WSJ What’s News - Putin’s ‘Merchant of Death’ Is Selling Arms to the Houthis

Episode Date: October 7, 2024

A.M. Edition for Oct. 7. Russian weapons dealer Viktor Bout is trying to broker the sale of small arms to Yemen’s Houthi militants, just two years after he was released from a U.S. jail in a trade with Moscow for American basketball star Brittney Griner. Plus, the WSJ’s Anat Peled brings us an update on the humanitarian situation in Gaza, one year on from Hamas’s surprise attack on Israel. And, with a new hurricane headed toward Florida, the WSJ’s Deborah Acosta explains the effects of extreme weather on the real-estate market. Azhar Sukri hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

This podcast is brought to you by CME Group, the world's leading derivatives marketplace, offering the widest range of global benchmark products across all major asset classes. CME Group, where risk meets opportunity. Russian weapons dealer Victor Boot is back in business. This time he's selling to the Houthis. Plus Israel launches a new offensive in northern Gaza and Hamas fires rockets at Israel one year after the war began. And with another hurricane headed towards Florida we look at how extreme weather is reshaping the real estate market and the

communities who live there. A lot of people are listing their homes and there are fewer people interested in buying. These pressures already pushing on parts of Florida are going to continue to flood the market with inventory. It's Monday October the 7th. I'm Azhar Sukri for the Wall Street Journal filling in for Luke Vargas. Here is the AM edition of What's News, the top headlines and business stories moving your world today. We are exclusively reporting that Russian weapons dealer Victor Boot is trying to broker the sale of small arms to Yemen's Iran-backed Houthi militants. Boot was released two years ago from a US jail in the trade with Moscow for American

basketball star Brittany Greiner. The potential transfer of $10 million worth of automatic weapons, which has yet to happen, stops well short of the sale of Russian anti-ship or anti-air missiles that could pose a significant threat to the US military's efforts to protect international shipping from the Houthis' attacks. People familiar with the deal didn't know if it was being negotiated at the Kremlin's behest or just with its tacit approval. Nevertheless, journal reporter Benoit Faucon says arming the US-designated terrorist group would mark an escalation for Russia, which has been strengthening its ties

with Tehran but has generally stayed away from the confrontation between Israel and its Iran-backed enemies. We know Viktor Bode is obviously very close to the Russian government, but we don't have evidence from the specific meetings for selling the weapons that the Kremlin was involved. If there was an approval from the Russian government, that means they would enter an indirect confrontation in a much more active way, because you do have two fronts. Effectively, you have one in Ukraine and one in the Middle East where Russia would be somehow involved.

An attorney who represented Booth in the US declined to discuss whether his client had met with the Houthis. A Houthi spokesman declined to comment. The Kremlin didn't return a request for comment. Israel's military has reopened an offensive in northern Gaza overnight to fight militants who have resurfaced in the area. Ahead of what is expected to be a broader push, the military called on the 300,000 people estimated to be living in the northern part of the Strip to evacuate to a humanitarian zone in the south. A year after Hamas led a surprise attack on Israel, the authorities there say left 1200 people killed and 250 others taken hostage. More than 40,000 Gazans have been killed by

fighting in the enclave, that's according to Palestinian authorities. But nowadays, much of the attention has shifted away from Gaza. Israel continues to press its air campaign against Hezbollah in Lebanon, with heavy strikes hitting southern Beirut over the weekend. It's also expected to retaliate against Iran for launching about 200 ballistic missiles on Israel last week. I asked Journal reporter Anat Pellid in Tel Aviv for an update on the humanitarian situation in Gaza one year on.

Gaza's over two million residents, many of them are displaced, amid widespread concerns about hunger, access to clean water, sanitation, spread of disease. We still have around roughly a hundred hostages in Gaza. More than 30 of them are dead and the others we don't know, they haven't been announced dead. But from our conversations with released hostages that was around day 50, the conditions were not good. So lack of food, sanitation.

Anat also gave me an update on the fighting in Gaza. Israel's in a very different situation. It's not holding land. Its forces stay in two areas. One is the Gaza border with Egypt called Ra'afa. And then we have a strip that bisects the enclave called Nitsareem. And so we have forces stationed there. What we've seen through the past year is basically IDF forces going back sometimes two times,

three times more to areas like Jabalia, where the IDF announced yesterday that they're going back in again. And other than that, we're seeing raids going in and out. And as Israel shifts its focus to the border with Lebanon and to the invasion of Lebanon, we're seeing just more and more forces being called up there and the energy and focus just going there. And we're just learning that Hamas has fired rockets at central Israel this morning, forcing Israelis into bomb shelters on the one-year anniversary of the attacks that sparked the war in the Middle East.

Initial reports from Israeli medics said two people were lightly injured in today's strikes. We are exclusively reporting that a number of big oil companies are urging Donald Trump not to gut President Biden's signature climate law if he's elected next month. Many in the fossil fuel industry opposed the Inflation Reduction Act when it was passed in 2022. But according to our reporting, oil giants including ExxonMobil, Phillips 66 and Occidental Petroleum are now among those extolling the benefits of that law. The IRA has earmarked billions of dollars for low-carbon energy projects that they are betting on, including renewable fuel, carbon capture and hydrogen projects.

Trump has called President Biden's climate efforts the green new scam, and last month promised to cut unspent IRA funds. A Trump campaign spokeswoman said the former president's policies turned the US into a net exporter of energy. We can also exclusively report that activist investor Starboard Value has taken a roughly $1bn stake in Pfizer and plans to push the struggling drugmaker to improve its performance. According to people familiar with the matter, Starboard has approached two former Pfizer executives to help its efforts, and they've expressed interest in helping.

Other specifics couldn't be learned. Pfizer's shares have been roughly cut in half from a record high notched in late 2021, after the company delivered the world's first Covid-19 vaccine. Its shares are up moderately in off-hours trading. And in other news moving markets today, shares of New York-listed lithium producer Arcadium Lithium have surged in off-hours trading, after news that mining giant Rio Tinto is in talks to buy it. It's the latest attempt by Rio to establish a foothold

in the fast-growing market for lithium, a critical mineral used to power electric cars. Rio currently relies on iron ore for the bulk of its profits. A successful takeover would make Rio Tinto one of the world's top lithium producers. Coming up, in the wake of Hurricane Helene and with another category four storm on track to hit Florida this week, we look at the mounting difficulties facing homeowners. That story after the break.

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Milton, a Category 1 storm as of late yesterday, is expected to strengthen to a Category 4 hurricane and make landfall on Florida's west Coast on Wednesday. It brings more storm surge and flood warnings to communities still reeling from the damage caused by Hurricane Helene. Homeowners who were affected by it face the prospect not just of having to repair their homes, but also of ballooning insurance premiums. And as journal real estate reporter, Deborah Acosta reports, a softening real estate market that's leaving some with few options. And Deborah

joins me now. Deborah, describe to us just how badly Florida has been affected by extreme weather recently. Yeah there's been a lot of these low-lying coastal communities have experienced frequent flooding in the past few years. And in particular, there's one neighborhood in St. Petersburg called Shore Acres, where we saw water storm surge as high as more than six feet. And some of these homes that had never flooded before flooded for the first time. Other homes that have been flooding consistently flooded again and worse than ever before. And so of course this has created a big problem

for homeowners in the area, many of whom told me they wanna sell, they wanna get out. In this particular community, I spoke with homeowners who are dealing with insurance premiums that have already quadrupled in the past few years. And of course they

assume they expect these insurance premiums to increase even further. For other homeowners insurance just drops them entirely. And how is that affecting the housing market? You write that more people were looking to sell even before Helene struck. So while prices have been flat in the Tampa Bay area they've experienced a 58% increase in supply in August compared with a year ago and a 10% decrease in demand and that's according to parcel labs a real estate data and analytics firm so what does that tell us it tells us that a lot of people are listing their homes for sale and There are fewer people interested in buying. Analysts imagine that there might be even more homes listed after this event

once they've been renovated. And so these pressures that we're already pushing on this area and in other parts of Florida are going to continue to flood the market with inventory. Debra, the picture I'm getting is that of homeowners who can't afford to keep pace with the rise in insurance prices or to take on the cost of rebuilding themselves. There don't seem to be many good options. Does that risk driving people out? You know, there's a lot of first-time home buyers in this community. I spoke with a couple, the wife was a teacher, the husband works as a manager at a grocery store, and they expect that the only people who will be able to live there are people who will be able to raise the homes and build up on stilts, homes that are much sturdier, that are able to withstand these kinds of flood pressures. And so that's definitely the case.

It's a vibrant community, a vibrant neighborhood filled with young people who are starting out in life. And it's clear that it's gonna be really tough for those types of people to remain there. That was journal reporter, Deborah Acosta. Deborah, thank you very much indeed. Thank you. And that's it for what's News for Monday morning.

Today's show was produced by Daniel Bach and Kate Bullivant with supervising producer Christina Rorke. I'm Azar Sukri for The Wall Street Journal, filling in for Luke Vargas. We'll be back tonight with a new show. Until then, thanks for listening.