Bloomberg - Evening Briefing - Dark days ahead

Bloomberg Weekend Reading

Israel’s campaign to destroy Hamas after the militant group’s surprise incursion and brutal killing of at least 1,300 people last weekend—mostly civilians—is entering a new phase, with reports that Israeli soldiers have already entered Gaza ahead of the expected invasion. “Every Hamas terrorist is a dead man,” Prime Minister Benjamin Netanyahu vowed as the United Nations said Israel had ordered the evacuation of civilians from northern Gaza–some 1.1 million people. But to where? The small, densely populated coastal strip has long been blockaded by Israel and Egypt, and Gaza authorities say some 1,500 Palestinians have already been killed by Israeli bombing—numbers that are sure to rise in the coming days. US Secretary of State Antony Blinken traveled to the region, promising that the US “has Israel’s back” as it began transferring missiles for the Iron Dome air-defense system. Across the Middle East, tens of thousands of people protested Israel’s response to the attack as New York, London and other cities braced for mass demonstrations this weekend in support of the Palestinians.

Demonstrators at Columbia University in New York on Oct. 12 protesting against Israel’s military response to the Hamas attack. More demonstrations tied to the war are planned over the weekend. Source: Bloomberg

In Israel’s north, worries grew that a new front could be opened by Hezbollah, a longtime enemy of Tel Aviv and “wildcard” that has said it was “fully prepared” for a fight, though the US determined earlier this year that the likelihood of such a conflict is low. Michael R. Bloomberg writes in Bloomberg Opinion that “dark days lie ahead” and that a “mounting civilian death toll in Gaza will only serve Hamas’s interests.” Amid the spike in carnage an invasion may bring, a well of pressing questions remain: How will the 100 or so hostages Hamas holds inside Gaza shape Israeli strategy? Why did Hamas act now and with such shocking violence? Israel has been working in recent years to partner with Arab countries, mostly recently Saudi Arabia, with both sides largely leaving Palestinians out of the equation. If the goal was to derail that effort, it seems to have succeeded for now. “Israel can’t be secure unless it first crushes Hamas as a military threat, and then creates a clear path toward a political settlement that answers to Palestinian, as well as Israeli, interests,” Marc Champion writes in Bloomberg Opinion. How Israel treats Palestinian civilians in the coming days, he writes, “will play a big role in deciding whether that messy, less violent future is possible.”

What you’ll want to read this weekend

The rapid descent of US inflation over the last few months is slowing a bit. US consumer prices advanced for a second month, likely reinforcing the Federal Reserve’s higher-for-longer mantra. The biggest US banks kicked off earnings season this week by posting solid results, with JPMorgan and Wells Fargo reporting jumps in net interest income. In the UK though, stagnation fears persist despite a late summer rebound. More broadly, some are looking to the conflict between Israel and Hamas as a potential threat to the world economy.

Are House Republicans ungovernable? Representative Steve Scalise of Louisiana abandoned his short-lived campaign to succeed Kevin McCarthy as US House Speaker, unable to cobble together enough votes despite his party’s narrow endorsement. With the government due to run out of funding next month, Scalise said the election of a speaker “needs to happen quickly.” His far-right rival, Jim Jordan of Ohio, said he’s going to try again for the top spot after losing out. Republicans, and Congress as a whole, can accomplish little until they agree on a new speaker.

Chinese leader Xi Jinping’s first meeting with US congressional leaders in eight years was infused with tension after his government didn’t directly condemn Hamas’ incursion into Israel. As an ally of Russia, Xi proposed a  cease-fire of sorts in Ukraine and helped rivals Saudi Arabia and Iran reach a diplomatic truce. But in this case, Xi seems to be begging off. Meantime, Beijing reached a tentative debt agreement with Sri Lanka, catching the International Monetary Fund and other creditors by surprise as they try to work out a debt restructuring plan.

US Senate Majority Leader Chuck Schumer is greeted by Chinese President Xi Jinping on Oct.9. “We have a thousand reasons to make US-China relations better, and no reason to make them worse,” Xi said. Photographer: Andy Wong/AFP

Ancient viruses, once believed lost or frozen in the Arctic, are yet another risk the climate crisis poses to public health. While greenhouse gasses and rising sea temperatures have been well-documented, the dangers of dormant pathogens, or zombie viruses, are lesser known. Last year, a French virologist’s team published research showing it had extracted multiple ancient viruses from the Siberian permafrost, all of which remained infectious. Elsewhere, archaeologists in Virginia are racing to study and save the remains of Jamestown, North America’s first permanent English colony, from rising seas and flooding. 

Traveling with friends of family but bracing for tensions on planning or agenda? This luxury travel outfitter wants to deliver collective awe. And for K-Pop lovers out there, the man behind the Korean pop phenomenon BTS wants to replicate the formula that changed music—but with even more global appeal. Bang Si-Hyuk wants to form a girl group, and this one would be different from his other bands with only Asian members.

Bang Si-Hyuk Photographer: Tracy Nguyen for Bloomberg Businessweek

What you’ll need to know next week

Detroit’s EV Reckoning Arrives, Courtesy of UAW

The United Auto Workers strike against Detroit’s Big Three automakers isn’t just about wages—it’s about who will suffer the most as the US transitions from combustion engines to electric vehicles. In the Bloomberg Originals mini-documentary Detroit’s Electric Reckoning, we take the measure of the US auto industry at this critical moment, as well as the tough choices faced by President Joe Biden who must balance the needs of laborers with the fight against climate change.

Bloomberg Originals: Detroit’s Electric Reckoning

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