I was honored to be a guest speaker at UCLA Anderson School of Management’s Entrepreneurship Leadership Development Program (ELDP), a mentorship program for MBA students.

The ELDP is a mentorship program for select UCLA MBA students to meet monthly with their CEO/Entrepreneur mentors in a format that resembles a YPO (Young Presidents’ Organization) Forum. A meeting typically consists of student updates on their projects and struggles, a guest speaker who shares his or her entrepreneurship journey, and several in-depth presentations by students. I was honored to be a guest speaker recently, and since it was not recorded, I thought I would share my presentation here.

Rather than follow the typical chronological lifeline format, I chose to present Ten Axioms that I’ve tried to live by—principles that have served me well throughout my career. I share them here.

Axiom 1: Stay intellectually curious and question, question, question!

I love to learn for the sake of learning. I have always been extremely curious about everything since I was a kid. I was that kid who constantly peppered teachers with questions, and the most common feedback from my teachers on my report cards was “Michael likes to keep me on my toes.”

Sometimes I can exhaust people. A good friend from business school observed that I once hounded a lecturer with question after question and then suddenly stopped at a certain point, and he asked me why. My response was: “I found the limit to his ability to answer.” He brought this up to me recently, and it made me realize that it was a subconscious pattern and that, depending on the context, I might sometimes need to censor myself.

My curiosity certainly got me into some trouble as a kid. Left alone at my parents’ business after school, I was often bored and tried all kinds of experiments. I nearly burned down my mom’s warehouse once because of my curiosity about fire. I think maybe that’s why my mom bought me an Apple II computer as a diversion to keep my attention, and that certainly succeeded.

As I detailed in "There And Back Again," I fell in love with computer programming at a young age because it was a source of constant learning and creative problem-solving, which absorbed my insatiable curiosity. I was sure I was going to be a video game designer when I was 11. But life works in mysterious ways, and I would find another source of constant learning and creative problem-solving through a career in financial markets.

I am still very much a “curious kid” today, and I still sometimes exhaust my family and friends, not to mention speakers and tour guides, but at least I don’t play with fire anymore. These days, I love doing deep-dive historical travel, and last year I wrote about three incredibly enriching experiences: Ruin Hunting In Tunisia, Musings From Oxford, Ruin Hunting In Roman Britannia (Hadrian's Wall). When I get into something, I really get into it.

Asking questions is more important than ever in the Age of AI. To me, AI represents an infinitely patient and inexhaustible resource for my insatiable appetite for questioning. Like the way the Apple II absorbed my attention when I was a kid, AI coding has similarly absorbed my attention lately with the development of UrbanKaoberg, which has been a fascinating collision between my original love of programming and ongoing love of financial markets.

Axiom 2: Luck = Preparation + Opportunity.

Everyone gets opportunities, but if you aren’t prepared to recognize them, they will pass you by. Since most of my subscribers are likely involved with investing or trading the financial markets, this sounds obvious. However, I first learned this lesson from a totally different perspective early in my career during my first job as a programmer at Goldman Sachs.

Upon arriving in NYC in 1992 for Goldman’s three-month training program for its IT hires prior to their official job start, I was thrust into a crash course in finance, covering all aspects of financial markets as well as how Goldman makes money in each of its divisions. A scant year before, I did not know a stock from a bond, knew nothing about financial markets, and had never even heard of Goldman Sachs or Morgan Stanley until I interviewed with both firms. My girlfriend worked for Bear Stearns at the time and taught me what the Dow Jones Industrial Average was and what “IPO” meant and really opened my eyes to a whole new world.

I had graduated with a degree in Electrical Engineering and Computer Science and only pivoted in my senior year away from pure Silicon Valley jobs because of higher pay opportunities that Wall Street provided. I took the job because I thought I could use my immediate coding skills and learn about “business” at the same time, and to me, I had equated “Wall Street” with “business.”

One thing I immediately learned during this training program was that the job function I was hired for was a support role and a cost center, not directly involved in the revenue/profit generation side of the business. More importantly, I learned from some other trainees that this meant my upside would be capped. I resolved to learn as much as I could about the “front lines” of the business and explore how I could move horizontally.

At the end of the training program, I was placed into the J. Aron Currencies and Commodities division (the infamous 5th floor of 85 Broad), so I resolved to learn as much as I could on my own about these areas. I read numerous books, took courses, and started visiting HR on the 18th floor to see how I could break into trading. The HR representative gave me more books to read; I dutifully followed up, and he would do the same thing again, sending me on endless “wild goose chases.” I was impatient, frustrated by the apparent lack of horizontal mobility, but I was learning a lot in the process.

Two opportunities presented themselves over the course of the next several months, but I did not know they were opportunities at the time.

My first lucky break came a couple of months into the job. I was called into a planning meeting between the senior programming team of the J. Aron IT department and the FX sales and trading team for the upcoming project to design a new Currency Options sales and trading interface. The senior programmers presented a plan that made sense from a programming efficiency perspective; the sales and trading team presented their needs, which seemed to be much more complicated.

The two groups weren’t speaking the same language. The problem was that the senior programmers didn’t understand the core workflows that the trading desk needed, and the trading desk didn’t understand what could or couldn’t be done from a technical perspective. Rather than lock the traders into pre-programmed templates (the original proposal), I suggested an open, extensible framework that could allow any combination of options to be linked as part of a single ticket. The FX folks loved my idea, and my proposal won out. The “wild goose chases” had paid off by preparing me, unknowingly, for this moment, and the Currency Options project became my responsibility.

Several months later, as my Currency Options module was rolled into production, I was called out onto the trading desk to debug a problem with the rollout. The senior FX salesman Jon was yelling at me about the bug when his biggest client, George Soros’ Quantum Fund, called with a request for a two-sided market on a USD/DEM (Deutschemark) options strategy for $500 million notional size (a pretty massive trade at the time). The entire trading floor went silent, as the traders were trying to figure out whether Soros was a buyer or seller.

I wanted to understand the trade mechanics, so I asked Jon to explain it to me. He sketched it out on a napkin and accidentally got it backwards, and I corrected him. He acknowledged his error, and I didn’t think any more about the conversation until two days later I got a phone call at my cubicle—from my boss’ boss’ boss.

It was Richard Witten, who co-ran J. Aron with Lloyd Blankfein. Apparently, Jon mentioned our interaction to Richard, and Richard asked if I would be interested in interviewing for a job on the sales and trading desk; my answer was a resounding “YES.”

This was my second lucky break and the one that led me down the path of a finance career over the next several decades. I’ll be forever grateful to Jon and Richard for giving me that shot, but had it not been for the “wild goose chases” and the learning that went with them, that interaction would never have happened.

Axiom 3: Be dependable and “scrappy.”

The first post-IT role I was hired into was a junior analyst position supporting the Precious/Base Metals group right on the trading floor. It was my first time working full-time on a trading floor, and the J. Aron trading floor was every bit the rough-and-tumble Wall Street portrayal you see in movies—a football-field-sized floor with rows and rows of trading desks filled with shouting traders, traders letting off steam by throwing tennis balls at each other across 100-foot expanses (while buzzing the noses of unsuspecting Partners), traders sometimes smashing their monitors when emotions ran high. The energy was electric.

It was organized chaos (or dare I say KAOS), but it was also pure, unbridled meritocracy in action as traders lived and died by their P&L. It didn’t matter how young or old you were; if you had a good idea that had money-making potential, people listened. I was hooked.

“Jimmy” Riley was the Partner who ran Metals as well as the newly formed GSCI (Goldman Sachs Commodity Index) product, which was created in 1991. Jimmy was a trading legend who ran the desk like a football coach/drill sergeant. He was the most aggressive and instinctive trader I ever met, and I learned all of my “street smarts” during my time with Jimmy.

As the single junior analyst in this group at the time, there was no shortage of project requests coming at me from all directions, and I never said no to any of them. Although my first responsibility was to help the Precious Metals team, I found myself doing a lot of side projects for Base Metals as well as GSCI. I learned early on that when anyone asked me to jump, the correct answer was “How high?”

A few months later, a third lucky break happened. One of the two GSCI traders was transitioning to a sales role, and I was invited to fill the vacancy as a junior trader. I wound up trading GSCI for the next several years, which turned out to be an incredible learning platform.

For training, I clerked on the floor of the COMEX Gold Pit at the World Trade Center for a couple of months, where I served as the go-between for the “upstairs” trader on the J. Aron trading floor (usually Jimmy) and the “downstairs” floor-trader in the COMEX Gold Pit. I learned to gauge market sentiment by listening to and watching the actual flows and emotions in the pit.

When I got back “upstairs,” my main job was to make markets in all underlying GSCI products, including futures, options, swaps, and structured notes. I then had to arbitrage the index against its 22 underlying commodities, which in turn forced me to trade with all of the other trading desks within J. Aron, including Oil and products, Natural Gas, Grains, Metals, Softs, and more. The only commodities we didn’t have internal desks for were Meats and Cotton, so I had outside brokers for those. Because GSCI was a nascent product that didn’t have much in the way of market-making flows yet, we had to add value by taking proprietary positions in the underlying commodities. I learned to “always have a view” in everything I touched.

To thrive on my desk, traders had to go through “trial by fire” with Jimmy. Early on, I entered a Live Hogs futures long position because I was convinced of an impending technical breakout; I convinced Jimmy of the merits of my position, and he tagged along at 10x my size. The trade worked out after a couple days and Hogs closed limit-up one day. I was very proud of myself and even prouder that I got Jimmy into a profitable trade. After the market closed, Jimmy called me up from his office and asked me to make a market on his whole size. I said, “Jimmy, the market just closed.” Jimmy: “I don’t care if the market is closed. Your job is to make markets. Make me a market!” I figured that because I was the proponent of the long, I had to stay bullish, and I quoted him the closing bid plus a tight spread. Jimmy sold me his entire 10x position at the highs of the day after the market close. The next day, the market reversed and closed down significantly, as I struggled to offload the position Jimmy sold to me. My P&L was in tatters, and I learned a valuable lesson from Jimmy: Never let your ego get caught up in a trade, and always try to read the intent of whoever is trading against you.

Jimmy tested me like that several more times, but I learned to read him and not get scalped by him again. He called me into his office one day, and I was bracing for a tongue-lashing because I thought he was pissed that I didn’t let him off the hook on another trade. Instead Jimmy said: “You know what I like about you, Mike Kao? You’re scrappy, and you’re a fast learner.”

Eventually, I was lucky enough to be the GSCI market maker in charge when one of the largest pensions in the US made a GSCI allocation. I had to provide and source the liquidity for what felt like an “elephant moving through a mousehole.” It was an incredible time.

Being a trader at J. Aron was one of the most intense and exhilarating rides of my career, and the only reason I got the opportunity was because I never said no to any requests for help, even though many of the side projects weren’t part of my “job description.” It was a very intense “baptism by fire” experience, but it taught me how to be dependable and “scrappy” in the face of high pressure—two qualities that would help me throughout the rest of my career.

Axiom 4: Creating “Franchise Value” is what gets you Equity in a business, and getting Equity in a business is where the upside is.

What I loved about being a trader was the pure meritocratic nature of it. At the end of every trading day, the accountants would distribute hard copies of every trader’s P&L for the day for all to see. I now had my own line, and it was both exhilarating and terrifying. It was like getting a daily report card. There was no place to hide.

Over time, I made two critical observations.

First, there was tremendous Franchise Value in certain seats, and those traders who were fortunate—and capable—enough to fill those seats received outsized rewards. If you were the head Gold or Oil or USD/DEM trader (remember this was pre-EUR days), for instance, given the dominance of J. Aron in those markets, the institutional flows alone were worth a lot of money to capable market makers filling those seats. It was almost guaranteed P&L and a near-certain path to Partner.

The second, more surprising, observation came when the Natural Gas trader, who had been posting large, consistent losses, made Partner. How did that happen? He created an entirely new Franchise for J. Aron. I filed this important nugget away.

Years later, after I had left J. Aron and finished my MBA, I landed a position at Canyon Partners, a credit-oriented hedge fund that primarily invested in directional credit strategies. I had turned down multiple hedge fund offers from shops like Citadel and HBK because I wanted to get back to California after five years on the East Coast, and Canyon’s founders, Josh Friedman and Mitch Julis, were highly respected financiers from Drexel.

From a strategy and skillset standpoint, I felt like a fish out of water at Canyon initially, because my previous experience at J. Aron had been more trading and arbitrage oriented. Now, I had to learn fundamental Credit and Capital Structure Analysis. Furthermore, I was the first MBA hire Canyon made, and there were several seasoned High Yield and Bank Debt analysts on the team already; I knew it would be difficult for me to stand out in those areas. I needed to carve out my own niche.

During business school, I had done an impactful internship at Harvard Management Company where I had been exposed to Relative Value strategies like Convertible Arbitrage and Merger Arbitrage. That internship helped me land job offers with Citadel and HBK as well as a startup named Rose Glen; the founders of all three firms cut their teeth in Convertible Arbitrage, so I figured there must have been something special about that asset class to produce so many successful hedge fund managers. I resolved to teach myself the craft and become the expert of that domain within Canyon.

With the J. Aron lessons about creating Franchise Value in mind, I wrote a white paper entitled "Alpha With Asymmetry" which outlined my vision for a business within a business at Canyon, which combined Convertible and Event Arbitrage into one sub-strategy.

I spent the next several years building out a team and a portfolio that would become the firm’s top profit center for multiple years. I was made a Partner in a standalone Canyon Capital Arbitrage Fund in 2000–2001. I had created Franchise Value for Canyon and was rewarded for it.

Eventually, I left Canyon in 2002 to start my own firm, Akanthos Capital Management, which focused on a similar hybrid multi-arbitrage model. I relished in the creative problem-solving aspect of taking disparate pieces of a company’s Capital Structure and crafting asymmetric trades out of the combinations. I saw opportunities for creating Alpha through complexity, and Akanthos became known for its uniquely creative trade expressions. I ran Akanthos for 17 years before retiring from active fund management in 2019.

Throughout this entire adventure, it was the original observation at J. Aron about creating Franchise Value that guided my thinking.

Axiom 5: Know your worth, and don’t be afraid to make it known when it matters.

I think sometimes there is a fine line between confidence and arrogance, but there is definitely a difference. Although it’s certainly possible for people to be “justifiably” arrogant because of extraordinary capability, in my opinion, no one likes a bombastic asshole. More often than not, the arrogant ones are imposters who are bluffing with more bluster than substance.

Confidence comes from knowing your worth and making it known—not from being an asshole, but from being unafraid to make justified requests.

At the tail end of the Goldman Sachs IT Training Program, the class of 60 trainees was given an aptitude test in coding ability. I ranked at the top of my class, and in my naïveté, I was initially disappointed with my assignment to J. Aron. I had all of three months of finance training, I had just read Liar’s Poker, and I thought based on my ranking that I deserved to go to a “sexier” department like Equities or Bonds. I knew very little about Currencies or Commodities.

I asked for a sit-down with the IT Partner, and she entertained my request. You might think this was borderline arrogant, but I was simply watching out for my interests and, knowing my worth, I respectfully asked for another assignment. She proceeded to explain that J. Aron was the most profitable division within Goldman at that time and that they had hand-picked me from the roster based on the test rankings. I decided to shut up and take the assignment.

Throughout my career, I would repeatedly demonstrate this principle and make respectful requests. Sometimes I got what I wanted, and sometimes I didn’t.

When I was interviewing at Canyon with cofounder Josh Friedman, I surprised him at the conclusion of the interview by asking him for references. Again, it was out of naïveté and not out of arrogance; I had a number of other offers in hand, and I wanted to make sure I made the right choice. Josh gave me not one but three references, and I called every single one. To this day, I joke with him that he probably hired me because of my chutzpah that day!

Years later, when my group delivered a blockbuster performance and I was negotiating my bonus, I made a request that was multiples of what I got. Again, it wasn’t out of arrogance but rather the mathematical reality of what I would have gotten if it were my own firm, with a healthy discount applied because it was not my firm. This time, I didn’t get quite what I requested. I understood their reasons, but I resolved to start my own firm someday where I would own all of the economics.

I would learn later, however, that economics aren’t everything and that there is always a give and take. I remain good friends with Josh and Mitch to this day, which brings me to my next rule…

Axiom 6: Always do the right thing, and never burn bridges.

Leaving Canyon on good terms was very important to me, because I learned very early on that it’s never wise to burn bridges—especially in an industry where reputation is everything. Furthermore, Josh and Mitch had been tremendous mentors to me and gave me the opportunity to run with my “Alpha With Asymmetry” business within a business in the first place.

When I resigned in the summer of 2002, I stayed on for an extended period to ensure a smooth transition and that my remaining team was well-equipped to take over. I did not poach anyone, and I did not steal clients. I think both Canyon as well as my new seed investors respected this decision.

My Negotiations professor from business school taught me years earlier that when you do the right thing, it shows you’re coming from a position of strength and confidence.

When I decided to leave J. Aron for business school, I had already made up my mind that I wanted to end up at a hedge fund. At J. Aron, I saw how the smartest money tended to be the hedge fund clients, and I respected how they lived and died purely on the merits of their ideas without the benefit of trading flow.

I underestimated how difficult it would be to break into the hedge fund business. Few of my classmates knew about hedge funds back then, and almost no hedge funds recruited on campus. I managed to get a copy of a hedge fund directory from one of my old J. Aron contacts, and I wrote to almost everyone in the directory, with non-responses being by far the most common outcome.

By the time most of my classmates had already landed job offers at the beginning of the second year, I still had no prospects. Imagine my excitement when I finally landed an offer from Citadel to do Convertible Arbitrage after meeting Ken Griffin and his then small team in the spring of 1997 (Citadel’s AUM at the time was only $500 mm). The catch? It was an exploding offer, and true to their option-savvy ways, they didn’t want to be “short a call” to me for more than two weeks.

My problem was twofold: 1. I hadn’t yet heard back from any of the other shops I had applied to, and 2. I desperately needed an offer in hand for leverage, because I really wanted to get back to the West Coast.

I went to Professor Shell with my predicament: Should I just accept the offer and potentially renege later? Or should I decline and risk having nothing at the end of the day? Graduation was only two months away, and all of my friends had accepted their offers months ago.

Professor Shell taught me about the hidden leverage in saying no to Citadel and in so doing, demonstrating to other firms that I not only knew my worth and had confidence in myself, but that I would be doing the stand-up thing with Citadel.

He turned out to be right. I declined Citadel’s offer, and by graduation, I had three more offers, including the Canyon offer which I accepted. Harlan Korenvaes of HBK in particular was impressed by my confidence, and he was the first one to give me the nickname “Kaoboy”—a nickname that has stuck to this day!

Axiom 7: Know when to stay in the game and when to get out.

Getting out at the wrong time can truncate your financial upside, but staying in too long can be even more expensive in other ways.

Up until this point, I’ve been telling you about career wins. Now I’m going to tell you about some of the toughest challenges I’ve faced in my career and how I navigated through them.

The Great Financial Crisis (GFC) of 2008-2009 was, without question, the most challenging period of my life, but my problems actually started two years earlier when the proverbial butterfly flapped its wings in one corner of the markets and would have far-reaching ramifications on my business.

In September 2006, a multi-strategy hedge fund called Amaranth Advisors, another firm that originally cut its teeth in Convertible Arbitrage, blew up from Natural Gas trading, losing over 65%.

Akanthos had just finished one of its best years in 2006, so you can imagine my surprise and frustration when my anchor investor (which made up almost 50% of my AUM at the time) submitted a full redemption request in early 2007. Unbeknownst to me, this $5B Fund of Funds (FoF) had significant exposure to Amaranth; worse, it had promised monthly liquidity to its investors but had been investing in quarterly and annual liquidity managers like Akanthos. This was a classic Asset/Liability Mismatch—the source of almost all financial blowups.

Because this FoF was not able to meet its redemption requests, it put the entire FoF into liquidation and gated its redemptions while submitting full redemption requests with all of its managers, including Akanthos.

I spent the next several months negotiating a staggered redemption schedule to give me time to replace their capital. At the same time, in June 2007, two Bear Stearns structured credit hedge funds blew up and began to roil the credit markets. I was vacationing with my family in Palau that summer and remember spending every night from 10 p.m. until 4 a.m. in the business center because of the volatility in the credit markets.

By the summer of 2008, as the first of my FoF staggered redemption payments was about to come due, one of my three prime brokers increased their margin rates. Because I ran a 3.5x levered Convertible and Capital Structure Arbitrage strategy (which actually was low compared to many of my comps who were running 5-8x levered), I was very sensitive to margin rates and promptly fired Prime Broker #1, preparing to transfer balances over to Prime Broker #2, who had been pressuring me for years for more market share.

The response shocked me—not only could they not take my balances, they told me I had to either transfer everything out or completely delever within the month.

By then, credit markets were falling apart, but I had significant portfolio tail hedges in place. I had a massive short position in Fannie Mae subordinated debt (which was underneath a mountain of Fannie Mae senior debt) as well as a substantial amount of CDX credit hedges. Thankfully, I also had a third prime broker that was willing to take some, but not all, of the displaced balances from the other two, who were clearly on the ropes.

In the first week of September, the US Treasury put Fannie Mae/Freddie Mac into conservatorship and arbitrarily guaranteed all of their debt while wiping out its preferred, rendering my tail hedge largely ineffective (even though I made money on a Fannie preferred capital structure arbitrage). If you’re interested, you can read in detail about the Fannie/Freddie saga.

Lehman Bros. filed for bankruptcy on September 15. Remember my CDX protection? Unfortunately, my main counterparty was Lehman—not only was most of my portfolio-level credit protection gone, even the cash collateral supporting the hedge was gone.

To top that off, my redeeming FoF investor decided to renege on the negotiated paydown schedule and put in for full redemption, which then prompted many of my other investors to submit protective redemptions.

I was staring into the abyss. I was facing 85% in redemptions, I had lost all of my credit protection, I was forced to gate and deleverage, and I was in the worst drawdown of my career.

A large number of my competitors went out of business during this period, especially the more levered ones. Ironically, some of the more levered (5-8x) pure-play Convertible Arbitrage funds, which theoretically hedged away all their credit risks, blew up first because the extreme stresses of the GFC created massive intra-capital structure basis risks that had nothing to do with fundamentals and everything to do with forced liquidations. Many firms that relied on a single prime broker received “the call,” as I did and were unceremoniously dropped as clients at a time when there was nowhere else to go. It was “every man for himself,” as the financial fabric of the system was unraveling amid spreading contagion and the risks of perception becoming reality due to haphazard and inconsistent policy responses.

I remember having a conversation with one of my beleaguered competitors during that time, as we watched competitor after competitor drop like flies. He asked me, “Do you have the heart of a warrior? Because folding now would mean leaving huge value on the table.” I decided to fight despite seemingly impossible odds.

I rallied my team and told them to ignore the mark-to-market, because I knew that we had extraordinary latent value in our portfolio. I put together a deck detailing my top 10 positions and started pounding the pavement aggressively for a strategic investor to buy out the large FoF that was threatening to topple my business.

We were turned down repeatedly, but eventually we found a mid-sized multi-family office that was highly contrarian and liked what we pitched. They had raised an opportunistic vehicle, and the opportunity set we presented fit perfectly. We introduced them to the redeeming FoF and told them they could negotiate their own discount to an already beaten-down NAV for Akanthos. I further sweetened the offer by granting them the high-water mark of the redeeming FoF (which is almost never done) to signal the high degree of confidence I had in the forward opportunity set. My only stipulation was that they had to lock up their capital for two years so that I could stop worrying about the stability of my AUM and focus on playing offense.

This was a game changer. Once I was able to stabilize my AUM, I was able to confidently buy distressed paper at unprecedented levels: General Motors unsecured bonds at 4c, General Growth Properties convertibles at 4c, Fannie/Freddie preferreds at 1–2c, and so on. I also convinced the rest of my investors to rescind their redemptions.

In 2009, Akanthos was up nearly 300% and was the top-ranked hedge fund in the world. We had not only survived nearly impossible odds, but we had absolutely crushed it. Over the next several years, I returned capital to my new multi-family office investor well ahead of their lockup expiration because I never wanted to be in that position again. I knew that our outsized performance would lead to inevitable portfolio rebalancing at lockup expiry, and I wanted to get ahead of it on my own terms. They ultimately became one of my longest-standing LP relationships, and I remain good friends with them to this day. In an ironic twist of fate, I am now an LP in several of their funds.

The GFC experience certainly taught me the importance of staying in the game during a crisis, and I would have left a considerable amount of money on the table had I capitulated. But the experience also took a significant emotional and spiritual toll. Unlike private equity or venture capital where capital is locked up, hedge fund liquidity mismatches and investor focus on short-term performance made it the ultimate “what have you done for me lately?” business.

When I started Akanthos, I was 100% focused on the economics of the business and chose not to take on partners. Having lived through the GFC, I came to understand that having the right partner or partners to help shoulder the stress would have been invaluable.

Although I had only been in business for seven years at that point, I had borne the pressure of investing OPM (Other People’s Money) for over 15 years at that point including my time at J. Aron and Canyon. I had lived and thrived through other crises like LTCM in 1998 and the Dot Com Bust in 2001, but everything paled in significance compared to the Perfect Storm I encountered during GFC. I felt as though I had aged ten years alone in 2008. I would end up running Akanthos for another ten years before shouldering the burden of managing OPM without partners became too tiresome for me emotionally and spiritually.

In my musings about oil over the years, I’ve often referred to the Trump Rug-Pull of Q4’2018 as a classic example of a geopolitical black swan risk that was fundamentally unhedgeable. The details are in the article so I won’t rehash them here, but suffice it to say that when one conducts exhaustive macro-level analysis and micro-level fundamental due diligence and still gets blindsided because of an unexpected policy reversal by Trump (sound familiar?), it made me question whether one can have any proprietary edge in this new regime.

That winter vacation, I had signed up for my first skydive—yes, that’s the type of thing I had to do to “relax” and divert my attention away from market volatility. We had just reached jump altitude, the plane door opened, and I was second in line to jump. The guy in front of me looked at me and asked if I was nervous. I stared at him blankly and said, “Huh?” All I could think about was the oil market and my P&L. That was the moment I realized that my amygdala had become so accustomed to being in “Fight or Flight” mode that I had become inured to even intense stimuli and could not even be present in the moment until I was in freefall out of an airplane! Something had to change.

This was a major wake-up call for me, and I realized that it was time to change my life. The hedge fund business had been good to me financially, but it had taken a serious toll on my emotional and spiritual well-being over the years. I was exhausted after 17 years of bearing the burden alone and almost 30 years of being responsible for OPM (Other People’s Money).

This is how I knew it was time to quit the hedge fund business and cast off the burden of managing OPM without partners. It was time to just focus on my family and my wellbeing.

I will always love the financial markets, but between managing my family office, blogging and talking about the markets on UrbanKaoboy.com, and now creating UrbanKaoberg.com, I still get to enjoy the creative problem-solving aspects of the markets without the stress that comes with managing OPM.

Axiom 8: Stay humble — it’s good advice for markets, and it’s good advice for life.

I am a huge fan of Greco-Roman history and mythology. You may have heard the story of Icarus:

Icarus and his father Daedalus were imprisoned in the Labyrinth on the island of Crete by King Minos. To escape the Minotaur, Daedalus fashioned two sets of wings made of feathers and held together with beeswax. He warned his headstrong son not to fly too low (for fear of seawater weighing down the wings) or too high (for fear of the sun melting the wax).

Carried away by the exhilaration of flight, Icarus ignored his father’s advice and flew too close to the sun. The wax melted, his wings fell apart, and he fell to his death. (Bonus points for anyone who can name the album and band below.)

Moral of the Story: Stay the middle course, and stay humble!

Having spent most of my career in financial markets, I would say that while this axiom may sound somewhat generic, it is one of the most important.

I like to think of Four “Meta” Knowledge Categories:

1. Things you know that you know

2. Things you know that you don’t know

3. Things you don’t know that you know

4. Things that you don’t know that you don’t know

Category 1 is what most of us rely on day to day. Category 2 can become Category 1 through targeted questioning and learning. Category 3 can be thought of as intuition developed through experience. Category 4, however, is a dangerous blind spot—and that is where hubris can cause real damage.

My examples of challenges in 2008 and 2018 both presented different versions of Category 4 blind spots; both highlight the importance of staying humble and respecting the fact that we sometimes don’t know what we don’t know.

Axiom 9: Have confidence in your ability to “connect the dots” after the fact.

If you haven’t watched Steve Jobs’ Stanford Commencement Address from 2005, it’s one of the most inspirational speeches I’ve ever heard, and I’ve probably watched it more than 20 times.

The part that resonates most with my own life experience is the idea of “connecting the dots”—trusting that seemingly random and unrelated events will eventually come together and form a cohesive whole.

There is no possible way I could have known that taking a coding job in Goldman’s IT department would lead to a trading role, which would lead me back to business school to study finance and complete an internship at Harvard Management, which would plant the seeds for starting a Convertible Arbitrage business within Canyon, which would lead me to start Akanthos and run the firm for 17 years and eventually retire as a private investor, which would bring me to starting my own Twitter/Substack persona as UrbanKaoboy (because I missed interacting daily with smart financial folks) and now developing UrbanKaoberg…

Who knows where the road leads next—but more importantly, who cares as long as you’re having fun?

That leads me to my final Axiom…

Axiom 10: ALWAYS HAVE FUN!

Introducing UrbanKaoberg.com:

“800+ commits. 55+ modules. 9 asset classes. 44 API endpoints. Almost 100K lines of code. All in less than a month by a person who hadn’t written code in 35 years.”

I built UrbanKaoberg.com in less than a month with AI. This piece is about my journey down one of the most frenetic, creative rabbit holes I have experienced and …

Read more

Given the huge amount of social media misinformation around CLO Equities and CLO Equity CEFs, I decided to distill a FAQ from the many daily private chat threads I write about this topic. I will use ECC as my primary example, since it is the company and management team I am most familiar with in the space.

In case you missed it, here is Part I:

Today’s pi…

Read more

Given the huge amount of social media misinformation around CLO Equities and CLO Equity CEFs, I decided to distill a FAQ from the many daily private chat threads I write about this topic. I will use ECC as my primary example, since it is the company and management team I am most familiar with in the space.

Disclaimer: This is a compilation of my publicly…

Read more

2/16/26: Episode 12 — Meredith Angwin

I first came across Meredith’s book Shorting The Grid: The Hidden Fragility of Our Electric Grid in 2022 when I was researching a policy paper on the topic of US National Power that I eventually co-presented at West Point in early 2023.

Meredith’s work elucidated for me a critical example of how the United States is “long on resources, but short on policies,” whereas our biggest Geopolitical rival China is “short on resources, but long on policies” — especially when it comes to the critical issue of Energy Security.

This conversation is extremely topical because:

If AI is potentially the Apex Predator of Capital Light industries, it is important to understand what fuels that Apex Predator — Electricity.

My hope is that this interview not only exposes some of the fragilities embedded in the current US Electric Grid, but hopefully also presents some ideas for solutions and hedges to America’s Energy Achilles' Heel.

Biography

Meredith Angwin is an energy analyst and the author of Shorting the Grid: The Hidden Fragility of our Electric Grid, published in 2020. She also has a Substack publication endearingly entitled “The Electric Grandma” that focuses on the reliability of the electric grid.

Meredith has studied and participated in grid over-sight and governance for the bulk of her career. For four years, she served on the Coordinating Committee for the Consumer Liaison Group associated with ISO-NE, her local grid operator. She teaches courses and presents workshops on the electric grid.

As a working chemist, Meredith Angwin headed projects that lowered pollution and increased reliability on the electric grid. Her work included pollution control for nitrogen oxides in gas-fired combustion turbines, and corrosion control in geothermal and nuclear systems. She is inventor on several patents. She was one of the first women to be a project manager at the Electric Power Research Institute where she led projects in renewable and nuclear energy.

Meredith has a Master’s Degree in Chemistry from the University of Chicago.

Where to find Meredith Angwin

Shorting The Grid at the Amazon Store: https://amzn.to/4qJ1P3V

X: https://x.com/MeredithAngwin

LinkedIn: https://www.linkedin.com/in/meredithangwin/

Substack: “The Electric Grandma”

The Electric Grandma

Meredith Angwin's Substack. In favor of reliable electricity for all.

By Meredith Angwin

Show Notes

As usual, I am sharing my outline for this conversation. It contains some questions for follow-up research that we did not have time to cover in our conversation.

Interview Agenda for KAOS THEORY 12: Meredith Angwin

Topic: Grid Fragility & Energy Security

• Intro / Bio

• Opening Premise: I’ve observed in a past lecture I gave on Energy Security that the “US is long on resources / short on policies” whereas China is short on resources but long on policies.”

• Brief History of Utility Deregulation

  • Compared with Telecom and Airline Deregulation

    • Q: How did Utility Deregulation result in higher consumer prices?

  • Brief explanation of the before and after of Utility Deregulation

    • Q: Can you explain how RTOs work and where grids are worse off?

• Sources of Grid Fragility in the US

  • Meredith’s “Failed Trifecta”:

    • Dependence on Renewables

      • Intermittent Renewables (wind/solar) don’t provide “firm” power, which then relies on “just-in-time” Natural Gas peaker capacity

    • “Just In Time” Natural Gas Peaker Capacity

    • LNG Import Constraints

  • Differentiate between types of Grid Capacity:

    • Nameplate Capacity

      • Q: Why do policymakers keep confusing capacity with reliability?

      • Q: Is there any realistic scenario where intermittent sources form true baseload without massive overbuild?

    • Peaker Capacity

      • Q :How is Natural Gas Peaker Capacity different from Natural Gas Baseload Capacity?

    • Baseload Capacity

      • Viable Baseload Sources

        • Coal

        • Nuclear

        • Geothermal

        • Natural Gas (CCGTs - Combined Cycle Gas Turbines)

          • Q: Explain CCGTs and why Natural Gas Baseload via CCGTs can overcome the JIT liabilities of Natural Gas Peaker Capacity?

• US Energy Achilles’ Heel Trifecta (“Premature Electrification” + AI Data Center Buildout + LNG Export Demand)

  • Context: US electricity demand was flat for 15 years, but this trifecta is converging at the same time

  • Natural Gas Paradox: Meredith, you highlight the fragility of “just-in-time” gas. I see AI Data Centers as “high load factor” users who want 100% power, 24/7. Coal and nuclear store fuel on site, but Natural Gas is “Just In Time” and depends on pipelines, compressors, electric power to move gas, yet it also seems to be the lowest hanging fruit for Baseload

    • Q: Given the decommissioning of Coal and the persistent NIMBYism/time-to-market and cost disadvantages of Nuclear, do “all roads lead to Natural Gas”?

    • Q: Do you see any other bridge solution that can compete with Natural Gas in terms of cost and time-to-market advantages?

  • Transmission Bottlenecks: JPM data shows long-distance transmission projects take 15-20 years and have been declining for 40 years

    • Q: Does “behind-the-meter” colocation solve really anything given the bypass of transmission bottlenecks without the bypass of generation bottlenecks, or are we headed to inevitable Electricity Inflation?

• Concluding Questions

  • Q: How did we go from “Resource Advantages” to “Policy Disadvantages”?

    • We’re chasing carbon reduction but ignoring Grid Resilience and basic physics.

  • Q: What are we getting right? Are there any case studies of successful Energy Grids in America?

    • Where they are keeping adequate Base Load

  • Q: If you were the “Grid Czar” in a Trump 2.0 administration, how would design the “Perfect Grid?

  • Q: How do you deal with the US Energy Achilles’ Heel Trifecta and solve for real-world constraints of ESG/costs/time-to-market/NIMBYism at the same time?

Further Reading

The topic of Energy Security and Policy is near and dear to my heart, and I have written at length about it. Here are some of my past writings you might be interested in:

Recent pieces in 2026:

Guest lecture on the Geopolitics of Energy (US vs. China comparisons):

Compendium of Climate Change / ESG pieces:

Compendium of Oil Macro pieces:

“Guy Adami interviews Michael Kao (@UrbanKaoboy), discussing the historic moves in gold and silver, the debate over fiat debasement versus speculative positioning, and why charts showing central bank gold eclipsing Treasury holdings can be misleading because much of the c…

Read more

Glad to be back with Max Wiethe on Monetary Matters to discuss my recent piece about the US Energy Achilles’ Heel and the shift in hydrocarbon dependency from oil to natural gas.

As always, please see my Show Notes thread that follows.

Read more

A confluence of factors, led by ESG mandates of the last decade, has created an Energy Achilles’ Heel for America, and the AI race may end up being one of the key arrows in that Heel.

Achilles, the mythical Greek hero of the Trojan War, was the son of Peleus, a mortal king, and Thetis, a sea nymph. To give Achilles invulnerability, Thetis dipped the infa…

Read more

This fall, I traveled for four weeks, bookended by a Socratic seminar at Oxford in mid-September and an adventure retreat in Iceland in mid-October. I deci…

Read more

12/6/25: Episode 11 — Barry Strauss, Redux

Studying ancient history can really give us long-term perspectives to help us overcome recency bias in modern geopolitics.

Barry Strauss, best-selling author of many books on ancient history as well as Senior Fellow at Hoover and Professor Emeritus at Cornell, returns to KAOS THEORY for a sweeping conversation that bridges ancient history and modern geopolitics.

Drawing on his new book, Jews vs Rome, Barry explores how Israel’s struggle to survive between rival powers mirrors ancient Judea’s perilous position between Rome and Parthia, and why geography, alliances, and internal cohesion have always mattered as much as military strength.

From the deep historical ties between Jews and Iranians to the internal divisions that have repeatedly proven as destructive as any external enemy, the discussion uses the past as a lens through which to understand today’s Middle East, America’s shifting role, and the timeless challenge of leadership in moments of civilizational stress.

Barry is a Corliss Page Dean Senior Fellow at the Hoover Institution as well as the Bryce and Edith M. Bowmar Professor in Humanistic Studies Emeritus at Cornell University. He is a recognized authority on the subject of leadership and the lessons that can be learned from the experiences of the greatest political and military leaders of the ancient world (Caesar, Hannibal, Alexander, among many others). These lessons apply to business and government leaders of today who are faced with complex issues that are both challenging and often defy easy solutions.

In addition to writing ten books, Strauss has spoken at the Hoover Institution, the Center for European Policy Analysis and many universities, institutes and war colleges here and abroad as well as for AXA Investment Managers and Cornell Executive Business Education. His articles have appeared in the Wall Street Journal, the Washington Post and the L.A. Times. Most recently, Strauss has been interviewed on CNN’s Fareed Zakaria GPS, A&E, the History Channel, the BBC and PBS.

Where you can find Barry Strauss:

Website: https://barrystrauss.com/

Amazon Store: https://www.amazon.com/stores/Barry-Strauss/author/B0045ANWJM?ref=sr_ntt_srch_lnk_1&qid=1731250431&sr=8-1&isDramIntegrated=true&shoppingPortalEnabled=true

Facebook: https://www.facebook.com/barrystrauss.author

X: https://x.com/barrystrauss

LinkedIn: https://www.linkedin.com/in/barry-strauss-8848702/

Show Notes

Once again, I am sharing my outline for this conversation. It contains some interesting historical details that we did not get to cover in our conversation.

KAOS THEORY 11: Barry Strauss Redux – Ancient lessons that still shape the modern Middle East.

Interview Agenda:

1. Re-Intro/Motivation

• Studying ancient history to overcome RECENCY BIAS:

• Today’s focus

  • Examining the geopolitics between Israel and Iran through the lens of ancient history

  • Examining leadership styles from ancient history vs. now

2. What can we learn about Israel/Iran from Ancient Rome?

• Discuss recent article: “Israel vs. Empire”: https://www.thefreedomfrequency.org/p/israel-vs-empire

  • “Israel is a small land located between great powers. ‘Twas ever thus.”

    • Judea as a small power caught between imperial systems—Egypt, Persia, Rome.

    • How did Israel’s geography make it perpetually vulnerable yet also resilient?

  • “Israel needs to look east as well as west…The hatred that the Islamic Republic of Iran holds for Israel is a historical aberration.”

    • “History suggests that Israel and Iran are natural friends.”

    • Iran / Parthia

      • Ancient Iran during our period of examination:

        • Achaemenid Persia/Cyrus the Great

        • Parthian rule

        • Sasanian rule – Judea renamed Palestine by Romans

    • Netanyahu reading Jews vs. Rome

  • “The Talmud concluded that it wasn’t the Romans who destroyed Jerusalem. Rather, it was the “senseless hatred” of Jew vs. Jew.”

    • Comparison of Israel’s internal disunity with the internecine fighting during the The Great Revolt of 66-70 CE

    • Barry’s Freedom Frequency piece draws a haunting parallel between Jerusalem’s civil strife in 70 CE and Israel’s internal divisions before the October 7 attacks.

• New book: Jews vs. Rome:

  • Motivation: Why do wars fought two millennia ago—feel so urgently relevant in 2025, and what motivated you to retell these stories now?

  • Chronology:

    • 63 BCE: Roman Republic under Pompey conquers Judea and makes it a client state. Ironically, the Jews invited the Romans in to settle a dynastic dispute. They didn’t expect Pompey to reduce their territory, to demote their king to tetrarch (subordinate ruler), and to desecrate their holiest shrine.

      • Lingering resentment: The loss of independence led to a constant undercurrent of discontent and fueled messianic hopes and dissident movements.

      • Internal division: The Jewish population was often divided between those who sought to cooperate with Roman rule and those who were determined to rebel.

      • Judea eventually brings in Parthians, Rome re-conquers Judea as Parthian client state

    • 37 BCE: Herod the Great is installed as a client king of Judea during the time of Augustus’ ascension to role of Emperor

    • 3 Major Jewish Revolts

      • 66-70 CE: The Great Revolt

        • This is the most well-known conflict. It was sparked by religious clashes and political unrest and culminated in the Roman siege and destruction of Jerusalem and the Second Temple in 70 CE. The war ended with the Siege of Masada, where Jewish rebels chose mass suicide over surrender to the Romans and resulted in the destruction of Temple.

      • 116-118 CE: The Diaspora Revolt (aka Kitos War)

        • Rebellions during Trajan’s Parthian campaigns, and perhaps one of reasons why Trajan fails in Parthia. This uprising was ignited by heavy taxes across the Roman Empire and occurred in Jewish communities outside of Judea.

      • 132-146 CE: The Bar Kokhba Revolt

        • The final major Jewish rebellion against Roman rule, which was ultimately and brutally crushed. Occurred under Hadrian, and the guerrilla campaigns caused Hadrian to pull legions from Britain

  • Parallels to today?

    • Religious conflict: clash of worldviews between monotheistic Jewish beliefs and Roman polytheism/emperor worship? Barry thinks that people overdo this: “The Romans didn’t have a religious problem with the Jews: they had a political problem. Likewise, the Jews (or at least the Jewish rebels) had a political problem with Rome: they wanted to be independent. True, on both sides, but especially for the Jews, politics had a strong religious dimension, which complicated matters. But the Romans didn’t really care what god/s you worshipped as long as you were subordinate to Rome and as long as you included the emperor in your worship (which the Jews, in fact, did: they sacrificed on behalf of the emperor in the Temple).”

    • Geopolitical struggle: The revolts were influenced by the larger geopolitical struggles between Rome and the Parthian Empire.

    • Internal strife: internal conflicts, divisions, and complex figures within the Jewish population, such as the Jewish commander turned Roman historian, Josephus, and the Jewish princess Berenice

      • Similar to some of the sectarian strife amongst its Arab neighbors of today, as explored in KAOS THEORY 10:

      • In both ancient and modern Israel, internal conflict has preceded catastrophe. Can Israeli democracy sustain its vitality without collapsing into factionalism? Barry: “It’s not just a question for Israeli democracy but for American democracy as well. Here too factionalism, which we tend to call polarization, is rife.”

    • Do today’s citizens have “skin in the game” like ancient citizens?

      • Barry: “For all its flaws, Israel is a society whose citizens – at least its Jewish citizens – know what they’re all about. And, when push comes to shove, they put their lives on the line for their country. Can we say the same of Americans? This brings up my two “Hobby Horses”:

        • Hobby Horse 1: Conscription. “Or, if you prefer, national service – gives people a sense of purpose.”

        • Hobby Horse 2: Education. “A healthy society teaches its young people history, and it paints a mostly positive picture of its country’s history and current status. It’s dangerous and self-destructive to offer young people a negative view of their country.”

3. What can we learn about leadership styles from ancient history?

• Recent article: “To Understand Trump, Look to the Roman Empire”: https://time.com/7327223/understand-trump-roman-empire/

  • Trump’s leadership approach in ME is “very Roman”:

    • Emphasis on personal relationships

      • Unconventional choices in Witkoff and Kushner

      • Is Trump’s reliance on family emissaries (Kushner, Witkoff) and direct relationships an echo of the Roman system of “friendship” between rulers?

  • Use of Carrots vs. Sticks

    • “Romans were masters at using rewards and punishments to manage foreign states…”

  • Pax Romana vs. Pax Americana comparisons

    • Romans leaned on its legions in the end

    • Trump differs from Romans in leaning on “allies to do hardest jobs while keeping Americans out of harm’s way.”

    • Rome’s peace was built on dominance and deterrence. Is America’s “peace through strength” the same?

      • “Yes, but I would add that both Rome and America offered/offer positive things as well.”

      • “Also, although America has done some brutal things (e.g., Hiroshima), it is less brutal than Rome.”

  • Alignment of Interests

    • “Nations don’t have friends, they have interests.”

    • How does Trump try to align the incentives of the ME with those of America?

    • Can the Gaza Peace Accord endure, and what are the implications for the Abraham Accords?

• Broader lessons of Leadership from ancient history?

  • Book: Masters of Command

    • Leadership lessons from 3 great generals of ancient history:

      • Alexander the Great

      • Hannibal

      • Julius Caesar

    • 10 qualities of successful commanders

      • Ambition

      • Judgment

      • Leadership

      • Audacity

      • Agility

      • Infrastructure

      • Strategy

      • Terror

      • Branding

      • Divine Providence.

    • How would you grade the current Administration on this list?

    ---

    If you enjoyed this episode, please make sure you check out:

I am pleased to be a first-time guest on the Debt Serious Podcast to talk about Private Credit and CLOs. We delved into the recent misplaced fearmongering on CLOs and why it spells opportunity.

Disclaimer: This interview talks about some Idiosyncratic positions that I currently hold and actively trade. I use the examples to illustrate my broader points a…

Read more

The Punic Wars between Rome and Carthage spanned almost the entire Mediterranean, engulfing Italy, Sicily, Spain and North Africa. This piece covers my Ruin Hunts in Sicily and Tunisia.

Read more

I find that re-reading them periodically helps my own process, so I have collated them here. Please feel free to bookmark this link and check back every once in a while fo…

Read more

I’ve loved studying antiquity since high school, when an extremely inspirational teacher named Mr. Litchfield conveyed a love of classics and art history that has stuck with me my entire life — especially during my travels.

This is the first of several retrospectives on my various Ruin Hunts around the world over the years. This edition covers my first …

Read more

When I was a younger, I was an avid collector of all kinds of things. Now that I’m older and (hopefully) wiser, I realize that those things just provided fleeting joy and excitement during the moment of acquisition.

Memories and experiences are what I enjoy “collecting” most now, because they provide lasting joy and compounded learning. As Steve Jobs on…

Read more

I am pleased to rejoin Maggie in the debut episode of "For The Record" on her new “The Market House” Substack. We discuss the potential for Macro & Geopolitical Regime Change under Trump 2.0.

Although a lot has happened since we recorded on 9/3/25, our big picture discussion involves longer-term Macro/Geopolitical ramifications of the Trump 2.0 Playbook.

Read more

I am pleased to rejoin Tom Bodravics on Palisades Gold Radio to explain and evaluate the Trump 2.0 Playbook. Tom has been persistent in asking me to come on the show for several months, and I thank him for his persistence!

As always, please see below for a detailed Show Notes thread that roughly follows the flow of our conversation and contains informat…

Read more

8/8/25: Episode 10 — Kim Ghattas

We are excited to welcome Kim Ghattas, Emmy Award winning Middle East expert and author of Black Wave: Saudi Arabia, Iran, and the Forty-Year Rivalry that Unraveled Culture, Religion, and Collective Memory in the Middle East.

Kim hails from Lebanon and brings not only a global, geopolitical perspective but also a personal perspective to her treatment of the incredibly nuanced power politics, incentives, and underlying root causes of conflict in the Middle East.

In this fascinating hour, we delve into the myriad sources of geopolitical fracture in the region: secularism vs. fundamentalism, establishment monarchy vs. revolutionary forces, Sunni vs. Shia.

Speaking from the outskirts of Beirut, Kim examines how three seemingly unrelated events in 1979—the Iranian Revolution, the siege of Mecca’s Holy Mosque, and the Soviet invasion of Afghanistan—triggered a cultural and political upheaval that set Saudi Arabia and Iran on a path from cooperation to bitter rivalry. We delve into why 1979 was a pivotal year for the region and drill down to the downstream impacts on multiple countries in the region.

Kim traces how Iran consolidated power under Ayatollah Khomeini, built proxy networks across the region, and how Saudi Arabia, learning from the Shah’s fall, deepened its alliance with religious clerics—fueling Sunni movements with often unpredictable consequences.

The conversation also looks ahead, as Kim argues the Middle East is shifting from religious fundamentalism toward populism and nationalism, and previews her upcoming work exploring Iran’s troubled history with the US, Iran’s nuclear program and unexpected episodes of covert cooperation, including Israeli arms sales to Tehran in the 1980s.

Where you can find Kim Ghattas

X: https://x.com/KimGhattas

LinkedIn: https://www.linkedin.com/in/kimghattas/

Black Wave on Amazon: https://a.co/d/h6LG6Kz

Show Notes

We didn’t get to cover all of the topics here, but I include my preparation notes here to provide a rough guide to the structure of our conversation on a very complex topic:

KAOS THEORY 10: Kim Ghattas Detailed Interview Agenda

I. INTRODUCTION & FRAMING

Kim Ghattas Bio (Full Text from Your Notes):

Emmy Award-winning Middle East expert, author and journalist with 20+ years of experience covering the Middle East, international affairs, and U.S. foreign policy. Contributing writer for The Atlantic and contributing editor at the Financial Times. Regular commentator on CNN, NPR, MSNBC, and others.
Leveraging firsthand knowledge of the Arab world and ongoing access to key decision-makers in the region and the US, I provide incisive analysis of global events and geopolitical trends are highly sought after by policymakers, institutions and investors. My experience establishing BBC operations in Beirut, running a family company and serving on a variety of boards, add unique expertise in management, crisis advisory and contingency planning.
Author of the New York Times bestseller The Secretary (2013) and Black Wave (2020), a New York Times Top 100 Notable Book. My upcoming book explores the U.S.-Iran enmity over four decades.
I serve on the boards of the American University of Beirut, the Center for Global Pluralism and advisory board of the Atlas for Impunity. Former chair of the board for the Arab Reporters for Investigative Journalism network.
Distinguished Inaugural Carnegie Fellow at Columbia University's Institute for Global Policy (2023-2024), non-resident Senior Fellow at the Carnegie Endowment for International Peace (2017–2022), Public Policy Fellow at the Woodrow Wilson Center (2017), and a Civitella Ranieri Fellow (2019).

Framing:

• Soundbite Q: “Your book asks the haunting question: ‘What happened to us?’ After writing Black Wave, what’s your answer?”

II. THE 1979 CATALYST

• Soundbite Q: “You identify 1979 as the turning point—why that year?”

• Context to cover:

  • Iran: Islamic Revolution, overthrow of monarchy → Shia resurgence, revolutionary export.

  • Saudi Arabia: Wahhabi assertiveness, oil-funded global propagation.

  • Mecca Siege: Juhayman revolt, internal religious recalibration.

• Follow-up Qs:

  • “What changed in the Saudi-Iran rivalry post-1979?”

  • “Could this ideological war have been avoided?”

III. COUNTRY DEEP DIVE

1. Saudi Arabia

• Role as Sunni custodian, Wahhabi export via petrodollars.

• Historical points:

  • 1979 Mecca siege.

  • 1987 Hajj protests (Iranian pilgrims killed).

  • Oil weaponization: 1986 price crash to hurt Iran.

  • Saddam’s Kuwait invasion → Saudis call U.S. troops (1990) → Bin Laden radicalization.

  • Al-Qaeda spiral: 1995 bombing → 9/11 (15 Saudis) → 2003 Riyadh attacks.

• Soundbite Q: “How did the House of Saud reconcile modernization with Wahhabi orthodoxy—was it a deal with the devil?”

• Probe: MbS—bold break or continuity?

2. Iran

• Khomeini’s wilayat al-faqih vs. traditional Shi’a clerics (al-Khoei).

• Revolutionary Guards exporting revolution: Hezbollah, Iraqi militias.

• Key timeline:

  • Hostage crisis → Iran-Iraq war → U.S. downs flight 655 (1988).

  • 1989 Khamenei succession → détente after Iraq invades Kuwait.

• Soundbite Q: “Why has Iran become the architect of transnational militancy?”

• Follow-up: Clerical legitimacy under stress—Mossad infiltration, protests.

3. Lebanon

• Proxy battlefield: Civil war, rise of Hezbollah.

• Triggers: Israeli 1982 invasion, 1983 U.S. embassy bombing.

• Soundbite Q: “You call Lebanon a bellwether—why does its story matter so much?”

4. Egypt

• Nasser’s secular nationalism → Sadat’s pivot → assassination.

• Intellectual terrorism: Farag Foda killing in 1990s.

• Questions:

  • “Why didn’t fundamentalism consolidate after Sadat?”

  • “What explains Egypt’s oscillation between Islamism and secularism?”

5. Iraq

• Saddam’s Sunni Ba’athism → 2003 invasion → Shia ascendancy → Iran’s dominance.

• Zarqawi engineers Sunni-Shia civil war → ISIS emerges.

• Soundbite Q: “Did the Iraq War turn Iran into the Middle East’s hegemon?”

• Follow-up: “What lesson did the U.S. fail to learn?”

6. Syria

• Assad’s survival amid civil war: Iran + Hezbollah + Russia vs. Gulf + West.

• Soundbite Q: “How did Assad outlast overwhelming odds—and what does Syria’s future look like?”

7. Pakistan & Afghanistan

• Zia’s Islamization (1977), 1986 blasphemy laws; rise of Taliban/al-Qaeda.

• Afghan jihad → global jihad pipeline; Peshawar as Islamist hub.

• Soundbite Q: “Why did Pakistan become ground zero for jihadist movements?”

IV. CROSS-CUTTING THEMES

• Soundbite Q: “Is sectarianism a real driver—or just a smokescreen for deeper political and economic struggles?”

• Secularism vs. fundamentalism: Who’s winning?

• Role of external powers (US, Israel, Gulf).

• Women & the veil as ideological battleground.

V. CLOSING

• Soundbite Q: “What divides are reconcilable—and which ones run too deep?”

• Prospects for peace: Abraham Accords, regional realignments.

• Soundbite Q: “If you could give the next U.S. president one piece of advice on the Middle East, what would it be?”

• Wrap with a hopeful note: “After tracing this black wave, do you see light on the horizon?”

• Sneak peek at Kim’s next book on U.S.–Iran.

Back in March, I wrote a detailed missive about how I saw the Trump 2.0 Policy Playbook shaping up:

To revisit the Star Wars analogy:

Trump 2.0 is piloting the Millennium Falcon (the US Economy and Credibility) through an Asteroid Field of difficult policy choices.

Read more