Jacob Shapiro: Hello listeners.
Welcome to an emergency episode of Geopolitical Cousins Marco and
I drop everything to talk about the burgeoning Israel Iran War.
You can write to me at jacob@jacobshapiro.com if you
want to get to me and Marco with any thoughts or anything else.
Otherwise, uh, as you can tell by how fast I'm talking, I should slow down.
I've had a lot of coffee and there's lots to do today.
Take care of yourselves.
We will see you out there.
Marko Papic: I dunno how much time you have, but I have a full two.
I
Jacob Shapiro: I've got one, but, um, okay,
Marko Papic: let's crush it Deb.
Jacob Shapiro: Let's crush it.
We are live.
Go for it.
Marko Papic: Alright, Jacob, we gotta talk about, um, a serious situation that I am
afraid we didn't really hit on right away.
The Holly button has struck again, I. And we now all expect
Oklahoma City thunder to retaliate.
And we have to see what that looks like.
Jacob Shapiro: Marco, this is why we're cousins.
'cause I literally was thinking of introing the same way and guys, Marco
was so excited, he was like, no, no, I wanna do the intro this time.
And you did it so you could do that.
Joking.
I was gonna do that.
Yes, we are.
The pacers are up to one.
What asymmetric means are the thunder going to use now that Yeah, I'm, I'm
Marko Papic: totally none.
I mean, they're conventional, right?
It's the asymmetry that's winning anyways.
Okay, so we're here.
Emergency pod obviously because uh, Israel has struck Iran.
Uh, they have struck Iran's nuclear site to.
In singular sites.
Jacob Shapiro: Sites?
No, no, no.
They, they also, it's not clear how much damage they did at four Dough,
but it looks like four dough also, uh, incurred some damage as well.
Marko Papic: That's interesting.
Okay.
So, uh, more than just Naans, naans appears to be, uh, the one
that will strike like heavily but
Jacob Shapiro: heavily.
Yeah.
We at least have video of smoke.
We should say to the listeners, like, this is, it's Friday,
June 13th, 10:04 AM Central.
What is, is it 8:00 AM Pacific?
It's 8:00 AM.
Um, we're gonna push, we're gonna push this out as quickly as we
can, but this is the fog of war, so all the initial reporting will
probably turn out to be wrong.
Um, and some of the things that we talk about may even be overtaken
by events, like by the time that you're listening to this.
So like, take everything with a grain of salt.
The hardest part of doing analysis at this part of, in this cycle of
a, of a, of an attack like this is we don't even know what we know.
Um, so, but yeah, we'll try and parse through it.
Marko Papic: That's true.
And I obviously agree with everything you say, but, uh, I do sometimes feel
that my first gut reaction is the best.
Jacob Shapiro: Yeah, no, I think there's something to be said for, um, I mean, I
find gut and instinct is really important an an important tool in an analyst's, um,
Marko Papic: tool.
Well, I think you know what it is.
I think because as, as the situation develops, oftentimes the two sides have
an interest in, uh, flagging that they could deviate from their constraints.
Mm-hmm.
That they, that they can do more than what you would've thought
at the onset of the crisis.
But the truth is that they can't, you know, and that's why sometimes day
one analysis is better than day five.
Obviously, day 30 is gonna be better.
I, I, I don't, I don't disagree with that.
But the difference between day one analysis and day five analysis
is often very, very profound.
And it's because over the next five days, you're likely to have
your fate in your framework shaken.
Think about April 2nd, reciprocal tariffs.
What happened over the course of the next five days?
I mean, most people said no.
I mean, they're serious.
They're not gonna negotiate.
Look, Peter Navarro's on TV is saying they're not.
That's because both sides at this point right now, Israel, Iran, us,
everybody has an interest in, um, fronting in saying, hold me back.
You know, I got more than you think I have.
Anyways, uh, sorry to interrupt on that, but like, let's, let's go
over everything that's happened.
So, um, yeah, there's reports that Israel used, actually a ground incursion.
There's reports that there were, uh, actually some Israeli commanders commandos
that they have might have taken some of the scientists, uh, from what I
understand, there's two, uh, very high ranking military officials in Iran.
They have been targeted for assassination.
Uh, several, uh, Iranian military bases were struck.
Um, multiple strikes in Tehran.
I'm not clear what, other than of course, some of the residential areas where, uh,
officials were living like scientists and, and, and military policymakers and so on.
Naans, Fordo, not the bushy hair and nuclear power plant
from what I understand.
Um, of course that one is legitimately for civilian use, although everything is
of course part of the nuclear program.
Um, I dunno, am I missing anything else on Israel's?
Oh yeah.
200 fighter jets were involved.
Doesn't seem that refueling, uh, planes were involved, but they probably were, I
think, uh, US has delivered one to Israel.
Jacob Shapiro: Yeah.
Um, there's a, there's a lot unclear about that.
Um, well, so a couple things.
Um, the first is, um, so we have some confirmed deaths this morning.
So the Chief of Staff of the Armed Forces, Mohammed, I'm gonna, I'm
not a Farsi speaker, I'm an a I'm an Arabic speaker, so I apologize for
butchering these names, but Major General B Bhe, I think is his name.
Then you've got General Hussein Salami, not Soleimani Salami, who is the
new commander in chief of the IRGC.
He is gone.
Then you've got a Deputy Commander of the Armed Forces, um, a head of the airspace
unit of the IRGC taken out, um, one, at least one politician has been taken out.
Um, Ali Shahani, who is an influential Iranian politician.
He's a close confidant of the Supreme leader.
He was overseeing the nuclear talks with the United States, which is kind
of crazy when you think about it.
Like not just an assault on Iran, but an an assault on the nuclear deal.
And the negotiations itself on, on
Marko Papic: diplomacy itself.
Jacob Shapiro: I know, and like some nuclear scientists taken out as well,
there has been some video on social media of Israeli refueling airplanes.
It's not clear whether they're legit, it's not clear whether it's
over Iranian airspace or over Syrian airspace or over Iraqi airspace.
Uh, Marco, I dunno if you remember Sim Tac though.
He was on my podcast a couple weeks ago and he talked about how when Assad fell,
one of the things Israel did was it very quietly bombed the shit out of Syrian air
defense so that Syria skies are basically open to Israel if it wants them to be.
So part of me is thinking maybe what made this a little more realistic than
even I would've given Israel credit for, is maybe they're able to refuel
over Syria or maybe they're less worried about incurring things over Syria.
Um, and then the other, the other part that I would, um, add to your summary
of what happened is the sort of.
I, I, I don't wanna say strange, but the US role in all of this, because the
initial response last night when you and I were texting was from Marco Rubio.
That was basically Israel took unilateral action.
We are not involved with this.
Iran should not attack us.
And then you wake up to Trump on truth socials saying, I gave Iran a chance.
Uh, they could still make a deal if they want, but there's more
coming and Israel is like gonna, you know, basically destroy them.
Um, and then you had Axios Wall Street Journal reporting this
morning that, that not only.
Um, is, is the United States okay with this, but that the United States
knew and that the United States participated in the deception to lull
Iran into a false sense of security by telling them it's not gonna happen.
There's gonna be more time here.
United States is not for this.
I don't know quite how to run that down.
Um, I think you're also right to point out that, um, there are multiple Israeli
security sources that are talking about the Mossad being on the ground in Iran in
much the same way that Ukraine was on the ground in Russia with their big attack.
So, you know, precision guided.
Weapons located next to Iranians, surface to air missile systems, um,
drones, uh, actual commando units going after scientists, things like that.
Um, and I think part of that, there, there's two parts of that.
Number one, and I, I was just talking to an Iranian security
expert for, for my other podcast.
Um, it's a sophisticated social media and publicity campaign too, because Israel
is all over Persian social media, putting out things about how this is an assault
on the regime, not on the Iranian people.
That the, the Iranian regime has been attacking you.
Israel is attacking this and sort of sowing those seeds of doubt.
Um, but yeah, obviously a huge intelligence operation that
had to come forward there too.
And then the last thing I would just add to the summary, and I'm curious,
I mean, I'm curious for your takes on all of this, um, uh, Marco,
but in some ways, one of the most.
Blunt statements about what Israel has done thus far.
'cause if you like the French, I dunno if you saw Macron's statement,
he was like, we condemn Iran and its nuclear program, like relatively softy
from some of these other countries.
But Saudi Arabia, I will quote, the Kingdom of Saudi Arabia's, ministry
of Foreign Affairs expresses its strong condemnation in denunciation of
blatant Israeli aggression against the brotherly Islamic Republic of Iran,
which undermines sovereignty and security and constitute a clear violation,
right, of international law and norms.
So the Saudis that's at least rhetorically, like slapping the
Israelis on the wrist, maybe behind the scenes Mohammad bin Salman, is like
popping the champagne on the yacht.
I don't know, but, uh, yeah, that, that's at least my list of things.
Also, to add to what you said,
Marko Papic: well we should probably start with the last one.
I know that our listeners might think that's bizarre, uh, to start with
the Saudi statement, but the Saudi statement is the most important one.
I mean, if you're listening to this and wondering what's gonna happen
to your retirement, what's gonna happen to the global economy, it's
really the Saudi Iran relationship that matters more than anything.
I've said many times.
Um, by the way, I think our second podcast was about this.
Yeah.
It was about war in Iran.
Um, so the, I've said many times this year and last year,
Iran and Israel can go at it.
They can do whatever they want to each other, and nothing will
happen to the rest of the world.
So this is a very important point.
Iran and Israel can have a full out war for the next two years, and
it may be like a tree that falls in the forest that nobody hears.
Jacob Shapiro: Tree falls in the oasis or the desert, I don't
Marko Papic: know.
In the desert.
Yeah.
The date tree falls over.
So why, why?
Because, um, look, Iran has to, uh, close the straits of MOUs for this to be taken
seriously by anybody listening to this.
I'm assuming that Iranian regime is not listening to this.
You know, you guys should take this seriously.
Israel is going at it.
Um, but other, other than that, I mean, look, um, the way that this conflict
articulates itself in oil prices, in gold prices, in stock prices is that Iran
has to close the straits or for moose.
And if the Houthis can close the Red Sea, you know, uh, if the Houthis can
do that to the Red Sea, I mean, Iran could do that to the Straits of Remus.
And I just wanna explain this because this is kind of complicated.
Iran cannot really conventionally retaliate successfully, at least
against Israel or really anyone.
Uh, it can, you know, shoot some ballistic missiles and drones.
You know, that's unfortunate for people on the receiving end, but it's not tragic.
Jacob Shapiro: Well, and, and to, to that point, apparently Iran
sent its first salvo of drones.
Israel warned its population to get ready and then sent out a, we got them all.
Don't worry, you can go back to your life.
So, I mean, just like laying it on
Marko Papic: for a while.
But you know what, that also shows multiple things.
Jacob.
It, it means that Iran did not have a plan to retaliate, like ready to go.
Like, you know, you know, this is one of those things, like this
is something that might happen.
Like I live in California, we may have a huge earthquake.
I have rubber boots, I have water, I have supply of food, like I have flashlights
this, like, if there's an earthquake right now, my family and I are now
like, oh, well let's send some drones.
You know?
Jacob Shapiro: I don't know, like,
Marko Papic: no, like why isn't there a ballistic attack?
Why isn't there, you know, why isn't there a huge salvo?
Like, why are they not ready?
Instead, it's like some hundred drones.
Like it's, it's very, Imma amateurish, but let's leave that aside.
I mean, look, the point is, while Iran's military is incredibly dilapidated.
There's an asymmetry to it in that closing, a shipping lane doesn't
require that much sophistication.
You can do it with drones.
You are attacking civilian tankers, okay?
They're undefended.
So you can, you can really make it difficult for ships to transit
with very low sophistication.
Houthis have proven that, and so while Iran has no ability to conventionally
fight a war with really Israel or c conventionally to threaten American
forces in the region, they just don't.
They have enough sophistication to close shipping causal oppresses to
go up, but they haven't done it.
Why?
Because, because of two reasons.
One, that will invite massive retaliation from the United States of America,
the kind that turns you into a parking lot.
Iran has no way to defend against that.
So it's kind of crossing the Rubicon that is the nuclear option.
Actually, it's not nuclear weapons.
It will be closing the streets of, once you do that, you know it's fair game.
At that point, even China's like, Hey America, please can
you turn Iran into a parking lot?
So that's the first issue.
The second issue is that it would tip the scales of conflict in the
region so vastly against Iran because it would invite Saudi participation.
As you point out, Iran is holding on to some very nice
juicy assets for the long term.
One of them is Iraq.
It's holding on to Iraq because the Saudis effectively seeded Iraq to Iran
when they negotiated their 2022 Deante.
And so there's a quid pro quo.
Saudi Arabia said to Iran, you can have Iraq, you can control it
through your proxies, political and militant, but you leave us alone.
No more drone attacks against our energy facilities.
And notice that this Detant has held from October 7th, 2023 onwards.
It's held through the Iranis Israel missile strikes in 2024.
They were unprecedented and the people thought would cause oil
prices to go through the roof.
They didn't.
It's held throughout the Houthis who are allied with Iran, not proxies,
allied throughout the HTI drone campaign against shipping in the Red Sea.
Notice how all the drones went south, as if their joystick controls
are stuck in the south position.
None of them went north to Saudi facilities or Persian Gulf.
Why not?
I mean, hey, Houthis, if you wanna make a big splash about what's going on in
Gaza, shut down the streets of ous.
It's kind of equidistant to the Red Sea.
So why haven't the Houthis done that?
Because Iran told them not to.
Iran and Saudi Arabia have a Deante, and it's a very important
one, and it's the most important part of this story to today.
It's not about Israeli capabilities or cool special forces or the
next movie that will be directed about like their incursion.
Like everyone's like obsessing about silly little military stuff.
The most important question is what will happen in terms of Iranian retaliation
and will they rip off the bandaid?
Will they cross the Rubicon, whatever analogy you want, and
attack Saudi facilities and shipping through the per of Gulf?
And my answer is no.
And that's why that Saudi statement is so important because the Saudis
are saying like, look guys, like this is between you Actually,
no, they're not even saying that.
They're actually saying like, yo, Israel, Israel is the bad guy.
They're straight up saying Israel's the bad guy.
Yeah.
Uh, which is not that much of a shift.
I mean, they've been saying that really since October 7th, uh, and
throughout 2024, although they did participate allegedly in shooting
down some projectiles that were flying over Saudi territory.
And, you know, uh, the way they justified that to Iran is like, Hey man, like.
You don't need to fly over Saudi Arabia to hit Israel, you
know, like, look at a map, bro.
Like, so please don't, you know, like, like, yeah, we're
gonna defend our airspace.
Like that's, so that wasn't really, like a lot of people in the West
thought that this was pro Israeli.
It's not, uh, they're defending their airspace.
So I think this is why Jacob, my hot take on this is Iran does have the
capability to disrupt shipping and cause oil prices to go up a hundred dollars.
But there's two things that if they do that, there's two bad
effects that will happen to them.
America, American military is not as hot as people think it is.
But let me be very, very clear.
There's one thing that the United States of America does better
than any country in history.
I mean, and, and not better.
Like it's number one, it's like number one, 2000.
Nobody pulverizes you from 30,000 feet like the US Air Force, when America
doesn't care about in invading, when America doesn't care about putting,
uh, boots on the ground when it doesn't care what you do to your own people,
when it doesn't care about turning you into Wisconsin and making sure
you have like Wendy's on every corner.
When America just wants to flatten you, it's, it's unrivaled.
And so if Iran crosses that Rubicon, it will be punished.
And then the second issue is that if they cross it, if they get on the bedside
of Saudi Arabia, they tilt the regional balance vastly against themselves.
Basically Saudi resources, but also Saudi intelligence capabilities in Iraq.
Will they be activated against Iranian interests?
And then, you know, it's really game over for a little semblance
of hegemony that Iran still has.
Jacob Shapiro: Yeah.
Um, well first of all, you uh, you betrayed your lack of knowledge of the
geopolitics of the Midwest because it wouldn't be a Wendy's on every corner.
It would be a Culver's.
And I hope that the five Wisconsin listeners that we have really appreciate
that call out from yours truly.
'cause I've eaten enough of those cheeseburgers and I'm on a perpetual
quest as a Jew to find the greatest cheeseburger in the history of the world,
which is, you know, you as you know, funny for lots of different reasons.
We can get into that another time.
Um, well, I, I have two or three things I wanna say in response to what you said.
'cause I, I can get along with most of what you said, but I, I, I wanna,
I wanna think about it also from a different angle, which is, um, it seems
to me analytically, or one of the things I'm trying to parse is, was this an
attack on Iran's nuclear capability?
To set it back or to wipe it out, or is this really an attempt at regime change?
Because Israel has also said, look, this is not a one day thing.
We're ready to go for the next two weeks, and the Israeli population
is ready to endure whatever it has to do for the next two weeks.
We took out.
All those guys that I mentioned in the first wave, you also
saw what we did to Hezbollah.
Like the unsaid thing there is supreme leader ham hamani.
Where are you?
Do you feel safe where you are President of Iran, where are you?
Do you feel safe where you are?
You shouldn't.
Um, and this is the other thing I, uh, that's sort of part of this,
which is, um, you know, Iran's military dilapidated fine, but this
is not just about an inability to, um, to have conventional offensive.
Counter attack capability.
It looks like Israel has just decimated their ability to defend themselves.
Yes.
I mean, at, at least here on June 3rd at 10 o'clock in the morning like this, I,
I don't wanna say it's a little cavalier for me to say that Iranian skies belong
to Israel, but Israel is hitting whatever it wants, however, often it wants with
fighter jets that I know can't, like, you know, these are long distance flights
that the Israelis are having to take.
So unless they're secretly going off a carrier, a US carrier, or
out of Azerbaijan or something like that, aggregators, I'm not
saying that's what happened.
I'm just saying unless there's some secret here we don't know about.
Like, you know, they're going along, along sort distance.
Marko Papic: Don't think we're, I don't think we're big enough
to be aggregated, but Jacob.
Couple, well, we, we
Jacob Shapiro: might be after this times of crisis or when,
or when people listen in.
But the reason I bring that up is because, um, well, it's twofold, number
one, like you're right, as long as this Iranian regime stays in place,
but what if, and it's a huge gamble and I'm not sure they're gonna pull it off.
What if this is the end of the Islam?
Yeah.
So public I would have to, and that's a whole big thing.
And then the second thing I just wanna say, and then you can take the
wheel, is, you know, you said the nuclear option was a straight of whom.
This now gets to the question of how far advanced is Iran
with a nuclear weapon itself?
Because if it's advanced enough to where.
The supreme leader was just saying, don't do the final screws, because I want to
be able to have this negotiation process.
But if it could be very simply just sort of, Hey, let's complete
the process really fast and have a bomb, the thing that strikes me is
Iran's back is against the wall.
Their, their conventional defenses have failed.
They have no legitimate counter attack that they can go to any attack that they
do on, you know, Persian Gulf shipping.
Anything else like that is gonna bring down the goat of long-range
bombardment on them, or is gonna break the Saudi thing, which is the goat.
Yeah, it would be really nice to have a nuclear deterrent right now.
This is the whole reason they want the nuclear deterrent.
Their proxies, by the way, are also gone.
Hezbollah's sitting it out.
Houthis know where to be found.
They're not gonna affect this.
So if you could have a nuke, like now would be the time to show it off
and say, okay, if you keep coming at us, like here's a dirty bomb for you.
Like, we will go this far.
Like I, I was sort of having that crazy thought that I was as I was
thinking about all that anyway.
No, that's not crazy at all.
Marko Papic: No, that's not crazy at all.
So, uh, first I think, um.
I don't think regime change is possible, like Israel has not been
able to do regime change in Gaza.
Why would it be able to do it in Iran
Jacob Shapiro: if it can assassinate the Hezbollah leadership?
And if let's say they take out the president of Iran and the Supreme leader,
Marko Papic: I, I think that that just replaces them, right?
I mean, we've seen this story play out in with Hezbollah and Hamas as well.
Syria.
Jacob Shapiro: Yeah.
But, but those are like little JI groups that hide in bunkers.
This is a state that governs 80 plus million people, a large swath of whom
want nothing to do with these guys.
Marko Papic: So, but isn't Well, yeah, I mean maybe, you know, um, there is also
the circling of the wagons that happens.
I mean, while vast majority of Iranians don't want to follow their leadership,
they're also anti-Israeli, you know, so.
Mm-hmm.
It can backfire and the difference the counter that you should, you should.
Send at me.
The country is Syria.
Right?
But Syria, Syria was a country.
It's a great example of what happens when you completely isolate yourself.
Uh, Syria had Turkey against Assad.
You had Saudi Arabia raid.
I mean, Israel, Turkey, Saudi Arabia, and the United States, America we're
all on the same side, you know?
So that's, that's a good example of what happens, why you
don't wanna isolate yourself.
There's also actual militants on the territory of Syria.
So this isn't, I, I, I've heard this regime change theory a lot
today, and I just, you know, I don't think that that's where Israel is
able to go, but it doesn't matter.
Look, let's, let's, let's array some of the things that you've said.
Um, in terms of military capabilities, Israel has some refueling capacity.
Boeing seven oh sevens, they haven't received the kc uh, uh, kcs yet.
Uh, which, uh, they, they've had an order since 2020, so, uh, that
hasn't been delivered actually yet.
So they have some domestic ones, but it's not.
It's not as, uh, sophisticated as what the Americans would give them if they
actually delivered, uh, the US airplanes.
So they, they're gonna have to do this in waves of fighter jets.
Mm-hmm.
The problem with fighter jets is that they're, uh, vulnerable to air defenses.
And this is where your point is so critical.
Where is Iran's vaunted?
S3 hundreds?
They've clearly been disabled.
Last year's attack that Israel performed, if you remember, it was a
single strike and everybody was kind of confused what the single strike was.
It apparently targeted the Raider installations for the S3 hundreds sending
a message to Iran that we can blind you.
So, um, it appears that that's what's happened.
So it's fine.
Like Israel now has control over skies, as you said.
The problem for Israel is that its tools for navigated Iran's skies are
still, uh, limited attacking with fighter jets, there's a problem.
You have to, they have to be fully loaded with fuel.
Which means they cannot carry as much ordinance and the ordinance that they
carry is limited, particularly because the US as is now very much known and has been
known for decades, the US has not provided Israel with the bunker buster technology
that's required to fully damage Fordo.
Fordo is 40 meters underground, some say half a mile.
Uh, I didn't know that.
I thought it was just 40 meters.
Doesn't matter.
Many of the tunnels are 90 degree angles.
You know, bunker buster technology can't deal with that.
You need what the Americans have, which, which can completely destroy much
deeper, much wider range of penetration.
That's not what Israelis have.
So, um, this attack ultimately is not going to completely
destroy Iran's nuclear program.
I think that there's limits to how much Israel can do, and that's why
I think that ultimately we have to also consider that both sides
are limited in what they can do.
And that's where the US is so important.
In a way Israel wants to draw Americans in.
This is all, this has been for a long time a theory like what if Israel just done
ki does kind of like a halfway attack, hopes that Iran retaliates in a way that
matters to America, like attacks the base.
The air base in Qatar attacks the Fifth Fleet headquarters in Manama, Bahrain.
You know, the military bases in Iraq are, I think, fair game at this point.
It's fine.
Iran has attacked them before many times.
Uh, but if Iran retaliates against the US or shipping interest in the streets
of MOUs, then this attacks from a strategic perspective for Israel is a win.
If it doesn't, it's kind of like not a win.
In fact, it probably accelerates the nuclear program, as you pointed out,
um, where Iran needs that breakout capacity as soon as possible.
Jacob Shapiro: Yeah.
And I mean, and maybe the precedent was already set.
Like I can, I can hear an Israeli strategist telling me I'm gonna, I'm a
weenie for what I'm about to say, but I mean, this is a preemptive strike.
Uh, while the, while Iran was negotiating with the United States like, and yes,
Israel is from a, from a technological capacity, military capacity is so far
advanced than all of the rivals that are around it in the Middle East,
that nobody can compete with them.
But that's not always gonna be the case.
Like we, we did our geopolitical power ranking a couple of episodes ago, and
I left Israel off the top 20 because I said, I mean, they're there today, but 20,
30 years from now, like, we don't think that some of these other countries are
gonna be able to develop either nuclear weapons or drone technologies, or do
the things that Israel is doing to Iran.
And now Israel's done it first.
So, you know, like if, if you, if you are Iran, or let's say you're Turkey or some
jihadist group in the future, like the precedent has, al has already been broken.
So I don't know, maybe people don't care about precedents, but the continued
breakdown of international norms, which is also part of that Saudi
statement, like the, the rules are gone.
Like, it's okay, fine.
Like go, go like bomb Iran.
There's gonna be no like consequences, like nobody's going to punish you for it.
And well Iran, nobody's gonna see like,
Marko Papic: yeah, Iran if they
Jacob Shapiro: can, but it's
Marko Papic: up to Iran to punish, you know, like, and if they can't
then they probably should have, uh, not supported Hezbollah us.
I mean, you know, like these are consequences to what Iran does as well.
Yeah.
And that's where, that's where I think, you know, you can understand this attack
by Israel, even if they cannot actually hurt fordo, which is where all the
enrichment fci, uh, all the important centrifuges are for the enrichment.
So I, I don't think that Israel has managed to overcome technological.
Deficiencies that it has.
Of course, the nuclear program is also more than just centrifuges.
It's
Jacob Shapiro: people, it's also humans.
They're going after people and they've been going after people for a while,
Marko Papic: for a while.
That's, that's all, that's, that's fine.
You know, like, I mean, but here's, but here's the issue though.
We also have to consider domestic politics of Israel as well.
There's clearly pressure on Netanyahu, uh, to basically, uh, you know, continue with
aggressive foreign and military policies, whether in Lebanon, in Gaza or Iran.
Um, he can't survive without that.
There has to be a perpetual war for him to stay in power.
And the reason I say that is not to criticize him.
I mean, God bless him.
He can do whatever he wants, you know, that's, that's his, that's his choice.
The issue though is that he does over the long term, it,
it doesn't, like his domestic political logic is likely not this.
It, it is not as beneficial for Israel in the long term.
And that is something I, I would point out as well.
I mean, if oftentimes domestic political logic will impede the geopolitical goals
over the long term, and I think one of the, one of the problems here is that,
um, it's not clear to me that regime change would change anything for Israel.
Iran, Iran.
In Iran.
Yes.
And, and, and, and I think, I think any country in this region is likely
going to want to have a nuclear weapon like after this attack.
That's,
Jacob Shapiro: yeah.
I mean that, that I think is already true.
I think you're underplaying the potential significance of regime change.
And I actually think we're seeing this play out right now with Syria.
I dunno if you saw like a week or two ago, Netanyahu basically said We want
the United States to broker peace talks with the new Syrian government.
And Syria seems to be open to it.
Is, uh, I mean, Israel's wanted, you know, some kind of, you know, Jordan or
Egypt level relationship with Syria since literally the 1970s and hasn't been able
to get it because Assad was, you know, sort of sticking to those old things.
So if you can, and you know, now Syria is led by some former Jihadists, uh,
and like, they're gonna be willing to sit down with Israel to reach some
kind of agreement, probably, yes.
'cause they don't want to keep getting bombed by their
more sophisticated neighbor.
They're gonna play a longer game going forward.
But I think if you, if you could take down like the theocratic, you know,
thuggish element that runs Iran, and if you could get secularists and
power, I mean, that would be pretty powerful for, for Israel, I think.
I think that would be a really big deal.
Marko Papic: I think, I think that is the conventional view.
I think that is the Israeli view, and I think that, uh, in a way
that's going to probably allow the regime in Iran to survive longer.
Because again, it's not Lebanon, it's not Gaza, it's a place,
it's a very large place.
You can hide in a lot of different places.
The idea that Israel is gonna be able to take a, I just don't see that.
But you know, I could be wrong o obviously.
Jacob Shapiro: Well, I don't know, but like, let, let's say that they,
let's say for the sake of argument that they can, like if, let's say
they assassinate the supreme leader and the president in the next strike.
I'm not saying it, you find other.
Well, do you find other ones or do or or do people rise
up and say, we're replacing?
'cause there's already factions waiting for this, waiting to fight
it out when the supreme leader dies.
Like there's internal incoherence Yes.
Within the Iranian political establishment already.
Marko Papic: He's very old.
Ands sick.
Yeah.
Jacob Shapiro: And you know, the, and he's also been trying to, you know,
put his son forward to replace him, which is like, wow, like the Iranian
revolution only took 40 years to die.
Like, the whole idea was we're not gonna have monarchies in the Shah
passing things down to his stupid son.
Like, okay.
So now the Supreme leadership passes down, like through hereditary means.
Um, which, which has gotten a lot of pushback there as well.
But also think back to the Rouhani government and how Rouhani was trying
to take the reins away from the IRGC and he got his sort of hand slapped on it.
I was also, I was talking to this, uh, Iranian security expert
before we got on, and he talked about to him one of the most.
Impressive things about what Israel was doing was a sophisticated
social media campaign in Persian going after Iranian social media.
And he said there were basically two like feelings on Iranian social media.
One was, this is not good.
We don't wanna be attacked by Israel.
You, you know, sort of rally around the flag thing.
But the second aspect he said was there was also this very real undercurrent
of, well, we don't care if the IRGC commander gets got, he was killing
young Iranian protesters in the streets as recently as a couple of months ago.
And this supreme leader guy who's trying to basically put the Shah back on top
of us, except with Shiite theocratic, you know, antiquated ideas, eh, like
would we really be that sat like, yes, we'll have our problems with
Israel, but like there's also like some level of, okay, like this is okay.
Like, it's not like we love this regime that much and that there
aren't internal tensions there.
And for, for Israel, if you could just, like, I'm not saying you're
gonna make Iran your best friend, but if you could at least get it from.
Hey, you're the great Satan.
We're gonna wipe you off the face of the earth to little.
Hey, we're not friends.
Let's have negotiations.
Little Satan.
Let's be,
Marko Papic: let's be clear.
But listen, yeah, little I hear, I hear all that.
It's just that that's just not the way the world works, though.
It does in the long term.
But like, I would have to dig deep into the historical bag to
find a case where something like that happens during the conflict.
Jacob Shapiro: You don't think Syria qualify?
I guess Syria was a longer thing over
Marko Papic: time.
It just doesn't, it's been like, first of all, Asad didn't have control
over more than 50% of the territory.
It was, there was a civil war, there was a militant group.
Um, it's not like Israel caused regime change in Syria.
You know, they aided it.
They were great participant in it, but there was clearly a civil war since 2011.
Jacob Shapiro: So, so what about, what about Japan?
1945.
Marko Papic: Okay, fine.
Yes.
Great example, Jacob.
I will, I will concede once Israel nukes Iran and invades it with a million men.
Yes.
So this is, this is my point.
Like, but but listen, but listen, here's, here's a counter.
Here's a counter.
Mm-hmm.
They kind of both supports my view and your view.
1999 NATO air campaign against Serbia.
Hmm.
Okay.
I can tell you it definitely did not in the moment incite and any anti
mil sentiment, even pro-democracy, liberal people in Belgrade were
standing on bridges with little targets saying to Nate Obamas right.
But basically 12 months later, you know, when you took stock of the situation
and said, what was all this for?
There was the revolution in October of 2000.
Yeah.
So my, but, but that's, that's a different situation too.
I mean, like, you know, Serbia took on the entire alliance of nato
and NATO can do a lot of damage.
Israel can't, Israel cannot do that level of damage.
So my, my question, unless,
Jacob Shapiro: unless it nukes them,
Marko Papic: right?
Well, yeah.
Okay.
Yes.
Uh, but, but my, my point, my point is that even in that situation, it took
some time before people took that stock of like, Hey, what was this all for?
So I'm not saying that regime change can't come as a result of this.
I just think it will be sometime later.
This is one of the many moments in Iran's story that lead to the
realization by the vast majority of the people in that country.
Like, this is stupid.
Like, we can't, we can't even retaliate against Israel.
So what's the whole point of all this?
You know?
And I think that that's, that's possible.
I just, I, I would rather kind of focus, I. Because it's a more of a longer term
team and it's not gonna happen overnight.
Mm-hmm.
Um, Iran is a more sophisticated political system than like Gaza or Hezbollah.
And I, and I just feel a lot of commentary today.
It's like if they just put some page of bombs in pagers, you know, like, no, it's,
it's gonna be more difficult than that.
Nonetheless, for all their sophistication, size, strength, inherent kind of
geopolitical value, like their S3 hundreds are clearly completely useless.
Their air defense system, the surface to air LS three hundreds
they got from Russia fairly sophisticated, has not ha made a dent.
As you pointed out, Israel can pretty much fly in and out, you know, it can
be just like a routine flight for their fighter jets, you know, across the region.
Um, and that's a real problem because what do you do at this point?
They're kind of like North Korea, Iran is kind of like North Korea,
and let me explain what I mean.
There's very few ways to retaliate in limited way.
Yeah, you, you either, you know, fly some drones to Israel,
which Israel just destroys.
Or you go for broke and you shut down the streets, or for most, and then, yes, we
should talk about regime change because once the US starts using something that
Israel does not have, which is long range strategic bombers, you're cooked, you're
completely and utterly cooked, and at that point you are risking regime survival.
You can block off the straits of ramus while done, you know, because
civilian shipping, again, can't really evade anti-ship cruise missiles,
which Iran has, can't really evade.
Even little dinghies, you know, little zodiac boats with like a dude with
a, with a shoulder launch surface to air missile, like whatever, like,
you know, it's, it's a real problem.
Jacob Shapiro: Yeah, well, but, so I, I think that survive an important question.
Survive.
I think that's an important question that you just landed on.
So let me rephrase it back at you because one of my clients this morning
asked me, you know, what are American options today after what's happened?
And I said, okay, there's basically four they can join in and completely
wipe out Iran and lead to regime change.
Like that's one, um, they can covertly support it, but not
sort of publicly be there.
So try and, you know, let, let Israel take as many licks as
they want, but not get involved.
They can stay out of it.
They can be truly isolationist.
And, you know, the, the Rubio statement or.
Uh, maybe the donnall is angling for his Nobel Peace Prize.
They come in as the great peacemaker.
They say, we have made peace between Iran and Israel.
We're gonna tariff both of you unless you stop throwing the missiles
and the drones at each other.
Sit down against the table and figure this out.
I'm asking you the question there is, where do you think the
United States goes from here?
Do you think the United States wanted this and like, wanted the
excuse that Israel's opening for it?
Or do you think that the United States was like, okay, we'll use Israeli
aggressiveness to get to what we really wanted, which is a deal with this regime?
Marko Papic: I mean, I trust President Trump where he, when he tweets, sorry.
I do.
So I don't think that he wanted this, 'cause he said
that, and that is a problem.
That's why his tweet, that's why his statements today are so aggressive.
Marco Rubio's statement when this happened was very terse like,
no statement about supporting Israel's rights to self defense.
Mm-hmm.
Zero, zero.
It was like, Hey, America was not participant in this.
Jacob Shapiro: Yeah.
The, the French statement was friendlier towards Israel
than Marco Rubio's statement.
Marko Papic: Right.
And then the next day Trump is saying like, aha, I told
you so better make a deal.
And it's like, eh, I don't like, that's bravado.
Right?
Because this is embarrassing for the US actually.
It shows it can't control its vessels, you know?
And Israel is effectively saying, we're not your vessel.
You know, we're gonna do whatever we want.
And that's
Jacob Shapiro: you.
You don't believe the, the conspiracy theory that actually, like the United
States wanted Israel to do this secretly,
Marko Papic: one of, one of the greatest Salt Park episodes
is the one about nine 11.
It's when the boys find out that nine 11 was an inside job.
Mm-hmm.
And.
They pursue this to, to, to its core and George W. Bush and the cabinet
basically imprisons them because they find out that it wasn't an inside
job, but they find out that the US government is propagating the myth.
The day blew up the Twin towers.
And so the, the boys confront George W. Bush in the episode and they're
like, why are you propagating the rumor that you did this?
And George W. Bush says, an incredible statement.
And by the way, if you're a conspiracy theorist, you have to watch this to
cleanse yourself of that stupidity.
And George W. Bush looks at the little boys and says, if people
don't think that we did it, they'll think we're incompetent.
If they find out that a bunch of dudes in caves.
Destroyed the Twin Towers in New York City.
They'll think that we, the US government is incompetent.
So yes, we're propagating these rumors.
So this is South Park.
Jacob Shapiro: South Park is truly the brothers car of, of our time.
This is basically the grand inquisitor updated with to, uh, you know, when I
was doing my things that are happening
Marko Papic: right now.
Listen, Jacob, when I was doing my PhD, I, I kept referencing South Park so
much in my, uh, PhD philosophy class.
Yeah.
I had to take philosophy, you know, for political science, PhD. And, uh, my
professor was just like, can you make me a DVD of like the greatest hits?
'cause clearly I've missed this in my, in my academic studies, like, so I agree
with you, but, but here's what I'm saying.
Of course Trump is gonna say, and of course the, the media machine
in America is gonna say like, oh, we knew ha ha, yeah, we've been
in on this planet from day one.
That's the whole thing.
We're not incompetent.
Our ally, Israel didn't just do something behind our back
embarrassing us, quite frankly.
'cause we were about to meet with Iranians on Sunday.
Yeah.
So I, I believe none of these rumors, and I don't care.
Like we could have Marco Rubio on this podcast.
You'll be like, no, Marco, you don't know.
I'm like, shut up.
I do know.
Fuck off.
Of course.
Yeah.
Oh yeah.
You guys were like in on it.
No, you weren't.
Jacob Shapiro: You got spoiled.
That would be fun actually, to have to have little Marco.
And you can be big Marco.
I guess.
Marko Papic: I guess I could, I mean, by, I guess so.
I don't know.
I, I don't think he's that little.
I think that's unfair.
But listen, here's my point.
Of course,
of course.
They didn't know.
They got caught completely unaware.
So what do you think is gonna happen the next day?
Like, uh, no.
They're gonna be like, yeah, we were, of course we knew, like, remember
what Trump was like, heads up.
Heads up.
Well, and I, and I think Trump, we do
Jacob Shapiro: Trump to, to, you know, a point we've made over and over
again, like Trump has many faults.
He's a master at social media and positioning.
Yeah.
He's positioned, you know, the United States to make it seem like he knew
what was going all along and this was good, but like now he has a choice.
Does he use that to, at least in his truth, social post, it was
about all right, like you have to negotiate or else you're gonna die.
Well,
Marko Papic: the problem with that, you know what the problem with that is?
What the problem with that Jacob is, if I'm Iran, I'm like, bro, come on man.
I just listened to geopolitical cousins and Marco is right.
You didn't know.
And if you don't know, how can you guarantee to me that you can stop Israel?
If I make a deal with you, deal with you, oh, okay, cool.
We're gonna make a deal and I'm gonna get to keep my nuclear
program for civilian uses.
What if it's not there?
Because Israel, your vassal state keeps bonding me.
Like if you cannot control Israel, so this is the problem for the
US if they cannot control Israel.
How can they make a deal with Iran?
And so that's why this is not just a, a, a funny little question,
you know, where we're like, Hey, like, hey, what did America know?
Oh, watch South Park, you know?
No, I mean, it's actually very critical to this whole situation.
Israel is fronting as if they're gonna continue this
operation for the next two weeks.
That's what Netanyahu said.
This is not a one day operation.
And the US is supposed to meet in musket in Oman, with Iranian officials.
And by the way, the, the, the hilarious part of this is us,
is like, we're still coming.
Jacob Shapiro: Yeah.
And the Iranians were supposed to come, might be dead, they might not be alive.
How
Marko Papic: do I get to musket, bro?
Like I, if I get in a plane, am I gonna land in Oman?
Like, you know, like there's, Israelis are buzzing around me, like hornets.
I'm gonna get in the plane and go to Oman.
You can't, you don't know what's going on in the region, America.
This is what I, I'm now being Iran, right?
Like America, you don't, you have no idea what's going on here.
You want me to get on the plane and cross the Persian Gulf and land in Oman?
In Musco?
Yeah.
So I can meet with you.
For what reason?
You can't control Israel.
Why would I continue these negotiations?
And this is where, this is where what Israel did is truly pernicious
from an American perspective.
And I do think so when we think about this from a profound level, like
what's profound about this attack, it's the break between Israel and the us.
I don't buy for one second.
The US was aware of this operation for weeks.
Now there's a talk how it lulled Iran to sleep by continuing to negotiation.
Shut up again.
Watch South Park episode.
This is America just trying to make itself look like they weren't completely
unaware of what was gonna happen.
Jacob Shapiro: No, now it is.
I don't mean, I think, I think credit to the Israelis, like there was a
psychological warfare aspect where they lulled the Iranians to Yeah,
Marko Papic: for sure.
I, I, you know, obviously, but they loved Americans as well, and I think
the problem now is how can you be a credible negotiator, you know?
Jacob Shapiro: Mm-hmm.
Yeah, I have, I have two lighthearted points and then a more serious one.
The first is when you were talking about Israel, like wanting to bring the
United States in, it's ironic because that's basically the reverse Al-Qaeda,
like that was Al-Qaeda's strategy, like bomb the World Trade Centers,
and then you're gonna invite a bigger response and then people are gonna
overthrow the regime that you don't like.
So funny to see the Israelis taking a pic, uh, page out of Osama's, uh, book.
And then also have, have you, has it struck you that like Israel is
the real MAGA actor in the world?
Like in the last week they've bombed the shit out of Iran and have arrested Greta
Thunberg and embarrassed her and then like, you know, sent her back to Sweden
without her lunch money or whatever.
Like, I think they're the ones that are really doubling down on this.
But the, the deeper point I wanted to say was, and this is the part that makes me
nervous about what, what happens next?
Um.
Because I, I, I think we're in agreement, I think on most of the things that
we talked about, but it seems to me that Iran's back is against the wall.
They have no good options.
They're screwed.
And to your point, they can't, even, the negotiation with the United States
is not something they can credibly do.
To your point just now about Israel, you can't control, you
know, your dog is off the leash.
Like, there's this, this Israeli actor that's just gonna keep bombing us.
Why should we make any deal?
And it seems to me that if they're truly desperate and if they have
any nuclear material to go with, or any kind of last ditch effort, like,
can they just really sit, maybe they sit there and take the punishment.
Maybe I'm like underestimating that as a potential choice.
It, it
Marko Papic: depends.
I mean, yes, I, I hear you.
I think it depends what the US now offers them and how much, uh, you
know, look, I think, I think that this was 80% domestic politics, 20%
strategy, to be honest with you.
Hmm.
On Israel's part.
So that's, you know, that's my view.
Uh, I think that Benjamin Netanyahu had to do this for domestic political reasons.
Jacob Shapiro: Yeah.
I mean, he, you know, he had some, his far right religious partners were
talking about leaving the coalition.
So you're not, you're on firm ground, you're on terra
firma there, and he, and if
Marko Papic: he, if he loses power, who knows what happens to him.
So I think that, you know, like I, I buy that conspiracy theory, if you will.
Um, so here's what's gonna happen.
I think, um, there is a path here.
It's a narrow one, but I think that, um, if he did enough, you
know, then he can tell the Americans like, okay, go make a deal.
Like, I'll, I'll tone this down.
Like, I'll be amenable now, now that I've done this and maybe a couple
more days of like some targets, I'm amenable to being put back into the box.
And that opens up a chance for, uh, Iran to retaliate against Israel.
Um, nobody will care about that.
By the way.
Nobody like us is not gonna care.
Like that already happened.
We already set the threshold for caring.
It's pretty low.
Like Israel is going to be under attack by Iran for the next
like, couple weeks and you know, everyone's gonna move on from that.
The question is, well,
Jacob Shapiro: in part, everybody's gonna move on.
'cause Iran can't seem to do anything.
Like even last.
Can't seem to
Marko Papic: do.
Yeah.
So like, why not?
You know, like last time I think they attacked Israel.
They killed a, like a badin.
Yeah.
The negative, right?
They, they, that that's what happened.
Like a, a piece of shrapnel hit a poor guy in, in, in the desert.
So what I would say is, it really depends.
If it's 80 20 domestic politics, then Benjamin Yahu walks away from this
looking tough and concedes to the US the grounds to negotiate with Iran.
Like, okay, fine, I did what I need to do.
I'm gonna stay in power.
I'm gonna continue with, uh, you know, securing Israel in my own way.
You guys go deal with Iran now.
But that requires, of course, restraint from Iran.
And so far we've seen it.
Uh, the first statement by Iran after this event happened included America.
The, the state media also said that US is responsible.
Mm-hmm.
That's what happened right after the attack.
The statement today by the foreign minister clearly focused on Israel,
the drones that have attacked Israeli, uh, territory in retaliation.
Of course, it's just the first retaliation, but they could have easily
diverted some to us installations.
They didn't.
Mm-hmm.
Or us, you know, naval vessels in the Persian Gulf.
Like there's all sorts of things they can do.
To me, to me, the threshold for Iran and what will tell us whether they're
open for negotiations or not, is this, this is what you need to watch.
If they don't attack naval vessels in the Persian Gulf that are just
floating around either American or civilian tankers, that's important.
The second is, uh, Saudi energy facilities, which I highly doubt they
will, but I'm just putting it out there.
And then, as I said, the air base in Qatar that the US shares with the
Qatari military and then the Fifth Fleet headquarters in Bahrain in Manama.
So that, that to me, if, if they attack those, I think
that they're going for broke.
You know, if they don't, if this is just about Israel and maybe
some symbolic attack against some American facilities in Iraq.
Now, the reason I say that that's not part of the threshold is our listeners should
remember that on January 3rd, 2020, the US assassinated general Soleimani mm-hmm.
Of the IRGC, Iran retaliated by attacking American facilities
in Iraq with cruise missiles.
And the US did not retaliate.
In fact, Donald Trump tweeted something like I. You know, I respect this.
Like I know they had to retaliate.
I now consider this matter over Vice President Harris actually brought that
statement up in her debates with Trump to illustrate that he was cavalier
about American servicemen injuries.
This actually, you know, I
Jacob Shapiro: hadn't, I hadn't thought about her yet.
I'm glad you brought her up.
Do you remember her 60 minutes interview?
Of course, I do.
Take 60 minutes where she said Iran was the biggest foreign policy
threat to the United States course.
Man, maybe Israelis would've liked her better than uh, Trump.
Marko Papic: No, but one thing I would say, Jacob is in my annual forecast in
December of 2024, and I hate saying, uh, you know, like I was right.
But like, because of that, because of that 60 minute interview, because of that
60 minute interview that Harris gave and because of the increase in enrichment,
this was the easiest call to make maybe in my career, to say that kinetic action
against Iran is the greatest risk in 2025.
In fact, I went as far as to say that, uh, annual outlook, that it
would happen on January 21st, that the day after Trump's inauguration,
he would begin conflict with Iran.
Jacob Shapiro: And if it, if it had been up to be Benjamin Netanyahu,
I'm sure that would've happened.
Marko Papic: And I caveated it by saying rhetorical or kinetic, you know.
But what's interesting is that for six months he kind of, you know, put
an egg on all of the hawk's faces.
Not hawks.
I'm not a hawk, but like a bear.
Whatever you wanna call me.
Yeah.
Like somebody alarmists, alarmists, he really kind of like took us for a ride
there for six months negotiating with Iran much more in a much more conciliatory
ma way than he he usually does.
And I would say that in a way he's to blame for this.
In that he should have applied his seven steps to maximum pressure.
He should have been a lot harder.
He should have actually done what I said and been very aggressive on January 21st.
Killed someone right away like he did with General Soleimani.
Yeah, just boom, drone off Somebody just to send a message to Iran.
Hey man, I'm serious.
You can't drag me along the way you deal with Biden, with his negotiations.
And I think that the problem is Donald Trump almost proved why his
own negotiating style works and whatever he's been doing for the past
six months with Iran doesn't work.
You know, like he lost control of these negotiations because he was a little bit
too establishment, a little bit too CFR.
You know, he, he, he wasn't Donald Trump enough.
Uh, remember just a, a little reminder for everyone listening on January 3rd, 2020
when they killed Soleimani, the US was negotiating with Iran at the time in Oman,
they just killed this guy as a, what's up?
That's, that's what Donald Trump did.
I firmly believe that had he won the 2020 election, there would've
been a deal with Iran right away, because Iran was like, oh my God.
And I think that they themselves were like, oh, look at this.
This guy wants peace and he wants low oil prices, so he's not gonna bomb us.
You know?
And I think they, they, they took that narrative, that meme too far.
In fact, I had several clients say to me, but Donald Trump wants to low oil prices.
And I'm like, look, he does, but he's not myopic.
He doesn't need them tomorrow.
If oil prices go to 120 bucks for a month, like the world's not gonna end.
It's not
Jacob Shapiro: Well, yeah.
And they're not going, I mean, they were up 11% when I went to sleep last night.
They were up six and a half percent this morning.
So, well, because
Marko Papic: Iran is, because Iran is following.
The pattern of last year because it's not retaliating against, you know,
ways that oil prices will go up.
Yeah.
One last thing I wanna say.
I do also hear a lot of people say, but wait a minute.
What does this mean for inflation?
And so on?
Don't worry about it, just do not worry about it.
And I'll tell you why.
There's absolutely no way that any inflationary spike because of
conflict in the Middle East, is gonna lead to central banks around
the world raising interest rates.
Are you nuts?
Jay Powell is not gonna like do the bidding of the supreme leader.
He's not gonna like raise interest rates to slow down the pace of
the economy as some robot, some automaton, like, oh, energy prices
rising, must raise interest rates.
No, bro, like Iran is attacking global shipping.
No, we're not.
Like they're not gonna raise interest rates.
Not even considerate.
And that's why I would definitely like fading oil.
On day one of this is dumb.
You should definitely not do that.
But fading the market move, you absolutely should do this.
There's no way that this is gonna be negative for, uh, stocks.
And by the way, it's right now, uh, noon, New York time on Friday the
13th and s and p 500 is down point 44.
Jacob Shapiro: I mean, it's good for defense stocks literally everywhere.
Um, I I I'm glad that you brought up Soleimani 'cause that might be a
good way to, to land the plane here.
Um, because the Soleimani thing gets to the, the point about
Iranian domestic politics.
We've talked a little bit about the US and about Israel, but if you think
about Iranian domestic politics, I mean, you're right, it's really complicated.
So we're not gonna be able to treat it with the nuance that it deserves.
But think of it in terms of hard liners like the IRGC and who believe
in the revolution and everything else, versus the pragmatists
Rouhani, really the most recent one.
But you know, who wanna have their cake and eat it too?
They want Iran to be part of the global economy.
They wanna relax some of the religious restrictions.
But okay, you can have the revolution and these two factions sort of
squaring off against each other.
And I. One of the strategic reasons to off soleimani, not just that you're
sending a message, you're also getting rid of the leader who is on the
hardliner side, the one who was gonna be opposing negotiations tooth and nail.
So if you can empower the pragmatist to some extent and then, uh, to
your, I'm just like butchering your point about there probably would've
been a deal because getting rid of soleimani and throwing the IRGC into
chaos, maybe you can make an argument that now you're giving some power.
Um, to the pragmatists, uh, going forward.
But just, just to say that like, there's also an internal Iranian issue here,
and I think when we're thinking sort of as you said profoundly about what
happens next, um, I, I think there's a lot to be said about like Israel getting
short-term benefit, but at what long-term cost the, the changing nature of war.
Like another example of intelligence and drones and technology enabling
things that even 10 years ago might not have been possible.
And then like, what does this mean for the future of Iran long term?
Because eventually Iran is going to come in from the cold, and when
it does, it will be one of the greatest frontier opportunities ever.
I mean, like, it's, it's an incredible country with incredible
human capital and resources and all these other sorts of things, and
it will not be isolated forever.
Um, so I, I'm always sort of waiting from that perspective, but
Marko Papic: one, one, I think
Jacob Shapiro: we'll be waiting a lot longer.
Marko Papic: Well, since we're, yeah, since we're doing kind of closing
statements, here's what I would say.
I would say that geopolitics is a funny thing, you know?
Um, and we as humans, we desensitize.
We're, we're starting to desensitize to what I've been saying is a
multipolar world since 2011.
That's been my call.
Think about it, 10 years ago, if you told me just that Israel and Iran
would exchange Christmas of fire fire, which is what happened last year.
Mm-hmm.
I would've said, oil prices are 150 right away, and here we are.
Not only has Israel been attacked by a massive terrorist attack supported
by Iran in some capacity, even to gently on October 7th, not only
have we lived through that, but that happened almost two years ago.
Since then, Israel and Iran have exchanged cruise missile fire, and now Israel has
attacked Iran and might attack it again.
And SAP 500 is down 0.4%, which is like a random day.
Oil prices are up more than they've ever been up intraday.
I think we hit significant increase in oil prices, so no doubt there,
but you know, they're like 6% and the world's not ending.
And people are like, yeah, I mean, it is, I guess Iraq is gonna retaliate
against Israel, like, you know, whatever.
Like it is what it is.
This is the world we live in.
I mean, a couple of weeks ago, India and Pakistan exchanged fire.
You and I barely got to squeeze them in between the NBA finals and like the,
the fiscal bill in the United States.
This is very interesting to me and I think it's something for everyone
on this call to who's listening.
If you're an investor, this is really important for you.
But if you're just a regular person, like listening to our podcast,
trying to figure out what's going on with the world, this is the world.
It doesn't mean that the world is descending into chaos and
there there's gonna be World War III at the end of the rainbow.
This can just be our world for the next 50 years.
This is what the 19th century looked like, and it's considered
the longest period of peace.
The long peace, 1812 to 1914, a hundred years of what we consider peace was
interspersed with conflicts that just did not blow out of their region.
You know, and I think that's what I would end it on.
This is interesting.
We had India, Pakistan, we have this, we had Russia, Armenia, sja, Russia, Ukraine.
Like things are, things are cooking here.
There, there's a lot of pots on our stove of geopolitics, but none of
them are really, uh, overflowing.
And that is what multipolarity is like.
It sucks because it means people will die more so than when somebody's in charge.
On the other hand, it doesn't mean that every conflict immediately has
to become a regional configuration.
And I don't think a lot of people have really, uh, wrapped their
brains around that fact 'cause they just don't know enough.
History and human history is about multipolarity.
It's not about hegemony or by.
Jacob Shapiro: Yeah.
Or wrap their brains around the fact at how geopolitically insignificant
the Middle East has become.
The Middle East was important in the latter half of the
20th century for two reasons.
Number one, oil, number two, it was a proxy battleground between the
United States and the Soviet Union.
So between Exactly.
Cold Wars over, there's no China doing battle with the United States over.
No.
They had be the proxies via Iran.
Like it's all the same.
So that's gone.
No, and oil, nobody gives a frack every, literally, ah, you like that.
Like the United States has oil Nice.
And the Chinese are building reactors and Europe's doing hydrogen.
Like they're on borrowed time.
That's why that's the, is building, you know, Neo in the middle of the desert.
'cause they're on borrowed time.
Just to,
Marko Papic: just to be clear, they would, if Iran had the minerals, the balls
to attack I, uh, the, the facilities.
But Saudi Arabia has moved on.
You know, and the other issue, the other issue that I don't think, we also have
wrapped our brains around US taxpayers by supporting the Fifth Fleet in Bahrain.
Are defending Chinese strategic interests.
Let me say that again.
If you're an American listening to this, you're paying taxes in parts of China
can be safe because it's not US oil supply that the fifth fleet is guarding.
It's the rest of the world.
And that's maybe the one vestigial part of Unipolarity mm-hmm.
Of hegemony that America still performs.
I know you gotta go so we can wrap it on this.
All I would say is that Chinese and American interests are not that misaligned
when it comes to the Middle East.
Uh, and Chinese statement, uh, after this conflict was pretty muted.
They didn't really just support Iran.
They kind of said, Hey, both sides need to calm down.
Um, and I think that that's interesting as well.
I think that's a very nuanced point you're saying, Jacob.
In other words, this Soviet Union in the US had clearly delineated interests.
It's not that clear anymore.
Jacob Shapiro: No, and I guess like it's shame on us for leaving it on this
and only bringing them up now because for me the real question is, okay
President Erdogan, what's your move?
Because if this is your backyard, if this is the neo Ottoman Empire, if
all these powers are like whatever, like this is Turkey's backyard and now
you've got Israel and Iran like with blows, and maybe that's good for you.
Maybe you want to break out the popcorn and deal with
whoever is left over afterwards.
But like said it, Turkey is the quiet one that is like, we should all be watching
how they react because that's probably gonna define this more than anything
Marko Papic: else.
You took your very high in our draft, so you took Turkey.
Sorry, Turkey high in the draft.
So let's see it.
I did let, let's see.
That potential.
Let's it,
Jacob Shapiro: I'm waiting.
Alright.
Thank you.
Alright.
Cheers.