Odd Lots (Bloomberg)

Episode: This Is How Big Money Is Trading the War in Iran

Date: March 26, 2026
Hosts: Joe Weisenthal & Tracy Alloway
Guest: Ozan Tarman, Vice Chair of Global Macro, Deutsche Bank

Episode Overview

This timely episode, recorded the morning of March 25, 2026, dives deep into how global markets and major investors are navigating the rapidly changing landscape amid the ongoing war in Iran. Hosts Joe Weisenthal and Tracy Alloway are joined by macro strategist Ozan Tarman, who shares unique insights gathered from his global conversations with top financial players. The discussion covers market reactions to evolving headlines, the complexities facing oil and rates markets, the psychology and positioning of big money, and the knock-on effects for assets such as gold, private credit, and global equities. Listeners also get behind-the-scenes color on how traders interpret news—real and fake—in an environment dominated by uncertainty, meme warfare, and "bad volatility."

Key Discussion Points & Insights

1. Headline-Driven Markets and Uncertainty

• Timestamp: [02:23]–[05:51]
• Context: The market is reacting violently to news updates, especially with new headlines out of Iran rejecting ceasefire talks.
• Joe: "The reason I mention the time is not just because things are moving fast, but to establish we've had market-moving headlines already this morning." [02:36]
• Tracy: "It really is a headline-driven market... no one's entirely sure what the goals are when it comes to Iran." [03:16]
• Observation: There is deep skepticism about official headlines, but markets cannot afford to ignore them completely. This feeds into heightened volatility and uncertainty.

2. Market Positioning and the “Pain Trade”

• Timestamp: [05:51]–[09:12]
• Ozan: Shares that right before the conflict, focus was on AI and expectations of rate cuts alongside bullish sentiment in gold and bonds. The attack on Iran turned everything upside down.
• Insight: “Traders always smell things, always have a sense of where the pain trade is, where the momentum is.” [07:09]
• Joe: Notes that despite war escalation, commodities like Brent crude haven't surged as many predicted, indicating complicated positioning.

3. Liquidations, Winner Trades, and Gold

• Timestamp: [10:27]–[13:45]
• Joe: "The last time we had you on was September ... gold was around 3,800 an ounce ... it got over $5,500 ... as of yesterday we saw a 10-day gold selloff." [10:59]
• Ozan: Explains how traders have had to sell their best-performing assets—including gold—as other trades failed, leading to forced liquidations: “Once you realize ... this is going to continue on and on ... people start selling their winners to build defense mechanisms.” [11:52]
• Memorable Quote: "If you have survived, these are the moments to make the difference. Who knows Joe? Maybe this is right around the dip and we will remember it like the time we were able to look through it." [14:49]

4. Pain Trade Defined & US Exceptionalism

• Timestamp: [18:15]–[22:21]
• Ozan: Elaborates the “pain trade” as when the dominant consensus trade moves sharply against crowded positioning. Gives examples with gold and the USD: "After a while it can become as important as a fundamental factor." [18:19]
• Tracy: Brings up crosscurrents—on one side, people are seeking USD; on the other, there's talk of diversification and questioning US exceptionalism.
• Ozan: Notes increased hedging rather than outright US asset selling. Energy price shocks continue to weigh on Europe, making it a key region at risk.

5. Oil Market Disconnect: Hype vs. Reality

• Timestamp: [22:21]–[28:09]
• Joe: Points out oil analysts are alarmed, but prices remain subdued. "There does seem to be this gap between the hair on fire rhetoric of the oil knowers versus the prices..."
• Ozan: Warns that while futures haven't exploded, physical market constraints could still bite—especially if the Strait of Hormuz remains closed: "If it's not starting to open in one month...the world has a huge, huge, huge problem." [24:02]
• Link to Rates: Higher potential inflation is leading to delayed or reversed rate cut expectations in the ECB and Bank of England.

6. The Role of AI, Memes, & Social Media in Trading

• Timestamp: [28:09]–[29:59]
• Tracy: This is the first major market-moving conflict involving both sides using AI-generated memes. Asks how much weight traders give to such content.
• Ozan: Traders mostly ignore the memes themselves, but rapidly assess which sources and signals—across multiple languages—are credible. The info environment is more complex and “spicy.”

7. Impact on Global Business Hubs (Dubai, Gulf)

• Timestamp: [29:59]–[32:28]
• Discussion: Large asset flows to the Gulf (especially Dubai and Qatar) are threatened by the conflict—a sentiment and business climate shift, not just a financial one.
• Ozan: In short term, money flows and travel patterns are affected. But longer term, the Gulf financial centers will remain strong.

8. Private Credit: Underreported Risks

• Timestamp: [36:03]–[39:34]
• Tracy: Expresses concern about Private Credit redemptions being brushed off as “not systemic” despite signs of stress.
• Ozan: Agrees this is being overlooked due to the Iran situation: “If people cannot take their money away from private credit and have to sell something liquid, then watch out for public credit... and public equity.” [37:32]
• Big Point: Risk could spread to public markets—watch for financial conditions to tighten if private credit stress continues.

9. Re-accelerating Inflation & Structural Concerns

• Timestamp: [39:34]–[42:07]
• Joe: Inflation may have been picking up even before war headlines.
• Ozan: Agrees, tying in the possibility of “rationing”—especially impacting Asia and Europe—if energy supply disruptions worsen. Flags risk of stagflation.

10. Final Market Commentary

• Timestamp: [43:01]–[46:49]
• Tracy: Notes quick spillover to consumers—rising fuel surcharges, especially in Asia and Australia.
• Joe: Emphasizes taking market prices seriously: “There is a lot of money on the line for people who are paid to take this very seriously. And if oil is trading below 100, I take that seriously and want to understand why.” [44:03]
• Both: Discuss the disconnect between financial and physical oil markets, and the anxiety about being caught out by a sudden peace announcement or regime change.

Notable Quotes & Memorable Moments

• Ozan Tarman:

  • “Traders always smell things, always have a sense of where the pain trade is, where the momentum is.” [07:09]
  • “Once you realize ... this is going to continue on and on ... people start selling their winners to build defense mechanisms.” [11:52]
  • “After a while, people say the best thing is a blank piece of paper, less trading, less watch. That’s why your opening question—some people see this market as untradable, but unfortunately in times like this ... flat is the new up. If you have survived, these are the moments to make the difference.” [14:49]
  • "Pain trade is when that herd gets a belief in a trade so much and when it works just the other way around." [18:19]
  • "If it's not starting to open in one month, now, three weeks, the world has a huge, huge, huge problem." [24:02]
  • "If people cannot take their money away from private credit and have to sell something liquid, then watch out for public credit...and public equity." [37:32]
  • "I'm not in love with the word stagflation, but ... yeah, we woke up that stagflation fear." [42:01]

• Tracy Alloway:

  • "[This] is the first like major conflict related market event where we have both sides to some extent using AI generated memes and content to ... express their point of view..." [28:09]
  • “I am starting to get frustrated with this knee jerk response ... Aries, Apollo curbing withdrawals ... and then everyone in private credit is like, well, this is fine. This is a feature of the system, it’s not a bug.” [36:03]

• Joe Weisenthal:

  • “I actually really don’t ... like, there will be a headline from the White House and oil will go down ... and I’m like, I don’t know about that. But ... there is a lot of money on the line for people who are paid to take this very seriously. And if oil is trading below 100, I take that seriously and I want to understand why...” [44:03]
  • “This is a fact. And I do think that’s a very interesting point that the people with a lot at stake, yeah, oil is high, but it’s certainly not at the hair on fire levels that either that we even saw in 2022.” [44:52]

Key Timestamps

• 02:23–05:51: Market reactions to live Iranian headlines, cliche but real “headline-driven markets.”
• 07:09: Ozan on market pain trades, crowding, and client psychology.
• 10:27–13:45: Liquidation of “winner” trades, gold’s reversal, and positioning chaos.
• 18:19: Ozan defines the “pain trade.”
• 22:21–28:09: In-depth on oil, Europe’s vulnerabilities, and physical vs paper pricing.
• 28:09–29:59: Memes, social media, and info warfare on the trading floor.
• 36:03–39:34: Private credit stress, withdrawal restrictions, systemic risk potential.
• 42:07: Ozan warns about stagflation emerging from structural oil/gas shocks.
• 44:03–46:49: Joe and Tracy dissect why markets may be “wrong” (or not), importance of respecting market pricing, and ongoing uncertainty.

Tone & Language

The episode is lively, fast-moving, with insightful banter and an urgent, skeptical tone appropriate for market volatility and geopolitical uncertainty. Ozan brings both humor and caution, Joe and Tracy blend sharp macro observation with real-world touches and skepticism of market consensus. The mood: professionals trying to make sense of chaos, balancing experience, instinct, and data—with no illusions about easy answers.

Summary

This Odd Lots episode offers an exceptional exploration of how the world’s biggest money is navigating the Iran war, and the complex interplay between headline risk, market psychology, technical positioning, and fundamental uncertainty. Listeners come away with a realistic sense of how professionals are positioned, why markets are behaving as they are (and why that’s so hard to judge), and the acute pressures on everything from private credit to European equities. In a world where futures prices belie underlying stress, understanding the “pain trade,” bad volatility, and the evolving structure of global capital flows has never been more critical.

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