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Karen Gibson: latest market views
Academy Securities
Summary
Karen Gibson is a retired U.S. Army lieutenant general and former U.S. Senate Sergeant at Arms who is now a member of the advisory board and Geopolitical Intelligence Group at Academy Securities.
Chorus has 7 views from Karen Gibson across 2 episodes on Bloomberg Surveillance since October 14, 2026.
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Iran believes it can outlast the US in a contest of political endurance, not military power.
Gibson argues the US holds big military advantages, so the conflict is less a contest of military power than of wills and political endurance. The administration will be a lame duck with about two years left after the election. She thinks Iran believes that without a truly concerted military operation, it can sustain the conflict and outlast the US.
“this is less a contest between military powers where we have tremendous advantages and strengths, and it's more a contest of wills and political endurance.”at 13:56
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
US-Iran positions remain incompatible, so diplomacy will at most nibble at the edges.
Gibson notes that Saudi Arabia has joined Qatar, Pakistan and Turkey as mediators, which matters because the Saudis cannot afford to absorb Iranian missile barrages while already facing Houthi strikes. But she sees the core positions as still incompatible, so talks are unlikely to produce more than marginal progress.
“I think the positions are still incompatible, and I think they're unlikely to do more than anything but nibble around the edges if that.”at 16:41
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
Houthis' cheap drones and missiles give them an asymmetric edge, and Saudi Arabia will keep bearing high defense costs.
Gibson says the Houthis control terrain along the Red Sea that they have held for over a decade, making them hard to dislodge. They can interject Saudi shipping and have large asymmetric advantages because their drones and missiles are cheap and easy to produce. The Saudis spend billions to intercept them and must succeed every time, while the Houthis only need to get through occasionally. Even successful defense carries real economic impact by scaring people away.
“The Houthis, that's a really tough nut to crack. It's gonna be difficult to dislodge them from the terrain that they control... they have tremendous asymmetric advantages.”at 18:51
Bloomberg Surveillance: Bloomberg Surveillance TV: October 27th, 2026 ·
US is likely reluctant to strike Houthis; another front strains resources and airstrikes may not suffice.
Opening another front would draw on resources, though a third carrier strike group is heading to the region. Airstrikes alone may not be enough to make the Houthis change their attacks or methods against Saudi Arabia. Because the Houthis are only targeting Saudi-related vessels in the Bab el-Mandeb, there is also reluctance to get involved, since US involvement could expand their targeting to vessels linked to the US.
“there are some reasons that I would understand that the administration might be reluctant to do that. One, opening another front on this theater would be a draw on resources... Two... whether airstrikes alone would be enough to compel the Houthis to change their attacks”at 11:47
Bloomberg Surveillance: Bloomberg Surveillance TV: October 14th, 2026 ·
High-end air defense like Patriot and THAAD isn't enough; layered systems with cheaper counter-drone tech are needed.
Saudi Arabia faces threats from three directions across a large territory with scattered critical infrastructure. The Houthis are using the Russia-Ukraine playbook of overwhelming defenses with cruise missiles and drones together. Spending on Patriot, THAAD and fighter aircraft is important but has not proved sufficient. The region needs a more layered air defense that includes cheaper counter-drone technologies, since high-end materiel alone is not holding.
“The money that's spent on Patriot missiles or theater high altitude air defense, the THAAD systems, and the joint strike fighters, that's important, but it's not proved enough... They really need, as does the entire Middle East, a more layered air defense system that also can... Comprised of some cheaper counter drone technologies”at 14:41
Bloomberg Surveillance: Bloomberg Surveillance TV: October 14th, 2026 ·
Diplomatic talks with Iran haven't moved the needle on major concessions; hard to gauge.
Diplomacy happens in backrooms and lacks the observable signals of ships transiting or missiles being launched, so she has little insight into it. She is not sure the talks have changed Iran's willingness to make the significant concessions the US seeks. The market's apparent numbness to the talks may reflect that.
“But the diplomatic talks, you know, I'm not sure that we've budged the needle on Iran's willingness to make significant concessions or certainly the ones that we seek.”at 15:28
Bloomberg Surveillance: Bloomberg Surveillance TV: October 14th, 2026 ·
Iran's leverage over the Strait of Hormuz has lessened; shipping is near prewar volumes.
Iran's leverage over the strait has eased because oil can still get out through dark transits, military escorts, overland routes and alternate paths. Shipping out of the area is, as she understands it, close to prewar volumes. That is part of why the market has responded to the strait less, even as the diplomatic picture is unclear.
“I do think that the strait itself, its leverage has lessened somewhat on the Iranian side because of the ability to get oil out, whether that's, you know, dark transits, military escorts, overland, or through these alternate routes... we are, in fact, as I understand, shipping close to prewar volumes out of the area.”at 15:40
Bloomberg Surveillance: Bloomberg Surveillance TV: October 14th, 2026 ·
Shows
- Bloomberg Surveillance · 2 episodes
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