Here is another post with the best material I have found about the biggest geopolitical event in Europe that is reshaping everything in shocking speed, buckle up! Do NOT click on clickbait stupid shit, savor your attention on things that matter! We go heavy on Education today about the Ukraine Russia War, the stunning speed and effectiveness of the sanctions, madman Putin and hero Zelensky and lots more. Stand With Ukraine!
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Russia’s Plan C
This was a late addition to the blog post as it is the most current (written on March 2). And I think the author nails it!
We are in day #8 of this war and we all have pretty much realized how senseless it is. Because…
As the Russo-Ukrainian War takes a darker turn it is important to emphasise this essential point. This is a war that Vladimir Putin cannot win, however long it lasts and however cruel his methods. From the start the Russian campaign has been hampered by political objectives that cannot be translated into meaningful military objectives….This underlying strategic folly has been reinforced by the tactical ineptitude with which the campaign has been prosecuted.
I am being hopeful that there will soon be a negotiated cease fire and eventual end to this madness. I think the Russian side has realized its mistake and is feverishly trying to find a face saving deal before they get lynched…which is likely still going to happen eventually. Regime change is coming folks…in Moscow before Kyiv. Of course, I am no expert in this area and, you know, wars are unpredictable and…I need to say this to just make me feel better because we all need to hear it: We Are All Ukrainians!
Lastly, though this has yet to be of value, the Russians accepted the possibility of a negotiated cease-fire, as opposed to an imposed peace, by agreeing to talks at the border with Belarus. It is worth noting that Putin prior to the war showed no interest in direct talks with the Ukrainian government, not least because this would confer upon them some legitimacy. Putin’s spokesman has acknowledged Zelensky as the true leader of Ukraine.
If there was ever any possibility that this war would end with the complete subjugation of Ukraine by force of arms this has now gone. Nor will it end with Russian forces being chased out of the country. Most likely there will be a negotiated conclusion, probably at the cease-fire talks. Although it is possible to conjure up some document in which the Ukrainians promise not to do things that they would not have done anyway (like develop a nuclear arsenal or be Nazis), and might even make some major concessions, such as accept the loss of Crimea, they must emerge from this ordeal as a free and independent country with no Russian troops on their soil.
The Roots of the Ukraine War: How the Crisis Developed
Excellent background, learn from history. But make new one. Ok, that did not come out right as Putin sure expected to insert himself in the history books with a triumph. Instead…lol.
Understanding the War in Ukraine
First, let’s get educated about it from a military historian. Please note the places to donate listed in the fourth paragraph.
Long excellent piece. A bit outdated, especially on the economic sanctions front.
And just this so you keep it in mind while consuming news about the war:
Here I want to caution you: a lot of the information you will see over the next few days is coming through the fog of war. Some of it will be intentional disinformation. No one in the media or on social media really has any kind of precise view of what is going on. Even the intelligence agencies – for Russia, Ukraine but also NATO countries – are likely struggling to get a firm grasp on what is happening where.
Moreover, war is not the realm of certainties, but, as Clausewitz says (drink!) subject to “the play of probabilities and chance” (which is to say, ‘friction’). War is unpredictable by its very nature. No one knows what is going to happen, but we can venture some very general suggestions of the most likely course of events.
‘Yes, He Would’: Fiona Hill on Putin and Nukes
This is a must read interview by Fiona Hill. Remember her? She is the Russia expert who testified in the Trump impeachment hearings. Read the whole thing, it is fantastic. And chilling.
The Terrible Truth So Many Experts Missed About Russia
I think they are right. Like Macron said, the dude looks different in the past few years…
The political science literature suggests that personalist dictatorships are more erratic and dangerous to the outside world than other sorts of autocracies.
Researchers have found they are more likely to start wars, for instance (institutionalized civilian-run regimes are about as apt to use force as democracies), and also tend to perform worse militarily (not surprising, since their leaders are often surrounded by yes men). But while civilian-run regimes might be less apt to launch destructive, harebrained conflicts in the short term, in the long term they can still be ticking time bombs.
That’s because as they age, their intricate power structures often devolve and allow dictators to consolidate personal control. In a forthcoming paper, Andrew Leber and Matthew Reichert of Harvard University and Christopher Carothers of the University of Pennsylvania theorize that this tends to happen when there’s no influential old guard of political elites who can stop them. All of which pretty much sums up what has happened in Russia over the last two decades.
Putin Accidentally Revitalized the West’s Liberal Order
It is amazing what this guy has done in a week, wow!
Vladimir Putin has attempted to crush Ukraine’s independence and “Westernness” while also demonstrating NATO’s fecklessness and free countries’ unwillingness to shoulder economic burdens in defense of our values. He has achieved the opposite of each. Endeavoring to destroy the liberal international order, he has been the architect of its revitalization.
We have no right to bitch about anything ok?
Those of us already living in free societies owe Ukrainians a great debt of gratitude. Their courage has reminded us of the nobility of sacrifice for just causes.
How Vladimir Putin Miscalculated the Economic Cost of Invading Ukraine
To me in the financial services world, I must admit, I can not believe my eyes. What is happening is UNREAL!
If Putin was indeed calculating along these lines, he was gravely mistaken. On Saturday, Ursula von der Leyen, the president of the European Commission, announced that the E.U.—in coöperation with the United States, the United Kingdom, and Canada—was taking steps to “cripple Putin’s ability to finance his war machine.” The transatlantic allies moved to bar “selected Russian banks” from the global SWIFT messaging system, which financial institutions use to facilitate cross-border transfers of money. And, in a more surprising step, they also announced that they would impose “restrictive measures” on the Central Bank of Russia, with the explicit aim of preventing it from using its large stock of foreign-exchange reserves to lessen the impact of the sanctions. “This will show that Russia’s supposed sanctions-proofing of its economy is a myth,” a senior official in the Biden Administration said, in a teleconference with reporters. “The six-hundred-billion-plus war chest of Russia’s foreign reserves is only powerful if Putin can use it.” The measures the allies announced were designed to block Moscow’s Central Bank from buying rubles from Western financial institutions, a step that could offset the impact of sanctions and stabilize the Russian currency. “The ruble will fall even further, inflation will spike, and the Central Bank will be left defenseless,” the U.S. official predicted.
First, I must admit getting an agreement on SWIFT was possible but unlikely. And Putin was certainly betting on that too. But the Central Bank action is such that I really think it is so strong that it will force a face saving deal. The sooner, the better of course for humanity. And the poor Russian citizens who certainly do not support this war. In the meantime, Russia is going full speed into a Great Depression and the sooner someone inside the Kremlin knocks off Putin or the people finally rise up to get rid of him the better for humanity. They must realize after this war that this is certainly not the guy to make Russia strong as their standard of living collapses shockingly fast!
Details of how the G-7 countries decided to target Russia’s Central Bank have yet to be revealed. [I would love to find out one day! I remember Biden being asked a question in a press conference in a mocking way about how the coming sanctions will be proved ineffective and he responded with “ask me in a month”. He was wrong! Ask me in a week was the right answer.]
Russia’s Economic Meltdown, Putin’s Big Mistake, and the West’s Financial War Against Vlad and the Oligarchs
Fantastic podcast by Derek Thompson dealing with the economics of this war. We are in unprecedented territory here and expect more inflation and supply chain interruptions to be prolonged. Hopefully not for long. So, next time you pay a little more for gas, you know, stop bitching and see what the Ukrainian people are enduring ok?
Live Monitoring of All Sanctions Against Russia
Amazing work!
And a few more miscellaneous links:
Countries voting with Russia in the UN: Belarus, North Korea, Syria, Eritrea. So pathetic!
Over on Twitter, @zoyashef is great, here is a must read thread from her.
This tweet sums it perfectly:
Putin’s long-standing goals:
– Economic prosperity, or at least stability, to compare with the chaotic 1990s
– Have a ukraine friendly or at least neutral to Moscow
– Create divides in the West to undermine any sanctions or other hostile policiesAll up in smoke in six days.
— Shaun Walker (@shaunwalker7) March 1, 2022
This is the first few minutes of Zelenskyy’s inauguration speech in 2019. It is amazing!
And latest tweet from Yomadic Nate in Kyiv:
Day eight, from central #Kyiv
During the night, very loud, very close, explosions last night. Must be missile strikes. Windows shaking.
Bad sleep.
We are strong.#Ukraine is strong.— Nate Robert (@yomadic) March 3, 2022
And I leave you with these two pics and you tell me who is the strongest leader.
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A CO Venture X and Alaska Business Visa conversions finally came through today. A reader emailed me to say a CSP approval is in the books. When that comes in…three conversions in a month triples the number of conversions from the previous month. You guys, I am feeling the momentum here…at this rate, I wonder when the takeover bid by TBB to gobble TPG will become a reality!
Ok, please don’t answer that, LOL.
I am traveling to Ukraine when this madness is over!
Yay! The Alaska card worked! Plus perfect timing because due to taxes and CPA fees (mostly), the minimum spend is spent already! Woot! I think 24 hours to hit that is a personal record!
Great collection of links, read a couple already but there is so much here. I worry tremendously over all this though as so much more can go wrong and with a megalomaniac like Putin and instability in Russia, Belarus and such, well, it is scary!
Hoping that things resolve soon and in a good, or at least decent way!
https://www.bloomberg.com/news/articles/2022-03-02/russian-oligarchs-yachts-head-for-maldives-as-sanctions-levied
Waiting for the points & miles blogs to weigh in on the Maldives angle.
I’ve been surprised at the vigor of the West’s response. When Russia invaded last week I figured Putin would mostly get what he wanted given Russia’s leverage over a number of commodities, and it looks like I’ll be wrong in that regard. Even Switzerland’s not neutral!
That said there’s the potential for things to get a lot worse. The price of wheat jumped by like 30% yesterday–last time food costs went up like that was a decade ago and that’s when the middle east got tumultuous all of a sudden. Newcastle coal jumped by about 50% yesterday as well. Euro natural gas stocks were already low heading into this, and thankfully winter’s almost over but they could get awfully chilly next winter. And of course, everybody knows what’s happening with oil. George, I know you and I and most of the commenters here can handle paying more for gas, but it’s a different story for poor people. Some people fill up $5 at a time because that’s all they have. And inflation was already bad going into this, AND we have elections in November. And covid’s chilled out for now but another bad strain remains possible.
All of which is to say, it’s going to be an interesting year, and probably not the good kind of interesting. Hopefully I’m wrong about that too.
It will be rough…if it lasts that long.
Anyway, no bitching…just look at what the Ukrainians are going through. Central banks and governments will help if we get there. We crossed a threshold here, Putin went over the line.
Thanks for the good links!
The SWIFT action is indeed remarkable as is the German changes on military / energy policy.
It is but it has been used before and certainly talked about. The Central Bank action is UNREAL!
TBB operatives are on the ground in Belarus and working on a peace deal to save us all…
Lightness follows darkness.
Putin will capitulate in one way or another. Hopefully, hanged by his balls…out of power soon…what they are facing will bring them to their knees, it is a matter of…days.
Of course I could be all wrong here!
Do not forget how cruel Trump was on Zelensky and how he thinks of Putin as a genius….LOLOLOL.
Anyway, pray for peace!
I have no idea what’s going to happen, as I think a pretty wide range of outcomes are still possible. I don’t even know if we know how the war is going what with the fog of war, propaganda, and all that. fwiw here’s the thinking from the other side, summarized by some guy reading through what pro-war Russian intellectuals are saying:
https://twitter.com/y_akopov/status/1498923100653633536
“The war is expected to be over in days, or weeks at most. The main bulk of Ukrainian forces in the East is going to be encircled soon, and the main cities are already under siege. The losses are admitted to be “higher than expected”, but it changes nothing. The possibility of resistance after the active phase of war is dismissed, they are confident that after there is a change of power and Ukrainian activists are purged by military police, most people in Ukraine will come to their senses and accept the new reality.
The war is existential in a way that it is supposed to destroy the Ukrainian identity. The desired outcome seems to be not friendly Ukraine with a new government, but at least partial annexation with Ukrainian culture suppressed. There is no talk of a nuclear or further wars yet in these circles. This so far can only be found (albeit quite easily) in ‘normie’ accounts. Europe arming Ukraine is seen like a futile exercise (too little too late) rather than casus belli.
Sanctions. They are widely considered to be survivable thanks to preparations made since 2014, and the most severe ones are expected to be lifted soon after when Ukraine is defeated. Russian billionaires forced to move to Russia with their money is considered to be great. Autarky is believed to be good. The focus is mostly on tech with explanations how Yandex can provide everything Russia needs. Imports from China are expected to cover all reasonable needs in goods, and domestic manufacturing is expected to boom. Overall, complete dehumanisation of Ukraine, dismissal rather than aggressive challenging of the West (yesterday’s hegemon) and the start of a Russian golden era.”
We don’t know what will eventually happen…Imho, these guys are smoking some strong weed.
In support of the “smoking weed” view: interesting thread talking about how Russia totally misjudged what kind of operation they were getting themselves into. This guy thinks Russia will collapse quickly.
https://twitter.com/kamilkazani/status/1499377671855292423
That convoy is stuck….and it may be because of tires, here is a tire expert:
https://twitter.com/TrentTelenko/status/1499164245250002944
Wow, thanks for the links Buzz, lots to digest.
Funny you say Putin went over the line this time, he’s been over the line too many times. Comforting to see the “west” finally confronting this megalomaniac, and hopefully this puts the final nails in his coffin.
I’m not fond of being pessimistic, but current events are devastating on a global scale. We will all feel the effects of Putin’s petulance. I feel the only way to handle the climate crisis would be to have a sustained worldwide peace.
Nah….that would be too hard on the economy…
Would love to see a world conference to solve EVERY border dispute, every single one. Yeah…right.
If the reports of firefights inside the biggest nuclear plant are correct…I think we may be reaching that moment of…the unimaginable happening.
Pray for us all!
And everybody wants to join the EU now……. except Great Britain (NI is part of the EU custom union). I don’t think I’ve ever seen such a rapid shift in geopolitics since the fall of the iron curtain. Where is David Hasselhoff when you need him?
This is one of the BEST blog entries I have ever read.
As we say…sometimes the truth hurts!
Thank you.
We are witnessing history unfolding in dizzying speed…It is obvious now that Putin is doubling down because he can not afford to “lose”. Never mind that this sob managed to:
-Reunite the Ukrainians like NEVER ever before and make them international darlings
-Universally make Russia hated
-Close its stock market
-Have international companies abandon the country in a week
-Capital controls
-Closed the borders and airspace
-Unite the super slow Europeans (WOW!)
-Get Germany to change decades old policies (WOW2)
-Crashed its own currency
-Checkmate on its own central bank (WOW to infinity)
-Ban all Russian national and team competitions (bye bye World Cup!)
-Kill so many innocent civilians
-Kill so many Russian soldiers
-Commit atrocities that will make Ukraine an unfriendly country for generations
I mean…He is cornered, he is doubling down, it will likely get worse before it gets better…I still thing the economic punishment that has been unleashed will crack him before he cracks us all. This is why it is important for all of us to stop bitching and think of the Ukrainians and do our best to help them because nothing compares what they are going through, NOTHING!
I am surprise many pension funds had invested a lot in Russia. Aren’t there risk assessments or ethical guidelines to minimize this?
“State of Kentucky’s Teachers Retirement System was the second-largest shareholder for Sberbank of Russia (The largest bank in Russia).
Their position dropped 95% in value from $13MM to $778K”
Who is buying all these assets at firesale prices? What happens if there is a peace deal very soon?
Best way to handle situations like this is…a diversified portfolio and lots of cash set aside for…situations like this 🙂
This is probably the best read in the markets, I need to add it to the Personal Finance Recommendations.
https://newsletterhunt.com/newsletters/money-stuff-by-matt-levine
Nice. I was thinking about buying lukoil stock and just let it collect dust for 5+ years. But there’s no market to trade.
I fear one of Ukraine’s cities will be the next Aleppo. 1M have left Ukraine.1/2M in Poland alone.
A reminder that stock markets don’t always go up. HSI is flat since 2007! 50000 tested positive for Covid in HK. And 100 new cases in Shenzhen. I have no idea how CN will respond, but I suspect it will further add to supply chain disruptions.
I’m sure $13MM is a drop in the bucket relative to total AUM. They would have been Russia to begin with *because* of risk management / diversification.
My thinking has shifted based on the developments and I now think Ukraine will win this war! This is what I responded to someone on Twitter saying with such a long convoy coming to Kyiv is only a matter of time…
“Everyone thinks time is on the Russian side.I disagree. In a week or two max, this hapless totally overrated,way overstretched & hideously mismanaged corrupt Russian army will collapse & surrender if Putin does not agree to a face saving deal he will sell as bigly win to Russians.”
I am no expert!