One Path for How This War Ends (And What Markets Are Missing)

Iran rejects a ceasefire… how does this war resolve?… Luke Lango’s roadmap and timeline… a flurry of red flag headlines from private credit… it’s time to be careful

The market is trying to price the end of a war, while the people involved can’t even agree on whether a deal is actually taking shape.

If that sounds confusing, it is.

Let’s back up…

If you’re feeling whiplash trying to follow the Middle East right now, you’re not alone.

On the one hand, as of this morning, markets are acting as if a resolution is right around the corner. On the other hand, the headlines are contradictory at best.

Here’s the reality as we understand it today, reflecting the progression over the last several days:

President Trump says the U.S. and Iran are engaged in “very, very strong talks.”
He’s delayed planned strikes and signaled that diplomacy is underway.
Multiple countries – Pakistan, Turkey, Egypt, Saudi Arabia – are reportedly working behind the scenes to broker peace.
The U.S. has reportedly sent a multi-point proposal to end the war.

But…

Iran publicly denies that any negotiations are happening
Even basic facts – like who initiated contact – remain disputed
And as of this morning, Iran said it will not accept a ceasefire and remains far from any agreement

So, what do we do with this?

First, we stop expecting a clean negotiation.

Instead, we recognize this for what it is: a messy, early-stage process where proposals are being floated, rejected, and reshaped in real time – often through intermediaries, and often with public messaging that doesn’t match what’s happening behind the scenes.

It’s classic geopolitical theater, where both sides are testing terms, rejecting them publicly, and continuing to engage privately – all at the same time.

But here’s the key for you and me…

Markets don’t trade on official statements. They trade on perceived progress or failure.

Right now, that perception keeps shifting – swinging between progress toward de-escalation and renewed fear.

As I write on Wednesday morning, markets are cheering perceived “progress” (Trump’s ceasefire proposal) while ignoring “failure” (Iran’s rejection of that plan).

Let’s accept that this could change by tomorrow…or even later this afternoon – and then look beyond the immediate price swings.

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The path forward

To understand where this goes next, let’s turn to hypergrowth expert Luke Lango.

In his recent Innovation Investor Daily Notes, he stressed that the key to ending the war is for both sides to have a plausible case for declaring some sort of victory:

Trump needs to be able to say: we destroyed Iran’s nuclear program… and we came home having made America and the world safer.

Iran needs… to say: the Islamic Republic endured the greatest military assault in its history… and then exercised its sovereign decision to end the conflict on terms that preserved… dignity and existence.

In other words, this doesn’t end with “winning” or “losing.” It ends with a deal both sides can spin as a win.

Here’s Luke outlining what that deal likely looks like:

A mutual cessation of hostilities… Iranian suspension of the Hormuz closure… IAEA-verified acknowledgment that Iran’s weapons-grade enrichment capability has been dismantled… partial release of frozen Iranian assets…

Now, while this could be the case, in recent days, the market hasn’t fully believed it – even as the headlines increasingly suggest something may be happening beneath the surface.

One moment, oil is spiking, and stocks are falling on fears of escalation. The next, that move reverses just as quickly on hints of diplomacy.

But looking at volatile asset prices isn’t the best gauge of diplomatic progress. It’s the tail wagging the dog.

For example, yesterday, The Washington Post reported that Egypt, Pakistan, and Turkey have been serving as intermediaries between U.S. envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi. Meanwhile, The Wall Street Journal reported that Arab officials helped open channels with Iranian power centers and pitched a five-day halt in hostilities to build momentum toward a ceasefire.

It wouldn’t be surprising if this conflict were moving along two tracks at once: a very public track of threats, denials, and propaganda…and a quieter track of indirect diplomacy through regional intermediaries.

The headlines from the last 24 hours only reinforce that possibility.

So, looking beyond the market’s manic price swings, Luke believes the real story is that a plausible endgame is taking shape: one where both sides can claim some version of victory, step back from the brink, and eventually give markets the clarity they’re still missing today.

What this means for investors

The day-to-day market action may stay ugly over the coming days.

For example, the U.S. has called up 3,000 Army paratroopers for potential deployment to the Middle East. Any escalation toward “boots on the ground” could quickly shift sentiment from relief back to fear.

Oil would likely spike again… stocks would sell off again… and yields would keep climbing as traders worry about a lasting energy shock.

But if Luke is right that this ultimately ends with a face-saving off-ramp for both sides, then this volatility is just part of the process – not evidence that no resolution is coming.

That’s why we separate short-term volatility from the likely medium-term path.

And importantly, Luke doesn’t just describe how this ends – he puts a timeline on it:

Our best estimate: a formal ceasefire framework within 10-14 days.

Hormuz… reopening within 21 days. Oil back toward $75 within 30 days…

We’ll keep tracking this.

Now, while investors are focused on a very visible risk overseas, there’s a quieter risk building much closer to home…

The cracks are spreading

I’m sorry, you won’t be able to get your money back right now.

Imagine hearing that as you try to withdraw money from one of your investment funds.

You were looking for steady income. Months ago, you were told about a fund offering a relatively safe way to earn 9%, 10%, even 11%.

But today, even after your request, the fund won’t give you all of your cash back.

Meanwhile, the value of the underlying loans in your fund could be slipping – and you’re stuck watching from the sidelines.

This is the uncomfortable reality facing some private credit investors right now.

Yesterday, news broke that Apollo (APO) – one of the biggest names in the space – has limited redemptions after a surge in withdrawal requests. In plain English: investors are asking for their money back…and aren’t getting all of it.

Here’s CNBC:

Apollo…told investors in its flagship private credit fund that it will limit withdrawals this quarter to just under half of requests, the latest sign of stress in the asset class.

That wasn’t the only headline...

Also yesterday, The Wall Street Journal ran a piece titled “Big Banks Are Playing Both Sides of the Private-Credit Meltdown,” noting:

Private-credit managers are facing a continuing reckoning as individual investors stampede out of private-credit funds, worried about a downturn in software, a number of high-profile defaults and restrictions on accessing their money.

And it doesn’t stop there.

Also yesterday, Moody’s Ratings downgraded a major KKR-linked credit fund to junk status.

From Bloomberg:

The fund’s non-accrual rate, which measures soured loans, rose to 5.5% of total investments…one of the highest percentages among peers.

Three separate stories. Same message…

Something is starting to strain beneath the surface in private credit

Let me clarify up front – we’re staring at an imminent credit crisis. But what we’re seeing today marks a clear shift.

For years, private credit has been one of Wall Street’s hottest trades – a fast-growing, high-yield alternative to traditional lending. Money flooded in. Returns looked steady. Risks stayed largely out of sight.

But as we’ve been flagging in the Digest for over two years at this point, that stability came with trade-offs:

Less transparency
Less liquidity
And in many cases, more leverage than meets the eye – and might be safe when market conditions change

Those trade-offs don’t matter much – until they do. And right now, they’re starting to matter.

If you’re a longtime Digest reader, none of this feels entirely new

We’ve highlighted the explosive growth in private credit… the layering of leverage… and the increasing ties between this “shadow” lending system and the broader financial world.

We’ve also shared repeated warnings from legendary investor Louis Navellier, editor of Growth Investor. For years, Louis has warned that if something were going to crack in this cycle, it would likely start here.

For example, here he is from updates last July and October:

If the private credit industry ever blew up because of economic weakness or whatever, or them just trying to out-leverage each other to outdo each other, the Fed would have to start slashing rates to save the economy…

Leveraged debt created the 2008 financial crisis, so we want to keep a good eye on this…

If private credit breaks, commerce breaks.

What’s new today is the frequency of the red flag stories coming out of private credit, as well as their tone.

It’s no longer about potential risk – it’s about early signs of real stress with real-world consequences.

Now, this doesn’t automatically translate into a broader economic problem. As we’ve noted before, the system today is structured very differently from 2008.

But it does suggest that one of the fastest-growing corners of modern finance may be entering a more fragile phase – one that increasingly overlaps with traditional banks, corporate lending, and even the financing behind today’s AI buildout.

And that’s exactly where Louis has been digging in.

He’s been tracking this risk for years. But recently, his focus has sharpened – not just on where the pressure is building, but on how it could ripple outward, creating clear winners and losers as conditions tighten.

We’ll be bringing you more of what he’s seeing – and how he’s thinking about positioning around it – in the days ahead.

For now, just know that one of the most stable-looking corners of the market is starting to show stress. And historically, that’s how bigger stories begin – quietly, then all at once.