By Peter Tchir of Academy SecuritiesFighting While Talking, Horses, and SecuritySome quick updates on recent themes. The latest on Iran is front and center, and if you missed this week’s Around the World, it is worth a look. Not just an Iran update, but we also cover Cuba, Russia/Ukraine, the China Summit, and Nigeria (I certainly need to get more up to speed on Africa). We will examine Universal Basic Income and the Job Market in the section we have decided to label Horses. While it feels like we’ve been talking about ProSec in one shape or form for well over a year (because we have), rather than getting “long in the tooth” it is just starting to get traction.Fighting While TalkingThe definition of “ceasefire” is what both sides make of it. It is easy to think of a “ceasefire” as being as simple as both sides “cease firing” at each other, but that is not how it works in the real world.The concept of continuing attacks (typically but not always limited in scope) while discussing agreements has gone on since people first started picking up rocks and throwing them at each other. From a U.S. perspective, it was an explicit policy of Nixon and Kissinger when dealing with North Vietnam. Negotiate in Paris. Bomb away in Vietnam.As the much anticipated announcement after Friday’s “situation room” meeting failed to materialize, we are reading of reports of Iran attacking U.S. bases in Kuwait. This, of course, from an Iranian perspective, is in response to some U.S. attacks last week in Bandar Abbas and in the Strait of Hormuz.We can only assume negotiations are ongoing, as neither side seems prepared to go back to a higher level of military activity, so this is merely both sides reminding the other that they could go that way, if they wanted to.Also, from our GIG, it has become very clear that the U.S. blockade of the Strait surprised Iran and created leverage that the initial military attacks had not.The only thing I can say about the negotiations is that I think most people have become, at best, tired of the endless stream of “we are close” announcements. We’ve lost track of how many times markets have rallied on such announcements (often, but not always in the form of social media posts). At worst, there is a cynicism growing that the announcements are merely political attention-seeking moments, coupled with an “opportunity” to trade. The number of people who immediately search the prediction market sites, or look for large trades in oil or stock futures to see if there is some sort of “confirmation” that the headline is new and real, is almost staggering.While the front end of the crude oil futures market (which is not the same contract as when this war started) responds very well to peace deal announcements, the longer end of the curve is not as responsive. I’ve been picking the January 2027 WTI contract because it is WTI (so it benefits from U.S. energy independence and it is 2027). It is still $77. Below its high of $83, but not much below. It didn’t get above $77 for the first time until late March. This was below $60 prior to the war. I guess this is a long-winded way of saying Higher For Longer On Energy Prices.The consensus is that we will not see serious re-escalation, but both the U.S. and Iran seem to be having difficulty in framing a deal as a victory (Iran, because it has been hit hard, and the U.S. because we seem to have moved a long way from “unconditional surrender”).The one thing that I think is starting to sink in is that higher for longer on energy is real, even with a deal, and that is problematic for a world struggling with affordability.HorsesWhat the heck are we talking about horses for? What do horses have to do with anything, let alone AI? We have seen commencement speeches where college graduates have booed the mention of AI. We had the rather unfortunate (in my opinion) term “lower value human capital” enter the lexicon. My editors cringe at some of the things I write and say, but wow!Not surprisingly, we have seen many in the industry downplay the risks to jobs. Even some leaders who until recently had predicted job losses, especially for white-collar employees, reversed course and are now predicting hiring based on increased efficiencies.I think the jury is still out on this. There are some examples that I’ve seen that seem to indicate the potential for employment growth.One story I’ve seen, but didn’t track down for the report is “AI’s ability to analyze X-rays has led to more radiologists.” Seems plausible and certainly fits the efficiency story (though there may be other reasons we have more radiologists).Another report that was circulated, and that I found on social media, discussed how the number of tellers in the U.S. rose even with the introduction of ATMs. You can find the post on Twitter by searching for AI ATM Tellers. This was passed around as an example of how people (tellers in this case) adapt to new technology and become more efficient. The reason I did not include a link to this idea is because I think it is quite flawed and did not feel like starting a fight. It did not normalize for a large growth in the number of people working in the U.S. during the phase that ATMs were rolled out, presumably creating greater need for banking. It didn’t discuss that during the first 20 years of the ATM, the GDP of the U.S. quintupled. It was also a period where suburbia grew. I would argue that if you controlled for the number of people who needed accounts, the increasing complexity of personal finances, and the shift in population, this probably more than accounts for why tellers didn’t fare as badly as initially feared with the introduction of ATMs. Anyway, I’ve ranted too much on this subject, but I think it is important that we think critically about what various technologies have or have not done for employment.Buggy whip manufacturers. If you take an introductory business school class you will likely hear about the “plight” of buggy whip manufacturers.A great business until the advent of the automobile. The automobile, over a relatively short period of time, destroyed this business. But the automobile was great! The automobile companies did spectacularly well! (Though many of the early, even well-known ones failed, but that is a concept for another day). The country did well as the automobile (and trucking) reshaped the economy for the better! Isn’t this the perfect example of how a new, efficient technology drives growth and jobs as a whole, even if some sectors lose?But what about the horses? According to Grok, there were over 25 million horses and mules in the U.S. around 1920. The “horses” were “employed” on farms and for urban transport. Recent estimates put the horse population at under 7 million today. Now, the horses that are alive today are mostly for recreation, sport, and breeding, rather than working. Far fewer horses today, but those horses that are around live the life of Riley compared to what their ancestors lived.If AI is like what automobiles were to humans, we are in for a great ride!If AI is like what automobiles were to horses, we could be in some trouble, though those left working should be in great shape!