The bombs have fallen. The smoke is clearing over Tehran, over Isfahan, over the holy city of Qom. The US and Israel have launched their long-threatened assault on Iran's nuclear facilities, and the human cost is already being tallied.
But as a man who has spent 20 years reading balance sheets, I can tell you this: the true cost of this war will never appear on any ledger. The markets, however, have already spoken. Oil futures spiked 15 per cent in a single hour.
The Tehran Stock Exchange, what remains of it, has collapsed. Gold, the eternal safe haven, has broken through its all-time high. Capital is fleeing the region faster than a central banker can print money.
But what of the human capital? The Red Cross reports over 10,000 dead. The Iranian government claims 25,000.
How do you price a life? The City of London has a phrase for this: 'priced to perfection.' It means an asset is valued so highly that any further gain is impossible.
But a human life is never priced to perfection. It is always too cheap. The bond market for Israeli sovereign debt is now trading at a discount, reflecting the risk of regional contagion.
The US dollar, paradoxically, has strengthened. War, after all, is good for the dollar. It is a tax on the rest of the world.
But the true cost will be paid in the long term by the US taxpayer, via the Treasury's increased issuance of war bonds. Central banks will be forced to monetise this debt. Inflation is the hidden tax.
It is the quiet killer. And as for the true toll of the dead? The Iranian government has a history of underreporting.
The US military has a history of 'collateral damage' estimates that are nothing more than guesswork. The International Committee of the Red Cross has no independent access to the blast zones. So the number will remain a mystery.
It will be a line item in a classified appendix to a Pentagon report. It will be a footnote in a diplomatic cable. But for the families of those killed, it is a permanent impairment of their human capital.
The market does not care. The market prices volatility, not grief. The VIX, the fear index, has hit 45.
It was at 15 a week ago. This is a market panic. But panic is a buying opportunity for those with cash reserves.
The real panic is elsewhere. It is in the streets of Tehran, where people are mourning and burying. The world will move on.
The oil supply will adjust. The US and Israel will claim victory. Iran will claim resilience.
But the true cost will always be unknown, because we refuse to account for it. In finance, we have a term for an asset whose value cannot be determined: it is called a 'toxic asset.' This war is a toxic asset.
It distorts every balance sheet it touches. God help the auditor who tries to value it.