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Via Middle East Eye

Israeli tanks have moved into eastern Jabalia in northern Gaza following a night of intense bombardment, which has killed some 19 Palestinians and flattened residential blocks, according to health officials.

Israeli fire targeted ambulances near the camp's Unrwa clinic, Wafa news agency is reporting. The Israeli army said that the latest incursion on the camp was to prevent Hamas from "rehabilitating military capabilities" there.

Via Reuters

In other areas of Gaza, Israeli air strikes reportedly killed some 27 Palestinians overnight. In Rafah, 18 Palestinians were killed in air strikes,  including several children, according to Wafa.

Wafa is also reporting that the continuing air strikes have killed dozens more in the past few hours, with 12 bodies arriving at Kamal Adwan Hospital in Beit Lahiya, in northern Gaza.

The director of the UN agency for Palestinian refugees, Sam Rose, has warned that Palestinians in Rafah are being instructed to evacuate to a nearby "expanded humanitarian area" which is already overcrowded and lacking in essential services.

In an interview with BBC news, Sam Rose explained that al-Mawasi is "essentially sand dunes on the Mediterranean coast that are crowded with hundreds of thousands of people" who have already been displaced.

"There is no water network, there is no infrastructure, sewage, sanitation," he said.

.@BarakRavid @axios sources suggest the Israelis are going to try to salami-slice Rafah to avoid crossing Biden's "red line": https://t.co/ND4EgQ4McI

Here are some of the latest updates:

• The Israeli military has intensified attacks across Gaza in the past 24 hours, with 27 Palestinians killed overnight, including several children in southern Rafah.

• Israeli forces "carpet-bombed" Jabalia refugee camp in northern Gaza, killing and wounding several Palestinians, Wafa news agency is reporting. Residential houses and evacuation centres have been flattened. The death toll is currently unknown.

• In the West Bank, Israeli forces have raided the Arroub refugee camp near Hebron on Sunday, Wafa is reporting.

• UN Secretary-General Antonio Guterres renewed calls for an "immediate ceasefire".

• UN agencies have warned that food supplies for distribution in southern Gaza will run out today.

• Unrwa estimates that 300,000 Palestinians have fled Rafah in the last week, emphasising that displaced people have "nowhere safe to go".

Authored by Paul Mueller via the American Institute for Economic Research,

Nobel Prize–winning economist Esther Duflo thinks rich countries should pay poor countries $500 billion in compensation each year for climate-change damages. It is our “moral debt.” She proposes an international 2-percent wealth tax on the ultra-rich and an increase in the global minimum corporate tax rate to fund this $500 billion transfer. 

Fishermen haul their catch near a fishery in Goa, India. 2016.

You and I may be shocked by such a suggestion but don’t worry: “It’s really necessary. And it’s reasonable. It’s not that hard.” Only someone in an elite, progressive bubble could say something like that. Let’s check her reasoning.

Duflo claims that climate change creates costs, specifically through “excess” deaths due to excessive heat. Poorer countries from the global south near the equator will see more days of extreme heat, and so will see a disproportionate increase in excess deaths. 

Other economists translated those deaths into an externality cost of $37 per ton of CO2. Multiply that by the roughly fourteen billion tons of CO2 emitted by the US and Europe and voila, wealthy countries generate $500 billion in externality costs per year.

She proposes paying for this by increasing the global minimum corporate tax rate from 15 percent to 18 percent and introducing an international 2-percent wealth tax on the ultra-rich, which she defines as the 3000 richest billionaires. We can’t go into the many problems and obstacles to such funding mechanisms here — suffice it to say such ideas will be nearly impossible to implement.

But Duflo’s back-of-the-envelope calculations, besides missing the bigger picture, are so speculative as to require playing make-believe. Let’s play along for a moment to see why. We’ll start by reverse-engineering her $500 billion number into a measure of harm.

Regulatory agencies and insurance companies use the concepts of “statistical value of life” or the “statistical value of a life-year” to do cost-benefit analysis on risk and the monetary value of life. These concepts are slippery, however, and calculated in a variety of ways with a wide range of estimates. 

To keep things simple, let’s assume that the value of one life-year is $200,000. The $500 billion number proposed by Duflo suggests that the cost imposed by wealthy countries burning fossil fuels is the loss of roughly 2.5 million life-year” in poor countries per year.

That sounds like a staggering number!

But what about the benefits that have accrued to developing countries from activities that generate CO2 emissions? Important advances in medicine, such as antibiotics and vaccines, were developed in modern industrialized countries. So, too, were refrigeration, cars, the internet, smart phones, radar; modern agricultural methods with herbicides, pesticides, and fertilizers; improvements in plumbing, building materials, manufacturing, and much more. “Polluting” activities in industrialized countries improved nutrition and safety around the world. These advances, and many others, significantly increased people’s life expectancies — especially in poor countries.

Surely the value of these improvements should weight the opposite side of the scale from the expected harm of climate change — especially since the crusade against fossil fuels and carbon emissions will assuredly slow economic growth and innovation. Let’s consider the case of India for a moment.

Life expectancy in India has basically doubled from about 35 years in 1950 to about 70 years in 2024. If you consider that India has just over a billion people living in it, modern technology developed by rich CO2-emitting countries has added 35 billion life-years in India alone. 

Translating life-years back into dollars, 35 billion life-years times $200,000 per life-year means that the benefits from greater life expectancy in India over the past 75 years is the equivalent of $7 quadrillion dollars — or in annualized terms, an annual benefit of about $93 trillion dollars. In other words, the benefits to India alone are over a hundred times larger than Duflo’s estimate of costs!

Nor is India cherry-picked. China has a similar story with life expectancy rising from 43.45 years to 77.64 years. Similar improvements in life expectancy occur across the global south. 

In Africa: 

• Mali (26.35 years to 60.86 years)
• Chad (35.28 years to 55.44 years)
• Libya (35.28 years to 73.59 years)
• Kenya (41.05 years to 67.70 years)
• Democratic Republic of Congo (38.15 years to 61.86 years)
• Tanzania (39.86 years to 66.67 years)
• Sudan (43.02 years to 66.30 years). 

In South America: 

• Panama (55.19 years to 79.27 years)
• Nicaragua (40.44 years to 75.43 years)
• Colombia (49.48 years to 78.04 years). 

In southeast Asia: 

• Indonesia (39.77 years to 72.50 years)
• Malaysia (52.80 years to 76.79 years)
• Vietnam (51.24 years to 75.91 years).

Of course, one could argue that developed industrial countries are not solely responsible for increases in life expectancy around the world. But one could just as easily say the same about whether developed industrial countries are solely responsible for global CO2 emissions, climate change, or harm to people in the global south due to hotter weather. Connecting these two issues makes perfect philosophical sense, because the production of CO2 has historically been directly associated with increases in economic growth; which in turn is necessary for all the developments increasing longevity around the world.

Even if we massage the assumptions in Duflo’s favor, the results remain favorable to industrialization. Suppose western technology and industrial activities contribute 50 percent to improvements in life expectancy. That’s still a $46 trillion annualized benefit to India. Reduce the value of a statistical life-year to $100,000 — that’s still a $23 trillion/year benefit from industrialization in the west. Exclude India from the analysis and cut the population we focus on down to 500 million people — that’s still over $12 trillion/year in benefits. Reduce the improvement in life-expectancy by six years — that still leaves about $10 trillion/year in benefits.

So, even after making tons of assumptions to reduce their size, the estimated benefits of industrialization are still about twenty times larger than Duflo’s estimate of its costs. 

Worrying about hypothetical, indirect costs of CO2 emissions when it comes to human well-being is like scrounging for pennies while ignoring $100 bills lying on the sidewalk. Actually, it is worse than that. It is like lighting $100 bills on fire to help you search a dark alley for some pocket change of human welfare.

Economic development, driven largely by Adam Smith’s dictum “peace, easy taxes, and a tolerable administration of justice” which includes strong private property rights and limited government intervention, has improved human living standards in unprecedented ways over the past 300 years. These remarkable improvements in human welfare are not limited to wealthy, developed economies but are enjoyed around the world. 

Duflo talks about the (external) costs of industrialization on certain countries without considering the truly massive (external) benefits of industrialization to those same countries.

If anything, with a proper accounting, developing countries owe rich countries gratitude for the benefits they have received from industrialization and the corresponding CO2 emissions.

Paul Mueller is a Senior Research Fellow at the American Institute for Economic Research. He received his PhD in economics from George Mason University. Previously, Dr. Mueller taught at The King’s College in New York City.

The woke takeover of America's higher education system, transforming classrooms into woke indoctrination camps, has been on full display over the last several years. More recently, the pro-Palestinian protests on campuses have been a shocking eye-opener for many, which only reveal America's future leaders are being transformed into toxic, leftist creatures, used as 'useful idiots' by leftist-funded non-governmental organizations (funded by you know who), in a sinister plan masqueraded underneath social justice movements to start an actual revolution, destroy capitalism, and ultimately, conquer America. 

If you don't believe us, we've got some news that might change your mind.

Late last month, one very outspoken speaker at a pro-Palestinian campus protest said the quiet part out loud:

 "There's only one solution, intifada revolution. We must have a revolution so we can have a socialist reconstruction of the USA." 

An extremist on the mic says: "There’s only one solution, intifada revolution. We must have a revolution so we can have a socialist reconstruction of the USA."

This isn’t just about Israel/Palestine. It's an attempt of the Marxist takeover of America. Our colleges have become… pic.twitter.com/2IEqRyuorB

The question law-abiding Americans need to ask is why leftist radicals in the Biden administration, who quite honestly hate America, allow toxic woke ideologies to flow through the education system, promoting hate and violence at colleges and universities. 

Entire education curriculums have been infected with Marxist teachings, and purple-haired folks who are confused about their gender are infecting the vulnerable minds of youngsters with woke ideologies such as diversity, equity and inclusion, and queer theory. 

With some calling for the federal government to intervene and save the republic from this chaos, the most unlikely heroes of our time are the billionaires, such as Elon Musk, Bill Ackman, and Ken Griffin, who are stepping up to the plate to defend Old Glory and the nation. 

Musk is on X, awakening the world's population to various forms of Marxism, pushed by dark money-funded NGOs, which is spreading across governments and society like stage four cancer. On the other hand, Ackman and Griffin have denounced woke Ivy League schools, such as Harvard, in very public ways. 

The latest is Griffin, who founded the $63 billion hedge fund Citadel. In an interview Saturday, Griffin told the Financial Times that Harvard needs to embrace "Western values." The school's major donor said the campus crisis is a byproduct of a "cultural revolution." 

He said the US had "lost sight of education as the means of pursuing truth and acquiring knowledge" over the past decade.

"The narrative on some of our college campuses has devolved to the level that the system is rigged and unfair, and that America is plagued by systemic racism and systemic injustice," he noted.

Griffin continued, "What you're seeing now is the end-product of this cultural revolution in American education playing out on American campuses, in particular, using the paradigm of the oppressor and the oppressed." 

"The protests on college campuses are almost like performative art, and we're not actually helping Palestinians or Israelis with these surreal protests," the billionaire said, adding that in previous humanitarian crises, Americans would focus on practical aid. 

As we've pointed out, the campus riots have nothing to do with helping the poor Palestinians. Similarly, adjacent pro-Palestinian protests, shutting critical infrastructure, such as highways, bridges, and airport terminals nationwide, have zero to do with helping these folks and everything to do with collapsing America. 

The woke cult has been activated and unleashed in the US, as its objective is to scream racism over and over until communism is installed. If that's the solution to their alleged problems - well - this should be a wakeup call - that communism has yet to work in the world - killing more than 100 million people and counting. 

Here's Morgan Freeman on ending racism:

Morgan Freeman on ending racism: pic.twitter.com/Jw6lEymC8D

FT asked Griffin on how to fix Harvard, and his response: 

 "Harvard should put front and centre [that it] stands for meritocracy in America and will educate the next generation of leaders in American business, government, healthcare, and the philanthropic community. Harvard will embrace our Western values that have built one of the greatest nations in the world, foster those values with students, and ask them to manifest these values throughout the rest of their life."

The billionaire added: "Freedom of speech does not give you the right to storm a building or vandalize it. That's not freedom of speech. That's just anarchy."

So again, the unlikely heroes of our time are an elite class of billionaires; they're strapping on their combat shoes in this culture war and are signaling enough is enough. 

Perhaps it's time to upload antivirus woke software in America's schools, not just higher education but the entire damn system in a major overhaul - we suspect the Trump admin team will do that. 

Over the weekend The Washington Post has reported a strange incentive and quid pro quo that the US is offering Israel if it agrees to hold off on the Rafah offensive. 

The Biden administration is ready to hand over to Israel "sensitive intelligence" on the whereabouts of top Hamas leaders. The Washington Post cited four unnamed sources as saying the US "is offering Israel valuable assistance if it holds back, including sensitive intelligence to help the Israeli military pinpoint the location of Hamas leaders and find the group’s hidden tunnels."

The 'offer' is bizarre and somewhat unprecedented given one would think that Washington's aim alongside Israel would be to dismantle a designated terror organization and ultimately bring down its top leadership. 

But instead this is apparently being dangled like a carrot. Washington is holding out hopes that a ceasefire deal can be accomplished with Qatari and Egyptian mediation, but that still appears to be going nowhere. A full-scale Rafah assault is likely to put an end to Hamas-Israel talks, at least for the near future.

According to more of the 'incentives' for Israel to abandon its Rafah ground offensive: "American officials have also offered to help provide thousands of shelters so Israel can build tent cities — and to help with the construction of delivery systems for food, water and medicine — so that Palestinians evacuated from Rafah can have a habitable place to live, said the officials, speaking on the condition of anonymity to disclose secret diplomatic talks," WaPo writes.

"President Biden and his senior aides have been making such offers over the last several weeks in hopes they will persuade Israel to conduct a more limited and targeted operation in the southern Gaza city," the report continues.

Separately, public comments made by White House National Security Council spokesperson John Kirby during a Thursday briefing appeared to confirm the Post's reporting.

Kirby had said, "We could also, in fact, help them target the leaders, including [Hamas leader Yahya] Sinwar, which we are, frankly, doing with the Israelis on an ongoing basis."

Part of the White House's plan is to first get the bulk of Rafah civilians—which have been widely reported to be at over one million Palestinians—safely removed and evacuated before major fighting begins. But the main question echoed by almost all is: where will they go?

"The aid community generally is very skeptical there’s any safe way to relocate people out of Rafah," Jeremy Konyndyk, president of Refugees International, was quoted in The Washington Post as saying.

People in Rafah sending me photos of the new evacuation orders from Israeli military for Al-Shaboura, Al-Geneina and Khirbet Al-Adas. “Everyone in these areas is risking their lives and the lives of their family members. For your safety - we ask you to evacuate immediately” pic.twitter.com/39B9f7VUq4

It of course remains unknown the degree to which US intelligence actually has more info on Hamas leaders' whereabouts compared to Israeli intelligence.

Presumably such intel would come through intercepted communications, or perhaps even a human source that had infiltrated Hamas. However, it's highly doubtful the US has its own intelligence officers on the ground - other than possibly those working alongside IDF forces.

In a client note on Friday, Goldman's Mark Wilson commented on the money supply (M2) growth, which has noticeably turned upward following the most significant crash since the Great Depression. He questions if this is an inflection point in a "monetary juncture akin to 1995 or 2011." 

"Although we may be 12 months past the inflection in M2, the historic analog of that chart does pose the interesting macro question of might this indeed be a monetary juncture akin to 1995 or 2011," Wilson wrote. 

M2% Y-o-Y chart via Wilson's note:

As a reminder, the complete disinflation trend followed the M2 growth slump and really should've fallen faster if deficit spending wasn't so out of control. The latest CPI bounce comes after the money supply bottomed about one year ago and, of course, rising deficits, with the federal government spending $1 trillion every 100 days. 

On a separate note, Tressis chief economist Daniel Lacalle recently pointed out, "The massive deficit means more taxes, more inflation, and lower growth in the future," adding, "Deficits are not a tool for growth; they are tools for stagnation." 

Ahead of next week's April CPI print, we outlined to pro-subs on Friday that traders should expect a "downside surprise" as the lagging OER "crashes" and catches up with real-time metrics. 

And now comes the April CPI "downside surprise" as OER crashes down to catch up with real time metricshttps://t.co/yRwuFen2e4

However, we'll leave you with this from Dohmen Capital Research: "The Fed is being forced to step on the accelerator to enable the financing of the record deficits at the US Treasury. They know that is inflationary, but they have no alternative." 

“It’s death by 1,000 cuts. It’s the worst presidency with regard to energy policy I’ve ever seen — and I’ve been involved in energy for 40 years, my entire career.”

Those were the words of Steve Pruett, chief executive of Elevation Resources, to Financial Times last week, talking about how the Biden Administration has gone out of its way to make life difficult for the energy sector. 

After the deregulation seen during Donald Trump's presidency, a tailwind for the sector, President Biden has prioritized tackling climate change and promised to regulate the oil and gas sectors more tightly.

His administration has introduced a range of environmental regulations, including endangered species protections, methane leak controls, and limits on offshore leasing and new licenses for liquefying and exporting American gas. All the while he has been draining the U.S. Strategic Petroleum Reserve while trying to cover up the tracks of inflation that is spinning out of control under his watch. 

While many Democratic voters see these regulations as necessary, they have certainly rendered Biden unpopular in Midland, Texas, FT writes.

Midland lies at the core of the Permian Basin, which produces over 6.1 million barrels of oil a day—more than some OPEC nations—positioning the US as the largest oil producer globally.

FT notes that with the presidential election six months away, energy policy is a major divide between Biden and Trump. Despite Biden's best efforts, U.S. oil production has soared to record levels, over 13 million barrels per day, boosted by commodity price increases following Russia's 2022 invasion of Ukraine. Investors have seen substantial returns, with ExxonMobil shares - one of our favorite investments we have been touting for years - doubling since Biden's inauguration.

Nonetheless, industry insiders believe these achievements have happened despite White House policies, not because of them, and fear further regulations could harm the sector long-term.

Stephen Robertson, executive vice-president of the Permian Basin Petroleum Association commented: “In Biden’s campaign to become president, he said he was going to end the oil and gas industry — he is doing that.”

“There have been over 200 actions taken by this administration opposed to the oil and gas industry. There’s not one of these that will be the end of the industry . . . but there’s going to be a straw that breaks the camel’s back.”

Biden said while campaigning in 2020: “The oil industry pollutes significantly. It has to be replaced by renewable energy over time.”

In 2024, the oil industry will be behind Trump. FT notes that Pennsylvania, a key swing state and the second-largest shale gas producer in the U.S. after Texas, plays a crucial role in presidential elections. Trump won the state in 2016, but Biden narrowly took it in 2020.

Biden's suspension of new LNG permits has been unpopular in Pennsylvania, where the oil and gas sector employs around 80,000 people. Trump, promising to reverse this policy, was met with strong support at a recent rally in the swing state.

Even local Democrats, including Governor Josh Shapiro, a Biden ally, have opposed the freeze and urged its repeal.

Alexandra Adams at the National Resources Defense Council, a non-profit added: “From day one, the Biden administration has made a strong commitment to addressing climate change.”

But Biden's energy policies, aiming to reduce oil and gas pollution, have sparked significant opposition from the industry, which fears these measures will limit future U.S. production and energy security.

This conflict intensified as Biden took actions like suspending new LNG terminal licenses and restricting offshore drilling, despite oil and gas production reaching record highs under his administration. Industry stakeholders argue these regulations threaten investments and job stability, particularly affecting smaller companies that cannot easily absorb new costs.

Now, as election tensions rise, the industry is heavily funding campaigns advocating for fewer restrictions and promoting fossil fuel reliance, signaling deep concerns about the potential impacts of continued regulatory changes.

Harold Hamm, founder of Continental Resources told Financial Times: “We have what we call punitive regulation and punitive policy that has been brought about by this administration.”

Mike Sommers, head of the American Petroleum Institute concluded: “We need predictability. And when governments change rules at the drop of a hat without much consultation that sends a signal that if you’re going to invest in that place your investment may be at risk.”

By Eric Peters, CIO of One River Asset Management

“We’re always going to do what we think is the right thing for the economy,” said Jerome Powell, annoyed, but classy as always.

“It’s hard enough to get the economics right here,” he explained, swatting away the pesky reporter with a bit of false modesty.

Every four years, overeager young journalists attempt to get the Fed Chairman to admit the institution is influenced by presidential politics. They long for their moment of glory, a hero-nerd’s version of the “You can’t handle the truth” interrogation of Jack Nicholson by Tom Cruise in A Few Good.

“This is my fourth presidential election here,” said Powell. “Read all the transcripts and see if anybody mentions in any way the pending election,” he said, as if that matters.

Everyone in Washington is obsessed by the election. And from what I hear, nearly all are as determined to do everything possible to deny Trump a second term, as they are repulsed by the Democrat’s inexplicable failure to replace Biden on their ticket.

The Federal Reserve’s twelve voting members are just as capable of weighing the effect of their decisions on the election without explicitly mentioning it, as they are at considering the impact of US monetary policy on the Bank of Japan’s increasingly tenuous situation without talking about it directly.

So, for instance, the Bank of Japan intervened massively this week to stem the yen’s collapse, and this quite obviously was on Powell’s mind when he reassured markets that the Fed is not considering further rate hikes, which would intensify downward pressure on the yen.

A disorderly decline in the yen would force the Bank of Japan to hike rates substantially, which would cause utter havoc in global stock and bond markets.

The Fed will do whatever necessary to prevent this ahead of November’s election. And a stock market crash this autumn would pressure Powell to slash rates, but he really can’t with US inflation on the rise.

And this quandary would itself cause market panic. But you see, no one need discuss any of this in a Fed meeting, because everyone but overeager young journalists already knows it. 

The Just Stop Oil and related green "Apocalypse" movements are poster children for modern Cultural Marxists - sharing similarities with the Chinese communist mobs behind the Cultural Revolution of 1966. The general goal of every Marxist movement is to undermine or sabotage any opposing culture using whatever means necessary so that it can be scrapped and replaced with a new progressive/collectivist system.  In particular, such activists have long targeted western civilization for demolition with the intention of bringing about a woke revolution.

This is why we often see the same people (or types of people) involved in seemingly separate causes.  It might be protests and riots in favor of BLM, it might be Antifa efforts to disrupt conservative and moderate speakers, it might be protests to control college campuses in the name of Gaza or it may even be anti-carbon protests to derail energy security in the name of "saving the planet" from a global warming threat that doesn't actually exist.

Most interesting is the habit of Just Stop Oil activists to target famous symbols of western history for defacement or destruction.  One might ask what does the Mona Lisa or the Magna Carta have to do with oil production or climate change, and the answer is absolutely nothing.  Protesters would claim that trying to destroy these antiquities is a way to get media attention for their cause, but the only attention they ever get is negative - These actions make people want to hate protesters rather than help them. 

The real message is one of aggression, not attention.  Marxist activists are saying that western culture, not oil, is their enemy. And, if they don't get what they want they will continue to try to smash our greatest works of art and historic documents as a means to tear the west down piece by piece.  When protesters declare the Magna Carta fair game it's not a random decision; they know exactly what they are doing.  In this situation, two gullible elderly women were obviously given a task they were not able to complete:

Just Stop Oil protestors try to break the glass of the Magna Cartapic.twitter.com/68EaOeJS03

Rev. Sue Parfitt, 82, and Judy Bruce, 85, a retired biology teacher, were both arrested after they tried to smash a glass case containing the historical document at the British Library in London on Friday, London's Metropolitan Police said.  The Magna Carta is a revered 13th Century treaty that held English royalty to the same legal standards as the citizenry.  It is often cited as a precursor to later freedom-based documents like the US Constitution and a source for western democracy. 

The incompetence of Just Stop Oil protestors is the one saving grace in this scenario, and it is likely a natural consequence of the kinds of people that are attracted to the idea (high IQs apparently don't jump at the chance to join the ranks).  The group is, however, suspiciously coordinated and tends to receive favor from progressive political leaders.  It is a sad reflection of the ideological hysteria holding the world hostage today. With so many different movements chipping away at the foundations of the west, eventually something will break.            

Authored by Lance Roberts via realinvestmentadvice.com,

When it comes to the financial markets, investors have a litany of investment vehicles to choose from. The choices are nearly unlimited, from brokered certificates of deposit to complex derivative instruments. Of course, investment vehicles’ proliferation comes from investors’ demand for everything from excess benchmark returns to income generation to downside protection.

Of course, every investor wants “all the upside, with none of the downside.” While there are vehicles, like indexed annuities, that can provide no downside risk, they cap the upside return. If you buy an index fund, you can get “all the upside” and “all the risk.”

However, an email from a reader last week got me thinking about the perfect “investment vehicle” and the search for the “holy grail” of investing.

“My wife and I are looking for a place to position some of our ’emergency funds’ for a better return. Our requirements are pretty simplistic:

• Guarantee at least a 4% rate of return.
• Allow me to withdraw cash without penalty when needed.
• Reinvest all income
• If bond yields decline as expected, the value of the investment increases.

At this point, I was confident in just suggesting purchasing a 10-year Treasury bond. At current rates, the investment would yield greater than 4% and guarantee the principal. If yields decline, the bond rises in price, reinvestment of income is an option, and the investment is highly liquid.

Theoretically, this would be the “perfect investment” vehicle for their needs. I said “theoretically” because they added one more requirement just as I was about to spout off my terrific idea.

“Oh, and one more thing, the dollar value of the account must remain stable at all times.”

And that, as they say, quickly ended the “perfect investment” vehicle for their needs.

Why did the addition of “price stability” make their request impossible?

The 3-Components Of All Investments

In portfolio management, you can ONLY have two of three components of any investment or asset class:

• Safety – The return of principal without loss due to price change or fees
• Liquidity – Immediately accessible without penalties or fees
• Return – Appreciation in the price of the investment

The table below is the matrix of your options.

The takeaway is that cash is the only asset class that provides safety and liquidity. Safety comes at the cost of return. Equities are liquid and provide returns but can suffer a significant loss of principal. Bonds can offer returns through income and safety if held to maturity. But in exchange for that safety, investors must forego liquidity.

In other words, no investment can provide all three factors simultaneously. While the table above uses only Equities, Bonds, and Cash, those three factors apply to any investment vehicle you may consider.

• Fixed Annuities (Indexed) – safety and return, no liquidity. 
• Certificates of Deposit – safety and return, no liquidity.
• ETFs – liquidity and return, no safety.
• Mutual Funds – liquidity and return, no safety.
• Real Estate – safety and return, no liquidity.
• Traded REITs – liquidity and return, no safety.
• Commodities – liquidity and return, no safety.
• Gold – liquidity and return, no safety. 

You get the idea.

Let’s revisit our email question.

While I initially focused on the cash requirements, these were also funds set aside for an “emergency.” In other words, these funds must be readily available when an unexpected event arises. Since “unexpected events” tend to happen at the worst possible time, these funds should never be put at risk. The need for “safety” and “liquidity” eliminates the third factor: Return.

No matter what investment vehicle you choose, you can only have two of the three components. Such is an essential and often overlooked consideration when determining portfolio construction and allocation. 

8-Reasons To Focus On Liquidity

Liquidity is the most essential factor in making any investment. Without liquidity, I can not invest. Therefore, liquidity should always remain a high priority when managing your portfolio.

I learned a long time ago that while a “rising tide lifts all boats,” eventually, the “tide recedes.” Over the years, I made a straightforward adjustment to my portfolio management, which has served me well. When risks begin to outweigh the potential for reward, I raise cash.

The great thing about holding extra cash is that if I’m wrong, I simply make the proper adjustments to increase the risk in my portfolios. However, if I am right, I protect investment capital from destruction and spend far less time ‘getting back to even.’ Despite media commentary to the contrary, regaining losses is not an investment strategy. 

Here are 8-reasons why you should focus on liquidity first:

1) We are speculators, not investors. We buy pieces of paper at one price with hopes of selling at a higher price. Such is speculation in its purest form. When risk outweighs rewards, cash is a good option. 

2) 80% of stocks move in the direction of the market. If the market is falling, regardless of the fundamentals, the majority of stocks will decline also.

3) The best traders understand the value of cash. From Jesse Livermore to Gerald Loeb, each believed in “buying low and selling high.” If you “sell high,” you have raised cash to “buy low.”

4) Roughly 90% of what we think about investing is wrong. Two 50% declines since 2000 should have taught us to respect investment risks.

5) 80% of individual traders lose money over ANY 10-year period. Why? Investor psychology, emotional biases, lack of capital, etc. Repeated studies by Dalbar prove this. 

6) Raising cash is often a better hedge than shorting. While shorting the market, or a position, to hedge risk in a portfolio is reasonable, it also merely transfers the “risk of being wrong” from one side of the ledger to the other. Cash protects capital and eliminates risk. 

7) You can’t “buy low” if you don’t have anything to “buy with.” While the media chastises individuals for holding cash, it should be somewhat evident that without cash you can’t take advantage of opportunities.

8) Cash protects against forced liquidations. One of the biggest problems for Americans  is a lack of cash to meet emergencies. Having a cash cushion allows for handling life’s “curve-balls,” without being forced to liquidate retirement plans.Layoffs, employment changes, etc. are economically driven and tend to occur with downturns that coincide with market losses. Having cash allows you to weather the storms. 

Importantly, I want to stress that I am not talking about being 100% in cash.

I suggest that holding higher cash levels during periods of uncertainty provides both stability and opportunity.

With the political, fundamental, and economic backdrop becoming much more hostile toward investors in the intermediate term, understanding the value of cash as a “hedge” against loss becomes much more critical. 

Chasing yield at any cost has typically not ended well for most.

Of course, since Wall Street does not make fees on investors holding cash, maybe there is another reason they are so adamant that you remain invested all the time.

Lance Roberts is a Chief Portfolio Strategist/Economist for RIA Advisors. He is also the host of “The Lance Roberts Podcast” and Chief Editor of the “Real Investment Advice” website and author of “Real Investment Daily” blog and “Real Investment Report“. Follow Lance on Facebook, Twitter, Linked-In and YouTube

In defiance of repeated warnings from the Biden administration, the Ukrainian military is ramping up kamikaze drone attacks on the Russian energy complex, a move to hamper the nation's crude oil and crude product export revenues and curtail Moscow's ability to fund President Putin's 'special operation' in Ukraine.

The latest suicide drone attack struck early Sunday at Lukoil PJSC's large oil refinery in Volgograd, deep within the country and hundreds of miles east of the Ukrainian border, according to Bloomberg. 

"During the night of May 12, the air defense and electronic warfare forces fought off a drone on the territory of the Volgograd region," Governor Andrey Bocharov wrote on Telegram.

Unverified claims on X, one from OSINTtechnical said, "Overnight, Ukrainian forces successfully struck the Lukoil refinery in Volgograd, Russia. At least one drone hit the complex, reportedly setting the ELOU AVT-1 refining unit ablaze."

Overnight, Ukrainian forces successfully struck the Lukoil refinery in Volgograd, Russia.

At least one drone hit the complex, reportedly setting the ELOU AVT-1 refining unit ablaze. pic.twitter.com/qkG3qSNBTo

Belarus media outlet Nexta said, "UAVs attacked an oil refinery in Russia's Volgograd region. Propaganda media reported that after the strike, a heavy fire broke out."

⚡️ UAVs attacked an oil refinery in Russia's Volgograd region

Propaganda media reported that after the strike, a heavy fire broke out. pic.twitter.com/PO0kWg9NV9

Bloomberg noted, "The Volgograd refinery is capable of processing 14.8 million tons of oil a year and is among Russia's largest. It was previously struck by drones in February, when it temporarily cut back some of its operations."

On Thursday, a Ukrainian drone targeted Gazprom PJSC's Salavat Neftekhim, a top-producing petrochemical and oil-refining facility. On Friday, a drone strike targeted a smaller refinery in the Kaluga region.

In March, FT reported that the Biden admin was freaking out that Ukraine's drone strikes "risked driving up global oil prices."

One month later, in April, US Defense Secretary Lloyd Austin warned Ukraine that drone and missile attacks should not be focused on energy infrastructure but instead on military targets because of the risk of sending Brent crude prices over $100/bbl.

"Those attacks could have a knock-on effect in terms of the global energy situation," Austin said, adding, "Quite frankly, I think Ukraine is better served by going after tactical and operational targets that can directly influence the current fight."

In mid-April, Reuters estimated that Russia's refining capacity, which was offline due to drone attacks, was around 660,000 barrels per day, compared to 907,000 bpd offline at the end of March. Russia has stated it can repair all damaged units within two months. 

Russia's Energy Minister Nikolai Shulginov said all damaged refineries would be restarted by the beginning of June.

The main goal of the refinery drone attacks by Ukraine is to crush Moscow's funding of the war by curtailing crude product (such as diesel) exports. 

Days ago, Foreign Affairs magazine writer Sam Winter-Levy penned a note titled "Why Ukraine Should Keep Striking Russian Oil Refineries," explaining that "with less domestic refining capacity, Russia will be forced to export more of its crude oil, not less, pushing global prices down rather than up." 

If Biden's foreign policy is to keep Brent prices below $90/bbl before the November presidential elections, and if Levy's analysis is correct, then this could only mean more drone attacks. However, this risks further escalating the conflict as no peace deal is in sight and the world marches closer to World War III. 

A group of fifteen Republican Senators want the IRS to investigate whether groups involved in recent anti-Israel protests on college campuses violated their tax-exempt status by supporting Hamas, a designated terrorist group.

According to the letter, spearheaded by Sen. Joni Ernst (R-IA), the National Students for Justice in Palestine (NSJP), the AJP Educational Foundation (AJP), the Tides Foundation, the Westchester Peace Action Committee Foundation (WESPAC Foundation), and others were offered to IRS Commissioner Danny Werfel in order to determine if they "engaged in conduct warranting revocation of their tax-exempt statuses on the basis of their financial support of NSJP," Just the News reports.

The letter notes that victims of the Oct. 7 attack in Israel have sued AJP and NSJP, accusing them of being a propaganda division of Hamas, and suggests that the organizations have "control" over Students for Justice in Palestine chapters, which have been heavily involved in campus protests.

Notably, George Soros has funded Students for Justice in Palestine (NSJP) through a constellation of nonprofits which all lead to the billionaire agitator.

At three colleges, the protests are being encouraged by paid radicals who are “fellows” of a Soros-funded group called the US Campaign for Palestinian Rights (USCPR).

USCPR provides up to $7,800 for its community-based fellows and between $2,880 and $3,660 for its campus-based “fellows” in return for spending eight hours a week organizing “campaigns led by Palestinian organizations.”

They are trained to “rise up, to revolution.”

The radical group received at least $300,000 from Soros’ Open Society Foundations since 2017 and also took in $355,000 from the Rockefeller Brothers Fund since 2019. -NY Post

"It is long-established precedent that when 501(c)(3) organizations have ‘planned activities that violate laws’ or engage in activities designed ‘to induce the commission of a crime or if the accomplishment of the purpose is otherwise against public policy,’ the Internal Revenue Service (IRS) has grounds to revoke their tax-exempt status," reads the Ernst letter.

"In fact, the IRS has set the precedent that ‘organizations have been held not to qualify for IRC 501(c)(3) on grounds that the activities of the organizations in question contravened public policy even though the organizations did not violate any federal statutes or state or local laws."

The letter also points out that these organizations and the protests are supporting Hamas, which has been designated as a Foreign Terrorist Organization (FTO).

"In light of this abhorrent support for an FTO, we call on you to initiate an investigation to determine whether financial supporters of NSJP, including but not limited to AJP, the WESPAC Foundation, and the Tides Foundation, have engaged in conduct warranting their tax-exempt status to be stripped," they added.

The groups have defended themselves. For example, in a recent post on X, NSJP wrote that its members "are developing a generation of disciplined, politicized young leaders who will carry the torch of our struggle," adding "Long live the Student Intifada."

All of that said - Ernst is a huge recipient of pro-Israel campaign donations and has attended AIPAC events...

...so one has to wonder if using the IRS against Israel's enemies on this very horseshoe issue is anywhere near 'good faith.'

Read the letter below:

Via The Cradle

The UN Relief and Works Agency for Palestine Refugees (UNRWA) announced on Thursday that it is shutting down its headquarters in east Jerusalem after Israeli settlers carried out an arson attack on its building.

This was the second settler attack on the UNRWA building in less than a week, according to the agency’s general commissioner, Phillipe Lazzarini. 

"Our director, with the help of other staff, had to put out the fire themselves as it took the Israeli fire extinguishers and police a while before they turned up. This is an outrageous development. Once again, the lives of UN staff were at serious risk."

"In light of this second appalling incident in less than a week, I have taken the decision to close down our compound until proper security is restored," Lazzarini said. 

Video footage on social media showed the UNRWA building in flames as settlers were heard cheering in the background. There were no injuries, but the fires caused significant damage to property, according to WAFA news agency.

Just two days earlier, settlers attacked the same headquarters, throwing stones at UN staff members "under the watch of the Israeli police," Lazzarini added. 

Earlier today, Israeli settlers launched an attack on the UNRWA headquarters in occupied Jerusalem, setting fire to its surroundings. Israeli authorities have not intervened or made any arrests among the Israeli attackers. pic.twitter.com/Ck6LNj1rjV

The perpetrators of these attacks must be investigated, and those responsible must be held accountable. Anything less will set a new dangerous standard,” he said, adding that settlers have continuously attacked and harassed UNRWA staff for months. “On several occasions, Israeli extremists threatened our staff with guns.”

Settlers have been staging violent and provocative protests outside UNRWA headquarters for the past two months. 

The UN agency has been operating in support of Palestinian refugees and internally displaced Palestinians since 1950. The organization provides education, health care, and other services. In recent years, it has suffered a severe lack of funding for its global operations.

This evening, Israeli residents set fire twice to the perimeter of the UNRWA Headquarters in occupied East Jerusalem.

This took place while UNRWA and other UN Agencies’ staff were on the compound.
While there were no casualties among our staff, the fire caused extensive damage… pic.twitter.com/ZqHFDNkiWC

After the October 7 attacks, Israel accused UNRWA staff members of taking part in the attack.