10/5/26: Iran Disrupts Hormuz Traffic, Yemen War Explodes, Trump Desperate Midterm Pitch

Breaking Points with Krystal and Saagar

The episode dissects the escalating geopolitical and economic crises surrounding US operations in Iran and Yemen, highlighting how rising oil prices and interest rates are straining the domestic economy ahead of

Key takeaways

• Treasury Secretary Scott Bessent walked back his 'I am the house now' claim as US bond yields hit 24-year highs and oil prices surged past $100/barrel due to Strait of Hormuz disruptions.
• Iranian oil minister resigned amid a severe economic crisis, with the security chief admitting sanctions and naval blockades are crippling imports and fueling inflation.

Main topics

• Iran war & Strait of Hormuz oil disruptions
• Yemen conflict & Saudi-Houthi counteroffensive

Notable quotes

"The house doesn't win every hand. The house plays the percentages."

Conclusion

The episode underscores a precarious moment where aggressive US foreign policy in the

Transcript preview

Speaker 6 (0:00) This is an iHeart Podcast. Speaker 6 (0:02) Guaranteed human. Lisa, tell them about our new show. We have a new podcast. It's called Don't Lie to Me. I'm Lexi Iwano. We're two best friends, 22 years apart, but so close at heart. And I'm Lisa DiGiulio, the old one, which means we have wildly different references, occasionally different opinions. And at this point in my 50s, I've lived it all. Now in my 30s, being the founder of New Shoes, good taste is my business. Listen on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Speaker 6 (0:35) Hi, this is Kylie Brakeman, Angela Geratana, Jeremy Colhane, Patrick McDonald, and we're the hosts of the Artists on Artists on Artists on Artists podcast, the improvised character comedy podcast, where each week a new panel of artists discuss their craft. Join us for a panel of Eurovision participants. And we do a little Halloween sometimes. Does the Pope dress up? He winks on Halloween. He gets right up next to the microphone. I hear you can almost hear the eyelashes hit each other. You've never seen Italy so quiet as when the Pope gets up to wink on Halloween. Listen to Artists on Artists on Artists on Artists every Thursday on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Lacey Mosley, author, actor, stand-up comedian, creator, and host of Scam Goddess Podcast. The true crime comedy podcast all about robbery, fraud, and those who practice it. Each week I bring on an amazing guest. Ooh, I scammed him. What? I could talk to you for an hour. You're a generational yapper, like me. That's Speaker 1 (1:33) why I had to make yapping Speaker 6 (1:34) a job. And now you can catch full episodes of my show on YouTube. Start listening to Scam Goddess on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Speaker 6 (1:46) Hey guys, Ready or Not 2024 is here and we here at Breaking Points are already thinking of ways we can up our game for this critical election. We Speaker 1 (1:55) rely on our premium subs to expand coverage, upgrade the studio, add staff, give you guys the best independent coverage that is possible. If you like what we're all about, it just means the absolute world to have your support. But enough with that. Let's get to the show. Speaker 1 (2:11) Good morning, everybody. Happy Monday. Have an amazing show for everybody today. Bro show. People live for the pounds. Good to see you, Ryan. Nice to see you, Sagar. So we have Iran. We're going to start off a little finance bro knowledge from our friend Ryan Grimm, who's going to break down. Scott Besant, who has decided to rue his braggadocious comment where he said, I am the house now. And he's like, well, what I meant was. Speaker 3 (2:35) The Speaker 1 (2:35) house doesn't always win. He's like, well, the House doesn't always win, but eventually they win, right? Right? It's kind of similar on top of some developments out of Speaker 3 (2:44) Iran, specifically on the economic front, their oil minister resigning. We're also going to talk about Yemen. Crazy events actually happening right now as we speak. A Saudi-backed counteroffensive on the Houthis while the Houthis are also encircling a strategic town. The United States apparently held a very high-level meeting over the weekend at Camp David where Trump is mulling both escalation in Iran and direct military intervention in Yemen. Remember, he had originally greenlit the attack and then called it off actually while the aircraft were being fueled up. Then... Talk about midterms. Absolutely shocking polling numbers coming out of The New York Times, Siena, high quality polls in multiple different battleground races that find a huge problem for the GOP in Alaska, in Texas, potentially even Kansas. So we're going to look at all of that Speaker 1 (3:34) evidence and we're going to, you know, steel man some of it a little bit. Ken Paxton, by the way, also another leaked audio clip where he just keeps, you know, dropping L's out here as he appears to face Speaker 3 (3:45) the toughest reelection campaign of any Republican. Republican actually in a battleground state, which is shocking, obviously, to be from Texas. So Speaker 1 (3:52) we'll break a lot of that down. We're also going to talk about this AI video. Man, Ryan, this is the one which has shocked me more than anything, where a person's, what is it, his conviction was thrown, his sentence was tossed out after they used an AI video in court where the deceased victim is depicted speaking in an AI-generated video. to the defendant being like, I forgive you. I don't know how any of this even happened. They got a sentence, eventually went to court. I mean, it's crazy. Apparently it was even used by the judge in their consideration. So, you know, that's right. You get AI videos and boomer judges, and apparently this is what happens. This is on top of a new company, which appears to Speaker 3 (4:37) have claims to pass, quote, the Turing test for video. We will play you some samples. You can make up your minds for yourself. Finally, I'm really excited to say this. Annie Jacobson, the author of Biological War, previously Nuclear War, a scenario. She's going to join us. Speaker 1 (4:55) She has been on top of this apparent lab leak of a form of, what is it, pneumonic plague, which appears to have leaked from BSL-3 lab, already caused the death of one of the researchers in the city of Irkutsk, which is in Siberia. We know that from Risk. Yes, we know that from Risk. Speaker 1 (5:15) read a book once which heavily took place in our coast. What is it? It's one of the coldest cities in the world, the middle of Siberia. Totally crazy, actually, place. The fact that such a place even exists on a permanent basis. Anyway, that's where they have this BSL lab where it's like anti-plague research, and now somebody just died of plague. Russians locking Speaker 3 (5:32) down the place, already lying about what's going on. Many of us have seen this story before, and Annie actually specifically wrote about this plague scenario in her book. So we're really excited to be joined Speaker 1 (5:42) by her. And then finally, since it's just me, today. And just, you know, no crystal to be like, are we sure we need to cover this Daylight Savings thing? No, I'm joking. She probably would love me. Anyway. Speaker 7 (5:55) Because of the fighting with Tom Cotton, she'd have been for it. Yeah, right, right. Speaker 1 (5:58) Exactly. Every time I'm like, let's get Daylight Savings into the show. Let's get gambling in the show. Well, this time around, Daylight Savings, I actually think rates, you guys can judge for yourself. Trump gave out Tom Cotton's cell phone number because he's so upset with him for blocking permanent Daylight Savings. And I know everybody gets confused. We are currently in Daylight Savings. In November, when we shift, we will go to Standard Time. That means the TLDR of it is more light in the morning, less light in the evening. Ryan and I will discuss. People know where I fall. I said Tom Cotton. And Tom Cotton is a hardcore warrior, has been. I've been in touch with his office many times over the years to provide research and just, you know, just general advocacy on behalf of this crusade. And he does not appear. to be buckling as of right now. But Trump, you know, using all of his political capital, I said this morning, Ryan, between Trump's embrace of weed, porn, gambling, daylight savings, and war with Iran, I think he was sent by God to punish me personally. You personally, yeah. Speaker 7 (7:01) Like, Speaker 1 (7:01) me Speaker 3 (7:01) personally Speaker 1 (7:02) to be punished, which is karmic, I guess, you know, that's karma. So anyway, and then finally, Ryan and I are going to do our AMA. So Ryan, take it away with our pitch. We actually have a very specific pitch Speaker 7 (7:12) for today. And speaking of punishing soccer, if we can actually go back to camera two. Yeah. If you noticed... Come up on me while Ryan Speaker 3 (7:20) is talking. Speaker 7 (7:20) A Speaker 3 (7:20) little Speaker 7 (7:20) bit of light behind me right here. You see this? No light. Sorry. No light. There's Speaker 1 (7:25) no Speaker 7 (7:25) light over here. So we desperately need your support at this time. Sponsor a light. Yes. For the low, low cost. So yes. We have electrical Speaker 1 (7:35) short and we need you to fix it. Speaker 7 (7:37) Go to breakingpoints.com. Do the month free. Yeah. And help us out here. That's right. And secondly, a month from now... You might be lying in your bed dying of pneumonic plague. That's exactly right. Would you want to spend every day from now until that day watching YouTube ads? Right. Why would you want to do that? Why would you want to do that? You might be dying, drowning in your own blood-soaked vomit. Uh-huh. in about 30 days. Speaker 1 (8:02) That's right. So you might as well. Money means nothing in that scenario. Right. So you might. And by the way, you're not even spending anything because it's free. All right. Your estate will then have to. Your estate. That's Speaker 7 (8:11) right. Speaker 1 (8:11) We can reconcile all of this with your lawyers should the time come if we ourselves are not drowning in our own blood. All right. So with all of that, let's get to Iran. Turning now to Iran, we got Scott Besson here, who is now walking back his whole I am the house now bragging when he said that the bond deals were going to go down. They ended up going up to the highest level in 24 years. Here's what he had to say. Speaker 6 (8:34) Last month, you told the markets I am the house now. They bet against you at their peril. Do you regret saying I am the house now? Speaker 5 (8:43) No, because, look, the house doesn't win every hand. The house plays the percentages. And, you know, like, look, maybe they heard some fragile egos on Wall Street that I always had respect for the market. And, you know, I always tried to look and think, like, what's the move after the move that, you know, if you have an ego, you lose a lot of money. But the market slapped back. No, it didn't. How did it slap back? The rates went up, but oil went up. I could say, OK, yesterday we had the first full allocation since we have expanded our treasury buybacks and rates collapsed. There's nothing causal there. It Speaker 6 (9:27) was Speaker 5 (9:27) coincident. The Speaker 6 (9:29) Financial Times, probably your favorite paper, said Besant fails to break fever in U.S. bond market. What did you learn from that? Speaker 5 (9:36) Well, I learned that the Financial Times is anti-American, anti-business, and they have a fever. They're constantly trying to create a problem for the U.S. But let's leave that disgraced publication in London aside. That Speaker 1 (9:54) disgraced publication in London aside. When he Speaker 7 (9:56) launched his economic D-Day against Iran, he did it in a op-ed in the Financial Times. Speaker 1 (10:04) forgotten. That's right. He did. Come Speaker 7 (10:06) on, buddy. Speaker 1 (10:07) All right. Break it down for us, Ryan. What is he actually saying? I Speaker 7 (10:10) mean, he's saying it's not my fault because oil prices went up. And when oil prices go up, then it pushes inflation through the economy, which creates expectations of a federal interest rate hike, which then drives up interest rates. So. What do you want me to do about any of this? Yeah, that's that's basically his argument there. Speaker 1 (10:27) It's so funny. I mean, it's so it's it's hilarious, too, because I am the House now was one of the most declarative statements issued by U.S. wartime Treasury secretary in decades. I mean, it's like I am the House. I will fix this. This is my thing. And it immediately fell apart and failed. Guess that makes me anti-American. And what is anti-business for saying that? You know, and the funny part is, too, is like presuming that. he is part of the House. He's like, well, oil prices went up. I'm like, well, that's the House's fault too, bro. That's Speaker 7 (10:57) the U.S. government's fault. Right. You've been manipulating oil prices for months now and you finally lost your grip on it. Speaker 8 (11:03) But Speaker 7 (11:03) yes, to say I am the House now and then to have the biggest run up in interest rates in a quarter century, a kind of reshaping of the global financial system immediately after your claim is incredible. He goes on here. We can roll A2 here. Speaker 5 (11:21) Again, what I've learned that everyone in the market knows you don't win every hand, but you win over time. Everyone knows I'm a big basketball fan, big fan of John Wooten, big fan of Dean Smith. And how do they win? You trust the process and you put a good process in place. And like what we can see with bond yields that I would be concerned if we were having some kind of idiosyncratic rise. It's been a global rise. that U.S. bond performance since the president came in has been the best in the world. So we are not seeing people sell treasuries to buy German bonds or Japanese bonds. And like I said, that I can't control the bond market. What I can do is try to get people to slow down and think. Speaker 7 (12:10) So there he's basically saying the entire global financial system is broken. Yeah. Speaker 3 (12:14) Oh, right. It's not just Speaker 7 (12:15) ours. So that should make you feel better. Also, trust the process means. If you're the 76ers, you just stumble along for a decade and a half, and then you get LeBron James. Yeah, right. Besson is going to hire LeBron James to fix the bond market. It's so Speaker 1 (12:28) ridiculous. It's like when you said I am the house, what you're saying – by the way, the house is supposed to win. You know that, right? And yes, not just in the long run but on a general day-to-day basis. So let's put A3 up here on the screen, which shows another problem for, quote, the house. Speaker 3 (12:45) We spent the last couple of weeks actually talking about the legitimate, it appears, fact that there was a lot more oil that was coming out of the Strait of Hormuz. We're not believing the United States government. We were looking to independent analyst Rory Johnston, to Kepler data, to all of these others. People, Steele Manning said, I especially trust Rory on this question because he really interrogates kind of the deep assumptions. And so we've had him here many times on the show. And he was validating much of this. Tanker trackers as well. Sal, obviously, from what's going on with shipping. All of them, though, in the last 48 hours have now been pointing out. attacks on ships have been resurging in the Strait of Hormuz. And, you know, we covered many of these attacks, but there were additional ones that actually happened over the weekend. And after several days without reported attacks, UK Maritime on September 28th began to report multiple different strikes. What was also interesting about all Speaker 1 (13:37) of these strikes, quote, are all seven were attacked near the narrowest part of the Hormuz Strait. And what we appear to see is that they were shooting to kill. this time around to fully disable and to sink the ship. In addition, there was a tanker this morning. Speaker 7 (13:53) I don't know about sink, Speaker 1 (13:53) but Speaker 7 (13:53) at least disable. Or at least, whatever. Speaker 1 (13:54) They don't care what happens. Really what they're saying is, we're Speaker 7 (13:57) not- Well, Speaker 1 (13:57) with two million barrels of oil, they don't necessarily want it going under. 100%. But I guess from what I had seen, and not a military expert, but trusting some of the people that I had seen previously. when they would shoot, it would be disabling or warning shot, like, you know, not something that was designed. Now they're going for the engine room. They're specifically trying to take the entire ship. I'm just quibbling with sink. I don't think they want to sink it. You're right. I mean, it'd be a problem for them, right? You kill dozens of sailors and you sink a bunch of oil here. You're absolutely right. So this is a kind of a controlled game all around. It's Speaker 7 (14:27) a Speaker 1 (14:27) dangerous game. What I've seen, and don't forget, people have died, like Indian sailors, other people have died already in this conflict. From what I understand, though, here is that there was a another ship this morning, Speaker 3 (14:37) a Greek ship, where the IRGC came on the radio and said, listen, turn around or you're getting sunk. And they did. They actually did turn around. So big, pretty significant in terms of what has come out. What I also saw was this fascinating, this fascinating, actually, like, there's this, there's part of this analysis Speaker 1 (14:57) is there is a possibility that some of these tankers are secretly paying the Iranian toll. So there's... There's a corollary to this where previously it looked like, wow, this is all because of the Iranian blockade. But apparently there are some indications that at least some portion of these ships may just be paying Iran under Speaker 7 (15:19) the table. In fact, I can prove it, and we can add this in post. Brett Erickson, oil analyst, flagged this. On September 17th, the Treasury Department announced some new sanctions, and this kind of slipped under the radar, no pun intended. But in it, it says, quote, this is from the Treasury Department. Since June of this year, OFAC designated, that means sanctioned, sanctioned Hormuz Safe Marine Services Authority Speaker 3 (15:44) has Speaker 7 (15:45) used BitBank to transfer payments it received to the Iranian regime. Wow. So according to the Treasury Department, this... sanctioned organization set up to receive money for letting tankers go through the strait has been sending money to the Iranian regime. Another thing. So people are, according to the Treasury Department, paying Iran to get their ships through. And over the two weeks since then, you did see a lot more. Great point. Speaker 3 (16:13) And you know, this Speaker 7 (16:13) is part of the other problem where Speaker 3 (16:15) people celebrate just the oil getting through. Rory flagged this. He was directly quoted in The Wall Street Journal. He says part of the surge may reflect. or exporters Speaker 1 (16:22) rushing barrels out before new escalation. Gulf oil producers are currently shelling 30 to 40 million for a round-trip shuttle run in and out of Hormuz, which is $15 to $20 premium per barrel before the cost of insurance. I mean, so you've got a $15 to $20 barrel premium just to get this stuff out of Hormuz on a highly inefficient, highly expensive, just for the tankers themselves, not to mention the, what, hundreds of millions of dollars of U.S. naval assets, U.S. Marines. and sailors and Black Hawk helicopters that are all trying to move these Speaker 3 (16:54) things through. And you've still got oil at where it is right now. Let me take a look at the current market price is somewhere around, yeah, about $102 a barrel, which reflects probably the situation happening in Yemen. But Speaker 1 (17:07) if you have it all here together, this is just not sustainable. And look, Speaker 3 (17:12) I always want to try and present some of the other parts of this. So like, let's, this is to the Iranian strategy. Let's put A4 up here on the screen. And Scott Stevenson actually put this quite well. One of the reasons why today feels so crazy is Speaker 1 (17:27) that currently, as we see from this graphic, if you're younger than 45, This is literally the first time in your entire life that you are experiencing real-time, real rising interest rate. The last time it happened was 1960 to Speaker 3 (17:42) 1980, which fundamentally changes the physics of the game, as he says, in a way that many won't be prepared for. I mean, I guess the most easy way to understand it is that money is expensive, right? It's not cheap. You could make an argument that the entire reason that we had the VC and technological rise of the 2000s to today is because of cheap money. And there was an entire period which is known colloquially as ZERP, like the zero interest rate phenomenon, where zero interest rate alone was Speaker 1 (18:14) responsible easily for multiple giant – busts like WeWork, for example, and like all of these other crazy investments. But now Speaker 3 (18:24) when we have money being so expensive, obviously it's a disaster for normal people like us. And you know, what is it? Mortgage rates are 7.2%, something insane right now. But I do think what he is pointing to is that when things feel insane in our economy beyond just gas prices, but also including home and rising rent Speaker 1 (18:45) and all these other things, it's because you actually are living through a period of genuine economic history. And that gets to Iran's strategy. They look at this and they're like, that's it. I need that number. Just keep going up. As farther it goes up, the more this Speaker 3 (18:57) economy will get strangled in the long run. Speaker 7 (18:59) Yeah, and with zero interest rates. It encourages taking risks. So that also encourages the kind of VC boom because you can't park your money anywhere and get anything more than like half a percent. Now you can park your money and maybe get 5%. Yeah, I mean, Speaker 3 (19:14) it's a decent return. And so Speaker 7 (19:16) when you're thinking about