Ten31 Timestamp: You Gotta MOVE

**Marty Bent** (0:00)
Mr. Arnold, I must apologize.

**John Arnold** (0:01)
Apologize for what?

**Marty Bent** (0:02)
Two things. First, last week, I used the wrong mic. I was speaking through my MacBook Pro. Audio still came through, but not as good as the shore mic that you're hearing me through now. Second thing is, you're catching summer, Marty. I'm at the beach on the weekends. I wake up early, drive back to my desk by 9 a.m. Monday morning, I got a little, haven't shaved yet, got a little beach flow here, still rocking, got the hat on, so sorry I'm not as buttoned up as I should be for the quality of the show and the analysis that we get.

**John Arnold** (0:32)
You just got that European vibe, you know? Hit that out of office automated message starting right after Memorial Day, come back September, that's all right.

**Marty Bent** (0:41)
No, no, we're still grinding.

**John Arnold** (0:43)
Drop in for a few podcasts, that's all right.

**Marty Bent** (0:45)
We get 48 hours of rest on the weekend here in the United States, and even then, you're still talking to your clanker on the beach, like, hey, I got this idea from Monday, but you get back to work on Monday. The summer doldrums don't exist when we have the world unfolding as it is right now.

**John Arnold** (0:59)
Yeah, definitely no summer doldrums over in the Middle East right now.

**Marty Bent** (1:03)
No, well, that's what I was going to say. I have to apologize for a third thing, and that's to our audience because we said we weren't going to be Hermes maxing much more, but of course, as is par for the course with this, this incursion into the Middle East, the latest incursion from the United States, it's never ending, it seems. And as we've said many times over the last couple of months, the incentives for both sides are to keep this going as long as possible. We have the latest escalation, which is back and forth attacks from Iran and the United States. Iran attacked three ships in 24 hours. Trump officially ended the Memorandum of Understanding for the ceasefires, calling the Iranian leader scum, and Iran has expanded attacks on Gulf states after the US struck Iranian assets in retaliation for the ship attacks. What's your take on this, brother?

**John Arnold** (1:56)
Yeah, I mean, look, guys, you know, don't blame me. Don't blame us. We were on the horn with the IAEA's whole last week saying, don't do this. We don't want to talk about it on the pod anymore. Please don't do this, you know, to no avail. So here we are again, with this story that seems to never end. And yeah, I think it's interesting to consider what the incentives actually are for this to continue kind of on both sides. Certainly, there's a hardline faction in Iran, which we wrote about a little bit in the timestamp over the weekend, that's getting a little more attention. There's an IRGC group that clearly just isn't interested in any kind of deal at all. There's clear internal division there, which is now I think becoming more of a mainstream viewpoint.
It was a little more the provenance of tinfoil hats a few months ago, but it's becoming a little more clear. There's definitely an incentive to just cause as much chaos as possible and prevent a deal from happening in general.
The one major leverage point that the country has left that and arguably the nuclear program. On the US side, we've documented extensively on the show, maybe some of the downstream benefits to the US strategic position. That have come out of this just this morning. It's not on the slide here, but Trump mentioned, I believe, on CNBC or maybe Fox Business that the US is happy to be the guardian of the strait and we should be compensated for that appropriately. So it's a little potentially groundwork laying there for where things may be moving. But in any case, we're back in a spot where there's no clear off-ramp until one side or the other decides to blink and maybe midterms will be the forcing function for that. Maybe the Iranian oil situation, which the country was already having trouble moving a huge amount of its backlogged oil to anyone. And now that's not going to be any easier. So we'll see if that causes enough pressure to cause a relief valve here in the next few weeks. But yeah, we're back at it again, unfortunately.

**Marty Bent** (4:02)
Yeah. That means that rates are reacting. We had the 10-year jumping up yesterday, or excuse me, last week, above 4.55. Currently, I guess at the time of the screenshot was at 4.561.