Baron of Ivy Grottage

"Take a simple idea and take it seriously"

Reality over fantasies
Actions over words
Track records over forecasts
Incentives / skin in the game equals outcomes

[Baron of Ivy Grottage @ICBarrett]

$OIH $RIG $VAL $NE $SDRL
I think we're getting closer & closer to the offshore drilling event horizon. That's 16 rigs removed from global marketable fleet in last year (see post below).
If I were an operator I'd be feeling a lot more uneasy about securing required drilling rigs in next few years if the increased demand scenario comes to pass...
(P.S. No idea how $RIG stock will react short term.)

[Scolopax @ScolopaxCapital]

$rig Transocean : 5 rigs to the bin. 4 6th gen DS (stacked for 5-9 years) and 1 SS (stacked since 2020). Positive move.

Only 3 stacked rigs for $rig (7th gen DS). Stacked since 2016-17, not even sure we'll see them back.

[Baron of Ivy Grottage @ICBarrett]

@BankerWeimar @UnicusResearch I'm slightly behind on my X lists!

[Baron of Ivy Grottage @ICBarrett]

@FullRupture @westcoastailabs 🤣🤣🤣

[Baron of Ivy Grottage @ICBarrett]

@JeffreyRWRath cc: @Hydroxyl_Acid

[Baron of Ivy Grottage @ICBarrett]

Great post.

[Esfandyar Batmanghelidj @yarbatman]

Iran has included three important tests within the terms the MOU it is negotiating with the United States. These tests are intended to give Iran's leaders confidence that Trump, a counterparty they see as highly unreliable, is ready to make credible commitments, opening a pathway for further diplomacy.

First, the Iranians are testing the credibility of American security commitments by insisting that the MOU encompasses a Lebanon ceasefire. They are not doing this for the sake of Hezbollah or Lebanese Shias. Rather, they want to see if Trump can restrain Israel in its own backyard. If Trump is able to do that, then he might be able to defend his own deal with Iran from further Israeli sabotage.

Second, Iran is insisting on a nominal fee for vessels passing the Strait of Hormuz. This is not because they want more revenue, which would be negligible. They are insisting on this arrangement because they want to test whether Trump will endorse a deal that includes a clear instantiation of Iranian sovereignty and authority, especially one that did not exist before the war. Iran believes in the logic of a win-win agreement. Trump does not. Forcing him to accept a fee forces him to give Iran a "win" and to defend it as such from the Iran hawks in his circle. This is politically meaningful.

Finally, Iran is insisting on a the release of frozen assets. The sums in question are a tiny fraction of the economic cost of the war and the release of assets is not as valuable as sanctions relief that Iran will also be targeting. But by insisting on the release of funds at an early stage of the negotiations, Iran can test whether broader economic commitments, such as sanctions relief, will be credible. Iran will only consider the promise of sanctions relief to be credible if Trump's sanctions bureaucracy allows Iran to move and spend its own money. The Iranian side will insist on transactions that push the Trump administration to set new precedents for how sanctions relief can be operationalized, especially through guidance to banks.

For many in Washington, these demands seem unreasonable. But that is entirely the point. Iran's leadership won't tolerate a kind of narrow deal that allows U.S. policymakers to avoid putting political capital at stake. Iran wants a deal that reflects the unprecedented nature of the war and ensuing crisis. To meet the moment, the diplomacy has to be transformative.

Iran's leaders don't trust Trump, so they are testing him. So far, he is failing these tests.

[Baron of Ivy Grottage @ICBarrett]

No they can't - the relative positions are VERY different to when US invaded Iraq in 2003: US has declined significantly and is now behind Iran in missile & drone tech. Iran is also virtually impossible to invade due to size & geography + missile & drone defences.

My comments are entirely consistent with the reality as it has played out - and I predicted from start US would not be able to reopen Hormuz by force.

It was obvious - for the reasons I laid out in my post above.

What is your track record on the matter?

[Baron of Ivy Grottage @ICBarrett]

What if there is literally no way the US can defeat Iran on its home turf? They don't have the forces, the magazine depth, the industrial base, the will - and couldn't even bring them to bear if they had.

It still surprises me how hard it is for people to accept this reality - even as it becomes increasingly obvious.

If even the Houthis could repeatedly drive US carrier groups away from the Bab al-Mandab - how could the US possibly land a large invasion force (that doesn't even exist) in Iran?

[HFI Research @HFI_Research]

Events tonight illustrate once again that there are no negotiations with the IRGC. Half-ass approaches will only waste time.

We either go all in and destroy the current regime, or we accept that the global energy market will be held hostage forever.

Pick your poison.

[Baron of Ivy Grottage @ICBarrett]

@6number6 My comments are entirely consistent with the reality as it has played out - and I predicted from start US would not be able to reopen Hormuz by force.

It was obvious - for the reasons I laid out in my post above.

What is your track record on the matter?

[Baron of Ivy Grottage @ICBarrett]

Agreed. Some people think the world will force Iran to the table. I think that is obviously wrong: it was US / Israel started this + they Iran take a lot more pain than everyone else - having already survived under heavy sanctions for many years.

Also, both China and Russia (and most of rest of world) would far rather see US / Israel humbled and Iran stronger. Even the GCC countries must be v wary of Israel's ambitions by now.

[Baron of Ivy Grottage @ICBarrett]

@BenFitzkee @pati_marins64 https://t.co/8RiO96Z1Yp

[Baron of Ivy Grottage @ICBarrett]

I don't agree: Iran has a lot of leverage and it is increasing every day 10mbpd+ of gulf oil is shut in. It doesn't appear that way externally as the US / West have been successful in suppressing oil price / using reserves to replace missing barrels. But that game can only work for a limited time.

It is Trump - not Iran - who is on the clock. Trump / US are attempting to find ways to increase pressure on Iran to find a way of improving negotiating position / forcing concessions. Iran has shown - esp this last stronger-than-your-provocation response - that it understands the game and won't give Trump an out.

It is also making it explicit that it will use its leverage to stop Israel's rampage - which is exactly what I would do if I were them.

They have the leverage, they can force the conclusions they want by steadily keeping the vice closing on US / Israel.

[Baron of Ivy Grottage @ICBarrett]

I don't agree: Iran has a lot of leverage and it is increasing every day 10mbpd+ of gulf oil is shut in. It doesn't appear that way externally as the US / West have been successful in suppressing oil price / using reserves to replace missing barrels. But that game can only work for a limited time.

It is Trump - not Iran - who is on the clock. Trump / US are attempting to find ways to increase pressure on Iran to find a way of improving negotiating position / forcing concessions. Iran has shown - esp this last stronger-than-your-provocation response - that it understands the game and won't give Trump an out.

It is also making it explicit that it will use its leverage to stop Israel's rampage - which is exactly what I would do if I were them.

They have the leverage, they can force the conclusions they want by steadily keeping the vice closing on US / Israel.

[Baron of Ivy Grottage @ICBarrett]

Correction: "We Created a Monster Killer"
I have no idea how Iran can be called reckless - given who started this war and the general behaviour of US and Israel over many years.
What is actually happening here is the bullied kid grew & trained enough to finally be able to successfully confront a pair of psychotic bullies that had been terrorising the whole neighbourhood for years (decades).

[Danny (Dennis) Citrinowicz ,داني سيترينوفيتش @citrinowicz]

"We Created a Monster"

Iran’s reckless behavior over the last 24 hours, including its threat to attack Israel if Israel strikes Beirut, is a direct consequence of how the recent war ended.

Tehran now feels far more confident in its position, believing it successfully withstood military pressure from what it views as the two most powerful militaries in the world: the United States and Israel.

This is not a temporary spike in rhetoric. It is part of a broader and more dangerous trend. Iran increasingly sees itself as the patron and protector of its regional proxies, extending what amounts to an informal security umbrella over groups such as Hezbollah and other members of the so-called “Axis of Resistance.” The threat against Israel over Beirut reflects this growing sense of ownership and responsibility for its partners across the region.

More importantly, this is further evidence of a profound shift in Iran’s decision-making process following the death of Supreme Leader Ali Khamenei. For decades, Khamenei was fundamentally cautious when it came to the direct use of Iranian military power, particularly when the risk of confrontation with the United States was involved. That restraint appears to be fading.

We are entering a new era in which Tehran feels stronger, more secure, and increasingly confident in the credibility of its deterrence. Iranian leaders now appear to believe that their willingness to absorb military pressure and survive it, has enhanced rather than weakened their strategic position.

The result is a more assertive Iran, a more dangerous Middle East, and a growing risk that future crises will escalate faster and further than anyone anticipated.

#iran
#IranWar‌

[Baron of Ivy Grottage @ICBarrett]

@lucapette @DanielLMcAdams @pati_marins64 https://t.co/XkEzCHiBHd

[Baron of Ivy Grottage @ICBarrett]

This is a very peculiar conclusion - for which I can discern zero evidence. Just looks like more flailing to me.

"Trump, unlike on other occasions, now appears to have a solid plan to prevent the organization and positioning of Iranian military equipment in Hormuz and the Gulf, while simultaneously reducing Iranian state revenues."

@policytensor did you ever get any more information on who @pati_marins64 might actually be?

I note you suggested tone of account writing changed - perhaps inc a more obvious slant to conclusions. I agree - I wonder what's going on?!

[Baron of Ivy Grottage @ICBarrett]

@TheFlyingSilo 💯

[Collingwood 🇬🇧 @admcollingwood]

Ignoring the (strongly) rumoured US Treasury intervention to hold down oil prices, could it possibly be that they have not gone higher because countries (mainly the US) are drawing down private and strategic reserves at a prodigious rate, and markets believe that the risk of them hit rock bottom and sending oil prices truly lollapalooza will force Trump to TACO, but there is no real evidence that Tehran is willing to offer a deal politically acceptable to Washington, so eventually markets will panic that their theory was wrong, and we will lose sight of prices rising about the time they break through the ozone layer?

Of course, I am not a credentialed economist, so what do I know?

[Baron of Ivy Grottage @ICBarrett]

@simcox_gm As ever, reality will teach them the lessons they need to learn!

[Baron of Ivy Grottage @ICBarrett]

💯. I can't bear the idea of turning my life into a S*stack grind. Isn't the whole point of being an investor the interesting game of testing your ideas / thinking vs. reality and freedom from the grind. Do these people all really just love writing??

[Gorge Sorrows @teto8k]

migrate behind a sstack paywall. which I find puzzling. if your ideas generate alpha, in a few years you'll have more money than you know what to do with. why bother nickel & diming for an obligation to write ? if it's merely to sharpen your skillset, why the paywall?

[Baron of Ivy Grottage @ICBarrett]

@IAMExceptional7 @icxcnika7 💯

[🤠AI Rabbi Weimar Silver Baron 🤠 @BankerWeimar]

😆 I was just reading these claims

USA air defenses are trash… objectively

[Kenneth Dredd @KennethDredd]

Rip bogleheads

[Baron of Ivy Grottage @ICBarrett]

@icxcnika7 Unfortunately I totally agree!!