00:00 Speaker A
So I was reading David Kelly of JP Morgan Asset Management. He was out with a piece this morning. He says, the best question to ask now is not what happens next, but how does it end? Right? Like what causes this to come to an end? And if you look at oil futures priced out in December, they’re around $75 a barrel. So lower than where where they are now. So even the oil traders think that before the year is over, this is going to come to some kind of conclusion. Um to your point, you know, sort of with the political pressures that are coming with the midterms, also, you know, energy prices are going up, gasoline prices are going up, electricity prices are going up. There’s going to be increasing pressure to bring this thing to a close. Whatever that looks like. I mean, on the flip side, Bank of America out this morning saying that markets could be underpricing a more protracted war still, that that’s not what they’re expecting. So, you know, it’s hard to know what the actual, I mean, I suspect that indeed those political pressures at some point,
00:46 Speaker B
But you can already see them.
00:47 Speaker A
Yeah.
00:47 Speaker B
you know, you can already see them emerging. I mean, you know Trump likes to use the markets as a gauge for whether his policies are working that he’s sort of conceived of on his own. Like after liberation day, remember liberation day?
01:03 Speaker A
Sure. How could I forget?
01:04 Speaker B
How can one forget liberation day, you know, the bond market, you know, backed up and he really and that was a key indicator to him, you know, rightly so by the way, got to give him credit for that. that that he could see that that was uh not working. Uh and the bond market has backed up whatever 40, 50 basis points on the 10-year, you know, since this began. Uh so that’s uh one indicator of people getting nervous. Although the spreads, the you know, the high yield spread to Treasuries has has backed up as well, but it’s still at historically low levels at around 300 basis points, which is, you know, kind of surprisingly low given the risks that are all floating around, not only because of the war in Iran, but all this private credit noise. Uh but the stock market has been relatively
01:52 Speaker A
Yeah.
01:52 Speaker B
calm amidst this. Yes, it’s sold off, but not, you know, the drastic kind of sell-off that we’ve seen, you know, in other crises.
02:04 Speaker A
Right.
02:04 Speaker B
Um, so maybe he he he he’s thinking maybe, you know, uh everybody isn’t panicking as much as maybe he is about how to get out of this. I mean, but you know, remember in whatever it was last June when they bombed the Iranian nuclear facilities and he declared, you know, it was over in eight days and
02:27 Speaker A
Right, right.
02:28 Speaker B
uh the the facilities were obliterated, you know, I could see him, you know, sort of walk realizing that, you know, it’s not going anywhere and there’s no way out here. Huis clos as Jean-Paul Sartre might have said. Uh that he’ll just like declare victory, walk away and say, you know, uh, you know, mission accomplished.
02:51 Speaker A
Yeah.