Are Markets Taking Gaza Conflict Seriously Enough?: John Authers

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An Underreaction to a Coming Overreaction

Saturday’s attack on Israel by Hamas shocked the world and opened up suddenly all-too-plausible scenarios that would lead to all-out disaster. In Bloomberg Opinion, for example, Andreas Kluth drew an explicit parallel with 1914, and the way that an assassination in Sarajevo eventually led the world’s greatest powers of the time to go to war with each other.

At a financial level — which is the plane on which this newsletter operates — there’s been a strong reaction. But there’s a ...