Bloomberg - September 30, 2024
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At first glance, Israel’s assassination of Hezbollah leader Hassan Nasrallah in Beirut last week would appear to have tipped the Middle East closer to war.
Yet despite the rhetoric of revenge emanating from Hezbollah’s main backer, Iran, a direct conflict between the Islamic Republic and Israel seems unlikely for now.
That’s even as Israel eliminated one of the most influential figures in Tehran’s “Axis of Resistance,” struck at the heart of its most important overseas militia and carried out air strikes on Beirut and southern Lebanon, leaving hundreds of people dead.
A fire truck rushes to the scene of an Israeli air strike in the Haret Hreik neighborhood of Beirut’s southern suburbs on Friday. Photographer: Ibrahim Amro/AFP/Getty Images
Hemmed in by enemies, Israel says it needed to weaken Iran’s network and stop Hezbollah rocket fire that has forced communities in its north to flee.
While Iran says it’s weighing a response, there are clear signals that it isn’t going to act directly — and not immediately. Tehran says it will leave the counterattack to Hezbollah and other proxy groups weakened by waves of Israeli strikes — a continuation of the years-long shadow war between the adversaries.
Nasrallah’s death follows the killings of Hezbollah’s military chief and the political head of Iran-backed Hamas, which attacked Israel on Oct. 7 from its base in Gaza, killing 1,200 people and abducting 250 others.
Israel’s assault in response has claimed the lives of more than 40,000 people, according to the Gaza health ministry, and reduced much of the Palestinian enclave to rubble.
Supporters of Israeli Prime Minister Benjamin Netanyahu’s right-wing government are crowing about a “new” Middle East after the pummeling of groups that it, like the US, designates as terrorist organizations.
But both Hezbollah and Hamas are down, not out. And as Israel showed with exploding pagers in Lebanon, revenge can be years in the making.
Iran is still operating through allies that can attack global shipping and target Western interests in the Middle East. Diplomatic efforts by the US and other powers to halt the violence have so far failed.
The region may be teetering on the brink for some time to come.— Sylvia Westall
An Iranian pro-government supporter holds a picture of Ayatollah Ali Khamenei, center, during an anti-Israel demonstration. Photographer: Hossein Beris/AFP/Getty Images
Global Must Reads
Austria’s mainstream political powers have vowed to block the far-right Freedom Party and its divisive leader, Herbert Kickl, from participating in the next government despite its first-place finish in national elections yesterday. The latest effort to stem the rising tide of populism in Europe will become the subject of lengthy coalition negotiations in the days ahead.
The far-right Freedom Party won the most votes for the first time in a national election but mainstream forces are pledging to prevent it forming a government. Oliver Crook reports. Source: Bloomberg TV
US vice presidential candidates JD Vance and Tim Walz will face off in a debate tomorrow as they look to frame the choice between Republican presidential nominee Donald Trump and Democratic rival Kamala Harris five weeks before the election. It’s expected to be a bruising affair after their swings at each other — Vance attacking Walz’s claims about his military service and Walz mocking Vance’s dismissal of “childless cat ladies.”
Shigeru Ishiba said he would call a national election for Japan on Oct. 27, assuming he is confirmed as prime minister tomorrow, taking advantage of a positive public reaction to his victory in last week’s ruling Liberal Democratic Party leadership ballot. Ishiba is set to pursue continuity in economic, monetary and foreign policy by naming LDP veterans to senior cabinet posts.
Security was the top priority as Chilean President Gabriel Boric unveiled the 2025 budget yesterday, which included a 2.7% increase in spending and a strong focus on fighting crime. The administration will tighten international border crossings, increase expenditures to combat organized gangs in jails and deploy roughly 1,300 new police officers nationwide, bankrolled by funds from recently approved legislation on tax evasion.
Former UK Prime Minister Rishi Sunak’s call for his Conservatives to end internal squabbling appeared to fall on deaf ears as the first day of the party’s annual conference was dominated by barbs traded between the front-runners in the race to succeed him as leader. Tory hopes of a show of unity lay in shreds before the meeting had even got going.
UK lawmaker Rosie Duffield quit the governing Labour Party, slamming Prime Minister Keir Starmer for accepting gifts, saying sleaze, nepotism and avarice are “off the scale” under his leadership.
The United Arab Emirates’ foreign ministry said a Sudanese military aircraft attacked the residence of its ambassador to Sudan, stoking tensions between the Gulf country and authorities in the North African nation.
Former French presidential contender Marine Le Pen and her far-right National Rally party face a Paris trial over allegations millions of euros in European Union funds were diverted to build up its platform in France.
Washington Dispatch
A natural disaster doesn’t normally become a political issue unless government leaders come under scrutiny over their response. But Harris and Trump have already taken prominent stances in the immediate aftermath of Hurricane Helene, which killed at least 84 people and left trails of destruction in four Southern states, including the election battlegrounds of North Carolina and Georgia.
Trump, according to his campaign, will “receive a briefing on the devastation of Hurricane Helene, facilitate the distribution of relief supplies, and deliver remarks” in Valdosta, Georgia, today. The campaign yesterday accused Harris of ignoring the tragedy while attending fundraisers in California.
Asheville, North Carolina. Photographer: Melissa Sue Gerrits/Getty Images
In a fact sheet released last night, the White House said that President Joe Biden and Harris were “closely monitoring” federal recovery operations and “receive regular updates from their teams.” Biden today plans to discuss the administration’s efforts.
The cost of flooding and destruction wrought by Helene may total between $95 billion and $110 billion, commercial forecaster AccuWeather estimated. That would easily place it among the five worst hurricanes to hit the US.
One person to watch today: Federal Reserve Chair Jerome Powell will address the annual meeting of the National Association for Business Economics in Nashville.
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Chart of the Day
Chinese manufacturers sold the fewest electric cars in 18 months to customers across Europe, with registrations falling by nearly half in August from a year earlier. The 48% drop — which comes amid uncertainty tied to provisional EU tariffs on EV imports from the Asian nation — led to the second straight month of declining share for Chinese brands, based on figures provided by researcher Dataforce.
And Finally
At its peak in 2018, a discreet Munich-based broker claimed to control 1.6 million shipping containers, which it sold to retail customers and then leased on their behalf to maritime transport companies. In reality it owned fewer than half that number. The rest were fiction — which would soon shock the company’s tens of thousands of investors in one of Germany’s biggest-ever scams.
Illustration: Maxime Mouysset for Bloomberg Businessweek
Thanks to the 32 people who answered the Friday quiz and congratulations to Dominique Zen-Ruffinen for being the first to identify Thailand as the country that became the first in Southeast Asia to legalize same-sex marriages.
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