Despite new market highs, the author warns of profound Gulf war risks, outlining four grim scenarios: a fragile peace (unlikely), a damaging prolonged ceasefire, US/Israel escalation, or a catastrophic Iranian escalation leading to global stagflation. The current ceasefire is economically harmful and unstable. The author criticizes investor optimism, arguing markets drastically underestimate the conflict's potential for severe economic and financial volatility. A "rude awakening" awaits those believing in an imminent, permanent peace, as the situation remains fraught with downside risks and protracted pain.