AGF Management Limited

04/19/2024 | News release | Distributed by Public on 04/19/2024 04:44

Israel’s Modest Air Strikes; Huge Votes in Congress this Weekend

WE WERE UNABLE TO GET COMMENTS from our sources during the night, but as the sun rises in Washington this morning it's apparent that Israel's modest air strikes in Iran were simply intended to send a message to Tehran - without risking a significant widening of the Mideast conflict.

THE SIGNAL IS NOW CLEAR - Israel can strike deep into Iran with impunity, while Israel's "Iron Dome" air defense system can keep Iranian drones and missiles from inflicting serious damage. It's been a humiliating week for the Iranians; they look toothless.

WE EXPECT A RESUMPTION OF THE PROXY WAR, with Iran continuing to fund Hamas, Hezbollah and the Houthi rebels, who will continue to jeopardize stability in the Red Sea. Further Israeli air strikes, close to Iran's nuclear facilities, can't be ruled out but it appears that neither Israel nor Iran wants to see a widening of the war.

ONCE THE DUST SETTLES AFTER Israel's spectacular military success this week, we think negotiations toward a cease fire are possible. But that's not imminent - especially as Israel opens a new front in Gaza and copes with losing the public relations battle throughout the West, especially on U.S. college campuses.

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A DRAMATIC WEEKEND is shaping up on Capitol Hill, as Democrats and Republicans band together to pass huge bills to aid Ukraine, Israel, Taiwan and others - a repudiation of House radical conservatives who are furious with Speaker Mike Johnson, who will bring several bills to the floor tomorrow.

THE ULTRA-CONSERVATIVES have at least a dozen votes more than needed to oust Johnson at any point in the next few days.

OUR SENSE IS THAT THE AID PACKAGES will win approval, but it's less clear whether Johnson will get the boot. He's popular in the House and there's no better alternative to him, so he may cling to power. But Johnson will be forever remembered as the Speaker who prevailed with votes from the opposing party, and kept his job because of members of the opposing party.

IT'S ENTIRELY POSSIBLE that the majority of Republicans will find a way to keep Johnson in power - on a very short leash, with an explicit threat to oust him if he continues to work with Democrats.

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