Latest / The Decision Advantage / The Monthly Briefing: Red Sea Pressures & Geopolitical Flashpoints
Transcript
- Brian: Welcome to the Decision Advantage, a fusion intelligence podcast by Fernic Consulting. I'm Brian LeClaire and today I'm joined by the CEO and founder of Fernic Consulting, Dr. Don Hersey. Don, welcome to the show. Ferndon Consulting: Good to be here, Brian. Thank you. Brian: Well, welcome back. today we are looking at our monthly segment, breaking down current global events and what they mean for the world of risk management. I should point out that we are recording this the day before the United States midterm elections. So we're gonna steer clear away, from that topic and let the dust settle and see what the final results are. But so outside of the elections, what are you tracking this month and what be a good topic to talk about today. Ferndon Consulting: Well, Brian, you and I were actually talking earlier about the Iranian two-day plan, which I'm not talking about the elections per se. I'm talking about outside that seems to be just waiting for the elections. Because if today is Monday and we're recording, tomorrow is Tuesday, the elections, and the second day would actually be Thursday, the day after the elections. And the feel that I'm getting from around the world is that the world is waiting with bated breath to see what we end up doing in a lot of Deadlines are being pushed right after these these midterm elections. So I'm actually extremely curious to see how this Iranian plan is going to end up unfolding. Whether they're just saying, give us two more days to see how our elections go, or whether they actually mean it. Brian: Right. So I I guess that's the the real thing. Is is there gonna be a change once the elections are over? Ferndon Consulting: That is a very good question. My gut instinct would be any change would be more lined towards an escalation, but we'll end up seeing. there is so much military hardware that has moved into the Gulf of late. And we were having a discussion recently saying why do we have so much military hardware moving in there? there's been an increase of attacks reported on some of the tankers down in the Red Sea area from the Houthis increasing activity. And a lot of increasing riots and and points of contention. So when I think about these rising points of contention, I just think the the world feels like it's like it's a water balloon about to pop. Brian: Right. yeah, and it's and it's not even just Iran, it's n you know, it's definitely the whole region, but there's other hot spots around. So the world analogy Ferndon Consulting: Yeah. Brian: is, i is is a good one as as far as it it potentially popping Ferndon Consulting: Right. So I've been tracking a few other ones. So if we're looking at Europe, you've got not only the protests that are across Europe and you're seeing a lot of these and they're not just students, they're they're across society. You also have a lot of the ports when you have a lot of the port workers and the dock workers who refuse to work. So there are strikes in quite a few ports and docks, over a hundred of them from what I was tracking in in multiple different countries and multiple continents who are refusing. Brian: And these are more than more than just picket lines too. There's actually violence here. Ferndon Consulting: Yes, yes. Some of these actually have definite violence in them. And some of them are just people saying, No, I won't work. So it's it's the entire gamut. but you have that, so that's that's impacting things in those protests we were talking about. And then you also have some of the the governmental frustrations that we recently saw in Poland. and that one I'm curious to see how the the Polish consideration ends up unfolding as well. So Poland is right between Right between the East and the West, you could say. It's that section right between Russia and much of Western Europe. And and they've been very concerned regarding Russian activity. so they've that's part of the reason why they they're saying that they keep inviting American military entities, or they were, to set up bases there, as many American military entities were previously moving out of Germany. And Poland's like, hey, bring them right on over. We don't want the Russians to come in again. We we wanna get away from them. Yeah, so the concern in in Poland is is also of great interest. Brian: we were just discussing how it's not really getting a big news play, what's happening in Poland. Ferndon Consulting: No, it's not. And I actually had to go looking for this stuff on poll and one of my analysts was mentioning it to me. I'm like, what? I haven't heard this. So when I pulled it up, the first reports that I actually found were not in English, even. So we had the French ones that they were pulling from, the Russian ones we were pulling from. And then there was like a little bit of a commentary in English, but it was far, far less detailed than the other languages, which made me very curious as well. So there was there was that consideration. And then in the same region too, there's been an increase in concern regarding the shortage of grain being shipped out. So the grain that comes out of Russia and Ukraine has been seriously lower in volume of late, and there's a lot that's not even making it to the docks to move out. and a shortage of food ends up triggering larger instability because when people are hungry, they they kind of want food. So that's that's a bit more along those regions too. So it just feels like we got a powder keg going on here. Brian: from the world of risk management are what what are your feelings and what were your recommendations to prepare for what might be coming ahead? Can can we prepare? Yeah, yeah. Ferndon Consulting: Depends on which area of Riskman. Well, th there are a lot of ways that you can prepare. The it's funny too. Europe is now stating there are a lot of emphases in Europe saying, hey, everyone be prepared for a 30-day power outage or 30-day shortages. And a 30 right. And the the US Brian: How do you even do that? Yeah. Ferndon Consulting: military, there's actually just an announcement that came out in one of the military things for here in the US saying military bases should be preparing for a 30-day cutoff. So how do you do that? And I I would leave that more up to the emergency managers to speak to it more effectively, but there's the civil resilience, understanding your community, there's the making sure you have water, water filters, those types of things, backup batteries, but a a 30 day also you just mentally prepare for it and think, hey, what resources do I have? What resources might I not have? And it's easier to at least even just think about it. You might not have to stockpile thinking the world's all gonna end. But if you at least have a game plan for where you may be able to go, what you might be able to do, that is super helpful. That's just on a personal level. But for a business, that adds a whole nother level because depending on how widespread these are, it could be regional. So if you don't have a redundancy to be able to produce a certain part, or if you don't have backups for a certain capability, and that region that provides that one thing is the part that's cut off. that ends up affecting your ability to meet your contracts, your obligations, and and that it's not very Brian: Right, Ferndon Consulting: good for the long run, yeah. Brian: right, so that ties back into the supply chain issues that we've talked about on this podcast several Ferndon Consulting: That ties back to Yes. Brian: times. Ferndon Consulting: Yeah, I was actually talking to a manufacturer recently and he he had been talking to me about the risk management people who were saying, Well, in this global manufacturing firm that has specializations in different parts of the world, so different the same company has different we could just call them factories or production sites, and each production site has its own area of specialization. production site that was in Vermont was unavailable. Well, why can't they produce the same thing down in South Carolina? Because they don't have the equipment. And then in order to move the equipment, you actually have to access it and then be able to move it and and it becomes a little bit more challenging. So Brian: especially if we're in a state of emergency and and transportation is affected or or any of these other Ferndon Consulting: Yes. Brian: things, yeah. Ferndon Consulting: Yes indeed. So this is going to be extremely interesting as well. But yes, the powder keg of the world. Brian: Right. So we we spiraled away from Iran pretty quickly there. 'Cause it's easy to do, right? Ferndon Consulting: It it it is, and we almost feel like that one's just beating a dead horse. I will say one other thing about Iran, just just briefly as we're doing considerations for the way entities are gonna behave, and I'll I'll make a couple of quick analogies here. I found it's kind of easy to understand a country in terms of its national animal. This is how we depict ourselves, right? America, we are a great, powerful eagle, right? Noble, incredible. Brian: Yes, indeed. Yes. Ferndon Consulting: We soar above all others. Okay. Iran is a lion. So Iran is a wounded old lion right now. Iran is not stupid. Iran is powerful. and Iran is still located in its home area and it's still able to influence. So the more you attack a wounded old lion, are they likely to roll over or are they likely to fight back? And how are they gonna fight back? Are they gonna be fighting back? Intentionally, or they're going to be lashing out anything they can grab and reach with their claws. And that's an thing to be considering about Iran, just as a notation. Pattern analysis indicates that Iran would be lashing out. We look back at the Iran-Iraq war or some of the other incidents that have happened in our history when Iran has been attacked. Iran will lash out and they will use whatever they have at their disposal. Back in in the Iran-Iraq War, they were putting together a holy defense, I think it was, or a sacred defense. And they were recruiting fighters all the way down to 12 years old, according to some reports. And they were sending these fighters across to fight. So they literally rallied society to defend the homeland. But now, if you take about that, the more we push Iran back, there's population is hurting and suffering, are they likely to default to that type of a thing too? And then and then what could be the secondary effect of such? what where will they be lashing out? In what manner will they be lashing out? Brian: basically underestimating them again is what we're doing. Ferndon Consulting: I'm not saying we're doing that. I'm just saying that looks like we could be doing that if we keep pushing them. But the thing is too, Iran has also learned from history and has stated this that they understand that if they keep lashing out, the West will back down. We are risk averse. So that brings us to a a bit of an impasse. If we back down, they will have one. If we keep pushing, there will be pain. so I I don't know how this is going to unfold, but it will be interesting to watch. But the animal parallel is also another fun one. Because another thing that recently came out in the news is the United States government has been actively encouraging a lot of Europeans to step down on their anti-Russian rhetoric or their be prepared to fight Russia rhetoric. The Baltic states, especially, because they've been very concerned, especially with the increased defense manning and supplies and materiel being shipped in and out of Kaliningrad. And Kaliningrad, as I'm sure is that little enclave of Russia that's wedged between the Baltic states and Poland. It's right in there. And it's yeah, so it's only really accessible by rail or by water for the rest of Russia. But Kaliningrad's had a huge explosion of activity of military logistics. and the Baltic states, I can understand why they'd be a little bit concerned. Brian: Absolutely. Ferndon Consulting: But if the United States is pushing for them to be quiet, why? Why are they asking them to decrease the rhetoric? And Russia's animal is a bear. So how do you handle a bear? If we take the same parallel, we could ask a bear expert, well, when a bear is agitated, what do you do? Brian: Yeah. So are there any animals in Europe that we can compare? So we we've got Russia and Iran. Yeah. Ferndon Consulting: Well well it was it was hilarious. Okay, okay, so I I actually had to look into this. Okay, so France was a rooster. Because I started that one. And then no, no, Brian: Okay. Not a terrifying sort of animal. Ferndon Consulting: and then and then Canada, bless its heart, is a beaver. so I had to look at a couple of little ones. But yeah, so this is just it it is interesting to think about. It comes if we think of Canada, they're not aggressive, they're not assertive, they they Get their stuff done, they do things, they're accustomed to cold weather and adversarial conditions. Non offensive entities unless you want a forest and they cut it down or you don't want things flooded and they i it it that makes sense, right? Yeah. Brian: Industrious, but not aggressive. Ferndon Consulting: Exactly. Brian: It's yeah, it's an interesting way to think of the geopolitical system here and that we have and and the Yeah, yeah, exactly. Ferndon Consulting: In terms of animals, yeah. Well, this actually is a another fun one if we just take another one of the big powers of the world. if you look at China, officially their animal is a panda. However, historically it's been a dragon. And dragons we know are very cunning. they're smart, intelligent, they like controlling things and having their little hordes. yes, and they're they're very mystical. But the fact that China puts out the panda could also be a very interesting indicator that it wants people to consider the dragon as something lovable and friendly and more congenial. Brian: And a panda is still a bear too. So, I don't can Ferndon Consulting: Panda is Brian: you can you always trust the panda? I don't know. Yeah. Ferndon Consulting: I don't know. this could be an interesting discussion with the panda psychologists. Brian: Right, right. Well, we got off track a little bit, but I think it's still relevant. It's still relevant. So yeah. Ferndon Consulting: It is interesting. Brian: So are there any other hot topics you wanted to address today in our little monthly recap of things? Ferndon Consulting: I'm very much looking forward to seeing what happens in the next little bit. one of the other things that was mentioned to me recently, the way that Israel's election unfolds is probably also going to have a lot of interesting repercussions across the Middle East. if America were to take action on Iran or if other people were to to do something similar, Israel is kind of the the primary ally for that. also depending on the way these elections unfold would would affect a lot of Israel's behavior regarding Hezbollah, Hamas, and just even positioning. So we're I'm very curious to see how that one will end up going. Mr. Netanyahu has a a very strong position in a lot of these these sectors and that will actually Brian: Right. And it it may. Ferndon Consulting: have some very interesting ramifications as well. Brian: That may take some time to sort out over there too. So Ferndon Consulting: It might. Which is one of the other interesting things, which is why it feels like we're we're on a bit of a a knife's edge here that there are so many of these elections going on right now. I mean we look at Brazil's election, we look at some of the other elections that are happening in Europe. A lot of these large countries are facing a big decision by their society as to which direction they want to go and some of it's reactive. some of it I have a lot of hope for. But there's so many moving pieces that it's it's adding pressure to the the international system. And I know earlier we were talking about my little my little world of pressure, but I'll bring out my my little friend here. One of them popped earlier. So if we think about the international system I know, but we might again. So if Brian: Sorry we didn't catch that on on air. Yeah. Ferndon Consulting: we think about the international system, I've been telling people it's a lot like a water balloon. And then I was saying I should probably do this on video, but I really don't want to have a water balloon blow up in my face. But I I thought of a really fun alternative. Brian: That would be exciting. Yeah. Ferndon Consulting: No, it wouldn't. No, no, it wouldn't. All right, so I found one of these wonderful gloves and I filled them up because this is how we prepare for Thanksgiving. You know how you made the little turkeys as a kid with your hand? So think about the world as a big balloon. And you can see this world was a little bit traumatized. He's blue because he's water, and he is made from a a glove. Now, with all of these different points of pressure, we start applying pressure to the glove. Or to the world, the balloon. But the problem is, as we keep applying pressure in different points, you can just see, he's probably gonna blow up fairly soon. But what's actually going to trigger it, it could be one of these pressure points. This could be my finger, maybe my finger's got a really sharp nail and it just digs in, or maybe there's something that we don't know about that's gonna come by and pop him. But the more pressure we add to this balloon that is our world, the more likely the world is to descend into something that. we can't really recover from in a very readily manner. a a a global conflict or a super disruption of the the international order even. And actually he's not blowing up this time. I don't know why, but that's actually brilliant. So this Yes, you know what? Because while Brian: Yes, maybe that's that's a good sign, perhaps. Yeah. Ferndon Consulting: we were talking we we had my other little buddy and he he kind of blew up. So I don't know how the one who was even blown up even further than he So maybe this is a good indicator. Maybe maybe we're not gonna have the world explode coming up. but this is all I'm thinking about is the more points of pressure we have, the more my little guy gets mutated and he's doing great. This guy's doing fantastically. All right, you're a resilient world today. Thank you for not blowing up on camera. Yeah, me too. Yeah. Brian: I'll take that as a a as a good sign. Yeah. I'll take that as a good sign. Ferndon Consulting: A good indicator for the future. But yes, that is that is the way I've been kind of seeing this. Brian: Well you had mentioned last time that if people have any questions for you or Fernand in general, they could write in. So they could write in either in comments or shoot us an email at team at fernan dot com. so maybe we can address some of our viewers' comments on future shows. So unless you have any other thoughts. Ferndon Consulting: Well, let's hold on to your seats and put on your seat belts and possibly try and buy your fuel while it's on this dip right now. so fill up your your gas tanks, keep them full. let's just see where this goes. It doesn't hurt to to be a little bit of prepared just in case. so we're not reactive. And yeah, it'll be a fun next month, I think. Brian: Alright, well until then, I wanted to thank our listeners for tuning in today. And just a reminder that all of our podcasts are available on YouTube, Apple Podcasts, Spotify, and other services, and you can find links to all those and more at podcast.fron.com. I'm Brian Leclerc and this has been another episode of the Decision Advantage. Thanks for tuning in.