Transcription
I personally think that this is so central to his legacy if he gets out of Iran now. I think it will just allow China to really dramatically increase his footprint in Iran. I'm going to have to assume that a lot of people around Trump are telling him, "You, if you go down this path, you got to stay with it. You cannot go in and then decide after like two weeks to say, 'Time out, time out.'" That kind of thing. If you've done it already, if you've gone into Iran, you you have to finish the job because otherwise the outcome will be worse than not going in.
>> David Woo, CEO of David Woo Unbound, which is a global forum dedicated to the promotion of fact-based debates around markets, politics, and economics, and also co-author of the upcoming book *Mary Goround Broke Down*, which you co-authored with Margarite Shannar. It is so wonderful to welcome you back to the show, as always, David. I know we were just together at the start of the year, but wow, I cannot think of a better guest to have at this moment. So, I really appreciate you taking the time.
>> Thanks for having me. Love being on the show.
>> Of course. And we love having you, and we are thinking of you, David. Um, all right. We got to start. Just let's set the table right now, or just set the stage. Let's look at things from that big picture, more of that geopolitical view, if you will. Um, what did, just kind of set the chess moves, if you will, or the chessboard even?
>> Sure. I I think, you know, like I mean, obviously, I mean, living here in in Israel in the m middle of this, actually, the sort of it might mean that I'm a bit biased, but I think nevertheless, I think, you know, actually is a good place because I'm actually quite far away from most of the action. So, it's actually a very interesting. I think this is the, I mean, I think from a from Israel's standpoint, this is the most important war since the War of Independence, 1948, by the way. The war that we're talking about with Iran. And I tell you that in terms of for the region, this is definitely the most important war since the Iraq war. I mean, so this is going to have, this war will have consequences. I mean, I mean, we may not see, we we may not be able to see all the consequences right now, but I can tell you this will be a very constantly control book. But let's just basically go back to the sort of drawing board a little bit. Just think about the big picture in terms of the game theory setup, right? Because you've got three players here. And and then, you know, what makes this war different? Because it's actually very interesting to me because I I think, you know, it's fascinating. The stock market is up today. I mean, it's barely down, you know, I mean, considering the fact that this morning, Nikkei would open down 7% and then rally back. It had a lot to do with the fact that the US stock market has proved to be very, very resilient to, you know, basically the massive rally we've seen oil price and the geopolitical risk, so forth. So the question is, why? I mean, so, and this is actually ties in with this whole thing, right? Because my, I mean, you correct them wrong, right? I mean, I think there are only two possible explanations why the US stock market has been so resilient. One is that they believe either because they believe that Trump is going to taco very soon, chicken out, and basically declare victory and end the war, or that the market is convinced that Trump is going to be able to win this war very quickly. Okay. So I think that from the point of view of the market right now, there are two hypotheses right now in the market. I mean, if you think about this, there's a whole range of possible outcomes in this war, but there are two that the market is touching the highest probability. One is that Trump is going to tackle, the other one is the US is going to win this war very easily, so it's going to be over very soon, right? And let me tell you why I think that these are actually the least likely scenarios, okay? I think first of all, we have to understand something about Trump, which is that I think that, you know, I I I don't I think the market is overestimating the odds that Trump is going to taco, you know, like like he's done on so many different occasions. I don't blame the market because Trump, like, you know, like he tacos so many times last year that, you know, I mean, there's a Chinese saying, you you get bitten by a snake once, you are afraid of ropes for the next 10 years. Like I've lost, you know, my share of money last year betting against Trump, and then he taco. So from that point of view, I can understand a lot of people don't want to basically uh don't want to basically bet against, you know, Trump's taco on this thing. But but let's think about this for a second. You know, I would argue that after the Supreme Court ruled against Trump's tariff, Trump is effectively a lame duck president. You know, normally it takes, you know, usually the second term president does not become officially the lame duck until after the midterms of his second term. But I would argue the Supreme Court has already, you know, basically made him a lame duck, at least as far as domestic policy is concerned, because now even Trump knows there is no chance he's going to be able to make the case for a $2,000 tariff rebate, which was the only way he could, you know, possibly bribe middle-class Americans to come out and basically vote for him. So I think from that point of view, even Trump has to basically believe that, you know, the chances of the Republicans being able to maintain the majority is basically very, very low right now. So if you actually, it's interesting because in the past, you know, if you look at the history of the United States, the last 50 years, when the president becomes a lame duck, there is a very good chance that president, you know, focus shifts away from politics to legacies. I mean, and especially legacies regarding foreign policies. And there was, this was definitely the case for Richard Nixon after Watergate. This was definitely the case with uh with um Bill Clinton after Monicagate, and this was definitely the case with Barack Obama. Now, I would argue that this is why I think, you know, now that Trump cannot get anything done in terms of the domestic policy, you know, censure the agenda, he's now forced to essentially gravitate towards foreign policy, maybe foreign policy only, and to focus on his legacy. And there is no country more important to Trump's foreign policy legacy than Iran. Okay? Like Trump has invested so much in Iran by first of all walking away from the Iran deal, you know, in his first term, and then reimposing massive sanctions on Iran, and then hitting Iran basically uh last June. And, you know, so from that point of view, I mean, like I just don't think Trump is going to tackle that easily. This is not a situ. This is why I do believe that, you know, like, you know, that the market is overestimating the chance that Trump is going to tackle. At the same time, I think the market is also overestimating, okay, the sort of like, you know, the chance that we're going to see, like the US simply just essentially, you know, walking all over Iran, and this war is going to be done because the Iranian regime is going to be crushed very soon. And the reason is because I mean, first of all, you know, it's actually very funny. Only today we got final confirmation, the Iranian drones have destroyed at least four, if not more, of the US THAAD, okay, essentially the system battery. I mean, these are the most, these are these are basically these are air defense missile systems. They're even more sophisticated American systems. They're more sophisticated than the Patriot system because they are designed to intercept longer-range missiles, and half of them in the Middle East, you know, I'm talking about deployed US bases had been destroyed. What we've been able to see, I mean, what surprised me over the past week is the fact that Iran has been able to launch many, many, many drones, especially against UAE, more than 100 drones every single day. I mean, if you basically, if you're able to launch 100 drones, that means that you have you have 100 drone operators, okay, managing them and so on and so forth, which means that, you know, your operational capability has not been that much damaged, I would argue, okay? And then, in case a lot of your viewers don't know, in fact, 90% of the missiles launched by US, you know, fighter jets on against Iran continue to be fired from outside the airspace, using relatively expensive cruise missiles as opposed to flying essentially, you know, inside Iran and dropping cheaper bombs on top of Iran. All this will suggest that a week into this, I think there's a lot of obviously self-congratulation about what the US has achieved. I think what Israel has achieved is more, but the you, I mean, the market seems to believe Trump's thing that, you know, like he's going to, he's going to destroy Iran's regime very quickly. This whole thing is going to play out very quickly. Either he's going to tackle, or that he's going to basically win. And I think the market, in my humble opinion, neither is the most likely scenario. The more likely scenario is that this is going to become a more protracted and messy conflict.
>> What would change your mind though? Like, what signal would tell you that the market's actually right though?
>> I think there will be a couple of things. Like, you know, it will be first of all, if if I see all of a sudden, you know, Iran firing a lot of missiles at Israel, that will change my mind. And I'll tell you why. Ironically, you know, I don't know if people realize this, but Iran has fired more missiles and drones against UAE than it has against Israel. Okay? In fact, Iran's attacks against Israel have been quite measured. And I'll tell you the reason is very simple. Because, you know, killing Israelis is not necessarily going to help Iran win the war. They believe that the only way they can win the war is by essentially driving oil price to $100 a barrel and higher and keeping it there for three weeks. They they believe if they can achieve that, Trump is going to tackle, and this is the reason why they are focusing their attack on the Gulf countries as opposed on Israel. But if, however, all of a sudden, you see like they're starting to launch massive strikes against Israel, killing civilians, that would suggest to me that the Iran believes that, you know, they're they're becoming desperate. In other words, that they they can see the end coming, and then they're going to release everything they got against Israel to kill as many Israelis possible in a sort of suicide kind of thing. I think, you know, so if you if if I start to see desperation as opposed to measured response on the part of Iran, I would think that would be a sign that the war is coming to an end. For example,
>> Let's talk about, um, oil. It was above $100 a barrel. It's now off, like those highs. I'm looking right now because even if I say the price, by the time this airs tomorrow morning, it would be a very different price, but we're at $95.36 a barrel. Um, so what are the consequences? I guess, what are the consequences of like, okay, $100 oil, you mentioned $200 oil, and what are the, what are the options? Like, what are the scenarios or like the real risk if you get into those ranges?
>> Right. So, so let's think about what does, I mean, at $95, what is the market pricing in terms of the loss of, let's say, oil production from the global market? Right? This is the most important question. What has the market priced in at $95? Okay. I tell you, this is the way you should think about it. So the world production, oil, total, you know, oil production in the world is roughly around 100 million barrels per day. Okay? And as you all know by now, like 20% basically flows through, you know, the Persian Gulf. So, which is about 20 million barrels per day. The, you, the typical sort of rule of thumb measure for Wall Street's, you know, energy, you know, oil analysts is this, like, you know, if you lose suddenly, okay, 1 million barrels per day in terms of production, that usually is associated with, let's say, a 10 to 15% increase in oil price. Okay? So right now, we've gone from, let's say, $60 to $90. So that's a 50% increase in oil price from the from from the low. I would argue the market has priced in, let's just say, loss of 3 million barrels of production per day. Okay? What's 3 million? I mean, 3 million, you know, Iran is producing currently, was producing at least until recently, 2.5 million barrels per day. So what the market is pricing right now is no more than the loss of Iran's own oil export, and with very little discounted in terms of, you know, the export from other countries that who basically, you know, saying should the, you know, whose oil sales into the rest of the market will be deeply affected by the closure of the Strait of Hormuz. What I'm saying to you is that right now, even though 95% of the tanker traffic has disappeared going through the, you know, the Strait of Hormuz, the market right now is only pricing that this is going to last for no more than three or four days.
>> That's what I'm telling you.
>> So from that point of view, this is why, you know, Iran doesn't need to, you don't even need anymore. All you need is for this thing to drag out for a week or two, and so on and so forth. You know, oil prices could definitely go much higher because I mean, think about this. I mean, let's let's take an example of Japan. Like 75% of Japan's oil imports come through the Persian Gulf. So, a lot of countries are going to be without this. I mean, just think about Germany, for that matter. I mean, last week, you know, natural gas price in Europe went up by 50% because Qatar is a major exporter of natural gas to Europe. Like, you just cannot, I mean, the whole German manufacturing, you know, it's going to be dysfunctional with basically with that kind of basic price. So I would argue, but but that's not the point. The point here is there's no doubt if oil prices were to stay up here, forget about even going to 200, even let's just say at $100 a barrel, this will be a huge shock to the global economy. But that is not what the market is pricing right now. Right now, the market is pricing the oil shock as an inflation shock as opposed to a growth shock. This is the reason why like bond yields have gone up, but stock markets have been holding up, okay, down a little bit, and so on and so forth. The market just thinks, oh, well, you know, listen, uh, oil price, high oil price means higher inflation, which means the Fed is going to be on hold for longer, but the economy can take it. This is why don't, there's no need to sell stocks. That's what's going on. You see what I'm saying? So the market is thinking, market views this oil price shock strictly as an inflation shock and not as a growth shock. Because if we're viewing as a growth shock, the stock market is going to go down, and arguably basically rates are going to go down as well.
>> But the bond market's saying something different. So, do you think they're sniffing out something different then?
>> Well, the bond market is taking its cue from the stock market, saying, "Oh, well, the stock market's holding up. If the stock market can basically can take in $100 barrel stock, I mean, basically oil in a in a stride, then this, then the bond market believes that then there's no need for the for the Fed to start cutting rates."
>> You see what I'm saying? Because everybody knows that, you know, higher oil price means probably higher inflation. So the bond market, so you know, that's that's what's actually happening.
>> Interesting. Yeah. Okay. But then, okay, let's, um, stay on that point then. If, let's say, we stay around $100 per barrel, can the, like, let's hear domestically in the US, can the Fed cut rates then? Because that you get back to the inflation story then.
>> Yeah. But it's also true. But but the Fed, remember, focuses on core inflation.
>> If oil price goes up, what what does high oil price mean? It means that people are going to have less to spend after they pay for their gasoline before, which means that actually spending on core goods and services will go down.
>> Okay? And so from that point of view, you could argue that the oil price shock is typically a deflationary actually shock, especially if growth basically starts to slow down. But I I think that is that's what it is. But so far, clearly the market is not pricing this way because everybody's thinking, oh, wow, the stock market, you you realize, right? All these retail buy-on-dip investors continue to basically buy on every dip. And also real money investors would think, oh, wow, you know, listen, stock market's going up last year. They underperformed their benchmark because they didn't own enough stocks, and they were selling stocks after a liberation day, whereas retail guys were buying in. Institutional guys are very hesitant to move into cash because they unless they see retail investors having thrown in the towel, and so far we haven't seen retail thrown in the towel. So everybody sort of, so the retail guys obviously, they don't care. They don't care. Oil is 100, 50, whatever it is. They just think that whenever stock goes down, you're supposed to buy, and that's what's going on. So everybody's now following all the smart money, institutional money is now following retail buy-on-dip investors because everybody thinks that these guys had basically stolen their shirts over the past couple years. Not going to make that happen again. This is why, in a way, I think it's a, it's a very tricky situation because every American, I mean, I mean, I I just, I did an interview on the NPR radio this morning in Boston, and we were talking about my book, and then, you know, the the person who interviewed me was saying like, oh, you know, like last week, at the start of the week, you know, she was paying whatever $3.50 to fill up her tank. Okay. I mean, $2.50, and by the end of the week, it was a $3.50. I said, well, you know, just you wait, we're going to see $4 very soon. So the question really is, because for one thing, the jump in oil price, because a lot of people were bullish the US economy, at least through the first quarter, because as you know, the whole thing about the tax rebate, you know, was going to add up to about $100 billion more than last year, and then people thought, well, you know, all the middle-class American blue-collar Americans are going to go out there and spend this money right away, that we're going to get a boost. There is no doubt that this oil price shock has pretty much wiped out. I mean, if this if the oil price stays up here for more than a month, it's pretty much wiped out, you know, that that fiscal stimulus check.
>> Hey everyone, I hope you are enjoying this interview. If you can take a quick moment and hit that subscribe button. We are on a mission to hit our next goal of 100,000 subscribers, and your support could really help us get there. Thank you so much and enjoy the rest of the interview.
>> Well, then what does that mean for not just like the the economy here in the US, but maybe more globally? And like, what are the economic implications? Are we headed for like, um, a recession then?
>> I think again, it depends how long this lasts. I I still think that I I'm not so pessimistic to say, well, it's going to last three months. I'm hoping it's going to last. I think it's going to last long enough for the market to go down. Okay. And then that market going down will force Trump to basically tackle. That that's that's the way I'm thinking about this, right? I mean, because at the end of the day, if you remember last year, the the liberation day taco, the post-liberation taco, I mean, stocks went down basically 20%. Okay? Now, so I'm thinking like, but I do think that there's no doubt some countries are more vulnerable to higher energy prices than others, right? I mean, we said Europe, right? I mean, Europe, you know, has given up on Russian gas. So they became big, very dependent on Qatari gas, and now they can't get Qatari gas, and this is a huge problem for basically Europe right now. You know, for Japan and for for for South Korea, okay, they import a lot of, you know, essentially Iraqi and Iranian oil, okay, I mean, not Iranian oil, but Saudi oil and and UAE oil. All that is driving up. India, on the other hand, also imports a lot of oil, but India has the advantage now. They get to basically buy Russian oil again because Trump is essentially, um, is, uh, making that possible. So I think it really, I mean, Canada right now is doing very well. I mean, because I mean, Canada, you could argue that, you know, the, you know, you don't have to worry about geopolitics. So the Canadian supply is pretty stable. I would say that in general, Canada and and Argentina and and Ghana probably going to do well out of this. OPEC is going to basically lose out. Russia's going to do well. The US, relatively speaking, is going to do better than others because the US is now more or less energy independent. But however, the US middle class, and because they spend so much more on energy than middle class elsewhere, they're probably going to be hit hard. Okay.
>> Yeah. I was going to ask you like, who are the winners and losers? And I think you just outlined it there. Um, the last time you and I spoke, um, beginning of the year, you were talking about the thing to watch and pay attention to or just like the framework would be the midterms. Um, we're coming up on the midterms in just a few months. Gosh. Um, and how that's going to kind of like drive a lot of, you know, Trump's decision making. Sounds like though that he might be in a bit of a political predicament here. Um, how do you see this one unfolding?
>> Yeah, I think, you know, I think the midterms are almost irrelevant now. I mean, obviously, at the start of the year, everybody's was focused on the midterms because the expectation was that Trump was going to throw the kitchens and get the economy ahead of the midterms to put his party in a competitive position ahead of the midterms. But now, if you think about this, it's actually interesting in my humble opinion, you know, like Trump is running up against real constraints with respect to both the Fed, vis-à-vis monetary policy, and vis-à-vis Congress, vis-à-vis, you know, fiscal policy, right? I mean, because I think the reason why he went with Worsh is because he became convinced or he's been persuaded that if he went with Hazard, then it makes it more likely that Jerome Powell is going to end up staying after his, uh, chairmanship expires, which then will deprive Trump appointees from, you know, securing a majority on the board. Okay. But I, ironically, you know, I don't know if this changed today, but as of last week, Trump has not even officially sent his nomination of War to Congress to get a confirmation. And I can only assume that he's still sleeping on this, simply because there's a very good chance he goes with a wash, and then guess what may end up staying anyway. So I think Trump is now, Trump understands now that his options vis-à-vis the Fed are extremely limited. Now, the Supreme Court, you know, having ruled against his tariff, has now made it impossible for Trump to rally the support of Congress, the Republicans, to basically do this, you know, $2,000 rebate check. Okay, the tariff rebate check. So, I'm saying to you that, you know, if if Trump, there's no doubt for Trump, for the Republicans to pull off a win in the midterms, there would have to be additional fiscal or monetary stimulus between now and the midterms. And I would argue the Supreme Court decision and the whole thing about the Fed makes it now very, very unlikely that we're going to get any new fiscal, any stimulus, monetary or fiscal otherwise, until after the midterms, by which time, so I think that the midterms are no longer such a major consideration for Trump, because in fact, this is the reason why he's now turning to to uh to Iran after that, to Cuba, and for I know, you know, to uh Greenland soon after.
>> Mhm. I take it this didn't surprise you though?
>> I think it didn't surprise. I have to say though, like, you know, I I think with with with respect to the Fed, I thought that was, you know, I I did not surprise me. I have to say that, you know, the the Supreme Court decision, it did surprise me a little bit because I thought I I was hoping that the Supreme Court will basically vote on a case-by-case basis. It would not have voted in a such a blanket fashion against this entire essentially the, uh, him trying to impose tariffs based on the emergency act. I thought they would have been a bit more essentially granular. But forget it. I mean, it's it's it's over now. But I think, you know, the point here is that, you know, as you know, a lot of Republicans, okay, who were against Trump's tariffs held their noses because they were afraid of him all throughout last year because they knew how much power Trump had. He could, you know, essentially, you know, start supporting, you know, primary challengers against incumbents as a way to, you know, lean on them. And so nobody, everybody shut up. Nobody said a word in his own party against this tariff. But now it's a different story. It's completely different story. I think people more and more people are speaking out against the tariffs. And then, in any event, you know, I don't tell you, like right now, like, you know, I'm sure like if you, you know, this is a Monday right now. I guarantee half of, you know, Congress is not even in Washington right now. They're all campaigning back home because you're going to have the primary elections coming up very soon. So like it will be very difficult to get to for Trump to get anything done, including any legislation on Bitcoin. So don't think that's going to happen anytime soon to support Bitcoin either, because a lot of people were still holding out hope that something's going to happen with Bitcoin that's going to give Bitcoin a boost. I don't think that's happening either.
>> Okay. So what's your base case? Do you think he loses the House in the midterms? Does he lose the Senate? Like, what do you think? I mean, do you have a base case?
>> My base case is that he loses the House. Okay. That they they they hang on to the Senate, but barely. So, okay.
>> Okay.
>> But but but the bottom line here though is that it doesn't matter. He just loses one or two. It will have the same effect in a sense that nothing is going to get done anymore. They won't even be able to do a reconciliation bill. If you remember, you know, they were able to get his tariff through even though they didn't have, I mean, his, uh, his big beautiful bill through last year, even though they didn't have a supermajority, right, in the Senate, right? Because the Senate, you know, if you have 60, if you haven't got 60 votes, you are, you know, I mean, you you can't get anything done because the other side can use filibuster to essentially complicate the entire process. But they were able to use this reconciliation thing to basically get the big beautiful bill passed. But once you lose the House, forget it. Nothing's going to get done. In fact, the only thing that's going to get done now is that every day there will be depositions. There will be, you know, you know, you know, they will be they're going to try to impeach Trump. There's no doubt about that.
>> Yeah.
>> And Trump knows that. He knows that this is going to be. And this is also the reason why I think he's going after Iran now, as opposed to waiting after.
>> Oh, then waiting. Okay. Explain that then. Yeah. Why now?
>> Because you do it now because once you become a lame duck, then literally everything you do, the media is going to attack you for it. Right. Right now, it's a sort of like, you know, like, oh, well, so the New York Times doesn't like his move on Iran, but they're going to be a bit circumspect, you know, you know, you know, uh, you know, I mean, as you know, Jeff Bezos just fired 30% of the staff at, um, Washington Post because they're seen as being anti-Trump, and they couldn't sell newspapers. My point here is that if the Republicans lose the midterms, the Democrats are going to go on the rampage in terms of, you know, basic, you know, essentially the, uh, try to impeach Trump. Not that they're going to succeed, but literally every day they will be hearing his deposition, the whole entire thing. And then, you know, and then the media will feel much more emboldened to attack Trump, this and this and that, which then weakens his leverage vis-à-vis his party in terms of backing him on such a big thing such as the Iran war. I mean, this is not something you can do, like even if you are president of the United States, I mean, you still need backing from your own party. You know what I'm saying? So I would say that therefore, once you believe you are the lame duck, you start doing, you start doing what Trump is doing now. And this is why I think Trump cares less about the market now than he did last year.
>> Interesting. Yeah. It's a different Trump. Like the market's not the scorecard then?
>> Exactly. Because because you need a market to be for your real for for to win the midterms. You're still trying to curry favor. You want to, if you believe that you can still win the midterms, and you know that the stock market is a very big part of it, fund manager, you're going to be focused on that. If you think it's a lost cause, then you're going to focus on the sort of longer-term, you know, legacy issues for your president, so you won't be remembered for something else.
>> Well, yeah. To that point though, can't this be like legacy defining? Like the, if he's successful too,
>> Couldn't this just define his legacy? And he can make these kinds of moves. But if he can, if he can bring about a regime change in Iran and a smooth transition to, you know, democracy or whatever, he's going to go down in history as like one of the great American presidents. I mean, I think in terms of foreign policy, and then people are going to be looking to Trump as someone who was daring, who used limited strategy, think strategically, that can actually affect, you know, that makes the world a better place. Okay. I mean, there there's no doubt, like, you know, this is why there's so much riding on this. And especially given, you know, another angle people don't realize, this is also the reason why I don't think Trump, I think the markets are overestimating, you know, Trump the chances that Trump is going to tackle easily, is the fact that the Chinese have now literally crossed the Rubicon as far as Iran is concerned. I'm just put it this way. Recently, the China-Iran railroad, which runs 10,000 kilometers, that's been under construction for the last 10 years, has become almost fully operational.
>> Once it becomes fully operational, you know, Iran's oil export to China will no longer be essentially affected by the US sanctions on Iranian oil export. In other words, the US loses a powerful leverage over Iran once this railroad becomes fully operational. And meanwhile, we just heard, you know, two weeks ago, there was a report that Iran just installed the most advanced Chinese, you know, radars that are capable of detecting, you know, stealth, you know, aircraft like the B2 bombers or for that matter, the F-35s. So, what I'm saying to you is that this is why the war in Iran has become a proxy war between the US and China.
>> Interesting. And this is the reason why all of a sudden, even people like Vance, who's obviously very lukewarm about anything involving US troops abroad, has rallied, you know, to the war because they because because they hate China. Right. These people hate China. So as long now that they think now there, the a lot of these these people around Trump who are making the case that we need to, you know, bring about a regime change in Iran is because they believe that this is the only way to prevent Iran and China from strengthening their ties further in Iran, that will give China a massive foothold in the region, and they will meanwhile allow Iran to become the next North Korea, in other words, untouchable.
>> Yes. Um, okay. Wow. David, this is where this is why I love talking to you because you help us see all of these various moving parts and what are the, like, if you're, I don't know if I guess analogy, like you set like a chessboard, like what where are the players set and what are the potential moves here? And there's a U.S.-China story here, then what do you think are the moves? Like, is there, because we know the Strait of Hormuz, right now, it's really, really important. It's important to China. I guess that railroad, that's part of the Belt and Road Initiative, I take it? I don't know. I'm not familiar. Almost online. Not online yet.
>> Is there a scenario, and please forgive me, I'm not a geopolitics expert. Um, is there a scenario where the US could control the Strait of Hormuz? Is that, is that way far out there? I don't know.
>> This is probably the single most important question right now. Okay. I personally think it's going to be very difficult, and I'll explain to you what I mean by that. Okay. Now, if you look at the Strait of Hormuz, okay, you look at another strait which has become a bottleneck for maritime traffic is of course the strait controlled by the Houthis, you know, at the mouth of the, you know, the the Red Sea on the other side of the, uh, the Middle East. Okay. Now, let me tell you this. You know, I I've followed the Houthis very closely the last three years. And this is an amazing story, by the way, which is the fact that this the Houthis, okay, and this poorest country, Yemen, is like literally the the poorest country in the world, right? The Yemen, the Houthi rebels have been able to literally strangle, okay, the maritime traffic through, you know, the, you know, the the Red Sea at will. Okay? Whenever they feel like it, they can literally, you know, essentially stop all traffic going through the Red Sea by using relatively unsophisticated weapons. I mean, they're using sea mines, they're using drones, they're using some, you know, anti-ship missiles, so on and so forth. Iran is looking at the same kind of distance, about 30 kilometers, in terms of the the width of this, you know, the Strait of Hormuz at its narrowest point, and then if you look at the usable sea lanes, even basically more narrow. And that gives Iran a huge advantage because they have a long, essentially, I mean, you know, they don't even, they don't need this. Trump is so proud of the fact that we've destroyed 50 of their naval vessels, that means nothing because that does not degrade the ability of Iran to control the Strait of Hormuz. They can use artillery, they can use drones, they can use frogmen, they can use mines, you know, they can just literally save their missiles and fire a missile every, I don't know, half an hour into the, uh, the Strait of Hormuz, and then no tanker is going to run the risk of basically showing through it. And in fact, Trump is talking about, oh, sending in, you know, the aircraft carrier to help to essentially the, um, to help, uh, you know, tankers to get out of there. There is no way, no navy officer will recommend that because because it's so narrow, once you send your aircraft carrier into the, forget about the Persian Gulf, we're talking about the Strait of Hormuz, it becomes it becomes a sitting duck. Okay? The Iraq, the Iranians don't even have to aim that basically accurately to be able to hit it. So what I'm saying is that this is an, you see this, this is the important point, which is that there's no doubt US and Israel are military technologically superior to Iran. But what Iran is now trying to do is to they're trying to pick a battle whereby that they it can blunt the technological advantage of the US and Israel. And basically picking the Strait of Hormuz is like a perfect spot. Okay? It's a perfect spot because it is where like high-tech is not going to help you at all. Okay? Where low-tech is spirit. And I'm just saying, you know, the the Houthis have demonstrated this last three years. If you don't believe, just look at what they've done, okay? And they have one-tenth of the resources that the Iranians have to do the same job. Okay? So right now, I have to give the odds to Iran. I think when it comes to the Strait of Hormuz.
>> Interesting. Okay. But again, not a geopolitical expert here, but couldn't you like make enough surrounding countries like really angry with that too? Like, I don't know if there's anything there, but.
>> Right.
>> It's a critical conduit, not just, I mean, it's for probably, I would think, not just the end users of the energy, but the producers.
>> Right. I think it's a, it's a very good point. Now, UAE is a good example, right? So as you know, I mean, Iran has launched more attacks, missiles and drones against UAE than has attacked Israel with, okay, over the past week. It's pretty amazing, right?
>> Now, why is it? I mean, besides the fact that they're trying to destabilize the oil market, because if you fire missiles at Israel, like it's not going to destabilize the oil market, you know, so that doesn't serve Iran's immediate purpose of driving up oil price. But UAE is a very different story. But there's a second reason why they're doing this, which is that they are trying to cause UAE, Saudi Arabia, these other Gulf countries to run out of their interceptors. Okay? Because every drone, every missile that, you know, these Gulf countries try to bring down, okay, they have to use, you know, interceptors. And I'm telling you, interceptors are already running inventories of interceptors already running very low, even before the war started. And then there are many people believe that by the end of this week, these countries are going to be pretty much defenseless, because by by which time they will have no interceptors left. Like the Patriot missiles, you have to understand, you know, the US produces the Patriot missiles. How many does it produce a year? It produces 700. That is whatever, 60 a month. And then, you know, half of them has been going to, uh, you know, Ukraine, of course. So like, you know, so with how you're going to be able to defend these countries? And this is why Iran, this is another reason why they're focusing their energy on hitting these countries as opposed to Israel.
>> Ah, wow. Okay. Again, like you're helping us all, like learn and understand this. Um, okay. So,
>> I'm just saying that, you know, listen, I mean, the Iranians, I mean, I I think, you know, I mean, obviously, you know, it's, you know, these people are extremists. They are religious fanatics. But we also have to appreciate the fact that Iran, okay, is, you know, this is not like Saudi Arabia, okay? I mean, you know, Saudi Arabia isn't speaks Arabic, okay? I mean, you know, Saudi Arabia was founded by Muhammad. You know, it's a relatively new country, even in the greater scheme of things. Iran has been around for, let's call it 3,500 years. Okay? They speak Farsi. They don't even speak Arabic. They speak Farsi. These people invented chess, by the way. These people are very educated until, you know, the, you know, the Iranian revolution. They were the most educated, the richest, basically country in the Middle East. Okay? So you're talking about dealing with a people who come from a great civilization, who are very clever, who are known to be very strategic in their thinking about things. I don't think we should count them out that quickly. That's what I'm saying. Okay? And they have a long time to prepare for this. And and this is why I I can only assume that the market doesn't really understand this angle. And I think all I know is that right now, in the last week, it seems to me that their response in this war, even though it looks, it may feel like a one-sided war, is like the whole world against Iran. I would say Iran's relative measured response would suggest that they are continued to execute a plan as opposed to just, you know, essentially, uh, reacting as opposed to, uh, acting proactively. So to summarize, like when you look at the market, it's been relatively resilient. The retail buyer, if you will, institutions following what the retail folks are doing. Um, but you're kind of saying that the the market's kind of pricing in a taco. Trump always chickens out that they think maybe it won't be as protracted. You'll chicken out. What do you think the markets should be doing? No, I don't know if you could do. What do you think the markets should be doing then? Or where do you think they should be? Um, if that weren't the case, much lower. How much lower?
>> I think, you know, I mean, at the end of the day, I think it's interesting. I I would like to see the stock market lower, but, you know, that, you know, that's because I'm short. I'm long oil. I've been long oil. That's doing extremely well. I've been long oil since, you know, the 60s, actually. No, no, it's over 100. And, uh, but I've been short stocks, too. NASDAQ. And it just, I mean, QQQ has finally broken below 600. I mean, it closed below 600 on Friday for the first time in a while. So, we'll we'll see how that goes. But I think it, it just feels to me again, as I said before, earlier, you know, like the market right now is pricing an inflation shock as opposed to a growth shock. And because the market believes that this war is going to be fairly short-lived, you know, short-lived enough that the market is not to worry about a a significant slowdown in growth as a result.
>> And then the only reason why the market thinks that this is going to be a very short-lived war is because the market either thinks that Trump is going to tackle or that the US is going to declare victory very soon, that's going to that the regime in Iran is going to fall like, um, like whatever, very, very quickly. And I'm just saying to you that these two assumptions, which is geopolitical in nature, it's just not true. I I I I think Trump, I think it would be difficult for Trump to tackle easily on this one.
>> Okay. And, um, and I don't see an easy way for Trump to be able to do a knockout, okay, of Iran, you know, essentially in the first three rounds.
>> Mhm. Okay. So, um, at what point do you think the markets might realize this, that hey, this is going to be much more protracted? Like, what is the kind of timeline?
>> I think this week is going to be very important because I think, you know, the the oil price is going to be a huge part of this because obviously the main channel,
>> Okay.
>> That's driving financial markets from this war is oil price.
>> Mhm.
>> I mean,
>> $100 a barrel is already very,
very high. Okay. Should this thing keep going higher? Because for every day that the Strait of Hormuz remains closed, that means countries are having to dig deeper and deeper into their reserves to essentially, you know, to keep their economy running. I think another week of this is, it's going to be, we're going to be at that point that countries are going to be running out of oil, and then that's when prices are going to go up. And I think it's interesting because it's very different than, you know, in February 2022 when Russia invaded Ukraine, when a lot of people got long oil very quickly. This time, if you look at CFTC data, the market recently started to buy some oil, but you know, the long oil position is still very low. And and that, that's that's the problem. The problem is that, you know, like the market is just completely unprepared, just essentially right now looking to Trump to taco. And I just don't see how this is going to happen very soon. But you know, what, I could be wrong. But the, uh, I'm not saying that obviously Trump is feeling the pressure. I'm sure a lot of people around him are saying, that's it. But I personally think that this is so central to his legacy. If he gets out of Iran now, I think it will just allow China to really dramatically increase its footprint in Iran, and then we get to a point that Iran becomes off-limits to the US, and then the whole dynamic in the region will turn against the US. And I think this is why there's so much riding on how this thing finishes. I'm going to have to assume that a lot of people around Trump are telling him, you know, if you go down this path, you got to stay with it. You cannot go in and then decide after like two weeks to say, time out, time out. That kind of thing. If you've done it already, if you've gone into Iran, you you have to finish the job because otherwise the outcome will be worse than not going in.
Yeah. And maybe again, like the legacy is much more meaningful than where the stock market's trading ultimately. Maybe he has that realization now of like, what's going to be more important? And if if he's successful and he can pull off the regime change, like you said, he'll be remembered as like one of the greatest presidents of all time. Is that right? Would that be fair?
I have no doubt about that. I have no doubt about it.
So do you think that, do you think that's the most likely outcome then?
I I I don't know. I I I no, I don't think that's going to be the most likely outcome simply because I think it's going to be very difficult to do a regime change without putting troops on the ground. And right now, even Trump, regardless how much is at stake, I find it difficult to believe that he will commit US forces, okay, you know, ground forces in in Iran.
And and and I think the most likely outcome, which is not a bad outcome from the US standpoint, is simply Iran descends into civil war, where you have these, you know, Revolutionary Guards, the senior officers return to their provinces and then become warlords. And then they seize critical assets and the country becomes divided. And you could argue that, you know, I mean, so one way for Trump to win this war is by devaluing Iran as an asset to China, right? Because if Iran becomes has a civil war, anarchy, and then warlords, Trump at the end of the day, let's not be too naive here. Trump doesn't care about the democracy of the people there. Like it's like, you know, he went into Venezuela. He he took he took Maduro out not because he was trying to promote democracy. He was just trying to get his hands on Venezuelan oil. The same thing with Iran. They just want to reduce the strategic value of Iran to China.
That means that, you know, a civil war, you know, so be it.
Yeah. What do you think? What do you think is the conversation inside the top of the CCP? Like, what do you think Xi Jinping's thinking about right now?
I think Xi Jinping is thinking like, you know, like we we're not going to send troops into Iran because he, you know, they didn't want to have an open conflict with the US, even though this is arguably the first real proxy war being fought between the US and China ever. Okay, by the way. And I think that however, I suspect the Chinese are also thinking that the U that Trump is weak. They can see that the Supreme Court decision ruling having weakened Trump. They think that, you know, they don't believe that he has the stamina to because everybody, the whole world saw that Trump taco again and again last year. So I think that, you know, the Chinese probably behind the scenes are sending money to Iran, helping them to strengthen their, you know, their defense capabilities and all that stuff. Okay? Keeping them well supplied when it comes to food and basic necessities to keep them going in the war because they they probably also thinking that Trump does not have the nerve. And that's another reason why I think, you know, this is actually very important because if the Chinese think that way, then the Iranians thinking that they have China's got their back, then they're going to be even less likely to basically to taco on their part. So the question really is, is Iran going to blink first or Trump is going to taco first? Right now, I think the China angle makes it much more difficult for Iran to blink because they know they have a one fewer reason to blink because they think they got China basically behind them. And then, you know, because China is behind Iran, there the stake is so much higher, makes it less likely Trump is going to taco. So I think China is actually very central to this entire equation.
Yeah. I mean, but then Trump's much less likely to taco than Yeah. Gosh. Wow. I feel like, David, we're probably going to be talking about this for a long time. I imagine we'll have you on for more episodes where this is still front and center of the conversation. Um, what Okay. What are the advantages for the US? And do you think this is worth the risk?
I think, you know, listen, I mean, I I think, you know, I think from the US perspective, there's probably not that much choice, as I said before, because one is, you know, the way things are unfolding in Iran in terms of the relationship between Iran and China, you know, like this could be the last window of opportunity for the US to actually affect the regime change before like Iran becomes essentially the regime becomes completely, you know, buttressed by with with Chinese money, Chinese technology, and so on and so forth, becomes untouchable. So I think the US doesn't have much of a choice. Okay. But I I do think on the other hand, and and I think from Israel, there's not much of a choice. But but this is this is how it is, right? Because in a way, the the geopolitical, you know, essentially the because this is about, in the end, we talked about this, this is about the unipolar world, in a US-centric multi, you know, unipolar world trying to retain its hegemony, you know, with China and Russia trying to promote a multipolar world order. I think in a way, it sort of makes sense that it's understandable that the US wants to keep things, you know, as what it is. And for China, I mean, by the way, this is a lot of Americans don't realize the story. This is a very this is a very important background in terms of China's interest in Iran, which is that, you know, a lot of Americans simply, oh, well, they, you know, you learn in, you know, in grade school, let alone high school, that, oh, Japan invaded Pearl Harbor. The question is, why did Japan invade Pearl Harbor? You know, why did Japan invade Pearl Harbor, you know, the way they did? Well, what really happened, okay, was the fact that a week before Japan invaded Pearl Harbor, President Roosevelt imposed a total oil embargo on Japan, okay? Because the US is the most powerful navy in the world, US can enforce basically, you know, oil embargo on anybody. And then Japan therefore was staring down into the barrel. And they can see that if the US succeeds in imposing this bar, this this total oil embargo, it would just Japan had weeks before its economy just completely collapsed because you cannot have a modern economy without oil, the manufacturing, nothing. So Japan was literally in a total desperate. They were in a desperate situation. And then the government met essentially for three days and three nights to try to figure out what to do. They ended up essentially deciding on this very risky attack on Pearl Harbor in order to destroy the US Pacific fleet so as to give Japan enough time to invade Malaysia, Indonesia in order to get their hands on oil there. Okay. So this whole, the entire Pearl Harbor attack, it was not, oh well, Japan decided to invade the US. It was literally to weaken the US ability to stop Japan from getting its hands on its own oil in Southeast Asia. Now imagine now you've got the same situation with China, right? China remembers this lesson. I mean, this is what Japan did. US did what it did to put to keep Japan in its place and drove Japan into a desperate gamble. Now, in China, why the whole entire Belt and Road Initiative is about building a land route from China to the Middle East onto Africa. And the main reason is because China is very wary that one day China's going to wake up and the US has imposed a total embargo on Chinese oil imports or Chinese basically iron ore imports and whatever everything else. And this is the reason why China has been building this land land route. I mean, this is the main reason this is why Iran is so important because that's, you know, so so you got the railroad there and from there on it goes on to Africa and so on and so forth. But what I'm saying to you is that, you know, this is what happens. It's it's about the struggle and the rivalry and the struggle, you know, of the two big powers. And then but but the struggle itself, you know, promotes conflict and it leads to war, right? That China is trying to do this in order to preempt the US from imposing a choke point on China's, you know, access to Africa and the Middle East. But the US sees China building a, you know, you know, the Belt and Road Initiative as threatening US interests in the region. So then they start to basically uh compound each other. And that's what happens, you know.
Interesting. Okay. Is there a way? I don't know. Is there a way? Is there a risk or, um, or is there an opportunity for the US to kind of [ __ ] that Belt and Road Initiative? And I guess what would be the knock-on effects of that?
I think would be, I think it would be difficult. I I think right now, I mean, obviously if they can if they can affect the regime change in Iran and replace the regime Iran with a pro-US regime, then China, you know, the 10 years of investment that China put into building this thing, you know, a road, a railroad to Iran would be worth nothing. That's it. That's what it's coming down to. And and I think, you know, this is why China has no incentive for the US to succeed in Iran. And that's where it comes in. H so fascinating. David, I feel like I always learn from you. Okay, so just to recap from the investor perspective, you're short the markets right now. Um, do you like gold or anything?
I think, you know, like I I don't like the way gold's traded the last few days. Well, I like gold. I I think what what is very clear is this, right? I mean, if you think about what really happened in the last week, right? What really since the war broke out is that, you know, all we've seen so far until now is all the crowded positions got stopped out, right? So the most popular trade year to date was emerging market equities. What was the worst performing asset last year? Emerging market. Last week was emerging market equity. Everybody and their grandmother was short the US dollar. Was the best performing currency last week? Was the dollar.
You know, everybody was long steepeners. Okay. And guess what? The, you know, the curve actually flattened last week. Everybody was trying to short Bitcoin. Guess what? Bitcoin was up 7% last week at a certain point. So, what I'm saying to you is that so far this war, I mean, you know, it's only been seven days. So, you know, it's still very, very short war so far. We're just in the beginning. So far, all we've seen is that people saying cutting back their positions, okay, across. So, this crowded trades got taken out. Okay. I don't think the market has started to really price the fundamental consideration of this war. Okay? And that's what it really comes down to. And so, for example, S&P did well last week because the Magnificent 7 did well. The Magnificent 7 did well because everybody was underweight the Magnificent 7. I mean, year to date, I mean, Magnus 7 has gone nowhere today, right? And all of a sudden, people say, "Wow, you know, this is a shock liquidity. Everybody's trying to get back into liquidity." And guess what? Magnificent 7 did well. And as a result, S&P did well, and then the US did well as a result, and the dollar did well. So there's a lot of D stuff going on right now. It's about positioning. It's about liquidity. But if this thing were to drag on, you know, until the end of this week, I think a lot a lot of economists, strategists, Wall Street people are going to start talk about the sort of the longer term consideration, and that's when we might see, um, you know, we might see a a more pronounced risk off than we've seen so far.
Yeah. Risk-off environment. Um, and do you think we'll see a recession if that's the case?
I I I think a recession is still, I mean, I I think with Trump at the helm, I'm not too worried about a recession. I mean, I I think, you know, like I I think, you know, I mean, I don't think he's going to go crazy.
Okay. But the, um, even on this Iran thing, so I I think, you know, I I think, you know, like, you know, so from that point of view, I don't think it's going to become totally irrational. I mean, it becomes totally irrational if China with, I mean, there are scenarios that we can tell, but right now, sure, because, you know, if you think about this another way, right? This is where psychology is also very important. You say, okay, fine, the big story of 2025, 2024, 25 is this massive retail inflows into stocks, crypto, and everything. And that essentially should be viewed as a massive easing of of financial conditions, even, you know, okay. But we now know that there's no doubt that private credit has an issue. The AI bubble is starting to, you know, look long in the tooth. If all of a sudden this war, you know, like we see an oil price shooting up, there's not much you can do about it and so on and so forth. And then, you know, you know that's a tightening of. And then the Fed cannot cut rates because everybody's worried about inflation. That could compound the stress right now in private credit, the stress in, you know, the AI bubble. And then it's a very different story. Okay. And this is also why, you know, like in a way, you could argue that without this war, like, you know, this private credit thing is a bit of a concern, but it's not the end of the world on its own. It's not going to push us into a recession. But if you have a whole bunch of things happening at the same time, that becomes a different story. If like, you know, if China decides to essentially come in and more directly help Iran, we've got a problem here.
Okay. If if they manage to, let's just say, hit a US aircraft carrier and 20 Marines die as a result, then we've got a problem. So there are a bunch of different, this is why this war is important because the system has some fundamental fragilities that on their own, they're they're they are okay, they can be coped with. But if this war goes in the direction that the market doesn't know how, because the market is used to Trump tacoing, if he doesn't taco, then the market will have to price back the risk premium. That's when things could happen. A lot hangs in the balance. And would it be fair to say This is like probably the most dangerous phase because like, I guess we'll get more clarity on like, is it short or is it going to be protracted?
Yeah, I think I think this is why this week is going to be very, very, very super important. It's going to be very, very super important because I mean, like oil price right now is not a sustainable level. Either it's going to be heading down because like, you know, you know, you know that the that the US has defeated Iran and then the the grip on the, uh, the Strait of Hormuz has loosened, or that Iran is going to continue to basically hold the Strait of Hormuz and the oil price is going to become much higher.
So like, so either way, we're right now in no man's land in oil. It's either going to be much lower or much higher.
Okay.
And if it goes much higher, then we've got a problem.
Yeah. And that just releasing the reserves, that's just like a little temporary band-aid. That doesn't solve anything because there's like the headline about the meeting with the the G7 countries. Yeah. Okay. Gut check question for you before I let you go. Um, let's do a two-parter. Two-part question. What is that one thing that's keeping you up at night that not enough people are talking about? And then maybe on a positive note, what's something that you're optimistic on or hopeful about?
I I think, you know, look, obviously a lot of people have been talking about the Cutrinia report, right? You know, like I I think, you know, I you know, it's actually very interesting because I think that I think they got it completely wrong, by the way. I mean, I'm, you know, as you know, I I'm it's actually funny because their whole entire thesis is built on two assumptions. One, that AI is really, really, really good and it's going to basically like, you know, it's going to get everybody fired. All right. And then the second assumption that they're making is that you're going to see a massive income transfer from the workers to the AI dominant firms like, you know, OpenAI or whatever, Anthropic, right? And then he's they're basically assuming that the money that's going to be accumulating, concentrating at the big AI dominant firms will not get spent or distributed as a result, like, you know, the economy short circuits, we're going to depression, right? That that's the whole setup. My view is quite different. My I'm I'm I'm not concerned AI AI being too good. I'm more concerned that AI is not good enough. I mean, to the extent that actually I think this is the reason why outside, I'm not talking about coding, right? Obviously, cloud code is very good. I mean, it's a game changer. I have no doubt 20, 25% of software engineers they're going to have problems. I mean, in terms of keeping their jobs over the next three years. But outside, you know, programming, coding, it just seems to me that AI has not, you know, we've got many generations of AI now, they have not really sort of got to a point that, you know, that can really take over any jobs. This is the reason why corporate adoption is relatively slow. So my view is that so I think I'm I'm I'm less worried than they are about AI being too good. I I'm more worried about AI not being good enough. And this is why I'm continue to worry about the AI trades, okay, that I don't know if you're not even that good and the competition is heating up, how you going to actually monetize? And that's my biggest issue. So I think from that point of view, I think what's happening, like I'm very optimistic. I I think the whole I think cloud code is game changer for the whole tech industry. In a way, it's a good thing. It's in a way is a good thing because in a way it promotes more competition because everybody can now essentially come up with reasonable codes to compete with the big companies and so on and so forth. That's why even the likes of Microsoft are, you know, are are shaking in their boots because in a way writing code is going to be so much easier. So that's going to be that's a good thing. Okay. But the bad thing is that I actually think that, you know, the whole AI trade is still riding on a false premise that it's going to be easy, that there's going to be a winner takes all type of outcome, that the winner is going to be pocketing a lot of money. Right now I don't see anybody making any money. And this is why I also struggle to see, you know, capex spending at this kind of ferocious rate being sustainable. And by the way, where it gets very interesting is that imagine, I think right now, a lot of these hyperscalers were really they need an excuse to pull back on their capex. I think they can now they're getting a bit wary. If oil prices were to stay up here for a little longer, that might just give them the perfect excuse to say, "Oh, well, by the way, the economy is weakening. We're going to have to pull back a little bit on our capex commitment." If that happens, you know, then we're going to have a big problem because the market will get repriced sharply lower. And I think that is where it gets interesting. That gets very, very interesting.
This is why I'm saying that in a way, if we were to get a big, you know, fall in the market or a recession, whatever, you need to start to see interaction between private credit, you know, AI trade and the world. If they start to, you know, interact with each other, that's when things can get potentially out of hand.
The perfect storm, if you will. David Woo, CEO of David Woo Unbound, author of the upcoming book Mary Go Round Broke Down along with Margarite Shinar. It comes out at the end of the month, so March 31st. I'm going to link for the folks who watch this show. Uh, I put a link to the book. It is a novel. It's a financial thriller. I've started reading it. Fantastic work. You have reviews from folks like Paul Tudor Jones, Howard Marks, like the who's who of of the hedge fund world. Amazing. Um, so this audience loves you and we want to support your work. So I'll make sure to link it in the show notes.
Thank you so much. And this book is important to me also because, you know, the reason why I wrote this book as a novel as opposed to another non-fiction is because I want to make this topic because the story is about globalization. Okay? And I think there's a lot of misunderstanding about globalization. And I this the reason why I wrote as a novel is because I want to make the topic as accessible to as many people in the universe as possible because I think, you know, there is a face I I decided to put a face on globalization so more people can relate because again, I I think we are now at risk because we said we talk about a lot of global issues and then none of this is actually good actually in the end because there will be no winners at the end of the day. Everybody would be losers. And I think I wanted I wrote this book in order to help raise awareness about what's happened to globalization. I'm not saying there's only good things. You know, I there plenty of good things, but what I wanted to basically make sure is that we don't throw out the baby with the bathwater. That's it.
David Woo, thank you so much for being so generous with your time, all of your knowledge, your wisdom, helping all of us learn and get better. We really appreciate any time that we get with you and I am so grateful and um, I hope everything goes well. Take care, be well, and I look forward to our next conversation. Thanks again. Thank you J for having.