{"id":249991,"date":"2023-12-18T12:00:42","date_gmt":"2023-12-18T12:00:42","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=249991"},"modified":"2023-12-11T10:33:35","modified_gmt":"2023-12-11T10:33:35","slug":"suspicious-israeli-stock-market-activity-hints-at-foreknowledge-of-october-7-attack","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2023\/12\/suspicious-israeli-stock-market-activity-hints-at-foreknowledge-of-october-7-attack\/","title":{"rendered":"Suspicious Israeli Stock Market Activity Hints at Foreknowledge of October 7 Attack"},"content":{"rendered":"
\"\"<\/a>

Illustration by MintPress News<\/p><\/div>\n

False Flag Like 9\/11? <\/em><\/strong>Hearkening back to the days preceding the 9\/11 attacks, suspicious stock market activity suggests that someone with prior knowledge of Operation Al-Aqsa Flood sought to capitalize on the events on October 7.<\/em><\/p><\/blockquote>\n

\u00a07 Dec 2023 – <\/em>A new academic study<\/a> has made a shocking and highly controversial finding. Suspicious Israeli stock market activity in the days preceding Operation Al-Aqsa Flood on October 7 indicates that a particular party had foreknowledge of the impending attack and used that information to directly profit from the panic that ensued.<\/div>\n
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The paper, authored by Robert J. Jackson Jr. of\u00a0 New York University School of Law and Joshua Mitts of New York University School of Law, concludes that based on a \u201csignificant spike\u201d in short selling of listed Israeli companies, persons unknown were aware of the operation was impending, and sought to profit illicitly. Short selling \u2013 or shorting \u2013 allows traders to bet a stock will perform poorly and reap rewards if they\u2019re correct.<\/p>\n

Shorting is a relatively rare practice compared to traditional trading and with good reason. Losses can be vast if forecast poor performance doesn\u2019t materialize, and many investment advisors warn against<\/a> engaging in the practice under any circumstances. Strikingly though, the academics found shorting of Israeli companies in days immediately before October 7 \u201cfar exceeded short selling that occurred during numerous other periods of crisis, including the recession following the financial crisis, the 2014 Israel-Gaza war, and the COVID-19 pandemic.\u201d<\/p>\n

The pair argue this activity may reflect attempts by Hamas operatives to profit from, if not outright finance, their forthcoming attack, an allegation eagerly taken up<\/a> by Hebrew newspaper Haaretz. Meanwhile, Israeli finance rag Globes attacked the study<\/a>, claiming \u201chuge errors\u201d by its authors in overestimating the profits of individuals who shorted Israeli stocks. The pair mistakenly quoted returns in agorot, a denomination of Israeli currency, as shekels \u2013 in pennies as dollars in U.S. terms \u2013 leading them to inflate investor returns by a magnitude of 100.<\/p>\n

Yet, the outlet acknowledged a \u201cconsistent rise in short trading balances on [Israeli] shares prior to the outbreak of the war.\u201d Moreover, the Israeli government has taken the paper\u2019s findings so seriously that an official investigation has been launched<\/a> to ascertain the truth. As we shall see, there is good reason to believe that if someone sought to enrich themselves due to foreknowledge of Operation Al-Aqsa Flood, it is unlikely they were connected to Hamas.<\/p>\n

The paper notes numerous historical precedents for such activity, which \u201coccurs in gaps in U.S. and international enforcement of legal prohibitions on informed trading.\u201d Research on \u201cprofitable trading on the basis of information about coming military conflict\u201d is an underdeveloped academic field. Such lack of oversight and scrutiny around shorting by Western regulators and watchdogs may explain who profited this time and why.<\/p>\n

\u2018Suddenly and Significantly\u2019<\/h2>\n

The academics conclude, \u201cOur evidence is consistent with informed traders anticipating and profiting from the Hamas attack.\u201d Concerns about the paper muddling up profit totals aside, this finding is highly persuasive. Multiple datasets reviewed therein amply show an indeed \u201csignificant spike\u201d in short selling in the immediate leadup to Operation Al-Aqsa Flood \u2013 and a supremely suspicious one at that.<\/p>\n

For example, the shorting of dozens of Israeli companies listed on the Tel Aviv stock exchange \u201cincreased dramatically\u201d before the attack. One firm alone saw 4.43 million new shares shorted from September 14 to October 5. On U.S. exchanges, too, there was a \u201csharp and unusual increase, just before the attacks\u201d in highly risky short-dated options<\/a> being placed on Israeli stocks, which expired almost immediately after the attack started.<\/p>\n

\"Israeli
A graph showing shorting of the Israeli stock exchange ETF pre-Operation Al-Aqsa Flood, as part of the wider market<\/figcaption><\/figure>\n

Similarly, on October 2, the shorting of the MSCI Israel Exchange Traded Fund (ETF), a passive investment vehicle tracking the performance of the Israeli stock exchange overall, \u201csuddenly, and significantly, spiked.\u201d For context, the authors note this was the 30th-highest daily shorting volume ever experienced by the ETF over the 3,570 trading days leading up to Operation Al-Aqsa Flood. In other words, it was one of the biggest bets on poor Israeli stock exchange performance since 2009.<\/p>\n

This shorting \u201cfar exceeded\u201d the shorting of Israeli stocks at the start of the COVID-19 pandemic, which briefly produced one of the biggest international stock market collapses in history. In March 2020, the Dow Jones Industrial Average dropped 2000 points, effectively vaporizing<\/a> trillions of dollars from the global economy, in \u201cthe biggest ever fall in intraday trading\u201d yet recorded. No wonder the authors conclude:<\/p>\n

“It is extremely unlikely that the volume of short selling on October 2nd occurred by random chance.\u201d<\/em><\/p><\/blockquote>\n

Another particularly compelling finding is the identification of \u201csimilar patterns\u201d in trading of the Israeli ETF in April 2023 \u2013 right when, it has since been reported<\/a>, Hamas was planning to execute a similar attack. The strike would\u2019ve followed what transpired in October closely but was canceled after Tel Aviv publicly raised its national alert level due to Israeli intelligence agencies catching wind in advance.<\/p>\n

\"Israeli
Shorting activity on the Israeli ETF since October, 2022<\/figcaption><\/figure>\n

The attack was timed to start on the eve of Passover, April 5. Two days earlier, the shorting of the Israeli ETF \u201cpeaked\u2026at levels very similar to those observed\u201d on October 2. The recorded volume \u201cwas far higher (by an order of magnitude) than other days prior\u201d:<\/p>\n

“This evidence strengthens the interpretation that the trading observed in October and April was related to the Hamas attack, rather than random noise.\u201d<\/em><\/p><\/blockquote>\n

\u2018Profit From Tragedy\u2019<\/h2>\n

Exactly who was behind this activity isn\u2019t yet clear from publicly available data. Their identities will nonetheless be known by the U.S. Financial Industry Regulatory Authority and the Securities and Exchange Commission (SEC). The paper\u2019s authors suggest these agencies delve deeper to \u201c[understand] why, and how, financial markets may have anticipated\u201d the events of October 7.<\/p>\n

So far, there is no sign of an official probe being launched stateside, although there are precedents for such action. As the paper records, following 9\/11, the SEC looked intensively into whether particular \u201cmarket dynamics\u201d before that fateful day \u201creflected advance knowledge\u201d of the attacks. Three years later, though, the Commission reported it had not been able to \u201cdevelop any evidence suggesting that anyone who had advance knowledge of the terrorist attacks\u2026sought to profit from that knowledge.\u201d<\/p>\n

The academics add that since then, three separate academic papers have probed the same issue, pointing to very different conclusions. In 2006<\/a>, University of Chicago professor Allen Poteshman concluded the activity examined by the SEC was \u201cconsistent with informed investors having traded\u2026in advance of the attacks.\u201d<\/p>\n

In 2011<\/a>, an international study team identified \u201cabnormal trading\u201d indicative of \u201cinsiders anticipating the 9\/11 attacks.\u201d In 2015, researchers from the University of Zurich confirmed unusual airline, bank, and reinsurer stock trading before 9\/11.<\/p>\n

The question of whether foreknowledge of the 9\/11 attacks motivated insider trading was, at the time, treated with the utmost urgency by Western government officials, regulators, law enforcement, and the media. Open source records showed companies adversely affected by the event were abruptly shorted at record levels in the weeks prior, while investment in stocks that stood to benefit rocketed. On September 10, 2001, the purchase of shares of U.S. weapons manufacturer Raytheon inexplicably soared sixfold. A week later, their value had almost doubled.<\/p>\n

The profits involved both ways were huge. As a contemporary mainstream report notes<\/a>, five days before 9\/11, over 2,000 short bets totaling $180,000 were made against United Airlines \u2013 ninety times more in a single day than in the prior three weeks. The company\u2019s stock collapsed once the World Trade Center was struck, and the value of that investment skyrocketed to $2.4 million. This was just one example of suspicious activity among many investigated by U.S. authorities.<\/p>\n

Elsewhere, probes into the matter were launched in several European countries and seemingly produced quick results. On September 24 that year, Belgium\u2019s finance minister said investigations<\/a> had already led to \u201cstrong suspicions that British markets may have been used\u201d for insider trading pre-9\/11. The same day, Germany\u2019s central bank president forcefully declared<\/a>, \u201cWhat we found makes us sure that people connected to the terrorists must have been trying to profit from this tragedy.\u201d<\/p>\n

Yet, like the SEC\u2019s, these investigations ultimately failed to produce results. The 9\/11 Commission report<\/a> summarily dismissed the issue altogether on the perplexing grounds that individuals identified as responsible for the trades \u201chad no conceivable ties to Al Qaeda.\u201d A declassified 2003 FBI document<\/a> assessing suspicious pre-9\/11 trades reveals who at least two of these investors were while providing a likely explanation for why authorities did not aggressively pursue the issue.<\/p>\n

One of the trades examined by the Bureau was the purchase of 56,000 shares of Stratesec between September 6 and September 10, 2001. The company provided security systems to airports, including New York City\u2019s Dulles, from where one of the hijacked planes departed, United Airlines, which suffered two hijackings on 9\/11, and the World Trade Center. Its share price almost doubled following the attacks.<\/p>\n

The trades traced back<\/a> to Wirt D. Walker III, a distant relative of the Bush family and business partner of Marvin Bush, then-President George W. Bush\u2019s brother. According to the declassified file, the FBI never bothered to interview him about the trades, ostensibly as their background investigation revealed \u201cno ties to terrorism or other negative information.\u201d<\/p>\n

\u2018Point by Point\u2019<\/h2>\n

In the wake of Hamas\u2019 October 7 incursion into Israel, shock and bewilderment abounded widely. Many reeled at the astonishing \u201cintelligence failure\u201d undoubtedly necessary to allow the attack to slip through the most monstrous and deadly concentration camp walls ever constructed. Multiple Israeli and Western spying veterans with intimate insider knowledge of Tel Aviv\u2019s modern surveillance and security systems expressed disbelief<\/a> that such an attack could\u2019ve happened in the first place, let alone taken the Israeli government by such apparent surprise.<\/p>\n

Even Hamas operatives themselves were reportedly<\/a> stunned by their success. They had not expected to be able to push so far into Tel Aviv and effectively ran out of plan past a certain point. Palestinians and their supporters have reasonably argued that Israeli Forces are a paper tiger, accustomed since their embarrassing 2006 expulsion from Lebanon to brutal imperialist crackdowns against unarmed civilians and ill-equipped for actual battle against a well-trained insurgent force.<\/p>\n

Yet, on an almost daily basis since October 7, report<\/a> after report has made it abundantly clear that Tel Aviv was given countless warnings and possessed intelligence<\/a>, meaning its vast security and military apparatus duties could \u2013 should \u2013 have seen the attack coming. This begs the obvious question of why that didn\u2019t happen.<\/p>\n

To detail just two recent examples, on November 30, the New York Times revealed how<\/a> Israeli officials obtained a detailed 40-page battle plan outlining in precise detail, \u201cpoint by point,\u201d Operation Al-Aqsa Flood over a year before it happened. Meanwhile, it now seems that mere hours before Hamas struck, Israeli security forces \u201chad enough warning signs\u201d of what was impending to prepare a response but did nothing and told no one, including attendees of the Nova music festival and its organizers.<\/p>\n

The author of this article makes no comment on theories that Operation Al-Aqsa Flood was actively permitted to go ahead by Tel Aviv to secure a pretext for executing the horrific genocide currently unfolding in Gaza. The attack\u2019s success may well be attributable to Israel\u2019s complacency and a genuine \u201cintelligence failure\u201d of epic proportions.<\/p>\n

However, countless indications that so many knew something was brewing for so long \u2013 including foreign governments and intelligence agencies<\/a> \u2013 raises the prospect that someone, or some individuals with prior knowledge of Operation Al-Aqsa Flood, sought to capitalize accordingly. While Wirt D. Walker III, for example, almost undoubtedly played no personal role in planning or executing 9\/11 or allowing it to happen, his privileged position and connections may have granted him access to sensitive information inaccessible to the average person.<\/p>\n

Probing such connections and information is not something regulators and law enforcement agencies across the Western world are in the business of doing, about which shadowy actors and agencies are, of course, well aware. Tension, unrest, and cataclysmic events worldwide dependably send shares in major \u201cdefense\u201d firms surging and often illuminate the forces responsible. Tracking which stocks are suffering, where and when, and whether anyone has sought to profit as a result may be just as incisive.<\/p>\n

______________________________________________<\/em><\/p>\n

\"\"<\/a><\/em> Kit Klarenberg is an investigative journalist exploring the role of intelligence services in shaping politics and perceptions.<\/em><\/p>\n

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Go to Original \u2013 mintpressnews.com<\/a><\/p>\n

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