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Unknowable Consequences
Should markets care about the Gaza Strip?
I don't know. Should anybody? The answer to that latter question appears to be "no" outside the Muslim world.
Images, video and graphic accounts of the October 7 massacre in Israel have understandably galvanized public opinion. Most Westerners (I dare say the vast majority of Americans) know very little about the Israel–Palestine conflict if they know anything at all. But even those who do understand it in broad strokes are driven by the barbarism on
100 percent.
I initially thought the instant headlines of the Hamas attack representing Israel’s 9/11 was just clickbait-ish hyperbole or hysteria. But the more I read, the more the parallels are striking, and not in the sense that an upstanding Western-leaning nation was viciously attacked without legitimate reason or provocation, or that said nation bore no responsibility for its being attacked or its failure to stop or limit said attack. But the consequent bloodlust and facile conflation of civiilans and terrorists are certainly similar at the very least.
As I look back on history it is very hard to find a significant siege that has failed — maybe Malta. If the IDF wants to shoot all the fish in the barrel my guess is they will. This will be an Old Testament battle as long as the bullets hold out. If nothing else, Israel is just pissed and embarrassed at having been surprised.
The US occupations of Afghanistan and Iraq are a poor model for the world, and hundreds of thousands of civilians died. I wish we could all do better.
Hamas is not just a terrorist group operating in Gaza, it is the government of Gaza. Its operations, fighters, weapons are deeply embedded throughout Gaza and it controls money and supplies that reach Gaza.
A war between Israel and Hamas is effectively a war between Israel and Gaza, and heavy casualties and destruction in Gaza is inevitable, even if every Israeli strike hits only Hamas targets.
The markets will care if a broader war erupts and/or energy supplies are affected.
Similar to Russia/Ukraine war – immense destruction and casualties have not impeded markets, only broader economic effects have mattered (save for specific industries like defense).
Gazans will sit and get bombed to death rather than give up their few remaining land rights to Israel. The place looks like Dresden now already. Middle Easterners have frequently chosen martyr as a career path during the past few hundreds of years. Good chance the IDF will get their asses handed to them in urban fighting like they got them kicked in Lebanon in 2006. IDF’s new generation isn’t the same as 73. Israel has bad demographics, 20 % arab. Too many torah reading non-draftees willing to send seculars out to fight. As we’ve seen, AI intel pretty bad too. Lots more blood ahead, now and for decades ahead unless we get to two states….(that’s a maybe).
The US should insist on a two state agreement, as a condition of continuing military/humanitarian aid.
I think we can look to Iraq, and Afghanistan for some answers to those known, unknown unknowables from the last paragraph.