“Never hate your enemies, it affects your judgment”
Smoke screens and mirrors
The person who sent us the Jane Street vs. Millennium court filing was impressed at how quickly we reviewed the document and produced our analysis. He doesn't know that multiple versions of that update were released, depending on the recipient and other factors. It's all smoke screens and mirrors. There is too much interest in stories that are irrelevant in the grand scheme of things.
As it's Sunday, let's go off-piste for some alternative perspectives on current affairs in the Middle East and try to connect the dots. Readers are free to decide for themselves what's fact, fiction, or an outright conspiracy theory. Let's put on our tinfoil hats and flow!
Do you see a young or old lady?
The image above is taken from a (declassified) CIA training manual to show analysts how looking at the exact same information can lead to very different interpretations. Sometimes adversaries have alternative perspectives which you may not see.
What would a visual AI model see in the image above? The standard response by ChatGPT is a bit misleading—it recognizes the image and provides an extractive response from the internet.
Did Israeli intelligence suffer a lapse of imagination?
Did Israeli intelligence suffer a failure of imagination in missing the October 7 attacks? Or, did they become overly reliant on technology that was unable to connect the dots? Perhaps, both. After suffering a colossal hit, Israel's intelligence services have been running flat and have not yet had an opportunity for a pause to begin an official investigation. The likelihood of further mistakes is high, especially when you ignore advice from your closest ally.
Revisiting Pegasus
Press reports on the IDF's use of AI to identify targets inside Gaza reads like a continuation of the Pegasus story from a couple of years back—more data analytics than AI tech. Did they ever figure out who (actually) owns the NGO Group which licenses the Pegasus software? The people reported to own the company are ex-bankers doing private credit, rather than heavy-hitting venture investors in the cybersecurity space.
Israel's top spy cover blown
The head of Israel's Unit 8200 which specializes in signals intelligence recently had his cover blown by investigative reports. The manner in which he got busted is shockingly bad, plenty of evidence for hubris.
Exclusive: Top Israeli spy chief exposes his true identity in online security lapse
The term “arrogant” is frequently used to describe the Israeli intelligence community by US counterparts.
The legal case brought by Jane Street against Millennium is framed as a situation in which only two market participants see a pattern yielding consistent profits. If so, there's more than one way to skin a cat.
Who came up on top in Iran-Israel tit-for-tat?
Iran and Israel both managed to launch successful strikes against one another this week. Strategically, Iran came up on top. Tactically, Israel overwhelmingly did better by removing 3 top IRGC commanders from the battlefield.
Reports of failed missions incompetence by either side is almost certainly propaganda, which is fine for managing public perceptions back home. It's a problem when state propaganda influences official analysis and policy decisions, leading to catastrophic miscalculations.
Israel strike on Iran
Below is the diagram curated for us by a true subject matter expert detailing Israel's attack early Friday morning.
Contrary to some claims, this was a well-executed plan of attack by Israel—a textbook package used many times in the Russia-Ukraine war. The first phase is to destroy the air defense systems with precision-guided missiles. This signaled to Iran that next time we'll complete the plan by striking the Natanz nuclear facility. The explosions reported near Tabriz were announced by Iranian state media and have baffled some analysts as to whether the US was even aware.
Iran strike on Israel
The drones were a decoy and Iran demonstrated they are able to get past the most advanced air defense system in one of the world's most heavily guarded airspaces without using its most advanced missiles. The message to Israel and the US was: next time we won't give 72 hours' notice and leak the details of target locations. Nor will there be a 4-hour warning with slow-moving drones. Hezbollah to the north is believed to have a stockpile of 150K missiles, many of which are more sophisticated than the ones Iran on April 14.
There should be no doubt that Hezbollah can cause significant damage to Israel should things escalate in that direction.
If only they heard a live broadcast
Ronen Bergman, a local investigative reporter based in Israel cited an inside source (in Hebrew) as saying: “If the talks were broadcast live on YouTube, you'd have 4 million people clamoring at Ben Gurion airport trying to get out of here,” the day after Iran launched its attack.
It's unlikely that the military strategists gain new information regarding the other side's missile capabilities from these attacks. As a person with knowledge on the matter said: It was just ballistic missile theater. The question is how much of the intelligence analysts' views filters up to the top.
A choice between US and Israeli interests
—Israel has admitted to a miscalculation by striking the Iranian Embassy building in Damascus, killing 3 top IRGC commanders and several others. For the avoidance of doubt, this was a violation of UN conventions. The retaliatory strikes by Iran were within the bounds of international law. Iran said it would not retaliate if the UN Security Council passed a resolution condemning Israel and brought the individuals involved to justice.
—When CIA director Bill Burns met Iranian officials in Oman last week, he was faced with the choice of protecting either US interests in the region or Israel's. US allies' interests are usually subordinate.
Decapitating the ‘head of the octopus'
In the past, Israeli leaders have described Iran as ‘the head of the octopus.' The octopus retreats and changes form when its tentacles are touched. Only this time the octopus did not retreat but struck back. Iran's retaliatory strikes will have reset its risk profile in the eyes of Israel.
Familiar foes and former friends
-According to Sima Shine, who headed up the Iran research desk at Mossad: “Next time Israel will have to think twice when deciding to strike Iran.”
-Israel is intimately familiar with Iran, in part, thanks to sources inside the country and its intelligence analysts. On several occasions, Israel has demonstrated its intelligence capabilities by conducting targeted assassinations inside Iran. Those actively working against the Iranian regime on behalf of Israel are caught up in their own struggle against occupation.
What next for Iran?
-The symbolic first phase of Iran's retaliation against Israel has probably concluded without escalating out of hand. Phase 2, as previously outlined, will be of a covert nature—consistent with Iran's long-term strategy of expanding its proxy network.
Israel made too many mistakes
By our accounts, Israel made 3 major miscalculations since October 7:
- Israel's military strategy in Gaza has failed. After more than 6 months, the hostages have not been freed and Hamas is still in charge of Gaza.
- Rejecting the ceasefire deal proposed by Hamas before Ramadan. Netanyahu did not heed Mossad chief David Barnea's advice to accept the deal.
- The strikes on the Iranian Embassy in Damascus exposed a wedge between Israel and US interests in the region.
When Israel has its back to the wall and senses checkmate, it tries to smash up the chessboard to avoid a defeat.
How much of what we have written are facts versus fiction?
Updates
Attacks against Israel by Hezbollah and Iran-backed resistance forces in Iraq have picked up a notch today. This would be consistent with Phase 2 of Iran's retaliation plan of action outlined.
Much has been made of the symbolic significance of Jordan allowing its airspace to be used for defending Israel. This is no matter. Jordan did not have the option to refuse assistance, and it relies heavily on the US for its security. King Abdullah II may have slept on the living room couch last week.
Iraqi militia enjoy unhindered access to Jordanian airspace for launching strikes against Israel. Not much is mentioned about that.
Now, the official story is that 9 Iranian ballistic missiles struck Israel last Sunday. There are 4 in this video footage getting through the air defense systems.
There is also an unconfirmed report that Israel's first missile strike on Iran hit the intended target, so the second one was detonated mid-flight to avoid risk of escalation.
Many things are still unclear and uncertain. But the pattern of self-delusion is crystal clear for anyone who cares to see.
