Art Cashin Explains What Is Really Happening In Iran

Tyler Durden's picture

Despite the barrage of geopolitical headlines involving Iran, and as of today, the US and Israel, especially as pertains to wargame exercises in the Straits of Hormuz, a different, and potentially much more important story is to be found in the country's capital markets, and specifically its currency, which has continued to tumble ever since Obama signed the Iran financial boycott on New Year's Day as reported here. And, as we predicted, it is the aftershocks of the boycott which may have the most adverse impact on geopolitics. Because if the Iran regime finds itself in a lose-lose situation with its economy imploding and its currency crashing, the opportunity cost of doing something very irrational, from a military standpoint or otherwise, gets lower and lower. Then again, something tells us the US administration has been well aware of this sequence of events all along. Here is Art Cashing explaining it all.

From UBS Financial Services

Show Me The Money - Iran continues to make headlines (and roil the crude market) with its threats to blockade the Strait of Hormuz. Observers feel the threat is primarily a reaction to the trade sanctions which are beginning to pinch, and pinch tightly. While the people are not exactly in the streets yet, the business community appears to be in an all out scramble. That shows up in the recent frantic trading in the currency black market. Here’s a bit of what the sharp-eyed Bob Hardy wrote on the topic on his nifty GeoStrat blog:

Despite all of the tough talk and threats coming out of Teheran as it wrapped up its ten day naval maneuvers, one only has to look at the dramatic fall in the black market value of the Iranian Rial versus the U.S. Dollar, to know that the country is under a tremendous amount of pressure. The leaders of this military dictatorship cloaked in a theocracy, may threaten to close the Strait of Hormuz if its oil is sanctioned or if it is attacked militarily. They may test fire new missiles and warn the U.S. to keep its aircraft carriers out of the Persian Gulf, but the people understand the risks, and they are voting with their money.


The locals are dumping their Rials for Dollars at such as dizzying rate that the banks are no longer cashing letters of credit at the official rate, which leaves businessmen in the lurch and continues to weaken support for the regime. Multiple media sites are reporting that moneychangers are no longer even advertising rates on their white boards, as they cannot keep up with the fall in the Rial's value.


The currency has fallen out of bed ever since President Obama signed a defense bill on Saturday, December 31st, which included a provision to sanction companies that used the Iranian Central Bank to buy that country's oil. By Monday, January 2nd, the Rial was widely reported to be trading down 12% in the black market from Saturday's rate, and Mehr news service reported that housing prices had tumbled 20% during the last few weeks. As a point in fact, we understand that many hard assets that are not absolutely necessary, are being sold so that people can invest in the U.S. Dollar and other foreign currencies.


This drop was on top of the 10% hit the currency took after Teheran announced that it was cancelling all trading with the UAE several weeks ago, but it soon rescinded that decision. The Rial was trading at 17,800 Rials to the Dollar on Tuesday, January 3rd, which represents a fall of about 17% from the street rate on Saturday before the sanctions announcement. Compare that rate with the official rate displayed on the Central Bank's website of 11,100 Rials to the Dollar, and one can see why the Central Bank has been holding daily emergency meetings. On Wednesday the decline continued in spite absurd comments from the Iranian government that the decline in the Currency had nothing to do with the new U.S. sanctions, because they have not yet taken effect.

This is just beginning. Stay tuned.

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SMG's picture

It's all just a big show, designed to kill off as many of us "useless eaters" as possible.  I wish I didn't have kids I'd find it alot easier not to care.

5880's picture

you're Mr. Sunshine....

TruthInSunshine's picture

Iran has been successfully Bernank-mailed thus far.

Next up; send in the jackals (circa 1978 redux).


*p.s. - No I do not like Iran's theocratical regime which oppresses the RIGHTS of its citizens any more than I like any other such regime, theocratical or otherwise, but we can't afford this geopolitical interventionism any more (especially when the agenda we're pursuing doesn't necessarily benefit Americans), and by the way, the passage of 2012 NDAA paints a giant red welt on the U.S.'s back as leading candidate for The 2012 Hypocrite of the World trophy (to be MC'd by J. Edgar Hoover's ghost).

**p.s.2 - Whoever mentioned sending in Congress as the first boots on the ground, instead of some recon unit or Marine Expeditionary Force, has the right idea. Pack up those fat, pasty white pieces of shit and airdrop them, HALO style, from 35,000 feet. They Can Be Self-Acclaimed Heros (or die trying) Just For One Day.

***p.s.3 - Apparently, the geniuses in the upper echelons of SOME governments fail to realize oil is fungible, or more ominously, do not care that it is so. Hilarity will ensue (of the most painful variety) at some point.

Teamtc321's picture

"They Can BeSelf-Acclaimed Heros (or die trying) Just For One Day."


Give them more than one day, let the chapped ass set in for a few day's running around in the hill's. 

TruthInSunshine's picture

I see another broadway production in the works:


Fat Ass Congresscritters HALO Diving Over Tehran


But who can I get to write the screenplay? Mel Brooks won't return my phone calls, and Woody Allen replied he's too busy playing in his jazz band.

wanklord's picture

Wondering why ZH uses as a reference someone who doesn't have a single clue about defense and geopolitics (this guy cannot even be cataloged a bullshitter, Mr. Hardy is just a moron) soon as the first bullet is fired in the Persian Gulf, you can certainly say good-bye to all of your investments.

Robert Hardy - Biography and Resume
Robert Hardy is the principal writer of our publications and alerts. He has 25 years experience
in Global equity, currency, futures trading and market making.
Hardy was a New York Stock Exchange Specialist from 1995-2010 where he was in charge of
trading over 130 non-U.S. issues in New York and in 26 foreign local markets. He was
Managing Director for International Trading at LaBranche and Co. from 2006-2010, and from
1999 - 2006 he was director of International Trading at Fleet Bank later purchased by Bank
America. He ran his own arbitrage company trading international oil companies in New York
and in their local markets from 1990-1995. He began his specialist career as a partner at MJ
Meehan in 1995 later purchased by Fleet. He began his career as a currency trader in Hong
Kong in the early 1980s then as trader in New York and Chicago futures in the late 1980s. He
became a member of the NYSE in 1990. In these positions Hardy made numerous valuable
contacts with foreign corporate leaders and Foreign government ocials.
Robert's international experience is extensive. He consulted with foreign governments on the
privatization of state owned companies. For example, he consulted with the French govern-
ment on the privatization and the three level pricing scheme for the launch of France Telecom
as a private company. He also consulted with the Brazilian government concerning the
breakup and privatization of state owned Telebras into 10 companies simultaneously
launched in the U.S. and Brazil.
He has participated in numerous Global conferences and participated in planning cross-
border trading with the French, German and London Stock exchanges prior to the formation
of the European Monetary Union. In China he represented the NYSE in one of the rst prin-
ciple forums about U.S. capital markets and Chinese stocks listing and trading at the NYSE. He
participated with the NYSE in similar forums in Brazil and Mexico. In India he was the principal
speaker at a a nationwide address on the nature of western capital markets sponsored by
DSP / Merrill Lynch.
Robert's macro knowledge and razor-sharp insights help to overcome information overload
in this rapidly moving event-intensive time. The Geostrat's associates are located world-wide
to provide up-to-the-second intel, frequently in advance of public news sources.The Geostrat Worldview.
Intelligence that impacts business
Robert Hardy - Biography and Resume
2006 - 2010 : Senior Managing Director at LaBranche &Co LLC for International Equity Market 
  Making.  Responsible for trading over 300 stocks in their local markets and the  
  ADRs on the NYSE.
1999 - 2006: Director of International Trading at Fleet Specialist. Later Bank of America.
1995 - 1999: Partner at MJ Meehan.  Established rst international stock trading unit NYSE
1990 - 1995: Member NYSE.  Operated a proprietary arbitrage trading operation in the  
  international oil sector for large international clients.
1987 –1990: Partner in HNX Futures and Member New York Futures Exchange.  HNX traded  
  currency and commodity futures for clients worldwide.
1984 - 1987: Currency Trader based in Hong Kong for high net worth investors
1976 - 1984:  Vice President Bonny Investment Company.  Responsible for oil, gas and equity  
  trading worldwide.
A sample of Consultancy projects
• French government on the privatization and level 3 pricing scheme for France Telecom.
• Brazilian government on breakup and privatization of state owned Telebras.
• Represented NYSE at conferences in India, Mexico and Brazil.
• Represented NYSE in one of the ?rst forums about U.S. capital markets/ Chinese stock  
 listing on NYSE.
• Consulted with EU on cross border trading of equities between EU and various trading  
• Indian – principle speaker on development of Indian capital markets at conference lead by DSP/Merrill Lynch.


Wait a minute...Robert Hardy is just another Baby-Boomer!! therefore, the following statement is valid:

Blame the Baby-Boomers for all the ongoing disgraces of this country, that's why they are considered America's failed generation. These good-for-nothing invested their deprived intellect in experimenting with all types of drugs and having very promiscuous (and many times deviant/unnatural) sexual lives.

In fact, the following video taken at Woodstock in 1969 clearly depicts what Baby-Boomers were all about:

Consequently, their offspring are the best evidence that defect genes have been transmitted from one generation to the next; worst of all, the chances that their descendants' DNA carrying a more complex sequence of these defective genes are 100% guarantee -these new generation of Americans can fairly be described as subhumans.

BigJim's picture

We musn't listen to Robert Hardy because he's a....  baby boomer?

You really are fantastically stupid. Well done.

Jack Burton's picture

Christ would I love to have sent your ass out on point into some bullshit jungle ridden with VC just dreaming of wasting your ass.

Talk about a wanker. If you have nothing to say, then say it in as few words as possible. Only a fool would use hundreds of words to prove they are are a fool of the highest order. Clueless prick!!

boiltherich's picture

One does not READ the posts of the Wankster, one gives it a red arrow and moves on to REAL posters.  At least till TD gets around to clearing the deadwood trolls from the posting list.

The Big Ching-aso's picture



I don't know, man.   If Iran were a chess piece they're either a pawn, or a queen which is disguised as a pawn.    

Hope to hell we're damn sure what we're really messin' with here.   I got this bad gut feeling about fucking around with Iran.

Jack Burton's picture

Ihear you, their defiance makes me think they have more ways to defend themselves than we may think.

Jack Burton's picture

Indeed! I will follow that sage advice and let the wanker wank off to any empty auditorium. Hardly worth the electon charges it takes to put his thoughts on a computer screen.

Hugh G Rection's picture

He's Mr. Realism.  That's the very reason I chose not to marry and have kids.

"You want to be makin moves on the street, have no attachments, allow nothing to be in your life that you cannot walk out on in 30 seconds flat if you spot the heat around the corner."

TruthInSunshine's picture

Totally gratuitous, but one of the best shoot 'em up scenes in Hollywood History (love that Fabrique Nationale FNC 80 [5.56x45mm] Pacino is hauling, too, even if it's not .308):

Heat Shootout Scene [High Quality]


They should've gone for the gold under WTC (given the year the film was made), instead of GreenspanBux, but they would've needed larger vehicles, more firepower and a bigger crew.

Hugh G Rection's picture

My favorite movie all time behind Godfather.  Pacino's FAL is nice, but I'm partial to Kilmer's HK 91 in the drive in movie scene.

I'm sure you've seen it, but I highly recommend watching Ronin. it's 3rd on my list.


I like your WTC gold movie idea.  Maybe they figured stealing gold under the cover of a "terrorist attack" was too close to the plot of Die Hard 3... so they decided to just go ahead with the script in real life?

TruthInSunshine's picture

Ronin is a classic.

What color is the boathouse at Hereford, anyways?

It takes some balls for a producer or director to let Sean Bean get ambushed by a cup of coffee.

Hugh G Rection's picture

They taught me it was a brick/wood building with blue trim.

"Who taught you?"

"I don't remember, that's the second thing they taught me.."

TruthInSunshine's picture

Did they ever give you a grasshopper?

Hugh G Rection's picture


Nah, they weren't trying to break me.

The Heart's picture

" Pacino's FAL is nice, but I'm partial to Kilmer's HK 91 in the drive in movie scene."

That 20 round .308 is just that accurate and powerful too!

We call them tree cutters out here in the jungle.

roadhazard's picture

I wish Val Kilmer hadn't gotten fat and happy. That's what happens when you hang around Brando.

Hugh G Rection's picture

Ya it's a shame. Doc Holidays no daisy at all any more, maybe too many huckleberry pies?

TruthInSunshine's picture

They actually did some serious training (by Hollywood standards, at least) to attempt to depict what a realistic fully automatic lead grudge match would look like in an extreme urban environment, skyscrapers and all:

Heat Shootout Behind the Scenes Feature
Hugh G Rection's picture

Ya. It always shows when the director/producer care about realism.  I can't stand watching movies where a 12 gauge blows someone through a window, magazines produce unlimited fire, and a weapon makes a cocking sound everytime it is pointed.

Collateral is another movie that focused on realism.  You can tell someone worked with Tom Cruise a great deal on CQB tactics etc.


"Yo homie! Is that my briefcase?"

TBT or not TBT's picture

Full auto .308(nearly identical to 7.62 NATO) rifle fire would be uncontrollable. I think some HK's can do a three round burst or some such but you couldn't control more that.

Hugh G Rection's picture

That's why I said HK 91 (which is semi) and not HK G3 (which is the full auto version)

LongBalls's picture

FN SCAR 17S for the modern "tree cutter" lumberjack. butta'.

GeezerGeek's picture

"They should've gone for the gold"..."but they would've needed larger vehicles, more firepower and a bigger crew". You just described one of my favorite movies, "Kelly's Heroes". Nothing like a WW II spaghetti western farce. If I had enough money I'd buy a Sherman tank to guard my gold, assuming I had enough money to buy gold.

The Heart's picture

"If I had enough money I'd buy a Sherman tank to guard my gold, assuming I had enough money to buy gold."

Will that be with, or without the 8-track stereo and custom speaker system?

"Rolling W" bitchez!

Joseph Jones's picture

Please, I beg you, if possible, don't watch this on anything smaller than a 92" screen, in 1080P resolution, with a high end (I mean real high end, which can be mid-priced) audio system.  Just watched it a couple weeks ago on a system as described.  Otherwise, you've never really seen this movie, at least as it was intended. 

One of the biggest reasons for the qualilty is that the director smartly left out all the gratuitous, stupid, banal, loud, useless "musical" effects. 

The more intelligent and more tasteful the director/producer, the more likely are they to realize that the musical effects are generally so overdone, that they are cliches.  The smart ones add music now only when it really adds to the moment, using it as a spice, like it should be used.  

Do you really need more emotional effects when a half dozen guys are blowing up a downtown LA bank, in the middle of a business day, in crystal clear weather, with fully automatic high-caliber rifles?  I don't think so!  

sabra1's picture

do you think oBLAHma's kids, and his cohorts kids, will be able to walk the streets safely? NOT!!! Chrystal Mountain will be their new home 'till the day they die!!!

General Decline's picture

Teach your kids to fire a weapon, grow a garden, fix things mechanical, etc...... That's my plan, anyway. 

my puppy for prez's picture

We are doing just that!  My 14 yr and 21 yr old (boy and girl) know how to dress a deer, a hog, a groundhog, a squirrel, and start a fire without aids.  My oldest only knows how to dress preppy business wear!  I've got work to do on him.

Yamaha's picture

We are learning marksmanship and how to hide the bodies.......

GeezerGeek's picture

Careful with that "grow a garden" idea. Another ZH essay ("American women leading us out of this Great Recession") today contained this:

Oak Park, Michigan's city planner's office is threatening Julie Bass with jail time for planting a vegetable garden on her property.

Self-preservation is not to be permitted, apparently.

Keep too much cash, you're a terrorist.

Keep too much food, you're a terrorist.

Keep too much gold, or silver, or guns & ammo, you're a terrorist.

Try growing your own're a criminal.

Time to try growing a pair, I think.

TruthInSunshine's picture

If You See A Cucumber Or Tomato Growing On Your Neighbor's Lawn, Say Something.

eureka's picture

SMG - I believe it is more than "just a show" -

"The currency (Iran's) fallen out of bed ever since President Obama signed a defense bill on Saturday, December 31st, which included a provision to sanction companies that used the Iranian Central Bank to buy that country's oil. By Monday, January 2nd, the Rial ... down 12% in the black market from Saturday's rate... housing prices had tumbled 20% during the last few weeks... many hard assets that are not absolutely necessary, are being sold so that people can invest in the U.S. Dollar..."

 Does that mean Obama is a genious, winning on behalf of US Empire/USD/US FED RES/Wall Street?


Dangertime's picture

Exactly!  You beat me to it.

BidnessMan's picture

2nd that.  Very concerned for my 22 and 19 year old sons getting swept up as cannon fodder .....

my puppy for prez's picture

Me, too.  My 22 yr old doesn't (want to) get it, as he is too busy climbing successfully up the Wall Street ladder;  my 21 yr old daughter gets it and should be just fine living off the grid in the mountains;  my 14 old son gets it and is totally into "prepping"...he just ordered gas masks for us!  

I am insisting my oldst read "A Century of War" by Bill Engdahl....that should help him understand the banker/oil/military trifecta!

Hugh G Rection's picture


Have you tried talking to them?  Sit down and watch Legends of the Fall with both of them, explain the realities of war, and who got us into this mess.  Worry about family, fuck everything else.

Iwanttoknow's picture

No sarcasm.You hit the nail.Worry about family,fuck everything else.

Things that go bump's picture

I don't think the girls are going to get a pass this time. 

GeezerGeek's picture

Since we do not have an active draft at the moment, they may be safe. Or at least as safe as anyone else, meaning not very. Since they had a draft when I was 22, I remember how effective it was to have Mommy and Daddy (not mine - generic parents intended) pressuring the congresscritters to get us out of southeast Asia. That's why I have always been for the draft, as opposed to a completely volunteer/professional army: another checks and balances thing.

The Heart's picture

Draft->ages 18-48->male and female.

Ghordius's picture

+1'000'000'000'000 (0ne Trillion)

"That's why I have always been for the draft, as opposed to a completely volunteer/professional army: another checks and balances thing."

StychoKiller's picture

Near the end of the Roman Empire, potential conscripts were chopping off their thumbs so they couldn't hold a gladius (or so I've read).

persu's picture

I definetely and sincerely agree with you. As a father of 3 and 8 year old kids, I am following the world sliding into abyss in terror. Personally, I need only plenty of vodka while watching the show.

Dr. Engali's picture

I'm in the same boat. I am at peace with myself and whatever happens happens. But I have three kids 12 , 9 and 4 all of them priceless,and I just don't know what to do for them other than pray and prepare for the worst.

my puppy for prez's picture

Pray simultaneously while teaching them to survive off grid....and have a PLAN!