Russia-Ukraine war and related tensions Megathread

[Torie]

We will begin to find out how accurate the story is at 8 pm EST, which it states is the scheduled invade date. The story sounds like a recycling of the stories that the US had documents of the invasion plan scheduled to start on Wednesday as part of the its plan to expose Putin's plan in advance to induce him to tack.

[Torie]

I found this bit in the New York Times:

" The websites of Ukraine’s defense ministry and army, as well as the interfaces of the country’s two largest banks were hit by cyberattacks on Tuesday, a Ukrainian government agency said.

The announcement came as Ukraine girds for a possible attack by Russian forces massing on its northern, eastern and southern borders."

...

"Pavlo Kukhta, an adviser to Ukraine’s energy minister, said in an interview that the hackers were possibly preparing for a larger attack, which could target the country’s “vulnerable” power grid."


https://www.nytimes.com/live/2022/02/15/world/russia-ukraine-news#hackers-attack-ukraines-defense-ministry-army-and-state-banks-agency-says

[Torie]

Reading Wikipedia about the 2014 regime change makes grim reading. Putin wanted Ukraine and wanted it bad. Obviously he still does, and has been waiting for the right moment to make his move. Putin has an agenda, and to get what he wants will require force. I don't see any escape. And Putin is willing to pay the economic price, and I suspect has some assurances from China to help offset whatever economic damage results from sanctions. I will be very surprised if there is not a war by tomorrow or the next day. And unless the sanctions are but a fig leaf to it seem NATO did something, it is going to be another hit to the US economy. It looks all bad to me. The US/NATO just do not seem to have any cards that are actually playable to give Putin much pause.

https://en.wikipedia.org/wiki/Revolution_of_Dignity

[Torie]

I have no inside information obviously, and fortunately, the invasion has not happened yet, so I am glad I was not proved seamlessly clairvoyant. I am pessimistic because if it is all a bluff, I don't think Putin is going to get much out of it, and all these troops in place is a  very expensive enterprise to carry on for long periods. And again being no expert and with no inside information, my perception is that Russia could prevail militarily in rather short order. But maybe Putin has now decided that longer term subjugating Ukraine by force is just too risky. Maybe sanctions and other measures the West can and would take would be more devastating to Russia than I had perceived (my perception was to the contrary and would be also very costly to the West). I certainly hope so. I remain pessimistic however, and I suspect that the West will now accelerate measures to become less economically involved with Russia and dependent on its energy. Being willing to use military force to get your way in a context such a this, means that the country is just not one right now that you want in the same house, much less in the same bed. So in that sense, Putin's "antics" have already cost him.

I wonder how much of the current Russian mindset is a function of Putin and the "cult" of his personality, and likely to change when he departs (hopefully his "reign" will not be as long as Queen Elizabeth), and how much is endemic. Russia may no longer be an "evil  empire," but sadly it is saddled with a very evil man. It is sobering to think that for four years the 3 most powerful nations in the world were run by evil autocrats or would be autocrats. Finally, I am not a fan of Biden and find him or magical competence, but on Ukraine he has done well, and seems engaged and knowledgeable and measured, and kudos to him for that.

Addendum: The withdrawal feint appears to be just that, a feint. What is the point of Putin continuing to throw chips onto the table, if it is a but a bluff that is not going to get him any substantive concessions? That is what puts me in the doomer camp pretty much.

https://thehill.com/policy/international/594470-nato-chief-says-it-appears-russia-is-continuing-the-military-buildup

[Torie]

VRB, My thinking the date might well have something to it, is that events and the reporting of them, seemed to fit so well, including even the false story that Biden was going to delay his talk into 30 minutes after the time of the invasion, and because of my perception surmise that Russia can' engage in this show of flexing its muscles, with so many boots on the ground, and ships deployed, the whole show, for that long - it's either fish or cut bait. Some of the reporting of the timing and so forth may have been Russian disinformation for all I know. I've read that Biden has a good spy network now to get good intelligence on what is going on in Russia, and his strategy was to broadcast to the world what was going on, blow by blow, like a sports announcer of plays, so Russia thought, well Biden broadcast this please  - the bombs will start dropping in 30 minutes.

[Torie]

Another victory for Russia for this crisis going public is

https://www.reuters.com/world/europe/swift-off-russia-sanctions-list-state-banks-likely-target-us-eu-officials-2022-02-11/

"SWIFT off Russia sanctions list, state banks likely target -U.S., EU officials"

Now Russia knows that cutting Russia off SWIFT is not an option.  Again a public version of this crisis only serves to strengthen Russia's hand.

All those damn Euros think about is their bank accounts. Some Russian dude said taking away SWIFT was almost as bad as nuking Moscow, and in effect a declaration of war. And what percentage of the population has a clue what SWIFT is? The media assumes that percentage is co-extensive with being literate, since they assume that we all know what is means.  Apparently bank green eye shade types know what it means, and that is has something to do with their paycheck being drawn against good funds. See below.

"European lenders have expressed concern that banning Russia from SWIFT would mean that billions of dollars of outstanding loans they have in Russia would not be repaid."

[Torie]

He said, he said. Assuming that Russia is lying like a rug that they are packing their bags and leaving the hood, why are they bothering to lie? What is that supposed to accomplish?

https://www.nytimes.com/live/2022/02/17/world/russia-ukraine-news


Has anyone read about any ongoing negotiations lately?

[Torie]

I have a feeling one of Putin's main objectives is to use this as bargaining chip to legitimize Crimea annexion and essentially get Donbass regions recognized as independent or part of Russia?

I agree that these are going to be things Putin will want to get out of this.  A Russia-Ukraine compromise to me would be something like

a) Russia continue to use Ukraine transit state for gas which would continue much needed Ukraine government revenue
b) Ukraine carries out Minsk II which gives autonomy to the Donetsk republics
c) water rights for Crimeria - Ukraine has cut off water to Crimea since 2014 and Russia has to move in the water there at great expense
d) Ukraine formally giving up joining NATO

I suspect it is d) that is the main sticking point now.

Your list does not seem to include Russia giving up anything other than not invading for the moment. I don't think that dog will hunt or should hunt. It has eerie echoes of the forced relinquishment of the Sudetenland.

In one sense Russia has already lost, because unless the West is into the suicide mode, it cannot allow itself to be economically entangled with Russia to the point that it can be coerced to bend over. It's time for something akin to an economic divorce at least up to the point that when Russia is a bad boy, it can be cut off without undue economic pain.

It is also a warning shot about China, which will soon be a co super power with the US. That is a very sobering thought since it has the economic power, or soon will, to do just about anything it wants. 1951 was a good year to be born as an American. It really was. Good luck to you all.

[Torie]

Sure.jan, Biden Admin will just do this because Mr. Putin wants so.

https://twitter.com/DailyMail/status/1494317602646245377

Why stop at Europe? And when will Putin demand Alaska back? This circus act would be funny if it were not so tragic.

[Torie]

Sure.jan, Biden Admin will just do this because Mr. Putin wants so.

https://twitter.com/DailyMail/status/1494317602646245377

Why stop at Europe? And when will Putin demand Alaska back? This circus act would be funny if it were not so tragic.

Torie how did you feel about Sewards folly back in the day?

I loved the erose lines of the territory, so I was very enthusiastic. It was only in my third century, when I finally managed to mature to the point that I became hostile to erosity, except as a modern art piece.

[Torie]

https://twitter.com/ChristopherJM/status/1494406719836930054

Is this poll broken down between Russian speakers and non Russian speakers?

[Torie]

https://twitter.com/ChristopherJM/status/1494406719836930054

Is this poll broken down between Russian speakers and non Russian speakers?

Not that I can see (although I can neither read nor speak Ukrainian!), but it does appear that the responses can be broken down by region. Unsurprisingly, it appears that the highest level of opposition to joining NATO would come from the eastern region of the country. And I assume they couldn't poll Crimea or the separatist-controlled areas of Donbas and Luhansk so you would need to factor that into consideration too.

https://twitter.com/ArgoJournal/status/1494417483712892934
 

Thanks. What would be interesting if "Russians" who all things being equal, would prefer to be part of Russia, but want to stay away, because being in the same nation as your tribe is not a reasonable path to either the good or moral life, and it is time to build a wall.

[Torie]

I have a feeling one of Putin's main objectives is to use this as bargaining chip to legitimize Crimea annexion and essentially get Donbass regions recognized as independent or part of Russia?

I agree that these are going to be things Putin will want to get out of this.  A Russia-Ukraine compromise to me would be something like

a) Russia continue to use Ukraine transit state for gas which would continue much needed Ukraine government revenue
b) Ukraine carries out Minsk II which gives autonomy to the Donetsk republics
c) water rights for Crimeria - Ukraine has cut off water to Crimea since 2014 and Russia has to move in the water there at great expense
d) Ukraine formally giving up joining NATO

I suspect it is d) that is the main sticking point now.

Your list does not seem to include Russia giving up anything other than not invading for the moment. I don't think that dog will hunt or should hunt. It has eerie echoes of the forced relinquishment of the Sudetenland.

In one sense Russia has already lost, because unless the West is into the suicide mode, it cannot allow itself to be economically entangled with Russia to the point that it can be coerced to bend over. It's time for something akin to an economic divorce at least up to the point that when Russia is a bad boy, it can be cut off without undue economic pain.

It is also a warning shot about China, which will soon be a co super power with the US. That is a very sobering thought since it has the economic power, or soon will, to do just about anything it wants. 1951 was a good year to be born as an American. It really was. Good luck to you all.

a) Russia continue to use Ukraine transit state for gas which would continue much needed Ukraine government revenue

is actually a big concession since once Nord Stream II goes live then Ukraine will lose almost all gas transit revenue which makes up 18% of Ukraine government revenue.

I think rolling back NATO is a medium-term crisis meaning if Russia does not see progress on this in the next couple of years I can see Russia getting very aggressive.

The current crisis in my mind is about Nord Stream II and Western intra-alliance discipline.  Germany needs Nord Stream II or else its industrial economy will become uncompetitive.  The USA does not want Germany to further its economic links to Germany ergo a crisis has to be created to force Germany to give up Nord Stream II. When Germany does not budge the crisis has to be made bigger to increase the pressure on Germany.   Clearly, the USA can sanction Nord Stream II but that will turn the German people against the USA.  So Nord Stream II has to be shut down but the blame pinned on the Russians.

None of that strikes true to me.I suspect Germany has now decided to cut loose from Russia anyway. Short the world economy. It no longer works the way it it structured. We are well on our way to Cold War II. And this time, the West does not have the high ground. I am not confident that the West adequately understands just how suck their current position is. The clinging to free beer is perhaps a delusion that the beer is in fact free.

[Torie]

I wonder what percentage of Russians actually believe this crude propaganda. It really does not seem worth the effort to me.

[Torie]

If the main Russian aim is to go straight to Kyiv, and effect a regime change, which is the most recent media chat, is there any escape that Russia wants Ukraine to be a puppet state or annex it, and is willing to bear any cost, bear any burden, to effect that? And then what?

Meanwhile the securities markets seem relatively calm.

[Torie]

Zelensky in Munich: “We’re going to protect our country with or without the help of our partners.”

My first take was that Zelensky has nukes in his pantry, and if NATO hangs Ukraine out to dry, Ukraine will not be alone in going down the tubes. And yes, Putin has sealed the deal that as a top national priority, never, ever give up your nukes if you have them0 (and if you don't have them, do your best to fabricate them in your national basement. If you want a friend that will hang with you when the going gets tough as a nation, get a dog. Other nations will sell you out if convenient for a cool new flavor of Ben and Jerry's Ice Cream.

[Torie]

If you do want to be worried about something WMD related, here's a scenario that's a bit more likely than a nuclear attack: Russia has turned a blind eye to chemical attacks in Syria and we know Russia has a chemical stockpile of its own which it has already used on a small scale in cases like the Skripal attack. The US, UK, and France have all launched airstrikes on Syrian targets in response to Assad's chemical attacks, even despite not otherwise being at war directly with Assad. If there are reports of a chemical attack in Ukraine, how do the US, UK, and France respond?

Personally, my guess would be that they come up with some lame excuse as to why it's different, like saying they have intel it was done by some tiny Russian-backed extremist group, and they will work with Ukraine to identify and destroy chemical stockpiles in Ukraine but won't do anything in Russia, but I don't think we can say for certain. Fortunately, I don't think Putin would want to use chemical weapons for the same reason that it doesn't really further his larger goal to keep Ukraine out of NATO, and he wouldn't want to escalate above a conventional war with Ukraine and Ukraine only, but he at least has a little more plausible deniability/"wasn't me" with chemical weapons than he does nuclear weapons, especially the really-easy-to-come-by stuff like chlorine.

Thanks for your series of informative and well crafted posts. I suppose for me, the threshold question, before one even gets to the issue of the current resiliency of MAD, is why in the world would Putin use nukes or chemicals when he can get his way militarily without them.

[Torie]

What are the chances this escalates into something worse? As in WW3? Or nukes being launched.

Is that a serious question? If Putin wants to annex Ukraine he can. The result will be another Cold War where Russia is cut off from economic commerce with the West. That is how this not in the loop, not an expert, old fossil sees it as he pounds his keyboard. The planet has been moving to a very bad place the last five years. I hope I don't regret not dying two years ago.

[Torie]

If I were Zelensky I'd be doing everything in my power to get my hands on nukes as quickly as possible.

As soon as he actively attempts this, Putin would possibly see this as invitation and invade Ukraine entirely. And without active military intervention from NATO forces (which wouldn't happen), Russia would have occupied the whole country in a matter of weeks and Zelensky would either be arrested or in exile.

More importantly, even if he had nukes, where exactly would he use them? In Donbass and occupied territory? He would conquer back territory that's no longer habitable from nuclear fallout. He would have to attack Russia directly, which would not only cause thousands of innocent deaths, it would be the starting point for WWIII.

Last but not least, arming Ukraine with nukes would embolden Russia, the PRC or other bad actors to arm other horrible regimes with nukes with whom they're allied because "the West has done the same."

The NATO bloc already tore down one precedent by separating Kosovo from Serbia, emboldening Russia and allowing it to support allied movements in Georgia and later Ukraine.
It'd be for the best if we didn't destroy another precedent for sake of short-term gain. No one should supply Ukraine any nukes. The knock-on effects would be disastrous.

Except there was an ethnic cleansing issue in Kosovo, so I don't think that is much of a precedent.

[Torie]

RUB is now above 79.  Financial markets clearly take the view that escalation has peaked and, while there is a significant chance of a blowup, the trend is toward de-escalation.

Probably, because neither US or EU want to describe it as invasion. Yet, at least.

Well, Ukraine cannot describe it as an invasion because as per Ukraine Russia already invaded these lands in 2014 so they cannot re-invade the same area. 

It seems we are headed to these breakaway republics being annexed to Russia soon.  It will be a rerun of the 1810 West Florida Republic in slow motion. 

I think this is a mistake on Russia's part as it now limits their strategic space.  Ideally for Russia, they want a pro-Russia (or at least non-anti-Russia) Ukraine.  This move takes that option off the table.  While I do not think Russia will do anything soon this move pretty much locks Russia into the goal of eating up Eastern Ukraine up to the Dnieper River in the coming decades and Western Ukraine will be anti-Russia for decades if not centuries.  These moves will be costly and risky for Russia and ensure at best a hostile Western Ukraine on its border.  Putin trades some short-term advtanages for long term costs.  My assessment of Putin as a sound strategist has diminished.

Well if what you are saying is true, Putin should just take the whole country.

Western Ukraine has
1) Very little if any Russian speakers
2) Influence by Ukrainian Greek Catholic Church

This means Ukrainian nationalism is very strong there making long-term Russian control very costly and not viable.

You may think it is not viable, but it appears to me that Putin going to all this fuss means he wants a regime change in Ukraine, and is going to use force to get it, and nobody is going to stop him, and Putin does not give a damn about sanctions and has planned for this. 

[Torie]

Equity markets and RUB surged after Biden's speech.  I guess the sanctions were less than what was feared by the markets.

The sanctions so far were a nothing burger. Hopefully they ramp up fast. I do think Putin is going in for the kill, and "we" can't stop him. But "we" can isolate Russia economically, and so all we can to induce a regime change in Russia. Sure it might hurt our equity portfolios.  How much of yours as a percentage are you willing to give up in a punish Russia regime, assuming the ultimate "good" is not maximizing your net worth?

And where is Pervomaisk? Putting up names that even most of the uber map nerds here don't know is in my case elder abuse.

[Torie]

No doubt this word vomit from the sociopath has already been reported here. Just when you think the man can't sink any lower, he does.

"Complicating the response from the GOP, Trump this week hailed Putin’s tactics in Ukraine as “genius,” saying the Russian president’s characterization of invading troops as “peacekeepers” was a move both “smart” and “savvy.” 

'The praise drew the immediate condemnation from members of both parties, including Cheney, who said the 45th president’s “adulation” of Putin “aids our enemies.” 

https://thehill.com/policy/international/595485-divided-gop-unites-around-blaming-biden-for-ukraine-crisis

[Torie]

Absent Putin being toppled, he is going to annex Ukraine (not put in a puppet, but annex), and get away with it. Now the issue is whether a total economic blockade of Russia holds. If not, NATO will be toppled in lieu of Putin. And Putin is going to turn his attention to the Baltics next, and make threatening noises about Poland the border of which is going to be heavily armed. I hope I am wrong, but fearing the worst has proven spot on. Putin has been planning this for a long, long time. It is his raison d'etre, his white whale. Thank God Trump is not POTUS.

[Torie]

Russia vetoes the UN Security Council resolution that called on Moscow to halt the attack on Ukraine, withdraw troops.  PRC abstains (leaving it to Russia to do veto themselves.)

Nope, it was a veto of a motion to chat. That was by design, to avoid a double veto that included China. Al Jezzera does the best coverage. They explained it all.

[Torie]

Glad that now there will be talks.  Most things Putin has been demanding are reasonable in my view and Ukraine should try to meet him halfway on that.  

What is not reasonable and I hope Putin drops are

a) Ukraine demilitarization (not even clear what that means, does it mean no Ukraine army or a Ukraine army with no weapons) - this is not a reasonable demand on a sovereign nation  
b)  Zelensky has to go - this does not benefit Russia anyway.  Unless Putin wants to annex Ukraine whole (then why have talks at all) Putin will need someone on the Ukraine side to make the deal (which most in West Ukraine will be negative on) to make it stick.  Zelensky sounds like the man for the job.  For sure a Russian puppet cannot make the deal stick in Western Ukraine

With respect, what you write does not make much sense to me. You opine almost as if this were pre invasion where the invasion had never happened. You can't put humpty dumpty back together again. What does "neutrality" even mean? Even if an attack on one is an attack on all is not on a piece of paper,  Ukraine needs to be armed to the teeth on a subsidized basis, and its people are not going to accept being a vassal of Russia and told what to do by Russia ala Belarus. That ship has sailed.

It seems more likely now that even if Russia takes over the key points in Ukraine, it will face a debilitating guerilla war that will end up destabilizing Russia no matter what Putin does. I don't see what further can be offered Putin. Ukraine being part of NATO was not in the cards before. I suppose it is more in the cards now, and Putin could be offered that it won't happen as a fig leaf, but if in lieu thereof, Ukraine is weaponized by the west as described above, it is still a Putin defeat. Putin has forced the hand of the civilized world to make him the loser. All other options are worse. I might add that Putin has no interest in honoring any agreement that he enters into when it proves inconvenient for him, so any such pieces of paper are largely worthless too. He just needs to get his military assets out of Ukraine.

I suggest that you manage your asset portfolio on the assumption that your hopes/predictions/whatever have little or no nexus with reality. Until Putin is dead or deposed, the world economic order needs (and at this point I believe will)  quarantine Russia as much as possible as rapidly as possible.

What Putin really needs is a good killing.