Short Taiwan?

[Viking]

1 hour ago, patience_and_focus said:

 

I would absolutely not short China. Very superficially the risks look similar - both big countries, with dictator, appetite for territorial conquest / grab, nostalgia as a historic power and belief of recent wrongs, etc etc. But Russia is weak - it only has warheads. China is very different.

 

Lets go through a simple thought experiment: China tries to grab Taiwan (maybe by full force, may be by encirclement, etc). How will western nations respond?

 

(a) Likelihood of western nations going in after China with their warships, soldiers, planes etc is close to zero

 

(b) West goes for economic nuclear war (like what it is doing to Russia). China responds in kind by cutting off precious metals for semis, stopping supply chain in and around entire south east asia, take their increasing influence and ownership of resources in Africa/South America to choke off resource supplies to the west, launches cyberwarfare  to cripple western modern economy working on internet, etc etc. This is mutually assured economic destruction.

 

(c) China is the biggest trading partner for not just a majority of western nations, but to most nations in the world. It produces almost everything that the world needs. It pays to do that. Most countries will not come to join the western alliance (even some western countries may balk). The supply limitations to even UK troops for simple things like toilet paper, etc vs US troops during world war II is well documented. US was and became preeminent manufacturing hub just before and during the WWII. Now China calls the shots. Not that US cannot do manufacturing anymore but its not a turn key solution and any conflict will be very painful in short to medium term. By the time things adjust, the (economic) war may be over. 

 

To me this most likely looks like beginning of (Economic) Cold War with China where neither side is able to push the red nuclear button for a foreseeable future.

The immediate  risk for China is they are essentially bankrolling Russia’s invasion of Ukraine from this point forward. If its obvious to me i think others can also figure it out. The ‘no limits’ pact signed a couple of short weeks ago when they KNEW Russia was planning on invading Ukraine, a sovereign country, is instructive. Its useful for investors to look at what companies, and countries in this case, actually do - and pay less attention to what they say.
 

If things get worse in Ukraine in terms of Russian tactics (likely) and it becomes a genocide (it is well past the human catastrophe description) then China’s policy will become untenable. ‘No limits’ pact will become increasingly untenable for China the longer the war continues and genocide becomes how it is viewed in the West.
 

There is a very real chance China will become toxic. And as we have learned with Russia, when the mob (Western governments) pivot it can be quick and violent. War is NOT a Disney movie. Investors in anything Russia did not get taken out behind the woodshed - they got decapitated. HISTORY PROVIDED NO GUIDE. And thats because the sample size for ‘big European war’ is too small (and we haven’t had one for 75 years). And don’t kid yourself, this is a big European war. 
 

The Ukraine war is likely just getting started. And everyone is watching it via social media. The ultimate reality show with an old school, brutal Russian dictator writing the script. (Who clearly has no concern for loss of life.) WHAT COULD POSSIBLY GO WRONG? Remember… that ‘no limits’ thing as this situation deteriorates…
 

Investors in Chinese assets (and US companies with big operations in China) are at risk if China continues with its policy of not only supporting but enabling Russia’s war machine. This is no longer a low probability tail risk.

 

The problems with wars, especially big ones, is once they start it is IMPOSSIBLE TO PREDICT where they will go next. Big wars usually start out as small wars that… well… get out of control… Not saying that is GOING TO HAPPEN. But the tail risks are rising daily…

Edited March 3, 2022 by Viking

[Spekulatius]

Yes, I would be careful with any Chinese entity that tries to play both sides and deals with the Russians. If they get caught breaking the embargo, then they are on the blacklist too and will get the Huawei treatment. They got to decide if it is worth serving the tiny Russian market or do business with the west.

 

The Chinese government can say whatever they want, but have no influence here. I think that's one reason why are going some hero to zero stocks in China as well in the very near term future.

Edited March 3, 2022 by Spekulatius

[Peregrine]

1 hour ago, Spekulatius said:

I think you are very wrong with your assessment, but leave it at that. It is impossible to know right now and hopefully we will never find out.

 

I do think the US equities will beat Chinese equities going forward in the long run (>5 years).

 

You seem to be very confident in saying "very wrong with your assessment" while at the same time saying "it is impossible to know right now".

[maplevalue]

You raise very good points about why investing in an authoritarian country like China differs from a more free-market one like the US. With that being said China trades 11.5x forward PE vs US at 19x, partly as a result of sentiment being absolutely terrible towards EM right now. My feeling would be valuation + China easing COVID zero policies + Chinese monetary easing provides a decent setup for Chinese stocks right now.

[Spekulatius]

20 minutes ago, maplevalue said:

You raise very good points about why investing in an authoritarian country like China differs from a more free-market one like the US. With that being said China trades 11.5x forward PE vs US at 19x, partly as a result of sentiment being absolutely terrible towards EM right now. My feeling would be valuation + China easing COVID zero policies + Chinese monetary easing provides a decent setup for Chinese stocks right now.

Yes, China would unlock tremendous value if they were to democratize. Just a few years ago, it very much seemed like it would happen, but now they have been walking backwards and I think the equity valuations reflect this.

As for monetary policy keep in mind that with the Yuan pegged to the USD, their monetary policy is tied to US monetary policy. If they want to go on their own, they would need to let go of the currency peg.

Edited March 3, 2022 by Spekulatius

[patience_and_focus]

12 minutes ago, Spekulatius said:

Yes, I would be careful with any Chinese entity that tries to play both sides and deals with the Russians. If they get caught breaking the embargo, then they are on the blacklist too and will get the Huawei treatment. They got to decide if it is worth serving the tiny Russian market or do business with the west.

 

The Chinese government can say whatever they want, but have no influence here. I think that's one reason why are going some hero to zero stocks in China as well in the very near term future.

 

 

1 hour ago, Viking said:

Investors in Chinese assets (and US companies with big operations in China) are at risk if China continues with its policy of not only supporting but enabling Russia’s war machine. This is no longer a low probability scenario.

 

I didn't say anything about buying specific chinese stocks or ETFs.  I just recommended not to short them. One does not imply the other.

[Spekulatius]

2 hours ago, Peregrine said:

 

You seem to be very confident in saying "very wrong with your assessment" while at the same time saying "it is impossible to know right now".

Fair, my comment was related to the following claim:

(a) Likelihood of western nations going in after China with their warships, soldiers, planes etc is close to zero

 

I believer believe the US will absolutely fight for their own interests, The chips that Taiwan are supplying are essay, as is Taiwan from a geostrategic POV. It was @wabuffo who countered this argument.

[zippy1]

I think this point may not have been brought up here.  That is about the relative trade volume of US-China and US-Taiwan.   

In 2020, out of the top 10 Chinese exporters, 6 are Chinese subsidiaries set up by Taiwanese companies.  (link https://beyondnews852.com/20211108/95882/) 

These are companies assemble your notebooks, mobile phones and so on.  But the components(ICs) often come from outside of China from places Taiwan, South Korea and US.  Their customers are demanding these Taiwanese companies to shift production bases to places with less geopolitical risks. They have to listen to their customers.   They are gradually moving to South East Asia and India.

The US-Taiwan trade volume looks small since Taiwan makes chips primarily, that got shipped to China to build phones, notebooks and so on.  

[Gregmal]

We can’t secure our borders because it’s racist, or make NYC safe again with stop and frisk but holy shit look at North America and Western Europe go! Blanket discrimination against anything and anyone Russian and certainly throwing in those evil Chinese too is fair game. Woke is a joke. Basically just a dumb political colors game that can be traced to the amount of votes available. I’ve heard more blatant bigotry the past few weeks from MSM and the twitterers than I would have probably anywhere else on earth. Individuals being targeted simply for being Russian, forced to give up assets, entire teams banned. Then these are the same people who want to talk about inclusivity and equality. Fuck them.

[ValueArb]

On 2/25/2022 at 5:58 PM, Castanza said:

China has 2.8m troops (double the US), warships cyber capability, missiles, modern infantry equipment etc. Plus they have public sentiment (at least seems that way). 

 

Taiwan has 88,000 active troops….sorry but idc what type of missile defense system you have or what geographic system you have. You’re not going to outlast China. Amphibious landing is not the only way into Taiwan. 

If China wanted to push in Taiwan they absolutely could. Why would the US get involved? It has a lot to lose by standing up to China. Frankly we’ve done it to ourselves by exporting manufacturing for almost every industry. US has zero leverage.
 

I agree though, there is no way to play this. Intel seems like the obvious answer. 
 

 

 

Taiwan has 170,000 active troops, over 1M young men and women fit for service and in an emergency could arm 5 to 10 million more out of their 25M population.

 

Amphibious landings are hell and are the only way into Taiwan (unless you prefer suicidal air-drops against a robust air defense system and mass of MANPADs), across 100 miles of ocean where they have to traverse under hours of anti-ship missile attacks. Okinawa is one twelfth the size of Taiwan and it cost 80,000 casualties to defeat 110,000 Japanese troops that had zero naval support, zero air support and zero resupply.

 

China would be looking at 1M casualties minimum to invade Taiwan, and hundreds of thousands more during a multiyear insurgency. And for what? TSMC and anything else of value will be rendered useless by demolition charges, while the engineers flee the island. And there is no way China would be buying replacement equipment from the Dutch, their sanctions would be nearly as tough as Russia is getting right now.

 

Taiwan hasn't been a threat to China since before the 70s, it's nothing more than an irritant now. They have almost no incentive to sacrifice a third of their active troops just to make a political point.

Edited March 4, 2022 by ValueArb

[ValueArb]

4 hours ago, maplevalue said:

You raise very good points about why investing in an authoritarian country like China differs from a more free-market one like the US. With that being said China trades 11.5x forward PE vs US at 19x, partly as a result of sentiment being absolutely terrible towards EM right now. My feeling would be valuation + China easing COVID zero policies + Chinese monetary easing provides a decent setup for Chinese stocks right now.

 

Russia just proved the old saying true. There is no such thing as a "forward PE".

[ValueArb]

5 hours ago, Viking said:

The immediate  risk for China is they are essentially bankrolling Russia’s invasion of Ukraine from this point forward. If its obvious to me i think others can also figure it out. The ‘no limits’ pact signed a couple of short weeks ago when they KNEW Russia was planning on invading Ukraine, a sovereign country, is instructive. Its useful for investors to look at what companies, and countries in this case, actually do - and pay less attention to what they say.
 

If things get worse in Ukraine in terms of Russian tactics (likely) and it becomes a genocide (it is well past the human catastrophe description) then China’s policy will become untenable. ‘No limits’ pact will become increasingly untenable for China the longer the war continues and genocide becomes how it is viewed in the West.
 

There is a very real chance China will become toxic. And as we have learned with Russia, when the mob (Western governments) pivot it can be quick and violent. War is NOT a Disney movie. Investors in anything Russia did not get taken out behind the woodshed - they got decapitated. HISTORY PROVIDED NO GUIDE. And thats because the sample size for ‘big European war’ is too small (and we haven’t had one for 75 years). And don’t kid yourself, this is a big European war. 
 

The Ukraine war is likely just getting started. And everyone is watching it via social media. The ultimate reality show with an old school, brutal Russian dictator writing the script. (Who clearly has no concern for loss of life.) WHAT COULD POSSIBLY GO WRONG? Remember… that ‘no limits’ thing as this situation deteriorates…
 

Investors in Chinese assets (and US companies with big operations in China) are at risk if China continues with its policy of not only supporting but enabling Russia’s war machine. This is no longer a low probability tail risk.

 

The problems with wars, especially big ones, is once they start it is IMPOSSIBLE TO PREDICT where they will go next. Big wars usually start out as small wars that… well… get out of control… Not saying that is GOING TO HAPPEN. But the tail risks are rising daily…

 

China isn't funding any part of Putin's war. They are taking advantage of his failure to pickup oil at half price. And by all accounts they never thought he'd actually invade.

 

The Ukraine is a Putin solo project, with small conributions from border countries he controls (Chechen and Belarus)

[ValueArb]

On 2/28/2022 at 8:52 AM, Spekulatius said:

@Xerxes I think he is right in terms of the Russian tactics. The Russian want to avoid too much collateral damage and they are likely trying to avoid major combat as well as going into heavy urban areas (which likely leads to heavy fighting and losses, both of their own as well as civilian). Urban combat also negates superiority in materials and technology, so as he stated, the Russian encircle cities and go around them.

 

I also think that there is no doubt the russian are winning this war.

 

However, then he rants about the Zelensky regime. I don't know much about the election process, but his claim is that Zelensky is illegitimate. and that's the first time I hear this. I think this guy is likely a Russian propaganda shill.

 

It is pretty clear that there is a propaganda war fought on both sides on social media. You see stuff like the "Ghost of Kiev" fighter ace from the Ukrainian side, allegedly shooting down several Russian air planes.  This is most likely made up. 

 

I think this Red pill guy is just another case of Russian disinformation on social media.

 

These takes are aging badly. Where the russians have made progress is entirely in the south, where they are poised to linkup Crimea with a landbridge. But the long term trends are not in their favor. They've blown almost their entire inventory of precision weapons and long range missiles, they fired hundreds of Kalibers the first nights and have only fired a few the last few nights. They have been unable to establish air superiority over a massively outmanned Ukraine Air Force, and continue to lose helicopters and jets, with little signs they can replace them.

 

The russians are failing to encircle cities, their troops are getting trapped deep in the Ukraine without resupply. They sent in a 40 mile convoy to resupply the troops outside Kyiv at the beginning of the week, and the resupply convoy is stuck and getting shredded. They have turned to bombing civilian targets in the cities with dumb bombs to maximize terror and damage.

 

Their entire logistics are unable to support the operation, in part because of endemic corruption. There is a great twitter thread on their truck tires, cheap Chinese knockoffs of quality Michelin military tires that are falling apart just days in. It's clear from the tire failures that the Russian maintenance groups did not do the monthly repositioning and retesting of the truck tires that's mandatory to keep them from having the sun destroy their flexibility and durability.

 

Their troops are hungry, cold and low on ammo, and their armor is slowly being attritted by Javelins and MLAWS, and their troops by ambushes and snipers. In some cases they abandoning even their best equipment and latest tanks to try to walk out. There is no way 150,000 troops can hold a country of 45M people, they have probably lost close to 10,000 troops already and will lose thousands more a week as long as they stay.

 

Their entire plan was to sweep into Kyiv and appoint a puppet government while the population either welcomed them as liberators or placidly allowed it. Instead they got Vietnam times 100.

[Peregrine]

25 minutes ago, ValueArb said:

 

These takes are aging badly. Where the russians have made progress is entirely in the south, where they are poised to linkup Crimea with a landbridge. But the long term trends are not in their favor. They've blown almost their entire inventory of precision weapons and long range missiles, they fired hundreds of Kalibers the first nights and have only fired a few the last few nights. They have been unable to establish air superiority over a massively outmanned Ukraine Air Force, and continue to lose helicopters and jets, with little signs they can replace them.

 

The russians are failing to encircle cities, their troops are getting trapped deep in the Ukraine without resupply. They sent in a 40 mile convoy to resupply the troops outside Kyiv at the beginning of the week, and the resupply convoy is stuck and getting shredded. They have turned to bombing civilian targets in the cities with dumb bombs to maximize terror and damage.

 

Their entire logistics are unable to support the operation, in part because of endemic corruption. There is a great twitter thread on their truck tires, cheap Chinese knockoffs of quality Michelin military tires that are falling apart just days in. It's clear from the tire failures that the Russian maintenance groups did not do the monthly repositioning and retesting of the truck tires that's mandatory to keep them from having the sun destroy their flexibility and durability.

 

Their troops are hungry, cold and low on ammo, and their armor is slowly being attritted by Javelins and MLAWS, and their troops by ambushes and snipers. In some cases they abandoning even their best equipment and latest tanks to try to walk out. There is no way 150,000 troops can hold a country of 45M people, they have probably lost close to 10,000 troops already and will lose thousands more a week as long as they stay.

 

Their entire plan was to sweep into Kyiv and appoint a puppet government while the population either welcomed them as liberators or placidly allowed it. Instead they got Vietnam times 100.

 

Can you send a link corroborating this?

 

If this is indeed the case, I hope that this leads to peace negotiations soon.

[ValueArb]

This guy tracks losses from both sides, supposedly verified with photographs.

 

https://twitter.com/oryxspioenkop

 

[ValueArb]

This is one of Russia's newest and most expensive battle tanks, abandoned by road.

 

https://twitter.com/Osinttechnical/status/1499436624270311429?s=20&t=5jBrC4LS9kEA3RrIZDaCIw

 

[ValueArb]

Russian SAMs abandoned in Ukraine potentially leaked their codes so Ukrainians can reuse them and listen into Russian traffic.

 

https://twitter.com/TrentTelenko/status/1499491499360362501/photo/1

[ValueArb]

How cheap Chinese tires and poor maintenance are part of the reason Russian advances have stalled.

 

https://theweek.com/russo-ukrainian-war/1010857/how-cheap-chinese-tires-might-explain-russias-stalled-40-mile-long

Edited March 4, 2022 by ValueArb

[Viking]

43 minutes ago, ValueArb said:

 

China isn't funding any part of Putin's war. They are taking advantage of his failure to pickup oil at half price. And by all accounts they never thought he'd actually invade.

 

The Ukraine is a Putin solo project, with small conributions from border countries he controls (Chechen and Belarus)

I am not suggesting China is funding the Russian war directly. The West is applying sanctions to cripple the Russian economy. Which will hopefully push Russia to stop their war in Ukraine. If China now dramatically increases purchases from Russia (which i suspect they will) then this will neuter what the West is trying to accomplish. The Russian economy will continue to chug along. And this will provide Putin with the new $ he will need to continue to wage war; wars are expensive, especially long wars. If this is how things play out then i think it is fair to say that China is indirectly funding the Russian war in Ukraine.

[Gregmal]

China as usual is just being smart/opportunistic as dumb ass western countries and companies dump the assets they need most for little reason other than virtue signaling. If you want to make a point to your enemy, you don’t throw them Berkshire Hathaway or Exxon shares are 30% fair market value. Chinas just doing the obvious no brainer move and taking advantage of

this. 

[mcliu]

The problem with following the war on Twitter is that you only get one side's perspective and end up with the impression that Ukrainian troops are ready to roll through Moscow.

 

I think these sources/summaries provide a better but still murky picture of the situation:

https://www.understandingwar.org/backgrounder/russian-offensive-campaign-assessment-march-3

 

While Russian military has not been as effective as expected and has met some supply and strategic/intelligence issues. The overall picture shows that they're pushing effectively into Ukraine, especially along the southern axis. Ukrainian resistance has outperformed expectations using advanced NATO weapons & training, but keep in mind it's only been 7 days in a country of 40+ million with 1.5x size of Iraq. US+allied forces took over a month to conquer Iraq with a far superior force.

 

 

 

 

[ValueArb]

51 minutes ago, Viking said:

I am not suggesting China is funding the Russian war directly. The West is applying sanctions to cripple the Russian economy. Which will hopefully push Russia to stop their war in Ukraine. If China now dramatically increases purchases from Russia (which i suspect they will) then this will neuter what the West is trying to accomplish. The Russian economy will continue to chug along. And this will provide Putin with the new $ he will need to continue to wage war; wars are expensive, especially long wars. If this is how things play out then i think it is fair to say that China is indirectly funding the Russian war in Ukraine.

 

The already small Russian economy has probably lost one third of its production capacity due to sanctions. That's a massive loss, the war material Putin is expending now took many years to fund, it will probably take at least a decade to be restored. Before the war and sanctions, they couldn't even build their new Armata tank in any volume, they might only have a handful at the moment. They couldn't build their new fighter, the SU-57, they either only have 3 units or maybe a dozen but aren't risking them in the Ukraine or in combat to protect their foreign sales potential. Now with sanctions they probably won't even be able to build another Armata or SU-57, as they likely rely on some foreign components/materials the Russians are ill prepared to produce. 

 

Energy was roughly a third of the Russian economy. China isn't going to pay market prices for oil, and the key pipelines run to Europe. All the western oil companies have announced they are pulling out, which means Russian energy production is going to lose a massive amount of needed investment and expertise. And they won't be able to buy Western drilling equipment and tools Their energy production is going to fall substantially, oil fields naturally deplete but deplete far faster when you aren't using advanced tooling and expertise to manage them. So not only are they going to make a lot less for the oil they export, they won't be able to produce as much oil to export but worse they have to meet internal demand first so that means they may have far less to export.

 

Their space launches relay on German production of essential fuel components. But that doesn't really matter because they've lost every potential customer. Previously Roscosmos was in heavy decline due to theft by it's management, had immenese safety issues and had lost most of it's commercial sales to SpaceX. It's over for the Russian space industry.

 

Most of their commerical airlines won't be flying in three weeks. The vast majority of their fleet is Boeing/Airbus which will no longer supply parts and Russian carry limited equipment stock. Three weeks is the estimate until they have to start grounding most of their fleets.

 

They will have to rework their supply chains for almost every single good, and in many cases they won't be able to. They certainly won't be getting wheat from the Ukraine. People in Russia will be reliving Soviet Era Russia where stores were mostly empty all the time.

 

And the Ukrainians are giving every captured Russian soldier a phone to call home with, so Putin can't maintain the fiction of a Russian victory for long. As tens of thousands of Russian soldiers die, and hundreds of thousands are wounded or captured, the demonstrations are going to grow. I literally don't know how Putin survives till the end of the year. 

 

 

Edited March 4, 2022 by ValueArb

[Viking]

16 minutes ago, ValueArb said:

 

The already small Russian economy has probably lost one third of its production capacity due to sanctions. That's a massive loss, the war material Putin is expending now took many years to fund, it will probably take at least a decade to be restored. Before the war and sanctions, they couldn't even build their new Armata tank in any volume, they might only have a handful at the moment. They couldn't build their new fighter, the SU-57, they either only have 3 units or maybe a dozen but aren't risking them in the Ukraine or in combat to protect their foreign sales potential. Now with sanctions they probably won't even be able to build another Armata or SU-57, as they likely rely on some foreign components/materials the Russians are ill prepared to produce. 

 

Energy was roughly a third of the Russian economy. China isn't going to pay market prices for oil, and the key pipelines run to Europe. All the western oil companies have announced they are pulling out, which means Russian energy production is going to lose a massive amount of needed investment and expertise. And they won't be able to buy Western drilling equipment and tools Their energy production is going to fall substantially, oil fields naturally deplete but deplete far faster when you aren't using advanced tooling and expertise to manage them. So not only are they going to make a lot less for the oil they export, they won't be able to produce as much oil to export but worse they have to meet internal demand first so that means they may have far less to export.

 

Their space launches relay on German production of essential fuel components. But that doesn't really matter because they've lost every potential customer. Previously Roscosmos was in heavy decline due to theft by it's management, had immenese safety issues and had lost most of it's commercial sales to SpaceX. It's over for the Russian space industry.

 

They will have to rework their supply chains for almost every single good, and in many cases they won't be able to. They certainly won't be getting wheat from the Ukraine. People in Russia will be reliving Soviet Era Russia where stores were mostly empty all the time.

 

And the Ukrainians are giving every captured Russian soldier a phone to call home with, so Putin can't maintain the fiction of a Russian victory for long. As tens of thousands of Russian soldiers die, and hundreds of thousands are wounded or captured, the demonstrations are going to grow. I literally don't know how Putin survives till the end of the year. 

 

Most of their commerical airlines won't be flying in three weeks. The vast majjority of thier

@ValueArb Thank you for taking the time to post and providing all the links. I have lots to learn and posts like yours help lots.

Edited March 4, 2022 by Viking

[ValueArb]

2 minutes ago, mcliu said:

The problem with following the war on Twitter is that you only get one side's perspective and end up with the impression that Ukrainian troops are ready to roll through Moscow.

 

I think these sources/summaries provide a better but still murky picture of the situation:

https://www.understandingwar.org/backgrounder/russian-offensive-campaign-assessment-march-3

 

While Russian military has not been as effective as expected and has met some supply and strategic/intelligence issues. The overall picture shows that they're pushing effectively into Ukraine, especially along the southern axis. Ukrainian resistance has outperformed expectations using advanced NATO weapons & training, but keep in mind it's only been 7 days in a country of 40+ million with 1.5x size of Iraq. US+allied forces took over a month to conquer Iraq with a far superior force.

 

 

 

 

 

On the surface their progress doesn't look so bad. But it is actually disastrous.

 

In Iraq, we invade a country with half the population where a substantial portion of it hated Saddam, and against a military larger and better equipped than the Ukrainians. We had to have incredible logistics because we were fighting halfway around the world, and took a very safe and deliberate path, starting with shock and awe to wipe out Iraqi air defenses. There was no plan to take Iraq in days, but one rooted in excellent logistics to surround areas of key resistance before cleaering and rely on local support.

 

Russia planned for most Ukrainian people to welcome it because Putin's inner circle was delusional, and planned for a blitzkrieg to take Kyiv and install a puppet regime in two days. Clearly that failed. But the mark of how poorly they understood their opponents is Kharkiv. It's majority Russian speaking and the most heavily Russian city in the Ukraine and only 26 miles from the border, yet it's still free and fighting vigorously a week after the invasion.  They flew in paratroopers (their elite troops) into Kyiv airports thinking they could easily capture them and fly in massive amounts of troops to take the city center but they got massacred. So what did the Russian leadership do? They did it again and again and failed every time with massive losses to their most irreplaceble troops.

 

So now they've been forced to send the regular army down roads in the middle of the muddy season in the Ukraine. Their armored vehicles that get off road are abandoned stuck in the mud. They don't have the logistics to supply them so many are abandoned after running out of gas.  Troops are hungry (many videos of them ransacking stores for food). They don't have absolute air supremecy so the remainder are getting hit from the air. They can't establish large safe perimeters off the roads so they are getting hit with Javelins and MLAWs. When any tanks get separated from infantry in urban areas its a death sentence, even civilians can kill a tank with a roll of wire, a couple rifles and some moltov cocktails.

 

Besides the trucks out of service because of terrible service, there is also many photos of dud Russian rockets and grenades. Most of their troops are using old equipment that is failing at a high rate either because of poor maintenance or outright theft by Putin's henchman.

 

The Russian command has compensated by sending in more and more fresh meat. Estimates are they have already committed 90% of their forces, they have no reserves. The big resupply column got stuck before it could get to Kyiv and it's getting pounded, the forces attempting to surround Kyiv are in danger of being surrounded themselves.

 

In the south things are going better, but note that that's the dry part of the Ukraine and its also the flat part. The rest of the Ukraine is wilder and rougher, and filled with angry partisans carrying AK47s, Stinger Missiles and Javelin tank killers. And more is pouring in from the border. The Ukrainians appear to getting resupplied with more ammunition and more and better handheld anti-armor and anti-air missiles than the Russians have or can get to their troops. The Russians are running out of everything, but especially trucks.

[ValueArb]

43 minutes ago, Gregmal said:

China as usual is just being smart/opportunistic as dumb ass western countries and companies dump the assets they need most for little reason other than virtue signaling. If you want to make a point to your enemy, you don’t throw them Berkshire Hathaway or Exxon shares are 30% fair market value. Chinas just doing the obvious no brainer move and taking advantage of

this. 

 

Hundred percent agree. I think the CCP leadership is living rich, fat and happy off the sweat of the Chinese people, the last thing they want to get involved in is a war, not in Taiwan and especially not in Europe.  But they'll happily stick it to the US and the West any chance they get, and take advantage of every opening.

 

Of course I admit I can be wrong about any of the things I posted. Putin was probably the wealthiest man in the world and his position was very secure despite the poor Russian economy and the massive theft by him and his henchmen. And he may have thrown all of that away on an un-winnable quagmire that he never needed. Predicting the outcome of a war or another persons decision-making is even harder than making macro calls in investing.