Russia-Ukraine war and related tensions Megathread

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https://www.bloomberg.com/news/articles/2022-11-03/eu-studying-ways-to-use-billions-in-russian-central-bank-assets

"EU Studies Use of Russian Central Bank Assets to Rebuild Ukraine"

If they go through with this it could lead to a bifurcation of the international financial world where the Global South will slowly shift their assets away from the collective West.  I suspect people in the collective West financial system will push back against this.

Wake me up when the elite of these countries stop putting their wealth in offshore accounts in the BVI, townhouses in London, and condos in Miami. And what currency will the central banks store their reserves in? The Chinese Yuan is not convertible and is plummeting in value. Ditto for the Indian Rupee. Until then, this is all just BS.

In any case, any peace agreement is likely to include Russia being obliged to make a big contribution towards the Ukraine reconstruction fund in exchange for unfreezing the rest of its reserves in order to give Putin something tangible to offer, making this proposal moot.

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https://oilprice.com/Latest-Energy-News/World-News/Russian-Oil-Price-Cap-Will-Not-Apply-To-Resold-Cargoes.html

"Russian Oil Price Cap Will Not Apply To Resold Cargoes"

You got to be kidding me.  This is so funny.  This sounds like a paradise for arbitrage and kickback schemes.  This entire price cap scheme is really going to be a no go anyway.  Stuff like this just making a farce of it. 

So third-country resellers, as well as the Russian officials who are making the deals, will make big bucks at the expense of the Russian state coffers, thus increasing graft within the Russian state bureaucracy and reducing its ability to continue the war. Sounds like a fair deal to me.

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The Russians are now about to lose the capital city of what is supposedly one of its regions, with barely a whimper. What a disaster!

Interesting Russia held off on announcing this until after the USA midterm elections.  I guess they did not want to give Biden a domestic political victory before the elections.  Well the GOP underperformed anyway but I guess perhaps they would have done worse if the Biden administration got such a political win before the elections.

Maybe. Perhaps the Saudis will become more willing to loosen the oil spigots for the same reason.

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This is a PR disaster for Russia.  They have up territories that are legally part of Russia as per their Consitution.   Now Putin is legally obligated to try to retake Kherson.  That very legal fact now locks Russia into a long war.

Yes, and Putin is too chicken to whip out the red button.

As for the legal niceties, the law in Russia is whatever Putin declares it, nothing more. For political reasons, Putin can't afford to officially sign a peace treaty recognizing his loss. But, he afford to keep a simmering conflict going indefinitely, similar to the Korean DMZ, and reminiscent of the "perpetual war" in George Orwell's most famous book.

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Telegram Russian sources are reporting Ukraine has entered Kherson and that there are troops in Kherson that weren’t ready to evacuate yet and are now trapped

If true, the rotation that seemed to occur a few weeks ago may well have been conducted according to a brutal calculus: evacuate most or all of the professionals and leave the mobiks as speedbumps in the event that a collapse occurs.

Maybe the Russian mobiks were the violent criminals recruited from prison for that reason: they become Ukraine's problem.

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Go straight to the comment section, but make sure you aren't drinking anything.

https://www.rt.com/russia/566351-kherson-region-russia-withdrawal/

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Go straight to the comment section, but make sure you aren't drinking anything.

https://www.rt.com/russia/566351-kherson-region-russia-withdrawal/

Site won't load for me.

The top voted comments:

Every single bridge crossing has been destroyed in the Kherson region at 5 am this morning after russian special forces crossed the russian engineers blew the bridges, with the new fortified front line ,Ukraines so called victory is hollow ,they can't advance ,they can't build bridges, there stuck ,no air force for cover ,there sitting ducks in a empty city. 😃

Kherson remains part of Russia... meaning Ukraine is occupying Russian territory.

If it's Russia why do we retire [I suspect this was supposed to mean "retreat", from the French "retirer"]? is it a joke?? then all of europe is Russian even if we don't rule? what is bullsh**t?

Russia will prevail, it is an intelligent move, God bless.

Forgotten Fact :

The Donetsk and Luhansk Oblasts Self-Governance Referendums were part of the original Minsk Agreements…

That everybody agreed to...

Including the United Nations!

Ukraine is basically little Israel they’re run by international Jew extortionists who despise Russia and the west

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https://twitter.com/wartranslated/status/1591102458256044033

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b) Areas under Russia's control re-join Ukraine as autonomous regions as part of a Ukraine confederation. The New Ukraine confederation has Constitutional changes to ensure that it is neutral and cannot enter any alliances.  Russia + NATO guarantees Ukraine confederation borders with a rule that ANY foreign troops on Ukraine will mean an act of war EVEN if Ukraine asked for it.

How will that work, in practice? The people of the annexed territories clearly view themselves as Ukrainian, and would view such autonomous regions as merely tools to dilute Ukrainian sovereignty. The moment after such a confederation is formed, they would immediately vote to abolish these autonomous regions. Russia's military capabilities would still be crippled after the losses of this war, and wouldn't be capable of responding. If he's smart enough, such a treaty would only be a face-saving admission of defeat.

Crimea is gone.  Even USA privately seems to indicate that any peace deal would mean Russia keeps Ukraine.  One face-saving possibility for Ukraine would be some sort of free trade setup between Ukraine and a Russia controlled Crimea.

I wouldn't disbelieve that, pre-February 24, Zelensky was open to the idea of abandoning Ukraine's claim over Crimea to rid itself of a potentially subversive element. That the US privately wanted to recognize Crimea as Russian was probably true over the summer, when Biden and other western leaders were somewhat vague when asked about the details on "victory". But, they've been emboldened by Ukraine's progress since then, and were openly high-fiving Ukraine after the attack on the Crimean bridge. This means that they truly do seek a return of Crimea to Ukraine. The details probably will be up for negotiation, such as maybe a temporary UN administration before a UN-held referendum.

In any case, any deal where Ukraine's borders aren't clearly defined and respected, and where it doesn't enjoy full sovereignty over its territory, would put its viability into long-term doubt. It would be impossible for Ukraine to attract the foreign investment needed for long-term development, meaning its economy will stagnate. In particular, the east, which was formerly its industrial heartland, will be left in ruins. Its political class will be able to use the constant existential crisis as a tool to continue enriching themselves. Yes, the examples of Taiwan and South Korea do prove it's possible for (part of) a nation to prosper even when facing a constant existential crisis, but they both had strong western support, which won't be happening under any peace agreement that Putin demands.

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From the above NYT article . US officials tried to intervene to prevent a frontline assassination.

Well, it is official US policy not to target the actual leaders of other countries. Assassinating Gerasimov with US assistance would have been a step too far. The US has recently shown less scruples recently, and no longer object to Ukraine using NATO-supplied weapons to strike in Russia proper.

Also the Wagner soldier who got hit with a sledgehammer was traded in a prisoner swap which raises some serious questions about Ukraine's claims about not trading back prisoners

The POW's previous interview with the Ukrainian media is a breach of the Geneva Convention by the Ukrainian army. There have been plenty of prisoner swaps between Ukraine and Russia, but the Geneva Convention only prohibits forcing back unwilling POWs. It's likely this Wagner soldier thought he could safely return, only to be killed "pour encourager les autres".

The last quote is this. Could be a bit coerced considering the situation he is in but could be a fairly realistic quote.

I would believe his statement. But, there's a selection bias, since those who aren't willing to keep fighting won't speak to the media anyway.

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A reminder just how huge Russia is: Chita, where this report was made, is 4,700 kilometers from Moscow. Manila is closer at 4,200km away!

I often wonder what sort of allegeance the citizens of Eastern Siberia or Kamtchatka can feel for the Kremlin over 4000 miles away. I've been told by Russians that the same shows are broadcast a few hours later.

Honolulu is even further away from Washington, than Chita is from Moscow. Even more incredibly, Honolulu is closer to Auckland and Seoul, than to its national capital. At least, the other continent-sized nations have a high level of federalism (*cough* other than China *cough*, but even there Beijing doesn't usually micromanage the day-to-day jobs of local officials), making the capital seem much less like a District One. That's not something the Russian political elite can tolerate.

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https://www.presstv.ir/Detail/2023/01/13/696259/Russia-sanctions-monetary-control-US-imperial-system-

"‘US monetary control of world will collapse’ due to Ukraine war: French expert"

In an interview with Le Figaro on Friday, French historian and anthropologist Emmanuel Todd said, “If the Russian economy offers long-term resistance to sanctions and manages to bleed the European economy white and manages to survive with Chinese support, US monetary control of the world will collapse and with it, the US’ ability to finance its mammoth trade deficit for next to nothing.”

Is this the same Russia that's selling oil at a loss, is this the same Europe where fuel prices have fallen below pre-2022 levels, and is this the same China that has quietly given up on buying an overseas empire?

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https://www.geo.tv/latest/466145-president-putin-to-decide-on-discounted-russian-oil-price-for-pakistan

"President Putin to ‘decide’ on Russian oil price discount for Pakistan"

The $60 Russian oil price cap is in action. Pakistan is looking to switch over to Russia as its energy provider on the premise it will likely get a discount given the fact that Russia will be shut out of collective Western energy markets.  Russia seems game but will work to minimize that discount or will agree to a discount if Pakistan cooperates on other geopolitical issues.  So the oil price cap is having an effect.  Russia will continue to sell energy at a significant profit but that profit will be less than the market rate given the oil price cap.  Also, the price cap will drive a rotation of the world energy markets on which suppliers supply which importers.

I have a Benjamin that says that the Pakistani official in charge of that deal will simply resell the Russian oil on the world market, and split the profit between his Russian counterpart and his mistress in Dubai.

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Sure, either way, it fits the narrative of the oil price cap is burning collective West money to get Russia to burn some of its money.  Russia still makes money due to still elevated energy prices but less than it would otherwise make without the price cap.  In that sense the price cap is working but not fatal.

But how is the oil price cap costing the west anything? The price of Brent and West Texas crude oil has fallen below pre-February 24, 2022 levels, so the loss of Russian crude in the EU hasn't led to the economic chaos that Putin was hoping for. Meanwhile, the price of Urals crude has fallen far below even the $60/barrel cap. Putin himself is of course claiming the economic loss won't affect the special-military-operation-effort, but the actual economists are deeply worried.

https://www.ft.com/content/8a5f4681-9592-469f-b223-a939dcbbf3f3

Back when the idea of the price cap was first floated, Putin threatened to refuse to sell to any buyer that adhered to the cap, and even promised to assemble a vast fleet of tankers that would disregard it. In other words, Putin was literally banking on a surge in fuel prices to force the west to acquiesce to his demands. None of that has happened. Instead, the western powers successfully forced a budgetary crisis on the Russian state at zero cost to their own economies. And, the more that Russian state officials are profiting off the resale of cheap Russian crude, the more corrupted the Russian state apparatus.

This isn't, by itself, fatal. But the whole basis of Putin's plan for victory - that the west will tire of economic costs caused by its sanctions and acquiesce to Russian demands - has completely backfired.

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I agree that is the collective West plan and in this case, I would agree has had limited success.  At this stage, Russian oil is selling for around $6 below non-Russian oil so the impact is real.  On the other hand, the price Russian energy is being sold for is far above what Russia needs for its historical fiscal needs although it is clear Russia will need to spend more on the war.  A much deeper world recession is necessary to drive oil prices to a level that will have a large impact.  In that sense, the likely V-shaped PRC economic recovery in 2023 is coming at a good time for Russia.  So the best way to describe the collective West price cap is that it has real but limited success which is more effective then I would expect.

The spread between Brent and Ural is almost 50%. In other words, almost half of Russia's oil revenues in a hypothetical absence of a cap have gone missing. If Putin wants this special-military-operation-effort to continue much longer, he will have to look for revenue from within, and it's doubtful how far he can go.

https://www.ft.com/content/8a5f4681-9592-469f-b223-a939dcbbf3f3

Also, don't bank on a V-shaped recovery in China. More likely, it will be L-shaped. Unlike in the rich world, where government handouts meant consumers were sitting on vast amounts of excess cash that were bound to overheat the economy, China's constant lockdowns and a lack of government handouts mean there's no excess cash to drive a quick recovery. Most recently, there are plenty of anecdotes of Chinese local governments simply running out of cash and using absurd methods to keep the lights on. If the markets were expecting a V-shaped recovery in China, then oil futures would have already surged - and there's simply no sign of that at all.

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I don't follow the logic of your first paragraph. The predicate of the German government falling would be a majority of its parliament want to be more aggressive in supporting Ukraine. The issue arises since it appears that the SPD's coalition partners do want to be more aggressive. I do admit that I not necessarily a fan of papering over differences where differences exist.

I also don't know what is going on behind the scenes obviously. If Germany is really going to train Ukraine troops to use the tanks during this hiatus period, the hiatus may not interfere much with outcomes on the battlefield.

No one likes foreign powers interfering in what should be their internal decision. If Germans feel that their government wasn't formed as a product of their decisions, then that would fatally undermine the meaning of democracy. And besides, Germany is an open democracy: it doesn't cost anything to openly advocate for approving the tanks, especially when the large majority of all Germans outside AfD voters support it. If the cause of German reluctance is its historical trauma from 80 years ago, then that should be viewed in its context. It should be noted that the Japanese seem to have had an easier time overcoming their even greater historical trauma, perhaps because they have been more aware of the geopolitical threats they face.

The Poles have openly stated they will force German hands, one way or the other. German dithering might not matter much in the short term, but it will rekindle suspicions about fecklessness.

As for PRC economic recovery, it is a crapshoot.  We will know more in Q2 2023.  But financial markets are already starting to price in a strong recovery starting in Q2 including oil prices as well which have surged since early Dec 2022.

Yes, there will be some recovery in China in the coming months. But, the early signs are not optimistic, given the rock-bottom consumer and producer sentiment levels even after the end of the lockdown. Oil has recovered slightly, but only back to early 2022 levels, and still sharply down from when fears about war-related disruption were at their worst. There *might* be more recovery if there's more confidence that inflation can be restrained without provoking a recession.

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In true Cultural Revolution fashion, it seems some Ukraine schools have renamed Moscovium to Ucranium

Not Cultural Revolution-like at all:

https://twitter.com/kamilkazani/status/1525853138569138177

https://twitter.com/kamilkazani/status/1502729981771882500

https://twitter.com/kamilkazani/status/1500498843061956613

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Buying into German and Polish equities late last year, when everyone was dooming about Europe freezing in the dark, was the best investment I've made. I'm sure our pro-Russian posters on this thread are kicking themselves.

https://www.reuters.com/markets/europe/after-long-cold-year-investors-are-flocking-back-europe-2023-01-24/

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Instead, I will merely reiterate my prior response to your inane comment, that this is simply you crying internally that the release of Abrams and leopard tanks plus f-16s could be a major game changer in driving back the vicious invading Force you've habitually cheered on from the sidelines as a proxy for your own open Han supremacist goal of seeing Taiwan reconquered because, as you've quite explicitly and verbatim stated, you firmly believe might makes right.

Correction: might makes right as long as I don't have to make any personal sacrifice. People with that mindset equate a bigger map of their nation the same way they cheer on a sports team - something that comes at zero cost to them other than screaming at the TV and buying overpriced merch.

That's why you see the same Russians who wave Z flags, run to the border when the draft was announced. It's also why in China, the top shills for the CCP and its policies do so from the comfort of their homes in the decadent western liberal democracies they denounce. We call these people "offshore patriots".

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https://www.reuters.com/world/us-readies-2-bln-plus-ukraine-aid-package-with-longer-range-weapons-sources-2023-01-31/

https://mobile.twitter.com/Faytuks/status/1620563635876798464

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I agree. His argument in the video that Chechnya couldn't feed, clothe, and fund public projects itself is incredibly weak.

There's a reason no nation's heroes or founders ever said: "I'd like for my homeland to be independent and free, but we get lots of money from our occupiers. So independence is not possible at this time."

To be fair, when the Soviet Union was on its last legs, the Party bosses-turned-nationalist leaders of many republics were not very keen on full independence, because they were afraid the new nations couldn't pay their bills. The August Coup then forced their hands anyways.

To me, it's shocking that he's even mentioning independence as if it was a desirable goal at all. It must be a sign that Kadyrov no longer fears Putin's wrath and can openly brag about a desire to undo the act that brought Putin to power in the first place.

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https://mobile.twitter.com/KyivIndependent/status/1625335906281431041

I noticed that western governments stopped openly trolling Putin after the first few months of the war, apparently after Biden concluded the trolling wasn't effective as a psy-op against the Russian war effort. I wonder what made them change again.

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In Soviet Russia police bribe you:

https://twitter.com/francis_scarr/status/1625133436951314439?s=20&t=K9mr4VE2...

That's strange. Usually, the traffic police agree to funnel a cut their bribes to their bosses like a form of taxation.

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Tactically the PRC won in the sense they invaded and then pulled back with all the fighting taking place in Vietnamese territory.  Operationally PRC lost since the PLA totally underperformed against a de facto Vietnamese militia force and failed in their goal of getting Vietnam to pull out their forces from Cambodia.  Strategically it was a victory for the PRC because it was able to a) attack a USSR ally with no blowback which embarrass the USSR on the world stage and b) cement a de facto USA-PRC anti-USSR alliance.

I suspect this war will also have many layers of of winners of losers with some not being clear until years later.

That was so, because Deng was smart enough to recognize to cut losses after a month of a stalemate, thus turning his tactical defeat into a political statement.

Putin could have done exactly that, if after he realized he couldn't take Kyiv, withdrew all Russian troops back to the pre-2022 positions and declared he had successfully put the Ukrainians in their place. Back then, that's what I thought would be his decision.

We're now in a situation where Putin must coexist with no fewer than four private armed groups (Wagner, Kadyrov, Gazprom, Shoigu).

If there's any parallel to Chinese history, you should look at the 1895 Sino-Japanese War, where an Imperial Chinese Army and Navy that had supposedly undergone decades of modernization was shattered by a much smaller and nimbler enemy. The Imperial Chinese forces suffered the exact same failures we're seeing in Russia now, such as rivalry between different military personalities, widespread corruption, and a lack of engagement by ordinary Chinese subjects. As a student of Chinese history, you know full well what happened to the Qing Dynasty after that war, and I suspect that the future of Putin's Russia will have a few parallels to it.

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“Mr. Blinken confronted China’s top foreign policy official, Wang Yi, when the two met on Saturday night on the sidelines of the Munich Security Conference,” … and “warned him” that would have “serious consequences” to the US-China relationship. What does that mean in practice? Well, after noting that the US does not have much in the way of cards to play here, the NYT article moved on to more trivial pursuits. So perhaps not much, unless it’s time for another trade war.

China is not Russia. While relations with China go down the drain, and Xi flexes his muscles, there remains a huge and interdependent trading relationship. How is that going to work out?  I have not read much on that issue - China and NATO fighting a proxy war in Ukraine while doing trillions of dollars of business together. What lethal stuff can China give to Russia? Details matter. Where is the damn press when you need it? Where are the scholarly articles? Who is going to ask the tough questions of the right people (that means Blinken and Austin, not Biden or the most unimpressive joint chiefs guy)?

Pathetic. Perhaps it’s time to dial back one’s expectations as to their standard of living going forward. I mean it.

If that were to happen, the US and the EU would have a perfect excuse to enact sanctions against China's military industrial complex, and any of its suppliers (i.e. vast numbers of companies that might also export to foreign markets). Xi had previously made it a national priority to replace imported technologies with homegrown alternatives, and there was some progress made. But, much of the allocated funding ended up in the pockets of various officials. Earlier this year, he ordered a "pause" on new semiconductor investments, just as the US has just enacted the Chips Act, and the EU, Japan, South Korea, and Taiwan are all ramping up investment plans. That was a major setback, but didn't get nearly as much attention as it deserved. Simply put, China's industrial base is critically dependent on irreplaceable western technologies, and lacks the ability to change that fact despite its best efforts. The only vulnerability the other way was China's near-monopoly on rare earth metals, but alternatives are gradually coming on stream. In other words, there's nothing that the world needs that is only available from China.

Private companies are already voting with their feet, and it seems like every week, another company announces plans to move production away from China to friendlier shores. A ramp up of geopolitical tensions will only hasten this process even more. The trade statistics indicate that China's exports are falling. Vietnam, Thailand, the Philippines, and Malaysia are all reporting a boom in exports. There's definitely an understanding from the technocratic level about the danger this poses to China's domestic situation, but Xi himself can't stop causing more trouble. He *can* make a U-turn when he's convinced that his current path is creating unnecessary risk for himself (see how he instantly u-turned on the COVID lockdowns), so we'll have to see if he does so here.

Anyway, if it really got to the point where China is sending vast quantities of low-tech artillery or other ammo to Russia, at that point, there will be calls for the western powers to send Flying Tiger-style volunteers, at least as a stop-gap measure until Ukraine's own western fighter jets are ready for action.

As for your final point about Chinese living standards, I don't think Xi cares if his actions cause living standards among the Chinese people to stagnate or even decline. His own propaganda machine has been building a narrative about how living standards can be sacrificed for the Party's benefit. Falling living standards can also be used as a way to strengthen his domestic power, as has been the case in Cuba, Iran, Russia, and other countries. But, what Xi genuinely is worried about, is mass unemployment. He can ill afford to do anything which would cause yet more job losses. But, if he was really pressed, he could replace $500/month trinket-making jobs, with $300/month ditch-digging jobs.