Financial Firms Use Military Experts to Predict Iran Strike Risks

Wall Street financial companies are increasingly relying on former military and national security advisors to help predict geopolitical events and market impacts. These consultants successfully warned clients about the likelihood of U.S.-Israeli military action against Iran before recent strikes occurred.

Financial institutions across Wall Street are turning to former military officials and national security experts to help navigate the risks posed by escalating Middle East tensions, according to industry sources.

Before U.S.-Israeli forces conducted airstrikes that resulted in the death of Iran’s Supreme Leader on February 28, several major financial firms had already been alerted to the possibility of military action through specialized consulting services.

WestExec Advisors, a geopolitical risk consulting company, informed their banking clients on Friday evening that there was a 65% chance of weekend military operations, according to managing partner Nitin Chadda.

“It was clear to us that there was an intention to take some meaningful Iran military action,” Chadda explained, noting that his firm had seen increased inquiries from financial clients seeking help with conflict scenario planning.

Chadda, who previously served as a senior Pentagon advisor, established WestExec in 2017 alongside colleagues including current Secretary of State Antony Blinken. The firm’s client roster has included investment bank Lazard, private equity firm Blackstone, and Japan’s Softbank, based on 2021 Senate disclosure documents.

The appetite for geopolitical intelligence has grown significantly since tensions between the U.S. and China intensified during Trump’s initial presidency, followed by pandemic-related supply chain disruptions and the ongoing Ukraine conflict.

The current Middle East crisis, which has created turbulence in equity and bond markets while triggering an oil market emergency, has highlighted the value of such advisory services, particularly given Trump’s unpredictable foreign policy approach.

Financial sector professionals have been actively seeking briefings from former military and national security specialists as investors and corporations seek understanding on topics ranging from Iran’s naval mine capabilities to how the conflict might affect semiconductor production, according to multiple consultants, banking insiders, and investment professionals.

“What you’re really seeing from the financial industry is how national security and economic security have been merging over the last few years, and that is accelerating,” explained Amy Mitchell, founding partner at Kilo Alpha Strategies and former Pentagon senior advisor.

The military strikes came after three weeks of U.S.-Iran diplomatic efforts focused on limiting the Islamic Republic’s nuclear program, during which Trump issued force threats and the U.S. significantly expanded its Gulf military deployment.

Those negotiations concluded on Thursday without apparent progress, though Omani intermediaries indicated some advancement and suggested talks would continue shortly.

However, some observers remained skeptical. WestExec executives, despite lacking access to official military plans, detected increasing frustration among individuals connected to the negotiations, while additional indicators suggested an imminent attack, Chadda reported.

He cited what he described as a “last ditch” Washington visit by Oman’s foreign minister that Friday as one such signal.

Chad Sweet, former CIA officer and CEO of The Chertoff Group advisory firm, identified the USS Gerald R. Ford aircraft carrier’s arrival in Israel early Friday as another significant indicator.

Additional observers noted reports of U.S. embassy personnel being permitted to depart the region.

“That was one of the final major trip wires,” stated Jay Truesdale, CEO of TDI global geopolitical strategy advisors.

TDI had already briefed clients, including hedge funds, traders, shipping companies, and industrial firms, to watch for government action indicators reflecting military planning, Truesdale said, emphasizing that such intelligence comes from publicly available sources.

“We knew that once the trip wires were triggered that the likelihood of military action within 24-72 hours dramatically increased.”

Unusual U.S. Treasury market activity that Friday suggested some investors were responding to these warning signs.

Despite inflation data that would typically cause investors to sell long-term Treasuries, trading moved in the opposite direction, pushing 10-year Treasury yields below 4%. Such significant movement toward safe-haven assets typically occurs when adverse economic events happen or are strongly anticipated.

Tom di Galoma, managing director of global rates trading at boutique broker-dealer Mischler Financial, said market discussions suggested the movements might have resulted from briefings by former military officials.

White House press secretary Karoline Leavitt stated in an email that Iran represented an immediate threat and the strike demonstrated courageous leadership.

Responding to increasing investor interest, major financial institutions including JPMorgan, Bank of America, Lazard, Goldman Sachs, and Deutsche Bank have established their own geopolitical advisory divisions in recent years, while others have invested in military and national security expertise.

Deutsche Bank announced in November 2022 that it had hired late former Secretary of State Henry Kissinger. Santander brought on former British Army head General Sir Patrick Sanders last year to support its defense lending initiatives.

Representatives from Deutsche Bank, JPMorgan, and Santander declined comment, while Goldman Sachs did not respond to inquiries. A Bank of America spokesperson confirmed their geopolitical department employs experienced national security and intelligence analysts.

As the conflict expands, investors are requesting regular updates, shipping route intelligence, oil price forecasts, and analysis of crisis impacts on energy-dependent industries, according to industry sources.

“It’s been 24/7, fielding very specific questions from clients across the spectrum, including investors and energy folks,” said Teddy Bunzel, who leads Lazard’s geopolitical advisory division launched in 2022, which employs several former military advisors including retired four-star Admiral William McRaven.

“Everyone is wondering – how does this end?”