We knew 2020 would be an interesting year, in the old-curse meaning of the word. It only took two days for us to begin to find out just how interesting it will be.
American drone strikes on Thursday killed Qassem Soleimani, leader of the Quds Force of Iran’s Revolutionary Guard Corps. Some pundits equated this to taking out a country’s vice president; he was just that big of a deal in Tehran. He was also a monster responsible for hundreds of thousands of deaths, writes Bobby Ghosh. His own demise was the inevitable outcome of his hubris and Ayatollah Ali Khamenei’s growing aggression toward the US.
Past presidents avoided harming Soleimani, hoping to avoid pushing tensions to dangerous new heights. But Eli Lake writes that President Donald Trump was right to treat him and the regime like terrorists. Contrary to widespread fears, this isn’t starting a new war, in Eli’s estimation, but opening a new phase in an old war.
Still, it’s a huge gamble and a momentous change in US policy: Where once it avoided an escalating spiral of violence with Iran, now it seems to be trying to shock it into de-escalation, writes Hal Brands. And the ploy just might work. But its success will require far more finesse than Trump has exhibited so far, Hal warns.
Markets have exhibited mild concern, with oil and safe-haven assets rising and stocks falling. But there’s been no panic, mainly because the risks from here are all black swans, writes John Authers, and thus impossible to measure. The currently measurable risks aren’t all that destructive to capital yet. Traders may also believe armed conflict between the US and Iran is off the table and that central banks will rush to the rescue in any event, writes Mohamed El-Erian. And they may be right.
But they also may need more hedging, because the risks of a profound mistake keep rising dramatically with every new provocation. And the Soleimani assassination drives home how America’s global influence is no longer a stabilizing force for oil and other markets, writes Liam Denning. Things could soon enough get much more “interesting.”
Bloomberg
