Bloomberg - Evening Briefing - How Russia benefits

The conflict between Israel and Hamas has exposed both new and old geopolitical fault lines, and not just in the Middle East. Already, the combined death toll after a few days of conflict has reportedly neared 2,000 as Israel prepares for a likely ground invasion of the Gaza Strip. This new war in turn raises questions about Russia’s 19-month, full-scale invasion of Ukraine, where Vladimir Putin set in motion a conflict that’s killed or wounded an estimated half a million people. Israel’s request for additional US military aid may divert Washington weapons and focus from Ukraine, all while oil’s rising price bolsters Russia’s economy. Though the US is seeking to reassure allies that it can help supply two wars at once, it’s becoming clearer that the Kremlin may benefit from the conflict.

Vladimir Putin Photographer: Vladimir Smirnov/AFP

China’s response to the Israel-Hamas fighting meanwhile appears at odds with its push to be seen as a global peacemaker. Xi Jinping waded into the Middle East peace process in March, when he took credit for small signs of rapprochement between rivals Iran and Saudi Arabia. While there was widespread skepticism the pact would last—and of Beijing’s responsibility for it—its mere existence put the US on notice that its indispensable role in the oil-rich region was quickly becoming less so. But much like its response to Russian aggression in Ukraine, China’s response to the surprise attack by Hamas has been tepid. The war also deals a blow to Saudi Arabia’s Crown Prince Mohammed bin Salman’s purported vision of a Middle East that placed shared economic benefits at its heart—including an historic alliance with Israel. He appears to already be tempering that enthusiasm for a deal with Israel by returning to the kingdom’s emphasis on the rights of Palestinians in the Occupied Territories. —Margaret Sutherlin 

One of the most striking things about Hamas’s deadly attack on Israel wasn’t just its scope—it included attacks by sea, air and land—but also the fact that it caught Israel’s national security apparatus off guard. Israel’s intelligence services have a reputation as some of the world’s most sophisticated. And the Gaza Strip, a densely populated, deeply impoverished slice of land next to Egypt, is one of the most surveilled places on the planet. How did Hamas do it? It went low-tech.

Hundreds of Palestinians have been killed by intense Israeli bombing of the Gaza Strip. Above, rescue workers carry away the dead in Gaza City on Tuesday. Photographer: Ahmad Salem/Bloomberg

As the war rages, it also put a harsh spotlight on a leaderless US House of Representatives. Far-right Republicans, who ousted their own leader Kevin McCarthy for avoiding a government shutdown, will likely be key players in choosing between two strident conservatives, No. 2 House Republican Steve Scalise of Louisiana and Jim Jordan of Ohio in a vote on Wednesday. By all estimations, the GOP isn’t much closer on making a decision.

While the GOP seeks to block American aid to Ukraine, Germany says it will send around $1 billion in air-defense equipment to help Kyiv shore up defenses ahead of winter. Meanwhile Russia’s bid to join the top human rights body at the United Nations was defeated again. 

Caroline Ellison, the former chief executive of Alameda Research, told a federal jury in New York that Sam Bankman-Fried told her to commit crimes that led to the collapse of the cryptocurrency exchange FTX. Ellison, once Bankman-Fried's girlfriend, is a star witness for prosecutors, who have said she’s one of the few people who knows the truth behind the alleged siphoning of billions of dollars in customer funds to the sister trading firm. She pleaded guilty and agreed to cooperate with federal prosecutors after FTX collapsed. Gary Wang, the co-founder of FTX and another key witness for prosecutors, also testified Tuesday. 

Global inflation will continue to rise and central banks should be on alert to keep policy tight, the International Monetary Fund warned Tuesday in its forecast for 2024. Stocks rose and Treasury yields fell after comments from US Federal Reserve officials bolstered speculation the central bank is heading toward another pause in interest-rate hikes. Here’s your markets wrap.

The US and Venezuela are nearing an informal agreement for America to lift sanctions in exchange for Venezuela hosting more democratic elections. The US says it would be willing to lift some oil and banking sanctions once Caracas announces measures opening up elections, including removing a ban on all opposition candidates from running for office.

A gas pipeline connecting NATO members Finland and Estonia may have been sabotaged, stoking concerns about the safety of Europe’s energy infrastructure, especially heading into winter. European gas prices jumped, as a leak discovered in the line reminded many of the Nord Stream pipeline incident.

• China is weighing another round of stimulus to boost its economy. 
• Jurors in this Trump felony prosecution need protection, US says.
• The Israel-Hamas war is a test for X (Twitter): It’s already failed.
• Americans stashed hundreds of billions more than once thought. 
• How Binance’s $1 billion plan to save crypto fizzled. 
• Birkenstock is riding the ugly shoe trend all the way to the bank. 
• Shoppers are skipping big ticket items this Amazon Prime Day. 

Bob Iger’s first, 15-year run as chief executive of Disney was one of the most celebrated tenures in corporate history. By the time he stepped down as CEO in early 2020, Disney’s market value had grown fourfold. Now that he’s returned, he’s faced more challenges in the past 11 months than he did in all of his previous years as top dog. Can he repeat his earlier success? 

Bob Iger Photographer: Charley Gallay/Getty Images North America

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