March 22, 2026 – How we got into this war is unclear to me, but some facts are known. Iran’s ballistic missile program was back into full swing and would soon have more long-range missiles than both the U.S. and Israel could ever protect against. While the rhetoric and kinetic action in June 2025 (The 12-Day War) were mostly focused on the nuclear program, it was the dual threat of ballistic and nuclear weapons that posed a greater threat.
Other facts on the ground focus on Pickaxe Mountain, a facility that Iran was expanding and that would have been impenetrable from the air. If completed and online, it would have allowed Iran to proceed with Uranium enrichment at will, ultimately leading to a massive stockpile of weapons-grade material. Even in its unused form, it could be devastating to Iran’s enemies in the form of dirty bombs.
Then there are the facts of life in Iran under a theocratic regime. I have read many accounts of the dead civilians from the brutal crackdown on the uprising in December and January, but what seems clear is that it was a massacre of tens of thousands of Iranians who want not much more than affordable food and clean water. Some reports detail that the regime would scour the hospitals after a violent incident and murder the injured in their hospital beds. It was a level of human depravity that rivaled that of the Middle Ages.
I could keep going on the other actions by this Regime over the past forty years, actions that span the globe and are a major source of death and terror. One irony is that this theocratic regime also has a strong penchant for money and wealth, individually accumulating billions of dollars from oil riches while using those same resources to corrupt a wide swath of the IRGC under the auspices of a religious crusade.
Herein is where the domestic dilemma begins. Trump’s reasons for entering this war are varied, unsubstantiated, and somewhat farcical. But the U.S. engagement does address an important and growing problem worldwide, one that has repeatedly blocked broader peace in the region. Notice that I have left Israel out of this assessment, because it doesn’t need to be here. This is a regional problem with global ramifications, the likes of which we are facing right now as Iran shuts the Strait of Hormuz.
For reasons that entirely elude me, the global energy market has allowed Iran to develop the ability to strangle Asia’s energy supply. For Iran to use that power today, at this time, is a very high-stakes gamble. If it works, they will have shown a penchant to hold the world hostage over our addiction to oil, potentially indefinitely, and become the world’s enemy. If they fail, the Iranian leadership will not exit this war with their lives. Control of the Strait is a red line for all nations in global diplomacy, understood for decades,not just the Gulf countries. Iran is using a logic that eludes me as a Western thinker.
The consequences of Iran’s actions are stark. The off-ramps for both sides have been obliterated by Iran’s actions in the Strait. If Trump walks away, leaving the Regime in place, it will be a win for Iran and a massive headache for the Gulf countries and the global energy economy. Removing the Regime, however, will require American troops entering Iran, a high level of engagement that doesn’t end soon or well, given our history of such action. The carnage in either situation is likely to affect Trump’s political standing and the Republican Congress in the coming midterms. For every action, there is a reaction, and I worry about the unintended consequences domestically as Trump and his administration try to salvage the situation.
Whatever the outcome of the war, the global energy situation will be permanently changed. Supply disruptions will reverberate for months and possibly years. By one estimate from The Washington Institute for Near East Studies (TWI), it would take up to nine weeks to clear just one shipping lane of all mines. Completely opening the Strait will take much longer.
With natural gas fields ablaze and prices rising, the financial energy markets are the concern, as opposed to physical supply. Here in the U.S., we are mostly protected from shortages, thanks to years of building our energy industry to withstand such situations. But the price of oil, natural gas, and derivative products is the problem. It becomes an instant phantom “tax” on households, many of whom will have to cut back on other spending or savings to fund the tax.
The secondary effects are where we don’t want to go. Volatile markets create fear, and fear drives selling. With so much of America’s wealth tied up in the equity markets, it is not hard to imagine how a stock market rout would put a huge dent in spending. Add that to the energy tax outlined above, and you have a double hit to the economy. Higher-wealth families spend less due to market fears, and lower-wealth families have less to spend.
It is, in short, a strong recipe for economic malaise when we are already on a fragile footing. Prior to the war, we struggled with jobless expansion, massive government debt, and lingering supply chain problems from the Covid era. None of these issues is going to get better in this environment.
It isn’t all bad news, however. The rapid evolution of generative AI and the potential for AI agents to work independently open the door to an unparalleled wave of productivity gains. Layering in blockchain technology (cryptocurrency) and the ability to streamline financial transactions across the economy, you are laying the groundwork for a new economy.
But before the new economy can take hold, we have to address the failures of the old one. Debt, terrorism, corruption, and social media all eat away at our future. The current situation in the Middle East is a sad confluence of these problems, all of which could have been avoided had prior administrations faced them, and the world’s leading economies face the realities of their acquiescence.
I keep coming back to the question of nuclear power. Whatever your political leanings, it is the closest we have ever had to an energy panacea. Aside from the disposal problem, which has viable solutions, it is clean energy that is region-agnostic. But again, for reasons that escape me (perhaps to appease the Green Party), Germany under Angela Merkel dismantled its nuclear power industry in favor of dependence on Russian oil and natural gas. Germany effectively traded energy security for insecurity and carbon emissions. You start to see how Putin felt that he had a carte blanche invitation to invade Ukraine.
There are dozens of such examples around the globe, including our own backyard, in which we have made decisions for political expediency at the expense of our safety, the safety of our climate, and the safety of future generations. Whether your frame Trump’s actions in the context of kleptocracy or correcting the sins of the past is not important. The constitutionality of this action is also a bitter direction to take the discussion. What matters is that we are here now.
From an investment perspective, it is far too early to predict what happens next. We continue to hold positions in Treasuries and similarly liquid and stable assets to reposition in a strong market decline. I expect something like that to happen in the near term, but it should be temporary and impossible to time. In short, a steady investment strategy through this period is going to be far more effective than reactionary selling.
We have seen a quick flattening of the yield curve driven by the short-term concerns over inflation. The markets are already pricing in a rate hike by the Fed as opposed to rate cuts. The short-term Treasury market is projecting inflation over 4% in the next year, a near doubling from the current rate.
We haven’t seen the impact yet on the pricing of structured notes, but we do expect some lower prices in the short term. This might give us a buying opportunity, or it might just be volatility that we ride out. It is something that we are closely watching.
As for equities, we are sitting tight for now. We diversified away from growth stocks last year by using dividend-focused ETFs in the U.S. and overseas, both of which are faring better in this environment. We also have the ability to slide from Treasuries to equities in the event of a sharp and sustained decline in equity prices. In our experience, that strategy has worked well in past crises.
As for the privates, this is where we are quite happy to be sitting on a larger swath of these investments for clients that can support it. In our view, many are based on strong, viable business models that are stable in these times and continue to generate strong cash flows. The risk assets, namely venture capital, are all based on the future of our economy and have potential that does not depend on current events. We can discuss the specifics of your private investments should you have concerns.
Finally, for sources. It often comes up how we gather our information and what sources to trust. Social media has become a scourge on society — it is poorly regulated, if at all, and used by bad actors around the world to push an agenda antithetical to the interests of their viewers. Until this medium is reformed, it will continue to be a tool of choice for theocrats and autocrats.
We are also seeing the same problems with major U.S.-based media companies. While every media company carries some bias, those in the U.S. seem to have gravitated heavily based on a misguided set of assumptions. Those that I do trust in the U.S. are The Wall Street Journal for reporting on the wars and Bloomberg for reporting on financial markets (Bloomberg shows an intermittent bias on global matters). Foreign Affairs always has good, balanced debates and easy-to-consume articles, but it tends to be a bit too focused on diplomacy and not enough on realpolitik.
Overseas, I like The London Telegraph for war reporting (note that they have a heavy conservative lean) and The Times of Israel for Middle East matters. The Economist is also great for detail and facts but tends to miss the mark on practical solutions.
The experts, however, are where I like to focus. Former Ambassador Dennis Ross at TWI has an excellent historical perspective and is often well-connected on current matters. Dana Stroul, also at TWI and their Head of Research, does a wonderful job of explaining the situation and has tremendous prior experience in national security matters. Historian Walter Russell Mead, though a bit caustic at times, is one of the most learned scholars of international affairs and sheds a candid light on these conflicts. And Daniel Senor, who has a number of podcasts and publications, including Startup Nation, does a wonderful job of keeping his audience up to date with a range of views and expert opinions.
In summary, this, too, shall pass, and we again return to our lives and small-world concerns. The big world around us, however, will still be there and does need our continued attention, support, and engagement. I don’t mean to be preachy here, but to gently remind folks that improvement in this world comes when we choose to engage in small ways and big.