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Bigworld, Concerning that repo market news (previous post), the Fed will soon be easing back on the current QT policy, with the monthly QT being reduced from $60 bil to 30 bil (see below). So even if there are no % cuts until later in the year, the reduction of QT provides some added liquidity to the system.
But since the longer term Treasury auctions have not been going well, they are reportedly "shifting to financing America’s deficit mostly with short-term debt". Not being able to sell longer term bonds does sound ominous. With my own Treasury bond allocation, I only went out 2.5 years (to Dec 2026), in part because the US debt monster is growing so fast, and might conceivably reach 40 trillion by late 2026. Fwiw, I figure that is the debt level (40 trillion) where the growing debt bomb could really become a problem, so my tentative strategy is to have the bond allocation much reduced by 2027. I figure the major problems start as the US debt moves from 40 ---> 50 trillion. But what to use instead of bonds? Hard assets, real estate, commodities would be the logical place, as you have already done.
>>> “We’ve been losing liquidity as people and companies pull out money to pay taxes,” said Thomas Tzitzouris, head of fixed-income research at Strategas. “We’re in a bit of an air pocket that’s letting the bond market float more freely and yields rise.”
One line of support is likely to come from the Fed. Minutes from the Fed’s March meeting, released last week, showed that policymakers are looking to slow the pace of running down the central bank’s large holdings of bonds accumulated to prop up the economy. They would likely reduce the rate at which they let Treasurys mature to $30 billion a month, half of the current $60 billion pace.
Balance-sheet runoff, known as quantitative tightening, is meant to drain the banking system of reserves and increase the market’s share of the sovereign-debt pile. With the Fed paring back that program, and prepping to stop it sometime in the future, investors will have to absorb a smaller net share of Treasury securities. That could support bond prices and remove some upward pressure on yields. <<<
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174235707
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>>> Fed's reverse repo facility plummets to lowest level in nearly three years
Reuters
Apr 15, 2024
By Michael S. Derby
https://finance.yahoo.com/news/feds-reverse-repo-facility-shrinks-174128320.html
NEW YORK (Reuters) - A key Federal Reserve facility that takes in cash from money market funds and others saw inflows drop sharply on Monday.
The U.S. central bank's reverse repo facility took in $327.1 billion, down $80.2 billion from Friday, marking the lowest level of inflows since the facility took in $293 billion on May 19, 2021.
The Fed's reverse repo facility exists to put a floor underneath short-term rates, taking in cash from eligible firms in loans collateralized with Treasuries held by the central bank. Inflows have been contracting for some time as the Fed withdraws liquidity from the financial system by allowing its holdings of bonds to shrink.
Monday is the deadline for most U.S. tax returns and a key settlement date for Treasury debt auctions, which can influence activity at the reverse repo facility. Scott Skyrm, executive vice president at money market trading firm Curvature Securities, says money is coming out of reverse repos to deal with financing the Treasury's debt issuance.
<<<
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>>> Fed's reverse repo facility plummets to lowest level in nearly three years
Reuters
Apr 15, 2024
By Michael S. Derby
https://finance.yahoo.com/news/feds-reverse-repo-facility-shrinks-174128320.html
NEW YORK (Reuters) - A key Federal Reserve facility that takes in cash from money market funds and others saw inflows drop sharply on Monday.
The U.S. central bank's reverse repo facility took in $327.1 billion, down $80.2 billion from Friday, marking the lowest level of inflows since the facility took in $293 billion on May 19, 2021.
The Fed's reverse repo facility exists to put a floor underneath short-term rates, taking in cash from eligible firms in loans collateralized with Treasuries held by the central bank. Inflows have been contracting for some time as the Fed withdraws liquidity from the financial system by allowing its holdings of bonds to shrink.
Monday is the deadline for most U.S. tax returns and a key settlement date for Treasury debt auctions, which can influence activity at the reverse repo facility. Scott Skyrm, executive vice president at money market trading firm Curvature Securities, says money is coming out of reverse repos to deal with financing the Treasury's debt issuance.
<<<
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>>> Attacks on Zaporizhzhia nuclear plant significantly increase accident risk, IAEA head says
Associated Press
4-8-24
https://apnews.com/article/russia-ukraine-war-zaporizhzhia-nuclear-drone-a28710a691f3259b5dd6586787838b60
KYIV, Ukraine (AP) — The head of the U.N.’s atomic watchdog agency on Sunday condemned a drone strike on one of six nuclear reactors at the Russian-controlled Zaporizhzhia Nuclear Power Plant in Ukraine, saying such attacks “significantly increase the risk of a major nuclear accident.”
In a statement on the social media platform X, Rafael Mariano Grossi confirmed at least three direct hits against the ZNPP main reactor containment structures took place. “This cannot happen,” he said.
Russia blamed Ukraine for the attack, but the U.N.'s International Atomic Energy Agency didn’t attribute blame. Kyiv officials made no immediate comment.
He said it was the first such attack since November 2022, when he set out five basic principles to avoid a serious nuclear accident with radiological consequences.
Officials at the plant said the site was attacked Sunday by Ukrainian military drones, including a strike on the dome of the plant’s sixth power unit.
According to the plant authorities, there was no critical damage or casualties and radiation levels at the plant were normal after the strikes. Later on Sunday, however, Russian state-owned nuclear agency Rosatom said that three people were wounded in the “unprecedented series of drone attacks,” specifically when a drone hit an area close to the site’s canteen.
The International Atomic Energy Agency said Sunday that its experts had been informed of the drone strike and that “such detonation is consistent with IAEA observations.”
In a separate statement, the IAEA confirmed physical impact of drone attacks at the plant, including at one of its six reactors. One casualty was reported, it said.
“Damage at unit 6 has not compromised nuclear safety, but this is a serious incident with potential to undermine integrity of the reactor’s containment system” it added.
The power plant has been caught in the crossfire since Moscow sent troops into Ukraine in 2022 and seized the facility shortly after. The IAEA has repeatedly expressed alarm about the nuclear power plant, Europe’s largest, amid fears of a potential nuclear catastrophe. Both Ukraine and Russia have regularly accused the other of attacking the plant, which is still close to the front lines.
The plant’s six reactors have been shut down for months, but it still needs power and qualified staff to operate crucial cooling systems and other safety features.
Also on Sunday, three people were killed when their house was hit by a Russian projectile in the front-line town of Huliaipole in Ukraine’s partly occupied southeastern Zaporizhzhia region, regional Gov. Ivan Fedorov said. Later on Sunday, two people were wounded in another shelling of Huliaipole.
Separately, three people were wounded in Russian shelling in Ukraine’s northeast Kharkiv region, according to regional Gov. Oleh Syniehubov.
In Russia, a girl died and four other people were wounded when the debris of a downed Ukrainian drone fell on a car carrying a family of six people in Russia’s Belgorod region bordering Ukraine, regional Gov. Vyacheslav Gladkov said.
<<<
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ABC News - >>> US to Israel: If you strike back at Iran, you'll do it alone <<<
https://www.yahoo.com/news/us-israel-strike-back-iran-162024611.html
Finally some sanity prevails. Next, Biden & Co need to ditch their ultra risky Ukraine strategy. Unlike Iran, Russia has 6000 nuclear weapons, including hypersonic missiles, and everything is on a hair trigger. A week ago the lunatic Zelensky bombed the Zaporizhzhia nuclear powerplant (!) Enough of the madness -- > return to Kissinger's détente strategy before we bumble into WW 3 -
>>> Russia test-launches an intercontinental ballistic missile <<<
https://abcnews.go.com/International/wireStory/russia-test-launches-intercontinental-ballistic-missile-109172270
>>> Attacks on Zaporizhzhia nuclear plant significantly increase accident risk, IAEA head says <<<
https://apnews.com/article/russia-ukraine-war-zaporizhzhia-nuclear-drone-a28710a691f3259b5dd6586787838b60
---
ABC News - >>> US to Israel: If you strike back at Iran, you'll do it alone <<<
https://www.yahoo.com/news/us-israel-strike-back-iran-162024611.html
Finally some sanity prevails. Next, Biden & Co need to ditch their ultra risky Ukraine strategy. Unlike Iran, Russia has 6000 nuclear weapons, including hypersonic missiles, and everything is on a hair trigger. A week ago the lunatic Zelensky bombed the Zaporizhzhia nuclear powerplant (!) Enough of the madness -- > return to Kissinger's détente strategy before we bumble into WW 3 -
>>> Russia test-launches an intercontinental ballistic missile <<<
https://abcnews.go.com/International/wireStory/russia-test-launches-intercontinental-ballistic-missile-109172270
>>> Attacks on Zaporizhzhia nuclear plant significantly increase accident risk, IAEA head says <<<
https://apnews.com/article/russia-ukraine-war-zaporizhzhia-nuclear-drone-a28710a691f3259b5dd6586787838b60
---
Bigworld, Yes, the debt bomb is entering the later innings, but I figure the finance magicians can likely hold things together for a number of years. I figure the US debt hitting 40 trillion could be a key turning point, and then sometime prior to it reaching 50 trillion the debt / dollar crisis will arrive. But just a guess.
Fwiw, I used this morning's bounce to reduce the stock allocation a little more, down to 12.5%. So that should do it (hopefully). I sold off the liquid S+P 500 index portion, and kept the individual stocks and sector ETFs. 200 plus individual stocks are too cumbersome to sell, so the idea is to keep them (12.5%) as long term buy / hold. Anyway, that was the original plan, so I'll try to stick to it. I figure the cash proceeds will earn ~5% with no risk, and can be re-deployed later. Buying a 1X short ETF (SH) to hedge the remaining stock exposure is an option at some point, but I figure that earning 5% in cash is good enough. The permanent 12.5% in stocks will benefit as the stock market eventually recovers. Anyway, I figure it's best to have all bases covered, and never go to zero in any asset class.
Anyway, still a work in progress, but it turned out that 28% in stocks was clearly too high for an aging nervous nellie like me. Buffett and Bogle both said that the key is finding the right allocation you can live with (without insomnia or daily Tagamet). I thought the old rule of subtracting your age from 100 might work, but 31% in stocks is clearly too high on the 'Tagamet scale'.
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Ombow, Looks like LWLG is teetering again at key support (descending triangle formation). It fell through 4, but chart-wise the actual support level is ~ 3.90, and this is the fifth time it has tested this key support in the last six months (plus an additional four times earlier in 2023). So it could soon be 'bombs away' time, but we'll see if it can hold again, or if some news flow might arrive to give it a saving bounce. The descending triangle is a classic bearish chart formation -
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Bigworld, Amazingly the stock market futures are currently up, so go figure. Possibly Fed / PPT activity, as happened around Oct 7. But the market had already sold off considerably, so perhaps there's a relief rally before the market weakens again (?)
I figure 28% was too much to have in stocks anyway, so will roll with 15% for now. There are plenty of reasons to be wary -
1) Geopolitical / war risks
2) Fed delaying % rates cuts due to persistent inflation
3) Growing election angst
4) Stock market has already runup big since Oct, so no sense watching those gains evaporate
5) Black swan events
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Debt bomb - >>> America’s bonds are getting harder to sell
The Wall Street Journal
by Eric Wallerstein
Apr 14, 2024
https://finance.yahoo.com/news/america-bonds-getting-harder-sell-093000703.html
A series of weak auctions for U.S. Treasurys are stoking investors’ concerns that markets will struggle to absorb an incoming rush of government debt.
A selloff sparked by a hotter-than-expected inflation report intensified this past week after lackluster demand for a $39 billion sale of 10-year Treasurys. Investors also showed tepid interest in auctions for three-year and 30-year Treasurys.
Behind their caution lies a growing conviction that inflation isn’t fully tamed and that the Federal Reserve will leave interest rates at multidecade highs for months, if not years, to come. The 10-year yield—the benchmark for borrowing rates on everything from mortgages to corporate loans—finished the week around 4.5%, near its highest levels since touching 5% in October.
At the same time, the government is poised to sell another $386 billion or so of bonds in May—an onslaught that Wall Street expects to continue no matter who wins November’s presidential election. While few fear a failed auction—an unlikely scenario that analysts said could potentially trigger prolonged turmoil—some worry that a glut of Treasurys will rattle other parts of the markets, raise the cost of government borrowing and hurt the economy.
“There’s been a big shift in the market narrative. The CPI [consumer-price index] report changed everybody’s view of where Fed policy is headed,” said James St. Aubin, chief investment officer at Sierra Mutual Funds.
The government funds its operations by selling the world’s safest bonds to investors and dealers at regular auctions. And issuance of Treasurys has exploded since the pandemic began. In the first three months of 2024, the U.S. sold $7.2 trillion of debt, the largest quarterly total on record. That surpasses the second quarter of 2020, when the government was financing a wave of Covid-19 stimulus. It also builds on a record $23 trillion of Treasurys issued last year, which raised $2.4 trillion of cash, after accounting for maturing bonds.
The size of the sales has expanded along with the market for U.S. debt. After poor demand at a series of auctions late last year jarred investors, the Treasury Department eased concerns by shifting to financing America’s deficit mostly with short-term debt. That helped, in part, because the Fed simultaneously signaled a pivot to easier monetary policy: Hopes that interest-rate cuts would come soon helped reassure investors about the Treasury’s strategy.
Now, those hopes are dwindling, and the Treasury is expected to announce its third-quarter borrowing plans at the end of April. The nonpartisan Congressional Budget Office forecasts that the deficit will increase from 5.6% of U.S. gross domestic product to 6.1% in the next decade. Debt held by the public is set to expand from $28 trillion to $48 trillion in that time, up from $13 trillion 10 years ago.
Wall Street doesn’t expect the Treasury to raise auction sizes of longer-term notes and bonds until next year. But the government must also contend with refinancing a chunk of its bonds. A record $8.9 trillion of Treasurys, roughly a third of outstanding U.S. debt, is set to mature just in 2024, according to Apollo Global Management’s chief economist, Torsten Slok.
Investors are also watching how revenues from tax season boost America’s coffers in the coming weeks.
“We’ve been losing liquidity as people and companies pull out money to pay taxes,” said Thomas Tzitzouris, head of fixed-income research at Strategas. “We’re in a bit of an air pocket that’s letting the bond market float more freely and yields rise.”
One line of support is likely to come from the Fed. Minutes from the Fed’s March meeting, released last week, showed that policymakers are looking to slow the pace of running down the central bank’s large holdings of bonds accumulated to prop up the economy. They would likely reduce the rate at which they let Treasurys mature to $30 billion a month, half of the current $60 billion pace.
Balance-sheet runoff, known as quantitative tightening, is meant to drain the banking system of reserves and increase the market’s share of the sovereign-debt pile. With the Fed paring back that program, and prepping to stop it sometime in the future, investors will have to absorb a smaller net share of Treasury securities. That could support bond prices and remove some upward pressure on yields.
Another factor supporting Treasuries: Global investors have a lot of savings and few viable options to place them. The eurozone and Japan both run current-account surpluses, meaning they take in more money from trade than they spend on imports. Treasurys provide them a safe place to stash their cash and pick up more than 4% of yield. They also offer an easy way to invest dollar-denominated income from trading with America.
The euro and yen are both sinking relative to the dollar, in part because the Bank of Japan is still holding rates low and investors expect the European Central Bank to slash them soon. That could increase demand for U.S. debt, with Treasury yields remaining elevated relative to global alternatives.
That leaves many investors hopeful that as long as inflation continues to trend toward the Fed’s 2% target, Treasury yields will remain under 5%. But some worry the influx of new Treasurys will exacerbate already-volatile markets, particularly if inflation stays sticky. After the CPI report and weak auction Wednesday, the 10-year yield posted its biggest one-day rise since 2022, jumping nearly 0.20 percentage point.
“If we continue to see hot inflation prints, it’s going to keep a lot of people on the sidelines,” said Sierra’s St. Aubin.
<<<
---
>>> America’s bonds are getting harder to sell
The Wall Street Journal
by Eric Wallerstein
Apr 14, 2024
https://finance.yahoo.com/news/america-bonds-getting-harder-sell-093000703.html
A series of weak auctions for U.S. Treasurys are stoking investors’ concerns that markets will struggle to absorb an incoming rush of government debt.
A selloff sparked by a hotter-than-expected inflation report intensified this past week after lackluster demand for a $39 billion sale of 10-year Treasurys. Investors also showed tepid interest in auctions for three-year and 30-year Treasurys.
Behind their caution lies a growing conviction that inflation isn’t fully tamed and that the Federal Reserve will leave interest rates at multidecade highs for months, if not years, to come. The 10-year yield—the benchmark for borrowing rates on everything from mortgages to corporate loans—finished the week around 4.5%, near its highest levels since touching 5% in October.
At the same time, the government is poised to sell another $386 billion or so of bonds in May—an onslaught that Wall Street expects to continue no matter who wins November’s presidential election. While few fear a failed auction—an unlikely scenario that analysts said could potentially trigger prolonged turmoil—some worry that a glut of Treasurys will rattle other parts of the markets, raise the cost of government borrowing and hurt the economy.
“There’s been a big shift in the market narrative. The CPI [consumer-price index] report changed everybody’s view of where Fed policy is headed,” said James St. Aubin, chief investment officer at Sierra Mutual Funds.
The government funds its operations by selling the world’s safest bonds to investors and dealers at regular auctions. And issuance of Treasurys has exploded since the pandemic began. In the first three months of 2024, the U.S. sold $7.2 trillion of debt, the largest quarterly total on record. That surpasses the second quarter of 2020, when the government was financing a wave of Covid-19 stimulus. It also builds on a record $23 trillion of Treasurys issued last year, which raised $2.4 trillion of cash, after accounting for maturing bonds.
The size of the sales has expanded along with the market for U.S. debt. After poor demand at a series of auctions late last year jarred investors, the Treasury Department eased concerns by shifting to financing America’s deficit mostly with short-term debt. That helped, in part, because the Fed simultaneously signaled a pivot to easier monetary policy: Hopes that interest-rate cuts would come soon helped reassure investors about the Treasury’s strategy.
Now, those hopes are dwindling, and the Treasury is expected to announce its third-quarter borrowing plans at the end of April. The nonpartisan Congressional Budget Office forecasts that the deficit will increase from 5.6% of U.S. gross domestic product to 6.1% in the next decade. Debt held by the public is set to expand from $28 trillion to $48 trillion in that time, up from $13 trillion 10 years ago.
Wall Street doesn’t expect the Treasury to raise auction sizes of longer-term notes and bonds until next year. But the government must also contend with refinancing a chunk of its bonds. A record $8.9 trillion of Treasurys, roughly a third of outstanding U.S. debt, is set to mature just in 2024, according to Apollo Global Management’s chief economist, Torsten Slok.
Investors are also watching how revenues from tax season boost America’s coffers in the coming weeks.
“We’ve been losing liquidity as people and companies pull out money to pay taxes,” said Thomas Tzitzouris, head of fixed-income research at Strategas. “We’re in a bit of an air pocket that’s letting the bond market float more freely and yields rise.”
One line of support is likely to come from the Fed. Minutes from the Fed’s March meeting, released last week, showed that policymakers are looking to slow the pace of running down the central bank’s large holdings of bonds accumulated to prop up the economy. They would likely reduce the rate at which they let Treasurys mature to $30 billion a month, half of the current $60 billion pace.
Balance-sheet runoff, known as quantitative tightening, is meant to drain the banking system of reserves and increase the market’s share of the sovereign-debt pile. With the Fed paring back that program, and prepping to stop it sometime in the future, investors will have to absorb a smaller net share of Treasury securities. That could support bond prices and remove some upward pressure on yields.
Another factor supporting Treasuries: Global investors have a lot of savings and few viable options to place them. The eurozone and Japan both run current-account surpluses, meaning they take in more money from trade than they spend on imports. Treasurys provide them a safe place to stash their cash and pick up more than 4% of yield. They also offer an easy way to invest dollar-denominated income from trading with America.
The euro and yen are both sinking relative to the dollar, in part because the Bank of Japan is still holding rates low and investors expect the European Central Bank to slash them soon. That could increase demand for U.S. debt, with Treasury yields remaining elevated relative to global alternatives.
That leaves many investors hopeful that as long as inflation continues to trend toward the Fed’s 2% target, Treasury yields will remain under 5%. But some worry the influx of new Treasurys will exacerbate already-volatile markets, particularly if inflation stays sticky. After the CPI report and weak auction Wednesday, the 10-year yield posted its biggest one-day rise since 2022, jumping nearly 0.20 percentage point.
“If we continue to see hot inflation prints, it’s going to keep a lot of people on the sidelines,” said Sierra’s St. Aubin.
<<<
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Hey You -
Us and Them -
Bigworld, On the financial front, we'll see what happens next week. The stock market should tank to some extent, but we'll see if the PPT / Plunge Protection Team comes to the rescue. When the Middle East blew up last October, the Fed quickly did a dovish pivot to support the financial markets, and that could be repeated. But the war risks are broader now than in Oct, and the current market is higher and more vulnerable.
I figure the US dollar surge from last week could continue into next week, so that night mute further upside for gold / silver (?), but just a guess. The market has a way of doing what we don't expect, but at minimum I figure a pullback to 5000 for the S+P 500 seems likely. The market was in need of a pullback / consolidation anyway.
As I see it, the big question now is to what extent Netanyahu continues trying to gin up the 'US bombs Iran' scenario. The main goal is to disable the underground nuclear enrichment sites at Natanz (which are deep under a mountain), which will presumably require tactical nuclear bunker buster bombs, so that means the US will have to do it, unless Israel has acquired some of these for their arsenal. They've had hundreds of nuclear tipped ballistic missiles for decades, but probably only have conventional bunker busters. Netanyahu could decide to go it alone if the alternative is a nuclear armed Iran by this time next year. For him it's a huge existential problem, which makes the alternative of waiting impossible.
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So the plot thickens. Still early, but some possible scenarios that could force the US into direct action against Iran would include -
1) Netanyahu continues to deliberately escalate the tit-for-tat with Iran, hoping that some US assets are hit.
2) A false flag is staged against US assets in the region. But since current US leadership is so wary and reluctant, a false flag probably wouldn't work anyway.
3) Netanyahu waits until next year and hopes for a Rep administration full of neocons. The problem here is multi-fold --> a) by next year Netanyahu will likely be out of power, b) by next year Iran likely has a nuclear weapon, c) Biden may be re-elected
The biggest problem is - b) the inevitability of Iran getting nuclear weapons. We already have North Korea with nukes, so next will be Iran. With our extreme vulnerability to an orbital EMP attack (knocking out the power grid and microelectronics), the future looks precarious to say the least -
Nuclear EMP - https://en.wikipedia.org/wiki/Nuclear_electromagnetic_pulse
>>> Biden tells Netanyahu US will not participate in counter-strike against Iran
4-14-24
by MJ Lee and Kevin Liptak
CNN
https://www.msn.com/en-us/news/world/biden-tells-netanyahu-us-will-not-participate-in-counter-strike-against-iran/ar-BB1lB3l0?ocid=BingHp01&cvid=3cf388f67cf54cc896fb3bb8d6bd3e14&ei=11
President Joe Biden and senior members of his national security team, seeking to contain the risk of a wider regional war following a barrage of Iranian missiles and drones directed toward Israel, have told their counterparts the US will not participate in any offensive action against Iran, according to US officials familiar with the matter.
In a conversation with Prime Minister Benjamin Netanyahu late Saturday, Biden sought to frame Israel’s successful interception of the Iranian onslaught as a major victory — with the suggestion that further Israeli response was unnecessary.
Biden told the Israeli prime minister in his phone call that he should consider Saturday a win because Iran’s attacks had been largely unsuccessful and demonstrated Israel’s superior military capability, a senior administration official said.
John Kirby, the White House national security spokesman, said Sunday the ability to prevent widespread damage was a demonstration of Israel’s “military superiority” and proof that Iran was not the “military power that they claim to be.”
“This was an incredible success, really proving Israel’s military superiority and just as critically, their diplomatic superiority, that they have friends in the region, that they have around the world that are willing to help them,” Kirby told CNN’s Jake Tapper on “State of the Union.”
Defense Secretary Lloyd Austin asked his Israeli counterpart, Minister Yoav Gallant, to notify the US ahead of any potential response to the Iranian attack, according to another US official.
Even as American officials stressed to their counterparts that the final decision on how to respond to Iran is up to Israel, Biden has sought to prevent a wider escalation of the conflict.
On Sunday, he planned to convene a meeting of fellow Group of Seven leaders to discuss a “united diplomatic response” — with the emphasis on non-military actions that would limit the prospects of a wider war.
“I told him that Israel demonstrated a remarkable capacity to defend against and defeat even unprecedented attacks — sending a clear message to its foes that they cannot effectively threaten the security of Israel,” Biden said in a statement following his conversation with Netanyahu.
Whether Netanyahu takes Biden’s advice remains an open question. The Iranian reprisals came at a moment of deep tension between the men over the war in Gaza. Throughout that conflict, the limits of American influence on Israeli decision-making have been laid bare.
Iran’s decision to fire weapons from its own territory toward Israel significantly ratchets up the long-simmering enmity between the two countries. There will likely be political pressure from inside Israel for some type of response.
Kirby said the attack — the first launched from Iranian soil against Israel — did not necessarily have to constitute the start of a broader regional war.
“We don’t believe it is nor do we believe it has to be,” he told Tapper, noting that the US and Israel both had a good sense of what Iran was planning to do ahead of time.
Gallant warned Sunday that the confrontation with Iran is “not over yet.” The country’s response options are expected to be discussed in detail during a meeting of Israel’s war cabinet meeting.
The Commander of Iran’s Islamic Revolutionary Guard Corps, Hossein Salami, warned that Tehran would respond directly if Israel retaliates, saying a “new equation” had been created.
<<<
---
>>> Biden tells Netanyahu US will not participate in counter-strike against Iran
4-14-24
by MJ Lee and Kevin Liptak
CNN
https://www.msn.com/en-us/news/world/biden-tells-netanyahu-us-will-not-participate-in-counter-strike-against-iran/ar-BB1lB3l0?ocid=BingHp01&cvid=3cf388f67cf54cc896fb3bb8d6bd3e14&ei=11
President Joe Biden and senior members of his national security team, seeking to contain the risk of a wider regional war following a barrage of Iranian missiles and drones directed toward Israel, have told their counterparts the US will not participate in any offensive action against Iran, according to US officials familiar with the matter.
In a conversation with Prime Minister Benjamin Netanyahu late Saturday, Biden sought to frame Israel’s successful interception of the Iranian onslaught as a major victory — with the suggestion that further Israeli response was unnecessary.
Biden told the Israeli prime minister in his phone call that he should consider Saturday a win because Iran’s attacks had been largely unsuccessful and demonstrated Israel’s superior military capability, a senior administration official said.
John Kirby, the White House national security spokesman, said Sunday the ability to prevent widespread damage was a demonstration of Israel’s “military superiority” and proof that Iran was not the “military power that they claim to be.”
“This was an incredible success, really proving Israel’s military superiority and just as critically, their diplomatic superiority, that they have friends in the region, that they have around the world that are willing to help them,” Kirby told CNN’s Jake Tapper on “State of the Union.”
Defense Secretary Lloyd Austin asked his Israeli counterpart, Minister Yoav Gallant, to notify the US ahead of any potential response to the Iranian attack, according to another US official.
Even as American officials stressed to their counterparts that the final decision on how to respond to Iran is up to Israel, Biden has sought to prevent a wider escalation of the conflict.
On Sunday, he planned to convene a meeting of fellow Group of Seven leaders to discuss a “united diplomatic response” — with the emphasis on non-military actions that would limit the prospects of a wider war.
“I told him that Israel demonstrated a remarkable capacity to defend against and defeat even unprecedented attacks — sending a clear message to its foes that they cannot effectively threaten the security of Israel,” Biden said in a statement following his conversation with Netanyahu.
Whether Netanyahu takes Biden’s advice remains an open question. The Iranian reprisals came at a moment of deep tension between the men over the war in Gaza. Throughout that conflict, the limits of American influence on Israeli decision-making have been laid bare.
Iran’s decision to fire weapons from its own territory toward Israel significantly ratchets up the long-simmering enmity between the two countries. There will likely be political pressure from inside Israel for some type of response.
Kirby said the attack — the first launched from Iranian soil against Israel — did not necessarily have to constitute the start of a broader regional war.
“We don’t believe it is nor do we believe it has to be,” he told Tapper, noting that the US and Israel both had a good sense of what Iran was planning to do ahead of time.
Gallant warned Sunday that the confrontation with Iran is “not over yet.” The country’s response options are expected to be discussed in detail during a meeting of Israel’s war cabinet meeting.
The Commander of Iran’s Islamic Revolutionary Guard Corps, Hossein Salami, warned that Tehran would respond directly if Israel retaliates, saying a “new equation” had been created.
<<<
---
Well, it looks like Iran has sent drones toward Israel, so the next question is what they are targeting. Last week, the US military already started moving more ships into the region, so this could be the start of the big punch up with Iran -
>>> Iran launches dozens of drones at Israel as Mideast tensions soar: Live updates <<<
https://www.usatoday.com/story/news/world/israel-hamas/2024/04/13/israel-war-updates-iran-ship/73311944007/
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Bigworld, With the Middle East situation, we'll see if this cargo ship seizure is the extent of the Iranian 'reply' to Israel's recent bombing of their consulate in Syria. It seems like a measured response, and the Iranians obviously realize they are being set up. Apparently the Iranian leader is in his early 80s, and has been adept at avoiding direct war, and instead uses proxies. However, the Netanyahu gang may just keep raising the stakes until the US is forced into fighting Iran directly. Biden seems very reluctant, but Israel has a nuclear arsenal of its own, and the threat of that being used could force him into action.
Who knows, but as an investor I figure there's no sense having one's neck out too far these days, so I lowered the stock allocation again on Friday afternoon, down to 15% (from 28%). I'll try to hang with that, and can always add a 1X inverse hedge ETF (SH) if the market really starts to unravel. The stock market did great over the last 6 months, but the rest of the year looks murky at best.
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>>> Iranian commandos seize an Israeli-linked container ship near Strait of Hormuz
April 13, 2024
The Associated Press
https://www.npr.org/2024/04/13/1244583830/iran-seizes-container-ship-strait-of-hormuz-israel
DUBAI, United Arab Emirates — Commandos from Iran's paramilitary Revolutionary Guard rappelled down from a helicopter onto an Israeli-affiliated container ship near the Strait of Hormuz and seized the vessel Saturday, the latest in a series of attacks between the two countries.
The Middle East had braced for potential Iranian retaliation over a suspected Israeli strike earlier this month on an Iranian consular building in Syria that killed 12 people, including a senior Guard general who once commanded its expeditionary Quds Force there.
The Israeli war on Hamas in the Gaza Strip meanwhile is now 6 months old and is inflaming decades-old tensions across the whole region. With Iranian-backed forces like Hezbollah in Lebanon and Yemen's Houthi rebels also involved in the fighting, any new attack in the Mideast threatens to escalate that conflict into a wider regional war.
Iran's state-run IRNA said a special forces unit of the Guard's navy carried out the attack on the vessel, the Portuguese-flagged MSC Aries, a container ship associated with London-based Zodiac Maritime.
Biden returns to D.C. a day early to consult national security team on Iran-Israel row
Biden says Iran could soon attack Israel, and warns, 'Don't'
Zodiac Maritime is part of Israeli billionaire Eyal Ofer's Zodiac Group. Zodiac declined to comment and referred questions to MSC. Geneva-based MSC later acknowledged the seizure and said 25 crew had been aboard the vessel.
"We are working closely with the relevant authorities to ensure their wellbeing, and safe return of the vessel," MSC said.
An Indian government official, speaking on condition of anonymity as he was not authorized to brief to journalists, said 17 of the crew were Indians.
IRNA said the Guard would take the vessel into Iranian territorial waters.
Earlier, a Middle East defense official, who spoke on condition of anonymity to discuss intelligence matters, shared a video of the attack with The Associated Press. In it, the Iranian commandos are seen rappelling down onto a stack of containers sitting on the deck of the vessel.
A crew member on the ship can be heard saying: "Don't come out." He then tells his colleagues to go to the ship's bridge as more commandos come down on the deck. One commando can be seen kneeling above the others to provide them potential cover fire.
The video corresponded with known details of the MSC Aries. The helicopter used also appeared to be a Soviet-era Mil Mi-17 helicopter, which both the Guard and the Iranian-backed Houthis of Yemen have used in the past to conduct commando raids on ships.
The British military's United Kingdom Maritime Trade Operations described the vessel as being "seized by regional authorities" in the Gulf of Oman off the Emirati port city of Fujairah, without elaborating.
How Iran and Israel became archenemies
Israeli Foreign Minister Israel Katz called on nations to list the Guard as a terrorist organization.
Iran "is a criminal regime that supports Hamas' crimes and is now conducting a pirate operation in violation of international law," Katz said.
Iran since 2019 has engaged a series of ship seizures and attacks on vessels have been attributed to it amid ongoing tensions with the West over its rapidly advancing nuclear program.
Since November, Iran had dialed back its ship attacks as the Houthis targeted ships in the Gulf of Aden and the Red Sea. Houthi attacks have slowed in recent weeks as the Muslim holy fasting month of Ramadan ended and the rebels have faced months of U.S.-led airstrikes targeting them.
In previous seizures, Iran has offered initial explanations about its operations to make it seem like the attacks had nothing to do with the wider geopolitical tensions — though later acknowledging as much. In Saturday's attack, however, Iran tellingly offered no explanation for the seizure other than to say the MSC Aries had links to Israel.
Iran has been threatening to act after Israeli strike in Syria
For days, Iranian officials up to and including Supreme Leader Ayatollah Ali Khamenei have been threatening to "slap" Israel for the Syria strike. Western governments have issued warnings to their citizens in the region to be prepared for attacks.
However, Iran in the past largely has avoided directly attacking Israel, despite it carrying out the targeted killing of nuclear scientists and multiple sabotage campaigns against Iran's atomic sites. Iran has, however, targeted Israeli or Jewish-linked sites through proxy forces over the decades.
Earlier this week, Guard Gen. Ali Reza Tangsiri, who oversees Iran's naval forces, criticized the presence of Israelis in the region and in the United Arab Emirates. The UAE reached a diplomatic recognition deal with Israel in 2020, something that long has enraged Tehran.
"We know that bringing Zionists in this point is not merely for economic work," Tangsiri reportedly said. "Now, they are carrying out security and military jobs, indeed. This is a threat, and this should not happen."
The U.S., Israel's main backer, has stood by the country despite growing concerns over Israel's war on Gaza killing more than 33,600 Palestinians and wounding over 76,200 more. Israel's war began after Hamas' Oct. 7 attack on Israel that killed 1,200 people and saw some 250 others taken hostage.
On Friday, President Joe Biden warned Iran not to attack Israel and said he felt an Iranian attack on Israel likely would happen "sooner than later."
"We will help defend Israel, and Iran will not succeed," Biden added.
The Gulf of Oman is near the Strait of Hormuz, the narrow mouth of the Persian Gulf through which a fifth of all globally traded oil passes. Fujairah, on the United Arab Emirates' eastern coast, is a main port in the region for ships to take on new oil cargo, pick up supplies or trade out crew.
Since 2019, the waters off Fujairah have seen a series of explosions and hijackings. The U.S. Navy blamed Iran for limpet mine attacks on vessels that damaged tankers. The UAE meanwhile has sought to mend ties with Iran and issued a statement condemning the suspected Israeli attack in Syria.
Meanwhile, Lufthansa Group said on Saturday it had extended the suspension of its flights between Frankfurt and Tehran though Thursday and said that all of its planes would avoid Iranian airspace in that period. The German carrier also said that, until at least Tuesday, flights to and from Amman will be operated as "day flights" so crews can return to Frankfurt without spending a night in the Jordanian capital.
Dutch airline KLM said in a statement Saturday that it will no longer fly over Iran or Israel, but will continue flights to and from Tel Aviv, a destination not currently deemed risky. "Safety has the highest priority," KLM said.
<<<
---
>>> MDA awards Lockheed $4.1B contract to upgrade battle command system
Defense News
by Jen Judson
4-12-24
https://www.defensenews.com/pentagon/2024/04/11/mda-awards-lockheed-41b-contract-to-upgrade-battle-command-system/
The U.S. Missile Defense Agency has awarded Lockheed Martin a contract worth up to $4.1 billion to continue to field, maintain and upgrade its battle command system, according to an April 11 contract announcement from the Defense Department.
The contract period runs May 1, 2024, through April 30, 2029, with an option to extend it to April 30, 2034.
“This contract will accelerate innovation and continue leading the development of the Command and Control, Battle Management and Communications (C2BMC) system,” Lockheed said in a statement. “Under the new C2BMC-Next scope, the system will be upgraded with the latest 21st Century Security technology for faster, multi-domain coordinated responses to emerging threats.”
The C2BMC system connects a wide variety of systems and radars that together form a global missile defense architecture that protects the homeland as well as U.S. and allied forces worldwide from long-range missile attacks.
Work under the new C2BMC Next contract includes bringing in allies and partners, according to the company.
“Part of C2BMC-Next will be enhancing global integration, exploring possibilities of linking this decades-long proven, operationally-fielded system with allied nations for the first time,” the American firm’s statement noted.
“With C2BMC’s already well-established lines of reliable communication — operating 24/7, 365 days a year in more than 30 locations across the world — the ability to securely collaborate with other countries, across multiple domains, from any location in near real-time will be a game changer for the defense industry,” according to Erika Marshall, Lockheed’s vice president for C4ISR, which stands for command, control, communications, computers, intelligence, surveillance and reconnaissance.
The effort under the contract will also include providing C2BMC with technology “that will provide greater Space Domain Awareness,” according to the company’s statement. “Through the connection of sensors, and diffusion of data at a level that hasn’t been done before, this enhancement will allow operators to see a complete view of the battlespace around the world.”
Lockheed has been the prime contractor for C2BMC since 2002. The system, first fielded in 2004, has gone through numerous upgrades, which are spiraled in to adapt to threats. C2BMC was designed to focus from a strategic level down to an operational level.
Recent upgrades since 2021 gave the Ground-Based Midcourse Defense, or GMD, system a single, composite, real-time picture of threats by tying into and fusing data from a broader set of sensors to include satellites as well as ground- and ship-based radars, according to the company.
The GMD system is a U.S.-based capability designed to defend the homeland against intercontinental ballistic missile threats, particularly from North Korea and Iran. The system is made up of interceptors buried in the ground at Fort Greely, Alaska, and Vandenberg Space Force Base in California.
MDA also linked C2BMC to the Army’s Integrated Battle Command System, which provides threat pictures down to the tactical level, as part of recent upgrades. IBCS, which reached full-rate production in 2023, is the command-and-control system for the Army’s air and missile defense architecture.
More enhancements included giving C2BMC the capability to pass data back-and-forth with IBCS and other sensors, including space sensors.
The recent upgrades and upcoming development work done under the contract over the next several years will help the system support the Joint All-Domain Command and Control initiative. JADC2 is the Pentagon’s warfighting strategy focused on building an overarching network to fight advanced adversaries like China and Russia. This would require high-bandwidth, resilient communications as well as the ability to share massive amounts of data to help commanders rapidly make decisions.
Lockheed will perform the majority of its work under the new contract in Huntsville, Alabama, and Colorado Springs, Colorado.
<<<
---
>>> Iranian commandos seize an Israeli-linked container ship near Strait of Hormuz
April 13, 2024
The Associated Press
https://www.npr.org/2024/04/13/1244583830/iran-seizes-container-ship-strait-of-hormuz-israel
DUBAI, United Arab Emirates — Commandos from Iran's paramilitary Revolutionary Guard rappelled down from a helicopter onto an Israeli-affiliated container ship near the Strait of Hormuz and seized the vessel Saturday, the latest in a series of attacks between the two countries.
The Middle East had braced for potential Iranian retaliation over a suspected Israeli strike earlier this month on an Iranian consular building in Syria that killed 12 people, including a senior Guard general who once commanded its expeditionary Quds Force there.
The Israeli war on Hamas in the Gaza Strip meanwhile is now 6 months old and is inflaming decades-old tensions across the whole region. With Iranian-backed forces like Hezbollah in Lebanon and Yemen's Houthi rebels also involved in the fighting, any new attack in the Mideast threatens to escalate that conflict into a wider regional war.
Iran's state-run IRNA said a special forces unit of the Guard's navy carried out the attack on the vessel, the Portuguese-flagged MSC Aries, a container ship associated with London-based Zodiac Maritime.
Biden returns to D.C. a day early to consult national security team on Iran-Israel row
Biden says Iran could soon attack Israel, and warns, 'Don't'
Zodiac Maritime is part of Israeli billionaire Eyal Ofer's Zodiac Group. Zodiac declined to comment and referred questions to MSC. Geneva-based MSC later acknowledged the seizure and said 25 crew had been aboard the vessel.
"We are working closely with the relevant authorities to ensure their wellbeing, and safe return of the vessel," MSC said.
An Indian government official, speaking on condition of anonymity as he was not authorized to brief to journalists, said 17 of the crew were Indians.
IRNA said the Guard would take the vessel into Iranian territorial waters.
Earlier, a Middle East defense official, who spoke on condition of anonymity to discuss intelligence matters, shared a video of the attack with The Associated Press. In it, the Iranian commandos are seen rappelling down onto a stack of containers sitting on the deck of the vessel.
A crew member on the ship can be heard saying: "Don't come out." He then tells his colleagues to go to the ship's bridge as more commandos come down on the deck. One commando can be seen kneeling above the others to provide them potential cover fire.
The video corresponded with known details of the MSC Aries. The helicopter used also appeared to be a Soviet-era Mil Mi-17 helicopter, which both the Guard and the Iranian-backed Houthis of Yemen have used in the past to conduct commando raids on ships.
The British military's United Kingdom Maritime Trade Operations described the vessel as being "seized by regional authorities" in the Gulf of Oman off the Emirati port city of Fujairah, without elaborating.
How Iran and Israel became archenemies
Israeli Foreign Minister Israel Katz called on nations to list the Guard as a terrorist organization.
Iran "is a criminal regime that supports Hamas' crimes and is now conducting a pirate operation in violation of international law," Katz said.
Iran since 2019 has engaged a series of ship seizures and attacks on vessels have been attributed to it amid ongoing tensions with the West over its rapidly advancing nuclear program.
Since November, Iran had dialed back its ship attacks as the Houthis targeted ships in the Gulf of Aden and the Red Sea. Houthi attacks have slowed in recent weeks as the Muslim holy fasting month of Ramadan ended and the rebels have faced months of U.S.-led airstrikes targeting them.
In previous seizures, Iran has offered initial explanations about its operations to make it seem like the attacks had nothing to do with the wider geopolitical tensions — though later acknowledging as much. In Saturday's attack, however, Iran tellingly offered no explanation for the seizure other than to say the MSC Aries had links to Israel.
Iran has been threatening to act after Israeli strike in Syria
For days, Iranian officials up to and including Supreme Leader Ayatollah Ali Khamenei have been threatening to "slap" Israel for the Syria strike. Western governments have issued warnings to their citizens in the region to be prepared for attacks.
However, Iran in the past largely has avoided directly attacking Israel, despite it carrying out the targeted killing of nuclear scientists and multiple sabotage campaigns against Iran's atomic sites. Iran has, however, targeted Israeli or Jewish-linked sites through proxy forces over the decades.
Earlier this week, Guard Gen. Ali Reza Tangsiri, who oversees Iran's naval forces, criticized the presence of Israelis in the region and in the United Arab Emirates. The UAE reached a diplomatic recognition deal with Israel in 2020, something that long has enraged Tehran.
"We know that bringing Zionists in this point is not merely for economic work," Tangsiri reportedly said. "Now, they are carrying out security and military jobs, indeed. This is a threat, and this should not happen."
The U.S., Israel's main backer, has stood by the country despite growing concerns over Israel's war on Gaza killing more than 33,600 Palestinians and wounding over 76,200 more. Israel's war began after Hamas' Oct. 7 attack on Israel that killed 1,200 people and saw some 250 others taken hostage.
On Friday, President Joe Biden warned Iran not to attack Israel and said he felt an Iranian attack on Israel likely would happen "sooner than later."
"We will help defend Israel, and Iran will not succeed," Biden added.
The Gulf of Oman is near the Strait of Hormuz, the narrow mouth of the Persian Gulf through which a fifth of all globally traded oil passes. Fujairah, on the United Arab Emirates' eastern coast, is a main port in the region for ships to take on new oil cargo, pick up supplies or trade out crew.
Since 2019, the waters off Fujairah have seen a series of explosions and hijackings. The U.S. Navy blamed Iran for limpet mine attacks on vessels that damaged tankers. The UAE meanwhile has sought to mend ties with Iran and issued a statement condemning the suspected Israeli attack in Syria.
Meanwhile, Lufthansa Group said on Saturday it had extended the suspension of its flights between Frankfurt and Tehran though Thursday and said that all of its planes would avoid Iranian airspace in that period. The German carrier also said that, until at least Tuesday, flights to and from Amman will be operated as "day flights" so crews can return to Frankfurt without spending a night in the Jordanian capital.
Dutch airline KLM said in a statement Saturday that it will no longer fly over Iran or Israel, but will continue flights to and from Tel Aviv, a destination not currently deemed risky. "Safety has the highest priority," KLM said.
<<<
---
>>> Iranian attack on Israel expected ‘sooner rather than later’, says Joe Biden
President said US are ‘devoted to the defence of Israel’ as he urged Tehran to show restraint
The Guardian
by Peter Beaumont, Julian Borger and Patrick Wintour
Apr 12, 2024
https://www.theguardian.com/world/2024/apr/12/france-diplomats-families-iran-israel-travel-warnings
Joe Biden has said he expects an Iranian attack on Israel “sooner rather than later” and issued a last-ditch message to Tehran: “Don’t.”
“We are devoted to the defence of Israel. We will support Israel. We will help defend Israel and Iran will not succeed,” Biden told reporters on Friday.
Earlier the White House national security spokesperson John Kirby warned that the threat of a significant Iranian attack on Israel remains “viable” despite Washington-led efforts, including calls to Tehran from the UK and Germany, to deter a serious escalation in the conflict in the Middle East.
The White House comments came as several countries, including India, France, Poland and Russia, warned their citizens against travel to the region and Israel’s defence minister, Yoav Gallant, said his country was “prepared to defend [itself] on the ground and in the air, in close cooperation with our partners”.
Later CBS, quoting two unnamed US officials, reported that a substantial missile and drone attack could be launched as early as Friday evening, as a number of countries urgently warned their nationals of the risk of escalating violence in the region, and Israel’s prime minister, Benjamin Netanyahu, convened a security assessment.
Appearing to underline that report, Javad Karimi-Ghodousi, a member of the Iranian parliament’s national security and foreign policy commission, said: “After punishing the Zionist regime in the coming hours, this villain will understand that henceforth, wherever in the world it attempts to assassinate figures of the resistance front, it will again be punished with Iranian missiles.”
German airline Lufthansa said on Friday its planes would no longer use Iranian airspace and extended its suspension of flights to and from Tehran until Thursday.
Qantas has paused its non-stop flights from Perth to London because the 17-and-a-half-hour flight is possible only by using Iranian airspace.
Iran has threatened reprisals against Israel for a strike on the Iranian consulate in Syria on 1 April, in which seven members of the Revolutionary Guards including two generals were killed, sparking fears that an already volatile climate in the Middle East could quickly spiral further.
Tehran’s foreign minister, Hossein Amir-Abdollahian, said on Thursday that Iran felt it had no choice but to respond to the deadly attack on its diplomatic mission after the UN security council failed to take action.
Speaking to reporters, Kirby said the prospect of an Iranian attack on Israel was “still a viable threat” despite concerted efforts by Israel and the US in recent days to deter it.
“We are in constant communication with our Israeli counterparts about making sure that they can defend themselves against those kinds of attacks,” Kirby said. He confirmed that the head of US Central Command, Gen Erik Kurilla, was in Israel talking with defence officials about how Israel could be best prepared.
Israel has said it is strengthening air defences and has paused leave for combat units.
On Friday, France ordered the evacuation of diplomats’ families and warned nationals in several other countries, including Israel and Lebanon, and alerts were issued by Canada and Australia. The US also restricted travel within Israel for US diplomats and their families.
In its strong warning on Friday, the French foreign ministry advised citizens against travelling to Iran, Lebanon, Israel and the Palestinian territories and said French civil servants were banned from conducting any missions there.
The advisories followed a number of media reports that Israel was preparing for the prospect of an attack from Iran, possibly as soon as this weekend.
A US official told the Wall Street Journal that American intelligence reports indicated an Iranian retaliatory strike “possibly on Israeli soil” as opposed to against Israeli interests elsewhere, adding that the strike could come within 24 to 48 hours.
The same report, however, also reported an individual briefed by the Iranian leadership as saying no final decision had been taken by Tehran.
While analysts had initially speculated that Iran may not rush into a response, concern has grown in the last two days over the potential for direct conflict between Iran and Israel after years of proxy conflict between the two enemies.
More recently experts have suggested that Iran now feels it is required to act militarily to restore its balance of deterrence with Israel.
On Wednesday, Joe Biden said Iran was threatening a “significant attack” against Israel and that Washington would do all it could to protect Israel’s security.
The US president’s comments in turn followed a televised speech by Iran’s leader saying the attack in Damascus was equivalent to an attack on Iran itself. “When they attacked our consulate area, it was like they attacked our territory,” Ayatollah Ali Khamenei said. “The evil regime must be punished, and it will be punished.”
The Israeli military said it was fully prepared for any strike. Israel was “on alert and highly prepared for various scenarios, and we are constantly assessing the situation,” the Israel Defense Forces spokesperson, R Adm Daniel Hagari, said at a press conference. “We are ready for attack and defence using a variety of capabilities that the IDF has, and also ready with our strategic partners.”
According to reports in the Israeli media, the IDF believes that Iran or one of its proxies are most likely to attempt to strike a military target rather than civilian centres, although some sites such as the Kirya, Israel’s defence headquarters in Tel Aviv, are located in city centres next to shopping malls, offices and restaurants.
Concern over a significant escalation in the Middle East conflict, which has already drawn in Hezbollah in Lebanon, pro-Iranian groups in Iraq and Yemen’s Houthis, came as Israeli forces continued to fight Palestinian militants in the north and centre of the Gaza Strip.
Residents of al-Nusseirat refugee camp in central Gaza said dozens were dead or wounded after Israeli bombardment from air, land and sea that had followed a surprise ground assault on Thursday, and that houses and two mosques had been destroyed.
<<<
---
>>> Iranian attack on Israel expected ‘sooner rather than later’, says Joe Biden
President said US are ‘devoted to the defence of Israel’ as he urged Tehran to show restraint
The Guardian
by Peter Beaumont, Julian Borger and Patrick Wintour
Apr 12, 2024
https://www.theguardian.com/world/2024/apr/12/france-diplomats-families-iran-israel-travel-warnings
Joe Biden has said he expects an Iranian attack on Israel “sooner rather than later” and issued a last-ditch message to Tehran: “Don’t.”
“We are devoted to the defence of Israel. We will support Israel. We will help defend Israel and Iran will not succeed,” Biden told reporters on Friday.
Earlier the White House national security spokesperson John Kirby warned that the threat of a significant Iranian attack on Israel remains “viable” despite Washington-led efforts, including calls to Tehran from the UK and Germany, to deter a serious escalation in the conflict in the Middle East.
The White House comments came as several countries, including India, France, Poland and Russia, warned their citizens against travel to the region and Israel’s defence minister, Yoav Gallant, said his country was “prepared to defend [itself] on the ground and in the air, in close cooperation with our partners”.
Later CBS, quoting two unnamed US officials, reported that a substantial missile and drone attack could be launched as early as Friday evening, as a number of countries urgently warned their nationals of the risk of escalating violence in the region, and Israel’s prime minister, Benjamin Netanyahu, convened a security assessment.
Appearing to underline that report, Javad Karimi-Ghodousi, a member of the Iranian parliament’s national security and foreign policy commission, said: “After punishing the Zionist regime in the coming hours, this villain will understand that henceforth, wherever in the world it attempts to assassinate figures of the resistance front, it will again be punished with Iranian missiles.”
German airline Lufthansa said on Friday its planes would no longer use Iranian airspace and extended its suspension of flights to and from Tehran until Thursday.
Qantas has paused its non-stop flights from Perth to London because the 17-and-a-half-hour flight is possible only by using Iranian airspace.
Iran has threatened reprisals against Israel for a strike on the Iranian consulate in Syria on 1 April, in which seven members of the Revolutionary Guards including two generals were killed, sparking fears that an already volatile climate in the Middle East could quickly spiral further.
Tehran’s foreign minister, Hossein Amir-Abdollahian, said on Thursday that Iran felt it had no choice but to respond to the deadly attack on its diplomatic mission after the UN security council failed to take action.
Speaking to reporters, Kirby said the prospect of an Iranian attack on Israel was “still a viable threat” despite concerted efforts by Israel and the US in recent days to deter it.
“We are in constant communication with our Israeli counterparts about making sure that they can defend themselves against those kinds of attacks,” Kirby said. He confirmed that the head of US Central Command, Gen Erik Kurilla, was in Israel talking with defence officials about how Israel could be best prepared.
Israel has said it is strengthening air defences and has paused leave for combat units.
On Friday, France ordered the evacuation of diplomats’ families and warned nationals in several other countries, including Israel and Lebanon, and alerts were issued by Canada and Australia. The US also restricted travel within Israel for US diplomats and their families.
In its strong warning on Friday, the French foreign ministry advised citizens against travelling to Iran, Lebanon, Israel and the Palestinian territories and said French civil servants were banned from conducting any missions there.
The advisories followed a number of media reports that Israel was preparing for the prospect of an attack from Iran, possibly as soon as this weekend.
A US official told the Wall Street Journal that American intelligence reports indicated an Iranian retaliatory strike “possibly on Israeli soil” as opposed to against Israeli interests elsewhere, adding that the strike could come within 24 to 48 hours.
The same report, however, also reported an individual briefed by the Iranian leadership as saying no final decision had been taken by Tehran.
While analysts had initially speculated that Iran may not rush into a response, concern has grown in the last two days over the potential for direct conflict between Iran and Israel after years of proxy conflict between the two enemies.
More recently experts have suggested that Iran now feels it is required to act militarily to restore its balance of deterrence with Israel.
On Wednesday, Joe Biden said Iran was threatening a “significant attack” against Israel and that Washington would do all it could to protect Israel’s security.
The US president’s comments in turn followed a televised speech by Iran’s leader saying the attack in Damascus was equivalent to an attack on Iran itself. “When they attacked our consulate area, it was like they attacked our territory,” Ayatollah Ali Khamenei said. “The evil regime must be punished, and it will be punished.”
The Israeli military said it was fully prepared for any strike. Israel was “on alert and highly prepared for various scenarios, and we are constantly assessing the situation,” the Israel Defense Forces spokesperson, R Adm Daniel Hagari, said at a press conference. “We are ready for attack and defence using a variety of capabilities that the IDF has, and also ready with our strategic partners.”
According to reports in the Israeli media, the IDF believes that Iran or one of its proxies are most likely to attempt to strike a military target rather than civilian centres, although some sites such as the Kirya, Israel’s defence headquarters in Tel Aviv, are located in city centres next to shopping malls, offices and restaurants.
Concern over a significant escalation in the Middle East conflict, which has already drawn in Hezbollah in Lebanon, pro-Iranian groups in Iraq and Yemen’s Houthis, came as Israeli forces continued to fight Palestinian militants in the north and centre of the Gaza Strip.
Residents of al-Nusseirat refugee camp in central Gaza said dozens were dead or wounded after Israeli bombardment from air, land and sea that had followed a surprise ground assault on Thursday, and that houses and two mosques had been destroyed.
<<<
---
Bigworld, Looks like gold finally hit some profit taking today, after reaching ~ 2450 intraday. Meanwhile the US dollar has also been surging over the last 3 days, so an unusual combination with both gold and the dollar climbing together. I figure some of the dollar strength is from the Fed delaying % rate cuts, plus dollar demand coming from people leaving the stock market.
Fwiw, I lowered my stock allocation from 28% to 20% today, but might still be on the high side. 15% could make more sense, but I'd first like to see if the S+P 500 holds at its 50 MA support. The DJIA and Russell both fell through their 50 MAs this week, but the Nasdaq is still above its 50 MA, and the S+P 500 is testing its today.
What worries me the most are the geopolitical landmines. It appears the various globalist factions may now be in agreement on an even more aggressive 'war brinksmanship' approach for dealing with Russia, Iran, etc. It's a lot safer to have these US/West foreign policy people at loggerheads with each other. Better to have relative gridlock to provide a check / balance on the lunacies of both sides, since these idiots could bumble us right into WW 3.
---
Bigworld, Gold futures - 2404, and silver - 28.85.
Wow, this has been some move. At the end of Feb, gold was ~ 2060, and on March 1st it took off, and so far is up 17%. The way it's moving, 2500 could come next week, and that would put it up over 20%. Over the same time period, silver has gone from 22.91 to 28.85, so up over 25%. Usually it would take a falling US dollar to get gold moving strongly upward, but the dollar is actually up modestly since Mar 1, so go figure.
With such a sudden runup in gold, one possible explanation is that some key players have become aware of a coming crisis, so they are piling into gold. With the Middle East teetering on disaster for months, that would be the obvious possibility. It appears the Netanyahu gang have pivoted away from the Gaza operation, and are moving into the next phase against Syria, Lebanon --> Iran. So the broader 'US bombs Iran' scenario might be starting to unfold in the period ahead, with the first step being to initiate military strikes within Iran itself, and growing from there.
Just a guess, but I'm thinking that it might be time to start reducing the stock allocation. In addition to the geopolitical landmines, it looks like the Fed's % cut plans are being pushed back, and the election uncertainty will be growing as a negative factor for the markets.
---
Bigworld, Looks like a setup designed to drag the US into attacking Iran -
>>> U.S. Warns of Imminent Attack on Israeli Assets by Iran or Proxies
Wall Street Journal
by Warren P. Strobel
https://www.msn.com/en-us/news/world/u-s-warns-of-imminent-attack-on-israeli-assets-by-iran-or-proxies/ar-BB1lpTb8?OCID=ansmsnnews11
WASHINGTON—U.S. intelligence reports show that an attack on Israeli assets by Iran or its proxies could be imminent, U.S. officials said Wednesday, as the top American military commander for the Middle East headed to Israel to coordinate a response.
Iran has publicly threatened to retaliate for a strike in Syria on an Iranian diplomatic building in Damascus last week, presumed to be the work of Israel, that killed top Iranian military officials, including a senior member of the Islamic Revolutionary Guard Corps’ elite Quds Force.
Syria and Iran accused Israel of carrying out the attack, which killed Gen. Mohammad Reza Zahedi, who managed Iranian paramilitary operations in Syria and Lebanon, according to Iranian state media and U.S. officials. Zahedi was the highest-ranking Iranian military official to be killed since the January 2020 U.S. assassination of Gen. Qassem Soleimani in Baghdad.
The U.S. has said it wasn’t involved in the strike in Syria and received no previous warning from Israel that it planned to conduct the attack.
It is unclear whether Iran is planning to conduct a direct strike on Israeli targets or use one of its Middle East proxies. In the past, Tehran has appeared eager to avoid a direct confrontation with Israel or the U.S. and worked via proxies such as Hezbollah in Lebanon, the Houthis in Yemen and Iran-backed groups in Iraq.
But U.S. defense officials warned that Iran could use its own military forces this time to demonstrate a forceful response to Zahedi’s death.
President Biden said on Wednesday that Iran is “threatening to launch a significant attack on Israel.”
“As I told [Israeli] Prime Minister [Benjamin] Netanyahu, our commitment to Israel’s security against these threats from Iran and its proxies is ironclad,” Biden told reporters. “Let me say it again: ironclad. We’re going to do all we can to protect Israel’s security.”
The Biden administration has passed messages to Iran saying that it wasn’t involved in the Israeli strike in Damascus and would hold Iran accountable if it attacked U.S. forces or assets, U.S. officials say. Iran has sent its own messages to the U.S., Iranian officials have said.
Mohammad Jamshidi, the deputy chief of staff to Iran’s president, said in a tweet on April 5 that Tehran had warned the U.S. “not to get dragged in Netanyahu’s trap.”
The U.S. reached out Wednesday to countries in the region to ask them to encourage Iran to avoid escalation, a U.S. official said.
Israeli officials have vowed to strike back if the country is attacked by Iran. The rhetoric on both sides has raised concerns about a wider Middle East war six months after Hamas attacked Israel, leaving more than 1,200 people dead, according to Israel, and prompting an Israeli invasion of the Gaza Strip. That offensive has resulted in the death of more than 33,000 Palestinians, most of them women and children, according to Palestinian health officials, whose figures don’t distinguish between combatants and civilians.
Gen. Michael Erik Kurilla, the commander of U.S. Central Command, which is responsible for U.S. military operations in the Middle East, had planned to travel to Israel before the strike in Damascus, U.S. defense officials said, primarily to iron out logistics for a U.S. temporary pier set to be placed in northern Gaza to expand humanitarian aid deliveries.
He now is expected to leave for Israel this week to also discuss a possible Iranian attack and how the U.S. could respond, the officials said. Kurilla is expected to meet with Israeli Defense Minister Yoav Gallant.
While the Pentagon doesn’t discuss whether it is currently adjusting forces in response to potential threats, U.S. military forces in the region had already been in a heightened state since Hamas’s Oct. 7 attacks on Israel.
Iran’s Supreme Leader Ayatollah Ali Khamenei said Wednesday on X that the strikes in Syria constituted an attack on Iranian soil and that Israel “should be punished, and it will be punished.” Israeli Foreign Minister Israel Katz responded that if Iran attacks Israel from Iranian soil, Israel would retaliate inside Iran.
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>>> U.S. Warns of Imminent Attack on Israeli Assets by Iran or Proxies
Wall Street Journal
by Warren P. Strobel
https://www.msn.com/en-us/news/world/u-s-warns-of-imminent-attack-on-israeli-assets-by-iran-or-proxies/ar-BB1lpTb8?OCID=ansmsnnews11
WASHINGTON—U.S. intelligence reports show that an attack on Israeli assets by Iran or its proxies could be imminent, U.S. officials said Wednesday, as the top American military commander for the Middle East headed to Israel to coordinate a response.
Iran has publicly threatened to retaliate for a strike in Syria on an Iranian diplomatic building in Damascus last week, presumed to be the work of Israel, that killed top Iranian military officials, including a senior member of the Islamic Revolutionary Guard Corps’ elite Quds Force.
Syria and Iran accused Israel of carrying out the attack, which killed Gen. Mohammad Reza Zahedi, who managed Iranian paramilitary operations in Syria and Lebanon, according to Iranian state media and U.S. officials. Zahedi was the highest-ranking Iranian military official to be killed since the January 2020 U.S. assassination of Gen. Qassem Soleimani in Baghdad.
The U.S. has said it wasn’t involved in the strike in Syria and received no previous warning from Israel that it planned to conduct the attack.
It is unclear whether Iran is planning to conduct a direct strike on Israeli targets or use one of its Middle East proxies. In the past, Tehran has appeared eager to avoid a direct confrontation with Israel or the U.S. and worked via proxies such as Hezbollah in Lebanon, the Houthis in Yemen and Iran-backed groups in Iraq.
But U.S. defense officials warned that Iran could use its own military forces this time to demonstrate a forceful response to Zahedi’s death.
President Biden said on Wednesday that Iran is “threatening to launch a significant attack on Israel.”
“As I told [Israeli] Prime Minister [Benjamin] Netanyahu, our commitment to Israel’s security against these threats from Iran and its proxies is ironclad,” Biden told reporters. “Let me say it again: ironclad. We’re going to do all we can to protect Israel’s security.”
The Biden administration has passed messages to Iran saying that it wasn’t involved in the Israeli strike in Damascus and would hold Iran accountable if it attacked U.S. forces or assets, U.S. officials say. Iran has sent its own messages to the U.S., Iranian officials have said.
Mohammad Jamshidi, the deputy chief of staff to Iran’s president, said in a tweet on April 5 that Tehran had warned the U.S. “not to get dragged in Netanyahu’s trap.”
The U.S. reached out Wednesday to countries in the region to ask them to encourage Iran to avoid escalation, a U.S. official said.
Israeli officials have vowed to strike back if the country is attacked by Iran. The rhetoric on both sides has raised concerns about a wider Middle East war six months after Hamas attacked Israel, leaving more than 1,200 people dead, according to Israel, and prompting an Israeli invasion of the Gaza Strip. That offensive has resulted in the death of more than 33,000 Palestinians, most of them women and children, according to Palestinian health officials, whose figures don’t distinguish between combatants and civilians.
Gen. Michael Erik Kurilla, the commander of U.S. Central Command, which is responsible for U.S. military operations in the Middle East, had planned to travel to Israel before the strike in Damascus, U.S. defense officials said, primarily to iron out logistics for a U.S. temporary pier set to be placed in northern Gaza to expand humanitarian aid deliveries.
He now is expected to leave for Israel this week to also discuss a possible Iranian attack and how the U.S. could respond, the officials said. Kurilla is expected to meet with Israeli Defense Minister Yoav Gallant.
While the Pentagon doesn’t discuss whether it is currently adjusting forces in response to potential threats, U.S. military forces in the region had already been in a heightened state since Hamas’s Oct. 7 attacks on Israel.
Iran’s Supreme Leader Ayatollah Ali Khamenei said Wednesday on X that the strikes in Syria constituted an attack on Iranian soil and that Israel “should be punished, and it will be punished.” Israeli Foreign Minister Israel Katz responded that if Iran attacks Israel from Iranian soil, Israel would retaliate inside Iran.
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Short attack / bear raid - >>> Globe Life Inc. Issues Statement Refuting Short Seller Allegations
PRNewswire
April 11, 2024
https://finance.yahoo.com/news/globe-life-inc-issues-statement-210200680.html
MCKINNEY, Texas, April 11, 2024 /PRNewswire/ -- Globe Life Inc. (NYSE: GL) today issued the following statement refuting the allegations raised in a report issued today by Fuzzy Panda Research:
For over 70 years, our business model has stood the test of the time and we continue to generate sustainable earnings growth that provides long-term value for our shareholders. With over 17 million policies in force, our millions of customers value the protection of the Company's products, and we strive to be there when our customers need us most.
We are disappointed today to see self-motivated short sellers push inflammatory allegations in order to drive down Globe Life's stock price. We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements. The motivations behind this short seller's report are driven solely by short-term profit earned on the backs of the thousands of shareholders, hardworking employees, independent contractor sales agents and customers who know and trust our brand and strong track record. We have successfully defended ourselves against these types of claims. The short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading and defamatory. Globe Life intends to explore all means of legal recourse against the parties responsible.
Globe Life strives to act in accordance with the highest level of ethics and integrity at all levels of the organization and to comply with all government regulations. American Income Life (AIL) has processes in place to review, investigate and address all allegations brought to the Company's attention concerning unethical business practices, sexual harassment and inappropriate conduct and we do not tolerate such behavior.
We intend to more fully rebut these allegations in the near future. Rest assured we are steadfast in our commitment to delivering sustainable earnings growth that provides substantial value for our shareholders. Our dedication to providing the highest quality to our customers remains unwavering.
Globe Life Inc. is a holding company specializing in life and supplemental health insurance for the middle-income market distributed through multiple channels, including direct to consumer and exclusive and independent agencies.
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>>> Globe Life Inc. Issues Statement Refuting Short Seller Allegations
PRNewswire
April 11, 2024
https://finance.yahoo.com/news/globe-life-inc-issues-statement-210200680.html
MCKINNEY, Texas, April 11, 2024 /PRNewswire/ -- Globe Life Inc. (NYSE: GL) today issued the following statement refuting the allegations raised in a report issued today by Fuzzy Panda Research:
For over 70 years, our business model has stood the test of the time and we continue to generate sustainable earnings growth that provides long-term value for our shareholders. With over 17 million policies in force, our millions of customers value the protection of the Company's products, and we strive to be there when our customers need us most.
We are disappointed today to see self-motivated short sellers push inflammatory allegations in order to drive down Globe Life's stock price. We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements. The motivations behind this short seller's report are driven solely by short-term profit earned on the backs of the thousands of shareholders, hardworking employees, independent contractor sales agents and customers who know and trust our brand and strong track record. We have successfully defended ourselves against these types of claims. The short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading and defamatory. Globe Life intends to explore all means of legal recourse against the parties responsible.
Globe Life strives to act in accordance with the highest level of ethics and integrity at all levels of the organization and to comply with all government regulations. American Income Life (AIL) has processes in place to review, investigate and address all allegations brought to the Company's attention concerning unethical business practices, sexual harassment and inappropriate conduct and we do not tolerate such behavior.
We intend to more fully rebut these allegations in the near future. Rest assured we are steadfast in our commitment to delivering sustainable earnings growth that provides substantial value for our shareholders. Our dedication to providing the highest quality to our customers remains unwavering.
Globe Life Inc. is a holding company specializing in life and supplemental health insurance for the middle-income market distributed through multiple channels, including direct to consumer and exclusive and independent agencies.
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Costco - >>> Why Are Gold Bar Sales Surging at Costco?
The New York Times
by Rebecca Carballo
April 11, 2024
https://www.yahoo.com/news/why-gold-bar-sales-surging-175059774.html
Alongside its $1.50 hot dog and soda combo, gallon tubs of mayonnaise and value packs of socks, Costco, the warehouse retailer, has been selling gold bars since October.
Now, Costco is selling up to $200 million worth of gold and silver each month, according to an analysis from Wells Fargo.
Online forums and Reddit threads have cropped up where customers give one another advice on how to purchase the bars before they sell out.
“I’ve gotten a couple of calls that people have seen online that we’ve been selling one-ounce gold bars, yes, but when we load them on the site, they’re typically gone within a few hours,” Richard Galanti, Costco’s executive vice president and chief financial officer, said in an earnings call in September.
Costco started selling gold bars in October.
Costco is now selling one-ounce, 24-karat gold bars, according to its online store. The bars can be purchased only by members, and the price varies based on market rates. As of Thursday, the bars were sold out for members online, but The Wall Street Journal reported that shoppers purchased them for around $2,000 in December.
Costco has also been selling silver coins, advertised as 99.9% pure silver, since January, according to an analyst report from Wells Fargo.
People buy gold in times of turmoil.
The precious metal has set a series of records as it surged to $2,350 per troy ounce, up roughly $300 since the start of March.
Buying gold becomes more common in times of economic turmoil. Although the U.S. economic outlook has improved and inflation has slowed, it remains higher than the targets from the Federal Reserve, said Sadiq S. Adatia, the chief investment officer for BMO Global Asset Management. And on Wednesday, a key inflation rate was revealed to be stronger than expected.
Investors have said they were puzzled about the rally.
Geopolitical concerns could also be a factor in an increasing interest in gold, Adatia said. There has been more interest in gold since Ukraine’s currency collapsed after Russia’s invasion, he said.
For those looking to purchase gold for the first time, Costco provides familiarity and ease, Adatia said.
“They make it convenient,” he said. “People can physically go in and pick it up and that’s it, versus opening up an account and buying gold shares.”
How much is Costco profiting from this?
Probably not too much.
Given its pricing and shipping costs, it’s likely a “very low profit business at best,” analysts with Wells Fargo wrote in a note to clients on Tuesday.
Costco sold more than $100 million of gold during its first quarter, or the three-month period ending on Sept. 30 last year, Galanti said on a December earnings call. However, those sales have likely grown since then and may now be running at $100 million to $200 million per month, which could increase its sales figures by 1%.
“The reason that we looked at this is that it’s becoming a larger contributor to sales for them,” said Edward Kelly, managing director of equity research at Wells Fargo. “It’s not that $100 or $200 million a month is a lot for Costco, but it’s new business and they didn’t have that business last year.”
In the three-month period ending on Dec. 31, Costco’s e-commerce sales grew 18% compared with the same period a year earlier, driven in part by demand for the precious metals, Galanti told investors on an earnings call in March.
Investing in metals can be volatile.
The Commodity Futures Trading Commission has urged caution when buying gold because precious metals can be highly volatile.
“Like other commodities, precious metal prices rise as demand goes up, so when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers,” the agency said in a statement.
The commission likely puts that warning out to signal that it is not a guaranteed investment, said Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report. He recommends the average person invest 3% to 5% of their assets in gold.
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>>> Why Are Gold Bar Sales Surging at Costco?
The New York Times
by Rebecca Carballo
April 11, 2024
https://www.yahoo.com/news/why-gold-bar-sales-surging-175059774.html
Alongside its $1.50 hot dog and soda combo, gallon tubs of mayonnaise and value packs of socks, Costco, the warehouse retailer, has been selling gold bars since October.
Now, Costco is selling up to $200 million worth of gold and silver each month, according to an analysis from Wells Fargo.
Online forums and Reddit threads have cropped up where customers give one another advice on how to purchase the bars before they sell out.
“I’ve gotten a couple of calls that people have seen online that we’ve been selling one-ounce gold bars, yes, but when we load them on the site, they’re typically gone within a few hours,” Richard Galanti, Costco’s executive vice president and chief financial officer, said in an earnings call in September.
Costco started selling gold bars in October.
Costco is now selling one-ounce, 24-karat gold bars, according to its online store. The bars can be purchased only by members, and the price varies based on market rates. As of Thursday, the bars were sold out for members online, but The Wall Street Journal reported that shoppers purchased them for around $2,000 in December.
Costco has also been selling silver coins, advertised as 99.9% pure silver, since January, according to an analyst report from Wells Fargo.
People buy gold in times of turmoil.
The precious metal has set a series of records as it surged to $2,350 per troy ounce, up roughly $300 since the start of March.
Buying gold becomes more common in times of economic turmoil. Although the U.S. economic outlook has improved and inflation has slowed, it remains higher than the targets from the Federal Reserve, said Sadiq S. Adatia, the chief investment officer for BMO Global Asset Management. And on Wednesday, a key inflation rate was revealed to be stronger than expected.
Investors have said they were puzzled about the rally.
Geopolitical concerns could also be a factor in an increasing interest in gold, Adatia said. There has been more interest in gold since Ukraine’s currency collapsed after Russia’s invasion, he said.
For those looking to purchase gold for the first time, Costco provides familiarity and ease, Adatia said.
“They make it convenient,” he said. “People can physically go in and pick it up and that’s it, versus opening up an account and buying gold shares.”
How much is Costco profiting from this?
Probably not too much.
Given its pricing and shipping costs, it’s likely a “very low profit business at best,” analysts with Wells Fargo wrote in a note to clients on Tuesday.
Costco sold more than $100 million of gold during its first quarter, or the three-month period ending on Sept. 30 last year, Galanti said on a December earnings call. However, those sales have likely grown since then and may now be running at $100 million to $200 million per month, which could increase its sales figures by 1%.
“The reason that we looked at this is that it’s becoming a larger contributor to sales for them,” said Edward Kelly, managing director of equity research at Wells Fargo. “It’s not that $100 or $200 million a month is a lot for Costco, but it’s new business and they didn’t have that business last year.”
In the three-month period ending on Dec. 31, Costco’s e-commerce sales grew 18% compared with the same period a year earlier, driven in part by demand for the precious metals, Galanti told investors on an earnings call in March.
Investing in metals can be volatile.
The Commodity Futures Trading Commission has urged caution when buying gold because precious metals can be highly volatile.
“Like other commodities, precious metal prices rise as demand goes up, so when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers,” the agency said in a statement.
The commission likely puts that warning out to signal that it is not a guaranteed investment, said Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report. He recommends the average person invest 3% to 5% of their assets in gold.
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>>> Why Are Gold Bar Sales Surging at Costco?
The New York Times
by Rebecca Carballo
April 11, 2024
https://www.yahoo.com/news/why-gold-bar-sales-surging-175059774.html
Alongside its $1.50 hot dog and soda combo, gallon tubs of mayonnaise and value packs of socks, Costco, the warehouse retailer, has been selling gold bars since October.
Now, Costco is selling up to $200 million worth of gold and silver each month, according to an analysis from Wells Fargo.
Online forums and Reddit threads have cropped up where customers give one another advice on how to purchase the bars before they sell out.
“I’ve gotten a couple of calls that people have seen online that we’ve been selling one-ounce gold bars, yes, but when we load them on the site, they’re typically gone within a few hours,” Richard Galanti, Costco’s executive vice president and chief financial officer, said in an earnings call in September.
Costco started selling gold bars in October.
Costco is now selling one-ounce, 24-karat gold bars, according to its online store. The bars can be purchased only by members, and the price varies based on market rates. As of Thursday, the bars were sold out for members online, but The Wall Street Journal reported that shoppers purchased them for around $2,000 in December.
Costco has also been selling silver coins, advertised as 99.9% pure silver, since January, according to an analyst report from Wells Fargo.
People buy gold in times of turmoil.
The precious metal has set a series of records as it surged to $2,350 per troy ounce, up roughly $300 since the start of March.
Buying gold becomes more common in times of economic turmoil. Although the U.S. economic outlook has improved and inflation has slowed, it remains higher than the targets from the Federal Reserve, said Sadiq S. Adatia, the chief investment officer for BMO Global Asset Management. And on Wednesday, a key inflation rate was revealed to be stronger than expected.
Investors have said they were puzzled about the rally.
Geopolitical concerns could also be a factor in an increasing interest in gold, Adatia said. There has been more interest in gold since Ukraine’s currency collapsed after Russia’s invasion, he said.
For those looking to purchase gold for the first time, Costco provides familiarity and ease, Adatia said.
“They make it convenient,” he said. “People can physically go in and pick it up and that’s it, versus opening up an account and buying gold shares.”
How much is Costco profiting from this?
Probably not too much.
Given its pricing and shipping costs, it’s likely a “very low profit business at best,” analysts with Wells Fargo wrote in a note to clients on Tuesday.
Costco sold more than $100 million of gold during its first quarter, or the three-month period ending on Sept. 30 last year, Galanti said on a December earnings call. However, those sales have likely grown since then and may now be running at $100 million to $200 million per month, which could increase its sales figures by 1%.
“The reason that we looked at this is that it’s becoming a larger contributor to sales for them,” said Edward Kelly, managing director of equity research at Wells Fargo. “It’s not that $100 or $200 million a month is a lot for Costco, but it’s new business and they didn’t have that business last year.”
In the three-month period ending on Dec. 31, Costco’s e-commerce sales grew 18% compared with the same period a year earlier, driven in part by demand for the precious metals, Galanti told investors on an earnings call in March.
Investing in metals can be volatile.
The Commodity Futures Trading Commission has urged caution when buying gold because precious metals can be highly volatile.
“Like other commodities, precious metal prices rise as demand goes up, so when economic anxiety or instability is high, the people who typically profit from precious metals are the sellers,” the agency said in a statement.
The commission likely puts that warning out to signal that it is not a guaranteed investment, said Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report. He recommends the average person invest 3% to 5% of their assets in gold.
<<<
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NetEase - >>> ‘Warcraft’ Returns to China as Blizzard and NetEase Settle Spat
Bloomberg
by Sabrina Mao and Zheping Huang
April 9, 2024
https://finance.yahoo.com/news/warcraft-returns-china-blizzard-netease-010000423.html
(Bloomberg) -- NetEase Inc. reached a new agreement to distribute games in China for Microsoft Corp.’s Blizzard Entertainment, salvaging a 15-year relationship and reviving titles like World of Warcraft for the world’s biggest gaming market.
With the deal, famed franchises like StarCraft, Diablo, Hearthstone and Overwatch will once again be live for players in China. The Hangzhou-based publishing giant and Microsoft’s Activision Blizzard subsidiary halted a longtime partnership in January of last year after failing to agree on an extension, causing a 15% plunge in NetEase shares in Hong Kong.
Separately, Microsoft’s gaming division and NetEase have agreed to explore bringing new NetEase titles to Xbox consoles and other platforms, the companies said in a statement.
“We are thrilled to embark on the next chapter, built on trust and mutual respect, to serve our users in this unique community that we’ve built together,” NetEase Chief Executive Officer William Ding said in the statement. The expiration of the previous deal descended into acrimony when the two sides alleged bad-faith negotiations for a renewal of the terms.
Blizzard suspended most online game services and sales in mainland China when the prior pact expired more than a year ago, cutting off a lucrative collaboration for both parties. Its major release in June 2023 — Diablo IV, which got off to a hot start internationally — hasn’t been officially available in China. The companies now say Blizzard games “will return to the market sequentially” starting in the summer, with further details to be provided at a later date.
Activision Blizzard was acquired in October by Microsoft in a $69 billion deal that set a record for takeovers in the video-game industry. The combined entity ranks No. 3 among global games publishers, behind Tencent Holdings Ltd. and Sony Group Corp., and was expected to seek a rapprochement with NetEase.
First signed in 2008 and renewed in 2019, the NetEase-Blizzard distribution accord has benefited both companies, feeding NetEase with globally recognized hits and giving its US partner a gateway into the world’s biggest PC and mobile gaming arena.
Before NetEase, Blizzard distributed World of Warcraft in China through Shanghai venture The9 from its release in 2004 through 2008. But that partnership ended in a rift, with Chinese players unable to access the game for more than a month. China’s No. 2 gaming giant swooped in as Blizzard sought to find a new local publisher, first signing a deal to run StarCraft II and Warcraft III, then taking over World of Warcraft, which at the time was the most popular online game in China.
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NetEase - >>> ‘Warcraft’ Returns to China as Blizzard and NetEase Settle Spat
Bloomberg
by Sabrina Mao and Zheping Huang
April 9, 2024
https://finance.yahoo.com/news/warcraft-returns-china-blizzard-netease-010000423.html
(Bloomberg) -- NetEase Inc. reached a new agreement to distribute games in China for Microsoft Corp.’s Blizzard Entertainment, salvaging a 15-year relationship and reviving titles like World of Warcraft for the world’s biggest gaming market.
With the deal, famed franchises like StarCraft, Diablo, Hearthstone and Overwatch will once again be live for players in China. The Hangzhou-based publishing giant and Microsoft’s Activision Blizzard subsidiary halted a longtime partnership in January of last year after failing to agree on an extension, causing a 15% plunge in NetEase shares in Hong Kong.
Separately, Microsoft’s gaming division and NetEase have agreed to explore bringing new NetEase titles to Xbox consoles and other platforms, the companies said in a statement.
“We are thrilled to embark on the next chapter, built on trust and mutual respect, to serve our users in this unique community that we’ve built together,” NetEase Chief Executive Officer William Ding said in the statement. The expiration of the previous deal descended into acrimony when the two sides alleged bad-faith negotiations for a renewal of the terms.
Blizzard suspended most online game services and sales in mainland China when the prior pact expired more than a year ago, cutting off a lucrative collaboration for both parties. Its major release in June 2023 — Diablo IV, which got off to a hot start internationally — hasn’t been officially available in China. The companies now say Blizzard games “will return to the market sequentially” starting in the summer, with further details to be provided at a later date.
Activision Blizzard was acquired in October by Microsoft in a $69 billion deal that set a record for takeovers in the video-game industry. The combined entity ranks No. 3 among global games publishers, behind Tencent Holdings Ltd. and Sony Group Corp., and was expected to seek a rapprochement with NetEase.
First signed in 2008 and renewed in 2019, the NetEase-Blizzard distribution accord has benefited both companies, feeding NetEase with globally recognized hits and giving its US partner a gateway into the world’s biggest PC and mobile gaming arena.
Before NetEase, Blizzard distributed World of Warcraft in China through Shanghai venture The9 from its release in 2004 through 2008. But that partnership ended in a rift, with Chinese players unable to access the game for more than a month. China’s No. 2 gaming giant swooped in as Blizzard sought to find a new local publisher, first signing a deal to run StarCraft II and Warcraft III, then taking over World of Warcraft, which at the time was the most popular online game in China.
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>>> SBA Communications Corporation (NASDAQ:SBAC) -- Average Analyst Price Target: $264.63
https://www.insidermonkey.com/blog/5-best-real-estate-and-realty-stocks-to-buy-according-to-analysts-1264847/4/
Upside Potential: 27.05%
Number of Hedge Fund Holders: 41
SBA Communications Corporation (NASDAQ:SBAC) is a telecom tower REIT based in Boca Raton, Florida. The company is an independent owner of wireless communications infrastructure such as towers, buildings, and rooftops.
In the fourth quarter, 41 hedge funds were long SBA Communications Corporation (NASDAQ:SBAC), with a total stake value of $1.5 billion.
An Outperform rating and a $265 price target were maintained on SBA Communications Corporation (NASDAQ:SBAC) on February 27 by BMO Capital.
Baron Funds mentioned SBA Communications Corporation (NASDAQ:SBAC) in its third-quarter 2023 investor letter:
“We reduced our stake in long-term holding SBA Communications Corporation (NASDAQ:SBAC), which owns and operates cellular towers, on concerns that higher interest rates will increase its debt servicing costs and indications that its primary customers will spend less on upgrading their cellular networks.”
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>>> VICI Properties Inc. (NYSE:VICI) -- Average Analyst Price Target: $34.59
https://www.insidermonkey.com/blog/5-best-real-estate-and-realty-stocks-to-buy-according-to-analysts-1264847/
Upside Potential: 16.94%
Number of Hedge Fund Holders: 44
VICI Properties Inc. (NYSE:VICI) is an experiential REIT based in New York. It owns one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations.
Mizuho maintains a Buy rating and a $33 price target on VICI Properties Inc. (NYSE:VICI) as of January 10.
There were 44 hedge funds long VICI Properties Inc. (NYSE:VICI) in the fourth quarter, with a total stake value of $960.1 million.
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>>> American Tower Corporation (NYSE:AMT) -- Average Analyst Price Target: $231.93
https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html
Upside Potential: 14.95%
Number of Hedge Fund Holders: 56
American Tower Corporation (NYSE:AMT) is another telecom tower REIT on our list of the best real estate stocks to buy. It is based in Boston, Massachusetts, and is an independent owner, operator, and developer of multitenant communications real estate.
An Overweight rating and a $230 price target were maintained on American Tower Corporation (NYSE:AMT) on February 28 by JPMorgan analysts.
We saw 56 hedge funds long American Tower Corporation (NYSE:AMT) in the fourth quarter, with a total stake value of $3.2 billion.
Baron Funds mentioned American Tower Corporation (NYSE:AMT) in its fourth-quarter 2023 investor letter:
“Early in 2023, we sold the majority of our position in American Tower Corporation (NYSE:AMT), a global operator of over 200,000 wireless towers, and even further reduced our modest position in the third quarter of 2023. We had concluded in late 2022 and early 2023 that growth expectations were too high given forthcoming headwinds from significantly higher financing costs (20%-plus exposure to floating rate debt), upcoming debt maturities, continued payment shortfalls from a key tenant in India, foreign exchange headwinds, and a reduction in mobile carrier capital expenditures.
Following a sharp decline in American Tower’s shares in the first nine months of 2023, we began rebuilding our position because we believed that the company’s shares had become more attractively valued, growth headwinds were better understood, and the potential monetization event of its India business would ultimately be value accretive to its business. Further, we believe that 2023 will mark the trough in earnings growth for American Tower and growth should reaccelerate in the next few years.”
Like KE Holdings Inc (NYSE:BEKE), Crown Castle International Corp. (NYSE:CCI), and Realty Income Corporation (NYSE:O), American Tower Corporation (NYSE:AMT) is among the best real estate stocks to buy now.
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>>> AvalonBay Communities, Inc. (NYSE:AVB) -- Average Analyst Price Target: $194.70
https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html
Upside Potential: 9.3%
Number of Hedge Fund Holders: 29
AvalonBay Communities, Inc. (NYSE:AVB) had 29 hedge funds long its stock in the fourth quarter, with a total stake value of $234.7 million.
Morgan Stanley upgraded AvalonBay Communities, Inc. (NYSE:AVB) from Equal Weight to Overweight on February 26, alongside placing a $191.5 piece target on the stock.
AvalonBay Communities, Inc. (NYSE:AVB) is a multi-family residential REIT based in Arlington, Virginia. The company owns or holds a direct or indirect ownership interest in 299 apartment communities containing 90,669 apartment homes in 12 states and the District of Columbia.
At the end of the fourth quarter, AEW Capital Management was the largest shareholder in AvalonBay Communities, Inc. (NYSE:AVB), holding 769,788 shares in the company.
Baron Funds mentioned AvalonBay Communities, Inc. (NYSE:AVB) in its third-quarter 2023 investor letter:
“In the third quarter, we maintained our exposure to apartment REIT AvalonBay Communities, Inc. (NYSE:AVB). We believe public valuations remain discounted relative to the private market. Tenant demand remains healthy and rent growth has modestly improved since the first quarter of 2023. Rental apartments continue to benefit from the current homeownership affordability challenges. Multi-family REITs provide partial inflation protection to offset rising costs due to leases that can be reset at higher rents, in some cases, annually. We continue to closely monitor new supply deliveries and job losses in key geographic markets.”
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>>> Prologis, Inc. (NYSE:PLD) -- Average Analyst Price Target: $144.94
https://finance.yahoo.com/news/14-best-real-estate-realty-131053697.html
Upside Potential: 7.68%
Number of Hedge Fund Holders: 46
Prologis, Inc. (NYSE:PLD) is an industrial REIT based in San Francisco, California. The company is a global leader in logistics real estate with a focus on high-barrier, high-growth markets.
In total, 46 hedge funds were long Prologis, Inc. (NYSE:PLD) in the fourth quarter, with a total stake value of $678.3 million.
As of February 16, RBC Capital maintains an Outperform rating and a $145 price target on Prologis, Inc. (NYSE:PLD).
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