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Massive Mushroom Cloud 'Test' Blast Rattles Uninformed Residents Outside Jerusalem

Zero Rss
1 month ago
Massive Mushroom Cloud 'Test' Blast Rattles Uninformed Residents Outside Jerusalem

Late Saturday night, a massive explosion and a bright fireball illuminated the skies over Israel's Beit Shemesh, deeply rattling local residents and setting off rampant speculation in local media and online commentary. 

The area lies just 19 miles west of Jerusalem, close enough to be located within Jerusalem District. Curiously, the state-owned Tomer rocket propulsion defense ministry-linked firm subsequently sought clarify that the blast was actually a controlled, pre-planned test and that authorities were notified in advance.

However, community members have complained about receiving absolutely no warning, and were shocked at the immensity of the blast which lit up the night sky, visible for many miles.

Tensions were already running high in the city which had been struck multiple times by Iranian missiles during the recent war. The sudden detonation fueled widespread anxiety and anger among residents already on edge, bracing for the potential renew of the Iran war and thus Iranian ballistic missile attacks.

Times of Israel has cited Channel 12, saying that "the test involved propellants for rockets, including those with a range of thousands of kilometers."

The same report interestingly called it "apocalyptic" in appearance but suggested this was misleading:

On Sunday, Kan reported that in the wake of the panic caused by the blast, a meeting was held at Tomer during which it was decided, in coordination with the Defense Ministry, to warn the public ahead of similar tests.

Tomer sources told the broadcaster that due to operational needs, the company is conducting testing at all hours, including during the night.

According to Kan, the company recently hired dozens of new employees, and the test was scheduled at night due to production constraints. Sources said it was carried out five kilometers from any population areas and that weather conditions had made the blast appear more "apocalyptic" than it actually was.

But it was significant enough to result in the convening of Israeli emergency management and defense officials, who subsequently told the public an investigation would ensue. The Defense Ministry said in the aftermath that "the issue of advance warning to the public will be examined with the company."

MASSIVE MUSHROOM CLOUD explodes in Israel pic.twitter.com/ZE9WywA1rX

— RT (@RT_com) May 16, 2026

The company in question, Tomer, also separately stated, "A routine and planned test was carried out, conducted according to plan and achieving all its objectives."

It explained: "All emergency forces were notified in advance, as is customary, and the fact that emergency and rescue forces were not called in attests to this. The videos filmed from a distance amplified the force of the explosion and did not reflect the fact that this was a routine event."

But longtime resident and Beit Shemesh City Council member David Gozlan shot back, "There were quarries here, there were explosions at the Hartuv quarries, there were quite a few things here - but we have never experienced anything like this."

The whole incident saw US 'security experts' quickly speculate and weigh in, and try and make sense of it on Sunday morning...

ISRAEL SAYS MASSIVE EXPLOSION IS "CONTROLLED DEMOLITION" ; VIDEOS SHOW A DIFFERENT STORY

UAE NUCLEAR POWER PLANT ALSO ATTACKED TODAY!

w/ Fmr. US Navy SCPO Malcolm Nance https://t.co/msIgXcSk74

— Mario Nawfal (@MarioNawfal) May 17, 2026

Naturally the biggest fear among locals was that a final big Iranian attack was underway, also given prior reports of hypersonic missiles launched on Israel during the height of the 38-day Operation Epic Fury bombing campaign on the Islamic Republic.

Israelis across the country spent many anxious and sleepless nights in bomb shelters and hundreds of Iranian projectiles rained down - many of them targeting defense industrial sites in the Israeli countryside.

Tyler Durden Sun, 05/17/2026 - 13:25
Tyler Durden

AI vs Affordability And Rates

Zero Rss
1 month ago
AI vs Affordability And Rates

By Peter Tchir of Academy Securities

Last week, we contemplated, for the first time, that we might need to Understand Universal Basic Income. The timing was very good as on Monday, South Korea floated the idea of transferring some AI-driven tax revenue to its citizens. As uncertainty around jobs, income, and costs continue to weigh on overall confidence, expect this subject to get more airtime in the political arena. The concept of UBI does go hand in hand with two competing themes: AI and Affordability.

China, Iran, and a Whole Lotta Nothing

Iran took a backseat to the Summit in China. We had relatively low expectations for the Summit. The cards were stacked somewhat in China’s favor as examined in China and Trade. It turns out that even our low expectations seemed to have set the bar too high. Friday’s title pretty much sums it up: My President Went to Beijing and all I got was this Crummy T-Shirt. There may yet be some deals announced, either with Iran or with China, but it looks like we are starting the week roughly where we started the prior week, but with even lower expectations.

The Oil Curve

While Brent crude is most impacted by the ongoing problems in the Middle East, we will stick with WTI because that is what affects Americans the most.

One of the talking points for the admin had been that the oil market was predicting a “quick” resolution. Some officials pointed to the August contracts as demonstrating that $100 oil was a blip and things would “normalize” quickly. While $80 was still higher than pre-war, the argument had some legs. But now, the August contract is up to $95, and we are seeing $80 priced in all the way into 2027. This is certainly “higher for longer.” What is increasingly concerning is that it is difficult to tell if this is pricing in a re-opening or not. It was entirely plausible, a month or more ago, to believe that with the Strait of Hormuz getting back to normal levels of transit, global energy prices would “normalize” quickly. It is increasingly unclear what the “new” normal is. How much damage has been done to the “organism” that is energy? How quickly can things be fixed? Is the “new” normal the same as the “old” normal (see "Why One Bank Thinks It's "Magical Thinking" That Hormuz Reopens In June")?

Increasingly there are more and more questions about how long the damage will last, and if that damage will continue to elevate not just the price of oil, but also gasoline, diesel, jet fuel, etc.

The U.S. can continue to release its Strategic Petroleum Reserves (SPR). It is unclear how low the reserves can go (I’m told that some amount needs to be left in place for structural integrity). We have released about ½ of what was added back to the SPR. Keep an eye on this, as it does limit our options over time. No one is expecting the problems to last that long, yet here we are, 3 months into the conflict, and transit through the Strait remains limited. Higher for longer in the oil market is the single biggest issue for Global Affordability.

AI versus Affordability

We received some consumer spending data this week which wasn’t too bad. It did seem to highlight, yet again, the problems facing people in the lower income brackets. I’m not convinced it doesn’t obfuscate that we are spending more to get less, but that is for another day. But here is a “simplified” version of a chart I’ve seen in various formats.

Companies servicing the consumer are not seeing much appreciation in their stock price.

Companies making chips are growing like gangbusters!

Is this sustainable? That question is being asked with increased urgency. The “parabolic” rise is raising some concerns. Without a doubt, this is the sector experiencing growth. It does seem to justify not only today’s prices, but also possibly even higher multiples. The earnings engine (and growth) is there, but this market has had a habit of hitting “high-conviction” trades.

I find this chart extremely weird, but also interesting.

SOXL is a 3x leveraged SOX ETF. The assets in this ETF are about $20 billion, but the shares outstanding have been declining. While it may be inappropriate to label SOXL as a “degen” trade, I’m going to go there. “Degen” is an “affectionate” way of describing a group of very aggressive investors. Whether it is day trading leveraged ETFs, making bets in crypto altcoins, or playing in 0DTE options, there is a crowd of very aggressive traders that I will call “degen” for now (Warren Buffett would probably just call them gamblers).

I do think this crowd represents the “tip of the spear” on retail sentiment. If that assessment is correct, then it might indicate that retail is done (or almost done) fueling this trade.

The SOXX ETF weighs in at $33 billion (I had to do a double take, that it is “only” $33 billion while SOXL is $20 billion). The share count here tends to be more correlated with price. If anything, the last decline in SOXX was possibly telegraphed by a declining share count.

My view is that retail is slowing down on the semi-trade, just as institutions, including hedge funds, are treating it as a “must-have” position.

Retail, unlike funds, don’t have stop losses. Is this setting up for a pullback? Based more on positioning, and who is positioned, rather than the fundamentals?

Without the AI and semi story, market averages would be much lower. That is a fact. Is there anything to indicate that this trade cannot continue? No. But, I am curious what retail is up to here, and whether we are seeing enough of a pullback to create a reasonable pullback?

Which Brings Us To Rates

Yes, I “cherry picked” April 2024 as a starting point, because the 10-year U.S. Treasury yield is unchanged, while rates across the globe have risen. Most noticeably for Japan. In 2 years, the 10-year JGB went from yielding less than 1% to almost 3%. This is incredibly important. Japan as a “nation of savers” has been funding much of the world’s debt. I remain convinced that “at or near-zero” bond buyers of all levels of sophistication will take steps to get positive yield. So, when Japan hovered near 0% on rates, many investors would find alternatives to their domestic market to get yield. That has changed.

Globally, U.S. Treasuries, are fairly “generic.”

  • If you do not need dollar exposure, you have local FX bonds that can serve your needs.
  • All countries face a variety of risks to their economy. All central banks are trying to navigate the data, their expectations, and their mandate. It is less certain today how the U.S. central bank will respond to data than it was a few months ago – so that uncertainty should have a cost?
    • It is likely one reason why our agency debt team is seeing agency and super sovereign debt spreads to Treasuries at very low levels.

Defense Spending Requires Money

  • While ProSec is about far more than defense spending, it certainly incorporates the need to spend more. Japan – spending more. Europe/NATO – spending more and it seems inevitable that they will have to ramp that up.

The AI and Data Center Build Out Competes for Money

  • The semiconductor valuations depend heavily on data center and AI spending. That is being funded in a large part by debt.

We have been arguing for “range-bound” Treasury trading, while slowly raising the midpoint of the range.

I’m a bit hesitant to be very bearish on bonds here, as 5% or so on 30s (we are well above 5.12% as of Friday’s close) has been a level where this admin has taken steps to drive yields lower.

I could see an “Operation Twist” sort of announcement (the Fed selling shorter-dated bonds they own, to buy longer-dated bonds), but I’m not sure they are prepared to act.

What I find “interesting” is that Bessent no longer seems to be able to do “no wrong.” At the height of Liberation Day fears, Bessent could appear on TV and calm things instantaneously. I heard of the TACO BELL trade. Trump Always Chickens Out. Bessent Explains Longer Later. It was pretty clever (I did not come up with that).

Maybe it is because the Iran conflict is so far removed from what a Treasury Secretary does, that his latest appearances haven’t had the same impact? Maybe I have Bessent Delusion Syndrome? (Anything is possible).

But as many market participants seem to be waiting for some sort of “intervention” to helps bonds, I’m left wondering if they can accomplish that easily now? 

Global bond yields are not helping. Higher for Longer on oil is not helping (that seems easier to correct – via peace with Iran, but that doesn’t seem imminent).

Bottom Line

Not “pound the table” bearish on bonds or stocks, but certainly not bullish. Not even really bullish for a trade. With the President likely looking for some “wins” and the admin likely exploring what they can do on the yield front, we could see relief in bond yields and higher stock prices, but I want hedges and would fade any such bounce. Price action in stocks seemed almost “sickly” on Thursday and Friday where every bounce/rally met some serious selling. Maybe all the AI-trained algos have read Sell in May and Go Away? Sorry, had to go there.

Caution into the summer seems warranted. Markets have priced in a lot of good news (China, Iran, and Semis), often multiple times (at some point is an earnings surprise really a surprise when everyone surprises the same way?).

Maybe it is time to “unprice” some of the good news? Affordability remains an issue and it seems to be becoming increasingly entrenched, which is a problem for bonds and stocks as a whole, if not just for the AI/data center spend, where my bigger questions are around positioning, than anything else.

Tyler Durden Sun, 05/17/2026 - 12:50
Tyler Durden

Axios Warns Cuba Stockpiled 300 Attack Drones With Crosshairs On U.S. Homeland

Zero Rss
1 month ago
Axios Warns Cuba Stockpiled 300 Attack Drones With Crosshairs On U.S. Homeland

Well, well, well.

On Feb. 3, we first asked whether a Cuban Missile Crisis 2.0 was quietly taking shape on the collapsed, communist-run Caribbean island of Cuba.

But instead of Soviet missiles, we warned that Havana may be stockpiling Russian-made Geranium one-way attack drones with the operational range to threaten major U.S. oil and gas refineries in the Gulf of America, key military bases, data centers, power grid infrastructure, and potentially even Washington, D.C.

Nearly three and a half months ago, we laid out the framework for a potential drone threat against the homeland originating from Cuba, using an infographic published by the Russian think tank Rybar.

Rybar is a noteworthy source in this context, and Western officials are not fans. The State Department has offered a $10 million reward for information on the outlet through its Rewards for Justice program, while both the European Union and the United Kingdom have sanctioned it.

At the time, Rybar wrote: "But what would the Cubans do in the event of a conflict? Let us hypothetically imagine that Havana decides to resist the Americans and chooses to fight. In that case, the already world-famous Geran strike drones could come to their aid."

Fast forward to Sunday: Axios, citing newly obtained U.S. intelligence, reports that Cuba has accumulated roughly 300 military drones from Russia and Iran and has discussed potential wartime strike scenarios targeting Guantanamo Bay, U.S. naval vessels, and possibly Key West.

Axios spoke with a senior US official who said the Cuban drone threat is becoming a growing national security concern because of Cuba's proximity to the U.S., the presence of Iranian military advisers in Havana, and the rapid proliferation of low-cost drone warfare.

"When we think about those types of technologies being that close, and a range of bad actors from terror groups to drug cartels to Iranians to the Russians, it's concerning," the official said.

The official noted that Cuba has been building drone stockpiles of "varying capabilities" from Russia and Iran since 2023.

Late last week, CIA Director John Ratcliffe met with officials in Havana, which appeared to reopen the channel for political dialogue between the two countries.

Ratcliffe and top U.S. officials, some of whose faces were blurred in images released by the CIA on X, held high-level talks with Cuba's Interior Minister, the head of Cuban intelligence, and Raúl Castro's grandson, Raulito Rodríguez Castro.

Havana, Cuba pic.twitter.com/7S7TtJPyf5

— CIA (@CIA) May 14, 2026

AP News noted that Cuban officials presented a report to Ratcliffe and his team, claiming to demonstrate that the communist-run island poses no threat to U.S. national security.

Meanwhile, the most glaring vulnerability in U.S. airspace is the absence of a low-cost, layered counter-drone technology capable of detecting and defeating one-way attack drones. That gap spans energy infrastructure, stadiums, data centers, military facilities, power substations, and other high-value civilian assets.

This is precisely why private equity funds have recently rushed into the space. PE firms are increasingly moving to fund, acquire, and import battle-tested Ukrainian drone and counter-drone systems into the U.S. market, positioning for a rapid phase of domestic airspace fortification.

Related:

We've outlined this theme for months, even before it became a national topic. Follow the money, as we've mentioned, just watch the parabolic rise of 'war unicorns' in the quarters and years ahead.

Tyler Durden Sun, 05/17/2026 - 12:15
Tyler Durden

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