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Speaker 1: Well, here we go again. President Trump just announced that

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Speaker 1: he's calling off tonight's scheduled bombing of Iran. If you're

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Speaker 1: keeping count at home, that's literally the fifth time he's

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Speaker 1: done it so far during this war. He posted on

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Speaker 1: truth Social the discussions with Iran were going so well

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Speaker 1: and they're at the highest levels of Iranian leadership that

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Speaker 1: he's going to call off the strikes, and he reassures

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Speaker 1: us that peace is just about to break out. The

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Speaker 1: Iranians are finally coming to heal. Now, I collected the

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Speaker 1: most extraordinary data set. This sounded sort of familiar, so

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Speaker 1: I went looking for how many times in the past

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Speaker 1: President Trump has told us we're on the cusp of

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Speaker 1: a deal, And it's a pretty extraordinary list. In fact,

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Speaker 1: two weeks before the war started, he said Iran wants

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Speaker 1: to make a deal very badly. Then, of course he

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Speaker 1: started the war, and each and every day, not every day,

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Speaker 1: he's taken a couple of days off, but every few

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Speaker 1: days he's come out once again and told us we're

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Speaker 1: on the cusp of indigna war. In fact, at this

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Speaker 1: point I counted fifty separate occasions over roughly twenty five days.

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Speaker 1: Separate days in which he's told us we're on the

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Speaker 1: cusp of a war. In March, he said, we have points,

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Speaker 1: major points of agreement. I would say almost all points

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Speaker 1: of agreement made. If that's true, what's taken so long?

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Speaker 1: In April he said it should be days, not weeks. Well,

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Speaker 1: it wasn't days. In May he said, we're getting close

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Speaker 1: to making a deal. Well, Sunshine, it's quite a bit

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Speaker 1: later right now. Later in May, the end of May,

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Speaker 1: he said the US is close to a deal. Well,

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Speaker 1: we're almost halfway through June now, And a couple of

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Speaker 1: days ago he said we are very close to a

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Speaker 1: final deal with Iran. In fact, if you collect all

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Speaker 1: of the quotes, it's several pages of the president, day

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Speaker 1: after day, time after time, reminding us that we're on

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Speaker 1: the cusp of victory. I want to juxtap that with

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Speaker 1: something else. What we saw today. It was actually a

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Speaker 1: pattern we've seen throughout this war, which is anytime the

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Speaker 1: president de escalates, the American stock market goes up. And

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Speaker 1: if you think about that, people are buying and selling

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Speaker 1: stocks based on a bed about the future profitability of

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Speaker 1: large American companies. And so if you see the price

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Speaker 1: of stocks go up when we de escalate. That's markets

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Speaker 1: saying that they believe that the future profitability of American

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Speaker 1: firms will be higher if we don't escalate the war.

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Speaker 1: And the flip side, by the way, is also true,

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Speaker 1: which is every time the President has escalated, American stocks

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Speaker 1: have fallen quite substantially. It's what led me to suggest

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Speaker 1: that markets are reacting as if they believe that the

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Speaker 1: Iran war will take a trillion, possibly three trillion dollars

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Speaker 1: off the value of American equities, which is a huge,

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Speaker 1: huge effect. Now today what happened was the President announced

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Speaker 1: for the fiftieth time, literally the fiftieth time, that we're

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Speaker 1: on the cusp of ending the war, and American stocks

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Speaker 1: rose by one percent. A natural question that I get

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Speaker 1: from some people is why do markets keep getting suckered

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Speaker 1: by this? And I think I want to give you

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Speaker 1: a different lens for thinking about this. Maybe it's not

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Speaker 1: that markets are being suckered. In fact, that markets understand

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Speaker 1: that the President only occasionally tells the truth. That then

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Speaker 1: means that when the President speaks, there's a good chance

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Speaker 1: it's noise rather than signal that it's nonsense rather than

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Speaker 1: something to respond to when you speak, This way, of course,

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Speaker 1: that provides an incentive for markets to respond less. If

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Speaker 1: there's only a one tenth chance that what you say

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Speaker 1: is going to be true, then the markets should only

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Speaker 1: respond one tenth as vigorously as it otherwise would. Now,

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Speaker 1: if you think about that, the consequences actually are terrifying.

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Speaker 1: So a known liar says something that could be good

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Speaker 1: news or could be a lie, and markets rise enormously.

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Speaker 1: The only way that that makes sense is if it

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Speaker 1: turns out to be the truth, very very valuable for

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Speaker 1: American corporations, and so that markets respond as much as

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Speaker 1: rising one percent based on a statement from a known

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Speaker 1: layer is another way of saying markets are behaving as

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Speaker 1: if they believe if they were told for sure the

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Speaker 1: war was going to end soon, that American stocks would

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Speaker 1: be worth a whole lot more. So, I think the

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Speaker 1: right way to think about this is in fact, that

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Speaker 1: markets once again are doubling down on the idea that

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Speaker 1: this war is very economically expensive for the United States.

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Speaker 1: And I've talked before, the question here is not how

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Speaker 1: much of the Bobom's going to cost. The question is

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Speaker 1: what sort of crater will this war leave in the

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Speaker 1: global economy, What sort of ongoing damage. How long will

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Speaker 1: the stratophim WWS remain closed. How will Iran use its

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Speaker 1: leverage that it now knows that it has over the strait.

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Speaker 1: How much will this affect future US defense spending. How

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Speaker 1: much will this change our role in the world. How

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Speaker 1: much will this affect our ability to cooperate with others

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Speaker 1: around the world and reshape future economic opportunities. And the

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Speaker 1: stock market And again I'm not saying the stock market

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Speaker 1: is the economy, but the stock market is responding as

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Speaker 1: if this is an intensely important moment for the US economy,

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Speaker 1: that the number one story that matters for the US

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Speaker 1: economy is what happens in Iran. Anyway, I find that

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Speaker 1: sort of interesting. We're also going to see over the

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Speaker 1: next few hours foreign markets respond probably even more. And

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Speaker 1: that's because this is a war that doesn't just rewire

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Speaker 1: America's place in the world, but actually has even bigger

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Speaker 1: effects on other countries. And that's because the US is

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Speaker 1: largely oil independent, other countries much less so, and so

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Speaker 1: the suffering that we're seeing in the United States is

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Speaker 1: not quite as bad as we see in other countries.

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Speaker 1: And then I want to give you one final note

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Speaker 1: that worries me a lot. We've actually seen versions of

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Speaker 1: this two step before the president moves forward on some

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Speaker 1: policy that he believes deeply and not based on analysis

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Speaker 1: but his gut, and then American stocks tank, and then

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Speaker 1: what he does is he walks it back. We saw

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Speaker 1: this happen a lot during the tariff wars. Look, here's

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Speaker 1: the thing I worry about. That's a reasonable feedback loop

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Speaker 1: some of the time. But if you're a known liar,

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Speaker 1: then that then means that markets are not going to

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Speaker 1: believe anything that what you say. That in turn means

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Speaker 1: that markets are going to moderate how much they respond

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Speaker 1: after you say something. And that in turn means that

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Speaker 1: you could say something wildly foolish and markets might think, yeah,

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Speaker 1: he's probably going to walk that back. He probably didn't

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Speaker 1: mean that, If he probably didn't mean it, if half

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Speaker 1: of what he says is garbage, then we don't need

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Speaker 1: to respond. And if we don't respond, that breaks that

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Speaker 1: feedback loop from the president to Wall Street and from

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Speaker 1: Wall Street to the president. That's that problem that the

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Speaker 1: president does a liar, not a reliable source of truth,

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Speaker 1: which markets to underrespond. That's separate from a related issue,

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Speaker 1: which is If the president responds to the market, and

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Speaker 1: the market understands that the president responds to the market,

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Speaker 1: then this is something people worried a lot about during

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Speaker 1: the trade was Then if the president does something stupid,

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Speaker 1: the market understands that if the market falls, he'll undo

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Speaker 1: the stupid thing, given that the market doesn't need to fall.

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Speaker 1: If the market doesn't fall, then that feedback loop is broken,

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Speaker 1: and the president persists with the stupid thing. Look, let

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Speaker 1: me step back. There's actually two really big points that

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Speaker 1: I wanted to make here. The first is, in an

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Speaker 1: information environment in which the president has moved from taking

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Speaker 1: communication with the American people and with investors seriously to

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Speaker 1: lying in an ongoing and repeated way, that fundamentally changes

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Speaker 1: how we should think about any form of communication. The

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Speaker 1: extent to which the President is repeated lies this time

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Speaker 1: would be funny if we weren't talking about something so serious.

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Speaker 1: And the second thing is, once you take that into

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Speaker 1: account and you still see markets responding, then you should

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Speaker 1: understand that's market's really saying, hey, look out, we think

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Speaker 1: this is really really dangerous, so dangerous that we respond

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Speaker 1: to it. Even if we understand there's a pretty good

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Speaker 1: chance the president's lying