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Dec 19 19 tweets 7 min read Read on X
Why do I think the Houthis are such a force to be reckoned with? Why do I think there is actually a chance they could defeat a US led coalition?

Time for a thread 🧵.
First, who are the Houthis? Where are they from?

The Houthis come from the Yemeni province of Sa'dah, on the edge of the Arabian desert.

They're a Shiite Muslim group whose roots go back to ancient times, when they produced frankincense and myrrh, two important ancient spices. Image
The ancestors of the Houthis traditionally ruled all of Yemen.

Eventually, the Yemeni were conquered by the Ottoman turks, and would later become a British colony administered as part of British India until it became a colony in its own right. Image
After the fall of the British Empire, North Yemen allied itself with Saudi Arabia and Taiwan, while the South allied with China and Russia.

From 1972, Yemen fought a Brutal civil war in which North Yemen was eventually victorious.

In 1988, Yemen began reunification. Image
Ali Abdullah Saleh transitioned from president of North Yemen to the President of all of Yemen in 1990.

Around this same time, Zaidi-Shia group Ansar Allah - or the Houthis - began gaining power.

They supported Saleh for the time, helping him crush a 1994 Southern rebellion.
Seeing the threat that the powerful Houthi warriors posed, in 2000, Saleh began trying to disarm them.

In 2004, it turns into a limited civil war, in which hundreds of Houthis are killed or arrested.

Sporadic fighting would continue until 2009 when Saleh sought to crush them. Image
Besieged by both Saudi forces and the Yemeni government, which was supported by the United States, the Houthi rebels continue to fight and survive.

In 2011, they were aided by the eruption of the Arab Spring, a populist uprising that would change the course of the Arab world. Image
Saleh and his government would continue to cling to power in Yemen until 2014. Saleh has by now turned power over to his deputy, Abdrabbuh Mansour Hadi.

A 2014 rise in fuel prices, with tensions already high following the crescendo of Arab Spring tensions, helped the Houthis. Image
The Houthis seized power in 2014 following a coup, and after taking the capital of Sana'a, moved southward to begin an offensive against government forces.

Hadi fled to Aden in in the South, where he would re-declare himself the legitimate ruler of Yemen, resisting the Houthis. Image
In 2015, A Saudi-led coalition of Arab states—including the United Arab Emirates, Egypt, Morocco, Jordan, Bahrain, Sudan, and Kuwait - with the material support of the US - joins the Yemeni government in fighting the Houthis.

The coalition attacked by land, air, and sea. Image
Despite an all out "scorched earth" war against the Houthis by virtually the entire Arab world and increased US arms sales to the Saudis, the Houthis remained undefeated and continued to gain ground against the Yemeni government. Image
The Houthis would claim numerous victories over the coming years, not only against the Yemeni ground forces, but against coalition ground forces, coalition air forces, and even coalition naval forces.

No matter how much they got hit with, the Houthis kept winning.


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In 2016 the Houthis even managed to completely destroy a coalition warship, the Emirati HSV-SWIFT 2.

The ship was targeted by a Houthi anti ship missile.
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By 2019, the coalition has fallen apart. The Houthis have assassinated many key figures in the Yemeni government. They landed a huge blow against the Saudis in the 2019 Abaqiq attack. UAE forces have completely withdrawn from Yemen.

The coalition decides to let the Houthis win. Image
On March 30, 2022, Saudi Arabia announces a cessation of all military operations in Yemen.

The Houthis have won. Against all odds, against the whole Arab world, against the United States, from a small city in Northern Yemen, the Houthis have conquered the country. Image
Fast forward to today, are the Houthis weaker than they were a decade ago? Far from it.

The Houthis now enjoy mass popular support and have inherited vast Yemeni weapons arsenal as well as supplies from Iran.

They enjoy a strong strategic position at a vital choke point.
My reasoning for thinking the Houthis are a force to be reckoned with is simple - they have already proven it, over and over again, while vastly outnumbered against foes supplied and supported by the most powerful empire the earth has ever seen.

The Houthis are the Fremen.
The Houthis have proven that they cannot be starved. Years of blockade were ineffective.

They have proven that they cannot be defeated with technology - they have downed countless modern European and US built aircraft.

This enemy will fight to the last man.
Were the US to throw its full might into defeating the Houthis there is no doubt that we could eventually prevail.

But could we, really? Or would it be another Vietnam? High material and personnel losses for a place that 99% of Americans can't locate on a map. Deeply unpopular.

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More from @calvinfroedge

Dec 17
Possible outcomes I see w Suez Canal:

- The Navy arrives and Captain America mops up the Houthis by 9:30 AM Monday morning so stocks can rally all week like we all expect and deserve
- The Navy is cautious and keeps out of range because there is actual danger. Slow progress.
- The Navy engages and attacks Houthi facilities and Yemeni cities. Iran responds, triggering a larger war.
- The Navy attempts to cover individual ships at great expense and with continued mishaps. Ships continue to avoid the canal. The Navy is unable to stop the attacks.
- The Houthis effectively get paid to stand down.
- It's a trap. The Houthis not only have ballistic missiles that can hit moving ships (a world first), but they have weapons that can sink US naval assets - like the surprise sinking of the Moskva by a Ukrainian Neptune.
Read 6 tweets
Dec 13
Time for my "why are we so bearish oil" thread, I'm gonna be looking at 10 year seasonal EIA data.

Let's start with total oil+product inventories - a 10 year low. Image
Gasoline. We started the year at the bottom of 10 year seasonal levels and now we're in the middle of the range. So probably a bit over supplied there. Image
Now diesel. We started the year at a 10 year seasonal low and we're still there.

This is WITH a supposed freight apocalypse, German industry shutting down, etc.

WHERE'S THE DIESEL, LEBOWSKI? Image
Read 15 tweets
Dec 12
$VTNR is a profitable company that looks loss making due to large interest expense realization in Q2 on extinguished debt.

Going forward:

- Lower interest expense (< 1/2 YTD levels)
- Lower capex (1/4 of 2022 levels, 1/3 of 2023 levels) Market totally ignored the Q3 beat. Image
The market is worried about debt. The most egregious portion of that debt load (Term loan due April 2025) had prepayment penalties expire on October 1st.

I expect refinance or pay down. This company is A LOT healthier than it looks at first glance. Half cash on hand for payoff.

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If you look at the core business, Q3 proved the business can generate big profits.

Renewable margin should improve over the next year with recent EPA win and expanded throughput capacity.

I'm long because I see:

- Profitable core
- Dropping interest expense
- Much lower capex Image
Read 4 tweets
Nov 8
This is one of the most important charts in the world, expressing one of the most profound economic stories of the last century.

Let me explain. Image
After WW2, at the center of the new world monetary order was the need to establish trust in the currency of the world's dominant military power.

Despite having taken the US off the gold standard during the new deal, it was decided gold backing was essential to produce faith.
The problem was, the US government had run up huge debts during WW2, and trying to fix the prices of a number of commodities to maintain monetary stability.

But inflation began to pick up, and all the gold began to disappear from the United States.
Read 18 tweets
Nov 8
A possible catalyst for $EC is that Colombian court hearings just started on the legality of royalty non deductibility, which was one of the tax changes Petro introduced.

If overturned, it will have a material positive impact on $EC taxation impact.

asuntoslegales.com.co/actualidad/cor…
If royalty deductibility is upheld - and there are a number of private claimants here who feel they have a strong legal case - it could lead to positive restatement of Colombian E&P results for 2023.

Fingers crossed for some extraordinary dividends 🤞
Given Petro's recent legal troubles (especially w/ his son) and the disastrous results for coalition mayoral candidates, there is no reason to think the royalty case will be politicized.

I expect Colombian courts to uphold the rule of law.
Read 4 tweets
Oct 8
There is no parallel, going back to the formation of Israel as a state, for yesterday's attack.

It was the single bloodiest day for Israel in its entire history as a nation.
Despite a number of incursions and conflicts, Israel hasn't declared war officially since 1973.

During the entire 1973 Yom Kippur war, Israel suffered only 2,688 lost IDF and no civilian casualties.

In 24 hours Israel has seen at least 600 dead and 5000 wounded.
High ranking Israeli officers have been killed or captured. Numerous Israeli armor assets have been destroyed.

Only one conflict *in the past 50 years* has had the kind of impact on Israel that yesterday's attack did.

Do not brush this off, this is a 9/11 moment for Israel.
Read 10 tweets

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