Israel Strikes Iran

Jacob Shapiro and Marko Papic react in real time to Israel’s stunning military strikes on Iran. With key nuclear sites hit and top Iranian commanders killed, the cousins break down what this means for Iran’s capacity to retaliate, the role (or lack thereof) of U.S. strategy, and why Saudi Arabia’s response might be the most important of all. They explore the domestic politics behind Netanyahu’s actions, whether regime change is possible, and why oil markets barely flinched. A wide-ranging, unscripted conversation during a rapidly unfolding moment in Middle Eastern—and global—geopolitics.

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Timestamps:

(00:00) - Introduction

(00:27) - Initial Reactions and Context

(01:22) - Details of the Israel-Iran Conflict

(03:45) - Analysis of Military Actions

(08:11) - Geopolitical Implications

(17:48) - Potential Outcomes and Speculations

(32:52) - Civil War and Japan's Example

(33:25) - NATO's Campaign Against Serbia

(34:13) - Israel's Military Capabilities

(36:45) - US Options and Iran's Response

(38:46) - Conspiracy Theories and South Park

(41:36) - Iran's Limited Retaliation Options

(44:38) - Geopolitical Implications and Future Outlook

(56:34) - Closing Thoughts on Multipolarity

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Referenced in the Show:

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Jacob Shapiro Site: jacobshapiro.com

Jacob Twitter: x.com/JacobShap

Marko Papic Twitter: x.com/geo_papic

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Geopolitical Cousins is produced and edited by Audiographies LLC. More information at audiographies.com

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Jacob Shapiro is a speaker, consultant, author, and researcher covering global politics and affairs, economics, markets, technology, history, and culture. He speaks to audiences of all sizes around the world, helps global multinationals make strategic decisions about political risks and opportunities, and works directly with investors to grow and protect their assets in today’s volatile global environment. His insights help audiences across industries like finance, agriculture, and energy make sense of the world.

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Marko Papic is a macro and geopolitical expert at BCA Research, a global investment research firm. He provides in-depth analysis that combines geopolitics and markets in a framework called GeoMacro. He is also the author of Geopolitical Alpha: An Investment Framework for Predicting the Future.

Episode Transcript

Jacob Shapiro (00:02):
Hello listeners.
Welcome to an emergency episodeof Geopolitical Cousins Marco and
I drop everything to talk aboutthe burgeoning Israel Iran War.
You can write to me [e-mail] if you
want to get to me and Marco withany thoughts or anything else.
Otherwise, uh, as you can tell by howfast I'm talking, I should slow down.
I've had a lot of coffee andthere's lots to do today.
Take care of yourselves.
We will see you out there.

Marko Papic (00:27):
I dunno how much time you have, but I have a full two.
I

Jacob Shapiro (00:30):
I've got one, but, um, okay,

Marko Papic (00:32):
let's crush it Deb.

Jacob Shapiro (00:33):
Let's crush it.
We are live.
Go for it.

Marko Papic (00:40):
Alright, Jacob, we gotta talk about, um, a serious situation that I am
afraid we didn't really hit on right away.
The Holly button has struckagain, I. And we now all expect
Oklahoma City thunder to retaliate.
And we have to see what that looks like.

Jacob Shapiro (01:01):
Marco, this is why we're cousins.
'cause I literally was thinking ofintroing the same way and guys, Marco
was so excited, he was like, no,no, I wanna do the intro this time.
And you did it so you could do that.
Joking.
I was gonna do that.
Yes, we are.
The pacers are up to one.
What asymmetric means are the thundergoing to use now that Yeah, I'm, I'm

Marko Papic (01:17):
totally none.
I mean, they're conventional, right?
It's the asymmetry that's winning anyways.
Okay, so we're here.
Emergency pod obviously becauseuh, Israel has struck Iran.
Uh, they have struckIran's nuclear site to.
In singular sites.

Jacob Shapiro (01:33):
Sites?
No, no, no.
They, they also, it's not clear howmuch damage they did at four Dough,
but it looks like four dough also,uh, incurred some damage as well.

Marko Papic (01:40):
That's interesting.
Okay.
So, uh, more than just Naans,naans appears to be, uh, the one
that will strike like heavily but

Jacob Shapiro (01:47):
heavily.
Yeah.
We at least have video of smoke.
We should say to the listeners,like, this is, it's Friday,
June 13th, 10:04 AM Central.
What is, is it 8:00 AM Pacific?
It's 8:00 AM.
Um, we're gonna push, we're gonnapush this out as quickly as we
can, but this is the fog of war,so all the initial reporting will
probably turn out to be wrong.
Um, and some of the things that wetalk about may even be overtaken
by events, like by the timethat you're listening to this.

(02:08):
So like, take everythingwith a grain of salt.
The hardest part of doing analysisat this part of, in this cycle of
a, of a, of an attack like this iswe don't even know what we know.
Um, so, but yeah, we'lltry and parse through it.

Marko Papic (02:20):
That's true.
And I obviously agree with everythingyou say, but, uh, I do sometimes feel
that my first gut reaction is the best.

Jacob Shapiro (02:29):
Yeah, no, I think there's something to be said for, um, I mean, I
find gut and instinct is really importantan an important tool in an analyst's, um,

Marko Papic (02:37):
tool.
Well, I think you know what it is.
I think because as, as the situationdevelops, oftentimes the two sides have
an interest in, uh, flagging that theycould deviate from their constraints.
Mm-hmm.
That they, that they can do morethan what you would've thought
at the onset of the crisis.
But the truth is that they can't, youknow, and that's why sometimes day

(02:58):
one analysis is better than day five.
Obviously, day 30 is gonna be better.
I, I, I don't, I don't disagree with that.
But the difference between dayone analysis and day five analysis
is often very, very profound.
And it's because over the nextfive days, you're likely to have
your fate in your framework shaken.
Think about April 2nd, reciprocal tariffs.

(03:19):
What happened over thecourse of the next five days?
I mean, most people said no.
I mean, they're serious.
They're not gonna negotiate.
Look, Peter Navarro's onTV is saying they're not.
That's because both sides at thispoint right now, Israel, Iran, us,
everybody has an interest in, um,fronting in saying, hold me back.
You know, I got morethan you think I have.

(03:41):
Anyways, uh, sorry to interrupton that, but like, let's, let's go
over everything that's happened.
So, um, yeah, there's reports thatIsrael used, actually a ground incursion.
There's reports that there were, uh,actually some Israeli commanders commandos
that they have might have taken someof the scientists, uh, from what I

(04:01):
understand, there's two, uh, very highranking military officials in Iran.
They have been targeted for assassination.
Uh, several, uh, Iranianmilitary bases were struck.
Um, multiple strikes in Tehran.
I'm not clear what, other than of course,some of the residential areas where, uh,
officials were living like scientists and,and, and military policymakers and so on.

(04:24):
Naans, Fordo, not the bushyhair and nuclear power plant
from what I understand.
Um, of course that one is legitimatelyfor civilian use, although everything is
of course part of the nuclear program.
Um, I dunno, am I missinganything else on Israel's?
Oh yeah.
200 fighter jets were involved.
Doesn't seem that refueling, uh, planeswere involved, but they probably were, I

(04:46):
think, uh, US has delivered one to Israel.

Jacob Shapiro (04:51):
Yeah.
Um, there's a, there's alot unclear about that.
Um, well, so a couple things.
Um, the first is, um, so we havesome confirmed deaths this morning.
So the Chief of Staff of the ArmedForces, Mohammed, I'm gonna, I'm
not a Farsi speaker, I'm an a I'm anArabic speaker, so I apologize for
butchering these names, but MajorGeneral B Bhe, I think is his name.
Then you've got General Hussein Salami,not Soleimani Salami, who is the

(05:15):
new commander in chief of the IRGC.
He is gone.
Then you've got a Deputy Commander of theArmed Forces, um, a head of the airspace
unit of the IRGC taken out, um, one, atleast one politician has been taken out.
Um, Ali Shahani, who is aninfluential Iranian politician.
He's a close confidantof the Supreme leader.
He was overseeing the nuclear talkswith the United States, which is kind

(05:37):
of crazy when you think about it.
Like not just an assault on Iran, butan an assault on the nuclear deal.
And the negotiations itself on, on

Marko Papic (05:44):
diplomacy itself.

Jacob Shapiro (05:46):
I know, and like some nuclear scientists taken out as well,
there has been some video on socialmedia of Israeli refueling airplanes.
It's not clear whether they'relegit, it's not clear whether it's
over Iranian airspace or over Syrianairspace or over Iraqi airspace.
Uh, Marco, I dunno if youremember Sim Tac though.
He was on my podcast a couple weeks agoand he talked about how when Assad fell,

(06:06):
one of the things Israel did was it veryquietly bombed the shit out of Syrian air
defense so that Syria skies are basicallyopen to Israel if it wants them to be.
So part of me is thinking maybe whatmade this a little more realistic than
even I would've given Israel creditfor, is maybe they're able to refuel
over Syria or maybe they're less worriedabout incurring things over Syria.
Um, and then the other, the other partthat I would, um, add to your summary

(06:29):
of what happened is the sort of.
I, I, I don't wanna say strange, butthe US role in all of this, because the
initial response last night when youand I were texting was from Marco Rubio.
That was basically Israeltook unilateral action.
We are not involved with this.
Iran should not attack us.
And then you wake up to Trump on truthsocials saying, I gave Iran a chance.

(06:50):
Uh, they could still make a dealif they want, but there's more
coming and Israel is like gonna,you know, basically destroy them.
Um, and then you had Axios WallStreet Journal reporting this
morning that, that not only.
Um, is, is the United States okaywith this, but that the United States
knew and that the United Statesparticipated in the deception to lull
Iran into a false sense of securityby telling them it's not gonna happen.

(07:13):
There's gonna be more time here.
United States is not for this.
I don't know quite how to run that down.
Um, I think you're also right to pointout that, um, there are multiple Israeli
security sources that are talking aboutthe Mossad being on the ground in Iran in
much the same way that Ukraine was on theground in Russia with their big attack.
So, you know, precision guided.
Weapons located next to Iranians,surface to air missile systems, um,

(07:37):
drones, uh, actual commando units goingafter scientists, things like that.
Um, and I think part of that,there, there's two parts of that.
Number one, and I, I was justtalking to an Iranian security
expert for, for my other podcast.
Um, it's a sophisticated social media andpublicity campaign too, because Israel
is all over Persian social media, puttingout things about how this is an assault

(07:58):
on the regime, not on the Iranian people.
That the, the Iranian regimehas been attacking you.
Israel is attacking this and sortof sowing those seeds of doubt.
Um, but yeah, obviously a hugeintelligence operation that
had to come forward there too.
And then the last thing I would justadd to the summary, and I'm curious,
I mean, I'm curious for your takeson all of this, um, uh, Marco,
but in some ways, one of the most.

(08:19):
Blunt statements about whatIsrael has done thus far.
'cause if you like the French, Idunno if you saw Macron's statement,
he was like, we condemn Iran and itsnuclear program, like relatively softy
from some of these other countries.
But Saudi Arabia, I will quote, theKingdom of Saudi Arabia's, ministry
of Foreign Affairs expresses itsstrong condemnation in denunciation of
blatant Israeli aggression against thebrotherly Islamic Republic of Iran,

(08:40):
which undermines sovereignty and securityand constitute a clear violation,
right, of international law and norms.
So the Saudis that's at leastrhetorically, like slapping the
Israelis on the wrist, maybe behindthe scenes Mohammad bin Salman, is like
popping the champagne on the yacht.
I don't know, but, uh, yeah, that,that's at least my list of things.
Also, to add to what you said,

Marko Papic (08:58):
well we should probably start with the last one.
I know that our listeners might thinkthat's bizarre, uh, to start with
the Saudi statement, but the Saudistatement is the most important one.
I mean, if you're listening to thisand wondering what's gonna happen
to your retirement, what's gonnahappen to the global economy, it's
really the Saudi Iran relationshipthat matters more than anything.
I've said many times.

(09:18):
Um, by the way, I think oursecond podcast was about this.
Yeah.
It was about war in Iran.
Um, so the, I've said manytimes this year and last year,
Iran and Israel can go at it.
They can do whatever they wantto each other, and nothing will
happen to the rest of the world.

(09:41):
So this is a very important point.
Iran and Israel can have a fullout war for the next two years, and
it may be like a tree that fallsin the forest that nobody hears.

Jacob Shapiro (09:57):
Tree falls in the oasis or the desert, I don't

Marko Papic (09:59):
know.
In the desert.
Yeah.
The date tree falls over.
So why, why?
Because, um, look, Iran has to, uh, closethe straits of MOUs for this to be taken
seriously by anybody listening to this.
I'm assuming that Iranianregime is not listening to this.
You know, you guys shouldtake this seriously.
Israel is going at it.

(10:19):
Um, but other, other than that, I mean,look, um, the way that this conflict
articulates itself in oil prices, ingold prices, in stock prices is that Iran
has to close the straits or for moose.
And if the Houthis can close the RedSea, you know, uh, if the Houthis can
do that to the Red Sea, I mean, Irancould do that to the Straits of Remus.

(10:42):
And I just wanna explain thisbecause this is kind of complicated.
Iran cannot really conventionallyretaliate successfully, at least
against Israel or really anyone.
Uh, it can, you know, shoot someballistic missiles and drones.
You know, that's unfortunate for peopleon the receiving end, but it's not tragic.

Jacob Shapiro (10:59):
Well, and, and to, to that point, apparently Iran
sent its first salvo of drones.
Israel warned its population to get readyand then sent out a, we got them all.
Don't worry, you can go back to your life.
So, I mean, just like laying it on

Marko Papic (11:11):
for a while.
But you know what, thatalso shows multiple things.
Jacob.
It, it means that Iran did not have aplan to retaliate, like ready to go.
Like, you know, you know, thisis one of those things, like this
is something that might happen.
Like I live in California, wemay have a huge earthquake.
I have rubber boots, I have water, I havesupply of food, like I have flashlights

(11:33):
this, like, if there's an earthquakeright now, my family and I are now
like, oh, well let's send some drones.
You know?

Jacob Shapiro (11:38):
I don't know, like,

Marko Papic (11:39):
no, like why isn't there a ballistic attack?
Why isn't there, you know,why isn't there a huge salvo?
Like, why are they not ready?
Instead, it's like some hundred drones.
Like it's, it's very, Imma amateurish,but let's leave that aside.
I mean, look, the point is, while Iran'smilitary is incredibly dilapidated.
There's an asymmetry to it in thatclosing, a shipping lane doesn't

(12:01):
require that much sophistication.
You can do it with drones.
You are attacking civilian tankers, okay?
They're undefended.
So you can, you can really makeit difficult for ships to transit
with very low sophistication.
Houthis have proven that, and so whileIran has no ability to conventionally
fight a war with really Israel or cconventionally to threaten American

(12:24):
forces in the region, they just don't.
They have enough sophistication toclose shipping causal oppresses to
go up, but they haven't done it.
Why?
Because, because of two reasons.
One, that will invite massive retaliationfrom the United States of America,
the kind that turnsyou into a parking lot.

(12:46):
Iran has no way to defend against that.
So it's kind of crossing theRubicon that is the nuclear option.
Actually, it's not nuclear weapons.
It will be closing the streets of, onceyou do that, you know it's fair game.
At that point, even China'slike, Hey America, please can
you turn Iran into a parking lot?
So that's the first issue.
The second issue is that it wouldtip the scales of conflict in the

(13:08):
region so vastly against Iran becauseit would invite Saudi participation.
As you point out, Iran isholding on to some very nice
juicy assets for the long term.
One of them is Iraq.
It's holding on to Iraq because theSaudis effectively seeded Iraq to Iran
when they negotiated their 2022 Deante.

(13:31):
And so there's a quid pro quo.
Saudi Arabia said to Iran, youcan have Iraq, you can control it
through your proxies, political andmilitant, but you leave us alone.
No more drone attacks againstour energy facilities.
And notice that this Detant hasheld from October 7th, 2023 onwards.
It's held through the IranisIsrael missile strikes in 2024.

(13:55):
They were unprecedented and thepeople thought would cause oil
prices to go through the roof.
They didn't.
It's held throughout the Houthis whoare allied with Iran, not proxies,
allied throughout the HTI drone campaignagainst shipping in the Red Sea.
Notice how all the drones wentsouth, as if their joystick controls

(14:15):
are stuck in the south position.
None of them went north to Saudifacilities or Persian Gulf.
Why not?
I mean, hey, Houthis, if you wanna makea big splash about what's going on in
Gaza, shut down the streets of ous.
It's kind of equidistant to the Red Sea.
So why haven't the Houthis done that?
Because Iran told them not to.
Iran and Saudi Arabia have aDeante, and it's a very important

(14:36):
one, and it's the most importantpart of this story to today.
It's not about Israeli capabilitiesor cool special forces or the
next movie that will be directedabout like their incursion.
Like everyone's like obsessingabout silly little military stuff.
The most important question is what willhappen in terms of Iranian retaliation

(14:56):
and will they rip off the bandaid?
Will they cross the Rubicon,whatever analogy you want, and
attack Saudi facilities andshipping through the per of Gulf?
And my answer is no.
And that's why that Saudi statementis so important because the Saudis
are saying like, look guys, likethis is between you Actually,
no, they're not even saying that.
They're actually saying like, yo,Israel, Israel is the bad guy.

(15:18):
They're straight up sayingIsrael's the bad guy.
Yeah.
Uh, which is not that much of a shift.
I mean, they've been saying thatreally since October 7th, uh, and
throughout 2024, although they didparticipate allegedly in shooting
down some projectiles that wereflying over Saudi territory.
And, you know, uh, the way they justifiedthat to Iran is like, Hey man, like.

(15:38):
You don't need to fly overSaudi Arabia to hit Israel, you
know, like, look at a map, bro.
Like, so please don't, youknow, like, like, yeah, we're
gonna defend our airspace.
Like that's, so that wasn't really,like a lot of people in the West
thought that this was pro Israeli.
It's not, uh, they'redefending their airspace.
So I think this is why Jacob, my hottake on this is Iran does have the

(16:01):
capability to disrupt shipping and causeoil prices to go up a hundred dollars.
But there's two things that ifthey do that, there's two bad
effects that will happen to them.
America, American military isnot as hot as people think it is.
But let me be very, very clear.
There's one thing that the UnitedStates of America does better
than any country in history.
I mean, and, and not better.

(16:22):
Like it's number one, it'slike number one, 2000.
Nobody pulverizes you from 30,000 feetlike the US Air Force, when America
doesn't care about in invading, whenAmerica doesn't care about putting,
uh, boots on the ground when it doesn'tcare what you do to your own people,
when it doesn't care about turningyou into Wisconsin and making sure

(16:45):
you have like Wendy's on every corner.
When America just wants toflatten you, it's, it's unrivaled.
And so if Iran crosses thatRubicon, it will be punished.
And then the second issue is that ifthey cross it, if they get on the bedside
of Saudi Arabia, they tilt the regionalbalance vastly against themselves.

(17:06):
Basically Saudi resources, but alsoSaudi intelligence capabilities in Iraq.
Will they be activatedagainst Iranian interests?
And then, you know, it's reallygame over for a little semblance
of hegemony that Iran still has.

Jacob Shapiro (17:24):
Yeah.
Um, well first of all, you uh, youbetrayed your lack of knowledge of the
geopolitics of the Midwest because itwouldn't be a Wendy's on every corner.
It would be a Culver's.
And I hope that the five Wisconsinlisteners that we have really appreciate
that call out from yours truly.
'cause I've eaten enough of thosecheeseburgers and I'm on a perpetual
quest as a Jew to find the greatestcheeseburger in the history of the world,
which is, you know, you as you know,funny for lots of different reasons.

(17:46):
We can get into that another time.
Um, well, I, I have two or three thingsI wanna say in response to what you said.
'cause I, I can get along with mostof what you said, but I, I, I wanna,
I wanna think about it also from adifferent angle, which is, um, it seems
to me analytically, or one of the thingsI'm trying to parse is, was this an
attack on Iran's nuclear capability?
To set it back or to wipe it out, or isthis really an attempt at regime change?

(18:09):
Because Israel has also said,look, this is not a one day thing.
We're ready to go for the next twoweeks, and the Israeli population
is ready to endure whatever ithas to do for the next two weeks.
We took out.
All those guys that I mentionedin the first wave, you also
saw what we did to Hezbollah.
Like the unsaid thing thereis supreme leader ham hamani.
Where are you?
Do you feel safe where you arePresident of Iran, where are you?

(18:33):
Do you feel safe where you are?
You shouldn't.
Um, and this is the other thing I,uh, that's sort of part of this,
which is, um, you know, Iran'smilitary dilapidated fine, but this
is not just about an inability to,um, to have conventional offensive.
Counter attack capability.
It looks like Israel has just decimatedtheir ability to defend themselves.
Yes.
I mean, at, at least here on June 3rd at10 o'clock in the morning like this, I,

(18:55):
I don't wanna say it's a little cavalierfor me to say that Iranian skies belong
to Israel, but Israel is hitting whateverit wants, however, often it wants with
fighter jets that I know can't, like,you know, these are long distance flights
that the Israelis are having to take.
So unless they're secretly goingoff a carrier, a US carrier, or
out of Azerbaijan or somethinglike that, aggregators, I'm not

(19:16):
saying that's what happened.
I'm just saying unless there's somesecret here we don't know about.
Like, you know, they're goingalong, along sort distance.

Marko Papic (19:23):
Don't think we're, I don't think we're big enough
to be aggregated, but Jacob.
Couple, well, we, we

Jacob Shapiro (19:26):
might be after this times of crisis or when,
or when people listen in.
But the reason I bring that up isbecause, um, well, it's twofold, number
one, like you're right, as long asthis Iranian regime stays in place,
but what if, and it's a huge gamble andI'm not sure they're gonna pull it off.
What if this is the end of the Islam?
Yeah.
So public I would have to,and that's a whole big thing.
And then the second thing I justwanna say, and then you can take the

(19:47):
wheel, is, you know, you said thenuclear option was a straight of whom.
This now gets to the questionof how far advanced is Iran
with a nuclear weapon itself?
Because if it's advanced enough to where.
The supreme leader was just saying, don'tdo the final screws, because I want to
be able to have this negotiation process.
But if it could be very simplyjust sort of, Hey, let's complete
the process really fast and have abomb, the thing that strikes me is

(20:10):
Iran's back is against the wall.
Their, their conventionaldefenses have failed.
They have no legitimate counter attackthat they can go to any attack that they
do on, you know, Persian Gulf shipping.
Anything else like that is gonnabring down the goat of long-range
bombardment on them, or is gonna breakthe Saudi thing, which is the goat.
Yeah, it would be really nice tohave a nuclear deterrent right now.
This is the whole reason theywant the nuclear deterrent.

(20:31):
Their proxies, by the way, are also gone.
Hezbollah's sitting it out.
Houthis know where to be found.
They're not gonna affect this.
So if you could have a nuke, likenow would be the time to show it off
and say, okay, if you keep coming atus, like here's a dirty bomb for you.
Like, we will go this far.
Like I, I was sort of having thatcrazy thought that I was as I was
thinking about all that anyway.
No, that's not crazy at all.

Marko Papic (20:52):
No, that's not crazy at all.
So, uh, first I think, um.
I don't think regime change ispossible, like Israel has not been
able to do regime change in Gaza.
Why would it be able to do it in Iran

Jacob Shapiro (21:05):
if it can assassinate the Hezbollah leadership?
And if let's say they take out thepresident of Iran and the Supreme leader,

Marko Papic (21:12):
I, I think that that just replaces them, right?
I mean, we've seen this story play outin with Hezbollah and Hamas as well.
Syria.

Jacob Shapiro (21:19):
Yeah.
But, but those are like littleJI groups that hide in bunkers.
This is a state that governs 80 plusmillion people, a large swath of whom
want nothing to do with these guys.

Marko Papic (21:28):
So, but isn't Well, yeah, I mean maybe, you know, um, there is also
the circling of the wagons that happens.
I mean, while vast majority of Iraniansdon't want to follow their leadership,
they're also anti-Israeli, you know, so.
Mm-hmm.
It can backfire and the difference thecounter that you should, you should.
Send at me.

(21:49):
The country is Syria.
Right?
But Syria, Syria was a country.
It's a great example of what happenswhen you completely isolate yourself.
Uh, Syria had Turkey against Assad.
You had Saudi Arabia raid.
I mean, Israel, Turkey, Saudi Arabia,and the United States, America we're
all on the same side, you know?
So that's, that's a goodexample of what happens, why you

(22:10):
don't wanna isolate yourself.
There's also actual militantson the territory of Syria.
So this isn't, I, I, I've heardthis regime change theory a lot
today, and I just, you know, I don'tthink that that's where Israel is
able to go, but it doesn't matter.
Look, let's, let's, let's arraysome of the things that you've said.
Um, in terms of military capabilities,Israel has some refueling capacity.

(22:34):
Boeing seven oh sevens, they haven'treceived the kc uh, uh, kcs yet.
Uh, which, uh, they, they've hadan order since 2020, so, uh, that
hasn't been delivered actually yet.
So they have some domesticones, but it's not.
It's not as, uh, sophisticated as whatthe Americans would give them if they
actually delivered, uh, the US airplanes.

(22:56):
So they, they're gonna have todo this in waves of fighter jets.
Mm-hmm.
The problem with fighter jets is thatthey're, uh, vulnerable to air defenses.
And this is where yourpoint is so critical.
Where is Iran's vaunted?
S3 hundreds?
They've clearly been disabled.
Last year's attack that Israelperformed, if you remember, it was a
single strike and everybody was kindof confused what the single strike was.

(23:20):
It apparently targeted the Raiderinstallations for the S3 hundreds sending
a message to Iran that we can blind you.
So, um, it appears thatthat's what's happened.
So it's fine.
Like Israel now has controlover skies, as you said.
The problem for Israel is that itstools for navigated Iran's skies are
still, uh, limited attacking withfighter jets, there's a problem.

(23:43):
You have to, they have tobe fully loaded with fuel.
Which means they cannot carry as muchordinance and the ordinance that they
carry is limited, particularly because theUS as is now very much known and has been
known for decades, the US has not providedIsrael with the bunker buster technology
that's required to fully damage Fordo.

(24:04):
Fordo is 40 meters underground,some say half a mile.
Uh, I didn't know that.
I thought it was just 40 meters.
Doesn't matter.
Many of the tunnels are 90 degree angles.
You know, bunker bustertechnology can't deal with that.
You need what the Americans have,which, which can completely destroy much
deeper, much wider range of penetration.

(24:24):
That's not what Israelis have.
So, um, this attack ultimatelyis not going to completely
destroy Iran's nuclear program.
I think that there's limits to howmuch Israel can do, and that's why
I think that ultimately we haveto also consider that both sides
are limited in what they can do.

(24:46):
And that's where the US is so important.
In a way Israel wantsto draw Americans in.
This is all, this has been for a long timea theory like what if Israel just done
ki does kind of like a halfway attack,hopes that Iran retaliates in a way that
matters to America, like attacks the base.
The air base in Qatar attacks the FifthFleet headquarters in Manama, Bahrain.

(25:12):
You know, the military bases in Iraqare, I think, fair game at this point.
It's fine.
Iran has attacked them before many times.
Uh, but if Iran retaliates against theUS or shipping interest in the streets
of MOUs, then this attacks from astrategic perspective for Israel is a win.
If it doesn't, it'skind of like not a win.

(25:34):
In fact, it probably accelerates thenuclear program, as you pointed out,
um, where Iran needs that breakoutcapacity as soon as possible.

Jacob Shapiro (25:46):
Yeah.
And I mean, and maybe theprecedent was already set.
Like I can, I can hear an Israelistrategist telling me I'm gonna, I'm a
weenie for what I'm about to say, butI mean, this is a preemptive strike.
Uh, while the, while Iran was negotiatingwith the United States like, and yes,
Israel is from a, from a technologicalcapacity, military capacity is so far
advanced than all of the rivals thatare around it in the Middle East,

(26:08):
that nobody can compete with them.
But that's not always gonna be the case.
Like we, we did our geopolitical powerranking a couple of episodes ago, and
I left Israel off the top 20 because Isaid, I mean, they're there today, but 20,
30 years from now, like, we don't thinkthat some of these other countries are
gonna be able to develop either nuclearweapons or drone technologies, or do
the things that Israel is doing to Iran.

(26:29):
And now Israel's done it first.
So, you know, like if, if you, if you areIran, or let's say you're Turkey or some
jihadist group in the future, like theprecedent has, al has already been broken.
So I don't know, maybe people don'tcare about precedents, but the continued
breakdown of international norms,which is also part of that Saudi
statement, like the, the rules are gone.
Like, it's okay, fine.

(26:49):
Like go, go like bomb Iran.
There's gonna be no like consequences,like nobody's going to punish you for it.
And well Iran, nobody's gonna see like,

Marko Papic (26:56):
yeah, Iran if they

Jacob Shapiro (26:57):
can, but it's

Marko Papic (26:58):
up to Iran to punish, you know, like, and if they can't
then they probably should have,uh, not supported Hezbollah us.
I mean, you know, like these areconsequences to what Iran does as well.
Yeah.
And that's where, that's where I think,you know, you can understand this attack
by Israel, even if they cannot actuallyhurt fordo, which is where all the

(27:18):
enrichment fci, uh, all the importantcentrifuges are for the enrichment.
So I, I don't think that Israel hasmanaged to overcome technological.
Deficiencies that it has.
Of course, the nuclear program isalso more than just centrifuges.
It's

Jacob Shapiro (27:34):
people, it's also humans.
They're going after people and they'vebeen going after people for a while,

Marko Papic (27:37):
for a while.
That's, that's all, that's, that's fine.
You know, like, I mean, but here's,but here's the issue though.
We also have to consider domesticpolitics of Israel as well.
There's clearly pressure on Netanyahu, uh,to basically, uh, you know, continue with
aggressive foreign and military policies,whether in Lebanon, in Gaza or Iran.

(27:59):
Um, he can't survive without that.
There has to be a perpetualwar for him to stay in power.
And the reason I say thatis not to criticize him.
I mean, God bless him.
He can do whatever he wants, you know,that's, that's his, that's his choice.
The issue though is that hedoes over the long term, it,
it doesn't, like his domesticpolitical logic is likely not this.

(28:27):
It, it is not as beneficialfor Israel in the long term.
And that is something I,I would point out as well.
I mean, if oftentimes domestic politicallogic will impede the geopolitical goals
over the long term, and I think one ofthe, one of the problems here is that,
um, it's not clear to me that regimechange would change anything for Israel.

(28:48):
Iran, Iran.
In Iran.
Yes.
And, and, and, and I think, I thinkany country in this region is likely
going to want to have a nuclearweapon like after this attack.
That's,

Jacob Shapiro (28:59):
yeah.
I mean that, that I think is already true.
I think you're underplaying thepotential significance of regime change.
And I actually think we're seeingthis play out right now with Syria.
I dunno if you saw like a week or twoago, Netanyahu basically said We want
the United States to broker peacetalks with the new Syrian government.
And Syria seems to be open to it.
Is, uh, I mean, Israel's wanted, youknow, some kind of, you know, Jordan or

(29:21):
Egypt level relationship with Syria sinceliterally the 1970s and hasn't been able
to get it because Assad was, you know,sort of sticking to those old things.
So if you can, and you know, now Syriais led by some former Jihadists, uh,
and like, they're gonna be willingto sit down with Israel to reach some
kind of agreement, probably, yes.
'cause they don't want tokeep getting bombed by their
more sophisticated neighbor.
They're gonna play alonger game going forward.

(29:43):
But I think if you, if you could takedown like the theocratic, you know,
thuggish element that runs Iran,and if you could get secularists and
power, I mean, that would be prettypowerful for, for Israel, I think.
I think that would be a really big deal.

Marko Papic (29:57):
I think, I think that is the conventional view.
I think that is the Israeli view,and I think that, uh, in a way
that's going to probably allow theregime in Iran to survive longer.
Because again, it's not Lebanon,it's not Gaza, it's a place,
it's a very large place.
You can hide in a lot of different places.
The idea that Israel is gonna be ableto take a, I just don't see that.

(30:19):
But you know, I couldbe wrong o obviously.

Jacob Shapiro (30:21):
Well, I don't know, but like, let, let's say that they,
let's say for the sake of argumentthat they can, like if, let's say
they assassinate the supreme leaderand the president in the next strike.
I'm not saying it, you find other.
Well, do you find other onesor do or or do people rise
up and say, we're replacing?
'cause there's already factionswaiting for this, waiting to fight
it out when the supreme leader dies.
Like there's internal incoherence Yes.

(30:42):
Within the Iranian politicalestablishment already.

Marko Papic (30:44):
He's very old.
Ands sick.
Yeah.

Jacob Shapiro (30:45):
And you know, the, and he's also been trying to, you know,
put his son forward to replace him,which is like, wow, like the Iranian
revolution only took 40 years to die.
Like, the whole idea was we're notgonna have monarchies in the Shah
passing things down to his stupid son.
Like, okay.
So now the Supreme leadership passesdown, like through hereditary means.
Um, which, which has gotten alot of pushback there as well.
But also think back to the Rouhanigovernment and how Rouhani was trying

(31:08):
to take the reins away from the IRGC andhe got his sort of hand slapped on it.
I was also, I was talking tothis, uh, Iranian security expert
before we got on, and he talkedabout to him one of the most.
Impressive things about what Israelwas doing was a sophisticated
social media campaign in Persiangoing after Iranian social media.
And he said there were basically twolike feelings on Iranian social media.

(31:30):
One was, this is not good.
We don't wanna be attacked by Israel.
You, you know, sort ofrally around the flag thing.
But the second aspect he said was therewas also this very real undercurrent
of, well, we don't care if the IRGCcommander gets got, he was killing
young Iranian protesters in the streetsas recently as a couple of months ago.
And this supreme leader guy who's tryingto basically put the Shah back on top
of us, except with Shiite theocratic,you know, antiquated ideas, eh, like

(31:54):
would we really be that sat like,yes, we'll have our problems with
Israel, but like there's also likesome level of, okay, like this is okay.
Like, it's not like we love thisregime that much and that there
aren't internal tensions there.
And for, for Israel, if you couldjust, like, I'm not saying you're
gonna make Iran your best friend, butif you could at least get it from.
Hey, you're the great Satan.
We're gonna wipe you off theface of the earth to little.

(32:14):
Hey, we're not friends.
Let's have negotiations.
Little Satan.
Let's be,

Marko Papic (32:17):
let's be clear.
But listen, yeah, littleI hear, I hear all that.
It's just that that's just notthe way the world works, though.
It does in the long term.
It does in the long term.
But like, I would have to digdeep into the historical bag to
find a case where something likethat happens during the conflict.

Jacob Shapiro (32:34):
You don't think Syria qualify?
I guess Syria was a longer thing over

Marko Papic (32:37):
time.
It just doesn't, it's been like,first of all, Asad didn't have control
over more than 50% of the territory.
It was, there was a civil war,there was a militant group.
Um, it's not like Israelcaused regime change in Syria.
You know, they aided it.
They were great participant in it, butthere was clearly a civil war since 2011.

Jacob Shapiro (32:58):
So, so what about, what about Japan?
1945.

Marko Papic (33:01):
Okay, fine.
Yes.
Great example, Jacob.
I will, I will concede once Israel nukesIran and invades it with a million men.
Yes.
So this is, this is my point.
Like, but but listen, butlisten, here's, here's a counter.
Here's a counter.
Mm-hmm.

(33:22):
They kind of both supportsmy view and your view.
1999 NATO air campaign against Serbia.
Hmm.
Okay.
I can tell you it definitely did notin the moment incite and any anti
mil sentiment, even pro-democracy,liberal people in Belgrade were
standing on bridges with littletargets saying to Nate Obamas right.

(33:48):
But basically 12 months later, you know,when you took stock of the situation
and said, what was all this for?
There was the revolutionin October of 2000.
Yeah.
So my, but, but that's, that'sa different situation too.
I mean, like, you know, Serbiatook on the entire alliance of nato

(34:10):
and NATO can do a lot of damage.
Israel can't, Israel cannotdo that level of damage.
So my, my question, unless,

Jacob Shapiro (34:18):
unless it nukes them,

Marko Papic (34:20):
right?
Well, yeah.
Okay.
Yes.
Uh, but, but my, my point, my point isthat even in that situation, it took
some time before people took that stockof like, Hey, what was this all for?
So I'm not saying that regime changecan't come as a result of this.
I just think it will be sometime later.
This is one of the many momentsin Iran's story that lead to the

(34:41):
realization by the vast majorityof the people in that country.
Like, this is stupid.
Like, we can't, we can't evenretaliate against Israel.
So what's the whole point of all this?
You know?
And I think that that's, that's possible.
I just, I, I would rather kind of focus,I. Because it's a more of a longer term
team and it's not gonna happen overnight.
Mm-hmm.
Um, Iran is a more sophisticated politicalsystem than like Gaza or Hezbollah.

(35:05):
And I, and I just feel alot of commentary today.
It's like if they just put some page ofbombs in pagers, you know, like, no, it's,
it's gonna be more difficult than that.
Nonetheless, for all their sophistication,size, strength, inherent kind of
geopolitical value, like their S3hundreds are clearly completely useless.
Their air defense system, thesurface to air LS three hundreds

(35:26):
they got from Russia fairlysophisticated, has not ha made a dent.
As you pointed out, Israel can prettymuch fly in and out, you know, it can
be just like a routine flight for theirfighter jets, you know, across the region.
Um, and that's a real problembecause what do you do at this point?
They're kind of like North Korea,Iran is kind of like North Korea,

(35:47):
and let me explain what I mean.
There's very few ways toretaliate in limited way.
Yeah, you, you either, youknow, fly some drones to Israel,
which Israel just destroys.
Or you go for broke and you shut down thestreets, or for most, and then, yes, we
should talk about regime change becauseonce the US starts using something that

(36:08):
Israel does not have, which is long rangestrategic bombers, you're cooked, you're
completely and utterly cooked, and at thatpoint you are risking regime survival.
You can block off the straits oframus while done, you know, because
civilian shipping, again, can't reallyevade anti-ship cruise missiles,
which Iran has, can't really evade.

(36:29):
Even little dinghies, you know, littlezodiac boats with like a dude with
a, with a shoulder launch surfaceto air missile, like whatever, like,
you know, it's, it's a real problem.

Jacob Shapiro (36:40):
Yeah, well, but, so I, I think that survive an important question.
Survive.
I think that's an importantquestion that you just landed on.
So let me rephrase it back at youbecause one of my clients this morning
asked me, you know, what are Americanoptions today after what's happened?
And I said, okay, there's basicallyfour they can join in and completely
wipe out Iran and lead to regime change.
Like that's one, um, they cancovertly support it, but not

(37:01):
sort of publicly be there.
So try and, you know, let, letIsrael take as many licks as
they want, but not get involved.
They can stay out of it.
They can be truly isolationist.
And, you know, the,the Rubio statement or.
Uh, maybe the donnall is anglingfor his Nobel Peace Prize.
They come in as the great peacemaker.
They say, we have made peacebetween Iran and Israel.
We're gonna tariff both of youunless you stop throwing the missiles

(37:23):
and the drones at each other.
Sit down against thetable and figure this out.
I'm asking you the questionthere is, where do you think the
United States goes from here?
Do you think the United Stateswanted this and like, wanted the
excuse that Israel's opening for it?
Or do you think that the United Stateswas like, okay, we'll use Israeli
aggressiveness to get to what we reallywanted, which is a deal with this regime?

Marko Papic (37:45):
I mean, I trust President Trump where he, when he tweets, sorry.
I do.
So I don't think that hewanted this, 'cause he said
that, and that is a problem.
That's why his tweet, that's why hisstatements today are so aggressive.
Marco Rubio's statement when thishappened was very terse like,

(38:06):
no statement about supportingIsrael's rights to self defense.
Mm-hmm.
Zero, zero.
It was like, Hey, Americawas not participant in this.

Jacob Shapiro (38:15):
Yeah.
The, the French statementwas friendlier towards Israel
than Marco Rubio's statement.

Marko Papic (38:19):
Right.
And then the next day Trumpis saying like, aha, I told
you so better make a deal.
And it's like, eh, I don'tlike, that's bravado.
Right?
Because this is embarrassingfor the US actually.
It shows it can't controlits vessels, you know?

(38:39):
And Israel is effectivelysaying, we're not your vessel.
You know, we're gonna do whatever we want.
And that's

Jacob Shapiro (38:46):
you.
You don't believe the, the conspiracytheory that actually, like the United
States wanted Israel to do this secretly,

Marko Papic (38:52):
one of, one of the greatest Salt Park episodes
is the one about nine 11.
It's when the boys find outthat nine 11 was an inside job.
Mm-hmm.
And.
They pursue this to, to, to its coreand George W. Bush and the cabinet

(39:13):
basically imprisons them because theyfind out that it wasn't an inside
job, but they find out that the USgovernment is propagating the myth.
The day blew up the Twin towers.
And so the, the boys confront GeorgeW. Bush in the episode and they're
like, why are you propagatingthe rumor that you did this?

(39:33):
And George W. Bush says,an incredible statement.
And by the way, if you're a conspiracytheorist, you have to watch this to
cleanse yourself of that stupidity.
And George W. Bush looks at thelittle boys and says, if people
don't think that we did it,they'll think we're incompetent.
If they find out that abunch of dudes in caves.

(39:56):
Destroyed the TwinTowers in New York City.
They'll think that we, theUS government is incompetent.
So yes, we're propagating these rumors.
So this is South Park.

Jacob Shapiro (40:06):
South Park is truly the brothers car of, of our time.
This is basically the grand inquisitorupdated with to, uh, you know, when I
was doing my things that are happening

Marko Papic (40:13):
right now.
Listen, Jacob, when I was doing my PhD,I, I kept referencing South Park so
much in my, uh, PhD philosophy class.
Yeah.
I had to take philosophy, you know,for political science, PhD. And, uh, my
professor was just like, can you makeme a DVD of like the greatest hits?
'cause clearly I've missed this in my,in my academic studies, like, so I agree

(40:35):
with you, but, but here's what I'm saying.
Of course Trump is gonna say, andof course the, the media machine
in America is gonna say like, oh,we knew ha ha, yeah, we've been
in on this planet from day one.
That's the whole thing.
We're not incompetent.
Our ally, Israel didn't justdo something behind our back
embarrassing us, quite frankly.
'cause we were about to meetwith Iranians on Sunday.

(40:56):
Yeah.
So I, I believe none of theserumors, and I don't care.
Like we could have MarcoRubio on this podcast.
You'll be like, no, Marco, you don't know.
I'm like, shut up.
I do know.
Fuck off.
Of course.
Yeah.
Oh yeah.
You guys were like in on it.
No, you weren't.

Jacob Shapiro (41:11):
You got spoiled.
That would be fun actually,to have to have little Marco.
And you can be big Marco.
I guess.

Marko Papic (41:14):
I guess I could, I mean, by, I guess so.
I don't know.
I, I don't think he's that little.
I think that's unfair.
But listen, here's my point.
Of course,
of course.
They didn't know.
They got caught completely unaware.
So what do you think isgonna happen the next day?
Like, uh, no.
They're gonna be like, yeah, we were,of course we knew, like, remember
what Trump was like, heads up.

(41:35):
Heads up.
Well, and I, and I think Trump, we do

Jacob Shapiro (41:38):
Trump to, to, you know, a point we've made over and over
again, like Trump has many faults.
He's a master at socialmedia and positioning.
Yeah.
He's positioned, you know, the UnitedStates to make it seem like he knew
what was going all along and this wasgood, but like now he has a choice.
Does he use that to, at least inhis truth, social post, it was
about all right, like you have tonegotiate or else you're gonna die.
Well,

Marko Papic (41:56):
the problem with that, you know what the problem with that is?
What the problem with that Jacob is, ifI'm Iran, I'm like, bro, come on man.
I just listened to geopoliticalcousins and Marco is right.
You didn't know.
And if you don't know, how can youguarantee to me that you can stop Israel?
If I make a deal with you,deal with you, oh, okay, cool.

(42:16):
We're gonna make a deal and I'mgonna get to keep my nuclear
program for civilian uses.
What if it's not there?
Because Israel, your vassalstate keeps bonding me.
Like if you cannot control Israel,so this is the problem for the
US if they cannot control Israel.
How can they make a deal with Iran?

(42:39):
And so that's why this is not justa, a, a funny little question,
you know, where we're like, Hey,like, hey, what did America know?
Oh, watch South Park, you know?
No, I mean, it's actually verycritical to this whole situation.
Israel is fronting as ifthey're gonna continue this
operation for the next two weeks.
That's what Netanyahu said.
This is not a one day operation.

(43:01):
And the US is supposed to meet inmusket in Oman, with Iranian officials.
And by the way, the, the, thehilarious part of this is us,
is like, we're still coming.

Jacob Shapiro (43:11):
Yeah.
And the Iranians were supposed to come,might be dead, they might not be alive.
How

Marko Papic (43:14):
do I get to musket, bro?
Like I, if I get in a plane,am I gonna land in Oman?
Like, you know, like there's, Israelisare buzzing around me, like hornets.
I'm gonna get in the plane and go to Oman.
You can't, you don't know what'sgoing on in the region, America.
This is what I, I'm now being Iran, right?
Like America, you don't, you haveno idea what's going on here.

(43:36):
You want me to get on the plane andcross the Persian Gulf and land in Oman?
In Musco?
Yeah.
So I can meet with you.
For what reason?
You can't control Israel.
Why would I continue these negotiations?
And this is where, this is wherewhat Israel did is truly pernicious
from an American perspective.
And I do think so when we think aboutthis from a profound level, like

(43:59):
what's profound about this attack, it'sthe break between Israel and the us.
I don't buy for one second.
The US was aware of thisoperation for weeks.
Now there's a talk how it lulled Iranto sleep by continuing to negotiation.
Shut up again.
Watch South Park episode.
This is America just trying to makeitself look like they weren't completely

(44:21):
unaware of what was gonna happen.

Jacob Shapiro (44:23):
No, now it is.
I don't mean, I think, I think creditto the Israelis, like there was a
psychological warfare aspect wherethey lulled the Iranians to Yeah,

Marko Papic (44:29):
for sure.
I, I, you know, obviously, but theyloved Americans as well, and I think
the problem now is how can you bea credible negotiator, you know?

Jacob Shapiro (44:37):
Mm-hmm.
Yeah, I have, I have two lightheartedpoints and then a more serious one.
The first is when you were talkingabout Israel, like wanting to bring the
United States in, it's ironic becausethat's basically the reverse Al-Qaeda,
like that was Al-Qaeda's strategy,like bomb the World Trade Centers,
and then you're gonna invite a biggerresponse and then people are gonna
overthrow the regime that you don't like.
So funny to see the Israelis taking apic, uh, page out of Osama's, uh, book.

(44:58):
And then also have, have you, hasit struck you that like Israel is
the real MAGA actor in the world?
Like in the last week they've bombed theshit out of Iran and have arrested Greta
Thunberg and embarrassed her and thenlike, you know, sent her back to Sweden
without her lunch money or whatever.
Like, I think they're the ones thatare really doubling down on this.
But the, the deeper point I wanted to saywas, and this is the part that makes me
nervous about what, what happens next?

(45:20):
Um.
Because I, I, I think we're in agreement,I think on most of the things that
we talked about, but it seems to methat Iran's back is against the wall.
They have no good options.
They're screwed.
And to your point, they can't, even,the negotiation with the United States
is not something they can credibly do.
To your point just now aboutIsrael, you can't control, you
know, your dog is off the leash.
Like, there's this, this Israeli actorthat's just gonna keep bombing us.

(45:42):
Why should we make any deal?
And it seems to me that if they'retruly desperate and if they have
any nuclear material to go with, orany kind of last ditch effort, like,
can they just really sit, maybe theysit there and take the punishment.
Maybe I'm like underestimatingthat as a potential choice.
It, it

Marko Papic (45:56):
depends.
I mean, yes, I, I hear you.
I think it depends what the US nowoffers them and how much, uh, you
know, look, I think, I think thatthis was 80% domestic politics, 20%
strategy, to be honest with you.
Hmm.
On Israel's part.
So that's, you know, that's my view.

(46:19):
Uh, I think that Benjamin Netanyahu hadto do this for domestic political reasons.

Jacob Shapiro (46:24):
Yeah.
I mean, he, you know, he had some,his far right religious partners were
talking about leaving the coalition.
So you're not, you're onfirm ground, you're on terra
firma there, and he, and if

Marko Papic (46:31):
he, if he loses power, who knows what happens to him.
So I think that, you know, like I, Ibuy that conspiracy theory, if you will.
Um, so here's what's gonna happen.
I think, um, there is a path here.
It's a narrow one, but I thinkthat, um, if he did enough, you
know, then he can tell the Americanslike, okay, go make a deal.

(46:52):
Like, I'll, I'll tone this down.
Like, I'll be amenable now, now thatI've done this and maybe a couple
more days of like some targets, I'mamenable to being put back into the box.
And that opens up a chance for, uh,Iran to retaliate against Israel.
Um, nobody will care about that.

(47:12):
By the way.
Nobody like us is not gonna care.
Like that already happened.
We already set the threshold for caring.
It's pretty low.
Like Israel is going to be underattack by Iran for the next
like, couple weeks and you know,everyone's gonna move on from that.
The question is, well,

Jacob Shapiro (47:27):
in part, everybody's gonna move on.
'cause Iran can't seem to do anything.
Like even last.
Can't seem to

Marko Papic (47:31):
do.
Yeah.
So like, why not?
You know, like last time Ithink they attacked Israel.
They killed a, like a badin.
Yeah.
The negative, right?
They, they, that that's what happened.
Like a, a piece of shrapnel hita poor guy in, in, in the desert.
So what I would say is, it really depends.
If it's 80 20 domestic politics, thenBenjamin Yahu walks away from this

(47:55):
looking tough and concedes to the USthe grounds to negotiate with Iran.
Like, okay, fine, I did what I need to do.
I'm gonna stay in power.
I'm gonna continue with, uh, youknow, securing Israel in my own way.
You guys go deal with Iran now.
But that requires, ofcourse, restraint from Iran.
And so far we've seen it.

(48:15):
Uh, the first statement by Iran afterthis event happened included America.
The, the state media alsosaid that US is responsible.
Mm-hmm.
That's what happenedright after the attack.
The statement today by the foreignminister clearly focused on Israel,
the drones that have attackedIsraeli, uh, territory in retaliation.

(48:39):
Of course, it's just the firstretaliation, but they could have easily
diverted some to us installations.
They didn't.
Mm-hmm.
Or us, you know, navalvessels in the Persian Gulf.
Like there's all sortsof things they can do.
To me, to me, the threshold for Iranand what will tell us whether they're
open for negotiations or not, isthis, this is what you need to watch.
If they don't attack naval vesselsin the Persian Gulf that are just

(49:02):
floating around either American orcivilian tankers, that's important.
The second is, uh, Saudi energyfacilities, which I highly doubt they
will, but I'm just putting it out there.
And then, as I said, the air basein Qatar that the US shares with the
Qatari military and then the FifthFleet headquarters in Bahrain in Manama.

(49:25):
So that, that to me, if, ifthey attack those, I think
that they're going for broke.
You know, if they don't, if thisis just about Israel and maybe
some symbolic attack againstsome American facilities in Iraq.
Now, the reason I say that that's not partof the threshold is our listeners should
remember that on January 3rd, 2020, theUS assassinated general Soleimani mm-hmm.

(49:48):
Of the IRGC, Iran retaliated byattacking American facilities
in Iraq with cruise missiles.
And the US did not retaliate.
In fact, Donald Trump tweeted somethinglike I. You know, I respect this.
Like I know they had to retaliate.
I now consider this matter over VicePresident Harris actually brought that

(50:12):
statement up in her debates with Trumpto illustrate that he was cavalier
about American servicemen injuries.
This actually, you know, I

Jacob Shapiro (50:21):
hadn't, I hadn't thought about her yet.
I'm glad you brought her up.
Do you remember her 60 minutes interview?
Of course, I do.
Take 60 minutes where she saidIran was the biggest foreign policy
threat to the United States course.
Man, maybe Israelis would'veliked her better than uh, Trump.

Marko Papic (50:33):
No, but one thing I would say, Jacob is in my annual forecast in
December of 2024, and I hate saying,uh, you know, like I was right.
But like, because of that, because ofthat 60 minute interview, because of that
60 minute interview that Harris gave andbecause of the increase in enrichment,
this was the easiest call to make maybein my career, to say that kinetic action

(50:56):
against Iran is the greatest risk in 2025.
In fact, I went as far as to saythat, uh, annual outlook, that it
would happen on January 21st, thatthe day after Trump's inauguration,
he would begin conflict with Iran.

Jacob Shapiro (51:12):
And if it, if it had been up to be Benjamin Netanyahu,
I'm sure that would've happened.

Marko Papic (51:16):
And I caveated it by saying rhetorical or kinetic, you know.
But what's interesting is that forsix months he kind of, you know, put
an egg on all of the hawk's faces.
Not hawks.
I'm not a hawk, but like a bear.
Whatever you wanna call me.
Yeah.
Like somebody alarmists, alarmists, hereally kind of like took us for a ride
there for six months negotiating withIran much more in a much more conciliatory

(51:39):
ma way than he he usually does.
And I would say that in away he's to blame for this.
In that he should have applied hisseven steps to maximum pressure.
He should have been a lot harder.
He should have actually done what I saidand been very aggressive on January 21st.
Killed someone right away likehe did with General Soleimani.
Yeah, just boom, drone off Somebodyjust to send a message to Iran.

(52:01):
Hey man, I'm serious.
You can't drag me along the way youdeal with Biden, with his negotiations.
And I think that the problem isDonald Trump almost proved why his
own negotiating style works andwhatever he's been doing for the past
six months with Iran doesn't work.
You know, like he lost control of thesenegotiations because he was a little bit

(52:24):
too establishment, a little bit too CFR.
You know, he, he, hewasn't Donald Trump enough.
Uh, remember just a, a little reminder foreveryone listening on January 3rd, 2020
when they killed Soleimani, the US wasnegotiating with Iran at the time in Oman,
they just killed this guy as a, what's up?

(52:45):
That's, that's what Donald Trump did.
I firmly believe that had he wonthe 2020 election, there would've
been a deal with Iran right away,because Iran was like, oh my God.
And I think that they themselveswere like, oh, look at this.
This guy wants peace and he wants lowoil prices, so he's not gonna bomb us.
You know?
And I think they, they, they tookthat narrative, that meme too far.

(53:06):
In fact, I had several clients say to me,but Donald Trump wants to low oil prices.
And I'm like, look, hedoes, but he's not myopic.
He doesn't need them tomorrow.
If oil prices go to 120 bucks for amonth, like the world's not gonna end.
It's not

Jacob Shapiro (53:20):
Well, yeah.
And they're not going, I mean, they wereup 11% when I went to sleep last night.
They were up six and ahalf percent this morning.
So, well, because

Marko Papic (53:25):
Iran is, because Iran is following.
The pattern of last year because it'snot retaliating against, you know,
ways that oil prices will go up.
Yeah.
One last thing I wanna say.
I do also hear a lot ofpeople say, but wait a minute.
What does this mean for inflation?
And so on?
Don't worry about it, justdo not worry about it.
And I'll tell you why.
There's absolutely no way thatany inflationary spike because of

(53:46):
conflict in the Middle East, isgonna lead to central banks around
the world raising interest rates.
Are you nuts?
Jay Powell is not gonna like dothe bidding of the supreme leader.
He's not gonna like raise interestrates to slow down the pace of
the economy as some robot, someautomaton, like, oh, energy prices
rising, must raise interest rates.

(54:07):
No, bro, like Iran isattacking global shipping.
No, we're not.
Like they're not gonnaraise interest rates.
Not even considerate.
And that's why I woulddefinitely like fading oil.
On day one of this is dumb.
You should definitely not do that.
But fading the market move,you absolutely should do this.
There's no way that this is gonnabe negative for, uh, stocks.

(54:29):
And by the way, it's right now, uh,noon, New York time on Friday the
13th and s and p 500 is down point 44.

Jacob Shapiro (54:40):
I mean, it's good for defense stocks literally everywhere.
Um, I I I'm glad that you broughtup Soleimani 'cause that might be a
good way to, to land the plane here.
Um, because the Soleimani thinggets to the, the point about
Iranian domestic politics.
We've talked a little bit about theUS and about Israel, but if you think
about Iranian domestic politics, I mean,you're right, it's really complicated.
So we're not gonna be able to treatit with the nuance that it deserves.

(55:02):
But think of it in terms of hardliners like the IRGC and who believe
in the revolution and everythingelse, versus the pragmatists
Rouhani, really the most recent one.
But you know, who wanna havetheir cake and eat it too?
They want Iran to be partof the global economy.
They wanna relax some ofthe religious restrictions.
But okay, you can have the revolutionand these two factions sort of
squaring off against each other.
And I. One of the strategic reasonsto off soleimani, not just that you're

(55:26):
sending a message, you're also gettingrid of the leader who is on the
hardliner side, the one who was gonnabe opposing negotiations tooth and nail.
So if you can empower the pragmatistto some extent and then, uh, to
your, I'm just like butchering yourpoint about there probably would've
been a deal because getting rid ofsoleimani and throwing the IRGC into
chaos, maybe you can make an argumentthat now you're giving some power.

(55:47):
Um, to the pragmatists, uh, going forward.
But just, just to say that like, there'salso an internal Iranian issue here,
and I think when we're thinking sortof as you said profoundly about what
happens next, um, I, I think there's alot to be said about like Israel getting
short-term benefit, but at what long-termcost the, the changing nature of war.
Like another example of intelligenceand drones and technology enabling

(56:09):
things that even 10 years agomight not have been possible.
And then like, what does this meanfor the future of Iran long term?
Because eventually Iran is goingto come in from the cold, and when
it does, it will be one of thegreatest frontier opportunities ever.
I mean, like, it's, it's anincredible country with incredible
human capital and resources and allthese other sorts of things, and
it will not be isolated forever.

(56:29):
Um, so I, I'm always sort ofwaiting from that perspective, but

Marko Papic (56:32):
one, one, I think

Jacob Shapiro (56:32):
we'll be waiting a lot longer.

Marko Papic (56:34):
Well, since we're, yeah, since we're doing kind of closing
statements, here's what I would say.
I would say that geopoliticsis a funny thing, you know?
Um, and we as humans, we desensitize.
We're, we're starting to desensitizeto what I've been saying is a
multipolar world since 2011.
That's been my call.

(56:55):
Think about it, 10 years ago, if youtold me just that Israel and Iran
would exchange Christmas of fire fire,which is what happened last year.
Mm-hmm.
I would've said, oil prices are150 right away, and here we are.
Not only has Israel been attacked bya massive terrorist attack supported
by Iran in some capacity, even togently on October 7th, not only

(57:16):
have we lived through that, butthat happened almost two years ago.
Since then, Israel and Iran have exchangedcruise missile fire, and now Israel has
attacked Iran and might attack it again.
And SAP 500 is down 0.4%,which is like a random day.

(57:36):
Oil prices are up more thanthey've ever been up intraday.
I think we hit significant increasein oil prices, so no doubt there,
but you know, they're like 6%and the world's not ending.
And people are like, yeah, I mean, itis, I guess Iraq is gonna retaliate
against Israel, like, you know, whatever.
Like it is what it is.
This is the world we live in.
I mean, a couple of weeks ago,India and Pakistan exchanged fire.

(57:58):
You and I barely got to squeeze themin between the NBA finals and like the,
the fiscal bill in the United States.
This is very interesting to me andI think it's something for everyone
on this call to who's listening.
If you're an investor, thisis really important for you.
But if you're just a regular person,like listening to our podcast,
trying to figure out what's going onwith the world, this is the world.

(58:20):
It doesn't mean that the worldis descending into chaos and
there there's gonna be World WarIII at the end of the rainbow.
This can just be our worldfor the next 50 years.
This is what the 19th centurylooked like, and it's considered
the longest period of peace.
The long peace, 1812 to 1914, a hundredyears of what we consider peace was

(58:42):
interspersed with conflicts that justdid not blow out of their region.
You know, and I think that'swhat I would end it on.
This is interesting.
We had India, Pakistan, we have this, wehad Russia, Armenia, sja, Russia, Ukraine.
Like things are, things are cooking here.
There, there's a lot of pots on ourstove of geopolitics, but none of
them are really, uh, overflowing.

(59:03):
And that is what multipolarity is like.
It sucks because it means people will diemore so than when somebody's in charge.
On the other hand, it doesn't meanthat every conflict immediately has
to become a regional configuration.
And I don't think a lot of peoplehave really, uh, wrapped their
brains around that fact 'causethey just don't know enough.
History and human historyis about multipolarity.

(59:25):
It's not about hegemony or by.

Jacob Shapiro (59:28):
Yeah.
Or wrap their brains around the factat how geopolitically insignificant
the Middle East has become.
The Middle East was importantin the latter half of the
20th century for two reasons.
Number one, oil, number two, it wasa proxy battleground between the
United States and the Soviet Union.
So between Exactly.
Cold Wars over, there's no China doingbattle with the United States over.
No.
They had be the proxies via Iran.

(59:49):
Like it's all the same.
So that's gone.
No, and oil, nobody gives a frackevery, literally, ah, you like that.
Like the United States has oil Nice.
And the Chinese are buildingreactors and Europe's doing hydrogen.
Like they're on borrowed time.
That's why that's the, is building, youknow, Neo in the middle of the desert.
'cause they're on borrowed time.
Just to,

Marko Papic (01:00:06):
just to be clear, they would, if Iran had the minerals, the balls
to attack I, uh, the, the facilities.
But Saudi Arabia has moved on.
You know, and the other issue, the otherissue that I don't think, we also have
wrapped our brains around US taxpayersby supporting the Fifth Fleet in Bahrain.

(01:00:27):
Are defending Chinese strategic interests.
Let me say that again.
If you're an American listening to this,you're paying taxes in parts of China
can be safe because it's not US oilsupply that the fifth fleet is guarding.
It's the rest of the world.
And that's maybe the one vestigialpart of Unipolarity mm-hmm.

(01:00:48):
Of hegemony that America still performs.
I know you gotta go sowe can wrap it on this.
All I would say is that Chinese andAmerican interests are not that misaligned
when it comes to the Middle East.
Uh, and Chinese statement, uh, afterthis conflict was pretty muted.
They didn't really just support Iran.
They kind of said, Hey, bothsides need to calm down.
Um, and I think thatthat's interesting as well.
I think that's a very nuancedpoint you're saying, Jacob.

(01:01:10):
In other words, this Soviet Union inthe US had clearly delineated interests.
It's not that clear anymore.

Jacob Shapiro (01:01:17):
No, and I guess like it's shame on us for leaving it on this
and only bringing them up now becausefor me the real question is, okay
President Erdogan, what's your move?
Because if this is your backyard, ifthis is the neo Ottoman Empire, if
all these powers are like whatever,like this is Turkey's backyard and now
you've got Israel and Iran like withblows, and maybe that's good for you.

(01:01:39):
Maybe you want to break outthe popcorn and deal with
whoever is left over afterwards.
But like said it, Turkey is the quiet onethat is like, we should all be watching
how they react because that's probablygonna define this more than anything

Marko Papic (01:01:49):
else.
You took your very high inour draft, so you took Turkey.
Sorry, Turkey high in the draft.
So let's see it.
I did let, let's see.
That potential.
Let's it,

Jacob Shapiro (01:01:57):
I'm waiting.
Alright.
Alright.
Thank you.
Alright.
Cheers.