Russia-Ukrainian War

[Xerxes]

Those tensions have been there forever, but now more highlighted by Western media. 
 

on a different note, this could be very interesting. From the producer of Crown. 
 

[Ulti]

https://www.spectator.co.uk/article/sanctions-are-working--whatever-putin-says
 

excellent article on what’s going on with the Russian economy 

[Xerxes]

First time i see an article from the Western media that is so appropritly titled. The lingering collapse of the Soviet Union with its half a dozen frozen and not to frozen conflict. Well done Bloomberg.

 

"Yet empires don’t die quickly: Their collapse, historian Serhii Plokhy wrote, is a “process rather than an event.” When a vast entity once held together by the iron discipline of the metropole gives way, don’t expect a new, stable status quo overnight."

 

Russia's War in Ukraine Is How the Soviet Union Finally Ends - Bloomberg

Edited August 18, 2022 by Xerxes

[Xerxes]

Great read:

 

Vladimir Putin is in thrall to a distinctive brand of Russian fascism | The Economist

[Xerxes]

Game of Thrones :  Warsaw, Moscow, Constantinople, Kiev and Crimea. 
 

Same locations as today but several hundred years ago. 

 

Edited August 19, 2022 by Xerxes

[Eng12345]

Russia to Halt Nord Stream Gas Flows to Europe, Citing Pipeline Maintenance - WSJ

 

Didn't see this posted...again seems like more posturing on the energy front by Russia. 

[Spekulatius]

1 hour ago, Eng12345 said:

Russia to Halt Nord Stream Gas Flows to Europe, Citing Pipeline Maintenance - WSJ

 

Didn't see this posted...again seems like more posturing on the energy front by Russia. 

Well, Gazprom reduced the flow to 20% anyways a few weeks ago, so I don’t think that reducing it to zero matters all that much.

I mentioned already that Germany’s storage is 75% full ahead of time and Poland for example is almost filled up.

There is a lot of doom porn going on about next winter in Europe, but the data suggests that Europe should be OK. Be t year, the jig is up on Russian NG and the gas will be stranded , so no more Euros in Putins Pocket for that until 2027 at earliest, if he is able to build new pipes for new to China etc.

 

 

Edited August 20, 2022 by Spekulatius

[changegonnacome]

1 hour ago, Spekulatius said:

There is a lot of doom porn going on about next winter in Europe

 

Agree reading some articles one would swear we are not talking about a region thats one of the wealthiest on earth.......I'm not saying there isn't going to problems and some hardship......but European countries (aided by the ECB bond buying program) have the wealth, capability and fiscal/monetary tools to support their at risk citizens through subvention of households energy budgets......that same wealth/purchasing power will see to it that Europe can/will and is 'paying up' to secure alternative energy sources.

 

If at the end of Nord Stream was I dunno a country like an artic El Salvador then the doom porn would be warranted….but it’s like Germany ffs…not easy they could live without the extra strain on fiscal budgets but it’s manageable.

Edited August 20, 2022 by changegonnacome

[no_free_lunch]

On 8/20/2022 at 1:22 PM, changegonnacome said:

 

Agree reading some articles one would swear we are not talking about a region thats one of the wealthiest on earth.......I'm not saying there isn't going to problems and some hardship......but European countries (aided by the ECB bond buying program) have the wealth, capability and fiscal/monetary tools to support their at risk citizens through subvention of households energy budgets......that same wealth/purchasing power will see to it that Europe can/will and is 'paying up' to secure alternative energy sources.

 

If at the end of Nord Stream was I dunno a country like an artic El Salvador then the doom porn would be warranted….but it’s like Germany ffs…not easy they could live without the extra strain on fiscal budgets but it’s manageable.

 

It's just not their citizens, how are the business going to continue to function.  Sure some software business will be fine but doesn't germany manufacture a bunch of products and isn't energy a large component.  It seems this is going to ratio their businesses.

Edited August 23, 2022 by no_free_lunch

[changegonnacome]

9 hours ago, no_free_lunch said:

but doesn't germany manufacture a bunch of products and isn't energy a large component.  It seems this is going to ratio their businesses.

 

Same concept......listen lets distinguish between two things (1) Energy costs go through the roof (2) Energy shortage/not available/ rolling blackouts/factories shuttered etc.

 

If its just (1) its a pain but Germany can subsidize both citizens and strategic industries and nurse them through the period........(2) is clearly much more serious but its unclear to me if that scenario is going to come to pass in a meaningful way.....lots of Euros currently buying global gas/diesel and alternative energy from the four corners of the earth and moving it to Europe right now.....as I said, broadly speaking if you have the money (& Europe/Germany has the money) you can pay up to secure substitute energy supply.

 

I am not saying this is nothing burger.....better it wasnt happening......but this is one of the scenarios where being a wealthy trading block that money can solve alot of problems

[Spekulatius]

Very significant talk from Olaf Scholz today:

https://www.reuters.com/world/europe/germanys-scholz-we-will-keep-up-support-ukraine-long-it-takes-2022-08-29/

 

Bullet points:

• Scholz vows to keep up economic, political, military support
• Wants expanded EU to include Ukraine, Moldova, Georgia
• Proposes majority EU voting on foreign, tax policy
• Wants Croatia, Romania and Bulgaria to join Schengen area

[Dinar]

The consequences will be very bad when 100+ million of people living in corrupt countries join.  Corruption and the culture of corruption is breathtaking in Ukraine, Moldova, and Georgia.  Oh, and majority voting on tax and foreign policy - that will work out real well.  Be careful what you wish for.  I am sure a 20% excise tax on Germans to fund help for the poor (aka corruption in the EU) will prove popular with Spain, Portugal, Italy, Ukraine, Moldova and Georgia.  Oh, and and majority rules, so you Germans work while we drink wine at your expense.

[Castanza]

I have heard from my collogues in Prague that their personal energy costs have gone up 100%. My company is thinking about relocating their data centers out of EU (Specifically Germany, Czech, and Ukraine) due to high energy costs and no near term solution regarding energy. That's a significant move because datacenters are not easy to relocate and build. Food for thought. 

 

 

[Spekulatius]

Russia has a LT problem that their economy is going to hell:

https://finance.yahoo.com/news/russia-risks-bigger-longer-sanctions-135601014.html
 

Now they stopped selling NG to Europe and then what? It’s not literally a gas station that stopped selling their gas (they do continue to sell crude oil of course).

[Castanza]

1 hour ago, Spekulatius said:

Russia has a LT problem that their economy is going to hell:

https://finance.yahoo.com/news/russia-risks-bigger-longer-sanctions-135601014.html
 

Now they stopped selling NG to Europe and then what? It’s not literally a gas station that stopped selling their gas (they do continue to sell crude oil of course).

 

Don't know. but you have to admire? respect? the commitment to scorched earth policy. UK is the second worst economy next to Russia with a projected 22% inflation and energy bills that are now 3x what they were ($3549 now). 8 out of 10 factories is in danger of going bankrupt and corporate bankruptcies were up 80% across the board last month. 

Edited September 6, 2022 by Castanza

[Spekulatius]

13 minutes ago, Castanza said:

 

Don't know. but you have to admire? respect? the commitment to scorched earth policy. UK is the second worst economy next to Russia with a projected 22% inflation and energy bills that are now 3x what they were ($3549 now). 8 out of 10 factories is in danger of going bankrupt and corporate bankruptcies were up 80% across the board last month. 

The UK economy seems to be in worse shape than the rest of Europe, but where did you get 22% inflation? They are at ~10% right now and I don't think it's going much higher.

 

Europe has issues with energy supply right now, but I think in 2023, the worst will be behind them. Russia, on the other hand is likely to go into a an extended decline that is going to last years.

[Castanza]

13 minutes ago, Spekulatius said:

The UK economy seems to be in worse shape than the rest of Europe, but where did you get 22% inflation? They are at ~10% right now and I don't think it's going much higher.

 

Europe has issues with energy supply right now, but I think in 2023, the worst will be behind them. Russia, on the other hand is likely to go into a an extended decline that is going to last years.

Bank of England is projecting 13% and Goldman projected up to 22%

Edited September 6, 2022 by Castanza

[Spekulatius]

8 minutes ago, Castanza said:

Bank of England is projecting 13% and Goldman projected up to 22%

I am guessing that GS talks their own book here.

 

One way that 22% inflation could happen is if the GBP collapses relative to the Euro. Since the UK pretty much imports everything (they have financialized their economy), this would lead to rapidly rising prices.

 

My guess is that the UK would protect their currency with significant rate increases but I am no expert on this.

[Castanza]

4 minutes ago, Spekulatius said:

I am guessing that GS talks their own book here.

 

One way that 22% inflation could happen is if the GBP collapses relative to the Euro. Since the UK pretty much imports everything (they have financialized their economy), this would lead to rapidly rising prices.

 

Probably right to a degree on GS. B of E might be a better number to look at. But that's still trending in the wrong direction if correct.

 

10 minutes ago, Spekulatius said:

My guess is that the UK would protect their currency with significant rate increases but I am no expert on this.

 

Does anyone truly understand any of this? 

[Xerxes]

4 hours ago, Spekulatius said:

Russia has a LT problem that their economy is going to hell:

https://finance.yahoo.com/news/russia-risks-bigger-longer-sanctions-135601014.html
 

Now they stopped selling NG to Europe and then what? It’s not literally a gas station that stopped selling their gas (they do continue to sell crude oil of course).

 

Natural gas is a smaller component of Russia's federal budget and exports when compared to sales of crude oil. The natural gas exports to Europe were always a tool of leverage ... and getting paid for having a leverage over Europe.

 

When compared to overall export in 2021, less than 14% of it was from natural gas + liquidifed natrual gas vs. +36% for crude and refined oil. I could not find a good source on Russia' federal budget itself, to put those export dollar sales against it, but putting them against export sales provides a good proxy. The Economist also had a good article few weeks ago about Rosneft and its importance given the outsize role crude/refined oil sales play vs. natural gas for Kremlin.

 

From Jan 2022 (pre-invasion)

Factbox: Russia's oil and gas revenue windfall | Reuters 

- According to the central bank, Russia's total exports reached $489.8 billion in 2021. Of that, crude oil accounted for $110.2 billion, oil products for $68.7 billion, pipeline natural gas for $54.2 billion and liquefied natural gas $7.6 billion.

 

 

[Spekulatius]

Interesting - there are several reports out that the Ukrainians have broken through the frontline east of Kharkiv. Apparently the Russian have moved forces out of the area to reinforce the Kherson front, where the well publicized offensive in the south has taken place. Now they are apparently getting rolled in the North.

 

Could be an absolute rout, if some sources are to be believed, but needs more confirmation.

 

Buying ammunition from North Korea is not exactly an indication of strength either.  Saw a  pic on of a spent Russian Artillery shell dated 1964. That's older than I am.

 

[maplevalue]

27 minutes ago, Spekulatius said:

Interesting - there are several reports out that the Ukrainians have broken through the frontline east of Kharkiv. Apparently the Russian have moved forces out of the area to reinforce the Kherson front, where the well publicized offensive in the south has taken place. Now they are apparently getting rolled in the North.

 

Could be an absolute rout, if some sources are to be believed, but needs more confirmation.

 

Buying ammunition from North Korea is not exactly an indication of strength either.  Saw a  pic on of a spent Russian Artillery shell dated 1964. That's older than I am.

 

It does seem like the tide has turned. I do wonder if there is an element similar to Afghanistan 2021 where the paltry will of the defenders leads to a swift recapture of territory.

[aws]

Seems like a bad few days for the Russians. In less than a week Ukraine has reversed 4 months of gains. Rumor has it Ukraine has captured the Russian commanding general in the area as well:

 

https://www.kyivpost.com/russias-war/top-russian-general-possibly-captured-in-uaf-kharkiv-offensive.html

 

Even their propagandists on state media are starting to show fear:

 

https://mobile.twitter.com/JuliaDavisNews/status/1568310989149605888

 

 

[Spekulatius]

Good summary what happened on several frontlines:

The large scale breakthrough is definitely confirmed and Russia has been pushed back to the Oskil River. Izium and the critical rail junction in Kupyansk (sp?) have been captured by Ukraine. The Russian front further south also looks brittle and could end up in a huge encirclement, if Ukraine can take advantage.

[mcliu]

Huge turning point in this conflict.

The question is if this will lead to a Russian withdrawal or greater escalation and WW3.