The Houthis threatened to hit Saudi oil after the Saudis threatened their oil. We only have desalination plants left to threaten before we hit the top rung of the regional escalation ladder… and the risks are of a societal snake down to Mad Max style nightmares. The larger question is how this ends. Do the Saudis surrender to the Houthis - and have to yield what to them and Iran? Do Pakistan and Turkey defend Saudi, as they both busily —and S L O W L Y— complete the paperwork on their ‘Mecca Defence Pact’? Does the U.S. step in - and pre or post-midterms? Does Israel, the suggestion being only after its late October election, and only if Bibi loses (as he’s willing but not welcome)? In short, this could go on for weeks. It could damage Saudi far, far more. And far, far more violence will be needed to end this crisis even if it can be ended. Many other countries could be pulled into this mess. Higher for longer is the risk for energy prices, at least for physical, and bond yields…. and then global political and social stress. And there’s not a thing a central bank can do about it (save help fund a government to fight the Houthis like in the old days?)