WSJ What’s News - Israel, Hezbollah Seek De-Escalation After Show of Force

Episode Date: August 26, 2024

A.M. Edition for Aug. 26. After a weekend of exchanging heavy fire, Israel and Iran-backed Hezbollah signal a desire to avoid a wider military conflict. The WSJ’s Dov Lieber says risks remain. Plus, France detains the Russian-born CEO and founder of the Telegram messaging app, fanning tensions with Moscow. And, NASA taps SpaceX to bring two astronauts home in a blow to Boeing’s Starliner. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

OCI is the single platform for your infrastructure, database, application development, and AI needs. Do more and spend less like Uber, 8x8, and Databricks Mosaic. Take a free test drive of OCI at oracle.com slash wall street. After heavy fighting this weekend, Israel and Hezbollah tried to prevent a wider war. We'll get the latest from Tel Aviv. The sense now that, let's say, this chapter has de-escalated, but every time you de-escalate, you actually sow the seeds for even greater escalation. Plus France arrests the founder of messaging app Telegram fanning tensions with Russia. And while poorer Americans felt inflation

less than others during the pandemic, we'll look at why it's usually the other way around. It's Monday, August 26th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. headlines and business stories moving your world today. We begin today in Israel, a day after a heavy exchange of fire between the country and Hezbollah in neighboring Lebanon raised concerns about the breakout of a wider Mideast conflict. But after Hezbollah launched hundreds of rockets and drones at Israel, and around a hundred Israeli planes struck targets in Lebanon. Both sides are signaling their intent to de-escalate. Joining me now with more on the situation is Wall Street Journal

correspondent Dov Lieber in Tel Aviv. Dov, before we look at whether efforts to cool the situation are likely to be successful, fill us in on exactly what happened yesterday and how it came about. Well, for weeks now Hezbollah has been saying that they will take revenge or retaliate for Israel assassinating the chief of staff of their military, Afar Chukar, who was very close with the leader of Hezbollah, Hassan Nasrallah. So the region has been tense for weeks now, waiting for that retaliation. It came finally at 5 a.m. yesterday. And there's a question of what came first.

Hezbollah says they were able to fire hundreds of rockets, largely at northern Israel, but also they sent drones to central Israel. And Israel says they preempted Hezbollah's attack and sent 100 planes to strike these rocket launchers in southern Lebanon. And Israel says they managed to destroy around two thirds of those before they fired

their rockets at Israel. And in a way, each side walks away claiming success. That's usually the best case scenario you can ask for. Dov, you were describing there a pretty heavy exchange of fire and yet at the end of the day, both sides have managed to walk away relatively unscathed. Is this by luck that a major flare-up was averted or something that was calculated to avoid escalation? Something about yesterday's events that is very difficult to discern. What were the

intentions of both sides? On one point, you look at Hezbollah, they said they wanted a serious retaliation, but at the end of the day, they didn't really have a lot of success. On any given Sunday, Hezbollah has a lot more success targeting Israeli military installations targeting Israeli cities they really do but at the same time we reported and Hassan Nasrallah himself said that they targeted a major military intelligence base just north of Tel Aviv if they had hit those installations that would have immediately sparked a war at the same time Israel says it said again a hundred planes into Lebanon but at the same time this was not a very lethal incident in terms of their attacks

on Hezbollah. So the intentions of both sides in this last round wasn't exactly clear, whether they puffed themselves up or was it really a serious round or a serious battle. It's really hard to tell actually. Interesting. And then though both sides are signaling now that they want to de-escalate, as an expert in your story reminds us, as long as this daily tit-for-tat continues to be the norm, this possibility of escalation is kind of ever-present, right? Tell us a

little bit more about what the risks would be on that front. Now, Seleucus is something interesting about if Israel tries to deny their successes, they may be forced to carry out another attack. And Netanyahu said really that this was only the beginning of a new type of policy in which Israel will be far more aggressive towards Hezbollah. It's very important to understand that things have shifted in Israel. Because the war in Gaza is really slowed down and the country can really turn its attention towards Lebanon.

That's actually from Israeli point of view, the major war that's affecting them today. And so there's a lot more support in Israel for Israel to be far more aggressive towards Hezbollah and the potential remains that the next bout could be extremely escalatory. Dov Lieber, thank you so much as always. Thank you for having me, Luke. France has detained the Russian-born founder and CEO of the popular telegram messaging app, Pavel Durov, drawing angry reactions from Russian officials. French media reports Durov's detention relates to an investigation opened into the company's

role in spreading child pornography and its alleged refusal to cooperate with authorities on this. Telegram said Duroff has nothing to hide and that the company complies with EU rules. Journal reporter Matthew Dalton in Paris said the detention of a man dubbed by many as Russia's Mark Zuckerberg could carry significant value for Western intelligence agencies. There could be motivation by French intelligence agencies, by Western intelligence, to have Durov in custody to see if they can use him as an asset to gain access to the encrypted communications that Telegram hosts. It's the most widely used messaging app in the post-Soviet world, so it would potentially be a treasure trove of information if they can crack it.

According to Russian state media, Russia has requested consular access to Dorov. And police in Germany have detained a 26-year-old Syrian national in connection to a knife attack on Friday that killed three people and wounded eight others that they're treating as an act of terror. Islamic State has claimed responsibility for the attack. The incident puts Germany's government under pressure ahead of closely watched elections in the east of the country where the far-right anti-immigration party AFD is expected to make big gains at the polls. Coming up, new research finds that poorer Americans are once again being hit harder

by inflation after a short reprieve, and NASA turns to SpaceX to get a pair of astronauts delivered to the ISS by Boeing back to Earth. We've got those stories and more after the break. TNB Tech Minute gives you the day's top tech headlines, featuring newsmakers that shaped the tech world and beyond, like OpenAI CEO Sam Altman. The two things that I think will matter most over the next decade are abundant and inexpensive intelligence and abundant and cheap energy. And if we can get these two things, then it's almost difficult to imagine how much else we could do.

Check out TNB Tech Minute in the Tech News briefing feed from the Wall Street Journal. In an update to a story that we covered earlier this month, NASA says two astronauts at the International Space Station will remain there until February before being brought home by SpaceX. That's a setback for Boeing, which transported the astronauts in June for a short test mission before it hoped to earn certification to ferry NASA crews to and from the ISS. Instead, Boeing's Starliner spacecraft will now return uncrewed in September amid lingering questions about the technical challenges it faced during its mission.

A Boeing spokeswoman declined to comment on the company's plans for Starliner. For astronauts Barry Wilmore and Sunita Williams, the decision means they will spend about eight months in space compared with the eight-day mission they originally embarked on. Meanwhile, SpaceX is set to conduct the first private spacewalk later this week in a test of new spacesuits that it's developed. The mission, funded by tech billionaire Jared Isaacman, is slated to launch tomorrow, with the spacewalk scheduled to happen in the following days. Poorer Americans were less hard hit by a burst of inflation that came on the heels of the

pandemic, according to new research released by Xavier Gérevel at the London School of Economics. However, as journal economics reporter Justin Leihart told us, even that bit of relief for less well-off households has proved to be temporary. Poor people don't commute as much, don't spend as much on cars. And those were two things shortly after the pandemic hit

that went up a lot. So they actually saw a little bit lower rate of inflation. But what we've seen more recently is really a reversion to what we'd seen in the past, which is that inflation rate of poor Americans is a tiny bit higher in any given year than it is for richer Americans. So there's an estimate that millions more people would be below the poverty threshold if we adjusted incomes not using the overall inflation rate, but if we adequately adjusted people's spending

for their income category. Facing intensifying competition in China, IBM is shutting its R&D department in the country with some employees being told that jobs will be added in India. The move marks the latest retreat from China by a top U.S. tech company, with the likes of Microsoft downsizing its cloud and AI operations earlier this year and asking local employees to consider transferring elsewhere. And in other markets news, we're watching today a federal antitrust trial that will

decide the fate of Kroger's planned $20 billion purchase of rival Albertsons is set to begin in Oregon. The roughly three-week trial will test whether distribution company CNS Wholesale Grocers, which is buying close to 600 stores in a roughly $3 billion divestiture deal with the two giants, can credibly make up for lost competition from the merger. And U.S. stock futures are ticking higher, putting the Dow and S&P 500 on course to hit record highs after Fed Chair Jerome Powell on Friday said the time has come for rate

cuts. And finally, credit card perks and rewards are a big part of what gets us to sign up to a particular card. And for those who carry high-end ones, the likes of Amex, Chase, and Capital One have been increasingly offering luxurious experiences in exchange for high annual fees. Journal personal finance reporter Imani Moise told our Your Money Briefing podcast about some of the flashiest benefits from VIP spaces at places like airports and music festivals

to exclusive lounges that act like members clubs. Traditional credit card rewards like miles, cash back, things like that, they tend to be underutilized. Americans had over 33 billion in unused credit card rewards at the end of 2022. By comparison, these experience-based rewards tend to sell out as soon as they're available. They hope that number one, you have a great experience,

and number two, that you tell a friend, most of these lounges give card holders a plus one, or in some you have a great experience, and number two, that you tell a friend. Most of these lounges give cardholders a plus one or in some cases even a plus four. And what they're hoping is if you bring along a friend who's not a cardholder, maybe they also have a great experience and they're convinced to open up an account as a result of that. Nat. For more on the sometimes extravagant perks offered by credit cards, head on over to the Your Money Briefing podcast. And before we go with back to school, just around the corner, many school districts are banning cell phones in classrooms.

Is yours one of them? What's your reaction? And what questions do you have about the effect that phones or the banning of them might have for your kids? To weigh in, send a voice memo to WNPD at WSJ.com or leave a voicemail with your name and location at 212-416-4328. We just might use it on the show. And that's it for What's News for Monday morning. Today's show was produced by Kate

Bulevent and Daniel Bach with supervising producer Christina Rocca. And I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show. And until then, thanks for listening.