Listen to the Region, Not the Podium
Why signals from Iran, Israel, and the Gulf matter more than victory‑lap headlines.
The headlines are coming fast and it’s becoming clear we have strongly competing narratives. This is a time to ignore victory laps and find signal.
Below are some points I’m considering, to varying degrees of depth, regarding investment decisions over the coming weeks and months.
Macro and Market Signals
Bond market says “problems”
The MOVE index has sharply decoupled from SPX of late, continuing a recent trend. Historically, when rates volatility and equities diverge this sharply, equities tend to adjust more than the bond market. Interesting.
Treasury auctions have been not great
The last couple of auctions have gone poorly and the buyer mix is shifting. Historically, that kind of pattern can signal that stress is building rather than resolving. Watching.
Recession odds are high and rising
Play the mental game: “If this stopped today, what would happen?” Significant damage is already done. If the Strait of Hormuz opened fully tomorrow, some degree of economic pain is now baked in when thinking about Q2/Q3 readings at minimum – a majority of that pain is inflationary, not disinflationary.
Rate cuts are off the table, for now
Absent The Great Recession – The Sequel, meaningful rate cuts in 2026 read as unlikely. Proceeding without a meaningful 10–15% correction, we may inflate our way out – 1980s new again.
Europe is likely to struggle, unnecessarily
Their decarbonization efforts collide directly with energy security - which is security. “Electric everything” works until electricity itself is expensive or unreliable. Europe is positioned to be one of the major negative impacts from this engagement if current energy pricing and decarbonization dynamics persist. The electrification idea makes a great deal of sense, but the application must be more carefully managed.
Regional Posture and Escalation
Gulf states have publicly pushed back on Iran
Gulf states have now publicly condemned recent Iranian attacks and signaled willingness to take “all necessary measures” to defend their security. You don’t build that kind of public alignment at the end of hostilities. Some of this is political signaling, but it points toward more risk, not less.
Israel is not comfortable with a ceasefire, nor are key Gulf partners
Regional partners are tepid on a ceasefire on Iran’s preferred terms. Tracks logically. Given the core coalition does not “need” a ceasefire to prosecute desired objectives, the odds of getting one read lower than the rhetoric would suggest.
Iran is, in relative terms, “winning” in some ways
On known-pure defense and you still have a functioning country, that’s a form of winning. Iran has absorbed significant pressure and continues to control tempo through proxies and escalation choices - listen to Iran.
Underreported Developments
There are several datapoints receiving little attention despite on topic nature:
• Ukraine has struck major Russian energy facilities and export infrastructure, shutting or disrupting key refineries and terminals.
• A major US refinery is offline and restarting after an explosion and fire (Valero Port Arthur).
• The arrival of the USS Tripoli in theater is likely to coincide with the end of the “five‑day grace period,” and its mission set is not accidental.
• The Saudis have clear incentives to deepen US security involvement in the region, up to and including more visible US presence on the ground.
Generally filed as “interesting.”, the sketch is more brittle and escalatory than the “we’re winning” discussions – on both sides. US rhetoric is winning the media war, and in ways that’s accurate, but that “winning” papers over some uncomfortable reality.
Energy Infrastructure and Asymmetric Risk
Mind US energy assets
Oil companies are mostly responsible for their own security. US‑based energy sites are not ring‑fenced by 500 commandos, PATRIOT batteries, drones, and regime‑change firepower. Security is generally robust by corporate standards, but these companies now face state‑level actors with high motivation to damage US interests. They are not equipped to address.
I don’t think Iranian attacks on US energy facilities on US soil are realistic; a small number of isolated attacks wouldn’t be existential. But these are not impervious locations, and a successful strike could materially degrade a key US advantage looking forward.
Fear the asymmetric phase
Conventional conflict is scary and visible. Asymmetric warfare is brutal, persistent, and harder to price: propaganda, sleeper cells, random attacks, proxies, electronic warfare, and civilian infrastructure targeting. This is where Iran excels. I expect more anti‑US propaganda and believe the probability of a domestic attack is non‑zero in the current state – not high enough to trade on, but enough to model for risk.
Mindset, Narratives, and Capability
Time to ditch emotions
Tamp down emotions. I am an American and I prioritize my country’s interests; I would expect the same from any other country’s leadership and citizens. Don’t buy hype wholesale. The US is running a “we’re winning” campaign and while that is true in many ways, it is not true in all ways – including how we ultimately close the engagement.
US commentary is a datapoint. Use it as an input, not the anchor. Actively seek commentary and signals from Iran, Israel, and broader Gulf nations. Triangulate consensus and observable reality. Doing that requires emotional distance. Stay frosty.
Spend time understanding military capability
Military tech, war, and strategy have been present in my life since I was young, and I subsequently follow military technology closely. I pay significant attention to existing or open‑source tech to assess known capability, and speculative tech to understand how we may project power in the future. A bonus: some of that tech eventually bleeds into defanged but investible civilian applications. More importantly, it informs probabilities that feed capital allocation.
From a pure capability standpoint, the US is par excellence. The US can and does exert political and general will as necessary, across administrations. The USS Tripoli is a living example: a small aircraft carrier that operates in littoral (shallow) waters and narrow passages, with accompanying offensive vessels and roughly 20 F‑35B aircraft onboard as part of the 31st MEU deployment. It carries a Marine Expeditionary Unit and is built to clear beaches and shorelines. Notably relevant when thinking about next phases and existing official statements.
The group also fields multiple Phalanx systems – automated Gatling guns capable of thousands of rounds per minute that create a “wall” of high‑velocity lead out to roughly two miles. That large white R2‑D2‑looking unit you’ve seen on a US ship? Phalanx.
This matters. If Tripoli engages in or near the Strait of Hormuz, expect headlines about it taking damage or being at risk. It might be damaged and is definitely at risk – that is part of war – but it is far from defenseless with recent learning to build on. Scale raw kinetic ability and reality at the existential level, then build on that.
Understanding deployed capability mutes the propaganda and prices the risk differently.
This period has been an opportunity to battle‑test thinking. From my seat, it has been riveting.
Reality is way better than fiction.
This publication is for informational and educational purposes only and reflects the author’s personal views at the time of writing. It is not investment, legal, or tax advice, and it should not be relied upon as such. Any securities, strategies, or markets discussed are mentioned for illustrative purposes only and do not constitute a recommendation to buy, sell, or hold any investment. You should conduct your own research and your decisions are solely your own.