Former President Donald Trump and New York Attorney General Letitia James reached an agreement on April 22 regarding his $175 million bond in his New York civil case, imposing additional restrictions while resolving concerns about the funds’ security.
The attorney general argued that Knight Specialty Insurance Company (KSIC) lacked a “certificate of qualification,” and that President Trump still had access to the Charles Schwab account pledged to the insurer as collateral.
Judge Arthur Engoron accepted the April 22 agreement, which gave KSIC exclusive control over the account. The state made the offer after Chris Kise, President Trump’s attorney, provided oral argument.
The attorney general established five bond conditions this morning that allow former President Trump to use a non-New York company as a traditional license surety to cover the $175 million he was ordered to pay.
KSIC is unauthorized by the New York Department of Financial Services, which bond experts see as a victory for Mr. Trump.
“[The company] is probably charging Trump less and they accepted a pledge rather than actually receiving $175 million in cash,” said Bruce Lederman, a commercial and real estate litigator who has dealt in bonds for more than 40 years.
All of Mr. Trump’s attorneys agreed to the settlement stipulations, which are expected to be memorialized by the end of the week.
The five bond conditions include retaining the collateral in a Schwab account and restricting KSIC from trading or withdrawing any of the funds for anything other than payment of the bond.
“The state was not looking to be vindictive,” Mr. Lederman told The Epoch Times.
“They are looking simply to be guaranteed that they are getting paid if they win the appeal and they were sufficiently satisfied that if these five conditions were met, they would get paid.”
Another settlement condition is that KSIC must provide the state with monthly statements and the pledge agreement cannot be amended without court approval.
The fifth condition of the settlement is requires a point of contact for service outside of KSIC. The parties agreed the surety’s lawyer would be the point of service. Mr. Lederman noted that KSIC “is not a New York company. So if they don’t pay, they need someone other than KCIS to sue.”
He added that “the attorney for the surety will accept the lawsuit if Trump loses on appeal and doesn’t pay.”
James’ Criticism
The bond issued by KSIC is meant to secure President Trump’s compliance with a $454.2 million judgment won by Ms. James.
Ms. James had challenged the sufficiency of President Trump’s bond and cast doubt on the stability of the insurance company.
Amit Shah, president of the insurance company, demanded the court compel the attorney general to show cause, or prove the allegation that the insurance company is not sufficient.
Mr. Shah submitted a sworn affidavit explaining that KSIC now has control over a bank account of President Trump’s that will maintain $175 million cash for the duration of the appeal. The insurance company entered into a collateral agreement with the Donald J. Trump Revocable Trust. Mr. Shah submitted documents establishing that his company is in “good standing” and was approved for excess line eligibility in New York in June 2021.
KSIC is under The Hankey Group of financial companies, which includes the affiliate Westlake Financial Services LLC. The attorney general argued that Westlake was found to have “violated numerous federal laws by pressuring borrowers through the use of illegal debt collection tactics, including using phony caller ID information, falsely threatening to refer borrowers for investigation or criminal prosecution” in 2015 by the U.S. Consumer Financial Protection Bureau. The company was fined and provided $44 million in restitution to consumers.
President Trump defended the bond outside the courtroom at his criminal trial.
“We put up cash and the number is 175,” President Trump said.
“She shouldn’t be complaining about the bonding company. The bonding company would be good for it because I put up the money. I have plenty of money to put up.”
After the hearing, President Trump’s lawyer in the case, Alina Habba, fumed at the judge’s incompetence, “he doesn’t even understand basic principles of finance,” and at AG James’ “this is where your taxpayer dollars are going America…witch hunt after witch hunt after witch hunt…”
Habba continued to excoriate the whole farce:
“…in one hour, that judge and the attorney general realized they had no idea what they were talking about… and we came to an agreement that everything would be the same…”
Alina Habba in the last hour.
This is hilarious.
Judge Engoron doesn’t even understand Money Market funds.
“Gross Abuse Of Power” – Two SEC Lawyers Resign After Judge’s Rebuke In Anti-Crypto Case
Score one for ‘the law’…
In mid-March, a federal judge in Utah took the extremely unusual step of sanctioning the SEC, saying that the regulator abused its authority in a case against crypto platform Digital Licensing Inc., known as DEBT Box.
The SEC’s conduct “constitutes a gross abuse of the power entrusted to it by Congress and substantially undermined the integrity of these proceedings and the judicial process,” Robert Shelby, a federal district court judge in Salt Lake City, said in an 80-page legal filing on Monday.
He also ordered the agency to pay DEBT Box’s attorney’s fees and other costs related to the restraining order that the regulator had sought against the crypto platform.
The SEC sued DEBT Box in July 2023, accusing the crypto platform of defrauding investors of at least $49 million. The same month, Shelby froze the company’s assets and put the company into receivership at the SEC’s request.
However, the freeze was later reversed after the court found that the SEC may have made “materially false and misleading representations” in the process.
A month later, and Bloomberg reports, according to people familiar with the matter, that two SEC lawyers – Michael Welsh and Joseph Watkins – stepped down this month after an SEC official told them that they would be terminated if they stayed.
The pair were lead attorneys on a case against DEBT Box.
The judge had faulted arguments from Welsh, the SEC’s lead trial attorney on the matter, and evidence provided by Watkins and his team.
Watkins was the agency’s lead investigative attorney on the case.
In one instance, Welsh told the judge that Draper, Utah-based DEBT Box was closing bank accounts and transferring assets overseas.
The court found that this wasn’t happening.
An SEC investigator later said that a miscommunication led to the error, and Welsh apologized to the court.
SEC enforcement chief Gurbir Grewal apologized to the court for his department’s conduct.
Gurbir Grewal
He said that he had appointed new attorneys to the case and mandated training for the agency’s enforcement staff.
Last week, attorneys for DEBT Box and other parties filed motions requesting that the SEC pay more than $1.5 million in fees and other costs incurred in the case.
Stocks Surge In Massive Squeeze As Traders Frontrun End of Buyback Blackout Period
After the worst week for stocks since the March 2023 bank crisis, and after 6 consecutive weeks of Nasdaq declines, not to mention dealer gamma collapsing and CTAs still facing billions in forced selling, market sentiment was near-apocalyptic… at least until we reminded traders this morning that the cavalry was, indeed, coming when – just as spoos bottomed a little over 5,000 – we posted that the buyback blackout period that had snuffed bullish sentiment a month ago, was to end this Friday.
The rest, as they say, is history and stocks are now about 60 points higher at session highs…
… driven by the biggest short squeeze in a month.
So now that the market is once again obsessing over the return of buybacks, here is what to expect courtesy of the Goldman buyback desk (full note available to pro subs).
This past week in desk volumes has been more active as the broader market continued to fall. Though we are still in an estimated blackout window, with market trending lower, we noticed corporate 10b5-1 plans were more aggressive at lower price limits.
Last week’s desk volumes finished 1.4x vs 2023 YTD ADTV and 0.7x vs 2022YTD ADTV skewed toward Financials, Consumer Discretionary, and Industrials.
Last week was light for new repurchase authorizations. We saw 8 programs authorized this week for $3.9B. Largest programs launched last week include:
This upcoming week, out of the larger historical repurchasers, we expect to see GOOGL, RTX, GM, META, XOM, MSFT, V, CMCSA, CAT, TMUS report earnings.
On the authorization front, 2024 YTD authorizations stand at $317.4B vs $377.0B 2023 YTD authorizations.
Goldman expects to see authorizations this year finish higher estimating 2024 authorizations to finish $1.15T (up ~16%).
More in the full Goldman note available to pro subs.
Tesla Q1 Preview: Investors Brace For “Worst Results In 7 Years”, AI Pivot, Cybertruck, Robotaxis In Focus
Tesla is slated to report earnings tomorrow and, as FT notes, investors are bracing for the “worst results in 7 years” from the EV manufacturer.
Analysts predict that Tesla will post revenues of $22.3 billion for Q1, representing a year-over-year decline of 4.4%. This anticipated drop in revenue aligns with poor Q1 delivery data, where deliveries decreased by 8.5% year-over-year, marking the first annual decline in deliveries since 2020.
Expectations for Tesla’s 2024 full year earnings are lower than those of 2023. Current forecasts by FactSet suggest Tesla’s EPS will be $2.67 for 2024, reflecting a decrease of over 14% from the previous year’s $3.12. Furthermore, since the close of 2023, consensus estimates for Tesla’s 2024 EPS have decreased by 30%.
As we’ve noted, Tesla missed its Q1 delivery guidance and, so far in 2024, its stock has been decimated. For Q1 2024, Tesla produced over 433,000 vehicles and delivered 387,000. Tesla’s exact delivery number for the quarter was 386,810 vehicles, far below Bloomberg estimates at the time of 449,080.
The company blamed the delivery miss on “the early phase of the production ramp of the updated Model 3 at our Fremont factory and factory shutdowns resulting from shipping diversions caused by the Red Sea conflict and an arson attack at Gigafactory Berlin.”
James Anderson, a managing partner at Lingotto Investment Management summed it up, telling FT: “It’s always been a margin versus volume debate for them, and this is the latest twist. Whether it is a good twist depends vitally and decisively on what the shift to autonomous brings.”
Deutsche Bank analyst Emmanuel Rosner commented to Bloomberg last week: “The stock will need to undergo a potentially painful transition in ownership base, with investors previously focused on Tesla’s EV volume and cost advantage potentially throwing in the towel.”
Here’s some key items investors will be looking for detail on during Tesla’s Q1 call:
Musk’s Pay Plan
Tesla submitted a proxy statement for its June 13 shareholder meeting last week, requesting shareholders to approve relocating the company’s state of incorporation to Texas and to ratify CEO Elon Musk’s 2018 pay package, which was recently rescinded by a Delaware judge.
The compensation case, which was launched by shareholder Richard Tornetta, argued that Tesla’s board lacked independence in crafting Musk’s pay, a view the judge supported.
The court verdict required Tesla’s board to put together a new executive compensation plan, at least temporarily overhauling the record-setting package previously awarded to Musk in 2018.
A large portion of Musk’s net worth hangs in the balance, with the options valued at about $51.1 billion. Excluding these options, his net worth would diminish to $154.3 billion, positioning him as the world’s third wealthiest individual, a step down from his prolonged stint at the top, per the Bloomberg Billionaires Index.
Board Chairperson Robyn Denholm wrote last week: “Elon has not been paid for any of his work for Tesla for the past six years. That strikes us — and the many stockholders from whom we already have heard — as fundamentally unfair.”
Per Reuters, at current prices, the package currently is worth about $40 billion.
Price Cuts
Investors will be looking for continued impact on financials and commentary on the company’s ever-changing pricing strategy.
Over the weekend, Tesla reduced the prices of its electric vehicles in the U.S., China, and Europe. In the U.S., the starting prices are now $42,990 for the Model Y, $72,990 for the Model S, and $79,990 for the Model X, with the latter two models eligible for a $7,500 Inflation Reduction Act credit. Prices for the Tesla Cybertruck and Model 3 remain the same, with production still low for both models. This follows Tesla’s recent elimination of discounts on existing U.S. inventory, effectively raising Model Y prices from the previous week.
Amid efforts to boost sales in 2023 and 2024, Tesla has aggressively cut prices and offered discounts. This has led to a significant drop in auto gross profit margins, which fell below 20% from a peak of 30% in Q4 2021 during the industry chip shortage.
Musk commented on the price cuts over the weekend: “Other cars change prices constantly and often by wide margins via dealer markups and manufacturing/dealer incentives. Tesla prices must change frequently in order to match production with demand.”
Tesla also cut prices in China. Tesla reduced prices for the Model Y and 3 in China by 14,000 yuan ($1,972) this Sunday. The new price for the entry Model Y is 249,900 yuan ($35,194), and for the base Model 3, it’s 231,900 yuan ($32,659).
Prices for the imported Model S and Model X have also been cut, starting at 684,900 yuan ($96,457) and 724,900 yuan ($102,090) respectively, with reductions of 15.3% and 19.4%.
After a brief price increase and the expiration of several incentives on April 1, Tesla China responded by offering 0% interest loans on its EVs, which effectively compensated for the recent price hike and lost incentives. Tesla also cut prices by $2,443 per car on the Model 3 in Germany, Norway, France, and the Netherlands, impacting 42.5% of its European sales.
In a note out over the weekend, analyst Gordon Johnson of GLJ Research said it was the firms “strong opinion that the full extent of this weekend’s ‘nightmarish’ price cuts are not being fully appreciated by Mr. Market,” and he called Tesla “the best short-play in the stock market today”.
Robotaxis
Investors will also be looking for details on how Musk’s plans for a Robotaxi reveal are coming along.
Over the weekend it was reported by Bloomberg that Musk setting an August 8, 2024 date for a Robotaxi reveal has “plunged the company into chaos”.
Bloomberg noted that Tesla has been contemplating an autonomous taxi service for about eight years but hasn’t developed the necessary infrastructure or obtained regulatory approval for public road tests. Consequently, Musk has delayed plans for a $25,000 mass-market vehicle, which many investors and some insiders see as vital for Tesla’s future.
Following reports of this strategic shift, key executives such as Drew Baglino, who led Tesla’s powertrain engineering and energy business for 18 years, have departed from the company.
Full Self Driving/Deferred Revenue
As Investors Business Daily noted this weekend, Tesla has now renamed its Full Self-Driving system from FSD Beta to supervised FSD, potentially allowing the company to recognize more deferred FSD revenue, which could boost EPS.
Additionally, starting in April, Tesla began offering free FSD trials with new vehicle purchases and over the weekend, Tesla reduced the annual price of FSD by 33% to $8,000, following a reduction in the monthly subscription fee from $199 to $99 two weeks earlier.
Cybertruck’s Future
Investors will also be looking for details about the Cybertruck, which Tesla was forced to recall en masse last week.
Tesla is recalling the Cybertruck due to a defect where the pedal pad can dislodge and get trapped, potentially causing the accelerator to remain stuck in the “on” position.
This issue, which has occurred at least twice, arises when the accelerator is forcefully pressed. Despite this, the truck can still be stopped by pressing the brake pedal, and no injuries or crashes have been reported. The defect was traced back to an unapproved use of soap as a lubricant during assembly, which left slippery residues behind, leading to the problem, the company said.
The press surrounding the Cybertruck thus far has been ugly, with Mashable saying: “Tesla’s latest vehicle was widely mocked even before its accelerator pedal problem. Now it’s a national joke.”
Musk will have a chance to lay out any new plans for the truck, which he himself has referred to as a “production nightmare”, on the company’s call.
Workforce Reduction
It was also reported over the weekend that Elon Musk considered reducing the company’s workforce by 20%, aligning with the decrease in vehicle deliveries between the fourth quarter of 2023 and the first quarter of 2024.
He instead settled for 10%. Both investors and employees alike will be waiting to hear any additional comments from Musk about his plans for continuing to reduce Tesla’s workforce.
Gigafactory Expansion
Finally, investors will be looking for more information on Tesla’s planned expansion into geographies like India.
Last week it was reported that Musk had delayed a trip to India, where he was scheduled to meet Prime Minister Narendra Modi and announce a $2-3 billion investment for a new plant, citing pressing commitments at Tesla. The visit, initially set for April 21 and 22, has been postponed due to the demands of the upcoming quarterly earnings report, Musk revealed in a post on X
“Unfortunately, very heavy Tesla obligations require that the visit to India be delayed, but I do very much look forward to visiting later this year,” Musk said last week.
—
We’ll know more about those demands in hours, as Tesla is slated to post earnings after the bell on Tuesday.
“Hate has no place in our city, and I have instructed the NYPD to investigate any violation of law they receive a report about and will arrest anyone found to be breaking the law.”
He went on:
“We will not be a city of lawlessness, and those professional agitators seeking to seize the ongoing conflict in the Middle East to sow chaos and division will not succeed.”
But added:
I do, however, want to be abundantly clear: Columbia University is a private institution on private property, which means the NYPD cannot have a presence on campus unless specifically requested by senior university officials.
For the safety of all New Yorkers, I urge Columbia’s senior administration officials to improve and maintain an open line of communication with the NYPD to ensure the safety of all students and staff on campus.
Adams concluded, providing ‘context’:
“As mayor of the city with the largest Jewish community in the world outside of Israel, the pain these protests are causing Jews across the globe is not lost on me, especially as we start Passover tomorrow evening.
I also see and hear the pain of those protesting in support of innocent lives being lost in Gaza.”
Additionally, as The Epoch Times’ Emel Akan reports,The White House also issued a statement on Sunday condemning anti-Israel protests at Columbia University following reports that the school’s Orthodox rabbi advised Jewish students to stay away from campus for their safety.
“While every American has the right to peaceful protest, calls for violence and physical intimidation targeting Jewish students and the Jewish community are blatantly Antisemitic, unconscionable, and dangerous,” Andrew Bates, White House deputy press secretary, stated on the social media platform X (formerly Twitter).
President Joe Biden issued a separate message for Passover, a Jewish holiday that starts on April 22.
The president’s message highlighted the “alarming surge of Antisemitism” in U.S. schools, communities, and online. However, he did not explicitly refer to incidents at Columbia University.
“Silence is complicity. Even in recent days, we’ve seen harassment and calls for violence against Jews. This blatant Antisemitism is reprehensible and dangerous—and it has absolutely no place on college campuses, or anywhere in our country,” the president said.
“My administration will continue to speak out and aggressively implement the first-ever National Strategy to Counter Antisemitism, putting the full force of the federal government behind protecting the Jewish community,” he added.
The statements came after the Orthodox Rabbi at Columbia University and Barnard College sent a WhatsApp message to more than 290 Jewish students urging them to go home.
CNN anchor Jake Tapper shared a copy of the message on X.
“What we are witnessing in and around campus is terrible and tragic. The events of the last few days, especially last night, have made it clear that Columbia University’s Public Safety and the NYPD cannot guarantee Jewish students’ safety in the face of extreme antisemitism and anarchy,” Rabbi Elie Buechler wrote to students in Yavneh, the Orthodox student community.
“It deeply pains me to say that I would strongly recommend you return home as soon as possible and remain home until the reality in and around campus has dramatically improved.”
Protests erupted at the 270-year-old university on April 17 in response to Israel’s military actions against Hamas in Gaza.
Police arrested more than 100 people on campus on April 18 after protesters set up an encampment on the school’s lawns. Protesters resumed their demonstrations the next day, despite mass suspensions and arrests.
Videos circulated of a man outside the campus stating:
“Never forget the seventh of October,” and “That will happen not one more time, not five more times, not 10 more times, not 100 more times, not 1,000 more times, but 10,000 times!”
Another video showed a woman protester wrapped in a Palestinian scarf, holding a sign reading, “Al Qassam’s next targets,” with an arrow pointing to a group of students waving Israeli flags and singing the Israeli national anthem. Al Qassam refers to the military wing of the Hamas terrorist organization.
Extremists part of the @Columbia CHAZ-style occupation chant support for Hamas terror:
“Al-Qassam, you make us proud, take another soldier out”
“We say justice, you say how? Burn Tel Aviv to the ground”
The White House condemned these messages, calling them “despicable.”
“Echoing the rhetoric of terrorist organizations, especially in the wake of the worst massacre committed against the Jewish people since the Holocaust, is despicable. We condemn these statements in the strongest terms,” Mr. Bates said.
A congressional committee last week accused Columbia University President Nemat Minouche Shafik of failing to protect Jewish students on campus.
Ms. Shafik told lawmakers that the university was facing a “moral crisis” due to anti-Semitism on campus.
She highlighted the university’s commitment to addressing this issue by taking decisive actions against suspected perpetrators.
The ADL is there of course…
I spent yesterday afternoon at @Columbia, walking the streets, meeting Jewish students, and observing the situation firsthand. I was shocked by what I found. 🧵 pic.twitter.com/TzlIWw6ykE
Trump Urges Supporters To “Peacefully Protest” As Day 1 ‘Opening Arguments’ In Hush-Money Case Concludes Early
Day one of former President Donald Trump’s so-called “hush-money” trial concluded early on Monday after Judge Juan Merchan said that an alternate juror can visit a dentist appointment (despite previously telling Trump he would have attend every day without fail – missing his son’s graduation – or face jail).
Judge Merchan had previously planned to adjourn the trial at 2 p.m. ET due to the Passover holiday. But he said Monday that it would adjourn at 12:30 p.m.
He previously said he would end at 2 p.m. on Tuesday for the holiday.
Jack Phillips reports, via The Epoch Times, that the early adjournment came after prosecutors and defense lawyers make their respective cases for why the former president should be convicted or acquitted. In the case, President Trump is accused of falsifying business payments during the 2016 campaign by allegedly paying a former lawyer, Michael Cohen, to bury negative stories.
At issue were claims from an adult film performer, Stormy Daniels, whose real name is Stephanie Clifford, that she was engaged in a relationship with the former president. President Trump has denied her claims and has pled not guilty.
‘Use Your Common Sense’
An attorney for the former president spoke to the jury, asking them to “use your common sense” when they assess the case.
“We’re New Yorkers. It’s why we’re here,” Todd Blanche said.
“There will be a very swift not guilty verdict” if they decide based on the evidence involved, he said.
“You told all of us, you told the court, you told me, you will put aside whatever views you have of President Trump,” Mr. Blanche told the jury as he wrapped up his arguments.
“The 34 counts, ladies and gentlemen, are really just pieces of paper,” Mr. Blanche said of the indictment. “None of this was a crime.”
Mr. Blanche was critical of Ms. Clifford, saying that she has earned income and fame from her allegations about an alleged affair that occurred in 2006.
“She also wrote a book. She was paid for a documentary,” Mr. Blanche says of Ms. Clifford, adding that courts have sided with President Trump’s legal disputes with Ms. Clifford.
As for Mr. Cohen, Mr. Blanche accused him of profiting off his criticism of President Trump.
“His entire financial livelihood depends on President Trump’s destruction,” he said of Mr. Cohen.
“You cannot make a serious decision about President Trump relying on the words of Michael Cohen.”
“He has a goal, an obsession with getting President Trump,” Mr. Blanche said of Mr. Cohen, who is expected to be a witness. “I submit to you that he cannot be trusted.”
But prosecutors claimed on April 22 that the case wasn’t just about the payments to Mr. Cohen. They argued that it constituted election fraud.
‘Orchestrated a Criminal Scheme’
Prosecutor Matthew Colangelo, in a bid to reframe the narrative, said that President Trump, Mr. Cohen, and former National Enquirer boss David Pecker “formed a conspiracy … to influence the presidential election.”
“The defendant, Donald Trump, orchestrated a criminal scheme to corrupt the 2016 presidential election,” he alleged.
“Then he covered up that criminal conspiracy by lying in his New York business records over and over and over again.”
Calling it “election fraud,” he provided several instances when the three allegedly conspired to block negative press about President Trump from becoming public before the 2016 contest.
The plan was allegedly hatched at Trump Tower shortly after the then-presidential candidate had announced his candidacy in what Mr. Colangelo is referring to as the “Trump Tower conspiracy.”
During that meeting, prosecutors say, Mr. Pecker agreed to “help the defendant’s campaign by working as the eyes and the ears of the campaign.”
Mr. Colangelo, senior counsel to the district attorney, told jurors that although the payments to Mr. Cohen, then Trump’s personal lawyer, were labeled as legal fees pursuant to a retainer agreement, there was no retainer and there were no legal services.
“The defendant was paying him back for an illegal payment to Stormy Daniels on the eve of the election. The defendant falsified those business records because he wanted to conceal his and others’ criminal conduct,” he said.
‘Peacefully Protest’
In a Truth Social post before he left for the courthouse on Monday morning, President Trump wrote that he wonders why pro-Palestinian demonstrators are allowed to “roam the Cities, scream, shout, sit, block traffic, enter buildings, not get permits, and basically do whatever they want” while pro-Trump backers are “rudely and systematically shut down and ushered off to far away ‘holding areas,’ essentially denying them their Constitutional Rights.”
“America Loving Protesters should be allowed to protest at the front steps of Courthouses, all over the Country,” the former president wrote on social media, making reference to demonstrators who have appeared in front of the Manhattan courthouse where his trial is being held.
Those protests are “allowed for those who are destroying our Country on the Radical Left, a two tiered system of justice,” he added. “Free Speech and Assembly has been ‘CHILLED’ for USA SUPPORTERS.”
Later, he urged his supporters to “GO OUT AND PEACEFULLY PROTEST. RALLY BEHIND MAGA. SAVE OUR COUNTRY!”
When entering the courthouse on Monday, President Trump again criticized the case during a brief interview with reporters.
“I’m here instead of being able to be in Pennsylvania and Georgia and lots of other places campaigning and it’s very unfair,” he said.
A small group of anti-Trump protesters was seen outside the courthouse ahead of opening statements, chanting, “No one is above the law,” while members of the media and public lined up to get inside, according to reporters on the scene. It’s unclear if any pro-Trump demonstrators heeded the former president’s call on social media.
Since early-March, precious metals have launched one of their sharpest rallies in decades. Gold surged by 16% and silver by 26%, which are significant moves for safe-haven assets — especially considering that it played out over such a short time period. During this rally, gold has received the lion’s share of the attention because it has been hitting all-time highs, while silver has yet to exceed its 2021 high of $30.13 — let alone its all-time high of $49.81 that was reached all the way back in 2011. Though silver has been languishing for the past several years, there are numerous reasons why it may be on the verge of one of its most powerful bull markets in history.
Silver Demand is Growing Rapidly
Though silver is most known for its use in jewelry, silverware, coinage, and bullion products, the largest source of silver demand is actually industrial in nature. Thanks to its unique physical, chemical, and electrical properties, silver is used in electronics, solar panels, automobiles, photography, medicine, the chemical industry, and much more.
The growing number of uses for silver combined with ongoing global economic growth is causing a substantial increase in industrial demand for silver. According to the latest report from the Silver Institute, industrial demand for silver grew by a solid 11% to a record of 654.4 million ounces in 2023, which came on the heels of a record year in 2022. Silver used for photovoltaic (PV) applications skyrocketed by 64%, which caused electrical & electronics demand to increase by 20% in turn. As the push for so-called “green” energy continues, photovoltaic silver demand should keep growing at a rapid rate. The Silver Institute predicts a 9% increase in industrial demand for silver in 2024.
The steady increase of industrial demand over the past decade is driving overall silver demand higher:
There is a Structural Silver Deficit
Since 2021, there has been a deficit of silver due to demand exceeding supply — a condition that has helped to boost prices and should continue to do so for the foreseeable future. Strong demand combined with tepid supply increases led to a deficit of 184.3 million ounces in 2023 and are expected to lead to an even worse deficit of 215.3 million troy ounces in 2024.
The chart below shows how the silver deficit has grown significantly over the past few years:
While silver demand has grown at a healthy clip over the past four years, the overall supply of silver has been flat for more than a decade:
Global mine production of silver has actually been declining for the past decade:
(Read our recent report about the structural silver deficit and why it is likely to persist and even intensify.)
Above-Ground Supplies Are Dwindling
The silver deficit of the past few years is causing the above-ground supply of silver to dwindle at a rapid rate:
The total London Bullion Market Association (LBMA) silver inventory decreased by 30% from its peak in 2021:
The total COMEX silver inventory (a measure of U.S. silver inventories) fell by 27% since 2021:
The total silver inventory on China’s Shanghai Gold Exchange fell by an incredible 73%:
The total silver inventory on China’s other main silver trading venue, the Shanghai Futures Exchange (SHFE), also fell precipitously:
The Technical Picture
For the past year, silver had been chopping up and down aimlessly until its sudden surge that came practically out of nowhere:
A look at the five-year chart shows that there is a major resistance zone overhead from $28 to $30, which is what silver struggled to surpass during the last bull run in 2020 and 2021. If silver can close above that zone in a convincing manner with heavy volume, that would signal that another bull run is likely imminent.
The long-term silver chart going back to the year 2000 shows something very interesting: a triangle pattern has been forming for over a decade as uptrend lines and downtrend lines converge together. Patterns like this often result in very powerful moves when the asset finally breaks out from it. Amazingly, silver has recently broken out from its long-term triangle, which means that a powerful bull market is likely ahead that could take silver to its prior 2011 highs of approximately $50 and even higher after that!
Silver has been rising in sympathy with gold after it broke above its critical $2,000 to $2,100 resistance zone that acted as a price ceiling from 2020 until recently. Gold’s breakout signifies that a new bull market has begun, which should help bring silver along for the ride. (There are many parallels between gold’s resistance zone and silver’s current $28 to $30 resistance zone, and silver should really shine once it finally breaks through.)
What is also worth noting is how gold and silver’s surprising recent rally has received very little mainstream attention by a press that is much more enamored with hot AI stocks as well as Bitcoin and other cryptocurrencies that have recently benefited from the U.S. government’s approval of a number of Bitcoin exchange-traded funds (ETFs), which has resulted in tremendous inflows from institutional investors and retail investors alike.
As the chart below shows, investors have pulled a significant amount of funds from silver ETFs in order to re-invest in Bitcoin ETFs, which is ironic considering its timing shortly before silver’s liftoff (and is confirmation of contrarian investing principles). The continuation of silver’s bull market will likely lead to funds flowing back into silver ETFs, providing additional fuel for the rally.
Silver is Inexpensive by Historical Standards
Precious metals analysts keep an eye on the gold-to-silver price ratio to get a sense of whether silver is undervalued or overvalued relative to gold. Silver is approximately 17.5 times more common than gold in earth’s crust, which is one of the reasons why silver has been cheaper than gold throughout history. During the Roman empire, the gold-to-silver price ratio was set at 12 to 1 by government decree. In much of Europe throughout the Middle Ages and the Renaissance, the gold-to-silver price ratio was set at similar levels. In 1792, the newly formed U.S. government set the ratio at 15:1.
When the gold-to-silver ratio differs greatly from its long-term historical average, there are reasons to believe that something is amiss and that the ratio will eventually revert back to its historical average. In recent decades, the gold-to-silver price ratio has ranged from approximately 50 to 100, which is much higher than its historical average.
The current gold-to-silver ratio is a lofty 84.3, which means that silver is extremely undervalued relative to gold based on historical standards. If the ratio were to revert to its average since 1915 of 52.8 (without any price increase in gold), that would result in silver being priced at a respectable $45 an ounce. If the ratio were to revert to 15:1, as it was in the U.S. in 1792, that would result in silver trading at $158.87 an ounce — an incredible 464% increase from the current price! For this reason, many investors expect silver to perform even better than gold during the coming precious metals bull market and revaluation that they expect to occur when our unsustainable global paper money system collapses (as I discussed in a recent piece). Any price increases in gold would amplify price increases in silver, if the gold-to-silver ratio reverts.
Adjusting silver’s price for inflation also shows that the precious metal is quite cheap by historical standards. At the peak of the Hunt brothers-induced silver spike in 1980, silver hit an inflation-adjusted price of $143.54. At the peak of the quantitative easing-driven bull market in 2011, silver hit an inflation-adjusted price of $67.50. At the time of writing, silver is trading at a mere $28.30, which means that it has much further to run if it is going to catch up with prior inflation-adjusted prices.
Another way to determine whether silver is undervalued or overvalued is to compare it to various money supply measures. The chart below shows the ratio of silver’s price to the United States M2 money supply, which is helpful for seeing if silver is keeping up with money supply growth, outpacing it, or lagging it. The M2 money supply is a measure of all notes and coins that are in circulation, checking accounts, travelers’ checks, savings deposits, time deposits under $100,000, and shares in retail money market mutual funds.
If silver’s price greatly outpaces money supply growth, there is a heightened chance of a strong correction. If silver’s price lags money supply growth, however, there is a good chance that silver will soon experience of period of strength. Since the mid-2010s, silver has slightly lagged M2 money supply growth, which could set it up for a period of strength due to the other factors discussed in this piece.
Silver is Rising Despite the Strong Dollar & Interest Rates
What is particularly impressive about the recent rally in silver and gold is the fact that it occurred even while the U.S. dollar was strengthening against other major currencies. Precious metals and the U.S. dollar have a long-established inverse relationship, which means that strength in the dollar typically causes weakness in precious metals, while dollar weakness typically causes precious metals prices to rise.
The chart below compares silver (the top chart) to the U.S. Dollar Index (the bottom chart) and shows how action in the dollar often causes an opposite trend in silver. Silver’s surge in the face of the strengthening dollar is a sign of strength and staying power. (I need to clarify, however, that the U.S. dollar’s exchange rate is strengthening against other fiat currencies; this does not mean that the dollar is getting stronger in terms of purchasing power or against sound money like gold and silver. All fiat currencies are being debased as a function
On a similar note, silver and gold are also rallying even though global interest rates have been rising at the same time due to inflation proving to be stubborn, and even at risk of increasing again. Rising interest rates are typically bearish for precious metals because they don’t pay any yield, but silver and gold appear to be unfazed this time, which is an additional sign of strength and staying power. of time but they still fluctuate against each other in the global foreign exchange market.)
How Inflation is Contributing to Silver’s Recent Rise
Another important factor driving the recent precious metals rally is stubbornly high inflation that is not easing as quickly as economists and investors had expected and may actually be worsening instead. Gold and silver are inflation hedges and are very sensitive to changing inflation expectations. U.S. year-over-year inflation — as measured by Consumer Price Index (CPI) — increased at a 3.5% rate in March, which immediately caused traders to scale back their expectations for Federal Funds Rate cuts this year. March’s inflation rate represents an acceleration from February’s 3.2% increase.
The sharp increase in commodities prices over the past few months is further confirmation that inflation may be accelerating:
Crude oil has rallied over the past few weeks:
U.S. wholesale gasoline prices have increased by an alarming 30% in the past two months and are one of the most psychologically important and visible indicators of inflation in the minds of consumers:
China’s Economic Crisis is Helping Precious Metals
Though most non-Chinese are unaware, China is experiencing a serious economic crisis as well as a property and stock market crash after at least two decades of almost non-stop boom times. Unfortunately, that economic boom was actually an unsustainable bubble that was enabled by
and reckless speculation, and the chickens are now coming home to roost. China’s imploding property and stock market bubbles have resulted in at least hundreds of billions of dollars worth of losses — including
alone from the country’s property tycoons.
As Chinese investors lost faith in the property and stock market, they have shifted their attention to gold, which has earned a stellar reputation in China over thousands of years. When modern financial markets and investments sour, Chinese people seek refuge in gold bullion, which is tried-and-true. Chinese investors have clamored into the gold market with such intensity that they have pushed the price of locally-traded gold to a premium against the international price of gold.
In addition, Chinese investors recently piled into a domestic gold stock fund causing its premium to surge 30% until trading was halted to calm the frenzy and protect investors. Around the same time, the Shanghai Gold Exchange raised silver margin requirement from 10% to 12% after silver futures spiked. Though everyday Chinese investors tend to focus more on gold rather than silver, their heavy buying has helped to buoy the price of gold, which has boosted silver in turn. China’s massive economic bubble formed over decades and its collapse is only in the early stages — a fact that should propel precious metals prices higher for years to come.
Precious Metals Are Benefiting From Political Uncertainty
On top of their roles as inflation hedges, gold and silver are also hedges against economic and political uncertainty, and there is a great amount of political uncertainty this year as more than 60 countries — including the United States, Mexico, India and Indonesia — are set to hold national elections. In the United States, President Joe Biden and former President Donald Trump are expected to go head-to-head again as they did in 2020.
Economic issues, including inflation, have soared to the top of the list of concerns for Americans who are growing increasingly frustrated with so-called “Bidenomics” as the cost of living continues to rise at an uncomfortable pace while middle class life becomes further out of reach for a large portion of the population. The Biden administration’s heavy spending and willingness to rack up the national debt have exacerbated the country’s inflation problem, which is why it is catching flak from Americans on both sides of the aisle. In theory, a Biden win should prove beneficial for precious metals prices.
Geopolitical Risks Are Helping Gold & Silver
In addition to the other factors mentioned so far, precious metals are also benefiting from mounting geopolitical risks related to the Israel-Hamas war and the Russia-Ukraine war. The Israel-Hamas war has now been going on for six months and is heating up, unfortunately. On April 13th 2024, Iran fired hundreds of drones, cruise missiles, and ballistic missiles at Israel, which is Iran’s first direct attack on Israel since the conflict started and the first ever attack on Israel directly from Iranian soil (in the past, Iranian proxies were used to attack Israel). Though 99% of Iran’s drones and missiles were intercepted by Israel’s sophisticated Iron Dome air defense system, the attack sent a powerful message and represents a new phase of the war that is playing out across the Middle East.
The April 13th attack was retaliation after Israel struck numerous Iran-backed targets in Syria. Israel now vows to retaliate against Iran for its April 13th attack, which would further perpetuate the tit for tat cycle. As geopolitical analyst Max Abrahms said, “Iran and Israel are now at war. A real, direct war.” Economist and best-selling author James Rickards is now warning about the rising risk of a nuclear war and saying that gold’s rally “is just getting started” due to that risk.
The Russia-Ukraine war has also taken a turn for the worse recently after Russia shot down 53 Ukrainian drones and the Kremlin warned that Russia and NATO are now in “direct confrontation.” Ukraine took credit for destroying at least six Russian fighter jets, damaging eight more, and killing or injuring 20 service personnel. The BBC has estimated that over 50,000 Russian military personnel have been killed so far in the war against Ukraine, while Ukrainian President Volodymyr Zelensky claimed that 31,000 Ukrainian military personnel have been killed — a figure that is likely understated.
The Potential For a #SilverSqueeze
In early-2021, investors and traders affiliated with the r/WallStreetBets (WSB) subreddit began promoting a theory, movement, and hashtag called #SilverSqueeze with the intention of piling into physical silver en masse in order to create a short squeeze that forces big banks and other institutions to buy back their short positions (i.e., bets against the price of silver) that are used to suppress the price of silver. If successfully pulled off, the theory went, the price of silver would skyrocket to all-time highs, which would simultaneously generate significant profits for #SilverSqueeze participants while punishing the institutions that were suppressing the price of silver.
In 2021, BullionStar agreed with and supported the #SilverSqueeze movement and still does — even though it may have been ahead of its time. We still believe that a #SilverSqueeze is likely to occur in the not-too-distant future when the manipulating institutions finally lose control of the physical silver market. We have also written extensively (here, here and here) about the manipulation and suppression of the physical gold and silver markets.
The proliferation of “paper” silver products (ETFs, futures, and other derivatives) dwarfs the supply of actual physical silver by a multiple of at least 100 to 1. The sheer volume of outstanding paper silver has had the effect of absorbing demand that would normally have flowed into and benefited the physical silver market. Furthermore, the glut of ersatz silver has suppressed the price of physical silver and has prevented true and fair price discovery.
In the coming #SilverSqueeze, we believe that investors will be forced to reckon with the fact that there is just a fraction of the physical silver in existence that they believed, which will lead to a scramble for physical silver while paper silver products sink in value. Silver’s recent breakout, if it can be sustained, has a strong potential of evolving into a #SilverSqueeze as the bull market gains momentum.
Tesla Shares Slide As Price-Cuts In US, China, & Germany Spark Worsening EV Price-War
Tesla shares tumbled nearly 6% on Monday morning, on pace for the seventh straight down session, as the EV-maker once again slashed vehicle prices across major markets—China, Germany, and the US—amid the worsening EV price war.
In China, Tesla dropped Model 3, Y, S, and X vehicle prices by 14,000 yuan, or $1,933, according to Bloomberg. US prices for Model Y, S, and X vehicles were reduced by $2,000. The Model 3 saw no reduction in price in the US.
A base-level Model Y in China now starts at around 250,000 Yuan, or $35,000. In the US, base models of Tesla Y, S, and X begin at $43,000, $73,000, and $78,000, respectively.
Following the price cuts, Evercore’s Chris McNally told clients that Tesla’s China business “may now be breakeven or even negative” based on earnings before interest and taxes. This isn’t good for the company operating in the world’s largest EV market.
The continued and worsening EV price war led Chinese electric vehicle manufacturer Li Auto to cut prices by 6% to 7% across its vehicle lineup. The L7 sport utility vehicle now starts at around 301,800 yuan.
On Sunday, Musk wrote on X, ”Tesla prices must change frequently in order to match production with demand.”
Other cars change prices constantly and often by wide margins via dealer markups and manufacturer/dealer incentives. Only a fool thinks the “MSRP” is the real price.
Tesla prices must change frequently in order to match production with demand.
Wall Street soured on the latest round of price cuts, with shares down a little more than 4% around lunchtime.
“The volatility of prices has, however, impacted the appetite of professional buyers such as leasing and rental companies – Sixt and Hertz have elected to reduce their Tesla fleets due, in part, to uncertain used pricing,” HSBC analyst Pushkar Tendolkar told clients.
The stock has plunged 43% this year, making it one of the worst performers in the S&P500.
Last week, The Wall Street Journal reported that Tesla was preparing to cut 10% of its global workforce, approximately 14,000 employees. Then, on Monday, Bloomberg reported that the company’s newly formed marketing team was laid off.
Tesla also slashed the price of its Full Self-Driving software from $12,000 to $8,000 in the US. This followed the most recent halving of the FSD subscription from $200 to $100 per month.
On Tuesday, Tesla is expected to report first-quarter earnings. LSEG data shows that the world’s most valuable automaker is likely to post its first revenue drop and lowest gross margin in nearly four years. This comes after the company reported a slide in vehicle deliveries for the first quarter earlier this month.
The title to this post comes from one of my favorite NOFX songs, Dinosaurs Will Die.
While I’m sure the band in absolutely no way agrees with most, if not all, of my political leanings, the critiques they raise about the music industry in the song could serve just as well as many of the questions I want to ask of legacy mainstream media and politicians from both sides of the aisle in our government.
Leading those questions, for me, is this one: Doesn’t it elicit a hopeless feeling sometimes that we always have to learn the hard way in this country?
Few things are surer than taxes and death, but one of them is that our powers that be will make up any excuses necessary, scapegoat anything possible, and generally exercise every single possible wrong decision before reluctantly realizing that a consequential, uncomfortable yet important, proactive adult decision needs to be made and/or communicated to the American public.
Nobody ever wants to fess up to doing something wrong and nobody has a tolerance for even an ounce of discomfort, even when it accompanies an obvious decision that is in the best interest of our nation.
There have been too many examples in recent memory to name, but one of the latest bouts of us acting like a scared 6 year old with an aversion to reality was the farce of the Fed and Biden administration constantly telling the nation that inflation was transitory, when that has turned out to be the polar opposite of the truth.
Janet Yellen, unable to ascertain a clue in the real world, looking for one in the virtual world.
Zooming out from the inflation farce, monetary policy in general is another example of our inability to digest even subatomic amounts of bad news. We would rather pile on larger and larger tranches of quantitative easing, flying blind and ignorant of the potential consequences of our novel virus of a monetary policy experiment, than deal with the reality—or even the thought—of a recession.
Captain O’Connell said it best in Armed and Dangerous:
“The world is a sh*thole, full of sh*tty little scumbags, who are scared sh*tless.”
Yes, we have chickenshit cowards, whose fragility won’t physically allow their bodies to utter the truth, on both sides of the political aisle. It is a toxic brew of being spineless and an incessant need to be reelected.
Donald Trump lied to us over and over about Covid, saying we had 15 cases that were going to zero. Ben Bernanke told us that subprime housing was contained in the very moments leading up to the 2008 financial crisis. Joe Biden is blaming today’s inflation, very obviously the result of the massive money printing that took place during Covid, on Vladimir Putin, Donald Trump, corporate greed and pretty much any person or inanimate object his feeble brain can conceptualize. Elected leaders support violent protests until they show up on their front lawn. They have no problem telling us that we need to stay home and isolate while they go out to expensive dinners and make trips to the salon. One presidential candidate rails on the other for corruption while engaging in the very same practices they decry.
Out of the hundreds of representatives in Congress, I could probably count the people of integrity from both sides of the aisle using one hand — to say we have lost our way would be a vast understatement. While I thought Bob Moriarty did a great job outlining the end of the empire on my last podcast with him, this weekend provided us an even clearer example of just how profoundly lost we have become.
It’s already bad enough that the nation is in such a precarious debt-to-GDP situation that more than 90% of countries in history that have followed the same fiscal path have wound up defaulting. And it’s similarly disturbing that, despite these obvious realities and the Federal Reserve being stuck between a rock and a hard place, we have thrown our hands up in the air and decided to YOLO the economy by spending as much as humanly possible before the inevitable default.
Honestly, I’m not trying to be hyperbolic, but monetarily and fiscally there seems to be no other way to describe our government’s actions other than willingly and excitedly driving the country full speed ahead towards the death of the dollar.
As if this situation wasn’t insulting enough, over the weekend the United States House of Representatives approved more foreign aid, totaling nearly $100 billion and including $60 billion to Ukraine, without similarly funding to secure our own nation’s southern border.
Putting aside the very real argument that we simply don’t have the money to spend—I’ve given up on trying to reason with anybody about that argument — how could we then still put foreign nations’ security above our own? This weekend was a glaring example of how truly futile an exercise it is to hope for reason and common sense in Congress.
Passing this foreign aid not only shows that our leaders can’t “read the room”, it goes to show they simply don’t know the difference between being nice to other nations versus extending so much help that it becomes counterintuitive to our own country. Not only that, prioritizing the security of other nations over our own is, at its core, a slap in the face to U.S. taxpayers on both sides of the aisle. And after the bill passed overwhelmingly in the House this weekend, representatives tarred and feathered those still-red-from-being-slapped faces by waving Ukrainian flags on the House floor.
Look, playing Devil’s advocate, I know what politicians are thinking (if you can call it that): we are in the midst of defending democracy and Western values by supporting Ukraine and Israel.
They are thinking we have always had an excess of room to spend, and it has never led to meaningful consequences for the country, so why not shovel another $100 billion of taxpayer cash that will be spent without an audit overseas?
They’re thinking the border crisis will be an election issue and that both sides will secretly be happy that an agreement hasn’t been reached so that it can play out as a key issue leading up to November. In addition to thinking these things, they’re thinking generally that they are doing the right thing.
It’s the same type of naïve logic that people reason to themselves when helping out a friend or family member who is an addict. They continue to lend them the 20 bucks a day that they ask for, hoping that eventually they will find a long-term solution to their addiction while staving off short-term withdrawals by buying more drugs, booze or lottery tickets.
They do it so the person stops asking for the day and many times they do it because they think it’s the right thing to do. And, as is almost always the case, it isn’t, and the “helper”, who has actually become an “enabler”, winds up as one of the key figures in an intervention where they have to eventually threaten to withhold all of the “help” they’ve been giving and try to put the addict to a decision to break out of the devastating grip of the addiction pattern they’re in.
I’m not trying to liken Ukraine or Israel to addicts—I can see the benefit to helping both nations and certainly I can see the benefit of trying to defend Western values on a global scale. But it’s when it comes at the expense of our nation that it becomes the wrong decision. And right now, we simply don’t have the resources to offer help and—most alarmingly—we are a nation that needs to help itself first.
I don’t know what it’s going to take for us to reach the point where we realize we need an intervention, but sadly our history of cowardice approaching uncomfortable problems and making tough decisions leads me to believe it’ll come only at a point after it is far too late.
Looking back from that point, it’ll be so obvious how we failed to do the right thing for our country at these crucial moments. We will deal with the consequences then because we will be forced to. Eventually, no matter how catastrophic the issue, we will figure out a path to rebuild—not unlike other nations and empires that have fallen or defaulted—and we will carry on. This I’ve come to accept.
But don’t be surprised if the shame and humiliation of slapping the US taxpayer in the face like we’ve done this weekend isn’t quite as easy to process, get over and rebuild from.
My only hope is that our misguided decision-making at some point serves as a learning experience for future generations. But for us now, sadly, the die has already been cast, and my prediction is the coming years and decades will be bumpy ones.
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Israel’s Military Intelligence Chief Resigns Over Oct.7 Failures
Israel’s top military intelligence official has announced his resignation in a shock development for the country while it’s still at war, citing his failure to anticipate the Oct.7 Hamas terror attack. Maj. Gen. Aharon Haliva, chief of the Israel Defense Forces Military Intelligence Directorate, is expected to vacate the position as soon as his replacement is appointed.
This makes Haliva the first senior officer to resign over Oct.7, and comes as large Israeli protests have persisted in reaction to the Netanyahu government’s failure to achieve the safe return of the remaining hostages being held by Hamas.
A military announcement confirmed the resignation has been approved by Defense Minister Yoav Gallant. According to a statement in Israeli media, “Alongside Haliva, other top defense officials have said they bear responsibility for the deadly invasion carried out by Hamas on October 7, including the head of the Shin Bet security agency and the IDF chief of staff.”
As for these additional officials, “None of them has announced plans to resign as of yet, though many are expected to do so once the security situation stabilizes,” Times of Israel reports.
There’s been widespread questioning as to how Hamas and other Palestinian militants were able to breach Israel’s southern borders with ease on Oct.7 – even overrunning IDF border outposts, amid the deadly attack on the Nova music festival. Israel has some of the most sophisticated and advance surveillance systems in the world.
Over 1,160 people were killed, mostly civilians, and more than 240 Israelis and foreigners were taken hostage, but many of the captives have since died. The security failures of Oct.7 are still under investigation and are likely to be scrutinized for years to come.
But Al Jazeera observes that Gen. Haliva’s resignation from the top military intelligence post is also political and relates to PM Netanyahu’s handling of the crisis and ongoing war in Gaza:
Akiva Eldar, an Israeli author and former columnist with Haaretz newspaper, says Major-General Halavi quit likely because Netanyahu isn’t going to end the war on Gaza anytime soon.
Eldar added another reason is that the prime minister “is not interested in bringing the captives back to Israel”.
“Netanyahu is the highest authority and he never took responsibility [for the Hamas attack] so Haliva wanted to send a personal message to tell him, ‘If I can do it, you can do it,’” he said.
As for the Israeli military’s own internal investigation into Oct.7 security and intel failures, it is expected to look the way back to 2018 in terms of scope.
The following areas will focus of a deep investigation: “The main subjects being investigated by the General Staff are: the development of the IDF’s perception of Gaza, with an emphasis on the border, starting in 2018; the IDF’s intelligence assessments of Hamas from 2018 until the outbreak of the war; the intelligence and decision-making process on the eve of October 7, as well as the days leading up to it; and the command and control, formations, and orders given during battles between October 7 and 10, when troops restored control over all communities and army bases in southern Israel that had been invaded by Hamas,” according to Times of Israel.
