Authored by Paul Joseph Watson via Modernity.news,

CBS News investigative reporter Catherine Herridge made a “dark” prediction that 2024 will produce a ‘Black Swan Event’ which shocks the world.

President Biden has made revitalizing domestic chip production a critical strategic priority, supported by tens of billions of dollars in Chips Act subsidies. Despite this, there have been postponements in mass production plans for two different chipmakers, potentially hindering Biden’s aim for new plants operational by next year. 

The latest mass production delay is at Samsung Electronics Co.’s $17 billion chip plant in Taylor, Texas. Bloomberg cited a new report from Seoul Economic Daily, which quoted a speech from President Choi Siyoung of Samsung at a recent foundry business industry event in San Francisco. 

Samsung previously targeted a mass production schedule for the second half of 2024, but now that timeframe has been shifted to 2025. A spokesperson for the company could not confirm the mass production schedule. 

In July, Taiwan Semiconductor Manufacturing Co. revealed its mass production schedule was postponed from late 2024 until 2025 due to a shortage of skilled workers. 

“We are working on improving this by sending skilled technical workers from Taiwan to the US,” Liu said on a conference call after earnings in July. 

Besides a shortage of workers, Bloomberg noted, “US environmental permit issues and the Biden administration’s slowness in delivering financial support have been plaguing domestic chip projects.”

Also, chipmaker ASML Holding NV recently warned that lawmakers in Washington, DC, do not estimate the complexity of building new factories.

“People don’t seem to realize that when we start building those fabs across the globe now and are everywhere, that skill has been refined over the last couple of decades in only a few places on the planet — predominantly in Taiwan and in Korea and a bit in China.

“Getting access to the requisite skills and skilled workers to keep the construction plan on time is a challenge,” Peter Wennink, chief executive officer of ASML, said earlier this year. 

News that Samsung and TSMC are delaying mass production starts until after the presidential election cycle will be frustrating for the Biden administration because it has championed its Chip Act to rebuild domestic chip production. 

By Helen Partz of CoinTelegraph

Applicants for a spot Bitcoin exchange-traded fund (ETF) have only a few days to finalize their filings to meet a looming deadline set by the United States Securities and Exchange Commission.

The SEC has set a deadline for spot Bitcoin ETF applicants to file final S-1 amendments by Dec. 29, Reuters reported, citing public memos and two people familiar with the discussions.

According to the report, the SEC officials met on Dec. 21 with representatives of at least seven firms hoping to launch spot Bitcoin ETFs in early 2024. Some of the attendees at those meetings included representatives from BlackRock, Grayscale Investments, ARK Invest and 21 Shares.

The meetings also reportedly featured representatives of the exchanges that would potentially list the new products, including Nasdaq and the Chicago Board Options Exchange, as well as lawyers and issuers.

Regulators reportedly told attendees at the meetings that any issuer that doesn’t meet the Dec. 29 deadline will not be part of a first wave of potential spot Bitcoin ETF approvals in early January.

Fox Business journalist Eleanor Terrett was among the first to report on the deadline. Terrett subsequently confirmed the date for final amendments to all S-1s by Dec. 29.

“The SEC told issuers that applications that are fully finished and filed by Friday will be considered in the first wave,” the journalist wrote on X (formerly Twitter). She also stressed that the filings that mention in-kind creation will be rejected.

Confirming the date for final amendments to all S-1s by Friday the 29th. The @SECGov has told issuers that applications that are fully finished and filed by Friday will be considered in the first wave. Anyone who is not will not be considered. In addition, the filings cannot… https://t.co/syyINu1BEI

— Eleanor Terrett (@EleanorTerrett) December 24, 2023

As previously reported, multiple spot Bitcoin ETF filers have been rushing to update their S-1 filings with the cash redemption model, replacing in-kind redemptions, which imply non-monetary payments like Bitcoin.

Apart from the cash-only requirement, the SEC also reportedly wants Bitcoin ETF filers to name the authorized participants (AP) in their filings. According to Bloomberg ETF analyst Eric Balchunas, the AP agreement will be the last hurdle on the way to spot Bitcoin ETFs.

“This is no easy last step, and may keep some from starting gate. AP agreement + cash creates = approval,” Balchunas wrote on X. As of Dec. 22, none of the spot Bitcoin ETF filers had the AP agreement in place, while seven firms switched the redemption model strictly to cash, according to Balchunas.

Despite multiple firms moving forward with last-minute updates for their spot Bitcoin ETF filers, Bloomberg analysts are still confident that the SEC will have approved the first spot Bitcoin ETFs by Jan. 10.

The US has retaliated after at least three troops were wounded, with at least one critical, amid the recent stepped up spate of attacks by ‘Iran-backed’ militias in Iraq and Syria. There have been over one hundred of these since mid-October related to the Gaza War, but the US has struggled to established deterrence. Instead, Americans remain in harm’s way amid an ongoing occupation.

“US military forces conducted necessary and proportionate strikes on three facilities used by Kataeb Hezbollah and affiliated groups in Iraq,” Defense Secretary Lloyd Austin had announced in a Christmas Day statement.

“These precision strikes are a response to a series of attacks against US personnel in Iraq and Syria by Iranian-sponsored militias, including an attack by Iran-affiliated Kataeb Hezbollah and affiliated groups on Arbil Air Base earlier today,” he added.

It was reportedly done with one-way attack drones, and thus appears to have been limited in scope, compared to a prior couple of operations which involved airstrikes on multiple militant bases and facilities in Iraq and Syria.

The attack which left American troops wounded happened in Iraqi Kurdistan’s Erbil, which has long been generally considered a safer and more stable base of operations for US and coalition troops. 

Though such rocket and drone attacks have been happening with increased regularity, there’s a likelihood this one was intentionally timed with the holiday of Christmas. According to details in the AP:

Biden, who is spending Christmas at the presidential retreat at Camp David, Maryland, was alerted about the attack by White House national security adviser Jake Sullivan shortly after it occurred on Monday and ordered the Pentagon and his top national security aides to prepare response options to the attack on an air base used by American troops in Erbil.

Biden then convened his national security team and ordered the retaliatory attack. “The President places no higher priority than the protection of American personnel serving in harm’s way,” a follow-up US Central Command (CENTCOM) statement said. “The United States will act at a time and in a manner of our choosing should these attacks continue.”

One of the locations targeted by the U.S two hours ago in Hilla, Babel #Iraq pic.twitter.com/j1PUhFCbYi

— Steven Nabil (@thestevennabil) December 26, 2023

Austin again repeated the claim that the US is not seeking to “escalate” – but it remains that the thousands of troops positioned in Iraq and Syria are “unwanted” by the local populace.

The Pentagon is there as an occupying foreign force, and this has especially outraged Syrians given US troops still have control of the country’s limited oil and gas resources in the east. This is meant to starve Damascus alongside Washington sanctions.

The US military has said that Monday’s operation likely resulted in the deaths of “a number of Kataib Hezbollah militants,” while videos have emerged on social media purporting to show the charred remnants of at least one militia base.

Via Global Macro Monitor,

Happy Holidays, folks.

December 26th (Boxing Day) happens to be the second most profitable trading day of the year for the S&P over the past 70 years, on average. 

We have always been skeptical of averages, however, but Mr. Market doesn’t seem to be.   

It does feel Mr. M wants to make a new high in the S&P before year-end at 4818.62, set in January 2022, which is about 1.3 percent from current levels. 

A chipshot.  Here’s to hoping he doesn’t shank the Santa Claus rally.

We leave you with the best Christmas commercial ever.  Check it out. 

Home prices in America’s 20 largest cities rose for the 9th straight month in October (the latest data released by S&P Global Case-Shiller today), up 0.64% MoM (slightly better than the +0.60% MoM expected).

That pushed the YoY rise in prices up 4.87% – the fastest pace since Dec ’22…

Source: Bloomberg

…but as the chart shows the MoM gains are slowing rapidly.

“U.S. home prices accelerated at their fastest annual rate of the year in October”, says Brian D. Luke, Head of Commodities, Real & Digital assets at S&P DJI.

“We are experiencing broad based home price appreciation across the country, with steady gains seen in nineteen of twenty cities.”

Miami and Detroit saw the biggest MoM gains while the West Coast dominated the MoM price declines with San Francisco, Portland, and Seattle worst.

But, judging by the resumption of the rise of mortgage rates since the Case-Shiller data was created, we would expect prices to also resume their decline in the short-term…

Source: Bloomberg

But prices are up and mortgage rates are actually falling again now (lagged)… so The Fed is re-blowing the same bubble?

The Santa rally grinds on, with US equity futures edging modestly higher in very thin volumes while interest yields were flat as trading resumed after the Christmas holiday amid growing expectations for earlier and deep interest rate cuts next year which supposedly will prevent a recession from materializing. As of 8:00am, S&P futures rose 0.1% while Nasdaq 100 futs gained 0.2%. Most European markets are closed, while Asian stocks are mixed in a thin trading session with markets including Hong Kong, New Zealand and Australia also shut. The dollar was little changed while bitcoin slumped during its now traditional Asian session meltdown.

A flurry of deal news around the holiday lifted shares of some US-listed companies, including English football club Manchester United, which rose 3.9% – trimming an earlier double-digit gain – after Jim Ratcliffe agreed to buy a 25% stake in the club, valuing it at about $5.4 billion.  Elsewhere in deal news, Hollysys Automation Technologies Ltd. climbed 6.6% in the US after a group led by Dazheng Group made an improved offer to acquire the company for $1.8 billion, seeking to thwart its sale to private equity firm Ascendent Capital Partners. And 3D printer maker Stratasys Ltd. jumped 11% after confirming it received unsolicited cash offer from Nano Dimensions Ltd. that values the company at $1.1 billion. Here are some other notable premarket movers:

• Gracell Biotechnologies ADRs climb 58% after the China-based developer of cell therapies said it’s to be acquired by AstraZeneca for $2 per ordinary share in cash plus non-tradable contingent value right, according to a statement.
• US-listed shares of Bilibili rise 2.1% while NetEase gains 2.5%, after China approved 105 domestic online games, according to a statement from the National Press and Publication Administration.
• ZIM Integrated Shipping (ZIM) falls 7.2% after Maersk said it’s preparing to resume shipping through the Red Sea, thanks to a new multinational maritime task force to protect vessels from attacks by Houthi rebels from Yemen.

Some on Wall Street are positioning for further stock gains ahead as the session kicked off the start of the “Santa Claus rally” — a seasonal trend where equities tend to climb into the first few days of the new year. The S&P 500 notched an eight-week winning run on Friday — the longest in more than five years on signs price pressures in the US were easing. The Nasdaq is up over 50%, its best year since…1999.

“As for emerging markets in Asia, ‘silent night’ says much, given that there isn’t particularly inspired trading, with Wall Street equivocating ahead of Christmas,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank. “It looks like a case of averting the China drag and hanging on to earlier Santa rallies being the best case for Boxing day – boxing in risks.”

Global markets have been buoyed in recent months as traders bet major central banks including the Federal Reserve will aggressively cut interest rates next year as inflation falls. Bond yields have tumbled while the S&P 500 is nearing a fresh record.

Data released last week showed signs of resilience in US growth while the Fed’s preferred underlying inflation metric barely rose in November. Additional reports Friday showed consumers were also gaining conviction that inflation in the world’s largest economy was on the right track despite a bumpy housing market recovery. That helped cement investor expectations for earlier and deeper interest rate cuts next year, despite pushback from several Fed policymakers. Swaps traders are betting interest rates will be eased by more than 150 basis points in 2024, double the Fed’s forecast.

European markets were closed for the Christmas holiday while stocks in Asia were mixed in a thin trading session with markets including Hong Kong, New Zealand and Australia also shut. European markets were closed too. Stocks fell in mainland China, with the benchmark CSI 300 Index dropping for the first time in four sessions, as investor sentiment remains weak even after the authorities softened their stance following a move last week to tighten curbs on the videogame industry.

Japan’s auction of two-year sovereign debt saw tepid investor appetite, sending a gauge of demand to the weakest in a year, amid speculation the central bank will end negative interest rates in 2024. Its labor market remained relatively tight in November, keeping pressure on employers to boost wages in order to fill positions.

The benchmark Topix index traded in a tight range, finishing the day up less than 0.1%, after Bank of Japan Governor Kazuo Ueda’s speech on Monday that suggested he’s in no hurry to end the ultra-easy monetary policy.

“With the Nikkei 225 at high levels, year-end selling to lock in profits and losses is likely to weigh on the upside,” says Hideyuki Ishiguro, senior strategist at Nomura Asset Management.

In FX, the Bloomberg Dollar Spot Index dropped 0.1% in thin trading. The EUR/USD rises to hold above 1.10 while GBP/USD fluctuates around 1.27. USD/JPY consolidates above 142.  Emerging Asian currencies rose, with South Korea’s won and Taiwan dollar leading gains against a dollar that fell to its lowest level in almost five months.  The dollar is likely to remain “under pressure” this week amid a lack of major economic data, according to Win Thin, global head of currency strategy at Brown Brothers Harriman. “Early January will bring a slew of key economic data that calls the pivot into question.”  Elsewhere, the Singapore dollar was little changed after core inflation edged lower in November, giving the central bank room to extend its monetary-policy pause next month to support the economy.

In rates, treasuries are mixed in early US trading with many European bond markets closed. Treasury 2-year yields rise 1bp to 4.33% while 10-year yield reversed an earlier drop of 2bps to trade unchanged at 3.90%. Yields remain within about 2bp of Friday’s closing levels on first day of holiday-shortened week, with 10-year at 3.89%; it reached 3.827% last week, lowest since July, following downward revision to 3Q GDP. The yield curve is flatter as short end cheapens ahead of $57b 2-year note auction at 1pm New York time. The When Issued 2-year yield of 4.29% is lower than 2-year auction results since April and more than 50bp lower than November’s sale following past month’s collapse in yields unleashed by signals from Fed that no further rate hikes likely.

In commodities, iron ore futures hit $140 a ton, highest in 18 months as traders keep a close eye on China’s steel outlook for the next year. Oil rose again after posting the largest weekly gain in more than two months, with shipping disruptions in the Red Sea in focus after a spate of Houthi attacks against vessels in the vital waterway.

Geopolitical tensions still remain front of investors minds into the new year as tensions in the Middle East look set to increase. Iranian President Ebrahim Raisi said Israel will pay a price for killing a senior commander of its Revolutionary Guard in air strike in Damascus on Monday. The US accused Iran at the weekend of an attack on a tanker in the Indian Ocean.

On the US calendar today, we get data including November Chicago Fed National Activity Index and December Philadelphia Fed Non-Manufacturing Activity (8:30am), October FHFA House Price Index and S&P CoreLogic CS home price gauges (9am) and December Dallas Fed Manufacturing Activity (10:30am). No Fed speakers are scheduled for remainder of year

Market Snapshot

• S&P 500 futures up 0.1% to 4,812.00
• MXAP up 0.3% to 165.27
• MXAPJ up 0.4% to 515.04
• Nikkei up 0.2% to 33,305.85
• Topix little changed at 2,338.86
• Shanghai Composite down 0.7% to 2,898.88
• Sensex up 0.2% to 71,272.82
• Kospi up 0.1% to 2,602.59
• Brent Futures little changed at $79.04/bbl
• Gold spot up 0.4% to $2,061.82
• U.S. Dollar Index little changed at 101.75
• Euro little changed at $1.1012
• Brent Futures little changed at $79.04/bbl

Top Overnight News

• Japan’s auction of two-year sovereign debt saw tepid investor appetite, sending a gauge of demand to the weakest in a year, amid speculation the central bank will end negative interest rates in 2024.
• Japan’s labor market remained relatively tight in November, keeping pressure on employers to boost pay in order to fill positions as companies prepare to engage in annual wage negotiations with unions.
• Israeli Prime Minister Benjamin Netanyahu outlined three prerequisites to achieving peace in its war with Hamas: the destruction of the group, the demilitarization of Gaza and for Palestinian society to be “deradicalized.”
• Iron ore rallied to its highest since June 2022, showing Beijing’s efforts to stem the property market’s decline in recent months may be paying dividends.
• Gold ticked higher as the final week of the year got under way, with traders looking ahead to interest rate cuts from the Federal Reserve in 2024 and a weaker US currency.
• An abrupt surge in foreign buying of Chinese bonds has raised hopes that pessimism about the nation’s assets may be overdone. But it may be too early to celebrate.

US Event Calendar

• 08:30: Dec. Philadelphia Fed Non-Manufactu, prior -11.0
• 08:30: Nov. Chicago Fed Nat Activity Index, prior -0.49
• 09:00: Oct. S&P/Case-Shiller US HPI YoY, prior 3.93%
• 09:00: Oct. S&P CS Composite-20 YoY, est. 4.85%, prior 3.92%
• 09:00: Oct. S&P/CS 20 City MoM SA, est. 0.60%, prior 0.67%
• 09:00: Oct. FHFA House Price Index MoM, est. 0.5%, prior 0.6%
• 10:30: Dec. Dallas Fed Manf. Activity, prior -19.9

If you have a dusty, half-forgotten 401(k) from a previous job, there’s new pressure to get around to doing something with it — before your old company does something to it that you don’t like. 

Since 2001, 401(k) sponsors have been allowed to automatically boot you out of their plan and into an IRA account if your balance was between $1,001 and $5,000. In 2024, that upper limit is moving to $7,000, exposing an estimated 800,000 more people to involuntary rollovers. 

There are two major downsides. First, to minimize their own liability, employers typically direct that the IRA funds be invested in some form of “safe” cash-equivalent, regardless of what you’d chosen in the 401(k) plan. Over time, that could mean the purchasing power of your account is ravaged by inflation. Second, you can expect the IRA to have steep fees — some as high as $115 a year. On a $2,500 balance, that would be a 4.6% expense — before factoring in the expense ratio of whatever fund you’re placed into.  

If your old 401(k) balance is under $1,000, the treatment could be even uglier. Employers can just cash you out, exposing you to ordinary income tax on the account balance, plus a 10% penalty if you’re under age 59 1/2.  

Things could get even messier if your old employer doesn’t have your current address. First, picture them cutting a check that never reaches you. “The industry is littered with these uncashed checks,” Retirement Clearinghouse’s Spencer Williams tells the New York Times. Next, imagine them following up with a similarly-misrouted 1099-R you don’t even know you’re supposed to include in your tax filing. You may first find out you’ve been cashed out when the IRS sends you a letter asking about a discrepancy on your tax return. 

To avoid an involuntary rollover or forced cash-out, roll your account balance to either an IRA of your choosing, or to another 401(k) plan that accepts rollovers — maybe the one at your current employer, or a larger one you’ve kept from a different former employer.

The financial services industry is working to make things easier on job-hopping Americans. The Portability Services Network, a collaboration by which old plan balances are moved into the retirement plan at a worker’s new job, went live in November. By the end of 2024, it’s supposed to include the six largest 401(k) recordkeepers.

Vanguard, Fidelity and Alight Solutions are already set on their end, and they’re now working to plug in plan sponsors. The new, streamlined process will require your consent, but it will helpfully let plan recordkeepers take the lead in nudging you. However, since it’s still a work in progress, it’s best to take the matter into your own hands before someone else makes unwanted decisions for you. 

Via The Cradle,

Despite continued calls for Tel Aviv to ‘protect’ Palestinian civilians, the US has continued to ship large quantities of weapons and munitions to fuel the carpet bombing of Gaza…

US President Joe Biden told reporters on 23 December that he did not ask for a ceasefire during his latest call with Israel’s Prime Minister Benjamin Netanyahu.

“I had a long talk with Netanyahu today, and it was a private conversation,” the president said, adding that he “did not ask for a ceasefire.” 

The White House said Biden and Netanyahu discussed the Israeli war on Gaza and its “objectives and phasing.”

The US president “emphasized the critical need to protect the civilian population, including those supporting the humanitarian aid operation, and the importance of allowing civilians to move safely away from areas of ongoing fighting,” according to the White House statement. 

Biden’s phone call came one day after the UN Security Council passed a barebones resolution that called for increased humanitarian aid but failed to demand an immediate ceasefire. 

The Security Council had been trying to draft a resolution for several days but was forced to tone down the language at the insistence of US officials who opposed a call for an “urgent and sustainable cessation of hostilities.” 

The US and Russia abstained from the UNSC vote. 

Washington has vetoed two previous resolutions calling for a ceasefire.

“This resolution has been watered down to the point that its impact on the lives of civilians in Gaza will be nearly meaningless,” said Avril Benoit of Doctors Without Borders. 

On Saturday, Israel’s Broadcasting Authority revealed Tel Aviv is planning to switch to a new phase of the war in the coming weeks, bringing to an end to ground operations and shifting the focus to continued heavy airstrikes on the Gaza Strip.

While Washington has been calling for a switch to lower-intensity operations to “protect civilians,” maintaining air raids of Gaza is expected to keep the staggering death toll on the rise. 

Young voters in the US have increasingly shown support for the Palestinian cause, plunging Biden’s approval ratings. A poll earlier this month showed that 53 percent of US citizens “disapprove of the president.” 

Authored by EurasiaNet’s Arshaluis Mgdesyan via OilPrice.com,

• Armenia’s dissatisfaction with the CSTO stems from the organization’s inaction during Azerbaijani incursions and increased cooperation with the EU.

• The Armenian government explores various options, including Euro-integration and adopting a non-bloc status, amidst debates about expelling Russian military bases.

• Analysts suggest that Armenia’s departure from the CSTO could be a logical outcome, potentially opening avenues for diverse defense and military-industrial collaborations with other countries.

Armenia’s possible exit from the Russia-led Collective Security Treaty Organization (CSTO) is being discussed more and more actively as differences grow between Yerevan and Moscow.

Many in Armenia are wondering what the point is of remaining in a military alliance that has demonstrated its unwillingness to protect the country. 

Prime Minister Nikol Pashinyan has repeatedly denied claims, including by Russian officials, of an imminent change in Armenia’s foreign policy vector, but that has not stopped speculation as to how the country might leave the CSTO and what would come next. Representatives of the authorities are themselves musing about this prospect. 

 “There is of course the idea of Euro-integration in Armenia, but there is also the idea of becoming a country with non-bloc status, so there’s a wide range of options. We are listening to civil society and trying to figure out what the best tools are for ensuring Armenia’s security and development,” Security Council Secretary Armen Grigoryan said at a forum in Brussels on November 10 titled, The Strategic Future of Armenia: Armenia-Europe.

Fifteen Armenian public organizations recently released a statement criticizing Russia for, as they put it, interfering in Armenia’s internal affairs. The statement demands that the Armenian government expel Russia’s 102nd military base, ban Russian broadcast media, and begin the process of ending the country’s membership in the CSTO. 

Growing dissatisfaction with Russia

The CSTO, which also includes Kazakhstan, Kyrgyzstan, Tajikistan, and Belarus, is one of the main causes of the growing Armenian resentment toward Russia. 

The bloc, which is, theoretically, bound to come to the aid of a member state when it is attacked, took practically no action in September last year when Azerbaijani troops invaded border areas and took up positions on strategic heights inside Armenia.   

Since then, Armenia’s approach to the CSTO, and to Russia, has been increasingly confrontational. Yerevan has reduced its participation in the bloc to an absolute minimum. Over the past year, it has snubbed CSTO meetings at practically every level and has reassigned its representative in the organization to other work and left his post vacant.

At the same time, Armenia has welcomed more intensive cooperation with the EU, which at the start of this year deployed a civilian monitoring mission to the Azerbaijani border with the aim of supporting stability there. 

This step elicited a sharply negative reaction from the Russian authorities, who claimed the mission’s purpose was to “confront Russia geopolitically” in the South Caucasus region.

Such rhetoric from Moscow has done nothing to stop the growing cooperation between Yerevan and Brussels, including in the military sphere. 

At the summit of EU foreign ministers on December 11, it was announced that the EU would review the possibility of rendering military aid to Armenia through the European Peace Fund.

It was also announced that the EU mission in Armenia would increase the number of its monitors from 138 to 209. 

Another sore spot for Armenia is Russia’s alleged failure to deliver weapons that Yerevan says it paid millions of dollars for.  

The Armenian authorities have no plans to sue Russia and instead seek to solve the matter in an “atmosphere of partnership,” Deputy Defence Minister Hrachya Sargsyan told a briefing on December 4. 

Prime Minister Nikol Pashinyan recently proposed resolving the dispute through Russia canceling part of Yerevan’s overall debt to Moscow. That total debt amounts to about $280 million, according to the Armenian Finance Ministry’s latest calculations. (Armenia has not released precise figures on how much money Russia owes it for undelivered weapons.) 

Scenarios for leaving the CSTO

Most of the analysts Eurasianet spoke to see Armenia exiting the CSTO as a logical possible outcome of the current strained relations between Armenia and Russia. 

The head of the Research Center on Security Policy in Yerevan, Areg Kochinyan, says that Armenia could withdraw from the CSTO after approving a national security strategy that stipulates “non-bloc status” for the country. A new national security strategy is currently being drafted, and it’s unknown now whether it will contain such a provision. 

If the national security strategy were amended so, “It would mean that Armenia has decided not to participate in any military bloc or alliance and therefore it would have to leave the CSTO. But at the same time it would mean that the country would not seek to become part of any other collective defense bloc,” Kochinyan told Eurasianet. “I think this position would be more acceptable for Russia and the other regional powers, Iran and Turkey.”

Yerevan-based political analyst David Arutyunov doesn’t find it difficult to imagine Armenia leaving the CSTO.  

“In the context of the whole scope of Armenia’s close relations with Russia, including in the economic sphere and the presence of the Russian military base here, leaving the CSTO is a relatively easy matter,” Arutyunov told Eurasianet, adding that another crisis could provide the final impetus for quitting the bloc. 

He said the Armenian authorities have deftly managed to achieve domestic political aims by directing public discontent over the country’s security problems towards Russia and the CSTO. 

“If something like the crisis of September 2022 happens again and causes internal political ructions in Armenia, it’s possible that the Armenian government will resort to leaving the CSTO” in a bid to deflect criticism. 

What might Armenia’s “non-bloc status” mean?  

Areg Kochinyan, of the Research Center on Security Policy, believes that a “non-bloc status” could open up opportunities for expanding Armenia’s defense and military-industrial cooperation with various countries.

“We’re talking not just about the West, but also other countries like India, that produce weapons. Armenia can enhance its relations with them even to the level of strategic partnership,” he said. 

David Arutyunov believes that it’s too early to speak about any real prospect of Armenia being outside of any military-political alliances.

“For now all this talk is theoretical. There are no real discussions on realizing this in practice. And even so, the talk pertains to the CSTO specifically, while bilateral relations with Russia will remain in any case – alongside contacts with the West,” Arutyunov said.

The head of the Armenian Institute for Resilience and Statecraft, Gevorg Melikyan, is doubtful that the Armenian authorities really intend to leave the CSTO and declare non-bloc status.

“I don’t see any such clear policy or strategy. For now, it’s a matter of the Armenian government’s desire to make an impression on Western partners to extract some kind of security guarantees. Since there are none [such guarantees], the Armenian government will try to convince Western partners to treat Armenia like they would treat any other anti-Russian country and not accuse it of maintaining contacts with Russia in the security sphere because it remains in the CSTO,” Melikyan told Eurasianet.