Kissinger's Last Mideast Peace Plan
Ahead Of The Curve Until The End
The late Henry Kissinger was no stranger to the Mideast, having helped negotiate an end to the 1973 Yom Kippur War in a way that later led to peace between Israel and Egypt. He was ahead of the curve then in seeing the possibility of peace between the two countries, and after Hamas's raid on Israel on October 7th, Kissinger was again ahead of the curve in seeing that it was time to move on from a two-state solution between Israel and the Palestinians. In what may have been his last interview ever on October 18th, Kissinger said this to Rolf Dobelli [emphasis ours]:
Understandably, Israel is reacting with full force against Hamas. If you, Dr. Kissinger, were in Netanyahu’s shoes, would you have reacted differently?
Well, I’m not in Netanyahu’s shoes so that I cannot judge all the forces that impinge on him. I am in favor of a peaceful outcome. I don’t see a peaceful outcome with Hamas involved in the conflict. I would favor negotiations between the Arab world and Israel. I do not see, especially after these events, that direct negotiations between Israel and the Palestinians are very fruitful.
Can there ever be lasting peace in the Middle East without a two-state solution?
A formal peace doesn’t guarantee a lasting peace. The difficulty of the two-state solution is shown by the experience of Hamas. Gaza was made quasi-independent by [former Israeli Prime Minister Ariel] Sharon in order to test the possibility of a two-state solution. It has led, in fact, to a much more complex situation. It has become so much worse in the last two years than it has been in 2005. So the two-state solution doesn’t guarantee that what we saw in the last weeks won’t happen again.
Imagine for a moment you are secretary of State. And we advance forward a few months. Hopefully then Israel has gotten rid of the Hamas terrorists. Then what do we do? What becomes of Gaza? How does Israel feel secure in that world? How do you negotiate such an outcome?
I believe the West Bank should be put under Jordanian control rather than aim for a two-state solution which leaves one of the two territories determined to overthrow Israel. Egypt has moved closer to the Arab side, so Israel will have a very difficult time going forward. I hope that at the end of it there will be a negotiation, as I had the privilege to conduct at the end of the Yom Kippur War. At that time, Israel was stronger relative to the surrounding powers. Nowadays, it requires a greater involvement of America to prevent a continuation of the conflict.
Recognizing The Insanity Of The Status Quo
In a sense, Kissinger's observation that the two-state solution had failed was obvious: we noted it ourselves here on October 7th (A Moment Of Clarity In The Mideast):
The Insanity Of The Status Quo
Under the Oslo Accords, both the Gaza Strip and parts of the West Bank are considered to be the territory of the Palestinian Authority, but Hamas took over the Gaza Strip in 2007.
In the West Bank, although the peace process has been stalled for years, the old land-for-peace formula still at least has a pulse; in Gaza, Israel forcibly removed the last of its settlers in 2005. Some of those settlers ran high-tech greenhouses they used to profitably sell produce internationally. A group of American Jews, including former World Bank President James Wolfensohn, bought the greenhouses from the settlers and donated them to the Palestinians in Gaza. They were prompted looted.
For the last 16 years there's been no hope of peace between Israel and Gaza, where 2.3 million Palestinians are boxed into a densely populated strip with Israel on two sides, Egypt on one, and the Mediterranean on the other.
Who benefits from this arrangement? Certainly not most of the Palestinians or the Israelis.
The Refugee Racket
Palestinian refugees are unique in the world in two respects. For starters, they are the only multi-generational refugees. The descendants of refugees from other wars and partitions, such as the partition of India into India and Pakistan, are no longer refugees: they are citizens of countries where they live now. But Palestinians in Gaza who are descendants of refugees from the 1967 Six Day War, during which Israel captured Gaza from Egypt, are still considered refugees today.
The other way Palestinian refugees are unique is that they have their own UN agency dedicated to them, UNRWA, The UN Relief And Works Agency, which employs a staff of 30,000. The rest of the world's refugees are served by UNHCR, The UN Refugee Agency, which has a staff of just under 19,000. Those 30,000 UNRWA staffers would be unemployed in the event Gaza became part of an independent Palestine, or Gaza's residents were welcomed as citizens in neighboring Arab countries, or elsewhere.
Other Beneficiaries Of The Status Quo
Opponents of Israel (and of normalization of relations between Israel and Arab states) would also lose a political weapon against the country in the event every Gazan were settled elsewhere.
The military industrial complex in Israel and elsewhere also benefits from continued conflict. Just last month, the U.S. House of Representatives approved another $1 billion for Israel's Iron Dome anti-rocket system. This is a flawed, high-tech solution to a low-tech problem: 2.3 million people who hate you living right next to you.
But it took courage for someone of Kissinger's stature to acknowledge it publicly. Even now, world leaders including the President of the United States cling to the failed two-state solution.
A two-state solution is the only way to guarantee the long-term security of both the Israeli and the Palestinian people.
— President Biden (@POTUS) November 26, 2023
To make sure Israelis and Palestinians alike can live in equal measures of freedom and dignity.
We will not give up on working toward this goal.
Perhaps with Kissinger's imprimatur, leaders will finally be abandon a failed approach and find a new path toward peace.
In Case You Missed It
In our last post (Waiting For The World To End),
Waiting For The World To End
— Portfolio Armor (@PortfolioArmor) December 1, 2023
How we made money in the meantime this week. $ULTA $FTCHhttps://t.co/TbXImBZeVg
We shared the results of our quantitative trading approach last week. After the previous week in which five of the seven trades we placed ended up being winners, last week five out of five were winners:
Options Trades
Call spread on Kroger (KR 2.52%↑). Entered at a net debit of $0.41 on 11/29; exited at a net debit of $0.57 on 11/30. Profit: 39%.
Call spread on Dollar Tree (DLTR 0.00%↑). Entered at a net debit of $0.45 on 11/28; exited at a net credit of $0.80 on 11/29. Profit: 78%.
Put spread on Farfetch (FTCH 0.00%↑). Entered at a net debit of $0.29 on 11/28; exited at a net credit of $0.48 on 11/29. Profit: 68%.
Call spread on Snowflake (SNOW -3.42%↓). Entered at a net debit of $2.30 on 11/29; exited at a net credit of $4.74 on 11/30. Profit: 106%.
Call spread on Ulta Beauty (ULTA -0.94%↓). Entered at a net debit of $2.40 on 11/30; exited at a net credit of $4.95 on 12/1. Profit: 106%.
As we noted there, while we don't expect every week to go this well, the results of the last two weeks suggest we may be on the right track. If you'd like a heads up when we place our trades next week, feel free to subscribe to our trading Substack/occasional email list below.
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