Russia-Ukrainian War

[Spekulatius]

2 minutes ago, Dinar said:

Agree with everything that you are saying except for Russians will not long tolerate the economic depression that is unfolding.  USSR tolerated Stalin - who murdered 10-25% of the population, and jailed another 5-10%?  People were literally starving to death thanks to his policies and yet nobody rebelled.  I wish you were right though!

Uprisings are unlikely, but they do happen. Just look at how Lenin got into power in 1917, in large part due to WW2. Ceausescu (Rumania) seemed secure until this arranged  infamous celebration of his accomplishment when people started to call him names and he was gone quickly afterwards.

 

Sometimes these totalitarian regimes seem so solid from the  outside but can crumble quicker than anyone would believe. War can be a catalyst and often has been in history, especially a stupid one like Putin started. It's not something one can predict, but I would not exclude it from a possible range of outcomes either.

[Viking]

11 minutes ago, Dinar said:

Agree with everything that you are saying except for Russians will not long tolerate the economic depression that is unfolding.  USSR tolerated Stalin - who murdered 10-25% of the population, and jailed another 5-10%?  People were literally starving to death thanks to his policies and yet nobody rebelled.  I wish you were right though!

Looking at Russian history one would have to agree with you. I was taught in university that what causes revolutions isn’t poverty or cruelty or terrible leadership. What causes revolutions are expectations and when they are not met. I wonder if enough Russians have had a taste of a better life that the coming economic depression creates the next impetus for change…

Edited March 9, 2022 by Viking

[brianr27]

Sanctions are an experiment in loss aversion. Putin's control over the media may enable him to deflect the anger towards the west. If he's unsuccessful in deflecting and he's overthrown, the outcome is very unpredictable.

[Dinar]

42 minutes ago, Spekulatius said:

Uprisings are unlikely, but they do happen. Just look at how Lenin got into power in 1917, in large part due to WW2. Ceausescu (Rumania) seemed secure until this arranged  infamous celebration of his accomplishment when people started to call him names and he was gone quickly afterwards.

 

Sometimes these totalitarian regimes seem so solid from the  outside but can crumble quicker than anyone would believe. War can be a catalyst and often has been in history, especially a stupid one like Putin started. It's not something one can predict, but I would not exclude it from a possible range of outcomes either.

Lenin got power because the Czar was a spineless piece of shit who abdicated in February of 1917, and Kerensky was a spineless piece of shit who would not let general Kornilov shoot communists on sight.  Read Kerensky interviews and autobiography.  

[changegonnacome]

The assumption in everyones thinking here is that this 'invasion' is going to go on for a long time. I dont think it will by the time extreme extreme sanction pain begins to flow through to the Russian economy i predict the war will be for all intensive purposes over.

 

Given this thread is called "end game". I'll posit my end game again which is becoming more and more likely IMO.

 

Russia has already moved to what I indicated they would which is aerial bombardment, Russian troops were used simply to begin the invasion and precipitate the flee'ing of civilians from key Ukrainian cities...this is not an occupying force (number of Russian troops is too small for that)....Ukraine's main cities will be destroyed in the next couple of weeks with shelling, missiles etc.

 

Once enough damage is inflicted such that Ukraine will be crippled for a decade, Putin will then begin 'de-escalation talks' but really they will be an exercise in diplomacy theatre whereby Putin dismantles the sanctions regime in exchange for various de-escalation milestones he was planning to do anyway. The Western media & politicians of course will claim its because of the Ukrainian army with western equipment being so formidable or military incompetence on the part of Russia or indeed domestic political issues related to sanctions. The EU/NATO/USA will declare it as victory of Western solidarity, democracy & freedom in the face of a tyrant dictator. Whatever in Putin's mind, he controls his domestic media & he'll tell them that Russia achieved its aim of restoring Ukrainian neutrality and on the balance of probabilities he'll be right & the West deluded.

 

Edited March 9, 2022 by changegonnacome

[Gregmal]

Exactly. Once everyone has their propaganda, er, media narratives where they need them to be, it'll be over. Mondays shocking yet not shocking at all news about Putins demands basically tipped the hand as far as my investing approach and signaled what I suspected anyway. Media drove this to a crazy circus that had even totally unrelatedly shit like MSGS(LOL) selling off. When really it was much ado about nothing and soon VIX should retreat sub 30, energy speculation will cool off a bit, and folks will go back to worrying that 4-5% mortgage rates will kill the economy. 

[changegonnacome]

Yep @Gregmal & I put my money where my mouth/opinion is/was and pulled the trigger yesterday/this morning

 

Cant believe I got to buy MSGE in the low 70's again (unless they have a Sphere planned in Moscow that I wasn't aware of  ).......and Hostelworld (HSW) in the late 0.60's....bargain

[nafregnum]

2 hours ago, Viking said:

Looking at Russian history one would have to agree with you. I was taught in university that what causes revolutions isn’t poverty or cruelty or terrible leadership. What causes revolutions are expectations and when they are not met. I wonder if enough Russians have had a taste of a better life that the coming economic depression creates the next impetus for change…

 

+1 for mental models

 

This is also in the book "Influence" by Robert Cialdini - the book that Munger loved so much he gifted it to all his grandkids, and gave the author 1 share of BRKA worth about $73,000 at the time if memory serves.  

 

An example from the book was specifically about Russia: 

 

“This pattern offers a valuable lesson for would-be rulers: When it comes to freedoms, it is more dangerous to have given for a while than never to have given at all. The problem for a government that seeks to improve the political and economic status of a traditionally oppressed group is that, in so doing, it establishes freedoms for the group where none existed before. And should these now established freedoms become less available, there will be an especially hot variety of hell to pay.

 

We can look to much more recent events in the former Soviet Union for evidence that this basic rule still holds. After decades of repression, Mikhail Gorbachev began granting the Soviet populace new liberties, privileges, and choices via the twin policies of glasnost and perestroika. Alarmed by the direction their nation was taking, a small group of government, military, and KGB officials staged a coup, placing Gorbachev under house arrest and announcing on August 19, 1991, that they had assumed power and were moving to reinstate the old order. Most of the world imagined that the Soviet people, known for their characteristic acquiescence to subjugation, would passively yield as they had always 

done. Time magazine editor Lance Morrow described his own reaction similarly: "At first the coup seemed to confirm the norm. The news administered a dark shock, followed immediately by a depressed sense of resignation: of course, of course, the Russians must revert to their essential selves, to their own history. Gorbachev and glasnost were an aberration; now we are back to fatal normality."

 

But these were not to be normal times. For one thing, Gorbachev had not governed in the tradition of the czars or Stalin or any of the line of oppressive postwar rulers who had not allowed even a breath of freedom to the masses. He had ceded them certain rights and choices. And when these now-established freedoms were threatened, the people lashed out the way a dog would if someone tried taking a fresh bone from its mouth. Within hours of the junta's announcement, thousands were in the streets, erecting barricades, confronting armed troops, surrounding tanks, and defying curfews. 

 

The uprising was so swift, so massive, so unitary in its opposition to any retreat from the gains of glasnost that after only three riotous days, the astonished officials relented, surrendering their power and pleading for mercy from President Gorbachev. Had they been students of history—or of psychology—the failed plotters would not have been so surprised by the tidal wave of popular resistance that swallowed their coup. From the vantage point of either discipline, they could have learned an invariant lesson: Freedoms once granted will not be relinquished without a fight.”

 

- Excerpt From: Robert B. Cialdini. “Influence: The Psychology of Persuasion.” 

[nafregnum]

My hope for end-game is that they get to a cease fire before April.  I can't predict much, but these two articles gave me some hope.

 

This one made me want to go eat at McDonalds.  I think they're doing a class-act kind of thing to not leave all those 62k workers high and dry.

 

https://www.newsweek.com/mcdonalds-closing-restaurants-russia-will-keep-paying-62k-workers-1686052

 

This one gave me hope that they achieve a negotiated peace before the death count goes from under 10k to over 100k.  

 

https://www.jpost.com/international/article-700677

 

And this one's for Putin and all other Masters of War.  (IMO the best Bob Dylan cover ever)

 

 

[ValueArb]

9 hours ago, backtothebeach said:

What's so wrong about being a neutral country, prospering from trade agreements in both directions? It will take a long time to heal the wounds of this war though.

 

But what's the alternative? Russia biting off the eastern part of the country, including Kiev/Kyiv, a demilitarized zone and border like North/South Korea?

 

 

 

 

 

 

I think this map is innacurate in that it lists Russias "areas of control" as large filled in areas when in many cases they are really spider webs of controlled roads where the Russians don't dare stray too far from.

[ValueArb]

3 hours ago, changegonnacome said:

The assumption in everyones thinking here is that this 'invasion' is going to go on for a long time. I dont think it will by the time extreme extreme sanction pain begins to flow through to the Russian economy i predict the war will be for all intensive purposes over.

 

Given this thread is called "end game". I'll posit my end game again which is becoming more and more likely IMO.

 

Russia has already moved to what I indicated they would which is aerial bombardment, Russian troops were used simply to begin the invasion and precipitate the flee'ing of civilians from key Ukrainian cities...this is not an occupying force (number of Russian troops is too small for that)....Ukraine's main cities will be destroyed in the next couple of weeks with shelling, missiles etc.

 

Once enough damage is inflicted such that Ukraine will be crippled for a decade, Putin will then begin 'de-escalation talks' but really they will be an exercise in diplomacy theatre whereby Putin dismantles the sanctions regime in exchange for various de-escalation milestones he was planning to do anyway. The Western media & politicians of course will claim its because of the Ukrainian army with western equipment being so formidable or military incompetence on the part of Russia or indeed domestic political issues related to sanctions. The EU/NATO/USA will declare it as victory of Western solidarity, democracy & freedom in the face of a tyrant dictator. Whatever in Putin's mind, he controls his domestic media & he'll tell them that Russia achieved its aim of restoring Ukrainian neutrality and on the balance of probabilities he'll be right & the West deluded.

 

 

I think your posts focus too much on what Putin wants to do and what the Russians actually have capabilities to do. 

 

They can't supply their troops indefinitely. They can't stop drone attacks on their supply lines. They can't protect their armored vehicles from the tens of thousands anti-tank weapons. They can't control the air-space. They have run low on precision guided munitions so they have to use dumb bombs on low level attacks, where they are Stinger bait. Rebuilding their stocks was going to be extremely difficult with their small economy, with sanctions it's going to be much harder.

 

So it's unclear whether they can bombard Ukrainian cities heavily for long, and it seems pretty clear even if they do the Ukrainians aren't surrendering. Remember Stalingrad?

 

They can never control even eastern Ukraine with only 150,000 troops. They need to start mass mobilization to even have a chance. They have to be able to do that without inflaming the population. They'll have to hide the constant losses to guerrilla attacks from their own population for same reason.

 

The Ukraine can fight this war for a long, long time. They have better supply lines, and are getting more advanced weapons than Russia. If Russia tries to enter Kyiv it will be a death trap to their tanks and armored vehicles. If you know how, you can kill a Russian tank with a roll of wire, a rifle and a molotov cocktail, and many Ukrainians have been trained how. If Russia takes Kyiv they'll just move the seat of government and keep their snipers, drones, IEDs rocking on.

 

Meanwhile most of Russias commercial airline fleet will stop flying by end of the month for lack of maintenance and parts. A good number of businesses will be shut down for lack of foreign parts, putting angry unemployed workers on the street. Soon the jails will be full of protesters and police will be scrambling for places to put new ones. At that point the risk of protesting drops to near zero, and the crowds grow.

 

 Putins cronies know their yachts, planes, Italian villas are lost forever as long as he's in power, they also know their graft were a big part of the hollowing out of Russias military capabilities. The military knows their troops are just meat for the grinder as long as he's in power, and that they are going to get the blame for the Ukrainian debacle. One of these groups is going to attempt to take out perceived enemies soon. 

 

One Russia retreats, there will be a new Marshall plan with the EU, Britain and the US to rebuild the Ukraine. They'll use seized Russian capital reserves to fund it. The Ukraine will have a stronger economy than Russia for decades to come.

Edited March 9, 2022 by ValueArb

[cubsfan]

^^^ That will be a pretty awesome scenario should it play out.

[Viking]

33 minutes ago, ValueArb said:

 

I think your posts focus too much on what Putin wants to do and what the Russians actually have capabilities to do. 

 

They can't supply their troops indefinitely. They can't stop drone attacks on their supply lines. They can't protect their armored vehicles from the tens of thousands anti-tank weapons. They can't control the air-space. They have run low on precision guided munitions so they have to use dumb bombs on low level attacks, where they are Stinger bait. Rebuilding their stocks was going to be extremely difficult with their small economy, with sanctions it's going to be much harder.

 

So it's unclear whether they can bombard Ukrainian cities heavily for long, and it seems pretty clear even if they do the Ukrainians aren't surrendering. Remember Stalingrad?

 

They can never control even eastern Ukraine with only 150,000 troops. They need to start mass mobilization to even have a chance. They have to be able to do that without inflaming the population. They'll have to hide the constant losses to guerrilla attacks from their own population for same reason.

 

The Ukraine can fight this war for a long, long time. They have better supply lines, and are getting more advanced weapons than Russia. If Russia tries to enter Kyiv it will be a death trap to their tanks and armored vehicles. If you know how, you can kill a Russian tank with a roll of wire, a rifle and a molotove cocktail, and many Ukrainians have been trained how. If Russia takes Kyiv they'll just move the seat of government and keep their snipers, drones, IEDs rocking on.

 

Meanwhile most of Russias commercial airline fleet will stop flying by end of the month for lack of maintenance and parts. A good number of businesses will be shut down for lack of foreign parts, putting angry unemployed workers on the street. Soon the jails will be full of protesters and police will be scrambling for places to put new ones. At that point the risk of protesting drops to near zero, and the crowds grow.

 

 Putins cronies know their yachts, planes, Italian villas are lost forever as long as he's in power, they also know their graft were a big part of the hollowing out of Russias military capabilities. The military knows their troops are just meat for the grinder as long as he's in power, and that they are going to get the blame for the Ukrainian debacle. One of these groups is going to attempt to take out perceived enemies soon. 

i think you nailed it. What does Ukraine want? They are on the verge of DEFEATING Russia. Ukraine is ALREADY destroyed and bombed out. People think Putin is going to DICTATE TERMS? Especially when everyone (well most everyone) in the world with an internet connection and a working brain can see he is a lying POS. Ukraine would be stupid to give in to Putin - HE WILL BE BACK AND THEY KNOW IT. 

 

My read is Putin is delusional. And the noose is closing (militarily in Ukraine and economically in Russia). So i expect this war will get worse, not better. And last longer than people think. Putin’s only out is to call for a cease fire and lie about his intentions (which will be eagerly gobbled up by a few on this board). And he will use the cease fire to rest and re-arm his troops. And then he will return to Ukraine to finish the job. THE SAME PLAYBOOK AS CHECHNYA.
 

There is no way Ukraine is going to put their head back in the mouth of a lion once they get it out. They aren’t stupid. 
—————

The implications from an investing perspective? Markets are WAY TO DISNEY - still. I expect things to get much worse. There is also a very good chance Putin expands the war to trap/draw NATO in. The man will be getting increasingly desperate. I am back up to 40% cash (rallies like today are a wonderful opportunity to lock in gains). So i can take advantage of the volatility i expect will continue for months. 
—————

There is also the chance that Putin exits Ukraine in the coming weeks. I think this is the scenario markets are currently discounting. I don’t see it.

Edited March 9, 2022 by Viking

[Gregmal]

Just remember, a week ago we were on the verge of a nuclear war and Putin was going to recreate the USSR....

 

People, this is why markets can behave irrationally LOL 

 

Now. Going forward, who are we going to listen to? The people who bring us one sided, agenda driven stories, the people who brought us the "polls" for 2016, 2018, and 2020, the people who have scandal and lawsuit one after another over the accuracy of their reporting and the disclosure of their conflicts.....or.....

 

Often times game theory is the easiest exercise and you only need half a brain to apply it. 

[Viking]

“Who are we going to listen to?” Well, here is a suggestion: we could learn to think for ourselves. You know… do that Stanley Druckenmiller thing… be inquisitive. Be open minded.
 

Lot’s of great sources of information out there. My favourite right now is a military analyst named Micheal Kofman (look him up on YouTube).

 

 

Edited March 9, 2022 by Viking

[Gregmal]

I think if you're still trying to form a picture on this you missed the move. But what do I know?

[Gregmal]

The media couldn't hide a "demand list". Monday seemed to be the bottom. Tuesday people started realizing it. Today we rally. Coincidence. Couple the demand list with the repeated logic that NATO/US/EU repeatedly, over the past decade kept pushing Ukraine even though Russia has warned it was viewed as a national security risk(something a few folks here nailed) and the likely ultimate result of a destroying and/or conquered Ukraine(either accomplishes the 3 demands) and there you have it. Nothing that should be dragging down the majority of US equities. Energy prices will be temporarily relieved thanks to the good guys running democracies in Venezuela and Iran. Funny how it all works right?

Edited March 9, 2022 by Gregmal

[Gregmal]

I mean Russia still has like 5,000 nukes. What changed in the last 48 hours? It became too hard to keep peddling the sensationalism and BS narratives and it became clear that for better or worse once Ukraine was neutralized that chances are this no longer escalates. And that Russia is already half way home in destroying the same place, the EU/US won't do a damn thing, and in a fucked up way, everyone is happy except the Ukrainians who trusted the US/EU. 

[muscleman]

6 hours ago, Gregmal said:

Lol sounds about right. Xi playing chess while Brandon begs. Yup. 

 

And when Brendon finally decides to ban Russia oil imports into the US, he turns to Iran to buy oil..... What a brilliant leader. 

[Gregmal]

3 minutes ago, muscleman said:

 

And when Brendon finally decides to ban Russia oil imports into the US, he turns to Iran to buy oil..... What a brilliant leader. 

Obviously. He doesnt want to deal with unstable dictators. Thats what the media told me.

 

Just took a slight moment to do a narrative shift on Iran!

[Viking]

Europe’s reaction to the Russian invasion of Ukraine has been a BIG surprise to me. First, the solidarity in the EU right now is nuts - getting 27 diverse nations to ALL agree on anything is pretty much impossible. Even the Swiss are involved. This is highly instructive: they are unified like never before on the threat Putin and Russia pose today. Second, follow the money to understand conviction level. Well Europe, in decoupling from Russia’s economy, will likely be in a severe technical recession shortly. And they know it. These 27 nations are prepared to pay a massive price TO PROTECT THEMSELVES AND THEIR CHILDREN FROM PUTIN AND RUSSIA. This is also highly instructive about how Europe perceives the risk of Putin and Russia. What is happening in Europe today is unprecedented in modern history. Folks, we are in unchartered territory.
—————

So are markets ready for a likely technical recession in Europe in the coming months? Are markets ready for 10% inflation in the US in the coming months? My guess is no. 
 

 

Edited March 9, 2022 by Viking

[Gregmal]

They've abandoned Ukraine but sent over some cash and some weapons. What a hell of a response. LOL

[Gregmal]

The reaction to Poland offering some old fighter jets is all one needs to see to understand the situation. “Oh no, no, no you don’t. That’ll trigger a conflict and we would likely get dragged in! No!”…..far cry from the “we banded together and showed Russia who’s boss!” Narrative. 
 

In North America we re peddling our propaganda and some are buying it as always. In Russia they’re pushing their propaganda, and some are probably buying it too. China is loving it. And in Ukraine their lives and country are destroyed. This is what happens when a peon country flirts with the xenophobic big boys.

[Viking]

1 hour ago, Gregmal said:

They've abandoned Ukraine but sent over some cash and some weapons. What a hell of a response. LOL

Europe is taking unprecedented actions to support Ukraine. You might want to expand your sources. Quick Google search and you should be on your way. Not sure if you are aware but Ukraine is NOT part of NATO. 
 

Since the war started, what else is Europe not doing that it could do? Please be specific. (My prediction is you won’t answer my question and instead will talk about fake news, what a swell and misunderstood guy Putin is and some Brandon guy…)

[muscleman]

1 hour ago, Gregmal said:

Obviously. He doesnt want to deal with unstable dictators. Thats what the media told me.

 

Just took a slight moment to do a narrative shift on Iran!

 

The media has become a propoganda machine for Brandon. Whatever he did has to be justified.