Transcript
A (0:02)
All right, Doug, we're back with questions from subscribers. Someone asked us a few days ago before the markets opened after the initial strike against Iran, like what would happen, what you thought the markets would do. Obviously we're late to answer that question, but so far this week, I'd say the market response has been pretty muted to what appears to be a gigantic brewing crisis. What are your thoughts on that?
B (0:27)
Yeah, I guess the question really rotates around a bigger question. How serious is this dust up with Iran? And my opinion is, is that it's super serious. It's really serious. We're just in the early stages of it and it's likely to spin out of control and that's going to have an effect on the markets. Now as we speak, the all the market indicators are down mildly and interest rates are up mildly. But look, I thought that both the stock and bond markets have been very overpriced for a long time. And I'm sure the government, this government and other governments are going to do all they can to keep them up. Maybe that'll even amount to buying stocks in the open market. Japan's done that in the past. Well, we can do that here in the west too, I suppose. So answer to the question. I don't want a part of the general stock market, and I think it could crash. And if it does crash, then kind of the cat's out of the bag. People will really start worrying. So this is a dangerous time.
A (1:50)
Yeah, it's kind of relates to what we're talking about during the last episode, about people's ability to recognize crisis. And the thing is, when there's a stock market crash, you have this shared experience of a problem and all of a sudden people, even though all the indicators around you might have been saying, hey, there's a problem, there's a problem. You know, like we had the jobs report shows a loss of 92,000 jobs last month. Like, you know, people tapping into the 401ks, you know, debt being highest ever. Like these are all things in your problem. But it's not until you have a stock market crash. And now people have this shared experience, you know, that affects them personally, but it's shared with others that they can then go, oh my God, now we have a problem.
B (2:33)
Yeah, yeah, exactly. One of the few good things going on today is that the stock market's up, the bond market's holding up, but I think they're, they're floating on air. And you know, the thing is, is that this whole thing in the Gulf, I've always been, always had very mixed feelings about Dubai. I mean you go to Dubai and it's a wonder of the world to think that, you know, listen, I went through Dubai airport in the early 80s and it was a teeny dumpy thing. It was nothing. And now it's the biggest airport in the world. And Emirates and Cutter and I had are three of the biggest and most prosperous airlines in the world. But it seems that everything in the Gulf is built on sand, almost literally because if the desalination plants are blown up, there's no water, forget about it. I mean, sure, for a few Arabs living on the, yeah, that's one thing. But for a major cities, no. And you take out the oil and gas facilities, I mean it's, it's, it's, it's all on the knife's edge. It's very dangerous. And Trump keeps prodding the bear.