.

Lifting sanctions requires not just executive action but congressional approval. Furthermore, with both sides claiming victory, paying reparations would essentially mean admitting defeat and acknowledging acts of aggression. For the US government, this is an absolute non-starter.

The two-week ceasefire appears to be more of a tactical timeout rather than a fundamental resolution. While it may cap the ceiling for front-month prices, that’s about it. Oil prices will continue to stay at elevated levels.

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Do you think Hormuz traffic will normalize? What time frame?

Iranian Foreign Minister Araghchi stated that safe passage through the Strait of Hormuz will be possible over the next two weeks, provided that “cooperation with the Iranian military and technical constraints are fully taken into account.” We need to consider exactly what this implies.

My thought is that this could mean bypassing the standard shipping lanes in favor of alternative routes toward Iran and Oman. Regardless, the flow will not return to normal.

The 150 million barrels of floating storage currently trapped in the Persian Gulf will likely attempt to exit the Strait. The short-term dip in oil prices reflects the market’s fear that this crude will hit the market all at once.

The real issue is the two-week timeframe. Since no one knows what happens after those 14 days, most shipowners might be willing to exit the Gulf from west to east to offload, but they will hesitate to enter the Gulf for loading.

Even in an optimistic scenario, I don’t see the traffic volume over the next two weeks recovering to more than 50% of pre-war levels.

What level of impairment has there been to Iran / GCC production capacity? If the ceasefire holds will production be able to snap back fairly quickly?

Nearly 12 mb/d of production has already been shut in, and it cannot be restored quickly.

First the tankers currently inside must exit the Strait. Then incoming tankers must enter from outside for loading. Finally to actually restart production, the onshore storage tanks, currently at full capacity, must be drained before the taps can be turned back on.

Therefore two weeks is nowhere near enough time to resume production. Even assuming the ceasefire holds, it would take at least 6-8 weeks to recover more than 70% of the shut-in volume. In the meantime, global crude inventories will continue to be drained.

You have written that any kind of deal that enshrines Iran as the tollbooth of Hormuz is untenable for Gulf states. Can you unpack this? Is it worse for some than others?

If Iran introduces a toll system, the GCC countries—especially Saudi—will never accept it. The flow through Hormuz is several times larger than the total spare capacity of OPEC+.

If Iran gains the ability to impose tolls, they will become the most powerful and unrivaled swing producer in history, controlling a global oil flow of approximately 20 mb/d.

This is an unacceptable situation for Saudi Arabia and the UAE. The issue isn’t the amount of the toll; it’s the fact that Iran would hold a say over the future flow of GCC countries.

They would gain the authority to arbitrarily regulate a 20 mb/d flow. Saudi’s influence doesn’t just come from being wealthy; it stems from their status as the world’s only true swing producer.

I don’t believe they can simply stand by and watch their regional hegemony handed over to Iran, along with all their leverage and influence.

For them, Iranian control of the Strait is a more existential threat than any missile or drone.

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What do you make of the Iran hit on the Saudi petrochemical plants? What sources are you looking at here?

I believe this was a clear example of a proportional response. The goal was to demonstrate that if they strike our infrastructure, we can hit theirs back just as hard.

It wasn’t an attack aimed at mutual destruction. If Iran truly wanted to go for the nuclear option, the simplest and most effective way would be to target or contaminate the seawater intake systems of desalination plants across the GCC.

Striking petrochemical facilities was merely an act of retaliation. I monitored the flares via the NASA FIRMS system and directly confirmed the specific damage and its extent with a SABIC official.

How long would it take to develop viable pathways around Hormuz for the different GCC states?

Existing bypass routes like the East-West Pipeline and the Fujairah Pipeline are likely all there is. Saudi can reroute about 5 mb/d, and the UAE can divert around 1.5 to 2 mb/d of liquids.

Building new pipelines takes far too much time, and there is no guarantee that Iran—having already played the Hormuz card—would just sit back and watch such new bypasses being constructed.

Some ppl suggest using trucks, but that’s ridiculous. Just think about how many trucks it would take to move even a single million barrels. It’s simple math.

How do you think the ceasefire holds up or unwinds? What are the triggers or behaviors you’d be looking at for early signals?

As I mentioned above, the gap between the two sides revealed in this ceasefire announcement is much wider than it was before the war. Ultimately, a resumption of the conflict seems more likely.

We need to keep a close eye on the flow of US military assets into the Middle East and how much the actual traffic through the Strait of Hormuz recovers.

Furthermore the clashes between Hezbollah and Israel continue today. Since this is also part of the broader battlefield, it must be monitored closely. If these skirmishes persist, the window for diplomacy will only continue to shrink.

If you are a Gulf Arab state and think the current deal with Iran is unworkable, what levers do you have? Are they likely to try to stir up new rounds of conflict?

They are likely to try and drag the US into the war. They’ll be lobbying hard in Washington, and honestly, it won’t even require much finesse.

All they have to do is say: “Since Iran controls the Strait of Hormuz, we can’t restore our production even if we wanted to. We’ll be maintaining partial production cuts for the time being.”

If even a mere 2 mb/d production cut persists, oil prices will stay elevated, which will eventually force the US to seek a military solution. The US will find its way back to the Middle East on its own.

How are you tactically positioned on oil here given your views?

I have been rolling over front-month longs since the Brent April contract. I’ve booked significant profits, enough to fully cover my bonus pool for the next three years.

However today’s ceasefire announcement did lead to some losses in the June contract.

A supply shock is guaranteed due to the production already lost and the continued supply deficits we’ll see during the recovery process. Therefore once the market sell-off stabilizes, I plan to build long positions in back-month contracts.

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Best accounts / sources to follow on the energy aspects of the conflict?

From a data perspective, sources like Kpler and Platts are essential. However I personally gained my most valuable insights through business trips prior to the outbreak, where I spoke directly with Saudi and Israeli officials.

In fact, I was in Tel Aviv when the war broke out, which gave me the conviction to bet big and realize significant gains.

I believe the opinions and intelligence from actors on the ground are what truly matter. That is exactly why I headed to the Middle East in late February.

Any new energy questions we should have on Polymarket?

It would be helpful to ask specific questions like: “Even after the ceasefire, will there be a physical attack on a tanker passing through the Strait of Hormuz within the month of April that disrupts traffic for more than 24 hours?”

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

By Andrew Asani

In early April, odds on Polymarket that the Houthis, an Iranian-backed Shi’a rebel group based in northwest Yemen, would force the closure of Bab al-Mandab before April 30 rose from 21% to 30%. The rise began hours after a statement from a prominent Iranian official that Tehran “views Bab al-Mandab as it does Hormuz.” Similarly, Polymarket shows 41% odds that the Houthis will resume attacks on commercial shipping in the Red Sea by the same date.

However, from the perspective of this author, the odds in both markets are highly inflated, and make the common mistake of overestimating Iranian leverage over the Houthis, which since at least 2023 have become as financially dependent on Saudi Arabia as they have their traditional patrons in Tehran.

Far from seeking to go on the offensive, my conversations with Houthi officials paint a picture of an organization that is desperately dependent on monthly payments from Saudi Arabia to keep their soldiers armed and fed.

Since the February 28, 2026 launch of US-Israeli airstrikes on Iran and subsequent closure of the Strait of Hormuz, Saudi Arabia has rerouted 7m bpd of its oil exports through the Red Sea port of Yanbu, transforming the waterway along with Bab al-Mandab into Riyadh’s most important economic lifeline. As a result, the Houthis have been hesitant to launch attacks in the Red Sea that would drive up maritime insurance costs and antagonize Riyadh.

In fact, Houthi sources I spoke with told me that the reason the group waited nearly a month to enter the war with Israel was that it was awaiting its most recent tranche of Saudi payments to come through.

The Houthis and Saudi Arabia are typically thought of as mortal enemies. But this has not been the case since roughly April, 2022. That month, a UN brokered ceasefire between the Houthis and Yemen’s Saudi-backed government ended large-scale fighting between both sides for the first time since 2015. Throughout 2023, the ceasefire was renewed on the condition that Riyadh provide the Houthis hundreds of millions of dollars annually to pay its civil servants and security forces.

The Houthis became more dependent on Saudi payments throughout 2025, as the Trump Administration revoked licenses for petroleum offloading at ports and increased sanctions on terminals, port managers and vessels making deliveries in Houthi controlled territory, significantly reducing the group’s revenue from customs duties and its access to fuel needed to produce ballistic missiles.

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To Text a Houthi

Most analysts portray the Houthis in Yemen as a puppet of Iran, a “card” that Tehran is waiting until the right time to play. While the Houthis have been heavily equipped militarily by the IRGC, the Twitter Yemen experts tend to be ignorant and uninterested in the local forces shaping their decisionmaking.

I first became acquainted with the Houthis in 2014 while working in the Yemeni capital of Sana’a as an editor at The Yemen Times, the country’s largest English language newspaper. For most of that year, the Houthis were one faction among many in Sana’a, whose spokesmen were eager and friendly sources happy to spin the news for our mostly western readership.

Following the Houthis’ partial takeover of Sana’a on September 21, 2014, the group’s tone shifted from a desire to assist to a gradually increasing demand for control over what we published. On January 19, 2015, I left Yemen after a renewed round of fighting between the Houthis and Yemeni government forces finally made living in Sana’a unbearable.

That morning, I woke up to the sound of distant gunfire, a not wholly uncommon occurrence. Fighting quickly shifted to my neighborhood in Sana’a’s southern Hadda district, the site of Yemen’s Presidential Palace. By 10am, a Houthi sniper placed himself on my neighbor’s roof, continually harassing government forces who fired back with machine guns and occasional tank fire.

When a ceasefire had been reached that afternoon, I wasted no time and booked a flight to Jordan. However, my contacts among the Houthis would later prove useful after beginning a career in risk advisory. Following the outbreak of full-scale civil war in Yemen on May 26, 2015, many foreign companies that operated in Yemen were forced to leave behind valuable assets underwritten by insurance companies.

In many instances, Houthi leaders proved useful in helping to negotiate the safe release of these assets. As when we first met, my Houthi contacts were often polite and eager to assist, motivated by a deep desire to maintain an outlet to the outside world. Today, many Houthis are motivated by a similar desire to remain on good terms with neighboring states and avoid getting drawn into regional conflicts, particularly on behalf of Iran.

According to one high-ranking Houthi military source operating within the Third Military Region in Marib, “the Houthis are a Shi’a group, however outside their northern stronghold of Sa’ada…many of those fighting with the Houthis are Sunni tribesmen who joined the movement to secure support in local disputes against their rivals. Many of these fighters have switched their allegiance over the years from Ali Abdullah Saleh, to the Islah party, to the Houthis. If they don’t get paid, they could switch allegiances again.”

Speaking on condition of anonymity for this piece, one top official within the Office of the Commander of the Houthi 6th Infantry Brigade in Taiz confirmed to me that the month-long delay in Houthi strikes on Israel was driven by a desire to secure payment from Saudi Arabia.

“The issue of Saudi payments to the Houthis [is] contentious… Our frontline forces are underfed and barely have any ammunition or fuel; they’re barely holding on…The leadership waited before receiving its latest payment from Saudi before doing anything that might anger them.”

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What I’m Watching

To forecast what happens next, it’s helpful to think of the Houthis as caught between their main patrons: threatening Saudi oil exports from Yanbu would jeopardize their financial lifeline. And alienating Tehran would cut off their main source of weaponry.

Last night’s dramatic Iranian escalation against Saudi petrochemical facilities in Jubail raises the stakes of the war significantly along with the possibility that Riyadh might join the US-Israeli war effort directly.

Doing so might serve as the final trigger that forces the Houthis to pick sides in the war. On more than one occasion, Houthi leaders have set Riyadh’s participation in US-Israeli strikes on Iran as a red line that would force the group to close Bab al-Mandab. Most recently, on April 06, 2026, senior Houthi official Muhammad Ali al-Houthi claimed the group would refrain from attacking Saudi Arabia so long as Riyadh “adheres to de-escalation.”

That said, the odds that the Houthis will resume attacks on commercial shipping or close Bab al-Mandab should be revised down to track more closely with the likelihood of Saudi Arabia and the UAE joining the war against Iran. Currently, Polymarket puts the odds of both countries doing so at 8% and 6%, respectively.

The best sources to follow for updates include the daily “Iran Report” by the American Enterprise Institute’s Critical Threats project, which does a great job at cataloguing every kinetic strike in the region. For minute to minute updates, great X accounts to follow include @OSINTdefender, the Yemeni @SanaaCenter think tank, and Times of Israel correspondent @manniefabian.

View all Middle East Polymarkets

* Andrew Asani is the pseudonym of an OSINT-HUMINT researcher who tracks extremist patronage networks across the Middle East, including Syria, Yemen, North Sinai, Libya and Sudan. He advises clients performing strategic advisory and litigation support, and his work has been featured in numerous academic journals and news outlets.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

On March 2nd, New York Times columnist Thomas Friedman wrote this about the Iran war:

These are some fancy words. But at Polymarket, we prefer to put numbers to the proverbial kaleidoscope.

That’s why today, we are releasing our first set of tools for writers to get the most out of our free, high-quality data.

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See Headlines that Moved the Odds

Looking to understand why the odds evolved in the way they did? The Market Timeline plots the price history of a market with news stories highlighted at the points where odds underwent large changes.

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Given a specific market, use our Liquidity Checker to easily understand the volume, spread, trading history, and distribution of positions to verify that a market has received sufficient information to be governed by the wisdom of crowds.

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A series of questions will help you structure your idea into a tradable polymarket. Your suggestions go straight to the markets creation team.

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Skip to the exact second that odds moved to understand what moments actually mattered.

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Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

Follow RememberAmalek on X | Join his PolySquare Discord

RememberAmalek aka @gaypride is one of Polymarket’s most storied and least filtered traders, with over $1.3m in profits since mid-2024. We last caught up with him during the New York mayoral election, where he spotted the electoral upside of ‘narcissistic psychopathy’ when Zohran Mamdani was trading at just 8%.

Amalek is also a serious student of Middle East history and has been turning his attention to the Iran war. The Oracle caught up with him to discuss drivers of the conflict, and how bad things could get.

This interview has been edited for length. All answers are his own.

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You lost money fading the Iran strike, then had a big catchup. What happened?

My logic on basically all of the strike markets is just like, default NO until something happens, because the returns are often pretty good on the short term. And I really didn’t think it was going to happen. I knew they were sending assets, I knew the same things everyone knew. There was the talks and all the geopolitical noise. Some sounded like it was going positively, some negatively.

My main belief was just around the midterms being so close. We are really not that far from the midterm. It’s pretty likely this will spill at least deep into summer and end up being a very relevant point in the midterm. And you know, Senate terms are quite long, so if you start talking about Iowa going blue, Texas going blue, Alaska and all these various places, that’s just very consequential for an extended period of time in American politics.

When the strike happened, I lost a bunch on the NO positions. Then I made it all back and more on Khamenei being out of power. That’s the other half of the strategy. When you’re wrong on the fade, you have to be ready to flip. That’s where I think I have a real edge over a lot of people on this site.

How do you think about Trump’s psychology here? What motivated him to do this?

I would lean into the kind of megalomaniac, narcissist camp. I’m not really anti-Trump but I think probably he’s doing the same thing he did in his first term, leaning on the same people he knew from decades ago in New York. You know, many of those people are American Zionists. Kushner, Witkoff, many of these people. Trump is very, very reliant on the last guy that he talked to.

How should traders be thinking about Iranian escalation? What are you actually watching?

The mistake most people make is watching the American and Israeli side for signals. That’s where everyone is looking. I think it’ll be much easier to tell, and this is something that is kind of central to trading on Poly, by following the Iranian side of the conversation where things are actually escalating.

There’s tiers with anything. You know, there’s closing the strait, but then there’s how they’ve closed the strait. There’s hitting a couple tankers here and there and spiking insurance, versus hitting tanker after tanker after tanker. There’s hitting facilities in Fujairah on the UAE coast. There’s hitting the [Saudi] East-West pipeline. They have material for dirty bombs at a minimum. A fatwa from a senior Shia figure would be significant. They haven’t done any of that, and that says a lot.

What are the most important sources you’re following now for signal or anti-signal?

This is one of the most important things for anyone trading these markets right now. Israel went viral on Polymarket during the 12-day war. So there’s a huge amount of Israeli money on this platform. It’s already been at minimum an eight-figure transfer of wealth from Western traders to people following Israeli news; Israeli media was a lot more optimistic about the strikes than media in the west. For the strike markets and the Khamenei markets, all the supposed Polymarket sharps were heavily on the no side. The Israelis cleaned them out. A lot of those Israeli traders now have significantly more capital to throw around.

The problem is Israeli news is not what most of those traders think it is. Israel does not have a free press in the Western sense. They have a military censorship bureau and a press that is deeply interwoven with the defense establishment. Sometimes that means genuinely excellent advanced intelligence. Other times you get deliberate disinformation in service of Israeli military objectives. And the Israelis trading on this platform trust their news completely. They don’t see the other side of it.

Any specific stories that come to mind as being clearly bogus?

The News 12 report claiming it was the UAE that had struck Iranian desalination infrastructure. That was zero percent. The Emirates are a merchant state. They are not going to strike Iranian desalination sites 20 miles from their own coast when they’re so reliant on desalination themselves. The Israelis would love to get Gulf states visibly involved in a coordinated operation against Iran. That’s their dream scenario. So when that report dropped and the market spiked to 90 cents with real size, I was in hard on the other side. That’s wartime propaganda serving Israeli strategic interests, full stop. You don’t need to know anything else.

On the other end, when Israeli reporters were saying Mujtaba was going to be the next Supreme Leader, they’re not getting that wrong. How embarrassing would that be? Their whole posture is “we know everything about you.” The core of their intelligence reporting, from a handful of trusted reporters, is very, very good. Parsing the difference between those two types of reporting is where the money is right now.

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Any interesting wallets you are watching here?

One big one is @thequietrisk. I think he has close to a 100% hit rate right now on the major calls. He was sizing up on these correlated positions in crazy size. I was fading him at first, like, come on, this guy’s nuts. He ended up hitting them. He also got the Hamas ceasefire right back in October, got in ahead of time when there was really no public talk of it. Every time I look at his wallet I think this guy is nuts and then he hits it. He’s big on Reza Pahlavi coming back too. I keep an eye on him.

Do you have a theory about what the US and Israel are actually trying to do here?

The IRGC was designed to be the vanguard of the revolution, the insulating protective force of the entire Iranian revolutionary structure. But it’s also extraordinarily wealthy. The profitable sectors of the Iranian economy are essentially controlled by them. And that creates a vulnerability. Wealth and ideology are not always compatible over time.

I think the American and Israeli strategy, though I can’t confirm this, is a selective decapitation program. Not just kill everyone, but kill the people who are hardliners and leave the people who are more conciliatory. You look at who they’ve targeted and who they’ve left around and it’s hard not to see a pattern. There are relatively senior figures who are still around, while two layers down their command chain have been killed. How do you explain that if not selection? They did the same thing in Afghanistan with the Taliban. They waited years for Mullah Omar to pass away, conducted an airstrike on the next guy, and the next guy after that was one they could work with.

But the decision to kill Khamenei was very strange. Very, very bizarre. Here’s the thing that almost nobody is talking about. By most accounts I’ve been able to piece together, Khamenei was actually one of the only senior figures in the Iranian regime who was genuinely opposed to nuclear proliferation. He was opposed to taking that final step. The entire regime has been absorbing all the downside of having a nuclear program, the sanctions, the isolation, the economic damage, and none of the upside of actually having a deterrent. That was a concession to the hardliners in the regime but the lack of going all the way, that was largely his opposition.

So when you kill the one guy who was restraining their nuclear program, you have to ask what the logic is. Either you have very high confidence in who replaces him and what concessions you can extract, or you wanted a justification to keep drawing the Americans deeper in. I don’t know which it is. But it is one of the most consequential decisions of the whole war and I don’t think it’s being analyzed correctly by almost anyone.

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What about the opposition inside Iran? There was this view that we’re going to take out the regime and that will facilitate protesters taking over. Do you buy that?

Yes and no. The Iranian regime is actually fairly unpopular, especially in Tehran among the urban elite. That’s different from a lot of places where the capital is your base of support. In Iran the support for the regime is more in the rural Persian core.

But here’s the problem. There is no organized opposition that could serve as a catch-all. The MEK is a cult. It’s just a very weird organization, nobody actually likes it inside Iran. P-JAK is basically just a front for the PKK, which means it’s a foreign Kurdish operation. The Khuzestani separatists, come on, that’s just the Iran-Iraq War redux. Any of these separatist movements, Kurdish, Arab, Baluch, are going to repel the nationalist population, which is real and significant. Iran has a strong national identity, they see themselves as a great power. If your opposition network is entirely made up of separatist ethnic groups trying to break off pieces of the country, you’re not going to win the nationalists. That’s been a persistent strategic failure of the Israeli and American approach to Iran for decades.

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Is the U.S. military capable of winning a ground war in Iran?

When you start to look at the US military and realize it’s not as strong as everyone thinks, it’s really a big deal. The whole Cold War justification was, okay, we might not make more fighters than the USSR but our fighters are better. Then we finally see interstate conventional conflict in Ukraine and it turns out that wasn’t really true either. It’s ahead sometimes, behind at others. And the US has zero cultural appetite for taking losses.

Iran looks at that and sees an opportunity. If they can make this costly enough, spike oil, cause a recession going into midterms, they can potentially break the political will on the American side. That is genuinely their strategic play. It’s not crazy. It worked in Vietnam. The question is whether they have enough runway to execute it before the Israelis and Americans finish what they started. Because if the Iranians end up holding out long enough and making this a high enough cost, and you see a withdrawal, there’s no one coming to replace American presence in the region. The Europeans aren’t coming. Nobody’s coming.

If this shit escalates from here, there’s a very real possibility this ends up being just a really, really, really big war. I don’t think Korea or Vietnam would really be as consequential as this could end up being. You have the global oil supply at stake. You have a potential nuclear proliferation moment. You have the existence of Israel and rule of the Sauds and Gulf monarchies in general endangered. You have the credibility of the entire US-backed regional order on the line.

If Iran weathers this and the Americans withdraw, the Israelis are a weaker country than they think, they live in the shadow of the Six-Day War but forget Yom Kippur where Golda Meir was issued cyanide capsules, nuclear bombers were readied, and a last stand in the Golan is what saved the Galilee. The Egyptians don’t like that peace deal. The Gulf states are hedging. They are just waiting to see which way this goes. The whole regional architecture is dependent on American credibility and willingness to stay engaged. If that breaks, you’re going to see a very different Middle East very quickly.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

Follow Terry on X

In June 2024, Polymarket launched markets on how many times Elon Musk would post to X in a given week.

Elon tweet futures have since become a micro asset class, growing from $136k to $46.5m of volume in the last week of February 2026 - a 342X increase.

Watching the markets trade over several weeks, I began to obsess over a question:

Is there any edge here?

Or was this just a random walk through the mind farts of a dopamine addled billionaire?

Could I model Elon’s tweets?

After pulling all 86 weeks of historical market data and coding a tool: elonXforecast.com, the answer surprised me:

Elon’s tweeting habits are quite predictable.

I identified three key factors that give a tradable edge in these markets: momentum, weekly pacing, and outlier news events.

Looking back at the data gives a window into Elon’s recent arc. We see a steady uptrend through the 2024 election, a blowoff top in the DOGE era, and a second surge in late 2025 as Musk pivoted back to Tesla, xAI and SpaceX.

But enough about the past.

Let’s predict the future:

Factor 1: Momentum

It should be clear from the chart above that Elon’s tweet frequency does not make huge jumps from week to week: it exhibits momentum.

To quantify this we use a transition matrix.

Think of this as a cheat sheet: you look at how much Elon has tweeted this week (Low, Medium or High) and it tells you the probability of next week’s count based on past trends.

In the chart above, we see that a “Low” week (0 - 199 tweets) has a 61% probability of being followed by another “Low” week. A 39% chance of stepping up to “Medium” (200 - 399), and negligible odds of leaping to “High” or “Very High.”

Knowing that this week is likely to resemble the last, traders can check the prior week’s tier to have an idea of where the week will land, fading extreme buckets if the odds don’t support them.

It’s important to note that the sample size is very small on “Very High” (600+) weeks, with only 3 observations. The data is more robust in the low and medium tiers, where most weekly counts fall.

For “High” (400 - 599) and “Very High” weeks, the key takeaway is directional: volume tends to remain elevated once reached.

Factor 2: Mid-Week Pacing

The second tool we have for predicting tweet volume is the pacing curve.

By monitoring how many tweets have accumulated so far, we get a sense-check on whether the week is running hot, cold, or on pace.

This lets you project forward with confidence and spot when Polymarket prices lag behind the real data.

The diagram above shows the share of a typical week’s total tweets posted by day of the week over the last 14 weeks. What we see:

• Earlier in the week, when uncertainty is high (larger shaded blue area) the band is wide and projections are loose.

• By Tuesday, ~69% of the weekly total has usually been tweeted, narrowing the range significantly. If Tuesday’s count is 280 tweets and pacing shows 69% complete, the implied full-week total is 280 ÷ 0.69 ≈ 406 tweets. By cross-checking Polymarket odds, you can determine if it is within this probabilistic range or not.

The pacing curve is best used with the transition matrix: use the prior week’s tier as the starting expectation, then update it live with pacing curve data. If Tuesday’s pacing runs 20% above the average, the week is drifting towards the upper end of the matrix range and we may be heading for a breakout.

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Factor 3: The Woke Mind Virus

The first two factors are all about continuity.

But the life of Elon over the last two years has been anything but smooth: rocket explosions, political explosions, outbreaks of the ‘woke mind virus’ – these are all factors that can cause large moves in the tweet count.

The diagram above plots actual daily tweets against a moving average of the prior 14 days, highlighting periods where volume strays from recent norms.

The z-score tells us how far off today’s count is from the rolling 14-day average. A positive z-score indicates above-average spikes, while a negative one signals below-average dips.

I used a 14-day window to compute the rolling average. This is because the base rate of Elon’s tweets moves with events. This adaptive approach ensures outliers are flagged relative to the current “normal,” capturing surprises as trends shift. The below table shows the types of events that can cause outliers in the data:

Most of these departures, 85% to be exact, are positive outliers (volume spikes). Looking at the categories, we see some trends:

• “Woke Mind Virus” and other political commentaries tend to spark extended threads that can balloon the weekly total.

• Tech updates and election integrity topics are normally associated with lower tweet levels.

Is Alpha Available?

The above factors are all about what drives the final number of tweets each week.

But it doesn’t answer the big question: can I make money on this?

Are there consistent mispricings in the odds that tweet quants can capture?

The answer, happily, is Yes!

A look at the markets’ history shows that traders tend to overvalue longshots (low-probability outcomes) and undervalue favorites (high-probability outcomes).

In the diagram above, buckets in the 10-20% range have an actual win-rate of 7.4% despite being priced at 13.7%. Meanwhile, the buckets priced from 30-50% win ~43% of the time, more often than the implied odds of 34.9%.

This situation is well documented by Snowberg and Wolfers, who found out there is a tendency for markets to overprice longshot outcomes and underprice favorites. This is driven by how our brains process probability, rather than lack of information, a dynamic that persists even as volume scales up.

We can distill the insights into 2 actions:

• Buy NO shares on the 10-20% buckets at the start of week; or

• Buying YES shares on the 30-50% bucket.

However, the two strategies have very different risk profiles. The case study below shows why:

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Case Study: August 8, 2025. The Market Flip

It’s August 1st.

The market opens expecting a quiet week where “<215” is the favorite at 19%. The eventual winner, “470+” sits at 2.55 cents. Nobody is prepared for what is coming.

Then Grok Imagine launches and Elon blitzes the timeline with posts, adding more fuel to the raging Trump-Musk feud. By midweek, the tweet count blew past 200 and the market scrambled to reprice the upper bracket tweets.

A trader buying NO on every 10-20% bucket at the start of each week across 35 weeks would have placed 97 trades, won 90 of them (a 92.8% win rate).

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Putting it into Practice

Combining these gives us a three step workflow:

• Before the week begins, check the transition matrix to narrow which tiers are realistic. Buy the NOs where YES is at the range of 10-20%.

• As the week unfolds, track the pacing curve, by midweek, 69% of weekly volume is typically posted, enough to project a final total and compare that against Polymarket prices.

• If pacing diverges sharply from what the matrix predicted, check Elon’s feed for outlier trigger topics before sizing up or down. The idea is that you are buying NO shares on the ones that are systematically overpriced.

To make this easier, I’ve released the tool I created for this article:

https://elonXforecast.com/

It combines a live pacing curve with the Polymarket data from the current weekly tweet markets, giving you a real time dashboard for Elon tweet trades.

The good news is that, while these markets have grown massively in volume since launch, they are still not quite an institutional grade asset class so there’s likely a bit more time before the Jane Street guys show up.

Even still, 50 years of evidence suggests even they can’t fully arb away the longshot bias that has been a constant feature of even deeply liquid prediction markets.

Follow Terry on X.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. All odds are time sensitive and subject to change. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally

The Oscars are finally here.

The glitz. The glamour. The predicting.

Our friends at Stand, a pro trading terminal for Polymarket, are back with a look at four traders you need to keep an eye on tonight.

Enter Stand…

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When we’re looking to find smart traders in a certain niche, we start with Polymarket Analytics (the best prediction market history book around) to look for historical winners in the ‘Oscars’ and ‘Awards’ categories.

Once you’ve found your traders, Stand is the place to watch their moves in real time as you can filter by category.

Trader #1: ImJustKen

Oscars Category PnL: $41,567 | Win Rate: 78.8% | Gains / Losses: $44,461 / $2,868

Awards Category PnL: $75,508 | Win Rate: 72.2% | Gains / Losses: $88,537 / $13,029

It’s well known that @ImJustKen (aka Domer) is a top Polymarket trader. But few appreciate his category-level dominance in the Oscars. He’s sitting on $41,567 PnL with a 78.8% win rate. That suggests he’s finding narrative shifts before the crowd catches on.

Example? Domer’s biggest position heading into the Oscars is Timothée Chalamet “No” for Best Actor. Looking at the chart, we can see how Chalamet’s odds have collapsed in the wake of his controversial takes on the beloved American art forms of ballet and opera.

Fading Chalamet is conventional wisdom now, but Domer was on this trade before it was priced in, and is sitting on nearly a 100% gain before the red carpet is even set up.

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Trader #2: wolfmoon

Oscars Category PnL: $4,514 | Win Rate: 61.9% | Gains / Losses: $7,749 / $3,235

@wolfmoon is going heavy on a One Battle After Another sweep: when one film dominates Best Picture, the adjacent categories (Director, Screenplay, Cinematography) tend to follow, and those markets are usually slower to price it in.

Game plan for Oscars night: watch the wallet to see if wolf starts trimming Best Picture while holding the side categories. If he holds or adds to both, he’s doubling down on One Battle running the table.

Current positions:

• Best Picture: One Battle After Another (Yes)

• Best Director: Paul Thomas Anderson (Yes)

• Best Actor: Timothée Chalamet (Yes)

Trader #3: @11122

Oscars Category PnL: $10,080 | Win Rate: 69.8% | Gains / Losses: $19,184 / $9,104

@11122 is playing another common strategy: holding a large consensus anchor position, plus a few longer shot side bets in the Best Supporting Actor polymarket.

If you see the wallet consolidating Supporting Actor positions into one name, that’s worth paying attention to.

Current positions:

• Best Supporting Actor (multiple legs)

• Best Picture: One Battle After Another (Yes)

Bonus: @weflyhigh (one to fade)

Oscars Category PnL: -$11,174 | Win Rate: 33.3% | Gains / Losses: $478 / $11,653

Under no circumstances should you copy trade @weflyhigh in entertainment markets. What we have here is a sports trader who wandered off the reservation. He crushes on hockey (#2 overall) and Olympics (#1 overall). Oscars? Not so much.

The silver lining: Stand’s copy/counter trade feature lets you filter by category, meaning you can ride weflyhigh’s athletic instincts and fade his film takes simultaneously. Some of his current Oscars holdings:

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Closing

You can follow all four traders on Stand with one click and get their trades in real time. For those looking to put these insights to work, Stand’s copy and counter trading tools make it easy to act on what you see.

Sunday morning is the calm before the storm.

If the Oscars market feels “ho-hum” right now, that’s the perfect time to watch who is adding to their position, and who is quietly heading for the exit.

All Oscars Polymarkets

Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. All odds are time sensitive and subject to change. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data is viewable globally.

Jacob Savage is an LA-based writer whose essay “The Lost Generation,” an account of how DEI reshaped hiring across media and academia, was one of the most-argued-about pieces of 2025, garnering a 65 million view tweet and reshares from the Vice President.

If, like Jacob, you believe that identity politics and its attendant poor taste continues to drive Hollywood, then, why not use this knowledge to make some +EV Oscars picks?

It’s important, before thinking about this year’s Oscar contests, to remember that last year one of the worst movies of all time nearly won Best Picture.

Emilia Pérez wasn’t just bad — it was transcendently bad, a sort of maleficent sui generis achievement in its own right. It was, quite literally, Springtime for Hitler told earnestly: a film in which an evil Mexican drug lord undergoes gender reassignment surgery and becomes an Actually Really Good Caring Person. This was wokeness as filtered through the eyes of a clueless French Boomer, who seemingly had just discovered trans issues and cartel movies and musicals, and couldn’t believe his luck that no one had combined them yet.

Netflix (successfully!) positioned this terrible film as the anti-Trump Best Picture pick and of course the Academy ate it up. You could practically hear the acceptance speeches: “a film that transcends borders, sexualities, nationalities,” etc. The only reason the worst movie of 2024 didn’t sweep the Oscars is its transgender star was revealed to be something of a Nazi.

Bad movies have of course won Best Picture before. But Emilia Pérez represented something new: a bad foreign movie not just elevated by sentiment, but by politics and incompetence.

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How Did This Happen?

The answer, like so much else, goes back to 2015. That year only white actors were nominated for acting awards, the media freaked out, and #OscarsSoWhite was borne. In the aftermath, the Academy launched its A2020 initiative with the goal of doubling the number of women and people of color by 2020. What followed was an unprecedented expansion in membership, from roughly 6,000 in 2015 to over 11,000 today.

People focus on the increase in female and minority representation, but the real story is the internationalization of the Academy itself.

Nearly 3K (50%!) of new members since 2017 are not American. As anyone familiar with the old Hollywood Foreign Press Association can tell you, international bodies are invariably more corrupt, more manipulable, and more stupid than their American counterparts. The Academy is no exception.

Three of the lowest-grossing Best Picture winners in modern Oscar history have occurred since 2020 (Nomadland, CODA, and Anora). In 2020, the year Parasite won (which deserved it!), Polymarket fan favorite Uncut Gems wasn’t even nominated. Everything Everywhere All At Once — two hours of the same annoying set-piece — beat The Banshees of Inisherin and Tár and Top Gun. Oppenheimer had to gross $952 million for the Academy to acknowledge it.

So: Stop treating the Academy of Motion Picture Arts and Sciences like an American body with American tastes and norms. The key to Oscar alpha isn’t scraping box office data, or going to Bob’s Big Boy to hear a grip talking about how he overheard his DP say PTA is finished, or flying to Cannes to hear Zaslav explain why neither of his Best Picture nominees deserves to win. It’s to inhabit a different sensibility entirely.

Think instead like a new member of the Academy: you’re a middling European cinematographer with mediocre English and a limited understanding of American politics, and the keys to the kingdom have been deposited in your lap.

With that in mind, let’s get to the picks:

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BEST PICTURE

One Battle After Another isn’t a great movie. It’s not even really a good movie — that ridiculous, earnest ending, the feeling that tonally everyone is in a different film — but it is a beautifully-crafted major film that didn’t suck, and that counts for something. Plus PTA has been in the game forever; he’s basically owed an Oscar for Boogie Nights and There Will Be Blood.

Sinners is more interesting. The industry has been telling itself for years that representation sells, and mostly it hasn’t, and along comes Ryan Coogler and makes it sell. He took what should have been a niche period horror film — Black musicians, Mississippi, vampires— and made a studio movie that didn’t lose money. In 2025, that’s a miracle.

For the Academy’s American members this feels like a genuine toss-up, with Sinners surging at the right time. But the foreign contingent doesn’t really know what to make of either of these films, which are both more culturally American than any frontrunner since Green Book, a movie so Boomer cringe it murdered the White Savior era for good. After all, the Euros don’t know the blues and don’t know the South. But they do have vague ideas about leftist radicals — Baader-Meinhof! Carlos the Jackal!— and a Serious Film by a Serious Filmmaker is internationally legible in a way that American genre films aren’t.

CONSENSUS: One Battle probably has the edge after all, along with PTA for Best Director.

UPSET: If you’re feeling frisky, and think the Europeans still feel personally responsible for the state of American race relations, Sinners makes sense. The trade coverage of Coogler’s contract negotiation — he secured ownership of the film through 2050 — has been framed as a racial empowerment narrative, as though Hollywood deal memos were a new chapter in the civil rights movement.

But keep PTA as Best Director.

BEST ACTOR

CONSENSUS: Chalamet has been campaigning hard and somewhat embarrassingly and seems to have crippled his own chances. A few weeks ago, when Michael B. Jordan was sitting at 7%, he looked like an excellent sleeper. Now that he’s above 50%, I’m not so sure. Because here’s the thing about the foreign contingent: they don’t love Timmy, and they don’t love Michael B. Jordan.

UPSET: What they love is Leonardo DiCaprio. The glitz, the glamour, the 22-year-olds. Leo is Hollywood for them, ever since they fell in love with cinema watching Titanic for the first time at the old cinémathèque. If the American vote fractures between Jordan and Chalamet, the Euros break for Leo. His stoned, washed-up revolutionary was the best thing in One Battle — and the Academy loves nothing more than rewarding a legend for playing against type. At 6%, he’s extremely undervalued.

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BEST ADAPTED SCREENPLAY

CONSENSUS: The conventional wisdom is that One Battle is a sure thing: PTA will take Best Adapted Screenplay as the capstone if it sweeps the other awards, or as consolation if he doesn’t. But Hamnet has been showing signs of life (in LA circles, if not the Polymarket chart), and there’s no law that says consolation prizes land in the screenplay category. If One Battle underperforms, it will likely underperform here too.

UPSET: Hamnet is a film about the mysterious alchemy between suffering and art, which is just unbelievably Euro-coded when you think about it. Writers writing about writing, the more boring and treacly, the better. What foreigners do know is that they’re supposed to like Shakespeare, even if they don’t understand it (and here’s Chloe Zhao, admitting to not understanding it). At 3%, Hamnet is a steal.

BEST ORIGINAL SCREENPLAY

CONSENSUS: Similar “sure thing” situation in the Original Screenplay category, with Coogler supposed to take Best Original Screenplay as capstone if Sinners sweeps, or as consolation prize if he gets shut out of the major awards. But again, the foreign contingent doesn’t quite understand Sinners as a screenplay...not enough talking, too many vampires.

UPSET: At 2%, Marty Supreme is mispriced. The Euros, for what it’s worth, have no idea what’s going on in a writing category — which makes them true wild cards. Our hypothetical DP didn’t fly to Los Angeles to vote for a vampire movie.

BEST INTERNATIONAL FEATURE

CONSENSUS: Sentimental Value, The Secret Agent, and Sirat are all well-regarded, and Sentimental Value is the consensus favorite. Foreign films are the Academy’s new home turf, and the safe money says it wins.

UPSET: The vast majority of Academy members haven’t seen most of these films. If Sentimental Value, The Secret Agent, and Sirat split the cinephile vote, the political bloc gets its moment. The Voice of Hind Rajab — a docudrama reconstructing the final hours of a six-year-old Palestinian girl trapped under fire in Gaza — is currently sitting at 2% on Polymarket. It is a genuinely harrowing film. It is also a film that allows its winners to shout “Free Palestine” from the podium of the biggest awards show on earth.

Assuming a third of the Academy votes on politics — and Emilia Pérez‘s nomination suggests this may be a conservative estimate — and if the cinephile vote fractures, The Voice of Hind Rajab is a gift at 2%. Because we know how Euros feel about Palestine.

BEST DOCUMENTARY

CONSENSUS: The Perfect Neighbor is the heavy favorite — it’s a Netflix documentary, which means the Academy has already seen it, whether they wanted to or not. Mr. Nobody Against Putin feels like three wars ago. The Greenland flags have already gone up in Echo Park.

UPSET: The Alabama Solution is the best film in the category: real footage, real horror, prisoners filming their own abuse on contraband cell phones. The documentary branch has surprising taste. Unfortunately, the rest of the Academy, like the rest of us, has Netflix.

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Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. All odds are time sensitive and subject to change. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade although information is viewable globally.

Jon Turek is a macro strategist who spent the last several years running a private advisory practice. His Substack Cheap Convexity relaunches today.

The Oracle caught up with him four days into the Iran-Israel war to discuss the implications of the conflict for macro markets and why prediction markets are becoming an essential tool for macro traders.

This interview has been edited for length. All answers are his own.

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Your Substack is called Cheap Convexity. What does that mean?

The way I think about cheap convexity is looking for things where you’re not risking a lot but could potentially make a lot. Sometimes those manifest as lottery tickets. But more precisely, it’s about finding situations where the market is priced for one very certain world-state, while a new part of the distribution is becoming highly relevant and the market hasn’t fully respected it yet.

If you’re wrong, the market just trades its base case, which is where it already is. But if you’re right, you get a nonlinear move because the whole distribution has to re-price.

Prediction markets are a perfect vehicle for this framework because the distribution is explicit rather than implicit. You’re already trading a percentage probability, so the asymmetry is right there in front of you.

Can you give a concrete example of this?

Last year, in February or March, I was writing to my institutional clients about a yield curve steepener in Europe. Germany was on the precipice of major fiscal stimulus, driven by the new political climate and the pressure for defense spending. At the time, the German 2-10 spread was sitting at zero basis points.

In a world where nothing happened, that curve would still likely steepen a little, because curves normally steepen during cutting cycles and the ECB was still cutting. But in the world where German fiscal spending materialized, you could combine further ECB cuts with a massive amount of fiscal stimulus and the curve could go much, much steeper. If I was wrong, maybe I lose 5-10 basis points on a slower-than-expected cutting cycle. But the curve was never going to trade negative 25 or negative 50 basis points, because that only happens in aggressive hiking cycles, and the ECB was cutting.

The curve ended up steepening from zero to 75 basis points. That’s the kind of trade I look for: high floor, new part of the distribution becoming live, market not yet appreciating it.

The alpha there wasn’t necessarily predicting the German fiscal package would happen. It was understanding what the market was pricing and where distributionally it could be surprised.

How does that framework translate to prediction markets? What would you have been watching on Polymarket around that trade?

There are two sides to this. On the input side, it’s becoming well documented that prediction markets influence traditional markets directly. Two years ago, during the first Israel-Iran flareup, energy traders were not really watching Polymarket. This time around, every energy trader had it up on their screen. That is now entrenched and will only grow as these markets get deeper.

On the output side, I think there’s a real opportunity to use prediction markets to speculate on macro variables directly. The Fed funds markets on Polymarket are already deep enough that a smaller institutional player could put real size in.

But beyond that, you can pick and choose the exact part of the distribution you want to express. Two years ago if I wanted to bet on where US 10-year rates would be, I’d have to back into it through options pricing on futures. Now I can just look at Polymarket and see: what’s the probability the Fed is at 2.75% next year? I don’t need to reverse-engineer it from a call spread.

You’re in Israel and living through this conflict in real time. What are the most relevant Polymarket contracts for macro traders right now?

The obvious ones are ceasefire timing and Hormuz closure. Every energy trader has those up on their screen. But the more interesting trades to me are the second-order effects.

The one I’ve been playing with is Israel-Saudi normalization by end of year. That market has moved from 10% to 25% over just the last couple of days, as the market starts to appreciate that if Israel emerges as the regional security guarantor, normalization stops being a choice and starts being a matter of necessity.

Muslim countries have actually received more Iranian missiles in this conflict than Israel has. That’s a fact that permanently changes regional calculations. I think normalization is basically a matter of when, not if, at this point. The shekel would rally hard on that news, and I don’t think shekel traders are fully pricing a 25-30% probability of that outcome.

The other second-order I’ve been thinking about is whether this conflict mechanically increases the probability of a Russia-Ukraine ceasefire. The munitions constraint becomes more binding when you have multiple fronts open simultaneously. The US is acutely aware that you don’t want too many active conflicts while the Asia risk around China-Taiwan is always in the background. Ceasefire odds for Ukraine have come way off this year, but I think a prolonged conflict here actually makes a deal more likely, not less.

Why hasn’t China-Taiwan risk gone up? My instinct was that a distracted US would be an invitation.

The problem for China is that they’re the world’s biggest energy importer, and 20% of their LNG comes from Qatar, which is right in the middle of this. Aggressively moving on Taiwan in the middle of an energy shock is not the backdrop you’d want. They have reserves, they’re well managed, it’s not that they’ll run out. But energy is their structural weakness.

It’s not a simple time for China right now. That’s probably why you haven’t seen the geopolitical risk premium spill over into Taiwan contracts the way an armchair strategist might have expected.

On Hormuz closure. Our recent interview with Doomberg made the point that the real question isn’t whether it closes, but how long it stays closed. Duration is what matters.

That’s exactly right, and I’d go one step further. Right now the Hormuz contract is effectively a ceasefire question. The strait is technically open, it’s just that nobody rational wants to sail through it.

The more pressing issue for financial markets is impairment. If there’s a ceasefire tomorrow but a Qatari LNG facility has been damaged, the strait can be open and you still have a massive energy shock. I saw an engine facility in Bahrain get hit. Any physical impairment of infrastructure makes this a much more lasting event even if the shooting stops.

I think there should be better Polymarket contracts around this. Qatar Energy has a contract starting to get some volume, and that’s exactly the right direction. The area under the curve, what’s the cumulative supply disruption, matters more than the point-in-time closure question.

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What feels most mispriced to you right now, on Polymarket or in traditional markets?

A few things stand out. First, the European Central Bank hiking rates this year. A week or two ago, the probability of an ECB hike was essentially zero. I think it’s now becoming possible we see more than one hike. Europe is extremely dependent on Qatar LNG. They’ve been weaned off Russian energy. They’re coming out of winter with dangerously low gas inventories. Their tolerance for even short-lived inflationary episodes is very different from other central banks, and their mandate is their mandate. The market has not fully digested this.

I’ve also been working up a piece on Christine Lagarde leaving the ECB chair by end of 2026 . I think that’s materially underpriced. The French presidential election next April has real potential to go right-wing, and Lagarde would not want a new right-wing French president to have influence over who her successor is. She has strong incentive to exit on her own terms before that happens.

On Europe, do you see political ramifications beyond the ECB? Starmer, other European leaders at risk?

The UK seems to be coming out of this the weakest politically. Starmer came into this episode already pretty weak, and I think the political ramifications will be relevant there. The more interesting one to watch going into next year is the French presidential election in April 2027. That’s going to be a massive event for both traditional financial markets and for Polymarket. It’s the kind of thing that should be on every macro trader’s radar right now.

What’s your broader view on how this conflict ends, and what Iran looks like on the other side?

The constraint on this war, as Blinken once put it, is markets and munitions. Trump is not going to be running this campaign with oil at $120 going into midterms. The hawks in the administration might say: we can wrap this up in six weeks and have oil back at $55-60 by then, and everything is fine. That’s the scenario they’re gaming. What they’re calling the “Donroe Doctrine” is that the administration moves swiftly in military episodes and gets out.

On what Iran looks like after: I’m actually a bit more optimistic about regime change than most people I talk to. The key difference from Iraq is that the Iranian population has demonstrated repeatedly that they want change. You have these massive protests every few years. If you’re trying to convince a population that life could be better, that’s an easier trade in Iran than almost anywhere else in the region because a large majority of the population already believes it.

The modal outcome is probably some messy internal proxy conflict between the IRGC trying to hold on and US and Israeli-backed groups. But I think about the Egypt model after the Arab Spring: messy at first, then you get your guy in. That outcome seems more achievable in Iran than a lot of other US-led regime change efforts, precisely because the popular will is already there.

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You’ve been talking about prediction markets as tools for hedging, not just trading. Can you explain that?

This is something I want to use Cheap Convexity to really hammer on. Right now, the only businesses that hedge energy prices are large corporations: airlines, energy companies. A small manufacturer with real exposure to oil prices has no practical way to hedge a tail scenario.

But functionally, a prediction market event contract is just an option on an event or a price level. If you’re a small business that gets badly hurt if oil goes to $120 but doesn’t really care whether it’s at $60 or $80, you can buy a contract that pays out at $120 for, say, a 5-7% premium. That’s exactly what Goldman Sachs would structure for a Fortune 500 client, just with more zeros. You don’t need to pay for markets to chop around in their normal range. You only want exposure at the tail, because that’s where you actually get hurt.

The same logic applies to currencies. I live in Israel and earn dollars. Dollar-shekel has moved about 20% in two years. That’s a meaningful change in my cost of living. I would pay a small premium to own the tail of that. Every real business has currency risk, interest rate risk, energy risk. None of them are solving for it at the small business level. Prediction markets are the obvious answer.

What’s the path to getting there?

It’s partly educational and partly just time. A 50 or 60-year-old business operator might look at this and think it’s a phase, the same way some people wrote off crypto early. But as younger people build businesses and realize this tool exists, I don’t see why it wouldn’t grow. It’s a function of awareness and time.

The market structure question is also important. You need retail flow first, then market makers follow. Once market makers are there, institutional risk-takers can come in at real size because the liquidity exists. The chicken-and-egg problem resolves itself, but retail has to come first.

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What prediction markets would you most like to see added?

Non-Fed interest rates, especially the 10-year, because that’s the economy-sensitive rate most businesses actually borrow against. Longer-term currency pairs beyond the major dollar crosses, especially ones with high geopolitical sensitivity.

On energy specifically, I’d love to see more granular infrastructure contracts around LNG facility impairment and tanker availability, rather than just the binary open/closed Hormuz question. The area-under-the-curve problem needs better market expressions.

And honestly, five-minute oil markets. I know that sounds like pure gambling, but bootstrapping retail liquidity through short-duration products is how you eventually get to the institutional-sized hedging markets. You need the retail activity to attract the market makers. That’s how market structure develops.

Follow Jon Turek on X and read Cheap Convexity on Substack.

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Disclaimer Nothing in The Oracle is financial, investment, legal or any other type of professional advice. All odds are time sensitive and subject to change. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade althought information is viewable globally.

is a pseudonymous team of former commodities executives publishing one of the top Substacks on energy, finance, and geopolitics under the iconic green chicken avatar.

The Oracle caught up with Doom on March 4, as the Iran-Israel war entered its fifth day, to discuss missile attrition, laser beams, what the Brent-WTI spread is telling us, and which Gulf Arab state he’s watching most closely.

This interview has been edited for length. All answers are Doomberg’s own.

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The last time we spoke, we talked about your thesis that World War Three was a monetary struggle for the future of the US trading and energy system. Are we moving to the hot phase now?

In our view World War III started in 2014, when Putin sold his US Treasuries and placed the proceeds in gold. The war in Ukraine, which started in 2022, is the biggest hot battle before this one. And the Iran war is the latest battle in that same conflict. The economic trade war between China and the US is another battle. Iran is a BRICS state, a key supplier of crude to China, and an on-again, off-again ally of Russia.

There’s only really one battle left after this: US versus China over Taiwan. The world is in a very precarious place right now.

Your WWIII thesis suggests that Trump initiated this to knock out China’s energy suppliers, Venezuela and now Iran. But I’m hearing other arguments that Israel was dragging in the US. Where do you come down?

Look, Donald Trump’s the President of the United States. The buck stops with him. He’s the person that the US public has elected, and his party will stand for election in the 2026 midterms, and whoever wins the Republican nomination will be held to account and/or rewarded for whatever happens in the weeks ahead. Every country in the world is trying to influence the President of the United States for obvious reasons. Even if that’s true, it doesn’t matter to us.

One of the hallmarks of a lateral thinker is an ability to separate an emotional attachment to the correctness of an axiom from whether or not it is currently working to explain events. And I would argue that the energy axiom: that the US is in the middle of World War Three, and energy is at the core of all wars, and China gets its energy from Venezuela and Iran and Russia, and the US just happens to be in various stages of war with Russia, Venezuela, and Iran, I just find it very difficult or implausible to believe that this is all some Israeli-driven set of coincidences. And so yeah, we firmly are in that second camp.

What are the four or five most salient sources you’re looking at on a daily basis to understand what’s going on?

The primary things I’m looking at, because there’s just such a thicket of propaganda out there, are market indicators, things like Polymarket, but also the energy market. The energy markets are incredibly sophisticated. There’s billions of dollars on the line to getting these things right.

Over the weekend, I decided to try an experiment. I personally bought a new clean iPad and created some new login credentials and a fresh email and downloaded the Twitter app. And I spent an hour training the algorithm that I was pro-Iranian, anti-American. I wanted to see what that side of the world was telling itself. And two amazing things already a few days in: it’s a wholly different universe. Shockingly so. The standard Doomberg Twitter for-you feed versus that feed might as well be on different planets. The parallel universe theory of physics is alive and well on Twitter today.

Then yesterday, something significant happened and that feed was basically turned off. You can no longer find alternative views to what’s actually going on in Israel on Twitter in the way that you could in the first 48 to 72 hours after the war started. You actually have to live it to see it. With the snap of a finger, a switch was flipped.

Every single morsel of information Twitter is feeding you is being shaped, controlled, or influenced by somebody. That’s where I think markets do help. It costs money to manipulate markets, especially extremely liquid markets like oil and natural gas.

Beyond that, the only thing we’re really looking for now, three or four days into the war, is the answer to one simple question: Is Iran still firing advanced missiles and drones?

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What about the missile laser system Israel apparently deployed on night one? Does that change the interceptor equation?

On the laser stuff, lasers are very energy intensive, and there’s only so much energy in Israel. They get it from natural gas. And those natural gas fields, if Iran is capable of launching missiles with targeting indefinitely, then it comes down to a missile defense war versus a missile offense war.

I saw Pete Hegseth out talking about essentially carpet bombing Iran. That’s not going to win the war. You could blow up as many homes as you want in Iran but you need to get these launchers. The US carpet-bombed Germany for how long in World War Two?

It’s going to be a lot of deaths, a lot of suffering. That’s not going to win the war. It’s going to make for great TV and convince people that the war is being won. But what really matters is: can Iran still launch advanced missiles and drones? Today is day five. They still can.

Let’s talk about the Gulf oil infrastructure. I’m surprised you’re focused on whether Iran can launch missiles at Israel rather than on what they might do to Gulf oil facilities and the Strait of Hormuz.

No, it’s wherever they decide to shoot them. They’ve made some decisions about where to shoot. They’ve kept some escalation in reserve. They may have effectively closed the strait, but they have not yet blown up Ras Laffan, for example, which is Qatar Energy’s export terminal. They lobbed a few drones that way to prove they can, and the company has preemptively shut it down and declared force majeure. But that infrastructure could be turned back on if the war ended tomorrow.

There’s a world where that restraint ends and Iran just blows up the Saudi oil fields, the export terminals, the oil pipelines, Qatar’s LNG export capacity. They’ve not yet done that. The missiles launched into the Arab countries, in many ways, is more important than what’s going on in Israel. Huge amount of censorship in those countries too. All eyes on Bahrain.

Ok, let’s get to the markets. Strait of Hormuz closure at 78% through March 31

As you’ve defined it, the strait is already effectively closed. I suppose we just need to get to the seven-day moving average. But there’s no value in betting it either way at 78% by March 31. I think that’s probably a fair price, because there’s a chance that the war resolves before then and the strait won’t have been closed by that seven-day moving average definition. And it does take seven days to get a seven-day moving average.

What about duration? How long does this go on?

Obviously everybody’s modeling this exact question. The thing we played around with yesterday is it’s not just oil and gas that go through that strait, but an awful lot of food and fertilizer too, and both ways.

How much food is actually in the Gulf Arab states allied with the US where the US currently has bases? How much food is in Bahrain? How much food is in Saudi Arabia? I mean, it’s quite literally the direct question. Nine meals to crazy isn’t just a prepper phrase.

We have not yet seen escalatory strikes on the desalination facilities across the Middle East. Those are milestones and markers we’d be looking for. That kind of tells us this war can’t go on for much longer. I don’t think the strait can be closed for two or three weeks.

We’re punching up a piece for this weekend on just what a precarious situation the European Union is in. Here we are again, five years after the beginning of the first energy crisis. Europe is coming out of the winter of 2025-26 with dangerously low gas inventories, still cutting off Russian imports, and the LNG markets are on fire. This can’t go on.

Iran’s strategy seems to be: launch targeted missiles and numerous drones every day, drip drip drip, and run the clock out on the global economic capacity to absorb this hit. Whether that’s successful or not is the only thing that remains to be seen.

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Qatar Energy LNG resumes production by March 14. That was briefly above 90% this morning and crashed. What happened there?

That was the force majeure tweet from the official Qatar Energy account, which came out at 7:24am Eastern this morning. One wonders whether the announcement to suppliers went out earlier than the tweet, which would make sense.

Force majeure means: for reasons beyond our control, we are unable to satisfy our contractual obligations, and because this was outside of our control, we’re insulating ourselves from damage claims. Even if the war is resolved, it doesn’t necessarily mean production will resume right away. You have workers evacuating. It takes time to safely shut down these things and then safely bring them back online. That’s a pretty tight schedule for March 14.

Ceasefire by March 31 is only at 38%. Does that feel right?

If there’s only a 38% chance of a ceasefire by March 31, the world is going to be in a very different place. And if this war is still as hot on March 31 as it is today, oil and gas are mispriced.

The TACO trade is in the back of my mind too. The market might believe that Trump declares victory and goes home, like he did after the June 12-day war, obliterated Iran’s nuclear capabilities, declared victory. But we’re pretty far down that branch now, and his base is so split over the war. I don’t know how that happens. But the market is kind of indicating that’s at least one of the possibilities.

The other outcome is regime change, revolution, chaotic dissolution of Iranian society. One of those two outcomes would need to happen in the next couple of weeks, because I don’t think the strait can be closed for two or three weeks.

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US ground troops / invasion of Iran, that’s been very spiky. Do you have a view on whether the US is serious about installing a government, or are they content to keep bombing with air power?

In reading the resolution rules, the market resolves yes if the US commences a military offensive intended to establish control over any portion of Iran. Now, there are portions of Iran that the Iranian government doesn’t really control, which is the Kurdish area in the West overlapping with Iraq and Turkey. And another way you could see significant US troops on the ground is along the banks of the strait, building a beachhead as a buffer zone to reopen the Strait of Hormuz specifically.

There’s also a history with the Kurds. If we were to insert boots on the ground, that would be a place to do it. “Any portion” is a very expansive definition. I’d say that contract at around 25% is being priced with a lot of time premium too, since it doesn’t expire until December 31.

Does Iran make China-Taiwan more likely? I’ve been surprised that this has been flat since this started.

In a world where Iran keeps firing missiles and the US runs out of interceptors, that would seem to be a pretty prime time for China to make a move on Taiwan. But China could also just embargo the island, cut off its hydrocarbons, and achieve its geopolitical objectives without a military clash. Is there a contract for “Will China try to embargo Taiwan before 2027”? Because that’s what I think they would do.

The two happiest people on the planet over this war are Vladimir Putin and Xi Jinping. Ukraine is not getting air defense missiles relative to what it could be getting, because there’s a whole bunch of them in the Middle East. There are reports, I don’t know if they’re true, that a THAAD system is being considered for movement from Korea into the Middle East. There were reports of THAAD-related assets being destroyed in Qatar yesterday.

China has been buying an extra million barrels a day of oil for a year. Russia has a lot of spare oil capacity. There’s an awful lot of oil sloshing around on the seas. And I saw reports that China is leaning on Iran to allow the strait to reopen — they desperately need that crude.

It would seem to open a narrow window of opportunity for China to make a move. If they don’t now, then when?

What are the energy markets telling us right now, and is it too early to play the Doomberg “sell the spike” normalization trade?

As we’re recording this, Brent is at $81 and LNG in Europe is at 16. Yesterday LNG in Europe was at 22 and Brent was kissing $85. That’s telling us the market is not anticipating $120 or $150 oil. The WTI-Brent spread is up from $5 to about $7.40, a 40% increase, but not a real crisis indicator yet. In a world where things really hit the fan, you could see that go to $10, $12, or $15. That would be our signal.

On the normalization trade: a little early. You don’t buy front-month puts — you buy year-out puts, because a year from now the price of oil is either going to be way lower than it is now, or it doesn’t matter because we’re all dead. This is kind of like Pascal’s Wager. Both oil and LNG in Europe are consolidating right now, telling us the market thinks there might be a path out of this war, even though we don’t see one. The market is probably right that this doesn’t go on indefinitely. The question is how much damage gets done before it stops.

Will other countries get involved? France is at 16% to strike Iran by March 31.

I think France will get involved. Macron has signaled he views this as an opportunity to reestablish French relevance on the geopolitical chess board. He’s sending an aircraft carrier there. He’s talking about spreading the nuclear shield of France around. But 16% for a strike on Iran specifically — that’s a question of definition. Involved versus strike Iran are different things.

Canada came out initially supportive then did a 180 yesterday. I was surprised.

This is something I’m really buying about Polymarket: the definition of resolution is really what you need. You can’t just look at the headline contract and say “that’s cheap.” You have to read the rules.

What polymarkets would you create now that don’t exist?

Regime change in Bahrain. I would load that one up right now. Bahrain is an 80% Shia majority Arab state. The US naval base has been badly damaged, wildly underreported in the West, and there are ongoing protests. The pro-Iranian strategic view is that achieving regime change in Bahrain would be the first domino to fall in the Arab states, which are largely ruled by unpopular monarchs. If we see regime change in Bahrain, that is a very important milestone that very few in the West even have on their radar or would understand the significance of.

Also: Houthi Bab-el-Mandeb closure. The Houthis have been less involved than one might have expected so far. The Iranian view is they’re holding back reserves for when air defense systems have been fully exhausted, so the impact of the Houthi offensive will be all the greater.

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Disclaimer: Nothing in The Oracle is financial, investment, legal or any other type of professional advice. All odds are time sensitive and subject to change. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

“Belikewater” is the pseudonym of a professional forecaster with Sentinel Global Risks Watch, a nonprofit forecasting team focused on tail risks.

When we first spoke in June 2025, less than a week before Trump first hit Iranian nuclear sites in “Operation Midnight Hammer,” she gave Khamenei just a 15% chance of surviving the year in power.

While the timeline was off by a few weeks, Belikewater is known for anticipating Trump’s most aggressive moves when the conventional wisdom is hammering the TACO trade.

Four days into the Iran war, whether the Iranian regime survives is deeply uncertain. Forecasting research shows that aggregating forecasters with different methods and temperaments, known as “ensemble forecasting,” produces better outcomes than any one analyst.

The Oracle invited belikewater, and four other members of the Sentinel hive mind, for a panel interview on what happens next in Iran. The members:

• Belikewater, Sentinel’s most hawkish voice.

• Vidur Kapur, described by teammates as machine-like in his focus on the motivations and personalities of the key actors

• Nuño Sempere, Sentinel’s founder, the base-rate maxi of the group

• Misha Yagudin an AI founder currently in Tel Aviv, previously cofounded the Samotsvety Forecasting team, a predecessor of Sentinel

• “Ben” a top-ranked competitive forecaster with a hard science background.

This interview has been edited for length. All answers are their own.

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What was Sentinel’s last forecast before the strikes, and what were you thinking on Friday night?

Vidur: The last forecast we made was Monday of last week. We asked whether the US will strike Iran by March 8, by end of March, and by end of June. We were at 38% by March 8, 66% by end of March, and 79% by end of June.

By Friday I was telling some friends this is probably the weekend it’s going to happen. There were lots of embassy evacuations. The reason we expected it at all was the huge US military buildup in the region and Trump explicitly saying he was going for regime change. We still held out some hope that negotiations would succeed.

Nuño: One signal for me was the conflict between the Pentagon and Anthropic because they had this harsh 5 p.m. Friday deadline. Why do you have a very harsh deadline unless you need it urgently? I did post in our channel:

“I just put 2 and 2 together and realized that the Pentagon wants to use Anthropic’s models for something in Iran, maybe identifying military targets to automatically kill them. Otherwise it’s not that urgent.”

More generally, if you can credibly threaten to bomb Iran and kill the leaders, why wouldn’t they take a deal? I also thought the Iranian foreign minister was amazing at drawing things out, hoping Trump loses interest. You see something similar with Russia, where every time Trump gets upset they offer talks to stall.

Ben: I had assumed the US was willing to make a serious economic rapprochement with Iran. There were offers to provide nuclear fuel in perpetuity if Iran gave up its own facilities. These seemed like pretty serious concessions and Iran should be taking them seriously if they’re rational. But it’s hard to view the former Iranian leadership as particularly rational given that they did not manage to convince the US they were serious about a deal.

Nuño: It also seems that maybe the US was not dealing in good faith, making these proposals so that the Iranian leadership would have to meet to agree on whether to take them. They’d be meeting together so they could be bombed. That was a good chess move.

Belikewater: Axios today confirmed that the US and Israel originally planned to attack Iran a week earlier than they did, and that before the strikes, just like last year, the US and Israel wanted to signal there was no imminent strike so that Khamenei and the others would feel safe. It was the same playbook as Operation Midnight Hammer.

Meanwhile we had endless cargo flights coming into the Middle East. And the night before, there was a brief message to cargo planes that came into one of the bases in the Gulf instructing them to spend as little time as possible on the ground, with a statement that no further information could be given at this time. My antennae were going up by Friday night. The only question was when, and it was clear that Iran wasn’t going to negotiate on any of the critical points. So to me it was all but a done deal.

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Walk us through the last 48 hours. What surprised you? What were the US and Israel trying to accomplish?

Vidur: It’s difficult to tell what the US objectives are. On one hand Trump said the Iranian people should rise up and seize their freedom. On the other hand there are reports that Trump wants to negotiate with members of the regime, and some Israeli reporting suggests the US even thought about trying to get a ceasefire over the weekend. There’s a lot of contradictory stuff out there.

If I had to guess, he’s willing to cut a deal with members of the regime. I’m a bit below 50% on whether the regime will fall by end of June or end of 2026. I’m trying to correct for recency bias. We saw something similar in Venezuela where they took Maduro out but put his vice president in.

Generally the US has been reasonably good at regime changes when it wants to be over the past century. Libya and Yugoslavia are maybe the best parallels, both air campaigns. With Milosevic he was toppled a bit over a year later. With Gaddafi it was maybe nine months. With Afghanistan and Iraq you had ground forces helping.

Belikewater: It’s clear that the US did not have any major pre-arrangement with a successor figure the way they had with Delcy Rodriguez in Venezuela, because I think we would already know about that by now. They’re clearly winging it more. Sending a message across the country that people should rise up and get rid of the government.

Ben: I was surprised by the reported videos of Trump hacking onto state television to foment a coup. That kind of implies there’s not a plan to negotiate directly and have an immediate successor.

Also, we’re not really used to the US fighting wars that are surprising. We’re used to these long-term managed conflicts in Iraq and Afghanistan. When the US assassinates the head of a major country on the first day of fighting while simultaneously saying they’re negotiating to find a replacement and also pushing for regime change with information warfare, that’s just an unusual thing. But in warfare you’d expect to see things you’re very surprised by, because both sides should be behaving optimally. They should be surprising outside observers. That’s strategic.

Misha: Being in Tel Aviv with all the defensive infrastructure Israel has built feels quite safe. There have been very few direct hits on Israel. I spent a couple of nights at a small bunker downstairs. Today was much quieter than the first day.

One thing I learned early in the first day is that Israel apparently has Iron Beam, a precision laser capable of disabling around 10 drones per minute at a fairly large distance. The current problem with drones and interceptors is that defense is much more costly than offense. A drone can cost tens of thousands to hundreds of thousands of dollars, but with the laser you just spend electricity.

I was also concerned about whether a US aircraft carrier would be hit. If Iran sent a huge swarm of drones at once, you maybe can’t defend against it. This war is already unfavorably viewed especially among Democrats. Losing a major asset would have been a disaster. But this now seems almost nil probability.

What happens to the regime now? Walk us through the scenarios.

Belikewater: I think it’s most likely that the IRGC will remain in power to some extent. But there is almost zero chance we end up with another Ayatollah and clerical control remaining. I don’t think the Islamic Republic is going to continue in any real sense. I could envision a scenario where the Ayatollahs are shuffled off into the back room and given some title, but they don’t retain any actual power.

My best bet for who will lead the country is Ali Larijani. He and his brothers are the only ones who can really command enough power across enough domains. He has connections within the political core of the country, the religious core leadership, and the military leadership. He’s one of the only people who has a chance of holding it all together.

Overall, I think it’s most likely that the IRGC remains in some form, maybe with a new name, and we see a shift to secular control. Still a very conservative Muslim country. But clerical authority over the government will be gone.

Ben: I’ll take the opposite side. I still think there’s a very decent chance we don’t see any large-scale shifts and the general structure of the government remains more or less intact, even if the central leadership has to make some serious concessions to stay in power. Maybe the true balance of power shifts back to the more parliamentary and republican pre-revolutionary parts of the government. But as far as the actual structural form of the government, I don’t think we’re likely to see major changes even if there is a more US-favorable leader installed.

Nuño: You can also imagine something at the other extreme. You have a regime that has been closing mosques and there could be widespread preference falsification throughout the country supported by killing lots of protesters. Now you kill the leaders, you deal them a very harsh blow in terms of falsifying their religious beliefs, and the country just shifts. There was a survey back in 2020 showing that 30% of people were irreligious, and only ~40% identified as muslim. If you get 30% atheists or agnostics even under the previous regime, what’s the actual figure now that the leadership has been annihilated?

Belikewater: I would caution against concluding that declining mosque attendance equates with declining religiosity. The mosques were also mouthpieces of the government and people may have simply got tired of the mingling between government and religion. In fact I think it’s quite possible we could see mosque attendance grow once those things are decoupled. But certainly not everyone is as conservative as the regime’s version of Islam.

Ben: I’d say the odds of a color revolution, a public uprising where the form of government changes pretty dramatically, are maybe 15%.

Nuño: That’s even a bit higher than I would go, but it’s what Trump is hoping for.

Misha: We did see big protests in Iran following the 12-day war. There is a lot of civil desire for change both economically and politically. And given how successful the US and Israel coalition have been in removing key people in positions of power, they may have removed the people most ruthless and most willing to shoot protesters. This might make the next iteration of protest or a peaceful transition more likely.

Belikewater: On civil war. I think it’s hard to see what a civil war could actually look like in practice. The country is so fractured. There’s no clear opposition group with any real power. You could have some regional groups, Azeris, Baluchis, Kurds, fighting for autonomy around the edges. Or you could have more conservative factions aligned with the old regime fighting newer ones. But it’s not like there are clear rival power centers with independent armies. The IRGC has entirely subsumed the regular military.

And a giant problem even under a new government is that the economy has been so hamstrung by an enormous level of corruption that if they don’t address that, they’re still going to have massive problems with critical infrastructure. As soon as they drop the pursuit of nuclear weapons and a ballistic missile program, sanctions can go and that provides a tremendous boost. But corruption remains the giant underlying problem.

Let’s move to some specific questions. Will the Iranian Regime fall this year?

Belikewater: That definition is actually not about the IRGC disappearing. It’s about whether the IRGC is still under clerical control. So I think the IRGC will remain but not under clerical control. Almost zero chance we end up with another Ayatollah. I’d put this market at a fairly high probability for “Yes” under that specific definition.

Nuño: You could have interesting edge cases where it changes its name. Where do you draw the line?

Ben: As far as the actual structural form of the government I don’t think we’re likely to see major changes. So I’d lean “No” on that market, or at least below 50%. The modal scenario is the institutions remain more or less intact.

Vidur: I’m a bit below 50% on regime falling by end of June or end of 2026. Trying to correct for recency bias.

Reza Pahlavi enters Iran

Nuño: That seems a bit high, but you never know.

Belikewater: I see Reza Pahlavi as a has-been wannabe. His family is mostly done. There is some support for the monarchy within Iran, but I think by and large that’s not where most Iranians want to go. He’s been auditioning for the role of Iran’s pseudo-democratic leader, giving lip service to wanting democracy. But I don’t see him having enough support within Iran. The only way I could see him entering is if Iran normalizes relations with the West enough that the powers in Iran can’t really stop him, or if there’s some sort of civil war and the US says, “We have to put someone in, let’s get Pahlavi.” I think that’s unlikely.

Ben: I would take the under on that. The more interesting scenario is Iran normalizes relations with the West enough that Pahlavi is able to go there and international pressure makes it so the powers in Iran can’t stop him. Multiple ways that market could resolve “Yes.” But I think it has been too high.

Will the US invade Iran? Trump and Hegseth have been refusing to rule this out.

Belikewater: Way too high.

Ben: I’d put it closer to 5 to 10%. Special ops forces are probably already there, but for something larger than that, almost no chance.

Vidur: Maybe 10%. I think Trump not ruling it out is him trying to be unpredictable. But it would be a huge blow to his self-image and image among his supporters to actually send ground troops. His advisers would also push back tremendously against it. Libya is brought up even in MAGA circles as a failed regime change the establishment went into, and they’re not going to repeat that.

Nuño: Perhaps not wildly mispriced, because it’s not worth bidding down if you have to lock capital until the end of the year, but probably too high as a probability.

How long do the strikes go on?

Belikewater: Three to five weeks probably. But it’s all probabilistic. Could it stop tomorrow? Yes. If someone decides they want to negotiate, it could stop tomorrow.

Ben: I have a pretty flat distribution curve over the next few weeks. Could be in a few days, could be in four weeks, could be in six weeks. I don’t think it’s going to be a campaign going on for four months.

Vidur: The polymarket looks pretty reasonable. 51% by end of March looks quite reasonable. You can look at Libya or Yugoslavia to get a rough guess, but those were at least a couple of months, whereas this is basically up to Trump and Netanyahu. Trump could get impatient. I agree it’s probably weeks rather than three months.

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Disclaimer: Nothing in The Oracle is financial, investment, legal or any other type of professional advice. All odds are time-sensitive and subject to change. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.

On Friday, Feb. 20, the Supreme Court ruled in a 6-3 decision to strike down Trump’s “Liberation Day” tariffs, provoking a furious response from the Commander-in-chief across every social media account he could get his hands on.

But, had Trump been watching Polymarket, he may have come to the same conclusion that traders reached over 3 months earlier: the tariffs were likely doomed in the high court.

Today, we revisit the November 5th Supreme Court oral arguments on the legality of the tariffs, a 4 hour period in which the odds for the court to uphold the tariffs was roughly cut in half: from 46.5% to 24%, a price the contract held with slight fluctuations until the decision was released on Friday.

Using a new open-source tool to synchronize Polymarket odds with video, it is possible to pinpoint the exact moments during the hearings that moved the market.

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In the weeks leading up to oral arguments, conventional wisdom held that, due to the difficulty of “unscrambling the egg” of tariffs once they had been rolled out, it was a coin flip as to whether the Supreme Court allowed the tariffs to stand.

Traders agreed, with the price of the polymarket trading between 40 cents and 50 cents from early September to early November.

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What moved the odds

On game day, here are the key moments that moved the odds (watch video)

Pregame (51% 📉 38%)

The morning of the hearing, odds fluctuated between 51% and 38%, eventually settling at the lower end of that bound as the hearing got underway.

A post that morning on ScotusBlog hinted that even Trump’s appointees were not sure to back him and floated the striking down of tariffs without refunds as a plausible scenario.

Sauer Opens Strong (38% 📈 41%)

The administration’s odds increased slightly following U.S. Solicitor General John Sauer’s opening arguments where he made the case for the executive branch’s broad authority in foreign affairs and ability to regulate foreign commerce conferred by Congress and regularly upheld by the judicial branch.

Gorsuch Strikes Back (37% 📉 27%)

Justice Gorsuch, who, along with Justice Roberts, was considered undecided going into the day, speaks for the first time, questioning Sauer for a 7 minute period that dropped the odds almost 10%. In his questioning, Gorsuch dismantled much of the solicitor general’s stance and forced him to walk back or qualify several of his key arguments.

Katyal’s Rebuttal ( 27% 📉 18%)

Neal Katyal, a lawyer for Companies against Tariffs, tackled tough questions from pro-tariff justices Alito and Kavanaugh, refuting Sauer and the administration’s case that Congressional precedent from 1977 justified their actions.

One key moment came when Katyal highlighted the government’s bragging that they had raised trillions through tariffs. This contradicted their claim that the tariffs were regulatory as opposed to revenue-raising.

War Powers Limits (25% 📉20%)

In the minutes following Katyal’s exchange with Alito the odds again rose to 25%, explained by Alito forcing Katyal to concede that the president has the power to impose things like quotas and embargos through hypothetical scenarios.

However, odds fell again when Justice Sotomayor and Katyal established that in previous emergency situations including wars overseen by Nixon and Bush, the usage of tariffs as a regulatory weapon required ratification from Congress.

Alito: Regulation, not Revenue (22% 📈 28%)

In dialogue with Oregon Solicitor General Benjamin Gutman, Justice Alito established that in times of emergency, which the administration considers this to be, broader powers to regulate foreign affairs should not be treated with increased suspicions of just being another source of revenue.

Point of No Return

In retrospect the turning point is clear:

The moment that Justice Neil Gorsuch, a first term Trump appointee, signaled fundamental skepticism of the administration’s legal theory in his first rounds of questioning, Polymarket traders saw the writing on the wall.

The price of the contract never again reached the level where Gorsuch began his questioning, and tumbled lower following Katyal’s rebuttal of Sauer and the administration’s case.

Watching Polymarket alongside the hearings provides a second-by-second aggregation of legal reasoning that provided a signal that was live and direct instead of having to be parsed from retrospectives from news sources.

The understanding that these tariffs were not likely to stand (which was also concluded in our interview of Peter Harrell directly after these oral arguments, where Peter also correctly predicted which way every justice would vote) could have provided valuable information to a multitude of small and large businesses operating in the US on a multi-trillion dollar question.

Introducing Polyvideo

This analysis was conducted using a tool we developed called Polyvideo which allows users to view minute-by-minute odds of a polymarket side-by-side with a YouTube video.

The default settings on the front menu allow you to conduct the same analysis we did; feel free to use this for any future projects or contribute suggestions / features to the project in the comments or on X at @droovg.

Tariff refunds?

Disclaimer

Nothing in The Oracle is financial, investment, legal or any other type of professional advice. All odds are time sensitive and subject to change. Anything provided in any newsletter is for informational purposes only and is not meant to be an endorsement of any type of activity or any particular market or product. Terms of Service on polymarket.com prohibit US persons and persons from certain other jurisdictions from using Polymarket to trade, although data and information is viewable globally.