Wall Street needles Trump with bitter new joke as Hormuz debacle returns with a vengeance

Energy traders and Wall Street analysts are resorting to dark humor to cope with Donald Trump's foreign policy catastrophe in the Persian Gulf, where his aggressive posturing toward Iran has backfired spectacularly and destabilized one of the world's most critical shipping routes.

The situation has become so dire that financial markets have developed a bitter joke about it. Traders have coined a new term for what they now expect: the "NACHO trade" — shorthand for "Not a Chance Hormuz Opens," according to a report from the Wall Street Journal.

That acronym joins other Trump-themed market jargon, including "TACO," which stands for "Trump Always Chickens Out," revealing the contempt Trump critics have for his erratic decision-making.

The Strait of Hormuz, through which approximately 20 percent of the world's oil passes, has become the focal point of Trump's unraveling Middle East strategy. After renewed fighting over the weekend and Trump's announcement that he was reimposing a U.S. blockade on Iranian shipping, oil prices surged more than 10 percent, erasing an entire month of price declines.

"The chance of the region and Hormuz going back to the old normal is effectively zero," said Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, told the Journal. "If anything this reinforces the impetus to invest in other pathways as quickly as possible."

The core problem, according to Wall Street Journal reporting, is that Iran and neighboring countries have discovered they can easily manipulate U.S. politics by threatening to choke off shipping through the strait. That realization has fundamentally altered market calculations.

"Oil markets and Middle East producers appear to be aligning around a new reality: The Strait of Hormuz is no longer expected to return to a prewar norm," the Journal reported.

According to the Journal, "The idea behind the NACHO trade is that the shipping route through which roughly 20% of the world’s oil had passed will remain virtually shut, with only a trickle of traffic slipping through clandestine routes, until the economic costs of its closure, such as high oil prices and accelerating inflation, become untenable."