The Four Iran War End-Games Revisited, And The Peak Pressure Points

Submitted By Peter Tchir of Academy Securities

A Yogi Berra Kind of Weekend

There is something special about “home openers.” The baseball season can drag on, but the home opener is such a great reminder that summer is on the way and that the possibility of winning it all remains in your reach. Maybe that is why I have Yogi Berra on my mind.

Or maybe, and far more likely, it is because a lot of recent discussions seem to lend themselves well to Yogi-isms. It is easy to start a conversation with a mindset of “we are pulling out soon, with a weak deal,” and wind up ending at “we are all-in” for a final victory. And vice versa.

It ain’t over ‘til it’s over.
When you come to a fork in the road, take it.
I didn’t really say everything I said.
The future ain’t what it used to be.

To name a few.

On Wednesday we published our take on the likely and possible paths we would be on after the Presidential Address. After the address, all we could say was - all the paths are still in play. If that isn’t in the realm of Yogi Berra, nothing is.

Media and Academy’s Podcast

On Friday, after the More Strange than Strong jobs report, Academy was on Bloomberg TV. The Academy segment starts at the 1:52:40 mark. It isn’t important that I wore a pink shirt and purple tie for the Easter weekend, it was important that the 2nd half of the interview was very focused on the conflict in Iran. The hosts were incredibly complimentary of Academy’s Podcast, so it seems like a good time to provide you with the links to our podcasts.

End State and Timing

It is so easy to get twisted in circles on the subject of where this conflict is going. One moment it seems like there might be cooperation to open the Strait. The next moment, more infrastructure in Iran and the region is being hit.

The “four” end conditions that we see are:

No Deal. The U.S. just pulls out, without any real political change. The message will be – we broke it again (even more than in June 2025) and we will continue to break it if we have to. You will hear the phrase “mowing the lawn” over and over until you are numb as to what that really means for the region. This is a very bad outcome for the U.S. and for the world.
- If this is the outcome, almost irrespective of whether we get there tomorrow, next week, or a month from now, there will be dramatic power shifts in the region. Countries across the globe will rethink many of their political alignments. Remember when we wrote, back in early February, Molotov Cocktails, Volatility, and Stability (well before the U.S. vs Iran conflict started)? This would leave the region with Molotov cocktails everywhere, just waiting to be ignited.
A Weak Deal. It could be the terms of the deal. It could be who, in Iran, is on the other side of the deal. It could be the ability to really monitor/enforce that the terms of the deal are being abided by. It could just be that it leaves the risk of “mowing the lawn,” in the relatively near-term, as highly likely. Also, if there is no deal to officially open the Strait, the U.S. would be in a very difficult position, making it harder to claim a win. It could be some combination of all of the above. Basically, it is a “deal” that the admin tries hard to sell as a “win” that most of the U.S. (and probably the entirety of the rest of the world) doesn’t see as a win at all. This is better than no deal, but only marginally so.
- Timing probably matters here, a little bit. A weak deal today, while not particularly good, is probably easier to sell as a win today, than it will be a few weeks down the road. Veni, Vidi, Vici. It is easier to spin the “we came, we saw, we conquered” nature of this sort of deal today. The more damage that is done in the region, the more difficult it will be to claim victory. The longer that fighting continues and this is the “best” we can get, the more questions will be raised about what actually happened behind the scenes. Not good for global stability.
A Strong Deal. Everything that a weak deal is not. Negotiated with someone clearly in power in Iran for the foreseeable future. Steps taken to reduce the threats from missiles and nuclear weapons going forward that have teeth and an enforcement mechanism that seems viable. It could include protections for the people of Iran. It could include (though this seems less likely by the day) provisions to open the country to investment by American businesses (which would be part of shaping the regime longer-term). This would have to include a deal on the nuclear program as well as a turnover of the Iranian nuclear material. A really, really, really good win.
- The sooner the better, but timing isn’t crucial. The longer it takes to reach this end state, the worse shape the global economy will be in. The supply chain disruptions, already occurring, will continue. Problems will compound. Presumably, the longer things go on, the worse the damage to infrastructure in the region will be. Sooner is better, but only at the margin.
Complete Victory. Some sort of uprising. Something where nascent signs of insurrection (which were seen in January and February – with “mysterious” fires and other things in Iran) reveal themselves. Where we wind up with true regime change. An Iran that no longer threatens not just Israel and the U.S., but also anyone it considers to be standing in its way. This is a country, the GIG generally agrees, is the one nation most likely to use nuclear weapons if they manage to get them. The balance of power between “good” and “evil” will have shifted dramatically. This would be a great outcome for the admin and the world!
- This is by far the most dangerous timeline. Ideally countries in the region and across the globe support the effort. Enhancing capabilities while spreading the risk. But it is difficult to see this achieved in a "2 to 3” week timeframe. Not that it is impossible, but it is just unlikely. It is also difficult to see this occurring without a serious uptick in casualties. It seems awful to have people pay the price for this success. It will affect friends, families, neighbors, and colleagues. Yet, while I have no military experience, that has often been the cost of changing the world for the better. This outcome is likely to come only with a lot of soul-searching and risk. Having said that, the outcome changes things dramatically. It was in 2002 (almost 25 years ago) that President Bush delivered his “Axis of Evil” speech. The magnitude of what this potentially does in terms of a safer world is difficult to overstate.

The Pressure Points

The U.S. is applying key pressure points on Iran:

Systematically eliminating their ability to wreak havoc. Degrading their military and their ability to resupply themselves is the main pressure point the U.S. and Israel are exerting. Only Iran knows what capabilities they have left, but the more we destroy things, the worse shape they are in, at least with respect to continuing the fighting.
Hitting their economy and their will to fight. So far it is unclear how much damage we have done to their economy. Their economy was always clandestine, and they should have been prepared for this, so putting a length of time on economic conditions forcing Iran to the table is very difficult. So far, we haven’t gone “all in” on this path (like taking Kharg Island) but look for increased focus on economic pressure points in Iran.

Iran is applying key pressure points on the U.S.:

Economic hardship. Affordability. Is the U.S. willing to continue to fight a conflict that was not sold well to the nation initially (the admin has improved on this front lately) and is causing problems at home? This is the main pressure point Iran has. Basically, betting that America doesn’t have the fortitude to withstand economic challenges, even if, in the grand scheme of things, those challenges are small and short in duration. That is the main pressure point.
The Iranian Proxies.
- So far the proxies have been quiet. The Houthis started firing some missiles as Isreal, but so far have not tried to deter shipping through the Red Sea. The proxies may not have faith in Iran’s ability to support them going forward, so they are laying relatively low. So much damage was done to the proxies that they don’t have the ability to do much damage this time around. Both of those are probable, which is good. The tail risk is that they are waiting to choose a “time and place” that maximizes whatever they have left.
U.S. casualties. Ultimately this pressure point depends on the steps the U.S. military takes. If the attacks remain primarily “standoff” as opposed to boots on the ground, the American casualties can be kept small. But any casualty gives much of the country cause for concern and causes some domestic pressure to end things. More casualties, which is almost a certainty if the U.S. enters a “boots on the ground” phase, will turn that concern into a cacophony of people calling to end the war. This is ultimately a more powerful pressure point than the economy, but fortunately, is at least partially out of Iran’s control, since it is dependent on the types of attacks the U.S. deploys.

Both Sides Trying to Apply Pressure:

NATO has done very little to aid the effort. In some cases, even restricting airspace. Iran seems to be trying to negotiate “safe passage” for tankers headed to countries that do not help the U.S. All of this is designed to “drive a wedge” between the U.S. and traditional allies. The admin has taken a relatively aggressive posture with those allies, and that doesn’t seem to be helping.
The Gulf Countries. At the start of the conflict Iran attacked many of these countries. They did target American bases more than anything else, but it turned the Gulf against Iran. That continues to be the status quo. On an almost daily basis I see stories about potential military commitments from countries in the region. That would be good (though there are questions about their training and readiness). At the same time there are risks that their attitude changes and they “just want out” of the current state of affairs, even if it leaves Iran as a threat. Not seeing that yet, but…

This is an incredibly tense moment for all those in power.

More Background

While things have been evolving rapidly, last weeks From Economist to Military Strategist, Another Manic Monday, and Ceasefire Negotiations are worth reading as they highlight not just the framework about how Academy is thinking about the conflict, but also how we’ve been adapting and changing as the information unfolds.

Vertically Integrated Countries

One outcome of the war will be more Vertically Integrated Countries, which aligns with our ProSec thesis.

Bottom Line

The “sell” everything risk remains high. Bonds are just not behaving as “Safe Havens” when countries need to spend more on energy and everything derived from energy, and are also likely to have to ramp up their defense spending!

The best outcomes, as we see them, are likely going to take time. Time is not the friend of markets right now. The “easiest” way to extend the relief rally with another big pop in stock and bond prices, is likely to be the “least good” from a longer-term perspective.

It is incredibly difficult. It seems that the admin does pay attention to the stock market as some sort of metric. Weirdly, that might not be helping as it makes it extremely difficult to judge the real direction vs what is just something designed to help the market near-term. The “fog of war” is real and while this is unsettling for markets, it is hopefully equally unsettling for the Iranian regime.

Hope you are enjoying this long weekend (for those who had Friday off) and are prepared for next week! Which will likely start with another “green dot” Sunday and then Academy kicks off the week at 5:45am ET on CNBC.

And let’s finish with more words of wisdom from Yogi Berra – “If the world were perfect, It wouldn’t be.”