Ok, so it’s time to maybe start worrying about how involved in the never-ending Syria conflict Israel is willing to get.
Officially, Israel has tried to remain on the sidelines over the course of the seven-year-old debacle but that’s not entirely ideal given that the war has unquestionably strengthened Iran’s hand in the region.
The Quds’ fingerprints have been all over the Syrian engagement from the time things started to turn decisively in favor of the hodgepodge of rebels fighting to oust Assad. Just about the last thing Tehran wanted was for Damascus to fall to Sunni extremists, a scenario that would have cut off a key logistical lane for supplying Hezbollah. So, the IRGC intervened and once Qassem Soleimani convinced Russia to get involved, everyone was free to just go ahead and drop the pretenses. The Quds and Hezbollah and multiple other Iran-backed Shiite militias effectively took over for the beleaguered SAA and as of September, 2015, Hezbollah enjoyed some “bigly” air cover in the form of the goddamn Russian air force.
So you know, pretty much overnight the rebels (and there was a ridiculous continuum there with one end labeled “ISIS”, the other end labeled “FSA” and the middle labeled “al-Nusra” which underscored the absurdity of the whole situation – thanks to ISIS, al Qaeda was now just middle-of-the-road crazy) went from fighting the SAA + some help from Hezbollah to fighting Hezbollah fully committed, plus God only knows how many other Shiite militiamen (some of whom had traveled over from Iraq where Iran-backed militias were key in the fight against ISIS), plus actual IRGC fighters all operating under cover of the Russian air force and with the help of Russian generals and spec ops. Needless to say, the tide turned quickly, the rebels were summarily slaughtered, Assad regained his grip on the parts of the country that matter and everyone left the U.S. and the YPG to clean up the mess in Raqqa (which took another fucking two years) and now finally, here we are with everyone wondering what comes next.
If you’re Iran, you know what comes next. As far as they’re concerned, what comes next is a permanent, overt presence in Syria, where they already had a presence anyway only it looks like this time, it will be a little more blatant because you know, if it weren’t for the IRGC and Hezbollah, the world might be in the very weird space of having to deal with Bakr al-Baghdadi, Caliph, and also President of Syria.
Look, that’s a roughshod version of events that’s riddled with errors and devoid of pretty much all nuance, but it’s a stylized retelling that serves its purpose which is simply to give you a cartoonish/humorous retelling of what is simultaneously one of the saddest and most ridiculous conflicts in modern history on the way to setting the stage for this weekend’s news which is this: Israeli hit a dozen targets in Syria, four of which were Iranian, as part of what they’re calling a “large-scale attack”, predicated on an Iranian drone violating Israeli airspace. Syria managed to shoot down an F-16 on its way home from conducting the strikes.
“Yesterday we dealt severe blows to the Iranian and Syrian forces,” Netanyahu told his Cabinet on Sunday adding that he had “made it unequivocally clear to everyone that Israel’s rules of action have not changed one bit.”
He also said this: “We will continue to strike at every attempt to strike at us. This has been our policy and it will remain our policy.”
Of course no one doubts that. “Shy” isn’t something the Israeli military is generally accused of being, so in a sense, this isn’t exactly a surprise and one could pretty easily make the argument that the next stage in this conflict is some kind of escalation between Israel and Iran because there is exactly zero chance that Israel is going to just stand around while Tehran and Hezbollah celebrate the establishment of what amounts to an official (as opposed to a tacit) Iranian client state in Syria.
“We do not just talk, we act,” Israeli Cabinet Minister Yoav Galant told AP. “I think that also the Syrians now understand well that the fact that they are hosting the Iranians on Syrian soil harms them.”
Yeah, but again, they already understood that. But what Israel understands is that this calculus is complicated by all the “little green men” still running around over there. Underscoring that risk was Russia’s foreign ministry, which said this:
It is absolutely unacceptable to create threats to the lives and security of Russian servicemen who are in Syria at the invitation of its legitimate government.
Anyway, that’s the situation and it leaves something to be desired in terms of regional stability, as it threatens to ratchet things up another notch at a time when the Saudis are already trying their best to see about marshaling any and all available resources to counter Iran’s expanding influence.
Now to markets (and that intro turned out to be far longer than I thought it was going to be, but as the Heisenberg crowd knows, that’s the way it usually turns out). This is rattling Israeli shares which are, like other global equity markets, trying to make sense of the turmoil on Wall Street.
Today’s losses on the TA-35 are not too dramatic, but shares are down more than 1% and recent declines are starting to mount up at 5% and counting:
Sunday’s losses are “mainly due to developments in the security arena over the weekend,” Ilanit Sherf, head of equity research at Israel’s largest institutional investor, Psagot Investment House told Bloomberg, adding that “the confrontation in Syria was irregular in a number of ways, and there is concern, of course, of further entanglement.”
Right. And Teva isn’t helping. It’s down 10%-ish in two days.
Meanwhile, Saudi shares have fallen for six consecutive sessions – that’s the longest losing streak since July:
“Volatility has been high in international markets,” Al Ramz Capital’s Marwan Shurrab commented, when contact by Bloomberg. “We should not expect total isolation”, he added, referencing the turmoil in international equities.
Other Mideast stocks are holding up ok (notably, Qatari equities are higher by nearly 2%).
The bottom line here is that you should probably keep an eye on the Israel situation. It looks like they’re prepared to take this up a notch if Iran gets too brazen and although global markets have demonstrated time and again that they can shrug off geopolitical tension, this time could always be different.