🌎 The Effects of War on Global Economy
Happy Monday edition of Hump Days,
I was in VidSummit in Dallas this past week and it was a blast getting to meet other YouTubers and people in the space! I then celebrated my birthday on Friday and then went straight to a wedding Saturday in Carmel. What a fun, yet exhausting week! The highlight of my trip? Having Diet Coke at 7:00AM at the airport. I feel like that’s a new record for me on how early I’ve had soda. Yes, it’s somewhat disgusting.
We are still digesting the Israel war and have covered it in today’s edition the main things you need to know. It’s always tragic to see a conflict where innocent lives are lost - and terrorism and mass-killings have no place in the world. If you are unsure of what’s happening - here are two video summaries I watched to get caught up on the entire history of the conflict in Israel/Palestine.
Video 1: Vox: A Brief History
Video 2: History of Maps
Market Report
Hamas launches surprise land, air and sea attack on Israel (NBC)
On Saturday, Hamas fired thousands of rockets at Israeli cities. Hamas terrorists then broke through the border barrier between Gaza and Israel and entered southern Israel, occupying Israeli villages and towns, and killing soldiers and civilians.
According to reports, Hamas also took a “significant number” of Israelis hostage.
The attack comes after weeks of escalating violence and amid a deep political crisis in Israel over the Netanyahu government's judicial overhaul, which has weakened the country's military, economy and society.
According to Hamas, Iranian security officials helped plan the Saturday surprise attack on Israel and gave the green light for the assault.
A month ago, the Biden administration gave Tehran access to $6 billion in Iranian oil revenue that had been blocked by U.S. sanctions.
Since the initial attacks, Israel has retaliated with airstrikes and has deployed hundreds of thousands of reservists.
On Sunday, the U.S. moved a carrier strike group closer to Israel in response to the Saturday surprise attacks. The reason is to “bolster regional deterrence efforts”.
The strike group includes USS Gerald R. Ford, the U.S. Navy’s most advanced aircraft carrier, along with multiple missile cruisers and missile destroyers.
The DoD is also taking steps to bolster U.S. Air Force fighter aircraft squadrons in the region.
While Israel’s role in global oil supply is negligible, the bloody outbreak threatens to embroil both the U.S. and Iran.
The latter has become a major source of extra crude this year, alleviating otherwise tightening markets. Increased American sanctions on Tehran could constrain those shipments.
Any retaliation against Tehran could endanger the passage of vessels through the Strait of Hormuz, a vital conduit that transports much of the world’s crude and which the Iranian government previously has threatened to close.
According to Goldman Sachs, the conflict reduces the likelihood of a near-term normalization in Saudi-Israeli relations and, as part of that, reduces the probability of an early unwind of the Saudi output cuts.
Second, given the possibility of tensions re-escalating, the risks to Iranian oil supply projections are now tilted to the downside.
According to Morgan Stanley, the impact from events in Israel is “likely limited” as neither that country nor its direct neighbors are large oil producers, and the near-term risk to crude supply is limited.
Meanwhile, Citi notes that the attack by Hamas has “bullish implications” for oil, although the key issue is for how long that’ll be the case. They believe there are now growing risks of an Israeli attack on Iran, given its backing of Hamas.
Israel-Hamas war pressures U.S. weapons stockpiles (Bank of America)
According to the New York Times, the U.S. has a strategic stockpile of U.S. weapons housed in Israel. It is unclear exactly how much that stockpile has been drawn down for use in Ukraine and what exactly remains in the inventory.
The stockpile has been described as “vast and little known” and provides arms and ammunition for the Pentagon to use in Middle East conflicts. The United States has also allowed Israel to access the supplies in emergencies.
On Sunday, Defense Secretary Austin directed the USS Gerald R. Ford Carrier Strike Group to the region and said the Pentagon would be sending additional aircraft, military supplies, and munitions to Israel.
If the Israeli war with Hamas becomes a potentially longer conflict, this may force the U.S. government to increase investment in defense to build munitions and weapon systems at faster rates and in higher volumes.
Ultimately, the U.S. will be supplying munitions, missiles, and anti-missile systems to two allies (Ukraine and Israel) on top of supplying its own needs.
The U.S. is already in a massive ammo shortage after Ukraine aid depleted its supply.
Amazon launches first test satellites for Kuiper internet network (Reuters)
On October 6, Amazon launched its first pair of prototype satellites for its anticipated Kuiper internet network from Florida, marking its initial stride towards deploying over 3,200 satellites to provide global broadband service, in competition with SpaceX's Starlink.
The launch aims to test Amazon's space technology before its massive deployment in the coming years. This comes as part of a $10 billion investment by Amazon in the Kuiper project, with a commitment to the U.S. FCC to deploy half of its satellite constellation by 2026.
Amidst growing competition in the burgeoning market for low-Earth orbit broadband internet service, Amazon is planning to offer consumer terminals at a cost of $400 each.
The U.S. trade deficit narrowed in August to the smallest in three years. (Axios)
The U.S. trade deficit shrunk to its smallest in three years this August, decreasing by about 16% to $58.3 billion compared to August last year, largely due to a significant drop in imports of consumer and investment goods which might indicate a dip in U.S. demand.