Author：Currency Explorer

James van Geelen, founder of Citrini Research, recently gained notoriety for triggering a $200 billion market crash with a pessimistic report depicting the post-AI economy. Now, he has issued a new warning: "This is the worst possible outcome, and I'm going crazy!"

Geelen is currently struggling to figure out how the war launched by US President Trump against Iran will impact financial markets.He watched Trump's national televised address on April Fool's Day, which left him feeling incredibly heavy-hearted. Even the reports from the analysts he had sent to war zones to gather firsthand intelligence were chilling.

Prior to this speech, U.S. stocks had been rising, boosted by expectations of a ceasefire agreement and Trump's promise that U.S. involvement in the conflict was nearing its end. However...This rambling conversation during prime time hints at a brutal and unmanageable conflict.“We’re going to send them back to the Stone Age,” Trump said. That sounds like no quick or easy task (not to mention other factors). His references to North Korea, Vietnam, and Iraq only added to the tension.

Geelen said helplessly, "It feels like they're asking, 'Then why did our stock market rise so much before?'"

For the past month, Wall Street has been trying to deduce this question: How long will this war last? Behind this lies a series of concerns: How high will oil prices soar? Will expensive energy completely devour consumer spending? And will all of this push the economy into a recession?

Stephanie Link, chief investment strategist at Hightower Advisors, which manages $350 billion in assets, stated bluntly:The longer this war drags on, the worse the situation will become."Just like when Trump announced the 'Liberation Day' tariffs a year ago,"Aside from his repetitive rhetoric, targets, and timelines, investors had virtually no clues..

Strait of Hormuz live

The financial world is keeping a close eye on the Strait of Hormuz—the world's most vital oil shipping artery. As long as it remains effectively blocked by Iran, the global economy is in grave danger. As for when it will reopen, financial giants are just as clueless as ordinary viewers watching cable news on television. Mike Silverman, chief investment officer of Cresset, which manages over $237 billion in assets, frankly admitted, "On this matter, I don't have more information than retail investors."

Faced with this information vacuum, Citrini came up with a hardcore plan to gather real intelligence: why not just send an analyst to the eye of the storm?

Geelen, 33, a former emergency responder, rose to fame for his accurate short-selling of Silicon Valley banks before their collapse. He primarily distributes market advice to subscribers through Citrini's Substack. His research report, released on February 22nd, depicting a dystopian AI scenario (mass unemployment, few winners, and widespread losers), went viral (and was highly controversial). (As Geelen envisioned: "What if AI becomes so successful that it actually becomes a bearish factor?")

The next day, as soon as the market opened, investors began to sell off the stocks of companies that would have suffered in the Citrini hypothetical scenario.

In March of this year, Geelen sent a non-American analyst fluent in four languages to the northernmost part of the UAE. "Morgan Stanley wouldn't send an investment analyst to Fujairah," Geelen said.

The analyst sent by Citrini has been cultivating relationships with tanker captains, crew members, maritime brokers, local fishermen, smugglers, and corporate executives. "From what we understand..."The number of missile attacks was far greater than the outside world knew.“Geelen said. When analysts asked where the rockets landed, the answer was:"Wherever the Americans and their infrastructure are, that's where they'll strike."Even before Trump escalated the situation through his speech, locals had already noticed the increase in U.S. ground troops.

Geelen stated, "We've also seen U.S. troops stationed in the area, and people are telling us the actual number is far greater than reported. It seems everyone we spoke to was fully prepared for an escalation of the conflict." He added,Everyone is “preparing for a conflict that will last at least several months.”

As for the strait itselfCitrini analysts are counting the passing vessels and noting the national flags they fly. These ships are avoiding the main channel, instead navigating through a less conspicuous corridor in the strait, which Geelen calls "this narrow slit close to Qeshm Island and Iran." Most of them are vessels that have clearly paid "tolls" to Iran for privileged passage.

The availability of ships was far more positive than the "utter destruction" many investors had envisioned, which convinced Citrini.The strait was not actually mined.This is also a key, unresolved issue at present. ButIran clearly controls the entire shipping lane.This situation is likely to keep oil prices (and their important derivatives, such as fertilizers) high for a long period of time.

Geelen admitted, "I haven't seen the market factor in enough risk premium for this protracted and complex conflict. I was really hoping that when we sent people over there, we would find everything was fine, but so far, things haven't gone as planned."

A "high-pressure test" for the market

Looking at the current oil price hovering around $110, and considering the situation in the Gulf region, he couldn't help but wonder: Can the US economy withstand these high-pressure tests?“You might argue that an average oil price of $90 a barrel over the next six months isn’t enough to cripple the U.S. economy, right?” he said. “But what if it’s $120 a barrel? And what if wheat and fertilizer prices both skyrocket by 50%? Then things will get tough.”

Of course, these "difficult days" will also spread to the US stock market. Geelen stated, "If you're an analyst and modeling a scenario of a complete blockade of the Strait, you can easily conclude that..."The S&P 500 would need to fall another 20%, a drop four times its current decline..

Higher oil prices mean a resurgence of inflation, which could tie the Federal Reserve's ability to cut interest rates."This is kind of like the worst-case scenario," said James St. Aubin, chief investment officer at Santa Monica-based Ocean Park Asset Management. "We could easily slip into a bear market."

But a more conflicted voice is also circulating on Wall Street. Last year's tariff turmoil taught investors a vivid lesson: the market initially crashed, then quickly bottomed out and rebounded, even reaching record highs. This suggests that under Trump's administration, losing a small amount of money in the short term might be far more worthwhile than missing out on a retaliatory rebound.

“What could Starbucks or Netflix possibly have to do with the Strait of Hormuz?” Link countered.If this war can be resolved quickly, we can refocus on our strong economic fundamentals.She remained optimistic about Trump's initial four-to-six-week timeline: "I think a year from now, we'll be glad we bought these stocks on sale."

However, she also admitted that if the war drags on, then this view is "completely wrong."

However,Some investors, however, see a completely changed world.“It feels like we’ve unleashed a demon of chaos from a bottle,” lamented Andrew Beer, co-founder of Dynamic Beta Investments, which runs hedge fund-like investment products. “My basic assumption is that this is a problem we’ll be dealing with for a full decade.”

Daleep Singh, who previously served as Deputy National Security Advisor under former US President Joe Biden and now works at the asset management firm PGIM, has also witnessed a dramatic shift at the grassroots level. Singh stated, "This war can no longer be considered a black swan event. Military conflicts are no longer rare, and the weaponization of economic chokepoints is no longer unusual."

He predicted,A "face-saving ceasefire" is expected in the coming weeks, which could prompt the reopening of the Strait.However, he emphasized that the impact of this war was absolutely negative. "Our situation is clearly much worse now."