Transcription
Henrietta Treyz and Veda partners looking forward to the NATO summit, saying it's a prime opportunity to direct attention away from the war and the energy fertilizer price spike it has created. So investors should be prepared for a flurry of announcements. Henrietta joins us now for more. Henrietta, welcome. What kind of announcements are you looking for?
Well, as you mentioned with Tyler, I think the idea of a joint defense effort with Germany is exactly what the doctor ordered. You know, the president is really looking to deflect away from what is happening in the strait. And there are so many issues, not least of which is the toll that still hasn't been agreed to and which NATO nations have a real problem with. So I expect them to talk about pretty much anything other than that throughout the next two days.
The other piece would obviously be Russia and Ukraine and the discussion there as the United States Congress provides substantial funding to not just Ukraine in their various appropriations bills, but also to the neighboring regions, Latvia, Lithuania, and the Baltic Region as a whole. And as you were mentioning before, trying to ensure that we keep troops in the region as well in Poland and elsewhere across NATO nations.
Henrietta, let's talk about it. I get that the Europeans and others aren't happy about it, but right now, it feels like that's the price of admission to get energy moving again. Is there anything they can do about it?
Yeah. That's exactly it. The result of this war is that Iran now has control of the street. You see it with the u-turns of tankers happening throughout the weekend and on a daily basis as people deal with the general uncertainty of where these eighty minutes are in the region. So Iran has the ability here and is using different countries as an example of how to set up a toll. Call it a climate assessment, call it an environmental fee, whatever you call it, you're normalizing relations with the IRGC. And this is, in many of the NATO nations' opinions, I've heard from Canada, for example, directly and France directly, simply untenable. They don't wanna work with the state sponsor of terrorism. And I would also point out that Treasury Secretary Bessent has created waivers for all these sanctions, but those are only gonna hold as long as the administration decides that they will. They've already reversed that several times since the start of the war. They don't have a lot of comfort from banks or insurers or NATO nations about what the policy is gonna be in the future. So this is gonna take a while to unfurl, probably much longer than the August 20 deadline.
Henrietta, hi. It's Mike Wilson. I had a question with respect to just how the world may get around the the Strait itself in the sense that what this war has highlighted is, how crazy it is that we have this choke point to begin with. And how fast do you think the the world itself will start to migrate towards perhaps drilling for resources elsewhere or building, alternative ways to get the oil out of the region through pipelines, etcetera? How fast can that happen, and will this be talked about over the weekend?
Yeah. Perfect point, Mike. I mean, the way to think about this is that it's so obvious that going to war with Iran would result in some sort of closure of the strait. No administration has done it before. Very transparent, very understood. This was a potential choke point. We have many of them around the world, whether it's in the Red Sea, the Black Sea, the Southeast Asian areas. There are problems like this all around the world. So you're gonna see now a scramble to try to create alternatives to whatever choke point there might be in the entire world. And what I think, you know, for investor purposes, what this means and particularly for the Federal Reserve chairman as they consider inflation is, permanently higher insurance risk, permanently entire higher cost of doing the shipping, higher tanker rates. And those are all things that we're seeing across the board. So whatever level this settles at is almost guaranteed to be higher than it was before the president made the decision on February 28 to start the bombing.
And what about Taiwan? Is that off? Is that something that people are still talking about in the mainstream? It seems like that's kind of taken a backseat.
Yeah. Absolutely. Great point. So Taiwan has taken a backseat publicly, but in DC, it's still paramount. You have a pretty substantial bipartisan focused group as a stand, not a standing committee, but a select committee on China relations that focuses directly on Taiwan. And I would say that as you look at BIS and what they're doing with export control restrictions, they're very focused on Taiwan. Members of Congress are very focused on Taiwan. So it may not be front and center for this administration, and there's a lot of questioning of how the president's allegiances towards Taiwan differ from prior administrations. But I would say Republicans and Democrats are unified in wanting to continue to provide protections to Taiwan, whatever that takes.