Marko's Pain-Based Punitive Airpower Global Response Equation

[MUSIC] Hello listeners, welcome to another episode of Geo Political Cousins. Not a lot of notes from me. Email me at [email protected]. If you want to talk about anything you heard on the podcast, I'll make sure Marco is C-seed. And yes, we're finally going to get an actual email trust for the podcast. But for the last time, email me if you want to get something to us before then. Thank you for all the listeners who sent in questions in this quasi-mail back episode. We'll see what the weekend brings. See you out there. [MUSIC] The only thing prohibiting transit in the streets right now is Iran shooting at shipping. It is open for transit should Iran not do that. All right, thank you, Crystal Methromsfeld for that trenchant analysis. Do we even have to talk, talk, cousin Marco? Like, Pete has it all figured out for us. If the Iranians would just stop firing, transit is open, baby. I think we back it in. Cousin Jacob, by the way, I'm living through Pete Hacksett through the SNL interpretation of him. I'm finally happy to call and chose to actually put some effort into his job. You know? This is like the luckiest man in the world. You know? I'm glad you brought this up. He is the luckiest man in the world. How does he do it? How did he do it? It's just he's like non-threatening face. You know? And he's just like, like, oh, shucks demeanor. But then he's really had a rebirth with his Pete Hacksett interpretation, which is awesome. I just love it so much. It's so cool. Yeah, well, I mean, all of us with non-threatening faces should be so lucky that Scarlett Johansson notices us in a crowd. Okay, well, we've got a lot to cover. I have, we have mailbag questions. But before we get to mailbag questions, cousin, I thought we should talk about a couple of developments here. So we're recording it's Friday the 13th. So if you're spooky and superstitious, yikes, we've also got, I mean, there's tons of important things to talk about. First and all from from a personal perspective, we discovered a gas leak in my house this morning, cousin, which they had to take the gas meter away. And now I have to wait for the city of New Orleans to approve the repairs and everything else, which is to say, though, I am living what the world is living. There is no natural gas now getting to forward operating base Shapiro. So no hot water here just cold showers, everything else. This is what is coming for the world. So I or Gc, basically, I mean, is this, is this a retaliation? Has it started? I mean, I hope it's not the hootheys because that means the hootheys are getting off the bench and getting into the game. Oh man. Which is quite far if they can reach out to touch the Gulf of America with their nefarious purposes and Klandas dying things. We also, I mean, can we just start for a second and say, none of us actually know anything in a world where Bam out of bio scores 83 points and a single basket. Thank you. Thank you. Thank you. First of all, just like as a Laker fan, as a Kobe fan, I am, that's just an affront quite frankly. That's just, I mean, did you know they boot him at the staple center when they, sorry, at the crypto arena when it was announced? The Laker Fadeful just booted. And I mean, come on, like 43 free throws. And at the end of the game, they were like all trying to get him to it. Come on, like it's just, it's fake. It's fake. It's Hollywood. It is, but you know, 20 years from now, somebody, I mean, maybe nobody's going to be playing trivia anymore because our AI overlords are just going to be ruling everything. But 20 years from now, there's going to be a sports trivia question of who scored the second most points in an NBA basketball game. And nobody's going to get it because Bam out of bio is like not in the top thousand guesses that I would, I'm not that I would have a thousand. It's not in the top 100 guesses I would have had for me if I didn't know which has happened. It's a great crowning like achievement to crown the other accomplishments of his career. Yeah, which are exactly like it's nonsense. You know, but you know, it also, it also really is discouraging for me because I think in this day and age, like the fact that the other team, the wizards basically enabled it is just really annoying. Like that's what's annoying. And the other thing I would say is that it like the man average is 18.9 points per game. If he got to 83, can you imagine how many other players are right now thinking like, bro, I can get to 90 like camp, camp Thomas is sitting somewhere being like, fuck, I'm going for 100. And we're going to have a world where like camp Thomas has the largest scoring game in NBA history. Yeah, it just it just goes to show you nobody knows anything. But so a smattering of things that we should just throw in here right now. So Friday, March 13th, we're we're recording around noon central time here in New Orleans. This will come out probably later this afternoon, but you know, a lot can change between now and then. The Cuban government came out and said that it is negotiating with the Trump administration. Not a whole lot of urgency here from the Cuban government. They said that this is their they're focused on finding solutions between the two nations through dialogue and that these are processes that are done with great discretion and very long processes. Mr. Mr. President, I don't know if you've been watching. That's not exactly how the United States is behaving. So I might hurry up the pace to fire you. Iran has been staying in the game. They're hitting more tankers in the Gulf. They're also reportedly making deals with other countries to allow certain ships through. So Iran negotiating with India to let ships through. There was an FT report that Iran is negotiating with France and Italy to let their ships through. Italy denied that. France has not denied it quite yet. We've got the US sent com, reportedly deploying or requesting that Crystal Methorams fell deploy a marine expeditionary unit to the region. They're in Japan right now. But so now they're on their way, creating all sorts of questions about whether we're going to get US ground forces. In Iran, President Trump has been of course all over the place about whether the war is going to end or not. My favorite quote from this morning was he was asked when it was going to end and he said, "When I feel it, feel it in my bones." Cool, really interesting insight into his mind there. Where are you at, cousin? Because I mean, I think you and I were both thinking this was a two, three-week excursion or a fare, or whatever you want to call it. I'm still sticking to my guns, but President Trump is testing it. Where are you at right now? Well, I mean, we're one week into a potential two to three week timeline. So, two to three year. It's two to three year, yeah. I think I'm still with that, but it's always a low conviction view. I think it's kind of a 60/40, which is not great. Wars have dynamics of their own. For example, right now, I think one of the variables, I think there's three variables we should discuss. One of them is the pain tolerance of the Iranian regime. I believe it's extremely low. I think these guys, yeah, I think it's low. I think that they're not, oh, sorry Jacob, I think you're muted. Yeah, I was going to say low. I actually think it's quite high, so we can disagree about that. Cool. All right, so what's number two? Well, the reason I think it's low, okay, number two. So there's three variables that we have to put into a mathematical equation and then get some number out of it. And that number is the length of this conflict. So I think the Donald Trump is not in the equation at all. I think he's de-escalated. He said it's just a short excursion. He's claimed victory, essentially already, and talk of regime changes over. So I'm not worried about that side of the mathematical equation. I think the equation is this. Capital T, for pain tolerance of Iran, minus open bracket, small case P for punitive air campaign by the US, plus small case G for global response to Hormuz. So why is that? Well, because I think that the Iranian pain tolerance, whatever that is, is going to be moderated by two factors. One, I have clients asking me, well, Marco, you know, like they can rebuild the drones and they can send them. I'm like, what are you talking about? They're going to have death, fire, and fury rained on them by the US in a punitive way. So the punitive air campaign is an important part of how long can Iran withstand this. The other part of this is what you posited online. Great tweet by you, Jacob. Which is that we've had this before. And before in the tanker wars, Iran and Iraq actually impeded shipping through the traffic. And, you know, the world responded. There was a naval mission by the United States, United Kingdom and France. There was actually joined by the Soviet Navy. The Soviet Navy joined them in mind sweeping operations. Straight off, Ramuz will be pride open. And so if you are Tehran, you got to be very careful because if you, if your aggression incentivizes the rest of the world to create a global response to this, like remember during the pandemic, Operation Warp Speed? Like, so if we get Operation Warp Speed for Hormuz, we will pride open. I guarantee that to our listeners. This will happen. And at that point, you've lost your leverage and all you got left is Iran is carpet bombing by American B-52s, threat of fortresses. So I think it's in Iran's interest to flag to the world that they have the ability to close the straits for a week, maybe two, but it's not in their interest to do this indefinitely because eventually the world will react to them. Now, you know, some folks online, like on Twitter, right now, there's a question, but how many drones did Iran have in 1986? You know, well, hold on there, buddy. How many ages defense system enabled destroyers that America have in 1986? The answer is zero. Now, what is the ages system? It's a air defense. It shoots down ballistic missiles and any threats to a ship. It has about 90 to 120 interceptors and a single destroyer has a range of 100 miles. The US currently has eight of ages enabled destroyers into Persian Gulf. Five more are coming. France and sending age ships. Other countries are going to eventually. We will eventually send in place stations. No, but eventually, and this is again, the reason that it's very dangerous for Iran to sustain these attacks is that eventually they will usher into existence through their belligerence in international response that ends their ability to be belligerent. And at that point, the only thing that's left are B 52 strata forces is turning you into an economy lot outside of LAX. So that's, I think, the equation we have to figure out. And now you might say, well, their power, pay tolerance is high. I may say it's low. It almost doesn't matter because what matters are the two coefficients that will toggle their ability to sustain the pain. In other words, their pain tolerance is not in vacuum. America is not not carpet bombing Iran. And the rest of the world is not just going to sit aside and say, oh, Zoot al-A'r, we cannot open the streets of her moves. Yes, you can. Yes, you can. Yeah, there's a lot to unpack here before we get to mail back. And it's been into, I've been, I'm sure you've been doing this too. I've been going back and reading my history and I've been reading about the 1950s and I've been reading about the tanker wars in the 1980s. And like it's helpful to read history because you realize we have been here at these moments before. And it's also interesting to think about how previous iterations of Iran reacted in the past and how the world reacted to some of these things. Like not all of this is all breathless and everything else. I guess two other things I should have said in our intro was, you know, we have the new Supreme Leader, Mosh Taba Khameini. We have purportedly a statement from him. We still haven't seen him. There are reports that maybe he's in a coma, you know, all these other things. But purported statements from him saying that Iran is in this for the long haul, which to your point, I think they have to try and communicate that. But I also agree with you that there is a certain point at which they can't go across because not just the United States, other countries are going to come in and open up the straight themselves. Like I joked about this in a recent essay that I wrote. I mean, the Pakistanis are sending their navy to get their ships through. So, you know, people are going to open up the straight one way or another. But Iran does have to stick around long enough and impose enough pain to try and restore some level of deterrence. They need the United States and Israel to understand. Yes. You can't keep doing this again. Okay. If you do, like we have to show, and they haven't even gotten there yet. And this goes to the second thing, which is, you know, the Saudis have activated the East West pipelines, roughly seven million barrels per day crossing Saudi Arabia, going to the Red Sea. And you've got tankers. They're lining up to take that oil. And this is a lot of our listeners were asking this cousin. Where are the Houthis? Because your moment is coming. Like you've got a bunch of tankers just sitting there waiting to offload, you know, bring these barrels to the global market, which is hurting. Get around some of these things. If the Houthis are going to get involved, now's the time. And it's also, that's a lever. Iran has not pulled yet. Like I think that a lot of, you know, analysts are thinking, oh, like Iran is fired their best shot. And now it's just taking the punch. They haven't fired all their best shots. I don't know. But continue to fire shots and then you got the Houthis sitting there. So yeah, push back. But that's what I see. That's like the negative scenario. I think to what you're talking about. Well, I think I, one of our listeners wrote in that I should be sponsored by the Houthis. You sure? Because I'm such a big fan of them. But the fact that they haven't joined, I'm not sure that is a sign that Iran is holding it back. First of all, I've always been very uncomfortable with the idea that Houthis just do everything that Iran tells them. That is American propaganda, Western propaganda, Israeli propaganda. Houthis have a mind of their own. You know, do they really need Iran's support? Come on, guys. You know what I mean? Like, nah, the Houthis are awesome by themselves. So that's the first thing. The second thing is like, I just want to pause there and say, by the way, you're not alone in your Houthi fandom. President Trump was here first. He's the charter member of American Houthis because he tried to bomb them early on in his first administration and they took it. And I don't remember his exact quote, but he was like, they're very tough. Like, we couldn't do it. And he got to a sort of modus vivendi with them where they stopped attacking American ships going through the Red Sea. They agreed to limit their attacks to Israel and make this about Israel. So the other thing about the Houthis to your point is they have a deal with the United States right now. So this isn't like Hezbollah, which is already dying a slow death and which is getting mopped up by the Israelis left and right. The Houthis have been left alone in relative peace and quiet. Now, they may decide that it's in their interest at the moment of maximum pressure to go in and help the Iranians here because they are part of that, you know, access of resistance. But to your point, they may also look at the deck and look at Iran becoming a parking lot and saying, yeah, like, I don't know. Like, maybe we don't want to do that. Maybe we have bigger fish to fry or more hot to chew or whatever metaphor you want. Yeah, they have been more caught to chew. But this is the key point, Jacob, that I think a lot of commentators are in this or ignoring. This is not a riskless or costless strategy for Iran or Houthis. The United States of America has opened up a can of whoopass. And I say that as someone completely and utterly bathed in a loop in difference, I'm not cheerleading the US effort. But as somebody who has lived through it as a Serb, I can tell you that this is no joke. Like, it's not a walk in the park to face the US Air Force and you have no way to protect yourself against it. Yeah, if this was Russia or China, they could threaten nuclear war. Iran is a chocolate labrador on its back ready for belly rubs. It is completely defenseless. It has no way to prevent what are slow shitty B-52s designed in 1956 from decimating its country. That's pathetic. And the Houthis don't want any of that smoke. I say that because I've made a comparison between Houthis and Iran on this podcast and it was one of the things that really scared me. Like, well, if the Houthis could shut down the Red Sea, why can't Iran shut down straits? And I mean, they can, they're prayerily. But in the case of the Houthis, like if you look at the data Jacob, in 2024, the United Kingdom and the United States had 294 strikes in the entire year. So in 356 days of 2024, the US and the UK combined Houthis less than 300 times. That's how many sort these the US is doing in like an afternoon right now against Iran. And so that's what I mean. Like if your Houthis right now, do you really want B-52s flying over you? Because they're in the neighborhood, you know what I mean? Like they can just make a little detour and hit you as well. So I think that's one of the reasons you're not seeing the Houthis get involved. It's one of the reasons we haven't seen the Shia militias in Iraq, which are supposedly allied if not directly linked to Iran. Houthis at least have a mind of their own. The Iranian linked Shia's groups in Iraq have also been like what they they launched like a drone at the green zone at the beginning of this. And I see and I think that this is this is where you sort of have to really understand. It's not that simple. It's not that simple to face the US when they're in punitive mode. When they're like in Joe Biden, like, oh, let's open the Straits mode. And then I'll go put all my sketchers and we have a walk around the block. When you're in that mode, like maybe you fuck with America. But when you know, you got Pete Hexat, the Secretary of War sending B-52 Stratophoresis is in the region like, hey, there is a significant cost. And that's where I think that a lot of a lot of people who think they've swallast months are basically asking Iran to face this kind of conflict forever. And I think that's just like unfair to Iranians, you know, they have to think about their future and their interests. And they could very well be the economy, parking lot outside of LAX in about a month. I mean, you know, fair and unfair. I mean, it's going to suck for them. I think the the the devil's advocate position that I would throw at you. And this has been out there for the wrong reasons because you know, Jim Kramer is out there talking about this. But you know, the United States, you know, decimated destroyed Vietnam for years. And Vietnam didn't surrender. And this is where I when you think about Iran's pain tolerance. And here I don't mean the pain tolerance of the regime. I mean the pain tolerance of the people. And it's really hard to craft an equation and get data on this. But the way that Israel and the United States have gone about this, and you were the first one to say this, the fact that Israel is a part of this. So Iran is getting attacked not just by the United States, but by Israel. It's territorial integrity, which is an issue that is really important even to your rank and day file, Iranian, who doesn't have any love for this regime at all. That has been threatened directly. You're now blowing up oil depots in Tyran and you've got the acid rain and who knows how many deaths and long-term deaths from cancer and things like that are gonna come from the things that have already happened. Like you're creating a rally around the flag sort of effect. So, and this is why I think the devil's advocate to your position is the Iranians are a very, very proud people and from a civilizational state that has been around for thousands of years and it's like fine, bomb us. Bomb all of us, like we will still be here at the end of it. And by the way, once you stop bombing us, yes. Like we have some accounts to settle with the IRGC or with the Supreme Leader or these folks who let us down this path that, you know, we will deal with those accounts when it's time but those are not the accounts in front of us. Right now we have Israel and the United States going after us and we have the world doing exactly what they did in the 80s when we were fighting for our lives with the Iraqis, exactly what they did in the 50s, which is they don't give a shit about us, they give a shit about our oil. So it's fine, China's not even helping us. Like bomb the Iranian, that's fine. Just make sure a couple of our ships get out otherwise like things are gonna get tough. So when I say that we're underestimating the endurance of the Iranian people, like I think there's, yes, I think it's probably only gonna last for a week or two, but I think the devil's advocate case is no actually. The Iranian people are willing to take. I mean, how long did you say the Serbs lasted? 78 days? I think the Iranians could last as long as the Serbs at least. And what if we're dealing with Iranians who will last as long, I mean, they probably won't last as long as the Vietnamese, but like, you know, there's a spectrum of how long people can last. And ironically, the more the US gets punitive, the more they encourage the populace to rally around a regime that maybe they truly hate, and which is also like falling apart at the seams. Anyway. The Vietnamese-- I find myself more in agreement with you, but I'm trying to articulate the devil's advocate position 'cause I agree with you that it's not so simple. The Vietnamese were fighting for their survival. Iran is not because President Trump has abandoned regime change goal, and so has Israel. So that's a very, really important point to understand. Like, the reason you don't want to be turned into a parking lot is because nobody-- like, the US is about-- I mean, obviously, this is all predicated on the de-escalation of President Trump, which I think is coming. So if President Trump declares victory and says to you, I'm done, I think it isn't the interest of Iran to keep the straits closed for a week, maybe two, just to prove we were in agreement. But why month or two? Then you will invite those punitive attacks. In Vietnam's case, the risk tolerance, the pain tolerance, was extreme because the United States of America was literally trying to change the regime on the ground. They were fighting for their freedom. They were fighting for their way of life. In Serbia's case, I would say the pain tolerance was not higher than Iran. It's just that the punitive air campaign was not as vicious because it was implemented by Bill Clinton in Madeline Ulbrite. You know? No, I ran into Madeline Ulbrite in an elevator once, or at least I saw her, her security very quickly. She said, get out of the way. What are you doing? Did she tell you she was doing 47 push-ups every morning? No, she looked at me very concerned. And then the elevator doors. She looked like a Bolshevik. She was like, get him out of here. Look, my point is, my point is, this isn't Serbia because America has taken its gloves off and the hands of bloody and ready to bench press. That's the first reason. And it's not Vietnam because no one's asking Iranians to change the regime, at least not anymore. And so that's why we have to ask again the question, for what end are you going to take B-52s in the face? To what end? I think your point is more convincing. So I think, and this actually leads into what we were talking about, and also to one of our first listener questions, which is, so in this next week that is coming, I think you and I are both of a mind, the base cases that the Iranians need to keep this going for at least a week, maybe two, to impose a real cost on the global economy. Like what's happened so far is not a real cost yet. We have to get to the point where people are truly freaking out and then the Iranians can say, okay, mission accomplished. We taught everybody a lesson, but not so far, you know, that everybody is sort of going after them. But so in this week that comes, are the Iraqi militia is going to come out? Are the Houthis going to start bombing in the Red Sea? Like how far can or does Iran push it? Because if they go after the Red Sea, like one of our listeners asks this question and then says, in my opinion, the Red Sea is now severely underpriced risk and incredibly important to the market today versus the last few years. I find myself in somewhat with agreement of that, and I also find it suspicious that the Houthis have been quote unquote absent from the chat to steal from our listeners' question. So do you think in this week to come, it's just about Iran hanging in there and lobbying more rockets and drones at the UAE in Israel and some of the others? Or do you think they can or will reach for the Houthi lever or the Iraq lever? I find myself, I'll answer the question first myself. I am worried about the Houthi lever. Like I agree with you that the Houthis have a mind of their own, but they've also been aligned with Iran for quite some time. And if you were waiting for maximum impact, I mean, it's almost too obvious. It's like watch the tankers cross all the way into the Red Sea, lull them into a false sense of security and then bam, light them up. And now you've got two choke points and you've got everybody freaking out and markets are gonna go absolutely ballistic, no pun intended and we're sort of off to the races. Like it seems like a very elegant threat matrix, maybe too elegant. Where are you at? I am really surprised that the Iraqi shia militias have not, Iran linked shia militias have not acted. I don't worry about the Houthis too much because again, the Red Sea is not, you know, I mean, they have capabilities, but look, there's ways to interdict these drones. The waves of drones are falling. And you know, I keep seeing all these questions being asked, but there's an asymmetry of costs between drones and rockets. Sure, but carpet bombing drone factories is pretty cheap. So you have to understand something. It's almost as if people who think this will go on forever. People who are overstating Iran's capabilities, they think America's like fighting fair. They think that Iran is just going to sit there. They're going to launch a thousand drones a day and then manufacture another thousand and people in overalls. Like with happy smiling faces are going to go into drone factories and produce them. Like guys, Trump is raining death fire and fury on Iran. You know, this isn't precision strikes anymore. They're moving up the weight class of bombs that you're releasing because they're not afraid of Iran anymore. Israel and the US have decimated Iran's surface to air missile capabilities. So they're not flying 1950 bombers above Iran. Like that is ludicrous. And so because of that, to answer your question, Jacob, I just don't like I haven't seen from Iran the kind of volume of drone strikes. And by the way, we're tracking this on BC a research website. We've actually opened our dashboards to non clients. So you can go click on the dashboard and look at this data. Like their drone attacks have collapsed. They've collapsed. Why? Maybe they're saving them for ships. Sure, maybe. Or maybe it's because they have B52's try to force us. This is dropping bombs on their head. It's really difficult to keep up the pace. And that would be the case with the Houthis too. I think that's what keeping the Houthis back. That's why I'm not too worried about the Houthis. What I would be worried about is Iraq. I would be worried. So here's a nightmare scenario. Okay, I've been very, very sanguine here. And I think you want like, the dark Marco. What's the point of having a syrup on the podcast? If I'm always just happy. - Darth Cousin, Darth Papich. I don't know what we'll have to work on. - Yeah, Darth Marco. Darth Marco. - Darth Marco. You know, here I go. It's a land war that would worry me. Like, America's gonna win the drone war in the Hormuz straight. It is. It's gonna bomb the factories with dumb bombs, kill thousands of civilians. Trump is not gonna give a fuck. And it's gonna put a significant ages class armament in the straits that yes, we'll destroy $20,000 drones with million dollar interceptors. America doesn't give a fuck. It will do that. It is plenty. So the volume of drone strikes will continue to decline because Iran is under duress. America will have 40 destroyers in the straight of Hormuz. It'll be over. Oil will get out. And by the way, if you think I'm being optimistic, then you've wandered into a conversation like a child. Because this is exactly what happened in 1980's tanker wars. Oh, but Marco, there were no drones in 1986. Oh, but random dude on the X. America didn't have Arleigh Burke, ages to enable destroyers in 1986 either. So pump the brakes on that, okay? One of my favorite Marco's is Kevin Durand Marco, the one who goes after the blog boys on the internet. You just can't resist. Like they strike a nerve with you and you just gotta go after the blog. No, it's just like when people say shit, like with authority and it's like bro, like just, ugh. All right, but listen. But wait, so forget about this closure of the straits for a second like you want the nightmare scenario? Fuck it. Iraq joins Iran. The Shia's in Iraq join with Iran. They see this as an affront to Shia Islam and we get a land threat to Cyderabia to Jordan to Syria to Israel like he gets more real IRGC starts moving troops to Iraq like that kind of stuff is where I think it would get really uncomfortable because at that point the US has to go into operation desert shield again It's got to start defending Cyderabia with troops the Saudis actually have to start fighting on the ground You know that's a nightmare scenario. Can't the B-52s just or they can or they can no no, I mean it will be ugly But I'm just saying but that's the point right like we're we're scrambling to find ways and Again, I mean I went log oil in January so like anyone who thinks I'm being too sanguine brother. I'm up 70% But my point is more I just now that this event has happened. This is what always happens Jacob People who have wandered into the conversation like I had the lessons they extrapolate this linearly into World War 3 But you should have been barish in January and February Not on March 13th on March 13th the crisis, you know may actually be Cresting now. I'm not I don't have a high conviction of you on this You and I are thinking of scenarios in which this goes sideways But every time one of us does that the other one says But B-52s and it's like yeah, but B-52s they suck Well, okay, well this actually leans leads into one of the listener questions I wanted to get to though because it actually asks the other side of the scenario that you just talked about and this is from my guy Neal shout out Neil. I'm sure I have his permission to at least use his first name on the podcast So he asks and this is right he's thinking about this from the US side So his question is why is it sacra religious to ask why the US doesn't just seize or attack carg island? I see arguments on both sides, but I don't see why it's some sort of absolute red line He also said, you know, I he does not like JD Vance very much But apparently he said that if they attack Iran he wants it to be a maximalist assault does he have a point should US ground troops sort of should they be In the offing and he also says quoting the great Jeremy Irons character Maybe you could tell me what is going on and please speak as you might to a young child or a golden retriever in answering the question So what do we say to our our guy Neal about the prospect of the US deploying ground forces that marine expeditionary unit on the way according to crystal meth Rumsfeld so well, I think that there might be more about carg island than about like a Granted phasion of in Iran You know so carg island is I think when people are thinking about this There's carg island and then there's also well do American Marines just like seize the coast and prevent You know Iranian fighters or militias or whoever else from trying to bomb things in the straight But yes, well, no, I just think that look again the drone attacks against ships Are pretty tepid you know the just overall we have the numbers Iran is sending about 50 drones a day now across the Gulf to the GCC Now is that enough to close the straits? Yeah, right now it is for sure US has only eight ages enabled destroyers And they're actually engaged in protecting the aircraft carriers that are conducting offensive Strikes my point is that at some point There will be an international flotilla that will not just include the US that will have enough Hardware and I'm obviously assuming that at the same time there's an effort to curb drone capability from the air At the point of origin the only way you think that this is it the math doesn't work is if you think that somehow America decides not to bomb Iran anymore You know so like if Iran is allowed to rebuild their drone manufacturing and to use drones then yeah sure This gets very complicated, but you have to understand that there's two things going on right now One is illustrated in the data drone attacks are collapsing and I assume that's not because of Iranian benevolence or coinus is because they're under duress by extraordinary amount of firepower that's being dropped on them and in the same time Eventually the US will have enough naval ass courts now It doesn't mean that a recession doesn't happen. This is not what I'm saying like Iran might say fuck it Bring that flotilla over here until then we will shut down the straits My my concern with that view is that it would mean that they're illogical Because if at some point the United States and its allies and even China might be allied on this issue because they have the interest in getting oil out if everybody eventually shows up and prize open the straits Then why keep it closed for that amount of time all you're going to do is invite that reaction while being carpet bombs That's the part you would have to assume they're just religious elites You would have to just assume they want to meet the Maddi and you know, I'm open to that which is why I I don't think this is an easy answer. I'm just offering one view Well, I think the reason there is such a I think there's actually two reasons why this is such a red line And it has nothing to do with whether it would be easy like it would probably be fairly easy for a marine expeditionary unit to seize car gaieland Like I mean you take some casualties, but I don't see why from a capability standpoint the United States could not do this But I think there's two problems number one this war is already very unpopular And you introduce boots on the ground. It's going to get that much more unpopular Not because of any of the battle techniques or anything else just because the pop you know the median voter is going to see troops on the ground And they're going to say I thought Trump was ending the forever wars I thought we were just bombing them with their power. Why are there American soldiers and sons and daughters on the ground fighting here? That doesn't make sense So just from a domestic political point of view I think it would be bad, but the second thing is mission creep We already talked about Vietnam like if you go back to a lot of the Cold War conflicts They like it starts with advisors it starts with you're on the ground helping training then it's oh it's it's a tactical mission We're just seizing this one thing that's very important and eventually you go from thing to thing and boom You've got hundreds of thousands of troops on the ground. So I think there's a very real sort of this gets beyond the president's um Capability to control things once boots are on the ground because like that mission creep is going to happen So I those are the two reasons I think why if you see us forces deployed even if it's a small number of forces even if it's over something that the United States can control You're going to start to lose Like whatever is left of the mega base and you're really like whatever agency you have in the conflict You're now you know beholden to things that are happening on the ground And that sort of takes some agency away. I think from the president That's that's why I would say that that's a really really risky Move to make and as for JD Vance like I don't know. I I'm sure you saw Was it in Politico or somewhere else where he was like he was the skeptical one in the room Give me a break bro like make up your mind you want to be one thing or another thing like this would have been if JD Vance was really smart He would have come out hard against this as soon as it happened if he was positioning himself against Rubio and thinking He was going to be the standard bearer post trump This is where you stick your flag in the ground and say hey I'm the author of Hillbilly Elegy This is stupid. We shouldn't be doing this. I'm against this Fine you don't want me fine put me out to put me out to pastor like Lyndon B. Johnson was when Camelot was ruling You guys can have your stupid floor shime shoes. I'm out here like representing the real Mac coalition Like that would have been the power move this like we need like oh, I'm not for it. I'm for it Now I'm skeptical now I wasn't skeptical like give me a break JD. Sorry. I went off. I went off there Uh What is that called is that is that uh we already know I have TDS do I now have JDS like what what is the I think you too. Yeah JD vets syndrome The range of the syndrome JD VDS Yeah, there you go. They all sound like veneerial diseases. They do they do Uh, they're difficult to shake off too um, okay, so let me ask you something Jacob. Uh, yes You were saying that Grand troops are unlikely just because the political constraints are huge and that uh, it's it's a risky proposition to do it I think you're right Right, like I mean this is about politics. It is about domestic politics in US I mean the other issue is that if you're not looking for regime change what's the point of Grand troops. I mean I understand carg island You could also just tell the Iranians directly We're gonna bomb it and you can't because you know one of the things that's going on and again this goes back to my Well, can you bomb it because if you damage it now you're Dealing with you know really you know a long-term restriction on the amount of barrels getting out of oil barrels of oil coming out of Iran, which is you know two million barrels per day. It's not nothing It's not nothing, but you know That is the price of their compliance. I mean by the way that wouldn't permanently raise oil prices OPEC X-Iran Does have enough spare capacity to effectively replace Iran's two million barrels. Yeah, that's fair But let's say that it didn't Because of the war or whatever the case is or because of your Iraqi militias. I mean you need that right you need a rock to cooperate in that Right, and that's why I think I don't understand why you would seize it You should just threaten Its destruction or what you can do is you can use smart bombs or An incursion to destroy Their export terminals in a way that they can be easily rebuilt because one of the things right now that's going on according to press reports is that Iran continues to out of the straight-armos. Yes, it does. So, you know, like that seems like something you should probably interdict. And it's something that you can easily flag to Iranians through back channels. Like, look, we're going to sink all your VLCCs. We're going to seize them. We will use Marines to land on the VLCC and just seize the ship. We'll just be pirates. You know, like, then we do this to Venezuela anyways. So. Letters of Mark. Like, this is what we're going back to. Like, we're going back to the roots of the Republic here. Yeah, I mean, I think that the US can do a lot of different things in which it can ratchet up tensions and then toggle them back down. I think that would be intelligent thing to do. I'm not sure that you need to seize the entire carg island. But sure, you know, find whatever. You know, find whatever. Why not? And I think that you can also explain to Iran that they're not going to be making money during this period of stress by threatening to seize their ships. But it goes back to my point about risk tolerance and pain tolerance of Iranians. They're negotiating with India to make sure that they get crude. Your point was they were talking to France and Italy. Like, what is your. So what's the standard here for who doesn't get to transit the straighter fru moves? Like, you know, it just seems pretty flimsy. This speaks to me about their lack of temerity. Like, what. If you're really a baller willing to go meet your maker, like, it's time to bring the Mardi Braque. And what you do is, like I said in a couple of podcasts ago, you say the stracer fru moves are closed. Thank you for your attention to this matter. And that's what you fucking do. Then I'll believe you. Then I'll be like, oh, well, maybe Jacob's right. They do have pain tolerance. Like, now it's like, well, Italians are cool. You know, the French are cool too. The Chinese are definitely cool. Like, so who's not cool? Like, Americans and Jews? Like, that's it. That's the only two groups that can't transit the straighter fru moves. Like, do they know Israel has 10 million people? Like, do they know that Israeli tankers are not exactly relevant for global shipping? Like, it's crazy. Like, that's where you start wondering how convinced they are. And by the way, if anyone from Moujtab Ahmadis regime is listening, like, yeah, you sound like your threats are vacuous, because oil will continue to transit through the straights then. Watch them. They are like, oh, good advice. Or it's a trap. You know, like, give them a false insecurity and go for it. But that actually, we got a good point. We got a smattering of questions from either Israeli listeners or folks who want us to know more about Israel. All sort of circling on the idea that we haven't talked much about what Israel's interests are in all this. And why don't we talk more about Israel and what it wants out of all this. There was even a question about it. I was just a little bit unclear that the strategic goals between Trump and Netanyahu have begun to diverge. And once Trump declares that he's had enough and walks away, how long can Israel keep it going? I think I know exactly what your answer to this question is going to be. I would also just throw in, I don't know if you saw the speech that Netanyahu gave yesterday, cousin, where he referred to Israel as an emerging global superpower, which I retweeted with a meme of Emperor Palpatine, like calling for unlimited power. And Netanyahu at his current stage of development. Yeah, Palpatine. Yeah. Yeah. Go look at the meme that I posted. It's a pretty good one. But anyway, my answer to this question, because Israel doesn't really matter, guys. Like, if the United States decides it wants to take its ball and go home, like sure, the Israelis can keep taking some pot shots and things like that. And certainly they can do terrible things to Lebanon. They're doing that right now. But Israel and Iran, like the reason this becomes a global issue is if the United States is involved. If the United States is not involved, then the straight is open, then things are fine, and we're not talking about a global issue. So, which is one of the reasons I think BB had to push for this now, because he's got a pliable White House in there. He's got somebody who's going to support what he wants to do. That's probably not going to be true in four years. So from that, it's not about that Iran's about to get a nuclear weapon. It's that you're about to lose your capacity to influence the White House. So it's either sort of now or never. So that's why I have not been focusing on it, because it's not that relevant. Sorry guys, like it doesn't. You guys don't have the agency here. Like you're taking advantage of it. You're surfing on a great Benjamin Netanyahu who's having delusions of Sith grandeur about becoming a global superpower. You're not. You're not. You're very powerful. You do lots of great things. Like you're not even a regional superpower. You're a spoiler. Whoa. So you take it. Whoa. I didn't say it. You did. I'm not going to touch this. I'm not going to touch it. Look, I think you're right. You know, and let's break down why you're right. So if the United States of America declares victory, which I think were days away from doing. And Israel continues to bomb Iran. You're saying Iran will no longer close the straits of her moves. That's what you're saying. Probably. Yeah. If there's an understanding with the United States, yes. Why not? So let's let's answer why not? And the answer to why not? This is the part where I think pain tolerance of Iran might be overstated. Because you know, Iran has friends. It has acquaintances. It has allies in those countries. So whether it's China, India, you know, Brazil, Indonesia, Malaysia, they're going to be like. Like you cannot hurt our economies because Israel is being mean to you. If America is trying to do regime change, everybody kind of understands that Iran has to retaliate against this. This is where like kind of the respect comes in. Okay, fine. Yes, you had to do something about the straits. You have to show us that this is painful. We will go talk to Americans on your behalf. But shutting the straits because Israel is mean to you, that's like part for the course. You have to deal with that yourself. And if you want to launch ballistic missiles at Israel and retaliate against Israel, then you know, no one's going to have a problem with that. And that's what happened in 2024. That's what happened in 2025. So I agree with you. I do agree with you. But I do think it's part of the whole point, which is that Iran is not willing to go all the way. Even now when it's actually being threatened by both Israel and the US, it's now willing to completely shut down the strait of remorse because they're clearly negotiating transit for other countries. Yeah. Well, they did, they shut it down for, it was completely shut down for two or three days. But to your point, like they have not, they needed to stick with it if they were going to go with it. But while you were talking, I was looking for this because you were talking about the drones. And I just want to put a counterfactual there too. And this is, you know, you're right about the drone strikes and the Iranian rocket strikes declining. But both Israeli and US estimates for Iranian missile launchers say that it's little unchanged. That basically, Israeli and the United States have destroyed roughly two-thirds of their launchers. And that's almost the same as last week when it was 60%. And you know, commentators have been talking about their adapting their tactics. They're able to hide them a little bit more. And so, you know, the number of drones and especially the number of rockets have come down in absolute terms. But it does look like the US and Israeli strikes are less effective in going after the interceptors themselves, which lends, I mean, this is all, you can interpret these any way that you want. You can say, well, what does that matter? The rockets are still not being fired. There's some part of me that wants to at least hold out the possibility that, hey, they are holding some things in reserve. They adapted a little bit. For sure. But for this next week coming, they need to be able to, you know, push the envelope here a little bit in order to bring things home. So maybe we're going to see, they don't even need like overwhelming force. They just need a steady drum beat. So maybe they've been able to preserve some capacity, even if the drone numbers and the rocket numbers are going down. I just, I wanted to throw that little piece in there. Let me give you a tortured analogy that will lose us 80% of clients. I mean, listeners. I love tortured analysis. Yeah, go for it. All right. We are in early March of 2020 right now. You know, we're like early March mid March. We're hiding in our homes. We're trying to set up the IT system for kids so they can do, you know, online classes. You have a shower in like a week. It really sucks. And when the government says, don't go outside, shelter at place. Think of your grandma. You're like, fuck, I don't want grandma to die. This is where we are right now. Why do I say that? Because everyone's thinking like, oh my God, they still have drones and missiles. Oh my God, they will hit the VLCC. Very large crew carrier. Oh my God, the straights and remove moves will be shut down forever because of this threat. Now fast forward like six months after March of 2020. It's now September, right? And you're like, bro, I've been holed up all year. Like Thanksgiving, I'm going to wild out. I'm going to be be busy, baby. Like fuck. And it's like, what about grandma? Your grandma had a good life. Your grandma had a good life, buddy. Raised good kids, got good grandkids. Like she had a good life. By the way, is this really COVID killing these old people? Or are they dying with COVID? So what am I getting at? There's gonna be a point where we're like, no, I mean, like, it's laughable. Why? Because humans desensitized. Now everyone's gonna be super mad and we're gonna get hate mail. Mercca that that that that. Listen, not everyone lives in Wisconsin, which is perfect, as our listeners know, the most perfect, it's is garden of Eden is Wisconsin. But you don't get to grow up in Wisconsin. Maybe you grew up in post-Soviet, destroyed wasteland, a dystopia where you have to get into a fight every day in high school. Or sorry, elementary school and middle school, where you're chased by dogs on your way to school because they've been let out their homes because owners can't feed them and they try to eat you on your way to school. If it sounds very graphic, maybe it's for personal experience. I don't know. But what I'm getting at is that you become desensitized to a high level of risk. This is why the world didn't end with COVID. And if you think the world didn't end with COVID because of the vaccine, you're wrong. We would have just eventually taken it into face like we did probably hundreds of years ago, whenever a coronavirus epidemic went through our system and then became the common cold virus, which is what coronavirus is, are. We would eventually done this. Why? Because we become desensitized. That's why people can live in cities with high crime. That's why many people choose to live in places that are polluted or high crime or this or that. Whatever the case is, not everybody has moved to Wisconsin yet. And so what's eventually going to happen is we're going to be okay with Iran retaining some drone and missile capacity. This is what happened in the 1980s. In the 1980s during the tanker wars, there was constant threat to shipping. If you don't know what I'm talking about, go and read about. You know, the US Naval Institute has a nice little online like summary of tanker wars. You can go on Wikipedia, all the pages in that grade. There was constant threat and we became desensitized. And yes, the technology has changed, but so has defensive technology. You know, as we as we talked earlier. And so I think that this is the process, Jacob, where people are, they're looking for perfection. They're looking for like, oh, Israel and the US haven't destroyed all the launchers. Yeah, but like once you significantly degrade Iran's ability to launch ballistic missiles, you will reach some level that's acceptable and we will desensitize to it. Just like it was absolutely insane for people in March of 2020 to believe that nobody should die of COVID. Like that is insanity. Tens of thousands of people die every year from influenza and we don't shut down the economy for it. In fact, to this day, at no point did more children die of COVID than influenza, by the way, to this day. So if you want to shut down schools for COVID, you should probably shut down schools for influenza all the time, which should all just live in caves. And so this is my point. This is a very important point. I know I'm ranting now, but the issue is, the desensitization is a non-linear effect. And I think right now everyone's extrapolating something linearly that's insane, which is like, oh, well, we need perfection. We need Iran to be completely neutered. That's not gonna happen and it's not necessary to happen for all of us to move on from this in three months. The only question I have is whether Iran will move on from it in two weeks or three months. Because that's the difference between a global recession and just a two week war. And that's an important question. - There's three little things I want to throw in there. The first is on the flu COVID comparison. I just want to point out the thing that was so scary about the Spanish flu was that it disproportionately killed young people. Like that was the biggest age group. If you look at COVID, the people who were most susceptible were old people. My children have had COVID three and four times. It's not that bad for kids. I mean, yes, you're gonna have cases where it's bad. I don't mean to shortchange. Like, I'm sure that there were cases where things were bad. But by and large, this was something that affected old people more than young people. The thing that was so scary about the Spanish flu was it was inverted. It was young people, the soldiers coming back from the war, they were getting stricken down. There was something about the flu and their immune system that made people in their 20s and 30s were dropping dead at higher rates than everything else. And I think you're right in the sense that, you know, those first couple weeks of the pandemic, I understand the fear. Part of it is about grandma. Part of it is we don't know what the fuck this is. Is this the Spanish flu? Is this Ebola? Is this something else? Is this coming from China? Like, there's that initial period where you do shut everything down. One, because you're scared and two, 'cause you're trying to buy time for the healthcare system in order to get ready for the influx of cases they're gonna get. What was crazy was somewhere in between letting the healthcare system get ready and the fear dissipating. It became a virtue signaling thing. No, we're gonna stay in our homes for months. Many months. And we're gonna, all of this stuff for a long period of time and it was a bait and switch. It was like, well, I get it. I'm supposed to stay home for three weeks so that the hospitals can get ready and so we can do all these other things. But now we're four weeks out. We know that yes, it's a little more deadly than some other things, but it's not the Spanish flu. Like, so anyway, I just wanted to throw that little thing in. Two things on the historical metaphor though. I think one thing we have, there's a limit in using the tanker wars as a historical analogy. Just because remember, tanker wars are part of the Iran-Irak war from 1980 to 1988. So this is not about Iran trying to make a point to international markets by blowing up ships. This is as Iran and Iraq are fighting each other and looking to get support. From the United States, from the Soviets, from external actors, they start bombing each other's ships and each other's tankers 'cause they're trying to hurt each other's economy. And they even create exclusion zones for countries that are not part of the conflict. It's really about Iran wants to make sure that Iraq's not getting oil money. Iraq wants to make sure that Iran's not getting oil money. So it's not about the drones and the destroyers. It's really about, there's a very different international context than I still think it's worth thinking about, especially 'cause you have the initial geopolitical shock and then oil prices go down. And we've already had some people come chime in on the chart and say, oh, but it was also the plaza accord and everything else. Like, yes, couple macros out there. There's other things going on, of course, but I think the chart still holds. I think another interesting episode to look at though, and this is the one I've been reading about lately, is Suez in the 1950s. Because in the early 1950s, when Mossadeg takes over and tries to nationalize Iran's oil industry, Iranian oil production basically goes to zero. Now things are still coming out of the straight, but then in '56, you get shipping through the Suez goes to zero because the Israelis backed by the British and French, try to seize the canal 'cause Nasser is trying to seize it. And the Suez is how the Europeans were getting their oil. And there was a very real concern that, well, suddenly the Europeans weren't gonna get their oil anymore. And then the Americans get involved and they say, stop this nonsense and they figure out how to get oil to Europe and all things happen in order to get oil to where it needs to go. And that's when I think the stat I read in the prize last night was 20% of UK energy consumption at that point was oil. It was still mostly a coal-based economy and they were freaking out that much. All of which, that's all now getting nerdy and things like that, all of which is just to say, we have been here at different times before in history. That's key. That's key. That was my point. And my point is, my point is not so much to make these analogies very, very specific to the history, but that we do become disensitized to a level of risk and we deal with it. We internalize it. Now, Iran's intentions during the tanker wars were a little bit broader. Like Iran did feel that everyone was on Saddam's side because everybody was on Saddam's side. Yes, per once. So they did have a little bit of an intention to make this bigger than it was. And they ended up mining the straits. And they ended up hitting one of the mines hit a US vessel. And this is when the US initiated Operation Praying Mathis, which we brought up-- we brought this up before. So I disagree a little bit. I think Iraq's intentions were to specifically hurt Iranian economy. But Iran's intentions were broader. And by the way, Iraq was hitting UK flag tankers. They were-- That was pretty like vicious tanker war. It's not like they were just hitting Iranian-owned tankers in Biceperson. They even hit a US flag-- I was really-- they hit a US flag vessel with an '86-- That was by mistake. By mistake. They immediately were like Saddam. It's like, I'm sorry. Didn't-- Sorry, JK. Didn't mean to do that. But you know what? Iranians were hitting Kuwaiti tankers as an example. And then-- US reflagged all the Kuwaiti tankers into American tankers, dared the Iranians. They had to escort these vessels like ship by ship. My point-- all I would say about this is that this lasted years. Yeah. This wasn't like an event. It was also-- it was Operation Ernest Will was protecting the Kuwaiti tankers. Operation Praying Mathis was destroying the Iranian-- --the Kuwaiti. And remind me what the current operation is. Raging fury. I can't even remember right now. Epic fury. Epic fury. We're really-- Epic punish. That's what they should have just called it. Like, fuck it. Just make it. But look, look-- If I was-- if I was-- I forget the guy who creates the Mad Max series. But the next Mad Max should be Mad Max. Epic fury. Like, it really should be. It should be-- It should be in Iran. It should be-- We move away from the dystopia. be an Australian landscape too, the Zagros mountains and. Maybe this is wrong. We don't know. We don't know what that is. But look, one thing, we should do a whole episode when things are quiet, which will probably never be. LOL. Yeah. We should rehash the pandemic, because I think it was a great example of how social media incompetent policymaking, you know, just like random shit can coalesce into a hysteria. We should. But I think we've learned nothing from it, if anything, we've learned all the wrong lessons. And there will, I don't know whether it's a year from now or 10 years from now or 40 years from now. A real virus will come up at some point that is no joke. Well, Mike, we're not going to be ready for it, because we're going to be litigating the old COVID fights, and we're going to realize too late that, oh, like this was the one that we needed to be ready for, and we blew our light. One thing I will tell you, and it is relevant to what we're talking about Iran. The one thing that was most frustrating to me, because I wasn't to, like, personally opposed to being in a lockdown. What I was opposed was that, throughout 2020, policymakers would do lockdowns and then spend it by being on television. It perfectly manicured and gelled hair. And yes, I'm talking about you, Gavin. You know, so I live in California, right? So there's another wave. Oh, no, we got a lockdown. Okay, cool. And then, you know, these guys spent eight hours on television telling me about what's happening. It's like, brother, you don't have to talk to me for eight hours. Here's an idea. Go to Kryptorina and convert it into extra hospital beds. Do something. Like, I don't know, because the Chinese were doing that kind of stuff. Now the Chinese then obviously went off the cliff, like Lemmings, and they basically did all sorts of things that I think were not necessary in the zero COVID policies of 2021 and 2022. But in 2020, the West was incompetent and they would do a lockdown, but it wouldn't use the lockdown for anything. They wouldn't use it as an opportunity to build systems and capacity so that each lockdown can be handled in better ways. It was just a waste of time. Like lockdown became the tool with which to fight the pandemic, which is stupid. Now. Fast forward to now. What the US should have done, and this is the part that really you cannot defend the Trump administration. Like not even my TDS DS can help. Like I have a mile version of TDS DS, but it's like not severe enough for me to defend the following, which is that, you know, there was that tweet that you retweeted. Who was it from where it was like the Trump administration did not expect the closure of the straights of her moves. Yeah. So what happened to Schwartzkopf doctrine? What happened to overwhelming massive force? Why, you know, like, and by the way, how can you, how can you have that qualitative assessment? Based on what, 2025, you didn't threaten the regime in 2025. Like of course, you're going to try to shut down the straights of her moves. My first job in risk intelligence, my first job in finance in both jobs, the first thing I ever did has a 20 year old was to try to figure out how long the shutdown of her moves would last Jacob. That was my first job. This is something we've talked about for 20 years. I'm not that young anymore. So how do you walk into this? This reminds me honestly, like in this way, Pete Hexet and Gavin Newsome are the same thing. Same great hair. Good looking men. Good looking guys just doing 47 pushups. God bless you both. But you're kind of more focused on being on front of the television, did doing something. How is it that you use lockdowns for nothing but eight hour press conferences? And by the way, then the media is applauding. You know, that was the worst thing. Like, oh, let's applaud governors, Kuala Mueh and Yusuf for being, it's for having the stamina to inform citizens for hours, like shut up. And then on this side, my wife was a nurse at the time. We actually had a couple of weeks there where we were like separating in our own house, because she was getting exposed to patients. And so I would like leave food on the table for her and she'd go into her bedroom and I would sleep in my home office and things like that. But I'm bringing that up to say, you know, like when the healthcare workers would get off their shift and everybody would clap for them as they came down, she hated that. She's like, come on. Like great. You clap for me as I get home from doing this work. Yeah. No, I mean, the virtual signaling was through the roof. And I mean, and my point is that systems, like the time that you had through lockdowns was wasted. And policymakers just kept whipping out the lockdowns. Similarly this time around, you had time. You had time somewhere between December and January and today to reposition troops, particularly naval vessels. So when Pete Hexet goes and gives a press conference and says, look, we don't have the, you know, resources right now to do naval escorts. I understand. God bless you. I get it. Like you're focused on offensive operations. And you could have, you could have had 20 destroyers instead of eight. You know, we're now hustling this other aircraft carrier into the region. Like you could have just had, you know, three aircraft carriers. You could have prepositioned a lot more. And that's what I don't understand. How do you not expect this to become this? Why do we waste the time? And I think that's something you're going to have to answer over the next six months. That's a great extended metaphor. So I want to take the Iran part and then we'll close the loop on the pandemic for a second. I just want to say that I think I get accused of the TDS thing and I am guilty of having TDS sometimes. But I've been out there saying that the war is stupid and I think it is objectively stupid. What wouldn't have been stupid was if the United States and Israel together assassinated Khameini in mid-January. Like if I was advising the Trump administration here in mid-January, like yes, you could have done what you're talking about, which is prepare for the closure for the straight of our moves, big military operation coming fine. Iran was in chaos. The regime was in chaos in mid-January. And you probably could have purchased at least a real chance at regime change and all the things that you wanted in the first place with a simple drone strike on January 15th. And now all the money that you're spending and all the capital that you're spending and all the more everything else and you're still not going to achieve any sort of end goal that's there. That's why I say it's stupid because I think there was a moment here and they missed the moment and they made the exact same mistake that so many presidents and so many secretaries of war and defensive made. Go back to Robert McNamara and his briefings and the kill ratios. All I care about is the kill ratio. So the kill ratio doesn't matter. You cannot, like yes, you can make it a parking lot. You could have achieved your goal with a much more intelligent way of going after these things. We'll do a whole episode in the pandemic. I just want to say that I'm sure talking about the pandemic and lockdowns creates emotional dissonance for folks because everybody has strong opinions about it. I would just throw in go watch the documentary 76 days. If you haven't seen it, it's a documentary with on the ground footage of the initial lockdown in Wuhan that focuses not on the politics. It focuses on the medical staff and the patients and what it was like to be at ground zero of a pandemic. It's the best thing out there about the pandemic. And if you want to have a, it's more than a palette cleanser. If you want to reset your mind for a conversation about this, watch 76 days and then come out of it and say, okay, like what does that mean politically? We'll do a whole episode about that. All right, next question. We need to start landing the plane here, but I cannot bring up this question because you brought up Wisconsin already. So here's from a listener. He says, I love the podcast. My only critique would be more love for Minnesota and not Wisconsin. Wisconsin is a bunch of cheaters who count smaller bodies of water as lakes to pretend that they have more than Minnesota. Also Packers fans are not actually owners of the team. Ouch. Okay. I'm not a lot of people. [BLANK_AUDIO] which is why they've been headfirst shifting their transportation to EVs and why they're building giant underground storage of oil. They've already known this. So, and you know, I was talking to someone today and they're like, well, you do realize this will crash the Chinese economy. They were buying all this crude at a discount. I'm like, hold on, they were buying Iranian and Bennett's well-incrude at a discount. And Russia, with that Russian discount, will continue because the US just allowed everyone to buy it. But the discount was like $9 a barrel. Like, yeah, China was benefiting from this commercially, but not massively. It's not like that's what the Chinese economy's built on. You know, like two million barrels of Bennett's well and Iranian oil at a $9 discount. So, I mean, why is China not going to support Iran because of what you just read from the foreign ministry? Saudi Arabia, Kuwait, UAE are as important if not more important to China. It has other allies. And Iran is not that strong of an ally for China. It's a weak country with an unstable regime. You know, as far as their concerns, Saudi Arabia and GCC, countries in the region relationship with those countries is far more important than a relationship with Iran. Yeah, this is just the part where I would remind our listeners that China doesn't really have allies. It doesn't think about that way. In a sense, China follows George Washington's advice to the young republic to avoid permanent foreign alliances much more than China does. The only, I think this is right, I'm pretty sure the only defense treaty relationship that China has, that is analogous to some of the US defense treaty relationships, is North Korea. There's some kind of agreement with Pakistan. I wouldn't call it a defense treaty relationship. I think you could go there. But the only defense treaty relationship where China is pledged to come to the age of the aid of a country if something is happening is North Korea. And I don't think the Chinese are particularly happy about that either. They didn't like getting dragged into the Korean War by the Soviets in the 1950s to defend the North Korean regime. Mao was very upset about that. It was really that it helped lead eventually to Nixon going to China and the divergence eventually in Soviet China ties. So I just, when you're thinking about, oh, China's going to use this the same way that the US use Ukraine. That's not the way China thinks. That's a totally western point of view. And it's a Kissingerian Westphalian nation-state approach geopolitics. And that's just not the way China is. We can debate about whether that's because of some thing in Chinese foreign policy traditions or whether it's just China's fairly young when it comes to being on the global stage with this level of power. Like I'm open to like discussions about why China's like that. But I just think so many people will not look at China and take it for what it is. They project what they think China would do based on their understanding of their own country or their own particular context. And so they get into these traps where they're like, oh, obviously China's going to help Iran. Or obviously, this is all about sending a message to China because to your point, if this is about sending a message to China, China's like, cool. Like we're going to keep doing what we're doing. No, but like message not received. I will go even further, Jacob. I think China will participate in a global naval expedition to open the straits and will shoot down actively Iranian drones. Why? Saudi Arabia is 14% of China's energy imports. Iraq is 11 to 12%. So right there, there's about a quarter, just a quarter that comes from non-Iranian producers in the region. And that's not counting Oman Kuwait, UAE. You know, so like for China, by the way, that's more than Russia. Russia is about 20% about a fifth of China's oil imports. Saudi Arabia, Iraq, UAE, Kuwait are more than a quarter. So this isn't, I think, anything related to China's weird traditions. I don't think it's about the history. It's just that Iran is just not that valuable to China. And neither is Venezuela. And I think people are overstating this. I think it's valuable to China's access to the strait of Hormuz, where America has leverage on China and has always had leverage is that America controls the strait of Hormuz through its fifth fleet in Bahrain. And so China right now is hoping, praying that the American Navy does something about this. Now, and this is why I've always thought the biggest risk to the world economy is if the kind of simplistic maga camp, the less sophisticated maga camp takes over and convinces President Trump that actually he should not defend the straits. That America doesn't need that oil because he gets oil from Canada, Mexico, and vast domestic production. And it's not in the American interests to actually like show that he can control the straits. And that would be an epic fail if that were to happen. Now, for listeners like wondering why oil prices in the US are rising because it's a global commodity. It's very difficult to, unless you ban all exports, and even in that case, I'm not sure it would actually work. The second thing is that we get a lot of other things out of the strait of Hormuz. So the chips that are produced in Taiwan are powered by LNG that comes out of the strait of Hormuz. So then AI companies in America can't get the chips manufactured in Taiwan. It would grind the capex story in America to a halt. There's no way to isolate the United States from this. Not to mention that if the US abrogated its responsibility to defend the straits, then the petrodollar mechanism would collapse. What is that you might ask? That is the agreement between Saudi Arabia and the United States. A tacit agreement actually that was spelled out when you only found out a couple of years ago that there was an actual written secret agreement where Saudi Arabia committed to recycle the profits from its oil exports into US treasuries. And what did Saudi Arabia get in return for this? The fifth fleet of the United States in Bahrain making sure that those oil barrels transit to straits. So maybe Saudi Arabia will start pricing oil in a different currency if the US does not provide its contractual obligation to defend the straits. So to me, I'm not really that worried about China. In fact, I think if there's anything Donald Trump has really good leverage in upcoming meeting Wichi, I do agree with the people who say it's all about China in one way. I do think this just clarifies in stark terms. The vulnerability that China has to American Navy. And I think it also allows President Trump to simply say, hey, how about you buy American oil and American LNG? It's safer. Ironically, because I'm going to keep bombing the other countries. Yeah. I would just throw in there. You mentioned LNG for chips. The fertilizer issue is maybe the least sexy of all these issues, but it's a big issue. We're talking about 20 to 25% of fertilizer that's being sold on the market. And the metaphor or the historical analogy I would use here is the last time we saw a big uptick in food prices was around 2007, 2008, so global financial crisis, things like that. And you can draw a direct line between those higher food prices, for example, and the rise of ISIS and the Arab Spring two to three years later. Because rising food prices leads to political dissension and some of these calerotic dictatorships and boom, you get social unrest. So there's going to be a lot like even if the straight of hormones opened tomorrow, like farmers need fertilizer now. They're in the plantings like where they need it right now. And this is not like oil or people have reserves. It's a it's a commodity that really only shines one or two times a year based on when farmers and different parts of the world are planting. So there's not a lot of reserves out there. And we're just going to have less food and higher prices as a result of this. And I've said this many times before, like, if you put me on a desert island, if you put me on Carg Island and I'm abandoned to myself and I'm like Tom Hanks and all I have is Wilson to talk to if I could have one thing from the outside worlds and know what's going on, give me some kind of index of global food prices. It's not going to be immediate. It might not be within 12 months, but like we will feel the impacts of this and all sorts of butterfly effect ways going forward in general. Because and that's all I had. Anything else you want to close out with the listeners on or should we tell them to have a nice weekend? Well, I think yeah, we should we're sure we're going to find weekend. I think that it's going to be a very monumental weekend. I think that we're going to get a real signal of where this has headed. So, you know, I think the last thing that we should also say is just repeat what you said at the beginning. A lot of this is uncertain. And what's uncertain is like I think really the paint tolerance of Iran and how much how long they want to keep this. But what's not uncertain is some of the data we showed and presented today. You know, the fact that there it's a fact that Iran is trying to negotiate for other countries to transit the straight, which is strange. What's a fact is that their missile and drone attacks have a clear step function down from about 500 drones a day to 160 a day to 20 a day against GCC. Yeah, I mean, those are facts. Now, what's behind those facts? I agree with you. It's very uncertain. The fog of war is thick as our cousin Matt Gherkin would say. But I do think that we're going to get good information over the next three days about where it is at it. - All right, and we will be back to tell you about all that very soon listeners. And I for one hope that the monumental happening's happened on Monday 'cause please can we have a weekend? Maybe, yeah, I don't know. - I think everybody deserves for President Trump to have a nice vacation. We all deserve for him to get some rest. - We all hope that. - Trigger warning for those of you who love Trump. Here comes my TDS. - Uh-oh. - Cousin, the problem with that statement is that he's on vacation anyway. Like last Friday, he was on the golf course playing golf while he was doing all these things, okay? He can do both of these things at the same time. - That's true. - He's having fun. - I don't think that was TDS. That was just the great admiration for a man in his 80s with incredible stamina and ability to multitask at an intellectual level that's quite frankly unparalleled. I'm also like, I'm gonna, this is a backhanded compliment. He has one of the ugliest golf swings I've ever seen in my entire life, but it also seems to work for him. Like it's got a hitch and it's kind of whatever, but like he plays, it seems to be decent at golf, even in his age. I hope I'm as good at golf at 80 as President Trump is, but boy is that an ugly swing. My God. - I'm from the third world. I don't know anything about golf, man. That's just, you know? That's just not what we do. - I know, I know it's not, but you gotta be able to put on the mass so you can hang out with the masses. Okay, with that we'll-- - Never learn that. Yeah, all right, man. Thank you. (upbeat music)