More on War

David R. Kotok
Tue Jan 23, 2024
About three weeks ago, on January 4 Javier Blas of Bloomberg posted a tweet in connection with his Bloomberg opinion column that showed the impact on world shipping of the Houthi attacks in a single map, which, as he says, is “worth a thousand words.”
Here’s a screenshot of the tweet. Click on it to view the original, with enlargeable map.

On the same day, US Central Command issued the following statement: “The Houthis will bear the responsibility of the consequences should they continue to threaten lives, the global economy, and free flow of commerce in the region’s critical waterways.” (
The image below is a posting by ISIS. They claim responsibility for the recent suicide attack in Iran, which the president of Iran originally blamed on the United States. What insight can we gain from this event? ISIS we know, from all the mayhem it has wreaked on the entire alliance of Western nations. So this event, which has nothing to do with the US or Israel or the alliance of 11 countries trying to maintain open Middle East shipping in the midst of chaos, is reason to pause and reflect on how complicated and nearly impossible it is to achieve reasonable, peaceful solutions to current-day geopolitical conflicts. Opposing America, the linkages now run from Moscow to Iran with help from North Korea; and the operatives include Iran-backed Hamas, the Houthis, Hezbollah, Palestinian Islamic Jihad, and others. But the operatives are clearly not united, and this ISIS attack inside Iran and against the Iranian regime shows how internal division makes any settlement impossible. Note the references to “polytheists” and the invocation of martyrdom. 
In sum, we in the Western alliance face a deadly enemy. 
(From a tweet by OSINTdefender, an “open source intelligence monitor focused on Europe and conflicts across the world.” )
Natalie Cohen, President and Founder of National Municipal Research, sent along some observations on this issue, and we thank her for permission to share them with you. Here’s Natalie:
1. Re: Shipping… one cannot disregard the convergent issue of climate change with shipping delays through the drought-affected Panama Canal and the potential for ongoing recurrence. Add to that geopolitical adversity affecting trade and supply chains, e.g. energy, tech manufacturing inputs, construction materials, etc.
2. Asymmetry: To your point about asymmetry of information and military power in war, which you’ve written about several times, the podcast “Lawfare” replayed a 2019 episode last Saturday, “The Future of Warfare,” that speaks to your points. The link is here. The three speakers were very insightful — notably Laura Blank, law professor at Emory. I’ll summarize how some of their major takeaways might apply today: 
When combatants are asymmetric in their capabilities, “the less capable side is never going to defeat their adversary”. Hence, the goal for the weaker adversary is to erode the legitimacy of the enemy’s operations; i.e. how badly can they make the enemy look? “Legitimacy” is one of the US Army’s key principles for engaging in armed conflict. This is not a new principle. However, Hamas’ actions were masterful in provoking and publicizing an aggressive response from Israel following Oct. 7 (probably well beyond what they ever imagined). Shifting the spotlight to Israel's response and US support, (rather than their barbaric slaughter and hostage-taking of civilians) has changed world opinion, awakened latent antisemitism, driven a wedge between the US and its western allies, as well as disrupted any peace progress among the US and countries in the Middle East. All this adds to delegitimizing Israel and the US on the domestic and global stage while Hamas have received limited (political) backlash. Hamas’ "just cause" goes back to the 1948 “nakbha” (“catastrophe”) and this could be a key moment in history to make the case that they should reclaim land that was “confiscated" with the creation of Israel. 
3. Geopolitical chess: Is the US losing its global position or is it explicitly stepping back? And is there a permanent shift in global “collective action”? Since 9/11, Lawfare podcast speakers point out, the US has been focused on non-state adversaries. Such battles are taking place far away from US soil, which makes it more difficult to engage support among the US population and Congress and to assert legitimacy. How much is the US willing to do and spend to maintain a status quo order? Paying for humanitarian aid still has popularity, but it too comes within the asymmetry when an adversary has limited humanitarian concern for its civilian population. Rather, pictures of suffering women and children, destruction of hospitals, mosques and schools and starvation at the Egyptian border, advance their cause. 
4. Defense: Failing to maintain US defense technology (aka readiness) because it’s deemed too costly (including physical and cyber as well as a supply of well-educated personnel to maintain and operate), we could discover that it’s not so easy to recover, if it’s recoverable at all. Further, the notion that we can evolve technology to surgically hit targets while protecting innocent civilians is hubris. It is impossible to avoid civilian casualties and mistakes. Prof. Blank discusses this folly and also raises the point that data feeds and GPS are relatively easy to scramble (using a cigarette lighter-sized device). She feels this will most certainly happen somewhere in the near future. 
5. Finally, the laws of war were crafted in more of a peer-to-peer context (i.e. among state actors with formal leadership) and the law is slow to change.

Academy Securities is “our nation’s first post-9/11 veteran-owned and operated investment bank with strengths in capital markets, asset management, public finance, geopolitical intel, fixed income and equity trading. We operate at the intersection of geopolitical risk and finance.” (

In its SITREP (situation report) for January 4, 2024, Academy discusses a series of targeted assassinations carried out by Iran and its proxies, by Israel, and by the US since the October 7 Hamas attack. Then, six former US generals, who are members of the Academy leadership team or advisory board, weigh in on the reported events. It’s compelling analysis from men who really know how geopolitical conflict works, and it bolsters my assertion that a modern version of world war is ramping up. The evidence is staring you in the eye. 
“Academy SITREP – U.S. Drone Strike Kills Iran-Backed Militia Leader in Baghdad,”
Fast forward to today. 
Iran has launched a missile attack inside Pakistan.  India has sided with Iran against its rival Pakistan.  Iran-backed Houthi Yemen is finally on the US designated terrorist list after they have repeatedly tried to sink a US warship.  Houthi Yemen is receiving upgraded missiles from Iran via Somali vessels.  Rockets are still being launched from Gaza by Iran-backed Hamas.  Iran-backed Hezbollah in Lebanon have daily salvo exchanges with Israel.  Worldwide shipping rates continue to rise and major companies have changed their strategies for a prolonged period of turmoil.
Meanwhile, we wait for the Congress to fund the full allocations for the defense budget needs of the United States.
We remain overweight in the defense sector in the US Equity ETF portfolio.


David R. Kotok
Co-Founder & Chief Investment Officer
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