Rob Stephens

To predict what will happen, let’s start by ruling out a few scenarios: 1. We are unlikely to see the use of nuclear weapons. First, Israel is unlikely to use them; the U.S. wouldn’t allow it, and more importantly, nukes wouldn’t completely eliminate Iran. Instead, it would risk a counter-strike from Iranian nuclear weapons (which they likely already possess). As for Iran, they won’t be the first to use them. There’s simply no need. We can likely rule out this worst-case, unpredictable risk. 2. The U.S. will not launch a large-scale war on Iranian mainland. They simply can’t afford it. 3. The U.S. will not retreat just yet. Many are anticipating a TACO, but taco now is meaningless. A true "TACO” would mean handing control of the Strait of Hormuz over to Iran—a "Grand TACO," if you will. It’s too early to give up. 4. Israel will not back down. Stopping now would mean all previous efforts were in vain; they won’t get another chance. 5. As long as there is no regime change, Iran will not back down either. As I’ve discussed before, since they’ve already played their biggest card—Hormuz—they won’t fold easily. Folding means certain death for top IRGC people; staying in the game at least offers a chance at survival. Once we exclude these five possibilities and establish these constraints, the path forward becomes relatively clear. First, the U.S. will likely engage in island-seizing operations, hoping to control the situation through small-scale, high-leverage ground combat. From there, three possibilities emerge: • Scenario 1: The battle goes smoothly and concludes in days. Iran is forced to the negotiating table, or regime change occurs. The U.S. quickly gains control of the situation. • Scenario 2: The fighting is grueling and protracted, but the U.S. eventually secures the objective and stabilizes the situation. • Scenario 3: The fighting is exceptionally difficult. The U.S. either fails to take the objective or takes it but finds it impossible to defend, eventually forcing a withdrawal. This would complete the "Grand TACO." Trump would shrug his shoulders and take the exit, claiming the battle was simply unwinnable. Aside from Scenario 1, both Scenarios 2 and 3 would inflict massive pain on the global economic order. I personally think scenario 3 is the most likely. Brace for impact, folks

If SpaceX files for an IPO this week, it almost certainly will be a confidential filing. So we'll still have to wait a while for the financials.

The conundrum right now in a nutshell: 1) Trump has shown his hand. He is very afraid of this war getting out of hand. But showing hand = exposing weakness, in any situation. 2) Iran, on the other hand, has nothing to lose. The Chinese idiom for that is “光脚不怕穿鞋的” or “those without shoes are not afraid of the shoed class”. Instead, when they see Trump’s weakness, they will maximise the pain, and only then can they realistically ask for some payback for the heavy losses they take. If they do nothing now, they know they will be squeezed even harder later on. After all whats worse than your national leader being butchered like pigs? There will be no illusion, and they will push harder with whatever means at their disposal. 3) When Iran has this framework, it’s hard to imagine Netanyahu’s Israel will just sit back and chill. Bombarded by Iran, they will have to respond with violence, with or without US assistance. 4) All in all, it’s really impossible for Trump just to TACO and for Hormuz just to reopen when both Iran and Israel are very willing to fight on. 5) The capital market is eerily negligent of all of the above at the moment