Not a great post for 2008’s last LUNCHTIME piece, but unfortunately, the Israel-Hamas conflict is the biggest news of the day. Hitting headlines everywhere midday are the words “ALL-OUT WAR” regarding the conflict. FT STORY BELOW:
http://www.ft.com/cms/s/0/ae47e0da-d5da-11dd-a9cc-000077b07658.html
“”" Ehud Barak, Israel’s defence minister, told parliament Monday that the country was engaged in an “all-out war against Hamas and its kind”, sounding a line that appeared markedly tougher than earlier statements by other ministers… An Israeli military official told the Financial Times that more than 300 targets had been hit so far, but added that “it is still very early days”. “”"
Obviously a terrible situation, but regardless, markets still react.
OIL & GOLD are the obvious assets that stand to move higher, regardless of the US dollar’s actions. Both commodities will move higher as the hoarding mentality kicks in.
The US dollar’s eventual collapse will also benefit commodities, leading to further rallies in both OIL & GOLD. Obama takes office in late-Jan — expect the USD to start wavering again then.
But also note that in the case of OIL & GOLD, the former is a TRADING LONG & the latter is a STRUCTURAL LONG.
The oil rally may be limited to still-weak demand, hence many have not bought in yet. But if the oil bounce continues, then technical traders may latch on for the ride & add to upside momentum. Meanwhile, the gold rally is expected to continue into 2010 as the US dollar standard collapses — CLSA’s Chris Wood has a $3300/oz target on gold by 2010-end.
BUY OIL: {UCO US equity DES <Go>}, {883 HK equity <Go>}, {047050 KS equity <Go>}
BUY GOLD: {DGP US equity <Go>}, {2840 HK equity <Go>}, {2899 HK equity <Go>}
>>> FT: ISRAEL IN ‘ALL-OUT WAR’ ON HAMAS<<<
By Tobias Buck in Jerusalem, Harvey Morris at the United Nations, and Andrew Ward in Washington
Published: December 29 2008 19:15 | Last updated: December 29 2008 21:49
Israel on Monday declared it was in “all-out war” against militant Palestinian group Hamas as international calls grew for a diplomatic solution to be found.
Hamas and other militant Palestinian groups on Monday fired at least 60 rockets at Israeli towns, suggesting that three days of heavy bombardment of the Gaza Strip by Israeli warplanes has yet to dent the Islamists’ ability to inflict pain on its enemy.
The barrage from the Gaza Strip, which killed two Israeli and injured many more, came amid further massive air strikes on the Hamas-controlled territory and warnings that Israel would escalate attacks that have already claimed the lives of at least 325 Palestinians. A United Nations agency said it had determined that at least 62 civilians had been killed in Gaza.
Ehud Barak, Israel’s defence minister, told parliament Monday that the country was engaged in an “all-out war against Hamas and its kind”, sounding a line that appeared markedly tougher than earlier statements by other ministers.
In a sign that the Israeli army may be moving closer to a ground assault, the area surrounding the Gaza Strip was declared a “closed military zone”, a move that would allow commanders secrecy should they decide to launch an incursion.
An Israeli military official told the Financial Times that more than 300 targets had been hit so far, but added that “it is still very early days”.
Mr Barak’s comments fuelled investor concerns that the conflict could further destabilise the region. On Monday, the US oil price rose 12 per cent to $42.20 a barrel, before easing to $37.71, while gold rose 1.5 per cent to $880.50.
Calls for both sides to find a diplomatic solution to the crisis have been growing. Bernard Kouchner, French foreign minister, on Monday night called for an emergency meeting of his European counterparts in Paris on Tuesday.
The Bush administration said it was “vigorously engaged” in trying to find an end to the crisis even if it backed Israel’s right to defend itself against rocket attacks by Hamas.
President George W. Bush and Condoleezza Rice, secretary of state, have held phone conversations with Israeli and Arab leaders over the past days in a bid to calm tensions, although with less than three weeks before it leaves office, the administration appears to have little leverage.
Barack Obama, US president-elect, has so far remained silent but Gordon Johndroe, White House spokesman, said it was in contact with his transition team.
Ban Ki-moon, UN secretary-general, declared that Middle Eastern and world leaders had so far not done enough to halt the escalation.
Additional reporting by Ben Hall in Paris
